Banks sell a large number of banking or 'third party' financial products merely as agents. These include mutual funds, Insurance Schemes, art funds,complex derivatives, structured products, and wealth management services. While, in principle, there may be nothing wrong with all this, often, the selection of products is based on fees and commission earned by banks. So bankers treat their millions of captive depositors -customers as sales targets.On 25th May, Dr. Raghuram Rajan, Governor of the RBI met customer activists and commentators to seek feedback specifically on the issue. Following that, Money life foundation sought specific customer feedback through an online survey. The findings of the survery are startling:
- Over 90% of respondents believe they have been mis-sold a financial product or service.
- Over 84% believe that "banks should not sell third party products because banks lack accountability
- 50% reported that their bank forced them to buy such products.
- 75%complained about credit cards being sold that they did not want or need
- Predictably 83% of respondents said they were coerced into buying insurance - the mis-sold product. And 66% complained about being mis-sold ULIPS
- More than 68% said that banks are aggressive about selling their group's products, especially at the time of negotiating a loan.
- As many as 70% said do not have an effective grievance redress system and 69% believe banks will not take responsibility for the quality of products they recommend
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