Regulations
Financial Inclusion without Financial Consumers
For the government and regulators, financial inclusion does not mean listening to consumers
 
Corporation Bank is an exception among Indian banks—public, private and foreign. Its outspoken officers’ association often acts as a whistleblower and has prevented more than one chairman from destroying the bank’s finances through bad lending. The February issue of its monthly journal, Officers’ Voice,  published extremely forthright views on government and banking. 
 
While welcoming the prime minister’s (PM’s) views expressed at the Gyan Sangam at Pune, the journal makes some telling points. The retreat was supposed to brainstorm on what ails the industry, but except for CMDs (chairman & managing directors) there were no representatives of other stakeholders, especially officers and employees who are the backbone of banks. “Does it mean that wisdom is the exclusive domain of only CMDs?” asks Officers’ Voice. The editorial points out that while the media and other stakeholders were kept away from the retreat, the ‘knowledge partner’ for the Gyan Sangam was global consulting firm McKinsey & Company. It raises a pertinent question of whether ‘videshi’ gyan is the answer to the swadeshi problem of making public sector banks more effective. 
 
Commenting on several ‘controversial’ recommendations that emanated from the deliberations, the editorial says that the proposal to issue priority sector loan certificates (PSLs) seems to be aimed at allowing private and foreign banks to meet priority sector obligations by merely investing in PSLs while the “hard and strenuous work of priority sector lending has to be done only by PSBs.” 
 
Another revelation is the annual loss figure of Rs1,485 crore for banks on account of the PM’s Jan Dhan Yojana. This is broken up as—Rs500 crore for issue of Rupay cards, Rs780 crore for payment to banking correspondents, Rs390 crore for cost of supervision, Rs175 crore for financial literacy and advertising. 
 
Moneylife, as the voice of savers, believes that most of these observations apply to bank customers as well. Despite being the largest stakeholder in the banking system, their voice is most feeble is not heard by anybody in the banking system or the government. Neither the Reserve Bank of India (RBI) nor the Indian Banks Association (which at least two, very respected, former deputy governors of RBI call a ‘bankers’ cartel’) has any formal process of engaging or interacting with those who represent bank customers. 
 
If leveraging technology to improve banking efficiency were a key theme of the Gyan Sangam, then ensuring that customers use it safely and have access to a proper grievance redress mechanism would be a natural corollary. But there was no discussion about this issue at all. 
 
Similarly, neither banks nor the regulators care about the bugs or design flaws in the use of banking technology that cause hardship to consumers. Moneylife Foundation has long been lobbying RBI over niggling issues with NEFT transactions. But, despite a personal meeting, written submission to the top brass at RBI and persistent follow up, we have no feedback on whether consumers’ concerns are likely to be addressed at all. The unfair harassment and extortion of those in financial distress by recovery agencies also falls on deaf years. 
 
Many recent developments, including BJP’s shock defeat in Delhi, the withdrawal of ordinances issued by the government, and the controversy over the Land Acquisition Bill, have one thing in common—a sense that the government needs to communicate more effectively with various stakeholders. It is Narendra Modi’s impressive ability to communicate with one and all that swept him to power. The prime minister must ensure he does not lose that advantage, by setting up a formal system of communication with all stakeholders and ensuring that by every regulator and ministry in his government follows it. 

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COMMENTS

Vaibhav Dhoka

2 years ago

Common Man doesn't understand Whether Regulator is confused or Pretend to be confused?

Ambitious solar power projects need all round support!
Solar power industry faces several issues like land acquisition costs; power evacuation; high cost of capital; continued muted interest from investors and dealing with bankrupt state-run distribution companies. In addition, to the usual transmission losses and pilferage, which is ‘normal’ in this industry!
 
Recently, while meeting foreign investors and a group of industry executives, it is reported in the press, that Piyush Goyal, Union Minister for Power, Coal and Renewable Energy, appears to have stated that from the current production of one trillion units of energy, India would be able to double it up and have a surplus, by 2019! As at December, according to available information, India's total renewable energy installed capacity is 33,792 MW. And the government has set an ambitious target of reaching 175,000 MW of energy through renewable energy sources, latest by 2022.
 
It appears that guidelines have already been issued for setting up 25 solar parks, each with a 500 MW capacity, across the country. Industry estimates that as much as Rs250,000 crore investment would be needed to reach such ambitious targets.
 
At the moment, 32,000 MW of thermal capacity is over 25 years old and the government was encouraging to phase them out by capacity expansion at the same location with super critical power units. Other plans include the revival of 14,000 MW of gas-based power units, which closed for lack of gas, will now be revived, according to the minister.
 
In the Re-invest 2015 investors meet, according to the press reports, Prime Minister Narendra Modi was given assurances by members present for creating huge energy capacity in the country. For instance, First Solar, the US based Solar power project developer, assured the PM that they will first set up a 5000 MW green energy projects in India by 2019.  It may be noted that, recently, Apple Inc committed $848 million to buy solar electricity from this company for the next 25 years - this being one of the largest commercial deals in the solar sector. Their interest in India opens up new opportunities for developments in the country.
 
Apart from the foreign investors, many Indian corporations have shown renewed interest in the development of solar and other renewable energy sources.  Adani Enterprise, for instance, has signed a memorandum of understating (MoU) with the Rajasthan Government for developing solar parks with a total capacity of 10,000 MW in 10 years, but the first 5000 MW will be set up in the first five years.  At the same time, Adani Enterprise has signed another MoU with US based SunEdison Inc to jointly invest $4 billion for setting up India's largest photo-voltaic making plant at Mundhra in Gujarat.
 
In the meantime, the Union Cabinet is reported to have cleared the setting up of a 15,000 MW of grid-connected solar power project through NTPC through its subsidiary NTPC Vidyut Vypar Nigam Ltd (NVVN). With the active support of Solar Energy Corporation of India, the Madhya Pradesh Government is setting up the world's largest solar power plant. Its power generating capacity will be 750 MW. It is estimated to cost Rs4,500 crore and it will soon be able to produce power at Rs5 per unit, lower than any other project in the country!
 
But the solar power industry in the country is facing various challenges.  Rama Bethmangalkar of VenturEast, an Indian venture capital company, which has invested in renewable energy companies, points out the difficulties faced by the industry including land acquisition costs; power evacuation; high cost of capital; continued muted interest from equity investors and dealing with bankrupt state owned distribution companies. In addition, to these, there are the usual transmission losses and pilferage which is ‘normal’ in this industry!
 
In order to encourage the growth and meet the needs of the consumers, it is essential that the government seriously looks into the issues of cheaper credit so as to access low cost funds for development. If necessary, the government may stipulate a minimum economically viable solar power plant capacity that may be allowed to issue tax free bonds and competitive rates for linking into national power grids for distribution.
 
One of the most successful solar power generation programmes can be derived by designing small scale units that can be sold to individual house owners, setting them up on their roof tops, and offering a link to the state grid, so that the excess power can be made available to others. When such a compact unit can be designed, at competitive rate, India will have surplus power - not before!
 
(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.)

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COMMENTS

vishal

2 years ago

the theft of electricity is a common feature in our country and this happens with the convenience of the electricity boards across the country. Private players may loot the consumers but they will not allow inefficiency and theft.

Alleged Patient Safety Kickbacks Lead To $1 Million Settlement
The US Justice Department claimed patient safety celebrity Dr Chuck Denham solicited payments from a drug company to win a prestigious National Quality Forum endorsement for its product
 
Dr. Chuck Denham, once a leading voice for patient safety, will pay $1 million to settle civil allegations that he took kickbacks to promote a drug company's product in national health quality guidelines, the Justice Department announced Monday.
 
Denham, a patient safety consultant from Laguna Beach, Calif., had allegedly solicited and accepted monthly payments from CareFusion Corp., maker of the antiseptic ChloraPrep, while serving as co-chairman of a National Quality Forum committee in 2009 and 2010.
 
The nonprofit quality forum in Washington, D.C., reviews evidence and makes recommendations on best practices that are considered the gold-standard by health care providers nationwide.
 
ProPublica previously reported that Denham hadn't disclosed the payments to the panel of experts he was leading for the forum, and that other members of the Safe Practices Committee had not intended to endorse ChloraPrep. But Denham had advocated for the drug during the group's meetings.
 
The committee's final report recommended the product's formulation to prevent infections, ProPublica found.
 
"Kickback schemes undermine the integrity of medical decisions, subvert the health marketplace and waste taxpayer dollars," said Benjamin C. Mizer, acting assistant attorney for the Justice Department's civil division, in a news release announcing the settlement.
 
According to the Justice Department, the kickbacks to Denham caused the submission of false or fraudulent claims for ChloraPrep to the government's health care programs. As part of the settlement, Denham will be excluded from participating in Medicare and Medicaid programs.
 
"Quality and patient safety must drive all medical recommendations," said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services' Office of Inspector General. "Doctors that put profits ahead of this core value must be held accountable."
 
Neither CareFusion nor Denham, who runs the consulting company Health Care Concepts and the research organization Texas Medical Institute of Technology, returned calls for comment.
 
Denham did not admit to wrongdoing as part of the settlement. He previously denied any wrongdoing, saying his company had legitimate contracts for $11.6 million starting in 2008 with Cardinal Health, the parent company of CareFusion.
 
Denham had enjoyed star status in the patient safety world until January 2014, when the Justice Department first alleged an improper relationship involving his work with CareFusion. He was beloved by patient advocates, a regular on the conference speaking circuit and produced a documentary with actor Dennis Quaid, whose newborn twins had suffered a medication error.
 
After the kickback allegations, he was removed as editor of the Journal of Patient Safety, where an expert review found conflicts of interest. Denham's downfall has been called the patient safety movement's first scandal.
 
Courtesy: ProPublica.org

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