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SEBI's new regulations on distributor examination and certification.....

SEBI's new regulations on distributor examination and certification, issued in June, 2010. As you are aware, since June 2010, Distributors are required to obtain Certification from National Institute of Securities Market (NISM), and the AMFI Certification Examination has been discontinued. In this regards, it may be further noted as follows:
  • For first time certification, candidates are required to undergo the new NISM-Series-V-A certification procedure to be NISM certified.
  • Further, to renew their existing certificate, Mutual Fund Distributors must appear for the NISM Continuing Professional Education (CPE) certification (instead of the AMFI Refresher Course) within the validity period of their existing certification. This is to ensure the validity of their certification and be able to continue selling Mutual Funds.
  • NISM has specified that distributors holding the valid Certificate will be eligible to appear for the NISM CPE only within six months prior to the expiry of their existing certification.

Details regarding the eligibility criteria and other information can be found at You can also contact them at

New Fund Offer in FMP - August 2011

New Fund Offer in FMP  - August 2011
July 29, 2011 4:43PM

Should I Buy Gold At Its All-Time High?

Should I Buy Gold At Its All-Time High?
Submitted by Simon Black

There’s one question that I’ve been seeing over and over for the last several weeks as the price of gold has taken out its all-time highs and continued a nearly uninterrupted ascent: Should I buy gold now?

It’s understandable, especially for people who don’t own precious metals yet. Nobody wants to be the sucker who buys gold at the top, only to watch it crater back to $1200 or below. But here’s some food for thought–

The US dollar is shattering historic lows against currencies like the Swiss franc, Australian dollar, and Singapore dollar. Any currency that isn’t a complete disaster is now being viewed as a safe haven. And the mainstream world is now, finally, waking up to the reality that the United States might actually default.

Never mind that the government has been insolvent for years and the evidence of such has been widely available to anyone willing to look at basic facts. Literally, only in the last week have people finally began to consider the possibility of a US default.

Here in Europe, the situation is arguably even worse. No one is being shy about a default in Greece– it’s discussed openly now by policymakers, and major financial institutions are preparing for a restructuring. And with its public debt more than 120% of GDP, Italy will not be far behind.

Governments no longer have the benefit of operating behind a curtain; their financial imprudence and technical insolvencies are now under the spotlight for all to see… and confidence is fading quickly.

The more people lose confidence in the dollar and euro, the more they look for alternatives. Large institutions and money mangers collectively control trillions of dollars within the financial system. Unallocated capital– funds held as cash and not being actively invested at the moment– must be held somehow, somewhere.

This is the chief reason why so many smaller currencies are surging. Compared to the dollar and euro, the Swiss franc looks incredibly safe, and money managers have a much higher degree of confidence that their Swiss bonds will be repaid than they have in the US or eurozone.

The more capital flows into these smaller currencies, the more they’ll appreciate against the dollar and euro. It’s simple matter of supply and demand– increased demand for the Swiss franc coupled with excess supply of US dollars means a stronger franc in US dollar terms.

Ultimately, this is the primary reason for gold to go higher in the long term.

Large financial institutions are increasingly looking at gold as a safe haven; it’s becoming less of a speculation and more of a store of value… and unlike most of the other available asset classes, precious metals are not politically sensitive.

Even stronger currencies like the Swiss franc have limits to their appreciation. At some point, the Swiss National Bank will impose capital controls to thwart the rise of its currency. Oil and agricultural commodity prices will likely be regulated and speculation outlawed if prices become too high.

But if gold goes to $2,000… $3,000… it may be an embarrassment to central banks, but it won’t become a populist issue. You won’t see any Tunisian merchants setting themselves ablaze because the price of gold is too high… and not too many politicians looking to fix the price.

Even if they do try to regulate gold prices or even make it illegal, you can be sure that the gold trade will continue to thrive in the rest of the world– especially in Asia and the Middle East.

So instead of worrying about buying gold at its all time high, ask yourself another question instead: Over the next few years, do you expect that these broken, bankrupt governments will inspire confidence among institutional investors, or do you think that confidence will continue to erode?

If you’re leaning towards the latter, you can be sure that more money will flow into gold, and that prices will rise.

Yes, there will be price fluctuations. Whenever the US government announces that it has finally reached a debt deal, there will probably be a correction. Given what’s coming in the next several months and years– debt downgrades, more budget battles, government shutdowns, asset seizures, etc., any correction will be a small blip along a long-term rising trend line.

And in case you’re still worried that you’d be a sucker to buy gold at $1600, consider that, if you don’t, in three years you’ll probably feel like a sucker for not buying gold at $1600 when you still had the chance.

Best Consistent Equity Funds in India

Source: Crisil 

Best Equity Linked Savings schemes in India (Ranked By crisil June 2011)

Source: Crisil

Best Large Cap Mutual funds in India (Ranked by Crisil June 2011)

For a detailed write-up on the CRISIL Mutual Fund Ranking for June 2011 and the complete ranking list, please visit

Best Performing Mutual Funds in India in different categories By Crisil

CRISIL Fund Rank 1 in key categories
(for June 2011)


SEBI new guidelines for the mutual fund industry.. July 28, 2011

July 28, 2011
Market regulator SEBI today announced new guidelines for the mutual fund industry. New investors will now have to pay an additional Rs 150 for investment of Rs 10,000 and above in mutual funds, while the existing investors will be charged Rs 100 as transaction fees, For investments up to Rs 10,000, there will be no transaction charge. For a new customer, there will be a fee of Rs 150, additional amount of Rs 50 can be charged from first time Mutual Fund investor, Transaction fees would be imposed on transactions other than purchases/subscriptions relating to new inflows, and direct transactions with the Mutual Fund. Investors, who take the systematic investment plan (Sip) will also have to make a one-time payment of Rs 100 (recoverable in three or four installments).

As per the Sebi chairman UK Sinha, "It [transaction fee] is some way to compensate the distributors, who may have lost interest in the distribution of mutual fund products. The idea is that distributors have to be incentivised," Sebi’s steps are in the right direction in recognizing the role of the distributor.

Uniform KYC Process There will be only one Know Your Customer (KYC) requirement for transaction with all intermediaries, regulated by Sebi. It was also decided that Unique Identification Document (UID) number will be included in the eligible documents that can be presented as an identification of the customer as part of the KYC process.

"We want to come with uniform and simple KYC regulation [and] for this, we will set up KYC regulation authority...This will help in creating inter-connectivity between different market segments," Sebi Chairman UK Sinha told reporters after its board meeting.

Reliance mutual fund's SMS services for investors!!!

You can now 'Get Instant'... NAVs, Scheme Balances, Dividend Alerts, Transaction Alerts, SIP debit Alerts, Alerts on change of details, all through SMS on your registered mobile phone.

All you need is to "Register Your Mobile Number", if your mobile number is registered you can able to use this facility if not then submit a written registration form duly signed and send it to the nearest RMF branch 'click here' to download Registration Form or call this number for mobile registration 1800-300-11111

Whats more, you don't pay any additional charges for any of these messages, just the standard SMS price.
Try it out! Simply send below SMS to 966 400 1111 get SMS instantly.
'Remember to save the number 966 400 1111 to your phonebook'.

Dividend declared in Franklin India High Growth Companies Fund (record date 22 July 2011)

Franklin Templeton Mutual Fund has approved the declaration of dividend under Franklin India High Growth Companies Fund .

The Dividend details are as follows:
The record date is July 22, 2011, The quantum of declaration will be 5% (Rs. 0.50 per unit on Face Value of Rs.10)All investors registered under the dividend option of the above schemes as on July 22, 2011 will receive the dividend.

Why one should select Term Plan + mutual Funds??

"The term plan+mutual funds combination is financially the most efficient."

Ulips levy a number of other charges besides the fund management charge (that a mutual fund also charges) and mortality charge (that a term plan charges). They levy a premium allocation charge (PAC), an administrative charge, and so on.

The cost structure of Ulips is also complicated. For the lay buyer it can be hard to know what the charges are and what their implications on his final returns will be, especially at the time of purchase. (Later, of course, he will get statements from time to time, but by then it will be too late).

Therefore, in the first place, the mutual fund-term plan combination scores by having a lower and more transparent cost structure.

 Mutual Fund V/s Ulips

Another problem with Ulips is that an insurance company offers only a limited number of fund options.
If the funds offered by the insurance company underperform, the investor does not have the option to exit his current fund and invest in a high-return fund from another company (until the lock-in period is over). On the other hand, if he invests in mutual funds, he can easily exit his current underperforming fund (most mutual funds do not have an exit load after one year), and choose from any one of the hundreds of funds available in the market.

Mutual Fund V/s Endowment and money back life insurance Plans

Traditional products such as endowment plans and moneyback plans too have drawbacks.

The biggest is that they offer simple interest, whereas if you invest in a mutual fund or even in a PPF, your investments grow through compounding.

As we well know, the effect of compounding is powerful, especially over the long term.

The second disadvantage of traditional products is that they have a high allocation to debt products. This, too, affects their returns: over the long term, as we know, returns from equities trounce those from debt.

Another disadvantage of insurance-cum-investment products belonging to insurance companies is that despite paying a hefty sum of money as premium, the family could still be under-insured.
Since term plans are inexpensive, one can buy adequate amount of cover through them.

Source: ValueResearch

Whether deductions from income tax is available when you invest in mutual funds schemes in India?

I hear such type of queries from clients who are new to mutual fund investments; as they want to invest in mutual funds so that they get tax benefit (deductions from income),  or they invested in some mutual funds but not sure whether they get tax benefit or not??

Yes Tax benefit is available when you invest in Mutual funds schemes but that tax benefit is available when you will invest or have Invested in Equity Linked Savings Schemes (ELSS Funds) or Pension Plan scheme of Mutual Funds in that financial year.

ELSS Fund (Equity Linked Saving Schemes)

Tax benefits are available under 80C
But this is going to be last year for ELSS Funds as from April 01, 2012 ELSS Schemes will be removed from 80C (as per direct tax code)

Maximum Limit for investing in ELSS Funds
Maximum Limit – Rs. 1 lakh.

Lock in Period:
Lock-in period – 3 years, but if you are investing in ELSS Fund through SIP route then your EACH sip will be locked for 3 years.

Explained here:

Explain Lock in Period if investment is in ELSS Funds Through SIP (Systematic Investment Plan)

  Pension Plans of mutual Funds
 Pension Plans are central government notified pension scheme from the private sector. The pension funds are basically balanced funds i.e upto 40% of its assets in equities and the remaining in fixed income instruments. Investments in the fund are eligible for tax benefits under Section 80C.

Lock in Period
when you will reach 58 years but premature withdrawal is allowed in pension plans after 3 financial years at nominal charge on NaV.

Maximum Limit for investing in ELSS Funds
Maximum Limit – Rs. 1 lakh.

Please note that the total deduction u/s 80C and 80CCC can not exceed Rs. 1 Lakh.

NFO update in mutual funds in india

Turn your insurance policies into paid-up plans (If you are thinking of discontinuing an insurance policy or want to stop paying the premiums)

If you are thinking of discontinuing an insurance policy or want to stop paying the premiums for a policy, you are not alone as reason can differ from person to person may be product was mis-sold, or not able to pay the premium amount or you don't want to continue that policy as not given returns what you expected, so here is solution if you don't want to go for surrendering, covert your policy to paid policy, however, your insurance cover will continues (but that gets reduced) till the maturity of the policy, i.e the sum assured is reduced in proportion  to the premium amount paid till date.

The paid-up value of a policy is the reduced sum assured calculated on a proportionate basis by using a simple formula
Paid up value = Original sum assured * (Number of premiums paid / Total number of premiums that were required to be paid)

The basic definition of Paid-Up Insurance for life insurance means that all the premiums have already been paid, with no further premium payment due, a paid-up policy is a whole life insurance policy for which no additional premium payments are required to keep it in force.

The paid-up option is by far the best way to exit an insurance policy because it gives the policyholder the best of both worlds. He is free from the burden of paying the premium that are a drag on his finances, but continues to enjoy the life insurance cover that was the primary objective of the plan.

According to LIC rules and regulations, once you pay the premiums on a life insurance policy for 3 full years, the policy does not become wholly void even if no subsequent premiums are paid.
Such policies are known as paid-up policies. In such cases, the sum originally assured is reduced to a sum bearing the same ratio to the full sum assured as the number of premiums actually paid to total number of premiums originally stipulated as payable under the policy.

If 6 out of the originally stipulated 30 premiums are paid, the sum assured under a paid-up policy would still be 20 percent of the original sum assured by the policy.
Disadvantages :

A paid-up policy loses all the additional benefits attached to the policy:

Double Accident benefits & survival benefit installments in the case of money-back policies

A paid-up policy may be free from payment of further premium but is subject to the payment of interest on any loan and other charges, if any are applicable. The interest on the loan must be paid regularly or insurance company will start write off the policy towards the repayment of loan amount and the interest in terms of the conditions governing the grant of the loan.

It is strongly advised that you should NOT allow any of your policies to become paid-up policies, but if you can't avoid rather surrendering convert your policy to paid policy.

FAQ's on Exchange Traded Funds (ETF)


What are Exchange Traded Funds ?
Exchange Traded Fund is a security that tracks an index, a commodity or a sector like an index fund or a sectoral fund but trades like a stock on an exchange. It is similar to a close-ended mutual fund listed on stock exchanges. ETF's experience price changes throughout the day as they are bought and sold.

What types of ETF's can be traded in BSE?
Currently there are three types of ETF's which can be traded in BSE. These are :
Equity ETF's.
Gold ETF's.
Liquid ETF's.

What are Equity ETF's ?
Equity ETF is a basket of stocks that reflects the composition of an Index, like S&P CNX Nifty or BSE Sensex. The ETFs trading value is based on the net asset value of the underlying stocks that it represents. Think of it as a Mutual Fund that you can buy and sell in real-time at a price that changes throughout the day. Currently there are eleven equity ETF's which can be traded in BSE.

What are Gold ETF's ?
Gold ETF is a special type of Exchange traded fund that tracks the price of gold. Currently there are six gold ETF's which can be traded in BSE.

What are Liquid ETF's ?
Liquid ETF's are the money market ETF's, the investment objective of which is to provide money market returns. Liquid BeES launched by benchmark mutual fund is the first money market ETF in the world. Liquid BeES will invest in a basket of call money, short-term government securities and money market instruments of short and medium maturities.

How does one trade ETF's ?
ETF's can be bought / sold just like stocks through trading terminals anywhere across the country.

Difference between a Exchange Traded Fund & Mutual Funds (Close Ended Fund and Open Ended Fund) ?

Difference between ETFs and Futures ?
Though ETFs and Futures provide an exposure to the same underlying index, difference between them are :

  • ETFs trade in much smaller investment sizes than a futures contract making it possible for retail investors to participate in index investing.
  • Futures trading require an account with a broker having derivatives terminal and are subject to margin requirements prescribed by the exchanges.
  • Futures involves significant leverage which magnifies losses in the vent of prices moving against the positions held by the investor.
  • Futures contracts must be rolled-over every three months (or every one month if liquidity is poor in far month contracts) which can lead to higher trading costs and tracking error.

How does settlement take place in ETF's?
ETF' s trade just like any other normal listed security on the BSE , settlement is just like any other stock. In case an investor has purchased ETF from the market, he has to pay the broker before the pay-in on T+2 and in the case of sale, an investor has to transfer ETF units from his demat account to his brokers account before the settlement on T+2.

What happens in case of default on payment or delivery of ETF's?As clearing and settlement is done through the exchange, the exchange's clearing house guarantees all trades. Any shortfall in units will be auctioned by the exchange and the investor is protected by the exchange mechanism.

Can ETF units be used for paying margins to the Stock Exchange ?
Liquid BeES ETF units can be deposited by the members with the exchange towards collateral requirements (liquid assets) for margin purposes. These units will be considered as cash equivalent.
Other ETF units can also be deposited towards collateral requirements. However these units will be considered as non-cash equivalent.

What are the Advantages of ETFs ?
  • Instant exposure to a well-diversified portfolio or an asset class.
  • Real-time buying and selling of ETF units throughout the trading hours just like any other equity scrip.
  • Most ETFs have a lower expense ratio than comparable mutual funds. Not only does an ETF have lower shareholder-related expenses, but because it does not have to invest cash contributions or fund cash redemptions, an ETF does not have to maintain a cash reserve for redemptions and saves on brokerage expenses.
  • No sales load for investor. Only normal brokerage charges apply.
  • Low tracking error- ETF's trade close to their NAV's unlike substantial premiums/ discounts associated with close-ended funds that trade on the bourses.
  • Tax efficient instrument, capital gains taxes for investors of ETF tend to be much lower than those in mutual funds due to in-kind creation and redemption process.

What are the application of ETFs ?
Investors can use ETFs for Strategic Asset allocation ( core holdings) and tactical asset allocation to reflect their short-term investment insights.
Investors can use ETFs to make sector bets or reduce their sector exposure.
Investors can effectively short or hedge Index exposure by selling ETFs against long stock holdings thereby reducing the broad market risk exposure or beta of the portfolio.
An investor in an open-ended mutual fund can only purchase or sell at the end of the day at the mutual fund's closing price. This makes stop-loss orders much less useful for mutual funds, and not all brokers even allow them. An ETF is continually priced throughout the day and therefore is not subject to this disadvantage, allowing the user to react to adverse or beneficial market condition on an intraday basis.

 ETFs on BSE

Which are the ETF's that can be traded in BSE ?
Following are the list of ETF's that can be traded in BSE. :

Source:BSE india

JM Nifty Plus Fund and JM Emerging Leaders Fund are getting merged with JM Equity Fund and JM Multi Strategy Fund respectively on 29/07/2011

JM Financial Mutual Fund has announced merger of JM Nifty Plus Fund into JM Equity Fund and JM Emerging Leaders Fund into JM Multi Strategy Fund, with effect from July 29, 2011.

 Details of the Options proposed to be merged are as follows:
• Dividend Option under merging scheme would be merged into JM Equity Fund – Dividend option and would be renamed as JM Equity Fund - Dividend option.
• Growth Option under merging scheme would be merged into JM Equity Fund – Growth Option and would be renamed as JM Equity Fund - Growth option
• Dividend Option under merging schemes would be merged into JM Multi Strategy Fund – Dividend option and would be renamed as JM Multi Strategy Fund - Dividend option.
• Growth Option under merging schemes would be merged into JM Multi Strategy Fund – Growth Option and would be renamed as JM Multi Strategy Fund - Growth option.

For the unitholders who do not redeem/ switch out, the current value of their holding in merging scheme as on July 29,2011, their holding will be converted into units of the surviving scheme at the applicable NAV as on July 29, 2011, after deduction of applicable withholding tax (in case of NRIs).

How to invest in mutual Funds in India??? How to fill up the application form???

Prospective investors who wish to invest in mutual funds have to contact a distributor/agent of mutual funds. Any good agent/distributor would be able to suggest you the appropriate funds from the plethora of funds available considering your long term and short term goals.

The normal procedure is to fill-up the required application form and submit it along with a cheque for the amount of investment. Cheques and Demand Drafts are accepted. Payment by cash is not allowed. The agent/distributor would submit the application form with the cheque to the mutual fund company. The mutual fund company would issue you an Account Statement with 4 working days from the date of investment.

How to fill up the application form??? (checklist)
Please ensure that All relevant particulars are filled in / ticked in the form that is

  • Full name of each holder
  • Full Address (Resident Individual - Indian address or NRI / FII - Foreign address & Local Address)
  • Bank mandate
  • Scheme / Plan / Option details
  • Payment details
  • Mode of holding
  • Legal Status

PAN details & Proof of PAN are furnished
KYC acknowledgement letter is enclosed. [For details please refer section on Knowledge Centre - KYC Norms ]
Your investment is not less than the minimum investment amount.
Your application is completed and signed by all applicants.
Investors are urged to draw the Payment Instrument in favour of "Name of the Scheme A/c. First Investor Name" OR "Name of the Scheme A/c. Permanent Account Number" OR "Name of the Scheme A/c. Folio Number" and should be crossed "Account Payee Only".
On the reverse of each payment Instrument submitted write the First Applicant's name, PAN and the Application Form number.

Accompanying documents:
Please submit the following documents with your application (where applicable). All documents should be true copies certified by a director / Trustee / Company Secretary / Authorised Signatory.

FAQ on PPF ( Public Provident Fund)

Q-1 Who can invest in a PPF?
Ans : Any individual or any guardian on behalf of a minor.

Q- 2 How many Accounts can an individual have?
Ans : An individual cannot have more than one PPF account in his name.

Q- 3 Who cannot open a PPF Account?
Ans : An NRI cannot open a PPF Account and the account cannot be opened in joint names.

Q-4 What would be the rate of interest?
Ans : Rate of interest currently is 8% per annum to be accrued at the end of the financial
year. Interest is calculated on the minimum balance in the account between the 5th and last day of the month.

Q-5 What would be the minimum and maximum deposit amount in a PPF?
Ans : The minimum deposit amount is Rs 500/- in a Financial Year while the maximum deposit amount is limited to Rs 70,000/-.

Q-6 What is the maximum number of deposits accepted in a year?
Ans : The maximum number of deposits permitted in a Financial Year is limited to 12 transactions, but the amount in each installment may not be the same. The subscription has to be made in multiples of Rs.5/- only.

Q-7 Is withdrawal possible within the maturity period?
Ans : Yes, withdrawal is possible within the maturity period, but not before 5 completed financial years of initial subscription. The amount that can be withdrawn under such a situation is limited to 50% of the balance of the credit at the end of 4th year immediately preceding the year in which the amount is withdrawn or the end of the preceding year whichever is lower.

Q-8 Can the PPF account be transferred?
Ans : Yes the PPF account can be transferred from one Bank to another Bank, one Bank to Post Office and vice versa. Refer this for transfer..

How to transfer PPF account from one branch to the other of ( bank or post office)?

Q-9 What is the maturity period?
Ans : The account matures on completion of 15 Financial Years. But it can be continued with or without subscriptions after maturity for block periods of 5 years by exercising the option through Form H.

Q-10 What are the rules regarding drawing of loans against a PPF Account?
Ans : Loans from the amount at credit in PPF a/c. can be taken after completion of one year from the end of the FY of opening the account and before completion of the 5th year.

Q-11 What is the loan amount that can be availed?
Ans : Loans from the amount at credit in PPF a/c. can be taken any time after the expiry of one year from the end of the year in which the initial subscription was made but before the expiry of 5 years. A subscriber may, if he so desires, apply through Form ‘D’ for obtaining loan consisting a sum of whole Rupees not exceeding Twenty Five Percent (25%) of amount that stood to his credit at the end of the second year immediately preceding the year in which the loan is applied for.

Q- 12 How is the repayment of loan done?
Ans : Principal amount of a loan under this Scheme shall be repaid by the subscriber before the expiry of 36 months from the first day of the month following the month in which the loan is sanctioned. The repayment may be made either in one lump sum or in 2 or more monthly installments within the prescribed period of 36 months. The repayment will be credited to the subscriber’s account. After the principal of the loan is fully repaid, the subscriber shall pay interest thereon in not more than 2 monthly installments at the rate of 1% p.a. of the principal for the period commencing from the first day of the month following the month in which the loan is drawn up to the last day of the month in which the last installment of the loan is repaid. If the loan is not repaid partly or fully within the prescribed period of 36 months, interest on amount of loan outstanding shall be charged at 6 % p.a. The interest recoverable shall accrue to the Central Government.

Q- 13 How many person(s) can be nominated in case of death of the subscriber?
Ans : A subscriber can nominate one or more persons to receive the amount standing to his credit in case of his death before the maturity period of the account.

Q- 14 Who can be the nominees in case of an account opened on behalf of a minor?
Ans .: No nomination(s) can be made when an account is opened on behalf of a minor.

Q-15 Can there be a change in the nominations?
Ans : Yes changes in the nominations is possible by applying for a fresh nomination in Form E.

Q- 16 What is the fee charged for registration, cancellation or variation of nominations?
Ans : No fees are charged for such operations.

Q- 17 What are the rights of the nominee?
Ans : Nominee does not have the right to ownership. He is only authorised to collect the money on the death of the subscriber and keep it with him as a trustee for the benefit of the persons who are entitled to it under the law of succession.

Q- 18 How is the repayment done after the death of the subscriber?
Ans : If a subscriber to an account in respect of which nomination is in force dies, the nominee or nominees may make an application in Form G, or as near thereto as possible, to Bank together with the proof of death of the subscriber and on receipt of such application all amounts standing to the credit of the subscriber after making adjustment, if any in respect of interest on loans taken by the subscriber shall be repaid by the Bank itself to the nominee or nominees. If the nominee is dead, the surviving nominee or nominees shall, in addition to the proof of death of the subscriber, also furnish proof of the death of the deceased nominee. Where there is NO nomination in force at the time of death of the subscriber, the amount standing to the credit of the deceased after making adjustment, if any, in respect of interest on loans taken by the subscriber, shall be repaid by the Bank to the legal heirs of the deceased on receipt of application in Form G in this behalf from them.

If the credit balance standing in the account is upto Rs.1 lakh, the same may be paid to his /her legal heirs on production of :
1. A letter of indemnity.
2. An affidavit
3. A letter of disclaimer on affidavit, and
4. A certificate of death of subscriber, on stamped paper.

Q- 19 Does the PPF account earn interest after the death of the subscriber?
Ans : On the death of the subscriber, the balance in PPF a/c. does not cease to earn interest.
The interest is admissible till the end of the month preceding the month in which payment of the deposits is made to the nominee / legal heirs.

Q- 20 Can a PPF account be transferred from one individual to another?
Ans : A PPF a/c. is not transferable from one individual to another, as such the nominee
cannot continue the account of a deceased subscriber in his own name.

Tax rates on Investment in mutual fund schemes for Financial Year 2011-12.

Tax rates on Investment in mutual fund schemes for Financial Year 2011-12.
Applicable Income Tax Rates for 2011-12

Add caption

@ after providing for indexation
## Subject to NRI's having Permanent Account Number in India
*STT @ 0.25% will be deducted on equity funds at the time of redemption and switch to the other schemes.
Mutual Fund would also pay securities transaction tax wherever applicable on the securities bought/sold.
^Assuming the investor falls into the highest tax bracket
# The total income of the corporate would exceed Rs. 1 Crore
** The tax rates are subject to DTAA benefits available to NRI's
*** These are the tax rates applicable to capital gains, in case the rate of tax is lower than 20% and if the NRI does not have a Permanent
Account Number, then for the purpose of TDS, the withholding tax rate would be 20%.


Features of various Deposit Schemes available to Non-Resident Indians (NRIs)

Features of various Deposit Schemes available to Non-Resident Indians (NRIs) 
(updated as on April 21, 2011)


If you are investing in mutual funds on behalf of minor!!!

I am handling portfolio of many investors who do the investment in mutual funds on behalf of minor, but now lot many changes are made in rules in mutual funds so before investing you should understand few important points related to investment in mutual fund on behalf of minor through Guardian.

(i) The minor shall be the first and the sole holder in an account (folio). There shall not be any joint accounts with minor as the first or joint holder.

(ii) Guardian in the folio should either be a natural guardian (i.e. father or mother) or a court appointed legal guardian.

(iii) Copy of the document viz. birth certificate, passport copy, etc evidencing date of birth of the minor and relationship of the guardian (natural or legal guardian) with the minor should be mandatorily provided while opening the folio.

(iv) It is better to open bank account in the name of minor for mutual fund investments, though mutual fund accepts the bank details of guardian but at the time of redemption it creates problem as the cheque (redemption amount) is issued in the name of  Minor Represented by guardian  and more so, some (Pvt.) banks don't accept the cheque and investor face lot of problem to get the redemption money.

Latest problem i faced with this issue as My client is NRI Investor and Investment was made as Minor through Guardian, when  we did investment that time their was no such rule as we require Bank details of Minor but after redemption the bank rejected direct credit as we have not provided bank details of minor but bank details was in the name of guardian and client status was NRI,(and he faced lot of problem to open bank account in the name of minor and almost took month's time to get the account in name of minor following all rules and regulations and providing all supporting documents) finally,  to get the redemption money we provided bank details of minor and then only the amount got credited in minor's bank account.

One suggestion: If you do investment in the name of Minor, please don't redeem within few years, let your money grow and help your child rather put a full stop to your investments, and best is to do investment in your name rather investing in minor and do redemption within 2-3 years.


The guardian operates the account till the minor becomes a major. When a minor turns major, mutual funds will seek relevant documents.

Prior to that mutual fund will send will send a notice to investors at their registered correspondence address advising the minor to submit, on attaining majority, an application form along with prescribed documents to change the status of the account from 'minor' to 'major'.

After that a notice all transactions/standing instructions/systematic transactions etc. will be suspended i.e. the account will be frozen for operation by the guardian from the date of minor attaining majority.
In order to change the status the investor need to provide following documents to change the status from minor to major:
1. A Service Request form / letter duly filled and containing details of the Fund, name of the major (investor)  & folio number
2. New Bank mandate Registration form if there is a change in the bank account of the investor
3. Signature attestation of the investor (major) by the Bank Manager

New Fund Offer in FMP & ETF - July 2011

You will now be able to buy mutual funds schemes by swiping your Visa debit cards.

ICICI Prudential and Fidelity mutual fund has launched Visa debit card transactions facility for its investors.
You will now be able to buy mutual funds schemes from these fund houses by swiping your Visa debit cards.

Currently Lump sum investment option is available but very soon they are planning to introduce Visa point-of-sales terminals in seven cities – Mumbai, Delhi, Chennai, Kolkata, Bangalore, Pune and Ahmedabad where you can similarly swipe to buy schemes managed by the AMC.

This feature will provide easy accessibility to investors by facilitating mutual fund purchase on their website through Visa debit cards.

Other Amc's which offer such kind of service are SBI Mutual Fund & DSP Black Rock Mutual Fund.

DSP Black Rock Mutual Fund provides two convenient payment options through which you can invest online and anytime.that is with debits cards and net banking facilities for online transaction.You can invest online using your debit card if you have any of the following debit cards and also have an internet password for your debit card:
  1. Visa verified Debit Card: If you have a “Visa” debit card issued by your bank.
    1. Please note that your debit card should be “Verified by Visa”. To know more, click here.
    2. To get your debit card “Verified by Visa” visit your bank’s website or click here.
  2. Citibank Debit Card
  3. State Bank of India – ATM cum Debit Card
 **The amount of online purchase is dependent on any limits that your bank may have imposed on your Debit Card or NetBanking online transactions facility for financial services/mutual fund purchases. Hence, investors are advised to check with their banks regarding the limits.

SBI Mutual Fund started this facility from March 2010, you can  invest in mutual fund (MF) schemes of SBI MF through your State Bank of India’s (SBI) ATM-cum-debit card using the MF’s Internet transaction facility. If you already have a bank account with SBI and an ATM-cum-debit card of your account, you can buy SBI MF schemes directly through it. Once you select your scheme, you will be asked to validate your debit card, its permanent identification number and your bank account number. You need to do this each time you invest using your debit card. Once the transaction is processed, you get an intimation of your investment on the screen and an account statement in a couple of days. You could buy equity and debt schemes. In a single day, you can buy units worth only up to Rs50,000 on your regular card and up to Rs1 lakh on your gold card.

SBI Mutual Fund's new fund offer (NFO) promising regular income on a minimum investment of Rs 5000 will open on Monday July 4, 2011.

NFO: SBI Debt Fund Series-90 Days-46

The SBI Debt Fund Series-90 Days-46, would invest in portfolio comprising debt instruments like government securities, PSU and corporate bonds and money market instruments.

 The objective of the scheme is to provide regular income, liquidity and returns to the investor by investing in debt and money market instruments and Government Securities with the same tenure i.e. the instruments maturing on or before the maturity date of the respective scheme.

 The fund will allot up to 100% of assets in Government of India dated Securities and Treasury Bills, PSU & Corporate Bonds/Debt Instruments, Money Market instruments. Exposure to securitized debt may be to the extent of 40% of the net assets.

The minimum investment in the fund would be Rs 5,000. The NFO would close on July 7, SBI MF said in statement.

Since it is a close ended debt scheme, no repurchase or redemptions of units would be allowed before the maturity of the scheme (before 90 days). The fund would be listed on the Bombay Stock Exchange

Basic Details:
NFO Opens: July 4, 2011    NFO Closes: July 7, 2011    NFO Price: Rs.10 per unit
Listing: Bombay Stock Exchange   Benchmark: CRISIL Liquid Fund Index
Options: Dividend and Growth   Exit Load: Nil
Minimum Application Amount: Rs 5,000 per application and additional Rs. 10, thereafter

Click on the following links to download:

Wef July 1, 2011 people with accounts in the Employees Provident Fund Organisation (EPFO) could check their PF balance online.

PF Accounts balance information through website from today.

By using a simple process using EPFO’s portal, people could get to know the balance.

After checking into the link provided for the purpose, account holders need to provide their account number and their mobile number.

Details of the PF balance would be SMSed after completing the verification process.

The facility, however, is available for people with PF accounts with EPFO’s offices in Delhi (North), Delhi (South), Laxmi Nagar (Delhi), Gurgaon, Faridabad, Karnal and Bangalore. “Remaining offices will be added soon,” an EPFO official said.

List of Documents and Information required for the KYC Process...

All investors investing in Mutual Funds are required to be KYC Compliant. Investors can execute financial transactions on their folios only if they are KYC compliant.

KYC is an acronym for “Know your Client”, a term commonly used for Client Identification Process. SEBI has prescribed certain requirements relating to KYC norms for Financial Institutions and Financial Intermediaries including Mutual Funds to ‘know’ their Clients. This would be in the form of verification of identity and address, providing information of financial status, occupation and such other demographic information. Applicant must be KYC compliant while investing with any SEBI registered Mutual Fund.

A KYC Application Form has been designed for Individual and Non-Individual Investors separately. The soft copy of these KYC forms will be made available on the website of all mutual funds, AMFI and Central Depository Services (India) Limited (CDSL). You may also approach your distributor for a form. It is important to read the instructions printed on the KYC Application Form while filling-up the form.

KYC Form

1. For Individual  : Download KYC Form for Individual

Please go through the following checklists before submitting the form.Note that for folios that are jointly held, all holders must be KYC compliant

Checklist for Individual investors:
  1. Please ensure that the form is completed in all respects and signed by you.
  2. Please affix your recent photograph and sign across the photograph.
  3. Please attach your PAN card as proof of Identity. This should be a photocopy plus original for verification.
  4. Please attach a Proof of Address Document (one for each distinct address). These should be either original + photocopies or attested / notarised photocopies.
  5. If you are an NRI, you must mention your overseas address.
  6. Please submit a photocopy of the duly completed KYC Application Form.

 Documents required:
Proof of Identity
The KYC process requires investors to provide their Proof of identity (PAN card copy only)
• Original PAN Card + Self-attested photocopies (Originals will be returned over-the-counter after verification)

Proof of Address
• Original Documents + Self-attested photocopies (Originals will be returned over-the-counter
after verification) OR
• True Copies attested by a Notary Public / Gazetted Officer / Manager of a Scheduled Commercial Bank or Multinational Foreign Banks (Name, Designation and Seal should be affixed on the copy).
Unattested photocopies of an original document are not acceptable
• If the above documents including attestation / certifications are in regional language or foreign language then the same has to must be translated into English for submission.

For Proof of Address (any valid documents listed below)
• Latest* Land Line Telephone Bill • Latest* Electricity Bill • Passport • Driving License • Latest*
Bank Passbook • Latest* Bank Account Statement • Voter Identity Card • Ration Card • Latest*
Demat Account Statement • Registered Lease / Sale Agreement of residence • Proof of Address
issued by Bank Managers of Scheduled Commercial Banks / Multinational Foreign Banks /
Gazetted Officer/ Notary Public / Elected Representatives to the Legislative Assembly / Parliament /
Any other document approved by AMFI as a valid address proof
* These documents should not be more than three months old as on the date of submission of this form.

Other most important points you should know for filling  KYC form:
1. Name: Please state your name as Title (Mr/Mrs/Ms/Dr/Commander/etc.), First, Middle and Last Name in the space provided. This should match with the name as mentioned in the PAN card failing which the application is liable to be rejected.
If the PAN card has a name by which the applicant has been known differently in the past, than the one provided in this application form, then requisite proof should be provided e.g. marriage certificate, or gazetted copy of name change.

2. Date of Birth: Please ensure that this matches with the Date of Birth as indicated in the PAN card.

Are there any special requirements for an NRI for KYC Process?
Yes. In addition to the certified true copy of the passport, certified true copy of the overseas address and permanent address will also be required. If any of the documents (including attestations/ certifications) towards proof of identity or address is in a foreign language, they have to be translated to English for submission. The documents can be attested by Notary public / Branch Manager of schedule commercial bank and multinational foreign bank / Officials from Indian Embassy can verify the documents with originals with their seal and signatures.
Foreign nationals are not allowed to apply, unless they are Non-resident Indians or Person from Indian origin.
How to check KYC Status:

Click here to check KYC application status at CVL's Website.

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