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Financial Services industry, Financial Distribution business in particular was, though competitive even earlier, used to still leave some income on table for the distributors and advisors in form of Entry Loads in case of Mutual Funds, and by way of commissions in Insurance products.

Suddenly fell the SEBI hammer which has already forced thousands of Mutual Fund Advisors (read Sellers!) out of business and would flush out more sellers from the industry when the present upfront being received, though dismal in value, would also become NIL.

Many sellers turned to Insurance to bridge the sudden hole in income but the developments which followed later has already forced IRDA to tighten it’s belt and new regulations are going to come in from July’10 which would once again force these sellers out of business.

The crude fact is True Advisors are still in business and they would infact benefit as and when the sellers leave the arena. True Advisors & Financial Planners with long term vision only will thrive in future and this is SEBI’s vision aswell.

Just around 4% of Indian population is investing today in products other than Bank FD and Postal products. With just 4% of population investing our Equity portion in Mutual Fund industry is of around Rs.350000/- Crs! In United States 93% of the population invests!

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Vivek Karwa

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Dressing Up

Dress up to look professional and competent

ET 31/5/2010

These days, many jobs do not require one to wear a uniform, thereby making the job of choosing clothing for work a very difficult one. Yes, there are industry standards and perceptions like pinstripes for bankers, etc., but by and large, the field is open to personal tastes and inspirations, particularly if you work in industries where there isn’t a typical style of dress. The field gets even muddier when you work for companies that allow a more casual attire. How do you keep from crossing over the line from casual to sloppy? How do you make sure that you look your professional best but also appear as if you fit in.

“Everyone says it’s unjust to judge a book by its cover, but often, we all do. Isn’t it human nature?” says Suzanne, a senior manager with a retail business in Mumbai. “Even if a person in jeans is as competent and intelligent as a person wearing a formal suit, we start with the assumption that the reverse is true. We often assess these attributes based on appearance.”

“The goal to getting dressed for work must be to project a professional, competent image, regardless of one’s employment level or career path,” adds Suzanne. “The styles, colours, lengths and fit of one’s fashion choices will speak volumes about one’s ability to do one’s job. If one is more concerned about one’s career, he or she will be more concerned with looking professional than looking cute or trendy.” “For men, the best thing that works in a formal office is dark trousers with light coloured shirts. Wear solids on work days.

Stripes are fine, as long as they are not heavy and loud. Reserve your dark shirts for Friday dressing. Avoid showing off your tattoos. They are a strict no-no. If you have one, wear clothing which hides it. On Fridays, you cannot go wrong with Chinos. The bottomline is, when in doubt about what is acceptable dressing, dress conservatively. You will never be faulted for dressing formally when it is not required, but you will invariably be castigated for under-dressing when you are required to be formal.

For women, it’s a lot more difficult. Colour plays a big part in what passes off as acceptable office wear. Traditional colours for women to wear include red, navy, grey and black. Most of these colours work well in pantsuits, skirts and shoes and mix well with softer feminine colours that are appropriate like ice blue, lilac, soft pink and ivory.

Avoid loud colours like hot pink and wild prints, as they are much riskier in office. However, I have seen some creative types who can pull them off. Jangling jewellery like chandelier earrings or stack of bangles are distracting. Replace them with bracelets and studs. Go for structured-looking handbags rather than slouchy ones.

And, one common message for men and women is to avoid heavily logoed clothing. Clothes and accessories free from “in your face” designer logos look far more professional.
Finally, Suzanne says, “Dress appropriately. It creates a positive aura around you. It is the first thing about you that impresses people. That’s not to say that you can forget about preparing for a presentation, put on a nice suit, and you’ll wow them. Knowledge, preparation, and appearance — are eventually necessary to make a good impression.” We couldn’t agree more with Suzanne.

Nominee versus Legal Heir

BS 13/5/10

A nominee is simply a custodian for most assets, except in case of equities.

Last week, when the Supreme Court ruled that a nominee may not necessarily be the beneficiary of a deceased person’s proceeds, it opened a debate regarding the status of a nominee vis-à-vis a legal heir.

Y P Trivedi, senior Supreme Court counsel, said: “The well-known theory is that a nominee is merely a trustee, not the owner. He/she may temporarily possess the money, but will have to hand it over to the heir when the situation arises.”

For most investments, the legal heir is entitled to the deceased’s assets. For instance, Section 39 of the Insurance Act says the appointed nominee will be paid, though he/she may not be the legal heir. The nominee, in turn, is supposed to hold the proceeds in trust and the legal heir can claim the money.

Similarly, Reserve Bank of India (RBI) guidelines specifies that the deceased’s nominee would receive the money in the capacity of a trustee of legal heirs. The same applies for all other financial transactions such as public provident fund, mutual funds and others where the nominee plays the role of a trustee rather than the owner.

But, it is different in case of stocks. Recently, the Bombay High Court ruled that a nominee shall be eligible to acquire the shares of a deceased shareholder instead of legal heirs. Commenting on the ruling, Sambhav Ranka and Chittaranjan Dattar of Nishith Desai Associates have written in their newsletter, “This judgment highlights a clear distinction between nominations made under the Companies Act vis-à-vis the Insurance Act and the Maharashtra Co-operative Societies (MCS) Act.”

Under Section 109A of the Companies Act, if the nomination is made under procedure prescribed by law, the nominee will be entitled to become the rightful owner of shares. And, such right shall exclusively favour the nominee and exclude all other persons.

In case of property, the MCS Act (under Section 30) says in event of the death of a member of a society, the shares of the deceased will be transferred to the nominee. But, this transfer cannot result in vesting of the flat with the nominee. He/she is merely a trustee for the deceased’s estate. Some twists to the tale include:

Case 1: Self-acquired property: A will is the deciding factor. In its absence, the property will be classified as ‘inherited property’. “The property, consequently, will have to be shared equally between the successors,” said Uday Wavikar, senior consumer lawyer.

Case 2: Inherited property: All members of the immediate family will get an equal share of the pie. Say, a person inherits a flat from his father (by a will). However, he cannot will the property only to his son. The property has to be equally divided between the person, his wife and his children.

Case 3: Joint ownership of self-acquired property: The surviving owner becomes the sole owner. In case of a divorced couple, each owner will have an equal share of the property. However, if any one partner had purchased or built the property solely with his/her funds and opted for joint ownership, he/she can produce the details of investment in court and ask for sole ownership.

Besides these special situations, a will takes precedence over other nominations. The legal heir mentioned in the will is the only person entitled to the deceased’s assets, except in case of equities, where the nominee gets the money.

Therefore, financial planners insist that making a will is a very important part of financial planning. It enables you to distribute your assets in the way you wish to and also reduces the risks of undue litigation or disputes.

Typically, a will can be either typed or hand-written (without even a stamp duty or registration). But, legal experts advise to register your will to avoid any future problems.

FAQ – NEFT System


Dated; 14.12.2009

Frequently Asked Questions (FAQ) on National Electronic Funds Transfer (NEFT) System

Q.1. What is NEFT?
Ans : National Electronic Funds Transfer (NEFT) is a nation-wide system that facilitates individuals to electronically transfer funds from any bank branch to any other bank branch in the country.

Q.2. Are all bank branches in the country part of the NEFT funds transfer network?Ans : For being part of the NEFT funds transfer network a bank branch has to be NEFT-enabled. As at end-November 2009 as many as 62,000 branches / offices of 94 banks in the country (out of around 75,000 bank branches) are NEFT-enabled. Steps are being taken to further widen the coverage both in terms of banks and branches.

Q.3. How can one know which bank branches are part of the NEFT network?
Ans : The list of bank branches participating in the NEFT system is available on the website of Reserve Bank of India at Details will also be available with the banks / branches participating in the NEFT system.

Q.4. Who can transfer funds using NEFT?

Ans : Individuals, firms or corporates maintaining accounts with a bank branch can transfer funds using NEFT. Even such individuals, firms or corporates who do not have a bank account (walk in customers) can also deposit cash at the branch with instructions to transfer funds using NEFT. A separate Transaction Code (No. 50) has been allotted in the NEFT system to facilitate walk-in customers to deposit cash and transfer funds to a beneficiary. Such customers have to furnish full details including complete address, telephone number etc. NEFT, thus, facilitates originators or remitters to initiate funds transfer transactions even without the need for having a bank account.

Q.5. Who can receive funds through the NEFT system?
Ans : Individuals, firms or corporates maintaining accounts with a bank branch can receive funds through the NEFT system. It is, therefore, necessary for the beneficiary to have an account with the destination bank branch in the country.
The NEFT system also facilitates one-way cross-border transfer of funds from India to Nepal. This is known as the Indo-Nepal Remittance Facility Scheme. A remitter can transfer funds up to Indian Rupees 50,000/- from any of the NEFT-enabled branches in India to Nepal, irrespective of whether the beneficiary in Nepal maintains an account with a bank branch in Nepal or not. The beneficiary would receive funds in Nepalese Rupees. A separate Transaction Code (No. 51) has been allotted in the NEFT system to facilitate the transfer of funds from India to Nepal. Further details on the Indo-Nepal Remittance Facility Scheme are available on the website of Reserve Bank of India at

Q.6. Is there any limit on the amount that could be transferred using NEFT?
Ans : No. There is no limit – either minimum or maximum – on the amount of funds that could be transferred using NEFT. However, for walk-in customers mentioned at Q.4 and Q.5 above, including these remitting funds under the Indo-Nepal Remittance Facility Scheme the maximum amount that could be transferred is Rs. 50,000.

Q.7. Whether the system is centre specific or has any geographical restriction?
Ans : No, there is no restriction of centres or of any geographical area inside the country. The NEFT system takes advantage of the centralized accounting system in banks. For the purpose, the account of a bank that is originating or receiving funds transfer instructions is operated centrally at Mumbai. The branches participating in NEFT can, however, be located anywhere across the length and breadth of the country.
To facilitate operation of the Indo-Nepal Remittance Facility Scheme, the NEFT system also extends to branches of banks in Nepal (as detailed at Q.5 above).

Q.8. What are the operating hours of NEFT?
Ans : Presently, NEFT operates in batches from 9 a.m to 5 p.m. There are six settlements at 9 a.m, 11 a.m, 12 noon, 1 p.m, 3 p.m and 5 p.m on week days and three settlements at 9 a.m, 11 a.m and 12 noon on Saturdays.

Q.9. How does the NEFT system operate?
Step-1 : An individual / firm / corporate intending to originate or transfer funds through NEFT has to fill an application form giving details of the beneficiary (like, name of the beneficiary, name of the bank branch where the beneficiary has an account, IFSC of the beneficiary bank branch, account type and account number). The application form will be available at the originating bank branch. The originator authorises the branch to debit his account and remit the specified amount to the beneficiary. Customers enjoying net banking facility offered by their bankers can initiate the funds transfer request online. Some banks offer the NEFT facility even through the ATMs. Walk-in customers will, however, have to give their contact details (complete address and telephone no. etc.,) to the branch. This will help the branch to refund the money to the customer in case credit could not be afforded to the beneficiary’s bank account or the transaction is rejected / returned for any reason.
Step-2 : The originating bank branch prepares a message and sends the message to its pooling centre (also called the NEFT Service Centre).
Step-3 : The pooling centre forwards the message to the NEFT Clearing Centre (operated by National Clearing Cell, Reserve Bank of India, Mumbai) to be included for the next available batch.
Step-4 : The Clearing Centre sorts the funds transfer transactions destination bank-wise and prepares accounting entries to receive funds from (debit) the originating banks and give the funds to (credit) the destination banks. Thereafter, bank-wise remittance messages are forwarded to the destination banks through their pooling centre (NEFT Service Centre).
Step-5 : The destination banks receive the remittance messages received from the Clearing Centre and pass on the credit to the beneficiary accounts.

Q.10. What is IFSC?
Ans : IFSC or Indian Financial System Code is an alpha-numeric code that uniquely identifies a bank-branch participating in the NEFT system. This is a 11 digit code with the first 4 characters representing the bank, and the last 6 characters representing the branch. The 5th character is a 0 (zero). IFSC is used by the NEFT system to route the messages to the destination banks / branches.

Q.11. How can the IFSC of a bank-branch be found?
Ans : Bank-wise list of IFSCs is available with all the bank-branches participating in NEFT. List of bank-branches participating in NEFT and their IFSCs is available on the website of Reserve Bank of India at All banks have also been advised to print the IFSC of the branch on cheques issued by branches to their customers. For net banking customers many banks have also enabled online search / pop-up of the IFSC of the destination bank branch.

Q.12. What are the processing or service charges for NEFT transactions?
Ans : Reserve Bank of India has waived the processing or service charges for member banks till March 31, 2010. Accordingly, member banks participating in NEFT need not pay any processing or service charges to Reserve Bank of India. Further, processing or service charges to be levied by the member banks from their customers have also been rationalised by Reserve Bank of India as under: –
a) Inward transactions at destination bank branches (for credit to beneficiary accounts)

– Free, no charges to be levied from beneficiaries
b) Outward transactions at originating bank branches (charges for the remitter)
– For transactions up to Rs. 1 lakh – Charges not exceeding Rs. 5.
– For transactions of Rs. 1 lakh and above – Charges not exceeding Rs. 25.

Note: Charges applicable for transferring funds from India to Nepal using the NEFT system (under the Indo-Nepal Remittance Facility Scheme), are as under –
a) Originating bank branch in India – Maximum Rs. 5 per transaction.
b) State Bank of India in India – Rs. 20 per transaction if the beneficiary maintains an account with Nepal SBI Ltd. (NSBL).
c) State Bank of India shares this amount equally with NSBL. NSBL would not charge any additional amount for crediting the account of the beneficiary.
d) In case the beneficiary does not maintain an account with NSBL, an additional amount would be charged @ Rs. 50 for remittances up to Rs. 5,000 and Rs. 75 for remittances above Rs. 5,000.

The charges would, thus, be a minimum of Rs. 25 or a maximum of Rs. 100 depending on the value of transaction and the manner in which credit is afforded to the beneficiary.

Originating bank branches have been advised to recover the entire charges from the remitter as per the structure detailed above and pass on the appropriate amount to SBI after retaining their share (of Rs. 5).

Q.13. When can the beneficiary expect to get the credit to his bank account?
Ans : The beneficiary can expect to get credit for the first four batches on week days (i.e., transactions from 9 a.m to 1 p.m from Monday to Friday) and the first two batches on Saturdays (i.e., transactions from 9 to 11 a.m) on the same day. For transactions settled in the last two batches on week days (i.e., transactions settled in the 3 and 5 p.m batches) and the last batch on Saturdays (i.e., transactions handled in the 12 noon batch) beneficiaries can expect to get credit either on the same day or on the next working day morning (depending on the type of facility enjoyed by the beneficiary with his bank).
The timelines for remittances to Nepal using the NEFT system (under the Indo-Nepal Remittance Facility Scheme) are separate at

Q.14. Who should be contacted in case of non-credit or delay in credit to the beneficiary account?
Ans : In case of non-credit or delay in credit to the beneficiary account, the NEFT Customer Facilitation Centre (CFC) of the respective bank can be contacted (the originator can contact his bank’s CFC; the beneficiary may contact the CFC of his bank). Details of NEFT Customer Facilitation Centres of banks are available on the websites of the respective banks. The details are also available on the website of Reserve Bank of India at
If the issue is not resolved satisfactorily, the NEFT Help Desk (or Customer Facilitation Centre of Reserve Bank of India) at National Clearing Cell, Reserve Bank of India, Mumbai may be contacted through
e-mail or by addressing correspondence to the General Manager, Reserve Bank of India, National Clearing Centre, First Floor, Free Press House, Nariman Point, Mumbai – 400 021.

Q.15. What will happen if credit is not afforded to the account of the beneficiary?
Ans : If it is not possible to afford credit to the account of the beneficiary for whatever reason, funds are returned to the remitter (originating customer).

Q.16. Can NEFT be used to transfer funds from / to NRI or NRE accounts?
Ans : Yes. NEFT can be used to transfer funds from or to a Non-Resident Indian (NRI) or Non-Resident External (NRE) accounts in the country. This, however, is subject to applicability of provisions of the Foreign Exchange Management Act, 2000 (FEMA).

Q.17. Can inward foreign remittances be received through NEFT?
Ans : No. The NEFT system can be used only for remitting Indian Rupees between the participating bank branches in the country.

Q.18. Can remittances abroad be sent using NEFT?
Ans : No. However, a facility is available to send outward remittances to Nepal under the Indo-Nepal Remittance Facility Scheme. Details of this scheme are available on the website of Reserve Bank of India at

Q.19. What are the other transactions that could be initiated using NEFT?
Ans : The NEFT system can be used to pay credit card dues to the card issuing banks. A separate Transaction Code (No. 52) has been allotted in the NEFT system to facilitate the payment of credit card dues to member banks. It is necessary to quote the IFSC of the beneficiary card issuing bank to initiate the bill payment transactions using NEFT.

Q.20. Can a transaction be originated to receive funds from another account?
Ans : No. NEFT is a credit-push system i.e., transactions can be originated only to transfer funds to a beneficiary.

Q.21. Would the originator receive an acknowledgement once the funds are transferred to the account of the beneficiary?
Ans : No, this facility is not available at present. Efforts are on to give an alert / message to the customer once credit is afforded to the account of the beneficiary.

Q.22. Is there a way for the originator to track a transaction in NEFT?
Ans : Yes, the originating customer can track the NEFT transaction through the originating bank branch. It is possible for the originating bank branch to keep track and be aware of the status of the NEFT transaction at all times.

Q.23. What are the pre-requisites for originating a NEFT transaction?
Ans : Following are the pre-requisites for putting through a funds transfer transaction using NEFT –

  • Originating and destination bank branches should be part of the NEFT network
  • Beneficiary details such as beneficiary name, account number and account type
  • Name and IFSC of the beneficiary bank branch. For net banking customers, some banks provide the facility to automatically pop-up the IFSC once name of the destination bank and branch is highlighted / chosen / indicated / keyed in.

Q.24. What are the other features of NEFT?
Ans : Launched in October 2005, NEFT is an electronic payment system that uses a secure mode of transferring funds from one bank branch to another bank branch. NEFT uses the Public Key Infrastructure (PKI) technology to ensure end-to-end security and rides on the INdian FInancial NETwork (INFINET) to connect the bank branches for electronic transfer of funds. The bank participation, branch coverage and transaction volume has been continuously increasing, which is reflective of the acceptance and popularity of the NEFT system. For further details about the NEFT system, the NEFT Procedural Guidelines – available on the website of Reserve Bank of India at – may be referred.