RBI suggests forming unified agency to redress all financial complaints

The government should form a unified financial redress agency (FRA) to resolve customer grievances relating to financial products and services, a Reserve Bank of India (RBI) committee said on Tuesday.

"A unified FRA be created by the Ministry of Finance as a unified agency for customer grievance redress across all financial products and services which will in turn coordinate with the respective regulator," the panel said in its report on financial inclusion.

At present, a customer has to approach different regulators like RBI, Irda and Sebi for various financial services and there is absence of a single co-ordinating agency which will take care of all customer grievances.

As per the report, the FRA should be present in every district in the country where customers can register their complaints over the phone, using text messages, the internet, and with the financial services provider directly, who should then be required to forward them to the redressal agency.

Prescribing a time line, the panel, headed by ex-ICICI Bank executive director Nachiket Mor, said, "The customers should have their complaints resolved within 30 days of registration with the FRA."

In the light of rising cases of unregistered financial services firms raising money from general public, the Mor committee said the apex bank should create a system in which any customer can effortlessly check whether a financial firm is registered with or regulated by the RBI.

"Once the FRA comes into being, this system should be subsumed under the FRA and be available for firms registered under all regulators."

The RBI panel also called for formation of a state finance regulatory commission (SFRC) by merging all existing state-level watchdogs.

"An SFRC could be created into which all the existing state-level regulators could be merged and functions like the regulation of NGO-MFIs and local money services business could be added on," the report said.

"There is value in bringing the regulatory function close to the enforcement function under the economic offences wing (EOW), to ensure they are working closely together," it said, adding local regional directors of RBI and district magistrate among others can play critical role in this entity.