INDIAN MUTUAL FUNDS

Dear Friends

INDIA, OUR BELOVED MOTHERLAND - often known as the largest democracy and the second most populous country in the world is much more ,being 4th ranking country in terms of Purchasing Power Parity & Gross Domestic Product and 3rd most preferred investment destination - indeed an economic power in the making.
Like Indian fellowmen, NRIs too can participate in the promising future of India, being permitted to undertake almost all kinds of businesses by investing in shares of companies, partnership or running sole proprietorship in India and also investing in immovable properties and shares & securities in India.

The robust economic growth is reflected in the Indian stock markets too .The Indian Equities have risen handsomely outperforming global indices in foreign currency terms too - the BSE has gained 99.43 % ( 3311 to 6603 ) against FTSE100 Index Loss of (-) 6.68 % ( 5164 to 4819 ) & minimal gain of Dow Jones at 9.16 % ( 9920 to 10829 ) between Jan.02 to Dec. 04, as reflected in the chart herein.

Index	Jan.2002	Dec.2004	Gain in %
BSE Index	3311	6603	99.43%
FTSE 100	5164	4819	(-) 6.68%
Dow Jones	9920	10829	9.16%

I. " Twin Currency Plan [ TCMF ] for investment in Indian MFs in $, £, € :

We at nribanks.com have structured TCMF - a unique investment plan for NRI participation in Equity schemes of Indian Mutual Funds. The TCMF facilitates continuity of foreign currency deposit and simultaneous Mutual Fund investment in Indian rupees. Excellent performance of MF Equity schemes and MF gains beating the Bombay, FTSE and Dow indices and also salient features of TCMF are :

Performance of previous 3 years of some of the leading MF Equity Schemes under SIP* :

3 Yrs. Equity Schemes Yield Summary *
Name of the fund	Yield / Return (%)
	3 yrs.		2 yrs.		1 Yr.
	Total %	Annualised %	Total %	Annualised %	Annualised %
Tata Pure Equity Fund - ( Bal. Fund )	172.63%	57.54%	140.57%	70.28%	33.28%
FT India Prima Fund - ( Float.Rate ST )	187.82%	62.60%	114.36%	57.18%	41.59%
Pru ICICI Power Plan - (Float.Rate ST )	124.44%	41.48%	72.08%	36.04%	26.83%
DSP ML Equity Fund - ( Liquidity )	96.95%	32.31%	71.38%	35.69%	27.32%
SBI MF Contra Fund - ( Balance)	57.34%	19.11%	75.97%	37.98%	38.87%
BSE Sensex	65.18%	21.73%	44.33%	22.17%	20.46%
FTSE 100 - £	11.44%	3.81%	11.94%	5.97%	4.75%
Dow Jones - $	13.70%	4.57%	10.57%	5.28%	3.86%

GAINS in $, £, € :
Even if this MF schemes had yielded returns of only 10% p.a., the net yield under the TCMF would have been :
$ 7.41% p.a. ; £ 9.19% p.a. & in € 6.87% p.a..

Basic features :

1. NRI places FCNR deposits in £ ,Euro or $ deposit for 3 years .
2. Bank grants Rupee loan to the NRI against security of said FCNR deposits.
3. The rupee funds are invested in Equity Schemes of Mutual Funds under a Systematic Investment Plan [ SIP].

4. Before maturity, Equity Schemes are sold and NRO loan is to be repaid.

5. Upon repayment of loan, FCNR Deposit will be available for remittance abroad or renewal. Capital gains are repatriable subject to payment of tax and compliance of necessary formalities.

ADVANTAGES :
TCMF Plan has an advantage of foreign exchange risk coverage and leverage coupled with arbitrage opportunities. The Plan ensures continuity of foreign currency deposit and simultaneously facilitates Mutual Fund investment in Indian rupees.

1. The investment will continue in Foreign Currency by way of FCNR Deposit. Thus Foreign Exchange risk coverage is provided.

2. Leverage facility is available as an investment of say FCNR US $ 100,000 is enhanced by additional Rupee investment equivalent to US $85,000 totaling to investment of US $ 185,000.

3. Arbitrage opportunity is also facilitated by investment option of possibly higher yield in Equities of funds borrowed at lower cost of (Re.) 4.50% p.a.

* Disclaimer - past performance may or may not be sustained in the future.

II. Unique offer from State Bank of India I M D B O N A N Z A :

Product	Callable 5-year Deposit.
Eligibility	NRI IMD-Holders
Interest	Non-Cumulative Option only. Semi-annually 21^st July & 21^st January
Interest on Loan	100% loan against IMD. Interest @ 3.60% p.a. fixed
Interest on Deposit	FIXED 4.25% for 5 years
Floating Rate	First 6 months – 6.25% p.a.
	2^nd Half – 7.50% less 6 months LIBOR*
	2^nd Year – 8.00% less 6 months LIBOR*
	3^rd Year – 8.50% less 6 months LIBOR*
	4^th Year – 9.50% less 6 months LIBOR*
	5^th Year – 10.50% less 6 months LIBOR*
	* LIBOR to be fixed 2 business days prior to beginning of interest period.
Flexible Rate	Callable after 6 Months. If called before Dec., 2005, interest at 6.25% will be payable.
Maturity	Fixed interest – 5 years fixed
Premature Payment	Not Permissible
Nomination Facility	Available

Looking to the 6 months LIBOR at 2.78%, the Scheme looks attractive under the FLEXIBLE SCHEME.

Being an offer by State Bank of India internationally in Middle East and Far East, the interest will be exempt from tax from 01-04-2005, whereas Foreign Currency Non-Resident [FCNR] Deposits in India will be liable to tax with effect from 01-04-2005.

FEATURES:

1. 1. 100% capital protection by way of guarantee of State Bank of India – Issuing Bank.
2. Additional income for 1-year of 0.65% p.a. in addition to the IMD interest at 8.50%.

PROCEDURE:

Simple procedure and paper work

LOAN AMOUNT:

140% of the principal value in case of Cumulative Bonds

OFFER/FACILITY CLOSES:

In all probability, on 12^th January, 2005.

II. NRE & NRO to Floating Rate Funds :

We suggest investment of NRE & NRO balance in Savings & transfer of maturity amounts of Fixed Deposits to Floating Rate / Liquid Funds For incremental tax - free income & Liquidity.

ISSUE	FLOATING RATE	NRO A/c.	NRE
Security	Secured investment in Govt.securities, Bank Deposits & Corp.Debt	Also secured.	Also secured.
Security Insurance	Nil	Rs.1 lakh per person	Rs.1 lakh per person
Yield/Return	App. 4.50% to 5.00%	Savings-3.50% F.D.3-year Deposit 5.25%	Savings-3.50% F.D.3-year Deposit 4.25%
Tax	Dividend tax-free	Interest taxable	Interest taxable w.e.f. 1.4.05
TDS	Nil	30.60%	20.40% / 30.60 %
Premature Withdrawal for Penalty / Liquidity	N.A. - Daily Dividend / Total liquidity	As Applicable / subject to loss of interest	As Applicable / subject to loss of interest
Investment Objective	Stable income with low risk	Profit-making with medium risk	Profit-making with medium risk
Incremental Return	Possible - rising Interest conditions.	Not Possible- Fixed return	Not Possible- Fixed return

IV. ALTERNATIVE OF FOREIGN CURRENCY DEPOSITS

interest rates for US$ deposits (< USD 100000)
Term	Interest rates (%) p.a.	Annualized Yields (%)
5 Years	4.60%	5.05%
4 Years	4.36%	4.65%
3 Years	4.11%	4.28%
2 Years	3.50%	3.47%
1 Year	3.00%	3.00%

interest rates for GBP deposits (< GBP 65,000)
Term	Interest rates (%) p.a.	Annualized Yields (%)
5 Years	5.41%	6.03%
4 Years	5.35%	5.79%
3 Years	5.27%	5.55%
2 Years	4.90%	5.02%
1 Year	4.88%	4.88%

interest rates for EURO deposits (< EURO 100,000)
Term	Interest rates (%) p.a.	Annualized Yields (%)
5 Years	3.70%	3.98%
4 Years	3.46%	3.64%
3 Years	3.19%	3.29%
2 Years	2.60%	2.64%
1 Year	2.30%	2.30%

Hope this is found useful and interesting. Please feel free to ask or otherwise inform your option, whereupon we will send documents for necessary action.

With regards,
Sincerely,

RAJESH H DHRUVA
Chief Executive
nribanks.com

Tel. No. : 0091 281 2464099 / 2463367
Cell : 0091 98240 49944

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* Disclaimer - past performance may or may not be sustained in the future.