Several NGOs, activists and citizens were startled at the complete lack of clarity on the huge costs involved in complying with RBI's latest diktat on e-KYC. Also, lack of clarity on the issue of whether each biometric based transaction will involve a transaction cost to UIDAI - who pays this cost? Will it be distributed among all? These NGOs, activists and citizens have submitted a memorandum to RBI governor Dr Raghuram Rajan
The Reserve Bank of India (RBI) has come up with a circular on 2nd September 2013 stipulating all banks to implement biometric enabled or Aadhaar compliant ATM machines. Moneylife Foundation along with organisations like All India Bank Employees Association (AIBEA), All India Bank Depositors Association (AIBDA), Council for Fair Business Practices (CFBP), V CItizens Action Network (V CAN), Consumer Education and Research Centre, Ahmedabad (CERC), India Against Corruption (IAC), Forum for Fast Justice (FFJ), Forum of Free Enterprise (FEE), Nagrik Chetana Manch (NCM), All India Business Council (AIBC) and Women Graduates Union, Mumbai as well as activists and citizens signed a memorandum to the RBI on this issue.
In an interactive session of two and a half hours the representatives of the NGOs, activists and citizens brainstormed and finalised on a memorandum. The foremost issue discussed was the very fact that implementing Aadhaar contradicts the very objective with which it was introduced. It aimed to pioneer the financial inclusion but the entire system of transaction charges negate the objective. The whole process in expensive and results in deposits burdened with the charges.
NOTE: The Memorandum was signed by all the participants who were present. Others conveyed their support and logos by email.
Sucheta Dalal talked in detail about how the different multi-level marketing –MLM scams have siphoned off money from India and the helplessness of authorities, including police, to fight with those having political clout
Chain-money schemes like Saradha, QNet and Speak Asia are flourishing in our country. Countless money has been lost in this manner. Almost every other month we get to know of a big scam in one state or another, where thousands of crores have been collected from investors, who have been promised high returns, sometimes of more than 100%, in a relatively short period of time. Sucheta Dalal, managing editor, Moneylife magazine, said, “In 2010, for example, a pyramid scheme called City Limousine found investors from even within the RBI and Income Tax office. According to numbers in a Times of India story, 15 RBI officials, 200 I-T officers and no less than 6,000 police officers invested in this dubious scheme.” She was speaking at a seminar organised by Moneylife Foundation in Mumbai on Friday.
These kinds of reports are becoming more repetitive in recent days. Multilevel marketing (MLM) and chain money scams have rocked the entire country for a considerable time. Ms Dalal talked in detail about how the different multi-level marketing scams have siphoned off money from the country and the helplessness of the police to fight with those having political clout.
She started the seminar by differentiating between regulated and non -regulated investment schemes. Most of the MLMs, pyramid and Ponzi schemes are run under pretext of chit fund, which do not fall under the SEBI regulation. This keeps these dubious schemes run galore with an unbelievable number of clients resulting in eventual scams.
According to Ms Dalal, pyramid schemes are the most vicious of all the schemes. The saddest part is the fact that the ones sitting at the top end do not bear the brunt of the losses. It is the ones at the bottom half who suffer. She explained to the audience that multi level marketing works on two levels, one with products and the other without products. Companies like Rose Valley in West Bengal had come up with glitzy terms like Redeemable Reference Bonds, Secured Debentures to lure the customers into such schemes.
Ms Dalal says that the political connections of these dubious companies allow them to flourish. She said, “A lot of promises are made immediately after the scam is exposed, but nothing happens. At a previous seminar we’ve had officers from the Serious Fraud Investigation Office tell us that they would like to take action but the government opposes this. The only way to ensure you are safe is by focusing on what is being sold to you. Keep in mind that if something is too good to be true, it probably is.”
There are a number of variants of pyramid schemes, but Ms Dalal said that, in her opinion, the binary scheme is the most dangerous. She said, “Any scheme that requires you to draw in a couple of other people is always a scam. It doesn’t matter if there’s a product involved. The only reason there is a product involved is so that it doesn’t become a money circulation scheme.”
On the issue of steps taken by the government, she discussed at length the steps taken by various states to tackle the issue. She said, “In India there are loads of legislation but very few actions.” Direct selling companies like Amway, Tupperware attract the housewives first since they are the most gullible. In such cases, acts like Prize Chits and Money Circulation Acts(banning), 1978, Drug and Magic Remedies Act ,1954 are never properly implemented to protect the interest of the investors.
The seminar ended with a Q and A session where several investors shared their experiences, and came up with ideas to create a forum, which can redress the complaints of the investors, who were cheated.
Moneylife Foundation held an exclusive, in-depth session conducted by Raj Pradhan for the management students of Centre for Management, Bandra (Mumbai). Personal Accident, Life, Health, Car, Travel and Home insurance concepts were discussed in detail
Moneylife Foundation hosted an insurance session by Raj Pradhan for management students of Centre for management, Bandra (Mumbai). Mr Pradhan gave insights to an eager audience of B-school students on different types of insurance ranging from personal accident, life, health to car, travel and home insurance. Personal accident (PA) is a must-have for everyone. PA cover premium is inexpensive and remains unchanged, even though most products are offered only till 70 years. PA covers accidental death and disability.
Health insurance is skipped by students and young generation, but there is rise in lifestyle related diseases and even hospitalisation for gastric related issues. Even if students don’t buy health insurance, they should know the terms and conditions of the mediclaim policies of their parents. It is important not just to have right mediclaim, but also being able to get the claim paid by following the proper procedure and honouring the timelines given for hospitalisation intimation and claims filing. Critical illness can be thought as an add-on to your mediclaim. It will pay lump-sum irrespective of your expenses on medical condition. It is useful as many times after hospitalisation you may not be able to work for an extended period and mediclaim will not cover beyond hospitalisation expenses and few months of pre and post hospitalisation expenses.
It is imperative to get adequate life insurance for financial risk protection against death of a bread-winner in the family. There are different avenues to do it like Term Life, Endowment, Money-back, ULIP, Whole Life, etc. While a term plan is pure life insurance the others are insurance-cum-savings products. It is best not to mix insurance and investment needs. There is increasing awareness of online term plans and people are finding it to be attractively priced.
Buying life insurance policy in utmost good faith will ensure your family does not have to run from pillar to post to get the death claim paid. Every insurance company will repudiate fraudulent claim. Hiding a medical condition at the purchase of the product is as good as wasting the premium payment. Insurers know how to detect a fraud which can entail services of detective agencies.
Third party liability car insurance is mandatory, under tariff and inexpensive. It is important to ensure your car/two wheeler has this cover. Own Damage cover is optional, but gives comprehensive cover for your car. Shop for car insurance as premiums vary across insurance companies and even across channels like online, agents, car dealers, brokers, etc.
Overseas students and travellers should consider buying health insurance as medical treatment can be unaffordable abroad. Beware of fine-prints and check which hospitals offer cashless network. Paying upfront from own pocket can be expensive.