Friday, June 20, 2014

Rupay Kisan Credit Card Scheme to start from July 12

 REPRESENTATIVE IMAGE: As per the RBI guidelines, farmers across the country are to be issued credit cards to boost paperless cash credit system by March 2015. 

CHANDIGARH: Farmers across the states for the first time will get facility of credit cards by the end of financial year in the country. The RBI mandated scheme is targeted to provide ease of transaction through credit cards to farmers instead of prevailing cheque based Kisan Credit Cards.

The NABARD funded program is being undertaken by National Payment Corporation of India. As per the RBI guidelines, farmers across the country are to be issued credit cards to boost paperless cash credit system by March 2015. The initiative is part of the modernization bid of cooperative banks to aid them tackle competition from the commercial banks.

"Axis Bank will be sponsor bank to issue credit cards to farmers in Haryana covered by the Central Cooperative Banks," managing director, HARCO State Cooperative Apex Bank, Naresh Chaudhry said.

In Haryana the new scheme known as 'Rupay KCC Card' will be launched from Ambala on July 12 on the occasion of foundation day of National Bank for Agriculture and Rural Development (NABARD). This State wide scheme will be launched from Cooperative Bank of Ambala

As per the scheme, farmers covered under Primary Agriculture Co-operative Societies will get facility of credit cards for paperless loans for crops and other needs. Under the scheme, the loans will incur interest of 7 per cent up to the limit fixed under the Kisan Credit Card scheme. At present crop loans up to 3 three lakh are provided to farmers under Kisan Credit Card Scheme. "In Haryana farmers are provided interest subvention of three per cent in case of timely payment," CEO, Amabala Central Cooperative Bank Gurpreet Kaur said.

"It will reduce transaction cost of banks and also provide ease of credit transactions to farmers," says CEO, Gurgaon Central Cooperative Bank, Ved Parkash Yadav.

Cooperative banks in the country are burdened by rising Non Performing Assets and credit cards are suspected to further deteriorate the asset quality of the banks. " Ease of credit will encourage farmers to pay back loans on time," says Yadav.The scheme could provide new lease of life to cooperative banks that are losing ground to commercial banks. "Crop loans is mainstay of business of cooperative banks unlike commercial banks," says Yadav.

Haryana Co-Op banks to provide credit cards to farmers

For the first time, now the Cooperative Banks in Haryana would also provide credit cards to farmers.

Chief Minister Bhupinder Singh Hooda would launch a new scheme known as 'Rupay KCC Card' on July 12, on the occasion of foundation day of National Bank for Agriculture and Rural Development (NABARD).

This state-wide scheme will be launched from Cooperative Bank of Ambala in Ambala by issuing such cards to five farmers.

On the same day, Hooda would also introduce a new scheme 'Dairy Area Development Scheme' for dairy owners.

It aims at developing dairy through ultramodern scientific methods so as to make dairy business more profitable.

The 'Rupay KCC Card;' would be similar to ATM card which farmers can use at any ATM, an official release said here.

The banks would also provide finance to dairy owners adopting ultramodern scientific methods.

In a meeting held here today, the Chief Minister discussed both the schemes with Chief General Manager, NABARD, D V Deshpande.

Hooda said the state government has taken a number of decisions for the welfare of farmers and dairy owners.

These decisions have benefitted farmers and dairy owners and enhanced their economic status.

He said that the state government would continue to take such decisions.

Highlighting 'Rupay KCC Card' scheme and 'Dairy Area Development Scheme', Deshpande said dairies with up to 10 cattle would be provided funds under the 'Dairy Area Development Scheme'.

He said the 'Rupay KCC Card' scheme is being introduced by Cooperative Banks in the State for the first time.

Deshpande informed the Chief Minister that today NABARD released Rs 20 crore to Irrigation Department for strengthening the irrigation canals in the State and has sent a new project costing Rs 200 crore for approval to headquarters.

Hooda also asked Deshpande to get a project approved for four water bodies to be set up in the State to minimise threat of flood in various districts.

Deshpande said progressive farmers and bankers with commendable performance would also be honoured in the function to be held on July 12.

Sunday, June 8, 2014

Except one, no pvt banks have issued RuPay cards: A P Hota

A P HotaRupay the country’s first online payment gateway, was launched by National Payments Corporation of India to compete with American multinationals Visa and Mastercard. It has not found takers in the private banking space. A P Hota, managing director and chief executive officer, says plans to take the card abroad have also been hit by cost considerations. Edited excerpts of a talk with Nupur Anand:

The offtake for RuPay cards in certain channels is still low. Why?

The RuPay gateway has just started and the card base is only 15 million. Plus, for the card to pick up in various channels, all banks will have to start making changes in the system such as in e-commerce, etc. Also, banks will have to start issuing the cards. Of the only 15 million cards now, most have been issued by public sector banks (PSBs). Not a single PSB has, except Federal Bank.

By when do you see private banks getting in and issuing cards?

Nor for the next year or so. They are catering to one particular segment, of international cards. We are in the domestic space. Many private banks are tied in a long-duration contract with Visa and Mastercard. Until that expires, they will not be able to come out of it. They have taken money from them in advance. If they have a third card base, they will not be able to issue the committed number. Many of the PSBs have not taken such a long-term contract and it was easy for them to come on board, such as Punjab National Bank, Union Bank, Canara Bank, etc. Some banks also have technological challenges.

Private and foreign banks don’t really have any technological challenges.

True but some only see the short-term interest.

Have the bigger PSBs such as SBI also started issuing RuPay cards?

SBI started about two months earlier. They'd also taken money for a long-duration contract; they're now taking a bit of a risk. They are saying it is worth paying back the money to Mastercard and Visa, as they will also be saving a lot of money with RuPay — the cost of these cards is a third compared to the multinational counterparts. See, all the fees that banks in India pay are in dollar terms. SBI has a 180-mn card base, so they are paying a lot in fees. Even if no other bank comes in but SBI fully does, the scheme is a success.

You had also tied up with Discover Financial Services to take RuPay international. What is the progress there?

Technically, we are ready. But the commercial rates are yet to be decided. The idea is to make it more attractive than MasterCard or Visa. In the domestic market, the cost is a third but in the international market, we are finding it difficult to price it accordingly.

Our volume is low as we are not in the credit card market. We're only in the debit card market and the bulk of transactions internationally happen in credit cards. So, other players can leverage it, while we can’t. It is also difficult to determine the rates of the two international players, as they have different rates for different banks.