Tuesday, 29 May 2007

Indian Stocks Market: India joins the trillion dollar GDP club

Indian Stocks Market: India joins the trillion dollar GDP club

India rejects greenhouse gas limits

India yesterday said it will reject the proposals to limit greenhouse gas emissions at the upcoming G-8 summit meeting in Germany as it will slow the pace of the country's booming economy.

"Legally mandated measures for reducing greenhouse gas emissions are likely to have significant adverse impacts on GDP growth of developing countries, including India," Environment Ministry Secretary Pradipto Ghosh told reporters here.

He said this in turn would have "serious implications for our poverty alleviation programmes".

Germany, which will host the summit from June 6 to June 8, has called for a statement limiting worlwide temperature rise this century to 2 degree Celsius and cuts to global greenhouse emissions to 50 per cent below 1990 levels by 2050.

Maintaining that legal mandates on greehouse gas mitigation in any form would impact the country's growth, Ghosh said "this is not the path we wish to pursue."

"We are a responsible country and take a variety of sustainable projects to ensure energy efficiency at all levels," he said.

Chances of a consensus on the issue during the summit are remote with the US rejecting the idea of mandatory emission targets and the call for G-8 nations to raise energy efficiency.

Thursday, 24 May 2007

Global trade system at risk, India warns

India warned the World Trade Organisation (WTO) that the entire system of global trade would always remain at risk as the developed countries were still not willing to fulfil their commitments to correct the imbalance in trade.

In his opening statement at WTO's Trade Policy Review meeting for India being held in Geneva, Commerce Secretary G. K. Pillai said: "India is extremely concerned at the slow pace of [WTO] negotiations. While the suspended [Doha Round] talks have resumed, the political will on the part of developed countries is still not evident.''

Legal pros may soon work in UK

Legal and accounting professionals in India can look forward to practising in the UK in return for ceding some ground to British professionals here. Also, talks to lower the entry barriers for UK’s legal and financial services to India is set to go in full swing.

Discussions between India and UK towards a bilateral trade deal on legal and financial services have gathered momentum with both the countries setting up a framework to remove all the speed breakers that UK firms encounter here.

The task force would discuss issues of company law, accounting and auditing, company secretaryship, corporate governance, investor protection and competition.
Corporate affairs minister Prem Chand Gupta, who met a visiting delegation of 14 experts and policy makers from UK led by lord mayor of London Alderman John Stuttard on Monday, told them that any opening up of these sectors would be on a reciprocal basis.

Tuesday, 22 May 2007

RBI Guidelines on Operation of Credit Cards: A Welcome Move

In light of ever-increasing incidents of credit card frauds and exploitation by one-sided terms of issuing banks RBI came up with guidelines on Credit Cards. 1 This guideline touches upon the touch upon issues such as credit limit, interest rate, wrong billing, sharing of credit information and fair practices, and code of conduct for the issuers of credit cards. 2

Henceforth, credit card issuers will have to stick to these norms, which, among other things, deal with issuance of additional cards, printing of annual interest rates, enhancement of credit limits, collection of debts, etc. Second part of the circular stipulates guidelines deals with the fair practice code for the issuance of the credit cards to the consumers. This part of the guideline directs the banks to follow the norms laid down by the IBA (Indian Bank Association) in the Fair Practice Code for credit card operation.

It also obligates the issuing bank to dispatch of the bills in appropriate time. So the consumer gets sufficient time for the payment of the bill, Moreover, the bank should also quote the percentage rate at which the interest will be charged, including the method for the calculation of the interest with few examples.

Banks must be extremely careful for the appointment of the service providers, since the bank has to outsource the various credit card operations. The agents of the banks have to follow the code of conduct formulated by the Indian Banks Association. The guidelines provided by the RBI suggest the banks to evolve the system for the random checks of the agents too. 3

The next important direction given by RBI is the setup of the mechanism for the redressal of the grievances of the consumers. It also says that the complaint must be preferred within 60 days time period. The website of the banks must have the complete detail of the redressal grievance mechanism. The guideline also direct for the compensation if the complains have not been satisfactory resorted. The compensation will be for the time loss, financial loss, harassment, as well as the mental agony, which the person has suffered.

The Reserve Bank of India has reserved the right to impose any penalty on a bank under the provisions of Banking Regulation Act, 1949 4, Reserve Bank of India Act, 1934 & respectively for the violation of any of the provisions issued under these guidelines 5. In toto it is submitted that, the RBI guidelines on credit cards is an important step towards a stronger consumer protection regimes.

Credit card Frauds - Where Consumer Needs to be Cautious?

Corporate or financial crimes in India with the help of technology are not very old in India. It was as early as in 2003, that the, Central Bureau of Investigation undertook its first cyber-crime conviction under Sections 418, 419 and 420 of the Indian Penal Code. The convicted engineer was arrested for defrauding an American national by misusing her credit card on the Net and was released on probation of one year after paying a personal bond of Rs 20,000 as well as Rs 20,000 as surety . Therefore the need of the hour is the effective legislation in this field, to carve down the criminals involved in these frauds.

Nevertheless, consumer awareness and caution are the buzzwords for combating crime related to credit cards. There are some precautionary measures that the Consumers have to take for Credit Cards safe usage: -

· On receipt of a new card ensure that it is in sealed condition and that the seal is not tampered.

· Monitor your account regularly either on the Internet or from call centers.

· Also subscribe to email and mobile alerts to keep track of card usage. Ensure that the card is swiped in your presence wherever the card is presented.

· Whenever you travel abroad keep track of your transactions.

· Sign on the back of your new card as soon as you receive it.

· Preserve the card account numbers and the personal identification number in a confidential place.

· Periodically check your cards to ensure that none are missing.

· Destroy and dispose all documents that mention the card number, such as copies of receipts, airline tickets, travel itineraries etc.

· Memorize your card's PIN number

· Personal account information should never be shared with anyone unless payment for the purchase is being done from that account

· Cancel all inactive accounts

· Don't give out your personal information online without checking whom you're giving it to.

· When using your credit card online, make sure that the Web page is secure. Secure pages start with "https:// instead of http:".

· Do not download software from suspect Websites they often send a spy ware program your way that looks for personal info on your PC and sends it out to the delinquents on the Net.

· Get an antivirus program and firewall. Beware of e-mail attachments from people you don't know.

· Always review your credit card and bank statements carefully for any discrepancies. Alert the bank as soon as you find you've been billed for something you did not buy.

· Don't keep your personal information in your work computer. These files may be accessible to other employees on the network.

· When you use your card at an ATM, enter your PIN in such a way that no one can easily memorize your keystrokes.

· Your PIN and account number from a discarded receipt could make you vulnerable to credit-card fraud. Also, don't throw out your credit-card statement, receipts or carbons without first shredding them.

· Never give your credit-card number over the telephone unless you initiated the call.

· Ignore any credit-card offer that requires you to spend money up-front or fails to disclose the identity of the card issuer.

· Make certain you get your card back after you make a purchase. Also, make sure that you personally rip up any voided or cancelled sales slips.

· Always keep a list of your credit cards, credit-card numbers and toll-free numbers in case your card is stolen or lost.

· Check your monthly statement to make certain all charges are your own, and immediately notify the card issuer of any errors or unauthorized charges.

If you read the fine print, insurance cover is only for a lost card and it gets activated only after you have reported your loss of card. It does not cover frauds, aforementioned. Who will pay for the money that has been defrauded is still a legal minefield open to speculation and litigation. Thus, prevention is the only answer.

Credit Cards - Not consumer-friendly any more?

Indian economy is greatly aided by the introduction of modern tools of information technology. There have been path-breaking changes in the banking sector, especially in the field of e banking. Gone are those days when a person had to keep his chequebooks safely under lock and key. We have come a long way to an era of plastic money. Instead of cash, the wallet is heavily loaded with debit and credit cards from different banks. These cards proved to be 'shoppers paradise' and 'ultra-convenient' as the holders were no more required to carry cash and banks started lending money with modest card procuring formalities.

Nevertheless, as a famous proverb goes that 'every coin has two faces', it also holds water for the credit cards. In spite of giving such a convenience to the consumer, credit cards have known to bring grief, insecurity and an unparallel sense of financial vulnerability to many customers.

The recent credit card frauds that were uncovered in Jaipur, Agra and Mumbai 1 clearly support the above statement that Credit Cards tend to be abused. Recently, there has been a sharp rise of online credit card frauds 2 as technology is exploited to develop new innovative techniques to commit fraud. The most common type of modern day credit card frauds include 3

(i) Production of fake and counterfeit cards.
(ii) Skimming - Process of copying genuine card data on another magnetic strip.
(iii) Phishing - Attempt to fradulently acquire sensitive information, such as usernames, passwords and credit cards details, by masquerading as a trustworthy entity in an electronic communication
(iv) Site Cloning - Creation of an identical, but false website as similar to the bank
(v) Stolen Card Fraud - When a card holder loses or has their credit card stolen, it is possible for the thief to make unauthorized purchases on that card up until the card is cancelled
(vi) Account Takeover Fraud - Fraud perpetrators call in and impersonate actual cardholders using stolen personal information. They have the address and other information of the cardholder changed to an address they control. Additional cards and possibly PIN mailers are requested and issued to the new address and used by the fraudsters to make purchases and/or obtain cash advances. Sometimes the fraudster will attempt to add themselves or an alias that they control as an authorized user to the account in order to make it easier to commit the fraud.

Technology today enables fake cards to be created from scratch by obtaining personal data about an individual and the use of requisite equipment. This method requires a high degree of skill as the cards offered by banks come with a lot of security features making it difficult to replicate the full mechanism. The offender also uses this fake credit card money for the other services which are available to him through that credit card, as for example, for shopping, buying online air tickets etc.

In April 2006, the case came up where a 26-year-old Mumbai executive keyed in her credit card number and the three-digit security code on the e-booking site of an airline. She bought a ticket for Bangalore. In July, she was shocked to find an Rs 20,000 additional credit drawn from her account. 'Two tickets from the same airline were booked on two different days in June using my card,' she says. The first was a Dwarka-Mumbai ticket for Rs 6,000, and the other, a Delhi-Dubai one for Rs 14,000. She did not get a response from her card company till August. Then she approached the police to file an FIR. But they told her that they did not know what a credit card was. Thereafter, she went to the cyber crime cell, which in turn asked her to first lodge an FIR with the police. She got a cyber crime officer to speak to the police and finally got her complaint registered. But till now the case has not been solved, by the cyber crime or by the police. 4

Such instances and many more to be quoted in this article take us to the logical conclusion that credit cards are credit cards are making consumers more prone to financial vulnerability in the hands of notorious market elements.

Another issue, is the usurious clauses and unfair trade practices in the typical standard-form contracts adopted by Credit Card issuers. These standard form clauses are so negatively worded against the consumers, that most consumers have had bitter experiences.

Monday, 21 May 2007

India, Bangladesh need extradition treaty

India and Bangladesh need to build trust and cooperation to counter terrorism in both the countries, a senior Indian diplomat said today.

''We need to build trust and co-operation including common initiative to counter terrorism and intelligence sharing,'' Indian High Commissioner to Bangladesh, Pinak Ranjan Chakravarty, told.

Chakravarty, who is on an official visit to Shillong said, ''India wishes to see Bangladesh as a prosperous country and that can happen only if both the countries mutually agree to extend cooperation and understanding.''

He stressed on the necessity of developing infrastructure and connectivity. ''If Bangladesh prospers, cross-border movement, whether it is influx or crime will come down,'' he asserted.

''New Delhi has been suggesting Dhaka to have extradition treaty and mutual legal assistance,'' he said.

The caretaker government of Bangladesh had been helping India in tracking the insurgents. ''It (government) acted against the Indian-based insurgents in Bangladesh and few of the Bodo militants were arrested from Sherpur district (Bangladesh)'', Chakravarty said.

He stressed on the need for extradition treaty. ''In absence of this treaty, both the countries find difficult to get back criminals. It is time that both New Delhi and Dhaka sign an extradition pact to ensure justice,'' Chakravarty suggested.

He informed that India would again request Bangladesh to handover Anup Chetia, a key-ULFA leader. Chetia, arrested in Dhaka by the previous government on charges of illegal stay and possessing forged documents, was released from jail on completion of his term in February 2003.

Sunday, 20 May 2007

India, US still engaged on nuclear deal

NEW DELHI: India remains engaged in serious talks with the United States over a nuclear cooperation deal, Prime Minister Manmohan Singh said, even though a senior US official in the negotiations has put off a visit.

"We are in serious negotiations with the USA," Singh told reporters after a ceremony to swear in a cabinet minister, when asked if he was worried that the much touted deal, first announced in July 2005, could still fall through.

The civil nuclear pact has hit serious obstacles. Critics, including lawmakers in both countries, complain their side has given too much and gotten too little in return.

Asked whether he was still optimistic about the deal, Singh said he was "hopeful" differences would be sorted out.

US Undersecretary of State Nicholas Burns was expected in New Delhi in the second half of May to iron out serious differences over the deal that would give India access to US nuclear fuel and reactors for the first time in 30 years.

But on Wednesday, the US State Department said that while Burns could still visit India, "he's got nothing scheduled for now".

Adding to the uncertainty, India's foreign ministry said on Thursday no date had been finalised for the Burns visit.

Doubts about his trip has cooled enthusiasm about a possible breakthrough in negotiations, hailed as a strong foundation for booming economic and strategic ties between the world's most populous democracies.

The two sides have been unable to agree on a formal bilateral cooperation agreement, which is supposed to implement a political deal struck in 2005.

One key sticking point is that the Indians have objected to a provision asserting the United States has the legal mandate to halt nuclear cooperation if India - already armed with atomic weapons - tests a nuclear device.

Another is the US refusal to give New Delhi blanket approval for reprocessing spent fuel with American components.

Thursday, 17 May 2007

Govt wants Constitution Bench to hear OBC row

The central government today made a fresh plea before the Supreme Court for referring to a Constitution Bench the issue of 27% OBC quota in elite educational institutions contending that the two-member bench cannot adjudicate the matter.

As a bench comprising Justices Arijit Pasayat and Justice L K Panta, resumed hearing in the matter, Solicitor General G Vahanvati pleaded that a two-judge-bench cannot adjudicate the matter as it involved a substantive question of Constitutional law.

The bench made it clear that it was not averse to referring the matter to a Constitution Bench. However, it wondered whether the matter required reference to a Constitution Bench as many acts are routinely assailed before the courts.

In other words, the courts pointed out, that many statutory laws were challenged for their Constitutional validity but were not necessarily referred to the Constitution Bench