Nominee of bank account does not get succession rights

The Supreme Court (SC) has clarified the nominee of a depositor in a bank does not get ownership of the money in the account after death of the depositor. The nominee gets exclusive right to receive the money lying in the account. It gives him all the right of the depositor as far as the depositor's account is concerned, according to Section 45ZA of the Banking Regulation Act.

But the banking law is not concerned with the succession. The money in the account will form part of the estate of the deceased depositor and devolve according to the rules of succession. In this case, Ram Chander vs Devender Kumar, one son was the nominee of his mother. After her death, he claimed he was the owner of the money in the account, to exclusion of his brother. The same rule will apply to government savings and other investments.

Courtsy-BS Reporter / New Delhi November 15, 2010, 0:23 IST

Sebi suspects growing insider trading trend; ups vigil

NEW DELHI: Suspecting an uptick in the insider trading activities in the recent market rally, Sebi has enhanced its surveillance for possible violations of rules prohibiting trading based on prior and inside information.


The market watchdog has come across over two dozen instances of major suspected violations of insider trading norms during the recent rally to new record levels above 21,000 level and the subsequent correction last week, a senior official said.

While the suspicious trading activities have been noticed in the Sebi's routine surveillance of market activities, the regulator has decided to probe further into these cases and enhance its oversight for such matters going ahead, he added.

Major violations have been suspected in trading of 25-30 stocks over the past few weeks, the official said, adding that suspicious activities have been noticed in many other shares also but those are minor in terms of trade value and nature.

Insider trading relates to purchase or sale of shares by people having prior and privileged information about an upcoming development by virtue of they themselves or those related to them having holding a position in the company.

As per the Sebi's Prohibition of Insider Trading Regulations, an 'insider' is defined as any person "who is or was connected with the company or is deemed to have been connected with the company, and who is reasonably expected to have access to unpublished price sensitive information in respect of securities of a company, or who has received or has had access to such unpublished price sensitive information."

The stock market benchmark Sensex recently crossed 21,000 level to record its highest closing level at 21,004.96 points on November 5, after a sharp rally over the past few weeks, but has corrected about 900 points since then. The sentiments have been upbeat on the bourses, as also reflected in robust response to recent IPOs like Coal India.

Insider trading activities increase during market rally and an environment of improved investor sentiments makes it easier for insiders to make money on the bourses, experts said.

Sebi has systems in place to monitor unusual stock trends and suspicious activities are probed further for violations of norms including those regulating insider trading.

Recently, Sebi slapped a penalty of Rs two crores on Gujarat NRE Coke promoters A K Jagatramka and G L Jagatramka and their companies for indulging in insider trading. This is said to be the largest fine imposed this year for violations of insider trading norms. Later, the company said it would challenge the order.

"Many cases of insider trading do go undetected. Only a very small percentage of the total number of insider trading cases comes under regulatory scrutiny," said Sudip Bandyopadhyay, MD & CEO, Convexity Solutions and former CEO and MD of Anil Ambani group firm Reliance Money.

"It is difficult to specify the exact extent or percentage of insider trading. However, it does happen," he added.

Bandyopadhyay said that the regulations are in well in place, but the difficulty lies in implementing them and detecting the offence.

He advocated enhancement of powers of SEBI for seeking cooperation of other relevant regulatory authorities in matters of insider trading.

Another market observer Arun Kejriwal, director of KRIS, said that Sebi should keep a watch on dealing rooms of brokers and fund managers as also the companies' board meetings.

"Insider trading is rampant... It appears that almost all spiked movement in Indian markets can be linked to insider trading," he added.


Courtsy-http://economictimes.indiatimes.com/markets/regulation/Sebi-suspects-growing-insider-trading-trend-ups-vigil/articleshow/6923867.cms.

Diwali Time For Indian Bond Market

IRFC is hoping to attract retail investors with its forthcoming tax-free bond issue


Even as all eyes are turned on the booming stock markets, the last few months have seen a spate of bond offerings for risk-averse investors. Players like IDFC and L&T Infrastructure Finance have issued long-term infrastructure bonds to take advantage of Section 80CCF, which allows tax deduction on investments of up to Rs 20,000. Coming up next week is another kind of bond issue — tax-free bonds from Indian Railway Finance Corporation (IRFC).


The IRFC issue is aimed at big investors since the minimum investment — and the face value of each bond — is Rs 1 lakh. Indeed, the private placement issue is essentially targeted at corporations but IRFC is hoping to draw retail investors too.


IRFC will issue tax-free, secured, redeemable non-convertible Railway Bonds of five, seven and 10-year tenures. The interest rate is expected to be 6.05 per cent on the five-year bonds, 6.32 per cent for seven years, and 6.72 per cent for 10 years. The interest, completely tax-free, will be paid out twice a year. So, on the five-year bond, the equivalent taxable rate would be around 9 per cent.


The IRFC bonds are attractive for high net worth investors who’re looking to diversify and want a fixed rate of return with a regular income flow. “For retail investors, these bonds are as good as investing in government securities because they’re absolutely risk-free. And the return is a lot higher than the return on government securities. The tax-adjusted return is quite attractive too.


How do these bonds compare with other options? If you’re looking for a sovereign guarantee, the five-year RBI Relief Bonds carry an interest rate of 8 per cent. But the interest income is taxable. Banks like State Bank of India are offering five-year fixed deposits at 7.5 per cent, though the interest income is taxable and tax is deducted at source.


However ,the big ticket size of the IRFC bonds means that their retail reach will be limited.These are not classified for 80CCF exemption so for retail investors, it doesn’t make sense. Also, tradability may be an issue because if you want to sell just two-three bonds, you may not get a buyer easily.


In comparison, take a long-term infrastructure bond issue like the one from L&T Finance, which offers 7.5 per cent interest on its 10-year bonds with a buyback option after five years. The big kicker here is the Rs 6,000 tax saving (for the highest tax slab) on an investment of Rs 20,000.


If you’re a conservative investor who wants only risk-free products, infrastructure bonds are a brilliant idea. For big investors, the IRFC bond may give better returns as tax deduction is limited to investments of Rs 20,000.


More infrastructure bond issues are expected before the close of the financial year. Non-convertible debenture issues are in the offing too.

Cheap credit card at India & Some preventive measure

Recently, I took my second credit card. The first one I was using since a long. My bank told me this is very convenient and cheap. I tried to found the reality through my own recearch. What I found and what I am realising are just hear in a brief.

credit cards are available aplenty everywhere now a days and with every major banking firm, everyone has an appetite for one. The cash-free cult has already acquired a huge following all over the globe, and even more so in India. The trick of choosing a low cost credit card that has a series of advantageous options such as cash back and others is not at all easy. Spending money wisely and correctly through cheap credit card deals is something not many clients are aware of. And this fact is exploited to the hilt by the banking firms to their advantage.


Choosing the cheapest credit card is not often easy. This is because even if you research and determine a low cost credit card that has low interest rates and cheap interest APR, your spending habit might just do you in. This is because even with cheap credit card rates, if you mindlessly spend your money as if it was doomsday tomorrow, the whole purpose of the advantage of low cost credit card processing is lost on you. As you pay off the low interest items on your recently-bought list, the high interest stuff eats away at your bank balance. Therefore, it is as important to check it out whether the charging methods of your credit card firm fit your spending style.


Moreover having different cash back options available at your beck and call should be one primary option that these low cost credit cards must provide you with. The fact that most credit card companies default back on the cash back option is a potential cause of worry for all clients. Thus you will gain an upper hand in the cheap credit card deal only if you are absolutely well-versed with the array of cash back and other options provided to you by the firm.

The option of lucrative offers such as valuable points of fuel or grocery reward programs should also be considered while considering cheap credit card rates. This is because whilst you might lose out on different offers that come with more high-interest credit cards, such basic reward programs will more than compensate the loss.


Usually, low cost credit cards both in India are more about tall claims than reality. Hence, you as a potential client must keep in check the history as well as the track record of the credit card firm or banking organization that is dealing out cheap credit card interest et al. But above all, the lowest of all interest rates and APR rates will not be able to help you gain anything if your spending methods are not in sync with your actual income and lifestyle.

When shopping for credit cards get to know all the details, especially the fine print ones which one tends to ignore. Study its terms and costs for the best credit card rate. If you are looking for a no-frills, low-rate card offer, theres no need to pay the annual fees. Avoid cards that charge them. Many credit card rewards are given like air-mile credit card and some super high-end prestige cards charge annual fees in exchange for rewards and perks and services. Weigh these credit card offers carefully.

The best credit card interest rate is the one which is, obviously, the lowest. The lower the interest rate, the less money you will pay when you carry a balance. If a card comes with a super-low introductory rate, find out how long will this rate last and will you be able to pay off your card balance before the teaser rate expires. Use a low-interest rate credit card to make high-end purchases.

Precautions which helps against credit card fraud is listed as follows:


1.Ensure that you have received your credit card in sealed condition.

2.As soon as you receive your card, sign on its back.

3.Check your cards periodically to ensure that none are missing

4.Regularly monitor your account either from call centers or on the internet.

5.Subscribe to email/mobile alerts to monitor your card usage.

6.Ensure that wherever the card is presented it is swiped in your presence.

7.Keep track of your transactions, when you are traveling abroad.

8.Preserve the PIN and the card account number in a confidential place. .

9.PIN number should be memorized.

10.All records such as copies of receipts, airline tickets, travel itineraries, etc., should be destroyed.

11.Never share PIN with anyone.

12.Cancel all inactive accounts

Report credit card fraud or for lost/stolen cards immediately to the issuer.

The IT Act and Rules 2000, provide penalties for hacking of computer systems as a credit card fraud help to the masses. The RBI has formed the CIBIL in collaboration with Dun and Bradstreet who will maintain the records of all wanting to avail of finance from credit card companies and banks in India