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Ratan Tata, toast of India Inc, bids adieu

Chairman-designate Cyrus Mistry, who made a visit to Bombay House on Friday, will on Saturday take charge of the new assignment, sources in Tata Sons said

Ratan Tata, an iconic corporate leader, retired as chairman of the Tata Group after a 50-year run Friday but kept away from office on his last day at the helm of one of country’s oldest business empires, reports PTI.


Tata, who turned 75 on Friday, is in Pune for his birthday, sources at Bombay House, headquarters of the salt-to-software conglomerate, told PTI, adding there was no clarity on whether he would visit his office later in the day.


Chairman-designate Cyrus Mistry, who made a visit to Bombay House on Friday, will on Saturday take charge of the new assignment, sources in Tata Sons said.


Mistry was groomed for the assignment by Tata for a year.


The group had earlier announced that he has been appointed chairman with effect from Saturday.


Mistry chose the group company Tata Motors entry-level sedan Indigo Manza to travel to work on the important day, marking an end to an era.


The narrow lane leading to Bombay House, one of the oldest buildings in the heritage Fort area of south Mumbai, has heavy media presence since Friday morning in anticipation of Tata visiting Bombay House.


Ratan Tata, who helmed the group for 21 years after being chosen successor by his uncle, the iconic JRD Tata, in 1991, is credited with transforming the group through bold decisions including large global acquisitions, even as some of its peers struggled to stay relevant post economic liberalisation.


Mistry, who has been with the group since 2006 in various capacities, hails from the Shapoorji Pallonji family, the largest private share holder of the group's holding company Tata Sons.


Born on 4 July 1968, Cyrus Mistry completed his graduation in civil engineering from London's Imperial College of Science, Technology and Medicine and followed it up with masters in Management from the London Business School.


He was chosen by a five-member panel last year to succeed Ratan Tata.


During Ratan Tata’s tenure, the group’s revenues grew manifold, totalling $100.09 billion (around Rs475,721 crore) in 2011-12 from a turnover of a mere Rs10,000 crore in 1991.


Tata led the group into some notable acquisitions, starting from Tetley by Tata Tea for $450 million in 2000, to steelmaker Corus by Tata Steel in 2007 for 6.2 billion pounds and the landmark Jaguar LandRover in 2008 for $2.3 billion by Tata Motors.


Courtesy the acquisitions, over half of the salt-to-software group's revenues are derived from outside the country.


Not limiting himself to big-ticket acquisitions, Tata also displayed sensitivity to the needs of the burgeoning middle class with the launch of the Rs1 lakh Nano battling the odds in West Bengal.


The group was forced to shift the project from Singur, where he was invited by Marxist chief minister Buddhadeb Bhattacharya, to Sanand in Gujarat at the invitation of Narendra Modi.


Although the Nano could not live up to the expectations after its initial worldwide acclaim, the small car will still be remembered as Tata’s desire to provide a ‘safer’ option to many Indian lower-middle class families riding two-wheelers.


In a recent interview to PTI, Tata has said that Singur was a “great disappointment” because he went there “in a leap of faith” thinking that part of the country was being ignored industrially. Tatas will still go to West Bengal someday, he has said.


Under Tata, the group also made great strides when it capitalised on the sunrise industry of information technology in the 90s. With revenues of over $10 billion in 2011-12, Tata Consultancy Services (TCS) is today India’s largest IT company, ahead of giants in the field like Infosys and Wipro.


On his post-retirement plans, Tata, a bachelor, has said he will spend time on technology which is quite a passion with him. He will brush up on his piano, which he learnt as a school boy and pursue flying, apart from his focus on philanthropic activities.



R Balakrishnan

4 years ago

I salute Ratan Tata for many things. For taking the group global. Most of all, for getting Bombay House rid of the satraps like Kerkar, Darbari Sheth, Rusi Mody etc and who said that without them the group would be finished. After getting rid of them, RNT has taken the group to far greater heights.
A man who came with low expectations, is going out in glory.
Wish him peace in retirement.

RGJAY: National Insurance denies TPA incentive data requested under RTI

Rajiv Gandhi Jeevandayee Arogya Yojana offered by the Maharashtra government provides health insurance cover up to Rs1.5 lakh for families earning less than Rs1 lakh per year. How much does the insurance company pay to the TPA? Why does the insurer deny TPA incentive data requested under RTI?

The Maharashtra government has launched Rajiv Gandhi Jeevandayee Arogya Yojana (RGJAY) in order to improve medical access facility for both Below Poverty Line (BPL - Yellow card holders) and Above Poverty Line (APL- Orange card holders) families). RGJAY is already being implemented in eight districts including Mumbai and would be implemented throughout the state in phased manner in a period of three years.


According to Dr Raju Jotkar, assistant director, RGJAY, “In the instance of non availability of a health card (in the eight districts where the scheme is implemented), the beneficiary family can still avail the services at network hospital by producing Yellow/Orange/Antyodaya/Annapurna ration card and photo identity.”

Find out more about the scheme -

The first level of authorisation for undergoing any procedure will be from the insurer or rather TPA (third party administrator). Is it possible that genuine patients may be denied approval for procedure based on TPA interested in keeping the claims payout down? Dr Jotkar, says, “In the two-layered preauthorization, RGJAY society physicians have an upper-hand as they have an opportunity to see the case, the verdict of TPA doctor and power to accept or reject the verdict (overrule TPA verdict).”


Find out about progress and hurdles faced by RGJAY -

The RGJAY society has paid National Insurance Company premium of Rs333 per family (service tax extra) for about 49.2 lakh beneficiaries, of which two quarterly premiums have been paid till date. It means the society has paid the insurance company premium of Rs82 crore for two quarters ending December 2012.

According to Dr Jotkar, “80% of the premium paid by Maharashtra state to NIC is for claim settlement of network hospitals, while 20% for administration cost of insurer as per memorandum-of-understanding (MOU). Out of the 20% administration cost some portion is passed on by NIC to the TPA for his services, which are not available in-house in NIC. It is learnt that TPA fees range 5% to 8% of the premium depending on scope. It would be prudent to pose this question to NIC for better precision.”

It means that TPAs have got minimum of Rs4.1 crore for six months of their services till December 2012. There could be additional doles given to TPA for reducing claims. Dr Jotkar, says, “No precise idea, but we hear that some bonus is given to TPA which is also substantial.”


This is exactly the information sought by social and legal activist Gaurang Damani from NIC, but his RTI (Right to Information) application has been denied even after the first appeal. NIC stated that the documents cannot be provided under Section 8(d) of the RTI Act, 2005. NIC asked for the TPA’s consent to sharing information on incentive for claims reduction. The TPA objected to it with following reasons—“They being private organization are not required to comply with RTI Act. The disclosure of this information will not serve any public interest. On the contrary it would harm and/or injury to their interests. It could cause irreparable damage to them as their competitors would take advantage of their commercial trade secrets.”


Clearly, NIC took refuge under the TPA consent to scuttle the information sought under RTI. Similar data was given by United India Insurance and New India Assurance in the RTI reply for regular mediclaim policies. The TPA contract states that if the incurred claims ratio is 70% to 90%, then there is an incentive of 10% of the amount by which incurred claim is reduced as against the previous financial year. If the incurred claims ratio is 50% to 70%, then there is an incentive of 20% of the amount by which incurred claim is reduced as against the previous financial year.

This is completely detrimental to the interest of the policyholder whose genuine claims can also be partially paid or rejected just so that the TPA is able to get incentives from the insurance company. By putting this incentive clause, the TPA will obviously do everything possible to limit the claims outgo.

According to Mr Damani, “This is a violation of Section 52(1) of the Insurance Act – Dividing Principle. A claim of one person cannot be used to offset the claim of another person. In short, the insurer/TPA cannot offset losses from one policy against another policy.” Interestingly, the Insurance Regulator and Development Authority (IRDA) has chosen to ignore or keep quiet on this important point in the PIL filed by Mr Damani.




4 years ago

I agree with Mr. Thomas.

Thomas Kuruvilla

4 years ago

Insurance companies & TPA's involved in Govt. Health Schemes cannot claim immunity from RTI queries as thay are implementing schemes related to the State & Central Governments.

Banking services is a right of every individual: FM. Will RBI enforce this right for the benefit of the banking public?

Let us hope that this noble thought of making banking services a right of every citizen does not remain a wishful thinking, but a way of revitalizing the banking services to enable over a billion people of this country to lead a life of security and safety of their hard-earned savings

“Just as education is a right, just as speech is a right, just as work is a right, banking services is a right of every individual”, said finance minister P Chidambaram while speaking at a function to celebrate the 102nd  Foundation Day of Central Bank of India last week. He further said that banks were not doing a favour when they provide banking services; they were only discharging their duties.

This is a wonderful thought coming after 43 years of nationalization of the first set of 14 banks on 19 July 1969. Unfortunately, this right to banking services is not guaranteed under our country’s constitution. But fortunately, there is no need for any amendment to the constitution or any other act, as RBI (Reserve Bank of India) has got the powers to enforce this right under the existing laws though a simple fiat. It is, therefore, for the RBI to implement this right of every citizen to receive a satisfactory banking service by codifying the time norms for banking services and laying down guidelines for their compliance. It is only by enforcing this right that we can hope to achieve universal banking for over a billion Indians, many of whom are on the threshold of getting all their dues from the government in their banking accounts through the direct cash transfer system proposed to be introduced from the beginning of next year.

The RBI has already introduced a system of compensating banks’ customers who fail to get cash from the ATMs at the rate of Rs100 per day’s delay after ten days of making a complaint and this system is in vogue for over a year now. While this is restricted at present to only to one type of banking transaction, it is now necessary to extend these guidelines to all types of banking transactions with a view to make banking services a right of every individual. Following are some of the steps required to be taken in pursuance of this objective.

  1. All requests for financial transactions must be completed within 24 hours:

At present banks do not attach any importance to customers’ requests to carry out financial transactions within a time-bound manner. Invariably one finds delay in executing customers’ instructions, putting the customer into financial loss, and the banks do not bother to compensate the customer for such lapses on their part. It should, therefore, be made mandatory for all banks to carry out all instructions for financial transactions within 24 hours, failing which banks should be penalized and asked to pay cash compensation to the customers. In addition to compensation, such transactions should be value dated to the earlier date of request to ensure that the customers do not suffer any monetary loss on account of delay in executing the transactions.

For instance, if a customer requests his bank to transfer a lump sum amount from his savings account to a fixed deposit account, the bank should normally comply with such instructions on the same day. But if it fails to do so even within the next working day, banks should not only be asked to pay appropriate compensation for each day’s delay, but also give the benefit of interest on the deposit from the original date of request by value dating the deposit, so that the customer does not lose the benefit of higher interest for which he is entitled to. This is not a double benefit to the customer, but only a compensation for the anguish caused to him by the bank in not honouring his instructions on time. Similarly for all such financial transactions, like payment of taxes, payment on account of standing instructions, transfer to PF accounts, payment of monthly/quarterly interest on fixed deposits, investment in mutual funds by systematic investment plans (SIPs), etc, such guidelines of compensation plus value dating must be invariably followed, without even asking by the customer.

  1. Pensioners should be compensated if pensions are not credited on the due date:

At present all pensioners are supposed to receive their pensions on the first working day of the month. But many times pensioners anxiously waiting for their monthly pension are not disbursed pensions on the due date, but are paid with a delay, putting  the pensioners at the mercy of banks and they suffer in silence. Bank managements are not aware of the living conditions of many a pensioners and give a scant respect to the needs of these people, who make a living on the meagre pension received from the central and state governments. In all such cases, if the pensions are not credited on the due date originally fixed, banks should be asked to pay appropriate and adequate cash compensation for the delay and such compensation should be progressively increased each day as a measure of penalty to the banks for causing inconvenience to the pensioners. This system should be followed for all subsidy payments now proposed to be disbursed by the central government directly into bank accounts of beneficiaries, so that people depending on such government disbursements are not deprived of the benefits on the stipulated dates.

  1. Customers must be compensated if decisions on loan applications are not communicated within a given time-frame:

At present though there are certain guidelines issued by the RBI for all banks to decide on the request for loans within a certain number of days depending upon the sanctioning authority and the amount of loans, these guidelines are more observed in their breach rather than in their adherence, resulting in avoidable inconvenience to customers. In all such cases, the RBI should fix appropriate compensation to the applicants for the delay caused for no fault of theirs and this should serve as a penalty to banks, which do not observe time discipline laid down for conveying sanction of loans or otherwise. This should also apply for disbursement of sanctioned loans within a time frame from the date of request from the customer.

  1. TDS or any other amounts wrongly deducted or debited should be refunded with interest along with compensation for the wrong doing:

Many a times banks keep on deducting TDS (tax deducted at source) even where Form 15(G) or 15(H) has been submitted and then refuse to refund this amount when their mistake is pointed out to them. They invariably ask the customer to claim the refund from the Income Tax office by filing a return of income. In all such cases, banks must be asked to refund the TDS wrongly deducted along with the interest from the date of debit till the date of re-credit of this amount. In addition to crediting this amount with interest, customers should be appropriately compensated for the wronged action of the bank. This system should be followed for all wrong debits affected by banks and giving compensation to the customer for every day’s delay should form part and parcel of rectification of all mistakes done by the bank without any demand from the customer.

  1. All type of services of banks should be benchmarked with time norms:

Apart from the delay in executing financial transactions, banks are lax in servicing customers’ routine requirements also, like sending statement of accounts, tax deduction certificates at the end of every quarter as required by the law, settling death claims, transferring account from one branch to another and a host of other services which do not receive the attention they deserve. Even for these routine services also time norms should be prescribed by the RBI and where they are not complied with, appropriate compensation should be prescribed to ensure that the banks take these services with the seriousness they deserve to make life easier and smoother for the harassed bank customers of today.  

The aforesaid services are only illustrative and not exhaustive and the RBI, in the interest of overhauling the banking services in our country, should come out with a complete list of banking services which should be covered under the rights of individuals and provide a mechanism for implementation on the lines mentioned above, to make banking a pleasurable experience for the citizens of our country. Many state governments have already introduced guaranteed service in government departments with provision for giving compensation to the applicants for delay, if any, caused by the apathy of state officials. The steps enumerated above are only an extension of such a guaranteed service to banking public, who, as the FM says, have a right to expect from the banking institutions of our country. 

Read: Right step to weed out corruption: ‘On Time’ service delivery enactments Moneylife  dated 19 April 2012.

Let us hope that this noble thought of making banking services a right of every citizen does not remain a wishful thinking, or a political gimmick, but a way of revitalizing the banking services to enable over a billion people of this country to lead a life of security and safety of their hard earned savings, for which banks owe a duty as the repositories of the wealth of our nation.

 (The author is a banking professional, writing for Moneylife under a pen-name ‘Gurpur’)




4 years ago

SBI has done a good thing by waiving minimum balance requirement. Most of the banks, especially new generation banks are cheating customers in the name of insufficient minimum balance.

arun adalja

4 years ago

when cash is deposited in non home branch some charge is levied buy if money is withdrwan no charge?why such things?private bank is not chargeing anything.why dual practice?can any body justify this issue?


4 years ago

“Just as education is a right, just as speech is a right, just as work is a right, banking services is a right of every individual”, said finance minister P Chidambaram. I would like to add that all citizens have a right for clean and efficient governance by the politicos.


4 years ago

“Just as education is a right, just as speech is a right, just as work is a right, banking services is a right of every individual”, said finance minister P Chidambaram. I would like to add that all citizens have a right for clean and efficient governance by the politicos.

Vaibhav Dhoka

4 years ago

Ordinary customer does not know the intricacies of banking practices and easily falls prey to arm twisting by bankers.The Bank of Maharshtra levies minimum balance charge of `RS 200/- p.q.Excluding service tax) every quarterly.In Pune a housemaid lost full Rs 990 a balance in her saving account and her account is in negative balance today.This is example to show that if RBI penalizes bank for services banks use such method of recovery instead enhancing of service standard.

Sudheer M

4 years ago

An interesting case with Axis Bank. I had an account with Axis Bank, Ghatkopar Mumbai. I moved to Bangalore 8 years back, changed the address in their systems on time. I closed the account in November and the balance of Rs.121 in my account (thankfully i withdrew the remaining amount using ATM Card) was sent to me after multiple reminders and calls to them.

And you know what, they sent me a local cheque of Mumbai to Bangalore. Now I have to incur a collection charge to encash this cheque. A simple logical check by Bank and issuing a DD would have saved my time, effort and money a lot.

I am sure this is the case almost all the banks where the customers are made to run.

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