7 WAYS OF BEING CASHSLESS / DIGITAL BANKING

7 WAYS OF BEING CASHSLESS / DIGITAL BANKING

After demonetization,  Digitalization is the most discussed topic. Although this was earlier also in place and people were using digital ways to transact But due to demonetization and sudden cash crunch led to immediate rise in digital transactions. Let’s have a brief look on digital methods to do banking transactions :

Internet Banking :-

You can do banking transactions by login into Bank site from anywhere. Internet Banking is a convenient way to do banking with the comfort of your office, home or anywhere. You can avoid the queue or delays and also the hassle of visiting your bank. You can save your valuable time by simply doing your banking transactions through internet banking.

Feature of Internet banking :-

a)    You can transfer funds to any account with in your bank or outside to other banks also.

b)    You can download your bank account statements as and when required.

c)    You can open Fixed or Recurring deposits through internet banking.

d)    Pay your utility bills like telephone bills, mobile bills, electricity bills, municipal taxes etc. through internet banking.

e)    Mobile recharge , Dish TV recharge , can also be done through internet banking.

f)     You can do transactions through NEFT / RTGS or IMPS also by providing beneficiary account number and IFSC code.

g)    Direct and Indirect taxes can also be paid through internet banking login.

h)   Lot many other financial and non financial transactions can also be done through internet banking.

Internet banking offers you the ease and convenience of transactions in a very comfortable environment. With internet banking you can pay bills without waiting in long queues. You can set your bill pay reminders and never forget to pay on time. Internet banking is safe and secure if you do your login with your banks trusted portal.

UNIFIED PAYMENT INTERFACE SYSTEM (UPI) :-

If you wish to send some payment to your friend or relative then you need to obtain his account number , Bank name , Bank Address , IFSC Code and approach your bank for sending the payment through NEFT or you need to login your net banking , register payee and wait for one hour . After this only you will be able to remit the money through your net banking login. Another scenario you approached departmental store or any other vendor for purchase of your needs ; now you will pay either through cash or through swipe of your debit or credit card. Just imagine that you do not have sufficient cash in your pocket and the vendor also do not have the swipe machine ? You will have to rush to ATM for cash withdrawal or sacrifice your shopping….

Gone are these days now….  You just need to have your UNIFIED PAYMENT INTERFACE (UPI) ID . You can remit payment through your UPI – ID on immediate basis without having any debit or credit card and no need to login on to internet banking etc. Just required is that the opposite receiving party should also have UPI – ID. National Payments Corporation of India (NPCI) has just launched the first of it’s kind of cashless transaction system. Presently this is being launched for person to person transactions and shortly this will be launched for merchants also. This APP can be used for payment of Rs. Fifty to Rs. One lac.

What is UPI :

UPI is a application which facilitates immediate payment by just click and without the requirement of any debit or credit card and also no internet banking etc. is required. What all you need is a Smart Phone and downloaded and installed UPI app. UPI transfers funds through one virtual UPI – ID to another virtual ID. You need to generate virtual id through your bank. You can generate your virtual ID as per your choice also. Sushil Kumar can keep his virtual ID as sushil.kumar@icici

You need to send money to your wife and suppose her ID is sushma.rani@axis  ; you just fill this virtual ID in APP and fill the amount to be remitted and click on Pay--- the money will be sent in the next moment. Presently you can  send from Rs.Fifty to Rs. One lac..

UPI will change your Financial Payment Life :

No requirement of having account number or bank details of receiver and the money can be remitted by just one click with having only one UPI – ID like an email id.

If the merchant during your shopping is also the user of UPI than in this case you are not required to use any debit / credit card or net banking and also no need to pay cash ; just click on UPI – Id of the merchant and remit payment through one click.

Since the payment is digital so you need not to carry cash or cards also. This is more safe than any other mode and also no risk of theft. You also need not worry about Bank holidays or Sunday. This is on for 24 hours a day and 365 days a year.

This will save your time too as sending money through NEFT or net banking is time consuming and the chances or error are also very less through UPI mode.

List of Banks which are going live with UPI:

 Banks providing UPI enabled mobile app on Google Play Store:  Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank,· Catholic Syrian Bank, DCB Bank, Federal Bank, ICICI Bank, TJSB Sahakari Bank, Oriental Bank of Commerce, Karnataka Bank, UCO Bank, Union Bank of India, United Bank of India, Punjab National Bank, South Indian Bank, Vijaya Bank and YES Bank.                                                                                                                       

BHIM APP :-

This is the most discussed APP now a days. This APP has been designed by National Payment Corporation of India (NPCI). BHIM – Bharat interface for money – after Babasaheb Dr. Bhimrao Ambedkar. Presently this APP is available only for Android – SO, ios and windows mobile users can not use it. The BHIM APP is supposed to support Aadhaar based payments with a finger print impression. This facility is yet to start.

BHIM is a digital payments solution app based on unified payments interface (UPI). If you have already signed up with your bank account for UPI which is linked to your mobile number, you will be able to use the BHIM APP to carry out transactions. You can send or receive money through BHIM APP from other UPI addresses.

BHIM is not a e-wallet as facility to store money like Paytm is not available in this APP. You can only send or receive money to another UPI ID. There is a maximum of Rs.10,000/- per transaction allowed and Rs.20,000/- with in 24 hours. No charges are being levied for transacting through BHIM APP.

E-Wallet : -

Just like you keep your money in your wallet, you can also keep your money in mobile application known as e-wallet. E-wallet may or may not be linked to your bank account. You can send money and can do various transactions through e-wallet. This is the easiest way to do transactions now a days.

Type of transactions which can be done through e-wallet :-

a)    Send or receive money from another person.

b)    Mobile or Dish TV recharge.

c)    Payment or Receive money through UPI.

d)    Pay Utility Bills like Mobile Bills, telephone bills or electricity bills.

e)    Shopping – e commerce.

f)     Purchase movie tickets.

g)    Loan Payments.

Various offers also float time to time by e-wallet companies like cash back or discount on movie tickets etc.

Top five e-wallets are :-

PhonePe

Pay U Money

Pockets by ICICI Bank

Paytm &

Oxigen.

DEBIT CARD AND CREDIT CARD :-

Debit card is an instrument which is used to transfer money electronically through point of sales (POS) machine while carrying out payment for purchase transaction. It is a plastic card used to withdraw cash from ATM also. Unlike the Credit card money is directly debited from saving / current account of card holder where in credit card the money is provided by Bank as credit for a certain period after which credit card holder need to pay back the same to its bank.

MOBILE BANKING :-

Your Bank provides a mobile application on your mobile phone set which provides  quick, simple and convenient way to take command of your bank account, on your mobile phone. Mobile banking provides you :-

·         Convenient way to access your account

·         Safe and Secure Banking

·         Convenient way to pay bills (Telephone, electricity , mobile & other utilities bills)

·         Get exciting offers and discounts

·         Banking services without internet (SMS Banking & NUUP)

SANJAY MITTAL

B.Com,  MBA (Finance)

CAIIB,  PGDCA

PG Wealth Management

Senior Banker and Financial Analyst

Mobile 8146624667

Email :  shsanjaymittal@rediffmail.com

Why one Should leave behind a will

What is a will :-

A will is nothing but your wish or desire to leave the legacy behind you with clear statement that to whom your left behind Assets like Real Estate, Cash, Jewellery and other personal property shall be given lawfully. A will contains the declaration from maker towards his / her legal heirs to get the belongings in a lawful manner and to avoid any family disputes.

Why a Will is important :-

A will is very important document to be signed by one responsible individual during his life tenure and it is most important only when it is drafted in a right and lawful manner. If  anyone die without leaving a will behind ; then it is up to the court to decide about distribution of property and other belongings according to law towards legal heirs which can cause a lot of difficulty to legal heirs due to complicated  paper work and can cause a lot delay also. It may also not be as per your wish and the estate will be distributed as per legal share only.

Valid Will :-

A will is thoroughly valid when it is written by

A person of sound mind and without any pressure or coercion.

It can be on a simple paper and not required to be on legal paper.

Has to be signed by the person making and submitting a will.

A valid will has to be witnessed by at least two witnesses and none of the witness shall be the beneficiary towards the will .

Steps to write a will :-

Step 1 :- Make your mind and plan ….

Make your mind and plan to distribute your estate to your legal heirs as per your wish. Draft a rough plan and think it through twice. You can also discuss your plan and can take advice from your family or close friends before you go it final.

Step 2 :-  Draft your will …….

Contact your solicitor or Financial Advisor  and get your will drafted as per your wishes. Pay the fee as required and as per market practice to your financial advisor which may vary from market to market.

CIBIL AND CREDIT HISTORY

I have seen a good number of people struggling to get Credit funding from Banks or financial institutions due to bad or spoiled credit history or due to bad Cibil score or record. Mostly 90% people said above are not the real defaulters and are good borrowers with paying intentions, but they spoil their credit history or cibil scores due to ignorance or small errors.

Why CIBIL and What is CIBIL :-

A good repayment track record and excellent CIBIL score is the most important criteria adopted by Banks or financial institutions for allowing funding to any borrower. Your credit score which Banks checks through cibil is the important indicator to check ;

Ø    Repayment track record for your existing or past loan accounts you held.

Ø  

         Any late payment or default history for your loan accounts or credit cards.

Ø  

         Number of loan accounts and credit cards etc. held by you.

CIBIL :-

Credit Information Bureau India Limited established in year 2000 is the India’s first Credit information agency. CIBIL collects and maintains data and record of individuals regarding availed loans and credit cards etc. from Banks and financial institutions so as the information is readily available to Banks regarding credit history and records of applicants before they sanction any fresh loans and advances.  All information regarding loans and advances being provided by Banks and financial institutions to CIBIL on monthly basis and in turn the same is shared by CIBIL to Banks and FIs.

How CIBIL report is extracted :-

CIBIL report  is extracted with PAN number , Date of Birth, Address etc. by the member Bank or FI by logging in to www.cibil.com

Credit Score :-

750 or above credit score is generally considered as good score for allowing credit facility by Banks or FIs. 79% of the loans and credit cards are sanctioned to individuals basis CIBIL score of 750.

How to improve your credit score and maintain good credit track record :-

Always Pay your dues before due date :-

Ensure to pay your dues well before or on due date. Normally in most cases people spoil their credit track by not paying the dues on due date. Example : My friend Manjeet availed Home loan from ABC Bank and in turn submitted post dated cheques for EMI from his salary account with XYZ Bank. Now on every due date he did not maintained balance in XYZ Bank and his PDC got bounced every month ,  BUT he is not a defaulter and visits ABC Bank same day and deposits his EMI in cash. Now analyze the situation ; all the EMI was paid by Manjeet on same day in cash but from CIBIL record point of view his all EMI cheques got bounced and he is not a good borrower. ??

Another example of delayed payment is Mr.Gurpreet who has availed a personal loan of 2 lacs from a Financial Institution and in turn had submitted PDCs from his salary account with JKL Bank with PDC date as 10^th of every month. Now as he is getting salary from his employer every 30^th so he allowed each PDC dated 10^th to bounce and deposited EMI every 30^th in cash. Although he had paid all his EMI with no default still he has a bad credit score with 100% DPD.

Always Serve monthly interest in time :-

My friend Sunil Kumar (commission agent by profession) is availing cash credit limit of 2.5 mn from a nationalized Bank since last 5 years. Limit utilization is always under 2.5 mn. During off season i.e. June he did not served the interest amount for a period of 75 days and his Banker also didn’t pressed upon the interest service. Sunil was in the impression that the limit is very well under sanction limit so didn’t bothered about payment and hence not resulting in DPD and now the Banker with which he is taking up the matter for his limit takeover with enhancement has refused due to interest payment default. ??

Credit Card Dispute :-

My friend Bhupinder Singh yesterday told me that he has decided not to pay his credit card dues of Rs.350/- only due to reason his banker has not send his credit card statement in physical form to him.  Now what do you think about his this decision. He will just simply spoil his credit score for future. ??

 Please be sensitized towards these small errors we normally occur and move towards a healthy credit score.

All the best.

Sanjay Mittal

R/o # 1119, Model Town, Phase III, Bathinda.

Mobile 81466 24667

Email : - shsanjaymittal@rediffmail.com

HEALTH INSURANCE

Let’s talk to any one in our circle , neighbour, relatives or any community, almost somebody is suffering from any health issues in all the families.  Some time these health problems become critical when convert into serious ailment. With rising inflation day by day (Medical inflation nearing 20% ) Medical costs are going beyond control and also these are the expense which occur without budget. Even normal and simple disease / sufferings now a days resulting into thousands of medical costs which shakes almost all the family budget.

Why Medical Insurance :-

Medical inflation is sky rocketing and even simple disease treatments are costing thousands of your hard earned money. By taking Medical or Health Insurance you can protect your hard earned money in case of any eventuality to get liquidated or in case of any Critical illness huge sum goes out of hand and some times situation arise for borrowings also if the treatment cost is huge. By taking Health Insurance you can avail reimbursement of your medical bills or can avail cashless services also from network hospitals.

Tax Benefits :-

Keeping in view the increasing medical costs Govt. of India has increased section 80D Tax exemption limits to 25,000/- (Individual or HUF) and 30,000/- (for Senior Citizens) as per Budget 2015. Payment of Medical insurance need necessarily to be paid in other than cash.  These deductions mentioned are over and above the total limit of Rs.150,000/- under section 80C.

Which Health / Medical Plan :-

Health or Medical plans can be bought in two ways i.e. Individual Health plan or Family Floater. In Individual Health plan users can avail individual health insurance plans in their name and different insurance limits are assigned to users while in Family Floater a total limit of insurance is assigned to whole family.  For more clarification let’s take an example :-

Suppose Mr.Suresh bought individual health plans in the name of himself and his wife Mrs. Sudha for an amount of INR 4 lacs so the separate insurance limits of INR 4 lacs will be assigned both to Mr.Suresh and Mrs.Sudha and in case of any requirement both of them can avail INR 4 lacs and up to total of INR 8 lacs.  In the case of Family Floater is Mr.Suresh bought health plan then the total limit of INR 4 lacs will be assigned to Mr.Suresh and Mrs.Sudha and in case of any requirement maximum amount up to INR 4 lacs will be available to both of them.

Premiums :-

Premiums are generally high in case of individual health plan and low in case of Family Floater. It is generally recommended to buy Individual Health Plan for the people less than and up to the age of 35 and Family Floater in case of age more than 35 years.

 Precautions :-

Take care of Exclusions while purchasing Health insurance. Pre existing disease or ailments are not covered or covered after certain period as per company policies. Declare your pre existing ailments while filling the forms to avoid any later stage issues. Also fully declare smoking, alcoholic or blood pressure or diabetes etc.

Claim Processing :-

Claim processing can be got done in two ways i.e. getting reimbursement from health insurance company after getting treatment and by submitting your discharge bills to company. Company or TPA (Third Party Administrator) will process the admitted claim and will reimburse the claim to you as per maximum sum assured. Another way is to get your claim processed in cashless way i.e. you just have to got your treatment done in any of the network hospital by presenting your cashless card with policy details and the hospital itself will get the claim processed and will treat you cashless and will not charge anything from you. This is the most convenient and recommended way for Health Insurance users.

 Critical Insurance Cover Rider :-

It is always recommended to get critical insurance benefit rider attached to your health insurance plan if you are above 40 years now. Critical Insurance cover pays you a lumpsum reimbursement if you are diagnosed by a critical illness. Primarily critical illness as understood are Cancer, Heart attack, major organ transplant, paralysis , kidney failure. One must got the rider attached to health insurance plan to get lumpsum reimbursement in case of any critical illness diagnosed to avoid any financial implications.

Conclusion :-

Almost all the health insurance companies allow entry to health insurance plans up to the age of around 65 years to it is always recommended to buy health plan at earlier stages of life. Premiums are also low at younger age as compared to 40 – 50 or 60 years. Also it is recommended keeping in  view the increased risk of health hazards in today;s life to buy health plan at early stage before you got struck with any such issues.

Wishing you all the best and healthy life.