Business
No insurance policy to comply with Madras HC order on 5 yr bumper to bumper cover
Suspense continues on whether vehicle buyers will have to shell out a huge amount towards insurance premium upfront for five years from Wednesday onwards to comply with the Madras High Court order.
As things stand now, new car buyers in Tamil Nadu from Wednesday onwards, have to pay huge sums as premium for five years.
It is learnt the industry lobby body, General Insurance Council is exploring various options including legal ones to wriggle out of the situation.
But where is the policy is the question?
“The IRDAI (Insurance Regulatory and Development Authority of India) has to approve such a product first. There is no five-year bumper-to-bumper car vehicle insurance policy,” Saharsh Damani, CEO, Federation of Automobile Dealers Associations (FADA) told IANS.
Non-insurance industry officials told IANS, none of the insurers have a five year bumper-to-bumper insurance policy for cars and two wheelers.
Such a product has to be designed after doing actuarial calculations.
Industry officials starting from the sectoral regulator IRDAI and the insurers are keeping mum on the issue though claiming to serve the interests of the insuring public.
Recently, the Madras High Court by an order made the costly bumper-to-bumper insurance cover compulsory for all new private cars sold from September 1, 2021.
The court also ordered circulation of the judgement by the Additional Chief Secretary, Transport Department, Chennai, to all the insurers and the said officers must ensure that the above direction is followed scrupulously in letter and spirit without any deviation.
“Why should the insurers issue any instructions. They will be happy if the order is implemented as they will get lump sum premium income upfront,” an insurance intermediary not wanting to be quoted told IANS.
The headless IRDAI has not issued any public notice/guidance in this regard.
The Tamil Nadu government is also silent on this aspect as the court had ordered the circulation of its order to Additional Secretary, Transport Department.
“We have not got any circular from the head office in this regard,” an official of a public sector general insurer told IANS preferring anonymity.
The court posted the matter for September 30 for reporting compliance.
“The insurers will be silent as the court had not ordered them. It is for the IRDAI to issue necessary instructions making personal accident insurance cover for occupants of a private car and the pillion riders of two wheelers compulsory. Now it is optional,” Americai V. Narayanan, Chairman, ICM Insurance Brokers Pvt Ltd told IANS.
Narayanan said the bumper-to-bumper insurance cover will cost more than the comprehensive insurance cover as the claims under the former will be settled on replacement cost basis while under the latter depreciation will be applied on the component cost.
Vehicle insurance policies are two parts — own damage (insurance for the vehicle against damage, theft) and third party liability (liability for third parties).
The third party insurance cover is mandatory whereas the insurance cover for vehicle damage is not mandatory.
The Madras High Court order is for making insurance cover for vehicles mandatory.
“It is a patently untenable order (court’s order) and would not stand legal scrutiny if the vehicle makers or any other aggrieved party goes on appeal,” D. Varadarajan, a Supreme Court advocate specialising in company/competition/insurance laws, told IANS.
Commenting on the lack of awareness on the part of car owners about the liability for occupants of the car the court while hearing a case ordered: “Therefore, this court directs that whenever a new vehicle is sold after 01.09.2021, it is mandatory for coverage of bumper-to-bumper insurance every year, in addition to covering the driver, passengers and owner of the vehicle, for a period of five years.”
“Thereafter, the owner of the vehicle must be cautious in safeguarding the interest of driver, passengers, third parties and himself/herself, so as to avoid unnecessary liability being foisted on the owner of the vehicle, as beyond five years, as on date there is no provision to extend the bumper-to-bumper policy, due to its non-availability,” the court ordered.
Business
FPI selling stands at Rs 53,337 crore in Oct so far amid elevated crude oil prices

As long as Brent crude remains above $100 a barrel, there will be pressures on the economy and the foreign portfolio investors (FPIs) are likely to sell the dip, analysts said on Sunday.
The total FPI selling in October stands at Rs 53,337 crore so far, and the net FPI investment through the IPO market during this period stands at Rs 5,281 crore.
“The total FPI selling through the exchanges for this year stood at Rs 3,69,164 crore,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
On the flows front, FIIs remained net sellers for the 10th straight week. For the week ended October 23, FIIs significantly reduced their selling and even turned buyers on two days.
The moderation in US bond yields with the 10-year yield declining from 5.36 per cent to around 5 per cent, appreciation in the rupee to 94.94 to the dollar and the low valuations, particularly of the large-caps, contributed to the moderation in FII selling.
Going ahead, the steady moderation in FII selling offers some comfort, though elevated crude and sharp broader-market weakness keep the downside risk alive.
A significant market trend during the week was the sharp correction in the mid-and small-caps.
The Nifty Mid-cap 100 plunged 5.6 per cent and the Nifty Small-cap 100 crashed 7.3 per cent during the week while the Nifty 50 was relatively resilient with a cut of only 2.35 per cent.
Forced liquidation in the margin-funded long positions in the broader market is rumoured to have triggered the crash in the broader market, said analysts.
The resilience of the large-caps is mainly due to the accumulation of the fairly valued large-caps by the DIIs which are flush with funds.
The high crude prices is acting as a strong headwind for the economy and market, said analysts.
Business
Gold, silver decline sharply on weekly basis as crude prices rise

Gold prices dipped 3.28 per cent on a weekly basis, while silver prices declined 7.83 per cent this week, as rising crude oil prices heightened inflation fears.
The rising inflation concerns reinforced expectations that global interest rates will stay higher for longer, prompting a wave of selling across precious‑metals markets.
On Friday, MCX gold futures expiring December declined 0.81 per cent while MCX silver futures for December shed 1.75 per cent. Gold futures stood at Rs 1,42,150, while silver futures stood at Rs 1,96,100 per kg.
Gold saw its steepest weekly decline since June and slipped below the psychologically important $4,000 per ounce level for the first time since mid-July, analysts said.
The selloff in silver intensified over weakness in US technology stocks, particularly AI-linked companies, which triggered margin calls and forced investors to liquidate precious-metal holdings.
Meanwhile, crude oil surged to multi-month highs following renewed attacks on Saudi energy infrastructure and shipping routes, while the Indian rupee surrendered its early-week gains amid rising oil prices and renewed dollar demand.
However, lower prices encouraged physical gold purchases in India during the Dussehra festival, providing some underlying demand support, while Chinese jewellery demand remained subdued.
Market participants forecast that precious metals could remain under pressure if elevated energy prices reinforce inflation concerns and expectations of tighter monetary policy. However, physical demand and any moderation in bond yields could offer support following the recent correction, they said.
Markets largely expect the US Fed to keep interest rates unchanged at the October 27–28 policy meeting, but expectations of another rate hike in December remain elevated, with traders pricing approximately a 78 per cent probability.
Investors are also awaiting the US Personal Consumption Expenditures report next week for additional guidance on inflation and future interest-rate decisions.
Immediate resistance for Comex Gold is placed at $4,070–$4,100 zone, while support lies at $3,970–$4,000 zone, analysts said.
For MCX Gold, immediate resistance is placed at Rs 1,43,000–Rs 1,43,700 zone, while the support lies at Rs 1,40,000–Rs 1,41,000, they added.
Business
ED raids Hyderabad firms in Rs 326 crore bank fraud probe

The Directorate of Enforcement (ED), Hyderabad Zonal Office, on Friday conducted search operations at seven premises across Hyderabad, Secunderabad and Medchal-Malkajgiri in Telangana under the Prevention of Money Laundering Act (PMLA), an official statement said on Saturday.
The raids targeted the registered office of M/s Kanakadhara Ventures Pvt. Ltd. (KVPL), the residences of its directors, and premises linked to entities and individuals alleged to have acted as conduits for the diversion of bank funds.
The searches form part of an ongoing investigation into the alleged “misutilisation” and diversion of credit facilities sanctioned to KVPL and its directors, the ED statement said.
The ED case stems from an FIR dated December 8, 2022, registered by the Central Bureau of Investigation, Bank Securities and Fraud Branch (BS&FB), Bangalore, on a complaint from Punjab National Bank.
The FIR alleges offences under Sections 120-B, 420, 468 and 471 of the Indian Penal Code, and provisions of the Prevention of Corruption Act, 1988.
According to the agency, a consortium of banks led by Punjab National Bank — comprising IDBI Bank, Union Bank of India, Andhra Bank (now UBI) and Bank of Baroda — suffered a loss of Rs 326.49 crore.
ED investigations revealed that Bank Guarantee and Letter of Credit facilities granted to KVPL were misused. Funds were allegedly diverted through related and conduit entities on the strength of fabricated steel purchase invoices and transport documents.
The company is also accused of operating bank accounts outside the consortium arrangement without the knowledge of the lending banks, the statement said.
During the searches, officials seized incriminating documents, digital devices and other records related to the diversion and layering of funds. Unaccounted cash amounting to Rs 15 lakh was also recovered.
Multiple immovable properties and investments linked to the case have been identified.
ED said further investigation is underway.
The coordinated action underscores the agency’s continued focus on tracing the proceeds of bank frauds and cracking down on complex money-laundering networks involving corporate entities.
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