Balance inquiry to be included in free ATM transactions

New Delhi: There is some good news and some bad news for people using ATMs for their banking transactions from on Friday.

As per an RBI directive, banks will have to credit the wrongly debited amount to the customer's account due to failed ATM transactions within seven days of the complaint from Friday onwards, as against the current norm of 12 days.

However, the number of free transactions allowed at ATMs of banks other than where a customer holds the account would now also comprise non-financial transactions like balance inquiry.

Currently, customers are allowed a limited number of free transactions, generally five, for cash withdrawal and other financial transactions from other bank ATMs, while there is no cap on number of free non-financial transactions like balance inquiry, PIN change and mini statement.

This will change with effect from July 1, as RBI has allowed the number of free transactions permitted per month at other bank ATMs to be inclusive of all types of transactions, financial or non-financial.

Besides, these free transactions would be available to only the savings bank account holders.

The banks have started informing their respective customers about the proposed changes from July 1.

In one such notification, HDFC Bank said it would charge Rs 20 per financial transaction such as cash withdrawal beyond five free ones.

Besides, it would charge Rs 8.50 for every non-financial transaction such as balance inquiry, pin change and mini statement after the five free transactions a month.

At the same time, HDFC Bank said that it "will credit such wrongly debited amounts within a period of 7 working days from the date of the complaint.

As per RBI guidlines, the banks would have to pay Rs 100 per day beyond 7 working days, but only if the complaint is lodged within 30 days of the date of the transaction.

In another measure to check any fraudulent use of bank accounts, the banks have also been told by RBI to provide SMS and email alerts to the customers for every transaction from tomorrow, as against the current practice of alerts for only select transactions beyond a certain amount.

Source: Financial Express

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Banks shore up top line to meet quarter-end targets

Banks borrowed heavily from the Reserve Bank of India (RBI) on Wednesday to shore up their balance sheets to meet their quarterly targets. This is despite the central bank advising them not to fund credit through overnight borrowed funds.

According to data released by RBI, banks borrowed Rs 96,330 crore from the central bank’s liquidity adjustment facility (LAF), compared with Rs 49,000 crore yesterday.

“The high repo borrowings are because banks wanted to shore up their top line to meet quarterly targets. Since securities are available with banks, they pledge it to RBI for funds to meet loan disbursement,” said a treasury official of a public sector bank.

Bankers indicate most banks must be having two-three per cent more government paper with them. Banks need to maintain a statutory liquidity ratio of 24 per cent of their net demand and time liabilities.

A treasury official with an associate bank of State Bank of India also confirmed that on Wednesday's sharp rise in LAF figures was partly driven by the need to meet quarter-end targets. “Some customers are asked to draw down part of unused credit lines for short term and lending is done through LAF money.”

During the third quarter review of the monetary policy in January, RBI had asked banks to narrow the credit deposit growth gap and not to fund credit growth through repo borrowings.

“The Reserve Bank will constantly monitor the credit growth and, if necessary, engage with banks which show an abnormal incremental credit-deposit ratio,” RBI had said in January.

In March, RBI Deputy Governor K C Chakrabarty had told Business Standard: “The LAF money is not meant for lending on a continuous basis. The system cannot run like that. The facility is for meeting liquidity needs arising out of mismatches of temporary nature.”

The borrowing though the LAF window, which also indicates liquidity tightness in the system, is almost double than the central bank's comfort level. RBI had articulated its liquidity comfort zone around (plus/minus) one per cent of net demand and time liabilities or Rs 50,000 crore.

Banks have borrowed these large LAF funds despite healthy deposit growth during the current financial year on the back of attractive interest rates. Deposit growth as on June 17 was 18.21 per cent year on year, higher than RBI's projection of 17 per cent for 2011-12. Credit growth, on the other hand, remained strong with 20.7 per cent as on June 17. RBI had projected 19 per cent credit growth for the current financial year.

Source: Business Standard

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World Bank's 4-yr ban on Wipro ends

New Delhi: The World Bank said Wipro is now eligible to apply for becoming a vendor, as the four -year ban imposed on the software major ended this month.

"Wipro has served their full four-year sanction period (June 13, 2007 to June 12, 2011) for the sanctionable practice of providing improper benefits to Bank staff," a World Bank spokesperson said.

The multilateral lender had banned Wipro in June 2007 from doing business with the group under its corporate procurement programme.

The ban, however, came to light only in January 2009.

Wipro had denied allegations of providing improper benefits to Bank staff.

The spokesperson said Wipro till date has indicated its ongoing interest in doing business with the World Bank, "but they are not in discussions with us".

"Wipro has not reapplied for vendor status with the Bank; however, should they do so, the Bank's own vendor registration process will evaluate their eligibility with an appropriate level of diligence applied to the issue of governance," he said.

Queries to Wipro on whether the company is interested to become a vendor again remained unanswered.

"Our inability to get future business from the World Bank will not adversely affect our business and results of operations," Wipro had said after the debarment was made public.

The World Bank had banned Wipro after finding that the company was "non-responsible" under the group's vendor eligibility policy.

In the latest list of "non-responsible vendors", there are eight Indian entities, including Satyam Computer Services and Megasoft Consultants.

Satyam has been debarred for a period of eight years, starting from September 22, 2008, while Megasoft's four-year ban began from December 10, 2007.

Other entities named as "non-responsible vendors" are HariOm Interiors, Litura Electrical Technologies, Mehta Associates, Raj Furniture and Vishal Wood Works. All of them have been banned for a period of three years starting from January 12, 2010.

Another firm Puran Kumar Architects has been debarred from the same date, but for a period of four years.

According to World Bank website, the determination of non-responsibility is made through an administrative process that permits the vendor to provide information showing that they are responsible.

Source: Financial Express

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Market slowdown hits Indian Bank FPO

Chennai: Public sector lender Indian Bank said it is looking at better market conditions for launch of its follow-on public offer (FPO).

The city-headquartered bank had proposed to raise funds for its expansion plans from the capital market,Indian Bank Chairman and Managing Director T M Bhasin said.

"We will start preparing for the red-herring prospectus. it should be over in one month ... after obtaining the SEBI ticket we will hit the market when it is conducive," he said after addressing the shareholders at their Fifth Annual General Meeting here.

The bank will sell about 6.1 crore shares with a face value of Rs 10 through the FPO.

However, he cautioned that the Bank was not short of funds and does not require capital as the capital adequacy ratio was 13.56 per cent.

On their proposal to raise USD one billion (about Rs 4,400 crore) by issuing through overseas bonds, Bhasin said the offer document was ready and would hit the Singapore Stock Exchange by the second week of July.

"Right now the offer document is ready and we will hit the market by second week of July... the proposal is to raise USD one billion (Rs 4,500 crore).. we will go in two tranches (500 million).. this is only for overseas lending..", he said.

Bhasin said their new Corporate office coming up at Royapettah in city at a cost of rs 67.5 crore would be inaugurated in July.

Earlier, addressing the shareholders at the AGM,he said the Bank envisaged to do a total business of Rs 2.25 lakh crore this fiscal.

Source: Financial Express

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Credit card issuers can do more on safety: Study

New York: Credit card companies could make customers' accounts and identities more secure with a few simple steps.

That's what consulting firm Javelin Strategy & Research says in a study looking at the policies banks use to protect customer data.

Javelin gave Bank of America its highest score for safety among the top U.S. card issuers. It's the third largest U.S. card issuer. The biggest card issuer, American Express, was ranked seventh for safety.

Javelin says card companies do a good job resolving fraud problems once they occur, but fall short on prevention and detection. The easiest way to improve those areas is to involve the customer more, by creating things like alerts that help card users notice false charges before they go through.

Account fraud totals about $37 billion annually.

Source: Financial Express

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