Wednesday, December 25, 2013

Central Bank of India launches new mobile banking app, RuPay debit card

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The Central Bank of India, which is celebrated its 103rd Foundation day on Monday, has launched a new mobile banking application and a EMV (Europay, Mastercard, Visa) compliant 'RuPay' debit card.
Finance Minister P Chidamabaram launched the scheme, along with 103 branches and 103 ATMs of the bank, through video conferencing.

Rajeev Rishi, Chairman and Managing Director of the Bank, said the card would help traders to draw Rs. 40,000 a day or Rs. 1 lakh in case of international transactions.

The RuPay Debit Card would be accepted at all channels, including - ATMs, PoS machines, e-commerce sites, now that EMV chip and PIN cards with global acceptability have been introduced, an official of the bank said.

The EMV-compliant RuPay Debit Card is based on the Swadeshi Platform and is more secure with in-built security chip, he said.

The mobile banking application is said to be intended to promote greener and eco-friendly channels of banking, while at the same time facilitating all types of customers to avail banking services on the go.
Rishi said the bank had always been a common man's lender and chose the occasion to focus on the rural and underprivileged sector as well.

The Central Bank of India also launched a special Chola Arogya Bhima Health Insurance Policy through the Finance Minister, to provide affordable health insurance to 1.03 lakh rural families. 503 women's self-help groups were linked with the Bank's financial assistance.

R K Goyal and Animesh Chauhan, executive directors of the Central Bank, were also present at the occasion.

The finance minister also inaugurated the Central Bank's CSR activities in 103 government schools (100 in Central Bank's lead districts and three in Sivaganga District).

Growth in banking sector a great achievement: Chidambaram

Expressing happiness over the growth of the banking sector in the last ten years, Finance Minister P Chidambaram today described it as a great achievement of the UPA rule.

Participating in the '103rd Foundation Day Celebration' of the Central Bank of India here he said: "The very fact that people have accepted the growth of banking sector as a normal phenomenon is a success to me and the government."

The celebration function is being organised for the first time outside the metro cities.

He said the government had made great efforts to achieve this growth in the banking sector. "The bank officials including the executive directors, chairmen and the employees also played a major role in the expansion of the banking sector."

"Now the country is having 1,10,000 branches, and every year 7000 to 8000 branches were opened in the last nine years and this year 10,000 branches will be opened. The central bank to commemorate its 103rd foundation day has opened 103 branches today and it will open a total of 231 branches this year," he said.

Besides bank branches that had been opened, banking service also had expanded at a fast pace. ATM facility, which was available in a few localities, is now available throughout the country, he said.

"Very few thousand students got education loans ten years ago. Now lakhs of students were availing the education loan. Crores of self-help groups were availing loans. "This is how the banking service has expanded," he said.

Another outcome of expansion was provision of jobs, he said adding if ten banks were being opened this year, then thousands of persons would get bank jobs.

"The expansion benefited lakhs of people in various sectors and we are proud of that", he said.

Chidambaram said another novelty introduced by the UPA Government that benefited the public at large was the Corporate Social Responsibility Clause introduced under the new company Law. Some people opposed it initially, but they understood the benefits later and supported it, he said.

Under the CSR, a company - private or public sector - should allocate a percentage of profit for benefit of the community.

"It is a revolutionary clause. If the government has to spend money for any scheme then questions would be raised for various reasons. Now we have given freedom to the companies to spend the two per cent of the profit as they liked. They can lay a road, spend money for a school for any other common facility or provide health insurance for the poor people etc."

He said about Rs. 20,000 crore was being spent under the CSR by various companies for implementing welfare schemes for the people. "But for the new company law replacing the 60 year old law, this would not have happened," he said.

Chidambaram said it is a matter of pride that Central bank of India was founded by two Indians - Sorabji Pochkhanawala with Pherozeshah Mehta.

In fact one of the founders was working for a foreign bank, and his officer said it would not be possible for the Indians to start and run a bank. The Central Bank of India was started and run by Indians during the colonial period, he said.

To mark the 103rd foundation day of the bank, Chidambaram also inaugurated 103 ATMs besides providing assistance to 103 government schools which were provided fans, among other facilities.

He also launched the 'EMV Rupay debit card' that would enable one to draw Rs. 40,000 a day and a Health insurance scheme for 1.03 lakh poor people on payment of Rs.611 a year. Under the scheme, the bank has tied up with Chola MS General Insurance for providing medical reimbursement to the tune of Rs.30,000 in case of accidents or hospitalisation.

Tuesday, December 17, 2013

Kotak Bank launches initiative to bring Bengal milk co-ops under banking system

Mumbai-headquartered Kotak Mahindra Bank Ltd on Tuesday rolled out its financial inclusion programme across 75 milk cooperative societies of Amul in West Bengal. 

Called “Kotak Samridhi”, the initiative was rolled out across the districts of Burdwan and Hooghly.
It will see direct transfer of money to farmers' prepaid cards for their daily produce. The money transfer process will take place within the same day. 

Earlier, the payment cycle would be of three days. 

“Approximately, 8,000 farmers supplying milk to Amul through these cooperative will benefit through the programme,” Tushar Trivedi, Executive Vice President & Head Branch Banking, Kotak Mahindra Bank, said. 

According to him, Kotak has tied up with National Payment Corporation of India (NPCI) for using their RuPay platform for issuing the prepaid cards. 

Farmers need not necessarily have a bank account with Kotak Mahindra to obtain payments.
However, cooperative societies need to have accounts with the bank. 

Replicating the model
Kotak, which began the pilot project on financial inclusion here in the State in August this year, will now roll out a similar scheme for Amul in Gujarat. 

Roll out is expected to happen in two months time (around February). 

Over three lakh dairy farmers across 1,200 cooperative societies in the State will be part of the programme. 

“In Gujarat, roll out will happen in a phased manner,” Trivedi said. 

Kotak is also talking to other cooperative societies in Haryana and Punjab for extending the roll out to wheat and paddy. 

Talks are, however, in a nascent stage.

Friday, November 22, 2013

PayUPaisa Launches Release On Delivery (RoD) For E-Commerce Customers

PayU India’s online payment solution PayUPaisa has launched a new payment option called Release On Delivery (RoD) using which customers can release the payment for the product purchased online after receiving the product.

The company states that this option has been launched with the intent of  helping customers gain more trust on the merchants, while also helping merchants reduce the high transaction cost incurred through third-party Cash on Delivery (CoD) services. PayUPaisa claims that  the average cost per CoD transaction borne by a merchant is as high as 8% to 10% as compared to an online transaction which costs 2% to 2.5%. Therefore CoD continues to be a challenge although it constitutes 60% of the transactions done through e-commerce sites such as Myntra and FashionAndYou. It is worth noting that most e-commerce sites except Amazon have a minimum order value to provide CoD for transactions. Flipkart has limited the transaction value of CoD in Uttar Pradesh to Rs 10,000.

How does it work? During check-out, customers are shown multiple payment options such as credit card, debit card, netbanking or CoD to choose from.  On selecting CoD, RoD payment option is also offered to customers. On selecting RoD, payment can be made through credit card, debit card or netbanking. PayUPaisa releases the payment to the merchant either on receiving information from the buyer or by default after 3 days of product delivery.

RoD payupaisa

It is also worth noting that eBay already has a similar feature known as PaisaPay available on its website for its buyers and sellers to transact. However, on eBay, sellers are paid only during the next payment cycle and are charged at 4.5% + applicable taxes for processing the payment.

Launched in April 2013, PayUPaisa claims to offer free hosted web stores with services like email invoicing, easy website integration and free payment gateway, among others. In July 2013, the company had waived off its transaction discount charges (TDR) for both new and existing merchants until September 30, 2013. In September 2013, it had also launched an automated all-in-one-payment solution targeting e-commerce marketplaces and aggregators that operate in different segments like travel, real estate and collect fees or payments.

Other developments

In July 2013, e-commerce major Flipkart had launched its own online payment solution PayZippy. The company had also applied for a license to launch a a semi-closed prepaid wallet for consumers.
In June 2013, National Payments Corporation of India had launched an e-commerce solution called ‘RuPay PaySecure’. NPCI had partnered with an US-based online payment service provider Acculynk for this initiative.

TLabs incubated VA Tech Ventures Pvt Ltd. had also launched its operator agnostic prepaid mobile wallet, Happay that syncs with mobile number and SIM card to allow P2P and B2C transactions.
In February 2013, CCAvenue had also launched a free package for e-commerce websites that intend to use CC Avenue as their payment gateway. Few months later, it had also introduced an in-stream payment collection service for social networking websites called Social Networks In-stream Payments (SNIP).

Monday, November 11, 2013

Kangra Bank, Delhi on growth path with Rupay Card

The Kangra Co-operative Bank Limited, the largest Co-operative Bank of the NCTD , Delhi, held its 45th Annual General Body Meeting at FICCI Auditorium, New Delhi recently. Addressing the meeting the Chairman of the Bank Shri Laxmi Dass , who is also chairman of the Delhi Urban Co-operative Banks Federation , elucidated the growth of bank over the previous year.

Addressing the members at this occasion, Mr Dass said that the bank has shown remarkable progress compared to the average growth of banking industry. The bank continues to maintain the distinction of paying 18% dividend , the highest rate permitted as per DCS Rules -2007 , for the past 5 years and less than 1 % net NPA level for the past so many years.

Laxmi Dass said that the RBI has acceded to the request of the bank to open 2 more branches – With the opening of proposed branches, the bank’s branch network is expected to increase to 9 from the present 7 branches. The Kangra Bank would perhaps soon become the first coop urban bank in Delhi to launch ‘RuPay” ATM cards which would enable the customers to do their transactions from more than 1,00,000 ATMs of all the banks across the country.

The bank has already offering funds remittance facility through its own RTGS and NEFT system by which customers are able to transfer funds to any account/bank across country . The Bank has been awarded four times the ‘Best Cooperative Bank ‘ award by the office of RCS and Delhi State Cooperative Union. National Cooperative Union of India (NCUI) has also awarded the Bank for its outstanding performance at its 16th Indian Cooperative Congress held on June 25 & 26 , 2013.

Mr. A C Parmar , Managing Director & CEO of the Bank informed that in addition to this, RBI has granted permission for appointment of BCs/ BFs of the bank . Tender Notice for inviting best competitive offers from OEMs/ Authorised Agents / Eligible Bidders for installation of ATM Machines , appointment of BCs/BFs and providing of EFT Switch Services on shared basis has already been floated and process of selecting the right Vendors/ Parties would be completed by the Technology Development Committee of the bank very soon. He further said that ECS and SMS alert services have also been made available to the customers.
Parmar clarified that the RuPay ATM cards to be issued by the Bank to its customers can also be used as Debit Cards by which customers would be able to make payment for purchases made by them at merchant establishments anywhere in the country.

The Kangra Bank has also been discharging its Corporate Social Responsibility in a befitting manner . Shri B R Sharma , Ex-MD and present Chief Advisor & Professional Director of the Bank informed that the bank has been giving death grant to the family members of the deceased member of the Bank for the last 15 years which has now been increased to Rs.25,000/- w.e.f. 01.01.2014 .

Apart from this the bank has been giving one time cash scholarships and meritorious awards with certificate to the children of members and staff if he/she obtains 90% and above marks in the Board Examinations of 10th and 12th classes. The amount of meritorious award is Rs.3100/-for 10th class and Rs.5100/- for 12th class.
Shri Sharma further informed that the bank has also been paying monthly scholarship amount ranging from Rs.150/- p.m to Rs.250/-p.m. to the child of member / staff who have obtained 71% and above marks in 8th ,9th,10th and 11th classes . He said that the Bank has strong belief that recognition of brilliant students would definitely encourage them to play significant role in shaping the future of our country.

Mr Dass informed that the Bank has registered significant increase in the following segments.

20.26% in deposits
9.85% in loans and advances
13.41% in Income
8.24% in share money and general reserves
1.84% in membership strength
6.70% in Customers strength
7.68% in net worth of the Bank which is 47.58 crore as on 31.03.13

Tuesday, November 5, 2013

Rural banks asked to promote Rupay cards

The National Payments Corporation of India (NPCI) has pressed the Regional Rural Banks (RRBs) to promote RuPay cards to facilitate electronic payments and transactions among the people living in the remote rural parts.

A team of NPCI, the Central organisation mandated by RBI and Indian Banks Association (IBA) to build central infrastructure for payment systems like ATM switching, mobile payments, 24x7 remittance and financial inclusion transactions, visited Nuapada district and advised Utkal Gramin Bank to issue RuPay cards to their customers on a priority basis.

RuPay has been developed as an alternative to international payment gateways like VISA and Mastercard, providing lower costs and affordability along with protection of payment information related to Indian consumers.

It acts as a domestic open-loop system allowing Indian banks and financial institutions to participate in electronic payments, assistant manager, NPCI, Deepak Satpathy said.

Brand play in cards business - Rupay Card

While Visa and Mastercard slug it out for leadership, analysts say RuPay has the potential to cause disruption and eat into their market share.

Conventional wisdom says customers in India couldn't care less whether they have a Visa, Mastercard, or RuPay in their wallets as credit and debit cards are known more by the issuing banks than the card company. But the three big card brands obviously think otherwise.

While Visa continues to be the larger player in terms of market share, MasterCard is slowly, but surely, bridging the gap by offering additional features on the card.

So how do customers choose between a Visa or MasterCard? According to Nitish Asthana, Executive Director, First Data, ICICI Merchant Services, the affinity of the customer to the issuing bank plays an important role along with the credit limit, simplified applications process, offers, rewards and the reputation of service.

"Visa and MasterCard are well entrenched brands and widely accepted across all merchant outlets and e-commerce websites," he says.

Akhilesh Tuteja, partner and national head, IT Advisory, KPMG India says that both Mastercard and Visa enjoy similar brand value, though Visa is perceived to be a more popular brand than Mastercard because Visa has an aggressive marketing strategy and is seen more often.

"To the end customer, it does not matter whether they hold a Visa card or one from Mastercard because both are accepted at most and similar merchant establishments. Offers and reward points are the other important features of a card. However, these are mostly bank initiated and rarely payment gateway initiated," he says.

Visa is the first card that banks always start their card business with, says Uttam Nayak, Group Country Manager for India and South Asia, Visa. "We are leaders because from a bank's perspective our products are simple and easy to use. Our implementation and execution is robust and we have a developed a template for launches. We know what kind of operating process and IT infrastructure is required, how to write a policy document and our cards are easy to test at POS and ATMs", Nayak says.

If Visa was the first to offer Aadhar as an identity solution for e-KYC, MasterCard is not too far behind and is in the process of launching its own Aadhar linked solution, says Ari Sarker, Division President, South Asia. The gap between Visa and MasterCard is narrowing, he insists.

His claim is borne out by Hari Shenoy, Digital Marketing, brand-comm, who says, Visa leads as far as size is concerned, whilst MasterCard is reportedly accepted in more countries. Visa's network used to be larger previously, but now MasterCard's network is on par. When compared to advantages that a brand like Visa could have, it is increasingly getting narrowed.

"Increasingly, cards tailored for certain lifestyles attract consumers from that segment- eg, Airline co-branded cards that offer better travel rewards, shopping affinity cards, etc. Premium and platinum cards are on the rise," says Asthana of First Data.

Recognizing this, Visa has associations with Olympics and FIFA globally, since these bodies symbolise highest quality of skill sets, points out Nayak. In local markets, the association is with local properties. For instance, in India, Visa tied up with Sachin Tendulkar, way back in 1996.

"From a consumer's perspective, we have tie-ups that are relevant to them. The tie-up with Cafe Coffee Day to offer discounts at airport lounges for Infinite card holders and 10 per cent cash back for frequent flyers are some instance of this. Currently we are working on a platform for bill payments because people have to pay bills," Nayak says.

MasterCard is working on a contact-less card and a pilot project is expected to be launched late this year or early next year, Sarker says.

Apart from convenience and tie-ups, security is another area of concern for customers while choosing the card and both players are aware of this. Both of them offer the 'Zero-liability feature' in their cards, where in if the card is stolen or misplaced, the cardholder is not liable to pay for any transaction made on the card. "We realise that fraud is a big concern and we put customer at the centre of everything," Visa's Nayak says.
Another feature that Visa has introduced is Visa Risk Manager, which was introduced in 2011. This identifies a transaction that is not typical of the customers' transaction and blocks it. On its part, MasterCard has a similar feature, called MasterCard inControl. The technology allows cardholders to determine how, when and where a card may be used. Issuers can deliver real time information to cardholders and establish controls.

According to KPMG's Tuteja, Visa scores on dispute resolution because the process smoother. This also shows that Visa has made better investments in their back-end support system than Mastercard.
Queering the pitch for them could be RuPay, which has recently entered the e-commerce space and is part of the payment gateway options, making analysts bullish on its prospects. Shenoy agrees that RuPay has the potential to cause disruption and eat into Visa and MasterCard's market share. "Many nationalised banks, cooperative banks and a few private banks are part of the RuPay network. It has a lower transaction fees that will benefit banks as well", he says.

Loyalty programs will be key and will drive stickiness to merchants and banks alike. Customers are expected to seek value on the transaction experience, with features such as secure wallet and time of the transaction on the internet gaining more prominence in the decision.

SLUGGING IT OUT

Mastercard
• Plans a contact-less card, where you can tap and pay
• Will launch MasterCard inControl with cap on expenses
• Offers zero-liability feature in which transactions made through PoS will be covered

Visa
• Offers zero-liability feature
• Offers Visa Risk Manager -identifies transaction(s) that is not typical of a customer and blocks it
• Working on a platform for utility bill payments

Wednesday, October 23, 2013

Insurance cover coming for online fraud - Rupay Card


Both Visa and MasterCard offer this feature. RuPay cards by NPCI will also start offering this by the end of this year or early January,

With the rise in cases of online fraud, National Payments Corporation of India (NPCI) has decided to provide an insurance cover for such transactions.

NPCI will tie up with general insurance companies for this; it has called for a Request For Proposal (RFP). This would cover both domestic and international transactions, all those done by swiping a card, PIN-based transactions on ATMs or points of sale and e-commerce transactions with two-step authentication.

According to the Kaspersky Consumer Security Risks Survey, a global study conducted by B2B International and Kaspersky Lab in the summer of 2013, about 41 per cent of users who lost their money as the result of financial cyber-fraud failed to get a single cent returned to them. And, only 45 per cent of users who suffered through online fraud were fully compensated. In 17 per cent of cases the money disappeared during e-banking sessions; 13 per cent of the victims were customers of online stores.

“Technology is changing the fraud landscape and challenging the boundaries of fraud risk management. The (earlier) frameworks to mitigate simple frauds are no longer effective,” Rohit Mahajan, partner and co-head, forensic services, at KPMG in India, had said while issuing an India Fraud Survey last year.

The NPCI insurance cover will be over and above any policy taken by a member-bank. The policy will cover compromised and disputed transactions carried on the National Financial Switch (which facilitates inter-bank ATM transactions) ATM Network. It will also cover disputed transactions on the NFS Network. The RFP issued by NPCI is to identify and appoint the general insurer for providing insurance cover for fraudulent transactions that result in financial loss to the customers of NFS members or sub-members; also for non-bank ATM operators.

“This is a good opportunity for the insurance community. We will be interested in taking part in the bidding process, since it is a large and prestigious contract,” said a senior official of a state-owned general insurance company.

NPCI will initially cover Rs 180 crore of approved financial transactions under the insurance policy with the selected bidder. If the transaction volume goes beyond the initial committed volume of Rs 180 crore, NPCI shall request an additional cover.

The overall insurance cover that will be provided will be Rs 10 crore and the per-card cover will be Rs 50,000. The insurer (which wins the bid) will have to settle claims within 30 days of claim submission by NPCI. Further, the bidder will also have to honour the request from any member-bank(s) for any additional cover sought, once the policy is issued to NPCI and is in force. The premiums will be paid by NPCI.

To be eligible for the bid, an insurance company should have a minimum of three years of operations in general insurance in India as on March 31. Also, a minimum gross direct premium income of Rs 250 crore for 2011-12 and 2012-13, respectively. The non-life insurer is also required to have a minimum claim settlement ratio of 75 per cent in the past three financial years and not be currently blacklisted by NPCI, any government body or financial institution in India. All this would mean only the large private general insurers and the four state-owned general insurance companies will be eligible.

In case of a disputed transaction using a debit/credit card, it is the customer's responsibility to prove he is not at fault. Till then, they are liable to pay for the transaction. As a protection against this, one can opt for credit or debit cards which have the zero-liability feature. Both Visa and MasterCard offer this feature. RuPay cards by NPCI will also start offering this by the end of this year or early January, said an official.

Monday, October 21, 2013

Banks yet to cut debit card fee at fuel pumps - Rupay Card

A year after the Reserve Bank of India (RBI) announced a cut in charges on debit card transactions, banks continue to impose a fee of 2.5% for payments at petrol pumps, thereby making an undue gain at the cost of the consumer. Earlier this month, large banks thwarted an attempt by the RBI-promoted National Payments Corporation of India (NPCI) from capping charges on debit cards that are part of NPCI's Rupay network.

Last year, RBI asked banks to cap the charges on debit card transactions at 0.75% for transaction values up to Rs 2,000 and 1% for larger transactions. But in debit card transactions at petrol pumps, banks continue to impose a 2.5% surcharge, which are mostly passed on to the consumer.

Sources said that NPCI had sent a communication to banks asking them not to charge more than 1% on its Rupay cards. Rupay cards were introduced by NPCI as India's answer to MasterCard and Visa. Sources said that the move has been stymied by banks who have called for more discussion on the issue.





The 2.5% surcharge has its origins in the days when credit cards were in their infancy and debit cards non-existent. Typically, when a bank installs a credit card swipe machine at a retail outlet, its agreement with the merchant bars any kind of surcharge being passed on to the customer.

But in the case of petrol pumps and Indian Railways, an exception was made allowing them to pass on the charges (described by banks as 'merchant discount rate'), to the customer. The exception was made to end an impasse where these government entities were refusing cards on the grounds that their margins were too low to absorb the credit card charges of 2.5%.

RBI, while slashing charges on debit cards, had used the rationale that the transaction cost of credit and debit card should not be identical. This was because credit card transactions required the bank to provide free credit to the customer until the monthly bill was issued. The bank also took on the risk of the customer defaulting on his obligations.

In debit cards, the money goes straight out of the customer's bank account and the only expenses are on account of using the network and in respect of security of transaction. In the West, regulators have already started capping charges on debit card transactions.

Bankers say that a huge transformation is taking place in payments as debit card transactions are set to outstrip payments by credit cards in coming years. In July 2013, banks saw 4.23 crore credit card transactions as against 5.24 crore debit card transactions. In value terms, however, credit card transactions continue to be higher at Rs 11,038 crore as against Rs 7,722 crore under debit. With the focus now on financial inclusion, the number of debit cards and set to go even higher.
 

Zero-liability cards are useful - Rupay Cards

The sheer fear of loss of a credit or debit card can give ulcers to most. Besides the monetary liability, it involves running from pillar to post to get the card blocked.

In case of a disputed transaction, it is the customer's responsibility to prove it is not his fault. Till then, he is liable to pay for the transaction. Eventually, if the customer is able to prove he is not at fault, the bank will refund the amount, but this could take time. To protect yourself against this, you can opt for credit or debit cards which have the zero-liability feature. Both Visa and MasterCard offer this feature. RuPay will start offering this by the end of this year or early January, said an official from National Payments Corporation of India. But unless your card issuing bank offers this facility, you cannot avail of it. Banks have to incur an additional cost for the insurance to cover the liability in case of a loss of card, which pushes up their cost, which is why not all banks offer it, while some offer it on select cards.

The advantage of this is that once the card is reported stolen or lost, the cardholder is not liable to pay for any transaction made on the card. In case of a debit card, the amount transacted will be restored to the cardholder's account.

While this is a given in some parts of the world, in India banks offer it selectively, says Uttam Nayak, group country manager for India and south Asia, Visa. The card company introduced this feature in India in 2004. There is no additional fee that the customer pays for this. “We realised that fraud was a big concern for customers,” he says.

ICICI Bank, HDFC Bank, Axis Bank and Standard Chartered Bank do offer this. But cardholders need to keep in mind the feature will not work in case of an automated teller machine or online transactions, since this requires the use of the PIN. It will work only if the card is used to swipe at a point of sales, at a shop or a merchant establishment.

Some banks may ask you for a written application with your card number, account number (in case of debit card) and date of loss of card; copy of the police complaint and copy of passport in case of a fraud abroad. While some banks insist the theft or loss should be reported within 24 hours for the facility to kick in, some allow up to 15 days.

While zero-liability as a policy is in countries like the US, in India it is not so. The Reserve Bank of India has indicated it would like to introduce a system whereby the customer would not be held liable in case of fraud transactions. But there has been no further guideline or further instruction from the regulator.

Saturday, October 19, 2013

Banks yet to cut debit card fee at fuel pumps - Rupay Card News

A year after the Reserve Bank of India (RBI) announced a cut in charges on debit card transactions, banks continue to impose a fee of 2.5% for payments at petrol pumps, thereby making an undue gain at the cost of the consumer. Earlier this month, large banks thwarted an attempt by the RBI-promoted National Payments Corporation of India (NPCI) from capping charges on debit cards that are part of NPCI's Rupay network.

Last year, RBI asked banks to cap the charges on debit card transactions at 0.75% for transaction values up to Rs 2,000 and 1% for larger transactions. But in debit card transactions at petrol pumps, banks continue to impose a 2.5% surcharge, which are mostly passed on to the consumer.

Sources said that NPCI had sent a communication to banks asking them not to charge more than 1% on its Rupay cards. Rupay cards were introduced by NPCI as India's answer to MasterCard and Visa. Sources said that the move has been stymied by banks who have called for more discussion on the issue.






 
The 2.5% surcharge has its origins in the days when credit cards were in their infancy and debit cards non-existent. Typically, when a bank installs a credit card swipe machine at a retail outlet, its agreement with the merchant bars any kind of surcharge being passed on to the customer.

But in the case of petrol pumps and Indian Railways, an exception was made allowing them to pass on the charges (described by banks as 'merchant discount rate'), to the customer. The exception was made to end an impasse where these government entities were refusing cards on the grounds that their margins were too low to absorb the credit card charges of 2.5%.

RBI, while slashing charges on debit cards, had used the rationale that the transaction cost of credit and debit card should not be identical. This was because credit card transactions required the bank to provide free credit to the customer until the monthly bill was issued. The bank also took on the risk of the customer defaulting on his obligations.

In debit cards, the money goes straight out of the customer's bank account and the only expenses are on account of using the network and in respect of security of transaction. In the West, regulators have already started capping charges on debit card transactions.

Bankers say that a huge transformation is taking place in payments as debit card transactions are set to outstrip payments by credit cards in coming years. In July 2013, banks saw 4.23 crore credit card transactions as against 5.24 crore debit card transactions. In value terms, however, credit card transactions continue to be higher at Rs 11,038 crore as against Rs 7,722 crore under debit. With the focus now on financial inclusion, the number of debit cards and set to go even higher.

Tuesday, October 8, 2013

Punjab government plans to pay farmers directly using Rupay Cards

With paddy arrivals yet to pick up across Punjab, the state government now plans to make direct payments to farmers. The move is aimed to protect farmer's interest particularly the small and marginal from being exploited by the commission agents/arthiyas.

The issue of direct procurement and payment to farmers had been delayed for several years with both the Congress ruled and Akali-BJP government not keen to upset the strong lobby of arthiyas. Even with the new system the arthiyas would still continue to handle the grain and get 2.5% commission from the state government.

The government is also expecting a few progressive farmers only to register to the market committee for direct payments this season. Apart from Punjab, Haryana and parts of Rajasthan, government procurement agencies across the country make direct payment to farmers through cheques and also electronically.
"This paddy season we have started the system where we are giving direct payments to farmers," said Punjab Food Minister Adesh Partap Singh Kairon. Over 13.5 million tonne of paddy will be procured by government agencies worth Rs 18,000 crore.

A government official while giving details said that as on date 679 farmers had registered with the mandi board to avail direct payments. "A farmer can register with the market committee in their area, who will provide them a number to be submitted to 14 approved banks. The banks where the farmer should have an account will issue farmers the 'RuPay' card," said the official.

As per the Punjab government, there are 12 lakh farmers in the state with over 25,000 registered arthiyas/commission agents. For years, central and state agencies procuring wheat and paddy, have been issuing cheques to firms operated by arhtiyas for onward payment to farmers. The Food Corporation of India (FCI) has been proposing to directly procure and make payments to farmers.

It had earlier made few attempts in 2010 and 2011, but had to withdraw it in few days. PP Singh, director procurement, FCI said that a farmer must get price for his produce and it should be though account pay checque or by e-mode so that agencies were able to establish a trail of payments.

"A weak system leads to distress sale and farmer needs to be protected from arthiyas," he said. Farmer union leaders say that the proposal has recently been announced and not many farmers would be able to avail the scheme. "We will make sure it is a success during the wheat procurement season," said Ajmer Singh Lakhowal, president of the Punjab unit of Bharti Kisan Union and chairman of the Punjab Mandi Board.







Lakhowal said that slowly they would push government or agencies like FCI to directly procure grains from farmers. "Initially we expect progressive farmers to register followed by others. The farmers will not have to wait for arthiyas to give payments which lag from 15 days to few months. Nor will the arthiya be able to cut payment of farmers," he said.

Chairman of the Bharat Krishak Samaj (an association representing farmers interest), Ajay Vir Jakhar said that the success of the direct payments would take few seasons. "Farmers have to be persuaded to have bank accounts and even educated on the benefits of electronic transfers," he said.

Friday, October 4, 2013

Vijaya Bank - Rupay KC FI Guidelines

Rupay KC FI Guidelines  


Guidelines for ATM enabled Kisan Debit Card
  1. The ATM enabled Kisan Debit card is issued to the customers having Vijaya Kisan Card account at your branch (CBS) and is linked to VKC account of the customer.
  2. The ATM enabled Kisan Debit Card  is specially designed non photo card launched in association with Rupay a Domestic payment branch promoted by NPCI
  3. The card is issued free of charge and is valid for 10 years
  4. The cardholder can withdraw cash from all the ATMs of our bank and other bank’s Rupay Branded ATMs.
  5. The Kisan Debit card also can be used at merchants for the purchase of items required for agriculture activity only*.   To restrict the use of Kisan Debit card for agriculture purpose, an undertaking letter is to be obtained from the VKC customer applying for Kisan Card. A Performa of the undertaking letter is enclosed herewith.
  6. The existing limits of Debit Card for cash withdrawal at ATMs ,Merchant transactions and number of financial transactions are applicable in case of Kisan Debit card also subject to not exceeding the drawing power/seasonal sub limits fixed for VKC a/c of the cardholder. 
ATM cash withdrawal limit per day
Rs 30,000/-
Merchant transaction limit per day
Rs 25,000/-
No of transactions per day (financial)
10
  • The drawing power for the Kisan card account will have to be fixed by the branch depending upon the crops cultivated, area under cultivation and scale of finance. The guidelines for opening and maintaining drawing power on Kisan Card account has been framed by the HO – credit priority by way of circulars has to be complied with.
CHARGES/FEES
Card Fee
Fresh card issuance
Free
Hotlisting of the card
Rs 50/-
Card replacement
Rs 100/-
PIN regeneration
Rs 25/- per request
Cancellation charges (Applicable if cancelled in the   first card year)
Rs 100/-  
 *Applicable S. T Extra

Transaction charges
Vijaya Bank’s ATM cash withdrawal & balance Enquiry/mini statement/ PIN change
Free
Other bank’s Rupay  ATMs*   
Cash
Balance Enquiry

Rs  20/- per transaction
Rs    8/- per enquiry

  • Applicable S. T Extra. (Since the Accounts are treated as Current Accounts in
Nature, no exemption from charges is eligible for kisan debit cards for using other bank ATMs.)
Other Charges
Charges for request for copy of chargeslip  *
  • for transactions at our merchants
  • for transactions at other banks merchants

Rs 100/-
Actuals with a minimum of Rs 100/-

    *Initially Rupay cards are enabled for ATM Usage only till a separate communication on enabling the card for POS transactions is issued.
                                                                                                         
PROCEDURE FOR ISSUE OF KISAN DEBIT CARD
  • For the issue of ATM enabled Kisan Debit card, an application is to be obtained from the VKC customer. The existing Debit card application.  may be used for this purpose. In the Debit Card application ‘Application for Vijaya Global Debit cum ATM card’ may be modified as ‘Application for Kisan Debit Card’, with due authentication from the customer. The original application obtained should be retained with the branch only.
  • For sending the data to Debit Card Cell, the same procedure as applicable in case of Debit Card is to be followed. Since Rupay Kisan Debit card is a non -photo card, branches has  to mark Y in freetext6 field of the VKC A/c of the applicant.
  •  As in the case of Debit Cards, the Kisan cards will be sent to the branch & & PIN mailers to customer address through separate couriers.
  • As soon as the Kisan Card & PIN mailers are received at the branch, the same have to be entered in the Debit Card & PIN Mailer Issued Register. Some pages of the existing Register may be used for Kisan Cards. 
  • Before delivery of Kisan Card to the customer, the card is to be activated by marking E (replacing Y) in the VKC a/c of the customer and authorizing the same.
  • Since the ATM enabled Kisan Debit Cards are issued with Debit Card PIN, the rules and regulations on Debit Card are applicable to Rupay Kisan Card also. The guidelines on issuance of debit cards as per HOC 29/2008 dated September 2, 2005 and 35/2006 dated February 20, 2006 as applicable to Kisan card should be strictly complied with. 
Dispute Resolution
As the transactions are debited ONLINE, any dispute relating to a transaction should be reported by the cardholder in writing to the branch/Credit Card Division, HO, and Bangalore within 30 days from the date of transaction. Terms of HOC 263/2011 will be prevailing on handling the disputes received at the branches in this regard.

Uttarbanga Kshetriya Gramin Bank - RuPay Debit Card Details

RuPay Debit Card

We are pleased to introduce you Uttarbanga Kshetriya Gramin Bank RuPay Debit Card which provides you anywhere, anytime banking facilities. Having this card in your wallet is like carrying your bank account with you wherever you go. This card comes with enhanced security feature as it is a PIN based card i.e. PIN is mandatory in order to perform transactions* at Merchant Establishment (POS) and ATMs.

Your Uttarbanga Kshetriya Gramin Bank RuPay Debit card entitles you:
  • Rs. 40000.00 daily ATM cash withdrawal limit
  • Uttarbanga Kshetriya Gramin Bank RuPay Debit card enables you to access over 2000+ Central Bank / Uttarbanga Kshetriya Gramin Bank ATMs spread across the country. You can also use your Uttarbanga Kshetriya Gramin Bank RuPay Debit card at 1,00,000+ ATMs under NFS network in India. Presently, this card can be used at select Merchant Establishments (POS) displaying RuPay logo.
  • 24-Hour Customer Service: You can contact our Toll Free No. 18002001911/1800221622 round the clock for any assistance regarding your Uttarbanga Kshetriya Gramin Bank RuPay Debit card.
 * Transactions at Merchant Establishments have not started yet.

On receipt of your card, please:
  • Sign on the signature panel at the back of your card to prevent any misuse of the card
Fees and charges*:
  • Issuance Fee: NIL
  • Annual Fees: NIL
  • Duplicate card on account of loss of card: Rs. 200.00
  • Card Replacement fee: Rs. 200.00
  • PIN Replacement fee: Rs. 50.00
  • Hot-listing of card fee: NIL
  • Transaction charges at Uttarbanga Kshetriya Gramin Bank/Central Bank of India ATMs: NIL
  • 5 transactions (Financial & Non-financial together) free on other bank ATMs for Savings Bank account holders, in a calendar month. 6th transaction onwards a flat charge of Rs. 18.00 (inclusive of service tax) will be levied to customer’s account.
* All fees and charges are inclusive of service tax.

Eligibility criteria: (Please choose from the below list or add more eligibility points)

The eligibility criteria for RuPay Debit card is:
  • Literate Individual Account holders having their A/Cs (Only SB, OD and NF A/Cs) with us. 
Debit Cards cannot be issued under following conditions:
  • Account types with operating instruction other than of “self”, “Either or Survivor” or “Sole Proprietor”
  • Visually impaired persons holding account jointly.
Added features on RuPay Debit card: (Please choose from the below list or add more features)

  • Loss or Damage of the card: In case of loss or damage of the card, please inform the branch as well on the Toll-free No. 18002001911/1800221622 immediately so that the card will be blocked to ensure safety of your funds.

IMPS – Interbank Mobile Payment Service

1. What is IMPS?
Interbank Mobile Payment Service (IMPS) is an instant interbank electronic fund transfer service through mobile phones. IMPS facilitate customers to use mobile instruments as a channel for accessing their banks accounts and remitting funds therefrom.

2. Presently, how are interbank fund transfers made using mobile phone?
Various banks are providing remittance facility through their mobile banking platforms. The interbank remittance request initiated from a mobile is processed by the beneficiary bank as a National Electronic Fund Transfer (NEFT) transaction. The status of such payment request is therefore not known instantly because NEFT payments are processed in batches from 9 am to 7 pm. The NEFT transactions are charged by banks and charges vary from bank to bank

3. Does the customer need to have a bank account for availing IMPS?
Yes, the customer needs to have a bank account with the bank which has enabled this facility.

4. Does the customer need to register to remit the funds through IMPS?
Yes. Customer should enroll for Mobile Banking Service with the bank where customer has an account. The registration process shall be as per their bank’s laid down procedures.

5. Is the beneficiary customer also required to register for IMPS?
The beneficiary customer should have their mobile numbers registered with the bank where he/she maintain the account and where he intends to receive the credit and should have a valid MMID provided by the bank. No need to specifically enroll for Mobile Banking Service of the bank.

6. What beneficiary details does the customer need to affect an IMPS remittance?
The beneficiary details required are:
a. Beneficiary’s mobile number
b. MMID of the beneficiary customer

7. What is MMID?
Mobile Money Identifier (MMID) is a seven digit random number issued by the bank upon registration. Remitter (customer who wants to send money) and Beneficiary (customer who wants to receive the money) should have this MMID for doing this interbank funds transfer.

8. Can a customer link more than one account to the same mobile number?
Yes. The customer can link the same mobile number to more than one account subject to bank offering that feasibility.

9. Incase if the customer has more than one account linked to his / her mobile number how does he select the account from which he / she intends to pay?
The bank will allocate a Mobile Money Identifier (MMID) for each account of the mobile banking customers. The customer can select the account using this MMID allocated to him / her.
The combination of mobile number and MMID helps as a mistake proofing step for the remitter and tries to mitigate the risk of wrong credit incase the remitter enters erroneous mobile number.

10. What is the Process flow of IMPS?
Step 1: Remitter sends instruction from his/her mobile through his/her bank provided application or SMS.
Step 2: Remitting bank validates the details of the remitter and debits his/ her account. This transaction is sent by the remitting bank to NPCI.
Step 3: Transaction is passed by NPCI to the beneficiary bank. Beneficiary Bank validates the details of the beneficiary customer, credits the account, sends confirmation NPCI about transaction status and sends a SMS to the beneficiary customer informing him of the credit.
Step 4: NPCI sends the transaction status to remitting bank which in turn informs the status of the transaction to the Remitter.
Step 5: Remitting bank send a SMS confirmation of the transaction to the remitting customer.

11. Is there any limit on the value of transactions in IMPS?
The limit is defined by RBI in the Mobile Payment Guidelines issued to banks. The customer can transact on IMPS subject to a daily cap of ` 50,000/- per customer overall for transactions through mobile for the funds transfer. Transactions up to `5000/- (RBI Circular No. RBI/2010-11/511 DPSS.CO.No.2502 /02.23.02/ 2010-11) can be facilitated by banks without end-to-end encryption.


12. Does the customer require a mobile handset of a particular model or make or features to enable this service?
It depends on the bank’s mobile banking interface requirements. This varies from bank to bank. The details can be obtained by the respective banks.

13. What can a customer does in case he / she is not able to install the mobile banking application on his mobile handset?
In case the customer is not able to install the mobile banking application on the mobile handset or the application is not functioning as desired, the customer may need to update the software on the mobile handset and re-install the mobile banking application on the same. If the problem is not resolved, the customer should then contact the helpdesk of the bank whose mobile banking facility the customer intends to use.

14. Can we withdraw and / or deposit money using IMPS?
Presently, the customers cannot withdraw and / or deposit money using IMPS.

15. What if IMPS registered mobile is lost or misplaced? Will anyone who comes into possession of mobile be able to make a remittance from customer’s account?
At the time of mobile banking registration, bank would provide the customer with a User id and MPIN (Mobile Personal Identification Number) for accessing the mobile banking facility. An IMPS remittance will not be possible without these two inputs.

16. What happens in case the remitter enters a wrong beneficiary mobile number for remittance?
The beneficiary details required for making a remittance are mobile number and MMID. The transaction will get declined in case anyone of these two numbers is erroneous and transaction gets reversed instantly.

17. What are the timings for initiating and receiving IMPS remittances?
IMPS transactions can be sent and received at any time and any day. There are no timing or holiday restrictions on IMPS remittances.

18. If the transaction is not completed will the customer get his / her money back? When?
Yes. In case for any reason, technical or business, the IMPS transaction is not completed the reversal of the remitters funds will happen immediately. In case if such a transaction becomes a subject to reconciliation wherein the status of transaction is not determined immediately, the reversal of funds will happen on the next working day.

19. What are the charges for the customer for sending and receiving remittances using IMPS?
The charges for remittance through IMPS are decided by the individual banks. Please contact your bank for the details.

20. Are there any subscription charges for the customers to avail this facility?
The charges for remittance through IMPS are decided by the individual banks.

21. How long does it take for the remittance to get credited into the beneficiary account number?
The funds should be credited into the beneficiary account within 30 seconds after initiated the transaction.

22. Can the remitter transfer funds from his / her to the beneficiary account in other bank?
Yes, the remitting customer can transfer funds to the beneficiary account in other IMPS member banks. The list of banks offering IMPS is available on website http://www.npci.org.in/bankmember.aspx

23. Is it necessary to have sufficient account balance to initiate a remittance?
Yes, the customer should have sufficient account balance to initiate a fund transfer.

24. Is it necessary to have a minimum balance to receive funds through IMPS?
This will be decided by the beneficiary bank.

25. How does the remitter come to know that his account is debited and funds have been credited in the beneficiary’s account?
The remitting bank sends a confirmation SMS to the remitting customer about the transaction initiated by him / her.

26. How does a beneficiary come to know of funds being credited to his / her banks account?
The beneficiary bank sends a confirmation SMS to the beneficiary customer informing him / her of the credit in the account.

27. Can a customer remit and / or receive remittance using the mobile number other than the one registered with the bank?
The customer can remit and / or receive funds using the registered mobile number only. In case he / she need to remit / receive funds using the other mobile number, he / she will have to approach the bank and complete the process of changing the registered mobile number for mobile banking.

28. When can the beneficiary use the funds received through IMPS?
The beneficiary can use the funds immediately on receipt of credit in the account. The funds received through IMPS are good funds and can be used immediately upon credit.


29. Are all banks offering IMPS?
This service has been launched as a pilot with seven banks viz. State Bank of India, Bank of India, Union Bank of India, ICICI Bank Ltd, Yes bank, Axis bank and HDFC bank. Many more banks joined IMPS afterwards. The updated list of banks offering IMPS is available on our website http://www.npci.org.in/bankmember.aspx

Bank of Baroda - Rupay Card Details


 
RuPay Debit Card
We are pleased to inform the launch of India’s First Domestic Card -RuPay Debit Card in co-ordination with NPCI. Presently RuPay Card can be used at ATMs and selected POS in India only.

Key features of RuPay Debit Card:
  • It can be used only with PIN hence a more secured debit card.
  • No threat of card misuse when lost/stolen.
  • Card would be accepted only at secured PIN based POS terminals.
  • Cash withdrawal limit at ATMs is Rs 25,000/- per day.
  • Spend limit at merchant outlets (POS) is Rs 50,000/- per day.
  • Available to all customers eligible for debit card issuance.
Target customers:
 
  • All Saving Bank Account holders (existing and new).
  • Baroda Advantage Current Account holders (existing and new)
  • OD against Bank’s Own Deposit and OD against NSC, KVP, LIC etc (existing and new).
  • No frill Accounts.
 
RuPay Debit Card can be accessed/used as under:
  • More than 2,000 Bank of Baroda Interconnected ATMs spread across major centers in the country.
  • Member banks (100 plus) of National Financial Switch having more than 1,00,000 ATMs in the country.
  • NPCI member bank ATMs all over the country bearing RuPay logo.
  • For convenient shopping, dining out at selected outlets accepting RuPay Cards in India.
  • RuPay Debit Cards have the additional security of PIN based authorization even for transactions made at Merchant outlets.

Lakshmi Vilas Bank - Details of Rupay Card


 
Rupay ATM Card  
 

The advent of technology in Banking Industry paved the way for introduction of safe, secured and hassle-free electronic payment products. The spending pattern of consumers has boosted the growth of Indian Payment Card market including credit, debit and prepaid cards. Banks have tied up with internationally acclaimed networks like VISA Worldwide, Master Card and American express to improve their retail banking space and bottom line.
Using RUPAY card our customers can access all ATMs under NFS network for cash withdrawal, balance inquiry, mini statement and PIN change across our nation.

Advantages of RUPAY card:
 
·         Suitable for customers who needs card only for ATM operations.
·         Using RUPAY card customer can access all ATMs under NFS network/CashTree network.  ( The Rupay card can be used in 98000 + ATMs of 66 members Banks across the country. )
·         Card renewal charges will be waived for RUPAY cards.

Other Points:
 
1.     Rupay card will be issued to new account holder who are not having any cards  of our bank. will not be issued as replacement for our ATM/VISA Debit Cards.
2.     Rupay card issuance will not support migration from other cards like VISA Classic, VISA Gold etc.
3.     All dispute management related to Rupay Card is as same as VISA Cards

Saturday, September 28, 2013

Akola district central coop bank to distribute Rupay cards


The Akola district central cooperative bank is set to launch Rupay cards - a debit card for farmers, in the district.

Farmers can use their credit amount to buy seeds, fertilisers and pesticides among other things.
The Akola district central cooperative bank is going to be the second bank in the state to have such card enabled service for its farmers.

The Nabard and National Payment Corporation of India have jointly launched the Rupay card, a platform which provides payment facilities using cards. Currently, such platform is provided by two debit card companies and those are US based.

Akola DCC bank has 107 branches in Akola and Washim districts, as the latter was carved out as a separate district some years back. There are two lakh farmers having an account with the bank, who would get the Rupay card from the bank in the coming week.

The officials stated that such card will not only enable farmers to use their loan amount efficiently but also keep a track of money. The manual withdrawal procedure of money from bank account is getting costlier as the expenses on manpower and infrastructure are increasing. In such a case, electronic transactions are very economical.

The bank is also setting up an automated tailor machine in every branch for farmers' benefit. The Nabard has also funded some companies for producing debit card reading machines which can be given to the distributors of fertilisers, seeds and pesticides. It will keep track of every transaction and if farmers are overcharged, it can be found through electronic bills, the officials said.

Wednesday, September 18, 2013

Morpho becomes first RuPay-certified vendor for chip card manufacturing in India

Morpho (Safran) today announced that its Indian subsidiary Syscom has been certified as the first and to date only payment card manufacturer in India for the manufacturing and personalization of chip cards for RuPay, the Indian payment card network by National Payments Corporation of India (NPCI).
The RuPay chip card is based on the D-Payment Application Specification (D-PAS) platform, which is the EMV* technology of Discover Financial Services (DFS). The RuPay chip cards will thus be accepted at all Discover Point of Sale terminals and ATMs globally in addition to the vast network of RuPay-enabled ATMs and Point of Sale terminals in India.

"This certification recognizes Syscom's commitment to maintain technology and quality leadership over all other card manufacturers in the country to meet banks' requirement for payment cards," said Sanjeev Shriya, SVP Sales India at Morpho, e-Documents Division and Managing Director, Syscom. "The chip cards are based on international specifications that provide protection to banks and customers against card skimming and counterfeiting frauds. We are now fully equipped to meet the stringent security and certification requirement of the banks."

* EMV (Europay, MasterCard and VISA) is becoming the global standard in the migration from magnetic stripe cards to chip-based cards. EMV is an interoperability standard developed by the three financial institutions to ensure that all Europay, MasterCard, and VISA-branded smart cards and all smart card-reading POS terminals and ATMs work together to deliver the highest level of security.

Tuesday, September 17, 2013

There's something for everyone in latest global payment cards data

The publication of RBR's global payment cards research provides, among other things, an annual opportunity to analyze how the different card schemes are matching up.
Last year's research highlighted the meteoric rise of UnionPay, and in many ways this remains the outstanding feature again this year, with the Chinese scheme growing its share of cards in issue to 34.5 percent — well ahead of its main competitors.

To some extent all the main schemes will be pleased with the new figures, however. Visa's V Pay, while still something of a niche European scheme, grew its card base by more than 50 percent, for example. And with an overall increase of more than 8 percent, MasterCard brands saw slightly higher growth in card numbers than their Visa counterparts.

The other main schemes — American Express, Diners Club, Discover and JCB — also grew their cards in issue, but it was the 12 percent growth in domestic scheme card numbers that caught the eye here. This only just kept pace with the global growth driven by UnionPay but was nevertheless ahead of most other schemes.

Growth of domestic schemes in less developed markets is likely to be a feature of the global cards scene for the next few years, with Brazil's ELO, India's RuPay and expanding schemes in other large markets such as Mexico and Nigeria.

There is no right way of comparing schemes — while UnionPay now dominates in terms of the number of cards, it must be remembered that most of these are in one country and that UnionPay's share of the number and value of transactions still lags behind the other main schemes.

Interestingly, while UnionPay makes up a more modest 4.4 percent of transactions, this rises to 20.5 percent of the value of global card payments. The message here is that it is only a matter of time before there is an explosion in the number of global card transactions when Chinese people start using cards for more everyday purchases.

Wednesday, September 4, 2013

New RBI Governor Raghuram Rajan unveils big initial package, promises more

 

New RBI Governor Raghuram Rajan on Wednesday came out with a slew of measures, including more trade settlement in rupees to rescue the battered financial markets and hinted at a shift in focus from inflation control, doggedly pursued by his predecessor, to boosting growth.

Shortly after he took over as the 23rd Governor of the central bank, Rajan, 50, addressed the media with a prepared statement in which he laid out a detailed road map for his innings in the short term, which he called a "big initial package."

He also rescheduled by a few days the date for his much- anticipated first monetary policy statement to September 20. The new Governor set up a number of committees for revising and strengthening monetary policy framework, financial stability, financial inclusion, NPAs and an outside panel of experts headed by former Governor Bimal Jalan to screen applications for new bank licenses. Rajan said the new bank licences will be issued around January next year.

Apparently reflecting a shift in the approach from his predecessor D Subbarao, who had serious differences with the government of late, Rajan said the primary role of the bank is monetary stability to sustain confidence in the value of the rupee.

"Ultimately, this means low and stable expectations of inflation, whether that inflation stems from domestic sources or from changes in the value of the currency, from supply constraints or demand pressures.
"...but we have two other important mandates; inclusive growth and development, as well as financial stability," he said.



Asked about Subbarao's focus on targeting inflation, Rajan said he would reserve his comments till September 20. Rajan said the bunch of reforms has been unveiled today to enhance growth.
"I think there are so many low-hanging fruits in the economy that if we only pluck them we can accelerate growth substantially." The former IMF chief economist and economic advisor to the Finance Ministry said there were some positive developments in the economy which will help to boost growth.

The measures disclosed to support the rupee include liberalisation of the financial market by enhancing the limits for exporters to re-book cancelled forward exchange contracts and opening a special concessional window for swapping foreign currency non-resident (FCNR) deposits and dollar funds. "My sense is that we certainly don't need false optimism. But I think there is good reason to believe that in the medium run, the future of the country is strong," he said.

Asked about Standard and Poor's downgrade threat, he said the international rating agency "nearly reiterated what has been its long standing claim about there being one-third possibility of a rating downgrade...it is not something new. So I won't read too much into the statement."

The measures announced by Rajan include enhancing the re-booking limit on cancelled forward exchange contracts for exporters to 50 per cent, extending a similar facility to importers and introducing cash settlement in 10-year interest rate future contracts to develop the money and G-sec markets.
Rajan indicated the RBI will take steps to reduce the Statutory Liquidity Ratio (SLR) and introduce greater regulatory and supervisory control over the domestic operations of foreign banks. He promised to give freedom to banks to open branches without prior RBI permission.

The new RBI chief also said he will steadily liberalise the markets and lift restrictions on investment and position-taking, together with Sebi, and will examine introduction of interest rate futures on overnight interest rates.









While the RBI has enhanced the re-booking limit on cancelled forward currency contracts to 50 per cent for exporters, importers will be allowed a 25 per cent limit.The central bank will push for more trade settlements in rupees and open up the financial markets for those who receive rupees to invest it back in.

Rajan said the RBI will raise the overseas borrowing limit of 50 percent of unimpaired Tier I capital to 100 per cent for banks and will introduce cash-settled 10-year interest rate future contracts.
The central bank will also examine introduction of interest rate futures on overnight interest rates; steadily but surely liberalise markets, restrictions on investments and position-taking; and issue inflation-indexed savings certificates tied to CPI to retail investors by end November.

He stressed on the need to reduce the requirement for banks to invest in government securities in a calibrated way and will push foreign banks to set up wholly owned subsidiaries.
Rajan proposes to collect credit data, examine large common exposures among banks and encourage banks to clean up their balance sheets.

Referring to the announcements, he said, "This is a part of my short-term time-table for the Reserve Bank. It involves considerable change, and change is risky. But as India develops, not changing is even riskier. We have to keep what is good about our system, of which there is a tremendous amount, even while acting differently where warranted."

He also announced a committee headed by RBI Deputy Governor Urjit Patel to strengthen monetary policy framework. The panel will submit its report in three months.




Rajan said that a committee under former Governor Bimal Jalan would screen bank license applicants after an initial compilation of applications by the RBI staff.

He said new bank licences will be announced "within, or soon after, the term of Deputy Governor Anand Sinha, who has been shepherding the process. His term expires in January 2014."
Financial sector expert Nachiket Mor will head a panel to suggest steps to promote financial inclusion. Another committee, to be headed by Deputy Governor K C Chakrabarty, will take a close look at rising NPAs and suggest steps to improve the recovery of bad debts.

"While the resumption of stalled projects and stronger growth will alleviate some of the banking system difficulties, we will encourage banks to clean up their balance sheets and commit to a capital-raising program where necessary. The bad loan problem is not alarming yet, but it will only fester and grow if left unaddressed," Rajan said.

Stressing that India is a fundamentally sound economy with a bright future, the new RBI chief said, "Our task today is to build a bridge to the future, over the stormy waves produced by global financial markets. I have every confidence we will succeed in doing that."

Tuesday, September 3, 2013

Reaching out to farmers, the electronic way

http://www.livemint.com/Specials/LgMbbY5MhP2wjTKpIzqqUL/Reaching-out-to-farmers-the-electronic-way.html

India’s first card payment network, RuPay, similar to Visa and MasterCard, is changing the way farmers are banking 

RuPay, India’s first card payment network similar to Visa and MasterCard, is changing how farmers are banking and handling their money. 

Take the case of Mahesh Kumar, 38, a farmer on the outskirts of Mumbai. He used to withdraw the entire Rs.1.5 lakh of annual farm credit he was entitled to under the Kisan credit card scheme in a single instance, and end up paying huge sums in interest.

Last year, he began using a RuPay Kisan card instead to withdraw smaller sums of his entitlement from automated teller machines as well as to make payments at retail stores. “It has made life very easy. Now, I can withdraw small amounts of money any time and save on interest costs,” he said.

Crop loans of up to Rs.3 lakh are disbursed at an annual interest rate of 7%, according to the ministry of agriculture’s website. The government provides interest subvention of 3% per annum on prompt repayment, effectively making the crop loans available at 4%.

The Kisan credit card was launched in 1998-99 by then finance minister Yashwant Sinha to help farmers make smarter decisions on how to use cash for cultivation rather than depend on suppliers who were funded by banks.

RuPay was conceived to offer a domestic system that will allow all Indian banks and financial institutions to participate in electronic payments. Through RuPay Kisan cards, farmers are now able to make electronic payments. For a bank, the RuPay cards mean lower transaction costs than MasterCard- or Visa-branded cards.

RuPay was launched in March 2012 by the National Payment Corp. of India (NPCI), and currently cards affiliated to it are issued by 20 state-run banks, six private banks and 84 cooperative and gramin banks that cater to people in small towns and villages.

“We now have 6 million cards in circulation, out of which 2.7 million are Kisan cards, 2.5 million are with cooperative banks and the remaining are with mainstream banks,” said A.P. Hota, chief executive and managing director of NPCI. He hopes to issue 150 million cards in two-three years.

On 6 August, Dombivali Nagari Sahakari Bank Ltd became the first scheduled urban cooperative bank to introduce RuPay debit cards. Milind Varerkar, general manager, said it was “the first time we issued debit cards and it is through the RuPay network, as the Visa and MasterCard software loading proves to be very expensive”.

“From a bank’s perspective, RuPay network is cheaper,” said C. Sumoth, chief manager (priority sector advances department), Federal Bank Ltd. “It will help a bank save at least 25-30% on switching and cardholding cost compared with using a Visa or a MasterCard platform.” Federal Bank has issued 10,000 RuPay-branded debit cards since it launched these in April.

“Competition is always welcome,” said Visa Inc.’s group country manager for India and South Asia Uttam Nayak. “We undeniably accept that they (RuPay) have support of the government,nationalized banks and shareholder banks, but the market opportunity is huge.”

Calls to Ari Sarker, division president, South Asia, MasterCard Worldwide, went unanswered.
In June, NPCI also launched PaySecure for RuPay cards, an e-commerce system similar to PayPal that allows secure online payments. Until now, these cards worked only at ATMs and point-of-sale terminals at retail outlets.

Shekhar Ganapathy, general manager for South Asia at ACI Worldwide Inc., which provides software for banks to help recognize transactions made through RuPay cards, believes the network has a good chance of success if its reach improves.

According to the Reserve Bank of India, there are around 120,000 ATMs and about 1 million point-of-sale (PoS) terminals in the country. While customers can use RuPay cards at all ATMs, most PoS terminals are yet to be configured to accept it. “As of now, only 25-30% of the PoS machines in the country accept RuPay card. Hence, there are issues when it comes to swiping the cards at other terminals,” said Sumoth of Federal Bank.

The penetration of RuPay cards is slow, admitted Hota. “Out of the nine lakh (900,000) PoS terminals, RuPay works on 2.7 lakh terminals,” he said, attributing the delay in acceptance to software upgradation that is being done manually. “To get private sector banks and mainstream banks to convert to RuPay cards full-time will be our biggest challenge,” he said.

RuPay will soon be available as an international card in collaboration with DFS Services Llc, a US payment network. “RuPay, by default, is a domestic card, but an international variant will be available soon,” Hota said.

RuPay is a step in the right direction and a starting point that can be applicable to the rest of the market,” said Bharat Poddar, partner and director, Boston Consulting Group. “And with RuPay set to launch international cards, it can help solve the problem that inhibits its acceptability in high-end markets.”