Moneylife Foundation’s Insurance Helpline has solved three cases of life insurance sold with a bait of fraudulent “interest-free loans”. In all the cases, Reliance Life’s corporate agent AB Capital was involved
Moneylife Foundation’s Insurance Helpline has helped three persons to get refunds of Reliance Life Insurance policy premium as the product was fraudulently sold by enticing the customer with a fake “interest-free loan” of 10 times the premium from Reliance Capital. The latest case was of Shailendra Dheer (name changed) who had paid Rs30,000 premium to AB Capital with hope of getting Rs3 lakh “interest-free loan”.
With Moneylife Foundation’s intervention, Mr Dheer immediately got a call from head–customer care of Reliance Life who helped to get refund of Rs30,000 within two days. The fourth case has just been reported to AB Capital wherein the customer paid Rs20,000 premium for lure of Rs2 lakh loan. Customers even get a fake loan reference number to make it look authentic. The waiting period for the fake loan is ‘forever’.
In the previous two cases, Prashant Gupte (name changed) got a refund of Rs2 lakh and Dr Sujay Verma (name changed) got a refund of his premium of Rs60,000. Mr Gupte had taken a personal loan of Rs2 lakh to pay the premium. Clearly, these are cases of outright cheating ought to make the regulator sit up, but until they do, people are getting trapped into taking a loan to buy high premium insurance plans of trivial value with the lure of an “interest-free” loan of 10 times the premium. Dr Verma was running pillar to post for six months to get the refund without any success, but within two hours of our taking up his case with the company, Reliance Life promised to make amends.
We had stated in our previous article without mincing any words, “Will the Insurance Regulatory and Development Authority (IRDA) act quickly to cancel AB Capital’s license before it cheats more people?”AB Capital, a corporate agent of Reliance Life has written to Moneylife Foundation probably after facing the heat of its name entangled in the three cases that were resolved.
AB Capital’s email states that “We would like to bring to your attention that AB Capital is committed to protecting its customers' interests and ensure customer delight. We are therefore taking these reported incidents very seriously. As a result, based on our internal vigilance, we plan to lodge FIRs against the perpetrators and terminate their employment. We have strengthened our pre-login verification calling wherein each and every customer is called for verification and confirmations.”
AB Capital asks Moneylife readers to bring any such incidence of spurious selling to their notice by writing to them at [email protected] . Please drop a line to Moneylife Foundation Insurance Helpline [email protected] so that we are kept in the loop and can ensure justice to the hapless consumer. AB Capital’s email ends with “We would also like to caution your readers to not let greed get the better of them and not fall prey to any such lucrative and bogus offers.” If only such bogus offers were never made by those associated with AB Capital, the problem would not have arose.
AB Capital should evaluate at all the policies sold by them instead of waiting for policyholders to make complaints. Reliance Life has also a lot to answer even if it did not directly make such fraudulent offers. IRDA can surely get the menace to stop, in case, it acts. Reliance Life and IRDA—are you listening?
If the Nifty closes below any previous day’s low, we may see the upmove slowing
The benchmarks settled higher on buying support from rate sensitive sectors, helping the market close in the green for the third day in a row. If the Nifty closes below any previous day’s low, we may see the upmove slowing. The National Stock Exchange (NSE) reported a higher volume of 54.54 crore shares and advance-decline ratio of 799:552.
The domestic market opened lower on the back of weak economic indicators—contraction in industrial production, rise in retail inflation, dip in exports and a decline in auto sales—released on Friday. On the other hand, markets in Asia were higher in morning trade as Chinese GDP data for the second quarter was in line with analysts’ expectations.
The Nifty opened 18 points lower at 5,991 and the Sensex started the day at 19,926, a fall of 32 points from its previous close. The indices touched their lows in the first half hour with the Nifty falling to 5,981 and the Sensex slipping to 19,883. The benchmarks remained in the negative for the entire morning session as investors booked profits after two consecutive days of gains.
Meanwhile, headline inflation rose to 4.86% in June, driven mainly by rising prices of food articles, especially vegetables including onion. Inflation based on the Wholesale Price Index (WPI) had stood at 4.70% in May. In June, 2012, it was 7.58%.
The market emerged into the positive terrain in noon trade as buying in fast moving consumer goods, realty, technology and healthcare sectors. A green opening of the key European markets also supported the gains back home.
The indices hit their intraday highs at around 2.30pm on across-the-board buying. The Nifty rose to 6,038 and the Sensex regained the 20,000 level, climbing to 20,072 at their respective highs.
The benchmarks settled near their highs and in the green for the third day in a row. The Nifty gained 22 points (0.36%) to 6,031 and the Sensex closed the session at 20,034, up 76 points (0.38%).
Among the broader indices, the BSE Mid-cap index climbed 0.90% and the BSE Small-cap index advanced 0.80%.
Except for BSE Power (down 0.78%) and BSE IT (down 0.03%) all the other sectoral indices closed in the green. The top sectoral gainers were BSE Realty (up 1.94%); BSE FMCG (up 1.19%); BSE Capital Goods (up 0.89%); BSE Oil & Gas (up 0.72%) and BSE Bankex (up 0.72%).
Out of the 30 stocks on the Sensex, 19 stocks settled higher. The main gainers were Hindalco Industries (up 3.69%); Sterlite Industries (up 3.28%); Bharti Airtel (up 3.20%); Mahindra & Mahindra (up 2.46%) and TCS (up 2.20%). The top losers were NTPC (down 2.64%); Coal India (down 2.50%); Infosys (down 2.17%); Tata Steel (down 2.07%) and Tata Power (down 1.17%).
The top two A Group gainers on the BSE were—HDIL (up 7.93%) and Muthoot Finance (up 7.37%).
The top two A Group losers on the BSE were—Gitanjali Gems (down 4.97%) and MMTC (down 4.94%).
The top two B Group gainers on the BSE were—Opto Circuits (up 34.51%) and Archidply Industries (up 20%).
The top two B Group losers on the BSE were—Automotive Stampings & Assemblies (down 19.86%) and Rishabdev Technoable (down 19.64%).
Of the 50 stocks on the Nifty, 33 ended in the in the green. The major gainers were Punjab National Bank (up 5.30%); Bank of Baroda (up 4.31%); Cairn (up 3.96%); Jaiprakash Associates (up 3.91%) and Hindalco Industries (up 3.34%). The key losers were Coal India (down 2.57%); NTPC (down 2.22%); Tata Steel (down 2.13%); Infosys (down 2.08%) and BHEL (down 1.35%).
Markets in Asia closed in the green as China’s second quarter GDP growth came in at 7.5%, in line with analysts’ expectations. Positive comments from the People’s Bank of China that it would use a mix of policy tools to tackle liquidity in order to keep credit growth steady also supported the sentiments.
The Shanghai Composite climbed 0.98%; the Hang Seng rose 0.12%; the Jakarta Composite and the KLSE Composite added 0.06% each; the Nikkei 225 gained 0.23%; the Straits Times added 0.02%; the Seoul Composite advanced 0.28% and the Taiwan Weighted settled 0.42% higher.
At the time of writing, the key European markets were up between 0.34% and 0.50% and the US stock futures were trading with minor gains.
Back home, foreign institutional investors were net buyers of shares totalling Rs664.82 crore on Friday whereas domestic institutional investors were net sellers of equities amounting to Rs144.97 crore.
SpiceJet has clarified to the news item titled “Kuwait Airways enters the fray to buy stake in SpiceJet”. The company clarified that few investors have evinced interest in the company post government allowing FDI in civil aviation sector to foreign airlines, however, it will be very pre-mature to comment on the possibilities of any fresh equity issuance to such interested parties or confirm/deny names of any specific entity. The stock rose 7.94% to close at Rs29.90 on the BSE.
The board of directors of MBL Infrastructures have recommended dividend of 30% (Rs3 per equity share of face value of Rs10 each) subject to the approval of the shareholders at the ensuing annual general meeting. The stock fell 2.62% to close at Rs115.25 on the NSE.
Tata Global Beverages today said it has entered into an agreement with group firm Tata Realty and Infrastructure for the development of the its property in Bangalore. The development of the company's property in Bangalore will be done through a special purpose vehicle (SPV), Tata Global Beverages said in a filing to exchanges. The stock jumped 4.17% to Rs153.75 on the NSE.
A 10% fall in the rupee against the dollar will raise headline inflation by around 60 basis points in the near term, says BNP Paribas in its report
WPI (wholesale price index) based inflation continued to surprise to the downside in June.
At 4.86% y/y, up from 4.70% in May, the headline rate was below the market expectation for a 4.94% gain and BNP Paribas’ forecast for a 5.1% increase. Moreover, the index’s back data were revised down for a second month in a row, with April’s headline WPI outturn marked down to 4.77% y/y from 4.89% initially reported. While far from considered the beginning of a trend, this suggests there is some probability that the May and June readings will also be pulled down, consistent with activity losing momentum rapidly around the turn of the fiscal year.
Drilling down into the report showed that the key factor driving today’s downward surprise was a sharper-than-anticipated slide of core inflation as primary food price inflation picked up as expected. Primary food inflation picked up from 8.25% in May to reach a four-month high of 9.74% y/y in June. Month-to-month swings in food inflation have been particularly volatile in recent months given the inter-play of large base effects, the lagged impact of last year’s deficient monsoon and then excess monsoon rain in the past couple of months.
The latter was particularly important in June, with fruit and vegetable inflation jumping from 2.8% y/y to 8.4% y/y reflecting a 4.3% m/m rise once the data are seasonally adjusted, the investment bank said in its report. The sequential surge suggests primary food articles inflation is likely to stay high in the near term. But, on the basis of a normal monsoon as projected by the IMD as we move further into the year, upside risks to food price inflation look limited.
BNP Paribas’ US-style, ex-food and energy gauge, which captures roughly 60% of the WPI basket, meanwhile, slipped to 2.4% y/y from 2.5% y/y in May; the lowest for 42 months. This measure had been around 5% y/y as recently as January this year. The Reserve Bank of India’s (RBI) preferred measure of underlying WPI inflation—non-food manufactured goods inflation—dropped to 2.1% y/y from 2.4% in May; its lowest reading since January 2010.
These softer-than-expected readings on core inflation are consistent with BNP Paribas’ estimate that sub-5% GDP growth has opened up an increasingly wide output gap, dragging down core inflationary pressure. With only a modest pick up in GDP growth expected over the next year (BNP Paribas targets FY2014 GDP growth of 5.5% against 5% in FY2013), the output gap should widen further, ensuring that core inflation moves lower through the balance of this year. The investment bank’s base forecast anticipates RBI’s core measure should slide to close to 1% by end-FY2014.
The recent slump in the rupee remains the key upside inflation risk that the central bank will remain wary of. However, according to BNP Paribas and also RBI’s estimates, a 10% fall in the rupee against the dollar will raise headline inflation by around 60 basis points in the near term. The current 9% fall in the rupee vis-à-vis the dollar over the past quarter hence will, other things equal, add roughly 0.5 percentage points to headline WPI.
But other things are not equal, as the broadly commensurate fall in commodity prices over the same period is likely to largely neutralise the impact of currency weakness; an assessment corroborated by the limited sequential rises in the core measures in June. This, when set against the backdrop of sub-par domestic activity growth, means headline WPI is likely to remain below RBI’s 5%-5.5% comfort level for much of the current fiscal year or so.
Overall, today’s WPI report will further reassure the RBI that upside inflation risks are contained. However, since Fed chairman Ben Bernanke’s testimony to the Congress on 22 May, foreign institutional investors have almost consistently been net sellers of Indian bonds and overall net portfolio (debt and equity) outflows have since totalled over $9 billion according to the Securities and Exchange Board of India (SEBI) data.
BNP Paribas doubts if RBI will deliver a rate cut before it sees more evidence of global risk appetite stabilising. Cutting rates at this point could risk further capital outflows at a time when the nation’s gross external financing needs are estimated at over $250 billion over the next fiscal year.