Consumer Issues
It is time to move from 'Buyer Beware' to 'Seller Beware', agrees RBI's Deepali Pant Joshi

Experience of banking consumers at each stage should be better than their previous experience, as per the RBI's thinking


At the MR Pai Memorial award function on Tuesday, Dr Deepali Pant Joshi, Executive Director of Reserve Bank of India (RBI) claimed that the special focus of the central bank is on customer interests, to the extent that she advocated that the system move from 'Buyer Beware to Seller Beware'.


Congratulating this year's MR Pai Memorial awardee, Moneylife Foundation, she said, “While it is the job and mission of the regulator to safeguard customer interests, it is organisations like Moneylife Foundation that add to the efforts of the Regulator and provide valuable inputs in creating customer service policy frameworks over time.”


In explaining how the regulator's role has evolved over the past decade, she spoke about the push for liberalisation since the early 90s and how the market was expected to inherently create competitive mechanisms which would eventually take care of customer interests. “However it is now realised that the 'invisible hand' of the market was not enough and regulatory intervention from time to time was necessary for both the stability of the system and consumer protection.”


She said, “While the line between regulation and paternalism is a very fine one, the RBI has made conscious efforts to stick to regulation and stay away from the latter.”


She went on to adress the connected ideas of financial inclusion, customer awareness and fiduciary responsibility. With renewed push for financial inclusion in the form of schemes like the Jan Dhan Yojana and the wider use of technology and banking correspondents, safeguarding customer interests, especially in rural areas becomes an even more daunting task. As more people enter the financial ecosystem for the first time, they remain vulnerable to mis-selling of products, frauds, fiscal imprudence and bad advice.


In this context, she said that since the 2008 crisis, the financial sector has been driven by the idea of consumer awareness and greater awareness about financial products, services and risks involved. But a lot more needs to be done. She spoke about the need for an “ingrained suitability clause in financial products,” this would put the onus of the suitability of the product on the banker or financial institution, instead of the customer. This would naturally mean that that it was high time that the financial services and banking institutions move from the maxim of Caveat Emptor (Buyer Beware) to Caveat Venditor (Seller Beware), she added.


Dr Joshi listed various steps taken by the RBI with an aim to achieve the goals she spoke about, like the simplification of the KYC norms for customers, the relaxation of document requirments, removal of foreclosure and pre-payment charges, rationalised charges on SMS alerts, removal of penal charges on accounts where the balance falls below the minimum required level and other such measures. “The only watchword is the present customer experience should be better than the experience of the previous generation of customers,” said Dr Joshi.


Towards the end, the RBI executive director said that “while technology has expanded the reach of banking services and financial products, it also suffers from the pitfall of de-humanisation of the banker-customer relationship and the fall of trust between the two.” She added that “the friendly neighbourhood banker and the feet on the street banker is a disappearing breed.”


In conclusion, she explained the RBI's vision in drafting the first iteration of the Consumer Rights Charter of the RBI, a first for Indian banks and customers, and she encouraged the audience to share their ideas with the RBI in making a better and stronger charter for customer rights.


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Zainulbhai is the new chairman of Quality Council

Adil Zainulbhai, former head of McKinsey India, would chair the apex accreditation body in India


Prime Minister Narendra Modi has appointed McKinsey India's former chief Adil Zainulbhai as the chairman of the Quality Council of India (QCI).


QCI, an autonomous body under the Department of Industrial Policy and Promotion, is a joint creation of Indian industry to operate the National Accreditation Structure for conformity assessment bodies and provide accreditation in the field of education, health and quality promotion.


It runs its accreditation programmes through two boards.


The National Accreditation Board for Education & Training runs accreditation of schools, while the National Accreditation Board for Hospitals and Healthcare Providers runs accreditation of hospitals, nursing homes, blood banks, and primary health centres based on their respective accreditation standards.


“I am pleased to inform you that the Prime Minister has approved your appointment as Chairman of the QCI for three years from the date of assumption of charge,” a 15th September letter to Zainulbhai from the Ministry of Commerce and Industry said.


A former chairman of McKinsey India, over the last 10 years, Zainulbhai has advised corporate leaderships of major companies in India and abroad.


“It is a privilege to give back via an institution with a strong focus on quality. I hope to bring in and promote quality consciousness throughout the country. It’s going to be an enriching and exciting journey,” he said.


Zainulbhai’s span of work includes catalysing Indian companies to become successful globally, helping public sector undertakings become more efficient and effective, and working with MNCs to enter India and build profitable, large and innovative businesses.


Co-editor of ‘Reimagining India’ that features 60 global businessmen, academicians, economists, authors and journalists, he has also worked with several parts of the Government and led efforts around urbanisation, inclusive growth and energy.


He serves on the boards of Reliance Industries, the American India Foundation, Saifee Hospital, Saifee Burhani Upliftment Trust (redeveloping Bhendi Bazaar in Mumbai), Network 18, and the advisory board of the Indian Institute of Technology, Bombay.


Formed in 1997, QCI is represented by the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI), and the Associated Chambers of Commerce and Industry (ASSOCHAM).


QCI has also been tasked with monitoring and administering the National Quality Campaign. Under this, it propagates concepts of quality and best practices among suppliers of products and services, even as it empowers consumers to demand quality through awareness programmes, conduct of surveys, publications, media campaigns and specialised training courses.


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