Ab Kona Kona Kotak

by Vinaya HS on August 31, 2015

in Finance

The following post is a sponsored post.

On April 1st 2015, ING Vysya Bank merged with Kotak Mahindra Bank to be now known as Kotak Mahindra Bank. This merger will bring a lot of benefits to the customers of both the financial institutions by providing them with more options for convenience banking.

ING Vysya is a firmly established institution functioning in the Indian banking sector for over 80 years now. Kotak Mahindra Bank, on the other hand, has been offering financial services for over 3 decades serving all the needs of the customers under one umbrella. The merger of such two financial institutions is a remarkable moment in the history of the Indian financial sector. This merging of the complementary businesses will serve the customers in a better way by providing wider ATM network coverage.

Better ATM Networks

The merger will give Kotak Mahindra Bank a larger national footprint in the financial sector. The merger is aimed at providing seamless banking systems to its customers by providing them with better ATM networks and other facilities.

ING Vysya customers can now enjoy an interest of 6% per annum on a balance of over one lakh in savings accounts. Other than that, a wider ATM network lets the customers access their bank account funds conveniently. One can now perform the following activities at any Kotak Mahindra ATM:

  • Withdraw cash
  • Account balance enquiry and other account information
  • Initiate cheque book requests
  • Cheque status enquiry
  • Statements requests
  • 24-hour access to funds transfer between your own Kotak accounts
  • Facility to change ATM pin

Change in Management Does not Mean Change in ANY Existing Services

Customers can be rest assured that there will be no change in their account numbers or the services that they have opted for. The customers can still use their existing internet banking services and can continue with the same cheque books and passbooks. The same will be the case for any fee structure/charges and features of any service you may have opted for.

If the customers still have any queries regarding any services offered by the bank, they can visit www.kotak.com or nearest branch.

Kotak Mahindra Bank is constantly working hard to avoid or minimize any kind of glitches that can be caused in this transition period. As for customer satisfaction, the bank ensures that the merging of these two dynamic financial institutions puts up a new and better path to success and growth. Kotak Bank aims to attain new levels of excellence with this merger.

Author Bio:

Rachita Kotian is an independent blogger and writing has been her passion for a long time. A literature major, she loves exploring the world of health, lifestyle, travel and finance. When she’s not writing, she’s most likely listening to music, cooking, surfing the web, or catching up on the latest flick.


Given life’s vagaries each of us would like to save and invest our hard-earned money to tide us through the rainy days, and the occasional black swan, when they come. Where we err though is to jump headlong into “investments” just because we need to be seen with the “crowd.” Someone in the next cubicle made a neat killing on that small-cap stock…so investing in small-cap stocks is the way to go. Let me invest all of my money there. Wrong! Did you stop for a minute and think about any of the following: “Do I have a BIG fat emergency fund in place?”, “Have I planned for those annual expenses (they are investments, vehicle insurance, gym fees, et al.) that seem to popup each month?”, “Have I planned for all those expenditures that I know will happen within the next 6-months?”.

Investing before saving is akin to building the first-floor of a house before the foundation and ground-floor. Looks nifty but is a house of cards eagerly waiting to collapse at the first wind. You should never plan your finances to be this house of cards. Remember this mantra: Savings are for short-term goals. Investments are for medium and long-term goals. Savings always come before investments. I like to think of anything less than a year away to be short-term, between a year to three years away to be medium-term, and more than three years away to be long-term. Get this simple formula right and you’re well set for a bright and prosperous financial future.

With a myriad of savings and investments options available at your fingertips today how do you decide where to save and where to invest. Short-term goals require instant access to your money and full safety of principal for which bank savings accounts and liquid mutual funds are perfect options. Medium-term goals require safety of principal and a small amount of growth for which money-back life insurance policies, recurring deposits, fixed deposits, and debt mutual funds are typical choices and some of these choices such as insurance are tax effective too. Long-term goals require a large amount of growth for which, endowment and unit-linked (equity-oriented) life insurance policies, and equity mutual funds are great choices.

Insurance deserves a special mention. To those of us who are too busy to manage our finances insurance in various forms serves as the perfect vehicle for meeting our savings obligations and investments goals. From money-back insurance policies that return cash back to us at regular intervals, to traditional endowment insurance policies that accumulate money over the long-term, to unit-linked insurance policies that have a growth component (and not to forget, should something happen to you, all life insurance policies come with an automatic payout benefit to your near and dear) insurance can help meet your savings and investment targets. I view health insurance as an investment too – just think of it as a future investment into your own health and into your family’s health.

Once you’re on this path to financial prosperity, the very next question that comes to mind is “Am I saving and investing enough?” Really a tricky question to answer because as John C. Bogle would perhaps ask you: “How much do you think is enough for you?” My advice to everyone who asks me this question: Clearly write down your short, medium, and long-term goals. Then write down how much money you specifically need to set aside each month for each of these goals. Got any spare cash left? Save it. Or invest it. Or splurge it. The choice is fully yours to make. And that to me is enough!


The following post is a sponsored post.

You might be faced with a plethora of questions when choosing a term insurance plan, right from the type of insurance to the doubts regarding the returns. So, here’s a list of 10 questions you should ask before buying term life insurance to end up choosing the best term insurance policy in India.

1. Does the premium amount change over time?

No, unless specified in any of the clauses. Also, if the insurer develops any disability or habit that is life threatening, the company may decide to change the premium amount.

2. Are there any changes to the insurance plan if the policy holder gets into the habit of smoking/drinking after buying it?

Since the habit of smoking and drinking decrease the rate of life expectancy, it is important that you reveal any such habits to the policy company even if you started smoking or drinking after buying it. The company may or may not increase your premium amount on declaring. Not revealing can cause breach of the agreement and might result in the policy getting cancelled.

3. Is the policy priced more for prospective clients who smoke?

The cost and the conditions vary from policy to policy. Some companies will want to know your smoking and drinking habits even if it was in the past whereas some companies consider you a non-smoker if you haven’t smoked in the past 3 years.

4. Can one claim term life insurance in case of accidental death?

Yes, it can be claimed if the insured dies in an accident. Some companies also offer extra benefits such as accidental death benefits, critical disability rider etc.

5. Can one claim the term life insurance cover if the death occurred outside India?

Yes, you can claim the cover or assured amount irrespective of the location of the death. However, the policy holder must inform the insurer if he/she is moving to India. The company might defer the benefits if the person decides to move to countries deemed not safe by the company.

6. What if the policy holder does not die?

Since most policies do not offer any maturity benefit, many might feel discouraged to buy one. However, many insurance companies offer you different options at the end of your term, you can upgrade your policy to a permanent one, renew it with a slightly higher premium etc.

7. How does the claim settlement work if an individual has over two policies?

In the event of death of a policy holder who has more than two policies, the claimant should mention the same while filling the form to claim the cover. In most cases, the death certificate to claim the cover should be submitted to the company whose policy was bought first and acknowledgement of the same should be sent to the other insurance companies.

8. How seriously do insurance companies investigate deaths of the insured?

It depends on whether it is an early claim or a normal claim. All policy companies have an initial period that varies from company to company that characterizes the early claim. If the claim is made in that period and the company has too much to lose, then it double checks everything before the claim is settled which other is easy in the case of normal claim.

9. What kind of deaths is not covered in term insurance?

Certain kind of deaths like deaths due to terrorist attacks or deaths due to natural disasters is not covered in term insurance. So read all the clauses carefully before buying the policy.

10. Can NRIs buy term insurance policies in India?

Yes, as long as you are a resident of India as the company might require age or address proof to see where you belong in India. And you need not visit India to do so as one can find and buy the best online term plan and submit the necessary documents on the next visit to India.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.


Types of Term Plans and Right Time to Buy Them

by Vinaya HS on August 13, 2015

in Finance

The following post is a sponsored post.

There are mainly two types of term insurance plans – annual renewable term and level premium term. Annual renewable term life insurance offers an all year round coverage and has to be renewed annually whereas a level premium term insurance plan offers cover for a longer period of time of 5 to 20 years and is valid for this multi-year period.

One of the main advantages of annual renewable term life insurance is that it has low premium amounts as compared to level premium term insurance policies. However, the premium amount rises as your age increases and so, it is a suitable option for those who are sure that their income is going to rise considerably in the coming years.

With level premium term insurance, you have a fixed amount of premium amount right from the first year of the multi-year period you opt for to the very last. Hence, you do not have to worry even in worst case scenarios where your income may remain more or less the same over a year.

When it comes to returns, a term life insurance policy is again divided into two categories –

  1. Policies with return of premiums
  2. Policies without return of premiums

Policies without return of premiums have lower premium amounts compared to the policies with return of premiums. Investing in a policy with return of premiums is the best term insurance plan for many as they get the premium amount they paid for by the end of their term (only if the policy was not claimed earlier).

Right to Time to Buy a Policy

The ideal time to buy an insurance policy irrespective of the type is in one’s prime. The reason being that the term life insurance will cost you half of what it will be if bought, say, after ten years. You can secure yours and your family’s future and be at peace as you grow older.

However, this does not necessarily mean that term life insurance is only for those belonging to the younger age category. It is never too late to insure yourself with the best term plan in India for you and your family. But it is always best to buy it while you can as with time the premium amount also increases and so do your other financial responsibilities.

A term life insurance policy is a great option if you choose the right plan after careful consideration. Keep in mind your current financial position and goals before signing any deal as the benefits may vary from person to person.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.


Manage Your Money Efficiently

by Vinaya HS on July 31, 2015

in Finance

The following post is a sponsored post.

The way people bank has witnessed some massive changes over the last few decades. Until recently, customers used to share a strong emotional bond with their respective banks that lasted for years. People used to visit their branch on a regular basis, and mostly, the relationship between the customer and the banker was more than just a formal bank-client relationship.

Ever since technology started playing its role in the world of banking, banks have shifted their customer support to alternative channels such as online banking, mobile, telephone, and ATM. Today, there is an immediate need to transform the typical business model of a bank to a customer-centric one. Banks do not only need to take note of changing consumer behavior but also have to work upon enhancing customer experiences to meet their expectations in the long run.

These days, banks consider providing their customers with the best of services and enhance their services with proper financial guidance, helping them invest in better options. Some of the major banking institutions like Kotak Mahindra Bank have started providing services such as a personal finance manager to help their customers use technology to manage their finances. Listed below are some of the most common forms of investments offered by banks. Let’s find out how you can manage all of these more efficiently.


Every bank provides their customers with exceptional customer service in order to boost the customers’ confidence and offer them the convenience they’re looking for. Having a savings account helps you make the most of profitable monetary opportunities. Some banks offer higher interest rates on savings accounts which enables you to make most of your savings. Savings accounts, either short term or long term, helps you reach your financial goals today and tomorrow. Besides, it gives you a peace of mind.

Term Deposits

Being one of the most popular financial instruments provided by banks in India, Term Deposits offers better returns than a regular savings account. It offers an edge when it’s about earning better returns on your savings. However, comparing fixed deposits with other forms of investments is a long debate. You can also save tax along with great returns over the investment with Tax Saving Term Deposits. This type of scheme is suitable for investors who want to save on income tax. Fixed deposits offers you the same interest rates regardless of the market conditions.

Mutual Funds

Mutual funds are ideal for small investors who want a diversified risk portfolio in terms of money management. You can use it as a vehicle to invest in the long term. Mutual funds offer the benefits of market-linked returns, plus they help you earn high returns in the form of capital appreciation during positive market conditions.

But, using all these financial instruments can make it difficult to track your financial goals and monitor your investments, especially without a personal finance manager. However, there are these personal finance management tools available today that help you manage your finances spread across different financial institutions all under one roof. One of the most trusted platform for this is Kotak’s MoneyWatch. Whether it is your savings accounts, credit cards, mutual fund investments, insurance policies, loans, or fixed deposits, you can track them all through Kotak MoneyWatch. No manual feeds required here, the tool updates all the data automatically for your accounts.

Author Bio:

Rachita Kotian is an independent blogger and writing has been her passion for a long time. A literature major, she loves exploring the world of health, lifestyle, travel and finance. When she’s not writing, she’s most likely listening to music, cooking, surfing the web, or catching up on the latest flick.


Nurture Your Child’s Dream with a Click!

by Vinaya HS on June 27, 2015

in Finance

The following post is a sponsored post.

Being a parent is the toughest job in the world. Caring for children, nurturing their talent and helping them fulfill their true potential is the biggest responsibility that every parent must shoulder. Parenthood is not about taking one or two big decisions correctly. Rather, helping your child reach the pinnacle of success is all about making smart decision in a consistent manner.

Being a good parent is not about leading a perfect life. That is impossible. Rather, a responsible parent is one who plans for potential problems, and ensures his or her child is secure even in the worst case scenario. Let me tell you how one small decision that I took many years ago helped my child’s future.

I decided to open a Recurring Deposit – It was a small decision that I took on an impulse. It was my daughter’s 5th birthday and I wanted to gift her something that would help her in the long run. However, even I did not know how my decision would transform her life.

I decided to invest Rs. 3,000 per month in a recurring deposit, and planned to let it run for as long as possible. Now, a RD offers the same interest as a Term deposit. So, you don’t really lose out on interest despite opting to invest your money in a recurring manner instead of making a lump sum deposit.

You can choose your RD’s tenure depending on your requirements. Most banks offer RDs for 12, 24, 36, 60, and 120 months. I opted for the 120-month deposit and ended up investing a sum of Rs. 3.6 lakhs over a span of ten years. The biggest benefit of this option was that the monthly deduction did not pinch my pocket, and allowed me to spend on my family without any restrictions.

After ten years, I received a maturity amount of Rs. 5.74 lakhs. As my 15-year old daughter showed signs of academic brilliance from a very young age, I decided to use a part of the maturity amount to invest in savings & investment plans to secure my child’s education.

The returns that the RD had provided proved very beneficial when my daughter was about to seek admission in an engineering college. I lost my job and struggled for four long years before I become financially stable again. The combination of the RD’s maturity amount and the investment plan funded my daughter’s education despite the fact that I was not earning anything throughout her engineering degree.

My farsighted decision helped my daughter hone her skills and study abroad with a full scholarship. A small amount of Rs. 3,000 per month made all the difference between success and a devastating failure.

Therefore, you should start planning to nurture your child’s future at a very young age. Remember, compounding offers benefits only if you let the investment grow for a very long time. Combining a 10-year RD with a 5-year RD can help you save money for your child’s future without compromising on your immediate requirements.

Author Bio:

Rachita Kotian is an independent blogger and writing has been her passion for a long time. A literature major, she loves exploring the world of health, lifestyle, travel and finance. When she’s not writing, she’s most likely listening to music, cooking, surfing the web, or catching up on the latest flick.


The following post is a sponsored post.

NCDEX Jeera Chart 21-May-2015

Jeera prices are trading in higher top higher bottom formation, indicating uptrend. But recently prices have taken resistance at 18600 levels after breaching previous top 17000 levels, forming lower high on RSI, creating divergence. We expect Jeera prices to trade lower in short term and hence recommend to go short in NCDEX Jeera on rise towards Rs. 17950 for the target of Rs. 17300.

About Kotak Commodities

Kotak Commodities is promoted by the Kotak family that has decades of experience in commodity trading, they have a full-fledged research division involved in macro & commodity complex research and commodity specific research. This is combined with a strong and well networked sales force, which helps deliver current and up-to-date market information and news. For more information visit their website. http://www.kotakcommodities.com/


The following post is a sponsored post.

NCDEX Chana Chart 21-May-2015

We maintain our bullish view in NCDEX Chana as prices have been in an up trend forming higher tops and higher bottoms. Recently, as shown above on weekly chart, prices have breached 38.20% Fibonacci levels. Prices continue to trade above 9,13,21 EMA signaling bullish trend. Hence we recommend to go long in NCDEX Chana on decline towards Rs. 4290 for the target of Rs. 4415.

About Kotak Commodities

Kotak Commodities is promoted by the Kotak family that has decades of experience in commodity trading, they have a full-fledged research division involved in macro & commodity complex research and commodity specific research. This is combined with a strong and well networked sales force, which helps deliver current and up-to-date market information and news. For more information visit their website. http://www.kotakcommodities.com/


Indian Stock Market Basics for Novices

by Vinaya HS on May 14, 2015

in Finance

The following post is a sponsored post.

Informal trading of shares of banks and cotton presses was being done in India since the 18th century. However, it was in 1875 when the first formal institution for share trading, the Bombay Stock Exchange, was established. It was recognized as the first stock exchange of the country under the Securities Contracts (Regulation) Act in 1956.

As share trading activity grew, the Sensitivity Index or the Sensex was created in 1986. The National Stock Exchange, the first electronic share market in India was established in 1992, and quickly became the largest and most-preferred platform for traders and investors alike. All stock markets in India are regulated by the Securities and Exchange Board of India (SEBI, which was established in 1988. Today, investors can participate in debt, equity and futures market depending on their investment strategy and risk preferences.

Making your First Buy and Sell Trades

The stock exchange acts as the intermediary between buyers and sellers of shares and securities. A country-wide network of registered brokers and sub brokers receive instructions from clients and transmit orders, which are then settled on the exchange. In the past, orders were placed in person or over the telephone.

Today, one just needs a demat account, a trading account and an online trading program to take investment decisions through a computer, laptop or even a smartphone app. While the procedure for buying and selling shares is simple, knowing when to buy, hold or exit investments can be a complicated exercise, especially for novice investors. Read ahead for some useful “how-tos” that will make it easier for you to have a safe and profitable investing experience.

1. How to Choose the Right Stock

Will the banking sector outperform the Index over the next five years? Will IT sustain its past good performance? Should you invest in Infosys, TCS or both? The act of buying shares is a small part of your investment decision. For a serious investor, research is a continuous activity. Keep learning, keep analyzing and keep researching to become a better investor.

2. How to Enter the Market

Amateur investors make the mistake of deploying their funds all at once. If you are working with a ten-year timeframe, then you can afford to buy shares every few months. This will help you assess the efficacy of your strategy, average your purchase price and exit investments where stop losses have been hit.

3. How to Minimize Losses

It is a misconception that investors don’t need stop losses. Buying a blue-chip at a premium and waiting for years just to recover your investment does not make sense. Consider micro and macro factors and determine your stop losses accordingly.

4. How to Mitigate Risks

As a long-term investor, you must look beyond short-term factors like depreciation of the rupee or temporary spikes in oil prices. This is why you should safeguard your investments by combining aggressive bets with investment in defensive sectors like FMCG and pharmaceuticals. Analyze your options and create a diversified portfolio to ensure your investment is safe.

5. How to Handle Market Crashes

A 700-point cut on the Sensex in a single day can seem like a disastrous event for a trader. For an investor with a 5-year timeframe, a one-day loss is of very little significance. Your decisions should be based on market fundamentals and not on market sentiments. A smart investor should use volatility to purchase quality companies at a significant discount.

Investing in equity is not a get-rich-quickly scheme. It is a long-term exercise that requires knowledge, discipline and patience. As a novice, adopt the slow-and-steady approach to ensure you earn sustainable and attractive returns on your investments.

For more details, head to Religare Online.


Keep An Eye on Your Money

by Vinaya HS on May 8, 2015

in Finance

The following post is a sponsored post.

What is the point of using new-age solutions like online banking and mobile banking apps if you are going to rely on old-fashioned methods like manual calculators or complicated spreadsheets to manage your personal finances? Most of the individuals make the mistake of underestimating the potential benefits of proper management of personal finances.

Apart from helping you track your financial condition, effective management of money can help you extract more benefits out of your wealth creation strategies. This is where Kotak MoneyWatch can help you obtain a bird’s eye view of your assets, liabilities, investments, savings, and loans, along with useful information about equity markets and the economy as a whole.

What is Kotak MoneyWatch?

Kotak MoneyWatch is an online personal finance manager that allows you to enter and track details of all aspects of your financial life including:

  • Bank accounts
  • Credit cards
  • Mutual funds
  • Equity investments
  • Small savings
  • FD and bond investments
  • Loans
  • Insurance policies
  • Real estate investments

You don’t need to hold a Kotak bank account to use this PFM tool. Simply register your email id and you can start enjoying the benefits of this safe, functional, and convenient tool online.

Advantages of MoneyWatch

Unlike other tools, this Kotak product goes beyond merely providing an online record of your finances. Providing your online banking credentials and details of your credit cards, loans, equity holdings, and other financial products to this encrypted website will ensure your financial records are automatically updated on a daily basis. This means you will get an updated view of your bank balances, cash holdings, assets, liabilities, and investments on the dashboard every time you log in to this website.

Apart from automatic update of financial information, this website helps you plan and track your monthly and annual budget without any hassles. Linkage with all your financial accounts means you don’t have to waste time entering details of all your transactions. Pay your bills and watch its impact on your budget for effective analysis and informed decisions.

Further, this personal finance management tool helps you generate detailed reports of all aspects of your financial life with the click of a mouse. From the principal and interest component payable on your personal loans to a graphic breakup of your assets and liabilities, the website will help you analyze and understand your financial position even if you are not an expert in money management.

Finally, the website provides a snapshot of the performance of the financial markets in India along with useful information about the latest developments in the Indian economy. From details of the Union budget to the procedure for shifting your personal loan from one bank to another, the tool will help you acquire the necessary knowledge to improve your money management skills and strategies.

This resource helps you maximize the benefits of technology without compromising on safety of your private and confidential details of your finances. Instead of maintaining bulky files or complicated spreadsheets, use your computer, tablet, or smartphone to track your personal finances in a convenient and efficient manner.

Author Bio:

Rachita Kotian is an independent blogger and writing has been her passion for a long time. A literature major, she loves exploring the world of health, lifestyle, travel and finance. When she’s not writing, she’s most likely listening to music, cooking, surfing the web, or catching up on the latest flick.


The following post is a sponsored post.

The purpose of Rajiv Gandhi Udyami Mitra Yojana (RGUMY) is to provide hand holding support and assistance to the potential first generation entrepreneurs, through the selected lead agencies i.e. ‘Udyami Mitras’, in the establishment and management of the new enterprise, in dealing with various procedural and legal hurdles and in completion of various formalities required for setting up and running of the enterprise.

The Rajiv Gandhi Udyami Mitra Yojana (RGUMY) was established to enable first-generation entrepreneurs to establish and manage their new enterprises through support and assistance provided by lead agencies that function as Udyami Mitras.

The Yojana was aimed at helping entrepreneurs deal with procedural formalities and legal issues involved in setting up a new enterprise from scratch and running the same in an efficient manner.

Revamping RGUMY into BASP

In a bid to enhance its effectiveness as a tool for promotion of MSMEs in India, the RGUMY has been revamped and restructured into the Business Accelerator and Start-up Programme (BASP). The revamped plan is designed to boost the MSME sector and enhance the employment generation capacity of this sector in India.

The BASP is being implemented on a pilot basis in the 12th 5-Year Plan, with the government retaining the option of expanding this program further on the basis of its potential impact on the MSME sector in India.

Overview of BASP

The Business Accelerator and Start-up Programme seeks to build upon the work done by the Udyami Mitras by helping first-generation entrepreneurs proceed ahead with the task of establishing competitive micro or small enterprises. Further, existing MSEs will get mentoring and advisory support to improve efficiency and to boost employment generation.

Advisory support provided by BASP shall cover areas like:

  • Registration of establishments
  • Efficient production
  • Functional marketing and sales strategy
  • Access to SME finance, and
  • Compliance with statutory provisions

The Udyami Mitras shall be replaced by entrepreneurs or industrialists who will function as business mentors for the micro and small enterprises. Mentoring support will be provided for a period of five years, and the SMEs shall enjoy access to more lenient small business funding sources and technology support throughout this period. The National Small Industries Corporation shall function as the Nodal Agency for BASP.

Impact on MSME Sector

The RGUMY was introduced in 2008-09. The new scheme seeks to build upon the numerous changes and improvements in the world of technology, as well as the increase in financing options for the MSME sector in India. Encouraging entrepreneurs to setup micro and small units, which make significant contribution to the growth of the Indian economy, will help the individual as well as the economy enjoy significant increase in competitiveness, growth, and profitability.


The revamping of the RGUMY ensures its fundamental goal is achieved even as the transition of an individual from an entrepreneur to the owner of a micro or small enterprise takes place in a smooth manner.

This post has been contributed by SMEcorner – India’s first Online Loan Application Platform.


The following post is a sponsored post.

R. Vaithianathan of Tata Capital Housing Finance talks about smart cities and online buying.

R. Vaithianathan of Tata Capital Housing

The housing space is abuzz with talks of growth. With the government focusing on affordable housing and housing-for-all, and recent announcements in the Union budget regarding real estate investment trusts, the outlook has turned positive for the sector. The impetus on smart cities adds to the sentiment. R. Vaithianathan, managing director, Tata Capital Housing Finance Ltd, a housing finance company which has a significant focus on project financing and affordable housing, talks about the shape that this space is likely to take, and why it is investors who are buying properties online, the new method of buying properties.

What is your idea of a smart city? How do you see it taking shape?

As of now, we, too, know only as much as what is in the public domain already. Full details are yet to be received. The government, however, is very much focused on the housing sector and this is evident through the various interactions that we have had with the government and regulators. According to reports, a few cities, such as Vishakhapatnam, Allahabad and Ajmer, have already been identified to be developed as smart cities. We have an affordable housing wing, for which we have an 80-member strong team. We participate in housing loans of below Rs.15 lakh, wherein the cost of house is below Rs.25 lakh. These are mostly on the periphery of metro cities, and not in the metro cities because houses in metros are not available at that level. Low-income housing is available in such locations, where we are participating either by funding projects or giving housing loans to salaried as well as self-employed people. Once more detailed rules and regulations come in regarding smart cities, given that we have the expertise of funding projects and retail loan granting, we can participate by having dialogues with the government or authorities or development agencies concerned.

How do you define ‘affordable`? Even your organization concentrates on tier 2 and 3 cities when it comes to affordable housing.

A lot of migration takes place from villages to cities. After 2-3 years, they start looking for housing that they can own. But they cannot afford to buy houses in the heart of cities. They will go maybe 30-40 km away from the city, where a little bit of infrastructure is available, such as road connectivity and rail transportation. We are focusing on that niche segment of customers, which consists of, say, office boys in corporate organizations, self-employed people such as welders or auto mechanics, or clerical staff in government organizations. They can’t buy in metro cities yet need to be nearby. We are working to provide houses to them. This is affordable housing for us.

What will happen to property prices in and around (the catchment area) smart cities as and when they come up?

We will have to wait and watch. If smart cities themselves have a plan for affordable housing—Rs.50 lakh in metros and Rs.40 lakh in non-metros, as per the Reserve Bank of India—participation by housing finance companies will be fine-tuned accordingly. If a smart city exists, then the peripheral areas will definitely have an ecosystem for low-income people who will work in the smart cities. That again will be an opportunity for affordable housing developers to participate in. Real estate is a price-sensitive sector and there will some kind of impact.

How is the home loan space evolving for non-banking financial companies (NBFCs)?

In the latest Union budget, NBFCs have been given the benefit of the SARFAESI Act (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002). This means that we can act like banks in case of legal disputes over properties. So, slowly a level playing field is getting established. We are operating in a segment that requires specialists to judge the income of an individual. If there is a salaried person, then you have a Form 16 to judge the income from. But we also judge on the basis of ability and capacity to pay. We mix these two to take a call rather than relying only on papers and data. NBFCs have their own strength, and housing finance companies have their own. We have been growing and will keep growing.

Some advertisements show low interest rates on home loans. One by your firm says home loan at 7.99%. Isn’t this misleading?

In such a case, the agreement—which the customer signs with the finance company—very clearly mentions that the loan availed is at, say, 10.15% or 10.25%. The developer, who is part of that particular offer, signs another agreement at the time of selling the property mentioning that for a fixed period of time it will be giving concession to the customer by way of subvention. So, the customer is very clearly aware that the rate of interest paid to the housing company is as per the agreed rate and the developer will pay the difference back to the customer.

Many companies are going online to sell properties. Who are the buyers?

This is a new channel of selling properties. Many people now are tech-savvy and stay far away, maybe overseas. They have the money and are looking for a reliable brand with which they can invest. Online buyers are mostly looking for investments for, say, 5-6 years, with a reliable builder who can assure on-time delivery. So, a brand has huge impact on online sales. Local residents may prefer to check the property physically. The time when land documents and records will be in dematerialized form is not too far away. The process of documents going online has already started.

For flexible EMI options on Home Loans visit http://tatacapital.com/consumer-finance/home-loans.htm

Source: http://www.livemint.com/Money/55LgimWc7oXwAZHFRJJrHP/Online-homebuyers-are-mostly-looking-for-investments.html


Understanding Loans against Securities

by Vinaya HS on March 11, 2015

in Finance

The following post is a sponsored post.

When you are running a business, one of your major worries is always going to be getting the right finance at the right time. Be it at the start of your entrepreneurial venture or the working capital cash crunch you face when you least expect it. SMEs are usually susceptible to such needs and on the other hand, banks are always looking to fulfill such dire needs.

Of late, both banks and non-banking financial institutions (NBFCs) float a lot of these easy to get loan products in the market to meet the demand arising from theses SMEs. While traditionally they did provide loans against assets, they now even provide loans against financial assets such as mutual funds, insurance, security bonds, ETFs and government securities.

At times when SMEs face a liquidity problem, getting loans gets a bit difficult. Specially, if it’s an urgent cash crunch issue and there is no time to arrange for collaterals and all the paperwork that follows. Loans against securities (LAS) are the ideal way to get the much-needed liquidity. With quick and uncomplicated application processes, this is the perfect go-to for SMEs.

What are loans against securities?

Under LAS, the loan is given to a customer against the pledge of securities. These securities can be any type of securities such as insurance policies, mutual funds, government securities, non-convertible debentures, NABARD bonds, Demat shares, UTI bonds or NSC/KVP. They can also differ from bank to bank. Loans against securities are usually taken for short durations, as securities are merely pledged and not out rightly sold. It works like an overdraft facility advanced to you from a bank or a financial institution. The value is determined on the basis of the securities that are being pledged and is usually 50-70% of the total value of the securities. Although lesser than what you get against loans on properties, this is quicker and less fussy to avail of.

How do they work?

The bank/financial institution opens a bank account for the pledger and deposits the money being loaned against the securities. It is on the pledger’s discretion on how and when to withdraw and use the money. The pledger only pays interest on the money withdrawn from the account based on the period of utilization.

Benefits of Loan against Securities

The best part about pledging your securities is that you don’t lose your benefits of being the shareholder and enjoy your rights of dividends and bonuses. Another perk is that you pay a lesser interest rate through loan against securities as compared to a personal loan. It’s a secured loan and there are usually no prepayment charges, although they may differ from bank to bank. Since it’s easy to get a loan against securities, it’s a great way of raising capital for SMEs when one is in a dire need.

Contributed by SMEcorner – India’s first online loan application platform.


When to Start with a Pension Plan?

by Vinaya HS on February 16, 2015

in Finance

The following post is a sponsored post.

Planning your future is extremely essential to lead a successful life. The rate of every commodity is rising with the changing times. You do not know what the rates would be after certain years! For now, you have a stable job to survive the ever increasing inflation. But, how will you manage your finances after you retire?

This is a big question that everyone should ponder upon. The answer to this certainly lies in having a good pension plan. But, when should you start thinking about the plan? When is the right age to invest in a pension plan?

The answer is, now. Start your pension plan immediately on getting your first job. The younger generation fails to understand this. They think, they have many years left for retirement and pension plan is something that they should think about at a later stage. But the fact is the early you start, more benefits you get.

Starting early means you will be invested for a long time. Long term investments always fetch better results as your money gets a longer period to grow. Pension plans being a long term plans, will also give you better outcomes if you start early.

When you start early, you can accumulate a lot of corpus to bear all the expenses of your retirement life. Besides, you can manage to collect a large amount with little savings. This also helps to inculcate the habit of saving from a young age. On the contrary, when you start your pension plan late, you need to increase your savings considerably and your returns are also comparatively low.

If you haven’t invested in a pension plan yet, then start with one immediately. People belonging to different age groups should see different aspects when looking for a pension plan. Some of the things you should see, before selecting the plan are:

  • When you are in Mid 30s: At this age, you should take an estimate of how much money you will require, after you retire. You should also check whether the scheme is sufficient or you need to save more to cope with the inflation? Accordingly, choose the best pension plan. You may invest more, if required.
  • When you are in Mid 40s: In your 40s, you become mature enough to understand the realities. At this age, you have a clear picture of where you will settle, when you will retire and how much fund you will require to fulfill your desires in the post-retirement life. These things will help you to know how much to invest in which scheme.
  • When you are in Mid 50s: This stage leads you closer to the retirement age. It is high time when you get serious about your retirement life. Go through various pension plans in India and pick the right one. You should pick that plan which will take care of your health and medical expenses along with funding your dreams.

It is certain that early planning makes your life after retirement, financially comfortable and secure. So start planning now and choose the best pension plan in India for yourself.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.


Reducing the Debt Gap for SMEs

by Vinaya HS on February 2, 2015

in Finance

The following post is a sponsored post.

In a developing country like India, the micro, small and medium enterprises (MSMEs) play a very important role in contributing to the economic development. Being the second most populated country in the world, we have a huge population to serve and these MSMEs that are built on innovation and talent, help in reaching out to the spread out billions.

The Small and Medium enterprises in India (SMEs) contribute 45% of the total industrial output, hence becoming a crucial part of our economy. They also contribute to 40% of the country’s total exports, employ about 60 million people and create 1.3 million jobs every year.

While there are a lot of perks and benefits for the SME sector in India, they still continue to face a lot of difficulties and challenges. An important one in the list is getting the right and secure source of SME financing. This lack of available funding for SMEs has only been highlighted post the credit crunch in our country.

Funding gap in SMEs

According to a report by the International Finance Corporation (IFC), the total financing demand gap in the SME sector is of Rs 2.93 trillion. Research shows that most formal lenders prefer traditional-collateral based lending and look for at least three years of profitable track records. Such expectations out of newly opened innovative companies makes loans for SMEs out of reach.

Reasons for the increase in the debt gap

A lot of these SMEs are run by entrepreneurs who have little or no experience in raising SME finance. Others are family-owned and have less information about tapping the right kind of financing. There is also information asymmetry, which exists in these SMEs, causing the debt gap to increase.

Also, traditionally SMEs prefer taking private funds from family and friends, which is the largest source of finance for this sector in India. Some also rely on private moneylenders and some players from the unorganized financial sector for their SME finance needs. The terms of these deals are typically unclear and interest rates are very high.

While banks are making efforts to bridge this gap, the rules and regulations in the banking industry makes it very difficult to do so. In any application for loans for SMEs, the bank has to evaluate the risks involved and see the collateral support. It becomes difficult for entrepreneurs with small businesses to satisfy all the conditions and requirements that the bank will ask for.

Thinking from the bank’s point of view, they have to be restrictive to create value by controlling and managing the risks and are right in their scrutiny.

Government support for SME funding

The Indian government has always been aware of the funding gap that exists in the SME finance sector and they keep announcing some sort of relief mechanisms to support them. Their initiatives have helped in coming till here and ensuring that we continue to get our set of good entrepreneurs but more needs to be done to take it to the next level.

This article has been contributed by SMEcorner – India’s first online loan application platform.


The following post is a sponsored post.

Buying insurance is often perceived as time-consuming and difficult. Although most of us agree with the importance of having a life insurance, the formalities can be a big turn-off. Such a cumbersome task can sometimes cause policy buyers to postpone their decision.

Let us be appreciative that we are in an age where almost no task is time-consuming or cumbersome. All thanks to the Internet. You can now look for insurance companies on the internet and buy online term insurance plans. Buying life insurance online is growing popular with every passing day where people now prefer this medium for buying and selling term insurance products.

Why buy Term Insurance?

Who needs a Term Insurance? Well, almost everyone who is earning and has dependent(s) needs a term plan. Term insurance is the most basic kind of life insurance. Here, in case the policyholder faces demise during the policy period then the family members get the sum assured as death benefit. However, if the policy holder luckily doesn’t come across such unfortunate events, and is still alive, then the insurance company wouldn’t remit any money back. Which effectively means that the nominees would earn no benefit on maturity of the policy. However, the most exciting feature of opting for a term insurance plan is it guarantees a very high sum assured for a really low premium.

Online Term Plan

For a customer who is comfortable using the internet and has some experience of having made online purchases, buying life insurance online is definitely the most convenient and most logical option. It’s fast, easy and secure – just fill in the details and make the payment through Internet Banking. Apart from the convenience, online policy is comparatively cheaper compared to the offline version and offers a very high sum assured compared to the premiums.

Every month around lakhs of people in India search for online term plans. The market of online term insurance has witnessed a constant rise since 2010. Approximately 25,000 policies are sold online every month in India. One such popular online term plan is the HDFC Life Click 2 Protect Plus offered by HDFC Life. According to a report by Boston Consulting Group and Google India, it is projected that, by 2020, three out of four insurance policies sold would be via digital channels. Sensing a growing demand for online term policies, almost all private life insurance companies have started focusing on this segment.

Benefits of Opting for Online Term Plans

Some of the advantages of buying term plans online using the website of insurance companies are:

  1. Lower premium rates
  2. Faster policy issuance process
  3. Less paperwork
  4. Crystal clear process
  5. No health / medical checkup for certain age groups

Due to high awareness levels amongst the youth, the outcome is better. In case of offline plans, there is always a possibility that the policy buyer has just signed the form, while the agent enters all the data. Online term insurance ensure that the insured himself fills in all the details accurately leaving no scope for the information could be sketchy or mistaken resulting in better quality of information.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.


The following post is a sponsored post.

The life insurance industry in India is the largest in the world. The collective amount of people from about 200 countries across the world is less than the total amount of people insured in India. Don’t be surprised after reading these statistics, India still is under-insured.

The penetration of life Insurance in India, the ratio of premium funded in a year to the GDP was hardly 3.17% in 2012. This still doesn’t mean that the life insurance space in this country is stagnating. Life Insurance remains one of the fastest growing industries in India as is expected to grow at a compound annual growth rate of about 12-15 percent by 2020.

Why Invest in Life Insurance Post Budget 2014-15?

Life insurance is one of the most important tax saving instrument that provides various plans like term plan, savings, investment, as well as retirement plans which could be the most feasible tax saving options.

After the 2014 budget, it is expected that with an enhanced flow of foreign capital and international expertise, we could see a growth in the development of the insurance industry. This acceleration could be triggered by increased access to global insurance products, distribution channels and top-notch business practices. The 2014-15 budget is expected to have a positive impact in the overall development of the insurance sector in India as well as the fast growing health insurance sector.

The existing Income tax rules allow for an annual exemption of Rs. One Lakh in investments and expenditures including life insurance and home loan repayments. This rule hasn’t seen much of a change for about a decade now. Such investments, along with public provident funds (PPF), employee provident funds (EPF), term deposits and equity-linked mutual funds are most suitable investment tools for people that help in keeping the economy on a strong footing.

Investing in Life Insurance. Does it Really Help?

Sure it does. But, raising the Rs. One Lakh limit and improving the number of ways to invest it in exchange for a tax credit would be more beneficial as people could save more money. It would also allow people to invest this amount in ways that would indirectly benefit the economy, even if it were to hit government revenue in the beginning.

HDFC Life, one of the leading life insurance companies in India, offers a range of options to suit different requirements, all serving one purpose, securing one’s family’s wellbeing and financial stability. Choosing one of the HDFC Life’s life insurance plans serve to be the best way to save tax. As per section 80C, you could save upto Rs. 46,350/- on investment of Rs. 1,50,000/- on all life insurance plans provided by HDFC Life. For people with very high tax bracket, such tax benefits offered by a life insurance policy would be more valuable.

Life Insurance is no more just a tool to save tax; it is a necessary financial instrument. After all, the whole point of insurance is to ensure your dependents have enough to sustain financially if something were to happen to you. Today, policy holders are more knowledgeable than ever and more aware of their rights as consumers. Each policy is different; it is upto the customers to decide what works for them before they buy it.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.


Announcing the Winner of the April Book Giveaway

by Vinaya HS on April 15, 2013

in Finance

It’s never an easy task to judge and pick “one” winner for the book giveaway contests. Each entry is usually brilliant and insightful in its own right. So, I often — and as in this case too — let the computer pick a winner for me. And, the winner of the April Book Giveaway for a copy of the book Beginners Guide to Investing with Confidence is reader Sharan.

Congratulations Sharan! I will email you with the details.

Thanks everyone for participating.


The Privilege of Making Unwanted Investments

by Vinaya HS on April 8, 2013

in Finance

ICICI Bank’s Privilege Banking is awesome! If you’re “privileged” enough to have it, you can simply walk into any Branch, push a couple of buttons on the quirky token dispensing machine (an entirely optional step), and walk right up to the Privilege Banking Counter and get your work done while the rest of the “non-privileged” world waits for their token to show up on a TV screen/monitor.

The “privilege” of course comes with its own set of “grab-my-hard-earned-money” sales pitches and schemes.

The other day, I was at the said Privilege Banking Counter depositing a slightly high-value check (the proceeds from the sale of the Swift and which was already destined to pay off a bridge loan). One look at the amount on the check led to a barrage of questions from the guy manning the Privilege Banking Counter.

  • Sir, is this your annual bonus check?

  • Are you looking to make some investments?

  • Instead of closing your [bridge] loan, why don’t you earn a higher interest by making some investments?

  • Sir, are you sure that you do not want to earn a higher interest? [All the while looking at me as if I were quite foolish at declining the investment offer.]


Simple but firm NOs. Out of there in an instant.

Just experienced the “privilege” of making unwanted investments.

Have you?


Education. Marriage. Retirement.

by Vinaya HS on April 7, 2013

in Finance

Over the past year, I’ve tried to keep tabs on the financial goals that people generally seem to have (as claimed in case studies, interviews, money makeovers, etc. published in leading personal finance publications). So, here’s the trend that I see. Most people seem to have the following set of financial goals –

  • Daughter’s Education in A years

  • Daughter’s Marriage in B years

  • Son’s Education in C years

  • Son’s Marriage in D years

  • Retirement in Z years

The sums of money to be saved as the “Marriage Corpus” are indeed mind-blowing (I’ve always seen 7 and 8 figure sums here!). That’s a whole bunch of ERE-money if you ask me. And Z is usually far far greater than A/B/C/D.

Oh, and there’s also the occasional –

  • Foreign Trip in 5 to 7 years

What do you think?

PS: I’m not in this stage yet — so, I might come back here years later and claim that these are my financial goals too. :-)

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