EPFO has kept in abeyance, its circular that seeks to tighten norms for initiation of inquiry against employers in PF cases and clubbing of allowances with basic wages for computing PF contribution
New Delhi: Amid pressure from trade unions, Employees' Provident Fund Organisation (EPFO) has kept in abeyance, its circular that seeks to tighten norms for initiation of inquiry against employers in provident fund (PF) cases and clubbing of allowances with basic wages for computing PF contribution, reports PTI.
"It has been decided to keep the circular in abeyance with immediate effect and till further orders," another EPFO circular to field staff said.
After the controversial circular was issued by the EPFO on 30th November, trade unions had lodged their protest with Labour Ministry, terming it anti-worker.
According to the circular, the inquiry against employers can only be initiated after "actionable and verifiable information" is placed for consideration before the compliance officers.
With regard to the time period for initiating inquiry, it had said, "No inquiry or investigation shall ordinarily go beyond seven years, i.e., it shall cover the period of default not exceeding preceding seven years."
However, in a worker friendly move, the circular also redefined the meaning of "basic wages" for the purpose of provident fund deductions. It said: "All such allowances which are ordinarily, necessarily and uniformly paid to the employees are to be treated as the basic wages."
The employers are also not happy with the EPFO's move to deal with splitting of remuneration by companies which help them to reduce their PF contribution obligation substantially.
During 2011, the CVC received 8,805 complaints of alleged corruption against rail employees followed by 8,430 against bank employees and 5,026 against I-T officials
New Delhi: Railways topped the list of government organisations in 2011 against whom a maximum number of complaints of corruption--nearly 9,000--were received by the Central Vigilance Commission (CVC), reports PTI.
As many as 8,805 complaints of alleged corruption were received against Railways employees followed by 8,430 against bank employees and 5,026 against Income Tax officials, the CVC said in its annual report.
A total of 4,783 complaints were received against personnel in the Government of National Capital Territory of Delhi and 3,921 against employees working under Urban Development Ministry during 2011.
Besides, the CVC has got 2,960 complaints of corruption against employees working under Information and Broadcasting ministry, 1,918 against Department of Telecommunications, 1,877 against Petroleum Ministry officials, 1,544 against Food and Consumer Affairs department and 1,296 against Custom and Excise department among others, the report said.
The CVC, in its report tabled in Parliament recently, also noted delays and deficiencies while processing corruption-related cases by certain government departments involving senior functionaries.
"Delay in processing vigilance cases continues to be a major issue. Delays take place in processing the complaints or cases and also in taking decisions by the competent authorities who, in all cases, are senior level functionaries in the organisations," the report said.
"The Commission has been making constant efforts to sensitise all concerned about the importance of timely and efficient handling of vigilance related matters. However, it has been observed that the organisations continue to be indifferent and apathetic," the report said.
However, the CVC annual report for 2011 did not have any mention of probe related to alleged corruption in Commonwealth Games-related projects.
The probity watchdog also noted that the investigation report in respect of 1,406 complaints forwarded to the Chief Vigilance Officers of the departments concerned, who act as an extended arm of the CVC, were pending with them.
A highest of 182 complaints were pending for investigation and a report with Delhi Government, 156 with Municipal Corporation of Delhi, 49 with Delhi Development Authority, 48 each with Ministry of Defence and Bharat Sanchar Nigam Ltd, and 42 with Department of Secondary and Higher Education among others, it said.
The Commission has received a total of 51,367 complaints of alleged corruption against government officials working in various departments between January and December last year. Of these, 34,380 were disposed and 16,987 were pending with the departments.
According to sources, the credit bureau has almost run through the Rs43 crore it has raised and is about to cease operations in a couple of months, unless it finds a new investor
High Mark Credit Information Services, one of the four credit information companies (CICs) in India, licensed by the Reserve Bank of India (RBI) is under a severe financial stress, following the exit of several of its top managers and the failure of its rights issue last year. Its promoter Anil Pandya, who lives in the US, is now trying to rope in a foreign rating agency to put additional capital. According to sources, the company has almost run through the Rs43 crore, it raised, and is about to cease operations in couple of months, unless it finds a new investor. As per a rights issue memorandum of SBI Capital Markets dated 11 November 2011, High Mark needed Rs70 crore to until it becomes cash flow positive sometime in 2016. The rights issue failed.
Prof Anil Pandya, chairman and founder director of High Mark, said, “High mark is raising funds to maintain its momentum in the market. As of date it has become the second credit information company, with 550 members in a short span of 20 some months.”
Inability to raise funds and deploy them to the satisfaction of its clients has meant that SKS Microfinance has suspended its relationship with High Mark. This may mean Rs4 crore annual revenue loss immediately. Prof Pandya, however, denied any such thing. In an email, he said, “SKS is a major business partner of High Mark and continues to do so”.
The other three CICs—Credit Information Bureau (India) Ltd (CIBIL), Experian Credit Information Company of India Pvt Ltd and Equifax Credit Information Services Pvt Ltd (ECIS)—have major banks and non-banking financial companies (NBFCs) as stakeholders too. Leading global credit bureaus with a long track record outside India have controlling stake in all these three credit bureaus.
High Mark received a licence from the RBI in November 2010. High Mark has invested heavily over the past four years in creating competencies' and technologies. The credit bureau has spent around Rs19 crore in building its IT infrastructure and support systems.
The Indian government on 8 September 2009 approved High Mark's proposal for foreign direct investment (FDI) of $4.74 million. At present, FDI in credit bureau is capped at 49% and any transfer of more than 5% of shares requires approval from the RBI. Similarly, institutional investment in a credit bureau is capped at 10%.
State Bank of India (SBI), Punjab National Bank (PNB), Small Industries Development Bank of India (SIDBI), Edelweiss Capital, Citicorp Finance (India), CBC Companies (US) and CRIF S.p.A (Italy), all have 9.09% stake each in High Mark.
However, in the absence of any strategic investor acting as the promoter, High Mark is forced to look for funding from outside investors. While admitting that the credit bureau is looking to raise funding from domestic and foreign investors, Prof Pandya said, “Only CIBIL has funds. The other two (Experian India and ECIS) are also in the market raising funds. Deep pockets and ample sources of funding do not help because of the regulatory constraints on capital structure of CICs.”
High Mark’s existing investors refused to participate in the rights issue. Sources say that some of these investors are miffed at the changes at the top, such as Sidhharth Das who was the chief operating officer and Kiran Moras who was the architect of the system. They apparently had major differences with Prof Pandya.
A big bone of contention is the generous salary, bonus, perks and stock options that the board has given to Prof Pandya when he has had little operating role. Apart from a salary package of Rs60 lakh a year in 2011, he also got Rs4.27 crore as lump-sum compensation for past services including obtaining license from the RBI. During FY10, he was paid Rs1.25 crore for services rendered towards procuring the RBI license. Vepa Kamesam, a former deputy governor of the RBI is one of the independent directors on the High Mark board.
The other three RBI approved credit bureaus, CIBIL, Experian India and ECIS have received funding of around Rs50 to Rs75 crore and have access to additional funds through promoter or parent company which are large organisations specialising in credit information business mainly in the US and UK.