Financial mis-selling happens when bankers lure customers to meet their targets. Eg: selling insurance while hawking investment options. To tackle it, fix sellers’ incentive structure & mandate stiff penalties
Sometime during UPA’s tenure, the then FM held a meeting on a Saturday amid a tussle between Sebi and Insurance Regulatory and Development Authority of India (IRDAI). The fight was over the regulation of unit-linked insurance policies (ULIPs). Several consumers had complained about the product not delivering the kind of returns promised by agents who had sold them these policies. During the presentation, a secretary-rank officer couldn’t hold himself back and said he had faced the same problem.