Compiled by: Rama Krishna Vadlamudi, Hyderabad November 8, 2010
PAGE 3 OF 26
41. What is a no-frill account? As per the guidelines given by Reserve Bank of India and in line with theintentions of the Government of India, commercial banks have been opening no-frills accounts to large sections of underprivileged sections of the society. The
are an innovative concept to introduce banking to the masses.This concept is part of ‘financial inclusion’ drive started by the Government of India some time back.
Customers can open no-frills accounts with either a ‘zero’ balance or with bare minimum balance.
Even collateral-free loans of up to Rs 50,000 can be obtained by the no-frills accountholder.
Students from minority communities can open such accounts to receiveGovernment Scholarships
Banks can provide credit cards against no-frills accounts in rural andsemi-urban areas101. Why are gold prices rising?This is a most difficult question to answer. However, let me try. Gold is a preciouscommodity. From time immemorial, gold has fascinated man (man includes woman also). It is a malleable material and can be converted easily into any form.It has no economic value meaning it does not offer any regular return (like adividend from a stock or interest from a bond) except capital gains. Internationalgold price is hovering around USD 1,390 per ounce and in India around Rs19,700 per 10 gm. The reasons for
gold price rise
can be attributed to:
Investors around the world are worried about the growth of the worldeconomy
They consider gold as better compared to the depreciating currencies,like, US dollar
Due to the global financial crisis of 2007/2008, investors have lost faith inGovernments who have been printing currency notes in thousands of crores devaluing their currencies
As a result, purchasing power of currencies has come down
The sovereign debt crisis in Dubai and Greece have convinced investorsthat Governments are broke; so gold is a safe haven
Even central banks of several countries, including, India and China, have bought tonnes of gold from the IMF and international market
Rising prices bring in more investors to gold
Gold exchange-traded funds (ETFs) have made it easier for investors toput their money in gold
The price of any good or service depends on the principle of demand andsupply. However, sentiments matter a lot in markets rather thanfundamentals.