Need MFI regulation to save interest of small borrowers: Finance ministry

Terming micro finance as an important plank in the government's agenda for financial inclusion, Shashi Kant Sharma, secretary, Department of Financial Services, said the sector needs to be put on the path of providing inclusive growth in society

New Delhi: The government today said it is considering establishing a regulatory framework to deal with concerns relating to the micro finance sector, which has been under attack for charging exorbitant interest rates, reports PTI.

"There is a need for proper regulatory framework for micro finance institutions (MFIs) for protecting interest of small borrowers," secretary, Department of Financial Services, Shashi Kant Sharma, said at a Ficci event here.

He said the government is considering "establishing the framework to deal with the concerns of micro finance institutions".

Mr Sharma added that strong and effective regulation of the sector is necessary to put an end to illegal practices in the sector.

"... Sudden and rapid growth of MFIs has given rise to lending malpractices by some MFIs," he said at the national conference on micro finance organised by Ficci here.

Terming micro finance as an important plank in the government's agenda for financial inclusion, he said the sector needs to be put on the path of providing inclusive growth in society.

The MFI sector had come under controversy in recent times with charges being made against many players that they levy exorbitant interest on farmers and other poor sections.

Micro finance-the business of doling out small loans at high interest rates to poor people-has come under intense regulatory scrutiny in the wake of an ordinance passed by the Andhra Pradesh government in October last year.

The Ordinance, now passed into an Act, came in after suicide by farmers allegedly due to inability to repay debt at high interest rates charged by MFIs were reported in the state.

Also there were allegations that MFIs were using strong-arm tactics to recover loans. With such allegations, the Reserve Bank of India formed the Malegam Committee to look into the health of the MFI sector in India.

The committee, which submitted its report in January, recommended creation of a separate category for Non-Banking Financial Companies (NBFCs) operating in the MFI sector and capping interest rates at 24%.

Speaking during the occasion, Ficci director general Rajiv Kumar said that MFIs need to diversify and provide access to financial services other than credit such as savings and insurance.

Mr Kumar suggested creation of forward and backward market linkages for MFIs to help them in reducing risks on loans to clients as also encourage rural entrepreneurship.

User

Scamsters offer $7.5 lakh and iPad2 in a lottery on the Tata Motors name

Scamsters are on the prowl once again. This time they have used the name of Tata Motors to offer a lottery of $7.5 lakh and an Apple iPad2, similar to the BMW lottery scam last year

After using the Reserve Bank of India's name for awarding booty, this time the scamsters are using the Tata Motors name to offer money and Apple's new iPad2 in a lottery. However, this time the scamsters have used an old method while sending e-mails, like using the same content with minor corrections (adjustments!) in the mailer. This latest e-mail in the name of Tata Motors is a clear case of a 419 scam. But more on 419 scams later.

The scamsters have used two names in the e-mail, 'MR. Alfonso. M. Alejandro' and 'Prince Dr. Maria Jose Mayors'. Both these names have been used in an earlier instance also in lottery e-mails. The scamsters have also used the name of BMW earlier and have now chosen to use the Tata Motors' name to offer the lottery.

Here's what the e-mail says. "From TATA Automobile Company UK is here by congratulate you as one of our FIVE (5) Star Prize Winner, in our 2011 International Awareness Promotion Online Draw (IAPOD) host in INDIA. This makes you the owner of this Email an owner of a New Apple iPad 2 WI -Fi + 3G classic Model and cash prize of ($750,000.00 US Dollars)."

For the BMW lottery mails the scamsters used the line, "The BMW Automobile Company, congratulate you as one of our Ten (10) Star Prize Winner in our 2010 International Awareness Promotion (IAP) held in Madrid. This makes owner of a brand new BMW 5 Series car and a cash prize of €850,000.00 EUROS."

The mail asks the recipient to send personal details like name, age, address, sex, annual income etc, or contact on some numbers from the UK. The funny part is the scamsters have used Tata Nano images as well as a number of images from different manufacturers and their logos, like Nokia, Apple, Intel, Mozilla Firefox, Acer, Compaq, CSE and so on. The mail also has a copyright assigned to Tata Motors and a standard disclaimer!

This mail is sent by Tata multipurpose group India from tatagroupautoindia@geeks.ms with a subject line that reads 'TATA 2011 GLOBAL FINANCIAL AWARD PROMO'. The question to ask is why would the Tata group send an e-mail using an unknown e-mail service provider like geeks.ms? In addition, there is no entity called 'Tata group auto India' and the group uses simple names like Tata Motors Ltd or Tata group.

There are more discrepancies that regular Moneylife readers would be able to identify easily as there are plenty of 'red' signals in the e-mail. Even if one assumes that all else is true, why on earth would the Tata group offer money to an individual, and that too in US dollars?

Tata Motors officials were not immediately available for comment.

Clearly, this is yet another fraud in progress. So, if you receive such a message delete it immediately. Here are some points to keep in mind to help identify such fake messages.

The scams are widespread, so governments and websites like www.truthorfiction.com, www.fraudwatchers.org, or www.scambaits.com give special attention to this matter, to help potential victims and to catch scamsters. The website of the Nigerian Central Bank has a warning on the home page that says, "If it looks too good to be true, it usually is." The US Secret Service and the British National Criminal Intelligence Service undertake regular investigations and issue regular warnings to people.

The so-called '419' scam is a type of fraud commonly committed by criminals from Nigeria and other African countries. Victims of the scam are promised a large amount of money, such as a lottery prize, inheritance, or money sitting in some bank account. Victims never receive the non-existent fortune, but they are tricked into sending their money to the criminals, who remain anonymous. They hide their real identity and location by using fake names and fake postal addresses, as well as communicating via anonymous free e-mail accounts and mobile phones.

Here is advice from 419.org: "Keep in mind that scammers do not use their real names when defrauding people. The criminals either abuse names of real people, or companies, or invent names or addresses. Any real people or companies mentioned below have no connection to the scammers!

Related topics:

User

COMMENTS

kabal singh

7 years ago

its outstanding.. TATA

AERB to reassess safety measures at Indian N-plants

Out of the 20 reactors (19 are in operation) in India, only Tarapur Atomic Power Station's units one and two are Boiling Water Reactors (BWRs), similar to ones at Fukushima, AERB stated

Mumbai: The Atomic Energy Regulatory Board (AERB) today said it would carry out a comprehensive reassessment of safety and emergency mitigation measures at all the Indian nuclear power plants, in the light of the crisis in Japan, reports PTI.

Emergency preparedness plans exist for all nuclear power plants in India, and they are periodically "rehearsed", AERB said here.

"However, in the light of the unprecedented event in Japan, AERB will be carrying out a comprehensive reassessment of safety and emergency mitigation measures of all Indian nuclear power plants," AERB secretary R Bhattacharya said here in a statement.
AERB is constantly monitoring the situation at Japan's crisis-hit Fukushima nuclear plan, he said.

"A detailed review will be taken up by us as soon as full information (on situation in Japan) becomes available," Mr Bhattacharya said.

Out of the 20 reactors (19 are in operation) in India, only Tarapur Atomic Power Station's units one and two are Boiling Water Reactors (BWRs), similar to ones at Fukushima.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine)