Deadline to exchange pre-2005 currency notes extended
The Reserve Bank of India has extended the deadline for exchanging pre-2005 currency notes of various denominations, including Rs.500 and Rs.1,000, by six months till December-end.
"The Reserve Bank of India has extended the date for the public to exchange their pre-2005 banknotes till December 31, 2015," the central bank said in a press release.
RBI had, in December 2014, set the last date to exchange these notes as June-end, asking the public to deposit the old design notes in their bank accounts or exchange them at a convenient bank branch.
It had extended its earlier exchange deadline of January 1 till the end of this month.
Besides being standard international practice to withdraw old series notes, the RBI said the pre-2005 banknotes have fewer security features compared with banknotes printed thereafter, designed to curb the menace of fake currency.
The finance ministry has informed parliament that over 164 crore pre-2005 currency notes of various denominations, with a face value of around Rs.21,750 crore, were shredded in regional offices of the RBI during a 13-month period ending January.



Hemen Parekh

2 years ago

( A Mobile App called " BLACK-MAIL " )

While inaugurating the International Conference on " Networking the Networks " on Nov 2 , our FM Shri Jaitleyji said :
" Tax evasion and money laundering will become extremely difficult in the next 1-2 years, with the global automatic exchange of information system coming into effect on a real time basis "
To speed up this process and make it truly automatic / real time , I suggest resorting to the following technologies :

# Internet of Things ( IoT )

As each currency note of Rs 500 / 1000 , is getting printed , embed it with microscopic
RFID chips
Besides communicating with each other , these chips will also transmit their existence
location , through internet , to cloud-based servers of Income Tax Department
This will form a " NETWORK OF CURRENCY NOTES ( NoC ) "
You may like to call this Internet of Currency ( IoC ) , a sub-set of IoT !

# Internet Protocol Address System ( IP V 6.0 )

Each Rs 500 / 1000 currency note must be assigned ( at the time of printing ) , its own
unique Internet Address , using IP V 6.0
This IP address should be linked with the unique Serial Number printed on each note.
Since IP V 6.0 , will be capable of assigning " 2 * 10 to the power of 128 ", no of IP
addresses , there is no danger of running out of addresses , even if we decide to extend
this idea to Rs 100 currency notes !

Here are the most important BYE - PRODUCTs :
* No more possibility of fake / forged / counterfeit , currency notes !
* Plastic currency notes will last 10 times longer !

This reform will enable the Central Government / Income Tax Department , to :

* Continuously trace the movement of each of these higher denomination currency notes
* Instantly locate any place ( using Google Map based GPS ) , where there is an
accumulation of more than Rs 1 Crore worth of currency notes
Such accumulation will be made to appear as a TAG CLOUD on the web site of IT Dept,
like thousands of balloons floating on a map of India , capable of being drilled down to
within 1 Sq Meter !
On each balloon , will appear a number announcing , " Amount of Cash here - Rs " !
This will vastly simplify the task of Anti Corruption Dept / Enforcement Dept etc

But then such transparency might lead to break-down of social order / chaos
It may be a better / safer / saner solution for such balloons / tag clouds to appear , on a secret Mobile App , available only to the officers of Enforcement Department ( ED )
You may want to call this app , " BLACK-MAIL " !

Of course , my suggestions may become outdated with the arrival of mobile wallets based CASHLESS SOCIETY , by 2030

In the meantime , should Shri Arun Jaitleyji and Shri Ravi Shankar Prasadji , want this implemented , it can be done in 6 months , at one tenth the cost of MoM ( Mars Orbital Mission ) , ie approx Rs 43 Crores

All they have to do , is to tell the bureaucracy :
" Since we need not depend upon Opposition parties to pass a bill in Rajya Sabha , please go ahead and implement this - in less than 6 months "

hemen parekh
06 Nov 2015

Economy & Nation Exclusive
Asset quality of PSBs set to worsen
New norms of provisioning with effect from the beginning of this year will affect the profitability of banks further
The Financial Stability Report (FSR) of June 2015 released by Reserve Bank of India (RBI) last week says that the Indian economy is resilient but there is no room for complacency due to the continued uncertainty over global growth and absence of effective international monetary policy coordination.
On the domestic banking sector the report says: “while risks to the banking sector have moderated marginally since September 2014, concerns remain over the continued weakness in asset quality indicated by the rising trend in stressed advances ratio of scheduled commercial banks (SCBs), especially of public sector banks (PSBs).”  
It further states that the macro stress tests suggest that current deterioration in the asset quality of banks may continue for few more quarters, and PSBs may have to bolster their provisions for credit risk from present levels, to meet the ‘expected losses’ if macroeconomic environment were to deteriorate under assumed stress scenarios.  
The RBI further says that this assessment of the banking sector by the FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability. But the report unfortunately does not spell out any concrete steps to improve the situation, except to say that the policy initiatives for improving the governance and management processes at public sector banks become significant.  
Asset Quality of banks:
The present level of both non-performing and restructured assets of public sector banks are quite high (see Charts below) and they are expected to worsen further before any improvement is expected as stated in the report.
The gross non-performing advances (GNPAs) of SCBs as percentage of gross advances increased to 4.6% as on 31 March 2015. The restructured standard advances during the period also increased, pushing up the SCBs’ stressed advances to 11.1%. PSBs recorded the highest level of stressed assets at 13.5% of total advances as of March 2015, compared to 4.6% in the case of private sector banks (PVBs). 
The following charts sourced from the RBI’s Financial Stability Report clearly brings out the steep deteriorating NPA position both at the gross and the net level for PSBs from March, 2011 to March, 2015. 
(PSBs = Public Sector banks. PVBs= Private Sector Banks. FBs = Foreign banks. 
GNPA = Gross Non-performing Assets.  NNPA = Net Non-performing Assets.) 
Capital Requirements of PSBs:
As per the latest estimate, PSBs in India require additional equity capital to the tune of Rs2.4 lakh crore by 2018 to meet Basel III norms as ordained by RBI. And during the current financial year PSBs were looking to raise over Rs21,000 crore from the capital market as the Government has allocated only a sum of Rs7,940 crore for this purpose in the current year’s budget. The Finance Secretary, however, announced last week that the government is proposing to inject Rs11,500 crore in addition to the earlier budgeted amount during the current year.  And as per media reports, the Finance Ministry has now asked banks to explore innovative strategies to attract investors for their future stake sale.
How do you attract investors for subscribing to bank shares? There is only one obvious factor that determines the interest of investors in share investment and that is company’s performance.  It is a well known fact that investors will come flocking to you if you show continued improvement in the performance quarter after quarter. Due to the subdued performance of PSBs during the last three years, their performance in the stock market has also been impacted and most of the PSBs have very low valuations in spite of majority ownership resting with the central government.
The following chart shows the relative performance of SCBs during 2012-2014. 
Perceptible fall in net profits impacting growth:
Despite a few relaxations in provisioning requirements by RBI, most of the public sector banks have been showing fall in their net profits and three of the PSBs have for the first time declared net loss for the fourth quarter of last financial year. With the introduction of new norms of provisioning for restructured accounts with effect from the beginning of this year, and with banks having to make more provisions for restructured accounts, profitability of banks will be further impacted putting pressure on the banks to raise more  capital from the market. This again is constrained by the fact that government is required to hold a minimum of 51% of the share capital of every public sector bank, with little leeway available to raise capital from the market. What is adding insult to injury is the poor valuation of these banks at the bourses, putting the public sector banks in a bind of helplessness that will ultimately affect their growth due to their inability to fund the growing needs of the economy. 
This should open the eyes of the powers that be to ensure that the public sector banks are not left high and dry, but out of the box solutions are found to improve the functioning of these banks to make them more agile, more competitive and more profitable to enable them to stand on their own legs without depending too much on the tax payers’ money to boost their capital requirements in the coming years. The future looks challenging for the banking industry and the government has a tough task in hand to meet these challenges.
 (The author is the financial analyst writing for Moneylife under the pen-name ‘Gurpur)



Mahesh S Bhatt

2 years ago

Await great Indian Banking meltdown.All media is raking revenues advertising 8000 plus crores ( last years number) from Real Estate Sales.

But Real Estate is not so real with lot of Gas/huge inventories saleable over 55 months /political parking of investments/ghost towns across India.

God Bless Rajan & Company one day he says Global recession few days later he says he was misquoted( good guy with bad company gets corrupted).



2 years ago

Asset quality of PSBs set to worsen./its' an STYLE to do an age old INDIAN-GOVERNANCE it was the matter with UTI and even IDBI/IFCI but nothing done to PREVENT whoever comes to sitting as GOVERNMENT can not survive without


2 years ago

To expect decades of loot to be written off in a few years is a pipe dream. Even if Government loots the temples to write off its deficit and injects fresh capital into its private coffers also known as "Banks". The Indian Republic's Constitution that enshrines inequality under the law, exceptions to the rule of law and "Many Nations Theory" provided a suitable or "Animal Farm" framework for plundering other people's wealth and opportunities for a select neo aristocracy or, kleptocracy. This enjoyment of other people's wealth began with deficit financing of Government profligacy and corruption as well as with the nationalization of temples in 1959 and did not not culminate in 2012 with "Retrospective" laws and the nationalization of 20% of non Christian and non Moslem private education. The 1969 nationalization of banks widened the scope for plunder of public wealth for the personal pelf, pomp, pleasure, perversions and perpetuation of India's Neta-Babu-Cop-Milard-Crony-Vote Bank Kleptocracy.

Gopalakrishnan T V

2 years ago

The PSBs assets both human resources and business assets need a total review and call for out of the box solution to make them perform. Right from Board level to the last grade of staff they require training, knowledge up gradation,skill development and interpersonal relationship improvement. Involvement and commitment are essential to ensure quality performance. On the business side, ALM needs drastic quality approach and the cost of funds has to be brought down considerably. The costs on account of NPAs have to be reduced and this cannot be cross subsidised by the depositors and other stakeholders. The management of assets particularly credit and cash requires fine tuning and a lot needs to be done to improve the credit appraisal, credit recovery, fast recycling of funds, lower costs on account of inspection, insurance, legal costs and maintenance of assets.Window dressing of assets and hiding bad loans with all possible ingenuity presently resorted by the banks has to be forcefully avoided. Action is what is called for and not rising expectations and hopes by words sounding very high optimism.

Moneylife Seminar: Life Insurance – Surrender or Continue?
In an interactive two-hour session, Raj Pradhan explained to a packed house the exit options for existing life insurance and pension policies 
At Moneylife Foundation’s event, Raj Pradhan, an insurance expert, discussed the ways of exiting from life insurance and pension policies. Moneylife does not suggest buying insurance-cum-investment products, which will ensure that you are not in a situation of making difficult decisions about exiting a product. But, many are already trapped in ULIP (unit linked insurance plan) or traditional (endowment, money-back, whole-life) products and eagerly trying to find whether to continue with it, what loss if they try to exit and if there is a third option to handle the situation.
Moneylife Foundation Insurance Helpline received numerous such cases and gave customised feedback based on each case.  Moneylife magazine has written a couple of cover stories on this subject in March 2012 (Surrendering Policy? Think Again) and October 2014 (Trapped in Wrong Life Insurance). There are various parameters to consider while making a decision on surrendering or continuing. After all, policy surrender is not the best option in most cases especially for traditional products and hence there is a need to be cautious if you are blindly surrendering life insurance policy. 
The interactive two-hour session looked at options for handling old ULIP (pre-September 2010), new ULIP (post-September 2010), old Traditional (pre-January 2014) , new Traditional (post-January 2014), old ULPP (unit linked pension plan) of pre-September 2010, new ULPP (post-September 2010), old Pension Traditional (pre-January 2014) and new Pension Traditional (post-January 2014). Real life examples were discussed along with cases from audience.
Old ULIPs had challenge of non-standard surrender charges, which in some cases continues till end of policy term. The saving grace is “cover continuance” feature which allows the insured to stop paying premium after three years and remain invested without surrender.  It certainly is an option for the insured especially if the fund performance is good and surrender charges prevent from easy surrender. 
New ULIPs have standard surrender charges, but it got rid of good feature of cover continuance which means your policy will auto surrender if you stop paying premium. Traditional products have a drawback of pathetic guaranteed surrender value. While new traditional (post-January 2014) improved the guaranteed surrender value, it still falls short of any decent value which can help you to surrender without a loss. So, there is huge dependency on non-guaranteed special surrender value if you are keen on policy surrender. “Paid-up” is an option for traditional policies which have a surrender value. It is similar to cover continuance wherein you do not pay premium but do not surrender till end of the policy term.
Handling a pension policy is the most difficult due to tax implications for policy surrender. Moneylife has done a cover story on it which is a one of its kind. Read - Your options are limited to continuation of premium payment or cover continuance/ paid-up. But, what about new ULPP which do not offer cover continuance? 
The policyholder need to understand that fraudulent calls are made for not just policy mis-selling, but also for mis-selling for surrender. The fraudsters want you to surrender existing policy so that the money can be invested in a new insurance product to help earn commission for intermediaries. 
Buying an online term plan for your life insurance needs will help ensure that you don't have to worry about loss during policy surrender. Buy with utmost good faith giving all the required details without the agent filling on your behalf. It will help to secure your family finances, in case of premature death of the insured.




1 year ago

An important clause but not discussed at length is the the concept of paid up policy and lapse of policy.
The insurance company first objective is to give provide protection fund for the dependents of the family and the second objective is to provide facility to get lump sum amount at the end of tenure of policy to the policy holder.Hence it is as must that the FIRST premium shall be towards the term cover for the entire policy period and subsequent premium shall be for providing lump-sum amount to the insured at the end of term. This will always give protection fund to the family of bereaved and there is no denial of protection fund( insurance amount) to the family in case of death of insurer. Let it not be considered as death benefit and convert it into protection fund of family of insured,


2 years ago

I am having Birla sunlife flexi save Individual Enhancer in my daughters name for 25 yrs wef jan 07, could u please advise if the same can be continued..or withdrawn Premiun is Rs12166/-

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