Defective mypad

Buying a product from the website of Naaptol.com has been a great learning experience. It is a mistake which I will never make again and would like to share it with Moneylife readers. 

 
I was going abroad to be with my grandsons aged three and five years. The older one is familiar with computers. I thought of buying something for my young grandson so that he can play with his play-computer and not disturb his brother. It was just my bad luck that I happened to open the website of Naaptol.com. I was delighted when I saw a product which I had in my mind as a gift for my grandson. The product was ‘MyPad—computer tablet for kids’. 
 
I bought the MyPad and received delivery on 3 December 2012. I was ready with three Duracell battery cells and tried it out. To my shock, it just did not work.
 
Immediately, I telephoned the MyPad supplier to lodge a complaint. I was told that, within 48 hours, someone would telephone me to attend to my complaint. There was no response even after 48 hours. On Thursday, 6 December 2012, I received an SMS from LM-NAAPTOL, which asked me to send the MyPad to an address in Delhi through Blue Dart courier, who would do the pickup free-of-charge from my residence. The condition was that the product should be in a securely wrapped parcel in order that it is received in Delhi in undamaged condition. Who will be a witness to their having received the product in good condition in Delhi? 
 
I telephoned again repeatedly for three more days, since the to and fro courier charges would cost me more than the cost of the product. On the last call I made, the girl attending my call said, “Sir, this product does not carry any warranty or guarantee, so get it repaired by a local electronic technician.”
 
I had no alternative but to put a full stop to the matter and throw the MyPad into the garbage. It is not just my experience but also of others that the products sold are, often, defective right from day one and do not carry any warranty. One has to waste time on making calls to the call-centre.
Hoshang R Nekoo, Mumbai, by email
 
Thank you for sharing this incident with our readers. We would also recommend that you post this experience on consumer complaint websites because it often leads to redress. — Editor
 
Own mutual fund
This is with regard to the Cover Story “Super Stocks Portfolio” in Moneylife (29 November 2012). Another good article from Moneylife. A time has now come for Moneylife to start its own mutual fund. I do not trust most mutual funds anymore, barring HDFC Top 200. Unless you have in-depth knowledge, the agents make more money than their customers. Also most mutual funds agents are untrustworthy. If, and when, Moneylife does start its own mutual fund, I will be one of the first customers.
Suketu Shah, by email
 
Maintaining austerity
I read with great interest Moneylife (1 November 2012), particularly the lead article “Deformed Reforms”. It has political ramifications. The attempt of UPA-2 to bring about so-called bold reforms lacks the political will. It is too little, too late. The people in power know too well that the reforms may not see the light of the day.
 
The government falls short of numbers in the Rajya Sabha. This exercise may best be described as a desperate face-saving attempt from the severe criticism for the all the scams brought to light, one after the other. The new finance minister is talking about the economy and its poor health. He aspires to cut down the subsidy and bring about disinvestment in public enterprises. But he does not utter a word about maintaining austerity in government expenditure and observing discipline among the politicians.
 
I had the good fortune of reading Dr Verghese Kurien’s autobiography where he has vividly described the visit of the late Lal Bahadur Shastri, former prime minister to Anand Dairy. Shastriji stayed overnight in a village nearby and strictly warned Dr Kurien not to disclose to anyone about his overnight stay. He was impressed by the selfless work carried out by the unassuming man called the ‘milkman of India’. It is still not too late to honour the man posthumously with the Bharat Ratna award.
Ramesh Kapadia, by email 
 
High dividend yield
I am a new subscriber of Moneylife and I congratulate the magazine spreading financial awareness in society. Being a long-term investor, I liked the latest issue on ‘Stocks with High Dividend Yield’. It requires detailed study for choosing a high dividend yield stock out of the nearly 6,000 listed companies. Financial strength of a company is dependent on many factors. Therefore, I request Moneylife to bring out a special issue on “How to select high dividend yield stocks”. Please cover topics such as: how earnings per share (EPS) are a determining factor for giving dividend.
Srinivas Shukla, by email
 
 
Thank you, Mr Shukla for the suggestion. We will definitely consider it. — Editor
 
Eye-opener for indian banks
This is with regard to “Refreshing change in the attitude of a British bank; a lesson for Indian banks?” by Gurpur (http://moneylife.in/article/refreshing-change-in-the-attitude-of-a-british-bank-a-lesson-for-indian-banks/30131.html). The ‘stiff-upper-lipped’ British bankers are coming out with apologies not once but thrice. Additionally, compensating a former bank customer should be an eye-opener for Indian bankers.
 
Here are two instances of how our banks have treated senior citizens (both 80+ years), who have a longstanding relationship (over 50 years) with each bank.
 
(a) Despite furnishing Bank of Baroda with the appropriate form, well in time, the branch went on to deduct TDS (tax deduction at source) on fixed deposit interest. The Bank also failed to provide TDS certificates and fobbed the customer every time he wanted to meet the assistant general manager heading the branch. When we personally called on the Bank branch, threatening to take up the matter with the Bank Grievances Committee, they came round.
 
(b) The second issue is one where a State Bank of Mysore credited the customer’s account with Rs1,36,000 with a simple narration indicating the remitting bank and remitter’s name. The amount was with regard to a mediclaim settlement. Later, the Bank branch demanded refund of the amount credited. It was backed by a legal notice from a Delhi lawyer from the remitter’s bank. The client pointed out to the Bank that the amount credited represented the amount due to him on mediclaim settlement. There is total silence till today.
Nagesh Kini, by email
 
IT BECOMES be-sahara?
This is with regard to “SC breather for Sahara” by Sucheta Dalal. The Sahara case is a classic example of the degeneration of the Indian regulatory and judicial systems. Ask any small borrower how s/he is harassed, or even threatened for a short delay in payment. Many have their assets seized and are dragged to court for paltry amounts. Here, even the Supreme Court exhibits helplessness, when it grants the request of the accused companies. Moreover, income-tax (I-T) authorities will chase small taxpayers to explain the source of funds, or treat the amount as undeclared income subject to tax, interest and penalty. But, if you are a Sahara, even I-T becomes be-sahara and can’t do anything. Why?
Shivkumar 
 
II
Thank you for your courage of conviction in writing and publishing this article. One should inquire into why the I-T is lagging in identifying the ‘investors’ and ‘depositors’ and their sources of funds.
A Banerjee
 
III
It will be an ideal pilot project to put the entire truckload of documents on the Aadhar verification mode rather than conduct a lie-detector test on the Sahara-Shri Managing Partner.
Nagesh Kini
 
Zero mortality
This is with regard to “Trial results prove skeptics of chelation therapy wrong” by BV Gokhale. At Sibia Medical Centre (Ludhiana), it is a patient-proven therapy. Our experience of nearly 100,000 intravenous infusions stands testimony to it. Even double-blind studies in bypass surgery and angioplasty are rare. Chelation therapy is a simple solution to a complex problem. We have several patients for whom surgery was not an option (recurrence of blockages after bypass, failed bypass or those who could not afford bypass surgery), who have responded well to chelation therapy. There is zero mortality during the procedure. We welcome readers to contact us (+91-9814034818).
Dr Sibia

User

Govt companies to meet min public holding requirement deadline: SEBI chief

According to UK Sinha, the promoter holding in Indian companies is very high as compared to other Asian markets and SEBI took up the matter with the government as it feels that he PSUs should also follow the rules

Mumbai: The government has assured the Securities and Exchange Board of India (SEBI) that listed public sector undertakings will meet the August 2013 deadline to meet the capital markets regulator’s mandatory public shareholding norms, reports PTI quoting Sebi chief UK Sinha.

 

“I am happy to inform that we have received confirmation from government that it will abide by public shareholding guidelines within the timeframe,” Mr Sinha said at a conference organised by industry body Assocham.

 

According to Mr Sinha, the promoter holding in Indian companies is very high as compared to other Asian markets and SEBI took up the matter with the government as it feels that he PSUs should also follow the rules, Mr Sinha said.

 

Under the norms, privately promoted companies are expected to have a public shareholding at 25% by June 2013, while the same for the state-run listed companies has been relaxed to 10%, which has to be met by August 2013, Mr Sinha said.

 

According to analysts, 11 PSUs, including Rashtriya Chemicals & Fertilizers and State Bank of Mysore, have government holding beyond the 90% mark and the government will have to bring it down.

 

Mr Sinha also said that SEBI is continuously taking measures to improve retail investors’ confidence in the equity market and stressed that the market is not a ‘casino’ where one can do anything and get away with it.

 

Underlining that the Indian market is well-regulated, he said investors should not worry as SEBI has the necessary mechanisms to take care of any manipulation.

 

It has put up a sophisticated surveillance mechanism which is putting out up to 100 alerts a day on potentially fraudulent transactions, he said.

 

“I assure you, if there is any attempt to manipulate the market or to bypass the rules, we will take action and with this surveillance mechanism, we are in a much better position to do that today,” he said.

User

Direct plans of mutual funds: A cheaper option?

Direct plans to invest in mutual funds are a cheaper option. But without proper advice, investing in a wrong mutual fund scheme and/or poor knowledge of the investment process could prove costly
 

With investors having the option of investing in direct plans from 1st January, it would be interesting to see by how much the fund houses would reduce the costs for direct investors. Fund houses would now have two plans under each scheme. One is the regular plan and the other would be the direct plan with a separate Net Asset Value (NAV). The direct plan would have lower costs. Therefore over the long-term, direct investors would benefit. But how much this difference would be depends more on how much fund houses would be willing to reduce the costs.
 

Moneylife did an analysis on the Net Asset Value (NAV) of schemes as on 8 January 2013. Of the 187 equity diversified schemes where the NAV was available, in around 48 schemes there was no difference at all in the NAV of the direct plan and the regular plan. As for most of the remaining schemes, the difference the varied from 0.10 basis points (bps) to 1.50 bps. Though this may not seem that huge, but for a short period of a few days it is a considerable difference. Over time the gap would widen. The difference in expense ratio would be around 30 bps to 75 bps for most schemes. Fund houses would also have to keep in mind their distributors; hence, it would be rare to see a higher reduction in expense ratio for direct plans. Existing investors can switch to direct plans, as well. However, many schemes have raised their exit loads which would in turn deter investors from switching to the direct plans within a short time frame.
 

To take advantage of a lower NAV, direct investors would have to invest on their own, without the help of a distributor or advisor. Direct plans will benefit those investors who believe in doing things on their own. But investing in mutual funds is complex.
 

What kind of scheme should one choose? How much should they invest? Whether one should opt for a systematic investment? One needs to look at the performance of the schemes over various periods. What would be the cost of choosing a wrong equity scheme? Take for example the 1 year period ending 31 December 2012. The top 10 equity diversified schemes delivered an average return of 50.50% and the bottom 10 schemes delivered an average return of just 20.82%. There is almost a 30 percentage point difference in returns. Take the last three year period, had one invested in the bottom 10 schemes they could have faced a loss in capital, as the average returns of the schemes was -1.07% annualised. Any one of the top 10 schemes would have earned them over 12.50% annualised in the same period.
 

But choosing a scheme is just one part of the story. One would also have to find time to do the documentation process. Direct investors may find it difficult to keep up with the various changes in regulations and documentation process without an advisor. There are various servicing activities like change of address, change of bank mandate, consolidation of folios, transmission of funds, inclusion of nominee, handholding on minor investments, arranging for periodical statement of accounts, correction of mistakes in the account, change in KYC, change in contact information, etc. If an investor has in-depth knowledge of all this it would be easy to invest.

User

COMMENTS

jagadeesh

2 years ago

it is clear that an advesor or a broker are more important in case of mutual fund schemes. so, one must carefully choose their plan category.

Sudheer M

4 years ago

Though the article is biased in favour of distributors, I want to point out a few issues in the implementation of this plan. My two chillar (Indian Cent)

I think this is a hastily implemented plan. I have been investing in MFs directly without a broker for quite a while. A direct plan would have been good for investors like me if they had considered the following points:
a)The minimum amount of investment in direct plan should have been waived off for existing investors. I need to find 5 or 10k as the case may be to invest in direct plan instead of my 1000 reinvestment in the existing plan. SEBI has never thought about the common investors who cannot afford high amounts anyways.
b) Though there is no exit load in switching from a regular plan to direct plan, there is certainly STT that is charged if STT is applicable on the fund. Why should I lose that money and it complicates the calculation as to whether it is beneficial to switch.
c) Capital gains.... I think nobody thought about it. When I am switching from my regular plan to direct plan, I need to consider it as a redemption and investment. I will lose all my Long Term capital gains benefit if the period is less than 1 year, even though I am just shifting to the direct plan of the same fund.

When will SEBI start thinking before implementing ?

REPLY

Mayuresh

In Reply to Sudheer M 4 years ago

Very valid point.

Distributors and AMCs have a powerful say and representation with SEBI. A common investor is represented merely by a few individuals of SEBI.

As is clear by now, both distributors and AMCs who are hand in gloves with each other want to just make it difficult to switch plans.

Hence it is very difficult to bring this to the notice of SEBI.

Ideally, this should not be considered as a switch at all. But who will bell the cat?

Sudheer M

In Reply to Sudheer M 4 years ago

One more point I missed is the ELSS. Why should the existing ELSS investors suffer as they have a lock in period of 3 years. They also should be able to switch out to Direct Plan of same fund.

Lastly, the customer care of the MFs are not at all equipped to handle the queries of Direct plan the day they implemented it. (01st January 2013). They gave me a lot of Incorrect information and I had to teach them by showing the circular.

hasmukh

4 years ago

Very good Article. Was not aware of such alternative of Direct Investment. Does it necessitate that the Application is to be sent directly to the fund house (and that we should not send thru people like J.M. Financial etc.) or whether simply keeping Broker's column in Appl. Form blank will serve the purpose.
Thanks.

REPLY

Jason Monteiro

In Reply to hasmukh 4 years ago

Thank you for your feedback..

You would have to submit the application form at the office of the fund house or at the registrar of the fund house.

Some fund houses may have separate application Forms for investors subscribing under Regular Plan & Direct Plan.

Or else, investors applying under Direct Plan can also fill the Regular Plan form, but should clearly indicate "Direct" in the ARN column of the application form.

Also, where application for Regular Plan is submitted without Distributor code or "Direct" mentioned in the ARN Column, the application will be processed under Direct Plan

Srikanth Shankar Matrubai

4 years ago

Was in ICICI AMC office the other day regarding a query.
A walk in customer comes in and asks for "Direct Plan Details".
The clerk at the Reception said "yes sir, Direct is good, NAV is very cheap and you will make huge profit".
Customer : "I want to invest in International Fund, which is the Best"?
The Clerk "sir, ICICI is the BEST in the industry. You can blindly go for the same. Come sir, I will help you fill the application".
I could only laugh at the ignorance of both the clerk and the customer.
ICICI Indo Asia Fund which the clerk was referring to.......is not even in the list of Top International funds according to Valueresearch list and the Fund has been, in fact, listed under EQUITY - LARGE CAP and the clerk had the audacity to recommend this Fund as a International Fund.
Of course, the Clerk obviously will not recommend his rivals fund such as L&T Global Real Assets fund or the DSP BLACKROCK Natural Resources and New Energy Fund.
Expect more of such Non-sense recommendations when you go DIRECT!!

REPLY

Nilesh KAMERKAR

In Reply to Srikanth Shankar Matrubai 4 years ago

" They also serve who only stand and wait" - John Wait

Nilesh KAMERKAR

In Reply to Nilesh KAMERKAR 4 years ago

Sorry about the mistake it is ...

"They also serve who only stand and wait" - John Milton

Mohana Ganesh

4 years ago

Does the existing investor in a scheme say HDFC Top 200 have to fully redeem that MF to apply direct for the same scheme?

Mohana Ganesh

REPLY

pravsemilo

In Reply to Mohana Ganesh 4 years ago

You don't have to redeem. You can opt for switch from a regular plan to direct plan. If you were a direct investor before, then there will be no exit load. However if you are not a direct investor earlier, then there could be an applicable exit load.

You can still continue to have both regular plan and direct plan in the same folio

Mohana Ganesh

In Reply to pravsemilo 4 years ago

Thank you. Can you please clarify about the exit load. Is this only on direct investment or switch from a regular plan to direct plan? Can I have the same fund in both the plans?

pravsemilo

In Reply to Mohana Ganesh 4 years ago

There is no exit load if you are just investing directly. If you are switching then there could be exit load.

Yes you can have the same fund in both plans.

In case if you still have doubt, I would suggest you to download the addendum from the AMC website.

Mayuresh

4 years ago

Yet another false propaganda sponsored by distributors who are waking up to the loosing business now.

All these years, some of the popular distributors provided merely a portal, that too barely worked for purchase and sale of units and lousy customer service which took at least 5 attempts on average to understand customer issue.

If you want to suddenly make a customer start valuing you as "advisor" just remember what you provided to customer as "advice" all these days.

Sad thing is AMCs are a party to this. I tried asking a few AMCs regarding opening a new folio and first thing they say is they prefer us going through a distributor.

This is nothing short of a scam of sorts.

pravsemilo

4 years ago

I have been tracking the direct plan space since the day it was announced. In fact I may say that I could be the first investor.

Coming to the NAV part, according to the addendum released by UTI and HDFC, the NAV of direct plan would mirror the NAV of regular plan till the first investor comes in. Once he comes in, then direct plan would have its own NAV. Addendem of IDFC has a different take on this. For all investments on 1st Jan 2013, the NAV would be the one for regular plan. If there is no investment, they would consider the NAV as 10 Rs.

What I was most surprised was that ICICI - the fund house which has revised its exit loads hasn't released any such addendum about direct plans. However I went ahead and registered for an SIP giving the fund name as "Fund Name - Direct Plan" as mentioned in addendum of other fund houses. They have registered my SIP in the regular plan itself. I am trying to follow up on this. Still in progress....

Nilesh KAMERKAR

4 years ago

All for want of a nail . . . the kingdom was lost.

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