RURAL Electrification Corporation, the state-run lender for utilities, plans to raise 50 crore from sale of bonds that carry tax-benefits under the program to promote infrastructure building. The company follows many such as Infrastructure Development Finance Co and IFCI that have been raising funds using the tax benefit status. REC bonds are rated triple A. REC, which began the private placement from Thursday, is offering an interest rate of 8% per annum where bonds have a buyback option after five years. And 8.1% a year without the buyback option that will be redeemed after 10 years.
As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
