awareness fridays

To Disha Financial Counseling.

Financial counseling is a relatively new concept in India. From what I have seen around me, we are generally not comfortable with discussing our finances even with friends and family, let alone financial counselors. Though we may be in a deep financial crisis, we seldom seek professional help and instead go deeper into the crisis until it is too late. In my opinion, there’s nothing to be ashamed of in accepting your financial reality and seeking professional help. It’s good to see organizations such as Disha (setup under the aegis of ICICI Trusteeship Services Limited) take a first step in this endeavor.

If you require financial counseling at any time, consider speaking to an experienced counselor at Disha Financial Counseling. If you’re presently in a financially stable state, I’d still encourage you take a look at the services offered by Disha — you might just be able to help someone who you know is in financial difficulties.

Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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On the subject of detection and impounding of counterfeit notes by banks operating in India, the Reserve Bank of India notes that,

Complaints are being received from the public that while impounding a counterfeit note, the tenderer is not informed the reasons for deeming a note as counterfeit. It is therefore advised that the format of the receipt provided in Annex I of the Master Circular [on Detection and Impounding of Counterfeit Currency] has been modified with immediate effect to indicate the parameters on which a note is deemed as counterfeit.

While I do not agree with all of the measures adopted by the Reserve Bank of India (the recent liquidity infusions, for example), I do agree that we have the best banking and financial regulator in the world. What do you think?

Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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The Reserve Bank of India also governs the Banking Ombudsman Scheme which provides an “expeditious and inexpensive forum to bank customers for resolution of their complaints relating to banking services.” The objective of the Banking Ombudsman Scheme is to be a visible and reliable system of dispute resolution mechanism for bank customers.

Though the Ombudsman was launched way back in 1995, how many among us are really aware of when and how to approach the Banking Ombudsman? Thankfully, as always, the Reserve Bank of India has recently released a guide on this very topic.

As the report points out,

Two major challenges in effective implementation of Banking Ombudsman Scheme are creating widespread awareness about the Scheme and providing easy access to grievance redressal under the Scheme.

By publishing this post, I have, hopefully, managed to address the first challenge to a small extent. I’d like you to continue this effort by forwarding this post (or the guide) to whoever you believe can benefit from reading it.

Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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I’m a BIG fan of Suze Orman simply because she gives practical advice on personal finance. I try and catch her show every Sunday on CNBC (here’s the TV schedule). I happened to read this recent interview with Suze Orman where she answers questions posed by a group of personal finance bloggers. Though some of the questions are specific to the situation in the United States, her answers/advice are generic enough to be of value to a wider audience. I urge you to read it in depth and identify your personal takeaways.

I particularly like this advice — having been down this road myself.

My advice to people who were once in credit card debt and now they’ve gotten themselves out of credit card debt is I would literally cut up all of my credit cards. I would not be carrying them…

You won’t find my credit card in my wallet. Therefore, I can’t lose my credit card and I can’t charge a rupee on it. Stress free and honestly liberating. You’ve got to try it.

Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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The first time I saw this presentation (it was emailed to the administration head at my office), I screamed “WTF mate?” multiple times and in quick succession. Go through this presentation and give me one decent reason for why you would ever want to invest in this attractively packaged recipe for financial alchemy?



Slide #29 is a classic Warren Buffett trap. But if you’ve been following this blog, you already know that, if someone puts before you a financial offer that uses the words “you,” “Warren Buffett,” and “invest” in the same sentence, you should run away as fast as you can. And, you shouldn’t look back.

Awareness Fridays is an initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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Today’s topic is an easy to understand and informative read for the weekend. It’s a speech delivered by Dr. D. Subbarao, Governor, Reserve Bank of India at the RBI-BIS Seminar on “Mitigating Spillovers and Contagion – Lessons from the Global Financial Crisis” (click to download) at Hyderabad earlier this month.

Of significance is this quote (a close friend and I had discussed precisely the same point in January of this year):

Forgotten in the euphoria of financial alchemy is the basic tenet that the financial sector has no standing of its own; it derives its strength and resilience from the real economy. It is the real sector that should drive the financial sector, not the other way round.

Financial alchemy. I love the term — a new one for my arsenal! A few examples for financial alchemy that we see on a daily basis include:

What do you think?

Awareness Fridays is an initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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Most of you must have faced a situation in which you visit a bank to deposit money and the teller starts observing each note under an ultraviolet lamp. What the teller is trying to do is to detect counterfeit currency notes. Most of us are unaware about our rights when it comes to such situations. For example: What is the procedure to be followed by both you and the bank when counterfeit currency is detected? What are your rights — as a depositor — in such an instance?

All such questions are thankfully answered in the Reserve Bank of India’s master circular on detection and impounding of counterfeit currency.

Have you ever been in such a situation before? If yes, it would be wonderful if you could share your experience here.

Awareness Fridays is an initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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We’ve all had our fair share of receiving torn or soiled currency notes. Sometimes banks refuse to exchange these notes and we’re left fuming since we’ve no idea what the rules are with respect to exchange of such notes. Thankfully, the Reserve Bank of India has published guidelines for exchanging such currency.

Click here to download the Master Circular describing the facilities available for exchange of notes and coins.

Read these guidelines so that the next time you’re well prepared to advise the bank on their rules.

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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Reader Shankar asks,

Is there any Master Circular issued by the Reserve Bank of India on Credit Cards issued by Indian Banks?

There certainly is:

There’s some pretty useful information in these documents. Again, take some time off this weekend and assimilate its contents. You’ll be glad that you did.

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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The Reserve Bank of India time and again issues various instructions/guidelines in the area of customer service to bring about improvements in the quality of customer service in banks and their branches. But whether banks actually implement these guidelines is a different matter altogether. As bank customers, however, it’s prudent on our part to know and understand what these guidelines are in order that we can stand up for our rights. In order to have all current instructions on this subject at one place, the Reserve Bank of India has compiled many of the important instructions in the form of a Master Circular.

This circular is 92-pages long, but is packed with information that you, as the customer of a bank, should know.

Take some time off this weekend and assimilate its contents. You’ll be glad that you did.

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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Three weeks back, I wrote about the deposit insurance system in India. While that guide served as a ready reckoner, there’s nothing better to drive the point home than a real case study. One such case study — and a live one at that — involves Saraswat Bank’s takeover of South Indian Cooperative Bank (SICB). You can read-up on how the deposit insurance system is being invoked and utilized in this article published in the Economic Times.

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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A while back, reader Lakshmi wrote to me saying,

My mom is particularly concerned that my brother’s job is non-pensionable and recently she heard about the SBI Life Insurance Pension Fund. Please throw some light on this matter.

I couldn’t write back since I was held up with other work. But Lakshmi soon wrote back with this update:

About my previous questions on finance, I did some work myself. The SBI Life Insurance Plan is just a Unit-Linked Pension Plan and clearly states that the investor should bear the market risk. In short, they are saying that they’ll take our money only to lose it by investing in shares. I’ll go home and call up my aunt who suggested it in the first place.

Brilliant. I repeat my advise: Never ever invest in a financial instrument that you don’t understand. And to understand, all it takes is a little bit of research. That’s how you develop awareness.

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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A solid understanding of the basics of personal finance can only come through rigorous self-education. There is no shortcut. There are, however, excellent resources — both in print and on the internet (see below) — which can guide you with useful information on this journey. But the real learning happens when you analyze and apply this information to your personal situation. That’s the beauty of personal finance — each person’s situation and needs are different.

I developed my understanding by diligently and faithfully reading these resources:

There’s of course this blog too! That’s why you’re reading it right?

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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You might have heard recent news about the government’s plan to double the deposit insurance cover for your bank deposits (savings, fixed, current, recurring, etc.). I welcome this move — though not for the reasons you hear in the media. I welcome this move simply because it’s good for you and me.

Did you know that deposit insurance is provided by the Deposit Insurance and Credit Guarantee Corporation of India (a wholly owned subsidiary of the Reserve Bank of India)? What exactly does deposit insurance cover? How does this insurance work? Is my bank covered by this insurance? Answers to these questions and more can be perused in the following guides:

  1. DICGC’s guide to the deposit insurance system in India. Read the Q&A.
  2. List of commercial banks covered under deposit insurance.
  3. List of cooperative banks covered under deposit insurance.

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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Most of us would have, knowingly or unknowingly, used the National Electronic Funds Transfer (NEFT) system to facilitate online transfer of funds from any bank branch to any other bank branch within India. Since NEFT forms the backbone for a good percentage of our financial transactions, it’s good to have some in depth knowledge on how this system operates.

Click here to read the Reserve Bank of India’s guide to the NEFT system.

Awareness Fridays is my new initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.

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