FLAME Newsletter - May 29, 2013


"My basic question is why should banks take so much commission in selling insurance/mutual fund products. What is the extra cost that the bank is incurring? The full benefit of the commission/reduction in cost, if any, should go to the customer" KC Chakrabarty, RBI Deputy Governor

Your finance demystified:

Should you invest in inflation-indexed bonds?

Investors are often told to diversify their portfolio across various asset classes like gold, equity, bonds, among others. Though most people are familiar with these financial products, we will just recap the same for those with no financial background.

Stocks offer an ownership stake in the company, while bonds are similar to loans made to a company. On maturity of the bond, the investor is refunded the original principal. The interest component is paid annually, unless otherwise specified… Read more

FAQs on inflation-indexed bonds

Difference between stocks and bonds

The Indian market is flooded with sales of stocks and bonds. Shares and bonds are two important tools of investment that form the portfolio of any investor at any given point of time. Stocks and bonds are financial instruments for investors to obtain a return and for companies to raise capital. In simple terms, stocks offer an ownership stake in the company and bonds are similar to loans made to the company.

A bond is a form of loan or IOU (I owe you). The holder of the bond is the lender (creditor), the issuer of the bond is the borrower (debtor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure… Read more

All you wanted to know about corporate bonds

What are RBI Relief Bonds?

RBI Relief Bonds are bonds issued by the Reserve Bank of India and are widely opted for as a tax saving tool to save additional tax. They are available at all branches of RBI and State Bank of India. Issued by the country’s central bank they are one of the safest investment instruments. The risk exposure thus is nil and one can be assured that the invested amount would be redeemed back in full, post maturity. The only drawback of the relief bonds is that there is no tax benefit on the initial investment made for buying the bonds… Read more

Should you invest in tax-free bonds?

Did You Know?

How are interest rates and bond prices related?

There is an inverse relationship between bond prices and interest rates. When bond prices go up interest rates fall and when interest rates rise bond prices fall… Read more


Abenomics refers to the economic policies advocated by Shinzo Abe, the current Prime Minister of Japan. It is meant to resolve Japan’s macroeconomic problems. It consists of monetary policy, fiscal policy and economic growth strategies to encourage private investment.


AMCs report net inflow of Rs765bn in FY13

No loan against gold ETFs and MFs: RBI

Bar loans against gold coins weighing above 50gm: RBI

AMCs take efforts to resolve complaints in 30 days

Insurers to maintain policyholders’ records for 5 yrs: IRDA

Travellers opt for short trips, but exotic places: ICICI Lombard General


FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India’s spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation’s economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL’s FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

Our objective is to light a FLAME, as the name suggests, which will set ablaze a chain of FLAMEs across the country. The new-found light of knowledge will undoubtedly dispel the dark clouds of financial illiteracy and ensure the bright sunshine of financial growth and prosperity.

This portal is but one of the various IIFL initiatives that would be part of FLAME.

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