Many women allow their husbands and fathers to make all their financial decisions. It is high time women stood up to take charge of their financial lives. Sucheta Dalal, trustee of Moneylife Foundation addressed a packed hall of women on what to watch out for
Women tend to be unconcerned about aspects of saving, borrowing and investing, preferring to believe that men do all that much better. But they then end up falling into financial traps or invest in wrong products. It is for these reasons, Moneylife Foundation conducted its 173rd event which focussed completely on financial literacy for women. This seminar was the second of its kind held by the Foundation during the year, the first one being a twin-session held on International Women’s Day.
The session was conducted by Sucheta Dalal, founder trustee of Moneylife Foundation, in which she enlightened the packed audience about where financial dependence starts, how wounded it can leave women and what steps to take to improve it gradually.
Ms Dalal said that it all starts when women leave all financial decisions to their husband/father, without realising that these decisions can play havoc with their lives. They are often made co-applicants in loans and beneficiaries in investments and insurance, without their knowledge. They may they outlive their husbands, end up losing out on their own savings as well as the inheritance, only because of lack of awareness.
Many women also tend to give up their savings for financial emergencies of the family which leaves them vulnerable and dependent. In this regard, the condition of working women is no better than homemakers, especially those who opt out of careers due to family responsibilities. Ms Dalal advised how women should start preparing in a manner that sustains them for over decades. She enlightened them on insurance, wills and nominations.
She quoted a study done by Mrinalini Deshmukh and Fazaa Shroff in their book Breaking Up where they state that 90% of divorce cases end up becoming conflicts over money.
Ms Dalal advised women to use ‘safe’ banks ‘safely’. She suggested women use nationalised and large banks and avoid dealing with co-operative banks. “Be careful while dealing with relationship mangers. You are targets for them, for which they will push harmful products since women are soft targets. They never hesitate to make false commitments about pricing, returns, documents or disbursal patterns.”
Ms Dalal also gave live examples of how educated and vulnerable women like Suchitra Krishnamoorthy have been cheated. Many other cases like these have come to Moneylife Foundation through the Foundation’s Insurance helpline.
While advising women to be conscious about insurance, she asked them to find out whether they have sufficient life, health, property and personal accident insurance. “Its important to read the fine print word by word while buying insurance, since buying insurance is easy, while getting the claim is a completely different story,” she said. She also said that there is huge difference between investment and insurance and that the two should never be mixed.
During the course of the session, Ms Dalal gave a number of real life examples on how women have been lured into shouldering financial responsibilities of the family, irrespective of whether they have a commensurate income or not. After shifting major liability onto them, which takes away a huge part of their income as contributions to EMI or house expenses, they were literally thrown out on the road. They are unable to claim either their income or the assets that were purchased by using their income.
Ms Dalal give examples of various ‘emotional’ mistakes that women make and how devastating they can prove to be.
She cautioned the audience to watch out for celebrities endorsing investments and insurance. She suggested that women take charge of their financial lives by making a list of financial obligations running in their names, having at least one separate bank account, having clear understanding of the effects that joint borrowing would have on their own finances and that husbands’ defaulted repayment would affect them too, even if the marriage breaks up.
Towards the end of the session, she made women aware of what identity theft is and cautioned them against handing over documents to strangers. She also told them what credit scores and credit history mean and how their ‘co-application’ can hurt their credit scores.
Ms Dalal ended the session with discussing investment traps such as chain-money schemes and guaranteed-return schemes and credit traps such as credit cards and loans. She also introduced the audience to the benefits of credit counseling and insurance helpline started by Moneylife Foundation.
The indices are completing almost a month of run up from the lows of 26th May. More gains without a correction, may be hard to come by
The domestic market ended the week in the green following the government’s move to enhance FDI limits in a host of sectors and firm quarterly results from corporates. Optimism from the global markets also supported the gains. Investors will continue to focus on corporate results next week, which would lead to stock-specific action.
The Sensex gained 191 points (0.96%) to end the week above the 20,000-level mark at 20,150 and the Nifty settled at 6,029, a rise of 20 points (0.34%). The indices are completing almost a month of run up from the lows of 26th May. More gains, without a correction, may be hard to come by.
Buying in rate-sensitive sectors lifted the market on Monday. The market closed lower on Tuesday as the RBI’s move to the reduce rupee volatility ignited worries about slowing economic growth. The benchmarks settled higher on Wednesday after the government late Tuesday decided to hike FDI limits in various sectors.
The market extended its gains on Thursday on global cues as US Federal Reserve chief Ben Bernanke on Wednesday said Fed's asset purchases “are by no means on a preset course” and could even be expanded should economic conditions warrant. The benchmarks closed mixed on Friday after mortgage lender HDFC’s first quarter results failed to meet market expectations and comments from the prime minister that the economy may grow slower than previously expected 6.5% for the fiscal 2013-14.
BSE Fast Moving Consumer Goods (up 7%) and BSE Oil & Gas (up 4%) were the top sectoral gainers in the week while BSE Bankex (down 6%) and BSE Realty (down 4%) were the top losers.
The major gainers on the Sensex were Hindustan Unilever (up 14%), TCS, Bharti Airtel (up 8% each), ONGC (up 7%) and ITC (up 5%). The leading losers on the index were ICICI Bank (down 10%), Tata Steel, BHEL (down 8% each), Sterlite Industries (down 6%) and HDFC (down 5%).
The top performers on the Nifty were HUL (up 14%), TCS, Bharti Airtel (up 8% each), Asian Paints and ONGC (up 7% each). IndusInd Bank (down 12%), ICICI Bank (down 10%), Kotak Mahindra Bank (down 9%), Tata Steel and BHEL (down 8% each) emerged as top losers on the benchmark.
Headline inflation rose to 4.86% in June from 4.70% in May, driven mainly by rising prices of food articles, especially vegetables including onion.
The Reserve Bank of India (RBI) late Monday came out with a clutch of measures including hiking the lending rates for banks and sucking up of Rs12,000 crore, to make the currency dearer. Under the measures announced, RBI raised lending rates to commercial banks to 10.25%, making the loans costlier. The central bank also announced that it will conduct sale of Government of India Securities to suck up Rs12,000 crore on 18th July from the market.
The government on Tuesday liberalised Foreign Direct Investment (FDI) limits in a dozen sectors, including allowing 100% in telecom and higher limits in “state-of-the-art” defence manufacturing, to boost the sagging economy. The FDI cap for civil aviation was, however, left unchanged at 49%.
The RBI on Wednesday decided to conduct a special three-day repo auction under which banks would be encouraged to raise funds totalling Rs25,000 crore at 10.25% for on-lending to the mutual funds.
In the corporate arena, TCS, HDFC Bank, Reliance Industries and Bajaj Auto’s quarterly results were in line with expectations while mortgage lender HDFC fell short of market estimates.
In international news, BRICS economies—Brazil, Russia, India, China and South Africa—have voiced concerns about huge capital outflows that have weakened most of their currencies and raising inflationary pressures. The Fed chairman’s announcement two months ago that the central bank may begin winding down its $85 billion in monthly bond purchases sparked a panicky selloff, particularly in emerging markets.
SEBI, in a communication to the Disinvestment Department, has said other states in which Neyveli’s generating units are located should also be given preference in allotment of shares
Paving the way of disinvestment of Neyveli Lignite Corporation (NLC), market regulator Securities and Exchange Board of India (SEBI) has permitted Tamil Nadu state entities to buy shares on a preferential basis during the proposed government's 3.56% stake sale.
SEBI, in a communication to the Disinvestment Department, has said other states in which Neyveli’s generating units are located should also be given preference in allotment of shares.
“It has been decided... to treat QIBs belonging to the government of Tamil Nadu as separate QIBs... for the purpose of allotment in IPP,” SEBI’s letter said.
Tamil Nadu government has been insisting that it would buy the entire central government stake that is being divested in the state lignite mining and power producing company.
Market regulator SEBI had earlier this month given its consent to state government’s proposal, provided the acquisition is done by a qualified state entity through the IPP route.
The TN government has said it has five state PSUs which can be qualified as QIBs. The DoD has sought exemption from SEBI so that preference is given to allot shares to these PSUs only.
The SEBI letter further said that the institutional placement programme (IPP) would be subject to the pricing norms for qualified institutional placement and lock-in regulations.
SEBI said preference can be given to the qualified institutional buyers belonging to the state government where NLC’s units are located, over the mutual fund and insurance companies.
Earlier this week, the Empowered Group of Ministers (EGoM) cleared the disinvestment of 3.56% stake in Neyveli Lignite through an IPP.
The DoD had written to SEBI after the EGoM meeting seeking preference for Tamil Nadu state PSUs in the IPP mode.
The government currently holds 93.56% stake in Neyveli Lignite Corporation (NLC).
Shares of NLC closed at Rs59.75 on the BSE, down 0.25% over previous close on BSE. At this price, the government could garner over Rs300 crore.
The stake sale is being proposed to meet the minimum public holding norm. SEBI has set a deadline of 8 August 2013, for all listed central public sector units to have a minimum 10% public shareholding.
The DoD was originally planning to divest 5% of its stake in the Tamil Nadu-based mining company.
However, since the IPP mode is allowed only to bring down promoter stake to 10%, the department would now sell only 3.56% or over 5.58 crore shares in the company to lower stake to 90%.