15-May_2011 - Money Mantra English Magazine by niusheng11

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                                                                                                                      EDITOR’S NOTE

                                                              Delayed is
        Year : 02
                               Issue : 37

                                                              A few months back, I had been to a TV show focusing on stock market invest-
        EDITORIAL TEAM                                        ment. The show was live and interactive. Calls form viewers were pouring in. One
        Divyanshu Gupta, Sr. Sub Editor                       of the callers asked for the ways to beat the time factor of investment. He meant to
        Alok Dwivedi, Sub Editor cum correspondent
        Harish Kumar, Sub Editor cum correspondent
                                                              say that consequences of stock market investments depended much on the entry
        Kailashpati Mishra, Senior correspondent              and exit point into a particular stock. May be, you enter into a stock when it was
        Prakash Priyadarshi, Jr. Sub Editor                   topping up and exit the stock when it was bottoming out. Another caller was more
                                                              curious about tips. He was of the opinion that it was a must to have strong infor-
        Harikrishan Pal
                                                              mation network to benefit from the market. He was talking about the consequences
        Arun Sharma                                           of information lag in stock market. What happened this week, reminded me of
                                                              both these callers.
        PHOTO                                                 On 15th April 2011, the day of Infosys Q4 result, Singapore Nifty (SGX Nifty)
        Ravi Girota                                           was showing a cut of almost 50 points while Nifty in India opened almost flat.
                                                              Such a difference in SGX Nifty and Indian Nifty are very common, but during a
        K K Pandey
                                                              few minutes of market opening, one of these indices follows the other and the
        8860609250                                            gain/losses are paired. On the aforesaid day, SGX Nifty and Indian Nifty refused
                                                              to pair ways. To the surprise of investors, Infosys result was delayed by almost 15
        PRODUCTION                                            minutes. Usually, it comes out before market opening, but this time it came out almost
        Deepak Rastogi                                        10 minutes after the market opening. And the result was so distressing that Infosys
                                                              tumbled by almost 10%. The delay accompanied with the distinct behavior of
        Sunil Parchha                                         SGX Nifty makes one to speculate that there was a considered information delay
        09953402555                                           to the benefit of some large investors. As soon as Infosys result came out, Indian
        Subhash Chowdhary                                     Nifty was made to follow the trend adopted by SGX Nifty.
        09313368616                                           A similar trend was observed with TCS Q4 result. It was to get aired by around
        Yashwant Kumar
        08860609213                                           2.30pm. CNBC TV 18 Channel had an exclusive tie up with TCS to telecast its Q4
                                                              result. Lata Venkateshan, anchor of the show, was repeatedly talking about the
        HEAD OFFICE                                           unexpected delay in TCS result. It's noteworthy that on the day of Infosys result,
        C- 125, Sector- 19                                    Udayan Mukherjee was feeling uneasy due to unexpected delay in result. The 15-
        Noida, Uttar Pradesh
        Email: editor.moneymantra@gmail.com
                                                              20 minutes delay in result telecast made the stock tizzy. The stock which was trad-
        Phone: 0120- 4710700                                  ing at a high of Rs 1244 fell to 1173 in a fraction of minutes and finally closed at
        Fax: 0120-4710728                                     1185. This can't be termed profit booking. The delay in transmitting information may
        www. moneymantra.co.in                                be to the advantage of somebody or some group. And after the result, there was a
                                                              high drama. One channel was terming it 'below expectation' and the other was
                                                              congratulating the TCS management for its 'above estimate' result.
                                                              Consumer groups have been demanding for long that prior estimation of result should
                                                              be prohibited on the lines of ban on exit poll of general elections. Capital market
        Published by Jyoti Narain for
                                                              regulator must ensure that result is telecast only after exchange is informed about
        Pearls News Network Pvt. Ltd.from C-125,              it and it is put on the exchange's website. Information should reach the investors at
        Sector- 19, Noida, Uttar Pradesh and Printed at       one go. But laxity on the part of regulators has been a cause of concern in this
        New Print India Pvt. Ltd. 8/4B, Site-IV, Industrial   regard. There are instances when interest rate changes by RBI were uploaded on
        Area, Sahibabad, Gzb, (U.P.) 201010                   its website before the regulators themselves revealed it in the press conference.
        Disclaimer: Money Mantra is a personal finance        Let us now talk about the cover story.
        magazine and the financial solutions provided by      The cover story of the issue is dedicated to aggrieved investors. If you have some
        different experts in this magazine are only sug-      complaint regarding any of the financial instrument/institution, you may find a ray
        gestive in nature. Readers should take advice
        from their financial advisors before taking a final   of hope in our cover story. Hope it proves useful for you.
        call. In no case, Money Mantra team or manage-                                         With best wishes,
        ment can be held responsible for financial loss
        caused to readers.
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           CONTENTS                                                 News Track
           May 1-15, 2011                                           08 Get claim even if no driving license
                                                                    08 SEBI seeks more power
           Volume 37                                                08 Regulators cautious with CDs

              ON THE COVER

              WHAT’S THE WAY OUT
              Sometimes we feel helpless. Be it the instance of
              the financial advisor mis-selling a product to earn
              more commission or a broker executing trade
                                                                    09   Corporation Bank starts ypaycash
              without our consent to meet his target, a banker      09   SEBI for more liquidity in F&O
              harassing in the name of signature mismatch or a      09   Motor insurance gets expensive
              postal department official refusing to pay maturity   09   MCX launches Gold Petal
              proceeds, we are compelled to run from pillar to      09   SEBI seeks power to tap cell
                                                                    10   SEBI to regulate invetment into
              post to get our own money. The cover story, not            Art
              only deals with such financial hassles, but makes
              an attempt to enlist workable solutions as well.

                                                                    10   Investors lap up Muthoot IPO
                                                                    10   Wealth protect from Generali
                                                                    11   SBI puts brake on teaser loan
                                                                    11   Buy gold at 5 per cent discount
                                                                    11   IRDA sets tone for telemarketing

                                                                    12   I-T dept may scan all realty deals
                                                                    12   ING offers all in one mutual fund
                                                                    12   Long queue for buying silver
                                                                    13   Rural counters from India Post
                                                                    13   Print postal stamp at home
                                                      36            13   India Post to start pre-paid cards
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           Stock & Commodity Banking
           18 Gold to move higher as                    58 Insurance with bank
           concerns still persist                       accounts
           Concerns over fiscal stabilities and         To lure customers, various banks have
           inflation are expected to continue           come up with health and personal acci-
           going ahead and will support the up          dent covers along with their bank
           move in yellow metal.                        accounts and debit cards.

           22 Market to remain range
           bound in near future                         Mutual Fund
           Domestic stock market has been con-
           solidating at a very crucial level after
           the upward move in last fortnight.
                                                        62 A different nature of
                                                        distributing gains
                                                        Bonus allotment has no impact on the
                                                        value of holdings as the value of the
                                                        share is adjusted according to the ratio
                                                        in which the shares are issued.

           Scrips on Radar                              66 Saral no more, now it is
                                                        Sahaj and Sugam
                                                                                                   News Analysis
           24 Eros International                        The simplicity of the return form is
           Eros International is planning to bring      dependent on the simplicity of the tax     16 IRDA bans ULP sale
           about 8-10 major film projects under         law for the compliance of which it is      through distance mode
           production in fiscal year 2011-12.           to be furnished.                           Insurers shall not solicit ULIPs of
           25 Sintex Industries                                                                    non-single premium type for annual-
                                                                                                   ized premiums exceeding Rs 50,000
           Company’s overseas subsidiaries and
                                                                                                   over telephonic mode, voice as well
           textiles business in back on track and
                                                                                                   as SMS.
           it has shown strong numbers last quar-
                                                                                                   14 Take the benefit of
           26 Crompton Greaves
           The company has maintained steady
           performance during the first nine                                                       By 2015, India is all set to become
           months of FY11 on margin front.                                                         the second largest digital market in
                                                                                                   the world with 86 million digital
           27 GSK Consumer                                                                         homes.
           GSK consumer has passed on the
           entire burden to consumers through a
           5 per cent price hike in January.             Consumer Watch
           28 Siyaram Silk
           The company is expected to benefit            68 Nobody is able to bell
           greatly from the growing middle-class         the cat
           population in the country.                    There are financial counseling cen-
                                                         tres through which the consumers
           29 Motherson Sumi
                                                         who face some hardship in respect of
           Wiring harness and mirrors segment            the repayment of dues can get it
           would continue to remain major                rescheduled.
           growth catalyst for future of the com-
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           READER                Mail
                                                                      I was looking for some authentic information
                                                                      on Gold and Silver. My search ended with your
                                                                      magazine. Although, I bought it to go through
                                                                      Anjani Sinha’s column on gold, silver etc, I
                                                                      was awestruck with coverage of entire com-
                                                                      modity space in your cover story Spice up your
                                                                      Portfolio. No other magazine has covered
                                                                      commodity space from investment point of
                                                                      view in so detail. And to top this all, you had
                                                                      mentioned the way to invest into equities side
                                                                      by side. The article was very useful for a novice
                                                                      investor like me. I liked the cartoon strip Fund
                                                                      Baba Bachat Singh as well. Perhaps, I was
                                                                      coming across financial cartoon for the first
                                                                      time. The theme was good and the presen-
                                                                      tation simple and lucid. Thanks.
                                                                                                           -Gokul Das, Mumbai

                Pawar Power                                                                        Small time brokers have fallen prey
                     Refer to “Why does ICC hate to                                                to them. This has added to the woes
                pay taxes?’’. It is unfortunate that the                                           of common investors, because
                Government of India has given tax                                                  cumulative commission has pushed
                exemption to a n organisation which                                                the prices further.
                is operating its finances through tax                                                      -Aditi Narayan, Gurgaon
                havens. In the name of sports, this
                organisation has been showered tax
                largesse. It’s done at the time when
                                                                                                   Need to do more
                an Indian is heading ICC. Sharad                                                       The write up on market sur-
                Pawar is known more for his person-        Brokers’ woes                           veilance ‘For the Sake of Market
                al gains than for his national con-                                                Integrity’ provided a much needed
                cerns. His stands have always been              I went through the article Learn   insight into the monitoring mecha-
                dubious as far as national interest        About a Property Broker. Property       nism of stock market. Despite such
                is concerned. Despite having own-          brokers have always been looked         strong surveilance mechanism,
                ership of so many sugar mills in           down upon by the society. The           frauds keep on happening. Our reg-
                Maharashtra, he is having the port-        movie Khosla ka Ghosla gave a           ulators need to keep pace with
                folio of Agricultural Minister. Is it      death blow to the image of proper-      frauds and keep on updating their
                not a conflict of interest? The author     ty brokers. But all property brokers    surveilance mechanism to protect
                has rightly pointed out the mecha-         are not alike. This profession is       retail investors. There are sevaral
                nism of ICC operations and detailed        unregulated as of date. There is no     news medium, which are in collu-
                its five subsidiaries operating from       uniform commission rate. Some           sion with such frauds. The regula-
                non-cricket playing nations espe-          charge 2% and others do it for 5%.      tors must add news media in their
                cially tax havens. The amount of tax       This needs to be supervised by law      watch list. Small town brokers are
                so exempted was not sahred with the        makers. The long pending Real           thriving on dabba trading and poor
                citizen of the nation. All we came         Estate Regulator bill is making the     investors are falling prey to them.
                to know is the fact that it was mere-      things worse. In the meantime, cor-     Regulators need tighten grip on such
                ly 45crores.                               porates like Jaypee and 3C have         operators.
                     -Mitas Karmakar, Pune                 started acting as corporate brokers.                  -C L Kaul, by e-mail.

                                                            SEND YOUR LETTERS & EMAIL:
                                               Address: Editror, Money Mantra C- 125, Sector- 19 Noida
                                                        Email: editor.moneymantra@gmail.com

           6   MONEY MANTRA   1-15 May, 2011
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                                                                                                         Cartoon Mantra
                                                       Yes man please!
                                                       A Boss feels blessed if he has a team of 'yes men'. There is always a chance
                                                       that the new recruit may behave otherwise and ridicules the boss . The HR firms
                                                           have been busy in finding the technique to single out 'yes men' type of
                                                               the candidates. A report published in Neuroscience journal has made
                                                                  their task easier. It is a particular gene, which turns a man into 'yes
                                                                   men'. If you find that the particular gene is not there in the candi-
                                                                    date, do not take risk with him. The researchers have found that
                                                                    coming to a decision often involves the listening to two parts of
                                                                    the brain - one that relies on taking the advice and the other on
                                                                    the experience. The brain weighs up the often opposing the views
                                                                    and then arrives at a decision to take an action. Some people have
                                                                    genes that skew the decision towards one part of the brain than
                                                                    the other. The genetic variation into DARPP-32 indicates that the
                                                                    individuals are more likely to do what he or she is told, even when
                                                                     it is contradicted by the experience. Do not feel awkward, if your
                                                                     prospective employer asks you to undergo genetic test to con-
                                                                     firm DARPP2. After all he is looking for a 'yes man' in you.

           Oh No!                                                                                 Rosy Look Mars
                Very soon, your spouse will be able to detect your whereabouts. All that
           he/she has to do is to feed your mobile number into a web based VAS serv-
                                                                                                  Job Prospect
           ice. Whether your mobile is switched off or discharged, GPRS enabled or bereft             Remove your make up, look
           of it, the application will trace your exact location. The government is study-        plain, if you are a woman and look-
           ing the feasibility of giving the value added service providers access to the infor-   ing for a job. Looks matter if you want
           mation related to the location of a cellphone as a part                                to get a job - but it may only help you
           of the National Telecom Policy 2011. Once                                              if you're a handsome man rather than
           given a go ahead, the service has the poten-                                           a pretty woman. According to the
           tial to locate the lost cellphones, tracking                                           research presented at the Royal
           the people anywhere in the country, by                                                 Economic Society's conference,
           simply feeding the mobile number in a                                                  good-looking women are discriminat-
           web application even if the handset is                                                 ed against by the female recruiters.
           not GPS enabled. At present, the location                                              The attractive women are better off
           of a cellphone can be traced by public only                                            omitting their photograph from a CV
           if the handset is GPS enabled. The location-                                           since it decreases their chances of get-
           based information of all other (non-GPS                                                ting a response by 20-30%, the study
           enabled) mobile phones can be only accessed                                            has found. The attractive women are
           by the security agencies using the mobile                                              called for an interview for the position
           phone towers.                                                                          less often than both plain-looking
                                                                                                  women and the women who had no
                                                                                                  picture on their resume. The women
           Three Men Use This                                                                     who attached no picture to their CV
                                                                                                  are 22% more likely to receive a
                This is used by just three men in the world. Luckily                              response than the women with a plain
           these three have been saved from the sudden                                            picture - and 30% more likely than the
           flood in Indonesia, otherwise this invaluable                                          women with an attractive picture.
           thing would have vanished with them. No , this
           is not a rare wine or an invaluable commodity,
           but a language called Dusner. The three sur-
           viving speakers are in their 60s and 70s.
           The average life expectancy in Indonesia
           is 71. The fourth speaker of Dusnar lan-
           gauge died during the flood that hit the vil-
           lage in October last year amid heavy rains.
           Dusner is one of about 130 languages that
           is spoken by fewer than 10 people. Of the
           6000 languages in the world, it is thought
           that half will disappear by the end of
           the century.
                                                                                                           1-15 May, 2011   MONEY MANTRA   7
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           News Track
           Driving without driving license?
           You will get insurance claim if..
                      hat will happen to the accident sight," the bench said, while dismissing against the vehicle's front window and

           W          struck driver plying on the road Bajaj Allianz's appeal against the district he sustained several injuries on his face
                      without a valid driving license. forum's order awarding damages to the and in the eyes. The district forum, ear-
           Obviously, the insurance company will driver.                                                lier, after considering Kumar's disability
           throw his claim into the dustbin. But Delhi     Ramesh had met with the accident in certificate, had found that he had lost 30
           State Consumer Commission (DSCC) has January 2007 when the axle of his auto per cent of his eye sight and is paid a
           added a caveat to the rescue of such suf- rickshaw broke down on Ring Road near total of Rs 85,000 as damages, for the defi-
           ferers. It has ruled that the driver can't Maharani Bagh area of south Delhi. The ciency in service, mental agony, harass-
           be denied the insurance claim if the acci- accident resulted in his face striking ment and the cost of litigation.
           dent is due to the mechancal fault in the
           vehicle, even if the driver has no valid BOLD AND BEAUTIFUL
           license at the time of the accident.
               The commission's bench of Justice
           Barkat Ali Zaidi and member Kanwal
           Inder ordered the insurance firm to pay
           the damages to the driver citing a
           Supreme Court judgement which said if
           the accident took place due to a mechan-
           ical fault, the insurance company is
           rquired to pay the compensation where-
           as the insurance company's contention
           was that the driver did not have a valid
           licence at the time of the accident. The
           bench asked Bajaj Allianz General
           Insurance to pay the damages to the auto
           rickshaw driver Ramesh Kumar, who had
           lost 30 per cent vision in both of his eyes
           following an accident due to his vehi-
           cle's axle giving way. "It can be safely
           held that the accident took place due to
           the mechanical defect in the vehicle
           which resulted in causing injuries to the
           complainant's eyes and ascertified by the
           doctors that he lost 30 per cent of his Aston Martin's design director Marek Reichman during its launching in Mumbai

           NEWS BRIEF
           Regulators cautious with CD           The great figure       For corporate governance                       Sahara lands in soup
           The flow of the foreign portfolio     Mastermind of          SEBI has called for greater regulatory         SEBI has issued a public
           money into banks' certificate of      Citibank fraud         authority in the governance of the listed      notice on 15 April 2011,
           deposits (CDs) through fixed matu-    Shivraj Puri took an   companies. It has asked the ministry of        reiterating the facts of the
           rity plans (FMPs) has raised con-     exposure of whop-      corporate affairs to expand its ambit on all   ongoing investigations
           cerns among the financial market      ping Rs 1.13 lakh      the matters of regulating listed companies     against Sahara India Real
           regulators. The subject was dis-      crore in the equity    through the amendments in the                  Estate Corporation and
           cussed in a recent inter-regulatory   market using Rs        Companies Act. It wants power to regulate      Sahara Housing
           body meeting, involving the RBI       236 crore of 51        matters related to theissue and transfer       Investment Corporation
           and the SEBI. The foreign investors   HNIs and corporates    of the securities and non-payment of the       taking cognizance of the
           are barred from directly investing    and lost everything    dividends by the listed companies. It has      report that they were
           in CDs, which are money market        following decline in   asked to broaden the scope of section 55       raising money from the
           instruments used by the banks to      the stock, reveals a   of Companies Act, 1956, which is now a         public despite
           raise short term money.               SEBI report.           clause 22 of Companies Bill.                   SEBI ban.

           8   MONEY MANTRA   1-15 May, 2011
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           YPAYCASH from Corp bank                                     LOVELY PICTURE
            Corporation Bank has introduced mobile wallet-
           ypaycash for the customers . It’s free for the bank's
           customers. To avail it, customers have to transfer
           up to Rs 5,000 from their Corporation Bank account
           to their mobile wallet. They can then pay using the
           mobile wallet in any shop where the merchant has
           installed the system. Under this facility, a special
           application is installed on the customer's cell phone.
           The customer keys in the amount to be paid after
           logging into the application. As soon as the user fills
           in the details, an automatically generated and dis-
           tinct barcode appears on his mobile screen, which the
           merchant then scans using his own mobile phone's
           camera. The payment gets done and the appropriate
           amount is debited from the customer's mobile wal-
           let. The merchants will be charged a fee of up to
           1.50 % of the transaction value.

           To infuse liquidity into F&O                                Prashanth Mani (R), Nokia India Regional General Manager (West), displays a picture
                                                                       on a mobile handset during the launch of an initiative by the company in Ahmedabad.
           SEBI is in the process of formulating the guidelines
           that will allow the stock exchanges to infuse liq-
           uidity into their futures and options (F&O) seg-
           ments through a liquidity enhancement mecha-
                                                                      Insurance gets expensive
           nism. The guidelines will be issued in a month,            Third-party motor insurance premiums will rise by up to 65 per
           and will be applicable only for the equity deriva-         cent for the two-wheelers, private cars and heavy load carriers from
           tive segment of the stock exchanges and not cover          April 25. The premiums have been revised after a gap of four years.
           the interest rate derivatives and currency futures.        From now onwards these rates would be revised annually. IRDA
           The proposal under consideration includes permit-          has fixed a formula for revising the motor insurance premium rates,
           ting the market makers for the derivatives segments        which will be done after taking into account of the inflation and
           and providing cash incentives to the                       data on the claim settlement. As such, the owners having third-party
           traders.Although the market making is not banned           cover for the private cars of 1,000-cc capacity will now have to
           by the regulator at the moment, the exchanges need         pay premiums of Rs 740, those exceeding 1,000 cc but below 1,500
           to seek the regulator's approval before launching          cc will attract premium of Rs 880 and those above 1,500 cc at Rs
           such a scheme if it offers some compensation or            2,750. The third-party cover for the two-wheelers of up to 350 cc
           incentive structure to the brokers. The major ben-         capacity would attract premium of Rs 330 and those exceeding 350
           eficiary of the proposed scheme will be BSE, which         cc would cost Rs 680. However, IRDA in its exposure draft had
           has been making persistent attempts to revive its          suggested a 10 per cent increase in the premium for the private
           derivative segment and increase the market share.          cars and two-wheelers and up to 80 per cent for goods carriers.

           SEBI seeks powers to tap cell MCX launches gold petal                                           SEBI to regulate PE funds
           SEBI has written to the Department of          MCX has launched one gram gold                   Private equity funds, hitherto unregu-
           Economic Affairs (DEA) seeking permis-         futures contract called 'Gold Petal'.            lated, are set to come under SEBI
           sion to access call and e-mail records as      Currently, Gold Petal May and June               regulations. SEBI has already started
           a tool to track the market transactions. It    2011 contracts have been offered for             working on regulating the private
           has come soon after SEBI instructed the        the trading. The trading unit of the gold        equity players and guidelines will be
           market intermediaries to keep a record         contract is one gram and the price               issued shortly, economic affairs sec-
           of employee e-mails, chats and blog tran-      quote is ex-Mumbai. The delivery of the          retary R Gopalan said. The regula-
           scripts to monitor the possible spreading      contract is possible in dematerialised or        tions will be on the lines of the ven-
           of unconfirmed market news. If SEBI            physical form. The physical delivery will        ture capital funds, which are also
           gets approval, it will make a big change       be available in multiples of eight gram          regulated by the SEBI, he added. The
           against the current scenario, where SEBI       coins. The delivery centres are Mumbai,          venture capital regulation requires
           can only request a service provider for        New Delhi, Ahmedabad, Hyderabad,                 mandatory registration with SEBI and
           records on a case-to-case basis.               Chennai, Bangalore and Kolkata.                  enjoys the status of a QIB.

                                                                                                                      1-15 May, 2011   MONEY MANTRA      9
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           News Track
                       WISDOM MANTRA
                                                       SEBI to regulate invest-
                If you wish to increase the sum
                of your life insurance cover bet-
                                                       ment into art works
                ter take an insurance cover for               EBI may soon frame a stringent
                your home loan. It’s nothing but
                an extra life insurance cover
                being sold as home loan insur -
                                                       S      set of rules for the funds invest-
                                                              ing in the art works, antiques,
                                                       coins and stamps, with an aim to check
                ance and the premium is less.          black money flow into these products
                                                       and safeguard the interest of the gen-
                                                       uine investors. SEBI considers invest-
                                                       ment of the funds focussed on the art
                                                       works, antiques, coins and stamps as         ties without registering with SEBI in
                                                       "Collective Investment Schemes",             accordance with the SEBI (Collective
                                                       which come under the ambit of the            Investment Schemes) Regulations,
                                                       capital market regulator. Globally, art      1999. As per the existing regulations,
                                                       funds are very famous as an alterna-         only an entity registered with SEBI as
                                                       tive class of investments for rich           a Collective Investment Management
                 We may not hit                        investors and have started gaining           Company is allowed to offer any collec-
            9 per cent (economic                       some ground in India over the past           tive investment fund or scheme, includ-
            growth rate in                             few years. However, there are no spe-        ing those focussed on the art works.
                                                       cific regulations in India for art and           Globally, alternative investment
            2011-12)..There is                         other such funds, which collect money        avenues are quite in vogue among rich
            no chance                                  from numerous investors, most of             investors, who are estimated to allo-
            for agriculture to                         whom are high-net worth individuals          cate 5-10 per cent of their investment
                                                       that invest in art works, antique pieces     portfolio into these products.
            grow at 6 per cent                         as also old and rare coins and stamps.           As per the annual World Wealth
            this fiscal, it may                        Earlier in 2008, a time when the art         Report of Capgemini and Merrill Lynch
            probably grow                              funds first became visible in India, the     Wealth Management, alternative invest-
                                                       regulator had issued a public notice to      ments are expected to account for near-
            at 3 per cent.                             warn the investors against putting their     ly 9 per cent of high-networth individ-
                                                       money into the art funds or schemes of       uals' financial assets in 2011. These
            MONTEK SINGH AHLUWALIA                     entities not registered with SEBI. At that   investments used to account for as
            DEPUTY CHAIRMAN                            time, SEBI had said that its analysis of     much as 10 per cent of HNIs' financial
            PLANNING COMMISSION                        various art funds has found them to be       assets in 2006, but had fallen to as low
            SAID IN DELHI ON 17TH APRIL.               'collective investment schemes' and          as 6 per cent by 2009 due to the eco-
                                                       were being launched by various enti-         nomic slowdown.

           NEWS BRIEF
           Investors lap up Muthoot                    Sovereign wealth fund                        Protect wealth Generali
           IPO of Muthoot Finance was sub-             SEBI is mulling over relaxing invest-        Future Generali has launched a
           scribed 24.24 times. The IPO                ment norms for sovereign wealth              flexible ULIP named Wealth
           received bids for 106.10 crore              funds, the investment vehicles which         Protect that offers wealth protec-
           shares compared with 4.37 crore             are directly controlled by the govern-       tion and an opportunity to create
           shares on the offer. The company            ment of a country, from the current          wealth. The product is available
           had set Rs. 160-175 price band for          ceiling of 10% to 20%. Once the              for the customers between 7-60
           the IPO. The IPO has received strong        new norms come into play, sovereign          years. Minimum annualized premi-
           response from QIBs. FIIs put in bids        wealth funds, also categorized as            um is Rs 25,000 and maximum is
           for 29.2 crore shares compared with         FIIs by the SEBI, will have the liberty      Rs 2,00,000. The premium paid in
           1.8 crore shares reserved for the           to hold up to 20% in a listed compa-         Future Generali Wealth Protect
           QIB category as a whole. The issue          ny. This will apply only to those funds      gets allocated to a fund of one's
           is expected to open at a premium of         which have an agreement with                 choice. Investors are allowed 12
           25-30% to its issue price.                  Indian government.                           free fund switches per year.

           10    MONEY MANTRA   1-15 May, 2011
EP-3-17divyanshu.qxd      4/25/2011       6:45 PM      Page 9

           SBI stops teaser loan Gold at 5% discount
           SBI will do away with its teaser loan            On the occasion of 'Akshaya Tritiya',
           scheme with effect from 1st May 2011.            which falls on May 6, postal depart-
           The bank will benchmark all its loans            ment will offer for sale 24-carat gold
           with base rate which has been hiked by           coins at a discount of 5-6%. This spe-
           0.25 per cent to 8.5 per cent effective          cial discount would be valid till May-
           April 25. The floating rate home loan            end. Post offices assigned with this
           schemes, coming into effect from May             facility will remain open that day. The
           1, will carry 9.5 per cent interest on loans     department has tied up with Reliance
           of up to Rs 30 lakh, 9.5 per cent per            Money for the sale of these gold
           annum for Rs 30-75 lakh, and 10.25 per           coins, which will come with tamp-
           cent for loans above Rs 75 lakh. Aseven-         er-proof packaging and have a sealed
           year auto loan will be priced at 10.75           cover along with certification from                             Apart from
           per cent or 2.25 per cent above the base         International      Gold      Council,                          inflationary
           rate, calling for Rs 1,670 of equated            Switzerland, for 24-carat purity.
           monthly installment (EMI) for every Rs           These coins will be available in dif-
                                                                                                                       pressures con-
           1 lakh of loan. The bank has removed pre-        ferent weights - 0.5 gm, 1 gm, 2 gms                  fronting emerging
           payment penalty on automobile loans.             and 10 gms - with an India Post logo.             and developing coun-
                                                                                                                    tries, there is the
           PLANNING FOR FUTURE                                                                                      danger of a slow-
                                                                                                                  down in the global
                                                                                                                 economy unless oil
                                                                                                              prices moderate from
                                                                                                                   current levels..We
                                                                                                                 have to remain vigi-
                                                                                                               lant and be prepared
                                                                                                                to deal with threats,
                                                                                                                 old and new, as we
                                                                                                                  repair and rebuild.
                                                                                                                                D SUBBARAO
                                                                                                               Reserve Bank of India told
                                                                                                                             in Mumbai
           The Prime Minister, Dr. Manmohan Singh presiding over the Full Planning Commission                        on 18th April 2011.
           Meeting on the Issues for Approach to the 12th Five Year Plan, in New Delhi.

           Gratuity in installments                       A cap on telemarketing                      New entrant in Life Insurance
           IRDA has allowed state-owned non-              IRDA has said that insurance com-           Edelweiss Tokio Life Insurance
           life insurance companies to provide            panies cannot sell unit linked insur-       Company Limited has received the
           for their increased gratuity liability in      ance plans (Ulips) with a premium           second stage R2 approval from IRDA
           installments. This will provide relief         of over Rs50,000 or a single premi-         to operate in the life insurance space.
           to the state-owned companies,                  um of over Rs1 lakh through direct          Edelweiss Tokio Life Insurance is a
           some of which would have other-                sales over the phone or online. The         joint venture between the Edelweiss
           wise been forced to approach the               new guidelines will be applicable           Group and Tokio Marine, an insur-
           government for additional capital.             from October 1. It's part of extensive      ance group based in Japan. In anoth-
           Also, the government had revised               guideline issued by IRDA on dis-            er development, IRDA has asked a
           upward maximum limit for gratuity              tance marketing. Telemarketing and          insurer to increase its capital base to
           under Payment of Gratuity Act 1972             online sell brings approximately a          Rs. 200 crore to get insurance
           from Rs 3.5 lakh to Rs 10 lakh with            business of close to Rs500-1000             license. As per rule, the minimum cap
           effect from May 2010.                          crore for the industry.                     base reuired is Rs. 100 crore.
                                                                                                               1-15 May, 2011   MONEY MANTRA   11
EP-3-17divyanshu.qxd      4/25/2011        6:45 PM     Page 10

           News Track
                 ncome tax department is mulling over scanning all

                                                                               1. IT department to scan all property deals of NCR.
                 real estate deals to detect use of the black money in         2. All transactions starting in 2010-11 may come under
                 acquiring the property, evasion of capital gains tax             the scanner.
                 on selling the property and subsequent evasion of             3. Reporting property transctions may be made compul-
           wealth tax. This move will have three effects: builders                sory for registrars under PMLA.
           will stop taking cash through back door resulting into
           curb on the black money inflow into the fresh properties;          affordable homes. The process will start from National
           in resale of the properties, the seller will avoid taking          Capital Territory of Delhi (NCR which comprises Delhi,
           cash from the buyer resulting into more revenue to the             Noida and Gurgaon) and extend to all the metros.
           stamp department, more capital gains to the income tax             Indications are that the transactions starting in 2010-11 will
           department as most of the people who sell their proper-            come under the scanner. At present, the department has data
           ties don't employ sell proceeds into buying another prop-          for 2009-10 available with it, while information for 2010-
           erty. If enforced effectively, these measures by the income        11 will only be available starting August 2011.
           tax department has the potential to control the 'fake'                 In a separate proposal, the government is also consid-
           demand of realty primarily due to its capability to absorb         ering making it mandatory for registrars to report all the
           black money. For the common man, it's a win-win situa-             property transactions under the anti-money laundering law.
           tion.                                                              Any property transaction used to launder illicitly earned
                Income tax department had been monitoring all the real-       money will, after an amendment in the Prevention of Money
           ty deals of Rs. 30 lakh and above through the registrars. The      Laundering Act, attract harsher punishment. The depart-
           registrars have been sharing data of such property deals with      ment is expected to rely heavily on the technology and infor-
           the income tax department on regular basis and the depart-         mation on taxpayers it receives from various sources under
           ment has been colaborating the data with the income pro-           360 degree profiling.
           file of the concerned person. In case of discrepancy, the              Realty sector has been on the income tax department's
           department used to take cognizance. Extending this pro-            radar for a while and tops the list of sectors most searched.
           vision to the realty deals even below Rs. 30 lakh is a major       The value of most real estate transactions in the national
           initiative by income tax department. It will scrutinize all the    capital are suppressed to save on stamp duty, capital gains
           property deals irrespective of its value and ownership. In         tax and wealth tax and are believed to have black money
           a recent practice, the people with black money were                component as high as 65%, said another income tax offi-
           observed buying affordable houses well below the value             cial. The black money component continues to remain high
           of Rs. 30 lakh and selling the same before registration. To        despite most states now fixing circle rates, or minimum
           capture such instances, the income tax department has taken        rate at which a property can be registered, for various
           a view to scan all the property deals especially so called         localities.

          NEWS BRIEF
           15 days Q at silver outlets                 All in one mutual fund                        RCom ties up with SBI
           If you wish to buy a brick of silver, you   ING has announced the launched of its         Reliance Com has launched mobile
           may have to book it at least 15 days in     ING Optimix Financial Planning Fund.          banking services for its GSM sub-
           advance. Silver has surpassed Rs.           This fund has the ability to invest across    scribers in collaboration with SBI. The
           70000 per kg mark increasing the            carefully selected best of breed Funds        customers will not require any special
           appetite of the investors for this white    from different asset management com-          mobile application or GPRS to use the
           metal. The price of the two precious        panies in one convenient fund. In addi-       service but they should have an
           metals have seen a sharp surge over         tion, the investors can invest in 4 differ-   account with SBI. They will also have to
           the last 12 months as the American and      ent asset classes; Liquid, Debt, Equity       register for the services with the bank
           the European economies remain wobbly.       funds and Gold ETFs while getting the         and will thereafter get messages for
           In recent months, the tension in West       flexibility to choose from 4 convenient       successful transaction. The users will
           Asia and the tsunami in Japan have only     plans that cater to different risk toler-     have to dial *595# to view simple
           added to the glitter of gold and silver.    ance levels investors may have.               menu choices and key in their choice.

           12   MONEY MANTRA   1-15 May, 2011
EP-3-17divyanshu.qxd      4/25/2011        6:45 PM       Page 11

                Best Performers in group ‘A’ vs Nifty
                                  (from 8-04-2011 to 21-04-2011)

                                                                                                                          As we have
                                                                                                                      seen in the last
                                                                                                                    monthly inflation
                                                                                                                     data released in
                                                                                                                   India, the biggest
                                                                                                                   component of the
                                                                                                                 rise is the increase
                                                                                                                in the price of fuels,
                                                                                                                 including coal. This
               SEBI to have Forensic Accounting Cell                                                                  is a new global
           SEBI is in the process of setting up a Forensic Accounting Cell to identify any
                                                                                                                   problem. We have
           bungling in the books and regulatory filings of the listed firms and market                            to supplement our
           entities. This Cell will improve quality of the financial information disclosed                        standard policies—
           and to assist in detection of the financial irregularities so as to serve as an                          and I will repeat,
           effective early warning mechanism. It's also mulling over the idea of seeking                        government has fol-
           help from outside professionals, use latest technology software tools and put
           in place its own 'investigation laboratory' to churn out new investigative meth-                          lowed these dili-
           ods. SEBI had earlier in February implemented a new tool for speedy analysis                            gently—with novel
           of data and identification of possible violations like insider trading. The new                                 measures.
           tool, named Data Ware Housing and Business Intelligence System, will enhance
           SEBI's investigation and surveillance functions and generate reports that will                                     KAUSHIK BASU
           equip SEBI to identify, detect and investigate aberrations and market abuses
           that undermines the market integrity. This tool would help SEBI monitor the                             Chief Economic Advisor,
           trade and order data received by it in order to identify networked clients who                                Ministry of Finance
                                                                                                                  said in an interview to ET.
           possibly collectively indulge in violations of the securities laws.

           India Post special counters                   Pay and print postal stamp                    Smart card from India Post
           India Post will set up special counters       Department of Post is planning to intro-      Indiapost will launch pre-paid smart
           in areas that do not have access to           duce online version of postage stamps,        card that can be used like a debit card
           basic postal services. As a first step, the   which will enable India Post customers to     to pay bill at the stores, make transac-
           postal department will carry out a study      use print out of the stamp for sending        tions on internet as well as on mobile.
           on the distance people need to travel to      mails. The project is a part of e-com-        These cards will be issued at post
           reach to a post office. The study, which      merce initiatives by India Post.. Under the   offices and can be loaded with amount
           will arrive at a base figure, will assess     e-market place project, DoP will facilitate   ranging from Rs 1,000 to Rs 50,000.
           the reach of the postal department in         selling of small scale and cottage industry   DoP has partnered with HSBC, ICICI
           realistic terms and determine the areas       products through its website. The product     Bank and IDBI for this project. It can be
           that are under-served. The department         catalogue will be published on the inter-     operated at Master Card outlets as well.
           expects to finish the study by the end of     net and will give customers an option to      DoP is awaiting approval from RBI and
           the year.                                     select and make payments online.              hopes to launch it by May 15.

                                                                                                                 1-15 May, 2011   MONEY MANTRA   13
EP-3-17divyanshu.qxd      4/25/2011         6:45 PM       Page 12

           NEWS ANALYSIS

                                                                TAKE THE                            BENEFIT OF

                MM Bureau
                                                                                       Digitization Timeline
                                                           Phase         Areas suggested                       Schedule finalized by
                                                                                                               I&B Ministry
                 n a positive development for the

           I     Indian TV distribution space, the
                 Information and Broadcasting
                 (I&B) Ministry has announced the
           final schedule for mandatory digitiza-
           tion in the country. The final schedule
                                                           Phase I

                                                           Phase II

                                                           Phase III
                                                                         Four metros of Delhi, Mumbai, Kolkata 31st March 2012
                                                                         and Chennai
                                                                         Cities with a population of more than
                                                                         10 lakh
                                                                         All urban areas (Municipal corporation
                                                                         and municipalities)
                                                                                                                  31 March 2013

                                                                                                                  30 September 2014
           sets 31st March 2012 as the sunset date
           for analog cable TV in services in the          Phase IV      Rest of India                            31st December 2014
           four metros and 31st December 2014 as
           sunset date for the entire country.             Regulatory push for the cable dis-              Den Network: 3 months
           Analog cable services will be complete-         tribution sector in India has been
           ly switched off on the respective dates,        long awaited. Shortcomings and
           ensuring compliance by all industry             thereby failure of CAS (conditional
           participants.                                   access system) in 2006 had raised
                The TRAI recommendations have              apprehensions on the govern-
           been pending final ministry approval            ment's ability to turnaround the sec-
           since Aug 2010. The finalization of the         tor. However, drawing learning's
           digitization process with deadlines, by         from the CAS regime, the regulators
           I&B Ministry is a crucial step forward          and the ministry have now chalked        Face Value: 10      CMP: 102
           for the industry. The Cabinet approval          out an actionable plan to counter the
                                                           banes the industry - a sunset clause     52 week High/Low: 256/ 78
           is the final step for these proposals to
           get implemented, which is likely to             for analog cable TV services.            PE: 88.63          EPS (TTM): 1.13
           come by May-June 2011. Once
           approved by the Cabinet, it would               In Aug 2010, the TRAI recommend-                  Dish TV: 3 months
           become a law, which has the potential           ed a four phased schedule to
           of changing the face of the cable dis-          achieve complete migration from
           tribution space in the country.                 analog to digital addressable TV
                                                           systems in the country. This was
           Beneficiaries of digitization                   reviewed by I&B Ministry which
                                                           gave its consent for the move in
                By 2015, India will become the 2nd         January 2011, but with revised
           largest digital market in the world with        deadlines for the four phases. In
           86m digital homes (3x jump from the             response to I&B Ministry's letter, the   Face Value: 1       CMP: 66.95
           current 30m+ homes), aiding addres-             TRAI gave its final recommenda-
           sal of the biggest bane of the industry -                                                52 week High/Low: 77.35/ 34.90
                                                           tions of the proposed digitization
           "under-declaration". This would under-          schedule in February 2011.               PE: -27.13         EPS (TTM): -2.47
           pin a 6.5x leap in the organized indus-                                                       Hathway Cable: 3 months
           try to US$7.7bn (from the current               After these rounds of deliberation
           US$1.2bn). Importantly, the capital             with the regulator as also various
           requirement of the industry would be            industry associations, I&B Ministry
           pegged at US$5bn, which implies 1.2x            has today announced the final
           the capital for 6.5x the returns! With          schedule for mandatory digitization
           monetization as indeed profitability tak-       for cable TV services. The final
           ing centre-stage and limited need for           schedule sets out 31st March 2012
           external capital, there is a strong case for    as the sunset date for analog cable
           being bullish on the sector. DEN                TV services in the four metros and
                                                                                                    Face Value: 10      CMP: 126.85
           Networks, Dish TV and Hathway                   31st December 2014 as the sun-
           Cables being the major players will ben-        set date for the entire country.         52 week High/Low: 237/ 92.65
           efit the most.                                                                           PE: -22.08         EPS (TTM): -5.71

           14   MONEY MANTRA    1-15 May, 2011
EP-3-17divyanshu.qxd      4/25/2011      6:45 PM       Page 13

                                                                                          Valuation Assumptions
           Stocks merit strong
           returns                                     Rs                                  DTH       Secondary Point Primary Point         Broadband
                Given that the Indian TV distribu-     SAC/Basic capex                     1,315     2,000               4,500             2,500
           tion industry is in the investment phase    Consumer premise equipment 2,750              1,500               1,500             1,100
           (high growth but muted profitability),
           there is no merit in adopting a PER or      Less-Receipts                       1,690     750                 750               500
           EV/ EBITDA multiple based valua-            Net acquisition cost                (2,375)   (2,750)             (5,250)           (3,100)
           tion approach. Further, given the back-     Total APRU-year1                    115       304                 215               300
           ended nature of returns and aggressive      5 year ARPU CAGR                    15.0      2.9                 3.3               1.2
           subscriber addition in the initial years,   Revenue/subscriber-year3            2,214     3,961               2,762             3,600
           the DCF approach is not appropriate         EBITDA % -year 3                    16.7      21.4                47.6              41.0
           too. Global peers are not the best com-
                                                       Terminal growth rate (%)            5         5                   5                 5
           parables as these industries are in the
           maturity stage of their life cycles.        WACC (%)                            12        12                  12                12
           Therefore it needs a differentiated         Discounted EV/subscriber            5,997     8,363               7,225             10,928
           approach of EV/ subscriber method-          Non-subsidized ARPU                 184       330                 230               300
           ology to capture the potential to scale     Number of months of ARPU            33        25                  31                36
           up. As global ARPUs and profitability
                                                                                       Comparative valuations
           are not comparable with the Indian
           market, there is merit in benchmark-                                   Dish TV   Hathway Cables                         DEN Networks
           ing the global average of $1,000+ EV/                                           Secondary Primary Broadband Secondary Primary Broadband Star DEN
           subscriber for Indian peers. Thus, to       Number of subscribers (m) 10.9      2.1      1.8      1.4       2.72 1.04 0.7
           capture the long-term subscriber eco-       ARPU (Rs/month)            228      275       230      315       275       230     230
           nomics in India, a cash flow based          Month of ARPU              33       29        32       36        29        32      36
           approach for individual subscribers         EV/subscriber (Rs)         7,421 7,987 7,307 11,474 7,987 7,307 8,378
           (DTH, primary point digitized, second-
                                                       Enterprise value (Rs m)    80,883 16,774 13,152 16,064 21,726 7,599 5,865 4,400
           ary point subscribers and broadband)
           from the time of acquisition looks more     Total EV (Rs m)            80,883                      45,989                               39,589
           appropriate. Using this methodology,        Less: Debt (Rs m)          5,500                       3,000                                (500)
           EV/ subscriber of 25 months of ARPU         Equity value (Rs m)        75,383                      42,989                               40,089
           for secondary point acquisition, 31         Number of shares (m)       1,065                       143                                  131
           months ARPU for primary point acqui-
                                                       Per share value (Rs)       71                          301                                  307
           sition, 33 months ARPU for DTH and
           36 months ARPU for broadband sub-           Less; Minority stake (%)                               25                                   27
           scriber may be taken as fair value.         Target price (Rs           71                          226                                  224

                                                                                                                    (The report is based on IDFC-SSKI
                                                                                                                    research written by Nikhil Vora and
                                                                                                                    Swati Nangalia)

                                                                                                                      1-15 May, 2011    MONEY MANTRA      15
EP-3-17divyanshu.qxd       4/25/2011        6:45 PM        Page 14

           NEWS ANALYSIS
                                                             Distance Selling Diktat
               RDA has issued a comprehensive guideline on distance selling. It has said that vari-       The way to solicit and sell
               able insurance product should not be solicited or sold through distance marketing          Once the client agrees to purchase a poli-
               mode. It has put a cap on ULIP sell through distance marketing. As per its guideline       cy, the proposal form and premium accept-
               to be affected from 1st October 2011, insurers shouldn't solicit ULIPs of non-single       ance shall comply with the following
           premium type for annualized premiums exceeding Rs 50,000/- over telephonic mode                requirements: the premium towards the
           (voice as well as SMS) and single premium ULIPs should not be solicited for a premium          policy may be debited online or interactive
           of more than Rs 1,00,000 over telephonic mode. Details of the guideline are as follows.        voice response medium or through a man-
                                                                                                          ual collection, in all instances where a poli-
           Who can sell from a distance?                                                                  cy is issued without obtaining a proposal in
           For the purpose of solicitation of insurance business through distance marketing, insur-       physical form, insurers shall forward a ver-
           ers/brokers may engage: (i) Employees on their rolls (ii) Specified persons of corporate       bal transcript of the voice/electronic record
           agents (iii) Telemarketers. Insurers or brokers will be responsible for all acts of the per-   of the queries raised and answers thereto
           sons deployed by them.                                                                         on the basis of which the policy has been
                                                                                                          underwritten; the records pertaining to
           Who is a telemarketer?                                                                         every call made and SMS sent by a that
           "Telemarketer" is an entity registered with Telecom Regulatory Authority of India under        materializes into a policy shall be trans-
           Chapter III of The Telecom Commercial Communications Customer Preference                       ferred to the insurer's location within 30
           Regulations, 2010 (as amended from time to time) to conduct the business of sending            days of conclusion of sale. In case of tele-
           commercial communications on behalf of Insurers, Corporate Agents or Brokers.                  phone calls the records transferred shall be
                                                                                                          the recordings of the entire conversation.
           Only trained telecallers allowed
           Every tele-caller must be trained at an institute accredited for pre-license training of       No unfair denial of cover
           agents. The training shall be for duration of not less than 25 hours as per syllabus to be     When a client approaches an insurer or
           prescribed by the IRDA in matters related to regulations, disclosures, ethical conduct of      broker over distance mode proposing for
           business and specific instructions to be complied with while making the calls.                 insurance cover, the latter are duty-bound
                                                                                                          to consider the case on merits and in accor-
           What should a telecaller tell?                                                                 dance with regulatory directions and their
           There should be a standardized script for the telecallers. It should include name of the       own norms.
           product suggested and its nature and parameters; insurance cover available under the
           product for a specified amount of annual premium, the scope of cover, perils covered and
           not covered, exclusions, deductibles or franchise, co-payments, loading/discounts on
                                                                                                          With effect from
                                                                                                          The above guidelines shall be applicable
           premiums, add-on covers etc; the right to cancel the policy within 30 days of receipt of
                                                                                                          from 1st October, 2011.
           the policy in case of disagreement with the terms of the policy and disclosure of rates of
           commission available on the product if requested by the client.

                                                 Cap on ULIP, No to ULP
                                                 Insurers shall not solicit ULIPs of non-single premium
                                                  type for annualized premiums exceeding Rs 50,000
                                                   over telephonic mode (voice as well as SMS). Single
                                                   premium ULIPs shall not be solicited for a premium
                                                    of more than Rs 1,00,000/- over telephonic mode.
                                                    No variable insurance product shall be solicited or
                                                    sold over distance marketing mode.

           16   MONEY MANTRA    1-15 May, 2011
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         GOLD & SILVER

           Gold to move higher as
           concerns still persist
                Anjani Sinha                                                                         829.90/ 100 gm.

                                                        A cocktail of factors                            The precious metals market expe-
                    GOLD & SILVER                                                                    rienced huge volatility in the fortnight.
                      Market Review
                                                        boosted the metal in the                     Aseries of factors sent prices to record
              (6th Apr 2011 to 20th Apr 2011)           fortnight and these                          highs. Earlier in the fortnight, the IMF
                Gold surged and hit a fresh record      events are expected to                       revised down its growth forecasts for
           high in the fortnight as driven by a                                                      the US, Japan and the UK while leav-
           series of factors such as weak USD,          persist and will support                     ing global GDP forecasts unchanged.
           renewed sovereign concerns in the            gold's uptrend. However,                     Sovereign debt concerns in the
           European periphery, inflation pres-                                                       European periphery intensified as
           sures and rises in crude oil prices. The     silver has been                              German Finance Minister Wolfgang
           benchmark contract for Comex gold            increasingly appealing in                    Schaeuble said that Greece may have
           struck an all-time high of $1506.50          recent years as many                         to restructure its debts and Moody's
           an ounce in the fortnight before set-                                                     downgraded Ireland's credit rating by
           tling back to $1498.90. Silver fol-          investors view it as poor                    2 notches with negative outlook.
           lowed with the benchmark contract            people's gold.                                   Inflation in emerging countries
           rising above $ 45.00 for the first time                                                   remains elevated. Headline CPI in
           since 1980. At COMEX Gold June                                                            both China and India exceeded expec-
           contract gained by USD 46.40/Toz            Gold gained by Rs. 63.60/ gm while            tations, jumping to +5.4% and
           while COMEX Silver May contract             NSEL Demat E-Silver gained by Rs.             +8.98%, respectively, in March.
           gained by 527.80 cents/Toz. In the
           same period MCX Gold June con-                                                   E-Gold NSEL
           tract gained by Rs. 611.00/10 gram
           and MCX Silver May contract gained
           by Rs.8117.00/Kg. At NSEL,
           Ahmadabad spot Gold gained Rs.
           1138.00/10 gram and Silver gained by
           Rs. 8913.00 /Kg. NSEL Demat E-

                                                                                   SPOT MARKET PRICES
                                                        Commodity Market                        Price Open Close Prev.    Net
                                                                                               Quote             Close Change
                                                        Gold           NSEL Amd          Rs. /10 gm. 20855 21824 20686                   1138
                                                        Silver         NSEL Amd               Rs./kg. 57527 64595 55682                  8913
                                                                                 FUTURES MARKET PRICES
                                                        Market Commodity-        Unit       Open     High     Low      Close    Prev.      Chg
                                                               Contract                                                         Close
                                                        MCX      Gold-Jun-11     Rs/10 gm. 21234 21893 21123 21773 21162                     611
                                                        COMEX    Gold-Jun-11     $ / Troz       1458.20 1506.50 1445.00 1498.90 1452.50 46.40
                                                        MCX      Silver-May-11   Rs/kg.          58140 66664 57513 65644 57527 8117
                                                        4416     COMEX           Silver- May-11Cents/Troz 3931.50 4540.00 3912.00 3918.30 527.80

           18    MONEY MANTRA   1-15 May, 2011
EP-18-35-- alok.qxd     4/25/2011       6:43 PM        Page 3

                                                                                         GOLD & SILVER
           Inflationary pressures also heightened                    E-Silver NSEL
           in advanced economies. Heightening
           price pressures benefit precious met-
           als as investors demanded for hard
           assets as an inflation hedge.
                Asurvey done by Central Banking
           Publications indicated that federal
           reserve managers no longer view that
           sovereign debts are risk-free. More
           than 80% of respondents said sover-
           eign risk fears had impacted their
           strategy. Another issue affecting
           investment strategies was Fed's
           expansion of QE2 in November last
           year. These 2 factors are probably the
           major reasons transforming central
           banks to net gold buyers, after being
           net sellers for 20 years.
                Recent outperformance of silver
           over gold has sent the gold/silver ratio
           nearly 34, the lowest level since 1983.              Gold Comex Continuous
           Robust investment demand that has
           drove silver prices higher due to
           geopolitical tensions, sovereign cri-
           sis in the European periphery and debt
           concerns in the US, uncertainties of
           natural disasters remain a threat to
           global economic growth and financial
           markets. Gold is a traditional alter-
           native to fiat currencies and risky
           assets in such an environment.
           However, silver has been increasing-
           ly appealing in recent years as many
           investors view it as 'poor people's
           Outlook: A cocktail of factors boost-
           ing the metal in the fortnight and these
           events are expected to persist and will
           support gold's uptrend. A survey                     Silver Comex Continuous
           shows that central banks turned net
           buyers of gold in 2010 and cut expo-
           sure to debts issued by Greece, Ireland
           and Portugal. It's also unveiled that
           federal reserve managers found gold
           and investment-grade corporate bonds
           are more attractive than the year
           before. We believe the trend will con-
           tinue as concerns over fiscal stabilities
           and inflation will trigger central bank
           purchases of the metal. Silver took
           gold's cue and rose. However, the
           white metal continued to outperform
           the yellow one, taking the gold/sil-
           ver ratio below 35. Investment
           demand remains robust with retail
           purchase particularly strong. While
           we expect silver price to climb high-
           er with its characteristic as the poor's
           gold, weakness in fundamentals may
           cause a sharp correction in prices any-
                                                                                     1-15 May, 2011   MONEY MANTRA   19
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                EDIBLE OIL

           Bearish trend to continue on
           selling pressure
                      Market Review                                                   Refined Soy oil MCX
              (6th Apr 2011 to 20th Apr 2011)
                The refined soya oil broke its two-
           weeks' of the rising trend in the fort-
           night as prices traded on a weaker
           note. The profit selling on the recent
           rise led the prices to witness a cor-
           rection since the beginning of the fort-
           night. The traders turned onto selling
           side anticipating shrink in the demand
           for the produce. MCX near month
           contract closed at 623.90/10 kg with
           loss of Rs.5.80/10Kg.
                The global oilseed production for
           2010/11 is projected at 447 million
           tons, up 2.8 million tons from the last
           month. The global soyabean produc-
           tion has increased 2.6 million tons to
           261 million, according to USDA.
           USDA announced that the export sales
           for the past week totalled a meager           Market   Contract Open         High        Low       close     Prev.      Net
           76,100 tonnes or 2.8 million bushels for                                                                     close      change
           the old crop and 114,200 tonnes or 4.2        MCX      May’ 11    634.95     638.95      609.00    623.90    629.70     -5.80
           million bushels for the new crop. The
           Brazilian government agency CONAB            435,735 tons compared to 632,868 tons        The absence of the fresh meal export
           increased its forecast for the Brazilian     in the March 2010 i.e. down by 31.1%,        demand amid thin supplies is likely
           crop to 72.2 million tonnes. Harvesting      consisting of 412,088 tons of edible         to exert pressure on the market. The
           of soyabean is progressing well in           oils and 23,647 tons of non-edible oils.     Indian traders are likely to be on the
           Brazil and Argentina. The Brazilian          The overall import of the vegetable oils     sell side anticipating decline in the-
           farmers have harvested 87% of their          during Nov.'10 to Mar.'11 is reported        export demand. The lower crush mar-
           soya crop as on 15th April 2011 and          at 3,128,418 tons compared to                gin and absence of fresh export
           Argentina farmers have harvested 43%         3,747,421 tons i.e. down by 16.5%.           enquiries is prompting local crushers
           of their crop as on 14th April 2011.         Last year during Nov.'09 to Mar.'10,         to stay away from active buying.
                Chinese grain traders announced         import had increased due to the lower        Indian market is likely to move in line
           that the forecast for soyabean imports       crushing during the season however,          with weak international market.
           over the next several months were low-       this year situation is different and         Diminishing demand for soy and its
           ered. For the marketing year ending          therefore showing high negative              derivatives is likely to exert pressure
           on September 30, China now forecasts         growth while the export of the               on the market. Global oilseed stocks
           its imports at 53 million to 54 million      oilmeals during March 2011 is report-        are raised 2.5 million tons, with the
           tonnes. The implication was that China       ed at 579,907 tons compared to               largest gains for soybeans in Brazil and
           will import 27.4 mmt to 28.4 mmt for         224,407 tons in previous month               Argentina. All in all, it looks like that
           the last half of the crop in the year. In    (March 2010), up by 158%. The over-          the major commodities in global edi-
           comparison to those same six months          all export of the oilmeals for the peri-     ble oils and oilseeds space, active har-
           last year saw China importing 29.1           od April 2010 to March 2011 is report-       vesting in Brazil and Argentina might
           mmt. China's soyabean imports in             ed at 5,071,779 tons valued at approx.       lead to higher import of oil into India
           March came down to 12% on year to            Rs. 8220 crores compared to                  in April. With the improvement in
           3.51 million metric tonnes, while the        3,224,787 tons valued at Rs. 5176            harvesting of crop in Latin America,
           imports rose 51% from February. The          crores in 2009-10 i.e. up by 57% in          the FOB price of oil have been declin-
           data revealed that the total imports         term of quantity and 59% in term of          ing thus making landed price of soy oil
           from January to March were down by           value during the same period of last         cheaper. Decline in landed price of soy
           0.7% to 10.96 million tonnes.                year.                                        oil is putting pressure on the domes-
                According to Solvent Extractors'        Outlook: The refined soya oil prices         tic market. Full-fledged arrival of
           Association the import of the vegetable      are projected to extend its bearish trend    Rabi oilseeds also exerted pressure on
           oils during March 2011 is reported at        ahead on the extended selling pressure.      the market.
           20   MONEY MANTRA   1-15 May, 2011
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                                                                                                                    C OTTON
           Prices to move southwards on
           higher output and increased arrivals
                       Market Review                                                      Cotton futures (ICE)
              (6th Apr 2011 to 20th Apr 2011)
           The International cotton prices tumbled
           during this fortnight as Southern
           Hemisphere crops became available,
           the large crops are coming out of
           Australia, Argentina and Brazil. The
           weather worries in some US cotton
           growing areas have been offering some
           buffer to the downside. The Forecast of
           normal rains for the 2011 monsoon in
           India, strengthens the prospects of a
           plentiful farm output that could help
           bring relief to Asia's third-largest econ-
           omy in its battle with the high prices.
           July futures have been pressured by
           weak Chinese markets and an increased
           offering on the electronic cash cotton
           market in USA. The benchmark May
           cotton contract on ICE Futures U.S.
           lower 16.40 cents, or 8.19 to close at
           $1.8377 per pound in New York.                   Market          Contract Open         High      Low      close          Prev. Net
               The cotton look A Index has also                                                                                     close change
           been loosely range-bound, generally              ICE (Cents/b) May 11       190.30     193.75    183.02 183.77           200.17 -16.4
           trading between 212 and 235 cents/lb.
           Although the prices have not been               becomes available. The strategy that’s        by the Cotton Advisory Board, only
           clearly following a direction up or             worthwile in the short run may pro-           28.759 million bales arrived into the
           down, the width of the trading ranges           vide the support for the prices in the fall   market. Even stockiest has started
           reflect persistent volatility for the prices    if many mills adopt such strategies and       offloading cotton in the market expect-
           representing 2010-11 supplies. While            then decide to return to the market to        ing further fall. The government had
           2010-11 prices moved sideways over              make purchases in the volume once             capped the export limit of cotton at 5.5
           the last month, there was some direc-           the new crop becomes available.               million bales, which was completed
           tional movement in the prices represen-         Another potential support for the prices      by February. The arrivals in all the cot-
           tative of 2011-12 supply. Preliminary           in the next year is the Chinese govern-       ton growing states have picked up. As
           forecasts suggest the record prices in          ment.                                         on April 19th 2011, the cumulative
           2010-11 will motivate an all-time                    In China, the spot cotton price          arrivals are 287.59 lakh bales as against
           record harvest in 2011-12. With expec-          dropped slower compared to the last           273.15 lakh bales in previous year.
           tations for a record harvest, the first         week, but the sales remained depressed.       Outlook: China, the largest cotton mar-
           addition to ending stocks in four crop          The price has nearly approached the           ket, reports mills complaining about
           years is anticipated in 2011-12. This           break-even point, some cotton enter-          eroding margin and tighter financial
           loosening of the supply situation is            prises stopped adjusting down the             resources. Demand for imported cotton
           expected to bring prices lower in the           offers. The Textile mills' purchasing         is non-existent as prices are more than
           next year.                                      interest still focused on high-grade cot-     10% above domestic levels in the
               The Yarn prices have been respon-           ton, with their buying ideas for type 329     China. The deterioration in quality in
           sive to increase in the fiber prices. With      (public inspection). In India, Cotton         present arrivals and limited demand of
           the fiber prices expected to drop               prices fell with the low demand. The          mill buyers has put pressure on the cot-
           sharply next fall, there is likely concern      price of benchmark Shankar-6 variety          ton prices. Further, the off take of yarn
           that among the spinning mills that yarn         lower by Rs 5500 a candy to Rs 55,000-        has slowed down. The cotton transac-
           prices will also drop. To avoid risk asso-      56,000 a candy at the spot market in the      tions are very limited. The global cot-
           ciated with potential decreases in yarn         last fortnight. Owing to season is com-       ton price outlook indicates bearishness
           prices, certain mills may decide to min-        ing to an end and most of the crop has        on the news of higher China cotton out-
           imize purchases of the cotton at the cur-       arrived in the market. Tival of the low       put estimate, increase in cotton arrivals
           rent levels well over 195 cents/lb, main-       quality cotton at the end of the season       in India and a stronger US dollar.
           tain lean inventories, perhaps idling           led to the decline in prices. Out of the                   (Writer is MD, National Spot
           some capacity, until cheaper cotton             total of 31.2 million bales estimated                           Exchange of India Ltd.)
                                                                                                                   1-15 May, 2011   MONEY MANTRA   21
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           D STREET

           Markets to remain range
           bound within 5600-5930
                Ashish Kapur                                                                        my, we believe that it is better to be
                                                                                                    a contrarian and use any decline to
               After the stupendous rise in the                                                     buy into this nascent bull market.
           last fortnight of March, the markets                                                          Banking, IT, automobile and
           are experiencing a lot of turbulence                                                     infrastructure are the best sectors to
           at the higher levels. Though the                                                         bet on. A stock specific approach will
           momentum still remains strong, yet                                                       work best. For long term investors,
           the chances of a breakout rally from                                                     certain stocks in the power, pharma
           these levels looks difficult, given the                                                  and metal sectors also provide inter-
           background of a soaring inflation, ris-                                                  esting opportunities. The last quar-
           ing interest rates and global turmoil.                                                   ter results have so far been a mixed
           However the markets do have a pen-           porate sector remains intact.               bag. However we expect the corpo-
           chant for surprising and going against       Relatively slower growth in most            rate numbers to be on the whole bet-
           the consensus opinion. Since major-          parts of the world adds to the attrac-      ter than expected. Nevertheless, the
           ity of the participants feel that Nifty      tion of our markets. These short term       earnings season would determine
           range of 6000-6200 would be like a           concerns have made many weaker              how soon we break this trading range
           glass ceiling, we will give the markets      players pull out of the markets. Also,      and start our upward journey onto
           a fair chance of going past and cre-         many bears have created the short           peaks which have never been scaled
           ating a new all time high in the next        positions on the indices and some           before.
           couple of months.                            frontline stocks. Due to various stim-
               It is often said that the Bull           uli doled out by different govern-          Technicals
           Markets always cross walls of the            ments, liquidity with the internation-          The market has been consolidat-
           worries. The war in Libya and other          al investors is very robust. The bull       ing at a very crucial level after the
           places in the Middle East, rocket            markets usually start against a very        recent upward move. 5900-5930 level
           crude prices, slowdown in Japanese           gloomy outlook. Given the general           is very crucial as the market has been
           economy due to the havoc caused by           pessimism, especially regarding the         forming lower highs with previous
           the Tsunami, tightening of the mon-          inflation and rising interest rates, pre-   two peaks. So it has become a very
           etary policies in China and various          vails all around us and the rather          powerful resistance, breaking of
           other emerging markets including             strong fundamentals of our econo-           which may give a potential up move
           India and the spectator of the inflation
           which refuses to ebb are the qualms                                           NIFTY INDEX
           facing the markets at the current stage.
           The suspicion, regarding the sustain-
           ability of the current rally, stems from
           the various problems which appear
           to be insurmountable. However a
           broader vision of the whole picture
           will reveal that the things are certain-
           ly not as bleak as a casual, first glance
           will make it out to be. Firstly the
           Corporate India is still growing at a
           fabulous pace. Indian business hous-
           es and entrepreneurs seem to have
           mastered the art of progressing
           despite various problems surrounding
           them. Our economy will grow at
           around 8% at least for the next cou-
           ple of years. Markets have a habit of
           looking ahead. So even if the mone-
           tary tightening does cause some con-
           traction in the earnings growth rates,
           it will be a temporary phenomenon.
           The long term growth trajectory of
           both our economy as well as the cor-
           22   MONEY MANTRA   1-15 May, 2011
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                                                                                                                   D STREET
                          PUT CALL CONCENTRATION (April)                                         maximum Open Interest at the 6000
                                                                                                 strike (~88 Lakh shares) on the Call
                                                                                                 side and 5700 strike (~87 Lakh shares)
                                                                                                 on the Put side. Huge build up is also
                                                                                                 seen at 5900 strike call (~67 lakh
                                                                                                 shares), 5800 put (~70 lakh shares)
                                                                                                 and 5600 put (~68 lakh shares). The
                                                                                                 strong build-up in Out-of-the-money
                                                                                                 puts indicates the investors to have a
                                                                                                 cautious outlook.
                                                                                                     May expiry is also showing build-
                                                                                                 up at 6000 strike (~17 lakh shares)
                                                                                                 on the Call side and 5600 strike (~ 25
                                                                                                 lakh shares) on the Put side.
                                                                                                     Sentiment indicators like open
                                                                                                 interest, VIX, put-call ratio and implied
                                                                                                 volatility indicate that volatility will
                                                                                                 carry on in near term. Option activity
                                                                                                 in Nifty indicates range of 5600 -6000
                                                                                                 for next few trading sessions.

                                                                                                              (Writer is CEO, Investshoppe
                                                                                                                                India Ltd.)
           to the market.
               The volatility index (VIX index)
                                                                   OPTION STRATEGIES FOR MAY EXPIRY
           after touching a low of 18.84 has            Buy 1 Lot 5900 call @ Rs.138, Sell 2 lots 6100 call @ Rs.55, Sell 4 lots
           moved up by 25 per cent to 23. The           5400 put @ Rs.26 and Buy 1 lot 5600 put @ Rs.56
           market has been also forming lower               For the investors who believe the Nifty will remain in uptrend but con-
           highs and lower lows despite the huge        fines itself in the range may initiate this strategy. This strategy will give an
           white candle in the second week.             inflow of ~Rs.970. At 5400 and 6100 levels, the maximum gain is ~5.5%.
               Technically, indicators are not          Below 5350 and above 6250 the strategy will incur losses. The investors
           very supportive to the market at the         are advised to book profits if Nifty reaches 5950-6000 or 5600-5550.
           moment as the momentum indicator
           MACD has just crossed the signal line
           indicating a mild negative momen-
           tum. Relative Strength Index, a
           momentum oscillator that measures
           the speed and change of the price
           movements, after touching the over-
           bought area moved downwards. On
           Balance volume indicator, which
           tracks the movement of the price along
           with the volume, has been falling
           since the recent peak.
               At present, Nifty has a strong           Sell 1 Lot 6200 call @ Rs.36.5, Sell 1 Lot 5500 put @ Rs.32
           resistance at 5930 and a support at              The investors who want to benefit from the volatility can adopt the above
           5600. The market is likely to be range       strategy. The investors who are confident that Nifty will remain in the
           bound within these levels for few            range of 5500-6200 will gain the most. There will be an inflow of Rs.3200
           more days.                                   per unit. The investors will gain the most if May expiry is in the range of
           Put Call Concentration
               Last few trading session have been
           quite jerky ranging from 5700-
           5850.Inflation numbers, disappoint-
           ing Infosys results, negative outlook
           on US credit rating and rate-tighten-
           ing measures by the Chinese central
           bank continued to mull over on
           investors’ minds.
               VIX has been ranging from 19-
           21 and PCR is at 1.25. April expiry has
                                                                                                           1-15 May, 2011   MONEY MANTRA   23
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           BROKER’S PICKS
           Eros International                              BUY CMP: Rs.143.75                   TARGET: Rs.185

           Go with a de-risked business model
                Ashish Kapur
                                                                   Eros International: 3 months performance

           Eros International Media, a part of
           Eros group, is the largest film pro-
           ducer and the distributor in India in
           terms of movie slate and revenue. The
           Group is a global player within the
           Indian media and entertainment sec-
           tor and has been in the business for
           around 30years. The company has
           an extensive film library and is in the
           business of sourcing Indian and other
           film content and exploiting it world-
           wide through its offices in India, UK,
           USA, UAE, Singapore, Australia, the
           Isle of Man and Fiji across the formats
           such as theatres, home entertainment,
           television and digital new media.
               The company that started in 1977
           to exploit Indian content internation-
           ally earns its revenues from the Indian       dication deals for almost 60-70 percent    duce Rajnikanth's next movie Rana.
           box office, the satellite and television      of these releases. Around 20-25% of        After the phenomenal success of
           rights, international rights and also the     revenue comes from the syndication         Rajnikanth's Robot, Rana is surely
           ancillary rights. It is hedged against        deals for content. It has earmarked a      something to look out for.
           any kind of downside risk on the inter-       capex of 9 billion rupees to 11 billion
           national distribution front.                  rupees for the next two fiscal years,      Investment Rationale
                                                         to be funded through internal accru-           A library of film content mone-
           Financials                                    als and the proceeds from its splashing    tized through multiple media, a de-
               From fundamentals perspective             initial public offering last year.         risked business model in its lucrative
           the company has grown at 59% CAGR                                                        overseas distribution business and a
           over the last five year and is expect-        The journey ahead                          pipeline of big-star-cast movies in the
           ing a robust performance for FY11 too.           It has signed the content-sharing       pipeline, which Eros is co-producing,
           Eros has lined up more than 50 releas-        deals with the video-sharing site          are the key positives.
           es for FY12 across Hindi and other            YouTube to monetize content of non-
           regional languages. It has signed syn-        conventional platforms and expects         Outlook & Valuation
                                                         new media would be a major thrust              Generally, the film production or
           Key Indicators (As on April 21, 2011)         going forward.                             the distribution business has a highly
           Face Value (Rs.)       10                       The company is also planning to          unpredictable nature. But, Eros offers
           Closing Price (Rs.)          143.75           bring about 8-10 major film projects       a high visibility in terms of the cash
           52 week H/L(Rs.)             217.70/124.30
                                                         under production in FY12.                  flows vis-à-vis peers and seems
                                                           It is looking to acquire existing film   strongly placed if one has to play on
           Market Cap (Rs. Crore)       1313.98
                                                         libraries and also the regional distrib-   this theme. Moreover, Eros has a risk
           EPS (TTM) (Rs.)              8.80             utors. It already has its presence in      mitigation strategy with the minimal
           BV per Share (Rs.)           20.07            the Tamil, Marathi and Punjabi lan-        dependence on a film's box office per-
           P/B                          7.16             guage markets and has plans of             formance. Eros Media International
           P/E                          16.34            increasing its presence there and for-     Limited, with its strong distribution
                                                         aying into languages such as Bengali       network and impressive content
            Shareholding Pattern (in %)                  and Telugu.                                library, is a good bet in the Indian
            (As on Dec 31, 2010)                           Eros has a series of big banner films    Media space.
            Promoters                   78.12            lined up this fiscal like Agent Vinod,         The company is currently trading
            FIIs                         8.23            Always Kabhi Kabhi, Challo Dilli,          at Rs.145 (16xFY11E earnings). We
            DIIs                         2.01            Ra.One etc.                                recommend a BUY on the stock with
            Others                      11.64              Eros Media along with Ocher              a target of Rs.185 (13xFY12E
            Total                       100.0            Studios is looking forward to co pro-      earnings).
           24    MONEY MANTRA   1-15 May, 2011
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                                                                                                    BROKER’S PICKS
           Sintex Industries                     BUY CMP: Rs.178 TARGET: Rs.195-200

            Focusing heavily on plastic business
              Rajesh Jain                                                 Sintex: 3 months performance
                 The world markets are facing
           resistance at the higher levels due to
           uncertainty on the inflation and inter-
           est rates along with Middle East cri-
           sis. The phase of volatility is likely
           to increase. In such a scenario, it
           makes sense to buy stocks at correc-
           tion at your own price. One may buy
           the following two stocks in small
           quantities at any dips- Sintex
           Industries and Polaris Software.
                 Sintex Industries mainly operates
           in three business verticals- building
           products, custom moulding and tex-
           tiles. The building products business
           represents monolithic and pre-fabri-
           cated structures and is proving to be
           a great revenue growth driver for the
                 In the building products segment,          Its overseas subsidiaries and tex-       The stock faces strong resistance
           it is carrying an order book of Rs 2,600     tiles business had suffered during       around 160-165 levels where one can
           crore. The company is focusing heav-         FY10, but it is back on track and the    accumulate keeping a closing stoploss
           ily on its plastic business for further      company has shown strong numbers         of 150 for higher targets of 195-200 in
           growth.                                      during quarter ended December 2010.      the coming weeks.

           Polaris Software                             BUY      CMP: Rs.201                TARGET: Rs.230+

           Betting on a zero debt company
                                                                         Polaris: 3 months performance
                Polaris Software offers state-off-
           art, comprehensive solutions for core
           banking, corporate banking, wealth
           management and insurance solutions.
           The major growth driver of the com-
           pany is the banking and financial serv-
           ices segment driven by business needs
           related to regulatory compliance.
           Also, the US and Europe, which
           accounts for more than three-fourth of
           Polaris’s revenues, have grown in
           recent times, suggesting a broad based
           revival in spends of clients for the
                With zero debt and $103million in
           cash, the company appears well
           placed to invest in its expansion and
           achieve significant scalability. Awell-      deal pipeline are key positives.         ploss of 180 for higher targets of 230
           blended offering of high margin prod-            The stock has got a lot of support   plus in the coming weeks.
           ucts and traditional IT services, a          between 190-195 levels where one
                                                                                                     (Writer is Head of Research (Retail) at
           strong offshore presence and a robust        can accumulate keeping a closing sto-                        Religare Securities Ltd.)
                                                                                                           1-15 May, 2011 MONEY MANTRA 25
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           BROKER’S PICKS
           Crompton Greaves                                  BUY CMP: Rs.281.25 TARGET: Rs.350

           Margins likely to remain stable
                Jagannadham Thunuguntla                                          Crompton: 3 months performance
               Crompton Greaves (CG) is extensively engaged in
           designing, manufacturing and marketing high technolo-
           gy electrical products and services related to power gen-
           eration, transmission, distribution as well as executing
           turnkey projects. The business operations consist of 22
           manufacturing divisions spread across in Gujarat,
           Maharashtra, Goa, Madhya Pradesh and Karnataka.
               It plans to set up a research centre for ultra-high volt-
           age (1,200 kV) technology at Nashik as part of its global
           research and development initiative. The research facili-
           ty will be a centre of excellence for high-voltage tech-
           nologies for developing ultra-high voltage products with        in the 4th quarter is expected. However management
           enhanced reliability. The company is making an initial          expects double digit growth in power system in FY12 on
           investment of about Rs. 40 crore and will further aug-          the back of high demand and increasing order inflow.
           ment the infrastructure in next three years by 20 crore.        Both Industrial and consumer segments are doing well and
               It has tied up with ZIV Aplicaciones y Tecnologia           is expected to continue the same momentum.
           (ZIV) of Spain to set up a Joint Venture (JV) company in            In FY12 management expect the total revenue of the
           India with an investment of Rs. 10 crore. The JV will           company would grow in the range of 16%-18%. On the
           manufacture automation systems for substations in the           margin front, the company has maintained steady perform-
           Extra High Voltage and ultrahigh voltage range. The JV          ance during the first nine months of the fiscal year 2010-
           will produce protective relays, differential relays, bay con-   11. Throughout the period it has maintained EBDITA
           trol units, bus bar systems and substation units.               margin of 14.66% despite a spike in commodity prices.
                During 9MFY11, the power business of the compa-            Management expects margins to remain stable on the
           ny showed muted performance and no significant jump             back better product innovation.

           United Bank of India                            BUY       CMP: Rs.110 TARGET: Rs.140

           Loan book to grow substantially
                United Bank of India (UBI), one of the major com-                    UBI: 3 months performance
           mercial banking institutions, has its presence predominant-
           ly in the north and north-east India. As of December 2010,
           the bank has 1568 branches. It is planning to offer mer-
           chant banking and syndication services by 2011-2012. The
           bank has opened three specialised corporate finance
           branches in Delhi, Kolkata and Mumbai. The corporate
           branches cater to nearly 145 clients with a loan portfolio
           of Rs. 30,000 crore. UBI is planning to open 26 retail
           processing centres by Jun 2011. The bank has received
           fresh capital infusion of Rs. 308 crore from the Government
           of India.
                The management expects loan book to grow by 20%
           in FY11. NIM stands increased at 3.20% in quarter under
           review against 2.14% a year ago. Management expects             year. The deposits were up by 11.2% to Rs. 73106 crore
           NIM to maintain above 3% for FY11. During the F. 2011-          in the quarter ended December 2010 as against Rs. 65,748
           12, the bank is expected to extend its services to 2941         crore in the corresponding previous year. While CASA
           villages. Moreover, it has has initiated a Pilot project on     deposits grew by 29% to Rs. 29423 crore in quarter under
           FI at Purulia districts wherein 64 villages have been taken     review against Rs. 22744 crore a year ago. The Advances
           up and about 10,000 households have been enrolled.              grew by 19% from Rs. 42561 crore in the quarter ended
                The total Business of the bank grew by 14% to Rs.          December 2009 to Rs. 50679 crore in the quarter under
           123785 crore in the quarter ended December 2010 as              review.
           against Rs. 108309 crore in the corresponding previous                     (Writer is Strategist & Head of Research, SMC Global)
           26   MONEY MANTRA   1-15 May, 2011
EP-18-35-- alok.qxd     4/25/2011       6:43 PM      Page 11

                                                                                                         BROKER’S PICKS
           Indraprastha Gas                                 BUY CMP: Rs.321.35 TARGET: Rs.360

            Demand for CNG to remain strong
               Amar Ambani                                                      Indraprastha Gas: 3 months performance
               Over the past one decade, IGL has reported a CNG vol-
           ume CAGR of 46% led by 1) mandatory conversion of all
           public transport vehicles to CNG, 2) growing conversion of
           private vehicles, 3) increased number of stations and high-
           er compressing capacity at stations and 4) improving avail-
           ability of fuel across the NCR region. While demand from
           mandatory conversions might not witness substantial growth,
           momentum in private vehicle conversions would continue on
           the back of increasing cost advantage of CNG as a fuel.
               IGL currently supplies PNG to about 0.17mn households
           compared to total of 4.3mn households using LPG. We believe
           with rising awareness about advantages of PNG over LPG             considering fast development of small and medium
           the acceptance of the fuel will increase at a robust pace.         industrial units. In Noida and Greater Noida combine, IGL
           Industrial segment, which has accounted for significant por-       has 11 CNG stations and more than 3,500 PNG customers.
           tion of IGL's PNG sales will also witness strong growth as         In Ghaziabad the operations are at a nascent stage with
           cost effectiveness of PNG can improve profitability for            only three CNG stations and a very small number of PNG
           these players. Compared to Gujarat, where PNG has a wide           customers. All three regions have a strong potential and we
           acceptance for cogeneration, Delhi has been under pene-            reckon over the next two to three years these markets can
           trated. This would keep PNG volume growth strong for               contribute about 15-20% of IGL's total volumes. We
           IGL. We expect a 43% CAGR in IGL's PNG volumes dur-                believe IGL has strong earnings visibility considering rapid
           ing FY10-13E.                                                      conversions of private vehicles to CNG and increasing
                      IGL is now extending its reach beyond Delhi to          usage of gas in industries. Superior pricing power will
           tap markets of Noida, Greater Noida and Ghaziabad. PNG             enable them to cushion margins and maintain strong return
           would be the key growth segment in these areas                     ratios.

           GSK Consumer                                       BUY      CMP: Rs.2313.85 TARGET: Rs.2569

           New launches to fuel growth
               GlaxoSmithKline Consumer dominates the ~Rs.20bn                  GSK Consumer: 3 months performance
           Indian malted (health food) beverage (MFB) market with a
           strong 70%+ market share, led by its flagship brand Horlicks.
           GSK faces no major competitive threat with large players such
           as Nestle and HUL. The MFB segment has a very sticky con-
           sumer loyalty and with GSK’s innovative new launches and
           increased media spend, the entry barriers have become high-
               The MFB segment continues to witness double digit vol-
           ume growth and with penetration levels of 25-30%, the scope
           for growth remains high. GSK plans to leverage the strong
           brand equity of its ~Rs.12bn flagship brand, Horlicks, by enter-
           ing into all the possible nutritional categories. The new vari-
           ants of Horlicks launched over the past three years are con-
           tributing over 20% to Horlicks’ sales. The management also         up), we expect GSK to witness 90bps expansion in CY11.
           targets to increase the contribution of the non-MFB products           We expect GSK to continue its growth momentum led
           to overall revenues from current 5% to 15% over the next three     by strong volume growth in its key brands, coupled with robust
           years, driven by biscuits and noodles. With its strong pricing     growth in new product launches. Management’s confidence
           power, GSK has passed on the entire burden to consumers            of sustaining volume growth and margins reaffirms our view.
           through a 5% price hike effected in January. GSK may take          We expect GSK to register 21.8% CAGR in net profit over
           further ~5-6% price hike if the input prices continue to remain    CY10-12.
           high. With implementation of successful price hikes and like-
           ly decline in adspend to sales ratio (as new launches ramp                           (Writer is Head of Research with India Infoline)
                                                                                                              1-15 May, 2011   MONEY MANTRA   27
EP-18-35-- alok.qxd     4/25/2011        6:43 PM   Page 12

            BROKER’S PICKS
           Siyaram Silk Mills                                BUY CMP: Rs.389 TARGET: Rs.414

           Capacity expansion to drive growth
                Vaibhav Agrawal                                                   Siyaram: 3 months performance
           Siyaram Silk Mills (SSM) is one of the leading textile man-
           ufacturers in India. The company enjoys a strong brand
           presence across the country, with brands such as Siyaram,
           Mistair, J Hamstead and Oxemberg in its kitty. SSM has
           built a strong brand presence in the country through con-
           tinuous advertisement and brand-building efforts over
           the past 30 years. The company has created a niche for itself
           in a highly competitive industry. SSM enjoys a dominant
           position for its fabric segment under the Siyaram brand,
           which constitutes nearly 83% of its revenue. SSM has
           one the largest distribution networks in Tier-II&III cities
           across the country. The company has a strong network of         CAGR in revenue over FY2011-13.
           over 1,500 dealers and 500 agents supplying to more than            SSM generates 75% of its revenue through Tier-II&III
           40,000 outlets across India. This enables the company to        cities. Thus, the company is expected to benefit greatly
           easily launch new products with a high success ratio and        from the growing middle-class population in the country,
           low marketing cost, giving it an edge over competitors.         especially in small towns, and the shift in preference
               SSM’s yarn segment is expected to achieve 60% capac-        towards branded products. Moreover, the timely capaci-
           ity utilisation in FY2011, compared to 41.9% in FY2009,         ty expansion will help SSM to take full advantage of the
           which is further expected to improve to 80% in FY2012E.         growing demand in India. The stock is currently trading
           In the fabric segment, the company plans to add 286 looms       at 5.2x FY2013E earnings (as against its historical medi-
           (479 current looms) in a phased manner over FY2011–13.          an of 6x one-year forward EPS). We Initiate Coverage
           SSM will also be adding 400 machines in its readymade           on SSM with an Accumulate recommendation and a tar-
           garment (RMG) segment by September 2011.                        get price of Rs.414, valuing the stock at 6x FY2013E
           Consequently, the company is expected to report a 17.5%         earnings.

           Alembic                                         BUY       CMP: Rs.21.60 TARGET: Rs.33

           To continue its loss in API business
                Alembic has announced the reorganisation plan for                Alembic : 3 months performance
           its business by demerging its pharma business into a sep-
           arate company, Alembic Pharma. Under the scheme,
           Alembic will be retaining its Vadodara manufacturing
           facility (loss making Pen-G business) along with power
           infrastructure (16MW used for internal consumption) and
           land assets at Vadodara (115 acres including 45 acres cur-
           rently used for the Pen-G facility).
                Post the demerger, Alembic Pharma would have equi-
           ty of Rs.18.8cr, of which 29.2% will be held by Alembic
           and the remaining will be with the shareholders of Alembic.
           Shareholding pattern in Alembic Pharma after taking into
           consideration 29.2% of Alembic remains the same. Post
           the demerger, the company plans to list Alembic Pharma
           after the third week of May 2011.                               tinuity over the long term, the company could be looked
                We have valued Alembic Pharma at 12x FY2013E               under two scenarios. Under the first scenario, if Alembic
           earnings on the back of improving growth. While                 discontinues its loss-making API business, we arrive at a
           Alembic’s loss-making API business is valued at EV/Sales        fair value of Rs.38 for Alembic and Rs.71 for Alembic
           of 0.6x FY2013E. For the land asset, we believe man-            Pharma. However, we stick to the second scenario where
           agement could develop the land for residential or commer-       Alembic would continue its high loss-making API busi-
           cial purpose; however, the timeline is uncertain. We have       ness and assign a target price of Rs.33 for Alembic.
           conservatively valued the land asset at Rs.500 per sq. ft.
           Given the uncertainty over Alembic’s API business’s con-                      (Writer is associated with Angel Broking)
           28   MONEY MANTRA   1-15 May, 2011
EP-18-35-- alok.qxd     4/25/2011      6:43 PM        Page 13

           Motherson Sumi                                 Buy CMP: Rs.214.50                     TARGET: Rs.242

             Margins to improve gradually
              Mehernosh K. Panthaki                               Motherson Sumi : 3 months performance
           Motherson Sumi Systems Limited
           (MSSL), the flagship company of the
           Samvardhana Motherson Group, is a
           joint venture between Samvardhana
           Motherson Finance Ltd. and
           Sumitomo Wiring Systems (Japan).
                We expect MSSL’s net sales &
           PAT to grow by 16.7% & 20.3%
           respectively on a CAGR basis over
           FY10-12. Though we expect the pace
           of growth of the Indian passenger car
           market (MSSL’s major market) to
           slow down in FY12 as compared to
           growth reported in FY10 & FY11 on
           the back of higher borrowing cost &
           rising commodity prices, the outlook        accounts for almost 55% of MSSL’s          more focus on ROCE, which is a pos-
           continues to remain buoyant & the           total sales & 83% of subsidiaries total    itive thing. Moreover, MSSL is an
           growth could be decent. With market         sales) has been a strategic move as it     investor friendly company, which
           leadership (especially in wiring har-       has provided MSS with the scale,           continues to enrich its shareholders
           ness, which accounts for a major por-       technology, Tier I status & pricing        wealth with consistent dividend pay-
           tion of MSSL’s domestic turnover &          power. New order wins with the             outs & periodical bonus.
           commands dominant market share),            launch of new models & improving                At CMP, MSSL trades at
           focus on increased content per car,         demand scenario is likely to drive rev-    25.7xFY11E & 21.1xFY12E EPS,
           technological partnerships, increasing      enue growth of SMR & accordingly           which is at a discount to Bharat Forge,
           customer base and capacity expan-           the mirror segment (SMR is largely         but at a premium to Bosche. MSSL
           sions, we expect MSSL to leverage           into mirrors).                             deserves to trade at a premium to
           its strength & exploit the opportuni-            With market leadership & supe-        Bharat Forge, since the company has
           ties available on the domestic front. As    rior technology, we expect MSSL to         a more exhaustive product portfolio as
           regards its overseas business, we           grow faster than the industry growth.      compared to Bharat Forge. Also
           expect a slow & gradual recovery in         We expect the domestic business rev-       Bharat Forge has a high exposure to
           MSSL’s main markets i.e. Europe &           enues share to increase from current       the CV space, which is more volatile
           US, while its other passenger car mar-      38% to 40.3% in FY12, while that of        as compared to the passenger car seg-
           kets like Korea & China are likely to       overseas business is expected to come      ment. SMR’s design and aesthetics
           grow faster.                                down from 62% to 59.7%, since we           capabilities, such as its ability to paint
                Acquisition of SMR (which              expect the domestic passenger car          mirror housings to the exact body
           Key Indicators (As on April 21, 2011)       market to grow at a faster rate. Wiring    color specifications of a vehicle gives
           Face Value (Rs.)       1                    harness & mirrors segment would            MSSL an edge over its competitors.
                                                       continue to remain key focus & are         Looking at MSSL’s track record
           Closing Price (Rs.)       214.50
                                                       likely to remain major growth catalyst     (sound financials & trustworthy man-
           52 week H/L(Rs.)          224.7/122.10      for future.                                agement) and its future growth poten-
           Market Cap (Rs. Crore)    8312.81                With the expected turnaround in       tial, we feel that MSSL is capable of
           EPS (TTM) (Rs.)           5.95              SMR’s profitability & cost rationali-      trading at 24xFY12E EPS, which
           BV per Share (Rs.)        18.47             sation, we expect MSSL’s margins to        gives a price target of Rs. 242. The
           P/B                       11.61
                                                       improve gradually. Further, MSSL has       complete and faster turnaround of
                                                       an impressive history of performance       SMR may lead to further rerating of
           P/E                       36.05
                                                       against five-year targets made and we      the stock. We recommend investors to
            Shareholding Pattern (in %)                believe that the targets set for 2015,     enter the scrip at current levels and
            (As on Mar 31, 2011)                       i.e. Sales of USD 5 bn, 40% ROCE,          average it on dips in the price band
            Promoters                   65.19          40% Dividend Payout Ratio, 70%             of Rs. 188-198 (18.5x- 19.5xFY12E
            FIIs                        10.12          sales from outside India & global pres-    EPS) for the above-mentioned price
            DIIs                         9.42          ence in 26-27 countries, would also be     target over the next 2-3 quarters.
            Others                      15.27          broadly achieved. The company                               (Writer is associated with
            Total                       100.0          enjoys healthy return ratios and has                               HDFC Securities)
                                                                                                            1-15 May, 2011   MONEY MANTRA   29
EP-18-35-- alok.qxd      4/25/2011        6:43 PM      Page 14

           HINOIL                                          Buy CMP: Rs.220.30                        TARGET: Rs.270

           All set to witness pullback
                Dharmesh Shah/Nitin Kunte                                  HINOIL : 3 months performance
           HINOIL was incorporated in 1983 for
           taking up Exploration and Production
           (E&P) activities. HINOIL was the first
           private company in India to enter into
           field of oil and gas exploration.
           HOEC's operational activities com-
           menced in 1991. In 2005, Burren
           Shakti Ltd (BSL) and Burren Energy
           India Ltd (BEIL), wholly owned sub-
           sidiary of Burren Energy plc (Burren),
           acquired 26% controlling stake in the
           Company from Unocal. BSL and
           BEIL declared themselves the pro-
           moters of the company in September
           The Company has a wholly owned                                                             sic example of “Change of Polarity”
           subsidiary, HINOIL Bardahl India              The stock recorded an                        principle in Technical Analysis.
           Ltd, engaged in marketing of high per-        ascending triangle                           According to this principle, a signif-
           formance fuel / engine additives. The                                                      icant historical resistance once taken
           Company has participating interest            pattern breakout in mid-                     out reverses its role as a support for
           in nine oil/gas fields in India (in           March 2011 with huge                         future price action.
           Cambay basin, Cauvery basin, Assam                                                              The stock bottomed out at the
           Arakan basin and Rajasthan basin),            volumes. Thereafter, the                     very same levels (Rs. 156-160 range)
           which are in varying stages of E&P            share price embarked on                      recently and staged a smart rally.
           life cycle i.e. exploration, develop-                                                      What is even more interesting to note
           ment and production.                          a steady uptrend forming                     here is that volumes at the current
               The share price of Hindustan Oil          higher tops and higher                       rally are mirroring the volumes that
           Exploration bottomed out near the                                                          were witnessed during the break-out
           Rs.156-160 range around February-             bottoms on the daily                         witnessed in 2009. This re-affirms the
           March 2011. The stock recorded an             chart.                                       belief that the share price has reversed
           ascending triangle pattern breakout in                                                     its medium term downtrend and looks
           mid-March 2011 with huge volumes.                                                          set for a fresh leg upwards. It can
           Thereafter, the share price has              on the daily chart. In the process, it has    also be corroborated by the fact that
           embarked on a steady uptrend form-           also swiftly moved past its 200 day           the stock has recorded a breakout past
           ing higher tops and higher bottoms           exponential moving average (EMA)              the downward sloping trend line,
           Key Indicators (As on April 21, 2011)        after witnessing a brief consolidation        which has acted as a resistance in the
           Face Value (Rs.)       10                    below the same moving onto the                entire decline since September 2009
                                                        longer term chart throws up some              highs.
           Closing Price (Rs.)          220.30
                                                        interesting observations.
           52 week H/L(Rs.)             293.2/155.50        • The recent bottoming out                Strategy
           Market Cap (Rs. Crore)       2874.77         process has occurred at key historical             In the short-term, the share price
           EPS (TTM) (Rs.)              5.84            price levels. The price range of Rs.          may witness some pullbacks to the
           BV per Share (Rs.)           84.42           156-160 levels has on previous occa-          supports of 210 levels given the mag-
           P/B                          2.61
                                                        sions acted as a strong resistance area.      nitude of the rally since 160 levels.
                                                            • So much was the significance of         Investors should utilise such pullbacks
           P/E                          37.72
                                                        the resistance that the stock reacted         in the range of Rs. 205-212 levels to
            Shareholding Pattern (in %)                 from these levels on multiple occa-           enter the stock as we expect Hind Oil
            (As on Dec 31, 2010)                        sions in the four year period from            Exploration to head towards price tar-
            Promoters                   47.18           2005 to 2009.                                 gets of Rs. 270 levels in the medium-
            FIIs                         5.47               • Finally, a strong break-out past        term. A change of view is warranted
            DIIs                         1.78           this resistance zone with record vol-         if it closes below Rs. 195.
            Others                      45.57           umes was witnessed in August 2009.                              (Writers are associated
            Total                       100.0               • The stock can be taken as a clas-                         with ICICI Direct.com)
           30    MONEY MANTRA   1-15 May, 2011
EP-18-35-- alok.qxd                4/25/2011                           6:43 PM                          Page 15

                          Quarterly GDP growth                                                                                                                                                    Inflation
                                         GDP(LHS)                                     GDP Growth % (RHS)                                                                      (%)
            14,000                                                                                                                                   13.0
            13,000                (Rs bn) (%)                                                                                                                    10.0
                                                                                                                                                     11.0         8.0
            10,000                                                                                                                                                6.0
             9,000                                                                                                                                   9.0
             7,000                                                                                                                                                2.0
             6,000                                                                                                                                   7.0
             4,000                                                                                                                                   5.0         (2.0)







                                                         CRR, Repo                                                                                               IIP and Six Key Infra Ind. growth
             7.0                                                                                                            Repo
                            (%)                                    CRR                                                                                                                     IIP growth                       Six key infra Ind growth (%)
                                                                                                                                                                  12                                                                                                               20.0
             6.5                                                                                                                                                                                                                                                                   18.0
             6.0                                                                                                                                                                                                                                                                   14.0
                                                                                                                                                                   6                                                                                                               10.0
             5.0                                                                                                                                                                                                                                                                   8.0
                                                                                                                                                                   4                                                                                                               6.0
             4.5                                                                                                                                                                                                                                                                   4.0
             4.0                                                                                                                                                   0                                                                                                               0.0



                                                                                                                                                                                                                                   Jun -10










                                                                         FDI                                                                                                        Currency movement
             4,000           (USS mn)                                                                                                                            100.0                                                                  INR/EURO
                                                                                                                                                                  90.0                                                                  INR/100 Yen
             3,000                                                                                                                                                80.0

             2,000                                                                                                                                                60.0

             1,000                                                                                                                                                40.0












                                                                                                                                                                                                                            1-15 May, 2011            MONEY MANTRA                          31
EP-18-35-- alok.qxd     4/25/2011        6:44 PM    Page 16


           E-Gold edges over Gold ETFs
                Anjani Sinha                                                         E-Gold and Gold Etfs Turnover Comparison
                                                                                           (During financial year 2010-11)
           The year 2010 witnessed entry of E-Gold of NSEL as a new
           precursor of investment. E-Gold has proved to be one of
           the most suitable trades based Gold investment instru-
           ment available to investors in India. It has gone a long
           way in proving that. E-Gold along with Gold ETF is major
           gold investment product that is traded through exchange.
           The total combined turnover of E-Gold and all gold ETFs
           put together that are traded on Indian bourses constitute
           Rs. 17070.13 crores in FY 2010-2011. Of the total E-
           Gold of NSEL has a lion share of 74% indicating the pref-
           erence of e gold by investors over other similar kind of gold
           based investment products.
                Now it is recognized fact that Gold is no longer a sea-
           sonal performer. It is one of the safest and profitable invest-
           ment opportunities that have given consistent return over
           the years. For the investors, current market environment
           put an element of skepticism about the direction and return
           for other asset classes. Thus investors are running towards
           safety asset class and that means investing in Gold, which        their discretion. There is no management fees, there are
           is a hedge against uncertainty and inflation.                     no third parties making decisions on investors' behalf,
                The investing in gold through E-Gold is only one year        and at any time investors can own the underlying gold.
           old (E-Gold was launched in March, 2010), and has given               A study of the ETF over benchmark price reveals that
           a 23.50% annualized returns. The average return offered           the price appreciations of Gold ETFS have been declin-
           by Gold ETF in India over the same period was 22.50%.             ing over the benchmark price continuously. If we com-
           Moreover till date E-Gold has given return of 30.20%,             pare the average monthly NAV of Gold ETF with that of
           while the average return offered by Gold ETFs in India            E-Gold price, we find that the difference in the price
           is 28% only. This shows that over a longer period of time         which was in the beginning have been widening. E-Gold
           returns given by E-Gold will be corresponding to Indian           price is moving along with benchmark gold price in India
           gold prices, while returns provide by Gold ETFs will lag          but gold bees price is lagging behind from benchmark gold
                           behind due to AMC which reduces the NAV.          price in the country. It shows that in the long terms the
                                   The global financial crisis and the       returns are diminishing in Gold ETFs.
                                resultant endless uncertainty that has
                                 made investors try to protect their             Price diversion of E-Gold vs Gold ETF
                                  principal and make out profit, rather
                                      than book losses, that has put E-
                                       Gold on the forefront. Needless to
                                       say, E-Gold has more than served
                                     their purpose in the investors' port-
                                         Investors who take advantage of
                                 E-Gold and include them as part of
                                their investing strategy reap many of
                                   these benefits as can be purchased
                                                with one single transac-
                                                tion. There is only one
                                                 transaction per trade, so
                                                commissions are on lower
                                             side. E-Gold is more or less
                                    a "tax friendly" investment product           ETFs and E-Gold both represent a diversification
                                     in comparison to Gold ETFs with-        into the metals asset class. There are pros and cons to
                                 out any fund management fees. The           ETF instruments, but that doesn't automatically make gold-
                                risks involved in gold-focused ETFs          specific ETFs superior to E-gold or physical gold. Investors
                               are not seen in E-Gold or physical gold.      must be aware that, while on the surface an ETF can instant-
                              Especially E-Gold, in comparison to the        ly create portfolio reallocation in one place, the fund may
                            ETFs, are fairly straightforward as              end up costing them more than they expected in both
                             investors are able to buy or sell gold at       taxes and management fees on the back end.
           32   MONEY MANTRA   1-15 May, 2011
EP-18-35-- alok.qxd   4/25/2011    6:44 PM   Page 17

                                          Technical Report
            Stocks                Close            S2         S1    Pivot           R1                  R2

            SENSEX                19471          19062      19266   19376        19580                19689
            NIFTY                  5852           5725       5788    5823         5886                 5921
            ABB                     833            809        821     828          840                  847
            ACC                    1107           1087       1097    1106         1116                 1125
            AMBUJACEM               154            149        152     153          156                  158
            AXISBANK               1448           1401       1424    1439         1462                 1476
            BHARTIARTL              381            370        375     381          386                  392
            BHEL                   2151           2126       2139    2149         2162                 2172
            BPCL                    618            592        605     612          625                  633
            CAIRN                   349            344        347     348          350                  351
            CIPLA                   322            313        318     321          325                  328
            DLF                     243            234        238     241          246                  248
            GAIL                    479            466        473     477          483                  487
            HCL TECH                523            492        508     517          532                  541
            HDFC                    715            687        701     709          723                  731
            HDFC BANK              2372           2329       2350    2370         2391                 2411
            HEROHONDA              1743           1683       1713    1731         1761                 1780
            HINDALCO                214            203        209     212          218                  221
            HINDUNILVR              284            276        280     282          286                  289
            ICICI BANK             1112           1088       1100    1107         1119                 1126
            IDEA                     68             67         67      69           70                   71
            IDFC                    159            154        157     158          160                  162
            INFOSYSTCH             2907           2872       2890    2909         2926                 2946
            ITC                     191            186        188     190          192                  194
            JINDALSTEL              677            655        666     676          686                  696
            JPASSOCIAT              101             96         98     100          102                  104
            KOTAK BANK              460            437        449     455          467                  473
            LT                     1706           1659       1683    1705         1728                 1750
            M&M                     763            718        741     755          778                  792
            MARUTI                 1265           1242       1253    1262         1273                 1282
            NTPC                    187            183        185     186          188                  190
            ONGC                    295            288        292     294          298                  301
            PNB                    1206           1172       1189    1200         1218                 1229
            POWERGRID               104            102        103     104          105                  106
            RANBAXY                 466            455        460     464          470                  473
            RCOM                    106             98        102     106          110                  113
            RELCAPITAL              602            576        589     599          612                  623
            RELIANCE               1026            999       1013    1022         1035                 1044
            RELINFRA                684            650        667     679          696                  708
            RPOWER                  129            124        126     128          131                  133
            SAIL                    174            168        171     173          176                  178
            SBIN                   2795           2695       2745    2774         2824                 2852
            SIEMENS                 856            826        841     850          865                  875
            STER                    175            170        173     174          176                  177
            SUNPHARMA               446            436        441     444          449                  452
            SUZLON                   57             54         55      57           58                   60
            TATAMOTORS             1252           1199       1225    1240         1267                 1282
            TATAPOWER              1326           1286       1306    1318         1338                 1350
            TATASTEEL               625            612        618     622          629                  633
            TCS                    1219           1163       1191    1207         1235                 1252
            UNITECH                  40             37         39      41           43                   46
            WIPRO                   464            447        455     460          469                  474
                                                                            1-15 May, 2011   MONEY MANTRA   33
EP-18-35-- alok.qxd     4/25/2011         6:44 PM          Page 18


                                  Mixed trend ahead
                               Kundli- 2 May 2011, Time: 9:00 AM, Place: Mumbai

                                          4                                1
                                  5                  Ketu                 Sun

                                                       3        Venus
                                         6                     Mercury
                                                               Jupiter     12
                                      Saturn                      Mars
                                                                                                                   Pt. Jai Govind Shashtri
                                                                                                                     www. astrogovind.com

                                      day for
                                      all the
                                      sec-                                                                           Better
                                      tors.                                                                          day for   Better
                                      Intrada                                                                        intra-    day for
                                      y and                                                                                    all the
                                      com-                                                               Better      day
                                                                                                                     and       sec-
                                      modity                                                             buying
                         Dull         opera-                      A piece                                            com-      tors.
                                                                                  Normal    Better       expect-
                         start,       tors to        Heavy        of news         day of                 ed.         modity
                                      make           selling                                day, but
                         normal                                   may             trade.                             opera-                 Profit
                                      the            expect-                                high
                         trade.                                   create          Profit                             tors.                  booking
                                      most.          ed from                                volatility
                                                                  panic.          book-                                                     expect-
                                                     FIIs                                   expect-
                                                                  Use             ing                                                       ed in
                                                                                            ed in
                                                                  your            expect-                                                   after-
                                                                  intelli-        ed.                                                       noon.

                          2 May        3 May          4 May        5 May          6 May     9 May        10 May      11 May    12 May       13 May

           34   MONEY MANTRA   1-15 May, 2011
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          36   MONEY MANTRA   1-15 May, 2011
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                                                                      WHAT’S THE

                                  WAY OUT
                                Money Mantra Bureau

                                   t times we feel helpless. It may be due to being sold a wrong prod-

                              A    uct by insurance agent or switchover to a different scheme with-
                                   out prior consent. A financial advisor luring you to sell out your
                                   existing portfolio and invest the redemption proceeds into NFO
                      would have proved disastrous for you. A broker buying and selling in your trad-
                    ing account without your approval may have resulted into heavy loss as well.
                   There would have been instances when a bank manager has not been releasing
                your mortgage documents despite paying the entire loan. Chances of getting a
              cheque bounced despite sufficient money in your account is so common. Drop boxes
            would have proved a nightmare, when the cheque dropped in the box has never seen
             the light of the day. Postal department may have refused you to make maturity pay-
               ment of instruments like National Saving Certificate and Kisan Vikas Patra. You may
                 have invested into tax saving instrument to get income tax relief but the invest-
                  ment certificate would not have reached you in time bereaving you of tax benefit.
                  The list is endless.
                  To get redressal of all these problems, you may have moved from pillar to post. If
                 you have been lucky enough to get your problem solved, three cheers for you. In
                 this write up, we have delved into common problems faced by ordinary investors
                and the redressal thereof. Hope, it would prove fruitful for you.

                                                                                1-15 May, 2011   MONEY MANTRA   37
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                                                                                                        ogesh Kumar Jayaswal, a

                                                                                               Y        resident of Radhanagar,
                                                                                                        Kolkata, had opened a
                                                                                               Demat cum trading account with
                                                                                               SMC Global Securities Ltd at 16,
                                                                                               India Exchange place branch
                                                                                               (Demat A/c No- 273161 and client
                                                                                               ID- JFN0246) on 13/07/2010. He
                                                                                               had deposited Rs.5000 including
                                                                                               Account opening charge Rs.499. At
                                                                                               the time of Account opening,
                                                                                               Abhishek Mukherjee (Relationship
                                                                                               Manager) told him that this is a life
                                                                                               time free account and the cheapest in
                                                                                               comparison to the other brokers. On
                                                                                               22nd July 2010, Abhishek called
                                                                                               him on his cell phone and tried to
                                                                                               convince for intraday trading.
                                                                                               Yogesh refused to do the same, but
                                                                                               on the same evening Yogesh came to
                                                                                               know by confirmatory call that some
                                                                                               intraday trading was done on that
                                                                                               day. When he asked about this to
                                                                                               Abhishek, he told Yogesh that such
                                                                                               incidents will not take place in
                                                                                               future. In August 2010 (a few weeks
                                                                                               later after the incident), a lady named
                                                                                               Supriya Pal called him up. She
                                                                                               informed him that Abhishek has left
                                                                                               the organization and he should call
                                                                                               her if he wants to trade. On 1st
                                                                                               September 2010, Supriya came to
                                                                                               his home and collected Rs.10000.
                                                                                                   Till September 28, 2010, the
                                                                                               trading was done with the prior
                                                                                               approval from Yogesh over his cell
                                                                                               phone by Supriya from a landline
                                                                                               number. But on September 29, 2010,

                                                 Yogesh Kumar Jayaswal, Kolkata
                                      Opened demat cum trading account with SMC Global.             If you don’t receive the
                                                                                                    money or the stock in time.
                                 Trade was executed in his account without his consent. On
                                    a single day as many as 23 trades were affected into his        As broker manages the
                               account without prior consent which resulted into loss of Rs.        account, he would be in a posi-
                                            13773. On a bad day, all his holdings were sold.        tion to tell the whereabouts of
                                                                                                    money or securities. Such
                               Relationship manager kept on dilly-dallying the matter. Most         problems are expected to be
                               of the people dealing with him left the company. He lodged a         solved at brokers end, if not,
                                       complaint with police. Nothing prevailed. Finally, he        one should contact the
                                                                          approached NSE.           exchange. If it is not solved
                                                                                                    there as well, then one should
                           NSE mediated between SMC and Yogesh. Finally, Yogesh had                 contact SEBI.
                                                 to satisfy himself with Rs. 7000 only.

           38   MONEY MANTRA    1-15 May, 2011
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           twenty six unauthorized trading trans-                                                 lost money, but Suman Mitra and his
           actions on Nifty Options were done
                                                       If your stock market                       employees told him that they can't do
           without his approval. He came to            broker is trading through                  anything because he (Yogesh) had
           know about this when a trading con-                                                    signed the power of attorney and SMC
           firmation call came at 17:10 on same
                                                       your demat without your                    people can trade on his behalf. But he
           day from a land line number. As a           consent, take the matter                   argued that there should be a prior
           result of these unauthorized transac-                                                  approval before any trade from his
           tions, he lost total of Rs.13773.29         seriously. In fact they are                account. Suman Mitra confirmed in
           (brokerage charges of Rs.12000,             legally right, because you                 his regional office and found that the
           transaction charges Rs.3.3, other                                                      confirmation call was refused by
           charges Rs.14, service tax Rs.1200.34       may have given them                        Yogesh, but Mitra denied doing any-
           and cess Rs.36.01). He did telephon-        power of attorney to trade                 thing. On insisting, he sent Yogesh to
           ic conversation with Supriya Pal                                                       his regional office (18, Rabindra
           regarding this, but her reply was           in your account. Take up                   Sarani) to meet with K Adil (who is
           unsatisfactory. She told Yogesh that        the matter with higher                     an advocate and looks after legal
           she did not know about this trade and                                                  affairs of SMC). Adil told him that
           provided numbers of Md. Tarik,              ups, if needed lodge a                     nothing can be done.
           Suman Mitra and Arindam Halder              police complain and                            After visiting number of times, he
           (Branch Manager) for further clarifi-                                                  got to know that Md Tarik was his rela-
           cation. When Yogesh called Arindam          approach the concerned                     tionship manager. He asked about this
           Halder over his cell phone, he told that    stock exchange. Of late,                   incident but Tarik denied of doing any-
           this was a mistake of the dealer Bijoy                                                 thing. Again Yogesh visited Adil and
           Saha. Halder assured Yogesh that they       SEBI has prohibited                        told him that he would lodge a com-
           will reimburse his losses by 04/10/10.      brokerages from getting                    plaint against SMC in Police Station
               Yogesh got a call on 30/09/10 at                                                   and NSE. (And he lodged a complaint
           16.36 hrs that all of his holdings have     power of attorney from                     against SMC in Police Station and
           been sold. The sold items without his       clients while opening the                  NSE.) Now Adil told that Suman Mitra
           consent were: 20 shares of Alembic,                                                    would provide him Rs.10000. When
           10 shares of Ambuja cement, 20              account.                                   Yogesh went to Suman Mitra, he told
           shares of Apollo tyres, 25 shares of                                                   that Tarik has left the company and
           BIL, 9 shares of DCB , 20 shares of        Kolkata and he assured Yogesh that          they are unable to anything.
           Dish TV, 10 shares of P T C India, 20      he will look into the matter. He also           But NSE came into act after the
           shares of Renuka Sugars, 5 shares of       informed Yogesh that Halder has             complaint. In order to resolve this mat-
           Rolta and 20 shares of Unitech. When       resigned from the company and               ter expeditiously, a meeting was held
           he called Halder about his refunds, his    Suman Mitra is in charge of his             on January 27, 2011. The trading
           mobile number was not reachable. On        Branch.                                     member agreed to pay Rs.7000 to the
           6/10/10, Yogesh personally visited             Yogesh visited many times to the        investor. Yogesh accepted the cheque,
           Sridev Mitra at SMC Zonal office,          branch to know that how can he get his      however it was very too little, too late.

                                                        If brokerage is charged in
          If dividend or bonus is not                   excess.                                        If extra stock is not received after
          received.                                                                                    merger, demerger, stock split
                                                        If a broker is charging much, one
          One should ask the broker                     should go to the broker and                    As broker manages the account,
          (Who is managing your                         demand for the form he had sub-                he would be in a position to tell
          account) about this and such                  mitted. If the box of commission               the whereabouts of the money or
          problems get solved at their                  is blank, investor should fill it. Then        securities. Such problems are
          end. The investor should visit                take a photocopy of it. Once the               expected to be solved at the bro-
          his broker to solve the issue.                investor has the photocopy as                  kers end, if not, one should contact
          If it is not solved there, he                 proof, he is in a position to chal-            the exchange. If it is not solved
          should complaint with the                     lenge the broker. If he doesn't                there as well, then one should con-
          exchange.                                     agree, the investor should go to               tact SEBI.
                                                        stock exchange.

                                                                                                            1-15 May, 2011   MONEY MANTRA   39
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                                         Solution Points
                Grievance           Contact for redressal
                Issue/Company       Compliance officer of the issuer company/               Toll free helpline from SEBI
                                    Lead manager/ Stock Exchange                            Security and Exchange Board
                Trading/Broker/Sub- Investor grievance cell of the concerned
                broker              stock exchange
                                                                                            of India SEBI is in the
                Depository services Investor grievance cell of the concerned                process of launching a toll
                                    stock exchange or concerned depository                  free helpline, wherein
                Corporate Action    Concerned Company/Concerned Exchange                    investors will be able to
                Unlisted companies Department Of Company Affairs/ concerned                 lodge their complain.
                                    Registrar of Companies (ROC).

          If the securities are not                      If duplicate certificate is not    If it’s difficult to establish
          received after demat/ transfer                 received                           ownership of the security

          If the securities are not received,            The investor has to write a let-   When the complainant is not
          it has to be asked by the con-                 ter to the company (of which the   able to establish the ownership
          cerned registrar/depository. The               shares are). The stock             of a security, concerned
          investor should contact the con-               exchange can be helpful as well    exchange would not be able to
          cerned depository or investor                  in this regard.                    help the investor. In such a case,
          grievance cell of the concerned                                                   the investor should seek help of
          stock exchange.                                                                   market regulator SEBI.

           40   MONEY MANTRA   1-15 May, 2011
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                      AT EXCHANGES                                                           AT ROC
           There are several instances when investors have a                   The investors may approach concerned Registrar
           grievance against a listed company or a trading mem-            of Companies (RoC) for the complaints against unlist-
           ber registered with stock exchanges or an intermedi-            ed companies. This may be approached for the com-
           ary registered with SEBI. In the event of such a griev-         plaints regarding non-receipt of annual report, AGM
           ance, one should first approach the trading member              notices as well. Registrar of Companies should be
           and the concerned company. However, there are                   approached for the problems related to the fixed
           chances that the investor may not get satisfied with            deposit in the manufacturing companies. Department
           their response. The stock exchanges try to solve as             of Company Affairs is the next avenue to be
           many problems as possible.                                      approached.
                Investor Services Cell (ISC) of the National Stock
           Exchange deals with the complaints of investors
           against the trading members of the exchange or against
           the listed companies. The investors can lodge their                                AT SEBI
           complaints in the format prescribed by the exchange
           along with the supporting documents either by regis-
           tering     their     complaints       online       through      Market regulator SEBI takes up grievances related
           www.nseindia.com or may send their complaints to                to the issue and transfer of the securities and non-pay-
           their regional offices.                                         ment of the dividend with the listed companies. In
                When one of the parties feels that the complaint           addition, SEBI also takes up the grievances against
           has not been resolved satisfactorily either by the other        the various intermediaries registered with it and relat-
           party or through the complaint resolution process of            ed issues. One can lodge his grievances online at
           the exchange, the parties may choose the route of arbi-         http://investor.sebi.gov.in/complaints%20form/lodg
           tration as well. Arbitration is a quasi judicial process        e%20index.htm . If one is sending his grievances
           of settlement of the dispute between trading mem-               by post or fax, he should send it to the office or the
           ber, investor, clearing member, sub-broker etc. The             investor assistance and education of SEBI at Mumbai
           arbitration aims at quicker legal resolution for the            or at regional offices. For any queries, the investors
           disputes.                                                       can mail to asksebi@sebi.gov.in .
                Once arbitration proceedings are initiated against
           the trading member, the complaint filed with the
           Investor Services Cell (ISC) is treated as closed. The
                                                                                    MUMBAI: National Stock Exchange of India
           exchange has established four Regional Arbitration                       'Exchange Plaza', C-1, Block G
           Centres (RACs)- Mumbai, Delhi, Chennai and                               Bandra-Kurla Complex, Bandra (East)
           Kolkata to accept arbitration applications. The appli-                   Mumbai - 400 051
           cation for the arbitration has to be filed at the Regional               Tel: (022) 2659 8190
           Arbitration Centre nearest to the place where com-                       Fax No: (022) 2659 8191
           plainant resides.

                                                        If you have a complaint
        If annual report and AGM notice                 against unlisted company                      If your broker/sub-broker
        is not received                                                                               has provided you wrong
                                                        Once a company gets delisted,                 information
        It is a duty of the concerned compa-            it has nothing to do with stock
        ny to provide such things to the                exchange. The investor should                 Again the broker is responsi-
        investors. If the concerned compa-              approach the company if he has                ble for the losses to the
        ny is not taking proper action, then            any complaint. If the delisted                investor if one takes positions
        one can go to Department Of                     company is not listening, one                 on the basis of wrong infor-
        Company Affairs/ concerned                      may go to Department Of                       mation. As broker is a member
        Registrar of Companies.                         Company Affairs/ concerned                    of stock exchange, the
                                                        Registrar of Companies.                       investor should contact the
                                                                                                      exchange and report this.

                                                                                                         1-15 May, 2011   MONEY MANTRA   41
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                                                                                                             rishnamurthy K P is a pol-

                                                                                                 K           icyholder of Bajaj Allianz
                                                                                                             Unit Gain plus Gold Size
                                                                                                             4 purchased on 28-10-
                                                                                                 2007 from Mandya Branch,
                                                                                                 Karnataka. The details of the policy
                                                                                                 were explained by 'then' branch man-
                                                                                                 ager (Dharmaveer Shenoy) and sales
                                                                                                 manager. During October 2007, he
                                                                                                 was planning to deposit his father's
                                                                                                 (Late Puttaswamy K) insurance
                                                                                                 amount in the fixed deposit. But, as
                                                                                                 per the details given by branch man-
                                                                                                 ager on the above policy benefits,
                                                                                                 Krishnamurthy decided to purchase
                                                                                                 the same in single premium scheme.
                                                                                                     While signing all the policy relat-
                                                                                                 ed documents, it was verbally con-
                                                                                                 firmed with manager to purchase the
                                                                                                 above policy in single premium of
                                                                                                 Rs.2,50,000 which will be under lock-
                                                                                                 in period of 3 years. He was told that
                                                                                                 on request he can redeem the policy
                                                                                                 after 3 years and would be able to get
                                                                                                 money including policy returns (ben-
                                                                                                 efits). But after receiving the policy
                                                                                                 bond, he found that he had to pay
                                                                                                 Rs.2,50,000 every year for the peri-
                                                                                                 od of 10 years which was opposite
                                                                                                 to his request while signing the appli-
                                                                                                 cation document.
                                                                                                     Immediately he enquired with the
                                                                                                 same branch manager (Shenoy) to
                                                                                                 rectify the mistake in his policy bond
                                                                                                 document. But he (Shenoy) promised

                                                  Krishnamurthy K P, Karnataka
                                                 Purchased Bajaj Allianz Unit Gain plus
                            Gold Size 4 on 28-10-2007 from Mandya Branch, Karnataka.

            He applied for a single premium policy of Rs.2,50,000 with lock-in period
                of 3 years, but he received a policy wherein he had to pay Rs.2,50,000
                                                   every year for the period of 10 years.

             He complained to branch manager, who told him that the same policy will
            get auto-converted to single premium after 3 years if 2nd and 3rd premium
                                     are paid by him. It didn’t happen after three years.

                He approached the customer care of Bajaj Allianz, Pune to get it rectified.
                     But they denied his request on the basis of his signature in all policy
                                                           application documents (2007).

                                                                       He is still a sufferer.

           42    MONEY MANTRA   1-15 May, 2011
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                                                      PROBLEM           SOLUTION                                 WHOM TO CONTACT
           him that the same policy will get auto-
           converted to single premium after 3        When the policy- The policyholder should always read Under the rules of IRDA,
                                                      holder is sold the policy documents carefully before the insurers should have
           years if 2nd and 3rd premium are paid      wrong policy on signing. If the policyholder signs the recording of the calls. Such
           by customer (him). Since these state-      true information application document and he is not sat- recordings would certainly
           ments were given by branch manag-                           isfied with the policy, he is given a free clear the water. If matter is
           er of Bajaj Allianz, Krishnamurthy                          look period of 15 days under which he not solved at the insurers
           respected his words and decided to                          can return the policy.                     end, one should contact
           wait for 3 years.                                                                                      IRDA.
                After 3 years, he again enquired
           the status of the policy in Mandya         When the policy- The policyholder should use the free One should contact the
                                                      holder is sold look period of 15 days to read the branch of insurance com-
           Branch. Then he came to know that he       policy on the things carefully. He has the right to pany. If they don't listen,
           was made victim of misselling by           wrong informa- return the policy during this period. one may contact IRDA.
           'then' branch manager (Shenoy). On         tion (concealing                                      One can claim against such
           further enquiry, he got to know many       the facts)                                            fraud agents to IRDA by giv-
           such customers were cheated like him                                                             ing their agent code.
           in the same branch. Then he enquired
           with the customer care of Bajaj            When the docu- Such things happen when address One should go the branch
                                                      ment             of given by the policyholder is not correct. of insurance company and
           Allianz, Pune to get it rectified. But     policy/receipt of                                             collect the receipt/docu-
           they denied his request on the basis       the premium paid                                              ment. IRDA is the next des-
           of his signature in all policy applica-    is not given to the                                           tination.
           tion documents (2007). They didn't         policyholder
           consider the role and promises made
           by branch manager while selling the        When        the There is no such rule against misbe- One may complaint to the
                                                      employees    of have of employees of insurance com- higher authorities of the
           policy. He requested the customer          insurance com- pany.                                 insurance company. In
           care again on the basis of Protection      pany misbehave                                       addition, he may complaint
           of Policy Holder Act 2002. But they                                                             to IRDA as well.
           gave negligible response by saying
           the policy remains the same irrespec-      When the policy Such things may take place when the If the policyholder is not sat-
           tive of any Act. He had invested his       is discontinued address given by the policyholder is isfied with the reasons of
                                                      by the insurer not right and the policyholder doesn't cancellation of the policy by
           money and now he is spending his           without the inti- get intimation send by the insurer. One insurance company, he
           precious time in order to get his          mation to the pol- should approach the insurer to get the may complaint to IRDA.
           money back for the mistake of Bajaj        icyholder          things right.
                    Allianz Branch manager.
                       Nothing has happened till      When the insurer Every policyholder has a right to ask One should go the branch
                          date.                       denies    giving for the information regarding his poli- of the insurance company
                                                      information      cy. No insurer can deny such things and collect all necessary
                                                                       unless one is not able to establish his information regarding the
                                                                       identity.                               policy.

                                                      When the insurer Insurance companies deny renewal One may complaint to IRDA
                                                      denies renewal of health policy when the policyhold- in such cases. During the
                                                      of the policy    er fails to renew policy in stipulated process, the insurer is
                                                                       time frame.                            bound to establish that the
                                                                                                              renewal is denied on prop-
                                                                                                              er reasons.

                                                      When the sur- There are cases when the insurers One should go to the
                                                      render    value/ deny surrender value/maturity value branch of the insurance
                                                      maturity value is on various grounds. But the policyhold- company. If the problem is
                                                      not given to the er or his nominee has the right to get not settled their, he can
                                                      policyholder or to the same.                              complaint to IRDA.
                                                      their nominee

                                                      When the insurer One should ask the insurer about the If the policyholder/nominee
                                                      repudiates the reason behind repudiation of the claim. is not satisfied by the rea-
                                                      claim            If policyholder/nominee is not satisfied, sons given by insurer for
                                                                       he may complaint against it.              repudiation, he may go to

                                                      When insurance One should ask the insurer about the If the insurance company
                                                      company delays reason behind delay in the settlement doesn't settle the claim in
                                                      settlement of the of the claim. If the insurance compa- time, then the policyhold-
                                                      claim             ny doesn't act fast, then the policyhold- er/nominee is free to go to
                                                                        er/nominee is free to complaint against IRDA.

                                                                                                               1-15 May, 2011   MONEY MANTRA   43
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                     AT BRANCH                                             INSURANCE OMBUDSMAN
            If one has a problem regarding insur-              The complaints of the insurance consumers can be lodged with the
            ance, he should directly contact the           Insurance Ombudsman as well. No fee is required to be paid and no advo-
            branch manager of the concerned                cate is required. The complaint may pertain to the life or non-life and pub-
            branch and give him a written com-             lic or private insurance company. The complaint by an aggrieved person
            plaint about his grievances. Every             has to be in writing and addressed to the insurance Ombudsman of the juris-
            insurance company has its own griev-           diction under which the office of the insurer falls. The complaint can also
            ance mechanism. For instance,                  be lodged through the legal heirs of the insured. Before lodging a com-
            National Insurance Company pro-                plaint, the complainant should have made a representation to the insurer named
            vides Online Grievance Regist-ration.          in the complaint and the insurer either should have rejected the complaint
            The customers can go to http://nicon-          or the complainant have not received any reply within a period of one month
            line.co.in/grievance/servlet/griev-            after the concerned insurer has received his complaint or he is not satisfied
            ance.GuestGrievancePost?USERID                 with the reply of the insurer. It is important to note that the complaint is not
            =0&CHOICE=GUEST&GUEST_N                        made later than one year after the insurer had replied. One should take care
            AME=yes and register their griev-              that the same complaint on the subject should not be pending with, before
            ances with the company. Besides,               any court, consumer forum or arbitrator. There are 12 offices of the ombuds-
            every insurance company has its own            man in the country. The offices of ombudsman are located in the following
            ombudsman.You can reach them, if               cities: Ahemdabad, Bhopal, New Delhi, Mumbai, Chennai, Hyderabad,
            branch manager is not able to solve.           Bhubneshwar, Lucknow, Kolkata, Ernakulam, Guwahati and Chandigarh.

                       AT IRDA                             AT CONSUMER FORM                                    AT DPG
            The complainant is required to first           To redress the complaints of the         The complaints against the public sec-
            approach the insurer and if not satis-     consumers, District Consumer                 tor insurance companies (LIC, GIC,
            fied then the Grievance Cell of IRDA.      Forums in each district of the state,        United India, National, New India,
            The matters regarding delay and non-       State Commissions in each state of the       and Oriental) can also be lodged with
            response pertaining to the policies and    country and National Commission at           the Director of Public Grievances
            claims from the insurer are taken up       Delhi have been set up under the             (DPG) in the Cabinet Secretariat of
            by IRDA Cell with the concerned            Consumer Protection Act 1986                 Govt. of India. If one wants to com-
            insurer. The complaints are required       (Amendment 2002). The nominal fee            plaint online, the link is
            to be submitted on the prescribed          is charged and complaint can be filed
            form available at the web site             directly by the complainant or                       http://www.dpg.bharat-
                                                       through advocate. The complaints of                  sarkar.nic.in/ The complaints
                                                                                                             can be sent by post at the fol-
                 www.irda.gov.in to be sent to at      the amount up to Rs.20 lakhs can be                  lowing address.
                 following address.                    filed in District Forums, cases of
                                                       above Rs. 20 lakhs and up to Rs.1                    Directorate      of     public
                 Insurance     Regulatory       and    crore are looked at State Commission                 Grievances,           Cabinet
                 Development            Authority,     and the cases of above Rs. 1 crore                   Secretariat, 2nd Floor, Sardar
                 Consumer Affairs Department,                                                               Patel Bhawan, Sansad Marg,
                                                       are dealt in National Commission.
                 United India Tower, 9th floor, 3-5-                                                        New Delhi-110001
                 817/818,          Basheerbagh,        The forums decide the case within 3
                 Hyderabad- 500 029                    months from the date of the receipt
                                                       of notice by the opposite party.
            44   MONEY MANTRA   1-15 May, 2011
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                                                                                                           r. Jigish M Shah of

                                                                                            M              Vadodara is having an
                                                                                                           account with Bank of
                                                                                                           Baroda, Raopura Branch
                                                                                            since 7 years. He has been operating
                                                                                            his account online since 2 years.
                                                                                            Between 02-03-2011 and 03-03-2011
                                                                                            a total amount of Rs. 42600/- was
                                                                                            siphoned from his account. He noticed
                                                                                            it on 05-03-2011. Shah immediately
                                                                                            reported to the bank regarding the
                                                                                            same on the same day and the bank
                                                                                            relationship manager convinced him
                                                                                            not to contact the police and they will
                                                                                            get back to him with a positive reply
                                                                                            within 48 hours. But Shah could not
                                                                                            get proper response from the bank in
                                                                                            this regard. According to him, he has
                                                                                            never shared his account ID and the
                                                                                            password with anyone. Shah is now
                                                                                            planning to register a complaint
                                                                                            against the bank for the debit of
                                                                                            amount from his account without any
                                                                                            reason, but will he get back his money?
                                                                                                Ramesh Ahuja has a similar expe-
                                                                                            rience. He is a priority customer of
                                                                                            State Bank of India. He had 15 lakh
                                                                                            in account when he issued a cheque
                                                                                            from his account. The cheque was
                                                                                            account payee and was intended to
                                                                                            make payment of installment to
                                                                                            builder. Amount of the cheque was Rs.
                                                                                            5 lakh. The bank refused to encash
                                                                                            the cheque. On query it was told that
                                                                                            the address of the account holder did-
                                                                                            n't match with the address written at
                                                                                            back side of the cheque. In fact, Mr.
                                                     Jigish M Shah, Vadodara                Ahuja had written his new flat details
                                                                                            (details of the flat bought from builder)
                                He has an account with Bank of Baroda since 7 years.        as a matter of security. The bank took
                                                                                            an excuse to return the cheque. Due
                               He has been operating his account online since 2 years.      to this act of SBI, Mr. Ahuja couldn't
                                    A total amount of Rs. 42600/- was siphoned from         pay installment on time and the builder
                                                  his account without his knowledge.        added interest at the rate of 18% to
                                                                                            his account. Since, Mr. Ahuja is a pri-
                          He immediately reported it to the bank and the relationship       ority customer of the bank; it was duty
                       manager convinced him not to contact the police and assured of       of SBI branch to ask about the cheque
                                                      positive reply within 48 hours.       to Mr. Ahuja before returning the
                                                                                            same. He complained to the branch
                          Shah is still waiting for the response. He is now planning to     manager regarding the same, but to
                                            register a police complaint against the bank.   no avail. He had to pay interest from
                                                                                            his own pocket. He has written to the
                                                                                            head office of SBI and awaiting reply.
                                                                                            He has demanded that the interest
                                                                                            amount should be borne by SBI, as it
                                                                                            was the mistake of SBI.
                                                                                                People like Ramesh and Jigish are
                                                                                            a plenty. They are running from pil-
                                                                                            lar to post in search of justice.
                                                                                            If you are one of them, here is the
                                                                                                      1-15 May, 2011   MONEY MANTRA   45
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            BANKING BOILS

                                 WHERE TO REACH?                                                     LOSS of PIN

                                                                                                     Inform the bank and apply for
                BANKING OMBUDSMAN                          CONSUMER COURT                            a new pin. One may apply by
                                                                                                     going to the bank branch (for
                 The banking ombudsman is a sen-               Consumer court (forum) acts at        some bank any of its branch)
                ior official appointed by the              three tier structure. If the dispute is   or on banks' website. It's a com-
                Reserve Bank of India to redress           up to a sum of 20 lakhs Rs.; a con-       mon problem. Just by meeting
                the customer complaints against            sumer has to file a complaint in the      the sales executive of the bank,
                deficiency in certain banking serv-        District Consumer Forums. If the          one can get a new pin.
                ices. As on date, fifteen banking          dispute amount is between Rs. 20
                ombudsmen have been appointed              lakhs and one crores, a consumer has
                with their offices located mostly          to file a complaint in the State
                in the state capitals. In following        Commission and If the dispute
                cases a complaint will not be con-         amount is more than 1 crores Rs. ;
                sidered by the ombudsman :                 a consumer has to file a complaint in
                   If one has not approached his           the National Consumer Forums.
                   bank for redressal of his griev-        National Consumer Disputes                Unable to pay EMI
                   ance first (at least for 30 days).      Redressal Commission (NCDRC) is
                   If one has not made the com-            a government body which deals in          Approach the bank and ask
                   plaint within one year from the         saving the consumer interest. All         to extend the loan term to
                   date one has received the reply         contacts of consumer forum/com-           decrease the EMI. The bank
                   of the bank or if no reply is           mission can be obtained from:             manager will solve the prob-
                   received; if it is more than one        http://ncdrc.nic.in/                      lem. If he is not helping than
                   year and one month from the                                                       you may write a letter to head
                   date of the representation to the               Address for assistance            office.
                   bank.                                           H.D. Nautiyal, Appellate
                   If the subject matter of the com-               Authority, Registrar NCDRC,
                   plaint is pending for disposal /                Room No.601, 7th Floor, 'B'
                   has already been dealt with at                  Wing, Janpath Bhawan, NEW
                   any other forum like court of law,              DELHI - 110 001. Fax No:
                   consumer court etc.                             23712456, Phone Number:
                   If the complaint is for the same
                   subject matter that was settled
                   through the office of the banking               S. Hanumantha Rao, PIO,
                   ombudsman in any previous pro-                  Deputy Registrar NCDRC,
                   ceedings.                                       Room No.712, 7th Floor, 'B'
                                                                   Wing, Janpath Bhawan, NEW
                                                                   DELHI - 110 001. Fax No:
                       For     ombudsman          visit:           23712456, Phone Number:
                       http://www.rbi.org.in/script                011-23329248

                       Names, addresses, email
                       and the telephone number of
                       banking ombudsmen:

                       Form of complaint with the
                       banking          ombudsman:

           46     MONEY MANTRA   1-15 May, 2011
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                                                             PROBLEM                      SOLUTION                        WHOM TO CONTACT
             If cash deposit receipt is
             lost and bank says that you                If cash is not dis-   Such errors are corrected by the Follow your complain by vis-
             have not deposited.                        pensed through        bank within 48 hours if the           iting your branch. We sug-
             You may visit the parent branch            ATM and amount        machine is of same bank else          gest that you meet branch
             of the bank and submit the                 is debited from       within 2 weeks. First thing to do manager and seek record of
             details about the deposit. If bank         the account           is to collect the transaction slip one hour data showing your
             refuses, contact the higher                                      from the ATM and preserve it as transaction on that day. If
             authority . One may reach bank-                                  proof. Call the call centre of relat- nothing happens then reach
             ing ombudsman, but                                               ed bank and register a complain. Appellate authority of the
                                                                                                                    bank or RBI.
             since you have no proof
             it will be hard to get the
                                                        Loss of cheque    Contact your bank and tell them          Contact head office if
             money back.                                                  to make sure that payment does           branch is not co-operating.
                                                                          not go with any other account. If        However, if money is been
                                                                          you have dropped your cheque             collected by a suspicious
                                                                          in a drop box you won't be hav-          account contact higher offi-
                                                                          ing any receipt. You may ask the         cial for the matter and
                                                                          cheque issuer bank to issue a            lodge an FIR.
                                                                          certificate against it. It's better to
             If the ATM card gets lost                                    stop payment of the cheque.
                                                        If original docu- You must be having the receipt           It's better to scan the docu-
             First one should block his                 ments mortgage given by the bank against your              ments and keep it on email.
             card by calling the call cen-              (like property    mortgage. Use it for obtaining a         You can claim money spend
             tre and then report to the                 paper) is lost by certificate by the bank that they        on the procedure (to get
                                                        bank.             have lost those documents. File          new documents) from the
             bank branch.You should
                                                                          FIR and on the basis of FIR you          bank. If bank refuses to pay,
             contact the sales executive                                  can make new documents.                  approach RBI ombudsman
             and fill a form for a new card.                              Before mortgaging, do remember           or consumer court.
                                                                          to take photocopies of the docu-
                                                                          ments and get them attested by
                                                                          the bank.
                                                        Not receiving the On the time of opening of                Bank cannot charge if it is
                                                        bank statement    account, you must have directed          not mentioned in their serv-
                                                        and bank asking the bank for an email statement            ice charge list. If the
                                                        for service       or the address of correspon-             charges are not mentioned,
                                                        charges to pro-   dence would be wrong. Ask                approach to higher
                                                        vide it.          bank official to correct these.          authorities.

                                                        Wrong communi-        This usually happens in case of      If they go against written
                                                        cation & commit-      credit card and priority banking.    commitments then you will
                                                        ment provided by      Do not believe in verbal commit-     have valid proofs to sue
                                                        bank executive/s.     ments and ask them to commit         them. Contact ombudsman
                                                                              you everything in writing.           first in such cases.

                                                        Refusal of small      As per rule book, no bank can If such thing happens, ask
                                                        denomination          refuse for this. Yes, bank canbank manager to give you in
                                                        notes while           make you wait so that they canwritten that they will not
                                                        depositing.           clear most of the customer.   accept small denomination
                                                                                                            notes. Complain to higher
                                                                                                            authorities and RBI for the
                                                        If bank is not pro- Keep copy of every request and Complain to appellate
                                                        viding ATM card, ask for the reason for not proving authority of the bank. If they
                                                        internet banking the services.                      do not respond better close
                                                        user/password,                                      the account and search for
                                                        cheque book,                                        a better bank.
                                                        statements, debit
                                                        card PIN etc
                                                        If relationship   Bring it to the notice of the            If he doesn’t pay attention to
                                                        manager fools or branch manager.                           your complaint, write to
                                                        misguides you                                              higher authorities.
                                                        about you invest-

                                                                                                                   1-15 May, 2011   MONEY MANTRA   47
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                  PROBLEM                          SOLUTION                  WHOM TO CONTACT
                                                                                                         If the card is stuck inside
                                                                                                         the ATM machine.
           False charges for        Ask bank in written that you    Approach appellate
                                                                                                         You should immediately block
           the services which       have never intended to avail    authority with the matter
           is not availed or not    those services.                 and ask them to remove               the card by calling your Bank.
           intended to avail.                                       or refund those charges.             If it has stuck in same bank's
           If bank applies any      If bank charges something which If there is no response,             ATM, approach the bank
           false service charge     is not mentioned earlier, do    contact ombudsman of                 branch or the customer care. If
                                    claim for refund with the bank. the bank (in head office),           it is stuck in another bank's ATM
                                    Ask in writing to the bank      else that of RBI.                    or in a different city, you
                                    manager for it.                 Consumer court should                will have to apply for a
                                                                    be the last option.                  fresh card.
           Showing false debit Ask your branch official in writ-         If the matter is not
           and bank is not       ten if they have any proof of           resolve, you may lodge a
           responding.           such debit. Take up the matter          police complain against
                                 with higher bank official.              the bank.
           If bank official does Every bank has a complain reg-          The bank usually takes
           not give proper       ister, a complain & suggestion          such matter seriously. If        Signature Mismatch
           service or shows      box or a complain telephone             nothing satisfactory hap-        One may have to submit var-
           disrespect to the     number, use them for complain.          pens approach top most           ious documents (Identity
           customer.             File complain in detail. Its better     bank official with the           proof) which can support the
                                 you have other witness too.             case.
                                                                                                          identity of the account hold-
                                                                                                          er. Meet the branch manag-
           If bank official ask     This is something most serious       If you can produce any
           for bribe to loan.       and is practice even with so         sting it's better, else those    er and try to convince him.
                                    much competition. One can find       officer will proceed on the      If banker believes you he may
                                    the contact information of bank's    case seriously. If you           once again take a new signa-
                                    vigilance officer or may be CBI      have proof you should            ture on old specimen
                                    written at a notice board of         lodge a police complain          and validate that.
                                    branch. Inform them about this.      against the official.
           If bank refuses to       This will happen only in case of     Do ask in written on what
           pay the nominee (if      dispute of legal heirs. For          grounds they have objec-
           the demise person        instance if account holder has       tions in paying the money.
           has not mentioned        two wives, bank will offer the       If you do not find any
           any).                    amount to first wife. In case sec-   valid reason, approach
                                    ond wife objects, the bank may       ombudsman/consumer              If you have defaulted ear-
                                    ask for a court settlement.          court with the matter.          lier and now applying for
           Exorbitant change     Interest rates vary from bank to        Loan takeover will be
                                                                                                         a new loan
           in RoI                bank and depends on their cost          possible with the consent       Being a defaulter, you have no
                                 of raising funds. Approach              of two banks. Approach          right to complain without a strong
                                 another bank (who offers lesser         the other bank with solid       reason. You might be lucky to get
                                 interest rate) and convince them        reasons and documents           a new loan but also be ready for
                                 for loan takeover.                      (assets etc.)                   a major documentation, high
           If bank reduces loan This could be interesting. If you        In case of retail loans,        mortgage / guarantee,
           eligibility from what need a loan for any project and         meet higher authorities         high interest rates and a
           it promised in first your CA estimates Rs 30 lakhs            and explain the situation.      lesser loan amount.
           instance.             loan and bank gives you Rs. 20          Banks evaluate all kinds
                                 lakhs, then in case of business         of risk before financing.
                                 failure you can sue bank for            Since bank is a commer-
                                 under financing. So bank will           cial entity you can't do
                                 either finance full amount or will      much about it. Approach
                                 not finance any.                        another bank for loan.
                                                                         You may approach con-
                                                                         sumer forum as well.            If the EMI date differs from
                                                                                                         your salary date
           If the recovery          Complaint in the written to bank RBI has strict rules
           agents harrases          higher authority sold be submit- against it, you may                 You have to approach your lender
                                    ted.                             approach them with the              and explain the reason behind this.
                                                                     matter.                             Request         the     bank     to
           Assurance of             These are the tactics that bank      If you do not have any          change/extend the date of deposit.
           rescheduling of EMI      follow so that you pay for last      written commitment you          Modification in the loan agreement
           and not done after-      default EMI. Before paying all,      can approach nowhere.           will be done in the branch.
           wards                    ask for a written commitment.        But if you have a written       However bank may
                                                                         commitment then you can         charge once for it.
                                                                         approach ombudsman.
           48   MONEY MANTRA      1-15 May, 2011
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           Rahool Jain, a resident of Choolai
           (Near Doveton Hot Chips), Chennai,
                                                          B             H
                                                          OND OLDER RIEVANCE OLUTION G                      S
           had applied for IDFC Infra Bonds
           (Application Number- 52453721) for The bond holder should contact the company, which had issued the bond.
           Rs. 20,000 through his Demat The registrar of the company, as well, can be helpful. If the investor doesn't
           Account with Kotak Securities in get the help from these, he should resort to the market regulator SEBI.
           October, 2010. He had been allotted
           4 Bonds (2 from Series 3 and 2 from     For IDFC Bond
           Series 4). But after several months, he
           didn't receive any kind of intimation            Infrastructure Development Finance Company Limited, Naman
           letter / physical certificate / or any           Chambers, 6th Floor, C-32, G-Block, Bandra Kurla Complex, Bandra
           other kind of statement for the bonds            (East), Mumbai - 400051
           which he can produce to claim the                Mahendra N Shah, Compliance Officer, Investors Grievance
           tax benefit. He had been contacting              Committee, IDFC, Email at: mahendra@idfc.com, Tel: 022 -
           IDFC and KARVY (their transfer                   42222016/42222000, 022 - 26540354
           agents) and had been sending many                KARVY Computershare Pvt. Ltd., Plot No. 17 to 24, Vittal Rao Nagar,
           emails but there was no response.                Madhapur, Hyderabad - 500 081, Tel: +91-40-23420815 to 824
                      Vineet Kelkar had given
           ECS mandate for receiving dividend For IFCI Bond
           payment on infastructure bonds he
           had purchases from IDFC. It was a               IFCI Ltd., Resources Department, IFCI Ltd, IFCI Tower, 61, Nehru Place,
           five year bond. During all those five           New Delhi- 110019, Tel: 011-41792800/ 41732000 (FOR IFCI BOND)
           years, he didn’t received any inter-            Beetal Financial & Computer Services Pvt. Ltd., BEETAL HOUSE, 3rd Floor,
           est payment at all. He made a com-              99, Madangir, Behind Local Shopping Centre, New Delhi -110062, Tel:
           palin to this effect to IDFC. Six               011- 29961281, Fax: 011- 29961284, For queries post allotment, please
           months have passed. He is still wait-           contact Registrar at ifci@beetalfinancial.com or Email to IFCI at
           ing for the reply.                              infrabonds@ifciltd.com

                                                If the intimation
                                                letteris not received

                                                One should intimate the                                 If dividend is not received
                                                same to the company, which                              through ECS
                                                has issued the bond. It
                                                would issue the same.                                   The investor should intimate the
                                                The investor should                                     bond issuing company regarding
                                                approach the company first.                             this. If the case is not solved,
                                                The registrar can be of great                           one may complain to SEBI.
                                                help as well.
                                                                                                     1-15 May, 2011   MONEY MANTRA   49
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               Jayashree Rajagoalan had an RD TBE 84341 dated 23.10.06. He had
           lost the passbook. After giving Non-Traceable certificate from the police
           and the closure certificate his RD didn't get closed. He visited the post
           office several times, but got irresponsible reply from the Post Master.
           Meanwhile he got to know that the details of his RD were not fed in the
           computer and last few entries were missing (Non-entry) in the long book.
               Lakshman Kumar Chaudhary had deposited a cheque in the post office
           savings account at Ganoun Post office SO- Ghanshyampur, Darbhanga, Bihar.
           His sister had received the cheque of Rs.2000 from her school for a bicycle
           on July 24, 2009. The cheque was not cleared within the stipulated time.
           He visited the post office several times, but all in vain. He also complained
           on the website of India Post. But things didn't turn up positive.
               You may be aggrived wih post offices for some reason or the other. In
           the forthcoming pages, we’ll discuss how to take post offices to task for
           putting investor at woes.

                                     TAKING TO TASK
            First of all one should complaint in the post office (to Postmaster/ In-charge
            of the Post Office) where the transaction has taken place and get acknowl-
            edgement for the same. Getting no respite, one should approach next higher
            authority of the department. Here is the hierarchy.

             Senior                         Post Master General      Chief
             Superintendent /               of the Region in         Postmaster
             Superintendent of              whose jurisdiction       General of the
             Post Offices of the            the concerned Post       respective
             Division in whose              Office and Division
             jurisdiction the con-                                   Circle.
             cerned Post Office

                                                                  If the post office says that
           If post office delays payment                          it has lost the document
           after the maturity date
                                                                  One should apply for a fresh
           First of all one should complaint                      pass book and forget about
           to the Postmaster/ In-charge of the                    the old. They are supposed
           Post Office where the transaction                      to have all data about the
           has taken place and get the                            savings. If the post office has
           acknowledgement. If not satisfied                      lost NSC/KVP, then the con-
           with the action taken, one may go                      cerned person of post office
           to the higher authorities.                             should fill an indemnity bond.
           If the action is not taken at the post                 If not soved, one should com-
           office, one may go to the                              plaint to the Postmaster of
           Superintendent of Post Offices of                      the Post Office where the
           the Division. After that one should                    transaction has taken place.
           go to the Post Master General of
           the Region.

           50   MONEY MANTRA    1-15 May, 2011
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                                                   GUIDELINES FOR COMPLAINTS
                                               State                 Mailing Address
                                               Bihar                 cpmg_bhr@indiapost.gov.in 0612-2225051 (Tel), 2225011 (Fax)
                                               Chhattisgarh           cpmg_chh@indiapost.gov.in 0771-2233400 (Tel), 2233194 (Fax)
                                               Jharkhand              cpmg_jha@indiapost.gov.in 0651-2482345 (Tel), 2480153 (Fax)
                                               Madhya Pradesh        cpmg_mp@indiapost.gov.in 0755-2550838 (Tel), 2556547 (Fax)
                                               Uttar Pradesh         cpmg_up@indiapost.gov.in 0522-2622000 (Tel), 2616855 (Fax)

                                                          If the complainant is still dissatisfied with the action taken, he/ she
                                                          may approach
                                                        Deputy Director General (FS)
                                                        Dak Bhavan, Sansad Marg, New Delhi Pin Code- 110116
                                                        Email at- ddgfs@indiapost.gov.in & sbpgsection@gmail.com
                                                        Phone: 011-23096089, 011-23096108, 011-23036224
                                                        Fax: 011-23096089

                                                          For all type of the complaints concerning Postal Life Insurance or
                                                          Rural Postal Life Insurance, one should approach to
                                                        Chief General Manager (PLI), PLI Directorate,
                                                        Chanakya Puri, New Delhi
                                                        Pin Code- 110021
                                                        Email at cgmplidte@gmail.com
                                                        Phone: 011-24672461
                                                        Fax: 011-26882838

                                                        Complaint registration and status update online:
                                                        Go to home page and click on FEEDBACK link, select option COM-
                                                        PLAINT REGISTRATION for lodging complaint. The link is:
                                                        Go to home page and click on FEEDBACK link and select option COM-
                                                        PLAINT STATUS for knowing the position of the case. The link is:
                                                        Addresses of the state consumer disputes redressal commissions

                                    If the customer loses his                            When a bank cheque
                                    documents                                            deposited into the post
                                                                                         office savings A/C doesn't
                                    If the customer has lost                             get cleared
                                    NSC/KVP, then he should fill
                                    an indemnity bond.                                   One should ask the post office
                                    If the action is not taken at                        the reason behind the issue. If
                                    post office, the customer                            the post office has lost the
                                    should go to the                                     cheque, concerned person of
                                    Superintendent of Post                               the post office should fill an
                                    Offices of the Division. After                       indemnity bond.
                                    that one should go to the                            If the post office doesn't take
                                    Post Master General of the                           action well in time, then the
                                    Region.                                              customer should go to the
                                                                                         Superintendent of Post Offices
                                                                                         of the Division.

                                                                                                       115 May, 2011   MONEY MANTRA   51
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           Soumendra is a retail investor in the mutual fund and AMC. Birla Sun Life Asset
           Management Company is the one who has made him bawl for his money. In
           2008, Soumendra purchased a SIP, Scheme, B02G BSL Tax Relief'96 Fund
           (ELSS U/S 80C if IT ACT) from Birla Sunlife Mutual Fund. He was doing
           this investment every month. Surprisingly one day he saw an entry load
           charge against his folio which was of till date (Nov 2010). He knew that
           SEBI has already instructed Asset Management Companies not to charge
           entry load with effect from 1st Aug 2009 ( as per circular SEBI/IMD/CIR
           No. 4/ 168230/09, June 30, 2009). Soumendra still carries this complaint that
           the AMC provider is doing a wrong practice and doing business against SEBI
           guideline, but he doesn't know how to deal with it.

           In an another case, Preetam Kumar Agrawal from Agra really had to fight tough
           to receive his redemption. He says it took him more than three months to get
           his earnings. Agrawal in 2010, gave the redemption request in folio no. 2141836
           (Tata Infra Fund-Growth). But did not received the amount despite of sever-
           al correspondence. He sent the complaint and scan copy of bank pass book
           so many times but no necessary action was taken. The company use to tell
           that his amount has been transferred but then, he did not received any. With
           his complaint, Agrawal also approached CAMS (a service provider in MF indus-
           try) but no hope came. Finally he lodged an online complaint to SEBI. However,
           with all Agrawal's approach, Tata MF showed some seriousness and acted on
           the matter. It was found that the company, by mistake has filled wrong IFSC
           code of the bank and money went to an account held with a branch in Kerala
           (which was supposed to come at Agra). The company soon rectified the error
           and returned him the money and that too with the interest.

                  IN CASE THERE’S A COMPLAIN
           The investors can find the name of contact person in the offer document of
           the mutual fund scheme whom they may approach in case of any query, com-
           plaints or grievances. Trustees of a mutual fund monitor the activities of the
           mutual fund. The names of the directors of the asset management company
           and trustees are also given in the offer documents. The investors should
           approach the concerned Mutual Fund / Investor Service Centre of the Mutual
           Fund with their complaints. If the complaints remain unresolved, the investors
           may approach SEBI for facilitating redressal of their complaints. On the receipt
           of the complaints, SEBI takes up the matter with the concerned mutual fund
           and follows up with it regularly. The Investors may send their complaints to:
                           Securities and Exchange Board of India
                           Office of Investor Assistance and Education (OIAE)
                           Plot No.C4-A , "G" Block, 1st Floor,
                           Bandra-Kurla Complex,
                           Bandra (E), Mumbai - 400 051.
                           Phone: 26449199-88-77
                           MF complaint can be lodged at:

                           Association of Mutual Funds of India (AMFI)
                           COMPLIANCE OFFICER: Vinay Gupta and Simcy
                           One India Bulls Centre, Tower-2,
                           7th Floor, 701 - Jupiter Mills Compound,
                           841, Senapati Bapat Marg, Elphinstone Road,
                           Mumbai- 400001
                           TEL : 022- 24210093 / 24210383 / 43346700
                           FAX : 43346712, 43346722
                           Can complain at: contact@amfiindia.com


           52   MONEY MANTRA   1-15 May, 2011
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                                                  Showing Short Term performance and selling schemes
                                                  This is basically a wrong connotation. They do it to meet
                                                  their target or gather some extra incentive. One should
                                                  watch for long term performance and consistency of
                                                  the fund. As intermediaries are registered with AMFI,
                                                  the customer should first complain to AMFI. If not satis-
                                                  fied, complaint should be made with the market regula-
                                                  tor, SEBI. Consumer forum is the last resort always.

                                                  Showing Short Term performance and selling schemes.
                                                  This is basically a wrong connotation. They do it to meet their target or
                                                  gather some extra incentive. One should watch for Long Term Performance
                                                  and consistency of the fund. As intermediaries are registered with AMFI,
                                                  the customer should first complain the very body about this. If a satisfac-
                                                  tory step is not taken then the complaint against them should be made
                                                  with the market regulator, SEBI. If someone does not bear a loss, he can
                                                  approach the consumer forum / court against the intermediaries.

                                                  If the agent convinces you for churning/switching over
                                                  For every switch, a customer has to bear some cost and
                                                  the agent makes some money. If a customer feels that he
                                                  is being cheated by the agent/distributor, he should lodge
                                                  a complaint to the MF association, AMFI. SEBI and con-
                                                  sumer court are the next points for making a complain.

                                                   When the agent strives for New fund of fer (NFO)
                                                   Most of the NFO's pay very heavy commissions (nor-
                                                   mally double than existing funds) to the agents. Hence,
                                                   the agents tell the investors that they should invest in NFO,
                                                   as they have low NAV, one can get more units. As inter-
                                                   mediaries are registered with AMFI, the customer should
                                                   first complain to AMFI.

                                                    Tax Fund is sold when no tax saving needed
                                                    A customer should be aware as agent gets more rev-
                                                    enue so he sacrifices your liquidity, asset allocation &
                                                    returns. As intermediaries are registered with AMFI, the
                                                    customer should first complain to AMFI.

                                                                                            115 May, 2011    MONEY MANTRA       53
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           Non receipt of Write a letter to the branch head                 If at all, nothing happens one
           Dividend    on (preferably via email) about the sit-             should approach SEBI for            When the agent compels to invest in
                                                                                                                the fund, after its dividend
           Units          uation and ask for a reply. If a sat-             the purpose. The injured            announcement.
                          isfactory reply does not come,                    party may visit SEBI's follow-
                          approach the compliance officer of                ing link for same,                  Dividend is paid from clients own invest-
                          the company. He may address the                   http://www.sebi.gov.in/Compl        ment. The value of the investment
                          issue to AMFI afterwards.                         aint5.jsp                           value goes down by the same propor-
           The interest on     SEBI has stated that in the event            Approach AMC compliance             tion of dividend declared. As interme-
           the     delayed     of failure of dispatch of the divi-          official first, then AMFI (if not   diaries are registered with AMFI, the
           payment      of     dend warrant within the stipulated           satisfied) and lastly SEBI to       customer should first complain toAMFI.
           Dividend            30 day period, the AMCs should               get satisfied on the problem.       If a satisfactory step is not taken then
                               pay interest @ 15 per cent per               One may also approach con-          the complaint against them should be
                               annum to the unit holders. Such              sumer forum/ court for the          made with the market regulator, SEBI.
                               incidents may also be reported to            matter.

           Non              In accordance with SEBI's regula-               If the company refuses to
           receipt/delay of tions, in the event of failure to dis-          pay the interest than one
           Redemption       patch the redemption or repur-                  may approach AMFI and                STP (Systematic Transfer Plan)
           Proceeds         chase proceeds within the period                then file a complaint in SEBI.       nahi, MIP (Monthly Income Plan)
                            specified i.e. 10 working days,                 One may also approach the            sahi!
                            AMC is liable to pay interest to the            consumer forum/court for the
                            unit holders at such rate as may                matter. Remember to have             As MIP's offer more commission to the
                            be specified by SEBI. One should                all the necessary documents          mutual fund distributor than the Equity
                            write (preferably by email) to the              intact.                              Funds’ STP, agents try hard to sell the
                            branch head of the AMC.                                                              product. As intermediaries are regis-
                                                                                                                 tered with AMFI, the customer should
           Non receipt or Ask the branch or the customer                    Most of the time, the matter         first complain the very body about this.
           discrepancy in care to provide the statement with                will get resolve at lower level.     If a satisfactory step is not taken then
           Statement   of a valid customer proof.                           If not approach compliance           the complaint against them should be
           Account.                                                         cell of AMC.                         made to SEBI.

           Non receipt of Ask the branch or the customer If compliance cell of the AMC
           A n n u a l care to provide the statement with does not address your com-
           Report/Abridge a valid customer proof.         plain, approach AMFI.
           d Summary
           U n a u t h o r i z e d Approach AMC compliance official         If compliance cell of the AMC
           switch between first with a written complain. Ask                does not address your com-
           Scheme                  them for re-switch and to compen-        plain, approach AMFI and                 If the signature does not match
                                   sate all loss (if happens).              later to SEBI.                           during redemption.
           Wrong or excess Approach AMC's branch head or                    One may approach the AMC
           charges/load            the compliance official with a written   or SEBI for the matter or                Take out your bank statement
                                   complaint. Ask them to remove            directly challenge it in the con-        and get it attested by the bank
                                   these charges. It is quite possible      sumer court.                             Obtain the signature verification
                                   that the charges would have been                                                  certificate issued by the banker.
                                   written in fine print of the OD.

           Deviation from Because of the change in the fund                 Deviation from the objective
           Scheme         manager or for some other reasons,                means deviation from the
           attribute      the fund objectives or strategy also              goal. A victim of such incident
                          changes. However the companies                    may approach AMFI first and
                          inform every customer about this                  then SEBI to resolve the mat-
                          in advance and offer an option of                 ter. If at all ,there is monetary
                          exit. In case one is not informed,                loss due to this, one may
                          one can reach the AMC.                            approach the consumer court.

           Non-updation of     Ask the branch / customer care for           A customer should approach              No cash in account lying in
           changes      viz.   the updation with a valid customer           MF's head office (in written) if        account for SIP
           address, email      proof. MF office may not entertain           the branch does not entertain
           id, PAN, bank       the request if made on phone. So it's        this simple request.                    It may happen that a SIP customer,
           details, nomina-    better to approach nearest branch                                                    during any month, falls short of cash
           tion, etc.          or makean online request on the                                                      for the promised amount. He should
                               company's website.                                                                   address this well in advance to the
           Exorbitant     The      Portfolio   Management                   One may approach SEBI or                mf company. If the customer has
           Charges in PMS Services (PMS)          sometimes                 the consumer court, but will            unwillingly done this, he should,
                          charges heavily for the services                  hardly find judgment in his             after depositing the amount in the
                          even when there is a loss. One can                favour as offer documents               account, contact MF branch official
                          request his fund manager/company                  mentions about these facts.             and ask him to buy the units on a
                          to remove these charges or stop                                                           new date.
                          availing these services.

           54   MONEY MANTRA     1-15 May, 2011
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           MIGRANTS AND
                                                       So, what keeps the                         investing his small resources and try-
                                                       migrant entrepreneur                       ing to eke out his living. He still feels

                                                                                                  he is better off in US, Canada or
                                                       going? Or why are the                      Europe than managing a petty busi-
                                                       migrant entrepreneurs so                   ness in India. The chances are he can
                                                                                                  lose even his money.
                                                       successful? My                                 Recently I came across an interest-
                                                       hypothesis is that same                    ing case. I was flying from London
                                                                                                  to Mumbai, when I ran into this per-
                                                       traits which enables them                  son from India who was sitting next to
                                                       to take the risk of leaving                me. His story of an entrepreneurship
               G Ramesh                                                                           is very interesting. He found several
                                                       the comfort zone of home                   foreigners fascinated by our good old
                      anada is a young country                                                    Ambassador car. He imported four

           C          and it has a significant
                                                       to off shore that make                     Ambassador cars into London and
                      migrant population. Initially    them successful                            fully refurbished it and decked it. He
                      it was from Europe; main-        entrepreneurs. They are                    hires it out for fancy rates which is
           ly from Britain, and in the recent his-                                                many times, more than the normal
           tory from China and India. Chinese          self driven because                        rates in London and keeps an advance
           form significant population of the          society rarely encourages                  booking list also. This is really an
           migrants. It is interesting to know the                                                entrepreneurship. It is really about
           entrepreneurial traits of the migrant       such people.                               being aware of the people's interest,
           population. Generally the migrant                                                      finding value in a business proposition
           population are the risk takers. The         Canada, I could see Indians doing          and packaging it appropriately. These
           very fact that they leave their homes,      even ordinary jobs like sweeping and       are one in thousand ideas which you
           their comfort zones and move to far         maintenance. An entrepreneurship is        should not be chasing but which you
           off places is itself a risky venture even   trading future and taking high risk for    should be looking. To create this sit-
           if one is going for a job. To leave the     high return. This is what these            uation in foreign shore is quite impres-
           shores and set up an establishment in       migrants are doing. Suppose if I get       sive. Similar is the case with a Punjabi
           another state, or a country is a com-       a job in US on a three year contract       family in Vancouver which runs a
           mendable thing which not many can           at a high salary, I may not take it as I   restaurant but they have completely
           do.                                         will be still worried about post con-      repackaged the Indian dishes to suit
                                                       tract period. Not everybody is entre-      the taste of Canadians. I observed that
           The High Stakes Migrants                    preneurial. Often qualification and        his restaurant is patronized by the for-
               There was a time when a medical         experience can be a deterrent in the       eign clientele as much as ethnic crowd
           entrance exam used to be held for the       risk taking. They look for safe bets and   which is commendable.
           admissions into the US Universities         safe shores.
           and the planeloads of Indians used to                                                  Traits of a Migrant
           go to Hong Kong or Singapore to take        The Low Stakes Migrants                        The traits of a migrant overlaps
           the exams. They, no doubt go for the             On the other hand, you have           with the traits of an entrepreneur. He
           studies and but even then I would say,      migrants who go abroad hanging onto        is looking beyond his usual normal
           that at that time and age, it was entre-    some hopes and eke their way               options. He is looking for new
           preneurial. Basically they are opting       through. They end up over time set-        avenues which others may shudder.
           for an uncertain future which is what       ting up small shops, small business-       The new avenue may not be anything
           an entrepreneurship. The National           es, motels, etc. They are indeed quite     path breaking. In fact, in infrastructure
           Health Service has significant number       entrepreneurial. There is a saying that    there is a concept called green field
           of Indian Doctors. Even this fraught        nothing is more shy than a million dol-    versus brown field project. Green field
           with the risk as medical is a high risk     lar, which means the people do not         means building something ad nova
           career. They are at least the profes-       easily invest off shore unless it is at    compared to building something on
           sionals. In Heathrow Airport in             some scale and the safe bets. Here you     the existing. For example, rebuilding
           London or in Vancouver Airport in           have migrants in unfamiliar terrain        of Delhi airport is brown field com-
                                                                                                            115 May, 2011   MONEY MANTRA   55
EP-36-57akm.qxd    4/25/2011       6:42 PM      Page 48

           pared to the new airport in Bangalore     ing abroad. In fact more than los-    ing much. They have the uncan-
           which is green field project. Green       ing money the top management of       ny knack of handling uncertain-
           field projects are supposed to be         these companies will be afraid of     ties and they are great improvis-
           fraught with the high risks. For the      even losing their jobs. That is why   ers. Innovation comes later. They
           small entrepreneurs, I would even         we don't find many multination-       are street smart people who make
           setup a provision shop or a fast food     als. Whereas here we have a small     their way through. It is a debat-
           shop is a green field. This is because    time entrepreneur struggling to       able point whether it is the push
           he is still testing waters and there is   set up an establishment off shore     of India that unsettles them or the
           a government which is chipping in         on the face of all risks.             pull of Canada that lures them.
           with the viability gap funding.               So, what keeps the migrant        These exists for all of us but only
           There is hardly any subsidy these         entrepreneur going? Or why are        few of us make the choices when
           days to encourage small entrepre-         the migrant entrepreneurs so suc-     we are faced with the choices. What
           neurs. The migrants are not only          cessful? My hypothesis is that        is important is they succeed.
           in search of a greener pastures but       same traits which enables them to         Now, am I saying you have to
           are also looking for green field          take the risk of leaving the com-     migrate for you to succeed. No. All
           projects. The migrants have one           fort zone of home to off shore that   that I am saying is that you look at
           additional problem in that they           make them successful entrepre-        the qualities of the migrants and try
           have no fall back option. If they fail    neurs. They are self driven           to imbibe their qualities. You can
           in a foreign country the cost can         because society rarely encourages     make it in India itself. India is the
           be very high unlike a failure in          such people. There are always         land of opportunity of this century.
           home country. This is what deters         people to discourage. They are              (The author is Associate Professor
           many large corporates from invest-        high risk takers which is not say-                       with IIM, Bangalore)
           56   MONEY MANTRA   1-15 May, 2011
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                                  DOUBLE BONANZA: INSURANCE WITH

               BANK ACCOUNTS
                Alok Dwivedi                             Sum Insured                   (in Rs.)        exemption under Section 80-D of the
                                                         Premium                       (In Rs.)        Income Tax Act. The premium struc-
                 n an effort to woo customers, the                                                     ture for the policy is given below which

                                                         1 Lakh                        1717
                 banks have decided to provide           2 Lakh                        3259            is inclusive of service tax.
                 health and personal accident            3 Lakh                        4536
                 cover with the bank accounts.                                                         Cent Savings Plus
                                                         4 Lakh                        5674
           With a view to provide entire range of        5 Lakh                        6705                 To provide value added services
           the financial services and products,                                                        to its customers, state-run Central Bank
           various banks are coming with vari-           be between insured and insurer and not        of India has launched a new Savings
           ous plans. Rahul Aggarwal, CEO of             between insured and the bank. The             Account product called Cent Savings
           Optima Insurance, says, "Banks are            validity of the cover is one year and         Plus. Any person who opened a savings
           coming up with various features with          after that it would be renewed as per         account with any of its CBS-enabled
           their accounts in order to make their         terms of the policy. It is a family floater   branches on or after June 10, 2010,
           product unique and attract customers          scheme, which covers the entire fam-          but before March 31, 2011, will be pro-
           on that basis." It is important to note       ily (the person who proposes, spouse          vided with free accident insurance
           that almost all the banks are offering        and two dependent children.) It is            cover of Rs 1 lakh. But it is important
           life insurance under group insurance          important to note here that a dependent       to note that the account holder should
           scheme to their customers. On one             girl child is given cover until she is        maintain an average quarterly balance
           hand, Punjab National Bank has                married and male dependent child is           of Rs 10000 in the account to avail
           launched PNB Oriental Royal                   covered up to the age of 26 years, if         this cover. It is important to note that
           Mediclaim policy and on the other             he is bonafide regular student.               the scheme is not applicable for mul-
           hand Central Bank of India has also                As far as the age is concerned, the      tiple accounts. The cover is allowed
           come up with plans which provide              policy covers the persons from the age        only to one SB account of the account
           cover with bank accounts. In addition,        of three months to 80 years. Not only         holder irrespective of the number of SB
           there are other banks which are provid-       this, no medical examination is               accounts he/she opens, either in one
           ing personal accident cover up to the         required for entry in the policy at any       or multiple branch or branches. The
           sum insured of Rs 10 lakh to their debit      stage. The policy charges uniform pre-        insurance is provided under the Group
           card holders.                                 mium for persons of all age groups up         Insurance Scheme and no individual
                                                         to 80 years of age. Kaushik says,             certificate will be provided to the cus-
           PNB Oriental Royal                            "Unlike other policies, we have kept          tomer.
           Mediclaim Policy                              the premium rates same for the persons             The personal accident cover pro-
                Under Bancassurance tie up with          of all the age groups." The policy offers     vided in the policy is for death only.
           Oriental Insurance, PNB has started           cashless facility at the network hospi-       Insurance cover is available for acci-
           PNB Oriental Royal Mediclaim poli-            tals and it is serviced by TPAs (Third        dent which means a sudden, unfore-
           cy. S M Kaushik, Regional Head,               Party Administrators).                        seen and unexpected physical event
           Punjab National Bank, says, "The                   It is important to note that the sum     caused by external, violent and visi-
           scheme is designed exclusively for            insured in the floater scheme means a         ble means. For the accident insurance
           PNB customers and only the account            single sum insured for all the family         cover, the bank has tied up with
           holders of PNB will be eligible to take       members, which are named in the pol-          Cholamandalam           MS       General
           cover under the scheme. The product           icy. The sum insured is the maximum           Insurance. The premium for the acci-
           would be available in all the branches        sum payable under the policy for any          dent insurance cover is borne by the
           of the bank across the country." The          hospitalisation claim covered in              bank. To avail the cover, the account
           scheme is effective from April 23,            respect of any one insured person or all      holder has to be in the age group of
           2010. Let us have a look at the vari-         the insured persons in the family joint-      18- 65 years. The policy would cover
           ous features of the plan.                     ly. The cover available under the             individuals with single accounts, how-
                All customers of the bank are eli-       scheme is for minimum sum insured of          ever in case of joint account, only prin-
           gible to take cover under the scheme.         Rs 1 lakh and maximum up to Rs 5              cipal account holder (first account
           It includes depositors as well as bor-        lakh. The policy provides income tax          holder) is covered under personal acci-
           rowers of the bank. Participation of the      exemption for the customers. The pre-         dent insurance. In case of joint account,
           customers in the policy is on volun-          mium paid under the policy through            only principal account holder should
           tary basis and the policy contract will       cheque is eligible for income tax             be aged between 18 years (complet-
           58   MONEY MANTRA   1-15 May, 2011
EP-58-72.qxd   4/25/2011      6:36 PM      Page 3

                                                                                     COVERS AVAILABLE WITH ACCOUNTS
                                                                                  Under Bancassurance tie up with Oriental Insurance, PNB
                                                                                          has started PNB Oriental Royal Mediclaim policy.
                                                                                                 All customers of the bank are eligible to take
                                                                                                                    cover under the scheme.
                                                                                    The validity of the cover is one year and after that it is be
                                                                                                           renewed as per terms of the policy.
                                                                                     The cover available under the scheme is for minimum
                                                                                   Sum Insured of Rs 1 lakh and maximum up to Rs 5 lakh.
                                                                                         State-run Central Bank of India has launched a new
                                                                                         Savings Account product called Cent Savings Plus.
                                                                                   Any person who opened a savings account with CBS on
                                                                                   or after June 10, 2010, but before March 31, 2011, will be
                                                                                   provided with free accident insurance cover of Rs 1 lakh.
                                                                                                 The personal accident cover provided in the
                                                                                                                     policy is for death only.
                                                                                        Central Bank of India is offering a Recurring Deposit
                                                                                    Scheme with free personal accident cover in association
                                                                                    with Cholamandalam M S General Insurance Company.
                                                                                                The scheme comes with a maturity period of
                                                                                                                   two years and above.
                                                                                   Also, the Axis Bank International Debit Card offers special
                                                                                                                          insurance features.
                                                                                    Axis Bank Debit Card customer is insured for risk of loss
                                                                                          due to fraudulent use of a lost or stolen or missing
                                                                                                                                    debit card.

           ed) and 65 years. In case of accounts             As far as eligibility for the scheme    ing insurance facility to its customers
           of minors, the guardian will be covered      is concerned, it is applicable for the       on debit cards. The Axis Bank
           provided he/she is aged between 18-65        accounts opened singly/jointly on or         International Debit Card offers special
           years. The period of the policy is one       after December 01, 2009. The minimum         insurance features. Axis Bank Debit
           year from the date of account open-          monthly installment for the scheme is        Card customer is insured for risk of loss
           ing. Bank may consider continuing the        Rs 500. The scheme comes with a matu-        due to fraudulent use of a lost or stolen
           scheme at its discretion. A penalty of Rs    rity period of two years and above. The      or missing debit card. In addition, con-
           100 will be charged per quarter for not      Sum Assured under the policy is double       sumer durable goods purchased using
           maintaining a minimum quarterly aver-        of the maturity value rounded off to the     the debit card are insured against fire,
           age balance of Rs 10,000. Further, if the    nearest thousand rupees subject to min-      natural calamity, burglary and house-
           account holder fails to maintain the         imum of Rs 25,000 and maximum of Rs          breaking up to 90 days from the date
           minimum average balance of Rs 10,000         5 lakh. The age of the account holder        of purchase. The cardholder is eligi-
           for three consecutive quarters, the insur-   should not exceed 65 years on the date       ble for a combined lost card liability
           ance cover will lapse.                       of opening of the account.                   and purchase protection of up to Rs
                                                             The policy comes with a number          50000.
           Recurring Deposit with                       of exclusions. To name a few - it does           But most significant facility is
           Personal Accident Cover                      not provide benefits for any death, dis-     Personal Accident Cover. In the unfor-
               Besides Cent Savings Plus, Central       ability, expense or loss incurred due        tunate event of loss of life in a mishap,
           Bank of India is offering a Recurring        to intentionally self-inflicted injury,      the customer's beneficiaries will
           Deposit Scheme with free personal            suicide or any attempt thereat while         receive the benefit of accident insur-
           accident cover in association with           sane or insane. Besides, it would not        ance of up to Rs 2 lakh. But to keep his
           Cholamandalam M S General                    also cover the injuries from war, inva-      personal accident insurance cover
           Insurance Company. In case of joint          sion and act of foreign enemy etc. Not       activated, the customer should have
           account, the personal accident cover is      only this, it would not cover any loss       made a purchase transaction in 365
           given only on the life of the first named    resulting directly or indirectly from or,    days prior to the day of the unfortunate
           person. If a person is having multiple       contributed or aggravated or prolonged       incident and maintained an average
           accounts, the coverage will be allowed       by childbirth or from pregnancy.             quarterly balance of Rs 5000 (urban &
           per person for one recurring deposit                                                      metropolitan branches) or Rs 2,500
           account only. The insurance company          Cover with Axis Bank                         (rural & semi-urban branches) as the
           will not provide certificate of insur-       International Debit Card                     case may be, in the two quarters before
           ance to individual customers.                    In addition, several banks are offer-    the date of the incident.
                                                                                                                 1-15 May, 2011   MONEY MANTRA      59
EP-58-72.qxd    4/25/2011      6:37 PM          Page 4

          BANKING WITH

          The use of internet
          banking has started
                                                 I am Ms. Jyoti Verma, Education
                                                 Officer, Kendriya Vidyalaya Sangathan,
                                                 Regional Office, Kolkata having one son
                                                 pursuing his Graduation from
                                                 Unversity of Houston, Texas, USA since
                                                                                                 I have my salary account with Axis
                                                                                                 Bank. I was not given the facility of net
                                                                                                 banking while I was opening account.
                                                                                                 When I contacted the bank , they said
                                                                                                 to fill a form to avail this facility. Almost
          taking roots in our                    2007. I as a single parent obtained per-        three weeks later, I got net banking
                                                 sonal loan of Rs. 8 lakhs (Since                password. But still I am not able to
          country and has                        Education Loan was denied) from SBI             transfer fund to my friend. It says that
          become more                            and paying the tution fee for my son for        I am not given this facility. I don't know
                                                 all 8 semesters amounting to Rs 4.5 lakh        what to do?
          prevalent over                         per semester. Please suggest whether                              --Abhinav Kumar, Agra
          recent years. With                     this amount paid by me comes under              The use of internet banking has started
                                                 any tax relaxation. If so, then kindly give     taking roots in our country and has
          the increased                          me the details.                                 become more prevalent over recent
          usage of the                                             -Jyoti Verma, Kolkata         years. With the increased usage of the
                                                 I have not come across if there is provision    internet Banking, the fraudster and
          internet Banking,                      for any kind of Tax benefits or Tax rebate      attackers have also been more active and
                                                 on education loan or education related          they keep discovering the security holes
          the fraudster and                      expenses in our country as of now.              in the software when you are connected
          attackers have also                    But United States Federal Govt. offers sig-     to the internet. It is vulnerable to mali-
                                                 nificant tax benefits to the Tax payers on      cious internet users. Therefore the banks
          been more active                       education related expenses which consists       are conscious to take additional securi-
          and they keep                          of repayment of student loans, savings          ty check to protect the interest of its cus-
                                                 for post secondary education, paying for        tomers. In the context of above, I advise
          discovering the                        post secondary education and deduction          you to contact the manger of the bank
          security holes in the                  on A/C of the interest cost etc. It is there-   where you are maintaining your A/C or
                                                 fore imperative to keep the complete            the head of the technology department.
          software when you                      record of the education related expenses        who is dealing with the activity to know
          are connected to                       in an organized manner. I may not be able       that how your internet banking can be
                                                 to explain you its implications if it has       activated and how can you undertake
          the internet.                          any relevance to the tax payer in our coun-     3rd party transfer.
                                                 try, however I will advise you to contact
                                                 some professional and seek his advice in        My brother-in-law has sent me a cheque
                                                 this context.                                   of $500 from US. I don't have any for-
           60   MONEY MANTRA   1-15 May, 2011
EP-58-72.qxd   4/25/2011      6:37 PM       Page 5

           eign currency account. How can I
           encash this cheque?
                                                                                               Home Loan Junction
                         --Akhilesh Karn, Delhi            Home Loan EMI/Rs 100,000 for a loan amount of Rs 30 Lakh as on April 21, 2011
           A foreign currency account can be            Lender's Name                      5 years           10 years          15 years           20 years
           opened by an individual in India only                                           FIXED FLOATING FIXED FLOATING FIXED FLOATING FIXED             FLOATING
           in the following circumstances:-             Allahabad Bank                     2212 2149      1449 1378      1233 1152      1119              1066
              You have received any payment             Axis Bank                          2327 2112      1553 1308      1332 1059      1244              949
              from abroad as advance against the        Bank of Baroda                     DP 2125           DP 1335           DP     1090        DP      998
              goods or services to be rendered by       Bank of Maharashtra                2137 2100         1363 1308         DP     1075        DP      965
              you.                                      Canara Bank                        DP     2125       DP     1335       DP     1105        DP      998
               RBI has permitted resident Indians       Central Bank of India              DNA    2125       DP     1349       DP     1105        DP      998
              to open such account if the amount        Corporation Bank                   2263   2137       1478   1349       1249   1105        1154    1015
              is received as earnings through the       HDFC Limited                       2199   2112       1406   1308       1168   1059        1066    949
              export of goods and services              ICICI Bank                         2432   2125       1675   1322       1469   1075        1391    965
              and/or royalty or honorarium              IDBI Bank                          2237   2137       1449   1335       1216   1090        1119    982
              against the services rendered by          Indian Bank                        2174   2137       1392   1349       1168   1121        1084    1032
                                                        LIC Housing Finance*               DP     2132       DP     1330       DP     1084        DP      975
              them or through any other lawful
                                                        Oriental Bank of Commerce          DNA    2125       DNA    1335       DNA    1105        DNA     998
                                                        Punjab National Bank               2149 2125         1363 1335         1121 1090          1032    998
              If you were Non-Resident hither-          SBI Easy Home Loan                 DP 2100           DP 1294           DP 1044            DP      932
              to and have returned back to the
                                                        PN: The rates given above are for the 1st year of the loan tenure. For the subsequent years, the interest
              country, you can open a Resident          rates vary from bank to bank. * These banks have interest rates fixed for the initial few years and there-
              Foreign Currency (Domestic)               after then prevailing rate are applicable.The home loan rates are indicative rates, which may change
              account.                                  according to the credit profile of the customer. Fixed Interest Rates are usually subject to reset clause of
                                                        two to five years and vary from bank to bank. However, fixed Interest Rates of ICICI Bank, HDFC
            Otherwise a resident Indian can-not         Limited and Axis Bank remain fixed during the entire tenure of the loan
           open a foreign currency A/C in his           DP - Do Not Provide       DNA: Data Not Available
           /her name. If you have received the                    Fixed Deposit Interest Rates (upto - Rs. 15 lakhs as on 21 April. 2011)
           cheque from your Brother-in-law as           BANKS                   6mths - < 1       1 – < 2 Year        2 – < 3 Year        3–<5           5 Years &
           a gift then you can deposit the cheque                               Year                                                      Year           above
           in your account and the Bank will col-       Axis Bank               7.25% - 8.25% 9.00% - 9.25%           8.50%               8.50%          8.50%
           lect the money as per usual practice         Bank of Baroda          6.25% - 7.50% 9.00% - 9.35%           9.00%               8.50% -        8.50%
           and credit the amount to your account                                                                                          9.00%
           at prevailing exchange rate after            Bank of India           8.00%             9.00% - 9.25%       8.25%               7.75% -        8.50% -
           deducting their service charges.                                                                                               8.25%          8.75%
                                                        Bank of                 6.50% - 7.25% 8.55%                   8.55%               8.30% -        8.00% -
           I have appeared for my 12th exam-            Maharashtra                                                                       8.60%          8.30%
           inations and travelling from one             Canara Bank             7.75%             8.75% -9.10%        8.75% -9.10% 8.50% -               8.75% -
           city to the other in connection with                                                                                    9.25%                 9.50%
           enginnering and medical entrance             Central Bank of         8.50%             9.00% - 9.25%       8.75%               8.80%          8.80%
           examination. I estimate that                 India
           around Rs. 75000 will be spent on            Corporation Bank        9.15%             9.15%               9.25%               9.25%          9.00%
           application forms, coaching, trav-           Dena Bank               8.00%             9.00%               8.75% - 9.00% 9.00%                8.75%
           elling, lodging, food etc. Can I avail
                                                        Development Credit Bank 6.50%             7.75% - 9.00%       7.75% - 8.50% 7.75%                7.50%
           an educational loan for the pur-
           pose? I am thinking of repaying it           Dhanlaxmi Bank          8.50%         8.50% - 9.50%           8.75%         8.75%                8.25%
                                                        HDFC Bank               6.00% - 7.75% 8.25% - 8.50%           8.50% - 9.25% 8.25%                8.25%
           by another loan, which I'll be tak-
           ing for my admissions.                       ICICI Bank              6.00% - 7.50% 8.25% - 9.25%           8.50% - 9.25% 8.75%                8.75%
                              --Ketan, Mumbai           IDBI Bank               7.75% - 8.00% 8.00% - 9.25%           9.00%         9.00% -              8.75% -
                                                                                                                                    9.25%                9.00%
           As of now there is no scheme in force
                                                        Indian Overseas Bank 7.25% - 8.25% 8.75% - 9.25%              8.75%               9.00%          9.00%
           to fund your expenses for seeking
           admission to professional courses.           IndusInd Bank           6.25% - 8.50% 8.00% - 9.50%           8.75% - 9.50% 8.75%                8.75%
           But if your parent desires they can          Kotak Mahindra Bank     6.25% - 8.25% 9.00%- 9.40%            9.25%               9.00%          9.00%
           approach the Bank for personal loan          Oriental Bank of        7.25% - 7.50% 9.00% - 9.25%           8.75% - 9.00% 8.50%                8.50%
                                                                                                                                                                        Source: Apnapaisa Research Bureau

           which Bank may consider as per               Commerce
           extant rules and within their                State Bank of India 6.00% -7.75% 8.25% - 9.25%                8.75% - 9.25% 8.25%                8.50% -
           eligibility.                                                                                                                                  8.75%
                                                        Syndicate Bank          7.00% - 8.25% 8.75%                   8.75%               9.00%          8.75%

           (Virendra Kumar Dhingra is a post-grad-      The Federal Bank        6.25% - 8.25% 9.60%                   9.25%               9.00%          8.75%
           uate in Commerce with over forty years
           of experience in banking. He retired as      Union Bank of India 7.50%                 8.00% - 8.60%       8.75%               8.75% -        8.50% -
           Executive Director, UCO Bank. Currently,                                                                                       9.15%          9.40%
           he is Director, Industrial Investment Bank   Vijaya Bank             7.50%             9.00%               9.00%               8.50% -        8.25%
           of India Ltd.)                                                                                                                 9.00%
                                                                                                                             1-15 May, 2011   MONEY MANTRA         61
EP-58-72.qxd    4/25/2011      6:37 PM          Page 6

           MUTUAL FUND

                                                          A DIFFERENT NATURE OF

           DISTRIBUTING GAINS                            Usually there is a lower                     is measured in terms of the Net Asset
                                                                                                      Value (NAV) of the fund will adjust

                                                         rate of tax for the long                     accordingly so the value will remain
                                                         term capital gains and at                    intact. Further there is no question
                                                                                                      of servicing the higher client base in
                                                         the same time there can                      the case of a mutual fund as this is
                                                         also be use of the                           just a mathematical number which
                                                                                                      determines the NAV so a bonus is not
                                                         indexation benefit for the                   a signal of the increased strength of the
                                                         various debt oriented                        business.
                Arnav Pandya
                                                         funds if this is beneficial                  Ratio
                  here are several features that are                                                      The real point of the entire bonus

           T      not commonly witnessed for
                  the mutual funds and this
           makes understanding of them slight-
                                                         for the investor. Few debt
                                                         schemes have such a
                                                         bonus option and they
                                                                                                      issue is in terms of the ratio that will
                                                                                                      be announced by the mutual fund.
                                                                                                      This is announced in the form of a spe-
           ly difficult for the investor. Using the                                                   cific number of units for the existing
           knowledge of the same terms used              provide the choice for the                   units held. So this has to be considered
           elsewhere might not give a proper idea                                                     very carefully because it will give an
           to the investor and this can lead to an
                                                         investor to gain from the                    idea about the number of new units
           incorrect interpretation that can influ-      bonus that would be                          that will be available for the investor
           ence the decision making process.                                                          and how their actual holdings will rise
           This is the reason why the investor has       announced by the mutual                      after the bonus units have been allot-
           to be alert and ready to understand           fund.                                        ted. For example a fund can announce
           the actual meaning of the various                                                          that there will be 2 units allotted for
           terms. Here is a look at the issue of                                                      every 10 units held or it could be 1 unit
           bonus units.                                  allotment on the value of the hold-          for every unit held and once this point
                                                         ings because the value of the share will     is understood carefully there will be
           Bonus                                         adjust according to the ratio in which       a proper interpretation of the man-
               The term bonus is well known by           the shares are issued.                       ner in which the things will progress
           the investors because of its use in the                                                    from there on. There is another impli-
           context of the shares. This is consid-        Basic difference                             cation of the bonus units allotted
           ered as a beneficial move for the                 There is a difference when it            because the NAV will then adjust
           investor and hence the news of the            comes to interpreting the issue of           according to the ratio announced.
           bonus is received with great enthusi-         bonus shares in case of a mutual fund        This will round up the various
           asm. This is a process where the              holding. The manner of the operation         impacts that the bonus ratio will
           investor gets free shares for the exist-      of the entire process is the same as in      bring for the holding of the investor.
           ing shares held in case of a company          the case of the equity shares. It states
           and for a mutual fund investment it           that there is allotment of the extra units   Not common
           means allotment of extra units for free       to the investors without any cost that            One of the first things that the
           due to the existing units held by the         adds to the existing holdings of the         investor will realise is that bonus
           investor. In case of a company the            investor. At the end of the process,         shares might be a very common fea-
           equity share capital of the company           the investor will find that their hold-      ture but when it comes to the mutu-
           increases by the amount of the bonus          ings have increased in terms of num-         al fund units, it is not common to find
           shares and this is considered as a sig-       ber of units. However the immediate          that such units have been allotted.
           nal that the company will be able to          impact of the bonus units remains the        There is a specific reason why this
           service the larger amount of the equi-        same as in case of the shares because        is the situation. There are various
           ty that has been issued. There is how-        the value of the holdings will remain        plans that are present in a mutual
           ever no impact of the actual bonus            the same. The price of the fund which        fund investment and this will include
           62   MONEY MANTRA   1-15 May, 2011
EP-58-72.qxd   4/25/2011      6:37 PM     Page 7

                                                                                                All about bonus
                                                                                      The bonus units in mutual fund means allotment of
                                                                                      extra units for free due to the existing units held by
                                                                                      the investor.
                                                                                      The investor will find that their holdings have increased
                                                                                      in terms of number of units In case of a company the
                                                                                      equity share capital of the company increases by the
                                                                                      amount of the bonus shares and this is considered
                                                                                      as a signal that the company will be able to service
                                                                                      the larger amount of the equity that has been issued.
                                                                                      The bonus units allotted because the NAV will then
                                                                                      adjust according to the ratio announced. This will
                                                                                      round up the various impacts that the bonus ratio will
                                                                                      bring for the holding of the investor.
                                                                                      When it comes to the mutual fund units, it is not com-
                                                                                      mon to find that such units have been allotted due
                                                                                      the fact that there is no provision to witness the allot-
                                                                                      ment of the bonus units.
                                                                                      Bonus plans are meant to ensure that the individual
                                                                                      is able to get the benefit of the tax provision where-
                                                                                      by if the investment is held for a period of more than
                                                                                      12 months then the gains from the investment will
                                                                                      be converted to long term capital gains and the rates
                                                                                      are less there
                                                                                      Indexation benefit can be availed for the various debt
                                                                                      oriented funds.

           the dividend plan and the growth            term capital gains and at the same             In such a situation, the fund
           plan. Each of these plans have their        time there can also be use of the          might want to ensure that the growth
           specific features and hence they will       indexation benefit for the various         option NAV does not go too high as
           act according to those features and         debt oriented funds if this is benefi-     it might keep away investors from
           usually there might not be any pro-         cial for the investor. Few debt            considering this as an investment
           vision for the giving of the bonus          schemes have such a bonus option           option. One has to note that all
           units. Since there is no provision, it      and they provide the choice for the        this is just about the perception
           might not be possible to witness the        investor to gain from the bonus that       because the investor in the real
           allotment of the bonus units. This          would be announced by the mutual           sense will have no impact in terms
           makes it important for the investor to      fund.                                      of the actual investment when they
           look at the conditions when the bonus                                                  invest in the growth option or the
           units will be available.                    Other funds                                dividend option as the ultimate
                                                           There is another condition             movement of the value of the invest-
           Bonus plan                                  under which the bonus part comes           ment will be the same. In order to
               One of the obvious places where         into action for the investor and this      tackle this kind of situation, the fund
           such a thing is available is the invest-    needs some understanding. Usually          might declare a bonus in the growth
           ment that actually provides for a           there are two options available for        option at regular intervals and this
           bonus plan. There are special options       investment and this is the dividend        will keep the NAV low. The other
           that are given by the mutual fund           and the growth option. At the same         choice that the fund has is to have
           and an example is the dividend              time, there are several funds that are     only one investment option for these
           option that gives out dividends on a        long term in nature and this will          long term investments and there is no
           regular basis like a monthly or a quar-     include those that are targeted at the     dividend declared but just a bonus
           terly basis. Similarly there is also a      children or these might be retire-         that is declared which plays the role
           bonus option available in some cases.       ment oriented fund and so on. These        of the distribution of the income
           This is meant to ensure that the indi-      funds will have a growth option            earned. Usually in such funds the
           vidual is able to get the benefit of        where the NAV keeps rising as the          payout is not possible so it is just a
           the tax provision whereby if the            gains are accumulated as the time          case of the entry in the accounts and
           investment is held for a period of          passes. This will lead to a higher         the investor's holdings will also shift
           more than 12 months then the gains          NAV over a period of time and this         accordingly but without any actual
           from the investment will be convert-        might seem to go too high and this         payout coming.
           ed to long term capital gains. Usually      might be discouraging for the
                                                                                                                    (The writer is Chief Coach
           there is a lower rate of tax for the long   investor.                                                         at FinCare Consulting)
                                                                                                              1-15 May, 2011 MONEY MANTRA 63
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                INSURANCE GURU

                                      I have recently bought few home durables             cost of premium? If yes, then by how much?
                                      like TV, Refrigerator etc. I want to take an                                    - Harsh, Mumbai
                                      insurance policy for all these products togeth-
                                      er. Is it possible? If yes, please suggest few       In case of building insurance, an insurance com-
                                      schemes that are available in the market.            pany will never insure your flat as a standalone.
                                                       -Mahesh Chandra, Varanasi           The society needs to buy the same insurance and
                                      We would recommend you to go for household-          then only the insurance company will offer to
                                      er policy that will cover the contents of your       cover the structure of the apartment. This will
                                      home against damage of domestic appliances           obviously be available after the construction is
                                      due to natural calamities and more. It will also     completed.
                                      cover you for burglary and theft for the contents.
                                      A 1 lakh policy may cost you in the range of         I have a term insurance policy of five lakhs
                                      Rs. 300 to Rs. 400. Most of the general insur-       and an endowment policy of three lakhs.
        In case of building

                                      ance companies have these policies. You can buy      Kindly tell me whether in case of eventuali-
        insurance, an                 these policies online from the official website      ty my nominee will get the benefit of both
        insurance company             of the companies like ICICI Lombard, Oriental        the policies or not?
                                      Insurance, Bajaj Allianz etc.                                             - Suman, Gandhinagar
        will never insure
        your flat as a                I had taken a car insurance when I bought my         Both the insurance policies will be paid to your
        standalone. The               car. I now plan to sell it and buy a new car.        nominee in case of eventuality. In case of term
                                      What will happen to the earlier insurance            insurance, the nominee will get the entire sum
        society needs to buy          plan? As my car is 2 years old and I have never      assured which is five lakhs. In case of endow-
        the same insurance            claimed any insurance, will that bring me any        ment policy, your nominee will get Rs. 3 lakhs
        and then only the             benefit with the new car?                            and also all the accumulated bonus of the poli-
                                                                - Amulya, New Delhi        cy till then.
        insurance company             You can certainly transfer the existing no claim
        will offer to cover           bonus to your new car. This will give you a dis-     I had bought a ULIP policy two years back.
        the structure of the          count in the insurance premium for your new car.     After depositing two annual premiums, I am
                                                                                           finding it difficult to pay the next premium.
        apartment.                    I have bought flat in a 60 floored apartment.        Can I surrender this policy.
                                      As I am investing more than a crore of rupees,                             -Rudra kumar, Calcutta
                                      it is important to get an insurance cover for        To surrender your insurance policy, you will
                                      the house which is still under construction?         have to complete 3 policy years of which you
                                      What kind of insurance should I take to pro-         have completed two years. You need to pay pre-
                                      tect it (from natural disasters such as an           mium for one more year in order to acquire sur-
                                      earthquake and fire etc)? As I am living in a        render value. Now if you discontinue the plan,
                                      skyscraper, will that make a difference to the       you will incur capital loss, that is premium that
           64   MONEY MANTRA   1-15 May, 2011
EP-58-72.qxd   4/25/2011      6:37 PM      Page 9

           you have paid may forfeit (depend-                                    Medical Insurance
           ing on the terms of your specified
                                                            Age : 30 years Sum Insured Rs.300,000 Compare your Health Insurance Policy
                                                        Name of   Name of Premiu Renewabl Pre Existing                       Sub Limts
           My father may have to get operat-            the       the Policy m   e Upto   disease
           ed in his heart, I have medical fam-         Companies                Age      Covered
           ily floater insurance of around 2
                                                        Bharati        Smart        2,729/- 70              4 continuous Room rent of 1% of Sum
           lakhs from the company I work with
                                                        AXA            Health                               policy year  Insured per day
           and on the other hand my brother                            Plan
           has medical insurance for my father                         Premium
           of around 1.5 lakhs. The operation           ICICI          Compreh 3,046/- 70                   4 continuous No Sub- Limit
           cost will be around 10 lakh rupees,          Lombard        ensive                               policy year
           my question is could we (my broth-                          Health
           er and myself) both claim reim-                             Insurance
           bursement so that at least we get cov-       United India Mediclai 3,609/- Life Time Covered      Room rent 1% of Sum Insured
           ered for 3.5 lakhs of total 10 lakh          Insurance m Policy                      from day one per day or the actual amount
           rupees. Also I am planning to buy a                       Platinum                   (Congenital whichever        is      less.
           mediclaim for my family (which cov-                                                  diseases not I.C.U expenses : Room rent
           ers myself, parents, wife and a baby),                                               covered)     2% of Sum Insured per day or
                                                                                                             actual amount whichever is
           question is again on any mishap                                                                   less.
           could I use both insurance to claim
           (company provided insurance as               Apollo         Easy       3,626/- Life Time 3 continuous No Sub- Limit
           well as my own mediclaim).                   Munich         Health                       policy year
                       -Rohit Sharma, Mumbai                           Individual
            Yes, you and your brother will be able                     Standard
           to claim the respective eligible health      Star Health Medi            3,640/- 80               4 continuous Room rent of 2% of Sum
           insurance amount. Normally one of the                    Classic                                 policy year   Insured per day maximum to
           companies can be made to act as the                                                                            Rs 4,000/-
           main company to which the original           HDFC Ergo Health   3,653/- 65                        4 continuous No Sub- Limit
           documents can be submitted. They are                   Suraksha                                  policy year
           also informed about the coverage in the      Future         Health   3,932/- 70                   4 continuous Room rent 1% of Sum Insured
           other policy. Duplicate documents can        Generali       Suraksha                             policy year   per day and I.C.U expenses
           be submitted to the other company. The                      Golden                                             :Room rent 2% of Sum
           first company can process the case and                                                                         Insured per day to a maximum
                                                                                                                          of 35%. Surgeon fees up to
           pay its pro rata share of the claim and                                                                        35% of the Sum Insured per
           provide certified copies of the docu-                                                                          claim. OT Charges : Up to
           ments for other insurance company                                                                              40% of the Sum Insured per
           which too can then pay its share of                                                                            claim.
           claim. The approved claim amount will
           be shared 4:3 between your company's
                                                        National       Mediclai 3,988/- 80                   4 claim free Room rent 1% of Sum
           insurer subject off course to the expens-    Insurance      m Policy                             policy year   Insured Per day to a maxi-
           es being approved by the two compa-                                                                            mum of Rs 5000.I.C.U
           nies and within their overall limit of Rs.                                                                     expenses :Room rent 2% of
           2 lacs and Rs. 1.5 lacs respectively.                                                                          Sum Insured per day to a
           As to answer your second query, it                                                                             maximum of Rs.10,000.
                                                                                                                          Surgeon fees : Maximum
           would be advisable to take separate
                                                                                                                          limits per illness- 25% of
           individual mediclaim policies for all                                                                          Sum Insured. OT Charges :
           your family members. Please note here                                                                          Maximum limits per illness-
           that getting a medical policy for your                                                                         50% of Sum Insured
           father looking at his health condition
                                                                                                                                                               Source: Apnapaisa Research Bureau

           may be difficult. And even if the com-       IFFCO          Individual 3,990/- 70                Not covered Room rent 1% of Sum
           panies agree to offer a policy to your       Tokio          Medishiel                                        Insured Per day
           father, then the cost of operation for                      d                                                I.C.U expenses :Room rent
           the pre existing diseases may not be                                                                         2.5% of Sum Insured per

           covered for at least a period of 3 to 4
           years as mentioned in the policy.            Cholamand Individual 4,377/- 69                     3 continuous OT Charges: Maximum limit
                                                        alam MS   Health                                    policy year  per illness - 15% in AC
                                                        General                                                          Single Room Upwards.
            (Harsh Roongta is CEO, Apnapaisa.com a
                  search comparison engine for loans,
                insurance and investments. He can be    All policies come with cashless facility in the network hospital, specific to each company
                                                        * Premium is inclusive of service tax
           reached at moneymantra@apnapaisa.com)
                                                                                                                          1-15 May, 2011   MONEY MANTRA   65
EP-58-72.qxd    4/25/2011      6:37 PM          Page 10


                                                          SARAL NO MORE, NOW IT IS

           SAHAJ AND SUGAM                                certificates with the return to enable the     the Income Tax Act on their own on
                                                          department to check their calculations         plain sheets and then fill up the com-
                                                          and the claims of TDS etc. Thus, though        puted final figures in the relevant
                                                          the filled return ran into the several         columns of the return. This required pro-
                                                          pages with its enclosures and attach-          fessional help. Besides, since the
                                                          ments etc, at some psychological level         enclosed working sheets were not in any
                                                          there was a satisfaction for the taxpay-       structured format, these returns posed
                                                          ers that the return is simple.                 problems in the computerised process-
                                                               The idea of a single page return has      ing. Therefore, in 2001, a new form ITS-
                                                          caught the fancy of the taxpaying pub-         3 was introduced which too was called
                                                          lic since then. Naturally the policy mak-      one-page SARAL but which had seven
                SS Khan                                   ers feel happy to respond. It does not         optional standardized Schedules A to
                                                          bother anyone that the return form is a        G attached to it, to guide the taxpayer
                     he income tax department has         document that seeks to collect infor-          to compute head-wise incomes which

           T         notified the forms in which
                     returns of income for the
                     assessment year 2011-12 i.e.
           for the incomes earned between April
           2010 and March 2011 are to be filed
                                                          mation from the taxpayer which is need-
                                                          ed to ensure compliance with the tax law
                                                          (i.e. the Income Tax Act). Therefore, the
                                                          simplicity or otherwise of the return
                                                          form is dependent on the simplicity of
                                                                                                         can then be entered on the one- page
                                                                                                         Form. The very next year it was felt
                                                                                                         that the information in these returns is
                                                                                                         too scanty for any meaningful effort at
                                                                                                         widening and deepening of the tax base
           by different categories of the taxpay-         the tax law for the compliance of which        and therefore, on recommendations of
           ers. The news is that SARAL phrase-            it is to required to be furnished. A logi-     a departmental committee; the return
           ology is out and instead, SAHAJ and            cal question then is that if that law itself   forms were changed. These now had
           SUGAM are the new favoured nomen-              remains complicated can the return form        multiple Annexures requiring the tax-
           clature of the Finance Ministry.               be simple? Or a still more basic question      payers to furnish the particulars need-
                Every Finance Minister, under-            that if the business and commercial            ed to compute head-wise incomes and
           standably, nurtures a desire to make           activities and the methods of earning          deductions etc. A public outcry fol-
           life simple for the average taxpayer and       income becomes complex, multifarious,          lowed. The Government announced that
           to also leave a mark on the collective         layered and the demands for the spe-           the Individual taxpayers may continue
           memory of the taxpaying public. What           cial tax treatment by way of the exemp-        to file their returns in the earlier SARAL
           better way of doing this than assigning        tions/ deductions/ weighted deductions/        forms. In 2003, the new Finance
           a simple name to the return form - which       area and activity based deductions/ spe-       Minister Shri Jaswant Singh introduced
           is the only interaction of most of the tax-    cial rates, etc. that keeps multiplying.       a new Form 2E for the individual tax-
           payers with the Income Tax Department.         Can the tax law really become simple?          payers having income from salary,
           The practice of assigning a catchy name        But neither the policymakers nor the           house property and 'other sources' but
           to the return form was started by Shri         taxpayers answer this, if the problem can      no capital gains. This was named Naya
           Yashwant Sinha who first assigned the          be camouflaged in a return form which          SARAL and had the same problems of
           name SARAL to one of the return forms          is simple in appearance and named              being unhelpful in filling it as the ear-
           in 1999. That form otherwise known in          SARAL, even if it requires a tax expert        lier version. But it had a comparative-
           the bureaucratese as Form 2D, was a one        to fill it because the tax law remains         ly longer life till 2006 when the new
           page form meant for the people having          complicated (and will remain so even           Government came up with another vari-
           income from the salary and interest etc.       after the new Direct Taxes Code).              ant called Form 2F. Now this was named
           Since this was a single page form the               To solve the conundrum of creat-          Revised SARAL. This ran into three
           taxpayers who were supposed to make            ing a simple return form for a compli-         pages including six Schedules and
           their own calculation of the income            cated law, the one page SARAL form,            another three pages of the instructions
           under different heads like "salary" and        with five page long instructions to fill       for filling it. One of these Schedules
           "other sources" and fill up the final fig-     it, was devised in 1999. The noble idea        was called Cash Flow Statement requir-
           ures in the relevant columns of the return     behind SARALwas that the form should           ing particulars of the personal expens-
           form. In support of these figures they         be so simple that a taxpayer should be         es, investments, bank balance, and bor-
           were supposed to attach the working            able to himself fill it. However, this form    rowings etc. The department said the
           sheets of these calculations as also the       requires the tax payers to first compute       new form overcomes difficulties in the
           salary certificate (Form 16) and the TDS       taxable income and deductions etc as per       earlier form like lack of space, require-
           66   MONEY MANTRA   1-15 May, 2011
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                                         The EIGHT NEW
           Eight new return forms have been notified for the current financial year. No enclosure or
           attachments including working sheets, statement of accounts, audit reports and TDS cer-
           tificates need be filed with any of these eight types of returns. The same form can be
           used for electronic filing of the returns by respective category of taxpayers.
           ITR-1 SAHAJ - This is basically a two-page form, no different from the original SARAL,
           in which the head-wise incomes and deductions have to be computed separately and
           the final results filled in the relevant columns. It can be used only by the Individuals who
           have Income from Salary/pension; or one house property with no brought forward loss under
           the head "house property"; or income under the head "Other Sources" except winnings
           from lottery or income from race horses. Persons having business income or more than
           one house property or capital gains are not eligible to use this form.
           ITR-2 -This is an exhaustive seven page return with Schedules for computing income under
           various heads, meant for Individuals (to whom Form ITR-1 Sahaj does not apply i.e. if
           they have more than one house property or lottery income etc) and HUF's who do not
           have any income under the head "Business or Profession".
           ITR-3 - This is again an exhaustive form, meant for Individuals/HUF's who are partners in
           firms but do not carry out any proprietary business or profession of their own.
           ITR-4 - This is a 21 page long return form with various Schedules for computing income
           under different heads, meant for individuals and HUFs having income from proprietary busi-
           ness or profession.
           ITR-4S Sugam -This is an innovation introduced this year. Under Sections 44AD and 44AE
           of the Act ,the net incomes of certain categories of contractors and transporters carrying
           out these businesses as individuals or HUF's, can be computed on presumptive basis @
           eight percent of their gross receipts. These taxpayers can file their returns in SUGAM
           form, which is on the same line as the new SAHAJ or the old SARAL. In other words the
           facility of SARAL returns has been extended to civil contract and transport businesses
           assessed on presumptive basis.
           ITR-5 - This form is meant for Registered firms, Associations of Persons and Body of
           ITR-6 - This is an exhaustive form, meant for Corporate taxpayers other than companies
           claiming exemption under Section 11.
           ITR-7 - Finally the last Return Form ITR-7 is meant for Charitable Trusts, Political Parties,
           Scientific Research Associations, Educational Institutions and Universities etc claiming

           ment of Annexures, inadequate                   changes. Naturally it had all the advan-        for e-returns which are being filed
           explanatory instructions, difficulty in         tages and disadvantages of the origi-           without digital signatures. ITR-V
           matching information collected                  nal. Now, it appears the SARAL                  forms sent by Registered Post or
           through third party returns. This time,         phraseology has run its full course, and        Courier are not accepted. These ITR-
           the outcry invited the attention of the         we have SAHAJ and SUGAM to con-                 V forms should also not be filed in
           Standing Committee of Parliament on             tend with.                                      the local Income Tax Offices. In case
           Finance, which found these forms                    Where a return is being filed in the        ITR-V is furnished after 120 days the
           cumbersome         and     asked      the       electronic mode but without digital sig-        electronic return is deemed to have
           Government to continue with the ear-            nature, a manually signed verification          never been filed.
           lier ones. Consequently the Schedules           form called ITR-V gets generated on                 Furnishing of a bank account
           were omitted from the Naya SARAL                successful uploading of e-Return.               number has been made mandatory
           in 2007. Simultaneously another series          This is an acknowledgement cum                  in all return forms. In case you are
           of the return forms ITR-1 to ITR-8              verification form for the e-return.             claiming the refund, take extra care
           were notified for other categories of the       The ITR-V Form can be printed by                to correctly fill the account number.
           taxpayers with different sources of             the tax payer, signed and separately            You can also opt for the refund
           income. The year 2010 saw a yet new             sent in paper form through ordinary             through Electronic Clearance Scheme,
           Finance minister Shri Pranab                    post or speed post to the Income Tax            in which case it will be credited direct-
           Mukherjee, who tried his hand at mak-           Department - CPC, Post Bag No -                 ly to your bank account under intima-
           ing the tax returns less cumbersome             1, Electronic City Post Office,                 tion to you.
           and tedious. The result was called              Bangalore - 560100, Karnataka
           SARAL-II - a two-page form. This was            within 120 days after the date of               (The writer has served as Member,
                                                                                                           Central Board of Direct Taxes,
           essentially the same as the original            transmitting the data electronically.           Government of India. He is winner of PM’s
           SARAL except for a few cosmetic                 This will complete the filing process           Award for Excellence in Public administration.)

                                                                                                                      1-15 May, 2011   MONEY MANTRA      67
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                                                                                         NOBODY IS ABLE TO

               BELL THE CAT                               the notice period can be waived; (c)          Mr Sinha, by July 2007, he had paid Rs
                                                          the procedure for taking possession of        1,23,000 and had an overdue of Rs
                                                          the security; (d) a provision regard-         43,495 when his truck was forcibly
                                                          ing the final chance to be given to the       repossessed by the bank, without any
                                                          borrower for the repayment of a loan          due notice as required under the law.
                                                          before the sale / auction of the prop-        When Mr Sinha asked for release of the
                                                          erty; (e) the procedure for giving            vehicle, he was told that he needed to pay
                                                          repossession to the borrower and (f)          the entire amount in one go, in order to
                                                          the procedure for sale / auction of the       get the vehicle back.
                                                          property. A copy of such terms and                  At this stage, the consumer sought
                Pushpa Girimaji                           conditions must be made available to          the help of the District Consumer
                                                          the borrowers". It also reminded              Disputes Redressal Forum , Dhanbad,
                     ome years ago, the Supreme           NBFC's of its earlier communication           which held in its order of July 2007,

           S         Court came down heavily on
                     the banking and non-banking
                     financial companies for vio-
           lating the laws of the land and harass-
           ing the consumers. The strong con-
                                                          of October 10, 2007, wherein it had
                                                          underscored the need for NBFCs to
                                                          "invariably furnish a copy of the loan
                                                          agreement along with a copy each of
                                                          all the enclosures quoted in the loan
                                                                                                        that when the complainant had already
                                                                                                        paid Rs 1,23,000, repossession of the
                                                                                                        vehicle for the remaining overdues of
                                                                                                        Rs 43,495 was not proper and amount-
                                                                                                        ed to deficiency in the service rendered
           demnation of these financial institu-          agreement to all the borrowers at the         by the bank.
           tions from the highest law court in            time of sanction / disbursement of                  Aggrieved, the bank filed appeals,
           the country was in response to the             loans, which may form a key compo-            first before the Jharkhand State
           complaints of re-possession of the             nent of such contracts/loan agree-            Commission and later before the
           pledged vehicles by financial institu-         ments." Similar instructions have also        National Consumer Disputes Redressal
           tions without notice and of intimida-          been given to the banks.                      Commission. The main contention of
           tion and harassment of consumers by                  Even though in the recent years,        the bank here was that repossession was
           recovery agents.                               the cases of intimidation and the attack      its right under Clause 15.2 of the loan
                Subsequently, the financial sector        on the borrowers by the recovery agents       agreement and it was only exercising
           regulator, the Reserve Bank of India           seem to have come down, instances of          this right.
           issued detailed instructions to the            the re- possession of the pledged prop-             The National Commission howev-
           banks and non-banking financial insti-         erty, without any notice to the consumer      er disagreed. It pointed out that the ques-
           tutions on what constitutes fair prac-         or even sale of the recovered goods           tion here was not about the right of the
           tices in respect of the recovery of loan       without the notice to the consumer, con-      bank to repossess, but of the manner in
           and repossession of pledged proper-            tinue to be reported. In fact, today, there   which it was done. First and foremost,
           ties. The regulator also issued detailed       are financial counseling centres through      this was a case of forcible repossession
           guidelines on hiring and training of the       which the consumers who face some             of the financed vehicle and such forcible
           recovery agents.                               hardship in respect of the repayment of       repossession was in clear violation of the
                 In fact in its circular of April 24,     dues can get the repayment re-scheduled       law as laid down by the Supreme Court
           2009. sent to NBFCs on the repos-              or even get the interest rate reduced in      in the case of ICICI Bank Limited V s
           session of pledged property, the reg-          genuine cases of the difficulty. But obvi-    Prakash Kaur and others ( (2007) 2 SCC,
           ulator reminded them of its earlier cir-       ously, the financial institutions prefer      711) .
           cular of September 28, 2006 on the             to repossess the vehicle than send the              The Supreme Court had said in this
           subject and gave further clarifica-            consumer for counseling.                      case that : "Before we part with this mat-
           tions.. For example, it said " NBFC's               A recent case that came up before        ter, we wish to make it clear that we do
           must have a built in re-possession             the apex consumer court, the National         not appreciate the procedure adopted
           clause in the contract/loan agreement          Consumer        Disputes         Redressal    by the bank in removing the vehicle from
           with the borrower which must be                Commission, is an example. Here, the          the possession of the writ petitioner. The
           legally enforceable. To ensure trans-          complainant, Mr Birendra Kumar Sinha,         practice of hiring recovery agents, who
           parency, the terms and conditions of           had purchased a Tata truck with a loan        are musclemen, is depreciated and needs
           the contract/loan agreement should             from IndusInd bank in 2006. The loan          to be discouraged. The bank should
           also contain provisions regarding: (a)         was required to be paid in 48 EMIs of         resort to the procedures recognized by
           notice period before taking the posses-        Rs 27,500 each.                               the law to take the possession of the vehi-
           sion; (b) circumstances under which                 According to the complaint filed by      cles in cases where the borrower might
           68   MONEY MANTRA   1-15 May, 2011
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                                                  NOBODY IS LISTENING
               Regulatory efforts to tame Banks and NBFC's
                RBI has issued instructions to the banks and NBFC on fair practices in respect of the recovery of loan and
                repossession of pledged properties.
                NBFCs must have a built in re-possession clause in the contract/loan agreement with the borrower which
                must be legally enforceable.
                To ensure transparency, the terms and conditions of the contract/loan
                agreement should also contain provisions regarding: (a)
                notice period before taking the possession; (b) circum-
                stances under which the notice period can be waived;
                (c) the procedure for taking possession of the securi-
                ty; (d) a provision regarding the final chance to be given
                to the borrower for the repayment of a loan before
                the sale / auction of the property; (e) the procedure
                for giving repossession to the borrower and (f) the pro-
                cedure for sale / auction of the property. A copy of such
                terms and conditions must be made available to the
                It should invariably furnish a copy of the loan agreement
                along with a copy each of all the enclosures quoted in
                the loan agreement to all the borrowers at the time of sanc-
                tion / disbursement of loans, which may form a key com-
                ponent of such contracts/loan agreements.

               There are financial counseling centers through
               which the consumers who face some hardship
               in respect of the repayment of dues can get
               the repayment re-scheduled or even get the
               interest rate reduced in genuine cases of the

               Law Commission underscored the need for a
               separate hire purchase law to regulate the hire
               purchase transactions.

               The apex court has come down heavily on the
               banking and non-banking financial companies
               for violating the laws of the land and harassing
               the consumers by way of forcible re-possession
               of the pledged vehicles and intimidation by recov-
               ery agents through several judgments.

           have committed default in the payment             decided on February 2, 2011) While           1972      was      never      enforced.
           of the instalments instead of taking resort       doing so, it also quoted an earlier order    Subsequently, the government came up
           to the strong arm tactics"                        of the National Commission in the case       with the Hire Purchase Amendment
                The Commission here also point-              of Citicorp Maruti Finance Ltd Vs            Bill of 1989, which sought to protect
           ed out that the bank had not only resort-         S.Vijaylaxmi , where it had taken strong     the consumers from the unfair practices
           ed to forcible re-possession which was            objection to the banks acting against        by the debtors and also forcible, ille-
           against the norms prescribed by the RBI           the law of the land and using force to       gal re-possession of the goods, but
           and the Supreme Court, but had also auc-          repossess the vehicle.                       that again got buried forever, thanks
           tioned and sold the vehicle without the                 Orders such as these certainly help    to the protests from financial institu-
           permission of the District Forum, when            the consumers who seek redress through       tions. .
           the case was pending before it.And then,          the consumer courts, but they also high-          Referring to these developments,
           after filing an appeal before the State           light the need for the preventive meas-      the Law Commission in its 168th
           Commission, the bank initiated the                ures such as a separate law to protect the   report of March 1999, again under-
           process of Arbitration, without seeking           interests of the borrowers and ensure        scored the need for a separate hire pur-
           the permission of the Commission. So              that they are treated fairly by the finan-   chase law to regulate the hire purchase
           all in all, the behaviour of the bank in          cial instititutions.                         transactions and said such a law was
           no way could be construed as fair.                     In fact, way back in 1972, follow-      absolutely essential to protect the
                 The National Commission there-              ing the recommendation of the Law            buyer of the goods on hire purchase
           fore dismissed the revision petition filed        Commission of India, the Parliament          against certain abuses in the practice
           by the bank at the admission stage itself.        had passed a law specifically meant to       of hire purchase trading.
           . (IndusInd Bank Ltd Vs Birendra                  protect the interests of the borrow-           (The writer is a columnist on consumer
           Kumar Sinha, RP No 3703 of 2010,                  ers. However, the Hire Purchase Act of                                    right issues.)
                                                                                                                    1-15 May, 2011   MONEY MANTRA   69
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           70   MONEY MANTRA   1-15 May, 2011
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                                               1-15 May, 2011   MONEY MANTRA   71
EP-58-72.qxd    4/25/2011         6:37 PM           Page 16

                                                          Portfolio Tracker

                       Rajen Shah's portfolio                                                             Arun Kejriwal's portfolio
           Stock                     Weightage Previous Price Current Price          Change    Stock                      Weightage Previous Price Cureent Price Change
                                                (As on 31/12/2010) (As on 21/04/2011) (in %)                                        (As on 31/12/2010) (As on 21/04/2011) (in %)
           Godrej Ind.          15%             191.55           187.85              -1.98     Aries Agro                 38%         139.3            124                -10.98
           BEML                 10%             1,033.05         724.45              -29.87    Ruchira Papers             35%         22.15            12.85              -41.99
           AB Nuvo              10%             838.95           878.75              4.74      LIC Housing F              27%         195.55           228.8              17
           Indian Hotels        5%              96.6             86.8                -10.14
                                                                                               Value of Investment                    5,00,000         428609.6           -14.28
           India Cements        10%             107.65           102                 -5.25
           JK Tyre              10%             134.85           105                 -22.14
           Mahindra Ugine       10%             64.75            59.05               -8.80
           Tata Global Beverage 10%             108.35           103                 -4.94
           United Phosphorus 10%                173.15           160.95              -7.05                Madhumita Ghosh's portfolio
           Shanthi Gears        5%              44.8             36.4                -18.75
           Finolex Cables       5%              53.5             53.85               0.65      Stock                   Weightage Previous Price        Current Price      Change
                                                                                                                                     (As on 31/12/2010) (As on 21/04/2011) (in %)
           Value of Investment                  5,00,000         454802.2            -9.04
                                                                                               GAIL                    15%           510.8             474.35             -7.14
                                                                                               Biocon                  15%           421.75            375.15             -11.05
                       Vipul Verma's portfolio                                                 HCL Tech                15%           456.05            518.65             13.73
                                                                                               Sintex Ind.             13%           182.25            178                -2.33
           Stock                  Weightage Previous Price Current Price           Change
                                                                                               Tata Steel              12%           678.95            628.75             -7.39
                                             (As on 31/12/2010) (As on 21/04/2011) (in %)
           Kotak M Bank           15%        452.45             458.75             -1.39       Eros Int. Media         10%           158.3             143.75             -9.19
           Renuka Sugars          25%        97.05              74.9               -22.82      Exide Ind.              10%           166.8             143.15             -14.18
           HDIL                   15%        194.25             185.2              -4.66       IDBI Bank               5%            164.75            150.15             -8.86
           Tech Mahindra          25%        702.4              717.75             2.19        Yes Bank                5%            312.7             317.35             1.49
           Jain Irrigation        20%        210.8              178.95             -15.11      Value of Investment                   5,00,000          477175.3           -4.56
           Value of Investment               5,00,000           456643.6           -8.67

                       Rajesh Jain's portfolio                                                            Jagannadham Thunuguntla's portfolio
           Stock                   Weightage Previous Price       Current Price Change
                                               (As on 31/12/2010) (As on 21/04/2011) (in %)    Stock                 Weightage Previous Price      Current Price       Change
                                                                                                                                 (As on 31/12/2010) (As on 21/04/2011) (in %)
           Indraprastha Gas        15%         342.75             321.35             -6.24
                                                                                               HUL                   6%          312.3             288.8               -7.52
           Sun Pharma          25%             484.65             445.8              -8.02
                                                                                               M&M                   8%          777.55            766.15              -1.47
           Lupin               20%             480.45             411.5              -14.35
           GAIL                15%             510.8              474.35             -7.14     HDFC Bank             7%          2,346.50          2403.8              2.44
           ITC                 25%             174.5              190.1              8.94      Siemens               8%          820.75            836.3               1.89
           Value of Investment                 5,00,000           476768.9           -4.65     HDFC                  8%          727.95            731.9               0.54
                                                                                               L&T                   7%          1,979.05          1703.9              -13.90
                                                                                               TCS                   9%          1,165.05          1191.65             2.28
                         PK Agrawal's portfolio                                                Wipro                 7%          490.25            463.2               -5.52
           Stock                  Weightage Previous Price      Current Price Change           RIL                   7%          1,058.25          1039.95             -1.73
                                             (As on 31/12/2010) (As on 21/04/2011) (in %)
                                                                                               JSW Steel             6%          1,176.20          972.7               -17.30
           GAIL                   20%        510.8              474.35              -7.14      Bharti Airtel         7%          358.40            376.6               5.08
           Infosys                20%        3,445              2909.25             -15.55     ITC                   5%          174.50            190.1               8.94
           Cipla                  20%        369.9              320.65              -13.31     Cash                  15%            75,000         75,000

           Bharti Airtel          20%        358.4              376.6               5.08       Value of Investment               500,000           491432.4            -1.71

           HUL                    20%        312.3              288.8               -7.52               Here is the performance of portfolios suggested by the
           Value of Investment               5,00,000           461551.5            -7.69                                     brokers in 01-15 January issue.
                                                                                                                 Sensex offered -4.42% return during the period.
           72      MONEY MANTRA    1-15 May, 2011

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