Aadhaar Numbers – 2 crores allotted in July 2013

            UIDAI has an internal target to issue 60 crore Aadhaar numbers by 2014 end. It is steadily racing towards its target, and till date UIDAI has issued 40 crs 19lacs (40,19,00,000) numbers.

            A record 2 crore Aadhaar numbers have alone been allotted in July 2013. The pace is picking up, as more and more departments are realizing the benefits of storing residents Aadhaar numbers in their data-bases.

            Aadhaar Enabled Service Delivery is linked to various government schemes such as scholarship, pension scheme, dhanalaxmi, janani suraksha yojana, payment of social security benefits such as old-age payments, distribution of LPG subsidy etc

            Enrolment drives are being  popularized in many parts of the country to raise the awareness levels. Radio jingles seem to be the most effective way.

            In Kerala, Akshaya Kiosks are the preferred mode for Aadhaar enrollments.

            The main challenge for residents is in case of delayed receipt of Aadhaar numbers, whom to contact and how.

            How long a resident should wait for his/her Aadhaar number after the enrolment date. The average waiting period is 30 days to 90 days. In case, the resident does not receive his Aadhaar number within 90 days, it is better to start inquiring with UIDAI on the allotments status.

            

Incometax refund to be completely through emode

            Indian Finance ministry is preparing a detailed plan to migrate the income tax refunds complete to the eMode.

            If the Indian Finance ministry has its way, each IT PAN (Permanent Account Number), will be linked to a bank account. Such a linkage will be helpful for eRefund of the Income Tax.

            However as on date, the above idea has not received RBI clearance. , RBI is not comfortable with the idea of making PAN linkage mandatory for electronic transfer of all income tax refunds.

 100 per cent ECS (electronic clearance service) is possible only when IT Department has both the PAN and the Bank Account Number.

            The tax department was not asking RBI to make PAN mandatory for all bank accounts, said an official, "We are concerned with only those 35 million bank account holders who have a PAN card. So it should not be a problem."

 Refunds of Rs.70,000 crore have been given so far this year. Last year, refunds stood at Rs.95,000 crore. In 2009-10 and 2010-11, refunds of about Rs.57,000 crore and Rs.73,000 crore, respectively, were issued.

 In the present mode, IT refunds are provided through the refund banker scheme, launched in 2007, to non-corporate taxpayers assessed all over India. The State Bank of India (SBI) is the refund banker to the I-T department.

            Refunds are generated in two modes - ECS and paper. If the taxpayer has selected mode of refund as ECS at the time of submission of income return, his / her bank account number and MICR (magnetic ink character recognition) code of bank branch and communication address are mandatory.

            For taxpayers who have not opted for ECS, refund will be disbursed by cheque or demand draft. For generation of refund through paper cheque, correct address is mandatory. In the ECS mode, refunds are credited to the taxpayer's bank account within 24 hours of receiving intimation from the tax department, while for paper refunds the cheque is dispatched within three days.

            In Budget 2013-14, Finance Minister P Chidambaram extended the refund banker system to refunds of more than Rs.50,000.

eASBA Apply through your Banks internet banking module

           

eASBA - the facility of applying for Stock Market Issues through Bank’s internet banking module, is fast picking up.

eASBA is for Online Subscription of IPO/FPO by blocking one’s CASA account.

It’s a Safe, Secure and Convenient way

            The main advantage of eASBA over the physical ASBA is that the Bank customers can enjoy the benefits of ASBA without visiting any bank branch, to submit the physical application.

            The main advantage of eASBA for SCS Banks is that a part of Broker compensation can flow back to the bank, as payback charges.

ASBA eforms can be downloaded from the NSE site. However, in case of eASBA, the application form is already part of the internet banking module, and the bank customers have to click on the ‘I agree to the terms and conditions’, to proceed further.

The e-ASBA facility is user-friendly, simple, instant, secure and available 24x7. Normally, it is a self-service facility eligible for all net banking customers having transaction rights.

Majority of the banks allow applying online up to 4.00 PM on the issue closure day.

                        The main disadvantage of eASBA is that Rights Issues cannot be applied, as physical application issued by the company containing CAF number must be submitted to Bank.

            I am sure in the near future, a way will be found out, to apply for Rights Issues through eASBA.

IIBF – All fees received vie Safe ePayments only

            Indian Institute of Banking and Finance has become 100% ePayments Motivator. Do not believe this. Well, go on to this IIBF Announcement and read for yourself.

            Now, you don’t tell me that you do not have a valid ePayment tool (credit/debit card/online banking ID) with you!!!

            IIBF, with the adoption of ePayments, will be able to reduce the TAT in the exam processing cycle.  This would in turn lead to introduction of new courses relevant to the present Banking scenario.

            The exam and registration fees can be paid at this link.

            I am sure, in the near future, the fees can be paid via other ePayments modes too, i.e Immediate Payment Service, Prepaid Cards etc.

            So, go ahead and save time, by making the fees payment online.

            Savings in cost for the respective Banks, as majority of the IIBF courses are taken by Bank employees only.

No need to stand in queues to purchase DD’s or deposit cash in Axis Bank, and again dispatching the Demand Draft, Pay-in Slip to the respective regional office.

            No need to worry, if your Demand Draft, Pay-in Slip has reached IIBF office, and eagerly wait for the Exam Hall ticket.

            Thanks, IIBF.

Disseminated by Prashant N. Banker by daytime, Blogger by Night.

           

            

Cash Retraction in Indian ATM’s finally withdrawn. Collect Cash before leaving the ATM!!!!!!!

            Due to the rising of frauds in India on the cash retraction facility in India, the Indian regulators were looking at various alternatives to minimize such instances.

            A detailed discussion took place in the NFS steering committee meeting held on 07/04/2011. One of the suggestions received was to disable the ATM retraction facility. As this was a new step, a pilot run was conducted on selected ATM’s.

          As expected, not a single complaint on cash retraction was received by member banks. On the basis of the pilot run feedback, NPCI sought RBI’s approval to adopt the disabling of ATM retraction facility across Pan-India ATM’s.

            RBI agreed to the NPCI’s proposal and communicated their acceptance vide Lr.No.DPSS.CO.PD NO1230/02.07.2011/2011-12 dt.09/01/2012.

    

        The initial deadline for the member banks to disable the cash retraction in their respective ATM’s was 31/03/2012. Subsequently, it was extended to August 31^st, 2012.

            With the August31st, 2012 deadline too over, all Banks in India, have disabled the cash retraction facility in their ATM’s.

            This step was disseminated to the bank customers vide SMS’s, Notice Board messages, messages in Statement of Accounts.

            The press too widely reported this new service. Majority of the banks have also highlighted this on their websites eg:- Axis Bank, HDFC Bank, SVC Bank, Indian Overseas Bank. Plus, by the word-of-mouth publicity, the message would have spread across the banking customers.

            The cash disbursement at the ATM’s depends on the model of the particular ATM. In some ATMs, there is a Cash dispenser, wherein the cash falls into the dispenser. In some ATM’s, the money remains at the mouth of the ATM, which the customer has to take it.

Ideally, the cash in all ATMs’ should have a cash dispenser, wherein the cash falls into it and the customer collects it from there.  

What is Cash Retraction?

National Electronic Funds Transfer (NEFT) - Acceptance of NEFT inward for credit to Loan Accounts

Reserve Bank of India, vide Notification No.RBI/2011-2012/496, DPSS (CO) EPPD No.1894/04.03.01/2011-12, has advised all Banks to accept Loan Credits via NEFT also.

This advisory was necessitated as RBI had received some complaints from customers regarding non-acceptance of NEFT for credit to loan accounts, which was causing inconvenience to the Loan Customers.

As the Banks were willingly taking ECS (Dr) as one of the modes for the repayment and NEFT also being an electronic transfer mode, Banks have been advised to allow the customers to choose NEFT also as one of the electronic modes of making payment towards loan EMIs / repayments etc.

5 reasons as to why do Banks not prefer NEFT Credits to Loan Accounts?

1. Loan Accounts are not part of the Core Banking System, hence, real-time verification of Loan Account Number and customers' name is delayed.

2. Customers might pre-pay the Loan which might not be preferred by Bankers.

3. The actual credit to Loan Accounts might take 2/3 days, in between if the ECS transaction is generated and sent to the Destination Bank, the customers account in the other bank might be debited twice for the same installment. This leads to subsequent customer complaints at a later date.

4. Customers might remit a lesser amount than the Monthly Installment amount, leading to overdue interest being charged in the Loan Accounts. If this is not properly communicated to the Loan customer, there are high chances of customer complaints.

5. If there are multiple credits in a single month, the EMI (Equated Monthly Calculation), will be lopsided, with no clarity.

7 tips to ensure that your NEFT credits to your Loan Account are hassle-free: -

a) Activate your Loan Account in the net banking module.

b) Add the Loan Account as a Payee in your net banking module, funds remitting bank account.

100. Do a test transfer of say Rs10/- and verify the credit in your Loan Account.

d) This will also enable you to know the Lead time between the actual NEFT transfer and the actual Loan Account, which will be useful when transferring the actual payment

e) Once the amount is transferred, inform the details to the customer service email id of the Loan Bank.

f) Verify the credit in your loan account after couple of days.

g) In case of any doubt, immediately mail/lodge query with the respective Loan Bank.

107+ Banks are on NEFT platform, with 2,16+crs transactions being put through the same.

Well, apart from Banks, there are other financial institutions which disburse Loans and collect the repayments through ECS(DR). Trust NEFT credits to such Loan Accounts will also be enabled soon.

Axis Bank-India deploys 200 cash deposit machines. Try it now and provide your feedback.

8 points about Axis Banks' move to deploy 200 Cash Deposit Machines.

1. Axis Bank, is India's third largest private Bank, with a physical presence of 1300+branches and 7600+ ATM's.
2. To reduce the manual processing of Cash, it has announced deployment of 200 cash deposit machines.
3. The CDMs' have been installed in various branches across 90 cities in the country.
4. The CDMs' provide to its customers a 24 x 7 convenience of cash deposit with instant credit of all successful transactions.
5. The CDMs' will separate the notes denomination-wise, count and displays it for the customer’s confirmation before crediting the account.
6. A receipt slip is issued after each deposit made confirming the transaction.
7. The target is to add another 350 more such machines in the next 6 months.
8. The deployment of CDMs' will mean that the manual cash deposit transactions at the branch will be diverted to the automated environment.

What is a Cash Deposit Machine ?

In simple terms, the Cash Deposit Machine (CDM) is a self-service terminal that lets bank customers to make cash deposits.

Naturally, all successful transactions are immediately credited and customers will be issued an advice slip confirming the transaction.

3 safety tips for transacting at CDMs'

a) Do not publicize that you are making a Cash Deposit.

b) Do deposit only during day-time.

c) Preserve the Receipt, take a xerox or scan and store it.

RBI releases Draft Guidelines for White Label Automated Teller Machines (WLAs) in India.

Q) What are White Label ATM's?

Ans) Do not worry, their will be labels on the ATM's stating the owner. The only difference is that the Owner will not be a Bank but non-bank entities.

Traditionally, Banks are owners of ATM's, but ATM's owned by non-bank entities are referred to as the White Label ATM's.

A a white label ATM is owned, run and maintained by a third-party service provider. There has a demand in India for introduction of White Label ATM's, as it was felt that this would speed up the ATM penetration in India, and reduce the load on the Banks.

The number of ATM's in Urban India is increasing day by day, but the same cannot be said in rural interiors.

Hence, to encourage non-bank entities to enter the ATM arena, Reserve Bank of India, has issued Draft Guidelines for White Label Automated Teller Machines (WLAs).

The top 20 highlights of this draft guidelines are:

1. Views/Comments by the public can be sent to Reserve Bank of India before 06/03/2012.
   
   
2. The views/comments can be sent by snail mail to the Chief General Manager, Reserve Bank of India, Department of Payment & Settlement Systems, Central Office, 14h floor, Central Office Building, Shahid Bhagat Singh Marg, Mumbai -400001 or can be emailed.
   
   
3. The interested Non-bank entities proposing to set up WLAs have to make an application to RBI for seeking authorization under the Payment and Settlement Systems Act 2007.
   
   
4. Such entities should have a minimum net worth of Rs. 100 crore at the time of making the application and on a continuing basis after issue of the requisite authorization.
   
   
5. To ensure that the ATM's are not concentrated only in Tier I & II centers, there will be annual targets in terms of the ratio of WLA between Tier I &II and Tier III-VI centers. These targets will be stipulated by Reserve Bank of India.
   
   
6. Initially, only the Cards issued by banks would be permitted to be used at the WLAs.
   
   
7. Cash Deposits, as of now, will not be permitted.
   
   
8. The WLA Operator will be the "acquirer" for all transactions at the WLA and earn his fee accordingly.
   
   
9. To decrease his operating costs, the WLA Operator would be permitted to earn extra revenue through advertisement and by offering value added services. Naturazlly, such advertisements would be subject to Advertising Standards Council of India (ASCI) codes and other regulations. The other regulations might be that there should no advertisement between the keying of the Password and disbursement of the cash.
   
   
10. Regulatory guidelines relating to compensation for failed ATM transactions would apply to transactions at WLAs.
    
    
11. Prior Authorization of RBI under the Payment and Settlement Systems Act, 2007, is required by the WLA Operator, to commence its operations.
    
    
12. Each WLA Operator shall have one “Sponsor Bank” , who will serve as the Settlement Bank for the settlement of all the service transactions at the WLAs. The Sponsor Bank should be a member of one of the ATM networks authorized by the RBI and also be a member of the RTGS.
    
    
13. Cash Management of the WLAs shall be entrusted to the Sponsor Bank, who may have necessary arrangements in this regard with other banks for servicing cash requirements at various places. At no point of time, the WLA Operator or his agents shall have access to the cash at the WLAs.
    
    
14. Settlement of all the transactions at the ATMs shall be done only in the books of the Sponsor Bank through the ATM Network with whom the WLA Operator has established connectivity.
    
    
15. Maintenance and servicing of the WLAs shall be the sole responsibility of the WLA Operator.
    
    
16. Customer Grievance Redressal : The primary responsibility to redress grievance of customers relating to failed ATM transactions will vest with the Issuing Bank,. However, the Sponsor Bank will provide necessary support in this regard, including making available relevant records and information, to the Issuing Bank. For this purpose, the Sponsor Bank should have necessary arrangement with the WLA Operator.
    
    
17. The extant directives of the RBI on the time-lines for resolution of complaints of failed ATM transactions would also apply to transactions at the WLAs. For delay in resolution of such complaints attributable to the Sponsor Bank or the WLA Operator resulting in payment of penalty to the customer by the Issuing Bank in terms of the directives of RBI, the Issuing Bank shall be compensated by the Sponsor Bank. The Sponsor Bank may have appropriate agreements with the WLA Operator for recovery of such amounts.
    
    
18. ATM Network Operators will offer direct connectivity to the WLA Operator to facilitate transactions at the WLA and the settlement thereof after seeking requisite approvals from the RBI.
    
    
19. The above step bring the WLA Operator under the ambit of the Network’s Operating Guidelines and the Dispute Resolution Mechanism put in place in accordance with the extant directives of the Reserve Bank of India.
    
    
20. A Tripartite Service Level Agreement between 01) The ATM Network Operator, 02) the WLA Operator and 03) the Sponsor Bank will be requied to address issues relating to inter-bank settlement of the transactions at the WLAs and settlement of customer complaints relating to failed ATM transactions. The SLAs should clearly spell out the role of each party.

To reduce the instances of counterfeit currency entering the system, the cash handling responsibility is of the Sponsor Bank. RBI is clear that at no point of time, the WLA operator or his agents, shall have access to the cash at the WLAs.

Internationally, retailers that own white label ATMs, and not banks, load cash into the machines.

e-insurance in India April 2012 Deadline

IRDA is working to put life policies in electronic form.

April 2012 is the deadline for insuance companies to start issuing insurance policies in electronic form.

To meet this deadline, "Stock Holding Corporation, Central Depository Services Ltd, NSDL, Karvy Computers and Computer Age Management Services are working with the insures and the regulator to put in place the procedure and iron out any possible issues that may arise in the process," Sohanlal Kadel, president, Insurance Brokers Association of India said in Kolkata on Friday.

The rollout plan is as under: -

In the first phase, Life Insurance Policies will be issued electronically. This is because, most of the terms and conditions of life insurance policies are similar making it  easier for all the players to adopt dematerialisation for such policies.

The next phase will be for general insurance policies/motor policies and health covers.

The major challenge would be in introducing dematerialisation for general insurance covers.

Majority of  large General insurance covers are tailor-mode with the terms and conditions varying for each client. Hence, a large number of permutations and combinations have to be incorporated into the demat system, which might delay the introduction of e-insurance policies for large general insurance covers.

The relevant guideline by IRDA on introducing e-insurance was floated by IRDA in early 2010.

IRDA’s Guidelines in a nutshell for issuing policies electronically: - 

The Insurance Regulatory and Development Authority (IRDA) have laid down guidelines for issuing policies electronically which should reduce transaction costs and ensure swift modifications in policies. They even issued the guidelines for repositories, which compile and store data about policyholders on behalf of the insurance companies.

The IRDA said, “The objective of creating an insurance repository is to provide policyholders a facility to keep insurance policies in an electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy. All such insurance policies in electronic form shall be treated as valid insurance contracts”.

According to the guidelines insurers issuing e-insurance policies shall have to take the services of a registered repository. A certified insurance repository has to have a net worth of at least Rs 25 crore, without any foreign investment, and wherein no insurance company can hold over 10% or hold any managerial position.

“The insurance repository before commencing the operations shall put in place measures to safeguard the privacy of the data maintained and adequate systems to prevent manipulation of records and transactions,” the IRDA said..

As a safe ePayments motivator, I believe that this change in issuance of insurance policies will not only benefit insurance players but also aid in increasing value for ePayments.

As sensitive information is part of the Insurance policies, the insurance companies and the insurance repositories must develop adequate security policies to,

01) ensure that no personal information is leaked.

02) the computer network is not hacked

03) ensure that employees are aware of the distinction of ‘private information’ and ‘need-to-know’, information