another example of the Credit Card industry's deceptive advertising targeting children
cartoon of the month

Friday, May 27, 2005

RBI Working Group debunked

The RBI has been attacked by the only token member of the public and so called consumer activist Manubhai Shah of CERC. At least CERC had the courage to speak out against the lopsided and unfair Working Group report of RBI on Credit Cards. Except for good old Prof. Shah, all the members of the commitee were vested interests of the illegal credit card industry that is causing massive problems for the Indian economy. SarbaJit Roy intends to challenge the vires of RBI's action and this new CIBIL law in the Supreme Court of India shortly after this law comes into force.

RBI norms on credit cards unfair: CERC
New Delhi, May 16

Terming the RBI’s proposed norms on credit cards as “unfair and unilateral”, Ahmedabad-based consumer forum CERC today proposed legislations to safeguard the interest of cardholders and rein in the powers of issuer banks or companies to recover dues.

“The printed conditions (of credit cards) are unilateral and unfair, presented to consumers on a take-it-or-leave-it basis leaving no chance for any question or negotiation,” the Consumer Education and Research Centre said in its suggestion to the RBI.

Though the RBI’s working group referred to various laws practiced worldwide, the CERC said it failed to report two specific laws — the Fair Debt Collection Practices Act of the US and the Credit Contracts and Consumer Finance Act of New Zealand.

The US law prohibits recovery of dues from credit card holder by any other agencies except through the process of law, while the New Zealand law provides insurance coverage and right to cancel the contract.

The CERC favoured insurance cover for lost, stolen and misplaced cards to protect the interest of consumers.

It also opposed the passing of information of credit card holders to any other agencies except banks and credit information bureau. — PTI

CIBIL and data sharing

On 4 November 2004, SarbaJit Roy filed his Hacking Complaint seeking that criminal charges be registered against senior officers of Standard Chartered Bank India, RBI and CIBIL for illegally sharing credit information without consent of borrowers. On 9th November 2004, the Head of Standard Chartered Bank's Credit Division Mr. Shyam Shrinivasan was immediately shifted out of India to Malaysia, and the same day RBI read the riot act to foreign Banks based on Roy's complaint.

Data sharing? Get borrowers' consent, says RBI

BS Banking Bureau in Mumbai | November 10, 2004 12:33 IST

The Reserve Bank of India on Tuesday called upon banks to obtain consent from all their borrowers to establish an efficient credit information system.

Credit Information Bureau (India) Ltd (CIBIL) currently has a database of around 8 million records of the credit history of individual consumers taken from various banks, financial institutions and non-banking finance companies.

Till date only 17 banks have shared their full data with CIBIL. The largest private sector bank in the country ICICI Bank has yet to take a final call whether it would share all its data with CIBIL.

Chanda Kochhar, executive director ICICI Bank, said the bank is sharing the list of wilful defaulters with CIBIL.

However, when its come to sharing of other data the point of contention is how the data will be used, how many banks will be able to share all the information and the issue of confidentiality is also crucial.

These issues need to be addressed and as when the bank is satisfied with the outcome of the discussion we would be ready to share the information, said Kochhar.

Financial institutions, housing finance companies, and banks, which subscribe to the service, can query CIBIL about the credit history of these borrowers on the payment of a nominal fee. CIBIL has decided to charge Rs 10 per query, up to December.

The credit report from CIBIL would indicate, how much the individual has borrowed and what his/her repayment history has been.

This is expected to mitigate credit risks, enable speedier and more objective credit decisions by banks.

The housing major Housing Development Finance Corporation and State Bank of India hold 40 per cent each of CIBIL's equity, while Trans Union International Inc, and Dun & Bradstreet Information Services India Pvt Limited hold 10 per cent each.

DB and TU provides the necessary technical and software support to CIBIL.

Data Security and BPO in India

Ponder this, "The more data protection laws we have in India the easier it will be for citizens to harass MNCs and BPOs by abusing the process of law" says noted Indian cyber law expert Sarbajit Roy and lead editor of the Cyber Crime India blog. Roy's Hacking Complaint under the IT ACT 2000 has raised howls of protest from CIBIL, RBI and Standard Chartered Bank India that Roy was "abusing the process of law" to harass them.

Data Security and BPO in India

May 25, 2005 11:22 IST

The burgeoning outsourcing business in India is not restricted to call centres anymore with data processing units coming up in large numbers but the absence of proper data security and cyber laws is hampering their business prospects, say experts.

Security of information is a major concern for companies outsourcing their jobs and they are insisting BPOs to get certified under international certification standards such as BS 7799, SAS 70, HIPAA standards because compared to the laws in the US and the UK, the Indian IT Act 2000 offers woefully inadequate protection, says Mandeep Garewal, director, Force Tech Security, a consultant to BPOs on data security related matters.

An estimated 20 per cent more work would have come India's way if a data protection law was in place, says Garewal.

Given that the BPO industry had a turnover of $3.6 billion in 2003-04, that translates into business worth about $720 million, about $1 billion worth of more BPO work would have come here if stringent security norms and suitable laws were in place in India," says Garewal.

Because of ongoing concerns on security, it has become a critical bugaboo and companies look for providing limited access to their applications thus minimising the scope of misuse, says Alok Shinde, director of information communication and technology practice, Frost and Sullivan, market consultants on emerging high-technology.

"They have a clause in the selection process that makes it mandatory for BPOs to have security certifications such as BS 7799 before they can bid. They also ensure that BPOs in India are conducting security audit and penetration testing to ensure compliance," says Shende.

Companies would also be taking up the issue in a big way at the forthcoming Communic Asia conference in Singapore next month.

Companies outsource services such as health, land records, which are important data and therefore they maintain stringent security specifications, which are based on requirements of their own onshore compliances to various laws, says Garewal.

BPOs temps data security risks

More worries for overseas BPO clients in India. With the massive churn in Indian bums on those BPO seats, the high leakage of confidential data /non-existent screening of employees / zero computer security audits is causing heart-burn for MNCs operating in India. Several criminal complaints under the IT ACT have already been filed against MNC companies and their CEOs and now the Boards are questioning if its worth all the risks to operate in India.

BPOs temps data security risks
Thursday, 26 May , 2005, 10:56

New Delhi: Exhausted from dealing with high attrition, BPOs are now turning to temps for sanity. That helps in two ways: Temps make more sense for snappy projects like handling Christmas sales or short-term data process job.

More importantly, it is the temping agency's headache to ensure a steady stream of bodies to keep the seats warm. Temp hiring for third-party BPO operations, that was negligible in the past, has spread like wildfire in the last few months.

Temping companies say almost all third-party BPO service providers have latched onto the concept in the last one year.

Temping isn't particularly new. MNCs have always had temp workers for Indian back-office operations. But it had bypassed the BPO industry till now because third-party contracts clearly stipulate that BPO companies will have permanent employees to ensure data security and provide adequate employee benefits. That has now changed. Due to high attrition rates, Indian BPO outfits are asking their foreign clients to allow temp workers in their back-office jobs.

There is a comfort level now, as overseas clients understand that it's not exactly a 'hire and fire' policy out here that might otherwise impact data protection and the overall quality of work. So they are comfortable with a third-party service provider with a temp workforce.

Besides, they also understand that finding the right people has become a challenge after the initial rush and the industry is facing a high attrition problem. Some third-party BPO service providers are even emphasising the strength of their temp workforce when they pitch for a contract, as evidence that they can handle short-term projects.

According to industry estimates, the per centage of temp workers in core BPO operations (excluding popular support jobs like administration and HR) is between 2-3 per cent and may inch up to 5 per cent this year. There are about 6,000 people in core BPO work in the country at present. This is less than 10 per cent of the total temp workers across sectors in India.

The per centage of temps in a BPO can easily go up to 15-20 per cent, as the global norm is about 12-15 per cent. The growth would also reflect the maturity of the model because traditionally, companies have maintained a distance from temping. With an increase in the overall acceptability of the concept, it could easily absorb more people.