SI Financials

Credit card issuers to recover outstandings from card holders' employers.

2009-08-02T16:24:00.004+05:30

Recently,I have been reading newspaper articles regarding ICICI Bank incorporating a clause for recovery of credit card dues from card holders' employers in the Terms and Conditions for usage of credit card. This article also indicates that other banks will follow suit.

The ability of the ICICI Bank to write to your employer to recover your loan outstandings from amounts payable by your employer to you is nothing new that it should make its way to news articles only now. The basic problem is that any small news about ICICI Bank begins to get blown out of proportions. There is no doubt about it that ICICI is not amongst the best of banks as far as customer service is concerned simply because it has grown beyond proportions. Some of the smaller nationalized banks will really score much higher than ICICI Bank as far as personalised and courteous service to the small depositor is concerned. However, as long as there is no service required from a human being at one of the bigger branches of ICICI Bank, this bank will score the highest for automated and computer (read online) related services that are used by the customer without human intervention from the bank. I also bank with ICICI Bank and I do find their services below par at large brances and very good at small branches that hope for a customer to walk in. This may be normal at all banks worldwide.

Now coming back to the point of recovering dues from a defaulting customer through their employers, those of you who may have availed of personal loans from ICICI bank should be aware of the following document:-

ICICI BANK LIMITED'S (ALL-INDIA) STANDARD TERMS AND CONDITIONS GOVERNING PERSONAL LOANS (REGULAR AND PRE-QUALIFIED LOANS) [Registered on June 14,2005 with the Sub-Registrar of Assurances, Andheri- No. 1, Mumbai as document BDR - 1/ 06244 in Book No.IV (as modified from April 15, 2006)].

Do bear in mind that this document is duly stamped and registered. Every time you avail of loans from the bank, you are asked to sign on a stamped agreement. That agreement you sign is basically indicating your agreement to be bound by this registered document.

Now this document already has the following clause no. 27 under the heading RIGHTS AND REMEDIES OF THE BANK:-

If any one (or more) Events of default shall have occurred, then ICICI Bank shall, in addition to the various rights and remedies of ICICI Bank referred to in the clauses above, be irrevocably entitled and authorised to contact and require the Borrower/s' employers to make deduction/s from the salary / wages payable by the employer to the Borrower/s and to remit the same to ICICI Bank until all of the Borrower/s Dues outstanding from the Borrower/s to ICICI Bank is / are completely discharged. The deductions shall be of such amounts, and to such extent, as ICICI Bank may communicate to (and instruct) the Borrower/s employer. The Borrower/s shall not have, or raise / create, any objection to such deductions. No law or contract governing the Borrower/s and / or the Borrower/s' employer prevents or restricts in any manner the afforesaid right of ICICI Bank to require such deduction and payment by the Borrower/s' employer to the ICICI Bank. Provided however that in the event the said amounts so deducted are insufficient to repay the outstanding Borrower/s' Dues to ICICI bank in full, the unpaid amount remaining due to ICICI Bank shall be paid by the Borrower/s in such manner as ICICI Bank may in its sole discretion decide and the payment shall be made by the Borrower/s accordingly.

I have availed of a personal loan from ICICI Bank in 2007 and this is what came along with the loan. There are also many other clauses that suggest you must intimate to ICICI Bank regarding any material changes in your financial affairs that they may need to know about you. This can be changes like change in your job, business, profession etc. and anything in the conduct of your financial affairs that may have a severe impact on your ability to repay. That would also mean if you take another loan,you are duty bound to inform the Bank. You have signed on the dotted line that you agree to the terms and conditions written in a registered document. Legally, you cannot retract from this contract. Therefore I have said that this clause is not new. Maybe they will supplement it in their already registered document for credit cards. It is written in the document that it is adequate for them to send you email or publish in their website regarding any supplements or changes to the agreement. Maybe they will send an email to card holders if they have the address on record and definitely publish the changes on their website.

ICICI Bank does find its ways into the news for many bad reasons and one of them is regarding their recovery of loans. In case ICICI Bank is indeed a Dishonest Lender or a Loan Shark, then you would definitely have reasons to worry. For my personal loan I allowed them to use ECS to recover installments and they took PDCs each for 6 month value of installments till the end of the tenure. I had to change the ECS mandate as I closed the account and opened a new account. They took from me PDCs for the remaining tenure from the new account. To my surprise, after 15 days I got back my old PDCs issued from the previous bank account. Reading so many adverse News reports and articles on the internet written by consumer guidance advocates regarding ICICI Bank in particular, I was worried that ICICI Bank may not return these cheques.

So far everything seems OK with ICICI Bank as far as I am concerned. However, I have to wait until my loan is fully repaid to see how honest or dishonest ICICI Bank is. after receiving their total dues. Credit card holders may be worried about excessive charges especially on non credit of card repayments or delayed credits. Normally, ICICI Bank is known to sort out such disputes within the first level of complaint itself in case you are in the right. In this respect, by my own bad experience with some foreign banks, they levy these fancy charges even after they receive and clear the instruments well before due date. They even acknowledge receipt of cheques in clearing and clear the funds from your account. Still they will tell you that they have not received the cheque at all. I had dragged one of these foreign banks right upto The banking Ombudsman. At that stage they simply credited the amount of payments I made and reversed the charges and informed The Banking Ombudsman accordingly that the error occured due to mistakes of their outsourced service providers and they have taken the remedial action. All that was done before I could make a claim for compensation. Remember that credit cards is the only banking service where it is possible to claim compensation for mental agony. On the good side of customer relations, I have had instances of Citibank reversing such charges even when I was in the wrong (dropping unsigned cheque, wrong dated or undated cheques in the drop box, alterations unauthenticated etc.). With ICICI Bank I never had such problems to contact their grievances cell for financial issues. My grievances with them have been generally for service related issues.

Now in case all banks are equipped with this clause against card holders, it will be of great concern and discomfort if they misuse this clause to shore up their revenues by double recoveries etc. or recovering when not eligible. There is nothing you can do in such instances to stop your employer from paying the bank as you have already subscribed to these Terms and Conditions. Therefore the only course of action for you is to give the bank notice not to recover amounts this way due to reasons of dispute and pray to the Consumer Court or Banking Ombudsman or The Court to which you have made a complaint regarding wrongful charges and non credit of payment, to issue an "interim order" to the card issuer not to recover any dues in this manner and in case it is determined that they have already recovered any dues wrongfully they would be liable to compensate interest from the date of such wrongful recoveries.

It is advisable to log in to your card account and check that your payments are duly credited and no wrong charges are debited. It is better to nip this issues in the bud rather than wait for it to be blown out of proportions. After all, you would like to get on with your life and work rather than waste time on such issues. Please do use the first and second level of escallation at the bank itself before approaching any forum. Chances are you may at least have the dispute solved but receive no compensation. Some banks do display they will as a matter of self discipline compensate the customer in case of their mistakes. However, I have not heard of any bank voluntary compensating customers.

The evils of banking services!

2009-07-14T15:54:00.006+05:30

Life has been hectic for quite sometime. A lot has been happening that kept me so busy that although I have been online for most of the day (really no difference between working days and holidays) trying to save money rather than make money.

Believe it, I too have had my share of grievances with banks and life insurance companies and worse still, such disputes keep on occurring. I am on my toes all the time and I have to take a lot of time off to examine my bank account statements, frequently check my transactions online and worse still, read the junk mails or emails from my banks thoroughly to ensure that they have not slipped in any changes in fine print.

Fortunately, I have not yet had any occurrences of fraudulent transactions that have not been initiated or authorized by me. However I have had numerous instances of excessive charges, duplication of charges, non credit of realized payments to credit card issuers and levies of excessive charges due to non credit. I have spent a good deal of time in fighting and disputing transactions and they really take a lot of time to get sorted out because the authorities for starters unjustifiably give banks 30 days to sort the dispute before the consumer can escalate his / her grievances to exercise options of using the next higher legal forum available i.e. banking ombudsman or consumer courts.

One question keeps coming to my mind. Why so many occurrences and that too of seemingly small amounts. It seems that banks have targeted the small consumers with little or no means to excess charge or not credit payments and then levy more charges and interest. The reason why this seems probable is that if they levy a small amount on a widespread database of customers, chances are that very few will point out the errors. They will receive the complaints and I could guess that the complaints may be a small fraction of the errors they seem to be deliberately making. Even after receiving complaints, they are very confident that the amounts are not too large and the consumer may not waste time in going through the process of resolution of complaints. At worst, very few consumers would go to the higher forums and banks have enough resources to fight. The consumer is unfortunately weak and helpless in such matters as normally regulators like Reserve Bank of India always believe that the Banker is right. The banks have the ability to fight it out right through the Supreme Court. In the past I have been advised by banks that I should not go through disputes because even if they lose round one they will go in appeal right through till the Supreme Court as they have the financial ability to do so.

I suggest that you frequently access your bank account and check for the following:-

Charges levied to your account. You will not get any details in the statements but you can always ask them what it is for.
Duplication of charges. The most common instance is in the CBS Branches of most of our nationalized banks in India. If you use a service at a non home branch, chances are you may be automatically debited by the CBS system. The branch where you carried out the transaction may also duplicate the debit. This happens due to lack of training imparted by the bank to its staff and even if the staff is inefficient or make too many errors, the pressure of the unions is so high that staff relations is of paramount importance compared to customer satisfaction. This is to the detriment of customers as banks habitually protect their staff, especially the nationalized banks. Therefore please be vigilant on this issue.
Please read the fine print in all statements as well as junk mails or emails received from your bank.
If you find anything out of the way or wrong, please raise a dispute and keep a copy of the email or letter (do not trash it). Remember to date the correspondence as you can approach the next forum usually only after 30 days of the initial complaint if it remains unresolved.
It is important that there are follow ups. I suggest you keep a copy for all correspondence exchanged and also maintain details of your visits to the bank and costs (conveyance, postage, courier, telephone calls, email bandwidth etc.) . You can claim these costs in addition to costs for approaching the next higher forum and also compensation for mental agony wherever allowed (normally for credit cards). If you maintain records it will prove that you have been proactively following up. However, do not go overboard by calling once every two minutes, blasting emails and faxes, sending too many letters etc. Avoid aggression like creating a scene at branches of the bank. After all, your initial interest is to get the rectification done and this can happen if approach is made in a cool and non agitated matter.
If the bank sorts your matters even after slight delays, remember to write a thank you letter or email if you intend to continue maintaining relationship with them.

Privacy Policy Revision 1

2009-03-26T07:45:00.009+05:30

Enactment of new laws in various jurisdictions compels us to post revisions to our privacy policy rather than amending the existing privacy policy.

Our privacy policy initially posted on August 24, 2008 in its revised form from time to time continues to be applicable with following additions and / or revisions effective April 1, 2009:-

Any changes with respect to our method of collection and handling of the visitors' Personally Identifiable Information or Sensitive Information will be effective from the date of the post only on data collected on or after that date. For Personally Identifiable Information and Sensitive Information already collected under the previous Privacy Policy, revisions will apply only with the consent of the person submitting the information.
The Privacy Policy posted on http://www.stoneint.in/privacy.htm is applicable to this blog and has undergone revisions. Please refer to this document for definitions of Personally Identifiable Information and Sensitive Information as well as procedures to opt out of third party data collection.
Effective April 8, 2009 Google will change the method of delivering ads to this blog as well as our website. Advertisements may be placed based on your interest and / or the contents of our website / blog.
To enable serving ads based on your interest, Google, as a third party vendor, places cookies in your web browser to determine your interests.
Google uses the DoubleClick DART cookie that enables it to serve ads to our visitors based on their visit to our site and other sites on the Internet.
Visitors may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy.
Links to OPT OUT procedures are also available on the DoubleClick DART cookie pages.

Google or DoubleClick do not collect any Personally Identifiable Information or Sensitive Information to determine your interests. Google, its services providers and its advertisers do not share with us any information that they collect during course of serving ads on our website / blog.

Changes to our Privacy Policy will henceforth be notified as a separate post.

Automatic monthly or annual transactions with your credit cards. Very Dangerous.

2009-01-28T11:39:00.003+05:30

Believe it because it has happened to me inspite of being a seasoned credit card user for over 25 years.

Yahoo India as you know is the subsidiary of the international Web Search Marketing Giant Yahoo Inc.

Last year, to be precise, on February 23, 2008 I availed their services to host a website. They gave me a package deal of Rs.1,123 for one year including web hosting and domain name registration. They were accepting only credit card payments and I paid using my VISA card issued by Andhra Bank.

They told me that every year my card will be charged Rs.1,123 for renewal so that I will not have any disruption of service.

Basically there are two services that I subscribed to with Yahoo India Small Business
1) Domain name registration
2) Web Hosting.

Last month when I observed on the business panel that Yahoo will automatically charge me Rs.2,246 for the hosting I decided to go elsewhere. On their help resources they gave the procedure of how I could change my registrar for the domain name. This is mandatory as ICANN does not allow any registrar to bind me to use their services and I am free to change my registrar. I only had to provide a domain transfer coe to the new registrar with whom I wished to avail this service. Yahoo also recommended in thier website that for uninterrupted registration I should make arrangements with new registrar first before cancelling the service with them. They did not provide me the unlocking code on my management panel and when seeking the information it was indicated that I should send them an email. It took 3 reminders before they furnished me with the necessary information so I could approach a new registrar. After that it took 9 days for the domain to be transferred to the new registrar. Later I subscribed to hosting with the new registrar and proceeded to cancel my services with the Yahoo India Small Business. When I went to the business panel of my Yahoo Service, I could view the information and also the payment information. My card information was also captured on their website to make a next transaction on February 23, 2009. There is also a Cancel Services Link. Below is the actions I have taken in chronological sequence.

1) I clicked the Cancel Services Link. On the screen I got the message that to cancel services I should phone +919900199001 or send an email to in-cs-ysb@cc.yahoo-inc.com

2) I called +919900199001 and got an IVRS response to send email.

3) I sent email. No response for 2 days.

4) I went to the website management panel online and from the payment section I attempted to delete the card information using the delete link. I got a response that I should first enter another card number and details before this one can be deleted. If you observe, they are not accepting the cancellation of services and they are refusing to cancel my card information. If I do not want their services they are not entitled to my card information. How can they keep it so unsecurely on the internet? Now I got a response from them that they wish to call me but I was not available on the phone. They also said they have forwarded my email to the concerned department for renewal. My instruction to them was clear. PLEASE CANCEL and I warned them not to charge my card and delete the information they have on record.

5) I found some land line numbers of theirs in Mumbai on their website. I called. They asked me to call Bangalore. I called. They gave me another number in MG Road Bangalore. I called. They told me that I will have to send an email to in-cs-ysb@cc.yahoo-inc.com. After so much costs they have taken me round a full circle. I called Andhra Bank, they told me there is no way I can stop an electronic transaction and I would have to get the existing card blocked and reissued which would cost me Rs. 400/-. Eventually I would have to do this and hope to somehow recover the amount from Yahoo. I escalated my complaint to a higher up in Andhra Bank. He told me that to make my grounds stronger in case of dispute with Yahoo, I should send them an email instructing them to cancel the services and cancel the captured card information. I had already done this but the officer at Andhra Bank told me to add the following
'You are hereby required to confirm the cancellation of services and deletion of card information within 24 hours of this email. In case I do not receive any response within 48 hours from this email I shall assume that you have cancelled the services and accordingly my card will not be debited by you for any renewal.'

However, I chose to pay Rs.400 and get my card blocked and reissued. I am using this card since 25 years and have had very good services from Andhra Bank. I really wished for a good nights sleep rather than being cheated by a Juggernaut like Yahoo. Eventually my savings were reduced in changing providers. However, in future I would be saving something at least.

Another disastrous instance of automatic debit was for a product by Tata AIG General Insurance. I literally got conned by one of their tele marketing salesperson to sign up for a policy that sounded reasonably good. the cost was Rs.10/- per month for 2 months and thereafter Rs.701/- month. I had to part with my credit card information to facilitate debit of Rs.10/- month for the first 2 months. Thereafter if I did not cancel the policy within the free look in period of 60 days, my card account would be charged Rs.701 per month. Do bear in mind that all this was over telephone. On receipt of the policy I found to my detriment that it was one of the most disastrous insurance contracts I ever read (I too was a life insurance agent for 2 years). Immediately within 20 days (against 60 days) I sent back the policy with instructions to cancel the same and also sent a letter to Axis Bank, the card issuer, not to allow any debit to my card other than the Rs.10/- per month for 2 months. I sent them copy of my communication to Tata AIG General Insurance Company Ltd.

After 2 months I was surprised to observe that I was charged Rs.701/-. On telephoning Axis Bank, I was told that credit card transactions cannot be stopped and I would have to block the card and reissue it at a cost. I chose to cancel the card as it was a new account barely 5 months old. Eventually, after complaing to IRDA with the proof of communications to Tata AIG, the insurer cancelled the policy and refunded the amount charged to me within 2 days of receiving a letter from the IRDA. They sent the refund to my cancelled credit card and Axis Bank took another one month to refund the money to me.

What I found strange is that banks are happy to honor a telephonic instruction and charge your credit card account. Written instructions seem to have no value as far as credit cards are concerned, at least in India. Direct Savings Bank debits are a better option as you can put a stop to the debit more easily. Strange. Where good funds are available, payment can be stopped but where a credit limit is given a payment cannot be stopped and a bank seems only too happy to debit your credit card account and recover money from you. The reason they seem to be doing this is that there is more profit in the credit card transactions. As the merchant, whether honest or dishonest is bearing their charges, the banks tend to get more pro merchant than pro customer and look after the interest of the merchant. The card holder who pays the charge and in some cases also fees and interest (if revolving credit is used) seems to be at the receiving end in all these transactions.

It is a necessity to make card transactions. I strongly suggest the following:-

Avoid transactions where you have to give card details on phone.
DO NOT use credit cards online or at any merchant physically or through mail for a future transaction or automatic charges at regular frequency. There is absolutely NO WAY the card holder can stop these transactions. It can be cancelled only by the Merchant. If you deal with a dishonest merchant you will lose your money as you are bound to pay to the bank whatever is charged.
It is important you use credit card only for goods or services you are sure of receiving immediately and not in the distant future.

If you stick to these rules, you may be entitled to a good night's sleep.

ICICI Bank's Rs. 375 Cr. exposure to Lehman Brothers. Any problems for ICICI Bank or its account holders?

2008-09-16T18:54:00.003+05:30

The news is out that ICICI bank has an exposure of EUR 57 Million (Rs. 375 Crores) in Lehman Brothers that has filed for Chapter 11 Bankruptcy with a US Court in New York. Fortunately due to somewhat rigid controls our regulators have on Indian Banks, most of our banks are not so adversely affected by the debacle of Lehman Brothers. The exposure of ICICI Bank is through its England subsidiary.

Is this a major disaster for the account holders of the country's second largest commercial bank?

Maybe not yet as the problem has so far been felt only in the share markets where the shares of ICICI bank has opened almost 6% lower. Remember the year 2003 when rumours of ICICI Bank going bankrupt rocked the country's second largest and fastest growing bank to such an extent that the regulator Reserve Bank of India had to step in and issue a statement that there is no problem with the Bank. Many people in Gujarat state where the rumours started had thronged at the branches of ICICI bank during midnight of the weekend to know about the status of their moneys lying with ICICI bank.

Many people (possibly the rumour mongers) had made huge profits in buying overnight the shares and bonds of ICICI bank at highly discounted prices. These situations are normally prominent in Gujarat State only.

The rumour mongers are at it again. People know that I do majority of my banking with ICICI Bank and they have been phoning me since afternoon telling me that I should withdraw all my moneys from ICICI Bank by tomorrow evening as it is going to fail. Relying a bit too heavily on ICICI Bank and being addicted to its services, of course I panicked. I decided to go and draw out some money from the ATM. No crowds at all that would remind me of the situation in 2003. In fact I was the only customer withdrawing cash from the ATM and all the 3 machines were operational. I could withdraw the cash. Next I walked into the branch. Not too much of a crowd at 4.30pm and it seemed to be business as usual. After my visit to the ATM I was able to use the card for shopping also. To my mind, these are not the idiosyncrasies of a failing bank. In this volatile stock market, rather than account holders, it is possible that the share holders who have a position with ICICI Bank will really have to be worried about it. Maybe the rumour mongers want to buy financial products of ICICI Bank and its Group Entities at a substantial discount to make immediate gains. These things happen only in Gujarat and we can rightly call this state the rumour house of India.

In the meantime, it is better to intensify our watch on ICICI Bank. I really do hope that our regulator the Reserve Bank of India puts in place a proper system wherein Banks do not feel the heat by such rumours. It is very badly needed here for sake of account holders and depositors.

High interest rates on credit card defaults in India. Matter with Supreme Court now.

2008-09-10T15:51:00.006+05:30

Most of the hapless credit card users in India may have heaved a sigh of relief that the Supreme Court of India refused to stay a judgement of the National Consumers Forum of India stating that credit card issuers should charge an interest of less than 30% per annum on default of credit card dues. Appeal on this judgement by the National Consumers Forum was filed before the Supreme Court by card issuing banks, mainly the foreign banks and the large private sector Indian banks who have been charging interest rates of between 36%-49% per annum on default in payment of credit card dues. In addition to this they are also charging a late payment fee based on the minimum amount due.

The justification that banks have given to the Supreme Court of India for charging such a high rate of interest to credit card customers are having to make telephone calls and paying call centres to get new customers, telephone and Internet costs, high rate of defaults and frauds etc. It seems that the banks are trying to pass on the losses and costs in due course of their banking business to the hapless credit card customers.

While this judgement provides some temporary relief, please do not increase your credit card spends on revolving basis if you think the banks will charge you only 2.5% per month + service tax. This judgement is applicable only for defaulters who do not pay to the bank. Chances are that you are not a defaulter if you pay the minimum amount due by the due date and are charged interest on what you do not pay. If you are not a defaulter you will continue to be charged at the high rate of interest the card issuing companies have been hitherto charging to you. Defaulting is not an option to avail the lower rate temporarily allowed till the appeal reaches its logical conclusion. If you default, your name will be placed by your card issuer in the industry defaulters database maintained by the CIBIL for all bankers and you may not be able to avail bank loans or credit card facility from other banks till your name is removed from the defaulters' list. Therefore, please go easy and avoid going overboard with charging unnecessary purchases to your credit card.

Consider a situation that you make a purchase of Rs.5000/- and bank allows you to pay 10% by the due date and defer the rest. Today is the 10th September,2008 and bank issues your bill on 20th September. You will receive the bill that will have to be paid into the account (physical realisation of cheque into the account) by say 4th October. This means you should deposit your cheque on 30th September for it to be credited by 4th October. You must pay a minimum amount of Rs.500 by 4th October to avoid being charged late payment fee. If you pay the entire bill of Rs.5000 by this date, you are charged no fees or interest. If you pay only Rs. 500/- or less than the total amount due, you are first charged interest at 36% - 49% per annum + 12.36% service tax from the day you made the purchase on 10th September till the date you make the part payment. From the date your payment is received, you are charged on the balance amount at 36% - 49%. This way you are not reported as a defaulter to CIBIL. Consider the scenario that you do not make the payment or your payment is credited to your account after the due date. What happens then? You are a defaulter and you are charged 36%-49% per annum from the date of purchase till the date your payment is received beyond the due date or till next statement date if not received at all. If payment is received after due date, even if full amount is paid, you will be charged interest from date of purchase till date of payment as well as interest on the balance amount due till your next billing date. In addition to this you are also charged a late payment fee that varies from bank to bank. Most bank's charge 30% of the minimum amount due subject to a minimum of Rs.300 and maximum of Rs.600/-. In case of the illustration given above, 30% of Rs.500 works out to Rs.150. Therefore in this case they would charge you Rs.300/- being their minimum amount instead of Rs.150/- what it should work out to. Therefore the default would cost much more than 36% - 49% per annum depending on the amount. The higher the amount of default the late payment charges are less as there is a ceiling of Rs.600. Eventually you are encouraged to default for a large amount and not a small amount. What the honest credit card user is paying for is the charges a bank incurs in its marketing efforts to get dishonest wilfull defaulters + the amount the banks loses in principal amounts charged by these defaulters. Why do you have to pay? Because you are honest and wish to avoid getting into any default lists circulated by the bank to the CIBIL database. Banks earn interest and charges from you if you delay payment as well as earn charges from the merchant establishment that sells you the goods and merchandise / services. This is usually 2% + service tax. The merchant bears the communication costs for the swiping machine while completing the transaction. The card issuer settles the merchant 3 days after you charge the transaction and they earn their charges for committing funds for a very short term of 15-45 days depending on which day of your billing cycle you charged the amount. In case of debit cards, banks earn the same amount without any money at stake as customer account is immediately debited. It will take a lot to justify the high rate of interest between 36 - 49% per annum and I do hope that the fact that Banks are earning on credit / debit card transactions from the merchant establishments should be disclosed to the Supreme Court of India. Even 30% per annum is too high considering the service tax component added to it. We just have to hope that the Supreme Court will administer justice after fully analysing the facts and getting from the card issuers full statement of whatever they earn from the merchant establishments and not go by distorted figures given by banks. We should remember that for what customers charge their accounts for transactions with Petrol Pumps (Bunkers), Railways and Airlines a separate charge is recovered by the card issuers from the customers for these specific transactions. Card issuers also recover a charge for crediting refunds in case of cancelled railways or airline tickets. In these circumstances, we can only say that credit card business is a loan sharking business given a legal sanctity by the Government that chooses to remain silent because of the Service Tax they generate @ 12.36% of whatever the bank charges to the customer.

Insurance is a subject matter of solicitation! Really?

2008-09-03T15:58:00.002+05:30

Life Insurance Policies and General Insurance Policies are being sold in India since more than a century under the British Raj. After independence, in the mid 1950s, the insurance business was nationalised in India and the Life Insurance Corporation of India took over the Life Insurance Business in India exclusively. The General Insurance Business was taken over by the General Insurance Corporation of India through its subsidiaries, the major ones being New India Assurance Co. Ltd., Oriental Fire and General Insurance Co. Ltd., National Insurance Corporation of India ltd. and United India Insurance Company Limited. These four nationalised insurance company issued mediclaim, accident, property, motor vehicle, marine and other general insurance businesses in India. Insurance for loss due to medical illnesses, accidents etc. was sold as additional riders in the Life Insurance Business. From 1956 to 1999, these nationalised insurance companies have had a free ride selling insurance policies without any competition. Post 1999, with private investments (including a 26% cap on foreign investments) being allowed to enter the insurance business, the face of the Indian Insurance business has changed tremendously. Before privatisation of the insurance business, we rarely read the fine print in the advertisements of insurance companies stating "Insurance is a subject matter of solicitation". The owners of the insurance companies (Government of India) never really needed to advertise insurance at all. You need insurance, you would walk into one of the divisional offices or branches of the insurance companies. Insurance agents were active but the selection criteria was based more on influence rather than qualifications. The only need for advertisements was if there was a drive to issue more of certain class of insurance products. The only purpose of advertisements was to sell massive number of policies. After all the moneys raised from premiums are invested into social infrastructure developments projects. That was the only need for advertisements. Post 1999, all this has changed. The Insurance Regulatory & Development Authority of India was constituted to regulate the general and life insurance business transacted in India, including the public sector insurance companies on a level playing field. With the public sector insurance companies having exclusivity in the trade for over four decades, the playing field could really not be called a level playing field especially for those in the Life Insurance business. In the General Insurance Business the private sector companies could prove themselves by settling claims promptly. The problems that private sector life insurance companies had was that if at all any claims were filed, they were all early claims that required thorough investigations before settlement because they themselves were newly in the insurance business and all their policies were new. Therefore, there were delays in settlement of claims. However, the general perception was that the private sector life insurance companies were unreliable for this reason alone. However, they were helpless as there is a statute in place that early death claims have to be thoroughly investigated before settlement. This was and is applicable even to the Life Insurance Corporation of India (LIC). However, the public totally ignored delays by the LIC for this same reason or rather were conveniently made to ignore this by the agents of LIC by showing solid proof of quick settlement of claims in the last 40 years when they had exclusivity of the business. With the number of private sector players increasing in the insurance sector, regulations were framed for appointing agents with proper qualifications and passing an exam held by the regulator. Regulations were also framed for advertisements that the companies could issue and the illustrations of policies issued by the companies. These have to be approved by the regulator IRDA. Taking cue from insurance business in other developed countries, our Indian insurance companies also had to write this line "Insurance is a subject matter of solicitation" on all forms of advertisements, including letter heads and visiting cards of employees or agents. This has become more of a statutory warning like what you find in advertisements or packages of alcoholic beverages or tobacco products (including Gutka). What exactly does this phrase or sentence mean. To decipher the meaning, first let us examine what solicitation means. To solicit in this context is to offer services against payment. This means that the insurance companies are selling to you their services (read policies) against payment of premium. The quote is clearly written as 'Insurance is the subject matter of solicitation'. This means that insurance policies can only be sold and not bought. In your right state of mind, you will not wake up one day and remember that you have to go and purchase an insurance policy, the reason being it is a contract that leaves you poorer in your pocket. It is something that you force yourself to procure because of your worries that you have in your mind. The most convenient way of getting rid of worries is to forget about it. That is what you may do and totally forget about taking insurance altogether and that can be damaging. Therefore insurance companies have to reach out to you through agents, employees or through advertisements. What should you understand by this phrase? I suggest you entertain the insurance agent with respect and hear him out for what he has to offer to you from his company. After all he is restricted to offer only his sponsoring companies product and he is in the best position to offer to you what you need as Insurance policies can only be sold, never bought. His card will also display this phrase 'Insurance is a subject matter of solicitation. Now let us come to the subject matter of this post. Why do I pose the question 'Really?' after this quote. That is because the insurance policies are never being sold. They are being 'wrongly sold', especially the life insurance policies. In Life Insurance, you definitely need the term insurance policies that are low cost with higher death benefit. That is what insurance really is and what you really need. For over four decades insurance was sold in India only as a tax saving tool giving you RETURNS. That is wrong. Insurance as it should be is risk protection. Any insurance that gives you returns is bound to be expensive as it is your money only that will be returned to you after being used, invested and eventually after insurance companies retain their pound of flesh to pay for the agents and their expenses. The returns you get is not comparable to other financial investments in the same situation although you will get a limited protection that is too costly. Eventually it is a contract that makes you poor while you are living so that you can die rich. Technically, such a contract is for those who can afford it and are rich. However agents will never sell to you the products that you need for what you can afford. First of all they themselves are more pressurised into selling to you what the company wants them to sell to you and not what you need. There is more profit in getting you to buy what you really do not need. You may pay your first and second premiums without much difficulty but as the policy continues, you are stuck and it is your lookout how to arrange the premiums to keep the policy in force and not loose everything. This is definitely not the lookout of the insurance company or the agent. The agent also has the attraction of selling you policies that give him higher first year commissions so he has the chance of attending a Million Dollar Round Table Conference in some fancy exotic locale, fully sponsored by his principal. For the principal to pay his commission as well as costs, they have to earn a really high amount from you and therefore the policy can never be a win-win situation for you. The insurance has been aggressively solicited to you. Therefore I have put forward the question 'Really?'. It has not been solicited with the intention of your necessity. Therefore please do take care to first take an economical policy that offers 100% protection and no returns. Avail of money back policies only when you can really afford it. In this respect I find LIC has products to suit all budgets. Our finance minister has rightly referred to them as 'The Jewel in the crown' in his last budget. It is now only left to the agent to solicit the right products you need. As far as the private sector insurance companies are concerned, they do have a floor limit on the annual premiums they receive to consider issuing you a policy. Their agents will not be interested if you are of the class of sub 10K annual premiums and they will try to aggressively sell to you what you do not need and cannot afford and over and above make you feel bad if you are not availing the policy they want to sell you. I have been an insurance agent for 3 years with a private sector company. While I found that for namesake they had products that could suit people, they constantly coaxed agents to sell products that they wanted sold. I am not against any of these companies. Insurance is something that you need and worldwide the insurance agency business is difficult as it is very difficult to sell a piece of paper against money. What I am totally against is the misrepresentation done by fellow agents who succeeded using doubtful means of inducement and I failed because I wanted to proceed by the book in a manner beneficial for the client. Therefore I left this business. However, I have no regret having done this business. I had to pass an exam to qualify and I learnt a lot from it. In case you feel you need my guidance anytime, my IM ID is in my profile. Anytime. You can leave your comments.

I have had to liberally use the words 'no' and 'not' in this post even though I am against the use of these highly negative words. The insurance business is such that it breeds on negative impulses. Therefore usage of these words are really unavoidable.

Inoperative / Dormant Bank Accounts in India

2008-08-31T18:56:00.004+05:30

Problems regarding banks having inoperative accounts has been recognised since a long time back and instructions have been given to banks as far back as 1977 that any deposit (read non-borrowing) that are totally inoperative (without any customer induced debit / credit) for over two years should be maintained in a separate ledger of inoperative or dormant accounts. In the interim, circulars were also issued informing banks that in absence of customer induced operation for more than a year, Banks should proactively follow up on the whereabouts of the customer or legal heirs in case the customer is dead and ascertain from them reasons for no transactions in the account. Crediting of a savings bank deposit interest is not a customer induced operation and debiting folio charges to current accounts or account maintenance charges is not a customer induced operation.
The Reserve Bank of India has issued a circular as recently as August 22, 2008 to all commercial banks regarding inoperative accounts. This circular is available in the Reserve Bank of India website and for your convenience I have linked it here for easy reference.

For the bank account to be considered as operative any of the following transactions should be considered. These are transactions at the instance of the account holder:-

Issue of cheque against available balance in the account.
Deposit of cheques / demand drafts into the account for clearing.
Deposit or withdrawal of cash from the account.
Issue of demand drafts by debit to the account.
Credits by ECS into the account. Account holder may receive credits from sources like dividend from shares, interest from bonds, deposits, debentures or other securities that may be credited directly to his account by the payer.
Credit of interest from any other deposits in force with the same bank or branch. In case customer has an active fixed deposit account with the bank from which interest is regularly credited to a savings bank account by customers' standing instruction, in the view of this author, this should be regarded as a customer induced credit. Payment of savings bank interest into the savings bank account would normally not be a customer induced credit.
Debits against standing instructions. In case standing instruction is given to debit amounts from the deposit account and pay to third parties by ECS mandate or to transfer to another account in the same bank (an example is a recurring deposit account in your name or family members' name or say even locker rentals), in the opinion of this author these too should be construed as customer induced debit. However, in case of lockers, your account would be debited once a year to pay the rental. It is mandatory for a locker holder to operate the safe deposit locker at least once in a year. After your last visit to the bank to operate the locker, you should again visit the bank within a year. If your locker operation is normal as above and your account is debited for payment of locker rental, then in the opinion of this author, this should be construed as a customer induced debit. It is better you operate your locker once a year between the renewal dates.

Even if the transactions are routed via net banking or by using ATM cards, they would be treated as customer induced transactions.

The important points in this notification issued by the Reserve Bank of India is that to avoid any frauds Bank has to proactively follow up the whereabouts of the customer. Inoperative or dormant accounts are susceptible to frauds by people who open accounts to use it for nefarious activities at a later date. However, there could also be genuine reasons why account remains inoperative. A person could have temporarily relocated due to change in job or gone abroad for a new job. This notification puts the onus of tracing the account holder on the bank and also conveying to the account holder to route transactions through the account. The most important point that benefits the customer is the payment of interest. In case a term deposit account matures and is unclaimed it would still continue to earn interest at savings bank rate. Bank will have to continue paying interest to a savings bank account even if placed in the inoperative ledger. Till now, banks were gladly avoiding paying the interest on such occasions and enjoying the money from these accounts free of charge. If the account is made operative again, 'nil' charges are levied for doing so. However, bank will have to follow the KYC norms as they would for opening a new account and ask you for your address proof and what work you do. Many banks had been classifying accounts with no operation for as low as six months as inoperative and not paying interest and in fact debiting charges for maintenance and reactivation. It is clear now that the banks cannot do this anymore until Reserve bank revises its norm allowing them to do so.

As pointed out earlier, there could be genuine reasons you may not be able to operate your account. You may be relocated temporarily for say one or two years in a new job or transferred at your current employment. You may take up an assignment abroad. In the latter case, it is mandatory for you to inform your bank and classify your account as Non Resident Ordinary (NRO) Account. If you are going out for a period of more than 6 months and do intend to come back in say 1 - 2 years, the simplest way to keep your account active is open a recurring deposit account for 3 years and leave sufficient balance for 3 years monthly installments. Give a standing instruction to debit your account the installments and also give an instruction to credit your account back at maturity. If you have to stay out longer, inform your whereabouts to the bank and again renew your recurring deposit with the same standing instructions. If you are abroad, maybe a foreign exchange remittance to your account will keep it active. This is not the only way. If you subscribe to Internet banking, you can credit your account by deposit of cheque at your temporary location and use the funds to pay your utility bills, credit card bills etc. You may have to pay a small price for this service, but it is worth the convenience. After all a regularly operating deposit account with sufficient credits and debits is important if you want to avail of loans etc. at a later date.

Please leave your comments to this post. In case you have any difficulty that may be specific to your case, maybe a discussion should help you sort out your difficulties.

'Know Your Customer' norms followed by Banks in India

2008-08-27T12:43:00.009+05:30

Opening a new bank account is a hassle these days especially for the retail customers. The customer is required to provide identity documents and address proofs etc. before the bank is able to open the account. For those who are rooted to a particular address, this is a one time formality. For people who go on changing their address or are in transferable jobs, this can really be cumbersome as the choice of address proof becomes very limited especially if you stay in rented homes. Please avoid getting annoyed at the banker for asking you to provide these details. The banks have to meticulously follow the procedures as they are answerable in case there is any problem in future regarding the accounts they open. There are a lot of financial frauds taking place these days that hurt the economy of the country. Perpetrators of terrorism and crime against society always try to use official channels to move tainted money. The Banks obviously are the first choice medium to move proceeds of crime, terror funds and also to propagate financial frauds. Therefore it is very important for the Banks to be well acquainted with their customers and collect proper proof of identification as well as address, usually residential address of an individual or office address for businesses along with the residential address of the owner(s) of the businesses.

Although I have frequently mentioned banks as the service provider to follow these norms, please note that these norms also have to be followed by other service providers (credit cards, insurance, mutual funds, investment agencies and brokers). Everywhere there is movement and parking of money involved, it is important for the service providers to follow the Know Your Customer (KYC) norms.

Usually, you have to provide the Bank with 2 RECENT color photographs along with a document that acts as a photo ID. Valid passport, Election Commission ID Card, Motor Vehicle Driving Licence (MDL), Income Tax PAN Card etc., are the most acceptable forms of identification that any bank will accept.

For your address proof, the Passport or the Election Commission ID Card or MDL is also good enough as long as it is valid. You can also provide the Bank with Electricity Bill, Gas Bill, Land Line Telephone Bill in your name, your employer's letter confirming your address if you are employed by a PSU or a reputed Limited Company, Leave and License Agreement (duly registered or stamped as per laws of the state), ration card, account statement of your existing bank showing your address. Normally, these documents should be recent (less than three months old) so that it can be assumed that they are still in effect in your name. Some banks may also ask you for a payee's account cheque issued from your existing bank that will be cleared before opening the account. This helps them in determining the authenticity of the signatures. To make themselves a little safe, some banks (especially the nationalised banks) insist on an introduction by an existing account holder of the same branch or another local branch of the same bank, having an ACTIVE account in operation since more than 6 months. They refuse to accept introduction from dormant or inoperative account holders. Most of the banks send chequebooks and ATM/debit cards to the address you provide them. This helps in satisfying them regarding authenticity of your address. A recent Income Tax scrutiny order is also an acceptable proof of address.

It is a requirement for Banks to collect your PAN Number to open an account in your name. However, if your income is below taxable limits without applying any deductions, applying for a PAN card is optional for you and you can alternatively file the declaration in form no. 60/61 available with the bank. However, you will have to give alternate identifying documents listed above. If it ever becomes mandatory for you to obtain an income tax PAN number, please provide the same to your bank to update your profile. During normal course you may place fixed deposits with the bank that will earn interest. If you are required to obtain a PAN number due to reasons of crossing the threshold limit of income, you are no longer eligible to furnish Form 15 G or 15 H for non deduction of Income Tax at Source. Banks have to deduct income tax at source from your interest if it exceeds a certain limit specified by the department from time to time. It is mandatory for Banks to furnish your PAN number while filing their returns with the department and they get into a very tight spot if they are unable to file their returns for want of your PAN number. It affects the tax credit to their other customers as department does not effect credits until the deductor has filed their return. They have a threshold to comply with. Furnishing your PAN number will ensure that even your taxes deducted are credited at the income tax department. Also note that furnishing a wrong PAN number (that includes indicating you do not have a PAN number even if you do have one) is punishable with a fine under the Income Tax Act.

For certain class of financial providers like mutual funds or stock brokers or share depositories, PAN Card issued by the Income Tax Department is mandatory irrespective of your income. In addition to this, you may be required to provide other identifying numbers depending on the quantum of your investments.

Please answer the questions the bankers ask you even if they may be of a personal nature regarding who live with you, the work you do or regarding your employers and what work you do for them. They need to ascertain for future what quantum of transactions you will be doing through your account. The banker has to follow the provisions of the Anti Money Laundering Act and for this act the onus is entirely on the bank to report certain transactions as suspicious transactions to the Reserve Bank of India and knowing what you do by asking a few questions that you may deem as invasive can possibly facilitate smooth running of your account in future as they would like to avoid inconvenience to you by unnecessarily reporting what could be your genuine transactions as suspicious. I will be discussing the features of Anti Money Laundering Act to be followed by various financial service providers in future posts.

Please be truthful in answering the questions asked. Avoid creating impression while answering these questions. If you try to build an exaggerated impression, you may get cornered with a request to place moneys in certain investment products and declining this request is an uncomfortable start to your relationship with the bank.

Business accounts may be required to furnish their Sales Tax Registration / Income Tax Returns /Service Tax Registration etc. while opening the account. Accounts will be opened even without immediate availability of these documents, but for your convenience, please provide your bank with these documents in due course as soon as you obtain any or all of them. This helps the Bank in complying with provisions of the Anti Money Laundering Act. If you are registered with sales tax, obviously you would be having a turnover of transactions to match. Paying your sales tax through your bank indicates that transactions you have done in your account are genuine when corelated with your tax payment.

Now that you have opened your account, please enjoy the services the bank offers you. Remember that you must have regular customer induced credits or debits (net banking / atm channels are also acceptable modes to induce credits / debits to your account ) to continue classifying your account as active. Inoperative or dormant accounts need to provide identity proof and address proof again to allow debits. A visit once in a way to the bank for some service (depositing a cheque, collecting a demand draft) at least helps if you have to sign for the service. The banker is assured of your existence. In case you regularly fund a savings bank account, please also make a withdrawal occasionally. Withdrawal by means of signing proves that you are indeed alive and this is what the banker has to verify given the fact that they have to pay interest to live persons.

If you establish a borrowing relationship with your banker they will regularly verify your details and standing and they are entitled to receive from you your current documents and even financial statements as long as a lender - debtor relationship exists. Financial service providers also use courier services rather than regular mail to send you correspondence. Every year they will definitely send you a couple of mailers through local couriers as they get an acknowledgement of delivery of mail to the address for their records. The only problem arises if both husband and wife are working and children go to school. Chances are that the courier delivery agents will always be at your doorsteps when no one is at home. It is very likely you would have provided your home address for individual accounts. Therefore you must ask banks to note down what time you are usually available to accept courier deliveries. This way you can be saved of any inconvenience as you are likely to receive cheque books, statements (even though you may opt for email statements) and even income tax deduction at source certificates by courier if you place any term deposits.

There will be many more posts I will make in this blog regarding banking, insurance and other financial services. Please do subscribe to the feeds by clicking the appropriate links.

Free Credit Period for Credit Cards issued in India

2008-08-26T19:51:00.008+05:30

Recently I got a call from my business associate telling me that his credit card issuer had all of a sudden advanced the due date of his statement by 4 days keeping the billing cycle unchanged. He was under the impression that Reserve Bank of India had stipulated that a card holder should get at least 20 days to pay his dues as per the statement and now this is 16 days. As he was not aware of this his due date lapsed and he was levied a penalty of Rs.400 for an outstanding amount of little over Rs.600 and he was levied interest as well right from the day he charged the card till the date he paid the dues. He was so upset that he wanted to approach the Reserve Bank of India and the Consumer redressal forums.

At his behest I checked up from the Reserve Bank of India Website and learnt that Banks have to give at least a fortnight to the cardholder to clear his dues. A fortnight is 2 weeks or 14 days. Therefore bank was well within its rights to reduce the time limit for paying the dues. What remains to be seen is whether adequate notice had been given to the cardholder regarding the change. While issuing the card the card issuer may have specified an interest free credit of 20-50 days provided the full outstanding is paid before due date. The action of pre poning the due date is change in terms and conditions as there is a reduction in interest free period. Now it is 16 days to 46 days instead of 20 to 50 days. Even if the card issuer has got acceptance from the card holder that issuer can make changes without any notice, the Reserve Bank of India rules state that card issuer has to give sufficient notice in writing of any changes in terms and conditions and charges that can adversely affect the card holder. The Banks usually show the card holders their signed consent if matter goes into dispute but what the card holders usually do not know because of immense pressure on them is that the law of the land prevails over signed terms and conditions and card issuer has to serve adequate notice as that is the law of the land even if the card holders have waived this condition in the application signed by them. Some of the card issuers will innocuously display in their statements the changes in terms and conditions in such a way that the card holder will never be aware of it and they are able to boost their revenues by means of exorbitant charges. If they bill a thousand card holders the exorbitant charges, chances are that only say a measly 20-30 card holders who really look at their statements will dispute the charges. They will reverse the charges as an obligation to those who complain but they get unjustifiably enriched by those who do not.

The only suggestions I could offer my friend and what even you should follow in case you are faced with the same situation are:-

Read the statements carefully especially if it indicates any changes in rates or terms and conditions. Read all printed matter with the billing mailers thoroughly and check interest calculations. Card holder has the right to demand the interest calculations as per the law.
Avoid discarding mails especially from your card issuer as a junk mail and trashing them without reading. Same applies for emails also from your card issuer. Do not trash them. Read them carefully. Card issuers usually prefer to trick you by innocuous ways of communication so that you make a mistake by your ignorance and get charged exorbitantly to boost their revenues.
Thirdly, the amount involved is too small to pursue with consumer courts or even the Banking Ombudsman. Usually if you do keep records of justifiable expenses you make in following up the matter with the bank and costs for approaching the forums, the Banking Ombudsman awards payment of these expenses if the matter is decided in your favour. Remember that Credit Card disputes is the only Banking service for which the Banking Ombudsman has the jurisdiction to make an award for mental agony caused and you can approach the Banking Ombudsman nearest to the place of your residence irrespective of where the processing office of the card issuer is located. Approach only if need arises and Bank frequently gives you trouble in late credits for no fault of yours and levy of exorbitant charges.
Even if the Banks are on the wrong side and they know it particularly in your case, do note that they have the financial resources to pursue matters in appeal right through to the Supreme Court. There are chances that they may enrol or offer to enrol your lawyer on their panel of lawyers and assure them lucrative assignments like property search, examining documents or drawing agreements so that your lawyer bound to refrain from pursuing your case if he is on their panel. Instead of taking the dispute further, even a telephone banking officer processes requests to reverse such exorbitant charges if you speak with them using methods of adequate reasoning. They will make it look like an obligation. Put aside ego as this is the best way to resolve the issue even if Bank is at fault. Why go through so many procedures that cost time and money.

I am using credit cards since 28 years. In fact the Diners Club Credit Card is my first credit card that was approved for me during the days it was run privately by Shyam Sunder Agarwal and his wife Perveez Agarwal. I use it till today even after it has changed hands to Citibank and this is the only credit card I used extensively and rarely had problems, all insignificant and easily sorted out. People are surprised at this. I hope that Citibank's services will not deteriorate for me or any of their card holders.

I will continue with more posts in this blog about more financial services. Please keep on visiting this blog for credit card related issues. You can comment with questions also. Being a seasoned credit card user, many people come to me for consultations on how to solve their problems and worries.

Financial services: A necessary evil?

2008-08-26T15:45:00.008+05:30

SI Financials is a project of Sunil Chowdhary, proprietor of Stone International (SI). Stone International will shortly be completing three decades in the natural stone business from India. These three decades have been spent on providing value to customers initially by selling quality products and gradually extending the scope of activities to selling services that most businesses prefer to outsource professionally to service providers. We managed to grow phenomenally as service providers at a much faster rate in a shorter span of time than the growth we witnessed in just buying and selling products. However, our success in providing services is mainly due to the experience gained by us through nearly three decades of international trade.

For any business or individual the main driving force behind success is money. Money and finance have become the necessary fuel for any activity. You need money and finances to earn more money. Even a very simple activity of earning salary or wages requires money. A person who offers his/her services for a salary or wage needs money and finances to keep himself/herself going and be able to continue working to earn more money.

The purpose of this blog is purely informative. The products and services offered by Stone International can be viewed in detail on the web site http://www.stoneint.in/ . This blog has been created to suggest ways and means of using financial services judiciously in your quest to multiply your money and finances as well as retaining it.

Those of you who fly regularly will realize that carrying a full load of fuel does not make the aircraft cover the longest range that it is designed to fly. Fuel is weight. To carry weight the aircraft needs fuel. In the aviation industry there is an adage ‘it costs fuel to carry fuel’. Similarly, in your quest to earn more money, you have to spend money. The ability to spend money will eventually be created from your ability to generate money as well as your ability to systematically retain it to spend as and when needed without letting it lose its capability of generating more money To fly an aircraft requires very complex calculations on the amount of fuel to carry, the number of passengers and weight of cargo and moreover all these parameters depend on the external calculation. It is the same situation for running a business or an individual life. The more complex the business or living the more complex is the activity of earning, using, spending (including statutory payments like taxes) and retaining your money. At every stage the money moves or is being retained, it may cost money to move money or it may cost money to retain money. Our goal is to ensure that it costs us the minimum at each stage and possibly continue to generate more money while being retained.

When you drive your car, you are inadvertently making calculations on running it whether your calculations are right or wrong. If the aviation industry makes wrong calculations while operating their aircrafts it will cost lives of people availing their services as well as money. Large and complex businesses can collapse totally if wrong calculations are made. They can be compared to the aviation industry. The financial life of an individual or a small business is akin to running a car. It requires calculations at all stages and will most probably still run whether right or wrong. The very purpose of putting up this blog is to guide visitors who are individuals or running small businesses to calculate, use and retain their finances wisely at a minimum cost or better still, maybe profit out of such calculations.

The contents of this blog have been written keeping in mind individuals and small businesses in India. However, outside India this blog will be useful for non resident Indians as well as foreigners who would like to learn more about the financial situation of average Indian citizens and businesses. Some pages may be useful to foreigners in similar situations in their own countries. Do keep in mind that most of the laws referred to are laws prevalent in India and one can use the contents of this blog to make a comparison.

In India, following are the financial services used by individuals and small businesses during course of their existence. Our purpose is to guide the visitors to optimize the use of these services and to settle disputes in the best possible ways with service providers rendering these services.

Banking Services
Insurance Services:
Investment Services (Including Mutual Funds and Brokerage Services for securities):-

Individuals and small businessmen need to use the above mentioned financial services regularly. However, due to the vast resources and financial clout that most of these service providers enjoy, the interests of the small consumers is seldom looked after by anyone be it the executive regulators, judiciary or the bureaucracy. Most of the financial service providers get away only due to the inability of consumers to pursue matters in taking them to task mainly because the size of transactions are small. Some financial services providers deliberately make errors for small or marginal values that may skip detection. In case detected by their customer they adjust. In case it skips detection they profit. Rules and Regulations exist only on paper but are rarely put to practice. I would like to extend as much help as I can to such hapless consumers in resolving disputes amicably with the financial service providers using to the fullest extent available legal or procedural means. This tantamounts to getting what exists on paper into action. However, I maintain distance from anyone whom I feel is a wilfull defaulter trying to involve me in settling disputes with financial service providers to unjustifiably enrichen himself / herself.

Large businesses and corporates having a huge quantum of transactions have very little use of my services as they have enough resources and clout to deal with financial sevice providers. However, I welcome suggestions from individuals running large businesses or working with corporates to leave their valuable comments and suggestions as they would be useful to the small businesses and individual. I can possibly help people working with corporates on an individual basis.

Whatever I post in this blog is based on Indian conditions. However, in addition to Indian visitors leaving their most valued comments, I would appreciate it very much if visitors from other geographic locations will also leave comments and throw some light on similar situations in their countries. These posts will definitely transform into discussions.

In case you wish to contact me, you can use the IM option in my profile or other options in the Contact page of my business website. You could send in your questions or details of your problems and I could transform it into a meaningful solution through further posts / discussions.

Creative Commons License

2008-08-25T13:05:00.001+05:30

Please refer to the Creative Commons License below to know the terms of how the posts made by this author may be used. Usage of any or all these posts have some restrictions and conditions as detailed in the attribution.

This work is licensed under a Creative Commons Attribution-Share Alike 2.5 India License.

Privacy Policy

2008-08-24T22:48:00.012+05:30

This blog is controlled by Sunil Diwanchand Chowdhary, the sole proprietor of Stone International. Therefore, the Privacy Policy displayed in the website of Stone International http://www.stoneint.in also applies to this blog. Please read the Privacy Policy of Stone International available at http://www.stoneint.in/privacy.htm to know how Stone International treats your personal information and other information collected from you through this blog or the main website. For your convenience, some important points relating to the privacy policy specifically for this blog are also listed below:-
Personal Information is that information about you which identifies you individually such as your name, address, telephone number, fax number, email id etc. No automatic means are used to collect personal information that identifies you personally. Personal information collected from you are voluntarily.submitted by you manually. These are submitted by you mainly through our feedback form in our main website available at http://www.stoneint/contact.htm and any submission of personal data through that feedback form or other contact options is governed by the Privacy Policy displayed in that site. We welcome you to submit the feedback form if you have any questions you would like us to post our comments above or you could use any contact options in that page if you would like to contribute any posts that we may display with whatever identification you allow us to display or simply as a guest post. Please refer to our Privacy Policy to know how we use your personal information. To delete any post that you have authorised us to display with your name, please send an email requesting deletion of the post or your name from the post.

Information Collected Automatically through this blog:-

As this blog is hosted on Blogger ( http://www.blogger.com/ ) that is controlled by Google (http://www.google.com/) you are requested to read the privacy policies displayed by these sites as they collect a your personal information whenever you log in to their services with your Google Account or Open ID Account). Refer to Google Privacy Policy to learn how Google uses Personal Information that you submit to them while using their services and your options to opt out.

Google does not share your Personal Information with us. If you authorise Google to share your personal information with us, our Privacy Policy posted at http://www.stoneint.in/privacy.htm will apply to such data.

We have arranged with Google through their Adsense program to use space designated by Blogger for serving third party advertisements on this blog. Google uses cookies including the DoubleClick DART cookie to serve ads on this blog. Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy polic y. Please visit DoubleCick DART Cookie FAQ site to learn more about various cookies and their information collection mechanism (technology) as well as instructions on how to opt out of such cookies.

Terms of Use

2008-08-24T22:43:00.006+05:30

It is mandatory for all websites to display Terms of Use and a Privacy Policy. Therefore, I am posting these important documents as the initial posts in this blog and have titled this post as Terms of Use. The next post will be the Privacy Policy before we start.

First, an introduction. You may have already viewed my profile. There are chances that you have landed in this blog through my business website http://www.stoneint.in/ that is under my business name 'Stone International', my sole proprietorship concern. This blog is controlled by me through my proprietorship concern Stone International. Therefore the Terms of Use displayed at http://www.stoneint.in/terms.htm is also applicable to this blog. In addition to the Terms of Use in the Stone International website, there are specific terms of use applicable to this blog:-

This blog is hosted by Blogger. Therefore you are bound by the Blogger Terms of Service displayed on their website. As Blogger is owned by Google, you are additionally bound by Google Terms of Service displayed on their website.
You can post your comments to posts to which readers may comment. To post your comment you may log in through your Google Account, Blogger Account or Open ID account. You may also be bound by the Terms of Service (by whatever name called) of your OpenID host.
I despise profanity, obscenity and remarks having racial implications. In case any comments posted by visitors contain profanity, obscenity or racial remarks, I will simply delete them and exclude people posting such comments from my list of friends.
In case I feel the need to moderate any comments and change them for clarity, I will do it.

Third party advertisements are served on this blog in spaces designated by Blogger through Google and its Adsense program. In case you click on the links or advertisements placed by Third party Advertisers, you will be leaving our blog and entering a Third Party web site. Please read the Terms of Use and Privacy Policy displayed on the third party web site. Our relationship is with the Third Party Advertising service provider Google and Google has contracted with the targetted third party web site or its owners to serve their ads in this blog. The links displayed on our website are on an 'as is what is basis' and should not be construed as an endorsement by Stone International and / or its proprietor Sunil Chowdhary of the advertiser(s) or their product(s) and / or services(s). You are under no obligation to make any purchases from the third party websites. In case you opt for carrying out financial transactions with the advertisers or any third party websites linked through us, it will be solely at your risk. Due to legal compulsion, I am compelled by law to deviate from my policy and use these highly negative words.

These Terms of Use may be revised and displayed on this blog without any notice to you and such revision will be deemed to have been read by you.