Citizens' Issues
The Reserve Bank of India and its special perquisites

The apex bank enjoys a hallowed status, is not subject to any external audits, and its officials enjoy a slew of special privileges

Even while the Reserve Bank of India (RBI) protests increased interference and supervision by the Financial Stability & Development Council (FSDC), there may be some serious trouble brewing in its own cadres which could focus much-needed attention to its internal functioning.

As India's monetary authority and banking regulator, RBI enjoys a special status and is not subject to any external audit. This allows it to write in a slew of special privileges for its officials, not to mention lavish expenditure on frequent off-site meetings at luxury resorts. In recent years, there have been even more goodies, because India's position as a growing economic power and major world market has meant more invitations to global conferences and committees and junkets. A recent flashpoint is a decision to apparently hire 200 officers on a contract basis.

Thanks to a standoff with the officers' union (AIRBEA), RBI has not held promotional exams that allow those in the clerical cadre a chance to upgrade themselves to the officers' cadre depriving some deserving candidates of career enhancement.

Interestingly, RBI already has excess 'officers' because of another unusual policy that allows it to promote more people than there are vacancies, if they clear the promotion exams. By its own admission, 3,607 employees have passed such exams in the past three years against only 1,330 vacancies, with the result that it has excess officers.

Being an officer carries prestige and lots of perks. One of these is a hefty petrol allowance, which requires only a 'bogus' declaration, according to a source. Every officer gets 150 litres of petrol a month if he lives within 2 kilometres of the workplace and 250 litres if he lives beyond. Another is an allowance for domestic help for house-cleaning. Both these allowances have been raised significantly, in a recent wage settlement. Other quirky perks include fruit bags (in addition to subsidised lunch) and unlimited mineral water at work and at home (don't RBI officers use water purifiers?) as also unlimited overtime for drivers.
 

User

COMMENTS

venkatesan

7 years ago

Lots of facts and fiction mixed up here. Surprisingly not many people have read this post and reacted.

Sanju

7 years ago

I WAS NOT AWARE THAT THERE IS 3RD CLASS COMPARTMENT TOO IN THE RAILWAY FROM WHERE UR SIS WAS TRAVELLING.

Rohinton Khambata

7 years ago

My Sister In Law worked for her 39 years with RBI. She finally retired as General Manager Of Foreign Exchange Dept. with RBI Mumbai. She was entitled to 1st.class Rail pass, and yet she always travelled by 3rd. class from Dadar To Mumbai. She was extremly honest and very strict in her duties.

Public Provident Funds and HUFs: The untold story

HUFs cannot open a PPF or even a post-office account since May 2005; but people continue to be taken for a ride and the accounts continue to be opened out of ignorance

This is an issue that is several years old, but we revisit it because too many people are still unaware of how the government functions with regard to schemes that use banks and post offices as collection points.

Here is what is happening to a lot of people. A reader, RJ, wrote to us: "I have a Public Provident Fund (PPF) account with State Bank of India (SBI) in the names of two HUFs (Hindu Undivided Family) of which I am the karta. The account has been operative for over 25 years and was renewed in April 2007 for a five-year period. Since then, the Bank accepted the maximum investible amount of Rs70,000 every year until March 2010 and also credited interest on the amount for three years until March 2010. Now, the branch manager says that I cannot get interest as per a government notification issued in May 2005. Why then did the Bank renew my account in 2007 and accept my deposits every year? How do I get justice?"

While this story may sound outrageous, the Reserve Bank of India (RBI) tells us that getting justice may not be so easy. It is, indeed, a fact that HUFs cannot open a PPF or even a post-office account since May 2005; but people continue to be taken for a ride and the accounts continue to be opened out of ignorance. Does that make the bank liable?

According to sources in RBI, it does not. The bank only acts as a collection agent for what is essentially a government scheme and earns a tiny commission for the service rendered. It is the job of the customer to know the rules and regulations. Incidentally, the bank does not get to use the funds or the float on it, so it is not possible to hold it accountable or ask it to pay interest. Bankers also say that after a spate of complaints, the government issued advertisements informing HUFs about the changed rules.

However, the bottom line is that when it comes to government schemes, the banker is only a facilitator and investors need to know the rules. A bit of sage advice from a banker to the thousands of angry customers who have threatened to take SBI to court is: First safeguard your principal by withdrawing the money, even if it is after deduction of interest. Only then, launch a battle. If a lawsuit is filed, it is clear that the Supreme Court will, ultimately, decide whether collecting banks or post offices are supposed to know the rules and are liable to pay interest. Until then, the best course is for such depositors to come together for a legal fight.

User

COMMENTS

THAKKAR

7 years ago

Dear Sir / Madam,

My PPF account has matured on 31/03/2010. If I extend it ''with contribution'', can I close the account whenever I want (e.g. after 1 year or 2 years), or do I have to compulsorily continue it for 5 years ?

REPLY

Deepak R Khemani

In Reply to THAKKAR 7 years ago

If your account has matured on 31-3-2010 then before making a deposit this year before 31-3-2011 you have to get an extension done for 5 years, you can close it only after 5 years but you can make withdrawals upto 60% of your balance dated 31-3-2010 anytime in these extended 5 years

Thakkar

In Reply to Deepak R Khemani 7 years ago

Sir,

In the current high interest rate scenario, do you think it is wise to extend my PPF account for another 5 years ? or should I close the account and invest the amount in some bank fixed deposits which can give more than 8% even after deduction of 10% tax (as I fall in 10% tax bracket) ? If you suggest to withdraw, please try to suggest where ( in bank FD or any other better avenue) can I invest the amount received from my PPF account. Thanks

Deepak R Khemani

In Reply to Thakkar 7 years ago

Thakkarji, That depends on your age, If you have no other source of income then it makes sense to withdraw the full tax free amount and keep it on interest for a long period and as you are in the 10% slab this makes a lot of sense, you can open a new PPf account and continue to deposit up to 70,000/= per year and enjoy tax free 8% interest and tax benefits under 80C.

THAKKAR

7 years ago

Your article on PPF was very informative. Thanks for the same. Regarding PPF, can you please provide the following information :

1) My PPF account has matured on 31/03/2010, but I have not closed it till now. If I close it, say on 01/03/2011, at what rate will I get interest for the period from 31/03/2010 to 01/03/2011 ? 8% or 3.5% ?

2) After maturity, if I want to choose option "Continue the PPF account without making any further contribution", do I have to submit any form or application ?

3) Do you have any updated information about the provisions of new direct tax code applicable to PPF ? Is the provision of EET going to be implemented from 01/04/2011 for PPF Accounts ?

Please reply at the earliest.

Thanks in advance.

CBT

REPLY

A Sundaram

In Reply to THAKKAR 7 years ago

1)8%
2)No
3)While it would be prudent to await the actual implementation of DTC prior to taking any action,certainly no amendments are proposed from 1.4.2011.

krish

7 years ago

MONEYLIFE! CAN U PL CLARIFY THE SAME ISSUE wrt INDIVIDUAL PPF accounts? WHAT ARE THE NO. OF YEARS ETC. ?
IF PPF IS ACCEPTED BY ANY BANK, GOVT. OF INDIA, RBI & CO. ETC. ARE BOUND TO GIVE INTEREST AT THE PREVAILING NORMS. THEY CAN NOT REFUSE. IF THE STATE ITSELF DOES FRAUD WITH THE PUBLIC, WHAT WOULD THE PUBLIC DO? NO WONDER ALL 'BADDIES'(IN HINDI) WILL CONTINUE IN INDIA AS THE PUBLIC DOESNT TRUST GOVT. AND VICE VERSA!

Jatin Gandhi

7 years ago

In fact in one of my clients case, bank has dedcuted interest credited in his HUF account from the date of renewal of account. So the money remained with the bank without any interest.Pl let us know the way out, if there is any.

REPLY

Deepak R khemani

In Reply to Jatin Gandhi 7 years ago

If the HUF account was renewed(Extended for 5 years) after the notification then nothing can be done take your money and close the account and invest it somewhere else. However if the 5 year extension was done before the notification came then the account will be operative till the end of those 5 years and full interest is payable. I hope this helps,there is no other way out though.

SUNIL HEMNANI

7 years ago

It does appear to be a very big uphill task for customers who are willing to get involved in such a case.I totally agree the smartest thing to do would be firstly withdraw the amount from the account. However i would have a question that if you do actually win would it be with a compensation and how would that actually benefit a customer.This definately a battle for those with a big heart.For the greater good of the public and for the principle of the issue what is banks responsibility as a issuer of service.

REPLY

Deepak Khemani

In Reply to SUNIL HEMNANI 7 years ago

If the matter goes to the supreme court the customer will never win. As it is said it is the duty of the subscriber to know the rules.
I can tell you that we as agents for the PPF scheme advised our clients as soon as we came to know of the rules most of our clients withdrew their money. Those smart ones who thought they knew more than us and didn't want advice continued and now are the sufferers having lost all the interest for all these years. The rules are very clear HUF's cannot open accounts after that date and also extensions are not permissible, the same being the case with accounts in a minor's name.

Sundaram

In Reply to Deepak Khemani 7 years ago

I was under the impression that Minor's PPF A/cs can be opened with Father as the guardian,the only restriction being that the annual contributions to the Guardian's self A/c plus the Minor's A/c should not exceed Rs.70,000/-.Since you are an agent for PPF,request your guidance.Is my understanding correct?

shrigopal jhunjhunwala

In Reply to Sundaram 7 years ago

yes you are correct, You are allowed to open the account in the name of minor with the cap on total investment of 70000 during a financial year

Deepak Khemani

In Reply to Sundaram 7 years ago

The total contribution in a year under self and minors names cannot exceed 70,000 in a financial year. Here the condition being that the minors accounts were opened prior to the 2005 notification.

ramchandran

7 years ago

Individuals cannot have more thatn one PPFaccount . There is a norm among people that they open multiple PPF accounts (say in a minor's name) . I do not see the point of not allowing an other account to be initiated

MLM company MAXFOREX alters name and website without informing its ‘investors’

MLM company MAXFOREX has changed its name and website to ‘Dream Worldwide’, leaving many of its 'investors' high and dry

In May, Moneylife had reported on how a multi-level marketing (MLM) company was offering 'trading' in foreign exchange through a high-risk investment module.
(See: http://www.moneylife.in/article/8/5289.html).

Maximus Trades Inc (MAXFOREX), a Mauritius-based company, has now closed down its earlier website and opened a business under a new name, 'Dream Worldwide Inc'. The 'investors' who have been duped are now planning to join hands to nail the company.

All the details that MAXFOREX carried on its earlier site (maxforexonline.biz) have been replicated on the new site (dreamworldwide.biz). However, in its new avatar, the company is claiming that it trades in real estate and diamonds - besides forex. All the information that was there on the erstwhile MAXFOREX site - founders, offices and the business model - are the same. Just the moniker has changed.

What could have forced the company to change its name and website all of a sudden? There has been an upsurge in complaints about MAXFOREX all over the Internet, as well as the reports that Moneylife has carried. Even 419scam.org, the site that tracks spam and scams on the Internet, has labelled MAXFOREX as a Ponzi scheme and provided the MLM company's bank account details. According to the website, MAXFOREX had an account (28037304495) with Barclays Bank at Mauritius under the name of Maximus Trade Incorporation.

For both maxforexonline.biz and dreamworldwide.biz, the domain registrar is Ranger Registration (Madeira) LLC. Even the status of both the sites on Who.is is the same - "clientDeleteProhibited, clientRenewProhibited, clientTransferProhibited, clientUpdateProhibited" is what the site throws up.

Another company, Royal Forex Trading Ltd, which claims to offer trading in forex and commodities, has now surfaced. Royal Forex plans to focus only on the US and India. It claims to offer 1% return per day on an 'investment' of $20 to $99 for 200 working days. The higher your 'investment', the more will be your returns (3.5% per day for a plan of $2,000 to $10,000 for 60 working days). In addition, it also offers 'rewards' (mobile phones, cars) on business worth $5,000 and above. However, it also fails to specify or clarify how it manages to offer such returns.

User

COMMENTS

GOVINDAN

6 years ago

Speak Asia, Nano Excel, Tycoon International, Visarev & Unipay2u – biggest scam is on its way

GOVINDAN

6 years ago

'NANO EXCEL' MLM WILL SOON FOLLOW MAX FOREX MLM

MATHU

6 years ago

FOR,DETAILS

manoj sharma

7 years ago

i'm looking which s best investment ?

shakil

7 years ago

maxforexonline.im.invest.1LACK..SITE.IS.NOT.OPEN.KAB.OPEN.HOGI

sandip kumar pradhan

7 years ago

please send latest position of the maxforexonline.biz

Hira Nand Pandey

7 years ago

Maxforex should transfer their old accounts on its new website. This will be in the favour of the company to work more in future. Now maxforex has earned more money from this business. This is not good for its future planing. Is there any way to get the money back from maxforex ?. Maxforex should repply their all customers on their website address.

messanger

7 years ago

unitedfund.biz its working new maxforexonline.biz site for india

REPLY

anshveer

In Reply to messanger 7 years ago

when this site unitedfund.biz will be in operation. please reply about this.

Ashwani Kumar

In Reply to messanger 7 years ago

Please reply me how many days to work on http://www.unitedfund.biz

Dinesh

In Reply to messanger 7 years ago

It doesn't open

Pls clearify,,

pramod gaur

7 years ago

could u pls tell me about speakasiaonline.com current status

REPLY

DEEPAK

In Reply to pramod gaur 7 years ago

speakasia is a largest survey compeny.it is honest copeny they giveyou money only your work'what's your mobile no?/////////////////////

Dinesh Singh

7 years ago

Pls tell from when the MAXFOREX will start working....

REPLY

santosh

In Reply to Dinesh Singh 7 years ago

All of you peoples invested with this company Please be patient and wait till the end of your life to start MAXFOREX working again....

PRAMOD GAUR

7 years ago

i can not understand what is happened with side

sukhjeet singh

7 years ago

max chala ge
sandhu 32 m.l

REPLY

saurabh

In Reply to sukhjeet singh 7 years ago

kya chalega max kab

monika

7 years ago

plz tell me wht happend wth maxforex and how much tme towork start

REPLY

Ashwani Kumar

In Reply to monika 7 years ago

Hello Monika, someone said, http://www.unitedfund.biz is new site of maxforexonline.biz. Have u any news plz. tell me. Thanx & Regards

ankit

7 years ago

maxforexonline.biz website is not open,why?

Ashwani Kumar

7 years ago

I don't know what happened in maxforexonline.biz. But site name is change now new name is dreamworldwide.biz. Before 2-3 days, I open new site but now new site is not opened. If u have any information plz. write me. Thanx

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