Finance Friday : Cheques To Get More Secure , Stock Market & The Union Budget

RBI To Introduce More Security Features in Cheques

In a bid to reduce cheque frauds and standardize the cheques across the banking sector, RBI has introduced a slew of new features for making the Cheques more secure.RBI has asked the banks to add more security features in the cheques they use.

The key security features include use of high quality paper , a water mark and an impression of bank’s logo in invisible ink

A water mark and the bank logo in invisible link can go a long way in protecting cheque fraud though cheques in various countries have had it for sometime, yet they also suffer counterfeit cheques.However, these security features will at least make life difficult for guys who deal in counterfeit cheques.It is actually surprising how easy is to do a cheque fraud here.

Moreover, RBI has instructed banks to move towards standardization when it comes to cheques.According to the instructions , the cheques being issued by the banks(commercial and rural) will have to be of same size and adhere to other prescribed benchmarks.

Given that a sizable transactions happen via cheques, specially in businesses , it only seems prudent that stringent security features are introduced.Hopefully , this will help put a check on the unabated cheque frauds that happen in India.

However, i was wondering if RBI would rather put a little more effort in spreading the awareness on paperless banking.E-Banking is not completely virgin to forgery but i sure feel that it is a hassle-free and secure enough mode for carrying out transactions.But there is a long way to go since “Old Habits die hard” and the age old traditional businesses would continue to use cheques.

Stock Markets anxiously await the Budget, Which Direction Will They Swing

It’s that time of the year again.There are not many events that can cause wild swings in the Indian Stock Markets but the Union Budget has to be a show stopper.The markets have been trading flat for quite some days with a negative bias.Budget Announcements have kept the investors sitting tight with their cash and await the budget announcement tomorrow to make their move.

We had a detailed analysis of Union Budget 2010 Expectations the other day and the points mentioned here could have a significant impact on the Stock Market.The Fiscal Deficit has become a cause of worry for the government and the partial rollback of stimulus measures is expected.Changes in the Indirect Taxes could cause a knee jerk reaction in the Stock markets though it will help ease the fiscal deficit in the long term.However, if the relaxations in the indirect taxes are rolled out to a huge extent, the corporate India might see a dent in their profitability going forward.

Food Inflation has seen a meteoric rise and the Budget will have to come up with favorable measures to tame the inflation.If the budget does not cover specifics into keeping a check on inflation, the markets may not take that favorably.The aam junta will only be able to invest money when the rising food inflations don’t eat into all savings.

However, overall this year’s budget has not managed to generate the kind of buzz that generally surrounds pre-budget period.May be it has got to do with an anyway timid stock markets.The year has not been very good in terms of stock markets and global cues have not provided any positives either.So, the market slump could very well be to other forces and there might no real expectations from the budget as such.

Expectation in the Stock Markets is the recipe of disaster.So, in a way it might do the market real good if the Union Budget is able to pull out a few positive surprises.That would definitely cheer the market and provide the much need fillip to the otherwise dull markets.The market expectations were huge during the last year’s budget but then the story did not turn out that great for the markets post budget announcement.

In my opinion, any budget will not be able to satisfy all sections of the industry.Even in a evenly balanced budget , a few companies will make merry whereas a few would suffer.So, hinging on the Union Budget in terms of Stock Market may not be a very good thing to do.But then again, when long term investing sentiment is at a low, the investors would much rather wait for the budget announcement to see how the markets react in short term.

A 400-500 point swing can surely change the course of the game where in a downside will create oppurtunity for value buys and a upside could provide Â already invested buyers some respite.Well, an upside could also have some investors( like me) who have not built any positions to woo the decision of building fresh positions pre-budget.