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Friday, November 11, 2011
Now, send money from ATM to mobile
Mumbai : In a bid to encourage the use of mobiles for banking transactions, the Reserve Bank of India has allowed the National Payments Corporation of India to facilitate money transfer by a bank customer from an ATM/Internet to a beneficiary's mobile phone. The RBI's permission to expand the scope of the money transfer mechanism through the NPCI-promoted Interbank Mobile Payment Service comes at a time when mobile banking transactions are growing at a slow pace.
Slow growth
Ever since IMPS was launched in August 2010, the number of mobile banking transactions nudged up from 430 mobile banking transactions aggregating Rs 5,142 in August 2010 to 12,511 transactions aggregating Rs 3.80 crore in October 2011. The number of banks which are members of IMPS has increased from four in August 2010 to 28 in October 2011. “The IMPS has so far facilitated instant inter-bank funds transfer between the sender and the receiver using the mobile. Now, following the RBI's permission, the IMPS will also facilitate funds transfer from ATM to mobile and the Internet to mobile,” said Mr A. P. Hota, Managing Director and CEO, NPCI. NPCI, which was set up in late 2009 as an umbrella institution for operating various retail payment systems in the country, is working with a few banks so that they can launch the facility to transfer funds from ATM to mobile and Internet to mobile. Once the IMPS picks up, long queues outside bank branches to make remittances will become a thing of the past. For example, auto-drivers and cabbies, who otherwise lose a part of their day's earnings as they have to queue up outside a bank branch during business hours for sending money home, could remit funds to their kin on the move any time of the day. Neither bank holiday nor a bank strike will be a hindrance when it comes to remitting funds through IMPS using mobile, ATM or Internet, emphasised Mr Hota. IMPS enables bank customers to use the mobile instrument as a channel for accessing their banks accounts and remit funds. Payments, including merchant and financial inclusion-related, can be made with just the mobile number of the beneficiary.
The mechanics
For using mobile banking facility through IMPS, a remitter has to register with his bank and get seven-digit Mobile Money Identifier (MMID) number and Mobile Personal Identification Number (MPIN). The beneficiary has to link his mobile number to his bank account and get MMID from the bank. A remitter can initiate an IMPS transaction in four simple steps by keying the beneficiary/payee's mobile number, MMID, amount and MPIN. Both the remitter and the sender get SMS confirmation once the transaction is put through.
Limit per day
The RBI has set a daily cap of Rs 50,000 per customer, per day for both funds transfer and transactions involving purchase of goods and services under IMPS when the communication from the mobile handset to the bank's server or the server of the mobile payments service provider is encrypted. In case the communication is not encrypted then the transaction limit if Rs 5,000. Transferring funds from an ATM or Internet will be simpler as only the Mobile Money Identifier number of the beneficiary will be required. To improve the usage of mobile for banking transactions, Mr Hota said, banks have to create awareness among customers about the safety, simplicity, time and cost saving, and instant funds transfer features of mobile banking using IMPS.
HBL
RBI Deputy Governor to visit Seraikela on Nov 22
RANCHI: Reserve bank of India deputy governor Anand Sinha will visit Seraikela on November 22 to give an impetus to the financial inclusion drive. Under the financial outreach programme of RBI, senior officials of the apex bank will visit different districts across the country and encourage banks, financial institutions and local government to boost up economic activities to involve rural masses in particular. The Jharkhand regional office of the apex bank said Sinha would attend the daylong programme at Seraikela and address senior bank officials to ensure that performance of the national and private banks improve in not just Seraikela but all over the state. Earlier this year, RBI governor D Subbarao and erstwhile deputy governor Shyamala Gopinath had visited Jharkhand under financial outreach programme. While Subbarao visited Lohardaga, Gopinath went to Deoghar. Both the visits were beneficial for the rural populace in the districts as the banks were compelled to open branches and increase financial activities, particularly through business correspondents and virtual branches. The mineral-rich Seraikela-Kharsawan district, famous for its historic and cultural importance and Kuchai silk, has not seen light of development. At present, 27 branches of nationalized banks are operational in the district with Bank of India having the maximum of 15 branches. Most of the banks have opened one branch in Adityapur region which is considered as one of the largest industrial area in Asia. However, bank officials admit that the district is far from achieving 100% financial inclusion. Wide disparity in distribution of bank branches and lack of awareness to financial activities is common in the region. An RBI official in Ranchi said the role of the local administration and banks would be discussed during the daylong programme which is likely to encourage farmers and people associated with small scale industries to approach the banks and seek benefits of schemes offered by the Union government.
TOI
RBI bars Gujarat-based bank from fresh loans, investments
Mumbai: The RBI has barred Sabarkantha-based Khedbrahma Nagarik Sahakari Bank from undertaking any major activities like granting fresh loans and making new investments till its financial position improves. "RBI has issued certain directions to the Khedbrahma Nagarik Sahakari Bank Ltd, Khedbrahma, Sabarkantha (Gujarat), whereby as from the close of business as on October 31, 2011, the aforesaid bank shall not, without prior approval in writing from the RBI, grant or renew any loans and advances, make any investment...," the central bank said in a statement. In addition, the bank has been directed not to incur any liability toward borrowing and lending of funds or accept fresh deposits, other than disbursement of payments in discharge of its existing liabilities and obligations. The Reserve Bank has also barred it from entering into any arrangement to seal or transfer any of its properties or assets. The central bank, however, did not give any details on action being contemplated with respect to Khedbramha Nagarik Sahakari Bank. "The bank will continue to undertake banking business with the restrictions till its financial position improves," the RBI added. In a separate statement, the RBI said that it has imposed a penalty of Rs 5 lakh on Ahmedabad-based Shreenath Cooperative Bank for violation of various banking norms. "RBI has imposed a monetary penalty of Rs 5 lakh on Shreenath Cooperative Bank, Ahmedabad... for violation of RBI instructions on Know-Your-Customer norms and Anti-Money Laundering guidelines," it said. The RBI had earlier issued a show cause notice to the bank, in response to which Shreenath Cooperative Bank had submitted a written reply. "After considering the bank's reply in the matter and submission made during the personal hearing, the RBI came to the conclusion that the violation was substantiated and warranted imposition of the penalty," the statement said.
Zee News
RBI, banks to accept advance income tax
MUMBAI: The Reserve Bank of India (RBI) and 926 computerised branches of public and private sector banks will receive advance income tax in Mumbai in a bid to give tax payers relief from long queues and inconvenience faced in filing returns. "These arrangements have been made for the convenience of the income tax assessees," the RBI said in a statement. Of the 926 bank branches, 862 branches will be of public sector banks. Among the private sector banks, the maximum number is of HDFC Bank - 35 branches. Other private sector bank branches include 10 branches of ICICI Bank and 19 of Axis Bank. RBI has advised income tax assessees to take advantage of these standing arrangements made for their convenience. "Long queues and inconveniences can be avoided at the Reserve Bank of India counters if the assessees in Mumbai and Navi Mumbai utilise the services being made available at various designated branches of banks and deposit their income tax dues well in advance of the last date," the RBI said.
Expressbuzz
IBA's comment on pre-payment waiver on home loans soon : Mallya
Ahmedabad, Nov 10 : Indian Bank's Association, is expected to come out with its comments on the proposal to do away with pre-payment charges on the home loans in next seven to ten days, IBA Chairman said here today. "We are analysing the issue at the IBA level, we will come out with appropriate suggestions on that may be in next seven to ten days," IBA Chairman M D Mallya told PTI, on the sidelines of 12th Nirma University Convocation here. On being asked that will there be some relief for the home loan borrowers, Mallya, who is also chairman and managing director of Bank of Baroda (BoB) said "You will have to wait for an overall decision from IBA on the issue." After receiving the comments, the RBI will go through it and take a final call on the pre-payment charges on loans taken under floating rates by the customers, a bank official said. RBI, is considering a proposal of imposing a ban on levy of pre-payment charges on loans by banks, and has been waiting for the IBA comments on it. Earlier in September, the Banking Ombudsman had suggested banks should not impose pre-payment charges on loans with floating rate of interest. It had stated that banks may also offer long-term fixed rate housing loans to customers. The housing finance regulator National Housing Bank (NHB) has already directed all housing finance companies(HFCs) to desist from imposing a pre-payment penalty on home loan borrowers. The charges imposed by some HFCs and banks on pre-payment of housing loans are as high as 4 per cent in some cases.
IBN Live
Banks currently prefer CP over short-term credit
With increased concerns on asset quality amid high lending rates, banks are opting to invest in commercial paper (CP) issued by companies rather than extending short-term credit. According to the Reserve Bank of India (RBI), banks’ investments in CP have been steadily increasing, from Rs 12,309 crore as on March 25 to Rs 22,447 crore as on October 21. Most banks have either stopped or are going slow on giving out working capital loans. “There is bullet repayment in working capital loans, which makes it difficult for the borrower to pay off the dues in time when interest rates are high,” said a senior official from Bank of India. CP, on the other hand, is a tradable debt instrument with maturity of up to a year and can be issued by companies to meet short-term funding needs. When in need of liquidity, banks can offload these in the secondary debt market. Apart from non-banking finance companies and housing finance companies that regularly issue CP, known names such as Indian Oil Corporation, Renuka Sugars, Hindustan Construction Company and Gammon India are tapping the short-term debt market for funds, according to market participants. “Base rates have hardened over time, due to which companies that have access to the debt market are raising funds at cheaper rates,” said a bond dealer with a domestic brokerage. Presently, companies are able raise funds via CP at 9.6 per cent for three months and 9.8 per cent for six months, while banks are offering loans at 100-200 basis points (bps) above the base rate that ranges between 10 per cent and 10.75 per cent. Banks with ample liquidity are readily investing in short-term debt instruments instead of locking funds in loans. “We are borrowing from RBI under repo and investing in CP; there is good arbitrage opportunity there. We are not investing in treasury bills,” said the treasury official of a large public sector bank. CP spreads over comparative treasury bills have narrowed by around 50 bps since the end of the second quarter, as a result of higher demand from investors such as mutual funds and banks. Yields on treasury bills have also shot up on high supply, leading to contraction in the spreads.
BS
Weigh pros and cons before switching savings account
...All big banks have decided to adopt a wait-and-watch policy. However, in case, some more banks were to increase interest rate on savings bank account, should you switch banks?.....
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Austerity, not bailout, solution to EU crisis
The banking sector in India will take a hit due to the recent decision by Reserve Bank of India to deregulate the savings bank interest rates. For all these long years, the saving banks interest rates were regulated as result banks made huge profits as the cost of acquiring the funds was low. But the new saving bank interest rates offered are 6% and 7% by the public sector and the private banks, which means cost of acquiring the funds will go high. The whole game in the banking sector is the differential in the cost of acquiring the funds and the realisation. Within these parameters, the bank has to keep its cost under control, expanding its activity by opening up of new branches on national and international level and make good profits. But as the interest rates in fixed deposit were continuously going up, it was necessary for the RBI to deregulate the savings bank interest rates, which were low at 3% causing great differential between the two interest rates. Secondly, because of high inflation and high interest rates, there are no new project financed. As a result, we will not see real growth in the banking sector. The recent results of the state-owned Punjab National Bank has shown that the differential of 3.58%. The bank has made phenomenal profit but with higher efficiency in the private sector banking, it will do much better compared to the PSUs banks
The Euro Trouble
The Euro zone problem, particularly Greece, will turnout to be a big problem as the referendum process has been cancelled by government as the opposition party has agreed for the same.
A) India's trade with Greece has came down to half -- 480 million dollars
B) And also the trade with other European nation have taken a hit
C) The political turmoil in the middle east is a big threat
D) US is also not showing any science of recovery
E) Slow down in China.
All the above mentioned problems will bring in slow down in India's growth due to the cumulative effect. ECGC (Export credit Guarantee Corporation has sounded a cautious approach to all the Indian exporters. Today, we are looking at the problems of Greece tomorrow it could be Portugal, Italy and Spain. European banks have greater exposure in the Greek banks which is matter of concern, Greece without joining the union could have survived on its own but by joining the union and the money flowing in the from the rich countries Germany and France as bail out package creates distortions in the economy.
The solution to the Greece problem is not bail out package but austerity measures.
1. Reduce the expenditure / wages.
2. No frees bees to the people
3. High taxation to its rich people to generate more revenue
But this is not easy as Greece has always lived beyond its means
Moneycontrol
S&P balm for Indian banks
NEW DELHI: A day after ratings agency Moody's lowered the outlook on the Indian banking sector, rival Standard & Poor's on Thursday moved it a notch higher in the Banking Industry Country Risk Assessment (BICRA), a tool to evaluate and compare global systems. But the improvement had nothing to do with performance parameters but was the result of a change in methodology. "In our view, banking regulations in India are in line with international standards and the regulator has a moderately successful track record. The Reserve Bank of India (RBI) continually monitors the macroeconomic environment. The RBI also has introduced countercyclical measures and differentiated risk weights to moderate banks' risk appetite. We consider governance standards as generally adequate, though disclosures are somewhat inadequate," S&P said in a statement while upgrading the risk profile to Group 5. The industry risk score of 5 reflects high-risk assessments on the institutional framework and competitive dynamics and low risk regarding system-wide funding, the statement added. At the present level, the Indian banking sector is at par with markets such as China, Portugal, Thailand and Turkey.
TOI
RBI initiative on wholly-owned subsidiary have allowed regional and foreign banks to increase their presence in India
.........The expansion in India by these banks is driven by the need to compensate for lower growth back home, coupled with the entrepreneurial spirit driving SMEs in the country........
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S&P upgrades Indian banking sector; says domestic regulations in line with international standards
”In our view, banking regulations in India are in line with international standards and the regulator ( RBI) has a moderately successful track record," S&P said while upgrading the risk profile (BICRA) a notch higher to 'Group 5'.....
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FinMin, Moody's to discuss India's sovereign rating next week
New Delhi, Nov 10 : Credit ratings agency Moody's, which lowered the outlook for Indian banking system, will hold consultations with finance ministry officials next week as part of the exercise to review the country's sovereign rating. "We are meeting Moody's on Monday (November 14) to discuss India's sovereign credit rating," a senior finance ministry official told PTI. The meeting is being held at a time when the Indian economy is passing through a rough patch. As per the Reserve Bank of India (RBI), the growth rate during the current fiscal is expected to moderate to 7.6 per cent from 8.5 per cent last year. The officials are likely to talk about the steps the government has been taking to reduce the fiscal deficit, reform direct and indirect taxation system and recapitalise the banking sector. The economy has been braving high inflation and the Centre's fiscal deficit may exceed budget estimate of 4.6 per cent in view of poor tax collection and low realisation from sale of government equity in state-owned companies. Moody's has assigned Baa3, the lowest investment grading rating, to India. The rating agency yesterday downgraded the outlook for the Indian banking system to "negative" from "stable" saying that economic slowdown would impact asset quality, capitalisation and profitability. However, differing with the downgrade accorded by Moody's, ratings agency Standard & Poor's today upgraded the Indian banking sector saying its domestic regulations are in line with international standards. Ratings are significant as they help the country and other entities to borrow funds globally at competitive rates.
IBN Live
Higher borrowing of centre triggers banks’ cash crunch
...Some bank officials on condition of anonymity said that the high government demands on cash from the banking system also constrained the RBI from intervening in the foreign exchange market to prevent excessive volatility between the rupee and the dollar...
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90 and going strong...
........Meanwhile, the RBI Deputy Governor, in an order dated March 31, 2011 urged the 18 entities/ individuals to reduce their stake to less than 5 per cent by offloading their excess holding. .............
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Monster ate my money
...The adjustable rate mortgage was a hit with sales reps, as they didn't disclose to buyers that interest rates were floating and would rise after the initial years. Now isn't that reminiscent of Indian teaser loans? Explains why RBI frowns on the practice.....
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Thursday, November 10, 2011
Everyone here has access to banking
Rajansiriyur in Belur taluk achieves 100 per cent financial inclusion
Rajansiriyur village in Belur taluk has undergone a sea change in the last two years in terms of financial inclusion. The village has achieved 100 per cent financial inclusion with every family either borrowing or depositing money in banks. This achievement became possible after Canara Bank, lead bank for Hassan district, took the initiative to develop the village as a model one two years ago. The Reserve Bank of India (RBI) conducted an outreach programme in the village in November 2009 to popularise the benefits of the bank's schemes and Canara Bank deputed a business correspondent to the village. In the last two years, the number of bank accounts in the village has gone up from 141 to 396. Similarly, the number of loan accounts has gone up from 223 in 2009 to 431 in the current year. The total advances in the village has also gone up from Rs. 98 lakh in 2009 to Rs. 1.02 crore and the total deposits has gone up from Rs. 90 lakh to Rs. 1.5 crore. The RBI conducted the second outreach programme in the village on Tuesday. P. Vijaya Bhaskar, Executive Director of the RBI, appreciated the efforts of the bank officers and role of the people in achieving good results. Chairman and Managing Director of Canara Bank S. Raman said that the bank would set up a branch in the village soon. RBI Regional Director Uma Shankar called upon residents to support banking activities so that the banks could deliver better services. On the occasion, the RBI screened short films on banking activities.
HBL
RBI directs Urban Cop banks to stick to FIU-India's new format
Mumbai: The Reserve Bank Wednesday directed urban cooperative banks to adhere to the new format developed by the Financial Intelligence Unit (FIU-India) for filing various reports, including those on cash transactions and suspicious transactions. "UCBs (urban cooperative banks) are advised to carefully go through the reporting formats and initiate urgent steps to build capacity to generate reports, which are compliant with the XML format specifications," the Reserve Bank of India (RBI) said in a notification. It added that the date of transition from the old reporting format to the new one will be communicated to the UCBs later. The Prevention of Money Laundering Act (PMLA) states that every reporting entity has to furnish to FIU-India details on Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs), Counterfeit Currency Reports (CCRs) and Non Profit Organisation Transaction Reports (NTRs). "FIU-India has advised that the earlier prescribed multiple data files reporting format is being replaced by a new single XML file format and prepared a comprehensive reporting format guide, giving the specifications of the prescribed reports to be furnished to FIU-India," RBI said. The reporting format guide, along with the XML sheet and user guide, can be downloaded from the website of FIU-India.
Zeebiz
CONFLICTING VIEWS ON KYC GUIDELINES
There were some conflicting views presented on the know-your-customer, or KYC guidelines presented by two top RBI officials at the recent bankers conference in Chennai, though they were speaking in different contexts. While Deputy Governor K.C.Chakrabarty in his address said that there should be uniform KYC norms across the globe to address customer risks, his other counterpart H.R.Khan said that there should not be a regulatory overkill in KYC, because it would not facilitate financial inclusion.
TOI
BANKERS GET A TASTE OF BAD INFRA
Bankers had an adventure of sorts dealing with the heavy rains and Chennai traffic at the bankers conference last week. They had to deal with the inauguration and the subsequent session addressed by an RBI Deputy Governor across two venues within a few kilometres of each other within a gap of 30-45 minutes. Though on a clear road, the distance could have been covered in 10 minutes, with heavy rains and the numerous vehicles of delegates adding to the regular traffic,a few senior bankers had to jump the road dividers near the venue to be in time for the session and save about 45 minutes.
TOI
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