04 KALEIDOSCOPE ERGO Monday, June 15, 2009

At a glance
Reliance Infrastructure Fund
Fund philosophy: To give investors long-term
capital appreciation by investing mainly in equities
and related instruments. The investments will be
only in equities related to the infrastructure and
related companies.
Opening date: May 25, 2009
Closing date: June 23, 2009
Offer price: Rs. 10 per unit
Finergo’s take: Infrastructure will be an industry
that will show consistent growth at least for the
next 10 years.

Quiz
1. What does ELSS stand for:
A) Employee Linked Savings Scheme
B) Equity Linked Small Stocks
C) Equity Linked Savings Scheme
D) Enterprise Level Securities and stocks
2. CAP in Large Cap or Mid-Cap stands for?
A) Capital
B) Capitalisation
C) Capacity
D) Capability
Send your answers to finergo@goergo.in or SMS
your answers to 92813 98889. For example, if you
choose A as the answer to question 1 and B as the
answer to question 2 type it as 1A2B and send it.
Winner will be chosen by lucky draw from all correct
answers.
Answers for last week’s quiz: Consolidation of banks will assure more government support as well as higher safety
20%
Palanimanickam

News you can use

No to consolidation
Banking on the
Employees of all State Bank associates have
shown negative sentiments towards the proposed
consolidation (Read lead article) of the public sec-
tor banks. They are of the opinion that doing so
power on oneness
would lead to a distraction in the core focus of the
banks from the common man to global competi-
tion. The employees association has called for a
What is it for you and me if PSBs were to consolidate?
strike on July 3. growth of these banks as well as to avail of loans.
DIVYA DARSHINI
divya@finerva.com boost the economy as a whole. 2. Government support will be
New mortality table for life insurance Although the PLR (Prime Lending more than before for there is less di-
The IRDA will soon be releasing the new table for

calculating mortality rates. The table is based on
latest data relating to mortality and is also based on
the data provided by different insurance compa-
nies relating to their claims. With this customers
could look forward to lower premium rates.
HDFC coming up with NCD
The board of Housing Development Finance
Corporation (HDFC) has approved plans to raise
capital of Rs. 4,000 crore through non convertible
debentures and warrants that could be converted
to shares at a later date. Although the NCDs will be
available only to Qualified Institutional Investors,
from a personal finance point of view it is a signif-
icant move considering it is one of the largest NCD
offering and also an indicator of market
sentiments.
F
inance Minister Pranab Muk-
herjee has emphasised the
need to consolidate Public Sec-
tor Banks (PSBs). He stated that
this merger of PSBs is very essential
for the country as well for the surviv-
al and growth of banks themselves.
For, it not only aids in the reduction
of risks due to financial stability but
also helps in improving the state of
competitiveness of Indian banks
globally.
Recently, the Finance Minister
met with the Chief Executives of the
PSBs and suggested that they look
through all the possible ways to fur-
ther reduce their lending rates. Ac-
cording to him, this will assist in the
Rate) of banks have come down by
1.75 to 2.25 per cent during the past
six months there is still scope for fur-
ther reduction. This will give impe-
tus to economic growth too. The FM
also pointed out that the Govern-
ment, as a majority shareholder, will
play a very supportive role in the
merger.
So, what does this mean for you
and me? Although on a macro level
consolidation can help the country,
there are a few positive take-homes
for us as individual investors as well:
1. Consolidation of banks may en-
able better returns on investments
and the lending rates could go down,
making it cheaper and easier for us
versification in policies and
procedures.
3. This would benefit the capital
markets tremendously and thus the
values of our stock investments and
mutual fund NAVs could see a posi-
tive growth.
4. Indian public sector banks
could become more competitive in
comparison to global banks, thus
enabling them to offer cost-effective
yet world-class financial products.
5. Common investors can be more
assured when investing in these en-
tities as there is more government
support as well as higher safety. This
is very critical, especially after what
happened to the large US banks. ■