RBI cold to mobile wallet

http://www.business-standard.com/india/news/rbi-cold-to-mobile-wallet/485509/

Reserve Bank of India deputy governor H R Khan on Wednesday said mobile telephone operators cannot be permitted to provide a cash-out facility from virtual wallets to customers, as such an activity would amount to ‘bypass banking’. However, they could do so if they acted as a business correspondent (BC) to a bank, he added.

Recently, Airtel had launched m-wallet services that enable a customer to make utility payments and transfer money from one user to another. By the norms, mobile transactions are permitted only if attached to a specific use, such as paying electricity bills or shopping at retail establishments that accept mobile payments.

RBI does not allow encashment of the balance available in mobile wallets, though mobile operators are reported to have requested the banking regulator to allow them to provide a cash-out facility to their customers.

“Basically, it is an e-money product, so we have to see that mobile network operators do not get into ‘bypass banking’ and that is why we said cash-out will not be permitted. Of course, if it acts as a BC, then at the BC point, cash-out is permitted,” said Khan. He was addressing the Annual Ficci-IBA Banking Conference on Wednesday. He added mobile banking and payments have to be a bank-led model, as a mobile operator will only be able to provide remittance services and not full-fledged services such as bank does.

Khan said mobile banking transactions grew 140 per cent in terms of volume and more than doubled in terms of value over the year ended June 2012. “The whole idea is that there is great potential to grow, as it can be used for payments of goods and services without customers having to carry any additional card. But we have a limitation as far as cash-out is concerned,” he added.

Security, privacy and acceptability are other obstacles in the way of moving towards mobile payments. Also, merchant establishments do not accept electronic payments, in order to evade tax obligations. A panel discussion here on mobile payments had suggested allowing cash-out facility to boost mobile wallet usage.

SBT opens GM-led network office in Thiruvananthapuram

http://www.thehindubusinessline.com/industry-and-economy/banking/article3865571.ece

State Bank of Travancore (SBT) has introduced an internal exercise aimed at administrative restructuring and decentralisation of powers. This would effectively mean the Office of the General Manager moving out from the confines of its headquarters here to the respective areas of business operations.

On Wednesday, the bank opened the first such centre of decentralised operations in the capital city.

It is called the Office of the General Manager (Network-Thiruvananthapuram) or simply Network 1, and is headed by K. N. Murali, General Manager.

The new office will coexist with the business and operational headquarters of the 67-year-old bank situated elsewhere in the city at Poojappura.

Minister for Health and Family Welfare V. S. Sivakumar inaugurated Network 1 at a function held here on Wednesday. Speaking on the occasion, he said that SBT deserved to be congratulated for initiating a move for bringing its network and services still closer to customers.

This signalled how SBT, the only public sector to operate out of the State and always considered as its own, has stuck to its avowed ‘customer first’ principle.

Retaining the trust of people is crucial to any business, be it banking or otherwise. That SBT has been able to do exactly it for such a long time speaks volumes of how it has been able to strike a common chord with customers.

The Minister also lauded the SBT management for initiating a number of socially relevant activities through its community banking outfit.

He recalled how the banking industry has come in for flak in recent times, especially on the education loan front.

“These are issues that deserve close attention and treatment,” the Minister remarked. These are also demanding times which call for more intensive and meaningful social initiatives from responsible corporate citizens such as SBT, he added.

Second network

In his welcome address, K. N. Murali, head of Network 1 of SBT, said that the bank had embarked on a restructuring exercise in its retail banking network.

While Thiruvananthapuram will host Network 1, Ernakulam will progressively become the centre for the second network (tentatively called Network 2).

Network 1 will lord it over 447 branches that would come under its tutelage in Thiruvananthapuram and Kottayam zones within the State as also the Mumbai and Delhi zones elsewhere.

All five districts in the State are expected to migrate to Network 1 in phases, Murali said, which would make for business volumes of Rs 50,000 crore.

Deposits grow 14 per cent - annual y-o-y growth

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/deposits-grow-14-per-cent-farm-loans-boost-credit-offtake/articleshow/16279096.cms

Banks are seeing a modest growth in both deposits as well as credit, the latest Reserve Bank of India data shows. While aggregate deposits stood at Rs 63 lakh crore as on August 24, loans were at Rs 47 lakh crore. At these levels, the annual year-on-year growth in deposits works out to 14.12 per cent, compared with RBI's projection of 16 per cent. The annual credit growth is 16.66 per cent, almost in line with central bank's projection of 17 per cent for the current fiscal. 

On an incremental basis, deposit growth is 6.3 per cent compared with 5.5 per cent a year ago, while loans have grown by 2.4 per cent compared with 2.8 per cent a year ago. At the system level, credit growth has been more or less in line with the projections of the central bank, but deposit growth has lagged this year. The credit to deposit ratio is about 73 per cent — this means out of every rs 100 raised as deposits, banks are lending Rs 73. However, on an incremental basis , the ratio works out to only 30 per cent. 

The country's largest bank, State Bank of India, has slashed deposit rates by 50 to 75 basis points (one basis point is 0.01 per cent) as it is surplus in deposits. As per the new base rate system, this will give the bank room to cut lending rate as well. "As of now, we are surplus in deposits. For SBI, the challenge is more in pushing credit," said Pratip Chaudhuri, chairman, SBI, on the sidelines of a banking conference in Mumbai. 

ICICI Bank planning to allow transactions via Facebook

http://www.thehindubusinessline.com/industry-and-economy/banking/article3862441.ece

ICICI Bank today said it is working towards allowing its customers to carry out transactions through social networking site Facebook.

The bank is close to 8 lakh Facebook likes and is the only bank in the world which has an application to see bank statement as well as put some servicing request on Facebook, the Mumbai-based bank’s Chief Technology Officer Mukesh Kumar Jain said.

“It would be premature to say anything on this now. But we are working on that (allowing transactions through Facebook). Over a period of time, say next few months or so, you will hear some news about it,” he told reporters here at an event.

“We have got into the Facebook because the younger generation will be visiting that place. We are able to give them secured account information,” Mukesh Kumar Jain added.

ICICI Bank is one of the early movers to tap social media platform to let customers access online banking features through Facebook.

The largest private bank allows its customers see bank statements, check account details, place request for cheque books and upgrade debit card from Facebook homepage.

On security aspects with regard to the Facebook Apps, he said account information is well secured.

“We don’t see security as a big challenge. ICICI Bank will not have taken the step if we were not sure of security. We will never put customer data in danger,” he replied.

SBI cuts fixed deposit rates by 0.5-1%

http://www.thehindubusinessline.com/industry-and-economy/banking/article3861781.ece

The country’s largest bank SBI today announced a reduction in interest rate on fixed deposits by 0.5 per cent for most of the maturity periods, a move likely to be followed by other lenders.

However, for deposits between 241 days and one year, the downward revision is 1 per cent. The new rate would be 6.5 per cent as against 7.5 per cent.

Of the total of nine maturity periods for fixed deposits, a 0.5 per cent downward rate revision has been announced for 6 categories.

The new rates would be effective from September 7, SBI said in a statement.

With the revision, the interest rate on 7-90 days fixed deposit would come down to 6.50 per cent, from 7 per cent.

Similarly, term deposits of 91-179 days would be down by 0.5 per cent, at 6.50 per cent and 180 days fixed deposits would also attract 6.50 per cent interest rate.

Fixed deposits with maturity of 181-240 days would now provide interest rate of 6.50 per cent, down from 7.25 per cent.

For one year to less than two-year maturity period fixed deposits, the new rate will be to 8.5 per cent as against 9 per cent, down by 0.5 per cent.

At the same time, the interest rate for fixed deposits with maturity period between two-three years and three-five years has been slashed by 0.5 per cent to 8.5 per cent.

However, the bank has left interest rates unchanged at 8.5 per cent for term deposit of 5-10 years.

EMI waiver for credit worthy customers - on Housing Loans: Axis Bank

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/emi-waiver-for-credit-worthy-customers-axis-bank/articleshow/16265020.cms

Axis Bank, on Wednesday launched a home loan product with a built-in equated monthly installment waiver scheme. The bank has decided to waive off the last 12 EMIs of customers with good credit history and pays his EMI on time. 

The product would be offered at the same rates as a regular loan, and would be applicable to new customers under floating rate option. The EMI waiver would be offered to all loans with an initial tenure of 20 years or more that cross their 15 thyear with Axis Bank. Any customer who pays EMIs on time would be automatically eligible for the benefit. As with the standard Axis Bank home loan, Happy Ending home loans would come with zero prepayment penalty,'' said the bank in a statement. 

For a customer taking a home loan for Rs 50 lakh at 11% floating rate, the EMI per lakh of loan size would be Rs1,032. For such a customer taking a Happy Ending home loan, the EMI waiver would be worth upto Rs. 6.19 lakh. 

SBI to ramp up point of sale terminals by over 5-fold to 1 lakh by March

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/sbi-to-ramp-up-point-of-sale-terminals-by-over-5-fold-to-1-lakh-by-march/articleshow/16265648.cms

The country's largest lender State Bank of India is targeting to massively increase its point of sale (PoS) terminals to one lakh by next March from the current 18,500, a senior official said here today. 

"We are targeting to take the total number of PoS machines to 1 lakh by the end of March and 32,000 by the end of October," SBI chief general manager for new businesses R Karthikeyan told reporters on the sidelines of the FICCI-IBA conference here. 

The bank is engaging with retail chains and other merchants to roll out these terminals and achieve the target, he said, conceding that public sector banks have been late starters on the front. 

Private sector Axis Bank is the market leader in the merchant acquisition business with nearly 2.30 lakh PoS terminals deployed. 

Karthikeyan said core banking platforms are essential for entering the PoS space and hence, private sector lenders were the first off the mark. However, with the CBS platforms of public sector lenders maturing, they are now entering the fray aggressively, he said. 

Putting up a PoS terminal helps strengthen the fee income component for banks. The merchant pays a commission of up to 1 per cent per transaction, which is shared between the bank setting up the PoS terminal, the card issuing company and the payment gateway like Visa or MasterCard used. 

With its 18,500 machines deployed, SBI is at present witnessing a turnover of nearly Rs 4 crore per day and the average value transacted is also increasing, Karthikeyan said. 

The bank had first entered into a joint venture tie-up with a consortium of Visa and Elavon for rolling out 6 lakh POS terminals in 2010 but the JV did not work out due to issues over revenue sharing, royalty and usage charges, Karthikeyan said. 

The bank is now going solo by engaging a technology service provider for the initiative, he said. 

The proposed roll-out will be done in tier-I and II cities, as well as rural areas, Karthikeyan said, stressing that the PoS roll-out is a part of its strategy to encourage the use of electronic mode for transactions. 

Karthikeyan further said to entice more merchants, the bank would soon be announcing a cash-back scheme for them as a value proposition.