Tomorrowmakers

RBI asks banks to provide free facilities to savings bank account holders

Learn more about the RBI’s latest guidelines on making minimum facilities available free of charge to Basic Savings Bank Deposit Accounts.

RBI asks banks to provide free facilities to savings bank account holders

The Reserve Bank of India has asked banks to provide certain facilities to Basic Savings Bank Deposit Accounts (BSBDA) free of charge. This request is in line with the government’s financial inclusion drive and is aimed to provide minimum facilities like cheque book, ATM cards, a deposit of cash at bank branch etc. at no additional cost to the account holder. The bank will not be asking account holders for minimum balance maintenance for providing these services. The RBI has relaxed these norms on 10th June.

Notably, these facilities were treated as additional facilities earlier and attracted charges and the need to maintain a minimum balance.

Related: Understanding Your Savings Account

The banks can, however, provide additional service to these BSBDAs and they can continue to remain BSBD, provided the minimum services are provided free of charge. The banks can choose to or not charge for the additional facilities, depending on the disclosure. The BSBDA norms say that the account holder is not required to maintain any minimum balance and be able to avail the minimum services for free. There is no limit on the number and value of deposit one can do in a month in BSBDA.


What are BSBDA and its key features?

Basic Savings Bank Deposit Accounts don’t need any minimum balance and don’t charge for inoperative accounts. Thus it is tailor-made to meet the requirements of the weaker section of the society who often struggle to meet the minimum balance criteria. These accounts have a specific number of deposits and withdrawals allowed during the month and have an upper limit on balances and credits in the account.

What are the minimum facilities and advantages of the BSBDA?

With a BSBD account, the account holder gets a free passbook and ATM card (without any annual charge) and doesn’t need to pay for an inoperative account or failure to maintain a minimum balance. The services available free include deposit and withdrawal of cash, receipt of money through electronic payment means or through deposit/collection of cheques, at bank branches and ATMs.

Related: 5 Banks that give the best fixed deposit rate

Can BSBDA get converted to regular saving accounts?

If a BSBD account holder makes more than four withdrawals or request for cheque book at additional cost, the account can cease to be a BSBDA and becomes a regular account. However, if the bank doesn’t put any charge on such additional facilities or doesn’t require the need for minimum balance, this conversion will not happen.

The decision to allow services beyond the minimum specified limit lies with the bank. They can provide the same at no additional charge or enforcement of minimum balance criteria and devise a pricing mechanism in a consistent manner for other value-added services, thus keeping the account within the BSBD scope.

Inversely, regular accounts too can be converted into BSBD accounts. The account holder must give his or her consent in writing to the bank. The bank, in turn, must inform the account holder of the features of a BSBD account and the extent of service available under it. Here are some frequently asked questions about fixed deposit account. 

6 Financial lessons to learn from Indian dads

He held your hands when you took your first steps; as you start adulting, who better to teach you how to manage your money effectively than your dad

6 Financial lessons to learn from Indian dads

Indian dads are known to be intimidating and their tough love a little tricky to comprehend. But no one can deny the many sacrifices they make, unflinchingly. More often than not, we feel the burn of their hard-hitting wisdom much later in life, and among many other things where we conveniently ignore their wisdom, is in financial matters.

While most millennials and iGeneration yuppies struggle to manage their basic expenses within the monthly paycheck, our dads could run the entire household, pay for school/ tuition/ hobby class, manage sundry expenses, cater to the family’s whims and still manage the ritualistic Sunday movie and dinner plan with all the enthusiasm. 

We may not be able to fill in their shoes, but this Father’s Day pledge to learn a few financial lessons we can imbibe from desi dads to become a shadow of the superheroes they have been all their lives.

1. Always work hard

If you’re one among the million middle-class Indians, you’ve seen your father sweat it out for decades on end. He probably tried to inculcate the same habit in you. Every time he let you keep the extra pennies when you went fetching for bread and milk or did other household chores was his way of motivating you. Dad’s help us appreciate the dignity of labour, the value of money and realise the satisfaction of seeing the fruits of our efforts.

2. Have a vision

You probably remember being bribed for scoring good grades at school. It may have been a bicycle for some or a great summer vacation for others. Fathers fuel our ambitions and aspirations for the future and help explore a path to achieve them. They use the same financial vision to save up for various needs of the home including the bicycle he promised you.

3. Stay frugal

Most Indian fathers don’t spend on extravagant clothes or a flashy lifestyle. They manage to shape the lifestyle to suit the financial needs, albeit sometimes with an iron fist. They will go that extra mile and brutally bargain to save every Rupee they can. Every single sacrifice and bargain today goes towards a financial secure tomorrow. That is why Indian dads never miss the deadline of a bill payment or loan repayment and are able to build a beautiful home for us to call our own.

4. Plan ahead

While desi dads are frugal on all other counts when it comes to education and marriage of their ward, no expense is spared. He’s dreamt your dreams before you and planned well in advance. Old school dads had the trusty fixed deposit and post office schemes where deposits were made diligently, that shaped our future. Today we have a larger breadth of investment options and convenient technology, yet we find ourselves struggling.

5. Stay away from debt

Unless there is an emergency or a vehicle/ home loan to repay, Indian dads avoid debt like the plague. They perceive debt negatively and that is why if you think about it, most of our parents don’t even have a credit card. They will manage within their means and never go out of the way to pay interest on a non-essential item. 

6. Money is means to an end

Indian dads don’t splurge but never crib over the lack of money either. They will not let the rest of the family feel the strain of the financial burden and power through rough times. From them, we can learn to enjoy what we have, rather than sulk about what we don’t. Take courage from your father’s perseverance and contentment to tide over financial stress. 

In conclusion

We learn a lot from our fathers about every aspect of life. Sometimes we observe and emulate them, at others, we unknowingly inherit some qualities. Our desi values place immense importance on the value of money and if you haven’t picked up the tricks from your father yet it’s time to revisit old memories. His methods may have been a little conservative but everything he has done plays a big part in where you stand today.

Car registration number portability is becoming a reality

New Uttar Pradesh transport department scheme will allow portability of old registration number and retain it after a change of vehicle.

Car registration number portability is becoming a reality

It will be now possible for you to retain your old car registration number even after buying a new car. You will be able to port your old registration number plate like your mobile network service provider and retain it. Like the transport departments of Delhi, Chandigarh and Maharashtra earlier, Uttar Pradesh transport department has now approved vehicle registration portability scheme.

A Hindustan Times report has claimed that a mechanism, similar to the one in practice in the telecom sector, will be put in place. Notably, telecom subscribers can port their mobile number from one telecom service provider to another and still retain their earlier number. Once this system is replicated in the transport sector, you will be able to register your new vehicle against the old number, while your old car can be given a new number when sold, unless the vehicle is scrapped. This option will be available for all categories of cars and two-wheelers and can be opted for even when you change your vehicle category. However, considering the fact that a portion of the registration number signifies the category of the vehicle, it remains to be seen whether the entire number will be retained or a portion of it only.

Related: 6 Things you must check regarding your car insurance when relocating

The specifics of this regulation is not yet declared, however, it is said that the scheme will be available only to private and non-transport vehicles. The cost of this portability is also not declared officially, but expected to be around Rs. 25,000 for two-wheelers and Rs. 50,000 for cars and for change in category. 

This scheme is not likely to have any precondition of ownership of the vehicle for a specified time, scrapping of the vehicle, the number of times one can port the registration number and so on. This scheme is based on the old scheme launched by the previous government but is expected to be more flexible and practical in terms of implementation.

Related: All You Need to Know About Zero Depreciation Car Insurance

How is registration number transferred on sale of a vehicle?

Presently, in case of transfer of ownership of the vehicle, the registration also gets transferred. Form 29 has to be filled and submitted to the registering authority in the transferee and transferor’s area of residence. Depending on whether the state is interstate or within the state, the form and supporting documents need to be submitted within 45 or 14 days respectively. The transferee is required to pay a charge levied for the transfer.

What do the letters in the registration plate signify?

The first two letters in the registration number signify the state or region while the next two numbers refer to the district. The numbers in the end, generally 4 digits are unique numbers allotted to your vehicle.

Related: How motor insurance policy add-on covers work

How can road tax be affected by portability?

If interstate portability of registration plate is introduced, the government could introduce a flat road tax applicable across the country. Presumably, it can be done with the agreement of the states, some of who price it competitively to attract more registrations in their states. Are you aware of these 6 Motor Insurance terms? 

7 Habits that stop you from building wealth

Wealth building starts with the right behaviours in place. Break these 7 bad habits to get started on your journey to riches.

7 Reasons why you stay broke and how to avoid them

While we all intend to build wealth, it happens when we develop the right behaviours. Many people do not realise that their behaviours are keeping them away from meeting financial success. Here are 7 habits that you should break as you start on a successful financial journey.


1. Not making a budget

As the old saying goes: failing to plan is planning to fail. Paying off debt, building up savings and investments, owning what you need… it all requires a plan. The plan, when it comes to money, is a budget. You need to keep your expenses below your income; you need to save up to that car you want to buy; you need to have an emergency fund in place – all of this requires budgeting. Don’t worry if you find it challenging to stick to a budget; it takes time to get it right – you will modify it every month for the first few months, but once you figure it out it will help sort out your money problems quickly. A budget gives every penny you earn something valuable to do.

Related: 4 Signs that you are living a lifestyle you cannot afford

2. Not saving till you make it big

Far too many people think that they will start saving once they start earning more than they spend. This sort of thinking is what stops you from financial success. You don’t save what you don’t spend – you spend what you don’t save. The first thing you do when you earn an income is to save towards your goals. Then, live on whatever is left over. It doesn’t matter how little you earn, make saving a habit now and reap the benefits of compounding later. 

3. Not investing till you have a corpus

When you ask someone why they don’t invest – the most common answer you will hear is that they don’t have enough money to invest; that it is something the rich people who have enough to gamble do. The fact is you do not need lakhs to invest. You can start with as little as Rs 500 a month. Wealthy people invest not because they have wealth, but because it was an investment that earned wealth for them in the first place. 

Investing builds wealth – but do not expect to become a crorepati overnight. Invest for the long-term. Plan and work with at least a five-year horizon, if not more. Be disciplined with your investments and give them to grow.

Related: 5 Ways to start investments even if you don't have money right now

4. Spending what you expect to earn

You expect a raise at the end of this year; that investment you made is about to mature in 6 months – you will be able to use this money to pay up the debts you take on today. This is another reason why you stay broke. Don't count your chickens before they hatch. Your expenses today must be based on what you earn today, and not on what you may earn in the future. 

5. Expensive socialising

This happens more often if you live in a large urban centre. You go out with friends and co-workers twice a week, go on a dinner date twice a week, eat out as you are driving back home with your partner – you may not realise, but these expenses eat into your budget. Start cutting back a little. Try to find more economical options – why not organise a get-together at home instead of going out? How about meeting at a museum or a walk in a park rather than in a coffee shop? Why not go to a free event for a date once in a while?  

Related: Money lessons you only learn in your twenties

6. Can’t resist a sale

Sales are a great time to buy stuff. You get what you want, and you also save a little money. That feels like a victory. But did you buy that bag because it was on sale even though you don’t need it? Did you buy that dress because a buy-one-get-one promotion even though you may not wear it more than once? Sales can prove costly if you end up buying stuff that you don’t need in the first place. The bag was available for Rs 5,000 instead of the usual Rs 10,000 – but you wouldn’t have bought it at all if it was not on sale. You just spent Rs 5,000 on it; you could have saved it. A good deal is only useful if you need the item you are getting.

Related: Save a little now or save a lot later: what should you choose?

7. Borrowing for everything

Money makes the world go round. If you need some more, don’t hesitate to ask. But remember only ask for what you have earned. You think you are not getting paid enough – ask for a raise. Your boss will not give it to you unless he has to. Running short of money? Find a side-hustle to earn you some more. Do not borrow unless you have absolutely no other way out. The debt you take on needs to be serviced, and that will only make things even more difficult in the future. Plan your spendings today, build an emergency fund, don’t worry about keeping up appearances – and you will not have to borrow in the future. How money-savvy are the millennials? Read this interesting piece.

9 Unconventional jobs inspired by Bollywood

These jobs portrayed on screen that could make you re-think your career choice.

9 Not-so-cliched jobs inspired by Bollywood

India produces the maximum number of movies globally every year, in various languages for an eclectic mix of people. For the Hindi speaking majority, Bollywood is our staple fare of entertainment. We invest three hours going through a myriad of emotions, and some over-the-top song and dance routine. 

However, cinema doesn’t just stop at being entertainment. Movies and actors are known to have a deep influence on our thinking and society at large. So much so that a whole new generation of movie buffs are looking to style their careers based on portrayals on the silver screen.

Here is a list of nine unconventional jobs: 

1. Hair Stylist

Bollywood movies have rechristened the image of hairdressers. Whether it’s Kajol in ‘My name is Khan’ or the sassy Kareena Kapoor in ‘Ek Mai Aur Ekk Tu’, Bollywood’s portrayal of strong, career-oriented women has transformed the perception of these artists from barbers to the uber cool hair stylists.

2. Radio Jockey

Radio Jockeying may not be on anyone’s list of likely professions, but it is supercool nonetheless. Movies like ‘Lage Raho Munna Bhai', ‘Pyaar ke Side Effects' and more recently ‘Tumhari Sulu’ make it easier to convince folks of the fame and money that you can draw as an RJ. And who knows you could even transition to the silver screen one day, just as actors such as Ayushmann Khurrana and the late Sunil Dutt did.

Related: What do Guru, Titanic and The Wolf of Wall Street teach us about money? 

3. Diving instructor

If you’re a water baby and love being one with nature, away from the rush and claustrophobia of city life, then you would have surely been inspired by the scuba instructor Katrina Kaif portrays in ‘Zindagi Na Milegi Dobara’. Diving in pristine waters and spending lazy days on sun-kissed beached sound like the most envious job profile ever.

4. Sketch Artist

It takes tremendous amount of skill and practice to become a good sketch artist. If you’re finding it difficult to convince your folks that the doodling on the back pages of your notebook is more important to you than what’s written in the front, recommend them to have a look at Akshaye Khanna in ‘Dil Chahta Hai’ or Prateik Babbar in ‘Jaane Tu Ya Jaane Na’ to lend some credibility.

Related: How do Indian celebrities invest? 

5. Tourist Guide

If you love history and culture, meeting and interacting with new people, then a tourist guide could be your calling card. Like Aamir Khan in ‘Raja Hindustani’ and ‘Fanaa’, Shahrukh Khan in ‘Jab Harry Met Sejal’, Vaani Kapoor in ‘Befikre’ or Dev Anand in an aptly titled film ‘Guide’, you too could charm your way into someone’s heart.

6. Photography

Photography may not be as uncommon as some other professions on the list, but there is scepticism around it being anything more than a hobby. Rahul Bose in ‘Mr and Mrs Iyer’, Ranbir Kapoor in ‘Wake Up Sid’, Madhavan in ‘3 Idiots’ and Nawazuddin Siddiqui in ‘Photograph’ have inspired many to pursue this craft from a hobby to a mainstream profession.

Related: Offbeat career options for the modern woman 

7. Art Restoration

If you’re attracted to art and heritage, consider becoming frescoes and artefact conservationist. Travel back in time as you breathe life into tangible culture of yore as Deepika Padukone did in 'Love Aaj Kal'.

8. Magician

One of the oldest art forms is on the brink of extinction. Even with all the CGI and gadgetry, nothing beats the sparkle of magic right in front of your eyes. No wonder the art of misdirection makes for great cinema and actors such as Hrithik Roshan in ‘Guzaarish’, Aamir Khan in ‘Dhoom 3’ and Amitabh Bachchan in the literally-translated ‘Jaadugar’ had us mesmerised, while many inspired to try their hand at magic.

9. Chef

Life in a kitchen is tough, but if you love food and want to share your passion with others, becoming a chef can be quite fulfilling. Food and Bollywood make for a great combo hence we have Rajesh Khanna in ‘Bawarchi’, Amitabh Bachchan in ‘Cheeni Kum’, Govinda in ‘Hero No 1’, Shahrukh Khan in ‘Duplicate’, Saif Ali Khan in both ‘Salaam Namaste’ and ‘Chef’, and many other movies where the leading actors don the chef’s hat.

In closing

Movies not only entertain, but also hold a mirror to society. While the conventional doctor, lawyer, engineer professions are still great career choices, with changing times we need to open our minds to the limitless possibilities around. Why not take inspiration from Oscar Wilde’s famous words "Life imitates Art far more than Art imitates Life". Do you feel that you need to take a career break? Watch out for these warning signs.

Everything you need to know about Google Pay

Wondering why Google Pay is the talk of the town? Here is everything you need to know about it.

Is Google Pay the best payments app in India?

Sending and receiving money online has become a common practice in India today. Digital wallets have been upping their game with unique features and smooth user interfaces. Google had brought Tez to join the league of digital wallets and handle everything payments related in India. It later re-branded the Tez app as Google Pay keeping in view the ever-growing UPI payments market in India. Google Pay has been launched with a slew of amazing features and its expansion plans are all set to transform the payments market in India.

Related: How Unified Payment Interface (UPI) can change the way you bank

How does Google Pay work?

Google Pay enables sending and receiving money, but unlike other digital wallets, the payments can be received directly into the bank accounts. So the entire concern of receiving money in wallets and then transferring into the bank account has been eliminated.  

Interestingly, a person doesn’t have to be on the Google Pay app to receive payments. Google Pay simplifies the process of money transfer even through their website. 

Though the primary function of the app is to allow simple money transfer transactions, it also allows the users to make payments in stores that accept UPI-based transactions.

The user has to do the following:

1.  Link the bank account with Google Pay.

2. Set the UPI pin.

Related: UPI: Here's what you must know about this new-age payment mode

Unique features

Google Pay boasts of many unique features in comparison to all the other options available in the market. Some of them are:

1. The transactions are instant

2. Money can be sent to and received directly from bank accounts

3.  Tez Shield -- multi-layered security with 24*7 protection from frauds -- facilitates highly secure transactions

4. Because the money is transferred from bank accounts, all transactions whether small or big can be done through the app

5. The app is available in eight Indian languages, making it more acceptable

6. The app also provides multiple payment options which means the users can transact through their mobile numbers or even Virtual Payment Address (VPAs)

7.  Scratch cards are another attraction as Google Pay provides lucrative cashbacks and offers on varying transactions. These cashbacks are directly credited to a linked bank account 

8. The compatibility of the app with all the banks is further proof of its security, network-reach and service quality

Related: Everything you need to know about the BHIM app

Google Pay vs other UPI apps

Google Pay is more customised and hugely eases the entire process of money transfer and payments market in India.  

It has introduced Google Pay for businesses, a special app that allows entrepreneurs to connect directly with customers and provide amazing deals. Companies that have their current accounts linked with the app can even receive payments up to Rs. 50,000 from the customers for free.

Cash Mode is another Google Pay feature that is unique. It allows users to transfer money to other Google Pay users in proximity without entering the bank details or mobile number.

Apart from these, Google Pay is all set to ace the feature of pre-approved loans by providing approvals to users through the app in a matter of minutes. It also aims at facilitating payments at retail stores such as Big Bazaar and FBB. 

Related: UPI could soon be an alternative payment option for retail IPO investors

Conclusion:

Google Pay is taking giant steps at revolutionising the payments market in India. Consumers/users  will miss a hoard of features and easy money transfer transactions if they don’t use the app. If you are skeptical about mobile banking, check what makes it safe

IPOs that have disappointed investors in the last 10 years

With a slew of IPOs poised for 2019, it makes sense to study why new issues have suffered in the years since 2008

IPOs struggle over the past decade, brand names make no difference

If you have even a nodding acquaintance with the business pages of your daily newspaper, you would know by now that the much-talked-of IPOs from ride-sharing companies Uber and Lyft have flopped.

Uber went public in May 2019 with a $82.4-billion valuation, with the stock priced $45. However, despite the hype surrounding its market entry, the Uber stock registered the worst first-day dollar loss in US IPO history, notching a 7.6% loss on debut.

Lyft, with a $24-billion valuation, also disappointed investors on its debut two months earlier. Pegged at $72, the stock spiralled to $88.60 on opening day, only to quickly plummet below the IPO price. The swarm of retail investors who rushed in to make a killing was left in the lurch.

Related: All about IPOs in India

Why IPOs Fail?

Both Uber and Lyft are American businesses and the IPOs were on US bourses, but there is a lesson here for Indian investors as well; it is this: businesses have to have a sustainable and profitable model to succeed.

Companies take the IPO route to raise capital, maybe for expansion or squaring off their debts, with private investors, if any, divesting or diluting their stake. However, if the market does not find the business viable in the long run, or if the company’s debts outstrip earnings or show similar negative indicators, the IPO will very likely fail.

For instance, while Uber and Lyft have huge potentials, their intense price wars – hence their operations – were also heavily subsidised. This has also pushed them deeper into the red, making analysts unconvinced about their valuations or profitability.

Kathleen Smith, principal at investment banker of Renaissance Capital, identified over-valuation as the root issue. “The problem is these companies have been valued privately at levels that have not followed through in the public market,” she was quoted by CNN as saying.

Related: UPI could soon be an alternative payment option for retail IPO investors

Reliance Power Flops

Notably, as a uber-brand like Uber has shown, brand recall may not always work with investors if fundamentals are weak, or if there is a disconnect between private placements and public markets. 

This is true of all markets, not the US alone; the story of IPO flops in India is best reflected in the IPO of Reliance Power way back in January 2008. 

When the company debuted in the capital market, it seemed to have depended more on external factors to ride on – the Reliance brand and the appeal of the energy sector – rather than strong fundamentals.

Thus, despite profits of only Rs 16 lakh, it had a price band of Rs 405-450. Retail investors too were initially blinded by the brand name and the performance of other energy companies (Tata Power, NTPC), and the IPO traded at 80% premium in the grey market.

Yet, in the end, the Reliance magic failed – a first in the history of the Indian stock markets. On the opening day, the stock spiralled up 19% to trade at Rs 538 for all of four minutes before plunging to Rs 355 and never recovering enough to even close to the issue price. By the close of trading, investors’ wealth in hundreds of crores had been eroded.

So what went wrong? The first reason was, of course, it was its aggressive pricing in comparison to its peers, whose financials were stronger than that of Reliance Power. Another reason was the overhang of the US subprime crisis.

The Management Accountant, the journal of the Institute of Cost Accountants of India, noted in a case study later that between January 4, when Reliance Power announced the issue, and its listing on February 11, the benchmark Sensex fell over 4,000 points, or almost 20%. “The IPO was not helped by a souring in global market mood,” the journal noted.

Related: What is ASBA? All you need to know

Other Letdowns

Is Reliance Power the biggest destroyer of wealth among Indian IPOs in the past decade or so? Not really; there have been a host of them that have disappointed, and Reliance Power is just one of them – though arguably the biggest among them as a brand, though the list does include a few well-known names.

A recent analysis published by The Economic Times shows that almost 61% of IPOs from 2008 – 100 out of 164 – are trading below their debut price in April 2019. Of this, six infrastructure and real estate stocks – Gammon Infra, Shriram EPC, DB Realty, Reliance Power, Jaypee Infratech and KSK Energy Ventures – have witnessed their share value erode by over 90%; in fact, the ‘big 3’ – Reliance, Jaypee and Gammon – lost over 98%.

While many prominent stocks have lost over half the share value in this period (S Chand and ICICI Securities, among several others), only 44 have registered double-digit returns even as the Sensex doubled during this period. 

What has been more disappointing has been the performance of most state-owned undertakings. This includes the high-profile IPO of Coal India, which is still valued at about the same level nine years down the line; Hindustan Aeronauticals and Cochin Shipyard have also floundered.

For most of these stocks, analysts attributed the same reasons as had been cited for the Uber and Lyft debacles: over-valuation and weak fundamentals.

2018 Déjà vu

The story of the decade played out prominently in the year gone by, with seven of the 10 biggest IPOs of the year trading at levels below their debut prices. 

This has, in turn, rubbed off on the IPO Index of the Bombay Stock Exchange, which fell nearly 15% between the beginning the year and end-September. 

Interestingly, 80% of the Rs 27,900 crore raised by 69 IPOs in 2018 was accounted for by these 10 companies; by the year-end, only three were trading over the IPO price – Bandhan Bank, HDFC Mutual and Lemon Tree Hotels. 

Economic Times analysis of trading performance shows that 60% of the 47 regularly traded stocks (of 69 that entered the primary market during the year) were trading below their IPO prices. The biggest loser was Ashoka Metcast, which lost some 75% of its issue value.

The underperformance has wiped off investors’ wealth to the tune of some Rs 4,700 crore. 

The DMart Story

But it would be wrong to assume that the years since 2008 have been a decade-long story of gloom and doom for IPOs. Stocks of companies with strong business fundamentals have fared well in the markets.

From last year’s lot, the surprise has come from Inflame Appliances, which manufactures LPG gas stoves, with an issue size of Rs 6.48 crore; it yielded returns of 76% for investors. 

But it is Indian retail chain DMart that has shown that if the business model is strong, the strength of a brand does not matter. DMart’s 112 stores in some 41 cities was known to its loyal customer base for offering quality at affordable prices when its IPO came out in March 2017.

So though low-profile compared to Big Bazar (the rival in the brick-and-mortar world), and Flipkart or Snapdeal (competitors from the e-commerce space), DMart made history of sorts when its maiden market offering was oversubscribed 104 times.

The shares issued for qualified institutional buyers were oversubscribed 144 times, that for non-institutional investors 277 times, and retail investors seven times. Moreover, the stock debuted at Rs 600, more than double the issue price of Rs 299.

Its IPO clicked because of a host of reasons, the foremost being the impression that the promoters were focused on building the business, keeping the profit margins low so they could keep shelf price affordable.  

Last Words

Since we started the story of disappointing IPOs with that of Uber and Lyft, let us see what US billionaire investor Warren Buffett has to say about those two or any other IPOs for that matter.

In an interview to CNBC before Uber made its maiden issue, Buffett explained why he had decided to pass it; it was because he had never bought an initial stock offering.

He was also critical of investors who fell the hype around an IPO, and said they were lured into buying into it mainly because they did not want to fall behind in getting rich. “That’s not a sound basis for an investment,” Buffett told CNBC.

However, people who invested in Reliance Industries shares way back in 1977 may differ with Buffett on the question of IPOs; the stock has more than doubled shareholders’ wealth every 2.5 years since its debut, and anyone who had invested Rs 10,000 back then would be a crorepati today.

So what are the important points one should consider before investing in an IPO? There are several:

* First, there is the promoter’s stake post-issue: a holding on the higher side reflects the management’s commitment to the company and bigger vision for it;

* Second, the promoter’s background is very important, as it reflects his/her capabilities: the DMart issue is a case in point;

*Third, the number of projects in the pipeline and their size also speaks volumes about the company’s scalability going forward, and,

*Finally, speculative gains should be avoided, with the focus being on long-term wealth creation.

A host of IPOs are in the pipeline this year: keep your wits about you so you don’t get swept away by the hype, weigh the pros and cons and you will be fine.  Clueless about investing in stock markets? Here are some options.

The Red Cross story: where humanity rises above everything else

A movement that began on the ruins of a battlefield is today synonymous with caring for the distressed – and blood for those who need it.

A helping hand during wars and calamities: The Red Cross story

Even as Cyclone Fani picked up momentum before it unleashed its fury on the Orissa coastline this May, a series of early warnings were reaching to some 20 million people in vulnerable areas of the state: “Try not to panic. Listen to the radio and follow instructions. We will help. The Red Cross is here with you.”

As it can be guessed, the messages were relayed by the Indian Red Cross. The organisation, aided by about 1,500 volunteers trained in first aid and disaster management, also helped evacuate communities to safer areas; more than 15,000 affected people stayed in the 65 shelters it opened in Orissa. From start to finish, it was an outstanding operation.

Related: 3 Insurance policies to cope with natural disasters 

Red Cross Movement

As the name suggests, the Indian Red Cross is the local chapter of the International Red Cross and Red Crescent Movement, a global humanitarian network of nearly 80 million people who work towards protecting humankind, ensuring respect for them without racial prejudice, and preventing and lessening of suffering, whatever be the cause – manmade or natural. 

Totally voluntary, the Red Cross movement provides relief in times of natural disasters such as cyclones, earthquakes and tsunamis through its local chapters; the involvement of the Indian Red Cross during Fani is an example. 

Red Cross volunteers, who keep themselves distanced from political, racial, religious or ideological controversies, are also found in war zones. Subsequently, the affiliated societies maintain their autonomy though they are subject to the laws of their respective countries.  

It also carries out various activities like running blood banks, discussed later.

The Beginning

The wholly-charitable not-for-profit movement, ironically, is the result of a business trip cut short. In June 1859, Swiss businessman Jean-Henri Dunant, also called Henry Dunant, visited Italy to apprise Napoleon III of the problems associated with doing business in Algeria, then under French control. The trip did not pan out quite as the Swiss expected.

When he arrived at the small Italian town of Solferino, where part of the ongoing Austro-Sardinian War was playing out, it was the site of an estimated 40,000 dead or wounded soldiers; there was no trace of basic medical attention. A deeply religious man, the horrified Dunant gathered local villagers to provide care to the wounded, without discriminating between which army they belonged to.

Later, he penned a book recounting his experiences in Solferino, and proposed the formation of voluntary relief organisations to help nurse wounded soldiers. Durant also proposed an international treaty to protect medics and field hospitals set up for the purpose.

The suggestions appealed to the Geneva Society for Public Welfare, a philanthropic organisation, which in 1863 formed the “International Committee for Relief to the Wounded” to implement Dunant’s proposals. 

It is this committee that over time evolved into the International Red Cross of today, based in Geneva. In a nod to its Swiss roots, the committee adopted the Swiss flag in reverse – a red cross-on-white – as its symbol, while a red crescent replaced the cross in Islamic nations.

Related: How treatment of hepatitis has evolved over the years

Fund Source

The Red Cross is a 100% voluntary nonprofit, and so it has to subsist on donations, with more than 75% being accounted for by government donations over the past few years. International organisations such as the European Commission also provide funds, as do corporates and individuals. 

In 2018, the International Red Cross had projected a budget of 2 billion Swiss francs (CHF), or about Rs 140 billion, reflecting a 10% increase over that of the previous year. It reckons to have spent 90% of donations received on relief work since 2008, gets its books audited by internationally reputed audit firms that it shares with the donors, and has a policy of allowing donors to carry out audits of their own independently. The organisation is clear about refusing aid that compromises on its independence.

Like the parent body, the Indian chapter too runs on donations. Often, national societies undertake unique measures to raise funds. The American Red Cross, for instance, encourages people to come up with their own ideas to mobilise finances – from holding marathons to launching campaigns of their own and organising peer-to-peer fundraisers.

Related: Why I started paying attention to my health at 40?

Blood Bank

The Indian Red Cross Society opened its first blood bank in Kolkata back in 1942; today, it operates out of the national headquarters in Delhi, which is equipped not only for collections from donation camps but also to test for HIV I & II, HBs Ag, HCV, VDRL and malaria. Also every year on 14 June, people across the world celebrate World Blood Donor Day (WBDD). This day was established in 2004 to raise awareness of the need for safe blood and blood products. It is also celebrated to show gratitude towards blood donors for their voluntary, life-saving gifts of blood.

Fully-automated advance technology is used for the testing as well as separation and storage of the various blood components such as freshly frozen plasma, platelet-rich plasma, platelet concentrate, packed cells, cryoprecipitate and platelet aphaeresis. Since blood plays a critical role in Indian operations, refer to this rate card for various blood components. 

Its facilities have ISO certification from the Bureau of Indian Standards (BS), the National Accreditation Board for Testing & Calibration Laboratories (NABL) and the National Accreditation Board for Hospitals (NABH). As per its website, its central blood bank meets 50% of the requirement of thalassaemia patients in and around Delhi. 

A substantial portion of the blood collected is through replacement donors, though the aim is to achieve 100% voluntary donation in future. 

Related: Kidney Problems: How much do they really cost? 

Why Sell ‘Free’ Blood?

The blood collected is got free – though donations – yet it is sold; the Indian Red Cross imposes various processing charges on the blood distributed – depending on the type of component required.

Admittedly, 90% of total collection in the capital region is distributed free of service charge, while certain groups of patients such as those with thalassaemia and HIV, among others, and selected hospitals are supplied free of charge. But outside these groups, a charge is levied. 

The Indian chapter is not alone, societies across the world charge for blood acquired free, and the question often asked is why? The answer is supplied by the National Blood Authority of Australia, which gets its supplies free from the local Red Cross society. “Whilst blood donation is voluntary, the collection, processing, testing and distribution of blood and blood products incur significant costs,” it says. Nonetheless, this World Blood Donor Day, donate blood and save a life!  Did you know these facts about women blood donors? Take this quiz to find out. 

All you need to know about PPF account

Everything you ever wanted to know about opening a Public Provident Fund (PPF) account.

All about Public Provident Fund

The Public Provident Fund Scheme (PPF) was introduced in 1968 to mobilise small savings in the form of investment and allow investors to earn a safe return on it. To encourage investment the scheme also provides tax exemptions on the amount invested, the interest earned and on the final maturity amount redeemed. It is an ideal choice for anyone looking to make safe investments with guaranteed returns to build a retirement corpus while also saving on tax liability.

When introduced, the scheme was open to Individuals, Hindu Undivided Families (HUF’s), Association of Persons (AOP) and Non-Resident Indians (NRIs). But today only individuals can open a PPF account. The interest rate earned by the investment is decided on a quarterly basis and hence can fluctuate a bit over the long maturity period. 

Related: Important points you should know before opening a PPF account for your children 

The salient features of PPF are:
    •    It carries a sovereign guarantee, and hence is among the safest investment options available
    •    It earns a healthy rate of interest
    •    It is tax-free

PPF scheme features

Tenure of the account: The minimum tenure of a PPF account is 15 years. It can be extended for a block of 5 years at the end of the tenure. You can extend it as many times as you require – but it would only be in blocks of 5 years. The extension can be made within a year of the maturity date. The 15-year maturity period is calculated based on the end of the year, and not the date of account opening. 

Investment limits: A minimum of Rs 500 and a maximum of Rs 1.5 lakh can be deposited per year in your PPF account. A maximum of 12 deposits are allowed in a year, and at least one must be made each year to keep the account active. 

Nomination: You can add a nominee to your PPF account at any time during its tenure or at the time of opening the account.

Loan/Withdrawal of amounts allowable: You can take a loan against your PPF account after it has been active for three years. The maximum loan allowed is capped at 25% of the closing balance of the previous year. Pre-mature withdrawal is allowed from the 6th year, under circumstances laid out by the PPF rules.

Related: Comparison of PPF and life insurance: Which comes first?

Eligibility criteria for opening a PPF account

To open a PPF account you should be: 

  • a resident individual 
  • a resident minor, in which case a legal guardian would open the account for the minor.

Remember that only one account is allowed per individual. 

Further, accounts cannot be opened by HUFs, BOIs and AOPs starting May 13, 2005. Joint ownership of a PPF account is not allowed. NRIs cannot open a PPF account, but an individual who has become an NRI during the period of the account can continue investing in the same till the end of tenure. 

Process of PPF account opening

You could apply either online or offline to open a PPF account. The process for both of these options is listed below.

Offline process

To open a PPF account, just walk into a post office or bank of your choice and ask for Form A of PPF. You should also carry self-attested copies of an identity proof and an address proof to submit with the filled Form A. A minimum of Rs 100 is to be deposited while opening the account. You could make the first deposit either in cash or through a cheque. 

Once you submit the application, along with the required document and the amount for the first deposit, the officer would issue a passbook for the new account to you. This will be used to capture the details of your PPF account including details of the deposits made, interest earned, total balance, details of any loans taken, and withdrawals made. 

Online process

Some of the banks offer the facility to open a PPF account online. Please check with your bank to ensure that such a facility is available. While the KYC documents required to open the account remain the same as in an offline process, you would also need:

  • to have an active savings account with the bank
  • activate net banking facility on your account
  • Aadhaar card details

Login to the net banking portal and select the option for opening a PPF account. Choose the savings account from which deposits will be made to the PPF account. Complete the Aadhaar based e-verification process to have your account opened. 

Provided below is the list of banks with which you can open a PPF account:

Public Sector Banks:

State Bank of India PPF
State Bank of Travancore PPF
State Bank of Hyderabad PPF
State Bank of Mysore PPF
State Bank of Bikaner and Jaipur PPF
State Bank of Patiala PPF
Allahabad Bank PPF
Bank of Baroda PPF
Bank of India PPF
Bank of Maharashtra PPF
Canara Bank PPF
Central Bank of India PPF
Corporation Bank PPF
Dena Bank PPF
IDBI Bank PPF
Indian Overseas Bank PPF
Oriental Bank of Commerce PPF
Punjab National Bank PPF
Union Bank of India PPF
United Bank of India PPF
Andhra Bank PPF
Vijaya Bank PPF
Punjab and Sind Bank PPF
UCO Bank PPF

Private Banks:

ICICI Bank
Axis Bank
PPF Forms

Below are the details of various forms associated with PPF. You can use these forms to carry out actions listed. 

FORMS APPLICABLE FOR PPF

DESCRIPTION OF THE FORM

LINKS TO PPF FORMS

 

Form A

To open a Public Provident Fund Account (PPF Account)

https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/PPFActOpening.pdf

 

Form B

To make deposits into/ repay loans taken against a PPF account

https://www.incometaxindia.gov.in/Forms/Public%20Provident%20Fund%20Scheme,%201968/103120000000008019.pdf

 

Form C

To make withdrawals from a PPF account

https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/PPFWithdrawal.pdf

 

Form D

To request a loan against a PPF account

https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/PPFLoan.pdf

 

Form E

To add a nominee to a PPF account

https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/PPFNomination.pdf

 

Form F

To make changes to PPF account nomination information

https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/PPFNominationVariation.pdf

 

Form G

To claim funds in a PPF account by a nominee/legal heir

https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/PPFClaim.pdf#search=form%20g%20ppf

 

Form H

To extend the maturity period of a PPF account

https://www.indiapost.gov.in/VAS/DOP_PDFFiles/form/PPFContinuation.pdf

Here is a step-by-step guide to enjoying a luxury yacht holiday!

Here is a handy checklist to comprehensively enjoy a luxury yacht holiday, this World Oceans Day.

This World Oceans Day, plan your holiday on a luxury yacht

Owning a luxury yacht is a symbol of having arrived in life. It means that you possess one of the ultimate trappings of wealth. Leading industrialists and corporates across India and the world own luxury yachts. However, it is not necessary to be a billionaire to experience the opulence of a luxury yacht. Today, one can get access to a yacht via timeshare, fractional ownership or by simply renting it out. This World Oceans Day, indulge in an experience of a lifetime and see the world from a different perspective. 

Related: USA? Europe? Kerala? 5 Ways to take that vacation this summer! 

Alternative to owning a yacht

By opting for a timeshare program, one can use a yacht of one’s preference for a specific number of hours in a year. Number of hours will also depend on the size of the boat. Bigger the boat, fewer are the number of hours one can use it for.

You can even be a part owner of a luxury yacht without meeting the other owners. This enables you to use the yacht without worrying about maintenance. A Special Purpose Vehicle has to be formed for enabling joint ownership. The yacht is kept by the company which bought the owners together. The yacht is also maintained by this company.

Related: Foreign currency options to consider when vacationing abroad 

Selecting a yacht

Assuming that you have opted for renting or for a timeshare, the next step is to select a luxury yacht. You will have to begin by identifying the number of cabins or berths which are required. Secondly, you may have to decide whether you need only a skipper or an entire crew. Thirdly, you will have to evaluate the sailing abilities of all those who will be on the yacht including yourself. Fourthly, you may have to take a call between luxury and performance as both may not be attainable. Therefore you can either select a yacht which offers speed and possess better sailing characteristic or pick a luxury yacht which is heavier.

Related: Best Destinations in India for every budget 

Number of people who are joining

The type of yacht which you select along with accommodation depends on the number of people who would be a part of this holiday. Accordingly, you will also need to make provisions for the number of crew on the yacht. Finalising all this will help you to set the overall tone of your budget.

Support crew

It would be advisable to get a chef who can whip up different dishes to satiate the refined palates of your guests. You could even arrange for a music band to keep your guests entertained.

Where to sail

It is important to determine where to sail. Accordingly, you will be able to look out for hotels and yachts. This is another factor which will determine the pricing of the yacht. Cost of accommodation will also be influenced by this. For instance, you can sail off the coast of Mumbai for a few hours or for an entire day. You can even sail all the way to Alibaug or Goa or Lakshadweep.

Related: Slide in rupee can impact forward travel bookings: Here's how

Completing the paperwork

Taking your luxury yacht on a cruise is easier said than done. Depending on the country of your residence, you will have to deal with all the required paperwork. For example, if you plan to take your yacht to Lakshadweep or Goa all by yourself, then you must do the following:

  • Acquire relevant certifications and permissions to operate the yacht
  • Secure an ‘A’ classified yacht as this will be able to withstand rough weather
  • The company offering the yacht will need your personal credentials, financial snapshot, social standing and references who will vouch for you
  • Get a yacht identification number offered by the port authority
  • Secure a certificate from the Indian Marine Federation which will be provided after surveying the yacht
  • Purchase hull and personal accident insurance policies
  • If you are passing by a fishing society, you will have to get an NOC from them
  • Permission needs to be taken from the harbour master to sail out of the port. The harbour master will also intimate the destination port about your arrival.

Apart from all this, in case you are heading onto a foreign destination, you will also need to arrange tourist visas for all those who are travelling.

Accommodation

If you are planning to dock your yacht at a destination, you may also want to explore it. In such a case, appropriate accommodation may have to be arranged for your guests and yourself.
Remember that this is just an indicative list and you may have to research about specific requirements that may be required depending on your country of residence. If you are looking for some pocket-friendly places, then you must check out these 5 destinations for holidays under Rs 1 lakh.