All about Money

SEBI enforces document norms on MF intermediaries

noreply@blogger.com (Geeyes) — Wed, 16 Dec 2009 03:30:00 +0000

A few years ago, investors were free to invest in mutual funds without much documentation.
Today, there are a lot of formalities like submission of PAN card number, KTC and PoA at the time of investing in mutual funds.
Those investors who invested previously without these formalities are now required to comply with these norms even for withdrawing the invested amount.

Following are the details of the norms that the SEBI is enforcing now:

SEBI has asked AMCs to stop paying commissions to MF intermediaries who are not keeping proper documents of their clients.
Intermediaries are required to maintain KYC (know-your-client) and PoA (power of attorney) norms for the industry
The regulator has asked fund houses to set up a separate customer service, mechanism for queries and grievances of unit holders.
mutual funds, KYC, PoA, AMC

SEBI asks fund houses to reduce lock-in period

No entry load on mutual funds: Benefit Or curse?

Investors can shift MF investments without distributors’ consent

noreply@blogger.com (Geeyes) — Mon, 14 Dec 2009 03:30:00 +0000

I was of the opinion that investors can freely shift their investment from one mutual fund to another. Only today i came to know that AMCs have been asking investors to obtain NOC from the existing distributors. The following news has come as a reflection to the same.

Securities and Exchange Board of India (Sebi) has asked management companies (AMCs) not to compel investors to get NOC (No objection certificate) from exisiting distributors to shift investments.
Association of Mutual Funds of India (Amfi) had adviced AMCs to allow investors to change their distributor on the basis of a letter from them.
This mandate is not being followed by the mutual fund industry.
mutual fund

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DSP merrill lynch launches DSP BlackRocks World Mining Fund

noreply@blogger.com (Geeyes) — Sun, 13 Dec 2009 03:30:00 +0000

DSP merrill lynch has come out with an NFO, DSP BlackRocks World Mining Fund.
Following are the fund details:

It is an open ended Fund of Funds Scheme.
It offers Regional & Sub-sector wise diversification, which aims to outperform at various phases of the market cycle.
It has launched the fund with the confidence that intensifying urbanization in leading Asian nations like India & China will lead to increase in demand for commodities.
DSP has a perception that with interest rate cycle will reverse soon and hence the stock market might underperform in that case.
However, commodity related stocks are expected to do well in such periods.The NFO closes on December 18, 2009.
Face value of the units will be available at Rs. 10/- per unit (During NFO).
Minimum investment amount is Rs 5000 / -Fund Manager is Mr. Vinit Sambre – who will manage the overseas investments of the Scheme.

DSP merrill lynch , DSP BlackRocks World Mining Fund
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IPO opens for DB CORP Ltd

noreply@blogger.com (Geeyes) — Fri, 11 Dec 2009 11:11:00 +0000

DB Dorp Ltd has come up with IPO. Following are the details:

IPO Details

Price Band: Rs.185 to Rs.212
Issue Opens on: December 11, 2009
Issue Closes on: December 15, 2009

About DB Dorp Ltd

DB Dorp Ltd was originally incorporated as ‘Multi-Tech Energy Limited’ in 1995.
In 2005, company name was changed to ‘D.B. Corp Limited’
DB Corp Ltd (DBCL) is a leading Indian print media company.
It is publishing 7 newspapers, 48 newspaper editions and 128 sub-editions in 3 languages (Hindi, Gujarati & English) in 11 states in India.
DBCL’s combined average daily readership of Dainik Bhaskar, Divya Bhaskar and Saurashtra Samachar is 15.5 mn readers.
It the most widely read zewspaper groups in India. DBCL is one of the fastest growing major news paper groups in India. DBCL has presence in radio business under the brand name MY FM through its subsidiary Synergy Media Entertainment Limited ("SMEL").
It is operating 17 FM channels. DBCL has one of the largest newspaper production and distribution platforms in India.
It has 31 facilities spread across 31 cities with a total installed capacity of around 1.94 mn copies per hour.

I personally don t know much about this company. But i realised that the DNA on-line news alert that i regularly read is a group company of this.

DB Corp IPO, DB Corp
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Pay your SBI credit card dues through SBI debit card

noreply@blogger.com (Geeyes) — Fri, 04 Dec 2009 11:50:00 +0000

SBI has introduced a new payment option whereby customers can pay their credit card dues through their SBI debit card.

Details

SBI credit card hold holders now have 13 different ways of paying their credit card dues.
SBI customers cam login into PayNet on the SBI card website and pay online using their SBI debit card.
Some of the prominent methods of SBI credit card payments involve payment through internet, mobile phone, ATM, drop boxes at vantage points and through other SBI branches.
SBI Card is a joint venture between State Bank of India and GE Capital.
Presently, it has a cardbase of 30 lakh.

SBI credit card, credit card payment

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After-effect of Satyam Scam

noreply@blogger.com (Geeyes) — Sun, 22 Nov 2009 03:30:00 +0000

After the Satyam scam has come to light, SEBI has issued new set of norms to ensure that such things don t happen again.

Measures taken by SEBI

Companies need to disclose balance sheets (audited figures or unaudited figures with limited review) which will include cash flow statements on a half yearly basis by the companies.
Companies need to mandatorily disclose audited quarterly financial results within 45 days of the end of the quarter
Stock exchanges need to disclose details of complaints lodged by clients and investors against trading members and listed companies

Expectations of the changes

It will be difficult for the companies to window dress their books, as the cash flow statements are disclosed.
This will enable investors to get a more realistic picture of the companies' financial health which will help them take prudent fundamental decisions whilst investing and also ensure transparent grievance handling mechanisms.

sebi

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Axis Mutual Fund launches Axis Equity Fund (NFO)

noreply@blogger.com (Geeyes) — Fri, 20 Nov 2009 03:30:00 +0000

Axis bank has launched its first Mutual Fund, ‘Axis Equity Fund'

About the Fund manager

Mr. Chandresh Nigam (Head - Equity) will be managing the fund
He has over 18 years of experience in equity markets.
His previous work experience includes TCG Advisory, ICICI Prudential AMC and Zurich India AMC.
He is a Mechanical Engineer from IIT Delhi and has a PGDM from IIM Calcutta.

About the New Fund Offer (NFO)

Face value of the fund is Rs 10
The fund has opened for subscription November 11 and will close on December 8, 2009.
It will be listed in exchange on January 7, 2010.

Investment objective of the fund

The fund falls under diversified mutual fund category.
At least 80% of assets will be invested in equity assets and equity related instruments.
The scheme may also invest upto 100% of its net assets in derivatives and upto 40% in foreign securities i.e. ADRs, GDRs, foreign equity and debt securities.
The fund will be benchmarked to the S&P CNX Nifty.
The fund intends to hold 35-40 stocks in its equity portfolio.
It would hold 15 - 20 stocks each in large cap and mid cap category

Axis Equity Fund
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Mutual Funds – Increase in minimum number of investors & decrease in single maximum holding

noreply@blogger.com (Geeyes) — Wed, 18 Nov 2009 03:30:00 +0000

Existing System

Each mutual fund scheme should have a minimum of 20 investors
No single investor should own more than 25% of the Assets under Management (AUM), known as 20-25 rule
The above rule is applicable at scheme level and not at plan level. (A scheme offers different plans like growth, dividend (pay-out and reinvestment) and bonuses)

Problems Faced with the existing system

Last year, the mutual fund industry faced sudden withdrawals by large investors leading to liquidy crisis.
This happened mostly in debt schemes leading to destabilization of schemes.
To protect retail investors from the impact of sell-offs by large investors and corporates, SEBI has proposed to make changes to the existing scenario.

Proposed changes

SEBI has proposed to amend this 20-25 rule to increase the minimum number of investors in a mutual fund scheme, plan/sub-plan level from 20 at present
SEBI has proposed to reduce the maximum holding by a single investor from the current level of 25%.
The above proposed steps would be in the interest of the investors. Funds would be more stable than before.

mutual funds, investor protection, increase in minimum holders, decrease in single maximum holding

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Looking to transfer your existing home loan?

noreply@blogger.com (Geeyes) — Mon, 16 Nov 2009 03:30:00 +0000

You would have already availed of a home loan and would be paying EMIs on a regular basis. However, you find that many other banks are offering home loans at a lower interest rate. Hence, you are tempted to looking for options to transfer your home loan to a better lender. This is called as 'Balance Transfer' of home loans / switching of home loans. Banks refer this as 'takeover' of home loan from the original bank.

Before applying for a transfer of home loan, make sure that you stand to gain due to transfer of home loan. The original bank tries to retain you by increasing the cost of prepayment penalty. The new bank would try to attract you by offerring a competitive interest rate. Hence it is left to our prudence that we stand to benefit by going for a transfer of home loan.
Following are important checkpoints that need to be analysed before applying for a transfer of home loan.

Is the Interest Rate offerred by the new lender really low?

Check out the interest rates offered by various banks for Balance transfer of home loan.
Sometimes the rates offered to new borrowers are lower than the rate offered for transfer of home loan.

What is the Prepayment Penalty?

This is levied by the existing Bank for preclosing the home loan.
The prepayment penalty is normally from 0.5%- 2% on the total loan outstanding.
This charge differs from one bank to another.
It is necessary to understand the prepayment penalty amount from the existing bank.

How much is the Processing Fee?

This is levied by the new lender as there is cost involved in sanctioning a home loan.
This could amount to 0.50 to 1% of the total loan amount that one is seeking to apply.

Do you have a Cost advantage?

Its necessary to make sure that you are going to make a benefit from the new interest rate even after considering both prepayment penalty and new processing fee.

Who will bear the prepayment charges?

Its always advantageous if you could find a lender who would handle prepayment charges.
Hence, you need not worry of the extra charges.

Is Transfer of home loan at a later date possible?

Check if there are any clauses in the agreement where you cannot further transfer your loan to another lender.

What is the appropriate tenure to apply?

Make sure that you do not increase the tenure of the home loan with the new bank.
The bank might try to bargain for an increased tenure which will add more interest to the loan amount.
Eg: If you have already paid 5 years of your emi out of 20 yrs of loan tenure, take the new loan for only 15 yrs and not 20 yrs.

New lenders terms and conditions

Always read the terms and conditions of the new lender carefully before transferring your home loan.

Maintain good CIBIL score

The new lender might try to evaluate you based on your CIBIL score.
Hence, try to always maintain a good CIBIL score.
This can be acheived by minimising the defaults and paying the EMIs on time.

Will the interest rate change at a later date?

We always try to evaluate the lenders by analysing the exisiting home loan interest rates offerred by each bank.
Since the interest rates are floating, the rate is not going to stay the same till the end of home loan tenure.
What if the new lender raises the interest rate, while the old lender has kept the interest rate unaltered.
This change would mean that you have lost because of transfer of home loan.

balance transfer of home loan, home loan takeover

No more prepayment charges for home loans

No more loans if your relative is defaulter

noreply@blogger.com (Geeyes) — Tue, 10 Nov 2009 03:30:00 +0000

Banks have been introducing stringent rules while evaluating eligibility for giving loans or credit cards. Of late, some of the banks do not give you loan or credit card just because your relative has defaulted. Following are the details

The details

Even if you are getting good salary and have not defaulted till date, there is no guarantee that you will be given loan or credit card.
Banks use residential address to find if your relatives have defaulted on any loan or credit card. Hence if your father / sibling has defaulted, there are less chances for you to get your loan sanctioned or credit card.
If you belong to a business family and if your address is blacklisted, you will not get loan.
Some banks have even blacklisted entire localities. If you happen to live in such a locality, bad luck…
Banks do not give loans or issue cards to applicants employed in certain sectors such as exports, business process outsourcing and aviation.
Some banks seek guarantor from a person working in a more stable sector.
There are more chances for your loan to get rejected if you jointly apply loan and if the co-applicant is a defaulter.

relative is defaulter, loan rejection

Longer Trading Hours in India

noreply@blogger.com (Geeyes) — Sun, 08 Nov 2009 03:30:00 +0000

SEBI has approved for the stock markets to work for longer part of the day.
Details

Till date, the Indian stock exchanges work from 9:55 am to 3:30 pm.
SEBI has approved for the exchanges to work from 9 am to 5 pm. (National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) )
This means a longer working hours is waiting for broking house, traders, asset management companies and life insurance companies.
The currency derivatives market would start at 9 am and end at 5 pm
The commodities derivatives market would start at 8 am and end at 11:30 pm.
The exact implementation date is yet to be known

Below is a snapshot of the working times of stock exchanges of the world:

stock exchanges in india, longer trading hours
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Have you insured your Credit card?

noreply@blogger.com (Geeyes) — Fri, 06 Nov 2009 03:30:00 +0000

Recent survey has shown that there are 26 million credit card users in India. With credit card users on the rise, the frauds associated with credit cards have also increased. Everyone knows that as soon as you lose the credit card, the immediate action is to call customer care executive and cancel the card. In order to prevent such panic, we can look at seeking CPP card protection.

CPP Card Protection

CPP Card Protection is India’s first 24-hour Card Protection service
This is useful in situations like loss of credit card, theft and related fraud.
As soon as you lose your credit card, you need to call the CPP and inform the same.
India is part of the CPP group
CPP launched card protection in Asia as far back as 2004

Benefits of seeking CPP Card Protection

You are protected against fraud both before and after losing the card.
You are protected 7 days prior to your loss report to CPP until your membership is valid.
In the event of a travel/ hotel emergency, CPP will authorize an advance directly to your hotel to cover any bills, as well as arrange for travel tickets for your return.
This assistance is not just limited to India, but applies to travel abroad as well.
If you happen to lose the card, CPP will cancel the card immediately and will assist you in getting them replaced.
Registering important documents with CPP (passport, driving license, insurance policies) ensures easy access if you should lose the originals.

CPP Plans

There are various plans available. You can choose your desired plan based on your interest, lifestyle and spend behaviour.
Coverage for fraud loss is up to Rs.1 lakh prior and Rs.20 lakhs post notification
Overseas emergency assistance for payment of hotel expenses is of up to Rs.1.2 lakhs and Rs.60,000 in India
Replacement travel ticket advance of Rs.1.2 lakhs overseas and Rs.60,000 in India.
The annual fee applicable is Rs. 995 for the Classic plan and Rs.1295 for the Premium plan.

Banks that provide CPP Card Protection service

Citibank, HSBC, Standard Chartered and Kotak Mahindra Bank in partnership with CPP Assistance Services Pvt. Ltd provide CPP Card Protection service

CPP card protection, credit card insurance, credit card fraud

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Get sms Alerts on Trade Execution

noreply@blogger.com (Geeyes) — Wed, 04 Nov 2009 03:30:00 +0000

Last time when I placed orders to purchase shares, I was surprised to get sms alerts into mobile as soon as the trades got executed.

Details of increased transparency

NSE Investor Protection Fund Trust has taken steps to infuse transparency on trading of shares.
Once you put your trade orders to buy equity or derivative contracts or certificate of deposits with your broker on the National Stock Exchange Ltd. (NSE) terminal, you can get confirmation of the same from the trade verification window available on www.nseindia.com/tv
The trade data would be available from the next day of your trade date (T+1)

Advantages of increased transparency

Receive transaction statements daily
Confirmation or Verification of trade will be faster with the trade details provided by your broker
Enhance investment tracking and management of your portfolio
Infuse transparency
Build confidence

Pay Tax if you receive Gift

noreply@blogger.com (Geeyes) — Mon, 02 Nov 2009 03:30:00 +0000

Till now, no tax has been levied on the gifts we receive from friends or relatives except for cash in excess of over Rs 50,000. This has been modified so that all gifts are taxable now.

Gift Tax till date

Cash received over Rs 50,000 attracted tax.
No tax need to paid of gifts received from relatives or friends.

Details of the amendment

Amendment has been done to Section 56(2) (vii) by the Finance Act 2009.
If you have received gift from your friends, you need to pay tax on it.
The value of gifts received by you will be included in your taxable income and you need to pay tax at the applicable tax rate.
Tax will be calculated ay the fair market value of the gift received by you. Tax will be calculated on the amount exceeding Rs 50,000.

Taxable Gift items

Receiving following items as gift will attract income tax:

Land and building
Shares and securities
Jewels
Archaeological collections
Drawings
Paintings
Sculptures
Any work of art

Non-Taxable Gifts

Tax is not applicable on any sum of money or property received from any relative or as gift for the marriage or under a will or by way of inheritance.
The term ‘relative’ will only mean specific relatives defined under section 56 of the Income-tax Act, 1961.
If you receive certain gifts like motor car, electronics, furniture, etc you need not pay any tax.

The aim of such a measure is to bring in more assesses under income tax act so that the revenue of the government can be increased.
Tax on Gift

SBI Life launches Shubh Nivesh

noreply@blogger.com (Geeyes) — Sat, 31 Oct 2009 03:30:00 +0000

SBI life has launched a new product, SBI Life Shubh Nivesh. It is the same as the traditional endowment plan with an option of whole life cover.

Features of Shubh Nivesh

It is aimed at risk-averse investors
The aim of this scheme is to provide wealth creation, savings, protections and income needs of the investors.
There is a lumpsum payment at maturity
There is regular income for a chosen period

The product offers two plans:

Endowment assurance

Sum assured with all accrued bonuses will be paid on death
If the person survives the period, the sum assured will be paid at the end of the maturity period.

Whole life endowment

The sum assured with all accrued bonuses till the end of the endowment term will be paid to the policyholder.
An amount equal to the basic sum assured will be paid on the life assured attaining 100 years of age or on the death of the life assured, if earlier.
Investors need to opt for the whole life endowment option at the proposal stage itself
Investors can claim tax benefit u/s. 80C and u/s. 10(10D), of the Income-tax Act, 1961.

Disadvantages

The premium paid by investors will be higher than that of a pure term insurance plan.The internal rate of return may not be competitive as the other savings alternatives.

SBI Life Shubh Nivesh

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Get insured for critical illness

noreply@blogger.com (Geeyes) — Thu, 29 Oct 2009 03:30:00 +0000

With increased risk of facing critical illness in ones life, it is necessary that each one of us take insurance for critical illness. Let us know more of its features and benefits.

Critical illness insurance

It provides insurance for critical illnesses like cardiac arrest, coronary artery bypass surgery, cancer, multiple sclerosis, kidney failure, major organ transplant, etc
Such policies are issued by life insurance and general insurance companies
It can bought as a separate product or as a rider in a normal medical insurance policy
We need to pay extra premium (between Rs.3000 to Rs.8500), depending upon the term, age, coverage and desired sum assured to avail of critical illness insurance

Features

Critical illness insurance covers specified number of illnesses. In some cases, it covers 10 while in other cases it covers 30.
The insurance normally covers upto 75 years. However, it varies from policy to policy
There is a waiting period in most cases of about 3 to 6 months.
Claim payments vary from 50% to 100% depending on the type of critical illness and the nature of the policy
Some policies demand survival condition expressed in number of days
Once claim is made for an illness, balance can be carried forward to other illnesses
Tax benefits can be claimed under section 80D or 80C of the Income Tax Act.

What should you do

It is better to take such critical illness insurance, since it covers the risk of expenditure towards unexpected illnesses.
Such a policy need to looked as an additional cover to the health / medical insurance and not as a replacement.
Its better to check for some hereditary diseases and asses the most prone diseases for you.Last, but not the least, read the prospectus to know the intricate details and all the exceptions.

critical illness insurance

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Investors life to be made easier

noreply@blogger.com (Geeyes) — Tue, 27 Oct 2009 03:30:00 +0000

We know that SEBI has abolished entry loads on mutual funds from August 1, 2009. You can access the details in No entry load on mutual funds: Benefit Or curse? . This has been proposed to be expanded for all financial products. The D Swarup Committee on Investor Awareness and Protection has made wonderful recommendations which would help investors.

Recommendations and benefits

No-load on financial products: By April 2011, there should be no-load for any of the retail financial products that are available in the market.
Boost financial education: In order to boost financial education and awareness among advisors and investors, the committee has recommended to setup Financial Well-Being Board of India (FINWEB).
Minimum Entry barrier: A common minimum entry barrier for all financial advisors based on the skill sets of the advisor and the type of products and services he can sell.
Standard code of conduct: A standard code of conduct needs to be established across all products and organizations.
Disclosure norms: Investors should be informed of all details like cost borne by them, income earned by advisors from sale of product, risk associated with the product, etc
Avoid mis-selling of products: In order to avoid advisors from mis-selling of products, they need to report the details in the form of declaration and get it counter-signed by the investor.
Punitive actions for advisors: Penalties, loss of license to do business or criminal proceedings in case of mis-conduct / mis-selling of financial products
Dispute Redressing: Investors will have a common interface to complain about financial products, services and outcomes

Above recommendations, if implemented would increase investors knowledge and would prevent advisors from misselling of financial products.

SEBI, Swarup Committee

SEBI orders fund houses to charge uniform exit load

Things to consider before investing in Gold ETFs

noreply@blogger.com (Geeyes) — Sun, 25 Oct 2009 03:30:00 +0000

1. Returns not attractive:

While gold ETFs can add lustre over smaller periods, the returns they generate in the long term are not very encouraging.

2. Fund Management Costs:

Entry loads and fund management costs further reduce returns. You could consider buying the units in the secondary market, where brokerage costs may be lower than the applicable entry load.

3. Gold loses its sheen during financial crisis:

During periods of financial crisis like hyperinflation or failure of banks, the large investors may convert paper holdings to physical gold. Small investors who do not have this option may be left holding illiquid paper. In such a situation, gold loses its edge as a store of value.

gold etf

How to select good Gold ETF

Gold ETFs in India

Restricted free access to other bank ATMs

noreply@blogger.com (Geeyes) — Fri, 23 Oct 2009 03:30:00 +0000

RBI has imposed restrictions on the free usage of other bank ATMs.
RBI had earlier allowed customers to use any banks ATM without any additional charges in the hands of the customer. This had resulted in increase of number of transactions to many fold. Also it had squeezed the profit margin of the banks. Hence, RBI has revised its guidelines with feedback from IBA (Indian Banks' Association)

Details of the new changes

From October 15, 2009, you can withdraw a maximum of Rs 10,000 per withdrawal using other banks ATM.
You can do only 5 transactions per month of this sort.
Any usage of other banks ATM for withdrawing more amount and any extra number of transactions would attract extra charges in the hands of the customer.
The above applies for all savings bank account onlyCurrent account holders will not be getting any free third party usage.

atm, other bank ATM
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Know more on PPF (Public Provident Fund)

noreply@blogger.com (Geeyes) — Wed, 21 Oct 2009 03:30:00 +0000

Everyone of you must be knowing the details of PPF.
For basic details, refer to my previous post, Public Provident Fund – A Preferred Investment for the long term .

Here, I wish to share with you some more details of PPF which you may not be aware of:

Special features

Interest rate on PPF varies from year to year (decided by government)
One person can open only one PPF account
Maximum of only 12 deposits can be done in a year
Minimum amount that can be despoited is Rs 500 / only
Maximum amount that can be deposited in a year is Rs 70,000 /-
Loan on PPF can be availed from third year onwards. You can avail of 25% of the total amount that was present at the end of 2 years.
Interest is charged at the rate of 1% if prepaid within 36 months and at 6% on the outstanding loan after 36 months.
Withdrawal can be done from 7th year onwards
You can withdraw 50% of the amount present at the end of the 4th year / last year after deducting the loan taken if any.
You can close the account in 16th year.
You can also continue the account with or without subscription for further blocks of 5 years.
Interest on PPF is completely tax free under section 80 of IncomeTax Act

ppf, public provident fund

Public Provident Fund – A Preferred Investment for the long term .

Selecting appropriate Mutual Fund

noreply@blogger.com (Geeyes) — Mon, 19 Oct 2009 03:30:00 +0000

There are plenty of mutual funds available in the market today. It has become difficult for a common investor to select an appropriate mutual fund. Following are some prominent things that one must consider before zeroing in on a specific fund.

Past Performance

Past performance does not guarantee the funds performance in future.
But it is an indicator of the funds performance.
Its better to look at the 3-year and 5 year returns to understand the funds performance.

Fund Manager

Fund manager plays the key role in determining the funds performance
Successful fund managers manage / bring about successful funds
Check if the fund manager is remaining with the company for a long time.

Nature of the fund

There are different types of fund like aggressive, balanced, diversified, etc.
You need to understand the objective of each type of fund before investing

Read the prospectus

Go through the funds prospectus
It tells the objective of the fund, the amount invested in each area, etc
Look at the top holdings of the fund and check if they are justifiable

Choose right investment mix

Decide on the investment mix that you wish to do before directly investing
You may decide to invest some in index funds, some I thematic funds, some in aggressive and the rest in diversified funds.

Fund house

Check the fund house that the fund of your choice belongs to
Make sure that it is a reputed fund house in the market.
You may decide to choose different funds from different fund houses rather than selecting different funds from the same fund house.

mutual fund, select mutual fund
Posts of interest:
SEBI asks fund houses to reduce lock-in period
No entry load on mutual funds: Benefit Or curse?
Brokerages levy extra charges on Mutual Fund transactions

Increased transparency while taking loans

noreply@blogger.com (Geeyes) — Sat, 17 Oct 2009 03:30:00 +0000

The code on 'Banks Commitment to Customers' issued by the Banking Codes and Standards Board of India (BCSBI) has been revised with a view to increase transparency and to ease the customers.

Proposed revisions

Banks need to disclose the reference rate to which the lending rate is linked when customers take loans.
Banks need to disclose the terms and conditions associated with loans / credit cards while availing of the same.

Benefits to customers

If you have borrowed at a floating rate, banks will inform you of the reference rate to which the floating rate of interest is anchored.
Banks need to inform you of the existing option to convert floating rate to fixed rate or vice versa and also the fee for exercising the same
The banks need to disclose the minimum interest rate clause as well as the reset clause at the time of offering the loan / credit card
Customers need to provide consent on all terms and conditions while accepting to avail of the same
If your account is going to be classified as dormant or inoperative, you need to be informed by the bank before doing the same.

The revisions proposed tend to increase the transparency and increase the confidence of the customer.

BCSBI, transparency in home loans
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Shopping with zero percent interest this Diwali

noreply@blogger.com (Geeyes) — Thu, 15 Oct 2009 03:30:00 +0000

Many companies are offering interest-free financing schemes in order to attract customers and increase sales.

How this works

Some manufacturers bear the entire cost of interest rate while funding.
They pass the processing fee to the customers or share between manufacturers and dealers.
This results in increase of sales since customers can pay instalments without paying interest.
The companies get increased revenue through mass sales.

Some offers present now

Samsung has tied up with Bajaj Finance and is offering triple-zero finance scheme to its customers. Under this scheme, there there is no initial payment, interest charge or processing fee for all its products until October 31, 2009.
Voltas has launched a 0% finance scheme on its mid and high-end air conditioners and water coolers.
Sony and LG have also introduced similar schemes that offer attractive deals on their products.

Though such schemes seem attractive, it is advisable for consumers to contact the relevant companies and get full details before purchasing the same.

zero percent finance, diwali+offers

10 reasons to invest in Gold ETF

noreply@blogger.com (Geeyes) — Tue, 13 Oct 2009 03:30:00 +0000

We are used to buying physical gold for investment. Let us have a look at the advantages of investing in Gold ETFs:

1. No Storage needed:
Gold ETF is a paper financial instrument. There is no physical delivery involved. Hence investors need not worry about the storage and security aspects that are typically associated with investing in physical gold.

2. Purity:
SEBI has imposed strict regulations for gold ETF. The purity of underlying gold in Gold ETFs should be 99.5% and above. Hence investors need not worry of the quality associated with Gold ETF.

3. Low entry charges:
Jewellers and banks generally sell gold at a premium. Jewellers charge premium of 5%-10% (inclusive of making charges) on buying. Banks charge upto 15% towards premium. Gold ETFs charge 1 to 2.5 % as entry / exit load. This charge is low compared to the cost involved in buying physical gold.

4. Low maintenence cost:
Gold (jewellery / bullion) need to be stored using a locker. This is in addition to the premium paid at the time of buying physical gold.

Gold ETFs can be maintained with the help of demat and trading accounts. We need to pay annual maintenence charges for these accounts, which vary from broker to broker. Investors also need to pay the brokerage for each transaction. There are also annual recurring charges which are charged to the fund.

Though there are a number of cost components involved while transacting gold ETFs, the cost involved in Gold ETFs is always lower than that involved in maintaining physical gold.

5. Standard Pricing:
Price of physical gold varies depending on the vendor. Gold ETFs have a standard and transparent pricing mechanism. International gold prices are converted to Indian landed price using the applicable exchange rate. Various duties and taxes are also added to arrive at the landed price of gold.

6. Tax efficiency:
Gold ETFs are not subject to Wealth Tax. Gold ETFs attract long-term capital gains tax after 12 months, whereas in physical gold, the long-term capital gains tax is applicable only after 3 years.

7. Resale value:
Gold ETFs can be easily sold in the secondary market on a real-time basis (i.e. at the prevailing market price). Whereas, while selling physical gold, the jeweller will deduct making charges (the charge that is added while buying gold). As regards banks, they refuse to buy back gold.

8. Gold as an asset class:
The launch of gold ETFs has widened the range of asset classes offered by mutual funds. These funds can definitely form five to 10 per cent of a portfolio as a form of insurance.

9. Less Volatility:
Gold is very less volatile. Even during times of war / WTC attackes, the price of gold was stable. Adding gold to your portfolio reduces the volatility of your portfolio.

10. Highly stable:
Gold is highly stable both physically and its returns. Over a long term period, the returns from gold has been stable.
10 reasons to invest in gold etf, gold etf
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More on Gold ETFs

noreply@blogger.com (Geeyes) — Sun, 11 Oct 2009 03:30:00 +0000

Can I invest through SIP?
Unfortunately, it is not possible to start an automatic SIP in gold ETF by giving post-dated cheques. That is because an ETF has to be purchased on the stock exchange and not from a mutual fund company. If you wish to invest on a monthly basis in a gold ETF, you will have to do so manually by buying the units through your stock broker. The units will get credited to your demat account.

A brief of various Gold ETFs in India
Benchmark Mutual Fund allows investors to buy and redeem the units after the new fund offer, either directly from the fund or from the stock exchange.

UTI Mutual Fund's scheme allows investors to redeem units only through authorised participants, or by selling in the secondary market. The price of the units in the secondary market will, to a great extent, reflect the price of one gram of gold.

Other funds such as Tata Mutual Fund allot units at face value (Rs 10,000 - entry load/10). The net asset value (NAV) of these schemes would reflect the value of the underlying gold. The price of these units in the secondary market reflects the NAV and the supply and demand of the units.
gold etf, queries on gold etf
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