Role of the Consumer Protection Act, 2019 in Banking Services
The Consumer Protection Act (CPA), 2019 is a landmark legislation in India which replaces the
Consumer Protection Act of 1986. It established a central consumer protection authority to
regulate matters related to the violation of the consumers right. The CPA 2019 explicitly
mentioned the banking services within its scope of operation. This means that the customers of
the banks also have protection from the act against unfair trade practices, misleading
advertisements, and deficiency in services by the banks.
The CPA is a protective shield for the people who use banking services. These rules ensure fair
and secure dealings between the banks and their customers including that
1. Banks must give clear and understandable information about their products and services
2. They must provide you with the right to choose the banking services and products of their
own choices. There must be no compulsion on the person to opt for any services.
3. Fair and ethical practices should be adopted by the banks to ensure that the customers do not
get exploited.
4. There must be an assurance that the banks will keep the personal information of their
customers private, secure and cannot share the information without the permission of the
person concerned.
The Consumer Protection Act has significantly impacted the legal framework of the banking
system by holding the banks accountable under the act for their wrong actions and omissions
ensuring that the customers are treated equitably. With the growing influence of technology in
the banking sector the consumer protection acts also emphasized over digital privacy of the
customer.
The consumer protection act not only guides the banks but also forms an agency to look upon the
activities of the various banks of the banking sector. The Act has empowered the Reserve Bank
of India to monitor the banking sector of the country. Furthermore, The Securities and Exchange
Board of India is a regulatory body that keep an eye over the security market in India.
These acts and regulatory bodies have combinedly created a legal obligation on the banks to
disclose all the necessary information regarding the product services, interest rates, fees, etc. to
provide a proper opportunity for the customer to make an informed decision regarding the same.
Analysis of the Act
The main objective of the act is to protect the consumers from being exploited but there are
number of obstacles that prevent them from being fully implemented.
The lack of consumer awareness is one of the main obstacles to the implementation of the
consumer protection act. People consider it to be time consuming and a laborious procedure. The
large number of cases is also the reason for the delay in justice. As well as many consumers may
find the cost of legal counsel to be prohibitive which restricts their access to legal remedies.
Conclusion
Understanding the legal rules and framework established by the acts keep an eye over the
banking industry in India which is essential for everyone. These are the laws that keep the
financial system stable and honest. As a customer of the banking industry knowing these rules is
a better option to make informed choices.
