FRA - GS questions based on daily current affairs

1)   Which of the following is/are true regarding Financial Redressal Agency (FRA)?

1) FRA will try to resolve all complaints through mediation.
2) Consumers will not be able to appeal against the orders of FRA.

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
Answer  Explanation 

ANSWER: Only 1

Explanation:
FRA design offers a simplified resolution process, allowing retail consumers in distant and remote locations to pursue effective remedies against FSP, without imposing significant costs on them. It will try to resolve all complaints through mediation.

Cases where the parties are unable to reach a settlement would be resolved through a light-touch adjudication process. It will discourage court-like processes.

The FRA will establish a front-end presence in diverse locations for consumers to submit complaints.

Consumers will be able to appeal against the orders of FRA at Securities Appellate Tribunal (SAT). This would standardise the availability of such an independent mechanism across the financial sector.
2)   Which of the following is/are true regarding Financial Redressal Agency (FRA)?

1) FRA would be managed by a Board to the appointed by the RBI.
2) Independent Assessment Officer will consider complaints against the FRA’s redress function.

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
Answer  Explanation 

ANSWER: Only 2

Explanation:
FRA would be managed by a Board to the appointed by the financial regulators, in consultation with the Government of India (GOI).

It would also have an Independent Assessment Officer to consider complaints against the FRA’s redress function arising out of issues related to its standard of service. It would run an efficient process to manage vacancies.

FRA will provide an independent feedback loop to regulators on complaints, including information on complaints received against unregulated FSPs, with a view to assisting them in strengthening consumer protection regulation and supervision.
3)   Which of the following is/are true regarding Financial Redressal Agency (FRA)?

1) It is to address the grievances of retail consumers against all Financial Service Providers (FSPs).
2) The Financial Sector Legislative Reforms Commission (FSLRC) in 2013 had recommended FRA.

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
Answer  Explanation 

ANSWER: Both 1 and 2

Explanation:
The Government had announced the creation a sector-neutral Financial Redressal Agency (FRA) to address the grievances of retail consumers against all Financial Service Providers (FSPs).

This follows from the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC), which had, in 2013, recommended FRA as part of the Regulatory Framework designed to foster customer protection and independence and accountability of Regulators.

Currently the average consumer is put under unnecessary stress when required to approach different redress agencies based on the nature of the product.

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