In an exclusive interview with the BBC, Nicola Williams, the first person to hold the office of Service Complaints Ombudsman, said that "incidents of racism are occurring with increasing and depressing frequency".
Cases of bullying, harassment and discrimination account for 25 per cent of all the complaints the ombudsman receives, and Williams has said that a "disproportionate" number of those come from ethnic minorities who make up just 7 per cent of the armed forces.
The BBC has interviewed one former soldier whose complaint of racism was at first dismissed by the Ministry of Defence (MoD), but then upheld by the ombudsman.
Mark De Kretser, whose father came from Sri Lanka, served as a regular soldier and then as a reserve for nearly 30 years.
De Kretser said the racism was "relentless" and had a breakdown leading to him being medically discharged from the Army in 2017. He sued the MoD and has now received a financial settlement.
In another incident, an employment tribunal found that Hani Gue and Nkululeko Zulu had been working in a "degrading, humiliating and offensive environment" at their Colchester barracks with racist graffiti written across personal photos.
Williams told the BBC that she "would not go as far" as to describe the army as "institutionally racist".
But "I would absolutely say the Army and the armed forces have issues with racism which need to be tackled", she added.
The MoD has however, insisted that it was committed to stamping out racism.
In a statement the MoD said "racism has no place in the military and anyone found to be behaving in such a way can expect to be disciplined, discharged or dismissed".
( With inputs from IANS )