Sunday, May 31, 2009
Friday, May 29, 2009
ICICI Bank has launched an electronic card in association with mcheck, a mobile payment solution provider. This card is aimed at helping people carry out transactions like bill payment etc from their mobile phones. This card will enable the user to make payments from mobile phones.
The ICICI bank customers can use this card to make payments for bills, money transfer, buy movie tickets , airline tickets etc. This will be another step in making banking an easy and enjoyable experience.
Given the popularity and reach of mobile phones in India, it is expected that mobile phones will be used as a medium to deliver entertainment, banking services and news to the user in near future. The launch of 3G services is expected to kick start the process. 3G will set the ball rolling and we will see a new revolution of sorts in the way mobile phones are used in India currently.Most of the services required for daily use will be migrated to mobile .
World famous investment advisor Marc Faber believes it is time for every prudent citizen to become one's own central bank by owning some gold. He believes that gold will be the safest and most valued asset class to hold in times to come. His rational for saying so are
1. With billions of dollars being printed world over by governments to pump into economy to stave off the depression, the risk of inflation in some time is real. The inflation in consumer prices will rise leading to increase in the value of gold .
2. The unprecedented printing of money will also lead to reduced purchasing power of paper currency in due coarse of time and as such gold will gain value in future.
3. Physical gold's supply is limited and with increased demand its price is bound to go up.
4. More and more central banks will look to buy and keep gold , thereby pushing the overall price of gold up.
Read more on this at http://www.business.in.com/interview/close-range/is-a-gold-bubble-building-up/372/1.
Thursday, May 28, 2009
Tuesday, May 26, 2009
Monday, May 25, 2009
ii. You must keep all replaced parts for inspection. Do not dispose them till the surveyor gives his/ her approval for the same.
iii. You should never enter into a compromise or make an out-of-court settlement with the injured or legal heirs of the deceased without the insurer's consent since these compromises or settlements are not payable in terms of insurance policy.
iv. The documents you need to deposit with your insurance company include the original bill of repairs/ replacements, cash memo, payment proof,etc, for finalisation/ disposal of your claim by the insurance company.
v. You cannot submit xerox copies of bills/ invoices to your insurance company. Do submit original bills.
vi. Once your claim is approved, arrange to deposit the salvaged/ damaged parts with your insurers. Else they may deduct the salvage value from the claim amount.
vii. Do cooperate with the advocate deputed by the insurance company.
EXCLUSIONS TO WATCH OUT FOR
i. There is a compulsory deduction made when you claim the loss amount. For example, IFFCO-TOKIO General Insurance Co Ltd deducts Rs 500 when a claim is made. This amount differs from company to company and is meant to protect against petty claims.
ii. Other exclusions under the package policies include wear and tear, breakdowns and consequential loss among others.
iii. But the most important exclusion, is the damage to tyres, tubes and other nylon, glass and plastic accessories.
Damage to tyres and tubes is not paid for unless the entire vehicle is damaged at the same time of accident. Liability is limited to 50 per cent of the cost of replacement.
Sunday, May 24, 2009
Saturday, May 23, 2009
You must have received SMSes,calls from telecallers or letters from banks saying that they approved loan of certain amounts for you. To take it, you should contact your branch, or send a message from your phone to a particular person or number. While using your phone to check the details of your credit or debit card, you will often find an automated message saying that you are eligible for a loan on phone of a particular amount. Offers of credit cards, too, fall in the same category since the issuing bank is comfortable extending a certain amount of credit to you. Typically, people receive such offers from banks with which they have some relationship—loans, salary accounts, credit cards, among others—and there is often a time limit for accepting the offer. The question is, does it make sense to go for them?
Eligibility criteria- Generally, a bank judges your eligibility before offering a pre-approved loan. This is based on your track record with the bank. For instance, if you have a salary account, the bank will have an idea of your income and cash flow. It could also be based on the amount in your savings account or your servicing of existing loans with the bank.For a secured pre-approved loan, banks not only verify if you meet the above criteria, but also do an asset quality check. An asset quality test simply means the bank will check the kind of asset you are set to buy using the loan—the type of house or car, for instance. They will sanction and disburse the loan only if it fits their predetermined criteria.
So how is it different from the normal loans ? Well actually, they are not different at all from them. Its just that here the bank is making an effort to reach out to you and offer you a loan, rather than you approaching the bank.In terms of cost etc there is no difference at all . Sometimes, banks might sweeten the deal by offering processing fee waiver etc but those concessions are generally available to all the customers on negotiation.
Will you definitely get the loan since its pre approved? No . Infact the whole offer is just to entice you to approach the bank. The bank will conduct its due diligence like it does for all cases and only if you meet all their criteria will you get the loan. The pre approved is infact not really approved loan. So you should be prepared to have your loan request rejected or declined by the bank which offered you the pre-approved loan.
Why do banks do it? Banks do it get as many customers as possible. They are driven to run such campaigns out of competition to garner maximum customers. Also since most of the terms and conditions are similar across banks, they try and differentiate themselves by running such offers. But , in reality they are just trying to get customers to approach them for loans.
Is their any benefit at all in this? One area where a pre-approved loan may have an edge is the time taken in processing the loan. Since banks typically extend such offers to existing customers, the processing can be simpler and quicker, and the paperwork done with a bank representative at a place and time that suits the borrower. The bank already has the PAN, bank statements, proof of residence and most of the other information that is required to have an a prospective borrower under the Reserve Bank of India’s ‘Know Your Customer’ norms. This also helps in processing the loan.
Should you fall for it? You should look at these offers with a pinch of salt. You must not approach a bank simply because it is offering you a "pre approved loan". Rather you must do your research properly by shopping around to find the best deal for you in terms of rate of interest charged, penalties like cheque dishonour cheque, late payment fees etc, the repayment period,prepayment penalty etc. Based on all this , you must approach the bank. Pre-approved or not ,you must take loans only from the lender which is offering you the best deal.
Friday, May 22, 2009
Statutory Liquidity ratio(SLR)-The amount of liquid assets, such as cash, precious metals or other short-term securities, that a financial institution must maintain in its reserves. The statutory liquidity ratio is a term most commonly used in India.
Reverse Repo rate -This is the exact opposite of repo rate. The rate at which RBI borrows money from the banks (or banks lend money to the RBI) is termed the reverse repo rate. The RBI uses this tool when it feels
there is too much money floating in the banking system.If the reverse repo rate is increased, it means the RBI will borrow money from the bank and offer them a lucrative rate of interest. As a result, banks would prefer to keep their money with the RBI (which is absolutely risk free) instead of lending it out (this option comes with a certain amount of risk). Consequently, banks would have lesser funds to lend to their customers. This helps stem the flow of excess money into the economy
3.By mandating a limit on investment to risky industries and sectors - In order to ensure that the money deposited by the customers are invested wisely by banks, RBI also , sometimes mandates a ceiling only upto which a bank can invest in a particular industry. For example, recently RBI had advised banks to be cautious towards realty sector lending as it was perceived to be relatively risky. On the other hand, it also makes banks lend to few sectors on priority basis.
4. By carrying out compliance and quality audits- RBI has laid down rules and regulations for banks . Each and every bank is required to follow these regulations while running the branch operations. These rules and regulations are meant to protect the customers interest while keeping the bank's balance sheet in good health. To ensure that each and every bank is following these rules and regulations while discharging their duty, RBI carries out compliance audits regularly where it checks the process compliance on part of the bank. It also checks the books of accounts for any irregularity. if any violation or irregularity is noticed, banks are expected to take note of that and are required to resolve that in a time bound manner.
5. By releasing financially unsound banks - RBI also comes out with an advisory where it lists down the names of banks which are financially not sound and advises customers to stay away from these banks.This is done to ensure that such banks do not continue to operate .
6. By getting insolvent bank to merge with a large bank - At times, even after doing everything, banks fail. It is a reality and one needs to tackle this as well. Sometimes RBI compensates every customer of a bank which went bust upto a maximum of Rs 100000 or his actual savings whichever is higher. But RBI has in the past also tried to salvage the situation by getting the insolvent bank to merge with a large financially sound bank/ This ensures that the new entity is a larger one and the customers of the old bank do not suffer. An example which comes to our mind is the case of Global Trust bank into Oriental Bank Of Commerce following the insolvency of GTB.
Thursday, May 21, 2009
1. Rate of interest- The first and the most obvious thing to look at while deciding on your fixed deposit is the rate of interest being offered by various banks. The rate of interest can vary a great deal between banks for similar tenure of fixed deposit and hence it makes sense to find out the bank which gives you the best deal. However, you must also consider the safety and stability of the bank itself . Generally , the co-operative banks offer higher rate of interest as compared to other bigger banks like SBI, ICICI etc. But since co-operative banks are not as solvent and stable as some of the other banks, you will do well to stay away from them. You must compare rates offered by similar banks. For example, you may consider the rates offered by SBI, ICICI, PNB, HDFC, AXIS,CITIBANK,HSBC etc. This is just an indicative list. The idea is to stick to larger banks.
3. Tax Benefit - If you are looking to invest your money in safe and secure manner while also saving tax under Sec 80 C on Income Tax Act, then tax saving FDs are just right for you.In that case , choose only those FDs which offer tax benefits under Sec 80 C. All FDs do not qualify for tax break under Sec 80C. Also you must consider the rate of interest offered by various banks on their tax saving FDs and settle for the one giving you the best deal.These fixed deposits have a lock-in period of five years and premature withdrawal is not allowed. You can’t use this deposit as a means to secure loan from the bank and the maximum amount you can invest in this instrument is Rs 1 lakh. HDFC Bank at present offers 9.50% interest (calculated quarterly) on tax-saving FDs as well as on regular FDs for 5 years. ICICI Bank, on the other hand, gives 8.5% interest (calculated quarterly) on tax-saving FDs and 9.5% (calculated quarterly) interest on regular FDs for 5 years.
If you fall in the higher tax-slab, investing in tax-saver FDs will fetch you more return than a regular FD as tax-saving FDs are exempted under Section 80C.
4.Interest reinvested or paid - Almost all FDs offer the option of either having the interest amount reinvested in your FD or have the interest amount cashed out. The option that you need to choose will depend on your needs. For example, if you are a retiree or a senior citizen who requires liquidity at regular intervals, then you might consider opting to cash out your interest payment. However, if you are still young and in accumulation stage, then you must have your interest component reinvested . this will ensure higher effective rate of interest for you at the end of the tenure and your interest component too earns interest on it.
5. Splitting the FD -TDS (tax deductible as source) at 10% is applicable on fixed deposits in India , if the interest earned exceeds Rs 10,000 in a financial year. To avoid TDS, you can split your fixed deposits, that is, open fixed deposits in different branches of the bank, so that the interest earned does not exceed Rs 10,000 in a particular branch. You could also open fixed deposits in different banks to avoid TDS. Splitting you fixed deposits has another benefit as well. If you are in need of urgent cash and need to withdraw money, you won't have to break all your fixed deposits.
Wednesday, May 20, 2009
1. CHEATING PEOPLE OF MILLIONS BY MAKING FAKE CREDIT CARDS
2.CREDIT CARD SKIMMING FRAUD
3. ATM SCAM
4.CHIP AND PIN FRAUD
Hope that these videos would have given you the insight into the grave danger these scamsters pose to everyone carrying this plastic . We need to be more vigilant and careful with our cards. Its after all money that we are dealing with so what if its in plastic form.
Credit scores are becoming increasingly important in today's world. These scores determine whether or not a person gets credit or loan from the lender and at what rate . The use of credit scores is being made at various places and its usage is increasing at exponential rate.As such having a good credit score can do a great deal of good to you. Few of the direct and obvious benefits that you will get because of good credit score are as under:-
1. Loans at lower interest rate - While a person having a bad credit score is denied a loan completely, a person with good credit score will not only get a loan ,but, will get the loan at a much lower rates. This is because banks and financial institutions follow risk-based pricing, while extending credit. Risk based pricing means , the banks charge interest rate as per the perceived risk profile of a customer i.e. charge higher rate of interest to a customer who is perceived risky and lower rate of interest to a person who has good credit history. A higher CIBIL/credit score denotes better credit history and consequently, you will get loans at lower rate of interest.
2. Utilities too will be linked to your credit score - In most of the western countries , credit scores are used by utilities providing company to verify the credit history of the applicant before deciding to extend the facility to them. In India too going forward, your credit scores will be used by mobile company, electricity provider etc before they decide to offer their services to you. So, a good credit score is not only handy while availing credit or loan , but also for availing other services as well. Not only this, the credit rating agencies will going forward also consider your payment of utility bills history also while arriving at your final credit score. So its imperative that we pay off all our utility bills promptly and on time.
3. Better chance at getting a new job- Some of the recruiters in sensitive industries like financial services, BPO etc do a check on the candidates credit score also to find out his/ her credit history. A peek into credit history of a person gives vital information about his financial condition , but, more importantly it also can point out "integrity issues" of the candidate ,if any.Thus having a credit history full of cheque and loan EMI bounces ,loan defaults etc wont be viewed very positively by the prospective recruiter. This is though not done in India currently since credit score is not available to anyone other than banks/FIs as on today. However, this is expected to change with CIBIL working on a proposal to make CIBIL scores available to general public on payment of a fee.
So,what are the ways in which we can improve or maintain a high credit score? I am listing down few of the tips for the same.
Tips to Improve or Maintain a High Credit Score:
1. Make loan payments on time and for the correct amount.
2.Avoid overextending your credit. Unsolicited credit cards that arrive by mail may be tempting to use, but they won't help your credit score.
3.Never ignore overdue bills. If you encounter any problems repaying your debt, call your creditor to make repayment arrangements. If you tell them you are having difficulty, they may be flexible.
4. Be aware of what type of credit you have. Credit from financing companies can negatively affect your score. 5.Keep your outstanding debt as low as you can. Continually extending your credit close to your limit is viewed poorly.
6.Limit your number of credit applications. When your credit report is looked at, or "hit," it is viewed as a bad thing. Not all hits are viewed negatively (such as those for monitoring of accounts, or prescreens), but most are.
Credit is not built overnight. It's better to provide creditors with a longer historical time frame to review: a longer history of good credit is favored over a shorter period of good history.
Hope by following the above mentioned tips , you will have a credit score which will be ,to borrow a line from Onida's devil, "Owner's pride ,neighbour's envy".
Tuesday, May 19, 2009
Online shopping just got easier and safer with the virtual credit card. But, what's a virtual card? A virtual card is just like your credit/debit card; only it isn't tangible. It was introduced to check the rising instance of fraudulent transactions over the internet.
How does it work?Many banks offer this facility but the process works differently with different banks. However, here’s a general outline: Let's assume you have a bank account with ABC Bank. Now, follow these steps to get your very own card.
Step 1: Log on to your online account
Step 2: Register for the use of this virtual card
Step 3: Fill in the amount you will need for shopping
Step 4: The bank will generate an exclusive 16 digit number, a CVV2 number and expiry date for this virtual cardThere you go, you are ready for shopping online.
However, the card will be valid only for a particular period of time; usually, it’s valid for 24 hours. So, you need to use it within that time frame. It can be used at any merchant website, which accepts the service provider (VISA, Master card) mentioned in the card.
Features of a virtual card
1. It is a safe and risk-free option
2. It has temporary PIN numbers, which assures safety
3. It is time bound; one needs to use it within the time limit specified before the virtual card expires
4. You need to set a limit to your spending and will be eligible to avail the amount specified on the card, which is dependent on the credit limit of your credit card or cash reserves on your debit card.
5. You can use both your credit card and debit card to generate your virtual card!
6. The balance amount, if any, will be credited back to the main account.
There are a few disadvantages: There could be delay in shipping merchandise, as the merchants might wait to receive the money before dispatch of goods. Also, you need to complete a transaction within 24 hours. So, forget about paying at your leisure. Once a transaction has been completed successfully, the card cannot be used a second time. There is also a spending limit of Rs 50,000 with most banks that you need to keep in mind.Cost Most banks provide the use of a virtual card for free. You only need to be registered with online banking, and you can generate several virtual cards in a day.
Sunday, May 17, 2009
Friday, May 15, 2009
Thursday, May 14, 2009
Wednesday, May 13, 2009
Tuesday, May 12, 2009
are mostly from an outsourced agency ,not banks employees hence the bank has limited control over them. However this does not absolve the banks from their responsibility. And as a customer there are lot of things that you can do to ensure that none of this ever happens to you.
In order to deal with recovery agents better, you must know and understand the broad guidelines RBI has issued in this regard. These are the guidelines which every bank/financial institution must follow.
Now , you have a fair idea of the broad jurisdiction in which a recovery agent is supposed to carry out his duties on the bahalf of the bank. Ideally, no one should ever be harassed or hurt by an agent because the RBI guidelines say so. But, we don't live in an ideal world and hence we need to be prepared for the worst. So what can you do ? Try this.
mandate to do so. They do it on their own . So if you get into such a situation ever, first thing to do is to inform
the local bank branch about this incident. Make a formal complaint with the bank manager Have a copy of the
complaint letter acknowledged by the bank officials. This will ensure that the banks put pressure on the agency
handling your case not to harass you in future. These days RBI is very strict on banks failing to protect
customers right against recovery agents and as such banks will take your complaint seriously.
bank a party to it as well.
publicity and as such would like to do everything possible to avoid that. Use the power of media , if all other
channels fail you.
Monday, May 11, 2009
So, India too needs to take a cue from Mr Obama and push for greater clarity and uniformity in credit card industry in India. The RBI in India did try to restrict the maximum interest rate that banks can charge on the credit cards , but , the same is yet to be implemented as Banks association are against it. There are quite a few issues in the way credit card companies work and needs to be corrected. Lets look at some of the major problems facing the credit card customers and the possible solutions to it.
2. Banks can change the interest rate at any point in time - The banks reserve the right to change the interest rate at any point in time without giving any notice to the customer. So effectively, banks can increase the interest rates whenever they want without really bothering to inform the customer.This is case of high handedness on the part of banks and must be done away with.
3.Uniformity in the penalties imposed - Credit card issuers charge penalties like late payment fee, cheque dishonour fee etc to the customer. These charges are necessary to ensure that customers behave rationally, but, the charges need to have some sort of uniformity between the various credit card issuers. As of now there is great deal of variation in these charges charged by banks.