Wednesday, February 22, 2017

'Money order' days are coming back soon? India Post, the flag bearer of financial inclusion

Launch of #Indiapost #payments-bank and #aadhaar-based-money-transfer - and my childhood memories

I am born and brouht up in a semi-urban locality in Jamshedpur, Jharkhand, and hold some fascinating memories of childhood days with my grand-parents. Holding my grand-mom's hand, my tours to Post-office and banks comes flashing often. I remember my grand ma calculating her interest earnings, gifting us Indira Vikas patra, Kishan Vikas Patra certificates as birthday gifts. Urging my father to buy NSC certificates was a routine for her without having a proper understanding of product positioning but with a complete knowledge of how to "double" her savings with fixed income products.

Also Read - Airtel Payments Bank

I still vaguely remember, I would be about 8 years old when my cousin cleared his board exams with brilliant numbers. My family was thrilled. My Grand-father enthusiastically summoned my Grand-ma to send "money order" of Rs. 500 to my cousin as blessings. Sending any other gift through courier was a far-fetched dream at that time. And as usual, I enthusiastically accompanied my granny to the Post office and see her write neat requisition slip, speaking to the head post master, giving some extra money as a fee for transfer and done! We received a letter from uncle and brother in receipt and thanks within the month (we didn't have a telephone yet).

India Post was an important part of our lives with the Postcards and in-land letters, the deposit certificates and occasional money orders. It was a complete financial service destination for my grand mom with their monthly income scheme and senior deposit schemes. 
It was such a thrilling experience from my 'slo-mo' childhood memories. The visit to Post office was just fascinating!

It may sound weird for a bit that why I am detailing out my childhood experience in a finance-centric blog. Hold on! I will tell you. ☺ I just came across the news yesterday that India Post payments bank plans to launch Aadhaar based money transfer. Though the minute details aren't out yet, I just recalled the sweet childhood days! It will be fascinating to see how the whole process pan out. India Post one of the oldest entities in India, with more than 1,50,000 point of presence and 3 lakh postmen on its payroll clear winner in the outreach to the rural and remotest places in India. According to reports the India Post has more than 89% branches are in rural areas. 

Though #India Post temporarily lost its sheen during the late 90s and early 2000's, with many service running into losses, closure of its telegram services and thanks to the internet era, postcards and inland letters are history now. But great to see that the old champ is all set to get on with the modern times and give a high competition and contribution in the banking system of India

India Post, older than our formal banking system has served Indian population with various fixed income product and Many times higher return on fixed income products. The institution is a true symbol of financial inclusion in India, quietly working for decades humbly without hogging much lime-light. This is an ode to you India Post, the true torch-bearer of financial inclusion journey.

I welcome you whole heartedly for your newest venture of Payments banking. Despite strong opposition by the banking lobby, you made it there and you truly deserve it. I wish you write an amazing story of financial inclusion in India for people to acknowledge and remember you for your unforgettable contribution to rural India.

Saturday, February 18, 2017

Different kinds of lesser known bonds with interesting names

Before I resume to my usual dopes on personal finance, I thought today we will discuss something interesing and informative.  and stumbled upon an article which talks about some srikingly different names of bonds, very unusual of  such a strict financial instrument.

Till recently I thought it's only the phone makers who were obsessed with food or fruits who named their products as "Apple", "Marshmellow", blackberry and so on until I came across 'Masala Bonds'. But hold on, there are a host of it. On a newspaper, I found names like 'Panda', 'Samurai' and 'Kiwi' used for different bonds. I wished to dig further and present to you the list of such lesser known bonds from across the world with different names. 

These interesting bond names are popular in many countries - India, UK, China, Japan, etc. The common factor in these bonds is their features offering. These bonds are mostly used by either foreign country corporates or bonds are sold in foreign country denominations, however with some exceptions like ‘Kiwi’. The bond names amazingly express the love for food amongst the financial community across the globe (on a lighter note). Few names are also attributed to other important symbols of the nations. The cuisine or symbol reflects the connection with the country. And my obsession with financial market and personal finance both grows stronger J

Here I present to you the compiled list, sourced from Wikipedia, newspapers and my own memory. You may not require this list for investment purpose but can serve as informative and interesting read. I would like to go with chronology - 

Arirang Bond  -  Arirang is Korean folk song, used for a won-denominated bond issued by a foreign entity in South Korea. It is a very small segment of their bond market, the Asian Development Bank issued it in 1995.

Baklava bond – Name is taken from a Turkish dessert, Baklava is a bond denominated in Turkish Lira and issued by a domestic or foreign entity in Turkey. Turkish government allowed companies to issue these bonds in the year 2010.

Bulldog bonds – Taken from the national symbol of united Kingdom, Bulldog bonds are sterling-pound based bonds (the third largest reserve currency in the world) issued by non-British institutions that want to sell the bond in the United Kingdom.


Dim sum bond – A popular appetiser even in Indian Chinese restaurants, these are bonds issued outside of China but denominated in Chinese renminbi, rather than the local currency listed in Hong-kong, not in mainland china. 

Formosa bond - Formosa, is an alternative name for the island of Taiwan. These bonds issued in Taiwan but denominated in a currency other than the New Taiwan Dollar.

Huaso bond,- Derived from the term referring to Chilean cowboys, a Chilean peso-denominated bond issued by a non-Chilean entity in the Chilean market.

Kangaroo Bond – The name deriving Kangaroo, a national animal from Australia, is the type of bond issued by foreign entities, traded in the Australian market, is denominated in Australian currency, is subject to Australian laws and regulations.

Kimchi Bond - kimchi, name derived from a Korean side dish, is a non-won-denominated bond issued in the South Korean market.

Kiwi Bonds – Derived from the famous fruit from New Zealand, Kiwi bonds are bonds offered directly to the public and available only to New Zealand resident investors, redeemable on maturity or at the option of the bondholder and are issued in 6 months, 1 year or 2 years 
period.

Lion city bonds – The name derived from the national symbol of lion head, Lion City bond foreign currency denominated bond issued by foreign company in Singapore

Maple bond – I just love the maple syrup over a hot pancake on breakfast. However, we are here talking about the Canadian dollar-denominated bond issued by a foreign entity in the Canadian market.

Masala bonds – Derived from the Hindi word for spices, these are rupee-denominated bonds 
issued outside India.

Matrioshka Bonds – Name derived from the famous Russian dolls, these bonds are referred the Rubble denominated bonds, issued by foreign entities for reaching Russian investors.  

Panda Bond - A Panda bond is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in the People's Republic of China.

Samurai Bond – a term referred for military nobility from Japan of medieval and early-modern Japan, a samurai bond is a yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.

Shibosai Bond - yen-denominated bond sold directly by issuing company, a bond denominated in yen sold directly to investors by the foreign issuing company.

Shogun Bonds – The term ‘Shogun’ is used for Japan’s supreme military leaders from 1603-1869. It is used for the non-yen-denominated bond issued in Japan by a foreign institution or government.

Yankee Bonds - The word is derogatory a term used to describe Americans by the Brits, Canadians, Australians and the like. A Yankee bond is a bond issued by a foreign entity, such as a bank or company, but is issued and traded in the United States and denominated in U.S. dollars. 

Uridashi Bonds – A Japanese word for ‘Sale’, Uridashi Bonds are the secondary offering of bonds, denominated in Yen or issued in a foreign currency. These bonds are sold to Japanese local/ individual investors

Hope it made an interesting read. will soon be back with my new post. Till then.. enjoy! A very happy weekend to all of you :) see you soon