Nov 13, 2015

Bank Strike

          AIBEA has called for all India strike of Bank Employees on 2nd December 2015

Nov 10, 2015

Happy Diwali 2015

Aug 2, 2015

National Pension System

NPS – New Pension Scheme – Boon for your old age

NPS called National Pension System  is a pension scheme wherein every citizen can participate. The pension they get depend on the amount contributed and the return generated under the scheme.

What is Pension ?
Pension is the monthly amount you get for your living from the amount you contributed to pension fund for a certain number of years.

Why you need pension?

The drastic increase in number of old age homes is the best answer for this.  Now a day the concept of joint family has almost become extinct. The families are shrinking to micro families consisting of husband , wife and their children. The parents are made to leave home, ill treated and in many cases parents are finding difficult to adjust to new lifestyle and voluntarily leave home.  The single parent trend  and divorce cases are increasing day by day.  This defines the need for pension system.

About New Pension System (NPS)
The NPS is introduced by Government of India to address all above needs. The system is  regulated by PFRDA (Pension Fund Regulatory and Development Authority) and NSDL (National Securities Depository Limited ) is appointed as CRA (Central Recordkeeping Agency) for the scheme.

How to open the account under NPS
This is a very simple process. PFRDA has appointed many Banking and Non-Banking Financial Companies as POP-SP (Point of Presence – Service Providers)  with whom you can open your account. The full list of POP-SP is available at PFRDA website.

Documents required to open account under NPS

a      >NPS account opening form
b       >One photo
c       > PAN card, Voter ID, Driving Licence etc  (for Identity Proof)
d       >  Bank Pass Book, Voter ID, Driving Licence etc (for address Proof)
e       >   Cancelled cheque
Initial Contribution (minimum Rs.500/- plus charges for account opening etc)

Account options available
Tier I account and Tier II account

About Tier I account
This is compulsory account to be opened under NPS.
Minimum contributions under this scheme is Rs.6000 per year.
There is no upper ceiling for contribution.
You can invest monthly or as per your choice but one contribution of Rs.6000 per year is compulsory for keeping the account alive.

You can make investment in Equity, Corporate bonds, Government Securities as per your wish. There are two choices of investment one is Active where you decide the percentage of investment in above category . Equity (max. 50% of investment ) Corporate Bond ( max. 100% of investment) Government securities ( max. 100% of investment).  The general perception is that Equity has maximum risk and maximum return, Corporate Bond has medium risk and medium return, Government securities has Low risk and low return.   The other type of investment is Auto wherein the Pension fund manager through which you decide to invest can invest the amount as per their wish which is normally called life cycle fund. The investment is normally made as below.

set allocation under auto choice
Asset Class E
Asset Class C
Asset Class G
Upto 35 years
36 years
38 years
39 years
40 years
41 years
42 years
43 years
44 years
45 years
46 years
47 years
48 years
49 years
50 years
51 years
52 years
53 years
54 years
55 years

Pension Fund Managers:
Pension Fund Managers are the persons handling your money. The money you deposit with POP-SP is transferred to Pension Fund managers who in turn will invest the money according to your choice. The PFM as on date are
1.       LIC Pension Fund Limited
2.       SBI Pension Fund Limited
3.       UTI Retirement Solutions Ltd
(All government  departments who cover their employees under NPS has to route their funds through above three PFMs only)

4.       HDFC Pension Management Co. Ltd.
5.       ICICI Prudential Pension Fund Management Co. Ltd.
6.       Kotak Mahindra Pension Fund Ltd.
7.       Reliance Capital Pension Fund Ltd.
8.       Birla Sunlife  Pension Management Limited
(Private firms and General Public can invest in any of PFMs listed from 1 to 8)

About Tier II account

This is an optional account that can be opened with Tier I account.
Minimum contribution under this scheme is Rs.1000 at the time of opening account and Rs.2000 per year and there is no ceiling on maximum contribution.
This is like investment account, the subscriber can withdraw the amount from this account any time.

Pension options:

1)      When you attain age of 60
You will have to invest minimum 40% of the corpus to purchase annuity which provides you monthly pension. The remaining 60% is given to you in lump sum. You also has the option to keep your lump sum investment invested and get it back anytime till you are 70.
2)      You want to exit from NPS before 60
You will have to invest minimum 80% of the corpus to purchase annuity which provides you monthly pension. The remaining 20% will be given to you in lump sum. But you had to be invested in NPS for minimum of 10 years.
3)      If you die before 60 years then 100 % of the corpus will be given to nominee.

Partial withdrawal options:

You can partially withdraw your contribution from the fund but on certain conditions
1)      You have to be invested for minimum period of 10 years.
2)      You can withdraw 25% of your contribution.
3)      You can withdraw for certain specified reasons only.
4)      You can withdraw maximum 3 times during entire period with a gap of 5 years for each withdrawal.

Tax exemptions available:
1)      Under NPS tax deduction can be claimed upto 10% of  salary (Basic plus DA) subject to overall ceiling of Rs.1.5 lakh per anum under section 80 CCE of income tax.
2)      An additional deduction of Rs.50000 per anum is available towards contribution to NPS Tier I account under section 80 CCD (1B).

How to monitor your investments:
        On being enrolled with POP-SP with minimum subscription you will receive your PRAN card within one month. The PRAN card will contain your 12 digit NPS number .  Then you will receive your IPIN and TPIN. IPIN can be used on internet to access your account at  whereas TPIN can be used to communicate over telephone at 1800-222080.

I have tried to give the required information on NPS further information can be got by visiting PFRDA or NPS websites.

Jun 28, 2015

Last date for cover under Pradhan Mantri bima yojana is 31st August 2015

Last date for getting cover under PMJJBY and PMSBY is 31st August 2015. Kindly spread the message so that the lower class and lower middle class families get the cover in time to reap the benefit of the scheme.

Pradhan Mantri Suraksha Bima Yojana (PMSBY)

Pradhan Mantri Suraksha Bima Yojana is another Insurance scheme by Modi Goverment which will help the family to cope with the situation on death of  bread winner of family. The Scheme guidelines are as below;

Eligibility: Available to people in age group 18 to 70 years with bank account.
Premium:  Rs. 12 per annum which comes to just Rs.1 per month.
Payment Mode: The premium will be directly auto-debited by the bank from the subscribers account. Risk Coverage: For death due to accident  Rs.2 lakh payable to nominee. In case of loss of two eyes OR tow limbs Rs.2 lakh payable to assured. In case of loss of one eye OR one limb Rs.1 lakh payable to assured
Eligibility: Any person having a bank account can submit simple form to the bank and get enrolled for the scheme.
The premium paid will be tax-free under section 80C and also the proceeds amount will get tax-exemption u/s 10(10D).But if the proceeds from insurance policy exceed Rs.1 lakh , TDS at the rate of 2% from the total proceeds if no Form 15G or Form 15H is submitted to the insurer.

Pre 2005 printed currency notes

Now, you can exchange the Pre 2005 printed currency notes with any bank branches till December 31, 2015 against June 30,2105 as decided earlier. Kindly exchange the notes with your bank within the time limit or else you may not be in a position to do so post December 31, 2015.

Jun 7, 2015

Pradhana Mantri Jeevan Jyoti Bima Yojana ( PMJJBY )

                              PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA

 The scheme will be a one year cover, renewable from year to year, Insurance Scheme offering life insurance cover for death due to any reason. The scheme would be offered / administered through LIC and other Life Insurance companies willing to offer the product on similar terms with necessary approvals and tie ups with Banks for this purpose. Participating banks will be free to engage any such life insurance company for implementing the scheme for their subscribers.

Scope of coverage: All savings bank account holders in the age 18 to 50 years in participating banks will be entitled to join. In case of multiple saving bank accounts held by an individual in one or different banks, the person would be eligible to join the scheme through one savings bank account only. Aadhar would be the primary KYC for the bank account.

Enrolment period: Initially on launch for the cover period 1st June 2015 to 31st May 2016, subscribers will be required to enroll and give their auto-debit consent by 31st May 2015. Late enrollment for prospective cover will be possible up to 31st August 2015, which may be extended by Govt. of India for another three months, i.e. up to 30th of November, 2015. Those joining subsequently may be able to do so with payment of full annual premium for prospective cover, with submission of a self-certificate of good health in the prescribed proforma.

Enrolment Modality: The cover shall be for the one year period stretching from 1st June to 31st May for which option to join / pay by auto-debit from the designated savings bank account on the prescribed forms will be required to be given by 31st May of every year, with the exception as above for the initial year. Delayed enrollment with payment of full annual premium for prospective cover may be possible with submission of a self certificate of good health. Individuals who exit the scheme at any point may re-join the scheme in future years by submitting a declaration of good health in the prescribed proforma. In future years, new entrants into the eligible category or currently eligible individuals who did not join earlier or discontinued their subscription shall be able to join while the scheme is continuing, subject to submission of self-certificate of good health.

Benefits: Rs.2 lakhs is payable on member’s death due to any reason Premium: Rs.330/- per annum per member. The premium will be deducted from the account holder’s savings bank account through ‘auto debit’ facility in one installment, as per the option given, on or before 31 st May of each annual coverage period under the scheme. Delayed enrollment for prospective cover after 31st May will be possible with full payment of annual premium and submission of a self-certificate of good health. The premium would be reviewed based on annual claims experience. However, barring unforeseen adverse outcomes of extreme nature, efforts would be made to ensure that there is no upward revision of premium in the first three years.

Eligibility Conditions:
a) The savings bank account holders of the participating banks aged between 18 years (completed) and 50 years (age nearer birthday) who give their consent to join / enable auto-debit, as per the above modality, will be enrolled into the scheme.
b) Individuals who join after the initial enrollment period extending up to 31st August 2015 or 30th November 2015, as the case may be, will be required to give a selfcertification of good health and that he / she does not suffer from any of the critical illnesses as mentioned in the applicable Consent cum Declaration form as on date of enrollment or earlier.

Master Policy Holder: Participating Banks will be the Master policy holders. A simple and subscriber friendly administration & claim settlement process shall be finalized by LIC / other insurance company in consultation with the participating bank.

 Termination of assurance: The assurance on the life of the member shall terminate on any of the following events and no benefit will become payable there under:
1) On attaining age 55 years (age near birth day) subject to annual renewal up to that date (entry, however, will not be possible beyond the age of 50 years).
2) Closure of account with the Bank or insufficiency of balance to keep the insurance in force.
3) In case a member is covered under PMJJBY with LIC of India / other company through more than one account and premium is received by LIC / other company inadvertently, insurance cover will be restricted to Rs. 2 Lakh and the premium shall be liable to be forfeited.
4) If the insurance cover is ceased due to any technical reasons such as insufficient balance on due date or due to any administrative issues, the same can be reinstated on receipt of full annual premium and a satisfactory statement of good health.
5) Participating Banks shall remit the premium to insurance companies in case of regular enrolment on or before 30th of June every year and in other cases in the same month when received.

Administration: The scheme, subject to the above, will be administered by the LIC P&GS Units / other insurance company setups. The data flow process and data proforma will be informed separately. It will be the responsibility of the participating bank to recover the appropriate annual premium in one installment, as per the option, from the account holders on or before the due date through ‘auto-debit’ process. Members may also give one-time mandate for auto-debit every year till the scheme is in force. 3 Enrollment form / Auto-debit authorization / Consent cum Declaration form in the prescribed proforma shall be obtained and retained by the participating bank. In case of claim, LIC / insurance company may seek submission of the same. LIC / Insurance Company reserves the right to call for these documents at any point of time. The acknowledgement slip may be made into an acknowledgement slip-cum-certificate of insurance. The experience of the scheme will be monitored on yearly basis for re-calibration etc., as may be necessary.

Appropriation of Premium:
1) Insurance Premium to LIC / insurance company : Rs.289/- per annum per member
2) Reimbursement of Expenses to BC/Micro/Corporate/Agent : Rs.30/- per annum per member
3) Reimbursement of Administrative expenses to participating Bank: Rs.11/- per annum per member

The proposed date of commencement of the scheme will be 1st June 2015.The next Annual renewal date shall be each successive 1 st of June in subsequent years. The scheme is liable to be discontinued prior to commencement of a new future renewal date if circumstances so require.

Feb 8, 2015

Government to infuse Rs.6990 crore to 9 PSB's

The Government will soon infuse Rs.6990 crore to following 9 Public Sector Undertaking Banks.

State Bank of India Rs.2970 crore
Bank of Baroda Rs.1260 crore
Punjab National Bank Rs.870 crore
Canara Bank Rs.570 crore
Syndicate Bank Rs.460 crore
Allahabad Bank Rs.320 crore
Indian Bank Rs.280 crore
Dena Bank Rs.140 crore
Andhra Bank Rs.120 crore

This is first time that the Government is using efficiency parameter to distribute the capital. The parameter used are 

a) Weighted Average Return on Asset for all PSB's for the last three years will be calculated and those above the average has been considered.

b) Return on equity for last financial year will be calculated and those better than average have been considered.

This year the Government has allocated Rs.11600 crore for capital infusion in PSB's

Feb 3, 2015

Wage Settlement talks dtd 03.02.2015


During the wage settlement talks held between UFBU and IBA today, IBA improved the offer by 0.5% to 13%. This was not accepted by UFBU which had come down from 30 % to 19%. Hence they revived their strike programme which will be observed from 25th February 2015 to 28th February 2015 continued by Indefnite strike from 16th March 2015.

RBI disappoints

6th Bi-monthly monetary policy dtd 3rd February 2015

RBI Governer Mr. Raghuram Rajan disappointed market by not reducing the Bank Rate which was expected at 25 basis points. In the Sixth Bi-monthly monetary policy statement for 2014-15 announced today RBI
  • kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75 per cent;
  • kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL);
  • reduced the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 22.0 per cent to 21.5 per cent of their NDTL with effect from the fortnight beginning February 7, 2015;
  • replaced the export credit refinance (ECR) facility with the provision of system level liquidity with effect from February 7, 2015;
  • continued to provide liquidity under overnight repos of 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions; and
  • continue with daily variable rate term repo and reverse repo auctions to smooth liquidity.
Consequently, the reverse repo rate under the LAF will remain unchanged at 6.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.75 per cent.