Build robust mechanism to prevent e-banking fraud: RBI

The Reserve Bank of India wants banks to build a robust mechanism to prevent incidents of fraud in areas of mobile/Net banking and electronic fund transfer.

“With greater infusion of technology in banking, the incident of frauds in Internet banking has witnessed an increase in recent times. Banks need to improve customer awareness to contain incidents of frauds involving customers,” the RBI said in its latest Report on Trend and Progress of Banking in India.

Ensuring efficiency of the banking sector by way of technology infusion while minimising the occurrence of fraudulent events has become one of the major objectives of the Reserve Bank in recent years.

According to RBI, complaints related to unauthorised fund transfers, fraudulent withdrawals from ATMs using duplicate cards, phishing e-mails aimed at extracting personal information have registered significant increase in recent times.

beena.parmar@hehindu.co.in

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Seri Infra to set up white label ATMs

Srei Infrastructure Finance Ltd said it will set up white label ATMs (WLAs) to diversify its business.

The infrastructure non-banking finance company may be diversifying into the WLA business as the infrastructure financing business is facing a slowdown.

WLAs are the ATMs which are provided by third parties to banks.

Last week, Muthoot Finance decided to diversify into the WLA business. To accelerate the growth and penetration of ATMs in the country, the RBI, in February 2012, decided to permit non-banks to set up, own and operate ATMs.

The central bank said that the ATMs rolled out by non-banks would be in the nature of WLAs and would provide ATM services to customers of all banks.

Non-bank entities proposing to set up WLAs have to make an application to the RBI seeking authorisation under the Payment and Settlement Systems Act 2007.

Such entities are required to have a minimum net worth of Rs 100 crore at the time of making the application and on a continuing basis after issue of the requisite authorisation.

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United Bank in talks to offload stressed assets worth Rs 300 cr

United Bank of India plans to offload stressed assets amounting to Rs 200-300 crore to asset reconstruction companies (ARCs) by the end of this fiscal.

According to Deepak Narang, Executive Director, the bank is already in talks with several ARCs for the sale of its stressed assets.

“We have identified 70 accounts amounting to Rs 200-300 crore for offloading to ARCs. We will float tender and invite bids for these accounts,” Narang told newspersons on the sidelines of a press meet to announce the launch of U-Connect — a platform for share trading.

Valuation is one of the biggest issues in sale of such assets. “We are looking for the right kind of price for these assets,” he said.

The bank is also laying thrust on recovery mechanism to bring down its gross non-performing assets to 3.25 per cent (3.88 per cent during the July-September quarter) by the end of this fiscal.

United Bank had set a target of achieving cash recovery of Rs 450-500 crore by the end of this fiscal. The bank has already recovered close to Rs 200 crore during the first six months, Narang said.

During the July-September quarter, the bank witnessed fresh slippages of about Rs 200 crore. “We hope things will improve now and we are looking at ways and means of arresting fresh slippages and boosting our recovery mechanism to bring down NPAs,” he pointed out.

U-Connect

United Bank has launched an integrated online platform for stock trading in association with the Calcutta Stock Exchange. The product will help investors in Tier-II and -III cities by giving them access to both NSE and BSE.

This will also help boost the bank’s fee income and strengthen its current and savings bank account portfolio, Bhaskar Sen, Chairman and Managing Director of United Bank, said.

shobha.roy@thehindu.co.in

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Bank of Maharashtra to provide more loans to large corporates

At a time when major public sector banks and private banks are curtailing their exposure to large corporates, small banks like Bank of Maharashtra are stepping in to fill the void.

So far, the Pune-based bank focussed more on providing loans to agriculture, medium, micro and small-scale enterprises (MSMEs) and retail customers.

“We will increase our focus on providing loans to large corporates. We have a total market share of only 1.20 per cent. This is our opportunity to increase that,” Narendra Singh, Chairman and Managing Director, said. The corporate loan book of the bank is 37 per cent against the industry average of 50 per cent. The bank will grow its corporate loan book to 42 per cent of advances by end of this fiscal, said C.V.R. Rajendran, Executive Director.

“We take only 72 hours for either approving or rejecting loans up to Rs 250 crore,” said Singh.

Asset Quality

Slippages (gross NPAs) of the bank were at two per cent of total advances in the quarter ended September. After accounting for provisioning, NPAs (net) stood at 0.88 per cent. “The bank uses a judicious mix of SARFAESI Act, Lok Adalats, recovery camps and agents to recover its dues,” said Singh.

In this financial year, the bank is eyeing a cash recovery of Rs 600 crore against Rs 400 crore, a year earlier.

satyanarayan.iyer@thehindu.co.in

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Karnataka Bank cuts base rate

Karnataka Bank has reduced its base rate by 25 basis points with effect from November 10.

The bank’s base rate now stands reduced to 10.75 per cent from the earlier 11 per cent. As a result, all its base rate linked loans get cheaper by 25 basis points.

A bank release said here on Saturday that the reduction is applicable to the existing loans and also for the future loans. This will enable retail and MSME customers to avail funds at reduced rates.

The bank has reduced the interest rates on housing loan and car loan products by 50 basis points.

The release said the housing loan up to Rs 25 lakh will be extended at the rate of 10.75 per cent.

The revised rate of interest on car loan is 11.25 per cent.

The bank said that there is a corresponding reduction in the rate of interest on deposit by 25 basis points.

vinayak.aj@thehindu.co.in

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