Should Indians get a free Credit Report every year??

                A credit report is essential for prospective borrowers to obtain credit quickly. 

                Reserve Bank of India vide its Notification No:-RBI/2014-2015/405 DBR.No.CID.BC.60/20.16.056/2014-15 dt.January 15, 2015, has advised all:

• All Scheduled Commercial Banks (including RRBs & LABs),
• All India Notified Financial Institutions, and
• All Credit Information Companies

i.e  all Credit Institutions (CIs) to  become members of all CICs and submit data (including historical data) to them.

At present there are  four CICs, viz. Credit Information Bureau (India) Limited, Equifax Credit Information Services Private Limited, Experian Credit Information Company of India Private Limited and CRIF High Mark Credit Information Services Private Limited have been granted Certificate of Registration by RBI.

In terms of Section 15 of the Credit Information Companies (Regulation) Act, 2005 (CICRA), every Credit Institution shall become member of at least one CIC. Further, Section 17 of CICRA stipulates that a CIC may seek and obtain credit information from its members (Credit Institution / CIC) only.

As a result, when a Specified User, as defined in CICRA and Credit Information Companies Regulations, 2006, obtains credit information on a particular borrower/client from a CIC, it gets only such information that has been provided to the CIC by its members.

This does not include credit history related to those non-member Credit Institutions with which the borrower/client has/had a current or a past exposure.

To overcome this problem of incomplete/inaccurate credit information, pros and cons of certain possible alternatives have been discussed in the Report. These alternatives along with suggestions/comments obtained from IBA and the CICs have been examined by RBI.

 It has been decided that the best option would be to mandate all Credit Institutions to become members of all CICs and moderate the membership and annual fees suitably.

                Hence, RBI has advised that  All Credit Institutions (CIs) shall become members of all CICs and submit data (including historical data) to them.

Further, CICs and CIs shall keep the credit information collected/maintained by them, updated regularly on a monthly basis or at such shorter intervals as may be mutually agreed upon between the CI and the CIC.

                RBI has also fixed the upper cap of membership fees that the CICs can charge CIS to become their members and the annual fees. Accordingly, the one-time membership fee charged by the CICs, for CIs to become their members, shall not exceed Rs.10,000 each. The annual fees charged by the CICs to CIs shall not exceed Rs.5000 each.

                The ground reality for the prospective borrowers will drastically change. Each CIC has its own format for scoring and reporting. In case of any aberration in any one CIC report, the prospective buyer has to satisfactorily reply to the Credit Institution queries. This will increase the TAT to obtain credit.

                One option to reduce such aberrations is to mandate by law to provide   consumers to  one free comprehensive disclosure of all of the information in their credit file from each of the four national credit reporting companies once every 12 months through a Central Source.

                Trust RBI will shortly issue guidelines in this regard. This can be similar to USAs Fair Credit Reporting Act

For the next 200 hours, this website will be Bangaloreans’ favorite site

            

          

              The Republic Day and Independence Day week is welcomed by majority of Bangaloreans by a visit to the famous LalBagh Gardens.

            The garden spread over 240 acres is decked with ornamental flower shows during the Republic Day and Independence Day week.

            Each year a special theme is chosen and the Lalbagh Glass House houses a magnificent   replica of the chosen theme.

            The theme for the first 2015 show is replica of Delhi’s Red Fort. The replica is made of 3 lac Dutch roses.

            In honor of US President Barack Obama’s visit to New Delhi, the Statue of Liberty will be recreated using a variety of flowers.

            The entry to the flower show is through tickets. In all the previous flower shows, the tickets were available only at the venue.

            With eCommerce picking up all over the nation, for the first time, the tickets of Lalbagh Flower Show can be brought online at this site.

            Bookings have opened on 16/01/2015 and already the tickets are flying off fast.

            The flower show is open from 9.00pm to 6.00pm and the tickets are valid only for the day.

            No carry forward is owned.

            10 Benefits of this Safe eTransaction initiative:

01) Cash handling of INR80,00,000/- reduced

02)Saving of 500 hours of manpower at various parts of the cash handling chain

03)Accurate count of expected visitors

04)Crowd Management

05)Visitors traffic management

06)Cross-sell opportunities

07)Increase in footfalls

08)Calculation of time-spent by the visitors at  the flower show

09)Conversion of Cash transactions to Cashless transactions

10) Spread the joy of Safe eTransactions

            

Ideas to transform Nasik Kumbh Mela into LessCash Mela

What is a Mela?

In India, Mela denotes gathering of mankind to celebrate an auspicious occasion.

The largest gathering of mankind happens at the Kumbh Melas’.

This year a dedicated group of people have come together to change the face of Kumbh Mela.

The focus is on technology to make Nasik Kumbh Mela 2015 a safer, invigorating experience for the visitors as well as the Government.

The local administration with assistance by State Government plays a major role in setting up the infrastructure.

Broadly the following is the thought processes to encourage the migration from Cash Transactions to LessCash Transactions.

The aim is LessCash Transactions, as the CashLess mode is a distant dream.

Sr No	Idea	Brief Approach
01)	Mobile Wallet – Aggregator mode	a)    Merchants are on boarded onto  a Mobile Wallet b)   Buyers complete the electronic transaction through a OTP (One Time Password) Prerequisite: Smart Phone, Balance in the mobile wallet Mobile Wallet funding: Online or through cash at designated outlets Reverse sweep facility is preferred
02)	POS Mode	All mela visitors will not have smartphones, however a majority are expected to have Debit Cards. Hence, the mela visitors should have a choice of electronic payment modes.
03)	Low transaction costs	There should be minimal/nil transactions costs for the merchants as well as the buyers. The visitors profile will be skewed towards middle-class and lower middle class people, The transaction value will range will be between INR1 to INR10,000/- The average transaction value will be INR2000/- Any transaction cost will discourage merchants as well as buyers to opt for the electronic payment model.
	Increase the pool of Merchants	Success of Electronic Transactions depends on a large pool of Merchants willing to accept electronic payments. The types of merchants in the Mela area will be Pujaris, shopkeepers selling puja items, food stalls, lodges, transport operators, parking operators etc Atleast 50% of the merchants in the Mela Area should be willing to adopt electronic payments. This would encourage the buyers to opt for electronic payments.
	Shift in Mindset	Electronic payments means the credits will reflect in the merchants bank accounts. The current mindset is FOR cash transactions rather than CashLess transactions, as the benefits of cash transactions for merchants are more compared with CashLess transactions. As the nature of the mela is temporary in nature, the majority of the merchants would not prefer to either open bank accounts or accounts with bill aggregators. Strategies must be in place to convert merchants to the Electronic Payment channel.
	Addons	Vehicle tracker Mela Insurance-Group Insurance model Water ATMs Loyalty points 10 seconds advertisements on smartphones Person tracker

Credits to Nitin Gaikwad and Gnana Sudhakar

The Cash Warriors – WhatsApp Group

            A new group known the The Cash Warriors is being launched on WhatsApp.

            The objective of the Group is to explore new avenues to increase CashLess transactions in their sphere of influence.

            The shared best practices can be adopted by other group members.

            Group members can also share one link every 24 hours on stories related to migration of transactions from Cash mode to Electronic mode.

Prospective group members can leave their phone number in the Linkedin comments box, with a 2 line statement supporting their request.

At present this will be only a WhatsApp group.

In future, if there is demand, a similar LI group/Facebook Page too will be created.

This group is not for advertising own products, rather it’s focus is on executable concepts.

Go ahead, share your phone number in the LI comments box.

Admission is restricted to 45 members only.

            

Indian Institutions can seek financial assistance from the Depositor Education and Awareness Fund

            Reserve Bank of India has recently released the guidelines on Criteria for Institutions, who can seek Financial Assistance from the Depositor Education and Awareness Fund

Key features

i) Objectives and Scope of activities: To grant financial assistance to institutions/ organisations/ associations for taking up various activities relating to promoting bank depositors’ education and awareness.

ii) Eligible entities: The institutions/ organisations/ associations, viz., not for profit public charitable trusts, corporates, universities, etc., who are already engaged in activities relating to bank depositors’ education and awareness or proposing to take up depositors’ education programmes, organising seminars, symposia, etc., including research activities, can be considered for assistance.

iii) Procedure for application: Entities may apply in the prescribed format given as Annex to the Guidelines along with necessary documents/ information as per the list of documents indicated in the application form, to The Chief General Manager, Department of Banking Regulation, Reserve Bank of India, Central Office, 12th Floor, Central Office Building, Shahid Bhagat Singh Road, Mumbai – 400001.

iv) In the first tranche Applications will be received at the above address till the close of business as on February 27, 2015.

Background

Pursuant to the amendment of The Banking Laws (Amendment) Act, 2012, Section 26A has been inserted in the Banking Regulation Act, 1949 that empowers the Reserve Bank to establish a fund called Depositor Education and Awareness Fund (Fund).

The Scheme envisages registration of institutions, organisations or associations and grant of financial assistance to them for promotion of depositors’ interests.

 The Fund has been created and all banks (Scheduled Commercial Banks including Regional Rural Banks and Local Area Banks /Urban Co-operative Banks / State Co-operative Banks /District Central Co-operative Banks) have been advised to transfer inoperative deposit accounts which have not been claimed or operated for a period of ten years or more or any deposit or any amount remaining unclaimed for more than 10 years to the Fund as mentioned in paragraph 3(vii) of the Scheme, banks shall transfer to the Fund the amounts becoming due in each calendar month (i.e. proceeds of the inoperative accounts and balances remaining unclaimed for ten years or more) as specified in  the Scheme and the interest accrued thereon on the last working day of the subsequent month.

 The Fund shall be utilised for promotion of depositors’ interest and for such other purposes which may be necessary for the promotion of depositors’ interests as specified by the Reserve Bank from time to time.

The depositor would, however, be entitled to claim from the bank his deposit or operate his account after the expiry of ten years, even after the unclaimed deposit funds have been transferred to the Fund. The bank would be liable to pay the deposit amount to the depositor and claim refund of such amount from the Fund.

Scope of activities

The scope of activities for which financial assistance would be provided by the Depositor Education and Awareness Fund are as follows:

• Conducting programmes/events for educating or spreading awareness among the excluded sections of the society, about benefits of financial literacy, information about various products available on various channels explaining the procedure/formalities, etc., for enrolment and actual opening of accounts in association with recognised Depositors’ associations/ NGOs etc.
• Holding seminars and symposia for depositors/ depositors’ associations for imparting financial literacy including safe and secure banking.
• Funding projects and research activities relating to depositors’ education, rights awareness, etc.
• Production/ Procurement of material for distribution at exhibitions, seminars, town hall events, outreach programmes conducted for depositors’ awareness.
• Running Media Campaigns on financial literacy, customer protection, etc.
• Other consumer protection/awareness related programmes.

This is only an indicative list in terms of Section 26A(4) of the BR Act, 1949 and the Reserve Bank may consider such other activities which it may deem necessary for furthering the objectives of the Fund from time to time

 Monitoring: The activity of the institutions/ organisations/ associations shall be monitored, post-registration.

The most important part, RBI in order to ensure transparency, the names of registered institutions/ organisations/ associations will be placed on the RBI website.

A flurry of activity will be seen in the prospective institutions in the next couple of months to ensure that all the paper work is as per RBI guidelines.