Saturday, August 29, 2015

The Final Verdict – 2nd and 4th Saturdays Holidays for Indian Banks

          As a beginning towards ‘LessCash’ transactions in India, 2nd and 4th Saturdays have been declared as holidays in India.

          On the remaining Saturdays, Banks will work for full day i.e like any other week days.
          These additional working hours are to compensate for closure on 2nd and 4th Saturdays.

It may be noted that All scheduled and non-scheduled banks – public, private, foreign, cooperative, regional rural and local area banks – will observe public holiday on second and fourth Saturdays from September 01, 2015; and will observe full working days on Saturdays other than second and fourth Saturdays (referred to as working Saturdays in the Press Release).

Scheduled banks in India have some special facilities. A scheduled bank is eligible for loans from the Reserve Bank of India at bank rate. They are also given membership to clearing houses.

A scheduled bank, in India, refers to a bank which is listed in the 2nd Schedule of the Reserve Bank of India Act, 1934. Banks not under this Schedule are called non-scheduled banks.

Scheduled banks are usually private, foreign and nationalised banks operating in India. However, cooperative banks are allowed to seek scheduled bank status if they satisfy certain criteria.

It may be noted that Payment systems will not be operated on second and fourth Saturdays but would operate for full day on working Saturdays.

Payment systems in India typically includes Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT), Cheque Clearing operated by various Bankers' Clearing Houses in the country including the grid based Cheque Truncation System (CTS) and ECS suite [Electronic Clearing Service (ECS), Regional Electronic Clearing Service (RECS) and National Electronic Clearing Service (NECS)].

          This being a new service initiative, the bankers and customers would face initial disruptions. Over the next couple of months, issues are expected to be resolved.
          As it is, majority of day to day banking activities can be conducted through alternate channels.  The only banking operation which cannot be conducted through alternate channels is ‘Locker Operations’.

Thursday, August 27, 2015

Now withdraw INR2000 from Point-of-Sale (POS) Terminals

          POS terminals come in a wide variety of sizes for numerous uses. The most common usage of POS terminals is to swipe the Credit Cards/Debit Cards for CashLess transactions.

          In India, since 2009 POS terminals are enabled for LessCash transactions too. The first notification by Reserve Bank of India was issued in 2009 permitting cash withdrawals from POS Terminals. Subsequently, in September 2013 this facility was extended to pre-paid cards issued by the banks.

This step was introduced by Reserve Bank of India to:
1)     Reduce the pressure on ATMs
2)    Reduce the cash deposits by the merchants in bank accounts
3)    Obviate   the need to install ATMs in nook and corner of the country
4)    Familiarise Bank customers with electronic banking

The normal POS terminals did not support Cash Withdrawals hence the volumes of cash withdrawals through POS terminals were slow to take off.

Over the years with sustained campaigns by the banking industry has led to this ‘cash withdrawal’, utility becoming popular.

However, there are no statistics on public domain highlighting the number of ‘cash withdrawals’, through POS terminals every month.

RBI Notification dt RBI/2015-16/164,DPSS.CO.PD.No.449/02.14.003/2015-16 dt.August 27, 2015 highlights the growing popularity of the ‘Cash withdrawals’, through POS terminals.

Through the above notification:    

a)     RBI doubles Limits of Cash Withdrawal at POS for Tier III to VI Centres.
b)    The limit for cash withdrawal at point-of-sale (POS) in Tier III to VI centres is doubled from 1000/- to 2000/- per day.
c)     This facility will be available for debit cards and open system prepaid cards issued only by banks.
d)    The limit remains unchanged at 1000/- per day at Tier I and II centres.

This enhancement is envisaged towards enhanced customer convenience and aid re-cycling of cash in Tier III to VI centres even as the push towards a less cash society is pursued.

Basing on feedback received, this facility will be reviewed keeping in view the progress in e-payments and other related developments. 

Banks should ensure that customer charges levied, if any, should not exceed 1% of the transaction amount at all centres.

All merchant establishments where this facility has been activated should display/indicate clearly the availability of cash withdrawal along with the charges, if any, payable by the customers.

The facility is available irrespective of whether the card holder makes a purchase or not. In case the facility is availed along with the purchase of merchandise, the receipt generated shall separately indicate the amount of cash withdrawn.

Cardholders must swipe their cards at the POS and provide PIN for authentication similar to withdrawing cash at an ATM.

Publicity by the participating banks is the key to enhanced volumes. The Card issuing banks that have enabled this functionality are encouraged to create sufficient awareness of this facility amongst their customers.

Tuesday, August 25, 2015

Monetary Penalty on Latur Urban Co-operative Bank Ltd., Latur

 Reserve Bank of India has imposed a monetary penalty of INR 5.00 lakh (Rupees Five Lakh only) on Latur Urban Co-operative Bank Ltd., Latur.

The monetary penalty is for violation of the Know Your Customer norms and RBI instructions.

At present the bank has 14 branches with Core Banking Solution. These 14 branches are spread over Latur (8 branches, including the Head Office and the Remote Branches), Pune (3) and 1 Branch in Nanded, Aurangabad and Solapur each, respectively.

The bank was established on 2nd May 1995 and the inauguration function was presided over by Dr. Manmohan Singh (The Ex Prime Minister and also The Ex Finance Minister of India) and Mr. Shivraj  Patil Chakurkar (The Ex Speaker of Indian Parliament).

The Bank’s IT team has focussed on SMS based services viz;
1.     Know your Balance - SMS BAL to 9420010055 for your account balance
2.     Last Three Transactions - SMS LST to 9420010055 for your last three transactions
3.     Block Your ATM - SMS BLK to 9420010055 hotlist/block your ATM/Debit Cards

The next focus of the IT Team is on: -
  • ·       Intenet Banking
  • ·       NEFT / RTGS Services Directly
  • ·       ATM cum DEBIT Card for Shoping
  • ·       Mail Banking

Monday, August 17, 2015

State Bank of Hyderabad joins NPCIs NACH Debit Platform

          State Bank of Hyderabad  with its Head Office in Hyderabad(One of my favourite’s cities) has joined the NPCIs NACH Debit Platform

          The origin of State Bank of Hyderabad can be traced back to 1941 when it was constituted as Hyderabad State Bank on 8.8.1941 under Hyderabad State Bank Act, 1941.
The Bank started with the unique distinction of being the central bank of the erstwhile State of Hyderabad, covering present-day Telangana region of Andhra Pradesh, Hyderabad-Karnataka of Karnataka and Marathwada of Maharashtra, to manage its currency – Osmania Sikka and public debt apart from the functions of commercial banking.

The first branch of the Bank was opened at Gunfoundry, Hyderabad on 5th April, 1942.

The present day Headquarters of the Bank is housed in a magnificent building at  Gunfoundry, Hyderabad.      
The Bank has 1800 physical touch points spread across India. It is also the largest Associate Bank of State Bank of India.

          As part of the NACH Debit platform, SBH customers would be able to benefit from Safe eTransactions.

          State Bank of Hyderabad in turn would be benefited by high float balances in Current and Saving Bank accounts.

          In case, SBH desires to be a Sponsor Bank for billers, it can reap the benefits of high balances in the billers account. Based on the   cash flows of the billers, it can also offer Overdraft facilities. This would be a win-win situation for both the Assets and Liabilities side of the Bank’s balance sheet.

Tuesday, August 4, 2015

The growth and growth of India’s NPCI’s IMPS (Immediate Payment Service)

          5 years back the first baby steps were taken by NPCI’S IMPS to introduce a new Instant payment channel to Indians.

          The new instant payment channel was christened as IMPS (Immediate Payment Service)

The highlights over the last 5 years are as under:
Sr No
SBI, ICICI Bank, Bank of India and UNPCI’s IMPS on Bank of India were the first set of participants in the pilot run

June 10
IMPS opened to the public by Smt.Shyamala Gopinath, Deputy Governor, RBI         with customers of with seven banks - Axis Bank, Bank of India, HDFC Bank,ICICI Bank,State Bank of India, UNPCI’s IMPS on Bank of India and Yes Bank able to experience the joy of the new Payment Channel
Nov 10
Dombivli Nagari Sahakari Bank joins IMPS. This is the first cooperative bank to join IMPS
April 11
IMPS-Merchant Payment Service launched. Kotak Mahindra Bank and UNPCI’s IMPS on Bank of India were the first pioneers in IMPS_MPS
Dec 11
IMPS through ATM channel launched with Canara Bank and UNPCI’s IMPS on Bank of India taking the first steps in this path.
Feb 12
A new channel introduced for IMPS transfers i.e through Account Number and IFS Code.
Till July 12, RTGS and NEFT were the sole payments channels which relied on Account Number and IFS Code
July 12
PPI Issuers understand the benefits of NPCI’S IMPS  and express interest to join the NPCI’S IMPS  channel.  Oxigen Services (India) Pvt Ltd as a RBI authorized Prepaid Payments Instrument Issuer (PPI) takes the lead. 
Apr 13
The scope of "Aadhaar – IMPS” was showcased to the entire nation through a National Conference, inaugurated by Shri Nandan Nilekani, Chairman UIDAI
Aug 13
Century scored with 8 Banks and one PPI joining  the NPCI’S IMPS  ecosystem in June 15
June 15



Saturday, August 1, 2015

Cheers_Enjoy Value Added Service at Cooperative Bank’s ATMs

          The key to reduce ATMs operating costs is to attract a large number of footfalls to transact through the ATMs.

          Revenue can be maximised through Financial transactions and Non-Financial transactions. Non-financial transactions can said to be the butter whereas Financial transactions can said to be bread.

          A perfect combination of Bread and Butter transactions would minimise ATM operating costs.  At the same time, it would encourage the Banks to install a large number of ATMs around the country.

          Reserve Bank of India, through Notification No: RBI/2015-16/139-DCBR.CO.LS (PCB) Cir.No.2/07.01.000/2015-16 dt.July 30, 2015 permitted all Primary (Urban) Co-operative Banks (UCBs) to offer all services that Standard ATMs can offer.

          These services can offered @ on-site / off-site / mobile ATMs as per Annex.

At the same time, the UCBs have to ensure that there are enough technological safeguards in place for ensuring data security.

Of course, the products of other financial institutions should not be marketed through ATMs.

The following is the list of Approved Services / facilities on ATMs installed by UCBs



  • Personal Identification Number (PIN) changes;
  • Requisition for cheque books;
  • Statement of accounts;
  • Balance enquiry;
  • Inter account transfer within the bank between accounts of same customer or different customers of the bank at the same centre or different centres within the country;
  • Inter Bank Funds Transfer - Transfer of Funds between the bank's customers and customers of other banks;
  • Mail facility for sending written communication to the bank;
  • Utility payments like Electricity bill, Telephone bill, etc;
  • Issue of railway tickets and
  • Product Information