Managing Personal Finance

Income Tax is a matter of high concern for all of us. It’s one of the major sources of income for the Government of any country. A country’s overall growth depends on how its citizens pay taxes. It’s our moral duty to pay taxes on due time. But in India, many businessmen, investors, professionals find tricks to avoid this. Sometimes few big shots come into picture for an overdue of heavy amount of income taxes. This is the reason why the Government is unable to deliver proper services to its citizen and employ ways to cover up by imposing additional taxes. So, it increases the suffering of the mediocre people.

Many investors, companies invest money in the share market, mutual funds etc. and suck the honey out of it. Govt. remains totally unaware of their activities due to the improper tracking system. The big scams in the share market happen, because the concerned department can’t scan them out in time. Thus the Indian Economy keeps deteriorating day by day due to these black money makers. The value of Indian currency keeps descending on a regular basis.

The scenario has started changing. Recently our Ministry of Finance has confirmed the tightening of screws. Today, PAN card has already become mandatory for investment in the ‘Share market’ and ‘Mutual Funds’. Soon it will be compulsory for opening / maintaining bank accounts, credit cards, loans etc. Government is forcing the employees working in different companies - private/public, small/ big, to submit their ‘IT Returns’. But another group of people like businessmen, consultants, professionals like doctor, lawyers, teachers (who do private tuitions) etc. still find ways to escape. But soon they will find no other way but to show their actual income to the concerned Govt. department!

No doubt, it’s a tough task for the Govt. to implement and maintain all these, but compulsion of the PAN will definitely make the system more effective. The possibility of major and minor scams in the finance sector (like in share market, mutual funds, etc.) will undoubtedly minimize. The finance globe would be under control making it good for mankind.

What is PAN? - Permanent Account Number (PAN) is an identity given to each professional (whoever is earning money) by the Income Tax department, Govt. of India. It’s for them who are earning money somehow. Currently it’s not applied for students, unemployed people. It is such an instrument, through which govt. can track anyone’s financial dealing, income etc.

Finally I would like to convey that PAN is not a matter of horror, it’s for our own benefit. If we, the common people run on the right track and help the govt. in implementing the right things, the black money makers will fail to tarnish the money market any more.

A day becomes worst for me when I visit or transact with any Govt. Undertaking Bank. I think many of you have had bitter experiences banking with Indian Nationalized (Govt. undertaking) Banks. Some people are banking with such banks, keeping in mind of Govt. support. Knowing the customer’s weak point, the bankers continue to misbehave with their customers without hesitation. I have seen many, especially old age people (and people who are not well aware of banking formalities) being harassed at the bank premises.

With the globalization of business, the banking scenario has changed a lot today. Now we have the opportunity to enjoy world class banking even from home. Reserve Bank of India (controller of all banks in India), is taking initiatives to create a competitive environment in the banking sector.

But the basic reason for staying with a nationalized bank is the Government support. In spite of the negative factors, like low interest rate, misbehavior, etc. people are rushing towards the nationalized banks only for the safety and security of their money. As a result, such banks are earning huge profits every year. Ultimately the banks’ management team is unable to get the idea about public satisfaction level.

The main reasons why people avoid Private Banks are:

1. Insecurity: Since there is no Govt stamp behind them, people think that their money may be forfeited in future. After all they are putting their most cherished thing in life (money) with Banks.

 
2. Better banking environment: Indian private banks are well decorated, furnished and air conditioned. People think that there may be some extra charges for that. But in govt. banks it’s very simple and ordinary. Common people prefer Govt. banks here.

3. Overall culture: Middle class people are not acquainted with private banks’ culture; like tele-banking (inside bank), mobile banking, internet banking, and even speaking in English language etc. Common people don’t want such complex situations for banking.

4. Minimum amount deposit: In case of savings account the minimum amount to be deposited in savings and other accounts is higher than Govt. undertaking banks. So, middle class people don’t want to bear this extra burden with private banks.

5. Technological misuse: While banking through internet, there is possibility of false transactions. If the passwords are leaked, money will be lost and it becomes very tough to retrieve the amount, so it’s a risky option.

My view point in favor of private banks:

A. Most of the corporate sectors are with private banks: Most of the private / public sector companies are choosing private banks for their operations. Because its Private bank that can run with the speed today. They are the real definition of convenient banking.

B. RBI’s support and encouragement: RBI has created the platform for the private banks simultaneously keeping an eye on their activities. If they find anything unethical or violation of banking rule, they take immediate actions and recently RBI has ordered to shut down operations of a bank. So we don’t need to fear about loss of money.

C. It’s our pleasure to enjoy technology: Its we for whom the modern inventions are brought. So let’s experiment and experience the modern technology.

Conclusion: we need to give them more support and business. The banks will surely come up with better rates. Banks ultimately want money and business; they hardly bother about whether you are literate, English-speaking, well dressed etc; they have created the sophisticated environment for us only. The banks are ready to welcome people dressed simply but with lots of money in the pocket.

So my suggestion is - step in the private banks fearlessly, bank with confidence and enjoy the modern technology.

Technorati Profile