Standing Committee of Parliament asks ministry of corporate affairs to reconsider its decision to close Investor Helpline project

The Standing Committee of Parliament (SCP), headed by its chairman Yashwant Sinha has requested the ministry of corporate affairs (MCA) to reopen the Investor Helpline project. In a report that was presented to the Lok Sabha on 24 April 2012, it said, "The Committee notes that the ministry has decided to discontinue the Investor Helpline Project as it has restructured its complaint module on MCA-21 System. The Committee, however, feel that since net penetration in India is rather low, especially in Tier II and Tier III cities and remote areas of the country, the ministry should reconsider its decision to discontinue Investor Helpline Project." If reconsidered, it is good news for the investor community.

Investor Helpline (http://www.investorhelpline.in/) was launched in 2006 as an alternative grievance redressal mechanism. It has since redressed more than 10,000 complaints spanning over ten years. However, the MCA had discontinued the Investor Helpline project as it had created a new system in place, which would handle issues 'better'. The MCA had written in the report, "The ministry has restructured its complaint module on MCA-21 System with a view to making investor grievance redressal more effective and responsive. In order to avoid duplication of work and also to save government funds, it was decided to discontinue the Investor Helpline project."

Apparently, MCA's track record of solving investors' grievances is poor. It is believed that around 15% of the investor complaints forwarded to the regional registrar by the Investor Helpline were acknowledged, according to Virendra Jain, president, Midas Touch Investors Association, which runs the Investor Helpline portal. Ironically, it shut down after MCA had mentioned that Investor Helpline "has been rendering effective service to the investors." in its 2010-11 Annual Report.

Moneylife had earlier written about MCA's retrograde actions in shutting down Investor Helpline being shut down: Corporate affairs ministry stops funding of investors’ forums without giving any reason

The aim of Investor Helpline is to redress investor grievances free of charge on a best-effort basis. A registered user can also track the status and progress of the complaint. Apart from a step-by-step guide to register complaints, it provides feedback on complaints that have been resolved. It is very interactive and user-friendly and tries its level best to resolve as many problems as possible. Investor Helpline was one of the first facilities which took up investor grievances-against companies and mutual funds-falling under three different regulators i.e. MCA, SEBI & RBI. This eliminated the hassle for an investor to search for different service providers for each regulator.

Moneylife has compiled a list of useful websites for consumers to make online complaints. Online Complaints: Cyberscream