Indian banks

Now report your complain through social media sites too

2011-11-15T23:14:00.001-08:00

The customer of Standard Chartered Bank will have a unique option to report their complaints through social networking sites like Facebook and Twitter. At present customers can register their complaints through a phone call, e-mail, SMS or by filling up the complaint form.

The Executive Vice-President and Head of Technology and Strategic Transformation at Scope International Pvt Ltd. Ms Jaya Vaidhyanathan said “It could be good or bad we need to react immediately.” This company provides technology solutions to the bank all over the world.

Finance Ministry instruct banks to cover every under-banked district by September 12

2011-11-08T02:24:00.000-08:00

With the motive to make banking services accessible to every citizen of the country Finance ministry has instructed the banks to open branches in locations with a population of more than 5,000 in the under-banked districts.

In the mean time banks have already been working under the Financial Inclusion Plan which aims at proving banking facilities to every village in the country with a population of more than 2,000 by March 2012. For the purpose banks have been following different models to cover the villages apart from conventional branch banking method which includes business correspondents, mobile vans etc.

There are still 296 districts in the country which are unbanked and the Reserve Bank of India has asked the banks to bring them under the banking network by opening branches by September 12^th.

Finance Ministry said “Such branches could initially have lesser staff, say 2 persons, with ATM facilities.” It also shared the idea of expanding the branch strength according to the growth in business. Besides, it also appealed to the banks to open as many braches as possible in areas with population of more than 10,000.

Federal Bank now accepts deposits in 9 currencies

2011-11-07T03:28:00.000-08:00

To lure more non-resident customers to invest with it, Kerala based private sector lender Federal Bank now accepts non-resident (FCNR) deposits from a broad range of 9 different currencies which includes US, Canadian, Australian, Singaporean and Hong Kong dollars, as well as the British pound, euro, yen and Swiss franc.

The bank has also hiked the interest rates applicable on such fixed deposits, the interest rates on the deposits in US currency now ranges in between 1.94%-2.69% across various maturities.

This facility is effective from 1^st November.

Banks banking on festive season

2011-09-23T04:34:00.000-07:00

Lender have joined the race to make the most of the ensuing festive season, recently State Bank of India announced to extend its special home loan scheme where it offers a concession of 0.25% on the home loans till 31^st of December.

Now it is Dena Bank which has announced to lower lending rate applicable on home loan as well as car loan segment by 0.25%, it has also slashed the processing fees by 50%.

These additional benefits will be available from 1^st of October.

Balance inquiry on mobile through fixed codes

2011-09-09T02:12:00.000-07:00

Since past decade the banking sector has witnessed manifold development in the customer services. Every new day a new service is being added to the growing range of service provided to facilitate the bank customers.

Moving along the National Payment Corporation of India (NPCI) is under negotiations with the telecom operators to provide services on USSD (Unstructured supplementary Service Data) message, which would allow the bank customers to make non-financial transactions like balance enquiry by dialing a specific code through their mobile.

These transactions when made through other bank’s ATM cause monetary loss to the parent bank as for each transaction the bank has make some payment to the other bank which create unnecessary monetary loss for the bank with this facility when implemented both banks as well as customer will be benefitted.

The Managing Director of NPCI Mr. A.P. Hota said "These transactions are free for the customer if it is within the five transactions a month limit. But their banks have to pay the bank that owns the ATM between Rs 5 to Rs 8 for every enquiry."

He also said "We need to leverage mobile technology and increase awareness and discourage balance enquiry at ATMs."

FastForex service launched by IndusInd Bank

2011-09-06T04:33:00.000-07:00

The wave of competition among banks has resulted in various innovative schemes that have benefitted the customers a lot. Recent development has been the introduction of a special scheme from Induslnd Bank for its corporate customers.

The FastForex scheme launched by the bank enables a customer to know the forex price on a real time basis, this facility can be availed through internet.

ATMs to be always at your service

2011-08-30T05:03:00.000-07:00

During past few years, the usage of ATMs for cash withdrawal has increased many folds, this has become preferred mode of withdrawing cash but on the days of strike or some natural calamity they often turn out of cash which causes a lot of discomfort to the commoners.

The Reserve Bank if India has come up with a solution to this problem. In case of strike or natural calamity banks can borrow money from Reserve Bank of India and can make the ATM operational. Bank can withdraw up to Rs. 10 crore at a time but in case or more requirement the bank can borrow more than once during working hours of the bank.

In order to avail this facility the bank needs to sign an agreement with the designated outsourcing agency and it also has to authorize RBI debit their current account accordingly. Bank will also have to submit a letter to RBI stating requirement of funds to replenish the ATMs.

Mobile Baking application launched by Induslnd Bank

2011-08-25T04:21:00.001-07:00

Induslnd Bank, a well known private sector lender has added one more facility to its gamut which can be very useful for its customers in making banking a swift and user-friendly experience. The bank has launched Mobile Banking application, christened as indusMobile.

The customers will be able to carry out various banking operation on their own through their mobile including balance enquiry, mini statement, intra-bank transfers, bill payment.

Head of Consumer banking at Induslnd Bank, Sumant Kathpalla said "IndusMobile is a comprehensive mobile banking platform that enables our customers to manage their banking needs with incredible ease. This new application will serve as a key customer touch point that complements the bank's physical branch network."

Hike in key lending rates of SBBJ

2011-08-11T04:59:00.000-07:00

After most of the lenders have increase their lending rates considering the hike of 50 basis points in the policy rates by The Reserve Bank of India last month, Public Sector lender State Bank of Bikaner and Jaipur has also hiked its key lending rates.

The lender has increased its base rates by 50 basis points which now stand at 10.25%, the bank has also increased BPLR by 25 basis points and it now read 15.00%.

The Managing Director of the bank Mr. Shiva Kumar said "Even after this increase, the base rate of SBBJ was amongst the lowest in the public sector. Most of the public sector banks have their base rate already increased to 10.75%, which is 50 bps more that that of SBBJ."

The revised rates are effective from 10^th August.

Hike in lending rates of Union Bank

2011-08-08T04:13:00.000-07:00

Most of the banks have already reacted to the hike in the policy rates of the banks by increasing their lending rates; now finally leading public sector lender Union Bank of India has also announced a hike in its lending rates.

The bank has increased its Base rate by 50 basis points and now it stands at 10.75% but the bank has increased the BPLR only by 25 basis points and now it reads 14.50%.

Andhra Bank plans to open 100 branches

2011-07-28T04:34:00.000-07:00

As all the banks are on an expansion spree, Andhra Bank has also made sure that it is not left behind. The lender is planning to open 100 new braches outside Andhra Pradesh. The bank has already sent the proposal to Reserve Bank of India for approval.

The Chairman and Managing Director of the bank, Mr. R. Ramachandran said “In order to become a pan-India bank Andhra Bank has been steadily increasing its branches in the western, northern and eastern parts of the country during the last three years.”

Barclays to axe 50 jobs in India

2011-07-18T04:11:00.000-07:00

Barclays, U.K. based bank is going to merge the teams for servicing corporate clients in India of commercial banking division and its investment banking unit- Barclays Capital, and because of the merger Barclays has to cut jobs in India.

The Hong-Kong based spokeswoman for Barclays, Ms. Clare Williams said "Last week a small number were informed that as a result of the decision to combine the two teams that, regrettably, their jobs fell away."

The bank has already made 25 job cuts and another 25 are expected to follow in a few months.

Bank strike rescheduled for August 5

2011-07-01T04:58:00.001-07:00

The shifting of the Parliament session has affected the schedule of the strike of the bank employees that was to be observed on July 7 but now it has been shifted to 5^th August.

The General Secretary of All India Bank Employee Association, Mr. C.H. Venkatachalam said “When there is a bank strike during Parliament session it will be debated as many issues relate to the Government.”

AIBEA is a very huge Union that consists of 5 lakh bank employees from 25 Public sector banks, 11 private sector banks and 8 foreign banks.

Mr. Venkatachalam also said “If our strike does not yield results, we will intensify our agitation by having repeated and continuous strikes.”

The bank employees are demanding no privatization of public sector banks, non merger of banks and ban on outsourcing.

Public sector bank employees to observe strike on July 7

2011-06-20T05:09:00.001-07:00

Public sector Bank employees have announced to go for a strike on July 7^th. Around 10 lakh bank employees are expected participate in the strike. The banks employees are against privatization of public sector banks and their mergers, they are also demanding for a ban on outsourcing.

National President of Bank Employees Federation of Indian (BEFI), Mr. A. K. Ramesh said "The Centre is following a policy that will destroy public sector banks in the country."

Banks to solve ATM complaints within 7 days

2011-06-13T04:50:00.001-07:00

As the volume of transactions from ATMs has increased the complaints have also increased. There are a few very common problems that the ATM users encounter like sometimes they do not receive any money from the machine but he amount gets debited from their account.

Sometimes a user receives lower amount then what he wanted but the actual amount gets debited, such a situation can baffle a person as ATMs are supposedly very reliable and most of the person does not know to get that fixed, where should thy go and what should they do to get their money back.

Such a customer just needs to go to his bank and ask them to rectify the error, in fact the Reserve Bank of India has reduced the time for a bank to resolve the matter from 12 to 7 working days and if the bank is not able to compensate the amount then the consumer is entitled t get Rs 100 per day.

The new rule is applicable from July 1; the new rule will keep banks under pressure to solve the matter as soon as possible to avoid the penalty that they have to pay the customer for every delayed day. The one thing that borrower needs to keep in mind is that he needs to lodge a complaint about this with the bank within 30 days of the date of transaction.

Corporation Bank to hire 1,200 employees

2011-06-06T05:08:00.000-07:00

Public sector lender, Corporation bank has announced expansion plans in the country and has set a target of adding another 200 branches to its network for this fiscal year. Along with the expansion, the bank will also hire about 1,200 employees.

The Chairman and Managing Director of Corporation Bank, Mr. Ramnath Pradeep said "The process [of opening branches] is on. It [the expansion] will be across India, particularly in the northern states."

Apart from the domestic expansion the bank also has plans of opening 4-5 branches in African continent.

Governments to amend KYC norms

2011-05-27T03:33:00.001-07:00

The Central Government is keen to introduce common Know your Customer (KYC) norms to simplify the proceedings and to make them more effective and relevant. KYC Policy is mandatory to be followed in the matters related Finance like opening a bank account, a trading/demat account, mutual fund investments and insurance policies.

KYC norms hold much significance as they are very effective to keep a check on money laundering cases finds being used to finance terrorist activities.

The Secretary to Department of Economic Affairs, Mr. R Gopalan said “We will see if a few changes can be made here and there to have a consistent KYC for all.”

45,000 vacancies to be filled in banking sector for year 2011-12

2011-05-16T04:53:00.001-07:00

The growth in the banking sector has crested a lot of job opportunities. The banks are suffering form a lack of human resources as the banking sector on a roll and all the banks are expanding at a very fast pace. To meet their requirements public sector banks are planning to hire around 45,000 personnel during year 2011-12.

The Director of Institute of Banking Personnel Selection (IBPS), Mr. M Balachandran said "Approximately 45,000 officers and staff would be recruited by (nationalised) banks this year."

Apart form the expansion the other reason that has contributed to the human resource crunch in the banking sector is the fact that a lot of the banking personnel are on the verge of retirement and that is why the banks is hiring in bulk.

The other major factor is that in order to maximize their profits banks are foraying into activities like insurance policies and mutual fund schemes; it has also created a job opportunities in the banking space.

For the recruitment, IBPS will start conducting a common entrance test from July; the banks will then call the candidates for an interview in the basis of their scores they have secured in the common test.

Out of 26 public sector banks, the exam will be valid for only 19 banks. SBI and its associate banks will continue to conduct their separate exam to recruit employees.

Banking sector symbolizing national growth

2011-05-12T04:07:00.000-07:00

Banking sector in the country is on a roll, there are a lot of factors responsible for it. The introduction of Information Technology has only acted a as catalyst to the situation. With no doubt one can say that India has one of the most secure banking systems in the world that even withstood the Global Recession but even then a huge portion of population is still not under the banking system.

To provide banking facilities to the masses the Government launched Financial Inclusion Plan that aims to equip very village with a population above 2000 before March 2012. Government has adopted several measures to speed up the process like extensive use of IT services and public private collaboration.

Apart from expanding the network of banking in the country the services that the banks provides to its users have also been upgraded and also introduction of new services by the lenders like internet banking, mobile banking , mobile wallet and several other services have made banking rather a enjoyable experience ; it is now no more arcane.

There is vast customer base in the country that is still untapped; banks have huge scope for further growth that is why even foreign banks are showing interest to set their business in the country. Banking sector has gone competitive over past few years and that has triggered the banks to improve the services provided to the customer, as customer satisfaction is a mandate for their growth.

The introduction of Aadhar number will further increase the ambit of banking as then it would be easier for the people from the lower section of society to get a bank account and it will also help to ensure proper utilization of the funds sanctioned for the development of the weaker section of the society as then the funds will be directly transferred to their bank accounts and hence will also check the corruption involved.

Banking services likely to go expensive

2011-05-09T04:39:00.001-07:00

On May 3, along with the announcement of hike in the policy rates by 50 basis points, The Reserve Bank of India also hiked the interest rate on the saving accounts that were unchanged since 1993 at 3.5 percent per annum to 4 percent.

The increase in the interest rate will put an extra burden on the banks and that is why to stabilize the burden banks are likely to increase the transaction charges fro the services they offer and cal also start charging on the service that were free.

The Managing Director of HDFC Bank Mr. Aditya Puri said "The transaction charges will go up for the consumers if the rates on savings bank accounts keep on going up... The banks also have to survive."

Increase of minimum balance in the account, increase in the cheque issue charges are a few possible improvements that the banks are considering post hike in the saving bank account interest rates.

Union Bank to manage salary account for KVS employees

2011-04-25T04:33:00.001-07:00

Union Bank of India and Kendriya Vidyalaya Sangathan has signed a Memorandum of Understanding (MoU), according to which Union Bank of India will salary distribution of the KV employees.

At present there are around 56,000 employees working with KVS. This step is aimed at bringing transparency to the salary disbursal of the employees.

The facility developed by Union Bank will consist if several other features also through which KVS will be able to collect and manage funds.

Raghuram Rajan opposes issuing of licence to corporate houses

2011-04-05T05:31:00.001-07:00

Reserve Bank of India has started issuing Banking licences to the foreign banks and corporate houses to start operating banking operations in the country but former IMF chief economist and honorary advisor to PM, Mr. Raghuram Rajan has opposed the idea.

"I think the old RBI policy of not allowing corporates banking licence was good one. I still stand by that. Whether it will continue with this or not is a different question," he said.

He stressed on giving preference to the NFBCs and MFIs over corporate houses. He said "If corporates are given licence, the regulator needs to ensure there is no inter-company lending, proper risk management processes are followed and there is enough transparency."

Ratnakar Bank inks deal with AGS Transact Technologies

2011-03-30T00:47:00.000-07:00

Ratnakar Bank has entered in to an agreement with the AGS Transact Technologies. According to the agreement AGS technologies will install ATMs for the lender and will also provide with technology based solutions for banking, retail, petroleum and postal sector.

The Head of Ratnakar Bank (Direct Banking Channels) Mr. Ritesh Rai said "The ATM deployment is a part of our plan towards aggressive expansion in the country. We have been looking for a strategic partner to help us with this objective. AGS' expertise in ATM management will help us in gaining a strong foothold and increasing our network."

President and CEO of AGS Transact technologies Mr. Sunil Udupa said "We have been servicing 10,000-plus ATMs through our state-of-art 24X7 command center that gives confidence to our customers. With this, we believe we can add great value to the bank's initiatives."

Banking for lower class made easy through AEPS

2011-03-07T03:44:00.000-08:00

The National Payment Corporation (NPCL) has partnered with three banks and has launched Aadhar Enabled Payment System (AEPS) Project. The project is aimed to make banking process easier for the poor and less educated population in the country. The Business Correspondents have a major role to play in the implementation of the project.

Under this project, the customers will be able to withdraw or deposit cash, make balance enquires and they will also be able to transfer funds through Business Correspondents by using their UIDs

NPCL defines this facility as “a bank-led model, enabling online financial inclusion transaction at PoS or point of sale, or the MicroATM, through Business Correspondent (BC) of one bank for customers of another using Aadhar Authentication.”

Through this project NPCL will give a boost to the Financial Inclusion Plan as it will make easy to access their account for the no-frills account holders in the remote areas of the country.

The project is made functional in various districts of Jharkhand, where UIDs have been allotted. The three banks that are involved with this project are ICICI Bank , Union Bank of India and Bank of India.

Banks to be rewarded for every no-frills account opened

2011-03-01T03:55:00.001-08:00

To encourage the banks to open more and more no-frills accounts and to boost the Financial Inclusion Plan, Finance Minister Mr Pranab Mukherjee during his budget speech proposed to give Rs 140 to the respective bank for every no-frills account opened.

Mr. Mukherjee said "Financial support to the banks for opening 'no frills' accounts under Swabhiman Scheme as part of Financial Inclusion Plan Rs 50 crore (Budget estimate for 2011-12)."

No-frills accounts are meant for the individuals that have very basic banking requirements as such bank account provide very limited services. He also announced the launch of ‘Swabhimaan’, a multimedia campaign to spread awareness and to encourage people to open bank account.

Kotak Mahindra announces major expansion plans

2011-02-24T03:27:00.000-08:00

Kotak Mahindra Bank has recently announced its expansion plans. The bank plans to increase the branch count to 500 from 300 by March 2012.

The Executive Vice-Chairman and Managing Director of the bank Mr. Uday Kotak said “We aspire to be national, including wholesale banking. We also want to see how we can get bigger. Inorganic (route) is something that also interests us. That's something on our radar.”

The bank plans to target wide range of customers apart from the high-worth customers. The bank also plans to expand its network overseas and is in talks with local players in the countries in US and Europe.

Kotak Mahindra to raise branch network to 500

2011-02-22T03:31:00.000-08:00

Kotak Mahindra Bank has planned major expansion plans for nest 12 months. The bank has set a target to raise the number of branches from 300 to 500 in nest 12 months.

The bank intends to target a wide range of customers apart from its high networth customers. The Vice Chairman and Managing Director of the bank Mr. Uday kotak said "It depends on how you define mass affluent. For us, we define mass affluent as anyone who has an annual household income of Rs 5 lakh compared to Rs 4.5 lakh when we started in 2003."

He also said that there are plans of collaborations with local banks in US and Europe in a bid to expand globally.

Once Indian Banks were deprived of foreign expansion

2011-02-18T04:11:00.000-08:00

In the recent times the Indian Banks are constantly expanding their branch network in the foreign countries and are also enjoying very descent profits but the case was very different during the early days of the country, i.e after the independence.

During that time the Indian Banking system was bound by very strict rules and regulations imposed by the central bank that would not allow Indian Banks to expand in overseas market primarily because due to a sense of insecurity that if Indian Banks are allowed to open offices in foreign countries then the foreign bank might also request for the same. It is also known as the principle of ‘Reciprocity’.

During the sixth decade of the previous century leading Indian Banks like Punjab National Bank and Bank of India sought overseas access but The Reserve Bank of India declined the proposal at once because of the chances of the application of the principle of ‘reciprocity’. As at that time it was intolerable to let the foreign banks earn profits within the country.

IOB to raise branch count to 3,000 by March 2013

2011-02-11T03:51:00.000-08:00

In a bid to expand the branch network, Indian Overseas Bank announced to take the total number of the branches of the bank to 3000 across the country by March 2013.

Recently the bank celebrated the Platinum jubilee year and on the occasion the bank launced 75 new branches and 75 new ATMS.

Currently the bank comprises of 2,020 branches and 1,000 ATMs across the country and the bank plans to take the number of both branches and ATMs in the country to 3,000 by March 2013.

In the ensuing years the bank plans to develop the branch network in the states that belongs to the central part of the country i.e Rajasthan, Madhya Pradesh, Chattisgarh, Jharkhand and Bihar. The Chairman and Managing Director of the bank Mr. M Narendra said “In these States our branch presence is somewhat on the lower side. We would like to have more presence in these States.”

RBI to tighten noose on banks regarding customer services

2011-02-09T03:38:00.000-08:00

The Reserve Bank of India might soon revise the guidelines for the customer services provided by the banks. The bank is planning to keep a strict eye on the banks that do not provide proper customer services is also planning to impose strict penalties that includes monetary as well as procedural penalties on such banks.

A committee led by Mr. M Damodaram former Sebi chief said that the existing guidelines by RBI on customer services need to be amended. The panel said that such a move will strengthen the Banking Ombudsman.

The Banking Ombudsman Scheme was launched by the Reserve Bank of India to provide bank customers a platform where they can register complaints on the services provided by the banks. There are 15 offices of Banking Ombudsman across the country to facilitate the bank customers.

The panel has suggested the banks to use advanced technology in order to upgrade their customer service facilities.

Support line from Catholic Syrian Bank

2011-02-08T03:41:00.001-08:00

Catholic Syrian Bank has come up with anew scheme to facilitate its customers. The bank has launched a support line that will include Doctor on call , organizing events, property transactions, payment of utility bills etc.

During the launch event free solar study lamps were also distributed to the financially weak students.

Islamic Banking System gets legal nod in Kerala

2011-02-04T03:53:00.000-08:00

The Kerala High Court has given approval to the non-banking finance company based on the Islamic principles by Kerala State Industrial Development Corporation (KSIDC). Earlier the President of Janata Party Subramanian Swamy and others filed a petition against the company stating that it is an act to promote a particular religion.

However the High Court Bench dismissed the petition when (KSIDC) proposed to carry out operations according to Shariah-complaint manner encompassed with the law of the country.

The Director and Executive Manager of the company Mr Najeeb said “It is a very favorable development and the board of directors will meet to decide on the plan of action.”

He also said “The whole idea of the concept is to make use of funds without interest, directly or indirectly, for infrastructure projects in Kerala and reward the investors through profits.”

A few months ago Prime Minister Mr Manmohan Singh said in Kuala Lumpur said that he would propose RBI to survey demand of Islamic banking in India but the Governor of RBI Mr D Subbarao was not in favor of setting up such a system in Kerala, he justified it by saying that such a system can not exist under the provisions of the current Banking Regulations Act.

Greater participation of private banks required for FIP: AIBOC

2011-02-01T03:55:00.000-08:00

The All India Bank Officers' Confederation (AIBOC) asked the private sector and foreign banks to participate with more enthusiasm and to put more effort in the Financial Inclusion Plan. Such an effort will increase the efficiency of FIP.

General Secretary of AIBOC Mr G.D Nadaf said “Presently, the working hours of bank officers are not regulated. We demand that their duty hours should be specified. Our confederation is opposed to mergers and acquisition in the banking industry and we demand more number of branches of public sector banks and also a commensurate addition in manpower.”

AIBOC also advocated for up-gradation in the pension and the medical facilities of the pensioners, five day working in banking industry and fixed working hours for the bank officials.

Banks to set up admin offices in Tier 3- Tier 6 cities

2011-01-28T03:25:00.001-08:00

The Reserve Bank of India has decided to grant permission to the domestic scheduled commercial banks to open administrative offices and central processing centers in rural, unban and semi urban areas of the country.

This is a move from the central bank to boost up the Financial Inclusion Plan that is meant to equip all the villages of population more than 2,000 with basic banking facilities before March 2012.

The new guidelines will enable the banks to set up administrative offices in Tier 3 to Tier 6 centers including north eastern states and Sikkim, subjected to report.

RBI has categorized the centers with a population of more than 49,999 as Tier 3 to Tier 6 centers, based on the 2001 census. Such administrative offices will strictly attend back end operations and will not be indulged in any kind of customer dealings.

Banks slow in fin.inclusion target in karnataka

2011-01-19T02:44:00.000-08:00

The commercial banks in Karnataka have not been able to prove their caliber as they are lagging behind the target set by the Reserve Bank of India for the banks in the state to conclude the Financial Inclusion Plan successfully by March 2012.

Under Financial Inclusion Plan the Central Bank has set the target of providing basic banking facilities to all the villages with population above 2,000 by March 2012.

The banks in Karnataka were allocated a total of 2,253 villages that were to be equipped with basic banking facilities before March 2012 According to a report the banks in Karnataka were able to cover only 1,075 villages under the facility by December last year.

The Chairman of State Level Bankers committee Mr Basant Seth said “Certain discrepancies like duplication or overlapping of villages, inclusion of villages already having branches, and such others were observed and subsequently the target was revised. Thee banks have now been asked to submit the monthly progress made in new formats prescribed by RBI and ministry of finance indicating revised villages,”

As a solution to the problem RBI has suggested the banks in Karnataka to follow one from the two models of one district - many banks or One district — one bank - to achieve the financial inclusion programme.

However here Corporation Bank needs to appreciated as it as already completed the task of extending banking facilities to 124 villages that were allotted to the bank, well ahead of time.

Pay an additional of 2% on every mobile banking transaction

2011-01-17T04:20:00.000-08:00

The customers who intends to operate their account through their cell phones will have to pay a commission of 2 percent to their corresponding bank .

According to the inter ministerial report the customers will be able to transfer, withdraw or deposit money through their cell phones or through the micro ATM service provided by the telecom operators. It aims to link the account with UID of an individual but it could be done only after the approval from RBI.

The report says “To promote adoption, government payments under various schemes will be directly credited to these mobile linked no-frills accounts once the citizen registers with the government agency providing such benefits,”

According to the report the banks have to pay 1.4 percent of the commission to the telecom operators that will gradually reduce to 1 percent over a period of next five years.

A few days ago State Bank of India finalized the deal with Bharti Airtel and ICICI bank with Vodafone Essar to provide mobile banking and other financial facilities to the customers of the bank.

Bharti Airtel and Vodafone will act as a business correspondent for the respective banks under the norms laid by RBI on Financial Inclusion Plan and will handle the financial services provided by the bank.

NABARD to improve condition of Co-op Banks

2011-01-13T04:04:00.000-08:00

Due to lack of modern facilities the Co-operative Banks have been left far behind the commercial banks. In order to improve the present condition of the co-operative banks NABARD (National Bank for Agriculture & Rural Development) has planned to bring the co-operative banks under a common Core Banking Infrastructure.

Executive Director of NABARD Mr Prakash Bakshi said “Our effort aims at creating a level-playing field for cooperative banks in terms of modern banking solution. Except for some stray attempts , most of these banks do not have a CBS platform”.

The country has a network of 31 co-operative banks working at the state level and 370 co-operative banks working under them. These banks provides banking facilities primarily to the poorer section of the society. These banks had witnessed a drastic decrease in the number of customers over the years , primarily due to lack of modern facilities.

In order to bring a change to the present condition of these banks NABARD has decided to bring these banks under a common Core Banking Solution . NABARD will also set up a common data center and a disaster recovery system for the banks.

Mr Bakshi said NABARD has written to all its constituents to join hands in this endeavour . “Banks with existing CBS platform can also switch to our platform” . He expects this process to be functional by July this year.

Ready to upgrade your mobile to “mobile wallet”

2011-01-10T04:18:00.000-08:00

Mobile banking has gained a lot of popularity in very less time and is poised to gain more popularity in the years to come. People who have been using this service are very excited due to the introduction of such a facility by the banks.

Presently Seven banks—State Bank of India, ICICI Bank ,HDFC Bank , Yes Bank , Axis Bank , Union Bank of India and Bank of India are providing this service to their customers and more banks are expected to follow very soon.

Mobile banking has made the access to the accounts for the customers very easy. They could operate their account from anywhere and at any time. People can check their account details make payments, pay bills, recharge their phone etc and the services provided under mobile banking are likely to expand very soon. In the years to follow people might start using their mobile phones as a smart card for a ride in metro or toll tax on highways would be done through mobiles. There would be no need to carry cash or credit/debit cards.

It is very easy to avail this facility , all that a user requires is just a GPRS enabled phone then the other mandatory thing is that the phone number of the user must be registered with the bank. Then the user have to send a text message given by the bank, then the bank will send a link to the user. The user need to download it, and it is done. Now the mobile is not just an ordinary mobile, now it is “mobile wallet”.

Banks to implement Base Rate method from June

2011-01-07T04:38:00.001-08:00

The Reserve Bank of India has extended the deadline for the banks to implement the new method for computing Base Rate. Base rate is the rate below which the banks can not lend money to any one. The new deadline imposed by the RBI is 30^th June.

In a notification RBI said “Banks are permitted to change the benchmark and methodology used in the computation of base rate for a further period of six months, i.e. up to June 30, 2011,"

Earlier bank used Benchmark Prime Lending Rate, but there were complaints from the customers that the banks were charging very low interest rates to some of their customers. This is when RBI came up with the proposal Base Rate. The motive behind the introduction o Base Rate by the RBI was to bring transparency in the lending operations of the banks.

Under the new system the customers are charged above the base rate according to their credit profile , it solely depends on the bank that how much extra the bank charges the customer.

Transactions through ATM to go more secure

2011-01-06T00:49:00.000-08:00

RBI is now planning to make the transactions made through the ATM more secure. As the RBI received many complains regarding the misuse of their ATM cards, the bank has planned to bring amendments to the process of ATM transactions.

ATM have gained a lot of popularity and demand in the recent years, because it is very convenient, easy to use and easily available source . As the use of ATM have increased, there has also been a rise in the frauds regarding the ATM transactions.

Earlier a customer could conduct many transactions by punching the PIN only once. There were cases when some people forgot to collect their ATM card during the transaction in the machine itself and some unauthorized person made transaction from the account of the person.

To check such practices RBI has asked the banks to make amendments in the process of the transactions trough the ATM and allow only one transaction for every entry of PIN. Such a practice would definitely bring decline in the ATM transaction frauds.

Earlier RBI instructed the banks to bring the new changes in existence from January 1 , 2011 but some banks were still not prepared and were in the process of upgrading the system so RBI is yet to decide the new deadline. In the meanwhile the banks are making their customers aware about the developments.

In a circular issued by HDFC Bank to the customer, the bank informed : "As per RBI guidelines, you will need to re-enter your ATM PIN for every additional ATM transaction in a single session, with effect from 1st January, 2011".

Banks need to tap opportunities in rural area

2011-01-04T01:27:00.000-08:00

India is a country with largest banking network in the world. Yet in a population of around 118 crore, we have just 15 crore saving accounts. In the largest banking system the rural area is still deprived of banking facilities.

In recent past rural area was never in the target list of the banks. The banks always assumed rural banking as non- lucrative sector . But the rural areas in India have a lot of potential that can help banks to grow, if the banks are able to tap it in an efficient way.

India has a total banking network of 79,000 branches , out of which only 31,000 are in rural area . In order to meaningfully tap the rural banking opportunity, we need to find solutions to three important challenges namely (1) infrastructure set-up costs, (2) operating costs and (3) risk mitigation strategies. However, the conventional banking approach has so far failed to address these challenges, and therefore, we need to adopt the ‘frugal innovations’ approach to develop a scalable and sustainable business model.

It is a very different management approach that works from the bottom of the pyramid , it vastly differs from the approach that the banks in India uses presently. The business correspondent modal proposed by RBI is also very effective to achieve Financial Inclusion. Through these techniques the banks could cover remote areas very easily.

The easy accessibility of the banks in any form to the rural area would definitely check the exploitation of poor farmers in the villages. Such practices will ultimately help the country to develop from the grass root level as then all the Government schemes would reach the rural population directly and they will be able to make the most of it.

Leading banks raise interest rates

2011-01-03T03:13:00.000-08:00

Following the market trend leading banks like State Bank of India , ICICI Bank and HDFC Bank have announced an increase in lending and deposit rates on the new year eve.

SBI announced increase in the base rate by 40 basis points to 8 percent. SBI also raised benchmark prime lending rate by 25 points to 12.75 percent. The new rates would be effective from January 3.

ICICI bank raised the lending rate by 25 basis points to 8.25 percent. The bank also announced an increase in benchmark prime lending rate by 0.25 percent with effect from January 3, 2011.

Besides ICICI, private sector peers like Kotak Mahindra Bank and Dhanlaxmi bank also raised their base rate to upto 75 basis points.

Shinhan Bank opens third branch in India

2010-12-28T01:46:00.001-08:00

South Korean lender Shinhan Bank has opened their third branch in India. The third branch of the bank was inaugurated last week at Walajapet, in Vellore district in Tamil Nadu.

According to an official, the bank will offer a lot of banking products to the customers including term loan, working capital through the corporate branch recently opened.

Shinhan Bank is a flagship company of Shinhan Financial group that belongs to South Korea. The bank was established in 1897 and has more than 18.7 million client base with a total asset base of $ 211.30 billion.

Central Bank to reach every district soon

2010-12-24T03:52:00.000-08:00

On the occasion of Centenary celebration of the Central Bank of India , the Chairman and Managing Director of the bank Mr S Sridhar announced the opening of 100 more ATM and adoption of 100 villages across the country.

The bank also announced that they have planned to have a physical presence in every district head quarter by December 2011.

Currently the bank has a physical presence in 496 districts. It has a total of 3,644 branches and 238 other offices and plans to establish presence in 131 more districts by the end of next year.

On the occasion, Mr S. Sridhar said that “We will have a physical presence in every district in the country by the end of our centenary year”.

NRI remittances eased by Dhanlaxmi Bank

2010-12-22T03:47:00.000-08:00

In order to offer more facilities to customers, Dhanlaxmi Bank has inked an agreement with Doha Bank. Dhanlaxmi Bank is one the fastest medium size private bank of India. The bank has around 274 branches across India.

This facility will prove very much beneficial for the people in India whose relatives are in Qatar. A person in Qatar can now transfer money directly to any of the branches of Dhanlaxmi Bank in India by any of the branches of Doha Bank in Qatar or by using internet banking service of the bank.

Head branch banking and NRI business, Dhanlaxmi Bank Mr Salil Datar said “This association with Doha Bank is part of our NRI Banking business proposition. The arrangement will enable us to provide our customers convenient and secure services besides expanding our remittance network across GCC countries.”

On the occasion Executive Manager, International banking group, Doha Bank Mr R Ganesan said “The tie-up with Dhanlaxmi Bank provides an opportunity to extend our services to the vast NRI community in the region by meeting all their banking requirements. We are committed to serving the NRIs and provide them a seamless banking experience.”

State Bank of Patiala opens 30 branches in North India

2010-11-01T04:47:00.000-07:00

State Bank of Patiala has opened 30 branches across the North India. T Lokeshaiah, chief general manager, the State Bank of Patiala said, for current financial year said that the bank has set a target of opening more than 100 new branches. With this bank total branch network will exceed 1,000.

Out of this, the bank will open 40 branches in Punjab, 20 in Haryana, 10 in HP, 10 in Rajasthan and remaining branches will be spread across Chandigarh, J&K, Delhi, UP, Uttrakhand, Maharashtra and four southern states.

The 20 branches will be opened by the Bank under the Brick & Mortar model of financial inclusion initiative, under which bank will cover unbanked villages with population of 2,000 and above, allocated to the bank by State Level Banker’s Committee (SLBC), to reach to the poorest of the poor.

Central Bank of India to expand branch network overseas

2010-10-29T04:43:00.000-07:00

Central Bank of India (CBI), a Mumbai based public sector lender is in a process to expand its presence overseas by opening branches in China, Bhutan, Tanzania and Mozambique.

Bank Executive Director Rajeev Kishor Dubey said more branches are being opened in order to increase its international business and provide banking facilities to the Indians settled abroad.

However he did not reveal the total number of branches to be opened overseas.

Dubey informed the bank has launched Internet-based remittance service, called ‘Cent Fast2 India', in association with Bank of New York Mellon, for Non-Residents Indian residing in the US

He said, "The bank will achieve 100 per cent CBS (core banking solution) coverage by December 21 next year coinciding with the birthday of Sorabji Pochkhanwala, who founded India's first swadeshi bank on December 21, 1911."

The public lender is offering services in 3,000 villages, having population of less than 2,000, by 2010 as part of the Government’s financial inclusion program using mobile telephone technology.

Dubey said, "The bank will develop software in Gujarati and other local languages so that villagers do not experience difficulty in accessing banking facility."

The bank for fiscal 2010-11, has set a target to achieve business turnover of Rs 3, 00,000 crore. He said, by end of March 31, 2009 bank turnover was Rs 2,46,000 crore.

Kotak Mahindra Bank opens first branch in Chakan on Pune-Nasik Highway

2010-10-28T04:53:00.000-07:00

Kotak Mahindra Bank (KMBL) has opened its first branch in Chakan. The branch is located at Shubhmangal Plaza, Gate No 1286, Talegaon Chowk, Pune-Nasik Highway. However this is the 7th branch in Pune and 62nd in the state.

Virat Diwanji, executive vice president, Kotak Mahindra Bank said, “Chakan is an important industrial hub with the presence of many manufacturers and IT majors. This presents immense opportunity for Kotak Mahindra Bank to expand its reach and increase customer engagement in the region. Pune is a prominent market in the overall growth strategy of the bank and we will continue expansions across the city.”

Dhanlaxmi Bank opens a flagship branch in Mumbai

2010-10-25T04:54:00.000-07:00

Dhanlaxmi Bank has opened a flagship branch in Prabhadevi, Mumbai for its customers. The branch is located near new passport office on Veer Savarkar Marg at Prabhadevi, Mumbai

G N Bajpai, Chairman, Dhanlaxmi Bank inaugurated the branch it is located near new passport office on Veer Savarkar Marg at Prabhadevi, Mumbai.

The branch has been designed by Fitch, a leading international brand and retail design consultancy. The branch is designed on the new retail concept.

The branch has an innovative design, pleasant and relaxing banking environment for its customers, with modern external façade which is supplemented with interiors to offer customers entirely new experience.

The flagship branch has a separate meeting and greeting area, full self-service zones, aesthetically designed meeting rooms, open customer service area with individual desks for investments and NRI function, and the flagship branch has been designed to facilitate greater customer convenience and experience. This branch integrates the Bank’s rich heritage and values with designs that keep on with the future, along with products and brand wall.

At the occasion, Amitabh Chaturvedi, Managing Director, Dhanlaxmi bank said, “The opening of our flagship branch marks yet another milestone for the Bank. We have always believed that banking should be a personal experience.”

SBoP has introduced 999 days tenor deposit, hiked term deposit rates by 25 bps to 50 bps

2010-10-04T03:56:00.001-07:00

State Bank of Patiala (SBoP) has hiked its term deposit rates by 25 bps to 50 bps also launched a new product of 999 days offering 8%p.a. interest rate for its existing and new customers. The new rates will be applicable from 4 October, 2010.

SBoP spokesperson informed that interest rate for 555days have been raised to 7.75% from 7.50%. Interest rate for 91 to 180 days is 5.50% p.a., for 181 days to 269 days rate is 6.25% p.a. and 270 days to < 1year it is 6.50% p.a., while interest rate for 1 year to 554 days & 556 days to 2 years has been set at 7.50% p.a.

For deposit of more than 2 years to less than 8 years (except for 999days) bank is offering interest rate of 7.50% p.a. and for 8 years to 10 years 7.75% p.a. Additional interest rate for senior citizens have been set at @ 0.50% for a period of one year and above. The spokesperson said, for SBP Tax Saving Scheme interest has been set at 7.50% p.a.

Bankers against deregulation of savings accounts interest rate

2010-09-23T04:05:00.000-07:00

The Reserve Bank of India (RBI) wants to deregulate the interest rate on saving accounts to smoothen monetary policy transmission, as it feels is being hampered by the current fixed-rate regime. But RBI’s move is facing stiff resistance from the banks.

A 3.5 per cent a year, interest on savings accounts is the only regulated rate left in the Indian banking system and is highly controversial, given its impact on the common man. The banks fear that by making this product low – cost product can bring instability in the market.

The banks told RBI that this is not the right time for such a move. The RBI held a meeting with top bankers where their views on this sensitive issue were sought.

The chief of a bank, who attended the meeting said, “The savings bank interest rate acts as an anchor for other rates. One of the fallouts of deregulation would be that when there is a squeeze on liquidity, the rates could rise to the level of fixed deposit rates.” He added, “It will be a double whammy: there will neither be fixed deposits nor low-cost deposits.”

On Tuesday country’s top bankers, including ICICI Bank MD & CEO Chanda Kochhar, State Bank of India MD S K Bhattacharyya, HDFC Bank MD Aditya Puri and Standard Chartered Bank Regional CEO for India & South Asia Neeraj Swaroop will be meeting RBI Deputy Governor Subir Gokarn regarding this issue.

Another bank chief said, “Savings deposits are seen as a bank’s core deposits. They help us in asset-liability management. Most banks are of the view that it is too premature to deregulate the savings bank rate.”

A few months ago RBI had proposed the idea of freeing the savings bank rate. Recently Deputy Governor Usha Thorat had said, a working group will be set up to look into the possibility of deregulation. Thorat had said, “We have to examine whether the deregulation can help bring more people into the formal banking system."

Banks likely to raise lending, deposit rates in Oct

2010-09-20T05:08:00.000-07:00

The Reserve Bank of India for the fifth time has raised the repo and reverse repo rates by 25 basis points and 50 basis points. The impact of this hike will be visible on lending and deposit rates. But bankers indicate that the hike in lending and deposit rates will not come into effect before October as credit growth has yet to pick up.

Most probably banks will raise deposit rates first as there is a need to improve the sluggish deposit growth. Later lending rates will be raised.

Mr M.V. Nair, Chairman and Managing Director, Union Bank of India, said deposit rates will be raised to incentivize savers.

He added, “Deposit growth is lower than the RBI's projection. If it continues to be low, it cannot support the credit growth, which will pick up in the busy season. So, the priority at this point of time has to be deposit growth.''

Mr M.D. Mallya, CMD, Bank of Baroda, said a clear message has been received from the RBI’s move that interest rates will move upward. But the lending rates will not be raised unless credit starts picking up.

He added, “It is also possible that deposit rates may go up first, and then the lending rates, subject to credit demand. A hike in rates may not happen immediately as we have just tweaked the rates.”

Mr D. L. Rawal, CMD, Dena Bank points out, in the third quarter which will begin from October, banks will raise only deposit rates as banks might face some liquidity pressure due to credit pick-up.

He added, “Once credit picks up in the third quarter, we will have to up interest rates on term deposits.”

Mr Nair said, in the festive season, the credit demand is likely to pick up so the banks might review their base rates in October, before raising the rates.

While Mr Rawal says, the banks will raise base rate in the January quarter only.

“Given that credit growth has been lacklustre in the second quarter, banks may not revise the base rate. Status quo on the base rate will encourage credit growth during the festive season. Base rate, however, will get revised in the fourth quarter as banks will take into account the deposit rate hikes effected in the previous quarters,'' Mr Rawal said.

Mr Mohan Shenoi, Group Head, Treasury, Kotak Mahindra Bank explained it has been a long period that banks have been under tight liquidity pressure which has increased borrowing cost of banks therefore at some stage banks have to transmit it to borrowers through a review of the base rate.

Karnataka Bank offering savings bank account exclusively for women

2010-09-10T03:15:00.000-07:00

Karnataka Bank Limited (KBL) offers a new product ‘KBL Vanita’, a savings bank account exclusively for women. The rural women have fear that they cannot manage their wealth so bank aims to develop savings habit among women so that they get relieved from all such fears.

Bank offers several unique features under this saving scheme such as females of 18 years and above can open this account, two females together can open joint account, account can be opened even with 'Zero' initial deposits, no requirement of daily minimum balance, Monthly Average Balance (MAB) of Rs.1,000. Bank offer free ‘All Risk’ insurance cover for jewellery covering loss due to snatching while on travel, theft during hotel stay, burglary while at home for Rs 50,000 exclusively to the first named woman of the SB account.

Women will get free fund transfer facility. They can transfer fund of up to Rs 50,000 per month to two savings accounts in the name of children. The other facilities include Multi Branch Banking facility, MoneyPlant VISA International Debit Cards, Internet Banking, Online Payment through Debit Cards (E-Commerce), Mobile Banking (M-Commerce) available free, free SMS alert facility for all Debit and Credit transactions of Rs.5,000/- and above and fastest way of Inter Bank fund transfers through RTGS/NEFT besides, other facilities include Fast collection of cheques, Utility Bill payment, Mobile Recharge and Free monthly E-statements.

Bank will be adding more facilities for its other customers in the near future which includes Online trading, Travel Card, Gift Card, Smart Card, POS Terminal.

Soon Bank will also open new branch in Dadar, Mumbai, at present bank has 464 branches across the country.

RBI seriously considering on deregulation of savings bank rates

2010-09-09T04:51:00.000-07:00

The Reserve Bank of India (RBI) is seriously working on the possibilities of deregulating savings bank (SB) interest rate- the only regulated product in the banking sector. For this RBI is considering for setting up a working group on SB deregulation to have discussion on the issues and draw conclusions.

At present savings bank interest is set at 3.5 per cent by RBI. RBI deputy governor Usha Thorat informed that deregulation of savings bank interest "an issue which is on our radar". She said, "On one hand, the low cost savings accounts provide banks with low cost funds of an enduring nature which facilitate asset-liability mismatch and help lower lending rates. On the other hand, the costs not currently recovered in handling such accounts have to be considered as well." At the FICCI-Indian Banks Association conference she said, "Given the level of interest rates on bank deposits, common persons are lured by higher interest provided by alternate channels especially in the informal markets. Totally freeing rates could, in situations where there is virtual monopoly of banking, lead to lowering rates in some areas while leading to increase in other areas - it would need to be ensured that there is no discrimination between different customers of the same bank."

She added that transparency in cost recovery can help in deregulation of SB interest rate. For this non-discriminatory across location is also important. Above all, the main consideration should be whether deregulation of savings rates will help in bringing more people into the cover of formal banking system. She said, all these issues will be taken up in detail for discussion by the working group.

The RBI is also working on issuing guidelines on banks managing large private pools of capital. Recently banks have started investing in or setting up infrastructure funds or venture capital funds or even in private equity funds.

The RBI deputy governor pointed out, where a bank is directly or indirectly involved or floats/manages large private pools of capital, in such case additional capital requirements to take care of reputation, concentration and other risks not captured in the traditional framework , is needed.

Indian Overseas Bank wants people to open saving accounts

2010-09-08T04:51:00.000-07:00

The Indian Overseas Bank, a public sector bank is encouraging people for opening savings bank account and gain benefit from the Finance Inclusion Scheme.

The bank said the Reserve Bank of India has urged all banks must ensure that they provide banking facilities at the doorstep of people in all villages with a population of above 2,000 by March 2011. The aim behind all this process is to open saving account for all the households, micro-credit, micro-insurance and remittance facilities to all.

The banks have been asked to adopt measures such as opening new branches, extension counters, collection centers, or appointing business correspondents or business facilitators to achieve the objectives.

In an official circular issued by the bank it has stated that no-frills account will be opened without any pre-conditions and a minimum balance will be Rs5.

Recently the Assistant General Manager of IOB, D.P. Balasubramanian launched smart card banking facility at Arittapatti. The bank informed smart card banking facility will be provided to 27 villages in Madurai district and in 21 villages in Virudhunagar district by December-end.

Using smart card people can do minimum transaction of Rs50 and the maximum of Rs 2,000. Through, this project beneficiary of National Rural Employment Generation Program, pensioners, daily wage earners, recipients of government welfare schemes will be benefited.

Aadhaar might soon be the only number needed to open bank account

2010-09-07T04:22:00.000-07:00

In the coming days Adhaar, or a unique identification number will be enough for a person to get a new mobile connection or to open a bank account.

According to Chairman Nandan Nilekani the Unique Identification Authority of India (UIDAI), the apex agency managing the UID project, and aims to give every resident of the country a unique identity, has already started the process to make this happen.

To develop realization about the importance of having a UID, the authority is having talks with the Department of Telecommunications (DoT) and Trai to make Aadhaar numbers sufficient for getting new mobile connections.

Nilekani, while addressing income tax officers on ‘Revitalization of Public Service’ said, “We are negotiating with DoT and Trai on making the Aadhaar number sufficient for getting a mobile phone connection. Presently, a person who wants a new SIM card goes to a retail outlet and he has to do some paper works, other than submitting all necessary proofs. If he has an Aadhaar number, that entire process can be done electronically.”

He informed that the authority is also having discussions with the Reserve Bank of India (RBI), the finance ministry and Indian Bankers’ Association (IBA) to allow Aadhaar numbers as sufficient proof for their know-your-customer (KYC) procedure to open no-frills bank accounts.

He said, “If Aadhaar is sufficient to open a bank account, there is one more reason why a person should get his number.” “We think the reason why it (Aadhaar) will work is that people themselves will start seeing the benefits, and they themselves will drive the adoption.”

However the first set of UIDs was to be issued on September 1, but this has been postponed indefinitely, due to unavailability of Prime Minister Manmohan Singh. The prime minister was supposed to roll out the numbers in Chittoor district of Andhra Pradesh. Nilekani told the new date is yet to be finalized. He said, “We will be launching it in the next few weeks. We will be launching in multiple locations, and hopefully in the next few months, we will ramp up to millions of enrollments.”

IDBI Bank waives host of service charges to raise CASA deposits

2010-09-03T04:46:00.000-07:00

IDBI Bank a public sector lender has waived all charges on a host of services for its current account and savings bank account (CASA) including ATM interchange fee and charges related to average balance, cheque book, demand draft, electronic funds transfer, electronic clearing service, account statement and others.

The bank has waived the charges in order to increase its low-cost CASA deposit base to around 20 per cent of the total deposits in the next six months, from the current 13 per cent. Bank also aim to attract new customers and retain the existing customers through this waive scheme.

With the waiver of service-charge bank customers will be able to access ATMs of other banks any number of time without paying a fee.

The other waived off charges are new card fee, new card issue, cash service, pay order, stop payment, account closure, demand draft issue and cancellation and standing instruction.

Mr R.M. Malla, CMD, said the fee revenue loss due to waiver of service charges on CASA accounts will be earned through gains in business volumes.

Mr Malla said, “We would rather earn fees on the assets side of the balance sheet by syndicating a Rs 5,000-crore loan and earn Rs 50 crore fees than go after small charges on the liabilities side. Large corporates, mid-corporates and SMEs know us very well. We want to be known as a universal bank that caters to the financial needs of the common man.”

IDBI Bank is also planning to tap the equity market in 12-18 months as it has received capital injection of Rs 3,011 crore from the Government.

South Indian Bank launches ‘SIB Flash’ remittance service for NRIs

2010-08-20T04:36:00.000-07:00

South based lender, South Indian Bank (SIB) has launched 'SIB Flash', a real-time remittance service with the UAE Exchange Centre for its NRI customers.

Through this service the NRIs will be able to remit funds instantaneously into the beneficiary accounts with SIB through the Exchange's online banking service.

SIB Managing Director V.A. Joseph said, “This is a secure way of transferring funds swiftly and easily using state of the art system which will help thousands of our valued NRI clients.”

Police arrested college girl for encashing fake bank draft in Habra

2010-08-12T00:04:00.001-07:00

The Central Bank of India bank manager posted in branch at Habra, instinct has helped Kolkata police to get to know about money laundering, which can be a new method. The police have arrested the first suspect a college girl for trying to encash a fake draft of over Rs5 lakh.

The girl named Khadija Khatun, a second-year student of Chaitanya College, Barasat had gone to bank branch at Habra a few days ago to deposit a draft of Rs507,350. The manager got suspicious when his bank official informed about the high value draft thus he did a quick check of her profile. He found, Khajida, who hails from Kashipur in Habra belong to a family of modest means. So, he checked the authenticity of the bank draft thoroughly. The draft was fake. He immediately informed police. On Monday when girl came to bank to withdraw cash police arrested her.

At the time of interrogation, she told police that she received the draft by post sent anonymously. She said she also got a call from this man a few days ago, who told her to get it encashed. But police is not relying on Khajida’s claims. She is being suspected to be a part of a racket of duping banks with fake drafts and cheques. Police is checking her cellphone records to try and trace the number from which she claimed to have received the phone call from the man. Khadija is now in police custody.
An officer of North 24-Parganas police said, "She was produced in Barasat court on Tuesday. We hope to get some useful information from her interrogation."

IBA tells banks to open branches close to police stations in remote areas

2010-08-06T04:24:00.000-07:00

The pressure is increasing on commercial banks to open more branches in unbanked areas as part of financial inclusion but banks are worried about frauds and dacoities as there has been increase in such activities after few of the bank branches have been opened in unbanked areas.

An official of the Indian Bank Association (IBA), the apex industry body of India’s banks said,
“There is a proposal that bank branches should only be opened in government offices or near to police stations,” and added that some banks have asked that state governments should provide extra security in risky areas.

In the last 6 months because of dacoities, thefts and robberies the commercial banks have lost over Rs 1,000 crore, the amount can increase if they were further pushed to provide banking in the remote areas.

A senior finance ministry official said, “Banks will be wary of lending, opening branches in remote areas,” and, added the state governments should ensure that the security is provided to bank branches, especially, in the hinterlands.

However the government and the banking regulator, the Reserve Bank of India have show concern over the increase in cases of thefts and dacoities as around 270 cases were reported in the last six months alone.

In view of this RBI has directed its regional directors to hold state-level security committee meetings with the state police officials. Meanwhile, Andhra Pradesh and Uttar Pradesh have reported the highest number of dacoities as a result banks have lost about Rs 320 crore.

This allegedly has impact on the government’s drive to deepen financial inclusion, or make financial services available to those relying on traditional sources of credit or savings through physical assets.

On the other hand government want banks to open more branches in the rural areas and is thinking on various options. For instance, it plans to include financial inclusion as criteria for in performance evaluation of state-owned banks and could also make it one of the conditions while giving out new bank licenses.

According to government’s report out of the 129 unbanked blocks in the country 91 are in the North-East Region, and some of these parts have security issues.

“We have to open branches to pursue the government’s agenda but security issues still remains a concern,” said a senior official with an east-based public sector bank.

The public sector banks are suffers as private banks have to still enter into the hinterland in a big way.

State Bank of India, country’s largest bank, has witnessed 62 such cases and lost around Rs 150 crore. In 2009-10, SBI had lost over Rs 400 crore in 117 cases of thefts or dacoities.

There are around 86,777 branches in the country, 32,301 are in rural areas. Thus branches in rural and semi-urban areas constitute 61% of the total bank branches in the country.

Barclays setting up 30 off-site ATMs in Mumbai and Delhi

2010-08-05T04:25:00.000-07:00

Barclays, a foreign bank to set up more ATMs in Mumbai and Delhi in order to increase its visibility. The bank is adding 30 off-site ATMs in these cities.
The work of setting up of these new ATMs will start this month. The bank release said the addition of ATMs is a part of its strategy of focusing on the mass affluent customer segment.
At present bank is having 11 off-site ATMs set up across the country and six others at branch locations.

StanChart launched first mobile ATM in Mumbai

2010-08-04T04:32:00.000-07:00

Standard Chartered Bank launched its first mobile ATM in Mumbai to offer better service to its customers.

A bank press release said, through this mobile ATM bank will offer facilities such as cash withdrawal, funds transfer, statement and cheque book requests, mobile and online banking regulation, pre-paid mobile top-up and other such services.

It will also have cheque drop box and a phone banking facility.

Standard Chartered’s Group Executive Director and CEO Asia, Jaspal Bindra, said, “The mobile ATM will give our customers greater convenience, bringing our services at a location closest to them.”

The release said, in the next 6-9 months bank will launch a second mobile ATM either in Mumbai or New Delhi.

Recently bank has also launched 50 Express Banking centers in Mumbai and Delhi, where the customers can perform a range of banking operations independently and securely. At these centers money vending machines have been installed also there are electronic cheque deposit box and a phone banking kiosk.

Union Bank and PNB raised BPLR rates

2010-08-03T04:37:00.000-07:00

In order to push the existing customers to the new base rate system for loans, banks are increasing their benchmark prime lending rates.

Recently Punjab National bank and Union Bank of India have raised their BPLRs. PNB has raised its rate to 11.75 per cent from 11 per cent with effect from August, while Union Bank has raised the rate to 12.25 per cent from 11.75 per cent with effect from August 4. In the coming months more banks are likely to follow the suit.

One of the reason behind this move is, most probably banks want to account for the rising cost of deposits and to protect their margins. According to some bankers, banks might also want to push existing borrowers to the base-rate linked lending regime by increasing the costs for BPLR-linked borrowers.

However banks have requested the RBI to announce a sunset clause with June 30, 2011 as the deadline for moving all the existing bank loans to the new base rate-linked lending regime.

Another reason may be banks do not want to get involved in litigation if their clients, especially who have taken project loans, at the time of renewal of loans don’t want to move to the base rate linked lending regime from the former BPLR regime. Most of the banks have set their base rates in the range of 7.50-8.50 per cent.

Also, banks don’t want to be burden of administering two benchmark lending rates.

A senior Union Bank of India official said, “In the current scenario of rising interest rates, our deposit costs are increasing. Hence, we have no choice but to realign the BPLR to protect our margins.”

But the public sector bank official cautioned that existing borrowers should not blindly move to base rate system as banks increase BPLRs just because it looks a bit cheaper in comparison to BPLR based-lending, as there are possibilities that banks will also review their base rates as they raise their deposit rates.

Union Bank of India has raised its term deposit rates across different maturities by 25 to 100 basis points with effect from August 4.

For maturities of 1 year bank has raised rates by 25 basis points from 6.50 per cent to 6.75 per cent. While for short-term deposits of 91 days to less than 6 months and 6 months to less than 9 months, banks has raised interest rates from 3.5 per cent to 4.5 per cent and 4.5 per cent to 5 per cent respectively.

Customers of other banks to get facility of paying LIC premium via mobile phone

2010-07-23T04:52:00.000-07:00

Life Insurance Corporation of India (LIC) policyholders having bank account in other banks apart from Corporation Bank, in which LIC owns a stake, will be able to pay their insurance premiums through mobile phones. Till now the account holders of Corporation Bank were able to pay premiums on select LIC policies through mobile phone.

In an interview with the Wall Street Journal, TS Vijayan, LIC chairman, said, “We are in discussion with two to three banks; if you have a bank account with them, through mobile you will be able to transfer (funds).” He said most probably the facility be rolled out some time this year.

With Corporation Bank, LIC tied-up for this facility two year ago and the customers who sign up for bank’s mobile payment services are able to use this facility.

The customer sends a text message to a given number and once the payment gateway verifies his or her details from LIC, the premium is deducted from the customer’s account. Payment of unit linked insurance plans cannot be made through mobile phone.

In July 1995 LIC introduced its first information communication technology (ITC) facility by offering online service to its policy holders. Through this service policyholders can receive immediate policy status reports, their payments are promptly accepted also get revival and loan quotations on demand.

Then, the company started using interactive voice response (IVR) service which enabled customers to get information on the next premium due, policy status, loan amount, maturity payment due, accumulated bonus etc. through their mobile phones in 59 centers across the country.

Bank official of nationalized bank booked for duping customers of Rs 2.4 lakh

2010-07-22T04:49:00.001-07:00

The bank officials of a nationalized bank were booked by Samarth police following directives of the court. The officials have been charged of cheating the two customers of the bank by transferring Rs 2.4 lakh from their account to another account without informing them.

The incident took place at the Nana Peth branch of the bank between year 2004 and 2008.

Inspector B B Ingale (crime) told TOI that the bank customers Rejesh Navlakha (41) of Lullanagar lodged a complaint in the court and the court had directed the police to file a complaint against the bank officials.

Ingale told Rajesh and his brother Sandip had deposited Rs 1.2 lakh each in a fixed deposit account for three years in 2004.

In January 2008 when their fixed deposit got matured they went to the bank to get their money, they were told that their account has been closed. Ingale added, "When they demanded the reason under the right to information (RTI), the bank informed that their Rs 2.4 lakh had been transferred to a loan account, which happened to be their relative's."

Ingale further told, "We have registered the complaint against the bank officials under sections 409 (criminal breach of trust by banker) and 418 (cheating with knowledge that wrongful loss may ensure to person whose interest offender is bound to protect) of the IPC. We have asked the officials to submit all documents regarding the case with the police."

BoB will open seven new branches in North

2010-07-20T23:57:00.000-07:00

Bank of Baroda (BoB) will be opening seven new branches in Punjab, Haryana and Himachal Pradesh. SK Goel, deputy general manager, Bank of Baroda and regional head, Chandigarh region comprising Punjab, Himachal, Haryana, Jammu and Chandigarh informed that new branches of BoB will be opened at Ropar, Muktsar and Dhuri in Punjab, Saha, Karnal and Pinjore in Haryana and one in Kullu, Himachal Pradesh.

Goel said, in Chandigarh region bank already has 102 branches and with addition of seven new branches to its fleet, the number will swell to 109. He said that bank is celebrating its foundation day so, as part of the celebrations it will be opening 61 new branches all over India. BoB at present has more than, 3,100 branches in India and 81 branches abroad in 21 countries.

“All the new branches will provide core banking solutions including internet banking, housing loan, automobile loans, education loan, agriculture loans, exporters and finance to medium and small industry etc. ATM cards, credit and debit cards, lockers etc. These branches would also take care of mutual funds and life insurance requirements of customers through its subsidiaries”.

He added during the financial year 2009-10 bank did more than Rs 4,00,000 crore business and in Chandigarh region it did business of more than Rs 8,500 crore. He said for 2010-11 financial year bank has set a target of doing a business of Rs 11,000 crore from this region.

Dhanalakshmi Bank will now be spelled as Dhanlaxmi Bank

2010-07-16T04:35:00.000-07:00

Dhanalakshmi Bank, a private sector lender has rechristened the banks name as 'Dhanlaxmi Bank'. A special resolution was passed by the shareholders of the bank.

The filing said, "...Passed the special resolution for changing the name of the bank from the present 'The Dhanalakshmi Bank' to 'Dhanlaxmi Bank'."

The bank did not give any reason for going ahead with the name change.

The shareholders of the bank passed another resolution for issuing 2.10 crore equity shares to institutional buyers and investors.

They also took decision to seek a dividend of around 10 per cent, subject to approval of the Reserve bank. Earlier in a meeting held on May 11 the board of directors had recommended a 10% dividend.

Banks request RBI to announce sunset clause till June30, 2011

2010-07-13T10:18:00.001-07:00

Yesterday bankers had met the Reserve Bank of India (RBI) officials and have requested to announce the sunset clause via a fiat with June 30, 2011 as the deadline. They said such a short time for switching over to base rate can get involved in litigation of clients, especially those that have taken loans for big projects, might refuse to move to new base rate system from the previous benchmark prime lending rate system at the time of annual renewal of loans.

Therefore it is expected that the RBI might soon announce a one-year sunset clause to help banks move all their existing loans to the new base rate-linked lending regime.

Mr O. P. Bhatt, Chairman, State Bank of India said RBI is scrutinizing the pros and cons of the proposed sunset clause thus the announcement is likely to be made soon. Mr Bhatt, who is also Chairman of the Indian Banks' Association, was addressing the media after bankers had given their feedback to the RBI top brass for the quarterly review of the Monetary Policy, scheduled to be released on July 27.

Dr K. Ramakrishnan, Chief Executive, IBA informed that issue on dealing with corporate debt restructuring (CDR) under the base rate regime was also taken up for discussion.

Banks offer concessions and waivers on interest rates, rescheduling repayment, and converting debt into equity to the corporate to help them in getting back to business via debt restructuring. During the discussions bankers said although, they are not allowed to lend below the base rate, but RBI should make some provision to allow them to reduce interest rate to the base rate level or lower as the recompense clause under CDR which will help in offering concessions.

Since May-end banking system has been experiencing liquidity tightness, bankers point out by end of July it is likely to improve.

“Liquidity is expected to improve by July-end and beyond,” said Mr Bhatt. Another banker pointed out unless credit demand move upwards, banks will not raise deposit rates.

Cooperative Bank to open more branches

2010-07-09T07:15:00.000-07:00

Sri Gokarnanath Cooperative Bank Ltd is opening its 13th branch at Regal Plaza, on Mission Street. The branch will be inaugurated by former union minister B Janaradhan Poojary on Friday. The bank started operations as a cooperative society at Kudroli area in 1925, and then in 1971 it was upgraded in a town cooperative bank.

A Shivananda Karkera, president of the bank told reporters since its set up, bank has been catering to the needs of backward and economically weaker sections of the society by providing them with group financial lending. The bank as per permission granted by the Reserve Bank of India aims to open one branch each year. He said, "RBI allows a bank of our nature to add 1 per cent of its existing branches in the form of new branch."

For the last 47-years bank has been earning profit continuously and has provided dividend to its members. In 2008-09 bank had declared a dividend of 20 per cent and earned a profit of Rs 93.86 lakh during 2009-10. The bank’s capital adequacy ratio is 19.37 per cent, which is above RBI norms, and it showed losses of 0.6 per cent. The bank as per audit classification has been rates A category bank, informed Karkera.

In the near future bank will be computerizing all its branches and administrative head office in a phased manner. At present out of 12 branches 7 are computerized. Kumble Sundar Rao, president, Karnataka Yakshagana Bayalatta Academy will be inaugurating the safe lockers at the new branch. K N Vijayaprakash, commissioner, MCC will inaugurate the computerized office. B R Bhat, general manager, Corporation Bank will preside.

Andhra Bank joint venture subsidiary in Malaysia to start operations in 3 months

2010-07-08T00:35:00.000-07:00

Andhra Bank, a public sector lender banking subsidiary in Malaysia will start operations in the next three months.

Chairman and Managing Director RS Reddy told Business Standard informed, “In all probability, we will register the subsidiary and start operations in two-three months.”

The bank will start the subsidiary in association with Bank of Baroda (BoB) and Indian Overseas Bank. Through the subsidiary bank is expected to cater the Indian population in Malaysia. Andhra bank has a 25% stake in the venture which comes to Rs 104 crore.

The bank has obtained clearance from both the Malaysian Central Bank as well as the Reserve Bank of India for subsidiary. Reddy told, BoB already has a representative office in Malaysia therefore the formalities for subsidiary will be completed smoothly.

Reddy added, in Malaysia out of the 8% of the population, about 2.1 million people are of Indian origin and the subsidiary will be catering to their financial needs. Apart from this, the bilateral trade between India and Malaysia is also increasing and now it stands at about $10 billion

The IndiaFirst Life Insurance Company, an insurance joint venture (JV) of Andhra Bank, BoB and Legal and General Plc of the UK, has started sale of insurance policies through their branch outlets. In the venture Andhra Bank has invested Rs 60 crore for 30% stake.

A senior official of the bank told, up till now AB had 19,689 policies and has collected a premium of Rs 53.44 crore, earning a commission of Rs 2 crore.

Meanwhile bank is expecting to earn a commission of about Rs 20 crore by collecting a premium of around Rs 250 crore.

For the next five years, Andhra Bank has set a target of achieving annual growth rate of 25 per cent, regarding this Reddy said with return on equity being 29.99 per cent the bank’s internal growth alone will help in meeting the target.

He said, last year, bank had registered a net profit of Rs 1,046 crore. After payment of dividend over Rs 760 crore was added to the Tier-II capital, “which will support the 25 per cent growth strategy,” he said.

Andhra Bank had got Rs 1,000 crore from the central government for which the bank will be issuing perpetual non-cumulative preference shares to increase its capital. Reddy added, capital is not a big issue for the bank as it already has a capital adequacy ratio of 14%.

Andhra Bank is planning to open 120 more branches in 2010-11 out of which it plans to open 50 branches outside Andhra Pradesh.

The bank is also working on increasing the share of fee-based income in the total from 12% to 15% in the current year and 18 per cent in 2011-12. Last year, bank fee –based income amounted to Rs 965 crore.

Banks witness robust farm loan recovery after extension in debt relief scheme

2010-07-06T05:20:00.000-07:00

The debt relief scheme has helped banks in speedy recovery of agricultural loans. As a result, in the last quarter agri non-performing assets (NPAs) of most of the banks has reduced.

Earlier in union budget 2010-11 Finance Minister Pranab Mukherjee had announced extension of debt relief scheme. Mukherjee extended the debt relief scheme of 2008 by six months to June 30, 2010, as in some states the condition of farmers was very bad due to drought and in some other parts of the country there was severe floods.

According to State Bank of India, country’s largest lender official, it is expecting its agricultural NPA to come down by in the last quarter. As on March 2010, agricultural loans accounted for nearly 10 per cent of the bank’s loan book. While it’s gross NPA ratio declined to 3.05% from 2.86% last year because of fresh loans turning bad.

Another public sector bank, Bank of India outstanding of agricultural loan stood at about Rs 388 crore under the debt relief scheme is expecting 60% recovery of the loan amount. M Narendra, executive director of Bank of India said, "We deployed special officers for farm loan recovery under the debt waiver scheme. The harvest has also been much better."

United Bank of India is also expecting more than 50 per cent recovery of farm dues in the last quarter. K R Kamath, chairman and managing director, Punjab National Bank said, "There had been significant recovery under the debt relief scheme, as the recovery mechanism was intensified."

Earlier under the debt relief scheme the farmers who have more than 2 hectares of land were given time up to December 31, 2009 to pay 75 per cent of their over dues. Also banks and lending institutions were allowed to recover less than 75% of the debt amount as one-time settlement (OTS) system, provided they bore the difference, as government announced to compensate only 25 per cent of the amount under debt relief.

At this most of the banks waived another 25% of dues, as a result borrower had to return only 50% of the dues.

However the government said it will not pay interest for the six month extension and only reimburse the 25 per cent amount to lending institutions as per the delayed reimbursement scheme.

A bank executive told, last year the farm loan recovery was very low due to factors like drought and anticipation of further relief in farm loans. The recovery dropped by 50% as compared to the previous year.

Foreign lenders too announced their base rates

2010-07-02T04:36:00.000-07:00

As the Indian public and private sector lenders have announced their base rates, foreign lenders have also opted to set their base rates at least 50-100 basis points (bps) lower than the Indian banks.

Amongst the foreign lenders in the country Citibank and Standard Chartered Bank have set their base rate at 7.25 per cent, same as HDFC Bank. Their rate is 25 bps lower than the country’s largest lender State Bank of India (SBI). On the other hand HSBC, the third largest foreign lender in the country has set its base rate at 7.0 per cent while Deutsche Bank has set to a lower competitive rate at 6.75%.

However all the other major public sector lenders - Bank of Baroda, Bank of India, Punjab National Bank and Union Bank of India have set their base rate at 8%.

A senior executive of a foreign bank said, “Given the size of our balance sheets, there is no question of a rate war with domestic banks. Our base rates reflect the area of the market that most foreign banks operate, which is at the short end.” “Most foreign banks are not active in the term loan market or infrastructure loans.”

Some of the foreign banks in the country have much lower cost structure in comparison to their public sector counterparts. For instance, as of 31 March Standard Chartered Bank current account, savings account ratio stood at 60%.

Foreign banks balance sheet is much smaller in comparison to their domestic counterparts and they depend more on fee income for profits. Unlike Indian banks, they have restrictions regarding the number of branches they are allowed to open.

As of March 31, 2009, Citi, the largest foreign lender, domestic loan book accounted to Rs 39,919.94 crore as compared to ICICI Bank’s 2,18,310.85 crore at the end of the same period.

Senior citizen files complaint against State Bank of Patiala

2010-06-30T05:35:00.000-07:00

Bandra-based businessman Sirish Kirtikar (63), a senior citizen filed a case against the State Bank of Patiala with the Maharashtra Consumer Disputes Redressal Commission. In his petition senior citizen has alleged that the bank has with drawn Rs 70 lakh from his bank account.

Kirtikar had nine accounts (savings and current) and 10 fixed deposit accounts at the bank’s Bandra branch. He told, “When I was going through a bank statement issued on April 23, 2009, it showed that amounts had been withdrawn from my accounts and deposited in accounts not known to me.”

Kirtikar in his complaint said he did not issue any instructions for withdrawal of the amount from his account. He added that when he asked the bank to furnish the original receipts of his 10 fixed deposit accounts- the value of which was more than Rs 1.12 crore—the bank gave him seven photocopies of the receipts.

He said, “When I got the receipts I was shocked to see that somebody had forged my signature and withdrawn money from the account.”

Officials of the State Bank of Patiala refused to comment. In a reply to an email sent by the Hindustan Times, M.K. Mohindroo, assistant general manager, Regional Office I (Mumbai) said, “Since the matter is subjudice, we are unable to give our comments.”

Kirtikar said that he has faced a loss of Rs 70 lakh due to “fraudulent acts on the part of bank”.

He also alleged that in spite of his several request bank is not providing the details of the day-to-day transactions of his accounts.

Kirtikar in a complaint said the bank told that the Reserve Bank of India (RBI) had permitted it to open accounts without consulting him.

He told, “When I filed an application under the Right to Information Act, the Reserve Bank of India told me it has not authorized any bank to open unauthorized accounts”.

Kirtikar has also filed a case with the Economic Offences Wing of the Mumbai police for a compensation of Rs 5 lakh, for the mental agony he has suffered.

Corporation Bank implements new security system for online banking

2010-06-24T02:50:00.000-07:00

Corporation Bank has made internet banking more secured by implementing eMudhra PKI (public key infrastructure) solutions of 3i Infotech Consumer Services Ltd (CSL). It is the first bank in India to provide world class authentication security solution to the corporate online banking customers of the bank.

The most important feature of online transactions is impersonation thus there is no face-to-face encounter of parties. At present, in most of the cases the authentication factor is only the user id, login password and authorization password. But digital certificates provide watertight security measure to promote electronic exchange of document/information with outmost authenticity. Digital certificates can be issued only through a valid certification authority like eMudhra from 3i Infotech Consumer Services Limited, a fully owned subsidiary of 3i Infotech Ltd.

B R Bhat, general manager of the bank said in a release, "With growth of Internet and online transactions, security is always a concern to netizens for doing financial transactions. The launching of this world-class online banking security solution to our corporate customers adds an additional security to all online banking transactions and one can be rest assured that their online transactions are more secure."

However there are number of authentication methods used by banks such as one time passwords, virtual key board, and dual passwords being implemented and in vogue, while PKI based authentication of transaction using one's digital signature certificate is the only one that provides legal sanctity to transaction besides providing additional security. These measures have been done on the recommendation of RBI in its Internet Banking guideline and IT Act, 2000.

Importance of nomination in bank accounts

2010-06-22T06:01:00.000-07:00

According to the Reserve Bank of India (RBI) report, around Rs 1,100 crore of unclaimed money is lying with Indian banks.

The report further stated that a major portion of this unclaimed money belongs to Hindu Undivided Family and individual accounts because the accountholders have died.

In such cases the main reason for unclaimed money lying with bank is that the accountholders have not nominated anyone in their accounts. This way not only legal heirs are deprived of the money also banks are facing problem in managing these unclaimed funds.

To solve this double edged problem, in 1983 the government of India had amended the banking laws to include nomination facilities in respect of all bank accounts. But, still many of us either are not aware of this facility especially people who are uneducated or living in rural areas, or do not want to face the fact that unforeseen events can happen to us.

Filing nomination is not difficult. While opening a new account, there is a column for nomination in the same form and you should fill it. You can nominate two persons with first and second option. If you have not done nomination in your accounts you can file a request for nomination for both – a single account or a joint account in Form No DA-1. In case of your death or the death of any of the joint accountholders the nominated person can received the amount lying in the account.

The form can be taken from bank and is applicable for all types of deposit accounts - savings account, recurring deposit account, fixed deposit account or even a current account.

In case you want to cancel the nomination or change the nominee at any point in the future, you can do so by simply submitting Form No DA-2.

In case of change in nomination or cancellation you must obtain a written acknowledgement of any request made to the bank. The banks normally give acknowledgement in a tear-off of the form being submitted.

If changes and variations in nomination are made frequently then you must keep photocopies of the forms to avoid any dispute in future and also for a ready reference. However banks make note of such submission of nomination forms or variations/ cancellations thereof in their records. At the time of deletion or addition to the original bank account, always ensure that the nomination form is also submitted with the bank covering all the account holders at the relevant times.

Nomination facility is available for individuals and other entities like partnership firms, limited companies and trusts, etc. This facility is also available to accounts operated by proprietors in respect of their business concerns, including current accounts.

In case of minor account holders, a nomination can be made by a person who is lawfully entitled to act on behalf of the minor.

Whereas, if the nominee is a minor, in such case the accountholder will have to appoint a person to receive the money during the time the nominee stays a minor. When nominee turns a major, he/she can claim the money from the bank directly.

Joint accounts

In case of joint accounts if the joint account holder dies without making any nomination, in such case the remaining accountholder/s can still make a valid nomination in respect of the bank account.

In case of one account holder, the bank will remove the name of the deceased from the account and the remaining accountholder/s remains the account holder/s. In case of only one account holder surviving, he becomes the sole accountholder of the account.

Fixed deposits
In fixed deposits also there is nomination facility. But in this if fixed deposit is held jointly, all the joint accountholders have to give nomination. A nomination request not signed by all accountholders will not be a valid request.

The nomination will remain active and alive as long as the deposit account is renewed also it automatically gets renewed on renewal of the deposit from time to time.

For nominees
As nominee becomes authorized accountholder after the death of accountholder therefore he is entitled to give a valid discharge for payment of the money due to the bank. The banks only consider registered nominees and not the legal heirs.

The nominees have to provide valid proof of death of the accountholder together with the claim in the prescribed form. The bank is also supposed to send a letter to the nominee in case no claim is filed within three months of the notice of death of accountholder being given to the branch.

The bank allows the nominee to foreclose the fixed deposit if he/she submit relevant document like death certificate/ claim form etc. But banks cannot grant any loan against such fixed deposit held by the deceased.

In case the nominee is other than legal heirs, then they can lodge their claim for the money of the deceased against the nominee and not against the bank, once the bank has paid the money to the nominee as per the terms of the nomination filed with it.

Legal heirs who obtain any order from the court then they can restrain bank from paying the money to the nominee.

Lakshmi Vilas Bank sign deal with LIC for bancassurance

2010-06-18T06:06:00.000-07:00

A strategic partnership deal was signed between Lakshmi Vilas Bank and Life Insurance Corporation of India (LIC), India’s largest life insurance player, for bancassurance.

Under this deal the bank’s customers across India will be able to access the wide range of products of LIC. Lakshmi Vilas bank as the corporate agent for LIC has been providing holistic offering of banking services, will now be offering LIC’s best products to its customers through its 274 branches.

K.S.R. Anjaneyulu, managing director & CEO, Lakshmi Vilas Bank said, “With this strategic tie-up, we are now well on our way to offer an assortment of retail banking products to our customers. Given the fast changing market dynamics and its volatility, customers today are seeking avenues for financial security. Through this tie-up we can address this very need of the customers through our products and services and build a universal banking franchise.”

After signing the deal A.K. Dasgupta, MD of LIC India said, “We are keenly looking forward to the partnership with LVB, which is one of the leading schedule commercial banks in India with a strong clientele base, excellence in banking technology and delivery of high quality service, to give new and lasting value proposition to the esteemed customers of LVB through life insurance services.”

To provide all the financial services through one window, the bank has also signed a deal for a bancassurance with Bajaj Allianz General Insurance Co. for general insurance distribution business and arrangements for distributing the mutual fund products of various reputed AMCs

95 percent of Meghalaya population still without bank accounts

2010-06-17T04:08:00.000-07:00

The Reserve Bank of India is trying to cover all the villages under financial inclusion program by providing banking services to the people living in villages. It has also instructed banks take various measures for the implementation of financial inclusion in the villages in which they have to set up branches or through business correspondents they have to provide banking facility to the villages having population of 20,000 people.

Still over 95 percent of households in Meghalaya State do not have a bank account. The Chief Minister Mukul Sangma, who also holds the finance portfolio, told that it is becoming difficult to implement several of the central government’s flagship welfare programs as most of the households do not have a bank account.

He told as most of the population in the state, especially the rural poor does not have access to banking transactions, so it is not possible to implement centrally-sponsored flagship schemes such as Mahatma Gandhi National Rural Employment Guarantee scheme and others which are credit linked.

Sangma said, “A total of 95.9 percent households do not indulge in banking transactions. Moreover, the credit-deposit (CD) ratio in the state is very low.”

He informed that he has taken up these issues with union Finance Minister Pranab Mukherjee.

He added, “I have highlighted Meghalaya's constraints relating to poor implementation of the UPA (United Progressive Alliance) government's flagship programs before the finance minister and the central government will look into our problems.”

An innovative Cheque Truncation System launched to increase efficiency of banks

2010-06-10T04:25:00.000-07:00

Newgen Software Technologies Limited is a leading company in Business Process Management (BPM) and Enterprise Content Management (ECM). The company has launched its next generation Cheque Truncation System (CTS) adapted to RBI “CTS – 2010 standard”. The main aim behind launching this system is to fully automate data extraction, verification and fraud detection in the CTS environment.

In this new specification the layout format of the cheques has been standardized to a much greater degree in comparison to the earlier one, also it includes various cheque security features. These security features not only ensure uniformity across all cheque forms issued by banks in the country, but will also help in scrutinizing cheques of drawee banks in an image-based processing scenario.

Speaking on the merits of ‘CTS-2010 standard’, Mr. Virender Jeet, Senior Vice President, Technologies said, “CTS-2010 standard is the right step towards achieving the true benefits of Cheque Truncation. Newgen’s research and development team has been working on the different aspects of cheque security and automatic data extraction for quite some time and now we can derive immense returns from these innovations”.

This standard also have another innovative security features - pantograph and ultra-violet logos. On all cheques bank logos will be printed with UV ink and these logos will be visible only under ultra-violet light. Moreover any corrections on the cheques will not be allowed.

More than 50 banks across Asia Pacific, India, Middle East, Africa and Europe including ING Vysya, Kotak Mahindra Bank, Bank of Baroda, Andhra Bank, Indian Bank, United Bank of India, Karnataka Bank, Abu Dhabi Commercial Bank, RAK Bank, Mashreq Bank are already gaining business benefits from Newgen’s CTS solution.

Newgen’s innovative solution will completely computerize Cheque Truncation and automate data extraction of all cheque fields which will be a great help for the banking industry as a whole and will improve the functioning of banks.

Know about Banking Ombudsman

2010-06-09T03:43:00.000-07:00

Banking Ombudsman is a forum for bank customers for resolving their complaints related to certain services offered by banks. The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949, by RBI in 1995. The Banking Ombudsman official is appointed by RBI who is responsible to address customer complaints against deficiency in certain banking services.

The customers can lodge their complaints at the office of the Banking Ombudsman, under whose jurisdiction, the bank branch is situated against which the complaint is being lodged. The complaints relating to credit cards and other types of services with centralized operations, complaints may be filed before the Banking Ombudsman within whose territorial jurisdiction, the billing address of the customer is located.

In case of complaints related to credit card operations the Banking Ombudsman can award compensation not exceeding Rs 1 lakh to the complainant, for mental agony and harassment. But in this the Banking Ombudsman will not take into consideration the loss of the complainant’s time, expenses incurred by the complainant, harassment and mental anguish suffered by the complainant while passing such award.

The first attempt of the Banking Ombudsman is to settle the issue by an agreement between the complainant and the bank named in the complaint. In such case the terms of settlement offered by the bank are acceptable to one in full and final settlement of one’s complaint the Banking Ombudsman passes an order as per the terms of settlement which becomes binding on the bank and the complainant.

In case one is not satisfied with the decision passed by the Banking Ombudsman, one can approach the appellate authority against the Banking Ombudsman’s decision. Deputy Governor of RBI has an Appellate Authority.

The complainant can also move to the consumer court. The bank can also file an appeal before the appellate authority under the scheme.

SBI in collaboration with Eko enable saving account accessible through mobile phones

2010-06-07T04:00:00.000-07:00

The state government of Bihar has launched ‘Mobile Money Transfer System’ in Patna. The service has been launched in collaboration with United Nations Office for Project Services (UNOPS) and Norway-India Partnership Initiative (NIPI), an aid agency funded by Norway government. And, this service will be implemented by Eko Indian Financial Services Limited, a New-Delhi based company, in partnership with the State Bank of India (SBI). Through this service the Social Health Activists (ASHA) workers will receive their salary in a mobile bank account which would be linked to their cellphones.

In the beginning the projects has been as a pilot project in Sheikhpura district and by the year end it will be extended across the state.

Executive director, State Health Society, Sanjay Kumar while launching the project said, "Under the said scheme, ASHA workers would receive their pay in their SBI `no frills' Savings account which would be accessible from their mobile phones."

Kumar added that Eko will help Customer Service Points (CSP) to open an SBI mini savings bank accounts on their mobile phones for all financial transactions with zero capital expenditure. He informed that as the mobile number of a person is globally unique, therefore number will be used as an alias of the customer’s SBI bank account number and added that all transactions can be done by dialing the said number. He said all the transactions will get completed in real time the customers will be sent instant confirmations through SMS. Also, he said, when the health care workers have registered their mobile enabled bank accounts with local retailers, they will be able to deposit or withdraw funds by using a unique pin number.

Kumar said, this is the first time such type of system has been introduced in the country, the program aims is to empower women by promoting their financial inclusion with simple and secure access. He further added, that to provide payment to ASHA workers on time is a tough job therefore this project will enable to make payment to them on time.

On the other hand state co-coordinator, UNOPS-NIPI, Bihar, S P Sinha said with the implementation of this initiative gives an opportunity to effectively make use of available resources to accelerate the process of economic and social development.

CGM, rural business, SBI, J K Sinha said, "As SBI has always been at the forefront of providing banking outreach to rural areas, the project is an innovative use of technology in women empowerment."

Eko CEO Abhishek Sinha said, Eko main objective is to build a low cost financial services infrastructure with the mobile phone as its primary transaction interface, thus, this will help in reaching the financially excluded population where up till now no bank has been able to reach.

He told up till now Eko has over 470 outlets across Delhi, Bihar and Jharkhand with 70,000 customers making transaction of Rs 15 lakh per day.