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So How Safe Are Bank Lockers?


wealthymatters

According to RBI guidelines, banks are not responsible for the contents of the lockers. A bank only needs to provide for protection of the lockers.The relationship between the bank and the locker customer is that of a lessor and a lessee.Since the contents of the locker are never shared with the bank, it is not responsible for the contents.

According to Section 152 of the Indian Contract Act, a bank is not responsible for any loss or damage to the contents of a locker. Even the valuables deposited in lockers are not insured. A bank does not have the ownership or knowledge of the contents of the locker and hence does not have any insurable interest in the matter.

The situation is clearly loaded against the customer . For example, in case of robbery,the customer is not only required to prove that the locker was robbed but also submit evidence of the extent of the loss. Read more of this post

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India And Gold


wealthymatters.comThe picture on the right might be what comes first to mind when a lot of people think about India and gold–A bride decked out in gold ornaments.

Here interesting facts about Indians and gold:

India is the world’s largest buyer of gold, accounted for 32% of the global demand in 2010.

India’s annual consumption demand has risen from an average of 300-400 tonnes (1998-2004) to about 900-1,000 tonnes in the last three years (2008-2010).

India’s demand for gold rose by 106% Y-o-Y,in 2010, substantially higher than the 60% recorded by the second-fastest growing market- China.

Indians invest over 11% of the gross savings in gold, against less than 2% by the Chinese. Read more of this post

5 Financial Homilies To Reconsider


wealthymatters.comFinancial advice always needs to be nuanced.What is good for one person in a certain situation many not be so good for another in a different situation. Unfortunately people are always looking for simple advice and rules of thumb.If we over-generalize on generally sane financial advice we can come to a sorry pass.

Here are some common homilies that need some reconsideration:

1. A house is always a good investment:A house is a tangible investment that you could potentially live in.You could rent it out and make some money.Maybe it will help you save tax.Maybe you could invest in one to save for retirement.Generally saving for a house to live in is good in that it gets a family to start saving.But at the time of buying a house it’s important to remember that you are buying a house and not a home.So do not go sentimental and over pay.Buying a house requires a deal of legwork and hard-headed thinking.Overpay and you will have to worry about the fluctuation in market prices.Try to buy an encumbrance-free house at a discount.It adds a greater measure of safety to your investment.Buy when the markets are down to safeguard yourself.Next how you pay for the house makes a big difference.Try to put down a large payment to save on the total interest you will pay.Shop around for a good loan if you need one.Read the fine print.Check if there is a penalty on prepayment.Lower rates matter.Also check if the interest is calculated on a declining balance.Check for hidden costs starting from the processing fee,the lawyer’s fee and structural engineer’s fee and insurance.When you consider the EMI you want to pay, don’t be too optimistic.Pay increments and bonuses might not come on time.Remember that over longer periods something is bound to go wrong.It’s the way of life.Also if you pay too much of your income into house payments you will not have any money left over to diversify into other assets and derisk your investments. Read more of this post

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