New Delhi, Dec 19 (PTI) State-owned Oriental Insurance Company Ltd incurred a loss of Rs 194 crore during FY20 for failing to properly determine bidding rates for Pradhan Mantri Fasal Bima Yojna, said a CAG report.

According to report number 12 presented in Parliament earlier this week, Oriental Insurance Company Ltd determined the bidding rates for Pradhan Mantri Fasal Bima Yojna in 2019-20 by applying pricing components uniformly without specific determination as per the terms and conditions of the Agriculture Quota Share Reinsurance treaty with General Insurance Corporation of India, being Re-insurer.

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"This led to imposition of Loss Corridor clause of the treaty by GIC and consequent loss of Rs 194.08 crore," it said.

Imprudent underwriting of Group Janta Personal Accident Policy of the Maharashtra state government by the public sector general insurance company without reinsurance cover and in violation of guidelines of Insurance Regulatory and Development Authority of India (IRDAI) in 2018-19 led to a loss of Rs 14.92 crore, the CAG report said in another observation.

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As per the report, SBI Cards and Payment Services Ltd (SBCPSL) approved the renewal of the credit card facility of a client raising the credit limit from Rs 70 crore to Rs 90 crore.

The credit limit was increased despite downward movement of internal ratings of the client, in violation of its credit policy, it said.

Despite indicators like negative operating cash flow for 2017-18, increase in recoverable and payable time of outstanding dues and major inflow of cash from encashment of liquid assets, SBCPSL approved the enhancement of credit limit without proper due-diligence that led to avoidable loss of Rs 19.65 crore, it said.

Thus, it is recommended that the management may sanction the credit limit strictly in line with its credit policy and may insist on security in case of high credit limit, it said, adding, the management may also strengthen its internal control system regarding scrutiny of the card usage and payment history of the cardholder company.

In another observation, the report said UTI Infrastructure Technology and Services Ltd floated a tender for inviting financial/commercial bids for printing of PAN cards for a period of three years.

The company scrapped the tender altogether, citing that the lowest bidder (L1) was technically disqualified and the next lowest bid (L2) of a vendor from Jaipur at Rs 4.35 per set was not pursued further.

A new tender was floated with two packet bidding system and by introducing an additional eligibility criterion viz., the bidding agency should have the printing facility within 150 km from the company offices in Navi Mumbai/Kolkata/Chennai/New Delhi.

The work was awarded to L1 technically qualified bidder at Rs 4.95 per set for a period of three years, it said.

The L2 bidder, from Jaipur, in the first tender was technically disqualified, in the second tender, for not meeting the newly inserted condition of having printing facility within 150 km of the company's offices.

Thus, it said, scrapping of the first tender without considering the bids of other eligible and valid bidders and floating fresh tender with restrictive condition resulted in avoidable expenditure of Rs 5.71 crore.

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