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HPCL to pay Rs50,000 for explosion due to gas leakage

The South West District Consumer Disputes Redressal Forum directed HPCL and its distributor to jointly and severally pay Rs50,000 as compensation to Delhi resident Dinesh Kumar

State-owned refining and marketing major Hindustan Petroleum Corporation (HPCL) and one of its distributors have been directed to pay Rs50,000 as compensation to a customer for damage caused to his home due to an explosion triggered by LPG leakage.

 

The South West District Consumer Disputes Redressal Forum held the state-run enterprise and its distributor jointly or severally liable to pay the amount to the complainant for the financial loss and harassment suffered by him.

 

“We are of the opinion that the explosion took place due to gas leakage, that leaked due to the defective pipe and regulator. We hold the opposite parties (HPCL and its distributor) responsible for deficiency in service on their part which caused financial loss and harassment to complainant for which he is entitled to be reasonably compensated,” a bench presided by Narendra Kumar said.

 

The forum directed HPCL and its distributor to jointly and severally pay Rs50,000 as compensation to Delhi resident Dinesh Kumar.

 

In his complaint, Dinesh had alleged that on 15 June 2004 there was gas leakage from the LPG cylinder he had bought from HPCL and on informing the distributor it had sent one of its employees to rectify the leak.

 

The distributor’s employee instead of replacing the old gas pipe, from which gas was leaking, had cut out its torn ends and attached it again to the cylinder, he had alleged.

 

Three days after the repair, gas had again leaked out at night and there was an explosion in the kitchen, he had said.

 

In its defence, HPCL and its distributor had denied the allegations and had contended the gas leakage was due to lapse on the part of consumer.

 

The forum rejected their contentions, saying “there is sufficient evidence to prove that the cause of leakage of the gas was due to old and outdated pipe and also defective regulator” which were supplied by HPCL to its distributor who passed it on to the customers.

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COMMENTS

Param

4 years ago

50k for an explosion seems too low, i wonder if it even covers the property loss & any medical consequences...

Manmohan Singh government’s inefficiency forces RBI's hand

India's growth is already very weak and tighter domestic liquidity will worsen financial conditions for corporates and banks, hurting asset quality and the growth outlook. But the RBI had no choice

Reversing its explicit easing stance over the past 12 months, the Reserve Bank of India (RBI) tightened domestic liquidity to arrest the rupee depreciation. The RBI has announced that it will limit from Wednesday the amount of liquidity available at the repo rate (liquidity adjustment facility or LAF) limited to Rs75,000 crore from the current limit of Rs90,000 crore. The central bank has also raised the rates at which additional liquidity (beyond the LAF) will be provided. This marginal standing facility-MSF and bank rates are raised to 300 basis points (bps) from 100 bps above the repo rate (to 10.25% from 8.25%). Further, the RBI said it will also conduct open market sales (OMS) of government securities worth Rs12,000 crore on 18th July which will further drain liquidity from the system.
 


This followed high-level meetings between prime minister Dr Manmohan Singh, an internationally acclaimed economist, and finance minister P Chidambaram with RBI governor. RBI’s hand was forced by poor economic efficiency under the Dr Singh when exports are weak, foreign investment has slowed down and India is solely dependent on capital inflows for equity and debt. These strong measures were probably necessary because the RBI saw no immediate solution to India's fundamental problems of a wide current account deficit and funding this deficit in an uncertain global economy. This is further aggravated by the populist announcements by the United Progressive Alliance (UPA) government, like the Food Security Bill.

 

According to economists, this (RBI’s) move would affect corporates and banks, especially private banks and non-banking finance companies (NBFCs) that are mostly dependent on short-term wholesale funding.

 

According to Nomura, India's growth is already very weak and tighter domestic liquidity will worsen the financial conditions for corporates and banks, hurting asset quality and the growth outlook. As such, while the RBI may be successful in stemming debt outflows, growth-sensitive equity flows are now also at risk of a reversal, it added.

 

“We expect these to result in higher money market rates or short-end wholesale rates. Depending on demand-supply conditions the overnight interbank or call money rate could move up to as much as 300 bps above the policy rate. In terms of direct impact, it hurts banks that rely on these markets like Yes Bank and IndusInd Bank and NBFCs. If these rates were to impact GDP growth even further then they would hurt the entire sector as asset quality would come under further pressure,” said Barclays Research in a note.

 

According to Nomura, financial stability concerns are pre-dominant in the RBI’s mind as the rupee has weakened substantially due to portfolio debt outflows. It said, “The measures announced (by RBI) are a classic textbook response to a weakening currency: tighten liquidity and raise rates. They will tighten domestic liquidity, raise short-term interest rates, increase the relative interest rate differential and possibly stem debt outflows.”

 

“However,” Nomura said, “Whether the measures will have a sustainable impact remains to be seen. As we have argued before, we see a gradual rupee depreciation and a tight fiscal policy as a solution to India's macro-economic problem, and not higher interest rates. There is a risk that today's measures could backfire.”

 

Barclays says the move (by RBI) would impact banks and NBFCs in two ways, one directly through net interest margins (NIMs) and two, indirectly through the impact of GDP growth. “In terms of direct impact we believe entities that are most reliant on short-term wholesale funding will be adversely impacted. Yes Bank and IndusInd Bank have significant reliance on these markets. NBFCs should also be negatively impacted. PSU banks, particularly State Bank of India (SBI) have little or no reliance on short-term wholesale funding. PSU banks, in general, based on guidance from the finance ministry, have been reducing their reliance on wholesale funding,” it said.

 

If the higher rates were to persist depending on how long RBI adopts this stance and impact GDP growth, then that would affect the entire banking system negatively, Barclays added.

 

Dr Tirthankar Patnaik, India strategist and chief economist at Religare Capital Markets, said, “Hardening of short-term rates is an overall macro-negative on working capital funding, given the benchmarked loans, especially on small and medium enterprises. From a funding perspective we would turn incrementally negative on banks and NBFCs with access to wholesale funding like Canara Bank, OBC among PSUs, Yes Bank, and IndusInd Bank among privates, and most NBFCs.”

 

The context and the responses from RBI are similar to 1997–98, when the rupee depreciated sharply following the East Asian crisis—an external-event shock. The outlook for capital inflows was bleak because of several domestic and external factors, and the RBI took certain extremely strong measures to tighten liquidity and increase policy rates by 200 bps in January 1998. Overnight rates shot up to 65%, making it prohibitively costly to hoard US dollars. Although this time, the RBI has refrained from using the cash reserve ratio (CRR), its overall approach to tightening liquidity to stem currency depreciation broadly follows the 1997-98 episode.

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COMMENTS

Santosh Kanekar

4 years ago

What is the impact of this on Debt Funds?

SuchindranathAiyerS

4 years ago

Following a Hicksian construct from the current level of deficit finance, the monetary policy must hover in a space between a Bank Rate of 15% and a rupee value of Rs 100 to a Dollar. It is too late to make amends for nine years of galloping insouciance profligacy and corruption i.e. inflation. Except, perhaps, by cutting Govt and Public Sector Pay Roll by 50 to 60%

SuchindranathAiyerS

4 years ago

Everything in India has to dance to the writ of an insouciant political and bureaucratic class accustomed to enjoying other people's money with impunity since 65 years.

REPLY

ashwin bahl

In Reply to SuchindranathAiyerS 4 years ago

Spot on bro!

ashwin bahl

4 years ago

Very much doubt all these belated measures can control the depreciation of the Rupee !

MOHAN

4 years ago

Manmohan Singh's famous quote:

"My top most priority is to deal with India's massive social and economic problems, so that chronic poverty, ignorance and disease can be conquered in a reasonably short period of time".



S V TANEJA

4 years ago

The UPA's economic policy has been a failure. The Rupee has been going down which has brought with it the inflation etc. The Govt's spending has also been one of the reasons for the rupee's fall. Still there is time to check the outflow of foreign currency be it visits/travels abroad, imports and steps to boast the exports. But with the elections getting closer and closer, it appears govt is in no mood to check its spending. It is generally heard people saying that the prices of consumables have shot up during the tenure of the UPA govt.

Nilesh KAMERKAR

4 years ago

Khush rahana desh ke pyaaron . . .
ab hum toh ‘SUFFER’ karte hain.

nagesh kini

4 years ago

Our conditions are going from bad to worse.
Enough is enough.
As Cromwell said in 1653 we need to tell the PM -
"In the name of God, Go."

Ravindra

4 years ago

The real thing required is Growth and with every kind of obstruction starting from land, forest clearance, environmentalists et al I frankly do not see much future. Five years back I was an optimist and had seen India on a similar growth path like China. No more.

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