In your interest.
Online Personal Finance Magazine
No beating about the bush.
A 70-year-old non-resident Indian woman was lured into buying an insurance plan by paying a single premium of Rs10 lakh when she approached a bank to open an NRE account
Mis-selling by institutions like insurance companies is not new. However, with more and more financial institutions entering the insurance market, customers of a particular institution are being lured and sometimes even forced to buy co-branded products. One such incident highlights the need for stricter practices by insurance companies.
About a year ago, a 70-year-old non-resident Indian (NRI) woman went to one of the largest private sector banks in the country to open a non-resident external (NRE) account. While opening the account, an executive from the bank lured the lady into buying a co-branded insurance product under the pretext of ‘mandatory’ rules. He also told her that she will have to pay the amount of Rs10 lakh only once. With no option left for opening the account, the lady obliged and left for her overseas home.
“When that lady returned after 12 months, she was asked to pay one more premium for the insurance plan. Since the bank would not return the money which she had paid for the first premium, she was again forced to pay the second instalment for the insurance policy that was forced upon her,” revealed an independent financial advisor (IFA).
It was later found that the executive who had sold the lady the insurance policy was no longer working with the bank.
In another case, another executive from the same bank has allegedly duped a 60-year-old into paying a premium for an insurance plan for one year and later told him to forget about it.
These are only two examples of cheating by executives from financial institutions, who more than often try to sell a co-branded product to innocent customers.
To tackle such increasing fraudulent cases, the Reserve Bank of India (RBI) introduced a banking ombudsman scheme under Section 35 (A) of the Banking Regulation Act, 1949. The Act is in effect from 1995. A customer can register a complaint with an ombudsman if no reply is received from the bank within one month, or if the bank rejects the complaint, or if the customer is not satisfied with the reply given by the bank. If a complaint is not settled within one month, the banking ombudsman may pass an award up to Rs10 lakh or to the extent of the losses suffered by the customer up to Rs10 lakh, whichever amount is lower. Between the years 2002-06, the banking ombudsman has settled around 36,000 complaints.
The Internet payment gateway says that its services to and from India will remain suspended for a few months due to revised licensing rules
Popular electronic payment gateway PayPal Inc has said that personal payments to and from India will be suspended for at least a few months until it fully resolves the questions from Indian regulators.
In a blog, Anuj Nayar, director for global communications at PayPal, said that it temporarily suspended local bank transfers and personal payments to and from India to respond to enquiries from Indian regulators, specifically questions on whether personal payments constitute remittances into the country.
"We’re working with the regulators and our bank-processing partners in India to get this resolved as quickly as we can. We realise that this is causing considerable inconvenience to our customers and I want to reassure you that this is a top priority for the leadership at PayPal," Mr Nayar said.
Officials from the Reserve Bank of India (RBI), who previously told Moneylife that the central bank had no idea why this was happening and PayPal doesn't come under RBI's purview, were not immediately available for comments after PayPal admitted that there was some issue with Indian regulators.
Talking about the availability of local bank withdrawals in India, Mr Nayar said that customers should be able to transfer their funds to a local bank within the next few days. "In the meantime, we’re going to restore the money into the PayPal accounts of any customers in India who have initiated a recent withdrawal, so they know that the money is safe in their accounts. Customers will also be reimbursed for any withdrawal fee charges," he added.
In case of any PayPal reversal that has left many customers in India with negative balance, Mr Nayar has advised them to contact the senders and have them resend the payment for purchase of goods or services by clicking on the 'Send Money' tab and selecting 'Purchase'. However, in case of a personal payment, he said, "The sender will need to find another payment method until we restore the service.”
"If you can’t recover the funds from the sender, you can bring your PayPal balance current by logging into the PayPal account and clicking the 'Resolve Negative Balance' link on the ‘Account Overview’ page," Mr Nayar said.
Bharti Airtel and RCom want to boost their revenues through mobile application stores, a strategy being adopted by Apple, Google, Motorola, Vodafone, BlackBerry, Sony Ericsson and Samsung
Telecom majors Bharti Airtel Ltd and Reliance Communications Ltd (RCom) have announced their plans to launch mobile applications stores, joining global companies like Apple, Google, Motorola and BlackBerry, reports PTI.
While Bharti Airtel launched Airtel App Central, RCom said it will introduce the first version of its mobile applications store under the Reliance Applications Store label in the country by the end of the month.
A mobile applications store is designed to enable developers to make available software and services like music, games, news and commercial applications to customers.
An expanded version of the Reliance Applications Store across CDMA and GSM handsets would be launched towards the later part of this quarter.
Airtel will offer over 1,250 free and paid applications across 25 categories like business, games, books and social networking, Bharti Airtel said in a statement today, adding that the cost would be automatically added to the customer's mobile bill or deducted from the available talk-time.
Airtel App Central will offer local and regional applications for customers across the country, starting at Rs5, it added. "With the Airtel App Central, India's first mobile applications store, we are offering a one-stop shop open 24x7 to meet all our customers’ personal device needs. We are empowering our mobile customers to transform their phones into smart devices with the click of a single button," Bharti Airtel president for mobile services Atul Bindal said while announcing the launch of the services.
"Applications Store has benchmarked the overall VAS experience of customers globally, and the launch of Reliance Applications Store will provide consumers a broad selection of relevant, fun and exciting applications to choose from in the easiest possible way," RCom president Mahesh Prasad said in a separate statement, announcing the launch.
RCom, through its Reliance Developer Program (RDP), has a community of over 10,000 individual and corporate registered developers.
Mobile operators and handset makers like Apple, Google, Motorola, Vodafone, BlackBerry, Sony Ericsson and Samsung have already adopted the mobile applications model to boost their revenues.