Personal Finance – Page 187

Stretch dates for better rates

July 31, 2021 root Personal Finance

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Just a day longer

A few other banks have higher rates for select range of tenures. In these cases, by expanding your investment tenure by just a day, you can avail higher interest rates on your bank FDs.

For instance, AU Small Finance Bank offers 6.1 per cent per annum on FDs with tenure ranging from 12 months and 1 day to 15 months. This is higher than the 5 per cent on deposits of up to 1 year and the 6 per cent offered on tenures beyond 15 months and up to 2 years.

If you have a slightly longer horizon, you can consider the bank’s FD for 2 years and 1 day which can fetch you 25 basis points higher interest rate per annum than a 2-year deposit.

Even with HDFC bank, by stretching the deposit tenure for a day beyond two years, you can earn 25 basis points higher rate, that is 5.15 per cent per annum.

ICICI Bank offers 4.9 per cent on deposits with a tenure of up to 1.5 years, beyond which the rates are 10 basis points higher i.e. 5 per cent per annum for tenures of up to 2 years. A deposit for even a day longer than 2 years can fetch you 5.15 per cent per annum.

Word of caution

However, do keep a check on the bank’s financials and do not base your investment decision solely on the rate of return offered. For instance, while DCB Bank offers higher rates, in the recent March quarter it reported a spike in its GNPA (gross non-performing assets) to 4.09 per cent from 2.46 per cent a year ago. This is expected to deteriorate further in the coming quarters with the second wave of the pandemic hampering collections. While the bank is adequately capitalised (CRAR of 19.67 per cent), its provisions cover just about 62 per cent of the bad loans as of March 2021.

Also, since the interest rates are bottoming out it would be wise to limit the tenure of your deposits to a maximum of two to three years today. Then, you will be well placed to benefit from higher returns on your FDs when rates go up. Also, be mindful of any restrictions on pre-mature withdrawals on such special FDs.

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Demystifying restore benefit in health insurance

July 31, 2021 root Personal Finance

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How does it work

Almost all health insurers offer to refill your original health cover amount post a claim but the process varies across insurers.

A restoration of SI in your health policy can happen in two ways. One, an insurer refills the used-up portion of SI only after complete exhaustion of the policy amount. Say suppose, your health cover is ₹10 lakh and during the policy period you utilise the entire amount. Then, the refill feature come into play and reinstates your cover up to ₹10 lakh, which was your original SI. But if you claim only ₹5 lakh in this scenario, your SI stands at ₹5 lakh only. For instance, policies including Manipal Cigna’s Pro Health Insurance plan, Activ Health from Aditya Birla Health insurance, ICICI Lombard’s Complete Health insurance and Star Health’s Star comprehensive plan offer this benefit.

Two, there are some policies in the market which offer to reinstate the cover even if there is partial utilisation only. That is, if you claim ₹5 lakh out of ₹10 lakh (SI), then the SI is reinstated up to ₹5 lakh and your total health cover is ₹10 lakh post the claim. Policies that offer this feature include Max Bupa’s Go Active, HDFC Ergo’s Optima Secure plan, Arogya Supreme plan from SBI General and Lifeline plan from Royal Sundaram General Insurance.

Take note

While with the restoration feature, you and your family will never run out of health coverage during any policy year, policyholders should be aware of three key points.

One, typically, the restore benefit is available only once during a policy year where 100 per cent up to base SI is reinstated after complete or partial exhaustion of base SI. If there are multiple claims during the policy year, then the restore benefit may not help. However, there are a few policies in the market that offer unlimited restoration benefit during the policy period if you exhaust your health cover completely or partially. Care Plus plan from Care Health Insurance, Max Bupa’s ReAssure plan and Manipal Cigna’s Pro Health Insurance plan are a few examples.

Second and one of the most important points to remember is that, an insurer reinstates the SI and the same will be available only for subsequent claims. That is, if you make a claim for ₹5 lakh for heart-related ailments (SI is ₹10 lakh), the insurer will restore ₹5 lakh that you have claimed but it can be utilised only on your next claim and not for your current claim. So, even if you exhaust ₹10 lakh and the total claim amount works to ₹12 lakh, the balance ₹2 lakh has to come from your pocket. This is because the ‘restored’ SI will be available from next claim onwards.

Also, most policies do not offer the ‘reinstated’ SI for the same illness for which you had made the claim in a policy year. Say, you have claimed for one specific heart-related illness, then the ‘restored’ or ‘reinstated’ SI may not be used for the same ailment by the policyholder. However, there are a few policies in the market such as ReAssure (Max Bupa) and Care Plus (Care Health Insurance) that do cover for the same illness subsequently.

And lastly, the restored or reinstated SI if unutilised during the policy year, expires. That is, it cannot be carried forward for next year. It will also not be considered for no claim bonus (a reward that policyholders receive from the insurer for staying healthy and not making any claim on the policy in a year) calculation.

In case you have an older health policy which doesn’t have a restore or refill feature, then you can consider migrating, though ‘restore’ benefit shouldn’t be your only criteria for policy selection. If the policyholder feels he/she is missing out on the new features such as restoration, then one can consider migrating or porting to a new policy. Indraneel Chatterjee, Co-Founder, RenewBuy says “The decision for migrating or porting should be based on three key factor – premium comparison, room-rent capping and co-payment clause. Only if these factors are favourable, one can check other features such as restore or refill”.

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Top 10 Banks Offering Returns Up To 8% On Recurring Deposits For Senior Citizens In 2021

July 31, 2021 root Personal Finance

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Top 10 Small Finance Banks Offering Higher Returns On Recurring Deposits For Senior Citizens

For a deposit amount of less than Rs 2 Cr, below framed are the top 10 small finance banks that are not only offering higher returns than leading private and public sector banks but also allow depositors to avail the benefit of deposit insurance cover provided by DICGC.

Sr No.	Banks	Interest Rates	Tenure	W.e.f.
1	North East Small Finance Bank	8.00%	2 Year	April 19, 2021
2	Utkarsh Small Finance Bank	7.50%	24 months to 36 months	July 1, 2021
3	Ujjivan Small Finance Bank	7.25%	27 months to 60 months	March 5, 2021
4	Jana Small Finance Bank	7.25%	36 Months – 60 Months	June 10, 2021
5	Fincare Small Finance Bank	7.25%	59 months 1 day to 66 months	July 29, 2021
6	Equitas Small Finance Bank	7.00%	90 months to 120 months	June 1, 2021
7	ESAF Small Finance Bank	7.00%	365 days & 366 days	02.05.2021
8	Suryoday Small Finance Bank	6.75%	12 months to 18 months	June 21, 2021
9	Capital Small Finance Bank	6.75%	900 days	June 3, 2021
10	AU Small Finance Bank	6.75%	25 Months to 36 Months and 61 Months to 120 Months	June 23, 2021
Source: Bank Websites

Top 10 Private Sector Banks Providing Good Returns On Recurring Deposits For Senior Citizens

Here are the top 10 private lenders that are now offering the best returns on recurring deposits of less than Rs 2 Cr for senior citizens.

Sr No.	Banks	Interest Rates	Tenure	W.e.f.
1	Yes Bank	7.25%	5 years upto 10 Years	June 3, 2021
2	RBL Bank	7.00%	60 months to 60 months 1 day	July 2, 2021
3	DCB Bank	7.00%	36 months to 120 months	May 15, 2021
4	Bandhan Bank	6.75%	1 year to 3 years	June 7, 2021
5	IndusInd Bank	6.50%	12 months to 61 month	July 23, 2021
6	IDFC First Bank	6.50%	36 months to 60 months	May 1, 2021
7	Axis Bank	6.50%	5 years to 10 years	22.06.2021
8	ICICI Bank	6.30%	Above 5 years and up to 10 years	21.10.2020
9	HDFC Bank	6.00%	90 months to 120 months	August 25, 2020
10	Kotak Mahindra Bank	5.75%	5 years upto 10 Years	July 23, 2021
Source: Bank Websites

Top 10 Public Sector Bank Promising Best Interest Rates On Recurring Deposits For Senior Citizens

Below are the top 10 government banks that are now offering higher returns on recurring deposits for senior citizens.

Sr No.	Banks	Interest Rates	Tenure	W.e.f.
1	Bank of Baroda	6.25%	3 years to 10 years	16.11.2020
2	State Bank of India	6.20%	5 years and up to 10 years	09.07.2021
3	Union Bank of India	6.10%	5 years to 10 years	08.02.2021
4	Canara Bank	6.00%	3 years to 10 years	16.05.2021
5	Punjab & Sind Bank	5.80%	3 years to 10 years	July 14, 2021
6	IDBI Bank	5.80%	3 years to 5 years	01.05.2021
7	Punjab National Bank	5.75%	3 years to 10 years	05.02.2021
8	Indian Bank	5.75%	3 years to 5 years	09.11.2020
9	Indian Overseas Bank	5.70%	444 days to 3 years and above	01.07.2021
10	Bank of India	5.65%	2 years to 10 years	08.01.2021
Source: Bank Websites

Story first published: Saturday, July 31, 2021, 17:19 [IST]

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3 SIP Mutual Funds To Consider Based On 5-Star Rating From Morningstar

July 31, 2021 root Personal Finance

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Axis Flexi Cap Fund

This fund has been accorded a 5-star rating from Morningstar. Let’s take a look at how the fund has performed over the last few years. This is a Flexi Cap fund, which means the fund manager has the choice to move money from largecap funds to mid and small cap funds and the other way round as well.

Returns from Axis Flexi Cap Fund

1- year 3-year, annualized 5-year, annualized

49.48% 17.22% NA

Other details of Axis Flexi Cap Fund

NAV Rs 18.61, growth

Assets under management Rs 8,566 crores

Investment strategy Equity

Risk Very high

Axis Flexi Cap Fund SIPs: For those willing to take risk

Investors who are long-term investors and are willing to take a risk can go for these SIPs. An SIP started 3-years ago in Axis Flexi Cap Fund for Rs 10,000 every month is worth Rs 5.25 lakhs today. That is a remarkable set of returns from the fund. In fact, most of the equity funds from the Axis Mutual Fund stable have done well over the years.

It’s important to note that markets have gone from 33,000 points on the Sensex a year ago to 53,000 points. It is therefore not worth considering lumpsum at this stage and investors should stick to Systematic Investment Plans. Apart from Axis Flexi Cap Fund we are also recommending two other funds below for long term investors.

Quant Midcap Fund

Quant Midcap Fund is a high risk investment, given that the fund invests invests in midcaps, which are volatile. However, if you go through the SIP route this is taken care off, as the law of averages applies.

Returns from Quant Midcap Fund

1- year 3-year, annualized 5-year, annualized

88.17% 23.52% 19.03%

Other details of Quant Midcap Fund

NAV Rs 109.56, growth

Assets under management Rs 110 crores

Investment strategy Equity

Risk Very very high

Quant Midcap Fund: A decent performer

Quant Midcap Fund has been rated as 5-star by Morningstar. Investors can start a SIP in the fund with a sum of Rs 1,000 every month. The fund size is not too large and this gives the fund manager some flexibility when investing.

It’s advisable to start an SIP with a small sum at the moment, given that the markets are high and when the markets fall, you can increase the size of the SIP. This would be a good strategy for investors to adopt for Systematic Investment Plans, given that the Sensex is at 53,000 points. Quant Midcap Fund is an investment for those willing to take serious risk. If you do not have an appetite for the same, avoid this mutual fund scheme. We at goodreturns are not recommending any lumpsum investment at the moment, as the markets are overpriced.

SBI Small Cap Fund

This is another fund that is high risk, but, is rated 5-star by Morningstar. This fund has been a consistent performer and has given good returns over the last 1-year. Here are

Returns from SBI Small Cap Fund

1- year 3-year, annualized 5-year, annualized

88.28% 21.86% 21.03%

Other details of SBI Small Cap

NAV Rs 95.30, growth

Assets under management Rs 9,010 crores

Investment strategy Equity

Risk Very very high

SBI small cap fund: Invest small amounts

The portfolio of SBI Small Cap Fund includes names like Elgi Equipments, V-Guard Industries, Carborundum Universal and Sheela Foam. The fund has given superb returns in the last 1-year. We suggest to invest small amounts at the current juncture and gradually increase the same, should the markets fall. If you redeem your units before a period of 1-year there is a charge of 1% that would be levied as load fees.

An SIP can begin with a sum of Rs 500 and investors need to hand-over 12 cheques for the purpose of investments.

Disclaimer

Please note, investing in mutual funds is risky and investors should exercise caution. Please do adequate research. Neither Greynium Information Technologies, nor the author would be responsible for losses incurred based on the above article.

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Can’t wrap head around not having U.S. central bank digital currency, BFSI News, ET BFSI

July 31, 2021 root Personal Finance

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Federal Reserve Governor Lael Brainard laid out a range of reasons for “urgency” around the issue of developing a U.S. central bank digital currency, including the fact that other countries such as China are moving ahead with their own.

“The dollar is very dominant in international payments, and if you have the other major jurisdictions in the world with a digital currency, a CBDC (central bank digital currency)offering, and the U.S. doesn’t have one, I just, I can’t wrap my head around that,” Brainard told the Aspen Institute Economic Strategy Group. “That just doesn’t sound like a sustainable future to me.”

Fed officials are taking a deep dive into the digital payments universe, collecting public feedback on the potential costs and benefits as well as design considerations with a view to publishing a discussion paper in early September.

Fed Chair Jerome Powell in comments earlier this month described the analysis as a key step in accelerating the Fed’s efforts to determine if it should issue its own CDBC.

“One of the most compelling use cases is in the international realm, where intermediation chains are opaque and long and costly,” Brainard said on Friday.

But there are domestic reasons too for a U.S.-backed digital currency, she said: the dramatic rise in stable coins, a form of cryptocurrency pegged to a conventional currency such as the U.S. dollar but not backed by any government.

Stable coins could proliferate and fragment the payment system, or one or two could emerge as dominant, she said. Either way, “in a world of stable coins you could imagine that households and businesses, if the migration away from the currency is really very intense, they would simply lose access to a safe government-backed settlement asset, which is of course what currency has always provided.”

A CBDC could also help solve other problems, she suggested, including the difficulty during the pandemic of getting government payments to people without bank accounts, who also tend to be the very people who need the payments the most.

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Buy These 2 Banking Stocks For A 46% Upside, Says Motilal Oswal

July 31, 2021 root Personal Finance

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Rationale to buy the stock of Union Bank

The Brokerage has a “buy” on the stock of Union Bankwith a price target of Rs 55, which is higher by almost 46% from the current levels of Rs 37. According to the brokerage firm Union Bank reported healthy operating performance, supported by higher other income and improving margin trajectory, despite sluggish business growth. Domestic net interest margins expanded by 71 basis points QoQ to 3.11%.

Select valuation parameters for Union Bank from Motilal Oswal (estimates)

FY 2021-22 FY 2022-23

EPS Rs 7.9 Rs 11.8

Price to earnings 4.81 3.2

Price to book value 0.4 0.3

Price to a/bv 0.5 0.5

Union Bank: Operating performance showing signs of recovery

Union Bank reported a net profit of Rs 11.8 billion (+255% YoY), supported by higher treasury gains of Rs 11.1 billion and recovery from written of account of Rs 3.3 billion, even as total provisions stood elevated Rs 35 billion.

According to broking firm, Motilal Oswal slippages stood elevated (4.8% annualized), led by higher slippages in the MSME and two large corporate accounts slipping in 1QFY22.

“However, higher write-offs and up gradations aided stable asset quality on a sequential basis. SMA-2 overdue stood at 3.7% of loans, and restructured book stood at 2.7% of net loans. We conservatively estimate RoA/RoE of 0.6%/11.4% by FY23E. We resume coverage with a Buy rating,” the brokerage has said.

Buy the stock of Shriram City Union Finance

The brokerage also has a buy on the stock of Shriram City Union Finance, post the company’s quarterly numbers. According to the brokerage there has been no major deterioration in asset quality and the restructuring too has been minimal. The firm has noted that the Capital adequacy remained strong with Tier I at 30% (up 90bp QoQ).

Valuations matrix from Motilal Oswal for Shriram City Union, estimates

FY 21-22 FY 22-23

P/E 9.7 8.00

Price to book value 1.3 1.1

Dividend yield 1.4% 1.4%

Shriram City Union: Loan book muted

“Loan book growth has remained muted, given the impact on disbursements (from lockdowns). However, liability-side and liquidity issues faced by the company immediately after the outbreak of the pandemic have now receded into the sidelines,” Motilal Oswal has said.

While cost of funds (calculated) declined 21 basis points sequentially to 8.9%, calculated yields (on AUM) stood at 19.7% (up 20 basis points QoQ). Spreads improved by 40 basis points QoQ to 10.8%.

“Despite a presence in vulnerable product segments like MSME, 2W, and Personal loans, asset quality performance has been encouraging, with minimal restructuring. With an equity infusion of Rs 2 billion from the parent, Shriram Housing will be looking forward to strong growth and carving out its niche in the Affordable Housing Finance segment,” the brokerage has said.

Disclaimer

Investing in stocks poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. Investors should take care because the markets are near record highs.

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Insolvency and bankruptcy code: The new route to M&A

July 31, 2021 root Personal Finance

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For instance, Essar Steel India Limited was acquired by Arcelor Mittal India Pvt. Ltd. for Rs. 41,018 crores as against the outstanding dues of Rs. 49,473 crores.

By Hemant Batra

What was positioned by Indian law makers and policy wonks as the best antidote for rising non-performing assets (NPAs) of banks and financial institutions, resulting in a larger number of companies going into the liquidation process, has ended up being a successful rehabilitating and restructuring formula for these bankrupt companies. These distressed assets have become the new targets for bigger companies planning to grow through the organic route.

The rules and regulations framed under the Insolvency and Bankruptcy Code (IBC) have opened-up countless opportunities and prospects for merger and acquisition (M&A) deals in India. These opportunities have been used productively by companies and investors wanting to diversify into new businesses or expanding and consolidating their existing businesses.

After all, the statutory mandate or pre-requisite of the IBC is to provide a resolution or long-term sustainability of distressed assets of corporate debtors rather than take the liquidation route, which was kept as a solution of last resort. Then there are elements of concessions, adjustments and alterations under the Code, which can be exercised by owners, stakeholders, and creditors in specific cases to ensure that corporate restructuring is approved under the IBC, and results in the revival of the bankrupt entity.

Under the IBC, there are two principal avenues for mergers and acquisition (M&A) of assets. The first is the fast-track process, where the corporate debtor’s assets are unencumbered, meaning outside the ordinary course of business, like personal things such as books, vehicles etc. So, the new promoter takes over only the existing business with all its assets. Secondly, where the assets are encumbered or a part of the business, and the creditors have already initiated a corporate insolvency resolution process (CIRP) against the corporate debtor.

In the case of the former too the approval of a committee of creditors (CoC) becomes a precondition before any takeover, though it is a much faster process. In the case of the latter, the resolution plan crafted by the CIRP, may provide for transfer or sale of all or part of the assets of the corporate debtor to one or more persons, and substantial acquisition of shares, or the merger or consolidation of the corporate debtor with one or more persons. The resolution plan may also allow for divesting all or some parts of the corporate debtor’s assets through M&A action over a predetermined period following the successful conclusion of the CIRP.

As the saying goes, the devil is in the details. Thus, it is imperative to comprehend the specifics of the insolvency resolutions, and study the successful M&A, which have been concluded since December 2016, when the IBC came into existence, before taking any decision. According to official figures, the IBC has effectively rescued 308 corporate debtors as of December 2020 through resolution plans including M&A. These corporate debtors owed Rs. 4.99 lakh crore to the creditors. Under IBC, the creditors recovered Rs. 1.99 lakh crore, which was 193 per cent more than the realisable value of the assets.

The IBC has facilitated the recovery of NPAs by banks through the M&A route and corporate restructuring. Only a handful of cases accounted for a large proportion of public debts. The creditor banks commenced the resolution process of 12 large accounts in mid-2017. Their total recoverable dues stood at Rs. 3.45 lakh crore as against the low liquidation value of about one-fifth of the recoverable dues. Out of these 12 big corporations, nine qualified for lucrative M&A and fetched worthwhile recoveries from the banks’ perspective. For instance, Essar Steel India Limited was acquired by Arcelor Mittal India Pvt. Ltd. for Rs. 41,018 crores as against the outstanding dues of Rs. 49,473 crores.

Other big defaulting accounts like those of Bhushan Steel Limited, Bhushan Power & Steel Limited, Jaypee Infratech Limited, Alok Industries Limited etc. were also acquired by bigwigs like Vedanta Ltd. Monnet Ispat & Energy Limited, Reliance Industries Limited, NBCC (India) Limited etc. at very high value. These successful instances of M&A speak a lot about the efficiency and usefulness of the IBC.

The new route of M&A through distressed assets, however, is facing a few challenges. There are always challenges associated with bidding and acquisition of distressed assets. Valuations of such assets need to be adequately insulated from its erstwhile promoters and owners, who use proxies to either derail the bidding process, or jack up the valuations.

Further, despite the protection provided by the law regarding the marketability of assets, the Supreme Court judgement in the Ghanshyam Vs Edelweiss of April 2011, and the rule of no interference from any other civil court in respect of any action taken or to be taken with regard to any order passed by the Adjudicating Authority i.e. the National Company Law Tribunal, some acquirers and investors had to face some legal complications in their M&A objective.

For instance, the question of how the penalty for regularising any non-compliance of the previous management is being imposed on the new management still remains unanswered? Similarly, how the previous clearances/regularisation are supposed to be treated, still remain unclear.

Hence, in spite of all statutory assurances for smooth acquisition and corporate restructuring, the new entrants may have to keep in mind the significance of due diligence of the nature and status of assets, and also ensure that there is no overlap of any legal proceedings involving the assets of the promoters, especially quasi-criminal proceedings.

(The author is a Delhi-based corporate and public policy lawyer and counsel. Views expressed are personal and not necessarily that of Financial Express Online.)

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Varun Chopra, Eduvanz, BFSI News, ET BFSI

July 31, 2021 root Personal Finance

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-By Tarika Sethia & Ishan Shah

The ed-tech boom in India has grown multi-fold in the last two years and Varun Chopra of Eduvanz, funding education and skill seekers believes the time is good and the focus will be on tier-2, 3 & 4 cities.

Varun Chopra, Co-founder & CEO at Eduvanz believes that banks have slightly burnt their fingers in financing higher education loans and Eduvanz found a space to fund students who are looking to do courses in domestic universities in India.

Varun said, “The idea was that how everybody is creating financial entities around a certain specific sector or product like an auto loan, property loan, microfinance, etc. We wanted to be the lender for learners.”

Pandemic Impact

The pandemic has accelerated Eduvanz’s growth journey. Some of the key drivers Varun sees is the New Education Policy 2020 and UGC Policy where degrees can be given online which has never happened before in India. So students who are sitting out of tier 2,3,4 cities, now don’t have to come to Bombay and Delhi to get educated, backed by the high penetration of the internet across India.

Eduvanz sanctions loans to these students and becomes one point of contact. It also launched no-cost loans where students can buy laptops, mobile phones at 0% interest.

Varun said, “0% is just a small behaviour change of another way of buying products and paying later. So just like BNPL is picking up in the consumer sector. We’ve created products like study-now-pay-later. So this SNPL product is really making a difference for both the consumer and the education institutes because for educational institutes it is helping them meet the demand of the students and increasing their enrollment and for students, it is at zero cost, it’s very beneficial.”

The average ticket size is around Rs 1.8 lakh and the average tenure of 18 months, but it starts lending at as low as Rs 20,000 to Rs 25,00,000. It has tied up with over 200 universities across countries.

Courses in demand & Risks

Varun highlights that courses and skill sets related to the BFSI, Analytics, Digital Marketing, Blockchain are in demand and students are trying to build their careers in these sectors. A big shift is also being seen in how work from home has benefited these students to pursue courses beyond working hours.

Varun adds, “Employment is backed by quality education and skillsets. Most of these educational courses are also becoming hybrid today. Some of these models are becoming very effective and that is where the boom in education learning is happening in India.

25% of the borrowers are introduced to educational institutes where they don’t have any tie-ups. While they may not get a 0% loan but are able to get their education financed at a cheaper cost, explains Varun.

It has brought down its exposures which are impacted by the pandemic also with institutes where placements have gone down and there’s an employability risk which is determined by its internally created score called ’employability score’.

BFSI, IT & Technology are the key drivers for now.

Impact on Existing book

Varun said, there has been an impact but luckily we were part of the impact-based lending. So we have partnered with Michael Susan Dell foundations, where we get the coverage if the borrower is not able to pay back. However, our portfolio is extremely solid.

It claims that they are one of the best performing fintech with NBFC license with NPAs less than 0.7% in spite of two phases of severed Covid-19 waves. He added, “We have reduced a little bit of exposure on each impacted sector. We have tweaked how much exposure some of the institutes we can take. To be honest, I think we have been fortunate enough because most of the borrowers get employed. Even if there is a delay in getting employed, these guys have been able to kind of repay back over a period of time.”

New Avenues

Eduvanz has also started financing school fees for which it acquired a company called ‘clarity’ last year. It provides students mentorship and industry guidance. Varun said, “We are creating an entirely digital platform around it, where we have partnerships at schools and colleges. Students can talk to these industry veterans and understand good career opportunities and options.”

It has also partnered with companies like Apple to finance study-related equipment where borrowers may want a laptop to do their education. Varun adds, “So there’s a lot of focus on creating a whole lender for learners, not just finance a part of their education, but anything related to their learning, whether it is in mobile devices, insurance, laptops.”

In the last four years, it has collected huge amounts of data on institutes, sectors, consumers, employment trends which has enabled them to create innovative products.

In terms of credit demand, Varun said, “ In the last four months we have constantly hit the highest. There is an extreme amount of demand and we are disbursing close to Rs 40-45 crore per month, and we are planning to reach Rs 75 crore in two to three months. So that’s the immediate target.”

Fundraise & Growth

Eduvanz is looking for a series-B round closely and will be more like a growth capital to build strong technology infrastructure and products and create a strong distribution model for learners.

Varun adds, “The ed-tech boom has led to a new kind of quality education turning up and no sector has grown without the availability of finance, every sector is to be pushed by the financial sector. Being somewhere where we were one of the first ones, we hope to carry this torch of growth in upcoming times.”

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Top 10 Banks Offering Best Returns On 5-Year Tax Saving Fixed Deposits In 2021

July 31, 2021 root Personal Finance

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Investment

oi-Vipul Das

|

Published: Saturday, July 31, 2021, 13:35 [IST]

For investors with a low-risk profile, new investors, or senior citizens, fixed deposits (FD) are always the best to bet. It is an investment vehicle under the debt category that not only generates guaranteed returns but also allows tax benefits under section 80C, flexible tenure, and deposit insurance cover up to Rs 5 lakh by DICGC where depositors can claim their money within 90 days if their banks go under a moratorium.

Here we are talking about fixed deposits for 5-years where our readers, especially debt investors need to keep in mind that the tax benefits up to Rs 1.5 lakhs under section 80C will only apply if they stay invested for 5-years of lock-in period which simply states that they can not make a premature withdrawal. By summing up all these factors, here we have compiled the top 10 public sector, private sector, and small finance banks that are now promising higher returns on fixed deposits of up to 5 years or tax-saving fixed deposits of less than Rs 2 Cr.

Top 10 Small Finance Banks Offering Good Returns On 5-Year Tax Saving FDs

When it comes to fixed deposits, small finance banks always offer higher returns to both regular and senior citizens compared to the leading private and public sector banks. But as a matter of concern for the safety of their deposits, let me remind the investors that they can enjoy the deposit insurance cover provided by DICGC across small finance banks also. For higher returns along with deposit safety, customers can open a fixed deposit account for 5-years in any of the below-listed small finance banks respectively.

Sr No. Banks Regular FD Rates Senior Citizen FD Rates Tenure W.e.f.

1 Ujjivan Small Finance Bank 6.75% 7.25% 3 Years and 1 Day to 5 Years March 5, 2021

2 Jana Small Finance Bank 6.75% 7.25% 3 years to less than 5 years 07.05.2021

3 Fincare Small Finance Bank 6.75% 7.25% 59 months 1 day to 66 months 29 July, 2021

4 North East Small Finance Bank 6.50% 7.00% 1096 days to less than 1825 days April 19, 2021

5 Equitas Small Finance Bank 6.25% 6.75% 4 years 1 day to 5 years June 1, 2021

6 Suryoday Small Finance Bank 6.25% 6.50% 5 years June 21, 2021

7 Utkarsh Small Finance Bank 6.00% 6.50% 701 Days to 3652 Days July 1, 2021

8 Capital Small Finance Bank 6.00% 6.50% 1 Year to less than 5 Years June 3, 2021

9 AU Small Finance Bank 6.00% 6.50% 45 Months 1 Day to 60 Months June 23, 2021

10 ESAF Small Finance Bank 5.25% 5.75% 1821 days to 3653 days 02.05.2021

Source: Bank Websites

Top 10 Private Sector Banks Promising Higher Returns On 5-Year Tax Saving FDs

After small finance banks, private sector banks offer the best returns on fixed deposits to both regular and senior citizen investors. By keeping deposit insurance cover benefits and higher returns in mind, here we have compiled the top 10 private sector banks that are now promising higher interest rates on 5-year deposits.

Sr No. Banks Regular FD Rates Senior Citizen FD Rates Tenure W.e.f.

1 RBL Bank 6.50% 7.00% 60 months July 2, 2021

2 DCB Bank 6.50% 7.00% 36 months to 60 months May 15, 2021

3 Yes Bank 6.25% 7.00% 3 years to less than 5 years June 3, 2021

4 IndusInd Bank 6.00% 6.50% Indus Tax Saver Scheme (5 years) July 23, 2021

5 IDFC First Bank 5.75% 6.25% 5 years May 1, 2021

6 Axis Bank 5.40% 5.90% 3 years to 5 years 22.06.2021

7 ICICI Bank 5.35% 5.85% 5 Years (80C FD) 21.10.2020

8 HDFC Bank 5.30% 5.80% 3 year 1 day- 5 years May 21, 2021

9 Bandhan Bank 5.25% 6.00% 3 years to less than 5 years June 7, 2021

10 Kotak Mahindra Bank 5.20% 5.70% 4 years and above but less than 5 years July 23, 2021

Source: Bank Websites

Top 10 Public Sector Banks Providing Best Returns On 5-Year Tax Saving FDs

For deposit amounts of less than Rs 2 Cr, here are the top 10 public sector banks offering the best interest rates on 5-year fixed deposits to both regular and senior citizens in 2021.

Sr No. Banks Regular FD Rates Senior Citizen FD Rates Tenure W.e.f.

1 Union Bank of India 5.50% 6.00% 3 years to less than 5 years 09.07.2021

2 Canara Bank 5.50% 6.00% 3 years and up to 5 years 08.02.2021

3 State Bank of India 5.30% 5.80% 3 years to less than 5 years 08.01.2021

4 Punjab & Sind Bank 5.30% 5.80% 3 Years – 5 Years 16.05.2021

5 Bank of Baroda 5.25% 5.75% 3 years and up to 5 years 16.11.2020

6 Punjab National Bank 5.25% 5.75% above 3 year & upto 5 years 01.05.2021

7 IDBI Bank 5.25% 5.75% 5 years July 14, 2021

8 Indian Overseas Bank 5.20% 5.70% 3 Years and Above 09.11.2020

9 Indian Bank 5.15% 5.65% 5 years 05.02.2021

10 Central Bank of India 5.00% 5.50% 2 years and up to 10 years 10.07.2021

Source: Bank Websites

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China’s central bank says it will keep pressure on crypto market, BFSI News, ET BFSI

July 31, 2021 root Personal Finance

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China’s central bank vowed to maintain heavy regulatory pressure on cryptocurrency trading and speculation after escalating its clampdown in the sector earlier this year.

The People’s Bank of China will also supervise financial platform companies to rectify their practices according to regulations, it said in a statement on Saturday. Policy makers met on Friday to discuss work priorities for the second half of the year.

China launched its most intense crackdown on crypto trading and mining since 2017 in recent months, after a surge in Bitcoin and other tokens heightened authorities’ concerns over risks of fraud, money laundering and excessive energy usage. It also imposed a series of regulatory actions targeting monopolistic behavior at online payment platforms such as Ant Group Co. over the past year.

The central bank will act to prevent major financial risks and push to lower the number of high-risk financial institutions in key provinces, according to the statement. It will also accelerate its work to create a financial stability law, which was proposed by Deputy Governor Liu Guiping in March.

The PBOC reiterated that its prudent monetary policy will be flexible, targeted, reasonable and appropriate. It vowed to implement a good “cross-cyclical” policy design, a term widely interpreted to mean authorities will use a longer time frame when considering policy support and will avoid overstimulating the economy.

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NAV	Rs 18.61, growth
Assets under management	Rs 8,566 crores
Investment strategy	Equity
Risk	Very high

1- year	3-year, annualized	5-year, annualized
88.17%	23.52%	19.03%

NAV	Rs 109.56, growth
Assets under management	Rs 110 crores
Investment strategy	Equity
Risk	Very very high

NAV	Rs 95.30, growth
Assets under management	Rs 9,010 crores
Investment strategy	Equity
Risk	Very very high

	FY 2021-22	FY 2022-23
EPS	Rs 7.9	Rs 11.8
Price to earnings	4.81	3.2
Price to book value	0.4	0.3
Price to a/bv	0.5	0.5

	FY 21-22	FY 22-23
P/E	9.7	8.00
Price to book value	1.3	1.1
Dividend yield	1.4%	1.4%

Sr No.	Banks	Regular FD Rates	Senior Citizen FD Rates	Tenure	W.e.f.
1	Union Bank of India	5.50%	6.00%	3 years to less than 5 years	09.07.2021
2	Canara Bank	5.50%	6.00%	3 years and up to 5 years	08.02.2021
3	State Bank of India	5.30%	5.80%	3 years to less than 5 years	08.01.2021
4	Punjab & Sind Bank	5.30%	5.80%	3 Years – 5 Years	16.05.2021
5	Bank of Baroda	5.25%	5.75%	3 years and up to 5 years	16.11.2020
6	Punjab National Bank	5.25%	5.75%	above 3 year & upto 5 years	01.05.2021
7	IDBI Bank	5.25%	5.75%	5 years	July 14, 2021
8	Indian Overseas Bank	5.20%	5.70%	3 Years and Above	09.11.2020
9	Indian Bank	5.15%	5.65%	5 years	05.02.2021
10	Central Bank of India	5.00%	5.50%	2 years and up to 10 years	10.07.2021
Source: Bank Websites