Mistakes, Problems and Official Sources
Complaint against a bank or NBFC on a business loan: lender first, then RBI Ombudsman 2026
How an MSME complains about wrong charges, refused prepayment, harassment or rate errors on a business loan, from the lender's grievance officer to the RBI Ombudsman scheme of 2026.
If a bank, NBFC or other RBI-regulated lender has charged you a fee not in your Key Fact Statement, refused a pre-payment that RBI rules allow, failed to pass on a rate cut, kept your documents after closure or harassed you through recovery agents, complain in writing to the lender first and escalate to its principal nodal officer. If the lender does not reply within 30 days, or rejects the complaint, you can file with the RBI Ombudsman through RBI's online complaint management system. Complaints filed from 1 July 2026 are handled under the Reserve Bank – Integrated Ombudsman Scheme, 2026, which removed the cap on the amount in dispute and raised maximum compensation to ₹30 lakh for consequential loss plus up to ₹3 lakh for loss of time, expenses and harassment.
This guide belongs to the MSME loan mistakes and rejections overview. Check the scheme text on the RBI website for the exact time limits, which changed in 2026.
What you can complain about
| Problem | Rule or document to cite |
|---|---|
| Charge not shown in the KFS | RBI Key Facts Statement instructions: no undisclosed charges without explicit consent |
| Pre-payment charge on a floating-rate MSE loan sanctioned after 1 Jan 2026 | RBI pre-payment charges directions (July 2025); see prepayment |
| Collateral demanded on an MSE bank loan up to ₹20 lakh sanctioned from 1 April 2026 | RBI Lending to MSME Sector directions as amended in February 2026 |
| Rate not reset after repo cut | Your sanction letter's benchmark and reset clause; see EBLR vs MCLR |
| Penal interest added to the rate, or penal charges capitalised | RBI penal charges instructions |
| No reasons given for rejection | Fair practices code |
| Harassment by recovery agents | RBI recovery agent guidelines; also police if threats are made |
| Original documents not returned after closure | Lender's commitment in the sanction letter; RBI instructions on release of movable and immovable property documents |
| Wrong data reported to credit bureaus | Lender and the credit information company; see credit reports |
Step 1: complain to the lender properly
- Write to the branch or the lender's grievance email or portal. Give your loan account number, the problem, the amount involved, the rule you rely on and what you want (refund, correction, interest, document return).
- Attach evidence: KFS, sanction letter, statements showing the charge, emails.
- Keep the complaint reference number.
- If unresolved, escalate to the grievance redressal officer or principal nodal officer, whose details lenders must display on their websites and branches.
Worked example: claiming a refund of an undisclosed charge
An illustrative ₹20 lakh loan's KFS shows a 1% processing fee plus GST (₹23,600) and no other charges. At disbursal, the lender also deducts a ₹15,000 "login and documentation fee" plus GST of ₹2,700.
- Amount to claim: ₹17,700, plus interest on it if you want to ask for that.
- Basis: the charge is not in the KFS and you did not give explicit consent.
- If the lender says the fee is in the loan agreement's schedule, point out that RBI's KFS rules require the KFS to list all charges.
The processing fee and GST calculator helps you show what should have been deducted.
Step 2: the RBI Ombudsman
You can approach the Ombudsman if the lender rejected the complaint, gave an unsatisfactory reply, or did not reply within 30 days.
- Where: online through RBI's Complaint Management System, or by email or post to the Centralised Receipt and Processing Centre as described on the RBI website.
- Cost: free. You do not need a lawyer or an agent; complaints filed through advocates are among those the scheme treats as not maintainable.
- Time limit: the 2026 scheme cuts the filing window to 90 days from the lender's reply or from the end of the 30-day reply period, down from one year (one year and 30 days if there was no reply) under the 2021 scheme. Check the scheme document on the RBI website and file promptly.
- Covered entities: banks, NBFCs (with exceptions based on size and type), and other RBI-regulated entities as listed in the scheme; credit information companies are also covered. Housing finance companies are not covered by the 2026 scheme; complaints against them go to the National Housing Bank.
- Not maintainable: among others, matters already in court or with another forum, complaints about a lender's commercial judgment (for example a decision not to lend), and complaints not first made to the lender.
Outcome. The Ombudsman first tries conciliation, then can pass an award directing the lender to pay. Under the 2026 scheme, the cap on the amount in dispute has been removed; compensation for consequential loss can go up to ₹30 lakh, and up to ₹3 lakh can be awarded for loss of time, expenses, harassment and mental anguish. An appeal lies with the appellate authority in RBI.
Other routes for MSMEs
| Issue | Where to go |
|---|---|
| Delayed payment by a buyer | MSME Samadhaan and the state MSE Facilitation Council; see TReDS and the 45-day rule |
| Unregistered lender, illegal app, fake scheme agent | Sachet portal of RBI; cyber crime portal or helpline 1930; local police |
| Public sector bank service complaints | CPGRAMS, the central government's public grievance portal |
| Large disputes, recovery cases | Civil courts, Debts Recovery Tribunal; consult an advocate |
| Credit report errors | The credit information company's dispute process |
Frequently asked questions
Can a private limited company file with the RBI Ombudsman?
The scheme covers "customers" of regulated entities, which includes businesses. Check the eligibility and exclusions in the scheme document for your lender type.
Will complaining affect my loan or limit?
A lender cannot penalise you for using the grievance process. Keep the tone factual and continue to service the loan while the complaint is pending.
Is the Ombudsman's decision binding?
An award binds the lender if you accept it; if you do not accept it, you remain free to pursue other remedies. Either side may appeal to the appellate authority as provided in the scheme.
My complaint was filed in June 2026. Which scheme applies?
Complaints received before 1 July 2026 continue under the 2021 scheme.
Sources
- Reserve Bank of India — Integrated Ombudsman Scheme, 2026 and regulated entity lists
- RBI Complaint Management System — file and track complaints
- MSME Samadhaan — delayed payments to MSEs
- CPGRAMS — public grievance portal
- Sachet — report unauthorised entities
