Under direction of RBI that from 1st April 2016 the clearing of cheques would be done on the same day

Under direction of RBI that from 1st April 2016 the clearing of cheques would be done on the same day in house where cheque is deposited i.e. with any Bank whether Nationalised & co - operative etc. and while screening if there is insufficiency of fund the bounced chq cannot be represented again & payee if need be will have to file legal complaint under section 138 System will change
Take care of cheques issued
1- ECS will be replaced with NACH from 01/04/2016.
2- Kindly ensure that all ECS payment to be made through till 31/03/2016.
3- NACH stands for National Automated Clearing House.
About NACH-
National Payments Corporation of India (NPCI) has implemented “National Automated Clearing House (NACH)” for Banks, Financial Institutions, Corporates and Government a web based solution to facilitate interbank, high volume, electronic transactions which are repetitive and periodic in nature. NACH System can be used for making bulk transactions towards distribution of subsidies, dividends, interest, salary, pension etc. and also for bulk transactions towards collection of payments pertaining to telephone, electricity, water, loans, investments in mutual funds, insurance premium etc.
National Automated Clearing House (NACH) is a centralised system, launched with an aim to consolidate multiple ECS systems running across the country and provides a framework for the harmonization of standard & practices and removes local barriers/inhibitors. NACH system will provide a national footprint and is expected to cover the entire core banking enabled bank branches spread across the geography of the country irrespective of the location of the bank branch.
With the implementation of NACH system, NPCI intends to provide a single set of rules (operating and business), open standards and best industry practices for electronic transactions which are common across all the Participants, Service Providers and Users etc. NACH system also supports Financial Inclusion measures initiated by Government, Government Agencies and Banks by providing support to Aadhaar based transactions.
The NACH system facilitates the member banks to design their own products and also addresses specific needs of the banks & corporates including a refined Mandate Management System (MMS) and an online Dispute Management System (DMS) coupled with strong information exchange and customised MIS capabilities.
The NACH system provides a robust, secure and scalable platform to the participants with both transaction and file based transaction processing capabilities. It has best in class security features, cost efficiency & payment performance (STP) coupled with multi-level data validation facility accessible to all participants across the country.
NACH’s Aadhaar Payment Bridge (APB) System, developed by NPCI has been helping the Government and Government Agencies in making the Direct Benefit Transfer scheme a success. APB System has been successfully channelizing the Government subsidies and benefits to the intended beneficiaries using the Aadhaar numbers. The APB System links the Government Departments and their sponsor banks on one side and beneficiary banks and beneficiary on the other hand.

govt cuts small savings schemes interest rate


vinay mohanty

Budget 2016: Lower TDS for life insurance proceeds

Budget 2016: Lower TDS for life insurance proceeds 

MUMBAI: Finance Minister Arun Jaitley did not announce big-ticket proposals for the life insurance sector, but he did dole out some minor tax reliefs. 

The rate of tax deducted at source (TDS) on life insurance policies where maturity proceeds are taxable has been halved from 2% to 1%. Under section 194DA, TDS is applicable on all taxable payments made to them if the total amount exceeds Rs 1 lakh. "The move will lower the TDS burden of some policyholders," said Vaibhav Sankla, direct .. 



Organised crime in the insurance sectar all time high

Organised crime in the insurance industry with respect to fraudulent claims being filed, impersonating other people for claims and cause of death being changed for accidental death claims has reached an all time high.
With about 300 organised gangs operating in this space, tougher underwriting norms are being adopted.
Gangs have been operational in the insurance space for a long time. However, now their activities are getting murkier and they have begun to cause physical harm to investigating officers at time of death claim.
Now a days, often body guards are being sent with these officers, so that they are not threatened to word their report in a particular way. In some cases, even officer was kidnapped so that the report is not sent.
Now with the Insurance Act not allowing any claim rejection after three years of the policy term, even fraudulent claims or those where facts have been mis-stated would have to be passed. Insurers have sought five-year period beyond which claim rejections could be disallowed.
Often, these gangs tie-up with former insurance sector employees to understand how the process exactly works. In some cases of health insurance, even hospitals collaborate to bring out exaggerated bills for the insurance companies. Sometimes the claim amount for the mentioned ailment is seen to be higher than the usual amount due to which investigations are carried out by insurers.
There are several organized persons who take fake insurance either on the name of people who do not exist or on dead persons. Now since no claim can be rejected after three years insurers are expected to face major losses.
There are several cartels operating in this space that take up policies and make fraudulent claims. They are said to remove all evidence so that a claim is not rejected for fraud. Some of them even apply for a policy during the end of a quarter at the last hour so that the official in-charge simply accepts the proposal.
With law getting stringent on claim rejection, insurers are using analytics and also tougher underwriting to deal with this matter. For instance, credit information company Experian India has launched Hunter Fraud Management Services for the life insurance sector.
The offering will help life insurance companies to be a part of the Hunter Closed User Group (CUG) for detection of life insurance frauds.
This repository could help in reducing premium rates as insurers need not buffer for such losses, improving operational efficiency and bottom line of insurers and in keeping bad elements out of the system.
Data from life insurers show that there is at least a rise of 20% year-on-year in fraudulent claims, including claims in the name of non-existent people. With new system coming in place, these fraudsters would not be given insurance policies.

Govt General Insurance Companies now on Sale

More Insurance Agents To Come Under TDS Ambit

Union budget 2016-17 has not been kind to insurance agents. One Finance Minister Arun Jaitley has not announced any tax saving deduction that they can use as their next sales pitch. Secondly, he has proposed to reduce the threshold for deduction of income tax at source on commission earned.
Now section, 194D provides for deduction of income tax at source at the rate of 5% if the annual commission exceeds Rs 20,000. The budget has proposed to reduce this threshold to Rs 15,000. This means that more insurance agents would get covered under the TDS provision.