When words might finally grow teeth

For years, I have been writing about how the personal finance system is designed to extract money from ordinary savers rather than serve them. Just a few weeks ago, I discussed a book by John Campbell and Tarun Ramadorai that makes this case with rigorous academic evidence. They argue that the financial industry does not profit despite your mistakes – it profits because of them. In fact, they induce these mistakes deliberately. Shortly before, I wrote about how our regulations, however well-drafted, remain toothless because the consequences of violating them are trivial compared to the profits to be gained. Now comes news that the Reserve Bank of India has issued draft norms that could, if (a huge if) rigorously implemented, fundamentally change this calculus. The proposed rules would require banks not merely to obtain customer consent before selling third-party products such as insurance and mutual funds, but also to ensure that these products are appropriate for the customer. More significantly, i