ODI limit restored for Indian companies

RBI has vide its notification dated 3rd July 2014 here restored the limits upto which Indian companies can make investments via Overseas Direct Investment or Wholly owned subsidiaries abroad. The limit which was 400% of the networth as on the last audited balance sheet date was brought down to 100% of the net worth vide RBI circular dated 14th August, 2013 here.

However RBI has decided that any financial commitment by the Indian party exceeding USD 1 billion in any financial year shall require the prior approval of the RBI even though the total financial commitment is within the aforesaid limits of 400% of net worth.

The operative part of the July 2014 circular reads as follows:

2. On a review, it has been decided to restore the limit of Overseas Direct Investments (ODI)/ Financial Commitment (FC) to be undertaken by an Indian Party under the automatic route to the limit prevailing, as per the extant FEMA provisions, prior to August 14, 2013. It has, however, been decided that any financial commitment exceeding USD 1 (one) billion (or its equivalent) in a financial year would require prior approval of the Reserve Bank even when the total FC of the Indian Party is within the eligible limit under the automatic route (i.e., within 400% of the net worth as per the last audited balance sheet).

Bank pay in slips - nightmare

All the bank pay in slips after the implementation of CBS have become a nightmare filling in. There are so many information asked for in a cramped small document with tiny boxes that it becomes a nightmare filling in the details. A few samples are given below

For eg. Indian bank pay in slip has hardly any space for writing the amount in words. It is very difficult to write the amount in words in that given space.

in ICICI Bank pay in slip for eg. the space given for writing the a/c no. in those tiny little boxes are too little. If somebody has a bold handwriting, he will find it difficult to fit into that space. Further the name given for writing the name of the a/c holder is too little.

Bank of India is marginally better but still a nightmare, because too much information is asked for. Its like a clutter where you don't know what to fill in.

The Bank of Maharashtra pay in slip is undoubtedly the best because it gives so much space for people to write in the details, but i suspect this pay in slip is before the CBS came into force, so have not checked their newer version of pay in slips.

In short, RBI has facilitated the core banking solutions for people but somewhere down the line bureacracy takes over and more information is asked for in a clutter with too little space for people to write the details in clear manner.

It is other matter that bankers nowadays do not bother to give acknowledgement on pay in slips, but that i leave for another blog. 

Rip Off by Indian Railways - 2nd Class A.C passengers cheated

Wife travelled by Indian Railways from Chennai to Bombay via 12164 Chennai Express on 5th July 2014 which arrived into Bombay on 6th July 2014. She was travelling on a 2 tier A.C. ticket. Right from the outset at Chennai itself there was a rip off by Indian Railways as the 2 tier A.C. compartment had only 20 seats against the normal 64 seats in any compartment. With the result that the 2 tier A.C. passengers were forced to sit in 3 tier A.C. seats. The compartment was a combination of 2 tier A.C. and 3 tier A.C. seats.

The TTE (travelling ticket examiner) did not bother to offer any explanation nor any apology for this fracas and they were told by the regular maintenance staff of the Indian railways that this is a regular practice by the Indian Railways wherein the 2 tier class A.C. passengers are forced to sit in the 3 tier A.C. On top of it the TTE also forced the passengers to pay the difference in fares owing to the recent hike in fares by the Indian Railways. Therefore the passengers were paying the normal 2 tier A.C. ticket fare and they were forced to travel in 3 tier A.C. berths.

There was no prior intimation via SMS or any other means by the IRCTC wherein the passengers should have been informed by the Indian railways of the change in their status.

If this is a regular practice going on, then surely it is a scam in the making or a full fledged scam with the connivance of the higher authorities.

People book 2 tier A.C. berths due to the relatively better comfort it provides in terms of the extra space available in the compartment, less no. of passengers using the toilets, the privacy provided by the curtains etc. When people travel for long duration such as this train which takes 24 hours to reach from Chennai to Bombay, they obviously would want to travel in better comfort for which they are paying a premium amount on the 2 tier A.C. berths.

The passengers who suffered thus should be refunded the difference in fares and compensated for the mental tension and trauma that was created due to this fracas by Indian Railways. 

Atrocious service by Spice Jet

Spice Jet service sucks!!

Recently I travelled by spice jet from madurai to bombay via flight no. SJ 275 on 2nd July 2014. 

This was a full fare one way ticket from Madurai to Bombay for which I had paid Rs.12,500/- Unfortunately I was not given a complimentary meal on the flight which took more than 3 hours.

Secondly, I had requested a window seat, at Madurai terminal when I was probably the first person to check in at the counter. Unfortunately I was given seat no. 13A which is a non reclining seat just ahead of the emergency exit door. I mean is this customer service or inhuman service. Airline customer service executives are not human at all - they probably don't like human beings which is why they give such atrocious service. Such inhuman callous service can be found only with the airlines. 

Thirdly, the check in baggage took a long time coming to the belt at Mumbai terminal. It was 30 minutes before I got my baggage. Overall experience with Spice Jet was - it Sucks!!  I am a regular traveller on Spice Jet but I guess I will have to avoid going by Spice Jet anymore. 

Mahashweta by Sudha Murthy

My first book by Sudha Murthy was Mahashwetha a very simple but beautiful book in such simple language that you actually fall in love with the writing. Sudha Murthy employs the hallmark of great Indian writers by writing in simple prose a beautiful story of a beautiful young girl from a village in Karnataka falling in love with a rich guy and then being scorned upon being visited by an illness which is seen as a curse by the poor thinking rural Indian folk. Her family also ditches her and at one point in the story, I thought Kamala Markandeya was writing the story, such was the depth of the suffering of the girl. The story moves onto Bombay and the attitudinal change amongst the people is remarkable because nobody in Bombay ever cares to question or doubt the girl for her illness. On one hand it shows Bombay as a caring city yet also as a fast moving metropolis where people hardly have time to even think and dwell upon other people's sufferings. Beautiful book by Sudha Murthy. Highly recommended  

penal charges on inoperative bank accounts

The RBI has clarified vide its circular dated 6th May, 2014 that banks are not permitted to levy penal charges for non maintenance of minimum balances in any inoperative account. 

Earlier such charges were allowed to be levied on normal savings bank accounts while no charges were to be levied on Basic Savings Bank accounts. On the normal savings bank accounts also the banks could levy penal charges only after informing the customers regarding the same at the time of opening bank accounts. 

But now the penal charges on all inoperative bank accounts has been eliminated. This is a measure towards better customer service by the banks. 

A copy of the RBI circular is to be found here i.e. http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8867&Mode=0

Foreclosure charges/ pre-payment penalty banned

RBI has vide its circular dated 7th May 2014 immediately banned the foreclosure charges/ pre-payment penalty that was being levied by banks and financial institutions on pre-payment of loans by borrowers. This will be brought into effect immediately but will cover only loans with floating rate of interest and that too only for individual borrowers. 

Not clear why RBI has left our the fixed interest rate borrowers and commercial entities who borrow monies. 

It is a case of too little, too late from RBI. 

RBI should levy a fine of a few thousand crores on all the banks and financial institutions who have been levying these charges on borrowers for all these years and reimburse to the borrowers who have been so effected. 

The copy of the circular can be found here. 

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8868&Mode=0