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Business Standard
20-05-2025
- Business
- Business Standard
Visa revokes, illness abroad: How Indian students may face loan burden
Ritu, a 24-year-old Indian student, had taken a loan of Rs 45 lakh to pursue her studies in the UK. Last month, she fell ill and flew back to India so her parents could care for her. For now, she has had to pause her education abroad. She's not alone. Across countries like the US and UK, many Indian students are grappling with similar disruptions. Some have faced deportation after visa revocations. Others dropped out due to mental health breakdowns. In most cases, these are non-fatal but life-altering setbacks that throw their financial commitments into disarray. < Lenders usually don't cancel loans, even in serious setbacks < Relief (like EMI reduction or moratorium) is given on a case-by-case basis < Supporting documents are mandatory: medical, academic, or immigration-related < Full loan waivers are rare Ankit Mehra, CEO and co-founder of GyanDhan, said Indian lenders rarely cancel education loans, even in cases of distress. "In case of a serious setback, such as illness, deportation, or academic suspension, relief is assessed on a case-by-case basis with supporting documentation from universities, hospitals, or immigration authorities. Based on individual cases, lenders offer moratorium extensions, reduce EMIs temporarily, or allow partial repayment options. However, such relief measures are exceptions, not guarantees," Mehra said. Adhil Shetty, CEO of explained that moratoriums are usually limited to specific hardship events. "Education loan repayment can be paused or renegotiated in situations like serious illness or academic suspension. Many lenders provide a deferment period during which repayments are temporarily paused. However, complete loan waivers are rarely granted. In cases like deportation, repayment is still expected, though restructuring can be requested," Shetty said. Financial and emotional impact on families The toll is not just monetary. Sonam Chandwani, managing partner at KS Legal & Associates, said both students and their families bear the brunt. "A ₹20-40 lakh unsecured education loan at 11-13% interest can balloon to ₹50 lakh or more over a decade if repayments falter. Co-borrowers, usually parents, are legally liable. With many nearing retirement, their savings can be obliterated," she said. Chandwani said secured loans put assets like property or fixed deposits at risk. "Defaulting craters credit scores, blocking future loans for emergencies. The social stigma of default in India adds to the distress, and when paired with mental health struggles or deportation, the emotional toll is immense," she added. What education loan insurance covers < Usually covers death or permanent disability of the borrower < Does not cover temporary illness, visa denial, mental health issues, or academic failure < Families often misread the extent of insurance coverage < Students advised to read exclusions carefully System is rigid, relief not assured Under the Indian Banks' Association (IBA) Model Education Loan Scheme, loans come with a moratorium period covering the course duration plus 6 to 12 months. During this time, interest accrues, pushing up the total payable amount. According to Shetty, public sector banks guided by RBI's 2019 circular may offer some leeway. Private lenders and NBFCs, however, are far less flexible. "Restructuring options like extending the loan tenure or reducing EMIs are available, but banks demand hard proof of distress and approvals are inconsistent. Early loan termination isn't permitted," Shetty said. Mehra added that while GyanDhan has not encountered cases of outright loan termination due to setbacks, they've seen lenders offer support selectively. "We strongly advise students to maintain timely communication and keep documentation ready. Relief options like restructuring or forbearance require exceptional approvals from senior management," he said. Gaps in the loan system < Moratorium covers course duration + 6–12 months; interest accrues < No early termination of loan even if student drops out or is deported < Public banks may allow restructuring; private lenders often rigid < Documentation needed for relief: deportation proof, medical reports < Relief approvals often inconsistent and slow Outdated risk models and lack of insurance coverage Lenders typically assess default risk using the course type, university reputation, and co-borrower's income or collateral, based on RBI's 2016 guidelines. These models don't account for visa revocations or mental health issues. Chandwani said visa revocation is particularly crushing. "It cuts off access to high-wage foreign jobs, and India's ₹5-10 lakh annual salaries can't cover hefty EMIs. The loan system assumes a straight path to graduation and high-paying employment. It's blind to disruptions like immigration rules or illness," she said. She cited an example of a student deported after taking a ₹25 lakh loan. Back in India, he finds a ₹6 lakh job, with a monthly EMI of ₹30,000. "After 90 days of missed payments, the loan is marked as non-performing under RBI's 2018 norms, triggering recovery efforts, including legal notices or asset seizure. Families get trapped in a cycle of debt and despair," she said. Is student insurance the answer? Insurance, too, has its limits. Meet Kapadia, head of travel insurance at said foreign university insurance plans often carry exclusions. "A well-structured student insurance plan usually covers medical treatment, hospitalisation, emergency evacuation, accidental death, and travel-related issues. But many plans exclude coverage for academic failures, mental health, or deportation," Kapadia said. Many students buy supplementary insurance in India, which is more comprehensive. "Indian policies often cover pre-existing conditions, medical emergencies, personal liability, trip cancellations, and loss of documents," he added. But this doesn't solve everything. Shetty said families should be wary of overestimating what education loan insurance covers. "These policies typically cover death or permanent disability, but not temporary illness, visa issues, or academic problems unless specifically mentioned. Families must go through policy documents in detail," he said. Mehra said most lenders require students to take out loan insurance for the full loan amount. "These usually cover death or permanent disability, but in other cases, repayment responsibility falls back on the family," he said. No standard relief policy, slow grievance redressal While RBI's 2021 Banking Ombudsman Scheme allows borrowers to file complaints, relief is not always forthcoming. Chandwani said banks rarely have consistent internal policies. "Some public banks offer ad-hoc concessions, but private lenders often stonewall. Grievance redressal processes are slow, bureaucratic, and rarely offer meaningful relief," she said. She called for structural reform. "The system needs mandated loan insurance, automatic repayment pauses during crises, and coordination with mental health services. Without it, families continue to bear the burden for events beyond their control." The gap is wide. And for students like Ritu, the consequences are immediate, personal, and deeply tied to a financial system that expects the best-case scenario—even when the world has other plans. Automatic repayment pause during verified crises
Time of India
20-05-2025
- Business
- Time of India
Over 260 debt mutual funds beat fixed deposits rate in 2 years. Should you switch?
With SBI cutting FD rates by 20 bps and over 260 debt mutual funds outperforming them, many experts believe debt funds now offer a more attractive, tax-efficient option for low-risk investors seeking better returns than FDs. In the current market scenario, short-duration funds, medium-duration funds, dynamic bond funds, and gilt funds can be good investment options with different horizons. 'In the current environment, short-duration funds and medium-duration funds are ideal for those with investment horizons of 1–3 years and 3–5 years, respectively. Dynamic bond funds are also suitable for those who want fund managers to actively manage duration based on changing interest rates. For risk-averse investors, gilt funds, which invest in government securities, can be a good alternative, offering safety with potential for capital gains if interest rates decline further, said Adhil Shetty, CEO of Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Don't Miss The Top Packaging Trends Of 2024, Enhnace Your Brand With The Latest Insights Packaging Machines | Search Ads Search Now Undo Also Read | Sensex @82,300: Should mutual fund investors alter their investment strategy? State Bank of India (SBI) has cut its fixed deposit (FD) interest rates for both the general public and senior citizens, effective May 16, 2025. According to the website, SBI has reduced FD rates by 20 basis points (bps) across all tenors. The latest FD rate cut comes just a month after the cut announced on April 15. Live Events The interest rate applicable for a tenure of 2 years to less than 3 years is reduced to 6.7% against 6.9% before. ETMutualFunds analysed the two-year performance of all debt mutual fund categories alongside the interest rates on fixed deposits offered by SBI, India's largest public sector bank, in the same period. Around 264 debt mutual funds outperformed the bank deposit rate of 6.7% offered by SBI over the past two years. Four schemes gave double-digit returns, of which the top three performers were from the credit risk fund category. DSP Credit Risk Fund delivered the highest return of 18.7% over the last two years, followed by HSBC Credit Risk Fund and Aditya Birla SL Credit Risk Fund, which provided 13.8% and 12% returns, respectively, during the same period. Aditya Birla SL Medium Term Plan delivered a return of 10.4%, followed by Axis Gilt Fund and Axis Floater Fund, which gave 9.6% and 9.5% respectively in the same period. Motilal Oswal Liquid Fund was the last one to offer a 6.8% return in the said period. Also Read | Railways PSU ETF delivers 16% in a week. Is this the right opportunity for portfolio diversification? After the outperformance by debt mutual funds, the expert recommends that a prudent strategy is to match the fund category with your investment horizon, a laddering strategy, where you invest across different maturities, can help manage reinvestment risk and interest rate fluctuations and starting a Systematic Investment Plan (SIP) can also help average out costs and reduce the impact of market volatility. 'A prudent strategy is to match the fund category with your investment horizon. For example, use short-duration funds for up to 3 years and medium-duration or dynamic bond funds for longer terms. A laddering strategy, where you invest across different maturities, can help manage reinvestment risk and interest rate fluctuations,' Shetty said. He further advices that starting a Systematic Investment Plan (SIP) can also help average out costs, reduce the impact of market volatility and investors should focus on funds with high credit quality, avoiding those heavily exposed to lower-rated instruments. With the RBI MPC meeting scheduled for next month, it's worth noting that the central bank has cut the repo rate by 25 basis points in each of the last two meetings, following a prolonged pause at 6.5% across 11 consecutive meetings. The expert mentions that it's also important to monitor the interest rate cycle, if further rate cuts are expected, longer-duration funds may deliver capital appreciation and lastly, one should understand the exit load and taxation rules; debt funds held for over 3 years earlier benefited from indexation, but recent changes to tax rules mean post-tax returns should be carefully evaluated. Finance Minister Nirmala Sitharaman in the last Budget made no change for the debt mutual funds, which continued to be taxed as per the tax slab. Underperformers Around 40 debt mutual funds have failed to beat the fixed deposit interest rate offered by SBI. These funds gave returns ranging between 6% to 6.7% in the said period. Bank of India Credit Risk Fund gave 6.1% and Motilal Oswal Ultra Short Term Fund gave the lowest return of 6% in the mentioned time period. Also Read | BSE and Adani Enterprises among stocks that HDFC Mutual Fund bought and sold in April FD vs debt funds Now coming to the comparison between fixed deposits and debt mutual funds, fixed deposits are considered low-risk investments as they offer a guaranteed return for the predetermined period whereas debt mutual funds have a slightly higher risk associated with them because of the interest rate movement. The second point of difference comes on the taxation part. The investment in tax-saving fixed deposits is exempted under Section 80C of the Income Tax Act whereas for the debt mutual funds there is no such exemptions. But both fixed deposits and debt mutual funds are classified under the same asset class. As the fixed deposits offer lower interest rates compared to debt mutual funds, Shetty recommends that investors in the higher tax brackets benefit the most from switching to debt mutual funds, as traditional FD interest is fully taxable as per slab, while mutual funds—although recently taxed differently—still offer relatively efficient returns in some cases. He adds that savers seeking better liquidity and flexibility than FDs can also consider debt mutual funds, as they generally offer quicker redemption with lower penalties and retired individuals and conservative investors, who are looking for stable income but are open to a little market-linked risk, can shift partially to safe options like gilt or banking & PSU funds. 'Importantly, those with a long-term outlook and an understanding of interest rate movements can strategically allocate to longer-duration or dynamic bond funds for potentially higher returns. However, this shift should be made keeping in mind the risks associated with NAV fluctuations, especially in a volatile rate environment,' he said. We considered all debt categories such as gilt fund, long duration, medium to long duration, gilt fund - constant maturity 10 year, credit risk funds, liquid funds , money market funds, overnight funds, corporate bond fund, dynamic bond fund, floating rate bond, banking and PSU funds, medium duration, low duration, short duration funds. We excluded debt based target maturity funds. We considered regular and growth options. We calculated returns for the last two years. We calculated CAGR returns as in debt mutual funds, returns up to one year are annualised, and returns above one year are CAGR. Note, one should not make investment or redemption decisions based on the above exercise. One should always consider risk profile, investment horizon and goal before making investment decisions. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Economic Times
12-05-2025
- Business
- Economic Times
India-Pakistan Tensions: How should mutual fund investors respond to navigate geopolitical risk?
Amidst India-Pakistan geopolitical tensions, mutual fund experts advise investors to remain calm and continue SIPs for rupee cost averaging, avoiding lumpsum investments. With rising geopolitical tensions between India and Pakistan, mutual fund experts are urging investors to stay calm, avoid making impulsive decisions and should continue with their ongoing SIPs as they are structured precisely to navigate market volatility by averaging out purchase costs over time and avoid lumpsum investments.'Mutual fund investors should continue to invest through SIP. They should never be paused during geopolitical uncertainty as it is good for rupee cost averaging. Lumpsums should be avoided. There will be opportunities for it in future, if the situation escalates further,' said Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial Radiance. Also Read | India-Pakistan conflict: How should mutual fund investors deal with geopolitical threats? Another expert believes that uncertainty often triggers fear-driven reactions, especially in the financial markets, where volatility can spike and sentiment can shift rapidly and during periods of heightened geopolitical tension, it is quite natural for investors to feel unsettled. Adhil Shetty, CEO of recommends that when it comes to mutual fund investments, especially Systematic Investment Plans (SIPs), it is advisable not to halt your contributions as SIPs are structured precisely to navigate market volatility by averaging out purchase costs over time and pausing them due to temporary uncertainty could actually mean missing out on opportunities to buy units at lower prices, potentially weakening long-term returns. He further adds that if you have a substantial sum to invest, consider deploying it through a Systematic Transfer Plan (STP) into equity funds over several months as this staggered deployment cushions your investment from short-term market shocks and aligns better with prudent risk management during volatile times. Many market experts believe that gold is considered a hedge against inflation and with global economic conditions remaining uncertain, gold is expected to retain its appeal as a hedge against market the other hand, international funds cater to different broad international markets, commodities, foreign indices, among others and to sum it up, the performance of the scheme will depend on under which geography your money is invested. That means you should pay extra attention to your investments in international funds. Pay extra attention to which geography or indices you are investing important thing to note here is that whether gold and international funds act as a hedge in times of geopolitical instability and if yes, what allocation one should have in their portfolio at this particular time? Both the experts recommend up to 10% of allocation in gold either through gold ETFs, sovereign gold bonds or multi asset funds. Shetty of Bankbazaar mentions that both gold and international mutual funds can serve as hedges during periods of geopolitical stress and gold, in particular, has long been regarded as a 'safe haven' asset, and recent trends have reinforced its role as a shield during uncertainty therefore, allocating around 5% to 10% of your investment portfolio to gold, either through gold ETFs or sovereign gold bonds, can offer diversifications when equity markets are under pressure. Similarly, for international mutual funds, he mentions that these funds provide diversification, reducing your portfolio's dependence on domestic markets therefore with equities facing headwinds due to regional tensions, exposure to developed markets can lend resilience to your investments and a balanced allocation to international funds, typically around 10% to 15%, depending on your risk appetite and goals, can be considered. To this Minocha adds that though gold is a good hedge whenever there is political stability but it has run up significantly over the past few months and the exposure in gold can be taken through multi asset funds. 'Overall it can constitute about 8 to 10% of the total portfolio. Unfortunately, the window for international funds investing in mutual funds is still not available,' Minocha adds. Also Read | Mutual fund SIP stoppage ratio shoots up to nearly 300% in April; fewer takers amid market volatility Investment in equity mutual funds is majorly done with a long-term financial goal. But with short term uncertainty due to conflicts the important thing to take care of is not derailing your long-term financial goals, is what experts believe and additionally if your goals are five to ten years away or more, temporary market corrections are unlikely to cause lasting advises that investments for long-term financial goals should continue through diversified equity funds and short-term conflicts like these happen many times over a long-term investing journey therefore investors should not get other expert recommends that it's wise to revisit your asset allocation and ensure it remains appropriate for your current stage of life and risk tolerance and a diversified portfolio help you stay on course and additionally regular portfolio reviews and rebalancing can ensure your investment plan stays aligned with your long-term objectives, even as short-term conditions are many first-time investors who are willing to allocate in the categories which offer high returns, have low or high risk, and offer tax benefits. Additionally there are existing investors who are willing to start new investments but are confused whether to postpone their fresh investments or move further to do the this both the experts recommend that rather than postponing investments, one should focus on building a disciplined plan, markets will always have their share of uncertainties, but with a good strategy in place, you can overcome them advises that uncertain times shouldn't necessarily deter new investments, but they do call for a thoughtful and strategic approach and for existing investors, it's advisable to stay invested and avoid knee-jerk reactions and if your current funds are well-chosen and aligned with your goals, continuing with your SIPs and reviewing your portfolio periodically should suffice. Also Read | Gold ETF record outflow for second consecutive month amid surge in prices. Is it profit booking? For new investors, the CEO of Bankbazaar recommends that starting with SIPs in diversified equity mutual funds is a prudent choice as this approach ensures you enter the market gradually and avoid the risk of poor market timing plus it's also advisable for beginners to steer clear of volatile a similar opinion, Minocha adds that long term investments should be done in equity based diversified investments through SIPs and STPs, short and medium term investments should be done through debt and hybrid funds like arbitrage funds and investors should continue to invest based on their goals, time horizon and risk appetite. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ along with your age, risk profile, and Twitter handle.
Time of India
12-05-2025
- Business
- Time of India
India-Pakistan Tensions: How should mutual fund investors respond to navigate geopolitical risk?
With rising geopolitical tensions between India and Pakistan, mutual fund experts are urging investors to stay calm, avoid making impulsive decisions and should continue with their ongoing SIPs as they are structured precisely to navigate market volatility by averaging out purchase costs over time and avoid lumpsum investments. #Operation Sindoor India responds to Pak's ceasefire violation; All that happened India-Pakistan ceasefire reactions: Who said what Punjab's hopes for normalcy dimmed by fresh violations 'Mutual fund investors should continue to invest through SIP. They should never be paused during geopolitical uncertainty as it is good for rupee cost averaging. Lumpsums should be avoided. There will be opportunities for it in future, if the situation escalates further,' said Rajesh Minocha , a Certified Financial Planner (CFP), Founder of Financial Radiance . Also Read | India-Pakistan conflict: How should mutual fund investors deal with geopolitical threats? Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » Another expert believes that uncertainty often triggers fear-driven reactions, especially in the financial markets, where volatility can spike and sentiment can shift rapidly and during periods of heightened geopolitical tension , it is quite natural for investors to feel unsettled. Adhil Shetty, CEO of recommends that when it comes to mutual fund investments, especially Systematic Investment Plans (SIPs), it is advisable not to halt your contributions as SIPs are structured precisely to navigate market volatility by averaging out purchase costs over time and pausing them due to temporary uncertainty could actually mean missing out on opportunities to buy units at lower prices, potentially weakening long-term returns. Live Events He further adds that if you have a substantial sum to invest, consider deploying it through a Systematic Transfer Plan (STP) into equity funds over several months as this staggered deployment cushions your investment from short-term market shocks and aligns better with prudent risk management during volatile times. Many market experts believe that gold is considered a hedge against inflation and with global economic conditions remaining uncertain, gold is expected to retain its appeal as a hedge against market instability. On the other hand, international funds cater to different broad international markets, commodities, foreign indices, among others and to sum it up, the performance of the scheme will depend on under which geography your money is invested. That means you should pay extra attention to your investments in international funds. Pay extra attention to which geography or indices you are investing in. The important thing to note here is that whether gold and international funds act as a hedge in times of geopolitical instability and if yes, what allocation one should have in their portfolio at this particular time? Both the experts recommend up to 10% of allocation in gold either through gold ETFs , sovereign gold bonds or multi asset funds. Shetty of Bankbazaar mentions that both gold and international mutual funds can serve as hedges during periods of geopolitical stress and gold, in particular, has long been regarded as a 'safe haven' asset, and recent trends have reinforced its role as a shield during uncertainty therefore, allocating around 5% to 10% of your investment portfolio to gold, either through gold ETFs or sovereign gold bonds, can offer diversifications when equity markets are under pressure. Similarly, for international mutual funds, he mentions that these funds provide diversification , reducing your portfolio's dependence on domestic markets therefore with equities facing headwinds due to regional tensions, exposure to developed markets can lend resilience to your investments and a balanced allocation to international funds, typically around 10% to 15%, depending on your risk appetite and goals, can be considered. To this Minocha adds that though gold is a good hedge whenever there is political stability but it has run up significantly over the past few months and the exposure in gold can be taken through multi asset funds. 'Overall it can constitute about 8 to 10% of the total portfolio. Unfortunately, the window for international funds investing in mutual funds is still not available,' Minocha adds. Also Read | Mutual fund SIP stoppage ratio shoots up to nearly 300% in April; fewer takers amid market volatility Investment in equity mutual funds is majorly done with a long-term financial goal. But with short term uncertainty due to conflicts the important thing to take care of is not derailing your long-term financial goals, is what experts believe and additionally if your goals are five to ten years away or more, temporary market corrections are unlikely to cause lasting damage. Minocha advises that investments for long-term financial goals should continue through diversified equity funds and short-term conflicts like these happen many times over a long-term investing journey therefore investors should not get perturbed. The other expert recommends that it's wise to revisit your asset allocation and ensure it remains appropriate for your current stage of life and risk tolerance and a diversified portfolio help you stay on course and additionally regular portfolio reviews and rebalancing can ensure your investment plan stays aligned with your long-term objectives, even as short-term conditions fluctuate. There are many first-time investors who are willing to allocate in the categories which offer high returns, have low or high risk, and offer tax benefits. Additionally there are existing investors who are willing to start new investments but are confused whether to postpone their fresh investments or move further to do the investments. To this both the experts recommend that rather than postponing investments, one should focus on building a disciplined plan, markets will always have their share of uncertainties, but with a good strategy in place, you can overcome them effectively. Shetty advises that uncertain times shouldn't necessarily deter new investments, but they do call for a thoughtful and strategic approach and for existing investors, it's advisable to stay invested and avoid knee-jerk reactions and if your current funds are well-chosen and aligned with your goals, continuing with your SIPs and reviewing your portfolio periodically should suffice. Also Read | Gold ETF record outflow for second consecutive month amid surge in prices. Is it profit booking? For new investors, the CEO of Bankbazaar recommends that starting with SIPs in diversified equity mutual funds is a prudent choice as this approach ensures you enter the market gradually and avoid the risk of poor market timing plus it's also advisable for beginners to steer clear of volatile themes. With a similar opinion, Minocha adds that long term investments should be done in equity based diversified investments through SIPs and STPs, short and medium term investments should be done through debt and hybrid funds like arbitrage funds and investors should continue to invest based on their goals, time horizon and risk appetite. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ along with your age, risk profile, and Twitter handle.
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Business Standard
09-05-2025
- Business
- Business Standard
Indo-Pak conflict: Your home insurance is of no use, say experts
Operation Sindoor, the military action against Pakistan, has prompted Indians living near the borders to wonder if their home insurance policies will protect them in such conflicts. 'War, invasion; act of foreign enemy hostilities or war-like operations; civil commotion amounting to a popular rising; insurrection, military or usurped power are excluded [from insurance protection],' said Amrish Dubey, senior-vice president, personal lines, Tata AIG General Insurance. 'War' exclusion 'Standard Indian home insurance contracts universally exclude war or war-like operations – whether declared or undeclared,' Dubey said. The clause typically defines war as: 'War, invasion, act of foreign enemy hostilities or war-like operations (whether war is declared or not), civil war, mutiny, civil commotion amounting to a popular rising, military rising, rebellion, revolution, insurrection or military or usurped power.' By defining war so broadly, insurers protect themselves against unpredictable and massive losses that military conflicts entail. Homeowners' options 'In light of the immense potential liabilities and the difficulty in assessing and pricing such risks, homeowners do not currently have the option to extend their policies to cover war-related damages, regardless of escalating tensions or military operations,' said Rohit Jain, managing partner at Singhania & Co, a law firm. Unlike shipping or aviation sectors, residential property remains outside war-risk underwriting. Terrorism, acts of war 'Terrorism can be covered under home insurance policies as an optional add-on,' said Dubey. Terrorism is defined as 'an act or series of acts … use of force or violence … by any person(s) on behalf of or in connection with any organization(s) or government(s) … for political, religious, ideological or similar purposes.' This option is limited as well. 'If damage arises from cross-border strikes involving national armies, insurers will classify it under the war exclusion and deny the claim, maintaining a clear distinction between terrorism and acts of war,' said Adhil Shetty, chief executive officer of 'Political-violence' extension Jain said that a 'small number of insurers' offer limited political-violence or civil-commotion endorsements. To activate these extensions, policyholders must: Lodge the claim and preserve evidence immediately Submit a police FIR when applicable Provide photographs, repair estimates, and original purchase invoices Supply media or government notifications confirming unrest' He added, 'Accuracy and timeliness in documenting the event play a crucial role in the success of such claims.' 'The burden of proof lies with the policyholder,' said Tushar Kumar, advocate, Supreme Court of India. 'Insurers require conclusive evidence, such as engineers' damage assessment reports, authenticated media coverage, and official notifications, to establish that losses directly result from political violence or civil commotion as defined in the policy.' Homeowners in sensitive border areas should review their insurance policies, ask insurers about any available extensions, and maintain records.
