Consumer protection in India has a rich history, with the Consumer Protection Act (CPA) of 1986 serving as a landmark achievement in safeguarding consumer rights. This legislation aimed to provide mechanisms for addressing grievances and ensuring fair practices in the marketplace. However, challenges persist, including unethical business practices and the "Caveat Emptor" principle, which places the burden on consumers to be vigilant. To address these evolving issues, the Government of India introduced the Consumer Protection Act of 2019.

This updated legislation focuses on modern challenges, particularly in the digital and e-commerce landscape, enhancing consumer protections and streamlining complaint processes. It empowers consumers to assert their rights more effectively in an increasingly complex market. Despite these advancements, raising awareness about consumer rights remains essential. Many consumers, both literate and illiterate, are unaware of the protections available to them.

Ongoing education and outreach efforts are necessary to ensure individuals can navigate their rights confidently. Overall, the evolution of consumer protection in India reflects a commitment to creating a fair marketplace, ultimately empowering consumers to make informed decisions and seek redress when needed.

Introduction
"A customer is the most important visitor on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider on our business. He is part of it. We are not doing him a favor by serving him. He is doing a favor by giving us an opportunity to do so". - Mahatma Gandhi

"The State is known by the rights it maintains. We all are consumers in one form or another. But in the present socio-economic set up we find that consumer is the target of many unfair and unethical ways adopted in the marketplace. The untrained consumer is no match for the businessman marketing goods and services on an organized basis and by trained professionals. He is very often cheated in the quality, quantity and price of goods and services. A consumer is said to be a king in a free market economy. An individual begins consuming as soon as he enters this universe. He requires food, clothes, home, and several other necessities, which he will fulfil in various ways throughout his life.

As a matter of fact, we all are consumers in the sense that we consume the goods purchased from sellers. The relationship between the buyer and the seller has changed over a period. The principle of caveat emptor which meant buyer beware regulated the relationship between seller and buyer in the olden days. In the days of open marketplaces, the buyer and seller met face to face, the seller displayed his commodities, and the customer examined them carefully before buying them. It was expected that he would enter the transaction with intense caution and skill. The earlier approach of caveat emptor, which means (Let the buyer beware) has now been switched to "caveat venditor" (Let the seller beware).

Taking advantage of the sheer helplessness of the consumer means, foul and fair, were devised by the manufacturer, distributor and the retailer to have a firm control of the market place. Consumer Protection through consumer law is a serious concern of countries in every continent in every stage of development and even in every kind of ideology. Legislative and administrative reforms in the consumer field have not been spontaneous but are response to pressure of consumer association and consumer activist. It may be instructive to trace the developments of consumer law during last few decades which exhibited concern towards the problems of the consumer.

Chronological Development Of The Consumer Protection In India:

In ancient India, the problem of consumer protection has much deeper roots and human values were cherished, and ethical practices were considered of great importance. The paramount consideration for the rulers was the welfare of their subjects. They showed keen interest in regulating not only the social conditions but also the economic life of the people.

They established many trade restrictions to protect the interests of buyers. In ancient times thinkers and spiritual masters started propagating the ideas of consumer protection. Any kind of adulteration was considered as an "Adharma" in the Shastras and the Vedas. In the West, the seeds of consumer protection can be traced in the Talmudic legal jurisprudence.[1]

1. Consumer Protection In Ancient India:
   India has a long history of consumer protection. It dates to the Vedic age (5000 BC to 2500 BC). The Vedic Age is believed to be the first literary source of Indian civilization. It is seen as a glorious period of cultural evolution in the ancient world.
   
   The word 'Veda' signifies the knowledge of growing civilization and intimate problems of life. The Vedas are not books of law but are the repository of culture delineating the feelings and habits of the people of the time which indicate and give vivid ideas of legal concepts in a developed civilization. Matters relating to civil rights and criminal offences are explained in the Vedas. One comes across four broad types of relevant criminal offences in ancient India adulteration of food stuff, charging of excessive prices, fabrication of weights and measures, and selling of forbidden articles for which statutory measures and punishments have been recommended by the leading texts of the time.
   
   Vedas were considered the words emanating from the mouth of God himself and were considered the supreme and sacred injunctions governing supposedly the entire society during the ancient period. It has been to learn the law from the letter of 'Vedas' and 'Upanishads', the law could be easily ascertained by following indications available there in abundance, either in the form of positive Vidhi's or negative Nishedhas injunctions. To quote only a few:
   
   1. Tell the truth,
   2. Never tell the untruth,
   3. Never hurt anyone and
   4. Perform the acts which are not forbidden.[2]
   
   All sections of society followed Dharma-Shastras (Dharma) which laid out social rules and norms and served as the guiding principle governing human relations in ancient India. The principal of Dharma was derived from Vedas. Vedas were considered the words of God, and Law was said to have divine origin which was transmitted to society through sages. Thus, Vedas were the primary source of Law in India. Among them the Manu Smriti (800 B.C. to 600 B.C.); Kautilya's Arthasastra (400 B.C. to 300 B.C.); Yajnavalkya Smriti (300 B.C. to 100 B.C.); Narada Smriti (100 A.D. to 200 A.D)' Brihaspati Smriti (200 A.D. to 400 A.D.); and Katyayana Smriti14 (300 A.D. to 600 A.D)[3] are considered as authoritative texts.
   
   The Narada Smriti has clearly delineated the channels of the civil and criminal law. The Yajnavalkya Smriti appears to be more systematic than the Manu Smriti and is also considered to be a great authority in the realm of Hindu law as well as a great authority on vyavahara (behaviour) and personal rights of a man. The chronology of the history of Indian literature is shrouded in truly terrifying darkness and most of the riddles remain to be solved by research. It is much better to clearly recognize the fact that for the oldest period of Indian literature we can give no certain dates and for the later period only a few. So far as the above chronology is concerned, the actual dates of different periods, scholars, and texts are indeed very difficult to ascertain.
    
2. Consumer Protection In Medieval India:
   Protection given to the consumer can be traced during the Mughal times which started from 1526 onwards. India is believed to have been governed by Muslim rule from 712 A.D to 1765 A.D. Imad Uddin- Muhammad bin Qasim, General was perhaps the first Muslim who made conquest over the local ruler of Sindh in India and established a Muslim Indian dominion in 712 A.D. However, according to an eminent historian Basheer Ahmad, the Muslim institutions did not get any foothold in India until 1206 A.D.
   
   He has further written that the Mughal rule was firmly established in India only in 1526 A.D. by Zahir Uddin Babar who defeated the last Lodhi Sultan of Delhi and brought the Sultanate to an end. According to Basheer Ahmed, the Mughals ruled India effectively until 1750 A.D. and nominally up to 1857, when the last Mughal Emperor was succeeded by Queen Victoria as the Empress of India. The seeds of consumer protection were found during the Mughal times.[4]
   
   The seeds of consumer protection are also found during the time of the Khiljis. It is said that Sultan Alauddin Khilji (1296 A.D to 1316 A.D) had introduced strict price control measures based on production costs. In his region, prices of most of the consumer products were fixed at lower rates to make them within the reach of the common man. For the breach of prices of goods and services severe punishments were prescribed.
   
   During Muslim Rule, many units of weights were used in India. During the Sultanate period, the prices used were determined by local conditions. Alauddin Khilji took drastic measures to save the state economy from the vicious circle of inflation and price rise. The fixation of prices was not done by the Sultan arbitrarily, nor was his price structure based upon fluctuating supply and demand, good or bad weather, or the speculative trends of business community, who raised or lowered the prices with motives of making the maximum profits.
   
   Sultan Alauddin Khilji had introduced strict price-control measures based on production costs. He had also established separate shopping centres in Delhi for grain, cloth, sugar, dried fruits, herbs, butter, and oil, horses, slaves and cattle, and miscellaneous commodities. The supply of grain was ensured by collecting tax in kind in the producing areas and keeping it in the royal storehouses. Hoarding of grain was forbidden. Elsewhere the growers were ordered to sell their grain for cash in their fields at fixed prices and were not allowed to take any grain home for private sale.
   
   The market controller, the state intelligence officers and the Sultan's secret agents each submitted independent reports on these shopping centres to the Sultan. Even a minor violation of the rules was not tolerated. The shopping centre for cloth, known as the sara-i-adl, was established near one of the royal palaces on the inner side of the Badaun Gate.
   
   All goods, including imports were first taken there and their prices fixed. Every merchant was registered with the commerce ministry and had to sign a bond guaranteeing a regular supply of the goods in which they traded. The Hindu Multani merchants were advanced money by the treasury to import rare commodities for the sara-i-adl. Some prices were subsidized. Costly fabrics and luxury goods could be sold only to those who had obtained permits from the government. The prices of cattle were also fixed, and unscrupulous merchants were deprived of their trading rights.
    
3. Consumer Protection In Contemporary India:
   The British came to India in 1600 AD as traders in the form of the East India Company and it was established under the Crown's Charter of 1600. The victory of the Company in the battle of Plassey in 1757 against Sirajudindaulla, Nawab of Bengal, laid the foundation of the British Empire in India. In 1765, Shah Alam granted the Diwani i.e., the responsibility of the collection of revenue to the company which automatically involved the administration of civil justice.
   
   The British started the process which culminated in the transformation of India's economy into colonial economy. The foreign trade of Bengal, which at time was the richest part of India became the monopoly of the company while internal trade in more important commodities like raw cotton was monopolized by the superior servants of the Company in their personal capacity. The British rule came to an end in 1947 with the coming into force of the Indian Independence Act, 1947. During the British regime (1765 to 1947), government's economic policies in India were concerned more with protecting and promoting the British interests than with advancing the welfare of the native population. The administration's primary pre-occupation was with maintaining law and order, tax collection and defence.[5]

There were some pieces of legislations which protected the overall public interest though not necessarily the consumer interests. These were- the Indian Penal Code, 1860, the Dangerous Drugs Act, 1930, the Sale of Goods Act, 1930 and the Drugs and Cosmetics Act, 1940. In a sense, the Sale of Goods Act, and the principles of the law of torts were more for the protection of the trader than the consumers.

These legislations are general in nature. But most of them were by and large and overshadowed by common law principles in their contents, however, despite these enactments, principles of common law also continued to be applied through the judgments of the Privy Council and the High Courts as and when necessity arose for either interpreting or clarifying these statutes or for dealing with those subjects which were not covered by these statutes.

However, the main legislative enactments which have direct bearing upon the protection of consumers are discussed hereinafter. Under Criminal Law, the first ever notable provisions for consumer protection adopted in India are found in the Indian Penal Code, 1860. This is the most relevant Act for the prevention of food adulteration.

Like the weights and measures with regard to the food adulteration also the Prevention of Food Adulteration Act, 1954 was enacted making provision for prevention but the provisions of Indian Penal Code have not lost its significance because these sections specifically make the activity of adulteration as punishable offences. Sections 272 and 273 dealing with the offences affecting public health, made certain offences like adulteration of food or drink intended for sale, making it noxious, and sale of noxious food or drink, punishable with six months' imprisonment or with fine up to one thousand rupees or with both.

Sections 274 to 276 made the offences of adulteration of drugs intended for sale, sale of adulterated drugs and sale of drugs as a different drug, or preparation, punishable with similar sentence. The punishment related to weight, and measures are given in chapter XIII of the Indian Penal Code. Chapter XIII of the code consists of sections 264 to 267. Sections 264 and 267 of the Code made punishable the fraudulent use of false instruments for weighing, and fraudulent use of false weight or measure, possession and making and selling of false weights and measures publishable with imprisonment extendable to one year or with fine or with both. Section 478 to 489 deals with offences relating to property and other marks.

The fraudulent and misleading description of articles of trade and fake packages. Section 486 covers offences pertaining to counterfeit trademark or property mark. The offence of public nuisance has been defined under Section 268, in general, to mean an act or illegal omission which may cause any common injury, danger or annoyance to the public or people. Further Sections 269 to 278 deal with certain specific categories of public nuisance. The provisions related to negligent conduct are given in Sections 284 to 288.[6]

However, sections 274 to 276 of the Indian Penal Code are still relevant as they provide for the offences relating to public health. The objective of this Act is to prevent the supply of substandard drugs and cosmetics for maintaining high standards of medical and health care. The Act has also prohibited the import of any drug or cosmetic which is not of standard quality; any misbranded drug or misbranded or spurious cosmetic, any adulterated or spurious drug, any patent or proprietary medicine not having proper display of its formula or ingredients in the label, any harmful or unsafe cosmetic and any drug making false claims. A recognized consumer association has also been given another valuable right by the 1986 amendment to obtain test for analysis of any drug or cosmetic purchased by it from a Government Analysts and to receive a report of such test or analysis signed by Government Analyst.

However, the Drugs and Cosmetic Act, 1940 has failed to check the inflow of hazardous, adulterated, misbranded, sub-standard, banned drugs or cosmetics in the Indian market due to lack of proper control, inadequate enforcement machinery, and inappropriate infrastructure, lack of consumer awareness and indifferent attitude of the consumers. The delay caused in analysis report, lack of honest personnel involved in inspection and judicial delay are some of the reasons to make this consumer-oriented legislation an ineffective one.

However, the aggrieved person can in addition to seeking remedy under law of tort also initiate criminal proceedings against the person guilty of negligent act recognised under Indian Penal Code. Section 133 of Criminal Procedure Code, 1973 provides special powers to the District and Sub divisional Executive Magistrate in case of violation of consumer rights specially relating to public nuisance. To protect the interests of contracting parties, the Indian Contract Act, 1872 was passed. Under Law of Contract, the law relating to buyer and sellers, their rights and responsibilities and conditions on which the contract is to be executed is contained in The Indian Contract Act, 1872. This Act has specified basic principles by which an agreement becomes a contract. This Act contains important provisions relevant to consumer interest.

Hence, the third party cannot seek remedy generally under the Act which leads to the exclusion of large number of consumers from the purview of the Act. Despite such limitations, the Act is important from the consumer perspective. In this respect judiciary has played an important role in protecting the interest of the consumers. The essence of contract is the 'meeting of minds. It was in the later part of the first half of the 20th century that it was realized that meeting of minds may not in every case be real. It may happen that one of the two parties to a contract has in fact no freedom, no volition, he merely signs on dotted lines. This is literally what happens in standard form contracts.[7]

Initially the Indian Contract Act, 1872, contained the provisions regulating the sale of goods and partnership. Later, two separate Acts were enacted namely the Indian Sale of Goods Act, 1930 and Indian Partnership Act, 1932. Besides sale of goods and partnership for which separate legislations were made, the other forms of specific contracts like Contract of Indemnity, Contract of Guarantee, Contract of Bailment, Contract of Pledge and Contract of Agency, continue to be governed and regulated by the Indian Contract Act, 1872.[8]

The Sale of Goods Act, 1930 was enacted to protect interest of consumers. For 55 years, the Sale of Goods Act of 1930 was the exclusive source of consumer protection. Earlier, the Indian Contract Act, 1872 contained provisions about sale of goods in Sections 76 to 123. They were found inadequate to investigate the whole law on sale of goods. The Sale of Goods Act, 1930 was passed to serve the purpose of regulating the sale of goods.[9] This Act provides for the settlement of consumer and seller disputes.

This Act has changed the principles of 'Caveat Emptor' casting a responsibility on the seller to offer mercantile goods. The ordinary rule in sale of goods is that conditions and warranties are not implied. It provides several important exceptions to this rule.

Further there is an implied condition that the goods are free from any charge or encumbrance, are of the description tendered and shall perform according to usage and standards. Beside the return of price or free repair or replacement, damages can also be claimed for any loss or harm, or injury suffered by the buyer. The myth of consumer sovereignty has been eroded because of the helplessness of the consumer as a buyer of goods and recipient of services. With the progress of science and technology we have entered an age marked by sophistication of industrial products for the use of the consumer.

It has become extremely difficult to judge quality, nature, and performance of the product at the time of purchase. In view of this, it is becoming increasingly important to compel a manufacturer, or retailer to make disclosures regarding the composition, performance, and hazards, if any, of the product. The older notions of merchantability, fitness of purposes, warranties and conditions have increasingly been the target of attack.[10]

Judicial Precedents In 19th Century:

The rapid pace of financial innovation in India's rapidly expanding economy has led to the development of a vast array of financial products, resulting in an information overload for consumers. Simultaneously, consumer finance has become increasingly do-it-yourself, and this has increased consumer autonomy with respect to important financial decisions. In light of growing evidence that consumers do not always behave rationally and in a time-consistent manner as maximizes, the public policy implications of complex financial products are unique. Biases and cognitive limitations are the most significant limitations on consumer interactions with financial service providers, with only major financial decisions being made. Rarely is it acceptable to discuss personal finances in polite company reducing the effectiveness of social learning, the complexity of the provided data, the inefficiency and incompetence of the information source, etc.

For the sake of establishing the reach of RBI's legislative authority in the context of consumer protection, it is important to analyse Section 35-A of the BR Act, 1949. It has been ruled by the courts that RBI regulations made under Section 35-A of the BR Act, 1949 constitute secondary laws. Because of this, they take a hands-off stance and don't get involved unless the RBI's actions go beyond what's allowed by the BR Act, the parent law.

The Supreme Court established binding precedent in ICICI Bank v. Official Liquidator of APS Star Industries Ltd. & Ors.8 by ruling that RBI orders made in the exercise of its functions have statutory force and are therefore enforceable. The same court held in RBI v. Central Bank of India and others that the RBI must exercise its authority under Section 35-A. For this reason, the RBI was tasked with issuing legally obligatory orders "in the benefit of the general public and to avoid the degradation and prejudice of banking affairs and to assure the correct administration of any banking organisation in general."

• N. Raveendran Nair v. Branch Manager, State Bank of India[11] The complainant owns Elankath Enterprises, Venganoor P.O., Thiruvananthapuram. He sells textiles in bulk. He purchases from manufacturers and sells to wholesalers. On 12.5.1990, he deposited Rs. 98,000/- at State Bank of Travancore, Venganoor Branch and obtained a demand draught payable to State Bank of India, Surat Branch, Gujarat. He believed he could capitalise on the demand slump in Surat, so he purchased textiles there. The complainant sought to avoid loss and theft while travelling.
   
• Mrs. S.S.Shirwaikar, Margao v. State Bank of India[12]
  • Even though the word "bearer" is not crossed out on the cheque, it is general knowledge that when a proprietor of an account writes a check in favour of the bank itself, it is intended for the bank to use the funds in accordance with the account holder's instructions and not to pay an unknown third party.
     
  • This is due to the fact that when an account holder sends a check payable to the bank itself, it is unquestionably with the intent that the bank uses the funds for any of the indicated purposes. Therefore, a check instructing the drawer, in this case the bank, to pay itself cannot be compared to a standard check payable to the bearer or to the bearer's account, in which the bank has the authority to pay the bearer. In paying a huge sum of money (Rs. 20,000) to an unknown third party, who resulted in a loss for the account holder, the bank has displayed obvious and indisputable proof of gross negligence. There is an obvious lack of honesty and integrity on the part of the bank. The customer is entitled to reimbursement for both the loss and the fees associated with submitting this complaint, given the circumstances.
     
• Corporation Bank & Anr. v. M/s Filmalaya Pvt. Ltd[13] The complaint asserted that the negligence and inadequate service provided by bank officials enabled the misuse of monies by the complainant's employee from the complainant's account that was kept with the bank. It was determined that since it was in the custody of the worker who was convicted of forgery and fraud in connection with the case, the bank passbook is not a trustworthy piece of evidence to indicate that there was a short deposit. The basis for the short deposit must be determined in accordance with the amounts mentioned on the depositors' pay-in slip counterfoils.
   
• A. R. Narayan v. State Bank of Hyderabad[14]
  • The complaint had already reached the maximum amount of cash credit that the competing bank was willing to extend to him, and he was falling behind on his payments.
  • He was also behind on the payments that he owed to another financial institution. It was ruled that the opposing party bank was within its rights to refuse to authorise the complainant to make additional withdrawals from his account, and there was no shortage in service.
     
• M/s Classsic Electronics v. Punjab National Bank & Anr.[15]
  • The incorrect handling of the complainant's account and the transfer of cash from the Fixed Capital Loan account to the Working Capital Loan account were the two complaints lodged against the responding bank.
  • The Commission confirmed and approved the bank's assertion that the transfer of funds from one account to another followed the complainant's instructions. It was ruled that the transfer, despite being inappropriate, was in the best interest of the complainant and afforded him the opportunity to reduce the extent to which he exceeded the limit on his drawing power. The complaint was dismissed because it was deemed vindictive and vindictive.

Judicial Perspective In 21st Century:

In spite of the fact that Consumers rely significantly on the consumer courts established by the 1986 consumer protection legislation, as India lacks a specific legal framework for consumer protection. In addition, customers of financial products and services have the option of utilising the dispute resolution methods developed by the respective product and service providers. There are six key regulators in India, and they are as follows:

1. SEBI - Securities and Exchange Board of India
2. RBI - Reserve Bank of India
3. IRDA - Insurance Regulatory and Development Authority
4. PFRDA - Pension Fund Regulatory and Development Authority
5. EPFO - Employees' Provident Fund Organisation
6. FMC - Forward Markets Commission

The financial sector is currently governed by over 60 Acts and several regulations. The protection of those who use financial services is not covered by a single statute. The client may make a complaint with the consumer courts created by the Consumer Protection Act of 1986, or they may use the complaint mechanisms provided by the relevant regulators for their particular product or service. Multiple agencies are responsible for ensuring that customers of financial services are safeguarded. RBI, SEBI, IRDA, PFRDA, EPFO, and the Forward Markets Commission are India's six most important regulatory agencies (FMC).

The National Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of India (SIDBI), and the National Housing Bank are RBI subsidiaries involved in regulation and supervision (NHB). In extreme instances, such as the Ministry of Corporate Affairs, as many as six ministries and state governments from India are directly or indirectly involved. Mandatory information disclosure and financial literacy and education are the two ex-ante steps that Indian authorities are implementing to protect their clients. These strategies are founded on the caveat emptor concept, sometimes known as "buyers beware." In addition, clients who have been wronged can receive compensation from financial service providers through ex-post grievance resolution procedures.

Bank Practice:

Financial consumer protection policies of the banking sector include the Banking Ombudsman - the institutional structure for redressing complaints relating to banking try is particularly in need of consumer protection. The government, regulatory body, and banking system in India have dealt with the problem of people not having access to banking services. Once the goals of financial inclusion have been met, the banking industry faces the challenge of meeting customers' needs for safety and convenience. In order to protect their money, customers need to be made aware of the potential dangers they face.

• The Banking Ombudsman Scheme:
  It was implemented by the Reserve Bank of India with the goal of safeguarding banking customers. An ombudsman in the banking industry is a quasi-judicial authority whose job it is to arbitrate disputes between clients and the banking system. Scheme came into existence in 1995 under Banking Regulation Act 1949 Section 35A and was updated in 2006 as Banking Ombudsman Scheme. Customers with complaints about their banks can take their grievances to the Banking Ombudsman, as per the programme.
   
• Cyber security warnings:
  With the advent of technology, customers want to make transactions online, and it is vital to educate clients on online transaction dos and don'ts. During the three years between January 2015 and December 2017, the country recorded more than 57,000 debit and credit card fraud instances totalling Rs. 290 crores. As a result, we must take caution with online banking and credit card transactions. Customers must take extreme precautions in digital financial transactions. Never reveal full card information or One-Time Passwords collected during a transaction. The PIN should be carefully guarded and memorised rather than written down. SMS/email communications may occasionally contain a link ostensibly sent by a bank to confirm specific details; however, this is often a fraudulent practise performed by con artists.
   
• Ombudsman Scheme for Digital Transactions:
  On January 31, 2019, the Reserve Bank of India implemented the Ombudsman Scheme for Digital Transactions, 2019. The registration of complaints has been simplified, as one can make a complaint with the Ombudsman by writing on plain paper and delivering it to the appropriate Ombudsman office by mail/email/hand delivery.
   
• Ombudsman Program for NBFCs:
  The grievance redressal scheme for the consumers of Non-Banking Financial Companies (NBFCs) was designed by the Reserve Bank of India under section 45L of the Reserve Bank of India Act and notified on February 23, 2018. Since then, the NBFC Ombudsman Scheme has been operational in four cities: Mumbai, Chennai, New Delhi, and Kolkata. The overall number of complaints received through the programme increased from 675 in 2017-18 to 3,991 in 2018-19. The majority of complaints (40.44 percent) are related to violations of the fair practises law, followed by violations of RBI guidelines (17.21 per cent). Other complaints included the imposition of a charge without notice and a lack of transparency in the loan agreement, which accounted for 12.63% and 9.17%, respectively. In 2018-2019, the scheme's complaint resolution rate was 99.10%, compared to 95.41% in 2017-2018.
   
• Deposit Insurance Protection:
  In a number of nations, deposits are insured against bank failure. The protection of bank depositors from losses caused by the failure of banks to pay on demand is either total or partial. The scheme has been in effect in India since 1962 and is administered by DICGC, a subsidiary of the Reserve Bank of India. Initially, the Deposit Insurance Scheme was extended to all commercial banks that were still in operation. Subsequently, it was expanded to other types of institutions. The DICGC provides coverage for all sorts of deposits, including savings deposits, recurring deposits, and term deposits.

Suggestions:

1. A solid consumer protection framework that creates explicit restrictions for financial institutions' interactions with retail clients and addresses financial exclusion is required immediately. Experts have advocated reforms such as the adoption of appropriateness standards, simple and standard financial products, the move to seller beware principles, and various strategies to improve financial inclusion for the poor and small businesses, but much more must be done.
    
2. National programmes for financial literacy must be strengthened. The digitization of financial products and services has become relevant, necessitating a corresponding increase in digital financial literacy. Ensure that customers are informed of their possible vulnerability to digital crimes and their rights and obligations. Particularly among elderly groups, digital literacy needs to be developed.
    
3. Currently, customers must adhere to extremely technical and cumbersome procedures in redressal forums. Typically, the Ombudsman will reject a complaint if it is not adequately represented or if it does not contain sufficient information.
    
4. Well-informed investors are protected, and prevention is better than cure. While we appreciate the financial sector controllers for introducing a grievance redress process, a public education system that explains the dos and don'ts of financial transactions is needed. We still remember the 2008 global financial catastrophe triggered by reckless lending. Thousands more PMC Bank customers in Mumbai can avoid recent catastrophe if they are informed on the hazards and benefits of cooperative banks. All banks, insurance, mutual fund, and other financial sector employees should prioritise consumer protection through behavioural changes. Clients who are knowledgeable, capable, and confident can assess the risks and rewards of financial products. The National Centre for Financial Education (NCFE), newly established to implement India's financial education programme, must accept increased duties and protect clients' interests.

Conclusion
An effective framework for the protection of financial consumers will include these three main elements. To begin, it shields customers from unfair or dishonest business activities on the part of providers of financial services, particularly those that pertain to advertising and collection efforts. It enhances the level of transparency by mandating the disclosure of information that is complete, understandable, sufficient, and comparable regarding the costs, terms, and situations of various financial goods and services. It offers a recourse system to handle grievances and resolve disputes in an expedient and cost-effective manner.

The consumer participation ladder consists of four essential rungs: information and consultation, partnership and empowerment, consultation and partnership, and empowerment. The importance of the role that consumer organisations play in consumer protection has garnered a lot of praise. The engagement of consumer organisations at various phases, mainly at the implementation level, should be required of regulatory agencies in order to institutionalise the system of consumer participation.

Bibliography
Case Laws:

• N. Raveendran Nair v. Branch Manager, State Bank of India is (2001) 6 SCC 520
• Mrs. S.S. Shirwaikar v. State Bank of India is (2007) 1 SCC 134
• Corporation Bank & Anr. v. M/s Filmalaya Pvt. Ltd. is (2000) 4 SCC 404
• A. R. Narayan v. State Bank of Hyderabad is (2002) 4 SCC 294

Statutes:

• Indian Contract Act, 1872
• The Sale of Goods Act, 1930
• Drugs and Cosmetic Act, 1940
• Indian Penal Code, 1860
• Consumer Protection Act, 2019

Books:

• O.P. Tiwari – Consumer Protection Act 5th edition

Articles:

• Lok Adalat: A Catalyst for Change in the Indian Judicial Structure, 2021

Websites:

• http://www.jtexconsumerlaw.com/v11n3/jccl_india.pdf
• https://www.ijnrd.org/papers/IJNRD2306098.pdf

End Notes:

1. Charles Auerbach, "The Talmud: A Gateway to the Common Law." Vol.No.3, Western Reserve Law Review, 6-8, (1951)
2. M. Rama Jois, Legal and Constitutional History of India, 105, (N.M Tripathi; Fred B. Rothman Bombay, Littleton, Colo, (1990)
3. S.R. Myneni, Consumer Protection Law, 93-94, (Asia Law House, Hyderabad, 1st edn., 2010)
4. J.N. Sarkar, Mughal Administration, 29 (MC Sarkar Publishers, Calcutta, 4th edn., 1952)
5. J.N. Pandey, "Constitutional Law of India", 14, (Central Law Agency, Allahabad 2007)
6. Shailender Malik, Indian Penal Code, 360-361, (Allahabad Law Agency, 2011)
7. R.K. Bangia, Contract-1, 54 (Allahabad Law Agency, 2012)
8. R.K. Bangia, Contract-II, (Allahabad Law Agency 2012). (Law relating to Contract of Indemnity covered under Sections 124 & 125; Law relating to Contract of Guarantee covered under Sections 126 to 147; and Law relating to Contract of Agency covered under Sections 182 to 238)
9. S.K. Verma, A Treatise on Consumer Protection Laws, 24 (Indian Law Institutes, New Delhi, 2004)
10. D.N. Saraf, Law of Consumer Protection in India, 22, (N. M. Tripathi Pvt. Ltd., Maharashtra 1995)
11. (2001) 6 SCC 520
12. (2007) 1 SCC 134
13. (2000) 4 SCC 404
14. (2002) 4 SCC 294
15. (2008) 2 SCC 226