When rules exist, but fear doesn't

Summary: When readers responded to Words without teeth, the emotion wasn’t anger, but fatigue. This piece brings together those voices to explore why rules fail without consequences, how mis-selling survives and what happens when trust in systems erodes.

When Dhirendra Kumar wrote Words without teeth, his latest Editor’s Note column, it struck a nerve because it named something many investors have felt for years but rarely articulated so bluntly: regulations without enforcement are little more than paperwork. Readers didn’t just agree in principle. Many wrote back with lived experiences that showed how toothless rules play out on the ground, in banks, insurance offices, courtrooms and living rooms.

What emerged from the responses was not cynicism, but frustration. And beneath that, a shared question: if laws exist everywhere, why do ordinary people still feel so unprotected?

Everyone knows the rules. Nobody fears the consequences

Several readers echoed the central argument that laws fail when violators don’t fear punishment.

Raju V K wrote that he had “heard of many people relaying the same experience with Bank RMs and insurance agents” and felt that “having just laws is not sufficient.” What’s missing, he said, is “a simple system wherein the common man can register his concerns without fear of backlash.”

Sajeet Butala’s frustration went beyond finance. He described struggling with a government agency despite the presence of RTI, only to see cases “disposed of” through internal notes with no timelines or accountability. His conclusion was blunt: “People just know how to bypass acts and laws with no accountability…Only power gets work done.”

That sense of power imbalance came up repeatedly. Vijaykumar Patel, an NRI, wrote that after repeated failed complaints to ombudsmen and regulators, he had “stopped investing in India altogether.” His cases against Reliance Mutual Fund and PNB MetLife, he said, led only to stress and wasted time. “Complaining…is usually useless,” he concluded, because influence and corruption overpower the rulebook.

Mis-selling thrives because targets matter more than people

Many readers focused on mis-selling as the most visible symptom of weak enforcement.

Ajay Mittal pointed directly to “targets and commissions” as the driver. Rules exist, he noted, but without enforcement they “cannot instil deterrence among agents or bank officials.” While he acknowledged that police complaints are not always practical, he stressed the importance of investor education, something he credited Value Research with consistently providing.

Gopala Krishnan brought a nuanced industry perspective. He pointed out that insurance agents today are under pressure because “earlier insurance was sold; now it is bought.” With younger customers opting for term insurance, traditional agents struggle to survive, while bank managers aggressively mis-sell insurance to boost retail income. In that environment, he said, the “poor investor” inevitably becomes the victim.

Praveen Godbole went a step further, asking why punitive tools are not used more often. Why not suspend licences for first-time violations, impose escalating penalties for repeat offences, and permanently cancel licences for chronic offenders? He noted that professional bodies like the ICAI do impose such discipline, albeit sparingly. The problem, he argued, is that even where punitive provisions exist, they are rarely used, emboldening violators.

Ranjit Narayanan’s email put a human face on the issue. He described how his son, a student in Kerala, was pressured by a bank into taking a credit card with a high limit, followed by a two-wheeler loan, both designed to meet sales targets. With no steady income, the EMIs became unmanageable. “Today, I’m supporting him,” Ranjit wrote, calling for legislation to punish such bank employees.

Laws matter, but enforcement is complicated

Not all readers dismissed laws as meaningless. Some cautioned against swinging too far in the other direction.

Ajay Ashok made a careful distinction. While agreeing that unenforced laws are ineffective, he argued that laws themselves are essential foundations. “Teeth without words can be dangerous and unpredictable,” he wrote, warning that enforcement without legal and moral frameworks risks arbitrariness and abuse. He also highlighted structural issues unique to India: fragmented governance, political interference, weak regulators and the entanglement of business and politics.

Pankaj Mahidhar pushed the argument even further up the chain. If regulators themselves are lax or compromised, he asked, who enforces accountability? He expressed deep scepticism about the judicial system, citing cases of corruption and contradictory judgments. “Solutions are available,” he wrote, “but there is no entity or group that would push the necessary action.”

Rahul Murdeshwar connected the column’s argument to a broader professional conversation. At a recent financial planning conference, he noted, speakers emphasised the same missing ingredient: consequences. At the same time, he stressed the need to build a stronger community of honest practitioners who put client interests first.

When trust erodes, people disengage

Some responses revealed a more personal withdrawal from the system.

Abhijit Kanetkar reflected on age, perspective and fatigue. He spoke of choosing a quieter retired life by disengaging from constant media noise, even switching off CNBC. The article, he said, “touched a nerve,” prompting him to write after a long silence.

Leena D’Souza focused on trust. She praised Value Research for “saying what needs to be said without fear or favour,” even when it invites opposition from powerful institutions. That willingness to speak plainly, she implied, is rare precisely because consequences usually flow in the wrong direction.

Jal Mahimwala was more pessimistic. With “a trillion laws and rules but almost zero implementation,” he described everyday anarchy, from traffic violations to administrative corruption. His conclusion was bleak: “Don’t think anything will change for decades.”

Sarita Pandya’s detailed account of bank-insurance-hospital nexuses highlighted how deeply profit motives have seeped into institutions meant for public good. She described contradictory outcomes between insurance ombudsmen and consumer courts and expressed cautious hope that the new IRDAI Ombudsman might finally help patients and claimants.

The message readers took away

Across these responses, there was little disagreement on the core point. Laws are necessary. Moral arguments matter. Education helps. But without credible enforcement that hurts, misconduct flourishes.

As Raju V K summed it up, people need not just rules, but a system where complaints can be raised “without fear of backlash.” Until then, many will continue to disengage, comply reluctantly, or learn to protect themselves rather than trust institutions.

Words without teeth resonated because it captured this uncomfortable reality. The responses show that for many investors and citizens, the tiger is already in the clearing. And waving licences at it no longer feels reassuring.

Credits

Raju V K, Sajeet Butala, Ajay Mittal, Ajay Ashok, Gopala Krishnan, Vijaykumar Patel, Praveen Godbole, Ranjit Narayanan, Pankaj Mahidhar, Rahul Murdeshwar, Abhijit Kanetkar, Leena D’Souza, Jal Mahimwala, Sarita Pandya

Also read: Why luck feels like talent in a bull run

This article was originally published on January 20, 2026.