All About Business Loans

A business loan is always the answer to several financial problems and crises, small businesses and start-ups usually face Getting a business loan is a lengthy process and these are few of the ways one can get a business loan.

You have to come up with and present a good business plan – your business plan has to very succinctly and clearly bring out what your business entails because this is the first and foremost requirement for all the banks who will be giving you the loan. When you have a plan that is very clear int terms of stating the business goals you plan to achieve and how you would you be utilising the money that would be lent to you, you are more likely to get a quick approval for the loan. Especially, in case of small setups, business plans are the only thing to rely upon and they therefore assume great importance.

Check your Credit Score – You have to be very careful and be completely aware of your credit score before you even think of applying for any loan for that matter. Your credit score is the deciding factor and it is one of the most important factors that banks use when they are judging one’s capability to pay off the borrowed amount. Therefore, when your score matches the eligibility criteria of the lending institution, your chances of getting the loan approved increases and you end up getting the loan.

Know how much you need and why: All banks and other financial institutions have two main  categories namely good reasons and bad reasons, and both these reasons purely depend upon what you need the money for. So make sure to keep in mind all the expenses for real estate, or in case it is for software development and buying of necessary equipment because these are usually the good reasons. The bad reasons are requirements for building offices, acquisition of non- essential business assets and supporting any financial loss. Therefore, before moving towards a bank or a financial institution for the business loan, you have to weigh your requirements and reasons properly. You also have to set your financial projections right and get an accurate estimate a proper budget for all your plans, and all of these should be done much before you apply for the business loan. You also have to now how much amount you would be borrowing

You have to get all your documents in place- if your documents are in place and all of them are arranged in order, getting the business loan gets a lot easier and the disbursal is quicker. The foremost documents that you would require are your ID proofs, address proofs, balance sheets, requisite business documents and permits, cash flow statements, and income statements. These documents are essentially required by the banks or the institutions to prove that you are credible enough and you have the ability to pay back the loan on time to bank and without delay.

It is best to compare all your lending options– When you have your document in place, you have to find out which banks and financial institutions are lending business loans to customers. This is the stage when you need to do an extensive research of what all borrowing options are there in front of you? You can then make a list of banks and lending institutions that shell out business loans and give you the best rates for the loans and pick the most suitable one.

What Is A Demat Account?

Have you made up your mind to buy shares this year? Or have you decided that at least a part of the initial public offering is what you desire? If your answer is yes then you need to open a Demat account. Then there are a few questions that need to be addressed.

Do you know the difference between a depository and a depository participant?

A depository is a place where the stocks of the investor are held in an electronic format. This is more like a bank. The head office where all the technology is present and the details of al the accounts held is like the depository. And the DPs are like the branches that cater tp the individuals.

There are just two depositories in India namely the National Securities depository Limited which is also known as the NSDL and the central depository services limited  also known as the  CDSL. There are more than a 100 DPs

What is a Demat account?

Demat account is a Dematerialised account. When you want to save money pr you need to make a payment in cheques you need to open a bank account and when you want to buy and sell stocks you need to open a Demat account. Therefore is like a bank account where the actual money is replaced by shares. You have to approach the DPs which are like bank branches to open your Demat account. For instance if your portfolio shares is more like 40 shares o Infosys, 25 of Wipro, 45 of HLL and 100 of ACC, everyone will show in your Demat account.

Therefore there is no need for you to possess any kind of a physical certificate  that show you  that you are the owner of these shares. They are there present in your account in an electronic format. Whenever you buy and sell the shares they get adjusted into your account. This is more like a bank passbook or an account statement, the DP will provide you with statements of your holdings and statements from time to time.

Do you want to know whether the Demat account is a must or not?

Nowadays all trade have to settled in a Dematerialised form, although the market regulator, the securities and exchange board of India also known as the SEBI has allowed trades of upto 500 shares to be settled in a physical format, however the case is that no one wants a physical share anymore and it has now become a thing of the past.

In order to begin you have to first look for a DP to ha an account with. Sometimes the banks are the DPs and some banks are even brokers. You can choose your own DP.

These are few elementary points pertain to the Demat account

Different Types Of Debit Cards In India

Get a thorough knowledge about debit card is?

A debit card is a card that is used for monetary transactions instead of cash. It is also called plastic cash, bank cards so on and so forth. With a debit card you can easily access your savings bank account in any bank from ATM’s you can deposit and withdraw cash whenever you want to and this would even save you the hassles of standing for hours in a long queue. A debit card can also be used in mobile and internet banking.

Do you know about different types of debit cards are available in India?

Visa debit cards: 
Such debit cards are issued with the bank’s tie-up with Visa payment services and this is why they also provide the Verified by Visa platform for online transactions.

MasterCard debit cards:
A MasterCard cirrus card or a MasterCard Maestro Card gives worldwide access to the funds of the customers and this is why they can easily carry out online transactions using their bank accounts by making use of the MasterCard SecureCode platform.

Visa Electron Debit cards:
Visa electron debit cards are absolutely similar to the Visa debit cards and the only feature that is missing from these are that these cards do not provide the overdraft feature.

RuPay debit cards:
NCPi had introduced this card as a domestic card scheme. These cards help to carry out online transactions on the Discover network and ATM transactions under the National Financial Switch network.

Contactless debit cards:
Just a tap or wave of the contactless debit cards enables the customer to make a payment near PoS terminals as these cards work on Near field technology also known as NFC therefore making any electronic payment transfer is safer and secure.

Maestro debit card:
Maestro from Master Card is a premier international debit card. It was founded in the year 1992.It is a service that has been popularly adopted at over 13 million locations that has been overspread across more than 100 countries across the globe. The signature logo on every Maestro partner card makes them easily identifiable. And this popularity instantly enables the customer to gain immediate access to his or her money  through a network of compatible ATM’s, POS outlets and online resources that are at once international and at once robust.

Do you know there is a difference between an ATM card  and a debit card?

The main difference between an ATM card and a debit card is that ATM cards can be used just in ATM machines to withdraw cash whereas a debit card can be used in ATM machines and in stores and restaurants as well for online payments.

All About Internet Banking

Internet banking or E-banking implies that any user or a bank customer who has a personal computer and a browser to his or her bank account through the website of his or her bank so that they can carry out any of the virtual banking procedures. In the internet banking system the database of the bank is centralised and is web enabled.  All the services that the bank has allowed to carry out on the internet are displayed in the menu of the bank website. Out of these services the desired service can be selected, going further the interaction between the computer and the internet banking website is dictated by the kind of service that is being performed. The conventional model of a bank is now being replaced by alternative delivery channels and ATM networks.

Once the branches of the banks are connected together by the satellites links there would be no physical bank branch.  It would be more of a border less entity that would allow anytime anywhere and anyhow banking.

This is how the internet banking in India works –

1. Information only system – general information for instance the  interest rates, bank products, branch location, loan and fixed deposit calculators are provided for in the bank's website. There are also facilities for downloading various kinds of application forms. The communication between the customer and the bank is normally done through email. There is absolutely no interaction between the customer and the bank’s application system. And the best part is that in this system there is no possibility that any unauthorised person will get into the bank system through the internet.
   
2. Electronic information transfer system – The internet banking system in India provides customer specific information which includes account balances account summaries and bank statements. The information is largely in the read only format. The customer is identified and authenticated through a password. The information that the customer is looking for us fetched from the computer system in an offline mode or a batch mode.
   
3. Fully electronic transactional system - This system in the internet banking allows bi-directional capacities. The customer can submit the transaction for online update. This system calls for a huge security and control and in such an environment the web server and application systems are linked to secure infrastructure. A technologically advanced computerisation, networking and security, intra-bank payment gateway and legal infrastructure are what it is comprised of.
   
4. ATM or the Automated Teller Machine – it is designed to perform the most important function of the bank. It is made operational by a plastic card with special features and this plastic card cuts down on the cheques, banking hour restriction, long queues, paper verification and other formalities. These are electronic debit cards

These are a few points that are worth noting when it comes to internet banking.

All you need to know about bike insurance

Is there anything more exciting than riding your trusted bike through the city roads? Not really. In fact, for most riders, their bike is a reflection of their personality. Which is why insuring your bike is the best way to show it some love. Having two-wheeler insurance saves you against the financial loss you might face if your bike was wrecked in an accident or worse, stolen. After all, no one needs that kind of negativity in their life.

There are two kinds of bike insurance

Comprehensive insurance - This covers damages to the third party, as well as your own bike. It is best for those wanting to cover for losses from incidents such as theft and natural disasters.

Third party liability insurance - It covers only the damages to a third party and their property. It's best for those insuring their bikes only because it's mandatory (but we wouldn't recommend that!).

What is included in bike insurance?

Damages that might happen to your bike in an accident, Personal Accident Cover - if you (the owner-driver) are injured in a bike accident, the insurer compensates you. All the financial protection to your bike from natural calamities such as floods, earthquakes, etc. is also covered. In case your two-wheeler gets stolen, your insurer will pay an amount equal to your bike’s IDV. Coverage for damages caused during a man-made disaster. This includes riots; strikes, fire, and terrorism all of which are covered.

What is excluded in bike insurance?

Damages caused if you were caught riding under the influence of alcohol. Loss and damages that may be caused because of a war or nuclear strike, accident related damages caused while you were riding your bike for illegal activities. Damages caused or losses incurred to your bike while you were riding it without a license. Regular mechanical expenses due to consistent wear and tear are also not covered under bike insurance.

Bike insurance is simple fast and simple. Some websites even give you the opportunity to renew your bike insurance online instantly and all this even if your policy has expired.

There is a also a multi bike insurance. Do you know what it is?

A normal bike insurance are designed for one year and has to be renewed annually, on the other hand a multi bike insurance allows bikes to be insured up to  three consecutive years at a time. The policy holders do not have to renew the insurance contract after every year. This is because they receive a policy certificate for maximum of three year cover.

Do you know what is NEFT?

National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.

Another important question is whether all bank branches in the country part of the NEFT funds transfer network?

For being part of the NEFT funds transfer network, a bank branch has to be NEFT- enabled. The list of bank-wise branches which are participating in NEFT is provided in the website of Reserve Bank of India at http://www.rbi.org.in/scripts/neft.aspx

Who can transfer funds using NEFT?

Individuals, firms or corporates maintaining accounts with a bank branch can transfer funds using NEFT. Even such individuals who do not have a bank account (walk-in customers) can also deposit cash at the NEFT-enabled branches with instructions to transfer funds using NEFT. However, such cash remittances will be restricted to a maximum of Rs.50,000/- per transaction. Such customers have to furnish full details including complete address, telephone number, etc. NEFT, thus, facilitates originators or remitters to initiate funds transfer transactions even without having a bank account.

Who can receive funds through the NEFT system?

Individuals, firms or corporates maintaining accounts with a bank branch can receive funds through the NEFT system. It is, therefore, necessary for the beneficiary to have an account with the NEFT enabled destination bank branch in the country.
The NEFT system also facilitates one-way cross-border transfer of funds from India to Nepal. This is known as the Indo-Nepal Remittance Facility Scheme. A remitter can transfer funds from any of the NEFT-enabled branches in to Nepal, irrespective of whether the beneficiary in Nepal maintains an account with a bank branch in Nepal or not. The beneficiary would receive funds in Nepalese Rupees.

Is there any limit on the amount that could be transferred using NEFT?

No. There is no limit – either minimum or maximum – on the amount of funds that could be transferred using NEFT. However, maximum amount per transaction is limited to Rs.50,000/- for cash-based remittances within India and also for remittances to Nepal under the Indo-Nepal Remittance Facility Scheme.

Whether the system is centre-specific or has any geographical restriction?

No. There is no restriction of centres or of any geographical area within the country. The NEFT system takes advantage of the core banking system in banks. Accordingly, the settlement of funds between originating and receiving banks takes places centrally at Mumbai, whereas the branches participating in NEFT can be located anywhere across the length and breadth of the country.

What are the operating hours of NEFT?

Presently, NEFT operates in hourly batches - there are twelve settlements from 8 am to 7 pm on week days (Monday through Friday) and six settlements from 8 am to 1 pm on Saturdays.

Everything about FDs

Fixed deposit or FDs is a very safe and secure investment option that allows you to invest your money for a specific time span and at a fixed rate of interest. During the tenure of your FD even of the rate of interest of the FDs go up or down, you will; have it pay to same rate of interest that was decided during your initial investment procedure.

The Fixed deposit accounts pay a higher rate of interest than the savings bank account. All the other conditions are equal; you would definitely be in a much better position if you put your money into an FD account instead of a savings bank account. The interest can be paid to your quarterly or half yearly or annually. If in case you are a senior citizen the rate of interest on your FD might even go up.

There are two kinds of FDs-
Bank and Non-banking financial institutions FD – This kind of Fixed deposits are offered by banks and non-banking finance companies the RB regulates th4ese institutions.

Corporate FDs - These are offered by the companies that are in the hunt to raise money from the open market. Corporate FDs give you a higher rate of interest but at the same time it also has a higher risk quotient when compared to the bank FDs.

Here are the Pros –
FDs give a safe return – FDs are more than secure and very low-risk investments, bank FDs are guaranteed up to Rs 1 Lakh by the deposit insurance and the credit guarantee corporation.

You can take a loan against your FD -
You can borrow up to 85% of the FD amount in some banks this can happen only after a few months of the existence of your FD however this is valid only for Bank Fds and not the NBFC FDs or the Corporate FDs.

Low maintain –
Unlike other investments like stocks, mutual funds or real estate, you do not have to keep an eye on your FDs daily or monthly or undertake any kind of risks or maintenance work.

Here are some of the cons-

Low Returns –
The FDs are very low-risk investments and hence even though the returns are guaranteed they are on the lower side especially when compared to the other investment options like stocks, shares and real estate.

Lock ups –
once you create an FD account and you deposit your amount in your account for the decided tenure, you cannot withdraw the amount before the expiry of the tenure. If the e arises and you do have to withdraw each you have to pay the penalty for pre-withdrawals which would include a reduced interest rate and charges around 1% of the amount that we invested.