Bank account number is sole criteria for e-fund transfers now

Looking to speed up the transfer of funds electronically, banks will henceforth only take into account customers' account numbers for such transactions, ignoring other details like names. The new mechanism is intended to reduce the possibility of any errors and comes into effect from today (January 1, 2011). This is in line with a Reserve Bank directive under which customers would need to mention their account numbers twice for every electronic fund transfer request made through the Internet, as well as at bank branches. The central bank had directed the banks to put in place the appropriate systems and procedures to comply with the directive from the New Year. As per the RBI guidelines, the banks would need to process all inward electronic transactions solely on the basis of the account number of the customer. The new system would be applicable for all electronic payment gateways, such as RTGS, NEFT, NECS and ECS, besides fund transfers initiated by customers at bank branches or over the Internet. Although electronic payment methods are aimed at achieving expeditious fund transfers through a computerised system, the earlier practice involved manual intervention too, on account of the tedious process of matching various details such as customers' names and branch details.

Postal dept to join hands with banks for pre-paid cash cards

The Department of Post will collaborate with leading banks -- IDBI, HSBC and ICICI Bank--to provide cards (on the line of credit cards) to rural people in order to facilitate non-cash transactions for purchase of products and services. The card will come with pre-determined amount in rupees and could be operated at merchant locations, ATMs and designated post offices subject to approval by the Reserve Bank of India.  Disclosing his Department's 100-day agenda, Telecom and IT Minister Kapil Sibal on Saturday said his ministry will offer 'White label Pre-paid Cards' to the rural people. The objective of launching this card is to leverage cash handling expertise and the network of India Post in order to facilitate non-cash based transactions for purchase of products and services at retail outlets across the country and to earn revenue through value added service.

Need to stop all premature PF withdrawals: Finance to EPFO

The Finance Ministry has asked the Employees’ Provident Fund Organisation (EPFO) to stop all premature withdrawals and adhere to the “one instrument-one policy objective” principle. Though the EPF is meant for oldage income security, subscribers are currently allowed liberal advances and withdrawals for a variety of needs such as illness, education, house-building, marriage and education. “The distortion created by not adhering to the stated principle is that most of the employees, say 75 per cent, of the EPF retire with as little as less than Rs 35,000 in their accounts,” wrote R Gopalan, Secretary, Department of Financial Services, Ministry of Finance, to his Labour Ministry counterpart, Prabhat Chaturvedi on December 10. In fact, Gopalan has suggested that subscribers must take medical insurance to take care of their medical needs, home loans for house-building and educational loans for meeting educational expenses.