Banks asked to cautiously deal with public funds

President of India Mrs Pratibha Patil has advised the money managers and the bankers to follow their responsibility and duties in more professional manner. She advised them to be cautious while handling the hard earned savings of the citizens.

Speaking on the occasion of the Centenary celebration of The Reserve Bank of India she said "I take this opportunity to speak about the importance of upholding highest standards of probity in banking. People put their hard earned money into the banks and therefore , the banks are obliged not to take unbridled risks with that money."

Referring to the recent loan scams, she said that the banks must follow proper guidelines while the allocation of loan. This would contribute greatly towards dealing with the cases of corruption. "All procedures and due diligence, consistent with approved guidelines, must be adhered to, while approving loans by competent authorities as banks play a very important role in building transparent and accountable systems of financial dealings,"

The President was very keen on the role of banks in the developing economy of India. She was very sure that the banks have to play a major role in the achieving the growth rate of 9 percent this fiscal year as well as in the years to come.

Union Bank of India inks deal with BSNL , MTNL

Union Bank of India has signed a memorandum of understanding (MoU) with public sector telecom company MTNL and BSNL.

The bank has already been using the services of MTNL and BSNL for WAN (wide area network) across the country.

According to statement issued by the bank , the telecom company will provide latest network technologies to the bank at highly competitive rates.

All about post office savings account

Apart from mailing facilities post offices also provides several other facilities. Apart from a bank one can also open savings account in a post office. They pay the same 3.5 per cent annual rate as the banks do. The thing that is worth to be noted is that the minimum account required for a post office savings account is very low. One can avail this facility at any post office.

Any adult Indian citizen can open a saving account in any post office. A non resident Indian can not open this account. This account can be opened individually or by two three people can open a joint account

The most important salient feature of this account is that it can be opened with a minimal amount of Rs 50. So this account is very useful for the people who are not financially very sound. Moreover one gets income- tax exemption on the tax that one earns on this account. Under the provision of section 10 sub section 15 of Income-tax act.

The amount can not exceed by 1 lac for an individual account holder and if it is a joint account then the maximum amount in the account can not exceed by 2 lacs. The balances in all those accounts taken together should not exceed for Rs 1lac for each of the account holder.

One can also avail cheque book facility with this account, if one wans to avail this facility then he has to maintain minimum balance of Rs 500 in his account and if one do not wish to avail this facility then he has to maintain a minimum balance of Rs 50 in his account.

This saving account comes with a passbook, in which every transaction is entered and signed by the post office.

If one does not operates his account continuously for three years then the account is treated as a silent account and a penalty of Rs 20 is imposed on the account holder and the penalty is deducted from the account itself on the last day of the tear.

The one disadvantage according to the present day scenario is that this account does not provides with the ATM facility.

Government planning to launch plastic currency

The Government of India is planning to introduce plastic currency in India very soon. Plastic currency is already in practical use in countries like Australia and New Zealand.

"We are seriously considering introducing plastic currency notes in the Indian economy to check the fake currency problem and also for their longevity," Subbarao said while interacting with students of Ranchi University.

The main reason why the government of India is putting efforts to introduce plastic currency in India is to check menace of fake notes. The circulation of these fake notes is not good for the economy.

In recent past there are also cases of issuing of fake notes by the banks or from the ATM. RBI has given assurance that to check this problem they will take appropriate actions very soon.

"RBI is organising several outreach programmes in association with other banks to reach the rural population and the objective is to provide core banking facilities in all the panchayats of the country,"subbarao said

He also said that there is a huge potential of banking sector to grow , as there is still a large rural population that can be included . he furtherly added that our’s is a very fast growing economy and we can even suppress china with the inclusion of rural population.

IDBI Bank offers new products and services for customers

IDBI Bank, a new generation private sector lender has launched a number of products and services for its customers on the occasion of its 7th Foundation Day. These include banking services in all days of the week in five select cities, reduced processing fee for auto loans and an inbuilt overdraft facility for salaried account holders.

In view of this bank has signed a MoU for joint financing of MSMEs with SIDBI.

In its select branches, in five cities, bank has extended seven days banking services. These are Mumbai, Delhi, Chennai, Pune and Bangalore.

In India gold ATMs will be less popular as against across the world

In India mostly people prefer to invest in gold. In the recent years the gold prices has increased which has made it most costly and popular metal.

There are various options of investment in gold and individual must be able to choose the right option. Recently, there was news that in India the gold can be purchased through ATMs (Automated Teller Machines). But there are various issues related to having ATMs dispensing gold.

ATMs have become a convenient route for individuals for their banking requirements and are having become familiar with the mode of operation of the instrument. At the ATM dispensing gold will mean instead of cash these machines will dispense gold. In this case the gold will come out from the machine in the form of coins or bars. However, such machines are already operational in few places across the world. If individual get chance to see such machine can actually see the kind of use that is possible.

The individuals should check the choices that are actually offered by the ATM. Usually there are lot of options that are available so that there can be purchases in different denominations as per the requirement of the individual. The machine can actually dispense coins as small as 1 gm and then go up to bars that are about a 1kg in weight. Here individuals get the option to choose the exact weight that they actually want to buy.

The prices available for transactions are in fact updated and the latest price that will be available in the market. The machine updates the price of gold every 10 minutes so when an individual goes to transact then there is a link to the actual existing prices and this is actually a good thing for the individual.

The location of these machines has to be dome in different manner. These specialized machines you can not find at street corner. They will be extremely few in numbers and would be installed at high-end places. Therefore, an investor who wants to buy gold through a gold ATM, they would have to travel to the place specifically for the purchase.

The individual has to get familiar with nature of the machine and the manner in which this will actually be used. The gold dispensing ATM machine will only sell the gold to the individual and will not buy the gold back from the investor. Therefore, the individual who want to convert the gold into cash will have to do it separately.

The other important thing to be considered is the gold price at which it will be dispensed by the machine. The difference in terms of the price charged as compared to the prevailing market price has to be seen and understood very well.

However, there is time that presence of such machines become a reality in India it is important for the individuals should be aware of the manner of operation of these so that it is beneficial for them.

Vijaya Bank ties-up with MoneyGram for money transfer

Vijaya Bank, a Bangalore based public sector lender is to offer money transfer services at all its branches. The bank has signed an agreement with global money transfer company MoneyGram to offer this service.

Albert Tauro, chairman and managing director, Vijaya Bank, said, “We will offer money transfer facility at all our branches and that will now be facilitated by MoneyGram.”

He added, Thomas Cook and UAE Exchange, travel services providing companies will be part of the agreement who will be providing financial services relating to travel and money exchange.

During the last financial year, the global remittances market was approximately $400 billion and India is one of the major remittances market. Last financial year, from Indian diaspora it had received around $55 billion.

In India around 27% of remittances come from West Asia, though a major chunk is also received from North America.

Tauro added, “We want to tap this market as many of our customers send money from West Asia which is now easily remitted to their relatives in the country.”

He said, in the first half of the financial year Vijaya Bank had received remittances of around Rs 100 crore and the momentum is likely to continue.

He informed that now it will receive money transfer serviced from over 190 countries.

Speaking on the issue, Harsh Lambah, regional director-South Asia of MoneyGram India, said this deal will further strengthen their presence in India.

He added, “We have tied up with public sector banks like Corporation Bank and Punjab National Bank for providing remittance services. After the tie-up with Vijaya Bank, our presence will rise in southern India.”

During April- June period of this fiscal, Vijay Bank had registered a net profit of Rs 173 crore, up by 21 per cent on the back of falling cost of deposit with higher core earnings.

During the same period last year, bank total income increased by 3.8% to Rs 1,520.20 crore from Rs 1,463.42 crore.

Allahabad Bank, Hindustan Motors tie-up for automobile financing

Allahabad Bank, a public sector bank, and Hindustan Motors (HM) has tie-up to provide finance facilities to former’s customers.

Under the tie-up bank will provide a collateral-free loan up to Rs 10 lakh for commercial vehicles and other preferential services exclusive for HM customers across the country, a company statement said.
HM customers can avail retail financing scheme across Allahabad Bank's 2,365 branches nationwide including its 75 centralized retail banking boutiques (CRBB).

The coming month of November will see the first 24-hour payment system being launched by National Payments Corp. of India (NPCI) in India. Through this system bank customers will be able to remit money to any account in India for free using their mobile phones.

A.P. Hota, managing director and chief executive of NPCI informed, “RBI (Reserve Bank of India) has permitted only a pilot run with a limited number of banks. Five banks (State Bank of India, ICICI Bank Ltd, Union Bank of India, Bank of India and Yes Bank Ltd) are already live.” He added soon Axis Bank Ltd and HDFC Bank ltd will be joining the system.

In other part of the world mobile funds transfer facility is run by telecom companies, such as in Kenya (M-Paisa), South Africa (Wizitz) and the Philippines (Smart Cash), in the US and UK are intra bank systems.

NPCI interbank mobile payment system (IMPS) will be the first-of its kind which will allow such transactions between individuals that will be made possible through the banks and the mobile services provider.

According to RBI guidelines, there is a limit of Rs 50,000 per day on mobile transactions. The no-frills savings account holders can also access this service.

To access this service the senders will have to register for mobile banking with their banks, whereas both the sender and receiver must obtain a special Mobile Money ID (MMID) from the bank, apart from sharing their mobile numbers with the bank.

Bank will also provide a personal identity number (PIN) to senders, after which they have to download a mobile banking application on their handset.

Bank will send SMS to both the sender and the receiver confirming a transaction.

This is the first time, India’s first and only integrated retail payment system company is handling such major project in which public sector banks have 60% share while remaining part has been equally divided among the two private and foreign banks each.

There is no involvement of RBI in the daily operations of the company, but has a nominee on the board of directors.

Around ten promoter banks have collectively committed Rs 100 crore as share capital for the company, out of the Rs 300 crore equity capital for expansion. Over the next three to four years NPCI is planning to spend Rs.400 crore to introduce new payment mechanisms and for office expansions.

By September 2011 NPCI will be launching its own electronic card payment system on the lines of Visa and MasterCard, for this company is doing surveys to finalize a brand name, Hota said. RuPay and NPCI will be the front runners.

Advise to banks to install CCTVs in ATMs goes unheeded

With increase in ATM frauds and robberies, RBI and police have instructed banks to install closed-circuit television (CCTV) cameras at their ATMs. Police commissioner T Rajendran informed, in spite of several advisories issued by the police to banks, at least 934 ATM kiosks in the state, including 354 in the city, have not installed CCTV cameras. In a meeting held with RBI officials he said, banks were advised to install CCTV cameras outside their ATMs also.

The police sources told there are around 1,680 ATM booths in the Chennai out of which only 1,326 have CCTV cameras, 1,305 have security guards and only 268 have burglar alarms. Also, out of 5,757 ATM kiosks only 4,823 have CCTV cameras, 4,265 have security guards and only 947 have burglar alarms.

Rajendran said, "At the meeting, we advised them to focus on the infrastructure. Bank branches, ATMs, as well as the process of providing escort to bank personnel carrying cash should be made fool-proof. We discussed net-banking frauds, credit card frauds and phishing mails. We cited the technical difficulties faced while investigating the recent theft at a Thoraipakkam ATM kiosk." He added, "The antecedents of the personnel engaged by banks and the companies hired by them should be verified. Security guards should follow standard operating procedures."

In the meeting RBI regional director KR Ananda, general manager MK Singh, Indian Bank executive director V Ram Gopal, IOB general manager (IT) MS Raghavan, SBI deputy general manager SS Pradhan, Tamilnad Mercantile Bank managing director AK Jeganathan, Canara Bank general manager Lalitha Lakshmanan, Bank of Baroda general manager (south) Usha Ananthasubramaniam, PNB senior manager N Gopu, Union Bank of India assistant general manager Nishish Mobar, UCO Bank deputy general manager DN Routray, ICICI Bank deputy general manager Dinesh Wadhwa, Syndicate Bank general manager Pradeep K Saxena, and HDFC Bank cluster head N Premanand, were present.
Also, Corporation Bank general manager Basti N Shenoy, Central Bank of India general manager S Kannan, additional police commissioners Sanjay Arora and Md Shakeel Akhter, central crime branch deputy commissioner C Sridhar and additional deputy commissioner of police (cyber crime wing) M Sudhakar were present in the meeting.

Use online, phone, ATM services to save from paying extra charges

At the end of the month or quarterly when many of you get your passbook updated or get bank statement some of you have found bank has slapped some charges about which you didn’t have any idea. You might get confused on seeing these charges. But the banks have added more charges to the list of charges.

Now the list of service charges and fees is of three or more pages as banks are encouraging electronic payments and discouraging customers to visit branches. In case you have been visiting your bank branch frequently, the more you will be charged.

For example, instead of visiting bank branch to get statement you can get a duplicate account statement via the internet or through an ATM and you will just pay half the amount you would have paid at a branch.

The banks have different charges for using their customer care services such at ICICI Bank if you request for duplicate account statement at branch or through the customer care service without an interactive voice recording system then you have to pay Rs100. So better to opt for the computerized answering system and pay half the amount for a duplicate statement.

Banks have low charges for using their electronic channels for transactions as this reduces branch’s burden. For example SBI charges Rs5 for each debit transaction in a savings bank account if you have already done 30 debit transactions in 6 months, if done at a branch.

Many people send a request for an amount to be debited directly from their account for an investment or charity or insurance premia and signature verification is sought for these banks such as HDFC and SBI charge Rs50, the service tax and cess is charged additionally. If you ask to set up a standing instruction for debit, the charges will vary from 50-150 depending on the bank.

You can withdraw money five times a month from other bank ATMs, but if you do balance enquiry at the ATM not owned by your bank then some banks charge Rs12-25 for this service. Also, in case of rejection of transaction at other bank ATMs because there was not required balance in your account, then Kotak Mahindra Bank and ICICI Bank charge Rs25 per transaction for certain types of savings accounts.

Depositing cash in a wrong place also attract charges. A statement on the ICICI Bank’s website states, “On deposit of charge/cash in a collector box, a charge of Rs100 will be levied. The charge will be Rs300 in case the deposit amount is above Rs500. Repeat instances of cash deposits through the cheque drop box will attract an enhanced charge of Rs500.”

If your ATM, debit cards or personal identification numbers are sent back to the bank because the address you have furnished to the bank is wrong then you will have to pay Rs50 to compensate, says SBI in its charges list.

There are charges for depositing or withdrawing cash from non-home branch, meaning a branch where you don’t have an account. Kotak Mahindra Bank charges Rs50-10,000 on the basis of Rs2.5 per Rs1,000 deposited or withdrawn at non-home branches. HDFC Bank charges for third-party transacting on your behalf for cash transactions at non-home branches. However ICICI bank does not charge for first cash deposit in a non-city branch per month, but later Rs5 per Rs1, 000, subject to a minimum of Rs150 will be levied.

In case you have shifted your residence away from your bank branch, then close that account and open a new account with a bank branch closer to your new home.

There are other ways to save money include internet banking, phone banking or even ATMs, you can do transactions besides from plain cash transactions. You must check whether bank is charging you for non-maintenance of quarterly balance, in such case if you maintain a fixed deposit of an equivalent amount, most banks don’t charge for non-maintenance when you have an FD.

So, to save from being slapped extra charges it is very important to have an access to an internet banking and telephone banking personal identification numbers as many banking activities come at either no or a lesser charge when done online, via phone or at an ATM. Be careful while accessing your banking accounts using public computers.

StanChart bank launches ‘preferred banking’ for individuals with higher income

Standard Chartered Bank, a foreign based lender has launched ‘preferred banking’ for its affluent customers with high income. According to bank press release this new scheme will offer complete solutions including savings, borrowing and protection to the fast-growing emerging affluent segment consisting of individuals with an annual income between Rs 5, 00,000- Rs 40, 00,000.

Sandeep Das, bank's General Manager for Premium Banking informed, "In India, the emerging affluent is a sizeable and rapidly-growing customer segment at 18 per cent per annum with needs that have been largely underserved and undifferentiated. Their needs are quite distinct from those of the mass market and present a huge opportunity for Standard Chartered."

He said, through this new scheme bank aims to target young, upwardly mobile, techno-literate professionals between 25-40years of age, who look for recognition, convenience and rewards and solutions.

The bank release said, under the scheme, customers will be offered faster and simpler mortgage solutions at preferential rates along and they can avail overdraft facility of up to Rs 3, 00, 000 at the inaugural interest rate of 15 per cent. The release also stated, the customers will be offered world credit card as well as preferred platinum debit card, in which they can earn accelerated reward points and petrol surcharge waivers.

RBI received 41 pc complaints related to ATM malfunctioning

The Reserve Bank of India receives large number of complaints out of which 41% complaints are related to malfunctioning of Automated Teller Machines (ATMs), a senior official informed. In a function head of RBI's specially-instituted committee on improving customer services, M Damodaran said, "Of every 100 complaints we receive, 41 relate to poor functioning of ATMs...ATMs are supposed to finish the transaction in 60 seconds, but sometimes it feels the earlier (manual withdrawal) which took 15-20 minutes was better."

He said the maximum complaints forward by the customers are about not having received cash in spite their accounts showing debit entry and added majority of the affected customers have uncertainties against the "disinterested" call centre executives, who don’t try to solve their problems. Ex-Chairman of capital market regulator SEBI Damodaran, said, "Technology is changing...you are aiming at getting an ATM transaction done in 20 seconds, but the problems need to be solved in double-quick time."

Damodaran also strongly took up case for consolidation of public sector banks and asked for the logic behind the government owning 26 major banks, and competing among themselves. He said, "A lot of problems arise from the small size of banks. An Indian company doing an overseas acquisition cannot raise money from a local bank it has to go to a foreign bank. We should exert pressure for consolidation of banks."

Regarding the recent discussion paper issued on granting new bank licenses, Damondaran said there is a need for an effective method to ensure that new license holders bring banking to the unbanked areas.

Union Bank offers OD facility to its non-frill account holders

As a part of its financial inclusion program Union Bank of India will be providing overdraft facility (OD) to all its non-frills account holders.

MV Nair, chairman and managing director, Union Bank of India (UBI), in his presidential address at a financial inclusion conference, in Chennai said this move will help in bringing customers to the bank for transaction also bank will be able to sell other products.

He said, “The needs of the poor for lifecycle events such as medical emergency, wedding among others are pressing and require immediate fulfillment. The bank will use its village knowledge centers, financial literacy and credit counseling centers, rural self employment training institutes (R-SETIs) and other mediums to spread awareness that to meet their emergency needs, an overdraft facility exits should they require.”

To strengthen the financial inclusion plan bank has drawn a medium term financial inclusion plan 2010-2013 for systematic coverage of the unreached and it aims to cover 32,000 villages in the next years that constitute approximately 5% of the projected number of villages in the country.

Central Bank launched online fund transfer service for remitters in USA

The Central Bank of India has launched a new service of funds transfer called CentFast2India, to enable for the remitters in the United States to transfer funds easily to beneficiaries in India through internet banking.

Chairman and MD of Central Bank, S Sridhar said, “This facility offers a hassle-free funds transfer by remitters in the United States to beneficiaries in India through Internet banking. It gives freedom to the remitter in the United States to remit money at his convenience from any bank account anywhere in the US to any account in India”.

In the beginning the maximum limit of transfer of funds is $5000.

Sridhar said this year bank will be focusing more on retail banking business.

He added, “Our focus was on the corporate sector last fiscal. This year we will focus on retail. We expect to increase our retail growth to 25 per cent in FY’11 from 20 per cent last fiscal”.

Corporation Bank to act as registrar for UIDAI

A Memorandum of Understanding (MoU) was signed between the Corporation Bank and Unique Identification Authority of India (UIDIAI). As per the agreement bank will act as registrar for unique identification project ‘Aadhar’.

In a statement issued by Corporation Bank said, "As per the agreement, the bank would enroll customers for issuing a 16-digit unique identification number by collecting biometric and demographic details as per UID norms."

It added, "The bank has been actively involved in financial inclusion and to provide basic banking services to the excluded population in rural and urban areas."

Up till now the State Bank of India (SBI) has been the first registrar of UIDAI.

'Aadhar' is India's new unique identification system, headed by Nandan Nilekani.

The working process of the AADHAR is based on one’s identify using the AADHAR code any combination of biometric identification, such as fingerprint or retina scans.

You can operate bank account using your mobile phone

Almost all the banks are offering mobile banking facilities. Now in few months the bank customers will be able to withdraw, deposit and transfer cash using mobile phones that too without opening a conventional bank account. The government is finalizing the norms related to elaborate technology and regulatory architecture for delivering banking services through “mobile-linked no frills accounts.”

Most probably by September government will come out with guidelines and roll out the first such account as it aims to bring about financial inclusion of all section by spreading banking services in remote areas.

Meanwhile government has identified 73,200 villages having a population of more than 2,000 people where it will be providing mobile-linked basic bank services by March 2012.

In India there are about 500-million-plus mobile phone network, government aim to use these network to offer basic financial services, especially in those areas where still there is no bank branches.

An anonymous official told most likely the scheme will be rolled out from Orissa, in the state the mobile phone coverage is below 50 per cent through this roll out it aims to serve twin objectives of spreading banking services and cellular phone penetration.

At present the customers using their mobile phones are able to deposit up to Rs 5,000 with telecom operators.

This amount can be used for merchant transactions, but customers cannot do physical transfer of funds outside of the banking system. Such accounts will also involve less paper work. It will require valid government ID scheme.

Inter-Ministerial Group (IMG) recommended timelines for mobile-banking solutions which were finalized earlier this month.

An official who was present in the meeting told the National Payment Corporation of India, a non-profit company that provides low-cost infrastructure for providing payment services among banks, will be helping in preparing the back-end technology solutions. This will link the mobile number of the person to his no-frills bank account. Finally, it will be incorporated with the Unique Identity number once it gets operationalized.

Another official informed, “The roll out of the first accounts is likely to begin by September 2010.”

Bajaj Group keen in venturing into banking space

Like other big industrial houses, the Bajaj Group is interested in venturing into banking but there are some hurdles in the way as the regulator is not interested in issuing new banking licenses to large industrial houses. On the other hand Rahul Bajaj, chairman of Bajaj Finserv and Bajaj Auto Finance, is optimistic about getting licenses.

The Reserve Bank of India will be releasing draft of guidelines on the issue of new banking licenses to corporate thus company’s entry will depend on these guidelines.

The Delhi government has not put any restrictions on giving banking licenses to private corporate groups and NBFCs and is open to reconsider the norms. But, RBI is not interested in allowing industrial houses to enter into banking space.

The shareholders of Bajaj Auto Finance and Bajaj Finserv are quite interested in entry of group into banking. Bajaj told shareholders of Bajaj Finserv and Bajaj Auto Finance, “We are in principle interested in getting into banking.”

Bajaj said, denying industrial houses banking licenses is not justified, instead the groups should be given license as they had the track record, financial standing and the net worth needed however, RBI can put restrictions on loans and investments to the group companies as safeguards. He suggested, “Give it to the good guys and not those who will run away with the depositor’s money.” He said, “We can’t go back to the old policies in this age and time.”

Bajaj accredited that RBI steered the economy well in difficult times, managed interest rates and liquidity well but he disagreed on the issue of not allowing the large industrial houses into banking.

Either Bajaj Finserv or its subsidiary, Bajaj Finance, which will be used to get into banking, will be depending on their eligibility criteria. He said, “We intend to do it as a new company. It will need capital of Rs 500 to Rs 1,000 crore and BFL will not be able to do it, so it could be Bajaj Finserv.”

Standard Chartered launched online remittance service for NRIs

Standard Chartered Bank has launched its online remittance service Transfer2Home for NRIs.

According to a press release by the bank, using this service the customers will be able to transfer money to India from the US, UK, UAE, Singapore, Hong Kong and Bahrain.

To offer remittance service in these countries bank has tied-up with TimesofMoney.

TimesofMoney is a leading payment service provider and has tie-up with various financial institutions offering them money transfer service. Under its private label remittance service it offers services to the global cross-border money transfer industry.

Its transaction processing is fully compliant with payment norms suiting regulatory framework in several countries worldwide.

The release said, the bank has also signed strategic deal with BNY Mellon to offer Automated Clearing House (ACH) based remittance service from the United States.

BNY Mellon offers asset management and securities servicing globally. BNY Mellon’s Treasury Services group has high-quality expertise in global payments, trade services cash management, capital markets, foreign exchange and derivatives thus helping clients make payments, optimize cash flow, and manage liquidity more efficiently around the world in more than 100 currencies.

Use of plastic money on increase in India

In Western countries using credit and debit cards is very common thing. Now, in India it is becoming a part of Indian shopping culture. However western countries have been facing credit card abuse by shopaholics that put an entire country in debt. In India, it is yet to be seen whether the younger generation is able to handle in better way.

Now days many college students have debit cards so that, they don’t have to ask for cash from their parents. Therefore it becomes necessary to see how students take care of this.

Anirudh Wodeyar, a student says, “I feel that credit cards, more than debit cards, can prove to be dangerous for youngsters like us because of their higher limits. Having either makes us feel as though we have an unlimited source in our wallets with which we can whip up a treat to our friends or host a party or anything else.”

However most of the youngsters know how to handle cash, then also, sometimes they might feel difficult to deal if frequenting restaurants and theatres become a part and parcel of daily life.

Anirudh points out, “More often than not, students are aware that they shouldn’t spend more than a certain amount of money,” says Pooja, a student. “But the peer pressure of being called kanjoos can be tough to handle.”

According to some it is easy to keep track of spending with card as it gives an idea of where exactly your money has gone. Abhijith Vijayendra, a third year engineering student says, “Spending through cash is not as effective as paying for the credit card bill in one shot at the end of the month. People who are responsible realize how much they have actually spent and keep a tab on the expenses through such things.”

It is not that youngsters over spend with cards, the splurging problem can be seen in adults also. Anirudh says, “I’d say in general, with reference to the middle class youngsters who dominate
today's youth, we’re pretty careful with money whether it’s spent electronically or in paper.”

In fact students tend to be careful as they know, they aren’t earning. Some students still prefer cash over cards realizing, the pressure might have to deal with the card.

Abhijith says, “Spending in cash is better because you don’t get that massive accumulated bill or statement at the end of the month. As they say, Zor ka jhatka dheere se lage.”

Yes Bank, Poalim Capital together to offer expertise to firms on cross-border deals

YES Bank a private sector lender and Poalim Capital Markets, a leading Israeli investment bank and a part of Bank Hapoalim B.M inked a co-operation-agreement to offer advice to Indian and Israeli firms on cross-border deals.

As per this agreement YES Bank and Poalim Capital Markets will able to provide their combined expertise, strong local knowledge and excellent corporate relationships to open up mergers and acquisitions, joint ventures, equity raises and merchant banking opportunities for their respective clients. This will help in increase the investment flow in the Indo-Israeli corridor.

YES Bank's Managing Director and CEO Rana Kapoor said, "This alliance with Poalim Capital is another step forward in our commitment towards the Indian and Israeli business corridor. This privileged partnership will enable us to further enhance our investment banking services and facilitate overall development of both the nations through strategic interventions."

Poalim Capital Markets's CEO and President Amir Aviv said, "In our strategic plan for 2010, we marked India as an important geography to expand our investment banking capabilities, and after careful consideration of various alternatives we decided to join forces with Yes Bank."

Banks to add new clause to tighten loan settlement norms

The loan defaulters who try to settle down their liabilities through one-time settlement scheme will find difficulty as public sector lenders are planning to add a clause that will bar them from withdrawing criminal cases against private persons, irrespective of a settlement.

This was decided in a recent meeting of 10 bank chiefs with officials from the Reserve Bank of India, Central Vigilance Commission and the Central Bureau of Investigation (CBI). The need to add such clause was considered necessary in view of the recent increase in cases of fraud. The officials who attended the meeting told Business Standard that there were several loopholes in the OTS scheme therefore it became necessary to take such step. Moreover banks did not have any uniform policy for the amount on which a settlement could be made.

Public sector banks mainly got into OTS schemes with borrowers in order to recover a part of the outstanding amount and minimize the losses on account of non-performing assets (NPAs). In the recent past, banks have gone in for an OTS scheme multiple times with the same borrower for the same or less than the settlement money received earlier.

According to a bank executive, “Banks have to rely on collaterals (as the underlying asset) for OTS schemes as primary securities are not available by the time the fraud surfaces. Instructions were issued for the OTS scheme and sharing of information on the borrower's accounts among the multiple financing banks.”

It has also been noticed that securities are distress-valued and, in case the collateral amount is more than the loan outstanding, the settlement is done on a lesser amount. Also, CBI officials said that the banks do not report about all the frauds.

As per RBI data, out of the 44 cases of frauds of Rs 1 crore or more, banks did not reported about 33 cases. The Central Vigilance Commissioner said, “Banks reported there is hesitation on the part of CBI to take up cases of frauds involving over Rs 1 crore.” During 2008-09, according to RBI report, public sector banks reported about only 3,425 frauds as against 3,004 in the previous year, representing an increase of 14 per cent.

Vinayak Prasad takes over as President and Country Head-Cards Management of Yes Bank

Vinayak Prasad has been appointed as President and Country Head-Cards Management of Yes Bank. Earlier Prasad was serving at ICICI Bank. There he was heading the Cards Group and was responsible for launching its premium cards business.

The new appointment corresponds with an important phase in the bank’s life cycle as it plans to expand its’ branch banking operations as a part of a strategic movement to lead the next phase of growth.

Yes bank is planning to foray into credit card business and Prasad will be instrumental in launching this segment also he will be responsible for enhancing the existing debit card, prepaid card and travel card offerings, and will be heading the bank’s entire cards product portfolio.

Prasad has an experience of over 15-years in the consumer cards business.

LIC and UIDAI are likely to sign MoU, group to provide suggestion for UID projects

A memorandum of understanding will be signed between India’s largest state run life insurer company Life Insurance Corporation (LIC) and the Unique Identification Authority of India (UIDAI). LIC is the first insurer company to sign MoU with UIDAI.

According to CNBC sources under this deal UIDAI will be able to use LIC database. However the official announcement of the deal is likely to be made today.

According to reports the Finance Ministry has set up a technical advisory group for the unique identification (UID) project, which has been renamed as Aadhar. The group is the part of budget division of the Department of Economy Affairs. The technical advisory group has seven member team headed by Nandan Nilekani.

Some of the members of the team are Securities and Exchange Board of India (Sebi) Chairman CB Bhave, IT Secretary R Chandrasekhar, Dhirendra Swarup and Nachiket Mor. The group will provide suggestion on the technical, administration and human resource issues for UID’s various projects.

The group will be helping in the projects related to goods and service tax (GST), network and pension schemes, national treasury and management of agency and expenditure information.

I-T dept has temporarily suspended e-filing of returns

The income-tax (I-T) department in its press release has stated that temporarily it has suspended the e-filing of returns until it renews the website’s security certificate, which expired on 8 May

While giving clarification on the matter stated that the process for renewal has been started well before the certificate had lapsed.

According to press release, “Pending completion of certification procedure, the e-filing facility for AY (assessment year) 2010-11 has been temporarily suspended. This will not affect taxpayers in any way, as the earliest income-tax return for AY 2010-11 falls due on 31 July 2010. The facility is expected to be renewed very shortly”.

The release added, “The e-filing portal of the income-tax department remains fully secure, and lapse of the security certificate does not mean that its security features are slackened or compromised”.

On the other hand on Monday a senior official from Entrust, the agency that issued the security certificate to the I-T department, informed that the renewal procedure has been completed.

A security certificate guarantees the authenticity of a website and ensures that all transactions are encrypted and, hence, secure.

Earlier on Mint it was reported that due to the lapse of the security certificate, filing tax returns online could be risky as it could potentially compromise confidential information of tax assesses.

RBI raised cash limit for foreign travel to $3,000

The Reserve Bank of India has raised the cash limit for foreign travel to $3,000 from $2,000 with immediate effect.

Now people traveling abroad can carry foreign exchange up to $3,000 or its equal amount in other currencies without the central bank's approval.

The bank said, "The existing limit has been reviewed and it has been decided to increase this ceiling, with immediate effect."

RBI had assessed this ceiling in November 2001.

However, for an amount over $3,000 the travelers have to take permission from the central banking institution.

The central bank has clarified that the new limit will not be applicable to those traveling to Iraq, Libya, Iran, Russia and the CIS (former Soviet central Asian republics) nations.

It said, people traveling to Iraq and Libya can carry $5,000, and added that the provisions for travelers to Iran, Russia and CIS nations have not been modified