EMERGING MARKETING PRACTICES & TECHNIQUES OF LIC

Introduction to LIC

Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re- organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families

Life Insurance Corporation of India is a wholly owned undertaking of the Government of India.

Life Insurance Corporation of India was established by an Act of Parliament on 1st September, 1956. Its Central Office is located in Mumbai. It also has seven zonal offices each located in Mumbai(Western Zone), New Delhi (Northern Zone), Kanpur (North-Central Zone), Bhopal (Central Zone), Chennai (Southern Zone), Hyderabad(South-Central Zone), and  Kolkotta (Eastern Zone).

It has a network of over 2000(2048) branches and more than nine lakh agents.

Over 47 years, LIC has become a household name for providing security for a lifetime and is synonymous to life insurance in India.

LIC ranks No.1 in the list of top 500 companies on the basis of Net Worth(Rs. 15, 47, 951 million) as well as Net Profit(2,66,277 million)- Dun & Bradstreet (India 500)

Mission
"Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development."

Vision
"A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."

 Goals

·          Promote within the Corporation greater awareness of the changing environment and the need to align the corporate policy to the emerging situation.

·          Help fashioning, within the constraints, its policies, programmes, practices and products to meet the expectations of the Public. Help the public to appreciate the performance and the limitations of LIC.

Product Offered By LIC

Insurance Plan

As individuals it is inherent to differ. Each individual’s insurance needs and requirements are different from that of the others. LIC insurance plans are policies that talk to you individually and give you the most suitable option that can fit customer requirements.

Children plan

·         Komal Jeevan - Plan No. 159

·         Children Deferred - Plan no.41

·         Jeevan Kishore - Plan no.102

·         Jeevan Chhaya - Plan no.103

·         Marriage Endowment/Educational Annuity - Plan No. 90

·         Jeevan Anurag - Plan no.168

Endowment Policy

·         Endowment with Profits - Plan no.14 Limited Payment Endowment with Profits - Plan no.48

·         Jeevan Mitra - Plan no.88

Group Insurance Policy

Group Insurance Scheme is life insurance protection to groups of people. This scheme is ideal for employers, associations, societies etc. and allows you to enjoy group benefits at really low costs.

·         Janashree Bima Yojana

·         Group Insurance Scheme in lieu of EDLI

·         Group (Term) Insurance Scheme

·         Group Savings Linked Insurance Scheme

Group Superannuation Scheme
Group Mortgage Redemption Assurance Scheme

Joint Life Policy

·          Jeevan Saathi - Plan no.89

Money Back Policy

·           Money Back with Profit - Plan no.75

·           New Money Back - Plan no.93

RECENT INNOVATION STARTEGY FOR ENHANCING CUSTOMER SATISFACTION BY LIC

LIC has realised the importance of personal involvement and has included it in the training program itself. Once the Agent is recruited he needs to undergo a compulsory training program designed by LIC. The Training Program also explains them the importance of the smallest of the customer .i.e. customer who is just seeking general information.  The Agents and Employees are trained to Apologise to its customers even if they are not at fault.  

“SO IT DOSENT TAKE MUCH OF TIME FOR THE HANDS OF THE LIC LOGO TO COME CLOSER FOR APOLOGY”

                   

, LIC has established elaborate Grievance Redressal Machinery at different level as per the customer requirement. There are Complaint cells which are specially set up to listen up to each and every customer’s problems. LIC gas also set up Policyholder Councils and Zonal Advisory Boards to understand the problems of their customer situated in any part of the city.

Offers a Fair Fix to Problem:

Customers want wrong to be set right and expects service contact employee to be skilled, empowered and interested in setting things right.

This is the main reason why LIC conducts training programs for the newly recruited Agents as well as the other Employees. In any kind of breakdown situations LIC try to offer a rational explanation and demonstrate sensitivity and concern to the customer rather than defending themselves.

Offers Some Compensation for the Inconvenience:

Compensation here wouldn’t mean of just monetary compensation or some extreme measures like firing the Branch Manager Etc; but it is just to make-up for the loss of customer satisfaction. It could be like “it’s on us”; “free service” etc. The service provider should plan certain compensation policies in advance for various types of situations and deliver it as and when the situation is faced.

Keep the Promises: 

It basically means that the Company should keep the promises made to the Customer before or at the time of service provision i.e. the Company should fulfill its commitments.

LIC makes sure that none of the Agents provide any kind of wrong information or false promises to its customers which mislead them. LIC ask their Agents to give reasonable commitments so that they could be fulfilled by the Company or the Agent on behalf of the Company. 

Follow Up:

This is the most important step in Service Recovery as it ensures that whether the implemented Service Recovery was Satisfactory or not. It would include Internal and External Follow-up. Internal Follow-up would be to ensure that the solutions they put in motion are actually executed and the External part would be to get feedback from the customer whether he is satisfy

Complaint Handling

In a vast Organization like LIC, catering to the various needs and aspirations of millions of policyholders, grievances of customers do arise occasionally. In order to redress these grievances LIC has established elaborate Grievance Redressal Machinery

IT in LIC

In today’s world, IT is a must for any industry to keep pace with the customer’s changing expectations. This is especially relevant in the service industry. The insurance sector has to ensure that the technology it chooses does not lag behind where customer expectations are concerned.

LIC has more than 16 crore policy holders. So it has to induct the best IT products available and use them to cater to the needs of the customers and deliver anywhere any time service on demand and to add value to its new products. The trust and the goodwill of the customer gained in the last 50 years have to be consolidated by making all activities more customer-focused.

For instance, LIC has a corporate Web site to provide information on products, services, policy status, grievances and premium calculator. Other facilities include touch-screen information kiosks at central locations to provide 24 x 7 inquiry services to customers.

EMERGING MARKETING PRACTICES & TECHNIQUES OF LIC

With the emergence of competition, LIC has implemented strategic moves for business growth, as well as ensured quality improvement in service standards. As on today, they have been providing service to around 12 crore policy holders and their track has been well acknowledged as reflected through continual upgradation of service standards culminating into a world class performance in the area of claim settlement operations.

It is well acknowledged that LIC has been able to provide appropriate IT support in furtherance of prompt service to their valued policy holders. The complex task of conversion of computerization of all the branches with their conversion as Front Line offices has been completed in aphase manner. In addition to this, the launching of the IVRS facility, MAN and Wide Area Network operations has helped the co-operation improve its servicing.

LIC’s strength lies in:

1. Wide network of branches covering rural areas.
2. A large and well- spread agency organization.
3. An acknowledged record of performance.
4. Adequate yield with high risk cover being offered keeping the policy holders satisfied in the existing in the economic scenario.
5. Well accepted brand equity throughout the country.

In addition to this, LIC has an established and well administered Grievance Redressal Mechanism and with Ombudsman intervention, the customers appear to be well attended. However, this mechanism has to be restructured keeping in view the additional legal provisions laid down by the regulator as expounded in the IRDA act.

 

Futuristic Approach

 

Till today, LIC enjoyed a monopoly. It is now that reality exists in the are of marketing (i.e. sales and after sales service operations). It will now have to follow a multi-faceted strategy towards customer retention and also expanding to a new clientele. With the new face of the market, relationship management seems to be the new mantra.

At the nucleus of this approach is the concept of Customer Relationship management. The need is to have a comprehensive review of the business keeping in view customer expectations

 

Customer Orientation

 

LIC, to be in the reckoning, has to have an efficient feed-back system, so as to understand what the customer desires in terms of product design, service procedures, relationship convinience, accessibility, responses in terms of personalized service, attendance, core and complimentary on an individual basis. The new players in the market like ICICI, HDFC etc. will definitely be very aggressive in the open market. LIC has to go ahead with their former customers, existing customer, in a very gentle and courteous manner, reassuring them of their better services with persona, attention.

ADVERTISING TREND IN LIC

·     News Papers and Magazines

LIC give ads in the news papers and magazines round the year to continue its brand image and also when new products are introduced. Normally its ads are published in Times of India.

·         Television

Companies like LIC, advertise on television to make people aware of their products and services

·         Gifts

LIC provides diaries, pens, booklets, etc to its customers

·         Hoardings

LIC put its hoardings where there is a mass flow of people, especially outside the railway station or at the backside of the bus.

·         Advertisement At Kumbh Mela

LIC has also advertised about its products and the corporation even in the kumbh mela

·         Advertisement On Radio satellite channel

Advertisement about LIC are frequently been telecast on radio and   satellite channel.

EMERGING MARKETING TREND IN INSURANCE MARKET

EMERGING MARKETING TREND IN INSURANCE MARKET ARE AS FOLLOWS

Computerization:                                        

Initially, in the late 1950’s the insurance companies used Unit Record Machines (Electro Magnetic Machines) to process data punched into cards. Computers were introduces in the mid 1960’s and by the 1980’s the Unit Phased Machines were phased out and the entire process was computerized. This brought about greater efficiency and quick service delivery

                                                         

Internet:

Today, the internet has completely changed the service delivery process. Internet is today used to even sell insurance policies. Internet is, in fact, proving to be one of the widely used distribution networks for selling insurance policies. Also internet is used for sending premium notices to policy holders through e-mails

Companies like LIC (www.licindia.com), ICICI (www.iciciprudential.com) all have websites from which people can get the information about their products, prices, various schemes, and lots of other information. People can also purchase the product through this website.

                                                            

Electronic Clearance Service (ECS):

Almost all the big organizations today provide the ECS facility to its customers. A policy holder having an account in any bank which is a member of the local clearing house can opt for ECS debit to pay premiums. The advantage here is that once the option is exercised, the policy holder need not visit a branch for paying the premium or collecting the receipts. On the day indicated by the policy holder, the premium amount will be directly debited to the bank account of the policyholder and the receipt will be issued by the designated branch office.

Call Centres and SMS services:

Almost all the insurance companies have their own call centres which cater to the phone based queries of the policyholders. This service is 24x7 and they have the Interactive Voice Response (IVR) systems at all the branches

Post Liberalization Scenario of Insurance Industry

While no aspect of the reform process in India has gone smoothly since its inception in 1991, no individual initiative has stirred the proverbial hornets' nest as much as the proposal to liberalize the country's insurance industry. However, the political debate that followed the submission of the report by the Malhotra Com­mittee has presumably come to an end with the ratification of the Insurance Regulatory Authority (IRA) Bill both by the central Cabinet and the standing committee on finance. This section traces the evolution of the life insurance companies in the US from firms underwriting plain vanilla insurance contracts to those selling sophisticated investment contracts bundled with insurance products. In this context, it brings into focus the importance of portfolio management in the insurance business and the nature and impact of portfolio related regulations on the asset quality of the insurance companies. It also provides a rationale for the increased autornatisation of insurance companies, and the increased emphasis on agent-independent marketing strategies for their products. If politicized, regulations have potential to adversely affect the pricing of risks, especially in the non-life industry, and hence the viability of the insurance companies. Finally, the backdrop of US experience provides some pointers for Indian policy makers.

Pre-Liberalization Scenario of insurance Industry.

Indian History: Time to turn the clock back-and open up insurance

Fifty years ago, India had a bustling, if somewhat chaotic, entirely private insurance industry. The year after Independence, 209 life Insurance companies were doing business worth Rs712.76 crore (which grew to an amazing Rs 295,758 crore in 1995-96). Foreign insurers had a large market share 40 per cent for general insurance but there were also plenty of Indian companies, many promoted by business houses like the Tatas and Dalmias. The first Indian-owned life insurance company, the Bombay Mutual Life Assurance Society, was set up in 1870 by six friends. It Insured Indian lives at the normal rates instead of charging a premium of 15 to 20 percent as foreign insurers did. Its general insurance counterpart, Indian Mercantile Insurance Company Ltd., opened in Bombay in 1907.    

A plethora of insufficiently regulated players was a sure recipe for abuse, especially because there was no separation between business houses and the insurance companies they promoted.  The Insurance Act, 1938, introduced state controls on insurance, including mandatory investments in approved securities, but regulation remained ineffective. In 1949, Purshottamdas Thakurdas, chairman of the Oriental Assurance Company, admitted: "We cannot deny that, today, there is a tendency on the part of insurance companies in general to make illicit gains. Can we overlook the cutthroat competition for acquiring business? And still worse is the dishonest practice of adjusting of accounts." After a 1951 inquiry, the government was dismayed that companies had high expense and premium rates, were speculating in shares, and giving loans regardless of security. No wonder that between 1945 and 1955, 25 insurers went into liquidation and 25 transferred their business to other companies.    

This reckless record stoked the pro-nationalization fires. The 1956 life insurance Nationalization was a top-secret intrigue; for fear that unscrupulous insurers would siphon funds off if warned. The government resolved to first take over the management of life insurance companies by ordinance, then their ownership. The then finance minister C.D. Deshmukh later wrote: 'Seth Ramakrishna Dalmia’s extraction of Rs.225 crore (misappropriation by the Bharat Insurance Company) was a heaven-sent opportunity.  We were ready to nationalize, with every detail worked out." On 19 January 1956, the news was announced on the radio, though even the director- general of AIR was not shown the speech. The next morning, at 9 am, while executives were frantically seeking details over the trunk telephone, says Deshmukh in his autobiography, our officers walked into the respective insurance offices, showed their authority and then took over the business. I believe this will be regarded as one of the best kept secrets of the Government of India in all times to come." The ordinance transferred control of 245 insurers to the government. LIC, established eight months later, took over their ownership. General Insurance had its turn in 1972, when 107 insurers were amalgamated into four companies headquartered in the four metros, with GIC as a holding company. Nationalization brought some benefits. Insurance spread from an urban-oriented, high-end business to a mass one. Today, 48 per cent Of LIC's new business is rural. Net premium income in general insurance grew from Rs222 crore in 1973 to Rs 5,956 crore in 1995- 96. Yet, rigid controls hamper operational flexibility and initiative so both customers service and work culture today are dismal. The frontier spirit of the early insurers has been lost. Insurance companies have also been timid in managing their investment portfolios. Competition between the four GIC subsidiaries remains illusory. If Nationalization ever had a purpose, it has been served. It's now time to turn back the clock in some respects, and open up the sector again. The government already intends to insist on large minimum capital requirements, a strong regulator, and a healthy distance between insurers and industry.

Definition of Insurance.

The definition of insurance can be made from two points:

Functional definition.

Contractual definition.

Functional definition

Insurance is a co-operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to insure themselves against the risk.

General Definition

Insurance has been defined to be that in which a sum of money as a premium is paid in consideration of the insurer’s incurring the risk of paying a large sum upon a given contingency.

                     In the words of John Magee, “Insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risks that attach to individuals.”

Short note- Insurance Industry Classification

Insurance = Collective bearing of Risk

Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. While it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency, insurance is a method or process which distributes the burden of the loss on a number of persons within the group formed for this particular purpose.

Basic Human trait is to be averse to the idea of risk taking. Insurance, whether life or non-life, provides people with a reasonable degree of security and assurance that they will be protected in the event of a calamity or failure of any sort.

Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance.

Formate of Restaurant Business Plan just Copy and Edit.

BUSINESS PLAN

OWNERS:

Business Name:

Address:

City, State, ZIP:

Telephone:

Cell Phone:

Fax:

Email:

I. TABLE OF CONTENTS

I. Table of Contents    [page 1]

II. Executive Summary           [page X]

III. Business Description        [page X]

IV. Market Analysis   [page X]

V. Marketing Plan       [page X]

VI. Operations and Management Strategy [page X]

VII. Competitive Analysis      [page X]

VIII. Development Plan         [page X]

IX. Financial Statements        [page X]

X. Attachments           [page X]

II. EXECUTIVE SUMMARY

We are all about food. We love cooking it, eating it, coming up with new ways to serve it. You name it, and we’ve tried it, and then thought of ten ways we could have done it differently. We’ve been this way for years, and now we’d like to share our passion with others. We are opening {Name of restaurant}, which will serve {type of food you intend to service}, and will provide customers with a {kind of atmosphere your restaurant will have}.

We are seeking {money amount} for {purposes for the funds}. We believe we will be profitable within {amount of time} because the restaurant will {what you intend to do with the restaurant to ensure the profit}.

III. BUSINESS DESCRIPTION

We know the restaurant industry is a difficult one in which to achieve success, but we are confident that our ideas and experience will give us a leg up on the competition. We believe that even in a sluggish economy, our product will be appealing enough to consumers that they will still want to spend their hard-earned money on a night out at our restaurant.

Our goals are to {state your business goal(s)}, and we will do this with {specific ways you will reach those goals}. We believe that our philosophy of {give your philosophy or mission statement} will help us to achieve these goals.

We know that we will be able to compete in this marketplace because {reasons you will stand out from the crowd} and because we will market to a certain kind of customer who wants {what you offer that other restaurants in the area don’t}.

We are setting up our restaurant as {legal setup, such as LLC, sole proprietorship, etc.}.

IV. MARKET ANALYSIS

Though there is competition near us, our services will be superior to those currently offered in the area because {reasons why you’re better than your competition}.

Our prices will be {more than, less than, equal to} the competition, and we believe they are set up perfectly because {why your prices are what they are}.

The employees we {intend to hire or have already hired} are some of the best in the business. {Talk about what your employees offer, such as excellent serving skills, history as amazing chefs, etc.}.

We are attaching {marketing materials, brochures, etc.} to give you an indication of {something that proves your restaurant will do well}.

V. MARKETING PLAN

We believe that {name of restaurant} will have the image of {kind of image you expect your restaurant to project}. Because we intend for our customers to be {type of clients you will be seeking}, we will be marketing our new restaurant in the following ways: {here is where you detail your marketing strategy, including a timeline, your advertising budget, and any charts, graphs or information you have to add to your description}.

The market for our products is {describe what the market is doing in your area}, and because of that we believe we can {how your restaurant will deal with the good or bad in the market, and any changes that may be coming in the market}.

We have set our prices based on the current market, and they are {list of basic prices for your meals, with the acknowledgement that things fluctuate in this business}. We believe they are competitive because {methodology behind setting your prices; may include solid statistics and figures to further back up your plan}.

VI. OPERATIONS AND MANAGEMENT

{Name of restaurant} will be located at {address and/or area of restaurant’s location}, because {reasons for being located there}. Parking will obviously be necessary, and the parking situation at our location is {describe the parking}.

There are {number} other restaurants within {distance}, which will {help the business, make things challenging, etc., and why}.

We {do/do not} or will/will not} have a website and/or web-based reservation system. {If you don’t, explain if/when you will be starting that}. We will have {number} employees, including {detail the types of employees you will have}.

We will also have {describe your management team here}.

Opening a restaurant is one of the most expensive small business ventures there is, since the startup costs are significant. There are many things we will need in the initial startup, including {list of inventory and equipment you will have to purchase, including ovens, stoves, miscellaneous kitchen equipment, cash registers, etc.}

{Note here whether you have a location. If you do, state what it will take to get it in working order; if you don’t, explain your plan for securing a location}

We expect our restaurant to {details about how you expect the restaurant to perform, including research that explains why you believe this}. Our forecast for {amount of time} is {explain your financial forecast} and we will get there by {what you will do to make your forecast a reality}.

VII. COMPETITIVE ANALYSIS

Obviously, there are restaurants everywhere, and our location is no exception. {Name of restaurant} faces competition from {names of other restaurants that will be your direct competitors}.

{Here you detail any information you have on the competition, including sales figures and any other statistics that would be relevant to your restaurant’s chances.}

Customers choose {the competitors} because {reasons why these competitors have business}. We believe {name of restaurant} can offer an alternative because {reasons why your restaurant will be the better choice for customers}.

VIII. DEVELOPMENT PLAN

We will begin our marketing plan {date} with {type of marketing that you will roll out initially}, with the intention of spending {amount of time} on marketing before officially opening {date}.

Prior to opening, we will spend {amount of time} purchasing equipment and setting up our space. Our location is {non-existent, ready, not ready, in need of work} and we will {refurbish, remodel, work on it in some way, etc.} for {amount of time}, spending an estimated {amount of the funds needed to get the location in order}. The equipment will be an estimated {amount of money you will spend on everything that goes inside the location}.

We have {amount of money you already have, if any}, and with the money we receive from investors, we will {explain how you will you use the money you receive}.

Our goal is to {forecast when you expect to be profitable, and how you will get there}. In {amount of time} we will {indicate where you intend to be in a year, five years, even ten years}.

IX. FINANCIAL STATEMENTS

{Put all the owners’ personal financial information here, as well as a list of any investments, loans, or lines of credit you have already received for the business}

X. ATTACHMENTS

{Attach anything here that you have referenced in the outline. This includes graphs, logos, detailed market and competitive analysis, financial statements, and anything else you think would be important to a potential investor or lender}

Maintenance of register, records,Inspectors, Penalty

Maintenance of register, records, etc. – 

                                                                 Every employer shall prepare and maintain such registers, records and other documents in such form and in such manner as may prescribed.

 Inspectors. – 

(1)    The appropriate Government may, by notification on the Official Gazette, appoint such person as it think fit to be Inspectors for the purposes of this Act and may define the limits within which they shall exercise jurisdiction.

(2)     An Inspector appointed under sub-section (1) may, for the purpose of ascertaining whether any of the provisions of this Act has been complied with --

(a)   Require an employer to furnish such information as he may consider necessary;

(b)   at any reasonable time and with such assistance, if any, as he thinks fit enter any establishment or any premises connected therewith and require any one found in charge thereof to produce before him for examination any accounts, books, registers and other documents relating to the employment of persons or the payment of salary or wage or bonus in the establishment;

(c)   examine with respect to any matter relevant to any of the purposes aforesaid, the employer, his agent or servant or any other person found in charge of the establishment or any premises connected therewith or any person whom the Inspector has reasonable cause to believe to be or to have been an employee in the establishment;

(d)   make copies of, or take extracts from, any book, register or other document maintained in relation to the establishment;

(e)   exercise such other powers as may prescribed.

 (3)   Every Inspector shall be deemed to be a public servant within the meaning of the Indian penal Code (45 of 1860).

(4)    Any person required to produce any accounts, book, register or other documents or to give information by an Inspector under sub-section (1) shall be legally bound to do so.

[(5)  Nothing contained in this section shall enable an Inspector to require a banking company to furnish or disclose any statement or information or to produce, or give inspection of any its books of account or other documents which a banking company cannot be compelled to furnish, disclose, produce or give inspection of, under the provision of section 34A of the Banking Regulation Act, 1949 (10 of 1949).

 Penalty.- if any person-

(a)    contravenes any of the provision of this Act or any rule made thereunder, or

(b)    to whom a direction is given or a requisition is made under this Act fails to comply with the direction or requisition,

he shall be punishable with imprisonment for a term which may extend to six  months, or with fine which may extend to one thousand rupees, or with both.

 Offense by companies.-  

(1)  If the person committing an offense under this Act is a company, every person who, at the time the offense was committed, was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offense and shall be liable to be proceeded against and punished accordingly:

         Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all; due diligence to prevent the commission of such offence.

(2)    Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation. – For the purposes of this section, --

(a)   “company” means any body corporate and includes a firm or other association of individuals; and

(b)   “director”, in relation to a firm, means a partner in the firm.

 Cognizance of offences. – 

(1) No court shall take cognizance of any offence punishable under this Act, save on complaint made by or under the authority of the appropriate Government 1[or an officer of that Government (not below the rank of a Regional Labour Commissioner in the case of an officer of the Central Government, and not below the rank of a Labour Commissioner in the case of an officer of the State Government) specially authorised in this behalf by that Government].

(2)    No court inferior to that of a presidency magistrate or a magistrate of the first class shall try any offence punishable under this Act.

  Protection of action taken under the Act. – 

                                                                     No suit, prosecution or other legal proceeding shall lie against the Government or any officer of the Government for anything which is in good faith done or intended to be done in pursuance of this Act or any rule made thereunder.

A. Special provision with respect to payment of bonus linked with production or productivity. – 

Notwithstanding anything contained in this Act,--

(i)    where an agreement or a settlement has been entered into by the employees with their employer before the commencement of the Payment of Bonus (Amendment) Act, 1976 (23 of 1976), or

(ii)   where the employees enter into any agreement or settlement with their employer after such commencement, for payment of an annual bonus linked with production or productivity in lieu of bonus based on profits payable under this Act, then, such employees shall be entitled to receive bonus due to them under such agreement or settlement, as the case may be:

         [Provided that any such agreement or settlement whereby the employees relinquish their right to receive the minimum bonus under section 10 shall be null and void in so far as it purports to deprive them of such right:]

         [Provided further that] such employees shall not be entitled to be paid such bonus in excess of twenty per cent. of the salary or wage earned by them during the relevant accounting year.

    Act not to apply to certain classes of employees. – 

Nothing in this Act shall apply to --

(i)     employees employed by any insurer carrying on general insurance business and the employees employed by the Life Insurance Corporation of India;

(ii)   seamen as defined in clause (42) of section 3 of the Merchant Shipping Act, 1958 ( 44 of 1958);

(iii)  employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948), and employed by registered or listed employers;

(iv)  employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a Local authority;

(v)   employees employed by --

(a)   the Indian Red Cross Society or any other institution of a like nature (including its branches);

(b)   universities and other educational institutions;

(c)   institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit;

(vi)  employees employed through contractor on building operations;

        

(viii) employees employed by the Reserve Bank of India;

(ix)  employees employed by --

(a)   the Industrial Finance Corporation of India;

(b)   any Financial Corporation established under section 3, or any Joint Financial Corporation established under section 3A, of the State Financial Corporations Act, 1951 (63 of 1951);

(c)   the Deposit Insurance Corporation;

[(d)            the National Bank for Agriculture and Rural Development;]

(e)   the Unit Trust of India;

(f)     the Industrial Development Bank of India;

(fa) the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989;]

(ff)            the National Housing Bank;]

(g)   any other financial institution  [(other than a banking company)], being an establishment in public sector, which the Central Government may, by notification in the Official Gazette, specify, having regard to --

(i)    its capital structure;

(ii)   its objectives and the nature of its activities;

(iii)  the nature and extent of financial assistance or any concession given to it by the Government; and

(iv)  any other relevant factor;

(xi)  employees employed by inland water transport establishment operating on routes passing through any other country.

 Effect of laws and agreements inconsistent with the Act. –

                                                                                                                 Subject to the provisions of section 31A, the provisions of this Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service.]

   Saving. – 

                  Nothing, contained in this Act shall be deemed to affect the provisions of the Coal Mines, Provident Fund and Bonus Schemes Act, 1948 (48 for 1948), or of any scheme made thereunder.

    Power of exemption. – I

                               f the appropriate Government, having regard to the financial position and other relevant circumstances of any establishment  or class of establishment, is of opinion that it will not be in public interest to apply all or any of the provisions of this Act thereto, it may, by notification in the Official Gazette, exempt for such period as maybe specified therein and subject to such conditions as it may think fit to impose, such establishment or class of establishment from all or any of the provisions of this Act.

  

  Power to make rules. – 

(1) The Central Government may make rule for the purpose of carrying into effect the provisions of this Act.

(2)    In particular, and without prejudice to the generality of the foregoing power, such rules may provide for --

(a)   the authority for granting permission under the proviso to sub-clause (iii) of clause (1) of section 2;

(b)   the preparation of registers, records and other documents and the form and manner in which such registers, records and documents may be maintained under section 26;

(c)   the powers which may be exercised by an inspector under clause (e) of sub-section (2) of section 27;

(d)   any other matter which is to be, or maybe prescribed.

(3)    Every rule made under this section shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days, which may be comprised in one session [or in two or more successive sessions], and if before the expiry of the session [immediately following the session or the successive sessions aforesaid], both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

    Application of certain law not barred. –Save as otherwise expressly provided, the provisions of this Act shall be in addition to and not in derogation of the Industrial Disputes Act, 1947 (14 of 1947), or any corresponding law relating to investigation and settlement of industrial disputes in force in a State.

    Repeal and saving. – 

(1) The Payment of Bonus Ordinance, 1965 (3 of 1965), is hereby repealed.

(2)    Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under this Act as if this Act had commenced on the 29^th May, 1965.