Category: Personal Finance

Some cardholders might see standing instructions for payment on their credit card fail from next month. These could be for subscriptions with online content platforms, edtech companies or standing instructions for online advertisement payments. Some of these merchants are yet to comply with RBI’s new requirement of additional factor authentication (OTP) for recurring payments through cards though the deadline is less than a week away.

According to sources, around 75% of the banks have put in place the technology to meet RBI’s directive. However, there are some banks and merchants who are still in wait-and-watch mode. Banks are writing to customers, warning that some transactions may fail: “Effective October 1, 2021, the bank will not approve any standing instruction (e-mandate on cards for recurring transactions) given at merchant website/app on HDFC Bank credit/debit card, unless it is as per RBI-compliant process.” The bank has recommended that customers use its bill-pay option for utilities or pay on the biller’s website using OTP.

According to Razorpay, which processes close to a third of all recurring payment transactions, a dozen banks have already put in place the new setup where even for repeat payments the bank will alert the customer a day in advance and also provide them with a link to discontinue the mandate. “In the short term, there may be some disruption but, in the long term, this move by the RBI can take growth in recurring payment mandates off the charts,” said Razorpay chief technology officer and co-founder Shashank Kumar.

Kumar says the RBI directive addresses two key issues. Earlier, discontinuing a standing instruction to a merchant could be extremely cumbersome with some asking for a letter to be sent by post asking to discontinue the subscription. Second, debit cards were a grey area and recurring payments were done largely in credit cards. Incidentally, even after October 1, international mandates will continue as neither banks nor the RBI has jurisdiction over international billers.

“There are 900 million debit cards in India and their inclusion could increase the market multifold,” said Kumar. According to Kumar, by empowering customers to stop the payments at any time, the RBI has increased the confidence level. This could also make online education or entertainment more affordable as the availability of this facility will encourage providers to have a monthly debit model rather than recover annual fees.

Besides requiring banks to alert customers, the RBI has capped automatic debits at Rs 5,000 per month. This would mean that billers, like insurance companies, with large instalments, would need to increase the frequency to enable auto-debit. In the case of utilities, many online payers use their bank’s bill payment platform for standing instructions and will have no impact.

Canara Robeco Bluechip Equity Fund

Canara Robeco Bluechip Equity Fund Direct-Growth manages assets worth Rs 4,272 crores (AUM). The returns over the last year have been 64.72 percent.

It has had an average yearly return of 16.75 percent since its inception. The majority of the money in the fund is invested in the financial, technology, energy, construction, and healthcare industries.

The Canara Robeco Large cap+ fund is named after the investment strategy, which is primarily focused on building a portfolio that invests in any of the top 150 stocks ranked by market capitalization. Canara Robeco Bluechip Equity Fund’s NAV for September 24, 2021, is 46.83. The expense ratio is 0.34%. The fund has a 5-star rating from CRISIL and Value Research.

Over a three-year period, a lump sum investment of Rs. 1 lakh would have increased to Rs. 1.84 lakhs.

Axis Bluechip Fund

Axis Bluechip Fund Direct Plan-Growth manages a total of 32,213 crores in assets (AUM). The fund’s expense ratio is 0.46 percent, which is comparable to the expense ratios charged by most other Large Cap funds. The fund’s 1-year returns were 64.21 percent. It has returned an average of 18.25 percent every year since its inception.

The scheme intends to achieve long-term capital growth by investing in a diversified portfolio that consists primarily of large-cap stocks and equity-related products. Axis Bluechip Fund’s NAV on September 24, 2021, is 53.09. A lump sum investment of Rs. 1 lakh would have grown to Rs. 1.85 lakhs after three years, a profit of Rs 85,000.

IDBI India Top 100 Equity

The 1-year returns for the IDBI India Top 100 Equity Fund Direct-Growth are 71.31 percent. Since its inception, it has averaged 15.79 percent annual returns. The fund is invested in Indian stocks to the tune of 97.57 percent, with 71.06 percent in large-cap stocks, 8.98 percent in mid-cap stocks, and 3.8 percent in small-cap stocks.

The fund has a 0.02 percent debt investment, with 0.02 percent of it in funds that are invested in very low-risk securities.

For September 24, 2021, the NAV of IDBI India Top 100 Equity is 44.13. The direct plan of IDBI India Top 100 Equity has an expense ratio of 1.34 percent. The fund invests the majority of its money in the financial, technology, energy, construction, and services sectors.

A lump sum investment of Rs. 1 lakh would have grown to Rs. 1.85 lakhs after three years, a profit of Rs 84,567. The fund has 5star rating from CRISIL rating agency.

BNP Paribas Large Cap Fund

The BNP Paribas Large Cap Fund Direct-Growth manages assets of 1,212 crores (AUM). The fund’s expense ratio is 1%, which is greater than the expense ratios charged by most other Large Cap funds.

The 1-year returns on BNP Paribas Large Cap Fund Direct-Growth are 61.27 percent. It has had an average yearly return of 16.94% since its inception. The majority of the money in the fund is invested in the financial, technology, energy, services, and FMCG industries.

The NAV of BNP Paribas Large Cap Fund for Sep 24, 2021 is 156.77. After three years, a lump sum investment of Rs 1 lakh would have increased to Rs 1.78 lakhs, resulting in a profit of Rs 78,452. The fund has 5 star rating from Value Research.

Kotak Bluechip Fund Growth

The assets under management of Kotak Bluechip Fund Direct-Growth have valued 3,233 crores (AUM). The fund’s expense ratio is 0.87 percent, which is higher than the expense ratios charged by most other Large Cap funds.

The 1-year returns for Kotak Bluechip Fund Direct-Growth are 67.39 percent. It has had an average yearly return of 16.44 percent since its inception. The majority of the money in the fund is invested in the financial, technology, energy, fast-moving consumer goods, and construction industries. Kotak Bluechip Fund’s NAV for September 24, 2021, is 421.93.

A lump sum investment of Rs 1 lakh would have grown to Rs 1.77 lakhs after three years, yielding a profit of Rs 77,375. Value Research has given the fund a four-star rating.

Conclusion

When investing for a short period of time, you should use extreme caution especially when markets are at an all-time high. Investing in high-risk options is not a good idea because you will not have enough time to recover if you lose money. As previously said, when investing for a limited period of time, your primary goal should be to conserve your capital while also earning some returns.

Disclaimer

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