Bharti AXA Life launches Aajeevan Anand

private sector insurance company Bharti AXA Life Insurance today launched Aajeevan Anand plan that provides guaranteed regular payouts after every 5 years and life cover until the age of 100 years.

"Aajeevan Anand is a powerful financial solution that provides guaranteed regular payouts to meet various life stage needs until the age of 100," Bharti AXA Life Chief Marketing and Operations Officer (CMOO) Mark Meehan said.

In addition to these lifelong paybacks, the product provides customers with life cover and hence is an ideal savings cum protection plan, he said.

This whole life plan is apt for salaried people since all premium payments are made in the first 10-15 years of the policy, he added.

The nominee of the policy holder would get sum assured in case of death during the policy period which is 100 years.

Bharti AXA Life is 74:26 joint venture between Bharti Enterprises and AXA of France.

Mobile banking is poised to grow rapidly in India.

ATM and internet banking have been around in India for a while. While both modes have had some success, penetration and use levels have been moderate.

While ATMs offer convenience, they pose a perceived security threat in India given instances of mugging around them. Senior citizens and women appear reluctant to use ATMs if they have a choice to go to a branch and withdraw money in safety. The security situation in India shows little sign of improvement and therefore a large scale proliferation of ATMs will remain a challenge. Internet banking, on the other hand, relies on PC and internet penetration. Estimates suggest that there are approx 40 million internet users which is expected to rise to 100 million soon – despite this growth, penetration and use levels remain low, especially in non-metro areas. Research also suggests that internet banking is picking up amongst the target user group.

While internet penetration and use in India is relatively low, mobile phone penetration is much higher and growing rapidly. There are over 200 million mobile phone subscribers in India and the number continues to explode. Financial services companies are now working with mobile payment players like mChek to offer innovative mobile phone solutions to urban and rural Indian population. Reserve Bank of India has restrictions on non-bank involvement in money transfer. Therefore, development of mobile financial services applications is being sponsored primarily by banks in India.

Economic Times reports that Citigroup has tested a proposition which allows brokerage to respond to margin calls or enhance credit limits, by authorising transactions over the mobile phone. Once the customer and broker sign up for the application, the process is carried out by PIN validations. A one-time PIN is generated for each transaction, which is verified by the customer, after which the bank validates the transaction and sends it to the broker. Once the transaction is completed, the customer is intimated on his mobile phone again. Citi and mChek are also exploring the possibility of a similar offer for mutual funds. They have also launched a mobile application which enables farmers to receive money for sale of produce through their mobile phones. These payments take the form of ‘intent to pay’ information that can be cashed at partner banks.

The paper also reports that Visa recently announced the launch of its Visa Money Transfer on Mobile service, which will enable money transfer via the mobile phone. Initially, this service will be a pilot program available to Visa cardholders of Corporation Bank, HDFC Bank and ICICI Bank. The recipient can be a Visa cardholder of any bank in India and the money can be transferred to his/her mobile phone or Visa card.

Mobile banking has the potential to bring a whole host of people that have no/little access to land lines/internet connections onto the electronic platform – an innovative way to generate financial inclusion. To do so successfully will require customer training, technology stabilization and managing carefully the ‘know your customer’ issues.

India having the most versatile Insurance industry

India has registered a tremendous economic growth over the last decade and the insurance sector has grown with it.

India boasts one of the most versatile insurance industries in the world going by the number of insurance policies on offer and continues to portray huge potential.

Today, according to market survey, the insurance sector in India together with the banking industry contribute about a sizeable seven percent of the country’s gross domestic product not to mention that the government owned Life Insurance Corporation (LIC) has access to funds equaling eight percent of the country’s GDP.

Valuated at $10 billion, the insurance industry in India received major encouragement when in 1999 the government of India put an end to its monopoly on the sector by passing the Insurance Regulatory and Development Authority (IRDA) Bill which did away with all barriers on the entry of private investors besides allowing for foreign investors to come on board with however some limits on direct ownership.

Foreign investors are allowed up to twenty six percent ownership in any insurance company although there is a bill pending that seeks to have this figure increased to forty nine percent.

This however has not slowed down the amount of foreign investment since government records show that in that decade the sector has benefited from an injection of up to $193 million dollars while witnessing the inception of twenty seven new insurance companies. The economy in India has gained from this.

The sector derives its success from the fact that most Indian citizens view life insurance as a way to pay less tax and with innovative insurance products and aggression from the competing insurance companies the sector continues to register new clients at an impressive rate. It is no wonder that most state banks in India include insurance services among their products.

The insurance sector can largely be divided into two sub sectors namely life insurance and the non life insurance. The LIC continues to dominate the life insurance sector and has been recording average annual growths ranging at about thirty five percent although the non life insurance sector is doing much better with growths of more than a hundred percent in the same breath over the last few years.

The huge potential for the sector is mainly underlined by the fact that only about a fifth of India’s insurable population has life insurance cover which presents huge avenues for growth in the near future.

india's Q2 gdp

India's economy grew a faster-than-expected 8.9 percent in the September quarter from a year earlier, government data released on Tuesday showed. The economy grew at 8.8% during the previous quarter.

Q2 mining output was at 8% whereas energy output was at 3.4%.

The growth estimates got a leg up as the industrial sectors, which account for approximately 20% of the overall GDP, got a boost in the second quarter due to the lower inflation numbers under the new series.

Lower inflation numbers gave a statistical boost to industrial growth estimates and national income numbers, compared with those estimated using the old series.

Rupa Rege Nitsure, Chief Economist, Bank of Baroda , said: "This indeed is a very strong reading despite the fact that we had seen some easing of industrial production in the second quarter. With this reading, achieving a 8.5 percent for full year growth target is not going to be difficult. From a market perspective, this means that India will attract more capital inflows and it will put upward pressure on the rupee."

"From the central bank perspective, this data will enable them to concentrate on inflation management. I expect the Reserve Bank of India to continue caliberating monetary policy. I expect another 25 basis points increase in both repo and reverve repo rates in the December policy and depending on the intensity of capital flows that the country attracts, there is a strong possibility of a CRR (cash reserve ratio) hike in the fourth quarter," added Nitsure.

Annual headline inflation eased to 8.58 percent in October from a year earlier, lowest in last 10 months. Asia's third-largest economy is expected to grow 8.5 percent in the current fiscal to March 2011.

The economy, which had grown more than an annual 8 per cent in the last two quarters, has been riding on robust manufacturing activity and the outlook for farm output has brightened following good monsoon rains.

The central bank's next monetary policy review is on Dec. 16. Analysts polled by Reuters expect the RBI to raise rates by an additional 25 basis points by the end of the fiscal year that ends in March.


India's economy grew a faster-than-expected 8.9 percent in the September quarter from a year earlier, government data released on Tuesday showed. The economy grew at 8.8% during the previous quarter.

Q2 mining output was at 8% whereas energy output was at 3.4%.

The growth estimates got a leg up as the industrial sectors, which account for approximately 20% of the overall GDP, got a boost in the second quarter due to the lower inflation numbers under the new series.

Lower inflation numbers gave a statistical boost to industrial growth estimates and national income numbers, compared with those estimated using the old series.

Rupa Rege Nitsure, Chief Economist, Bank of Baroda , said: "This indeed is a very strong reading despite the fact that we had seen some easing of industrial production in the second quarter. With this reading, achieving a 8.5 percent for full year growth target is not going to be difficult. From a market perspective, this means that India will attract more capital inflows and it will put upward pressure on the rupee."

"From the central bank perspective, this data will enable them to concentrate on inflation management. I expect the Reserve Bank of India to continue caliberating monetary policy. I expect another 25 basis points increase in both repo and reverve repo rates in the December policy and depending on the intensity of capital flows that the country attracts, there is a strong possibility of a CRR (cash reserve ratio) hike in the fourth quarter," added Nitsure.

Annual headline inflation eased to 8.58 percent in October from a year earlier, lowest in last 10 months. Asia's third-largest economy is expected to grow 8.5 percent in the current fiscal to March 2011.

The economy, which had grown more than an annual 8 per cent in the last two quarters, has been riding on robust manufacturing activity and the outlook for farm output has brightened following good monsoon rains.

The central bank's next monetary policy review is on Dec. 16. Analysts polled by Reuters expect the RBI to raise rates by an additional 25 basis points by the end of the fiscal year that ends in March.

New number for taxpayers for tax filing

The unique Document identification number (DIN), on the lines of numbers like PAN and TAN, will be quoted on "every" income tax-related communication, including returns to be filed next year for the financial year 2010-11. Taxpayers will now have to procure a 'new number' for filing returns and making any communication with the Income Tax department.

According to the new guidelines brought out by the Central Board of Direct Taxes (CBDT), the DIN will be mandatory "in respect of every notice, order, letter or any correspondence" with the department, by the taxpayers.

"The DIN will be generated by the I-T department and will be useful, essentially, for error-free filing of tax returns, claiming refunds and other communication with the department by the assesses," a senior Finance Ministry official said.

The 'Aykar Sampark Kendras' will hand out the DIN from this month, the official said.

Assesses will not be put to any trouble, as the numbers will be generated and allotted by the department itself.

I-T officials will also be allotted the numbers in order to streamline the process, the official said, adding, the number has to be produced thereon for every activity with the department. Taxpayers and tax collectors are currently required to quote Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) among others when returns are filed with the department.

According to section 282B of the Income Tax Act that deals with DIN, if the document sent to the tax authority does not bear this unique computer-generated number then "such document, letter or any correspondence shall be treated as invalid and shall be deemed never to have been received."

DIN is aimed at bringing more transparency in tax administration as the whole exercise involves a number of documents and proformas. Apart from regular filing of taxes, a taxpayer deals with the department for various other financial services, which DIN will help to ease, the official said.

SEBI - Mutual Funds To Ensure Quality Of Debt Papers

SEBI has asked the concerned MFs to disclose in the offer documents how they would protect the investors money in these schemes, sources said, but refused to identify these fund houses.

Future offers would also have to abide by this SEBI directive, the sources said. Sources said the market regulator wants the fund houses to invest in debt papers which have got high grades from rating agencies.

This is to maximise returns of the fund from fixed- income instruments.Equity investment is done by MFs to increase the capital base of the fund.Sebi wanted to ensure that the capital of the investor is protected and that the fund house does not give negative returns.

"Sebi wanted to introduce a stringent capital guarantee provision for such schemes of MFs. They want to ensure that even if the fund house is not able to give positive returns, the money invested should be back," Value Research CEO Dhirendra Kumar said.

Currently new fund offers of two fund houses-- JP Morgan Asset Management and Sundaram-- are open for subscription. Investors to these schemes seek returns and minimise risk of capital loss by investing in a portfolio of fixed income securities.

Diversification of portfolios between fixed income and equities spreads risk across various asset classes and if an investor stays invested for longer term the risk arising out of volatility in the market is reduced, said a fund manager at a mutual fund.

Demat account shortage may take toll on FPOs

New listing guidelines may have set the stage for a rash of companies coming to the market, but an acute shortage of demat accounts threatens to stifle the participation of retail investors in the public issues, a key objective of the exercise.

Companies will have to dilute promoter stakes estimated to be worth Rs 65,000 crore, with 35% of the amount kept aside for retail investors, to comply with market regulator Sebi’s minimum public holding rules. But analysts say that looks unlikely because data from stock depositaries CDSL and NSDL show that there are just 4 million active demat accounts.

The number of demat accounts is not enough to absorb such a flurry of issues. The retail portion translates to Rs 23,000 crore, or Rs 52,500 an investor, (which is) virtually an unviable proposition.

An Edelweiss Securities report says 156 Indian firms will have to shed shares worth Rs 150,000 crore in five years to adhere to the new listing norms under which every company’s public float must be at least 25%. Of this, issues worth Rs 61,500 crore are due to be divested before March 2011.

But the contribution of retail investors in these followon public offers is expected to be low. On an average, only about 2 lakh new demat accounts are added in the country every month. Contrast this with nearly 100 times more mobile connections added a month.

In a country where 20 million mobile subscribers are added every month, the cumulative demat account is just 17 million with only 24% of them active. This means investors are still wary of making fresh investments in the stock market.

The dearth of demat accounts comes at a time when the poor response of retail investors in big FPOs such as NTPC and NMDC is still fresh in mind.

Yet, the issues are in no danger of flopping because help is at hand from foreign investors and retail portion will be insignificant , said an investment banker with a foreign firm. While Indians are turning out to be good consumers, they are not yet shaping up as good investors. Most people still treat the stock market as a place of gambling and casinos.