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Impact of RBI Rate Hike On Rupee - So How Can An RBI Rate Hike Help Stem The Rupee Slide - The Economic Times PDF
Impact of RBI Rate Hike On Rupee - So How Can An RBI Rate Hike Help Stem The Rupee Slide - The Economic Times PDF
Impact of RBI Rate Hike On Rupee - So How Can An RBI Rate Hike Help Stem The Rupee Slide - The Economic Times PDF
BI rate hike help stem the rupee slide? - The Economic Times
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In the simplest of terms, money is a store of value used to purchase goods and services
and which can be saved and used later.
Money can have various forms – commodity money, fiat money or commercial bank
money.
Commodity money is the one that has its own value and is employed as a medium of
exchange. Gold, cocoa or cattle fall in this category. Central banks around the world still do
some form of currency exchange in gold.
Fiat money is the one that does not have anny intrinsic value but governments declare it
as legal tender. Fiat money can be used to discharge any public or private debt. Modern- Related Most Read Most Shared
day monetary systems are based on fiat money.
Is Rupee set to swing wild?
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Cheques, demand drafts and banker’s drafts are called commercial bank money. Top Tax Saver ELSS SIP starting Rs 500
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market
Home forces of demand
Markets and supply.
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The central bank can also influence the value of rupee by the way of monetary policy. RBI KKR’s USD200 million
can tweak the repo rate (the rate at which RBI lends to banks) and the liquidity ratio (the acquisition of
EuroKids
portion of money banks are required to invest in government bonds) to control rupee.
In five years, the firm has to increase net
income significantly to get pas...
The aim of the Reserve Bank is to ensure that a weak rupee doesn’t increase the already
bloated import bill. GOVERNMENT SCHEMES
Affordable housing: a
reality check
How RBI’s rate hike/cut influences rupee?
The repo rate is an instrument used by the Reserve Bank of India to control inflation. It is
The needle won’t move further unless
the rate at which the central bank (Reserve Bank of India) lends money to commercial support infrastructure and road connec...
banks in the event of any shortfall of funds.
Higher interest rates in an economy tend to draw foreign investment, increasing the
demand for and value of the home currency. Similarly, lower interest rates tend to
decrease exchange rates.
RBI can raise the repo rate, which leads to a rise in interest rates, bond yields and return
on debt papers, drawing more investor money to chase better returns if the same is low in
other markets. On the other hand, higher interest rates stem money circulation in the
economy, leaving more money in the hands of RBI to manage the currency demand-
supply situation.
Also, the currency value drops, it tends to drive up inflation, as imported goods become
costlier. By raising interest rates, the central bank can lower demand for such goods,
leading to pressure on prices.
Hike in repo rate: A hike in repo rate acts as a disincentive for banks to borrow from the
central bank and is employed by RBI to control money circulation and thus rein in inflation.
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A higher repo rate can reduce money supply in the economy and thus help arrest price
rise. Budget Sensex Stock Market
Stock Recommendations IPO Upcoming IPO
Gold Rate Top Gainers Rupee vs Dollar
Cut in repo rate: When RBI cuts repo rate, banks need to pay less interest on their
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borrowings from RBI. Thus, banks also charge less on their loans and it thereby raises
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money circulation, which leads to price rise and increase economic activity.
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13/09/2019 Impact of RBI rate hike on Rupee: So how can an RBI rate hike help stem the rupee slide? - The Economic Times
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Is Rupee set to swing wild?
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Delivery executives of e-commerce companies don’t need to call you to identify your
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location anymore.
By Sujit John, TNN | Updated: Sep 10, 2019, 02.16 PM IST
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Agencies
(This story originally appeared in on
Sep 10, 2019)
It’s amazing how e-commerce and logistics
companies have mapped India. Delivery
executives might still call you to know if you
Related Most Read Most Shared
are at home, but increasingly, they don’t
need to call you to identify your location. Walmart plans to tap Flipkart's tech expertise
They know exactly where you are. And that’s
helping to significantly speed up deliveries,
and increase efficiencies in logistics.
The system is so good now that if someone tries to
game Flipkart’s rules, it’s able to stop it.
It’s a dramatic change for a country where
addresses are so vague — near this temple,
off that main road. This story is about how Flipkart solved the great Indian address
conundrum, to deliver its more than 1-million shipments across all of the country’s 22,000
pincodes every day.
Mayur Datar, principal data scientist at Flipkart, says it took India more than 50 years to
map just 2,575 kilometres of its landmass, a meagre 0.7% of the country’s total 3.2 million
sqkm area. “However, technological developments have helped map the entire country
within a decade from the early 2000s,” he says.
Natural language processing and AI/ML algorithms are used to understand the address
texts that users provide. Ravindra Babu, who was part of Flipkart’s data science team for
five years and who recently moved to Flipkart Group company Myntra to head its data
science team, says customers often provide elaborate addresses, running up to 200
words, in order to pinpoint their location. Often, different family members write their
addresses differently, some may mention nearest landmarks.
But this process by itself does not provide the needed accuracy for many addresses. So
Flipkart used delivery executives to mark out sub-regions with a name — such as Ram
temple or banyan tree — and to label addresses around it for a better understanding of the
region. The machine learning algorithm then assigns addresses to these sub-regions. And
when an unseen address comes from a sub-region, the system is able to classify it.
The system is so good now that if someone tries to game Flipkart’s rules, it’s able to stop
it. For instance, in certain high-value products, you may not be allowed to buy more than
one item. But users try to overcome that by using different IDs and providing variations of
the same address. “The system recogises that the addresses are same,” Babu says.
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13/09/2019 Impact of RBI rate hike on Rupee: So how can an RBI rate hike help stem the rupee slide? - The Economic Times
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MSME- The Digital Way
Doing business? Here's How you
can improve your CIBIL MSME Rank
These, among other findings, were part of the report, “Turbocharging Delhi-NCR Startup No Angel Tax on registered startups
Ecosystem” released by TiE Delhi-NCR in the capital on Tuesday. Bad times in tech? Not if you’re a startup serving
other startups
The report also highlighted other interesting nuggets such as Delhi NCR leading the pack This startup is changing the face of surveys
in number of Unicorns, with Bangalore being a close second in the ranks. Delhi NCR
ET Startup Awards 2019: Nominees for 'Startup of
added at least 1 unicorn each year since 2013, with 70% of the unicorns being B2C
the Year' category
companies as per the findings.
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13/09/2019 Impact of RBI rate hike on Rupee: So how can an RBI rate hike help stem the rupee slide? - The Economic Times
CBDT procedure to safeguard startups: Experts
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Moreover, it highlighted how three of the most valuable listed internet companies are in Leniency allowed in tax scrutiny for startups
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Delhi NCR such as Info Edge with a market capitalisation of $3670 mn, MakeMyTrip
($2420 mn) and IndiaMart ($490 mn). Justdial with a market cap of $640 mn was the only
exception in the list which wasn't from the same region. Reach out to Top Generator Dealers near you
and get free quotes
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Expressing surprise at the revelations, Amitabh Kant, CEO, Niti Aayog, while delivering his
keynote address said that it wasn’t known that this region had such a huge opportunity to
offer. “I always thought that Bangalore and Hyderabad were more vibrant. This report
really shows that while there is a lot of entrepreneurship, the marketing of NCR in this
aspect isn’t adequate. The art of marketing and branding needs to be positioned far
better,” he asserted.
Kant also added that there should be more T-Hub communities in the capital. “We should
push the envelope for more T-Hubs in Delhi NCR which can serve as catalysts of change,”
he said.
Despite the encouraging numbers, a call for action was suggested in several core areas
for the eventual growth of the startup ecosystem. An increase of seed and early stage
funding, more active angel investors in Delhi NCR, outcome driven programmes to boost
tech talent and creating more affordable co-working spaces was felt to be the need of the
hour.
“With concerted focus on the most important areas, NCR has the potential to become the
top global hub for startups, leading innovation, creating more startups and at least 30
unicorns in NCR by 2025,” Rajan Anandan, President, TiE Delhi-NCR said on a bullish
note.
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No Angel Tax on registered startups
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NEW DELHI: Only 19% of employers in the
country have bullish hiring plans for the next
three months, while 52 per cent expect no
change in their payrolls, says a global survey
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which predict softer employment outlook in
many markets for the October-December IIIT Delhi students get Rs 16 lakh average salary
quarter. this year in placements
Despite the modest number, India is the fourth most optimistic nation about hiring plans for
the next three months globally.
The strongest hiring sentiment was reported in Japan where 26 per cent of employers
were bullish about their hiring plans for the October-December quarter, followed by Taiwan
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(21 per cent) and US (20 per cent) in the second and third positions, respectively.
Markets NPS Share Bazar IPO
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"Hiring plans for the next three months vary significantly globally with robust outlooks
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reported in many large markets while the uncertainty of Brexit and the impact of tariffs
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contribute to evidence of softer hiring intentions elsewhere," said Jonas Prising,
Income Tax Calculator
ManpowerGroup Chairman and CEO.
When compared with the previous quarter, employers in 15 out of 44 countries and
territories report stronger hiring prospects, while employers in 23 countries report weaker
hiring plans which also includes six who anticipate "no change".
The weakest hiring activity was reported in Spain (0 per cent), the Czech Republic (2 per
cent), Argentina (3 per cent), Costa Rica (3 per cent), and Switzerland (3 per cent).
Chinese employers reported a cautious hiring climate in the coming quarter, as a net four
per cent employers anticipate a rise in their staff numbers -- their weakest outlook in two
years
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13/09/2019 Impact of RBI rate hike on Rupee: So how can an RBI rate hike help stem the rupee slide? - The Economic Times
years.
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"Having
Forex Newsa workforce strategy
Currency Converter that attracts and retains critical talent and develops new skills
will be a key priority across all organisations as industries continue to transform in the
months and years ahead," Prising said.
The survey further noted that in India, a sectoral analysis shows, public administration and
education employers reported the strongest hiring intentions with a net employment
outlook of 27 per cent. While, respectable payroll gains were also forecast in wholesale
and retail trade sector (25 per cent) and services sector (22 per cent).
Positive hiring opportunities are expected in manufacturing sector and the mining and
construction sector, where outlooks stood at 16 per cent and 13 per cent, and in the
transportation and utilities sector at 11 per cent.
Employers in all four regions expect to add to payrolls during the forthcoming quarter. The
strongest labour market is expected in the east, where net employment outlook stood at 38
per cent.
Steady workforce gains were also forecast in all the other three regions, south, west and
north with outlooks of 19 per cent, 18 per cent and 16 per cent, respectively.
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13/09/2019 Impact of RBI rate hike on Rupee: So how can an RBI rate hike help stem the rupee slide? - The Economic Times
1,616 crore to cart ahead of… may not survive slump Raja; Bachchans accompany
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In April this year, investors in six fixed maturity plans (FMPs) of Kotak Mutual Fund
maturing between April 8 and May 31 did not get back their entire money on account of
delay in repayment by Essel. HDFC Mutual Fund gave unitholders the option to roll over or
extend the maturity by 380 days instead of redeeming at maturity in mid-April.
Related Most Read Most Shared
Aditya Birla Mutual Fund received the highest sum of Rs 760 crore out of the total Rs
Essel Group repays half the debt to MFs & NBFCs
2,500 crore due.
Avoid Essel group, Indiabulls, stick to defensives:
Nischal Maheshwari
ICICI Prudential Mutual Fund received Rs 435 crore, 60 per cent of the total outstanding
amount. Their recovery was the highest in terms of percentage of the outstanding sum. Essel group stocks tumble up to 11%
Subhash Chandra’s Essel Group raised Rs 4,200 crore by selling 11 per cent in Zee
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Entertainment to global fund Invesco Oppenheimer last month. It was expected that Zee
Mutual Funds
will pay around Rs 2,600 crore to mutual funds out of this money.
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should know.
Invest in Direct Mutual Fund on ETMONEY for free and earn up to 25 lakhs extra in Top Tax Saver ELSS SIP starting Rs 500
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Subhash Chandra Credit Rating Sebi Zee Entertainment Enterprises Ltd. Savings Account
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NBFCs Kotak Mutual Fund
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Essel Group repays half the debt to MFs & NBFCs Funds Funds
Avoid Essel group, Indiabulls, stick to defensives: Nischal Maheshwari
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13/09/2019 Impact of RBI rate hike on Rupee: So how can an RBI rate hike help stem the rupee slide? - The Economic Times
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Agencies
The Indian space agency on Tuesday
reiterated that its moon lander Vikram has
been located by the Chandrayaan-2 Orbiter.
Research Organisation (ISRO) tweeted. Manmohan Singh tells Modi govt to stop 'headline
management' and focus on economy
"All possible efforts are being made to Central contractual employees to get paid like
establish communication with lander," ISRO regular staff: Report
The space agency continues to remain silent as to
proximate cause for the moon lander tumbling and said. Chandrayaan-2 lander Vikram intact, but tilted, near
deviating from its original flight path on September 7 planned landing site
early morning.
The ISRO did not, however, say in what DRDO hands over second 'Netra' early warning
condition the lander is on the lunar surface. system to IAF
More »
The space agency continues to remain silent as to proximate cause for the moon lander
tumbling and deviating from its original flight path on September 7 early morning.
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0 U S China trade war Kashmir News Bangalore News
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Lunar Surface
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whose flamboyant style and charismatic leadership made him the most recognised
Chinese entrepreneur since the former English teacher founded the company 20 years
ago in a small shared apartment in Hangzhou city in eastern China.
"He has the logic and critical thinking skills of a super computer, a commitment to his
vision, the courage to wholeheartedly dare to take on innovative business models and
industries of the future," Ma said of Zhang in 2018 in a message announcing his
appointment.
One of Zhang's major challenges will be finding new areas of growth as China's e-
commerce sector matures, analysts said.
Last week, Alibaba announced investments of $2.7 billion in luxury goods retail platform
Kaola and a music streaming firm in moves that partly demonstrated its flexibility in
adopting new strategies. Top Trending News
U S China trade war Kashmir News Bangalore News
"If Alibaba wants to find new innovations or trends this is going to be more difficult than Mumbai News Rajnath Singh Latest News
before," said Liu Yiming, an analyst at the research division of 36kr, a Chinese tech News Headlines
publishing group.
China's online retail sales grew just 17.8% in the first half of 2019, almost halving from the
32.4% growth of the prior year, according to the national statistics office.
The resignation plan announced by Ma last year was perceived as unusual as it is rare for
a founder of such a big and transformative tech firm to retire this early.
Under Ma's leadership, Alibaba has grown to become Asia's most valuable listed
company, with a current market capitalisation of $460 billion. It employs over 100,000
people, and has expanded into financial services, cloud computing and artificial
intelligence.
When Ma makes his farewell speech, investors would like to hear how he will be involved
in management and whether he will continue to steer the company's broad strategy. Ma
has said that he will continue to mentor management.
After his resignation, Ma, China's richest man with a net worth of $38.4 billion, according to
Forbes, is set to spend more time on philanthropy and education. Yet he will remain a
member of Alibaba's partnership, a corporate governing group of 38 individuals that is
separate from the board of directors.
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Ma struggled to expand Alibaba internationally, with the failed $1.2 billion acquisition of
remittance provider MoneyGram marking a key disappointment.
Its Taobao marketplace has been accused by overseas luxury goods sellers of being a
haven for counterfeit products. It is on a U.S. list of "notorious markets" for goods that
infringe on American intellectual property, a main source of friction in an escalating trade
war between Beijing and Washington.
Ma also drew ire and sparked a nationwide debate about work culture in China earlier this
year when he urged tech company employees to work nights and weekends.
"I expect a long, long ceremony with Jack showing up at the end - in dramatic style, of
course," says one Alibaba employee. "And plenty of people with their computers out
working."
In Video: Happy birthday, Jack Ma! A peek into Alibaba boss's journey as he steps down
from own company
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HIGHLIGHTS
At a time when auto sales have crashed to historic lows, Bhargava also blamed higher
taxes on petrol and diesel and upward revision in road and registration charges by state
governments for adding to the burden of car buyers. He added that a temporary cut in GST
will not make much of a difference, and can be avoided.
Bhargava’s views on GST conflicts with the demand made repeatedly by auto industry
body Siam and other CEOs, who have petitioned the government to bring down tax on
vehicles from 28% to 18%. “The guy who rides a two-wheeler wants to upgrade to a four-
wheeler. But he’s unable to do so in terms of his financial capacity,” the Maruti chairman
told TOI in an interview, while pointing out sales of Alto have crashed 50%.
Bhargava refused to buy arguments that the present slowdown in the auto sector — where
sales have touched lowest in two decades — is related to “structural shifts” such as the
rising popularity of shared mobility such as Ola and Uber. Rather, it is due to a number of Top Trending Industry Terms
factors, such as stricter safety and emission norms, enhanced insurance costs, and
Malgudi railway station Auto sector slow down
additional road tax in around nine states, which have depressed the sentiment.
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The cumulative effect of the factors has increased the cost of an entry car by around Rs
55,000, including around Rs 20,000 through higher road tax in certain states, Bhargava
said. And, the biggest issue is reluctance of the banking sector where officers are “very
shy of taking the slightest risk” in terms of financing.
Bhargava said stipulating additional safety norms, which are prescribed in the developed
countries, has no practical logic for a country like India. “The Indian car buyer is not like the
European or the Japanese car buyer. The per capita income here is around $2,200, China
has around $10,000, and Europe about $40,000. How do you compare with those people?
But when it comes to regulations everybody in India says we must have the best
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13/09/2019 Impact of RBI rate hike on Rupee: So how can an RBI rate hike help stem the rupee slide? - The Economic Times
But when it comes to regulations, everybody in India says we must have the best
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regulations … you have to look IPOs/FPOs Markets Data Market Moguls Expert View Technicals
at the affordability of a product considering the Indian level Commodities Forex Mobile Apps More
of incomes
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News Currency somebody else’s level of income.”
As vehicles get expensive, the inability of the two-wheeler rider to upgrade to four wheels
also exposes him to greater risks on the road. “… which is riskier? A small car without
airbag and ABS, or a scooter. Obviously, the scooter.”
Maruti chairman Bhargava has said India Inc should avoid paying “obscene salaries” to
their top management, as steps are required to make the society “much more equitable”.
“Just see how much difference there exists today … I have a problem with high salaries
and ostentatious consumption,” Bhargava told TOI, adding that the Japanese society is
much more equitable.
The Maruti chairman said an MD should be paid a maximum of 15-20 times the salary of
an ordinary worker who has given the same number of years in the company.
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go out. So, the markets are naturally under pressure. This is pure market action and
customers continue to repose their faith in equities as an asset class.
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Mutual Funds
In terms of the kind of momentum we expect on this front, do you see this
continuing? Right now, this is looking intact, if not a huge up move. The overall
figures are looking encouraging to say the least! Do you see this as sustainable?
Yes because SIP flows are staying constant. That is the good news. Second, there is also
Top Tax Saver ELSS SIP starting Rs 500
a little more maturity in terms of advisers and investors in the stock market. A scenario,
Funds
where alternative asset classes like bank deposits are going down and banks are
beginning to cut interest rates, people are beginning to show a little more patience with
equity and even a three-year SIP in the small and midcap spaces have now turned
negative, some even five years.
Alternative to Index Funds
Besides that, we are not finding that customers are rushing to pre-close or whatever. To a Savings Account
certain extent, there is a growing maturity. One, of course, hopes that the market does not
test the investors’ patience for too long, by the long sustained sell of negative returns in
the recent past. One should not be testing investors’ patience so much. I hope there is
some recovery in the festival season and from government spending in the coming
Best Large Cap Best Balanced
months. Funds Funds
What is your perspective on the fact that we have got a bigger inflow moving into
largecap funds and a lot less interest in midcap funds?
The mid and smallcaps are quite closely linked to economic growth and as you know,
economic growth has taken the biggest beating in the recent past. So, a) there is a High Performing Mid Top Rated Multi Cap
Cap Funds Funds
challenge in terms of performance of mid and smallcaps; b)From a largecap fund
perspective, there is an expectation that FII flows would come back largely in the largecap
space.
As for multicaps, what people are saying is that the multicap fund manager has the
flexibility to switch from large to mid to small as he sees the wave turning. So, an increase
in interest on multicaps is a clear signal that people know that right now maybe the time for
largecaps, but over next few months, they might want to increasingly shift to mid and
smallcaps as those valuations are beginning to look extremely attractive. They want to give
that money to the fund manager to act on their behalf. Therefore, rather than making a
switch, they put money, they would like to stay for a year because most mutual funds have
a one-year exit load and also the short term capital gains tax is higher than the long term
capital gains tax. Rather than do the shift themselves, they park the money in a multicap
fund and this is one of the reasons why we launched a multicap fund last month. We
ended up collecting about Rs 350 crore, which is quite substantial because this number is
not counted in the AMFI data as the allotment happened only yesterday.
It will come in next month’s collection, but Rs 350 crore, out of Rs 1,500 crore is pretty Trending in Markets
substantial. It is about 25% of the flows in the industry. It is just one single fund. Clearly
Budget Sensex Stock Market
that shows the interest of the customers. Our fund house thought process is that in that
Stock Recommendations IPO Upcoming IPO
multicap fund, we will put 70% in largecaps initially and only 20-30% in the mid and
Gold Rate Top Gainers Rupee vs Dollar
smallcaps. As time progresses, we will probably increase allocation to mid and smallcaps Share Market Silver Price Nifty 50 Nifty Bank
which is precisely what customers want to do, leave it to the fund manager to do the large, Infosys Share Price Crude Oil Price
mid and small asset allocations over the next few months in terms of deploying money in
those categories where they will see less pain and in the longer term more gain.
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Mostly, students start repaying their
education loans with the start of their
working lives. And for many paying for
monthly discretionary expenses and the loan
IN THE SPOTLIGHT
equated monthly instalments (EMIs) can be
Leave a tax free legacy for your
financially stressful. Though it might be children with whole life insurance
difficult, it is financially prudent to salt away a plans
portion of your income towards creating an
emergency fund.
Related Most Read Most Shared
An emergency fund helps you meet your daily Now, at the start of your career, your Education loans in India shrink 25% in 4 yrs
expenditure in case of unforeseen eventualities. education loan EMIs may make your savings Why getting education loan has become tougher
difficult but later on, as your income now
increases, it will become easier to set aside funds for emergency purposes.
Education loan: The government's Vidyalakshmi
website will help you get one
Why do you need to maintain an emergency fund?
How to fund child's studies? Education loan better
An emergency fund helps you meet your daily expenditure in case of unforeseen than mortgaging house, using savings
eventualities. For instance, what happens if you were to suddenly lose your job? In such a
Bank vs NBFC: Keep these factors in mind while
case, your salary will stop but your monthly expenses and EMIs will not. Financial stress taking an education loan
can become a threat to your mental and physical health during a job loss. Although, a long
period of unemployment is less likely to happen, but finding a new job also takes time.
Therefore, it is important for you to have an emergency fund large enough to meet your
Discover POWERED BY
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Conservative people can save money in their savings bank account and maintain surplus
Forex News Currency Converter
balance for emergency needs. Amol Joshi, Founder, Plan Rupee Investment Services
says, the biggest advantage of maintaining an emergency fund in a bank savings account
Alternative to Index Funds
is: Savings Account
Easy access to funds via a debit card;
Secure feeling of having money readily available (because it reflects as account
balance).
He further said, "Many liquid mutual fund schemes come with the facilities like debit card High Performing Mid Top Rated Multi Cap
Cap Funds Funds
(easy access to funds) and easy balance checking facility via mobile apps. Moreover,
return on liquid mutual funds is most likely to beat the savings account interest rate. So, if
you can make this behavioural change, then gradually switch to liquid funds."
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Abhinav Angirish, Founder, Investonline.in said, "Instead of putting emergency funds in a
savings bank account, you can opt for a liquid mutual fund or recurring deposits. You can GET QUOTE
expect to get better return on money deposited in a liquid mutual fund or recurring deposits
as compared to a savings bank account."
Wealth Plan Trending Terms
According to financial experts, liquid mutual funds return, and recurring deposit interest
Millennial Financial Planning Financial Goals
rate are most likely to beat the savings account interest rate.
13 personal finance thumb rules Financial Literacy
Home Loan Money Management Mutual Fund
Angirish said, "Investing in the recurring deposit can earn around 6-7 percent return per
Atal Pension Yojana for tax benefits Financial Planning
annum. On the other hand, liquid mutual funds can earn around 8 to 9 percent return per Atal Pension Yojana Consumer Complaint Online
annum on your emergency fund. However, remember return on liquid mutual funds are Benefits for Senior Citizens Money Tips
market-driven. However, while selling units in liquid mutual funds no exit load is applied."
C.S.Sudheer, CEO and Founder of IndianMoney.com said, "You should ideally set aside a
minimum amount, say around 10 percent of your monthly income in the emergency fund at
the beginning of the month. However, you may also save at the end of the month but in
such case, you need to carefully manage your living expenses so that you can at least set
aside a few thousand rupees or at least 10 percent of your income at the end of the
month."
He said, "While paying the education loan EMIs in time, if you earn/save any extra amount
during the course of time then that amount should be used in building an emergency fund
which equals to 3-6 months' living expenses."
This is the simplest way and should be doable without straining your finances. However,
the first year may be the toughest, but it will eventually be the most rewarding. This is
because even if your savings are small, they provide you with the base for accelerated
growth in later years.
Secondly, as your income rises, your ability to save money should also increase.
Therefore, as you get past the first couple of years of working, then you must also start to
accelerate the pace of your emergency fund creation. Adhil Shetty, CEO, BankBazaar.com
id "Y h ld d ll h i t t 15 20 tf 10 15 t
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13/09/2019 Impact of RBI rate hike on Rupee: So how can an RBI rate hike help stem the rupee slide? - The Economic Times
said, "You should gradually push up your savings rate to 15-20 percent from 10-15 percent
Home Markets Stocks IPOs/FPOs Markets Data Market Moguls Expert View Technicals Commodities Forex Mobile Apps More
of your monthly income over a period of time. By all means, save a higher percentage -25-
Forex News Currency
30 percent - if you Converter
can." He said, "Keep saving through this method until you've saved at
least 3-6 months' worth your current living expenses. It would be even better if you save 3-
6 months' worth your current income."
After you have saved an amount equal to three-six months' worth of expenses you can
either stop saving towards the emergency fund or keep saving until you have made a
buffer amount equal to 6-12 months' current expense.
Gaurav Gupta, Founder & CEO, MyLoanCare said that student applicants avail education
loan to pursue their higher education during the course of which the applicant is not
earning and hence, they are not in a position to repay the loan. Hence, most banks offer a
moratorium period for repayment of education loan in which a borrower has to start paying
EMIs 12 months after the completion of the course or six months after securing a job,
whichever is earlier."
The repayment tenure after moratorium period generally ranges from 5 to 7 years. "Banks
give the option of paying only the monthly interest during the moratorium period or paying
the entire amount in EMIs only when repayment commences after the moratorium period,"
Gupta added.
Therefore, as you soon as you start your job, first create an emergency fund by saving
money during the moratorium period. After that, begin your EMI payments towards the
education loan. Once you start paying EMIs, make sure you don't skip any of your
education loan EMI payment during the tenure.
Sudheer said, "Your credit score is impacted if education loan EMIs are not repaid in time.
A sudden job loss could delay EMI repayments and impact the credit score. So, in case of
financial emergency, maintaining a buffer amount of at least 3 months can help you
continue paying your EMIs and prevent your credit score from getting adversely impacted."
As you may not get enough income to tackle both EMI payments and creating an
emergency fund simultaneously, following this approach can reduce your financial burden
to an extent during initial working years.
The following is another way you can simultaneously save for an emergency fund and pay
your EMIs.
3. Tax-savings approach:
The money you save through tax can be used for emergency fund creation. You must
know that the interest paid on the education loan provides you tax-saving deduction under
section 80E of the Income Tax Act, for the first 8 years. Hence, you can put the tax saved
in this way into your emergency fund.
Points to note
If you don't have or have an inadequate emergency fund, you risk becoming more
indebted because you would have to borrow to meet living expenses in case you lose
your job. Therefore, you must review your emergency fund from time to time. The
reviewing process should be done in accordance with the increase in monthly
expenses.
You shouldn't stop maintaining an emergency fund after completely repaying your
education loan. Make sure you have created an emergency fund for meeting daily
expenses which include money spent on food, rent, utility bills and other financial goals.
If you have a steady job and have saved enough to meet your 6 to 12 months current
expenses, then prepay the education loan and save on the interest you would have had
to pay on the balance loan.
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Also Read
Education loans in India shrink 25% in 4 yrs
Education loan: The government's Vidyalakshmi website will help you get one
How to fund child's studies? Education loan better than mortgaging house, using savings
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(This story originally appeared in on
Sep 10, 2019)
NEW DELHI: As the government works on
an “export package”, the finance ministry has Related Most Read Most Shared
said that it may not be possible for the
government to shift all exports to the Rebate Two export schemes may shift out of Commerce
Dept to ease process
of State and Central Taxes and Levies
(RoSCTL) scheme, given the Budget Nasscom wants exports scheme extended by a
year
constraints.
To boost defence exports, govt to launch 'open
general export scheme' in a month: Official
Sources said that the scheme is almost ready and is Instead, it wants the commerce department
expected to be announced shortly. to identify priority sectors which need more Non-basmati exporters to get 5% benefit under
merchandise exports scheme
support. RoSCTL is a replacement for the
existing Merchandise Exports from India Scheme (MEIS). The commerce department put US moves WTO against India’s export schemes
together the new scheme after the US dragged India’s export promotion programmes to
the World Trade Organization and is expected to be taken up by the Union Cabinet shortly.
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Currency government has estimated that the incidence of central and state
levies added up to 4-5%, which needed to be refunded. With merchandise exports GET QUOTE
estimated at over $330 billion, refund of levies would add up to over $16 billion or more
than Rs 1.1 lakh crore, sources said.
For the current fiscal year, the Centre has budgeted for a revenue impact of Rs 65,720
crore on account of all export-promotion schemes. Of this, MEIS is estimated to have an
impact of Rs 36,615 crore. Already, some of the GST is refunded to exporters.
The government recently released Rs 6,000 crore for the textiles industry, while insisting
that some of the other sops for exporters should be dropped. While the rebate scheme for
all exporters is being finalised, the government is also working on ways to improve access
to loans for which commerce and industry minister Piyush Goyal has held several round of
deliberations. Sources said that the scheme is almost ready and is expected to be
announced shortly.
In an interview last week, finance secretary Rajiv Kumar too had underlined the need to Top Trending News
offer incentives to exporters. This, he said, will help use up idle capacity in the U S China trade war Kashmir News Bangalore News
manufacturing sector and also result in import substitution. Mumbai News Rajnath Singh Latest News
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Two export schemes may shift out of Commerce Dept to ease process
To boost defence exports, govt to launch 'open general export scheme' in a month: Official
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