Monthly Archives: October 2015

Thursday Trivia – Steps to recover depsoit money when company defaults

No investment is risk free and contrary to popular belief fixed deposits carry their own risk, especially if you are depositing your money with a corporate instead of banks. Many people have risked their life time savings by investing them in corporate FD’s and end up losing either interest or even the principal amount. Corporate FD’s are not always bad, but because of greed people end up investing in companies which have low or no rating.

Unfortunately if you are one who has been facing challenges in trying to recover money from these companies, here is what steps can be taken to recover the same

As a first step try contacting company in both the written mode. Send emails and registered posts to the investor grievance cell of the company mentioned on the website or the application form. After repeated attempts if the company fails to respond or refund the money approach to the next step.

One should use both the steps mentioned below for more robust actions

On MCA website on the top menu click “MCA services” under ‘Complaints’ click on ‘Create Investor Complaint’. It will provide you Investor Complaint Form. Fill in all the necessary information and submit your complaint online.

Ones the complaint is filed you can track the status of the complaint

The other step is that you file a case against company with the Company Law Board (CLB) under section 58A (9) of Companies Act, 1956 or under section 45QA of the RBI Act, 1934.

You need to fill form no. 4 of Company Law Board Regulations and submit it with a demand draft of Rs50 to nearest CLB Bench.

These are strong steps against the company and will ensure stringent actions against them. As simple as this may sound but the battle is not over with these actions. You would need to invest time effort and some more money to get your money back. But it’s worth taking the action instead waiting for something to happen.

Please note a few points that one should always remember while investing in a corporate FD

  • Always preserve a copy of the application form, and original deposit receipts
  • Like bank deposits corporate deposits are also unsecured
  • Always invest in companies having good rating by reputed rating agencies
  • Preserve any form of communication received from the company
  • Compare the returns with bank rates and gauge the risk reward ratio


Please give your feedback and comments.

Thursday Trivia – NFLAT – A powerful tool for financial literacy of students


Money and finances are an integral and important area of our life. Everyone has different relation with money. Some are very comfortable discussing and handling their financial matters. While there are others who feel dreaded with mere conversation of it. People develop notions about themselves in this area and accept it as an eternal truth. Even today we have clients who have been working for more than a decade and cannot fill their tax declaration form without consultation. While there is nothing wrong about it, but probably one of the reasons of this fear is that they were exposed to money management at a very matured stage in life.

The challenge now for them and for others as well is to make sure their children are not left with similar experience. While many tools and games are being developed to overcome these, but it generally requires involvement of parents. We came across this phenomenal initiative by FSDC (Financial Stability and Development Council) a government body, called NCFE (National Centre for Financial Education)

NCFE has representatives from all regulatory bodies like RBI, IRDA, SEBI to name a few. The vision of NCFE is “A financially aware and empowered India.”. NCFE is doing fabulous job by creating wonderful content for financial literacy which can be downloaded from their website. One of their most commendable work is to conduct Financial Education Training Program across India for school teachers of class VIII to class X, and make them “Money smart Teachers”. So that children in these classes can be introduced to the concept of money management.

NFLAT – National Financial Literacy Assessment Test

Currently NCFE is accepting registrations for NFLAT. This is a first of its kind national level test, conducted by the NCFE, to measure the level of financial literacy among school students. Through this test NCFE aims to encourage school students to obtain basic financial skills which are essential for their full participation in society.

Targeted towards school students of Class VIII to X, NCFE-NFLAT would assess their knowledge on topics such as Money, Savings, Banking, Budgeting, Insurance, Investment, Retirement planning, etc. The test is conducted online across the country, both in English and Hindi. The last for registration is 17th October.


We urge you to take this program to your school, and get as many children registered for this test. It not only creates awareness but also a new inquisitiveness in child about money. Please  click here to know more about NFLAT.


Please write back for your comments and suggestions, and most importantly if you need any assistance from us to spread this.

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Thursday Trivia – Fundamental Principles of Investment by great investment GURUs

In our view it pays to learn the fundamental principles followed by successful investors. Rather than trying to take tips or follow noise on media, we have an opportunity to read and learn from successful investors. In this view please read below the principles of some of the greatest investors. These are excerpts from a table book by Value research.

Benjamin Graham– Graham based his studies on the earnings yield (inverse of the P/E ratio) and the ratio of stockholders’ equity. The margin of safety, another concept played a big role.  The margin of safety means that the investor should analyze a company’s financials and come up with the intrinsic value. He should buy only when the stock traded at a discount to this intrinsic value. Graham called this the margin of safety. It’s like buying a dollar for 50 cents.

Walter Schloss – Schloss’s starting point was to look for the companies below the book value and with little debt. He would be interested only in companies that engaged in manufacturing of some sort. He was not comfortable with the service industry and would even ignore such successful franchises as MacDonald’s restaurants. He was interested in companies in basic industries.

Joel Greenblat– Greenblatt stresses discipline and his research shows that while beating the market is hard, it doesn’t have to be complicated. The hard part comes not in developing a complex strategy but instead finding a proven approach and sticking to it through good and bad times.

John Neff– He called himself a “low price earning investor’. He searches for stocks that are cheap in relation to their total return (which is defined as the ratio of the sum of their earnings growth plus their dividend yield to the P/E ratio). Absent stunning growth rates, low P/E stocks can capture the wonders of P/E expansion with less risk than skittish growth stocks. In them lies true value.

Peter Lynch– Invest in what you know. An individual investor is more capable of making money from stocks than a fund manager because he is able to spot good investments in his day to day life before Wall Street. This is his natural edge. Since most people tend to become expert in certain fields, applying this basic principle helps individual investors find good undervalued stocks.

Our take – Investing like any other business is successful because of the personal traits of the investor. One needs to examine his own belief system, learn and unlearn from others and his own experiences. Investing is much more than following tips by people or trying to catch a trend by listening to media. It’s an art and science of creating wealth. Please write back your comments and feedback.