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FinMin red-flags over 250 dubious financial transactions
Govt sets up panel to boost exports from small units
Boeing team to fix battery fault in AI Dreamliners
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‘Good partner spurred Tata group to return to aviation’
BIZ TALK
Tax deduction of interest on education loan
personal
finance
Secured credit card — a way out for bad credit
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FinMin red-flags over 250 dubious financial transactions New Delhi, April 28 As many as 272 such transactions were sent to the Central Economic Intelligence Bureau (CEIB) by Financial Intelligence Unit (FIU)-India, an agency tasked with analyzing and disseminating information relating to dubious financial transactions to enforcement agencies, official sources said. Detailed follow-up of some of these suspicious transaction reports (STRs) by the CEIB, which gathers and disseminates intelligence related to economic offences including “black” (unaccounted for) money to agencies concerned, has resulted in detection of tax evasion worth crores of rupees. These STRs were sent to the CEIB between January and March this year for necessary action. An STR deals with transactions of Rs 10 lakh and above, which gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime including drug trafficking and illegal money. "A large number of these STRs sent to the CEIB were related to multilevel marketing cases and were referred to respective state governments. Some of these STRs helped in detecting custom and excise duty, and service tax evasion among others," a source said. These STRs, sent by FIU for further probe, were all banking transactions including cash deposits in bank, cheque clearances, inter and intra banking dealings between individuals. A ponzi scheme is a swindle in which a quick return on an investment is offered. A feedback on the STRs sent to state governments on multilevel marketing schemes is yet to be received," the source said. The government's investigating arms like capital markets regulator Securities & Exchange Board of India, the Reserve Bank of India, the income tax department and the enforcement directorate have already begun crackdown on ponzi schemes and initiated action against scam-ridden Saradha group under various laws including the Prevention of Money Laundering Act. The Kolkata-based group is facing multi-agency probe for illegal raising of deposits from investors across West Bengal and some parts of northeastern India. The finance ministry has also warned investors about such companies which are promoting ponzi schemes to siphon off money being collected by them. SEBI has launched prosecution in 59 cases of collective investment schemes, while the ministry of corporate affairs is also investigating the Saradha group for violation of various laws, the ministry has said. The Supreme Court has also asked SEBI to deal sternly with companies indulging in manipulative and deceptive practices to check market abuse. — PTI Banks under RBI scanner for sale of gold investment products The Reserve Bank is looking into sale of gold coins and gold-related investment products by about 30 banks to find out whether their employees are mis- selling such products to customers. The RBI move follows complaints of customers being induced by bank employees and nonstaff members within bank premises for purchase of gold coins, gold-related investment products and other wealth management schemes. The central bank is studying the business practices of 30 banks to ascertain any misselling of these products and to find whether such products are being sold as a precondition for offering the regular banking services, sources said. — PTI |
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Govt sets up panel to boost exports from small units
The MSME sector contributes about 40% in the country's total exports and over 8% to India's GDP. "The committee will suggest short and long term measures to enhance exports from MSMEs. It will submit its recommendations by mid-May," an official said. The official said there is an urgent need to look at the MSME sector as exports are not doing well due to which the country's trade deficit has touched an all-time high of $190.1 billion in 2012-13. Although the government is taking every step including recent announcement of incentives and revamping special economic zone (SEZ) policy in order to increase shipments from the country, "more needs to be done", the official added. — PTI |
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Boeing team to fix battery fault in AI Dreamliners
Mumbai, April 28 “A team of around 30 engineers is coming to India to reset the batteries of the grounded planes (Boeing 787s) to enable them to fly again,” the sources told PTI on Sunday. The team, after its arrival, is expected to work on these planes round-the-clock as the airline plans to make all six Dreamliner aircraft operational by the May-end, they said. “As of now we plan to put into service the first aircraft on May 5 and the second by May 9 once the batteries are reset,” the sources said. The Federal Aviation Administration (FAA), the US aviation regulator, has approved Boeing’s revamped battery system for these new generation long-haul aircraft. Following the battery fire incidents in January this year, the entire global fleet of 50 Boeing 787s, owned by eight airlines, including Air India, was grounded. According to US media reports, the FAA estimates the cost to airlines of modifying each jet with two of Boeing’s beefed-up lithium ion batteries, containment boxes and venting tubes at US $464,678. For Air India’s six 787s, total modification cost will come at $2.8 million and just over $23 million for all 50 jets in service worldwide, the reports said. The Indian government has made it clear that it would seek compensation from Boeing for the disruption caused by the grounding of 787s as AI has been losing an estimated Rs 20 crore each week. According to US media reports, Boeing CEO Jim McNerney reportedly said last week there were no contractual obligations to compensate airlines for the lost revenue. “But having said that, there’ are a few places where we’ll work with our customers,” he added. — PTI
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New Delhi, April 28 He, however, refused to share any time frame by when the production will start. The Noida facility is manufacturing about 35-40 million phones annually, including 12 smartphones such as Galaxy S3. The company currently imports the recently launched Galaxy S4 from South Korea. Sensing huge demand for Galaxy S4, the company is also looking to double up the high-end smartphone (above Rs 20,000) market size in India, which is currently contributing around 10-12% of the overall smartphone market. Globally, Samsung had 30.3% share of the smartphone market in 2012, while Apple had a 19.1% share, according to IDC. — PTI
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‘Good partner spurred Tata group to return to aviation’
New Delhi, April 28 "If you look at the low-cost carrier space, it is huge and it has not been adequately tapped. So, the opportunity is there," Tata group brand custodian and spokesperson Mukund Rajan told PTI, when asked what made the group change its stand on reentering the sector. There are many people from many cities wanting to travel but are not receiving the services, and that offers immense potential, he said. The Tata group, which pioneered civil aviation in India, is making a come-back to the sector with Malaysian low-cost carrier AirAsia and Telestra Tradeplace of Arun Bhatia in a 49:30:21 joint venture 'AirAsia India', a no-frills airline. Last December, Ratan Tata, in an interview to PTI, had said he was unlikely to venture into the airline industry because of "destructive competition" in the sector. "It’s a different sector today than it was at that time. It’s somewhat like telecom. It is proliferated by many operators, some of them in financial trouble. I would hesitate to go into the sector today in the sense that the chances are that you would have a great deal of competition which would be unhealthy." The decision to reenter the market apparently stems from the fact that partner AirAsia, the largest low-cost operator in the continent, has a proven track record. Rajan said: "It’s a great business proposition where we’ve a partner who has succeeded in other parts of the world....Has done extremely well in pretty demanding market environment. "It does not take (us) away from the other point Mr Ratan Tata has made... Broadly speaking, aviation is tough industry and there are lots of people who have lost (money)." He, however, did not respond to a question as to whether the group was considering a full-service carrier in future. — PTI
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Dell focusing on SME segment in smaller cities
Q: What is the importance of India market for Dell? We at Dell have reiterated time and again that India is a focus market for us. India being an emerging market has immense potential to grow of which a lot is yet to be tapped. In terms of business, we are strongly focusing on the tier 2 and 3 markets, which are markets where small businesses thrive. Q: What is Dell India's renewed small businesses focus due to the PC market undergoing huge transformation? Dell has always been committed towards the growth of small business (SB) segment and is constantly making efforts to unearth the untapped potential in this segment. As a lot of SBs lack technology potential, we have many initiatives in place to educate them and add more SBs to the already existing millions that will pave the way for India’s overall growth. It has been observed that one of the key challenges SBs are facing is needing to spend valuable time in managing technological issues instead of focusing on important things required for business growth. Another major obstacle faced by them is the present set of solutions deployed which are not flexible enough to tackle their growing customer base. Data is the lifeblood for any organization and it holds true for a SME outfit too. Securing data is a major challenge for SMEs since they are not used to handling very large amounts of data. We design innovative solutions that are fully equipped to address their needs. Q: How is the company focussing on smaller cities? Dell has a strong focus on the small business segment particularly among tier 2 and 3 cities of India as we firmly believe that the next wave of growth will come from these pockets. We’re committed towards serving the growth story with our end-to-end IT solutions which empowers users with the ‘Power to do more’. According to a recently conducted study by Zinnov, there are currently close to 10 million SME businesses in India, which is expected to grow by 11 million by 2015. Q: What are the end-to-end solution offering for small businesses? Dell has always focused on brining a range of innovations that helps SBs grow their business. As a result, four key target areas were identified: security, systems management, business intelligence and applications. Dell’s Vostro range ensure that multiple layers of security are loaded on every system—from encryption software to fingerprint readers and facial recognition technology which safeguards from any threats. Q: Given the SB focus, what is the thrust on the distribution strategy? Dell has always been known for stability and is the only brand which has shown steadiness since past 5 years in distribution business. We have fortified relations with our distributors and channel partners network during all these years and have focused on promoting them even in a low demand market. Globally, we have 115,000 partners in PartnerDirect, and we want to go bigger and deeper with our certified partners. In April, we launched the Partner Advisory Council at the first Dell India partner summit held in Bangalore. The council will consist of selected Dell channel who will act as an advisory committee for Dell on matters related to business priorities, sales and India strategy.
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Tax Advice By S.C. Vasudeva Q: Is interest on the education loan, which I took out for my daughter who is studying in a New Zealand university, tax deductible from my income under Section 80E of the Income Tax Act for assessment year 2013-2014? — Harjinder Singh A: A deduction under section 80E of the Income Tax Act, 1961 is allowable to an individual of any amount paid by him in the previous year out of his income chargeable to tax by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing higher education of his relative. The term 'relative' has been defined to include spouse and children of such individual. Note that the deduction is allowable if the loan has been raised for the purposes of higher education after passing the senior secondary examination or its equivalent from any school, board or university recognized by the central or state government or local authority or by any other authority authorized by the central or state government or local authority to do so. You would thus be entitled to claim the deduction in respect of interest paid on the loan raised from the specified sources in case the interest has been paid out of your income chargeable to tax and it is for purpose of the higher studies of your daughter provided it is for the purpose as explained above.
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India, over the past two decades since the first wave of economic liberalization, has seen a great deal of not just economic change but linked societal change as well. This societal change has also remodeled traditional societal models regarding the role of women. More and more women, particularly in the cities, are becoming financially independent and becoming equal if not dominant contributors to the household budget. The truth is that a lot of women are taking their own financial decisions when it comes to savings and investments.
Despite this many women do not consider insurance products and plans with any degree of seriousness. Insurance plans are great instruments for protection and long-term savings and can play a very significant role in achieving long-term goals. Today there are many insurance plans that can help women secure themselves and their loved ones and plan for the future as well. The challenge is where does one start? A great way to start is to make an assessment of your income, assets (savings and investments) and liabilities (loans). One must factor in the number of dependents into any financial calculation. So how does one go about assessing what sort of insurance plans to consider? Let us start from the beginning. If you have any dependents – aged parents, siblings and spouse and children for married women – then it is imperative to have a term plan in your insurance basket. Term plans A term plan is a plan that gives your nominees a certain corpus of money in case of death occurring during the policy period. This ensures that your surviving dependents can live the same lifestyle even in the unfortunate circumstance of your death. A term plan normally gives no money back at the end of the policy period if you survive but it buys a large cover for a relatively small premium payment. There are a few plans in the market that give the sum of all premiums paid back on completion of the policy term. These are relatively more expensive. So how much cover is enough? This is where most of us miscalculate badly and under-insure ourselves. A good thumb-rule is to take your gross annual income and apply a multiplier of six to eight times to arrive at a base insurance amount. Add on the amount of any secured loans (housing loan, auto loan, gold loan, etc.) and deduct the current life insurance you already have. Assume a gross annual income of Rs 600,000 with an outstanding housing loan of Rs 1,500,000. The total of all existing insurance policies is Rs 300,000. The minimum insurance cover required is Rs 4,800,000. A far cry from the Rs 300,000 of insurance that is currently held! Women with no financial dependents should not consider term insurance. To buy a term plan one should get in touch with a financial counselor. There are also a number of companies selling term plans online. Health insurance Once term insurance is out of the way the other critical thing that needs to be covered is medical expense. Everyone must have a medical insurance. Given the ever increasing costs of treatment and the incidence of lifestyle and other new-age diseases not having a medical insurance can lead to financial debilitation. There are scores of medical plans available in the market. Even If one is working and has a health insurance provided by an employer, it is better to have independent personal health insurance as well. Employer insurance ends immediately on end of employment and this could leave one uncovered. Also as one gets older it becomes more expensive to get a health insurance cover. Take a health plan early and lock in lower rates! Retirement planning Another aspect where insurance comes in very handy is in retirement planning. The best time to plan for retirement is the day you start working. However, very few of us think like that. It is important to start saving early, the earlier the better, since this means that one can build a larger corpus leading to a more comfortable retirement. Retirement plans have two phases. The first phase is when you accumulate and grow your money. The regular premium paid by you is invested in market-linked instruments such as stocks and shares, bonds, deposits and many other instruments. This money grows until the pension plan matures or vests. At this point you have the option of withdrawing 33% of your corpus. The balance 33% has to be invested in what is called an annuity plan. The annuity plan is what gives you a periodic payout in the form of a regular pension. How does one go about calculating how much money to invest in a pension plan? The best way is to sit with a financial counselor who will be able to assess your future needs, factor in inflation and arrive at the money you will require to get the pension you want. To do this you must tell the counselor the age at which you wish to retire which should coincide with the vesting date of the plan. Child insurance plans Another area that is of a lot of concern to women is the money needed in the future for their children. This money can be for marriage, further education or just to provide a loved one with a head-start in life. Whatever the end use be this is a very critical need to save. A number of insurance companies have designed plans specifically for these needs. These are called child insurance plans. A child plan, like any other insurance plan, involves the payment of a regular premium. This premium is invested and the regular premiums go towards building a corpus that is paid out as a lump-sum at the time when it is most critical – before your child goes for higher education or before their marriage. The beat time to invest in a child plan is at the time when the child is born. This helps to maximize the corpus at the time when it is most needed. Child plans come with an option whereby if something were to happen to you the insurance company will pay all future premiums and ensure that your child gets the corpus as planned. This is called a waiver of premium option and one should not buy a child plan without this option. As demonstrated insurance can help you plan your life better in a number of different ways. Insurance makes you both secure and prepared. The author is chief marketing officer & talent head at Aegon Religare Life Insurance. The views expressed in this article are his own
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Secured credit card — a way out for bad credit
Want a credit card, but not getting it? Or your request getting declined? No need to panic; now there is a solution. But before we discuss this, let us understand some probable reasons why your card application was perhaps rejected by the credit card issuer. Some of these are:
So if any one of the above-mentioned factors is the reason, the solution lies with credit cards backed by some kind of security. Thus you can apply for secured credit card issued by the banks. These are 100 per cent guaranteed credit cards issued against the security of your fixed deposits, also known as term deposit and normally offers a credit limit of up to 80% of your term deposit amount. So even if you have a bad credit history or no documents to prove your income, you will be eligible to get these secured credit cards. There is no waiting period for these types of cards and are issued over the counter against your term deposit. However, to get this you will have to have a term deposit with the bank that offers these secured cards and remember not all banks offer these cards. So probably you will have to open a new term deposit account with the bank that provides these secured credit cards. Secured credit cards A secured credit card is ideal for people with poor or no credit history or those who find it difficult to get unsecured credit card for various other reasons. If used wisely it can also help in establishing or repair a bad credit history. The trick lies in making small purchases in the beginning and making timely payments. This will positively boost your poor credit score. But make sure the bank reports all your transaction history to CIBIL. After all, you wish to improve your credit history/score! Secondly, by being secured against your term deposit, you need not worry about your application being rejected by the bank and effectively hurting your credit score. The prospective lenders view too many unsecured credit card applications showing in CIBIL report negatively. It is considered as a credit hungry individual. Secured credit cards can be used for any purchases in same way like a normal credit card and some cards offer reward points too. Any defaults in payment of dues get debited from your term deposit with the bank. Since the objective is to improve credit score, it will be unwise to default on payments - so be careful. But before you rush to get a secured credit card it would make sense to shop around for best deal. Some bank charges fees for joining and annual subscription, then there are charges for revolving credit, late payment and over limit, etc. Different cards will have different minimum deposit amount requirement and some other limitations too! Even with some limitations being around you too can be proud credit card holder. The author is product manager at Apnapaisa.com, an online marketplace for loans & investments. The views expressed in this article are his own
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India, over the past two decades since the first wave of economic liberalization, has seen a great deal of not just economic change but linked societal change as well. This societal change has also remodeled traditional societal models regarding the role of women. More and more women, particularly in the cities, are becoming financially independent and becoming equal if not dominant contributors to the household budget. The truth is that a lot of women are taking their own financial decisions when it comes to savings and investments.
New Delhi, April 28
Global computer technology major Dell Inc is betting big on the small business segment in India. In an interview to Sanjeev Sharma, P. Krishnakumar, executive director & general manager, consumer & small business, Dell India, talks of the thrust on the small business market, growth in small cities and the distribution strategy.
