Funds Performers
Which equity scheme will outperform, especially if the market remains subdued or even goes down, given high current valuations? Nobody really knows for sure. Can we make an educated guess? This is what we have done in this Cover Story. We have applied the same financial metrics, that we normally use, to rank stocks to the portfolio of top 15 mutual fund schemes, to test the quality of stocks in the top schemes’ portfolio. Apart from this, we rated the portfolio based on cash levels, keeping in mind the high market valuation. Turn to page 26 to find out the results of this exercise.
 
On a similar note, if one has access to a method of picking quality stocks, should one invest in equity mutual funds? R Balakrishnan, in his article, asserts that shares of high-quality companies will give better return than equity mutual funds, a point we agree with more and more, especially given how high the expense ratios of funds are headed.
 
Poor customer service by banks continues. Taxpayers bear the brunt of repeated recapitalisation of public sector banks and, in turn, banks too find way to charge customers through a variety of essential services to cover up for their bad loans. Sucheta, in her Crosshairs column, discusses these issues. In the second part, she discusses the Realty Bill and the impact it would have on homebuyers.
 
In her Different Strokes column, Sucheta questions whether the black money law will really work. Would it succeed in getting people to bring back unaccounted overseas money when all previous efforts have failed in the past? The government firstly needs to create public confidence that it is serious about eliminating corruption that generates black money continuously.
 
Moneylife Foundation plans to start the process of a public discussion on the black money issue with a talk by Dr Subramanian Swamy on 24th April. Don’t miss this because Dr Swamy is a great speaker with amazing clarity on economic issues. To register visit – moneylife.in/reg-event/97.html

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Fortnightly Market View: Fresh Dose for the Bulls
Moody’s revises rating; bulls rejuvenated
 
In the previous issue, I had suggested...
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A one-rupee mystery at National Insurance Company
A difference of one rupee pops up between the premium mentioned in National Insurance's renewal notice and the one that appears on the cashier's screen after feeding the policy data
 
Policyholders and agents of government owned National Insurance Company Ltd. are facing what they call as the `one-rupee mystery', or `Re.1 conundrum', say agents and company officials.
 
"A difference of Re.1 pops up between the premium mentioned in the company's renewal notice and the one that appears on the cashier's screen after feeding the policy data," an employee on the condition of anonymity told IANS.
 
"I always ask my clients to add up Re.1 to the premium stated in the renewal notice while they write out the cheque," an agent told IANS.
 
The problem is faced by policyholders/agents in most of the branches where the company has installed the core insurance solution (CIS) developed by a Chinese company called eBaoTech Corporation and being implemented by HCL Technologies since 2011.
 
This is yet another problem with National Insurance Company's software systems apart from the non-availability of the systems for hours and even days together, officials at several offices told IANS.
 
"The top management, though aware of the issue, is not taking any corrective action. The core insurance solution was first implemented in one office in Chennai in 2011. Now it is 2015, still the solution has not been rolled out across the company," an agent told IANS preferring anonymity.
 
In 2009, HCL Technologies Ltd. announced that it had signed a Rs.393 crore, seven year end-to-end information technology (IT) services engagement with National Insurance.
 
A detailed list of questions e-mailed by IANS to HCL Technologies' corporate communication officials several days ago remains unacknowledged till date.
 
In response to the list of questions sent to eBaoTech Corporation, a person named Anand, claiming to be an employee of the Chinese company in India, had called IANS to check out the reasons for the questionnaire.
 
However, the questions remain unanswered by eBaoTech Corporation.
 
Officials working at the operating offices are not aware as to why this is happening-whether it is due to bug in the software or due to rounding of the premium decimals at different levels.
 
"We are not able to see the premium worksheet to know why this is happening. The premium worksheet facility is not working," an official said.
 
The problem has been flagged off by several offices but nothing seems to be happening to correct the problem, the official said.
 
According to a company staffer, their office books premium as calculated by their old software called Genisys and the excess amount is adjusted at appropriate column.
 
The Re.1 conundrum would take a serious turn if a policyholder sends the renewal premium cheque by post/courier.
 
In such cases, there is a risk of break-in insurance coverage as the premium would not be booked till the difference is made good.
 
The break-in insurance coverage will be risky in the case of vehicle and health insurance.
 
In the case of some policies, the premium difference between the old and the new software systems will be even Rs.3.
 
"Taking into account the interest of our clients I pay the difference out of my pocket. At an average I pay out around Rs.10 like this and who will compensate me the loss," the agent further told IANS.
 
At the time of announcing the multi-crore deal, the HCL Technologies said during the seven-year engagement it will be responsible for setting up and managing a new enterprise wide IT landscape for National Insurance.
 
This will cover business process re-engineering, application blueprinting and roll out of 19 applications, systems integration and management services across data centre, networks, security and helpdesk services spanning over 1,034 branches and 10,000 end-users across the country, the HCL Technologies then said.
 
According to National Insurance officials, the roll out is not even complete in the southern states.
 
As per the website of eBaoTech Corporation, the Indian insurer selected HCL Technologies as its implementation partner together with eBaoTech GeneralSystem as its core policy administration system in October 2008 to support motor, marine, fire, engineering and all other general insurance lines of business.
 
Phase one of the project went live in November 2011. The second implementation phase to roll out eBaoTech GeneralSystem to National Insurance's 1,000 branches is underway.
 
If one goes by the statement issued by HCL Technologies in 2009, the seven-year deal ends next year. It would be interesting to see how the government decides on the matter.
 
Meanwhile, "system down, come tomorrow" is one common refrain that policy-holders continue to hear from the insurer's officials.
 
Top officials of the insurer declined to comment on the matter when contacted by IANS.

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COMMENTS

Dr. Rakesh Goyal

2 years ago

This happens, when computerisation is done without proper planning and well defined global best-practice procurement process. This best-practice is not the sarkari or DGS&D type procurement procedures. How many organisations and their CMDs really know this process? Further, in case of PSUs, L1 process makes sure to deliver "not-the-best" one. Further, other considerations can not be ruled out.

This is one more proof of Chinese quality. ;-)).

Very high risk exist that National Insurance and their policy holder's data is being copied/replicated on Chinese servers.

PATTABHI

2 years ago

Many such bugs and goof-ups haunt our SBI Core Banking Systems as well, but these are getting sorted out thanks to a few Bank Officials in Belapur who appreciate the need for customer friendly systems..

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