The central bank advises it has not given any licence/authorisation to any entity/company to operate such schemes or deal with bitcoin or any virtual currency
On October 13, 2017, I had read about cryptocurrency in the personal finance section of DNA Money. Now, I would just like to know if cryptocurrency is legal in India? If yes, how beneficial cryptocurrency is as an investment options?
– Sunil Mahadik
According to a press release issued by the Reserve Bank of India (RBI) dated February 1, 2017, the central bank had cautioned the users, holders and traders of virtual currencies (VCs), including bitcoins, about the potential financial, operational, legal, customer protection and security-related risks that they are exposing themselves to, vide its press release dated December 24, 2013. The central bank advises it has not given any licence/authorisation to any entity/company to operate such schemes or deal with bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc, dealing with virtual currencies will be doing so at their own risk.
So clearly, as far as India is concerned, bitcoins have no legal standing. I do not claim to understand how bitcoins are produced let alone how they are valued in the market. My advice is to stay away from making an investment into something which only a few people understand and which also has a lot of legal issues surrounding it.
I am planning to invest money. However, I am confused if I should invest in postal life insurance (PLI) or systematic investment plan (SIP) of banks like State Bank of India or ICICI Bank. I want to invest Rs 2,000 per month in an investment scheme, which one should I go for?
– Sheikh Shafi
Ideally, you should appropriately plan for your investments by first identifying the reasons for making the investments (goals) and looking at your own risk appetite before deciding on the goal. Think if you were to ask me whether a particular brand of a two-wheeler is good enough to buy or not – I will have to ask you where do you want to go, how much time you have, what are the resources you have, along with your personal preferences. Only then will I be able to recommend a brand of two-wheeler or may even recommend that you take a car if that is what is suitable for your needs and resources available. If you do an analysis like this, you will realise that doing the overall analysis is far more important than just choosing the specific brand of two-wheeler.
Similarly for investments. What are you investing for, what is the timeframe when you will need the money, what is your risk profile and if resources are constrained then which goals enjoy priority, will all determine how much of your assets would go in equity or debt or gold or real estate (for large portfolio’s only). After the type of investment has been chosen, one should choose the specific instrument/scheme within that type of investment.
Also, like wearing your helmet while travelling is important no matter which brand of two wheeler you have, taking appropriate risk insurance (not investment cum insurance policies but pure insurance policies) is a must before you start making investments.
Subject to the above and assuming you are willing to take a risk for the long term, you can consider any one equity-linked saving scheme (ELSS). Such schemes include Birla Sunlife Tax Relief 96, Axis Long Term Equity, among others, and can be chosen for investing money in case tax saving is a need. However, if otherwise, stick to a large-cap equity scheme such as SBI Blue Chip or Birla Sunlife Top 100 fund.
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