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