Govt of India

Ministry of Finance

Department of Economic Affairs

FSLRC Divisions

North Block, New Delhi

Dated: 05-06-2015

2. The FRA, as envisaged in the draft Indian Financial Code (IFC), would be the first forum of independent grievance redress a financial consumer can access and will entertain grievances against all financial service providers. It would handle a large number of relatively low value complaints on a pan India basis and run a large scale, customer centric process to deliver efficient and effective outcomes.

3. The Ministry of  Finance has begun preparatory work for establishing the FRA. With the objective of supporting the Ministry of Finance in establishing the FRA, it has been decided to set up a Task Force with the following composition:-

The Task Force may also invite I interact with other experts based on requirements.

2. The Terms of Reference (ToR) of the Task Force shall be as follows:-

(I)             Review the international best practices in consumer grievance redress, including ombudsmen and other dispute resolution mechanisms, with a focus on the financial sector.

(II)          Review the present practices of management of financial consumer redress in India.

(III)        Support  the  Ministry  of Finance  in  procuring  the  services  of  competent  consultants(s)  to operationalise the FRA.

(IV)       Guide and monitor the consultant(s) in order to develop :

(a)   Organisation and human resource design,

(b)   Business model,

(c)   Plan on the sources and uses of funds, with appropriate level of details for each function,

(d)   Outline of the systems of financial controls,

(e)   Risk assessment and risk management plan,

(f)   Administrative plan that includes a design of the physical infrastructure required,

(g)   Process manuals, which include detailed processes to be followed for each of its functions,

(h)   Specifications of information technology  system with sufficient level of detail that can be used for a formal contract with service providers to build such a system,

(i)    Draft set of rules as may be required to implement the applicable IFC provisions,

(j)    Design of the accountability and reporting mechanisms.

(k)   Plan for transition from current grievance redress systems under each of the existing financial regulators.

(V)          Task Force will undertake cost benefit analysis (CBA) of alternatives/options while making recommendations .

5. The expenditure related to the Task Force activities will be met from the budget of NIPFP­DEA research programme supplemented as and when necessary. NIPFP-DEA research programme will also provide appropriate research assistance to the Task Force.

6. The Task Force will complete its task within one year.

(Gaurav Masaldan)