Archive for September 14th, 2009

Indian Corporates Pitched For a Cut in Interest Rates :)

Softer Interest Rate Regime

Stating that it was essential to maintain the growth momentum, India Inc described 6.8% rise in July industrial output as “evidence of recovery and pitched for a cut in interest rate.


However, although performance in July has been lower than the previous month, vigorous increase in mining and manufacturing has kept up the level of industrial growth at a reasonable level of 6.8%.


Additionally, it is said that the industrial economy is passing through a very important stage and FICCI has as a result advocated the need for a softer interest rate regime to assist the overall growth process and promote investments.


“Although performance in July has been somewhat lower than the previous month…nevertheless robust growth in mining and manufacturing have kept up the level of industrial growth at a reasonable level of 6.8 per cent,” Ficci Secretary General Amit Mitra said in a statement.


On the other hand, the RBI had cut reverse repo and repo rate by 25 basis points each in April whereas in June, the factory production was revised to 8.2% against 7.8% anticipated provisionally.

Moreover, Assocham stated that in future, the force of stimulus packages would also add on to the revival and India could move on to a close to 6.5% of GDP in the present financial year.


Note : For More latest Industry,Market and Economy Updates Click Here

ULIPs Lock-In Period Raised from 3 to 5 Years !


Insurance regulator IRDA stated that it would raise the lock-in period from 3 to 5 years, in a bid to check mis-selling of Unit Linked Insurance Policies (ULIPs) where ULIPs are investment cum insurance products, which invest in equity and debt market depending on the choice of the policyholders.


However, the circular in this matter is expected to be issued in the next 10 days while the new norm would be applicable to all the ULIPs filed on or after October 1.


Moreover, at present, the minimum tenure for ULIPs is 5 years while partial withdrawal is allowed after 3 years.

A longer lock in period for ULIPs, one of the hottest investment products, is meant to promote long term investments.

The move would reduce early lapsation and would benefit the companies since administrative and marketing cost will be recovered.


But insurers apprehend that retail investors could divert their money into mutual funds.


In addition, last month, the regulator had directed all life insurance companies not to impose surrender charge for policies surrendered from the fifth policy year.

A few weeks back, IRDA had put a cap on charges for Ulip plans.