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Allahabad Offshore Banking

Posted by banker on April 26, 2012

Allahabad Bank to set up 4 branches offshore

The technical and technological advancements of the world and the internet revolution have enabled availing plentiful services. One of the industries that benefited with the technological developments and inventions is the banking industry, where the banks are expanding their operations and services overseas, called the offshore banking. Offshore banking is just ideal type of banking service for the NRIs who wish to remit funds to India, just with a few clicks away. Recently, one of the public sector banks in India, the Allahabad bank has planned to involve in offshore banking with an idea to setup 4 branches offshore.

Allahabad bank has its existence in the country for around 148 years and is more likely to celebrate the completion of 150^th year. The longer history with promising banking services has moved the authorities to enter into the offshore banking. Eventually, it has aimed to initiate the process of setting up four branches, facilitating the offshore banking. TO procure with the Allahabad offshore banking, the bank has also passed an application to the Reserve Bank of India. The regulating authorities of the Reserve Bank of India approved their application and granted permission to setup the Allahabad offshore banking.

Mr. J. P. Dua, the CMD of the Allahabad bank addressed that they have approached the respective authorities to open the offshore banking, i.e the overseas branches of Allahabad bank in four countries. It Includes Shanghai, Singapore, Hong Kong and Dhaka, Bangladesh.  Among the four countries, the bank has planned to have one overseas branch in all countries, except the Hong Kong, where it is more likely to set up two branches.

Moreover, Allahabad bank also has its official representative and the office in China. Eventually, getting approval and permission to setup Allahabad offshore banking at Shanghai would not be a major issue for the authorities.

Allahabad bank is also aimed at using the state of the art technology to offer the contemporary offshore banking services at affordable price to the esteemed customers of the bank. As a part of the Allahabad offshore banking procedure, the bank has announced the recruitment for the post of probationary officers and clerks.

Public sector banks in India have already entered into offshore banking, in which State Bank of India, Canara Bank and Indian bank are the leading banks. However many public sector banks has its representative in the overseas countries, without having the dedicated and specialized offshore banking service.

After setting up the offshore banking at four different countries, the bank has also planned to extend the offshore banking services to countries in UAE, which is more likely to be initiated in a couple of years.

Gold ETF – Advantages

Posted by banker on April 20, 2012

Investment in gold is the rage now and gold investment is made in various forms. Gold ETF is growing as one of the potential form of investments and let us see the advantages of investing money in gold ETF and how it works.

Gold Exchange trade funds, shortly called as Gold ETF refers to buying e-gold. It doesn’t call for holding the gold physically. Buying the gold ETF has numerous advantages, initially, there is no requirement to take necessary steps to safeguard the gold. Moreover, gold ETF, the e-gold is the purest form of gold, the 24 carat gold, which can be sold at the prevailing market price, even without losing a penny. Above all, it is a highly liquid form of investment, which can be sold easily online and the sale proceeds are received instantly into the bank account.

How Gold ETF works?

The mutual fund unit, the company selling the mutual fund units approaches an authorised bank to arrange for the physical gold, which is followed by approaching SEBI to mobilise funds from the potential investors. A prospectus is issued to the SEBI to get it approved. SEBI approves the prospectus and the mutual fund ETF units are issued to the investors against money collected towards the deposit. The ETF unit is sold in various denominations, say grams, which include 1 gram, 2 grams and so on. Similarly, gold ETF is also in currency and appropriate gold ETF funds are allocated to the respective investor.  After the specific mutual fund order is closed by the issuing company, the buyer of gold ETF can share, transfer, close, sell or buy the gold ETF units. The funding house buys the insurance to protect the loss of physical gold.

Earlier, the mutual fund houses sold the gold in kilograms, which could be afforded only by the rich and affluent investors. Lately, the demand for gold enabled the mutual fund houses to sell the units starting from minimum of one gram of gold.

Advantages of the Gold ETF investment:

Purity: 99.9% gold, the 24 carat gold is sold by the fund houses, which can be exchanged or sold at the market place.

Affordability. When compared with purchasing the 1 gram of physical gold, the cost of gold etf is relatively cheaper. Smaller amount of investments is possible.

Reduced risk: The ETF is issued in demat, electronic form, where the risk of theft is eliminated.

No hidden prices – The price of gold is very transparent and there is no hidden cost

Tax benefits – Purchase and sale of gold ETF enable gaining tax benefits under capital gains.

Forex Trading in India

Posted by banker on April 9, 2012

Lately, there is a chaos revolving around, across the country about RBIs plan to ban the forex trading in India, as it is considered the illegal activity. Is it true? Lets check the recent notifications from RBI on forex trading in India.

Indian investors are highly attracted by the gimmicks of the online advertisements, claiming to make them earn handsome amount in a short time by forex trading. Majority of the investors, uses the credit cards to start the forex trading in India. Very surprisingly, transacting with the credit cards in the forex trading is an illegal business, in India.

Forex trading in India using the credit cards is illegal and the Reserve Bank of India have notified the same to the credit card issuing banks and companies not to extend permit to use the card for forex transactions and marked it as illegal transaction.

FEMA , The Foreign Exchange Management Act 1999, has the specific regulations that prohibit the Indian residents not to trade in the foreign exchange both in domestic forex market as well as the overseas market. The notification about restricting the credit card payments for forex trading in India has awaken the emergence of a number of foreign exchange trading portals, aiming to attract the Indian traders with high returns. Many such electronic forex trading portals have exclusive brokers and forex agents to grab the investors by promising them to offer the attractive returns.  Eventually, thousands of forex traders lost their money through the forex trade in the recent period. In majority of cases, most of these portals collects the margin money, to fake the unlawful transaction and make it lawful.

RBI reported that “The advertisements by these Internet or online portals exhort people to trade in forex by way of paying the initial investment amount in Indian rupees.” The RBI notified the credit card providers to pass an alert to the customers notifying about the unlawful transactions using the credit cards. It is the responsibility of the credit card providers to mark the payments for forex trading as illegal and make necessary legal actions. Appropriate requisition has been made to the card providers by the Apex bank.

In addition, the apex bank, RBI, also has taken necessary steps to trace and track the transactions collected by any account, opened in the name of individual or in the name of a company, which act as an agent to collect the margin money to enter into the forex trading. Any resident Indian, who collects and remits the payments outside India is punishable under the clause of contravening the FEMA and RBI regulations.

BOI Share Trading

Posted by banker on April 4, 2012

Bank of India brings to you an easy, transparent, hassle free and speedy way to trade in a large number of listed securities.  No hassle of visiting the Brokers or Bank Branch.  Just by click of a mouse or contacting the Brokers over phone you can execute Trade.

The bank facilitates Trading in securities through Tie up arrangement with the following Brokers.  In terms of this arrangement, savings bank account or current account, Demat Account is maintained with Bank of India.  Trading Account would be with the Tie up Brokers and the funds/Shares are transferred to the Bank of India account of the customers on the payout day.

Eligibility

The following categories of account holders are eligible to enrol for the online share Trading (OLST) facility.

1. Individuals – single or joint account

2. NRIs, PIOs

3. Proprietor

4. Partners

5. Trusts etc.

6. Body corporate etc

Online Share Trading facility is available to clients of all our Branches having SB, CD or OD Accountant also a Demat account also with Bank of India. Under the concept of 3 in 1 Account (Star Share Trade) the Banking Account, Demat Account and Trading Account of the customers are integrated to make your transactions transparent/seamless.  For the customers who have availed the facility of Star Share Trade, Funds/Securities are automatically transferred to their account with Bank of India. There is no need to handover separate DIS or any other Instructions. Those customers who do not have Demat account with BOI may open the same and then integrate the same with SB and Trading Account. Customers may open as many Demat Account as they wish. There is no restriction on No of Demat Accounts to be opened.

Facilities available:

1. Delivery based Trading

2. Intraday Square off

3. Buy Today and Sell Tomorrow (BTST)

4. Trade Multiple

5. Access to Research and Reports

6. Recommendations available on each Trading Day over phone/Email

Registration and Documentation

• In order to avail Star share Trade (OLST) facility, customers  have to register with any of the above four Tie-up brokers, by filling up and signing the Registration Kit.

• The Registration kit is a booklet comprising of Application Form , Stamped Agreement cum POA  (present stamp duty is Rs. 400-) and other Annexures

• The on-line trading clients should have their designated Bank account (to which the amounts for buy and sell of shares would be debited/credited) with one of the Bank of India Branches

• The clients should have a DEMAT account with Bank of India NSDL DPO or CDSL DPO

ULIP The Better Saving Option

Posted by banker on March 30, 2012

In spite of service tax hike, ULIPs remains a lucrative option

Investing in ULIP is a market related protection plan. The dissimilarity between a ULIP and other prevailing insurance scheme is the technique in which the brokerage money is invested. Brokerage from, say, an regular plan, is endowed primarily in risk-less financial instruments like national securities (NS) and triple A rated commercial paper, while premiums generated by investing in ULIP can be put in share markets as well as national securities and corporate bonds. So what else besides this purpose makes investing in ULIPs are so attractive to the investor? Now, we shall explore a few reasons, which have made investing in ULIPs so irresistible.

Transparency

Investing in ULIPs gives a transparent choice for clients to plan their several life stage wants through market driven investments as paralleled to traditional investment strategies.

Insurance shield plus savings

Investing in ULIPs serve the aim of offering life insurance combined with investing at market related returns. To that degree, ULIPs can be labeled as a two-in-one scheme in terms of offering an investor the dual benefits of life insurance and savings. This is unique in comparable financial instruments like a mutual fund for example, which doesn’t provide a life cover.

Several investment choices

Investing in ULIP offers variety than old-fashioned life insurance schemes. So there are many options at the investor’s disposal. Investing in ULIPs generally comes in 3maincategories:

• Bellicose ULIPs (which put 80 percent -100percentin equities, remaining in debt)

• Composed ULIPs (invest approximately 40 percent-60 percent in equities)

• Traditional ULIPs (invest close to 20percent in equities)

Even though this is how the investing in ULIPs options are usually planned, the precise debt/equity divisions may differ as per insurance firms. A ULIP investor has the choice to invest in a range of funds, as per her or his risk appetite. If one doesn’t have the interest to put money in equity, they can select a debt or composed fund.

Flexibility

Investors can swap between the various ULIPs outlined above to benefit from on investment chances within the debt and equity markets. A few insurance firms permit a fixed number of gratis swaps. This is an imperative feature that lets the learnt investor/individual to profit from the impulses of debt/stock markets. For example, when share markets were on the edge of 6,000 (NSE), the well-versed investor investing in ULIPs could have moved his resources from a Bellicose ULIP to a less risk Traditional ULIP. Swapping also aids people on another front.

Creating Wealth

Posted by banker on March 23, 2012

Create your wealth this financial year

It’s the beginning of new financial year and with the budget 2012-2013 already out, common masses already has passed through many pains and few relieves. However still to prolong this new financial year without much of the financial stress and hassle it is better to plan out the year in terms of financial prospects to avoid any financial crises during or even the end of the year 2012-2013.

Looking forward to make a smooth financial path for the year 2012-2013, I am sure many of you already might has set the road map but still we are out with some of the resolutions and tips and if you miss out anything from our list then you can added the goal to your list to have a smooth financial road map. So let’s find out what can be the simple tips and tricks to create wealth this financial year.

1. Saving 10 to 15 percent of your monthly income and invest them to create wealth is a good option. A salaried person feels rich when he gets a salary credited to his bank account. No doubt you need to pay your EMI, surpluses for your food, outings, gadgets and the other over heads. But if you can manage of bring out the 10 to 15 percent of what you earn from your salary then this can create huge difference in the end.
2. Invest in gold is another good option. Looking at the increasing price of gold, investing in gold is also a good option especially when prices are going bit down and there is great chances that it will going to be double in next 3 to 5 years.
3. Investing small amount in mutual fund is also seen as the lucrative options both in terms of saving and also to get relaxation on the income tax.
4. Saving on child plan is also a great thinking to secure your children future and ensuring that their future will never fall into a dig due to financial crunches.
5. Life insurance schemes had always been a lucrative and a worth option for common masses and if you can manage to invest small part of your savings into it then in return you can expect great outcomes in near future.

SIPs are also a lucrative option and are quite good for people earning less and are having tight hands.

Citibank preferred rupee checking account

Posted by banker on March 13, 2012

The Citibank Preferred Rupee Checking Account is an interest bearing savings bank account for NRIs, held in India in Rupees. It is a power packed account that not only caters to the banking needs but also offers a host of privileges, benefits and services. NRI Banking has never been so easy. With Citibank preferred rupee checking account, NRIs can send money easily to India via the NRI account.

Non-resident Indians and Indians traveling abroad on work with a valid passport and a valid H1/L1/J1/H1-B visa are eligible to open a Preferred Rupee Checking Account. A Preferred Rupee Checking Account can be opened with an initial credit of USD 5,000. When you deposit money in your Preferred Rupee Checking Account, the funds are converted from US dollars to Indian Rupees at attractive foreign exchange rates provided by Citibank especially for you. Interest is payable only on Savings Account and not on Current Account.

Key features of Citibank Preferred Rupee Checking Account:

Higher interest rates:

• 4% interest on daily balances in your account
• Send money to India at great exchange rates

Faster, smoother and safer transactions: Highly secure banking system that enables faster money transfers to your loved ones in India.

Priority services blended with attractive packages:

• Exclusive privileges on Gifting, Travel and Entertainment
• Exclusive lifestyle, travel and dining privileges with the MasterCard Platinum ATM / Debit Card on your Preferred Rupee Checking Account
• Quicker query resolution via 24×7 Priority Service Queue
• Waiver of charges on duplicate statement and cheque collection

Greater convenience to the entire family:

• ATM / Debit Card and Checkbook for your family back home to access the funds
• Now you can reach your family wherever they may be – Demand Drafts delivered to over 700 cities across India
• Pay electricity, telephone and other utility bills using your Preferred Rupee Checking Account

Above all there are special privileges offered to the Citibank preferred rupee checking account holder. It includes the following:

• Special discounts on room rates, and food and beverage bills at hotels and resorts across the world
• Hertz Car Rental Privileges
• 10% off Hertz Affordable Rates (leisure retail rates) at participating locations worldwide
• MasterCard Platinum ATM / Debit Card holders enjoy additional privileges:
• First year fee waived on Hertz #1 Club Gold membership (worth US$60/year)
• Special Access to exclusive airport lounges
• Irresistible discounts and offers on travel and holiday packages

TATA SIP

Posted by banker on March 13, 2012

Take your first step into the wonderful world of investments with Tata Systematic Investment Plan (SIP). Tata SIP is a simple method that helps you invest money regularly. It is just like a recurring deposit where you put in a fixed amount every month. Thus, it helps inculcate the good habit of disciplined investing.

TATA SYSTEMATIC INVESTMENT PLAN (SIP)

A Systematic Investment Plan helps you invest a fixed amount regularly at a specified frequency say, monthly or quarterly. SIP is a simple method of investing used across the world.  So, what are you waiting for? Start a Tata SIP today in our range of schemes from as low as ` 500/- per month.

How does an investor need to plan his investment?

• When chasing a financial goal, the simplest form of planning is to invest regularly.

• Most of us calculate our earnings, expenses and savings on a monthly/quarterly basis. The easiest way to plan our investments, therefore, is on a monthly/quarterly basis.

BENEFITS OF TATA SIP

1) Regular Investing

• Identify your financial goals like buying a house, your first car, marriage, education.

• Set aside and invest a fixed sum of money regularly to meet these financial goals.

• Become a disciplined investor – maintain regularity.

2) Maintain discipline in your asset allocation

SIP helps avoid the temptation of jumping from one asset class to another during certain market conditions.

3) Rupee Cost Averaging

•By investing a fixed sum at fixed intervals we can buy fewer units when the price is higher and more units when the price is lower. This is called Rupee Cost Averaging.

•SIP takes care that your average price works out to be lower than the price you would have paid at the market peak. It takes care that you invest across market cycles. Your average price works out to be lower than investing at the market peak. It helps you avoid the temptation of timing your investments “Market Timing” is best left to professionals.

4) The Power of Compounding

Instead of saving a huge chunk of money and investing it in a lump sum investment, it is better to invest regularly in smaller amounts. The reason being while your lump sum investment may attract returns it does not give you the benefit of compounded interest that happens in SIP investment. With an SIP investment your investment grows and also your interest earns interest. To know how power of compounding works click here to see an illustrated table.

TATA SIP FOR YOU

You can easily enroll yourself for SIP in our leading schemes by just submitting post-dated cheques or by giving an Auto-debit mandate with the completed enrollment form. The mutual fund will deposit the cheques on the requested date, credit the units to your account and will send the confirmation for the same. Every quarter the Mutual Fund will send you an account statement showing the amount of investments made at various time periods, total number of units held, the average cost of each unit and the market value of the investment.

Four step investment process

Posted by banker on March 13, 2012

Standard Chartered Bank, one of the foreign banks serving in India has laid down the brief outlook on investment process. Here is the simple guide on four step investment process.

Suitability profiling

To start with, the bank take you through a simple, easy-to-fill questionnaire, we gauge your appetite for risk, for specific investment products and for your entire portfolio. So whether you should be investing heavily into equity or in cash, whether that hot biotech fund is suitable for you, our profiling gives you the right answers.

Needs analysis

Do you want to buy that dream yacht in 10 years? Or are you still paying off your mortgage? All these and more influence your investment decisions. Try and identify with you the major aspirations that you need to invest towards, and size up the task by putting specific numbers and time-frames to each of them.

Mapping needs & Risk Profile

Invariably, the investing decision will throw up contradictions of varying degrees across the dimensions of return expectations, risk tolerances, liquidity and the criticality of the need. If your son is planning to go to University in two years, it is not probably a great idea to plan for it through equity investments. However, the corpus you have set aside might need significant growth in capital for it to suffice. The bank helps you in mapping and trying to reconcile contradictions like these across your various needs.

Selection

Finally, after all this, you need to invest. The bank with its number of investment products, help you cherry pick the best options from a plethora of products available. The product suite available for you is mind boggling, stretching across multiple asset classes and products.

Mutual Funds: Choice of over 300 funds offered by more than 15 fund managers. When you invest in mutual funds through the Bank, you can rest assured that they are “true-to-label”, have been evaluated for sound risk management practices and comply with all regulatory requirements.

Capital protected products: Equity and derivative-linked capital protection products offer you a flavour of the equity markets with capital preservation. The development of India’s first capital protected product, the Principal Protection Plan.

Fixed income products: Sovereign guaranteed fixed return instruments, for investment and tax planning. These include RBI bonds, ICICI/IDBI Bonds, NHAI/REC bonds etc. These represent a good opportunity for low risk, moderate return investments and help in your tax planning.

Equity Advisory Services: You are not satisfied with structured products. Your needs are unique, and your portfolio should be customised to suit your needs. We bring you a wide choice of the best fund managers offering customised portfolio management services (PMS). This is accompanied by best-in-class service levels and high levels of interaction with fund managers, just for special customers like you.

Fund of funds: These are portfolio products, which allow you to invest in multiple funds, set on an automatically rebalancing asset allocation strategy. In short, this represents a one-stop investment solution for you. We pioneered one of India’s first Fund of Funds, and offer you a bouquet of options to choose from.

Foreign Exchange Regulations on Travel

Posted by banker on March 13, 2012

Since the number of overseas travellers is increasing every year, while the reason for travel ranges from business tour, family vacation, honeymoon, etc, the overseas travellers need to comply with the Foreign Exchange Regulations.  It is regulated under the FEMA Act 1999, Foreign Exchange Management Act. Here is the quick look on Foreign exchange regulations on Travel.

Foreign exchange regulations on travel are incorporated with the core objective of eliminating the involvement of ‘Black money’ nothing but the unaccounted money for the expenses made in the overseas countries. Ultimately, no overseas traveller can carry the unaccounted money abroad.

The required currency of the country proposed to be visited should be purchased in India, before leaving from the Country, from any authorised dealers or the banks. A lot of private foreign exchange dealers are offering the foreign exchange service, which can be availed by providing authenticated documents pertaining to travel, which generally includes Copy of Visa, i.e the Passport copy, copy of air ticket, invitation from the country, in case of business travel, accommodation details for other type of travel, etc. The proof of proposed travel documents may vary with the dealers or the banks.

According the FEMA, Foreign exchange regulations on travel limits the foreign exchange to the maximum of $10,000/- or its equivalent in other currencies, per person per year, irrespective of the number of visits and the countries. Maximum amount per travel is limited to $2000. The currency can also be purchased as traveller’s cheque.

No foreign exchange currency can be purchased by cash, if the equivalent value of currency is more than Rs.50,000/-. The payment can be made in form of cheque, demand draft, pay order or through credit or debit card or online banking. Foreign exchange regulations on travel don’t require the travellers to Nepal and Bhutan to get the currency exchanged.

The amount not spent in the overseas country should be returned to respective dealer or bank or other registered dealers within 90 days, for the currency in form of cash and within 180 days, for the travellers cheque, of returning to India, in exchange of Indian rupees. However, a maximum of $2000 can be retained by the traveller, if such amount is gifted by a foreign resident.

If the traveller is more likely to visit other country in a short time, a maximum of $2000 or its equivalent can be retained by the traveller.

The above mentioned are the basic and vital foreign exchange regulations on travel to be adhered by the overseas travellers, with regards to exchanging currency to use in the overseas countries.

Rupee Dollar other blog of Financial Red India.