Atul Karmarkar.Com» Personal Finance

HDFC Bank is a khadoos bank

Atul Karmarkar — Mon, 02 Aug 2010 18:15:27 +0000

Surprising I know.. for a bank which used to focus on customer delight. I’ve been a happy customer for over a decade now. However, events over the past few months have left me feeling not so happy with HDFC Bank and their services / policies in general.

Effective April ’10, they increased the Average Quarterly Balance (AQB) to be maintained from Rs.5,000 to Rs.10,000, which didn’t make any sense as they weren’t offering anything special to warrant this increase. Possibly they were playing catch up with others like Citibank (Rs.25,000/month) or ICICI Bank (Rs.10,000/quarter).

Recently, I received my bank account statement and was surprised to see a debit towards issue of additional cheque book in the first quarter of the year. I use cheques quite a lot to make payments for utility bills, credit cards et al and 25 cheque leaves for 90 days is just not enough. Transferring via National Electronic Funds Transfer (NEFT) is possible, but there is again a service charge involved. If they’re trying to reduce paperwork caused by cheques, then why charge for using NEFT?

The biggest sore point however is that for some reason, payment gateways like Billdesk just don’t accept HDFC Netbanking as a valid payment option anymore. In cases like Airtel, the option doesn’t exist and for others like BSNL, Vodafone and other service providers, there is an option for HDFC Netbanking but when you select it, you get a popup like this…

Considering HDFC Bank is my main bank, this is quite inconvenient as I’m now forced to make online payments by credit card. The increase of AQB and service charges for second cheque book have been a disappointment too.

Their SMS Alerts also seem to have gone for a toss. I invested some money (> their alert limit of Rs.5,000) in a mutual fund 3-4 days ago. The amount has been debited from my account but I’ve yet to receive an SMS confirmation. Salary has been credited to the account today afternoon but it’s close to midnight now and the SMS alert is yet to arrive with the good news.

Their phonebanking sucks big time and it takes ages for someone to respond. When they do, they end up asking you to reconfirm your details even if you’ve validated your T-Pin. Their phonebanking officers aren’t available 24X7, and even complaints / requests for a callback go unheeded now.

Their staff seems clueless about what documents are needed in case of an address change. The phonebanking officer gave one answer, an officer at one branch gave a different answer, and another at a different branch yet another answer. Quite stupid really.. like a body where one arm doesn’t seem to know what the other is doing!

I’ve had bad experiences with ICICI Bank and ABN Amro Bank but so far I never had any problems with HDFC Bank in all these years. I’m also an HDFC Bank shareholder, and a very happy one at that, but these recent experiences have taken some sheen off that gloss, and I’ll have to reconsider using them as my main bank.

What’s your story?

Visa CodeSure-security for your credit card

Atul Karmarkar — Fri, 23 Jul 2010 02:34:28 +0000

Across the world, and particularly in India, using a credit card to shop online has always been fraught with danger, though you’re just as likely to have your card cloned when paying a bill at a restaurant.

Visa Europe now tries to add a layer of security for all those who are paranoid / terrified about using their credit card for online purchases. They have announced the commercial launch of their new credit card which features an inbuilt 12 button keypad, a battery designed to last three years and an alphanumeric digital display which generates ever-changing unique passwords each time you use the card.

Called Visa CodeSure, it is designed to work on any Visa debit, credit, prepaid or commercial card and has been approved for use in the following services:

PIN generated one-time-passcode for Verified by Visa payments at participating merchants globally – without changes to merchant software or cardholders having to register and remember passwords
PIN-generated one-time passcode for online banking access
PIN-generated one-time passcode for telephone banking services
Transaction signing for online banking services, using specific elements such as Account Reference Number or amount of transaction
Access to third party services such as corporate virtual private networks (VPN) for commercial card users, or frequent flyer programmes and other online services.

The process of validating the transaction is done in three simple steps:

When shopping online or logging in to an online banking service, the cardholder activates the authentication process by pressing the “Verified by Visa” option button on the card’s keypad
When prompted the consumer inputs their PIN into the keypad embedded in the card
A unique one-time-passcode appears on the card’s display, which is then used by the cardholder to authenticate a normal Verified by Visa transaction.

I have been an HSBC cardholder for some time now and a few years ago, they had sent me a “security device”, which did something similar, by generating a unique set of digits each time I transacted online or even logged in to my HSBC account. Eventually, once the novelty wore off, it became a pain to carry around and since I rarely use my HSBC card anyway, the device is probably lying in a forgotten nook somewhere.

Likewise, HDFC Bank has something called Netsafe. You need to create an account and then each time you want to transact online, the system generates a virtual card number. You are then prompted to link this virtual card with either your credit card or bank account, for making payment to the merchant site. I tried it a couple of times, but there were too many hassles at the time, especially on Amazon, where I ended up using my American Express card. Haven’t used Netsafe recently though.

This new card from Visa promises much, but I can’t escape the feeling that no matter what levels of security are introduced, it will only be a matter of time before some hacker cracks that system too.

Till then, happy and safe transacting online!

SEBI tells AMCs to standardize their MF disclaimer ads

Atul Karmarkar — Sun, 07 Feb 2010 18:24:27 +0000

Ah.. Finally, SEBI has cracked the whip on AMCs, asking them to get in shape their audio-visual ads for mutual funds. Readers know what kind of ads these are; on radio or TV, and said with an extremely hurried tone like someone just pressed the fast forward button.. :-p

These ads are disclaimers meant to explain the risks associated with equity/market related investments, and are to be run / displayed for a minimum of 5 seconds.

Effective May 1, 2010, the warning will now reads as: “Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing”, along with the voice-over.

SEBI also said that to avoid confusing investors, there should not be any addition or deletion of words in this statement.

However, the regulatory body’s warnings have often been treated in a cavaliar fashion before, so let’s see if this one is adhered to.

Intuit Money Manager – another personal finance tool

Atul Karmarkar — Sun, 07 Feb 2010 10:50:25 +0000

Intuit Inc. recently launched its first India-focused product, Intuit Money Manager, an addition to the personal finance software market.

This is a SaaS (Software-as-a-Service) based product, and available on www.moneycontrol.com, the key difference being that there is no software application which you need to download to your computer.

It is a money management tool that allows you to view all your financial transactions and records in a centralised location. This allows you to consolidate data from multiple bank accounts, credit cards, budgets and helps with expense management. It is also supposed to help with taxes, though I’ve yet to confirm that.

It uses 128-bit encryption and SSL technology to ensure that sensitive data remains safe. The actual exchange of data between the bank and this software is via the OFX (Open Financial Exchange), an online platform meant for transmitting financial information used by several banks.

Once you log in, you are allowed a free trial for 90 days after which you can select from two plans:

3 months – Rs.225 + service tax or 1 year – Rs.365 + service tax

This price of Re.1 per day is quite attractive and may pull in a lot of users. How long this price stays like that is of course another matter. Intuit Money Manager supports integration with 20 banks, the list of which is available on their website.

I’ve used Microsoft Money and Vault, the former of course no longer developed and supported now, but I’ve got totally used to it. Its other shortcoming was that it was US specific, so taxation issues were always a problem. Vault is a local product made by a Pune company and fits on a USB pen drive, through which it is run as well. (review on that later).

All in all, the Intuit Money Manager it seems like a usable product though personally, I’m somewhat wary of allowing it to access my bank accounts. There is no integration with any demat/trading account or any bill payment mechanism. The company also says they plan to have a mobile version out soon, which should be interesting.

One fact I wasn’t aware of is that this software is also developed in India, at the Intuit India Development Centre in Bangalore, which was established in 2005 and houses over 300 employees.

Will post more details once I sign up for a free trial. Till then, watch this space.

Morningstar starts India operations

Atul Karmarkar — Thu, 16 Apr 2009 02:25:07 +0000

Morningstar Inc, a Chicago based independent investment research company has commenced operations in India. Aditya Agarwal has been appointed as the Managing Director of the company in India. Agarwal was one of the founders of MutualFundsIndia.com (later acquired by ICRA).

Morningstar already has a presence in India; it’s data centre, which houses around 150 people. This centre was part of the deal when it acquired Hemscott from Ipreo Holdings LLC for $51.6 million.

Morningstar is a 25 year old company, founded by Chairman and CEO, Joe Mansueto with an initial investment of $80,000. They went public in 2005, and Mansueto still holds around a 57% stake in the company. The firm’s rating system for mutual funds and stocks is coveted by all industry players.

They plan to offer a mutual fund product soon, but it remains to be seen how it will fare during this ongoing global meltdown in stocks and growing risk averseness among investors towards equity.

SBI Chota SIP, a micro SIP from SBIMF

Atul Karmarkar — Wed, 15 Apr 2009 16:34:49 +0000

SBI Mutual Fund has launched an equity–based micro SIP called SBI Chota SIP.

This scheme is targeted at low income households in rural and semi-urban areas. The idea behind the scheme is basically to introduce them to long term investments in equity.

The minimum investment needed is Rs.100 per month and the minimum duration is 5 years.

Those investing thru the Chota SIP can invest in SBI Magnum Balanced Fund, MMPS 93, MSFU Contra Fund, and SBI Blue Chip Fund.

This will certainly help those from the lower income group but I see one problem with applying for this scheme – one needs to have a PAN card, and I think this is a big hurdle. If they can use some other document(s) in lieu of that, they can rope in more people to invest.

SBI gives highest return of 9.7% on EPFO funds

Atul Karmarkar — Sun, 05 Apr 2009 06:52:45 +0000

In July last year, the EPFO had appointed HSBC AMC, ICICI Pru AMC, Reliance AMC and SBI as fund managers to manage a part of it’s overall corpus, the main objective being an improvement in returns on EPFO’s investments.

Based on performance figures, SBI has given a return of 9.7%, which is better than that given by HSBC (8.5%), ICICI (9%) and Reliance (9.1%). The period under review was September 17 to December 31, 2008.

EPFO has invested Rs.30,461 crore in central government securities, which earns a return of 7.25%, and Rs.20,000 crore in state government securities and loans, which fetches a return of 7.5%.

Good Bye BCTT

Atul Karmarkar — Thu, 02 Apr 2009 15:22:18 +0000

With effect from April 01, cash withdrawals from bank will not attract tax. This is following abolition of the banking cash transaction tax (BCTT) in the Union Budget 2008-09.

The BCTT was introduced in Budget 2005-06 with the aim for setting an audit trail and to prevent money laundering using the banking channels and was applicable in whole of India except Jammu & Kashmir.

Cash withdrawals over Rs.50,000 in a single day by individuals and Hindu undivided families from current accounts attracted BCTT at the rate of 0.1%. The limit for others was Rs.1,00,000. Cash withdrawals from savings bank account did not attract the levy after an initial proposal to do so raised a furore among people.

The total collection of BCTT stood at Rs.600 crore in 2008-09.

ICICI Bank and Singapore Airlines launch co-branded credit card

Atul Karmarkar — Wed, 01 Apr 2009 01:37:00 +0000

ICICI Bank and Singapore Airlines have launched a co-branded credit card, the ICICI Bank Singapore Airlines VISA Platinum credit card.

Singapore Airlines’ Regional Vice-President (West Asia and Africa) Lee Lik Hsin said this was the first time they were launching a credit card in India, and hoped the card would bring unparalleled benefits to its loyal customers and further boost the appeal of their KrisFlyer programme in India.

KrisFlyer is Singapore Airlines’ frequent-flyer programme under which its enrolled members can redeem their miles for free flights on over 20 global airlines to more than 820 destinations across 160 countries.

The ICICI Bank Singapore Airlines Visa Platinum Credit Card has exclusive privileges especially designed for members, which include

Complimentary membership to Singapore Airlines KrisFlyer Club and Silver Tier Hilton Honors Program
5000 KrisFlyer miles earned when you first use the credit card and up to 18 miles for every Rs. 200 spent on the card.
Exclusive and fabulous fares from Singapore Airlines
Access to Golf courses, airport lounges
Discounts at international duty-free shops, Spa packages in Singapore, Hertz rent-a-car, Matrix calling cards

To apply for the card, SMS to 5676766 or apply online.

The best option? Wait for a representative to call you. Though they say the card is meant for premium members, having a platinum card is really no big deal nowadays.

LIC launches credit card with Corp Bank

Atul Karmarkar — Tue, 31 Mar 2009 00:41:16 +0000

Insurance behemoth Life Insurance Corporation of India (LIC) has launched it’s credit card in association with Corporation Bank, who is the card issuer. They have formed a separate company, LIC Credit Cards Services, to manage this new business. The company will be headed by its Director and Chief Executive Hemant Bhargav.

Initally, the cards will be offered to existing policy holders and will enable them to make payment of their premiums.

I don’t think having an additional credit card player in this sector makes any sense… There are already too many out there and not much to choose from if you compare all credit cards.

Secondly, payment of LIC policy premium is allowed thru netbanking so I don’t see why anyone will necessarily do so using the credit card.

Atul Karmarkar.Com» Personal Finance

HDFC Bank is a khadoos bank

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