Comparison of Financial Consumer Protection of Public Sector Banks and Private Sector Banks: Application of Mann-Whitney Rank Sum U-Test

Abstract

Financial Consumer Protection improves confidence of depositors in the banking (financial) systems by making sure that they invested (deposited their funds) in products suitable for their risk profile and financial plans. This, in turn, enhances the stability of banks’ deposit base and diminishes the risk of panic and runs on bank deposits. Consumer protection directly contributes to increase efficiency of financial intermediation, transparency of financial products and services, and product innovation driven by consumers’ demand. Effective consumer protection facilitates increased penetration of the financial sector, through improved awareness of financial products and services, consumer’s rights and obligations, and the advantages of life-long financial planning. Therefore, the present study aims to examine the level of financial consumer protection and also compare financial consumer protection of public sector banks and private sector banks. This study covers both primary data and secondary data. Primary data has been collected from the customers of commercial banks using pre-tested interview schedule and the secondary data has been collected from standard books, journals, magazines and websites. The researcher has applied purposive sampling technique to identify the 228 sample respondents of the study. In order to analyze and compare the financial consumer protection, the researcher has used the Percentage Analysis and Mann-Whitney Rank Sum U-Test. This study reveals that there is no significant difference between the level of financial consumer protection of public sector commercial banks and the level of financial consumer protection of private sector commercial banks.

Information as a Consumer Protection Instrument on the Consumer Credit Market

“…To sum up, financial consulting and knowledge is crucial for strengthening consumers' economic interests. Such conclusions have been confirmed by empirical studies using the Mann-Whitney Rank Sum U-Test, which demonstrated that consumer education and access to effective consumer redress are two of the most vital mechanisms that can strengthen consumer protection (Selvakumar & Sathyalakshmi, 2015). In conclusion, an educated consumer is able to understand the information presented in a standardized way and make appropriate decisions on its basis.…”