Insurance
Life Insurance: EPFO Creates Term Insurance Option
The Employees’ Provident Fund Organisation (EPFO) has engaged Edelweiss Tokio Life Insurance to provide the group term insurance plan in lieu of Employees’ Deposit Linked Insurance (EDLI) Scheme 1976 which may lead to a higher group insurance of Rs1.32 lakh for each employee. Under the existing scheme, an EPFO subscriber gets insurance cover of up to Rs1 lakh before superannuation. 
 
Employers contribute 0.5% of basic pay of an employee as insurance premium to the EDLI scheme every month. The benefit under the scheme is given on the basis of the provident fund balance in the subscriber’s account. The subscriber gets the benefit equivalent to the PF account balance if the balance is up to Rs50,000. If the balance exceeds Rs50,000, the benefit is to the tune of the account balance plus 40% of balance, subject to maximum of Rs1 lakh. 
 
Meanwhile, the finance ministry has approved 8.5% interest for PF for 2012-13, up from 8.25% in the previous year, for over 50 million EPFO subscribers. EPFO is supposed to announce the rate of interest on PF deposits before the beginning of a financial year. However, for the past few years, there has been delay in announcement of rates. This time, the rate of interest has been notified after the end of the financial year. In the absence of the notification, the claims are settled at the interest rate 

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Banking Services: Cheque Return Fee Only If Customer at Fault
The Reserve Bank of India (RBI) has asked banks to levy cheque return charges only if the customer is at fault. RBI said that cheques requiring re-presentation, without any recourse to the payee, should be presented at the immediate next clearing not later than 24 hours and customers notified through SMS alert, email, etc.
 
RBI has found that the issue was resulting in ‘unsatisfactory customer service’. It was considered necessary to streamline the procedure across all banks. RBI has advised banks to reframe their cheque collection policies (CCPs) for better customer service. Banks are expected to indicate the timelines for realisation of local/ outstation cheques in their CCPs and the charges for cheque returns are expected to be levied upfront with prior notice to the customers.

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Chain-Money Schemes: Only 500 Firms Operational?
More than 500 entities and their promoters are feared to be running thousands of illicit collective investment schemes (CIS) across the country, although just one is registered with SEBI for such business, according to the regulator. Under CIS, which is regulated by SEBI, contributions made by investors are pooled and invested and for generating profits, income, dividends, etc. SEBI has zeroed in on about 500 entities and their promoters and directors who might be running numerous CIS operations under different names. West Bengal and other states in the eastern and north-eastern region are among the most fertile grounds for such schemes.
 
Most of them are doing businesses that are in the nature of Ponzi or chain-money schemes. They promise high returns but actually pay investors from the money collected from new investors. Once the chain stops, the schemes go bust and the operators scoot. They are always hand-in-glove with local politicians and the police.
 
These schemes have a veneer of legitimacy; the promoters show that they are in real estate, hospitality, agriculture and education. According to Moneylife, SEBI has no clue about how many such schemes are running. They run into thousands, according to VC Sajjanar, a deputy inspector general police in Andhra Pradesh who has been crusading against them.

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