Falling oil prices : A boon to the Indian economy!!!

Recent news suggests that oil has come down to a 22-month low of $55 per barrel, almost a third from its record high of $147 in the heydays of the stock market fluctuations and inflation concerns in India. Even though the OPEC (Organization of the Petroleum Exporting Countries) had assured that they would do whatever it takes to achieve financial stability in the market, oil prices are still not gaining positive momentum. The main reason responsible for this outcome is that the OPEC's personal reputation in the market has also taken a hit in the global crisis, and word has spread across the market that the oil price needs to be at least in the range of $70-75 for the OPEC to maintain profitability. What further lowered down the expectations of any significant price rise were the forecasts of the US Energy Information Association(EIA) and the International energy Agency, both of which predicted a fall in their respective oil demands, hence leading to an unbalanced supply-demand equation.

Today, oil fell by 5 percent, aided by a drop in the US stock markets and the US government's change of stance over how it would use the $700 billion bailout package. More forecasts by the EIA portrayed that the US oil demand is set to fall by over 1 million barrels per day(bpd), and the world oil demand is slated to rise by just 100,000 bpd in 2008 and remain almost flat in 2009.

And while all this is happening, it might come as a bit of a surprise to see why there have not been any statements made by the Indian government regarding a possible fall in the fuel prices. However, the true picture is something else. As a matter of fact, the government had been losing out a substantial portion of money even while it has hiked the petrol and diesel prices, somewhere in the order of Rs.4-8 per litre, to make sure that the general public did not have to put up with the recent market turbulence. Hence, although it is not seemingly any sense of relief to the masses that oil prices are down, it is helping in stabilizing the economy. Further, even the inflation rate has gone down to less than 9%, also due to the fall in oil prices. Hence, even though there is no future scope of a decline in fuel prices, it is altogether a good sign that even though the Indian economy has taken a major blow due to the global stock market debacle, the fall in oil prices has come as a very welcome positive impact for all.

Paying EMI's proving thorn in one's side

Even though the total household debt in India from the formal sector amounts to just over Rs.5.58 lakh crore, (might seem a big amount to say ONLY, but that's about hardly 10% of the GDP), but the figures have upsurged during the current economic slowdown making the middle class in metros susceptible to a financial deadlock. Recent studies have revealed that middle-class households across metros like Delhi, Chennai, Bangalore and Mumbai cough up spending approx. one-fourth of their hard earned income on paying EMIs. And the major-league expenditure include paying up for housing, auto, durables and personal loans. Nearly two-third of these households have resorted to personal loans in the last two years itself and over a third of people in these metros have invested in stocks.

As per a recent consumer survey conducted by the prominent New Delhi based market analysis firm, Indicus analytics, salaried households in Kolkata pay up to 27% of their monthly income on EMIs. Talking about Mumbai, the stats reveal that the non-salaried class carry the maximum personal loan burden amounting to Rs. 1.45 lakh. Gold, provident fund as well as fixed deposits have remained a hot destination for investors, particularly the south Indians, with about one in every two households investing in yellow metal.

Coming to the point, it is not a rare sight to see hoardings of EMIs as one travels, hear and see companies offering the 'best' schemes and trying to outdo each other to grab the market. While on an outset this might seem very lucrative for the consumer who is being offered different options to chose from, consumers must realise that the same is only meant for those who are in need of something but can't afford to pay for the same in a lump-sum amount. But the current trend is obviously something else. Not to offend anybody's personal sentiments, those who were earlier in need (and could afford) only a two wheeler, can today easily opt for a small car courtesy EMIs. The result, they end up paying a substantial amount of their salary on something they don't really need. Considering the current market scenario when many banks across the country are being rumoured to be in financial crisis (let's leave the talk of politicians for a moment), would it really be a smart decision to go for an installment scheme until and unless you really need it? I think otherwise.

How to get yourself going in a down stock market?

The current market scenario is making investors think really hard over what to opt for and what to avoid. Even though inflation along with crude oil prices have also taken a hit, the situation is not positive by any means, with the sensex now looking towards returning to four figures. Yesterady, the sensex crashed yet again as even more top-line stocks fell to their 52 weeks low and closed at the same levels without any sign of recovery. Investors still have to line up and wait for their turn till the market becomes stable. But the question arises, what are the investors supposed to do in this situation?

It's high time when an investor has to take a look at his portfolio and get them reshuffled so as to give more preferences to companies enjoying leadership position in several segments of the industry. Investors need to take into account that their portfolios need to be switched to large cap in case there is higher exposure to mid cap and small cap. This is because large caps, which are the asset class and are hence slated to move up first when the markets revive, are clearly the best bet, and more so in a down market which makes them all the more affordable. Moreover, it is better to enter equity particularly through diversified equity funds in case the exposure to equities is low.

The next precaution is to never put one's eggs in the same basket; it is always better to invest in diversified stocks. This call of action safeguards the interest of the market players due to the presence of vulnerability of any particular stock becoming a prey to the whims and perpetually changing market scenario.

All in all, investors are advised to keep themselves invested and use the current downturn to add more stocks to their inventory in a systematic and disciplined way. Not only this, they should also look forward to following a proper asset allocation methodology to curtail risk to a certain limit, in case they are interested in relatively short term gains.

Seeking Desperate Refuge!

The other day I was reading Ashani Sanket, a novel by Bibhutibhushan Banerjee, which dealt with the atrocities of undivided Bengal during the time of famine. I was moved to read that despite plentiful rains and good harvest, rice, the staple food there, had become unaffordable by thousands of people. The price rise made the situation even worse.

What all is happening in the financial world in the emerging economies is similar to the plot of the story. Not only has the financial sector in the west been trampled underfoot with economy crashes all over, it has had its fair share of impact on the Asian markets as well, with India also getting a fair amount of shocks, and the most surprising fact is the ferocity and swiftness of the impact.

A few years back, Fed Bank in the United States was following a monetary policy where the govt was offering plenty of credit at affordable rates. As it happened, the property prices rose, even those who could not afford to buy got enticed by the predatory lending practices and bought properties. However, it so happened that with the rising interest rates, declining property prices and a slowing economy, people resorted to defaults while repaying back.

It was mainly the institutions that had significant investments in mortgage backed securities created on a pool of assets that were hurt most. Moreover, institutions that had sold credit derivatives started incurring huge losses as credit worthiness of the real estate sector went into a turmoil. Lastly, the very fact that institutions had financed their positions through high leverage in the form of short term borrowing added to the already existing financial chaos. This move forced them to follow a policy of refinancing their positions frequently. However, as asset prices fell, these institutions found it hard to do the same. Eventually, the cost of funding start going up but a point was reached when it became impossible to make the funds available.

This contagion which began in United States is gradually making a headway towards Europe and is threatening to eat up the rest of the world. The question is- Where to take refuge? Who is going to help? And even as governments from all over the world try their level best to restore order in their respective financial industries, what is actually needed is some sort of a new world order that can at least minimise, if not isolate, the adverse impact of one country on the global economy. Impossible? Probably. But all the more essential.

US Financial Meltdown Proves Fatal for Indian IT Industry

The US financial crisis has made headlines all over the world and this meltdown will pose a long lasting impact on the $50 billion Indian IT industry. Companies that bet heavily on banking and financial sector will find no safe haven whatsoever while others will look towards taking the shelter of non-banking sectors to keep their business afloat. The Indian IT sector is facing tough times ahead as it is evident from Nasscom's downward revision of growth forecast. It is predicted that while the big players in the IT industry will be able to survive the shock, the small ones will not be able to sail through.

Analysts are expecting that this global meltdown will continue throughout the fiscal year 2009-10. Till then, the world will have to witness to huge salary cuts, single digit hikes, unoptimized employee lay offs and insipid sequential growth. As per analysts, the second quarter will be the weakest one in many years. It is expected that the rupee will not show any further depreciation, thus nullifying every possibility of any future currency gains. None of the major business entrepreneurs will try to place its foot in this otherwise crestfallen market.

The most crucial factor which is posing a threat to IT majors is the fall in pound and Euro against the dollar which is the reverberation of panic selling of investments by foreign institutional investors due to their lost confidence in global markets. This has in turn resulted in demand for the dollar against the pound and the Euro. The backwash effect is a sharp fall in the value of those currencies leading to a decline in the operating profit margins of IT companies exposed to pound or Euro revenue. The key players in the industry that includes Tech Mahindra, Infosys and Wipro earn a major chunk of their revenues from British and European clients. And the fall in currency values of these countries will adversely affect the business of IT giants. Further, the $700 billion bailout by the US government is backed by no assets, & hence will certainly lead to a long-term global inflationary trend.

In the current scenario, the best practice which the IT sector must employ to survive the crisis is to resort to other destinations to make their revenue portfolios risk free. With regards to this, investment surplus countries like Russia and West Asia are preferred destinations to look forward to.

Where to Invest and where not to?

The current market trend is giving shudders to investors all across the country, as they are finding it tough to pick on the sectors that offer the safest bet. With the volatility in the market still in continuance, investors are cutting short of their expectations. Not only this, with the slump in the market, even the institutional investors are seen running after profits in short intervals.

The recent records show that not many sectors promised to pay returns to the investors as were expected. Most sectors are reeling under severe pressure to sell their shares on a rotational basis. In this scenario, it is advisable for the investors to pool their money with caution, taking into account a broad overview of sectoral perspective in their mind. But this strategy will prove beneficial only when the investor is considering to invest for a horizon of at least 2-3 years. It is not sure that the selected sectors will provide only aggressive returns as there is every possibility of some sectors proving defensive in nature. But a mix and match of these sectors will be in the interest of the investors as it would help them in beating index returns which are likely to be flat in the next 6-9 months.

One of the adversely affected sector in the recent global scenario is technology, but the rally of the dollar and a huge support proposed by the US government for stabilizing the financial crisis has in turn shortened the recovery process for this sector which was reeling under a severe slump. Now, most players in this sector are looking forward towards rationalization of expenses and manpower strength as this will in turn prove beneficial for the tech companies to regain their lost status in the market. Stocks which were earlier being priced in negative terms are now showing an upward movement in the range of 10-15 percent which is good for traders.

Another sector close to heels is the banking sector as it is in news for offering long term picks to the investors. A combination of well managed private banks and fundamentally good PSU bank stocks is what the investors must opt for. There is every hope that the domestic market will improve in the next one year offering the investors several opportunities to buy the stocks at regular intervals, provided the investors possess liquidity to make use of these forthcoming opportunities.

US financial crisis : A lesson for India

Looking back at the heydays of the Indian stock exchange, it's not news to the quintessential investor that derivatives were being seen as the next big thing after shares. However, since the recession in January, practically everything has fallen down, leaving little choice to any investor. The recent US debacle has also had its impact on stock exchanges around the world. However, while the former is of prime concern to us, we can also learn a lot from the latter. India's chief economist, Arvind Virmani, is of the opinion that India should take heed from the US situation and encourages investors to only invest in derivatives that are exchange traded. In his own words, “You have to be cautious. Say, for example, when derivatives are mentioned, the implication to me is that you should try and first open up derivatives which are exchange- traded because those are much more transparent.” For those of you who don't know, there are basically two groups of derivative contracts in India, Over the Counter (OTC) and exchange traded. OTC refers to a situation when contracts are traded between two parties directly with/without the use of an intermediary and without going through an exchange, while exchange-traded derivatives, as the name suggests, are traded on an exchange.

He further added that even if some people do lose out on certain derivatives, it could at least solve the purpose of others getting educated about staying away from the same. Relating this situation to the US situation is not a hard task. Even in the States, the structure of deals was a very complex one, with the common public clueless about what is happening. Analysts point out that the sub-prime crisis in the US went on to such a magnanimous scale primarily because lenders as well as sub-prime housing borrowers sold their portfolio through complex derivatives to other players, hence making it unclear as to what would be the size of losses to individual firms in case of a financial crisis.

According to an article in the Economic Times, the RBI and SEBI have recently permitted exchange traded currency futures, initially in a rupee-dollar pare, and are expected to allow exchange-traded interest rate futures by December-January. Further, there are certain OTC derivatives also in the interest rate and currency futures categories. I firmly believe that it is high time now that the government steps in with some regulatory measures to monitor derivatives, since we, as a country, can surely not afford another economic crisis at this stage.

Short Term Mutual Funds- The saving grace amidst all the confusion

I was just going through the Economic Times website for some new scoops to write about this morning when my eyes fell on this rather interesting article, to say the least. The article stated that in case you had invested your money into liquid mutual funds scheme some six months ago, then the right time has to reap the benefits was now, since statistics show that the last six months have depicted an average rate of return close to 4% on the investments in short term money market instruments. The analysis was conducted on 14 different types of open-ended mutual fund schemes which are continuously opened for subscription and redemption purpose.

It is normally seen that liquid funds offer lower returns as compared to other avenues. This is mainly due to the reason that these funds are available at low degree of risks. Linking to the soaring interest rate regime, short term mutual funds topped the charts in terms of offering positive returns. Next came the 'debt and debt (income)' mutual funds, with the only other scheme yielding positive returns in the last six months being the GILT funds, that invest only in government securities of different maturities.

Let's take a look at the general scenario over the past few months; funds that are exposed to equities haven't performed that well since the stock market crash in January. The average six month returns of equity funds (278 schemes) stood at (-)9.59% while the same for Exchange traded funds, Balanced Funds, Sector Funds and Index funds ranged between (-)16% to (-) 19%. Monthly income plans (MIP) funds, designed to give regular rate of return to the investors, have also done reasonably well when compared to equity linked schemes.

So where does that leave the investor? After considering all the above-mentioned factors, would he still be willing to risk his savings in the stock market for a mere increase of 4%, which can easily be had by any FD (add to that the reassurance of not losing out on any money)? I really don't know. Because the way things are going, it really seems like 2008 is going to be a very difficult year for the Indian economy. My advice : Put money in stock only if you are a long term player, and figure something else out for your short term needs, if any, because the Sensex is definitely not in the giving mood these days.

Are we over with the financial crisis?

Probably the much awaited part of the year has turned up. A slump in world oil- prices along with appreciation of US dollar has made everyone to think over whether the undergoing burgeoning pressure faced by the world has come to a standstill. Are we really over with the financial crisis? Economists all over the world have projected global economic conditions have will remain difficult for some time. However, future prospects seem good as it is predicted that economy will recover due to growth in China and rest of Asia. It is viewed that equity markets would regain strength over time, but it is not possible to tell when it would occur. I strongly believe that there is nothing to worry about as this phase of continued difficulty due to lower growth along with higher inflation will pass out eventually just like economies the world over have faced similar situations over different periods of time, if not worse, and have recovered.

The latest stats indicate that emerging economies like Brazil, India and China have been performing well and it is expected that the global economy will grow at 4 percent over the next fiscal year. Some economists have argued that lower oil prices will have a deflationary effect on the world economy, since this will in turn lead to high consumer spending as well as exports. In most likelihood, it is order to suppress this phenomenon that governments all over the world have decided to hike the interest rates for loans as this move will pose a large impact on consumer demand. So does that mean that after oil prices drop, the situation would return back to, well, normal? This is a rather tricky question to be answered so soon, since we have all been witness to how many times the stock markets, the foreign exchange, loan rates, and practically everything fluctuate so dramatically in the last few months. But yet, all we can do is hope.

Insurance Plans- Choose what Suits You

Usually, one holds an insurance portfolio that consists of only a term cover and a Mediclaim policy. A family takes refuge of an insurance policy mainly to finance its needs. Different persons have different needs and to satisfy these, insurance companies have come up with different plans, and continue to update on the same. It is essential to keep revising and improving insurance covers just as we re-examine our investment portfolio time to time. While buying any insurance policy, one must focus on the number of dependents as well as the amount of financial protection they are provided after the demise of insured person.

Although there are host of insurance plans suiting all age groups and purposes like children's education plan, retirement plan, life insurance, etc., one must choose the one that suits him the best, since the basic motive behind offering these plans remain the same, i.e., providing maturity benefits to the person till the end of policy term or death benefit to the dependents of the person in case of his demise.

In my viewpoint, it is better to opt for multiple policies as one can take the advantage of latest insurance products available in the market. These days, people are more inclined towards taking Unit Linked Insurance Plans (ULIPs) as these investment cum insurance plans aim at offering excellent returns. Another plan waiting to offer you the best is the term insurance plan, which works out best if you have dependents. Not only is this plan cheap, but also provide a comparitively larger cover than most insurance policies. Another category of insurance, endowment plans, are sought after those who are very skeptical towards taking risks and want assured returns, although the premiums are higher than term insurance plans. The latest scheme to hit the financial circuit is a combo of term and ULIP plans which returns back your premium but not the insured amount has recently hit the market, and is also a good option.

It is a good point to note that insurance as an instrument has undergone a drastic change in terms of its

relevance for the common man. Earlier, this was seen as just a kind of a reassurance in case things went otherwise, (life insurance, accident insurance). However, with the expansion of the investment market and the diversification of insurance plan options, the same is now also an attractive medium for savings . Hence, keeping that in mind, I sincerely believe that one should reconsider his investment portfolio as well while looking towards adding on more investment options.

Sleepless Nights for Tata Nano

Recently, in a press conference, Tata Group Chairman Ratan Tata announced to withdraw from Singur project, if the ongoing distress continues. With this announcement, the dream project has turned into a nightmare for the team members who worked diligently to make it a successful venture. Earlier, it came as a bit of a surprise when Ratan Tata introduced his plans to locate the people's car plant in West Bengal. The industry experts were of the opinion that Tata's plans to make Nano a showcase for the state would usher industrial progress in the otherwise investment-starved state. But, ever since the issue was put forth before the public, it became a topic of controversy among majority of political leaders and environment activists. That the project needs the eviction of already residing farmers from there had created much hype among the people. The question which raised several eyebrows was from where the farmers would then earn a living for themselves. And the Tatas had no answer. Soon, the matter was taken to the court and became more and more violent.

For the Tatas, the Nano is much more than merely a Rs1 lakh car. After all, the Nano upholds the reputation of the company and the failure of Singur project would result in the loss of huge amount invested by the company. Moreover, the move will irreversibly hamper the future industrialization of the state and could take it back to an age of industrial vacuum. In my viewpoint, industrialisation is crucial for the development of social infrastructure and the development of the state must not suffer at the hands of political differences. The withdrawal of Singur project would send wrong signals to the investors and will take back the state to 70's era when the state witnessed large scale immigration of its industrial units due to lack of investment opportunities prevailing there.

As per the latest updates, Tata Motors have decided to work out on a business plan so that the company is not 'financially hit' if Nano project is withdrawn from Singur. As per the current proposal, the company has informally announced that it will provide additional businesses to Nano vendors who had invested in the project. The additional business plan includes the expansion of market for company's upcoming cars like the Indica Vista. I think that this crucial decision is sure to allow the vendors to recover the portion of losses if the Singur project is withdrawn. Tata Motors has also requested its vendors not to create a hype as everything will soon be under control. However, I firmly believe that not all is going down well for the Tatas as well as the town of Singur, which was looking forward to its first signs of rapid industrialization. Let's see how the story unfolds. As for now, we can only ke[p our fingers crossed.

Inadequate Credit Monitoring hits card repayments

The recent trend in the market has shown a spurt in late credit card repayments mainly due to inadequate credit monitoring system in India for large players like Citigroup. According to official statements, the bank's Asian credit card operations have been performing well, except in India. According to an article in the Economic Times, bank officials have blamed this rise in delinquencies as a result of the lack of robust credit monitoring operations in India, and have voiced their opinions over the lack of an authorized bureau for this purpose. However, even credit card providers are not entirely innocent in this matter

In today's cut-throat competition, in order to lure customers, credit cards are being issues free of charge by negotiating on the requisite attention that needs to be paid heed. It is not uncommon to receive a call from any DSA or bank informing you that you are now 'eligible for their gold/platinum card and asking if you would be interested in the same (many times they don't even ask, and ramble on regarding the documentation and benefits) initially, Citibank was the premier player in the credit card domain. However, with the passage of time and the gradual expansion of market, many other players like HDFC, SBI, etc. encroached upon its space, which eventually led to banks giving cards free of cost and not being completely transparent with charges like annual maintenance fee and the likes. Recently, even the RBI has taken strict action and issued guidelines against banks that have been issuing unsolicited cards.

At present, CIBIL(Credit Information Bureau of India) is the country's one and only functional credit Bureau where the banks can report delinquent customers there. However, at present, majority of the banks are not satisfied by the way it has been performing. In the wake of all this, the finance ministry also had announced the setting up of a private credit bureau in the country along with the RBI earlier this year, which had prompted foreign players like Experian to come to India. In recent news, even IDBI Capital and CARE (Credit Analysis and Research) have collaborated in their efforts to set up a credit information bureau. However, while all these moves are towards the benefit of the economy, I would like to point out that this is just the begining for these initiatives, and much has to be done to ensure the smooth functioning of the same. Hopefully, we will soon make headway into this area, which is all the more essential in today's circumstances, when we so desperately need a stable economy.

Who is going to benefit from revised pay scales?

Recently, the Sixth Pay Commission adopted the revision of salaries of the government employees ranging from 25% to 50%. While this is the general average for all, the hike is exceeding 75% in case of high-ranked officials like IAS officers and the likes, clearly defining the government's ecstatic mood after the vote of confidence for the nuclear deal was passed. This revision, spanning through all three classes, namely, high, middle and low, of the Government service structure will benefit 1.86 lakh employees across the country in total. Apart from salaries, government employees will also enjoy substantial allowances for purposes like transport and others. However, while computing increments, these allowances will not be considered as part of salary.

The revised pay scales will not only act as a favor to central government employees but will also add an estimated amount of Rs 4500 to 5500 crore to the exchequer this fiscal year in the form of personal income tax. Since the increased pay would go into buying goods and services, the government will earn more revenue in the form of indirect taxes. Although the increased payout will add to the burden of the Central Government, but it is expected that one-fith to one-fourth of this amount will come back to government exchequer in the form of personal income tax and indirect taxes.

However, coming to the corporate sector, it is expected that none of the companies will be favouring an unexpected hike in salaries this year. This is because sectors such as automobiles, banking, IT and retail have been hardly hit by domestic inflation. Market experts are of the opinion that the average rate of increase in salaries across sectors is going to slow down this year. However, in my viewpoint, the future seems bright as majority of the companies are expecting salary revisions to be implemented in year 2009 with performance of the individuals acting as the major evaluator. Further, big market players like ICICI bank and Maruti Suzuki are gearing up to make changes in the compensation structure to be implemented from next year. Just wait and watch.

Mutual Funds- A Promising Investment Option

The market is continually facing volatility which has led to panic among the investors. Further, constantly fluctuating global economies have had their share of impact on the sentiment of the Sensex, hence making it difficult to take a call on any particular stock . Many investors who had placed their money directly in equities after the phenomenal bull run of last year have suffered heavy losses. Several stocks which were trading at all time highs have tumbled to their yearly lows in a matter of months. In this regard, equity oriented mutual funds, which are currently hovering around at very low NAVs, are the right opportunity for long term investors to invest and get handsome results.

The main advantage that mutual funds offer is that of a diversified portfolio investment which reduces the risk because all stocks do not decline at the same time and in the same proportion. A gullible investor hardly achieves anything in the course of direct stock market trading whereas the same amount of money invested in top- performing MF schemes fetches him handsome returns. For instance, if I invest only in FMCG and due to some government policy, the entire sector crashes temporarily, I would have to wait until it comes up again to recover my investment. However, had I invested the same amount in a top-performing MF (which is not difficult to find out, courtesy all the popular business publications that give you all the data) I might have not only recovered my investment, but also earned a handsome return. Many of you might be believing that mutual funds, although safe, do not give as profitable returns as direct investment into equities. While I do agree with you to some extent, there are also many mutual funds that give a result of 40% on an average, which is not a bad investment by any means. What's more, you are almost assured to get back your investment, since your money is being handled by industry analysts who are often very accurate. This option is particularly beneficial to the service class, who don't have the time to analyze market trends, and yet want to invest in stocks. Hence, investing in a mutual funds is far more beneficial not only in the present turbulent circumstances but also in general, since the scope for getting a handsome results is now at par with investing directly in equity.

Avail Top-Up Insurance Cards in your locality

With the advent of mobile technology, market players are all set to join the bandwagon to make use of this technology to capture the market. Currently, the financial services industry is eagerly looking forward to refurbishing its lost potential by going mobile. The most recent initiative in this regard has been by Max New York Life Insurance, that has taken the initiative to introduce the concept of pre-paid insurance cards to the people at large.

The company has roped in the leading technical service provider IBM to make this plan turn into a successful one. It will be for the first time that the company will be issuing insurance contracts issued on the spot through hand-held thermal printers connecting to the back-end support via a cellphone network. This distribution strategy adopted by Max is similar to the one adopted by mobile industry for providing talktime to consumers.

The company plans to stock retail stores in small cities and semi-urban areas with start-up packages ranging from Rs. 1,000 to Rs. 2,500. This offer comes in three denominations and offers five times the sum insured. The money can also be topped up or withdrawn. However, there is a lock-in period of three years for withdrawal. The subsequent top-ups will be as low as Rs.10. It is assured that the earnings of the policyholders are going to improve. In my viewpoint, such strategies can pave the way for the Indian Insurance market to clinch a name for itself globally and Max has become a dominant player which has taken the correct initiative to hit the bull's eye. However, it is going to be an extremely hard process in totality to convince the ever-skeptical Indian audience to purchase something as serious as an insurance policy over the counter of your neighborhood retail shop. Maybe some support from the government would also be required to make this project a success.