The state cash surplus with RBI has risen to about Rs 75000 crore, thus the central bank has asked state governments to manage their cash balances more effectively and should issue a quarterly indicative borrowing calendar which will help them in managing their borrowing better, bank said in a statement.
The statement put on website stated a meeting was held between senior officials of the central bank and state finance ministries for annual discussion.
A state secretary who had attended the meeting told, "There was an appreciation for a little bit of lower borrowing than the ceiling given to states. RBI wants the states to reduce their borrowing to the extent of their cash balances"
The states have also been asked to manage their spending pattern in such a way so that their cash levels don’t rise, he added, on condition on anonymity.
In a statement the central bank said, "The deliberations in the conference primarily focused on issues relating to surplus cash balances of the state governments, projections on market borrowings of the state governments and issuance of quarterly indicative calendars for borrowing by the states".
The central bank is already under the pressure of federal government’s recorded Rs 4.57 trillion borrowing targeted for this fiscal, and it is also concerned about the state’s borrowing which amounts to Rs 6.3 trillion this year, the state official informed.
The central bank official pointed out in case corporate credit picks up, also loan given to 3G, it would be difficult for the market to take up the entire government borrowing, he added.
The meeting was attended by Sudha Pillai, a member of the plan panel, Ashok Chawla, finance secretary, Sumit Bose, secretary for asset sales, Shyamala Gopinath, deputy governor and other state finance secretaries.
Friday, May 28, 2010
Tuesday, May 25, 2010
Banks are on aggressive expansion of their branches as RBI eased license norms
After RBI’s announcement that banks will be allowed to open branches in Tier-III to VI cities and they don’t require to take prior permission for the same, the banks are working on double expansion plans of their branches.
In fact there has been substantial rise in the number of bank branches this after RBI’s announcement.
Earlier in December 2009, RBI has allowed domestic scheduled commercial banks (other than regional rural banks) to open branches in Tier-III to Tier-VI centers (with population up to 49,999) without prior permission. As a result the banks planned to open almost double to open almost double the number of branches this year, as compared to last year.
Punjab National Bank is planning to open nearly 550 branches. Bank Chairman and Managing Director KR Kamath told for about 440 branches it will not require to take license as these branches will be opened in areas with a population of less than 50,000. Like wise, UCO bank is planning to open 140 branches this year, but will have to take licenses for only 89. Chairman and Managing Director of the bank SK Goel said, the opening of new branches might raise its market share to at least 3 per cent from the existing 2.6 per cent.
On the other hand State Bank of India (SBI), country’s largest lender has spent around Rs 100 crore to open 286 branches and 2,521 automated teller machines in the fourth quarter of the last financial year. Also, IDBI Bank has plans to open around 300 branches this year, “substantially” higher than what it had done over the past few years, said an executive.
Thus RBI’s liberalized policy has led banks to go for branch expansion plans with a view to gain market share.
However, last year, the smaller banks set off to get more licenses due to consolidation as the government had suggested the merger of smaller banks with bigger in order to make public sector banks more competitive. Although, smaller banks were not ready for the same “There was a threat of amalgamation of banks till last year and smaller banks were in a rush to increase their balance sheet size,” said an executive of a public sector bank.
For the meantime the consolidation plan has been put on hold. It is believed RBI’s change of rule will help them in increasing their balance sheet size. Also, the cost of maintaining rural branches are low therefore banks are free to open branches in rural areas in the vicinity of bigger towns or in an industrial cluster, making it a profitable proposition.
Allahabad Bank is mainly located in eastern India bank, is planning to do aggressive branch expansion in southern and western states. “In some areas, RBI guidelines on opening branches might help, and we will be looking at opportunities in such areas,” said Executive Director D Sarkar. The bank has obtained license for 69 branches, much higher than in the preceding years.
On the other hand Bank of Maharashtra, mainly focused in western India has planned aggressive branch expansion. It has planned to open 75 new branches this year, against 45 last year. Its main focus will in eastern states. “We are now aggressive in expanding branch network to make the bank fairly representative. We are trying to broadbase our customer base to include states in the northeast, Bihar and Jharkhand,” said Executive Director MG Sanghvi.
Last year, in December RBI has also allowed banks to open branches in urban centers of Sikkin and the northeast without prior permission. “In the last one year, more branches have come up, but the definite impact of RBI’s policy will show up this year,” said United Bank of India’s Executive Director SL Bansal.
In fact there has been substantial rise in the number of bank branches this after RBI’s announcement.
Earlier in December 2009, RBI has allowed domestic scheduled commercial banks (other than regional rural banks) to open branches in Tier-III to Tier-VI centers (with population up to 49,999) without prior permission. As a result the banks planned to open almost double to open almost double the number of branches this year, as compared to last year.
Punjab National Bank is planning to open nearly 550 branches. Bank Chairman and Managing Director KR Kamath told for about 440 branches it will not require to take license as these branches will be opened in areas with a population of less than 50,000. Like wise, UCO bank is planning to open 140 branches this year, but will have to take licenses for only 89. Chairman and Managing Director of the bank SK Goel said, the opening of new branches might raise its market share to at least 3 per cent from the existing 2.6 per cent.
On the other hand State Bank of India (SBI), country’s largest lender has spent around Rs 100 crore to open 286 branches and 2,521 automated teller machines in the fourth quarter of the last financial year. Also, IDBI Bank has plans to open around 300 branches this year, “substantially” higher than what it had done over the past few years, said an executive.
Thus RBI’s liberalized policy has led banks to go for branch expansion plans with a view to gain market share.
However, last year, the smaller banks set off to get more licenses due to consolidation as the government had suggested the merger of smaller banks with bigger in order to make public sector banks more competitive. Although, smaller banks were not ready for the same “There was a threat of amalgamation of banks till last year and smaller banks were in a rush to increase their balance sheet size,” said an executive of a public sector bank.
For the meantime the consolidation plan has been put on hold. It is believed RBI’s change of rule will help them in increasing their balance sheet size. Also, the cost of maintaining rural branches are low therefore banks are free to open branches in rural areas in the vicinity of bigger towns or in an industrial cluster, making it a profitable proposition.
Allahabad Bank is mainly located in eastern India bank, is planning to do aggressive branch expansion in southern and western states. “In some areas, RBI guidelines on opening branches might help, and we will be looking at opportunities in such areas,” said Executive Director D Sarkar. The bank has obtained license for 69 branches, much higher than in the preceding years.
On the other hand Bank of Maharashtra, mainly focused in western India has planned aggressive branch expansion. It has planned to open 75 new branches this year, against 45 last year. Its main focus will in eastern states. “We are now aggressive in expanding branch network to make the bank fairly representative. We are trying to broadbase our customer base to include states in the northeast, Bihar and Jharkhand,” said Executive Director MG Sanghvi.
Last year, in December RBI has also allowed banks to open branches in urban centers of Sikkin and the northeast without prior permission. “In the last one year, more branches have come up, but the definite impact of RBI’s policy will show up this year,” said United Bank of India’s Executive Director SL Bansal.
Monday, May 24, 2010
Banks told to speedily address ATM-related complaints
The Reserve Bank of India will be formulating common code for all banks. Therefore banks will have to speedily solve ATM-related complaints. Under this, the banks will have to issue a ticket number within a day of the complaint received and will have to resolve the issue within a week of the filing of the complaint.
The central bank has directed the banking association IBA to draft a common code for ATM related complaints.
An IBA official informed, “The new format is for facilitating the uniform filing of complaints by the customers. Besides, it will also help to a keep a tab on bank’s complaints-resolving capability.”
Banks have also been asked to display the ATM identification number and contact centre number specifically for ATM related issues. The official said, “Banks will soon have to put the information on their websites, where a customer will be able to track his resolution progress.”
While explaining the process, the official said when a customer files a complaint the bank’s branch will have to ensure that it is updated in the complaint management system (CMS) immediately. The official added, “On uploading the details, the issue will be escalated to the current branch, which needs to be resolved within seven working days.”
Under this new system customers will also get the facility to file e-complaints once the banks upload the formats on their website. The official told, “One can use the ATM identification number and file the complaint online.”
The banks appoint officials known as ATM in-charge, who monitor offsite ATMs. Then the concerned official every morning files a report giving details of cash level, down time and the amount withdrawn from each ATM.
According to data provided by finance ministry, in the last three years public sector banks have opened around 30,000 ATMs. Out of this State Bank of India, country’s largest lender opened 13,000 ATMs during this period.
According to some of the banks, by setting the deadline the process will not speed up but might hamper in pledging the process effectively. An executive director of a north-based public sector bank said, “Complaints can be of various types. Some of them may take more than a week.”
The central bank has directed the banking association IBA to draft a common code for ATM related complaints.
An IBA official informed, “The new format is for facilitating the uniform filing of complaints by the customers. Besides, it will also help to a keep a tab on bank’s complaints-resolving capability.”
Banks have also been asked to display the ATM identification number and contact centre number specifically for ATM related issues. The official said, “Banks will soon have to put the information on their websites, where a customer will be able to track his resolution progress.”
While explaining the process, the official said when a customer files a complaint the bank’s branch will have to ensure that it is updated in the complaint management system (CMS) immediately. The official added, “On uploading the details, the issue will be escalated to the current branch, which needs to be resolved within seven working days.”
Under this new system customers will also get the facility to file e-complaints once the banks upload the formats on their website. The official told, “One can use the ATM identification number and file the complaint online.”
The banks appoint officials known as ATM in-charge, who monitor offsite ATMs. Then the concerned official every morning files a report giving details of cash level, down time and the amount withdrawn from each ATM.
According to data provided by finance ministry, in the last three years public sector banks have opened around 30,000 ATMs. Out of this State Bank of India, country’s largest lender opened 13,000 ATMs during this period.
According to some of the banks, by setting the deadline the process will not speed up but might hamper in pledging the process effectively. An executive director of a north-based public sector bank said, “Complaints can be of various types. Some of them may take more than a week.”
Friday, May 21, 2010
Govt. asks RBI to decide ‘Indian-ness’ of private sector banks
The ‘Indian-ness’ of the country’s leading private sector banks will be decided by the Reserve bank of India (RBI). Based on the RBI's decision, the Indian government will figure out a solution for them without relaxing the provisions of the new foreign direct investment policy.
From over a year government has been having discussion on this issue and finally it has asked the apex bank to draft a framework for deciding the ownership and control of such banks.
According to a senior government official the new norms will be drafted on the parameters such as voting rights and the power to appoint directors of the banks.
He said, “We need to recognize that the structure of each bank is different and accordingly redefine the concept of ownership and control for the banking sector.”
However seven private sector lenders will get official pardon from this move of government. The seven private lenders which have been branded as foreign banks under the current norms include- ICICI Bank, HDFC Bank, ING Vysya, Development Credit Bank, Federal Bank, IndusInd Bank and YES Bank.
This issue has been pending for long with its roots in Press Note 2 of 2009, finally it was taken up for discussion at a recent meeting of the finance ministry, departmental of industrial policy and promotion and the RBI.
In Press Note 2 a structure for calculation of total foreign investment in Indian companies is given, which is based on ownership and control of such firms. According to this all types of overseas ownership will be counted as foreign investment.
It also states that any company who owns over 50% overseas investment will be considered foreign owned. As per its definition control is the power to appoint majority of directors on the board of a company.
Most important is that all the downstream investments by a foreign-owned company will be considered as foreign investment and be subject to sectoral caps and restrictions. When these norms were circulated to the banks, the banks took up the issue with the RBI and had sought clarifications on their exact status and investments.
However RBI had also written to the finance ministry and pointed out that ownership and control may not be limited to just equity holding and power to appoint directors.
Although analysts have welcomed the move but have to be done carefully. “There is no straight jacketed approach. The formula would have to be based after a careful review of the interplay of voting rights and economic ownership of banks,” said Nimai Vijay, associate director, PricewaterhouseCoopers.
From over a year government has been having discussion on this issue and finally it has asked the apex bank to draft a framework for deciding the ownership and control of such banks.
According to a senior government official the new norms will be drafted on the parameters such as voting rights and the power to appoint directors of the banks.
He said, “We need to recognize that the structure of each bank is different and accordingly redefine the concept of ownership and control for the banking sector.”
However seven private sector lenders will get official pardon from this move of government. The seven private lenders which have been branded as foreign banks under the current norms include- ICICI Bank, HDFC Bank, ING Vysya, Development Credit Bank, Federal Bank, IndusInd Bank and YES Bank.
This issue has been pending for long with its roots in Press Note 2 of 2009, finally it was taken up for discussion at a recent meeting of the finance ministry, departmental of industrial policy and promotion and the RBI.
In Press Note 2 a structure for calculation of total foreign investment in Indian companies is given, which is based on ownership and control of such firms. According to this all types of overseas ownership will be counted as foreign investment.
It also states that any company who owns over 50% overseas investment will be considered foreign owned. As per its definition control is the power to appoint majority of directors on the board of a company.
Most important is that all the downstream investments by a foreign-owned company will be considered as foreign investment and be subject to sectoral caps and restrictions. When these norms were circulated to the banks, the banks took up the issue with the RBI and had sought clarifications on their exact status and investments.
However RBI had also written to the finance ministry and pointed out that ownership and control may not be limited to just equity holding and power to appoint directors.
Although analysts have welcomed the move but have to be done carefully. “There is no straight jacketed approach. The formula would have to be based after a careful review of the interplay of voting rights and economic ownership of banks,” said Nimai Vijay, associate director, PricewaterhouseCoopers.
Thursday, May 13, 2010
Cyber mafia create phishing sites of bank, RBI and govt. departments
Internet security giant Symantec recently conducted a survey in which it reported that cyber mafia have changed their techniques of gathering information from bank customers. Now these mafias are launching phishing websites in the names of leading banks and financial institutions in India. In the month of March alone there has been a 35% increase in the number of phishing attacks on Indian internet users.
It reported the cyber mafias are based in the US and some European and African countries are on the prowl. So people should be careful when receive an email asking to update personal confidential data online. People should double check from bank or income tax department before giving out the information to these cyber mafias.
They are camouflaged on the internet, using names of various banks, including the Reserve Bank of India (RBI), and government departments. They are targeting banking information and personal financial details of people which they might later misuse it.
In the report Symantec has mentioned about phising website which was created in March by cyber criminals in the name of the RBI. The webpage of this phising website is different from the original RBI web portal, if the recipients are not careful they can get into cyber mafia trap. The cyber mafias are using a single web page to pass themselves as various banks and government agencies and are just changing logos and some key words to on the template to change identities. With close scrutiny you can easily identify fakes.
The phishing mail also have URL link. Clicking on the link, the target user will reach a website bearing the name of a bank or a government department. The mail requests the user to enter personal information, such as bank account number and password.
Most of the phishing websites created in March have URL extensions ending with .in, which actually indicates that they are Indian websites. On careful scrutiny it was found that the servers of these websites are located in the US.
According to a senior IT professional working with an internet firm, “The information provided by unsuspecting users could be used to siphon off money from their bank accounts. Their personal information might be used by cyber criminals to create fake registrations, fake ids and other illegal purposes.”
It reported the cyber mafias are based in the US and some European and African countries are on the prowl. So people should be careful when receive an email asking to update personal confidential data online. People should double check from bank or income tax department before giving out the information to these cyber mafias.
They are camouflaged on the internet, using names of various banks, including the Reserve Bank of India (RBI), and government departments. They are targeting banking information and personal financial details of people which they might later misuse it.
In the report Symantec has mentioned about phising website which was created in March by cyber criminals in the name of the RBI. The webpage of this phising website is different from the original RBI web portal, if the recipients are not careful they can get into cyber mafia trap. The cyber mafias are using a single web page to pass themselves as various banks and government agencies and are just changing logos and some key words to on the template to change identities. With close scrutiny you can easily identify fakes.
The phishing mail also have URL link. Clicking on the link, the target user will reach a website bearing the name of a bank or a government department. The mail requests the user to enter personal information, such as bank account number and password.
Most of the phishing websites created in March have URL extensions ending with .in, which actually indicates that they are Indian websites. On careful scrutiny it was found that the servers of these websites are located in the US.
According to a senior IT professional working with an internet firm, “The information provided by unsuspecting users could be used to siphon off money from their bank accounts. Their personal information might be used by cyber criminals to create fake registrations, fake ids and other illegal purposes.”
Tuesday, May 11, 2010
RBI revised cash limit for foreign travel
The Reserve Bank of India (RBI) has revised forex rules. Now travelers going abroad can take up to USD 3,000 or its equivalent amount in other currencies from Forex dealers and don’t need to take prior permission from RBI. The revised rules will be applicable with immediate effect, according to RBI notification.
But the revised ceiling will not be applicable to persons going to certain specified countries like Iraq, Libya, Iran, Russia and the Commonwealth of Independent States (CIS) countries. The notification further said the travelers going to Libya or Iraq will continue to get up to USD 5,000 or its equivalent in other currencies and no changes have been made in the provisions for travelers to Iran, Russia and CIS countries. Also forex dealers and money exchangers have been given permission to sell foreign exchange in other currencies other than American Dollar up to USD 3,000.
But the revised ceiling will not be applicable to persons going to certain specified countries like Iraq, Libya, Iran, Russia and the Commonwealth of Independent States (CIS) countries. The notification further said the travelers going to Libya or Iraq will continue to get up to USD 5,000 or its equivalent in other currencies and no changes have been made in the provisions for travelers to Iran, Russia and CIS countries. Also forex dealers and money exchangers have been given permission to sell foreign exchange in other currencies other than American Dollar up to USD 3,000.
Wednesday, May 5, 2010
RBI issues new pricing rules for share transfers to NRIs
The Reserve Bank of India has issued new pricing rules for shares being issued or transferred to overseas Indians under the foreign direct investment policy.
According to new rules the price at which the shares are issued or transferred has to be the same as the price as per SEBI guidelines for the allotment, the RBI said in the guidelines put on its website.
Earlier, the minimum price was the same as the existing market price or that worked out by a licensed chartered accountant, the bank said.
If the overseas Indians are transferring shares to local residents the transfer price must not exceed the price at which the overseas Indian got the shares.
According to new rules the price at which the shares are issued or transferred has to be the same as the price as per SEBI guidelines for the allotment, the RBI said in the guidelines put on its website.
Earlier, the minimum price was the same as the existing market price or that worked out by a licensed chartered accountant, the bank said.
If the overseas Indians are transferring shares to local residents the transfer price must not exceed the price at which the overseas Indian got the shares.
RBI asked banks to install extra cover to make mobile and phone banking safe
The Reserve Bank of India have issued instructions to banks to make mobile and phone banking safe to avoid identity frauds in non branch banking services.
To provide safety banks will have to install an extra cover guaranteeing the legitimacy of the customer carrying out the debit or credit card transaction through the phone. The RBI has strictly warned the banks that if they failed to do so they will have to pay penalty.
The RBI said that banks will have to complete this process by next year in which the debit and credit card customers will given an extra password for IVR (Interactive Voice Response) transactions.
Thus after the new security measure the customer will have to dial another extra password to verify the transaction other than the information which he had previously used for the transaction.
This measure has been taken to stop the increasing number of frauds using non branch methods. Earlier, from April 2009, RBI had instructed the banks to give an extra verification system based on the details not given on the cards, in case the card was not physically present.
However it is planning to extend this measure to include IVR transactions.
The security codes provided for security measures will vary from those seen on the cards.
The banks will also introduce system of ‘Online Alerts’ to the cardholder for the transactions where ‘card is not present’ worth Rs. 5000 and more.
To provide safety banks will have to install an extra cover guaranteeing the legitimacy of the customer carrying out the debit or credit card transaction through the phone. The RBI has strictly warned the banks that if they failed to do so they will have to pay penalty.
The RBI said that banks will have to complete this process by next year in which the debit and credit card customers will given an extra password for IVR (Interactive Voice Response) transactions.
Thus after the new security measure the customer will have to dial another extra password to verify the transaction other than the information which he had previously used for the transaction.
This measure has been taken to stop the increasing number of frauds using non branch methods. Earlier, from April 2009, RBI had instructed the banks to give an extra verification system based on the details not given on the cards, in case the card was not physically present.
However it is planning to extend this measure to include IVR transactions.
The security codes provided for security measures will vary from those seen on the cards.
The banks will also introduce system of ‘Online Alerts’ to the cardholder for the transactions where ‘card is not present’ worth Rs. 5000 and more.
RBI asked banks to install extra cover to make mobile and phone banking safe
The Reserve Bank of India have issued instructions to banks to make mobile and phone banking safe to avoid identity frauds in non branch banking services.
To provide safety banks will have to install an extra cover guaranteeing the legitimacy of the customer carrying out the debit or credit card transaction through the phone. The RBI has strictly warned the banks that if they failed to do so they will have to pay penalty.
The RBI said that banks will have to complete this process by next year in which the debit and credit card customers will given an extra password for IVR (Interactive Voice Response) transactions.
Thus after the new security measure the customer will have to dial another extra password to verify the transaction other than the information which he had previously used for the transaction.
This measure has been taken to stop the increasing number of frauds using non branch methods. Earlier, from April 2009, RBI had instructed the banks to give an extra verification system based on the details not given on the cards, in case the card was not physically present.
However it is planning to extend this measure to include IVR transactions.
The security codes provided for security measures will vary from those seen on the cards.
The banks will also introduce system of ‘Online Alerts’ to the cardholder for the transactions where ‘card is not present’ worth Rs. 5000 and more.
To provide safety banks will have to install an extra cover guaranteeing the legitimacy of the customer carrying out the debit or credit card transaction through the phone. The RBI has strictly warned the banks that if they failed to do so they will have to pay penalty.
The RBI said that banks will have to complete this process by next year in which the debit and credit card customers will given an extra password for IVR (Interactive Voice Response) transactions.
Thus after the new security measure the customer will have to dial another extra password to verify the transaction other than the information which he had previously used for the transaction.
This measure has been taken to stop the increasing number of frauds using non branch methods. Earlier, from April 2009, RBI had instructed the banks to give an extra verification system based on the details not given on the cards, in case the card was not physically present.
However it is planning to extend this measure to include IVR transactions.
The security codes provided for security measures will vary from those seen on the cards.
The banks will also introduce system of ‘Online Alerts’ to the cardholder for the transactions where ‘card is not present’ worth Rs. 5000 and more.
RRB customers to get online facility & biometric ATM cards for banking transaction
Almost all the nationalized commercial banks offer on-line transaction facilities, working on the same line, Rushikulya Gramya Bank (RGB) in Orissa will soon offer on-line transaction facilities and issue smart and biometric ATM cards to its customers.
The bank will update its technology in association with its sponsor Andhra Bank. First the bank will implement Core Banking Solution (CBS) in all its 81 branches located in southern Orissa’s Ganjam and Gajapati districts.
The bank plans to bring all its branches under CBS by March 2011 as against the last date of September 2011 set by the central government.
The Centre has also instructed all the RRBs (regional rural banks) across the country that by the end of September next year they should implement CBS facilities in all their branches with the help of their respective sponsor banks.
Chairman of the bank P V S T R Seshagiri Rao said, "We have already prepared the roadmaps for the CBS in support of our sponsoring bank Andhra Bank."
Most probably in July the first branch having CBS facility will start operations and by the end of September around 50 per cent of the branches will be covered under CBS. He said by the end of the current fiscal all branches are likely to be covered under CBS.
He said, "We will tie up with Andhra Bank to use the ATMs of the sponsoring bank by the customers of RGB after implementation of the CBS. Any customer of RGB will operate their transaction through ATMs of Andhra Bank anywhere in the country like any other commercial banks."
The bank will update its technology in association with its sponsor Andhra Bank. First the bank will implement Core Banking Solution (CBS) in all its 81 branches located in southern Orissa’s Ganjam and Gajapati districts.
The bank plans to bring all its branches under CBS by March 2011 as against the last date of September 2011 set by the central government.
The Centre has also instructed all the RRBs (regional rural banks) across the country that by the end of September next year they should implement CBS facilities in all their branches with the help of their respective sponsor banks.
Chairman of the bank P V S T R Seshagiri Rao said, "We have already prepared the roadmaps for the CBS in support of our sponsoring bank Andhra Bank."
Most probably in July the first branch having CBS facility will start operations and by the end of September around 50 per cent of the branches will be covered under CBS. He said by the end of the current fiscal all branches are likely to be covered under CBS.
He said, "We will tie up with Andhra Bank to use the ATMs of the sponsoring bank by the customers of RGB after implementation of the CBS. Any customer of RGB will operate their transaction through ATMs of Andhra Bank anywhere in the country like any other commercial banks."
Subscribe to:
Posts (Atom)