{"id":215126,"date":"2022-11-19T20:12:24","date_gmt":"2022-11-19T14:42:24","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=215126"},"modified":"2022-11-20T11:16:05","modified_gmt":"2022-11-20T05:46:05","slug":"why-regulators-must-take-a-coordinated-approach-to-protect-financial-consumers","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/why-regulators-must-take-a-coordinated-approach-to-protect-financial-consumers\/","title":{"rendered":"Why regulators must take a coordinated approach to protect financial consumers"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cWhy regulators must take a coordinated approach to protect financial consumers\u201d <\/strong>published in The Indian Express <\/strong>on 19th November 2022<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- Mobilisation of resources<\/p>\n

Relevance: <\/strong>Financial services<\/p>\n

News- <\/strong>The article explains the G20\/OECD draft of the proposed revisions to their 2011 High-level Principles on Financial Consumer Protection.<\/p>\n

What has been proposed by G20\/OECD released a draft of the proposed revisions to their 2011 High-level Principles on Financial Consumer Protection (FCP)?<\/strong><\/h5>\n

The 2011 principles covered 10 thematic areas reflecting the market and consumer issues, including equitable and fair consumer treatment, disclosures and transparency, and financial education<\/strong>.<\/p>\n

In 2022, two additional principles were included, that are access and inclusion and quality financial products<\/strong>.<\/p>\n

The updated principles also recommend intervention by regulators in certain high risk products, cultivating appropriate firm culture and using behavioural insights<\/strong> to better consumer outcomes.<\/p>\n

These principles deal with three cross-cutting themes \u2014 financial well-being, digitalisation and sustainable finance<\/strong>.<\/p>\n

What should be the consideration of FCP policies? <\/strong><\/h5>\n

Financial well-being<\/strong>– FCP policies must contribute to overall financial well-being and resilience of consumers.<\/p>\n

An effective FCP regime should provide information to consumers that is adequate and understandable<\/strong>. However, merely providing information for compliance is not enough, especially in India where financial literacy is low.<\/p>\n

Digitalisation<\/strong>– FCP must factor in the increasing number of digital channels used by consumers to interact with financial products and services. The impact of greater use of artificial intelligence <\/strong>and other emerging technologies also needed to be considered.<\/p>\n

Additionally, concerns regarding redress of grievances<\/strong> against payment service providers in the UPI ecosystem should be taken care of.<\/p>\n

Sustainable finance<\/strong>– There is growing consumer demand for sustainable financial investments<\/strong>. Financial services providers are incorporating environmental, social and governance factors<\/strong> into their operations, products and services.<\/p>\n

FCP recommends improved transparency<\/strong> to help consumers make informed choices.<\/p>\n

Avoid greenwashing<\/strong>– The 2022 draft also warns against \u201cgreenwashing<\/strong>\u201d. Financial regulators must monitor that corporations are not misleading consumers with false claims regarding progress towards climate targets.<\/p>\n

What steps are taken by India regulators in this regard?<\/strong><\/h5>\n

SEBI prescribes certain financial service providers to assess customer suitability <\/strong>and undertake risk profiling<\/strong> before providing services.<\/p>\n

The RBI has\u00a0 released guidelines on digital lending. It has mandated entities providing digital lending services to have a grievance redress officer, assess a borrower\u2019s creditworthiness before extending credit and allow a borrower to exit without penalty.<\/p>\n

SEBI has transitioned from \u201cbusiness responsibility reporting\u201d to \u201cbusiness responsibility and sustainability reporting\u201d<\/strong>. The purpose is to\u00a0 promote responsible corporate governance <\/strong>for climate change. Eligible companies under BRSR must provide environmental sustainability <\/strong>related disclosures, including a sustainability performance report<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cWhy regulators must take a coordinated approach to protect financial consumers\u201d published in The Indian Express on 19th November 2022. Syllabus: GS3- Mobilisation of resources Relevance: Financial services News- The article explains the G20\/OECD draft of the proposed revisions to their 2011 High-level Principles on Financial Consumer… Continue reading Why regulators must take a coordinated approach to protect financial consumers<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10500],"class_list":["post-215126","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704898656},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/215126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=215126"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/215126\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=215126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=215126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=215126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}