Month: February 2021

RailTel Corporation IPO Opens Today: Most Brokerages’ Give A Subscribe Rating To The Issue

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Investment

oi-Roshni Agarwal

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RailTel Corporation will open its public issue today for subscription by investors. Here’s all the details you should know if you are considering subscribing to the issue:

Issue details:

The company aims to aggregate a total of Rs. 819.24 crore through the issue and the proceeds shall go to the centre. The issue will close on February 18.

About the company:

RailTel is the information and communications technology (ICT) infrastructure provider. This is the country’s leading telecom infrastructure provider with optic fiber network throughout the country.

RailTel IPO Opens: Should You Subscribe For Listing Gains Or Long Term?

Financials:

In FY20, the company reported the highest net profit margin among telecom companies and key IT/ICT companies in India, with a net profit margin of 12.50 percent while its net profit margin was 8.48 percent in the six months ended September 2020. . It reported a 7.5 percent CAGR rise in topline. EBITDA margin expanded from 27 percent in FY18 to 29.6 percent in FY20. Adjusted PAT increased by 8.9 percent CAGR over FY18-20.

The company has been consistently paying dividend since FY2008.

Brokerages’ view:

All of the brokerages have given a ‘Subscribe’ to the issue as it is a 100% debt free company, state run Mini Rata CPSE, consistent dividend record, better margins as well as return rations in comparison to peers. The company derives most of its revenue from the telecom division and the rest from the railways’.

“RailTel, if it performs efficiently can benefit from the 5G growth in India from a fiberisation needs’ perspective. It could also play a key role in digital transformation of the railways,” said Nirali Shah, Head of Equity Research at Samco Securities.

Besides, “COVID-19 has had a minimal impact on the telecom industry and has in fact triggered growth for certain players due to increased data usage and VPN services for people working from home. Since RailTel is a debt-free company and pays consistent dividends it could witness some traction,” she added.

But for long-term investors, there are a few red flags, she feels. “Firstly, the company has delivered single digit revenue and PAT CAGR of 7.5 percent and 2.5 percent, respectively, from FY18 to FY20. There is high dependence on the government entities and concentration risk given that 23.8 percent of its revenues come from top 3 customers. Its presence in a highly regulated industry is another cause for concern,” she explained.

Overall, “the company is fairly priced at its FY20 P/E of 21.3 times. It has been commanding a good grey market premium indicating the offer will sail through but keeping the risks in mind, we recommend investors to subscribe for listing gains only,” Nirali Shah advised.

Angel Broking also feels RailTel is going to play a key role in digital transformation of Indian Railways. “The company’s margins & return ratios are better compared to other telecom players in India. There are no listed peers for the company. The issue has been priced at 21.4x PE on a FY20 trailing basis, which is quite reasonable by looking at the strong future growth rates of the company,” said the brokerage which expects a good listing for the company.

“We are positive on the long-term prospects of the industry as well as the company, we recommend subscribing to the RailTel IPO for long term as well as for listing gains,” the brokerage said.

Grey market premium:

Ahead of its IPO, the shares of RailTel were trading at a premium of 48 percent. And amid such a momentum when markets are scaling new highs there is seen to be a decent listing for the scrip of RailTel. Also, the issue is being deemed from the long term perspective.

GoodReturns.in



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Govt could raise up to ₹12,800 cr if it divests in 2 PSBs: CARE Ratings

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The government could raise between ₹6,400 crore and ₹12,800 crore if it cuts its stake to 51 per cent in two of the four public sector banks (PSBs) — Indian Overseas Bank (IOB), Bank of Maharashtra (BoM), Bank of India (BoI) and Central Bank of India (CBoI) — said to be candidates for disinvestment, according to CARE Ratings.

As per an equity matrix — based on average price (one-year average daily), paid-up capital, number of shares and government ownership — drawn up by the credit rating agency, IOB has the highest equity capital (₹16,437 crore), while BoI has the highest market price (₹44.75 per share) relative to the others.

Also read: PSBs consolidation: It is credit negative if govt divests stake in left out banks, says ICRA

Based on the aforementioned banks’ market prices — BoI (₹44.75 per share/ government stake: 89.1 per cent) and IOB (₹9.88/ 95.8 per cent), if the government were to lower its stake to 51 per cent, which would still leave majority ownership of these banks in the government’s hands, then the amount that could be raised from these two banks would be around ₹12,800 crore, as per CARE’s assessment.

BoM (₹11.85 per share/ government stake: 92.5 per cent) and CBoI (₹14.85/ 92.4 per cent) would garner around ₹6,400 crore, it added.

But if the government were to divest fully from these two banks, the amount that could be raised would be around ₹28,600 crore, the agency said.

In her Budget speech on February 1, 2021, Union Finance Minister Nirmala Sitharaman said: “Other than IDBI Bank, we propose to take up the privatisation of two public sector banks and one general insurance company in the year 2021-22.

“This would require legislative amendments and I propose to introduce the amendments in this Session itself.”

In 2021-22, the government would also bring the initial public offer of Life Insurance Corporation of India, she added. For this also, the government will bring in the requisite amendments in this Session itself.

The government has estimated ₹1.75-lakh crore as receipts from disinvestment in FY2021-22.

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Government to bring amendments to two Acts to enable privatisation of PSU banks

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To facilitate privatisation of public sector banks, the government is likely to bring amendments to two legislations later this year.

Amendments would be required in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 for privatisation, sources said.

These Acts led to nationalisation of banks in two phases and provisions of these laws have to be changed for privatisation of banks, they said.

As the government has already announced the list of legislative business for the Budget session, it is expected that these amendments may be introduced in the Monsoon session or later during the year, sources added.

The ongoing Budget session is scheduled to take up as many as 38 Bills including the Finance Bill 2021, Supplementary Demands for Grants for 2020-21 and related Appropriation Bill, National Bank for Financing Infrastructure and Development (NaBFID) Bill, 2021, and Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.

Also read: Will FM’s asset monetisation plan pay off?

Finance Minister Nirmala Sitharaman while presenting Budget 2021-22 earlier this month had announced privatisation of Public Sector Banks (PSBs) as part of disinvestment drive to garner ₹1.75 lakh crore.

“Other than IDBI Bank, we propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22,” she had said.

Later in one of the post Budget interactions, the Finance Minister had said the government will work with the Reserve Bank for execution of the bank privatisation plan announced in the Union Budget 2021-22.

“The details are being worked out. I have made the announcement but we are working together with the RBI,” she had said, when asked about the proposal.

The government last year consolidated 10 public sector banks into four and as a result the total number of PSBs came down to 12 from 27 in March 2017.

As per the amalgamation plan, United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank, making the proposed entity the second largest PSB. Syndicate Bank was merged with Canara Bank, while Allahabad Bank was subsumed in Indian Bank. Andhra Bank and Corporation Bank were amalgamated with Union Bank of India.

In a first three-way merger, Bank of Baroda merged Vijaya Bank and Dena Bank with itself in 2019. SBI had merged five of its associate banks – State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad- and also Bharatiya Mahila Bank effective April 2017.

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How To Transfer National Savings Certificates From One Person To Another?

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NSCs Transfer Rules

  • Only after completion of at least one year from the date of issuance NSC can be transferred from one person to another.
  • An individual who is looking to transfer NSC is required to fill Form NC 34 completely. Specifics such as the name of the transferee, the name of the transferor, the serial number of the certificate, the amount of the certificate, the date of issue and the holder’s signature are required to fill in Form NC 34.
  • The holder who is going to transfer is also required to have KYC documents such as a photograph, address, valid proof of identity and a certified declaration in the specified format in order to comply with the regulations relating to the authorization of the NSC.
  • In the post office, the old certificate is then validated by the designated individual with the postmaster’s stamp and the post office’s date seal. In addition, a fee for the transfer of a certificate will be charged by the post office.

Conditions to be met by the holder

Conditions to be met by the holder

Only after a year from the issuance of the certificate a certificate can be transferred. This clause is not applicable if the transfer is rendered on behalf of the court to the relative, legitimate successor of the deceased holder or to the existing holder after the death of the joint holder. A transferee must be eligible to purchase a certificate in order to transfer the certificate successfully. Specifics such as the name of the transferor, the name of the transferee, certificate specifics, serial numbers, amount and date of issue must be specified. In the case of a minor, the form has to be signed by the holder or guardian. For the transfer of savings certificates from one individual to another, the applicant must fill Form NC 34. A fee, if required, may be imposed by the post office for the transfer procedure.

KYC norms and transfer process

KYC norms and transfer process

In order to conform with the laws relating to the issuance of the NSC, the transferee must have a signed declaration in the specified format. In addition, the transferee must have KYC records such as a photograph, address and proof of identification and file the KYC form. As the old certificate is not discharged the old holder’s name is rounded and the current holder’s name is recorded on the old certificate. The designated postmaster then approves it. The postmaster’s stamp and the post office’s date stamp are also placed to make the transfer process complete.

Points to note

Points to note

  • For each set of a certificate, a specific application is needed.
  • Only for the total amount of the certificate, the transfer can be done.
  • The amount can’t be partially transferred in the NSC transfer process.
  • If the transfer has been rendered to a relative, legitimate successor of a deceased purchaser, existing holders on the death of joint holders and on-court directives NSC can be transferred several times during the maturity period.
  • Before proceeding with an NSC transfer, the transferee must be eligible to purchase the certificate.



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Earn Regular Monthly Income with SBI Annuity Deposit Scheme

Personal Finance

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Investment

oi-Sneha Kulkarni

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When you have a disposable sum in your hands, invest in a monthly or quarterly interest payment scheme so that you can earn a steady stream of income. SBI Annuity Deposit Plan is a simple scheme where investing a lump sum amount now, promises fixed recurring monthly revenue in the future.

SBI Annuity Deposit Plan

The SBI Annuity Deposit Plan requires the depositor to pay a one-time lump sum amount and to receive the same in Equated Monthly Instalments (EMIs). Includes a share of the principal sum and interest on the reduction of the principal amount, compounded every quarter and discounted every month.

Who can open SBI Annuity Deposit Plan?

Any individuals, including minors, can open the SBI Annuity Deposit Plan. Mode of holding could be singly or jointly. While any customer in the NRE or NGO categories cannot open the SBI Annuity Deposit Scheme

Earn Regular Monthly Income with this SBI Scheme

Features of SBI Annuity Deposit Plan

1. SBI Annuity Deposit Plan comes with a different period of deposit.

2. Individuals can choose from 36/60/84 or 120 months.

3. SBI Annuity Deposit Plan is available at all branches all over India.

4. The minimum monthly annuity Rs 1000/- for the relevant period.

5. The minimum amount of deposit should not be below Rs 25,000/-

6. There is no limit on the maximum deposit

7. Interest rate is applicable as per term deposits rate

8. The interest rate to all Senior Citizens of age 60 years and above will be 0.50% above the applicable rate.

9. Individuals can also opt for Overdraft or loan up to 75% of the balance amount of the annuity.

10.SBI Annuity deposit scheme is accessible for 3, 5, 7, and 10 years. SBI also offers a nomination facility with the scheme.

How much to invest for monthly income?

SBI pays an interest rate of 5.40% on deposits matured in five to ten years. For FDs aged three or less than five years, SBI offers an interest rate of 5.30%.

Here is an example that will explain how it works:

Investment Phase Payout Phase
Investment Phase Tenure Rate of Interest Total Corpus Lump-Sum Payment Tenure Monthly Payout
Rs 1,00,000.00 24 months 5.35% 110093 Nil 24 months 4897
Rs 2,00,000.00 24 months 5.35% 220186 Nil 24 months 9793

Disclaimer: The figures and data used in the above calculation are for reference purposes only.

Individuals can opt for this option from a savings account, current account, or OD account to open their Annuity bank account. The account chosen for debiting should be valid transactional a/c via the Internet Banking channel and should not be stopped, dormant, or locked account.

Payment will begin on the anniversary date of the month. If that day is non-existent (29th, 30th, and 31st), it will be paid on the first day of the next month.

Premature payment is allowed up to a maximum volume of Rs.15 lakes. However, an early withdrawal is provided only in the event of the investor’s death.

Should you opt?

Generally, members of the working class do not have lump-sum amounts. In such cases, most people are protecting their future by investing in a recurring deposit (RD). However, if you have enough money and you are looking for a steady income without any risk, this is the scheme for you.



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Earn Regular Monthly Income with SBI Annuity Deposit Scheme

Personal Finance

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Read More/Less


Investment

oi-Sneha Kulkarni

|

When you have a disposable sum in your hands, invest in a monthly or quarterly interest payment scheme so that you can earn a steady stream of income. SBI Annuity Deposit Plan is a simple scheme where investing a lump sum amount now, promises fixed recurring monthly revenue in the future.

SBI Annuity Deposit Plan

The SBI Annuity Deposit Plan requires the depositor to pay a one-time lump sum amount and to receive the same in Equated Monthly Instalments (EMIs). Includes a share of the principal sum and interest on the reduction of the principal amount, compounded every quarter and discounted every month.

Who can open SBI Annuity Deposit Plan?

Any individuals, including minors, can open the SBI Annuity Deposit Plan. Mode of holding could be singly or jointly. While any customer in the NRE or NGO categories cannot open the SBI Annuity Deposit Scheme

Earn Regular Monthly Income with this SBI Scheme

Features of SBI Annuity Deposit Plan

1. SBI Annuity Deposit Plan comes with a different period of deposit.

2. Individuals can choose from 36/60/84 or 120 months.

3. SBI Annuity Deposit Plan is available at all branches all over India.

4. The minimum monthly annuity Rs 1000/- for the relevant period.

5. The minimum amount of deposit should not be below Rs 25,000/-

6. There is no limit on the maximum deposit

7. Interest rate is applicable as per term deposits rate

8. The interest rate to all Senior Citizens of age 60 years and above will be 0.50% above the applicable rate.

9. Individuals can also opt for Overdraft or loan up to 75% of the balance amount of the annuity.

10.SBI Annuity deposit scheme is accessible for 3, 5, 7, and 10 years. SBI also offers a nomination facility with the scheme.

How much to invest for monthly income?

SBI pays an interest rate of 5.40% on deposits matured in five to ten years. For FDs aged three or less than five years, SBI offers an interest rate of 5.30%.

Here is an example that will explain how it works:

Investment Phase Payout Phase
Investment Phase Tenure Rate of Interest Total Corpus Lump-Sum Payment Tenure Monthly Payout
Rs 1,00,000.00 24 months 5.35% 110093 Nil 24 months 4897
Rs 2,00,000.00 24 months 5.35% 220186 Nil 24 months 9793

Disclaimer: The figures and data used in the above calculation are for reference purposes only.

Individuals can opt for this option from a savings account, current account, or OD account to open their Annuity bank account. The account chosen for debiting should be valid transactional a/c via the Internet Banking channel and should not be stopped, dormant, or locked account.

Payment will begin on the anniversary date of the month. If that day is non-existent (29th, 30th, and 31st), it will be paid on the first day of the next month.

Premature payment is allowed up to a maximum volume of Rs.15 lakes. However, an early withdrawal is provided only in the event of the investor’s death.

Should you opt?

Generally, members of the working class do not have lump-sum amounts. In such cases, most people are protecting their future by investing in a recurring deposit (RD). However, if you have enough money and you are looking for a steady income without any risk, this is the scheme for you.



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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 439,688.20 2.98 0.01-5.30
     I. Call Money 8,300.99 3.25 1.90-3.50
     II. Triparty Repo 336,483.75 3.03 2.90-3.40
     III. Market Repo 94,758.46 2.78 0.01-3.26
     IV. Repo in Corporate Bond 145.00 5.30 5.30-5.30
B. Term Segment      
     I. Notice Money** 985.43 3.25 2.40-3.40
     II. Term Money@@ 179.00 – 3.05-3.40
     III. Triparty Repo 500.00 3.10 3.10-3.10
     IV. Market Repo 10.00 2.70 2.70-2.70
     V. Repo in Corporate Bond 0.00 – –
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Reverse Repo Mon, 15/02/2021 1 Tue, 16/02/2021  5,23,880.00 3.35
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo – – – – –
3. MSF Mon, 15/02/2021 1 Tue, 16/02/2021 2.00 4.25
4. Long-Term Repo Operations –   –   –
5. Targeted Long Term Repo Operations          
6. Targeted Long Term Repo Operations 2.0          
7. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -5,23,878.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Reverse Repo – – – – –
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 12/02/2021 14 Fri, 26/02/2021 200,017.00 3.52
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo – – – – –
3. MSF – – – – –
4. Long-Term Repo Operations# Mon, 24/02/2020 365 Tue, 23/02/2021 15.00 5.15
  Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
D. Standing Liquidity Facility (SLF) Availed from RBI$       29,990.06  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -92,929.94  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -6,16,807.94  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 15/02/2021 4,35,768.61  
     (ii) Average daily cash reserve requirement for the fortnight ending 26/02/2021 449,962.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 15/02/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 29/01/2021 848,955.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
Rupambara
Director   
Press Release : 2020-2021/1107

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NBFCs’ stressed assets could touch ₹1.5-1.8-lakh cr by fiscal end: Crisil Ratings

Banking & Finance

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Stressed assets of non-banking financial companies (NBFCs) are likely to touch ₹1.5-lakh crore to ₹1.8-lakh crore by the end of the current fiscal, according to a report by Crisil.

This would amount to about 6per cent to 7.5 per cent of their assets under management (AUM), it said.

Also read: InvITs, REITs can raise ₹8-lakh crore capital in the medium term: Crisil

However, the one-time Covid-19 restructuring window, and the micro, small and medium enterprises (MSMEs) restructuring scheme by the Reserve Bank of India (RBI) will limit the reported gross non-performing assets (GNPA), it said in a statement on Tuesday.

“Alongside wholesale loans (dominated by real estate and structured credit), vehicle finance, MSME finance and unsecured loans have been in the spotlight this year due to a rise in stressed assets,” it said. The impact is likely to be transitory for vehicle finance.

“The big challenge this year will be the unsecured personal loans segment, where underlying stress has increased significantly with early-bucket delinquencies more than doubling for many NBFCs. This segment had last seen such pressure in 2008-10, after the global financial crisis,” it further said.

Unsecured loans to MSMEs is another area where underlying borrower cash flows have been affected, Crisil also highlighted. “However, despite the potential asset-quality stress, reported metrics may stay benign on the back of high write-offs,” it said.

Stressed assets in real estate finance could touch 15 per cent to 20 per cent of AUM by March this year, the agency said. In the category of unsecured loans (including personal loans and consumer durables), stressed assets could amount to 9.5 per cent to 10 per cent of AUM, while in vehicle finance it could be at a similar 9 per cent to 10 per cent of AUM. Stressed assets in lending to the MSME segment could reach 7.5 per cent to 8 per cent of AUM by March this year, Crisil projected.

Krishnan Sitaraman, Senior Director, Crisil Ratings, said, “Collection efficiencies, after deteriorating sharply, have now improved, but are still not at pre-pandemic levels. There is a marked increase in overdues across certain segments and players.”

Also read: Securitisation volume improves in Q3 on revival in economy: Crisil

Gold loans and home loans should stay resilient, with the least impact among segments, he however, said.

Rahul Malik, Associate Director, Crisil Ratings, said how NBFCs approach restructuring will differ by asset class and segment. “While the traditional ones such as home loans have seen sub-1 per cent restructuring, for unsecured loans it is substantially higher at 6 per cent to 8 per cent on average, and for vehicle loans 3 per cent to 5 per cent,” he said.

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How To Transfer National Savings Certificates From One Person To Another?

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Planning

oi-Vipul Das

|

The National Savings Certificate (NSC) is a tax-saving investment among the post office small savings schemes. As part of a tax-saving investment, investors park their capital towards NSCs. An individual contributed towards National Savings Certificates is allowed under Section 80C of the Income Tax Act to seek a tax deduction of up to Rs 1.5 lakh. When it comes to tax-saving instruments apart from NSC there are also some secure vehicles such as Voluntary Provident Fund (VPF), Public Provident Fund (PPF), Employees Provident Fund (EPF), and so on that not only provide secure returns but also provide tax deduction up to Rs 1.5 lakh under section 80C. At a present interest rate of 6.8% which is compounded annually and payable at the end of the maturity term one can invest in NSCs. A National Savings Certificate can be transferred only once during its entire period, as per the existing NSC transfer regulations. The NSC VIII Issue has a five-year period of maturity.

How To Transfer National Savings Certificates From One Person To Another?

NSC Transfer Rules

  • Only after completion of at least one year from the date of issuance NSC can be transferred from one person to another.
  • An individual who is looking to transfer NSC is required to fill Form NC 34 completely. Specifics such as the name of the transferee, the name of the transferor, the serial number of the certificate, the amount of the certificate, the date of issue and the holder’s signature are required to fill in Form NC 34.
  • The holder who is going to transfer is also required to have KYC documents such as a photograph, address, valid proof of identity and a certified declaration in the specified format in order to comply with the regulations relating to the authorization of the NSC.
  • In the post office, the old certificate is then validated by the designated individual with the postmaster’s stamp and the post office’s date seal. In addition, a fee for the transfer of a certificate will be charged by the post office.

Conditions to be met by the holder

Only after a year from the issuance of the certificate a certificate can be transferred. This clause is not applicable if the transfer is rendered on behalf of the court to the relative, legitimate successor of the deceased holder or to the existing holder after the death of the joint holder. A transferee must be eligible to purchase a certificate in order to transfer the certificate successfully. Specifics such as the name of the transferor, the name of the transferee, certificate specifics, serial numbers, amount and date of issue must be specified. In the case of a minor, the form has to be signed by the holder or guardian. For the transfer of savings certificates from one individual to another, the applicant must fill Form NC 34. A fee, if required, may be imposed by the post office for the transfer procedure.

KYC norms and transfer process

In order to conform with the laws relating to the issuance of the NSC, the transferee must have a signed declaration in the specified format. In addition, the transferee must have KYC records such as a photograph, address and proof of identification and file the KYC form. As the old certificate is not discharged the old holder’s name is rounded and the current holder’s name is recorded on the old certificate. The designated postmaster then approves it. The postmaster’s stamp and the post office’s date stamp are also placed to make the transfer process complete.

Points to note

  • For each set of a certificate, a specific application is needed.
  • Only for the total amount of the certificate, the transfer can be done.
  • The amount can’t be partially transferred in the NSC transfer process.
  • If the transfer has been rendered to a relative, legitimate successor of a deceased purchaser, existing holders on the death of joint holders and on-court directives NSC can be transferred several times during the maturity period.
  • Before proceeding with an NSC transfer, the transferee must be eligible to purchase the certificate.



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Unclaimed deposits: RBI may nudge banks to streamline information access for nominees/heirs

Banking & Finance

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The Reserve Bank of India (RBI) is likely to ask banks to follow a standardised approach to help nominees/heirs of depositors quickly get information on unclaimed deposits from their websites and activate inoperative accounts.

 

Simultaneously, the central bank is examining the possibility of having a common portal so that information regarding unclaimed deposits/inoperative accounts is available at one place as in some instances the nominees/heirs of depositors are unaware of the deposits.

The number of accounts under the unclaimed deposits category rose about 34 per cent year-on-year to 6.41 crore as of December-end 2019 (4.79 crore as of December-end 2018), with the outstanding amount increasing by about 28 per cent YoY to ₹18,379.52 crore ( ₹14,307.19 crore), per Reserve Bank of India (RBI) data.

The central bank has assessed that the information on some banks’ website on unclaimed deposits/inoperative accounts is not well structured.

The search functionality provided by banks on their websites also varies in terms of mandatory information to be keyed-in by the customer/nominee/ legal heir/authorised signatory to access details of such accounts.

Current regulation

Currently, banks having websites are required to display the list of unclaimed deposits / inoperative accounts, which are inactive/inoperative for ten years or more, on their respective websites.

Those Banks which do not have their websites have to make available the list in their respective branches.

So, if a nominee or legal heir of a deceased customer is not aware of such deposits, he/ she will not be able to find the same until banks upload the data on their website at the end of 10 years.

The central bank wants banks to have a customer-friendly approach concerning unclaimed deposits/inoperative accounts. At the same time, they need to take adequate safeguards.

 

DEA Fund

Banks are required to transfer to The Depositor Education and Awareness Fund (the Fund), which RBI established in 2014, the amounts becoming due in each calendar month (proceeds of the inoperative accounts and balances remaining unclaimed for ten years or more) and the interest accrued thereon on the last working day of the subsequent month.

In this regard, Bankers say RBI needs to speed up claims processing (return funds) when Banks activate inoperative accounts or settle the claims on unclaimed deposits with the nominees/ heirs of deceased depositors.

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