Financial Literacy & Consumer protection

Source : www.rbi.org.in                                                                   Uploaded on RBI website : April 24, 2012

Subject : Remarks by Dr K C Chakrabarty, Deputy Governor, RBI in a Panel Discussion on Financial Literacy and Consumer Protection, Washington, DC, on April 22, 2012

The speech document not only highlight the focus of regulator on Financial Literacy & Consumer Protection. it also gives to some extent a direction of coming regulations. These points as synopsis of the speech document are as follows :

1. Focus to achieve the goal of providing access to banking services to all the villages in a time bound manner. Same is successfully achieved in case of villages with population more than 2000. Note that focus includes the volume of transactions in new accounts opened as a part of the financial inclusion drive (Pg 2)
2. Banks to allocate at least 25% of all new branches to unbanked rural areas. In addition mandated to open intermediary brick and mortar structure between the base branch & customer locations, which will lead to efficiency in cash management, documentation, redressal of customer grievances and close supervision of Business Correspondent operations (Pg 3)
3. Pricing should be transparent, non-discriminatory, non-exploiting and affordable. Regulation should ensure formulation of standardized products and services by all market players for the most vulnerable sections of society who do not have much idea about pricing (Pg 7)
4. In order to ensure the customer protection the Banking Ombudsman is instituted as an alternate dispute resolution mechanism . Further the possibility of enacting a comprehensive financial sector consumer protection legislation is examined (Pg 9)

Link to view Speech Document : http://www.rbi.org.in/scripts/bs_viewspeeches.aspx

regards

CA Niraj Bisht