Muthoottu Mini branches in Delhi

Muthoottu Mini Financiers Pvt. Ltd., one of the leading NBFCs, has announced the opening of its first bunch of branches in New Delhi. The seven branches in the capital city are located at Janakpuri, Dwarka, Dilshad Colony, Palam Colony, Uttham Nagar, Tughlakabad and Sunder Vihar.

In the second phase, the company plans to open another 22 Branches.

Roy M. Mathew, Chairman, Muthoottu Mini Financiers, said in a statement here that the company would offer various services including gold loans, e-gold, life insurance, general insurance, health insurance and money transfer facilities etc.

The company at present has more than 1,000 branches in various parts of the country.

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Canara Bank Christmas fair

A Christmas fair organised by Canara Bank in association with Kudumbashree opened here on Friday.

K.B. Valsala Kumari, Executive Director, Kudumbashree, inaugurated the event. She lauded the efforts of Canara Bank and Kudumbashree in coming forward to organise the fair.

G. Sreeram, general manager, and C.G. Nair and S.T. Ramachandra, deputy general managers, Canara Bank, offered felicitations.

Fifty stalls displaying various products have been put up at the fair.

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IOB to involve SHGs in Direct Benefits Transfer, says its Chairman

The Indian Overseas Bank (IOB) is planning to involve the Self Help Groups (SHGs) in some of the activities relating to the ambitious ‘Direct Benefits Transfer’ scheme of the Central Government which would also bring the SHGs supplementary income, the IOB CMD M. Narendra said here on Sunday.

The bank has also taken initiatives to give a boost to retail credit and has tailor made schemes to meet the needs of different sections of the customers, he said.

Participating in an IOB credit disbursement programme here this evening, he said though districts in Tamil Nadu do not figure among the first lot of identified districts for direct benefits transfer to commence from Jan 1, these districts would be also be covered gradually. Under this programme, the beneficiaries of various government programmes would get the financial assistance directly credited to their accounts. The money could be delivered either through the Banking Correspondents (BCs) or withdrawn from Micro ATMs or through pre-paid cards according to the requirements.

The IOB CMD said a ‘massive work has to be done’ by the IOB staff with regard to the ambitious proposal for DBT scheme and he wanted some of the members of SHGs to take up the work relating to the scheme by becoming Business Correspondents. The bank was planning to appoint as many BCs as possible that would also provide the SHG members supplementary income.

Reaching Rural areas

Narendra said IOB was keen to reach out to the rural areas since its roots are in them. The bank had linked over 4.35 lakh members through the SHGs to whom the bank had lent nearly Rs 4,335 crore in Tamil Nadu and said ‘women are very much honest’ in loan repayment.

He said the bank had recently taken a lot of initiatives such as retail credit under which housing loans up to Rs 30 lakh were charged at 10.5 per cent interest that was the lowest that IOB could charge as this was the base rate. The interest rate for vehicle loans has been slashed from 14 per cent to 11 per cent. While jewel loan for agri purposes was charged at 7 per cent, for other purposes the interest rate had come down to 12 per cent from 14.5 per cent.

He said IOB took the lead in providing educational loans to students who got admission under management quota and also for students pursuing diploma courses or nursing course. The bank has an exposure of Rs 3,000 crore as educational loan. He said that in Tamil Nadu most of the loans are regularly repaid. At the function itself loans worth Rs 25 crore were disbursed today.

Recruitment drive

Narendra said IOB, which has already 189 Rural Development Officers (RDOs), is recruiting 300 more RDOs from different agricultural universities. It had recruited more than 7,500 staff members in the past two years and the recruitment drive would continue.

The IOB CMD advised the agriculturalists to not limit themselves to crop loans but take up other works such as land development, providing irrigation facilities, purchase of farm implements etc availing loans under investment credit facility to enhance farm productivity and quality of the produce. The bank, in a campaign conducted for this purpose, made a credit advance of Rs 616 crore.

Urban horticulture

He said the bank had also embarked on a scheme to support urban horticulture to improve greenery at homes by growing vegetables and developing flower-garden and loans for individuals up to Rs 2.5 lakh and up to Rs 25 lakh for institutions were given by IOB under this scheme.

G.V. Koorse, Chief Regional Manager, IOB-Coimbatore, said the urban horticulture scheme would address the issues of unemployment and under-employment in urban centres. The loan carried low interest rate.

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More customers are taking to mobile banking

This year has seen a gradual pick-up in mobile banking transactions, thanks to increased customer awareness and proliferation of smart phones.

M-banking services, such as mobile wallet and Interbank Mobile Payment Service (IMPS), are being used for instant inter-bank electronic fund transfer service through mobile phones in India.

These services are mainly used for balance checks, account transactions, payments, credit applications and other banking transactions.

The IMPS is also being extended to accept merchant payments, using the bank account and Aadhaar number.

According to NPCI (National Payments Corporation of India) data, the total number of mobile banking transactions has increased to 86,884 amounting to Rs 33.79 crore in November 2012 from 15,759 transactions amounting to Rs 5.30 crore in December 2011.

For the country’s largest bank State Bank of India, of its total customer base of 200 million, about 5.2 million have registered for its mobile banking services. Two of the country’s largest private sector banks — ICICI Bank and HDFC Bank — have also launched services on its mobile banking platform.

“Overall, the banking industry averages about 3 lakh transactions per day through mobile banking,” Lalit Sinha, General Manager (Alternate Channels and New Initiative Department), Union Bank of India.

The growing popularity of mobile banking, particularly for small-value transactions, prompted the RBI to raise the limit for end-to-end encryption from Rs 1,000 to Rs 5,000 and remove the transaction limit of Rs 50,000 per customer per day for funds transfer and for purchase of goods and services. According to a KPMG report, with mobile Internet usage is expected to exceed desktop Internet use by 2014, mobile banking services will become even more important.

“Many customer segments are clearly getting comfortable with using mobile banking. It is particularly true of the Generation-Y group (18-32-year olds) who are three times more likely to adopt mobile banking than older users, the report said.

Most big banks have seen a 100 per cent growth in mobile banking with more services waiting to be launched in the upcoming year.

Slow Penetration

The Reserve Bank of India said, “The growth in mobile banking that has taken place in the country till date, though at a rapid pace, is yet to reach the critical mass that will enable it to deliver on its promise of reaching banking, including payment services, at a cheaper, secure and seamless manner to the existing and potential customers.”

According to Sinha, most customers, despite using a smart phone, have a perception of “I do not need it” and hence are not encouraged to use it.

“Getting customers on board has been a major challenge for us. Once a person starts using mobile banking, they stick to the usage and get used to it,” Sinha said.

We believe that mobile banking will grow with a better focus on merchants than retail customers at this stage. Hence, there is a greater need to migrate to IMPS, Sinha said.

A. P. Hota, Managing Director and CEO, NPCI had recently said, “By 2020, about 22-24 per cent of the transactions will be under the mobile payments system.”

Beena.parmar@thehindu.co.in

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For Corporation Bank, using technology to monitor loans is paying off

You feel happy when an SMS alert from your bank informs that money has been credited to your account. The same may not be the case when it is about a deduction.

What if your bank sends an alert on the EMI (equated monthly instalment) due, well in advance? If you are a genuine borrower, it may be a slight irritant. But it is one of the processes that Corporation Bank follows to monitor its loan accounts.

“Follow-up using technology is the key. Following up right from day-one can keep the portfolio in a healthy condition,” Ajai Kumar, Chairman and Managing Director of Corporation Bank, told Business Line here.

The borrowers need to be reminded in time, though most of them may not like it he said, adding that some of them turn defaulters because they either forget or don’t get time to pay.

SMS alerts indicate that the bank is making best use of technology to gauge the loan accounts through its ‘graded system of monitoring’.

Ajai Kumar said that the bank introduced this system in June. It is a focussed way of monitoring the asset. Loans in this system are graded based on the amount and the time overdue.

The bank has put in place a system where the Circle General Manager monitors loans up to Rs 10 crore, and the Zonal GM up to Rs 5 crore. Loans above Rs 10 crore are monitored by the head-office.

Now, every month a report is made under these categories which will have an annexure giving details of the balance, the limit, payment of instalments, and so on. It will also have information on whether all terms and conditions are invoked or not. Based on these reports, action is taken.

“In the case of Rs 10 crore and above, a consolidated summary comes to me. So I start actions on those,” he said, adding that no paper travels in this system. It travels via bank’s digital network from the branch to the head-office level. “The top management information dashboard on the computer, iPad and iPhone helps me monitor the assets and review the performance of the bank,” he said.

The bank is also monitoring the time overdue in loan accounts. Once the account is overdue for 30 days, the bank calls it as A1, for more than 30 days A2, and for more than 60 days, A3.

“We have set up committees of GMs for A2 and A3. They meet twice a week to monitor the accounts,” he said.

Asked about the impact of this system, he said the bank has been able to prevent huge slippages. “The upgradation and recovery that have taken place in the last quarter are much higher than we had stipulated.”

In the first-half of 2011-12, bank made a cash recovery of Rs 250 crore. In H1 of 2012-13, that is, after the introduction of this system, it has recovered nearly Rs 510 crore. “How you become smarter is by getting information real-time,” he added.

vinayak.aj@thehindu.co.in

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