Investor Issues
How to protect yourself from becoming a victim of mis-selling

Mis-selling is rampant in the financial services industry. While legislation may act as a shield in protecting the interests of investors, an investor can take care of the following aspects to minimize instances of mis-selling

I have come across many cases of mis-selling in the financial services industry but the Mangelal Sharma case came a shocker for me (Will this 79-year old’s protest move the government and the RBI to stop mis-selling by banks?, Mangelal Sharma gets his Rs7 lakh back—another Moneylife victory). This was a case in which even an old man was not spared. Banks and financial institutions claim that customers are king for them but in practice they rarely follow this. Why do we have so many cases of mis-selling of financial products?  Is mis-selling happening because there is dearth of legislations?  The answer to this question is both yes and no. Though there are legislations in place to prevent mis-selling, these legislations hardly help investors. Also investors in many cases are not aware about how to take benefit of existing laws when they have become victim of wrong financial products sold to them.
 

Whatever is the reason, there are instances of mis-selling in which people lose their hard-earned money and repent thereafter. While legislation may act as a shield in protecting interest of investors, is there any alternate way in which an investor can prevent himself/herself from becoming victim of mis-selling? Though there is no magic wand to help an investor, s/he can take care of following aspects to minimize instances of mis-selling:
 

Never buy a product aggressively pitched by agents: It is very obvious that an agent or a representative of financial service provider pitches a product based on the commission or fee that he earns. So it is better not to get carried away by what he suggests. You need to understand your investment requirements and select product based on that. One more important point, even if the agent happens to be a family friend, ask him questions. You cannot leave your investments in other’s hand. Products like life insurance are often mis-sold by agents as investment products. Please remember insurance is a product having potential to cover risks.
 

Never buy a product you do not understand: The golden rule to prevent mis-selling is not to buy a product unless you have understood the product fully. New products keep on hitting the market from time to time. The most recent example was the Rajiv Gandhi Equity Savings Scheme (RGESS). Many investors bought this product because of the fact that this is a good tax saving option, without realizing the risk factors. In past, there have been many instances when Unit Linked Insurance Plans (ULIPs) were sold to investors. The main reason of this mis-selling was lack of understanding of products by investors.
 

If you are financially illiterate, there are two options. Acquire necessary skills to understand a product or approach a financial advisor. To me the first option looks better. In India, most of the financial products are plain vanilla products which an ordinary investor can understand. The problem with financial advisors is that most of them offer generic suggestions.
 

Have a check list ready: In order to understand the product, you need to look at facts such as the risk and return aspects of the product. In order to understand product, you can check out some of the details which are as follows:
 

  • Is the return fixed or subject to market risks? Most of time variable return products are mis-sold as a fixed return product. Variable return products suit people who are ready to take risk. Also, remember higher the risk, higher the return is an erroneous statement, higher the risk, higher the expected return is practical.
  • If a particular return is promised, ask for it in writing. It can also be in the draft document. You can also ask for reference of assured return in the draft document. The seller will admit if the financial institution is not offering the same.
  • Is there a lock-in period in the product and what are the exit options? Some exit options are simply impractical like mutual funds available for trading on the stock exchange.
  • Carry out special check for hybrid products which has carry high prospects for mis-selling.
  • Is the product approved by a regulator?
  • Is the capital protected in the investment made by you?
  • What are the charges? Ask for all details.
  • If there is any fancy return in the product, ask for its working. Get it verified.
  • Do not trust projections. If somebody tells you that a mutual fund will provide 20% return in future, you need to investigate. Projection is not a child’s play and experts are proven wrong on this front every other day.
     

Keep greed aside:  Mis-selling is easy if greed overshadows rational thinking. Many people invest their money in unknown financial products without understanding the product at all, as the greed of handsome return simply overwhelms them. So it is important that you never invest in products which give unbelievable returns.
 

Never buy financial products when the deadline approaches:  If you are in hurry, you will have many worries later on. Never buy a financial product when the deadline approaches, especially the tax saving deadline. Think and plan in advance. Even if you have to buy any such product, buy conventional time-tested product such as PPF, NSC, etc.
 

Please note that you can mitigate the instances of mis-selling by becoming more vigilant and careful. Take care to ensure that you never buy what you don’t need. Preventive measures against mis-selling need to be inculcated over a period of time.
 

(Vivek Sharma has worked for 17 years in the stock market, debt market and banking. He is a post graduate in Economics and MBA in Finance. He writes on personal finance and economics and is invited as an expert on personal finance shows.)

User

COMMENTS

Suiketu Shah

4 years ago

In "hot to protect yrself from being a victim of mis-selling",I would add 2 suggestions to all readers of ml:-

1)Desist from ever contacting HDFC Bank for any investment related activities(and drive them off if tehy contact you unsolicited).Their head of equities-western region Parimal Shah(based in head office lower parel)is one of the most corrupt,cheat and frauds you wl find.He makes his staff sell shares to clients totally against what his company recommends(he wl not even give you monthyl recommendation of his bank) at very high prices where he earns illegal commission in cash.His cronies include people from HDFC securities like Naresh Rever and Chetan G Patel in their Kanjur marg office who donot even know how to draft 2 lines of english properly and who are only fit to be courier delivery boys,nothing more.

2)Only read moneylife for sound knowledge on equities and how to grow yr money stres-fre.Ask me I have been doign so for 16 months and am such a happy investor now.

Suiketu Shah

4 years ago

Main job of "wealth management companies" is to convert black into white.If you are one of those who has all white,best is to rely only on moneylife for sound advise,noone else.

Fact of the matetr is the RM's of wealth management companies are also totally black with fake designations liek directors etc where they are not even manager level.Stay far far away from wealth management companies.

Sachin

4 years ago

When agents can sell insurance as Fixed Deposit, anything can happen in India? Moneylife is doing a good job in educating public.

REPLY

Suiketu Shah

In Reply to Sachin 4 years ago

Agree totally.For instance Diwali 2012,I was heavily pressurised by Chetan G Patel of HDFC Sec(who doesnot even know how to talk proper english) to buying Gold mutual funds.I read moneylife's entire report on gold and declined.He kept pressurising me under his boss Parimal Shah's instructions saying it wl give a return of 30% in 1 yr.We are 7 months port-Diwali,gold has dropped more than 15% since then.

Goes to prove that when HDFC Bank can indulge in such heavy duty pressure tactics to attempt to fool clients,one cannot trust anyone except moneylife for correct sound advise.Moneylife's latest article on gold 1 week ago is a masterpiece for any investor/reader/potential investor.

Nilesh KAMERKAR

In Reply to Suiketu Shah 4 years ago

Dear Mr. Suiketu Shah,

Please check this link out. Specially request you also to read the only comment below the article.

http://www.moneylife.in/article/rbi-fina...

Not all advice is bad . . .

Suiketu Shah

In Reply to Nilesh KAMERKAR 4 years ago

Dear Mr Kamerkar

Thanks yr article.Kindly note what I am highlighting is how fraudulent wealth management companies of the reupte of HDFC are almost forcing peoiple to buy at sky high prices.No wonder HDFC Insurance leads the pack (far far ahead) for insurance misselling at 330000 odd complaints last financial yr.The next company was at 21,000-hdfc bank is so so far ahead in fooling clients.

I stick by my statement that paid advise (like hdfc bank parimal shah) doesnot mean its good,its worst that free advice.

Moneylife is the only authentic source for reliable info.

Suiketu Shah

4 years ago

Another tactic of fraud wealth management companies(WMC) is to make customers buy 1 out fo 5 "broker driven shares" which retail investors donot buy and for which they get hugh illegal cashcommission.These fraud WMC wl then say 1/5 mistake is allowed as noone is perfect and such nonsense.

As has been said on moneylife,there are out of 5000 shares on bse,barely 200 which are worth investing in when the prices fall.Rest are not worth studying or examining at all for retail investors.

REPLY

Suiketu Shah

In Reply to Suiketu Shah 4 years ago

another tactic used by wealth management companies for fooling investors into Z grade shares is by mixing "market" calls with their own recommendations esp when investor is short of time.And when the recommended stock falls and one finds its not in the banks buying list,the fraud Rm of wealth management division of bank wl say "its a market call".Every wealth management company does this so they can earn illegal cash commission and their bank makes super commission from the Z grade rapidly falling stock.

rajivahuja

4 years ago

I fully agree with the points mentioned above,

REPLY

Suiketu Shah

In Reply to rajivahuja 4 years ago

Another tactic of fraud wealth management companies is to give a target price of selling of a share with the intent to buy now.They wl not give the time frame for the target to be achieved.For example,what is the point of buying Bharti with a target of Rs 410(Rs 320/- app now) if it takes 2.5 yrs ie app 12% /yr returns.

There are several more promising companies(with much much higher returns) in equities as one casn see from kensource list of medium and long term returns.

sivasankaran

4 years ago

sir,
the article is an eye opener who rush to invest motivated by greed.a good one it will guide people from the clutches of mis selling advisors/agents

Sudheer M

4 years ago

As usual, a very good stuff from you, Vivek.

A few more points based on the experiences from my friends/relatives:

1. Check the sentences properly. An assured return of 18% promised may not be 18% per annum, but 18% one time.
2. Read the form carefully and fill it yourself and don't get the "guidance" from the advisor like "just sign sir".
3. Even if the agent gives you in writing, check whether is issued by agent himself or by the company. (I have seen many cases where fly by night agents come up with their own pamphlets which promise the moon)

And the basic motto, "If you feel that something is unrealistic, it actually is".

Suiketu Shah

4 years ago

Wonderful article.What frauds do these days is make you buy a well-known and reputed company's share but at a very high price.Be very cautious about this ploy as it applies to mutual funds also.

You wl remain locked in thsi share/mutual funds for several yrs and hopefully get yr money back at the end of several yrs.Wealth management companies specialise in this ploy and the excuse they offer is nonsense like "noone can time the market".

Did HSBC Bank resort to toxic churning and illegitimate transactions to earn commissions?

Two complaints of high net worth individuals have shown that the bank has possibly flouted rules and taken signatures on blank forms to execute transactions to churn the mutual fund portfolio and earn huge commissions

Over a year back we wrote about how HSBC Bank took Ms Suchitra Krishnamoorthi, a well-known singer and actor, for a ride over a five-year period by promising an extravagant assured return of 24% from mutual funds as well as insurance. (Read: HSBC loots Suchitra Krishnamoorthi after big promises of 24% returns) However, far from delivering such returns HSBC Bank continuously churned her portfolio. In a similar case, another high net worth individual (HNI) based in London, found out abnormal churning of mutual funds in his portfolio that was managed by HSBC bank. Both are HNIs who were made to sign a power of attorney (POA) in favour of HSBC to handle their investments smartly. They believed in the brand name of HSBC. Most importantly they trusted their banker, like they would trust their doctor.

 

Moneylife has reviewed  Ms Krishnamoorthi’s mutual fund transactions and found massive malpractices by HSBC

 

  • Her mutual fund portfolio was continuously churned resulting in high transaction costs in the form of entry load and exit loads. While several transactions led to huge losses for her, HSBC was the gainer of commissions.
     
  • Out of the 75 transactions made, nearly 60% of the transactions were in equity schemes kept for a period less than one year. Here investments were made in schemes like HSBC India Opportunity Fund and HSBC Mid-cap Equity Fund, both of which have been underperformers. Apart from these, majority of the investments were made in balanced schemes of HDFC Mutual Fund, ICICI Mutual Fund and Sundaram Mutual Fund.
     
  • The worst part of the transactions came around the market peak in November 2007 where nearly Rs3 crore was invested across five schemes on a single day which included over Rs1.67 crore invested in three sector schemes—ICICI Prudential Infrastructure Fund, Sundaram CAPEX Opportunities and Reliance Diversified Power Sector. Nearly Rs50 lakh was invested in Sundaram CAPEX Opportunities which has a current corpus Rs200 crore.
     
  • The investments from all sector schemes were withdrawn between June and August 2010 at a loss of nearly Rs40 lakh, almost half her initial investment. The schemes from ICICI Mutual Fund and Sundaram Mutual Fund went down by nearly 50%. The other schemes were also withdrawn at a value 15%-30% lower resulting in a total loss of Rs86 lakh. These schemes included JP Morgan India Equity Fund (a poorly-performing scheme) and IDFC Premier Equity Fund.
     
  • Surprisingly, in the whole portfolio there was not a single debt scheme and just one liquid scheme— HSBC Cash Fund. Ironically, commissions paid on debt schemes and liquid schemes are much lower.
     
  • Ms Krishnamoorthi says an entry load amounting to over Rs29 lakh was deducted from her investments. If the bank had opted to only invest her amount of Rs3.60 crore in performing equity schemes for the long term, without any further buying or selling, the entry load of 2% at that time would have worked out to just Rs7.20 lakh.

    Similarly, when the NRI investor examined his portfolio managed by HSBC, it was found that there was continuous buying and selling without any cogent reason. The value of the portfolio was unnecessarily eroded because of payment of exit load.

 

According to data from mutual fund industry association AMFI, for FY11 and FY12 HSBC earned the highest mutual fund commissions amongst all distributors. In FY11 it earned a commission of Rs118.97 crore and in FY12 it earned a commission of Rs153.98 crore even when the industry was down in the dumps. Another bank just below HSBC in terms of commissions earned is, not surprisingly, HDFC Bank.

 

The modus operandi for HSBC in both the cases has been a continuous churning by the “portfolio management service” by taking a power of attorney (POA) and used pre-signed blank letter of intents (LOIs) to execute the transactions on behalf of the clients. The London-based NRI mentions that he was asked to sign blank LOIs. On asking the bank to provide copies of the LOIs, he found that certain forms were not signed by him due to a mis-match in signature. He has even provided forensic evidence to prove that he has not signed on certain documents.

 

In Ms Krishnamoorthi’s case, she says “LOI’s provided by the bank to me clearly show that investments were made without my corresponding signature or mandate to every debit made by them in my account as is the lawful requirement. In fact inspite of my repeated requests they have refused to provide me copies of LOI’s between 2008 and 2010 – the period in which I incurred maximum loses and my portfolio repeatedly reshuffled without my knowledge or consent”.

 

Ms Krishnamoorthi in her letter to the banking ombudsman mentions that on seeing around Rs3.60 crore being deposited to her account (as a part of a divorce settlement), “HSBC bank approached me with a proposal that they could handle my investments. Since I hold such large balances, for the same they should be appointed as portfolio managers to handle my investments. They even showed me a very rosy picture of investments which they had made for others and assured me that they would get better returns for me.” The officers of HSBC Bank also informed her that “portfolio management is one of the prime businesses of HSBC Bank other than banking” and assured her “a minimum of 24% p.a. return” on her investments. However, following her complaint to the to officials of the bank she said that “HSBC Bank now claims that they have not acted as portfolio managers but merely advised me on the management of my wealth.”

 

Ms Krishnmoorthi refutes this saying, “This is a false claim as they have clearly performed the duties of portfolio managers as stated by law and as per the power of attorney obtained from me in 2004.” Apart from mis-handling of her investment portfolio, the bank mis-sold her insurance products promising 24% returns, insisting her on taking a loan instead of withdrawing funds without even disclosing that she was entitled for a smart loan.

 

As we have mentioned several times in the past, scamming bankers (now being called banksters) look to earn for themselves the highest commission no matter that the investment would terrible for the clients. Recently, we reported on the how senior citizen Maganlal Sharma was duped by his bank into purchasing a mutual fund scheme.  (Read: Mangelal Sharma gets his Rs7 lakh back—another Moneylife victory) Thanks to Moneylife’s efforts, he got back his money; however, others are not so fortunate. Moneylife Foundation recently wrote to the Reserve Bank of India (RBI) on the mis-selling by banks. (Read: Moneylife Foundation memorandum to RBI on mis-selling by banks) If you have been a victim of mis-selling by banks do mail your complaints to us at foundation@moneylife.in

 

But another striking irregularity has emerged as per the findings as brought to our notice by the other investor is that HSBC Bank was merely acting as portfolio managers and in fact may not have any regulatory authorisation. Not surprisingly, the illegal transactions have earned the bank huge commissions. When the London-based HNI sought legal advice into to this matter with two separate law firms, they mentioned that HSBC Bank has not complied with the portfolio management service (PMS) regulations as laid down by the Securities and Exchange Board of India (SEBI). In order to manage funds or even advice clients the bank was required to obtain a portfolio manager’s license from SEBI.

 

Even though HSBC has taken a POA to indemnify itself, one of the law firms mention that the bank is still not authorised to provide such portfolio management or advisory service. Along with this, HSBC Bank has not complied with other regulations according to the law firm.

User

COMMENTS

Michael Mason-Mahon

4 years ago

To Mr Raghuram Rajan the new Governor of the Reserve Bank of India and USA District Court Judge John Gleeson

Mr Raghuram Rajan has the perfect academic pedigree and, as a financial economist, strong market credentials

Before reading anything about HSBC, people should go to youtube: 1) How HSBC Chairman Mr Flint lied to shareholders. 2) Protest against HSBC in Mumbai. 3) Help Stop Bankers Cheating

Will Mr Raghuram Rajan the new Governor of the Reserve Bank of India, summon Mr Stuart Milne the CEO of The Hongkong and Shanghai Banking Corporation Limited in India to explain the illegal and criminal behaviour being committed by The Hongkong and Shanghai Banking Corporation Limited in India .

Will Mr Raghuram Rajan take note of just how much the behaviour of The Hongkong and Shanghai Banking Corporation Limited in India is hurting the Indian Economy.

Mr Raghuram Rajan many people in India have been abused by the HSBC, I do ask on their behalf that as the Governor of the RBI will you please start a full investigation into the The Hongkong and Shanghai Banking Corporation Limited in India.

Is Lies the new truth at HSBC? Is Cowardice the new Courageous Integrity at HSBC?

Google: How much longer can the FM, RBI ignore HSBC in India? - Moneylife

All one can say is this HSBC at its best?

Be very careful when doing business with HSBC. Has the HSBC Group ruined many innocent people's lives with their illegal and criminal behaviour?

One has to remember that the HSBC Group committed illegal and criminal behaviour for over ten years, has one Board Directors been fired or held legally responsible for the illegal and criminal behaviour by HSBC?. Why?

I highly recommend if you honestly believe that HSBC Group have committed illegal and/or criminal behaviour against you, report this to the Mr Raghuram Rajan the new Governor of the Reserve Bank of India, also USA District Court Judge John Gleeson.

HSBC has signed a Deferred Prosecution Agreement if HSBC Group is still committing illegal and criminal behaviour, would they be breaking the Deferred Prosecution Agreement?

I do think that USA District Court Judge John Gleeson would be very interested to hear from anyone who has evidence concerning HSBC Group committing illegal and criminal behaviour

Did Mr Flint and Mr Gulliver Chairman and CEO state they did not know what was going on? If the world is to believe them, then why did they not know?

Have they and others Directors of HSBC Holdings Plc been negligent in their duty to the shareholders and have they also failed the regulators around the world?

Michael Mason-Mahon

Mobile: 0044 7834763544
Mobile: 0044 7448770801
E-mail: ckmdm@aol.com

"First they ignore you, then they ridicule you, then they fight you, and then you win".


Suiketu Shah

4 years ago

I have noticed a few comments stating SK was "greedy".Utter nonsense.When you are promised 24% /yr by wealth management experts like brands of HSBC/HDFC and donot have thorough knowledge of Indian equities,you are more than likely to go ahead.

To call SK greedy reflects the hollowness of such people who ,in all probabilities themselves are mutual fund advisors or wealth management advisors facing a rough time as people are more inclined towards FD's inview of mass scale cheating and fraud by them.

SuchindranathAiyerS

4 years ago

I did get rooked (misled) by an HSBC relationship Manager into investing in HSBC-Canara Bank Life Insurance and Reliance "Portfolio Management Services" and much earlier in hedge funds. All of which I had to retract from at considerable loss as a wiser man. Their current procedure certainly obviates any such complaint and any form signed by you has to be executed on the same day and phone calls are made by a second (authenticating officer) to verify the transaction. However, "Caveat Emptor" is strongly advised in all finances in India as there is no protection against being conned (i.e. misled). Particularly by politically driven financial institutions like Chit Funds, UTI, LIC etc. etc.

REPLY

Michael Mason-Mahon

In Reply to SuchindranathAiyerS 4 years ago

Dear Suchin
Would you like to contact me directly, to discuss what HSBC has done to you.

Kind regards
Michael Mason-Mahon
Mobile: 0044 7834763544
Mobile: 0044 7448770801
E-mail: ckmdm@aol.com

"First they ignore you, then they ridicule you, then they fight you, and then you win."

Michael Mason-Mahon

4 years ago

Before reading anything about HSBC, people should go to youtube: 1) How HSBC Chairman Mr Flint lied to shareholders. 2) Protest against HSBC in Mumbai. 3) Help Stop Bankers Cheating


Senate investigation concluded that HSBC provided a, quote, "gateway for terrorists to gain access to U.S. dollars and the U.S. financial system."
Senator Levin said HSBC had been ‘pervasively polluted for some time’.

Can the world forget the last ten years of HSBC Group helping Drug Cartels, Iran, Libya, Cuba and ignoring USA Trading with the Enemy Acts, even after being warned it still continued, who was the Finance Director? Mr FLINT

What HSBC has now admitted to is, more or less, the worst behavior that a bank can possibly be guilty of.

These crimes were so obvious that apparently the cartels in Mexico specifically designed boxes to put cash in so that they would fit through the windows of HSBC teller windows.

People judge a company for what it has done in the past , what HSBC has done in the last ten years has it been criminal behaviour?

Mr Flint you have not met the expectations of the people in India or the Regulators around the world.

HSBC did meet the expectation of overseas Banks with links to terrorist financing, HSBC did meet the expectation for Drug Cartel's wanting to launder drug money.and as far as contributing to the fulfilment of their aspirations and ambitions you did fulfil their ambitions of laundering money. Which HSBC did that for many years.
HSBC takes compliance with the law, wherever it operates, very seriously.Is this just a bad joke by HSBC?

In India HSBC has killed the aspirations and ambitions of so many people by falsely registering them with CIBIL, asking people to sign blank LOI's, demanding money illegally.

Can Society or the Regulators forget or ignore the innocent Victims of HSBC in India

"First they ignore you, then they ridicule you, then they fight you, and then you win."

REPLY

nagesh kini

In Reply to Michael Mason-Mahon 4 years ago

Well said Micheal!
If BCCI can also mean "Bank for Crooks and Criminal International" surely there ought to be equally apt acronym for HSBC with all its transgressions and misdemenours.
There is "The polluter pays" for any pollution related degradation
The US Senator designated "pervasively polluted" bank should be more heavily penalized in all the countries that it has been polluting so brazenly!

Michael Mason-Mahon

In Reply to nagesh kini 4 years ago

Hi Nagesh

H elp S top B ankers C heating

nagesh kini

In Reply to Michael Mason-Mahon 4 years ago

Great Micheal.
Absolutely apt acronym!
Correctly sums up HSBC behaviour in full measure.

nagesh kini

In Reply to Michael Mason-Mahon 4 years ago

Great Micheal.
Absolutely apt acronym!
Correctly sums up HSBC behaviour in full measure.

Dayananda Kamath k

In Reply to Michael Mason-Mahon 4 years ago

H ighly S uspecious B eing C heated.

Cooper

4 years ago

I agree. HSBC has been caught lying and with its hands in the till. Does the bank have no shame? What are the police and regulators doing as the common man is looted in India by these rich foreign banks - who have been granted these licenses to operate ( read as steal ) in India.

The you tube link is an eye opener.

P M Ravindran

4 years ago

The biggest criminals in India re in government. So we cannot expect anything better. In fact my serious opinion after adequate analysis is that our governments are entities that do nothing that they are supposed to be doing and doing everything that they are not supposed to be doing.

nagesh kini

4 years ago

Putting across on http/YouTube the shareholders' query and the Chairman's statement makes an extremely effective impression and this needs to be replicated for all AGM. Cos. dilly dally when asked for transcripts of AGM minutes which are invariably doctored.CDs of entire AGM proceedings of listed companies should be made available to shareholders on payment.

nagesh kini

4 years ago

Putting across on http/YouTube the shareholders' query and the Chairman's statement makes an extremely effective impression and this needs to be replicated for all AGM. Cos. dilly dally when asked for transcripts of AGM minutes which are invariably doctored.CDs of entire AGM proceedings of listed companies should be made available to shareholders on payment.

Michael Mason-Mahon

4 years ago

An open letter to the Indian Minister of Finance

Dear Mr P Chidambaram

It is with serious concerns and great disappointment that I am writing this letter in Moneylife.

I like many people not only in India, also around the world wait for the RBI and the Regulators to investigate The Hongkong and Shanghai Banking Corporation Limited in India and the way it has been conducting business in India.

For three years I have help many people in India and Indian's around the world to get justice and to stop The Hongkong and Shanghai Banking Corporation Limited in India from committing illegal behaviour against them.

May I make a personal plea to you as the Finance Minister; will you please let the Financial Intelligence Unit start an investigation into The Hongkong and Shanghai Banking Corporation Limited in India?

1) The sale of their written off credit card and personal loan debt in June 2011 to JM Financial and the data base containing over 2 Lak names.

2) How many Indian's were falsely registered owing HSBC MONEY?

3) How many Indian's have HSBC falsely registered with CIBIL?

4) How many Indian's have HSBC falsely registered having a credit card?

5) Have HSBC been registering illegal penalty charges against credit card holders in India?

6) Has HSBC written off these illegal debts against their tax liabilities?

7) If HSBC has written off these illegal debts against their tax liability's, would this not be tax fraud and fraud against the Government of India?

8) Has HSBC been illegally forcing people to pay money which HSBC was not legally entitled to?

9) Has HSBC been getting their customer to sign blank LOI's, which is illegal?

10) Mr Flint Chairman of the HSBC Group states: http://www.youtube.com/watch?v=Jl5O-2mJD... and the evidence http://youtu.be/50lKgAn_ZKk

Please remember to what the Senate investigation concluded that HSBC provided a, quote, "gateway for terrorists to gain access to U.S. dollars and the U.S. financial system."

Senator Levin said HSBC had been ‘pervasively polluted for some time’.

Mr Chidambaram how much longer will the people in India and Indian's around the world have to suffer before the Indian Government takes action to stop the illegal behaviour of The Hongkong and Shanghai Banking Corporation Limited in India?

Yours sincerely

Michael Mason-Mahon
Mobile: 0044 7834763544
Mobile: 0044 7448770801
E-mail: ckmdm@aol.com

"First they ignore you, then they ridicule you, then they fight you, and then you win."

Vikas Gupta

4 years ago

All private banks like Axis, Indusind, HDFC, icici etc. are misselling 3rd Party products as confirmed recently by sting operation of CobraPost. In fact, among all of these Indusind Bank is totally unethical in the 3rd Party Products market.These banks should be heavily punished & barred from selling any 3rd party products in the future.

Michael Mason-Mahon

4 years ago

Will India unite and make the RBI and the Regulators start a criminal investigation into The Hongkong and Shanghai Banking Corporation Limited in India?

Before reading anything about HSBC, people should go to youtube: 1) How HSBC Chairman Mr Flint lied to shareholders.

About blank HSBC asking people to sign blank LOI's

A DAS

4 years ago

This keeps getting murkier. I guess Idia is happy hunting grounds for the ilk of HSBC (as also the Private banks). The inherent nature is to operate out of trust. And when a professional comes up one is not scrutinising them for foul play. The ambience and decor of the banks help. Thus they are easy flock to the slaughter house.
One does't always know, unless on hindsight, and by that time it is too costly and too late. I hope enough people take cognisance of this article.

Siddharth Biswal

4 years ago

Why blame only HSBC are rest indian pvt banks holy cows ?One of my friend is contemplating leaving HDFC bank because his designation is deputy manager but he is forced to work like an insurance agent.Morever if a reputed bank can do this what's the surety that a financial planner wont do that?Consumer has to beware & educate oneself.Invest in knowledge first before investing in a product.It is a task which SEBI & RBI are clearly failing with no of fraud cases like collective investment schemes(CIS) are increasing.How many people know difference between CIS & chit funds?Risk in former is much more than later.Watch dogs sitting in their glass houses wont solve the problem.They have to sweat it out if indeed they want to cleanse the system.Mr Chakrabarthy said no instance of money laundering was found as if he actual transaction mattered a lot.I think we should have funded Cobrapost to do a money laundering to satisfy RBI's itch.This reactive attitude instead of being pro-active by watch dogs is clearly hampering our country.It seems our watch dogs are afraid of barking.

REPLY

Suiketu Shah

In Reply to Siddharth Biswal 4 years ago

Mr Biswal,in this bank desginations is all "showbazi"(as per the words of a senior hdfc bank person himsefl) and actually they are all salesmen.How do you treat salesmen at a grocery-treat hdfc bank employees in the same way irrespective of their "showbazi"designation.

Nihar Mody

4 years ago

This reminds me of similar proposals put to me by various other bankers. All of them rejected by me. Three pricipals:

1. Buyers Beware. - Seller is in the market to make money.

2. In God we trust, Rest all pay cash. - Why trust some unknown entity blindly.

3. Fool and his money part easily. - Greed is main culprit.

nagesh kini

4 years ago

It is rather unfortunate that banks like HSBC think that they can get away by cheating only gullible greedy citizens.
The Hindu Law of Karma seems to have gotten HSBC - one pays for the sins committed in this this life itself.
The Times of India 24/4 carries a front report "In elaborate con, city firm dupes HSBC of Rs.330cr".
The Brit bank fell for the smooth talk of sharp conmen that they have companies in Dubai and Mauritius, wanted the bank fumds to acquire technical equipment and software to upgrade their library in London from 2D to 3D format.
Being British, the HSBC apparently fell flat by the conmen dropping technical jargon "upgrading entire London library format" and the holy cow "BBC". Apparently they got so carried away that they failed to ascertain the veracity of the claims and go behind the documents that turned out to be all forged and fakes.
QED The so-called 'international bankers' also have feet of clay - their credit appraisal processes and are more hazy and not infalliable!

Will T+1 settlement only create more problems?

T+1 settlement appears to be a good idea on paper. However, brokers and small investors are not too happy with it due to lack of infrastructure like banking services

Yesterday, Moneylife published an article T+1 settlement system proposed by SEBI: How will it benefit you? written by Gurpur. However, several of our readers, including brokers and investors have termed the T+1 settlement system as great idea only on paper. The banking system will be a big bottlenck to put T+1 into practice.

 

“Assuming cheque truncation system (CTS) comes into place and I get the cheque from the client at 6pm, where do I deposit it?  Even today, when the client pays on T+1 basis, it is the broker who pays the exchange from his own pocket, because the proceeds are realised only after two days. No tech savvy banks credit the proceeds on the same day. Banks may be tech savvy, people are not.  Even today, I write cheques because it is convenient to pay my bills although electronic clearing service (ECS) is available,” said one of the brokers.

 

Hemant, one of our readers, always get his shares directly from the exchange on pay-out day only. He says, “Even now people are allowed to sell shares, next day of purchase. The only risk is of short delivery, which investors have to bear. As per new system suggested, the buyer will have to pay T-1 (i.e one day before he/she purchases), so that broker has money, to pay-in the market. Hence I feel that, till we rectify the problems of banking system no point in advocating T+1 in the market.”

 

Another issue with the T+1 settlement is the transfer of shares from client’s demat account to brokers account in a short span. The trading closes at 3.30 pm. The process, however, gets over only by 5pm. This means only those who have given a power of attorney (PoA) for debiting shares can survive in this system. In short, small brokers who cannot provide depository participant (DP) services have to shut shop or tie up with clearing members for opening demat accounts to facilitate PoA system, the use and abuse of which is well known. Further the brokers cannot insist on a client to give a PoA or open a demat account where he wants.

 

Arun Adalja, another reader, feels the T+1 system is good but difficult in practice and may create problems for small investors who do not have internet facility readily available. “In such case (unavailability of internet) one has to carry the signed delivery instruction and his cheque book while visiting the DP. The visits to DP would also increase.”

 

There is already an option to pre-pay in case of heavy selling by a single client so that margin is released earlier. Brokers can always pay their clients a day earlier in case there is such requirement, provided the shares come into his account.

 

While the regulator wants to introduce T+1 system, brokers and investors, especially small investors seems to be reluctant to adopt it due to practical difficulties. But, of course, when has the regulator engaged with actual users of system. Retail participation in the stock market is decreasing day by day because of poor regulation and cumbersome rules. The T+1 concept is another step in that direction.

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