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Friday, November 21, 2014

Finance Ministry finds holes in Jan Dhan Yojana; banks to open 3.7 crore more accounts

The finance ministry has identified several gaps in the Pradhan Mantri Jan Dhan Yojana, which it flagged to bankers on Thursday, asking them to rectify them.

In an eight-page note, the ministry has said banks need to open 3.75 crore additional accounts. The study pointed out that there are at least 33 districts where the coverage is under 50%. A majority of these districts are in under-developed states.

In fact, in Arunachal only 29% of the households have been covered, while the level in Andaman & Nicobar Islands is 38%. Apart from accounts, there is also concern over account balances as 5.7 crore of the over 7.5 crore, over three-fourths of the Jan Dhan accounts, have zero balances.

"There is a need to ensure transaction in these accounts," the ministry told bankers.What is adding to the worry is a slowdown in deposit growth although overall deposits are close to the Rs 6,000 crore level. The other problem is the issue of debit cards as 4.4 crore RuPay cards have been issued, resulting in a 43% gap. Only 1.5 crore cards have been activated.

Now, in the absence of activation through non-financial transactions, the accident cover will not be activated. As a result, banks have not just been asked to step up card issuance but also educate account holders about activation.

There are other glitches too. For instance, against a target of 1.3 lakh business correspondents, 1.15 lakh sub-service areas — each covering 1,000-1,500 households -have been covered. But there are over 14,000 uncovered SSAs of which one-fifth are facing connectivity problems.

Source : Economic Times
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RBI warns against credit card fraud using its name

The Reserve Bank of India has invited public attention to a new form of fraud perpetrated in its name - a credit card issued by fraudsters in the name of the central bank.

Explaining the modus operandi, RBI said fraudsters are sending credit cards which allow withdrawal of money up to a certain limit, albeit a small sum, from a bank account. Having gained the confidence of the victim, the fraudster gets him to deposit a huge sum of money in the same bank account. Once the money is deposited, the card stops working and that would also be the last time the holder of the card would hear from the fraudster.

Warning against such efforts, RBI reiterated that it does not carry out any business with public, whether through savings bank account, current bank account, credit card, debit card, online banking services or receiving and holding funds in foreign exchange or any other form of banking services.

Source : Economic Times
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No big job cuts after Kotak Mahindra-ING Vysya merger: Uday Kotak

Kotak Mahindra Bank chief Uday Kotak has assured that there will not be “any dramatic” reduction immediately in the number of employees following the merger of ING Vysya Bank. While ING has around 10,000 employees, Kotak Bank has around 29,000.

“We believe total number of employees will grow over time, but we don’t see any dramatic reduction in the net number of people in a hurry,” the Executive Vice-Chairman and Managing Director of Kotak Bank Uday Kotak told PTI after he announced the merger deal last evening.

“We have no plans to do any massive rationalisation of branches or capacity. We are committed to growing, this is a merger for growth, not for cutting,” he said, answering a specific question on whether KMB will be pruning some jobs. ING Vysya Bank Deputy Chief Executive Uday Sareen said cost cutting was not the objective of the merger.

“At the heart of this deal is not cost-efficiency; yes it is cost-avoidance as there are synergies post-merger. But this is not one merger which talks about cost cutting and that is an extremely important point which we would like to communicate,” Sareen said.

“In any merger, there is a concern among employees...but at the heart of this partnership is our people,” Sareen added.

Some analysts have said that KMB may have to prune its expenses. In a service industry like banking, people are a major cost component. Meanwhile, Kotak said the merged KMB will not look at having a presence internationally.

“We will leverage on our cooperation arrangements, we believe the India opportunity is where we are good at and the core business model is to concentrate on the country’s diversified financial services,” Kotak said.

Source : Thehindubusinessline
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IRDA seeks previous 4 years’ data from life insurers

The Insurance Regulatory and Development Authority (IRDA) has asked life insurance companies to submit data for the last four years to the Insurance Information Bureau (IIB).

The data should be submitted in the prescribed format from the year 2010-11 to 2013-14 before December 15, 2014, Sriram Taranikanti, Executive Director, IRDA said in a circular.

In addition, the insurers would need to submit data for the periods ending September and March of each financial year within a period of one month from the last day of respective month.

``It may be noted that the Bureau would also undertake other analytics work including those sought by the Authority and also the insurance industry from time to time,’’ the circular said adding that IIB could also prepare standardised reports relevant to the industry. 

Source : Thehindubusinessline
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StanChart opens 100th branch in India

The largest foreign bank in the country, Standard Chartered Bank, has opened its 100th branch in the country.

The milestone branch was opened by the bank in Bareilly District of Uttar Pradesh.

Standard Chartered Bank
has branches in 43 cities and a combined customer base of around 2 million retail customers and around 2,500 corporate and institutional relationships.

Source : Thehindubusinessline
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