Law minister Salman Khurshid assured UK's Secretary of State for Justice Kenneth Clarke that New Delhi will put the issue on fast track and give decisions quickly. UK is one of the several countries pressing for entry of their legal firms in India
New Delhi: Indicating that the government will soon take a decision on the issue of allowing foreign law firms to operate in India, law minister Salman Khurshid today said the concerns of the Bar will be addressed before taking a final call, reports PTI.
Perhaps in his first public remarks on the issue after he assumed charge of law minister in July this year, Mr Khurshid said there were 'some concerns' which needed to be addressed before taking a decision.
"Of course there are some issues that have to be addressed. There are some perceptions that are to be addressed more than the issues. There are some concerns that are to be addressed," he said addressing a seminar on UK-India cooperation on emerging legal issues here.
Mr Khurshid assured UK's Secretary of State for Justice Kenneth Clarke-present on the occasion-that New Delhi will "put your issues on the fast track" and give decisions quickly and "decisions which have quality".
He said two of his predecessors HR Bhardwaj and M Veerappa Moily have already delved on the issue in great detail.
UK is one of the several countries pressing for entry of their legal firms in India.
The minister said the government and the Bar were equally committed "to enhance the level of our cooperation and contribution in the most meaningful way for advancement of legal services in our two countries."
Besides some ongoing court cases on the issue, the Indian legal fraternity led by the Bar Council of India is opposed to the proposed move, fearing that they would not be able to compete with their foreign counterparts.
RMP Infotec promises income, real-estate grants and car loans for selling product kits and binary income for referrals, typical traits of MLM schemes. Now will this scheme be stopped in time?
Speak Asia, a Singapore-based multi-level marketing (MLM) company made national headlines after it duped several people by promising easy income, merely for filling surveys. Despite this, many such companies continue to flourish; targeting gullible investors as regulators seems to be cocooned in a bubble.
One such company is RMP Infotec. Its business model is typical of any MLM company. It promises huge returns on buying its product kit and becoming a distributor by introducing two more investors to buy the same kits. The company is registered in Chennai and claims income on selling product kits and promises binary income.
The product kit costs between Rs6,990 to Rs48,000. The products range from energy-savers, vacuum cleaners and microwaves—to clothes and laptops. For instance, a kit named 'RMPEnergx+SuitLenght+Bio Energiser' includes a single-phase energy saver, premium length suit and a 'nano' health card. Surprisingly, its most expensive product is rated at Rs48,000, named as 'RMP Green City'—this claims that a plot of 1,200 square feet at Kancheepuram (known for its fabulous temples) near Chennai, will be registered in your name. Further, it promises referral income of Rs48,000 after registration of the plot.
A distributor has to introduce two people directly in his first level. If any one of these two also sells one kit, then the original distributor is eligible for an incentive. The commission is calculated on a pair value (PV) binary basis. In this case, the distributor should have at least 150PV in the structure, with a minimum of 50PV on both sides. Thereafter, every package sale of a binary pair will receive 100PV (1PV=Rs10). The maximum payout per week for a distributor will be 13,000PV (130 pairs). The sales close by the midnight of every Friday. It is important to mention that there is 'trimming' applicable if necessary, to the returns. This 'trimming' obviously refers to a cap on the returns that a participant in this scheme can make.
Experts say that the company's business is nothing more than an MLM model which is unsustainable and is bound to fail. Interestingly, the 'Customer Care' icon at http://rmpinfotec.biz/Policy/policy.aspx (where the company tries to explain its business 'model'), is not working.
The company also claims to be into e-commerce, with various products sold at discounted rates. Here, each distributor is eligible for individual PV and up-line PV if the products are purchased. According to RMP, if a distributor achieves three continuous ceilings, he/she is eligible for a car loan of Rs1,00,000 as per company norms.
In fact, there are complaints against the company on consumer discussion forums on the Internet. "I have purchased an RMP Infotec product through my friend. It's (an) MLM type scheme and I have been cheated by it. I have purchased a water purifier and suit-length, etc., in 2009. But till date I just keep following up with them and nobody (from the company) reverts on the issue," reads a complaint on www.consumercomplaints.in.
Another complaint says, "I had also applied for an RMP Nagar plot in Mangao (Maharashtra). Till now, I have not got possession and a registration letter from RMP Infotec. I had tried many times to contact it regarding this issue, but RMP does not give any positive reply to me, all the time." This complainant also says that whenever he tries calling the company, he gets an answer saying that the person he has contacted is not the right person, among other issues.
It is high time such companies are made to stop their activities-before the whole issue blows up once again, like the Speak Asia affair. Moneylife has been constantly arguing that there should be an outright ban on MLM or pyramid schemes, as a number of countries have done, but the powers-that-be don't seem to be interested in taking any action.
"Given the provisioning requirement for dual rate loans, it is unlikely that other financial institutions will come up with dual housing loan rates," Edelweiss Housing Finance (EHFL) executive vice-president Anil Kothuri commented
New Delhi: Unlike ICICI and HDFC, other banks and housing finance firms may not come out with schemes offering dual interest rate housing loans on the back of higher provisioning norms stipulated by the Reserve Bank of India (RBI) for such advances, reports PTI.
"Given the provisioning requirement for dual rate loans, it is unlikely that other financial institutions will come up with dual housing loan rates," Edelweiss Housing Finance (EHFL) executive vice-president Anil Kothuri told PTI.
EHFL, which launched a dual interest rate housing loan plan about two weeks ago, is considering a review of the scheme, he added.
Early this month, ICICI Bank and HDFC came out with dual rate schemes with an eye on garnering a bigger slice of the housing loan market. As per their schemes, the interest rate is fixed for the first 2-5 years and subsequently, it is linked to the banks' respective base rates.
The RBI has fixed an additional 2% standard asset provisioning norm for dual rate loans (popularly known as teaser loans).
Subsequently, the largest lender, SBI, discontinued its popular teaser loan scheme.
Canara Bank executive director Archana S Bhargava said her bank also has no plans to float dual interest rate loan schemes.
"Canara Bank has no such plans as the provisioning requirements for such loans are pretty high. We will rather give concessions or exempt customers from certain kind of charges to attract more customers," she said.
Industry experts, too, opined that the higher provisioning norms-which entail more funds being set aside to deal with defaults-are putting pressure on the margins of lenders.
"As margins on the dual rate home loans shrinks due to present provisioning norms, it will depend on individual banks or housing finance companies to take a call on this matter," Shweta Jain, a director with real estate research firm Cushman & Wakefield said.