Tuesday, December 9, 2014

ICICI Bank – Hike in ATM Charges-LessCash Transactions Motivational Tip

            As per press reports, ICICI Bank from 01 January 2015, is rolling out a LessCash motivation tip to its account holders.

            ICICI Bank has decided to levy charges on its own customers for accessing their Automated Teller Machines (ATMs) after five transactions.

After exceeding the five free transaction limits, customers will have to pay Rs 20 per financial transaction excluding service tax and Rs 8.50 for every non-financial transaction for using own bank's ATM.

These charges will also be applicable at non-ICICI Bank ATMs in six metros after three free transactions--Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.

In case if the card is used in non-metro areas then customers can enjoy five free transactions per month at non-ICICI Bank ATMs, after which the same charges will apply.

            As a minor concession, customers maintaining an average monthly balance of more than INR 25,000, will not be charged for using the bank's ATM even beyond five transactions.

            This is in line with RBI Circular dt October 10, 2014 on Usage of ATMs –Rationalization of number of free transactions.

            Through this step the respective Banks are encouraging their customers to migrate from Cash Transactions to Electronic Transactions.

            The pressure will be more on commercial establishments and organizations to offer alternate payment channels to their customers.


            Yes, this is the way to go ahead for LessCash Transactions in our country. 

Monday, December 8, 2014

We Indians are fast adapting LessCash Tools-Card On Delivery

            The new online check-out mantra is not Cash-on-Delivery BUT Card-on-Delivery. As the trust levels between online shoppers and online companies increase, the checkout trend is migrating from Cash-on-Delivery to Card-on-Delivery.

            The rapid growth of COD has been possible due to falling costs of MPOS (Mobile Point of Sales) terminals and enhanced security.

            The below table clearly show growth in POS Transactions in this financial year.

            At present, the data does not differentiate between POS and MPOS transactions.

            Majority of the Indian eCommerce companies have reported an increase in MPOS transactions during the last festival season i.e Dusshera/Diwali.

            The following newspaper article will throw more light on the growth of MPOS transactions in India.

            Another key contributor for MPOS transactions is that customers need not go to the POS Terminal; the MPOS Terminal is brought to the customer. This drastically increases the security of the transactions.

            As Banks and other industry players spread the benefits of LessCash transactions, the migration from Cash to LessCash modes will speed up.


            

Sunday, December 7, 2014

White Label ATMs (WLAs) in India – Guidelines. Delink Cash Supply

            The two major RBI notifications on WLAs are RBI Circular No DPSS.CO.PD. No. 2298 / 02.10.002 / 2011-2012 dated June 20, 2012 and DPSS.CO.PD. No. 1088 / 02.10.003 / 2013-14 dated November 14, 2013 on the captioned subject.

            In the last one year, 4,000+ WLA ATMs have been operationalised in India. Majority of the ATMs are located in Semi-Urban and Rural Areas.

            As per extant guidelines, only the Sponsor Banks could supply ATM Fit cash to the WLAO for loading in their ATMs. As the reach of the Sponsor Banks was limited to a certain geographical area, the Sponsor Banks had to tie up with other commercial banks for supply of ATM fit cash.

            Such an arrangement was leading to operational inefficiencies in the whole WLAO cycle and also increasing the operational costs.

            As a certain level of maturity has now been reached in WLA operations by all the stake holders, the stake holders represented to RBI for certain modifications in the operating conditions.

 Based on the review of the operations of White Label ATM (WLA) as well as representations received from the stakeholders, RBI has decided to as under:-


    • Delink cash supply from that of sponsor bank arrangements.
    • WLAO may now tie up with other commercial banks for cash supply at WLAs.
    • While the cash would be owned by the WLAO, the responsibility of ensuring the quality and genuineness of cash loaded at such WLAs would be that of the cash supplier bank.
    • A  suitable Service Level Agreements (SLA) to  be drawn up between the WLAO and the cash supplier bank for adequate supply of genuine and good quality notes.
    • WLAOs who have been authorised under PSS Act 2007 and have commenced operations are required to intimate RBI regarding commencement of the services 

Wednesday, December 3, 2014

Safe eTransactions can reduce the Bank’s Branch physical size

            As the share of eTransactions  vis physical transactions increase for Banks, each Bank has charted its own path to reduce the operating costs.

            Please refer to few sample articles on the web which highlight the approach of Banks in different parts of the world.


            In India too the share of eTransactions vs Physical Transactions has been on the rise. Refer the following articles.


            In a first of such exercise, Corporation Bank has done a detailed study on the impact of the electronic transactions of its customers and decided to rationalize its physical bank branches size.

            Instead of shutting down or relocating its branches which would have sent a negative signal to its customers, Corporation Bank decided to reduce the size of its bank branches.

            Though a space audit of 932 branches spread over India, Rs30+ crores could be saved during the lease tenure of its bank branches.


            Note that only the carpet area was reduced to make the branch more compact. No customer service delivery activity was affected.
             

Tuesday, December 2, 2014

A bit of Autonomy - Statutory Central Auditors (SCAs)

            One of the most vital activities of a Banks Finance Department is the co-ordination of the Bank’s Statutory Audit exercise.

            The activity of appointment of Statutory Central Auditors (SCAs) for Indian Public Sector Banks begun once the half-year activity is over.

            The norms on appointment of Statutory Central Auditors (SCAs) for the Financial Year 2013.2014 stated that the selection of SCAs will be done by the Selection Committee constituted by Government of India in coordination with Reserve Bank of India.

The constituted Selection Committee  will forward the list of eligible audit firms and the final call would be taken by Reserve Bank of India, based on the following guidelines:-

After receipt of the list of eligible auditors / audit firms, based on the eligibility norms for empanelment of auditors / audit firms prescribed by RBI from the Office of the Comptroller and Auditor General of India (C&AG), verification of eligibility of audit firms by RBI with respect to their bank audit experience available with RBI will be done by RBI.

List of eligible firms after excluding the firms which are to be continued, rested and denied audit during the relevant year will be prepared by RBI and forwarded to Government of India for selection by the Selection Committee.

After selection, Government of India will advise bank-wise names of the selected firms to the respective banks. As per the statutory requirement, banks, in turn, are required to forward the names of the selected SCAS to RBI for its prior approval before their actual appointment.

In line with the sweeping winds blowing across our country, a new policy has been announced for appointment of SCAs in Indian Public Sector Banks.

As per the revised process, Public Sector Banks (PSBs) have been granted autonomy on the issue of selection and appointment of Statutory Central Auditors (SCAs).

The work of selection and appointment of SCAs henceforth, has been delegated to individual PSBs for the year 2014-15 onwards.

In the near future, Reserve Bank of India (RBI) will provide the selection criteria for selecting SCAs to PSBs.

The office of Comptroller & Auditor General (C&AG) will provide the list of eligible auditors available with them and PSBs can make selection out of the list with the prior approval of RBI.

The efficiency of the new guidelines will be judged in a couple of years.

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