to prevent incidents of fraud in areas of mobile / net banking and electronic fund transfer. treating customers fairly, “ tcf ”, also must ensure that there is a clear specification of liability, if things go wrong. simplicity of the product sold must be ensured and there is a duty to inform the customer about the features of the product. mis - selling will invite consequences. banks must help customers fully understand the features, benefits, risks and costs of the financial products they buy, minimize sale of unsuitable products by encouraging best practice before, during and after the sale the sense of protection which consumers expect and experience while dealing with banks is the benchmark against which we need to evaluate our customer care and customer service policulture of customer - centricity and sensitivity to the needs of the customers especially those belonging to the vulnerable sections of the society. the market forces, competition, technology will continue to help banks achieve better penetration and extend their reach, but these attributes must also result in better, affordable and easy access to banks and banking. as dr. rajan puts it, we need a frugal model. we all need to enshrine basic rights for all financial services consumers by way of a charter of bank customers ’ rights. fslrc has expressed that all financial laws and regulations must protect the interests of the consumers. it recommends a framework for customer protection against mis - selling and defrauding through the fine print stealth banking etc. we must protect customers against unfair contract terms, unjust conduct and protection of personal information through fair disclosure and redress of consumer complaints by financial services providers. annual policy statement released on april 1, 2014 by dr rajan, governor rbi has clearly spelt out that consumer protection is an integral aspect of financial inclusion. the reserve bank proposes to frame comprehensive consumer protection regulations based on domestic experience and global best practices. the banks that have internalized the codes enunciated by the bcsbi may not have much difficulty in adapting to the new statutory framework. the statutory framework also comes with explicit rights, the customers enjoy and the implicit duties that are cast on the banker. the nachiket mor committee on comprehensive financial services for small businesses and low income households has pointed out and i quote “ when the fact is considered that imbalances in information, expertise and power between the buyer and seller of financial products will only be exacerbated in the future then it becomes clear that, existing approaches to customer protection have severe limitations. the “

debt flows and for long term flows over short term flows. but in the real world, we seldom find ourselves in such a sweet spot ; capital flows are either too much or too little. when capital flows are far in excess of cad, the exchange rate appreciates out of line with fundamentals. and if the flows are volatile, that will be reflected in the exchange rate movement too. the reserve bank then has to make a judgment on whether or not to intervene in the forex market. this is not as straight - forward as it seems. if we intervene to buy foreign exchange in the market, volatility may be smoothed and exchange rate bis central bankers ’ speeches appreciation contained, but systemic rupee liquidity goes up, and that could add to inflationary pressures. inflation, as we know, results in a real appreciation of the currency. so, our effort to solve the problem of nominal appreciation of the currency, lands us with a problem of real appreciation. to get around this problem, that is to contain inflationary pressures, we sometimes “ sterilize ” the excess liquidity. this may contain inflation pressures, but raises a host of other problems. sterilization puts upward pressure on interest rates which erodes our competitiveness. higher interest rates also attract more capital flows, thus again, in a curious variant of the dutch disease, accentuating the very problem that we were, in the first place, trying to resolve. as you see, there are no straight - forward solutions – every solution raises a fresh problem. volatile capital outflows pose similarly complex policy choices. in this case, the exchange rate tends to depreciate, again out of line with fundamentals exacerbating inflationary pressures and also hurting the government and corporates who have external debt obligations. in an outflow situation, financing of the current account deficit could also turn into a problem. both when inflows and outflows are out of line with our requirement, the reserve bank has to make a determination on whether or not to intervene in the foreign exchange market to contain volatility and prevent instability. as i explained above, no option is totally benign ; no matter what option we follow, there are costs. our effort always is to make an assessment of the forces driving the capital flows and act only to smooth volatility in the exchange rate movement and prevent disruptions to macroeconomic stability. in doing so, we have to be mindful of the inflation situation,