Unfair Banking Practices: An Empirical Study on Consumer Impact and Financial Literacy

Despite remarkable advances in digital banking and consumer financial services, unethical practices continue to plague the Indian banking sector. These include unauthorized deductions, misrepresentation of financial products, unresponsive grievance systems, hidden charges, and increased vulnerability to cyber fraud. The objective of this study is to investigate the prevalence and impact of such practices on consumers and to examine how financial literacy influences their ability to navigate these challenges. This paper draws on primary data collected through surveys and supports its findings with secondary research from credible financial journals, regulatory frameworks, and institutional case studies. The results reveal a trust gap among consumers, particularly among younger demographics and salaried individuals. The paper concludes with detailed recommendations to address ethical lapses and enhance consumer empowerment through policy reform, education, and technology. Keywords: unfair banking practices, financial literacy, grievance redressal, digital fraud, consumer protection, regulatory reform