Consumer Issues
RBI flip-flops on customer service report

RTI query reveals that despite inclusion of voluminous views in the report on customer service which is ready, the committee chairman continues to hold it back

The confusion and curiosity surrounding the Reserve Bank of India's (RBI) report on customer service headed by M Damodaran, continues. Based on information received under the Right to Information (RTI) Act filed by Mumbai-based activist Nagesh Kini, it is now clear that extensive work has gone into preparing the report especially by two committee members MS Sundararajan and S Gopalkrishnan, yet for reasons not stated, it remains buried.

It its response to four questions, the RBI rather blandly states repeatedly that the report is yet to be transmitted. The applicant seeks to know the dates on which each member and the chairman of the committee signed the report, the date when the report is to be submitted to the RBI, and if it has already been submitted, the date on which the report is expected to be put in the public domain.

It is over a year now that several people submitted their recommendations to the committee, but there is no sign of the report yet. Which is why Mr Kini evoked the RTI to find out the status on the report.

In its reply to the RTI query by Mr Kini, the RBI says that a time frame of four months from the date of the first meeting of the committee was set for submission of the report. This was extended by three months. Considering this, the report should have been out in public domain by now. It's been over 12 months since the first meeting was held on 15 June 2010, but the report has not yet been released.

Moneylife had reported that the report is ready, but the committee chairman M Damodaran is holding it back for reasons best known to him. Even the committee members did not seem to be aware about the details. (Read, "The curious case of the Damodaran Committee's report on customer services: Why is it still in limbo?")The committee was constituted in June last year to review the system of customer service and grievance redressal by banks. The committee was expected to undertake a strict review of the existing system of the Banking Ombudsman Scheme and customer service in banks, including the approach, attitude and fair treatment to customers in retail, small and pensioners segments.

The committee was also asked to evaluate the existing system of grievance redressal mechanism prevalent in banks, the structure and efficacy, and recommend measures for expeditious resolution of complaints.

Mr Kini's RTI query also sought to know the number of responses received by the committee from the public and NGOs. The RBI said that over a thousand responses were received. It also said that the number of personal submissions has not been tracked separately.

In a circular dated 16 June 2010, the RBI had invited suggestions to be submitted to the Damodaran committee on customer services by 15 July 2010. Mr Kini had also sent his recommendations.

The reply from the RBI also said that the committee conducted as many as 44 meetings, with different stakeholders such as industry associations, bank unions, and individuals among others, across the country. Interestingly, the chairman and committee members mostly attended the meetings that were conducted in Mumbai, while only two members did most of the hard work of visiting other cities. The meetings in other cities were attended mainly by three members of the committee, namely MS Sundararajan, and S Gopalkrishnan. Curiously, a large number of meetings (19 out of 44 meetings) were attended by other representatives of the RBI-other than the committee members-such as regional directors and banking ombudsman.

According to the RTI reply, the committee has also included comments of stakeholders based in the North-East, such as Sikkim, Guwahati and Mizoram. Mr Damodaran, the committee chairman, apart from attending the meetings in Mumbai, was present at only three of the meetings that were held outside Mumbai, in Delhi, Kochi and Tripura.

Experts point out that, this is the first time that any committee has sought recommendations from the people based in such remote and backward areas of the country, indicating that the report would have extensive information.

As per the RBI's reply, there were only two meetings held to discuss the inputs regarding usage of technology for customer care and protection. Interestingly, both of these were only attended by one committee member, MV Nair.

Speaking to Moneylife, Mr Kini said, "Our regulators appoint high-level committees and keep their reports in cold storage. This is not a good sign."


Tata Steel expects steel demand to increase by 11% in FY11-12

Steel demand in India grew by 9.9% in 2010-11 to reach to over 65 MT

The spike in interest rate might not impact steel demand in the country in the current fiscal as it is slated to grow by up to 11% backed by higher infrastructure spendings, Tata Steel said.

Speaking to reporters last evening, Tata Steel managing director HR Nerurkar said that there was a bit of concern regarding commodity inflation, but that has not reached to a proportion which could be dubbed as "alarming".

The apex bank, to rein in the runaway inflation, has increased the policy rates 10 times since March last year pushing headline inflation to over nine per cent in May this year.

Nerurkar said his hope stems from the fact that the construction was continuing and infrastructure projects, which consume most of the alloys, were also in the upswing. Steel demand in India grew by 9.9% in 2010-11 to reach to over 65 MT.

"10% growth in steel demand in India is feasible as long as GDP grows at around eight per cent. This year, I believe, steel demand will grow by 9%-11%," he said.

According to Joint Plant Committee, India's consumption of steel in April this year was at 5.030 million tonnes, up 1.8% over the same month last year.

However, according to brokerage firm IDFC Securities, sales volume of the country's steel firms were hit during April and May by dealer de-stocking and the same was also likely to continue in the current month.

"Demand is weakening. Investment-led demand has consistently remained weak over the last several quarters. Consumption-led demand growth is also showing signs of weakness," the brokerage firm said.

"Unless long products' (mainly used in construction) demand improves in H2 FY12, we expect steel demand in India to grow by just 5%-6% against the earlier general estimate of a double-digit growth," it added.

On Wednesday, Tata Steel ended 2.38% up at Rs601.30 on the Bombay Stock Exchange, while the benchmark Sensex gained 1.09% to 18,693.86.


Aanjaneya Lifecare wins orders worth Rs60 crore to make cough syrup

The orders are to be executed in the next two months

Bulk drug maker Aanjaneya Lifecare said it has received orders worth Rs60 crore from various players, including Wockhardt and Cipla, for manufacturing cough syrup 'Recodex'. The orders are to be executed in the next two months.

Among others, Remedica, Tanzania Pharmaceutical, Activo SA and Pharmed Europe Ltd have also placed orders for 'Recodex'.

"It is estimated by the company that these new orders from new clients will have a positive impact by over 20% in sales and 5% on EBIDTA margins this financial year," Aanjaneya Lifecare said in a statement.

The Mumbai-based firm has also received the certificate of suitability (CEP) from European Directorate for the Quality of Medicines (EDQM) for two of its bulk drugs Quinine Sulphate and Quinine Hydrochloride.

"As one of world's largest producers of Quinine salts, this certification opens the gates for a huge market in Europe for Aanjaneya Lifecare," the company said.

Quinine salts is a key ingredient in the manufacturing of anti-malaria drugs.

Aanjaneya Lifecare chairman Kannan Vishwanath said: "We have entered into a fast trajectory of growth envisaged in our long-term blue print of making Aanjaneya as a global leader in certain product categories."

The company recently raised about Rs117 crore from its IPO and the funds are being used to built new capacities along with the refurbishing of R&D centre.

On Wednesday, Aanjaneya Lifecare ended 0.34% up at Rs369.25 on the Bombay Stock Exchange, while the benchmark Sensex gained 1.09% to 18,693.86.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife 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 and Lion Stockletter)