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FOR Indian consumers, the year 2008 was one of the toughest in recent times, wherein they had to constantly grapple with soaring prices. But I would also remember the year for some of the most rewarding judgements of the highest court in the country. This was also the year when the Reserve Bank of India finally tried to reign in banks and financial institutions resorting to unlawful methods of repossession of hypothecated goods by issuing detailed guidelines on the subject. When one looks back at the year gone by, what stands out is the suffering that consumers were put to as a result of the steep rise in the prices of all essential commodities during the year. The rate of inflation, based on the wholesale price index, went up from a modest 3.79 per cent at the beginning of the year to a whopping 12.63 per cent in August. But at the retail level, the price rise was even more staggering. From cereals and pulses to edible oils, milk and vegetables, almost every item in the food basket became dearer. What made matters worse was the fact that the price rise was not restricted to agricultural commodities only. It extended to manufactured goods, too, such as household appliances. Travel became expensive with hikes in the prices of petrol, diesel and aviation turbine fuel. LPG became costlier, so also the menus in restaurants. In fact the price rise affected all the three basic necessities—food, clothing and shelter. The cost of construction went up as a result of the upward movement of steel and cement prices. That was not all. Home loans became dearer; so also clothing as a result of increased cotton and wool price. Even air fares became unaffordable. All in all, the year 2008 was extremely tough for consumers. Fortunately, as the year draws to a close, the pressure on prices has begun to ease. The rate of inflation has come down to a single digit. The prices of petroleum products have nose-dived, steel prices have come down, home loans have become more affordable, air fares are going down. Hopefully, the year 2009 will be a better year on the price front. Now I come to the positive aspect of the year—the orders of the apex court. For years, clients have been protesting over the steep rate of interest charged by credit card companies on outstanding dues, and have been urging the RBI to put a cap on the rate. But all that the regulator did was to urge banks not to charge usurious rate of interest, without defining the percentage at which the rate became usurious. Finally, the apex court stepped in, and after a detailed perusal of the issue, told banks that interest beyond 30 per cent would be regarded as usurious rate of interest, and, therefore, an unfair trade practice. It directed banks to stop forthwith such a practice (Awaz v RBI, CC no 51 of 2007). The consumer court also came to the rescue of investors during the year when it held in the case of a senior manager, Delhi Stock Exchange v Ravinder Pal Singh (RP No 1474 of 2005) that stock exchanges could also be hauled up before courts for any deficiency in the service provided by them. Similarly, in the case of Regional Passport Officer, Bangalore, V Anuradha T Gopinath (RP no 2389 of 2008), the highest court in the country brought the passport authorities under the purview of consumer courts when it held that they, too, could be taken to task for negligent service. For several years now, private banks have been resorting to unlawful methods to illegally repossess financed vehicles following consumers’ failure to pay a few instalments. In several cases, customers have suffered serious injuries, and in some, even died following attacks by goons employed by financial institutions as recovery agents. As criticism of the banks’ high-handed methods and the inaction by the banking regulator mounted, the RBI was finally forced to issue detailed guidelines to banks on the matter, making it clear that recovery of loans or seizure of vehicles could only be done through legal means. This was indeed an important step in protecting the rights of those who buy financed goods, and even those who borrow money from banks. However, given the global financial meltdown and its consequences, the year 2009 requires the banking regulator to do much more to safeguard the interests of customers. In fact this would be the year when the willingness of the administration to protect their rights would be put to test.
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