Citizens' Issues
Corruption and money laundering

The existing systems in India have clearly not prevented black money and the proceeds of corruption from leaving the country. Hopefully the next generation revolutionaries can actually use technology to bring about the change we want to see

First the Gandhian, Anna Hazare and then the yoga guru turned social activist, Baba Ramdev; India has witnessed two major voices against corruption in the last year. While Anna and his team's movement primarily focused on bringing a strong Lokpal Bill, Baba Ramdev has been crusading to bring back the black money stashed away in Swiss banks, to India.
 

Corruption has assumed unprecedented proportions with the Coalgate allocation scam running into billions of dollars and everyone from the erstwhile Bhartiya Janata Party government (now the main opposition party), led by Atal Bihari Vajpayee to the current United Progressive Alliance (UPA) government, led by Dr Manmohan Singh, being under the scanner. The Indian parliament hardly worked in the monsoon session, with the ruling party and the opposition at loggerheads with each other.
 

A ray of hope, in the midst of the political circus, seems to be the Indian banking system that has been resilient in the past, conservative and cautious. The recent cases of laxity in vigilance and violation of regulations at the HSBC and the Standard Chartered Bank have resulted in trillions of illicit money gaining access to the US markets. This raises questions about the steps taken towards the prevention of money laundering by countries across the globe.
 

India became a full-fledged member of the Financial Action Task Force (FATF), an inter-governmental body which works towards combating money laundering and terrorist financing in the year 2010. Since then, India has been co-operating with the other member nations in sharing information regarding suspicious, money laundering and terrorist financing activities.
 

According to FATF, “corruption has the potential to bring catastrophic harm to economic development, the fight against organized crime, and respect for the law and effective governance”. Early this month, both NSE and BSE, the leading stock exchanges of the nation, urged investors to exercise caution in dealing with entities linked to Iran, following warnings from FATF.
 

The question is, being a member of FATF and at the same time struggling with corruption at home, is India doing enough to combat money laundering? A survey on Anti Money Laundering by KPMG in India (2012) revealed that about 11% of the respondents find that more than 25% of their SWIFT messages have incomplete originator information. The survey also finds that more that majority of respondents found the client screening, handling of filter hits and maintenance of sanction lists was either moderately challenging or challenging. And less than 50% use either internal or external sophisticated IT systems to identify potential money laundering cases.
 

In the US there exists a list of Specially Designated Nationals and a list of Countries identified which should be screened for identifying potential risky transactions, better known as OFAC (Office of the Foreign Asset Control) List. US people and companies are banned from dealing with entities in this list.
 

In India too, Financial Intelligence Unit - India (FIU-India) along with the Reserve Bank of India (RBI), has been working towards making the screening system more rigorous. If the processes are implemented in letter as well as spirit, financial companies like banks, NBFCs and insurance companies, which collectively control the flow of money in the economy, can directly hinder the plans of rogue elements by making their financial life miserable.
 

Also, there exists Know Your Customers (KYC) and Customer Due Diligence (CDD) guidelines in India, which can be easily flouted, due to the multiple ways in which one can fulfill these requirements. India still does not have a single identity for its citizens, on the lines of the US Social Security Number. Same person can have multiple address and identity proofs in the form of state-issued passport, driving license, ration card, or the most recent being the Aadhaar card.
 

Going by the KPMG report, while India is taking baby steps in the right direction, there are major milestones to be covered in terms of training, reporting and technology to be able to use some of the most sophisticated algorithms involving abnormality detection, predictive models and social network analysis. In fact, it is said that if Facebook was a country then it would be the 3rd biggest in the world. The combination of data from social networks and technology can help us create sophisticated bad behavior detection tools.
 

The recent technological advances have helped many institutions to harness the power of large datasets. The companies can process and collect data at close to real-time and with the help of certain algorithms, classify and detect malicious behavior instantly. This is like any other antivirus system found on computers, but different in terms of target units, i.e. money laundering and terrorist financing.
 

The existing systems in India have clearly not prevented black money and the proceeds of corruption from leaving the country. Hopefully the next generation revolutionaries can actually use technology to bring about the change we want to see instead of relying on the old fashioned political rhetoric. Next time when someone says “Hum bahar ka paisa vapas layenge” (Read: Baba Ramdev claiming to bring back the black money stashed in Swiss banks) then we must ask “What’s your analytics quotient?”

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COMMENTS

SuchindranathAiyerS

4 years ago

Dear me, whatever will that apostle of collective Alzheimer's and beacon of the Indian National Congress, the Home Minster, ShindeG have to say about this?

Vaibhav Dhoka

4 years ago

After every SCAM at centre the stock market rebounces meaning the scam money re-enters through havala route and petty investors who donot have any idea invests in penny stock and is ultimate looser and the gainers are SCAMSTERS.

REPLY

MOHAN

In Reply to Vaibhav Dhoka 4 years ago

From Policy "Paralysis" to a sudden Policy "Delirium" indicates that the "Con-Gandhian" politicians want to make some quick bucks from the stock market. Media people before eulogising the "Indian Caesar's wife" must see through the game and understand the actual intention behind the sudden announcements of economic reforms!

M G WARRIER

4 years ago

It is not the absence of law, technology or people with the knohow to handle the so called black money that is lacking. It is the political will, that is lacking. 95 per cent of Indians are not aware of the magnitude of the problem of heaps of money (who will tell you which is black and which is white in the heaps on which 'clean' people are sitting?)getting accumulated.

Medical prescriptions: Money spinners or drainers?

The government needs to direct the medical profession to prescribe generic drugs, which are available at almost half the cost of branded products. This will surely help in bringing healthcare costs for the aam aadmi
 
On 20th September, the Group of Ministers, led by Sharad Pawar, Union agricultural minister, will take a call on the need to bring in some 350 essential medicines under price control. At the moment, there are 74 drugs under the Drug Price Control Order (DPCO), which was promulgated in 1995.
 
The National Pharmaceutical Policy, drafted last year, has been kept in abeyance due to the methodology proposed to be followed in fixing the ceiling prices, because of difference of opinions.
 
In the meantime, the Supreme Court has asked the government to come up with a decision on drug pricing within two weeks, failing which, it will pass an interim order.
 
Now, let's take a look at couple of case studies relating to the subject.
 
In the first case, the high blood pressure patient has been using, under expert medical advice, both Tenormin and Plendl, for more than 15 years, which has enabled him to keep his BP under control. While Tenormin is available, a few months ago, Plendl, manufactured by AstraZeneca went off the market, first with 2.5 mg tablets and soon followed by 5 mg. Now the stockists/drug stores do not get any supplies and distributors do not have any answer. No announcements were made in the media as why these are no longer in the market. Why they were withdrawn or production stopped, for that matter, is also not known.
 
When the regular customers sought assistance from drug stores, they were politely suggested to contact their personal doctor for advice.
 
This was followed by a visit to the specialist and after the patient got a generic equivalent, used it for a brief trial period, maintained the records for body reactions, the doctor advised continuation of the new prescription, as this was compatible.  The cost of medicine worked out cheaper too.
 
In the case of the second patient, who is under medication for diabetes, he was prescribed Amaryl P, manufactured by Aventis Pharma, which he found to be effective and useful, but extremely expensive, as it was literally beyond his monetary means, being a junior level employee, earning a meagre salary.
 
While exchanging views on the high cost of medication these days, this issue was brought up, as Karnataka state health minister, SA Ramdas (no relative to the writer), had gone around propagating the need to open up generic drug stores, offering medications at comparatively low costs, upsetting the drug stores who were selling products made by leading branded pharmaceutical companies. Thus there has been opposition to the opening of generic drug stores by obvious vested interests, but minister SA Ramdas seems to be bent upon supporting this programme to alleviate the grievances of the common man.
 
Now the issue on hand is what should the government do? We all know that India is a leading exporter of various drug formulations and pharmaceutical exports are playing a vital role in the development of the industry. They are able to supply a great number of medicines at relatively low prices to meet the needs of the “aam aadmi”. And why not?
 
If and when the group of Ministers take a call on the issue of bringing the essential medicines under the Price Control Order, they would do well to consider a rider, and that of directing the medical profession to prescribe medication needs with generic names.
 
Also, it is in the interest of the patient to seek advice of his/her personal (family) physician for the generic names (if not voluntarily given), and or to consult the friendly drug store pharmacist to look up the (yellow) book to find the best available cheaper alternative. Of course, there is the urgent need to get the doctor’s approval for use. We should also remember that self-medication is dangerous. Period.
 
 Without doubt, generic medicines are cheaper, as much as 50% than the branded products, but one needs to get the approval of the doctor before even using them; chances are that the doctor him/herself will prescribe the use, on a trial basis, and strictly maintaining the records for detailed examination before deciding to advice on usage, dosage, etc.
 
In a country like India, where medical insurance is in its infancy, the patient, you and me, need to consult the family physician before taking any steps that may be detrimental to our health! After all, there is no harm in asking for the generic name from the family physician.
 
It will save us our health and wealth!

(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. He can be contacted at [email protected].)

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COMMENTS

Bhagavan ps

3 years ago

There are no two standards for manufacturing brand and gneric drugs.

Both are of ditto quality in lab tests and bio-equivalence and therapeutic efficacy.

I have proved this point in my comment under another blog in moneylife itself.

There are hardly not more than 10% of Indian population who are depending on private medical practice where brnd are being patronized for obvious reasons and almost 90% of the population are happy and getting the relif with the Generic drugs.

The people should decide to com out of the clutches of the unethical doctors who insist on brnd drugs even whn generics are available.

Our Drugs and Phrmcy law specifies that only qualifid Pharmacist should diepense or supervise diespensing of drugs.

But the so called Pharmacist doesn't identify himself at the chemist shop nor displays his certificate.

The regulatory officer hardly notifies such establishments.

Hats off to Maharashtra F&D Commissioner who has been strictly implmenting the laws.

But, public can definitely insist on the service of the Pharmacist if they mind, to have better professional service.

A pharmacist can definitely help th piblic to chose a generic drug when a brand is prescribed to economize the treatment.

Its not difficult at all to know the genric name of the brand name.

One can read the generic name of the brand beneath the brand name on the label to confirm.

But this can happen only when the buyer expresses his preference to go in for generics and pharmacist cannot advise on his own to the buyer.

Just as on ask whethr so and so doctor is available at th clinic, ask whether the pharmacist is available, look or insist for his identity card and avail his service.

Meenal Mamdani

4 years ago

A very good article with sound advice.
There are many causes for this bad practice. Doctors forget their pharmacology teaching and get into the habit of writing the simple trade names rather than the complex, longer, pharmacological names.
Pharmacists can and should encourage patients to opt for the cheaper generics but there too it is not easy. Many so called pharmacists are themselves ignorant of pharmacologic names and therefore unable to give alternatives. Also, if the manufacturer is not well known, pharmacists are concerned about adulteration of the drug. Finally the pharmacist may get more kick back from one manufacturer versus another and that may influence his recommendation.
The best option is to educate the public and encourage them to ask the right questions.

Dr Anantha K Ramdas

4 years ago

As a patient, it is in your interest to ask the doctor to prescribe generic medicine. Consult him if it is ok to buy the generic medicine, in small dosage, to use, keep record of body reactions and then seek his advice if you should continue.

Also, chances are your own drug store pharmacist will be able to confirm that the generic medicine has been used by others, but he would still ask you to get it reconfirmed by your own family physician. Remember, a pharmacist may not necessarily be a doctor.

The generic medicine would be cheaper too.

Vikas Gupta

4 years ago

I totally agree with the author that Doctor must prescribe only Generic Medicines but it should be backed by Law. Its not easy to get it implemented as the Corrupt people Nexus is very powerful in India & they would not allow to form a law in this context.

REPLY

Om Prakash

In Reply to Vikas Gupta 4 years ago

This is to suggest a viable mechanism to help AAM AADMI. Like we have STATUTARY WARNING on Cigarette & Gutkha, Govt can impose a MANDATORY REQUIREMNT for ALL BRANDED DRUG MANUFACTURERS to print IN HIGH - LIGHTED MANNER - PATIENT CAN USE ANY MAKE XXXXXX SALT. The XXXXXX should stand for the Generic Name of the medicine which if the Patient wants can buy (with consent of his doctor)

Om Prakash

Which of these gifts are from Rashtrapati Bhavan?

Pratibha Patil has taken 155 artifacts/mementos from Rashtrapati Bhavan for display in the museum that is being specially set up in Ms Patil’s hometown in Amravati by the family trust, Vidya Bharti Shaikshnik Mandal, run by her politician-son Rajendra Shekhawat. Here are some pictures from the museum











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COMMENTS

Black Mamba

4 years ago

Trivialisation of presidency
By S Gurumurthy
07th June 2012 12:13 AM

http://newindianexpress.com/opinion/arti...

But with the election of Mrs Pratibha Devi Sigh Patil as President in 2007, the dignity of the highest constitutional office has been discounted to a new low. On what basis was she chosen for the high office? That best kept secret became public through an inadvertent disclosure by a Rajasthan Minister. He told the Congress workers that Pratibha Patil, who was the governor of Rajasthan, was made the President for her loyalty to Indira Gandhi family and “she used to make tea, cook food, and clean utensils” for the Gandhi family. He also told the congress workers that 'he was only giving an example of what being loyal and dedicated to the family could bring'. The poor man lost his job for saying this truth in public. Much earlier Pratibha Patil, on her election, first expressed her gratefulness to Sonia! Yet, the excuse for her choice was that she would be the first woman to become the President. Was there no better women? There were. But they didn't cook for the Gandhis. So in 2007 to mean that the Rashtrapathi Bhavan became extension of the Gandhi kitchen. The office of the President stands irretrievably demeaned now.

Black Mamba

4 years ago

What an embarrassment for her. Now she has to return the gifts. http://www.hindustantimes.com/India-news...

REPLY

MDT

In Reply to Black Mamba 4 years ago

Dear Black Mamba,
Thanks for your comment. I think you missed similar news published by Moneylife few days ago. Vinita Deshmukh, our Consulting Editor, has filed an RTI and based on the response wrote a story http://www.moneylife.in/article/pratibha... and http://www.moneylife.in/article/is-the-p...
We also received an email from Subash Chandra Agrawal (like HT and other media), but since the story was already published by Ms Deshmukh, we decided not to write another story on same issue.

SuchindranathAiyerS

4 years ago

Par for the course. Soon, as the Home MinisterG opines, no scam will matter and all will be forgotten.

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