Moneylife Events
“Banks should not be selling third-party products,” RBI deputy governor

In an Open House session in Mumbai, RBI’s Deputy Governor openly agreed with Moneylife Foundation’s stance that banks should not sell non-banking products like wealth management services, insurance and gold
 

At a Moneylife Foundation’s open house attended by a packed audience in Mumbai, deputy governor of Reserve Bank of India (RBI) Dr KC Chakrabarty said, "My view is that banks should not be selling third party products. In fact, life insurance has been in India since independence, but till 1994-95 there were no banks selling insurance or mutual fund products. I fully support that the regulator must decide what is mis-selling. It must decide that if the bank is selling insurance products, what should be the conditions required to be fulfilled.”
 

Dr Chakrabarty was responding to Moneylife Foundation’s appeal that banks should not be allowed to sell third-party or non-banking products like is insurance, gold and mutual funds because they are untrained to so do and do not take responsibility of the outcome in any manner.
 

In the foreword to the Annual Report on the Banking Ombudsman Scheme 2011-12, Dr K C Chakrabarty writes, “The incentive structures governing sale of different financial products and services tend to result in mis-selling. It is frightening to imagine a situation where the front line staff at banks may be more interested in pushing insurance and para-banking products instead of promoting core banking products.”
 

Dr Chakrabarty further says, “The role of the top management of banks becomes very crucial in formulating product and service delivery and pricing strategies with a clear focus on fair treatment of customers, appropriate disclosure of product features and risks and suitability of ‘sell’ for different segments of customers.”

 

On 18 April 2013 Moneylife Foundation had presented a memorandum to RBI Governor (http://foundation.moneylife.in/?page_id=2000) on unchecked mis-selling by bank relationship managers. It says, “Banks’ relationship managers have been particularly brazen in recommending financial products to their customers while completely disregarding their financial situation. It is commonplace to hear of a senior citizen being conned into investing in a mutual fund, unit-linked insurance plan or a hybrid-derivative product on the promise of higher returns. In many cases, private bank executives go over to their homes and persuade them to break secure fixed deposits and invest the money in Unit Linked Insurance Products (ULIPs) with the false assurance that these are as safe as fixed deposits and offer a higher return and security.”

 

Moneylife had highlighted the case of Ms Suchitra Krishnamoorthi, a well-known singer and actor, who was taken for a ride by HSBC Bank for over five years. The modus operandi for HSBC in this case has been a combination of toxic churning of the portfolio management system (2% entry load on every purchase made by it on behalf of client), insurance products promising 24% returns, insisting her on taking a loan instead of withdrawing funds without even disclosing that the client was entitled for a smart loan.
 

Read - HSBC loots Suchitra Krishnamoorthi after big promises of 24% returns
 

A strong campaign by Moneylife through its website and its social media properties got quick justice for a 79-year old man with an ailing wife. IndusInd Bank officials had deceitfully persuaded him break his fixed deposit with the bank and invest in a wrong product. The bankers came—at 11.30 in the night—bearing a demand draft of Rs7 lakh covering the amount he was persuaded to withdraw from his fixed deposit and invest in DWS’s mutual fund scheme with a five-year lock in period.
 

Read -Mangelal Sharma gets his Rs7 lakh back—another Moneylife victory
 

RBI’s new guidelines to regulate banks’ wealth management operations and third party product distribution would be released by the end of June. It also aims to strengthen the know your customer (KYC) norms, anti-money laundering (AML) standards and rules to combat financing of terrorism.
 

RBI said that banks offering wealth management services were exposed to reputational risks on account of mis-selling of products, conflict of interest, lack of knowledge and clarity on products and frauds. Bank employees were receiving incentives from third parties for selling their products. Such practices may lead to mis-selling and distortion of the staff incentive structure.

 

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COMMENTS

COL H S SAWHNEY

1 year ago

Sucheta Pl help I have also been cheated TWICE by AXIS Bank by persuading me top invest in DWS Mutual FUND with Lock in period with poor pathetic meagre returns Pl call me 09850068030 urgent
COL H S SAWHNEY

G N GHOSH

4 years ago

IT IS A VERY WELCOME DECISION BY THE DY GOV OF RBI. PRESENTLY BANK IS DRIVEN THE SALE OF THIRD PARTY PRODUCTS LIKE MF, LIFE INSURANCE,GOLD, PORTFOLIO MANAGEMENT SERVICE WITH REVENUE TARGET.THE TARGET IS GIVEN BY THE HEAD OFFICE TO EVERY BRANCH TO MEET THE BROKERAGE COLLECTION & OFFER HEAVY INCENTIVES TO BRANCH MANAGER AND OTHER SALES EXECUTIVES.SO THESE PEOPLE MAKE BANK CUSTOMERS A SOFT TARGET CLIENT TO SALE LIFE INSURANCE AND HIGH BROKERAGE EARNING MUTUAL FUND PRODUCTS. THEY HAVE EASY ACCESS TO THE CUSTOMERS SAVING AND CURRENT AC BALANCES & MOTIVATE THEM TO PUT MONEY IN SCHEMES NOT CONSIDERING THE CUSTOMERS FINANCIAL POSITION AND REQUIREMENTS.EVEN SOME TIME BRANCH MANAGERS BLACK MAIL THE CUSTOMERS COMING FOR LOAN TO PURCHASE LIFE INSURANCE OTHERWISE LOAN WILL NOT BE SANCTIONED. THEY USE OTHER STAFFS IN THE BANK LIKE CUSTOMER SERVICE EXECUTIVES, OPERATION MANAGERS, CASH COUNTER STAFFS TO CATCH AND PRESSURIZE THE CUSTOMERS TO INVEST MONEY IN HIGH BROKERAGE EARNING SCHEMES. THESE SALESMAN OF THE BANKS HARDLY REMAINS FOR 1 - 2 YEARS IN THE BANK ,THEN THEY EITHER TRANSFERRED OR LEAVES THE JOB, IN THIS SITUATION IF A CLIENT SUFFERING FROM MISSSALE BY BANK STAFF THE BRANCH PEOPLE WILL KICK HIM OUT BY SAYING THAT EARLIER STAFF WAS DONE WRONG AND NOW WE ARE NOT RESPONSIBLE FOR THAT. SO BANKS SHOULD BAR TO SALE ANY TYPE OF THIRD PARTY PRODUCTS IN THE BRANCH PREMISES, NOT ALLOWING SALE EXECUTIVES TO SIT IN BRANCH AND BRANCH MANAGER SHOULD NOT HAVE ANY TARGET OR REVENUE INCENTIVE, PROMOTION,GIFTS,PERKS ANY PRESSURE TO SALE THIRD PARTY PRODUCTS

Dayananda Kamath k

4 years ago

when third party products are allowed to be sold the regulators have not bothered about the structure that is to be kept in place to adhere to the norms. just by a signature they allowed banks to do all these irregularities. even when the matter was brought to the notice of the regulator their attitude was casual reckless as finance secretary rightly said. unfortunately his ministries attitude is also the same. it clearly shows it is a conspiracy to loot the the public money by design create a new product allow it to be abused for the benefit of the few from their favourites and wait for the public outcry. then ban it make a scapegoat of an innocent and open a new avenue again. this what is being done for the last 60 years.

Ashwin S Anand

4 years ago

Act on it.. just don't talk !!!

Debadatta Das

4 years ago

When banks started selling insurance product, the finance market got spoiled. Because everybody knows about the return on insurance product. If a person required insurance then he/she must opt for term insurance, but in our country the insurance is a mix of insurance and investment. The worst thing is that unit link insurance where the customers are getting negative returns.For the entire economical problem all the regulators are equally responsible.

Gopalakrishnan T V

4 years ago

Banks should be advised to do banking business with all seriousness and commitment. Staff should have thorough knowledge of banking products first and they should also understand the customers needs. It is time they concentrate on banking ie taking deposits and lending to genuine production and consumption needs with the required safety norms in tact.Will the Regulator ensure this?

Suiketu Shah

4 years ago

The great thing is lakhs of readers of moneylife are aware to stay far far away from these dubious mutual funds,Z grade equirty products,insurance policies, etc promoted heavily by banks,etc all thanks to moneylife.It saves the hard earned money of lakhs of people who otherwise would have fallen to the nonsense talks og banks.Great great work by moneylife.

arun adalja

4 years ago

rbi must penalise the banks with heavypenalty if they do other activities than banking and give good customer satisfaction.

Ravindra

4 years ago

I suppose RBI is supposed to tell the Banks what to do and what not to do. We see this in the Newspapers frequently. And here is a RBI Dy Governor who, instead of using the powers that RBI has IS REQUESTING Banks not to indulge in Insurance and other third party products. It sounds funny to say the least.

Vikash Agarwal

4 years ago

Manoharji... pls do not take the banking 50 years back.... today whatever we are getting in terms of financial offerings, technological convenience both for internet banking (SB and current account services through online debit / credit card, ATM)& capital market services (Demat, equity, IPO invesment through ABAS, Mutual funds)... all is possible only because some bank has taken initiative beyond debit / credit.. The real issue is how matured our banks and regulators are in terms of managing the risk associated with the development in BFSI space. Lets take constructive instead critising the development because of our failure to regulate, govern and take corrective measures pro actively.

REPLY

manohar bayyaram

In Reply to Vikash Agarwal 4 years ago

Vikashji, i appreciate your view. My only concern is when a account holder walks-into bank the innocent investor is trapped to buy the fancied insurance policies and mutual fund schemes. Let the regulators put an end to this.

Ubaldo C DSouza

In Reply to Vikash Agarwal 4 years ago

You're right on! But regulating and taking corrective measures will be trodding on the toes of 'vested interests'. That is where the problem lies.

SuchindranathAiyerS

4 years ago

I like the convenience of being able to purchase financial products through my Bank. As for the reputational risks, that is what needs to be addressed rather than the business itself. The shabby, unregulated way, in which Banks accept, for the purpose of lending or investment, deposits of money from the public, repayable on demand or otherwise, by cheque, draft order or otherwise, endangers the reputation of Banks too.Particularly with knee jerk panic measures introduced by India's idiotic "governance" Should Banking be put an end to?

REPLY

Ubaldo C DSouza

In Reply to SuchindranathAiyerS 4 years ago

Certainly not! But it appears that "India's idiotic governance" is incapable of regulating its institutions, something akin to parents being unable to control the children they beget. If all was well controlled and regulated as it should have been, these issues which we spend so much time in dissecting and bisecting would not have been there. But it is also to be remembered that when compliance is sought to be implemented and enforced, 'vested interests' raise their ugly head and it is the common non-crooked aam admi who picks up the tab.

Vikash Agarwal

4 years ago

Guys... pls understand the issue correctly, there is no harm in banks selling third party product, provided they understand clients risk profile, offer them advisory services purely based on their portfolio, long term financial planning and financial goals in life. The issue of mis selling comes only when greed among clients overlap their risk profile and banks fill the gap by offering high commission products without understanding clients actual requirement and their risk profile. Hence, we should be asking the regulator to come out with guidelines for banks who are interested to sell TP products with proper due deligence, transparent practices, proper risk assessment by competent staff (with due certifications etc) and relevent disclosures.

manohar bayyaram

4 years ago

GOOD MOVE : Innocent Bank Account Holders will be saved from the Banks mis-selling. They have ruined the hard earned money of the small investors, there are many instances where the banks lured the account holders to withdraw the money from the fixed deposits and buy endowment policies of the insurance companies. Let the Bank do at what they are good at i.e. debit credit not more than that.

Dekho ji.com

4 years ago

Yes, 100% agreed. When banks start selling other products, this leads to huge mis-selling opportunities in the name of targets set by the bank's management. Ask any banker and he will tell you how their boss and management force them to sell these unknown products. Even 12th pass kids are being employed by banks these days to sell insurance and stock market linked products. Providing insurance (money/life/etc) should be duty of the govt and private industry should be kept out of this business completely.

Naresh Nayak

4 years ago

Finally the regulator gets it right. Banks cannot sell third party products. Full stop. Universal banking which was touted by Chuck Prince of Citi and K V Kamath of ICICI in India has turned out to be a conflict of interest model. Chuck Prince himself today is against Universal Banking as a model.

So when is the RBI going to get the bank license granting right? NBFCs which are meeting all prudential norms and are sufficiently large should be compulsorily made into banks first, the rest should not get greenfield licenses. They should first qualify the minimum grade of portfolio quality, wide distribution of branches, capital adequacy and reputation with various stakeholders and then the branch licenses should be granted.

http://nareshnayak.wordpress.com

Reliance Industries to invest Rs 1.5 trillion in three years

Mukesh Ambani had in the last Annual General Meeting announced an investment of Rs1,00,000 crore over 4-5 years, which has now been expanded to Rs. 1.5 lakh crore and time compressed to 3 years

Reliance Industries (RIL) on Thursday announced an investment of Rs1.5 lakh crore in core business of petrochemicals and oil and gas as well as in retail and telecom sectors in the next three years.

 

Addressing company shareholders, RIL chairman and managing director Mukesh Ambani said, “Reliance has embarked upon its largest investment programme in its history.”

 

The investments span oil and gas exploration and production, refining and marketing, petrochemicals, retail and broadband and digital services, he said.

 

RIL is aiming to be “among top five petrochemical producers in the world,” he said adding the petrochem capacity is being expanded to 25 million tonnes from 15 million tonnes per year.

 

Mr Ambani had in the last Annual General Meeting (AGM) announced an investment of Rs1,00,000 crore over 4-5 years, which has now been expanded to Rs. 1.5 lakh crore and time compressed to 3 years.

 

While RIL’s partnership with UK’s BP has started delivering results with a significant gas discovery being made 2-km below the currently producing fields in KG-D6 block, the company is now looking at quickly bringing into production satellite fields in the flagging block and nearby areas.

 

Also, it is looking at beginning production from its Sohagpur coal-bed methane (CBM) blocks in Madhya Pradesh by 2015, he said.

 

While Mr Ambani did not give a roadmap for launch of telecom services, he said the telecom business unit will increase headcount to 10,000 next year from 3,000 currently.

 

The unit, Reliance Jio Infocomm, is the only company to have nationwide permits for 4G broadband services, but is yet to start commercial services.

 

“We are making these investments at a time when the global economy is facing one of its most challenging period in modern times. Most of economies are faced with slowdown, high unemployment and lack of visible growth triggers,” he said.

 

“Reliance is making significant investment in all five businesses simultaneously — exploration and production, petroleum refining and marketing, petrochemical, retail and broadband and digital services,” Mr Ambani said.

 

Mr Ambani said 4G telecom services would be pillared on “affordability and providing an unparallel range of services that do not exist today.”

 

“In the coming years Reliance Jio’s next generation digital infra and services platform will catalyse a transformation and will embrace almost every facet of India’s economic growth and social progress,” he said.

 

He said revenues for RIL’s investments in US shale gas ventures have doubled.

 

RIL’s retail business has crossed Rs10,000 crore revenue and has achieved break-even.

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Cartelisation, not competition, decides banking service charges

RBI deputy governor Dr KC Chakrabarty said that the decision on various charges levied by banks has been left to their respective board of directors and the Indian Banks Association oversees the reasonableness aspect and can suggest a cap on the charges. This policy prevents the RBI from interfering with the various charges levied by banks and customers who found them unreasonable would do well to switch banks

Unreasonably high and ever-increasing services charges was an issue that was strongly raised by consumer groups at the "Open House with Dr KC Chakrabarty" organised by Moneylife Foundation. Variable and vastly differing charges are also a matter of concern, since ordinary customers are unable to take a call on what is a fair and reasonable charge and what is extortionate.   

Mohan Siroya, chairperson of Consumer Complaints Cell (CCC) said, "The 'greatest wrong' the Reserve Bank of India (RBI) has committed is by disowning its responsibility to supervise the 'exploitation' of bank customers. RBI has given the full liberty to each bank to levy 'service charges' as per their wish. It has become an open market. Now it has come to the light from the Banking Codes and Standards Board of India (BSCBI) that the Indian Banks' Association (IBA) has been given an authority to put a 'cap' on such charges, thus fully abdicating its own duty as a statutory regulator. How is such a body expected to control the greed of making more and more money by its own members?"
 
"As a consumer I'm ready to pay the prescribed service charges, but one bank is charging Rs100 for a particular service whereas another bank is charging Rs10 for the same service. What does the consumer do then?" he said.
 
Mr Siroya also spoke about his Right to Information (RTI) initiative to figure out how these charges are decided; it led to the conclusion that individual banks are free to decide their own charges. It took the CC Cell and Mr Siroya three years to just know that it is the BSCBI that had the mandate to monitor reasonableness of banking charges.
 
In an oligopolistic set up, players get together and decide on the price of a product. On the other hand, healthy competition actually reduces the prices of goods and services which is good for the consumer. However, despite so many banks offering competitive products, the charges are increasing. Competition between banks was supposed to keep service charges in check in a liberalised economic environment, but this is not happening Mr Chakrabarty holds the view that the absence of fair competition because of entry barriers to new banks is one reason why competition has failed to work.
 
There are more than 150 banking entities in India, which includes public, private, foreign and cooperatives. To most consumers, this seems a large enough number to ensure a competitive environment. Why is competition not working? The view of consumer organisations is rather different. All banks listed on stock exchanges are under pressure to show higher profits. While they have not been able to keep the non- performing assets (NPAs) in check through prudent lending, any increase in service charges goes straight to the bottomline. Hence, all banks are happy to follow the lead of foreign and private banks in increasing service charges, although nationalised banks, probably conscious about their ownership, will remain a step behind.

Adding to Mr Siroya's view, Sucheta Dalal, trustee of Moneylife Foundation said, "The IBA operates in a particular pattern. When one bank decides to charge Rs500 for a debit card, the others, especially nationalised banks, follow its lead and say; okay we will charge only Rs250. This is how banking charges increase every time. Competition does not work because IBA has become a cartel. When was the last time that IBA spoke to any consumer organization or sought the consumers' views?"

Ashok Ravat of All India Bank Depositors Association (AIBDA) and Vasundhara Deodhar from Mumbai Grahak Panchayat (MGP) also raised questions on the reasonableness of banking charges. Both requested the banking regulator to determine reasonable service charges.

Dr Chakrabarty, responded by saying that the decision to prescribe service charges has been left to board of directors of the individual bank. "We said the board should decide (on banking charges) and if the board has given the mandate to the IBA, then we cannot take any action against the Association". On the charge that IBA operates like a cartel he said the RBI cannot intervene. "At best you can approach the Competition Commission, if you feel this is cartelisation," he said.

Referring to Dr Chakrabarty's suggestion to switch banks in case the customer was not satisfied with the bank services, Mr Siroya asked, "How often can a consumer jump from one bank to another on the basis of charges and not to mention the endless KYC hassles each time it is done?"

Initially, bank charges were under the domain of BCSBI, an independent and autonomous body and were supposed to protect banking consumers. It is not a compensation mechanism and looks into an individual complaint only to the extent it points to any systemic compliance failure. It had published a "Code of Conduct" for banks to follow in order to protect consumers' interest, as well as adopt transparent and fair practices.
Dr Chakrabarty, responding to demand for looking into this matter said, "I have no problem with your demand, however, I will not be able to satisfy you within the current framework."

Mr Siroya said, "Under the current rules if customers are penalised or have paid heavy 'service charges' even for a technical fault or being unaware of the repercussion, the bank also must be equally held liable to compensate the customer for 'any deficiency in service' by way of delay or even any technicality."

Replying to the question on penalising banks, the RBI deputy governor said, "If we become too stringent and as you say, we put very high penalty on the bank, no bank is going to pay from its pocket, it will simply increase your charges more. Our purpose is to stabilize banking system. It is not that we cannot penalize, but this way it won't work."

"Customer is the most important part of a banking system and it is necessary that the bankers do not 'squeeze' customers. However, after saying this, we must understand that banking is not just a service but it is also a business and banks need to levy charges on services in order to survive", Dr Chakrabarty added. He also said that some of the banks that attract a lot of complaints also tend to sweep the "best bank" awards handed out by many organisations.

Further in the discussion, Moneylife Foundation also made the point that a customer has no way to judge which is a good bank, in terms of service quality and costs. It was pointed out that in 2006, one Delhi based NGO had conducted a survey on service quality. Many banks were unhappy with the findings and it was decided that the IBA or the BCSBI would conduct such surveys. Nothing has been done in that direction since then. In the absence of such a survey, how are consumer supposed to know that the bank that they switch to would be any better than the previous one?

Clearly, there are a lot of questions that need answers. From the consumer's perspective, the most positive aspect is that the RBI is now willing to engage with customers directly, hear their issues first hand and offer to examine the merits of each demand. This was evident from the fact that although Dr Chakrabarty personally took all the questions during the open house, the programme was attended by all those who would interact with the consumer.

Present at the meeting were AC Mahajan, chairman of BCSBI and Mr Narayana Raja its chief executive. Dr Deepali Pant Joshi, executive director of the RBI, Supriya Pattnaik, chief general manager (CGM) of RBI, Rosemary Sebastian, Banking Ombudsman of Mumbai, M Balachandran, director of National Payments Corporation of India (NPCI) as well as former CGMs in charge of customer services-Kaza Sudhakar and Jagan Mohan Rao. DG Kale, general manager in the Consumer Services department at RBI was also present.

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COMMENTS

Michael Mason-Mahon

4 years ago

Open letter to the major shareholders and the Board of Directors of HSBC Holdings Plc


Should the major shareholders of HSBC Holdings Plc pick up the bill for restoring the reputation of the HSBC Group?

Why have the Major shareholders not forced any changes to the Board of Directors of HSBC Holdings Plc?

If the world is to believe the statements of Mr Flint, Chairman, Mr Gulliver, CEO, that they are truly sorry for the illegal and criminal behaviour of HSBC Group, let the Board of Directors show the world how really sorry the HSBC Group is.

Is the HSBC Group willing to make an act of Attrition for their illegal and criminal behaviour around the world?

Is the HSBC Group truly sorry and wanting to atone for their illegal and criminal behaviour around the world? Are they willing to pay the Price?

Is Mr Flint, Chairman, Mr Gulliver, CEO and the Board of Directors of HSBC Holdings Plc very serious about restoring the reputation of HSBC around the world?

A good start would be to show society that the HSBC Group is not only willing to atone for the past and that the HSBC Group is willing to be a great Corporate Citizen of the world.

The cost is to help the world, the hungry, the poor, the uneducated, the homeless and the sick children of the world.

The HSBC Group is willing to announce in the next 30 days that the HSBC Group will donate £3 billion to help the world and for the next ten years donate £5 hundred million every year. The £3 billion donation will be made within six months of the announcement.

Some ideas for HSBC Group.

India £ 762 Million, then for the next tens years £51 Million.

Africa £ 823 Million, then for the next tens years £56 Million.

South America £ 514 Million then for the next tens years £43 Million.

Middle East, Syria and the Lebanon 370 Million then for the next tens years £46 Million

China £ 236 Million, then for the next tens years £79 Million

The rest of the world £ 210 Million, then for the next tens years £205 Million.

Costs £ 20 Million per year.

Have the HSBC Group paid over $2 billion in fines and settlements in the USA in the last four months?

This may be too high a price for the HSBC Group to pay to restore their reputation?

By helping the world maybe, just maybe, the citizens of the world, may be able to start to forgive the shameful behaviour of the HSBC Group and the behaviour of Board of Directors of HSBC Holdings Plc that were Board members while this illegal and criminal behaviour was going on.

Concerned shareholder

Regards
Michael Mason-Mahon
Mobile: 0044 7834763544
Mobile: 0044 7448770801
E-mail: [email protected]

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

Michael Mason-Mahon

4 years ago

Open letter to the major shareholders and the Board of Directors of HSBC Holdings Plc


Should the major shareholders of HSBC Holdings Plc pick up the bill for restoring the reputation of the HSBC Group?

Why have the Major shareholders not forced any changes to the Board of Directors of HSBC Holdings Plc?

If the world is to believe the statements of Mr Flint, Chairman, Mr Gulliver, CEO, that they are truly sorry for the illegal and criminal behaviour of HSBC Group, let the Board of Directors show the world how really sorry the HSBC Group is.

Is the HSBC Group willing to make an act of Attrition for their illegal and criminal behaviour around the world?

Is the HSBC Group truly sorry and wanting to atone for their illegal and criminal behaviour around the world? Are they willing to pay the Price?

Is Mr Flint, Chairman, Mr Gulliver, CEO and the Board of Directors of HSBC Holdings Plc very serious about restoring the reputation of HSBC around the world?

A good start would be to show society that the HSBC Group is not only willing to atone for the past and that the HSBC Group is willing to be a great Corporate Citizen of the world.

The cost is to help the world, the hungry, the poor, the uneducated, the homeless and the sick children of the world.

The HSBC Group is willing to announce in the next 30 days that the HSBC Group will donate £3 billion to help the world and for the next ten years donate £5 hundred million every year. The £3 billion donation will be made within six months of the announcement.

Some ideas for HSBC Group.

India £ 762 Million, then for the next tens years £51 Million.

Africa £ 823 Million, then for the next tens years £56 Million.

South America £ 514 Million then for the next tens years £43 Million.

Middle East, Syria and the Lebanon 370 Million then for the next tens years £46 Million

China £ 236 Million, then for the next tens years £79 Million

The rest of the world £ 210 Million, then for the next tens years £205 Million.

Costs £ 20 Million per year.

Have the HSBC Group paid over $2 billion in fines and settlements in the USA in the last four months?

This may be too high a price for the HSBC Group to pay to restore their reputation?

By helping the world maybe, just maybe, the citizens of the world, may be able to start to forgive the shameful behaviour of the HSBC Group and the behaviour of Board of Directors of HSBC Holdings Plc that were Board members while this illegal and criminal behaviour was going on.

Concerned shareholder

Regards
Michael Mason-Mahon
Mobile: 0044 7834763544
Mobile: 0044 7448770801
E-mail: [email protected]

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

Michael Mason-Mahon

4 years ago

Please allow me to say a very big thank you to everyone at Moneylife, the fighter for the citizens of India and for making people's lives a lot better.

May I also thank them for allowing me to participate and comment on articles, I do thank them for letting me write an article.

One lone voice will shout in the dark, until the lone voice is heard then there is light, for once there is one listening others will come.

In India to many people shout without being heard, because they do not know where their voice can be heard.

Until people come together and the one's becomes hundreds and the hundreds becomes Lak's, then Crore's only then will the Government and regulators be concerned.

This problem is not of the few, it is the problem for every citizen of India.

What is the real truth about what The Hongkong and Shanghai Banking Corporation Limited in India has and is doing to the citizen's of India?

You only have to look at what the HSBC Group have done in the rest of the world and do you think that their behaviour would be better in India?

Michael Mason-Mahon

4 years ago

Please allow me to say a very big thank you to everyone at Moneylife, the fighter for the citizens of India and for making people's lives a lot better.

May I also thank them for allowing me to participate and comment on articles, I do thank them for letting me write an article.

One lone voice will shout in the dark, until the lone voice is heard then there is light, for once there is one listening others will come.

In India to many people shout without being heard, because they do not know where their voice can be heard.

Until people come together and the one's becomes hundreds and the hundreds becomes Lak's, then Crore's only then will the Government and regulators be concerned.

This problem is not of the few, it is the problem for every citizen of India.

What is the real truth about what The Hongkong and Shanghai Banking Corporation Limited in India has and is doing to the citizen's of India?

You only have to look at what the HSBC Group have done in the rest of the world and do you think that their behaviour would be better in India?

gcmbinty

4 years ago

It is a wonderful dialogue with the regulator of the providers of banking services in India, initiated by Moneylife Foundation which I could not join personally because of the reach - distant locations. But Moneylife Foundation deserve pat for organising such a programme. The inputs on behalf of consumers have been very well articulated by discussants like Mr. Siroya and others. This discussion needs to be taken further to the consumers far and wide for which I had in a way tried to coordinate with BO-Delhi, but failed.

It is correct that the banking serice is a business operation and is subject to competition. At the same time the nationalised banks are also expected to follow socialistic pattern in it services. Nationalised Banks are in competition with private banks and being in public sector they are not expected to be exploitative with such wide and wild range of charges for the same type of service as the example quoted in the dialogue.
It cannot be ignored that public sector banks are intended to give better placed to extend services to all segments of economic status of society.
In fact, it is my view, the public sector banks should be put to audit by an institution like CAG instead of the members of the Institute of Chartered Accountants to better plug the loop holes in their operations and point the areas of making profits. These banks must first of all work out the maximum cost of running administration at different stations of locations and charge not more than 10-15% of the administrative cost covered in the service charges folders.
IBA is more the spokesperson for the Banks and is not a regulator of any variety. Therefore, it will be wrong for the RBI to leave the matter of fixing service charges.
There is wide range of discriminatory use of powers of lending and taking deposits. The Regional and Branch managers have often been seen abusing their discretionary power.
I must appreciate the perspective of the meeting with Dy RBI Governor put up by Moneylife Foundation and thanks to Mr. Siroya for its circulation. It is a feast to the eyes and mind to read the same.
G. C. Mathur

REPLY

MOHAN SIROYA

In Reply to gcmbinty 4 years ago

Thanks a ton GCM for appropriate inputs and liking the discussion arranged by Moneylife Foundation.
In fact now is the time when all Consumer organizations have to come in UNISON on one common platform and demand the 'Restoration of Consumer rights' from RBI or other such Regulators. For the lopsided thinking of RBI ,even the Financial Services Secretary of the Finance Ministry has openly criticised its working.

Mohan Siroya

GVN ROJARAO

4 years ago

this very good decision to bank customers thanks to dr K,C,Chakarvarthy garu. G.V.N.ROJARAO.

MOHAN SIROYA

4 years ago

I have already put my comments on the updat4e published din MONEYLIFE on 3 rd June that "Bank Service Charge is not Negotiable". Thanks to Moneylife for publishing my views and other activists views here on the scourge of "Bank Service Charges".
Those of he readers who may have missed that comment, I re-produce here :
The Bank customers have become a ‘PUNCHING BAG’ not only for the banks but even for the Regulator RBI .

I am sorry for the above blunt statement , but it becomes real when in the OPEN HOUSE an authority no less than the DY. Governor of Reserve Bank of India ( RBI) says that there can not be any effective redressal from the regulator to the legitimate grievance of a Bank customer as for as the ‘Service charges’ charged by the banks for various services are concerned. He had even declared that the issue of service charge in not “Negotiable”. This makes the Consumer as the “Punching Bag” vulnerable to exploitation and victimization.
This is, to say the least, open example of abdication of duty and non-deliverance by the authority who is accountable to regulate and protect the Interest of banking service ‘Customers’ who are consumers and entitled to protection from ‘Unreasonable, exploitative and unfair charges’ under the law of the land. Let us analyse his argument rationally that ‘Because Banking to day is not a service, but a Business/ commercial activity’, the protection to users on charges is not ‘Negotiable’. This interpretation is wholly misplaced. In fact RBI itself defines that ‘The current account’ transactions are in the category of “Commercial” but small and SB account operation is a part of ‘Service’. On this reckoning itself SB account holders can not come under’ Commercial service’ .Further this analogy can be applied to all other sectors too viz; Insurance , Telecom, Reality , commodity selling etc. But then Government has framed the Regulations for Redressal of Consumer Grievances, appointed the Statutory Regulators to protect the interests of the consumers even for such commercial services.
As a part of its ‘Financial Services’, RBI under the policy framed in 2006-07, a working group was especially constituted to frame a code for ‘Fair Practices’ to be adopted by the banks for various banking services . These recommendations were accepted by the RBI and another statutory body to effectively implement and monitor this fair practices code was constituted named as “Banking Codes and Standards Board of India ( BCSBI) . Although the RBI did not frame any “Time Bound” grievance redressal system , the power to monitor the ‘Reasonableness’ of any service charge’ levied by the bank was vested in it. Lately for some unknown reasons , the Power to monitor Reasonableness of any service charge was delegated to the ‘Indian Banks Association’(IBA). Now imagine the plight of the consumer . Every bank has the liberty to levy any amount of service charge for any service’ rendered or even not rendered’ to the customer . There is no transparency in applying this charge on the criteria of service-vs. the cost to the bank. It is pure and simple ‘Business’ of money making’ from the hapless customers. If someone had the courage to ‘Protest’ against any such service-or non-service charge , the consumer has to first spend his own ‘Airtime’ or paper/postage/transporting expenses to lodge such complaint . RBI has not even asked all banks for a ‘Mandatory and TOLL FREE, consumer help-line’. Needless to mention that the concerned bank will maintain that the charge is reasonable . Then to decide whether it is indeed ‘Reasonable or not’ you approach the IBA. IBA is not ‘duty bound or time bound ‘ to even acknowledge such ‘Appeals and Requests’. And when it replies, it is invariably in favour of ‘Holding Fair’ what the concerned bank has done . And that is ‘The End’ for the consumer ,unless he/she has enormous, patience resources and undying will to approach the HC in a writ petition on any trifle issue to make the RBI ACT or go to the Consumer For a to claim compensation for deficiency in service ,which will take years . So in reality this is what the Dy. Governor of RBI had meant.
In this scenario, therefore, the poor Indian banking Consumer will remain a ‘Punching Bag’ to go on receiving blows of financial losses , mental torture, and harassment for any transaction ,even expressly for the mistake or ‘Non-deliverance ‘ of the banks due to either human error or IT failure. In an well analysed article on wrongful “TDS’ deduction and refusing to credit back the same by the wrongdoer banks, shri GURUPUR in another issue of ‘Moneylife’ had asked for some ‘Penalties’ to be levied on the defaulter banks. But in this bleak and anti consumer stance taken by the Regulator, the demand will only remain on paper as a Day Dream. As long as RBI does not change its stance to become “Consumer Centric , from the present ‘Bank Centric’; deliverance in the ‘Financial Services sector’ will continue to remain a grim reality .
To end my comments, I would like to quote what Mr. Rajiv Takru , Secretary ,Financial Services ,Ministry of Finance Govt. of India had stated a couple of days back for prevailing stance of RBI.
“ You must understand , no institution is an island . RBI is not an Island . We must understand that it is extremely important to have some apex body which sits down and deliberates.” But when the RBI authority declares ‘Bank Service charges are non negotiable, no deliberation is possible.

Now the ball is in the court of Consumer Activists, NGOs and Forums either to fight for the “Restoration of Rights of the Consumers” or remain as silent spectators
--Mohan Siroya
Consumer Activist and Chairperson of Consumer Complaints Cell.



REPLY

Michael Mason-Mahon

In Reply to MOHAN SIROYA 4 years ago

Dear Mohan Siroya
I applaud your fight and congratulate you on your article and many others who try and get Justice for the innocent victims of the Banks behaviour.

It is true that in life you cannot make a person see the truth if that the person wants to be blind.

Any excuse from the regulators, is just an excuse nothing more an excuse.

Perhaps the Regulator should look around the world and see what of Regulators are doing, they may learn a lesson or have better ideas for their own citizens.

Reasonable One of the most important words in Law, the RBI should look at the UK. In the UK Banks were charging excessive Bank charges and the regulators stepped in, result the Banks had to reduce their charges. I am not saying that the UK has the best system.

What the RBI can and should do is to look at how other countries deal with these problem and then come up with a better way of protecting their citizens.

It is so easy for the Regulators to say we cannot do anything, the Regulators can do an awful lot, only if they are willing to do it.

With all the problems India is still one of the greatest countries I have had the pleasure to visit, problems can be resolved only if one want to solve the problem. If not the problem only gets bigger.

Kindregards

Michael Mason-Mahon
Mobile: 0044 7834763544
Mobile: 0044 7448770801
E-mail: [email protected]

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

MOHAN SIROYA

In Reply to Michael Mason-Mahon 4 years ago

Dear Michael

I absolutely agree with you .You also accept my compliments for calling spade a spade, without mincing words.
Regards
Mohan Siroya

Michael Mason-Mahon

In Reply to MOHAN SIROYA 4 years ago

Dear Mohan Siroya
I applaud your fight and congratulate you on your article and many others who try and get Justice for the innocent victims of the Banks behaviour.

It is true that in life you cannot make a person see the truth if that the person wants to be blind.

Any excuse from the regulators, is just an excuse nothing more an excuse.

Perhaps the Regulator should look around the world and see what of Regulators are doing, they may learn a lesson or have better ideas for their own citizens.

Reasonable One of the most important words in Law, the RBI should look at the UK. In the UK Banks were charging excessive Bank charges and the regulators stepped in, result the Banks had to reduce their charges. I am not saying that the UK has the best system.

What the RBI can and should do is to look at how other countries deal with these problem and then come up with a better way of protecting their citizens.

It is so easy for the Regulators to say we cannot do anything, the Regulators can do an awful lot, only if they are willing to do it.

With all the problems India is still one of the greatest countries I have had the pleasure to visit, problems can be resolved only if one want to solve the problem. If not the problem only gets bigger.

Kindregards

Michael Mason-Mahon
Mobile: 0044 7834763544
Mobile: 0044 7448770801
E-mail: [email protected]

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

Michael Mason-Mahon

4 years ago

Dear Dr KC Chakrabarty

With the greatest of respect Sir, I am no Banker but I think you are just to trusting of the Banks. Big fines may not work, the one thing they do is attract media attention, with this attention people will know what type of Bank the are dealing with.

Allowing individual banks are free to decide their own charges is a recipe for disaster for the customer.

As for the problem of a cartel being formed, it would have much more meaning if the RBI asked the Competition Commission to inquire. The RBI could refer this to the Minister of Finance

You may like to google complaints HSBC India and see what HSBC have been doing in India for years.

Look at what Banks have been doing in the rest of the world and their illegal behaviour around the world.

Is it not the responsibility of every Government and the Regulators of that Country to protect their citizens above all else. No Bank can have more rights than a citizen, no Bank can have more protection than the citizen.

A Bank's profit cannot be at the cost of the citizen's rights. If this happens are not the Government and the Regulators of that Country being negligent in their duty to protect their citizen's?

The amount of complaints against Banks and about their behaviour is not only shocking for the reader of their complaints, it must be a thousand time worse for the individual or family's going through this.

This is why I have help many people in India with their complaints against HSBC.

Only recently I have discovered that Mr Lewis the Head of Customer Relation had written to the Financial Conduct Authority in London,saying I may make a complaint about HSBC forcing me to close my account, did he tell the truth, the whole truth and nothing but the truth? No way.

Is HSBC trying to discredit with the FCA and with the RBI?

Have HSBC made fools of the FCA?

Senior staff have stated HSBC was writing to the RBI, will HSBC make fools of the RBI?

I have helped many people in India against HSBC and resolved every case to the satisfaction of the customer and no of HSBC, what has the RBI done about the illegal behaviour of HSBC?

I have written to the Prime Minster of India to the Finance Minister of India, the RBI the Bank of England and the Treasury Select Committee trying to get an investigation into the illegal behaviour of HSBC and what action have they taken against HSBC?

Has HSBC seen Indian citizens as easy prey, how many innocent victims are there?

What is the duty of the RBI to the citizens of India?

Kind regards

Michael Mason-Mahon

Mobile: 0044 7834763544

Mobile: 0044 7448770801

E-mail: [email protected]



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

Michael Mason-Mahon

4 years ago

Dear Dr KC Chakrabarty

With the greatest of respect Sir, I am no Banker but I think you are just to trusting of the Banks. Big fines may not work, the one thing they do is attract media attention, with this attention people will know what type of Bank the are dealing with.

Allowing individual banks are free to decide their own charges is a recipe for disaster for the customer.

As for the problem of a cartel being formed, it would have much more meaning if the RBI asked the Competition Commission to inquire. The RBI could refer this to the Minister of Finance

You may like to google complaints HSBC India and see what HSBC have been doing in India for years.

Look at what Banks have been doing in the rest of the world and their illegal behaviour around the world.

Is it not the responsibility of every Government and the Regulators of that Country to protect their citizens above all else. No Bank can have more rights than a citizen, no Bank can have more protection than the citizen.

A Bank's profit cannot be at the cost of the citizen's rights. If this happens are not the Government and the Regulators of that Country being negligent in their duty to protect their citizen's?

The amount of complaints against Banks and about their behaviour is not only shocking for the reader of their complaints, it must be a thousand time worse for the individual or family's going through this.

This is why I have help many people in India with their complaints against HSBC.

Only recently I have discovered that Mr Lewis the Head of Customer Relation had written to the Financial Conduct Authority in London,saying I may make a complaint about HSBC forcing me to close my account, did he tell the truth, the whole truth and nothing but the truth? No way.

Is HSBC trying to discredit with the FCA and with the RBI?

Have HSBC made fools of the FCA?

Senior staff have stated HSBC was writing to the RBI, will HSBC make fools of the RBI?

I have helped many people in India against HSBC and resolved every case to the satisfaction of the customer and no of HSBC, what has the RBI done about the illegal behaviour of HSBC?

I have written to the Prime Minster of India to the Finance Minister of India, the RBI the Bank of England and the Treasury Select Committee trying to get an investigation into the illegal behaviour of HSBC and what action have they taken against HSBC?

Has HSBC seen Indian citizens as easy prey, how many innocent victims are there?

What is the duty of the RBI to the citizens of India?

Kind regards

Michael Mason-Mahon

Mobile: 0044 7834763544

Mobile: 0044 7448770801

E-mail: [email protected]



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

Dekho ji.com

4 years ago

Looks like its time to seriously think about free market economies. Free market means profit, profit and ever increasing profits. Does not matter whether the profit is 10% or 1500%, profit must be made at all costs to please the "stock market investors" that their company is making more profits every quarter. What these stock market investors dont understand is that huge profits means its going from the customer's pockets in one way or another. So, a company will give Rs 50 dividend and in return, your petrol prices will increase by 5 Rs. Now, you decide for yourself, you want to enjoy your earnings of Rs 50 per share of this company or be sad about spending 1000s of more money on your petrol expenses. This same thing applies to all private companies in today's free market madness. So, whenever you see a company paying dividend or making huge profits, be sure that inflation will continue to rise and your money's value will keep going down. When will people realise stock markets DONOT represent country's growth, it only represents COMPANIES MANAGEMENT PEOPLE's growth. Companies reduce their employee's salary and then show profits. Who benefits ? A few corporate honchos and their families. What about the rest ? Their salary remains miniscule. 1% richer vs 99% poorer.

ABHA CHAWLA MOHANTY

4 years ago

IS RBI SERIOUS ON GOVERNANCE ISSUES??.....OR,BURY THE HATCHET ,,,,,????

Babubhai Vaghela

4 years ago

Manmohan Singh gone mad deploy mad Banker as Dy Governor RBI.

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