By Sanket Dhanorkar, ET Bureau|Updated: Oct 16, 2017, 11.20 AM IST
The Securities and Exchange Board of India (Sebi) has asked fund houses to classify their schemes into clearly defined categories. For long, there were no clear guidelines to categorise mutual funds. Fund houses even launched multiple schemes under each category, making scheme selection a confusing exercise for investors. To introduce clarity, Sebi has now asked fund houses to have just one scheme per category, with the exception of index funds, fund of funds and sector or thematic schemes.Mutual funds which have multiple products in a category will have to merge, wind up, or change the fundamental attributes of their products.
Simplification of choice, fewer options
At the broadest level, mutual funds will now be classified as equity, debt, hybrid, solution-oriented, and ‘other’. Equity schemes will have 10 sub-categories, including multicap, large-cap, mid-cap, large- and mid-cap, and small-cap, among others. The stocks of the top 100 companies by market value will be classified as large-caps. Those of companies ranked between 101 and 250 will be termed mid-caps, and stocks of firms beyond the top 250 by market cap will be categorised as small-caps. Debt and hybrid schemes will similarly be grouped into 16 and six sub-categories respectively.
In particular, people interested in debt and hybrid schemes will now be better placed to identify the right schemes. For instance, duration funds have been segregated into four sub-categories, based on the maturity profile of the instruments they invest in. Debt funds belonging to the broader ‘income funds’ category will now be identified as dynamic bond fund, credit risk fund, corporate bond fund, and banking and PSU fund, based on their unique characteristics. Similarly, segregation of hybrid funds—based on their equity exposure—as aggressive hybrid, conservative hybrid and balanced hybrid, will allow investors to better identify the type of hybrid fund they want to invest in.
“Now that scheme labelling is clearly linked to a fund’s strategy, the investor will clearly know what he is getting into. The fund category will define the scheme, and not its name,” says Kunal Bajaj, CEO, Clearfunds. Fund houses will also not be allowed to name schemes in a way that only highlights the return aspect of the schemes— credit opportunities, high yield, income advantage, etc.
Adherence to fund mandate
With strict classification of schemes, fund houses may not be able to alter the investing style or focus of their schemes, as they did earlier. For instance, mid-cap funds stray into the large-cap territory or across market caps, in response to market conditions, which dramatically alters their risk profile. Now, funds will be forced to maintain their investing focus. Any drastic change in style will constitute a change in the fundamentalattributes of the scheme, which would have to be communicated to the investors. For investors, this means they won’t have to worry about their chosen schemes altering mandates to something which doesn’t suit their needs or risk profile.
Better comparison with peers
Distinct categorisation of schemes will also enable a better comparison of funds within the same category. While the earlier largecap funds category had schemes with pure large-cap focus as well those with a sizeable mid-cap exposure, now such distinctly varied schemes won’t be clubbed together. This will further help investors identify the right schemes by facilitating a like-for-like comparison of funds. “All schemes of different AMCs within a similar category will have similar characteristics, which will enable customers to make a better ‘apples to apples’ comparison,” says Stephan Groening, Director, Investment Solutions, Sharekhan, BNP Paribas.
These schemes may be reclassified or merged
The new Sebi norms require funds to have only one scheme per category.
Note: This is only an indicative list. All schemes mentioned may be retained by the respective fund house. There may be other duplicate schemes from other fund houses also. Source: Value Research.
Sharp rise in fund corpus
Since fund houses will now be forced to merge duplicate schemes within the same categories, it may sharply increase the size of certain funds. This could hurt the scheme’s performance. “Some larger fund houses with multiple schemes will have to opt for mergers. This may lead to a sudden, sharp rise in the corpus of schemes, which could dent the fund’s returns,” says Vidya Bala, Head, Mutual Fund Research, FundsIndia. “There could also be an impact cost on the investor, as fund may rebalance or churn the portfolio to ensure the fund aligns with the category norms,” adds Bala. For instance, both HDFC Balanced and HDFC Prudence are aggressive hybrid funds, with a corpus of Rs 14,767 and Rs 30,304 crore. Merging the two will create a Rs 45,000 crore fund. However, it is more likely that the fund house may instead reposition one of the schemes in another category.
Possible fall in outperformance
While the new norms are likely to lead to better adherence to the fund style and mandate, it may result in reduction in alpha—outperformance compared to the index—for some schemes. Funds often tend to stray away from their chosen mandate in the pursuit of generating excess return over the benchmark index. Now, with limited flexibility to stray into another segment, some funds may find alpha generation more difficult than before, reckons Bala.
Need for portfolio review
Since fund houses will now have to align their product suite with these norms, there is likely to be a flurry of activity related to recategorisation of funds. In order to avoid merging certain duplicate schemes, these are likely to be renamed or reclassified into another fund category. Some funds may witness a change in scheme attributes to facilitate its repositioning. As such, over the next 5-6 months, several schemes may change colours. Investors would then have to undertake a thorough portfolio review to ensure their funds continue to meet their requirements, insists Bajaj.
Ahmedabad Mirror | Updated: Oct 17, 2017, 02.00 AM IST
This is something every Amdavadi would dread — misuse of your IT return, Aadhar card and PAN card. The email account of an officer in a private company was hacked and his IT return, Aadhar and PAN cards were recovered. Using copies of the documents, impostors tried to secure car loans from various banks in the city. The cheating came to light after an alert banker called up the officer to verify the documents.
Rajesh Panchal (33) filed an FIR at Navrangpura police station against three persons under IT Act and for misusing his documents. Panchal who resides at Sagar Apartment, near Bhavsar Hostel in New Vadaj, has been working as a team leader at a private company in Chandkheda for the past seven years. On October 7, Panchal received a call from Cosmos bank trying to verify his role as guarantor for someone seeking a car loan. A shocked Panchal said he had not stood as guarantor for anyone. Bank manager Sandeep Shah called Panchal to the bank and showed him copies of his Aadhar card, PAN card and two years’ IT returns.
The documents belonged to Rajesh but the photo and signatures on it were of another person. A person named Kaushik Shukla had applied for a car loan and had provided Panchal’s documents as his guarantor. From the bank, Panchal called up the police control room. At the time Kaushik’s friend Mahendra Chopra was also present at the bank. The bank manager, Panchal and Chopra were taken to the Navrangpura police station, where Chopra promised to produce the person named Rajesh who provided the documents.
Thereafter Panchal checked his online CIBIL score and came to know that his documents were used to secure loans from seven other banks. Panchal also found Shukla had used his name to acquire possession and allotment letter of a house, besides opening a bank account. Panchal filed an FIR with Navrangpura police against the unknown person named Rajeshkumar (resident of Amardeep Residency in Nana Chiloda), Mahendra Chopra (resident of Sayona City in Ghatlodia) and Kaushik Shukla (resident of Kulin tenament in Vasna).
Navrangpura PI R V Desai said, “On the basis of Rajesh Panchal’s complaint we have filed the offence and begun probe. Mahendra Chopra has been arrested in the past in Navrangpura and Rajasthan in a case of cheating.” Panchal said, “As my sister is a bank employee she had advised me to check my CIBIL. From there I got to know that loans under my name had been sought from seven banks. The documents had reached the bank manager which had the accused’s name and phone number on it. But the con came to light as the bank manager called on the number mentioned on the IT return documents. I believe this is the work of a gang. My documents were obtained by hacking my email id and password.”
Bindisha Sarang | Sep, 29 2017 21:22:01 IST | First Post
For the customers who hold accounts in six state-run banks, here’s a reminder. Sunday, or 1 October is an important date for you because that is the day their cheque books and India Financial System (IFS) codes of their branches would become invalid. These banks are — State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Raipur, State Bank of Travancore, State Bank of Hyderabad and Bhartiya Mahila Bank (BMB).
The government had in February approved the merger of these five associate banks with SBI. Later in March, BMB too got the approval to join the group. With these six banks merging, SBI now becomes a bank with total assets worth Rs 29 lakh crore.
The bank has been asking customers of all these banks to apply for SBI cheque books via net banking, mobile banking, ATM, or by visiting the home branch. Which means if you still haven’t applied for the new cheque books, you have to do it at the earliest.
This is because the cheque books issued by these six banks cannot be used. Also if you have issued any post-dated cheques, you need to take care of them. It’s better you iron out these issues beforehand, if possible today itself. This means you will have to recall the post-dated cheques and issue new ones.
In the past, most acquiring banks let the fixed deposits run their course. Which means old terms continue.
As far as mobile banking goes, you will have to make sure that you make the necessary changes there as well. Since the old IFSC code is no longer valid you will have to start using the new IFS code.
However, SBI hasn’t said a word about ECS issued by the customers of these half a dozen banks. It is safe to deduce that they SBI will take care of things at the back-end, and you need not worry about it. That’s how it has been whenever bank mergers happened. For instance, a few years ago when United Western Bank merged with IDBI Bank, the latter used an account mapping technique for ECS, without discomforting the customers.
No credit or debit card of any bank restricted for payment: IRCTC Debit and credit cards of any Indian bank powered by Master or Visa, can be accepted in any of the seven gateways on the site
Press Trust of India | New Delhi | Last Updated at September 23, 2017 10:51 IST | Business Standard
Amidst reports of IRCTC barring certain banks from using its payment gateway for debit card transactions, the railways’ tourism and catering arm issued a statement denying the reports.
The IRCTC has said options to pay through payment gateway using debit/credit card and internet banking are open for all banks.
“No debit or credit card of any bank has been restricted by the IRCTC for acceptance on any of the gateway,” it said.
Debit and credit cards of any Indian bank powered by Master or Visa, can be accepted in any of the seven gateways on the site, the statement clarified.
However, it said the IRCTC has provides a value-added service of direct integration to some banks which would allow speedy transactions and reconciliations.
“Since direct integration comes at an added cost to the IRCTC, these banks were asked to share a part of their transaction charges with IRCTC,” it said.
A senior official of the IRCTC said that it was not possible for it to bear cost of individual linkage to bank websites.
“IRCTC had asked banks to share the revenue earned from online tickets because of these value-added services but some banks refused,” he said.
The IRCTC has said that if banks are willing to give the facility of zero transaction charges on their debit cards to rail ticket customers then it will give them the facility of direct debit card integration also.
The statement has further said that banks should abide by the RBI guidelines regarding transaction charges on debit cards by charging only 0.25 per cent on transactions of up to Rs 1,000 and a maximum of 0.5 per cent on transactions of values between Rs 1,000 and Rs 2,000.
By Vandana Ramnani | Sep 14, 2017 03:54 PM IST | Source: Moneycontrol.com
Jaypee home buyers want interim relief from court that they should be allowed to stop paying EMIs until flats are delivered to them as they have no hope yet
More than 100 homebuyers, who have invested their hard-earned money in Jaypee projects, are planning to move court to grant them interim relief to allow them to stop paying their equated monthly instalments (EMIs) until completed residential units are delivered to them.
“Why should we pay EMI for a non-existent property? What is the monetary relief we are getting from the September 11 SC order? We are not asking for suspension of EMIs – we are only asking for deferment of our EMIs until the insolvency resolution professional (IRP) comes up with a resolution plan and preferably possession of the flat is given to us without any interest or penalty to ensure that we are not charged or penalised for the delay in paying EMIs,” says Shilpa Vij, a buyer who bought a house under the subvention scheme in 2011and started paying EMI in 2013 in the hope of getting her house in 2014.
“We want an interim relief. EMIs and monthly rents are draining us and there is no hope yet that we will get a flat,” she says.
Ramakant Rai, Trilegal, who is advising Jaypee home buyers, says that buyers have two options – one, they can write to RBI or the National Housing Bank concerning their problems and two they can file a writ petition either in the High Court or the Supreme Court concerning the issue.
“Many buyers have already sent complaints to RBI and NHB. RBI can act on the basis of these complaints. Also, in case the issue is raised through a writ petition before the Supreme Court, the SC on grounds of equity to protect the interests of home buyers can issue directions to RBI, NHB or directly to banks to allow them to hold EMIs until units are fully developed,” he says.
Homebuyers have alleged that banks did not do their due diligence and disbursed loans even when project approvals were not in place and that banks had given pre-approved loans for the project.
“We have filed RTIs with the Noida Authority and received a response from them that approvals were sanctioned only in 2012 whereas projects have been sold since 2008. The requisite permissions were not in place at the time of the project launch. There was lack of due diligence on the part of banks as they had disbursed loans even when plans were not in place,” says Pramod Rawat, a buyer.
S K Suri, a home buyer, who has filed RTIs with the authorities for information regarding dates of applications made by the developer and final approval of plans, says that he has been given copies of approval letters for seven Jaypee projects, details of the builder filing an application for approval and the date of the authority granting approval.
“Most of the approvals were received only after 2011 whereas most bookings/loan disbursements started way back in 2008,” he says, adding it took him nearly four months to get a response to his RTIs and several rounds to the authority’s office. One response is still awaited.
Most homebuyers have decided against not paying their monthly EMIs for fear that their CIBIL score and future credit history may get impacted. But legal experts say that in case the court intervenes in this matter, it can direct CIBIL to not touch their scores. “Also, buyers are not asking for a refund, they are only asking not to pay EMIs until they get possession of the flats which has been delayed by almost five to eight years,” they say.
Legal experts also say that the September 11 SC order puts a moratorium on all cases against Jaypee. ‘All suits and proceeding instituted against JIL shall in terms of Section 14(1)(a) remain stayed as we have directed the IRP to remain in Management,’ says the order. “Homebuyers can argue that this is a uni-dimensional order as homebuyers cannot file cases against the builder in other courts such as NCDRC or RERA. It should also protect home buyers and allow them to stop paying EMIs and banks should not proceed against buyers until the time homes are delivered,” they say.
“The only possible way that home buyers have recourse to the bank is if the deal has been brokered by the bank’s real estate arm or if the bank has disbursed the full amount rather than construction-linked progress payment. Even in such cases they should issue a notice to the bank first claiming damages before taking any precipitate action such as stopping pre- EMI interest payment,” says CA Harsh Roongta, a fee only investment adviser.
Under this new offer ICICI Bank is giving cashbacks of up to 20 per cent subject to a maximum amount of Rs. 10,000 on your credit or debit card spend.
Business | NDTV Profit Team | Updated: September 15, 2017 17:04 IST
ICICI Bank, India’s biggest private-sector lender according to assets, has introduced a cashback offer for its customers who avail a new home loan or transfer their existing home loans to the Mumbai-based lender, ICICI Bank said in a release. Under this new offer ICICI Bank is giving cashbacks of up to 20 per cent (subject to a maximum amount of Rs. 10,000) to its existing credit card or saving account customers on their spends of minimum Rs. 30,000 on their credit or debit card if they avail a new home loan or transfer their existing home loans from other banks/NBFCs. The offer is valid from September 1, 2017 to November 30, 2017.
For example, Mr. Shah, a home buyer is sanctioned home loan in September 2017 with disbursal in October 2017. Also, during the offer period, he spends Rs. 55,000 on his ICICI Bank credit card. He will get cashback of Rs. 10,000 on his credit card. (eligible for 20 per cent cashback, up to Rs. 10,000).
While both the home loan sanction and card spends needs to be within the offer period, the chronology of the two does not matter, ICICI Bank said.
In the absence of credit demand from corporates, retail loans have been the focus for most of the lenders in recent days. Banks are launching new offers every other day to entice more and more retail customers. In the first quarter of the current fiscal, ICICI Bank had reported 19 per cent growth in its retail loans compared to overall loan growth of 3 per cent in the quarter.
As of 2:39 pm, ICICI Bank shares traded 0.51 per cent lower at Rs. 292.20 compared to 0.16 per cent gain in the broader Sensex.
Mayur Shetty | TNN | Updated: Sep 12, 2017, 14:42 IST | Times of India
SBI Card customers could soon make payments by merely tapping their smartphone on a swipe machine
MUMBAI: SBI Card customers could soon make payments by merely tapping their smartphone on a swipe machine. SBI Card is updating its mobile application to enable customers make contactless payments at point of sales (PoS) terminals using a technology called Host Card Emulation (HCE) which enables dematerialisation of the card.
Cardholders of the bank already use smartphones as an alternative for cards on the Samsung Pay platform and the bank will next month launch its proprietary application which enables virtualisation of the card in a smartphone using near-field communication (NFC).”Among our recent innovations we have enabled our card for Bharat QR code by incorporating the feature in our app,” said Vijay Jasuja, CEO, SBI Cards. NFC TECH SBI Cards, which recently entered into an agreement for partner GE to exit the venture, is looking to double its base from 50 lakhs in two years. The company , which is the second largest issuer in India, has a renewed focus on SBI customers through pre-approved cards.
SBI Card has doubled its base in three years to over 50 lakhs and is recording fastest growth in issuance with 15 per cent market share of cards in force (CIF) as well as card spends.”Before demonetisation the card volume growth rate was around 60,000 cards per month which increased to over 1 lakh cards per month post-demonetisation period and has now grown to around 2 lakh cards per month,” said Jasuja.
At present, 15-20 per cent of cards come from co-branded partnerships like Big Bazaar and Tata.