HDFC Bank launches Solitaire, to add 4 million customers in 2 years

According to HDFC Bank, Solitaire will provide unmatched lifestyle offers, its wellness aspects will help women take holistic care of themselves in the midst of a busy career

Private sector lender HDFC Bank, that has launched premium credit cards exclusively for women, said it expects to add 4 million credit card customers in the next two years. The bank has about six million credit card customers. Of this, 1.5 million customers are women.

"We want to hit 10 million credit cards in the next two years and want the women's portfolio to significantly contribute to this with 2 million cards," HDFC Bank country head, (retail assets) Pralay Mondal told reporters.

The bank has launched a special card, Solitaire Premium, with a credit limit of Rs5 lakh for women. The other card Solitaire again introduced exclusively for women has a credit limit of up to Rs2 lakh.

The bank, which is the biggest issuer of credit cards in the country, will come out with new credit card products including co-branded card every quarter.

Talking about the features of the new card, Mondal said while Solitaire will provide unmatched lifestyle offers, its wellness aspects will help women take holistic care of themselves in the midst of a busy career. "We are looking at developing specific products for a complete bouquet for the entire family," HDFC Bank country head, (credit cards) Parag Rao said.

"We felt there was a vacuum in the premium credit card segment for women. We are sure that Solitaire will fulfil a long-standing need of women who are pursuing a successful career, travelling the world and are at the forefront of the global consumption story,” Rao said.

With Solitaire, Infinia and a pack of travel cards, HDFC Bank launched in the last 6 months has now an unparalleled premium bouquet of plastics in India, Rao added.

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NHAI, PFC to come out with Rs14K crore infra bonds by mid-December

The government proposes to double investment in infrastructure to USD 1 trillion during the 12th Five Year Plan (2012-17)

State-owned NHAI (National Highway Authority of India) and PFC (Power Finance Company) will raise over Rs14,000 crore by way of infrastructure bond issues by December 15, a finance ministry official said.

"NHAI will raise Rs10,000 crore and PFC will raise Rs4,100 crore. The infra bond issues are likely by December 15," the official told PTI. The official said that Railway Finance Corporation has also got clearance to raise Rs10,000 crore through infra bonds, but it will come out with the issue after assessing demand for the NHAI papers.

With a view to attracting long-term investments for the infrastructure sector, the government has allowed NHAI, Railway Finance Corporation, HUDCO and ports to raise Rs30,000 crore through tax-free bonds in the current fiscal.

"Railway Finance Corporation will take final decision on issuing infra bond after seeing response of NHAI and PFC. The next meeting on infra bond will be held on December 25," the official added.

Earlier, Railway Finance Corporation had said they had received finance ministry clearance to issue tax-free bonds to raise around Rs10,000 crore to tide over the funds crunch. While NHAI’s bond would be tax free, subscribers of the one issued by PFC would get tax exemptions on investments up to Rs20,000. To channelise savings for development of infrastructure sector, the government in 2010-11 introduced the concept of long-term tax savings bond. It provides tax exemption on investments up to Rs20,000 in long-term infrastructure bonds. This is over and above the existing tax saving limit of Rs1 lakh.

Infrastructure bonds should be of 10 years with a minimum lock-in of 5 years. After the expiry of 5 years, the investors would have the option to either sell it in secondary market or seek redemption.

The government proposes to double investment in infrastructure to USD 1 trillion during the 12th Five Year Plan (2012-17).

A host of companies like IFCI, REC and IDFC had raised about Rs 8,000 crore through issue of tax-savings infra bonds in the last fiscal.

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COMMENTS

bhaskar

5 years ago

I am confused.. PFC recently closed both infra bonds under section 80CCF and tax free bonds. Govt will ask them to again issue bonds?? How much capital do they require.

IRDA ULIP comparator–Will it really help you make a decision?

It is a strange choice considering that term life is the best insurance. The ULIP comparator can be expanded by IRDA to bring in more value. This is launched just after stringent guidelines for web aggregators which will drive them out of business

The Insurance Regulatory and Development Authority (IRDA) has launched its mobile compatible website www.m.irda.gov.in . This is not a mobile application as widely professed. The mobile compatible website can be accessed by any device with internet connectivity to check and compare features of Unit Linked Insurance Policies (ULIPs) introduced on or after September 2010. While the IRDA ULIP comparator is a good initiative, it is a bizarre choice considering that term life insurance is the best insurance. Giving a proper term life comparison is of utmost importance as there is three times variation in the premium rates from low to high end even for the vanilla product. Moreover, web aggregators like PolicyBazaar.com and MyinsuranceClub.com are reeling under the tough guidelines which can potentially drive them out of business.

What the ULIP comparator offers –

  •  The IRDA ULIP comparator has provided three search options to the users—search by company, policy type and by keywords.
     
  •  Up to three products can be selected at a point in time for comparison.
     
  •  Users will be able to compare the details, benefits, premium, policy term, options, guarantees premium allocation charge, policy administration charge and discontinuance charge.

What it does not offer –

  • Mortality charges are missing in the comparison. These can be high for some insurers and an average customer does not really know how much he is paying for risk cover. Online term plans offer low premium when compared to the high ULIP mortality charges. Some insurers don’t even give the mortality factors in the brochure, while few give it for block of five or 10 years. Mortality charges do not have any cap and hence insurers have freedom to a levy higher charge. IRDA needs to insist on mortality factors for each year to be specified in the product brochure during product approval. The ULIP comparator also needs to bring in transparency on mortality charges.
     
  •  Even with the comparison given by IRDA, a customer is in no way aware of how much portion of the premium is going for insurance and how much for investments. An average customer does not know that mortality charges increase every year, unless the insurance company clearly says that the charges are level charges. One aspect of mis-selling is stating that customer will be locked with mortality charges for rest of policy term and hence urgency to buy ULIP.
     
  • There is no way to find the fund’s performance. In short, a ULIP customer does not have transparency of easily knowing the fund performance or access to the past track record of the fund.
     
  •  In ULIPs, the ‘units’ get deducted for mortality charges and policy administration charges on monthly basis and hence just the fund performance based on NAV (net asset value) is of little use. It is a moving target due to ‘units’ manipulation. Insurance companies will give NAV value, but there is no way for a customer to know how much has been the actual return on the investment portion of the premium. Can IRDA bring transparency in the actual fund performance and actual returns on investment in the new ULIP comparator?

IRDA needs to bring more transparency in ULIP comparator for mortality charges, fund performance, actual returns on investment. Mutual fund performance is transparent as the number of ‘units’ are not subject to manipulation due to charges. The existing form of the ULIP comparator is a good start, but not enough for a savvy investor to make an investment or insurance decision.

The insurance regulator needs to bring out a term life insurance comparator with details of not just premium comparison, but also settlement, pending and rejection ratio of each insurance company.

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COMMENTS

Deepak R Khemani

5 years ago

What IRDA should have done is provided the comparison of all types of plans available from Life Insurance Companies ie Traditional, ULIP, Term, pension and health and then given users an option to do an apple to apple comparison. That way the user gets a chance to compare premium of different products and then make an informed decision of whether he wants a term, traditional, Ulip, pension or a health Insurance Policy as per his needs.
Also remember IRDA about a year ago had issued ads in prominent newspapers extolling the virtues of ULIPs!

REPLY

raj

In Reply to Deepak R Khemani 5 years ago

true

Sumit

5 years ago

It is a good analysis but not in good spirits. Please note that 'one man's food is another's poison' and hence it is wrong to declare that 'term plans' are the best. ULIPs are designed to provided convenience and certain needs in mind, which can be very handy for certain set of Investors! Also, it is will known that the ULIP manager would charge some amount under various heads which will be through deduction of units and hence calling it a 'manipulation' is not in good spirit. Thirdly, most of the Insurance co. publish the performance of their funds on their website and hence you terming it 'not transparent' is just not done! I wonder how blatantly can a prestigious organization like 'Moneylife' misguide Investors who believe in your articles and analysis

REPLY

raj

In Reply to Sumit 5 years ago

-term plans are the best plans for risk cover. ULIPs can never beat combination of mutual funds + term plan. Please read cover story on term plans wherein the premium of online plan is negligible compared to the mortality charges of ULIPs. ULIPs can never beat the transparency of mutual funds.

-the point is that the units are reduced and hence a moving target. The average customer does not know how much mortality charges are eating the units along with policy admin charge. I have not found single customer who can put down a number of units he/she will have after one month (even if it is pure maths)

-Insurance companies do give NAV (read the article), but that has no relation to the actual performance for the simple reason that units are not a constant number. The NAV may have moved by 10%, but your actual return may be only 2% (assuming remaining 8% is eaten by mortality, premium allocation & policy admin).

Only Moneylife can write the truth and expose the reality of ULIP (rather than giving ULIP awards as done by some other publications). The reality is always bitter.

I guess you have not subscribed to Moneylife magazine till now.

Sumit

In Reply to raj 5 years ago

As I mentioned earlier, 'cost' alone is not the primary target of every customer. A combination of MF + Term Plan will never give you a 'premium waiver' facility in case one is permanently disabled. A term plan also do not cover one beyond 75 though a whole life ULIP can. Arent this important considering different needs of different people. There is no 'one' solution for all! Though the online premium are very less, one should also dig deeper into the the claim settlement ratio. YOu will be shocked to see the no. On the transparecy of ULIPs, the detailed statement is available to all the customers for scrutiny and well regulated by IRDA. Just because one cant understand, does not mean, it is wrong. I am no agent selling Insurance but actively follow the financial space and a certified person to understand the nuiances of these products.

Deepak R Khemani

In Reply to Sumit 5 years ago

It is good to see someone not in the field but actually commenting on a product as he is a certified person. What is important to understand is that there is no ULIP more than 10 years old for us to actually say with certainty that its does outperform in the LONG TERM!.
LIC's Bima Plus is 10 years old.
However there is a product from UTI called UTI ULIP which has been in existence since 1971 and has given VERY GOOD RETURNS but it is different from Insurance Co. ULIP'S since the charges are really LOW, almost nothing.
Regarding your mention of Whole life ULIP it is a product which is really not required because a term Plan and a Good MF combination creates a large fund for you so that you actually do not require cover after 75, although the point is well taken that it is an individual choice and there is no single solution for all.
Good to see a healthy debate going on.

raj

In Reply to Sumit 5 years ago

Premium waiver comes at a cost. Insurance company calculated all the obligations of future payments and accordingly levy additional mortality charges to cover it. There are no free lunches.

When they declare settlement, rejection and pending ratio, it is across all the products. How can you say that the ratio are bad for online term plan. Someone can argue that it is for ULIP too. The companies offering online term also offer ULIP. If you have these ratio exclusively for online term plan for all the companies, please send it to us. We will be happy to share it with our readers.

Many of the new insurers have handful of death claims. There is early death claim investigation too. If 2 out of 5 early death claims are rejected, the rejection ratio you see is 40%. You don't see the absolute numbers.

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