AAP MP Raises Alarm Over Mis-selling of Financial Products by Banks
AAP MP Sanjay Singh has spotlighted the widespread mis-selling of financial products by banks in India. He reveals disturbing statistics on bank employees' knowledge gaps and highlights issues around hefty commissions and policy lapses, emphasizing the impact on ordinary citizens' finances.
- Country:
- India
On Tuesday, Aam Aadmi Party (AAP) MP Sanjay Singh took a stand in the Rajya Sabha against the pervasive mis-selling of financial products by banks, which is causing significant financial harm to ordinary citizens. Singh submitted a Zero Hour Notice, addressing the issue directly to the Secretary General of the Upper House of Parliament.
Singh cited a survey that exposes the incompetence of many bank employees tasked with selling these products. Disturbingly, a study of 1,655 Relationship Managers from 20 banks revealed that 57% felt pressured to sell financial products without regard for customer interest. An overwhelming 85% couldn't differentiate between regular and direct mutual funds, while 98% were unaware of the differences between real and nominal returns.
Moreover, Singh highlighted financial statistics showing that nearly half of life insurance policies expire within five years while banks reap massive commissions amounting to Rs 21,773 crore. He called this a betrayal of customer trust, especially impacting small investors, pensioners, and middle-class families who fall victim to unsuitable financial products.
(With inputs from agencies.)
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