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Repo rate bites small investors Reduced Payout by EPFO: EPFO (The Employees Provident Fund Organisation) declared interest payout of 8.1% to its subscribers for FY 2021-22. This is the lowest interest payout since 1977-78. Its regular earnings, which was 8.5% of its total corpus during last year, declined to 7.9% in FY22. EPFO consciously decided to liquidate some of its equity investments and use the capital gains of app. Rs.5529 cr. in its interest payout, so as to make it decent at 8.1%. The saving grace is, unlike in the past when pre-period reserves were also used for such payouts, the interest payout for the current FY comes out of its current earnings.  Unrealistic returns on investments: The lowest interest payout by EPFO should not surprise anyone, who closely follow the monetary and regulatory prescriptions since 2019. In fact, I have written in my blog  https://viswoice.blogspot.com/2021/06/unreal-repo-rates-hurts-...

  உலக பெண்கள் தினம் 08.03.2022 ஆணும் பெண்ணும் நிகரெனக் கொள்வதால் அறிவிலோங்கி இவ்வையகம் தழைக்குமாம் -  நிமிர்ந்த நன்னடை  நேர் கொண்ட பார்வை நிலத்தில் யார்க்கும் அஞ்சா நெறிகள்  திமிர்ந்த ஞானச் செருக்கு - புதுமைப் பெண்ணின் இயல்புகளாம் - கற்பு நிலையினை ஆணுக்கும் பெண்ணுக்கும் பொதுவில் வைப்போம் - பட்டங்கள் ஆள்வதும் சட்டங்கள் செய்வதும் நீதிகள் சொல்வதும் பாரினில் பெண்கள் நடத்த வைப்போம் - பெண்மை வாழ்கென்று கூத்திடுவோமடா பெண்மை வெல்கென்று கூத்திடுவோமடா- பாரதி  எனது சில எண்ணங்கள்:  ஒரு நூற்றாண்டுக்கு முன் பாரதி கண்ட கனவு நனவானது இன்று.  எனினும் பெண்ணுக்கு எதிரான குற்றங்களும் எதிர்மறை எண்ணங்களும் கூடியிருக்கின்றன அதே அளவில்.  தீர்வுகள்: பெண்ணின் பெருமையை உதடுகளில் உச்சரிப்பதை தன் மனத்தில் ஏற்பதும் பிற பெண்களின் மாண்பை தாயின், சகோதரியின், மனைவியின் மாண்புக்கு நிகர்சரி சமானமாக வைப்பதுமாகும் விஸ்வநாதன் 🙏 08.03.2022

Listing LIC: Is it in National Interest? Introduction: Life Insurance Corporation of India (LIC) has filed its draft red herring prospectus (DRHP) with SEBI on 13 th February 2022. 31.625 cr. shares of Rs.10 each, representing 5% of the total equity shares of 632.5 cr. shares of Rs.10 each, are being offered for sale by the Central Government, the 100% shareholder in LIC. The issue is expected to open in the second week and close by the third week of March 2022.  As per various newspaper reports, the government may raise Rs.54000-Rs.80000 cr. depending on the per share ‘offer price’ to be finalised. Going forward, in order to comply with SEBI guidelines on minimum public shareholding in listed entities as well as to achieve its fiscal disinvestment targets in PSUs, the government is likely to divest 10% of its total shares in LIC before March 2024 and 25% within five years. Who can subscribe: The usual stipulations that not more than 50% of the offer will go to QIBs and not less...

  RETAIL CREDIT PUSH IN FOR A LITMUS TEST RBL Bank under closer scrutiny of RBI: On 24th December 2021, Reserve Bank of India (RBI) appointed its Chief General Manager Shri Yogesh K. Dayal as additional Director in RBL Bank’s (bank) Board. A day after, the bank’s board accepted the request of MD & CEO Shri Vishwavir Ahuja to proceed on leave with immediate effect (His term was to originally end in June 2022). It also approved the appointment of Shri Rajeev Ahuja, ED as the interim MD & CEO, which had the consent of RBI with a caveat that it shall be for three months effective 25th December 2021. To reduce the impact of the above developments on the bank's business and address any concerns among investors and depositors, the bank as well as the regulator issued clarifications. Both  emphasised that the bank’s financial records are satisfactory and the investing/depositing public need not have any concern on this score. Reasons for comfort: RBI said the bank has a ...

Unpleasant Cross Selling Techniques  Last month, my friend’s sister, single and living in India, died suddenly. My friend, settled in US, flew down to perform the final rites and other rituals. He faced the issue of liquidity to pay for all expenses, as he had to rush in immediately. The deceased was an ex-staff of a reputed public sector bank. As I happened to know some of the officials of the PSB concerned, I requested for their help. I even assured that I can be counted as a surety for any amount that will be paid from the deposits of the deceased to her brother, the only legal heir to her estate. Fortunately, there was no need to seek approvals for any deviation on this score, as all deposits were in the joint names of the deceased and her brother, styled “either or survivor”. The lowest value of the several deposits held on that date was Rs. 14 lacs and my friend’s need for meeting the expenses was Rs.8 lacs.  The branch extended all courtesies in helping him to encash Rs...

RISK BASED PREMIUM FOR INSURED DEPOSITS: NEED OF THE HOUR INCREASE IN INSURANCE COVER: DICGC, which insures bank deposits of eligible customers of commercial/cooperative banks, has increased its coverage per depositor from Rs. 1 lac to Rs.5 lacs with effect from 4th February 2020. The Act has been amended recently to stipulate, among other things, that the claims of depositors, in the case of invocation of insurance, should be settled within a time period of 90 days. Since the cover is per depositor, DICGC has also given some examples, in its website, as to how the cover can be maximised by holding the deposits in joint names in different styles/capacities. With the increase in insurance amount, 98.1% of the total deposit accounts and 50.9% of the total eligible (assessable) deposit amounts of the covered banks are insured as on 31st March 2021. PMC Bank depositors may be the first set of beneficiaries to receive the claim under DICGC, after the increase in insurance cover and redu...

Amalgamation of PMC Bank with Unity SFB:  Whether depositors and employees of PMC protected? RBI placed in public domain a draft scheme of amalgamation of The Punjab and Maharashtra Cooperative (PMC) Bank with Unity Small Finance Bank Ltd. (USFB). The regulator appear to specialise in being different each time, when reconstruction/ amalgamation schemes are announced for rescuing depositors and employees of ailing banks. The reconstruction plan of Yes Bank, a private sector bank, was carried out protecting all depositors, equity share holders, employees and other creditors with the exception of Tier-I Bond holders, whose claims were written off. In the case of LVB, a private sector bank again, its depositors, employees and other creditors were protected, but the claims of equity shareholders and Tier-II bond holders were nullified. In the case of  South Indian Co-operative Bank (SICB) (merged with Saraswat Bank), while depositors holding money up to Rs.1 lac were full...