Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.

(1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.

(2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B ownes a piece of land that is worth 1 dollar.

* The net asset of the country now = 3 dollars.

(3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.

* A has a loan to C of 1 dollar, so his net asset is 1 dollar.
* B sold his land and got 2 dollars, so his net asset is 2 dollars.
* C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
* Thus, the net asset of the country = 4 dollars.

(4) A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, A now ownes a piece of land that is worth 3 dollars. But since he owes B 2 dollars, his net asset is 1 dollar.

* B loaned 2 dollars to A. So his net asset is 2 dollars.
* C now has the 2 coins. His net asset is also 2 dollars.
* The net asset of the country = 5 dollars. A bubble is building up.

* As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
* B ownes a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.
* C loaned 2 dollars to B, so his net asset is 2 dollars.

* The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.

(6) Everybody has made money and everybody felt happy and prosperous.

(7) One day an evil wind blew, and an evil thought came to C‘s mind. “Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more.”

(8) A also thought the same way.

(9) Nobody wanted to buy land anymore.

* So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
* B owes 2 dollars to C and the land he ownes which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.
* C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his heart is palpitating.
* The net asset of the country = 3 dollars again.

(10) So, who has stolen the 3 dollars from the country? Of course, before the bubble burst B thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B‘s net asset is still 2 dollars, his heart is palpitating.

* A owns the 2 coins; his net asset is 2 dollars.
* B is bankrupt; his net asset is 0 dollar. (He lost everything)
* C got no choice but end up with a land worth only 1 dollar

* the net asset of the country = 3 dollars.

—————End of the story; BUT—————

There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -

(1) When a bubble is building up, the debt of individuals to one another in a country is also building up.
(2) This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island’s own currency. Hence, there is no net loss.
(3) An over-damped system is assumed when the bubble burst, meaning the land’s value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could shrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game, he will neither win nor lose. But he will see the value of his money or land goes up and down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A) and take part in the game. But you must know when you should change everything back to cash.
(8) As in the case of land, the above phenomenon applies to stocks as well.
(9) The actual worth of land or stocks depends largely on psychology (or speculation)

SBI will use RBI’s NEFT service for interbank transfers. There is no minimum amount limit for NEFT. The amount will be credited to the beneficiary within 3 hours in normal course of business. And if you want to transfer funds above INR 1 Lakh, you may use RTGS. With RTGS, the funds will be settled instantaniously .. As of now there is no service charge applicable for this service. Here’s some info on the service taken from SBI’s Online Banking FAQs:

1. What is Inter Bank Transfer? Inter Bank Transfer is a special service that allows you to transfer funds electronically to accounts in other banks in India through:
   • NEFT - The acronym “NEFT” stands for National Electronic Funds Transfer. Funds are transferred to the credit account with the other participating Bank using RBI’s NEFT service. RBI acts as the service provider and transfers the credit to the other bank’s account.
   • RTGS -The acronym “RTGS” stands for Real Time Gross Settlement. The RTGS system facilitates transfer of funds from accounts in one bank to another on a “real time” and on “gross settlement” basis. The RTGS system is the fastest possible inter bank money transfer facility available through secure banking channels in India.
2. What is the minimum / maximum amount for RTGS /NEFT transactions? 
   

   Type	Minimum	Maximum
   RTGS	Rs. 1 Lakh	No Limit
   NEFT	No Limit	No Limit

3. When does the beneficiary get the credit for a RTGS payment? Under normal circumstances the beneficiary bank’s branch receives the funds in real time as soon as funds are transferred by the remitting bank.
4. When does the beneficiary get the credit for a NEFT payment? The funds will be sent to the RBI within three hours of the transaction. The actual time taken to credit the beneficiary depends on the time taken by the beneficiary bank to process the payment.
5. If an RTGS transaction is not credited to a beneficiary account, does the Remitter get back the money? Yes. If it is unable to credit the amount of the remittance to the account of the beneficiary for any reason, the beneficiary’s bank has to return the money to the remitting bank within 2 hours. Once this amount is received back by the remitting bank, the amount is credited to the Remitter’s account by the remitting bank branch.
6. If an NEFT transaction is not credited to a beneficiary account, does the Remitter get back the money? Yes. If the money cannot be credited for any reason, the beneficiary’s bank has to return the money to the remitting bank . Once this amount is received back by the remitting bank, the amount is credited to the Remitter’s account by the remitting bank branch.
7. At what time during the day /week is the RTGS & NEFT service is available?Presently, NEFT is settled in six batches at 09:30 A.M., 10:30 A.M., 12:00 P.M., 1:00 P.M., 3:00 P.M. and 4:00 P.M. hours on weekdays and 09:30 A.M., 10:30 A.M. and 12:00 P.M. hours on Saturdays in RBI. OnlineSBI sends the transaction requests upto 3:30 P.M. on weekdays and upto 11:30 A.M. on Saturdays.
   .
   RTGS transaction requests will be sent to RBI upto 2:30 PM. on weekdays and upto 11:30 AM on Saturdays.
8. What is the mandatory information required to make an RTGS & NEFT payment? The Remitter has to provide the following details:
   • Amount to be remitted
   • Account number which is to be debited
   • Name of the beneficiary bank
   • Name of the beneficiary
   • Account number of the beneficiary
   • Remarks or description, if any
   • The IFSC code of the beneficiary branch
9. How to find the IFSC code of the beneficiary branch? Based on simple search option- Location, Bank & Branch. The IFSC code will automatically be updated or if you know the IFSC code of the beneficiary bank, you can provide it directly.
10. Do all bank branches in India provide RTGS & NEFT service? No. RTGS facility is enabled only in specific bank branches across India. You can view a list of these branches in the RBI website: www.rbi.org.in/Scripts/Bs_viewRTGS.aspx. NEFT is enabled only in specific bank branches across India. You can view a list of these branches in the RBI website: http://www.rbi.org.in/scripts/neft.aspx.
11. How do I go about using this service? 
    1. You should be an active Internet Banking user with transaction rights.
    2. Log on to www.onlinesbi.com by using your SBI Internet Banking ID and Password.
    3. Click on the ‘Manage Interbank Payee’ link in the ‘Profile’ tab.
    4. Select the ‘Add’ option and provide the Beneficiary Name, Beneficiary Account Number, Beneficiary Bank and transfer limit to register the Beneficiary.
    5. IFSC code of the Beneficiary’s bank can be keyed in by two ways:
       1. Click the IFSC Code option and a textbox is displayed where you can enter the 11 digit IFSC Code of the Beneficiary Bank.
       2. Click the Location option, the following are retrieved and displayed.
    6. Beneficiary Bank Name – Dropdown Menu
    7. Location – Dropdown Menu
    8. Branch – Dropdown Menu
    9. The confirm button will be enabled only after clicking the accept button in the terms and conditions window.
    10. After providing all the details, the beneficiary will be added. It will be shown whether the added beneficiary bank is RTGS or NEFT enabled.
    11. After adding the Beneficiary you will receive a high security password in your mobile number. This is done basically to double check your identity. Provide the password to authorize the Beneficiary After a Beneficiary is authorized you can start transferring funds.
    12. You can proceed to make payments by clicking the ‘Inter bank Transfer’ link in the ‘Payments/Transfers’ tab.
    13. According to the transaction type selected (RTGS/NEFT), the credit account details will be displayed depending on whether the branch is RTGS or NEFT enabled or both.
    14. Select the Beneficiary from the list of registered Beneficiaries.
    15. You can either confirm or cancel the transaction.

This move will further consolidate SBI’s position against ICICI. In my opinion, ICICI’s online banking service was their main benefit as customers could transfer money electronically to any branch .. Now SBI’s customers can have this feature too with no extra cost .. This competition is opening up new initiatives for the benefit of customers .. My verdict : The best just got better… !! Yay ..!

Dear All,

Be ready to lose money from July 01,2007:

ICICI bank is going mad from July 01, 2007. It has hiked the service charges applicable to all type of transactions ………

ICICI Customer Care has confirmed that these charges are applicable to Salary Accounts also !!!!!!!!!! See the attachment for more details.

Examples :

1. Debit card usage : Rs.99/- service charges per annum for holding the debit card.

2. Cash Deposit : For cash deposit at non-base branch a minimum of Rs.150/-per deposit will be cut.

3. ATM usage : Only 6 transactions are free in a quarter. After that, Rs.15/- per transaction.

4. Monthly statements by courier : Rs.200/- per annum.

5. SMS alerts : Free for first 6 months from the date of registration. Subsequently Rs.25/- per quarter.

6. Rs. 100 per Standing Instruction

Are they really sure they wanna do this ..?? Only 6 ATM transactions per quarter ?? that comes to 2 per month .. Hahahaa .. Even my dhobi goes to ATM more than that .. Rs. 100 per standing instruction ?? OMG .. You take a loan from ICICI bank and make Standing Instructions in your current or savings account for payment of EI and they will charge you for that .. What a piece of crap ..!!

I’ve uploaded the full charges document that came with this mail here. Go through it and find a better bank ..