Grievance redressal machinery has been disrupted; aggrieved parties have been considerably inconvenienced
The Consumer Education & Research Centre (CERC), a leading non-profit, consumer rights organisation, has asked the insurance regulator to fill up the nine-month old vacancy for an insurance ombudsman at Ahmedabad.
CERC chairman, Dr VG Patel, told Moneylife, "The institution of Insurance Ombudsman had been extremely useful in providing remedies to aggrieved insuring public. The Ombudsman at Ahmedabad was expeditious in settling matters when there were inordinate delays in courts, including consumer courts. The insuring public in Gujarat has taken great benefit through the Ahmedabad Ombudsman. We are requesting the IRDA chairman to fill the vacancy urgently."
The Insurance Ombudsman is an independent office that provides speedy and cost-effective resolution of customers' grievances if the insurance grievance cell has not been able to provide satisfactory response to complaints.
The Insurance Regulatory and Development Authority (IRDA) has left the post of the Ahmedabad insurance ombudsman vacant since the past nine months. This has certainly hurt the insurance grievance redressal system in the area of Gujarat, the union territory of Dadra & Nagar Haveli, Daman and Diu. Once a case has been submitted to the ombudsman's office, simultaneous recourse to the consumer court is not possible as per the law. Aggrieved customers are stuck with no alternative.
According to Gaurang Divetia, an insurance expert in Ahmedabad, "There are about 600 to 700 claim grievances pending with the Ombudsman's office. It solves 50 to 60 cases every month on an average. The waiting period for a policyholder after filing the complaint with the Ombudsman is three to six months (assuming that the Ombudsman is operating)."
Moneylife emailed IRDA to find out about the delay in appointing a new ombudsman, but has not received a reply till the time of writing the article.
A call to the Ahmedabad Insurance Ombudsman's office confirmed that no cases are being resolved and a long backlog of cases is building up. Obviously, when consumers file a complaint, they are not given a timeframe in which they can hope to get a hearing or redressal.
According to the office of the governing body of the insurance council, "The selection has been made and a circular resolution sent to insurance companies. Once it is approved by them, an appointment letter will be issued. It may take 15 days to one month."
When asked about the reason for the nine-month backlog and the delay in the appointment, a council official said, "Ahmedabad is not a big centre and hence there should not be a problem in clearing the backlog. There is a committee headed by the IRDA chairman to select the ombudsman. We had written to them a number of times. The insurance secretary is also on the committee whose availability may be an issue. This is not an unusual delay."
There are 12 insurance ombudsman offices across the country. For more details on the insurance ombudsman please visit http://www.irdaindia.org/ombudsmen/ombudsmenlist_new.htm. The web page has obviously not been updated as Shri Amitabh is no longer insurance ombudsman in Ahmedabad. We hope that the process to select the Ahmedabad ombudsman will be expedited in the interest of quick resolution of customer grievances.
Day-long conclave focuses on issues that have been obstacles to systematic growth of the sector
India and China, with over $100 billion worth of construction underway individually, house the world's largest real estate industries. But despite its potential, the Indian realty sector is grappling with many issues. The Confederation of Indian Industry (CII) on Friday held a conclave on 'Indian Real Estate Charting a Global Course', to address the issues facing the sector.
Unavailability of funds, the losses made by real estate companies, suspicion of private equity and lack of consumer trust leading to very low credibility of the industry, were listed as the main problems plaguing the industry.
Adi Godrej, chairman, Godrej Group, said there were a number of challenges that the real estate sector faces, but it had the responsibility to a larger group of stake holders: its customers, vendors, partners, employees, environment and society at large.
He said, "Over the next few decades, India's demographic dividend, rising affluence, expanding middle class and rapid urbanization will combine to thrust the infrastructure and real estate industry into a prolonged period of supernormal growth, which if capitalised on responsibly, equitably and imaginatively has the potential to transform India into a leading global investment destination."
Anuj Puri, chairman, CII Real Estate Conclave and country head Jones Lang LaSalle, reiterated the need for increasing transparency in order to reduce the cost of capital. "It is important for the industry to look at global best practices, and try to localize them to the needs here. It is the only way to grow this sector that sees $100 billion of construction going on currently."
Niranjan Hiranandani, managing director, Hiranandani group of companies, said that the two biggest problems for the sector were land and infrastructure. "Land acquisition and regulations remain a problem and so is internal and external infrastructure around a housing project. Solve these two problems and you would have solved the problems of the housing sector," he argued.
In the absence of an authority to issue income certificates, students from several states are finding it difficult to get interest subsidy on education loans offered by the union government. This has also hampered banks from disbursing loans to needy students
Nearly a year after the central government finalised a scheme to provide interest subsidy on education loans for students from the economically weaker sections, many states and union territories have still not designated the income certificate issuing authority.
Canara Bank is the nodal bank for member banks of the Indian Banks' Association (IBA) to claim reimbursement of the interest amount. The scheme was planned and the details worked out by the Ministry of Human Resource Development over a year ago. But according to data on the Canara Bank website, as many as 28 states and union territories are yet to designate the income certificate issuing authority.
According to the ministry, under the scheme formulated by the IBA, full interest subsidy will be provided during the period of moratorium on education loan for students from families with an annual income of less than Rs4.5 lakh.
The ministry said recently, "Under the scheme, proof of income is required to be certified by authorities to be designated by the state governments. Accordingly, the ministry has written to all chief secretaries of states/union territories to intimate the designated authority/authorities (at the district/sub-district/block, etc levels) to the district level consultative committee (DLCC), so that banking authorities at the branch level where students apply for the loans, would be aware of the same. The eligible students may get the details of designated authorities from the concerned branch of the bank where they have availed of the loan."
Several banks have been trying to help students avail of the scheme, but their efforts have been hampered as students have not been able to find the authority that will issue an income certificate.
"We have already sent the claims to the nodal banks. But many of the states are yet to designate the income certificate issuing authority," said a senior official at a public sector bank that has its headquarters in Mumbai.
An Indian Bank official, who requested anonymity, told Moneylife that, "We have received and credited claims of more than 50,000 students. We forwarded these claims on the interest subsidy on education loans to Canara Bank for 2009-10. But a few states are yet to identify the authority to issue income certificate."
Students have complained they cannot identify the authority. One such complaint on the www.conumercourt.in reads: "I had taken education loan for my son studying in BITS Pilani, Hyderabad Campus. When the Central government decided to give interest subsidy for EWS, I applied for the same. However, the SBI authorities asked me to get an income certificate signed by MRO (tehsildar). On approaching my tehsildar, he said that there is no go which authorises me to sign income certificate. I had shown the memo issued by principal secretary to government to all collectors, but the MRO insists that he will not sign the income certificate and the SBI are not willing to accept my application. I am caught between the devil and deep sea (state and central governments)."
Meanwhile, the ministry has announced that 20 July 2011 is the last date to submit certificates to their respective branches, so that interest could be credited with interest due on the loans taken during the academic year 2009-10 onwards.
The current scheme on education loans also allows a deduction under section 80E of the Income-Tax Act for interest paid on the loan.