Republic Day is just 2 days away. The Constitution of India was framed on January 26th 1950. The date on which the constitution was framed is known as the Republic Day. The Constitution of India grants you Fundamental Rights. Nobody in the country can exploit you or deny you the Fundamental Rights, granted to you by the Constitution of India.
Now, let’s talk about your Financial Rights. You enjoy financial rights, which most citizens don’t even know about, or care to find out. Financial literacy is very low in India. Unscrupulous agents who deal in financial products, use this lack of financial knowledge, to exploit, cheat and trick you.
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Mis-selling of financial products is very common in India. Life insurance agents and many agents dealing in financial products, mis-sell financial products to you and other citizens in India. Mis-selling is selling you a financial product you don’t really need, or deliberately not mentioning certain details like hidden fees in a financial product, just to pocket commissions. Mutual fund distributors sell you mutual funds and earn a commission. This commission is paid by the Fund House to these agents. The commission paid is disclosed in your common account statement.
Your life insurance agent pockets a handsome commission, when he sells you a life insurance plan. A life insurance agent earns 25-35% in commission, when he sells you an endowment life insurance plan. An agent has to furnish this information before selling you the life insurance plan. When you avail a ULIP Plan, the commission paid to the life insurance agent is revealed in the last column of the benefit illustration.
You have bought a new life insurance plan, received the policy documents and not happy with the terms and conditions? You can return this life insurance plan within 15 days of receiving the policy documents called free- look period and get a refund. Only life insurance plans and health insurance plans which have a term of at least 3 years, enjoy this benefit.
Defaulted on a loan? You have the right not to be harassed by the bank or its recovery agents. The bank/lender has to give you a 60-day notice. You can present your case to the authorized officers, within this period. Recovery agents cannot threaten you during this period and if they do, the bank is held responsible. The recovery agent can call you only between 7 AM to 7 PM and not at any odd hour. If you are harassed, you can even file an FIR.
If you report an unauthorized transaction on your debit/credit card and you can prove that you have not made the transaction, the bank has to reverse that transaction. If the bank disputes your claim, it’s the responsibility of the bank to prove its case. You can even file an FIR if you are subject to card fraud.
The life insurer has 3 years from the date of issue of the policy, to prove that you have suppressed material information or committed a fraud. The life insurer cannot reject your/nominee claim for whatever reason, after the expiry of the 3 years. Simply put…The life insurer has to honor your/nominees claim, after the expiry of 3 years from the date of issue of the policy. There are no exceptions to this rule.
Filed your income tax returns and are due for a tax refund? You must get this refund within 90 days. If your refund is delayed beyond this period, you must receive an interest of 0.5% every month on the amount to be refunded. Make a request to the tax department website, if you do not get a tax refund in 90 days.
You have paid your hard earned money to the builder who is constructing your apartment. You must get possession of the apartment, within the date promised by the builder. If the builder does not give you possession of the apartment within the promised time, you can ask for a refund of the entire amount you have paid + interest. You must get this refund within 45 days.
Home buyers are the worst affected as they have to pay EMI on home loan + rent. If the builder does not give you possession of your home within the promised possession date, he has to pay interest, same as the EMI you pay on the home loan.
You want to take up a bank locker? The bank might ask you to open a savings bank account, fixed deposit or even a costly life insurance plan. RBI guidelines allow banks to ask for fixed deposits to cover locker rent, up to 3 years. Locker rent is generally INR 2500-3000 a year.
Banks could ask you to invest a lakh in fixed deposits or take up costly life insurance to get a locker. If the bank forces you to invest in an FD or avail a life insurance plan you don’t want, you can complain to the bank’s grievance cell or contact the bank ombudsman.
It’s time for you to stand up for your Financial Rights. The first thing you need to do? Know your financial rights. Then fight for them. Be Wise, Get Rich.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.