Sunday, 31 August 2014
FIVE WAYS TO AVOID WASTING MONEY
-------------------------------The Economic Times
1.Don't roll over your credit card balance
Debt qualifies as one of the biggest money wasters. While good debt, such as a home loan, can help you build an asset, a bad debt like rolling over credit card balance can deplete your savings. In fact, it's one of the worst types of debt because of the high interest rate(typically 12-42% per annum) that credit card companies charge. So, if you have a Rs 15,000 balance on a card that charges 3% interest every month, you will have to pay Rs 450 a month. Over the year, it will add to a sizeable Rs 6,386 (if the interest is compounded), which translates to an effective interest of 42.58% per annum. So, pay your bill in full every month. However, credit cards can also be beneficial if you always pay your bills on time and in full, since you can build a good credit history. Besides, most cards come with enticing offers, such as cash back and reward points. Take ICICI Bank's Platinum credit card, which offers three points for every Rs 100 spent. On collecting 2,000 points, you get a gift voucher of Rs 500 of a popular retail store.
2. Keep vices at bay
An addiction can become a money-sucking black hole. If you smoke five cigarettes a day, more than Rs 10,000 of your wealth goes up in smoke every year. The gutka users, who consume five pouches a day, are chewing up almost Rs 7,000 in a year. These vices don't just affect your health and eat into your annual expenses, but also result in a higher premium when it comes to buying health or life insurance. For instance, a 30-year-old non-smoker will pay nearly Rs 4,100 a year for an online insurance cover of Rs 50 lakh for 30 years, but if he smokes, the premium will jump 40% to Rs 5,800. To find out how indulging in vices can leave you poorer in the long run, read our story 'Can you afford to see Rs 52 lakh go up in smoke?' (March 5-11, 2012).
3. Don't keep gadgets on standby
Of the total electricity consumed in an Indian house every year, nearly 5% is used by gadgets on standby mode, according to the data released by the Bureau of Energy Efficiency in its report, Standby Basket of Products, in 2010. The electronic items that display a clock, such as a microwave or radio, or those that operate through a remote, such as DVD players and air conditioners, are typical culprits. For instance, an air conditioner consumes 40 watts an hour on a standby mode. This means that you're adding about Rs 75 to your monthly electricity bill for no reason (read 'How to slash Rs 3,500 on your power bill', February 6-12, 2012). The obvious way to lower your electricity bill is to pull the plug on these gadgets, literally. If you are too lazy to turn off each power point individually, get a power strip where you can plug in all your gadgets. Switching off the smart strip will cut the power supply to all gadgets.
4. Save on banking transactions
In the past few months, banks have revised fees for various services that were free till now. So, if you don't keep track of these revisions, you are likely to see your money trickle out as penalty. For instance, several banks have made the maintenance of minumum balance in a savings account mandatory for each month instead of a quarter, and the penalty for non-compliance has also been raised. Similarly, the 12 free branch transactions in a quarter have been reduced to four in a month, again with a rise in penalty. Phone and Net banking are a good way to avoid some transaction fees.
5. Ask for discounts
Bargaining is your birthright, so never be embarrassed to ask for a discount, whether you're buying a laptop or a car. Every dealer is keen to make a sale, so he'll be willing to compromise a bit on his commission. Usually, you can have the price lowered by 5-10%. The trick to bargaining is to do your research well. Check online stores and visit a few brick-and-mortar shops to check the variation in prices. You can also ask for a discount if you pay by cash since this saves the store the cut it has to pay the credit card company. You should also ask for coupons at various eateries, mostly fast food joints, and supermarkets if you've spent a sizeable amount while shopping. These coupons can help you save money the next time you shop. While dining out or booking a movie, check which credit/debit card offers a good deal. For instance, if you book a movie on Bookmyshow.com using a Visa card, you could currently get 25% off on the price.
Thursday, 21 August 2014
Cheque Frauds!!!
Is someone using your cheque book?
The text message was like any other from a bank back office. "Your
ACXXXXX704753 Debited INR 6,90,123.00 on 07/08/14- DR THRU CHQ. Avl Bal INR
............."
Vasudev Kataria, a businessman and the account holder with a large
stateowned bank, knew something was amiss: he had not signed a cheque in the
last one week. Did the bank make a mistake? He accessed his Net banking
account; money was missing and the cheque number was 977199. He looked around
for his cheque book. It was lying in his drawer.
As he flipped through the pages, Kataria spotted the leaf with the number 977199. There was someone, he knew, who had deposited a cheque with the same number to take money out of his account. Is it possible? What was happening? Kataria sensed that he was not a victim of new-age frauds that newspapers have been reporting about: no one had stolen his Net banking password; no hacker had fished out his credit card data.
Instead, someone had simply used a cheque that was a replica of a leaf
in his cheque book. Half an hour later, Kataria was told by the bank's Mumbai
branch manager that the cheque was debited at the bank's branch in Nipani, a
non-descript town in Karnataka and 37 kms from Kolhapur.
While Kataria did not lose any money (as the amount was credited back to his account by the end of the day), he as well as his branch manager are clueless of what happened, how it happened.
- How could someone, whom Kataria had never met, whose identity he was unaware of, get to know the cheque series that Kataria was using?
- Are there fake cheque books floating around? Aren't cheque leaves
printed on special paper in some well-guarded security printing press?
- Don't cheques have security features like watermarks similar to currency notes?
- How does a man in Nipani get to know Katariafs signature?
The bank may stay mum and one doesn't know whether the police will ever
look into the matter even though Kataria has filed a complaint with the local
police station (after the Mumbai Economic Offences Wing told him it does not
probe frauds less than Rs 3 crore).
What happened to Kataria could happen to anyone. One can only guess what the fraudster did. He befriended someone at the bank's central hub which issues cheque books; the guy at the hub may have put him in touch with his colleague in Kolhapur or Kanpur or anywhere — as core banking solution gives any employee at a branch access to account details, signature impression and available balance of any customer.
Officials often clear cheques looking at images transmitted to them on
their computers and may not have a chance to get a feel of the paper to figure
out that a cheque is fake. Kataria's bank has found out the conman, a resident
of Belgaum with an account in a large co-operative bank, deposited the cheque
with the Nipani branch of the co-op bank.
Fake FD Receipts
At a time when banks are trying to curb phishing, there are oldfashioned
conmen who prefer printing fake cheque books and fixed deposit certificates. In
the past few months, the Mumbai police has arrested a few after some companies,
educational institutions and temple trusts in Maharashtra discovered that
someone had raised money through overdrafts against their FDs using fake
documents.
It begins with a broker who promises the best rate on FDs, collects documents like balance-sheet and tax returns, and opens an account on behalf of the institution. He also prints fake documents that look identical to originals.
After the money is deposited — either through electronic transfer or account payee cheques — the broker collects the FD receipt but never delivers it to the client.
Instead, an envelope of the bank is used to courier a fake receipt to the deposit holder who suspects nothing. Weeks after the FD account is opened, the broker — once again representing a company — raises an overdraft using fake documents. Old-fashioned crooks can be as smart as new-age con artists.
http://blogs.economictimes.indiatimes.com/OfftheBeat/entry/is-someone-using-your-cheque-book
Banks may Get More Teeth in Fight against Defaulters
August 21, 2014
The finance ministry will back
lenders in changing management of companies that wilfully default, tweak the
rules of appointment of public sector bank chiefs, and make sure that bankers
are not victimised. “A bona fide decision can also go wrong...we can't penalise
a person for that. He has to be protected. Otherwise, no one will take decisions.
So, we will protect the person where there is no collusion,“ GS Sandhu,
secretary , financial services, said here on Wednesday . His comments come at a
time decision-making at state-owned banks has slowed down amid fears that
officers who sanction loans could be pulled up by the Central Vigilance
Commission (CVC) if an account turns bad. In a separate development, Oriental
Bank of Commerce and Dena Bank have initiated a forensic audit after it
surfaced that Rs. 436 crore has been misappropriated from fixed deposits of
customers. Soon after Syndicate Bank CMD SK Jain was arrested over allegations
of bribe against loan, the Central Bureau of Investigation (CBI) had raised
concerns over the high quantum of bad loans in the banking system, indicating
collusion between lenders and promoters. Speaking to newspersons at the annual
general meeting of Indian Banks' Association (IBA), Sandhu said the government
is also working towards amending the Debt Recovery Tribunal (DRT) and
Securitisation & Reconstruction of Financial Assets and Enforcement of
Security Interest (Sarfaesi) Act to arrest the surge in sticky loans. A change
of management is very difficult in India, he said. “The tendency on the part of
promoters is to stick to the unit. No matter what happens...even if they can't
provide additional funding, or run it. But they will not move out. So we have
to provide legal provision to force them to move out and bring in someone else
who can bring additional capital, additional equity and run the unit and pay the
money back to banks,“ he said speaking at the annual general meeting of IBA. He
added that change of management will be applicable “wherever the borrower is
not repaying deliberately...wilful defaulter. In those cases by legal force
change of management can be done.“ On the appointment of PSU bank chiefs,
Sandhu said the government is thinking of appointing CMDs for five years with a
caveat that they will have to step down after three years for nonperformance.
He was categorical that the government will not endlessly infuse capital to
keep weak banks afloat. “Whether it is a private or public sector bank, it has
to manage its affairs by generating revenues. The government cannot endlessly
keep on providing capital,“ he said. The Reserve Bank of India has estimated
that private and public sector banks will require Rs. 4.75--5 lakh crore by
2018 to adhere to Basel III norms -the global regulatory standard on bank
capital adequacy ratio. – www.economictimes.indiatimes.com : http://corporatelaws.taxmann.com/topstories/222330000000003647/banks-may-get-more-teeth-in-fight-against-defaulters.aspx
Tuesday, 19 August 2014
Subscribe to:
Comments (Atom)