Cash at your fingerprints

http://www.thehindubusinessline.com/industry-and-economy/banking/cash-at-your-fingerprints/article4262564.ece

Using your credit card or mobile phone to withdraw cash or make payments will be passé in the not-so-distant future, when all you need will be your fingerprints.

The nationwide rollout and adoption of Aadhaar smart cards for identification purposes promises to be a game-changer and an equaliser in the financial services landscape of India, says electronic payment service provider Visa’s Group Country Manager for India and South Asia, Uttam Nayak.

Visa has tied up with the Unique Identification Authority of India (UIDAI) to develop a payments ecosystem atop the Aadhaar platform that will facilitate financial inclusion and boost the electronic payments culture in India.

“Aadhaar is a 12-digit number and it only helps to prove your identity. We went to them in 2010 and suggested linking it to a bank account,” says Nayak.

With Aadhaar utilising biometric fingerprint recognition to build a database on the nation’s citizens, Visa plans to utilise the same technology to facilitate payments.

“Eliminate the card and the phone and the Internet: use your finger. We are linking the Aadhaar number, your card number and your phone number to your finger. Your credentials are saved one time. The revolution is: more reach, with more access to payment, because the form factor is eliminated,” he says.

Visa has also assumed the role of a banking correspondent to ensure that all Aadhaar cardholders can open a bank account. Once an individual receives an Aadhaar, they are automatically ready to be issued a Visa Instant Account, simplifying the KYC criteria.

Prior to this, customers would have had to provide numerous documents to fulfil the banks’ KYC requirement.

“We will do what can be termed e-KYC (electronic Know-Your-Customer), which is paperless and instant opening of a bank account. We will pull your registration information from Aadhaar, your photograph, all the contact details that are required to open a bank account and convert it into an electronic form of the bank that is present at a specific kirana outlet.

South Indian Bank business set to touch Rs 75,000 cr

http://www.thehindubusinessline.com/industry-and-economy/banking/south-indian-bank-business-set-to-touch-rs-75000-cr/article4240757.ece

South Indian Bank is all set to achieve a business target of Rs 75,000 crore by March 2013 as envisaged in the Vision Document 2008.

SIB's five-year business plan — Vision 2013 — was drawn up in 2008 to achieve Rs 75,000 crore business, 750 branches, 750 ATMs and 7,500 employees.

V. A. Joseph, Managing Director and CEO, toldBusiness Line that the bank has been able to clock Rs 67,000 crore in total business as on date.

Its employee strength is at 6,800, the number of branches 740 and ATMs 775.

“We hope to achieve the target of Rs 75,000 crore and 7,000 people by the end of March 31. We might just exceed some of the targets,” he said.

Ten more branches are to be opened shortly in Gujarat, West Bengal and Maharashtra, he said. The bank hopes to open another 25 ATMs by March 2013 taking the total to 800.

Dishonouring a cancelled draft is no crime

http://www.thehindubusinessline.com/industry-and-economy/banking/dishonouring-a-cancelled-draft-is-no-crime/article4245592.ece

A payee cannot haul a bank under Section 138 of the Negotiable Instruments Act for not honouring a demand draft that is cancelled by the person who got the draft made before being presented to it, held the Delhi High Court in State Bank of Patiala v. Nascent Educational and Development Society. 

A demand draft, unlike a cheque, is issued by a bank for consideration already received and hence cannot possibly be dishonoured on the ground of lack of funds; but a bank cannot be compelled to honour the draft in the face of a cancellation instruction by the person who got it issued from the bank. 

The payee, therefore, has no recourse to the bank including proceeding against it under Section 138 of the Act for criminal liability in such circumstances. However, he can proceed against the debtor under the civil laws.

Three things Indian Americans should prepare for before the tax year ends

http://economictimes.indiatimes.com/news/nri/nri-tax/three-things-indian-americans-should-prepare-for-before-the-tax-year-ends/articleshow/17664844.cms

As tax year 2012 draws to a close, it's time for US taxpayers to make the most of current provisions and also prepare for the tax filing season ahead. We tell you the top 3 things that Indian Americans should keep in mind now. 

Be prepared for expiry of Bush Tax Cuts 

The Bush Era tax cuts that were introduced after the financial crisis are set to expire in 2012. Some of these include: 

> The standard deduction for married couples will fall and the ceiling of the 15% bracket for married couples will fall 

> The 10% tax bracket will expire, reverting to 15% 

> The child tax credit will fall from $1,000 to $500 

> The tax rate on long-term capital gains earned by middle- and upper-income people would rise from 15% to 20% 

> The tax rate on qualified dividends earned by middle- and upper-income people would rise from 15% to ordinary wage tax rates 

> Tax brackets would change: the 25% tax rate would rise to 28%; 28% to 31%; 33% to 36% and 35% to 39.6% 

These are some of the major cuts in the offing. You can get more details here. 

Unless the Congress votes for extension, the low tax regime will be replaced by higher rates. If the stakes are high, you may want to consult a tax planner to review your position and find ways to minimize taxes. 

For instance, most experts agree that the current rate of 15% for capital gains is as good as it can get. "If someone has shares which could be disposed off before the end of the year for a gain and buy them again early next year, that would allow the gains to be taxed at the 2012 tax rate. The wash rule is applicable only for capital losses and not gains," explains Roy Vargis, an Illinois based CPA and promoter of IndianCPA.com. This might be a good time to review your Indian portfolio. Long term capital gains are tax free in India but taxed in the US for US residents, green card holders and citizens. If you have a large portfolio of Indian securities, you may want to employ this strategy to minimize your tax bill. 

For those placed in the IT consulting space, Vargis says that it may be ideal to receive incentives and bonuses before the year ends. "In several IT consulting companies, employees are given control over when they can receive their bonuses," he adds. 

Of the few other things to do, conversion to the Roth IRA might be a good one right now. If you have been putting off conversion to the Roth IRA, now might be a good time to act. If tax rates go up, you will benefit from conversion. If rates don't change, you have nothing to lose. 

Banking Bill passed by Lok Sabha; allows foreign investment in sector

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking-bill-passed-by-lok-sabha-allows-foreign-investment-in-sector/articleshow/17666692.cms

The Banking Amendment Bill, a major reforms legislation, on Tuesday got approval of the Lok Sabha after the government dropped the controversial provisions relating to allowing banks to trade in futures and keeping the sector outside the purview of Competition Commission. 

"Since the bill is too important for me to pass, therefore I am bringing the Bill dropping the controversial clauses," Finance Minister P Chidambaram said, winding up the discussion on the Banking Laws (Amendment) Bill, 2011. 

The Bill, which seeks to strengthen banking regulation, was later passed by the voice vote after the amendments proposed by the Left Parties were rejected by the House. 

The Bill, along with proposed legislations on pension and insurance, was one of the five key reforms measures on the government's agenda during the current session of Parliament. 

The government dropped the controversial changes in the Bill in deference to the wishes of Opposition, the Minister said, adding it has accepted all major recommendations of the Standing Committee on Finance. 

On the proposal to allow banks to participate in the commodity futures trading, he said, it was based on the recommendations of the Standing Committee on Food and Consumer Affairs and report of the Reserve Bank's working group. 

As regards other issues, he said, while RBI would regulate the banking sector, the Competition Commission of India (CCI) would look into competition practices in the banking sector. 

The Minister also expressed the commitment of the government to infuse Rs 15,000 crore into public sector banks in the current financial year and retain their basic character. 

Expect RBI to soon relax norms for entry of foreign banks: Rao

http://www.indianexpress.com/news/expect-rbi-to-soon-relax-norms-for-entry-of-foreign-banks-rao/1046599/

The Reserve Bank is soon expected to relax norms for entry of foreign banks into the country, a top government official today said.

"RBI is very soon, I believe, is going to announce a very progressive policy for permitting opening of more foreign banks..." Commerce Secretary S R Rao said.

He was speaking at a CII function on 'Driving South Asia Economic Integration'.

"I do hope that with far more regional integration of economies and commerce, the market forces themselves will demand that each of the central banks of sovereign nations take similar calls and I am sure the time is propitious and it is going to happen sooner than later," he said.

Currently, expansion of foreign banks in India is on a reciprocal basis.

India and Pakistan are negotiating issues with regard to opening up of bank branches in each other territory to facilitate trade and commerce.

As per the World Trade Organisation agreement, India allows opening of 12 branches of foreign banks in a year.

Last year, the RBI in a discussion paper suggested that foreign banks should be incentivised to operate in India as wholly-owned subsidiaries, as against the current system of having presence through branch network.

"On balance, the subsidiary model has clear advantages over the branch model despite certain downside risks... There may be a need to incentivise the subsidiary form of presence of foreign banks," it had said.

At present, there are about 34 foreign banks operating in India, with five major banks, including StanChart, HSBC, Citibank and Deutsche, accounting for over 70 per cent of the total asset size of overseas lenders in the country.

In a first, SBI takes its officers' body to court

http://www.business-standard.com/india/news/infirst-sbi-takes-its-officers-body-to-court/495844/

For the first time in its 200-year history, State Bank of India has taken its officers’ association to court for resorting to a work-to-rule agitation and demonstrations in September that hit the business of the country’s largest bank.

In its interim injunction, the Bombay High Court on December 3 restrained the association from holding demonstrations, hunger strikes and relay fasts at the bank’s headquarters and branches until further orders.

The trigger for the agitation by the officers’ association was the SBI chairman’s August statement about his plan to introduce seven-day banking to meet the challenges of growing competition.

Though the members of the association did not go on strike, they protested through demonstrations and a call to officers not to cooperate with the proposed changes by the management.

While granting interim injunction, judge S J Kathawalla said the association had the liberty to write to the SBI management to refer disputes to a mediator. SBI, the order said, could refer the matter to a senior advocate specialising in labour matters for mediation.

The court will take up the matter again on Tuesday (December 18).

The officers’ association is in the process of filing a reply to the SBI petition. The association’s general-secretary, D S Rishab Das, declined to respond to queries on the issue.

The SBI brass has been in talks with officers’ representatives on service conditions, including working hours. SBI officials maintain an agreement signed in 2003 provides flexibility for changing the banking hours. “Seven-day banking does not mean the bank would ask employees to work on all seven days,” an official said.

The SBI chairman and top officials held negotiations with the office-bearer of the association on October 4 but the talks did not yield fruit. After officers in some circles held demonstrations on November 30, the management moved court for action. An office-bearer said the move for seven-day banking was at odds with unions fighting for introducing a five-day week for bank employees.

Meanwhile, SBI has sought an explanation from the association for allegedly instigating officers to protest against the management. It also issued chargesheets and showcause notices to some leaders. Some of these leaders have filed writ petitions, while others are in the process of filing petitions in high courts.