Maharashtra State Co-operative Bank gets licence from RBI

The MSC Bank and 11 district central cooperative banks from Maharashtra were functioning without banking licence so far

Mumbai: The Reserve Bank of India (RBI) has issued banking license to the Maharashtra State Co-operative (MSC) Bank. “The bank obtained the license from RBI,” a senior government official told PTI.

The state government had written to the Centre to extend by two months the 31 March 2012 deadline set by the RBI for 11 District Central Co-operative Banks and the State Co-operative Bank to obtain the banking licence.

The Rakesh Mohan Committee recommendations, which have been accepted by the Union Finance Ministry, have made it mandatory for all the cooperative banks to get a licence before the deadline.

Across the country, there are 134 banks which do not have licence from RBI. If the banks are unable to get the licence before the deadline, they will have to become a cooperative credit society, or merge with another bank.

Maharashtra State Co-operative Bank and 11 district central cooperative banks were functioning without banking licence so far.

On 28 May 2012 last year, the RBI, on the recommendation of NABARD, had dissolved the board of directors of Maharashtra State Co-operative Bank, controlled by senior NCP leader and deputy Chief Minister of Maharashtra, Ajit Pawar, for financial irregularities.

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Life insurers’ new business premiums down 9.2% in FY12

Market leader LIC recorded 6% decline in first year premium collection while some private life insurers witnessed increase in new business

New Delhi: According to a data from regulator Insurance Regulatory and Development Authority (IRDA) total new business premium of life insurance companies in the country declined by 9.2% to Rs1.14 lakh crore from Rs1.25 lakh crore during the financial year FY12, PTI reports.

Market leader Life Insurance Corporation of India (LIC) recorded 6.1% decline in its first year premium collection to Rs81,514.5 crore from Rs86,444.7 crore a year ago.

LIC’s market share stood at 71% at the end of March 2012, according to the data. India has 24 public and private life insurance companies. The combined first year premium of private sector life insurers, declined 16.9% to Rs32,718.24 crore, from a year ago.

MetLife India showed a 52.7% increase in its first year premium for the period under review to Rs1,074.9 crore, from Rs703.95 crore a year ago.

DLF Pramerica witnessed a rise of 38.9% in its first year premium to Rs102.83 crore, Star Union Dai-ichi had an increase of 27.18% to Rs964.77 crore and IndiaFirst's new business premium rose by 39.38% on the year to Rs 982.31 crore.

The non-life insurers, however, showed an increase in their premium collection during 2011-12 to Rs58,344.16 crore, up 23.2% over Rs47,372.78 crore in 2010-11, the data said.

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Life Exclusive
Can we hold celebrities responsible for products that cheat?

It is a question of time before the so-called brand ambassadors are held liable for issues like cheating in real estate or financial products, soft drinks and packaged food. After all, if cricketers and actors built their palaces on the money earned from advertising these products, then they need to consider paying for the hospitals required to cure those affected too

Genelia D’Souza, a Bollywood actress was recently summoned by the Andhra Pradesh High Court to explain her version in and role as brand ambassador in a real estate project called ‘Anjaniputra’ located close to Hyderabad Deccan that seems to have gone bust. This is the latest in how society and the laws in India are dealing with the extremely vexatious issue of misleading and deceptive advertising. It is a matter of time before similar questions are raised by other consumers, swayed into investing in products or services, by fraudulent advertisements endorsed by celebrities who are supposed to also be role models.

There are other examples as well. A clear example is the way the Goa government put a rapid end to the Airtel ad defaming Goans and Goa. If the state hadn’t, the implication is clear, this would have become an electoral issue. So, the chief minister of Goa moved and issued a simple ultimatum on behalf of the people of Goa. This is something the advertising industry has yet failed to recognise—the power of the voting public to correct such flagrant arrogance by advertisers and their agencies.

Just like with politicians, an advertisement or the brand ambassador and product behind it, can simply be voted out. Thrown out in disgrace. This message is clear—the advertiser and ad agencies cannot work on the premise that the Indian consumer is a fool. They had better learn to respect their constituency—the consumer.

Well, agencies must also question whether leading “brand ambassadors” like Sachin Tendulkar, Amitabh Bachchan and Shah Rukh Khan really have the credibility to achieve much. After all, the success of a product or service does not often correspond to that of the amount paid for the endorsement—especially when their movies don’t do well or the centuries stop flowing from their bats.

Pepsi ad

The list of endorsed products and service which flopped is almost as long as the list of brands for which these celebrities provided their name and face. But that's business, win some, lose most. However, when it comes to absolute cheating or the products are found to be harmful, what is the liability for the said brand ambassador? Shouldn’t the brand ambassador be held liable, too?

Sanjay Dutt, Goa gutkha

It is a question of time before the so-called brand ambassadors are held liable for issues like cheating in real estate or financial products, bad health due to soft drinks and packaged food and similar products. The laws exist, and retrospective amendments appear to be the flavour of the season—especially when they are brought in with an eye on the electorate, remember. After all, if cricketers and actors built their palaces on the money earned from advertising soft drinks and breakfast cereals, to name just two products, then they need to consider paying for the hospitals required to cure those affected too. These are misleading advertisements which have consequential effects. What about direct frauds?

In one such case of a direct fraud and outright cheating due to misleading advertisements called the “Home Trade scam”, going back to 2002, where almost Rs2,750 crore of investor funds were literally stolen and transferred to Mauritius, the luminaries endorsing the whole fraud were none other than Sachin Tendulkar, Shah Rukh Khan and Hrithik Roshan. This, by the way, included almost Rs100 crore of Seaman’s Provident Fund money—so there is a personal disclosure here, as I am an ex-seafarer. Please recall—this was in 2002, and the Bofors scam of about a decade before that was for all of Rs60 crores or so.

More details on this fraud, which is still not resolved, can be read here:-

Home Trade scam: still waiting for justice

On the other hand, this is what Piyush Pandey of Ogilvy & Mather had to say about the subject, way back in 2002: “Mr Pandey strongly believes that the Home Trade scam will neither affect the status of these celebrities nor the trend. I think celebrities just do their jobs for the money they get from the company. And they have nothing to do with the company.”

Blame The Brand, Not The Ambassador: Experts

(The Seaman’s Provident Fund money, by the way, was repaid in full by the Government of India, out of our tax-payer’s money. And I presume the advertising agencies will be following fresh developments on this issue carefully, as will the celebrities. The almost total absence of cricketers and movie stars from soft drink ads in the recent past is one such aspect. Mr. Pandey might wish to consider getting his brand ambassadors to reimburse the Government of India on this one head alone, to start with?)

Move on to the present date. The dividing line between a paid advertisement and an editorial or news report has almost vanished in most mainstream media. But this deception has not gone un-noticed, and at a recent seminar held in Delhi under the aegis of the ministry of consumer affairs, the larger issue of misleading advertisements of all sorts having reached menacing proportions was brought out.

Moneylife’s managing editor Sucheta Dalal was an invited speaker at this seminar and her presentation is going to be provided along with this article. The seminar brought out the following aspects of misleading and fraudulent advertising:

# Due diligence and restraint to be exercised while working within the guarantees of freedom of speech
# The definition of the term “misleading advertisement” globally and in India
# The shared responsibilities of the three stake-holders—advertiser, advertising agencies and the media
# The problem of misleading advertisements in India despite legislations
# Liability of endorsements by “brand ambassadors” or similar
# Suggestions from the consumers and others impacted by misleading advertisements

(For more info click here)

Moneylife shall follow and report on this subject regularly, and readers are invited to provide their views.

(Veeresh Malik had a long career in the Merchant Navy, which he left in 1983. He has qualifications in ship-broking and chartering, loves to travel, and has been in print and electronic media for over two decades. After starting and selling a couple of companies, is now back to his first love—writing.)

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COMMENTS

P M Ravindran

5 years ago

While brand ambassadors should be held responsible for what they promote in public, shouldn't the public themselves keep away from false advertisements because isn't it evident by now that advertisements are all basically a pack of lies?

REPLY

pravin

In Reply to P M Ravindran 5 years ago

or is it? if ads are an obvious bunch of lies,why are they so ubiquitous? perhaps people like to listen to lies.is that what you are implying?
if we can put up with the lies of our elected representatives -against the actions of whom,we have no choice,but to comply,we should cut celebrities in ads some slack.afterall they never put a gun to our head to buy the stuff they peddle.our political masters dont give us that choice.if we dont abide by their whims which they call 'legislations' to accord respectability,we will be jailed or punished. why the double standards?why treat our MPs and 'national heros' with soft gloves?

P M Ravindran

In Reply to pravin 5 years ago

One thing does not automatically lead to the other. The laws are enacted for common good, though, unfortunately, it doesn't seem to be exactly so in our country. The failure to implement fair laws without fer or favour should not be an excuse to give license to celebrities to fool/cheat gullible citizens.

Praveen

5 years ago

When brand ambassadors are being paid portions of the fraudulent earnings, they also become members of the same flock, so they should also be prosecuted for neglecting the well being of those who trusted them

ghpd

5 years ago

If the product can sell on its own merits, why would you need endorsements for public life figures?
BECAUSE their endorsement implies all the falsehoods stated in the ads are correct.
These people must be made answerable for any negative consequences arising from their product e3ndorsements-especaill in s country like ours where hero worshiping is common.

israo

5 years ago

We should insist for a disclosure on every advt promoted by a Brand ambassador confirming:
"I HAVE NOT USED OR USED THIS PRODUCT /SERVICE PERSONALLY"
This will ensure that people are not mislead, and it is only an advertisement not an endorsement.

Adit Shirvalkar

5 years ago

Thought provoking article. But spare a thought for the Ambassadors. What if they themselves are victims of the claims made by the management of the company whose brand they endorse? Amitabh Bachchan has no real way of knowing whether the cement brand he endorses would really make the structures last "for generations to come". The only thing he has is the assurance that the company gives him, and the results of the tests under expert supervision that the company, in a controlled environment, conducts, which Big B would be inclined to believe in. If we make him responsible for a building that crumbled, arguably because of the cement used to construct it, brand endorsements will become extremely onerous. In the end, it is, and always has been the consumer's responsibility to make the right & informed choice. Caveat Emptor applies here too. The regulatory mechanism should be such that will give consumer the assurance that the product is at the very least, consumable, thus helping consumers make the right choice. Making celebrities responsible will only stop the endorsement business, it will not result in better products.

REPLY

malq

In Reply to Adit Shirvalkar 5 years ago

Thank you for writing in . . . the way I see it there are two separate dynamics at play here:-

1) The accomplishments and achievements of the individuals, in cricket or entertainment, are extremely inspirational. They do deserve praise, glory and all the rest that goes with it.

2) The second commercial angle, where the same accomplishment and achievements are then traded for products and services of doubtful integrity, are a mismatch.

One would think that the just a fraction of the same dedication and effort that went into the first was also used for researching the product or service endorsed.

That's the least these great people owe their constituencies.

Humbly submitted/VM

pravin

In Reply to malq 5 years ago

how about the BUYER exercise a fraction of his time and dedication to doing some due diligence before plonking his hard earned money? are you absolving the consumer of this basic responsibility?
The celeb if associated with a fraud scheme loses his reputation.that is all the consumer is basing his purchasing decision on,if he does not do any due diligence.yes,the reputation will be torn to tatters.the idea of legally holding ads responsible shows a lack of understanding of both advertisments and contract law

Nitin Sanzgiri

In Reply to malq 5 years ago

Very true

Prem

5 years ago

No way these celebrities would accept, if anything goes wrong. Do you think people like tendulkar asking for a duty waiver for free imported car and amitabh who call himself a farmer to claim tax deductions are responsible citizens? no way ! these people are money-suckers and in now way they are contributors to the society.

REPLY

malq

In Reply to Prem 5 years ago

Thank you for writing in, Prem ji, and your views find resonance.

You should share them along with this article to a wider audience.

Best/VM

Anand Desai

5 years ago

Re: Celebrity Endorsements.
Its high tim ethat these celebrities are made accountable for the products they so proudly endorse. Imagine a Sanjay Dutt staring into your face and produly announcing a Pan Parag type of a masala -- does he eat it regularly. Can he put it on an affidavit?
There are millions of instances where children get carried away by such advts for their products.
To start at least lets get the celebrities to make a publicstatement as a part of the ad that they consume the same product regularly

REPLY

Nitin Sanzgiri

In Reply to Anand Desai 5 years ago

I entirely agree

malq

In Reply to Anand Desai 5 years ago

Dear Anand Desai, thank you for your message, and very valid point.

Maybe you can help by distributing your views and this article more widely?

Best/VM

Yogesh

5 years ago

This is what happens when you get addicted to a wrong product like soft drink. http://gawker.com/5903816/kiwis-coca+col...
Its still not too late, WAKE UP and stay AWAKE

REPLY

malq

In Reply to Yogesh 5 years ago

Thank you, Yogesh, for posting this link.

Hopefully such reports also reach the family members of those who are endorsing these cancer colas, and their own children and friends pull them up for it.

regards/VM

Anuradha

5 years ago

There are two aspects to this : First is celebrities being responsible for what they endorse that you have addressed well in your article. Second is celebrities telling white lies to their fans who follow them by saying (in advertisements) that they use certain products that they certainly do not. For example, do you think Kareena Kapoor or amitabh Bachchan use Boro Plus, if not are they not lying for money.

Third one is that the fat fees that they get adds to the cost of the product which is borne by the customer. Minus the celebrities, products will cost less and there will be no mad following for being a bollywood celebrity if the money is not so luring. At a society level this would lead to a little less economic divide.

Like you say I also wonder if these investments in celebrities really result in the sales and I think the answer lies in marketing departments of large corporations wanting to be cosy with stars and less in the real strategy. If both Coke and Pepsi continue to pay big amounts to rival stars and when they are the only two players in the market, who is benefitting with these endorsements - stars only and the people who are trying to get in their inner circles by paying them. Both the company nor the customers pay for this fancy relationship.

REPLY

Prem

In Reply to Anuradha 5 years ago

If they are lying for money, they cannot be called as ambassadors or icons.
They are day-light robbers, who do anything for money.

malq

In Reply to Anuradha 5 years ago

Dear Anuradha, thank you for writing in, and valid points by you.

The celebrity depends on his or her "drawing power", which itself is based on some perception management, which now destroys itself with ads for products or services that are known to be fraudulent or misleading.

Yuvraj Singh's episode with cancer will surely make his fellow cricketers and fans wonder - was this due to soft drinks? People of my generation will remember Budhi Kunderan, wicket keeper extra-ordinary and batsman par excellence, amazing entertainer - gone due to lung cancer.

In the present case, it is only the actress who has been summoned to explain her role by the Courts, but yes, you have a valid point - all the rest in the chain need to be brought in too. The agents, the ad agency, the media in which the ads were carried.

And this needs wider publicity.

Please share this article. We all have to do our bit too. Send it to the cricketers, the movie stars - and let them know, we don't like what they are doing.

And that this over-indulgence in endorsing misleading and fraudulent products and services doesn't do any wonders for their image or performance, either.

Regards/VM

Anuradha

In Reply to malq 5 years ago

Please let me know how can I contribute a complete article on this topic. Will be happy to do and do more than writing to bring awareness about this issue.

You have my e-mail Id, please feel free to write to me.

malq

In Reply to Anuradha 5 years ago

Anuradha ji, may I suggest/request you get in touch with the Editor c/o the link provided here please?

http://moneylife.in/contact_us.html

rgds/VM

m k sujitkumar

5 years ago

Yes brand ambassadors should be made
accountable for what they stand for ethics had died in advertising like in other walks of life.

DrSharmila Rao PN

5 years ago

Maybe it is a good idea to make them accountable for the products they endorse, alcohol in guise of soda. The tobacco endorsed by cricketers on their uniform etc.
Gutka, is another scare.

REPLY

malq

In Reply to DrSharmila Rao PN 5 years ago

Most certainly, surrogate advertising needs to be controlled, and very soon. In addition to alcohol, gutka - there is also surrogate advertising for products as diverse as chocolates (hydrogenated oil+colour+sugar/sweetener), banks (assorted financial products), juices (coloured water+sugar/sweetener), and much more.

Hopefully this will be addressed. And very soon.

rgds/VM

Java

5 years ago

The culpability should be with the ad agency and the media as well. No one seems to be bothered about the snake oil products and "escort/massage services" and "friends" international calls, being sold all over India through the language papers. Government and the media both seem to have taken a see-no-evil approach.

REPLY

malq

In Reply to Java 5 years ago

Dear Java, very true - and the sooner we protest and make our voices heard, the better.

rgds/VM

NN Bala

5 years ago

Same ploy used by religious Gurujis . They rope in IAS,IPS and celebreties as their devoties. You think if these powerful guys are their devotees, there must be definitely some supreme power with these Gurujis. You too run after these Gurus , waste your time and spoil your life.

REPLY

dr sharmila rao pn

In Reply to NN Bala 5 years ago

However much I would like to support you, this does not fall in the realm of advertisement, it is the follower's psyche that inspires this

sachin

5 years ago

If I click an ad on moneylife.in, go to the advertiser's site, purchase a service or product, the site turns out to be fraud and I lose my money, will moneyllfe.in compensate me?

Will moneylife be responsible for my loss?

REPLY

Yogesh

In Reply to sachin 5 years ago

Good observation, Sachin. (hope you are not Mr T). As a regular reader of Moneylife, I can tell you and understand the difference between a fraud and genuine ad. In addition, the ads displayed here are sent by Google depending on keywords. And I dont think Moneylife sells any loss making, fraud or cheating product!

nn bala

In Reply to Yogesh 5 years ago

Videocon advertising its latest Air conditioners release vitamin C in the Air and claims its AC has anti bacterial filters. The Co. thinks all public are fools and they are only smart.

drsharmila Rao pn

In Reply to nn bala 5 years ago

Bala, there are people who believe this it is impossible to counter the belief that is driven home by the persistent TVadvt.

malq

In Reply to sachin 5 years ago

Dear Sachin, and thank you for writing in.

1) There will certainly always be a shared liability. Just like a doctor has a malpractice liability despite best intent.

2) I would presume that the medium (print / television / internet) would either seek and put into position indemnities from the advertisers or seek and position the required underwriting to cover themselves from direct or extended liabilities.

To your direct question - would the medium, in this case moneylife.in, be responsible and reimburse? The answer would need more details please.

Regards/VM

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