No penalty if credit card dues are paid within 3 days from the due date: RBI

 RESERVE BANK OF INDIA _________________ www.rbi.org.in

 RBI/2015-16/126 

DBR.No.BP.BC.30/21.04.048/2015-16

July 16, 2015 

All Scheduled Commercial Banks/Non-Banking Financial Companies/Primary (Urban) Co-operative Banks 

Dear Sir, 

Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Credit Card Accounts 

1.Please refer to circular DBOD.No.BP.BC.78/21.04.048/2013-14 dated December 20, 2013 on the captioned subject.

 2. In order to bring in greater credit discipline as also to provide operational flexibility to credit card issuers, it has been decided that, with effect from the date of this circular, ‘past due’ status of a credit card account for the purpose of asset classification would be reckoned from the payment due date mentioned in the monthly credit card statement. Consequently, in case of banks, a credit card account will be treated as non-performing asset if the minimum amount due, as mentioned in the statement, is not paid fully within 90 days from the payment due date mentioned in the statement.

 3. However, banks shall report a credit card account as ‘past due’ to credit information companies (CICs) or levy penal charges, viz. late payment charges, etc., if any, only when a credit card account remains ‘past due’ for more than three days. The number of ‘days past due’ and late payment charges shall, however, be computed from the payment due date mentioned in the credit card statement. Yours faithfully,

 (Sudarshan Sen) 

Chief General Manager-in-Charge

Tips to Secure Bank Account

>> Exercise caution when receiving unsolicited, unexpected, or suspicious emails

>> Keep anti-virus software and operating systems up to date

>> Enable advanced account security features, like two-step verification of credentials, if available

>> Create strong passwords for all your accounts

>> Enable account login notifications, if available

>> Always log out of your online banking session when finished

>> Monitor bank statements regularly for suspicious activity

>> Notify your financial institution of any strange behaviour you notice while using their service 

Pradhan Mantri Suraksha Bima Yojana

What is Pradhan Mantri Suraksha Bima Yojana?

Pradhan Mantri Suraksha Bima Yojana is a government-led accident insurance schemes that aims to provide accident insurance to all Indians in the unfortunate event death or permanent disability on account of an accident. This scheme is applicable for Indians under the organized as well as unorganized sector of labour. The scheme is linked to various public sector banks and units and major private banks also who have agreed to collaborate.

In a country like ours, where insurance percentage is even below the world average of 6.3%, schemes like the PMSBY are a great push towards insuring a huge chunk of population. Some of the main distinguishing features that set it apart from other such government-run insurance schemes are –

Extremely low premium payment

Higher coverage of up to Rs.2 Lacs

First time when social-security schemes have been linked with bank accounts to help unorganized sector be a part of the scheme and to foster deeper penetration across the country 

Higher inclusivity; both unorganized and organized sector people can avail this policy

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What are the Salient features of Pradhan Mantri Suraksha Bima Yojana ?

How to Secure Old age in India ?

Introduction

After successful launch of Jan Dhan Yojana, Prime Minister Modi had last week launched the ‘Pradhan Mantri Jivan Jyoti Bima Yojana’, ‘Pradhan Mantri Suraksha Bima Yojana’ and the ‘Atal Pension Yojana’ in Kolkata; another step forward to secure more population under their financial inclusion programme.

Objective of schemes

Best Investment : Public Provident Fund

PPF is money that will be yours forever.

Knowledge of the different features of the PPF account will help you when you want to take a loan against the account, withdraw from the account, re-activate a discontinued account etc.

Here an attempt is made to introduce you all features of PPF.

What is PPF?

Public Provident Fund (PPF) is a scheme of the Central Government, framed under the PPF Act of 1968. Briefly, PPF is a government backed, long-term small savings scheme which was initially started by the Government in order to provide retirement security to self-employed individuals and workers in the unorganized sector. Today the PPF is the Indian citizens’ darling investment avenue.

GOLDEN RULES FOR INVESTING WHEN INTEREST RATES ARE LOW

GOLDEN RULES FOR INVESTING WHEN INTEREST RATES ARE LOW

■ 1. Paying off debt may be your best investment, and low interest rates help you pay off loans faster.

■ 2. Know your tolerance to risk. “If you’re moving out of bank deposits you are taking on more risk,” 

■ 3. Don’t keep all your eggs in one basket. Spread your money across different types of assets to reduce your overall risk.

Learn How to create Wealth

 The gift of creating wealth:

To become really good at handling money and getting out of debt and getting on the road to becoming wealthy, read one or more of favorite financial books :

“I Will Teach You To Be Rich” by Ramit Sethi: This book is hugely popular with millennials and anyone who wants to learn more about personal finance without the boring parts. Sethi’s easy-to read and approachable style includes chapters like how to “Open high interest, low hassle accounts and negotiate like an Indian,” or “How to save hundreds per month (and still buy what you love.)”

“The Millionaire Next Door” by Thomas J. Stanley and William D. Danko: This book is a great guide to the habits that build wealth. Based on the principal that wealthy people didn’t become wealthy by acting that way, Stanley and Danko lay out the seven simple rules to follow to become wealthy.

It’s a must read for anyone just starting out and earning his first real paycheck because it teaches the basics of personal finance and helps the reader to develop good money habits right from the start.

“You’re So Money: Live Rich Even When You’re Not” by Farnoosh Torabi: Weaning off benevolent benefactors (parents, that’ you) and learning to live on an entry-level income, may come as a big shock to your grad’s preferred lifestyle. But if your graduate doesn’t learn to live within his means, especially when just starting out, he may quickly rack up even more debt on those new credit cards.

Torabi, a savvy financial reporter and 20-something herself, gives grads sensible advice to help them successfully adjust to their new disposable income level, and still enjoy some of the finer things in life.

“Why Didn’t They Teach Me This in School?: 99 Personal Money Management Principles to Live By” by Cary Siegal: The author originally wrote this book to pass on good money management skills to his five children. Since most high schools and colleges do not teach students even the basics of money management, this book features eight important lessons focusing on 99 principles that will quickly and memorably enhance any individual’s money management acumen. I like this book because it’s easy to understand and the principles are ready to use.

Atal Pension Yojana (APY)

Atal Pension Yojana (APY) 

1. Introduction

1.1 The Government of India is extremely concerned about the old age income security of the working poor and is focused on encouraging and enabling them to join the National Pension System (NPS). To address the longevity risks among the workers in unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement, who constitute 88% of the total labour force of 47.29 crore as per the 66th Round of NSSO Survey of 2011-12, but do not have any formal pension provision, the Government had started the Swavalamban Scheme in 2010-11. However, coverage under Swavalamban Scheme is inadequate mainly due to lack of guaranteed pension benefits at the age of 60.

1.2 The Government announced the introduction of universal social security schemes in the Insurance and Pension sectors for all Indians, specially the poor and the under-privileged, in the Budget for the year 2015-16. Therefore, it has been announced that the Government will launch the Atal Pension Yojana (APY), which will provide a defined pension, depending on the contribution, and its period. The APY will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA). Under the APY, the subscribers would receive the fixed minimum pension of Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would be based on the age of joining the APY. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by any subscriber under APY would be 20 years or more.  The benefit of fixed minimum pension would be guaranteed by the Government. The APY would be introduced from 1^st June, 2015.

2. Benefit of APY

Can Individual have two PPF Account ?

What if an Individual have two PPF Account in his/her name? 

An individual can open only one account in his name either in the post office or in the bank and he has to declare this in application form for opening the account. Persons having a PPF account in the bank cannot open another account in the post office and vice-versa. Only one account can be opened in one name. If two accounts are opened by the subscriber in his name by mistake, the second account will be treated as irregular account and will not carry any interest unless the two accounts are amalgamated with the approval of the Ministry of Finance (DEA). For this purpose the subscriber will have to write to the Under Secretary-NS Branch MOF (DEA), New Delhi-1 through the Accounts Office giving detail of each account. 

Who are allowed to Open PPF account on behalf of a minor

A Public Provident Fund account on behalf of a minor can be opened by either father or mother. Both the parents cannot open a separate account for the same minor. An individual may open one PPF account on behalf of each minor of whom he is the guardian. [MOF (DEA) letter No 7/34/88-NS II dated 17.11.1989] The grand father/mother cannot open a PPF account on behalf of their minor grand son/daughter when parents of the minor are alive. They can open the account if they are appointed as legal guardian after the death of the parents. Under the rules only father or mother can open a PPF account on behalf of minor son/daughter. If neither parent is alive or where the only living parent is incapable of acting, a person entitled under the law for the time being in force to have care of the property of minor can open a PPF account on behalf of the such a minor.

 [DG Posts letter No. 1-23/75-SB dated: 8.2. 1979]