Invest In India » Personal Finance

Cheaper loan rates to woo customers this festive seasons

Tushar Mathur — Sat, 28 Aug 2010 19:15:16 +0000

PSUs are planning to attract customers by offering them loans at a cheaper interest rate.

In order to increase the customer in their loan registers banks are planning to woo individuals with cheaper loans even as interest rates are on the rise.

Considering Ganesh Chaturti and Diwali round the corner public sector banks are trying to instill the festive spirit and drive people to take loans.

Consumer loans could be now available even at 150 basis points less than they were for the next few months as banks unveil special offers.

KR Kamath, CMD, PNB, “We are planning to lend at lower rates to small borrowers. Car loans will be cheaper by 50 basis points and will be available at 10%, while home loans for up to Rs 50 lakh will be available at a fixed rate of 8.5% across maturities whereas these are now being at 10-10.5%.”

OP Bhatt, chairman, SBI, says, “Our festive offers for retail borrowers will be out soon and we believe that if we bring down rates, consumers will borrow because typically people do buy cars or houses during the festive season.’’

However this strategy of attracting customers by reducing the rate is not in swing among the private banks.

Pralay Mondal, Head, Retail assets, HDFC bank, said, “There is no question of reducing interest rates for consumers even if it is the festive season. In a rising interest rate regime, funds are not going to become cheaper.”

PC John, of Federal Bank, adds, “We are not planning to bring down interest rates either on auto or home loans. Those banks with surplus liquidity may want to cash in on the festival season.We have just enough liquidity.”

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Cheaper loan rates to woo customers this festive seasons

Sebi may increase limit upto 2 lakh for retail investors

Tushar Mathur — Thu, 19 Aug 2010 09:03:52 +0000

Securities and Exchange Board of India (Sebi) has intended to increase the investment limit for retail investors in public issues. This move by Sebi will be welcomed by the investment banking and broking community.

The market regulator said in a discussion paper released on Wednesday that the limit could be increased from the current cap of Rs1 lakh to Rs. 2 lakh.

Market investors have been asked to submit comments on the proposal before September 3.

There was a debate in the recent past regarding the Rs 1-lakh. The investors’ are of the opinion that the low investment limit requires lakhs of applications from small investors for the retail portion to be fully subscribed, making it a logistical nightmare.

Case in point is, in a Rs 5,000-crore issue, a 35 per cent reservation for retail investors would require Rs 1,750 crore to be raised through small investors. Assuming every retail investor submits a bid for Rs1 lakh, it would require 175,000 applications for the segment to be fully subscribed. Not surprisingly, quite a few recent issues that were subscribed more than one time saw the retail portion remaining undersubscribed.

The discussion paper by Sebi says, “This could be a daunting task, considering that in the case of well oversubscribed issues, the number of applications received from retail individual investors was in the range of 35,000 to 70,000.”The issue of attracting retail investors in public issues has been high on the regulator’s agenda. Only recently, it allowed issuers to close the bidding for qualified institutional buyers one day prior to retail investors. The premise was that retail investors would get enough time to make investment decisions based on the appetite of institutions.

“It is more than five years since the limit of Rs 1,00,000 for defining a retail individual investor was stipulated. It is felt that the aforesaid limit… needs to be enhanced,” notes Sebi’s discussion paper.

©2009 Copyright by Invest In India
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Sebi may increase limit upto 2 lakh for retail investors

Loans to get costlier as PSU’s increased their base lending rate

Tushar Mathur — Tue, 17 Aug 2010 03:07:45 +0000

State Bank of India (SBI), the country’s largest banking player on Monday beefed up its benchmark lending rate by 50 basis points to 12.25%.

This increase in the base lending rate by the SBI signals the dripping down of the Reserve Bank’s policy of tight money.

State Bank, which along with its associates control a quarter of bank loans and deposits in India, said it was raising its benchmark prime lending rate (BPLR) 50 basis points to 12.25% effective from 17^th of August 2010.

This will make home, vehicle and corporate loans to existing customers costlier. However, for new borrowers the base rate, which became effective from 1 July this year, stands at 7.5 per cent.

SBI also raised its fixed deposit rates by up to 150 basis points across various maturities.

The decision comes days after RBI increased its key rates to control rising prices.

The Reserve Bank of India has increased its main short-term lending rate by 100 basis points since mid-March and the borrowing rate by 125 points, to curb inflation that has stayed in double-digits for 5 months.

Meanwhile, other public sector banks (PSU) have also revised their money lending and deposit rates. Punjab National Bank, the country’s second largest lender, has increased its benchmark prime lending rate by 75 basis points. This is the sharpest increase among all lenders.

Bank of Baroda, Corporation Bank and Oriental Bank of Commerce have also increased their standard lending rates by 50 basis points.

©2009 Copyright by Invest In India
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Loans to get costlier as PSU’s increased their base lending rate

Is PAN card necessary for an NRI?

Tushar Mathur — Sun, 04 Apr 2010 08:35:34 +0000

Income Tax Department issues the PAN card or the Permanent Account Number card, which is a laminated card with 10 digit alphanumeric number. A PAN card is not a must for the day to day life, but if you want to invest in share market, claim refunds on TDS etc., better have to posses a PAN card. If you have a PAN card; property deals, getting telephone connection, opening bank account, all becomes easy.

PAN card contains all the important facts regarding the PAN card holder. It has 10 digit ID number. Your name, date of birth, photograph, your father’s name and your signature also are engraved or embossed on it. According to the recent rules of SEBI, one without a PAN card cannot trade in shares, debenture or anything related to the depositary. So if you are an NRI and intend to invest in share market other similar financial sectors, make sure that you have a PAN card.

PAN card is mandatory for return of income and all correspondence related to income tax. All financial transactions related to Central Board of Direct Taxes also need PAN card.

Applying and getting a PAN card is not at all difficult. You can use your passport as residence proof and ID proof. You can apply and get PAN card through the internet also. They will notify the PAN card details by mail. Or else you can download the PAN card application form from the net, fill it up, attach the required documents and forward the application to the IT department through your relatives in India. The PAN card will reach your cited address within two months.

If you are applying from any of the ninety nine countries with foreign address delivery facility, you can apply online and send additional documents direct to the department. But, the possibility of the copy of the online application and attachments reaching the office of Income Taxes, within 15 days of applying online, will not be easy.

©2009 Copyright by Invest In India
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Is PAN card necessary for an NRI?

Which Life Insurance Policy Is The Best For Your Parents?

Tushar Mathur — Fri, 02 Apr 2010 06:21:49 +0000

There are a lot of life insurance policies suitable for our parents who are retired, old, men and women. All Insurance companies, national or private, cater to the needs of the elderly.   Though, you are able to provide food and shelter to them, you may not be able to afford high hospital bills, if they fall ill. So, it is advisable to choose a policy with medical claims, because with old age your parents are prone to diseases easily.

For NRI people it is easy to send money to their parents. But, along with it you must be aware of the importance of health insurance also. Insurance companies like Bajaj Allianz and ICICI Lombard offers a lot of benefits with their health care policies, making it the best gift you can give to your parents. For example, the ICICI Lombard’s Rishtey Parents Life Insurance gives 2-year life cover for a single premium, which is automatically renewed after the first year. It provides free health check-ups. You can pay the premium in interest-free equal monthly installments.   The best part is that this policy can be renewed up to 75 years of age.

Bajaj Allianz has a Silver Health Policy which is for people as old as 70 years. For this policy medical check-up is a must. But the charges will be returned, if the policy is accepted. The good news is that this policy covers pre-existing diseases also. Pre-existing diseases get coverage of 50% of the sum assured from the second year onwards. For those who value their parents, insuring them has become popular. It will give peace of mind to all. We insure our valuables like car, house, and gold without thinking twice. But we think many times before insuring our parents. They are the first you should insure, because you can never replace them, once they are lost.   All others –house, car, ornaments etc – you can replace, with a new one

©2009 Copyright by Invest In India
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The Increasing Wealth Management Services

Tushar Mathur — Mon, 29 Mar 2010 07:54:04 +0000

There are people who have a lot of money, but don’t know how to invest or deposit it wisely.   They just leave it in the bank as dead asset. Sometimes they trust their friends or relatives and invest in some foolish schemes. These schemes may or may not give them returns. This is where the Wealth Management Services come in.

Like any other service sectors, this too serves you. These Wealth Management Services do nothing except to give advices, as and when you need, to increase your wealth. They are the experts in the financial field and know the latest trends and movements of financial institutions like banking, insurance, shares, property etc.

It was a monopoly of the wealthy people before. But now, with the laymen becoming more and more aware of shares, mutual funds, gold funds and other profit making fields, Wealth Management Services are increasing by the double every year. Almost all the leading banks have started their own Wealth Management Service section. This service is offered by the Canara Bank and State Bank of India. Private Banks like ABN Amro, Citigroup, ICICI etc. also give this facility.

These Wealth Management Services are targeting the NRI’s primarily, because they bring the biggest chunk of foreign money, which amounts to about $500 billion. Thus they are the largest customers of Personal Wealth Management sector in India. Before, these NRI’s had to depend on foreign Wealth Management Services to manage their funds. With the increasing number of such services here (in India) itself, they don’t have to look abroad now.

Preparing a budget is not what the Wealth Management Services do. They help you to plan and save for your future. They help you to manage your money wisely and make more profits.   Provide the executives of these services, the details of your income and other earnings, and then you can relax. They will plan everything else for you, to build your financial status.

©2009 Copyright by Invest In India
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Plan To Avoid Tax Payment

Tushar Mathur — Mon, 29 Mar 2010 07:52:51 +0000

Not paying the tax is a punishable crime, but making use of the various loop holes in the income tax rules, to avoid paying the tax, is not a crime. For that, you need a thorough understanding of the income tax laws and its present amendments. The income tax law offers you many deductions, exemptions and concessions. If you are a cunning person, you can utilize these concessions and reduce the amount you have to pay as tax.

The following tips may help you to take wise steps. First, there is provision for tax exemption for interest earned on NRE/FCNR funds. But, this concession is not given to deposits in NRO accounts. Second, tax is not levied on interest and repayments of principal amount of home loans, which you have taken to purchase property in India. If you have to avail of this facility, you have to file income tax returns in India. Another thing about this deduction is that it is only upto a certain limit.

Third, trading in equities and share also helps to avoid tax payments, because gains earned on sale or transfer of equities is excluded from income tax. At the same time, profit from debentures or shares of Indian firms, or securities of Central Government purchased in foreign currency is taxable. The rate is 20% flat. Fourth, gains from UTI units are income tax exempted.

The Double Tax Avoidance Agreement that India has signed with some other countries keeps Indians from paying double tax for the same income if the income is taxed in one country. By using these provisions we are not cheating the government or doing anything illegitimate. We are only using these options to reduce our tax liability. Actually by planning beforehand you can increase the amount that comes into your hand. Moreover, there is no need for you to rack your brains thinking about reducing tax. There are experts to plan it for you.

©2009 Copyright by Invest In India
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How to buy precious stones?

Tushar Mathur — Mon, 22 Mar 2010 04:05:32 +0000

Today the precious stones are not only the item related to the astrology but also being an ideal way to show your status, wealth and power. Therefore many NRIs are trying to invest their money into these precious stones. But there are many questions regarding the investment into these precious stones that are frequently asked by the NRIs before investing. Should they invest in the precious stones, will this investment be profitable for them and how they can invest into these precious stones.

Some people don’t even try to invest because of lack of their knowledge of investment into these stones. They generally do not know about the future of such investment. Investment experts say that if you by precious stones then you are really assured for getting paid for what you invest but there should not be any middlemen. Before purchasing these stones you must have the knowledge and good choice of precious stones.

If you are looking for the diamond jewelry and want to buy from India, then you sho8uld go for some good stores for good deals. Combination of ruby, gold and pearls may also be picked as a great combination with the diamond jewelry. These can give them a finest touch of style, elegance and glitz. By knowing some tips and information regarding the precious stones, such as how to purchase or what to purchase, you may invest wisely. Therefore the measurement of the quality is must.

You can browse information on the precious stones about their sizes and shapes. You should also ensure the guarantee on purchase as some good stones always come with the certificates of their origin. For this all you may also consult with a gemologist. Generally it is hard to find the best stones so it may take some time for the best deals, therefore you just be patient and look for the better one. By these all ways you may get good benefits in investment of money in precious stones.

©2009 Copyright by Invest In India
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IOB hiked deposit rates, Central Bank reduces rates of loan for doctors, revise deposit rates

Tushar Mathur — Thu, 18 Mar 2010 11:31:00 +0000

On Monday Indian Overseas Bank (IOB) has revised its deposits interest rate. The revised rates will be effective from March 15. As per revised rates for deposits of less than Rs 1 crore for tenure of 270 days and less than one year, the rate has been fixed at 6%, while for one year to less than five years at 6.75% and five years and above at 7.25%. And for a deposits of Rs 1 crore and above for a period of one year and above, the rate has been fixed at 6.5%.

Another bank Central Bank of India, a state-owned lender is offering loans to doctors at low interest rate. Bank has reduced interest rates on loans by 150 basis points for doctors for purchase of equipment and 100 basis points for construction of nursing home/ clinic/clinic cum residence (from 12% to 10.5 % for purchase of equipment and from 13 % to 11% construction of nursing home/ clinic/clinic cum residence.)

The bank has also announced wavier of the processing fee for its direct housing finance scheme, personal loan to corporate and non-corporate employees, Cent Jewel, teachers’ loan, Cent Vyapari, Cent Swabhiman plus until the end of the month.

The bank has also hiked its deposit rates on domestic term deposits from 25 basis points to 150 basis points on the deposits of Rs 15 lakh and above. The revised rates will be effective from Monday. The interest rate on domestic term deposits above Rs 15 lakh, but less than Rs 1 crore has been revised to 6.5% (6.25%) for the period one year to less than two years has been revised to 6.75% (6.5%) for two to less than three years and to 7% (6.5%) for three to less than five years.

©2009 Copyright by Invest In India
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IOB hiked deposit rates, Central Bank reduces rates of loan for doctors, revise deposit rates

Pros and Cons of having Credit Cards

Tushar Mathur — Sun, 14 Mar 2010 04:35:11 +0000

Credit Cards are issued by banks and financial institutions. The card holder will be allowed a maximum credit line. The card holder can use it to purchase whatever he wants from the shops where the card is recognized. The price will be deducted from the card holder’s account on the due date, if the bill does not exceed the credit line. If it exceeds, he or she will have to deposit the excess in the bank before the due date or within the grace period allowed. If not, interest will be added to the balance amount for the period it stays unpaid.

Pros

No need to carry money on person always. Fraud protection is another merit of credit cards. In some countries the shop and the card issuer are jointly liable for purchases of defective products. Enhanced product warranty, free loss and / or damage coverage for new products are also advantages of credit card system. In addition to these virtues a good customer – one who pays his dues on time – can make use of the free interest period, the reward points and discount offers that comes along. The company may increase the credit limit for such customers.

Cons

Though introductory interest rates will be low for a period 6 to 12 months, it will increase drastically after that period. In the event of missed payment the default rate of 20 to 30 percent is calculated. The card issuer can increase the interest rate arbitrarily. A customer, who is unaware of these stipulations, can find himself in great debt, if he misses even one payment.

How many are enough?

As long as you are a responsible and level headed person there is no problem in keeping two or more credit cards. If you strictly follow the rule to pay before the due date there will be no hassles. To be on the safe side two credit cards will do, one for small, frequent purchases and the other for big purchases occasionally. Eventually, it becomes clear that it is not the number that counts but the way the credit card is used.

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Pros and Cons of having Credit Cards