Meet David. He's too effete, too innocuous to matter. He travels by the metro and shops during sales. He saves his taxes, but is stumped by inflation. He scours for the best mobile phone plans, yet scoffs at term insurance. He plays the market like a pro, and then loses his savings at the first hint of volatility. Swindled by corporates, baffled by bank rates and missold insurance, he's the average Indian investor. He's you.
For the better part of the country's financial history, Goliaths (in the market, banking, insurance) have bested David with smug chicanery. Though bolstering the corporates, he has been stripped naked in market scams. He has paid high charges on Ulips, only to be sold new ones after the lock-in period, so crafty agents could squeeze fresh commissions. He has doled out unjust interest rates on bank loans and earned piddly ones on his savings account. The plunder has been flagrant, systemic and near-complete.
The regulators, meanwhile, have stood on the sidelines, snarling now and growling then, with scant impact. Of late, however, they have begun to shed insouciance and are beginning to rein in the profligate Goliaths while bringing in transparency. And the Biblical underdog is sniffing at a chance of empowerment.
In the past couple of years, pending proposals and reluctant regulations have been implemented in practically every sphere of personal finance. Entry loads on mutual funds have been removed. The charges on Ulips have been capped. The interest rate on your bank account is to be calculated on a daily basis. The financial scape is bristling with change, the rules of the game are a changin'. In the following pages, learn how they can benefit you.
As MONEY TODAY celebrates its fourth anniversary, here's a reason for you to raise a toast. To David. To yourself.
In this story:
Removal of entry load
Introduction of ASBA
Ban on insurance commissions
Change in Ulip structure
New lending benchmark