RBI drafts ‘Charter of Consumer Rights’ for financial services sector
22 Aug 2014
The Reserve Bank of India today placed on its web site a draft Charter of Customer Rights comprising five basic customer rights that deal with financial services entities regulated by the central bank, and explanatory notes thereon, for public comments.
RBI said the draft Charter of Customer Rights has been framed based on global best practices of consumer protection as also discussions and interaction with various stakeholders.
The charter spells out the rights of the customer and also the responsibilities of the financial service provider.
RBI proposes to frame comprehensive consumer protection regulations based on domestic experience and global best practices. The draft charter for customer rights has been prepared in accordance with this announcement.
The Draft Charter of Customer Rights calls for:
Right to Fair Treatment: Both the customer and the financial services provider have a right to be treated with courtesy. The customer should not be unfairly discriminated against on grounds such as gender, age, religion, caste and physical ability when offering and delivering financial products.
Right to Transparency, Fair and Honest Dealing: The financial services provider should make every effort to ensure that the contracts or agreements it frames are transparent, easily understood by and well communicated to, the common person. The product's price, the associated risks, the customer's responsibilities and the terms and conditions that govern use over the product's life cycle, should be clearly disclosed.
The customer should not be subject to unfair business or marketing practices, coercive contractual terms or misleading representations. Over the course of their relationship, the financial services provider cannot threaten the customer with physical harm, exert undue influence, or engage in blatant harassment.
Right to Suitability: The products offered should be appropriate to the needs of the customer and based on an assessment of the customer's financial circumstances and understanding.
Right to Privacy: Customers' personal information should be kept confidential unless they have offered specific consent to the financial services provider or such information is required to be provided under the law or it is provided for a mandated business purpose (for example, to credit information companies). The customer should be informed upfront about likely mandated business purposes. Customers have the right to protection from all kinds of communications, electronic or otherwise, which infringe upon their privacy.
RBI suggested that specific and actionable comments may be emailed or sent by post to RBI's Mumbai office latest by 22 September 2014.
