While post office savings accounts will fetch 4% interest, up from 3.5%, the Monthly Income Scheme and the Public Provident Fund will earn an interest of 8.2% and 8.6% respectively. The government has also decided to discontinue the Kisan Vikas Patras and lowered the maturity period for MIS and NSCs to five years from existing six years
New Delhi: In a bonanza to millions of small savers, the government on Friday increased interest rates on deposit schemes offered by post offices, like savings account, Monthly Income Scheme and Public Provident Fund, reports PTI.
While post office savings accounts (POSA) will fetch 4% interest, up from 3.5%, the Monthly Income Scheme (MIS) and the Public Provident Fund (PPF) will earn an interest of 8.2% and 8.6% respectively, a government release said.
The maximum increase is in the one-year fixed deposits—from 6.25% to 7.7%. The interest rates on other time maturities have been hiked as well.
The new rates will be applicable from the date of notification which will be announced soon.
The decision to hike interest rates, which is in line with the recommendations of Shyamala Gopinath Committee, will make small savings schemes more attractive and returns would be in sync with market rates.
The government, however, decided to discontinue the Kisan Vikas Patras (KVPs) and lowered the maturity period for MIS and NSCs to five years from existing six years.
It also introduced the National Savings Scheme (NSC) with a 10-year maturity.
The annual investment ceiling in PPF savings has been increased to Rs1 lakh from the present limit of Rs70,000, but it would be costlier to obtain loans from the savings under as lending rate has been doubled to 2%.
The government has scraped 5% bonus on MIS and has also done away with commission for agents on PPF and Senior Citizens Savings Schemes.
The finance ministry also said the payment of commission on PPF schemes and senior citizens savings scheme will be discontinued and the agency commission under all other schemes (except Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) agents will be halved to 0.5%.
According to the Gopinath Committee, the agents were paid around Rs2,400 crore commission in 2010-11.
Incentives, if any, paid by the state/UT governments will be reduced from the commission paid by the central government, it added.
In line with Gopinath Committee’s suggestions, the government also decided to align rate of interest on small savings schemes with G-Sec rates of similar maturity, with a spread of 25 basis points (bps) with two exceptions.
“The interest rates for every financial year will be notified before 1st April of that year," it said.
It further said the minimum share of states in net small savings collections in a year for investment in state government securities will be reduced from 80% to 50%.
The remaining amount will be invested in central government securities or lent to other willing states or in securities issued by infrastructure companies/agencies, wholly owned by central government, it added.
On the operational issues of NSSF, the government has also decided to set up a monitoring group consisting of officials from ministry of finance, Reserve Bank of India (RBI), Department of Posts, State Bank of India (SBI), other select banks and some state governments.
The panel will resolve various operational issues like reducing the time lag between collection and investment.
An earlier government panel had noted that Kisan Vikas Patras (KVPs) and NSC instruments are quite expensive in terms of the effective cost to the government and should be discontinued.
The Gopinath Committee was however of the view that while KVP may be discontinued as it is prone to misuse being a bearer-like instrument, NSC could continue with modifications.
Following recommendations of the 13th Finance Commission, the Committee was set up in July 2008 to review of the existing parameters for the small saving schemes in operation and recommend mechanisms to make them more flexible and market linked.
The Committee submitted its report to the government on 7 June 2011.
In September, the Government had increase its market borrowings by Rs52,800 crore to Rs4.7 lakh crore in 2011-12, because of dip in small savings collection. Small saving collections are losing sheen as banks are offering higher interest rates.
Budget 2011-12 calculations were made with estimation of Rs24,000 crore in NSSF, but instead the fund dipped by Rs35,000 crore.
After much public criticism, Kingfisher Airlines tells passengers that cancellation of flights is for reconfiguration of aircraft, not due to financial difficulty
A little late in the day and after its abrupt cancellation of flights over the past three days caused distress and anguish to passengers, Kingfisher had suddenly remembered its key asset – loyal passengers.
In a email shot at 9.29 pm – well after television debates had castigated the airline for leaving passengers in the lurch an email with the subject line “you matter” hit the mailboxes of all of us who are on Kingfisher’s frequent flyer programme. The King of Good Times had finally remembered his “guests”.
Vijay Mallya, who set a trend with his personalised video saying he had instructed his staff to treat all passengers like “guest in his own house” still wasn’t addressing them personally. The email is signed by Anshu Sarin, Vice President, Guest Loyalty and Kingfisher Holidays. This is a departure because Dr Mallya had won passengers hearts and their loyalty by sending out responses to complaints and comments in his own name.
The mailer from Kingfisher says,
On behalf of Kingfisher Airlines, I am grateful to you for your support and patronage of our services. I would like to take this opportunity to update you on recent developments at Kingfisher Airlines vis-a-vis media reports on our performance.
As you are aware, the Indian Aviation Industry has been faced with the difficult task of coping with high costs and lower yields. Post considerable thought and deliberation, Kingfisher Airlines has rolled out initiatives that aim to drive the long-term profitability in our efforts to meet these challenges.
As announced earlier, we have decided to focus on the full-service market; to this end Kingfisher Airlines has initiated reconfiguration of its aircraft. This exercise will require few of our aircraft to be out of service for the next few weeks. Ergo and in line with maximizing productivity we have rationalized our network, resulting in a temporary discontinuation of approximately 50 flights out of our current operating schedule of approximately 350 departures per day. Once the reconfiguration is complete, these aircraft will be pressed back into service immediately. Clearly the report about our flights being cancelled owing to the supposed exodus of pilots appears to be falsified.
Our service commitment to you remains sacrosanct, and we have taken every measure to reduce any inconvenience caused due to the temporary changes in schedule. Please accept my sincere apologies in case you have been inconvenienced on this account; I truly appreciate your support, and thank you for your understanding.
I look forward to your continued patronage and remain,
Guest Loyalty and Kingfisher Holidays
SAT had on 18th October asked the group’s two companies—Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation) and Sahara Housing Investment Corporation—to return the money
New Delhi: The Sahara group today moved the Supreme Court challenging Securities Appellate Tribunal (SAT) order asking the company to refund the money raised through Optionally Fully Convertible Debentures (OFCD) to investors within six weeks, reports PTI.
SAT had on 18th October asked the group’s two companies—Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation) and Sahara Housing Investment Corporation—to return the money.
Sahara, which has challenged the SAT order, has also sought an interim stay on it.
SAT had passed the order on an appeal filed by the group challenging the order of the Securities and Exchange Board of India (SEBI) which had in June asked the two entities to return the money collected from investors through financial instrument OFCD citing violation of regulatory norms.
Besides, the stock market regulator had also restrained the entities from accessing the securities market for raising funds till the time payments are made to the satisfaction of the SEBI.
The two companies and its promoter Subrata Roy Sahara, and the directors—Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary—jointly and severally were told to refund the money collected.
The company had then approached the Supreme Court which asked it to approach the tribunal.
While dismissing the appeal, the SAT had held that the market regulator has jurisdiction over such fund raising schemes.
“...we may mention that in view of our findings that OFCDs issued by the company are securities and that the issue was a public issue requiring mandatory listing and that SEBI has the jurisdiction under the SEBI Act to deal with all kinds of securities and companies, whether listed or not...”, the order had said.
Sahara had contended that SEBI has no jurisdiction over the issue as the companies involved were not listed. It maintained that entities involved were privately-held companies and were under the jurisdiction of the ministry of corporate affairs (MCA).
But the tribunal did not agree with its contention and dismissed the appeal saying “this argument has no merit... A plain reading of regulation... leaves no room for doubt that the regulations apply to all public issues”.