S&P BSE Sensex*	Re/US $	Gold Rs/10g	Crude ($/barrel)	FD Rates (1-Yr)
20,373.56 | -140.29 -0.68%	62.39 | 0.19 0.30%	29,795.00 | -295 -0.98%	106.08 | -2.36 -2.18%	8.00% - 9.00%

Want to avail locker facility from your bank? Deal smartly...?

If you want to obtain locker facility from a bank; you must either have to have patience or should be ready to be a little generous. Unfortunately many people give up too easily in the hurdle race. Since banks have limited lockers and there are many seekers, you become a sure shot prospect for a bank for garnering more business. It is very unlikely that you asked for a locker and you got it without any glitches. More often than not, you are likely to get below mentioned responses on making enquiry about the locker facility;
 

• No lockers are currently free for occupancy
• You are on a waitlist
• Buy insurance (if you are already a customer and have a savings bank account)
• You are on a waitlist but you might increase your chances of getting a locker soon if you become our priority customer.
   

You response to above feedback gives banks idea about urgency you may have for availing the locker facility. If you show interest in knowing what may categorise you as "priority customer" you are surely in for a ride.
 

• You can become our priority customer by booking a Fixed Deposit (FD) worth Rs one lakh (or of any amount higher than this), if you already have a savings account with the bank
   
• If you don't have a savings account, you are likely to be asked to open a savings bank account which has a huge minimum balance requirement; say Rs 50,000.
   

People might give in at this point and may choose one of the alternatives given by the bank and close the deal or may prefer to make enquiry with a few more banks. Banking personnel become more confident about their product pitch and story is repeated every time somebody enquires about the locker facility.

Can banks do this to you, officially?
Absolutely no! RBI has issued separate guidelines governing issues pertaining to customer services. The RBI guidelines clearly state that, "banks cannot link the provision of locker facility with placement of fixed or any other deposit beyond what is specifically permitted". The banks are allowed to ask for a fixed or any other deposit which may cover rent for 3 years and charges for breaking the locker in case of an eventuality.

Further, RBI has also directed banks to follow fair and transparent procedure for allotment of lockers and every application received for availing locker facility should be acknowledged and be given a waitlist number. No bank coming under the purview of RBI can be an exception to these guidelines.

What action should you take?
Banks may pressurise you for achieving their business targets. If bank personnel sets any pre-condition for offering lockers, you should simply ask to have it in writing. Most of banks will be hesitant to give anything in writing and may put you on a wait-list. If you are dealing with a private bank, you have limited options at this stage; but you can still write to the customers' grievance department or to the compliance officer. They must take a note of your complaint and have to get back to you in writing. You may also take your case to banking ombudsman in case you are still not satisfied and feel bank is deliberately denying you a locker.

If you are dealing with a public sector bank, you are slightly well equipped as you can launch an attack of questions under Right to Information (RTI) act. You must write to Central Public Information Officer (CPIO). Please don't forget, now heads of all major nationalised banks are CPIOs. So you may address a letter branch heads, after making sure (s)he is CPIO.

PersonalFN believes that you should be aware about your own rights and shouldn't allow banks and other financial institutions to take undue advantage of your need. You, yourself should decide as to how much money you should put in a fixed deposit and not your bank. PersonalFN offers advice on matters related to personal finance.

Can consumer companies drag performance of your mutual fund now?

Consumption story of India was going strong even when markets were turbulent thanks to relatively stable businesses. Some of India's top companies focused on consumer demand witnessed strong surge in business activities and were able to report impressive numbers even when other industries were facing the heat of economic slowdown. GDP growth has reduced nearly to half over last 6-7 years and manufacturing sectors are the worst affected. Under such scenario, mutual funds preferred to stay with businesses having stable earnings and thus invested aggressively in consumer companies. But now tide seems turning even for these companies.

Being affected by persistently high retail inflation and input cost pressures some of India's top consumer companies have been experiencing slack in sales and profit growth has also slowed down considerably over last six quarters. This suggests that poor growth has sustained for relatively a longer time period and valuations in this space are still high.

A number of mutual funds have considerable exposure to companies focused on consumer discretionary spending. For example, about 286 mutual fund schemes have exposure to ITC Ltd. And about 117 of them hold exposure in the range of 1%-5%. Similarly 114 schemes have invested in Asian paints and 55 of them have investments in excess of 1% but below 5% of their portfolios. Moreover, Consumer-Non Durable sector is one of the top-5 sectors on most of fund manager's radar.

PersonalFN believes returns of your mutual fund would be affected with sectorial shifts going forward. However, you need not worry about such changes as mutual funds take into account changing macro-economic conditions and tweak portfolios if needed. Investing in mutual funds gives this edge to investors.

 

The Most Awaited Tax Planning Guide 2014 - Released! Waiting till the eleventh hour for tax planning would lead you to the path of mere "tax saving" resulting in sub-optimal tax reduction. So undertake your tax planning activity well in advance this year. PersonalFN's Tax Planning Guide (2014 Edition) shows you how you can save your hard earned money prudently from the tax-man. Download Your Copy Now! (It's FREE!!)

Would you benefit by investing in "theme MNC" now?

You Multi-National Corporations (MNCs) are known for their efficient management, transparent operations, adherence to global standards and competent product offerings. There have been a number of MNCs doing business in India. Few of them have become popular with their brands which have become household names, while a few others are still less-known. By and Large, MNCs have generated steady returns but one should not take their success for granted. These days, it is said that, many MNC stocks are quoting at a huge discount as compared to their historical valuations. Given their underperformance in the recent past, some mutual funds have become bullish on theme MNC again. Sundaram Mutual Fund is one such fund house which has recently launched a 5-year closed ended select micro-cap fund. As per fund house, the strategy is to invest predominantly in MNC companies which have a market capitalisation lesser that than of 301st company listed on National Stock Exchange (NSE) PersonalFN has always believed that playing a particular theme or investing in thematic funds is dangerous. Let's check how MNCs have collectively performed in the recent past.
  Will MNCs continue to underperform?

Data as on January 31, 2014
(Source: ACE MF, PersonalFN Research)
Underperformance of CNX MNC in the recent past suggests they have been falling out of favour with investors. While CNX Nifty has rallied over 5% since October, CNX MNC has generated only around 2% returns.

Why MNC stocks are underperforming?
Weaker rupee and difficult economic conditions are hurting MNCs. Some of European and the U.S. based companies treat India as their one of the most strategic markets.

To read more about this news and the view of PersonalFN over it, please click here.

Buying insurance online? Read this!

Insurance agents try to capitalise on tax-saving season to promote insurance products. More often, insurance is sold as an investment product in India. Going one step ahead, some insurance agents have sold their clients multiple policies with different maturities collectively labeling it as a customised pension plan. But as awareness grew, people became aware of these infamous tricks of insurance agents. To make insurance more a "buy" product and bring in more transparency; Insurance regulatory and Development Authority of India (IRDA) issued new guidelines. Unit Linked Insurance Plans (ULIPs) which was considered a "hot" product a few years ago has all of a sudden become unattractive under new rule. As a result, agents too started promoting more and more traditional plans. According to the annual report of IRDA about 2.36 lakh insurance agents exited in 2012-13. With falling commissions many agents have found it unattractive to do business, especially the part timers.

To read more about this news and the view of PersonalFN over it, please click here.

Royalty: "A payment to an owner for the use of property, especially patents, copyrighted works, franchises or natural resources. A royalty payment is made to the legal owner of a property, patent, copyrighted work or franchise by those who wish to make use of it for the purposes of generating revenue or other such desirable activities. In most cases, royalties are designed to compensate the owner for the asset's use, and are legally binding."

Quote : "This company looks cheap, that company looks cheap, but the overall economy could completely screw it up. The key is to wait. Sometimes the hardest thing to do is to do nothing." - David Tepper