RBI Changes Loan Recovery Rules: What Borrowers Need to Know From January 2027

The Reserve Bank of India (RBI) has revised and extended the implementation timeline for its updated guidelines relating to loan recovery and the engagement of recovery agents.

The revised directions will now come into effect from 1 January 2027, instead of the earlier proposed date of 1 October 2026. The extension is intended to give regulated entities additional time to make the necessary technical, operational and training-related changes.

For borrowers, some of the changes are particularly important.

Recovery agents will need proper certification

The RBI has provided a transition period for regulated entities that were not previously covered by recovery-agent certification requirements. They will have one year to ensure that their recovery agents obtain certification from the Indian Institute of Banking & Finance (IIBF).

However, the RBI has not agreed to a proposal that would allow newly appointed recovery agents to begin dealing with borrowers and obtain certification later.

The reasoning is straightforward: recovery agents should have the necessary knowledge and training before interacting with borrowers, reducing the risk of inappropriate conduct or inadequate understanding of recovery procedures.

Important protection for borrowers using EMI-financed mobile devices

One of the notable changes concerns loans used to finance mobile phones and other devices.

Under the revised framework, technology-based restrictions on a financed device cannot be started immediately merely because a payment is overdue.

The associated loan must first become 30 days overdue, and the borrower must have failed to repay despite receiving notices.

More importantly, full restrictions can be imposed only after the loan becomes 60 days past due.

The RBI has also specified that lenders should adopt a gradual approach rather than immediately disabling the device.

Essential functions, including:

• Incoming calls

• SMS

• Emergency SOS facilities

should not be restricted or disabled.

The framework also provides that device restrictions should not prevent borrowers from carrying out their work-related activities.

What happens if a device is wrongly restricted?

The revised provisions also address compensation.

If a device is wrongfully restricted, or its functionality is not restored properly after the relevant conditions are met, compensation is capped at the amount of the loan disbursed.

The RBI has also clarified that a default is considered cured when the lender has actually realised the dues.

Individual recovery agents' details need not be published

The RBI has withdrawn its earlier proposal requiring lenders to publicly disclose details of every individual recovery agent.

The regulator cited operational difficulties, particularly because recovery agents can have high turnover.

However, lenders will still have to publish details of their empanelled recovery agencies and update those details within seven calendar days whenever there is a change.

Some categories are outside these particular directions

The revised directions do not apply in the same manner to:

• Employees of a regulated entity carrying out recovery work;

• Agents whose role is limited to collecting regular periodic instalments; and

• Law firms assisting lenders by issuing notices or representing them before courts.

The RBI noted that these categories generally do not interact with borrowers in the same manner as recovery agents covered by the directions.

What does this mean for ordinary borrowers?

The important message is that having an overdue loan does not give a lender or recovery agent unlimited freedom to deal with a borrower.

Recovery has to take place within the regulatory and legal framework. The revised RBI directions specifically address agent certification, borrower interaction and technology-based restrictions on financed devices.

At the same time, borrowers should remember that these rules do not eliminate their obligation to repay a loan. If a genuine financial difficulty is making repayment difficult, it is generally better to communicate with the lender at the earliest opportunity rather than allowing the account to remain unattended.

Key dates at a glance

Situation	RBI provision
Revised recovery directions become effective	1 January 2027
Earliest point at which financed-device restrictions may begin	30 days overdue, subject to notices and other conditions
Full device restrictions	60 days past due
Essential functions such as incoming calls/SMS/SOS	Should not be disabled
Update to published recovery-agency list after a change	Within 7 calendar days

Final word

The RBI's revised framework attempts to strike a balance between the legitimate right of lenders to recover their money and the need to protect borrowers from inappropriate recovery practices.

For borrowers, the most significant takeaway is that loan recovery must follow prescribed procedures, and technology cannot simply be used to impose arbitrary or immediate restrictions on an EMI-financed device.

The revised directions will take effect from 1 January 2027.

Source: Reserve Bank of India / Reported by Rediff.com Business, 7 August 2026.

This article is for general information and awareness. It should not be treated as legal advice. Borrowers should refer to the applicable RBI directions, their loan agreement and the lender's official communication for their specific situation.

Weekly Market Wrap (20 July 2026 – 24 July 2026)

Markets Under Pressure, Earnings Stay Strong, and Global Uncertainty Continues

The week of 20th July to 24th July 2026 presented a mixed picture for investors. While equity markets in India and across the world ended in negative territory, several leading companies delivered impressive quarterly earnings. At the same time, rising bond yields, inflation concerns, and geopolitical developments kept investors cautious.

Let's take a closer look.

Indian Market Highlights

Equity Market Performance

The Indian stock market witnessed profit booking during the week.

Nifty 50: -2.33%

BSE 500: -1.85%

Despite the decline, the correction appears to be driven more by global uncertainties and cautious investor sentiment than by weakness in corporate fundamentals.

Corporate Earnings Continue to Impress

Eternal Delivers Exceptional Growth

Eternal reported an outstanding first-quarter performance.

Net profit surged 268% year-on-year to ₹792 crore.

Revenue jumped 182% to ₹20,211 crore.

The results indicate strong business expansion and improving operational efficiency.

Infosys Shows Stable Growth

Infosys also delivered healthy quarterly numbers.

Net profit increased 12% year-on-year to ₹7,769 crore.

Revenue grew 14% to ₹42,211 crore.

The company revised its FY27 revenue guidance and announced Ashiss Kumar Dash as CEO-designate.

These numbers reinforce the resilience of India's IT sector despite global economic uncertainty.

Debt Market Update

India's 10-Year Government Security (August 2032) closed at 6.826%, rising by 4.6 basis points.

Meanwhile, ICICI Bank successfully raised US$1 billion through a five-year dollar bond. Strong investor demand allowed the bank to borrow at tighter-than-expected spreads, highlighting continued global confidence in leading Indian financial institutions.

Key Indian Macro Developments

Several macroeconomic developments influenced market sentiment:

The United States placed India in the lower 10% tariff tier under Section 301 measures, although the Indian government stated that exemptions would protect nearly US$87 billion worth of exports while trade negotiations continue.

India's private sector activity slowed to a four-year low in July, with the HSBC Flash Composite PMI falling to 54.3. Rising inflationary pressures also weighed on business confidence.

Global Market Overview

Global equity markets also ended the week lower.

Dow Jones: -0.38%

S&P 500: -0.61%

MSCI World Index: -0.39%

Investor sentiment remained cautious amid inflation concerns and geopolitical tensions.

Global Corporate News

Intel Beats Expectations

Intel reported a strong second quarter.

Adjusted EPS: 42 cents

Revenue: US$16.1 billion

The company delivered its fastest quarterly revenue growth since 2011, exceeding market expectations.

Anthropic Launches Claude Opus 5

Artificial Intelligence continued to dominate technology headlines.

Anthropic introduced Claude Opus 5, offering near top-tier AI performance at approximately half the price while improving capabilities in enterprise coding, scientific research, and knowledge work. The launch highlights increasing competition in the AI industry.

Global Bond Market

The U.S. 10-Year Treasury Yield rose to 4.687%, increasing by 13.7 basis points.

Higher yields prompted investors to withdraw a record US$7.1 billion from U.S. investment-grade bond funds as inflation concerns resurfaced.

Global Geopolitical Developments

Markets also reacted to several important geopolitical events.

The U.S. announced a phased tariff plan on imported generic drugs.

Discussions around a potential U.S.–Saudi civil nuclear agreement remained uncertain.

Reports of renewed U.S. military action involving Iran added to concerns about regional stability and global energy markets.

What Should Investors Do?

Periods of market correction are a normal part of long-term investing. Rather than reacting emotionally to short-term volatility, investors should focus on:

Continuing disciplined SIP investments.

Reviewing portfolio allocation periodically.

Staying diversified across equity, debt, and international assets.

Avoiding investment decisions based solely on short-term news.

Strong corporate earnings in India suggest that long-term economic fundamentals remain healthy even when markets experience temporary declines.

Final Thoughts

The week reminded investors that markets often move differently from company fundamentals. While indices corrected, several businesses continued to report excellent earnings. Rising bond yields, inflation, and geopolitical uncertainties may keep volatility elevated in the near term, but disciplined, long-term investors are generally better positioned to benefit from market cycles.

Disclaimer: This article is for educational and informational purposes only and should not be considered investment advice. Investors should consult a qualified financial advisor before making investment decisions.

Mutual Fund Risks Explained: Know Which Fund is Affected by Which Risk

Every mutual fund carries some level of risk. However, not all mutual funds are exposed to the same type of risk. Understanding these risks helps investors select the right scheme according to their investment objectives and risk appetite.

This article explains the major risks associated with mutual funds and identifies the fund categories most affected by each risk.

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Major Risks in Mutual Funds

Risk	Meaning	Mainly Affects
Market Risk	Risk of loss due to a fall in the overall stock market.	Equity Funds
Interest Rate Risk	Risk that bond prices will fluctuate because of changes in interest rates.	Gilt Funds, Debt Funds
Credit Risk	Risk that the issuer's financial strength deteriorates or defaults on its obligations.	Credit Risk Funds
Default Risk	Risk that the issuer fails to pay interest or principal on time.	Corporate Bond Funds
Liquidity Risk	Risk of not being able to sell securities quickly at a fair price.	Small Cap Funds, Debt Funds
Concentration Risk	Risk arising from excessive exposure to a single company, sector, or industry.	Sectoral and Thematic Funds
Currency Risk	Risk due to fluctuations in foreign exchange rates.	International Funds
Inflation Risk	Risk that investment returns fail to keep pace with inflation.	All Investments
Reinvestment Risk	Risk of reinvesting interest or maturity proceeds at lower interest rates.	Debt Funds
Duration Risk	Risk that long-duration bonds are highly sensitive to interest rate movements.	Long Duration Funds, Gilt Funds

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Which Mutual Fund is Most Affected by Which Risk?

Fund Category	Most Important Risk
Equity Fund	Market Risk
Large Cap Fund	Market Risk
Mid Cap Fund	Market Risk
Small Cap Fund	Market Risk and Liquidity Risk
Sectoral/Thematic Fund	Concentration Risk
Index Fund / ETF	Market Risk
ELSS Fund	Market Risk
Hybrid Fund	Market Risk and Interest Rate Risk
Corporate Bond Fund	Credit Risk and Default Risk
Credit Risk Fund	Credit Risk
Banking & PSU Debt Fund	Interest Rate Risk
Short Duration Fund	Interest Rate Risk
Long Duration Fund	Duration Risk and Interest Rate Risk
Dynamic Bond Fund	Interest Rate Risk
Gilt Fund	Interest Rate Risk
International Fund	Currency Risk
Liquid Fund	Very Low Credit Risk and Very Low Interest Rate Risk
Overnight Fund	Negligible Interest Rate Risk and Credit Risk

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Understanding Each Risk in Simple Words

1. Market Risk

This is the risk of losing money because the overall stock market falls.

Example: If the Sensex or Nifty declines sharply, most equity mutual funds will also fall.

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2. Interest Rate Risk

When interest rates rise, bond prices generally fall. Debt mutual funds that invest in bonds are affected by this risk.

Highest in: Gilt Funds and Long Duration Funds.

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3. Credit Risk

This is the risk that the company issuing the bond may experience financial difficulties, leading to a downgrade in its credit rating or even default.

Highest in: Credit Risk Funds.

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4. Default Risk

Default risk occurs when the issuer actually fails to pay interest or repay the principal amount on the due date.

Highest in: Corporate Bond Funds.

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5. Liquidity Risk

This is the risk that a security cannot be sold quickly without affecting its price.

Highest in: Small Cap Funds and certain Debt Funds.

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6. Concentration Risk

A fund that invests heavily in one sector or a few companies is exposed to concentration risk.

Highest in: Sectoral and Thematic Funds.

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7. Currency Risk

International mutual funds are affected by fluctuations in foreign exchange rates.

Highest in: International Funds.

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8. Inflation Risk

If the return on an investment is lower than the inflation rate, the investor loses purchasing power.

Applies to: All investments.

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9. Reinvestment Risk

Interest or maturity proceeds may have to be reinvested at lower interest rates, reducing future returns.

Highest in: Debt Funds.

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10. Duration Risk

Long-term bonds experience greater price fluctuations when interest rates change.

Highest in: Long Duration Funds and Gilt Funds.

Mutual Fund Risks Explained: Which Mutual Fund Scheme is Affected by Which Risk?

 Understanding the different types of risks associated with mutual funds is essential for every investor and is one of the most important topics in the NISM Series V-A and ARN Certification Examination. Different categories of mutual funds are exposed to different types of risks depending on the securities in which they invest.

The table below provides a quick reference to the primary risks associated with various mutual fund schemes.

Mutual Fund Scheme / Category	Primary Risk(s)	Example
Equity Funds	Market Risk	Stock market (Sensex/Nifty) declines sharply.
Sectoral/Thematic Funds	Concentration Risk, Market Risk	Banking or IT sector underperforms.
Small Cap Funds	Market Risk, Liquidity Risk	Small-cap stocks are highly volatile and difficult to sell during market stress.
Mid Cap Funds	Market Risk	Mid-cap companies experience higher volatility than large-cap companies.
Large Cap Funds	Market Risk (comparatively lower)	Blue-chip stocks decline during a market correction.
ELSS (Tax Saving) Funds	Market Risk	Equity investments fluctuate despite the tax benefit.
Index Funds / ETFs	Market Risk	The benchmark index falls in value.
International Funds	Currency Risk, Market Risk	Appreciation of the Indian Rupee reduces overseas returns.
Liquid Funds	Liquidity Risk (Very Low), Credit Risk (Low)	Invest primarily in money market instruments with short maturity.
Overnight Funds	Negligible Interest Rate Risk and Credit Risk	Invest only in one-day maturity securities.
Ultra Short Duration Funds	Low Interest Rate Risk	Invest in short-duration debt instruments.
Short Duration Funds	Interest Rate Risk	Bond prices fluctuate due to changes in interest rates.
Corporate Bond Funds	Credit Risk, Interest Rate Risk	Corporate bond issuer defaults or interest rates increase.
Credit Risk Funds	High Credit Risk	Invest significantly in lower-rated corporate bonds.
Banking & PSU Debt Funds	Interest Rate Risk (Low Credit Risk)	Invest mainly in debt issued by banks and public sector undertakings.
Dynamic Bond Funds	Interest Rate Risk	Fund manager changes portfolio duration according to interest rate outlook.
Gilt Funds	High Interest Rate Risk	Invest exclusively in Government Securities (G-Secs).
Money Market Funds	Low Credit Risk, Low Interest Rate Risk	Invest in short-term money market instruments.
Hybrid Funds	Market Risk, Interest Rate Risk	Combination of equity and debt investments.

What is PASA in insurance

The PASA, full form in Insurance, is pre-approved sum assured insurance plan.  This is a type of insurance policy where the insurer will pre-approve a specific sum assured amount for the policyholder on the basis of certain criteria. As they offer pre-approved coverage along with a simple application process, it is easy for policyholders to obtain.

Features of PASA insurance plans:

In the PASA insurance plan, the value assured is predetermined by the insurer based on the policyholder’s profile, which includes age, income, and health status. This eliminates the need for comprehensive medical underwriting and documentation. Obtaining coverage is faster and easier because of fewer documentation needs and a streamlined application procedure. Since the sum assured is pre-approved, the policy issuance process offers quick access to coverage.

Benefits of PASA insurance plans:

The pre-approval process makes it simpler and faster to receive coverage. Knowing the sum assured in advance allows for better financial planning. As the PASA insurance plans offer simplified underwriting and minimum documentation, insurance is more accessible to a larger population. Guaranteed acceptance and prompt issuance give policyholders confidence and peace of mind. The PASA insurance plans offer an efficient and convenient way to offer secure financial protection with minimum hassle.

GST Withdrawal from Insurance Premiums in India: What It Means for You

The Indian government recently announced the withdrawal of the Goods and Services Tax (GST) on individual life and health insurance premiums, effective September 22, 2025. This move is aimed at making insurance more affordable and accessible to the general public. But what does this mean for policyholders and insurers? Let’s break it down.

How Policyholders Benefit

1. Lower Premiums

Earlier, policyholders had to pay an 18% GST on top of their insurance premiums. With GST removed, the cost of insurance policies drops significantly. For example, a ₹10,000 premium will now cost exactly ₹10,000 instead of ₹11,800, giving an immediate saving of ₹1,800 per year.

2. Refunds on Multi-Year Policies

If you’ve paid premiums in advance for multiple years, you may be eligible for a GST refund for the period after September 22, 2025. While the exact refund process is still being clarified by insurers, this could translate into substantial savings for long-term policyholders.

3. Immediate Savings on New Policies

Any new policies purchased on or after September 22, 2025, will be GST-free. This gives policyholders instant financial relief and makes health and life insurance more accessible.

Challenges for Insurers

1. Loss of Input Tax Credit (ITC)

Insurers previously claimed ITC on GST paid for operational expenses. With GST removed, this credit is no longer available, potentially increasing insurers’ operational costs.

2. Possible Premium Adjustments

To compensate for lost ITC, some insurers may adjust premium rates or modify policy structures. While GST is gone, the base premium may still be revised, which could affect affordability for some policyholders.

3. Commission-Related Issues

Insurance agents’ commissions are still a point of concern. The Life Insurance Council has urged the government to remove GST on agents’ commissions. Without this, insurers face loss of ITC, which may indirectly affect profitability and policy offerings.

What Policyholders Should Do

1. Review Policy Documents – Understand how the GST exemption impacts your premium and coverage.

2. Consult Your Insurer – For multi-year policies, check if you are eligible for a refund.

3. Stay Updated – Watch for changes in premium structures as insurers adjust to this new tax regime.

Final Thoughts

The GST exemption on insurance premiums is a welcome step toward making insurance more affordable in India. While policyholders benefit immediately, insurers may face challenges that could affect policy pricing and offerings in the future. Staying informed and proactive will help you maximize the benefits of this new policy.

Learning the Art of Disciplined Savings

Money comes in and goes out, but disciplined saving ensures it always works for you. Here’s a practical roadmap to build strong savings habits—backed by numbers.

1. Change Your Mindset

Savings is not optional. Treat it like a bill you must pay yourself every month, just like rent or electricity. This mindset shift is the first step toward financial independence.

2. Pay Yourself First

The golden rule: save before spending. Automate savings by transferring a fixed percentage (say 20% of your salary) into a savings account or SIP.

Example: If you earn ₹25,000/month, saving 20% means ₹5,000 goes into your savings before you touch the rest.

3. Budget Smartly

Follow the 50-30-20 rule:

50% → Needs (₹12,500 for rent, bills, food)

30% → Wants (₹7,500 for entertainment, shopping)

20% → Savings/Investments (₹5,000)

Tracking your expenses weekly can prevent money leaks and help you stick to this plan.

4. Build an Emergency Fund

Life is unpredictable. An emergency fund of 3–6 months of expenses ensures you can handle crises without debt.

Example: If your monthly expenses are ₹20,000, aim for a fund of ₹60,000–₹1,20,000 in a liquid account.

5. Make Money Grow

Savings alone isn’t enough—invest to benefit from compounding.

Example: Saving ₹5,000/month for 10 years at 8% annual return:

Total invested: ₹5,000 × 120 months = ₹6,00,000

Approximate growth: ₹9,00,000

Even small amounts grow significantly over time.

6. Stay Consistent

Consistency beats timing the market. Avoid impulse spending and unnecessary loans.

Example: Saving just ₹3,000/month at 7% annual growth for 20 years:

Total invested: ₹7,20,000

Approximate value after 20 years: ₹16,80,000

Final Thoughts

Disciplined savings is about habit, not luck. Start small, stay consistent, and let time turn your efforts into financial security and independence. Your future self will thank you.

A penny stock to have a look

Vikas Ecotech Limited (VEL) has acquired Shamli Steels through a share swap, issuing 38 million new shares at Rs 4.20 each to Shamli Steels' shareholders. This valued Shamli Steels at Rs 160 crore and made it a wholly-owned VEL subsidiary. Separately, VEL's subsidiary Vikas Organics secured a Rs 165 million export order for vinyl plasticizers, while VEL is upgrading VOPL's facilities to boost production and expand its global market presence.

The company has a market cap of over Rs 700 crore. The stock’s 52-week high is Rs 5.63 and its 52-week low is Rs 2.82. The stock is up by 54 per cent from its 52-week low of Rs 2.82 per share. Investors should keep an eye on this penny stock.

Disclaimer: The article is for informational purposes only and not investment advice. 

Education and Healthcare as Businesses in India: A Critique and Analysis

 

Introduction

Since India's independence, education and healthcare have gradually transformed from public services to profitable enterprises. This shift has significantly impacted common Indians, often exacerbating inequalities and limiting access to quality services.

Education

Commercialization and Access

High Costs: The rise of private educational institutions has led to exorbitant fees, making quality education a privilege for the affluent. Families from lower-income groups struggle to afford these fees, often resorting to loans or other financial sacrifices.

Public vs. Private Quality Gap: 

Public schools and colleges suffer from chronic underfunding, resulting in inadequate infrastructure and staffing. This contrasts sharply with well-funded private institutions, leading to a dual education system where only the wealthy can access superior education.

Profit Motive

Rote Learning and Coaching Centers: The focus on high-stakes entrance exams has fueled the growth of coaching centers that emphasize rote learning over critical thinking. This commercial approach undermines the holistic development of students.

Lack of Regulation: Many private institutions operate with minimal oversight, leading to issues such as capitation fees and arbitrary fee hikes. This regulatory gap allows for exploitation and prioritization of profit over educational outcomes.

Healthcare

Privatization and Inequality

High Treatment Costs: The privatization of healthcare has resulted in advanced medical facilities being available primarily through expensive private hospitals. Common Indians often find these services unaffordable, leading to financial distress or untreated health issues.

Public Healthcare Strain: Public hospitals are overcrowded and under-resourced, offering substandard care. The stark disparity between public and private healthcare creates a two-tier system where the poor receive inferior treatment.

Medical Education and Workforce-

Commercialized Medical Education: Private medical colleges charge high fees, making medical education inaccessible to many. This commercialization impacts the quality and distribution of healthcare professionals, as those from affluent backgrounds dominate the sector.

Insurance and Coverage Gaps: Health insurance, while growing, is often insufficient and complex. Many common Indians remain uninsured or underinsured, facing significant out-of-pocket expenses for medical care.

Impact on Common Indians

Economic Burden

Debt and Financial Strain: The high costs of education and healthcare place immense financial pressure on families. Many incur debts or deplete savings to afford these essential services, impacting their overall financial stability.

Intergenerational Inequality: The commercialization of these sectors perpetuates social and economic inequalities. Wealthier families can afford better education and healthcare, while poorer families remain trapped in cycles of poverty.

Quality of Life

Mental Health Issues: The financial and academic pressures associated with accessing quality education and healthcare contribute to mental health problems. Students and parents alike face stress, anxiety, and other psychological issues.

Limited Opportunities: Inaccessible education and healthcare limit personal and professional growth opportunities. Talented individuals from lower-income backgrounds often cannot pursue higher education or receive adequate medical care, stifling their potential.

Conclusion-

The commercialization of education and healthcare in India has led to significant challenges for common Indians. Addressing these issues requires comprehensive reforms:

Strengthening Public Institutions: Increased funding and improved infrastructure for public schools, colleges, and hospitals can bridge the quality gap between public and private sectors.

Regulatory Reforms: Robust regulations to control fees, prevent exploitation, and ensure quality in private institutions are essential.

Equitable Policies: Policies promoting affordable private sector solutions, scholarships, and financial aid can enhance access to quality education and healthcare for all.

By implementing these measures, India can mitigate the adverse effects of commercialization and ensure that education and healthcare serve as foundations for inclusive and sustainable development.

Understanding the Recent Stock Market Decline in India: Causes and Implications

 The Indian stock market experienced a significant downturn yesterday, sending shockwaves across investors and financial experts alike. This sudden decline has raised concerns and questions about the factors contributing to this downward trend and its potential implications on the economy. In this article, we will delve into the reasons behind yesterday's stock fall in India and explore its broader impact.

Market Volatility: Financial markets are inherently volatile, influenced by a myriad of factors ranging from economic data and geopolitical events to investor sentiment. India's stock market, like others globally, is susceptible to these fluctuations. Yesterday's stock fall can partly be attributed to this inherent volatility.

Global Economic Factors: Global economic events and decisions by major economies, such as changes in interest rates, trade policies, and geopolitical tensions, can significantly impact the Indian stock market. Trade disputes, economic slowdowns in key trading partners, or geopolitical tensions can trigger investor apprehension, leading to a sell-off.

Domestic Economic Indicators: Domestic economic indicators, including GDP growth, inflation rates, and employment figures, play a crucial role in shaping investor confidence. Any adverse data or unexpected shifts in these indicators can lead to market uncertainty, causing a decline in stock prices.

Corporate Performance: The performance of individual companies listed on the stock exchange also affects market dynamics. Disappointing earnings reports, management issues, or unanticipated losses can lead to a sell-off of company stocks, dragging down market indices.

Regulatory Changes: Changes in regulatory policies, tax reforms, or government initiatives can impact investor sentiment. Investors closely monitor government decisions and policies, as these changes can have far-reaching consequences on businesses and the overall economy.

Investor Sentiment: Investor sentiment plays a crucial role in shaping market trends. Positive sentiment can drive stock prices up, while negative sentiment can lead to a market sell-off. Factors like news reports, social media trends, and public perceptions can influence how investors perceive the market.

Implications and Precautions: A sudden stock market fall often prompts investors to reassess their portfolios and risk tolerance. Diversification, staying informed about market trends, and consulting with financial advisors are essential steps for investors to safeguard their investments during periods of market volatility.

Conclusion: While yesterday's stock fall in India may be disconcerting, it is essential to understand that financial markets are inherently cyclical. Ups and downs are part of the natural rhythm of the market. Investors, both individual and institutional, must remain vigilant, stay informed, and make well-informed decisions to navigate these fluctuations successfully. Additionally, policymakers and regulators must continue to monitor market dynamics and implement measures that promote stability and confidence within the financial sector.

Financial knowledge is not the problem in India, but financial attitude is

You might know a lot about finance, but that doesn't necessarily mean you have the right attitudes towards managing your money. That seems to be the message from the survey on financial literacy carried out by researchers from the Reserve Bank of India. The study, titled ‘Financial Literacy in India: Insights from a Field Survey', was published in this month's RBI Bulletin. The research studied three components of financial literacy—financial knowledge, financial behaviour and financial attitude. While the scores for the first two parameters are decent, the survey's respondents had a low score in financial attitude.

The financial knowledge tested was about basic financial concepts, such as inflation, the relationship between risk and return, portfolio diversification and about the RBI Ombudsman. The financial behaviour of those surveyed was assessed based on how they manage their household budgets, saving behaviour, managing the cost of living and evaluating options while selecting financial products.

Financial attitude, on the other hand, was measured by the response to three specific statements: 1) You tend to live for today and let tomorrow take care of itself, 2) You find it more satisfying to spend money than to save it for the long term and 3) You are prepared to risk some of your own money when saving or making an investment.

The researchers found that respondents scored 3.8 out of 5 in financial knowledge, which isn't bad at all, considering that a survey for 12 OECD countries in 2020 had a score of 4.6 out of 7. The OECD, or the Organisation for Economic Co-operation and Development is also known colloquially as the ‘rich countries' club.' Respondents in the RBI study had the lowest score in their understanding of the diversification concept. Educated and richer persons had better financial knowledge, as did those who resided in metropolises. That is hardly a surprise. Retired persons were financial savvy, perhaps because necessity forces them to be.

For financial behaviour, the researchers found the score to be 6.65 out of 9, well above the OECD score of 5.3 out of 9. With very little social security in India, people have to willy-nilly behave well financially.

The anomaly lies in financial attitudes. The average score for financial attitudes is a mere 1.97 out of a maximum of 5. Compare that to the OECD minimum score of 3 out of 5. In the RBI survey, only 25 per cent of the respondents scored 3 or more. Clearly, our financial attitudes are all wrong.

That is surprising, because behaviour is usually a result of your attitude. Surely, if your attitude towards finance is negative and reckless, your behaviour should reflect that. The OECD International Survey of Adult Financial Literacy says, ‘even if an individual has sufficient knowledge and ability to act in a financially prudent way, their attitudes will influence their decision of whether or not to act.' The RBI researchers do not say anything about the gap between attitude and behaviour.

Perhaps the clue lies in the questions being asked of respondents to gauge their financial attitudes. For instance, of course people will find it more satisfying to spend money than to save, they may prefer to live for today rather than worry about tomorrow and people may really be prepared to risk some of their money in investments. But when it comes to financial behaviour, they find that they cannot afford to do any of these things. That could be a reason for the gap between attitude and behaviour. Could it also be that having a reckless attitude towards finances may, sooner or later, affect financial behaviour as well?

The survey also shows that homemakers have little financial knowledge, but they have positive financial attitudes and good financial behaviour.

On the other hand, daily wage workers have some financial knowledge, but poor financial attitudes and behaviour. That only goes to show that, as long as you are financially constrained, financial knowledge can only get you so far.

The RBI researchers recommend, ‘FL (Financial Literacy) camps must target to enhance knowledge of female respondents and of those residing in semi-urban areas; and target attitude development for remaining respondents' groups so as to benefit the entire population in deprived areas.'

Government postpones higher TCS on overseas spends by 3 months to October 1

As per the latest clarification from the finance ministry, if a person is overseas and spends through the credit card, it would not count under LRS and therefore would not attract TCS. Further, if a person uses credit card while in India for permissible overseas transactions, then that would count under LRS and attract TCS if it exceeds Rs 7 lakh in a year.

Common ITR form for all taxpayers

The finance ministry on Tuesday proposed to come out with a user-friendly common income tax return form for all taxpayers, under which income from virtual digital assets will have to be disclosed under a separate head.

All taxpayers, except trusts and non-profit organisations, can file returns with the proposed new common ITR form, on which the Central Board of Direct Taxes (CBDT) has invited stakeholder comments by December 15.

Currently, there are 7 types of income tax return (ITR) forms which are filed by different categories of taxpayers.

ITR Form 1 (Sahaj) and ITR Form 4 (Sugam) are simpler forms that cater to a large number of small and medium taxpayers. Sahaj can be filed by an individual having income up to Rs 50 lakh and who receives income from salary, one house property/other sources (interest etc).

ITR-4 can be filed by individuals, Hindu Undivided Families (HUFs) and firms with total income up to Rs 50 lakh and having income from business and profession.

ITR-2 is filed by people having income from residential property, ITR-3 by people having income as profits from business/ profession, ITR-5 and 6 by LLPs and businesses respectively, while ITR-7 is filed by trusts.

The CBDT, under the finance ministry, said that ITR-1 and 4 would continue, but individuals would also have the option to file returns of income in the common ITR form.

"It proposes to introduce a common ITR by merging all the existing returns of income except ITR-7. The draft ITR aims to bring ease of filing returns and reduce the time for filing the ITR by individuals and non-business-type taxpayers considerably," the CBDT said.

The taxpayers will not be required to see the schedules that do not apply to them. It will have a smart design of schedules in a user-friendly manner with a better arrangement, logical flow, and increased scope of pre-filling.

"It will also facilitate the proper reconciliation of third-party data available with the Income-tax Department vis a vis the data to be reported in the ITR to reduce the compliance burden on the taxpayers," the CBDT said.

The proposed ITR would be customised for the taxpayers with applicable schedules based on certain questions answered by them.

Once the common ITR form is notified, after taking into account the inputs received from stakeholders, the online utility will be released by the Income Tax Department.

"In such a utility, a customised ITR containing only the applicable questions and schedules will be available to the taxpayer," the CBDT said.

Nangia Andersen LLP Partner Sandeep Jhunjhunwala said taxpayers filing return of income in Forms ITR-2, ITR-3, ITR-5 and ITR-6 would not have an option to file the old forms, once the new common form and related utility are notified.

"Contemporary reporting requirements such as pass through income or loss under various heads, income from virtual digital assets, declaration and details of Business Connection, Permanent Establishment and Significant Economic Presence in India for non-residents, and details of foreign equity and debt interest held remain key highlights of the new common ITR form," Jhunjhunwala added.

Block UPI Apps if the phone is stolen or lost or lost your SIM Card

For Paytm

Step #1: Call 01204456456 to the PayTM Payments Bankh helpline

Step #2: Choose the "Lost Phone" option. 

Step #3 Select "Enter a different number" and then, type the phone number you lost. 

Step #4: Select the option to log out from all the devices using the samel ogin credentials.

Step #5. Go to PayTM's website (www.paytm.com) and select the option "24x7 help" 

Step #6: You need to choose "Report a Fraud" from among the other options available onboard. 

Step #7: Once you select the appropriate issue, tap on "Message

Step #8: The next screen will asky ou to prove the ownership of thea account by submitting a debit or credit card statement, email, or SMS confirmation, as well as some  documentation such as a police report proving that your phone was lost or stolen 

Step #9: Once all the information is confirmed and verified, you will receive a message confirming that your PayTM account and UPI have been temporarily blocked unless you unfreeze it.

Google Pay

Step #1: Firstly, dial 18004190157

from any smartphone to reach out to

customer service Step 

#2: Talk to the respective customer service representative to answer their queries and ask them to block your Google Pay account.

Step #3: Repeat the following procedure based on if you are using Android or iOS 

PhonePe

Step #1: Dial numbers  02268727374 or 08068727374 

Step #2: Next, you need to mention the phone number associated with the PhonePe account to report it

Step #3: Enter the OTP when required if you have the SIM card or else, select 'report the loss of a SIM or device.

Step #4. You will be connected to a customer service representative where you can report the incident or fraud and ask them to block your PhonePe account.

Step #5: Verify that your PhonePe account has been blocked. You can now seek out a new phone and port your old phone number to a new SIM card and re-active all the services just like the ones that were available previously.

Big EPFO news! Pension to shopkeepers too!!!

The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 will have to be reformed to remove the salary limit of Rs 15,000 and 20 employees. After this change, self-employed people will also be able to join the EPFO ​​scheme.

Employees’ Provident Fund Organization ie EPFO ​​is working on an important proposal. EPFO is considering a proposal to abolish the salary and the limit of employees in the company. This proposal is being considered to be implemented for all types of formal workers and self-employed people. This means that people whose salary is less than Rs 15,000 and a company that does not have 20 employees can be included in the retirement scheme of EPFO.

To implement this new proposal, EPFO ​​is talking to different parties and its point has also been conveyed to the states. At present, only people whose salary is Rs 15,000 can take advantage of the EPFO ​​scheme. Also, only the company which has at least 20 employees can add their employees to the EPFO ​​scheme. The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 will have to be reformed to remove the salary limit of Rs 15,000 and 20 employees. After this change, self-employed people will also be able to join the EPFO ​scheme.

Once this amendment is done in the rules of EPFO, then the rule of salary and mandatory number of employees will be abolished. Then any company with any income or salary and any number will be able to join EPFO. At present, the benefit of the retirement scheme of EPFOs available to the same employee or worker whose salary is more than Rs 15,000. EPFO provides a provident fund, pension and insurance facility to its members. These facilities are provided under EPF, Employee Pension Scheme and Employee Deposit Linked Insurance Scheme.

On the other hand, a committee has suggested to increase the salary limit of EPF from Rs 15,000 to Rs 21,000. According to the existing rules, only an employee can join EPFO ​​whose salary is up to Rs 15,000. The rule says that it is necessary to give the benefit of the EPF scheme on behalf of the company to an employee with a monthly salary of Rs 15,000. If the recommendation of the committee is accepted, then the salary limit can be Rs 21,000. Earlier in 2014, the salary limit was increased. EPF was set up in the year 1952 and the 9th increase was done for the last time in 2014.

The money deposited in EPF is for retirement facilities. But in adverse circumstances or subject to certain conditions, money can be withdrawn from PF. During the Corona period, the government had given permission to withdraw advance money from PF. As soon as the limit of Rs 21,000 is fixed, about 75 lakh employees of the country will come under PF.

At present, the benefit of EPF is given to 6.80 crore people. But if the EPFO ​abolishes the rule of the salary limit, then people working in the formal sector and self-employed will also benefit. Under EPF, the benefits of provident fund, pension and insurance schemes are given to the employees.

Multibagger Stocks

A stock is referred to as a "multibagger" if its value increases by multiples after an initial investment. These stocks might be inexpensive but have solid fundamentals and can increase an investor's return on investment by a factor of multiples. Multibagger stocks promise excellent corporate governance and quickly scaleable businesses.

The important features of multibagger stocks are :-

• Low-debt:-A low-debt company is a Zero to a multibagger stock. While the definition of a low-debt company varies by industry, it is generally accepted that debt that is less than 30% of equity value is healthy.
• Sources of income:-Look at the sources that contribute most to the company's income. The stock may merit being a multibagger in the future if the revenue sector appears to be rising at a macro level and the operations seem easily scalable.
• Quarter-on-quarter performance:-Pay attention to the company's(Quarter on Quarter) QoQ revenue multiples. Low multiples could be a sign that the company has a significant upside potential.
• Earnings and price multiples:-Check the price-/-sales and PE ratios based on the revenue and trailing 12-month EPS Increasing the PE level above the stock price more quickly shows multibagging.Based on the trailing 12-month EPS and revenue, check the current PE and price/sales ratios. Being a multibagger is indicated by a faster increase in the PE level over the stock price.The management history, corporate strategy, and yearly reports may all significantly affect stock growth

Difference between Mediclaim and Health Insurance.

When it comes to Mediclaim and health insurance, people often get confused between the two, but one should understand that there is a fine line of difference between them.

A Mediclaim insurance includes the points mentioned below:

• Expenses that are covered due to an accident
• Cost of expenditure due to any emergency

But it is essential to know that a Health insurance policy covers only the hospital's expenses. If there are any other expenses related to your health, it does not come under Mediclaim insurance. The policyholder himself is supposed to deal with the extra expenses.

Now, let us get to see what health insurance is.

Health insurance is nothing but an insurance policy. It, too, just like Mediclaim, covers all the expenses, including medical and surgical. Once you issue health insurance, you get protection against every medical emergency.

The payment system takes place in one of the two processes. One is that the payment can be made directly by the insurer. The bill is directly settled between the hospital and the insurer. And if anyone follows the second method, then the insured can pay the insured bill out of their own pockets and later ask for its reimbursement.

But it is to be noted that health insurance is much costlier than Mediclaim as it covers the policyholder's cost extensively. Now, let us see the fundamental difference between Mediclaim and health insurance:

• Mediclaim does not cover the extra cost other than the hospital expenses, whereas health insurance covers the add-ons other than the hospital expenditure.
• A Mediclaim plan is not flexible, unlike health insurance. Health insurance has a sound planning system. Our expenses and add-ons are covered according to the plan that we choose.
• A Mediclaim plan covers only an amount of 3 lakhs, whereas health insurance covers an amount of 5 lakhs.

Now, the question lies, which one is better and to know that you should consider three things:

1. The financial state you are in
2. The flexibility you require in your health plan
3. You should always check on your medical history

Now, it depends upon you which one is better for you after considering these factors.

Is bear rally over?

Falling inflation is good for any economy  Inflation in July has fallen for 4 straight months, from 7.79% in April to 6.71% in July. That said, it is still above the RBI's 6% comfort zone.

Three major factors over the next three months will determine if this is the formation of a bull rally or if this is another bear rally. And all these three factors are locked in a circle.

Inflation: Falling inflation will cause central banks around the world to go easy on rate hikes.

Rate hikes: If inflation falls and a recession is averted, central banks will limit rate hikes.

Earnings: If central banks limit rate hikes, credit becomes cheaper and people's spending capacity will go up, which bodes well for corporate bottomlines.

Some things to know before closing your credit card

1) While closing your card, consider the age of the card. Closing the oldest card that you hold may harm your credit score, as it can cause your credit history to appear shorter.

2) Before closing your credit card, cancel all auto payments linked to that credit card. If you do not cancel all your auto bills, the establishments requesting payment to that already closed credit card would levy a penalty if the pending money is not paid within the due date.

3) The credit card provider company will only close a credit card if all the dues are cleared. Hence, clear your dues before applying for cancellation or in the next cycle.

4) Also, before closing your card make sure to redeem its benefits. For instance, check for your reward points balance and redeem them before you apply for cancellation of the card.

5) Be sure and make up your mind while opting to close a credit card. Many times, credit card providers give attractive offers especially to you for continuing. If you really want to close your credit card, do not fall for those offers.

6) While applying for cancellation, always follow-up in writing. One should make sure that they have it in writing that they want to close/cancel their credit card account. Also, try to get a written confirmation from the credit card provider, stating that the credit card was closed.

7) Lastly, check your credit report to make sure that the credit card provider reports that the credit card as closed.

Scan & Withdraw: Soon, You May No Longer Need Debit Cards to Draw Cash From ATMs!

Following the historic demonetisation drive in 2016, the pace at which monetary transactions shifted to the digital mode in India was not just swift but also quite astounding!

Today, almost all of us will be quite familiar with the QR (Quick Response) code and have probably used this mode to enable payments at least once.

But did you know that soon, ATMs across the country will no longer be dependent only on debit cards and that you can withdraw money from them through the QR codes generated by your bank?

Yes, you read that right! Just the way you have probably made instant payments using QR codes through payment interfaces, and gateways like UPI, Paytm and Tez, ATMs will also have the same process incorporated in its money withdrawal mechanism soon enough.

At this point, the app will generate the QR code that will be scanned by the teller machine and, lo and behold, you will have your money in hand.

The best part about this new facility is that people can choose the currency notes that they would prefer to withdraw amongst the denominations of ₹100, ₹500 or ₹2,000 as well! Additionally, they can also avail demand drafts from ATMs instead of banks through this facility.

Alongside, upping the digital transaction game is India Post Payments Bank (IPPB), whose new mode of retail banking is not only hassle-free but also quite innovative. By launching ‘QR cards’ that work on the same scan-and-pay mechanism, IPPB intends to do away with the requirement of both ATM and debit cards and PIN-based system for cash and digital transactions.

For security reasons, this system would require either a biometric authentication or fingerprint scan from the customers. Interestingly, this provision also frees people from searching for ATMs.

Instead, all they need to do is reach out to their post office, postman or Gramin Dak Sevak (GDS), who will then send their functionaries to the desired location and give the customer the required amount at the cost of ₹25 per transaction. As for digital transactions, a nominal fee of ₹15 would be charged, 

Even here, the system is same. The QR card will be scanned by the postman or GDS, either at your home, post office or any other IPPB access point using a smartphone app or a QR code scanning machine. This way the risk that comes with forgetting the PIN or misuse of ATM cards can be easily ruled out, as all the postman will only need from you is your fingerprint!

Interestingly, IPPB is also planning bring the unorganised retail sector on board. This means, you would soon be able to purchase groceries at any local kirana shop using a QR card.