Category: Personal Finance

3 Housing Finance Stocks That Can Generate Solid Returns

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Valuation Attractive

“Post COVID-19, valuations for HFCs corrected sharply due to concerns on: a) decline in loan growth, b) pressure on spreads owing to lending rate pressures from banks and tight liquidity, and c) deterioration in asset quality on account of job losses and stressed developers. However, with a sharper than earlier anticipated economic recovery, disbursements for larger players have picked up meaningfully. Abundant system-wide liquidity has led to a sharp decline in the cost of funds. Asset quality concerns are reducing. HDFC and Indiabulls Housing Finance (IHFL) have also raised capital.

The stance of the regulator is incrementally more supportive. We believe the excess liquidity and low interest rate environment would sustain in the near-to medium term, which augurs well for the Real Estate (RE) sector, and in turn, for HFCs,” the Motilal Oswal report has stated.

HDFC Shares – A 21% Upside Target

HDFC Shares – A 21% Upside Target

Shares in HDFC have an upside target of 21 per cent from current levels, according to the report. “Stable-to-improving margins, a lean cost structure, and a well-provided balance sheet would keep core RoA healthy at 1.8% over the medium term. Decline in leverage (6-7x, v/s 9-10x earlier) due to the recent capital raise would restrict ROE to 13% in the near-to-medium term.

Over the last 3-5 years, HDFC’s core business (assuming a constant 20% Holdco discount) has seen de-rating, with multiples contracting from 3x+ to 2x core BV due to headwinds faced by the sector and falling ROA. RE sector tailwinds, coupled with improving profitability, should now see multiple re-ratings. We use SOTP to arrive at a target price of Rs 3,250 (FY23E based),” the broking firm has stated.

LIC Housing Finance – A 18% Upside Target

LIC Housing Finance – A 18% Upside Target

According to Motilal Oswal report, LIC Housing Finance has an upside target price of 18% from the current levels to Rs 510. The firm sees the business turning around, a focused approach on growth, comfort emerging on spreads, while asset quality remains a key monitorable.

“We are constructive on the RE space and LICHF with its strong parentage is likely to be a key beneficiary of the same. We expect spreads and core Retail Housing segment growth to improve in the ensuing quarters. However, asset quality remains a key monitorable. In our view, valuations at 0.8x PBV FY22 largely factor in concerns over capitalization and asset quality. We maintain Buy, with target price of Rs 510 (1x FY23E BVPS),” the broking firm has stated.

AAVAS Financiers – Target Price of Rs 2,000

AAVAS Financiers – Target Price of Rs 2,000

“Being a niche product, only a few companies have been able to scale up in lowticket affordable housing finance. This business is very geography specific – there is no large pan-India player in this segment yet. We believe AAVAS has built a sustainable business model to scale up profitably across geographies over the long term. Its technology adoption and relentless focus on asset quality has made it stand out vs peers. The management team is young and well-incentivized. While the company has best-in-class RoA of 3.5%+, its RoE is modest at 12-14% due to low leverage. While this is unlikely to meaningfully improve over the next two years, one can expect 16-18% RoE structurally over the long term. AAVAS could deliver 20-25% EPS CAGR over the medium-to-long term without any dilution. However, as valuations are rich, we initiate coverage on AAVAS with a Neutral rating and a target price of Rs 2,000 (5.0x FY23E BVPS),” Motilal Oswal has said in its report.



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Real Estate Pins Hope On Budget 2021

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Investment

oi-Sunil Fernandes

|

As the nation is getting ready for Budget 2021-22, the real estate sector is looking anxiously at the announcements to be made that can help the sector come out of last year’s deficit. Experts are unanimous in the view that the Budget would be about growth and recovery; the Government is likely to take some strict measures to ensure that the economy returns on the recovery path. Being the largest employer in the country and a contributor in the GDP, the real estate hopes to get some benefit from the announcements.

The sector is basically divided into luxury, affordable, and mid-segment; each of these segments has its own set of expectations that needs to be addressed; the crux of demand from developers is almost same as all of them are demanding better streamlining of the sector through various measures and improvement in liquidity.

Real Estate Pins Hope On Budget 2021

Tier-II and Tier-III cities are also emerging as the realty hotbeds, which calls for proactive government intervention to see the realization of growth targets. “As we are going through the challenging times, we expect that FM’s Budget will truly be one-of-its-kind for the real estate sector too. It will be a tough call for the FM as she has to balance the market needs and financial prudence. We hope that the Government will focus on improving infrastructure in tier II and III cities, employment generation in cities beyond metros, and fund allocation for the stuck projects,” says Nagaraju Routhu, CEO, Hero Realty.

Sikka Group’s Managing Director, Harvinder Singh Sikka, says, “Although, support to the sector was extended by RBI with low home loan interest rates and restructuring of loans, there remains a large gap to be filled for bringing about the lost momentum in the sector. As customer inquiries and buyers’ interest in property investment begins to rise, the price of raw materials needs to be addressed under this Budget. Realty is further associated with multiple ancillaries; any relaxation provided to this sector will ultimately benefit a great number of associated stakeholders.”

The affordable segment is dependent on the financial health of the common man, and hence the realtors expect that the common man will get some respite that could streamline their funds. The expectation is that the buyers will get loans at affordable rates and the moratorium on loan payments. Voicing the needs of the developers in the affordable segment, Pradeep Aggarwal, Founder & Chairman – Signature Global Group & Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development, says, “Income Tax holiday for Developers in Affordable Housing was given for 2020. After struggling with the pandemic situation for the entire year, it would be encouraging for developers to get this rebate for another 2 years; banks should provide Project based (land & construction) funds at 6%; for first time homebuyers (in Affordable Housing) stamp duty exempt is required pan India; technology import (like aluminum shuttering used in AFW) for construction of affordable housing from other countries should be free from custom duty; stamp duty for land purchase in affordable housing should be reduced or removed for next few years to promote the launch of such homes; and GST on material and services used in affordable housing should be reduced to 50% or brought to single digit”.

Putting forward his point, Dhiraj Bora, Head – Marcomm, Paramount Group, says, “An aspect that can be looked into is the accountability of authorities, they must be analyzed by RERA since delays in granting permissions impact the delivery timelines of projects, which further brings liquidity crunch for developers and negative sentiment among the buyers. The reduction in real estate premiums and stamp duty for Maharashtra region has brought a windfall of sales there, now the NCR market having the widest variety in the residential segment awaits similar policy measures to be announced”.

It is expected that the Government will take last year’s thought and action forward to come up with the announcements that can be implemented in the short term. “Real estate sector needs the support of the Government wants every Indian to have a house. Escalating costs and delays are the biggest hurdles; Government must step in through income tax incentives to the developers, rightly priced land, availability of land in major cities for affordable housing, and so on. The list of expectations is endless because the goal is large – to provide houses to everyone in the Budget that they can afford and still not compromise on the amenities or the deadlines given to the buyers,” says Achal Raina, COO, Raheja Developers.

Realtors feel that encouragement has to be given to the buyers, who have realized the importance of owning a real estate asset. Dhiraj Jain, Director, Mahagun Group, says, “Currently, the deduction for principal repayment of housing loan is Rs 1,50,000, and the deduction is clubbed with other tax saving instruments. We hope that the Government will increase the deduction under section 80C for principal repayment of housing loan from the existing limit of Rs 1,50,000; this will encourage the home buyers to expedite their buying decision.”



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Real Estate Pins Hope On Budget 2021

Personal Finance

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Investment

oi-Sunil Fernandes

|

As the nation is getting ready for Budget 2021-22, the real estate sector is looking anxiously at the announcements to be made that can help the sector come out of last year’s deficit. Experts are unanimous in the view that the Budget would be about growth and recovery; the Government is likely to take some strict measures to ensure that the economy returns on the recovery path. Being the largest employer in the country and a contributor in the GDP, the real estate hopes to get some benefit from the announcements.

The sector is basically divided into luxury, affordable, and mid-segment; each of these segments has its own set of expectations that needs to be addressed; the crux of demand from developers is almost same as all of them are demanding better streamlining of the sector through various measures and improvement in liquidity.

Real Estate Pins Hope On Budget 2021

Tier-II and Tier-III cities are also emerging as the realty hotbeds, which calls for proactive government intervention to see the realization of growth targets. “As we are going through the challenging times, we expect that FM’s Budget will truly be one-of-its-kind for the real estate sector too. It will be a tough call for the FM as she has to balance the market needs and financial prudence. We hope that the Government will focus on improving infrastructure in tier II and III cities, employment generation in cities beyond metros, and fund allocation for the stuck projects,” says Nagaraju Routhu, CEO, Hero Realty.

Sikka Group’s Managing Director, Harvinder Singh Sikka, says, “Although, support to the sector was extended by RBI with low home loan interest rates and restructuring of loans, there remains a large gap to be filled for bringing about the lost momentum in the sector. As customer inquiries and buyers’ interest in property investment begins to rise, the price of raw materials needs to be addressed under this Budget. Realty is further associated with multiple ancillaries; any relaxation provided to this sector will ultimately benefit a great number of associated stakeholders.”

The affordable segment is dependent on the financial health of the common man, and hence the realtors expect that the common man will get some respite that could streamline their funds. The expectation is that the buyers will get loans at affordable rates and the moratorium on loan payments. Voicing the needs of the developers in the affordable segment, Pradeep Aggarwal, Founder & Chairman – Signature Global Group & Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development, says, “Income Tax holiday for Developers in Affordable Housing was given for 2020. After struggling with the pandemic situation for the entire year, it would be encouraging for developers to get this rebate for another 2 years; banks should provide Project based (land & construction) funds at 6%; for first time homebuyers (in Affordable Housing) stamp duty exempt is required pan India; technology import (like aluminum shuttering used in AFW) for construction of affordable housing from other countries should be free from custom duty; stamp duty for land purchase in affordable housing should be reduced or removed for next few years to promote the launch of such homes; and GST on material and services used in affordable housing should be reduced to 50% or brought to single digit”.

Putting forward his point, Dhiraj Bora, Head – Marcomm, Paramount Group, says, “An aspect that can be looked into is the accountability of authorities, they must be analyzed by RERA since delays in granting permissions impact the delivery timelines of projects, which further brings liquidity crunch for developers and negative sentiment among the buyers. The reduction in real estate premiums and stamp duty for Maharashtra region has brought a windfall of sales there, now the NCR market having the widest variety in the residential segment awaits similar policy measures to be announced”.

It is expected that the Government will take last year’s thought and action forward to come up with the announcements that can be implemented in the short term. “Real estate sector needs the support of the Government wants every Indian to have a house. Escalating costs and delays are the biggest hurdles; Government must step in through income tax incentives to the developers, rightly priced land, availability of land in major cities for affordable housing, and so on. The list of expectations is endless because the goal is large – to provide houses to everyone in the Budget that they can afford and still not compromise on the amenities or the deadlines given to the buyers,” says Achal Raina, COO, Raheja Developers.

Realtors feel that encouragement has to be given to the buyers, who have realized the importance of owning a real estate asset. Dhiraj Jain, Director, Mahagun Group, says, “Currently, the deduction for principal repayment of housing loan is Rs 1,50,000, and the deduction is clubbed with other tax saving instruments. We hope that the Government will increase the deduction under section 80C for principal repayment of housing loan from the existing limit of Rs 1,50,000; this will encourage the home buyers to expedite their buying decision.”



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RBI for more measures to improve governance at banks, NBFCs: Shaktikanta Das

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Any discussion on a bad bank must happen between the government and private players, and the RBI will consider such a proposal once presented with it, he said in response to a question at the Nani Palkhivala memorial lecture.

Integrity and quality of governance are key to good health and robustness of banks and non-banking financial companies (NBFCs), Reserve Bank of India (RBI) governor Shaktikanta Das said on Saturday, adding that the regulator plans to issue some more measures on improving governance at regulated institutions. Any discussion on a bad bank must happen between the government and private players, and the RBI will consider such a proposal once presented with it, he said in response to a question at the Nani Palkhivala memorial lecture.

Recent events in the rapidly evolving financial landscape have led to increasing scrutiny of the role of promoters, major shareholders and senior management vis-à-vis the role of the board and the RBI is constantly focused on strengthening the related regulations and deepening its supervision of financial entities, he said.

“A good governance structure will have to be supported by effective risk management, compliance functions and assurance mechanisms.”

“These constitute the first line of defence in matters relating to financial sector stability,” Das said, adding that the central bank is set to beef up the governance framework. “Some more measures on improving governance in banks and NBFCs are in the pipeline,” he said.

Das pointed to the measures the RBI has taken to strengthen its supervisory framework over regulated entities. The supervisory functions pertaining to the scheduled commercial banks (SCB), urban cooperative bank (UCB) and NBFC sectors are now integrated, with the objective of harmonising the supervisory approach. It has developed a system for early identification of vulnerabilities to facilitate timely and proactive action. It has also been deploying advances in data analytics to offsite returns so as to provide sharper and more comprehensive inputs to the onsite supervisory teams. “The thrust of the Reserve Bank’s supervision is now more on root causes of vulnerabilities rather than dealing with symptoms,” the governor said.

Going ahead, financial institutions in India have to walk a tightrope in nurturing the economic recovery within the overarching objective of preserving long-term stability of the financial system, he said. The pandemic-related shock will place greater pressure on the balance sheets of banks in terms of non-performing assets, leading to erosion of capital. Building buffers and raising capital by banks – both in the public and private sector – will be crucial not only to ensure credit flow but also to build resilience in the financial system. “Preliminary estimates suggest that potential recapitalisation requirements for meeting regulatory norms as well as for supporting growth capital may be to the extent of 150 bps (basis points) of common equity tier-I capital ratio for the banking system,” Das said.

While abundant capital inflows have been largely driven by accommodative global liquidity conditions and India’s optimistic medium-term growth outlook, domestic financial markets must remain prepared for sudden stops and reversals, should the global risk aversion factors take hold. “Under uncertain global economic environment, EMEs (emerging market economies) typically remain at the receiving end. In order to mitigate global spillovers, they have no recourse but to build their own forex reserve buffers, even though at the cost of being included in currency manipulators list or monitoring list of the US Treasury,” Das said, adding that the issue needs greater understanding on both sides so that EMEs can actively use policy tools to overcome challenges pertaining to capital flows.

The governor made a case for defining fiscal roadmaps not only in terms of quantitative parameters like fiscal balance to gross domestic product (GDP) ratio or debt to GDP ratio, but also in terms of measurable parameters relating to quality of expenditure, both for the Centre and states. While the conventional parameters of fiscal discipline will ensure medium and long-term sustainability of public finances, measurable parameters of quality of expenditure would ensure that welfarism carries significant productive outcomes and multiplier effects. Maintaining and improving the quality of expenditure would help address the objectives of fiscal sustainability while supporting growth, Das said.

On the subject of a bad bank, he said the idea has been under discussion for a very long time. “We in the RBI have provided regulatory guidelines for asset reconstruction companies and we are open to look at any proposal for setting up a bad bank. If any proposal comes, we are open to examining it and issuing regulatory guidelines, but then it’s for the government and private-sector players to really plan for it,” Das said.

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How to make a claim on your health insurance policy

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I retired from a job with the Andhra Pradesh State government. I am entitled to government health insurance cover for myself and my spouse. Last year, due to inadequacy of government payment, I purchased a Care Health Insurance policy covering both of us. Can you explain the procedure for making a claim on the policy?

G RAGHAVA REDDY

Unlike in the past , the claim-filing process in health insurance is hassle-free these days.

If it is a planned hospitalisation, insurers require the insured to intimate them in advance (at least 48 to 72 hours before admission). In case of emergency hospitalisation, intimation should be done within 24 hours of admission. You can reach the insurance company on the toll-free number available on the company website or through email (for Care Insurance it is customerfirst@careinsurance.com).

If the insured is are getting treated in a non-network hospital, you will not be able to avail of cashless service and need to to get the expenses reimbursed.

In case of a reimbursement claim, keep all your documents safe. Post- discharge, you will have to submit the documents, including doctor prescriptions, original bills and receipts, copies of all diagnostic reports and discharge papers, to the insurance company. This has to be done immediately after your discharge ; most insurers give a 15–30-day window for document submission. You also need to submit the claim form that can be downloaded from the company website; (available under the ‘claims’ section) with all the required information such as the policy number, details of the hospital and particulars of the procedure given by the hospital.

You can submit these documents online as well. Most insurers, including Care Health Insurance, have provisions for online submission. For this, first register yourself on the website with your customer ID . Insurance companies also give the option of submitting the documents directly at their office or by post. Note that after submitting all the required documents, it may take 30-40 days for claims to be settled.

If you get treated in a network hospital, you can avail of the cashless claim. On admission, you approach the insurance/TPA desk at the hospital. You will have to show your ID card (given by the insurer at the time of issuance of the policy). After the verification, you will get the ‘pre-authorisation’ form (can also be downloaded from the insurer’s website).

You fill the personal details and submit the form. Other details will be filled by the insurance desk and will be sent to the insurance company. After the form is reviewed, the insurer will provide guarantee to payment of the bill amount, subject to the sum insured.

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How important the salary certificate is for filing I-T return

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I superannuated in May 2018 from BEML, a Bengaluru-based PSU on attaining the age of 60. I retired on pre-revised wages, though the wage was due for revision from January 2017. The wage revision was settled in during March 2019 and the arrears were paid for eligible retirees in November 2019. The payment does not figure in my Form 26AS. I need to file my returns for the AY 2020-21, but in the absence of Form 10E for claiming rebate on arrears, I am unable to proceed with filing returns. I have been following up with the company for the relevant form but have not made much progress. Can you please advise me on how to go about filing my returns? Is it possible to claim rebate in the absence of the statement and relevant form?

Suresh GS

I understand that you have received payment of arrear salary from your erstwhile employer during FY 2019-20. In such cases, if you are taxed at a higher rate, other that the rate at which you would have been otherwise taxed (in case such incomes was paid in earlier years), a tax rebate as per provisions of section 89 of the I-T Act, 1961 is available. For claiming such rebate, form 10E is required to be filed online in your income-tax account after which the return of income would be filed.

Hence, you should ask for the annual salary certificate, i.e,. Form 16 (Part A & Part B) and Form 12BA (if tax has been deducted)/salary certificate (if no tax has been deducted) from your erstwhile employer, along with a computation of salary income having details of arrear salary for the previous respective years. This would help you in filing of Form 10E and your tax return. In the absence of these details, you may find it difficult to complete Form10E and subsequent tax return.

The writer is a practising chartered accountant.

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What you should know about EPFO pension

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The Employee Pension Scheme (EPS) hogged headlines recently. Reports suggested that the Centre wants the EPS to be moved from a defined benefit scheme to be a defined contribution scheme.

If this proposal sees the light of day, it may change the amount of pension you will receive from the government under the EPS scheme. Being a defined benefit plan, EPS provides a specified pension amount to the member based on employees’ salary, number of years of service and the age of retirement.

But in a defined contribution plan, basis which the National Pension Scheme operates, the pension amount depends on the amount of contribution.

NPS is a voluntary contribution pension scheme while EPS is mandatory for eligible members. Here, we look at some of the important aspects of the current Employees’ Pension Scheme.

Eligibility

All employees in India who are enrolled with the Employees Provident Fund Organisation (EPFO) automatically become members of EPS as well.

But in a major amendment to the EPS in September 2014, the eligibility to the scheme was limited only to those EPFO members whose basic pay plus DA (dearness allowance) is up to ₹15,000 per month. Thus, if you have joined the workforce on or after September 1, 2014, you are likely be part of only the provident fund scheme and not the pension scheme.

Contribution

When you become a member of EPFO, your monthly salary is credited only after the deduction of 12 per cent of your basic plus DA towards the provident fund. The employer also makes a matching contribution of 12 per cent from their pocket towards your retirement corpus.

Out of the employer’s contribution of 12 per cent, 8.33 per cent goes into the EPS fund and only the balance 3.67 per cent goes towards provident fund accumulation. The central Government also contributes 1.16 per cent of the pay (basic+DA) of the employee towards the EPS.

However, there is a cap on EPS contribution. Where the pay of the member exceeds ₹15,000 per month, the maximum pay on which the contribution is payable by the employer and the Centre is limited to ₹15,000 per month (₹6,500 until September 1, 2014). Thus, here,maximum employer contribution to the EPS account on behalf of a member per month will not exceed ₹1,250 per month (8.33 per cent of ₹15,000).

Higher contribution beyond the ceiling (₹6,500/₹15,000) was also allowed at the option of employer and employee, subject to conditions, but only for existing members as on September 1, 2014.

Pension payout

A member will be entitled to monthly pension payout until death if she has rendered eligible service of 10 years or more and retires on attaining the age of 58 years.

The monthly pension amount will be calculated based on salary and the number of years of service using the formula (pensionable salary*pensionable service/70).

The pensionable salary will be the average monthly pay drawn during the span of 60 months preceding the date of exit from the membership of the Pension Fund (this was at 12 months before the September 2014 amendment). The pensionable salary is, however, subject to a ₹15,000 per month cap. For example, if the average pay drawn during the last sixty months before exit is ₹50,000 and was in service for about 30 years, the monthly pension amount works out to about ₹6,429 (₹15,000*30/70).

In case of existing members as on September 1, 2014, who had been contributing on salary exceeding the wage ceiling (₹ 6,500/15,000), pensionable salary will be based on such higher salary. A member is also allowed to draw an early pension from a date earlier than 58 years of age but not earlier than 50 years of age. In such cases, reduced amount of pension will be paid.

Note that, irrespective of whether an employee has serviced for eligible number of years or not, the member will be eligible for some pension benefit in case of permanent and total disablement during the service.

In case of death of the member, where at least one month’s contribution has been paid into the Employees’ Pension Fund, the family (including widow and children) will obtain the pension benefits, subject to conditions.

Matter sub judice

Clearly, the 2014 amendments to EPS Scheme lowers the number of people that can be eligible for EPS benefits (due to wage limit of ₹15,000) as well as the amount of monthly pension (as, now the pensionable salary of average of last 60 months as against 12 months earlier).

The Kerala High Court, in 2018, set aside the amendments with respect to EPS in 2014. The EPFO filed a special leave petition against this in the Supreme Court, which was dismissed by the apex court in 2019. A review petition against this order of the Supreme Court has been filed by the EPFO and SC’s judgement on the same is awaited.

Meanwhile, many corporate firms seem to be following the EPS scheme as amended in September, 2014 for now.

Further, issues related to benefit of higher pension based on contributions on actual salary for employees of exempted establishments, too, awaits judgement from the SC.

EPFO, in May 2017, created two classes – exempted and non-exempt establishment and denied higher pension based on contributions on actual salary to employees of latter.

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How to get your insurance complaints addressed

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Insurance products, be it life, health or motor-related can be somewhat difficult to understand in terms of coverage, exclusions and other aspects such as sub-limits, co-payments and no claim bonus. While the awareness about insurance products is slowly improving, it is still low compared to the same in developed nations. This leaves room for misrepresentation, mis-selling and sometimes even fraud.

For instance, recently some “policyholders” of Bajaj Allianz General Insurance company tried to make a claim on their motor insurance policy. But the insurer didn’t settle their claims as the policies held by them were fake. Though the insurance company claims to have taken the necessary steps against the fraudsters, it was the “policyholders” who were left in the lurch. While these individuals will have to fight it out in court, others who hold a genuine policy have recourse in case of any issues.

So, if you are an aggrieved policyholder, here is how you can file a complaint.

First step

If you have any issue or a complaint against an insurer, the first step is to inform the respective insurance company’s grievance redressal cell. All life and general insurance companies provide details contact personnel (phone number and email address) on their website and the policy document. You can reach out to insurers through their digital platforms as well. With offices/branches of insurers temporarily were closed or working at minimum capacity, post pandemic , insurance companies have taken initiatives to encourage policyholders to access their services through digital touch points such as WhatsApp, mobile apps, chatbots and e-mails.

Alternatively, you can directly connect with the insurer and raise a complaint by calling the toll-free number provided on the website and in the policy document.

Insurers update you on the status of the complaint through SMS or email.

Time limit

The insurer should acknowledge the complaint within three days and provide a solution within 15 days or as per the time limit set by the insurance regulator, IRDAI. The regulator has defined the maximum turnaround time (TAT: time taken for completing a task or process) for different services provided by the insurers. For instance, the maximum TAT for life insurers when it comes to settlement of maturity claim or survival benefit or penal interest not paid is 15 days. Similarly, TAT is 30 days for settlement of death claims without investigation requirements and is six months in cases with investigation. You can get the details on TAT from the websites of the respective insurers or IRDAI.

A few insurers such as Digit Insurance provide detailed TAT for each of their services. For premium-related issues, the maximum TAT is 10 days. These issues include premium paid but the receipt not received by the policyholder or premium charged wrongly by the insurer.

If your issue is unresolved at these levels, you can write to the grievance redressal officer of the respective insurer. Again, the contact details (email/phone) will be available in your policy document and on the insurer’s website.

Escalation

If your complaint is still not addressed within the time limit or you are not satisfied with the resolution offered, you can contact IRDAI directly. You can register your complaint in one of the three ways.

First, call the toll free number (details available on the IRDAI website as well on the insurers’ websites). Two, send an e-mail along with the resolution offered by the insurer, if any, along with your policy document or policy number and other relevant supporting documents, if any. Three, you can register your complaint online and keep track of it using Integrated Grievance Management System (IGMS). Alternatively, you can write to the regulator’s grievance cell along with the requisite documents. For this, you need to fill the complaint registration form (available online on IRDAI’s website) and post the same to the Consumer Affairs Department- Grievance Redressal Cell, IRDAI.

Beyond this, you have the right to lodge your complaint with the insurance ombudsman or a consumer/civil court. The details of the insurance ombudsman are available on the respective insurers’ websites and your policy document. You can approach the office nearest to you.

If both parties agree for mediation, the ombudsman gives a recommendation within one month from the date of complaint. Otherwise, the ombudsman passes judgement within three months from the date of receipt of all requirements from the complainant. Keep in mind that you must approach the ombudsman within a month from the date of sending a written complaint to the insurer (to which there is no reply) or within one year from rejection by the insurer.

However, before you escalate the matter with IRDAI or the ombudsman, you must first write to your insurer.

Do note that, you don’t have to pay a fee for making a complaint.

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How cashless garage facility benefits you

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Two neighbours’ daily routine of watering plants leads to an interesting conversation.

Bindu: I see you have a lot of new pots.

Sindu: Yes. I wanted to grow some vegetables at home.

Bindu: Quite an investment, I would say. How did you get all the seeds and pots on the same day?

Sindu: Yes. But the pot sellers had a tie-up with the seed vendors. So, I got seeds with all the pots I purchased. I also got a few seeds for free.

Bindu: Good for you. This is similar to the cashless benefit in insurance.

Sindu: How so?

Bindu: Well, take motor insurance for instance. You get cashless garage service for the premium you pay. You can get the insured vehicle repaired at the issuer’s network garages without having to pay for it. Network garages are those that the insurance companies have tied up with to provide cashless services to their policyholders. You can check the list of garages with their name, address and contact number in your policy document or on the insurer’s website.

Sindu: How does this help? We get garage services anyway from the car company or the authorised dealer.

Bindu: Yes. But when your vehicle is damaged due to an accident, you can approach any of the network garages for cashless service. That is, once the repair work is done, the garage service provider will issue an invoice to the insurer directly who will bear the expense. The authorised dealer, you mentioned, could very well be part of your insurer’s network or not.

Sindu: That’s a great service. So, how do I go about it if my vehicle is damaged?

Bindu: The first step is to inform the insurer about the damage. Post the intimation, the insurer inspects the vehicle. Then a request for cashless service is initiated. Once the request is approved, the insurer takes care of all the expenses on repairing your vehicle. Some insurers also offer to tow your vehicle to the network garages!

Sindu: This is a huge relief!

Bindu: But remember, the insurance company will pay only for those damages that are covered under the policy. If parts of the car, such as the interiors including speakers and radio which are usually beyond the policy coverage, suffer damage, then you will have to bear the expense.

Sindu: Any downsides?

Bindu: Cashless garage is a huge advantage, especially when repair work has to be done and you are short of funds. However, this service may not be available across all cities or regions. Also, if you go to a garage which has no tie-up with your insurer, then you will have to pay for the repair work and get reimbursed from your insurer.

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Readers’ Feedback – The Hindu BusinessLine

Personal Finance

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I have been a regular reader of BusinessLine almost from its first edition way back in 1994. I was actually very disappointed when the Sunday edition was discontinued a few years ago. It’s reintroduction is really a welcome step.

––Varadarajan MN, Hosur

It’s good to read BL on Sundays. Would request for more articles for those who do not know much about investing and more importantly about personal finance. Thank you! Keep up the good work.

––Anonymous reader (through our WhatsApp number/Scan code

for feedback)

BusinessLine Research Bureau says: Thank you for your feedback. We have two pages of personal finance — ‘Your Money’ and ‘Safe Investing’ — every Sunday. We do write on basics from time to time across these pages.

We also have a weekly feature for new entrants in the ’Simply Put’ column in the ‘Safe Investing’ page.

You must have an app. Where are your podcasts?

––Hitesh D Gajaria

BLRB says: We do have an app that can be downloaded from app stores. You can access our podcasts through our website, Spotify or Google Podcasts.

I’m a new entrant to the BL readers’ club. I read BL Portfolio and I’m in love with it. Excellent contribution, keep improving, and try to make it less technical for ordinary investors.

––Uday Tendulkar, Kandivali, Mumbai

BLRB says: Welcome to BL. Thanks for your feedback and suggestion.

I recently started reading Business Line. The Sunday edition is excellent. I am impressed with Portfolio Star Track MF Ratings. I have a suggestion: please print the MF Ratings pages back-to-back, so that the same can be preserved as a single page for some time, for analysis and for helping first-time investors.

––Srinivas K

BLRB says: Thank you. We will surely consider your suggestion.

Your stock recommendations are the best.

––Kishan

Your business and market content is very insightful. Please publish an article giving guidelines for new retail investors covering 1) the sign-up process 2) mentors 3) recommended literature to follow 4) market leaders’ opinion.

––Santhosh Subramaniam, Coonoor

This refers to the ‘New year resolutions for your finances’ story published on January 3. Making our will, getting our family sufficiently insured and re-balancing our asset allocation in the times of the stock market touching new heights should be the top-most priorities for any individual investor.

If this pandemic has taught us the best financial lesson, it is to spend judiciously and save for times like these.

—Bal Govind

This is in the context of the article, ‘Do it yourself: Why PSU stocks can be a good bet’ that appeared on BusinessLine on January 3. Useful information. It was very helpful to pick PSU stocks. Appreciate it.

––Seetarama Rao

This is in the context of the article, ‘Simply put: Indexation benefit’ that appeared on BusinessLine on January 10. How immaculately the concept of ‘iIndexation’ has been explained by Maulik Madhu. The column ‘Simply Put’ is a great idea and definitely works towards its core objective of creating financial awareness.

––Suheil Merchant

This is in the context of the article, ‘Investica app review: For both novices and experts’ that appeared on BusinessLine on January 10. I think this is the second in this series. This is a nice start. Can you do some study on Fincart and INDmoney in the next article?

––Anoop Singh

BLRB says: Thank you. We have also reviewed Groww, Paytm Money, myCAMS and MF Utilities in this series. We will also look into other apps.

This is in the context of the article, ‘How to choose auto component stocks’ that appeared on BL on January 10. Super analysis.

––Samrat Shah

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