Young executives prefer small cities to big cities for work-life balance

BhaveshSoni was born and raised in Mumbai, but abandoned the maximum city and moved to Vadodara in search of a quieter, better life. His 25-km commute to work took him two hours in Mumbai; it's now a 10 minute drive in Vadodra. He paid Rs 10,000 for a domestic help; the cost has halved now. He is set to buy a four-bedroom penthouse for Rs 30 lakh in his new city; something similar would have cost him Rs 4.5 crore in Mumbai. "I can come home for lunch everyday," says Soni, a deputy general manager of Vadodara for Serco Global Services, a BPO firm. "I have a two-year-old kid and need to strike a work-life balance." He and another colleague, a training lead, asked for a transfer when Serco Global Services opened a new centre in Vadodra.....Read more >> Click here

All you need to know about home loan principal, interest

The home loan EMI has two components: interest and principal. The Income TaxDepartment treats these two separately while offering tax benefits to borrowers. The tax relief on principal is allowed under Section 80C, whereas the benefit for interest is allowed under Section 24. The borrowers have to rely on the loan amortisation table sent by the bank to determine the principal or interest repaid. This is because the EMI does not constitute the two components in the same proportion. The banks charge a relatively higher interest in the initial EMIs and it diminishes over time. Similarly, the initial principal is relatively low compared with the later ones. The amortisation table lists the principal and interest of each EMI paid.

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Buying a car? Go by your needs & affordability, not by discounts

With the festive season on, car manufacturers are offering cash discounts, exchange offers, free insurance, gold coin, and so on, to woo prospective buyers. With car sales sluggish over the past six months, almost every manufacturer has something to offer : Renault is offering additional two years warranty plus free roadside assistance on the Duster, Tata MotorsBSE 0.41 % is offering three years insurance at Rs 1, plus a one-gram gold coin, and a cash discount.Chevrolet is offering benefits of up to Rs 85,000 on the Chevrolet Cruze. If you are planning to exchange your car or buying a new one, you are lucky this season. 

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The Outsider: Why companies take risk of hiring CEOs with no industry experience

Till he took charge as CEO of Air Asia India, Mittu Chandilya experience with the airline industry was somewhat tangential. As the China head of the air compressor division of Ingersoll Rand, he was responsible for ground equipment services to several airlines. Later, as the head of the services practice at headhunting firm Egon Zehnder, he handled several airline clients. And of course, he was a frequent flyer, with lots of ideas on how airlines could improve their services. But these were not the factors that led to the Air Asia board inviting him to take up the top job in its start-up venture in India. "They hired me for my entrepreneurial background," says Chandilya. 
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Save money: Tips before you take a home loan

Home loans can be very beneficial for property buyers, as they not only help you buy your dream home, but also help you save on taxes. But you must remember to choose the right home loan if you do not want to face the hassles in the process.  Here are a few quick tips that you could keep in mind while applying for a home loan. These tips could help ease the complicated procedure a little bit and at the same time help you save some money. Some of the tips that are recommended are mentioned below:

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Wind down the Employees Provident Fund, do not expand it

The labour ministry's proposal to raise the statutory wage ceiling for provident fund contributions should be turned down. Employees who earn more need choice to grow their retirement nest, not greater mandated savings in the Employees Provident Fund Organisation that has to discover black holes in its accounts, year after year, from which to dig up hidden goldto produce an acceptable rate of return for its members. Raising the wage ceiling would also increase the government's subsidy outgo on the EPFO's pension scheme. Instead, the government should allow workers to voluntarily switch to the National Pension System (NPS), which has the institutional framework to allow individual members to choose their fund manager and allocation across asset classes. 

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5 reasons why rupee recovery may not last

One of the primary reasons for the recovery in the equity markets was stability and recovery in the currency market. Rupee has recovered nearly 11% since RBI governor Raghuram Rajanintroduced measures to stem the slide. The currency also received help from Federal Reserve chief Ben Bernanke when he announced postponing of the tapering (its liquidity infusion) program. The rupee was within sniffing distance of 70 but has since recovered and currently trades at 61.50. The on-going shutdown in the US has also raised hopes that tapering would be postponed further, giving markets a leg-up. So are we out of the woods or is this just a pause before the slide continues. It is clear that the measures taken by the central banker and the events that have unfolded are all time-bound. What the rupee has got is only some breathing time. Here are five reasons why the rupee will continue on its ride downwards

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Want to withdraw from your provident fund account? Here's how!

A provident fund (PF) is basically a plan to provide financial security after retirement. It is, therefore, not advisable to withdraw any amount from one's provident fund account as PFs are primarily meant for retirement planning, and retirement planning is the most important goal in any person's life. "No need to say one should avoid doing so unless there is a great emergency, as the amount should be utilized post one retires or in case one stops working and his/ her earnings have depleted. 

For other emergencies, one should look at money frominvestments in other instruments like debt funds, liquid funds or a savings bank account, etc," suggests Anil Chopra, Group CEO, Bajaj Capital. In fact, there are various advantages of investing in a provident fund (PF). Generally, the return on provident fund is higher than inflation, and is totally tax fee. Thus, withdrawing out of it would have the following consequences:

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Indians happiest banking customers in APAC: Study

 India tops the list of 'happy' banking customers in the Asia-Pacific regionwith facilities like online banking, transaction efficiency, easy access to ATMs and local branches keeping users content, claims a study by SAP. According to the survey carried out by IDC recently, India scores the highest (8.5) on the happiness quotient of its banking citizens, followed by Indonesia (8.33), New Zealand (8.27) and China (7.93). 
The report contains insights from 600 bank customers spread across Australia, China, India, Indonesia, Malaysia, New Zealand and Singapore. "Investments that banks made in technology seem to be paying off...A standout factor for Indian customers' happiness is a bank's online service. 

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Jobs' slump hits freshers hard, loan repayment troubles loom large

Life has not been easy for Sneha Bhutani, 23. She grew up in Mandsaur, a small town in Madhya Pradesh, in a modest middle-class family; her mother was a school teacher and father ran a small business. In July 2008, Bhutani enrolled for an engineering degree in an Indore college, her bid to hit the big time. 
The financial burden — a Rs 4-lakh fee for the four-year course and the higher living expenses of a city — was daunting. An education loan eased the pressure. "It was easy to get and the bank did not require any collateral," she says.

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Different takes on who fits the bill

Be it the cricket World Cup or Lok Sabha elections, people make guesses on who the winner would be. Similar speculation has begun regarding the banking licence allotment, too. N. K. Thingalaya, former Chairman of Syndicate Bank, says the eligibility to get a licence need not be related to the sector from which the licences are sought. It should be based on the track record of the applicants and their performance in discharging their corporate social responsibility.

It would be best to avoid microfinance companies and industrial houses, Thingalaya goes on to add. In fact, the Executive Director of RBI, R. Gandhi, had stated recently that financial inclusion has to be a precondition for new banks to come in. “It (the number of banks) depends upon the proposal and business plans, including their proposed efforts on financial inclusion. We cannot predict how many applicants will meet these requirements,” he had stated.

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Malayalam guide to financial literacy

Inclusive banking may have moved to the top of the agenda in the country, but patronising a bank doesn’t always mean that people escape the attention of moneylenders and other unscrupulous elements.

To avoid them, and the dangers they bring, calls for financial literacy. Financial literature in the vernacular could go an extra mile in reaching out to the rural poor and the unbanked at large.

SHARING EXPERTISE

This is exactly what set V. Prabhakaran Nair, general manager of Kerala State Cooperative Bank and a former assistant general manager of State Bank of Travancore, thinking in this direction.

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When and how can you withdraw from your EPF?!

Almost all salaried people contribute a certain percentage of their salary towards their Employee Provident Fund (EPF) account every month. While most of us know that EPF is an effective tool that helps generate a corpus for life post retirement, many of us are unaware that you can make a withdrawal from your EPF account for urgent cash requirements.

However, an EPF account cannot be treated like any other saving bank account implying that there are certain specified criteria under which withdrawal is permitted from an EPF account. An individual needs to furnish all relevant documents and satisfy the necessary requirements in order to be eligible for premature withdrawal of EPF. Here are the categories and other details with respect to premature withdrawal from EPF.

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18% of single working women make own invstment decisions

Only 18% of single working women make their own investment decisions and 77% of the fairer sex depends on spouse or parents for their investment decisions, says a study.

"Only a minuscule 23% of the surveyed working women claim to be sole decision makers, when it comes to making their own investments."This figure is even lower at 18% when it comes to the proportion of single working women who take their own investment decisions," says a study by mutual fund company DSP BlackRock.

According to the study, while 92% of working women claim to be involved in the investment decision-making process, 70% of these women are actually joint decision makers and a majority of these (52%) are only informed about the investment decisions which have already been made."The main reason why women don't take investment decisions

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Let’s bank on this duo

Banks and microfinance institutions should team up to improve financial inclusion.

What would be the best approach to financial inclusion in a country like India where the penetration of the banking network is still very low?

 India has 10.91 branches and 5.44 ATMs per 0.1 million adults compared with 13.76 branches and 120.62 ATMs in Brazil, 15.22 branches and 47.28 ATMs in Mexico and 35.74 branches and 173.75 ATMs in the US.

In recent times, thanks to the Reserve Bank of India’s initiatives -- including the Banking Correspondent model, opening of branches in sub-Tier 3 centres without the central bank’s permission and White Label ATMs -- there have been dramatic improvements.

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How private are public banks?

When the Reserve Bank of India entertains applications for the third round of private entry into banking, marks the beginning of one more phase in banking liberalisation in India. Central to that liberalisation was the reversal of the post-1969 policy in which banking was made a largely public preserve by the nationalisation of the major private banks. Till then, India’s major banks, other than the State Bank of India and its subsidiaries, were directly or indirectly controlled by big business, resulting in the capture of a dominant share of the nation’s savings by large firms to the exclusion of small borrowers and the agricultural sector. Seizing the ownership of these banks and bringing them into the public sector established social control. Some private banks remained, but they were small domestic ones or foreign players with restricted operations. In the two decades that followed, India’s banking sector, judged by behaviour or social performance indicators, went through a dramatic transformation.

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A real transformation at Enathi village

Enathi, a small hamlet in Sivaganga district, is today buzzing with activity. Located 30 km from Madurai and close to the road connecting Madurai and Sivaganga, this village remained quite unknown till two years ago.

Despite its proximity to Sivaganga, which incidentally is Union Finance Minister P. Chidambaram’s constituency, Enathi continued to remain one among the many unbanked villages in the country.

There are five Panchayats in and around Enathi, and close to 3,000 families live in this village. Its inhabitants depend on agriculture and allied activities for their livelihood. Scarcity of water had made life difficult for these people in recent years.

“They used to pick flowers and take the produce to Madurai for selling,” says Subramanian, Managing Director of Naveen Agro Food Corporation.

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Is India under-banked?

The brouhaha on licensing new banks is in full flow. The RBI has announced guidelines for applicants. In a few weeks we will know the response.

Objectively speaking, there’s no room for more banks. And our experience with the new generation private sector banks in the aftermath of liberalisation is nothing to rave about. Just three of them survive.

Some were bought out and one went bust forcing a merger with one of the much derided government banks. A high profile survivor got into such horrendous asset-liability mismatches (after much boasting of its ‘risk management’ skills) that it had to be rescued with liquidity support from the RBI and the very government banks it made fun of earlier.

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Are banks ever-greening loans?

Individuals and entities with significant bank borrowings did not hesitate to take even more credit from banks in the quarter ended September 2012. Conversely, there was a decline in the credit issued to people with no borrowings. This was also the segment that saw the fastest growth in deposits during the period.

An analysis of the data segregating borrowers in terms of their Credit-Deposit ratio – the quantum of credit taken by banks vis-à-vis the amount of money deposited – show that credit disbursed to borrowers with a CD ratio of 80-100 rose by 20.4 per cent in the quarter.

In the case of individuals with a CD ratio greater than 100, the quantum of credit disbursed rose by 16.7 per cent. But in the case of people with a CD ratio of 0-25, there was a 5.7 per cent decline in credit disbursement.

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India’s great banking divide

There are two sets of banks in India—the state-run banks, and private sector (both old and new) and foreign banks. If their earnings for the March quarter are anything to go by, it’s evident that private banks are in a better position to manage their operations in a slowing economy than their counterparts in the public sector that account for close to 70% of the Indian banking industry’s assets.

Let’s take a look at their earnings first. The net profit of 38 listed banks—private and public—including 14 banks that constitute the BSE’s banking index, Bankex, rose marginally, by 3.63%, in the March quarter. For the entire year, the rise was higher—10.63%. But the private sector banks are yards ahead of the state-owned banks. Their net profit for the quarter rose 24.63% and, for the full year, a little more than 28%. In contrast, public sector banks’ net profit for the quarter actually dropped 6.64% and, for the year, it’s only marginally higher—just about 2.63%. Most large public sector banks’ net profit in the March quarter dropped, including that of the State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda, Bank of India and Canara Bank. For the full year, SBI’s net profit rose 20.5%, but profit at three of the other four banks dropped; Bank of India’s net profit rose by just 2.68%. In contrast, the net profit of ICICI Bank Ltd, HDFC Bank Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, Yes Bank Ltd and IndusInd Bank Ltd—both for the quarter and the full year—rose by between 21% and 47%.

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