Showing posts with label debit cards. Show all posts
Showing posts with label debit cards. Show all posts

Sunday, October 26, 2014

We expect credit growth to pick up by end of third quarter: Bank of India MD Vijayalakshmi Iyer



Bank of India is planning to set up a subsidiary dedicated to social work, a first among its domestic peers. Amid increasing competition, the public sector lender is trying to consolidate the credit portfolio, cut expenses and focus on fee and treasury income to stay profitable. The bank is focusing on bringing down stressed assets by strict monitoring and faster resolution of cases. Vijayalakshmi Iyer, chairperson & managing director, tells Manju AB how she is steering the bank out of its bad debt problem by personally attending to large accounts. Excerpts from the interview:

What is driving business at Bank of India? With credit growth being at a decade low, how will banks beat the trend and still stay profitable?
The growth has been very low in tune with the industry trend post March 2014. This actually provided an opportunity to consolidate credit portfolio and to put more resources for monitoring mechanism. These efforts will result in lower credit cost and will improve profitability. With more focus on timely resolution of stressed assets, the profitability will, in fact, improve.

When do you expect corporate credit to pick up? And which sectors do you see reviving faster than others?
There has been slowdown in corporate credit demand. Many steps are being taken by the government to enable economic growth to assume faster pace. With pro-growth environment being created, we expect credit growth to pick up by the end of third quarter of the current fiscal. We expect pick-up in SME sector to lead.

How is the retail credit growth?
Notwithstanding lower corporate demand for credit, the retail sector continues to grow resulting in better balancing of portfolio. Focus on agriculture, retail and MSME is driving the business. Widespread geographical spread of branches is helping us growing in these sectors. During the first half of this fiscal, schematic retail loan has grown 12.21% from Rs 21,982 crore as on March 31, to Rs 24,665 crore as on September 30. The growth is 28 % year on year (Rs 19,284 crore to Rs 24,665 crore). Home loan growth has been 31% on a year-on-year basis (Rs 11,400 crore to Rs 14,913 crore). Home loan and LAP constitutes 74% of schematic retail loans as on September 30, 2014 (home loan Rs 14,913 & LAP Rs 3,424 crore). Total retail loans (personal loan segment) of the bank stood at Rs 29,654 crore as on September 30, 2014. Considering the growth pattern in the earlier years, we expect about 40% growth in retail loans during 2014-15.

What will be the key driver of your profits during the current quarter?
The deposit rates have softened in the absence of demand for credit. This will help in achieving lower cost of fund and better "NIM' (net interest margin). Initiatives have been taken to curtail operational expenses as well as to increase non-interest income. All out efforts are being made to achieve lower credit cost by improving monitoring process and also by achieving speedier resolution of non-performing assets. There are two major sources of fee income, in addition to general banking services including remittances, etc. That is (1) business related to credit portfolio and (2) fixed income portfolio. Given the softening of yields on fixed rate bonds, we do expect gains on that account to contribute to our profits.

How are your deposits growing? Any specific campaigns to mobilise CASA (current account savings account)?
It is desirable to match growth in deposits to growth in credit business. Given that demand for credit has been muted, the deposit portfolio is registering slower growth in keeping with opportunities for deployment. We are placing thrust on CASA business and special drives are being arranged across the country to expand the customer base further. Technology related initiatives are being implemented to make banking more customer friendly. The government business is also being expanded with a view to increase CASA portfolio.

How is the joint lending forum (JLF) helping the bank combat the rise in bad loans? Is the JLF being implemented in all earnestness with co-operation from all banks?
Joint Lending Forum (JLF) has been helping the banking system in early resolution of stressed accounts as RBI guidelines warrants time bound rectification process by all banks if majority of banks (75% in value and 60% in numbers) agree for any of the three options available, that is rectification, restructuring or recovery. The implementation of corrective action plan under JLF route has almost stabilised barring addressing of few issues like short period available for implementation of restructuring under CDR
on-CDR route.

Asset reconstruction companies (ARCs) say banks need to give bigger discounts for sales to happen. What has been your experience?
In fact, the role of ARCs is very important in faster resolution of stressed assets. We feel that ARCs need more capitalisation to meet the revised norms of payment of cash up-front of 15%. Admittedly, with higher cash up-front, the ARCs will have more commitment, which will lead to even faster resolution. Bigger discounts on sales will force banks to have bigger hit to their P&L.

Now social media networks like Facebook and Twitter are attempting at money transfers, printing cheque books, etc. Is there any threat to traditional banking from these alternate channels?
There is no question of threat. Innovations in technology are always welcome as they help in achieving higher level of efficiency in providing banking services. It is desirable to remain aligned with evolving technology. We have focus on IT enabled services to ensure that our customers have access to state-of-the-art technology. We were the first PSU bank to introduce first ATM long back in the country. Recently, we introduced cash remittance through ATM to non customers without use of ATM card. It has received good response. Most of our ATMs are now enabled to provide this service of Instant Money Transfer (IMT).

Banks are planning to sell off their non-core assets to streamline the organisation What would be your non-core assets that you might put on the block?
We do have strategic investments and keep reviewing the same from time to time. It is always desirable to realise gains on such investments to augment capital. It is a continuous process.

You had plans of setting up a wholly owned subsidiary for corporate social responsibility. What has been the progress of that?
With a view to have consistent approach for achieving our corporate social responsibility objectives, we have proposed formation of a trust. We have approached appropriate authorities for approvals. We are expecting approvals soon.

Will you have to raise money for Basel III compliance? Will you give some details on the fundraising plans of the bank?
We need to strengthen our capital structure to ensure consistent growth while maintain the desirable levels of capital adequacy. This is a continuous process. We are observing capital market developments very closely and have plans to raise capital at an appropriate time.

Finally, how is Jan Dhan scheme faring and how much of deposits in these accounts if at all have you collected?
Our bank has opened 28.82 lakh accounts from August 16 to October 16 under Jan Dhan scheme and collected Rs 70.07 crore deposits. The scheme is in full swing by means of carrying out household surveys in all the allotted Sub Service Areas (SSA) and wards which is expected to be completed by October 31.Number of RuPay Cards issued by our Bank so far is 17.94 lakh. The backlog is expected to be cleared by November 15. Aadhaar seeding and opening of accounts through e-KYC is picking up and we have seeded 23.48 lakh accounts and opened 11,716 accounts through e-KYC so far.

Have you also rolled out Swachh Bharat campaign?
In this national endeavour, BOI has committed Rs 4 crore for construction of toilets in government schools. The project will cover 85 girls secondary schools in Jharkhand. List of schools and districts covered in the state has already been conveyed to finance ministry, and ministry of HRD. Implementation will be done through local agencies in coordination with BOI zonal offices situated in Jharkhand.

Amazon shopping, Jet Airways booking now easy via RuPay Card


NPCI has already issued more than 30 million RuPay cards.
After Flipkart, home-grown payments gateway RuPay has tied up with Amazon and one of the largest carriers Jet Airways.

With this, the RuPay debit card holders can now shop best deals on Amazon and book air tickets on Jet Airways, the Reserve Bank-promoted National Payment Corporation which issues the RuPay cards said in a statement today.

"Acceptance on Amazon is a breakthrough for us. We are glad to offer a wider horizon to our cardholders to transact online. Also, our integration with Jet Airways will definitely benefit our cardholders,," says NPCI managing director AP Hota said.

Commenting on the tie-up, Amazon India general manager for payments Srinivas Rao said, the arrangement is in line with its strategy of offering the widest set of customers a variety of payment options that will enhance their shopping experience.

The NPCI had last week announced that it has tied up with Flipkart, Snapdeal and LIC who are among over 15,000 merchants who will be accepting the RuPay cards, which are the homegrown alternative to foreign gateways like Visa and MasterCard.

Following the tie-up Jet Airways has begun accepting RuPay cards on their site for air-ticketing, airlines’ senior vice-president Gaurang Shetty said.

NPCI has already issued more than 30 million RuPay cards, which are accepted at all ATMs, and by 9.8 lakhs POS terminals and over 15000 online merchants.

The domestic online retail industry, as per a Crisil report, is expected to touch Rs 50,400 crore by FY16 from Rs 1,500 crore in FY08.

According to online industry body IAMAI, travel has emerged out as the most transacted segment in the online space accounting for 60 percent of online payments. The value of online payments for travel industry stood at Rs 50,000 crore in FY13.

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

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.

Thursday, August 8, 2013

NPCI launches chip-based debit cards for improved security

With the aim of providing better security to card holders, payment service provider National Payments Corporation of India (NPCI) has rolled out chip-based debit cards under the RuPay brand.
The chip card has to be inserted into the machine so that the user can key in a unique PIN to complete the transaction, which enhances the security level. The chip cards are based on international specifications that provide protection to banks and customers against card skimming and counterfeiting frauds, NPCI said in a statement. 

Bank of Baroda and Saraswat Co-operative Bank are the first two banks to issue these cards.
The card will be accepted at all channels including ATMs, point of sales (PoS) machines, e-commerce and now EMV (card standard developed by Europay, MasterCard and VISA) chip and pin cards across the globe. 

A. P. Hota, Managing Director and CEO, NPCI, says, “RuPay, a benchmark card scheme of NPCI, offers both modes of chip card — full EMV issuance and quick EMV issuance that will offer all the safety measures required of a next-generation card payment system.” 

Most banks are likely to opt for Quick EMV issuance of the RuPay card as there is no additional fee prescribed in it and also to meet the deadline of November 30 as prescribed by the Reserve Bank of India, to be issued by banks to all customers opting for international cards. Additionally, the Quick EMV option requires minimal changes at the banks’ host system to be borne by lower cost. Whereas, full EMV issuance entails higher cost and a much longer time, the company said.