Financial Planning For the Future

Back in 2009 the UK Payments Council, the organisation which sets the strategy for UK payments, announced that the good old-fashioned cheque would be phased out by 2018, but now it seems to be having second thoughts. Chairman Richard North now says that a decision on whether or not to scrap the cheque will be delayed until 2016 at the earliest.

I’m not sure I would miss it much myself, because I don’t write more than one or two cheques a year these days, but its demise is feared by some people, notable the elderly and by charities. There are concerns that some older people, who have spent most of a lifetime relying on the cheque book to manage their finances, may resort to using cash instead, putting themselves at risk of loss or theft of their money. Charities are worried because many of them depend on the cheque as their main source of income from donors.

The cheque is a paper-based payment method which has been around for many hundreds of years, although there seems to be some dispute as to its exact origins.

According to the website of the Cheque and Credit Clearing Company, its roots lie in 13th century Venice, then an important centre of international trade, with the need to find a method of paying for large amount of valuable goods without resorting to dealing in huge and cumbersome quantities of gold or silver. Wikipedia cites some even more ancient origins, including an early form of cheque known as praescriptiones, used by the ancient Romans in the 1st century BC, and the Adesha, a type of bill of exchange used in India during the Mauryan period (321 to 185 BC).

The first cheque ever written in the UK was issued by Nicholas Vanacker over 350 years ago, instructing Messrs Morris and Clayton to pay £400 to Mr. Deboe.

Famous cheque users include Terry Wogan, whose infamous Blankety Blank Cheque Book and Pen was the highlight of British prime-time TV viewing throughout the 1980s. And who could forget the scene in ‘Slumdog Millionaire’ where Jamal receives the giant cheque for one Million rupees on the Indian version of ‘Who Wants to be a Millionaire?’

So is this the end for the cheque as we know and love it? Many small businesses are praying that it is not the end, as they still receive cheques in payment for the bulk of their transactions.

In a recent House of Commons evidence session, Treasury Select Committee Chairman Andrew Tyrie described the announcement as “colossal error of judgement”. Conservative MP David Ruffley accused the Payments Council of ‘rank incompetence’ over the issue. After receiving more than 1,200 letters on the subject, the Treasury committee has reopened its inquiry into plans to phase out cheques.

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NRI and PIO, do you fit the legal definition of one? NRI is a Non-Resident Indian, a citizen of India now residing overseas. PIO is Person of Indian Origin, usually not a citizen of India, but an individual of Indian descent. According to the Government of India, anyone of Indian descent up to four generations removed is a PIO.

If you are an NRI, you will have a wealth of opportunities available for you to invest and grow your money. The one you should not overlook is the option offered by the Indian banking system. Many NRIs want to remit money to India, this is the practice of sending money earned abroad back to your home country. Remittances to India have increased from USD 2.1 billion in 1990-91 to 55.06 billion in 2009-2010.

It is now much easier to remit money to India. Earlier this was done either through electronic means or by demand draft. Today many banks offer money transfer facilities which are incredibly useful when you want to remit money to India. The NRI Bank Account is essentially an Indian account opened for an NRI. It is a wonderful tool of the Indian banking system for NRIs with banking needs in India and abroad. NRI Bank Accounts are divided into 3 further account types; NRE, NRO and FCNR. NRE and NRO are both rupee denominated accounts. The NRE receives funds from outside India and is fully repatriable while the NRO is non-repatriable and receives funds generated in India. FCNR accounts can be opened in 5 different currencies; dollars (US, Australian and Canadian), pound sterling, euro and Japanese yen.

As an NRI, placing your money in an NRI Bank Account is a means of diversification as it allows you to maintain funds in India separate from other investments. In addition, the NRI Bank Account can serve as a means of minimizing the risk of fluctuation in currency rate by maintaining some amount in Indian rupees in case of a fall in the value of the dollar. You can compare interest rates in India and in foreign countries, and decide where investment would yield the best returns.

You can also invest your money in deposits in Indian banks. Similar to fully fledged bank accounts, these deposits can be NR(E)RA and FCNR. NR(E)RA deposits are in Indian currency while FCNR is in 5 foreign currencies as mentioned above. Thanks to the watchdog stance of the RBI (Reserve Bank of India), you can be assured your hard earned wealth will be safe in an Indian bank deposit and will suffer a negligible impact from turmoil in foreign economies. Indian banks also won’t be as reckless with your money as a foreign bank, owing to stricter regulations in India.

Article Source: http://EzineArticles.com/6374333