Month: May 2021

Bandhan Bank registers 80 per cent drop in Q4 net profit

Banking & Finance

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On the back of higher provisioning for non-performing assets, Bandhan Bank registered a nearly 80 per cent drop in net profit at ₹103 crore for the quarter ended March 31, 2021, compared with ₹517 crore in the same period last year.

Provisions increased by nearly 93 per cent at ₹1,594 crore during the quarter under review compared with ₹827 crore in the same period last year.

The bank’s gross non-performing asset (NPA) as a percentage of advances increased to 6.81 per cent against 1.48 per cent in the same period last year. Sequentially, gross NPAs increased from 1.11 per cent during the quarter ended December 30, 2020. Net NPA also increased to 3.51 per cent against 0.58 per cent in the same period last year. On a sequential basis, net NPA increased from 0.26 per cent registered in December 2020 quarter.

Accounts restructuring

According to Chandrashekhar Ghosh, MD & CEO, Bandhan Bank has restructured accounts under its housing loan portfolio amounting to ₹617 crore during the quarter under the Reserve Bank of India’s one-time restructuring scheme. “We have doubled our provisions during the quarter. We have restructured housing loan accounts to the tune of ₹617 crore but we have not restructured any loans from the microfinance portfolio,” Ghosh told newspersons at a virtual press meet announcing the bank’s results on Saturday.

The board of directors of the bank has proposed a dividend of ₹1 per share for the year ended March 31, 2021.

Home loan portfolio rejig

Sunil Samdani, CFO, Bandhan Bank, said most of its home loan borrowers were self-employed customers and they requested for restructuring of home loan so as to be able to meet their cash flow requirements.

“These are our long-standing and loyal customers and a majority of the accounts restructured are standard customers and we do not anticipate any accelerated level of stress from these accounts,” he said.

Net interest income grew by around five per cent at ₹1,766 crore (₹1,680 crore).

The bank’s net interest margin (annualised) for the quarter ended March 31, 2021 stood at 6.8 per cent against 8.1 per cent same period last year.

Collection efficiency

The NIM would have been at 8.8 per cent excluding one-time reversal on account of NPA recognition and interest on interest, he said.

The bank’s collection efficiency (including write-offs and NPAs) stood at 95 per cent as on March 2021, against 92 per cent in December 2020 and 89 per cent in September 2020.

According to Ghosh, the second wave of Covid-19 has impacted collection efficiency, which has dropped by around 3-5 percentage points depending on the region. However, it is confident that the situation will improve over the next one or two months.

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DCB Bank Q4 net profit rises 13%

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DCB Bank has reported a 13 per cent jump in its net profit for the quarter ended March 31, 2021 at ₹78 crore compared with ₹69 crore in the same period the previous fiscal.

For 2020-21, its net profit fell marginally to ₹336 crore compared with ₹338 crore in 2019-20.

The bank’s net interest income fell four per cent to ₹311 crore in the January to March 2021 quarter versus ₹324 crore a year ago.

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Are NPS equity funds finally bringing cheer to investors?

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The National Pension System (NPS) marks another anniversary since opening up for all citizens in May 2009. At this juncture, an assessment of the performance of different investment options under NPS shows that growth investing and high risk appetite seem to have paid off for investors over the long term. The market rally in the last year has played its part too, in pushing up returns in the equity (Scheme E) option under NPS in the short term. The performance of NPS funds over various time periods can be seen in the accompanying table.

Equity wins….

The average returns of Tier I Scheme E funds has outperformed government securities (Scheme G) and other fixed income instruments (Scheme C) over one-, five- and ten-year time frames. But Scheme E under-performed in the three-year period, where government securities (G-Secs) and other fixed income instruments still hold an edge. But NPS being a long-term investment with restricted withdrawal options, investors can depend on equity to deliver the goods, show the numbers.

Scheme E of NPS has also beaten the relevant mutual fund category (large-cap) funds by 90-430 basis points in 1-, 3- and 5-year periods. Even on a ten-year basis, they are almost at par with mutual funds, lagging the average large-cap MF returns by just 35 basis points. One basis point is one-hundredth of a percentage.

Under the ‘Active’ choice, investors can allocate up to 75 per cent in Scheme E up to the age of 50. Under the ‘Auto’ choice, Scheme E allocation ranges from 5 to 75 per cent based on your age and option chosen (conservative, moderate or aggressive).

….But not enough alpha

There are 7 pension funds (HDFC, ICICI, Kotak, LIC, SBI, UTI & Aditya Birla Sun Life) for the All Citizens Model.

After eating humble pie for some years, investors with a majority of their NPS exposure to equities now can smile. Scheme E invests predominantly in large-cap stocks and its average returns are now better than those of large-cap funds and the BSE 100 TRI. While the polarised market conditions until early 2020 and the sharp fall in February-March 2020 previously dented the performance of Scheme E funds, the rebound last year has taken everybody by surprise.

NPS equity funds may have done well in comparison to relevant mutual funds . But there is room for improvement in terms of alpha (i.e. excess return over benchmark BSE 100 TRI). Over the one-year period, only one among the seven Scheme E funds has beaten their equity benchmark. Over 3-, 5- and 10-year periods, alpha remains weak. One can, of course, argue that large-cap funds, even in MFs, have lagged benchmarks.

The poor alpha generation track-record of NPS equity funds is in contrast to Scheme G and Scheme C funds. Despite G-Secs and other fixed income instruments at this moment losing sheen to equity, they boast of better alpha. All the Scheme G funds have outshined their relevant benchmark across all periods. Scheme C funds have lagged their relevant benchmark in 1- and 3-year periods, but returns are at par in 5- and 10-year periods. Like NPS equity funds, Scheme G and Scheme C funds show comprehensive out-performance over average returns of equivalent mutual fund categories (gilt, medium to long and long duration mutual funds). Scheme G funds took advantage of the fall in long-term bond yields in 2014, 2016 and 2019 to clock good returns. Investing in G-Secs today may lead to lower returns in the short- to medium-term, but with NPS being a long-term investment, returns smoothen out. Also, Scheme G carries near zero default risk.

Scheme C carries slightly higher risk than Scheme G, though funds invest over 80 per cent in AAA-rated bonds. Scheme C funds have not been immune to the turmoil in the corporate bond market. However, over the long term, small losses from such events could be compensated to a good extent by capital appreciation.

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Four things you probably didn’t know about InvITs

Personal Finance

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With IndiGrid Investment Trust’s (InvIT) bond offer and PowerGrid InvIT’s IPO both hitting the markets last week, there was much curiosity about this relatively new asset class. But there was a lot of misinformation too. While some folks urged investors to look out for a grey market premium in the PowerGrid InvIT, others compared the high ‘yield’ on InvITs to bank deposit returns. Here are four features of InvITs that you probably weren’t told about.

No assured yield

The attractiveness of an InvIT is usually showcased in terms of its ‘high yield’ compared to bank FDs or bonds. An InvIT’s yield is calculated as its distribution per unit divided by its market price. But unlike a bond, an InvIT’s ‘yield’ is neither fixed nor guaranteed.

When you invest in a bond, the issuer company promises to pay you a fixed interest at regular intervals and repay your principal on maturity, irrespective of how its business fares. If its sales or profits take a hit, it will ordinarily not stop paying interest or the maturity amount, as it will then be branded a defaulter. In the case of an InvIT though, the issuer makes no promise to pay out a fixed distribution. The periodic distributions depend entirely on how the business performance.

An InvIT owns a portfolio of completed and cash-generating infrastructure assets, usually through special purpose vehicles (SPVs). It acquires these assets using own equity or debt. It passes on 90 per cent of cash flows from these assets to investors by way of distributions. Now, infrastructure projects are usually long-gestation and high-risk and therefore need to generate high returns to compensate. This is what makes for a high cash flow ‘yield’ from most InvITs. But the risk attached to infrastructure projects also affects the predictability of those cash flows. An InvIT’s distribution depends on many moving parts – returns from projects (tolls in road projects, fixed fee in power transmission etc), dividends or interest from SPVs and interest or debt repayments on the loans taken.

IndiGrid InvIT has distributed ₹12 per unit in the last couple of years on an original issue price of ₹100 per unit. This comes mainly from charges earned on the power transmission lines owned by it. Should the lines go down due to a technical glitch or tariffs get cut by regulators, revenues can fall and so will its distributions. IRB InvIT, which owns a portfolio of toll roads, has seen fairly big swings in its annual distributions owing to traffic fluctuations and events such as farmer protests and Covid. From ₹12.25 per unit in FY19, it fell to ₹10 in FY20 and further to ₹6 in the first nine months of FY21. Apart from their income, InvITs also sometimes distribute capital to investors which can be quite lumpy.

Risk of capital losses

In bonds or NCDs, if you pick high quality issuers, you’re usually sure that you’ll get back principal at maturity. With InvITs, your capital value depends on the traded price of units. When you need the money, you need to exit at traded prices that will decide your capital gains or losses. InvITs are required to get their portfolio of infrastructure assets valued periodically by independent valuers and publish this as their NAV or enterprise value. This is the ‘fair value’ of the InvIT. But the market price, just like for shares, can trade at a premium or discount both the fair value and the issue price.

The NAV of an InvIT should ideally move up over time as it expands its portfolio by adding high-return assets and shedding low-return ones. But regulatory and macro risks can affect the valuation of this portfolio. IRB InvIT, which owns toll roads, has seen its NAV dip from over ₹124 in September 2017 to ₹101 by September 2020. But the market price has consistently remained at a discount to NAV, with many risks cropping up around toll revenues. The InvIT’s price fell to ₹27 in April 2020 and is at Rs 54 now against an issue price of ₹102. IndiGrid InvIT is at ₹126 now but was at ₹80-90 levels for a long spell in 2019-20, below the issue price of ₹100.

Multiple layers of fees

Unlike MFs where all the costs charged to you are packaged into a single total expense ratio (which is capped by SEBI), InvITs charge multiple layers of fees on which there is no regulatory cap. InvITs usually pay a flat fee to their trustee for overseeing whether the investment manager and sponsor are performing their functions correctly.

Then, there’s the investment manager in-charge of managing the portfolio, ensuring that the assets generate adequate returns and managing the level of borrowings. The manager earns an annual fee as a percentage of the InvIT’s gross or net revenues. IndiGrid InvIT for e.g. pays 1.75 per cent of revenues from operations minus operating expenses, as the manager fee. InvITs also pay project managers a percentage of their operating expenses to ensure their assets are maintained in running condition. IndiGrid’s project manager earns a 10 per cent fee on gross expenses incurred on operating and maintenance costs.

Complex taxation

Finally, compared to NCDs, shares or MFs, the taxation of your returns from an InvIT is a complicated affair. While the InvIT itself is treated as a pass-through entity in some respects, the cash flows it passes on to you is taxed based on where it came from. Interest income distributed by an InvIT is taxable at your slab rate.

Dividend income it distributes from SPVs is taxable at your slab rate, if the SPV has opted for a concessional tax regime. Capital gains on listed InvIT are taxed at a short-term rate of 15 per cent plus surcharge if held for less than 36 months and long term gains at 10 per cent if held longer. Overall, InvIT can make your tax filings quite a chore.

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5 Banks That Give You Returns Up To 7.50% On 1-2 Year Fixed Deposits

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Investment

oi-Vipul Das

|

In comparison to a regular savings account, a fixed deposit (FD) is one of the best investment opportunities since it pays a higher rate of interest. For a set period of time, interest is paid against the deposited amount which is fixed across the chosen tenure and will not be affected by potential adjustments on rates by the bank or market fluctuations. The interest rate is determined by the type of lender, maturity period, and depositor, which can be either non-senior citizens or senior citizens. Interest rates are usually higher for senior citizens compared to the general public. While investing in fixed deposits the best benefits you bet beyond the interest rate is liquidity. You can quickly liquidate your FD to obtain funds in the event of an emergency. As a result, you can completely rely on returns in order to achieve your financial goals. Fixed deposit schemes have a variety of maturity options that investors can choose which is most convenient for them. In terms of duration, one can invest in an FD for a period ranging from seven days to ten years. So if you want to invest in fixed deposits for a period of 1 to 2 years to meet your short-term goals, check the top 5 banks mentioned below for the best interest rates.

1 Year FD

1 Year FD

The following is a chart of the top 5 banks with the highest 1-year FD rates after the most recent adjustment.

Sr No. Bank Regular FD Rates Senior Citizen FD Rates W.e.f.
1 Shriam City Union Finance 7.25% 7.65% April 1, 2021
2 Utkarsh Small Finance Bank 6.75% 7.25% October 19, 2020
3 ESAF Small Finance Bank 6.50% 7.00% May 2, 2021
4 Ujjivan Small Finance Bank 6.50% 6.50% March 5, 2021
5 IndusInd Bank 6.50% 7.00% April 26, 2021
Source: Bank Website

Why Should You Invest In Fixed Deposits?

2 Year FD

2 Year FD

The top 5 banks with the highest 2-year FD rates after the latest revision are listed below:

Sr No. Bank Regular FD Rates Senior Citizen FD Rates W.e.f.
1 Shriam City Union Finance 7.50% 7.90% April 1, 2021
2 Utkarsh Small Finance Bank 6.75% 7.25% October 19, 2020
3 Suryoday Small Finance Bank 6.75% 7.25% February 15, 2021
4 IndusInd Bank 6.50% 7.00% April 26, 2021
5 Ujjivan Small Finance Bank 6.50% 6.50% March 5, 2021
Source: Bank Website

Should you invest?

Should you invest?

Based on the time period of your financial goal, you can categorise investments as short-term or long-term. A short-term goal is usually one that requires an investment of less than three years. Paying for your child’s school fees, having a down payment for a home loan or getting married are all examples of short-term goals. In this situation, you need to determine clearly when and how much money you need to finance your personal finance goals. As a result, you must schedule your investments in a risk-free investment vehicle so that you can easily liquidate it even at the time of emergencies. In this case, a bank FD will provide you with a guaranteed rate of interest, meet your liquidity needs, assist you with emergency management, and help you achieve your short-term financial objectives. As a part of your asset allocation and diversification strategy an investment in fixed deposit for short-term needs can be a good bet here. It is important to note here especially for senior citizens that subject to certain terms and conditions, all bank deposits are insured by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC) insurance scheme. All deposits, including savings, fixed, recurring and others, are insured by the DICGC which is nothing but a subsidiary of RBI. Any depositor in a bank is guaranteed for both principal and interest up to a limit of Rs. 5 lakh. Keeping this in mind, investing in an FD scheme of any of the above-mentioned banks will help you secure your capital, which is an advantage that goes beyond interest rates.



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Jana Small Finance Bank Revises Interest Rates On FD, Check New Rates Here

Personal Finance

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Investment

oi-Vipul Das

|

Jana Small Finance Bank has one of the most attractive fixed deposit (FD) interest rates when it comes to interest rates of leading public or private sector banks on their FD. One can open a fixed deposit account at Jana Small Finance Bank for a flexible tenure which ranges from 7 days to 10 years. On FDs with periods ranging from seven days to ten years, Jana Small Finance Bank offers interest rates ranging from 2.5 percent to 6.75 percent. Senior citizens get an additional 50 basis points for these deposits. On these deposits, senior citizens will earn interest rates ranging from 3% to 7.25 percent. These rates are effective as of May 7, 2021, following the bank’s most recent adjustment.

Jana Small Finance Bank Revises Interest Rates On FD, Check New Rates Here

Jana Small Finance Bank FD Rates

Following the most recent revision FDs maturing in 7 to 14 days, 15 to 60 days, and 61 to 90 days, Jana Small Finance Bank offers interest rates of 2.5 percent, 3.00 percent, and 3.75 percent, respectively. For term deposits with a maturity period of 91 to 180 days, the bank pays 4.50 percent interest. The bank proposes a deposit rate of 5.50 percent on a maturity period of 181 to 364 days. On one-year FDs, the bank will pay 6.25 percent interest. For deposits maturing in one year or less than three years, the bank will now pay a 6.50% interest rate. For term deposits with a maturity period of three years or more but less than five years, the bank will now provide 6.75% interest. Jana Small Finance Bank provides a 6.5% interest rate on deposits for a five-year maturity term. On FDs maturing in 5 years or more, up to 10 years, the bank provides 6 per cent interest. Senior citizens will continue to get interest rates that are 50 basis points higher than the general public. The bank offers interest rates ranging from 3% to 7.25 percent on FDs maturing in 7 days to 10 years. These rates are applicable from May 7 2021.

Tenure Regular FD Rate Senior Citizen FD Rates
7-14 days 2.50% 3.00%
15-60 days 3.00% 3.50%
61-90 days 3.75% 4.25%
91-180 days 4.50% 5.00%
181-364 days 5.50% 6.00%
1 Year[365 Days] 6.25% 6.75%
> 1 Year – 2 Years 6.50% 7.00%
>2 Years-3 Years 6.50% 7.00%
> 3 Year- 6.75% 7.25%
5 Years[1825 Days] 6.50% 7.00%
> 5 Years – 10 Years 6.00% 6.50%
Source: Bank Website



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10 Top Best Blue Chip Company Stocks For Long Term Investment

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Why is Blue chip stocks a good investment?

Any investor will want to put their money into a company that has been profitable for many decades. Blue-chip stocks aim to make money for shareholders over the long term, even though they aren’t always among the most popular stocks. As a result, these are excellent investments for those who can stick with them through good times and bad. Their solid financial position, consistent growth rate, excellent management team, brand recognition, and reputation keep them afloat through difficult business cycles and industry trends.

Most bluechip companies in India have a market capitalization of more than Rs 20,000 crores, as a rule of thumb. Stocks that are debt-free are the bluest of the blue chips. Blue-chip firms, on the other hand, can be distinguished by their lower and stable debt-to-equity ratio. In addition to the above, bluechip businesses have a high return on equity (ROE), a high-interest coverage ratio, and a low price to revenue ratio.

Tata Consultancy Services

Tata Consultancy Services

  • Market Cap: Rs 1,158,875
  • P/B: 13.30

TCS is among the latest and emerging innovations that the company is exploring. BFSI is the company’s largest revenue division, accounting for roughly 31% of overall revenue, led by Retail and CPG, Communications, Media and Tech, Manufacturing, Life Sciences, and Healthcare, and Energy and Utilities under Public and Others. North America accounts for around 51% of TCS’ income, with the UK and Europe ex-UK accounting for about 15%, and India accounting for just 5.7 percent.

HDFC BANK

HDFC BANK

  • Market Cap: Rs 779,920
  • P/B: 3.75

HDFC Bank Limited, headquartered in Mumbai, Maharashtra, is an Indian banking and financial services firm. As of April 2021, HDFC Bank is India’s largest private sector bank in terms of assets and market capitalization. On the Indian stock exchanges, it is the third-largest firm by market capitalization. In the last three months, brokers have upgraded their recommendation or target price. Stock with average price momentum and valuation and medium financial results. These stocks may be inexpensive, and they have piqued the interest of some investors. HDFC Bank is a Zero Promoter Pledge Organization.

Infosys

Infosys

  • Market Cap: Rs 576,275
  • P/B: 6.78

Infosys Limited is a multinational company based in India that specializes in business consulting, information technology, and outsourcing. Bengaluru, Karnataka, India, is the company’s headquarters. By 2020 sales estimates, Infosys is the second-largest Indian IT company after Tata Consultancy Services, and the 602nd largest public company in the world, according to Forbes Global 2000. Stock with strong financial results and a fair to expensive valuation, but no market momentum, as technical indicators, imply. Strong cash-generating capacity from core sector – Improving Cash Flow over the past two years. ROA has been declining for the past two years due to inefficient asset usage to generate profits.

ITC

ITC

  • Market cap: Rs 252,762
  • P/B: 3.97

Cigarettes, FMCG, Hotels, Packaging, Paperboards & Specialty Papers, and Agribusiness are among ITC’s diverse industries. In 2010, the company celebrated its 100th anniversary, with annual revenue of US$10.74 billion and a market capitalization of US$35 billion in 2019-20. It is a Forbes 2000 company that employs over 36,500 employees in over 60 locations across India. ITC is a Company with low debt. Over the last five years, the company has paid out high dividends with increasing dividend yields. The company has been raising net cash flow for the past two years. In the last three months, brokers have also upgraded their recommendation or target price.

Coal India

Coal India

  • Market Cap: Rs 84,336
  • P/B: 2.59

Coal India Limited (CIL) is an Indian government undertaking and coal mining and refining company headquartered in Kolkata, West Bengal, India. It is owned by the Ministry of Coal, Government of India. It is the world’s largest coal producer and a Maharatna public sector undertaking. Per-share book value For the past two years has been improving. RSI indicating price strength. Poor cash flow from core company – Cash Flow from Operations has been declining for the past two years.

Reliance Industries

Reliance Industries

  • Market Cap: Rs 1,245,031
  • P/B: 2.20

The company’s main businesses are oil exploration, petroleum refining, and petroleum marketing and distribution, as well as petrochemical activities. The company wants to be carbon neutral by 2035, so it’s focused on diversifying through energy and other sectors while still investing in the oil industry. Increased shareholding by FIIs/FPIs or Institutions. Stock with good financial results and a fair to expensive valuation, but no market momentum as suggested by technical indicators. Price is below the Short, Medium, and Long Term Averages, indicating a lack of momentum. Ineffective use of shareholder capital – ROE has been decreasing for the past two years.

Larsen & Toubro Ltd

Larsen & Toubro Ltd

  • Market Cap: Rs188,589
  • P/B: 2.49

The firm is also listed among the top five construction firms in the world. Basic and heavy engineering, construction, real estate, capital goods manufacturing, information technology, and financial services are among the company’s business interests. L&T Group has 118 branches, 6 partners, 25 joint ventures, and 35 joint operations companies as of 2020. Price to Book Ratio is among the highest in the industry. Companies with a low Piotroski score have poor financials. A stock with a high analyst rating and at least a 20% upside potential.

Maruti Suzuki

Maruti Suzuki

  • Market Cap: Rs 202,485
  • P/B: 3.86

Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is a subsidiary of Suzuki, a Japanese automaker. Between 1981 and 2003, it was owned and operated by the Indian government. In 2003, the Government of India sold it to Suzuki Motor Corporation. It had a 53 percent market share in the Indian passenger car market as of July 2018. Price to Book Ratio is higher than the industry average. Stocks with a high price-to-earnings ratio (PE > 40). In the first quarter of 2021, the promoters’ holdings remained unchanged at 56.37 percent. In the first quarter of 2021, mutual funds reduced their assets from 7.83 percent to 7.49 percent.

Asian Paints

Asian Paints

  • Market cap: 244,753
  • P/B: 23.23

Asian Paints has a 50 percent market share in the organized domestic paints market. Asian Paints has a 60 percent market share in the decorative paints segment, which accounts for 70-75 percent of the Indian paint industry. The business has a decent operating margin of over 22.20 percent, which is higher than its rivals, thanks to its leadership role. For the last five years, the debt-to-equity ratio has remained constant at 0.1. Price to Book Ratio is among the highest in the industry. Companies with a high Piotroski score have sound financials. Strong cash-generating capacity from core sector.

Avenue Supermarts

Avenue Supermarts

  • Market Cap: Rs 187,563
  • P/B: 16.93

Avenue Supermarts Limited, d/b/a DMart, is an Indian retail company that owns and operates a hypermarket chain in India. Radhakishan Damani established it in 2002, with its first branch in Powai’s Hiranandani Gardens. Avenue Supermarts is a strong choice for a significant increase in geographic diversity and sales channel mix, which will result in a larger scope of operations and better operational performance over time Price to Book Ratio is among the highest in the industry. In the first quarter of 2021, FII/FPI holdings rose from 10.09 percent to 10.17 percent

List of Best Blue Chip Stocks to Consider

List of Best Blue Chip Stocks to Consider

Company Name Industry Share Price as of 7 May 2021 (NSE)
TCS Information Technology Rs 3,131
HDFC BANK Banking Rs 1,413
Infosys Information Technology Rs 1,352
ITC FMCG Rs 205
Coal India Mining/Minerals Rs 136.75
Reliance Industries Diversified Rs1,962.80
Larsen & Toubro Construction and Eng Rs 1,341
Asian Paints Paints Rs 2,554.85
Maruti Suzuki Automobile Rs 6,694
Avenue Supermarts Retail Business Rs 2,880

Should you consider investing in BlueChip Stocks?

Should you consider investing in BlueChip Stocks?

Since blue chips operate in the large-market cap arena, a single share will cost high. You won’t make a fortune in blue-chip stocks because you bought them decades ago. For the most part, these are mature businesses that have outgrown their big-growth days. Blue-chip stocks may not seem to be a successful short-term investment, but they generate high value in the long run due to their consistent growth and returns. Because of its solid financial foundation, it can easily rebound from adversity.

If you invest in blue-chip stocks, even a novice would have a healthy cash flow. They are a must-have in every portfolio, not only for new investors but also for seasoned market participants.

In the short term, blue-chip investments are low-risk, low-return investments. As a result, blue-chip stocks should be the foundation of your portfolio, but they should not be the only investment.



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Reserve Bank of India – Press Releases

Press Releases

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The Reserve Bank of India issued All Inclusive Directions to Millath Co-operative Bank Limited, Davangere, Karnataka under Section 35A read with Section 56 of the Banking Regulation Act, 1949 vide Directive DCBS.CO.BSD III.D-12 /12.23.096/2018-19 dated April 26, 2019, as modified from time to time, which were last extended up to May 7, 2021 vide Directive DOR.CO.RTG.MON.D-57/12.23.096/2020-21 dated February 05, 2021.

2. The Reserve Bank of India is satisfied that in the public interest, it is necessary to extend the period of operation of the Directive DCBS.CO.BSD III.D-12 /12.23.096/2018-19 dated April 26, 2019 issued to Millath Co-operative Bank Limited, Davangere, Karnataka, and as modified from time to time, last being vide Directive DOR.CO.RTG.MON.D57/12.23.096/2020-21 dated February 05, 2021. Accordingly, the Reserve Bank of India, in exercise of powers vested in it under sub-section (1) of Section 35A read with Section 56 of the Banking Regulation Act, 1949, hereby directs that the Directive DCBS.CO.BSD III.D-12 /12.23.096/2018-19 dated April 26, 2019, issued to Millath Co-operative Bank Limited, Davangere, Karnataka, as modified from time to time, the validity of which was last extended up to May 7, 2021 vide Directive DOR.CO.RTG.MON.D-57/12.23.096/2020- 21 dated February 05, 2021, shall continue to apply to the bank for a further period of three months from May 8, 2021 to August 7, 2021, subject to review.

3. Other terms and conditions of the Directives under reference shall remain unchanged.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/185

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What is the Difference Between Cess and Surcharge?

Personal Finance

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Taxes

oi-Sneha Kulkarni

|

The Union Government levy a variety of levies such as tax, fee, cess, and surcharge to collect revenue. When you make most of the payment you would have noticed. The cess tax is a powerful instrument in the hands of taxpayers to hold government officials accountable. Surcharges are something of a reserve taxing power in the hands of the government to raise funds for its own use only. It’s essential not to confuse between the two words. You must also calculate Cess and Surcharge when calculating income tax. The term Cess and Surcharge is a bit of a brainwave, particularly for those who are filing their first income tax return. Let us what is the main difference between Cess, Surcharge, and tax and when they are applicable.

What is the Difference Between Cess and Surcharge?

What is Cess?

Cess is a tax on tax that is imposed by the central government for a particular reason. It is imposed before the government receives sufficient funds for that reason.

A cess is distinct from other taxes such as excise duty and personal income tax in that it is levied in addition to the current tax (tax on tax). For example, a 3% education cess on a 30 percent personal income tax is levied as a tax on the existing 30 percent. As a result, the overall tax rate rises to 30.9 percent (30 percent basic rate + 3% (cess) of the 30 percent tax rate).

However, certain cesses, such as the Swachh Bharat Cess (SBC), are levied as a percentage of the total value. The SBC is 0.5 percent of the total value of the facilities in this case.

The cess is imposed on all taxpayers in India who pay taxes. If any tax is generated on income, regardless of the amount, he must pay a tax on that tax as well. Cess is paid to the Consolidated Fund of India, but it can only be used for particular purposes.

Name of some of the main cess used in India
Education Cess
Road cess or (fuel Cess)
Infrastructure Cess
Clean Energy Cess
Krishi Kalyan Cess
Swachh Bharat Cess

Another distinction between Cess and General Tax (in India) is that the Central Government is not required to share tax revenue with State Governments. The other big taxes, on the other hand, must be shared with states in a predetermined proportion.

What is Surcharge?

The surcharge is a fee added to any tax that has already been paid. The surcharge is a term that refers to an extra fee or levy. Personal income tax (on high-income slabs and the ultra-wealthy) and corporate income tax are the two largest surcharges.

Surcharge revenue also goes to the Consolidated Fund of India (CFI), where it can be used for any reason, just like regular tax revenue. A surcharge is a tax on tax that is not levied for any particular reason, and the proceeds of surcharges are used by the Union government for whatever purpose it sees fit.

The Union Government’s cess and surcharge tax are becoming an increasingly significant source of revenue. Surcharges are also deposited in India’s consolidated fund, which can be used for any reason.

Individual taxpayers with an annual income of more than Rs 1 crore are required to pay a surcharge of 15% of their tax liabilities separately.

Main Difference

The key difference between the surcharge and the cess is that, although each can be shared with state governments, the surcharge can be kept with the CFI and spent like every other levy, while the cess should be kept as a separate fund after being allocated to the CFI and can only be spent for a particular reason.

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PM Kisan Samman Nidhi: Govt is likely to credit 8th installment by May 10

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The Pradhan Mantri Kisan Samman Nidhi Yojana, or PM Kisan Samman, is a government initiative that provides enrolled beneficiary farmers with a 6,000 rupee annual subsidies in three instalments of 2,000 rupees each. Between April and July, the first instalment is credited, followed by the second instalment between August and November, and the third instalment between December and March. All small and marginal farmers will be eligible for a minimum income subsidy of Rs 6,000 per year under the scheme. Farmers with a total landholding/ownership of up to 2 hectares receive this annual subsidy benefit. The government has paid seven instalments to these farmers since the scheme initiated in December 2018. Meanwhile, according to media reports, the government is likely to credit the eighth instalment by May 10th, which is a huge benefit for farmers. According to a report by Live Hindustan, the Modi government has generated FTO after the state governments approved RFT, and this instalment is very likely to be credited in beneficiaries’ accounts by May 10. Even though many farmers follow the government’s guidelines, their names appear on the list of recipients. Farmers who do not get Rs 2000 every four months should call at PM Kisan Helpline Number 011-24300606 to lodge a claim. Here’s how you can check PM Kisan Installment and status online.

PM Kisan Samman Nidhi: Govt is likely to credit 8th installment by May 10

How to check your PM Kisan Installment?

  • Visit https://pmkisan.gov.in/ and head to the ‘Farmer’s Corner Section’
  • Now select the ‘Beneficiary Status’ option and The beneficiary can verify the status of his or her application here. The farmer’s name will be on the list, along with the amount that will be credited to his or her registered bank account.
  • Now click on ‘Get Data’ and go to Farmers’ Corner and press on the beneficiary list to see the ‘PM Kisan beneficiary list.’ Then fill in your state, district, sub-district, block, and village details. After that, choose Get report from the drop-down menu.

Steps to check status

  • Visit pmkisan.gov.in and click on the ‘Beneficiary Status Option’ under the ‘Farmers Section’
  • On the next page, enter your Aadhaar number, bank account number, or mobile number. You can also verify whether you have got the PK Kisan amount by using these three specifics.
  • Fill in the specifics for the option you choose from these three options.
  • When you click on this number, you’ll get a list of all transactions.



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