What is MUDRA Loan?

Many ask, what is a MUDRA loan?

MUDRA stands for Micro Units Development and Refinance Agency Ltd.

It is a Non-Bank Financial Companies (NBFC). It is not a direct lending institution.

MUDRA does a refinance support to Micro Finance Institutions (MFI), NBFC and Banks for lending to Micro units having loan requirement upto Rs.10 Lakhs, under the aegis of Pradhan Mantri Mudra Yojana (PMMY).

Who are all eligible?

Any individual including women, proprietary concern, partnership firm, private limited company or any other entity are eligible applicant under PMMY loans, whose loan requirement is up to Rs.10 lakh.

Any Indian Citizen who has a business plan for a non-farm income generating activity such as manufacturing, processing, trading or service sector whose credit need is up to  10 lakh can approach either a Bank, MFI or NBFC for availing of MUDRA loans under PMMY. The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY. The lending rates are as per the RBI guidelines issued in this regard from time to time.

What are the types of MUDRA loans?

MUDRA loans are available in three categories. 

   SHISHU : upto  Rs. 50,000

   KISHOR : Rs.   50,000 - Rs.  5,00,000

   TARUN  :  Rs.5,00,000 - Rs.10,00,000

Depending on the nature of business and project requirement you can access finance from one of the intermediaries of MUDRA as per the norms.

What are the requirements?

The requirements are decided by the respective banks, NBFCs based on their internal guidelines and policies.

• Generally IT returns are not insisted for small value loans.
• KYC is mandated
• Loan amount and repayment terms will be decided by the anticipated cash flow from the business activity.

Please note:

MUDRA is a refinancing Institution. MUDRA does not lend directly to the micro entrepreneurs / individuals. Mudra loans under Pradhan Mantri Mudra Yojana (PMMY) can be availed of from nearby branch office of a bank, NBFC, MFIs etc. Borrowers can also now file online application for MUDRA loans on Udyamimitra portal (www.udyamimitra.in). Currently, the site is under construction. Please check back.

CLICK HERE to know more about MUDRA

Continue Reading...

UNLOCK - 1 : Release in phases of lockdown in India

Today the Ministry of Home Affairs announced vide their order No.40-3/2020-DM-I(A) dated 30-May-2020, relaxed further the lockdown to cover only few areas. This unlocking will and guidelines will remain in force upto 30-Jun-2020.

What this UNLOCK-1 (phased re-opening) mean?

Phase 1

Following will be allowed to operate with effect from 8-Jun-2020 for which the Ministry of Health and Family Welfare (MoHFW) will issue a Standard Operating Procedure (SOP) soon

1. Hotels, restaurants and other hospitality services
2. Shopping malls
3. Religious places and places of worship for public 

Phase 2

After consultations with States Govts and Union Territories will decide on the re-opening of Schools, colleges, educational / training / coaching institutions 

Phase 3

After assessing the situation, the dates for re-starting the following activities will be announced/decided:

1. International Air travel of passengers, except as permitted by MHA
2. Cinema Halls, Gyms, Swimming pools, entertainment parks, bars, theaters, auditoriums, assembly halls and similar places.
3. Social/political/sports/entertainment/academic/cultural/religious functions and other large congregations
4. Metro rail

Few things to be noted:

Night Curfew : movement of individual STRICTLY PROHIBITED THROUGHOUT THE COUNTRY between 9:00pm and 5:00am [Exception : Essential activities]

Containment Zones : Lockdown will continue till 30-Jun-2020

Inter-State or Intra-State movement of persons and goods : No restrictions on movement or e-pass required. However, if a State or UT after assessing the situation can, after giving wide publicity place restrictions and the procedures to be followed.

Vulnerable persons to be protected: Persons above 65 years, pregnant woman, persons with co-morbidities and children less than 10 years to remain at home. Exceptions: Essential and health purposes. 

NATIONAL DIRECTIVES FOR COVID19 MANANGEMENT

1. Mask covering face and mouth in public, work places and during transport.
2. Gathering : prohibited. 
• Marriage related:  Max 50
• Funeral related  :  Max 20
3. Spitting, consumption of liqor, paan, gutka, tobacco in public places prohibited.
4. Social distancing in public places - 6 feet
5. Work places:
• Work from home - to the extent possible
• Staggering or work/business hours will be followed
• Thermal scanning, handwash/sanitizer to be made available at entry,  exit points and common areas
• Frequent sanitizing of entire workplace and common facilities
• Social distancing between workers

For full notification CLICK HERE

Continue Reading...

RBI measures announced today

RBI Governor held a press conference briefing today (22 May 2020) announcing certain monetary easing measures including extending the moratorium period by another 3 months till 31-Aug-2020.  

An unscheduled meeting of the Monetary Policy Committee (MPC) voted 5:1 to cut the repo rate by 40 bps (basis points) to 4.00%. It is an an emergency cut in the policy repo rate. You can see how the repo rates moved over the last 10 years. We are nearing almost where we were in 2009.

Accordingly, the reverse repo rate now stands at 3.35%. The lowest reverse repo rate in the last 15 years was in Apr 2009, when it was 3.25%.

What are these repo rate and reverse repo rate? To know more about it and on CRR, LAF, please CLICK HERE.

The Marginal Standing Facility (MSF) rate is down to 4.25%

What is MSF? It is a facility given to the banks to borrow money from the RBI by pledging the government securities at a rate which is higher than the repo rate. This the banks borrow when the inter bank liquidity dries up.

Measures to ease financial stress:

• Extension of moratoriums by additional 3 months from June 1, 2020 till August 31, 2020 - i.e  6 months moratorium
• Permit lending institutions to convert the accumulated interest on working capital facilities over the total deferment period of 6 months (i.e. March 1, 2020 up to August 31, 2020) into a funded interest term loan which shall be fully repaid during the course of the current financial year, ending March 31, 2021.
• Easing of Working Capital Financing – In respect of working capital facilities, lending institutions may recalculate drawing power by reducing margins till the extended period, i.e. August 31, 2020 and by reassessing the working capital for the borrowers upto an extended period till March 31, 2021. Any changes in credit terms will not result in asset classification downgrade.

Measures to support Exports and Imports:

• Export – RBI has decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from the existing one year to 15 months, for disbursements made upto July 31, 2020.
• Extension of time for payment of Imports – RBI has decided to extend the time period for completion of remittances against normal imports into India from 6 months to 12 months from the date of shipment for such imports made on or before July 31, 2020. The measure will provide greater flexibility to importers in managing in their operating cycles in a Covid-19 environment.

Due to this pandemic situation, the GDP is expected to be remain in a negative zone.

Continue Reading...

The moral of the story is.....DO NOT IGNORE TEETHING PROBLEM !

This posting is part of the COLGATE's - MY HEALTHY SPEAK Blog Contest

Teething problem - You can hear this everywhere when someone starts something new. What "teeth" has got to do with this? Why they use this term in any project?

A child while getting the initial teeth set will get pain and suffer. Same way, any initial pains/challenges during the project is termed as Teething Problem.

Teeth are very important from a beauty, pronunciation and health perspective. Without teeth you cannot bite the food and cut to pieces or grind them to have a good digestion.

Who guards the teeth? The mouth covering from outside. But the gums are the one which holds them in good position and safeguards the roots.

It is our primary duty to keep our gums and teeth properly guarded. Else, we will be loosing our beauty, speech, health. Do you know? tooth decay can lead to heart disease, diabetes etc.,

There are links between periodontal disease and a number of other problems, including:

• Heart disease
• Diabetes
• Dementia
• Rheumatoid arthritis
• Premature birth

What's behind the links? Experts can't say for certain, but they believe that oral bacteria can escape into the bloodstream and injure major organs.

Such is the danger of infected gums..Gingivitis, plague can ruin your health and may lead to fatal death, if unattended.

Preserve your gum, do not ignore the bleeding in the gum. It may be an indication. Consult your dentist. Use good fluoride based paste. 

Some dental tips:

• Avoid sweets. If you take, brush immediately.
• Do not ignore bleeding in the gums.
• Use mouthwash (if possible brush) after meals
• Brush in the morning and before going to bed.
• Have regular check up done with your dentist.

Teeth are not only useful for us, but also for animals, reptiles etc., Once there was a snake in a village and it hiss and bite the passer-by. The villagers decided to get rid of the snake. But snake is regarded as a holy reptile. So, the decided to take it teeth out. After taking the teeth the snake never came out to trouble the villagers. So, kids started throwing stones at the snake and it was hurt and weak. Once a sage passed by the snake and the snake requested the sage to save the life. The sage said, since your teeth are gone, you cannot bite anyone and  pass on the poison. But you can hiss and chase them out. From that day the snake started hissing and chased people out, when they come near to hurt. It realized the importance of teeth that day!

God has given us beautiful set of teeth and let us preserve it. The moral of the story is.......decide quickly, which one?

Continue Reading...

10 ways to save your hard earned money

10 ways to save money from your monthly expenses at this inflationary situation:

1. Credit Card / Personal Loan

Do not use credit card without knowing your repaying capacity. You will be surprised when you see the Interest & other charges when you default a payment or pay only the Minimum Amount Due.
Some credit card companies attract people by offering Interest free EMI. This is a catch. They will charge an one-time, upfront service charge, which is almost translate into your interest cost.

If you have personal loans and have some surplus cash, better part close the personal loans.

3. Plan your time. It has a cost

Do car pooling. It saves money for you and for nation.

For short distance & traveling alone - use two-wheeler (of course, wear helmet)

If you plan to go to place and have time - look for Public Transportation If you have no time, take an auto-rick and give a thought to taxi finally.

Plan ahead and book a train / Bus for an overnight journey. If not, you will end up driving or flying.Plan your flight trip well ahead, so that you can get a better deal in the net.

Plan your travel time. Less traffic means fuel efficiency & less stress.

Fill fuel early morning (before 7am). Once the heat sets in, the petrol expands and you get less for the money you pay.

4. Communication

Nowadays, the communication cost has come down. It is psychological that when you know something is cheap, you dont mind spending and end up more. So, use your mobile & landline diligently for long distance (Domestic & International).

Look at other avenues like Chat, Skype, etc., Few of them have video facility too. Above all, they are free.

5. Electricity

This is what I have done in my home.

Take bath at a particular time - This will improve the Geyser usage. This is the main contributor for the bill. If possible and you are used to - take cold water bath. Good for health & purse.

Switch off lights & fans when not required - This is religiously done by my family members.

Use CFL bulbs.

Accumulate your clothes for ironing and do it once or twice a week, depending on the requirement. This will save your time and also power.

6. Cooking cost

Eat together - this will reduce the separate heating cost and good for family to have food together.

Prepare yourself with the vegetables before cooking. Buy vegetables, which has good shelf life once a week and use them. This will reduce your trip to the stores. Do not waste food.

7. Water

For those in apartments & individual houses, water cost is a nightmare. So, use the water diligently. We use the recycled water (from the water purifier) for plants.

Use bucket for bathing than using Shower.

Don't keep the water running while washing vessels/clothes, brushing teeth,shaving etc.,

Take water from home in a pet bottle. It is good for health and also on your purse.

8. Entertainment, shopping & malls

When we crib about increasing cost, we do not want to restrict ourselves from spending. Look at possibility of reducing the number of visits to multiplex. There are cinema theatres still, which is airconditioned,with DTS effect. Only thing that will be missing is the luxury chairs. Remember, we are going to be there only for 2-3 hours. Why spend money when you have plethora of channels for entertainment.

If possible, avoid visiting malls. The offers will attract you and you may end up buying, which you may not really need it, since there is an offer. It is better to keep the credit card at home when you go there.

9. Exercise regularly

Keep your body fit and in good condition. The medical cost itself will kill you. It is better not to fall sick nowadays. Exercise regularly, have a good eating habit. Take a medical insurance, if you do not have one. Look for some stores, which offer discounts on medicines & other items sold by them (example: MedPlus).

10.Monthly budget

Prepare a monthly budget and spend some time in monitoring your expenses against the budget. It will work and is working for me. If you have any annual payouts like Investment for tax savings (PPF, LIC Premium, etc.,), annual fee for the kids, start a Recurring deposit with a bank and make sure the amount is made available for your use.

Plan and spend for essentials & necessities. Avoid luxury and nice to haves.

Good Luck,

Cheers

Gopal

Continue Reading...

Tax to be deducted at source when an immovable property is transferred

With the economy not showing up any sign of recovery, scams, polls around the corner, the Finance Minister decided to mop up the tax collection by introducing a Tax Deduction at Source (TDS) from transfer of immovable property.

Why this measure? In our country, the real estate business lacks transparency and most of the deals are done through cash. Thus lot of black money being created in the process.

What this new measure says?

• This takes effect from 1-Jun-2013.
• In a transaction of immovable property transfer valuing Rs.50 Lakhs (Rs.5 million) or more, the buyer has to withhold (deduct) 1% of the value and remit to the tax department.
• The transfer of agricultural lands is exempted from the above
• The rate of deduction can go to 20% if the PAN is not provided by the seller. If PAN is provided, the deduction will be at 1%.
• When to deduct?
• at the time of making any payment or crediting of any sum as consideration for transfer of immovable property.
• What are the compliance?
• One single page simple challan for the payment containing details (mainly PAN) of the transferee and transferor and the some details about the property.
• The transferee need to required to obtain any Tax Deduction and Collection no. (TAN).
• The transferor can get credit of the amount deducted based on the TDS Challan provided by the transferee.
• What are the contents of the one page challan?
• Permanent Account No. (PAN) of Transferor (Payee/Seller)
• Category of PAN of Transferee
• Category of PAN of Transferor
• Full Name of the Transferee
• Full Name of the Transferor
• Complete Address of the Transferee
• Complete Address of the Transferor
• Complete Address of the Property Transferred
• Details of amount paid/Credited
• Tax Deposit Details

With real estate companies are lobbying to roll back this provision, this will also increase the compliance and claiming of the amount so deducted. Let us wait and see.

Cheers

Gopal

Continue Reading...