Consumer Disputes in the Financial Sector - Grievance Redress by Courts

Abstract

ABSTRACT This paper studies how courts in India have dealt with consumer disputes in the financial sector. It reviews the most cited cases to study the position that courts have taken in banking and insurance disputes. For the cases studied, it finds that courts have generally granted relief to consumers in banking disputes. In the case of insurance cases, courts have emphasized contractual compliance. This is so even when the contracts themselves were opaque or had unfair terms. The paper also finds that courts award low compensation and take a long time for adjudication. These issues are compounded by the shortcomings in the framework of courts – they tend to award low compensation in banking and insurance cases, take a long time for adjudication, do not have systems for class action suits, and lack specialization to deal with consumer disputes in the financial sector.