Reserve Bank of India (RBI) Governor Shaktikanta Das has issued a strong directive to technology companies and financial institutions, urging them to ensure that the relentless march of digitalisation and innovation ultimately serves the consumer's interest. He cautioned that without careful alignment, technological progress could lead to unfair outcomes for customers.
A Call for Ethical Innovation in Finance
Speaking at the annual RBI Ombudsman Conference in Mumbai on November 29, 2024, Governor Das emphasised that while innovation is crucial for growth, it must be responsible. He stated that the core objective of any financial service, digital or traditional, must be to benefit the end-user. "We must ensure that digitalisation and innovations are aligned with fair outcomes for consumers," Das asserted, highlighting a growing concern in the rapidly evolving fintech landscape.
The Governor pointed out that the very features that make digital finance convenient—speed, accessibility, and automation—can also become sources of consumer detriment if not implemented thoughtfully. He warned against practices that might exploit behavioural biases or create opaque systems where customers have little recourse.
Strengthening the Grievance Redressal Ecosystem
A significant portion of Das's address focused on the critical need for a robust grievance redressal mechanism. He revealed that the Integrated Ombudsman Scheme, launched to streamline complaint resolution, has been a major success. Since its inception, the scheme has handled a staggering volume of cases.
Over 1.25 lakh complaints were resolved in the last fiscal year (2023-24) alone, with a total resolution rate exceeding 98%. This system has successfully addressed more than 4.5 lakh complaints in its lifetime. Governor Das credited this efficiency to the dedicated efforts of Ombudsmen and their teams across the country.
However, he stressed that the system must evolve alongside technology. "As the nature of complaints changes with emerging technologies, our redressal mechanisms must also be upgraded with adequate tech support," Das noted. He called for continuous training and digital empowerment of the redressal staff to handle complex, tech-driven complaints effectively.
The Path Forward: Regulation and Responsibility
Governor Das outlined a dual approach to safeguarding consumer interests. First, he underscored the RBI's commitment to playing a proactive regulatory role. The central bank will continue to frame guidelines and policies that create a safe environment for digital financial transactions, preventing systemic risks and unfair practices.
Second, and equally important, he placed onus on the industry. Das called upon banks, non-banking financial companies (NBFCs), and fintech firms to adopt ethical business practices and self-regulation. He urged them to build consumer trust by design, ensuring their products are transparent, simple, and have built-in safeguards.
The Governor's speech serves as a clear reminder that in the race to innovate, the consumer must not be left behind. It signals the RBI's intent to closely monitor the digital finance space, ensuring that the benefits of technology are distributed fairly and do not come at the cost of consumer rights or financial stability. The conference saw the participation of key officials, including Deputy Governors and senior RBI executives, reinforcing the importance of the topic for India's financial regulators.
