RBI asks commercial banks to display loan rates on their websites

Latest move aimed at providing transparency for borrowers The Reserve Bank of India (RBI) has asked commercial banks to display loan interest rates on their websites, a move aimed at enhancing transparency for borrowers.

"Banks should display on their website the interest rate range of contracted loans for the past quarter for different categories of advances granted to individual borrowers along with mean interest rates for such loans," the RBI said. Lenders normally add up a spread over and above their base rates -below which they cannot lend -to arrive at final loan pricing. The spread contracts or widens depending on the profile of the borrower.

The RBI has also insisted that banks should also mention on websites the total fees and charges applicable on various types of loans to individual borrowers. This should facilitate borrowers taking informed decision to buy bank loans. "The total fees and charges applicable on various types of loans to individual borrower should be disclosed at the time of processing of loan as well as displayed on the website of banks for transparency and comparability," the RBI said. It has directed banks to comply with such measures by April 1 this year.

Source : Economic Times

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RBS to move jobs to India

Britain’s largest state-owned bank Royal Bank of Scotland (RBS) is to cut some 160 jobs in the UK and offshore around 60 of them to India.

RBS has been cutting back its retail operations and the latest job cuts are also part of wider cost-cutting measures.

According to Unite the Union, which represents the bank’s staff, around 60 back-office roles are to be moved to India.

“We will do everything we can to support staff, including seeking redeployment opportunities wherever possible and ensuring that compulsory redundancies are kept to a minimum,” the Edinburgh-headquartered bank said in a statement.

“These changes will mean our relationship management teams can do things more effectively and efficiently and provide the best service to our customers,” it added.

However, the union is furious at the job cuts and said it is “challenging the British taxpayer backed bank over the impact this cost cutting exercise will have on customer service, and the justification for offshoring work“.

“Experienced and skilled staff which services the business customer relations teams will today be devastated by news that their jobs could be lost.

“It is a further insult that Royal Bank of Scotland, as a taxpayer backed bank, will be sending 60 roles which are being done in the UK offshore to India,” said Unite national officer Rob Macgregor.

“The roles impacted today are vital to the service business customers enjoy with local support teams and Unite has a real concern that such a loss will be detrimental to customer service,” he added.

Staff are expected to be leaving between May and August 2015 from across 54 locations in the UK.


Source : Thehindubusinessline

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SBI, Ezetap launch `Chota ATMs’ in Kerala

State Bank of India and Ezetap, the mobile point-of-sale service provider, has announced the availability of Chota ATM in Kerala.

Chota ATM enables kirana store owners, taxi drivers, small businessmen, traders who are dealing with customers to turn their mobile device into both a cash withdrawal point as well as a credit/debit card payment terminal.

Kerala is an important tourist destination and a number of small and medium businesses catering to this sector can benefit from the mPOS technology for accepting payments or to offer cash, C.V Venkatesh, General Manager, SBI said.


Source : Thehindubusinessline

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Vijaya Bank opens 13 lakh accounts under Jan Dhan scheme

Vijaya Bank has opened 13 lakh accounts under the PMJDY (Pradhan Mantri Jan Dhan Yojna), according to Kishore Sansi, Managing Director and Chief Executive Officer of the bank.

Addressing presspersons in Mangaluru on Thursday evening, Sansi said the bank had surpassed its targets. It had identified the households to be covered much before the timeline set by the Finance Ministry. Rupay cards were issued to 72 per cent of customers, he said.

On the number of zero-balance accounts, he said 54 per cent of the accounts opened under PMJDY came under this category. However, the bank was able to get Rs38 crore as deposits from PMJDY accounts.

To a query on the plans to make PMJDY accounts operational, Sansi said the bank was expecting all the subsidies of the Government to be routed through these accounts. In the next 12 months, 80-85 per cent of all accounts opened under PMJDY would be operational, he said.


Source : Thehindubusinessline

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YES Bank to hire 1,500-2,000 people to push retail business; eyes MF foray

Private sector lender YES Bank is planning to hire between 1,500 and 2,000 people in the next one year in sync with its retail expansion plans and also plans to enter the mutual fund business.

Reports suggest that YES Bank is in talks with three AMC businesses, including a bid to acquire Deutsche Mutual Fund’s India business. The bank’s board has cleared a proposal to secure an asset management licence from the Securities and Exchange Board of India. It would require approvals from the Reserve Bank of India.

The deal is estimated to be between Rs200-250 crore (over $32 million).

Mumbai-based Deutsche Asset Management is an investment management division of Deutsche Bank AG, with average mutual fund assets of Rs22,670 crore ($3.68 billion) for the October-December quarter, according to the latest data from the Association of Mutual Funds in India. “We are keen on the AMC (Asset Management Company) business and are open to buying out any existing set-up if a good opportunity comes our way…though we are not in a hurry,” Rajat Monga, Senior Group President – Financial Markets, YES Bank, said.

Hiring plans

At an analyst conference, after announcement of the bank’s results, Monga said: “The campus placements will take place and 1,500-2,000 will be hired this year at the branch and also some at mid-managerial level.” In FY2014, the bank had incurred an employee cost of Rs784 crore, with an increase of 20 per cent over the previous fiscal year. The costs accounted for 45 per cent of the total operating costs of the bank. In a bid to survive competition and scale up its business, the mid-sized bank is focusing aggressively on its retail segment. Further, the bank is planning to enter the credit card business, the only retail product business it is not present in. “For the credit card business we need to have 1.5 million customers at least, but as of now we have just crossed one million customers,” said Pralay Mondal, Senior Group President – Retail and Business Banking, YES Bank.

The bank is also continuing its branch expansion by planning to add about 50 branches by March this year, As on December 31, 2014, the bank’s branch strength stood at about 600, and the ATMs a little over 1,150.


Source : Thehindubusinessline

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Yes Bank leads race for Deutsche's Indian fund arm

Indian lender Yes Bank is the main suitor in the race for Deutsche Asset Management (India) Pvt. Ltd's mutual fund business in India, two sources who are directly involved in the process said, although talks are still at an early stage.

The deal, which the sources estimate at nearly Rs. 200 crore ($32.5 million), is coming at a time of optimism in Indian markets after a surprise interest rate cut and hopes of reform ahead of the government's maiden budget next month.

Deutsche Asset Management (India) Private Ltd. is a Mumbai-based investment management division of Deutsche Bank A.G., with average mutual fund assets of Rs. 22,670 crore ($3.68 billion) in the October-December period, data from the Association of Mutual Funds in India shows.

Earlier this month Yes Bank's board of directors agreed to seek approval from Indian regulators to set up asset management and primary dealership businesses.

Local media reported last week that Yes Bank was considering a move for Deutsche's Indian mutual fund business.

"The process of the Deutsche mutual fund acquisition is the key focus for the bank in short term," one of the sources said.

Both sources declined to be identified because the information has not been made public.

Yes Bank and Deutsche did not respond to requests for comment.


Source : Thehindubusinessline

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Vijaya Bank cuts term deposit rates

Vijaya Bank has cut its term deposit interest rates for different maturity periods. The reduction ranges from 0.1 per cent to 0.25 per cent and will come into effect from Friday (January 23), the bank said in a statement. The Vijaya Bank scrip ended flat at the BSE on Thursday.


Source : Thehindubusinessline

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ING Vysya Q3 net drops 13% on higher provisioning

ING Vysya Bank reported a 13 per cent drop in net profits in the December quarter on higher provisioning. The Bengaluru-headquartered private sector bank recorded a net profit of Rs 145.7 crore as against Rs 167.3 crore in the corresponding year-ago quarter.

The net interest income (the difference between interest earned and expended) grew 18.1 per cent during the quarter to Rs 491.6 crore. The net interest margin was stable at 3.37 per cent. Other income decreased by 4.2 per cent to Rs 205.6 crore from Rs 214.6 crore. Other income in the December quarter last year included a one-off income of Rs 22.5 crore from the sale of a strategic investment.

Total income increased by 10.5 per cent to Rs 697.2 crore from Rs 630.7 crore. The operating costs were up 17 per cent at Rs 417.1 crore from Rs 356.4 crore and was mainly on account of higher accruals for pension benefit due to a sharp decline in interest rates, said Uday Sareen, CEO-designate of ING Vysya Bank.

The bank made a higher provision of Rs 61.5 crore (Rs 23 crore in the year-ago quarter). The provisions and contingencies during the quarter included Rs 19.8 crore amortisation related to asset sale to a reconstruction company in the first half of the current year. The provision coverage ratio stood at 64.88 per cent as at December 31, 2014.

“Our customer assets and deposits grew by a healthy 18 per cent. We continued to invest in our network and have added 10 branches and 15 ATMs during the quarter,” Sareen said. ING Vysya recently approved the proposed merger with Kotak Mahindra Bank. “We have commenced the process of getting the mandatory regulatory approvals for the same,” Sareen added.

The ING Vysya Bank scrip ended flat at Rs 978.20 on the BSE on Wednesday.


Source : Thehindubusinessline

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Some imporant facts about banks

बैंकों के बारे में कुछ महत्वपूर्ण जानकारी-

1. इन्टरनेट बैंकिंग सेवा शुरू करने वाला प्रथम बैंक – ICICI

2 ATM सेवा शुरू करने वाला प्रथम बैंक – HSBC

3. क्रेडिट कार्ड जारी करने वाला प्रथम बैंक – सेंट्रल बैंक ऑफ इन्डिया

4. भारत में खुलने वाला पहला विदेशी बैंक – Comptoire d’Escompte de Paris of France (सन् 1860 में खुला)

5. वर्तमान में कार्यरत भारत का सबसे पुराना बैंक – इलाहाबाद बैंक (Allahabad Bank)

6. बचत खाता (Savings Bank a/c) खोलने वाला भारत का प्रथम बैंक – प्रेसीडेंसी बैंक (Presidency Bank) द्वारा पहली बार सन् 1830 में बचत खाता खोला गया

7. चेक सिस्टम जारी करने वाला भारत का पहला बैंक – बंगाल बैंक (Bengal Bank) द्वारा पहली बार सन् 1784 में चेक सिस्टम जारी किया गया

8. विदेश में शाखा खोलने वाला भारत का प्रथम बैंक – बैंक ऑफ इन्डिया ने सन् 1946 में भारत के बाहर लंदन में पहली बार अपनी शाखा खोली

9. म्युचुअल फंड आरम्भ करने वाला प्रथम बैंक – भारतीय स्टेट बैंक (State Bank of India)

10. भारत में खुलने वाला पहला बैंक – बैंक ऑफ हिन्दुस्तान (सन् 1770 में खुला)

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Jan Dhan Yojna makes it to Guinness World Records, 11.5 cr Jan Dhan accounts opened

As many as 11.5 crore bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana, exceeding the enhanced target of 10 crore and covering 99.74 per cent of households, Finance Minister Arun Jaitley said today.

"Most of India today is included in the banking system," he said, adding that more than Rs 9,000 crore has been deposited in the Jan Dhan accounts.

Prime Minister Narendra Modi announced the financial inclusion scheme in his first Independence Day speech last year. It was launched in August with a target to open bank accounts for 7.5 crore poor persons by January 26, 2015. The target was later increased to 10 crore accounts.

Addressing a press conference here, Jaitley said the government would use these bank accounts to pass on benefits to individuals under its various social security schemes.

Financial Services Secretary Hasmukh Adhia said that even Guinness Book of World Records has recognised the achievements made under PMJDY.

In its citation, the Guinness Book said: "Most bank accounts opened in one week as part of the Financial Inclusion Campaign is 18,096,130 and was achieved by the Department of Financial Services, Government of India from August 23 to 29, 2014."

Exclusion of a large number of people from the banking network was inhibiting growth, Jaitley said. "Financial Inclusion is one of the top most priorities of the government. PMJDY is the biggest financial inclusion initiative in the world."

He said that out of the accounts opened, 60 per cent are in the rural areas and 40 per cent in the urban areas. Share of female account holders is about 51 per cent.

Jaitley said that RuPay cards have been issued to more than 10 crore beneficiaries who will get a benefit of personal accidental insurance of Rs 1 lakh besides a life insurance cover of Rs 30,000 for eligible beneficiaries.

Describing the scheme as "a game changer for the economy", the minister said that it would provide the platform for Direct Benefits Transfer (DBT) and help in plugging leakages in subsidies.

Overall, public sector banks alone opened 9.11 crore accounts under PMJDY, followed by regional rural banks which opened about 2.01 crore accounts. On the other hand, 13 private sector banks together open just 37.58 lakh accounts.

According to Adhia, all these accounts are being used for payment of wages under the MNREGA scheme and LPG subsidy. More than Rs 33,000 crore towards MNREGA, LPG and other benefits will be routed through the bank accounts annually.

On the future of the scheme after January 26, Jaitley said the government will take a view on it later.

Responding to a question of duplication of accounts, the minister admitted that there might be some such cases and that was the reason for enhancing the target to 10 crore accounts.

The issuance of the RuPay cards to account holders would encourage use of plastic money and help in moving towards a cashless society, Jaitley said.
The proposal to provide overdraft facility in such accounts would also act as micro finance and prevent people from taking loans at exorbitant rates from money lenders.

Jaitley said that most of the country has been covered by the PMJDY, except those areas which have poor connectivity, are impacted by left-wing extremist and are inaccessible.

State governments are being requested to transfer cash/ benefits directly in the bank accounts of the beneficiaries thereby cutting layers in the delivery process, Jaitley said.

Under the PAHAL scheme which is the Direct Benefits Transfer in LPG subsidy, he said that an amount of Rs 1,757 crore has been transferred to the beneficiary accounts through the banking network since November 15, 2014.

As many as 19 schemes out of 35 DBT schemes have been rolled-out across the country, including MGNREGA in 300 districts.

Observing that the earlier campaign on financial inclusion started in 2011 had a limited objective, Jaitley said that under the PMJDY, households were targeted instead of only villages.

The UPA government's financial inclusion scheme sought to cover villages with population of 2,000 or more with banking services.

Moreover, Jaitley added, both rural and urban areas were covered this time as against only rural areas targeted earlier.

He said the present plan pursued digital financial inclusion with special emphasis on monitoring by a Mission headed by the Finance Minister himself.

Source : Economic Times

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Axis Bank to raise up to Rs. 15,000 cr via bonds

Axis Bank on Tuesday announced that its Board has approved to issue bonds or debentures to the tune of Rs. 15,000 crore.

The third largest private bank informed the BSE on the outcome of its board meeting that, "The Board of Directors of the Bank at its meeting held on January 16, 2015, has approved issuance of Long Term Bonds / Non-convertible debentures up to Rs. 15,000 crore on a private placement basis."

"The approval of shareholders of the Bank in terms of the provisions of Companies Act 2013 is proposed to be obtained by way of Postal Ballot," the filing on the exchange said.


Source : Thehindubusinessline

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Kotak Bank net profit jumps 37% to Rs. 465 cr

Kotak Mahindra Bank’s net profit for the three-month ended December 31, 2014 jumped 37 per cent to Rs. 465 crore driven by robust other income and lower provisions during the quarter.

The net profit stood at Rs. 340 crore in the year-ago quarter.

Net interest income or the difference between interest earned and interest expended grew 16 per cent to Rs. 1,059 crore in Q3FY15 from Rs. 913 crore in the same quarter in FY14. Other income soared 65 per cent to 494 crore from Rs. 300 crore.

During the quarter, on account of write-back of Rs. 56 crore, provisions dipped substantially to Rs. 30 crore from Rs. 70 in the third quarter last year.

On the asset quality front, gross non-performing asset (NPA) ratio improved to 0.97 per cent of total advances as on December 2014 compared with 1.1 per cent as on December-end 2013.

ING Vysysa Bank deal

During the quarter, Kotak Mahindra Bank made a significant buyout of ING Vysya Bank for an all-stock deal. “...The amalgamation would be effective from April 1, 2015 or such other date as may be fixed mutually by ING Vysya and Kotak and sanctioned by the RBI,” the bank said.

The board of Kotak Bank and ING Vysya at their respective meetings held on November 20 last year approved an amalgamation of ING Vysya with Kotak Bank in the ratio of 725 shares of Kotak Bank for every 1,000 shares of ING Vysya.

Consolidated results

Consolidated net profit during the quarter increased to Rs. 717 crore from Rs. 591 crore in Q3FY14.

Net interest income grew 13 per cent to Rs. 1,579 crore from Rs. 1,399 crore.

Kotak Mahindra Bank shares were trading higher at Rs. 1,392 per share, up 0.22 per cent over their previous close on the BSE.


Source : Thehindubusinessline

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RBL Bank launches digital wallet for e-commerce

Old private sector lender RBL Bank (earlier known as Ratnakar Bank) has tied up with payments company TranServ to introduce bank-sponsored digital wallet called Shmart for online retailers in India.

“Developed specifically to address the unique needs of online retailers in India, the digital payment product suite -- Shmart has been deployed by over 150 merchants,” RBL Bank said in a statement.

Online merchants can offer their customers faster checkout, instant refunds, secure storage of bank cards, vouchers and coupons, and an RBL Bank sponsored semi-closed loop pre-paid account to store funds.

They can also process transactions across multiple channels – mobile, Web or point-of-sale (PoS). Shmart integrates with the interface of e-commerce Web sites and mobile apps, allowing retailers to control their brand and their customers’ experience.


Source : Thehindubusinessline

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RBI issues additional guidelines on Base Rate for banks

The RBI on Monday said the spread (or the mark up over the base rate) charged to an existing borrower by banks should not be increased except on account of deterioration in the credit risk profile of the customer or change in the tenor premium.

What this means is that if the credit rating of an existing borrowing unit deteriorates then at the time of the annual renewal of loan limit , the spread charged over the base rate will be increased. Otherwise the interest rate remains unchanged.

In its additional guidelines on ‘Interest Rates on Advances’, the RBI also allowed banks to review the Base Rate methodology after three years from the date of its finalization instead of the current periodicity of five years. This is to provide banks greater operational flexibility to them.

Base rate is the minimum interest rate below which a bank will not lend. The Base Rate system was introduced with effect from July 1, 2010 to enhance transparency in lending rates of banks and enable better assessment of transmission of monetary policy.

Any decision regarding change in spread on account of change in credit risk profile should be supported by a full-fledged risk profile review of the customer, the RBI said.

The change in tenor premium should not be borrower specific or loan class specific. In other words, the change in tenor premium will be uniform for all types of loans for a given residual tenor.

Banks, according to the RBI, should have a Board approved policy delineating the components of spread (mark up over the base rate) charged to a customer. Further, it should be ensured that any price differentiation is consistent with bank’s credit pricing policy.

Bank’s internal pricing policy must spell out the rationale for, and range of, the spread in the case of a given category of borrower, as also, the delegation of powers in respect of loan pricing. The rationale of the policy should be available for supervisory review.


Source : Thehindubusinessline

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Axis Bank reappoints Shikha Sharma as MD, CEO

Axis Bank board reappointed Shikha Sharma as the bank's managing director and chief executive officer (MD and CEO) for a three-year period.

The board reappointed Sharma as MD and CEO for a third three-year term starting in June this year, the country's third largest private bank said in a filing to the stock exchanges.

Sharma had joined the bank in 2009 and is set to complete a second three year term in May.

“The reappointment is subject to approval of the Reserve Bank of India and the shareholders of the bank,” Axis Bank said in a notice to the stock exchanges.


Source : Thehindubusinessline

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Karur Vysya Bank wins award

The Best Tech Savvy Bank – Runner Up award in MSME Banking Excellence Awards 2014 has gone to Karur Vysya Bank.

The Chamber of Indian Micro Small and Medium Enterprises has constituted this award.

Jarard Thomas, Deputy General Manager, New Delhi Division, received the award on behalf of the bank from the Minister for Micro, Small and Medium Enterprises Kalraj Mishra


Source : Thehindubusinessline

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HDFC Bank among world's 50 most valued banks in 2014

HDFC Bank is the lone Indian entity among the world's 50 most valued lenders in 2014 with a market capitalisation of close to $41 billion.

Ranked at the 45th position, the private sector bank is ahead of global majors Credit Suisse, DBS Group, and Standard Chartered with a market capitalisation of $40.58 billion.

In the top 50 list compiled by Relbanks, SBI has been ranked at 51th with market capitalisation of $36.40 while ICICI Bank with $33.42 billion is 55th.

With more than 70 million customers and over 9,000 locations and a market cap of $284.39 billion, Well Fargo of the USA is the largest bank in the world based on market capitalisation. It is the second largest bank in the US by deposits and debit cards.

Well Fargo is followed by the Industrial & Commercial Bank of China ( ICBC) with the market capitalisation of $269.70 billion. It is followed by JP Morgan Chase of again the USA with the market capitalisation of $ 233.94 billion.

Top ten banks of the world includes 4 from the USA, 4 from China and one each from the UK and Australia.

For the second quarter ended September 2014, HDFC Bank had reported a 20 per cent rise in net profit at Rs 2,381.5 crore as compared to Rs 1,982.32 crore.

However, this was the fifth consecutive quarter the private sector bank posted a sub-30 per cent increase in quarterly profits. For 37 straight quarters, the bank had posted at least 30 per cent profit growth.



Source : Economic Times

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Bank employees to strike work from Jan 21

Public sector bank employees have decided to go on a 4-day strike from January 21 to protest against the “rigid and callous attitude” of Central Government in resolving the long pending wage revision issue, a senior union leader said here today.

Earlier, it was decided to hold 1 day strike on January 7, which was deferred on the request of IBA to find out an amicable solution, All India Bank Officers’ Confederation (AIBOC) State Secretary Deepak Kumar Sharma said.

The decision is in response to the strike call given by United Forum of Bank Unions, which has more than ten lakh employees and officers of banking Industry under its umbrella.

“As there was no fresh proposal of hike from the side of IBA during this period, UFBU has decided to go ahead with the 4-day strike which will have the impact of 6 days as 25th is Sunday and 26th January is national holiday,” Sharma added.

The wage revision for bank employees is due from November 1, 2012, he said.

UFBU has been requesting, since the start of negotiations, a time-bound approach to hold the negotiations on its demands and for conclusion of wage settlement within a reasonable time but there is no significant progress in the wage negotiations despite a lapse of two years’ time, he said.

He claimed that despite disparity in wages and hardships of unlimited working hours, the employees of the banking industry, the backbone of the economy, are denied their due share.

Sharma said this was despite the workers being recognised by all for achieving all National/Social objectives set before them including opening of Jan-Dhan Yojna Accounts“.

He said the Public Sector bank employees have also decided to go on an indefinite strike from March 16 onwards and that the notice in this regard has already been served by UFBU to the IBA.

Source : Thehindubusinessline

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Kotak Mahindra Bank brings banking on social media platforms

In an attempt to connect to the net-savvy and socially connected customers, the private sector lender Kotak Mahindra Bank on Monday announced the launch of Jifi Saver, a savings bank account which can be managed via social media platforms like Twitter and Facebook.

To tap the growing e-commerce industry in the country and increasing users of social media platforms, Kotak Mahindra Bank will provide basic services like inquiry for balance, last few transactions, chequebook demand among a total 21 services under the name "Hashtag Banking (#banking)". Besides the normal banking services, the bank will also offer additional transaction points for purchase from select ecommerce partners to lure customers.

"Jifi Saver will take care of customers' needs such as online shopping, on-the-go transactions, financial planning, etc. It also offers all benefits and functionalities of a regular savings bank account," said Deepak Sharma, executive vice-president and head- digital initiatives, Kotak Mahindra Bank.

Interestingly, the bank has seen rapid rise in online banking as about 40 per cent of its existing bank customers are using online banking.

However, use of social media in the banking operations is the first such attempt by any bank in the country. "Before launching, we had done extensive research and testing for a secured technology platform. Financial transactions can't happen through Twitter or Facebook. For that, one has to come to Bank's system, which is having multi-layered security. Hence, there is zero possibility of losing a single rupee while doing banking through Jifi Saver account on social media platforms," said Sharma adding that the product was passed after scrutiny by experts from the Reserve Bank of India (RBI).

"With Jifi it will be easy to recharge mobile and DTH recharge via Twitter. We are the first bank in the world to offer banking service using social networks," Sharma said.

Jifi Saver is presently available in 27 cities in the country, these include mainly those cities with high digital penetration. In Gujarat the bank will offer services in Vadodara, Surat and Rajkot besides Ahmedabad.

Source : Thehindubusinessline

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RBI cautions against foreign 'investment tourists'

The Reserve Bank of India official today cautioned against foreign "investment tourists" in debt markets, highlighting concerns about short-term flows.

The comments from G. Padmanabhan, executive director at the RBI, came amid expectations that India will allow Euroclear settlements for government debt only for long-term investors.

He added that RBI will increase foreign investment limits in govt debt in "calibrated and gradual manner".

"The financial stability implication of 'investment tourists' exiting at a whiff of trouble has always to be kept in mind as we progress along the path of liberalization," said Padmanabhan in a speech uploaded by the RBI

He was speaking to the Primary Dealers Association of India on Saturday at their annual meeting.

The proposals for allowing international settlement of government bonds could increase attractiveness with foreign investors but also lead to creation of "NDF-like market overseas", said Padmanabhan.

Gross market supply of debt will remain elevated "in the foreseeable future" as the government will continue to run deficits despite fiscal consolidation plans, he said.

Source : Thehindubusinessline

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ICICI Bank launches money transfer service on Twitter

ICICI Bank, India's largest private bank, has launched its banking services on Twitter enabling customers to transfer money through the micro-blogging Web site.

Savings account customers can register their Twitter account with a onetime password and link their account number.

Customers can send up to Rs. 5,000 per transaction with a limit of Rs. 10,000 per day. The online NEFT charges will be applied.

Both the recipient and sender need to have a Twitter account.

This facility also enables customers to view their account balance, view the recent transactions and recharge mobile pre-paid through Twitter.

"Mobile transactions account for 10 per cent of our total transactions, increased from 2 per cent in 2.5 years...We have about 2.8 million customers on mobile banking, while about 15 million Internet banking users," said Rajiv Sabharwal, Executive Director, ICICI Bank.

ICICI Bank also plans to launch digital wallets ad digital wearables in the next few months.

Source : Thehindubusinessline

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Why private banks lag on the Jan-Dhan front

While private sector banks have shown impressive performance on a host of parameters, such as net profit growth and better asset quality, their performance with regard to the Pradhan Mantri Jan-Dhan Yojana (PMJDY) has been far from impressive.

According to data up to January 12, 2015, private banks have opened a mere 3.14 per cent of the total accounts opened under the scheme.

This translates to 35.08 lakh accounts out of a total of 11.16 crore accounts opened. Of these, two private sector banks — HDFC Bank and ICICI Bank — have opened about 40 per cent of accounts.

Public sector banks have opened 8.84 crore accounts and regional rural banks 1.96 crore accounts since August, when the scheme was launched.

Reasons aplenty

Private sector bankers say there are several reasons why account opening by them has been disproportionate to the assets they hold. Private banks control approximately 21 per cent of all assets in the banking system.

None of the private bankers wanted to come on record because finance ministry officials are well-versed with the issues these banks raise in the weekly progress call.

One private sector banker said the areas allotted to them are not where they currently do business or intend to do business anytime soon. “There are issues with distribution of territory to open these accounts,” the banker said, adding, “this is not at par with penetration of the bank’s branches.”

Another private sector banker cited viability issues related to private sector banks not stepping on the gas with respect to the scheme.

“The account’s viability has to be looked at. The operating costs and average balances are the concerns. It has to be also viable from other products’ point of view as well. On a standalone basis, it is difficult to make it sustainable,” he said According to indications, this is borne out in the numbers put forth by scheme managers on the website.

According to the figures, there are 8.69 crore accounts where not a single rupee has come in. The overall balance in the remaining accounts totalled Rs. 8,760 crore as on January 12. This translates to a balance of about Rs. 2,910 per account in the remaining 3.01 crore accounts.

Early days?

But is it valid to judge the viability of a business so soon? According to the chairman of a public sector bank, “Opening of these accounts is certainly not a loss-making business. We are not making any money on it yet, but nor are we losing anything.”

It will take some time for the money to flow in and the direct benefits transfer scheme of the government will play an important role in swelling the cash balances in these accounts, he added.

The key factor will be spreading awareness and encouraging the public to keep money in their accounts, while banks will have to work hard to create awareness, according to the public sector banker quoted above.

“Private banks always enter all such businesses late…they simply want to ride on the infrastructure that public sector banks put in place,” he claimed. Another private banker was more forthcoming when he said, “It’s a mindset issue as well for private banks. We need to look at it as a business model. Breakeven cost Rs. 120 per account.”

In comparison, the cost of opening these accounts is Rs. 200-250 per account.

Source : Thehindubusinessline

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