S Aftab, general manager-corporate communications at Union Bank talks about investor education at Moneylife’s seminar at Pune

“Financial inclusion is the buzzword today, but investors continue to be frustrated by lack of clarity on financial products, regulations, laws and schemes. This is why we need to focus on investor-education and financial literacy,” said S Aftab, general manager, corporate communications, support services & branch expansion departments, Union Bank of India, speaking at Moneylife Foundation’s seminar titled ‘Investor, Empower Yourself’ in Pune.
This was the fourth Moneylife seminar supported by Union Bank. Mr Aftab said, “People need to be aware of financial issues, and we hope we continue to promote financial literacy. Money is everything, and you must know how to be financially secure and how to invest it properly so that it gives you a good interest or return so that your future is free of worry.”

Ms Sucheta Dalal, trustee of Moneylife Foundation, spoke on the schemes to avoid while investing—like pyramid and multi-level marketing schemes, internet fraud mails and unregulated products. “It is better to invest with a scheme/product that is overseen by regulators like the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA) or Securities and Exchange Board of India (SEBI). There is no guarantee that you will not lose money if you invest in mutual funds or insurance products, but you can approach the regulator in case anything goes bad,” she said.
 
She also spoke on the importance of making a will and getting adequate insurance coverage. “Always bargain and negotiate with service providers and try to get the best deal. Also, if you get a better deal from someone who is not your traditional banker or insurer, move on,” she said.

She also talked about the many hidden charges for credit card transactions, especially cash withdrawals for which the interest gets compounded very fast. “People run up lakhs in unpaid credit bills, and they think everything is dissolved if they tear up the credit card. Even if the company can’t catch you, uncleared transactions will get registered with credit rating agencies. It will bring down your credit score, and later, you will not get loans,” she said. Ms Dalal also talked about checking one’s credit score from agencies. Often, a person doesn’t know if he is a credit defaulter—and sometimes, the transactions show ‘uncleared’ due to mistake of the banks.
 
Mr Debashis Basu, trustee of Moneylife Foundation, spoke on the importance of choosing the correct mutual funds. He also spoke on investing in gold, which is a speculative asset. “If we track gold prices through 30 years, we will see that it is dependent on the value of the dollar. Unless you are really good at decoding currency movements, avoid investing in gold,” he said.

Mr Basu also talked about planning retirement expenses and saving accordingly. “Erosion will eat away your savings. One must start investing in mutual funds and stocks for wealth creation—but invest only that which you can spare,” he said.

Following a lively question-answer session, the seminar ended in applause.