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Video-based customer KYC NPS Account Opening & Withdrawal

Personal Finance

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October 13, 2020

Video-based customer KYC NPS Account Opening & Withdrawal

NPS account can be open and money can be withdrawn with video-based customer KYC. PFRDA – Pension fund regulatory development authority has launched a video-based KYC facility in Oct 2020. PFRDA always works on the initiatives which are subscriber friendly. Before video-based customer KYC, PFRDA has already introduced various other facilities such as eSign/OTP, Offline Aadhaar based KYC, Paperless-on-boarding, eNPS, e Nomination, etc.

Now, all the intermediaries and NPS POP can use a video-based customer identification process (VCIP) to onboard, withdrawal, and exit of NPS Subscribers.

There are many banks and financial institutions & mutual fund house who are already using video-based KYC facilities. This facility eliminates the need for physical paper and personal visits. The entire process is online video-based.

Why Video-based customer KYC for NPS account is necessary?

Video-based KYC is a need of an hour in the current scenario. It will eliminate the need for a physical visit for all NPS subscribers.

As we know that it would be challenging to visit NPS POP in the current COVID situation. Social distancing, contactless services, and limited mobility is becoming the new norm of operation. VCIP (Video-based customer Identification Process) introduced for NPS will follow all these norms and provide contactless services to NPS subscribers.

Also Read –Nominee NPS – How to change nominee in NPS online?

This service will also ease-out the process of on-onboarding & exit for the subscriber. The entire process will be online and verification will be carried out remotely over the video. VCIP will eliminate the need for paper-based KYC. It will also optimize the turn around time for the account opening and exit processing.

This facility will also help NPS in expanding customer base as account opening would be seamless, paperless and KYC would be online and easy.

Along with VCIP OTP/eSign will be used so that the entire process would be paperless. PFRDA will also allow virtual POP for NPS.

PFRDA has issued a guideline for VCIP for all POP. All the POPs including Central Record Keeping Agency will be developing an online VCIP platform for the subscribers.

How video-based customer KYC (VCIP) works in case of NPS account?

#1 Mobile Application based VCIP

POP are advised to implement a mobile application for VCIP. The mobile application shall provide the facility of taking photograph, scanning, and uploading documents via DigiLocker. Subscribers shall able to do signature during VCIP. The usage of this application will be done by the authorized person of the POP. Key Features of Mobile Application is given below.

Key Features of Mobile Application VCIP – NPS

Seamless, real-time and secured with end-to-end encryption.
Video enabled process with time stamping and geolocation tagging to ensure the location is India.
The Quality of recording will be smooth & jerk free.
The Facility of taking photograph and uploading documents.
Instant bank account verification.
Signature upload facility during VCIP while on-boarding.
Withdrawal document upload facility.
Facility to upload other documents for verification in the application.

POP needs to take care of security and privacy requirement. The application needs to undergo audit and stringent guidelines to be followed to guard against spoofing and hacking attempts.

#2 Non Mobile Application based VCIP

POP can also implement a non-mobile application based VCIP. It can be a desktop-based application where a Video-based customer identification process takes place after taking consent from the subscriber. The activity log is required to be maintained with a timestamp. Key features of Non-Mobile Application based VICP are given below.

Key Features of Non Mobile Application based VCIP – NPS

Random Question Answer & facility to capture responses from NPS subscribers.
Video of customer shall be easily re-cognizable and shall not cover face in any manner.
Online document verification facility for the subscriber.
Photograph given in the document should match with subscriber during VCIP.
It can be video call facility with end-to-end encryption.
Instant bank account verification facility for the subscriber.
Photo and signature upload facility during on boarding.
Withdrawal document upload facility at the time of exit or annuity.

Safety and security measures needs to be taken care by POP during & after VCIP.

Conclusion

As per me VCIP for NPS is very good initiative and it will defiantly help subscribers. The entire process will eliminate need of physical visit to POP. The subscriber can use this facility of contact less KYC for NPS.

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For more information, visit NSDL – NPS circular section.

How Amazon Makes Money? – Amazon Business Model

Business Models

Shitanshu Kapadia

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October 8, 2020

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How Amazon Makes Money? – Amazon Business Model

Today we are going to talk about Amazon Business Model. Amazon is no 1 e-commerce platform.

The CEO of Amazon Jeff Bezos is the world’s first centibillionaire person with net worth of $113 billion. You can learn a lot of business lessons from Jeff Bezos and Amazon business model. So, let’s get started.

How Amazon Makes Money? – Amazon Business Model

Amazon is an American multinational company founded in 1994. The company started its operation from a small garage. Amazon was a small book store company and use to sell books online in the starting. Gradually Amazon has made a lot of changes in the products and services and became a sales and distribution master.

Amazon is making money via online e-commerce stores, physical stores, Amazon AWS, and Advertising.

Also Read – 20 Types of Business Models to Generate Revenue

Amazon Products

Amazon is offering multiple products to the customers. Some of the products from where Amazon is earning money are given below.

Unique Devices

Kindel, Alexa, and Amazon Firestick are unique (innovative) products of Amazon. Kindle allows users to buy, download, and read e-books, magazines, and other digital media. Kindel is a very popular and widely accepted device. Another unique product is Alexa smart speaker. Alexa Smart Speaker is an internet-enabled speaker which can perform your tasks as well entertain you with music. Amazon Firestick can convert your television into a smart TV. These products are contributing a lot of revenue for Amazon.

Amazon Prime

Amazon Prime is a subscription-based membership program of Amazon. This program offers unique benefits to the customer. You will get fast & free delivery by becoming a member of Amazon Prime. Prime members will get exclusive deals, early access to deals, and a bigger discount. The membership cost is low but benefits are multifold.

Prime Music & Prime Video

Prime Music & Prime Video are on-demand music & video service offered to prime members. Prime Music and video offer thousands of audio and video entertainment at no cost. It is a very popular product by Amazon.

AWS

AWS is amazon web service. It is on-demand cloud platform by Amazon on which 175 different computing services are offered. This includes computing, storage, networking, database, analytics, mobile developer tools etc. AWS is one of the highest revenue generating business for Amazon.

Amazon Business Model

Customer Centric Approach

Amazon’s business model is truly customer centric. Amazon believes that “Customer is King.” Amazon understands what customers likes and what is not liked by the customer.

Customer likes –

On Time Delivery/Same day delivery
Tracking facility
Low cost Product
More Discount

Amazon takes care of all of the above. On the other hand, Amazon also takes care of customer dislikes such as delay delivery, defective products, and out of stock.

Amazon could able to grow and become No 1 company due to customer-centric approach.

Once a customer purchases the product from the Amazon store, he/she is likely to become a loyal customer of Amazon.

Timely build new Innovative Products

Amazon believes in building new innovative products on a timely basis. It is a value innovation model and not value imitation. By using the value innovation model amazon has launched unique products such as Amazon Prime, Alexa, Fire Sticks. All these products have made amazon a fast mover.

Prime membership was a game changer innovation by Amazon. It has helped amazon to build recurring revenue, loyal customer, and customer retention.

80% Product and 20% Promotion

Amazon’s business model says that you need to build a great product. Spend more on building a product and less on promotion. They believe that if your product is good customers will come back to you and bring more customers. You can draw the attention of few customers by promotion but you can retain and build more customers by launching good products.

Diversified Portfolio

Amazon has built a pipeline of multiple products. They have diversified the portfolio by adding multiple innovative products. These products are helping amazon to grow and generate more revenues. All the products are adding more values to amazon’s portfolio. Few examples are given below.

Prime = Low Cost Acquisition of customer + Repeat Customer
AWS = Cloud based revenue generation + Consumption based
Advertising = attention based revenue generation + performance based model
Third Party Platform = Commission based revenue generation + revenue split model
Amazon Seller Program = Participation of Small Business + Sharing percentage of sale
Strategic Partnership = Reduce cost + more discount to customer

Sales & Distribution Excellence

Amazon has become a sales and distribution expert. They have built strong sales and distribution channel for the customer.

Sales – All small or big sellers can join amazon easily. The commission to small sellers is very good. By means of using this strategy, they have built a strong product range. Product is sold at a low cost on amazon which leads to impulsive buying by customers.

Distribution – Logistics and distribution by Amazon are so good. They use a hybrid logistic model. They keep updating customers about the delivery status from time to time. They have involved local people in order to deliver the products on time. They also make use of technologies for improving the process of sales and delivery. They have achieved excellence in same-day delivery and on-time delivery.

Timely Purchased new companies

Amazon has purchased new companies on a timely basis. Few companies acquired by Amazon are audible, Zappos, IMDb, The Washington Post, etc. These acquisitions helped Amazon in building a strong diversified product portfolio. It has also increased the net worth of the company.

Over to you –

Amazon has set an example of how businesses can be built and grown. I hope you have got a complete insight into Amazon Business Model.

What is your take on Amazon Business Model?

Which all companies you want to cover under the business model section?

Share your thoughts in the comment section.

New Health Insurance Rules by IRDAI 2020

Health Insurance

Shitanshu Kapadia

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October 5, 2020

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New Health Insurance Rules by IRDAI 2020

Health Insurance Rules are changed. IRDAI has released new health insurance rules which are applicable from 1st Oct 2020. The new rules are for simplifying health insurance policy and widening its scope. The rules are getting changed at the time of the corona pandemic. It is advisable to go through these new rules once to know it impacts.

Here is detail about New Health Insurance Rules by IRDAI and its impact on you.

New Health Insurance Rules by IRDAI 2020

Claim Decision within 30 Days

The decision for claim settlement or rejection needs to be given within 30 days from the date of receipt of necessary documents. This means you will get a decision about claim settlement or rejection within 30 days.

Delay Penalty

As per the new rule, the delay in claim payment is not acceptable. The health insurance company has to make payment within 45 days. In case of delay, the company has to pay interest to the policyholder from the date of receipt of the last document to the date of payment of claim at 2%.

Also Read – Top 5 Best Health Insurance in India 2020

Claim Investigation

In case of claim require investigation in the opinion of the company, the same should be initiated and completed at the earliest not later than 30 days for the receipt of the last necessary document from the policyholder. In such a case, a company is liable to settle or reject the claim within 45 days.

Choice of Company in case of Multiple Policies

If you are holding multiple health insurance policies, you can select the health insurance company for the claim. If the amount to be claimed exceeds the sum insured under a single policy, the insured person shall have the right to choose an insurer from whom he/she wants to claim the balance amount.

Migration

A Policyholder can migrate to other health insurance products or plan offered by the company. In order to do the migration, the policyholder needs to apply for migration at least 30 days before the policy renewal date. In the case of migration, the policyholder will get continuity in coverage including the waiting period.

Portability

A policyholder can get an option for portability. The policyholder is required to apply at an insurance company for the portability. The application needs to be done at least 45 days before but not earlier than 60 days from the policy renewal date. This is as per IRDAI guidelines related to insurance portability.

Cancellation

The policyholder may cancel the policy by giving 15 days written notice to a health insurance company. Under such a case company shall refund the premium for the unexpired policy period. If any claim is made during the policy year, the insurance policy shall not refund any premium.

The company can also cancel the policy at any time on the ground of non-disclosure of material facts, misrepresentation or fraud by giving 15 days written notice. No refund of the premium applicable under such cancellation.

Renewal of Policy

Renewal of policy is allowed except on the ground of fraud, misrepresentation by the insured person. The insurance company is not under obligation to give any notice for renewal. The grace period is given to policyholders for the renewal of the policy.

Withdrawal of Policy

In case the health insurance company is planning to withdraw policy in the future, the company shall intimate the insured person about the same before 90 days prior to the expiry of the policy.

Free Look Period

The free look period is applicable to new individual health insurance policies. This facility is not available on renewal or portability/migration of policy. The free look period is 15 days. In case of policy surrender during the free look period, all premium shall be refunded after deducting medical examination charges and stamp duty charges.

Conclusion

The new health insurance policy rules are introduced towards standardization of general terms and conditions in the health insurance contracts.

As per me, it is very good steps towards standardization which will surely help policy holders in getting better services from health insurance companies.

For more information visit IRDAI Circular on Health Insurance Policies.

Best Multi-Cap Funds for Investment in 2020-21

Mutual Funds

Shitanshu Kapadia

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October 4, 2020

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Best Multi-Cap Funds for Investment in 2020-21

Multi-Cap Funds – Where to invest in this market scenario? Shall I invest in a Large-cap fund or I should go for mid-cap and small-cap funds? Well, as per me you should go for Multi-Cap Funds in this market scenario. I did the same. I invested money in DSP Equity Fund in May 2020 (before six months). This fund has given 30% returns to me in six months. You can get benefits of different market capitalization from multi-cap funds.

Multi-cap funds are equity-based mutual funds that invest in companies of different market capitalization, sectors, themes, and segments. The fund manager of a multi-cap fund has the flexibility to make changes in the market portfolio based on market conditions.

SEBI has recently made changes in the rules for the multi-cap funds. The details are given below.

Also Read – 20 Best Mutual Funds for Investment in 2020-21

#1 Minimum allocation to equity increased from 65% to 75%

As per earlier rule fund manager of multi-cap has to do a minimum 65% allocation of the fund in the equity market. Now, this rule is modified by SEBI. Now the minimum 75% allocation is required in the equity market by the fund manager of the multi-cap fund.

#2 Minimum Allocation in each market capitalization

The second rule says that funds should be allocated in each market capitalization equally 25% each.

25% in Large-cap companies
25% in mid-cap companies
25% in small-cap companies

Earlier the fund managers were free to allocate funds and invest in the companies without any restriction of mid-cap, small-cap or large-cap.

The new restriction of 25:25:25 allocations in each capitalization category helps in building a well-diversified equity portfolio.

Why you should invest in Multi Cap Funds?

#Well Diversification

Multi-cap funds are truly diversified funds. Once you invest your money in the multi-cap fund your fund is by default invested across large-cap, mid-cap, and small-cap in equal proportion. This means you will get the stability benefit of large-cap companies and the growth benefits of small-cap and mid-cap companies.

#Moderate Risk

The risk associated with multi-cap funds would be moderate. Investment in large-cap companies offers more stability in the fund during the stock market crisis. If your objective is long-term wealth creation and you have a moderate risk appetite you can invest in this fund.

#Returns

The fund is expected to give very good returns to the investor over the long term. You can expect two-digit returns slightly higher compared to large-cap funds.

Things to consider before investing in the Multi-Cap Fund

You should consider the following points before investing in multi-cap funds.

Fund Manager

The fund manager plays a crucial role in the Multi cap fund. It is a well-diversified fund and investment needs to be made across capitalization equally. The fund manager should be capable enough to find out the right investment opportunity. You should check the past performance of the fund manager across various schemes.

Risk

These types of funds are more suitable for moderate risk investors. The risk of these funds is more than large-cap funds but less than small-cap and mid-cap funds. These funds are suitable for medium to long term investment.

Fund Performance

You should look at the fund performance. It is advisable to look at annually generated returns by the funds in the last few years before investing. I recommend checking at least the last five years’ fund performance.

Cost

It is highly recommended to check the cost incurred by these funds. You can get an idea about cost from the expense ratio. Choose the fund with a lower expense ratio. You should also check the exit load and entry load charged by these funds.

Tax implication

Taxes are applicable to these funds. When you redeem your mutual funds you need to pay tax on the capital gain made. Long term capital gain tax or short term capital gain tax. The dividend distribution tax is also applicable to the dividend received by the unitholder.

Best Multi-Cap Funds 2020-21

The best multi-cap funds for investment in 2020 – 21 are given below.

* Note – The returns are as on 3^rd Oct, 2020.

Over to you

A Multi-cap fund is a very good investment option for the moderate risk taking investor. It is an excellent investment option that offers a well-diversified portfolio and best in the current market scenario.

The selection of mutual funds given above is based on my research. Please do proper analysis and compare both quantitative and qualitative parameters before investing in any of the funds given above.