means, it is the customers ’ responsibility also to provide relevant, complete and accurate information on their financial situation and taking their personal as well as financial circumstances into account when making their decisions. the responsibility of the financial service provider may, therefore, be read and assessed in the light of the customer ’ s responsibilities. financial service providers need to understand that for their businesses to survive, their customers ’ must survive and for that, they need to understand the appropriateness of the products themselves to be able to explain it to their customers. the financial entities must not use the vulnerable sections to cross - subsidize the clientele with power to bargain and command a price of their choice. the reasonableness of service charges / interest rates must be ensured by way of commitment to the cause of financial inclusion. further, the service charges / penalties must not be disproportionate to the level of default. the bundling of products by banks with a view to generate more non - interest income would fall in the category of exploitative pricing. every bank / financial service provider, in order to expand its customer base, needs to understand the requirements of their customers, the risks involved and return to be achieved. the usa, which was affected the most by the crisis, had, in the aftermath of the crisis, initiated exemplary policy and other structural reforms to guard against financial instability ( dodd – frank wall street reform and customer protection act ). among the measures initiated, the customer protection aspect had received prime attention resulting in enactment bis central bankers ’ speeches of customer protection act and creation of customer financial protection bureau ( cfpb ) to assure that markets for financial products and services worked in a fair, transparent, and competitive manner and were subject to meaningful and consistent oversight. in india, setting up of financial stability and development council has also been with a similar view to strengthen and institutionalize the mechanism for maintaining financial stability by way of macro - prudential supervision together with focus on developmental aspects of customer protection, viz. financial literacy and financial inclusion. where the banking ombudsman comes in the role of the ombudsmen adjudicating financial consumer disputes is onerous and the recent upheavals in the market place have only heightened the consumers ’ expectations. the existence of a legal framework is a must for consumer protection. the ombudsmen, by definition, deal with individual grievances about which the common person is agitated. they cannot substitute effective legal and regulatory systems. expecting

broad structure for consumer protection that is underpinned by deposit insurance. india has the statutory framework for consumer protection by way of a consumer protection act. we also have the banking codes and standards board of india and a banking ombudsman scheme. the banking ombudsman scheme has been in existence for over fifteen years and is cost free for access bis central bankers ’ speeches by the common person. the banking ombudsman scheme ( bos ) is fully funded and managed by india ’ s central bank i. e. the reserve bank of india. as of now, bank customers can lodge a complaint with any of the fifteen offices of the banking ombudsman situated across the country, on twenty seven different grounds of deficiency in banking services. these grounds of complaint cover all the delivery channels as also customer touch points. the number of complaints handled under the bo scheme during the year 2010 – 11 was 71274 as against 79266 during 2009 – 10. though these numbers may not reflect the true picture about the quality of consumer care or the hardships faced by the common persons, given the vastness of our country and the large customer base numbering over 800 million, we are seized of the need for bringing about greater awareness about the ombudsman scheme, especially in small towns and villages. the bigger challenge facing us is that of financial inclusion and financial education. to address these issues, we have embarked on an ambitious plan of financial inclusion and are committed to providing access to financial services to every village with a population of 2000 or above by march 2012. the challenge of financial education, in a multi lingual and multi ethnic country like india, poses many operational difficulties, given the low levels of financial literacy and a population of 30 % which is uneducated. we are trying to tide over this situation by adopting multi - disciplinary and multi - channel strategies. despite having undertaken a number of initiatives for ensuring fair treatment to customers, it was realized that the efficacy of the tiered mechanism for customer grievance redress in banks was far from satisfactory. it was necessary to further develop a credible and effective functional system of attending to customer complaints by strengthening banks ’ internal structures to attend not only to the basic customer needs but the special needs of disadvantaged groups such as pensioners and small borrowers, including farmers. taking into account these considerations, a committee was constituted by the reserve bank. the committee was to look into the banking services rendered to retail and small customers and pensioners