RBI Plans Registry To Save You From Digital Frauds

Following a spurt in cases, the RBI is planning to set up a "fraud registry" to create a database of websites, phone numbers, email ID and IP addresses used in digital frauds to protect the interests of consumers, while maintaining that only a minuscule proportion of complaints its receives relates to "mis-selling of products". 
 
In a press interaction, RBI ED Anil Kumar Sharma said the database will help keep tabs on fraudsters. "There is no definite timeline for setting up of the fraud registry. At present, we are talking to different stakeholders, including different departments like payments & settlement and supervision of the RBI," he said. He said in many cases, users open accounts in another bank after committing fraud in one bank.
 
Payment system participants will be provided access to this registry for near-real time fraud monitoring. The aggregated fraud data will be published to educate customers on emerging risks. 
 
Mr Sharma claimed that the RBI ombudsman had received around 4.2 lakh complaints last fiscal and nearly 98% disposed of. A large number of cases were, however, rejected due to multiple reasons, such as duplicate complaints (33%), sub-judice (4%) or not within RBI's purview (3%). 
 
Asked about mis-selling, RBI officials maintained that they were a minuscule proportion and suggested that consumers need to read the fine print on products such as insurance, which are hawked by banks as part of efforts to shore up "non-core revenue".
 
Currently issues relating to ATM/debit cards, mobile & electronic banking, and credit cards formed the single largest block of complaints at 39%, while issues relating to loans and advances by banks formed the second largest chunk at 28%. Mr Sharma said the majority of grievances are resolved at entity level in banks only.
 

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Changes in Our Business Model
 
 
25th Sept 2020
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
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Debashis Basu
Founder