Citizens' Issues
Website uses Dhirubhai Ambani’s photo to promote MLM

RBS Multicare Pvt Ltd runs a multi-level marketing scheme through its website, under the pretext of an associate or group company of the Reliance group. It even uses Dhirubhai Ambani’s photograph on its site

If you don't have a brand name, misuse someone else's. This is an easy strategy to con gullible people by building trust with misused brand names. RBS Multicare Pvt Ltd, a multi-level marketing (MLM) company is using Reliance group founder Dhirubhai Ambani's photo and his quote to promote its business, that too when the company has no relation with the Reliance group. The MLM company claims that RBS in its name stands for Reliance Business Solutions.

Even its website raises doubts about its genuineness for an erudite person, and is nothing but a trap for the susceptible. The website is selling Reliance Life insurance products bundled with holiday packages and gives details on how someone can join as a distributor and benefit from its MLM. However, the actual insurance premium for the said scheme is much less than what RBS is demanding in the bundled deal.

Moneylife called RBS' agent from Mumbai. The scheme RBS is trying hard to sell is Reliance Jeevan Suraksha plus Holiday package for Rs7,200. With this onetime payment, RBS assures you life insurance worth Rs3 lakh in addition to a holiday package for your family (2 adults + 2 children) worth Rs69,000 spread over six years. However, the agent claimed that the company can pay the holiday package amount divided in parts like Rs1,000 after the first year, Rs3,000 after the second year, Rs15,000 after three years and Rs50,000 after four years.

The agent then went on explaining the MLM concept like binary, pool and bonus income. He also emphasised on how he started with only Rs500 per month and is now earning Rs5 lakh per month. His ending note was that the special offer is only valid till 15 October 2010 and then the company will offer holiday packages worth only Rs19,000 instead of Rs69,000. He was also eager to close the 'sale' at the earliest and willing to send his associate to our office for collecting the payments.

Interestingly, despite trying to establish relations with the Reliance group, the company wanted the payment to be made in its own name, instead of the group. When asked to provide contact details of any official from the Reliance group, the agent quickly replied that he was in a meeting and would get back to us.

A Moneylife reader, who was approached by RBS for the MLM scheme had raised the issue with the Insurance Regulatory and Development Authority (IRDA), but could not elicit any response from the regulator.

Speaking about RBS and its business practice, he said, "One of the target customer segments for RBS is housewives. When I raised my doubts with the RBS agent, the company told me, if you do not have faith then do not buy the policy. However, many people provoked by RBS agents and their distributors are falling into the trap with their small savings. As per my knowledge insurance premium for this particular policy costs only Rs333 and the rest of the money goes into the pockets of RBS and its agents. It seems a pure cash MLM scheme, which is in violation of RBI norms. Also, they are writing, claiming something on their website and providing something else to a layman."

According to an official from Reliance Capital Ltd, the usage of the brand name, Reliance Life Insurance and other material is a serious matter. "RBS does not have any authorisation to display our products on their site. We are taking the necessary action against the company," he added.
Interestingly, RBS is not the only site that is using the name of 'Reliance' to promote its business. There is another site, with a US address that offers services related to insurance, mortgages, real estate and financials.




6 years ago

please visit this link and more detail call me
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Moneylife Digital Team

6 years ago

Moneylife digital team has email reply from Reliance ADA corporate communication head " is not a reliance life site and has no authorization to put up our products on this site. We are taking the necessary action against the company." We have also made complaint with IRDA about selling insurance products with MLM

vijay more

6 years ago

I suggest RBS Multicare pvt. ltd. company working in MLM industry & RBS is RCP of Reliance life insurance. 7200/- is not reliance jivan suraksha plan it is only jivan surakhsha business growth plan of RBS So, you contact to RBS reg. of at pune.


6 years ago

I suggest money life digital team first get the proper information about the company and companies product. and then write in article. RBS MULTICARE PVT LTD is working in MLM industry. Relience gives the authority to sell the insurance plan. RBS is referal channel partner (RCP) of relience life insurance.RBS gives not only Relience General Insurence (331rs) plan and Holidy package coupens but also give 4 business code for working in 7200rs. (Jiven suraksha plan). it is RBS company growth plan. it gives tremendous opportunity for earnning. No other MLM companies in in india give 4 business code in 7200rs. If you want proper info about RBS then visit RBS company head office which is in th pune.

Copper prices jump to 30-month high on weaker dollar

Lower production and robust demand is expected to take red metal prices up further over the next couple of years

Copper prices on Wednesday crossed a two-and-a half-year high on the global market on a weakening dollar and increased demand from China.

According to an analyst at a commodity exchange, copper is climbing up because Chinese production and consumption is booming. "Warehouse stocks at the London Metal Exchange (LME) are going down, hence the chances of copper prices going up (further) is high," he said.

Copper prices were quoted at $3.78 per pound at the LME, a big increase of 34.8% from a year ago. Industry sources believe that "copper is on an upward trend and may reach levels of $10,000 a tonne in the next couple of years before dropping back."  The red metal is trading at around $8,265 per tonne.

Sharekhan Ltd, the stock trading company of the SSKI Group, said in a research note, "Copper has given a fresh breakout. It has surpassed the high of $3.68, kicking off a new leg on the upside. Long-term picture shows that copper is rising in a channelised manner. The previous rally that originated near the lower end of $1.25 completed forming an expanding ending diagonal. The entire rally has been retraced up to the 38.2% mark, from where the third leg on the upside has started."

China is the third largest producer of copper and the largest consumer of the red metal which is mainly used in construction and automobiles. Weakness in global copper mining and a rising demand for the commodity in China has caused the demand-supply gap to widen, creating a constructive platform for copper prices.

The depreciation of the US dollar has also made it easier to purchase base metals like copper, contributing to the hike in prices. The dollar is trading at Rs44.66, significantly weaker from the Rs47.53 at this time last year. Further quantitative easing by the US Fed is expected to increase the inflow of the dollar on a global level.

Last year, copper prices were depressed due to slow growth on account of the global recession. Things have changed since. With curtailed supply and robust demand, it seems the upward movement will continue, which makes it a good time to invest in the metal.


Kotak, shockingly, puts an ‘Add’ rating on SKS Microfinance; it’s not alone

As the controversy surrounding SKS Microfinance intensifies, Kotak Institutional Equities Research has written a very positive note on the stock with an ‘Add’ rating. Citi, Centrum, and CSFB are also positive on the stock. Internet forums are divided on the issue while mutual funds are tight-lipped

Kotak Institutional Equities Research has a positive view on the SKS Microfinance stock. Credit Suisse First Boston (CSFB) and Citi, too, have come out with positive notes on the stock, that too after the controversy about the sacking of SKS’s CEO Suresh Gurumani broke out last week.  Internet forums are divided on whether the sacking of the CEO will necessarily lead to a further fall in share prices and not everybody believes there are skeletons in the SKS closet. However, the forums seem to agree that the political fallout of the issue (on the high interest rates charged to farmers and people of the low-income group) could be the biggest threat to the stock.
A brief background...
SKS Microfinance, which claims to be India’s biggest microfinance institution, made its debut on the Bombay Stock Exchange (BSE) in August. Its founder and CEO, Vikram Akula, claimed that the initial public offering (IPO) was done to raise more funds so that SKS could reach out to a larger number of poor people. This logic has been questioned time and again—how could SKS juggle the dichotomy of being a listed company, that is, maximising profits for its shareholders, and yet serve the poor effectively? Several comments about its overhyped IPO also appeared in the press. But hell broke loose only in early October when SKS abruptly terminated the services of its managing director and CEO, Suresh Gurumani, without giving any specific reason. The Securities and Exchange Board of India (SEBI), reacting uncharacteristically fast, asked the board to justify its action.

SKS Branch Network: Highest concentration in AP

(Source: Citigroup Global Markets report dated 5th October citing company reports)

Moneylife has been actively writing about SKS Microfinance for a long time now. 

 The earliest article in July 2010 questioned the IPO premium and raised other issues such as the commitment of the top management, high remuneration paid to top executives, geographical concentration of business and the mismatch in its assets and liabilities. (See:
Since the controversy, Moneylife has also written several articles about this issue: 

 What brokerages say
Despite the possibility of a political backlash and chances of the controversy snowballing, brokerages have staunchly endorsed the stock.
Kotak Research wrote in a note today, “We believe SKS Microfinance is well-positioned to capture the latent demand in microfinance. A meticulously-planned and scalable business platform, proven track record of maintaining low NPLs and proactive management will likely drive 60% loan book CAGR between FY2010 and FY2013E. We initiate coverage with an Add rating and target price of Rs1,400.”
Credit Suisse First Boston brought out a post-conference call note on the stock on 5th October which said that growth momentum continues to be strong and management has guided for 80% FY11 net profit growth (targeting 77% y-o-y growth in disbursements) and that it does not see any of the potential regulatory changes as a threat to its business model/profitability. CSFB said that it is expecting 1H11 profits of Rs1.5 billion, a 165% y-o-y growth, and that “though the sudden management change is likely to remain as an overhang in the near term, we believe the strong earnings shall act as a support for the stock. With a Tier-I of 42%, SKS is well placed for strong loan growth for multiple years and with high ROAs (6.5%-7%) we maintain Outperform (target price of Rs1,575).”
Centrum, in an 11th October report, provocatively titled "Greed is Good!", says microfinance Institutions are in a sweet spot and that SKS with its 'excellent scalable' business model is right there to lap up the opportunity. Citi, too, expects the stock to rise above Rs1,400. 

SKS's split of loans by state

(Source: Citigroup Global Markets report dated 5th October citing company reports)

What internet forums say
Internet forums are divided as usual. Some members are calling Akula a crook, while others believe that nothing will come of the whole thing. The optimists point at the company’s share price which has not really fallen off the cliff since the controversy broke out. It is still above its debut price.

 They also point to the low NPA levels in the company, its high 'reach', and the fact that no financial irregularities have been found so far.

Many expect high political drama over the issue. There have been suicide deaths related to microfinance loan repayments in Andhra Pradesh and today the state government approved a special ordinance to deal with the worsening situation. It has been reported that Spandana Spoorthy, the second-largest Indian microfinance company in terms of assets, may be delaying its IPO.
The mutual fund industry is quite tight-lipped about the whole issue. Birla Mutual Fund, Kotak, and UTI have holdings in SKS.
According to the BSE, Indian promoters hold 11.6% of SKS, foreign promoters 25.5%, foreign institutional investors 17% and domestic institutions 6% as of September. Several prominent foreign and Indian funds hold more than 1% in the company. Some of the names are:

  •      Sandstone Investment Partners: 11.59%
  •      Kismat SKS II: 5.08%
  •      Small Industries Development Bank of India: 2.51%
  •      Bajaj Allianz Life Insurance Company: 2.31%
  •      Tree Line Asia Master Fund (Singapore): 2.07%
  •      Quantum: 1.70%
  •      Smallcap World Fund INC: 1.35%
  •      ICICI Prudential Life Insurance Company: 1.03%

(This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife).



k a prasanna

6 years ago

Those are all paid research reports. SKS is the biggest bubble in stock market.


6 years ago

Citi and Kotak were the BRLMs for IPO.


6 years ago

Hi All,
It is sad that everybody who does not understand what MFI means to rural poor, are commenting on the subject ..It is another Peepli Live being made .. It was well said by some one that MFI is threatened by 4 Ms.. MLAs, MAFIA, Marxists and least but not the least MEDIA ... that is what seems to be happening ..
Agree that there are cases on conduct of few rogue MFIs.. but can't paint all with the same brush.. We would be doing more harm to rural poor than good if we snap the credit line to rural market ..from MFI.. Pls remember that we have 80% of our population that still remains unbanked ..( even after 63 years of independence )
Hope I make my point !

R Balakrishnan

6 years ago

Equity Research is all nonsense, especially when it comes from the 'sell' side (brokers). They are not accountable and the firm needs business from the companies. And what if the proprietory book holds the stock? Brokers opinions are like elbows. Everyone has two of them.
Having spent some time on the sell side, I know the problems in putting a sell report on a stock.
On SKS, it takes courage to put otherwise.One way to look positively is that the co has got rid of a highly paid CEO it never needed in the first place. So, profits will go up.


Munira Dongre

In Reply to R Balakrishnan 6 years ago

Dear Balakrishnan,
I do agree with most of what you say, especially about the prop book holding stock. And I appreciate the difficulties that brokers face in putting out a sell report. I have known instances when a broker has put out a report with a 'hold' and then gone ahead and marketed it as a sell.

However, it is surprising that Kotak has actually initiated a report at this stage on SKS. It could, after all, have done nothing since it did not cover the stock.



6 years ago

SKS stands for Soft Killing...Stupid!

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