Category: Personal Finance

Axis MF launches Nifty Bank Index Fund: Should you invest?

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

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Axis Mutual Fund on Friday (May 3) launched Nifty Bank Index Fund. This open-ended index fund aims to track the Nifty Bank TRI. The new fund offer (NFO) of the scheme will be available till May 17, 2024.

Managed by fund managers Karthik Kumar and Ashish Naik, the fund aims to replicate the total returns of the Nifty Bank TRI, subject to tracking errors.

It will invest primarily in stocks comprising the underlying index, following a passive investment strategy.

Additionally, the fund may allocate a portion of its assets to debt and money market instruments to meet liquidity and expense requirements.

The minimum investment amount allowed will be ₹500 and in multiples of ₹1 thereafter.

The exit load applicable will be 0.25% if redeemed/ switched out within seven days from the date of allotment/ investment and no exit load if redeemed/ switched out after seven days from the date of allotment/ investment.

Investment strategy

The Axis Nifty Bank Index Fund adopts a passive investment strategy.

The index undergoes semi-annual rebalancing to ensure it accurately reflects the sector’s dynamics, incorporating companies that best represent its performance.

Rationale for investment

The launch of the Axis Nifty Bank Index Fund comes at a time when India’s banking sector continues to exhibit growth and resilience.

B Gopkumar, MD & CEO of Axis AMC, highlighted the sector’s promising trajectory, driven by robust regulatory frameworks and the rapid adoption of digital banking.

Investment considerations

According to Ashish Gupta, Chief Investment Officer at Axis AMC, the fund offers investors an attractive opportunity to gain exposure to India’s banking sector, which is poised to play a pivotal role in the country’s economic expansion.

“With increasing financial inclusion and a shift towards sophisticated banking services, the sector holds potential for significant returns,” Gupta said.

By investing in a diversified mix of large-cap and mid-cap banking companies, including both PSUs and private banks, the fund offers a cost-effective and efficient means to capitalise on the sector’s growth prospects.

However, prudent decision-making should always be based on individual financial goals, coupled with professional consultation when necessary.

ALSO READ | Groww MF launches India’s first non-cyclical index fund: Should you invest?

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UPI transactions dip slightly in April, but see 50% growth year-on-year

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

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In April, Unified Payments Interface (UPI) transactions experienced a 1% dip month-on-month (MoM). The volume of transactions slipped from 13.44 billion to 13.30 billion, while the transaction value also saw a marginal decline from ₹19.78 lakh crore to ₹19.64 lakh crore during the same period.

However, the number of transactions saw a growth of 50% when compared with April last year, while the total amount of transactions saw 40% growth.

Make seamless payments from your mobile in real-time with UPI.#UPI #DigitalPayments #UPIChalega@GoI_MeitY @_DigitalIndia @dilipasbe @upichalega @dfs @rbi pic.twitter.com/t02TctNEBw

— NPCI (@NPCI_NPCI) May 1, 2024

In March 2024, the volume of transactions had surged by 55% to 13.44 billion, while the value increased by 40% to ₹19.78 lakh crore compared to March 2023.

On the other hand, Immediate Payment Service (IMPS) transactions experienced a decline in volume and value in April compared to March.

Transaction value dropped by 7% to ₹5.92 lakh crore from ₹6.35 lakh crore, with volume decreasing by 5% from 581 million to 550 million transactions.

However, on a year-on-year basis, IMPS transactions exhibited positive growth, with a volume increase of 11% and a value increase of 14%.

UPI’s accessibility extends beyond India’s borders, with several countries including Sri Lanka, Mauritius, France, UAE, Singapore, Bhutan, and Nepal embracing its utilisation.

On Thursday (May 2), NPCI International Payments Limited (NIPL), the international arm of the National Payments Corporation of India (NPCI), signed an agreement with the Bank of Namibia (BoN) to support them in developing an instant payment system like UPI for Namibia.

Meanwhile, the NPCI is likely to review its decision to implement a 30% cap on the market share of payment players offering UPI services by the end of 2024.

As of now, the deadline to bring this change remains unchanged i.e., December 2024.

In November 2022, a 30% volume cap on third-party app providers was first proposed.

UPI players were requested to restrict their market share to 30% within two years.

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Big win for Bajaj Finance as RBI lifts restrictions on eCOM and Insta EMI card loans

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

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Non-banking financial company Bajaj Finance on Thursday (May 2) said the Reserve Bank of India (RBI) has lifted the restrictions imposed on the sanction and disbursal of new loans under the ‘eCOM’ and online/digital Insta EMI card segments.

“Now, we wish to inform that the RBI, vide its letter dated 2 May 2024, based on the remedial actions taken by the Company, has conveyed its decision of lifting the said restrictions on eCOM and online digital ‘Insta EMI Card’, with immediate effect,” according to a stock exchange filing.

This decision comes after the company took remedial actions to address concerns raised by the regulatory authority.

The saga began in November 2023, when Bajaj Finance first announced the RBI’s restrictions on these specific business segments. The central bank had cited concerns, prompting the company to temporarily suspend the issuance of existing member identification cards (EMI cards) to new customers.

This clearance allows the company to resume the sanction and disbursal of loans in the eCOM and online digital Insta EMI card segments, as well as the issuance of EMI cards to customers.

Shares of Bajaj Finance Ltd ended at ₹6,881, down by ₹50.05, or 0.72%, on the BSE.

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Bajaj Allianz Life Insurance declares all-time high bonus of ₹1,383 crore

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

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Private life insurer Bajaj Allianz Life has announced its all-time high bonus of ₹1,383 crore for the financial year 2023-2024 (FY24) for over 11.66 lakh policyholders.

Policyholders with traditional participating (with-profit) policies are eligible to receive this bonus, which is declared from the surplus generated under the participating (with-profits) funds, the insurer said.

All participating policies in force as on March 31, 2024, are eligible to receive this bonus.

Policyholders of participating products like Bajaj Allianz Life Flexi Income Goal, Bajaj Allianz Elite Assure, Bajaj Allianz Life Ace, among others, stand to benefit from the bonus declared.

The FY24 bonus marks a 15% increase over FY23 bonus, which stood at ₹1,201 crore, the insurer said.

Decoding bonus in insurance

Some life insurance policies allocate a share of their profits as a bonus and pay to the insured person when they reach certain milestones.

Put simply, just like employees receive bonus as extra amount or reward over and above their base salary, a similar concept exists in the realm of life insurance companies.

Firms make bonus payments to their policyholders on a yearly basis beyond the basic sum assured they are entitled to.

How is it determined?

The bonus is dependent on several factors such as return on company assets, bonuses declared in the previous year, claims filed, expected interest rates in the future and several other estimates.

How is life insurance bonus calculated?

Bonus is either computed as a percentage of sum assured or as a certain amount per ₹1,000 of sum assured.

For example, if the bonus is ₹50 per ₹1,000 for a policy with a sum assured of ₹1 lakh, the annual bonus will be ₹5,000.

Are all policies eligible for bonuses?

Not all life insurance policies are entitled to receive the bonus amount.

Only participating (with-profit) policies qualify for the bonus and the policyholders who hold a participating life insurance policy will qualify for the bonus payout.

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Bima Vistaar likely to offer annual premium of ₹1,500 per policy — what more is on offer

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

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The Insurance Regulatory and Development Authority of India (IRDAI) has proposed the pricing structure for Bima Vistaar, an innovative composite insurance product tailored for rural India.

According to industry officials who attended Bima Manthan, an event organised by the regulator on April 25 and 26, individuals will be able to secure coverage under Bima Vistaar for an annual premium of ₹1,500 per policy.

Alternatively, families may opt for a family floater policy priced at ₹2,420.

However, the insurance regulator is yet to issue any official circular on this.

As of now, the proposal outlines an all-in-one insurance solution aimed at providing a basic social safety net cover.

This initiative will offer a combination of insurance categories including life cover (₹820), health cover (₹500), personal accident cover (₹100), and property cover (₹80).

The sum assured for life, personal accident, and property covers will be fixed at ₹2 lakh each.

Additionally, the health cover, known as ‘hospi cash,’ will offer a sum assured of ₹500 for 10 days, with a maximum amount of ₹5,000 available without producing bills or documents.

Families will be able opt for a comprehensive coverage plan by choosing the family floater option, which will extend coverage to additional family members for an extra premium.

Claims under the property cover will be settled on a parametric basis, ensuring timely payouts based on the magnitude of the event.

Agents selling Bima Vistaar policies will receive a commission of 10%.

Sharad Mathur, Managing Director & Chief Executive Officer of Universal Sompo General Insurance, expressed optimism regarding Bima Vistaar’s potential to revolutionise insurance accessibility in India.

He emphasised the product’s affordability and comprehensive coverage, particularly targeting rural masses.

Mathur highlighted the integration of advanced technologies like artificial intelligence (AI) and the Bima Sugam digital portal, which is expected to streamline claims processing and enhance customer experience.

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Over 1 crore mutual fund accounts ‘on hold’ due to incomplete KYC: What should investors do

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

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Approximately 1.3 crore mutual fund accounts are currently ‘on hold’ due to incomplete KYC (know your customer) compliance, according to media reports.

Notably, these accounts had their KYC processes completed using documents such as electricity bills, telephone bills, and bank account statements.

However, under the Securities Exchange Board of India’s (SEBI\) latest directive, these documents are now considered invalid for KYC purposes.

Officially valid documents include an Aadhaar card, passport, and voter ID card.

Consequently, investors with accounts flagged as ‘on hold’ are currently restricted from engaging in any transactions within mutual funds, whether buying or selling units.

Understanding the KYC status

KYC status serves as a crucial indicator of an individual’s compliance with regulatory requirements.

It is only when the submitted documents are duly accepted by the processing authority that an individual achieves KYC compliance.

Any subsequent modifications to personal records necessitate a KYC change request.

Accounts on ‘hold’

Swarup Mohanty, VC and CEO at Mirae Asset Investment Managers India, shed light on the urgency of addressing accounts on hold.

“Out of our almost 70 lakh folios, we have 76,500 folios, which are on hold.” Mohanty told CNBC-TV18.

He emphasised the importance of adhering to regulatory mandates and acknowledged the challenges posed by data assimilation and server capacity amid compliance activities.

Regarding the potential impact on systematic investment plan (SIP) numbers for April, Mohanty said it’s better to wait for industry data to assess the actual repercussions on investments.

Resolving the ‘on-hold’ status

The first step towards resolving the ‘on-hold’ status is to check one’s KYC status through designated KYC registration agencies (KRAs) such as KARVY, CVL, NDML, CAMS, and DOTEX.

For instance, if using the CVL KRA:

Step 1: Visit the CVLKRA website.

Step 2: Click on ‘KYC Inquiry’ at the top of the screen.

Step 3: Enter your PAN and click ‘Submit.’

Once the KYC status is determined, if one finds themselves in the ‘on hold’ category, they can initiate the resolution process.

This involves submitting an online request via the KRA or mutual fund portal to update details, thereby removing the hold status and allowing resumption of investment activities.

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

Aditya Birla Sun Life Mutual Fund launches Nifty PSE ETF: Should you invest?

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

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Aditya Birla Sun Life Mutual Fund on Thursday (May 2) launched Nifty PSE Exchange Traded Fund (ETF). This is an open-ended ETF tracking the Nifty Public Sector Enterprise (PSE) Index.

The New Fund Offer (NFO) will remain open till May 16, 2024.

The ETF offers investors an opportunity to invest in India’s Public Sector Enterprises (PSEs) that will be responsible for propelling the growth of India going forward.

The investment proposition

The ETF is positioned to leverage several factors that could potentially fuel its growth trajectory.

These include a favorable demand environment, strong financial backing, strategic market positioning, and attractive valuations.

Aditya Birla Sun Life Mutual Fund emphasised that these elements could make investing in PSEs a decade-long opportunity.

Benefits and considerations

According to the mutual fund house, the ETF offers a blend of benefits.

Investors can gain exposure to leading public sector companies boasting robust market positions, potentially reaping rewards from both high dividend yields and long-term growth prospects.

Moreover, the government’s support typically translates into lower volatility compared to individual stocks, adding a layer of stability to the investment.

One notable aspect of this ETF is its alignment with key national priorities like Make in India and Atmanirbhar Bharat.

Who should consider investing?

According to Aditya Birla Sun Life Mutual Fund, long-term investors seeking growth opportunities, income-focused individuals eyeing dividends, and those aiming for portfolio diversification through exposure to the PSE sector might find value in this ETF.

A Balasubramanian, Managing Director & CEO of Aditya Birla Sun Life AMC, highlighted the role of PSEs in India’s economy and the ETF’s potential to harness their collective strength and stability.

“By tracking the Nifty PSE Index and minimising tracking errors, investors can gain exposure to vital companies poised to drive India towards becoming a $7 trillion economy by 2047,” he said.

However, investors should conduct thorough research, assess their risk tolerance, and consult with financial advisors before making investment decisions.

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

Groww MF launches India’s first non-cyclical index fund: Should you invest?

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

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Groww Mutual Fund (MF) on Thursday (May 2) launched the Nifty Non-Cyclical Consumer Index Fund. This marks the inception of India’s first non-cyclical index fund. The scheme is aimed at securing long-term capital appreciation through strategic investments in equity and equity-related instruments.

The new fund offer (NFO) of the scheme will be available for subscription till May 16.

Fund details

Managed by Abhishek Jain, a professional with nearly 12 years of experience in equity markets, the Groww Nifty Non-Cyclical Consumer Index Fund seeks to emulate the performance of the Nifty Non-Cyclical Consumer Index.

The core strategy involves maintaining identical weightage to the index constituents, with the objective of mirroring its total return.

The benchmark of the scheme is set as the Nifty Non-Cyclical Consumer Index – TRI.

Minimum investment

The fund offers a minimum lump sum investment of ₹500, with subsequent increments in multiples of ₹1.

For investors opting for Systematic Investment Plans (SIP), the minimum investment stands at ₹1,200.

Load details

The fund imposes an exit load of 1% if units are redeemed or switched out within 30 days from the date of allotment, according to the mutual fund house.

However, no exit load is applicable beyond this initial 30-day period.

Certain exemptions apply to units allotted on reinvestment of Income Distribution cum Capital Withdrawal, while systematic transactions adhere to prevailing exit loads.

Investment strategy

The fund’s underlying investment strategy entails allocating between 95% to 100% of its assets to equities and equity-related securities, with a minor allocation of 0% to 5% in debt and money market instruments, units of debt schemes, and debt ETFs.

Sector breakup of the index tracked by the scheme

(Source: Groww)

Investor considerations

According to Groww Mutual Fund, investors with long-term horizons and a preference for equity and equity-associated securities should invest in Groww Nifty Non-Cyclical Consumer Index Fund.

However, prudent decision-making should always be based on individual financial goals, coupled with professional consultation when necessary.

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

Gold prices surge amid US Fed’s dovish stance, experts predict further rise

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

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Gold prices surged for the second consecutive day on Thursday (May 2). The precious metal’s value strengthened by 0.3% to $2,325.02 per ounce in the global market, following a 1% climb in the preceding session, according to a Reuters report.

Concurrently, US gold futures rose by 1% to $2,334.40 per ounce.

The price rally underscores a broader trend, with gold experiencing 20% growth over the past year.

Back home, the price of gold is ₹ 65,540 per 10 grams for 22-karat gold and ₹71,500 per 10 grams for 24 karat gold (also called 999 gold).

The trigger

The gold price rise is propelled by signals from the Federal Reserve indicating a predisposition towards potential rate cuts and anticipation surrounding the US non-farm payroll data.

The Federal Reserve’s decision to maintain unchanged interest rates was accompanied by a policy statement retaining key economic assessments and guidance.

Federal Reserve Chair Jerome Powell articulated a cautious stance and emphasised that future rate adjustments would hinge upon evolving economic indicators.

Matt Simpson, senior analyst at City Index, remarked on the significance of Powell’s remarks, noting that the Fed’s commitment to refraining from further rate hikes provided impetus for gold’s ascent above $2,300 per ounce.

What lies ahead?

The trajectory of gold prices is expected to be influenced by the forthcoming US non-farm payrolls report, scheduled for release on Friday.

Analysts anticipate that a softer-than-expected report could further support gold prices, consolidating its position above the $2,000 per ounce threshold for the remainder of the year and potentially breaching the $2,500 mark per ounce.

Rahul Kalantri, VP of Commodities at Mehta Equities, suggested that gold will find support levels at $2,305-2,288  per ounce with resistance at $2,335-2,351 per ounce.

“In India, gold sees support at ₹70,420 per 10 grams and ₹70,150 per 10 grams, with resistance at ₹70,780 per 10 grams and ₹71,920 per 10 grams,” Kalantri said.

Investment considerations

In terms of investment, while gold’s short-term returns might allure some investors, it’s crucial to acknowledge its historical performance relative to other asset classes.

According to Value Research, gold’s annual returns typically fall within the range of 7-8%.

This is lower than equities, which have delivered around 14% returns over the last decade.

However, for investors inclined towards diversification, Value Research noted that sovereign gold bonds (SGBs) present an alternative avenue worth exploring.

While SGB and physical gold prices grow at the same pace, the former offers an additional interest of 2.5% each year.

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

YES Bank collaborates with ANQ to launch Pi and Phi credit cards

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

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YES Bank has partnered with Bengaluru-based financial services provider ANQ to unveil two new credit cards designed for Indian consumers. The Pi and Phi co-branded cards aim to offer unique features and benefits, the companies said in a joint statement.

The YES BANK ANQ Pi Credit Card is a digital-only card that provides credit on Unified Payments Interface (UPI) for domestic transactions.

With no joining or annual fees, this card offers flexibility without additional costs, the companies said.

Users can earn 8 reward points on UPI transactions above ₹2,000 and gain access to RuPay Platinum Benefits.

Additionally, the card provides accelerated rewards on UPI spending and allows users to convert purchases into EMIs.

The YES BANK ANQ Phi Credit Card is a physical card catering to both domestic and international purchases.

Like the Pi card, there are no joining fees.

The Phi card offers rewards across various categories including dining and travel, along with fuel surcharge waivers and international lounge access.

Users can earn 24 reward points on selected categories for spends of ₹200 and 4 reward points on other spends of ₹200.

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