The Reserve Bank has issued guidelines according to which banks and other entities will be able to issue pre-paid vouchers like mobile vouchers and wallets up to Rs 50,000, which can be used to purchase goods and withdraw cash from ATMs.
The operating guidelines on pre-paid payment vouchers issued by the RBI stated, "Maximum value of any pre-paid instruments (wherein specific limits have not been prescribed) shall not exceed Rs 50,000".
The validity period for these pre-paid instruments, such as smart cards, magnetic strip cards, Internet accounts, mobile accounts, mobile wallets and prepaid vouchers among others, will be of six months.
The central bank pointed out banks and NBFCs, which fulfill with the capital adequacy requirements and other entities having a minimum paid-up capital of Rs 1 crore, will be allowed to issue such vouchers.
The value stored in these vouchers will represent the amount paid by the holder either in cash or through the debit/credit cards.
Earlier in the annual monetary policy for 2009-10 RBI Governor D Subbarao had informed about the operating guidelines.
Subbarao had pointed out, "It is now proposed to permit SCB (scheduled commercial banks), which comply with eligibility criteria, to issue all categories of prepaid instruments”.
Wednesday, April 29, 2009
Wednesday, April 22, 2009
IDBI Bank to expand network overseas
IDBI Bank is expanding its network overseas following this soon it will be starting operations in Dubai, Singapore and Beijing in order to establish its presence abroad and facilitate Indian corporates raise overseas funds.
IDBI Bank's Chairman and Managing Director Yogesh Agarwa informed, "We will be opening one branch each in Dubai and Singapore. We also plan to start a representative office in Beijing".
At present IDBI is having 509 branches and 900 ATMs. It has also attained necessary approvals from the Reserve Bank for the opening of 200 additional branches to start during the current fiscal. In fact so far bank does not have overseas presence.
He stated, "Apart from catering to the Indian corporates for raising funds overseas, the trigger to start operations beyond the country's border is to establish our foreign presence, an area which we neglected”.
Mr. Agarwal told bank is expecting to receive approvals from the respective local Governments in the next one to two months and will be starting operations immediately.
"We have the Reserve Bank's permission with us to start operations in these geographies for over one year now," he told while adding that getting paper works ready and necessary approvals was coming in the way.
Public sector lenders like State Bank of India and Bank of Baroda are having sizeable presence overseas through branches and representative offices. Among private sector banks ICICI Bank is leading in the area.
According to analysts since Indian banks were less affected with the global financial crisis, they are in a better position as compared to its international peers to go global and even acquire banks abroad.
Mr. Agarwal, pointed out that at present IDBI Bank is not looking at acquisitions abroad.
IDBI Bank's Chairman and Managing Director Yogesh Agarwa informed, "We will be opening one branch each in Dubai and Singapore. We also plan to start a representative office in Beijing".
At present IDBI is having 509 branches and 900 ATMs. It has also attained necessary approvals from the Reserve Bank for the opening of 200 additional branches to start during the current fiscal. In fact so far bank does not have overseas presence.
He stated, "Apart from catering to the Indian corporates for raising funds overseas, the trigger to start operations beyond the country's border is to establish our foreign presence, an area which we neglected”.
Mr. Agarwal told bank is expecting to receive approvals from the respective local Governments in the next one to two months and will be starting operations immediately.
"We have the Reserve Bank's permission with us to start operations in these geographies for over one year now," he told while adding that getting paper works ready and necessary approvals was coming in the way.
Public sector lenders like State Bank of India and Bank of Baroda are having sizeable presence overseas through branches and representative offices. Among private sector banks ICICI Bank is leading in the area.
According to analysts since Indian banks were less affected with the global financial crisis, they are in a better position as compared to its international peers to go global and even acquire banks abroad.
Mr. Agarwal, pointed out that at present IDBI Bank is not looking at acquisitions abroad.
Banks through pop-up messages on ATMs offer personal loans for ‘safe’ customers
Due to rise in inflation and slowdown in the economy there was rise in the number of loan defaulters. Because of this alarming situation the banks tightened personal loans and have decided to give them only to their own customers.
Before this situation personal loans, along with the credit cards used to be the priority in the retail portfolio of the banks as they earned higher interest. But now many of the banks have even stopped accepting a personal loan application from a non-customer.
Mr R.S. Reddy Chairman, Andhra Bank, informed Business Line, “As they are non-secured loans, there are higher delinquencies in the industry in general. We are giving preference to our own customers with good track record”.
Although banks are not disclosing the exact rate of delinquencies, but according to experts, they range is between 4 and 15 per cent.
According to a source earlier ICICI Bank, was the aggressive lender of the personal loan but it has even reduced the marketing staff engaged for selling personal loans products.
He said, “Unlike earlier, personal loans are being offered on the basis of in-house analysis of a customer’s account”. The bank is making use of pop-up messages on its ATMs to offer personal loans for ‘safe’ customers.
When contacted, the official spokesperson of the bank refused to reveal the exact percentage of defaults.
As per information provided by HSBC, the “unsafe” credit collection environment is the responsible for fear on personal loans.
Indeed, a couple of foreign banks have almost closed this segment though they are denying this on record.
Although the interest rates are moving downward but banks are not extending this benefit to the personal loan customers, mainly because of the fear of future defaults, informed experts.
However the public sector banks are charging around 15 per cent interest on the personal loans, but some of the private banks and non-banking finance companies are charging from 22 per cent to beyond 30 per cent.
Moreover, the existing customers are also being offered incentives on prompt repayment.
Ms Leena, who took a loan of Rs 1.3 lakh, told, “It was a pleasant surprise to me when I received a cheque for Rs 2,400 with a top-up offer from Axis Bank for prompt repayment of EMIs for last one year”.
Before this situation personal loans, along with the credit cards used to be the priority in the retail portfolio of the banks as they earned higher interest. But now many of the banks have even stopped accepting a personal loan application from a non-customer.
Mr R.S. Reddy Chairman, Andhra Bank, informed Business Line, “As they are non-secured loans, there are higher delinquencies in the industry in general. We are giving preference to our own customers with good track record”.
Although banks are not disclosing the exact rate of delinquencies, but according to experts, they range is between 4 and 15 per cent.
According to a source earlier ICICI Bank, was the aggressive lender of the personal loan but it has even reduced the marketing staff engaged for selling personal loans products.
He said, “Unlike earlier, personal loans are being offered on the basis of in-house analysis of a customer’s account”. The bank is making use of pop-up messages on its ATMs to offer personal loans for ‘safe’ customers.
When contacted, the official spokesperson of the bank refused to reveal the exact percentage of defaults.
As per information provided by HSBC, the “unsafe” credit collection environment is the responsible for fear on personal loans.
Indeed, a couple of foreign banks have almost closed this segment though they are denying this on record.
Although the interest rates are moving downward but banks are not extending this benefit to the personal loan customers, mainly because of the fear of future defaults, informed experts.
However the public sector banks are charging around 15 per cent interest on the personal loans, but some of the private banks and non-banking finance companies are charging from 22 per cent to beyond 30 per cent.
Moreover, the existing customers are also being offered incentives on prompt repayment.
Ms Leena, who took a loan of Rs 1.3 lakh, told, “It was a pleasant surprise to me when I received a cheque for Rs 2,400 with a top-up offer from Axis Bank for prompt repayment of EMIs for last one year”.
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