Steps to Start Investing – There is always a first time!!

Every time we hear someone discussing about good return from an investment, don’t we regret that why this opportunity didn’t come to us. Yes we do, and why we feel this is because of the simple reason that we don’t invest. Every moment we think of making an investment, but do we actually invest? We probable give importance to savings over Investment isn’t?

Well!! There is always a first time, so start Investing. This article would take you through some steps/points which would help you to start investing money……

National Food Security Bill – Its impact on Indian Economy

To provide food security is impetus for economic growth of any country. In India the same has been introduced in Year 2013, which says that it would provide food security to at least 67% of the population.

Synopsis of Food Security Bill: The Food Security Bill would provide Rice, Wheat and other food grains at a heavy subsidised rate, and the food grains will be available at price as low as Rs.1 to 3 per kg.

Credit Card – Guidance to Select, Check & Track

Credit cards are becoming increasingly popular now days, with the increasing standard of living of the people, better payment system and availability of the cards at the door step. Since the rate of interest on outstanding with other charges are deceive/complicated in nature, you got to be smart in selecting, using and tracking your card to avoid charges.

Let see how to go about it, though there could be many ways to save on the cost here we will discuss only 4 ways to avoid such charges by selecting a better credit card and by using it in a disciplined way.

NEFT & RTGS – Demystified

Normally when we issue a cheque for transfer of funds form one bank account to another bank account of a different bank, it normally used to take 2 to 3 days for transfer depending upon the location of the bank branch in which the fund is to be transferred.

Thereafter came the concept of “High Value Cheques” were in, if say a cheque of Rs.5,00,000  is issued from account A to bank account b, the receiver i.e. Account B will get the credit the same day but Account A will not get debited unless the cheque goes for normal clearing, which again takes 2 to 3 days. This mode of payment started getting miss-utilised by the users wherein, they started transferring amount from their own one bank account to another to save on interest cost.

Why Do SWOT?

One of the components of strategic thinking requires the generation of a series of strategic alternatives, or choices of future strategies to pursue, given the company’s internal strengths and weakness and its external opportunities and threats. The comparison of strengths, weaknesses, opportunities and threats is normally referred to SWOT analysis.

The National Pension System (NPS) - Re-modified!!

A retirement plan available to the citizens of Indian starting from the year 2009, but I guess not many people have much knowledge about and how it helps in individual’s retirement planning.

Let see what this is all about!!!

What is the National Pension System?

The National Pension scheme is to promote income security at the time of retirement to citizens of India which earlier was not given much of importance. So, NPS a step forward by the Central Government is basically a voluntary contribution scheme introduced through Pension regulation authority named as Pension Fund Regulatory and Development Authority (PFRDA).

Health Insurance – should we have it or not??

We will be surprised to know that in India not more than 5% of the people have health insurance as per the sources, are rest are either unaware or not having any health insurance. The same justifies the unpopularity of the scheme. Now the question arises is what is a health insurance and should we have it or not?

Now, let’s understand what it is and why do we need it.

Exchange Traded Fund

An Exchange traded fund (ETF), is a type of Investment Company whose investment objective is to achieve the same return as a particular market index. An ETF is similar to an index fund in that it will primarily invest in the securities of companies that are included in a selected market index. An ETF will invest in either all of the securities or a representative sample of the securities included in the index. An ETF invest in a basket of stocks which blindly mimics a chosen market index (say, the S&P, CNX, Nifty, or the BSE sensex). For convenience, the Net Asset Value (NAV) of the ETF is usually represented as a fraction of its underlying index. For instance, the benchmark Nifty ETF has an NAV that is one tenth of the prevailing Nifty value. Unlike regular open end mutual funds, ETFs can be bought and sold throughout the trading day like any stock.

National Stock Exchange

While India has had a long history of securities trading, the markets have not always kept pace with the changing trends and requirements for this industry to reach its full potential. Particular issues of concern in the securities industry have been lack of transparency, lack of trading facilities which are fair and accessible to all, undercapitalized trading members, dated procedures and practices and long and uncertain settlement cycles. NSE emerged as an endeavour by some of the institutional investors within the country to address these issues, and to break the monopoly that was enjoyed by the BSE brokers. NSE incorporated in 1992 was given recognition as a stock exchange in April 1993 and stared operations in June 1994.

Bombay Stock Exchange

The roots of the Stock Exchange, Mumbai can be traced back to 1875, when the share and Stockbrokers Association (non-profit organisation) was established. BSE is the oldest stock exchange in Asia and most important stock exchange in Indian capital market. After liberalization, the stock exchange, Mumbai has witnessed a huge increase in trading and economic deregulation and prompted the stock exchange to improve its operations on par with the International standards. The Board of Governors of BSE comprises of 9 elected directors (one third retire every year by rotation) , an executive director, three government nominees, a Reserve Bank of India nominee, and five public representatives. A president, vice president and an Honorary treasurer are annually elected from among the elected directors by the governing board following the elections of the directors. The executive director works as the chief executive officer and is responsible for day to day administration of the stock exchange.

Corporate Fixed Deposits

Investors can also consider depositing their money for a fixed term with companies. These fixed deposits which are considered as a part of the unsecured liabilities of the company, have a maximum maturity period of 3 years and carry a maximum rate of interest of 12.5% (earlier 14%). The public deposits accepted by the companies are governed by the provisions of the Companies (Acceptance of Deposits ) Rule, 1975. 

The important features of these regulations are:

1. Public Deposits cannot exceed 10% of the share capital plus free reserves

2. The maximum maturity period cannot exceed 3 year and the minimum maturity period cannot be less that 6 months.

3. No company with a net owned fund of less than Rs.1.00 crore shall invite public deposits.

4. The company inviting public deposits must disclose the prescribed information relaing to its financial performance and position

These guidelines apply with certain modifications to finance companies

The interest on public deposits is paid semi-annually on a cumulative or non cumulative basis. While the rate of interests offered on company deposits are attractive vis a vis bank deposits, it should be noted that there is no tax benefit on the interest income, nor, does the investment in CFD qualify for any tax rebate.

Besides, company deposits have a higher degree of default risk that bank deposits. For one thing, these deposits do not enjoy any risk cover form the Deposit Insurance Corporation like bank deposits. Further, these deposits are serviced and finally repaid from the earnings of the company which by nature are uncertain and fluctuate over time. To add to this, theses deposits are unsecured and rank pari passu with other unsecured liabilities for repayment in the event of liquidation. Therefore, the decision to invest in public deposits\ must be necessarily based on a thorough analysis of the financial stability and profitability of the company or on the credit rating provided by various rating agencies.

Money Laundering - Everything about it

1. Introduction
Money laundering is a serious threat to economic, security and social stability. It provides the fuel for drug dealers, terrorist, illegal arm dealers, corrupt public officials and others to operate and expand their criminal enterprises.  If unchecked, money laundering can erode the integrity of a nation’s financial institutions. Due to the high integration of capital markets money laundering can also adversely affect currencies and interest rates. Ultimately, laundered money flows into global financial system, where it can undermine national economies and currencies. Money laundering is thus not only a law enforcement problem; it also poses a serious threat to national and international security level.

Prevention of money laundering Act (PMLA) was passed in 2002 to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering and for matters connection therewith. It forms the core of the legal framework put in place by India to fight money laundering. PMLA and rules notified there under come into force from July 1, 2005.

2. What is money laundering??

Money laundering is directly or indirectly attempting to indulge or knowingly assisting or knowingly is a party or is actually involved in any process or activity connected with the property. It is the process of moving illegally acquired cash through financial system so that it appears to be legally acquired.