Government has taken off the cap on political 

contribution

Section 182 of the Companies act, 2013 which has been notified with effect from 12th September 2013 provides for prohibitions and restrictions regarding political contributions.

The board of directors have to approve the contribution to be made through a resolution.

 Salient features of this section are given below:

1) All companies except Government companies and companies in existence for less than 3 years are covered by this section;

2) The maximum amount that a company can contribute to a political party(ies) in year shall not exceed 7.5% of its average net profits during the three preceding financial years;

3) Before making the contribution, the Board should approve of the same by way of resolution passed at its Board meeting;

4) Subscription, donation or payment made to a person who is carrying on such activity which affects public support for a political party shall also be deemed to a contribution to a political party;

5) Expenditure incurred directly or indirectly by a company on a publication, souvenir, journal, pamphlet for or on behalf of a political party shall also be construed as making a contribution to a political party;

6) Every company should disclose in its profit and loss account any amount contributed to a political party in any financial party, giving the particulars of the total amount contributed and also name of the political party;

7) Political party means a party registered under section 29A of the Representation of People’s Act, 1951

Ministry of Corporate Affairs has issued a clarification vide its circular no. 19/2013 dated 10/12/2013 that :-

1) where companies make contribution to “Electoral Trust companies” rather than directly to political parties then they need not disclose separately the amounts paid to each Electoral Trust company. It would be sufficient if a consolidated figure is mentioned in the accounts as paid to Electoral Trust Company;

2) Companies making contribution directly to a Political Party will be required to make the disclosures as required by section 182(3) of the Act;

3) Electoral Trust Companies in turn should make disclosures regarding contributions made by them to political parties as required under section 182(3).

Now,Government has passed a money bill in Lok Sabha on wed(22/03/2017) taking  off 

the cap on political contribution. This effectively means that the parliament has passed 

the bill as Rajya Sabha does not have any power to reject a money bill.

Companies   will also be allowed to   keep the names of political parties confidential 

in their accounts..The amount of donation, however still needs to be disclosed

Object of the bill:  

curb on unaccounted flow of funds into political system and encouragement of 

non cash  funding to increase and curb on anonymous donation !!!!

WAKE UP CONSUMERS

Private Sector Banks (PSB’s) have been robbing customers in broad daylight and despite persistent complaints the PSB’s arrogant statements clearly imply that they are going to continue doing the same.

1.       The Reserve Bank of India (RBI) regulations are very weak, unfair and inadequate to address this issue. RBI has miserably failed to protect the customers from the continuous onslaught of arbitrary charges from these banks.

2.       Miss-selling is rampantly practiced by PSB’s. The “free” services offered are charged for after a specific time period, which is usually stipulated in such a manner that even an ordinary literate individual is not able to adequately ascertain as to where and how these stipulations were stated.

3.       How come banks are unilaterally allowed to deduct money from our account? Although it is clearly stated in almost every bank document that the bank reserves such a right to deduction of charges,such practices should be curtailed. Since a consumer gives his consent for deductions at the time of signing any document pertaining to the bank, ethically this one-time consent cannot be upheld for every rampant deduction. The issue worsens when these charges, fines and penalties increase every year without the knowledge of the customers and as usual RBI has not corrected this malpractice.

4.       Banks charge consumers for availing debit cards and credit cards. Banks charge vendors for machine usage to accept these debit and credit cards, which the vendors pass on to the same consumers. Ultimately, the consumer bears the transactional cost for availing one service (i.e., plastic money) twice. The RBI, pushing its efforts to reduce double taxation on incomes and indirect taxes, has never acknowledged this issue of double transactional cost.

5.       Satisfying an existing liability is a simple right of every consumer which should not attract any transactional cost. However, pre-payment of loan attracts heavy charges and this practice has made its way into mainstream banking to the point that it is now unilaterally accepted everywhere. Till date RBI has not issued any clarification on this.

6.       PSB’s, despite functioning on a central system to provide ‘ease of access’ to consumers, still use the term ‘Home Branch’ to deduct charges for any transactions initiated or conducted in other branches.

7.       Timely supervision and warning is never given by RBI leading to many co-operative banks going down. Co-operative banks are declared insolvent and non-functional only after its assets are eroded to the point that all the consumers have lost their money. Although technically and legally sound, it defeats the core jurisprudence, i.e., saving consumers money. RBI has still not acted upon this draconian law.

PSB’s used to charge customers for the aforementioned transactions and practices to cover for their overheads. However, the advent of technology has reduced these overheads but the charges remain. The RBI can be expected to require the banks to declare income from such arbitrary deductions so as to understand the volume and quantum of these funds that are an overhead transactional cost for every citizen.

Consumers need to wake up and force the banking authorities hand to acknowledge and address these issues. A digital India cannot mean accepting the repression and autocracy of the banking sector.