The second chapter of the IFMR Financial Systems Design Conference Series was held at our office on August 31-September 1, 2012. This year, we identified ‘Envisioning the Future of Financial Consumer Protection in India’ as the theme for the Conference. The objective of the conference was to stimulate discussion and debate on the possible frameworks for consumer protection in finance for India and arrive at an understanding of the most appropriate framework for India’s financial system.
In the introductory session, Dr. Nachiket Mor shared his thoughts on the future of finance in India and set the context for a discussion on appropriate frameworks for financial consumer protection in India.
The full transcript of the keynote address is available here.
The conference identified three stylised approaches for financial consumer protection:
- An “information disclosure and financial literacy” based approach that argues that consumer welfare is best enhanced by providing more information to consumers while working in parallel on improving consumer financial knowledge.
- An “eliminating conflicts of interest” based approach where the belief is that the core problem in financial services delivery is the conflict of interest between the manufacturer and the distributor or advisor.
- A “suitability” based approach that argues that the onus of consumer protection must shift decisively from the consumer to the financial services provider, and that the provider must be legally liable for advice given or product sold to the consumer.
The two day event saw active participation and debate on consumer protection issues in India and the way forward. In the following weeks, we will share detailed outcomes of the discussions of the sessions.