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Dvara Research’s vision for a stronger retail customer protection regime entails making financial services providers legally liable (and therefore bearing the primary responsibility) for recommending and selling products that are ‘suitable’ for their customers, given their goals, needs, and financial situations. In addition, given the market changes in the retail financial services industry brought about by India Stack, Payments Banks and other digital platforms, we work on critical policy and regulatory issues that need to be thought through in the emerging landscape.


In this paper, we begin with an analysis of the theory of consumer protection and follow it up with a discussion on the special case of the financial consumer. We then take a step back and analyse the functions of finance and the role of finance in the life of households. We use real-life case studies to illustrate the capacity of the Indian financial marketplace to fulfil financial needs of households today and also discuss some critical national socio-economic trends in India that the financial system needs to be equipped to respond to effectively. Following from this, we assess the future of finance in India, to come to an understanding of the nature of the financial system that must be created in India to ensure financial inclusion as well as systemic stability. Finally, with the theoretical basis as well as the Indian context firmly in place, we develop the fundamental philosophies around which the framework for consumer protection in finance should be built.

A New Framework for Financial Consumer Protection in India, Sahasranaman A, George D, Rajendran D, Prasad V, 2013

Technology promises to overcome traditional barriers to financial inclusion, in particular by harnessing insights from consumers’ personal data. However, use of personal data creates new risks for consumers. Service providers must build consumers’ trust, a necessary precondition to increased participation in formal finance. K Puttaswamy v Union of India frames the use of personal data within the rubric of informational privacy, and in doing so provides guidance about how data practices and regulation in finance can evolve to align with citizens’ rights and reasonable expectations of informational privacy.

The Privacy Judgment and Financial Inclusion in India, Raghavan, 2017


We endeavour for a strong retail customer protection regime entails that makes financial services providers legally liable for recommending and selling products that are ‘suitable’ for their customers, given their goals, needs, and financial situations. Accountability and supervision would be driven by providers’ adherence to processes laid down in their own board-approved suitability policies to meet this legal requirement. This is a marked departure from existing approaches to financial consumer protection built on the principle of caveat emptor or ‘buyer beware’, and which employ information disclosure and financial literacy as the means to produce outcomes (these, in turn, hold customers responsible for a product purchased). In contrast to this, a suitability-based approach is process-driven, as illustrated below:

Dvara Research has conceptualised a framework for the suitability regime and has worked on key policy and regulatory initiatives aimed at achieving a shift towards suitability-based customer protection approaches to policy and supervision.

The Future of Finance Initiative (FFI) works on emerging issues in policy and regulation for consumer protection in India given the sweeping changes that are reshaping retail financial services in India – including those driven by IndiaStack, Payments Banks, mobile usage and the growing P2P market. Our vision is for every individual to have universal access to suitable financial services using a range of channels that enable them to transact securely and confidently.

The FFI’s work identifies customer-level and system-level risks from the rising digitisation of payments, credit, investments, and insurance, particularly those relating to data protection & privacy, financial risk & unfair terms and competition & pricing. Our mandate is to undertake and commission research around these themes, understand the gaps and risks in policy and recommend regulatory responses.

Broad Themes:

  • Disintermediation of Financial Services
  • Public Infrastructure for Digital Finance
  • Consumer Data and Advanced Analytics