Category: Personal Finance

Stellar show: SBI net jumps 80% on strong interest income, lower provisions

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Commenting on the ongoing second wave, SBI chairman Dinesh Khara said there would be some impact, as the banking sector tends to move in tandem with the macro environment.

State Bank of India (SBI) on Friday reported an 80% year-on-year (y-o-y) increase in its net profit to Rs 6,451 crore for the March quarter (Q4FY21) on the back of a healthy growth in interest income, improved asset quality and lower provisioning. The lender’s net interest income (NII) grew 19% y-o-y to Rs 27,067 crore. On the back of this, SBI’s operating profit increased 7% y-o-y and 14% sequentially to Rs 19,700 crore.

Commenting on the ongoing second wave, SBI chairman Dinesh Khara said there would be some impact, as the banking sector tends to move in tandem with the macro environment.

The bottom line also got support from lower provisioning for stressed assets. Total provisions declined 11% y-o-y to Rs 13,249 crore during the March quarter. During FY21, total provisions declined 5% to Rs 51,144 crore, compared to Rs 53,645 crore during FY20.The net profit for FY21 increased 41% y-o-y to Rs 20,410 crore.

The bank saw fresh slippages of 21,934 crore during the quarter under review. “Overall, slippage and restructuring applications for FY21 stood at Rs 46,416 crore, well below guidance of the bank,” Khara said. The lender had earlier said slippage and restructuring would remain under Rs 60,000 crore for the whole financial year (FY21). Total recovery and upgradations during Q4 remained at Rs 27,930 crore. The provision coverage ratio (PCR) improved 413 bps y-o-y to 87.75%, compared to 83.62% during Q4FY20.

The asset quality improved during the March quarter. The gross non-performing asset (GNPA) ratio improved 22 basis points to 4.98%, compared to reported pro forma gross NPAs of 5.44% in the previous quarter. Similarly, net NPAs ratio improved 31 bps to 1.5% from 1.81% in the December quarter. Lenders had reported NPAs on a pro forma basis during the December quarter due to a standstill order from the apex court on declaring NPAs.

“A definitive assessment of the impact of Covid-19 is dependent upon circumstances as they evolve in the subsequent period,” Khara said. However, he said the bank might register a credit growth of around 10% in FY22 as the bank’s credit growth is normally 1% above India’s GDP.

Khara also said SBI is reaching out to customers to see if they need fresh restructuring scheme announced by the RBI. Earlier this month, the regulator had announced a fresh loan restructuring window for individual and small businesses hit hard by fresh Covid-19 wave.

The lender’s fee income increased 7.4% y-o-y to Rs 8,455 crore, compared to Rs 7,873 crore in Q4FY20. Similarly, forex income grew 16% y-o-y to Rs 803 crore. Overall, other income grew 21% y-o-y to Rs 16,225 crore.

Advances grew 5% y-o-y and 3.4% q-o-q to Rs 25.39 lakh crore. Retail lending portfolio increased 16% y-o-y to Rs 8.7 lakh crore. However, corporate advances declined 3% y-o-y to Rs 8.18 lakh crore. Deposits grew 13.5% y-o-y and 4% q-o-q to Rs 36.81 lakh crore. Current account savings account (CASA) grew 17% y-o-y and 7% q-o-q to Rs 16.46 lakh crore.

The net interest margins (NIM) improved 16 basis point (bps) y-o-y to 2.9%, but declined 22 bps sequentially. The capital adequacy ratio (CAR) remained at 14.5% with CET1 ratio of 10.02% at the end of March 2021.

The bank declared a dividend of Rs 4 per equity share for FY21. The date of payment of dividend is June 18, 2021.

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China fund managers embrace robots as competition intensifies, BFSI News, ET BFSI

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By Samuel Shen and Andrew Galbraith

SHANGHAI: Chinese fund managers, grappling with a rapidly-growing list of publicly-traded securities and mountains of data, are rapidly embracing machine learning and other types of artificial intelligence (AI) to boost efficiency and bolster returns.

From using computers for analyzing news and research reports and crunching numbers to getting robots to pick stocks, the move comes as foreign players are expanding their footprint in China’s $3.4-trillion mutual fund industry.

While AI has already been widely used in China’s mammoth e-commerce and manufacturing sectors, it is now being adopted by asset managers as Beijing aims to digitize the economy further and close the technology gap with the western world.

Last week, Zheshang Fund Management Co launched a fund that uses robots to predict the market outlook and select stocks. It came after China Asset Management Co (ChinaAMC) announced its partnership with Toronto-based AI company Boosted.ai.

“I think it’s a must. Every major player is actively looking for AI solutions. The competition is really tough,” said Bill Chen, chief data officer of ChinaAMC, which managed $246 billion worth of assets at the end of last year.

Global fund managers such as BlackRock Inc have been using computer artificial intelligence (AI) to analyze fundamentals, market sentiment and macroeconomic policies in the last couple of years to get an investment edge.

“Companies like BlackRock have very powerful, advanced technology. They are leading us in AI for sure, by at least several years,” said Chen. “But I think we understand the Chinese market better.”

Fund managers’ increased usage of AI in the world’s second-largest economy comes as Beijing is stepping up digitalization drive, a trend accelerated by the COVID-19 pandemic and as it increasingly clashes with the West over technology policy.

China’s stock market listing reforms have boosted the number of public companies, leading to a data explosion that also fuels demand for AI, said Zhou Yu, chief product officer of ABC Fintech, a Beijing-based AI company.

ABC Fintech counts asset managers such as China Universal Asset Management and Hwabao WP Fund Management Co as clients, and serves as their data factory, Yu said.

REGULATORY CHALLENGES
Growing investments into AI are also being fueled by early signs of success.

Zheshang Fund’s first AI-powered fund, Zheshang Intelligent Industry Preferred Hybrid Fund has gained 68.34% since its launch in Sept 2019, according to its Q1 report, compared with a 21.64% gain in its benchmark, which is a combination of stock and bond indexes.

The fund has built an “AI Beehive strategy model” in which robots team up like humans to buy stocks. More than 400 robots compete for the right to make decisions as their models constantly evolve through trial and error.

Peter Shepard, managing director at MSCI Research, said that instead of providing super-human intelligence, AI provides super-human scale that will open up fresh sources of information that drive new levels of insight and efficiency.

“These new tools on their own can’t predict the future any better than people can, but they are key to unlocking new, alternative and unstructured data sets that will continue to transform the investment process.”

“AI will be an important edge,” said Larry Cao, senior director at CFA Institute, who authored several reports on AI-powered investing. “The hard truth with AI is that the bigger firms can invest a lot more resources.”

Some Chinese industry officials, however, expressed concerns that the use of machine learning algorithms to pick stocks and better returns could run into regulatory challenges.

“From a regulatory perspective, you need to go through a lot of compliance procedures. You need to write reports on your decision making. Some AI-powered models are like black boxes, and unexplainable,” said Yu of ABC Fintech.

“That’s hardly acceptable to regulators.”

As learning algorithms are increasingly used in trading rooms, local fund managers are working with regulators to try to design new standards for the industry.

“One of the main barriers we face … is that we are so highly regulated,” ChinaAMC’s Chen said. “Every decision you make, you have to be responsible for that decision, and you should be able to explain a decision when you lose money.”



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US regulators signal stronger risk, tax oversight for cryptocurrencies, BFSI News, ET BFSI

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WASHINGTON: US Federal Reserve chief Jerome Powell turned up the heat on cryptocurrencies on Thursday, saying they pose risks to financial stability, and indicating that greater regulation of the increasingly popular electronic currency may be warranted.

The Treasury Department, meanwhile, flagged its concerns that wealthy individuals could use the largely unregulated sector to avoid tax and said it wanted big crypto asset transfers reported to authorities.

The back-to-back announcements came in a week when Bitcoin, the most popular cryptocurrency, took a wild ride, falling as much as 30% on Wednesday after China announced new curbs on the sector, underscoring the volatility of the sector.

Powell underlined cryptocurrency risks in an unusual video message that also laid out a clearer timetable as the Fed explores the possibility of adopting a digital currency of its own.

While highlighting the potential benefits of advances in financial technology, Powell said cryptocurrencies, stablecoins and other innovations “may also carry potential risks to those users and to the broader financial system.”

As the technology advanced, “so must our attention to the appropriate regulatory and oversight framework. This includes paying attention to private-sector payments innovators who are currently not within the traditional regulatory arrangements applied to banks, investment firms, and other financial intermediaries.”

Powell’s comments signaled how seriously the Fed has been forced to reckon with the surge in popularity and market values of non-traditional currency options such as Bitcoin, especially as it looks at developing a digital version of the U.S. dollar, the world’s reserve currency.

Speculative Assets
The Fed and Treasury consider cryptocurrencies, which now have a market capitalization of about $2 trillion, to be more like art, gold or other highly speculative assets.

A central bank digital currency, though, offers whoever holds it – a person, a business, even another government – a direct claim on that central bank, which is exactly what holding a paper dollar bill does now.

Powell said the Fed would release a discussion paper this summer on digital payments, with a focus on the benefits and risks of establishing a central bank digital currency, and will also seek public comment.

He noted that “to date, cryptocurrencies have not served as a convenient way to make payments, given, among other factors, their swings in value.”

The Treasury also flagged cryptocurrency risks, including opportunities for wealthy individuals to move taxable assets into the largely unregulated crypto sector.

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury said.

Its proposal, disclosed as part of a policy report https://home.treasury.gov/system/files/136/The-American-Families-Plan-Tax-Compliance-Agenda.pdf detailing the Biden administration’s $80 billion IRS enforcement proposal to boost revenue collection, would provide additional resources for the IRS to address crypto assets,

In addition to the reports of $10,000-plus cryptocurrency transfers that would parallel bank reports of similarly sized cash transfers, the Treasury also proposed that crypto asset exchanges and custodians also report transactions to the IRS related to bank interest, dividend and brokerage transactions.

The reporting requirements, depending on how they are structured, could also allow the government to gain insight about US companies that are extorted to pay hackers ransoms, almost invariably in cryptocurrency, to regain control of their IT systems.

Law enforcement and private sector cybersecurity experts alike have complained that a lack of transparency around these ransomware incidents contributes to their continued occurrence.

The Treasury disclosure took the wind out of a rally in the dollar value of Bitcoin on Thursday that followed steep plunges for Bitcoin and etherium on Wednesday. Bitcoin was up 8.7% in afternoon trade after an earlier gain of 10%.

While the Fed and some other developed economies are still conducting research on what a central bank digital currency would look like, China is moving ahead at a fast clip and is currently piloting a digital version of the yuan, with plans to ramp up usage before the 2022 Winter Olympics in Beijing.

Powell said last month that the Fed would not rush its efforts in response to China’s more aggressive pace, noting that the approach taken there would not work in the United States.

“It is far more important to get it right than it is to do it fast,” Powell said after the April policy setting meeting.

The Boston Fed is currently working with the Massachusetts Institute of Technology to research the technology that could be used for a central bank digital currency and will be releasing those findings in the third quarter.

Congressional action would be required before a digital currency could be developed.

Also on Thursday, U.S. Securities and Exchange Commission Chair Gary Gensler said he would like to see more regulation around cryptocurrency exchanges, including those that solely trade bitcoin and do not currently have to register with his agency.

“This is a quite volatile, one might say highly volatile, asset class, and the investing public would benefit from more investor protection on the crypto exchanges,” he said at the Financial Industry Regulatory Authority’s annual conference.



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What’s the endgame of all the speculation & hoarding in Bitcoin, BFSI News, ET BFSI

Personal Finance

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LONDON: Bitcoin‘s wild ride this week is far from unusual for the largest crypto token – but the rollercoaster is also its inherent contradiction.

Speculators betting for years on bitcoin becoming a stateless digital currency that’s widely used for online retail and payments are largely responsible for its parabolic price rises. But they also seed the sort of blinding volatility that makes that ambition almost untenable.

Bitcoin’s 30 per cent plunge on Tuesday after another Chinese government crackdown is not unique. Daily moves of more than 20 per cent have been frequent during the past 6 years. At almost 4.5 per cent, median daily price swings over that time period are more than 6 times that of the main Transatlantic euro/dollar exchange rate.

And while some online retailers might accept bitcoin as payment for goods priced in dollars, few could manage the potential accounting chaos of sticker pricing in bitcoin if its value can routinely shift by a fifth in just hours.

The flipside is true for buyers. If you think bitcoin’s price keeps on rising over time – much like the latest quadrupling over the past 12 months – then why would you surrender those gains by paying for anything with bitcoin today?

And so if that role as a transaction currency or stable store of value remains elusive, it’s essentially just a game of hoarding a finite number of tokens by small groups of people that routinely involves wild, illiquid swings whenever regulators pounce, backers tweet support or big players cash in.

As ever, arguments about pros and cons of crypto tokens divide among believers and non-believers – blind faith versus instant dismissal, cheer-leading versus scorn.

Deutsche Bank this week likened bitcoin belief structures to the so-called “Tinkerbell effect” – a theory drawing from childrens’ book character Peter Pan‘s claim that the fairy only exists because the kids believe she does.

“In other words, the value of Bitcoin is entirely based on wishful thinking,” wrote Deutsche analyst Marion Laboure.

Laboure estimates that less than 30 per cent of transactions in bitcoin are currently related to payments – the rest is trading, speculation, investment or related activities.

And she reckons its liquidity as an investment asset is low. With about 28 million bitcoins changing hands last year, that’s 150 per cent of all those in circulation – almost half the equivalent metric for Apple shares.

TINKERBELL, ARK AND MUSK
With a market capitalisation still about $1 trillion, governments can’t ignore bitcoin, even if central banks continue to dismiss its wider systemic importance. They may even welcome the fact its emergence over the past decade has spurred so-called “fintech” innovation as they gradually develop their own central bank digital currencies over the coming years.

But Deutsche’s Laboure reckons more crackdowns will come – and most likely the whenever bitcoin even looks like rivalling their currencies for payment.

“It is no surprise that governments are not inclined to give up their monetary monopolies. Throughout history, governments first regulate and then take ownership.”

If so, what’s the endgame of all the speculation and hoarding – which just further limits bitcoin supply and drives the price higher? Is it just “pass the parcel” while the music keeps playing? Or are people with money to burn punting for quick gains and trading strategically by timing entry and exits?

Some argue there is genuine demand for crypto transfers within the half trillion dollars per year of global remittances, as migrant workers often need to funnel money back to poorer countries with strict formal exchange controls.

Others claim crypto privacy features draw in demand from criminals, as per this month’s ransomeware hack at Colonial pipeline. But that will just hasten more regulation. Investment arguments beyond simply punting it ever higher range from a lack of “correlation” with other assets to a potential role as an inflation hedge – an odd assertion given its latest reversal comes amid all the post-pandemic inflation scares.

Powerful backers have a outsize say too, but are increasingly erratic.

Tesla billionaire Elon Musk drove the price skywards earlier this year by saying Tesla would accept bitcoins as payment for its dollar-priced electric vehicle and add bitcoin to the company balance sheet – only to backtrack last week by warning about excessive energy usage in bitcoin mining.

With no obvious rationale, star tech stock investor Cathie Wood of Ark Invest claimed this week that bitcoin would rise another tenfold again after it registered a 50 per cent loss in a month.

At the $500,000 level she posits, the market cap of bitcoin would then be $10 trillion – or a third of the entire M1 money supply of G20 economies.

London School of Economics‘ Jon Danielsson reckons that as a result of the concentration of bitcoin ownership, that sort of move would create new multi billionaires – or even the first trillionaire. And that would wildly exaggerate existing wealth skews as the gap between bitcoin haves and have-nots soars to intolerable levels, making a mockery of claims of crypto “democratisation”.

As a result, he thinks co-existence of bitcoin and so-called fiat currencies is impossible. It’s all or nothing.

If it replaces all G20 currencies in circulation, that would then see each bitcoin priced at $1.5 million.

Reality or fiction?

“Bitcoin is a bubble,” Danielsson concludes. “It makes sense to ride the bubble as long as possible – just get out in time.”

(By Mike Dolan, Twitter: @reutersMikeD)



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5 Best 1-2 Year Fixed Deposits For Senior Citizens

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1-Year FDs For Senior Citizens

For a one-year term and a deposit amount of less than Rs 2 crore, here are the top five bank fixed deposit interest rates.

Banks 1-Year FD Rates W.e.f.
Suryoday Small Finance Bank 7.25% 15.02.2021
IndusInd Bank 7.00% April 26th, 2021
Ujjivan Small Finance Bank 7.00% 5th March, 2021
Equitas Small Finance Bank 7.00% 25.01.2021
RBL Bank 6.75% May 7, 2021
Source: Bank Websites

How To Get Higher Returns On FD Without Making Premature Withdrawals?

2-Year FDs For Senior Citizens

2-Year FDs For Senior Citizens

Here are the top five bank fixed deposit interest rates for a two-year term and a deposit amount of less than Rs 2 crore.

Banks 2-Year FD Rates W.e.f.
Suryoday Small Finance Bank 7.25% 15.02.2021
IndusInd Bank 7.00% April 26th, 2021
Ujjivan Small Finance Bank 7.00% 5th March, 2021
RBL Bank 6.75% May 7, 2021
Yes Bank 6.50% 10th May, 2021
Source: Bank Websites

Note

Note

Banks had lowered interest rates in the wake of the Covid-19 pandemic. Senior citizens who depend on a steady stream of income have been struck the hardest by the current low interest rate climate. Leading banks, such as State Bank of India (SBI), promise senior citizens a maximum of 6.2 percent on fixed deposits with a period of 5-10 years, whereas post office small savings schemes promise a better rate if the investment goal is for the long term. However, if a senior citizen is searching for a short-term investment, such as one or two years, the above-mentioned fixed deposits can be considered. Since all of the above-mentioned banks are covered by DICGC for a Rs 5 lakh insurance cover, investing for 1 to 2 years in the above-mentioned bank FDs is secure, which is a consideration that always outweighs interest rates.



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How To Manage Your FDs Without Making Premature Withdrawals?

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Opt FD Laddering Strategy

A strategy known as “Bank FD laddering” will help you avoid premature withdrawal from your bank FDs and facing a penalty. Bank FD laddering is a strategy that entails handling multiple FDs of varying maturities. It is a more effective method of managing liquidity. What you have to do is break up the lump sum contribution into smaller chunks and diversify them out over different maturities. Rather than investing your entire lump sum amount in a single FD, split your money equally and invest it in a variety of FDs of varying maturities. For example, suppose you want to invest Rs 5 lakh in a bank FD. You can divide the corpus into five equal amounts using the FD laddering method, i.e. five FDs of Rs. 1 lakh each for varying maturities. You can invest Rs 1 lakh in each of the following FDs: 1-year, 2-year, 3-year, 4-year, and 5-year and reinvest the maturity amount upon maturity. Assume you re-invested each FD in a fresh 5-year FD. As the 1-year FD matures, it will be reinvested for another five years until maturing in the sixth year. The 2-year FD matures in the seventh year and so on.

In this case, you’ve set up an investment cycle in which one of your FDs matures every year, ensuring that you’ll have enough capital to satisfy your personal finance. Depending on your needs, you can make your own laddering technique. You can also customise different investment options to meet your needs. Bank FD Laddering is a popular way for retirees to receive a steady income at the time of retirement. Another advantage of laddering is that if your requirement can be met by withdrawing a single FD, you won’t have to disrupt your entire investment portfolio in the event of a financial disaster. A laddering approach will help you achieve your financial targets and liquidity needs by investing either in various FDs or stretching your investment through different instruments. You can even pick from a variety of banks to invest in various FDs and benefit from a Rs 5 lakh deposit insurance plan in the event of a bank default.

Have a look on sweep in FDs

Have a look on sweep in FDs

Fixed Deposit Sweep-in is a service offered to investors by lenders. Depositors must have a savings account linked to their fixed deposit account in order to use this service. The depositor specifies a specific ceiling. When the savings account balance surpasses this level, the funds are transferred to the specified fixed deposit account. A sweep-in FD offers comparable interest rates to a standard FD while also providing the liquidity advantages of a savings account. Furthermore, there are no penalties for using or withdrawing funds from sweep-in accounts and even no penalties on premature withdrawals. Because FD interest rates are higher than savings account interest rates, the money transferred to the linked fixed deposit account would collect more interest. Furthermore, since the account holder sets the cap, using a sweep-in facility has little impact on the account holder’s liquidity.

As a result, they can set it according to their personal finance goals. If a sweep-in deposit is chosen, any amount in the savings account that exceeds a certain threshold limit is automatically transferred into the linked FD account. If you have Rs 2 lakh in your bank account and the threshold amount is Rs 50,000, Rs 1.5 lakh will be automatically transferred into the fixed deposit account. Some banks have a certain threshold cap, whereas others can allow you to schedule your own. A lower threshold cap aids in obtaining a high rate of return on one’s investment. However, do not forget to encounter the account’s mandatory minimum cap in regard to the threshold limit. To qualify for a sweep-in FD, most banks need a minimum average balance (MAB) in the savings bank account.

Opt for flexi fixed deposit scheme

Opt for flexi fixed deposit scheme

A fixed deposit is a form of investment favoured by investors who want to save a certain amount of money for the long-run. These fixed deposits are more flexible than traditional FDs and vary in a variety of respects. The tenure and amount of investment in a Flexi fixed deposit are not defined, unlike a standard FD, and can range from 7 days to 10 years. It requires a one-time deposit, and the FD’s tenure and maturity are determined on the deposit date. In a Flexi-Fixed account, depositors can change the amount of their monthly deposits and also the number of monthly deposits. Flexi fixed deposits also give you the option of taking out a loan. The Flexi fixed deposit scheme also allows the depositor to withdraw a certain amount from a savings or existing bank account that has been linked to the Flexi fixed deposit scheme. This advantage, on the other hand, varies across banks that provide Flexi fixed deposits. As a result, the advantages of higher returns and greater liquidity are bundled with a single deposit scheme. As a result, you must carefully review the terms and conditions of banks before finalizing your consideration for opting a flexi fixed deposit scheme.



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2 Brokerages That Have Raised Their Target Price On Indian Oil Shares

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Investment

oi-Sunil Fernandes

|

Brokerages are raising their targets on the share price of Indian Oil post the quarterly numbers. Indian Oil Reported a standalone EBITDA Rs147 billion, for the quarter ending March 31, 2021. This was up 4x yoy/53% qoq with a 40% beat, driven by higher Gross Refining Margins and Petchem margins.

Net profits at Rs 87.8 billion (up 79% qoq) was a 40% beat, with lower ETR of 20% offsetting higher interest, lower other income and impairment.

“We cut FY22E/23E EPS by 10% each as we factor in lower marketing margins due to volatile oil prices. We raise target price by 18% to Rs 130, after lowering our net debt estimate based on reported FY21 numbers. Maintain Buy rating on IOCL with an EW stance in sector EAP,” Emkay Global has said.

Another brokerage that has buy rating on the stock of Indian Oil is Motilal Oswal. In fact, the brokerage has set an even better price target of Rs 152 on the stock of IOCL.

“IOCL trades at 5.7x consolidated FY23E EPS of Rs 18.3 and 0.8x FY23E PBV. IOCL has traded at a huge discount in the recent past decade due to its capex cycle and CPSE-led liquidity. We value it at 1.1x FY23 PBV to arrive at Target Price of Rs 152,” brokerage firm Motilal Oswal has said.

Lockdowns spurred by the second COVID wave in India have impacted demand for petroleum products – down 33% to 35% for petrol/diesel in May’21 (v/s 2019); Refinery utilization at 84% in May’21.

2 Brokerages That Have Raised Their Target Price On Indian Oil Shares

“Factoring in the same, we lower our FY22E EPS estimates by 11% weighed by the impact in 1QFY22. SG GRMs that have been trending above USD2.5/bbl thus far in 1QFY22 have fallen to sub USD2/bbl levels – amid the emergence of COVID cases globally over the past few days. In line with the company guidance, we believe the lifting of the COVID lockdowns across the globe would boost demand, driving an uptrend in GRM. We maintain Buy, with combined dividend yield of 15.3% over FY22-23E,” the brokerage has said.



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WazirX Customers Can No More Use Paytm Option To Buy And Sell Crypto Coins

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Planning

oi-Sneha Kulkarni

|

If you use the WazirX cryptocurrency exchange app in India to buy and sell Bitcoins and other cryptocurrencies, you should know that one payment option will not be available from now. Paytm Payments Bank will stop dealing with cryptocurrency exchanges and will no longer allow cryptocurrency transactions on its platform.

The decision comes as cryptocurrency prices are plummeting around the world, with Bitcoin leading the charge and smaller players like Ethereum not far behind.

Following an “informal” Reserve Bank of India (RBI) order, banks announced on May 20 that they would no longer deal with crypto exchanges such as WazirX, BuyUCoin, and Zebpay.

WazirX Customers Can No More Use Paytm Option To Buy And Sell Crypto Coins

In an email to all WazirX users, the platform explained that their Paytm Bank account will be unavailable for the time being, which means that bank transfers using NEFT or IMPS transfers from your bank account will be unavailable.

This is the opening twist in the ongoing story of cryptocurrency trading in India and banking institutions’ unwillingness to work with crypto exchanges. Because of this, WazirX, CoinSwitch Kuber, and CoinDCX are currently unable to provide UPI payments as a payment option to users.

WazirX in a tweet mentioned “WazirX will not accept INR deposits to PayTM Bank account from 11:59 PM IST tonight, 20th May 2021. If you make any INR deposit via IMPS/NEFT/RTGS to our PayTM Bank account after that, it will revert to your source bank account within 7-10 business days”.

While we work with our partners to add more INR deposit options, we recommend you to use WazirX P2P to buy/sell USDT with INR. Thank you for your support, added further.

WazirX P2P is the only alternative available, and it allows you to buy and sell USDT directly with other buyers and sellers. Following your selection of the amount of USDT you want to exchange, the app matches you with sellers or buyers who are looking to make a trade at that moment.

The Indian National Payments Corporation operating the UPI real-time payment system has however rejected a ban on crypto-monetary transactions in India. Rather, they requested banks to establish their own cryptocurrency policies.

GoodReturns.in



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IRDAI Slaps Rs 24 lakh Penalty on Policybazaar: Here is Why

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Insurance

oi-Sneha Kulkarni

|

Policy aggregator Policybazaar has been fined Rs 24 lakh by the Insurance Regulatory and Development Authority of India (IRDAI) for breaching advertising norms in relation to SMSs sent to customers last year regarding increases in term insurance policy premiums.

The Insurance Regulatory and Development Authority of India (Irdai) charged Policybazaar with three charges: sending false information about price increases via SMS, and violating regulations 11 and 9 of the advertising and disclosure norms.

IRDAI Slaps Rs 24 lakh Penalty on Policybazaar: Here is Why

The issue involves Policybazaar sending SMS to its customers without specifying its full registered name in the message between March 15, 2020, and April 7, 2020. The web aggregator sent SMS to around 10 lakh customers, informing them that life insurance rates would rise on April 1 and that they could save up to Rs 1.65 lakh by purchasing a term plan.

On April 7, 2020, Irdai requested an explanation from Policybazaar. It requested that the messages be stopped immediately and that the basis for the advertising be given.

HDFC Life, Tata AIA Life, and ICICI Prudential have all told Policybazaar that their term insurance premiums will rise in April 2020.
In regards to sending SMS without using the company’s full registered name, Policybaazar explained that the Trai regulation only allows for six characters, so the header of the SMS must-read ‘POLBAZ’.

“Considering that the SMS was sent to about 10 lakh specific customers of Policybazaar and has the potential to cause avoidable panic among the customers, they are cautioned to be more circumspect when sending such communications in future,” read the order.

Policybazaar claimed that the SMS was sent to keep customers informed and not to deceive them. They also reported that they immediately stopped sending SMS after receiving the Authority’s communication, according to Irdai.

GoodReturns.in



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7 Listed Tax Free Bonds To Invest For Tax Free Income

Personal Finance

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Why to buy tax free bonds in India?

Let us say that your are in the 20 and 30 per cent tax brackets and you earn an interest rate of 50,000 from your bank deposits. Those in the higher tax bracket would end up paying almost 15,000 as taxes on interest income, thus reducing your yields. Take a look at the list of tax free bonds that have decent interest rates and where the interest is tax free.

Name Interest rate Interest payment Expiry of bonds
HUDCO N2 Series 8.2% March every year March 2027
HUDCO N5 Series 7.51% Feb every year Feb 2028
IRFC N9 Series 8.48% Feb every year Feb 2024
IRFC NA series 8.65% Feb every year Feb 2029
RECN6 Series 8.46% Sept every year Sept 2028
RECNF Series 8.88% March every year March 2029
NHAI N6 Series 8.75% Feb every year Feb 2029

Do not go by the interest rates on these bonds alone?

Do not go by the interest rates on these bonds alone?

Remember these interest rates are on the original bond price of Rs 1,000. Now, if you have to buy these bonds they are listed on the stock exchanges and have to be purchased from there. Most of these bonds were issued at a face value of Rs 1,000.

Let’s take an example. The original subscriber to the Indian Railways Finance Corporation (IRFC) N9 series bond paid only Rs 1,000 and is today getting a solid returns of 8.48% coupon. However, since interest rates have fallen since these bonds were issued, he is going to sell at a higher rate than Rs 1,000.

The IRFCN9 Bonds are now traded at Rs 1,250, which means your returns would drop, as you would buy lesser amount of bonds. So, an individual needs to work the right price to buy these bonds. Those in the highest tax bracket should at least aim for post tax returns of 6 per cent or else it is now worth buying the bonds.

Safety and security of tax free bonds

Safety and security of tax free bonds

These bonds are highly secure as they are backed by Government of India owned institutions. Some of the bonds mentioned above have a long tenure. You can sell these bonds on the stock exchanges just as you buy them. However, it is pertinent to note that in some cases the volumes of trading could be thin. Say for example, if you wish to buy 1,000 bonds at a certain price, it may not be available. In some cases they may not be traded at all. We suggest you look for ones that are closer to maturing. The above list that we have provided of tax free bonds is not exhaustive by any means. Apart from tax free bonds, there is the PPF and the ULIPs where the interest or the returns as the case maybe are free from tax. Of course, we also have the EPF and the VPF where after a 5-year period of continuous work, the interest earned is tax free in the hands of investors.

About the author

About the author

Sunil Fernandes has spent 26 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His forte remains stocks, mutual funds and tax planning.



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