Malaysian National News Agency BERNAMA
The very purpose of VITALINFO is to provide a platform for wider dissemination of updated information related to and happening of events in and around RBI.
Tuesday, March 29, 2011
BNM to host Financial Inclusion Policymakers Forum next week
Malaysian National News Agency BERNAMA
FIR against SBI manager for depositing fake currency
KANPUR: The Reserve Bank of India today registered an FIR against a manager of State Bank of India (SBI) for allegedly depositing fake currency, police said here. Anupam Chaudhary, Manager of RBI has registered a case against the manager of SBI located on P D Road in Bajaria area here for allegedly depositing four fake notes of 100 denomination in the treasury of RBI, the police said.
Union Bank opens financial literacy centre
Union Bank of India, lead bank for Ernakulam district, has set up its first Financial Literacy and Credit Counselling Centre (FLCCC) at Perumbavoor. FLCCCs, recommended by the High Power Committee headed by Usha Thorat on Lead Bank Scheme, are being set up in every district with the intention of providing financial counselling service through face-to-face interaction as well as through other available media like email, fax, mobile etc, educating people in rural and urban areas with regard to various financial products and services. The FLCCC at Perumbavur is headed by a seasoned retired bank official and the public is free to approach the counsellor for services. Financial literacy has been given a very high priority and the banking system has taken Financial Inclusion as a mission to be accomplished in a short period. At present, nearly 59 per cent of the population are without bank accounts. In the first phase of Financial Inclusion, all villages having population in excess of 2,000 are being targeted to set up banking facilities. There are about 73,000 such villages in the country, including 120 villages in Kerala. The task of making providing banking services either through a bank branch or through business correspondents (BCs) has been assigned to various banks. Most of these have appointed BCs and the process of issuance of smart cards to the new customers is on. Reserve Bank of India Governor D Subbarao has recently visited the FLCCC at Perumbavoor.
Volkswagen granted non-banking finance licence
Global automobile major Volkswagen's Indian finance subsidiary Monday said that it has been granted non-banking finance company (NBFC) licence by the Reserve Bank of India (RBI). "The RBI license enables the company to offer customers of Volkswagen, Skoda and Audi cars the opportunity of a wide range of financial services,” Volkswagen Finance Private Limited said in a statement. The company said the licence would enable it to offer three product lines, including VW Finance, Skoda Finance and Audi Finance. “VWF India wants to present itself in the Indian market as a mobility provider with products which fully respect the needs of customers,” said Joern Achim Kurzrock, chairman of the board of Volkswagen Financial Services India. According to Kurzrock, the company would focus on specific needs of each customer segment by offering financing options including 3-in-1 bundled packages consisting of financing, insurance and maintenance. The Mumbai-based company would be making an initial investment of over $24 million (Rs.120 crore) in the country. The statement added that the company's customers can avail of financing options at any of the 164 dealer outlets of its brands.
Looking for a locker? Banks aren't only option
Though private players have fewer branches, their costs are competitive. With rising break-ins in their neighbourhood, Brendan and Alexia are looking at locking away their valuables in a safe deposit locker. Earlier, their options were limited to only banks, both public and private sector, but now there are private players that offer this specialised service. Some of these companies include Kothari Safe Vaults, Sakthi Safe Vaults, India Safety Vaults and Asmita Safe Deposit Lockers. To target the customer, there are innovative techniques as well. Sakthi Safe Vaults, for instance, allows operation of the locker even on a Sunday. Salil Datar, head, branch banking and NRI Business at Dhanalaxmi Bank, explains, “Unlike banks, these companies are not regulated by the Reserve Bank of India (RBI). So, they can stay open longer and for more number of days,” he said. What limits private players is the reach. Banks do have an edge when it comes to the number of branches that offer the locker facility. Bank branches that offer this facility are located in many more cities compared to the private companies. As far as charges go, these are reasonable for both players. The annual rental is around Rs 1,000-5,550. However, they will also ask you to maintain a security deposit. And, if you do not pay your annual rent, it gets adjusted with the safe deposit. Once that security deposit is crossed and you still do not pay your rent, the bank can break the locker, record the contents of the locker and may be, file a police complaint. Banks could also ask the customer to maintain a fixed deposit with them, so that they can use the interest income towards annual payment. R U Trivedi, chief manager at Kothari Safe Vaults, says his company takes three years rental as deposit money, unlike in a bank where one has to pay a monthly rental as deposit. “In a bank locker, the interest earned is adjusted with the monthly rental. We charge between Rs 600 and Rs 4,000 a year, depending on the size of the locker.” As for the security of the private company lockers versus the banks, some claim that they have even bettered the safety standards set by RBI’S currency ‘A’ chest specifications. Both banks and private players do insure vaults, though the contents in it are not insured. This is because the contents in the vaults are only known to the owner of the locker. You will have to take an insurance policy yourself to safeguard the contents in the locker.
Banks in state lag in financial inclusion
The banking sector in Karnataka is lagging in implementing the Reserve Bank of India’s (RBI) ambitious programme of achieving financial inclusion in all villages with a population of 2,000 and above. The banks in Karnataka, which are in the forefront of implementing the programme, have barely achieved 50 per cent of the target by the end of February, 2011, a top banker said today. “As against the target of 2,253 villages to be covered by March 2011, the banks in Karnataka have covered only 1,121 villages with a population of over 2,000 so far. The shortfall in target relates mostly to regional rural banks (RRBs), which are presently in the midst of migrating to core banking solution (CBS),” Basanth Seth, chairman, state level bankers’ committee (SLBC) said. Delivering a keynote address at the 116th meeting of SLBC, here, he urged the RRBs to take suitable steps and speed up the process so as to cover the maximum number of villages by March 31, 2011. “Issues like connectivity, inadequacy of training and manpower at the field level, delay in issue and activation of smart cards among others were the chief reasons for the slow progress in achieving financial inclusion,” Seth said adding these issues require urgent attention. Further, products like the savings bank accounts, remittances, entrepreneurial credit, micro insurance and others, should be made available to each account holder under financial inclusion, Seth, who is also chairman and managing director of Syndicate Bank, said. The RBI has identified 3,395 unbanked villages in Karnataka to be brought under business correspondent (BC) model to achieve financial inclusion. So far, Kolar and Chikkaballapur villages have been fully covered under the BC model. RBI governor D Subbarao, who was in Bangalore recently to review the progress of financial inclusion by banks in Karnataka, has directed all the banks to submit a concept paper on ‘meaningful financial inclusion’. All bankers need to deliberate on this crucial aspect and come out with their suggestions, Seth said. While reviewing the performance of banks in the state as on December 2010, the SLBC chairman informed that the aggregate deposits stood at Rs 3,04,413 crore while aggregate advances were Rs 2,37,977 crore with a credit deposit ratio of 78.12 per cent. The advances to priority sector stood at Rs 1,03,302 crore, constituting 46.83 per cent of credit, surpassing RBI stipulation of 40 per cent. Similarly, the advances to agriculture sector were Rs 45,843 crore comprising 19.26 per cent of the total credit, which is above the stipulated level of 18 per cent. Advances to MSME sector stood at Rs 37,545 crore as at December 2010. Vijay Bhaskar, Regional Director, RBI, said the regulator has identified nine villages in Karnataka for adoption as model villages for financial inclusion and they will be showcased across the country to promote the novel concept. He also urged the banks in the state to spread more awareness about the financial literacy. During the meeting, a Kannada version of the book on “Inclusive growth through Business Correspondent”, brought out by Indian Institute of Banking and Finance, southern zonal office, was released by S V Ranganath, chief secretary, government of Karnataka. M N Krishnamurthy, vice president, Indian Banks Association, briefed the house on “Swabhimaan”, the national level awareness campaign on financial inclusion.
An ATM at your kirana shop
The next time you fall short of cash while on a shopping spree, you may not have to rush to the nearest automated teller machine (ATM). The Reserve Bank of India (RBI) has allowed banks to set up electronic retail machines at the merchant’s establishment, popularly called point of sales (POS). This will allow you to withdraw cash — up to Rs 1,000 at one time — with your debit card at the shop itself. At least five banks — Union Bank of India, ICICI, HDFC Bank, IDBI and Axis bank — have started installing these electronic retail machines or cash at POS machines at merchant establishments across select cities. This should soon be a pan-Indian service, as the network expands and other banks follow suit. Importantly, it can be done with or without purchasing anything from the enabled merchant establishment with POS terminals. If you withdraw cash at merchant establishments along with the purchase of merchandise, the receipt generated should separately show the amount withdrawn. This move will particularly benefit those who do not like to carry cash. One can use this to make small purchases or to pay cab fare. But for bigger purchases, this facility does not work so well. Moreover, although the merchant establishment will not charge a fee for dispensing cash, your bank could. While this service is free for IDBI and HDFC Bank’s debit cardholders, both ICICI and Axis Bank are currently levying a service fee of Rs 10. At this cost, paying through your debit card rather than cash will be cheaper. Also, don’t use to withdraw very small amounts because the cost, as applicable in some cases, is not worth it.
SBI's self service banking centre
State Bank of India (SBI) has opened a self-service banking centre in Hyderabad to increase customer convenience and provide 24/7 access to banking. The centre, a branch-less and staff-less technology-based banking outfit, has a multifunction kiosk for internet banking and to print statements. It also provides multiple banking facilities such as ATM, internet and mobile banking, chequebook request, mobile top-up, train ticketing and income tax payments using debit or credit cards. It has three ATMs, including one for the visually-challenged with braille keypad. One BNA (bunch note acceptor) would be installed shortly where customers can deposit money through the machine, a release said.
Wanted - A dream team
Montek Singh Ahluwalia, Shankar N Acharya, Ashok V Desai (though for a short period), K P Geethakrishnan and M R Sivaraman were there to give shape to the idea of early economic reforms initiated by Manmohan Singh. At a step or two below, there were R Venugopal Reddy, N K Singh and Duvvuri Subbarao. Reddy later moved to the commerce ministry before joining the Reserve Bank of India (RBI) as deputy governor and then, after a short stint at the International Monetary Fund, became the head of the central bank. Singh later became the revenue secretary. Subbarao became the finance secretary and is now the RBI governor.
'Ill-conceived financial inclusion strategy may have negative social impact'
The Reserve Bank of India (RBI) wants commercial banks to view financial inclusion as a business opportunity and not a social obligation. “The social costs and consequences of badly conceived and executed inclusion strategy could be enormous. Understanding what the potential consumer needs and why he needs it is one such knowledge input that is critically important,” said Subir Gokarn, Deputy Governor of RBI at a recent event. He said that every aspect of a financial inclusion strategy – whether it is the design of products and services or the delivery mechanism – needs to be viewed in terms of the business opportunity that it offers and not as a deliverable that has been imposed on the service provider. He also said commercial viability need not necessarily be viewed in terms of immediate cost and profitability calculations. Establishing a relationship with first-time consumers of financial products and services offers the opportunity to leverage this relationship into a wider set of financial transactions as at least some of these consumers move steadily up the income ladder, said Gokarn. “In fact, in a high growth scenario, a high proportion of such households are likely to move quite quickly from very basic financial services to more and more sophisticated ones.” Financial inclusion had taken centre stage since the RBI had mandated all commercial banks to cover all villages with a population of 2,000 and above by the end of FY 2012. Banks were also asked to prepare and submit their financial inclusion plans to RBI last year. Banks are currently in the process of implementing the plans. To bring the unbanked population under the ambit of financial services, banks are offering no frills accounts and overdraft facilities on such accounts to make them more attractive. One need not maintain a minimum balance in these accounts.
Bank guidelines soon
New Delhi, March 28: Draft norms on new banking licences will be announced in the next few days, the finance ministry said. “The RBI will come up with the guidelines by the end of this month,” R. Gopalan, secretary in the department of economic affairs, said. The finance ministry will review the guidelines and comments will be invited from the public before the final guidelines were notified, he said.
Subscribe to:
Posts (Atom)