This will get implemented from July 01, 2010.
As per RBI Circular - DPSS.CO.CHD.No. 1832/01.07.05/2009-10 dated 22nd February 2010, no changes / corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations.
In view of the above guidelines, with effect from July 01, 2010 no alterations in cheque will be allowed (even if signature is made at the place of alteration on cheque). These kinds of altered cheques will not be honored by Bank.
Friday, April 23, 2010
Wednesday, April 14, 2010
SHG - A Silent Revolution
Just visited an SHG centre (Yalal Taluka, Ranga Reddy District, AP) where loans are being disbursed to the SHG groups by banks (without collaterals) & the SHG centres are maintained by the Govt (space for SHG meetings provided by the govt & officers appointed to coordinate the activities).
Quite amazed (& touched) by the good work being done here. Banks give loans at about 10% to these SHGs, of which Govt later pays back 7% to the SHG members if proper repayment is done by the SHGs. More interesting numbers - 99% loans given to women, more than 34 lakh SHGs in AP alone, some thousands of crores despatched to SHGs by banks and recovery rate is 95%+ and yes, no security is provided for disbursing the loan, it works on the group guarantee concept (similar to the Grameen Bank model).
Further, govt. disburses monthly old age pension & some support to special (differently abled) people - through the leaders of these SHGs, for which the leaders get a commission - the amazing part is the use of technology here - the SHG leaders are given fingerprint-cum-card-reading machines (looks similar to a credit card swipe machine) to ensure that money reaches the right person - on verification by finger print & access card of the end user (old-age / special person), the machine, which I believe is satellite connected, shows the amount outstanding to the particular person as well as prints out a receipt!
And here we sit in our posh AC offices in cities & curse the government for all the corruption & merely empathize with the poor without knowing the ground realities / taking any active role in their betterment.
The message I learnt - "The world's changing - with or without our contribution, with or without our knowledge."
Quite amazed (& touched) by the good work being done here. Banks give loans at about 10% to these SHGs, of which Govt later pays back 7% to the SHG members if proper repayment is done by the SHGs. More interesting numbers - 99% loans given to women, more than 34 lakh SHGs in AP alone, some thousands of crores despatched to SHGs by banks and recovery rate is 95%+ and yes, no security is provided for disbursing the loan, it works on the group guarantee concept (similar to the Grameen Bank model).
Further, govt. disburses monthly old age pension & some support to special (differently abled) people - through the leaders of these SHGs, for which the leaders get a commission - the amazing part is the use of technology here - the SHG leaders are given fingerprint-cum-card-reading machines (looks similar to a credit card swipe machine) to ensure that money reaches the right person - on verification by finger print & access card of the end user (old-age / special person), the machine, which I believe is satellite connected, shows the amount outstanding to the particular person as well as prints out a receipt!
And here we sit in our posh AC offices in cities & curse the government for all the corruption & merely empathize with the poor without knowing the ground realities / taking any active role in their betterment.
The message I learnt - "The world's changing - with or without our contribution, with or without our knowledge."
Friday, April 9, 2010
New Pension Scheme launched by the Indian Government
The PFRDA has opened the National Pension Scheme (NPS) to the Citizens of India. The following are the basic details in common-man’s terms.
1. Methodology and Authorities Involved
The concept basically is a combination of a Mutual Fund (Systematic Investment Plan) and Annuity purchase from Insurance Company, with a Central Recordkeeping Authority facilitating the choice to the Investor to shift from one Fund Manager to another and between Investment Portfolios while continuing with the same corpus during the Mutual Fund phase.
The Mutual Fund phase would come to an end at the attaining of 60 years of age of the Investor (or earlier if so desired) when the Investor would have to compulsorily withdraw at least 40% (80% in case of earlier exit) of the Mutual Fund Corpus and purchase a lifetime Annuity from any of the approved Life Insurance Companies. The balance amount of the corpus can be withdrawn from the Mutual Fund immediately or in a phased manner before the Investor attains the age of 70.
The authorities involved are
Mutual Fund Stage:
Central Record Keeping Agency: For maintaining the database and corpus details of Individuals and would also allot the Permanent Retirement Account No. (PRAN) and Telephone PIN (T-PIN) to the investor. Presently, NSDL is chosen as the CRA.
Custodians: The Authority who would be actually maintaining the Assets.
Pension Fund Managers(PFM): The people who would actually manage the Funds and take the investment decisions. Presently there are six Mutual Fund Co.s chosen for this purpose (each a special subsidiary of the main Co. created exclusively for managing the Pension Funds), ICICI Prudential, IDFC, Kotak Mahindra, Reliance Capital, SBI Capital and UTI AMC. The Investor has the option (once a year) to make the switch from one Fund Manager to another.
Point Of Presence(POP): The link through which the Investor would open the Account and deposit funds. The following are presently chosen as POP Service Providers; Allahabad Bank, Axis Bank, Central Bank of India, Citibank, Computer Age Management Services, ICICI Bank, IDBI Bank, IL&FS Securities Services, Kotak Mahindra Bank, LIC, Oriental Bank of Commerce, Reliance Capital, SBI & its 6 associates, South Indian Bank, Union Bank of India, UTI AMC.
Trustee Bank: The back end Bank facilitating transfer of funds from POP to PFM.
Annuity Stage
Annuity Service Provider(ASP): The Life Insurance Company who would provide the monthly annuity based pension. The Investor is required to compulsorily hand over 40% of the Mutual Fund corpus as available at the age of 60 years. He can also purchase annuity upto 100% of the Mutual Fund corpus.
2. Eligible persons
Indian Citizen (resident or non-resident) within the age group of 18 to 55. One person can have only one account.
3. Fund Deposit Option
An investor needs to make a minimum of 4 deposits in a year with a minimum of Rs.500 per deposit subject to a minimum deposit of Rs.6000 per year. There is no maximum limit to either the amount of deposit or the number of deposits.
4. Fees and Charges
Initial Onetime Charges:
Rs.90 service tax (approx. Rs.100 in total at present rates)
Annual Charges:
Rs.350 plus 0.0509% of corpus value Plus service taxes. (Approx Rs.386 0.056% of corpus value)
Transaction Charges:
Rs. 30 plus service tax (say approx Rs.33 in total) per transaction.
Transaction for this purpose would include deposits, any change requests, withdrawal request, printed statement request and any other transaction subsequently notified.
Default Penalty:
In case the Investor fails to meet any of the minimum deposit criteria, a default penalty of Rs.100 p.a. would be levied.
5. Fund Investment Options
The Investor is allowed 2 choices is respect of the type of investments to be made with his deposits.
Active Choice
The Investor is provided with three Classes of Investment . E- Equity (High Risk/Return), C- Commercial papers of mainly fixed return nature other than Govt. Securities (medium risk/return) G- Govt. Securities (low risk/return).
The investor has to option to specify any percentage combination among the three (incl. 100% in C or G) subject to a maximum of 50% for E and also indicate the choice of the PFM for this purpose. The investor has the option to annually revise the ratio and/or PFM as per his own evaluation.
Auto-Choice
In case the investor does not want to exercise the Active Choice option, a predetermined ratio would be allocated to his portfolio based on his age starting with 50% E, 30% C and 20% G for persons less than 35 years which would be gradually revised every year to 10% E, 10% C and 80% G by the time he attains 55 years of age. However, he need to indicate the choice of the PFM for this purpose. The investor has the option to annually revise the PFM as per his own evaluation.
6. Risk Profile of Investments
The Scheme does not provide any guaranteed returns. It is based on Mutual Fund concept. The benefits would depend on the performance of the individual fund managers and could differ even between the fund managers.
7. Portability
The Investor can continue with the same NPS-PRAN from any city/town in India by changing his choice of POP-SP.
8. Conclusions
3 & 4 read together implies that if an investor is investing only the minimum amount of Rs.6000 (in instalments of Rs.500 each month) approximately Rs.786 (about 13%) would be deducted for charges and the balance amount would be invested. However, if he makes quarterly deposits of Rs.1500, Rs.522 (about 9%) would be deducted. In addition, 0.056% of earlier years’ investments would also be deducted, however, the returns generated would be utilised for this purpose.
For higher amount of annual deposits, the percentage would significantly come down due the partly fixed nature of annual charges. Like, if investment is made for Rs.10000 per quarter, the total charges would be Rs.541 (about 1.5%).
Since there is a per transaction charge, it would be advisable to make only quarterly deposits. For a small investor who invests only the minimum amount, this may work out to be costlier than a normal mutual fund.
However, it offers a good option to easily switch from one fund manager to anothter and also from one security mix to another.
Useful Link: www.pfrda.org.in
1. Methodology and Authorities Involved
The concept basically is a combination of a Mutual Fund (Systematic Investment Plan) and Annuity purchase from Insurance Company, with a Central Recordkeeping Authority facilitating the choice to the Investor to shift from one Fund Manager to another and between Investment Portfolios while continuing with the same corpus during the Mutual Fund phase.
The Mutual Fund phase would come to an end at the attaining of 60 years of age of the Investor (or earlier if so desired) when the Investor would have to compulsorily withdraw at least 40% (80% in case of earlier exit) of the Mutual Fund Corpus and purchase a lifetime Annuity from any of the approved Life Insurance Companies. The balance amount of the corpus can be withdrawn from the Mutual Fund immediately or in a phased manner before the Investor attains the age of 70.
The authorities involved are
Mutual Fund Stage:
Central Record Keeping Agency: For maintaining the database and corpus details of Individuals and would also allot the Permanent Retirement Account No. (PRAN) and Telephone PIN (T-PIN) to the investor. Presently, NSDL is chosen as the CRA.
Custodians: The Authority who would be actually maintaining the Assets.
Pension Fund Managers(PFM): The people who would actually manage the Funds and take the investment decisions. Presently there are six Mutual Fund Co.s chosen for this purpose (each a special subsidiary of the main Co. created exclusively for managing the Pension Funds), ICICI Prudential, IDFC, Kotak Mahindra, Reliance Capital, SBI Capital and UTI AMC. The Investor has the option (once a year) to make the switch from one Fund Manager to another.
Point Of Presence(POP): The link through which the Investor would open the Account and deposit funds. The following are presently chosen as POP Service Providers; Allahabad Bank, Axis Bank, Central Bank of India, Citibank, Computer Age Management Services, ICICI Bank, IDBI Bank, IL&FS Securities Services, Kotak Mahindra Bank, LIC, Oriental Bank of Commerce, Reliance Capital, SBI & its 6 associates, South Indian Bank, Union Bank of India, UTI AMC.
Trustee Bank: The back end Bank facilitating transfer of funds from POP to PFM.
Annuity Stage
Annuity Service Provider(ASP): The Life Insurance Company who would provide the monthly annuity based pension. The Investor is required to compulsorily hand over 40% of the Mutual Fund corpus as available at the age of 60 years. He can also purchase annuity upto 100% of the Mutual Fund corpus.
2. Eligible persons
Indian Citizen (resident or non-resident) within the age group of 18 to 55. One person can have only one account.
3. Fund Deposit Option
An investor needs to make a minimum of 4 deposits in a year with a minimum of Rs.500 per deposit subject to a minimum deposit of Rs.6000 per year. There is no maximum limit to either the amount of deposit or the number of deposits.
4. Fees and Charges
Initial Onetime Charges:
Rs.90 service tax (approx. Rs.100 in total at present rates)
Annual Charges:
Rs.350 plus 0.0509% of corpus value Plus service taxes. (Approx Rs.386 0.056% of corpus value)
Transaction Charges:
Rs. 30 plus service tax (say approx Rs.33 in total) per transaction.
Transaction for this purpose would include deposits, any change requests, withdrawal request, printed statement request and any other transaction subsequently notified.
Default Penalty:
In case the Investor fails to meet any of the minimum deposit criteria, a default penalty of Rs.100 p.a. would be levied.
5. Fund Investment Options
The Investor is allowed 2 choices is respect of the type of investments to be made with his deposits.
Active Choice
The Investor is provided with three Classes of Investment . E- Equity (High Risk/Return), C- Commercial papers of mainly fixed return nature other than Govt. Securities (medium risk/return) G- Govt. Securities (low risk/return).
The investor has to option to specify any percentage combination among the three (incl. 100% in C or G) subject to a maximum of 50% for E and also indicate the choice of the PFM for this purpose. The investor has the option to annually revise the ratio and/or PFM as per his own evaluation.
Auto-Choice
In case the investor does not want to exercise the Active Choice option, a predetermined ratio would be allocated to his portfolio based on his age starting with 50% E, 30% C and 20% G for persons less than 35 years which would be gradually revised every year to 10% E, 10% C and 80% G by the time he attains 55 years of age. However, he need to indicate the choice of the PFM for this purpose. The investor has the option to annually revise the PFM as per his own evaluation.
6. Risk Profile of Investments
The Scheme does not provide any guaranteed returns. It is based on Mutual Fund concept. The benefits would depend on the performance of the individual fund managers and could differ even between the fund managers.
7. Portability
The Investor can continue with the same NPS-PRAN from any city/town in India by changing his choice of POP-SP.
8. Conclusions
3 & 4 read together implies that if an investor is investing only the minimum amount of Rs.6000 (in instalments of Rs.500 each month) approximately Rs.786 (about 13%) would be deducted for charges and the balance amount would be invested. However, if he makes quarterly deposits of Rs.1500, Rs.522 (about 9%) would be deducted. In addition, 0.056% of earlier years’ investments would also be deducted, however, the returns generated would be utilised for this purpose.
For higher amount of annual deposits, the percentage would significantly come down due the partly fixed nature of annual charges. Like, if investment is made for Rs.10000 per quarter, the total charges would be Rs.541 (about 1.5%).
Since there is a per transaction charge, it would be advisable to make only quarterly deposits. For a small investor who invests only the minimum amount, this may work out to be costlier than a normal mutual fund.
However, it offers a good option to easily switch from one fund manager to anothter and also from one security mix to another.
Useful Link: www.pfrda.org.in
Friday, March 12, 2010
Basics of wine tasting: Look. . Swirl. . Smell. . Taste and enjoy
Wine seems to be latest upcoming buzz in India. Learning how to taste wines is an adventure that will deepen your appreciation for both wine and wine makers. Here are some tips, which we learned in the "Wine Tasting Event" organised by Tie:
Types of wines and food to go with: A simplistic approach is that wines are of 2 kinds - white and red (called so due to the colour and the grapes from which they are made - white wine being light textured and made from regular grapes and red, having a heavier texture is made from black grapes)Again, a simplistic approach in matching with food is that while white wine is served with white meat, red with red meat. However, generally, heavier meals and sauces require bigger wine to match their weight and lighter meals and sauces would require lighter and more subtle wines
A further classification can be on the basis of residual sugar content. Wine with low sugar content is called "dry" wine and with higher sugar content called "sweet". The drier the wine, the more fermented (and generally older) it is.- How to sip: (a) Pour the wine in a wine glass (which is broadest at its middle).To get a good impression of your wine's aroma, swirl your glass for a solid 10-12 seconds (this helps vaporize some of the wine's alcohol and release more of its natural aromas) and then take a quick whiff to gain a first impression (Remember not to breath out into the wine). (b)Take a taste. Start with a small sip and let it roll around your mouth. (Notice the change in taste of wine during your meal itself).
- Some interesting tips / facts:
- Wine need not be always expensive (although a champagne must be at least $20 for it to taste good)
- Lables of most wine bottles contain info on its origin / nature / suggestions for food to go with etc.
- Whatever people say, the bottom line is to choose a wine that you find to be an appealing combination with a particular dish. If you really enjoy wine, be prepared for a long process of trial and error
- Some good online sources : Smartselector.com, wikipedia (I should not write this), winespectator.com
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