NSDL De-merges E-governance Business, Finally

That NSDL is now being split is a very positive development, but the finance ministry and the regulator must also ensure clear regulation and supervision of all non-depository businesses

On 25th June, media reports said that the National Securities Depository Limited (NSDL), India’s first depository, is de-merging its e-governance business into a separate entity called the NSDL...

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  • Air Asia’s strategy for India: No free lunch, but fly free, initially!
    Initially, Air Asia India, the JV between the Malaysian carrier and  the Tatas, plans to concentrate on the South, connecting cities and providing stops at unconventional routes to take care of customer needs 
    In the last few days, the sky is overcast with air turbulence caused by the tsunami (thanks to the candid statements) made by Tony Fernandez, promoter of Air Asia Bhd of Malaysia.  He is in the country to promote this airline and obtain the necessary clearances.
    Air Asia India is a much talked about joint venture by this successful Malaysian low-cost airline promoter with Tatas (Tata Sons holding 30%) and Teslestra Tradeplace (holding 21%) with rest of 49% stake with Air Asia Bhd in this venture.
    Ratan Tata, a qualified and experienced pilot will be chief adviser to the board, while S Ramadorai is its non-executive chairman. Mittu Chandilya has been named as its CEO and the airline will have Chennai as its headquarters. Air Asia India plans to concentrate on the South, connecting cities and providing stops at unconventional routes to take care of customer needs.
    Because it is a low-cost airline, a lot of frills and related expenses are reduced by unbundling fares, to bring about the best benefit to the traveller. Initially, Air Asia will own and operate just three aircrafts but plans to add ten planes every year as they develop new routes. Eventually, it will be doing North, where currently charges are unrealistic, such as in Mumbai and Delhi.  It does not plan to lease the aircrafts, but use Airbus A320s.
    According to Tony Fernandez, Air Asia India hopes to obtain all the required clearances and start operating before the end of this year. It proposes to invest some Rs81 crore in this domestic operation and hope to cover the southern region, and is evaluating if Chennai, Bangalore or Kochi would be its operational (hub) base. At the moment it has ruled out Hyderabad because of high costs.
    So far, during his stay, Tony Fernandez, along with Ratan Tata and Mittu Chandilya have met all the officials in the civil aviation ministry, including minister Ajit Singh.
    Air Asia India hopes to make travel pleasant and convenient and be least expensive of the airlines in operation.  In order to garner popular support, it seems Air Asia will, at least provide, one way, free tickets, but no free lunch! Baggage allowance will not exceed 15 kg for domestic travel and may charge for choice seats, excess baggage, etc. More details are expected when finalized; obviously, this free ticketing may be for a week or fortnight.
    While most orthodox travellers have always carried their home cooked meals in the past, it may now become a regular feature for most. Hopefully, Air Asia India may consider giving an extra kilo, or two, waiver for this ‘food allowance’, but enforce strict discipline on hand baggage, which is currently misused by many. Excess baggage, carried surreptitiously, causes greater fuel consumption and may impact aircraft and passenger safety.
    It must be noted that restaurants in the airports are expensive simply because of the very high rents that they have to pay to obtain the space! It is in public interest some audit is done on ruling prices of these restaurants.
    In spite of the threat given by Janata Party leader Subramaniam Swamy to approach the Supreme Court in a public interest litigation to prevent Air Asia obtaining the clearance to operate, this is a welcome move for the weary traveller who has few choices to make on air travel and pay a high price, at the moment. Another issue that Tony Fernandez has raised is the condition laid down on domestic airlines that they need to have local five years experience and have at least 20 aircrafts before they are allowed to operate to foreign destinations needs to be re-examined by the civil aviation ministry.
    In the meantime, one more welcome sign is the plan to privatize some of the airports, as they may bring about greater improvement in the area concerned.
    (AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
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    Competition Commission rejects allegations against United India Insurance, E-Meditek

    According to CCI, United India Insurance does not seem to hold a position of strength in the services of medical insurance, which can enable it to operate independently of the competitive forces along with its TPA

    The Competition Commission of India (CCI) has rejected allegations of abuse of dominance against United India Insurance Co and its third party administrator (TPA) E-Meditek.


    The CCI in an order issued on 1st July, said it was “appropriate to close this case...as no contravention of the provisions of the (Competition) Act is prima facie found to exist”.


    As per the complaint filed by an individual, United India Insurance had obtained the business of “Mediclaim Insurance for the CanCard Holders under group insurance from the year 2005-06”.


    It was alleged that since United India Insurance was the only and dominant service provider to “CanCard Group Medi insurance policy holders”, all holders who opted for these mediclaim policies were necessarily required to carry out all the transactions through the insurance company and its TPA.


    “... Opposite Party 1 (United India Insurance) does not seem to hold a position of strength in the relevant market (services of medical insurance) which can enable it to operate independently of the competitive forces prevailing in the relevant market or affect its competitors or consumers or the relevant market in its favour,” CCI said.


    The complainant had also alleged that E-Meditek failed to fulfil its obligations pertaining to renewal/termination of the policy, claim intimation and repudiation of claim, among others, under its agreement with United India Insurance.


    However, CCI noted that if E-Meditek was not fulfilling its obligations under the agreement, then the insurer could have terminated the contract or take legal remedies and that the policyholders could have complained to the IRDA.

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