Is Cashless BHIM Going Userless ?

Why government needs to focus more on BHIM?

It has been a year or so when India’s most aggressive and hyperactive anti-corruption act   – “DEMONETIZATION”. If someone plans to market this campaign then long ques in front of  ATM can be adjudged as its best describing logo.

Interestingly, India’s true  patriotic sense figured out that this Fintech startup tuned helper is backed by a Chinese behemoth Alibaba. Understanding this concern and avoiding any further uproar and backlash, government of India launched it very own payment platform BHIM ( Bharat Interface For Money). A simple and good initiative whereby allowing the customer to directly link their AADHAR linked bank account with the platform, thereby making the transaction seamless and accessible to all. But unfortunately, although being an easy alternative to private wallet players like Paytm, the platform is yet to takeoff it full flight. As per the latest data As of March 1, 2020, BHIM had recorded 47.65 million downloads on Android and 11.19 million on Apple iOS. This is way below the numbers achieved by Paytm which has been downloaded by almost 100 million+ users.

So why did BHIM failed to capture the traction it intended to achieve?

The answer lies in the marketing spend our Government has done in promoting the platform. Not much has been done to promote the application. Not just that even Private sector banks like Punjab National Bank and State Bank Of India launched their very own payment instruments rather than educating users to use BHIM app.

Secondly, Paytm succeeded because it brought in a simple transaction process, the QR code. GOI, with its initial intention to promote common QR codes for all the banks failed to chip them in among small merchants or shopkeepers.

Third, although being smooth, the application has reported a substantial failed transactions which have irritated the Indian Audience which is hyper volatile in terms of the money lost in transaction.

So where is the solution?

Addressing issues like transaction failure and working on a low latency model ( server side) would make the entire transaction process smooth which would lead to an increase in the increase in the usage of the app. Secondly, GOI should take some serious initiative to encourage the rural audience to use the same for peer to peer transactions. India story is a hard core rural story with more than 66.86% population living in villages. No govt scheme can survive unless it gains a massive traction for this audience. Government can disburse subsidies, offer cash back using the platform thereby making it attractive of the rural population.

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AXA to increase its stake in the Insurance business.

Bharti Enterprises and AXA life has confirmed that It would increase its stake from 26% to 49% in its life and general insurance business. The company has presently two joint ventures with Bharti , Bharti AXA Life Insurance and Bharti AXA General Insurance.  The increase in stake would further enhance Bharti’s market dominance in the Insurance business and would help them augment their portfolio in this field.

In a statement issued by Rahul Bhatnagar, Managing Director & CFO, Bharti Enterprises, he said “This is a significant milestone in the journey of the Bharti-AXA joint ventures, and underlines the partnership’s long-term commitment to the Indian market”.

According to Jean-Louis Laurent Josi, CEO of AXA Asia, “Our long-standing partnership with Bharti, a leading Indian conglomerate, positions us ideally to succeed in this highly promising market”.

The company has recorded a premium of 4.7 billion in fiscal year 2014-15 and has been growing aggressively with 28% growth rate.

HSBC to end the private banking business in India.

British Banking giant HSBC has said that it will end its private banking business in India. The move is said to be because of ongoing investigation by Income Tax department against individuals who have undeclared accounts in Swiss Bank . The company plans to complete this move by first quarter of 2016 and move some its customers to premier banking . According to a HSBC spokesperson ” We will work closely with our clients to minimize the impact of this decision on them, offering them the choice to move to HSBC Premier, our global banking and wealth management proposition, wherever appropriate. n view of the tax evasion inquiry, HSBC’s private banking compliance was enhanced, as a result of which it became impossible for them to do business with these very demanding high net worth clients

The move can be attributed to the names of the account holder the Income Tax department revealed who have undisclosed amount and swiss bank accounts. Names of almost 1200 account holders were revealed by a investigative journalist in February this year.

The closure of the bank would not lead to any job losses as according to senior executive of the bank ” There are about 70 people in the business here. Some of them will move out and likely take their clients with them. We are already exploring what opportunities it holds for us.

HSBC is said to be one of the top private banker of the country as it managed funds of worth more than $2 billion . It had about 1000 clients and was among the top banker in the country. It will be interesting to see how this move effects the global business of the bank.

Year End The Income Tax Checklist

Every year , this is the time when you start thinking about various saving vehicles that you should use in order to save on your income tax .This article is dedicated to these users who actually care for personal finance and want to ensure that their hard earned cash is easily conserved .

Bunch Expenses

Some deductions are only allowed once your expenses exceed a certain percentage of your income .Like the medical expense is 7.5% and micellaneous expeses are 2% . For example your salary is Rs 10000 and you have 2000 as your medical expense , the entire Rs 2000 will not be eligible for deduction from your taxable income .You only get to deduct from 7.5% of 10000 i,e  7500 . So you can deduct only 7500-2000= 2500 from your taxable income .So the best way to save on this to collate your
entire medical bill by December of every year and they deduct the same from your total taxable income .

So if you are close to reaching your threshold of Rs 2500 and is not in dire need of this expense the wiser option is to
defer the investment till next fiscal year so that you dont have to pay extra for this expense .Also it is beeter to go for
services that are under tax rebate rather than opting a taxable option .

Next year TAX buckets

Its better to calculate the TAX bucket for the next fiscal year so that your expenses are well planned for the coming year .For example if you feel that your total taxable income will increase by 15% in the next year do plan your deductions keeping in mind the tax slabs for the current year for that particular salary bracket . Similary if the salary is expected to take the downward spiral it is beeter to increase the expenses under “tax benefits” this year so as to evade any TAX  calamity in the near future .

The Bottom line

The year end tax planning is a tedious task . Its better to take the help of TAX professional to create an ongoing plan for your investments and spendings .Also it is better to increase or decrease your expenses in accordance to tax slabs rather than moving towards a fix expense strategy .

Single Stock Sucide .

So are you a good stock picker ? Do you think the buy and hold strategy works ?Yes it might work well and do wonders in bull market scenarios but there is a serious chance of losing all that in a fragile market environment like the one we are facing these days .

What the future hold for us ?

The bad news is that the next few years will be bad for those who worked on the buy and hold strategy . With the natural forces coming into play deflation will be the major reason for a downward spiral in the future market scenario .So the best way to deal with this deflation is to meet it head on . Work on a strategy where the downward spiral works for you and you grow orgnically .With the decrease in commodity prices in global market there are very bad signs of deflation and very chances to grow organically .

Short Risks

So the short invidual stocks are the solution ?While these present a good oppurtunity by there is stil a significant risk.And if you are shorting a wrong industry it will result to a catastrophy .And if by any chance the small company you are shorting gets acquired or bundle up ,you might devalue yourself 25% .

So What should one do ?

Well the answer is simple ,Go for a two point strategy .

First hold the most potential . i,e research the S&P and determine the stocks that have low or high quality and will help  you make a balanced protfolio . But keep in mind the health of the industry before chosing this route . So even if you choose the weakest company in the strongest Indutry it will outperform a very strong company in a weak industry .

The other option is to invest in the exchange traded funds or ETFs.But keep in mind that if not experienced please invest in any kind of leverages or inverses ETFs.They come with a expense ratio , i,e they are rebalanced daily and extremely volatile . So for an example a certain leveraged ETF is good at Rs200 it will be good at Rs150 or 140 . If your research is good then this will be the right time to buy the shares rather than panicking and selling them.However most retail investors panic at this stage and strart selling these shares at a throw away prices to minimize the risk .

The Bottom Line

Just go ahead and buy the shares when the market is not in your favour . Fill your basket with as many eggs as possible and stick with the areas of market with will give you the most resiliency /

What are Hedge Funds ?

A hedge fund is a fund that can take both long and short term leverages and buy and sell undervalued securities , trade options and bonds and invest in almost in any oppurtunity where it sees an impressive gain .The primary aim for a hedge fund is to reduce voltality and risk while attempting to preseve capital and deliver positinve results to its investors .

Hedge funds are alternate investment which may use different number of strategies to earn active returns for their investors.They may use the derevative leverage in both the domestic and international markets with the goal of generating high incomes .Since they have a low correlation with traditional protfolios consisting of equites and bond they are a good medium of diversification for an investor .

Equity , a short cut to wealthy !

Accordingly to Nilesh Shah , MD Kotak bank , equity is actually the real short cut to become wealthy . You can leverage this advantage either through equity investment or equity trading . According to him , an actual investor should go for an equity investment instead of trading in order to actually compound ones wealth over a period of time .A good promoter and a reosonable price should be a bench mark for any investor who want to use the equity medium to get rich .

The second tip is to not to follow any tip for stocks if you have not researched properly . Its better to go for a Mutual fund with a good fund manager who can manage your hard earned cash well and pay you good dividends in the end .