Instant Money Transfer using Mobile

Posted on December 10, 2010 by admin

A new service was introduced by National Payments Corporation of India (NPCI) last week – IMPS (Interbank Mobile Payment Service). IMPS enables instant fund transfer from one bank account to another across the country almost instantly.
Currently this service is provided by 7 banks – SBI, ICICI Bank, HDFC Bank, Yes Bank, Bank of India, Axis Bank & Union Bank of India.

So how do I use this service?
STEP 1: Register for the service with your bank. (you will need to have downloaded the mobile banking application of the bank in your mobile). Union Bank allows this service through SMS also.
Bank will give a MMID (a 7 digit number) for your mobile-account combination.  This is your unique ID for you to send/receive money.
STEP 2: Get the mobile no & MMID of the beneficiary
STEP 3: Use the your bank’s mobile banking application to send the IMPS – specify the mobile number & MMID of the beneficiary and the amount to be transferred.

Funds are transferred instantaneously. I received funds from my friend in 15 mins – from ICICI Bank to Axis Bank.

Presently the service is provided free of cost, probably to increase the awareness, later banks may choose to charge for the service. Currently only the cost of connecting to the bank from your mobile is the only charge.

How to get MMID – different banks have different process of obtaining MMID. Axis Bank in fact sent MMID to the registered mobile number for the account holders. A good move to help account holders who want to use this service to receive funds.

It would be better when more banks join this service and also when banks allow this service through SMS since it will make this service universal even to people with lower end mobile phones.

Transfer Limits
Currently a per day limit of Rs.50,000/- is set for encrypted transaction and Rs.1,000/- for unencrypted transaction.
Need to confirm whether this is only sending limit or receiving limit also.

I see an opportunity in integrating this payment mode with online payment gateway wherein a person can make payment through this service for online shopping. So who will be providing this feature first…

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2G Scam JPC Probe

Posted on November 30, 2010 by admin

2G Scam is the biggest scam to hit Indians.  CAG has already submitted it’s report wherein it has pointed irregularities by A.Raja as the Minister and the DoT in spectrum allocation to companies in 2007/08.

Opposition has been demanding a JPC probe on 2G Scam and has held Parliament to randsom by not allowing it to function for the 12th straight day.  It is surprising that the opposition is pressing for a JPC probe given that past JPC probe findings/recommendations have not been implemented or been implemented as a watered down version.
Given this background, Government & Congress must not ‘fear’ a JPC probe, but something is stopping them from allowing it.

There are many questions in the public’s mind:
1) What is the impact of a JPC probe? Can it indict any person and recommend punishment?
2) Can the recommendations of a JPC probe be disputed in Court of Law?
3) is JPC probe ranked higher than a Supreme Court monitored probe and suit?

Questions for which public do not have an answer. a good reference /backgrounder to JPC is this article in MSN.

This article in BUSINESS LINE describes a good way forward in the probe.

I think most Indians will want to see what happens in the end – will the guilty be ever punished? Will Government take the bold decision to take back the spectrum of the fraudulent companies?

If Government is serious on delivering Justice it should work speedily on this case and punish the guilty.

Opposition would do better if he ensures that this scam remains in the constant public view and also the progress is regularly reported by the investigating agencies, authorities.

When an agency like CAG has probed and found that policies, rules have been tampered with to benefit a few, then I think it is high time the guilty are punished. If nothing happens then probably we should punish CAG for the wrong-findings…

Probably too many people have been benefited from the scam that they are not interested in bringing the guilty to justice

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You cannot invest in MF for your wife

Posted on November 17, 2010 by admin

From 15th November 2010, MF invests can be made by self-issued cheque only. You cannot invest using your friend’s, relative’s or spouse’s issued cheque. All investments with third-party cheques will be rejected.

Exceptions to this:
1. Investor for Minors – Up to Rs.50,000/- by the Parent/ Grand Parent/ Related Person
2. Employer on behalf of Employees for SIP investments through Payroll deductions
3. Payments by Custodians on behalf of FIIs or clients.

Such applications will require PAN & KYC for the person/entity making the payment & also declaration for the relationship with the 1st holder.

In case of Payment by Demand Drafts, a certificate from banker about the a/c holder’s name & a/c no. debited for issue of the DD is to be submitted. This will virtually ensure that DDs are not used for investing in MF considering it is a pain to get the certificate from the bank (may also incur additional charges). DDs taken using cash payment will not be accepted since the banker’s certificate cannot be submitted for this case.

New rules now provide an option to register multiple bank a/cs to a folio so that cheque can be issued from any a/c.

Further, in case the cheque from other a/c is accepted if it has the investor’s name printed on it or if a copy of the statement attested by bank manager is a also submitted. Very cumbersome process in the 2nd case (for most investors with a/cs in Nationalised Banks).

Few questions: (UPDATE: 29/NOV – I got replies to my queries to CAMS)
1. There are 3 investors in the application. Can any one issue the cheque or only the 1st applicant/holder’s cheque is allowed?
REPLY BY CAMS: 1st applicant cheque is allowed. Cheque/Bank Statement/Bank Passbook should contain the name of the First Holder in MF Application.
2. If I have a joint a/c (Either or surviror)  with my wife and my wife issues the cheque from the same a/c for investment in my name, is that allowed?
REPLY BY CAMS: Cheque/Bank Statement/Bank Passbook should contain the name of the First Holder in MF Application.
3. Why cannot a member of the family issue cheque for other members of the family? Like Husband issuing cheque for wife or children?
REPLY BY CAMS: AMFI circular says the cheque should be issued from the First Account Holder only.
4.  I issue a cheque wherein my name is not printed on the cheque leaf. However I sign the cheque (same signature as in the application form). Why do I need Banker’s attestation? If the cheque is passed by the bank, it proves that the cheque leaf belongs to my a/c.
REPLY BY CAMS: Before depositing the cheque itself, we need to ensure that the cheque pertains to the First Holder only. Latest Bank Statement/Passbook with A/c Holder’s Name and Bak Account Number from where cheque is issued can be submitted as a proof.

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KYC Mandatory for all investors in Mutual Fund

Posted on November 17, 2010 by admin

With effect from 1st January 2011, KYC will be mandatory for all investors irrespective of amount of investment.

In case of investment for a minor, Guardian/Parent who is investing on behalf of the minor must be KYC complaint.

Impact of this move:
1. Even small investors have to now register for KYC.
2. Address updates have to be made in KYC for update in the Folios. However, contact details (phone & email) have to be separately updated with each AMC/for each folio.

UPDATE:

Q> KYC for investments after 1st Jan 2011 – what happens to existing SIPs? Do they also require KYCs to continue investment?
Reply> KYC will be mandatory irrespective of investment amount for Individuals and Minors for only those SIPs registered on or after 01-Jan-2011. It is already mandatory for all other investors irrespective of invetsment amount.
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What form of Government is Correct?

Posted on November 17, 2010 by admin

There is much hype about Democracy being the best way to govern a country. Other forms of governance like communism, dictatorship, feudalism (king rules) are all against the basic rights of an individual.

So is Democracy the best?

Let’s start with identifying how to measure which is the best?
- Should we take the economic power of a country to find if a form of governance is good for the citizens of the country? If yes, then doesn’t China with it’s Communist Government rank high on the economic front?
- Should we take the economic equality i.e., none of the citizens are poor, as a parameter? If yes, wouldn’t USA & India rank low considering the economic inequality existing in these countries.
- Should we take the wealth of the country? Gulf countries with their monarchy will beat the so-called democratic countries on this front.
- Should we take the freedom of speech as the criteria to say it is the best form of governance? If yes, don’t we have many democratic countries which officially restrict the information that flows to the public and also the issue of “paid news”. Take example of Tamil Nadu, India – the public TV network will always beam news that are favourable to the party in power and the TV channels of the parties will beam news that are favourable to their respective parties.
Also does everybody gets the right to speak/voice their opinion about an issue? No will be the answer from majority of the citizens – only the connected find their voices being published.
If you mean ‘freedom of speech’ at the ground level where people can openly voice their opinion – even at this level the bullies win over innocent citizens. How many have been able to protest against their local councilor or official?
- Should we consider the law & order in the country as a measure? On this only probably the Scandinavian countries (with their constitutional monarchy) will score high and most democracies will far poorly including USA and most Western European Countries.
Ideally the best measure of how good the governance of a country is “how peaceful and happy the citizens of the country are?” – By peaceful & happy I mean how much the needs (both material & psychological) of the citizens are taken care and the freedom they enjoy within an ethical, moral & legal boundaries. Government should be a proactive facilitator for the needs of the citizens maintaining a balance between all segments of public.

to be continued…

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NEFT/ RTGS Charges Changed

Posted on November 9, 2010 by admin

RBI has announced the change in Charges for NEFT & RTGS w.e.f. 15th November 2010.

The revised charges are as below:

RTGS – New Minimum limit = Rs.2 Lakhs
Amount                              Charges
2Lakhs – 5Lakhs                Rs.25/-
Above 5Lakhs                     Rs.50/-

NEFT
Amount                              Charges
Up to 1Lakh                        Rs.5/-
1Lakh – 2Lakhs                Rs.15/-
Above 2Lakhs                     Rs.25/-

According to RBI this has been done to improve the efficiency of the RTGS system which primarily is meant for high-value transactions.
Moreover NEFT has 11 settlement cycles a day currently and can be used for near real-time transfer of low value funds.

Read RBI Circular Here

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New Rules for Salary Account Opening

Posted on October 28, 2010 by admin

Currently the easiest way to open a bank account is opening a Salary Account through the Company. Just fill the form, give a photo and company gives a letter and presto the account is openned.

But finding fault in this process of opening accounts without proper KYC norms, RBI has asked banks to ensure that they collect additional documentation like passport/ driving licence, PAN Card, Voter’s ID Card or latest Utility bills for KYC verification in addition to the letter from the corporate. Further it has also asked banks to verify the letter issuing authority in the corporate.

Circular can be read here.

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China opens New Shanghai-Hangzhou high-speed rail Line

Posted on October 26, 2010 by admin

Just read a new update on China opening a new High-Speed Rail Line between Shanghai & Hangzhou. It was amazing to see the country progress so well – building high-speed rail networks to transport people across the country.

But 2 things caught my eye:

1. The Current time taken to cover this distance of 202KM was 90 mins.
This itself is exceptional considering India’s viewpoint, where we travel at a max. of 100KM/Hr speed in most passenger trains.  202KM in 90 mins is around 135KM/Hr. I believe probably only New Delhi-Bhopal will be nearing this speed.  China has already cut this time taken by half. Amazing.

2. The construction for the line (202KM) began in Feb’09. It is completed in Oct’10 – 21 Months time. almost 10KMs a month. Again in India prespective – the guage conversion (converting from Meter Gauge to Broad Gauge) through my Home Town (total conversion length about 140KMs) took more than 4years and that too single line. It is still to be opened for passenger traffic…

All talk about India growing and matching China – simply rubbish

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Retail Subscription Limit Limit Increased

Posted on October 26, 2010 by admin

SEBI has increased the maximum amount applicable for retail investors from Rs.1 Lakh to Rs.2 Lakh.

There are both positives & negatives of this move.

Positive:
- It will increase the subscription amount in Retail Category with more investors using the ceiling amount of Rs.2 Lakh

Negative:
- It will reduce the allocation of shares esp. to small investors who normally bid for 1 or 2 lots for amounts less than Rs.20,000/-
With proportional allotment more shares will be allotted to investors at the upper limits than the lower limit.
- Also in case of good issues since an investor is allowed to apply double the shares as before there is a high chance of over subscription going over the roof and ensuring lesser shares for investors with lower amount.

It will depend on how the allotment is done after the IPO in case of over subscriptions. Will SEBI also bring in a regulation for this? Considering SEBI & Mr.Bhave’s actions – we can expect a regulation soon – a sub-category within retail :)

Till that time, enjoy the enhanced limit in good IPOs

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