Author: Anshul

IndiGo, HDFC Bank tie up to launch credit card. Check eligibility, key features

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

IndiGo on Thursday partnered with HDFC Bank to launch its first travel credit card – ‘Ka-ching’ – powered by Mastercard. The credit card has been launched in two variants – 6E Rewards and 6E Rewards XL. The ‘Ka-ching’ card will offer 14 travel and lifestyle benefits, the airline said in a statement.

Here are key things to know about the new ‘Ka-Ching’ card’:

Eligibility

Salaried individuals who fall in the age bracket of 21-60 years and have a  monthly income of at least Rs 20,000 will be eligible to get this card.  Self-employed customers who fall in the age group of  21-65 years and file an ITR of more than Rs 6 lakh per annum will be eligible to avail the ‘Ka-Ching’ card.

Key features

6E Reward variant card

The 6E Rewards variant card will offer complimentary air ticket worth Rs 1,500 on activation, IndiGo said in a statement. This variant will provide priority check-in, choice of seat and a complimentary meal option, the airline added.

The credit card will allow customers to accrue accelerated 6E Rewards on IndiGo transactions. Additionally, customers will get up to 2 percent 6E rewards on dining, entertainment and grocery transactions. 1 percent 6E Rewards will be offered on all other non-IndiGo transactions (except fuel  and wallet), IndiGo said.

Up to 10 percent 6E Rewards will be provided on feature partner transactions.

Discounted convenience fee of Rs 100 per passenger per segment will be provided on availing this card. One percent fuel surcharge waiver will also be available, the carrier noted.

6E Rewards XL

The 6E Rewards XL variant card will offer complimentary air ticket worth Rs 3,000 on activation, it said. This variant will also provide priority check-in, choice of seat and a complimentary meal option.

This credit card will allow customers to accrue 5 percent 6E Rewards on IndiGo transactions. 3 percent 6E Rewards will be available on dining, entertainment and grocery transactions. 2 percent 6E Rewards will be offered on all other non-IndiGo transactions (except fuel  and wallet). Around 15 percent 6E Rewards will be offered on feature partner transactions, the airline mentioned.

Additionally, 8 percent complimentary domestic airport lounge access will be offered. Customers will receive discounted convenience fee of Rs 100 per passenger per segment and 1 percent fuel surcharge waiver, IndiGo said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Borrowing from P2P platforms: 2/3 take loan for emergencies only, finds report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Emergencies such as medical, rent, advance salary were the main reason for borrowing on peer-to-peer (P2P) platforms in 2019, according to LenDenClub. Education and needs like family functions, home renovations were the other key reasons, according to the P2P lending platform.

63 percent of the borrowers availed credit for emergencies, while 37 percent availed for aspirational needs, the report said.

Bangalore and Mumbai topped the chart for the maximum number of lenders and borrowers respectively on P2P platforms. That was followed by other cities such as Hyderabad, Pune and Chennai, it added.

“Unified Payments Interface (UPI) with 50 percent users topped the chart for loan repayment followed by 47 percent of ECS payment in P2P lending,” the report said.

The findings said that 40 percent lenders and 53 percent of borrowers were under the age bracket of less than 30 years.  The data revealed that 12 percent of the borrowers and 16 percent of the lenders comprised of women customers.

Customers from business backgrounds topped the chart along with CXOs to mid-managerial level and salaried individuals as investors on the platform.

Tuesdays, Wednesdays and Thursdays were the preferred days by borrowers for a credit application, while the afternoon meal break i.e. 12.00 noon to 1.00 pm was the most preferred time when a majority of the borrowers applied for a loan.

The average percentage of repeat borrowers was 37 percent in which the loan frequency of repeat borrowers was three times, according to LenDenClub.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

PPF vs NPS: Find out which scheme suits you better

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Public provident fund (PPF) and National pension system (NPS) are the investment avenues that come with specific benefits. Both of these are long-term deposit plans. While PPF was introduced by the National Savings Institute in 1968, NPS was originally launched for the government employees in 2004 and extended to the general public in 2009.

Here is a comparison between PPF and NPS:

What is PPF?

PPF is majorly a retirement-focused investment instrument that comes with EEE (Exempt-Exempt-Exempt) tax status. The maturity amount and the overall interest earned during the period of investment are tax-free. NRIs can’t open this account.

It has a lock-in period of 15 years. However, the same can be extended within one year of maturity for a period of five years and so on. In this case, partial withdrawals are allowed after the seventh year with some limitation.

According to Suren Kochhar, senior president, head of sales and marketing, YES Asset Management (India), periodic investment in PPF for a long-term can do the trick with the power of compounding. Longer the money stays invested, the quicker it grows, they say.

The interest rate on PPF is reviewed every quarter by the government.

Also read: Public Provident Fund vs ELSS: Which is a better investment option? 

What is NPS?

NPS is not only a retirement plan. It gives subscribers the option to set preferred allocation to different asset classes such as government bonds, equity market instruments and corporate debt. It can be opened by NRIs also, unlike PPF.

It offers 2 kinds of account — Tier 1 and Tier 2. While the Tier 1 NPS account is strictly a pension account which doesn’t allow withdrawals, the Tier 2 account — known as investment account — is a voluntary saving account account. Tax benefits are applicable for investments in the Tier I account only. There is no tax benefit on investment towards the Tier II NPS account.

“The maturity tenure is not fixed. An investor can contribute to the NPS account until the age of 60 years with an option to extend the investment to the age of 70 years,” according to BankBazaar. After 10 years, accountholders become eligible for early or partial withdrawal under specific circumstances.

What experts say on selection of these schemes?

According to the experts, the selection majorly depends on individuals’ preferences like risk appetite, age factor and capital available.

“While selecting, what a major component investor should keep in mind that there is risk involved. For example, younger contributor with high-risk appetite must consider NPS as return is subject to market conditions. The Investors receive returns in range of 10-12 percent,” said Ritesh Asher, chief strategy officer, Kifs Trade Capital.

“Investors close to retirement must opt for safer bet such as public provident fund scheme as it offers fix returns and will be compounded yearly. Investor also enjoys tax benefit,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

How to take a loan against fixed deposit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Loan against fixed deposit (FD) is a type of secured loan that allows customers to use deposits as security and get loan against them. At the time of financial crisis or emergency, investors can apply for loan against their FD investment. The loan amount, in this case, largely depends on the sum that is lying in the investor’s account.  It is done in the form of an overdraft facility or as a demand loan.

Here are key things to know about loan against FD:

Who can apply?

According to financial analysts, a loan against FD can be availed by all such account holders (individual as well as joint holders). FD in the name of a minor, however, doesn’t qualify for this facility.

Also read: How to take a loan against your mutual fund investment 

Interest rate and repayment period

The interest rate charged on loan against FD ranges between 1 percent and 2 percent above the FD rate and can be repaid in up to 60 months, according to BankBazaar – a marketplace for financial products. The rates are lower as compared to personal loans which means EMIs are lower, it said.

Documentation

Loan against FD is a time-efficient way of getting loan. It requires minimum paperwork as the lender already has the details of the customer applying for loan (since he/she holds an FD account with the lender).

Application form, duly signed agreement and FD receipts discharged in favour of bank are required to avail this facility, according to BankBazaar.

Credit score eligibility

In this case, credit score is not considered. Individuals with low CIBIL or credit score can also apply for loan against FD, whose application may otherwise be rejected if applying for a personal loan, it said.

CLBIL score is an important metric that is used by financial institutions to check when they receive a credit request from individuals.

Also read: 5 tips to maintain a good CIBIL score 

Loan amount

The maximum loan amount that can be claimed as loan depends upond the money invested in the FD account.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Closing bell: Sensex ends 143 points lower, Nifty settles at 11,633; Wipro drops 3%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Domestic stock markets settled Thursday’s session on a negative note amid growing concerns over the spread of coronavirus outside China and ahead of the expiry of the February series derivative contracts today. That marked fifth straight session of losses.

After plunging over 465.69 points during the day, the 30-share BSE barometer finally settled 143.30 points, or 0.36 per cent, lower at 39,745.66. Similarly, the broader NSE Nifty fell 45.20 points or 0.39 per cent to end at 11,633.30. The Nifty MidCap 100 index declined 0.82 percent, while the banking gauge, Nifty Bank dropped 0.40 percent on Thursday.

Top percentage laggards on the 50-scrip index were Wipro, JSW Steel, ONGC, Indian Oil and Zee Entertainment Enterprises, ending between 2.33 percent and 3.52 percent lower.  ICICI Bank, Reliance Industries and TCS contributed the most to the losses on the Sensex.

Nine out of the 11 sectoral indices on the National Stock Exchange (NSE) settled lower, with the Nifty media index ending 2.40 percent lower. Nifty FMCG and pharma, meanwhile, ended with gains today. Nifty Bank settled at the lowest level in 20 sessions despite 270 points recovery for the series.

Market breadth was negative, with 1,579 stocks settling lower and 848 ending higher on the BSE. On the NSE, 1,189 stocks declined while 594 advanced.

According to provisional data available with stock exchanges, so far this week, FPIs have offloaded stocks worth Rs 6,812.57 crore on a net basis.

Catch other market related updates here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SBI Cards IPO: Here’s how SBI credit cards compare with other banks’ products

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The much-awaited Rs 9,000-crore initial public offering (IPO) of SBI Cards and Payment Services is going to hit the bourses on March 2. The pure-play credit card company has set the price band for the share sale at Rs 750-755. The company is a subsidiary of State Bank of India (SBI), the country’s largest commercial bank in terms of deposits, advances and the number of branches.

With the announcement of SBI Cards’ IPO, let’s see how SBI’s credit card business compares with that of other commercial banks – such as HDFC Bank and ICICI Bank.

Also read: SBI Cards IPO: Here’s a look at the company’s strengths and weaknesses  

Credit card business

According to the Reserve Bank of India (RBI), SBI Cards is the second-largest credit card issuer in India both in terms of numbers of credit cards outstanding and amounts of credit card spends.

On the other hand, HDFC Bank has the largest credit cards business in the country with 13.3 million cards issued, while ICICI Bank stands third with 7.9 million credit cards, according to the RBI.

Also read: Here’s everything you need to know about FY20’s biggest IPO 

Portfolio

SBI Cards offers credit card portfolio to individual cardholders as well as corporate clients. This includes lifestyle, rewards, travel and fuel, shopping, banking partnership cards and corporate cards covering all major cardholder segments in terms of income profiles and lifestyles, according to a release issued by SBI Cards.

HDFC Bank offers credit cards for regular salaried people, frequent flyers, students,  cautious savers, among others, according to the bank’s statement. ICICI Bank also offers a range of credit cards for individual as well as corporate clients.

Card types

SBI Cards has a credit card portfolio that includes SBI Card- branded credit cards as well as co-branded credit cards that bear both the SBI Card brand and the company’s co-brand partners’ brands. The company offers four primary SBI Card-branded credit cards: SimplySave, SimplyClick, Prime and Elite, each catering to a varying set of cardholder needs. It also issues credit cards in partnership with the Visa, MasterCard and RuPay payment network.

SBI’s lifestyle credit card category includes SBI Card ELITE, SBI Card ELITE Advantage and Doctor’s SBI Card.  Under the rewards category, these cards are offered – SBI Card PRIME, OLA Money SBI Card, Apollo SBI Card; SBI Card PRIME Advantage, Tata Platinum Card, Tata Titanium Card, according to the bank’s statement.

HDFC Bank offers regular cards — like the HDFC Bank Platinum Plus Credit Card. There are also three free add-on cards, which can be given to spouse, adult children, parents, brothers or sisters, the lender said on its website. As the income and needs increase, one can upgrade to a premium card like the HDFC Bank Visa Signature Credit Card, it added.

The bank also offers super-premium cards – such as HDFC Bank Infinia Credit Card or HDFC Bank Regalia Credit Card. Co-branded cards are also offered like the Jetprivilege HDFC Bank Signature Card, Maruti Suzuki NEXA HDFC Bank AllMiles (car-related privileges), Platinum Times Card (discounts on entertainment), and Snapdeal HDFC Bank Card (online benefits).

Some of the cards offered by ICICI Bank are Sapphiro Card, Platinum Chip Credit Card, Coral Card and MakeMyTrip Platinum Card.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SIP vs lump sum: Which is better for ELSS investment?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Equity Linked Savings Scheme (ELSS), a tax-saving mutual fund, comes with a statutory lock-in of three years.  Under ELSS, funds can be parked using both Systematic Investment Plan (SIP) and lump-sum investment option. In SIP mode, an individual is required to invest a small amount of money in a disciplined way, while in lump-sum investment, he/she can put the fund in one go at the start of the investment cycle.

According to financial experts, deciding whether to go the SIP or lump sum route while investing is dependent on several factors.

“Investing a lump-sum amount makes sense if you are investing at the end of a financial year to claim tax deductions,” said Archit Gupta, Founder and CEO of ClearTax, an income tax e-filing platform.

Also read: Will ELSS lose significance under the new income tax regime? 

“However, at the start of a new financial year, it’s always advisable to take the SIP route, especially if you are salaried and risk-averse,” explained Gupta.

Starting an SIP early in ELSS funds means an individual doesn’t need to indulge in last-minute tax-saving practices which may otherwise result in under-utilisation of the tax exemption limit. ELSS offers tax deductions under the provisions of Section 80C of the I-T Act.

According to Harsh Jain, Co-founder, and COO, Groww – an online investment platform, SIP allows investors to invest steadily with a small sum. This spreads out the financial strain unlike lump-sum mode, in which a large investment amount is needed.

“An SIP lowers the risk of market fluctuations as only a small part of one’s investment faces market volatility. This frees investors from the hassle of timing the market,” he said.

SIP mode of investment also provides the benefit of rupee cost averaging. This allows fund managers to buy more units when the market is low and reduce the per-unit cost of investment.

Another advantage that SIP has over the lump-sum mode is the lock-in period.

“If you invest via the SIP route, you would be able to redeem your fund units sequentially post the lock-in period. For instance, your investment in ELSS using lump sum deposit will mature as a whole after 3 years, whereas deposits made via SIP will start maturing one by one (depending on the months of investment) after the lock-in period ends,” says Jain.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mastercard CEO Ajay Banga to step down, insider Michael Miebach tapped

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Mastercard’s chief executive officer of 10 years, Ajay Banga, will step down at the start of the next year, the company said on Tuesday, and be replaced by Chief Product Officer Michael Miebach.

Banga, who took charge of the company just after the 2008-09 financial crisis, has seen the payment processor’s revenue triple during his tenure as online shopping gained prominence around the world.

India-born Banga will take on the role of executive chairman, while Miebach will become the company’s president on March 1.

Chairman Richard Haythornthwaite will retire after more than a decade when Banga assumes his new role, the company said in a statement.

Before joining Mastercard as president of Middle East and Africa in 2010, Miebach served as managing director at Barclays Bank and general manager at Citibank.

In connection with Miebach’s appointment as president, Mastercard has entered into a new compensation agreement that adds $750,000 to his annual base salary, the payment processor said in a filing.

Miebach will also receive an equity grant with a target value of $6.25 million.

His compensation as chief executive officer will be determined later, the company added.

Mastercard on Monday warned its first-quarter net revenue would take a hit if coronavirus outbreak persists through the quarter.

Shares of the company were down nearly 2% at $319 in the premarket trade.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

How to take a loan against your mutual fund investment

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The banking sector has transformed considerably over the last few years, and now they even issue loans against mutual fund (MF) investments. The loan amount, in this case, largely depends on the value of the mutual fund units to be used against the loan. The loan against mutual fund units is done in the form of an overdraft facility and the interest is charged on the amount availed as the credit.

Here are the key things to know about loan against MF:

How to apply?

The investor can apply to the bank or financial institution for a loan against the mutual fund units he or she holds. The loan can be received against equity or hybrid mutual funds by approaching any bank or non-banking financial company (NBFC). It can be done in online or offline mode.

Also read: Joint holding a mutual fund? Here are key things to know

“The lender does the due diligence, which involves research on the credit score, assessing the value of units, and determining the loan amount eligibility based on these,” according to BankBazaar, a marketplace for financial products.

According to Harsh Jain, Co-founder and COO, Groww – an online investment platform, “The loan amount that the investor receives is subject to the category of mutual fund he/she invested in and is usually a percentage of the prevailing Net Asset Value (NAV) – ranging anywhere between 50-75 percent.” The interest rate at which the loan has to be repaid is also subject to the initial terms and conditions agreed upon by the borrower and the bank.

Also read: How to invest in mutual funds via SIP?

The application process also involves marking of lien on the mutual fund units in favour of the bank/financing institution. Once a lien is marked, the units cannot be sold or redeemed by the investor. The lein is a permission given by the investor in writing to the bank that allows the bank ownership of the fund units.

“This can be thought of as pledging funds as security or collateral till the time the loan is paid. The lien can be lifted on request once the loan has been paid,” explained Jain of Groww.

Advantages of taking loan against mutual fund

Archit Gupta, Founder and CEO of ClearTax, says the best thing about loans against mutual fund investments is that the investors still enjoy the dividend payouts despite the units being marked with the lien.

“As investors’ mutual fund units secure these loans, they are issued at a lower interest rate,” he said.

The loan against mutual funds can help in raising money for exigencies in short-term against own units which is a great facility. Investors are not required to redeem units prematurely. This also ensures that Systematic Investment Plan (SIP) can continue without any hitch.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold prices hit record high. Will it add glitter to your investment portfolio?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Gold continued its record-breaking run on Monday after heavy sell-offs in global equity markets over rising Coronavirus cases increased demand for the safe-haven asset. Gold prices surged over 2 percent to their highest in over seven years in the international market at $1,678.58. In domestic markets, the metal was nearly 1 percent up. Seeing this trend, does it make sense for investors to invest in gold now?

What experts say about investing in gold?

Gold is a precious and highly liquid instrument that has the attributes of both commodity and currency.

“It has been used throughout history as money and has been a most popular metal for investment purpose, storage of wealth and as a source of high-quality collateral,” according to Kuvera -an online platform for mutual fund investments.

Experts believe that one should always have gold in their investment portfolio as it creates a good diversification in times of uncertainties. There are strategic and tactical reasons to continue investing in gold, they say.  Over the long term, while gold may not increase the return always, some gold allocation in the portfolio tends to cut the risk.

“It is gold that is helping the households, many small and micro enterprises wade through the liquidity crisis. At the start of the decade, gold demand was firm despite price hitting new record highs,” said Prof Arvind Sahay and Sudheesh Nambiath, India Gold Policy Centre, IIM Ahmedabad.

Every person should invest in gold and follow an asset allocation policy to maximise their returns. “In tough times, gold can be considered as a safe haven. Gold also safeguards against currency depreciation,” says Arpit Jain, VP, Arihant Capital.

How can one invest in gold?

There are many ways to invest in gold, including gold exchange-traded funds (ETF), sovereign gold bonds, digital gold or equity mutual funds. There are plenty of platforms including e-commerce websites as well from where one can buy the same.

Sovereign Gold Bonds bear interest at the rate of 2.5 percent per annum on the amount of the initial investment. The buyer does not have to pay any making charges while buying the gold exchange-traded fund.

Advantages of buying digital gold are surety backing of 24 karat gold, no making charges or storage hassles. One can easily convert ‘Gold’ into ‘Cash’.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow