Lakshmi Vilas Bank - IMPS

Lakshmi Vilas Bank joins IMPS with soft launch on 19/01/2011

Lakshmi Vilas Bank now is part of the IMPS.

LVB has 237 + branches, and the major advantage of joining IMPS is LVB customers will be able to transfer funds to other IMPS Bank account holders.

LVB has presence in 105 semi-urban locations in Tamil Nadu. These locations are yet untapped by large banks. LVB will have an edge in the said locations.

The Lakshmi Vilas Bank Limited (LVB) was founded eight decades ago ( in 1926) by seven people of Karur under the leadership of Shri V.S.N. Ramalinga Chettiar, mainly to cater to the financial needs of varied customer segments.

Incidentally Karur Vysya Bank too has its founding roots in Karur.

Mahesh Bank – Direct RTGS Member

Mahesh Bank – Direct RTGS Member

Today Mahesh Bank, headquartered in Hyderabad, Andhra Pradesh, announced the launch of RTGS Services for its customers.

The Bank has 33 branches primarily in Andhra Pradesh. It has also has a branch each in Jaipur and Mumbai.

The Bank was accorded SCHEDULED STATUS by Reserve Bank of India from 26th October, 1996 - the first Co-operative Bank to be accorded this status in the entire South India.

RTGS is only a path to join the ATM Network, by becoming a member of the Shared ATM Network.

http://thehindubusinessline.com/2011/01/25/stories/2011012550702100.htm

Kudos to Mahesh Bank for joining the Safe ePayments train.

I am sure; it will reap the benefits of this action.

Electronic Funds Transfer (EFT) System is dead.

Electronic Funds Transfer (EFT) System is dead.

Reserve Bank of India, has decided to wind-up the Electronics Funds Transfer procedure.

This was required as the number of transactions in the EFT cycle were declining due to the popularity of National Electronics Funds Transfer (NEFT)

Brief History of EFT : -

01)                      This was set up in 1997, by Reserve Bank of India.

02)                      Initially, the The System  covered centres viz. Ahmedabad, Bangalore, Bhubneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvanantpuram.

Brief Objectives of EFT : -

 (1) Establishment of an Electronic Funds Transfer System to facilitate an efficient, secure, economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India,

2) To relieve the stress on the existing paper based funds transfer and clearing system.

The major users of EFT were the Government Departments. Railways and Defence supplier payments were all routed through EFT.

In fact, EFT could have been discontinued a long time back, but as modifications were required in the Government Deparment’s IT, EFT was still being continued.

However, from 2011, EFT is no longer live.

QUOTE

Important announcement: Since the number of transactions being put through EFT has reduced drastically and the usage of NEFT has picked up and number of transations under NEFT is going up every day, it has been decided to discontinue EFT with immediate effect. The payments being made through EFT may be routed either through NEFT (wherever available) or through ECS/Regional ECS. If none of these is feasible, DDs may be issued in the interregnum.

UNQUOTE

Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds – Part 1

Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds – Part  1

Reserve Bank of India on 21^st Jan 2011, released the Report of Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds

The Press Release can be accessed @ http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=23789

The Press Release contains link to the Full report as well as the Highlights of the Report.

Link of Main Report @ http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=609

Link for Highlights of the Report @ http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=610

The report is exhaustive and is divided into 9 sections namely : -

1.     IT Governance,

2.     Information Security,

3.     IS Audit,

4.     IT Operations,

5.     IT Services Outsourcing,

6.     Cyber Fraud,

7.     Business Continuity Planning,

8.     Customer Awareness programme’s

9.     Legal issues.

The Working Group was set up, as the Governor had announced, in the Annual Monetary Policy Statement 2010-11 in April, 2010, a creation of a Working Group on Information Security, Electronic Banking, Technology Risk Management and Tackling Cyber Fraud.

The Working Group was led by  Executive Director of Reserve Bank of India, Shri.G.Gopalakrishna.

He was assisted by a group of distinguished professionals.

They  are :

A) G.Sivakumar : http://www.cse.iitb.ac.in/~siva/

Professor at the Computer Science and Engineering Department at Indian Institute of Technoly, BombayH.Krishnamurthy

B) Pavan Duggal : - http://www.pavanduggal.net/

Advocate , Supreme Court of India and President, Cyberlaws.Net.

C) Patric Kishore :

General Manager (IT) & CISO, State Bank of India

D) Nandkumar Saravade :- http://www.saravade.com/About_Me.html

·         General Manager, Financial Crime Prevention and Reputation Risk Management at ICICI Bank

·         Chairman at India Payment Card Risk Counci

E) Sanjay Sharma  http://www.tfci.com/iba_tfci/banktech08/Sanjay_Sharma.htm

Managing Director & CEO, IDBI Intech Ltd

F) Akhilesh Tuteja : - http://in.linkedin.com/in/akhileshtuteja

Executive Director with the IT Advisory practice of KPMG in India.

G) Abhay Gupte : - http://in.linkedin.com/pub/abhay-gupte/9/274/375

CEO India at Logica

H) K.Ramakrishnan : http://www.iba-banktech.com/2009/Ramakrishnan.html

Chief Executive, Indian Banks' Association

I)                   Kamlesh Bajaj : http://in.linkedin.com/pub/kamlesh-bajaj/6/557/b9

CEO of Nasscom’s Data Security Council of India

J)B.Sambamurthy : http://www.idrbt.ac.in/staff/other_faculty/Subramanyan/Subramanyan.html

Distinguished Fellow, IDRBT

K) P.K.Panda : Chief General Manager, Reserve Bank of India.

As can be seen from the above list, the committee’s combined skills are vast and the report reflects their rigid exertion.

From Safe ePayments Motivator angle, two sections immediately attracted me are

1.     

Business Continuity Planning,

2.     

Customer Awareness programme’s

All other sections revolve around the above two only.

In the coming days, there will be new posts on this Report i.e Report of Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds

I am signing off by reading Swami Vivekananda’s  Quote:

If the mind is intensely eager, everything can be accomplished—mountains can be crumbled into atoms.

Review of Service Charges for Cheque Collection – Local, Outstation and Speed Clearing

Review of Service Charges for Cheque Collection – Local, Outstation and Speed Clearing

Reserve Bank of India, DPSS has issued a Notification today, with wide reaching implications for the Cheque Collection Operations of Banks.

The Notification will be effective from 01/04/2011.

The Notification No is RBI/2010-11/377 DPSS.CO.CHD.No. 1671 / 03.06.01 / 2010-11 dt.January 19, 2011

 The complete Notification can be accessed @ http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6228&Mode=0

The highlights of the Notification are: -

01)                       There are advantages of using electronic payments, especially for large value transactions.

02)                       RBI will continue to protect the interest of Saving Bank account holders by mandating charges for smaller value transactions relating to saving bank accounts.

03)                       Freedom is specified to Banks, to determine charges for larger value transactions i.e. collection of instruments for credit to other types of accounts.

04)                       The charges so levied, should be fair and transparent.

05)                       Board of Directors has to approve the Service Charge Structure.

06)                       The services charges should specify the maximum charges that they would have to pay, including charges if any, payable to other banks.

07)                       Freeing of Service charges will hasten the movement from paper mode to electronic mode.

The Charges Table – Reproduced from Reserve Bank of India website.

(a)  Service (Processing) Charges for Local Clearing (by Clearing Houses from Member Banks) –

System	Existing (Rs.)		Revised (Rs.)
	Presenting Bank	Drawee Bank	Presenting Bank	Drawee Bank
Clearing at MICR-CPCs	1.00	1.00	1.00	1.50
Cheque Truncation	0.50	0.50	0.50	1.00

(b) Service Charges for Outstation Cheque Collection –

Existing (Rs.)		Revised (Rs.)
	Service charge from all customers		Service Charge from Savings a/c customers
Up to and including 10,000	50	Up to and including 5,000	25^
		Above 5,000 and up to and including 10,000	50*^
Above 10,000 and up to and including 1,00,000	100	Above 10,000 and up to and including 1,00,000	100*^
Above 1,00,000	150	Above 1,00,000	Left to the banks to decide

* No change.

^ All inclusive maximum amount chargeable by banks to the customers.

(c)  Service  Charges  for  Cheque  Collection  under  Speed  Clearing  (by  Collecting  Banks  from customers) –

Existing (Rs.)		Revised (Rs.)
	Service charge from all customers		Service charge from Savings a/c customers
Up to and including 1,00,000	Nil	Up to and including 1,00,000	Nil*
Above 1,00,000	150	Above 1,00,000	Left to the banks to decide

* No change.

The implications of this Notification:

A)    Hectic strategic sessions to draw up the new Service Charge Structure.

B)    Minor Programming changes might be required, as almost all Banks are on Core Banking Solutions (CBS)

C)    Frequent revision of Service Charges depending on the competition.

D)   Accelerate the migration from Paper Mode to Electronic Mode.