Globalization and Consumer Protection in Financial Sector

Abstract

Globalization has become the buzzword; with TNCs proliferating all across the world, marketing their products and services. This has spurred growth, improved real wages and brought in more FDI and technology to India. However, the global financial crisis (2007-08) has underscored the need to be wary of shadow banking, toxic products like CDOs and conflict of interests of Rating Agencies. Consumers at the lower end of the income spectrum are particularly vulnerable in such unstable systems. The paper brings out the features of the Consumer Protection Act 1986 and its update in the Consumer Protection Bill 2015 and FSLC recommendation for a FRA in the financial sector. It draws upon the experience of countries like USA and European Union who have been brought in a high modicum of consumer protection. The paper calls for unification of all regulatory agencies to ensure a holistic regulation of goods, services, E-commerce and financial products with ICT as a force multiplier. It also underscores the importance of competition and need for CCI to work in tandem with the unified regulator to make consumer protection truly effective.

Keywords: FSLC, CCI, ICT, FRA, WTO, EMDF, CDO, FDI