Showing posts with label Banking. Show all posts
Showing posts with label Banking. Show all posts

Wednesday, 20 March 2019

mutual funds to invest in

March 20, 2019 0
Man is very emotional when you are investing his earned money in the market. Trying to earn a better return in the future to achieve your financial goals. Bull Market has a great advantage when investing in the stock market. On the other hand, bear market investment has suffered huge losses. If you are a small investor, it is very difficult to survive in a recession. Therefore, the mutual fund helps in such situations. Mutual Funds combine the money of many small/big investors and manage money through the experts, researchers, analysts, such experts. The holders of all the fund units are benefited by their knowledge and experience. It is important to know how to invest in a Mutual Fund.
moneyindianeconomy

MUTUAL FUND TO   INVEST IN  How to invest in a mutual fund.
Now you have seen how the mutual fund works. Now you will see how and where to invest in a mutual fund for better returns.

What are the requirements for investing INVEST IN MUTUAL FUND?
PAN PAN Card
Bank account
KYC
It is compulsory to have the name of a bank account in the name of the same person. Both MICR and IFSC are required. Both of these things are printed on a bank check.

How to KYC
According to SEBI regulations, all investors are obliged to do KYC. Documents with an application for KYC

Recent photo (Passport size)
ID card: - PAN card, Aadhar card, passport, voter identity card or driving permit license.
Address proof: - Telephone bill, electricity bill, gas bill / passbook, bank passbook, passport copy, etc.
All copies of the above documents should be photocopied and copied. (self attaested) and application must be accompanied by a standard document which can be displayed on demand. If there is no original document, it is necessary to make it true copy by the concerned officer. KYC status can be checked online on KYC registration agency website.

How to do e-KYC

Mutual fund application
For investing in a mutual fund, it is necessary to fill the application form of that scheme. If you are going to SIP for this scheme, you will have to fill out another payment related application. Only the parent can invest if you are investing in small children. There is a need to submit documents showing childhood relationships. Eg Birth certificate

Select a mutual fund option
There are 3 options to invest in a mutual fund. Growth, dividend, and dividend reinvestment. You have to choose one of these options.

Growth: You do not get a dividend in this option. Increasing investment leads to growth. The unit holder does not get anything. Increases in NAV of units. The difference between investment NAV and NAV at the time of sale is profit or loss.
Dividend income Dividend Payout: Income from investments is distributed through dividends. If there is a debt fund, then it receives a monthly, quarterly, half-yearly, or annual dividend. If there is an equity fund, then dividend returns when it is announced. Dividend yields only if the fund has the advantage.
Dividend Reinvestment: Instead of giving a dividend to the unit holders, units of that price are paid, which means the dividend is reinvested.
Where to buy a mutual fund.
Buying a mutual fund can be done in many ways. Online or offline, directly or in regular types of schemes.

Direct Plan: This fund can be purchased without any intermediary. These funds are available from 1st January 2013. Click here to know more about this.
Regular plan through an intermediary: Such types of investment are made through an intermediary. Banks, financial advisers, stockbroker companies or distribution companies play an intermediary role. All these arbitrators are registered with AMFI. All the things required for investment are mediator.
Directly investing in AMC: Going directly to AMC's office can be invested by completing other forms by filling in the form.
Investment Based on Website: Nowadays, most of all AMC's funds are sold online through some websites. These websites provide all kinds of facilities online.
Through Bank: Banks distribute all AMC funds around. You go directly to the bank and invest in a mutual fund.
By Demat Account: If you have a demat account, then you can invest in online mutual fund.

Monday, 1 October 2018

Finance Institutions And Insurance

October 01, 2018 0
                                                   Industrial Finance Institutions In India 


Industrial financing institutions can be classified as follows.
                                   
           
                                      
1) National level institutions 

2) State level organizations


 Industrial Finance Corporation of India (IFCI)

Establishment: 1st July 1948, the first development bank in India.
Headquarters: New Delhi
Work: financial and non-financial support to the medium and large industries (public and private sector).
IFCI is a sick financial institution as NPAs increase. On July 1, 1993, the company was converted into a public limited company under the Companies Act 1956.




Industrial Credit and Investment Corporation of India (ICICI)

Established: On January 5, 1955, with the cooperation of the Government of India, the World Bank and some private individuals. (ICICI) was established as a public limited company. (ICICI) started its work on April 14, 1955.
() The bank was set up primarily for private enterprises. However, ICICI Bank financed all the sectors.
In 1994, ICICI founded ICICI Bank in the private sector.
On March 3, 2002 ICICI merger was done in ICICI Bank. This merger is called a reverse merge. ICICI is the first global bank in India. Such a bank which provides all types of financial services under one roof.

Industrial Development Bank of India (IDBI)

In July 1964, it was established as an affiliate of RBI (IDEBI). Based on the nature of industrial development bank in Canada, this bank was designed.Indian 



Small Industries Development Bank of India (SIDBI)

Establishment: As per the SIDBIAct 1989, on April 2, 1990, as IDBI's affiliate organization SIDBI was established. In September 2000, SIDBI amended by the law SIDBI was separated from SIDBI.
(sidbi) headquarter is located in Lucknow.
  The main task of SIDBI is to initiate and finance small enterprises.


LIC LIFE INSURANCE CORPORATION OF INDIA

LIC Life Insurance Corporation of India is headquartered in Mumbai. LIC has 7 zonal offices and 101 division offices. LIC has offices in India, England, Mauritius, Fiji, and other countries. LIC's monopoly remains in the field of life insurance.



Tuesday, 25 September 2018

# Mutual Funds

September 25, 2018 0
                                                                                Mutual Funds
Money Indian Economy 
Mutual fund is a financial institution established as a trust. Develops a variety of investment plans and sell units to those who invest in it. The amount deposited in the units from the sale of units is invested in shares, debentures, bonds, etc. of the stock market companies. The dividend payable to the unit holder is given to the mutual fund through this investment.


Type of Mutual Funds

1) Equity funds

2) Debt Funds

3) Hybrid funds

4) Money market funds


Equity funds: - Funds investing in equities and shares are called equity funds.

Debt Funds: - Funds are investing in bond securities are called debt funds.

Hybrid Funds: - Funds investing in both stock and bond securities are called hybrid funds.

Money Market Funds: - Funds investing in money markets are called money market funds.these are short term fund.

History of Mutual Funds

The first mutual fund in the world was established in 1822 in Belgium . In 1868 "Foreign and Colonial Government Trust" mutual fund was established in England. In the early 20th century, the concept of Mutual Fund was spread across America. In the United States, three mutual funds were set up in 1924. During the second world war, mutual funds increased significantly.

Development of Mutual Funds in India: -

On July 1, 1964, the first Mutual Fund Unit Trust of India was established in the public sector in India. After that, only UTI was working in India for the last 23 years.
In 1987, the government allowed public banks to set up funds in the mutual fund sector. 1987 " SBI Mutual Fund" is the second mutual fund of India. After that many public banks have set up mutual funds. For example, Canara Bank, Punjab National Bank, LIC, etc.
On the 14th of February, 1992, the Government opened the private sector to set up a mutual fund to see the increase in the funding of the mutual fund industry.

In 1993,r Kothari Pioneer, the private sector's first mutual fund, was formed.

In 1994, Morgan Stanley was the first foreign mutual fund comes in India.

The Association of Mutual Funds in India (AMFI) was established in 1995 for Self Regulation to finance the mutual fund industry.

Unit Trust of India (UTI)

Under the initiative of the then finance minister T.T. Krishnamachari, the UTI Act -1963 was passed. The work of UTI started on 1st July, 1964. On the same day, UTI started selling the largest plan (US -64) units.

UTI was established for the two major objectives

1) Collect savings by encouraging people to save between medium and low-income groups.

2) Similarly of giving industrial benefits to the people in the country.

Monday, 13 August 2018

CRR,

August 13, 2018 0

                                           What is CRR, SLR & Repo Rate?


Money Indian Economy

CRR ( Cash Reserve Ratio)

All banks have to deposit deposits in cash in the form of cash (Net Demand and Time Liability) in the form of cash held by them. This is known as CRR (Cash Reserve Ratio)

If the CRR is increased, the banks have to deposit more money in the Reserve Bank. Therefore, banks have less money to build credit money. In contrast, if the CRR rate is reduced by the Reserve Bank, the banks will have to keep the minimum amount in the Reserve Bank.

SLR: (Statutory Liquidity Ratio)

Banks have to keep some amount of their total net worth (Net Demand and Time Liability). They can be kept in cash, government securities and gold. This is the standard called statutory liquidity ratio.

If the Reserve Bank raises the SLR, the banks have to keep a lot of money in them, so they can not use it to make credit money. In contrast, if the Reserve Bank lowered the SLR rate, the banks would have to keep a low amount of money themselves.

Reserve Bank's Repo transaction:

Repo Rate: 

The Reserve Bank will offer loans to banks by buying government bonds from banks. These loans are for one day or three days for sale. On the next day, the banks repurchase the government securities and repay the loans taken by the Reserve Bank. This transaction is called repo transaction. The Reserve Bank, which charges the interest rate, is called a repo rate.

Reverse Repo Rate:

In this transaction, banks are allowed to buy government bonds for short term from the Reserve Bank. Banks in a way lend a loan to the Reserve Bank. The Reserve Bank repurchases these bonds the next day and returns the loans made by the bank. The rate at which banks charge the transaction in this transaction is called a reverse repo rate.

Bank Rate:

If the short-term capital adequacy is to be completed, the bank will deal with the repo. However, if the bank wants to increase liquidity, the bank will take loans from the Reserve Bank, the interest rate charged on that bank rate will be called a bank rate. In short, the rate at which the Reserve Bank lends to banks is a bank rate.

Thursday, 2 August 2018

Reserve Bank Of India

August 02, 2018 0
                                                                   Reserve Bank of India 



Establishment of Reserve Bank :

According to the report of the Royal Commission on Indian Currency and Finance (also known as the Hilton Young Commission) in 1926, the Reserve Bank of India was established on 1st April 1935.
The Reserve Bank was nationalized in 1949.
After the Hilton Young Commission and Round Table Conference, it was decided to set up a Reserve Bank in India. On March 6, 1934, Parliament passed the Reserve Bank Act 1934. Initially, the share capital of the Reserve Bank was 5 crores. It was divided into five lakh shares of 100 rupees. At the time of establishment, the Directorate of Directors of 16 Directors was set up. Until 1948, the Reserve Bank also worked as the central bank of Pakistan.

The Reserve Bank is the central bank of the country and its work area is also very broad. The Reserve Bank has to do the following functions as a major bank.

1) Currency Issuer :

Reserve Bank has given monopoly to bring currency notes in the country. There is an independent department working in the Reserve Bank.

2) To work as a government bank:

Another important task of the Reserve Bank is to act as a government bank, agent, advisor. It is the responsibility of the Reserve Bank to keep cash and central government funds and accept the payment on their behalf. Government's public debt arrangement If the central government or the state government is in need, it can take loans from the Reserve Bank.


3) Bank of banks and final lender:

The Reserve Bank has given various powers to the money market to control the credit and banking system of the country. The Reserve Bank works with clearing. It also offers a number of facilities to banks. The Reserve Bank helps the bank get into bank economically collapse situation  and helps to get out of the financial crisis. Therefore, the Reserve Bank is called a bank of banks and the last lender is also called.


4) Foreign exchange management :

According to the Reserve Bank Act 40, it is the responsibility of the Reserve Bank to keep the foreign exchange rates stable. The Reserve Bank uses monetary and fiscal policies to control the rupee's external value. According to the Foreign Exchange Act 1947, the Reserve Bank can control the foreign securities and the payment made to a person living in another country.

5) Credit Control:

The Reserve Bank controls the credit money generated by other banks. To change the bank rate for this. Open market operations, etc.


6) Customer Service Department:

The Reserve Bank is committed to strengthen the grievance  mechanism to protect the bank's rights and increase the level of customer service. One part of it is the customer service department.

Monday, 30 July 2018

Banking System

July 30, 2018 0
                                                           Bank System



Indian banking system is divided into two parts.

1) Indian money market

2) Indian Capital Market

Indian Money Market:

 It involves short-term money transactions. Money market transactions are less than 13 months old.
Documents used in this market are called bills or papers.
Money market is a good option for secured investment. Profit is guaranteed, even though there is not a great deal of profit in this market.
Money market is divided into two types of area.

1) Unorganized sector: It includes lenders, local banks, non-banking financial institutions.

2) organized sector: There are commercial banks in it.

The Reserve Bank works as a regulator for the organized sector.

Indian Capital Market:

Here the medium and long term money transactions happen.
Documents used in this market are called shares or bonds.
The Government of India,Reserve Bank, NABARD, SEBI,plays the role of the intermediary in the capital market.


 Indian Money Market:

Call Money Market:

These are very short-term transactions. These are the transactions for one day / overnight or for a few days. 80% of the borrowing in call money market in India is provided by major organizations of IDBI, LIC,GIC. In this case, there are also lending banks, whereas borrowers are also bank.
Interest rates in bank banks are linked to the LIBOR-London Inter Bank Offered Rate
RIBOR- Reserve Bank Inter Bank Offered Rate
With these interest rates

Treasury bill:

The Government of India raises money for short-term by selling Treasury bills. These transactions happen through the Reserve Bank. It means that if there is a lending government of India, there are different borrowers and commercial banks. Such bills are for 14 days, 91 days, 182 days, and 364 days.

Commercial Bill Market:

Certificate Of Deposit:

 Certificate of Deposit Bank will sell for at least one lakh rupees. Their period ranges from 3 months to 1 year. Such a certificate of deposit has a face value.

Commercial Paper:

Different companies sell commercial paper to raise money from the money market. Companies can sell commercial papers worth at least Rs. 25 lakhs. The deadline is 3 to 6 months.


Indian Capital Market:

The Government Securities Market:

The Reserve Bank is raising money for the government by selling long-term government securities with the central government and the state government.
Government securities have high security and high liquidity, so they are called gilt as security. The market is called Gilbert's Market. (Gilts means gold)

Industrial Securities Market:
The transactions of securities other than government securities are traded in the industrial securities market. In this market, old and new companies sell securities in the form of shares or bonds. So this market is called Share Market or Stock Market.

Sunday, 29 July 2018

Indian Bank System and Improvements

July 29, 2018 0
                                                   Indian Bank System and Improvements


Money Indian Economy

 Banks can be divided into two groups.

 1) Scheduled Bank

 2) Non-scheduled Bank


1) Scheduled Bank:

In this, banks come in which the second Schedule of Reserve Bank of India Act 1934 has been scheduled.

2) Non-scheduled Bank:

These banks are not included in the second schedule of the Reserve Bank's Act.


Banks can be classified on the basis of ownership

1) Public Sector Banks:

a) State Bank of India
b) 19 nationalized banks
c) Regional Rural Bank

2) Private sector banks

!) Indicator Stock Bank in India
!) Foreign Bank


Banking Improvement Committees:

1) Verma Committee:

The Reserve Bank of India constituted the Verma Committee for the purpose of revival of the weakening public sector banks. Committee submitted its report on October 4th, 1999. According to the committee's recommendation, such strategies should be used to revive the weak banks (Uco Bank, Indian Bank, United Bank of India), which will increase the profit of these banks and reduce the cost of management.

2) Narasimhan Committee:

Narasimhan Committee  was formed to suggest banking reform. This committee gave its report in 23 april 1998. Earlier  suggesting a full improvement in the financial sector the committee was constituted under the chairmanship of Narasimhan. At that time, the Indian Finance Minister Dr. Manmohan Singh was there. Then again While P. Chidambaram was finance minister, a committee headed by Narasimhan was formed to improve banking sector.

3) Damodharan Committee:

Former president of SEBI  S.Damodhran Committee  submitted its report to 2011. This committee has suggested the following important recommendations in the banking sector.

1) Minimum balance can be canceled within the savings bank account for check book and ATM facilities.

2) Facilities like passbook print should be provided free of charge to the account holders.

3) Fix diposit should not be renewed without the consent of the account holder and without any written consent.

4) Insurance cover with savings account should be increased from 1 lakh to 5 lakh.

5) After expiry of the home loan, the property documents should be given within 15 days to the owner of the property.

Thursday, 26 July 2018

Indian Banking System

July 26, 2018 0
                                                     Indian Banking System




In 1770, Bank of Hindustan was established by Alexander and Company in Calcutta. It was the first bank to be established in India.

In 1881, Avadh Commercial Bank was established. It was the first bank to have limited liability by Indians.

Punjab National Bank was established in 1894. The first bank operated entirely by Indians.

Three Presidency Banks were established in India.

1) Bank of Bengal (1806)

2) Bank of Bombay (1840)

3) Bank of Madras (1843)


Imperial Bank was formed in 1921 together with all the three Presidency Banks.

State Bank of India:

In 1951, the All India Rural Credit Survey Committee was established under the chairmanship of Dr. A. D. Gorwala. Under this, Imperial Bank should be converted into State Bank of India. Accordingly, Imperial Bank was converted into State Bank of India in July 1955.

Reserve Bank of India:

According to the Hilton Young Committee recommendation, Reserve Bank of India was established in 1935. At the time of the establishment, the Reserve Bank was in the private sector. The Reserve Bank of India was nationalized in 1949. Since then, he has been working as a bank of the Government of India.

Nationalization of Banks:

Nationalized 14 banks of Private banks whose deposits were more than 50 crores in 1969 Smt. Indira Gandhi was the Prime Minister of India at that time. In addition, National Bank of 6 banks, which had more than 200 crore deposits in 1980.

In 1969, the Indian government had banned the establishment of a private bank. The ban in 1993-94 was canceled. On September 4, 1993, New Bank of India was merged with the Punjab National Bank. So, the number of nationalized banks is 19.

Lead Bank:

According to the recommendations of Dhananjay Gadagil Committee and according to the proposed structure of F. Nariman Committee , the Lead bank scheme was started in 1969. Regional development approach was the basis of this. District was selected for regional development.

Regional Rural Bank (RRB's)

Regional rural banks were established in the year 1975. 196 banks had been set up under this, but they are currently merged. So their number is decreasing.

Banking Ombudsman Scheme

Since 1995, Bank Ombudsman Scheme has been started from June 1995 for the purpose of improving customer service in the Indian bank.