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.

Driving licences to be uniform across India

From next July, new driving licences (DLs) and (RCs) issued by all states and union territories will be uniform in look, colour, design and will have the same security features.

The 'smart' DLs and RCs embedded with microchips will have QR codes. They will also be enabled with the near-field communication (NFC) feature, just like that of Metro and ATM cards, so that traffic enforcers with hand-held devices can easily access details stored in the cards.

The new DL will have details of a driver's declaration to donate organs and mention if he/she is driving a specially designed vehicle meant for the physically challenged.

SBI's Basic Savings Bank Deposit Account

State Bank of India (SBI) offers certain accounts where average monthly balance (AMB) rule is not applicable. SBI's basic savings bank deposit (BSBD) account is a type of zero balance savings accounts and does not require customers to maintain any particular minimum average balance. 

This account can be opened by any individual provided he/she has valid KYC (Know Your Customer) documents. SBI's BSBD account is primarily meant for poorer sections of society to encourage them to start saving without any burden of charges or fees, said SBI.

Here are 5 things to know about SBI's basic savings bank deposit (BSBD) account:

1) SBI's basic savings bank deposit (BSBD) account offers the same rate of interest as applicable to savings bank account, according to SBI's website - sbi.co.in. SBI currently offers a rate of interest of 3.5 per cent per annum on deposits up to Rs 1 crore in savings bank accounts.

2) SBI's BSBD account can be opened singly, jointly, or with either or survivor, former or survivor, anyone or survivor etc. facility.

3) The customer cannot have any other savings bank account, if he/she has a basic savings bank deposit account, said SBI.  If the customer already has a savings bank account, the same will have to be closed within 30 days of opening a basic savings bank deposit account.

4) SBI's basic savings bank deposit (BSBD) account comes with a Basic RuPay ATM-cum-debit card, issued free of cost. The account holder can use this card at ATMs or use the withdrawal forms at branches to withdraw cash, as mentioned on SBI's portal.

5) Maximum of 4 withdrawals in a month is allowed in a BSBD account, which includes ATM withdrawals at own and other bank's ATMs and transactions through other mode including RTGS/NEFT/clearing/branch cash withdrawal/transfer/internet debits/standing instructions/EMI, etc. 

Your Debit/Credit Card Won’t Work After December 31

RBI’s Notification On Existing Debit/Credit Cards

In 2015, RBI had issued a notification under 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), which covered all existing debit and credit card holders. As per the notification, RBI has stated that all debit and credit cards have to be chip based, which are called EMV Debit/Credit Card. Also known as ‘Chip n Pin’ cards.

Which Debit Cards/Credit Cards Needs To Be Changed?

Majority of debit and credit cards being used today are magnetic stripe only cards, which process greater security risks.

In case your existing debit and credit cards are magnetic stripe only cards, then they will be useless after December 31st.

Every magnetic stripe only credit/debit cards need to be changed to EMV Chip based cards before December 31st, 2018.

Has Banks Started Informing Users?

Yes. Since last few days, bank customers must have received SMS from their respective banks, suggesting them to replace their existing magnetic stripe only cards with EMV based cards.

Most of them must have deleted the SMS, assuming it to be spam. But this time, it’s not.

How Much Charge For Replacing The Cards?

Several banks have announced that they will replace the magnetic stripe cards with EMV based cards for free.

All you need to do is, visit your nearest bank branch, and request for the replacement.

What Is So Special About EMV Cards?

EMV or Europay-Mastercard-Visa cards are globally accepted as a standard for authenticating transactions using a chip, which holds the vital information related to your account.

In the current magnetic stripe based cards, the vital information is stored in the single magnetic stripe, which makes its cloning easier. Fraudsters can easily close the magnetic stripe, as the information is static.

However, EMV based cards are not only secured by chip which is dynamic information, but also a password which needs to be entered everytime for authenticating a transaction.

These two major features make EMV based based more secured, and this is the reason RBI wants every card to be EMV.

Earlier, September 1, 2015 was the deadline, which has been extended gradually to December 31, 2018 now.

Does baba Ramdev planning to enter in politics

Does baba Ramdev planning to enter in politics!? It is a big question which only time can give proper answer. 

However recently he told a leading new Chanel that "if geovernment lets me, and gives some relief in tax, I can give petrol diesel to India at Rs 35-40 per litre. Fuel needs to brought under GST and not the 28 per cent rate."

Rising prices of things can cost the Modi government very dearly. He will have to act.

Frustration is a huge problem for the youth. They think they have no opportunities. That's not true. I did not have any godfathers and yet I set this huge enterprise (Patanjali).

I don't run after money. Money runs after me.

People who criticise PM Modi - it is their fundamental right. But he has done good work. Launched the Clean India mission, not allowed any major scam. Yes, some political questions are being raised about the Rafale deal.

I have withdrawn myself politically. I am with all parties and I am with no parties.

I am a scientific sanyasi. We have more than 300 scientists at Patanjali. Put a very high premium on quality of our products.

People who are making the cow a religious animal are wrong. Cow has no religion.

I not saying at all that LGBTQ people should be beaten up with sticks but it is against the order of nature.

My mantra is don't fall sick. If you fall sick, your entire family suffers. Yoga helps your body's structure and character. A person who does yoga stays fit.

Passenger car boom in Indian market.

Cars in India are no longer a luxury as they were almost 10 years ago. A 22 years old person fresh into his/her first job can easily own a car.

He/she might not have the money to buy it outright but he/she has no dearth of financing options at his/her disposal. Therefore, it is no wonder that the Indian passenger vehicle market grew the most in 2017 as compared to any other country in the world.

While the USA market actually shrunk by 11%, Indian market registered a growth of 9.15% as it expanded to 2.98 million units in 2017-18 from 2.73 million units in 2016-17. With the four-wheeler market enjoying this boom, it is no wonder that there are so many car loan options for the customer today.

The processing time and loan disbursal time for these car loans have come down significantly in the recent years. Most of the banks in India take just about 24 to 48 hours to disburse the desired car loan amount. The quality of service has increased significantly too. These banks have also made it easy for customers to access loan information easily through the Internet.

*RULE 72*

*What is Rule 72?*

In personal finance, if you divide the number 72 by the rate of interest, you get to know the number of years it will take for you to double the money..
Eg: if the rate of interest is 9%, simply divide the number 72 by 9% and the answer is 8. Thus it will take 8 years to double your money if you invest at 9% p.a. rate of interest.

*INTEREST:* We can use this rule in reverse to know the rate of interest needed to double your money to achieve your set goal.
Eg: If you have 250k today and you need 500k in 5 years. Just divide the number 72 by 5, the answer is 14.41%. Thus you need a type of investment avenue, where you earn at least 14.41% p.a. as rate of interest/returns to double your investment amount in 5 years.

*INFLATION:*
This 'Rule 72' helps you to understand about inflation also. It helps you to calculate the amount of time it will take for inflation to make the real value of money half. Let's say present inflation is 5.5%. When you divide 72 by 5.5% the answer is 13.09 years.  That is to say, if you have 100k in your kitty today, it would take around 13.09 years for the value of the money to be halved..

Hope it helps you in your day to day investments and other finance related activities.

12 golden rules of investing

Whether you’re an old timer or are planning on buying your first share, these 12 rules will help you learn how to become an investor who is knowledgeable, disciplined and successful.


1. Diverse Portfolio


Your asset allocation should be diverse, and should ideally not be more than 10% in one single investment instrument. So distribute your capital between a variety of funds and stocks, in order to spread out your risks.


2. Don’t Invest if You Don’t Understand


Most people tend to ignore all financial jargon, and invest their money into products of which they do not understand the risks. Understand the terms and conditions clearly before you make an investment.


3. Invest Long Term


In long term investments, compounding interest on your capital makes a big difference to your profits over time. Whereas, playing the market to make quick profits usually doesn’t turn out to be as favourable.


4. Invest Regularly


Investing periodically throughout the year can help you take advantage of the market highs, while keeping you from getting hit too hard by the lows.

5. Stay Updated


The more you keep yourself abreast with the latest happenings, the more knowledge you will have about how to increase the value of your investment portfolio. Read the newspaper, watch the business channels on TV, and browse the internet for the latest news.


6. Beware of Herd Mentality
You will come across people making money rules without having done much research. Don’t follow the herd. Don’t invest in a stock just because all your friends are. Always make an informed decision, before taking any action.


7. Don’t Invest Only to Avoid Tax


Many people invest in products solely because they want to save on taxes. However, in doing so they completely overlook the disadvantages of investing in that sector. Paying taxes is much cheaper than paying unreasonably high fees and charges!


8. Be Disciplined


If you want to be a successful investor,  then you must follow a disciplined investment approach. It is critical to keep the long term picture in mind and don’t let the everyday volatility of the market freak you out.


9. Keep Emotions at Bay


Often investors end up losing money because of their inability to keep their emotions in check. In order to make sound investment decisions, it is important to not let your emotions cloud your financial judgements.


10. Only Invest Your Surplus Funds


It is always better to stay on the safe side, so only invest if and when you have surplus funds. Don’t dump in your retirement money or your children’s college savings into the stock market. Though you’re investing money for profits, remember that these are funds that you cannot afford to lose.


11. Monitor Your Portfolio


Make it a point to frequently compare your portfolio’s performance with a standard benchmark. This will help you detect the funds or stocks that are not doing well, and the ones that are. You can accordingly sell the bad ones, and buy more of the profitable ones.


12. Seek Professional Help


If you don’t have the time or the knowledge to review your profile and make sound investment decisions, then it is important to hire an expert. Take professional help from financial firms who provide professional wealth management services for your investments.


These 12 rules will help you make decisions that will benefit you in the long run. Follow them diligently, and be rest assured that you’re on the path to financial success.

LIC drive to for Growth push and recast policies

The LIC is planning to redesign 12 policies by the end of this year to comply with the revised life insurance guidelines laid down by the IRDA in February.

The country’s largest life insurer is facing the dual challenge of having an adequate number of policies that adhere to the revised guidelines and sufficient trained agents to sell them.

The Insurance Regulatory and Development Authority (IRDA) had initially set a deadline of September 30 to life insurers to come up with policies conforming to the new guidelines. The deadline was later extended to December 31.

The LIC had 50 saleable policies at the beginning of the year. Almost all of them need to be revised following the IRDA directive.

At present, the LIC’s Jeevan Arogya and Jeevan Akshay meet the new guidelines. The challenge that lies before the LIC is to retain the agents on the policy changes within a short time….. with new plans, new conditions… for all those things they have to spend a lot of time and money. The LIC has more than 1.4 lakh agents in the eastern zone, which serves 3.36 crore policyholders through various branches and satellite offices.

The LIC is also looking to strengthen alternative channels such as bancassurance, which involves the sale of policies through banks. Bhargava said the insurer had tied up with 19 banks, of which nine are PSU lenders and the rest gramin and state co-operative 

Sebi frown on WhatsApp

Dealing room activities of brokers, fund managers and other institutional investors have come under regulatory scanner for possible manipulations through use of Web-based social networking apps and messaging platforms such as WhatsApp and BlackBerry Messenger (BBM).

While the use of personal mobile phones are already prohibited inside dealing rooms — where trades are executed on behalf of clients — some brokers and fund managers have been found to be active on social networking and other Web-based groups and messaging platforms while placing orders, sources said.

This has brought to fore significant risks of insider trading, front running and other manipulative activities with regard to key client trade information being shared with outside investors or even among the dealers possibly working as a cartel, they added.

Brokers and fund managers are not allowed to use their personal mobile phones inside dealing rooms to receive orders from clients, while fund houses and brokerage firms are required to store records of all client calls for future inspections by the Securities and Exchange Board of India (Sebi).

Sebi is considering further tightening its norms with regard to dealing room communications, given the fast emergence of social networking and other Web-based messaging platforms. Those likely to be affected include entities dealing in stocks, derivatives and currency trading.

In a global probe into suspected rigging of forex rates, including those involving rupee as well, foreign regulators already suspect the use of intra-bank and Web-based messaging platforms among currency traders. Subsequently, many large global banks have already started clamping down on the use of such platforms inside their dealing rooms and similar action can be expected with regard to Indian markets as well.

The market watchdog is already mulling steps to check risks posed by the use of new-age smartphone messaging services such as BBM and WhatsApp by manipulators to spread sensitive information about their target stocks.

Messages through applications such as WhatsApp and BBM are difficult to monitor, given the multi-level difficulties faced in tracking the source and spread of market-sensitive information through these platforms.

RBI bans zero interest loans on EMI to credit card holders

In a move that is likely to dent retailers' festive season sales, the Reserve Bank of India has barred 'zero per cent interest' schemes offered by banks to credit card holders. Banks will now be able to recover dues through equated monthly installments only when customers are billed regular interest charges.

Describing the zero per cent interest scheme as a 'pernicious practice' which deters customer protection and accounting integrity, RBI has said that banks should not resort to any practice that would distort the interest rate structure of a product as this 'vitiates transparency in pricing mechanism' and prevents customers from taking informed decisions. Bankers said RBI has indicated that zero interest loans are a violation of its lending norms which prevent loans below a bank's base rate.

Retailers said the directive would deprive aspirational consumers of a facility to acquire goods they cannot otherwise afford and expect that the festival sales might get further depressed this year. Banks said that over Rs 1,000 crore of billings out of the monthly credit card billings of Rs 11,000 crore were coming from purchases billed under EMIs. According to banks, retailers may not agree to disclose the discounted price out of fear that this might lower the brand's worth among those paying upfront.

Besides zero interest EMIs that are funded by dealer discounts, RBI has also banned schemes where banks on their own offer cardholders the option to break down their large purchases into EMIs for a processing fee. "In the zero percent EMI schemes offered on credit card outstanding’s, the interest element is often camouflaged and passed on to the customer in the form of processing fee," RBI said.

RBI's circular has also asked banks to terminate relationships with those merchants who charge customers more for facilitating payments by debit card.

Blackberry sold out

BlackBerry’s fate is coming into focus. The company announced on Monday that it has signed a letter of intent with a consortium led by Fairfax Financial to buy out the company for about $4.7 billion, or $9 per share.

Fairfax CEO Prem Watsa, a former BlackBerry board member, said that the buyout would make BlackBerry a private company and would “open an exciting new private chapter for BlackBerry, its customers, carriers and employees.” BlackBerry says it expects Fairfax to finish conducting its due diligence by November 4th.

Even though the deal is non-binding at this point, BlackBerry will still have to pay Fairfax a fee of $0.30 per share if the deal doesn’t happen. BlackBerry shares jumped about 3% on on the news. The company’s full press release follows below.

BlackBerry enters into letter of intent with consortium led by Fairfax Financial

WATERLOO, ONTARIO–(Marketwired – September 23, 2013) – BlackBerry Limited (NASDAQ: BBRY)(TSX: BB) today announced it has signed a letter of intent agreement (“LOI”) under which a consortium to be led by Fairfax Financial Holdings Limited (“Fairfax”) has offered to acquire the company subject to due diligence.

The letter of intent contemplates a transaction in which BlackBerry shareholders would receive U.S. $9 in cash for each share of BlackBerry share they hold, in a transaction valued at approximately U.S. $4.7 billion. The consortium would acquire for cash all of the outstanding shares of BlackBerry not held by Fairfax. Fairfax, which owns approximately 10 percent of BlackBerry’s common shares, intends to contribute the shares of BlackBerry it currently holds into the transaction.

The BlackBerry Board of Directors, acting on the recommendation of a special committee of the board of directors (the “Special Committee”), approved the terms of the LOI under which the consortium, which is seeking financing from BofA Merrill Lynch and BMO Capital Markets, would acquire BlackBerry and take the company private subject to a number of conditions, including due diligence, negotiation and execution of a definitive agreement (the “Definitive Agreement”) and customary regulatory approvals.

The Special Committee, chaired by Director Tim Dattels, was formed in August 2013 to review strategic alternatives for the company. J.P. Morgan and Perella Weinberg are acting as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP and Torys LLP are acting as legal advisors.

Diligence is expected to be complete by November 4, 2013 (“Diligence Period”). The parties’ intention is to negotiate and execute a definitive transaction agreement by such date. During such period, BlackBerry is permitted to actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals (“Alternative Transactions”).

If (A) during the Diligence Period

(i) BlackBerry enters into any letter of intent or definitive agreement providing for an Alternative Transaction,

(ii) BlackBerry ceases to negotiate with the consortium in good faith with a view to entering into the Definitive Agreement by the end of the Diligence Period, or

(iii) an Alternative Transaction is publicly proposed or publicly announced and is consummated within 6 months following the end of the Diligence Period, or

(B) during the 3 month period following the end of the Diligence Period, BlackBerry enters into any agreement providing for an Alternative Transaction with a person with whom discussions were held before or during the Diligence Period, then BlackBerry shall pay Fairfax a fee of U.S. $0.30 per BlackBerry share, provided, however, that no such fee shall be payable if the consortium shall have reduced the price offered below U.S. $9.00 per share without the approval of the board of directors of BlackBerry. In the event that a definitive agreement is signed with Fairfax the termination fee will increase to U.S. $ 0.50 per share.

Barbara Stymiest, Chair of BlackBerry’s Board of Directors, said: “The Special Committee is seeking the best available outcome for the Company’s constituents, including for shareholders. Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.”

Prem Watsa, Chairman and CEO of Fairfax, said: “We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees. We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.”

In addition to the consortium and its lenders being satisfied with all aspects of the due diligence to be carried out by them during the Diligence Period and the negotiation and execution of a binding definitive agreement approved by the board of BlackBerry, completion of the transaction will be subject to other customary conditions, including receipt of required regulatory approvals. There can be no assurance that due diligence will be satisfactory, that financing will be obtained, that a definitive agreement will be entered into or that the transaction will be consummated.

BDT & Company, LLC, BofA Merrill Lynch and BMO Capital Markets are acting as financial advisors, and Shearman & Sterling LLP and McCarthy Tetrault LLP are acting as legal advisors to Fairfax in connection with the transaction.

RBI penalises SBI for violation of norms PTI

The Reserve Bank on Wednesday said it imposed a fine of about Rs. 5.60 lakh on the State Bank of India (SBI) for violation of currency chest norms.

“The Reserve Bank of India has imposed a penalty of Rs. 5,62,555 on July 12, 2013, on SBI for violation of the terms of agreement with RBI for opening and maintaining currency chests,” the central bank said in a statement.

The penalty was levied in connection with deficiencies and lapses in the operation and maintenance of the currency chest at the Secunderabad branch of SBI, it said.

Last month, the RBI had imposed a penalty of Rs. 3 crore on SBI for violating know your customer (KYC)/anti-money laundering norms.

The penal action by RBI was taken after an online portal alleged violation of KYC norms and money laundering by banks and financial institutions.

“After considering the facts of each case...Reserve Bank came to conclusion that some of the violations were substantiated and warranted imposition of monetary penalty...” the central bank had said in a statement.

It is anticipated that financial sector entities had offered to open bank accounts and lockers for customers without following KYC norms, convert their black money into white and obtain fictitious PAN cards.

Those named in the expose include SBI, LIC, Punjab National Bank, Bank of Baroda, Canara Bank, Reliance Life, Tata AIA, Yes Bank, Indian Bank, Indian Overseas Bank, IDBI Bank, Oriental Bank of Commerce, Dena Bank, Corporation Bank, Allahabad Bank, Central Bank of India, Dhanlaxmi Bank, Federal Bank, DCB Bank and Birla Sun Life.

ATM woes top banking grievances

Hundreds of complainants aggrieved by shortcomings in banking services found their grievances redressed within a short period of two months, thanks to the Office of Banking Ombudsman (OBO), Chennai. About 96 per cent of the complaints from individuals ranged from non-dispensation of cash at ATM outlets despite their savings bank account getting debited, inordinate delay in returning the fixed deposit account of a deceased person to the guardian, failure to return title deeds, delay in sanctioning of loans or rejection of them without a valid reason and giving of wrong advice to bank customers, among other issues. Ten banks accounted for 75 per cent of the complaints. While cash transactions-related issues were resolved with the help of CCTV cameras installed at the ATM outlets, the other issues were resolved by inspecting the documents available with the respective banks. In a specific case, an individual had refused to file a complaint when he came to know his ATM card was misused by a relative. Sujatha Elizabeth Prasad, Chief General Manager, Banking Ombudsman Chennai, said: “Most of the problems arose due to lack of financial literacy among the customers. We are going to places where the awareness is low.” 

All Business Stalwarts are in the race for “Bank” business

Tata, Birla, Ambani... all the marquee names of India Inc want to float a bank.

The Reserve Bank of India (RBI) said it has received 26 applications from industrial houses such as Tata Sons, public sector units and non-banking financial companies for bank licenses, the last of which were handed out a decade ago.

India Posts has also applied, perhaps offering the most compelling case in terms of network — something that can overwhelm the spread of State Bank of India, India’s biggest commercial lender.

The RBI was earlier not too keen to hand out licenses to companies with exposure to broking or real estate. However, these restrictions were removed in its final guidelines.

The RBI is expected to give not more than two to three licenses before the end of this financial year.

Several industrial houses have applied through their NBFC arms. These include Reliance Capital steered by Anil Ambani, Aditya Birla Nuvo run by Kumar Mangalam Birla, Indiabulls Housing Finance and Bajaj Finserv.

Videocon Group applied through its arm Value Industries, while the Pawan Ruia Group, which owns tyremaker Dunlop in India, has applied through Suryamani Financing Company.

Micro financiers such as Bandhan Financial Services and Janalakshmi Financial Services have also applied for a licence.

Among companies with a sizable exposure to capital markets, India Infoline and Edelweiss Financial Services have applied.

The guidelines to set up a new bank need 10 years of financially sound and successful track record and minimum paid-up equity capital of Rs.500 crores. The new bank must have at least 25% branches in non-banked rural areas and get listed in three years.

RBI opened window for new banks after a decade of granting licenses to Yes Bank and Kotak Mahindra Bank. There were few others who were granted the license to set up a bank but they failed.

Among the more unknown names are UAE Exchange & Financial Services, a remittance company and INMACS Management Services, a consulting and advisory firm.

Mahindra & Mahindra Financial Services opted out of the race last week saying the guidelines were too tough and expensive for NBFCs.

New Passport Application Process

With effective from 21st June, 2013, Government of India has changed the process of applying for Passport & Launched an Online Payment System for Passport Applicants!!

New Process & step by step process here: http://bit.ly/11uvJLL