As per the draft guidelines, RBI would allow banks with good credentials to operate as insurance brokers and leverage their branch to increase the penetration of the insurance sector
The Reserve Bank of India (RBI) has decided to permit banks to become insurance brokers in order develop the insurance sector in the country. RBI will allow banks to offer policies from different insurance companies to their customers apart from their own insurance subsidiaries’ policies.
RBI, in its draft guidelines, said, “In order to enable banks to leverage their branch network for increasing insurance penetration, it has been decided to permit banks to undertake insurance broking business departmentally, subject to the requirements, including the minimum eligibility criteria.”
However, banks must ensure transparency and disclose remuneration received from various insurance companies, the central bank said.
The draft guidelines states, “In order to ensure transparency, banks should disclose to the customers, details of remuneration (in any form) received from various insurance companies for the broking business. The details of fees/ brokerage received in respect of insurance broking business undertaken by them should also be disclosed.”
A bank which desires to become insurance broker have to take prior approval and fulfill minimum eligibility criteria with RBI. Its approval will be based on validity period for three years and subject to review thereafter.
“Insurance broking is a knowledge intensive activity which requires professional expertise so it will be permitted subject to the certain conditions,” said RBI in its press release.
RBI in its draft, on entry of banks into insurance broking business has setup following eligibility criteria as per published accounts as on 31st March of the previous year,
However, according to RBI draft, bank which offers insurance broking services shall not enter into any arrangement for corporate agency or insurance referral business to avoid any conflict of interest.
RBI has invited feedback from the stakeholders on the draft norms and given time period till 31st December 2013.
Earlier, finance minister, P Chindambaram in the budget speech of February 2014 said that, banks will be permitted to act as insurance brokers. Insurance Regulatory and Development Authority (IRDA) already allowed banks to act as brokers and sell products of more than one insurer to increase the penetration of the insurance sector across the country.
Nifty and Sensex opened marginally up on positive cues like better GDP data, improved PMI figures in Europe and China and end to the sugar industry impasse
On Friday, we expected the stock markets to open the week higher. On Monday the markets opened slightly in the red but moved up immediately and stayed in the green throughout the trading session. The market reacted to overall positive cues such as ‘improved’ GDP data released on Friday, improved HSBC PMI Index (though we have written that this indicator is faulty and dangerous), higher expectations of sugar output as the impasse ended, stronger rupee and improved economic data from Europe and China. Even the news that Black Friday shopping was weaker than expected filtered into the market. In the aftermath of the Thanksgiving weekend, the Black Friday and ongoing Cyber Monday deals in America (do check out our exclusive Cover Story on online shopping for dos and don’ts), a survey found that many consumers had made plans to restrict spending this year. This means this Black Friday may be worse than last year.
The BSE Sensex opened at 20,771, hit an intra-day low of 20,770 and then immediately went up to the green, where it stayed throughout the rest of the session. It hit an intra-day high of 20,941 before closing at 20,898 (up 106.08 points or 0.51%). Similarly, Nifty opened slightly lower at 6171.15 (which is also its intra-day low), the rallied to hit an intra-day high of 6,228 before closing at 6,217 (up 41 points, or 0.68%).
The indices moved up on volumes of 53.94 lakh shares.
All stock markets indices finished in the green except for CNX Energy and CNX PSE, which were slightly down by 0.22% and 0.23% respectively. CNX Pharmaceuticals finished up strongly, up 2.04%.
Of the 50 stocks on the Nifty, 35 advanced and 15 declined. The top gainers were Ranbaxy (6.20%); Jindal Steel (4.88%); Sun Pharmaceuticals (4.24%); HCL Technologies (4.01%) and Wipro (2.71%). The top losers were Hindustan Unilever (-1.92%); Power Grid (-1.52%); Gail (-1.37%); ONGC (-1.30%); Maruti (-0.96%).
Of the 1,468 shares on the NSE, 872 closed in the positive, 501 closed in the negative while 95 remained unchanged.
According to RBI, state oil firms now are sourcing all dollars from market, and can do so beyond their normal daily needs. The Indian rupee is near its two-week high as economic worries ease, with the rupee touching Rs61.9650 per dollar, its highest since November 19.
According to reports, the sugar impasse has ended, with private mills agreeing to pay $280 per quintal for cane. It is estimated that 25 million tonnes of sugar will be produced this year, compared with its annual sugar consumption of around 23 million tonnes.
According to Reuters, the HSBC survey showed Indian manufacturing returned to growth last month as a strong rise in orders pushed factories to step up production. However, we caution readers that this has been proved to be a faulty indicator in which market takes for granted. The CPI for industrial workers rose 11.06% in October.
Asian stock markets were trading mostly flat. China PMI data was found to be weaker than expected. According to Reuters, The final PMI reading came in at 50.8 in November, down from 50.9 in October. Shanghai’s composite index was down 0.61%. Tokyo’s Nikkei was flat while Hong Kong’s Hang Seng was up 0.66%.
The Euro region some key numbers released during noon today, but stock markets were unimpressed. Italy November manufacturing PMI was seen at 51.4 compared to 50.7 in October 2012. Similarly, France November manufacturing PMI was seen at 48.4 this year vs 49.1 in October, and Germany November manufacturing PMI were seen at 52.7 vs 51.7 in October. At time of writing this piece, all European stock markets were trending down, except Germany’s DAX which was seen trending flat.
In the aftermath of the Black Friday (which saw some fights and casualties) and ongoing Cyber Monday deals in America, a survey found that many consumers had made plans to restrict spending this year. This means this Black Friday may be worse than last year. According to National Retail Federation, shoppers spent $407.02, on average, from Thursday through Sunday (planned), down from $423.55 last year. Total spending is estimated to reach $57.4 billion. US stock markets futures were seen rising during early trade, except S&P was flat, with a slight down trend.
The victim’s father has moved Supreme Court seeking directions to put one of the accused, who was then a minor, on trial by a criminal court by quashing a law that bans such prosecution of juveniles
The Supreme Court on Monday issued notice to the union government on a plea filed by father of the 16th December gangrape victim. The plea says that juvenility of an accused needs to be ascertained by a criminal court and not by the Juvenile Justice Board (JJB).
A Bench headed by Justice BS Chauhan also asked the Ministry of Women and Child Development to file its response within four weeks on the issue of ascertaining the ‘minority of an offender’ in heinous cases.
It also sought the records including the statement of the victim that implicated the juvenile offender in the sensational case.
The victim’s father has moved the apex court seeking directions to put one of the accused who was then a minor on trial by a criminal court by quashing a law that bans such prosecution of juveniles.
The juvenile, who was six months short of 18 years at the time of incident, was convicted for gangrape and murder of the 23-year-old girl but he got away with a maximum of three years imprisonment mandated under the juvenile law by the JJB.
The father of the victim, who had said the 31 August 2013 verdict of the Board was not acceptable to the family, has filed the petition in the apex court, saying since they are challenging the constitutional validity of the Juvenile Justice (Care and Protection of Children) Act 2000, there is no other authority concerned to which they can approach for such relief.
The victim’s father has sought a direction to declare “as unconstitutional and void the Juvenile Justice (Care and Protection of Children) Act to the extent it puts a blanket ban on the power of the criminal courts to try a juvenile offender for offences committed under the IPC“.
The petition filed through advocate Aman Hingorani said the juvenile “is liable to be tried and punished by the criminal courts for the aforesaid offences, complete with the judicial discretion on established principles of law regarding the award of sentence keeping in view, amongst other factors, the nature and gravity of the offence”.