Legal Protection To Consumers

The Indian legal framework consists of a number of regulations which provide protection to consumers. Some of these regulations are as under:

1. The Consumer Protection Act, 1986 - The Consumer Protection Act, 1986 seeks to protect and promote the interests of consumers. The Act provides safeguards to consumers against defective goods, deficient services, unfair trade practices, and other forms of their exploitation. The Act provides for the setting up of a three tier machinery, consisting of District forums, State Commissions and the National Commission. It also provides for the formation of consumer protection councils in every District and State and at the apex level. 
Website - https://consumerhelpline.gov.in

2. The Contract Act, 1982 - The Act lays down the conditions in which the promises made by parties to a contract will be binding on each other. The Act also specifies the remedies available to parties in case of breach of contract.

3. The Sale of Goods Act, 1930 - The Act provides some safeguards and reliefs to the buyers of the goods in case the goods purchased do not comply with express or implied conditions or warranties.

4. The Essential Commodities Act, 1955 - The Act aims at controlling production, supply and distribution of essential commodities, checking inflationary trend in their prices and ensuring equal distribution of essential commodities. The Act also provides for action against anti-social activities of profiteers, hoarders and black-marketers.

5. The Agricultural Produce (Grading and Marking) Act, 1937 - The Act prescribes grade standards for agricultural commodities and livestock products. The Act stipulates the conditions which govern the use of standards and lays down the procedure for grading, marking and packing of agricultural produce. The quality mark provided under the Act is known as AGMARK, an acronym for Agricultural Marketing. 

6. The Prevention of Food Adulteration Act, 1954 - The Act aims to check adulteration of food articles and ensure their purity so as to maintain public health.

7. The Standards of Weights and Measures Act, 1976 - The provisions of this Act are applicable in case of those goods which are sold or distributes by weight, measure or number. It provides protection to consumers against malpractice of under-weight or under-measure.

8. The Trade Marks Act, 1999 - This Act has repealed and replaces the Trade and Merchandise Act, 1958. The Act prevents the use of fraudulent marks on products and thus, provides protection to the consumers against such products.

9. The Competition Act, 2002 - This Act has repeated and replaces the Monopolies and Restrictive Trade Practices Act, 1969. The Act provides protection to the consumers in case of practices adopted by business firms which hamper competition in the market.

10. The Bureau of Indian Standards Act, 1986 - The Bureau of Indian Standards has been set up under the Act. The Bureau has two major activities: formulation of quality standards for goods and their certification through the BIS certification scheme. Manufacturers are permitted to use the ISI mark on their products only after ensuring that the goods conform to the prescribed quality standards. 

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Birth of Punjab National Bank

Founding Fathers

1. Sardar Dyal Singh Majithia - A western educated social reformist, Majithia founded the Tribune Newspaper and was part of PNB's first Board of Directors.

2. Lala Harkishen Lal - He had a passion for establishing commercial enterprises. One of the first directors of PNB, he also started the People's Bank and Bharat Insurance.

3. Lala Lajpat Rai - A well known freedom fighter, Lala Lajpat Rai was known as Punjab Kesari and was on third of the nationalist triumvirate Lal Bal Pal, the other two being Bal Gangadhar Tilak and Bipin Chandra Pal. Lala Lajpat Rai was one of the main founders of PNB and also part of the Bank's Board at one point.

4. Kali Prasona Roy - One of the first directors of PNB, he was an eminent Bengali pleader and has been chairman of the reception committee of the Indian National Congress at its Lahore session in 1900.

5. EC Jessawala - A well known Parsi merchant and a partner in the Jamshedji & Co. business house in the Lahore, Jessawala was one of the bank's first seven directors.

6. Lala Lal Chand - One of the founders of DAV College, Lala Lalchand was also a member of PNB's first board of directors. 

7. Lala Prabhu Dayal - A leading merchant and philanthropist in Multan, Lala Prabhu Dayal was also on PNB's first board of directors.

8. Bakshi Jaishi Ram - A civil lawyer and on of the bank's first seven directors. 

9. Lala Dholan Dass - A banker and merchant in Amritsar, Dholan Dass was also one of  PNB's first directors.

History
PNB was founded in the year 1894 at Lahore (presently in Pakistan) as an off-shoot of the Swadeshi Movement. With a common missionary zeal they set about establishing a national bank, the first one with Indian Capital - owned, managed and operated by the Indians for the benefit of Indians. The Lion of Punjab, Lala Lajpat Rai, was actively associated with the management of the Bank in its formative years.

The Bank made steady progress right from its inception. It has shown resilience to tide over many crisis. 

It survived the most critical period in its history - the Partition of 1947 - when it was uprooted from its major area of operations. It was the farsightedness of the management that the registered office of the Bank was shifted from Lahore to Delhi in June 1947 - even before the announcement of the Partition.

With the passage of time the Bank grew to strength spreading its wings from one corner of the country to another. Some smaller banks like, The Bhagwan Dass Bank Limited, Universal Bank of India, The Bharat Bank Limited, The Indo-Commercial Bank Limited, The Hindustan Commercial Bank Limited and The Nedungadi Bank was brought within its fold.

PNB has the privilege of maintaining accounts of the illustrious national leaders like Mahatma Gandhi, Shri Jawahar Lal Nehru, Shri Lal Bahadur Shastri, Shrimati Indira Gandhi besides the account of the famous Jalianwala Bagh Committee.     

Nationalisation of fourteen major banks on 19th July, 1969 was a major step for the banking industry. PNB was one amongst these. As a result, banking was given a new direction and thrust.

The banks were expected to reach people in every nook and corner, meet their needs and work for their economic upliftment. Removal of poverty and regional imbalances were accorded a high priority.

PNB has always responded enthusiastically to the nation's needs. It has been earnestly engaged in th task of national development. In the process, the bank has emerged as a major nationalised bank.

Timeline of PNB
1894 - PNB is incorporated on May 19 in Lahore.

1895 - The bank opens for business on 12th April, at Lahore's Ganpatrai Road

1900 - PNB opens branch in Rawalpindi

1904 - PNB establishes branches in Karachi and Peshawar

1939 - PNB acquires Bhagwan Dass Bank Limited

1947 - Partition of India. PNB's head office is shifted from Lahore to Delhi, but the bank continues operations in Pakistan

1961 - Indo-Commercial Bank Limited (established in 1933) merged into PNB. The bank also acquires Universal Bank of India

1965 - Pakistan government seizes all offices of Indian banks in Pakistan, following the Indo-Pak war, including PNB's office there.

1969 - PNB among 14 major banks nationalised by the Indian government on July 19.

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Classification of Financial Markets

In Financial Market, there are two markets namely Money Market and Capital Market and in Capital Market, there is primary market and secondary market. Let me explain you in detail about the Financial Market.

1. Money Market - The money market is a market for short term funds which deals in monetary assets whose period of maturity is upto one year. It is a market where low risk, unsecured and short term debt instruments that are highly liquid are issued and actively traded everyday. It has no physical location but is an activity conducted over the telephone.

Money Market Instruments

a) Treasury Bill - A treasury bill is basically an instrument of short-term borrowing by the Government of India maturing in less than one year. They are also known as zero coupon bonds issued by the Reserve Bank of India on behalf of Central Government to meet its short term requirement of funds.

Example: Suppose an investor purchases a 91 days Treasury bill with a face value of Rs 1,00,000/- for Rs 96,000/-. By holding the bill until the maturity date, the investor receives Rs 1,00,000/-. The difference of Rs 4,000/- between the proceeds received at maturity and the amount paid to purchase the bill represents the interest received by him.

b) Commercial Paper - Commercial Paper is a short term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period. It is issued by large and creditworthy companies to raise short term funds at lower rates of interest than market rates. It usually has a maturity period of 15 days to one year.

Example: Suppose a company needs long term finance to buy some machinery. In order to raise the long term funds in the capital market the company will have to incur floatation costs (costs associated with floating of an issue are brokerage, commissions, printing of applications and advertising etc). Funds raised through commercial paper are used to meet the floatation costs. This is known as Bridge Financing.

c) Call Money - Call money is short term finance repayable on demand with a maturity of one day to fifteen days, used for inter-bank transactions. Commercial banks have to maintain a minimum cash balance known as cash reserve ratio. The RBI changes the cash reserve ratio from time to time which  in turn affects the amount of fund available to be given as loans by commercial banks. Call Money is a method by which banks borrow from each other to be able to maintain the cash reserve ratio.

d) Certificate of Deposit - Certificates of Deposits are unsecured, negotiable, short term instruments in bearer form, issued by commercial bank and development financial institutions. They can be issued to individuals, corporations and companies during periods of tight liquidity when the deposit growth of banks is slow but the demand for credit is high.

e) Commercial Bill - A commercial bill is a bill of exchange used to finance the working capital requirements of business firms. It is a short term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms. When goods are sold on credit, the buyer becomes liable to make payment on a specific date in future. The seller could wait till the specified date or make use of a bill of exchange.

2. Capital Market - The term capital market refers to facilities and institutional arrangements through which long term funds, both debt and equity are raised and invested. It consists of a series of channels through which savings of the community are made available for industrial and commercial enterprises and for the public in general. The Capital Market consists of development banks, commercial banks and stock exchanges. An ideal capital market is one where finance is available at reasonable cost. Capital Market consist of Primary Market and Secondary Market.

a) Primary Market - The primary market is also known as the new issues market. It deals with new securities being issued for the first time. The essential function of a primary market is to facilitate the transfer of investible funds from savers to enterprises or to expand existing ones through issue of securities for the first time. A company can raise capital through primary market in the form of equity shares, preference shares, debentures, loans and deposits.

Methods of Raising Capital through Primary Market

i) Offer through Prospectus - Offer through prospectus is the most popular method of raising funds by public companies in the primary market. This involves inviting subscription from the public through issue of prospectus. A prospectus makes a direct appeal to investors to raise capital, through an advertisement in newspapers and magazines.

ii) Offer for Sale - Under this method securities are not issued directly to the public but are offered for sale through intermediaries like issuing houses or stock brokers. In this case a company sells securities at an agreed price to brokers who in turn resell them to the investing public.

iii) Private Placement - Private placement is the allotment of securities by a company to institutional investors and some selected individuals like HNIs (High Net Worth Individuals). It helps to raise capital more quickly than a public issue.

iv) Rights Issue - This is a privilege given to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. The shareholders are offered the 'right' to buy new shares in proportion to the number of shares they already possess.

v) e-IPOs - A company proposing to issue capital to the public through the on-line system of the stock exchange has to enter into an agreement with the stock exchange. This is called an Initial Public Offer (IPO). SEBI registered brokers have to be appointed for the purpose of accepting applications and placing orders with the company.

b) Secondary Market - The secondary market is also known as the stock market or stock exchange. It is a market for the purchase and sale of existing securities. It helps existing investors to disinvest and fresh investors to enter the market. It also provides liquidity and marketability to existing securities. It also contributes to economic growth by channelising funds towards the most productive investments through the process of disinvestment and reinvestment.

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How Government Earn and Spend

How Government Income (Approximate Figures)

1. 19% comes from Borrowing (Central Government borrow money through Market Loans, Treasury Bills, Bonds, Securities issued to Internal Financial Institutions, National Small Savings Fund, State Provident Fund, Reserve Funds & Deposits etc.)

2. 16% comes from Income Tax paid by Taxpayers including individuals, companies, HUF, partnership firms etc.

3. 9% comes from Custom Duty paid on Imports of goods.

4. 24% comes from Indirect Taxes (Good & Services Tax etc)

5. 19% comes from Corporate Tax (Corporate Tax in India is levied on both Domestic & Foreign Companies. Presently Corporate Tax in India for Domestic Companies are 30%, in case Domestic Companies Turnover is upto Rs 50 crores in Financial Year 2017-18 then tax rate is 25%, Corporate Tax For Foreign Companies is 40%.)
   
6. 13% comes from other sources like Disinvestment, Dividends received from Government Companies, Reserve Bank of India etc.


How Government Expenditure (Approximate Figures)

1. 29% is allocated to State Government for expenditure, growth in the state.

2. 21% is allocated for Central Government Schemes which are announce for the betterment of people living in the country and growth of the country.

3. 10% is allocated for subsidies given by Central Government. (Subsidies means amount given by Central Government on behalf of consumers like gas subsidy etc.)

4. 9% is allocated for Defence Sector for purchase of equipments, aircrafts, missiles etc.

5. 18% is allocated for Interest on borrowings.

6. 13% is given for Other Expenditure.


Fiscal Deficit = Total Expenditure - Total Income
Fiscal Deficit means when Central Governments expenditure exceeds income. It is a situation of Fiscal Deficit. Currently, India's Fiscal Deficit stood at 3.2% of GDP in FY 2018.

Following are the previous years Fiscal Deficit and Growth Rate Figures.
Year       Fiscal Deficit      Growth Rate
2008-09      6.0%                       8.5%
2009-10      6.4%                      10.3%
2010-11      4.9%                       6.6%
2011-12      2.7%                       5.5%
2012-13      4.8%                       6.4%
2013-14      4.4%                       7.5%

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