Module: | Deposits, Reserve Ratios & Branch Authorisation
Q279: Consider the following statements regarding the eligibility and independence criteria for the appointment of an Internal Ombudsman (IO) under the 2026 Directions, and select the correct option.
1. The Internal Ombudsman must be a retired or serving officer, not below the rank of General Manager or its equivalent.
2. The candidate must possess a minimum of seven years of working experience, in areas such as banking, regulation, or consumer protection.
3. A candidate is ineligible if they have previously been employed by the bank, its holding company, or any subsidiary company.
4. The appointee must not be over 70 years of age before the completion of the tenure.
2. The candidate must possess a minimum of seven years of working experience, in areas such as banking, regulation, or consumer protection.
3. A candidate is ineligible if they have previously been employed by the bank, its holding company, or any subsidiary company.
4. The appointee must not be over 70 years of age before the completion of the tenure.
✅ Correct Answer: D
The correct answer is Option D. The directions establish a rigorous profile for the Internal Ombudsman (IO) to ensure both seniority and absolute independence.
The appointee must hold the rank of General Manager (or equivalent) and possess a minimum of seven years of relevant experience in sectors like banking or consumer protection.
The age limit is strictly capped, ensuring the IO does not exceed 70 years of age before their tenure concludes.
Crucially, to prevent conflicts of interest, the rules enforce a permanent bar on anyone who has "previously been employed" or is "presently employed" by the specific bank, its holding company, associate, or subsidiary; however, a "serving officer" from an outside organization may be appointed provided they relinquish their current post before assuming the charge.
A General Manager is a senior executive rank in a Public Sector Bank, typically reporting directly to Executive Directors or the Managing Director, responsible for handling large zones or critical verticals.
A Holding Company is a parent entity that owns enough voting stock in another company to control its policies and management, while a Subsidiary Company is the entity so controlled.
Consumer Protection in banking refers to the regulatory framework that safeguards depositors against unfair practices, fraud, and service deficiencies.
The Internal Ombudsman acts as a quasi-judicial authority within the bank, functioning independently of the bank's management hierarchy to ensure impartial decisions.
To further secure this independence, the performance appraisal of the Internal Ombudsman is conducted by the Customer Service Committee of the Board rather than by the bank’s executive management.
The tenure of the Internal Ombudsman is fixed to preventing the bank from removing the officer due to decisions that may be unfavorable to the bank's commercial interests.
The position cannot be left vacant for long periods, and the bank must initiate the recruitment process well in advance of the current term's expiry.
The appointee must hold the rank of General Manager (or equivalent) and possess a minimum of seven years of relevant experience in sectors like banking or consumer protection.
The age limit is strictly capped, ensuring the IO does not exceed 70 years of age before their tenure concludes.
Crucially, to prevent conflicts of interest, the rules enforce a permanent bar on anyone who has "previously been employed" or is "presently employed" by the specific bank, its holding company, associate, or subsidiary; however, a "serving officer" from an outside organization may be appointed provided they relinquish their current post before assuming the charge.
A General Manager is a senior executive rank in a Public Sector Bank, typically reporting directly to Executive Directors or the Managing Director, responsible for handling large zones or critical verticals.
A Holding Company is a parent entity that owns enough voting stock in another company to control its policies and management, while a Subsidiary Company is the entity so controlled.
Consumer Protection in banking refers to the regulatory framework that safeguards depositors against unfair practices, fraud, and service deficiencies.
The Internal Ombudsman acts as a quasi-judicial authority within the bank, functioning independently of the bank's management hierarchy to ensure impartial decisions.
To further secure this independence, the performance appraisal of the Internal Ombudsman is conducted by the Customer Service Committee of the Board rather than by the bank’s executive management.
The tenure of the Internal Ombudsman is fixed to preventing the bank from removing the officer due to decisions that may be unfavorable to the bank's commercial interests.
The position cannot be left vacant for long periods, and the bank must initiate the recruitment process well in advance of the current term's expiry.