Individuals and small borrowers are soon to get more rights A committee constituted by RBI has suggested introducing a new law which will make banks more accountable to customers and safeguard their interests.
A senior banker in know of the development said, “The committee has proposed that there is a need for a specific law to cover consumers of financial services, something that exists in developed markets like the US and the UK. In India, we don’t have a specific law for that purpose”.
The committee was established in respect of this subject as it was thought that there are usually very few alternatives for customers. They can either contact the banking ombudsman or invoke consumer protection act.
Even the Fair Practices Code has been useless. A chairman of a leading commercial bank said, “I have my doubts if the Fair Practice Code is followed in true spirit since there is no legal obligation on lenders. In fact, the Right to Information Act is far more effective because it is legally binding on us and borrowers are actively using it to know the status of the loan”.
However few banks are taking measures to give power to their customers. PNB chairman and MD, KR Kamath said, “The idea is to enforce customers and bring more efficiency in the system”.
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