Companies & Sectors
Coal bed methane: Poorly tapped, wasted natural resource!

The oil ministry should return surrendered CBM blocks to the coal ministry so that it can allocate these to power generators as captive coal sources to meet their fuel needs. However, the coal ministry should lay strict time frames within which the allottees must start mining operations

Since 2007, Great Eastern Energy Corporation (GEECL) of New Delhi has been successful in producing coal bed methane (CBM) from south block, Raniganj, in West Bengal.


It is well known that CBM is found in all virgin coal beds but the process of tapping it is a technology that has been accomplished by a few international companies such as Dart Energy of Australia and Coal Gas Mart of the US. They are present in India, now.


ONGC, for instance, acquired four coal bed methane assets more than 10 years ago, and spent nearly Rs600 crore in exploration and development work, most of which was spent in the Jharia coal block, but with poor results!


However, three block assets in North Karanpura and Bokaro in Jharkhand and Raniganj in West Bengal have been estimated to hold one trillion cubic feet of methane gas each. But this needs to be extracted successfully.


What ONGC has planned, after its past experience, is to invite such stalwarts as Dart of Australia, offering them a 25% partnership in Jharkhand and a 10% in Raniganj.  Dart is already in India and is exploring CBM in two blocks.


Deep Industries of Ahmedabad, which is said to be in association with Coal Gas Mart of USA, has been offered a 10% stake by ONGC in Jharkhand. It is part of the consortium led by Jindal Petroleum, which believes that this asset in Jharkhand has good potential.


At the moment CBM production in India is only 0.15 mmscmd (million metric standard cubic metres per day), which is very negligible, but it is hoped to reach 7.4 mmscmd by 2013-14. It remains to be seen if the strategic partnerships offered to Dart and Deep bring the desired results for ONGC, so as to tap this natural resource that has been going waste in all the virgin coal mines.


In the meantime, several CBM blocks have been relinquished, due to inadequate gas reserves, but as coal can be mined in these blocks, the coal ministry has requested the ministry of petroleum and natural gas to return the same to them for this purpose.


According to the Director General of Hydrocarbons (DGH), for exploring coal bed methane, 33 contracts have been signed by the oil ministry through competitive bidding. Naturally, all these have abundant coal reserves and these are located in several states such as Andhra Pradesh, Arunachal Pradesh, Chhattisgarh, Gujarat, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and West Bengal. Out of these, commercial production is expected to start in Jharia in Jharkhand and Sohagpur in Madhya Pradesh.


Since the surrendered CBM blocks have rich coal reserves, the coal ministry feels that it would be better to allocate these to power generators as captive coal sources to meet their fuel needs.  Of course, it is presumed that as these blocks have all the required clearances, which they must have obtained before they began their methane gas exploration, it would be easier for them to commence mining operations in a reasonable short span of time.


 It is hoped that the oil ministry returns these blocks and the coal ministry can go ahead with its plans, in a transparent manner, but laying strict time frames within which the allottees must start the mining operations.


As for coal bed methane, the coal ministry would do well to locate other prospective partners abroad so that time is not wasted in these strategic thrust areas.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)


Gold sales by banks: High and inconsistent rates and different KYC rules

We noticed that there is no uniformity amongst banks when it comes to customer verification. This makes is easier to target some banks to launder money, and then sell the gold later to someone else

Yesterday, we had pointed out that banks, allowed by the Reserve Bank of India (RBI) to sell gold, is a bad deal for customers. Banks make it easy for customers to walk into a bank and buy gold with minimal or no documentation. We visited the website of some of the top banks—Axis Bank, ICICI Bank, Andhra Bank, HDFC Bank and State Bank of India—and found out that it is fairly easy for someone to launder money by buying gold coins from banks and selling them elsewhere. Not only did we find out this, but even the rates at which banks were offering were on the higher end. For instance, a 2gm of gold coin from Bank of Baroda costs Rs5,860 as of 30 May. The same thing from a jeweller costs Rs5,028.

Gold Rates

The following table shows the gold coin rates offered by various banks. As you can see that the denomination offered by the banks varies. Some banks offer 2 gm while some offer 100 gms. The rates also vary from bank to bank. For instance, Corporation Bank’s 100 gm gold coin costs Rs2,75,636 while Kotak Mahindra Bank is pricier by over Rs25,000! Similarly, for 2gm, the range is as much as Rs422 between the highest and lowest offers. State Bank of India and Bank of Baroda offer identical rates for 2gm. According to a jeweller source, as of 30 May, the price of 2gm of gold stood at Rs2,514 per gram. This is far more competitive than what the banks are offering.


KYC and Documentation

We visited the website of the following banks and obtained information on how easy it is to procure gold coins. The table below shows the restrictions and document required in order to buy gold coins.

For instance, you could walk into Andhra Bank and fork over cash to buy gold coins worth Rs20,000 without documentation. However, Axis Bank only offers gold to its customers. Anybody can walk into ICICI Bank and buy Rs50,000 worth of gold coins, but must require a cheque as the bank does not accept cash. Anything over Rs50,000, complete KYC is mandatory.

We also noticed that there is no uniformity amongst banks when it comes to customer verification. This makes is easier to target some banks to launder money, and then sell the gold later to someone else. RBI does not permit banks to buy back gold. Some banks use KYC while some accept PAN cards and that too at different values. For instance, Axis Bank requires just an identity proof for gold coins between Rs20,000 and Rs50,000 and a PAN card for over Rs50,000. But Andhra Bank requires complete KYC for gold coins over Rs50,000. Strangely, SBI does not require any proof for transactions less than Rs50,000.

Only ICICI Bank, amongst the five banks mentioned above, has mentioned on its website of the limit to the number of times one can buy gold coins. One can buy six times every four months and up to Rs1 lakh per transaction (for self) and Rs50,000 on behalf of others. Other banks it is not mentioned.

One thing common for most of these banks that an application form must be filled up while buying gold coins. Yet, this serves little purpose for those purchases that do not require documentation.



vinod kumar gupta

4 years ago

how many times u want to verify kyc. have u ever checked the driving license of the auto ,bus or train or plane in which u r travelling,
enough is enough u know this kyc has created so pathetic situation
two months ago i wanted to hire a dormatory as i was having luggage while travelling at tatanagar rly stn there u would only get the room when u produce zerox of ur ticket and photo id, think of the situation with luggage in both the hands i have to go 1km for photocopy as i knew the place and i reached in the evening when u reach at mid night what will happen . RBI makes idiotic rules and u idiots want to follow on each point.
take one more simple example do any one checks photo id which going to select bride or else or having talks
vk gupta


Dayananda Kamath k

In Reply to vinod kumar gupta 4 years ago

kyc is to harass a genuine person and provide an opportunity to fraudsters to do what they want by fake documents. the rules/laws are being made to punish the facilitator than actual commiter. prevention is worst than decease.

CERS exposes misleading T&D charges of Gujarat Urja Vikas

According to the consumer society, Gujarat Urja Vikas Nigam is charging more from consumers by showing additional T&D losses

Ahmedabad-based Consumer Education Research Society (CERS) said as per its study the state owned Gujarat Urja Vikas Nigam (GUVNL) has been charging more money from customers by showing higher losses in transmission and distribution (T&D). According to CERS, GUVNL is adopting faulty practices in considering high T&D losses for calculation of fuel price and power purchase agreement (FPPPA) charges.


CERS said its study shows the average T&D losses across the country are 26.4%, which cuts generation capacity by 28,000 million units (MUs). Using the Rajadhaksha Committee report, if the losses are reduced to 14%, then the losses can be brought down to 14,800 MUs. The saving of 13,200 MUs would generate additional revenues of Rs3,960 crore.


“The Gujarat situation is not different where T&D losses are 22.67%. Gujarat loses nearly 14,600 MUs every year, which compels GUVNL to purchase costly power from independent power producers. This puts heavy burden on consumers in Gujarat. If these losses are reduced to 14%, then GUVNL can save nearly 6,140 MUs, which will generate additional income of Rs1,854 crore. This in turn can help avoid increase in tariff at least for couple of years,” the CERS said in a release.


Gujarat Electricity Regulatory Commission (GERC) in its tariff orders on 2 April 2013 had praised electricity distribution companies (discoms) in the state for bringing down distribution losses below the target set by the Commission. However, CERS pointed out that how only Uttar Gujarat Vij Company (UGVCL) can bring down these losses by 4%-5% in just one year.


In its order, GERC has considered following distribution losses...

Uttar Gujarat Vij Company (UGVCL)             9.81 %

Dakshin Gujarat Vij Company (DGVCL)        10.24 %                       

Madhya Gujarat Vij Company (MGVCL)        12.18 %

Paschim Gujarat Vij Company (PGVCL)         27.87 %


Average                                                     15.03 %


Therefore, as per CERS the actual calculation for T&D losses should be

Transmission Losses of GETCO                      4.30%

Distribution losses of four DISCOM              15.03%


Actual T&D losses                                     19.33%


CERS said from the above it is proved that GUVNL is misleading the Commission and consumers from the state by showing high T&D losses.


T&D losses as per GUVNL for FPPPA              22.67 %                            

T&D losses as per GERC order & CERS         19.33 %


Difference in T&D losses                            3.34%


It said, the above calculations shows how GUVNL is collecting additional amount as FPPPA charges by showing 3.34% additional loss for T&D.


“It is shocking to know that how GERC can approve higher T&D losses for calculation of FPPPA charges by which GUVNL has collected Rs668 crore more every year from consumers of Gujarat. GERC should direct GUVNL to refund additional FPPPA charges collected, which may be more than Rs3,000 crore in last five years,” the CERS said.


In a letter to GERC, KK Bajaj, chief general manager of CERS and an expert in power sector has requested third party scrutiny to ascertain correct and actual T&D losses and impose penalty as per Section 142 of Electricity Act, 2003 for providing wrong and misleading details to GERC thereby illegally collecting more money from consumers of Gujarat.


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