Fwd: Click to complain. Regulators get active
- From: karmayog - tanya
Click to complain. Regulators get active
You should actively make use of these systems to get your complaints settled
in a timely manner.
Deepti Bhaskaran | Kayezad E. Adajania | Vivina Vishwanathan
First Published: Fri, Jun 14 2013. 07 08 PM IST
As you climb the stairs of Parisrama Bhavan in Basheer Bagh to reach the
Insurance Regulatory and Development Authority (Irda) office in Hyderabad,
you are greeted by a billboard in the stairwell that asks: Is your insurance
company listening to you? If not, the billboard goes on, you can register
your complaints online and track their status through Integrated Grievance
Management System, IGMS, or call at 155255.
This in fact is the first board you see before you enter the office. Its
placement is indicative of the regulator's focus and its effort to reach out
to aggrieved customers directly. And Irda is not alone in this regard.
Capital markets regulator Securities and Exchange Board of India, Sebi, too
has taken some institutional measures in the form of Sebi Complaints Redress
System or SCORES to effect speedy disposal of complaints. In fact, SCORES is
a step ahead because it also claims that it adjudicates on a case to case
basis to ensure fair settlement. The mandate for IGMS, however, is to ensure
speedy settlement of complaints and not adjudication. This is true even for
the Standardised Public Grievance Redress System or SPGRS, that the ministry
of finance has put in place only for the public sector banks (PSBs) for now.
With regulators taking a keen interest, consumer grievance management seems
to be getting institutionalized and companies are beginning to create
dedicated departments to have a focused approach towards consumer
complaints. But given the fact that it's still early days and the systems
are yet to become popular, it maybe too early to judge their efficacy. But
if the regulators are using the help of technology to reach out to you, you
should also know how to reach out to them with your complaints. Read on to
understand the processes of consumer grievance redressal set up recently in
the financial sector.
Capital markets and mutual funds
Sebi set up SCORES in June 2011. So if you have a grievance with your
investments that come under Sebi's jurisdiction, such as mutual funds (MF),
equity shares, depository participants (DP) and brokers, you can complain
directly to Sebi through SCORES.
Visit Sebi's website (www.sebi.gov.in) or www.scores.gov.in, fill in your
basic details like your name, address, email id, register your complaint,
submit any documents that you may have as evidence and sit back. Sebi, then,
forwards your complaint to the firm and keeps a track of it. You could,
alternatively, send your complaint to Sebi by post.
To ensure that the company against whom the complaint is filed actually
receives the complaint, Sebi has made it mandatory for every listed company,
MF, stock exchange, depository and so on, to nominate one person in charge
of investor complaints. When Sebi gets a complaint, it sends an alert
message to this official within seven days; he is then mandated to look into
it. Though Sebi has not specified a fixed time limit within which the firm
must respond, it mandates the company to send its first response within
seven days of receiving the complaint and then about another 30 days
generally to resolve the complaint. If the firm fails to respond, Sebi sends
one to two reminders to the firm. If you have submitted the complaint online
(on Sebi's website), your firm will email you the response and will also
update Sebi. If you complain by post, the firm sends you its reply by post,
and it is mandated to mark a copy to Sebi.
If you are unhappy with the company's response, you can go back to Sebi and
tell them to take a relook at it. Further, there have been instances where
Sebi, on its part, is not particularly satisfied with the firm's response.
In such cases, Sebi gets back to the company itself. "There was an instance
where the investor did not get dividends for the shares he held of a bank.
When the firm said that it sent duplicate dividend warrants, we got back to
the company and told them to send this investor, two more reminders with a
gap of seven days. We did this to ensure that if an investor misses one
response from the company, the follow-up reminders should catch his
attention," says a senior Sebi official who did not want to be named.
Wait for about 30 days after you complain. If you don't hear anything, you
can quote your Unique Complaint Registration Number (UCRN)-a number you get
after you first lodge your complaint on Sebi's website-and send Sebi a
reminder. Sebi penalizes those who fail to respond. The penalty varies and
is subject to Sebi's decision. Such actions taken against firms are also
periodically listed on Sebi's website here (http://tinyurl.com/mblgx3n).
While Sebi claims that its process is robust, an investor association we
spoke to, is not impressed. "Over all it is very unsatisfactory. There are
areas of concern. Firstly, the communication between Sebi and the
complainant, after the complaint has been filed, is absent. At best, the
investor gets a response "in process" when he gets in touch with Sebi to
check the progress, but that sort of reply is not enough. These are
automated responses and don't mean much. Secondly, if grievances are just
not resolved, despite Sebi's intervention, nobody knows what happens to such
complaints. In such cases, where Sebi can't can't do anything, they still
should be able to take some action. Which they don't do. I raised this query
and asked them what they do in such cases. They didn't have any answer to
that," says Virendra Jain, founder and president, Midas Touch Investors
IGMS was set up by Irda in 2011. It works like a central repository of all
the consumer complaints received by life insurance and non-life insurance
firms. In that sense it's a handshake between Irda's grievance management
system and the insurer's individual grievance management system. The way it
works is like this. You can register a complaint either through mail, phone
or even verbally with an insurance company and the insurer will register
that complaint in its grievance management system. In fact it is mandated
that every insurer must have a grievance redressal policy approved by Irda
and a grievance cell that will be presided over by a nominated person from
Once your complaint gets registered, it will automatically flow in the IGMS
which is monitored by Irda. Irda gives the insurer 15 days to settle the
complaint. "Regardless of the nature of grievance, insurers have 15 days to
settle the matter. However, 15 days start from the day of receiving all the
necessary documents and proof," says Yateesh Srivastava, chief operating
officer, Aegon Religare Life Insurance Co. Ltd. If your complaint is not
settled within 15 days, the system will raise a red flag so that Irda can
take note of the delay and direct the insurer to settle the complaint. You
can also approach IGMS by logging into www.igms.irda.gov.in or calling up
the toll free number 155255. However, Irda encourages you to approach the
The mandate of IGMS is restrictive because through it, Irda does not
adjudicate on individual complaints. The basic idea of IGMS is to effect
speedy disposal of complaints and have a repository that would help Irda
track the nature of complaints in order to make systemic corrections. "We
used to submit data on complaints even earlier but it was post-facto. So,
the idea of IGMS was to track complaints and the effectiveness and
timeliness of response on a real time basis. The regulator, however,
depending upon the trends that complaints throw up, can always question the
insurer," says T.R. Ramachandran, CEO and managing director, Aviva Life
Insurance Co. India Ltd.
In other words, Irda could go beyond the mandate. "Even as the regulator's
role remains directive, it can track complaints and even penalize the
insurer for a glaring mistake," says Srivastava. Irda also publishes data on
complaints on its consumer awareness website www.policyholder.gov.in.
According to this website, Irda in FY12 logged in about a lakh complaints on
unfair business practice in the life insurance industry. This is 32% of all
the complaints received. Irda on its website, www.irda.gov.in, also warns
companies who violate regulations to fall in line. For instance in March,
based on various compliants, Irda issued 15 warnings to Oriental General
Insurance Co. Ltd and National Insurance Co. Ltd.
The industry feels that IGMS has led to speedy disposal of complaints.
However, some feel more needs to be done. "Customer complaints are
definitely being taken more seriously since Irda has a constant watch but
what action the insurer takes is still work in progress. Irda should also
think about taking action on complaints because approaching the ombudsman is
very time consuming and they are short staffed," says Kapil Mehta, founder,
So if you want arbitration on the complaint, you will still need to go to
the insurance ombudsman. Ombudsman are divided according to the regions and
you will need to approach the one in your area. The verdict of the ombudsman
is usually binding on the insurers and the ombudsman is supposed to issue a
verdict within three months from the receipt of the complaint.
Except for PSBs, the banking sector lacks a similar integrated redressal
system. In case of the PSBs, the department of financial services under the
ministry of finance has put in place an online complaint redressal facility
and inked guidelines on SPGRS last year. This SPGRS forms needs to be
uploaded on the website of the PSBs. For instance, in the Bank of Baroda
website you can find the form at http://tinyurl.com/kda93kl.
The idea was to meet the rising expectations of customers for prompt redress
of their grievances. This system again works like a repository in the sense
it integrates complaints received from multiple channels into a common
digital platform. The bank in question is expected to solve grievances
within three weeks or 21 days.
The system has an inbuilt management information system for analysing
performance. Says V.N. Kulkarni, chief counsellor, Abhay Credit Counselling
Centre, "The SPGRS is one of the new ways to send complaints. However, the
issue of resolving consumer complaints faster still remains. The move is in
the right direction, but number of days to resolve the grievance should have
been reduced further." He adds that, "Only banking related issues can be
addressed through the existing system. For complaints related to third party
products such as insurance and MFs sold through a bank, you will have to
approach the respective industry and regulators. This is because banks only
acts as an agent while selling the third party products." SPGRS is still
being introduced in the banking system. We will have to wait and watch to
see how it works out. You should remember that if the grievance is not
solved via SPGRS, you can then approach the banking ombudsman.
Banking ombudsman is one of the last recourses to address banking related
complaints. The ombudsman will look into complaints against all banks. As a
customer you can approach the ombudsman only after he has exhausted all the
options of customer redressal services of his bank in 30 days. For
approaching the banking ombudsman, you need to first check under which
jurisdiction you fall (see http://tinyurl.com/aqkhmwc). Usually, the banking
ombudsman gives ruling within 30 days. If you are not satisfied with the
ruling of the banking ombudsman and you have been unable to get your money
back, the next thing is to approach the appellate authority, who is Reserve
Bank of India's deputy governor; currently, K.C. Chakrabarty.
The second layer of consumer redress is being put in place, although with
some restrictions, but it seems like it still has to cover some ground. You
as a customer should, however, actively make use of these systems to get
your complaints settled in a timely manner.