Citizens' Issues
LoC tension: Indian PM talks tough, visa facility for Pakistanis put on hold

The Indian action came amidst rising anger among political parties over the barbaric beheading of an Indian soldier and mutilation of the body of another jawan by Pakistan and demands for tough action

New Delhi: The tension on Line of Control (LoC) on Tuesday brimmed over as India put on hold the visa-on-arrival facility for senior citizens of Pakistan and sent back home all its nine hockey players amid tough talk by prime minister Manmohan Singh that it cannot be business as usual, reports PTI.


The Indian action came amidst rising anger among political parties over the barbaric beheading of an Indian soldier and mutilation of the body of another jawan by Pakistan and demands for tough action.


In his first public remarks on the issue, the prime minister justified the government’s action, saying “after this barbaric act, there cannot be business as usual with Pakistan”.


He emphasised that “Those responsible for this crime will have to be brought to book” and hoped “Pakistan realises this”.


When pointed out that Pakistan was in a denial mode on the cross-LoC attack, Singh said, “we will keep trying”.


India was to operationalise the long-delayed visa-on-arrival facility to senior citizens of Pakistan today but quietly put it on hold indefinitely. The facility was to be accorded for those above 65 years crossing the Attari-Wagah border by foot.


Government sources said the decision was taken after several agencies sought clarifications on facilities to be offered to the Pakistani citizens.


The visa-on-arrival facility under the new visa agreement between India and Pakistan was signed in September 2012 to ease cross-border travel as part of Confidence Building Measures (CBM).


No new date has been fixed for operationalisation of the visa-on-arrival facility to the Pakistani senior citizens.


“We will take a decision at an appropriate time,” Union home secretary RK Singh told PTI.


The simmering border tension also spilled over to the sporting arena with a rattled Hockey India deciding to send back all the nine Pakistani players taking part in its high-profile league.


With an apparent nudge from the government and in the midst of threatened protests by right-wing elements, Hockey India took the decision to send back the Pakistani players considering the “extra-ordinary circumstances”.


“After discussions with all the stakeholders, the Hockey India and Pakistan Hockey Federation have mutually decided to send them (Pakistan players) back due to an extra-ordinary situation which has arisen,” Hockey India secretary general Narinder Batra told reporters here.


Cricket was also not spared. Fearing trouble due to Pakistani players’ presence in the upcoming Women’s World Cup in the city, the Board of Control For Cricket In India (BCCI) has left it on the International Cricket Council (ICC) to take a final call on the venues for the team from across the border.


The matter was discussed at the Board’s all-powerful Working Committee and it was decided to convey to the ICC the situation prevailing in the country.


BCCI president N Srinivasan said the issue was now for the ICC to decide.


The prime minister, who was responding to reporters’ questions at the Army Day reception hosted by Army Chief Gen Bikram Singh, refused to discuss options vis-a-vis Pakistan when asked about it.


External affairs minister Salman Khurshid said India has taken a “very firm position” on the beheading issue with Pakistan as the act is “totally unacceptable and barbaric”.


Referring to yesterday's flag meeting between India and Pakistan on the LoC, he said, “we may not be happy with the outcome but the process is still on.”


He indicated that the incident would have impact on the bilateral engagement with Pakistan although there would not be total freeze.


The incident would be factored in while scheduling meetings, etc, the external affairs minister said.


On the government’s decision to put visa-on-arrival on hold, Khurshid said it has not been called off but only deferred. “Nobody has utilised it as yet,” he added.


Asked whether India has set any timeline for Pakistan to act, Khurshid said, “there is no timeline. But we are actually pressing (Pakistan) very hard.”


Your alternatives to personal loans

Personal loans, being unsecured by nature, are priced much higher than a loan that has a security attached to it. For smaller loans, you needn’t collateralise your home or your vehicle, you can borrow against smaller market-linked securities or those having a fixed value

With consumer spending on the rise and loans being an expensive option, it is time to find other sources from where you can generate a cash flow from. Should you look at additional income by way of a part time job? That would be a little too taxing. Is it then, not better to unlock your existing assets by taking a loan against them, while preserving their value? And yes, we are not asking you to sell your assets off. Only borrowing against them as a security, instead of taking a personal loan!!

You can borrow against smaller securities that could range from being market-linked such as equity shares, mutual Funds, ETFs, gold deposit certificates, RBI bonds to those having a fixed value such as traditional life insurance policies, National Savings Certificates (NSC), Kisan Vikas Patra (KVP), NABARD's Bhavishya Nirman Bonds and Non Convertible Debentures.


Consider this: For loans against securities from Axis Bank, the interest rates would be 13% for an amount below Rs 10 lakh and 12.75% for amount above Rs 10 lakh, whereas for personal loans, it could range anything between 15% and 24%, irrespective of the amount of apply for. And if you take a personal loan from ICICI bank, it charges you anywhere between 16 to 18.5%, whereas, for Loan against security, for amount below Rs 10 lakh, interest of 13.5% would be levied and for loan from 10 to 15 lakh, 13.25% of interest rate would be levied. 

There is a difference in securities that banks and financing institutions would give loan against and also in the loan-to-value ratio or LTV, which is the ratio of the value of the security that will be given you as a loan. Generally the LTV is as low as 50% for market-linked securities such as equity shares and equity mutual funds, due to their volatile nature and as high as 80-90% for debt mutual funds and other debt-based investments.

For traditional insurance policies, the eligible amount is benchmarked against the surrender value. For example, for an LIC endowment policy, the maximum loan amount available would be 90% of the surrender value of the policy (85% in case of paid up policies) including cash value of bonus, where surrender value is 30% of the total premiums paid (for at least three years), excluding premiums for the first year and all extra premiums. This means you cannot take loans on traditional policies before you have paid premiums for at least three years.

For loans against fixed deposits, banks generally levy a margin over and above the rate allowed for the deposit. For example Punjab National Bank offers loans against fixed deposits at an interest rate of 2% over and above the rates offered on fixed deposits. For example if you apply for loan against a Rs50,000 fixed deposit that has three to four years remaining to maturity, you would be provided Rs40,000 as loan, 10% retained as the margin amount. Comparatively lower margins are retained for present, retired and widows of staff members.

Loans against KVP/NSC are provided at rates connected to the base rate by banks, for example, Allahabad bank  charges base rate+4%, effectively 14%, as of today.

The idea behind taking a loan against securities of smaller value springs from facts that you do not need to pledge large assets for small loan amounts and do not need to spend on their valuation and legal documentation. On the other hand, they are better then personal loans due to their inexpensive nature and speedier processing.

Our suggestion

Before pledging your assets for loans, think of why and for what time you invested in them. Term plans, for example, are protection products and we advise not taking loans against such products, which could harm you in case of eventuality. In case you have a cushion on insurance policies apart from the basic term plan with adequate cover, you may opt for taking loans against the other policies.

Other than insurance plans, check how taking a loan affects your alignment of goals that you made these investments for. An example—taking a three-month loan against an equity mutual fund you invested in for your daughter’s marriage, 18 years from now. Such loans do not erode your wealth, due to the virtue of time that you have on your side. Avoid pledging securities near maturity, or you will lose out on your objective of investment.



Rajesh Khroliya

1 year ago

i have need of 60000 rupees as a personal loan

please help me..

Rajesh 8745878332
[email protected]

GDP to grow at 6.6% in FY14: Espirito Santo Securities

Espirito Santo Securities has repeated a commonly used term applied by financial institutions these days —“constructive outlook”—for the current calendar year. The brokerage expects IT and pharma to do well and capital goods to suffer


Espirito Santo Securities (ESS) has sounded yet another optimistic assessment of the current calendar year by pegging GDP growth rate forecast for FY14 at 6.6% while similarly it also expects inflation to be in the region of 6.6% for the same period. Further, it believes that the Reserve Bank of India (RBI) will cut the repo rate by 25 basis percentage points (bps) in the upcoming policy meet on 29th January and a further 100 bps through March 2014. In its “Little Black Book” monthly newsletter it said, “We think this year will see a mild recovery in growth, rising from 5.5% in FY13 to 6.6% in FY14, through base effects, rate cuts, rising domestic business confidence and a slow but steady improvement in Asian and global growth helping exporters, whose competitiveness has materially improved post rupee depreciation.”


For more analysis by Moneylife on Espirito Santo Securities reports, click here.


For forecasters, it is very easy to sound cautiously optimistic, especially when the situation is so unpredictable right now. Most brokers adopt this line and ESS is no exception. They call it “constructive outlook” and it is the least ‘damaging’ stand to make if their forecasts go wrong. The note said, “Overall we are not raging bulls but on balance we see a constructive 2013 outlook for Indian equities.” While expressing optimism on the GDP growth rate and overtly optimistic on RBI cutting interest rates through March 2014 (without stoking inflation), it feels that Indian economic recovery will take at least a year. It said, “We think any meaningful recovery in the investment cycle could be 12 months away and we think that investors’ expectations have run too far ahead, leaving many Industrials and Cap Goods stocks exposed”.


ESS, in its newsletter, has suggested clients could invest in Lupin, Persistent Systems and Tech Mahindra as the rupee may depreciate, which could also provide a fillip to the pharma and information technology sectors. At the same time, the brokerage also suggests avoiding capital goods sector and has pegged sell calls on BHEL, BGR Energy Systems and Thermax. Furthermore, it is bullish and sees value in mid-cap stocks such as Federal Bank, Sterlite Technologies, Motherson Sumi. We’re surprised that they’ve included Sterlite Technologies in the list, which isn’t exactly a well-governed company. These mid-cap companies “allow investors to add beta without compromising on quality”. In other words, these are really ‘volatile’ companies which will do well when market rises but also do badly when markets fall. Besides, we certainly do not think Sterlite Technologies is a ‘quality’ stock. Why would they advise clients to make their portfolio more volatile?


ESS also advised clients and investors to consider the political scenario in 2013, which could play a pivotal role in the markets. And it is anybody’s guess how this will pan out. According to ESS, “Investors will have to face up to the fact that the outcome is unusually uncertain and potentially unstable.”


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