Money Transfer: Empays’ Instant Money Transfer Service Gets RBI Approval

Empays Payment System, a provider of multi-bank payment systems, said its instant money transfer service has received authorisation from the Reserve Bank of India (RBI). “The Reserve Bank has awarded the IMT payment system certificate of authorisation under the Payments and Settlements Act 2007,” Empays’ release said.


The IMT payment system is a multi-bank mobile transfer solution that combines mobile phones and ATMs to reach the un-banked, making it a unique milestone in money transfers, payments and financial inclusion in India. The certificate enables the IMT payment system to access clearing and settlement arrangements between member-banks directly, thereby enabling the system to work across banks, the release added.


Insurance: Let Customers Know Their Rights: Bombay High Court

The Bombay High Court has directed the Insurance Regulatory and Development Authority (IRDA) to consider issuing appropriate instructions to all insurance companies to inform policyholders about remedies available to them in case of rejection or part-settlement of their claims.


A division bench of Chief Justice Mohit Shah and Justice BP Colabawalla directed the regulators also to consider asking risk firms to let policyholders know the reasons for its action on the claims. The directions were given during the hearing of a public interest litigation (PIL) filed by activist Gaurang Damani.


Suggestions for NPAs

This is with regard to “Half a Prescription by RBI?” by Sucheta Dalal. Dr Raghuram Rajan (governor of the Reserve Bank of India) made bold to lay things bare, while the solutions that lie at his doorstep are still to be explored. Why not list all the directors on the boards of all these corporate defaulters and disqualify them from being on any other board for the next two years? Second, that list should also include the official or nominee directors if they did not raise their voice in any of the board meetings that examined the proposals for sanction, or while discussing NPAs (non-performing assets), or while approving the CDR (corporate debt restructuring). If the government supports, make the list of directors even public.


Reform the CDR mechanism and make it more friendly for the MSMEs (micro, small & medium enterprises). If banks had obtained collaterals from the MSMEs, where they are not supposed to, under the existing regulations, CGTMSE (credit guarantee trust for medium and small enterprises) provides for collateral-free lending up to Rs1crore to MSEs), they should not have the right to proceed against the borrowers. If they are wilful defaulters, banks should file money decrees and attach their properties for realisation, taking all the consequences for such declaration.

Yerram Raju Behara, by email



Forced Goodness


This is with reference to “Forcible Do-gooding” by Sucheta Dalal (Moneylife, 13 November 2014). I share the scepticism about the relevance as well as validity of mandatory CSR (corporate social responsibility). I wonder whether it is legally tenable for a government to tell business firms how much of their profit should be allocated and for what purpose. It is time the very concept of CSR and its hidden compulsions are exposed and scrapped.


The very purpose of tax collection by the government—on profits of businesses and incomes of individuals—is to serve the society, i.e., economic and social development! And it should be the shareholders’ privilege to decide what to do with the profit and not of the government of the day. Only under socialism, the State had control over such decisions. Did we not grow out of that?


It is also true that once compulsion is introduced, people and companies will find ways to sneak out and even profit from it. Do you know that, now, small and medium-scale entrepreneurs want 20% of the CSR donation ‘back’ to them for personal use? That means, for every Rs1 lakh of CSR support, an NGO must find Rs20,000 to ‘pay back’ the entrepreneur or his/her agents. What a cash back opportunity! And that needs black or unaccounted money which most ethical NGOs won’t have or can’t arrange. So, who benefits from the CSR? Of course, the chartered accountants and consultants who offer to help arrange this. The genuine spirit of CSR—to give back to the society—may be lost.


Add to this one more questionable development. States like Gujarat have recently set up a CSR Authority, to be headed by a recently retired government officer, of course, an IAS officer who is well-respected by the industry. He will collect the CSR money and decide who should get it. So, the fear that at the Centre money will be diverted to PM’s Relief Fund or his ‘clean India drive’, and at state level, government-dominated authorities will control and regulate the funds. No NGO or profit-making company will interact directly.


This is bound to happen.


At the end of the day, the freedom of choice of the companies and its shareholders is gone, and governments will end up with dominating influence on the profits of the successful businesses. Why is industry not objecting to this compulsion under CSR? Have Indian entrepreneurs become so socially conscious that they love to spare 2% of their profits for social development? Or is it that FICCI and ASSOCHAM and chambers of commerce are keen to please the government of the day by simply complying with the fiat on CSR?

Yes, no real funds are likely to come to deserving NGOs which are struggling for support.


As a long-serving NGO, I have yet to find a single entrepreneur who is willing to take up any of my projects of social relevance. Major ones have their own priorities. Large ones, like Tata and Mittals, would go for PM’s call for toilets and score with him. SMEs are too small to do much on their own. So, the good ones will give their freedom to the newly created, government-dominated authorities. And the smart ones will make money out of even this government fiat by getting 20% or 30% CSR funds back to their personal accounts to enjoy life. So whose achcche din will we celebrate? At least, not of any NGO.


Sooner mandatory CSR is scrapped, the better. Profit belongs to shareholders and entrepreneurs who work hard for it. Let them decide how much to spend and where. We are now a market-driven economy. Socialism is gone because it failed in India and in rest of the world. The government has no business telling businesses where to spend the profits. Thank you Sucheta. Let us start a ‘Drop CSR’ campaign.

Vihari Patel, chairman, Consumer Education & Research Centre, Ahmedabad, by email



Recover Public Money First!


This is with regard to “Half a Prescription” by Sucheta Dalal. This is an interesting article, but please don’t paint all bankers alike. At United Bank of India (UBI), we declared Kingfisher as a wilful defaulter and wrote to SEBI. How could he directly borrow from the public when he had defaulted wilfully to pay public money borrowed indirectly from banks?


It’s only now that SEBI has come out with some rules. We, at UBI, were the first to identify UB Holdings as a wilful defaulter based on its balance sheet as on

31 March 2014. It’s an interesting analysis. Who else has done this, as a banking professional? While declaring Kingfisher as wilful defaulter, we won the case even in Supreme Court. Why can’t all government agencies work in tandem to recover the money diverted by such defaulters? Everyone is happy bringing fault to the doorstep of a banker. But, for God’s sake, let’s trace and recover public money first. Accountability can be taken care of side by side.

Deepak Narang, executive director, United Bank of India, by email



Suggestions Directly Under RBI Control


This is with regard to “Half a Prescription” by Sucheta Dalal. This is a good article; it would be better if Moneylife could include suggestions directly under RBI’s control. For instance, could group-lending-limits be made subject to CRISIL-type ratings and be dynamic with repayment performance? There could be automatic ratcheting downwards of the limit by 10% (say) with each missed instalment payment by any group company. Could margin requirements be set, based on the rating? It could range from 25% to 50% (e.g., for bullion loans).

Dr Prakash Hebalkar, Online Comment



Vanishing Act?


This is with regard to “Fighting Regulations” by R Balakrishnan. I know of a domestic help (servant) being sold policies on the promise of a huge sum of money at the end of the period. I do not know about the fate of her money, though I am trying to locate her.


Another case is that of an auto-driver. The agent, who collected premium for a few months, is no more available. I showed him how to pay the premium to the insurance company.


Both the cases are of unit-linked insurance policies with life cover.

PDVS Mani, Online Comment



Rating Insurance Providers


This is with regard to “Health Insurance for Senior Citizens” by Raj Pradhan. MSSN Premium members should be provided an opportunity to rate their insurance providers under the various criteria. Moneylife can use the aggregate data to produce an average rating of the insurer from 1* to 5* on an overall basis as well as on each specific evaluation criterion.

Ralph Rau



Religious Duty


This is with regard to “Talking Up the Walk!” by Prof BM Hegde. Thank you professor. I live in Bengaluru and most parks here, in this lovely garden city, have nicely tiled walk-ways inside. Luckily, I have one right in front of my home. For almost two years now, I have made it a religious duty to walk and I walk for a full hour every day, except when it rains! I am glad to confirm my BP is under control and have no other ailments. I went one step further. Each round, which is 850 steps, I spend in doing one mantra, or prayer, and changing to another in the next round. This additionally keeps my communication with God and I can tell you it is a pleasant experience. I do not recommend talking and walking!


Thanks for writing on this interesting subject. I enjoyed reading it.

Dr Anantha K Ramdas


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