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Vol. XIII, Issue I

January 2012

1/2012 Catch us also on


e l b a l Avai




Infant Formulas:

Glycerine: Keeps Away Winter Dryness

Weaning Babies 10 brands of Infant Food tested


15 brands of Glycerine Soaps and Face Wash User tested PAGE 36

Ceiling Fans: Revolving Faster 10 brands of 56" Ceiling Fans tested


Forging Ahead With Virtual Banking

Telecom Ups and Downs - 2011 PAGE 31

20 Banks Surveyed PAGE 22


Far-reaching Changes - 2011


Expediting Insurance Claims



Dr. Premlata PAGE 13


Heal Thyself!



Voice News


Readers Page


Kitchen remedies for all diseases


Editor: Roopa Vajpeyi Chief Editor Prof PK Ghosh Mg. Editor Prof Sri Ram Khanna COO Ashim Sanyal Corporate Head Sisir Ghosh

EDITORIAL English Ann Ancy Jaimon Hindi Keertana Sharma Priyanka Mishra Online Manjari Khare Sapna Saini Food Desk Ashok Kanchan Finance Desk Sunil Prabhakar IT Desk Hemant Upadhyay

TECHNICAL H Wadhwa KC Choudhary Mohd. Azim Khan Sheeba Parveen LEGAL HK Awasthi Mukta Kamboj ACCOUNTS Monender Singh Sanjay Kumar

MARKETING Pranay Sheth Ashutosh Massey SUBSCRIPTION Ashu Bhagat Faraz Ahmed ADMIN Ramanjeet Kaur Govind Singh OFFICE SUPPORT Anna Durai M. Shivaneshan

Printed at Pearl Printers, B-186, Okhla Industrial Area Phase I, New Delhi-110020 For Gifts & Subscription-related enquiries, contact: For legal queries: Editor’s note: Consumer VOICE does not accept any corporate advertisements or advertorials for the magazine. This has been the magazine’s policy since the first issue was published in 1997 and it keeps our reportage unbiased and nonpartisan. Consumer VOICE regularly publishes laboratory results of product tests. These products are purchased from the retail market before being sent to an independent NABL-accredited laboratory for testing.

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The views expressed in the magazine do not necessarily reflect those of the organisation, rather they are to be deemed as personal opinion of the author(s) concerned. © All rights reserved. No article, story, test report can be reproduced from this magazine, without a written permission from the Editor. Material, test report, data from Consumer VOICE cannot be used for any marketing or promotional purposes. All disputes are subject to the exclusive jurisdiction of competent courts in Delhi/New Delhi only. Libel Insurance: The Consumer VOICE libel insurance policy extends to include typesetters, printers, distributors, co-publishers, and newspaper advertisements by VOICE.

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From the Finance Desk

Far-reaching Changes - 2011 A

democracy encourages openness and permits dissent, but perennial disarray and disruption is sacrilegious. What else one can say when an important landmark economic reform has to be suspended due to intimidation of midterm election that too by the Govt’s own allies. Yes, we are talking about resumption of much delayed reform process and opening up 51% FDI in multiple products – retail (we already have 100% FDI in single brand retail) which is now suspended. Who’s who of corporate sector, economist, protagonist of liberal policies, are critical of the govt for suspending FDI- Retail classifying it as highly regressive move. Currently 32 bills are pending in the winter session of parliament, many of which are of far greater consequence and importance than FDI in retail. Before we enter 2012, a revisit is called for the extraordinary, fastpace reforms that the Government appointed regulators initiated in BFSI sector i.e. Banking, Financial Services, Insurance, Mutual Funds and Stock Market. Banking Deregulation of Savings Bank Deposit Interest Rate

No more pre-payment charges on home loan Another news for consumers is for the house loan borrowers. Those who are interested to repay entire loan in advance they could do so without paying any pre-payment charges on loan taken with floating rate of interest option. Additionally State Bank of India even allowed fixed interest loan borrowers to take

"Currently 32 bills are pending in the winter session of parliament, many of which are of far greater consequence and importance than FDI in retail." advantage and repay home loan without paying any penalty. Financial Services Most frightening financial term for every one of us is price rise, particularly food inflation. We have seen prices of essentials commodities skyrocketing and making life of average house is difficult. Inflation Indian consumers after suffering from high inflation of more than 10%, week after week, received a respite on food inflation for the first time in 3-1/2 year to 6.60%. Prices of protein-rich items like eggs, meat and fish fell by more than 1% in addition to vegetable prices and particularly all season potatoes leading the fall by more than 4%. Consumers must thank RBI, as banking regulators, effort to tame the high inflation even at the cost of supply side spook that has now led to food inflation collapse. It was indeed a Herculean task as the headline inflation has stayed stubbornly above 9 percent for the 11th month in October, despite 13 times rate increases by the RBI since March 2010. There are seasonal advantages




There is good news for saving bank accountant holders from October 25, 2011 onwards. Reserve Bank of India allowed banks to increase interest rate if they so wish and

consumer may look for those banks that offer them higher interest rates. In exercise of the powers conferred by Section 35 A of the Banking Regulation Act, 1949 and in partial modification of its directive RPCD. CO.RRB.BC.No.67/03.05.33/201011 dated May 3, 2011, the Reserve Bank of India, being satisfied that it is necessary and expedient in public interest, directs that banks are free to determine their savings bank deposit interest rate for resident Indians only with immediate effect subject to two conditions. First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit. Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.

From the Finance tch Desk a ct W u d Pro also which contribute in declining trend in food inflation. RBI in December will review policy as inflation is bowing to its dictat and chances are RBI may pause - any further increase in repo and reverse repo rate, Jan 2012 could see cut in borrowing and lending rates. The RBI also acknowledges that taming food inflation also needs supply-side responses and had indicated that the government needed to do more to smoothen supply-side responses. Interest rate on small saving increased. As per notification of the finance ministry from December 1, 2011 the rate of interest on Public Provident Fund (PPF) scheme in the current financial year, till March 2012, would be 8.6%, up from 8%. The government has also allowed higher limit of ` 1 lakh per year in PPF investments under sec 80 C of the Income tax act 1961. Until now only `70,000 is invested under PPF. In case of 5-year national savings certificate (NSC) the rate of interest has also been improved from 8% to 8.4%, which also benefited small savings account holders in post offices who will now get 4% interest, up from 3.5%.


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Interest on monthly investment schemes (MIS) has also been increased to 8.2% from 8%. There is another important change that investors need to be mindful about. Earlier interest rates in all small savings schemes were fixed for the tenure of the investment. This is changing now: From December 1, the rates of interest on these instruments will be linked to what one can earn in the government bonds, also called Gilts, of equivalent maturity. Which means there by returns from these much safer savings instruments will become market-linked and hence variable. So, if RBI were to stop increase in repo



"Contrary to its objective

companies and their premium rates.

to help insurance seeker, informed aggregators often sell visitors' personal information to several insurers, resulting in customers being bombarded with sales calls from the companies or their agents."

IRDA now plans to regulate web aggregators who rank various policies and provide comparable rates of premium, the websites under-cover could be policybazaar. com,, medimanage. com and that provide information on insurance products from various companies. Regulator is forced to bring aggregators under its preview because the information so collated can help insurance-seekers compare premium rates for life, health, travel and motor insurance and not just generate leads and not all offer options to purchase a product online. However some do facilitate an online buying process, to the extent possible, usually by directing the insurance-seekers to the companies' website.

rate, if it finds inflation well undercontrol and decide to reduce it, the chances are interest rate on PPF, NSC, MIS also will down with it. Present high rate of interest may not remain stable for long. This variable rate also means that if you have invested in an NSC of 5 years you rate of interest will be 25 basis points above the yield on 5-year Gilts. For instance, if the yield on 5-year Gilts is 8.75%, you will get 9% on your investments. In addition, as the corresponding yield changes, the rate of interest on your investment will change each year. Only senior citizens stand to benefit as the rate of interest they will get on the 5-year Savings Scheme. The scheme will fetch 100 basis points more than the yield on 5 year Gilts. Hence as per the above example, they will earn at the rate of 9.75%. In addition, in 10 year NSC, one will get 50 basis points above the 10year yield on Gilts. Besides that PPF is one of the safest investments even under the changed rate structure, it will give an annual post-tax return of about 11.3% provided full income tax benefits are availed by the investor. Insurance Regulatory and Development Authority (Irda) announced two online initiatives insurance-seekers. The first one is the extensive guidelines pertaining to web aggregators and the other is the launch of a mobile application to compare unit-linked insurance policies (Ulips) from various

Contrary to its objective to help insurance seeker, informed aggregators often sell visitors' personal information to several insurers, resulting in customers being bombarded with sales calls from the companies or their agents. In the final IRDA guidelines, the websites have been asked to disclose the fact that visitors' information will be passed on to companies on the site's home page. To ensure that aggregators do no indulge in promoting products, the insurance regulator has decreed that they cannot display "ratings, rankings, endorsements or bestsellers of insurance products" on their websites. Correspondingly, they have been barred from commenting on insurers or their products. In addition, aggregators will now be required to highlight links to the product comparison charts and tables for each category of products covered by them. Items to be displayed include premiums quoted by each insurer as per age and other personal

From the Finance Desk details, policy and premium term, sum assured, default underwriting requirements such as medical examination, diagnostics, etc, and key features of the product chosen. IRDA also put burden of safeguarding and securing the entire process on the shoulders of aggregators. IRDA needs to be appreciated for its initiative; the launch of the mobile application in order to provide complete information on all the options available to insurance seeker. To access, one needs to log on to It is intended to help insurance-seekers compare Ulips launched after September 1 2010. Even on internet one can have access and product can be searched under three options – By Company, Policy type, Keywords. Maximum three products can be selected at a time for comparisons purpose while the tool, which works on Android, iPhone, Nokia and Blackberry platforms, has been termed a mobile application. It

is important to understand that the information displayed could assist people reach a wellresearched decision. In a consumer friendly move to ensure prompt settlement of claims, IRDA has asked Life Insurance Corporation of India (LIC) to complete all claims-related investigations within the stipulated time-frame of six months. The Authority advises the LIC to expeditiously complete all the claim investigations within the stipulated time frame and also put in place effective systems to settle the claims promptly. The Insurance Regulatory and Development Authority (IRDA) said that while examining the documents submitted by LIC it found there were 300 cases as on March 2010 where investigations were pending beyond six months. Mutual Fund According to Association of Mutual Funds in India (AMFI), Mutual

fund investors will now get a monthly consolidated statement of all of their transactions in different funds. Today, for every new investment in every new scheme investors are issued additional accounts statement. In order to unburden the investors from multiple statement of account, the mutual fund industry has decided w.e.f October 2011 to issue Consolidated Accounts Statement (CAS) on a monthly basis. Stock Market As per clarification given by the ministry of finance to SEBI (Securities and Exchange Board of India) Stock market investors would not have to pay any service tax on any late payment charges paid by them to their brokers, provided such fines are shown separately in the account statement. There is much for consumers to rejoice as they bid adieu to 2011 and welcome 2012. Sunil Prabhakar



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January 2012 50 1/2012 Catch us also on Vol. XIII, Issue I