COURSE ON COMPUTER CONCEPT
SUBJECT :-APPLICATION OF DIGITAL FINANCIAL SERVICES
INTRODUCATION:Unbanked people are increasingly gaining access to financial
services through digital channels. Banks, microfinance institutions, mobile operators, and other
providers are using mobile phones and point-of-sale devices, along with networks of small-scale
agents, to offer basic financial services at greater convenience and lower cost than traditional
banking allows. Also referred to as branchless banking, these digital services offer great promise
for better serving poor customers.
Historically, the high cost of building and operating traditional bank branches has been a major
obstacle for reaching poor customers with financial services. Brick-and-mortar branches are
expensive for banks to maintain in far-flung communities, while traveling to urban areas is costly
for many rural customers. Digital finance helps providers overcome these barriers: Agents
equipped with mobile phones are the cheapest channel for processing small-value transactions
for poor people at low cost and at scale.
8.1- WHY SAVINGS ARE NEEDED?
Savings is the portion of income not spent on current expenditures. Because a person
does not know what will happen in the future, money should be saved to pay for unexpected
events or emergencies. An individual’s car may breakdown, their dishwasher could begin to leak,
or a medical emergency could occur. Without savings, unexpected events can become large
financial burdens. Therefore, savings helps an individual or family become financially secure.
Money can also be saved to purchase expensive items that are too costly to buy with monthly
income. Buying a new camera, purchasing an automobile, or paying for a vacation can all be
accomplished by saving a portion of income.
1- EMERGENCIES:As much as we hope that emergencies won’t happen, we all know that they do. A
family member can develop a health issue, you might need to make an emergency
trip, you may have a car accident or breakdown, severe weather could flood your
basement or crack your pipes, or you may have to fly to a loved one’s funeral.
Any of these emergencies can be expensive, and we all know that we will likely
encounter some sort of emergency from time to time. So why not be prepared
rather than potentially become another victim of an emergency.
2- FUTURE NEEDS:If you intend to retire someday, you'll probably need savings and/or investments
to take the place of the income you'll no longer get from your job.
3- LARGE EXPENSES:Large expenses sometimes surprise us by popping up at the most inopportune
times. More often than not, however, you probably should have planned for these big
expenses to pop up.
A big home maintenance item, like replacing your roof or air conditioner, or an car
repair can both be predicted in general terms.
You know neither of these items will last forever and most people can predict the
average life of these items.
8.2- DRAWBACKS OF KEEPING CASH AT HOME:-
8.3- WHY BANK IS NEEDED:The bank can send money on your behalf at your location. After all that
money? Medium of exchange. Goods and services to those who produce them, changing the
money. Modern man consumes a lot of services. For example, each month you may need to
pay for: an apartment, telephone, intercom, garage, internet, mobile phone, etc.
In this case, as long as you consume these services, you have a contract with those who provide
these services, as well as these services are likely to organizations, each organization must have
(must have at law) in which the account- a bank.
So you stand to have to pay the organization and the organization has an account in a bank. You
can pay in two ways to come to the accounting department of the organization whose services
consume, and to withdraw cash from the cashier.
Or, open an account in any bank (because you can send money from any bank in any) and pay
the necessary organization of wire transfer directly from your bank account, they withdraw
money from your account and the bank will be transferred to the bank account of the
organization to which you gathered to pay. I think you are all clear?
8.4- BANKING PRODUCT:1- TYPE OF ACCOUNTS AND DEPOSIT:Savings Account
Savings Account is meant for saving purposes. Any individual either single or jointly can
open a savings account. Most of the salaried persons, pensioners and students use
Savings Account. The advantage of having Savings Account is Banks pay interest for the
savings. The saving account holder is allowed to withdraw money from the account as
and when required.
The rate of interest ranges between 4% to 6% per annum in India. There is no restriction
on the number and amount of deposits. But withdrawals are subjected to certain
restrictions. Some banks recommend to maintain a minimum amount to keep it
functioning.
Recurring Deposit Account
Recurring deposit account or RD account is opened by those who want to save certain
amount of money regularly for a certain period of time and earn a higher interest
rate. In RD account a fixed amount is deposited every month for a specified period and
the total amount is repaid with interest at the end of the particular fixed period.
The period of deposit is minimum six months and maximum ten years. The interest rates
vary for different plans based on the amount one save and the period of time and also
on banks. No withdrawals are allowed from the RD account. However, the bank may
allow to close the account before the maturity period.
These accounts can be opened in single or joint names. Banks are also providing the
Nomination facility to the RD account holders.
Fixed Deposit Account
In Fixed Deposit Account (also known as FD Account), a particular sum of money is
deposited in a bank for specific period of time. It’s one time deposit and one time take
away (withdraw) account. The money deposited in this account cannot be withdrawn
before the expiry of period.
However, in case of need, the depositor can ask for closing the fixed deposit
prematurely by paying a penalty. The penalty amount varies with banks.
A high interest rate is paid on fixed deposits. The rate of interest paid for fixed deposit
vary according to amount, period and also from bank to bank.
Current Account
Current account is mainly for business persons, firms, companies, public enterprises etc
and is never used for the purpose of investment or savings. These deposits are the most
liquid deposits and there are no limits for number of transactions or the amount of
transactions in a day. While, there is no interest paid on amount held in the account,
banks charges certain service charges, on such accounts. The current accounts do not
have any fixed maturity as these are on continuous basis accounts.
2- TYPE OF LOAN AND OVERFRAFTS:Lending money is one of the two major activities of any Bank. Banks accept deposit from
public for safe-keeping and pay interest to them. They then lend this money to earn
interest on this money. In a way, the Banks act as intermediaries between the people
who have the money to lend and those who have the need for money to carry out
business transactions. The difference between the rate at which the interest is paid on
deposits and is charged on loans, is called the "spread".
Banks lend money in various forms and they lend for practically every activity. Let us
first look at the lending activity from the point of view of security. Loans are given
against or in exchange of the ownership (physical or constructive) of various type of
tangible items. Some of the securities against which the Banks lend are :
Commodities
Debts
Financial Instruments
Real Estate
Automobiles
Consumer durable goods
Documents of title
Apart from the above categories, the Banks also lend to people on the basis of their
perceived personal worth. Such loans are called clean and the Banks are understandably
cagey about extending such loans. The credit card arms of the various Banks, however,
fill up this void.
Cash credit Account:This account is the primary method in which Banks lend money against the
security of commodities and debt. It runs like a current account except that the
money that can be withdrawn from this account is not restricted to the amount
deposited in the account. Instead, the account holder is permitted to withdraw a
certain sum called "limit" or "credit facility" in excess of the amount deposited in
the account.
Cash Credits are, in theory, payable on demand. These are, therefore, counter part
of demand deposits of the Bank.
Overdraft:The word overdraft means the act of overdrawing from a Bank account. In other
words, the account holder withdraws more money from a Bank Account than has
been deposited in it.
How does this account then differ from a Cash Credit Account The difference is
very subtle and relates to the operation of the account. In the case of Cash Credit,
a proper limit is sanctioned which normally is a certain percentage of the value of
the commodities/debts pledged by the account holder with the Bank. Overdraft,
on the other hand, is allowed against a host of other securities including financial
instruments like shares, units of mutual funds, surrender value of LIC policy and
debentures etc. Some overdrafts are even granted against the perceived "worth"
of an individual. Such overdrafts are called clean overdrafts.
Bill Discounting:Bill discounting is a major activity with some of the smaller Banks. Under this type
of lending, Bank takes the bill drawn by borrower on his(borrower's) customer and
pay him immediately deducting some amount as discount/commission. The Bank
then presents the Bill to the borrower's customer on the due date of the Bill and
collect the total amount. If the bill is delayed, the borrower or his customer pay
the Bank a pre-determined interest depending upon the terms of transaction.
Term Loan:Term Loans are the counter parts of Fixed Deposits in the Bank. Banks lend
money in this mode when the repayment is sought to be made in fixed, predetermined installments. This type of loan is normally given to the borrowers for
acquiring long term assets i.e. assets which will benefit the borrower over a long
period (exceeding at least one year). Purchases of plant and machinery,
constructing building for factory, setting up new projects fall in this category.
Financing for purchase of automobiles, consumer durables, real estate and
creation of infra structure also falls in this category.
3- FILLING UP TO CHEQUES, DEMAND DRAFTS:A demand draft is a document that allows you to withdraw money from another person's
without needing a signature. The person that is withdrawing money will need to have
routing and account numbers, in addition to the account holder's permission. Learn how
to safely use a demand draft to easily transfer funds.
Gather the necessary information. Before a demand draft can be created and deposited, the
proper information will need to be acquired. This information will be used to fill out the demand
draft itself and will be examined by the bank when it is deposited. See the following overview of
the information that will be required:
o
o
o
If selling an item or service you will need to provide accurate details to your client about
that item or service.
You will need to obtain the account and routing numbers of the account belonging to
the person paying.
Consent by the person whose account will be debited to the transferral of funds by
demand draft, written or verbal, must be obtained. Verbal consent should be recorded,
while written consent might take the form of a faxed document with a signature and
date.
Give legally required information if selling a service or good. If you are working remotely with a
client to sell them a service or good, it is a good idea to provide the proper information about
either, as this can limit liability or promote customer relations. In addition, the financial
institution accepting a demand draft might have consumer protection requirements before
agreeing to transfer. Inform your client upfront about your sale by meeting the following
criteria:
o
o
o
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The exact price and amount of items or services being sold.
Additional information about the item or service regarding extra fees, deposits,
certifications, limitations, etc.
Any refund policy or no-refund policy.
If any prizes for purchase are being offered, the exact details must be disclosed. These
details include the chances of winning, costs of winning, or methods of entry with or
without payment.
o
Any payment plan that is similar to a “free-trial offer,” which will require the buyer to
take action to avoid future payments.
Obtain information regarding your client's bank account. You will need to acquire the
necessary pieces of information to successfully deposit the demand draft in your own bank
account. Since a demand draft doesn't require a signature, providing accurate information is
critical.
o
o
You will need to obtain both the account number and routing number of the bank
account being used to make the payment or payments.
Routing and account numbers are found at the bottom of a check. The routing number
appears first, at left, and consists of nine digits. The account number appears after the
routing number, just to the right of it.
Obtain consent. Although a demand draft doesn't require a signature, it does require some
form of consent on the part of the person having money withdrawn from their account. Either
written or spoken consent will suffice.
o
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o
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Verbal consent is acceptable; however, you will need to have a recording of the consent.
You may wish to record the entire conversation.
If making a recording of verbal consent, make sure to include the date of the
agreement, the amount being agreed upon, the name of the client, the number of
payments, a telephone number where the client can call, and the date of authorization. [
Obtaining written consent can be the safest option. However, it may take more time as
you wait for the written form of consent to arrive. Have the client write the date he
agreed, the amount he agreed to pay, his name, number of payments, telephone
number where the client can call, and the date of authorization.
Written consent may be obtained in the form of a fax signed by both parties or avoided
check sent by the client.
8.5- DOCUMENT FOR OPENING ACCOUNTS:1- KNOW YOUR CUSTOMER (KYC) :The objective of KYC guidelines is to prevent banks from being
used, intentionally or unintentionally, by criminal elements for money laundering
activities. Related procedures also enable banks to better understand their customers and
their financial dealings. This helps them manage their risks prudently. Banks usually
frame their KYC policies incorporating the following four key elements:
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Customer Policy;
Customer Identification Procedures;
Monitoring of Transactions; and
Risk management.
For the purposes of a KYC policy, a Customer/user may be defined as:
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a person or entity that maintains an account and/or has a business relationship with the
bank;
one on whose behalf the account is maintained (i.e. the beneficial owner);
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beneficiaries of transactions conducted by professional intermediaries such as
stockbrokers, Chartered Accountants, or solicitors, as permitted under the law; or
any person or entity connected with a financial transaction which can pose significant
reputational or other risks to the bank, for example, a wire transfer or issue of a highvalue demand draft as a single transaction.
2- PHOTO ID PROOF, ADDRESS PROOF
4- INDIAN CURRENCY :
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8.6
The Rupee, or more specifically the Indian Rupee (symbol: ₹; ISO code: INR) (Unicode
U+20B9) is the official currency of the Republic of India. The issuance of the currency is
controlled by the Reserve Bank of India.[2] It is named after the silver coin, rupiya, first
issued by Sultan Sher Shah Suri in the 16th century and later continued by the Mughal
Empire.
The modern rupee is theoretically subdivided into 100 paise (singular paisa), though as of
2011 only 50 paise coins are legal tender.[3][4] Banknotes in circulation come in
denominations of ₹1, ₹2, ₹5, ₹10, ₹20, ₹50, ₹100, ₹500 and ₹1000. Rupee coins are
available in denominations of ₹1, ₹2, ₹5, ₹10.
The Indian rupee symbol '₹' (officially adopted in 2010) is derived from the Devanagari
consonant (ra). The first series of coins with the rupee symbol was launched on 8 July
2011.[citation needed]
The Reserve Bank manages currency in India and derives its role in currency
management on the basis of the Reserve Bank of India Act, 1934.
BANKING SERVICE DELIVERY CHANNELS- I
1- BANK BRANCH AND ATM:A branch, banking center or financial center is a retail location where a bank,
credit union, or other financial institution (and by extension, brokerage firms) offers a
wide array of face-to-face and automated services to its customers.
ATMs are scattered throughout cities, allowing customers easier access to their accounts.
debit or credit card will be able to access most ATMs. Using a machine operated by your
bank is usually free, but accessing funds through a unit owned by a competing bank will
usually incur a small fee.
1. Debit Card
An electronic card issued by a bank which allows bank clients ...
2. Service Charge
A type of fee charged to cover services related to the primary ...
3. Activity Charge
A fee charged to cover the servicing costs of an account. An ...
Cash Card
A cash card can be any card that you can insert into an ATM or ...
4. Deposit Slip
A small written form that is sometimes used to deposit funds ...
5. Descriptive Statement
A bank statement that lists deposits, withdrawals, fees, etc. ...
2- BANK MITRA WITH MICRO ATM:Micro-ATMs are biometric authentication enabled hand-held
device. In order to make the ATMs viable at rural/semi-urban centers, low cost MicroATMs would be deployed at each of the Bank Mitra location. This would enable a person
to instantly deposit or withdraw funds regardless of the bank associated with a particular
Bank Mitra/Business Correspondent. This device will be based on a mobile phone
connection and would be made available to every Bank Mitra/Business Correspondent.
Customers would have to get their identity authenticated and withdraw or put money into
their bank accounts. This money will come from the cash drawer of the Bank
Mitra/Business Correspondent. Essentially, Bank Mitra will act as bank for the customers
and all they need to do is verify the authenticity of customer using customer's UID. The
basic transaction types to be supported by micro ATM are Deposit, Withdrawal, Fund
transfer and Balance enquiry. Micro-ATM offers one of the most promising options for
providing financial services to the unbanked population. Micro-ATMs would have
various options of authentication like biometric, PIN based etc. and it would also be used
as mobile ATMs to enable transactions near the door step of the customers. The MicroATMs offer an online interoperable, low-cost payments platform to everyone in the
country.
3- POINT OF SALE:ATM Location is point of sales.
BANKING SERVICE DELIVERY CHANNELS- II
1- INTERNET BANKING :Banking online or by phone allows you to make banking transactions such as transferring
money, paying a bill, checking your balance or setting up a regular payment on your bank
or building society’s secure website. Online banking is accessible via a computer or a
mobile phone. Also known as internet banking.
What would I use this for
You can make a range of payments: such as paying utility, tax and credit cards; bills;
make one-off payments to other individuals, small businesses or tradesmen; and make
transfers to other bank accounts or savings accounts.
How do I use it
You will need to speak to your bank to get set up to use their phone or internet banking
service. You will need the name, sort code and account details of the company/or person
you want to pay. You will also be asked to provide a reference so that the person or
company receiving the number knows what the payment is for.

Online payments
You will need to log on to your bank or building society’s internet banking service.
Although different banks will structure their websites in different ways when making a
payment you are likely to be asked to select the recipient from a list of previous payees
(or recipients) or to input a new payee’s details (and there may be additional security
checks before you can add a new recipient). You’ll then be asked to enter the amount you
want to pay, and to re-verify that the amount is correct. Your payment will be confirmed.
Phone payments
Work in a similar way to internet banking and you will need to have registered to use the
service. Your bank will have a designated phone banking number, and you will need to
answer some security questions before you can check your balance or set up or make a
payment.
2- NATIONAL ELECTRONIC FUND TRANSFER (NEFT) :National Electronic Funds Transfer (NEFT) is a nation-wide payment system
facilitating one-to-one funds transfer. Under this Scheme, individuals can electronically
transfer funds from any bank branch to any individual having an account with any other
bank branch in the country participating in the Scheme.
Use NEFT service to transfer funds anywhere using the following modes:
Internet Banking
I Mobile
3- REAL TIME GROSS SETTLEMENT (RTGS) :The full form of RTGS is "Real
Time Gross Settlement". RTGS can be defined as “as the continuous (real-time)
settlement of funds transfers individually on an order by order basis (without netting")
What do you mean by Real Time? What is the Meaning of Gross Settlement?
Here the words 'Real Time' refers to the process of instructions that are executed at the
time they are received, rather than at some later time. On the other hand "Gross
Settlement" means the settlement of funds transfer instructions occurs individually (on an
instruction by instruction basis). The settlement of funds actually takes place in the
books of RBI and thus the payments are considered as final and irrevocable.
8.7 – INSURANCE:A promise of compensation for specific potential future losses in exchange for a periodic
payment. Insurance is designed to protect the financial well-being of an individual,
company or other entity in the case of unexpected loss. Some forms of insurance are
required by law, while others are optional. Agreeing to the terms of an insurance policy
creates a contract between the insured and the insurer. In exchange for payments from the
insured (called premiums), the insurer agrees to pay the policy holder a sum of money
upon the occurrence of a specific event.
In most cases, the policy holder pays part of the loss (called the deductible), and the
insurer pays the rest. Examples include car insurance, health insurance, disability
insurance, life insurance, and business insurance.
LIFE INSURANCE AND NON- LIFE INSURANCE:Life insurance is an insurance cover
that gives out a certain amount to the insured or their nominated beneficiaries upon a
certain event such as death of the individual who is insured. For our convenience and
better understanding it won’t be wrong to state that Life Insurance is related to a human
life. It’s basically a long term investment and requires periodic payments, either monthly
or quarterly or annually. The risks that are covered by Life Insurance include – premature
death, income during retirement, illness. The main products for the same consists of –
whole life, endowment, term, medical and health, life annuity plan.
Now, we move on to Non-Life Insurance which is covers things apart from the things
covered in Life Insurance. It is basically an insurance policy to protect an individual
against losses and damages other than those covered by Life insurance. The coverage
period for most non-life insurance policies and plans is usually one year, whereby
premiums are normally paid on a one time basis. The risks that are covered by non-life
insurance is property loss (stolen car or burnt house), liability arising from damage
caused by an individual to a third party, accidental death or injury. The main products of
non-life insurance includes – motor insurance, fire/house owners/householders insurance,
personal accident insurance, medical and health insurance and travel insurance.
8.8- VARIOUS SCHEMES IN INDIA:1- PRADHAN MANTRI JAN DHAN YOJANA (PMJDY):The Pradhan Mantri Jan Dhan
Yojana or more popularly known as PMJDY scheme is planning on revolutionizing the
traditional banking system in India by providing the banking opportunity and insurance
coverage to all including the poor. It is an initiative taken by the Prime Minister Narendra
Modi who started this ambitious project to help the poor become more financially
confident through this venture and allowing every citizen the right to have their own bank
account and insurance coverage which was previously impossible for most of the
population under poverty.
The purpose of this scheme will definitely benefit the overall economy of the country and
the scheme provides some lucrative benefits which should certainly be availed and
considered. Here is listed some important benefits of the Pradhan Mantri Jan Dhan Yojna
(PMJDY) scheme which would certainly inspire the country to a more prosperous future
for all.
Life insurance under Pradhan Mantri Jan Dhan Yojana
Under the PMJDY scheme the account holders will be given worth Rs.30000 insurance
coverage if they comply with certain specification of the scheme which includes opening
an account by January 26, 2015 and having an accidental insurance coverage of over Rs.
200000.
Loan benefits under Pradhan Mantri Jan Dhan Yojana
The account holder can take loan benefit of up to Rs.5000 from the bank after six months
from opening the account. Though the amount might seem insignificant for many but we
have to realize the scheme is directed mostly towards people below the poverty line and
who are struggling desperately to sustain their everyday living. The loan benefit can be a
scintilla of hope for those people who could utilize the loan amount and invest it in a
more profitable outcome, particularly in farming or other agricultural prospect.
Mobile banking facilities under Pradhan Mantri Jan Dhan Yojana
Though the technology of using smart phones to conduct our bank transactions is not
novel anymore but the PMJDY scheme will allow its account holders to avail the same
facilities of checking balance and transferring funds through a normal cell phone which is
more affordable to the general economy.
Hence PM Jan Dhan Yojana is indeed a prosperous venture and we certainly hope the
Prime Minister and the mass economy are both benefited through this new venture.
8.9- SOCIAL SECURITY SCHEMES:1- PRADHAN MANTRI SURAKSHA BIMA YOJANA (PMSBY):Insurance is not a newer concept to
India; however, its reach is still much limited. In spite of so many insurance companies
operating in India with their products and services, there are a majority of people in rural
areas, who are not at all covered under any kind of insurance. Pradhan Mantri Suraksha
Bima Yojana is for them.
These people are those who are mostly below the poverty line and insurance is an
unaffordable service for them. PMSBY aims to reach such people with its benefited
insurance schemes after the successful performance of Jan Dhan Yojana.
Suraksha Bima Yojana Benefits
The death benefits are up to 2 lakhs In case of irrecoverable and total loss of both hands,
both eyes or sight or one leg or foot, the insurance cover would be up to 2 lakh
In case of lost of one leg, hand, foot, eye or sight, the sum assured would be Rs 1 lakh
2- PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA (PMJJBY):One such scheme recently launched
is Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), that offers a renewable life
insurance cover of Rs 2 lakh with just a mere premium of Rs 330. Any Indian resident
within the age group of 18 to 50 years is eligible to avail the scheme, provided he or she
has a saving bank account with which the scheme would be attached.
3- ATAL PENSION YOJANA (APY) :Named after the ex-prime minister of India, Atal Bihari
Vajpayee, Atal Pension Yojana also known as APY Scheme was launched in
continuation to the Jan Dhan Yojana Scheme to bring those employed in rural and
unorganized sector under the ambit of Pension Schemes. The idea of the scheme is to
provide a definite pension to all Indians.
However, in order to get pension during your old age, you need to contribute
accordingly. The more you can contribute the more pensions you would get during old
age. The scheme is backed by Ministry of Finance, Government of India. The scheme
would mostly touch those working under unorganized sector.
Named after the ex-prime minister of India, Atal Bihari Vajpayee, Atal Pension Yojana
also known as APY Scheme was launched in continuation to the Jan Dhan Yojana
Scheme to bring those employed in rural and unorganized sector under the ambit of
Pension Schemes. The idea of the scheme is to provide a definite pension to all Indians.
However, in order to get pension during your old age, you need to contribute
accordingly. The more you can contribute the more pensions you would get during old
age. The scheme is backed by Ministry of Finance, Government of India. The scheme
would mostly touch those working under unorganized sector.
4- PRADHAN MANTRI MUDRA YOJANA (PMMY) :Population engaged in small businesses always
requires micro finance to facilitate their business and day to day business needs. PM
Mudra Bank Yojana would help in facilitating micro credit up to Rs 10 lakh to such small
business owners. PM Mudra Bank already has a corpus of more than Rs 70,000 CR and
this amount would help in increasing the overall output and creating newer jobs.
8.9 – NATIONAL PENSION SCHEME:NPS is an easily accessible, low cost, tax
efficient, flexible and portable retirement savings account. Under the NPS, the individual
contributes to his retirement account and also his employer can also co contribute for the
social security/welfare of the individual.
NPS is designed on Defined contribution basis wherein the subscriber contributes
to his account, there is no defined benefit that would be available at the time of exit from
the system and the accumulated wealth depends on the contributions made and the
income generated from investment of such wealth.
The greater the value of the contributions made, the greater the investments achieved, the
longer the term over which the fund accumulates and
the lower the charges deducted, the
larger would be the eventual benefit of the accumulated pension wealth likely to be.
Who can Join NPS?
Any citizen of India, whether resident or non resident, subject to the following
conditions:
Individuals who are aged between 18 –60 years as on the date of submission of his/her
application to the POP/ POP SP. The citizens can join NPS either as individual uals or as
an
Employee -employer group(s) (corporate) subject to submission of all required
information and Know your customer (KYC) documentation. After attaining 60 years of
age, you will not be permitted to make further contributions to the NPS accounts.
PUBLIC PROVIDENT FUND (PPF) SCHEME:The Public Provident Fund (PPF) Scheme,
1968 is a tax-free savings avenue that was introduced by the Ministry of Finance (MoF)
in India in the year 1968. Interest earned on deposits in the PPF account are not taxable.
Deposits made towards PPF accounts can be claimed as tax deductions. This makes the
PPF Scheme one of the most tax efficient instruments in India. It was launched to
encourage savings among Indians in general, especially to encourage them to create a
retirement corpus.
Public Provident Fund (PPF) Accounts People can deposit funds in PPF accounts (Public
Provident Fund accounts) for a fixed period of time to earn returns on their savings. The
current PPF interest ratethe financial year 2015 - 2016 is 8.7% p.a. Since this scheme was
launched to encourage savings across income classes, minimum deposit requirements are
very low and affordable. They are also tax-free accounts, easily accessible, safe (being
backed by the government) and simple to understand, making them a popular investment
avenue for a large majority of individuals in India.
PPF accounts can be opened at any nationalized, authorized bank and authorized
branches / post offices. PPF accounts can be opened at specific private banks as well.
These accounts can be opened by filling out the required forms, submitting the relevant
documents and depositing the minimum pay-in at such branches/offices that have been
authorised for the same. Interest rates are set and announced by the government of India.
Interest is calculated for a financial year according to the rate announced for the said year
i.e. unlike bank FDs the rates are not fixed for the entire tenure of the holding. The
maximum amount that can be deposited in the account is also subject to change.
The period from April 1st - March 31st i.e. a financial year is considered to be a deposit
year for a PPF account. E.g. for an account opened in November 2010 - 2011, Year 1 will
be April 1st 2011 - March 31st 2012.
8.10- BANK ON YOUR MOBILE :1- MOBILE BANKING:Mobile banking is a service provided by a bank or other financial institution that
allows its customers to conduct a range of financial transactions remotely using a mobile
device such as a mobile phone or tablet, and using software, usually called an app,
provided by the financial institution for the purpose. Mobile banking is usually available
on a 24-hour basis. Some financial institutions have restrictions on which accounts may
be accessed through mobile banking, as well as a limit on the amount that can be
transacted.
The types of financial transactions which a customer may transact through mobile
banking include obtaining account balances and list of latest transactions, electronic bill
payments, and funds transfers between a customer's or another's accounts. Some also
enable copies of statements to be downloaded and sometimes printed at the customer's
premises; and some banks charge a fee for mailing hardcopies of bank statements.
2- MOBILE WALLETS:Mobile wallets are essentially digital versions of traditional wallets that someone
would carry in their pocket. While there are many variations, usually they can hold
digital information about credit and debit cards for making payments, store coupons
and loyalty programs, specific information about personal identity and more.
Many companies are jumping into the mobile payments space— on both the paying
and receiving sides of the transaction—and new innovators are continuously changing
the industry. In the U.S., they include companies such as Google, Amazon, PayPal,
Square, and Apple. Internationally, still more companies are developing and
launching new technologies in this space.
How does a mobile wallet work?
A customer can utilize all of their stored information simply by opening an app on
their phone, entering in a PIN, password or fingerprint and then selecting the
information they need to access. The app then utilizes information transfer technology
such as Near-Field Communications (NFC) to interact with a mobile wallet ready
payment terminals.
Mobile wallets store your credit or debit card securely.
They may also store your loyalty cards, coupons, tickets, etc.
They communicate with terminals using a variety of technologies.
That's where you come in as a small business owner. Without a device that receives
mobile wallet information, you won't be able to take advantage of this increasingly
popular payment mechanism.
8.11- SUMMARYTHANKS FOR USE IT.
(L.B. COMPUTER CENTRE SAMITI TEAM)