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Go for schemes, fund houses with track records

Mint, Hindustan Times and NDTV, bring you a personal finance show, Let’s Talk Money. The weekly call-in show, anchored by Monika Halan, editor, Mint Money, and Manisha Natarajan, editor and senior anchor, special programmes, NDTV, aims to answer viewers’ questions about money-related issues. Here are edited excerpts from the show that aired over the weekend on NDTV Profit and NDTV 24x7.

india Updated: Nov 28, 2010 21:54 IST

Mint, Hindustan Times and NDTV, bring you a personal finance show, Let’s Talk Money. The weekly call-in show, anchored by Monika Halan, editor, Mint Money, and Manisha Natarajan, editor and senior anchor, special programmes, NDTV, aims to answer viewers’ questions about money-related issues. Here are edited excerpts from the show that aired over the weekend on NDTV Profit and NDTV 24x7.

Natarajan: Sebi has asked mutual fund houses to be very careful of the debt paper such funds will invest your money in. Sebi has also asked fund houses in general to keep new products or schemes simple and less complicated. Should you go for a new mutual fund product or scheme when you already have established fund schemes with a proven track record?
Halan: You have funds with over 10 years’ performance record, why would you choose something new? There are only two cases in which you go for a new fund — an ETF (exchange-traded fund) or a gold fund, or they are looking at a new part of the market like the go-anywhere funds.

Natarajan: What about capital protection? People are getting risk averse and that’s become the new mantra now.
Halan: You would be careful, a good pedigreed fund house with good paper is not a bad idea, but I would be very scared of the fund house with not such a good reputation offering these products.

Paulami Ghosh, 34, a lecturer from New Delhi: I have an ICICI Prudential Super Pension Policy. Due to some problems I was not able to pay the premiums for 2 years and now when I contacted them, they said it has been foreclosed. Can I get back the money, if so how?

Halan: I am sorry to tell you but you are a victim of what you call a lapsed policy. Unit-linked insurance plans (Ulips) before September 1, 2010 were built like traps. So if the agent caught you once and you paid the first premium, your only option was to go on till the term of the policy or if you missed the payment, that entire money was gone. The rules are now different. Tell the company you had a problem, you want to continue with the policy and possibly with a small fine they will allow you to do that.

Arun Topwal, 32, information technology professional from New Delhi: I owned a credit card in 2004, and had done a purchase of around R13,000. As I was too young that time I could not keep a track of my credit details. The interest kept on getting accrued. Due to the nature of my job, I moved from one city to another. When I came back to Delhi, ICICI Bank tracked me and asked me to pay the money. Due to my work I could not pay back the money. Then I changed my job and opened a savingscorporate account in ICICI Bank. One fine day I was surprised to see that ICICI Bank had transferred around R29,000 from my savings account in favour of my erstwhile credit card.

My questions: how can a bank withdraw money for my savings account without my knowledge? How can I recover the money which was charged as interest, which is about R16,000?

Natarajan: Unfortunately Arun, there is no recourse here at all. Banks have a right of lien — a lien is the right of a creditor in possession of goods, securities or any other assets belonging to the debtor, to retain them until the debt is repaid. They are actually on the right side of law in transferring that money out.