The Reserve Bank of India (RBI) on Friday issued the draft of a charter comprising five basic customer rights.
Feedback has been invited by September 22. These cover a right to fair treatment, transparency, suitability, privacy, grievance redress and compensation.
The draft Charter of Customer Rights to deal with entities regulated by the Reserve Bank, has been framed based on global best practices in this regard, it said, as also discussion and interaction with various stakeholders.
The Charter spells out the rights of the customer and also the responsibilities of the financial service provider (FSP). In the right to fair treatment, RBI has said both the customer and the FSP 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," it said.
However, the FSP can have certain products specifically designed for members of a target market group or may use defensible, commercially acceptable economic rationale for discriminating between customers.
The right to transparency, fair and honest dealing entails that the FSP make every effort to ensure the contracts or agreements it frames are transparent, easily understood by and well communicated to a lay citizen.
RBI said the product’s price, associated risks, customer responsibilities and the terms and conditions that govern use over the life cycle should be clearly disclosed.
The customer is not to be subject to unfair business or marketing practices, coercive contractual terms or misleading representations.
“Over the course of their relationship, the FSP cannot threaten the customer with physical harm, exert undue influence or engage in blatant harassment,” said RBI.
In its first bi-monthly Monetary Policy Statement (2014 - 15) announced on April 1, RBI had said consumer protection was an integral aspect of financial inclusion.
It had proposed to frame comprehensive consumer protection regulations, based on domestic experience and global best practices.
This draft charter is a sequel. On the right to suitability, RBI said the products offered should be appropriate to customer need and based on an assessment of the customer’s financial circumstances and understanding.
All customers will also have a right to privacy. Personal information should be kept confidential, unless they have offered specific consent to the FSP or such information is required to be provided under the law or 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," the central bank said.
There is also a right to grievance redress and compensation. The customer has a right to hold the FSP accountable for the products offered and to have a clear and easy way to have any valid grievances redressed.
The regulator said the provider should also facilitate the redress of grievances stemming from sale of third-party products.
The FSP must communicate its policy for compensating mistakes, lapses in conduct, as well as non-performance or delays in performance, whether caused by the provider or otherwise.
Right to Fair Treatment: No discrimination on basis of gender, age, religion, caste and physical ability
Right to Transparency, Fair and Honest Dealing: Contracts or agreements between financial service provider and customer should be transparent and easy to understand Right to Suitability: Products offered should be appropriate to the needs of the customer
Right to Privacy: Customers' personal information to be kept confidential. No unwarranted communication, electronic or otherwise, to be sent
Right to Grievance Redress and Compensation: Financial services provider accountable for products offered (including third party products). Provider to facilitate easy grievance redressal