Every second person claims to be a financial advisor now. There is a plethora of magazines that write about various financial products, like mutual funds, bonds, etc. Even mainstream media (newspapers like Times of India and Economic Times) give plenty of unsolicited advice. Every bank today claims to offer advisory services and, invariably, the people at the helm of these services are more salesmen than financial advisors.

Credibility and credentials in financial services are important but, unfortunately, these are being used to exploit gullible customers. At the end of the day, it is our hard-earned money and, if the financial advice ends up as erroneous, where do, we, consumers go? The money lost is lost forever. Ironically, many bank managers simply delegate this task of financial advice to the so-called advisors who are not very knowledgeable themselves.

Digressing a bit, even insurance companies (LIC, for instance) lure customers through attractive advertisements; but when a policy matures, the penny drops and customers realise that there is a huge gap between what was promised to them and what they have actually received. Sales people are worried only about their targets and, somehow, once this target is achieved, service takes a back seat. Insurance companies are smart in that they seldom give greater publicity to term insurance schemes as these fetch low premiums. Not many investors know that insurance agents are more driven by their commission than the interest of the investors.

What then is the solution? Investor education is important. Every investor needs to know about the risks involved in mutual fund schemes. Depending on their risk profile and appetite, they should make an intelligent decision. In India, this (investor education) is woefully inadequate and there is hardly any stress on creating visibility about investor education. Hence, it is important to recognise the contribution of Moneylife in this arena in the past few years. Time and again, Moneylife has blown the whistle on mis-selling, mis-communication, ponzi schemes, mutual funds that have tanked, misleading advertisements about financial services and multi-level marketing schemes.
G Venkatesh,
by email

This is with reference to two dubious initial public offers (IPOs) in 2011 which have attracted the attention of Securities and Exchange Board of India (SEBI), namely, Tijaria Polypipes and Taksheel Solutions. SEBI’s way of investigation has not helped the common investor at all; the promoters continue to remain in business and have been ‘punished’ only to the extent of not being allowed to trade in securities in future!

While Tijaria Polypipes is down 90% from its IPO price of Rs60 a share, Taksheel Solutions is in a league of its own. Down over 95%, it has not released quarterly results in this financial year and has been suspended from trading on NSE as well as BSE platforms.
SEBI should initiate criminal proceedings against the promoters, seize their ill-gotten assets, wind up the companies and distribute the proceeds to the non-promoter shareholders of the company and to the lending banks. Only then will the trust of the common man in the capital market be restored.
Lokesh (surname withheld), by email

I was admitted to Hinduja Hospital at Khar West (Mumbai), late evening on 30/09/2013. On admission, I requested for a twin-sharing room but I was given a single room with the lame excuse that no twin-sharing rooms were available. Next morning, I noticed that two twin-sharing rooms were vacant on the same floor. This was brought to the notice of the staff. At 12.07pm, I was offered to move into a twin-sharing room. On inquiry, if I would be charged for a single room for that day or for the twin-sharing, I was clearly told that for the second day also I would be charged for the single room! Where was the question of shifting then? I then decided to shift to another hospital the next morning because of their callous attitude.

My request to the Hospital to refund my medical charges, which are higher for a single than a twin-sharing room, have been refused on flimsy and unconvincing ground that the twin-sharing rooms were previously booked.

Another point I brought up was for wrong and excessive billing, for which no regrets or proper explanation have been given. It is justified, as if it is routine!

It is surprising that a hospital of such repute has such low and poor administrative systems. This complaint is also to highlight how patients are treated and fleeced as they have no control over the situation. I am a retired person and a senior citizen and have to request you to take up this matter and help me get a justified refund as I have paid from my pocket.

Maybe my experience will help other patients to be more alert and aware.
Capt. Sunder Idnani, by email  

Recently, there has been media hype about the Justice AK Ganguly episode. I want to highlight the Visakha case law on sexual offence at workplace (both in private and public sector). The Supreme Court guidelines, only in the Visakha case, indicate that grievance cells for sexual offences should be formed everywhere between employer and employees, schools and colleges. But I have not found such cells about sexual harassment even in Indian courts. Why? Is it the privilege or immunity of the court staff? They are also employed by the judiciary. There must be a committee or a grievance cell for court staff for sexual harassment cases. Moneylife readers should search for grievance cells in all workplaces.
Advocate Dipak Chatterjee, by email   

Financial audit and costing procedures and practices prevailing in our country are a total eyewash and far from hardcore facts. They give a totally misguided picture of the so-called developing economy of ours and have developed the ‘voucher-based economy’ over 60 years. It has made nonsense of MRPs (maximum retail prices) of manufactured products and sky-rocketing real estate prices. Our rulers and the so-called financial pundits and our credit rating agencies, who give unrealistic credit labels to our financial and industrial firms, misguide the common man, and the administrative machinery, which implements these, is responsible for making our masses poorer and poorer day by day.

To overcome this negative effect, our financial audit and industrial costing procedures, practices, rules and laws need to be totally modified on fact-based economic and social grounds.
DA Bhatt, by email 

This is with regard to “Quantum MF head, Ajit Dayal, hits out at HDFC MF”. A simple solution for investors would be to skip advisors and go for the direct plan. And, for advisors to skip advising investors and focus on their own investments! Why bother about wasting time on a meaningless exercise?
Nilesh Kamerkar

This is with regard to “Who is Devyani Khobragade?”. It would also be interesting to find out this impressive lady’s career path. Father and daughter duo seem to have worked the system very well.
R Balakrishnan

This is with regard to “Moneylife IMPACT: Reliance Life refunds Rs3 lakh to an illiterate old widow” by Raj Pradhan. This is a highly commendable achievement for Moneylife Foundation and a graceful act of Reliance. Congratulations!
Yerram Raju Behara

This is with regard to “Iron ore mines: Is it Goa’s time to get the ban lifted?” by AK Ramdas. Iron ore from Goa is not suitable for Indian steel mills because of poor ferrous content. Goan ore is, therefore, exported to Japan and China. It remains to be seen whether the Parrikar government can prevent iron ore miners from going overboard to fill their coffers. If indiscriminate mining resumes, the government will have a major problem on its hands. Most of the people employed directly by Goa’s mining industry are migrants while the locals are engaged in ancillary industries like hiring out trucks to the mines. Thus, when mining is indiscriminate, only a handful of local people benefit while everyone suffers from pollution of air and water and depletion of natural resources.
Shiv Kumar

This is with regard to “Wealth Creators 2004-2013: Which Indian companies have generated the maximum wealth?” by Jason Monteiro and Pratibha Kamath. This is an excellent piece on penny stocks of 10 years ago which have grown substantially over the past decade.
Suiketu Shah

resistance to transparency
This is with regard to “ CAG can audit private telco’s accounts says Delhi High Court”. If the cardinal principle of financial management that sources and uses of funds should be subject to prudent accounting when money is collected from public is still valid, contesting the right to audit by those vested with that responsibility doesn’t stand reason. What baffles the common man is the resistance to transparency in accounting, whether it is gold or money or any other assets. ‘Public funds’ will have to be accounted in a transparent manner and should be subject to scrutiny.
MG Warrier


A Boy Breathes His Last—Literally

What schools must do to protect our children

Readers who suffer from asthma will empathise with this 10-year-old boy, more than others will. Having been a victim for over 40 years, this writer knows all the torture and anguish the malady brings. To explain it mildly, the attack brings on a deficit of air in the lungs. Breathing becomes difficult; it feels as if someone is sitting on your chest. Lack of oxygen makes concentration difficult and there are times when the victim dies. This is what happened to Ryan, a little boy schooling in Canada.

Ryan was severely asthmatic. During an attack, the bronchial pipes would narrow, making it difficult for Ryan to take in fresh air. The doctors advised him to carry a nasal spray, something like a deodorant can. Since asthma is commonly associated with allergies, the nasal spray would give the child instant relief; until the doctor arrived. The boy would find it easier to breathe until more effective medication could be administered.

This meant that Ryan had to carry the spray around with him at all times. Asthma attacks can come all of a sudden. Pollen, smells and even mental agitation can trigger the attacks.

This is where Ryan fell foul of the school. Since canisters, that are spray bottles, are considered possible concealed weapons that hide killer or stunning chemicals, most checkpoints do not allow them to be carried to public places. Ryan was asked not to take his spray bottle to class. He did as told.

Since the boy’s life depended on the spray, the school principal decided to keep the bottle in his office, to be used when required. It was a solution that apparently seemed OK.
One day, Ryan was hit suddenly, while in class. He found it hard to breathe. He gasped for breath. His friends carried him to the principal’s office to administer the inhalant. In that time, Ryan died.

Is the school responsible? After all, the arrangement was one that all sides agreed to. Yet, was this sufficient? Could not the spray have been kept closer? Could not the spray be checked and approved for carrying into the classroom? Did the authorities take medical opinion on this procedure and whether the journey from the classroom to the principal’s office allowed adequate time? It’s so easy to be wiser after the event.

In this case, the matter did not reach the courts. Ryan’s parents, though losing a precious child, thought it wiser to make this sad incident an example for the safety and lives of other children. They made the issue a national one and asked the legislators to evolve laws, measures and codes to prevent such occurrences in future. It was obviously too late for Ryan but, hopefully, not too late for hundreds of other kids.

Moneylife readers may think of this incident as one that is half a world away, not something that should really bother them. But nothing could be farther from the truth. Our own family doctor’s grand-daughter is one such child. On a school picnic to Lonavla, she was hit by a vehicle while crossing the road. She is physically and mentally impaired for the past two years; recovery is very slow and, most likely, will never be complete.
You be the judge.

Should or should not the school and the teacher be held liable? Negligence is lack of the duty of care. Do schools really plan excursions in advance, considering all the contingencies? Above all, is there any legislation in place? To begin with, should not the schools determine the maximum number of students per teacher’s responsibility? Are the children, and more so the teachers, properly trained for emergencies in advance? Distant picnics and excursions are eons away from the well-monitored confines of a school.

To all those with school-going kids, we beg that this be made a prime cause for concern. Parents-Teachers Associations must be asked to formulate conditions; later the same should be asked of the departments of education. Every child is precious.

Bapoo Malcolm is a practising lawyer in Mumbai. Please email your comments to [email protected] or [email protected]




3 years ago

Emergency procedure trainings must be made mandatory to parents as well as teachers. Unfortunately its done more out of compliance & not with the intention of handling a scenario when it actully occurs. Fire drills are classic examples (everytime we have insidents with the same patterns & yet we dont learn from it)

Headline CPI inflation should be nominal anchor for monetary policy

The key implication of this new CPI-based inflation targeting framework is that interest rates in India will remain higher for longer, says Nomura

The Urjit Patel Committee appointed by the Reserve Bank of India (RBI) has recommended that headline consumer price index (CPI)  inflation should be the nominal anchor for monetary policy. The Committee says this is to revise and strengthen the monetary policy framework in India. Instead of the current multiple indicator approach, inflation should be the nominal anchor and this should be communicated without ambiguity, the Committee has said.


“The key implication of this new CPI-based inflation targeting framework is that interest rates in India will remain higher for longer,” says Nomura in a research report. "When inflation is above the nominal anchor, the real policy rate is expected, on average, to be positive," it said.


Nomura said, “Real policy rates in India are very negative and unless CPI inflation moderates, policy rates will move higher. While CPI inflation should moderate as vegetable prices ease, we expect headline CPI inflation to remain elevated at above 9% in 2014 as a result of the upswing in rural wages and elevated inflation expectations.”


Against this backdrop, Nomura sticks to its call of a cumulative 50bp hike in the repo rate in first half of 2014 including a 25bp hike at the 28th January monetary policy meeting.


The recommendations of the Urjit Patel Committee includes setting up of a five-member monetary policy committee (MPC) consisting of the RBI governor, deputy governor and executive director in charge of monetary policy and two external members chosen by the central bank. Each member will have one vote and the monetary policy outcome will be decided by majority vote. Further, the MPC will be accountable for any failure to establish and achieve the nominal anchor. Minutes of the proceedings of the MPC are to be released with a lag of two weeks. The RBI will also publish a bi-annual inflation report.


On inflation targets, the Urjit Patel Committee report has recommended that the ultimate target for CPI inflation should be set at 4% with a band of plus/ minus 2%. However, given the currently elevated inflation levels the committee recommends a transitional phase to the ultimate target zone, from the current level of 10% to 8% over a period not exceeding the next 12 months. Further, CPI inflation should reach 6% over a period not exceeding the next 24-month period before formally adopting the recommended target.


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