If a covered wallet or prepaid-card issuer rejects a customer complaint, that rejection must be reviewed by an independent Internal Ombudsman inside the issuer before the customer is told to approach the RBI Ombudsman, and the issuer must be able to show the system, people and staff awareness to make that happen reliably.
On 14 January 2026 the RBI replaced its single 2023 Internal Ombudsman Master Direction with six entity-class-specific Directions. This one applies to non-bank PPI issuers, a class where complaint volume scales with instruments outstanding rather than branch count, which is exactly how its applicability threshold is written.
Who it applies to
Unlike the bank directions, the threshold here is instruments outstanding, not banking outlets.
- Non-bank PPI issuers with more than 1 crore Prepaid Payment Instruments outstanding as on 31 March 2025, or thereafter.
- An issuer crossing the threshold after 31 March 2025 must comply within six months of meeting it.
- Bank PPI issuers are not under this Direction, banks follow their own entity-class IO Directions.
What it requires
Grouped by what each obligation is about. Described in plain terms; verify the exact clause text against the source before acting.
The office
An independent Internal Ombudsman
An IO appointed for a fixed contractual term, independent of the issuer, sitting at the apex of the grievance-redress mechanism and reporting functionally to the Board. A Deputy IO may be appointed where complaint volume warrants.
How complaints reach the IO
Board-approved SOP + automated escalation
A Board-approved Standard Operating Procedure and an automated complaints-management system that auto-escalates every partly or wholly rejected complaint to the IO within 20 days, or, where an RBI/NPCI/card-network timeline applies, sufficiently in advance that the IO gets at least 10 days to review. For a digital-first issuer this is squarely a systems obligation.
30-day final decision
The final decision must reach the complainant within 30 days of the issuer first receiving the complaint.
Binding decisions & the customer's next step
The IO's decision binds the issuer unless the competent authority formally disagrees through a narrow Board-level route. Where a complaint is still rejected after IO review, the issuer must inform the customer of their right to approach the RBI Ombudsman.
Governance, staff awareness & reporting
Disseminate across all offices & train
Widely disseminate the IO guidelines among staff across all branches and administrative offices when communicating the appointment, including support and grievance teams, and feed analysis of complaints handled by the IO into staff training.
Board oversight & supervisory review
Periodic reporting to the Board committee handling customer service; implementation forms part of RBI's supervisory review.
Reporting to RBI
Notify any IO/Deputy IO appointment to RBI's Consumer Education and Protection Department within 5 working days, and file the prescribed quarterly returns by the 15th of the month following the quarter.
What changed from the 2023 Direction
If your framework was built on the 2023 Master Direction, these are the moves that matter:
- The single 2023 Master Direction was repealed and split into six entity-class Directions; non-bank PPI issuers now have their own. Existing IO appointments continue under it.
- The 1-crore-PPIs-outstanding threshold is anchored to 31 March 2025 "or thereafter", an issuer that crosses it later is pulled in, with a six-month runway.
- The quarterly return due date moved from the 10th to the 15th of the following month.
- Certain provisions are given a transition runway to 30 June 2026.
What RBI has penalised under the IO framework
No FY25-26 action in our tracker cites a PPI issuer's Internal Ombudsman framework so far, the IO-related penalties this year landed on commercial banks and NBFCs. The obligation set is the same, which makes their cited failures the playbook of what supervisors check.
Background & lineage
For non-bank issuers the lineage runs through the 2019 scheme for non-bank system participants, worth knowing when older institutional documents reference the repealed names.
- 3 Sep 2018Internal Ombudsman Scheme, for banks.
- 22 Oct 2019IO Scheme for Non-Bank System Participants, the first time PPI issuers were brought in.
- 15 Nov 2021Appointment of IO by NBFCs.
- 6 Oct 2022RBI (CIC - Internal Ombudsman) Direction, 2022.
- 29 Dec 2023RBI (Internal Ombudsman for Regulated Entities) Directions, 2023, consolidated all of the above; repealed 14 Jan 2026.
- 14 Jan 2026Six entity-class Directions, 2026, this PPI-issuer Direction is one of them.
Knowing the rule is step one
See how issuers distribute the IO SOP across every office and support team, and prove who acknowledged it.