You have to hand it to this company. The name itself—Rose Valley Chain Marketing System Ltd—makes it clear that the outfit is neck-deep in multi-level marketing schemes. And insurance is part of its arsenal.
The company, certified by the Insurance Regulatory & Development Authority (IRDA) is a corporate agent of the Life Insurance Corporation of India (LIC) since 2002 and has six lakh foot soldiers pushing various insurance policies across India.
Moneylife had reported earlier (http://www.moneylife.in/article/8/5371.html) on how according to Section (42) of the Insurance Act, 1938, appointing sub-agents and passing on commission or kickbacks is prohibited. When we had approached the insurance regulator on the proliferation of various MLM insurance schemes, along with the details, IRDA's executive director A Giridhar had told Moneylife, “Selling insurance through unlicensed persons is illegal and we will act on the information provided by you.” In addition, IRDA certification is mandatory for selling insurance products.
But here is an example of a company that does not even find it necessary to cloak its insurance MLM business—its name itself is a dead giveaway.
The model operates as follows—a sales executive has to achieve a target of Rs40,000 within 12 months. This is the joining stage. At the 18th rank, a sales executive ‘graduates’ to become a ‘Development Advisor Group 3’.
The products being peddled include LIC policies, along with fixed deposits and recurring deposits of Rose Valley.
A sales executive does not have to pass an IRDA examination, says an official from the company, which is in express violation of the rules.
The official from Rose Valley said, “Once you reach a certain level, you don’t have to work any more; you can earn commission bought by your chain.”
The brochure also says that a ‘marketing executive’ can also recruit a maximum of 15 sales executives.
At the first stage, the annual target is Rs40,000 and at the final stage (the 18th rank) the target is Rs20 crore. This target also includes the business achieved from the lower chain(s).
The group is a huge conglomerate with its finger in many pies. It has interests in real estate, hospitality, retail, broadcasting and IT education & training.
According to the company official, the group is also looking at entering the housing finance loan segment.
The projects comprise construction and upgradation of highways in eight states, including Haryana, Uttar Pradesh, Andhra Pradesh and Bihar
The National Highways Authority of India board on Monday cleared eight road projects worth Rs6,500 crore for construction and upgradation of highways in eight states, including Haryana, Uttar Pradesh, Andhra Pradesh and Bihar, reports PTI.
"The projects cleared by the NHAI board include six- laning of 179 km of the Delhi-Agra section on National Highway No. 2 in Haryana and Uttar Pradesh," a road ministry official said.
"The construction of the Delhi-Agra section will entail an investment of Rs1,928.22 crore and will be built under the National Highways Development Project (NHDP) phase V on a build, operate and transfer (BOT) basis," the official added.
The board, comprising road secretary Brahm Dutt and NHAI chairman Brijeshwar Singh, among others, agreed on a concession period of 26 years for the project.
The board also approved six-laning of a 183 km section of National Highway No 5 in Andhra Pradesh at an expenditure of Rs 1,535 crore.
The other projects are in the states of Bihar, Orissa, Maharashtra, Madhya Pradesh and Chhattisgarh.
BoR plunged into a crisis early this year after the RBI slapped a Rs25-lakh fine on the bank for alleged violation of various norms
Trouble-torn Bank of Rajasthan (BoR) today announced that it would merge with India's largest private sector lender ICICI Bank, reports PTI.
An agreement for amalgamation was reached today between ICICI Bank and BoR, which as per today's share price is valued at Rs1,500 crore.
BoR shares surged 20% to Rs99.50 following the development.
Bank of Rajasthan said in a notification to the stock exchanges that its controlling shareholders, the Tayal family, "have entered into an agreement on 18 May 2010, with the ICICI Bank for proposing an amalgamation of both."
BoR promoters, the Tayal family had recently run into regulatory trouble with the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) over its stake holding, which had risen contrary to the impression it conveyed.
The Tayal family has about 55% stake and it needs to bring it down to 10% to meet RBI guidelines.
The boards of both the banks met today on the merger.
BoR, one of the oldest private sector banks in the country, plunged into a crisis early this year after the RBI slapped a Rs25-lakh fine on the bank for alleged violation of various norms.
These include irregularities in transactions and misrepresentation of documents, norms pertaining to anti-money laundering, Know Your Customer (KYC) and irregularities in the conduct of accounts of a corporate group.
RBI also appointed Deloitte Haskins and Sells to conduct a special audit of the bank, which recently submitted its interim report to the central bank.
In March, SEBI banned 100 entities including Tayal Group firms from all stock market-related activities for fraudulently hiking the promoter holding in the bank, while conveying the impression that they were reducing their shareholding.
Incepted in 1943, BoR has a network of over 463 branches and a customer-base of over 20 lakh. In the December quarter, the bank's net profit declined to Rs44.7 crore as against Rs49.21 crore in the year-ago period while its total income dropped to Rs373.7 crore from Rs419.8 crore.
ICICI Bank has a network of over 2,000 branches.