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.

Is UID anti-people?-Part 9: Law makers as law breakers

The Indian government, the PM and Nilekani have chosen to ignore the Parliamentary Committee's report on UID. They have continued to implement the UID scheme with greater vigour. Their disdain for the Committee report establishes their arbitrariness and they have given to the “Rule of Law”

I am not an advocate. Hence, I make no claim to knowledge or expertise in law or on legal questions. However, I do enjoy the study of law and legality. Therefore, in this article, I give my views on the legality of the government’s actions in implementing the UID (Unique Identification) scheme from my ‘layman’s’ perspective. I have led a coir suit against UID.


I believe in the “Rule of Law”. Let me elaborate it as I understand this phrase.


Rule of Law and UID/UIDAI

“Rule of Law” is a principle that governs modern civilised society. The principle behoves governments to act in accordance with the law and justice. It circumscribes governments from acting with any arbitrariness. No one, including the government itself or any of its officials, are exempt from the rule. They are all to abhor arbitrariness. Hence, no government functionary can act without a law or statute that permits his actions. (the word ‘his’ whenever used here, includes the feminine gender, is synonymous with the feminine form of the word and is used for the sake of convenience to represent both genders. It is not to be construed as having any bias.) The government did many acts, which are arguably outside the pale of law.


Firstly, the prime minister appointed Nandan Nilekani as head of Unique Identification Authority of India (UIDAI) and granted him the rank and status of a Cabinet minister. While it is the prerogative of a PM to appoint anyone of his choice to any position, this privilege or right, if you will, is not be a whimsical or arbitrary exercise. Not only must that be so, but the act (of appointment) be seen to be done with adequate reasonableness. Mr Nilekani is admittedly a successful business person in the IT field. There are many others equally successful, equally qualified and perhaps, even more qualified. Taking people from business into government through executive appointments is a peculiarly western, largely US, practice. It has not been successful. McNamara, appointed from being president of Ford Motors to the Kennedy cabinet, as Defence Secretary, led the disastrous Vietnam War. Cheney too as Bush's Defence Secretary during the Iraq war was anything but a success. Nilekani's appointment was non-transparent. It is not known how or why the PM chose him.


Granting him a Cabinet rank and status makes it worse. Appointment to the Cabinet is also the PM's singular privilege. This too is governed by Article 74 of the Constitution. Art 74 (1-A) stipulates that the number of ministers is not to exceed 15% of the total number of members of the Lok Sabha. Art 74 (5) says that a minister, who for a period of six consecutive months is not a member of either House of Parliament, shall at the expiration of the period cease to be a minister. Art 74 (6) provides for salaries and allowances of ministers to be governed by Parliament. Nowhere does the Constitution or any law provide for the grant of rank and status of a Cabinet minister to any individual. I am told that Nilekani does not draw any salary. We do not know whether he is paid any allowances of enjoys any pecuniary advantages of the rank or status. If so, he and the government are in violation of the Constitution.


Serious consequences follow when these Constitutional provisions are skirted. Art 74 (4) of the Constitution mandates that before a minister enters office the President shall administer the oath of office and secrecy to him. Nilekani has not taken the oath. As one with the rank and status of a Cabinet minister, it is reasonable to presume that he must have attended Cabinet meetings. Nothing prevents him from disclosing the proceedings of the meetings and he cannot be taken to task for such disclosure.



The PM and his government are fully aware of the need for a law to authorize the implementation of the UID scheme. This is the reason why they brought a Bill before Parliament. The Bill, called “The National Identification Authority of India, (NIDAI) Bill 2010”, was placed before Parliament. It was referred to the Parliament Standing Committee on Finance. The Committee, in a near unanimous decision, rejected not just the Bill, but it also trashed the UID scheme.


The Committee was scathing in its criticism of the UID scheme, calling it directionless, lacking clarity of purpose and raising serious concerns regarding national security. The Committee's report is with the government since December 2011. The government, the PM and Nilekani have chosen to ignore the Parliament Committee’s report. They have continued to implement the UID scheme with greater vigour. Their disdain for the Committee establishes their arbitrariness and go by they have given to the “Rule of Law”.


Article 73 of the Constitution

The UIDAI justified its implementation of the UID scheme during its appearance before the Parliament Committee that it could continue to implement the UID scheme without a law. The Authority justified this stand by quoting the Attorney General's opinion that the power of the Executive is coextensive with that of Parliament under Art 73. The Committee said that it is not satisfied with the position UIDAI took to continue its implementation of the UID scheme. The proviso to the Article makes it clear that the power of the Executive does not extend to matters with respect to which the legislature of the state has the power to make laws. All purposes for which UID scheme is ostensibly implemented, such as public services, public health, local government, etc, are in the “State List” to the Seventh Schedule under Art 246 of the Constitution.


Hence, implementation of the UID scheme without a law violates the Constitution. The government and UIDAI have thus made a complete mockery of the “Rule of Law”. The scant regard that the government and UIDAI have for the “Rule of Law” is seen in the draft NIDAI Bill. The Bill legitimizes all acts that UIDAI has done before the law was passed. In other words, the government and UIDAI think that they could do anything and everything as they please and in the event their acts are questioned they could get away with it by brining a law to give legal sanctity to their acts. A principle of “Rule of Law” is that the government cannot give retrospective legitimacy to its acts.


Right to privacy

This is inherent in the right to life guaranteed under our Constitution. When the government proposes to gather personal and biometric data of the people it intrudes into their privacy. Such acts cannot be done without the sanction of law. Knowing this, the UIDAI and the government brought forward a law. Even after the Parliament Committee rejected it, they have continued to implement the UID scheme.


Jeopardising national security

One of the UIDAI's contractors is L1 ID Solutions (L1 for short). The company’s history, to put it mildly, does not inspire confidence. A lot of information trawled from the internet is in the annexure to the Monograph. The company was formed through the efforts of La Penta, which merged two companies, Viisage and Identix to set up L1. Viisage was under investigation by US Securities and Exchange Commission (SEC) for certain offenses. According to a website “AxXiom for Liberty”, Louis Freeh (former Director of FBI), Admiral Loy (former head of Transportation Security Agency) George Tenet (former Director of CIA), Frank Moss (former program manager for the State Department's E-Passport program) and many others who held key positions in the (US) federal government joined Viisage/L1 as members of the board of directors or as paid employees.


In a page on the website (AxXiom) titled, “The Revolving Door at Never Stops Turning—Look who's doing your Biometrics Now!”, the author, Mark Lerner, alleges, “It must be really sweet to sign off on contracts worth millions of dollars, tens of millions or more in fact and then turn right around and go on the payroll of the same company that you awarded the contracts to. Sure, Tenet, Freeh and the others may not have had to sign the actual contracts but certainly they are responsible for knowing who the contracts went to when they were in charge of their respective agencies and departments." The website also alleges that “Viisage is the same company that had a state driver’s license contract voided by the Georgia State Supreme Court for misrepresentation.”


It is interesting to note that the UIDAI chief also came into government through a revolving door from business. This is the fashion today in some democracies that follow the US pattern.


L1 is now taken over by another company, Safran, headquartered in France; but L1 still has operations in the US, with intelligence agencies and government departments. Is it prudent or even sensible to contract with such a company for biometric services for the entire population of this country? When Huawei, a Chinese company obtained a contract to supply modems to BSNL, there was a hue and cry in media, and by activists and politicians, raising security concerns. When the Indian Institute of Science (IISc) signed an agreement with Huawei for collaboration in research, again there were loud protests and IISc had to rescind the agreement. Why is everyone silent on the deal between UIDAI and L1? The Parliament Standing Committee on Finance, which examined the National Identification Authority of India Bill 2010, rejected the Bill as well as the UID scheme, they also expressed serious concerns about the effect UID would have on national security. Did they have in mind the contracts with companies like L1?


Law-makers and law-breakers

When the government and their collaborators wilfully ignore the law, they would be guilty of breaking the law. There is no excuse for breaking the law even for good purposes or with good intentions. Skirting of the law by interpretations of one’s choice, could never be condoned or ignored. When the acts of the law-maker also have elements of jeopardising national security, as is the case here—through contracting with companies of questionable backgrounds—when information relating to the contracts are denied to the people, the acts could be construed as brazen. It is time that all right-thinking people rise up to question such acts. This is exactly what some of us have done. We have approached the courts. We would agitate the matter through the judicial process, as well as on the political and social planes until success is achieved and diabolical machinations of those who indulge in such activities are exposed and halted. In this we, take inspiration from Roger Clarke who campaigned for twenty years to scrap the Australian ID card. Two of his writings from his website are in the annexure. One article gives the general issues relating to ID cards and the other on the specifics of the Australia ID card. He is our model to follow.


Here is the UN review on Rule of Law


The principle of the rule of law embedded in the Charter of the United Nations encompasses elements relevant to the conduct of State-to-State relations. The main United Nations organs, including the General Assembly and the Security Council, have essential roles in this regard, which are derived from and require action in accordance with the provisions of the Charter.


“For the United Nations, the rule of law refers to a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards. It requires, as well, measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency.”


(S/2004/616) (Report of the Secretary-General on the Rule of Law and Transitional Justice in Conflict and Post-Conflict Societies)

(Col (Retd.) Mathew Thomas is a former defence services officer and missile scientist turned civic activist campaigning against state database control of the people.)

(This is the concluding part of a nine-part series)

You may also want to read the earlier posts of this 9-part series of articles on how UID is anti-people.

Is UID anti-people?–Part 8: UID’s security is flawed
Is UID anti-people?–Part7: Incarnation of new geo-strategic tools, NCTC, NATGRID, UID, RFID and NPR
Is UID anti-people?–Part 6: The foundation for incessant intrusion
Is UID anti-people?–Part 5: Why UID is impractical and flawed “Ab initio”
Is UID anti-people?-Part 4: Does the implementation smack of corruption and negligence?
Is UID anti-people?-Part 3: Tall claims and tomfoolery of UID
Is UID anti-people? –Part 2: A bundle of contradictions, misconceptions & mirages
Is UID anti-people? The database state –Part1




Design and People

3 years ago

Very useful information. Thank you Moneylife.

This is to bring your attention the Design & People "Aadhaar ka Anaadar" campaign launched recently in South Bangalore, the constituency chosen by Nandan Nilekani to contest the Lok Sabha election. Campaign details:

Continue to publish such stories that benefit ordinary masses in this country.


4 years ago


Krishnaswami CVR

4 years ago

Appears to be logical thoughts. Would certainly go through the Australian case. appears to be sane article, deserves a legal probe. If we can emulate US in some cases, why not follow their law on privacy also?

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