Flame Newsletter – June 04, 2014


"Good governance is at the core of improving the delivery of public services. Good governance provides a mechanism for linking inclusion, decision making, and accountability"Dr KC Chakrabarty, Deputy Governor, RBI


Importance of life insurance for NRIs

Indians have spread to virtually every corner of the globe and have made their mark in the chosen line of business or profession. As an Indian living abroad, it definitely makes good financial sense to connect with the roots of your lineage and make wise investments back at home, especially when the country is in a developing phase.

Whether you are pursuing a dream job abroad and at some point wish to settle back in India post retirement, or if you have ageing parents living on their own in India and are dependent on you for financial support, it is prudent to take calibrated financial decisions, especially at a time when uncertain economic conditions are prevailing in the more developed countries. It is also imperative to provide for long term security and achieve financial goals for you and your dependents. India is one of the fastest growing economies in the world and various economic estimates and research reports peg India’s growth around 6% – 7% annually. This is significantly higher as compared to other economies in the developed world where there is either nominal or no growth. This makes India an attractive investment destination for NRI’s. Also, given the prevailing interest rate regime in India, an NRI will earn a lot more on his bank deposits in India as compared to his country of residence. This also makes a compelling argument for the NRI to park his money in bank deposits in India... Read more

The A-Z syndrome of NRI taxation

An Indian living abroad is generally being considered as an NRI (non-resident Indian) and it has also been defined under two broader ways—First being under FEMA (Foreign Exchange Management Act) and second being under the Income Tax Act, 1961.

As per FEMA, the day a person leaves India to stay outside for an uncertain period for whatever purpose whether the same is for taking up an employment, carrying out business or vocation; the person is considered as an NRI.

In contrast to the FEMA, as per the Income Tax Act, 1961; the person is defined as an NRI according to the number of days being spent abroad. Therefore, if the person satisfies both the conditions given below, he will be considered as an NRI:

  1. An individual is not in India for 182 days or more during the previous year
  2. An individual is not in India for 60 days or more during the previous year and he is not in India for 365 days or more during the four years prior to the previous year...Read more


What is an IPO green shoe option?

Most of us who invest in stocks of a company know what is an IPO (initial public offering). An IPO is the first sale of a stock or share by a company to the public. Companies offering an IPO are sometimes new, young companies, or companies which have been around for many years and have finally decided to go public.

Before investing in an IPO, we go through the offer document of the company to know more about it. A listed company is legally bound to abide by commitments made in the document. Besides providing information about the company's competitive strengths, industry regulation, corporate structure, main objects, subsidiary details, risk factors, etc, the offer document also mentions a technical word called “Green shoe option”... Read more


Price sensitive information: Information that, if made public, would be likely to have a significant effect on the price of a company’s securities. Such information must, in connection with a listed company, be released to the market in a fashion that is fair to all investors. Any person who uses price sensitive information to make a profit either for themselves or a third party in the shares of a company is in breach of insider trading laws.


RBI slashes SLR...keeps policy rates unchanged

RBI cuts SLR by 50 bps

RBI cuts SLR…but what is SLR?


FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India’s spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation’s economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL’s FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

Our objective is to light a FLAME, as the name suggests, which will set ablaze a chain of FLAMEs across the country. The new-found light of knowledge will undoubtedly dispel the dark clouds of financial illiteracy and ensure the bright sunshine of financial growth and prosperity.

This portal is but one of the various IIFL initiatives that would be part of FLAME.

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