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7

Money deposited in a bank account is generally considered safe. Holders of State Bank of India-issued Kisan Credit Cards (KCCs) have apparently been charged INR 990 each for provision of weather information.

Nationwide, one crore one lakh KCC-possessing farmers are seeing deductions totaling INR 990 crore, including INR 60 crore from the accounts of 6 lakh farmers in Madhya Pradesh. The facility towards which these deductions are being made (viz. weather information) is which the central government is already providing farmers free of charge, through a toll-free number.

This mess came to light when Hazarilal Sharma, a farmer living in the Nauraj Khedi village of Vidisha’s Nateran Tehsil received a call from his bank informing him of a deduction of INR 990 towards a service providing weather information. Sharma filed a complaint in writing, but the bank management did not reimburse the amount. Talking to the manager of the Nateran branch of the SBI, B.S. Baghel, revealed the complete picture.

Baghel elaborated that the SBI headquarters in Mumbai had deducted, through the various branches, the amounts from the accounts of farmers nationwide without their permission. Meanwhile, even the chief general manager of SBI’s agricultural branch, Jitendra Sharma agreed that the bank had deducted amounts in the name of providing weather information, but insisted that only after obtaining consent forms from the farmers – something farmers like Vishnu Dangi, Natthu Singh Raghuvanshi, among others, have vehemently denied. According to them, they are receiving SMSs from the bank with weather information while the banks are deducting INR 990 for the same.

Breaking down the INR 990 crore mathematics

As per the SBI’s website, there are nearly 1 crore 1 lakh KCC holders. If even 1 crore of these farmers have been charged for the weather information service, it would imply that a sum of INR 990 crore has been thus collected.

Service already available in 500 branches through RML

The SBI has contracted Mumbai’s RML Company for providing weather and crop-related information to farmers. Per RML, customers linked with 500 branches of the SBI across 16 states are receiving this service. Different price levels have been fixed for the various services available. Of these, the SMS service is priced at INR 990 per year.

Translated from original report in Hindi at Jagran

HDFC Bank: Pawn your wife's gold now -- No documents needed!

 9th October, 2016: A lot of HDFC Bank customers are having a bad experience. Some are even having nightmarish experiences... and it's all thanks to the fine art of glibly selling them financial instruments and other stuff they don't need. One friend who wrote to me after reading my recent article about how HDFC Bank routinely abuses it's customer's trust and fiduciary relationship, saying, "Krish, your gripe about HDFC Bank exceeding the limits of fiduciary relationship is absolutely correct. But why pick on HDFC alone? I get similar spam mails from ICICI, Kotak, etc. Upon complaining, I was told to read the last line of these mails and unsubscribe if I did not want to receive such mails."
My reply to his query: "I picked HDFC because I have experience of its activities at first hand. But I also wrote about SBI Mutual and ICICI Bank in that article."
And then my friend wrote: "Here's a promo mail from AXIS Bank."
What we can see is, Axis Bank, while promoting its own credit card business, simultaneously markets multiple third-party brands. Such marketing emails violate Section 8 of the Banking Regulation Act, 1949 (Amended in 2013), which says: "Prohibition of trading... No banking company shall directly or indirectly deal in the buying or selling or bartering of goods... or engage in any trade, or buy, sell or barter goods for others..." Section 6 of the Act lists what kind of businesses banks may engage in. Promoting apparels, malls, superstores etc. is not permissible.
Axis Bank's promotional email is followed by a lengthy disclaimer that threatens you and denies everything. But enough about product sales. Selling insurance products is not a legitimate banking business either, but see this email from HDFC Bank:

The bank's customer feels helpless to click "Unsubscribe" or mark such emails as spam, as they are bundled with emailed accounts statements. Saying no to spam means saying no to email statements.
HDFC Bank branches are sales points for a lot of stuff. They surround you with posters, standees, pamphlets and young relationship managers chasing monthly targets. Ask anyone for your account balance --- and you lay yourself wide open to HDFC's hardsell. Give someone your customer id and you give him access to find out how much money you have in fixed deposits, and when they mature.
HDFC Bank markets Gold Loans as an impulse purchase. "45 minutes, no paperwork" is HDFC Bank's promise. So if you are a market speculator with an itch to invest in some hot scrip, you need a few lakhs to fund this impulse purchase, and you need it now. HDFC Bank says, "Psst, psst. Raid your wife's jewelry cupboard and pawn her gold. WE WON'T ASK YOU ANY QUESTIONS! DO IT NOW.
Or, you are a housewife who has the urge to splurge without consulting her family. To her, HDFC Bank is saying, "Just go ahead, honey, pledge your gold. DON'T THINK, JUST DO IT NOW! Live for the moment!"
Having pawned off their gold, HDFC Bank's customers find that the bank personnel can armtwist or blackmail. Read this complaint from an aggrieved customer in Mumbai: "I the undersigned holding Gold Loan A/c. No. 21114 with your esteemed HDFC Bank, Yogi Nagar Branch for Rs. 130,200/-. Last week I visited your Yogi Nagar Branch for renewal of my Gold Loan. I meet Lady Officer (name unknown) and informed her to renew the same and asked about details for the same. She refused to provide any details and filled one cash deposit slip with account number details and amount and told me to pay Rs.11680/- to the Teller. I paid the same at the Teller and given the Counterslip to that lady. She cross/cutted the account number mentioned on it and given it to me back. The said renewal charges are not accounted to my loan account but deposited in her personal account... She has also not given the Renewal documents for Gold Loan and refused to provide the same."
Since documentation is minimized, so are safeguards against abuse. Relationship managers and other para-banking employees can play mischief. There are sad stories unfolding all over the country in the name of gold loans.
ISSUED IN PUBLIC INTEREST BY
Krishnaraj Rao
9821588114
krish.kkphoto@gmail.com
POSTED IN PUBLIC INTEREST BY
Sulaiman Bhimani
9323642081
sulaimanbhimani11@gmail.com
Note: Next article is about the nightmare of an HDFC Bank customer from whose accout thousands of rupees are being deducted every month against his will through Electronic Clearing System (ECS), thanks to HDFC Bank's ability to toss documentation to the winds. Dekhiye iss dharavahik ki "ugly" kadee 🙂

4

 October, 2016: Imagine you are having a gynaec examination. With his rubber-gloved fingers inside you, the gynaec starts a casual chat about why you should buy his home-grown brand of condoms and intimate products. Creepy? Yeah, well, but that's how HDFC Bank and other private-sector banks work. Actually, HDFC Bank is like if your gynaec collects real-time information about when and with whom you have sex, what kind of sex you are habituated to, exactly when you menstruate, what kind of lingerie and sanitary pads you are currently wearing, etc. and then this gynaec goes and hires a bunch of MBAs and college freshers, calls them "Relationship Managers", lets them hang around his clinic pretending to be gynaecologists themselves till you start feeling comfortable enough to tell them about your intimate problems.

Then your gynaec goes and gives these relationship managers access to your information on their computer screens, with monthly targets for selling you condoms, sanitary pads and other intimate products. They call you and make you feel important by calling you a preferred customer, and giving you a platinum card. So, if your periods are four weeks late, you get a call that goes like: "Good morning, ma'am, I am Nikhil, your personal banker. May I interest you in visiting our abortion clinic? Oh, you don't want to abort? My apologies, madam. May I take this opportunity to gift you an early booking in a maternity home with whom we have a tie-up? We also have a tie-up with Amazon for incredible discounts on maternity gowns and chocolate-flavoured condoms this Diwali. When can I come and meet you to book your orders?"

Bankers are routinely privy to salary details, annual income, etc. that it is their business to know. However, the salesmen and women who hang around your bank have no business to know your financial details. HDFC Bank branches have a bunch of glib young men and women who are very approachable and go out of their way to fill up account-opening forms, etc. for you. Just because they sit inside the bank, you think they are "bankers" and you never hesitate to ask them to access your account on their computers. So these sales people get to know private things such as a huge cash-flow into your accounts when your life insurance policy matures, or you take VRS, or sell your house, or book profits in the share market.

If you are flush with funds, your "personal banker" says, "Sir, can I interest you in our tax planning products to reduce your income-tax and capital-gains tax liability?" Alternatively, if you are struggling to pay credit-card bills, frequently overdrawing your current-account, breaking fixed deposits prematurely, etc., your relationship manager nudges you to take a personal loan or gold loan which he knows you are unlikely to repay in time. Loan disbursal lets him meet his monthly targets and earn commissions, and when you default on repayments, heavy penalties and foreclosure of your gold loan helps the bank reap handsome profits. Predatory lenders used to be called loan sharks and pawn-brokers! How the times have changed!

HDFC Bank is like if your gynaec collects real-time information about when and with whom you have sex, what kind of sex you are habituated to, exactly when you menstruate, what kind of lingerie and sanitary pads you are currently wearing, etc. and then this gynaec goes and hires a bunch of MBAs and college freshers, calls them "Relationship Managers", lets them hang around his clinic pretending to be gynaecologists themselves till you start feeling comfortable enough to tell them about your intimate problems.
Customers are set up for systematic long-term exploitation by HDFC's bankers and non-bankers acting in concert.

Here's a real-life anecdote: An elderly couple walked into an SBI Bank branch to fill up their 15H form, so that TDS would not be deducted on their interest income. A friendly-looking lady sat them down at her desk, filled up their forms for them, and persuaded them to invest Rs 3 lakhs in SBI Mutual within 15 minutes. The only reason that the elderly folks trusted this woman is that they thought she was a full-time bank staffer, whereas she was actually a freelance sales agent! .

Another anecdote: ICICI Bank organized free Aadhar Card camps in the foyers of a residential building in a posh Borivali neighbourhood. While one solitary minion sat in in the foyer taking fingerprints, mugshots, etc., half-a-dozen bank officials hung around persuading the waiting people to open accounts with ICICI Bank, and visited their homes on various pretexts. And they were pushy – it was very difficult to say no to them! Why are banks so keen on opening lots of accounts? Because it "provides customer base for ongoing cross-sell through branches". In other words, every account holder is a potential customer for credit cards, loans, etc.

And now, back to HDFC Bank. Let's look at their online behaviour.
As a customer, I have given my email address to HDFC Bank to enable them to keep me informed of my account balance, etc. Here's an example of an acceptable email from HDFC Bank:
But then HDFC Bank doesn't stop at that. Here's an example of a salesman-like email, which is tolerable only because debit cards are an intrinsic part of modern banking:
But HDFC Bank doesn't stop at selling their own products either, they try selling you other companies' offerings, earning advertisement revenues like a newspaper company. Here's an example:
Surely, advertising Amazon's festival sale is beyond the boundaries of the client-banker relationship. Advertising cannot be considered a part of a bank's regular activities. Is this why we give the bank our email address? Using the bank's customer base as a captive market for selling the products of other companies is abuse of trust and misuse of the client's information!
HDFC Bank earns a large proportion of its revenues from third party product sales, fees and commissions. See this slide from HDFC's investor presentation:

Bottomline: In their mad race for year-on-year growth, retail bankers are crossing over some boundaries of the client-banker relationship. HDFC Bank is abundant in examples of this unwholesome trend.

These may not necessarily be adequate grounds for filing complaints to RBI or the banking ombudsman, or for going to consumer court. But this distasteful behaviour shows a tendency to exploit the customers' ignorance, dependency and blind trust in their banks.

[Please share your experiences. Email or call me.]
ISSUED IN PUBLIC INTEREST BY
Krishnaraj Rao
9821588114
krish.kkphoto@gmail.com


POSTED IN PUBLIC INTEREST BY
Suliman Bhimani
9323642081
sulaimanbhimani11@gmail.com

Nandan Nilekeni, who is contesting from Bangalore, declared assets worth 7,700 crore rupees, making him the richest politician in India - at least officially, on paper. In his interview to NDTV, he described his rags to riches story and described some of his achievements including "My real wealth is however my experience as cofounder of Infosys and as Aadhar Chairman which gave away 60,000 crore identity cards to people of India as promised." [Congress supporters are now saying this number is wrong and he said 60 crore, which creates problems of a different sort. Read on.]

This sounds very wonderful, except as a long term critic of Aadhaar Cards, I wanted to verify.

60 thousand crore is 600000000000.

Now, as per our census, India's population over 7 years of age is 1,051,404,135.

Let us put these two numbers side by side, and you will see what I saw.

600000000000
1051404135

60000,00,00,000
105,14,04,135

Even if every single Indian above age 7 has an Aadhaar card, he has distributed more cards than the population. Not just more, 570 TIMES more.

One can only wonder who got the remaining cards, particularly considering the recent Cobrapost sting about how easy it is to create fake Aadhaar cards.

This is supposed to be an achievement?

Update:

Now people are saying NDTV reported wrong, and he said 60 crore, which makes some sense, as that is the number being used quite frequently (60 crore UID cards, 60 crore saved per year, etc)

So now the numbers look like

60,00,00,000
105,14,04,135

Which, at least looks like a possible number, but now, at an estimated expense of 150,000 crore so far (it was 45,000 crore in 2010) it is looking like we have spent a mind boggling Rs.2,500 on each card "given away"? (If it were 60 thousand crore cards, they'd have cost a very cheap Rs.2.5)

And after all this, what we have is a card anyone can fake (remember the UID card for "coriander" plant?). The data is owned privately and stored on servers in the US, where it will be subject to US laws and could be accessed by the US government (if not already). One only has to wonder what the biometric data will be for people who don't even go in person to get their cards made.

In any case, this ain't looking like something a chap would put as an achievement or learning!

For a reference, the entire health sector was allocated 37,330 crore in the budget - this includes NHM (NRHM + NUHM) - 21,239 crore, AYUSH (Ayurveda, Yoga, Unani, Siddha and Homeopathy) - 1069 crore, 4, 727 crore for medical education, training and research, 150 crore  will be provided for ‘The National Programme for the Health Care of Elderly’, Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) (medical colleges) - 1650 crore and more.

And we are saying making ID cards and records for less than 60% of the population costs almost 4 times all this?

15

What is the Reliance Gas Price issue? Why has Arvind Kejriwal filed an FIR against Mukesh Ambani? Why is there so little clear information on the issue? Read the easy to understand version.

What is the Reliance Gas Price issue?

To put it in one line, it is an objection to higher pricing for natural gas which has little justification and has been brought about through unclear reasoning.

What is the complete story of Reliance Gas Scam?

After the Government of India opened up hydrocarbon exploration and prodution to private and foreign players in 1991, Reliance Industries got the rights to explore the D6 block as per NELP (New Exploration and Licening policy). Here, Reliance Industries discovered India's biggest gas reserves in the Krishna Godavari basin near the Andhra coast and the site is called Dhirubai 6 (which is where the "KG D6 basin" come from, in news related with this subject). The size of the block is 7,645 square kilometers and is officially recorded as KG-DWN-98/1.

The D6 was to produce 40 million MMSCD (Million Cubic meters per day), which was revised to 80 MMSCD. Initial development cost at $2.4 billion was revised through an “addendum” in 2006 to $5.2 billion in the first phase and $3.3 billion in the second phase.

When Reliance Industries split between Mukesh Ambani and Anil Ambani, a secret pact between the Ambani brothers became public. Anil Ambani owned RNRL (Reliance Natural Resources Ltd) claimed it had rights to gas from Reliance KG basin for 17 years at $2.34 per mmBtu (million British thermal unit). The Supreme Court finally settled the matter by asserting that ‘the government owns the gas till it reaches its ultimate consumer and parties must restrict their negotiation within the conditions of the government policy’.

None of the ministries involved in the process, including the oil ministry, raised the point that the gas reserves belonged to the country and was not a property of the Ambani family. Even the Prime Minister, ManMohan Singh meekly requested the brothers to settle their differences in the interests of the country.

The CAG Draft Report on the audit of the Production Sharing Contracts for the on-shore and off-shore oil and gas blocks showed that the Directorate General of Hydrocarbons (DGH) allowed Reliance Industries and other private operators to "gold-plate" the capital costs and make huge profits using an "Investment Multiplier", which meant that higher the capital cost, the larger the share of the profits of the private parties. If the cost is inflated enough and the supply of gas dwindles before it is recovered (the quantity cannot be ascertained, as the appraisal wasn't done), the government profit will mostly be "thenga", while Reliance "recovers" its invented investments.

Till the the capital costs are recovered, 90% of the petroleum/gas sold would be “cost” petroleum (covering Government royalty of 5%, operating costs, the costs of exploration, and the development cost of producing gas) and only 10% would be “profit” petroleum and Reliance gets the major share of the “profit” petroleum. The "Investment Multiplier" begins to increase (and thus the Government's share) only after Reliance Industries has recovered most of its investment.

So increasing the profit share for private parties and decreasing government share was as simple as pouring in funds well beyond those stated in initial bid. Increasing capital costs helps Reliance retain a much larger share of the profits in the initial years, while the Government gets its share only in the last phase, when the production declines.

The capital costs in KG Basin D-6 Block went up from $2.4 billion in the initial contract to $8.5 billion. This is not possible without the government cronyism allowing it and there lies the  KG basin gas scam. In the case of KG D9 basin, the Management Committee in which the Government had 2 nominees allowed the inflation of contracts.

The CAG Draft Report also brought out that if the company did not develop certain areas within the contracted area within the stipulated time, 25% of the area outside that discovered in 2004 and 2004 should have been relinquished. Instead, the DGH and the Ministry of Petroleum allowed the whole area to be designated as “discovery area” in violation of the contract. Actual amount of gas available was obfuscated by digging inadequate wells, and moving directly to commercial production without intermediate appraisal.

Add to this the high price of Reliance gas -- $4.2 per Million BTU (MBTU), fixed by the Empowered Group of Ministers headed by Pranab Mukherjee even when Reliance had admitted in Court that its production cost was $1.43 per MBTU and agreed to to supply gas at $2.34 to both NTPC and Anil Ambani Group, still making a profit of 50% (at this point, ONGC was supplying gas for half the price and gas production had not started in KG basin). Pranabda's Empowered Group of Ministers let him renege on this and demand $4.2 per MBTU, because he could not now supply gas for less than the "mandated price" set by the government" (No gas was coming out of the KG Basin still). Ministers may be "Empowered", but on behalf of whom were they acting?

So Reliance profits from every side

  • By over invoicing the capital costs paid to own affiliates without oversight, it makes substantial profits directly
  • By inflating project cost, it continues to get a larger share of profits for an additional time till the "investments" from are recovered.
  • Selling gas at multiple times the real cost (of which it retains a major chunk as "recovering investment")

In the meanwhile, fuel prices influence every aspect of life in terms of affordability and they are set to rise AGAIN. For the common man, this basically means "khaya piya kuch nahi, glass toda barah anna" only to find out that the broken glass has been kept there to con people into paying for breaking it.

The open letter by Surya P Sethi to the prime minister on the Rangarajan formula doubling the price of KG basin gas minces no words.

The Comptroller and Auditor General's findings and other independent reports reveal how crony capitalism benefited RIL. The pre-qualification norms were diluted to ensure RIL qualified. The claimed size of gas discoveries, the field development plans and the investment outlays proposed escaped rigorous due diligence. Above all, RIL's commitments under the PSC and the field development plans were not enforced.

RIL's clout was on full display when, despite serious objections from me and the then Cabinet Secretary, the 2007 Empowered Group of Ministers approved the price of $4.20 per million metric British Thermal Units (MMBTU) based on an RIL-crafted formula that was unique in the world for pricing natural gas. The $2.34/MMBTU bid by RIL, in a global tender, for the same gas was ignored. A sham price discovery exercise was permitted to justify the higher price that the approved formula delivered.

And Moily & Co have approved yet another price hike that doubles the price of gas from 1st April onwards. So, from $4.2 per unit, Reliance will sell for $8.4 per unit.

Why has Arvind Kejriwal filed an FIR against Mukesh Ambani?

Arvind Kejriwal cannot overrule the Central Government match fixing permissions and prices and such to suit their cronies (or is it puppet masters?), but he has done something that will add pressure to bring about accountability on thKG Basin gas price scam. He has filed an FIR for cheating against Mukesh Ambani, Moily and others for what is becoming known as the Mukesh Ambani gas scam. In particular, he is trying to stall the new price hike from April onwards.

Considering that the whole scam appears to be somewhat legal with "lapses", it is unclear how he can win the case, particularly with the two biggest political parties and media out to defend Mukesh Ambani, but it will pave the way for more serious actions by forcing the issue into more attention.

A country cannot afford to abandon national interest in the energy sector so lightly and still expect to thrive.

Why is there so little clear information or discussion on the issue?

Ambani owns controlling shares in 27 media and news channels. Vajpayee's son-in-law Ranjan Bhattacharya told Nira Radia (Radia tapes scandal) that Mukesh Ambani told him “Congress to ab apni dukaan hai.”. Mukesh Ambani and Narendra Modi hugged onstage in last year's Vibrant Gujarat and Akash Ambani attended Modi's rally in Mumbai. It is the Congress that has helped engineer the windfall in the first place. Not to mention when Arvind Kejriwal in November 2012 made these accusations, Mukesh Ambani lawyers sent notices to media organizations for airing them. What do you expect?

Please note that I am no economist, journalist, analyst or similar. I am a blogger with interest in issues of relevance to the common man of India and I seek information to understand what is happening. If there are any inaccuracies, please point them out in the comments and I will correct them.