Envisioning the Future of Financial Consumer Protection in India
While financial access in India remains a primary concern and newer modes of distribution become reality, market participants and regulators are beginning to grapple with issues of consumer protection. This can be seen in recent debates around mis-sale of mutual funds by banks, predatory lending by non-bank financial institutions and the bundling of investment plans with life insurance (ULIPs). This leads to some fundamental questions on the future direction of financial consumer protection in India:
~ How does India balance the need for financial access and innovation with the requirements of consumer protection?
~ Given the product-specific regulatory structure, what are the suitable frameworks for consumer protection in finance?
~ What international experiences are relevant to determining the future of India’s consumer protection regime?
It seems a particularly appropriate time to address these questions, given that India is also undertaking a fundamental review of its financial sector legislation, with the creation of the Financial Sector Legislative Reforms Commission (FSLRC), whose mandate is to rewrite and harmonise all financial sector laws. In parallel, many countries around the world have embarked on reforming their consumer protection frameworks, with the US creating the Consumer Financial Protection Bureau (CFPB) and Australia and South Africa evolving the twin-peak models of financial regulation, providing us a unique opportunity to learn from emerging global experiences.
The IFMR Financial Systems Design Conference 2012 aims to stimulate discussion and debate on the possible frameworks for consumer protection in finance for India and arrive at an understanding of the most appropriate framework for India’s financial system.
Consumer Protection Blog Series
The theoretical underpinnings of consumer protection and its relevance to the provision of financial products and services. Consumer Protection: Recent Developments on the Regulatory Front in Developing Countries
Interview with Kate McKee of CGAP. Suitability & Disclosure: The Case of Australia
Covers conduct and disclosure obligations of Australian Financial Services (AFS) License holders for provision of advice to retail clients. Evolution of Consumer Protection Laws in India - Part 1
The historical evolution of the various sources of consumers’ rights in India today. Treating Customers Fairly in South Africa
‘Treating Customers Fairly’ (TCF) initiative which is being implemented in South Africa to ensure stronger market conduct regulation. To read our complete blog series on Consumer Protection click here