Consumer Issues
Fair & Stable Financial Services

We have a long way to go before financial consumers feel safe

Consumers International (CI), a global network of 240 consumer organisations, has decided on four key areas of financial consumer protection (FCP) that will be the focus of its consumer advocacy in the coming year. CI will campaign to place FCP on the agenda of the G20 nations, and also work at influencing recommendations of Financial Stability Board (FSB) and OECD. These four areas are: action to prevent abusive financial products and practices; promotion of competition in financial services; measures to tackle consumer debt and consumer access to basic products.

Where does India figure in all this? And what is the attitude of our regulators to the concerns of global consumers of financial products? Probably, for the first time ever in the 25 years since SEBI came into existence, the Sensex is scaling new, all-time highs but the majority of Indians are completely uninterested.

The same is true of insurance where, too, the regulator does not seem to understand that keeping the faith of consumers must be a priority. As far as the Reserve Bank of India (RBI) is concerned, there is now an inclination to work at a comprehensive consumer protection framework, but RBI still has no formal engagement with consumers. The top brass at the banking regulator believes that the many complaints it receives everyday gives it a fair idea of consumer grievances. We beg to differ.

Most consumers articulate their issues poorly and are unable to place them appropriately in the context of a regulatory or consumer protection framework. That is why an NGO like Disha Financial Counselling is required to guide people correctly. More important, the availability and willingness of banks to provide basic banking services, which the RBI governor mentioned recently, will be the key to financial inclusion in India, along with a focus on ensuring safer mobile payments, which is also a global concern. (Moneylife Foundation, of which this writer is a founder trustee, is a supporter-member of CI.)




3 years ago

The more and complex the number of rules to safe guard the interest of investors the bigger is the mechanism required to implement those rules. In reality complexity helps unscrupulous elements thrive.

Keeping it Simple is the Key. What better way to keep it simple than to design the incentive system(for an advisor) in such a manner that better performance of clients’ portfolio automatically gives better incentive to the advisor as well?

If upfront commissions are banned Trail becomes the only mode of remuneration for distributors there by opens up an opportunity for quality to thrive and in bringing back the trust of investors.

Do we need so many regulations and rules if “only trail” is adopted by all the fund houses in Mutual Funds? If the same principle is applied across the financial products wouldn't financial services be a more respectable industry?



In Reply to CHILUKURI K R L RAO 3 years ago

MF industry has been losing about 15000 folios per day. Now it is difficult to reverse the situation by tinkering with a few basis points here and there.

No need to panic but let's prepare for the Monsoon!

Water security is as important as food security, and there is a dire need to stop millions of cusecs of water being discharged by Indian rivers into the sea

About two-thirds of Indian farmlands depends upon rainfall and a good monsoon is crucial for our agricultural output. Last year's record high output of 263 million tonnes and the overflowing stocks of essential grains, covering our buffer norms and strategic reserves, do give us a sigh of relief, should the monsoon really fail and leads to a drought condition.

According to forecasts issued by Asia Pacific Climate Centre in Busan, South Korea, El Nino is seen choking moisture feed into Bay of Bengal and Arabian sea that may deny rains in India. The first phase, during May to July, may leave Central India, West India and west coast in deficit but excess rain may fall in Rajasthan and parts of south-west Punjab!

In the second phase, covering August to October, excess rain in parts of Madhya Pradesh Maharashta and Seemandhra may occur. Tamil Nadu, parts of Rajastan, Punjab, Jammu and Kashmir, Himachal Pradesh and Uttarkhand may get adequate rains but Gujarat, South west Rajasthan and rest of India may find a dry spell. All these are current predictions; a wind or two may change the directions, which is why not only  Indian Meteorological Department (IMD) but other weather forecasting centres are closely watching the El Nino movements. At least one agency has cautioned that July could be a troublesome month to pass over.

To be prepared for a bad monsoon (or an insufficient one, at that) is of paramount importance. In case of paddy, both Food Corporation of India (FCI) and state agencies have so far procured 27.29 million tonnes against their target of 34.5 million tonnes during the current season, ending in June. Kharif procurement is already over and currently it is rabi season and they may end up getting 30-32 million tonnes. Procurement has been slow, according to the market, due to sluggish conditions and poor arrivals of paddy.

We may also remember that rice producing states like Andhra Pradesh and Odisha were subject to cyclones (Phalin!) and excess rainfalls. Fortunately, rice stocks in central pool is stated to be 20.27 million tonnes, almost 70% higher than the buffer norm and strategic reserve of 14.2 million tonnes, as on 1st April. Yet, rice stocks are said to be lowest in six years, since 2009.

When the new government takes over power, it is hoped that they do not inherit a bad monsoon resulting in a drought. Moneylife had recently covered (El Nino effect may cause trouble for Indian Monsoon) the El Nino conditions recently and cautioned the need to take precautionary steps to safeguard the stock holdings in various godowns of the FCI and other agencies, in terms of proper storage, rodent attacks and pilferage. They need to be shifted to closed godowns where heavy rains do occur so as to prevent damage.

In order to maintain our international image it is imperative that all export commitments of rice, wheat, soya, maize etc need to be honoured; recently procured order for shipment of one million tonnes of wheat should also be shipped in time.

Among the priorities that the new government need to plan seriously are, a national mandate for harvesting of rain water throughout the country. A few years ago, Tamil Nadu government set a classic example of this rain water harvesting for all the new buildings to be constructed, and those (old ones) were given a time frame within which to comply with this order.

The second more important project should be for the new government to revive the century old engineering masterpiece suggested by Late Viswesvaraya of Karnataka (erstwhile Mysore State) that proposed inter-linking of all the Indian rivers to ensure perennial supply of water throughout the country. This document is collecting dust in our national archives and it is time it is put into practice, as a separate seven year plan, to complete, and to run parallel with our standard five year plans. Water security is as important as food security, and we should stop millions of cusecs of water being discharged by Indian rivers into the sea.

There is no need to panic but it is better to take all precautionary steps to prevent any drought conditions.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also 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.)




3 years ago

Interconnection of rivers is the most important project for this since it will substantially cut down wastage of precious water. It will also provide employment to several thousands of people both skilled and unskilled at various levels. It will also help the Engineering Industry since lot of machinery and equipment will be needed to execute the project. Considering all these advantages the new government should accord top priority.


3 years ago

Interconnection of rivers is the most important project for this since it will substantially cut down wastage of precious water. It will also provide employment to several thousands of people both skilled and unskilled at various levels. It will also help the Engineering Industry since lot of machinery and equipment will be needed to execute the project. Considering all these advantages the new government should accord top priority.

Pulse Beat

Medical developments from around the world

High doses of commonly used non-steroidal anti-inflammatory drugs (NSAIDs), or painkillers, could double the risk of myocardial infarction (heart attack) and heart failure, according to a new study published in the Lancet recently. The study includes  600 randomised studies with 350,000 participants. This does not include the mild to serious gastrointestinal dangers of NSAIDs.

Honey as an Antibiotic
Dr Susan M Meschwitz presented her findings on the healing properties of honey at the 247th national meeting of the American Chemical Society recently.  She reported, “The unique property of honey lies in its ability to fight infection on multiple levels, making it more difficult for bacteria to develop resistance.” One of those fighting methods is its osmosis effect. This effect comes from honey’s high sugar concentration. In this process, water is drawn from the bacteria cells, leaving the pathogens no option but to dehydrate and die.

Honey breaks up bacteria by destroying its modes of communication. Honey also possesses properties that stop the formation of bio-films. These slimy bio-films are bacteria communities which harbour diseases. Honey keeps these bio-films from congregating by breaking up a bacterial communication process called quorum sensing. By breaking up this process, honey stops the bacteria from communicating and expanding their viability. Without this communication mode, the bacteria cannot release the toxins that increase their ability to cause disease. “Doctors should prescribe honey first, and antibiotics as a last resort,” says
Dr Meschwitz. Prescribed antibiotics should be the ‘alternative’ therapy or the last resort.

Conventional antibiotics fail because they target only the essential growth processes of bacteria. This allows bacteria to build up resistance in the long run and also eliminates good bacteria from the gut lowering our immune guard. Honey can target undetected fungal conditions that may be at the root cause of perpetual illness.

Emergency Oxygen Use
A 60-year-old man with chronic obstructive pulmonary disease (COPD) requiring long-term home oxygen therapy called an ambulance because of severe breathlessness. The paramedics gave him oxygen in the ambulance also. They  nebulised him with salbutamol through oxygen. The journey took 27 minutes and, by the time the man arrived at the hospital, he was drowsy and had respiratory acidosis, requiring ventilation; he died after a day.

What went wrong? Oxygen is administered to about a third of emergency ambulance patients. About 15% of hospital patients receive oxygen therapy on any given day. The doctors are coming around to the view that oxygen should be given only if the patient is hypoxemic. Patients with carbon monoxide or cyanide poisoning and patients with some diving or altitude-related emergencies benefit from hyper-oxaemia, but the prevention of hypo-xaemia is the goal of oxygen therapy in all other conditions. Hypo as well as hyper-oxygenation are equally bad for health.

Tomato & Cancer
Several studies have shown a positive correlation between people with a diet high in tomatoes, which have high lycopene content, having a lower risk of some forms of cancers like prostate, cervical, skin, bladder, stomach and lung cancers.

Lycopenes in tomatoes have other benefits as well. Researchers have found that the risk of heart disease can be lowered by such a diet. The risk of macular degeneration, which can cause blindness, has been shown to be lowered by eating tomatoes. Lipid oxidation, the damage occurring to normal fat cells which can then cause inflammation and disease, has also been shown to be reduced with a diet that includes a variety of tomato-based dishes.
Lycopene is an impressive antioxidant which helps block the free radicals that can cause disease. Studies have also shown that lycopene helps protect DNA, cellular fats and enzymes while also lowering the levels of bad cholesterol and LDL as well as boosting the immune system.


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