Keep your financial details out of hackers' reach

Banks are constantly upgrading the security aspects of internet banking, still online frauds are on the rise. Phishing, cloning of cards, hacking of passwords are the growing menaces in the online banking space. According to Norton Cybercrime Report 2011, globally 431 million adults experienced some form of cybercrime in 2011 with over a million falling victim every day

As per the report, India is fast emerging as a soft target for organised cybercrime as four out of five online adults have been victim of identity theft in 2011. Banks have been recommending several precautions while transacting online, but the real problem lies elsewhere.

This relatively new trend is the result of internet's influence on easy information access, the report highlights. In other words, it is the availability of personal data on social networking platforms, responding to online surveys, use of pirated software etc. which are feeding the phishing attacks.

"An additional authentication for online transactions may ask for mother's maiden name. Today it is not difficult to get this information as people happily share personal information on social networking websites, online and offline surveys etc.

There is a plethora of options through which hackers or fraudsters can seek such data," says Ian Craig, managing director, CPP India.


USE PERSONAL INFORMATION SPARINGLY ON SOCIAL NETWORKS


Today, you cannot just disconnect from your old-time school friends or childhood buddies. Just be selective about the information you share on such portals. The idea is to use key pieces of personal information, such as PAN or driving licence number or family details, for impersonation.

"This information can be used to obtain credit/loans, merchandise and services in the name of the victim, or to provide the thief with false credentials," says Craig. Alternatively, you can change the privacy settings of your profile in such a way that only a limited set of people have access to your personal information.


BEWARE OF PIRATED SOFTWARE

Pirated software can play a spoilsport if they are injected with malicious codes (malwares) or viruses specifically meant to dynamically alter contents of the visited pages or user input fields, e.g. a net banking page asking additional fields such as credit/debit card number, ATM PIN, CVV details on a login page, which is never asked by any bank.

"The biggest risk in using pirated software is that there is no security upgrades available for them. This leads to the software becoming vulnerable, which can be exploited by the latest Trojans.

These Trojans can then steal customer information from the PC and transmit it to a fraudster," says Sanjeev Patel, executive VP and head direct banking channels, HDFC Bank.

Some counterfeit software might inject key loggers, bots, spywares which collect all the login credentials with keystroke entries or search locally for any password related files and send it to the fraudsters. The worst scenario is when you have downloaded the counterfeit software that may be infected with viruses that will damage your hard drive or cripple your network

Bankers maintain that there is a huge possibility of such computers to have key logging software. That may compromise the overall quality of online banking.

There are software programs - Spyware and Trojan- designed to capture key strokes on a keypad. They have the ability to install key stroke loggers, and collect and report consumer's personal information to unwanted parties. These software make way to a system through some free downloads and easily break the firewalls if the software is pirated. Even if a customer installs anti-virus software, it cannot remove these viruses in case of a pirated software.


SCAN YOUR BILLS WITH A NAKED EYE

It doesn't have to be a big steal every time. It is also common to steal smaller amounts which can miss your eyes. Look for debit of small amounts in bank statements, credit card statements - especially the paise. These debits will add up to a sizeable sum over a period of time. Hacker don't target a single individual for personal reasons. They constantly fish for targets and may attack few vulnerable banking customers over a period of time.


AVOID FILLING OUT ONLINE SURVEYS

This is very common when you download a film, television soap or even a song. The sheer temptation to download it free of cost is too huge to pay attention to minor details. Such websites insist on filling out online surveys asking for your email id, personal details etc. The fact that these websites are pirated and offer free downloads explains the fact that any data keyed on such websites can be misused.

DON'T IGNORE YOUR CREDIT REPORT

Checking credit report is rather an irrelevant concept in India. Despite having multiple functional credit bureaus in India, a borrower views his credit history only when he takes a loan and the bank raises some query based on his/her credit report.

"The awareness on credit reports is so low in India that it is a luxury for identity stealers here. If he uses the identity of another individual to raise a loan, chances are the original individual may not know unless some serious crisis comes knocking," says Craig.

So, the next time you are asked to spare any personal information, it has to be for a legitimate reason such as banking, investments or insurance. Moreover, it has to be through a legitimate channel. Use personal information sparingly for your own security reasons.


Beware of Virus


Banking malwares (malicious software) are Trojans used by organised criminals to steal bank details to perpetrate fraud or steal directly from victims' accounts. A few important online banking malware are listed below:

Win32/Bancos is a family of datastealing Trojans that captures users' online banking credentials such as account login names and passwords. These Trojans send the captured information to the attacker by email or by uploading to an attacker's FTP site or posting on an attacker's website

Zeus Banking Trojan is also known as Zbot, WSNPOEM, NTOS and PRG. It steals credentials for various online services like social networks, online banking accounts, FTP and email accounts and sends this to the fraudster


What You Should Do

Keep Net banking passwords that are difficult to guess and change them regularly

Look for the padlock symbol on the bottom bar of the browser to ensure that the site is running in a secure mode before sensitive information is keyed in
Scan email attachments for viruses before opening them as these emails might contain virus or spywares.

When unsure about the source of an attachment, delete it Activate privacy setting on social networking platforms Customers should install a reputed antivirus on their PCs and ensure that the same is updated on a regular basis

What All to Avoid

Do not share passwords with anybody, including family members, relatives, friends or even employees of the bank

Never access the bank website from a link provided in an email or from any other source.

Instead type the address of the bank website in the address bar of browser to access your bank account

Source:ET

Third Quarter Monetary Policy Review

 The RBI today cut the CRR by 50 bps to 5.5% while keeping all other rates unchanged. The CRR cut will be effective the fortnight beginning 28th January 2012. Other highlights are as follows:

1. GDP growth projection for 2011 – 12 revised to 7% from 7.6% earlier
2. WPI inflation projection for March 2012 retained at 7%
3. M3 growth projection for 2011 – 12 retained at 15.5%
4. Non food credit growth projection revised to 16% from 18% earlier

Assessment
The RBI clearly acknowledges that downside risks to growth have increased and in particular seems worried about the slowdown in non food credit growth. On inflation, while the central bank notes the recent moderation; there are sufficient caveats as well including the stickiness in protein based food items and non-food manufactured products inflation. Moreover, there are still upside risks from global crude oil prices, impact of rupee depreciation, and slippage in fiscal deficit.

Very importantly, the central bank seems quite blunt in its assessment that ‘it is premature to begin reducing the policy rate’. The timing and magnitude of future rate actions is seen contingent on some factors outside the RBI’s purview namely initiatives to remove supply bottlenecks and signs of fiscal consolidation from the government. In that context, the Union Budget due March would be a key input for RBI when deciding future course of policy action.

Interpretation

We have been hopeful of a CRR cut although expectations had been diluted somewhat owing to recent comments from RBI officials With today’s action the RBI has shown more seriousness to defend its liquidity target of 1% of NDTL of banks (approximately INR 60,000 crores). However, the CRR alone will not be enough to achieve the target given that actual deficit is still likely to be upward of INR 1,00,000 crores even after the CRR cut. Market participants will keenly be watching whether the RBI continues with its OMO operations as well. If OMO support continues then the current range of government bonds may continue as well. However, if the RBI were to choose to shift focus entirely away from OMO it may lead to some pressure on government bonds and hence cause some incremental steepening of the curve in the near term.

At any rate we expect the curve to incrementally steepen from the start of the new financial year in April. Relatively better liquidity, expectations of rate cut from RBI, and falling credit to deposit ratios of banks should all contribute to fall in shorter end rates from April. Whereas with OMO programme unlikely to continue after March and market having to absorb a new borrowing calendar, longer end rates may fall more slowly. This should eventually cause a bullish steepening of the yield curve in the course of the financial year ahead.

Source : IDFC AMC

Few Tips on Tax Savings for First time Tax Payers

JFM is a period where most of the Investor comes out with lot of confusion on what to do about Tax savings and what are the options to choose. I am writing this post with some ideas with how some one who is going to pay taxes for the first time could approach tax savings schemes.

First of all – you will have to pay tax if you earn above the taxable limit – there’s just no way around it, so stop wasting your energy in trying to devise a method which gets you to avoid this.

There are some ways in which you can reduce how much tax you’re liable for and that’s where investments come in.

There is a section in the Income Tax Act which lists down certain expenses and investments that will enable a person to reduce their taxable income and as a result of that pay less tax.

This section is called Section 80C and the below mentioned  investments avenues will help you out in reducing your taxes

These Investments/Expenses Reduce your Taxable Income and give you Tax Benefit

• ELSS Mutual Fund
• Life Insurance Plans (Term Plan , Endowment Plan & ULIP Plan)
• Children's Tuition Fees
• Housing Loan Repayment - Principal Amount
• Public Provident Fund
• National Savings Certificate
• Notified Pension Funds
• Fixed Deposit
• Contribution to Provident Fund

Avenues for 80C	Category	Lock in Period
ELSS Mutual Fund	Equity	3 years
Pension Fund	Fixed Income	3 years
Tax Saving Fixed Deposit	Fixed Income	5 Years
National Savings Certificate	Fixed Income	5 Years
Public Provident Fund	Fixed Income	15 years

***Lock in Period for Insurance & Ulip Varies

If you have some education loans then you can use that to save tax, but if you don’t have that then you can invest in either mutual funds, fixed deposits, post office schemes or insurance products to save tax.

Since this is the first time you’re doing this and it’s rather late in the day to understand the nuances of these schemes properly there are two things you can keep in mind to help you make a quick decision.

First is that ELSS mutual funds have the lowest lock in period of just 3 years among these schemes and also happen to be the only equity product in this list. This means they are mutual funds that invest in shares and there is absolutely no guarantee with them.

Your investment could halve after 3 years, or it could double – it depends on the market, and there are absolutely no guarantees.

The second thing to keep in mind is that if you’re not comfortable taking this risk then you can opt for a fixed income product where the returns are defined at the beginning of the term and you can expect the principal plus interest to be paid out to you regularly. Among these options – a tax saving bank fixed deposit is probably the easiest for you to set up and the yields are as high (if not higher) than the other options.

The limit under 80C is Rs.1 lakh and if you exhaust this limit then you can invest an additional Rs. 20,000 in tax saving infrastructure bonds and reduce some more of your taxable salary.

Other Options available for Tax Benefits

Section 80CCC: Deduction in respect of contribution to certain Pension funds

                        and Maximum amount Eligible for deduction is Rs 100000

Section 80CCF: Deduction in respect of Long Term Infrastructure Bonds and

                       Maximum amount Eligible for deduction is Rs 20,000

Section 80 D   : Deduction in Respect of Medical Insurance (15000 (Max) for

                       Individual + 15000 (In case of dependent parents), Rs 20000

                       in case of senior citizen dependents

Section 80 DD:  Deduction in Respect of Maintenance Including Medical

                        Treatment of a dependent who is a person with disability

                        (Eligible for Rs 50000 or Rs 100000 Deduction)

Section 80 DDB: Deduction in respect of Medical Treatment for self or a

                        dependent (Eligible for Rs 40000(Max)

Section 80 E    :  Deduction for Interest Paid on Loan taken for Pursuing

                        Higher Education (Eligible for actual amount paid as Interest)

Section 80 G :    Deduction in Respect of Donations to Certain Charitable

                       Institutions (100% or 50% of Eligible donations, without

                       applying qualifying limit in certain cases)

Section 80 U   : Deduction in case of person with Disability (50,000 or

                       1,00,000 (Depends on disability) )

Section 24      : Repayment of Interest on Housing loan (Upto 1,50,000 (Max))

I hope the above details gives an brief overview on the various instruments, how much they save and their lock in period. Keep these things in mind before investing for tax savings .

I was a little wary of including returns because they can vary so much, and it is natural to compare one with the other but that’s not right since the risk profile of the instruments is different.

Please let me know if you see any mistakes, and also if you want to see any other information on this.

Please share it with friends and colleagues if you think this will be beneficial to them, and as usual I look forward to your comments!

Article by Nishith.B,Financial Doctor 

Need To Plug Loopholes in Real Estate Reforms Bill

The Real Estate Reforms Bill has Loopholes in its Present shape that could be exploited by unscrupulous developers

It’s unfortunate that so many reform bills are stuck in parliament but in the case of the Real Estate Reforms Bill, this may actually be good news. The real estate bill is a long-awaited and much delayed piece of legislation that is arguably of more practical importance to most people’s savings and investment than anything else.

The bill’s draft was released to the public by the government in November. There were some news stories about this bill at the time, but there has been no real public debate and analysis. This is unfortunate because while there’s a lot that’s good in this bill, there are also a few of serious problem areas. If the bill were to be passed in its present shape, then that would leave some serious loopholes that could be exploited by unscrupulous developers. In fact, if one were to compare the 2009 draft of this bill that was made public at the time with the current draft, then it seems possible that the room for these loopholes has actually been created because of lobbying by the real estate industry.

Here are the two big problem areas. The first is about diversion of flat buyers’ funds by the developer. Such diversion is a widespread malpractice and is a major reason for delayed and stalled projects. The 2009 draft of the bill stipulated that all payments taken from buyers for a particular project would be kept in an isolated account of and would be used only for that project. Strangely, the 2011 draft of the bill reduces this to seventy per cent of the funds. Basically, the 2009 draft sought to prevent the diversion of the house-buyers’ funds but the new draft allows diversion of 30 per cent of these funds.

The second problem area is the exemption of small projects from registration and most of the provisions of the bill. The 2009 draft exempted projects smaller than 1000 sq meters. This has now been raised to 4,000 sq meters. Moreover, if a project is implemented in phases, then the limit will be applied to each phase separately. Practically, this means that a vast majority of projects could easily be structured to avoid the coming under the purview of this bill.

If the anti-customer practices of the powerful and politically well-connected real-estate industry are to be curbed, then these loopholes in the bill will need to be addressed.

 Source : VR

Good News : Government plans to introduce bank account number portability

Switching Banks without Changing A/C Number Soon

Customers may soon be allowed to switch banks without changing account numbers. After similar moves in mobile telephony and health insurance in 2011, the government plans to introduce bank account number portability.

The idea is to save customers the inconvenience of opening and closing bank accounts or keeping multiple accounts if they have to shift to a new location or find their bank’s services unsatisfactory.


The finance ministry has started discussions with the Reserve Bank of India (RBI) and banks, including private sector lenders, to assess the feasibility of introducing the move over the next few years. In a step towards this direction, all banks will be asked to follow common KYC (know-your-customer) norms. An expert committee will be formed to explore it further and prepare a report.


“We have started preliminary discussions with the RBI and banks, and they are on board. Bank account number portability will allow a migrant worker to shift his account from one bank to another simply by writing an application to his home branch,” said a finance ministry official, adding the move might take another three years or so to materialise. The banks may not need much preparation on the technology front, as already some services (like ATMs) are integrated and most banks are fully on the core banking system.

However, the biggest challenge before the government is security. A lapse on the part of a bank in following KYC norms can pose threats to national security and client confidentiality. There could be customers switching banks too frequently to escape the Prevention of Money Laundering Act. The official said all such aspects would be considered. With the deregulation of interest rates on saving deposits, customers will have the choice of switching to a bank offering higher rates without much paper work.

Bank account number portability is being introduced in different forms in countries such as Sweden, the UK, Australia, Hungary and South Africa

Source: BS