Even as the planning authorities have said there has been no regulatory failure (“Fraud at Citibank not a regulatory failure” January 6), there is a need for a quick review of the performance of not only all the branches of the financial sector but the regulatory efficacy to protect customer’s interests and access to service providers, supervisory and audit. There are other apprehensions too. Take the banks’ new “one service for one pin” rule for ATM operations. This is not to be viewed in isolation. There is a clear pattern. For three years now, the banking regulator has been trying to persuade the new-generation private banks to issue pass books. But the banks have not fallen in line and continue to post monthly accounts to customers. Private insurers have closed 400 branches owing to cost considerations as if there are no other avenues to achieve this.
Mutual funds have gone a step ahead. They have cautioned even old investors that their investments would be redeemed if they do not fulfil the know-your-customer (KYC) requirements. This is authoritarian and arbitrary. They send emails and SMSs but do not send by post the requisite form for fulfilling the KYC requirements. For this, the customer has to go to some other place, stand in queue to obtain it and fill in the form with requisite proof, and then wait in another queue to file it. The respective regulators seem either helpless or have not appreciated the full implications of these restrictive practices.
Coming as these do in the face of the government’s anxiety to go ahead with pending reforms measures, there is a need for the regulators, the government, Parliament and the media to come to the customers’ rescue. This is even more important since these restrictive practices may impact the robust mobilisation of peoples’ savings that are necessary for the various projects in the 12th Plan. These require quick attention. We cannot be complacent about our financial sector in the belief that it is the engine for our accelerated economic development.
S Subramanyan, Mumbai
