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Digitising stamp papers

May 15, 2008

The next time you want to get a property registered, you might not have to run around applying for stamp papers and then match different denomination of stamp papers to add up to the total amount. In fact, you won’t need stamp papers at all. Thanks to electronic-stamping, all you would need is a ‘payment certificate’ from a designated collection centre, which can even be your neighbourhood bank.

E-stamping, that will gradually replace stamp papers, is computer-based stamping of documents where the entire database is maintained electronically. The government has appointed the Stock Holding Corporation of India (SHCIL) as the record keeping agency. A huge advantage of this system is that it is designed to print out stamp certificate of any denomination starting from Re 1.

Starting April, Delhi has become the first state to shift to e-stamping of documents though the system has also been launched on a pilot basis in eight other cities in Gujarat, Maharashtra and Karnataka. However, the new system will not apply to judicial stamp paper used in sworn affidavits and other documents that do not involve transaction of immovable property. The e-stamping system also promises to take care of the possibility of a fake or forged stamp paper. Each tamper-proof certificate comes with a unique identification number (UIN). The authenticity of the certificate can be verified on the website

The true worth of this new system will come when every single transaction requiring a stamp paper is digitised. Also, there are a few remaining kinks that need to be worked out. For one, a certificate of one state can’t be used in another state since there is no pan-India network yet. Also, old documents cannot be upgraded to e-stamps. However, the first step towards a digital future has now been taken.

— Rakesh Rai


Stamp Paper

Fill up requisition form at ASC File a written application at revenue department for stamp papers
Official receives payment, feeds details in the system and shows a preview certificate
System generates a stamp duty paid certificate with Unique Identification Number (UIN) in three minutesGets stamp papers in 1-3 days after payment realised by the revenue department 
The document to be registered is printed on plain paper The agreement is printed on the stamp paper; a mistake means starting again
The client approaches the sub-registrar to register his document
Registrar verifies the certificate with the help of the UIN. Registration becomes complete after the sub-registrar locks the e-stamp certificate after verifying the contentsRegistrar puts in the signature, but there is no way of verifying if the stamp duty has been paid by the client or if the paper is fake

Baggage woes

Word’s worth

“In the reasonable future, I do not expect any increase in interest rates by the public-sector banks”
— P Chidambaram, finance minister

“India cannot afford a 12-15% wage inflation as has been happening or we will lose our competitive edge”
— KV Kamath, president, CII

“Inflation is not antigrowth. In fact, it will help growth in the medium term”
— Dr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission

“Mutual fund as a product is far superior than Ulip. Mutual funds allow lot more liquidity and the basket of choice is wider”
— Sandeep Dasgupta, CEO, Bharti AXA Investment Managers

Source: Bloomberg, Hindu Business Line and Economic Times

Few things are as stressful as reaching a destination only to learn that your baggage is missing. A minor consolation is that you will be compensated for the lost luggage, so what if it is only a pittance— Rs 800 per kg of damaged luggage and around Rs 20,000 for lost baggage. But now, with Lok Sabha passing the Carriage by Air (Amendment) Bill, there is a lot of good news for Indian passengers travelling abroad.

The Bill, which adopts the Montreal Convention, ups the compensation for lost luggage to $1,400 or Rs 56,000 per passenger and that for damaged bags to Rs 960 per passenger. Remember that you will be compensated a fair market value for your belongings and not replacement value. The liability to pay passengers is on the airport, though airlines work in tandem with airports and insurers to facilitate refunds.

— Narayan Krishnamurthy

Allotment first, payment later

Those who have been there, done that will tell you that an IPO is a lot like playing Russian Roulette—you apply for an IPO and then wait, fingers crossed, to see if you land some shares. It was a double whammy if you weren’t allotted any shares. You not only missed out on the opportunity to make money from the shares but your application money would have earned a wee bit interest in the bank. So now Sebi is working on a system, akin to the credit card system, where you only have to pay after you get an allotment.

“The bank will clear the money from the applicant’s bank account the moment it gets intimation on allotment,” explains CB Bhave, chairman, Sebi. This, however, will mean the coming together of several intermediaries to work out a technologybacked system which empowers investors. The move will dent the additional income that merchant bankers make by holding on to money for short durations between IPO collection and allotment. Given the path Sebi is taking recently, Bhave is all set to make the capital markets more conducive for retail investor participation.

— Narayan Krishnamurthy


Credit card as ticket

Telling figures

Some figures that have immediate or long-term personal finance implications

4 lakh plus is the number of dollar millionaires that India is likely to boast of by 2017, with an estimated worth of $1.7 trillion. The Economic Intelligence Unit study also projects that India will be the world’s eight wealthiest nation in a decade’s time

22 is the number of life insurance companies in India.The latest to enter the business is IndiaBulls’ joint venture with French major Societe Generale which recently got permission from the Insurance Regulatory and Development Authority to start soliciting life insurance

Rs 5,67,601 crore is the value of the total funds under management of all mutual fund schemes in India as of 31 April 2008.There are 34 fund houses in the country and more are expected to enter the market soon

Imagine a world where your credit card is your passport to public transportation, be it local trains, the metro or buses, instead of carting around different passes or smart cards for individual transport systems. A world where your transit card packs in the power of credit, or vice versa. This is no longer a pipe dream, at least as far as Delhi is concerned. Citibank, in partnership with the Delhi Metro Rail Corporation, has launched India’s first co-branded credit card, which doubles as an access card at metro stations allowing one convenient tap-and-go entry.

The card comes with an installed chip which allows you to easily top-up your balance, and the corresponding amount will show up on your next monthly statement. The reward points accumulated—1 point for every Rs 100 spent and double that for metro spending—can be redeemed for free rides as well as items from the rewards catalogue. DMRC is currently working on making its existing Metro smart card also usable on buses so the Citibank synergy may well extend there too. But the near future will definitely see pre-paid and debit card variations of this credit card. How soon before other cities boast of similar offerings?

— Sushmita Choudhury

Finally, a true mobile wallet

Mobile payment channels for banks are dime a dozen, just as there is no shortage of m-commerce facilitators. But how about just one gateway giving you the best of both worlds? The tie-up between HDFC Bank and ngpay, a mobile commerce network, does just that. In the initial states of this synergy, customers could only conduct basic banking functions, primarily enquiries and requests, and make payments. Now, one can even transfer funds. With this launch, HDFC Bank has become the first bank in India to offer a full suite of banking and commerce services over the mobile. All you have to do is SMS “ngpay” to 56767. What’s more, it’s a free service.

Thumb rules

Senior pains

The repercussions of general insurance de-tariff regime was first felt by health insurance policyholders, especially senior citizens. Not only did renewals not get any easier, renewal premiums too started to cost more, with insurers escalating premium by over 100%. Now Irda has asked public-sector insurers to cap premium hikes in health policies for senior citizens. The kneejerk reaction has spelt its share of confusion; policyholders who renewed their policies at new premium levels do not get back any money, but fresh renewals will be at substantially lower rates. Oriental Insurance Company is the first to roll back renewal premiums, but it has added several riders to the policy—for one, you should have become a senior citizen by September 2006. How other insurers react to this cap is something that will make senior citizens lose some sleep in the days to come.

Step 1: You could conduct basic banking functions and make payments using your credit cards or by direct debit from your account
Step 2: You can now transfer funds real time between HDFC Bank accounts and within 48 hours when transferring to a different bank
Step 3: By next month you will also be able to buy and sell units of HDFC Mutual Fund schemes on your mobile phone

— Sushmita Choudhury

Securing ULIPs

If you are an aware ULIP investor, tracking every move by your fund manager, you may have had the jitters when your money was invested in new companies that had not stood the test of time. After all, there was no restriction on ULIPs investing in IPOs, though you wanted your fund option to be more on the risk-averse side.

The Insurance Regulatory and Development Authority (Irda) has just ended your worries by capping the investment of insurance firms in IPOs at either 10% of their subscribed capital or 10% of their fund value, whichever is lower. This regulation, which comes into effect from September, will impact the markets as well as stakeholders. For IPOs, a source of easy funds will dry up while insurers will have to look at secondary markets to maintain their equity exposures.

— Narayan Krishnamurthy

Pay more for more

Policy snapshot

Entry age: 91 days to 75 years
Maturity age: 18 year to 85 years
Policy tenure: 10-30 years
Premium contribution: Rs 20,000 onwards subject to underwriting
Riders available: Personal accident cover and dreaded disease
Fund Options: Six (secure, conservative, balanced, growth, growth super and dynamic opportunities)

The insurance needs of high networth individuals (HNIs) vary greatly from person to person and hence structuring a product to meet their needs is not an easy solution. Max New York Life Insurance now tries to address this unique need with its new offering—Smart Assure, a unit-linked insurance plan (Ulip). Says Debasis Sarkar, director-marketing, product management and corporate affairs: “We now have a customised product to meet the need of the people who want to invest a larger sum and derive maximum returns from it.”

Smart Assure works like any other Ulip and allows you to choose your premium payment. One can pay a regular fixed sum each year or opt for an incremental 5% increase each year to match inflation. The sum assured varies accordingly to meet the prescribed limits set by the regulator. But what sets this plan apart from the rest is the promise to allow 100% fund allocation for policyholders who make premium contributions above Rs 3 lakh.

This strengthens the value proposition of the plan and acts as an incentive to customer to move to higher investments and get better returns. The policy also empowers the policyholder to manage their investments across six fund schemes with six free switches a year across them.

— Narayan Krishnamurthy

Financial wisdom

Do you know why you’ve invested and what you’re invested in? You can check your financial quotient here. More quizzes on our website

1. A complex financial instrument is always very risky


2. Estate planning, particularly making a will, is a one-time-only exercise

3. The management fee (expense ratio) charged by asset management companies can be anything over 2.5%

4. If you have a large life insurance policy, you don’t need to get motor insurance


Give yourself 0 for every Yes and 1 for every No
0-1: Better luck next time (and do take the time to read this magazine. There’s plenty of information that could prove useful)
2-3: You’ll do—your grasp of your finances seems pretty good, though, of course, it could be better!
4: Obviously a know-it-all. Just make sure to keep reading and keeping your knowledge up-to-date

Random nuggets of wisdom


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