Saturday, November 12, 2016

Govt looking into sudden spurt in Jan Dhan account deposits

Image result for demonetisation

Government is looking into sudden 'propping up' of money into zero-balance Jan Dhan accounts+ , after anunprecedented Rs 2 lakh crore of cash+ flooded the banking system within just two days of demonetisation of high value currency.



Finance minister Arun Jaitley said law enforcement agencies are keeping a hawk eye on illegal currency changers, offering to change the junked 500 and 1000 rupee notes, as well as those investing their money in gold and bullion+ to hide unaccounted wealth.



"We are getting some complaints that suddenly monies have propped up in the Jan Dhan accounts, so there is a misuse and that is why the rationing in initial days takes place," he said, adding that the departments concerned will act if anything improper is found in the deposits.



The government is focusing on ensuring that replacement of currency notes withdrawn, with new legal tender, takes place smoothly and quickly so that inconvenience to people is minimised, Jaitley said, adding "the Enforcement Directorate and revenue department are keeping a close watch".



Cautioning those indulging in illegal usage of the demonetised currency, he said authorities will not hesitate to take action against any unlawful activity.



His statement comes amid reports that the old high denomination notes had been used to buy gold or were being exchanged for a premium.



ED is scrutinising as many as 67 foreign exchange dealers and Directorate General of Central Excise Intelligence is also monitoring prominent jeweller and bullion traders.



The finance minister said India as a country should move towards plastics currency and more and more use electronic modes for transactions.



Country's largest lender State Bank of India has got Rs 47,868 crore cash deposits during the last two-and-a-half days and since SBI accounts for about 25 per cent of the banking system, the total cash mobilised by all banks put together could be around Rs 2 lakh crore, said.



In a surprise move, Prime Minister Narendra Modi had on the night of November 8 announced withdrawal of 500 and 1000 rupee notes but allowed people to deposit them in their bank accounts or exchange them with new Rs 2000 and Rs 500 notes till December 30.



To give comfort to honest taxpayers, it has said deposits of up to Rs 2.5 lakh in accounts of housewives and farmers will not be reported to Income Tax authorities.

Banknotes ban effect: Transactions via RuPay cards nearly doubled

Banknotes ban effect: Transactions via RuPay cards nearly doubled

Transactions via RuPay cards have nearly doubled as demonetization of high-denomination notes process continues. 
On November 08, PM Narendra Modi announced to ban banknotes namely Rs 500 and Rs 1000 in a move to curb blackmoney. 
National Payments Corporation of India (NPCI) on Friday said “RuPay usage on Point Of Sale (PoS) / e-Commerce was around 8 lakh transactions a day compared with a daily average of 4 lakh transactions earlier. The value of transactions almost doubled.”
A. P. Hota, MD & CEO, NPCI said, “It is heartening to witness a good number of first time users at PoS terminals. Using the PoS is even simpler than using on ATM. ”
He added, “When there are restrictions on withdrawal of cash in the aftermath of demonetisation of notes, usage of payment cards at PoS for all day-to-day purchases is the ideal way to transact.”
Further RuPay card can now also be used for booking railway tickets, bus tickets, shopping on the internet or paying bills / taxes.
So far, India has 14 lakh PoS terminals and all the terminals accept all brands of debit and credit cards.

Demonetization makes RuPay record 100 percent usage at PoS terminals

rupee.

Since the demonetization of Rs 500 and Rs 1000, the National Payments Corporation of India (NPCI) has witnessed an impressive surge in the usage of RuPay cards at Point of Sale (PoS) terminals at shops and other retail outlets. During last two days (November 9 and 10, 2016), RuPay usage on PoS/e-commerce was around 8 lakh transactions a day compared with a daily average of 4 lakh transactions earlier. The value of transactions almost doubled.
Commenting on the surge, A P Hota, MD & CEO, NPCI said, “It is heartening to witness a good number of first time users at PoS terminals. Using the PoS is even simpler than using on ATM. When there are restrictions on withdrawal of cash in the aftermath of demonetisation of notes, usage of payment cards at PoS for all day-to-day purchases is the ideal way to transact.”
Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) usage has doubled. IMPS and UPI are 24×7 remittance service. There has been a surge in the usage of RuPay cards at Point of Sale (PoS) terminals at shops and other retail outlets. RuPay – the domestic card is enabled on all three channels – ATMs, PoS and e-commerce. India has 14 lakh PoS terminals and all the terminals accept all brands of debit and credit cards.
At PoS terminals, usually the staff at the counter takes the card, swipes on the machine and hands over the PoS machine for the customer to key-in PIN for authorization. Customers are not supposed to share their debit card PIN with anyone. PIN is a secret number and customer has to cover the key pad so that no one can see the numbers being keyed-in at ATM or PoS.
It is also worth mentioning that RuPay card can be used for booking railway tickets, bus tickets, shopping on the internet or paying bills / taxes. Usage of RuPay cards at e-commerce channel has also been growing rapidly and we see good number of RuPay customers in this segment as well.

32 lakh ATM cards hacked: Is your debit card safe ?

32 lakh ATM cards hacked: Is your debit card safe, should you change PIN? Everything you need to know

If  you have a debit card and if you are in India, it is very likely that you have received a message from your bank telling you to change the PIN of your ATM card. While sending this message is a standard practice that all banks do from time to time, however, this time it is something more serious than just a word of caution. Reports say that around 3.2 million (32 lakhs) debit cards belonging to major banks have been compromised in India.


Initial reports suggest that this could be the biggest financial breach ever reported in India with State Bank of India, Axis Bank, HDFC, Yes Bank, and ICICI as the worst hit banks. It sure is worrisome considering almost everyone has a debit card these days and 32 lakh is a big number. So is your card also affected by the breach? If yes, what should be your next step, we explain everything.

How serious is this

According to the report, around 26 lakh of these cards are on Visa and Mastercard platform, while over 6 lakh are on the Rupay platform.
SBI has confirmed that it has blocked over 6 lakh debit cards in India after card network companies like NCPI, MasterCard and Visa informed the affected banks about a possible data breach. SBI also commented that the breach did not involve its own ATM machines and networks.
"We'd like to emphasise that SBI's systems have absolutely not been compromised and existing card holders are not at any risk and can continue to use their cards. SBI is in the process of issuing new cards at no cost to those card holders whose cards have been blocked. This is a cards industry incident (not only SBI)," a SBI spokesperson said.
The Reserve Bank of India has also received complaints from the affected banks. According to The Hindu, the RBI has asked the banks to replace 17.5 lakh debit cards.
Customers have been receiving cautionary messages from their respective banks asking them to change the ATM PIN. Axis Banks resorted to blocking the ATMs till the PIN was changed from the bank's ATM. Yes Bank also limited the cash withdrawal to maximum Rs 5,000 per day till the PIN was changed.
HDFC has also notified its users to change the PIN weeks before the reports of breach went public. The bank has also told its customers to not to use HDFC debit card in some other bank's ATM machine.
"Besides advising those customers who we know have used a non-HDFC Bank ATM in the recent past to change (their) ATM PIN, we are advising our customers to use only HDFC Bank ATMs as we believe security controls at some of the other bank ATMs may not be at par with HDFC Bank ATMs," a spokesperson told ET.

How did it happen

The card network companies, Visa, MasterCard and Rupay, have received complaints from banks about unauthorised card usage from locations in China.
According to reports, the breach could have generated in Hitachi Payment Services. Hitachi is one of the largest providers for Point of Sale services, ATM machines and mobile transactions in India. A malware in the Hitachi system could have compromised user data.
It is suggested that the malware was active for about six weeks before getting detected. While the banks haven't shared more information on the type or extent of the attack, the Payments Council of India has ordered a forensic audit on Indian bank servers and systems to find the origin of breach.
SBI and other banks have denied any breach in their systems, however, the possibility of system-wide breach at this early stage cannot be denied. We will (possibly) have more information in this regard in the coming days.

What should you do now

The affected banks have already started notifying their customers to either change the PIN or get a new card from the bank. If you have received such a message you need to follow the bank's instruction carefully.  
A simple PIN change will unblock your card, however, it is advisable to get a new card instead. The current batch of cards use magnetic strips, which is easier to access compared to a chip-based EMV card. The chip-based cards come with added layers of security. The RBI has asked all the banks to upgrade their debit cards to chip-based EMVs.
So here are a few pointers for safer banking:
-- Go to your own bank's ATM machine and change the PIN.
-- If your card is blocked, ask for a new card.

Wednesday, September 21, 2016

NPCI aims to corner 50% share of debit card market



 Digital payments in India are likely to create a $500 billion ecosystem by 2020, according to a report by BCG and Google released in July. Photo: Reuters

The National Payments Corporation of India (NPCI) is targeting a 50% market share in debit cards by 2018 through its RuPay network as it ties up with banks and more Indians get access to banking services.


The payment services provider is also planning to introduce new products such as an electronic toll-collection system, contactless tap-and-go cards and credit cards in the next three months to boost its share of consumer wallets.

“We are aiming for 320 million debit cards by March 2017. In a year after that, we will constitute about half of the total market,” said A.P. Hota, managing director and chief executive officer of NPCI.

At the end of July, the number of debit cards issued by Indian banks was 688.2 million. NPCI claims that 290 million, or 37%, use the RuPay card payment settlement system. The rest are serviced by Visa and Mastercard.

“When you include commercial banks and cooperative banks, there are about 1,600 banks in India. Of this, we have tied up with 700 banks already, which has helped us cover most banked customers,” Hota said.

On Monday, the company said that 46 new banks had joined its list of shareholders, taking the total to 56.

The number of debit cards issued in India has increased two-and-half times in the four years up to March 2016 with the introduction of the Jan-Dhan Yojana. However, at least 190 million cards issued under the scheme have seen very few transactions as the cardholders belonged to rural areas and lower income segments, according to a 11 March JM Financial Ltd report.

NPCI is also introducing three new products before the end of this calendar year. The first is an electronic toll-collection system likely to be launched by 31 October. This will be available across 395 toll collection plazas on national highways in its first phase. The toll plazas will have terminals that will verify vehicles on the basis of a device, which will automatically debit money from a prepaid account. State Bank of India, ICICI Bank, Axis Bank and IDFC Bank are on board to issue electronic toll-collection devices across toll plazas, said Hota.

NPCI officially launched the Unified Payments Interface (UPI) in April, allowing banks to develop applications in a way that will let customers to instantly transfer money to each other. This is widely expected to transform the payments business in India, as customers do not need to exchange bank account details to transfer money.

Another product is a contactless tap-and-go card which can be used to make small value payments, likely to be launched in November. NPCI is also looking to launch credit cards by December.
It has currently tied up with 10 banks and is looking to issue a minimum of 5 million cards initially, Hota said.

Discussions are currently on to finalize charges and other product details, he added, without disclosing the names of these banks as final agreements had not been signed.

“Digital payments are the future for us and NPCI has done quite a bit in improving the environment that supports it. It shouldn’t be longer than 18-30 months before we see explosive growth in these transactions,” said Alpesh Shah, senior partner and director at consulting firm BCG.

Digital payments in India are likely to create a $500 billion ecosystem by 2020, according to a report by BCG and Google released in July. Most of this would be due to better peer-to-peer transactions, the report had said.








Monday, July 11, 2016

RuPay credit card launch delayed further

RuPay credit card launch delayed further
RuPay, the domestic card payment service provider which was set to launch its credit card in June this year, has delayed the launch of its product. The earlier timeline for the launch was January, which was later pushed to June. However, now the National Payments Corporation of India (NPCI) has decided to shift the launch date even further.

“RuPay credit card was going to be launched in June 2016 but the launch has been further put off. The board approved date for the launch on August 28 but I think that will be a challenge. But, we will definitely launch the credit card in 2016,” said A P Hota, managing director and chief executive officer, NPCI.


Hota explained that the delay in launch is because NPCI is now working on a higher capacity financial technology infrastructure, which is taking time. “Currently, we have a switching system from Euronet. This has a capacity of 40 million transactions a day. However, the peak volume that we have processed is 14 million. But to be on a safe side, we have started work on a 100-million transaction capacity owned by FIS,” added Hota. The management believes it might take two-three years to reach the 100-million volume capacity mark.

Going ahead, within the credit card segment, NPCI will mainly be focusing on the top end segment, which is the gold or the platinum cards as they believe growth is likely to come from the higher-end variants.

RuPay is a domestic brand in the card space and is owned and developed by NPCI, and aims to compete with Visa and MasterCard that have a strong foothold in the segment. In the past year, RuPay has gained prominence as all the accounts started under the Pradhan Mantri Jan Dhan Yojana scheme have been given a RuPay card. According to the latest data, 219.3 million accounts have so far been opened and 180.1 million cards have been issued under this scheme.

Sunday, April 10, 2016

MasterCard CEO Ajay Banga calls for equal treatment with RuPay domestic card



MasterCard CEO Ajay Banga has called for equal treatment with the RuPay domestic card, particularly with regard to the government's flagship financial inclusion scheme on criteria such as security and cost advantages. "All I want is a level playing field," he said in an interview when asked about RuPay being used for the Pradhan Mantri Jan Dhan Yojana. "What I (MasterCard) can do is offer you global standards of safety and security. I don't believe any local instrument or scheme can..."
"I can bring all the expertise, manpower. You happen to have a CEO, an Indian by birth," Banga said. He said global investment sentiment on India had turned positive after the Narendra Modi government took over in 2014. "People today are talking India being a real opportunity," he said.
Much of this is because the government has sought to actively create an investor-friendly environment that eschews an aggressive tax policy, but the speed of reform needs to increase. "Retroactive taxation has single-handedly created the most angst in people's minds. So the biggest challenge is predictability and consistency of public policy," he said. "But now, while policy is clearer and more predictable, and frankly more transparent, the actual pace of implementation is choppy. The one thing we are keen on is increasing the pace of this implementation over four-five years."
What's needed is further clarity on taxes and intellectual property, besides market access. "India doesn't allow overseas law firms. It's all these ancillary services that enable an environment where investors feel comfortable to come in," he said. MasterCard has invested.`1,600 crore in India since Modi took over, he said.