Your Friendly Bankster
On 30 January 2016, Karthik Srinivasan, a communications professional, got an e-mailer from HDFC Bank offering a ‘Free’ account-handling service. The fine print at the bottom mentioned that it was Free only for a year and would be charged @Rs110 per quarter. This acceptance was auto-ticked. In these days of endless spam e-mailers, most customers do not notice the charge. Mr Srinivasan put...
Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital Access

Subscribe

Moneylife Magazine Subscriber or MAS member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
  • SEBI allows use of e-wallets for MF investments, options trading in commodity derivatives market
    Market regulator SEBI on Wednesday allowed options trading in commodity derivatives market, while allowing instant access facility (IAF) through online mode and use of e-wallets for investment in mutual funds (MFs). Redemption of investments made through e-wallet, however, can be done only through a bank account of the unit holder. 
     
    The market regulator allowed investment of up to Rs50,000 per year in MF schemes through e-wallets. "However, redemptions of such investments can be made only to a bank account of the unit holder. E-wallet issuers must not offer any incentive such as cash back directly or indirectly for investing in mutual fund scheme through them. E-wallet's balance loaded through cash or debit card or net banking, can only be used for subscription to MF schemes and balance loaded through credit card, cash back, or promotional scheme should not be allowed for subscription to MF schemes. Further, this limit of Rs50,000 would be an umbrella limit for investment by an investor through e-wallet and/or cash, per mutual fund per financial year," SEBI said.
     
    To channelize households' savings into capital market and to promote digitalisation in mutual funds, SEBI Board also decided to allow IAF in MF for up to Rs50,000 or 90% of the folio value to resident individual investors in liquid schemes by applying lower of previous day net asset value (NAV) or prospective NAV. 
     
    "For providing such facility asset management companies (AMCs) would not be allowed to borrow," SEBI said, adding, "Liquidity is to be provided out of the available funds from the scheme and AMCs to put in place a mechanism to meet the liquidity demands. This facility can also be used for investment in mutual funds through tie-ups with payments banks provided necessary approvals are taken from Reserve Bank of India (RBI). Presently, any scheme providing this facility would reduce the limit to Rs50,000, immediately and other than liquid schemes providing this facility would completely stop this facility within one month from the date of circular."
     
    In a statement after its board meeting, SEBI said, it had permitted launch of options in commodity derivatives market in September 2016. "In this regard, to enable the Commodity Derivatives Exchanges to organize trading of 'options', the Board, after undertaking due public consultation process, has approved a proposal to amend the relevant provisions of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012. Detailed guidelines for trading in 'option' on commodity derivatives exchanges will be issued by SEBI," the statement says.
     
    Further to the merger of Forward Markets Commission (FMC) with SEBI, the market regulator also decided to integrate broking activities in equity and commodity derivatives market. SEBI says, "The integration of the stock brokers in equity and commodity derivative markets while having many synergies in terms of trading and settlement mechanism, risk management, redressal of investor grievances, etc. would benefit the investors, brokers, Stock Exchanges and SEBI as the same would help to enhance the economic efficiency in terms of meeting the operational as well as compliance obligations at a member level resulting in ease of doing business. It will also provide for efficient use of capital for the investors, widen market penetration leading to greater financial inclusion for participants across all market segments and facilitate effective regulatory oversight by stock exchanges and SEBI."
     
    The SEBI Board, which met on Wednesday also allowed to include non-banking finance companies (NBFCs) registered with RBI and having a net worth of over Rs500 crore in the qualified institutional buyers (QIBs) category. These entities can also participate in initial public offerings (IPOs) with specially earmarked allocations, SEBI added.
     
    Recently, many instances have been there, where, it has been observed that the Banking sector is exposed to the risk of significantly high non-performing assets (NPA) and banks have been advised by the RBI to reduce the NPA and to initiate stringent actions to recover the dues from the borrowers. 
     
    As a result, SEBI says it expects many banks to go aggressively for recovering their dues and may opt for corporate debt restructuring (CDR) or strategic debt restructuring (SDR) or bilateral restructuring. In order to carry out actions for recovery from a borrower, which may be a listed company, banks or financial institutions have sold equity shares of the issuer during the preceding six months of the relevant date. Such banks or financial institutions may also be one of the allottees of the specified securities of the company pursuant to CDR approved scheme under preferential issue route.
     
    At presently, SEBI (Issue of Capital and Disclosure Requirements -ICDR) Regulations prohibit the issuer from making preferential issue to any person who has sold any equity shares of the issuer during the six months preceding the relevant date. It also provides that the entire pre-preferential allotment shareholding of the allottees, if any, shall be locked-in from the relevant date up to a period of six months from the date of trading approval.
     
    SEBI says, its Board considered and approved the proposal for extending such relaxation to scheduled banks and public financial institutions, as is already being extended to mutual funds and insurance companies.
     
    To further strengthen the monitoring of issue proceeds raised in IPOs, follow-on public offerings (FPOs) and rights issues, SEBI has approved some key proposals, like...
     
    • Mandatory appointment of Monitoring Agency where the issue size (excluding offer for sale component) is more than Rs. 100 crore. 
    • Frequency of submission of Monitoring Agency Report has been enhanced from half-yearly to quarterly.
    • Introduction of maximum timeline of 45 days for submission of Monitoring Agency Report from the end of the quarter in conjunction with the submission of the quarterly results.
    • Mandating the disclosure of the Monitoring Agency Report on Company's website in addition to submitting it to Stock Exchange(s) for wider dissemination.
    • Introduction of new requirement, i.e., comments of Board of Directors and Management on the findings of Monitoring Agency.
  • Like this story? Get our top stories by email.

    User

    COMMENTS

    sarthak sain

    2 years ago

    I am a victim person. I invest money at pan club limited.. But i get no money. Please help me anyone.

    Sangeeta Patil

    2 years ago

    please clear the matter and refund the money to all investor.

    i am also invest my money.

    Celebrity Ads: Knee-Jerk Regulations
    Three cheers to Abhay Deol, the thinking actor, whose celebrity status has drawn enormous attention to our obsession with fairness. The trigger for his Facebook post, which has gone viral, was the crass comment of former Bharatiya Janata Party (BJP) parliamentarian Tarun Vijay, on a television programme. Mr Vijay has apologised for his utterly distasteful and divisive comment (“If we were racist, why would we have all the entire south… Tamil, Kerala, Karnataka and Andhra… why do we live with them? We have black people around us”) but the anger, especially among south Indians, refuses to cool down. The actor, refreshingly enough, called out several Bollywood superstars by posting photos of their fairness cream advertisements with his caustic comments. An excellent example of a celebrity breaking ranks with his fraternity for a bigger cause!
    In February 2014, the Advertising Standards Council of India (ASCI), the self-regulatory body of the advertising industry, which monitors advertisements, issued a code to cover fairness creams. When I joined ASCI’s consumer complaints committee in 2012 (I quit in 2016), I remember feeling good about the fact that we routinely upheld complaints against advertisements for fairness creams, because they invariably fell foul of the ASCI code. It soon became evident that manufacturers and advertising agencies, who created their campaign, had no intention of reforming. Their advertisements were designed for a short life span of a few weeks. Every new ad campaign was carpet-bombed at viewers and pulled off when ASCI upheld complaints against it. The next one made similar unsubstantiated claims, complacent with the knowledge that ASCI has no policy of escalating action against ‘habitual offenders’. Around then, another well-known actress, Nandita Das, lent her voice to the ‘Dark is Beautiful’ campaign that had exploded into a blaze of negative publicity for fairness sellers. 
     
    ASCI then got its act together and framed a set of guidelines to eliminate the more egregiously offensive advertisements that linked confidence, happiness and success to the elimination of skin pigment. Advertisements that blatantly reinforced negative stereotypes (like showing persons with darker skin colour as unsuccessful and lacking in confidence until the fairness cream worked miracles) had to be dropped. The newer set of advertisements posted by Abhay Deol are still insensitive, with film stars holding up shade cards to show the efficacy of creams and lotions in ‘brightening’ skin colour. Hopefully, Tarun Vijay’s revolting views, and Abhay Deol’s attempt to shame the stars who perpetuated colour-prejudice by endorsing fairness products, will have a bigger impact on advertisers than ASCI’s code and unwillingness to tackle habitual offenders. Remember, stars like Amitabh Bachchan and Aamir Khan have stop endorsing colas mainly because pressure of public opinion would have hurt their image.
     
    Unfortunately, regulatory action in India is episodic, as are the attempts to hold celebrities accountable for the products they endorse. The last time that policy-makers wanted to haul celebrity endorsers over the coals was when the Maggi noodles controversy erupted. Various courts and the  Food & Drug Administration (FDA) officials issued notices to hapless film stars, who were probably flummoxed at how everybody’s favourite any-time snack had suddenly become India’s Number One food poison. 
     
    A parliamentary panel recommended that celebrities (and not manufacturers or advertising agencies) must be held accountable for appearing in misleading advertisements and should even be asked to pay a fine (going up to Rs50 lakh), or a jail term of two years, or both. The government quickly accepted the recommendations. Nobody seems worried that making a celebrity primarily responsible for a product and its advertising would only unleash a string of complaints by publicity seekers. 
     
    The Maggi controversy died a quiet death when FDA offices around the country began to report contrary findings about the MSG (monosodium glutamate) in the noodles. By then, Patanjali launched its wheat noodles, and a few brands wormed into the space vacated by Maggi. An amendment to the Consumer Protection Act, to cover celebrity endorsements, was introduced in the Lok Sabha; but there seems to be no urgency anymore to have it passed. After all, consumers were clearly unimpressed by the government’s zeal to protect them from their favourite noodles.
     
    The test of holding a celebrity accountable for a product is whether she is aware of the misleading nature of the advertisement or has made an effort to find out. ASCI, which recently issued guidelines on celebrity endorsement (probably to avert drastic action by the government), has touched on this issue, albeit in a sketchy manner. ASCI says that a celebrity must do due diligence before endorsing a product. Seeking advice, or guidance, from ASCI, on whether a product violates its code will be considered adequate diligence. It is not clear if ASCI will charge for this advice, as it charges for ‘fast-tracking’ complaints by companies against one another (as opposed to those from the public). Otherwise, the celebrities must ensure that they do not endorse products that fall foul of the Drug and Magic Remedies (Objectionable Advertisements) Act, Drug & Cosmetics Act, or push products that require a statutory warning (tobacco), etc. 
     
    ASCI guidelines have left the financial sector, which uses celebrity advertisements in a big way, completely untouched. Yet, its press release believes that advertisers following its guidelines “will protect the interests of the consumers, especially for products or services which can cause serious financial loss or physical harm.” The entire debate on celebrity endorsements ignores misleading financial advertisements and the fact that India’s film and sports stars promote shady, Ponzi-like multi-level marketing companies, which hawk holiday packages, magic remedies (in the name of Ayurveda, crystals, magnets, etc) and other products. While MS Dhoni was forced to resign as brand ambassador for a realty developer called Amrapali, Australian cricketer Brett Lee happily endorsed the shady business of India’s biggest Ponzi scam PACL Limited (also known as Pearls) and nobody protested. 
     
    Insurance companies are among the worst, in this respect. They make promises far beyond what an insurer delivers and their soppy advertisements create a fertile ground for bank officials to sell toxic insurance products (high premium products with low returns), to unsuspecting people, leading to heavy financial losses. Moneylife Foundation has been campaigning for almost seven years to stop, or restrict, celebrity endorsement of financial products. But neither the insurance regulator nor the Reserve Bank of India (RBI) has bothered to respond. In 2014, the ministry of corporate affairs (MCA) began airing a radio advertisement urging consumers not to believe in celebrity endorsements. The advertisement, which is a conversation between friends, explains how a company that is spending a lot of investors’ money on celebrity endorsements cannot give higher returns and one should be careful before investing in such company. This vindicates Moneylife’s stand. But should the ministry be educating the financial regulators first, instead of the masses?
     
    On the contrary, the Securities and Exchange Board of India (SEBI) has now succumbed to pressure from the powerful mutual fund industry. The outgoing chairman, UK Sinha, in one of his last actions, allowed celebrity endorsements at the industry level. So funds earmarked for investor education will probably go into paying fat fees to Bollywood and sports stars.
     
    All of this only goes to show that government concern about misleading advertisements is episodic and non-serious. Every controversy leads to a new ad hoc policy. There is no attempt to ensure that the rules are evenly applicable even within a specific sector and absolutely no thought is given to implementation or enforcement. India has no shortage of statutes that cover misleading advertisements. In addition to those mentioned above, the issue is also covered by the Indecent Representation of Women (Prohibition) Act, and The Young Persons (Harmful Products) Act. What consumers fail to realise is that the system is dysfunctional by design—those who need celebrities to market their products have very deep pockets and complete control over policy-makers. 
  • Like this story? Get our top stories by email.

    User

    COMMENTS

    Ananta Wairagade

    2 years ago

    I am struggling for job this time my economically condition is very down. So sir please refund my PAN claim as early as possible..... And please add me in your whatsapp group for updating .9096240769 is my whatsapp no

    M. T. Chiddarwar

    3 years ago

    ASCI are not serious about customer complaints and give technicality reasons to dismiss objections. One such technicality I have been given is "if an ad is running for more than 6 months then you can't object to it". It means if some bad thing is happening for more than 6 months then it is good and you can't object. THIS IS CHEATING ON PART OF ASCI.

    goprocessing

    3 years ago

    niche blog
    Go Processing Complaints

    Simple Indian

    3 years ago

    The last sentence is the crux of the article. It's an open secret that companies which hire celebrities to promote their products don't just pay fat sums to these celebrities, but are also politically well-connected, hence no action against them. The same goes for celebrities too, such as Amitabh Bachchan or Amir Khan, who are known to have a few political connections too. Besides, it reflects poorly on such celebrities, who quit endorsing certain products/services mainly because of public opinion hurting their image. I wish celebrities did due diligence on the products they endorse, and also have some moral values, which should guide their choices in such cases. Laws can do only so much. It's the deteriorating standards of morality in society which is the root cause of people lending their name to products/services they themselves do not use, purely for commercial gains, without any responsibility of how these products would impact consumers. How much more selfish can one get ?

    SuchindranathAiyerS

    3 years ago

    Ad agencies adopt Islamic strategy like Thaharoosh Jamiya and Mob violence. Before you catch them, they melt away. India's laws and administration are designed for crime to prosper. There is never any follow through unless motivated by personal revenge or greed.

    Gurudutt Mundkur

    3 years ago

    Thumbs-up to Abhay Deol; thumbs-down to Tarun Vijay.
    I have been neutral in my opinion about so far, but not any more.He should become an active activist.
    I have never held Tarun Vijay in high esteem. He now goes down even further!

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 3 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)
    FREE: Your Complete Family Record Book
    Keep all the Personal and Financial Details of You & Your Family. In One Place So That`s Its Easy for Anyone to Find Anytime
    We promise not to share your email id with anyone