Spending
Now pay for check-in baggage as ministry allows airlines to levy charges

Civil aviation ministry has permitted five domestic airlines to charge for various facilities, including a charge for the complementary check-in baggage. This has sent shock waves among the travelling community. Is this practical?  How will it affect the regular traveller?

The ministry of civil aviation made an announcement, permitting the five domestic airlines to charge for various facilities, including the issue of charging for the checked-in baggage (currently at 20 kg free), may be good news for the airlines but not for the travellers. The only good news is bottled drinking water will be given free, as hitherto!

 

 These airlines can now charge for the customarily free check-in baggage (20 kg free allowance); in-flight meals, snacks, soft drinks, etc.  Even the hand baggage, classified as “cabin baggage”, including the computers, with pre-set size/dimensions and weight, not exceeding 7-9 kg (depends upon airline and the mood of check-in-counter-staff), may also be subject to a charge.

 

Luckily, the ministry officials, or whoever, forgot to put a charge for the in-flight music or movies; one never knows, they may include this at a later stage!

 

On the top of these, for choosing one's ‘lucky’ seat or a comfortable seat with lots of leg space will now attract a price!  All these will be additional costs to the price of the ticket, irrespective of the base price, or when one booked it as an early bird or bought it in a hurry at the airport!

 

The ministry has neither announced the date when these will be effective nor any MRP fixed for each of these facilities.

 

One wonders if this proposal has been announced on the basis of applications made by the airlines, jointly or severally? Or is it the brainwave of the ministry?

 

Anyway, let’s take a look at what is really happening at the moment.

 

Excepting for full service airlines like Air India and Jet Air, others also offer services of various kinds, like in-flight food (meals/snacks) at a price.  A seasoned traveller either takes his/her meals/snacks at the exit point in the airport, most of which have fairly well-organized eateries or chose do so on arrival at their destination.

 

Now, first things first, in review of this proposal.  Almost everywhere (except for international travel passengers) one check-in baggage of 20 kg has been “free allowance” so far. International passengers, if they have to connect and take a domestic airline for travel internally, are extended the courtesy of two baggages (23 kg or 50 lbs in case of US origin) to facilitate their arrival.  Whether they will be affected by this new ruling is a question, though, it looks unlikely.

 

However, what is really happening is that passengers manage to carry several hand baggages right through the check-in counter to the security area, obtaining cabin-baggage-tags; once in a while. However, a surprise security/hand baggage check is done as the passenger boards the coach that ferries him/her to the aircraft, when it is taken away and put in as a “checked-in” baggage, at no extra cost. This needs to be curtailed as overall aircraft weight is of paramount importance for the safety of all.

 

Truly speaking, a visit and a surprise inspection (at any airport) will reveal the actual practice prevalent and the check-in staff  turn a blind eye (at their own discretion and peril) to let this happen with impunity. This has to stop because such extra hand baggage is a hindrance for a responsible traveller when he/she finds no space to put the legitimate luggage.

 

This writer, who has extensively travelled for the last five decades, would like to raise the following issues that also need to be properly covered, if and when the system actually comes into force:

 

a) Cabin baggage rule (computers/ladies hand bags, etc) must be strictly classified and enforced; simply because the passenger has obtained and attached a cabin baggage tag alone should not give a clear ‘passage’ to the carrier of these bags;

 

b) If the 20 kg “free allowance” as at present is withdrawn uniformly by all domestic airlines, this should be automatically factored in the price. Any (excess) weight chargeable should be clearly mentioned on the airlines' portal.  Rate factor should be uniform;

 

c) A declaration form, duly signed by the passenger, certifying the contents of the baggage must be taken at check in; one copy to be retained by the passenger, in case of claims;

 

d) Aircraft types and seat configuration must be clearly stated/shown to the passenger/booking agent at the time of reservation, particularly when extra charge is levied for the chosen seat. In case of online booking the cost of the chosen seat as well as others available must be clearly shown;

 

e) If after a seat allocation is made/occupied, should there be a change—because of crew/steward request—this must be in a written document and the benefit given to the seat-losing passenger (many times couples are given seats far away from each other; children are separated from parents, etc). If passengers themselves exchange seats, it should be free;

 

f)  Similarly, if the ordered pre-paid food is not available for any reason, the passenger should be entitled to a free meal of his/her choice (available on the aircraft), plus a compensation for non-performance of the delivery of contracted food. A suitable document should be issued by the steward in charge of the flight; 

 

g)  In case of lost baggage or delayed delivery (flight missed), as a result of    departure/loading problems, the passenger shall be compensated. Besides, the luggage shall also be delivered at no extra cost within 24 hours; and yet will be entitled to compensation and the quantum to be fixed. In case of ‘lost’ baggage, standard aviation rules will apply, taking into account the declaration given by the passenger at the departure point;

 

h)  Any departure delays, beyond 30 minutes, for any reason, the passenger need to be duly compensated; if the connecting flight is lost, the carrier will provide all necessary assistance for his/her onward connection, including overnight stay, full board, transportation costs, etc;

 

i) Most airlines have club membership programmes for encouraging and frequent flyer ‘points’. The five domestic airlines may jointly create a frequent flyer programme that will permit inter-changeability of the points earned and passengers encouraged to use these to covert them to actual travels. Or better still, the points may be permitted for use to set off against ‘unbundled’ services like a meal, snacks or even to cover baggage charges!

 

By no means is this list exhaustive. Moneylife readers are most welcome to make this more comprehensive so that every passenger’s interest is duly safeguarded.

 

 (AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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COMMENTS

arun adalja

4 years ago

good point if plane is delayed for more than 30 minutes then compensation is to be given.once flight was delayed for 4 hours due to runway repair and heavy traffic and i have to cancell my trip.for such cases full refund must be given and proper seating arrangements to be provided at the airport.airlines are changing prices every hour.why such things allow?

REPLY

CA PRADEEP AGARWAL

In Reply to arun adalja 4 years ago

But, My Dear who will listen to you? THE DECISION MAKERS SIT IN THEIR CABIN ON PLUSH SEATS AND EVERY REQUIREMENT AT THEIR COMMAND WITHOUT ANY IFS AND BUTS-BEHAVE LIKE SPOILED BRAT, WITHOUT ANY MANNERS WHATSOEVER.

Vinay Joshi

In Reply to CA PRADEEP AGARWAL 4 years ago

My Dear, pl can you as a CA explain the difference between 'low fare' & 'low cost', airline.

The terminology is 'low cost', airline!

Why are you commenting on airlines? That too cryptic, meaningless. As a CA give details to put up your point.

Why can't you comment about a fraudulent member - Sunil Kumar Gupta- ouster, to be struck off?
He has shamed ICAI!?

Being in Delhi, present your professional expertise in your comments.

Regards,

CA PRADEEP AGARWAL

In Reply to Vinay Joshi 4 years ago

Not a question of alleging each other, the question is whether you are being listened and your concerns are taken due care? Because I have seen that nobody wants to exercise the due operational part only those things are taken care off which suits them.

VIKAS SIVARAMAN

4 years ago

In A Fragment on Government, Bentham says, "it is the greatest happiness of the greatest number that is the measure of right and wrong" and describes this as a fundamental axiom.
I think it's time to protest the deep nexus between airlines and the civil aviation ministry. instead of protecting the average air traveller and addressing his needs first the ministry chooses to burden him further. And for the benefit of a few. Do you really believe that the adminstrators and owners of airlines did not know the risks they were taking when they started their airlines? And now that their grand plans have gone awry they are they being sheltered by the very ministers that we have elected to power to safeguard our interest? As it is airlines are allowed to openly fleece the average air traveller. Holiday seasons see airfares skyrocket with no restraint but a feeble warning from the aviation ministry that is scornfully ignored by the airlines. Delays, flight cancellations, baggage loss, late arrivals, ill run bussiness class lounges, ill trained ground staff, inadequate legroom, dirty filthy, unusable public toilets at airports etc etc cause immense agony to passengers and should therefore entail automatic prescribed compensation to the passenger. Its probably only in India that an average air traveller is so taken advantage of and with no compensation of any kind for the umpteen excesses of airlines.
It's time that air travellers lined up their list of demands and presented the list to the so called minister of civil aviation and demanded that he first address their problems with the airlines before he decides to further the profit of a select few benefactors.
The perpetrators raise the global practices analogy when it suits them. Global practices also mean that there is adequate compensation for the misdemeanours of the airlines.
That PRAFUL Patel rolled out the red carpet for Naresh Goyal's airline is no secret. His dictat brought the national carrier to its knees and he personally benefitted immensely. When news of his shenanigans began to surface he promptly quit the ministership but by then he had made his millions from Goyal.
So time to stand up and demand what is rightfully our rights and not meekly accede to ministerial and industrial beneficiaries! Fight, traveller, fight for your right!!!

REPLY

CA PRADEEP AGARWAL

In Reply to VIKAS SIVARAMAN 4 years ago

What I feel as a CA the officers sitting in offices, their income source should be choked and should be asked to compensate the travelling class, then they will know the difficulties of travellers.

Vinay Joshi

4 years ago

First & foremost distinguish between 'low fare' & 'low cost', airline & the 'terminology', vis-a-vis the present scenario in the Indian context.

Hope the economy class passengers are not made to carry business / first class passengers baggage!

RyanAir wanted to charge for the usage of the toilet, it was shot down, who had in 80's popularized the concept of 'unbundling' & many airlines have revenues to boost their bottom line.

If you want to know more of the horrifying experiences of 'unbundling' in Europe faced by Indian traveler pl read TOI, Mum,ED, May 2,2013. [for that matter many such harrowing aspects.]

Air Asia's South East Asian model will not work in the South Indian hub they are targeting as their fixed cost will be up to 85%.

I know 'Emirates & Cathay', are better.

I've been a member of EEPC since nineties.

Regards,




REPLY

CA PRADEEP AGARWAL

In Reply to Vinay Joshi 4 years ago

A day will come when these Airlines will ask to carry own bags and walk to the planes and no service will be provided all on paid basis.

Regards

CA PRADEEP AGARWAL

In Reply to Vinay Joshi 4 years ago

A day will come when these Airlines will ask to carry own bags and walk to the planes and no service will be provided all on paid basis.

CA PRADEEP AGARWAL

4 years ago

Corruption among the highest, income among the lowest

CA PRADEEP AGARWAL

4 years ago

Our Govt. is hell bent to sell its citizens but in the gutter on the guise of International Segregation, whereas income in our country is not as in Europe/USA/Canada/Australia etc.

Emerging Voice

4 years ago

If the new rules are to be implemented, first all airlines must publish the current breakup of charges for these items. So we know what we have been paying today.
As Most Airlines have base fare of Rs1, thet will have breakup of these charges as below :-
1. Seat selection Rs 0.10
2. Chkin Baggage 20Kg Rs 0.40
3. Hand Baggage Rs 0.10
4. PAX Fare Rs 0.40
Then they must not be allowed to charge more than this sort of breakup. In other words, 20Kg/30Kg should have a Upper Limit of charges. Similarly all other charges should have a Cap else AIrlines will again be fleecing the PAXs.

Do we need a regulator for ‘unclaimed’ deposits?

Besides real miscreants who collect deposits from public with the ulterior motive of cheating their ‘clientele’, the government and corporates too become indirect beneficiaries of accumulating “unclaimed deposits”. This is because money not paid back to the original depositors/ savers becomes surplus income or profit for them in due course

The media reports about the Supreme Court proceedings in the “Sahara bonds” case on 22 April 2013 are extremely disturbing. The helplessness of the Securities and Exchange Board of India (SEBI) and the court to ensure judicious handling of a huge amount of Rs24, 000 crore collected by two ‘corporations’ (Sahara India Real Estate Corporation and Sahara Housing Investment Corporation) is pathetic. The Sahara companies’ claim that they had “repaid investors who wanted their money” gives an impression that once an organisation collects money, even if it does not use the money for the purpose for which it was collected, the money will be refunded only if the depositor proves that “he wants the money”!

 

When the ‘bench’ laments about manipulating courts, every authority responsible for the sad state of affairs should take cognizance and start acting. One is wondering whether Kapil Sibal was right when he said in India any loss of public funds is ‘zero’ loss. During the initial days of the 2G scam, the minister had said that the losses estimated by the Comptroller and Auditor General of India (CAG) at thousands of crores were equal to zero from the GOI perspective!

 

Here we look at the issue from a different angle. Of late, huge amounts of money being collected from public in various forms is not being used for the purpose for which it is originally collected. This includes taxes, bank deposits and investments made by small and big savers in various instruments and with different organisations. Such funds get accumulated as bank deposits, balances in the treasury and accumulations in the corpus of provident fund or insurance and so on. With growth of huge corporates in the private sector and their counterparts in the public sector cash gets accumulated with them also without getting productively deployed.

 

There are several watchdogs in the form of auditors and supervisory and regulatory bodies whose job is to ensure proper accounting and right end-use of these funds. But, what we observe is, even when misappropriations or straight daylight looting of funds are brought to light, instead of proper investigation leading to recovery of loss or punishment of the guilty, a blame game between or amongst certain vested interests gets started in the legislatures and the media and the real issues get submerged.  

 

According to one report over Rs2, 400 crore were lying in inoperative bank accounts, last year. This would have further increased by now. There was not much difference in position across public sector-private sector banks in the continued rise in number of such accounts and accumulation of balances. It is intriguing that even in a well-regulated sector like banking, a system which can take care of the need to pay back the ‘unclaimed’ balance when the account becomes ‘inoperative’ from a bank’s perspective is yet to be put in place.

 

Sometime back, it was reported that Centre proposed to set up a “depositor education and awareness fund” using part of the money lying unclaimed with banks. Though any move to create awareness is laudable, the sourcing of funds from unclaimed deposits for the purpose, the proposal to appropriate idle funds irrespective of their origin or ownership, is unethical. The word unethical is used consciously, as government is omnipotent to make anything ‘legal’. The funding for this purpose should have come from the profit made by banks, or still better from the surplus profits/income periodically transferred to government from the financial sector.

 

Such practices exist outside banking sector also. Unclaimed dividends and deposits of companies that get credited to the Investor Education and Research Fund (IERF) has to depend on paltry budgetary allocations for its existence which again gets ploughed back to government as advertisement charges paid to government-owned electronic media.

 

In accumulating “unclaimed money” banks are in the elite company of LIC, Employees Provident Fund Organisation and Department of Posts, besides several other organisations in the public and private sectors, in holding on to money payable to the depositors/beneficiaries after the payments have become due on maturity of deposits, death of depositors and so on.  

 

The government should guide all organisations sitting on unclaimed deposits or maturity proceeds of other financial instruments like insurance policies to exhaust all reasonable options available to track the depositors or their heirs whose money would be transferred to unclaimed accounts before such transfer every year. From notice boards at bank branches to electronic media could be used to draw the depositors’/beneficiaries’ attention. If banks’ secrecy provisions stand in the way, necessary changes should be thought of.

 

It would be also worthwhile to enquire whether the organisations including banks were periodically updating the database on their folios. Last year the Employees Provident Fund Organization proposed not to pay interest on inoperative accounts in EPF accounts consequent to a proposal to freeze about three crore accounts (amount involved was about Rs10,000 crore) in which there was no fresh contribution during the previous three years or more. Such moves send out disturbing signals about safety of depositors’ funds with public sector organizations.

 

Ironically, the position will only aggravate with compulsory opening of more accounts to promote financial inclusion, insistence on Aadhaar-enabled accounts even before Aadhaar is yet to reach and crediting of government scheme benefits through bank accounts. The GOI and RBI may look at the issue from a social security angle, lest people lose faith in government-sponsored savings schemes and social security measures and even in the financial sector regulator.

 

Besides real miscreants who collect deposits from public with the ulterior motive of cheating their ‘clientele’, government and corporates too become indirect beneficiaries of accumulating “unclaimed deposits”. This is because money not paid back to the original depositors/savers becomes surplus income or profit for them in due course.

 

The huge accumulations under ‘unclaimed’ category point to the fact that the existing machineries for handling grievances relating to payment of dues and claims are not very effective.

 

In the absence of any power to fix liabilities and give directions, the ombudsmen or similar arrangements within organisations remain helpless spectators when complaints about non-payment of money from depositors/savers reach them.

 

It is in the above context that a statutory body to oversee accounting of the so-called “unclaimed deposits/payments” becomes relevant. Such a body should be made responsible to:

 

  • Track unclaimed deposits with organisations,
  • Monitor timely repayment of public funds collected, as in the case of Sahara Corporations,
  • Audit accounts of maturity proceeds of policies, deposits, accumulated balances in provident/pension funds remaining undisbursed beyond a reasonable period,
  • Receive and handle claims from public relating to such deposits/balances and
  • Coordinate among various agencies and government departments for achieving these objectives.

 

(M G Warrier is a freelancer based in Thiruvananthapuram)

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COMMENTS

MG Warrier

8 months ago

Ministry of Finance, relying on section 128 of the Finance Act, 2015, has notified ‘Senior Citizens’ Welfare Fund Rules, 2016, inter alia states:
“Every institution shall transfer the unclaimed amounts, including those under the following schemes to the Fund namely:-
(a) Small savings and other savings schemes of the Central Government including the Post Office Savings Accounts, Post Office Recurring Deposit Accounts, Post Office Time Deposit Accounts, Post Office Monthly Income Accounts, Senior Citizens’ Savings Scheme Accounts, Kisan Vikas Patras, National Savings Certificates (all issues), Sukanya Samriddhi Accounts and discontinued Small Savings Schemes;
(b) Accounts of Public Provident Funds under the Public Provident Fund Scheme, 1968 maintained by the institutions concerned; and
(c) Accounts of Employees’ Provident Fund under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.”
The recent media reports indicate that EPFO alone has about Rs32,000 crore as balances classified as ‘inoperative accounts’ which did not earn any interest for the last five or six years and thousands of crores may be lying idle in ‘unclaimed’ deposits under other categories mentioned above. The proposed transfer may end up in misappropriation of a huge amount of savings/deferred wages of millions of citizens kept in trust with statutory bodies/authorities. Instead of going ahead with the proposal, GOI should cause a professional audit of these unclaimed/inoperative accounts and find out why millions of accounts are remaining clueless on the books of these organisations. First effort should be to reach out to the real ‘owners’ or their genuine heirs to whom the balances should reach. While the nobility of the intentions to set up a welfare fund for seniors is impeccable, before appropriating funds from citizens’ savings, there should be an appropriate regulator for inoperative/unclaimed deposit accounts with institutions.
M G Warrier, Mumbai

Dayananda Kamath k

4 years ago

why we need one more regulator? to drain the public money and to provide another lucrative post retirement appointment to reward consenting bureaucrat or bank chairman. if the existing regulator perform their duties properly all these can be tackled. swiss banks have a system of tracing legal heirs of unclaimed deposits. so why cant our banks do the same on their own.they may get anew loyal customer

REPLY

M G WARRIER

In Reply to Dayananda Kamath k 4 years ago

Not just one more...We need another to trace 'our'(India's) deposits in swiss accounts. Yet another to see that appointments are not made to 'toe' your path or to write the reports you 'want'.When free, read my articles @Moneylife.in on succession plans, HR Management in Public Sector, Corruption etc Hope, Moneylife allows this much of self-marketing :)

Dayananda Kamath k

In Reply to M G WARRIER 4 years ago

don't you think if they have the will the existing regulators can not catch hold off all the offenders.just see the police could catch hold of 16dec rape and 5 year olds rapers within 2 days,who are unknown people but they are unable to catch so many nown people. it is only lack of will that is the reason for these things the way they are functioning one more and manymore regulators will only give them an alubi to not to take action.instead of asking for more regulators we must force the existing regulators to function for which they are created. nobaodies

arun adalja

4 years ago

banks can take the help of mf and lic agents to trace out the people whose balance is more than thousand and pay some commission.problem can be solved in a phase manner.in past ril has done this thing to convert debentures into share by paying commission to agents.

sulochna

4 years ago

This is very great initiative taken to bring the people of country together through the medium of national anthem. We all should come up one by one joining the hands of each other to make a such a strong knot on which every indian words get printed strongly. Let us make this day auspicious in the world by making one of unbreakable records. Jai Hind!

REPLY

Dayananda Kamath k

In Reply to sulochna 4 years ago

it appears the selection of national anthem it self is the reason for indias problem. it is part of the song written to hail british emperor . it hails the leader not the nation. hence leaders are prospering and not the nation. the, day we change our national anthem to vande matarm, the song that inspired the independence movement, the country may get real independence and progress.

M G WARRIER

In Reply to Dayananda Kamath k 4 years ago

I wonder, sulochna's comment was on some other article.

Dayananda Kamath k

In Reply to M G WARRIER 4 years ago

no it was regarding this article only she is only refering to world record created by sahara groupe sining rashtra gan i presume

sameer

4 years ago

Looking at the recent developments in Sahara - SEBI encounter. Sahara has given a felicitous and affirmative reaction to the dig taken by SEBI chairman U K Sinha. Sahara claimed that total investor base of 3.07 crore included as much as 2.99 crore with funds accounting for up to Rs 20,000 each. The company backed its previous claim that 90% of investors have been repaid. Also Sahara India is putting great effort to make a World Record with our National Anthem “Jana, Gana, Mana”.

arun adalja

4 years ago

article is very good and what to do with this money?regulatories must make efforts to give money to nominee.do not give money to investor protection fund as this money is used by politicians for their propergundas.let us use money for the real needy people and blind and handicapped .

PRABHAT

4 years ago

GOVT. SHOULD SEIZE SUCH MONEY AND USE IT FOR NATIONAL DEFENCE .

REPLY

M G WARRIER

In Reply to PRABHAT 4 years ago

This is Prabhat's view. Purpose of the article was to create awareness about the temptation of organisations/governments to forfeit deposits/savings of public under the pretext of 'not having details' to trace depositors/investors to whom the 'unclaimed' money belongs. Money collected should go to the rightful depositors/savers. There are transparent ways to raise funds for defence.

Vinay Joshi

In Reply to M G WARRIER 4 years ago

Mr. M. G Warrier,

You're right in putting up the original article.

As a matter of fact Mr.Nagesh Kini, FCA, [closely associated with ML] had put up this issue about two years back. He had the expert view coz of his expertise in bank audits.

I've known many things since Harshad Mehta scam, my uncle was an administrator to the failed bank, appointed by RBI.

PSU banks will never fail in delayed claims. Question is 'claimant/[s]'!

As is KYC, why it should not be mandatory to nominate, NOT OVERRIDING WILL OR POA [which may be ultra vires], unless proved to the satisfaction of the concerned authority.

2.4KCR since four odd years may have netted the banks a phenomenal return.

None of the banks highlight 'unclaimed' deposits BUT CAR [capital adequacy ratio] in percentage in their B/S.

In which manner can it be ascertained that the unclaimed amount is not taken into consideration.
[as per AS & GAAP.] NPA's are given in figures with percentages & returns on assets - annualized- in percentage.

All other things are covered under 'other liabilities & provisions' & only microscopic analyses of the schedule will unearth two/three asterisks marked inclusion - no explanation.

Neither will segment revenues will highlight.

ICAI should come forward to address this issue.

Regards,

PRABHAT

In Reply to M G WARRIER 4 years ago

UNCLAIMED MONEY WITH BANKS , PRIOR TO THE STAGE OF COMPUTERISATION ,ARE WITHOUT SUFFICIENT DETAILS OF CUSTOMER DUE TO VARIOUS REASONS ,LIKE ,KYC WAS NOT SO IMPORTANT AT THAT TIME ,EVEN PAN NO WAS NOT VERY MUCH ESSENTIAL .CUSTOMER WAS NOT THAT CONTIOUS TO KEEP HIS CONTACT PARTICULARS UPDATE .AT PRESENT IT IS NOT POSSIBLE TO TRACE OUT SUCH OLD CUSTOMERS .

M G WARRIER

In Reply to PRABHAT 4 years ago

If there is a will…..
This space may not allow a detailed discussion on the subject. Let banks make a beginning by publishing available details about depositors with ‘unclaimed’ balances above Rs1000 on branch notice board and on a dedicated website (If such arrangements exist, let it be known to public).
Also
Thank you, Joshi

NSriramamurty

In Reply to PRABHAT 4 years ago

Unclaimed Money with Banks - Even If Bank's Earliar Details are in Manuscripts, They can get them to be entered In Computer , if Required by Outsoucing / Contracting Technies , if Required and Load into their WEBs.Even in Earlier Days , Forms are filled up then with Full Details of Address,Parents names, etc. Thus Your Problem is Minisule when Compared to advantages in Putting Details in Bank's WEBs.

NSriramamurty

4 years ago

EPF office and LIC / GIC s should Publish in their WEBs all Details of Unclaimed Deposits. Recent GOI orders also stipulated more Transpareny by Putting all their PPP agreements,Tenders, Works Awrded ,etc, so that Indians can see whether any Loul Play existed anywhere , in this Scams Decade . Thus EPFs, Insuranse Companies, Banks with Unclaimed Balances / Deposits, etc. It helps Indians to Claim such amounts Easily

REPLY

CA PRADEEP AGARWAL

In Reply to NSriramamurty 4 years ago

EPF is not transferring funds and Interest after sometime has been discontinued, so if you want Interest from EPF make underhand dealings then only you will get your interest. I Feel the concerned PF commissioner manning the Zone should be personally responsible to pay the Interest.

CA PRADEEP AGARWAL

In Reply to NSriramamurty 4 years ago

What I feel laws are good but its operation is bad and very bad.

Personal Finance Exclusive
PNB Metlife online premium payment: You may lose your money for a minor fault!

PNB Metlife online premium payment does no verification of the policy number with date of birth, mobile and email address. One policyholder made a mistake in keying in the policy number. Amazingly, PNB Metlife refunded the premium to the wrong policyholder and is washing its hands off!

In June 2012, Asha Kapoor (name changed) used the online premium payment facility of PNB Metlife to pay Rs25,000 for her ULIP policy. While she put correct date of birth and mobile number, the policy number had a typo with one digit switched (e.g. policy number 37012645 instead of 37012654). Without any cross-check with the entered date of birth and mobile number, the payment was accepted for a wrong policy.

 

To make the matter worse, PNB Metlife refunded in full to the policyholder of the wrong policy (also a ULIP) to which payment was applied. It must be first case in history of ULIP that an insurance company claims to have refunded full premium!

 

A ULIP has premium allocation charge, policy administration charge, surrender charge and also mortality charge for risk cover. Once you make a premium payment to an existing policy there is just no way to get back your full premium. How did PNB Metlife ‘refund’ the full amount?

 

On not receiving an electronic receipt, Ms Kapoor filed a complaint with the grievance cell in November 2012. After couple of interactions, she finally got a reply in February 2013 that the premium had been paid to a wrong policy and that PNB Metlife had refunded the full premium to the policy owner of the wrong policy in Septmber 2012. Ms Kapoor should have asked for statement or logged in to see if the payment was indeed used to buy units for her policy in June 2012. It was a mistake that proved too costly.

 

PNB Metlife gave Ms Kapoor the name, address and landline number of the wrong policyholder and asked her to follow-up on her own and get her refund. According to PNB Metlife’s reply to the policyholder, We would like reiterate that the user is responsible for the accuracy and authenticity of the instructions provided to Metlife and/or service provider and the same shall be considered to be sufficient to operate the payment gateway. Metlife have no liability or obligation to independently verify the instructions or the authenticity of any transaction.”

 

Ms Kapoor has tried contacting the wrong policyholder on many occasions, but has not succeeded since the telephone number does not exist. The wrong policyholder’s address is in a different state which makes it difficult to physically visit and find out.
 

The case gets interesting based on what Ms Kapoor found out about the wrong policyholder. According to Ms Kapoor, “The person had enrolled for a ULIP policy in 2008. No premiums were paid thereafter. The policy was probably in a suspended state. This person got a refund of Rs25,000 and closed the policy. He was a PNB MetLife agent till 2010 or thereabouts. It is clear that there has been collusion between this person and PNB MetLife.”  

 

The questions that arise in this case are:

 

1. Why does PNB Metlife online premium payment ask for the date of birth, email and mobile number when it is not cross-checked with the policy number for which the payment is made? Even if it is accepted, can they not know that details entered do not match and then alert the bank account holder at some later time?
 

2. How did the wrong policyholder come to know that someone has made premium payment towards his policy?
 

3. If he somehow came to know about it, did he ask for a refund? If so, how is it possible that PNB Metlife gave full refund of Rs25,000 by cheque? Does any life insurance policy give back the full premium paid at anytime?
 

4. Why did PNB MetLife refund the Rs25,000 to the wrong person and not to the bank account from where the money originated?
 

5. Did the wrong policyholder commit a fraud by asking for a refund knowing that someone else had made premium payment by mistake?
 

6. Did he get an SMS alert or email when Rs25,000 premium was paid towards his policy.
 

7. How will PNB Metlife account the refund with its database of policyholders? The exact amount of Rs25,000 may not be what was due from the wrong policyholder. That should have also alerted PNB Metlife before they even thought of making any refund. How will the refund be accounted for against a wrong person?
 

8. Why did PNB Metlife take such a long time to find out what really happened?  Why did PNB Metlife take over two months to tell Ms Kapoor that they refunded her premium payment to wrong policyholder? Does this represent usual customer service delays?
 

9. Is it good customer service to tell your policyholder to go and retrieve your the money you lost from someone else?
 

10. Was the wrong policyholder a PNB agent and if so, was a there a collusion between PNB Metlife staff and the wrong policyholder?

 

PNB Metlife has kept a stony silence on the issues raised by Moneylife even after couple of emails and a phone call.

 

We have checked other websites like ICICI Pru Life and HDFC Life for online premium payment. They have much more checks than PNB Metlife. At the minimum each website stopped from online payment if policy number and date of birth did not match. Can PNB Metlife put a simple check to verify the details it takes from policyholder before accepting the payment or are they too eager to get payment from anyone by hook or by crook?

User

COMMENTS

P S MANI

3 years ago

Pnbmetlife insurance should take care of the online payment of the policy holder to get his/her receipts through email without fail and avoid sending postal correspondence on renewal policy payment.

srinivasan M

4 years ago

This case is ripe to be taken to IRDA and Banking Ombudsman to see if they truly stand for justice. To set up online system and that also to accept payments, but still not have any online validation for the data taken from customer,Whose fault is this ? This is also a deficient service to the customer as he is dealing with a very dangerous online system where the system cannot recover from simple data errors.

REPLY

CA PRADEEP AGARWAL

In Reply to srinivasan M 4 years ago

TOTAL DEFECIENCY on the part of the Insurance Company.

CA PRADEEP AGARWAL

4 years ago

Metlife if had done in their country the establishment might have closed their shop or heavy penalty might have been imposed so that they do not dare it again but in our country laws are OK but operations is very weak due to............

manish wani

4 years ago

Alarming but interesting in other way. PNB Metlife's add emphasizes about value of double checking. So are they indirectly telling the customer that you double check before paying :) If confidence and trust is the foundation for insurance company and I am assuming that is what they are trying to convey in ad then how come they do not have this simple double check before processing?

REPLY

CA PRADEEP AGARWAL

In Reply to manish wani 4 years ago

Yes, they are adding value by cheating the customers, I feel a direct complaint may be sent to RBI GOV. today he said about strictness on Banks and Insurance Companies and their nexus.

CA PRADEEP AGARWAL

4 years ago

Should file a case with the Insurance regulator i.e IRDA

N Kanitkar

4 years ago

One morre revelation. You can key in any random number as policy number and all other fictitious details and it still takes you to Bill desk for payment.Cheers. Then who keeps the money and for how long??

REPLY

raj

In Reply to N Kanitkar 4 years ago

that's terrible....

Dayananda Kamath k

4 years ago

their advertisement it self should have been an eye opener for the customer the person double checks the cash being counted by cashier and again he himself to be double sure. and tag line that is why 2 have joined together to form pnb metlife. and 2 together have looted the policy holder. long back one of the nationalised bank provided mobile recharge through atm. here the atm will recharge the mobile and recredit the amount back to your account instead of the service providers account. this was brought to the notice of the bank management, reserve bank of india, the charman of the service provider and even a police complaint was lodged. but no action was taken. rbi conducted a special inspection of the bank on my followup and some times a nsaty letter which forced them to do the inspection. they found the irregularity but did not bothere to initiate action. the telecom service providers where also not bothered that they are loosing revenue. police once enquired what is the actual situaton and gone.

REPLY

raj

In Reply to Dayananda Kamath k 4 years ago

Yes, Mr Kamath. You are right about PNB Metlife advertisement on double checking the money. Unfortunately, PNB Metlife online payment does not seem to cross check anything. So, forget about double checking there is not even single checking with PNB Metlife online payment.

Rajeev Sharma

4 years ago

She should raise the issue with IRDA.

REPLY

CA PRADEEP AGARWAL

In Reply to Rajeev Sharma 4 years ago

YEAH YOU ARE RIGHT

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