Rupee Symbol

Ok, the rupee symbol is now out there for everyone to see. Now, you can also download it and use it in your Word documents. Fordian Technologies shows how you can do it. Check this link: http://blog.foradian.com/

It's quite simple. Just download the font and then click install on it. Then, in MS Word, select Rupee Foradian. Click the tilde sign "`" and voila, you have the symbol of the Indian rupee!

Let me know if you face any problems.

ICICI raises Quarterly Average Balance (QAB). What is QAB?

Ok, so writers are not the best paid guys around. That fact was brought to my notice recently when I got a letter from ICICI saying that from July 1 onwards I need to maintain a Quarterly Average Balance of Rs. 10,000. And if I didn't, there were penalties in store and they wouldn't mind losing me as a customer.

Do they mean what they say? If I go by past experiences, then I'm quite convinced that they mean what they say. So either I pay up or I close my account and the demat and the trading etc. associated with it. So much for "Kahayal Apka" - as their advertisement baseline goes.

Any way. That's my problem and I'll have to make a decision on it.

The interesting question was what QAB meant? The letter assumed that I knew what it was. There was no explanation of how it worked or why the amount was Rs. 10,000. (I mean, why not Rs. 7,000 or Rs. 8,000. What was the mathematical explanation for it?) But more importantly, it didn't tell me how this thing got calculated!

I know what most people would do in such a situation: Just keep Rs. 10,000 in the savings account and let ICICI keep it as a fixed deposit (even though you earn only saving rate interest on it!) But is that possible for everyone? What if you had to scrape the bottom and not leave much in the account? How will the QAB get caclulated in that case. So probably this is a good time to understand what QAB is.

Let's take the example of a statement for the last quarter: April-May-June
(Assume you had Rs. 5000 already in your account)
Date: 1st April, Deposited Rs. 5000, Total Balance: Rs. 10,000
Date: 15th April, Withdrew Rs. 5000, Total Balance: Rs. 5,000
Date: 1st May, Deposited Rs. 10,000, Total Balance: Rs. 15,000
Date: 25th May, Deposited Rs. 2,000, Total Balance: Rs. 17,000
Date: 1st June, Deposited Rs. 3,000, Total Balane: Rs. 20,000
Date: 20th June, Withdrew Rs. 18,000, Total Balance: Rs. 2,000

In the above example, QAB will be calculated as
From April 1 - April 14 = 10,000 x 14 = Rs. 1,40,000
From April 15 - April 30 = 5,000 x 16 = Rs. 80,000
From May 1 - May 24 = 15,000 x 24 = Rs. 3,60,000
From May 25 - May 31 = 17,000 x 7 = Rs. 1,19,000
From June 1 - June 19 = 20,000 x 19 = Rs. 3,80,00
From June 20 - June 30 = 2,000 x 11 = Rs. 22,000

Total Amount = Rs. 11,01,000
Then divide it by the number of days, which is 90.
To get the QAB, which is 12,233

So your QAB is above the Rs. 10,000 limit and you are safe from penalties.
I got curious about this whole QAB business and checked out how other banks went about it. I also have accounts in a couple of other banks, so I thought it would be a worthwhile exercise. This is what I found:

1. Citibank = Rs. 25,000
2. HSBC Bank = Rs. 25,000
3. ICICI = Rs. 10,000
4. HDFC = Rs. 10,000
5. Axis Bank = Rs. 5,000
6. Kotak Mahindra Bank = Rs. 10,000

All Public Sector Banks have QABs between Rs. 500 and Rs. 1,000
Their penalties range from Rs. 50 to 200 in comparison to private banks who charge around Rs. 750 on a quarterly basis.

Banks maintain that they need to have such a minimum amount so as to be able to offer the kind of service they offer. So more service from private sector banks and hence more you're expected to pay. What are you paying for? Anything and everything from ATMs to cheque books to online help, etc.

So you decide if you feel whether you're willing to block this amount of money for the service they offer or if you'd rather switch to the lower service offerings of a PSU and maintain a lower QAB. The choice is yours.

Now I'll have to make mine.

PS: This is something that all of you should know.
The RBI, as part of its financial inclusion initiatives have made it mandatory for banks to offer low-frills and low balance accounts. Most banks have it; but it's often not disclosed to customers. For example, a no-cheque book account in SBI will have a QAB of Rs. 500 instead of Rs. 1,000. Plus, the QAB changes with location. You pay a higher amount in metros and larger cities and lower QAB in smaller towns and villages.

A surge in Financial Awareness efforts

Of late, I'm noticing a distinct increase in the number of articles, workshops, interviews etc. that aim to educate the common investor. This is primarily by institutions and people related to the field. Personally, I feel too much is happening which is a bit confusing. But then, as they say, if you throw so much, something's gonna stick. So probably more is better in this case.

A quick list of what I can remember from everything that's happening around:
1. Moneylife Foundation Workshops held every week in Mumbai. This is by Moneylife magazine.
2. Financial Literacy Awareness programs by SEBI. This looks like a serious effort. There are dedicated teams and support infrastructure being put in place.
3. TV programs specially dedicated to personal finance on the business news networks. Haven't been able to check the specific programs on each channel, but ever so often, when I switch to a business news channel, I happen to catch a glimpse of such a program. (Personally I feel this is a very effective medium if someone can make it work like the saas-bahu serials)
4. Dedicated pages to personal finance in Mint
5. Lots of articles in mainstream newspapers about Ulips vs Mutual Funds. A lot of them are clearly spelling out the issues with Ulips.
6. Lot of blogs and websites that are trying to focus on educating the retain investor.
7. CFPs creating their websites and trying to educate their clients about money matters.

The economy is heating up too. Inflation is rising. RBI may increase rates. So money matters are really up there for everyone to notice.

A-Z of Investing: Bulls and the Bears

These are two terms that you cannot avoid hearing if you are discussing the stock market. For those who are not sure what they mean, it can get a bit difficult following the discussion. So what exactly do these terms mean?

Consider the Bull. It's an animal that's a symbol of vigour and energy. It charges at its opponent with its horn pointed up in the air. The Bear on the other hand comes across as laid-back and lazy in its approach. Now, if we co-relate these images to stock market movements we can say that any upward, positive movement is "bullish" while any movement that is slow, lethargic can be considered "bearish".

A person who is upbeat about the stock market is therefore also called a "bull" while those who are pessimistic about the market is called a "bear".

But remember that a bull or a bear market is not a short term event. Nor can it be attributed to a particular stock. Usually, the stock market is said to be going through a "bull phase" if it picks up by at least 20% across most sectors. Similarly, the markets are said to be going through a "bear phase" when the markets are down by 20% or more.

During a Bull Market - most people are planning to buy stocks and there is a general air of positivity around the whole economy. As you'd have guessed by now, during a Bear market, the opposite happens. People are mostly trying to sell of their shares, the overall economy slows down.

So that's more or less what anyone means by Bulls and Bears.