Protection of consumer interest is one of the core guiding principles of the Reserve Bank’s policies and actions, said RBI Governor Shaktikanta Das.
Addressing a conference of the Reserve Bank of India Ombudsmen on Friday—on World Consumer Rights Day—Das pointed out that fair treatment of customers and effective grievance redress mechanism are the two important components of consumer protection.
"Fair treatment of customers would mean fair pricing of products and services, putting in place systems and procedures for transparency in dealing with customers and avoidance of mis-selling."
Prioritising fair treatment and effective grievance redress mechanism would enhance public trust in the financial system as well as in individual entities, he said and added that this in turn would contribute to the long term success of individual entities and promote financial inclusion.
Das said as part of RBI’s continuing engagement with regulated entities, it has been emphasised that the focus of the top management of regulated entities should be on nurturing a customer-centric approach and commitment to consumer protection.
"As stakeholders of the financial ecosystem, it is imperative that the growing customer base is offered fair and sustainable products and services. The increasing range and complexity of financial products and services can act as a barrier to comprehension and decision-making by consumers. Clear, transparent, and consistent communication regarding products, services, follow-ups, service charges, etc. are, therefore, very essential for establishing trust and fostering enduring customer relationships."
He also highlighted the importance of grievance redress mechanism saying fragmentation and inefficiency in grievance redress mechanisms can hinder timely resolution of consumer complaints.
Multiple layers and lengthy resolution processes should be avoided, he added.
On customer security
Das said it is critical to strengthen monitoring systems and use technology to detect potential frauds before they materialise.
"Maintaining a focus on root cause analysis of consumer grievances can result in preventing such complaints to come up repeatedly. With the advent of Artificial Intelligence (AI), cybersecurity challenges can rise manifold. They can expose consumers to identity theft, fraud, and unauthorized access to personal information which can affect consumer trust."
Das said financial Institutions must dedicate substantial efforts to protect customer information and ensure that vulnerabilities exposing customers to risk are promptly identified and addressed.
"A financially aware and vigilant consumer is best placed to handle threats such as phishing, phone scams, deepfakes and more. Lack of proper understanding can impede consumers' ability to navigate the financial landscape effectively, leaving them vulnerable to exploitation or fraud," he observed.
There is considerable scope for further deepening consumer awareness and financial literacy activities, particularly among the marginalised, less savvy and rural communities, Das said.
