Planning to study abroad? Know how forex centers can ease the financial strain

Spending a semester in London, Milan or Paris can be the most thrilling experience in one’s life. Studying abroad, however, comes at a hefty cost and often delays graduating on time if not planned carefully. Foreign education is extremely expensive yet, India has been witnessing a steep rise in number of parents making this decision for their children.

Apart from the tuition fees, there are many other expenses that students abroad incur such as housing, meals, insurance and transportation to name a few. Perhaps the one place where parents end up losing the most is while exchanging currency, which is required for every transaction.

Most people are unaware of the various forex products and services that exist to reduce currency exchange charges. Awareness on using the right forex products and the right service providers can alleviate a number of charges entirely.

First-time travelers cannot hope to land a good deal only through their own efforts, and the help of an expert is essential to understand the intricacies of foreign exchange. The following points are certain areas in which a foreign exchange centered organizations can help you out to attain the best deal:

study abroad, study abroad finance, study abroad scholarship, US universities, US university fee, education news, indian express, foreign exchange, student loan1. Total fee amount

Many foreign institutions charge a fee for specific services under different courses that is over and above the tuition/semester fees. These various sub-heads might be essential to fulfill the course’s goal, yet add extensively to the overall expenses. In such a scenario, it is essential to take a look at the complete stock beforehand and check the total amount that needs to be paid. Avail opportunities for scholarships if possible.

2. Policy restrictions

According to the RBI’s Liberalized Remittance Scheme, only a sum of $ 2,50,000 is allowed to be remitted for any purpose during a financial year and the same applies for education purposes. The documentation, identity proof, procedure in case of different methods, such as transferring through a foreign exchange facilitator organization, can only be explained well by an expert. The policies also keep changing, stressing the need for expert assistance even more.

3. Acquiring the best deal

Even the slightest change of 10 paisa in conversion rate can bring about a rapid upheaval when it comes to bulk transfer. Thus, it is necessary to avail foreign exchange services only from banks or platforms which channelize the remittances through banks itself, which also enable the possibility to hold the rate-of-exchange up to 3 working days. Such platforms enable you to save more than 6.5 per cent on standard bank transactions, which again adds up to a neat sum.

4. The right procedure

The most popular overseas transfer process, known as SWIFT (Society for Worldwide Interbank Financial Telecommunication) involves dual charges levied at intermediary as well as the beneficiary bank. Forex cards, which are marked Visa/Mastercard, can be used for transfer as these cards are accepted as international credit or debit cards.

By keeping the aforementioned tips in mind, one can largely reduce the anxiety specifically corresponding to finances, thus ensuring that the journey is a happy and a hopeful one.

RBI’s dividend to Government falls by almost half to Rs 30,659 crore

The Reserve Bank of India (RBI) on Thursday announced that it will transfer Rs 30,659 crore as surplus to the government for the year ended June 2017, less than half the amount transferred last year.

While the move could upset the Finance Ministry’s Budget arithmetic, a lower surplus also dents the broad premise that scrapping of currency notes that failed to return to the banking system post demonetisation would extinguish the RBI’s liabilities to an equivalent measure and, thus, open the possibility of transfer of these gains to the Centre in the form of higher dividends.

Technically, the transfer of profits is provided in Section 47 of the RBI Act, which states that after making provisions for bad and doubtful debts, depreciation in assets, contribution to staff and superannuation fund and for all matters for which provisions are to be made by or under the Act or that are usually provided by bankers, the balance of the profits of the bank is required to be paid to the Central government.

The RBI’s profits essentially represents the difference of income over expenditure. The key source of income for the Central bank is interest arising from its foreign assets and domestic assets.

For the year 2015-16, the RBI board had approved the transfer of surplus amounting to Rs 65,876 crore to the government. In the previous year, the Central bank had paid Rs 65,896 crore to the government, which came as a boon to the government in covering the deficit. The surplus transferred to the government was Rs 52,679 crore in 2013-14. The RBI did not give reasons of the sharp fall in the surplus income for the year ended June 2017.

The government had, in December last year, issued an ordinance for scrapped currency notes, paving the way for potential surplus transfer from the RBI on account of demonetisation.

As per the Specified Bank Notes (Cessation of Liabilities) Act, 2017, the scrapped currency notes of Rs 500 and Rs 1,000 (as announced on November 8 last year) “shall cease to be liabilities of the RBI under section 34 of the Reserve Bank of India Act, 1934 and shall cease to have the guarantee of the Central Government under sub-section (1) of section 26 of the said Act”.

A month earlier, in November, the then Attorney General for India Mukul Rohatgi, while replying in the Supreme Court on the demonetisation issue, had said that out of the total estimated money in circulation of Rs 15-16 lakh crore, the government expected people to deposit Rs 10-11 lakh crore in banks. “The rest, Rs 4-5 lakh crore, were being used in northeast and Jammu and Kashmir to fuel trouble in India. That will be neutralised,” he had said.

RBI, reserve bank of India, Demonetisation, note ban, RBI notes, currencies, budget, Finance ministry, RBi board, Mukul Rohatgi,Incidentally, the YH Malegam committee had suggested in 2014 that the Central bank can transfer its entire surplus to the government, without allocating anything to its various reserve funds, for three years because it had adequate reserve funds.

The lower amount will be a concern since the government’s non-tax receipts will be affected. “In the Budget it was assumed that around Rs 75,000 crore would come from the RBI, public sector banks and financial institutions compared with a little over Rs 76,000 cr in FY17,” rating firm Care Ratings said.

“As public sector banks are unlikely to do better than last year and the RBI will be transferring a smaller amount, this will impact the fiscal deficit numbers. If other conditions remain unchanged, the fiscal deficit can increase from 3.2 per cent to 3.4 per cent this year,” it said.

The RBI’s main source of income is interest earned on bond holdings through open market operations or purchase and sale of government securities. Following the recommendations of the Malegam committee, the RBI stopped transfers to internal reserves since its accounting year 2013-14 which is now a part of expenditure.

SBI cuts saving account rate by 0.5% on balance upto Rs 1 cr

Country’s largest lender State Bank of India has slashed interest on savings account deposits by 50 basis points to 3.5 per cent on balance up to Rs 1 crore, ahead of RBI’s policy review this week.

However, the bank will continue to offer 4 per cent interest on savings account balance of Rs 1 crore and above.

“The bank is introducing two-tier saving bank interest rate with effect from July 31. While balance above Rs 1 crore will continue to earn interest at 4 per cent per annum, interest at 3.5 per cent will be offered on balance of Rs 1 crore and below,” SBI said in a regulatory filing.

demonetisation, rs 200 notes, note ban, SBI, reserve bank of india, indian express news, buisness news, economyIt further said: “the decline in rate of inflation and high real interest rates are primary considerations warranting a revision in rates of interest on savings bank deposits.”

SBI said revision of saving bank rate will enable the bank to maintain marginal cost of fund based lending rate (MCLR) at existing rates.

RBI asks banks to enable account number portability

RBI Deputy Governor S S Mundra has asked banks to work towards account number portability as it will be a far-reaching step towards enhancing competition and improving customer service. Speaking at the annual conference of banking ombudsmen in Mumbai recently, he said banks should look forward to providing more choices to the new generation of customers who are more technology savvy.

“A scenario was thus emerging wherein customers would be able to silently walk out from one institution to another, in case of any dissatisfaction with the services,” RBI said in a release on Monday, quoting Mundra. Mundra said this will be further accentuated with the possibility of portability of accounts and urged the banks to work towards account number portability.

RBI, account number portability, ss mundra, s s mumdra, cheque drop box, online banking, mobile banking, indian express news, india news, bankingMundra also referred to issue of the rising trend of loss of cheques from drop boxes and the lack of alacrity shown by banks in redressing such complaints.

In such cases, the Deputy Governor suggested that the customer “must be compensated immediately”. He asked the banks to look at the the possibility of setting up a common account and compensate the customers immediately from the pool, without waiting for recovery of the amount from insurance.

Referring to the tenets of the Charter of ‘Customer Rights’, Mundra asked the lenders and the Indian Banks’ Association (IBA) to work towards evolving a common platform to provide a comparative and transparent view of various products and services.

RBI slaps Rs 3-crore penalty on Union Bank

The Reserve Bank of India has imposed Rs 3 crore penalty on Union Bank of India for “non-compliance” with the directions on know your customer (KYC) norms in two separate cases. While the RBI has imposed a penalty of Rs 2 crore in one case, it slapped a Rs 1 crore penalty in the second case. “Based on reports related to a fraud in a bank, it conducted an examination of certain accounts in Union Bank of Union Bank, which had substantial transactions. Upon examination of the documents obtained in this regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with directions issued by RBI,” the RBI stated.

RBI, Bank notes, Rs 20 notes, Rs 20 new notes, Rs 20 notes issue, mahatma Gandhi, Urjit Patel,The second case related to a complaint regarding “huge cash withdrawals in certain accounts”. Both the penalties were imposed on July 26. As per RBI, the penalties were imposed due to deficiencies in regulatory compliance and “not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers”. “After considering the bank’s reply, oral submissions made in the personal hearing, as also the additional information and documents furnished, the RBI came to the conclusion that the charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty,” the RBI said.

Banks restructured corporate loans worth Rs 2.04 lakh crore in FY17: Arun Jailtey

The amount of corporate loans restructured by lenders has seen a decline in the last three financial years, according to the data tabled by Finance Minister Arun Jaitley in the Rajya Sabha on Tuesday. Banks restructured loans, that were sanctioned to companies, of worth Rs 3,70,279 crore in FY2014-15 and Rs 2,99,111 crore in 2015-16.

The amount of restructured corporate loans came down to Rs 2,04,884 crore in the last financial year, as per the data. The finance minister was responding to a question seeking names of companies whose loans have been restructured and at what terms.

“Any restructuring is to be carried out in accordance with detailed guidelines issued by RBI on restructuring like Joint Lenders’ Forum (JLF), Strategic Debt Restructuring (SDR) and Scheme for Sustainable Structuring of Stressed Assets (S4A),” Jaitley said.

Arun Jaitley, corporate bank loans in India, Corporate banks loans restructure, Corporate bank loans in India, 2 lakh crore corporate bank loans, India news, national newsThe finance minister further said that “the names and details of borrowers are covered under section 45E of RBI Act, 1934 and banking laws.

“… which (the Act and banking laws) oblige financial institutions to maintain secrecy about the affairs of their constituents.”

On provision for restructuring of farm loans in case of natural calamities, he said banks can facilitate restructuring, including conversion of short-term debt to term loan or re-schedulement or repayment time-frame to such borrowers with benefit of retention of asset classification.

“For agricultural accounts that became impaired on account of reasons other than natural calamities, restructuring is allowed in terms of RBI guidelines on Income Recognition and Asset Classification (IRAC),” Jaitley said.

RBI cuts repo rate by 25 bps to 6 per cent pointing to sharp fall in inflation

The Reserve Bank of India’s monetary policy committee cut the repo rate by 25 basis points to 6 per cent on Wednesday pointing to the sharp fall in inflation in recent times. However, it is not sure whether this fall in inflation is durable and retained a neutral stance for monetary policy.

The panel said that some risks to inflation it had anticiapted such as from GST haven’t materialised.

“Consequently, some space has opened up for monetary policy accommodation, given the dynamics of the output gap. Accordingly, the MPC decided to reduce the policy repo rate by 25 basis points. Noting, however, that the trajectory of inflation in the baseline projection is expected to rise from current lows, the MPC decided to keep the policy stance neutral and to watch incoming data. The MPC remains focused on its commitment to keeping headline inflation close to 4 per cent on a durable basis,” the monetary policy statement said.

RBI, RBI repo rate, RBI policy rate, RBI policy, RBI interest rate, RBI policy review, urjit patel,The consumer price index inflation fell to 1.54% in June, the lowest reading since the series started in 2012. This has prompted economists, bankers and governments to call for a rate cut by RBI.

However, the MPC observed that “while inflation has fallen to a historic low, a conclusive segregation of transitory and structural factors driving the disinflation is still elusive. In respect of inflation-sensitive vegetables, prices are recording spikes. Excess supply conditions continue to push down prices of pulses and keep those of cereals in check.”

Therefore, “the MPC will continue monitoring movements in inflation to ascertain if recent soft readings are transient or if a more durable disinflation is underway,” the statement added.

RBI aims to keep retail inflation near 4 per cent on ‘durable basis’

The Reserve Bank on Wednesday said it will endeavour to keep retail inflation close to 4 per cent on a “durable basis” which may rise in the near term on account of pay commission payouts and price adjustments post GST rollout. “The MPC observed that while inflation has fallen to a historic low, a conclusive segregation of transitory and structural factors driving the disinflation is still elusive.

“The MPC remains focused on its commitment to keeping headline inflation close to 4 per cent on a durable basis,” the central bank said in its 3rd bi-monthly monetary policy statement, 2017-18. The RBI’s Monetary Policy Committee (MPC) today decided to reduce the repo rate — at which it lends to banks — by 0.25 per cent to 6 per cent.

Going forward, as base effects fade, the inflation momentum is to be hinged upon the impact of house rent allowance (HRA) under the Central Pay Commission (7th CPC), price revisions withheld ahead of the Goods and Services (GST) rollout as well as disentangling of structural and transitory factors shaping food inflation, the apex bank said.

Urjit Patel, RBI, retail inflation, GST, GST bill, Monetary Policy Committee, RBI inflation, repor rate, indian express news, india newsThe regulator has set a medium-term target for consumer price index (CPI) based retail inflation at 4 per cent with a +/- bias of 2 per cent. RBI Governor Urjit Patel said inflation trajectory now incorporates the first round impact of the implementation of the HRA awards of the 7th CPC by the central government.

“Excluding the HRA impact which will affect the CPI cumulatively, inflation would be a little over 4 per cent by fourth quarter as against 4.5 per cent inclusive of the HRA in the June statement (of RBI policy),” Patel said. India’s CPI-based retail inflation stood at 1.54 per cent in June this year to hit its lowest reading in the series based to 2011-12.

The MPC also noted that inflation is well below target in most of advanced and emerging market economies despite a modest rise in global demand as well as uptick in crude oil. Citing its survey on inflation, the RBI said households seem to have discounted the recent low inflation prints; their three months and one year ahead inflationary expectations polled in the RBI survey in June have “somewhat hardened”.

RBI cuts repo rate by 25 basis points: Full text of the Monetary Policy Committee

The Reserve Bank of India’s Monetary Policy Committee cut (MPC) on Wednesday decided to cut the repo rate by 25 basis points to 6 per cent owing to the sharp fall in inflation in the last two quarters. However, it has state that is is not sure whether this fall in inflation is durable and retained a neutral stance for monetary policy.

The panel further stated post implementation of GST risks of increase in inflation have not materialised.

“Consequently, some space has opened up for monetary policy accommodation, given the dynamics of the output gap. Accordingly, the MPC decided to reduce the policy repo rate by 25 basis points. Noting, however, that the trajectory of inflation in the baseline projection is expected to rise from current lows, the MPC decided to keep the policy stance neutral and to watch incoming data. The MPC remains focused on its commitment to keeping headline inflation close to 4 per cent on a durable basis,” the monetary policy statement said.

In the press release issued by the RBI the panel said “MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.”

The press release also states its reasons for revising the rate based on its assessment, given in pointers below:

Excerpts from the press release:

1. The modest firming up of global demand and stable commodity prices have supported global trade volumes, reflected in rising exports and imports in key economies. In the second half of July, crude prices have risen modestly out of bearish territory on account of inventory drawdown in the US, but the supply overhang persists. Chinese demand has fuelled a recent rally in metal prices, particularly copper. Bullion prices fell to multi-month lows on improved risk appetite but remain vulnerable to shifts in the geopolitical environment. Notwithstanding these developments, inflation is well below target in most AEs and is subdued across most EMEs.

2. On the domestic front, a normal and well-distributed south-west monsoon for the second consecutive year has brightened the prospects of agricultural and allied activities and rural demand. By August 1, rainfall was 1 per cent above the long period average (LPA) and 84 per cent of the country’s geographical area received excess to normal precipitation. Kharif sowing has progressed at a pace higher than last year’s, with full-season sowing nearly complete for sugarcane, jute and soyabean. The initial uncertainty surrounding sowing of pulses barring tur and rice in some regions has also largely dissipated. Sowing of cotton and coarse cereals has exceeded last year’s levels but for oilseeds, it is lagging. Overall, these developments should help achieve the crop production targets for 2017-18 set by the Ministry of Agriculture at a higher level than the peak attained in the previous year. Meanwhile, procurement operations in respect of rice and wheat during the rabi marketing season have been stepped up to record levels – 36.1 million tonnes in April-June 2017 – and stocks have risen to 1.5 times the buffer norm for the quarter ending September.

RBI, RBI repo rate, RBI policy rate, RBI policy, RBI interest rate, RBI policy review, urjit patel, business news, market news, india news3. Industrial performance has weakened in April-May 2017. This mainly reflected a broad-based loss of speed in manufacturing. Excess inventories of coal and near stagnant output of crude oil and refinery products combined to slow down mining activity. For electricity generation, deficiency of demand seems to remain a binding constraint. In terms of uses, the output of consumer non-durables accelerated and underlined the resilience of rural demand. It was overwhelmed, however, by contraction in consumer durables – indicative of still sluggish urban demand – and in capital goods, which points to continuing retrenchment of capital formation in the economy. The weakness in the capex cycle was also evident in the number of new investment announcements falling to a 12-year low in Q1, the lack of traction in the implementation of stalled projects, deceleration in the output of infrastructure goods, and the ongoing deleveraging in the corporate sector. The output of core industries was also dragged down by contraction in electricity, coal and fertiliser production in June, owing to excess inventory and tepid demand.

4. Excluding food and fuel, CPI inflation moderated for the third month in succession in June, falling to 4 per cent as price momentum moderated inter alia in respect of education due to delay in fee revision cycles, and also in respect of health, clothing and footwear. Inflation in transport and communication services was depressed by the pricing war in the telecommunication space. Input costs relating to both industry and farms remain benign tracking international prices. Pricing power polled in the Reserve Bank’s industrial outlook survey and in manufacturing and services PMIs is still subdued.

Unhappy with MCLR, RBI may link rates to market determined benchmarks

Stating that it’s not satisfied with the Marginal Cost of Funds Based Lending Rate (MCLR) system, the Reserve Bank of India on Wednesday said it’s reviewing the MCLR system and exploring linking of the bank lending rates directly to market determined benchmarks to ensure a better transmission of interest rates. RBI Governor Urjit Patel who unveiled the bi-monthly monetary policy statement on Wednesday said there was more scope for banks to lower lending rates in certain segments.

“The experience with the MCLR system introduced in April 2016 for improving the monetary transmission has not been entirely satisfactory, even though it has been an advance over the Base Rate system,” Patel said. An internal Study Group has been constituted by the RBI to study the various aspects of the MCLR system from the perspective of improving the monetary transmission and exploring linking of the bank lending rates directly to market determined benchmarks, it said. The group will submit the report by September 24, 2017.

RBI Deputy Governor Viral Acharya, however, said the incremental benefit from the marginal cost of funds based lending rates (MCLR), introduced in April 2016 as an alternative to the earlier system of base rate, was positive. Even after the introduction of the MCLR and several rate cuts, the RBI has been repeatedly complaining about banks not doing enough to pass on the full benefit of its rate actions to the borrowers and help revive the sagging private investment for economic growth.

Patel said banks have been selective in their rate cuts in aggressive segments like home and auto loans, but there are many other segments, especially those, where borrowers are still tied to the base rate, where they can do more. “Given the liquidity conditions prevailing and that we have reduced policy rates by substantial amount since start of easing cycle, I think there is scope for banks to reduce lending rate for those segments. So far, they have not benefited to the full extent of our policy rate cuts.”

RBI, MCLR, Reserve Bank of India, RBI lending rates, Urjit Patel, repo rate, business news, rbi news, indian expressThe RBI said a quick scrutiny of the Base Rate of some banks post the introduction of MCLR suggests that it has moved significantly less than MCLR. “While the extent of change in Base Rate may not necessarily mirror the revision in MCLR, the rigidity of Base Rate is a matter of concern for an efficient transmission of monetary policy to the real economy. Given a large part of the floating rate loan portfolio of banks is still anchored on the Base Rate, the RBI will be exploring various options in the near future to make the Base Rate more responsive to changes in cost of funds of banks,” the RBI said.

Acharya said the ongoing resolutions on the NPA front will also help in better transmission as the banks’ balance sheet stress is resolved. He also announced that the Reserve Bank will be coming out with final guidelines on tripartite repo to deepen the corporate bond market, which, by working as an alternative to the bank lending, will also force banks to tinker with the rates quickly. The RBI announced that it is forming a high level task-force to help develop a “comprehensive near real-time public credit registry,” which will evaluate the existing public and private infrastructure for credit information, assess any data gaps, study the best international practices and provide a roadmap. “The objective is to improve not just the credit assessment by financial lenders, but also of the financial lenders themselves,” Acharya said.

“A public credit registry can potentially help banks in credit assessment and pricing of credit as well as in making risk-based, dynamic and countercyclical provisioning,” the RBI said. “The PCR can also help the RBI in understanding if transmission of monetary policy is working, and if not, where are the bottlenecks. Further, it can help supervisors, regulators and banks in early intervention and effective restructuring of stressed bank credits,” it said.