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Taking forward the suggestions of the Financial Sector Legislative Reforms Commission, the finance ministry has begun work on setting up a Financial Redress Agency that would be the first forum for independent grievance redressal of consumers.
Envisaged as one of the institutions to be set up through the proposed Indian Financial Code, the FRA would entertain complaints against all financial service providers and handle a large number of relatively low value complaints on a pan-India basis. It would also run a large scale customer-centric process to deliver efficient and effective processes Accordingly, the finance ministry has now set up a taskforce led by former PFRDA chairman D Swarup for conducting preparatory work for the proposed agency.
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The 10-member committee, which would also include representatives from the financial sector regulators including Reserve Bank of India, Sebi, IRDA and PFRDA, would review international best practices in consumer grievance redressal for financial sector, including options such as ombudsman and other dispute resolution mechanism.
It would also review the present practices of financial consumer redress in the country as well as appoint consultants to develop the framework for the FRA. “The task force will complete its task in one year,” said a finance ministry release on Friday.
