In India government on its level has been making efforts to encourage parents of the girls belonging to lower strata of the society to send them to school. Working on this line BMS in order to encourage girl students complete their primary school will be providing a fixed amount of Rs 1,000 and would double the amount on completion of the education.
Till now the civic body was giving an allowance of Re 1 per girl child for attending the class every day. But now it has suggested a fixed amount scheme. In civic-run schools mostly students are from lower strata of the society or slum areas that often do not complete their primary education resulting in high dropout rate. In a hope that financial incentive will be able to lure parents and children to complete their primary education the civic administration has suggested a fixed amount scheme.
Instead of attendance allowance under the new scheme at the time of enrollment in class I, a fixed deposits of Rs 1,000 will be made in Indian Bank which will get doubled when the girl student completes her primary education till class VII. In the scheduled bank savings account will be created in the name of the student in which the money will be deposited.
This scheme will be started from financial year 2009-2010 and approximately 42,750 girls who enrolled in the first standard for this academic year will be benefited from the scheme. The proposal has been approved by the education committee and an amount of Rs 4.27 crore has been sanctioned. While in the on going scheme the BMC used to give Re 1 to girl students for a day’s attendance and by the end of each academic year a maximum of Rs 210 (for 210 working days) was credited in their account.
Friday, July 31, 2009
Thursday, July 2, 2009
Short-term FD has lower interest rate than savings a/c
Almost all the banks have slashed their fixed deposit rates. After this revision the interest banks are offering on the tenure between a month and 45 days is lower than the 3.5% minimum savings bank rate and some of the banks are not even giving any interest on short-term maturities.
Therefore at this time it is better to keep money in the savings bank account rather than investing in fixed deposits.
For instance amongst the private sector banks HDFC Bank is giving a 2.25% interest on deposits below Rs15 lakh for 15 to 29 days and only a 3% interest on deposits kept for 30 days to 45 days.
While the ICICI Bank is not giving any interest on deposits for 7 days to 14 days and offers only a 3.25% interest for deposits maturing between 15 and 45 days.
Whereas amongst the public sector banks State Bank of India (SBI) is offering only a 3% interest on deposits maturing in 15-45 days.
The savings bank account rate is fixed by the government therefore it can not be changed by the banks whereas it’s not the case with deposit rates.
Anindya Mitra, senior vice-president, retail liabilities, HDFC Bank explained, "We may think that the savings rate has to come down but we can't tinker with it and why should we pay more than 3.5% for short-term money when we can borrow one day funds from the inter-bank call market at 3%". Mitra added that companies, funds and high net worth individuals having huge amount generally invest funds in these tenures.
He stated, "For companies, it's still the better option to keeping huge chunks of money in current accounts at 0%. Some companies which do not even have a bank account open an FD".
On the minimum maturity period if you invest more money the banks give less interest. For instance ICICI Bank, offers only 1.5% interest on deposits from Rs15 lakh to Rs1 crore in the 7-45 days' tenure. While Canara Bank offers 1% for deposits of more than Rs1 crore for seven to 14 days and only 2% for deposits kept for 15 to 30 days.
Regarding offering very low interest rate on minimum tenure bankers say that there is enough liquidity in the system therefore they don't need short-term cash. According to SBI official, "These funds were used to give short-term bridge loans for companies just before their actual loans were being passed. These loans were in demand, particularly when the economic growth was brisk, but now that's not the case".
Therefore at this time it is better to keep money in the savings bank account rather than investing in fixed deposits.
For instance amongst the private sector banks HDFC Bank is giving a 2.25% interest on deposits below Rs15 lakh for 15 to 29 days and only a 3% interest on deposits kept for 30 days to 45 days.
While the ICICI Bank is not giving any interest on deposits for 7 days to 14 days and offers only a 3.25% interest for deposits maturing between 15 and 45 days.
Whereas amongst the public sector banks State Bank of India (SBI) is offering only a 3% interest on deposits maturing in 15-45 days.
The savings bank account rate is fixed by the government therefore it can not be changed by the banks whereas it’s not the case with deposit rates.
Anindya Mitra, senior vice-president, retail liabilities, HDFC Bank explained, "We may think that the savings rate has to come down but we can't tinker with it and why should we pay more than 3.5% for short-term money when we can borrow one day funds from the inter-bank call market at 3%". Mitra added that companies, funds and high net worth individuals having huge amount generally invest funds in these tenures.
He stated, "For companies, it's still the better option to keeping huge chunks of money in current accounts at 0%. Some companies which do not even have a bank account open an FD".
On the minimum maturity period if you invest more money the banks give less interest. For instance ICICI Bank, offers only 1.5% interest on deposits from Rs15 lakh to Rs1 crore in the 7-45 days' tenure. While Canara Bank offers 1% for deposits of more than Rs1 crore for seven to 14 days and only 2% for deposits kept for 15 to 30 days.
Regarding offering very low interest rate on minimum tenure bankers say that there is enough liquidity in the system therefore they don't need short-term cash. According to SBI official, "These funds were used to give short-term bridge loans for companies just before their actual loans were being passed. These loans were in demand, particularly when the economic growth was brisk, but now that's not the case".
Wednesday, July 1, 2009
Govt. in favor of new tax-saving scheme to tap ‘idle money’
The government is thinking over of introducing a new tax-saving scheme to collect 'idle money' kept with households and elsewhere in the system mainly for building funds for infrastructure.
According to sources the tax benefits offered may be on investments up to Rs 5lakh and be involved in somewhat meeting the country's infrastructure funding needs, which have been gauged at as high as $750 billion.
The scheme can provide multiple purposes including giving additional tax benefits to the public, channelizing the huge amount of money lying idle in saving accounts or with households for productive means, and this will also not add to the fiscal deficit, the sources said.
The sources added the government has already made an announcement of borrowing program of over Rs 3,00,000 crore for the current fiscal and if further there is any increase the liquidity will be made available to the drying up private sector and also add to the expansion of fiscal deficit.
Various sectors have been demanding for tax benefits for citizens and also garnering alternative resources for meeting the government's spending needs.
At present, collective tax benefits are being offered on an investment of Rs one lakh in insurance, pension schemes, bonds, mutual funds, children's education and housing loans, etc. An additional benefit of up to Rs 1.5 lakh is given only for housing loan interest payments.
As per Planning Commission approximation, the country would require around $500 billion for the building up of infrastructure during the remaining period of the 11th Plan (2007-12).
According to country top private sector bank ICICI Bank's Chairman K.V. Kamath the capital need for the infrastructure sector will be even higher, at $750 billion, over the next three years.
Meanwhile the policymakers have supported spending most of the money set for infrastructure as quickly as possible in the remaining years of the current five-year plan.
Financial services major Reliance Money's CEO Sudip Bandyopadhyay points out any such initiative will be welcomed from the government in case it launches some sort of infrastructure bonds that can offer tax benefits of up to Rs five lakh in the Union Budget.
According to sources the tax benefits offered may be on investments up to Rs 5lakh and be involved in somewhat meeting the country's infrastructure funding needs, which have been gauged at as high as $750 billion.
The scheme can provide multiple purposes including giving additional tax benefits to the public, channelizing the huge amount of money lying idle in saving accounts or with households for productive means, and this will also not add to the fiscal deficit, the sources said.
The sources added the government has already made an announcement of borrowing program of over Rs 3,00,000 crore for the current fiscal and if further there is any increase the liquidity will be made available to the drying up private sector and also add to the expansion of fiscal deficit.
Various sectors have been demanding for tax benefits for citizens and also garnering alternative resources for meeting the government's spending needs.
At present, collective tax benefits are being offered on an investment of Rs one lakh in insurance, pension schemes, bonds, mutual funds, children's education and housing loans, etc. An additional benefit of up to Rs 1.5 lakh is given only for housing loan interest payments.
As per Planning Commission approximation, the country would require around $500 billion for the building up of infrastructure during the remaining period of the 11th Plan (2007-12).
According to country top private sector bank ICICI Bank's Chairman K.V. Kamath the capital need for the infrastructure sector will be even higher, at $750 billion, over the next three years.
Meanwhile the policymakers have supported spending most of the money set for infrastructure as quickly as possible in the remaining years of the current five-year plan.
Financial services major Reliance Money's CEO Sudip Bandyopadhyay points out any such initiative will be welcomed from the government in case it launches some sort of infrastructure bonds that can offer tax benefits of up to Rs five lakh in the Union Budget.
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