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Five ways Congress is trying to curb rape in the military

A breakdown of the key proposals, and the debate they are stirring on Capitol Hill

When the Senate Armed Services Committee held a hearing on the U.S. military’s sexual assault crisis, lawmakers grilled Army, Navy, Air Force and Marine officials on the alarmingly high number of rapes and other sexual abuses in their ranks.
 

Political momentum to address the problem has been building since the Pentagon released statistics last month showing that sexual assault increased by 35 percent between 2010 and 2012. The outcry grew louder when a string of scandals came to light, including alleged sexual assaults by Army and Air Force officials who were in charge of preventing sexual abuse.
 

Senators have rushed to draft legislation to hold attackers accountable and provide support for victims. But at the Senate hearing, officials steadfastly opposed most major changes in the way sexual assault cases are prosecuted. “It will undermine the readiness of the force ... [and] will hamper the timely delivery of justice,” said Army Chief of Staff Ray Odierno.
 

Here’s a rundown of key congressional proposals and what the military is saying about them.
 

1. Stop giving military commanders the final say on rape convictions

Under the military’s criminal procedures, commanders have clemency powers, which means they can dismiss military court convictions “for any reason or no reason.” The policy came under fire this spring when Air Force Lt. Gen. Craig Franklin overturned a jury's ruling that Lt. Col. James Wilkerson, a fighter pilot, was guilty of aggravated sexual assault. Another official, Air Force Lt. Gen. Susan Helms, was blocked from a promotion in May for throwing out a captain’s sexual assault conviction without any public explanation.
 

In April, Defense Secretary Chuck Hagel voiced support for stripping commanders of this power. Under Hagel’s proposal, commanders could still reduce someone’s sentence but would have to submit a reason in writing. Sens. Claire McCaskill, D-Mo., and Barbara Boxer, D-Calif., have called for similar changes. Rep. Jackie Speier, D-Calif., introduced a House bill that goes further, removing a commander’s authority to overturn or reduce a judge’s sentence.
 

Military officials are open to reforming the policy, though they say the Wilkerson case inflated outrage over a rarely-used power. Sen. Lindsey Graham, R-S.C., a member of the Armed Services Committee and former Air Force lawyer, has been the only lawmaker to speak out against the proposed change in policy.
 

2. Have lawyers determine which assault cases are credible — not the defendant’s boss
 

Sen. Kirsten Gillibrand, D-N.Y., has called for the most major shift in how the military tries sexual assault cases. Now, commanders decide which cases are investigated and prosecuted, and which are thrown out. Gillibrand’s bill proposes giving independent military prosecutors that power for sex crimes and other serious charges. Commanders have an incentive to ignore rape allegations, advocates of the change say, because it reflects poorly on their leadership.
 

Military officials are strongly opposed to such a change in authority. “The consequences of such a decision would be ... extraordinarily damaging to the nation’s security,” Army Gen. Martin Dempsey wrote in a letter to the Armed Services Committee chairman, Sen. Carl Levin, D-Mich. The change would “undermine good order and discipline” by sending a message that commanders “cannot be trusted,” Dempsey said.
 

3. Make sure a sex crime conviction means losing your job
 

Sen. McCaskill has led a bipartisan effort to require that anyone convicted of “rape, sexual assault, forcible sodomy, or an attempt to commit any of those offenses” be dismissed or given a dishonorable discharge.
 

At the hearing, McCaskill argued that a soldier’s job performance shouldn’t be a factor in deciding whether to move forward with sexual assault cases. Currently, commanders may consider it when deciding whether to prosecute. “The facts of a felony are the facts of a felony,” McCaskill said. “I don’t care how good a pilot it is.”
 

Lt. Gen. Richard C. Harding of the Air Force argued during the hearing that a defendant’s character should be relevant in determining the case but should not have “overriding weight.”
 

4. Scrutinize officers appointed to prevent sexual assault
 

In the past month, there have been not one but two instances of soldiers working in Sexual Assault Prevention and Response offices charged with sexual assault. The chief of the Air Force’s prevention office was arrested last month for groping a woman. A week later, an Army sergeant working as a sexual assault program coordinator was arrested on multiple accusations of sexual abuse and for running a prostitution ring.
 

Hagel immediately demanded that all officers in the services’ Sexual Assault Prevention and Response branches be retrained, rescreened, and recredentialed. Since then, Sens.
Jeanne Shaheen, D-N.H., and Deb Fischer, R-Neb., have introduced a bill that would elevate those jobs to a higher status, requiring stricter screening and more certification. In a letter to Secretary Hagel, Shaheen and McCaskill wrote that “In many cases, no interviews are required, and the commander plays a hands-off role in choosing who will perform those duties.” The bill would require a commander to pick someone for the post.
 

5. Make it easier for sexual assault victims to access disability benefits
 

While the Senate was hearing testimonies by military officials, the House unanimously passed legislation to increase access to disability benefits for sexual assault victims in the military. Veterans battling military sexual trauma face a higher burden of proof than those with post-traumatic stress disorder, or PTSD. And because most sexual assaults go unreported, there is often little evidence available. Under the proposed law, veterans would only have to show they were diagnosed with a mental health condition that stems from military sexual assault.
 

Read our Muckreads roundup of the most important reporting on sexual assault in the military.
 

Courtesy: http://www.propublica.org/

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RTI Judgement Series: PIO can transfer the RTI application to as many as required

The CIC clarified that the law does not put any restriction on the public authorities or PIOs to which the RTI application could be transferred. This is the 108th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while allowing an appeal, ruled out the contention of the Public Information Officer (PIO) of the Cabinet Secretariat that a Right to Information (RTI) application can only be transferred to one PIO as per the circular from the Department of Personnel & Training (DOPT).

 

While giving this judgement on 16 June 2011, Shailesh Gandhi, the then Central Information Commissioner said, “If the records and operations were computerized, transferring an RTI application to even 50 or 100 public authorities could be done with a click of mouse or by email. If public authorities do not meet commitments implied in the RTI Act, the citizen cannot be denied his fundamental right.”

 

Mumbai resident Chetan Kothari, on 23 October 2009, sought information about consumption of petrol and diesel by state ministers and cabinet ministers including the leader of the opposition and staff from the Public Information Officer (PIO) of the Lok Sabha Secretariat. Here is the information he sought under the RTI Act...

 

a) Please provide the details. Name-wise break up of state ministers and cabinet ministers of the central government petrol & diesel consumption and amount with opposition party leader.

(b) Please provide the details of each state minister and  cabinet minister of the central government (Name-wise break up) how many cars.

(c) Please provide the details of each state minister and cabinet ministers of the central government each of them how many staff provided. (Give name-wise ministers break up)

 

On 27 September 2010, the PIO of Lok Sabha Secretariat transferred the RTI application to PIO of Cabinet Secretariat and PIO of Leader of Opposition.

 

The PIO of the officer of the Leader of Opposition, on 4 October 2010 provided the following information...

 

“The staff car to Leader of Opposition in the Lok Sabha is provided by Lok Sabha Secretariat and accordingly, all matters/ records relating to the maintenance/ running, including the expenditure on petrol/ diesel, etc of the car are being dealt/ maintained by the concerned branch of Lok Sabha Secretariat. The information required by the applicant is not available in the office of Leader of Opposition in Lok Sabha and hence the CPIO is not in a position to give the required information to the applicant.

 

It is, therefore, requested that the CPIO, Lok Sabha Secretariat give the information directly to the applicant. The application forwarded with the OM dated 27 September 2010 is returned herewith."

 

On 12 October 2012, the PIO of the Cabinet Secretariat provided following information in respect with the queries of Kothari...

 

“2. The information sought is scattered among a large number of public authorities, including Central Government Ministries/ Departments. Therefore, in terms of the provisions contained in O.M. No. 1012/2008-IR dated 12.6.2008 issued by Ministry of Personnel, Public Grievances & Pensions (Department of Personnel & Training), you are required to file separate applications with the CPIOs of each of the Ministries/Departments concerned individually, for obtaining the required information.

3. In so far as the Cabinet Secretariat is concerned, the information may be treated as NIL."

 

On 29 October 2010, the PIO of Lok Sabha Secretariat gave a reply stating that no information was available.

 

Kothari then filed his first appeal. The First Appellate Authority (FAA) after carefully considering all the relevant documents, upheld the decision of CPIO as referred in para 2 above and direct the CPIO to provide a copy of list of ministries/ departments which contains the office addresses of the public authority, within 10 working days.

 

Citing information not provided as well as the Secretariat not complying with Section 4 of the RTI Act, Kothari then approached the CIC. In his second appeal before the Commission, he submitted that...

 

(1) CPIOs did not transfer application within the stipulated period as per provision under Section 6 (3) & delay inform to applicant.

(2) Applicant was unable to send same application to 85 department of Central Govt which is waste of time & money.

(3) Applicant sent RTI application to nodal CPlOs of 'Lok Sabha Secretariat' because that department provide car, staff etc to opposite party leader.

(4) CPIOs violated the RTI Act & holding the information but misleads to applicant & wasting the public money & time & increasing the work load for higher authority.

(5) CPIOs failure to Act according to under provision of Section 4(3) for the purposes of sub-section (1), every information shall be disseminated widely and in such form and manner which is easily accessible to the public. Also CPIOs failure to act according to under provision of Section 5(3) & (4).

(6) PIO's failure to Act according to under provision of Section 2(f), 4(1)d & 5.

 

To support his submission Kothari quoted two orders from the high courts.

 

(1) It will be in context to quote the observation made by the division bench of the Delhi High Court in LPA 501/2009, pronounced on 12.1.2010 (matter relating to asset declaration of judges of the apex court):

The Act does not merely oblige the public authority to give information on being asked for it by a citizen but requires it to suo moto make the information accessible. Section 4(1)(a) of the Act requires every public authority to maintain all its records duly catalogued and indexed in a manner and the form which facilitates the right to information under the Act and ensure that all records that are appropriate to be computerized are, within a reasonable time and subject to availability of resources, computerized and connected through a network all over the country on different systems so that access to such records is facilitated. Section 4 spells out various obligations of public authorities and Sections 6 and 7 lay down the procedure to deal with request for obtaining in formation.

 

(2) In fact the Madras High Court even went a step further and stated that administrative difficulties and shortage of manpower cannot be cited as reasons for denying information. While dismissing WP No. 20372 of 2009 and MP No. 1 of 2009, in a Judgment dated 7.1.2010, the court ruled:

The other objections that they are maintaining a large number of documents in respect of 45 departments and they are short of human resources cannot be raised to whittle down the citizens' right to seek information. It is for them to write to the government to provide for additional staff depending upon the volume of requests that may be forthcoming pursuant to the RTI Act. It is purely an internal matter between the petitioner archives and the state government. The right to information having been guaranteed by the law of Parliament, the administrative difficulties in pro v/ding information cannot be raised. Such pleas will defeat the very right of citizens to have access to information. Hence the objections raised by the petitioner cannot be countenanced by this court. The writ petition lacks in merit."

 

During the hearing Mr Gandhi, the then CIC, noted that the appellant had sought the information for a period of 10 years, which he felt appeared excessive, since it was unlikely that information would be maintained in this format for 10 years.

 

While the PIO of the Lok Sabha Secretariat transferred the RTI application to the PIO of Cabinet Secretariat and to the PIO of the office of Leader of Opposition, both the PIOs did not provide any information stating that they do not have it.

 

During the hearing, the PIO of Cabinet Secretariat took a position that he cannot transfer the RTI application to PIOs of various ministries. He was depending on an office memorandum issued by Department of Personnel & Training (DOPT) no10/ 02/ 2008-IR dated 12 June 2008 which states that Section 6(3) of the RTI Act mentions public authority in the singular and therefore the RTI application can only be transferred to one public authority as per the RTI Act.

 

Kothari, the appellant, disputed this claim and stated that the RTI application should have been transferred wherever required.  He also quotes a Madras High Court Judgment in support of his contention.

 

Section 6(3) of the RTI Act states,

"Where an application is made to a public authority requesting for an information,-

(i) which is held by another public authority; or
(ii) the subject matter of which is more closely connected with the functions of another public authority, the public authority, to which such application is made, shall transfer the application or such part of it as may be appropriate to that other public authority and inform the applicant immediately about such transfer:
 

Provided that the transfer of an application pursuant to this sub-section shall be made as soon as practicable but in no case later than five days from the date of receipt of the application."

 

The Commission said the point to be determined was whether Section 6(3) means that the transfer should only be made to one public authority or to multiple public authorities, if required.

 

Section 13 of the General Clauses Act, 1897 stipulates inter alia that in all central legislations and regulations, unless there is anything repugnant in the subject or context, words in the singular shall include the plural, and vice versa.

 

Section 13 of the General Clauses Act, 1897, enacts a general rule of construction that words in the singular shall include the plural and vice versa but the rule is subject to the proviso that there shall be nothing repugnant to such a construction in the subject or context of the legislation which is to be construed.

 

"This principle of law has been well- established and applied by the Supreme Court of India from time to time viz. in K Satwant Singh v/s State of Punjab 1960 SCR (2) 89, Narashimaha Murthy v/s Susheelabai & Ors AIR 1996 SC 1826 and J Jayalalitha v/s UOI & Anr AIR 1999 SC 1912, as well as by several high courts while interpreting various statutory provisions," the CIC pointed out.

 

Mr Gandhi noted that there is nothing in the Act which would show that Parliament intended that the transfer should only be to one public authority. “It also appears that DoPT's office memorandum is in contravention of the General Clauses Act 1987 and interpreted Section 6(3) of the RTI Act wrongly. The whole purpose of the RTI Act has been to facilitate flow of information to the Citizens,” he said.

 

The CIC said, "In this case, the Lok Sabha Secretariat was not aware who would hold the information being sought by the appellant. The law does not put any restriction on the public authorities to which the RTI application could be transferred. The Commission does believe that an appellant should seek information from a public authority, which he can reasonably believe may have the information. In the instant case the appellant appears to have exercised reasonable care and applied and to a public authority which an average citizen may believe will hold the information.”

 

There are numerous instances where RTI applications have been transferred by one public authority to another and none of them appears to know where the information is. In this scenario for public authorities to take a position that they will only transfer to one public authority is unreasonable and the law certainly does not state this, the Commission said.

 

While allowing the appeal, Mr Gandhi said, "Public Authorities claim that it would be difficult to transfer RTI applications to multiple authorities since it would mean putting a lot of resource. The Commission rules that DOPT's office memorandum no10/ 02/ 2008-IR dated 12 June 2008 is not consistent with the law. The Commission explained to the appellant that seeking information for 10 years would definitely disproportionately divert the resources of the public authorities. He has agreed that information could be furnished to him for the last two years."

 

The Commission then directed the PIO to transfer the RTI application to various public authorities before 25 June 2011, who must provide information for the last two years to Kothari as per the provisions of the RTI Act.      

 

CENTRAL INFORMATION COMMISSION

                                                                              

Decision No. CIC/SM/A/2011/000278/SG/12906

http://rti.india.gov.in/cic_decisions/CIC_SM_A_2011_000278_SG_12906_M_58648.pdf

Appeal No. CIC/SM/A/2011/000278/SG

 

Appellant:                                 : Chetan Kothari

                                                  Mumbai 400 026

 

Respondent:                             : KJ Sibichan

                                                  Under Secretary & CPIO

                                                  Cabinet Secretariat,

                                                  Rashtrapati Bhawan,

                                                  New Delhi

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“Banks should not be selling third-party products,” RBI deputy governor

In an Open House session in Mumbai, RBI’s Deputy Governor openly agreed with Moneylife Foundation’s stance that banks should not sell non-banking products like wealth management services, insurance and gold
 

At a Moneylife Foundation’s open house attended by a packed audience in Mumbai, deputy governor of Reserve Bank of India (RBI) Dr KC Chakrabarty said, "My view is that banks should not be selling third party products. In fact, life insurance has been in India since independence, but till 1994-95 there were no banks selling insurance or mutual fund products. I fully support that the regulator must decide what is mis-selling. It must decide that if the bank is selling insurance products, what should be the conditions required to be fulfilled.”
 

Dr Chakrabarty was responding to Moneylife Foundation’s appeal that banks should not be allowed to sell third-party or non-banking products like is insurance, gold and mutual funds because they are untrained to so do and do not take responsibility of the outcome in any manner.
 

In the foreword to the Annual Report on the Banking Ombudsman Scheme 2011-12, Dr K C Chakrabarty writes, “The incentive structures governing sale of different financial products and services tend to result in mis-selling. It is frightening to imagine a situation where the front line staff at banks may be more interested in pushing insurance and para-banking products instead of promoting core banking products.”
 

Dr Chakrabarty further says, “The role of the top management of banks becomes very crucial in formulating product and service delivery and pricing strategies with a clear focus on fair treatment of customers, appropriate disclosure of product features and risks and suitability of ‘sell’ for different segments of customers.”

 

On 18 April 2013 Moneylife Foundation had presented a memorandum to RBI Governor (http://foundation.moneylife.in/?page_id=2000) on unchecked mis-selling by bank relationship managers. It says, “Banks’ relationship managers have been particularly brazen in recommending financial products to their customers while completely disregarding their financial situation. It is commonplace to hear of a senior citizen being conned into investing in a mutual fund, unit-linked insurance plan or a hybrid-derivative product on the promise of higher returns. In many cases, private bank executives go over to their homes and persuade them to break secure fixed deposits and invest the money in Unit Linked Insurance Products (ULIPs) with the false assurance that these are as safe as fixed deposits and offer a higher return and security.”

 

Moneylife had highlighted the case of Ms Suchitra Krishnamoorthi, a well-known singer and actor, who was taken for a ride by HSBC Bank for over five years. The modus operandi for HSBC in this case has been a combination of toxic churning of the portfolio management system (2% entry load on every purchase made by it on behalf of client), insurance products promising 24% returns, insisting her on taking a loan instead of withdrawing funds without even disclosing that the client was entitled for a smart loan.
 

Read - HSBC loots Suchitra Krishnamoorthi after big promises of 24% returns
 

A strong campaign by Moneylife through its website and its social media properties got quick justice for a 79-year old man with an ailing wife. IndusInd Bank officials had deceitfully persuaded him break his fixed deposit with the bank and invest in a wrong product. The bankers came—at 11.30 in the night—bearing a demand draft of Rs7 lakh covering the amount he was persuaded to withdraw from his fixed deposit and invest in DWS’s mutual fund scheme with a five-year lock in period.
 

Read -Mangelal Sharma gets his Rs7 lakh back—another Moneylife victory
 

RBI’s new guidelines to regulate banks’ wealth management operations and third party product distribution would be released by the end of June. It also aims to strengthen the know your customer (KYC) norms, anti-money laundering (AML) standards and rules to combat financing of terrorism.
 

RBI said that banks offering wealth management services were exposed to reputational risks on account of mis-selling of products, conflict of interest, lack of knowledge and clarity on products and frauds. Bank employees were receiving incentives from third parties for selling their products. Such practices may lead to mis-selling and distortion of the staff incentive structure.

 

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COMMENTS

COL H S SAWHNEY

9 months ago

Sucheta Pl help I have also been cheated TWICE by AXIS Bank by persuading me top invest in DWS Mutual FUND with Lock in period with poor pathetic meagre returns Pl call me 09850068030 urgent
COL H S SAWHNEY

G N GHOSH

3 years ago

IT IS A VERY WELCOME DECISION BY THE DY GOV OF RBI. PRESENTLY BANK IS DRIVEN THE SALE OF THIRD PARTY PRODUCTS LIKE MF, LIFE INSURANCE,GOLD, PORTFOLIO MANAGEMENT SERVICE WITH REVENUE TARGET.THE TARGET IS GIVEN BY THE HEAD OFFICE TO EVERY BRANCH TO MEET THE BROKERAGE COLLECTION & OFFER HEAVY INCENTIVES TO BRANCH MANAGER AND OTHER SALES EXECUTIVES.SO THESE PEOPLE MAKE BANK CUSTOMERS A SOFT TARGET CLIENT TO SALE LIFE INSURANCE AND HIGH BROKERAGE EARNING MUTUAL FUND PRODUCTS. THEY HAVE EASY ACCESS TO THE CUSTOMERS SAVING AND CURRENT AC BALANCES & MOTIVATE THEM TO PUT MONEY IN SCHEMES NOT CONSIDERING THE CUSTOMERS FINANCIAL POSITION AND REQUIREMENTS.EVEN SOME TIME BRANCH MANAGERS BLACK MAIL THE CUSTOMERS COMING FOR LOAN TO PURCHASE LIFE INSURANCE OTHERWISE LOAN WILL NOT BE SANCTIONED. THEY USE OTHER STAFFS IN THE BANK LIKE CUSTOMER SERVICE EXECUTIVES, OPERATION MANAGERS, CASH COUNTER STAFFS TO CATCH AND PRESSURIZE THE CUSTOMERS TO INVEST MONEY IN HIGH BROKERAGE EARNING SCHEMES. THESE SALESMAN OF THE BANKS HARDLY REMAINS FOR 1 - 2 YEARS IN THE BANK ,THEN THEY EITHER TRANSFERRED OR LEAVES THE JOB, IN THIS SITUATION IF A CLIENT SUFFERING FROM MISSSALE BY BANK STAFF THE BRANCH PEOPLE WILL KICK HIM OUT BY SAYING THAT EARLIER STAFF WAS DONE WRONG AND NOW WE ARE NOT RESPONSIBLE FOR THAT. SO BANKS SHOULD BAR TO SALE ANY TYPE OF THIRD PARTY PRODUCTS IN THE BRANCH PREMISES, NOT ALLOWING SALE EXECUTIVES TO SIT IN BRANCH AND BRANCH MANAGER SHOULD NOT HAVE ANY TARGET OR REVENUE INCENTIVE, PROMOTION,GIFTS,PERKS ANY PRESSURE TO SALE THIRD PARTY PRODUCTS

Dayananda Kamath k

3 years ago

when third party products are allowed to be sold the regulators have not bothered about the structure that is to be kept in place to adhere to the norms. just by a signature they allowed banks to do all these irregularities. even when the matter was brought to the notice of the regulator their attitude was casual reckless as finance secretary rightly said. unfortunately his ministries attitude is also the same. it clearly shows it is a conspiracy to loot the the public money by design create a new product allow it to be abused for the benefit of the few from their favourites and wait for the public outcry. then ban it make a scapegoat of an innocent and open a new avenue again. this what is being done for the last 60 years.

Ashwin S Anand

4 years ago

Act on it.. just don't talk !!!

Debadatta Das

4 years ago

When banks started selling insurance product, the finance market got spoiled. Because everybody knows about the return on insurance product. If a person required insurance then he/she must opt for term insurance, but in our country the insurance is a mix of insurance and investment. The worst thing is that unit link insurance where the customers are getting negative returns.For the entire economical problem all the regulators are equally responsible.

Gopalakrishnan T V

4 years ago

Banks should be advised to do banking business with all seriousness and commitment. Staff should have thorough knowledge of banking products first and they should also understand the customers needs. It is time they concentrate on banking ie taking deposits and lending to genuine production and consumption needs with the required safety norms in tact.Will the Regulator ensure this?

Suiketu Shah

4 years ago

The great thing is lakhs of readers of moneylife are aware to stay far far away from these dubious mutual funds,Z grade equirty products,insurance policies, etc promoted heavily by banks,etc all thanks to moneylife.It saves the hard earned money of lakhs of people who otherwise would have fallen to the nonsense talks og banks.Great great work by moneylife.

arun adalja

4 years ago

rbi must penalise the banks with heavypenalty if they do other activities than banking and give good customer satisfaction.

Ravindra

4 years ago

I suppose RBI is supposed to tell the Banks what to do and what not to do. We see this in the Newspapers frequently. And here is a RBI Dy Governor who, instead of using the powers that RBI has IS REQUESTING Banks not to indulge in Insurance and other third party products. It sounds funny to say the least.

Vikash Agarwal

4 years ago

Manoharji... pls do not take the banking 50 years back.... today whatever we are getting in terms of financial offerings, technological convenience both for internet banking (SB and current account services through online debit / credit card, ATM)& capital market services (Demat, equity, IPO invesment through ABAS, Mutual funds)... all is possible only because some bank has taken initiative beyond debit / credit.. The real issue is how matured our banks and regulators are in terms of managing the risk associated with the development in BFSI space. Lets take constructive instead critising the development because of our failure to regulate, govern and take corrective measures pro actively.

REPLY

manohar bayyaram

In Reply to Vikash Agarwal 4 years ago

Vikashji, i appreciate your view. My only concern is when a account holder walks-into bank the innocent investor is trapped to buy the fancied insurance policies and mutual fund schemes. Let the regulators put an end to this.

Ubaldo C DSouza

In Reply to Vikash Agarwal 4 years ago

You're right on! But regulating and taking corrective measures will be trodding on the toes of 'vested interests'. That is where the problem lies.

SuchindranathAiyerS

4 years ago

I like the convenience of being able to purchase financial products through my Bank. As for the reputational risks, that is what needs to be addressed rather than the business itself. The shabby, unregulated way, in which Banks accept, for the purpose of lending or investment, deposits of money from the public, repayable on demand or otherwise, by cheque, draft order or otherwise, endangers the reputation of Banks too.Particularly with knee jerk panic measures introduced by India's idiotic "governance" Should Banking be put an end to?

REPLY

Ubaldo C DSouza

In Reply to SuchindranathAiyerS 4 years ago

Certainly not! But it appears that "India's idiotic governance" is incapable of regulating its institutions, something akin to parents being unable to control the children they beget. If all was well controlled and regulated as it should have been, these issues which we spend so much time in dissecting and bisecting would not have been there. But it is also to be remembered that when compliance is sought to be implemented and enforced, 'vested interests' raise their ugly head and it is the common non-crooked aam admi who picks up the tab.

Vikash Agarwal

4 years ago

Guys... pls understand the issue correctly, there is no harm in banks selling third party product, provided they understand clients risk profile, offer them advisory services purely based on their portfolio, long term financial planning and financial goals in life. The issue of mis selling comes only when greed among clients overlap their risk profile and banks fill the gap by offering high commission products without understanding clients actual requirement and their risk profile. Hence, we should be asking the regulator to come out with guidelines for banks who are interested to sell TP products with proper due deligence, transparent practices, proper risk assessment by competent staff (with due certifications etc) and relevent disclosures.

manohar bayyaram

4 years ago

GOOD MOVE : Innocent Bank Account Holders will be saved from the Banks mis-selling. They have ruined the hard earned money of the small investors, there are many instances where the banks lured the account holders to withdraw the money from the fixed deposits and buy endowment policies of the insurance companies. Let the Bank do at what they are good at i.e. debit credit not more than that.

Dekho ji.com

4 years ago

Yes, 100% agreed. When banks start selling other products, this leads to huge mis-selling opportunities in the name of targets set by the bank's management. Ask any banker and he will tell you how their boss and management force them to sell these unknown products. Even 12th pass kids are being employed by banks these days to sell insurance and stock market linked products. Providing insurance (money/life/etc) should be duty of the govt and private industry should be kept out of this business completely.

Naresh Nayak

4 years ago

Finally the regulator gets it right. Banks cannot sell third party products. Full stop. Universal banking which was touted by Chuck Prince of Citi and K V Kamath of ICICI in India has turned out to be a conflict of interest model. Chuck Prince himself today is against Universal Banking as a model.

So when is the RBI going to get the bank license granting right? NBFCs which are meeting all prudential norms and are sufficiently large should be compulsorily made into banks first, the rest should not get greenfield licenses. They should first qualify the minimum grade of portfolio quality, wide distribution of branches, capital adequacy and reputation with various stakeholders and then the branch licenses should be granted.

http://nareshnayak.wordpress.com

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