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Friday, April 21, 2017

Finance Ministry approves 8.65% interest rate on EPF for 2016-17

Labour Minister Bandaru Dattatreya on Thursday said that the Finance Ministry has approved 8.65 per cent interest rate on Employees Provident Fund (EPF) for 2016-17.

The ratification of the 8.65 per cent on EPF will enable the retirement fund body Employees' Provident Fund Organisation (EPFO) to credit this rate of return into the accounts of four crore subscribers.

"Finance Ministry has agreed to 8.65 per cent rate of interest. Now, the communication will come. The formal discussions are over," the minister said.

He further added, "We will immediately issue the notification and credit the rate of interest to over four crore subscribers."

The Employees' Provident Fund Organisation trustees had approved 8.65 per cent rate on EPF in December last year.

The Finance Ministry has been nudging the Labour Ministry to lower the EPF rate for aligning it with the rates of small savings schemes like PPF.

Source : Business Standard
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Saturday, April 8, 2017

Kotak arm for infra debt fund services gets RBI registration

Kotak Mahindra Bank today said its subsidiary for providing infrastructure debt fund services has been registered with the Reserve Bank of India.

"The Reserve Bank has issued a Certificate of Registration to Kotak Infrastructure Debt Fund, subsidiary of the Bank," the bank said in a filing.

With this, the subsidiary will commence business of non-banking financial institution as Infrastructure Debt Fund (NBFC-IDF), it said.

IDFs are investment instruments sponsored by banks or NBFCs, in which domestic/offshore institutional investors, specially insurance and pension funds, can invest through units and bonds issued by them.

Source : Economic Times
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SBI ATM in Odisha spews out cash automatically, bank suspects malware attacks

State Bank of India has ordered a forensic audit into an automated teller machine in Odisha that spewed out cash without any card being swiped. It's one of about 10 cash dispensers around the country belonging to various banks that have behaved in this manner.

The suspicion is that these are localised hacks on machines running outdated software but don't involve any wider network infections.

"A forensic audit is currently underway and we are trying to understand whether a software malfunction caused the glitch in its systems," said a senior State Bank of India official.

"Typically, an audit takes around four to six weeks to be completed we should get the report within the end of this month."

Experts said the ATMs may have been subjected to a 'physical' malware attack that involves plugging a device — say a laptop or phone — into the dispenser's USB port to transfer an infected file or virus that causes the machine to behave erratically. The anomalies have been witnessed in states such as Odisha, Jharkhand, Uttar Pradesh, said people with knowledge of the matter.

"Around 10 ATMs have been affected as per preliminary information," said Navroze Dastur, managing director of India and South Asia operations at NCR Corporation, which sells and maintains ATMs.

"The Reserve Bank of India is aware of the situation and we are closely working with National Payments Corporation of India to tell banks what security measures are needed to protect the machines." The note spewing hasn't caused a big dent but SBI is looking to get to the root of the matter.

"This has not caused a significant loss to the bank because the money kept in a single machine is usually less than Rs 10 lakh and directly no customer account has been affected since no card was swiped," said the SBI official.

"The audit is being done to understand how it can be rectified." Experts pointed out that a number of machines are running obsolete Windows XP software, which Microsoft has stopped updating. "Banks mostly do not service and update these machines on time, which makes them vulnerable to highly sophisticated attacks as fraudsters use the most advanced technology available," said a top executive at an ATM deployment company.

Initial reports suggest the criminals target machines in remote locations that are usually left unguarded, allowing them to open the outer casing to access the USB port. Once infected, the machine can be remotely controlled by a virtual keyboard and instructed to spew out cash.

"There are keys available which allow an ATM to be opened by unauthorised persons as well and then it needs to be connected to a system through a cord to transfer the virus," said Altaf Halde, managing director for South Asia at Kaspersky Labs, a cyber security firm. "Leading banks and ATM service providers of the country have reached out to us to understand the threat and how it can be dealt with."

Source : Economic Times
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Wednesday, March 22, 2017

Bharatiya Mahila Bank to merge with SBI

The Government of India has decided to merge the Bharatiya Mahila Bank (BMB) with the State Bank of India (SBI) to ensure greater banking services outreach to a larger number of women, at a faster pace. The objective is to offer affordable credit to women as well as propagate women-centric products, which need to be quickly achieved through a wider network and lower cost of funds.

The decision to merge BMB with SBI has been taken in view of the advantage of the large network of SBI among other things. In the three years since BMB was established, it has extended loans of Rs.192 crore to women borrowers, while the SBI group has provided loans of about Rs.46,000 crore to them. SBI has a large outreach of more than 20,000 branches, with lowest cost of funds in the sector.

Out of the total workforce of around 2 lakh employees in SBI, 22 percent are women. SBI group already has 126 exclusive all-women branches across the country, while BMB has only seven. The proportion of administrative and managerial cost in BMB is much higher to reach the same coverage.   For the same cost, a much higher volume of loans to women could be given through SBI.

However, Union Government is committed to enhance the access to financial services to the population at large and women in particular. Under the Pradhan Mantri Jan-Dhan Yojana, preference is given to women for overdraft facility. Pradhan Mantri Mudra Yojana had 73 percent women borrowers in the previous financial year.

Source : Financial Express
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Government to infuse capital in IDBI, Bank of Maharashtra and Dena bank

State-owned IDBI Bank, Bank of Maharashtra and Dena Bank will receive a capital infusion from the government in lieu of preferential allotment of shares. IDBI Bank will get Rs 2,500 crore funding from the government, subject to regulatory approvals. Board of directors of the bank at a meeting held today approved proposal to allot preference shares to the government.

“Board of directors of the bank has approved the proposal for preferential issue of capital to government and other financial institutions, if any aggregating up to Rs 2,500 crore,” IDBI Bank said in an exchange filing. IDBI Bank extraordinary general meeting is scheduled for April 27 for obtaining shareholders’ approval to allot preferential shares to the government.

Pune-based Bank of Maharashtra said board of directors will meet on Friday to consider the proposal of raising equity capital by preferential allotment of shares to the government. The bank said it has received communication from the government on March 16 for capital allocation plan of Rs 300 crore.

Dena Bank said in a separate filing to exchange, “We would like to inform you that the Board of Directors of the Bank approved raising of share capital of the Bank up to amount of Rs 800 crore.” The government has approved the second tranche of capital infusion in public sector banks to enhance their capital base.

The first tranche was announced in July with the objective of enhancing their lending operations and enabling them to raise more money from the market. It has already announced a fund infusion of Rs 22,915 crore, out of the Rs 25,000 crore earmarked for 13 PSBs for the current fiscal.

The second round of funding entailing about Rs 8,000 crore is based on strict parameters.

Source : Financial Express
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