WORKSHOP ON

‘CONSUMERS AS STAKEHOLDERS IN CORPORATE POLICY’

(December 18, 2014)

The National Consumer Helpline, Centre for Consumer Studies, IIPA organized a one

day workshop on ‘Treating Consumers with respect: Consumers as Stakeholders in Corporate

Policy’ on December 18, 2014 at Indian Institute of Public Administration, New Delhi. The

workshop was conducted to celebrate the National Consumer Day, 2014 as well as to

commemorate the starting of the 3rd phase of National Consumer Helpline from the Indian

Institute of Public Administration. The workshop was focused for corporate executives in the

functional area of Marketing, Customer Service and Quality Assurance to exchange

experiences, ideas and best practices. The workshop had over 30 senior and middle level

corporate executives from a wide spectrum of industries, ranging from consumer durables,

Telecom, E-Commerce, Banks, Insurance, Electricity, etc.

The full day workshop had three Technical Sessions starting with the first technical

session on QMS (Quality Management Standards) - Customer Satisfaction - requirement for

complaint handling system in organisations. The second technical session was on Health

Services and Consumer Perspectives. The third and last technical session was on Consumer

Safety and Responsible Business Practices.

Workshop Participants along with Mr. Manoj Parida,Joint Secretary, Ministry of

Consumer Affairs, Food and Public Distribution

Prof. Suresh Misra addressing the Participants

Mr. Manoj Parida, IAS delivering the Inaugural Address

Dr. Mamta Pathania, Assistant Professor, IIPA, welcomed the Speakers and the

Delegates to the Workshop. She briefed the purpose of workshop by giving a snapshot to the

participants.

Suresh Misra, Chair Professor & Coordinator,

CCS, IIPA delivered the Welcome Address in which he

connected with the corporates through a common

thread - consumer. He brought out the fact that

companies should concentrate more on their

operations to minimize litigation. "No one wishes to

move to consumer courts, neither consumers nor

companies.” He highlighted the need to minimize

complaints and fine-tune satisfactory redressal so that

customers keep coming back to the company, happily.

The chief guest of the event, Shri Manoj Parida, Joint Secretary, Department of

Consumer Affairs, GOI delivered the Inaugural Address. He elaborated on the evolution of

consumer empowerment and explained how, after the colonial era, focus shifted to growth of

the Indian economy. Attention to consumers came at a later stage, in 1986 through the

Consumer Protection Act. The main essence was identified as the consumer. He emphasized

that consumers and industries are not on opposite sides and similarly, government and

industries. He also pointed that companies lay more stress on the quality of product rather than

customer satisfaction, customer care is only

found in the advertisement of banking and

insurance but product manufacturing

companies only talk about the quality of their

products and not of customer care. Additional

customer care will surely help. He suggested

that collaborating with the National Consumer

Helpline and resolving complaints, is like

companies outsourcing their grievance

redressal mechanism to the government. Complaints sent by NCH and resolved by companies

prevent court cases and harassment of

consumers bringing both the parties to a mutual

settlement.

Dr. Mamta Pathania addressing the

Participants

Mr. Praveen Khanna, addressing the

Participants

Participants during the Workshop

He wished that there should be 30,000 Companies

empanelled with NCH so that complaints could be resolved without

having to go to consumer forums. He also suggested to the

participants that as when you change your job, get your new

company empanelled at NCH as it is a wonderful forum which

prevents court cases and brings customer satisfaction. He

highlighted the forthcoming substantial amendments to the

Consumer Protection Act 1986, which will include a National Consumer Protection Authority. He

briefed the audience about how complaint lodging has gone digital and consumers today have

better options to address their problems. But still there are loopholes, which are to be filled. He

expressed that concern for consumers is missing in our businesses inspite of the fact that we

have a large population of consumers in the country. However, companies must and should

realize that the consumer is the most important stakeholder and companies are bound to take

care of them. He gave an example of rural masses who neither have awareness nor choice.

He also talked about corporate business ethics whereby he suggested companies

should focus on customer service at the initial stage itself. An effective step that companies can

undertake for this cause is to keep a reasonable selling price of their products. He emphasized

on a caring attitude towards consumers and they should get value for the money they spend. He

stressed that Government is going to be strict on consumer protection areas and also

suggested that providing value for money and faster response to consumers would reduce the

increasing rush at consumer courts. He also wished that “Indian companies should be known as

great producers and customer caring companies to the world”. He ended on a beautiful note

that “better efficiency in work and in dealing with customer grievances will bring smiles on faces

of consumers”. The Inaugural session was followed by a brief introduction of the participants

followed by the technical sessions.

The first technical session was on QMS-

customer Satisfaction- requirement for complaint

handling system in organizations. In this session,

Mr. Praveen Khanna (Scientist E, Bureau of India

Standard BIS) shared his perspective that having an

effective complaint-handling process helps in quality

delivery of products and services, enhances

Dr. Sanjeevan Bajaj addressing the Participants

customer’s loyalty and improves the organization’s reputation. He broadly classified the guiding

principles of complaint-handling standard IS/ISO 10002 and its impact on companies. This

includes visibility for, where and how to complain, accessibility for easy complaining,

responsiveness towards the complaints received, equitable objectivity and confidentiality for

customers’ identity, customer focused approach, accountability of decisions and continual

improvement as a permanent objective. In addition to being effective and efficient, complaint-

handling process should be consistent and measurable. The operation of grievance handling

should start from appropriate communication to complainant and an acknowledgement of

complaint till final closing with justified response of the problem to consumers. He explained the

complete process of IS/ISO 10002, and emphasized on the need to analyze and evaluate the

complaints - whether they are recurring or single incident problems, and, accordingly, set up

complaint-handling processes which have better effectiveness and efficiency. He also informed

about the ISO 10001 - guidelines for code of conduct to prevent consumer complaints of

organization, ISO 10003- guidelines for dispute resolutions external to the organization and ISO

10004- to monitor and measure customer handing systems and IS 15500 - to measure service

quality for public service organization. He also added that BIS is developing a certifiable Indian

Standard on Complaint handling System.

Dr. Sanjeevan Bajaj, (CEO- FICCI Quality Forum)

while addressing the participants stated that it is

easy to solve and takes lesser time at lower levels

rather than when it is escalated to the CMD or to the

Government, as the whole focus at all levels then is

in following up to redress the complaint because the

customer has no trust in the person responsible.

She stressed that it is the duty of Industry and

organizations to bring that trust to the customer in

resolving the complaints. Therefore the need arises

for designing processes and classification of

complaints in an effective manner, with SLAs for resolution. Companies should know nuances

of complaint-handling and classification of complaints. She highlighted her view of matching

expectation of consumers with experience of companies and managing both. She then

elaborated on the purpose of FICCI and how it is organized with expert committees and task

forces for 70 economic sectors.

Mr. Ravindra Kumar addressing the

participants

She pointed out the major consumer intensive divisions like retail, FMCG, quality,

smuggling and counterfeiting. For the work on consumer issues by FICCI, she categorized it

into three major divisions as industry action, consumer education and government regulations

which include best practices compilation and dissemination, educating consumers about

counterfeiting and smuggling of products. She brought out her view that promotion of standards

are being done through active participation at

conferences and seminars.

Mr. Ravindra Kumar, (COO, SBI Life

Insurance Co. Ltd) brought out his perspective that

treating customers fairly and complaint solving

were of extreme focus for them. “Only a few

percent of consumers complain and this indicates

that those who complain have trust in the company

that he will be taken care of, and it is the company’s

responsibility to address his complaint”. Companies

must take it as a fair feedback. He pointed out that

complaints arise due to factors like mismatch between customer expectation and service

delivery, lack of empathy, and deficiency in employee empowerment. He said that “don’t treat a

complaint letter or proposal form as paper, empathy won’t come. Treat it like a customer who is

alive and empathy will start coming”. He outlined the benefits of having a robust complaint

management system which is necessary for a sustainable organization. He brought out SBI

Life’s vision, values and grievance redressal policy as their corporate philosophy for being

customer centric and valuing customers - known as ‘Pratham’. The standardization in

compliance for ISO 10002:2004 benefits them in many ways like having lesser ‘Turn around

Time’ for resolving problems, better complaint analysis and huge reduction in the number of

complaints. SBI Life has been appreciated by customers for their politeness, intelligence,

personal touch, fast action, empathy, etc. “Service is the key differentiator and we keep trying

and trying to improve our processes” “There is management Commitment to customers”. He

also highlighted that complaints related to misselling are also included in management reviews

and company dashboard. He then highlighted some impressive statistics which showed that at

SBI Life, they were able to reduce the turnaround time (TAT) from 11 days to 6 days. The TAT

prescribed by IRDA is 15 days. He presented some of the appreciative letters and emails

received from customers. He ended on a promising note that his company will keep working

towards achieving more and more customer satisfaction.

Dr. Girish Tyagi addressing the

Participants

Mr. Ajay Nambiar, Chief Service Officer,

EMAAR MGF outlined the evolution of EMAAR-MGF,

the growth of their organization. The organization has

close to 50 projects with majority of projects in Delhi-

NCR followed by Mohali. This sector is highly

unorganized and has its own challenges. He stressed

on the importance of earning respect which was

necessary for the company to set a mark in the

industry. He shared his company’s major steps towards

‘process’ orientation which provides better service to

consumers. This includes a centralized call centre which receives complaints, a documentation

team, collection team, contact centre, email facility and toll-free number for customers to query

or complain any time.

Automation of processes like payment receipts through online payment facility via kiosks

and allotment letters also serve the purpose. They have come up with technologies like

Customer Response System (CRS) and web enabled e-services to provide better customer

service. He emphasized on the fact that a well defined process enables companies to achieve

efficiency and accuracy by coordinating efforts and managing complaints effectively to bring

better customer experience. Many of the complaints received are generally queries which are

transactional in nature and can be addressed without any people involvement. Automation can

do that easily and customers like to serve themselves in such cases e.g. making payments

He highlighted that the organization is striving to be on the forefront in terms of quality

adherence and this includes complying with ISO 10002 and taking up six sigma yellow belt

projects. Their organization has classified around 20 different types of complaints. For the

personalization of services to customers, EMAAR-MGF has taken steps like communicating

Expected Waiting Time, delivery dates, having CRM systems which identify customers by

name, online payment etc.

The Second Technical session was on Health

Services and Consumer Perspective. Dr. Girish Tyagi,

Registrar & Secretary of Delhi Medical Council was

the first speaker. He introduced the Delhi Medical

Council and its role in Medical Negligence cases. He

Mr. Ajay Nambiar addressing the

Participants

Dr. K.K. Kalra addressing the Participants

Dr. Premlata addressing the participants

explained the term called ‘Medical Negligence’ in detail. He also pointed out the code of conduct

and practices of Doctors, which also covers unscrupulous practices like advertising any

medicine directly or indirectly, soliciting patients, employing touts and agents for procuring

patients, etc. He discussed some of the cases related to professional conduct and medical

negligence in which Delhi Medical Council has passed awards and penalized doctors

Dr. K.K. Kalra, CEO of National

Accreditation Board for Hospitals and

Healthcare (NABH), Quality Council of India

focused on the need of quality in Indian

Healthcare Industry. He discussed about the

challenges the health industry is facing in terms

of evolving public expectations, lack in patient

and visitors safety and complexity in managing

patients. He emphasized on the importance of

standards in processes and principles to improve health and health services. He added that

NABH was established in 2005 to ensure best services to the patients, stimulate continuous

improvement and to protect the rights of the patients. He emphasized that accreditation also

provides better working environment and continuous learning to hospital staff. NABH has

various accreditation programs for hospitals, blood banks, nursing homes, dental care, imaging

centers, etc.

The accreditation is a lengthy and tedious process, which requires 2-3 years for

implementation, hence NABH has simplified the program into four levels – Safe-1, Pre

accreditation (entry level), pre-accreditation(progressive level) and Accreditation, to encourage

hospitals to take it up and implement it on a step on step basis. “Quality is about change in

attitude and mindset.” He brought out the view that improvement can be done with the help of

standards, protocols, checklists and by learning when things go wrong.

The third speaker for the session was Dr.

Premlata, Sector Expert, NCH, IIPA. She started

her presentation stating that customer

expectations are changing with time, as

Mr. Pavan Duggal addressing the Participants

awareness and consciousness among people and organizations have grown. She explained

how lack in quality management system starts with a conflict, which, if not addressed properly,

finally converts into litigation. When standard quality systems are not followed, it becomes a

grievance, if grievance is not addressed as per consumer’s expectation, there is conflict of

interest, and when rules/ regulations are not followed, a grievance becomes a dispute which

ultimately reaches consumer forums for resolution. She pointed out that Courts do not make

laws; they just interpret the laws and give a decision. She highlighted some cases in sectors like

education, insurance (mediclaim), interim orders and real estate, where landmark judgments

have been passed. Judgments from consumer forums were cited, focusing on the need of the

market to make consumer friendly policies, because when the consumer forum receives matter

for adjudication, legal interpretation of violated rules and laws are bound to come up, which may

not favor the erring industry/corporate or any organization.

The presentation focused on the need to redress grievances at the company level itself,

rather than reaching the consumer forum as the result of which may not be favorable for the

company and industry.

The Third Technical Session was on

the theme Consumer Safety & Responsible

business practices.Post lunch, the first topic

in the third technical session was on

“Safeguarding Consumer Interests in Cyber

Space’ by a renowned lawyer of the

Supreme Court - Mr. Pavan Duggal. He

emphasized on the basic tenants of the

Information & Technology Act 2002, which

has created the appropriate legal

framework for promoting e-commerce in the

country and provided legality to the electronic format. The legal framework of IT Act has various

provisions like electronic authentication and cyber security related issues. All legal entities have

a duty to ensure that its business operations comply with the rules and regulations of the

Information Technology Act, 2000. He gave ‘live’ examples of some of the companies such as

Bazee.com in which the CEO of the company was arrested and penalized by the court for

allowing paid downloads of offensive videos taken and circulated without consent. He also

informed the participants about guruji.com, which was banned when the music company “T-

series” took the company to court for allowing users to download copyrighted songs, free of

cost.

He also informed that digital signature for electronic transactions are binding on both the

parties. Law has granted legal framework for electronic governance like income tax returns.

Also, the “IT Act is based on concept of personal liability. If I am an office employee and I mess

up something on my office network, not only will my office be liable but I will also be held liable”.

He made the session very interactive by giving participants different situations while

communicating by electronic mail and how it could lead to legal disputes. The most important

aspect of the Information Act is that it is binding on both the entities. When a company and a

consumer enter into a contract and accept it through email, or any other electronic medium, it

becomes binding to both the entities. It also provides for the right of privacy and all other rights

of an individual while using electronic mail or any other device. At the end, he compared the IT

Act with Lord Krishna of Mahabharata, “Krishna gave the message ‘Come to my Sharna, I will

take care of you, IT Act exactly has the same message - you come to my ambit I will make sure

nothing will happen to you” . This is the essence of the IT Act.

While replying to questions of the participants, he pointed that “dealing with data you will

have to be concerned as there is specific compliance in the IT Act for data. The Law recognizes

two types of data - normal data and sensitive personal data. The moment you handle or

process sensitive personal data such as biometric data, financial data, the law mandates one to

do additional compliances”. He also suggested to the participants that as the IT Act is silent

about the duration that records have to be preserved, it is advisable to follow the RBI rule of

keeping records for seven years. At the end he said that “compliance, compliance and

compliance is the only way going forward’”.

A Panel discussion on the theme- The

Changing Paradigm of Customer Services in New

Age Banking was also done. The Panel members

were Sri. J.K. Gupta, GM (Customer Care) Punjab

National Bank, Sri. Shiva Tadikonda, DGM,

Principal Nodal Officer ICICI Bank, Sri Lokendra

Nath , DGM, RO-NCR, Indian Overseas Bank, Sri

Ashok Malik, Regional Nodal Officer - North HDFC Panel Discussion in Progress

Bank and Sri Prabhat Kumar, Sector Expert BFSI, NCH.

The discussion was initiated by the NCH BFSI Sector Expert - Mr. Prabhat Kumar who

was moderating the discussion and who briefed the participants about the core topic- Customer

Services in new age Banking. New age banking is based on advanced technology. The ATM,

Debit and Credit cards, Phone and Internet Banking are all about providing convenience to

customers. There are a number of inherent constraints and problems. We have to recognise

that customers at the bottom of pyramid are illiterate, financially illiterate and non-techno savvy.

Mr. J. K Gupta explained banking from traditional to technology reliant banking, where

banks started selling a variety of financial products. Banks adopted the latest technology, and

the adoption of technology recognizing the market needs has transformed banking. Mr. Shiva

Tadikonda of ICICI Bank added that customers desire and need of convenience resulted in

ATM, Internet banking and so on. “Adopt or perish” was the situation that banks were facing.

Mr. Ashok Malik of HDFC Bank reiterated on the transformation of the Banking Industry from

Traditional to New-era Banking. Now a day, displays are made available in the local and

regional languages too, the “transformation” and “Innovation” has come in and is essential too.

Mr. Prabhat Kumar supported that “Innovation is essential and change is life”, but the

question is related to hybrid and complex products. Is it safe to deliver such products, without

educating consumers? Mr. J K Gupta responded that PNB has adopted multi-channel measures

to educate the customers-especially rural customers. The moderator quoted the example of Jan

Dhan Yojana (PMJDY) as Financial Inclusion phase III. Mr. Shiva Tadikonda added that PMJDY

is a movement and the real enabler is Business Correspondents. Mr. Lokendra Nath shared his

experience and advocated that there is a dire need for Technological up-gradation to serve the

125 crores Indian population.

Ms. Deepika Sur, Project Manager NCH, raised the issue on “Banks concern for their

consumers” and shared NCH experience that Banks should be sensitive to consumer

grievances, even in the midst of automation and technology. Mr. Shyam Yadav from the

audience added that consumers education is an on-going process. Mr. Shiva added that RBI

introduced BCSBI and The Customer Charter of Rights, where consumer protection is the focal

point. Mr. Prabhat Kumar raised various issues related to lack of transparency, mis-selling,

deficient services, fraudulent transactions etc, quoting from the complaints received at NCH.

The break-up of the Complaints received at NCH points predominately to Unsatisfactory

Redressal {28 percent}; ATM: Money not dispensed, but A/C Debited {21 percent}; Delay/Denial

of Services {15 percent}; Fraudulent transactions {9 percent} etc.

The cases discussed were:

Case 1 – The complainant’s account got debited while using the ATM, but money was not

dispensed. Despite making complaints, the problem is not solved and two months have passed.

One of the panellist opined that this case could be an exception, and may be caused due to

some mischief done in the ATM machine, due to which such transaction has taken place. Such

cases are being addressed on case to case basis

Case 2 – The complainant had a concern that the bank was forcing him to take an Insurance

Policy else his loan amount will not be disbursed, although it was sanctioned.

The panellists agreed there are cases of mis-selling and is being addressed on case to case

basis.

Case 3- In this case, a credit card holder is being forced by the bank to pay his credit card bill

(inclusive of taxes), although the card holder has received a credit refund from a shopping portal

of an amount higher than the bill amount.

All the panellists accepted that this was sheer carelessness on bank’s part and it should not be

done.

Case 4 – The complainant was the victim of a fraudulent debit entry in his credit card account -

a phishing case which originated from Nigeria for an amount of Rs.13, 000. The complainant

had filed an FIR and had approached the CBI, but CBI did not take up the matter as the amount

was too small. The FIR report was given to the bank and dispute form was also filled, but the

bank keep on charging interest and other charges on the disputed amount of Rs 13000 every

month, and sent a bill to the card holder of Rs 90, 000.

The panellists were of the opinion that this is the normal procedure for credit card billing.

However, one of the participants raised the concern that shouldn’t there be a time limit as to

when this interest amount should be stopped? Else this will keep going up, and may not stop

even at Rs. 9 Lacs.

Mr. Shiva Tadikonda said that “bankers are not in the business of cheating and

they follow the RBI guidelines. Banking agreements are not one sided and consumers interest is

taken care of very well by the regulator. With regard to the question raised, there is larger

stakeholder and bank is not in the business of bailing out money. There is social Banking,

commercial Banking and retail Banking. At times there is pitfall in retail banking due to various

issues, Banking agreement is to protects consumer and also make consumer liable at some

level otherwise there will be lollithness in transactions.” He agreed that time and again systems

should be relooked at, to ensure better services and address issues.

Prof. Venkatesh Umashankar

addressing the Participants

At the end of the discussion, the Panel members agreed that Financial Literacy for

Consumers is essential. Secondly, adopting technology is a “Win-Win” situation for both -the

Banks and the customers. The need to adopt technology and growth is undisputed. There is a

shared realization that system upgradation is crucial to enable Indian Banking achieve its

growth potential. Support and consensus of all stakeholders is equally critical to move forward.

The last session of the day was on Principles &

Code of Business Ethics &CSR - the Consumers

Perspective. In this session, Prof. Venaktesh

Umashankar, Professor, Great Lakes Institute of

Management gave an insight of responsible business

practices and highlighted the scope and responsibility

of responsible corporations towards their customers. He started the presentation by giving an

example of Uber India which kicked off the debate regarding companies to be responsible

towards their users and customers. He informed the participants about a news item that

appeared on the same day stating that the drug regulator of Germany has banned 80 generic

medicines with immediate effect on the grounds that their clinical trials conducted by India’s

pharmaceutical research company GVK Biosciences were “insufficient”.

He stated the overall relationship between an organisation, its stakeholders and society.

Consumer is the most important stakeholder because of which all the other establishments

exist. He gave the importance of consumerism in today’s market, where as a socially

responsible corporation, the essential feature of social responsibility is the willingness of an

organization to incorporate social & environmental considerations in its decision making and be

accountable for the impact of its decisions and activities on society and the environment

He further stressed on the importance for organisations and its employees to be

responsible. He gave the situation where Karl Sym, ex MD of General Motors, who was held

responsible for the cars manufactured in India in which deliberately sub standards parts were

used. In this case, the whistleblower was the head -service quality. It was a clear case of

corporate fraud. He emphasised that everyone who is involved in any kind of irresponsible

behaviour or malpractices may be taken seriously by the government. The importance of CSR

Ms. Deepika Sur delivering the Vote of

Thanks

and mandatory contribution of 2 percent is justifiable and if corporations do not reciprocate with

the demand of sustainable development, it may increase further.

Prof. Venkatesh gave participants an insight into ISO 26000, which is an international

standard providing guidance on the underlying principles of social responsibility, recognizing

social responsibility and engaging stakeholders, the core subjects and issues pertaining to

social responsibility and on ways to integrate socially responsible behaviour into the

organization. The overall clause 6 of ISO 26000 is with regard to social responsibility in which

sub clause 6.7 is of core Consumer issues. He elaborated the Sellers and Buyers rights with

regard to consumerism. He also explained the areas of deficiency on the part of marketers by

giving false and wrong promises in their communication. The mis-selling of financial products is

a classic example of wrong communication to sell the product.

At the end, he enlightened the participants with the National Voluntarily Guidelines

(NVG’s), issued by the Ministry of Corporate affairs, Govt. of India, available for ready reference

on the website of the Ministry of Corporate affairs. NVGs aim towards providing a direction to

the Indian corporate sector in being socially responsible and also channelizing their efforts

towards inclusive and sustainable development. These guidelines provide 9 principles and

advocate that companies, whether large or small, should follow all these principles rather than

choosing the ones that might suit them. These guidelines are closely related to ISO 26000

which is a global standard for responsible business practices.

The workshop was successfully concluded with a

vote of thanks by Ms. Deepika Sur, Project Manager,

NCH to all the speakers for sharing their insights and

knowledge, and to the participants for being very

interactive during the full day programme.

The report would be incomplete, if we do not record our appreciation to the officers and

staff of the Administration and Training sections of the Institute for their help. However, Dr. C.

Giri (Registrar), Mrs. Alka Jindal, Supervisor (Training) and Mr. Jitender (Training Assistant)

deserve special mention for their support.

We would also like to take this opportunity to acknowledge our gratitude to Sh. T.

Chatterjee, Director, IIPA for his guidance and encouragement in conducting our programme.

The Secretary, Additional Secretary and Joint Secretary, Department of Consumer Affairs,

Ministry of Consumer Affairs, Food and Public Distribution, Government of India, deserve

special thanks for sponsoring the Workshop by the National Consumer Helpline, Centre for

Consumer Studies, IIPA and reposing confidence and trust in the Indian Institute of Public

Administration, New Delhi.

------------------------

(Deepika Sur) (Mamta Pathania)

Workshop Coordinators