Sarath Wijesinghe, Ambassador for Sri Lanka in UAE, former Chairman of Consumer Affairs Authority

ƒÆ’-¡ƒ”š‚ THEME ƒÆ’‚¢ƒ¢-¡‚¬ƒ¢¢”š¬…” CONSUMERS FOR FAIR FINANCIAL SERVICES

The Theme this year is very current and opportune.ƒÆ’-¡ƒ”š‚  The West almost collapsed as the result of mismanagement of financial services.ƒÆ’-¡ƒ”š‚  Ironically the funds belong to the people whose funds managed by financial services.ƒÆ’-¡ƒ”š‚  This puts the consumer into a dilemma whether the money managed by others really belongs to them.ƒÆ’-¡ƒ”š‚  Consumers having full trust fromƒÆ’-¡ƒ”š‚  the financial establishment deposit and invest money expecting them to manage it for them .ƒÆ’-¡ƒ”š‚  It is doubtful whether the financial sector is managing the funds belong to others carefully and with trust.ƒÆ’-¡ƒ”š‚  The news we hear from all over the world is unfortunately not pleasant.ƒÆ’-¡ƒ”š‚  Small and large scale scandals are in abundance.ƒÆ’-¡ƒ”š‚  In order to prevent small and mega disasters the consumer has to be vigilant and careful.ƒÆ’-¡ƒ”š‚  Governments must have mechanism and supervisory power to discipline the errant financial institutions.ƒÆ’-¡ƒ”š‚ 

ƒÆ’-¡ƒ”š‚ Is your money really belong to you

ƒÆ’-¡ƒ”š‚ It is doubtful whether your money really belong to you because it is controlled and managed by other institutions for you.ƒÆ’-¡ƒ”š‚  Unfortunately world banking system is such that one cannot individually manage the funds without the help of the banking and financial institutions.ƒÆ’-¡ƒ”š‚  Therefore it is the duty of the government to establish a mechanism for the protection of the consumers who has entrusted the responsibility and trust on respective governments and the financial institutions.

Central Bank , Banks and financial institutions, private as well as State Institutions manage our money for which their accountability to the investors are less or no.ƒÆ’-¡ƒ”š‚  The world financial crisis was due to the fraudulent conduct and mismanagement of financial institutions in the USA and UK and the West to which the entire world had to pay a high price.ƒÆ’-¡ƒ”š‚  In the West the housing market on which the money market depends collapse as a result of over inflating the property markets.ƒÆ’-¡ƒ”š‚  What is used to ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-credit cardƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚ having living where spending was based on paper work of financial institutions.ƒÆ’-¡ƒ”š‚  Nation was used to live on loans and credit cards.ƒÆ’-¡ƒ”š‚  This is not safe in the long run.ƒÆ’-¡ƒ”š‚  They are a nation of debtors live on debts with no shame or hesitation unlike Asians who are reluctant to live under the roof of mortgage property belong to others.ƒÆ’-¡ƒ”š‚  We tend to live a simple life with our own money instead of enjoying comforts of borrowed money even for high cost of living best way is to lead a simple life with basics. The best healthy and comfortable life is a life of a village who is contended and lives with nature.

ƒÆ’-¡ƒ”š‚ World Financial Crisis

ƒÆ’-¡ƒ”š‚ We escaped the crisis because we are traditionalist and careful in dealing with money.ƒÆ’-¡ƒ”š‚  Our banks were cautions and strictly adhered to rules.ƒÆ’-¡ƒ”š‚  In England Bank Managers were so corrupt that they went after lenders offering loans for consideration leading to the collapse of the financial institutions in the UK and USA currently recovering at a very slow pace.ƒÆ’-¡ƒ”š‚  This indicates that theƒÆ’-¡ƒ”š‚  dishonest fraudulent bankers are in abundance all over the world, not only in Asia and Sri Lanka.ƒÆ’-¡ƒ”š‚  Sri Lanka in that context is fortunate because the bankers in Sri Lanka were careful though the citizens were misled by fraudulent financiers.ƒÆ’-¡ƒ”š‚  It is very sad that leading financial institutions collected large sums of funds belong to the people on trust andƒÆ’-¡ƒ”š‚  mismanaged leaving the investors in the dark.ƒÆ’-¡ƒ”š‚  These are good lessons for future for the investors to invest properly and wisely and it is the duty of the State to educate the citizens on proper investment schemes. There are very unfortunate small and large scale mismanagements in Sri Lanka and in Asia.ƒÆ’-¡ƒ”š‚  Currently there is an investigation of a Sri Lankan who was rated 558^th richest man in the world who is accused of mismanagement.ƒÆ’-¡ƒ”š‚  Though our consumers have gone through difficult periods from the errant financiers the State and the banking sector has been comparatively straight forward and honest in dealings with the consumers.

ƒÆ’-¡ƒ”š‚ Twenty six billion unregulated funds over 26 years amongst others

ƒÆ’-¡ƒ”š‚ This example is chose not to be critical but to learn lessons for the future learning from mistakes ,ƒÆ’-¡ƒ”š‚  This is the financial tsunami in Sri Lanka and it is a miracle that we stood straight despite the collapse of western economies due to their own folly and greed with their selfishness . Sakvithi and other episodes too damaged our economy and trust on the system .ƒÆ’-¡ƒ”š‚  Loss of funds of innocent investors and families had to pay the ultimate price for which the investors and the so-called regulators were responsible.

ƒÆ’-¡ƒ”š‚ Central Bank is the reserve Bank of State with exclusive privileges to lend the Government its currency, lenders to the last resort, The main financial regulator.ƒÆ’-¡ƒ”š‚  European Central Bank and Federal Reserve System in USA manages respective finances.ƒÆ’-¡ƒ”š‚  Sri Lanka Central Bank is managed based on the management of the Bank of England as the main regulator of the finance of the nation.ƒÆ’-¡ƒ”š‚  It implements and maintains the fiscal policy of the nation.ƒÆ’-¡ƒ”š‚  This shows the need for financial management by the State and the conduct of the financial services and supervision.ƒÆ’-¡ƒ”š‚  This also indicates the importance of consumerism and the need to organize themselves.

ƒÆ’-¡ƒ”š‚ Consumerism

ƒÆ’-¡ƒ”š‚ The theme this year is consumers for fair financial services and also strengthening trust between consumers and traders.ƒÆ’-¡ƒ”š‚  Consumer must have legal teeth for protection and organizational powers to organize themselves as against the financial services, industrialists, traders and mega business projects.ƒÆ’-¡ƒ”š‚  The world consumer organization promotes basic rights for all consumers demanding that the rights are respected and protected.ƒÆ’-¡ƒ”š‚  Financial services too come under this and the banks , insurances institutions , social security services, money lenders, micro finance institutions are institutions that needs regulation.ƒÆ’-¡ƒ”š‚ 

Consumerism is a social and economic order that is based on the systematic creation and fostering of a desire to purchase goods and services in ever greater amounts.ƒÆ’-¡ƒ”š‚  The term ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-ConsumerismƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚ is also to refer to consumer movement or consumer activism which seeks to protect and inform consumers by requiring such practices as honest packaging and advertising,ƒÆ’-¡ƒ”š‚  product guaranteeing and improve safety standards.

ƒÆ’-¡ƒ”š‚ FINANCIAL ANDƒÆ’-¡ƒ”š‚  INSURANCEƒÆ’-¡ƒ”š‚  OMBUDSMEN IN SRI LANKA

In Sri Lanka there is financial and insurance ombudsmen which are not government institutions.ƒÆ’-¡ƒ”š‚  Appointment of these high ranking positions are made by the bankers and financial institutions in order to bring about settlement amicably on financial disputes which retard economic developments and developments of the country.ƒÆ’-¡ƒ”š‚  The procedure has been proved effective and successful with the intervention of the good office of the two heads of institutions.ƒÆ’-¡ƒ”š‚  Central Bank and the Consumer Affairs Authority, Public Utility Commission are among the main regulators with enormous regulatory powers in this area and it is time they work hand in hand with the Banks and financial institutions for the safety of the consumers.

ƒÆ’-¡ƒ”š‚ TRANSPARENCY

ƒÆ’-¡ƒ”š‚ Honesty and transparency in business dealings are rare in Sri Lanka.ƒÆ’-¡ƒ”š‚  Consumers are expected to sign blank papers which the contents are either in a language not understood or in small illegible letters.ƒÆ’-¡ƒ”š‚  During litigations and disputes fat cat lawyers and giant mega companies steam role the innocent consumer either not represented or represented by junior lawyers.ƒÆ’-¡ƒ”š‚ 

ƒÆ’-¡ƒ”š‚ CREDIT CARDS

ƒÆ’-¡ƒ”š‚ Credit cards are sold with misdirect information and there is authority to deduct money from the accountants of the employers of the institutions.ƒÆ’-¡ƒ”š‚  This is not acceptable.ƒÆ’-¡ƒ”š‚  It is interesting to note that Chairman, Barclays which is one of the leading world banks and a pioneer in credit card does not possess a credit card. When he was questioned by press his answer was that he does not possess it because he knows what it is.ƒÆ’-¡ƒ”š‚  Therefore it is time that we Sri Lankans should not get into the team of world debtors living on debts.ƒÆ’-¡ƒ”š‚  It is easy for any westerners to buy a car or a house merely by walking into a bank and showing the credit worthiness.ƒÆ’-¡ƒ”š‚  This is not the case in Asia and Sri Lanka.ƒÆ’-¡ƒ”š‚  Sri Lankans want to live peacefully in the house under a roof with no mortgage and no debts.ƒÆ’-¡ƒ”š‚  Today it has become debtors and credit card holders world.ƒÆ’-¡ƒ”š‚  It may be argued that it is needed for business.ƒÆ’-¡ƒ”š‚  But it is a judgment and a decision of the consumer whether what a human being is needed is peace or to live on others funds.ƒÆ’-¡ƒ”š‚  Credit card salesmen today are hovering around workshops collecting praise for their business.ƒÆ’-¡ƒ”š‚  Therefore the consumers should be careful when decisions are taken on credit cards.

ƒÆ’-¡ƒ”š‚ CONSUMER ORGANIZATIONS

ƒÆ’-¡ƒ”š‚ It is time those civil society organizers themselves in the formation of consumer organizations.ƒÆ’-¡ƒ”š‚  It is a duty of the Consumer Affairs Authority to promote, protect and encourage consumer organizations to protect the consumers. Had there been a powerful consumer organization network innocent depositors would not have got into these difficulties.ƒÆ’-¡ƒ”š‚  Therefore we urge the Consumer Affairs Authority to reactivate the scheme launched previously to promote consumer organizations and also to consumer pages published every week in all three languages.ƒÆ’-¡ƒ”š‚  Consumer education is a necessity which is a requirement in consumer organizations.

The theme this year is very appropriate.ƒÆ’-¡ƒ”š‚  Do we have control over our own money managed by outsiders.ƒÆ’-¡ƒ”š‚  This is a sorry state as there should be more accountability and safety for their own funds we earn so hard.ƒÆ’-¡ƒ”š‚  You must press for the intervention of the regulators Central Bank, Consumer Affairs Authority and other regulatory bodies such as Publicity Utility Commission and Telecommunication Regulatory Authority etc.ƒÆ’-¡ƒ”š‚  At the same time consumer should be alert and organize themselves.ƒÆ’-¡ƒ”š‚  Consumer Affairs Authority mooted this concept during 2005-2007 and encouraged the concept of just trader and alert consumer.ƒÆ’-¡ƒ”š‚  We suggest the consumer to refer to the book on ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-ConsumerismƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚ on Sri Lanka by this author on the website.ƒÆ’-¡ƒ”š‚  Therefore it is time for the consumers agitate for fair financial services and to get themselves organized locally and internationally to be the most powerful segment of the society. As on 15^th March 1962 former US President John F. Kennedy said ƒÆ’‚¢ƒ¢-¡‚¬ƒ…-Consumers are the largest economic group affecting and affected by almost every public and private economic decision.ƒÆ’-¡ƒ”š‚  Yet they are the most important groupƒÆ’‚¢ƒ¢-¡‚¬ƒ”š‚.ƒÆ’-¡ƒ”š‚  People say consumer is the most powerful and the king in any country.ƒÆ’-¡ƒ”š‚  It is time that the consumers organize themselves to assert their strength and power.

ƒÆ’-¡ƒ”š‚ (sarath8@hotmail.com)