The fire in Nanded Express (28 December 2013) is another grim reminder of the apathy of the government and railway officials to safety of passengers. A follow-up report says that the Railways are short of budget provisions to effectively implement safety procedures. Minister after minister, politician after politician, has given greater priority to populism when it comes to making sweeping reforms in the administration of railways. To appease the vote bank, fares have seldom been raised to match the demands of the market. Services continue to be shoddy.

As if train accidents are not enough, now we have the additional hazard of air-conditioned coaches catching fire. People prefer to travel by air-conditioned coaches for safety, security and comfort; but now all their trust in the air-conditioned compartments of the railways seems misplaced.

As expected, the railway minister has announced compensation for the victims and also ordered an inquiry into the incident. Can this bring back the people who lost their lives in the fire? We all know the answer. In a few days, this accident will be forgotten until another one happens. Is there no respite from this?

Only a few days back, there was a fire accident in a Volvo bus (ironically, again, in Karnataka) in which a few people lost their lives. In both cases, the emergency exits were dysfunctional. Even in the Carlton Towers fire tragedy in Bengaluru, there was an issue with the emergency exit that could not be opened.

Fire safety has now acquired a notional hue with people not bothering to check the nitty-gritty—like functioning of emergency exits, conducting periodic mock drills, etc. The presence of fire safety systems is no guarantee for fire protection—these systems need to be functional.
G Venkatesh, Bengaluru, by email   

Stock Holding Corporation of India Ltd (SHCL) is among the largest depository participants (DPs) in India. This institution is promoted by the financial institutions including IFCI, IDBI, UTI, LIC, GIC, etc. As the promoters have a good track record in their respective field, people expect more and require excellent service from SHCL. But my experience is different.

I maintained demat accounts with one of SHCL’s branches in Chennai for more than four years in my name and in the name of my family members. Last year, I shifted the accounts to another DP for operational convenience. All my accounts had credit balance at the time of shifting to another DP.  

The amount which I was remitting to the account towards DP charges (apart from yearly/quarterly maintenance charges, every debit in the demat account attracts charges) was maintained separately by the DP. When, I sold some shares, debit was being made to the account towards the charges, based on the scrips sold. As I used to remit the amount for their debit towards charges, the account always had credit balance.

SHCL did not send its cheque towards the credit balance available in the accounts after transferring my stocks to another DP. I sent e-mails to them.  There was no response to my three e-mails sent to customercare@stockholding.com. As my e-mails did not get any response, I sent letters duly signed by me/family member stating non-receipt of credit balance available in the accounts. In respect of all the accounts, I was able to get their cheque after four months. I was surprised to note SHCL’s attitude. It is expected to make payment immediately after closure of the accounts. Had I not reminded SHCL, I would not have got back the amount. SHCL did not have the courtesy to respond to my mails. SHCL did not even regret the delay in making the payment.

What is the difference between this institution promoted by government-owned institutions and other privately-owned depositories? SHCL should set an example to others and respond to customers’ needs immediately. Otherwise, SHCL will lose its identity and brand image.  
RM Ramanathan, Chennai, by email

In the Cover Story of Moneylife on mediclaims (issue dated 23 January 2014) and in the Fine Print of the Insurance Trends column, there is a reference to “aggressive pricing for group insurance?” The CAG (Comptroller and Auditor General) has rightly pulled up public sector insurance companies for huge losses in group mediclaims where there is huge variation in the premium rates. There is more to this than it meets the eye.

It is an open secret that the premium rates charged to large corporates come down substantially depending upon the other general insurance business that the companies have with them. These other covers—like earthquake, fire, marine, strike, riots, civil commotion, etc—with relatively higher premium rates and lower claims heavily cross-subsidise the entire group health insurance where the claims:premium ratio far exceeds that of the individual covers.

The specially designed health packages for corporates cover a larger number of risks like pregnancies, dental and optical care that are specifically denied to the aam janata. Employees of the old MNC petroleum giants like ESSO, STANVAC, BURMAH SHELL and CALTEX, even after nationalisation, are still covered. The employees are covered even after retirement up to their death without having to pay any premium whatsoever after retirement.

The burgeoning group insurance claim losses are primarily on account of settling even the most frivolous of claims for fear of losing other business if they incur their displeasure. I can say this with confidence, after having worked in a large Tata group company, covered under group cover, and later as the CAG-appointed statutory auditor of New India and United India.

Insurance companies do not hesitate to hike the rates for senior citizens claiming that the numbers of their claims are high. It is to the contrary. An RTI (Right to Information) query showed that those lodging claims in the 35-45 years age brackets are the highest and these are essentially in the group covers; the lowest are claims are from the 60+ age group because the claims procedures are so tedious and the harassment from the TPAs (third-party administrators) so severe that  senior citizens prefer not to lodge claims but continue to remain insured from the safety point of view.

Now that the CAG has pulled up government insurers, it is time IRDA (Insurance Regulatory and Development Authority) revisits the entire issue of mediclaim premiums. As it is, the Bombay High Court has already admitted a PIL (public interest litigation) for hearing.
Nagesh Kini, Mumbai, by email

This is with regard to “Mediclaim Problems: 10 real-life cases from Moneylife Foundation's Insurance Helpline” by Raj Pradhan. Great work being done by Moneylife; please continue the good work, Raj Pradhan. Regarding Gujarat, I wish to inform you that a large private health insurer has come out with a ‘blacklist of hospitals and doctors’ (many in Surat). If a patient is admitted to these hospitals, or referred by these doctors, no claim is payable—cashless or reimbursement. Imagine, in case of an emergency, a customer has to first find out whether a hospital is on the ‘blacklist’ or not, and then get treated!
Deepak Khemani

This is with regard to “Aadhaar for LPG: Mess created by UIDAI, OMCs (oil marketing companies) and citizen victims” by Yogesh Sapkale. This is easily the most audacious disrespect of the Supreme Court. The order is simple and straightforward; yet, for reasons best known to them, the government derives sadistic pleasure in making things complicated for us citizens.
Kaviraj B Patil

This is with regard to “Making Banks Accountable to Retail Customers” by Sucheta Dalal. A well-researched analysis. The costing and pricing of products followed in the financial sector is no different from what the MNCs (multinational companies) follow for most products. The objective always is to profit from every transaction. What banks often forget is that their resources come from the clientele–the public they are expected to serve. When regulatory bodies are not able to work on the same wave-length, the situation is taken advantage of by vested interests.
MG Warrier

This is with regard to “Morgan Stanley: Quit India” by Sucheta Dalal. It is good that they have quit. Actually, they should have quit long back. No need to shed tears; they proved to be useless and took many investors for a royal ride with their first offering itself.
Anil Agashe

This is with regard to “Should non-KYC complied bank account holder be penalised?” by Vivek Sharma. Most of the readers of this article are urban-based and fairly high-income individuals. Let us not forget that there are crores of low-income rural and urban households who have been persuaded / pressured to open bank accounts either directly or through business correspondents. Most of them would be receiving some of the direct benefits like payment under NREGA through their bank accounts and draw the money soon after it is received, leaving a balance of just a few rupees. So, introducing a uniform procedure of slapping a charge of Rs112/- (I am also surprised at the logic of this amount as mentioned by Yerram Raju. May be converted two US dollars as bank officers are more keen to learn from their overseas experience than from rural segment) is inappropriate.
S Santhanam


Tackling False and Misleading Ads

Self-regulation by ASCI is any day better than an official regulator for advertisements

Self-regulation can work quite effectively to curb false and misleading advertisements, even when an impromptu committee of socially-conscious citizens is put together to decide complaints. Marketing and advertising expert Paritosh Joshi demonstrated this most effectively at a Moneylife Foundation seminar on how to hold irresponsible advertisers accountable. “The advertising code revolves around just four words—truthful, decent, safe and fair—to decide whether an advertisement is appropriate,” he instructed the committee drawn from the audience. Despite strong differences in sensitivity, perception and attitudes of the audience, decisions by this group mirrored the view of ASCI’s (Advertising Standards Council of India) official committee, in most cases.

This is significant because, every year, the ministry of consumer affairs (MCA) threatens to set up a government regulator to monitor advertising. Advertisers and agencies believe, with good reason, that bureaucratic, censor-board-like clearances will lead to delays and corruption. It was clear from the programme that an independent committee, using common sense, could be just as effective in holding advertisers accountable without any knowledge of the ASCI code. Remember, the withdrawal of an expensive advertising campaign, especially one that has celebrity endorsements, imposes a massive financial cost on the advertiser. A strong code is a good deterrent.

Unfortunately, consumer organisations and academics, often the beneficiaries of financial grants from the ministry, tend to back the MCA in asking for an advertising regulator. Do we need another censor board for advertising? The common-sense answer would be a resounding ‘No’. In the past couple of years, ASCI has, indeed, worked hard to increase its reach through suo moto action and an independent monitoring mechanism to catch false and irresponsible advertising with a special focus on education ads, dubious medicines and slimming products. But a lot more needs to be done.

ASCI still attracts criticism for dragging its feet on issues that affect its large advertisers. It also does not cover financial advertising, where misleading claims and calculations are subtler. Three specific areas that ASCI needs to address are:

•    Disclaimers continue to be unreadable. The text of these disclaimers must also be made available to complainants on request, at least by email. Similarly, complainants must be given access to research reports that form the basis of specific positive claims made in advertisements (15% whiter, 3.5x stronger, twice as soft, etc). This is important because, very often, the results have been found misleading or based on unreliable sources and unrecognised authorities. While these usually become the subject of intra-industry disputes, there is no reason to deny the information to complainants within a specific timeframe.

•    ASCI’s biggest weakness is its reluctance to act against repeat offenders or habitual offenders. These are usually large multinational companies who are hard-pressed to substantiate the claims of their fairness creams or promise of flawless complexions, anti-pimple remedies or even nutrition products aimed at children. Many believe that the companies have worked out a neat routine of carpet-bombing a new advertising campaign, knowing full well that it will lead to consumer complaints (at least from competitors) which will be upheld and force the withdrawal of the campaign in about six weeks. The next campaign, cynically, makes a new set of unsubstantiated claims that are again upheld. If ASCI fails to respond to demands to step up action against powerful repeat-offenders, it will continue to face the charge of being a weak regulator and the constant threat of the greater evil of a government regulator being set up.



Vinay Joshi

4 years ago

Hello Ms. Sucheta,

Very good you've come on this subject after a long time, possibly cause of CCPC!?

Way back to you a ASCI member i had written about Marico 'Parachute Hair Oil', cleared for excise duty as 'edible oil'.

I had straight stated that can ASCI members & Marico Board of Dirs will eat fries from so called Parachute Hair Oil? 'EDIBLE OIL'!?


Where is the Drugs & Cosmetics Act gone? WHY ASCI fails to resort to the stringent provisions to book the errant?

If celebrities endorsing products should be made liable to pay for the false claims then by logic ASCI members should also be made to pay for passing off falsification ads!

ASCI has ever taken any su-motu action?

Yes there has to be a 'CENSOR BOARD', for ads as they are BOMBARDMENT UNLEASHED to the gullible in all media segments.

Certain ads can be degrading or connoting different aspects, immoral, irresponsible & careless.

Cinema films is one's discretion!

Do not get to me the mandate of ASCI. IS ASCI fearing govt.reulator?

If so why? What ASCI will do when CCPC recommendations get into force? No doubt a far cry till next central govt sets in & if at all its pursued!?



Vinay Joshi

In Reply to Vinay Joshi 4 years ago


The just concluded 'super bowl', in US [Feb 2,] 30 secs add slot was US$4mn. Coca Cola ad had certain aspects, as of now not pulled up by any authority.


Letter from the Editor

Behavioural Analysis

Ihave heard heads of mutual funds say that proper investor education will ensure that people buy more mutual fund products. Quite possible; except that we don’t see mutual funds providing any meaningful investor education at all. Moneylife Foundation was set up to offer investor education in a consistent, meaningful and unbiased manner. Are our programmes, combined...

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