November 11, 2011

Personal Finance News [Oct 2011]

Some of you might know about news.jagoinvestor.com which publishes small and crisp “one-paragraph” news on personal finance on regular basis. These are those news items which cant be converted to a full-fledged articles but still are important to communicate to you all. So with this article I am introducing Personal Finance News Blog which has small news items on personal finance on regular basis, you can subscribe to it if you want to read news items on regular basis on your email. I am putting some of the latest developments in personal finance in the month of Oct 2011.

1. Get different interest rates on saving bank accounts

RBI in its monetary policy for 2011-12, has deregulated the interest rates on saving bank accounts. Till now the saving bank interest rate was uniform across all the banks and was decided by RBI (it was 4%) , but now all the banks are free to provide an interest rate which they want. However there is a caveat. On any deposit of less than 1 lac, there will still be a uniform interest rate by all banks which will be decided by RBI, but on deposits more than 1 lacs, banks will have freedom to choose the interest rate they want to give.

Yes Bank has even upped their saving bank account rate to 6% , so if you keep your money in YES BANK saving bank account , you get 6% interest which will be computed on daily basis. This move is expected to bring lots of competition among banks and hence decrease their profitability too.

2. No more pre-payment penalties – says National Housing Bank

Housing finance regulator National Housing Bank (NHB) has directed all housing finance companies (HFCs) to stop levying penal charges on customers for pre-payment of home loans with immediate effect. These prepayment penal charges are levied mainly by the private sector banks and housing firms and could be as high as four per cent. The move is expected to provide relief to lakhs of home loan borrowers from HFCs. National Housing Bank (NHB) regulates 54 housing finance companies, including mortgage major HDFC, LIC Housing Finance and Dewan Housing Finance.

“The move benefits only HFC borrowers at present. But if the move spurs the Reserve Bank of India (RBI) to follow suit, that will relieve all the borrowers, including home and auto loan borrowers, from the prepayment charges,” said a personal finance advisor, who wished not to be identified. “The pre-payment charges were restraining customers from moving around,” NHB chairman and managing director (MD) R.V. Verma said.

3. RBI raises repo and reverse repo rates by 25 basis points

RBI today increased repo and reverse repo rate by .25% or 25 basis points. Repo rate now stands at 8.5% and reverse repo rate is at 7.5%. Repo rate is the rate at which banks borrow from RBI , which means that this extra .25% might be passed on to the end customer which will increase the home loan EMI’s and other EMI’s too.

In the last 18 months there has been several hikes in interest rates , which has pushed the rates by 5.25% from the bottom. This has increased a lot of pressure on those loan payers who were on fluctuating interest rates . Also RBI has pointed out that this might be one of the last leg of interest rate hikes and from here on the rates might decrease in long terms.

4. Federal Bank and Oriental Insurance launch Pravasi Insurance scheme

Federal Bank has partnered with Oriental Insurance Company to launch a mediclaim policy for the NRI community, ‘Fed Oriental Pravasi Insurance’, which will offer NRIs a cover for normal hospital expenses and unforeseen events such as repatriation and accidents. The policy also includes a legal/litigation cover, hospitalization cover, personal accident cover and a medical floater cover for family members, besides maternity benefits.

All new NRI customers, who maintain a minimum balance of Rs5,000 or more are eligible for the insurance coverage. Medical floater cover for family is available in the event of death or disability of the insured for Rs 10 lakh. This policy provides cashless treatment facility at more than 3,000 hospitals.

 For regular news updates , subscribe to news.jagoinvestor.com

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12 years ago

Hi Manish,

What is your vision behind starting Jagoinvestor News. Generally how do you follow financial news, is their any specific financial newspaper of magazine that you follow in life.

12 years ago

Lets not create a BreakingNEWS by not having anything to comment