ADOPT TECH TO BRING DOWN TRANSACTION COST: RBI TO BANKS

The Reserve Bank deputy governor KC Chakrabarty asked bankers to bring down the cost of their services through technology adoption, which in turn can speed up their growth and help achieve the central bank's goal of taking banking services to the unbanked sections.

Sounding disappointed with the pace of technology adoption by banks, he said, "technology has not contributed to the desired extent for our banking sector." However, he added that "I am not saying we have not benefited. ATMs and CBS (core banking solutions) are products of technology...but we have not grown the way we should have. Technology should bring phenomenal changes."

The problem, Chakrabarty said, is that technology initiatives by domestic banks are not customer-centric but prodded by the regulatory requirements.

Pointing out that ineffective use of technology has held back banking penetration, Chakrabarty said the country had 6.42 branches per one lakh population in 2001 which has only gone up to 6.6 now. Similarly, the operational cost per Rs 100 of business has come down marginally from Rs 2 to Rs 1.6, which should have gone down further, he said.

Urging banks to have an IT vision in place which is in tandem with their business plan, he said banks need to bring in standardisation and reduce the workload at branch level so that they can concentrate on serving the customer better.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Adopt-tech-to-bring-down-transaction-cost-RBI-to-banks/articleshow/6486944.cms

RBI ASKS BANKS TO GIVE REASONS FOR RETURNING CHEQUES

Keeping in view the larger interests of customers, the Reserve Bank of India (RBI) asked banks to inform account holders on the reasons for a cheque being returned or dishonoured.

Banks are advised to indicate the date of return in the 'Cheque Return Memo' without fail, the RBI said in a statement.

The memo that should accompany a cheque dishonoured or returned for any reason is a critical document, more so in case recourse to legal action is necessitated, it said.

Instruments returned unpaid should have a signed objection slip on which a definite and valid reason for refusing payment must be stated, it said.

Certain instances of banks not mentioning the date of return on the cheque return memo have been brought to RBI's notice, it said.

Source: http://www.business-standard.com/india/news/rbi-asks-banks-to-give-reasons-for-returning-cheques/107659/on

GOT 1 CRORE? OPEN A/C AT SBI'S EXCLUSIVE BRANCH

To match its rivals' suite of services like private bankers, portfolio management and other customized offerings to the mega wealthy, SBI launched a ‘crorepati only' branch in Hyderabad. Located in the city's upmarket Banjara Hills area, the only criterion required to open an account in the branch is simple: a minimum opening balance of Rs 1 crore. That too only if you have an invitation from the bank.

Christened the ‘Kohinoor Banjara Premium Banking Centre' (after the famed Kohinoor diamond that was discovered here), the swanky branch, spread over 4,000 sq ft, will see SBI roll out the red carpet for Hyderabad's nawabs, nouveau and old. It will offer them specialized banking facilities like personalized relationship managers, 24/7 lockers, extended banking hours, doorstep pick-up and drop facilities, in addition to pampering with five-star amenities at the branch.

So the city's wish set, most of which is concentrated around the Banjara Hills and Jubilee Hills area, can bank king size while they chill out in the plush comforts of the branch's ‘Nizam lounge' , hold business conferences in its WiFi enabled ‘Sapphire' conference room and sip a cuppa and munch on refreshments in the ‘Pearl' coffee bar.

They can even change in the ‘Opal' dressing room attached to the ‘Topaz' locker room. The opulence of the branch, on which Rs 80 lakh has been spent, is best reflected in the fact that even its washrooms are named after gems —Oynx and Garnet.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Got-1-crore-Open-a/c-at-SBIs-exclusive-branch/articleshow/6483491.cms

PNB CHARTS GROWTH PLANS OVERSEAS WITH JSC BANK BUY

Punjab National Bank (PNB), has charted plans for inorganic expansion in the central Asian country of Kazakhstan, with the decision to acquire a 64% stake in JSC Dana Bank for $24 million by 2010.

According to Mr. M.V. Tanksale, Executive Director, PNB, currently, RBI is undertaking due diligence exercise on the acquisition proposal.

PNB has global presence in nine countries, with branches at Hong Kong, Kabul and Dubai and representative offices at China, Almaty, Dubai, Shanghai and Norway. The bank has a subsidiary in London with five branches and the turnover is around $2 billion. The bank will shortly start a subsidiary in Canada to tap its huge Punjabi population. It plans to open a representative office in Sydney besides upgrading its representative offices in China and Norway. 

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/PNB-charts-growth-plans-overseas-with-JSC-Bank-buy/articleshow/6482758.cms

NEW EDS FOR CENTRAL BANK, UNION BANK

Mr S.S. Mundra assumed charge as Executive Director of Union Bank of India. Prior to this he was the Chief Executive overseeing Bank of Baroda's European Operations.

Ms Vijayalakshmi Iyer, took charge as Executive Director of Central Bank of India. Prior to this, she was General Manager with Union Bank of India, holding charge of credit department. She has also worked in risk management and information technology departments.

Mr Rajiv Kishore Dubey also took charge as Executive Director, Central Bank of India. Prior to this, he was General Manager of Punjab National Bank, holding charge of marketing division.

Source: http://www.thehindubusinessline.com/2010/09/04/stories/2010090451710600.htm

IDBI SETS NEW BENCHMARK, NO BALANCE NEEDED FOR ACCOUNTS

In a move aimed at increasing its share of current and savings account (CASA) deposits, IDBI has done away with the concept of minimum balance on these accounts and has waived off most service charges except those pertaining to bounced cheques.

RM Malla, CMD of the bank said the move is aimed at improving low-cost deposits (savings and current account) which stand at 14% — probably lowest in the industry. IDBI has a low share of retail deposits as a large part of its balance sheet originated from the erstwhile Industrial Development Bank of India, which relied largely on wholesale funds.

Until now, IDBI was charging depositors fees in the range of `100 to `200 if the quarterly average balance fell below `5,000. In case of current account, the fee was `10,000.

The services on which the bank has waived off interbank charges include cash withdrawal from ATMs above `10,000 a month. Most banks charge in the region of `10-20 for cash withdrawals above `10,000 if it is from another banks ATM.

Penalty on cheque bouncing is the only charge that has been retained. “It is an issue of governance and that is the only service for which the customer would be charged,” said Mr Malla.

Other services on which charges are waived off include demand draft (DD) issuances charges, DD cancellation charges, cash service charges (where customers are charged if they deposit a huge amount of cash in a branch), cheque book charges, stop payment charges, outstanding cheque collection charges, account statement charges, pay order charges, issuance of new card and standing instruction charges, among others.

IDBI will be the first bank to do away with minimum balance requirement and simultaneously waive off service charges. Most private and foreign banks are waiving off some service charges for saving and current customers, provided they maintain a minimum balance of `25,000 on a monthly or quarterly basis. On the other hand, there are banks which do not insist on minimum balance but charge customers on every service they provide.

Mr Malla said he is very hopeful that the bank’s CASA will touch around 20% by the end of this fiscal through this new approach. When asked if the bank’s fee income will be affected due to the waiver of charges he said: “Our assumption is that the benefits to the bank would be far more superior.” However, he declined to indicate the quantum of revenue loss due to the waiver.

When asked when the bank will review the new model he said: “I do not want to withdraw this offer in my tenure as CMD. If this new model fails to attract customers and increase CASA, I would assume that either our communication has failed or it is not backed by service.” Mr Malla has three years term at IDBI Bank.

IDBI Bank, which was earlier a financial institution and was merged with IDBI Bank in 2004, has around 35 lakh customers.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/IDBI-sets-new-benchmark-no-balance-needed-for-accounts/articleshow/6477483.cms

HDFC BANK LEADS THE PACK IN E-TRANSACTIONS

HDFC Bank customers are more open to using technology for monetary transactions, according to the Reserve Bank of India's monthly data on electronic transactions.

The bank holds a sizable lead over competitors in the number of National Electronic Funds Transfer (NEFT) based transactions. In July, the bank recorded more than 27 lakh transactions on the NEFT system, 1 lakh more than its nearest competitor, State Bank of India.

The nearest private sector competitor is ICICI Bank, which reported a little more than 23 lakh electronic transactions.

The RBI has been actively promoting the use of the NEFT system due to its advantages such as better traceability, efficiency, speed and safety. The system is primarily used for person-to-person money transfer over the Internet.

HDFC Bank and SBI also hold the top spots in the value of electronic transactions taking place. According to RBI July data, the value of HDFC Bank's total inbound and outbound electronic transactions stands at Rs 18,252 crore, while for SBI, it stands at Rs 22,329 crore. SBI's transaction values are aided by the massive Rs 17,762 crore of funds being credited in customer accounts through the electronic mode.

In the May-July period, HDFC Bank continued to be on top of the pile, in terms of number of transactions taking place via the electronic mode. The bank had nearly 24 lakh electronic transactions in June and 22 lakh transactions in May, according to the RBI data.

Private player Citibank has also been registering high-value electronic transactions. Despite the number of transactions being nearly half that of ICICI Bank, Citibank's value of electronic transactions is higher. According to the RBI data, Citibank's total value of inbound and outbound electronic transactions stands at Rs 11,733 crore for July, significantly higher than ICICI Bank's Rs 7,487 crore.

Source: http://www.thehindubusinessline.com/2010/09/03/stories/2010090354150100.htm

CIBIL LAUNCHES DATABASE OF MORTGAGED PROPERTIES

Credit Information Bureau (India) Ltd and TransUnion launched CIBIL Mortgage Check — a repository of mortgage information, in consultation with National Housing Bank.

The database will contain information on properties against which owners have availed loans, summaries of those loans and comprehensive information on those properties. It will help lenders share and access mortgage information, exercise stronger due diligence and reduce fraudulent transactions.

Fraudulent deals

Mr Arun Thukral, Managing Director, CIBIL, said that lenders (banks, housing finance companies and NBFCs) are reporting a large number of fraudulent transactions in housing loans. Most of these are multiple loans availed against the same property.

Mr R. Sridhar, Chairman, National Housing Bank and Chairman and Managing Director of Central Bank of India, said that frauds were the main reason for NPAs in housing loans and CIBIL's new tool will help reduce instances of frauds.

Valuation norms

He also said that NHB has finalised the standards of valuation of residential property. Once it is approved by the Indian Banks' Association, it would be applied by all banks and housing finance companies. This will ensure uniform valuation norms for all residential properties and also lay down norms for market intermediaries such as real estate brokers and agents. It will ensure that such intermediaries are regulated and recognised by some professional body, Mr Sridhar added.

NHB is also in talks with State governments to register equitable mortgages (i.e. the property against which bank loan has been availed of), but at a lower cost.

“Under the law there is no need to register the mortgage. The borrower has to only deposit the title deed of the property with the lender. But if it is registered, there will be a record of the mortgage,'' Mr Sridhar added.

Database

CIBIL has a database of 160 million consumer or individual records and has already received over six million mortgage records from lenders.

This number will go up as more lenders begin sharing the information.

Source: http://www.thehindubusinessline.com/2010/09/03/stories/2010090352880600.htm

AIBOC CIRCULAR NO. 128 DATED 2ND SEPTEMBER, 2010

AIBOC issued its circular No. 128 on nationawide strike by Central Trade Unions on 7^th September 2010. We are reproducing the same here for our readers.

CIRCULAR NO:128                                                   2^ND SEPTEMBER, 2010

TO ALL AFFILIATES/MEMBERS:

NATIONWIDE STRIKE BY CENTRAL TRADE UNIONS - SOLIDARITY SUPPORT BY AIBOC

             

The Nationwide Strike will be observed on 7^th September 2010 under the leadership of the Central Trade Unions to protest against the unprecedented rise in the prices of essential commodities and other related issues.  The strike issues are as follows:-

Ø      Unabated price rise and galloping inflation of all essential commodities pushing the common masses to further miseries and widening the gulf between the rich and the poor.  The solution lies in streamlining the PDS.

Ø      Job creation is the need of the hour when over 10 crores of young people are unemployed.  On the contrary the policies speak of job cuts, lay offs, retrenchments, VRS etc.

Ø      Labour Laws to help the workers and Trade Unions in ensuring fair practices and democratic fight to Trade Union actions and formation of TUs.

Ø      National fund for unorganised workers to be get up to protect the life, liberty and livelihood of unorganised workers.

Ø      Disinvestment of PSEs to bridge the budget deficit instead of for social spending on health education and on ameliorating people of BPL in their basic amenities.

The issues are equally dear to us as well.  We have been independently pursuing the struggle on some of the major issues such as reforms in the financial sector, merger and acquisition etc., on a continuous basis. It is in this background, the Executive Committee of the Confederation and the General Secretaries of the affiliates of the Confederation who met subsequently had taken a unanimous view that the strike action of the Central Trade Unions has to be supported through various fraternal support such as participating in the rallies, demonstrations, meetings etc., without striking the work on 7^th September 2010.  

Comrades, our attention has been drawn to some of the mischievous propaganda made by the minority unions that they are crippled from going on strike due to the non-participation of the strike by AIBOC.  They have also tried to quote the names of our beloved leaders with the sinister design of creating confusion amongst the rank and file. We wish to convey our members that such circulars are not new to us.  The leaders of these unions have at least acknowledged that they are minority unions and they cannot on their own agitate on any issues. It is welcome change that, they have decided to follow us. 

However, all our affiliates/state units are requested to extend their total fraternal support to the striking comrades.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

AIBOC CIRCULAR NO. 127 DATED 2ND SEPTEMBER, 2010

AIBOC issued its circular No. 127 on 9^th Triennial General Council to be held at Bhubaneshwar. We are reproducing the same here for our readers.

CIRCULAR NO:127                             2^ND SEPTEMBER, 2010

TO ALL AFFILIATES/MEMBERS:

9^TH TRIENNIAL GENERAL COUNCIL - TEMPLE CITY OF BHUBANESHWAR GETS READY FOR A GRAND GALA EVENT – PROGRAMME DETAILS

Comrades, the Temple City of Bhubaneshwar is getting ready for the historic event of the 9^th Triennial General Council of the All India Bank Officers’ Confederation to be held on 29^th January 2011 to 31^st January 2011 in a grand manner. The leadership of the Orissa State Unit has been geared up to make this a grand gala event in the history of Bank Officers’ movement.  The affiliates are getting themselves prepared to come in a large number to attend this historic event in the Temple City.

The leadership of the State Unit has worked out a well planned schedule for the 3 days eventful General Council to be held in a historic and militant place in the eastern part of our country. We are in constant touch with the leadership of the State Unit to make the programme a meaningful and successful event. The activities of the General Council during these 3 days have been planned meticulously.  The details are as follows:-

DAY & DATE	TIME	PROGRAMME
Friday 28th January 2011	At 3:00 P.M	Curtain Raiser, Media Coverage Press Conference by :  President and   General Secretary
Saturday 29th January 2011	At 11:00 A.M	E.C. Meeting
	At   4:00 P.M	Procession
	At   4:50 P.M	Flag Hoisting
	At   5:00 P.M	Inaugural Session of 9th General Council
	At 7:00 P.M	Cultural activities
Sunday 30th January 2011	At 10:00 A.M	Business Session
	At 1:30 P.M	Lunch
	At 3:00 p.m	Business Session
	At 5:00 P.M	Felicitation to former leaders
Monday 31st January 2011	At 10:00 A.M	Business Session to continue
	At 12:30 P.M	Election Process
	At 2:00 P.M	Lunch

The schedule is finalized taking into account both the sessions of our General Council and also in tune with the convention followed so far.  It is the responsibility of each and every affiliate to ensure a smooth conduct of these activities and also to ensure a large participation of their delegates and observers in the General Council.  The affiliates are also requested to keep the Head Quarter and the Orissa State Unit, informed about the details of their travel plan, stay arrangements, the names of delegates/observers.

Let us all get ready for a grand march towards the Temple City of Bhubaneshwar in order to make this event a memorable one. We are confident that the leadership of the State Unit in Orissa along with hundreds of volunteers will make the General Council a grand success under the able leadership of Com. Ganesh.C.Mishra, President, and Com. A.K.Motayed, Secretary of State Unit.  

For Officers in Banking Industry, all roads lead to Bhubaneshwar.

With warm greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY