Why getting the account number right is very necessary while transferring funds online

When was the last time you went to a bank to transfer money?

Though the option is still open, banks say 80-85% of their NEFT and RTGS transactions are happening through net-banking or mobile apps. Online transfer is the preferred choice not only because it is convenient but because it is faster and there are no additional charges. All you have to do is register a person as a 'beneficiary' by giving his/her account number and bank IFSC code and you can transfer money real-time. But what if you accidentally send money to a wrong bank account? The account number length varies from 9 to 18 digits. IFSC is an other 11-digit code. The probability of error is extremely high especially when it means putting one digit wrong in a series of 29 digits.

To reduce the chances of mistake, as per RBI guidelines, banks are required to take certain measures. First, the customer is required to put the beneficiary account number twice. This is to double-check that the digits do not go wrong. Also, if there is a mismatch between the account number and IFSC code, the system will not accept the entry . Moreover, post adding a beneficiary , there is also a cooling period of 30 minutes during which you cannot transact.

"A third level of check happens during the cooling period as the customers are sent text notifications on their registered mobile number confirming the account number of the beneficiary they have added to their account Customers can reconfirm the number again at this stage," says a spokesperson from HDFC Bank. Some banks also give you the option of adding the beneficiary's mobile number when you register him/her so that the person can also be intimidated via SMS.

Why getting the account number right is very necessary while transferring funds online However, the chances of error still exist. While it is compulsory to mention the name of the beneficiary and the IFSC code, the reliance for transferring money is only on the account number. The notification on electronic transfer from the central bank says, "Credit will be effected based solely on the beneficiary account number information and the beneficiary name particulars will not be used." "It is generally the account number where the customers go wrong," says Jairam Sridharan, president, retail lending and payments, Axis Bank. So, if you accidentally put one digit wrong and it doesn't correspond to the account holder's name, the transaction can still go through and the money can be transferred. It is also possible that you had the wrong account number to begin with. The case will be the same if you transferred '30,000 where you had to pay only '3,000, that is, one extra zero.

The RBI guidelines say, "Responsibility to provide correct inputs in the payment instructions, particularly the beneficiary account number information, rests with the remitter or originator." So, the onus of the mistake will solely be on you. In case it happens, you can only seek help from the bank (see graphic). Inform the bank immediately . "The later you alert, the murkier the case becomes as banks become more suspicious," says Sridharan. The turnaround time also depends on how quickly the customer alerts his bank, the banks involved and the stage at which the transaction is at."If the remitter and beneficiary accounts are with the same bank, the process is usually quicker. Also, if you alert the bank within an hour, most probably the money wouldn't have been credited yet and can be reversed immediately ," says Sridharan.

The beneficiary has to be intimidated as well. Without the permission from the beneficiary , the bank cannot reverse the transaction. If the beneficiary says no, then you'll have to take the legal recourse and approach a court.

The RBI clearly states that "in cases where it is found that credit has been afforded to a wrong account, banks need to establish a robust, transparent and quick grievance redressal mechanism to reverse such credits and set right the mistake." However, this is not a regular procedure for banks and is clearly complicated. "Since the occurrences are pretty low, say two to three cases a quarter, most of the banks do not have a formal redressal process in place," says Sridharan. "It has to be an accident and the customer must have solid reasons for us to initiate the process," adds the HDFC Bank spokesperson.

Therefore, it is important that you take precautions on your end. Simple checks like sending a smaller amount, say '10 before transferring a bigger amount, copy-pasting it rather than typing the account numbers will save you from a lot of trouble later.

Source : Economic Times

Read more »

P.G. Jayakumar lays down office as MD and CEO of Dhanlaxmi Bank

P.G. Jayakumar has laid down office as Managing Director and CEO of the Kerala-based Dhanlaxmi Bank on Monday. He took charge as MD & CEO three years ago.

G. Sreeram, who was Chief General Manager, Canara Bank, Mumbai Circle, is succeeding him.

Jayakumar rose from the cadre to the highest office and served the bank for more than 37 years in various capacities including Branch Head, Zonal Head, and General Manager in charge of HR, Administration, Credit, Risk Management, and Treasury.

He assumed charge as MD & CEO at a crucial juncture after the exit of Amitabh Chaturvedi.

The bank, during Jayakumar’s period, raised capital funds of Rs521crore. This helped it comply with the regulatory capital adequacy requirements. The bank underwent total reorganisation as a customer-focused branch-centric model and a series of customer-friendly products and technology services were introduced, a press release said.

He has worked towards developing a microfinance model to uplift the poor by working closely with the major NGOs and churches, particularly in Kerala.

The bank has recorded positive growth in all key areas. In the first three quarters of financial year 2014-15, it posted a net profit of Rs25.14 crore on cumulative basis.


Source : Thehindubusinessline

Read more »

Allahabad Bank revises interest rates

Kolkata-based Allahabad Bank has revised the interest rates on domestic term deposits below Rs. one crore; and for a period of one year to less then five year.

The interest rate now stands at 8.75 per cent, a downward revision by15 basis point, from the previous 8.90 per cent.

The new interest rates come into effect from January 1, 2015.


Source : Thehindubusinessline

Read more »

P Srinivas new MD & CEO of United Bank of India

P Srinivas will be the new Managing Director (MD) & Chief Executive Officer (CEO) of United Bank of India (UBI). He will take over charge from today, December 31.

Prior to assuming charge at the Kolkata-headquartered bank, he was the Executive Director of Bank of Baroda. As the ED, Srinivas had handled major portfolios such as priority sector lending, MSME advances, credit monitoring, risk management and recoveries and investor relations.

His appointment comes nearly 11 months after the then Chairman and Managing Director, Archana Bhargava, stepped down. Bhargava had stepped down in February this year citing health reasons. However, sources maintained that it was the controversy of the bank’s spiralling non-performing assets that led to her resignation.


Source : Thehindubusinessline

Read more »

Andhra Bank recovers Rs200-cr bad loans

Andhra Bank has recovered about Rs200 crore non-performing assets (NPAs) in the last three months.

“Both recovery and upgradation of stressed assets have been high during the current quarter,” CVR Rajendran, Chairman and Managing Director of Andhra Bank, told BusinessLine here.

With this, the total recoveries for the bank stood at Rs2,200 crore. At the end of September 2014, the recovered amount was Rs2,000 crore.

Slippages also high

However, things are not entirely rosy. “Slippages have also been high,” Rajendran said. This is mainly on account of non-performance of previously restructured loans and increased stress in infrastructure segment. “We are likely to have some more restructuring,” the CMD said.

The crop loan waiver scheme in Andhra Pradesh and Telangana also hit the primary sector performance.

“The recovery has not happened on expected lines. In Andhra Pradesh it is almost nil while in Telangana it is better at 70 per cent,” he added.

Though Andhra Bank continues to focus on retail lending, which grew robustly in the second quarter, there is a general slowdown in the home loan segment. On the corporate credit front, there has been no improvement.

“There has not been a single project in the manufacturing and small and medium enterprises,” Rajendran said.

ATM charges

From December 1, Andhra Bank has started imposing charges on ATM transactions, in line with the RBI’s recent permission in this regard.

This is expected to give some relief as Andhra Bank is paying Rs3 crore to other banks by way of ATM user charges.

Last week, Andhra Bank completed raising Rs500-crore in tier I capital by way perpetual bonds.

It has plans to mobilise another tranche of Rs500 crore in February after the RBI’s monetary policy review as interest rates are expected to come down, according to Rajendran.


Source : Thehindubusinessline

Read more »

RBI expresses concern over restructured assets in banking sector

The extent of restructured assets in the banking sector, especially public sector banks (PSBs), is a cause of serious concern and an end to regulatory forbearance maybe the right step, according to the central bank.

“An early end to regulatory forbearance may be the right step. In addition, governance reforms along the lines suggested by the P.J. Nayak Committee will build in inherent checks and balances on the risks and returns of the credit portfolio thereby leading to more informed risk taking,” RBI said in the Financial Stability report released on Monday.

Many state-owned bank chiefs and indebted companies are lobbying to extend the window of regulatory forbearance that allows them to maintain low provisions against impaired or stressed assets.

In September 2014, PSBs continued to record the highest level of stressed advances at 12.9 per cent of their total advances, while for private sector banks the stressed advances stood at 4.4 per cent.

The relatively higher possibility of slippages in restructured standard advances is required to be factored in by banks from the capital adequacy perspective.

According to RBI, “While it may be somewhat legitimate to justify regulatory forbearance in times of major crises, forbearance for extended periods and as a cover to compensate for lenders/borrowers’ inadequacies engenders moral hazard.

“Furthermore, going forward, with the initiation of risk based supervision as well as implementation of Basel II advanced norms for credit, accounting discretions such as restructuring will have no impact on capital requirements since such processes incorporate capital provisioning based on expected losses and would largely align regulatory capital with economic capital rendering discretionary accounting forbearance of little consequence.”

Even under no-stress condition, any restructured advance (generally categorised as sub investment grade by a rating agency) is more likely to turn into a non-performing asset (NPA).

Also, since banks, traditionally have been short term working capital providers, their appreciation of particular risks in infrastructure projects seems to have been inadequate.

Hence, it is necessary that the banks strive for a more detailed understanding of the risk-return profile of the underlying projects before committing funds, whenever project appraisal is outsourced, RBI said.


Source : Thehindubusinessline

Read more »

PMJDY may be replicated in insurance, pension sector

Prime Minister’s Jan Dhan Yojna (PMJDY) is likely to be replicated in the insurance and pension sector to extend the financial services to the hinterland.

“Given the low levels of penetration of insurance and pension, there is a case for subsequently extending or replicating a project on the lines of PMJDY, to include the provision of insurance and pension services for the common man,” RBI said in the Financial Stability Report released on Monday.

At present, penetration of the insurance and pension in India is very low. Insurance penetration (premiums measured as percentage of GDP) is just about 4 per cent.

Under the Financial Inclusion Plan, banks will have to revise their targets so as to match with the targets allocated to them by the government under PMJDY, the central bank said.

With revised targets for opening of basic bank accounts in place, banks will have to ensure opening of at least one bank account in each household by January 26, 2015. As on December 24 2014, banks have achieved the 10 crore account opening mark under Pradhan Mantri Jan Dhan Yojana (PMJDY) and have issued 7.75 crore RuPay Cards.

RBI also said, “The timeline for providing banking services in villages with populations below 2,000 under the roadmap may be advanced from March 2016 to August 2015.”


Source : Thehindubusinessline

Read more »

More transparency needed in audit of big ticket CDR cases: RBI

There is a need for greater transparency to find out the economic impact and audit of big ticket CDR (corporate debt restructuring) cases, according to RBI.

“With increased regulatory focus on segregating cases of wilful defaults and ensuring adequate equity participation of promoter(s) in the losses leading to defaults, there is a need for greater transparency in carrying out a net economic value impact assessment and audit of big ticket CDR cases,” RBI said in the Financial Stability Report released on Monday.

There is also a need to review and strengthen the accountability mechanism in the entire process of reference, approval and implementation or exit under CDR. Adequate disclosures on the eventual cost-benefit profile of approved CDR cases (for successful as well as failed cases) will help in forming policy and aid proper use of scarce resources.

CDR is a process when banks provide support through restructuring of genuine cases of corporates in financial difficulties because of factors beyond their control. The CDR mechanism is meant to revive such cases as well as for the safety of the money lent by the banks and financial institutions.

Out of the total number of cases referred to/ approved under CDR, 49 per cent have been successfully implemented till date, according to RBI.

As per data by the CDR cell, 75 cases were exited successfully amounting to an aggregate debt of Rs. 58,205 crore as on September end.

The cell received over 638 cases with a total debt of Rs. 4,46,156 crore since inception. Of this, 121 cases have been rejected before admission or approval amounting to Rs. 65,581 crore, while 505 cases worth Rs. 3,67,607 crore have been approved.

However, RBI observed that the number of cases referred to the CDR cell has come down in the recent past.

One of the reasons for this reduction could be the Reserve Bank’s move to allow banks to restructure their large credits with aggregate exposure of Rs. 100 crore and above outside CDR under the Joint Lenders’ Forum (JLF) constituted under the provisions of the ‘Framework to Revitalise the Distressed Assets in the Economy’ which became effective from April 1, 2014.


Source : Thehindubusinessline

Read more »

Jan Dhan life cover: Banks, LIC told to make claim forms available on website

The Finance Ministry has asked banks and Life Insurance Corporation to make available claim forms on their websites for the Rs. 30,000 life cover promised under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

LIC has been asked to settle the claim within 15 days of the receipt of the claim form.

This was conveyed to the banks at a video conference meeting held by Joint Secretary Anurag Jain with executive directors of public and private sector banks to review the progress of PMJDY.

Till December 22, banks have opened 9.83 crore bank accounts under the PMJDY and issued 7.28 crore RuPay cards.

At this meeting, banks were asked to issue passbooks to all accountholders and activate RuPay cards.

Banks have agreed to complete this task by January 15 next year.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline

Read more »

ING Vysya staff demand job safety post merger, to strike on Jan 7

Employee unions of ING Vysya Bank demanded safeguarding of their interests post-merger with Kotak Bank and threatened to go on strike on January 7 —— the day on which the Bengaluru—headquartered lender will seek shareholders’ nod to approve the Rs. 15,000-crore merger deal.

To ensure that interests of all the stakeholders are ’protected’, S A Sridhar from the ING Vysya Bank officers’ association said a “tripartite agreement” between Kotak Mahindra Bank (KMB), ING Vysya Bank, and employees and officers, be signed which will lay out all points in detail.

The All India ING Vysya Bank Employees Union and All India ING Vysya Bank Officers Association, which together represent 35 per cent of the Bangalore-headquartered lender’s over 10,000 employees as members, however, said they are not opposing the merger but want their interests to be protected.

“We have an apprehension as the new management at KMB does not have an Union and believes in outsourcing its work. What will be the fate of our employees after the merger?” Ramkrishna Reddy, general secretary of the employees union told reporters here.

He added that recently KMB wrote to all the ING Vysya Bank employees to allay the concerns but ‘bypassed’ the unions.

Reddy emphasised that the Uday Kotak-led bank should go through the union if it is “sincere” about its efforts.

ING Vysya Bank spokesperson could not be immediately reached for comment. However, a representative for ING Vysya Bank referred to legal opinion of advisors to the deal, which said such a tripartite agreement is “infructuous”.

There is no precedent of such an agreement in previous bank mergers, the legal opinion said, alleging that such a demand “seems to be red herring i.e. something that misleads or distracts from relevant issues“.

ING employees and officers want internal MoUs to continue post-merger, and also stressed that perks and benefits decided by industry body IBA be continued, Sridhar said.

Kotak Mahindra Bank spokesperson Rohit Rao said: “The merger process entails as per the Banking Regulation Act, approval of the shareholders and thereafter approval from the RBI in addition to CCI’s approval.

“All protection related to employees have already been captured in the scheme of amalgamation which upon approval by RBI, Kotak Mahindra Bank shall fully standby and are obligated to comply with including sections relation to employees job security, wages, pension, gratuity etc.”

As is evident we would like to start with good faith constructive approach that secures all employees and creates growth for all stakeholders including employees after the RBI order, Rao added.

In a letter, KMB’s Joint Managing Director Dipak Gupta has written to ING Vysya Bank’s Chief Executive designate Uday Sareen saying that KMB will be honouring all IBA settlements and bi-partite agreements.

In one of the biggest deals of 2014, KMB had announced an all-stock deal to acquire ING Vysya Bank late last month.


Source : Thehindubusinessline

Read more »

SLBC confirms 100% Jan Dhan coverage in Dakshina Kannada

The State-level bankers’ committee (SLBC) of Karnataka has permitted the lead bank of Dakshina Kannada district for confirmation of 100 per cent coverage of households under the Prime Minister’s Jan Dhan Yojana (PMJDY).

This was revealed at the Dakshina Kannada district-level review committee meeting of bankers in Mangaluru on Tuesday.

Amarnath Hegde, Chief Manager of the Lead Bank of the district, informed the meeting that the district-level PMJDY implementation committee in its meeting on November 7 had decided to send a proposal to the SLBC for officially declaring the district as fully covered in opening of basic savings bank accounts for all households. The proposal was submitted to the SLBC and state administration on November 10.

The December 1 SLBC meeting in Bengaluru, which appreciated the efforts of Dakshina Kannada district, had permitted the lead bank for confirmation of 100 per cent saturation, he said.

Thulasi Maddineni, Chief Executive Officer of Dakshina Kannada Zilla Panchayat, who presided over the meeting, said that the bankers have completed the task of opening of accounts under the PMJDY. Now they have the important task of making all these new accounts operational. The banking habit has to be inculcated among those who have opened the accounts, she said.

Hegde urged the bankers to speed up the Aadhar seeding process and to issue RuPay cards to the new account holders.

He said that the banks may also create awareness among the RuPay card holders to keep their cards active through regular transaction. Cards become inactive if not operated within 45 days to get the benefit of personal accident insurance coverage up to Rs1 lakh, he said.


Source : Thehindubusinessline

Read more »

YES Bank raises $200-mn loan from ADB

YES Bank has raised $200-million unsecured loan from the Asian Development Bank to finance working capital and investment loans for small farm households and rural women in self-help groups.

Additionally, ADB will also provide a capacity development technical assistance grant of up to $1 million to YES Bank, the private sector bank said in a statement.

The grant will be used by the private sector bank for capacity building, improving the financial literacy of women borrowers, and for leveraging the YES livelihood enhancement action programme, which provides financial services to SHGs, for agriculture value chain integration.


Source : Thehindubusinessline

Read more »

Allahabad Bank gets nod to raise funds via QIP

Allahabad Bank obtained board approval for raising capital from various means including Qualified Institutional Placement (QIP).

The board at its meeting held Monday have discussed and approved in principle the raising of capital of the bank through preferential or QIP issue, Allahabad Bank said in a statement.

Funds would be raised in such a manner that the equity shareholding of the Government of India will not go below 52 per cent.

The government holding in the Kolkata-based banks stood at 58.90 per cent at the end of September 2014.

Keeping the huge capital requirement in the mind, the Union Cabinet earlier this month, allowed public sector banks to raise up to Rs. 1.60 lakh crore from markets by diluting government holding to 52 per cent in phases so as to meet Basel III capital adequacy norms.

Finance Minister Arun Jaitley in the first Budget speech had said: “To be in line with Basel-III norms there is a requirement to infuse Rs. 2.40 lakh crore as equity by 2018 in our banks. To meet this huge capital requirement we need to raise additional resources to fulfil this obligation.”

While preserving the public ownership, the capital of these banks will be raised by increasing the shareholding of the people in a phased manner through the sale of shares largely through retail to common citizens of this country, he had said.


Source : Thehindubusinessline

Read more »

RBI staff to join banking sector strike on Jan 7

Reserve Bank employees have decided to observe a strike on January 7, 2015, in solidarity with the cause of the United Forum of Bank Unions in the commercial banking sector.

The All-India Reserve Bank Employees Association and the All-India Reserve Bank Workers’ Federation have urged the RBI Governor to intervene to bring peace in the banking sector, stating that the RBI cannot remain a mute spectator.

The Association and Federation advised units to observe peaceful and organised action in all RBI offices and liaise with units of the United Forum in the run-up to the strike.

“We have got an important stake in bank employees’ success and achievements. Their settlement has provided us the basis of our wage negotiations, which are pending,” said Samir Ghosh and SV Mahadik, RBI employee union leaders.

“Indian Banks’ Association has created a desperate situation for bank employees whose patience has run out. The Government is silent, unconcerned about the turmoil in this sensitive sector and the plight of millions of customers.”

Bankers have made huge profits in 2012, 2013 and 2014 from the toil and sweat of employees. But they refuse to give them a modest wage increase forcing them to strike work off and on, the leaders noted.


Source : Thehindubusinessline

Read more »

Violation of KYC norms: RBI slaps Rs 50 lakh penalty on ICICI Bank, Rs 25 lakh on Bank of Baroda

The Reserve Bank of India (RBI) on December 17 imposed penalties on ICICI Bank and Bank of Baroda for violating 'Know Your Customer' (KYC) as well as anti money-laundering norms (ALM). The central bank fined ICICI Bank Rs 50 lakh, BoB Rs 25 lakh, and cautioned State Bank of India, Axis Bank and State Bank of Patiala that they should review and comply with KYC norms.

In a statement, RBI said, "Failure on the part of these banks (ICICI Bank and BoB) to take timely remedial measures had aggravated the seriousness of the contraventions and their impact."

RBI reviewed the KYC and ALM processes of these banks after it received a complaint from a reputed statutory organisation in August 2013. This complaint included details of a fraud perpetrated in the five banks censured, with the connivance of certain officials of the statutory organisation.

"The fraudsters had managed to open fictitious accounts in the name of the statutory organisation in the above five banks and operated the accounts, mainly for encashing cheques/ demand drafts/ postal orders of which they were not the rightful owners, for periods ranging from one month to two years, without being detected by the banks," the RBI statement read, without naming the organisation. The central bank conducted a scrutiny of these five banks in January 2014.

The scrutiny revealed "non-adherence to certain aspects of Know Your Customer or KYC norms and non-adherence to instructions on monitoring of transactions in customer accounts", RBI said. The central bank decided to impose a monetary penalty on ICICI Bank and BoB after issuing a show-cause notice and reviewing their response. State Bank of India, Axis Bank and State Bank of Patiala were not fined "as the banks' explanations regarding the circumstances which led to the fictitious accounts getting opened and operated without detection, were judged to be reasonable".

This is not the first time private sector banks like ICICI Bank and Axis Bank have been pulled up by the central bank for violation of KYC norms. In 2013, RBI had imposed a penalty of Rs 1 crore and Rs 5 crore on ICICI Bank and Axis Bank, respectively, after an expose by the website, CobraPost, in which undercover reporters sought bank staff 's assistance in legitimising black money. Those fines were also for non-adherence to KYC, antimoney laundering and filing of Cash Transaction Reports (CRTs).

Most recently, in July 2014, the central bank had imposed a combined fine of Rs 1.5 crore on 12 banks, for not conducting adequate due diligence on loans granted to Deccan Chronicle Holdings, which led to a loss of Rs 4,000 crore to the banking sector.

Source : Economic Times

Read more »

Vijaya Bank event at Pollachi

Vijaya Bank organised the Pradhan Mantri Jan Dhan Yojana programme at Pollachi. KR Shenoy, Executive Director of Vijaya Bank, distributed Rupay Cards and Pass Books to the beneficiaries. The programme was attended by over 200 beneficiaries and large number of people from nearby villages, said a Vijaya Bank statement. Shenoy explained various important features of the scheme to beneficiaries. A short film on Pradhan Mantri Jan Dhan Yojana Scheme in the local language was screened to create awareness.


Source : Thehindubusinessline

Read more »

Diluting government stake is credit positive for banks: Moody’s

The Cabinet decision to allow private capital by diluting government stake in public sector banks is credit positive for undercapitalised banks, according to Moody’s Investor Service.

“The ability to raise private capital that dilutes the government’s stake is credit positive for the undercapitalised public sector banks because government resources to recapitalise banks are limited,” Moody’s said in a statement.

On December 10, the Cabinet said that it would allow government ownership in public sector banks to fall to 52 per cent as banks raise capital to meet Basel-III requirements, which will steadily rise until 2019.

“In the 11 public sector banks we rate, the Indian Government’s stakes range from 56 per cent to 84 per cent. Public sector banks account for about 70 per cent of the Indian banking system in terms of loans, deposits and branches.

The Cabinet stopped short of allowing public sector banks to reduce their government stakes below 51 per cent, a level that would jeopardize government control of the banks,” Moody’s said.

Phased reduction

The Cabinet said a phased reduction in the government’s stakes in public sector banks to 52 per cent would help raise up to ₹1.61 lakh crore from the market.


Source : Thehindubusinessline

Read more »

Syndicate Bank launches new scheme for women entrepreneurs

Syndicate Bank is targeting to reach out to over 20,000 women entrpreneurs across the country through a new scheme 'SyndMahilaShakti', an initiative for women empowerment.

The bank is observing 'SyndMahilaShakthi' week currently till December 20 across the country and aims to extend loans to over 20,000 women entrepreneurs to take up various self-employment activities under micro, small and medium enterprises, a press release said.

Since December 15, the bank has sanctioned loans worth Rs. 68 crore to about 5,415 women entrepreneurs till Wednesday, officials said.

Concessional interest rates

Under the scheme, the bank is extending finance up to Rs. 5 crore per woman beneficiaries at concessional interest rates.

The rate of interest for loans up to Rs. 10 lakh is at the base rate of 10.25 per cent, while for loans exceeding Rs. 10 lakh, a concession of 0.25 per cent is being provided on applicable interest rate.

The borrower has to contribute 15 per cent margin on the loan, while the processing and documentation charges are fully waived on these loans. No collateral security and no guarantee is insisted for loans up to Rs. 10 lakh.

Available facilities
The beneficiaries can avail themselves of credit card facility without any admission fee and they can also avail themselves of various facilities such as instant global debit cards/ATM cards, SMS banking, mobile banking, Internet banking, any branch banking, SyndSuraksha insurance policy and SyndArogya health insurance cover, the statement said.

All micro enterprises will get a rebate of 0.5 per cent in rate of interest for prompt repayment to be reimbursed at the time of closing the loan account. The loans can be repaid in a maximum period of 7 to 10 years, including repayment holiday.

The bank shall be covering all eligible borrowers under Credit Guarantee Fund Trust for Micro and Small Enterprises scheme.

Eligible borrowers can also be sponsored by district industries centre, NGOs, women and child development department and self help groups, among others. The beneficiaries will be given free skill development training across the country, it said.


Source : Thehindubusinessline

Read more »

Dhanlaxmi Bank push to recover bad loans showing results: MD

Dhanlaxmi Bank, named in the Rajya Sabha as having the highest NPA (non-performing assets) ratio among private sector banks (at 7.27 per cent), has taken strong measures to tackle the problem.

These include identifying wilful defaulters, enforcing the SARFAESI Act (which allows banks to auction properties of loan defaulters), one-time settlements, sale of assets to Asset Reconstruction Companies and filing cases with the Police and Services Fraud and Investigation Department of India.

Seeking help

PG Jayakumar, Managing Director and CEO, told BusinessLine over phone from Chennai that the bank also plans to seek help from Indian embassies overseas where the money is stashed away  and is approaching the central banks of those countries for recovery of the money. In the next couple of years, he said the [loan] advance book would get better as accretion to NPAs get arrested, lending is done carefully with strong underwriting standards and credit monitoring is stepped up.

According to Jayakumar, Delhi Police recently helped the bank recover Rs33 crore from fraudsters.

He expected the gross NPA ratio to come down to 4-5 per cent and net NPA ratio to 2.5 per cent in the next few years. This would be further reduced by enhanced credit sanctions in the retail and SME (small and medium enterprises) segments.

The gross NPA of the bank now stands at Rs550 crore and the net NPA at ₹360 crore, he added.

Reasons for default

Speaking on the reasons that led to the surge in loan defaults, Jayakumar said the management from 2009 to 2012 oversaw loan advances growing to Rs10,200 crore from Rs3,200 crore. The huge increase, particularly in 2011-12, was made ignoring basic protocols in credit approval. As a result, NPAs went up to Rs1,214 crore.

Rationalisation

In 2012, the present CEO took charge and NPA recovery of Rs652 crore took effect. The high NPA ratio is also a reflection of the reduction in advances, a conscious decision taken to rationalise the advances book and free it from low-yielding corporate advances, huge retail advances, loans for construction equipment and commercial vehicles, among others, he said.


Source : Thehindubusinessline

Read more »

HDFC Bank launches mobile branch in Varanasi

In Prime Minister Narendra Modi's Lok Sabha constituency, country's second-largest private lender, HDFC Bank today launched mobile banking initiative to offer round-the-clock banking facility.

"Part of the bank's digital banking offering... 'Bank Aap Ki Muththi Mein' is technology agnostic and runs on all mobile devices popular technology platforms support," said Nitin Chugh, Head-Digital Banking, HDFC Bank.

'Bank Aap Ki Muththi Mein' works on both smartphones as well as the basic phones that support Internet browsing.

It is another offering from the bank's platform to provide further convenience to customers, eliminating need for accessing branch or ATM, he added.

It would also help in financial inclusion as the mobile app would help rural population connect to bank with the basic handset as villagers don't have smartphones, he said.

"For phones that do not support Internet browsing, there's sms-banking and missed-call banking... a customer needs to send a text or call a toll free number to know his account balance, get a mini statement, request a check book or detailed account statement," he added.

As of September 2014, India had over 90 crore mobile users in the country but only 4 crore mobile banking customers.

Besides fixed and recurring deposits, bill and tax payments, buying insurance and mutual funds transactions, the offering will also allow customers to buy all kinds of loans instantly.

It also offers customers location-specific promotions, offers/deals on shopping, dining, movies and entertainment.

About 55 per cent of all transactions at HDFC Bank are conducted through digital channels.

Source : Economic Times

Read more »