Top 6 Best NRI Investment Options To Consider In 2021

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Equity Mutual Funds For NRI

Mutual funds that invest in a portfolio of stocks spread out the risk of investing in equities. All mutual fund institutions enable NRIs to invest in their schemes, but according to the restrictions of the Foreign Account Tax Compliance Act, investors living in the United States and Canada must go through more paperwork (FATCA).

NRIs can participate directly in the Indian stock market through the RBI’s Portfolio Investment Scheme (PINS). To trade in the Indian stock market, NRIs are required to have an NRE/NRO bank account, a Demat account, and a trading account.

The tax rate is 15% if the investment is sold within one year of purchase. There is a 10% tax if the investment is sold after a year.

NRIs can open a trading account, but they are restricted to only selling stocks that have already been supplied to them.

Fixed Deposits For NRI

Fixed Deposits For NRI

As an NRI, you can create a Non-Resident External (NRE), Non-Resident Ordinary (NRO), or Foreign Currency Non-Resident (FCNR) account with any of India’s leading banks or non-banking financial firms (NBFCs) and start investing in fixed deposits. The interest rate you receive will be determined by the bank you choose, the amount you deposit, and the term of the FD.

Interest earned on NRE and FCNR accounts is tax-free in India and entirely repatriable, however it is subject to exchange rate risk. On the other hand, NRO Fixed Deposits can be used to collect interest on money earned in India over time.

NPS for NRI

NPS for NRI

NRIs can open accounts in the National Pension Scheme. If you have a PAN card or an Aadhaar card, you can now register an NPS account as well. It is possible to use NRE or NRO accounts.

You can open an NPS account with a bank in India called the Point of Presence if you are an NRI between the ages of 18 and 60. You have control over how your funds are divided throughout asset types. If you don’t specify otherwise, your assets will be distributed automatically between asset classes based on your age.

NRI can open an NPS account at the same bank as your NRO or NRE account. In addition, the National Pension System will pay the pension in Indian Rupees.

Real Estate

Real Estate

Over the last decade, real estate prices in major Indian cities such as Delhi, Mumbai, Bengaluru, and Pune have surged. Many non-resident Indians are buying homes in India to rent out. There are numerous possibilities available, including developed plots, villas, and flats, among others.

Before opting to invest in Indian real estate, you should assess your needs and risk profile.

Gold Investments For NRI

Gold Investments For NRI

Another investment option in India is gold. Given the rate of increase in prices over time, it is a fantastic decision. Physical gold, gold exchange-traded funds (ETFs), gold bonds, and other choices are all available.

In times of economic uncertainty, gold strengthens and gold prices rise. The expansion of the epidemic and a drop in economic growth caused gold prices to surge last year, as we saw.

NRIs from all over the world can invest in various gold options and get long-term benefits while diversifying their portfolio.

Bonds/NCDs

Bonds/NCDs

Bonds- This is yet another great investment opportunity for NRIs. This open-ended investment pooled funds from a large number of people to purchase securities. This sort of investment entails considerable risk, but it typically yields higher returns than other options.

NCDs are a good alternative to mutual funds and the stock market if you want to diversify your investment portfolio. These long-term investments are similar to fixed deposits, but they pay out more money. NRE and NRO accounts can be used to make such investments.

Conclusion

Conclusion

Any investment selection should take into account the investor’s needs and objectives. The investment should fit within the individual’s overall financial plan. Long-term investing has various benefits, and even little amounts spent on a regular basis can build into a sizable portfolio over time.



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HDFC Ltd Cuts Interest Rates On Home Loans: Here’s What SBI Offers

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Investment

oi-Vipul Das

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HDFC Ltd has unveiled a huge deal for borrowers who wish to buy their dream house this holiday season. As part of its Blockbuster Festive Offer, the company has announced cheap interest rates starting at 6.70 percent per annum, as well as reduced processing fees totaling Rs 3000 including taxes. The new interest rates are applicable on Housing Loans and Non-Housing Loans and for those who have Credit Scores of over 800.

HDFC Ltd Cuts Interest Rates On Home Loans: Here’s What SBI Offers

“Under this special offer, customers can avail of HDFC Home Loan starting at 6.70 per cent effective 20th September 2021” HDFC Ltd has mentioned in its press release. Apart from the lower interest rates, the mortgage lender is also allowed to choose a longer tenure of up to 30 years with a digital loan process. This offering is valid till October 31, 2021 according to the announcement of the mortgage lender.

On the other side, some leading banks have also lowered their interest rates on home loans for eligible customers as a part of the festive season. Kotak Mahindra Bank has recently said via Twitter handle that “Kotak Home Loans starting at surprisingly low interest rates of 6.5% p.a Now get your dream home in reality. Hurry Offer valid from 10-Sep to 8-Nov-21.” This low-interest rate of the bank is applicable for all loan amounts and also for new and balance transfer loan types.

Recently Bank of Baroda (BoB) has also announced festive offers with a concession of 0.25% in the existing applicable rate of interest for Baroda Home Loans, Baroda Home Loan Top up and Baroda Auto Loans. After the announcement, the bank is now offering an interest rate starting from 6.75% on home loans with zero processing fees. According to the bank, the offer is valid till 31st December 2021.

The State Bank of India (SBI), our country’s largest public sector bank, is providing festive season home loans at 6.70 percent, regardless of the loan amount. While HDFC Bank, India’s largest private sector bank, is now giving home loan interest rates as low as 6.75 percent per annum. SBI, Punjab National Bank (PNB), Bank of Baroda (BoB), and private lender Kotak Mahindra Bank launched a plethora of home loan deals this month, which can be found here.



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Banks face significant margin pressure despite surfeit of liquidity

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Banks are facing significant margin pressures despite surfeit of liquidity in the banking system, according to the State Bank of India’s economic research report Ecowrap.

A back of envelope estimate by SBI’s economic research department suggests that the core funding cost of the banking system that includes cost of deposits, negative carry on Statutory Liquidity Ration (SLR) and Cash Reserve Ratio (CRR) and Return on Assets is currently at 6 per cent, while the reverse repo rate is at 3.35 per cent.

Additionally, if the cost of provisions is added to the core funding cost, the total cost comes to around 12 per cent, the report said.

Also see: FinMin to soon issue circular on intermediary services under GST

“Clearly, banks are facing significant margin pressures. This apart, market sources point out that risk premia over and above core funding cost are not fairly acknowledging the inherent credit risk,” said Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.

The report said the conundrum of weak credit demand and excess liquidity is evident from the average reverse repo at ₹7 lakh crore since April and Government of India cash balances with RBI at ₹3.4 lakh crore.

Is credit risk adequately reflected in pricing?

The report cited the example of 15 years loans, which are being priced at even lower than 6 per cent, linking with repo / treasury bill rates. It emphasised that 10-year Government Security (G-Sec) is currently trading at 6.2 per cent and by the current pricing trends this could even gravitate towards 6 per cent again.

“This anomaly not only negates the concept of tenor premium but may create a material risk with regard to sustainability of such rates in long term, on which borrowers and banks are basing their financial calculations.

“The only good thing is that such pricing war is mostly restricted to AAA borrowers,” Ghosh said.

According to the report, three year term loans are being quoted at close to 4 per cent repo rate and seven year term loans for borrowers below AAA are also quoting a risk premium of 15-20 basis points over the 10 year rates. Working Capital Loans (WCL) are currently being quoted at a notch above reverse repo rate at 3.35 per cent.

Referring to RBI proposing the concept of normally permitted lending limit (NPLL) for specified borrowers, which is meant to nudge them to move towards corporate bonds market, Ghosh felt that this may lose its importance.

Also see: Hiring activity in August up 14% y-o-y: Report

In the current situation, corporate bond rate and bank lending rate are showing huge differential, he said.

CP market: significant churn

Ghosh observed that the commercial paper (CP) market is also witnessing significant churn with banks now almost absent.

“Non-Banking participants like mutual funds who do not have access to RBI Reverse Repo window are creating pricing pressure in CP market as they are sometimes quoting below RBI reverse repo rate.

“In fact, the CP market reflects the huge pricing gap between better and lower rated borrowers,” he said.

Asset Liability mismatch risk

The report underscored that the industry is replacing its long-term debts by very low-priced CP/working capital demand loan (ECDL) and this will obviously act as an enabler once the investment cycle revives. However there is the risk of an asset liability mismatch if the liquidity is withdrawn quickly.

Ghosh said, “As of now, the inflation numbers may not warrant such a decision from RBI, but if core inflation persists in the current range of 6 per cent or above, that might act as a hindrance to continued liquidity abundance.”

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Bitcoin attempts recovery as Evergrande-led selloff eases, BFSI News, ET BFSI

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Cryptocurrency prices bounced off 1-1/2 month lows on Tuesday as a heavy selloff overnight linked to concerns about a possible loan default by property developer China Evergrande eased slightly, but investors braced for more volatility.

Bitcoin, the biggest and the best known cryptocurrency, traded around $43,000, recovering from a fall to $40,192 earlier in the session. It hit a four-month high of $52,000 on Sept 6.

Smaller rival ether, the coin linked to the Ethereum blockchain, rose 1% to $3,012 after falling below $3,000 for the first time since early August.

Global markets started the week on a turbulent note after fears that Evergrande’s troubles could lead to a fallout for the Chinese and global economies prompted a selloff in riskier assets.

“We can’t take a very positive view just as yet until we get through the next few days,” said Matthew Dibb, chief operating officer at crypto index fund provider Singapore-based Stack Funds.

“This is purely sentiment driven right now, and it’s actually been off very low liquidity,” he said, adding that it would be better to wait on the sidelines as crypto markets will continue to be affected by the contagion.

The drop in cryptocurrencies comes at a time when institutional interest in the space has risen and made it more mainstream, with many investment banks taking a more bullish stance.



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Retail depositors earning negative returns; relook taxation on interest: SBI economists

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In a note, which pegged the overall retail deposits in the system at Rs 102 lakh crore, the economists led by Soumya Kanti Ghosh said: "If not for all the depositors, the taxation review should be carried out for at least the deposits made by senior citizens who depend on the interest for their daily needs."

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Reserve Bank of India – Press Releases

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Sr. No. State/UT Notified Amount
(₹ Cr)		 Amount Accepted
(₹ Cr) 		Cut off Price (₹) /
Yield (%) 		Tenure
(Yrs)
1 Andhra Pradesh 500 500 6.86 14
500 500 6.87 19
2 Kerala 500 500 6.86 14
3 Madhya Pradesh 2000 2000 100.42/6.7911 Re-issue of 6.85% Madhya Pradesh SDL 2031 Issued on September 15, 2021
4 Maharashtra 2500 2500 100.05/6.7710 Re-issue of 6.78% Maharashtra SDL 2031 Issued on May 25, 2021
5 Nagaland 150 150 6.80 10
6 Rajasthan 1000 1000 6.77 10
500 500 6.86 15
7 Sikkim 251 251 6.80 10
8 Tamil Nadu 1000 1000 6.76 10
  TOTAL 8901 8901    

Ajit Prasad
Director   

Press Release: 2021-2022/896

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Credit card war hots up ahead of festive season; cos announce a slew of tie-ups, BFSI News, ET BFSI

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Consumers are set to get a flurry of new credit card offers as banks are stepping up on customer acquisitions. Banks are gearing up to grab a bigger share of the market which is set to grow as the economy opens up.

New card additions were the highest for ICICI at 655,000 during this fiscal while added 198,000 cards being the highest in the past 16 months.

HDFC Bank

HDFC Bank, on which RBI recently lifted a ban of issuing new credit cards, has announced a tie-up with leading payments company Paytm to start selling co-branded plastics before the onset of the festive season. The credit cards will be powered by Visa and will include offerings targeted at millennials, business owners and merchants, an official statement said.

Paytm has a reach of over 330 million consumers and 21 million merchants, while HDFC Bank has over 5 million debit, credit and prepaid cards, and serves 2 million merchants through its offerings.

HDFC Bank, the largest private-sector bank which also leads the credit card segment, was banned from issuing new credit cards for over eight months as a penalty for frequent outages. After the lifting of the ban, it outlined aggressive plans to regain lost market share in up to a year.

The bank had said that it will focus on distribution partnerships to achieve its target, under which it envisages ramping up new credit card sales to 5 lakh a month by end of the fiscal from 3 lakh in November 2021.

HDFC Bank and Paytm had last month announced a tie-up on the payments side. Paytm already has a tie-up with foreign lender Citi under which co-branded credit cards are issued. Citi is looking to exit retail banking activities in the country.

The launch of the HDFC Bank-Paytm co-branded cards is slated for next month, ahead of the festive season which typically sees a spurt in spends, the statement said, adding a full suite of products will be available by December.

Yes Bank ties up with Visa

Yes Bank has tied up with Visa to issue credit cards to its customers on the payment platform, which includes a suite of nine credit card variants. The Yes Bank card issuances were hit after RBI had banned Mastercard from issuing cards.

“The transition has been achieved within a record time of less than 60 days, ensuring ease for customers across segments,” the bank said.

Yes Bank and RBL Bank were hit the most by the Mastercard ban as their entire card network was on it. RBL Bank had announced a tie-up with Visa the day after the curbs on Mastercard were announced and resumed issuing cards from September 15. Yes Bank’s Visa credit cards, announced today, will service all segments–consumer cards, business cards, and corporate cards across YES First, YES Premia and YES Prosperity.

AU Small Finance Bank

AU Small Finance Bank (SFB) has issued over 40,000 credit cards since its launch a few months back, and more than half of them are first time users. The Jaipur based lender said it is the first SFB to enter semi-urban and rural areas with its own credit cards. It also offers a special Altura plus credit card to empower women to experience a limitless living.

In future, the bank is also working on bringing out its limited-edition cards, featuring the bank’s brand ambassadors Aamir Khan and Kiara Advani.

“The forthcoming festive season will lend further support to the picked-up momentum in the spends and new customers sourcing. However, a possible Covid 3.0 remains a key risk. We continue to believe that Citi Bank’s exit from the credit cards business along with the domestic corporate loan recovery cycle yet to pick up, provides good growth opportunities for the credit cards business, supported by improving macro-conditions,’ Axis Securities said in a note.



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3 Best ELSS Funds Ranked 1 By CRISIL With 1 Year Returns Up To 79%

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Quant Tax Plan Direct Growth

This fund has been in existence for the last 8 years and the 1-year returns of the Quant Tax Plan Direct-Growth are 79.62 percent. It has returned an average of 21.94 percent every year since its inception. The fund has a lower expense ratio of 0.50% and SIP in this fund can be started with a minimum contribution of Rs 500. The fund has equity sector allocation across Financial, Construction, FMCG, Metals, Energy sectors.

Reliance Industries Ltd., Vedanta Ltd., State Bank of India, ITC Ltd., and HDFC Bank Ltd. are the fund’s top five holdings. The fund’s NAV as of September 20, 2021 is Rs 220.17. The fund has Rs 368.44 crore in assets under management (AUM). This fund has no exit load, and investments up to Rs 1,5 lakh are tax-free under section 80C of the Income Tax Act, with returns are taxable at a rate of 10%.

BOI Axa Tax Advantage Fund Direct Growth

BOI Axa Tax Advantage Fund Direct Growth

This ELSS mutual fund scheme has been in existence for the past 8 years and the last 1 year’s BOI AXA Tax Advantage Direct-Growth returns reached 64.13 percent. It has returned an average of 19.70 percent every year since its inception. The fund levies a 1.66 percent expense ratio, which is more than most other funds in the same category. The Financial, Technology, Chemicals, Healthcare, and Services sectors account for the majority of the fund’s holdings.

ICICI Bank Ltd., HDFC Bank Ltd., Infosys Ltd., Divi’s Laboratories Ltd., and Bajaj Finance Ltd. are the fund’s top five holdings. With a minimum contribution of Rs 500, you may start a SIP in this fund. As of September 20, 2021, the fund’s NAV is Rs 112.77 and the fund’s asset under management (AUM) is Rs 512.07 crore. There is no exit load on this fund.

IDFC Tax Advantage Direct Plan Growth

IDFC Tax Advantage Direct Plan Growth

This ELSS fund was launched by the fund house IDFC Mutual Fund, and thus has been in existence since January 2013. The fund is a medium-sized fund in its category, with an expense ratio of 0.85 percent, which is lower than the expense ratio charged by most other ELSS funds. According to Value Research, IDFC Tax Advantage (ELSS) Direct Plan-Growth returns for the past year reached 68.05 percent, with an average yearly return of 18.86 percent since its debut.

The fund has its equity exposure across Financial, Technology, Automobile, Construction, FMCG sectors. IDFC Tax Advantage Direct Plan Growth fund’s top 5 holdings are in ICICI Bank Ltd., Infosys Ltd., State Bank of India, HDFC Bank Ltd., Deepak Nitrite Ltd.. SIP in this fund can be started from Rs 500 and NAV of the fund as of 20th September is Rs 101.00 and asset under management (AUM) of the fund is Rs 3,338.88 Cr. The fund has no exit load but it charges a stamp duty fee of 0.005%.

Best Performing ELSS Funds

Best Performing ELSS Funds

Here are the best ELSS funds to invest in 2021 based on past performance and ratings from different agencies.

Funds 1-month returns 6-month returns 1-year returns 3-year returns 5-year returns Rating by CRISIL Rating by Value Research Rating by Morningstar
Quant Tax Plan Direct Growth 6.36% 34.06% 79.62% 32.06% 24.00% 1 5 5
BOI Axa Tax Advantage Fund Direct Growth 5.88% 29.86% 64.13% 25.42% 21.41% 1 4 5
IDFC Tax Advantage Direct Plan Growth 5.15% 23.88% 68.05% 18.65% 18.16% 1 4 4

Disclaimer

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in



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Bank lending hit as corporates head to bond St, fintech firms poach retail borrowers, BFSI News, ET BFSI

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Overall bank lending could drop during this fiscal as corporate loan demand slumps and other sources of borrowings emerge.

Bank credit flow during April to August has shrunk over the same period a year ago, according to data from the Reserve Bank of India. This is despite the private-sector lenders such as HDFC Bank and ICICI Bank reporting double-digit growth in lending in the first quarter.

The overall fund flow into the economy grew by 10% in FY21 despite the pandemic. However, the incremental bank lending shrank 1.6% in FY21, while non-bank sources grew 30%.

Corporates reluctant

Banks are hoping for a lending spurt with the revival of capital expenditure, but it remains doubtful due to uncertainty over Covid.

Also, corporates are looking at cheaper avenues for funds. They raised Rs 1.8 lakh crore from the bond market this fiscal so far. Foreign direct investment and ECB have been also been strong, which has been bad news for banks. The buoyant equities market has seen corporates raising over Rs 1 lakh crore from the avenue during this fiscal till August.

In July

The total outstanding loans to large industries by the banking sector has shrunk for the 11th straight month in July 2021 as companies continue to deleverage and shift to cheaper options such as bonds. Most of the bank credit is driven by the retail and agri segments as sanctioned limits of corporates remain unutilised to the extent of 25%. The credit to large industries shrank 2.9% in July.

The credit growth in the last two months is being led by is led by MSMEs, agriculture and retail as corporate lending stays tepid.

PSU banks hit

The deleveraging has led to a drop in corporate loan demand for banks, especially PSU ones.

The domestic corporate loans by the State Bank of India fell 2.23 per cent to Rs 7,90,494 crore in the quarter ended June 30, 2021, compared to Rs 8,09,322 crore in the same quarter last year. In the first quarter of FY21, SBI reported 3.41 per cent growth in corporate advances.

Union Bank of India‘s share of industry exposure in domestic advances dropped to 38.12 per cent at Rs 2,40,237 crore from 39.4 per cent at Rs 2,47,986 crore in the same quarter a year ago. Corporate loans dropped 3% at Indian Bank during the last quarter. At PNB, corporate loans fell 0.57 per cent at Rs 3,264,66 crore in June quarter 2021 compared to Rs 3,28,350 crore a year ago.

Retail front

Banks, which have been relying on the retail sector, are facing competition. Non-banking financial companies that were reeling after the collapse of IL&FS have bounced back and emerged out of the pandemic relatively less hurt. Banks are facing competition from fintech firms, which have made borrowing a seamlessly easy experience.

with the advent of account aggregators, transaction details of borrowers can be open to lender, which may lead to poaching of customers.



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