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Designing a sound GRM: Principles and International Experience

Author

Listed:
  • Banerjee, Sudipto

    (National Institute of Public Finance and Policy)

  • Dimri, Aditi

    (National Institute of Public Finance and Policy)

Abstract

Grievance redress mechanism (GRM) is an essential component of the consumer protection framework in the financial sector. Its presence and performance can have far-reaching effects on the participation of consumers in the financial sector. Using GRM a consumer can seek expeditious and fair remedy against the wrongs of the financial service providers. While there are various forms of GRM (both judicial and non-judicial), in this paper, we study the design of a non-judicial redress agency. Using first principles we study the design of a financial redress agency by focusing on the critical organisational decisions of - manner of establishment, governance, funding, dispute resolution processes, and performance evaluation. We build on two strands of literature, one studying the GRM design at a conceptual principles level and the other providing practical guidance for setting up a redress agency. Further, the paper analyses four different redress agencies, namely, - Financial Ombudsman Services Scheme in the U.K., Kifid in the Netherlands, Consumer Financial Protection Bureau in the U.S., and Insurance and Financial Services Ombudsman Scheme in New Zealand. The paper contributes by assimilating all the varied resources to map principles, decisions, and case studies to provide an accessible yet comprehensive introduction to designing a GRM for a varied readership.

Suggested Citation

  • Banerjee, Sudipto & Dimri, Aditi, 2022. "Designing a sound GRM: Principles and International Experience," Working Papers 22/366, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:22/366
    Note: Working Paper 366, 2022
    as

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    References listed on IDEAS

    as
    1. World Bank Group, 2017. "Good Practices for Financial Consumer Protection, 2017 Edition," World Bank Publications - Reports 28996, The World Bank Group.
    2. World Bank Group, 2017. "Global Financial Inclusion and Consumer Protection Survey, 2017 Report," World Bank Publications - Reports 28998, The World Bank Group.
    3. Roy, Shubho & Shah, Ajay & Srikrishna, B.N. & Sundaresan, Somasekhar, 2018. "Building State capacity for regulation in India," Working Papers 18/237, National Institute of Public Finance and Policy.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    GRM ; redress agency ; financial ombudsman ; dispute resolution ; consumer protection in finance;
    All these keywords.

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