The Union Cabinet is likely to approve a proposal to amend the withdrawal rules for the New Pension Scheme (NPS) which would allow investors to withdraw their entire accumulated corpus, in case the amount is less than Rs2 lakh. At present, there are 4,400 such accounts which have an accumulated amount of Rs2 lakh or less. The move has been contemplated because the accumulated fund of less Rs2 lakh is found to be insufficient for buying a decent annuity scheme for subscribers.
The Reserve Bank of India (RBI) is all set to sell inflation-indexed bonds to retail investors through IDBI Bank. RBI has already raised Rs2000 crore via two auctions in early- and late–June 2013. Retail investors will be allowed to buy up to Rs25 lakh of inflation-linked bonds, with a minimum of Rs10,000 and additional investments of Rs10,000 each. The price of the bonds will most likely be linked to the wholesale price index (WPI) which defeats the very purpose of purchasing these bonds, according to Moneylife. WPI is nowhere close to the rate of inflation that the common man faces and money you would get as ‘returns’ would be lower than what you pay for the goods in the market.
Concerned over the growing menace of chain-money schemes across the country, the finance ministry is expected to bring new legislation to plug regulatory gaps. According to the ministry it is now possible for companies to run a business that would be classified neither as a non-banking finance company, nor as a chit fund or any other regulated entity, and peddle dubious schemes avoiding the oversight of regulators and government departments. . A Cabinet note on the proposed Securities Laws (Amendment) Bill, 2013, has been circulated and seeks to provide SEBI with powers to carry out search and seizure to attach the assets of those running chain-money schemes.