Month: August 2021

Bank Holidays in September 2021, List of Bank Holidays in India in September

Banking & Finance

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Banks in most states will observe a holiday on 10 September 2021, on account of Ganesh Chaturthi. Image: Reuters

Bank Holidays in September 2021 in India: Banks in India will remain closed for up to 12 days in September 2021, including second and fourth Saturdays, and Sundays. Apart from six weekly offs, banks will remain shut in different states on account of different holidays. Banks in most states will observe a holiday on 10 September 2021, on account of Ganesh Chaturthi/Samvatsari. Since there are state-specific holidays for different occasions, banks will not be shut for all six days for all states in September 2021. Also, 11 September’s leave overlaps with the second Saturday. The Reserve Bank of India has categorised holidays under three categories — Holiday under Negotiable Instruments Act; Holiday under Negotiable Instruments Act and Real-Time Gross Settlement Holiday; and Banks’ Closing of Accounts. The list of holidays given below has been notified by RBI.

Bank holidays in September 2021

08 September 2021: Tithi of Srimanta Sankardeva
09 September 2021: Teej (Haritalika)
10 September 2021: Ganesh Chaturthi/Samvatsari (Chaturthi Paksha)/Vinayakar Chathurthi/Varasiddhi Vinayaka Vrata
11 September 2021: Ganesh Chaturthi (2nd day)
17 September 2021: Karma Puja
20 September 2021: Indrajatra
21 September 2021: Sree Narayana Guru Samadhi Day

Only banks in Guwahati will observe a holiday on 8 September due to Tithi of Srimanta Sankardeva. Banks in Gangtok will remain closed on 9 September on account of Teej (Haritalika). Banks in most of the states will remain shut on 10 September 2021, except in Agartala, Aizawl, Bhopal, Chandigarh, Dehradun, Gangtok, Guwahati, Imphal, Jaipur, Jammu, Kanpur, Kochi, Kolkata, Lucknow, New Delhi, Patna, Raipur, Ranchi, Shillong, Shimla, Srinagar and Thiruvananthapuram. On 11 September, banks in Panaji will observe a holiday on account of Karma Puja. While only Ranchi will observe a bank holiday on 17 September. Only banks in Gangtok will remain shut on 20 September on account of Indrajatra. Only Kochi and Thiruvananthapuram will observe a bank holiday on 21 September 2021 due to Sree Narayana Guru Samadhi Day

Weekend holidays in September 2021

05 September 2021 – Weekly off (Sunday)
11 September 2021 – Second Saturday
12 September 2021 – Weekly off (Sunday)
19 September 2021 – Weekly off (Sunday)
25 September 2021 – Fourth Saturday
26 September 2021 – Weekly off (Sunday)

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Floater Funds Have Been Seeing High Inflow: Top Funds Based On 5-Yr Returns

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1. HDFC Floating Rate Fund-Direct Plan:

The fund invests primarily in bonds that keep seeing change in interest rate in line with prevailing interest rate in the economy. In existence since the year 2013, the fund has offered a return of 8.34% and its benchmark is CRISIL liquid fund index. Assets of the fund as on July 31 is Rs. 20,211 crore. Expense ratio is 0.23%.

SIP in the fund can be started for Rs. 500 and in a span of 5 years, Rs. 10000 monthly SIP has grown in value to Rs. 7.28 lakh.

Top investments of the fund include floating rate debt instruments, fixed rate instruments, swapped for floating rate returns and money market instruments.

2. ICICI Prudential Floating Interest Fund - Direct Plan – Growth:

2. ICICI Prudential Floating Interest Fund – Direct Plan – Growth:

These fund show less of volatility in response to changing interest rate dynamics. Since its existence the fund has yielded returns of over 8 percent. Benchmark of the fund is CRISIL Low Duration Debt fund. Assets under the fund are over Rs. 12000 crore and the fund as per the mutual fund risk-o-meter carries a moderate risk.

SIP in the fund can be initiated for Rs. 100 and in 5-years time monthly SIP of Rs. 10000 is now worth Rs. 7.39 lakh.

The fund’s investments are deployed into GoI bonds, floating rate bond,NCDs, state development loans, zero coupon bonds etc.

3. Nippon India Floating Rate fund -Direct Plan:

3. Nippon India Floating Rate fund -Direct Plan:

The fund since its existence 2013 has been providing 8.59% and is low to moderate on risk. The fund asset size is Rs. 17,587 crore. Benchmark of the fund is CRISIL Short term bond Index. Expense ratio of the fund is 0.24% as on July 31, 2021.

SIP in the fund can be initiated with Rs. 100 and the fund’s portfolio includes investments across GOI, CD, Treasury Bill, NCD and Bonds, and Commercial Papers.

Top 3 Floater Funds Based On 5-Year Returns

Top 3 Floater Funds Based On 5-Year Returns

Floater funds Rating 5-Year Annualised Return 5-Yr SIP Annualised return
HDFC Floating Rate Fund-Direct Plan CRISIL 3Star and Morning Star 5-Star 7.71% 7.71%
ICICI Prudential Floating Interest Fund – Direct Plan – Growth CRISIL 1 Star rated and 8.27% 8.3%
Nippon India Floating Rate fund -Direct Plan 3-Star CRISIL and 5-Star Morning Star 7.98% 8.31%

Disclaimer:

Disclaimer:

So, investors who want to tap on the prospects of rising interest rates in the economy can bet on these funds which as against other debt funds benefit from rising interest rates. Nonetheless, here the data is collated just for the purpose of information.

GoodReturns.in



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How to save on premium in life policies

Personal Finance

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The recent pandemic has shed light on the importance of life insurance. While the awareness for life insurance has increased, you may be able to save on it if you know about key factors that influence life insurance premiums.

Age

The age of the life assured plays a critical role in determining the premium. The mortality rate, i.e. probability of death, increases with age. Therefore, a person with a higher age shall be required to pay higher premium than a younger person. Based on the IALM (Indian Assured Lives Mortality) 2014-16 table, the mortality rate at age 50 is 380 per cent higher than the mortality rate at the age of 20. Additionally, as per the mortality tables worldwide and experience, women are likely to have 30-35 per cent lower mortality than a man of similar age. Therefore, women are likely to be charged lower premiums than men.

Lifestyle matters

Health parameters and lifestyle choices also play an essential role in determining life insurance premiums. Higher BMI (body mass index) indicates overweight or obesity leading to many medical complications including diabetes and cardiovascular problems. The mortality rate for an obese person is likely to be higher, and the company may charge an extra premium to cover the additional risk. Moreover, underwriters view excess weight or obesity as one of the major risks to life. One needs to make lifestyle changes to reduce the weight and thereby lower the BMI. Adopting a healthy lifestyle, controlling the intake of calories, and regular workouts will be beneficial. This will help reduce any extra premium loading, which may go up to 50-200 per cent over standard mortality on a case to case basis or may even be declined.

Similarly, smokers tend to have a higher mortality as compared to non-smokers. Therefore, smokers are required to pay higher premium than non-smokers of the same age. The premium for a smoker may be close to 50-60 per cent higher than the premium for a non-smoker.

The same is the case for the consumption of alcohol. Excessive drinking harms one’s health, and the underwriter may load an extra mortality premium of 50-200 per cent or even decline cover for an addicted heavy drinker.

Besides, a history of medical conditions, family history of illnesses (hereditary diseases) could factor into your life insurance premium and increase the cost of your coverage.

Work matters

Hobbies or jobs like skydiving, racing cars which are high risk in nature, could lead to higher premiums by the underwriting philosophy of the insurer. Certain hazardous occupations which expose a person to toxic chemicals or require one to perform dangerous duties may require a higher premium.

That said, for an individual, when it comes to life insurance, a term life cover should be of top priority. While the above are the critical reasons for premium variation, it is easier and cost-effective if a term cover is purchased early for lifelong coverage.

The writer is Chief Actuary and Chief Risk officer, Kotak Life Insurance

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Ezetap, BFSI News, ET BFSI

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Customers are increasingly preferring to pay through EMIs while buying high-value consumer items, as affordability has become a key factor in the post-pandemic scenario, payments solution provider Ezetap said on Thursday. Buying ability of consumers across the country has been significantly reduced due to the pandemic. They are either avoiding a single big payment or entirely skipping to buy any new item, Ezetap said.

This has impacted sales across brands and created a vast need for affordable solutions for customers across different sectors.

Ezetap has recorded a steep increase of 220 per cent in the transactional volume of equated monthly instalments (EMI) in July 2021, compared to February 2020. EMI volume as part of total transactions has increased to 18 per cent in the mobile and consumer durables segment, compared to 9 per cent in the pre-pandemic period of March 2020, it said.

“This indicates a growing inclination of consumers towards affordability solutions, which help increase their purchasing power. This also indicates that EMI or affordability presents a massive opportunity for brands to grow their sales across diverse product segments,” it added.

Delhi led metro cities with an increase of 258 per cent in total EMI volume followed by Bengaluru, clocking a growth of 206 per cent.

There has been a significant increase in the adoption of EMI transactions in non-metro cities with a combined contribution of 59 per cent in the total EMI volumes. Ahmedabad and Pune registered growth figures of 230 per cent and 210 per cent, respectively.

“This shows that affordability solutions play a positive role in impacting sales…This may be partially attributed to the fact that a large portion of the working population have moved back to their hometowns due to work from home models, and have contributed to EMI sales in their respective hometowns” it added.

According to Ezetap, a surge in debit card EMIs is one of the main reasons behind the steep increase in such transactions and it has increased significantly with nearly 25 per cent contribution in the total EMI volumes.

Through a tie-up with several banks, Ezetap offers instant EMIs via credit and debit card. The average ticket size of EMI transactions recorded by Ezetap has increased from Rs 18,000 in February 2020, to Rs 32,000 in July 2021.

In a move to expand the benefits of EMIs, Ezetap has also tied up with ZestMoney to provide NBFC EMIs.

Another factor for large-scale uptake of EMIs is no-cost EMIs and vouchers available to customers by various brands. Nearly 50 per cent of Ezetap EMI transaction volume can be attributed to no-cost brand EMIs, it said.

On the mobile and consumer durable space, there is at least one card offer being rolled out by various brands to drive more sales. Ezetap has also partnered with Xiaomi to provide EMIs to customers.

Customers are avoiding bulk payments and preferring affordable payment options to reduce the monetary burden, and some non-metro cities have growth of over 200 per cent in EMI transactions, Byas Nambisan, CEO, Ezetap, said.

“We have been able to reduce the transaction time by nearly 80 per cent and eliminate the manual errors with EMI integrated into the merchant’s billing POS. We will continue our efforts to provide the retail businesses with robust and integrated Buy Now Pay Later solutions, like EMIs, to improve the purchasing power of their end customers,” he said.

Ezetap has forged tie-ups with banks such as Axis Bank, HDFC Bank, Citibank, State Bank of India, American Express, Yes Bank and ICICI Bank. PTI KPM KPM BAL BAL



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What you need to know before investing in digital gold, BFSI News, ET BFSI

Personal Finance

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People have been investing in gold for ages, and the yellow metal is considered a safer investment option than, say, debt and equity. Now, unlike in the past, there are other options to invest in gold, and this article is about one that is fast becoming popular — digital gold. But before you proceed further a disclaimer: digital gold does not come under the purview of any financial sector regulator; it’s a regulatory grey zone.

What is digital gold
Like the term suggests, ‘digital gold’ is an online product which enables you to hold gold virtually without owning a safe or bank locker. The seller keeps an equivalent weight of physical gold in a secure vault for each online buy. There are no minimum purchase limits, so you can buy for as less as Rs 100.

Where you can buy
Digital gold service providers like Gpay, Phonepe and broking firms like Paytm Money, HDFC Securities, Motilal Oswal, etc allow investors to buy gold in small amounts to incrementally build gold holdings. Buyers can sell or convert it to physical gold – like coins and ingots – whenever they want.

Digital gold providers
In India, gold is offered and stored in vaults mainly by three companies
a) Augmont Goldtech
b) MMTC-PAMP India, which is a joint venture between the government-owned Metals and Minerals Trading Corporation of India (MMTC) and Swiss company MKS PAMP
c) Digital Gold India, with its SafeGold brand.

Regulation on digital gold
Digital gold falls in a regulatory grey zone as the sector presently does not come under the purview of any financial sector regulator and is said to have a self-regulatory audit and diligence mechanism. ET has reported that the National Stock Exchange (NSE) instructed its members, including stockbrokers and wealth managers, to wind down the sale of digital gold on their platforms by September 10. This came after markets regulator Sebi flagged such sales as a breach of the Securities Contracts (Regulation) Rules (SCRR), 1957.

How Sebi order impacts investors
New-age fintech brokers such as Upstox, Groww, Paytm Money as well as traditional brokers such as HDFC Securities and Motilal Oswal etc will be affected by the new ruling. Brokers cannot now offer such unregulated products through their Sebi-registered entity or platform. These companies have been given time till September 10 to discontinue the product and inform customers.

Non-broking platforms such as PhonePe and Google Pay, which also offer digital gold to customers, are not likely to be affected by the new ruling. Customers already holding digital gold would also not be impacted.

Advantages of digital gold
Storage: You don’t have to pay bank locker rent, insurance cover or additional investment of Fixed Deposit (FD). Sellers say the digital gold is stored in an insured, secured vault at no extra cost.

Investment convenience: You can start with even Rs 100, and build up your holding over time. Investment in physical gold requires a lot of money.

Uniform price: The price of physical gold varies from city to city and jeweller to jeweller while digital gold prices are the same across the country. Physical gold carries high making charges; digital gold has just the 3% GST.

Purity: Sellers point out that digital gold investment is made in certified 24 Karat, 999.9 pure gold. Ascertaining purity of physical gold attracts additional cost.

Sell or Redeem: Digital gold can be sold or redeemed at the click of a button. You can sell the digital gold instantly and the value of your gold is instantly transferred into the bank account through a 24×7 market-linked rate. If you want to redeem your holding, the physical gold will be delivered at your doorstep.

Instant liquidity: You can sell digital gold instantly, while physical gold can only be exchanged or sold through a jeweller, or sometimes several jewellers.

Collateral: Digital gold can also be used as collateral for taking loans.



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Enforcement Directorate seizes Rs 107 crore from Chinese loan app firm, BFSI News, ET BFSI

Personal Finance

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HYDERABAD: A Chinese-controlled instant loan app firm, PC Financial Services Private Limited (PCFS), was booked by the Enforcement Directorate (ED) for violating the Foreign Exchange Management Act (FEMA) and Rs 107 crore lying in its bank accounts seized on Thursday.

PCFS runs an instant mobile loan app ‘Cashbean’ and is accused of remitting money abroad for non-existent software and marketing services. ED is probing several NBFCs for money-laundering via instant micro loans on mobile apps. “PCFS is a wholly-owned subsidiary (WOS)of Oplay Digital Services, SA de CV, Mexico, which isa WOS of TenspotPesa Limited, Hong Kong, owned by Opera Limited (Cayman Islands) and Wisdom Connection | Holding Inc(Cayman Islands). The ultimate owner is Zhou Yahui, a Chinese. The original Indian company PCFS was incorporated in 1995, got NBFC licence in 2002 and after RBI nod in 2018 ownership moved to Chinese controlled firm,” the ED said.

While the foreign parent firms of PCFS brought in Rs 173 crore as FDI for lending business, within a short time the company made foreign remittances of Rs 429 crore for fake software services received from related foreign companies.

“PCFS also showed high domestic expenditure of Rs 941 crore. Most of its foreign payments were made to companies related/owned by Chinese who run the Opera group. The Chinese picked the foreign service providers and price,” the ED said.

According to ED officials, all PCFS payments were as ordered by country head Zhang Hong who directly reports to Zhou. PCFS sent Rs 429 crore to 13 foreign companies in Hong Kong, China, Taiwan, US and Singapore in the guise of payments for license fee for Cashbean mobile app (Rs 245 crore/ annum), software technical fee (about Rs 110 crore) and online marketing & advertisement fee (about Rs 66 Crore).

“All these services are available in India at a fraction of the cost incurred by PCFS. All its clientele are in India but huge payments were made abroad without proof of receipt. During the same period, PCFS also booked domestic expenditure of similar amount under the same heads. PCFS management failed to give any justification for these expenses and admitted all remittances were done to move money out of India to accounts of group companies controlled by the Chinese promoter,” the ED said.



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Start credit outreach scheme from Oct, BFSI News, ET BFSI

Personal Finance

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Start credit outreach scheme: FM to banks | page 1
FM Nirmala Sitharaman has asked bankers to begin a credit outreach programme from October, meet industry bodies, exporters and help to promote one product for export from each district.

FM to banks: Start credit outreach scheme from Oct | page 9
Mumbai: Finance minister Nirmala Sitharaman has asked bankers to begin a credit outreach programme from October. They have also been asked to meet industry associations and exporters, and help to promote one product for export from each district.

“To keep up the momentum of stimulus that we are periodically giving, we have also asked banks to go out and give credit,” she said, addressing a press conference after her review meetings with bank chiefs in Mumbai on Wednesday. The finance minister referred to the 2019 ‘loan melas’ undertaken by banks across 400 districts to promote credit in retail, agriculture & MSME (referred to as RAM).

“Approximately Rs 4.9 lakh crore was disbursed as part of this outreach between October and March 2019. This year, too, there will be a credit outreach in every district of the country,” said Sitharaman. She pointed out that it was too early to conclude that there is a lack of demand for credit and the festive season would see a natural pickup.

“In the context of fintechs, I have highlighted to banks two aspects — the advantages to banks of technology, and also meeting the needs of fintech as a sector,” she said. The public sector banks have also been asked to come up with a plan for credit flow to eastern states with high deposits and low credit offtake.

The finance minister was all praise for public sector banks, which she said have done well financially by recording profits and coming out of the Reserve Bank of India’s prompt corrective action framework. They have also managed to raise capital from the market even as they serviced government schemes during the pandemic without going off track in their amalgamation process. Before the pandemic, the government had announced the merger of 10 public sector banks into four, which has since been completed.

On the divestment of stake in public sector insurance companies, the finance minister said that the government has decided to have a minimal presence in the insurance sector.



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‘Govt has met 38% of FY22 exports target’, BFSI News, ET BFSI

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Hyderabad: The government has set an ambitious target of USD $400 billion exports for financial year 2021-22 and 38% of this target has already been achieved by August, said Srikar K Reddy, joint secretary, department of commerce, ministry of commerce and industry, while addressing participants at the CII MSME Summit virtually on Thursday.

Reddy pointed out that the government is keen to provide more market access to Indian companies, specially MSMEs, by inking free trade agreements (FTAs) with certain countries. The government is fast tracking FTAs with countries like UAE, Israel, European Union, UK, Australia and Canada.

On Covid-19’s impact on MSMEs, he said various studies have shown that MSMSE’s were severely impacted and over 90% of them faced challenges pertaining to liquidity, labour, raw materials and logistics.

Sameer Goel, chairman, CII Telangana, said MSMEs play an important role in the overall economic growth and therefore the development of this segment is extremely critical to boost employment.



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RBI imposes penalty on 2 co-op banks, 1 NBFC, BFSI News, ET BFSI

Banking & Finance

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Mumbai, Aug 26 (PTI) The Reserve Bank of India (RBI) on Thursday said it has imposed penalties on two co-operative banks and a non-banking financial company (NBFC), for deficiencies in certain regulatory compliance. A penalty of Rs 3 lakh has been imposed on Jijamata Mahila Sahakari Bank, Pune, Maharashtra for non-compliance with the directions on exposure norms and statutory/ other restrictions-urban co-operative banks (UCBs), the central bank said.

In another statement, it said a penalty of Rs 2 lakh has been imposed on The Muslim Co-operative Bank Limited, Pune, for contravention of/non-compliance with the directions issued by the RBI on Know Your Customer (KYC).

The RBI also said it has imposed a penalty of Rs 5 lakh on Seyad Shariat Finance Limited, Tirunelveli (Tamil Nadu), an NBFC, for non-compliance with certain provisions of the Know Your Customer Directions, 2016.

In all the three cases, the RBI said penalities are based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by them with their customers.



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Barclays pumps Rs 3,000cr in India to expand biz, BFSI News, ET BFSI

Banking & Finance

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Mumbai: Barclays Bank has infused Rs 3,000-crore capital to expand its India operations. This is the single largest infusion made since inception — the last large investment was Rs 540 crore in 2009-10.

With this investment, the bank’s total capital deployed in the country increases to Rs 8,300 crore. “We have ambitious growth aspirations, and the investment will help accelerate that as we look to leverage the attractive opportunities that the present situation offers,” said Jaideep Khanna, head of Barclays Asia-Pacific and country CEO. “As economic activity gathers momentum, there is increased demand for capital from clients. We are well placed to support their objectives and remain committed to working closely with them,” added Khanna.

According to a spokesperson, the money is for the growth of the corporate investment bank and wealth management business. The British bank has four branches and a presence across six cities. As part of its expansion plans in the country, Barclays Bank Plc also inaugurated its international banking unit (IBU) branch at GIFT City in Gujarat in February this year.

The spokesperson added that the 55% jump in capital base will enable the lender to significantly expand its exposure to Indian clients.

RBI rules cap a bank’s exposure to a single borrower, a business group and capital markets at 20%, 25% and 40% of their capital respectively. In 2019, the RBI came out with a large exposure framework, which made it difficult for foreign banks to have back-to-back arrangements with their head office for exposures in India as these too came under the ceiling.



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