GAIL launches integrated gas management system

GAIL has launched Asia’s first integrated gas management system to track all information on transmission and distribution of natural gas in the country

GAIL (India) Ltd has launched Asia's first integrated gas management system to track all information on transmission and distribution of natural gas in the country.

The SAP (application)-based gas management system, third of its kind in the world after Petrobras in Brazil and Pemex in Mexico, was launched at GAIL's corporate office in New Delhi by the Minister of State for Petroleum and Natural Gas, RPN Singh, a company statement said.

"The gas management system will put an integrated and enterprise-wide system in place, covering GAIL's entire pipeline network," it said. All the information related to commercial transactions like gas volume, calorific value, consumption of gas, value of gas consumed, nominated quantity of the gas delivered, transmission tariff, price of gas, other costs and applicable taxes will be available on a real time basis.

"The system will help in monitoring operational aspects of the pipeline on a real time basis including information regarding network utilisation, gas sales, volume transferred, revenue generation through gas sales and price variations," the statement said.

It will facilitate online invoicing which could be downloaded at customers' end from the GMS portal directly, thus enabling better customer service and faster realisation.

At present, the gas utility operates over 8,000km of trunk gas pipeline network in the country with a capacity to transport 160 million standard cubic meters per day of gas.

The company is implementing projects to add another 6,700km of pipeline at an investment of Rs30,000 crore over the next two years. This will enhance the transmission capacity to around 300 mmscmd and enable GAIL to reach out to customers in 16 states.  On Friday, GAIL ended 0.33% down at Rs463.45 on the Bombay Stock Exchange, while the benchmark declined 0.13% to 19,420.39.

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Selling is not a bad word

Mis-selling of financial services was rampant a few years back, the regulators tried to strike back… but the implementation of these regulations has been tardy, and the reputation of advisors is now being tarnished

It might surprise you that I am a personal financial advisor, a species which is getting extinct fast. I was doing reasonably well in my BPO career, till I decided to move into personal finance, which has always been close to my heart.

It was not forced on me by circumstances. Like so many other souls, I too have been inspired by the wit and wisdom of Warren Buffett. I believe in his view that doing what one loves is the ultimate luxury and a person's standard of living is not equal to his cost of living.

In other professions, to survive, you need to sell your services. While in personal finance, you need to sell both your services and products.

Some years ago, mis-selling was rampant. People who sold certain products like ULIPs (unit-linked insurance plans) or close-ended NFOs (new fund offers) made more money in a month than what some one else of the same calibre would take atleast a year to earn through a salary.

The mis-selling was unethical although not illegal, because all these products were cleared by the regulatory authorities! Then, suddenly, a lot of action was taken to curb mis-selling. At best I can say that the intention was good, but the implementation was lousy.

Again, I wonder, why create a product structure, or environment, that creates mis-selling, and then go to the other extreme of making a livelihood through selling itself difficult. I think we like to swing between two extremes-mis-selling and no selling. Not only that, selling itself has suddenly become a bad word.

Selling is not a bad word. Mis-selling is. The whole world revolves around buying and selling. In the regulatory zeal to eliminate mis-selling, selling itself is being eliminated. This, however, is valid logic! There cannot be any mis-selling if we abolish selling altogether.

I come across many advisors who are ethical but are pushed to the point where they are now feeling guilty about the word 'sales'. The repeated emphasis we keep hearing from sections of the media is that selling financial products is bad. I'm curious. Like everyone else, the media too sell themselves, right? Then why this advisor-bashing, that advisors should not sell?

Without monetary incentives, why should someone take the pain to take the product to the customer and service him? If the expectation from regulators or sections of the media is that advisors should not look at financial incentives, then this profession can be left only to enlightened souls, if there are any, and if they are keen to take up this job.

Next to banks, in financial services, only Life Insurance Corporation of India (LIC) is able to penetrate across different geographies and income groups. Ignoring the fact for the moment, whether combining insurance and investment is wiser, this reach is made possible only because of LIC's sales force.

The irony is that despite this success, the life insurance penetration in India is barely 4%. It is reported that only 1% of Indians have medical insurance coverage. Around 1% of the population invests in capital markets, both through mutual funds and the direct equity route. The abysmal 1% again!

I read that equity as a percentage of household savings has actually come down in the last 15 years. If you remove the mark-to-market effect, I don't think the equity corpus of mutual funds have grown at all during the past decade.

This contradicts the claim that the National Stock Exchange (NSE) and National Securities Depository Ltd (NSDL) have made big inroads and achieved penetration. They are not able to reach with technological power what LIC has done with its human power.

Though I have a vested interest in saying this, human interface and long term relationship gives more comfort to people while dealing with their money. Technology can complement, but cannot substitute the human factor.

Now NSDL is campaigning that 'demat'ing the mutual fund units which are already in demat form is the next best thing that can happen to investors. I'm amused by this concept of demating a mere account statement. Extending the same logic, the demat statement issued by DPs (depository participants) also needs to be demated. Does this sound illogical? There is no difference between an account statement and a demat statement. Both merely indicate your holdings and are not the certificate of your holdings. NSDL can try doing something meaningful.

Our focus should now be to increase the reach of financial services and products. How to bring 350 million people into the system? The rest of the 850 million are simply forgotten ones and cease to exist except at the time of elections. I've to write a separate piece about them.

We should be giving as much focus to development as we give to regulation. Otherwise there would not be anything much left to regulate. Continuously trying to regulate without any efforts to develop would amuse even Mohammed Bin Thuglak.

Since so much is spoken about lack of employment opportunities in this country, why cannot we create around 1 million advisors who would take products and services across India to all income groups?

A proper incentive structure is a must. Incentive includes reward for good behaviour and a penalty for bad shows. An advisor should have confidence that he can make a living out of selling products and services. Otherwise no one would want to take up this profession.

There is a line of argument-"why not make advisory a fee-only profession?" A noble thought indeed. If practical, this is a better way to service customers so that there is no suspicion of conflict of interest. However noble intentions ought to be checked with ground reality.

People like you, who read personal finance portals, informed investors, NRIs, HNIs-who are willing to pay for the value received, are an insignificant portion of the current investible population, which itself, as seen above, is next to nothing.

The huge segment of population which needs to be brought inside, does not belong to the above category and is not confined to the financial hub like Mumbai or other metros and Tier I cities. They are spread across innumerable cities and towns.

My opinion is that the general Indian mindset is to prefer inbuilt pricing rather than paying separately. Even in the case of mutual funds, inbuilt transparent pricing which encourages long-term investments is far better than re-introduction of entry load or variable load. Relationship managers at institutions, by the very nature of their job profile which focuses on short-term targets and performances, may be tempted to misuse this.

Insurance products and small savings have always had inbuilt pricing models. There is no such thing as a separate load or advisor charges. Of course, insurance companies need to work a lot more on bringing in transparency related to pricing.

People who talk about replicating a US model in India should compare the financial awareness and product penetration levels between both the countries.
Simply aping the west without considering local realities would ensure that the growth remains stunted.

Someone may argue, aren't people paying doctors? People consider the medical profession as essential or critical. Do people consider personal financial advisory as essential as medical advice? I leave it to Moneylife readers to decide.

Another profession which is cited as an example is that of an auditor. Speaking about chartered accountants, it has been made legally mandatory on various fronts to avail their services. It is not so for a personal financial advisor. So the comparison is not appropriate.

Like any other profession, grey areas exist even in medical practice and the auditing profession. Not that every one there may be making money purely through professional advice.

I'm not against regulations. Only an ignorant man would expect people to act perfectly without any checks and balances in place. As I said earlier, let us also give at least equal importance to development.

The motto for every advisor should be, in the words of Warren Buffett: 'I don't want to be on the other side of the table from the customer. I never was selling anything I didn't believe in myself or own myself'.

(The author is a Chennai-based Certified Financial Planner)

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COMMENTS

nishi rotkar

6 years ago

hats off to D.Mutukrishnan

this article says, what an every ifa want to say, in very decent manner.

masterpiece article.
printout of this article should be given to every officer in SEBI, who issues THGHALKI orders in every few days.

instead of giving ADs favouring stock brokers & stock exchanges, SEBI should publish such articles under investor awareness program.


Roopsingh

6 years ago

Dear friend-very good comprehensive article-but alas-no one from regulator side is ready to read or comment on this-because they have taken "SLEEPING PILLS manufactured by NSDL"-
let us see if new chief in SEBI office reads this and takes a new look to this burning topic of MF industry-
so far so much has been written by so many people in so many different words and so many emotions-(with anger,depression,advice etc etc)but none has worked so far-
the reasons are unknown-why regulator never listened or spoke on comments made in Moneylife-while other media players have played totally negative role for this-
GOD KNOWS WHY SO MUCH OF HARRASSMENT OF IFAs HAS BEEN DONE-
i have really lost the hope to get things in better shape now-

Muthu

6 years ago

One more reason why sections of media choose to bash advisors because there is no monetary benefit from them. Why can’t they speak about the manufacturers who design such products? Has it got something to do with the advertisement revenue?

As Mr.P.V.Subramanyam has written in his blog today, it is always a ‘sacrificial lamb’ (advisor) and never a ‘sacrificial lion or elephant’ (manufacturer).

Surender Singh

6 years ago

ULIP - The most mis-selling products is not banned in india.

But, now ULIP are available with guaranteed NAV returns; which will give even less returns than misselled regular ULIPs. And these plans are also cleared by the regulator with handsome incentive/commission for agents.

So, it is clear that Govt. Authorities and regulators want to sell only products, which can't give good returns to the investors of India.

Thanks & Regards
ARN-66056

Vivekanandam

6 years ago

The reach of mutual funds to the core population is only 1%; Insurance, an abysmal 4%. This shows the failure of the system to reach the masses. Instead of addressing these issues, the administration is indulging in witch-hunt and window-dressing.

Krishna Gopal Gupta

6 years ago

Very well said & made efforts to put the things straight in a simple way. But alas, this is not being appreciated by regulators who are themselves unregulated.

ashok sahewal

6 years ago

practical article.
should be published in leading newspaper.

PMNarayana BhaT

6 years ago

An apt article, bringing out the issues involved. This needs to be published in newspapers from the angle of investor education. The SEBI Chairman tried to become a hero without studying the subject plroperly. In many cases, door services are required to be given, besides assistance in updating investors on their existing investments, redemptions etc. It is impracticable ;to collect Rs.100 or 50 for such services here and there.

vivek

6 years ago

Excellent article by mr muthukrishnan.advisory is not a honorary profession and the regulators simply aping the west with 8 or 10% penetration of equity product is like a regulator without any work.

T K VANI

6 years ago

Excellent piece Mr.Muthu. the Indian mindset of not pyaing the advisor is also due to the fact that they have been always at the receiving end of passbacks from advisors when ever investments are made either LIC or Small savings.so when the advisor asks for advisory fee for a product perceived to be risky by them they are stunned and the product is shunned!

Sheshadri N

6 years ago

Life Insurance Corporation of India (LIC) is able to penetrate across different geographies and income groups...

I have a comment on this...is LIC not enjoying the unfair advantage.. All private insurance companies have to give illustrations to the customers and take a signature on the same. Now as per latest rules even the commission payable by the company to the advisor is to be printed on the same. Private insurance companies have to give policy document with all details and a copy of application form. but till date LIC is giving one Bond in a plastic cover. The details of the policy apart from premium amount and no of years premium has to be paid nothing else will be clear as far as a normal investor is concerned. Is there anyone to raise voice againest this....

REPLY

Ayush mehta

In Reply to Sheshadri N 6 years ago

Hello Sir, i have taken 2 life insurance policies from Aegon Religare and ICICI Pru in last november and Jan 2011. Neither of the companies gave me any any document other than the policy certificate.

Vivekanandam

In Reply to Ayush mehta 6 years ago

Ayush Mehta,
You may contact the concerned advisors,who sourced these policies from you, for whatever help you want. They will gladly oblige!

vsrinivasan

6 years ago

Regulators regulating one side activity of regulating only distributors. They are totally ignoring the AMC and registrars making lot of mistakes everyday every minute which is unmeasurable in numbers.

First of all we will have to educate public what is Mutual fund.

It is a mandatory on the part of AMC to give booklet to investors just like a users friendly model.

One common application form for all
AMC.for Equity, Debt and other products.

To involve more people to invest in
mutual funds depends up on the AMC and registrars just rejecting the application for want of some missing information. Not informing the investors in time.

when investor has give redemption to send it to Bank with their account number , MICR No, NEFT details why they should reject saying signature mis match. The investor is not asking you to give cheque. The investor asking you to send the cheque to his banker only.

If there is any mistake in the investors
details they you can withhold his redemption.

Investin in Mutual fund they have made easy but withdrawing money in time is a problem. Lot of my investors have not recd the payment in time.

High time AMC and registrars should act fast to solve the investors problem
especially when redemption given by investors. They shoud act fast solve the problem with in 48 hours. Then only people will have confidence in Mutual fund investments

sorry to make some comments.

You should see the reality.

with regards,

v.srinivasan. ARN-0668

REPLY

sheshadri

In Reply to vsrinivasan 6 years ago

Hi,

i do agree with this...this is really bad practice esp with the largest one...one more crap thing what most of the amc's does is if there is a redemption and NEFT is rejected for closure of account they send a cheque mentioning the same account number on the instrument. Investor has to run from pillar to post to get the same rectified and we IFA's cant do much help to investors in this issue

shankar

6 years ago

Excellent One.Hats off yo u....The regulatory board and Mr Ex Chairman of SEBI should read this and learn something free of cost as he wants every thing for free.....

K V Balaji

6 years ago

Excellent piece, Muthu.. I hope the regulators go through this & think about salvaging the Mf industry.
Thank you.

MCX launches futures trade contracts in 10 items

MCX has launched futures trading contracts in 10 commodities that would expiry in May and June

Leading commodity bourse MCX has launched futures trading contracts in 10 commodities that would expiry in May and June.

The exchange has made available futures trading contracts in gold guinea, aluminium, lead, tin, zinc, nickel, menthol, melted menthol flakes and kapasia khalli with effect from today, MCX said in a circular.

The contracts of the above mentioned nine commodities will mature in May and June, while the almond contract will expire in September, it added. The contract specification of these commodities would remain unchanged, the circular said.

Presently, MCX has the largest market share of 83% in the commodity futures market. The exchange made a business of Rs86.97 trillion in 2010 and expects to touch Rs100 trillion in the current calendar year.

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