Canara Bank reverses decision to charge for updating passbooks

The Bank had decided to charge Rs10 for updating passbooks of account holders from other branches, but relented after a customer insisted that such basic services should not be charged

"Hum hain na." That's a sentiment that almost every bank will paraphrase and advertise to assure customers about its services. But how much does a customer have to pay for this service?

When a customer of a nationalised bank protested against new charges to be levied, the officials reversed the decision. Banks, however, insist that it is becoming increasingly difficult to continue providing basic services free of charges and customers will have to start paying up.

Canara Bank put up a notice at its Lokhandwala branch recently, announcing that from 15th February every customer would have to pay Rs10 for every entry in the passbook being updated. VS Venkataraman, one among the old customers, protested, saying the move was "absurd". He wrote, "It is the bounden duty of the banks to update the pass books of their customers. This is the minimum service expected from a bank free of charge and the depositor is entitled to know his balance."

While most private banks do not issue pass books, they send statements to customers periodically free of cost. So, the idea of a nationalised bank asking for money to provide this basic service would appear unjust. Mr Venkataraman said, "The nationalised banks should adopt the practice of sending regular statements to customers, if they are not prepared to update the pass book free of charge.  Alternatively, they should update the pass book once a month free of charge."

Moneylife intervened on his behalf and spoke to members of Reserve Bank of India committee on depositors' issues. MN Gopinathan, member of the committee and shareholder director of Bank of India, replied and assured that Canara Bank had taken the necessary steps.

"I took up the matter with Jagdish Pai, the executive director of Canara Bank. I got a revert from him now that Canara Bank has decided not to levy charges for updating pass books. I should also clarify that Canara Bank was charging Rs10 only for updation of passbooks at a branch other than the one where the account was maintained. This too will not be levied," Mr Gopinathan said.

However, he explained that customers must understand that banks, like other commercial institutions, must make profits so they can serve other people as well. "Banking is a commercial activity and banks are expected to earn profits sufficient to satisfy capital adequacy requirements. While banking is an essential service, it is not quite reasonable to expect banks to render free service," Mr Gopinathan said.

He explained that banks earn less than 5% on a savings account of a customer which is a nominal amount. So if a customer has a savings account with a balance of Rs1,000 the bank will earn only Rs50. "This", he said, "just about covers the cost of one or two transactions. In fact more than 90% of the deposit accounts are not profitable at all. Already banks do a lot of cross subsidisation to maintain the accounts of a majority of the customers."

Therefore, he explained, that services like transfer of funds (amounting to more than Rs25,000) from one branch to another, must be subject to charges. He said that "in any case, no one, including the government, can afford to provide service free of any charge. At least the cost has to be recovered." Besides, he said, the charges levied by banks do not cover the costs.

While it is understandable that services must be paid for, the charges must be reasonable and justifiable. Give-and-take a little on both sides.


JPC may be formed to probe 2G spectrum scam: Govt

The demand for widening the ambit of the JPC is unlikely to be conceded as the rules of parliamentary procedure do not allow clubbing of various issues under an umbrella resolution

New Delhi: Indicating formation of a Joint Parliamentary Committee (JPC) to probe the second generation (2G) spectrum scam, the government today appeared to rule out widening its ambit to cover other scandals, reports PTI.

Parliamentary affairs minister PK Bansal gave such a hint at a press conference ahead of the three-month long budget session beginning Monday. A decision on setting up a JPC would be taken by Wednesday, he said.

After indications emerged that the United Progressive Alliance (UPA) government may agree to formation of the JPC to probe the 2G scam, an issue which had derailed the entire winter session of Parliament, the BJP has been talking of inclusion of the Commonwealth Games scandal and the Adarsh Housing scam also in its ambit.

Mr Bansal said that discussions with the opposition on the issue of JPC are "moving forward" and expressed the hope that the budget Session will "run smoothly".

"It is a premature question at the moment. We are still in the process of discussing with other political parties... A decision will be taken by Wednesday," Mr Bansal said when asked whether the government has decided to go in for a JPC.

The demand for widening the ambit of the JPC is unlikely to be conceded as the rules of parliamentary procedure do not allow clubbing of various issues under an umbrella resolution.

Mr Bansal sought to reject the demand for a combined JPC into the 2G scam, Commonwealth Games scandal and Adarsh Housing scam.

He said that according to rules of procedure of Parliament, a definite issue needed to be mentioned in the motion and there cannot be a probe on a general issue like corruption.

To a query on the possibility of prime minister being called by the JPC to appear before it, Mr Bansal said that in such an eventuality, the Lok Sabha speaker Meira Kumar will have to decide whether to allow it. "The decision of the speaker will be final."

Mr Bansal said that the Left parties could find a representation in the JPC as the four parties have given in writing to the government that they be treated as a group. The strength of the Left formation came down significantly in the current Lok Sabha from a record tally of nearly 60 in the last Lok Sabha.

Government sources said that the JPC could be a 30-member affair with 20 members from the Lok Sabha and 10 from the Rajya Sabha. If the committee is set up with 21 members, then 14 will be from the lower house and 7 from the upper house.

The JPC could have representation of seven to nine major parties. Congress, BJP, Trinamool Congress, Samajwadi Party, BSP, JD-U and DMK could get the membership in view of their numbers.

The AIADMK, which is in the forefront of the demand for JPC, is unlikely to be a member in view of lack of strength in Parliament and similar will be the fate of NCP, National Conference and Muslim League, despite being members of the ruling UPA.

Prime minister Manmohan Singh could make a brief statement in the Lok Sabha when a motion for JPC is taken up.

PV Narasimha Rao had made a statement when a JPC into the Harshad Mehta affair was set up in the early nineties.

Telecom minister Kapil Sibal is expected to move the motion following which there will be a debate, a demand being emphasised by the Congress.

The one-line motion could be on the lines of instituting a JPC probe to go into the alleged irregularities in the 2G spectrum allocation issue.

Mr Bansal's statements appeared significant in the backdrop of finance minister Pranab Mukherjee's remarks that no price is dear enough to ensure smooth functioning of Parliament and prime minister Manmohan Singh's assertion that he was not afraid of facing the JPC.

Leader of the opposition Sushma Swaraj has demanded the government that an announcement on the JPC would have to be made by Tuesday, 22nd February.


Reliance Gold Savings Fund has a strange target group

It is expensive and aimed at risk-averse investors, but would they know the risks inherent in buying gold as investment?

Reliance Gold Savings Fund opens up a new avenue for investing in gold. The Fund seeks to provide returns that closely correspond to returns provided by Reliance Gold Exchange Traded Fund (RGETF) which in turn invests in physical gold. It will essentially invest in Reliance Gold ETF but unlike buyers of gold ETFs, you don't need to have a demat account to buy it. It will provide returns of gold in paper form. The scheme's performance will be benchmarked against the price of physical gold.

What Reliance has essentially done is converted an ETF into a mutual fund product. This means Reliance can also offer it as a Systematic Investment Plan (SIP).

Reliance Gold Savings Fund is pitched as a good option for small investors who want to invest in gold. It has opened the doors for non-demat account holders as it provides the facility to invest through the online medium and through the physical application mode. Those who were not able to invest in gold ETFs since they did not have a demat account can now participate by investing in this Fund.

However, the issue is whether the product is truly beneficial for those whom it is meant for. The gold fund is aimed at those who do not even have a demat account.

Clearly, those who do not even have a demat account don't even know about the risks of equity or are risk-averse enough not to dabble in equity shares. Most investors like them have preferred a safe investment, such as fixed deposits.

When they invest in the Reliance gold mutual fund, would they be aware of the risks of investing in gold?

The price of gold has gone up six times in the last 10 years. Any asset that has gone up so much for so long a time carries a huge risk of a crash. How will a risk-averse investor react to an asset that can crash by 50-60% within a few months?

A second issue with the Fund is its cost structure. Entry load is nil and exit load is 2% if exited within one year; nil after one year. However, since this is a fund of fund (FOF) scheme, there might be ETF expense charges that one needs to pay. As per SEBI guidelines, a fund of fund can either charge 0.75% of total expenses or it can charge a maximum of 2.5% of total expenses including the weighted average total expenses of its underlying schemes, and not more than 0.75% as management fee from FOF investors. Though Reliance gold savings fund will charge 0.75% annually, it will cap the overall cost (FOF + ETF charges) at 1.5%.

Even then, a 1.5% cost is not insignificant.



Srikanth Matrubai

5 years ago

Gold recent sharp rise will see it going periodic price correction which will help SIP investors average their cost.

For someone, who has no exposure to Gold at all, this Fund is an excellent way to get an exposure and set his Asset Allocation right.

Arun Ghosh

5 years ago

i want to buy some ornaments for marriage purpose so i want to know have any monthly scheme with u. please let me know the datails.

Shakti Srivastava

6 years ago


Nice article. Good Information!!! I have a question...Can we convert these fund money into Gold anytime...
Or can we convert atleast into Gpld ETFs...I am new to all these...BUT can you please answer this question...



Bharat Solanki

In Reply to Shakti Srivastava 6 years ago

may be possible at the time of redemption in near future or next 10/15 year online transaction in india......?


In Reply to Shakti Srivastava 6 years ago

you will get the value of the gold not physical gold,which can be utilized to buy physical gold.your money will increase/decrease in proportion to the value of gold (minus/plus tracking error if any)


6 years ago

do you think that broking houses have been able to provide services in class3 or 4 cities and towns even villages.they are more interested to remain in metros,like private banks and, do you think that the people from these places be deprived of getting invested in other opportunities than sbi,post fds' and lics'.mutual fund really opens these avenues for a common man.this is an opportunity for a common man to get invested in gold and that too in SIP mode. how many people here have commented are not from metros?


6 years ago

Its really interesting that many of readers are participating in this discussion.

One reader says Paresh is mouthpiece of Reliance and its only his sales pitch..
I will be happy if he criticised Thought to Thought way,,just rather pointing towards my role as distributor.

One person shows the calculation..of Fund Vs.ETFs..If we visit the website or blog of any CFPs,its have atleast one article suggesting POWER OF SIP..i wonder where this power disappears when things comes to Gold.

Some one suggests the other better options like Tanishq Gold scheme..
but ignoring its disadvangaes of unregulation and non-transparancy..We are at least promting the product which is transparant and regulated...

One suggest to buy Gold through ETFs but do we have market expertise to do so??How many retail traders have investment attitude while share trading ?

While distributing this priduct,i come across one person..Its not I ,but he explained me how he can become rich earlier by trading Gold at MCX and how his broker gives 5 times margin leverage...I compliment him for his trading at MCX with so much high leveraged positions but really thinking of the RISK.

One compares the situation of in 1980 to today..In 1980,,Silver was the frontrunner and major stake holder was Lehemen Brothers,,They buy in very aggressive way,,,when comex intervened the manipulation Prices crashed from $52...But when this time silver berakoutts from $17,rather than one handed buying,,collective actions have seen,,even a smaller hedge funds have participiated in investment...
so its difficult to tell anyone whether there will be crash ahead or Its initiation of Next decade rally after underperformance in the period of 1982-2000...So only option is to remain invested,,and what these kind of funds offer to you...

thank you.



In Reply to Paresh 6 years ago

I like transparancy that mutual fund offers..
so i have started SIP in this fund...
Lets see the results after 1-2 yrs..and can be latter reviewed..


6 years ago

iam a house wife i want to invest this scheme but i dont no how can i am invest it do please guide me


Keshav B Bhat

In Reply to anitachaudhary 6 years ago

Dear Ms Anitajee,<br /> Kindly note that there are enough diversified equity funds in the market to invest. Go in to SIP or STP route you will be able to get decent returns. I advise to avoid Fund Of Funds as the retuns are taxable and you will be in to tax complications later on also the retuns can not be at par with good diversified equity funds Regards, Keshav B Bhat

Bharat Solanki

6 years ago

क्या आपको मालूम हैं पिछले दस बीस साल में आपने जो दागिना जोहरी से बनवाया या ख़रीदा हैं उसमे शुद्धता कितने प्रतिशत हैं अगर आप इसकी जाँच करवाए तो मुश्किल से पच्चास से साठ टक्का और यह भी हो सकता हैं कि इसमे पच्चास प्रतिशत से भी कम शुद्ध सोना हो !
आपकी जानकारी के लिए आपको बता दे कि आज से दस साल पहले जिस दुकानदार के पास आधा किलो अथवा एक किलो सोना स्टोक हुआ करता था आज उन्ही दुकानदारो के पास कितना सोना दुकान में स्टोक रहता हैं करीब दस किलो से भी अधिक |
यह दस किलो सोना उन दुकानदारो के पास आया कंहा से, आपके खून पसीने की मेहनत की कमाई से आपके द्वारा बनवाये जेवेलरी में तांबा-पीतल मीलाकर | आपने यह सोचकर दागिना बनवाया की मुशीबत के वक्त दागिना बेचकर घर की जरुरत को पूरा किया जा सके लेकिन क्या आपके घर की जरूरते पुरी हुई ? नहीं ! हाँ उन दागिनो को गिरवी रख दुकानदारो को ब्याज देकर रही सही कसर भी जरुर पुरी कर दी | इस तरह दुकानदार तो मालामाल होते गये पर आपकी स्थिति वही की वही रह गई | आज दस किलो शुद्ध सोने की कुल कीमत दो करोड़ से भी अधिक होती हैं क्या कोई ग्राहक हुआ दस किलो सोने का करोडपति मालिक ? नहीं | हाँ दुकानदार जरुर करोडपति हो गये, होने चाहिए थे कौन ग्राहक लेकिन बेचारा ग्राहक ठगा गया |
जागो ग्राहक जागो समय रहते जाग जाओ नहीं तो अगले दस बीस साल में भी यही होता रहेगा............


6 years ago

Good to see the nice debates here.

Investor should take independant decisions taking view of both sides.
Do not ignore paresh's points just because he is distributor...also taking account of article view..

mcx analyst

6 years ago

I Think people do not understand the difference bet. stocks and commodities.
Remember commodities have natural occurance only.One reader mentions some name of stocks..Pl. do not compare any commo. with stock..Finally commodities are unique..

Pankaaj Maalde

6 years ago

This fund will badly hit to all investors in three cases,

1) Investment is of higher value
2) Return will be high say 15% to 20%
3) Time horizon is 5 years and more.

Take an example of an investor who wants to invest 10 lacs. in Gold ETF's his broker charges him 0.25% brokerage. his net investment in GOLD ETFs will be 9,97,500.

His fund value after 5 years/10 years will be :

1) @ 10% return 16,02,468/25,80,790
2) @ 15% return 20,01,313/40,25,354
3) @ 20% return 24,75,894/61,60,816

And suppose he invests in Gold Fund where charges are 0.50% higher than ETFs. His fund value after 5 & 10 years will be

1) @9.50% return 15,74,238/24,78,227
2) @14.50%return19,68,010/38,73,065
3) @19.50%return24,36,910/59,38,531

The difference will be Rs. 28230, Rs. 33303 & Rs. 38,984 in 5 years.

in 10 years difference will be Rs. 1,02,563, Rs. 1,52,289 & Rs. 2,22,285 respectively.

The difference will further widen if Reliance Fund charges 0.75% extra ( Total cost is 1.50%). This is very much possible as they are paying 1.00% upfront commission to distributors.

Pankaaj Maalde

Rakesh taneja

6 years ago

Fund is good because gold will be gold who is beckend of most currencies ? Gold, good apporchunity for small investor surely give good returne in first 2 years enjoy but I am not aware for topup issue if it is available surely very good if golds goes dowen momently and you have extra load in your pockets
Rakesh taneja


6 years ago

Approach of this article is that this fund is meant for non-Demat holders..
In fact how many demat holders trade ETFS in their account?Rather how many people trade in their share account for trading and how many for investment??Authour should take view of it first...most of the Demat holders do not know what is Gold ETFs...and who knows it they only trade it ..not invest in it.


Silver Impex

In Reply to paresh 6 years ago

Sure agree with rakesh Gold is not likely to fall but i have a suggestion for reliance soon launch silver fund. This can give unto 200% return in two years


In Reply to paresh 6 years ago

Its not the approach of the article.
Its the approach of Reliance.


In Reply to Ajeet 6 years ago

Correct. Fund houses have realised that very few are buying gold etfs. They want to expand their customer base to the vast majority who dont have demat account


In Reply to ratna 6 years ago

peoples having demat also can invest in this fund.As there are limitations to Gold ETFs.In Gold ETFs one needs to purphase min.1 unit(1 Gram) which comes above Rs.2000 and not affordable for everyone.


6 years ago

Since last few years Gold is gaining status of currecy rather than commodity....that is also currency of not any nation but currency of universe..Before few years it was only domestic demand ,,,but now international Gold ETFs,Hedge funds,Investment bankers,countries like China are picking up gold on every people like us at least accumulate it per month basis..


6 years ago

I want to remind authour that loss or gain both are not permanent in assets like equity ,Gold(commodities) or currencies till we book even gold crashed ahead by 50-60%,,will loss be permanant???



In Reply to paresh 6 years ago

All the article asks is "How will a risk-averse investor react..."<br /> Is that a wrong question to ask? <br /> Dont we know how even the smartest professional managers react against large losses even when the know that loss is not permanent? <br /> This is a very balanced article, given that most people dont understand RISK


In Reply to Melvin 6 years ago

There is a risk in trading point of view...not investment point of view.There is a risk trading in futures market but not in investment form.


In Reply to paresh 6 years ago

Even assuming you are right, no investor will be satisfied with your assurance that investment will come back some day. Ask Reliance Power shareholders ;-)


6 years ago

sensex comes down from 20,000 to 9000 levels in 2008. who continues with their systemaic investment proved fruitful for them,, similar case for Gold,,though it crshed 50-60%,,continue with systematic investment...don't worry...finally it has to come invest through this fund systemaic way...and get rich.



In Reply to paresh 6 years ago

NDTV has come back? TV18 has come back? Reliance Power has come back? Stocks at least go up on profits. Nobody can say for certain what will drive gold prices up.
Dont mislead people about investment risk. Moneylife and a few other websites are the lone voice in pointing out risk when all planners and advisors like Paresh do is highlighting the returns

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