Edelweiss Tokio Life Insurance launches non-linked Cashflow Protection

"Cashflow Protection is a plan that caters to three important milestones, which include wealth accumulation, planning for retirement, and building and creating a legacy for children and grandchildren:” Edelweiss Tokio Life Insurance.

Private insurer Edelweiss Tokio Life Insurance launched Cashflow Protection, a non-linked, participating endowment assurance money back participating plan that enables one to plan for important stages or milestones in life. The plan aims to cover the need of wealth accumulation, retirement and legacy transfer, the company said in a release.

The entry age of Cashflow Protection is five years with an option of selecting the maturity age as 85, 90, 95 or 100 years, a protection for the whole life.

"We are indeed delighted to offer Cashflow Protection, a plan that caters to three important milestones, which include wealth accumulation, planning for retirement, and building and creating a legacy for children and grandchildren," Edelweiss Tokio Life Insurance CEO Deepak Mittal said.

The minimum basic sum assured for the plan is Rs75,000 with no upper limit and premiums are based on the sum assured, premium paying term, entry age and gender of the life assured.

Besides, the plan also offers sharing of profits enabling one to earn higher returns through additional cash bonus, limited premium paying periods, discounts for higher sum assured and special discounts available for female lives and loans against the policy to meet unforeseen needs.

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RBI: Lenders' use of credit information needs improvement

“Credit risk is, by far, the largest risk faced by banks:” RBI

Lenders' use of credit information data needs improvement, particularly with regard to corporates, the Reserve Bank of India (RBI) has said.

“(Credit institutions) need to use the credit information data in a more wholesome manner. Our impression is that the data on corporates is not being used as much as for retail exposures. This needs improvement," RBI deputy governor Anand Sinha said at meet. Addressing the fourth Annual Credit Information Conference, he said “credit risk is, by far, the largest risk faced by banks”.

Anand Sinha further said that based on stakeholders' feedback, it is observed that Credit Information Companies (CICs), which enable sharing of credit information among lenders, face issues relating to data accuracy, timeliness and completeness.

"Credit institutions in India need to substantially improve the quality and completeness of data as well as timeliness while furnishing credit information to the CICs," he said.

Credit bureaux/CICs are an institutional arrangement to deal with moral hazard and adverse selection problems on account of information asymmetry, the RBI official said.

"Shared information allows better assessment of risk profiles of potential borrowers (i.e. deals with adverse selection) and creates incentive for borrowers to pay on time by limiting borrowers' ability to access credit from other lenders (i.e. deals with moral hazard)," he added.

He also said credit institutions would need to be more proactive in cases of credit denials and unfailingly ensure that their proposed borrowers are supplied with a copy of their credit reports.

"In fact, one of the most effective mechanisms for maintaining the quality and accuracy of information is to notify borrowers when their credit applications are refused," he said.

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RBI unlikely to cut key policy rate tomorrow: Bankers

The possibility of key policy rate cut is not bright as industrial output grew by 6.8% in January against just 2.5% in the previous month. Even inflation has firmed up to 6.95% in February from 6.55% in January. Besides, rising crude oil prices to $125 a barrel indicates a shift towards latent inflation

New Delhi: After having already cut the cash reserve ratio (CRR) by 0.75 percentage points last week, bankers feel the Reserve Bank of India (RBI) may not do much, especially with regard to reducing the interest rate, in its mid-quarterly review of monetary policy tomorrow, reports PTI.

The possibility of key policy rate cut is not bright as industrial output grew by 6.8% in January against just 2.5% in the previous month.

Even inflation has firmed up to 6.95% in February from 6.55% in January. Besides, rising crude oil prices to $125 a barrel indicates a shift towards latent inflation.

“I don't think that RBI would take further action in the policy review (on 15th March),” State Bank of India (SBI) chairman Pratip Chaudhuri said.

Last week, RBI slashed CRR, the percentage of deposits that banks have to keep with the RBI, from 5.5% to 4.75%. With this, the central bank had infused Rs48,000 crore into the economy.

This is the second reduction in the CRR since the 24th January policy announcement, when it had slashed CRR by 50 basis points releasing Rs32,000 crore into the system.

Repo or the short term lending rate of the RBI stands at 8.5%. Repo rate is the signalling rate. Other policy rates like reverse repo and bank rate adjust automatically with change in the repo rate.

Echoing similar views, Central Bank of India chairman and managing director MV Tanksale said the central bank will probably keep the monetary instruments untouched in the mid-quarter review.

However, some bankers feel that it is time for RBI to cut policy rate so that growth can be propped up which is on the path of moderation.

“There is immediate need for the RBI to shift to an aggressive growth supportive stance to address issues arising from fiscal and trade deficit. The need therefore is for the RBI to turn its focus away from CRR cuts to trigger rate cut actions,” IndusInd Bank head (ALCO and economic & market research) Moses Harding said.

The expectation from market stakeholders is unanimous but opinions are different on its timing; whether on 15th March or end of April 2012. If the decision is to a deliver rate cut; it is better to deliver it soon to cut short the lag time of transmission, he said.

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