Tax: All I-T Refunds To Be Credited Directly in Bank Accounts: CBDT

The income-tax department has put in motion a new plan which will ensure that any refund on tax paid is safely deposited in the taxpayer’s personal bank account as soon as it is processed and released. The department is also planning to fully adopt and use banking services to end the current system of sending I-T refunds over the value of Rs50,000 via cheques through the postal department. CBDT chairperson, Anita Kapur, said the plan is being worked out on priority and is aimed at bringing an end to taxpayers’ grievances regarding this particular service.


Stock Bets of Mutual Funds
In our Cover Story this time, we take a look where the mutual funds are putting your money....
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Make It Even More Helpful
I am a regular reader of Moneylife magazine and greatly enjoy it. It is the go-to aid for me when-ever I am in doubt about financial investment matters. However, to make it even more helpful for readers/ subscribers, I would like to suggest the following:
a)  Model Long Term Portfolio: In this section, Moneylife has listed several highly rated stocks. There is a column ‘Entry Price’. However, the entry date is not given. It is not clear whether, at the time of entry, the readers were notified in any manner, so that they could take advantage of your valuable selection. In future, if you can notify this on the same page, it would be better. I know that due to the cautious approach of Moneylife, the writer may fight shy of recommending any stock. My advice is to add an indemnifying clause at the bottom of the page.
b) Secondly, it is not clear whether it is still worth buying the stocks from your Model Long Term Portfolio, at the CMP (current market price). Or, at what price would you recommend a new inves-tor to enter this ideal long-term portfolio list? Without this information, this entire page is only a historical record and is not of much use to an aspiring investor. Most subscribers, like me, are in this category.
c) Moneylife has given RoE and RoCE, in addition to MC/OP. But not P/E. P/E is the most commonly used yardstick by common investors who are not familiar with using complex analytical tools. Hence, why not omit RoCE or MC/OP and, instead, give the P/E figure? 
d) Moneylife has started explaining the relevance of various ratios like Book Value, etc, in the Stock Basics section.
Kindly give full explanations and relevance of all ratios like MC/Sales, MC/OP to benefit the not-so-erudite readers like myself. I am reading Moneylife more for Prof Hegde’s column than any other section. He is looking after my physical and mental health which, you will agree, is more important than financial health. Convey my thanks and admiration to this bold doctor.
BV Krishnan, by email
As you may have noticed, we have completely redesigned our coverage of stocks. Earlier, our stocks section consisted of analysis of one company in the Street Beat section; there was one item about stock manipulation, a list of value stocks and a model portfolio. You may have noticed that we have now vastly expanded the stocks section which brings you a commentary on many more stocks, sectoral updates and thematic studies. In the process, we have dropped the model long-term portfolio and Street Beat. The actionable list of stocks is now available in stockletters. These changes have been made in keeping with the emerging regulatory requirement. — Editor

Exclusions Galore!

This is with regard to “Is your property insured for a Nepal-like earthquake?” by Raj Pradhan. This is a very important and timely article. Hope you will also suggest specific products. I have spent days reading through the fine print of Insurers (ICICI-Lom, Bajaj-Allianz, etc). All I can see is exclusions galore.
Anand Vaidya, online comment

More Explanation

This is with regard to “Home Insurance: Review of New India Assurance Griha Suvidha Policy” by Raj Pradhan. The insurance rate is confusing. This needs more explanation.
Shirish Sadanand Shanbhag, online comment
Raj Pradhan replies:
Rs0.30 per thousand means that to buy property cover of Rs20 lakh against fire and allied perils (excluding earthquake), the premium will be Rs600pa. The property cover should be taken on a reinstatement value basis and not on the property value. It should cover the price of rebuilding the property in the condition it was before the damage.

Sensitise Investors!

This is with regard to “Datson’s Lab: Orphaned Investors; Unscrupulous Promoters” by Sucheta Da-lal. I know it is impossible for Moneylife to ascertain the credentials of all such companies. Howev-er, is it possible that Moneylife starts a separate column or website to sensitise investors about the risks of such entities as and when you come across them in the prospectuses? Of course, please do not do this for free—please charge—at least people who are careful about their money will not invest in such dubious deals. In short, I am asking Moneylife to do the work of SEBI, which should be dismantled forthwith—it has become a parking lot for many. Ever since Sucheta Dalal blew the whistle in the Harshad Mehta scandal, I have been following her writings. In fact, we now have a saviour like Moneylife.
Hemlata Mohan, online comment
Sucheta Dalal replies:
We actually do better than that... we run regular financial literacy sessions at Moneylife Foundation our not-for-profit initiative. Please join Moneylife Foundation and attend our seminars. One of the things we say is that 90% of the financial products pitched at you are useless and maybe downright harmful. 
If you are a Moneylifer, you would not even look at such companies. So, briefly, we would not be able to track and report on the thousands of ponzis, MLMs, and shady IPOs that hit the market. We can guide people on how to choose what is good for a long-term saver and we are doing that. Please check out the helplines and Moneylife Foundation events pages.

Delayed Feed? 

This is with regard to “Blowing the Whistle on Manipulation in NSE” by Sucheta Dalal. It is clear that the NSE (National Stock Exchange) goofed up in setting up its IT infrastructure. Load-balancers and time-synchronisations are the norm. They missed some of the key points which every server ad-min would take care of, like hiding the servers behind a proxy, time-synchronisation, sharing the back-end server’s IP (Internet protocol) with the outside world. The very design of a server, which prioritises the first connection, is dead wrong.
However, I did not understand why the TCP (transmission control protocol) affects the price feed. Unless I am missing something, TCP is reliable and ordered. Only if the NSE feed is designed to send all the ticks for a day, even if I connect at some random point in the day, is there the chance of getting a delayed feed.
If TCP had to give priority to the first connection, then, logically, any person first coming to any website should be able to get the best performance throughout the day. But that is not so. As the load increases, even the first connection will get delayed responses.
Pravesh Pandya, online comment

Is There Fear of Regulator’s Intervention?

This is with regard to “When Banks Cheat Customers” by Sucheta Dalal. Mis-selling is very common with almost all private sector banks and, by any chance, if some customers take up the issue, they silence them by either refunding their investments or consoling them with some excuses, apolo-gies and regrets. The fact of the matter is that the banks intentionally indulge in such mis-selling taking advantage of either customers’ ignorance or patience and incompetence to fight for their right and get redress. Some well-informed customers take up the issue with the banking ombuds-man or the Securities and Exchange Board of India or the Reserve Bank of India and they may or may not be getting a favourable response. However, the fact remains that the regulators have failed to prevent banks from indulging in such activities and cheating customers. The fear of regula-tors’ intervention and taking disciplinary action against wrongdoings has been missing. This is the reality and, from this angle, the approach of Moneylife to expose such wrongdoers is commenda-ble.
Gopalakrishnan TV  

II. Perhaps, Moneylife needs to bring this to the notice of banking ombudsman (BO), Kolkata ([email protected]), at least, to know if the issue was brought to BO’s notice and whether that office has any view on the episode. This will also indicate the problems that customers will face. The business of banking has changed over time. Multiple-tasking by banks without the skills or, at least, the willingness to be honest in dealings, is an area where ‘regulators’ and ‘supervisors’ will have to warn the public about the consequences. 

MG Warrier


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