Country’s largest public sector lender, State Bank of India (SBI) has launched multi-function smart cards in association with a Pune based City Corporation Limited. A data centre has been set up for the technical support of the society called Amanora. Around Rs 70 crore has been invested for the setting of data centre.
City Corporation said, Amanora is India’s first digital city and the first fully integrated township has been set up with multiple technologies brought together to facilitate hassle free living for its members.
The card has a combination of microchip, magnetic strip and RFID antenna.
Aniruddha Deshpande, managing director, City Corporation Limited explained, "With our development effort of over three years along with leading technology partners, we are happy to have reached this stage of developing the first such dedicated and integrated application for residential purposes."
The card can be used as an access card similarly to debit card. The card owners can use card to access township, residence, parking lot and different sectors within the township. It can also be used for payment of cable television bills, club expenses, shopping at Amanora Town Centre, among others. This card will have added feature of health records of the Amanora Citizens in case of an emergency.
City Corporation will also collaborate with SBI for providing financial solutions. The card can be used as pre-paid card for paying electricity bill and cooking gas.
Tuesday, November 9, 2010
Tuesday, November 2, 2010
SBI to widen its credit card biz
State Bank of India is increasing its credit card business. It had earlier shrunk its card base by 16%. The bank will be focusing more on the upper middle class segment this time and has thus decided to come up with Platinum cards.
SBI Cards is a joint venture of 60:40 between SBI and GE Capital has registered a profit in the quarter ended September 2010, though it had expected to attain profit by March 2011.
During the recession period most of the banks pulled back from credit card due to huge losses, even SBI Cards pulled back but it is the fastest one to rebound to the growth mode. State Bank of India chairman OP Bhatt said, “The whole industry had seen a 33% drop in the number of cards from 27-28 million to 18 million. Against this, the number for SBI Cards has come down from 3.1 million at its peak level in 2008 to around 2.6 million now.” As bank has recovered it plans to issue at least 40,000 cards every month.
But bank will not sell the cards through marketing agents at petrol pumps it will sell cards largely to customers at bank branches.
The bank plans to increase its customer’s base in the high net worth segment, as it is high-spending and less prone to defaults. Bank plans to increase the high net worth segment from 5% to over 50%. To achieve this target it is offering a host of benefits with a Platinum Card. The benefits include 10 cash points for every 100 spent and up to three Kingfisher Airline return air tickets every year.
SBI Cards CEO Abhay Kumar Singh, points out, the company has learned a lesson from the industry’s excesses of 2007-08. He said, “There is no mad rush for land grab or market share,” and added, the wise decision on issuing cards has helped in bringing down loan losses to single-digit levels.
GE Capital president and CEO Anish Shah said, “Acquiring customers through SBI branches helps us know the customer far more than we can otherwise. That gives SBI Cards a better understanding of the customer preferences as well as helps us plan the product mix and customer value proposition.”
Mr Bhatt said most probably the central bank will maintain status quo or at best raise rates by 25 basis points in its half-yearly review of its monetary policy. He added, however the central bank has tough choice as even without RBI action, there is tightness in the money markets, but at the same time, inflation has not come down to comfortable levels.
Mr Bhatt said SBI year-on-year growth in credit was around 18% and increasing advances to achieve 20% plus levels which would be tough. Although there is shortfall in liquidity in money markets, the SBI chairman said the bank is in comfortable position. He said, “There was a time when there was a shortage of liquidity. From there, we moved to a position when there was a liquidity overhang. Today, we are in a position where we are just right in terms of liquidity.”
He informed that the reviewing of lending rates will depend on how its cost of funds moves.
SBI Cards is a joint venture of 60:40 between SBI and GE Capital has registered a profit in the quarter ended September 2010, though it had expected to attain profit by March 2011.
During the recession period most of the banks pulled back from credit card due to huge losses, even SBI Cards pulled back but it is the fastest one to rebound to the growth mode. State Bank of India chairman OP Bhatt said, “The whole industry had seen a 33% drop in the number of cards from 27-28 million to 18 million. Against this, the number for SBI Cards has come down from 3.1 million at its peak level in 2008 to around 2.6 million now.” As bank has recovered it plans to issue at least 40,000 cards every month.
But bank will not sell the cards through marketing agents at petrol pumps it will sell cards largely to customers at bank branches.
The bank plans to increase its customer’s base in the high net worth segment, as it is high-spending and less prone to defaults. Bank plans to increase the high net worth segment from 5% to over 50%. To achieve this target it is offering a host of benefits with a Platinum Card. The benefits include 10 cash points for every 100 spent and up to three Kingfisher Airline return air tickets every year.
SBI Cards CEO Abhay Kumar Singh, points out, the company has learned a lesson from the industry’s excesses of 2007-08. He said, “There is no mad rush for land grab or market share,” and added, the wise decision on issuing cards has helped in bringing down loan losses to single-digit levels.
GE Capital president and CEO Anish Shah said, “Acquiring customers through SBI branches helps us know the customer far more than we can otherwise. That gives SBI Cards a better understanding of the customer preferences as well as helps us plan the product mix and customer value proposition.”
Mr Bhatt said most probably the central bank will maintain status quo or at best raise rates by 25 basis points in its half-yearly review of its monetary policy. He added, however the central bank has tough choice as even without RBI action, there is tightness in the money markets, but at the same time, inflation has not come down to comfortable levels.
Mr Bhatt said SBI year-on-year growth in credit was around 18% and increasing advances to achieve 20% plus levels which would be tough. Although there is shortfall in liquidity in money markets, the SBI chairman said the bank is in comfortable position. He said, “There was a time when there was a shortage of liquidity. From there, we moved to a position when there was a liquidity overhang. Today, we are in a position where we are just right in terms of liquidity.”
He informed that the reviewing of lending rates will depend on how its cost of funds moves.
Monday, November 1, 2010
Indian Americans in US get gift card from American Express on Diwali
American Express is offering a gift card with an exclusive Diwali theme for the first time this year to Indians based in US.
Alpesh Chokshi, president, global prepaid business said, "We're absolutely delighted as a company to launch the Diwali card for Indian American this year," and added, this is the first time the company is offering a product addressing to the needs of the Indian community in the US.
Chokshi informed, "The Asian Network at American Express brought the idea to our team. In fact, they designed the card as well" a contest was also conducted for this.
Unlike other gift cards, on American Express gift cards there are no fees after purchase – for activation, for checking balance, monthly servicing or card replacement.
Moreover there is no limit on usage of card, and if the card gets stolen or lost, funds can be replaced. They can be used at any place that accepts American Express cards.
The card is accepted at millions of locations in the United States, Puerto Rico and the US Virgin Islands where American Express Cards are accepted.
Chokshi said, "You can be confident during Diwali that you are giving 100 percent gift and zero percent fees."
Chokshi was born in India but moved to the US with his parents in the late sixties. He says, now things have changed considerably, earlier it was difficult to find an Indian restaurant or grocery store anywhere. Now, you can find them easily.
Chokshi said, "When there's very little of your culture it's very hard to succeed, to survive, to integrate with the community. I've seen it all first hand but now, as we've seen the Indian community grow in America and expand over time, to me it's a signature day for the community when a Diwali gift is being introduced."
Bank has launched Diwali Gift Card in denominations of $25, $50, $100 and $200 and can be obtained online (at www.americanexpress.com/diwali) for a limited time. Moreover, customers will get free standard shipping offer from American Express when they enter the promo code “Diwali".
Alpesh Chokshi, president, global prepaid business said, "We're absolutely delighted as a company to launch the Diwali card for Indian American this year," and added, this is the first time the company is offering a product addressing to the needs of the Indian community in the US.
Chokshi informed, "The Asian Network at American Express brought the idea to our team. In fact, they designed the card as well" a contest was also conducted for this.
Unlike other gift cards, on American Express gift cards there are no fees after purchase – for activation, for checking balance, monthly servicing or card replacement.
Moreover there is no limit on usage of card, and if the card gets stolen or lost, funds can be replaced. They can be used at any place that accepts American Express cards.
The card is accepted at millions of locations in the United States, Puerto Rico and the US Virgin Islands where American Express Cards are accepted.
Chokshi said, "You can be confident during Diwali that you are giving 100 percent gift and zero percent fees."
Chokshi was born in India but moved to the US with his parents in the late sixties. He says, now things have changed considerably, earlier it was difficult to find an Indian restaurant or grocery store anywhere. Now, you can find them easily.
Chokshi said, "When there's very little of your culture it's very hard to succeed, to survive, to integrate with the community. I've seen it all first hand but now, as we've seen the Indian community grow in America and expand over time, to me it's a signature day for the community when a Diwali gift is being introduced."
Bank has launched Diwali Gift Card in denominations of $25, $50, $100 and $200 and can be obtained online (at www.americanexpress.com/diwali) for a limited time. Moreover, customers will get free standard shipping offer from American Express when they enter the promo code “Diwali".
Wednesday, October 6, 2010
Frequent flyers earn added benefit of air miles
On using credit cards the cardholder get discounts, loyalty cards and free tickets. But who fly frequently get more benefits besides those given on other credit cards. They get some interesting offers from their credit card companies, including co-branded airline cards, zero percent interest on ticket repayments and even free tickets.
Ramesh Iyer booked air tickets for his daughter who was going to UK for education and his wife who wanted to spend time with her, using his co-branded Standard Chartered Emirates’ credit card. On this he got a deal- he paid only Rs 6,000 (mainly taxes) for his wife’s return fare.
Iyer credit card gets him earn Emirates Airlines’ loyalty program, Skywards, in this program members have to pay an upfront charge of Rs 10,000, which allows them up to 25,000 redeemable bonus air miles. Further, on every Rs 150 spent through the card, there is an additional four air miles.
Suppose the upfront fee is Rs 10,000 and Rs 6,000 a tax, Iyer’s cost works out to be Rs 16,000. It is quite cheap in comparison to Rs 40,000 he would have paid otherwise. Seeing the cost advantage, Iyer decided to renew his membership, as he will travel to UK very often.
Sandeep Bhalla, business-head, credit payment products, Citibank India said, amongst the credit card holders air travel is the top-spend category. Thus, card companies concentrate more on these.
There are co-branded cards which are launched in tie-up with companies and airlines. Recently, ICICI Bank launched a co-branded card with Kingfisher Airlines, namely ICICI Bank Kingfisher Airlines MasterCard Credit Card. These cards link customers to the airline’s frequent-flyer program or its loyalty club. The club such as Jet Privilege and King Club give benefits like discounts, upgraded vouchers and access to travel-related privileged services at airports and hotels. The retail transactions can also be made from these cards.
If card issuer has a tie-up with specific airline then redemption of air miles can be restricted as the scheme is available for that airline only.
Arvind Hali, head (retail assets and credit cards), Dhanlaxmi Bank, says, “Several operational issues may arise if there are more than three partners in a tie-up. But airlines are exploring ways to allow customers the privileges on their extended network”. Soon bank will be tie-up with domestic airline.
However, most banks prefer to be airline independent. Deutsche Bank World Miles Credit Card can be used across all airlines worldwide the latest is Citibank PremierMiles Credit Card on which customers can earn air miles across 50 domestic and international airlines.
On such cards most banks charge fees ranging from Rs 5,000 annually (Citibank PremierMiles Credit Card) to Rs 25,000 for a lifetime (American Express Kingfisher First Platinum Card).
So, if you are frequent flyers then only opt for these cards. Most card issuers say it is wise to redeem air miles of international travel rather than domestic travel as customers get more benefits on international travel.
On airline cards customers get to convert the reward points into air miles but the conversion can cost a high number of reward points. For instance, SBI cardholder require to earn 4,000, 6,000 and 8,000 reward points get just 2,000 air miles to be redeemed against Indian Airlines, Kingfisher Airlines and Jet Airways, respectively.
Moreover, to get 2,000 air miles to buy a ticket, you require earning minimum of 4,000 air miles to buy a ticket. For instance, to get a Mumbai-Pune Jet Airways ticket for which you require 4,000 air miles you need to earn 16,000 rewards points if you are an SBI cardholder.
This means spending more cash. For instance if you want to avail 2,000 Citibank PremierMiles, you will have to spend Rs 80,000 on non-airline purchases (2.5 miles for every Rs 100). For airline-related expenses, spending 20,000 will get you 2,000 air miles (10 miles a Rs 100).
There are terms and conditions for redemption of reward points. Reward points of a few cards can lapse, if not redeem in a particular time period, making it difficult to accumulate enough points for conversion. On some there is restricting redemption on certain purchases like fuel or buying tickets of low-cost airlines. On others, there is black-out period, when travel is restricted, or period within which the air miles have to be redeemed.
Ramesh Iyer booked air tickets for his daughter who was going to UK for education and his wife who wanted to spend time with her, using his co-branded Standard Chartered Emirates’ credit card. On this he got a deal- he paid only Rs 6,000 (mainly taxes) for his wife’s return fare.
Iyer credit card gets him earn Emirates Airlines’ loyalty program, Skywards, in this program members have to pay an upfront charge of Rs 10,000, which allows them up to 25,000 redeemable bonus air miles. Further, on every Rs 150 spent through the card, there is an additional four air miles.
Suppose the upfront fee is Rs 10,000 and Rs 6,000 a tax, Iyer’s cost works out to be Rs 16,000. It is quite cheap in comparison to Rs 40,000 he would have paid otherwise. Seeing the cost advantage, Iyer decided to renew his membership, as he will travel to UK very often.
Sandeep Bhalla, business-head, credit payment products, Citibank India said, amongst the credit card holders air travel is the top-spend category. Thus, card companies concentrate more on these.
There are co-branded cards which are launched in tie-up with companies and airlines. Recently, ICICI Bank launched a co-branded card with Kingfisher Airlines, namely ICICI Bank Kingfisher Airlines MasterCard Credit Card. These cards link customers to the airline’s frequent-flyer program or its loyalty club. The club such as Jet Privilege and King Club give benefits like discounts, upgraded vouchers and access to travel-related privileged services at airports and hotels. The retail transactions can also be made from these cards.
If card issuer has a tie-up with specific airline then redemption of air miles can be restricted as the scheme is available for that airline only.
Arvind Hali, head (retail assets and credit cards), Dhanlaxmi Bank, says, “Several operational issues may arise if there are more than three partners in a tie-up. But airlines are exploring ways to allow customers the privileges on their extended network”. Soon bank will be tie-up with domestic airline.
However, most banks prefer to be airline independent. Deutsche Bank World Miles Credit Card can be used across all airlines worldwide the latest is Citibank PremierMiles Credit Card on which customers can earn air miles across 50 domestic and international airlines.
On such cards most banks charge fees ranging from Rs 5,000 annually (Citibank PremierMiles Credit Card) to Rs 25,000 for a lifetime (American Express Kingfisher First Platinum Card).
So, if you are frequent flyers then only opt for these cards. Most card issuers say it is wise to redeem air miles of international travel rather than domestic travel as customers get more benefits on international travel.
On airline cards customers get to convert the reward points into air miles but the conversion can cost a high number of reward points. For instance, SBI cardholder require to earn 4,000, 6,000 and 8,000 reward points get just 2,000 air miles to be redeemed against Indian Airlines, Kingfisher Airlines and Jet Airways, respectively.
Moreover, to get 2,000 air miles to buy a ticket, you require earning minimum of 4,000 air miles to buy a ticket. For instance, to get a Mumbai-Pune Jet Airways ticket for which you require 4,000 air miles you need to earn 16,000 rewards points if you are an SBI cardholder.
This means spending more cash. For instance if you want to avail 2,000 Citibank PremierMiles, you will have to spend Rs 80,000 on non-airline purchases (2.5 miles for every Rs 100). For airline-related expenses, spending 20,000 will get you 2,000 air miles (10 miles a Rs 100).
There are terms and conditions for redemption of reward points. Reward points of a few cards can lapse, if not redeem in a particular time period, making it difficult to accumulate enough points for conversion. On some there is restricting redemption on certain purchases like fuel or buying tickets of low-cost airlines. On others, there is black-out period, when travel is restricted, or period within which the air miles have to be redeemed.
Monday, September 27, 2010
Ahmedabad Crime Branch arrests two youth for using fake credit card
Two youths Kinjal Doshi (28) and Jay Joshi (21) were arrested in Ahmedabad by the Ahmedabad Crime Branch for using fake credit card. One of the accused had nine fake credit cards which he had brought from London, police told.
The accused are the residents of Satellite and Naranpura areas. The police informed, Doshi for fours years had worked as a deputy cashier in a London-based casino while his stay in the UK capital on a student visa.
The police said, Doshi, came to Ahmedabad on September 13, along with Jay he went to Central Mall at Ambawadi and purchased goods worth over Rs 7,000 using one of the cards. The officials of the Axis Bank, which had provided swipe machines at the complex, soon, detected that fake card has been used as in the transaction the cardholder’s name was not there. They alerted the mall authorities who in turn immediately informed the police.
Police has recovered the cards from the Doshi and said the card had magnetic strips most probably with the names of original card-holders or some code number, which enable the card to be swiped easily. Police is doing investigation.
The accused are the residents of Satellite and Naranpura areas. The police informed, Doshi for fours years had worked as a deputy cashier in a London-based casino while his stay in the UK capital on a student visa.
The police said, Doshi, came to Ahmedabad on September 13, along with Jay he went to Central Mall at Ambawadi and purchased goods worth over Rs 7,000 using one of the cards. The officials of the Axis Bank, which had provided swipe machines at the complex, soon, detected that fake card has been used as in the transaction the cardholder’s name was not there. They alerted the mall authorities who in turn immediately informed the police.
Police has recovered the cards from the Doshi and said the card had magnetic strips most probably with the names of original card-holders or some code number, which enable the card to be swiped easily. Police is doing investigation.
Thursday, September 23, 2010
Banks and e-payment firms prefer to expand prepaid cards business
The banks and electronic payments firms are looking to expand their prepaid cards business instead of credit cards.
Some of the private lenders such as Axis Bank Ltd, HDFC Bank Ltd, ICICI Bank Ltd and Yes Bank Ltd are already offering prepaid cards. Prepaid cards come in a variety forms, such as one-time gift cards, foreign currency travel cards, meal cards, corporate incentive cards and government disbursement cards.
State-owned lender, Canara Bank and foreign bank, Citibank NA are planning to enter into prepaid card business this year.
Electronic payments firms MasterCard Worldwide and Visa Consolidated Support Services (India) Pvt. Ltd say, they see their future growth in India in the prepaid segment.
Laura Kelly, group head (global prepaid and healthcare solutions) at MasterCard Worldwide said, in India prepaid card market is expected to grow by 40% every year to $59 billion (Rs.2.70 trillion today) in 2017 from $4 billion in 2009.
Kelly said, “About $34 billion will come from corporate travel, incentives, meal vouchers and payrolls, while $23 billion will come from consumer reloadable and online cards. Only $2 billion will come from public benefit, pension and social security programs.”
According to HDFC Bank there has been a rapid growth in prepaid card segment. Navtej Singh, head (direct payment products) at HDFC Bank told, “We offer all types of cards—payroll, travel, food and gift—and we have seen 75-80% growth in the last year.”
Anuj Saraswat, vice-president (global transaction services) at Citibank informed the bank will be launching a corporate incentives card this fiscal. He said, “It will be a pre-loaded card with a Rs.50,000 limit....”
While Canara Bank will soon be launching a gift card, later it will be adding travel card and a corporate card to prepaid card segment. Nagendra H.V., manager at the card division of Canara Bank informed, “The gift card will be launched very soon with a maximum un-reloadable limit of Rs.5, 000.”
In India usage of credit card is declining and prepaid cards are gaining popularity.
As per RBI data, in July the circulation of credit cards had dropped to 18.9 million as against 22.2 million in the same month last year.
A.S.V. Krishnan, working as an analyst at Ambit Capital Pvt. Ltd, said Indian banks have cut down their credit card segments because of fear of defaults, while prepaid cards are risk-free. He said, “I can spend Rs.40,000 on a credit card and not pay back, but on a prepaid card I cannot spend more than my balance. Also, banks may earn fee income from vendors on these cards, which they may not get from...debit cards.”
The e-payment firms Visa and MasterCard are aiming at government payments under programs such as the rural jobs guarantee schemes. Normally, these payments are done through cheques or cash. Both the firms are in talks in order to get them shifted into prepaid mode.
Saraswat of Citibank agreeing with the strategy said, “The 2017 targets look optimistic. But just imagine if sleeping giants like India Post, which has doubled the number of total bank branches, use this system.”
Some of the private lenders such as Axis Bank Ltd, HDFC Bank Ltd, ICICI Bank Ltd and Yes Bank Ltd are already offering prepaid cards. Prepaid cards come in a variety forms, such as one-time gift cards, foreign currency travel cards, meal cards, corporate incentive cards and government disbursement cards.
State-owned lender, Canara Bank and foreign bank, Citibank NA are planning to enter into prepaid card business this year.
Electronic payments firms MasterCard Worldwide and Visa Consolidated Support Services (India) Pvt. Ltd say, they see their future growth in India in the prepaid segment.
Laura Kelly, group head (global prepaid and healthcare solutions) at MasterCard Worldwide said, in India prepaid card market is expected to grow by 40% every year to $59 billion (Rs.2.70 trillion today) in 2017 from $4 billion in 2009.
Kelly said, “About $34 billion will come from corporate travel, incentives, meal vouchers and payrolls, while $23 billion will come from consumer reloadable and online cards. Only $2 billion will come from public benefit, pension and social security programs.”
According to HDFC Bank there has been a rapid growth in prepaid card segment. Navtej Singh, head (direct payment products) at HDFC Bank told, “We offer all types of cards—payroll, travel, food and gift—and we have seen 75-80% growth in the last year.”
Anuj Saraswat, vice-president (global transaction services) at Citibank informed the bank will be launching a corporate incentives card this fiscal. He said, “It will be a pre-loaded card with a Rs.50,000 limit....”
While Canara Bank will soon be launching a gift card, later it will be adding travel card and a corporate card to prepaid card segment. Nagendra H.V., manager at the card division of Canara Bank informed, “The gift card will be launched very soon with a maximum un-reloadable limit of Rs.5, 000.”
In India usage of credit card is declining and prepaid cards are gaining popularity.
As per RBI data, in July the circulation of credit cards had dropped to 18.9 million as against 22.2 million in the same month last year.
A.S.V. Krishnan, working as an analyst at Ambit Capital Pvt. Ltd, said Indian banks have cut down their credit card segments because of fear of defaults, while prepaid cards are risk-free. He said, “I can spend Rs.40,000 on a credit card and not pay back, but on a prepaid card I cannot spend more than my balance. Also, banks may earn fee income from vendors on these cards, which they may not get from...debit cards.”
The e-payment firms Visa and MasterCard are aiming at government payments under programs such as the rural jobs guarantee schemes. Normally, these payments are done through cheques or cash. Both the firms are in talks in order to get them shifted into prepaid mode.
Saraswat of Citibank agreeing with the strategy said, “The 2017 targets look optimistic. But just imagine if sleeping giants like India Post, which has doubled the number of total bank branches, use this system.”
Monday, September 20, 2010
Credit card ‘skimming’ crime on increase
Most of us make payments with your credit cards. When you give your credit card to make payment in a shop or insert it into an Automated Teller Machine (ATM), then your card information is taken away using a small machine called a skimmer and you can be a victim of an international crime called ‘skimming’.
The cyber crime cell of the Chennai Police has received more than 25 complaints from persons who had become victims of such scam.
In their complaints victims have said that they had lost money from ATMs through forged credit cards. A senior police official told, “skimming is done in connivance with an UK-based gang that clones credit cards using a small machine called a skimmer which reads the data on the magnetic strip of the card and clones it.” The forged cards are then sent to India.
‘Fake card entry slots are used by criminals who perpetuate this crime. The information on the card is recorded on a device hidden in the card entry slot.’
A senior police official told, last year the cyber crime police had recovered 160 fake international credit cards using which four-member gang were to withdraw Rs 15 crore.
In span of three days the accused had cheated people of over Rs 20 lakh, but police was able to recover about Rs six lakh from the accused.
The accused had cloned credit cards to shop at five-star hotels, malls and jewellery stores in the city. He said, the accused had skimmed credit cards of tourists.
He has advised the credit card users to be careful when giving card for sweep and keep an eye on suspicious individuals if present around when using your credit or debit card.
He also said the cardholders should not allow their credit or debit card to be swiped out of your view. Also be aware of unusual devices or card readers attached to an ATM machine.
An office-bearer of the Chennai Credit Cards Users Association said, “Apart from complaints on banks, we do receive complaints pertaining to skimming these days which we are forwarding to police officials.” He added, “We are also planning to conduct awareness programmes in this regard.”
The cyber crime cell of the Chennai Police has received more than 25 complaints from persons who had become victims of such scam.
In their complaints victims have said that they had lost money from ATMs through forged credit cards. A senior police official told, “skimming is done in connivance with an UK-based gang that clones credit cards using a small machine called a skimmer which reads the data on the magnetic strip of the card and clones it.” The forged cards are then sent to India.
‘Fake card entry slots are used by criminals who perpetuate this crime. The information on the card is recorded on a device hidden in the card entry slot.’
A senior police official told, last year the cyber crime police had recovered 160 fake international credit cards using which four-member gang were to withdraw Rs 15 crore.
In span of three days the accused had cheated people of over Rs 20 lakh, but police was able to recover about Rs six lakh from the accused.
The accused had cloned credit cards to shop at five-star hotels, malls and jewellery stores in the city. He said, the accused had skimmed credit cards of tourists.
He has advised the credit card users to be careful when giving card for sweep and keep an eye on suspicious individuals if present around when using your credit or debit card.
He also said the cardholders should not allow their credit or debit card to be swiped out of your view. Also be aware of unusual devices or card readers attached to an ATM machine.
An office-bearer of the Chennai Credit Cards Users Association said, “Apart from complaints on banks, we do receive complaints pertaining to skimming these days which we are forwarding to police officials.” He added, “We are also planning to conduct awareness programmes in this regard.”
Thursday, September 16, 2010
ICICI Bank, Kingfisher in a tie-up launch new credit card
ICICI Bank in a tie up with Kingfisher Airlines has launched a new credit card in which the cardholder will get host of lifestyle benefits.
ICICI Bank Kingfisher Airlines MasterCard Credit Card will be available in three variants – World, Platinum and Titanium.
According to bank release on all card spending the cardholder will earn accelerated miles, bonus miles on joining and renewal, complimentary upgrade vouchers, membership of King Club, Kingfisher Airlines' frequent flyer program, and a range of special offers on shopping, golfing and dining.
A Raghunathan, Kingfisher Airlines' Chief Financial Officer said, "This card is set to be a game-changer with an unmatched value proposition and a host of benefits."
The bank release said the cardholders can redeem the miles earned for free flight tickets and upgrade vouchers with the leading private airlines.
Friday, September 3, 2010
Central Bank launches pre-paid cards
Being official partners of Commonwealth Games 2010, Central Bank of India has launched a range of pre-paid cards. The cards have been launched for the accredited players and delegates as well as for the bank’s existing customers. Bank is also celebrating its Centenary Year.
Central Bank of India said in a press release, “The bank is on the threshold of entering its centenary year. As a befitting gesture, the bank has been chosen as the exclusive official banking partner of Commonwealth Games, 2010. The bank is planning to roll out a series of niche products for its endearing customers during this centenary year.”
The bank has launched these pre-paid cards in variants – Commonwealth cards (a general purpose re-loadable card), Gift card and Travel card in U.S. dollar.
The bank is also in a process of launching a Titanium Combi Debit card – a first for Indian market, in which Pin and signature facility will be available on a single card. S. Sridhar, Chairman and Managing Director of the bank said, these card products are for the customers of the Bank, as well as, for general public. He added, “Innovating and pioneering tailor-made banking products to suit each and every need of customers is a thrusted approach of the Bank.”
Central Bank of India said in a press release, “The bank is on the threshold of entering its centenary year. As a befitting gesture, the bank has been chosen as the exclusive official banking partner of Commonwealth Games, 2010. The bank is planning to roll out a series of niche products for its endearing customers during this centenary year.”
The bank has launched these pre-paid cards in variants – Commonwealth cards (a general purpose re-loadable card), Gift card and Travel card in U.S. dollar.
The bank is also in a process of launching a Titanium Combi Debit card – a first for Indian market, in which Pin and signature facility will be available on a single card. S. Sridhar, Chairman and Managing Director of the bank said, these card products are for the customers of the Bank, as well as, for general public. He added, “Innovating and pioneering tailor-made banking products to suit each and every need of customers is a thrusted approach of the Bank.”
Monday, August 30, 2010
KMB launches fixed deposit credit card for NRI customers
Kotak Mahindra Bank (KMB) has introduced a fixed deposit credit card for bank’s non-resident Indian customers. According to bank sources the NRI can get this credit card against a fixed deposit of Rs 1 lakh and above and the credit limit of the card is up to 80% of the deposit.
During the launch of the credit card Mr C. Javaram, Executive Director of the bank, said the cardholders will get offers such as four times reward points on international spends, fuel surcharge waiver, choice on redemption of rewards points and no-charge equated monthly installments for three months.
On this card, the cardholders will get the freedom to pay in rupee for their purchases which is will help them in saving on the ‘forex mark-up fee’. Normally the cardholders have to pay forex mark-up fee on using their international credit cards in India. Bank’s NRI customers while travelling in India can make payments of their travel, shop and dine in rupee through the card.
On the occasion Jayaram also made an official announcement of the opening of bank’s branch in Kazhikode, it is the fourth branch in Kerala the other three are already operating in Kottayam, Kochi and Thiruvananthapuram.
He told that bank will be expanding its overseas business. Following this bank’s offshore asset management business operating from offices in Dubai, London, New York, San Francisco and Singapore will be expanded. The bank has filed an application with the Reserve Bank to get permission for opening of overseas branches.
During the launch of the credit card Mr C. Javaram, Executive Director of the bank, said the cardholders will get offers such as four times reward points on international spends, fuel surcharge waiver, choice on redemption of rewards points and no-charge equated monthly installments for three months.
On this card, the cardholders will get the freedom to pay in rupee for their purchases which is will help them in saving on the ‘forex mark-up fee’. Normally the cardholders have to pay forex mark-up fee on using their international credit cards in India. Bank’s NRI customers while travelling in India can make payments of their travel, shop and dine in rupee through the card.
On the occasion Jayaram also made an official announcement of the opening of bank’s branch in Kazhikode, it is the fourth branch in Kerala the other three are already operating in Kottayam, Kochi and Thiruvananthapuram.
He told that bank will be expanding its overseas business. Following this bank’s offshore asset management business operating from offices in Dubai, London, New York, San Francisco and Singapore will be expanded. The bank has filed an application with the Reserve Bank to get permission for opening of overseas branches.
Friday, August 27, 2010
Standard Chartered Bank launches Preferred World Credit Card for its premium customers
Few days back Standard Chartered Bank had launched Preferred Banking for the emerging affluent segment in India. Now bank has introduced Preferred World Credit Card for its premium customers. Standard Chartered is the first Bank in India to introduce a differentiated offering for the emerging affluent segment with an aim to make the relationship with customers even more rewarding.
During the launch of the card Mr. Neeraj Swaroop, chief executive officer, India and South Asia, Standard Chartered Bank, Ms. Foo Mee Har, Global Head, Premium Banking, Standard Chartered Bank, Mr. T V Seshadri, vice president and country general manager, South Asia, MasterCard Worldwide and actress Kangana Ranaut were present.
This card will offer a host of features like accelerated rewards, petrol surcharge waiver, travel insurance benefits also powerful MasterCard Platform benefits like access to airport lounges in India, special privileges on staying at Taj Hotels, Resorts and Palaces in India, Silver Tier membership of Kingfisher Airlines, discounts on entry fee to premium golf clubs and more.
In India population of affluent segment has increased and is rapidly growing at 18% per annum so their needs are increasing. Preferred Banking customers are those with funds under management of up to Rs 500,000 or a mortgage of Rs 50 lakhs to Rs 1 crore, these customers are mostly young, financially growing, techno literate professionals between 25 to 40 years of age group, who are in search of recognition, convenience and rewards, and solutions.
The Preferred World Credit Card has the MasterCard platform with features provided by MasterCard Worldwide, a premier global payment solutions provider. MasterCard is one of the significant partners of Standard Chartered Bank. MasterCard has been increasing business worldwide by developing economic connections that propel real value for its customers, associates, merchants and consumers.
This unique and premium segment card will also provide preferred access to an array of world-class services to the affluent segment of society.
MasterCard from time to time has been developing innovative products so that consumers can experience life’s passion in many ways. It has a family of brands such as MasterCard®, Maestro® and Cirrus®, through which it is providing services to consumers and businesses in more than 210 countries and territories and processes over 22 billion transactions each year.
During the launch of the card Mr. Neeraj Swaroop, chief executive officer, India and South Asia, Standard Chartered Bank, Ms. Foo Mee Har, Global Head, Premium Banking, Standard Chartered Bank, Mr. T V Seshadri, vice president and country general manager, South Asia, MasterCard Worldwide and actress Kangana Ranaut were present.
This card will offer a host of features like accelerated rewards, petrol surcharge waiver, travel insurance benefits also powerful MasterCard Platform benefits like access to airport lounges in India, special privileges on staying at Taj Hotels, Resorts and Palaces in India, Silver Tier membership of Kingfisher Airlines, discounts on entry fee to premium golf clubs and more.
In India population of affluent segment has increased and is rapidly growing at 18% per annum so their needs are increasing. Preferred Banking customers are those with funds under management of up to Rs 500,000 or a mortgage of Rs 50 lakhs to Rs 1 crore, these customers are mostly young, financially growing, techno literate professionals between 25 to 40 years of age group, who are in search of recognition, convenience and rewards, and solutions.
The Preferred World Credit Card has the MasterCard platform with features provided by MasterCard Worldwide, a premier global payment solutions provider. MasterCard is one of the significant partners of Standard Chartered Bank. MasterCard has been increasing business worldwide by developing economic connections that propel real value for its customers, associates, merchants and consumers.
This unique and premium segment card will also provide preferred access to an array of world-class services to the affluent segment of society.
MasterCard from time to time has been developing innovative products so that consumers can experience life’s passion in many ways. It has a family of brands such as MasterCard®, Maestro® and Cirrus®, through which it is providing services to consumers and businesses in more than 210 countries and territories and processes over 22 billion transactions each year.
Thursday, August 12, 2010
Citibank credit card holders get unique offer from Yatra.com
Citibank credit card holders can now do payment of their air travel through the Citibank EMI service. This unique offer is given by Yatra.com, India’s leading online travel portal for its domestic and international air travelers. Under this scheme Yatra consumers get equated monthly installments payments option with no extra charges. But this offer is valid only for online travel bookings made on Yatra.com.
The customers can avail this offer by following three simple steps- they have to search for the travel of their choice using the travel booking form, choose their preferred airline or hotel booking and continue with the booking process. Lastly on the payment page, select the EMI option and complete the booking with their Citibank credit card. Using this option the travelers will be able to do bookings of airlines or hotel conveniently especially those who book bulk tickets. They will have to pay only a part of the total amount reducing their monetary burden at a point of time.
Speaking about the offer, Pratik Mazumder, Head of Marketing and Strategic Relations, Yatra.com, said, "In our endeavour to provide the best deals to our customers, this additional payment option will allow the travelers to plan their expenditure over a period of time. This service should facilitate airlines and hotels to increase their bookings and serve as a delight to all the Citibank credit card holders who book on yatra.com."
Before this Yatra.com has introduced number of distinctive schemes and offers including the recent “The 3G” offer that promise best deals and offers at an unbeatable price range. Among those offers one was two free tickets on every purchase on Yatra.com.
The offer will be valid up to 15 August, 2010 and Citibank cardholders can avail the offer across India through Yatra.com official website, mobile phones and retail lounges. The travel company plans to tap around 5 lakh customers across the country.
The customers can avail this offer by following three simple steps- they have to search for the travel of their choice using the travel booking form, choose their preferred airline or hotel booking and continue with the booking process. Lastly on the payment page, select the EMI option and complete the booking with their Citibank credit card. Using this option the travelers will be able to do bookings of airlines or hotel conveniently especially those who book bulk tickets. They will have to pay only a part of the total amount reducing their monetary burden at a point of time.
Speaking about the offer, Pratik Mazumder, Head of Marketing and Strategic Relations, Yatra.com, said, "In our endeavour to provide the best deals to our customers, this additional payment option will allow the travelers to plan their expenditure over a period of time. This service should facilitate airlines and hotels to increase their bookings and serve as a delight to all the Citibank credit card holders who book on yatra.com."
Before this Yatra.com has introduced number of distinctive schemes and offers including the recent “The 3G” offer that promise best deals and offers at an unbeatable price range. Among those offers one was two free tickets on every purchase on Yatra.com.
The offer will be valid up to 15 August, 2010 and Citibank cardholders can avail the offer across India through Yatra.com official website, mobile phones and retail lounges. The travel company plans to tap around 5 lakh customers across the country.
Monday, August 9, 2010
Axis-Visa traveler card, the first card in India to touch $1-billion in v olume
Axis Bank, a private sector lender started Travel Currency Card program in tie-up with Visa and it is the first card in the country to touch $1-billion in volume.
Under the program the business and leisure travelers get the facility to load money in local currency of the destination they are traveling to in turn can use the pre-paid amount securely for meeting travel expenses.
Axis Bank's Executive Director, S K Chakrabarti, said, "(Our customers) have loaded in excess of $100-million onto their cards over April and May this year alone."
Mostly international travelers use the credit cards. Visa India said in a release, according its study, over 40 per cent of business travelers told they used prepaid cards on trips, and added the demand for pre-paid cards is growing.
Under the program the business and leisure travelers get the facility to load money in local currency of the destination they are traveling to in turn can use the pre-paid amount securely for meeting travel expenses.
Axis Bank's Executive Director, S K Chakrabarti, said, "(Our customers) have loaded in excess of $100-million onto their cards over April and May this year alone."
Mostly international travelers use the credit cards. Visa India said in a release, according its study, over 40 per cent of business travelers told they used prepaid cards on trips, and added the demand for pre-paid cards is growing.
Thursday, August 5, 2010
American Express platinum card holders get lounge facility at Mumbai airport
American Express platinum card members will now get lounge facility at Mumbai’s Chhatrapati Shivaji International Airport. American Express had launched a similar facility at the Delhi IGI airport last year.
Shailesh Baidwan, chief executive officer, American Express banking corporation, said, ''We already have very strong lodging and airline privilege benefits and are now making the cardmembers' on-ground experiences better.''
For primary and supplementary platinum charge card members bank is offering lounge facility as complimentary accompanied by an additional guest whereas platinum credit card members have to pay a nominal fee to avail lounge facility.
Bank is offering various other benefits to platinum card members like discounts on international air tickets, complimentary hotel upgrades, exclusive platinum amenities at more than 650 hotels and resorts around the world, access to 600 exclusive VIP airport lounges in 90 countries, and travel rewards through the membership rewards program.
American Express Bank started operations in 1921 in India, since then it has been providing high quality travel related services to individuals and corporate in India.
Shailesh Baidwan, chief executive officer, American Express banking corporation, said, ''We already have very strong lodging and airline privilege benefits and are now making the cardmembers' on-ground experiences better.''
For primary and supplementary platinum charge card members bank is offering lounge facility as complimentary accompanied by an additional guest whereas platinum credit card members have to pay a nominal fee to avail lounge facility.
Bank is offering various other benefits to platinum card members like discounts on international air tickets, complimentary hotel upgrades, exclusive platinum amenities at more than 650 hotels and resorts around the world, access to 600 exclusive VIP airport lounges in 90 countries, and travel rewards through the membership rewards program.
American Express Bank started operations in 1921 in India, since then it has been providing high quality travel related services to individuals and corporate in India.
Tuesday, August 3, 2010
Banks still to link credit card interest rates to base rate system
Banks have switched to new base rate system for lending rates but banks have still not linked the interest on credit cards to new base rate.
As per July 1 circular issued to all commercial banks by the Reserve Bank of India (RBI), banks should link the interest on credit card dues to their respective base rates and prescribe a ceiling rate of interest. Again on July 9 RBI issued another circular in which it asked banks to strictly adhere to its guidelines on credit cards. But till now, no bank has changed the interest on credit cards linked to the new base rates.
Shikha Sharma, managing director and chief executive officer of Axis Bank said, “I have not seen the circular. If the RBI has issued such a circular, we’ll follow it.”
On the other hand Parag Rao, head of HDFC Bank’s credit card business said, “I am not aware of any such circular. I’ll look for it and if anything is there, I’ll get back to you.”
ICICI Bank did not gave reply of an email query.
RBI spokesperson Alpana Kilawala said, “Whenever the RBI issues a circular, we send it to the chairman’s office of every bank. Besides, the circulars are also available on the RBI’s website. So, the ignorance about the circular cannot be justified.”
She added, “However, we will consider it a deviation on the part of the banks if they do not shift to the base rates after the time period given to them for the transition and the question of penalty or a penal action will be considered then.”
However banks have been allowed to make changes in the methodology of calculating the base rate till December 31, therefore from January next year, banks will have link credit card interest rate to base rate and charge dues according to it.
Credit card dues come under lending in the non-priority sector. Till June, banks did not had any restriction and set the rate of interest on credit card buys without referring to their benchmark prime lending rate (BPLR).
Therefore, as per RBI circular, from July 1, all categories of loans, including credit card dues, must be linked to the base rate also RBI has given free hand to banks to review their base rates once in three months. According to this the interest rate on credit cards will change with every revision of the base rates.
As per July 1 circular issued to all commercial banks by the Reserve Bank of India (RBI), banks should link the interest on credit card dues to their respective base rates and prescribe a ceiling rate of interest. Again on July 9 RBI issued another circular in which it asked banks to strictly adhere to its guidelines on credit cards. But till now, no bank has changed the interest on credit cards linked to the new base rates.
Shikha Sharma, managing director and chief executive officer of Axis Bank said, “I have not seen the circular. If the RBI has issued such a circular, we’ll follow it.”
On the other hand Parag Rao, head of HDFC Bank’s credit card business said, “I am not aware of any such circular. I’ll look for it and if anything is there, I’ll get back to you.”
ICICI Bank did not gave reply of an email query.
RBI spokesperson Alpana Kilawala said, “Whenever the RBI issues a circular, we send it to the chairman’s office of every bank. Besides, the circulars are also available on the RBI’s website. So, the ignorance about the circular cannot be justified.”
She added, “However, we will consider it a deviation on the part of the banks if they do not shift to the base rates after the time period given to them for the transition and the question of penalty or a penal action will be considered then.”
However banks have been allowed to make changes in the methodology of calculating the base rate till December 31, therefore from January next year, banks will have link credit card interest rate to base rate and charge dues according to it.
Credit card dues come under lending in the non-priority sector. Till June, banks did not had any restriction and set the rate of interest on credit card buys without referring to their benchmark prime lending rate (BPLR).
Therefore, as per RBI circular, from July 1, all categories of loans, including credit card dues, must be linked to the base rate also RBI has given free hand to banks to review their base rates once in three months. According to this the interest rate on credit cards will change with every revision of the base rates.
Monday, July 26, 2010
Balance transfer is best option to reduce burden of dues of credit card
Many people find using credit cards very convenient but can bring inconvenience if you are not satisfied with the services of your credit card company. In such cases many people want to close that credit card but if there are some dues to be paid off then you can’t close the card. Here you can use balance transfer option.
The balance transfer facility is offered by credit card issuing companies in which they allow transfer of any outstanding balance on a credit card to a less-used or a new credit card of another company. Generally, banks encourage such a practice and offer either a low-interest or interest free period as incentives to customers who use balance transfer facility.
However the credit limit of the less used card or the new card from which the facility is being used is reduced proportionately to the balance transfer amount. For instance, if your credit limit on the new card is Rs 1,00,000, if you have opted for a balance transfer of around Rs 40,000, your credit limit will be reduced to Rs 60,000. Moreover the balance transfer limit cannot exceed 80 per cent of the credit limit.
When to use this option?
In India interest on credit cards are quite high therefore, if you find a card which has low interest rate in comparison to your current card you can use this option. The interest cost will reduce by transferring the outstanding balance on to a new credit card.
If you are not satisfied with the services provided by the current card company like improper billing, non-receipt of bill, etc, you can get rid of the company using the balance transfer facility.
In case the outstanding balance on your current credit card is quite huge and you are unable to finance it, the balance transfer can offer temporary relief. In case of short-term liquidity crunch or there is an exorbitant debt to pay off the credit cardholders can use this option.
To attract customers, banks offer low interest rate or sometime zero interest on balance transfer for specified period. But these so-called attractive rates are offered for a limited period. Introductory period is usually between 3 and 6 months. After this, bank charges the normal rate of interest, which currently is between the range of 38% and 425. On this processing fee is also charged which can range between 2% and 5% of the total amount.
How to do balance transfer?
Contact the credit card company to whom you would want your outstanding debt to be transferred to.
Get the form and fill in the details of your old credit card along with a copy of your latest credit card bill and submit it with the company.
Within 7 to 10 working days, the new credit card will send you a demand draft (DD) in the name of your old credit card issuer. Give this DD to your old credit card company, who will in turn clear your outstanding payment and the same will be transferred to the new credit card issuing company.
The balance transfer facility is offered by credit card issuing companies in which they allow transfer of any outstanding balance on a credit card to a less-used or a new credit card of another company. Generally, banks encourage such a practice and offer either a low-interest or interest free period as incentives to customers who use balance transfer facility.
However the credit limit of the less used card or the new card from which the facility is being used is reduced proportionately to the balance transfer amount. For instance, if your credit limit on the new card is Rs 1,00,000, if you have opted for a balance transfer of around Rs 40,000, your credit limit will be reduced to Rs 60,000. Moreover the balance transfer limit cannot exceed 80 per cent of the credit limit.
When to use this option?
In India interest on credit cards are quite high therefore, if you find a card which has low interest rate in comparison to your current card you can use this option. The interest cost will reduce by transferring the outstanding balance on to a new credit card.
If you are not satisfied with the services provided by the current card company like improper billing, non-receipt of bill, etc, you can get rid of the company using the balance transfer facility.
In case the outstanding balance on your current credit card is quite huge and you are unable to finance it, the balance transfer can offer temporary relief. In case of short-term liquidity crunch or there is an exorbitant debt to pay off the credit cardholders can use this option.
To attract customers, banks offer low interest rate or sometime zero interest on balance transfer for specified period. But these so-called attractive rates are offered for a limited period. Introductory period is usually between 3 and 6 months. After this, bank charges the normal rate of interest, which currently is between the range of 38% and 425. On this processing fee is also charged which can range between 2% and 5% of the total amount.
How to do balance transfer?
Contact the credit card company to whom you would want your outstanding debt to be transferred to.
Get the form and fill in the details of your old credit card along with a copy of your latest credit card bill and submit it with the company.
Within 7 to 10 working days, the new credit card will send you a demand draft (DD) in the name of your old credit card issuer. Give this DD to your old credit card company, who will in turn clear your outstanding payment and the same will be transferred to the new credit card issuing company.
Monday, July 19, 2010
Individuals can directly access their credit information report
The Credit Information Bureau (India) Ltd (CIBIL) is an independent organization which has the database of credit information of individuals and commercial establishments. All the banks and financial institutions, housing finance companies, credit card issuing companies and other lending institutions who are members of cibil provide information of loan borrowers and credit card holders to it, to which it collates, and circulates, on request.
Cibil has become an important tool for banks and housing finance companies as they are able to get credit history of applicants.
Up till now only lenders had access to the information provided by Cibil but individuals could not verify their credit ratings.
Now individuals can access their credit information reports from Cibil. The home loan seekers can access their credit information details prepared by Cibil.
There have been instances where lenders have not notified dues to borrowers, (especially credit card payments and personal loans) and such loan accounts becoming irregular, which therefore regarded customers as defaulters.
But now individuals can access their credit information as analyzed by Cibil and also can get the mistake rectified, if any.
Earlier when borrower applied for home loan he used to get credit information from the bank and his loan application was rejected if his credit report is negative or poor scoring by Cibil.
The lenders directly never provided the CIR to borrowers. If the borrower found that his credit information is incorrect and requested the lender to provide the credit details, then lender would provide him a nine-digit unique borrower control number.
On obtaining the nine-digit unique control number the borrower used to contact Cibil to get the exact details related to the negative or poor scoring details. It has been noticed, most of the times the report of the borrower sent by the member organization to the Cibil was wrong due to which the Cibil report was incorrect.
And to get the mistakes rectified, the borrower had to go through a long process.
Now borrower will have direct access to his CIR. A CIR is a record of the credit payment history complied from information received from credit institutions.
This will enable the processing of credit applications faster in order to help provide quicker access to credit at better terms.
The individuals to get the report, one need to fill up a requisition form available on Cibil’s website. Along with the form, it has to provide self-attested copies of some documents such as identity proof and address proof to Cibil.
The CIR can be obtained by paying Rs 142. It must be paid through a demand draft favoring 'Credit Information Bureau (India) Ltd.', payable at Mumbai and sent to CIBIL. The documents can be sent either through email, post or fax. On receiving the documents and fees, CIBIL will process the request and send a copy of the CIR.
Name and address of borrower Identification and PAN numbers Passport details Date of birth Records of all the credit facilities availed by the borrower past payment history Amounts overdue Number of inquiries made on that borrower by different members Suits filed and their status.
In CIR report does not have Income and revenue details Amounts deposited with banks Details of assets Details of investment. It is expected with the introduction of new base rate system the home loan borrowers will get benefited. The interest rates will be based on the base rate plus a premium depending on the credit rating of the borrower.
The individual having a good credit can get a loan at a lower interest rate as compared to a loan based on a bad credit rating.
Cibil has become an important tool for banks and housing finance companies as they are able to get credit history of applicants.
Up till now only lenders had access to the information provided by Cibil but individuals could not verify their credit ratings.
Now individuals can access their credit information reports from Cibil. The home loan seekers can access their credit information details prepared by Cibil.
There have been instances where lenders have not notified dues to borrowers, (especially credit card payments and personal loans) and such loan accounts becoming irregular, which therefore regarded customers as defaulters.
But now individuals can access their credit information as analyzed by Cibil and also can get the mistake rectified, if any.
Earlier when borrower applied for home loan he used to get credit information from the bank and his loan application was rejected if his credit report is negative or poor scoring by Cibil.
The lenders directly never provided the CIR to borrowers. If the borrower found that his credit information is incorrect and requested the lender to provide the credit details, then lender would provide him a nine-digit unique borrower control number.
On obtaining the nine-digit unique control number the borrower used to contact Cibil to get the exact details related to the negative or poor scoring details. It has been noticed, most of the times the report of the borrower sent by the member organization to the Cibil was wrong due to which the Cibil report was incorrect.
And to get the mistakes rectified, the borrower had to go through a long process.
Now borrower will have direct access to his CIR. A CIR is a record of the credit payment history complied from information received from credit institutions.
This will enable the processing of credit applications faster in order to help provide quicker access to credit at better terms.
The individuals to get the report, one need to fill up a requisition form available on Cibil’s website. Along with the form, it has to provide self-attested copies of some documents such as identity proof and address proof to Cibil.
The CIR can be obtained by paying Rs 142. It must be paid through a demand draft favoring 'Credit Information Bureau (India) Ltd.', payable at Mumbai and sent to CIBIL. The documents can be sent either through email, post or fax. On receiving the documents and fees, CIBIL will process the request and send a copy of the CIR.
Name and address of borrower Identification and PAN numbers Passport details Date of birth Records of all the credit facilities availed by the borrower past payment history Amounts overdue Number of inquiries made on that borrower by different members Suits filed and their status.
In CIR report does not have Income and revenue details Amounts deposited with banks Details of assets Details of investment. It is expected with the introduction of new base rate system the home loan borrowers will get benefited. The interest rates will be based on the base rate plus a premium depending on the credit rating of the borrower.
The individual having a good credit can get a loan at a lower interest rate as compared to a loan based on a bad credit rating.
Friday, July 16, 2010
Read your credit card statement carefully to manage your cash flow
All credit card issuing banks send credit card statements every month to the cardholders but most of them do not take care to check the details of the bill and just pay the amount due. At times this habit can prove to be costly especially, when there is increase in cloning of cards and phishing. By chance there can frauds or incorrect payment information in the statement. Some of the cardholders avoid reading the statement because they cannot understand terminologies used are confusing. Here is the brief explanation of some of the terminologies to make easy for you to understand.
Credit card number: A unique 16 digit number is assigned to you by the bank and is superimposed on your credit card. When you pay your credit card bills through cheque or if you have to do any correspondence with the bank, then it is needed. You must write this number somewhere so that you can keep it handy with you, in case of any theft or fraud you can report to the credit card issuer. This number should always be stated on your credit cards statement.
Credit limit: The maximum amount credit card issuer allows you to borrow. When you apply for credit card, the issuer checks your income profile and your payment track record if you have taken any card before, then is decides the limit accordingly. If your previous payment track record is good, your credit limit can be enhanced and vice versa. If you exceed the credit limit, the credit card issuer will charge an overdrawn fee. This fee is a fixed percentage of the overdrawn amount subject to a minimum and maximum amount.
Available credit limit: The difference between your credit limit and the amount you have spent i.e. total amount due is the available credit limit. If your credit limit is Rs 1,00,000 and you have spent Rs 20,000 then your available credit limit is Rs 80,000.
Payment due date: This is the date by which you should make payment of your credit card bill. This is not the last day on which you can issue the cheque but by this date the cheque should be realized i.e. your account should be debited and the credit card issuer should realize the amount on or before this date. Paying your credit card bill before this date enables you to keep your credit card history and your credit score good.
Statement date: The credit card issuer generates a billing cycle when issues a new credit card. On the basis of this it fixes the date on which the bill is generated. According to this date card issuer calculates the interest amount if you do not pay the full outstanding amount by the payment due date, even though the due date may fall weeks after the statement date.
Cash advance/ Cash limit: The amount you can withdraw from the ATM is called the cash limit. It is not your credit limit. On cash advance the card issuer will levy one-time transaction fee which could be to the tune of 2.5-3% of the cash withdrawn. In addition interest charges will start increasing immediately. The interest charged on cash withdrawals is more than those charged on your purchases. So, you must avail this facility only when you need funds on an emergency basis.
Total amount due: It is the total amount outstanding on your credit card i.e. the amount you owe to the credit card company. This is an increasing amount comprising of interest or any other charges such as over drawn fee among other things.
Minimum amount due: It is a minimum amount fixed by credit card issuer which you have to pay every month which is generally a certain percentage of the total amount due. Generally it is 5-20% of the total amount due. Non-payment of the minimum amount is treated as default and a late payment fee will be levied.
Some of the card holders pay the minimum amount due, the unpaid amount is carried forward to the next billing cycle and so on, under the revolving credit facility. In such cases you don’t enjoy interest free period on any fresh purchases. You will have to pay the interest from the day on which the purchase has been made. This will continue till the total amount due has been paid for. Moreover, even if you pay the minimum amount due, interest will be charged on the total amount due which will include the minimum amount due. For example, if you have paid 60% of the total amount due before the due date, interest will be charged on 100% of the total amount due rather than on the balance 40%. To avoid paying high interests opt for paying minimum amount due only if you’re running short of money to pay off the total amount due.
Transaction details: All transactions done using your credit card, which includes purchase, payments made are recorded under transactions details. Moreover any charges levied by the credit card company such as interest, annual fee, late payment charges among other things will also be listed in details. Therefore it is necessary to check your card statement in order to spot any discrepancy in the details.
Reward points: On credit card every card issuing company give reward points on using the card. In the statement the record of the points accumulated till date is given. You can redeem these points on a need basis against gifts, vouchers, etc enlisted by the card issuer. Each credit card issuer has the different method of redemption.
Now you must have understood why it is important to go through the card statement, it not only protects you from fraud but it will also help you manage your cash flow better.
Credit card number: A unique 16 digit number is assigned to you by the bank and is superimposed on your credit card. When you pay your credit card bills through cheque or if you have to do any correspondence with the bank, then it is needed. You must write this number somewhere so that you can keep it handy with you, in case of any theft or fraud you can report to the credit card issuer. This number should always be stated on your credit cards statement.
Credit limit: The maximum amount credit card issuer allows you to borrow. When you apply for credit card, the issuer checks your income profile and your payment track record if you have taken any card before, then is decides the limit accordingly. If your previous payment track record is good, your credit limit can be enhanced and vice versa. If you exceed the credit limit, the credit card issuer will charge an overdrawn fee. This fee is a fixed percentage of the overdrawn amount subject to a minimum and maximum amount.
Available credit limit: The difference between your credit limit and the amount you have spent i.e. total amount due is the available credit limit. If your credit limit is Rs 1,00,000 and you have spent Rs 20,000 then your available credit limit is Rs 80,000.
Payment due date: This is the date by which you should make payment of your credit card bill. This is not the last day on which you can issue the cheque but by this date the cheque should be realized i.e. your account should be debited and the credit card issuer should realize the amount on or before this date. Paying your credit card bill before this date enables you to keep your credit card history and your credit score good.
Statement date: The credit card issuer generates a billing cycle when issues a new credit card. On the basis of this it fixes the date on which the bill is generated. According to this date card issuer calculates the interest amount if you do not pay the full outstanding amount by the payment due date, even though the due date may fall weeks after the statement date.
Cash advance/ Cash limit: The amount you can withdraw from the ATM is called the cash limit. It is not your credit limit. On cash advance the card issuer will levy one-time transaction fee which could be to the tune of 2.5-3% of the cash withdrawn. In addition interest charges will start increasing immediately. The interest charged on cash withdrawals is more than those charged on your purchases. So, you must avail this facility only when you need funds on an emergency basis.
Total amount due: It is the total amount outstanding on your credit card i.e. the amount you owe to the credit card company. This is an increasing amount comprising of interest or any other charges such as over drawn fee among other things.
Minimum amount due: It is a minimum amount fixed by credit card issuer which you have to pay every month which is generally a certain percentage of the total amount due. Generally it is 5-20% of the total amount due. Non-payment of the minimum amount is treated as default and a late payment fee will be levied.
Some of the card holders pay the minimum amount due, the unpaid amount is carried forward to the next billing cycle and so on, under the revolving credit facility. In such cases you don’t enjoy interest free period on any fresh purchases. You will have to pay the interest from the day on which the purchase has been made. This will continue till the total amount due has been paid for. Moreover, even if you pay the minimum amount due, interest will be charged on the total amount due which will include the minimum amount due. For example, if you have paid 60% of the total amount due before the due date, interest will be charged on 100% of the total amount due rather than on the balance 40%. To avoid paying high interests opt for paying minimum amount due only if you’re running short of money to pay off the total amount due.
Transaction details: All transactions done using your credit card, which includes purchase, payments made are recorded under transactions details. Moreover any charges levied by the credit card company such as interest, annual fee, late payment charges among other things will also be listed in details. Therefore it is necessary to check your card statement in order to spot any discrepancy in the details.
Reward points: On credit card every card issuing company give reward points on using the card. In the statement the record of the points accumulated till date is given. You can redeem these points on a need basis against gifts, vouchers, etc enlisted by the card issuer. Each credit card issuer has the different method of redemption.
Now you must have understood why it is important to go through the card statement, it not only protects you from fraud but it will also help you manage your cash flow better.
Tuesday, July 6, 2010
Delhi police arrested three people involved in credit card cloning
On Saturday Delhi police arrested three people who were involved in cloning credit cards, debit cards and electronic data capture (EDC) machines.
Police arrested three accused 'Ravinder Sunekha, Anil Kumar and Sanjay Kumar Jha from Kotla Mubarakpur but two of their partners Shoiab and Majid Khan, are still absconding, Deputy Commissioner of Police H.G.S. Dhaliwal said.
Police received complaints from multinational banks like Standard Chartered, ICICI and Kotak Mahindra Bank regarding transactions. The banks claimed that their customers are complaining about the frauds, that transactions shown in their statements have not been done by them.
On investigation police found that Anil used to take out credit cards from the parcels meant for delivery to the customers and handed them over to Shoiab for cloning. Then Shoiab cloned the cards and give them to Ravinder, who along with his associate Majid Khan, a former employee of ICICI Bank, used to go to the merchants (shopkeepers) to verify the customers whose transactions were declined by the bank. Khan would note down the credit card number and date of validity.
Dhaliwal told, “He would then pass on the numbers and the dates of validity to Ravinder who used the data on the cloned EDC machines. Sanjay used to reconfigure the merchant ID and terminal ID provided by the merchants and gave them to Ravinder. Thus, EDC machines installed at merchant's office got cloned in Ravinder's office.”
The EDC machines installed at Ravinder’s office, after reconfiguration did not require a credit card for swapping and only the card number was required to execute the transaction. From the accused police has recovered 11 credit cards, six EDC machines and transaction slips of Rs.20-25 lakh from them.
Kumar was working as a courier boy with Blue Dart Courier Company and Ravinder was an owner of a tour and travels agency and had EDC machines installed in his office at Faridabad.
Sanjay was employed with M/S TVS Enterprises, an authorized service centre for EDC machines.
But such charges defeat the anytime, anywhere banking and banking for all aspect. Bankers don’t subscribe to the aspect.
Police arrested three accused 'Ravinder Sunekha, Anil Kumar and Sanjay Kumar Jha from Kotla Mubarakpur but two of their partners Shoiab and Majid Khan, are still absconding, Deputy Commissioner of Police H.G.S. Dhaliwal said.
Police received complaints from multinational banks like Standard Chartered, ICICI and Kotak Mahindra Bank regarding transactions. The banks claimed that their customers are complaining about the frauds, that transactions shown in their statements have not been done by them.
On investigation police found that Anil used to take out credit cards from the parcels meant for delivery to the customers and handed them over to Shoiab for cloning. Then Shoiab cloned the cards and give them to Ravinder, who along with his associate Majid Khan, a former employee of ICICI Bank, used to go to the merchants (shopkeepers) to verify the customers whose transactions were declined by the bank. Khan would note down the credit card number and date of validity.
Dhaliwal told, “He would then pass on the numbers and the dates of validity to Ravinder who used the data on the cloned EDC machines. Sanjay used to reconfigure the merchant ID and terminal ID provided by the merchants and gave them to Ravinder. Thus, EDC machines installed at merchant's office got cloned in Ravinder's office.”
The EDC machines installed at Ravinder’s office, after reconfiguration did not require a credit card for swapping and only the card number was required to execute the transaction. From the accused police has recovered 11 credit cards, six EDC machines and transaction slips of Rs.20-25 lakh from them.
Kumar was working as a courier boy with Blue Dart Courier Company and Ravinder was an owner of a tour and travels agency and had EDC machines installed in his office at Faridabad.
Sanjay was employed with M/S TVS Enterprises, an authorized service centre for EDC machines.
But such charges defeat the anytime, anywhere banking and banking for all aspect. Bankers don’t subscribe to the aspect.
Friday, July 2, 2010
To have one or two credit card is good, multiple leads to defaults
The young generation prefers to carry multi-colored cards in their wallet. Most of them make payments of groceries, apparels or even bill payments with card rather than cash.
However credit card is most preferred to debit card because of a wider acceptance, in online booking for flights, entertainment or shopping credit card is accepted. But there is a disadvantage too in carrying multiple cards such as there is problem in keeping track of errors, missing payment dates or ignoring a wrongful entry at the bank’s end.
Mostly banks offer good credit limits if you have a bad credit history. In case bank has set a credit limit then it can be due to your credit score or some banks over a period of time do changes in their approach, they enhance credit limit for new customers. So it is better to stick to a Visa and Master Card, as both have wide acceptability.
Always do payments using one credit card. It is better to choose co-branded cards such as a petro card, airline card or a shopping card such as ICICI Bank-Big Bazaar credit card or Citibank-Shoppers Stop credit card. These cards have advantage over normal credit card as it is easy to keep track of expenses as the second card would not generate any bill on a regular basis. In fact debit card best to use as it is to keep track of expenses.
It is always best to have one credit card but, if you want to have a second card then opt for a card which can cater your maximum needs such as petro card is best for frequent car/bike users on using this card they get an additional fuel surcharge. People who have to travel frequently for business purpose can opt for co-branded airline cards.
People who have more than two cards and if have forgotten to pay bill of one card or are short of cash to pay the dues in such cases you can play with cards based on their billing cycles. Suppose the bill on the first card is due on July 30 then keep the second bill due date as August 15. Like this you will get enough time to repay dues.
The billing cycle is set in accordance to the issue of the card. But you get choice to change the billing cycle to suit your convenience.
As people are getting tech savvy they are opting e-payments for credit cards and in this way they are able to avoid penalty on late payments because of delay in cheque clearance or any typos or wrong date which would have made the cheque invalid.
You can also opt for the ECS mode if you have a sound bank balance. The credit card can also be linked with your net banking profile, this is a convenient way of paying bills and you will also get unbilled transaction information almost real time. This way you will have an idea of the next bill amount.
However credit card is most preferred to debit card because of a wider acceptance, in online booking for flights, entertainment or shopping credit card is accepted. But there is a disadvantage too in carrying multiple cards such as there is problem in keeping track of errors, missing payment dates or ignoring a wrongful entry at the bank’s end.
Mostly banks offer good credit limits if you have a bad credit history. In case bank has set a credit limit then it can be due to your credit score or some banks over a period of time do changes in their approach, they enhance credit limit for new customers. So it is better to stick to a Visa and Master Card, as both have wide acceptability.
Always do payments using one credit card. It is better to choose co-branded cards such as a petro card, airline card or a shopping card such as ICICI Bank-Big Bazaar credit card or Citibank-Shoppers Stop credit card. These cards have advantage over normal credit card as it is easy to keep track of expenses as the second card would not generate any bill on a regular basis. In fact debit card best to use as it is to keep track of expenses.
It is always best to have one credit card but, if you want to have a second card then opt for a card which can cater your maximum needs such as petro card is best for frequent car/bike users on using this card they get an additional fuel surcharge. People who have to travel frequently for business purpose can opt for co-branded airline cards.
People who have more than two cards and if have forgotten to pay bill of one card or are short of cash to pay the dues in such cases you can play with cards based on their billing cycles. Suppose the bill on the first card is due on July 30 then keep the second bill due date as August 15. Like this you will get enough time to repay dues.
The billing cycle is set in accordance to the issue of the card. But you get choice to change the billing cycle to suit your convenience.
As people are getting tech savvy they are opting e-payments for credit cards and in this way they are able to avoid penalty on late payments because of delay in cheque clearance or any typos or wrong date which would have made the cheque invalid.
You can also opt for the ECS mode if you have a sound bank balance. The credit card can also be linked with your net banking profile, this is a convenient way of paying bills and you will also get unbilled transaction information almost real time. This way you will have an idea of the next bill amount.
Tuesday, June 29, 2010
ATM dispenses fake note
When you withdraw cash from ATM please check whether notes are original or counterfeit as banks don’t take responsibility of any such thing easily and you will be in lose.
In one of such incidence DNA staffer with drew Rs 5,000 from his bank ATM placed on the bank premises in RT Nagar. He received the cash in different denominations - four 1,000-rupee notes and ten 100-rupee notes. He took the money and deposited in his wife’s account at the Shivajinagar branch of a nationalized bank within 20 minutes.
But the cashier of that bank rejected one Rs1,000 note after checking the wad on a note sorting machine. The note bore No. 6CH 686744 and had the signature of RBI governor YV Reddy.
The cashier said she considered the note as fake as the watermark digits did not glow and the vertical watermark showed two red glows on its security thread instead of all glowing green as on a genuine one. The left margin on the note, too, was a couple of millimetres narrower.
He immediately took the fake note back to the bank owning the ATM, but the manager quickly queried, “How do I know you got this note from our ATM?” When he produced the withdrawal slip the manager called his senior who advised him to note a complaint and take a photocopy of the note. The manager checked the note on the machine, and agreed it was an “odd note” and noted a complaint, and told that management of the ATM was outsourced and the agency can not be contacted.
A series of telephone calls were made from various bank officials, including the top corporate communication official in Mumbai. From the outsourced agency an explanation like “We will inquire into it”; “Millions of notes are fed into the machines and it is not possible to record the serial number of every note”; “This occurrence is very, very rare”; “It may not be a fake note as RBI keeps changing designs and it could be one of the old designs” were given.
Finally, by the end of the day the agency sent a genuine note to the bank manager and took away the fake note.
You can no longer blindly trust your bank ATM as a DNA staffer learnt to his utter shock when a machine presented him with a counterfeit 1,000-rupee note. The ATM belonged to a large reputed private bank that has its presence in 780 Indian towns and cities
In one of such incidence DNA staffer with drew Rs 5,000 from his bank ATM placed on the bank premises in RT Nagar. He received the cash in different denominations - four 1,000-rupee notes and ten 100-rupee notes. He took the money and deposited in his wife’s account at the Shivajinagar branch of a nationalized bank within 20 minutes.
But the cashier of that bank rejected one Rs1,000 note after checking the wad on a note sorting machine. The note bore No. 6CH 686744 and had the signature of RBI governor YV Reddy.
The cashier said she considered the note as fake as the watermark digits did not glow and the vertical watermark showed two red glows on its security thread instead of all glowing green as on a genuine one. The left margin on the note, too, was a couple of millimetres narrower.
He immediately took the fake note back to the bank owning the ATM, but the manager quickly queried, “How do I know you got this note from our ATM?” When he produced the withdrawal slip the manager called his senior who advised him to note a complaint and take a photocopy of the note. The manager checked the note on the machine, and agreed it was an “odd note” and noted a complaint, and told that management of the ATM was outsourced and the agency can not be contacted.
A series of telephone calls were made from various bank officials, including the top corporate communication official in Mumbai. From the outsourced agency an explanation like “We will inquire into it”; “Millions of notes are fed into the machines and it is not possible to record the serial number of every note”; “This occurrence is very, very rare”; “It may not be a fake note as RBI keeps changing designs and it could be one of the old designs” were given.
Finally, by the end of the day the agency sent a genuine note to the bank manager and took away the fake note.
You can no longer blindly trust your bank ATM as a DNA staffer learnt to his utter shock when a machine presented him with a counterfeit 1,000-rupee note. The ATM belonged to a large reputed private bank that has its presence in 780 Indian towns and cities
Friday, June 18, 2010
Banks to offer credit cards to no-frills account holders soon
Soon no-frills accountholders will also be able to own credit cards as the Reserve Bank of India (RBI), will be instructing banks to extend a special credit card facility to all ‘deserving’ no-frills account holders as by the end of this month lenders will be submitting their new financial inclusion plans.
KC Chakrabarty, deputy governor of RBI said, charges will also be levied on non-maintenance of no-frills accounts. He told, “We have asked banks to offer at least four facilities along with the no-frills accounts. The products include a savings product, an overdraft facility and a credit facility.”
Chakrabarty informed that banks will be instructed to offer credit card to every deserving account holder with no-frills account. Speaking on sidelines of a banking summit organized by Skoch Consultancy in Mumbai he told Financial Chronicle, “For those who do not deserve, banks have been asked to educate them and make people deserving to use a credit card.”
During financial crises most of the banks started shrinking their credit card segments because of rising non-performing assets, whereas during 2006-08 many banks had expanded their credit card segment.
Moreover there will be minimum demand for credit cards as the no-frills account holder income is low. Therefore, a credit card to a no-frills account holder is a bold step from the regulator.
M Narendra, executive director of Bank of India, said, “The credit limit on such cards will be low compared with other cards.”
According to banking regulator most probably scheduled commercial banks will be covering 4 lakh out of the 6 lakh unbanked villages over the next five years. He added, “Regional rural banks will reach out to around one lakh villages.”
S Sridhar, CMD of Central Bank of, said, “The financial inclusion program for banks will be viable only after the fourth year”.
KC Chakrabarty, deputy governor of RBI said, charges will also be levied on non-maintenance of no-frills accounts. He told, “We have asked banks to offer at least four facilities along with the no-frills accounts. The products include a savings product, an overdraft facility and a credit facility.”
Chakrabarty informed that banks will be instructed to offer credit card to every deserving account holder with no-frills account. Speaking on sidelines of a banking summit organized by Skoch Consultancy in Mumbai he told Financial Chronicle, “For those who do not deserve, banks have been asked to educate them and make people deserving to use a credit card.”
During financial crises most of the banks started shrinking their credit card segments because of rising non-performing assets, whereas during 2006-08 many banks had expanded their credit card segment.
Moreover there will be minimum demand for credit cards as the no-frills account holder income is low. Therefore, a credit card to a no-frills account holder is a bold step from the regulator.
M Narendra, executive director of Bank of India, said, “The credit limit on such cards will be low compared with other cards.”
According to banking regulator most probably scheduled commercial banks will be covering 4 lakh out of the 6 lakh unbanked villages over the next five years. He added, “Regional rural banks will reach out to around one lakh villages.”
S Sridhar, CMD of Central Bank of, said, “The financial inclusion program for banks will be viable only after the fourth year”.
Banks to offer credit cards to no-frills account holders soon
Soon no-frills accountholders will also be able to own credit cards as the Reserve Bank of India (RBI), will be instructing banks to extend a special credit card facility to all ‘deserving’ no-frills account holders as by the end of this month lenders will be submitting their new financial inclusion plans.
KC Chakrabarty, deputy governor of RBI said, charges will also be levied on non-maintenance of no-frills accounts. He told, “We have asked banks to offer at least four facilities along with the no-frills accounts. The products include a savings product, an overdraft facility and a credit facility.”
Chakrabarty informed that banks will be instructed to offer credit card to every deserving account holder with no-frills account. Speaking on sidelines of a banking summit organized by Skoch Consultancy in Mumbai he told Financial Chronicle, “For those who do not deserve, banks have been asked to educate them and make people deserving to use a credit card.”
During financial crises most of the banks started shrinking their credit card segments because of rising non-performing assets, whereas during 2006-08 many banks had expanded their credit card segment.
Moreover there will be minimum demand for credit cards as the no-frills account holder income is low. Therefore, a credit card to a no-frills account holder is a bold step from the regulator.
M Narendra, executive director of Bank of India, said, “The credit limit on such cards will be low compared with other cards.”
According to banking regulator most probably scheduled commercial banks will be covering 4 lakh out of the 6 lakh unbanked villages over the next five years. He added, “Regional rural banks will reach out to around one lakh villages.”
S Sridhar, CMD of Central Bank of, said, “The financial inclusion program for banks will be viable only after the fourth year”.
KC Chakrabarty, deputy governor of RBI said, charges will also be levied on non-maintenance of no-frills accounts. He told, “We have asked banks to offer at least four facilities along with the no-frills accounts. The products include a savings product, an overdraft facility and a credit facility.”
Chakrabarty informed that banks will be instructed to offer credit card to every deserving account holder with no-frills account. Speaking on sidelines of a banking summit organized by Skoch Consultancy in Mumbai he told Financial Chronicle, “For those who do not deserve, banks have been asked to educate them and make people deserving to use a credit card.”
During financial crises most of the banks started shrinking their credit card segments because of rising non-performing assets, whereas during 2006-08 many banks had expanded their credit card segment.
Moreover there will be minimum demand for credit cards as the no-frills account holder income is low. Therefore, a credit card to a no-frills account holder is a bold step from the regulator.
M Narendra, executive director of Bank of India, said, “The credit limit on such cards will be low compared with other cards.”
According to banking regulator most probably scheduled commercial banks will be covering 4 lakh out of the 6 lakh unbanked villages over the next five years. He added, “Regional rural banks will reach out to around one lakh villages.”
S Sridhar, CMD of Central Bank of, said, “The financial inclusion program for banks will be viable only after the fourth year”.
Wednesday, June 16, 2010
NABARD to set up rural credit bureaus to popularize Kisan Credit Cards
The National Bank for Agriculture and Rural Development (NABARD) and the Reserve Bank of India (RBI) in 1998-99 started Kisan Credit Cards scheme. The scheme was started in order to provide adequate and timely support from the banking system to the farmers for their short-term credit needs during cultivation of crops. The credit limit is based on agriculture income.
A bank official told to popularize Kisan Credit Cards NABARD is planning to open rural credit bureaus in the districts.
NABARD managing director K.G. Karmakar while addressing a seminar on 'Financial Inclusion for the Common Indian', organized by the Bengal Chamber of Commerce and Industry (BCCI) said, “Once implemented, this will go a long way in improving the financial position of India's 480 million marginal farmers.”
Karmakar added in the current fiscal NABARD has set a target of disbursing of Rs.3,75,000 crore credit which is up from Rs.3,25,00 last year.
He also said that there is greater need of involvement of non-governmental organizations to make possible for providing benefits of financial inclusion to the masses.
A bank official told to popularize Kisan Credit Cards NABARD is planning to open rural credit bureaus in the districts.
NABARD managing director K.G. Karmakar while addressing a seminar on 'Financial Inclusion for the Common Indian', organized by the Bengal Chamber of Commerce and Industry (BCCI) said, “Once implemented, this will go a long way in improving the financial position of India's 480 million marginal farmers.”
Karmakar added in the current fiscal NABARD has set a target of disbursing of Rs.3,75,000 crore credit which is up from Rs.3,25,00 last year.
He also said that there is greater need of involvement of non-governmental organizations to make possible for providing benefits of financial inclusion to the masses.
Friday, June 11, 2010
SBI Card awarded most trusted credit card brand for the third consecutive year
Reader’s Digest Asia Trusted Brands Survey has awarded the SBI Card as the most trusted brand in the credit card category for the third consecutive year.
The award was received by Abhay Kumar Singh, CEO, SBI Cards & Payment Services Pvt. LTD. During the award ceremony he said, “We have consistently invested in new technologies and introduced new service offerings to make life simple for our customers. We are delighted that our customers have voted us as the most trusted credit card brand for the third year in a row.”
Over the past decade SBI Card has been focusing on customers-centric initiatives and has been offering related products. In one such move, recently SBI Card had organized 250 service camps which helped it to proactively reach out to 2,10,000 customers in 31 cities in India. SBI Card is the only credit card company in India to offer customers the ease of 13 different modes of payment. Last year, SBI Card received several Indian and Asian awards including the most trusted brand in credit card category in the Reader’s Digest Asia Trusted Brands 2009 Survey, a consumer choice award from CNBC Awaaz and ‘Asia’s Best Mature Captive Services Delivery’ award from the Shared Services Outsourcing Network (SSON).
Reader's Digest Asia Trusted Brands Survey was started in 1999 and from the past eleven years it is being conducted annually. Synovate on behalf of Reader's Digest conducts survey in eight Asian markets. The survey reflects Asian consumer’s choice of most trusted and favorite brands among the thousands available in the market.
The award was received by Abhay Kumar Singh, CEO, SBI Cards & Payment Services Pvt. LTD. During the award ceremony he said, “We have consistently invested in new technologies and introduced new service offerings to make life simple for our customers. We are delighted that our customers have voted us as the most trusted credit card brand for the third year in a row.”
Over the past decade SBI Card has been focusing on customers-centric initiatives and has been offering related products. In one such move, recently SBI Card had organized 250 service camps which helped it to proactively reach out to 2,10,000 customers in 31 cities in India. SBI Card is the only credit card company in India to offer customers the ease of 13 different modes of payment. Last year, SBI Card received several Indian and Asian awards including the most trusted brand in credit card category in the Reader’s Digest Asia Trusted Brands 2009 Survey, a consumer choice award from CNBC Awaaz and ‘Asia’s Best Mature Captive Services Delivery’ award from the Shared Services Outsourcing Network (SSON).
Reader's Digest Asia Trusted Brands Survey was started in 1999 and from the past eleven years it is being conducted annually. Synovate on behalf of Reader's Digest conducts survey in eight Asian markets. The survey reflects Asian consumer’s choice of most trusted and favorite brands among the thousands available in the market.
Friday, June 4, 2010
ICICI card holders can avail discounts on bookings through Yatra.com
ICICI Bank debit and credit card holders can avail special 30 per cent discount on hotel bookings and travel if they do bookings through Yatra.com using their cards.
According to company press release the Platinum and Titanium credit card holders and avail a discount of 30 per cent with a ceiling of Rs 1,250 on hotel and holiday bookings.
While, the Gold and Silver credit and debit card holders can avail discount of 15% with a ceiling of Rs 750.
The release added, the customers who book ticket for international flights can also avail a 10% discount, subject to a maximum ceiling of Rs 750 whereas on domestic air travel ticket customer can avail discount of 15% with Rs 250 ceiling.
The customers who book a train ticket through portal can also avail discount voucher worth Rs 250.
However Yatra.com offers room-booking facility in over 2,500 domestic hotels across 250 destinations in India. The portal also has a tie-up with major international consolidators for over 90,000 hotels across the world.
According to company press release the Platinum and Titanium credit card holders and avail a discount of 30 per cent with a ceiling of Rs 1,250 on hotel and holiday bookings.
While, the Gold and Silver credit and debit card holders can avail discount of 15% with a ceiling of Rs 750.
The release added, the customers who book ticket for international flights can also avail a 10% discount, subject to a maximum ceiling of Rs 750 whereas on domestic air travel ticket customer can avail discount of 15% with Rs 250 ceiling.
The customers who book a train ticket through portal can also avail discount voucher worth Rs 250.
However Yatra.com offers room-booking facility in over 2,500 domestic hotels across 250 destinations in India. The portal also has a tie-up with major international consolidators for over 90,000 hotels across the world.
Friday, May 28, 2010
Money stolen by cloning credit cards
Many people use their credit cards to pay bills in shops, restaurants or at petrol pumps and they are not aware of the fact that their cards are being cloned.
In a recent incidence Tejinder Negi, a resident of Delhi frequently used his credit card to pay his bills in shops, restaurants or even refueling stations but his spending was just a few thousand rupees through the month. When he received his credit card statement at the end of the month he was shocked to see that his spending figures have almost doubled.
He then contacted his bank and realized that his card was being used by someone else, which means he was a victim of credit card cloning as he never shared his plastic money with anybody else.
When Headlines Today investigated the matter it found that credit card cloning is increasing not only in national capital but also in various metros, where plastic money is used on large scale. Across the country, through cloning of credit cards people have been robbed of crores of rupees.
During investigation it was found a credit card cloning machine is used in the fraud. The equipment can easily be purchased online and is delivered at one's doorstep. In just two minutes the credit card is cloned. Even the debit cards can be cloned easily.
The machine, also called a skimmer, besides obtaining easily various attractive offers is also given on some schemes. To check, Headlines Today also placed an order for a cloning kit and within a week it was delivered at the doorstep.
Pawan Duggal, a cyber law expert, said, "The punishment is barely three years (of imprisonment). And even if you get caught, getting bail is quite easy."
According to experts it is impossible to eliminate this fraud, but precautions can be taken to protect plastic money:
* At the time of delivery of credit card if the envelope containing is already opened or is tampered with don’t accept it. There are chances that card might have been cloned before the delivery.
* At the time of making payment of bill with credit card keep check when it is being swiped and don’t allow the person to take card anywhere else to swipe. It reduces the chance of card being put through a cloning machine.
* In the credit card statement check all the transactions carefully to spot illegal usage.
* Dispose bank statements and credit card receipts carefully as criminals search dustbins for these.
How is the card cloned?
As cloning machine is easy to obtain, also it is easy to use. One just has to follow steps. This credit card skimmer needs just two minutes to transfer all the data onto its own personal computer that comes ready with specialized software.
The software is provided by the company that provides the credit card skimmer. When ‘upload’ button is clicked the details of various credit cards that the person has swiped comes onto the computer. The machine can store details of up to 3,000 credit cards in its database.
There is a credit card writer in the kit. A fraudster has to just swipe a blank credit card through this credit card writer and the data stored on it instantly gets transferred to the fraudster's blank credit card. Surprisingly, these counterfeit cards are complete with security holograms markings.
Instances of skimming
In North America and Europe there have been many cases of cloning. But in India it is increasing rapidly as more and more people are using plastic money. Recently skimming gangs have been busted.
In one of the cases, on April 19, 2010, an MBA graduate named Fiyaaz Ahmed was held in Gurgaon for cloning cards. He had stolen data from 35 cards, duplicated three of them and did shopping worth Rs 3 crore.
Mohammed Fadil Koshmin, 22-year old computer science student from Mangalore was nabbed by crime branch official on March 22, 2010, for using fake credit cards. He was allegedly the ring leader of a card-cloning gang. He had a pan-India network and he made transactions worth Rs 10 lakh in six months.
In a recent incidence Tejinder Negi, a resident of Delhi frequently used his credit card to pay his bills in shops, restaurants or even refueling stations but his spending was just a few thousand rupees through the month. When he received his credit card statement at the end of the month he was shocked to see that his spending figures have almost doubled.
He then contacted his bank and realized that his card was being used by someone else, which means he was a victim of credit card cloning as he never shared his plastic money with anybody else.
When Headlines Today investigated the matter it found that credit card cloning is increasing not only in national capital but also in various metros, where plastic money is used on large scale. Across the country, through cloning of credit cards people have been robbed of crores of rupees.
During investigation it was found a credit card cloning machine is used in the fraud. The equipment can easily be purchased online and is delivered at one's doorstep. In just two minutes the credit card is cloned. Even the debit cards can be cloned easily.
The machine, also called a skimmer, besides obtaining easily various attractive offers is also given on some schemes. To check, Headlines Today also placed an order for a cloning kit and within a week it was delivered at the doorstep.
Pawan Duggal, a cyber law expert, said, "The punishment is barely three years (of imprisonment). And even if you get caught, getting bail is quite easy."
According to experts it is impossible to eliminate this fraud, but precautions can be taken to protect plastic money:
* At the time of delivery of credit card if the envelope containing is already opened or is tampered with don’t accept it. There are chances that card might have been cloned before the delivery.
* At the time of making payment of bill with credit card keep check when it is being swiped and don’t allow the person to take card anywhere else to swipe. It reduces the chance of card being put through a cloning machine.
* In the credit card statement check all the transactions carefully to spot illegal usage.
* Dispose bank statements and credit card receipts carefully as criminals search dustbins for these.
How is the card cloned?
As cloning machine is easy to obtain, also it is easy to use. One just has to follow steps. This credit card skimmer needs just two minutes to transfer all the data onto its own personal computer that comes ready with specialized software.
The software is provided by the company that provides the credit card skimmer. When ‘upload’ button is clicked the details of various credit cards that the person has swiped comes onto the computer. The machine can store details of up to 3,000 credit cards in its database.
There is a credit card writer in the kit. A fraudster has to just swipe a blank credit card through this credit card writer and the data stored on it instantly gets transferred to the fraudster's blank credit card. Surprisingly, these counterfeit cards are complete with security holograms markings.
Instances of skimming
In North America and Europe there have been many cases of cloning. But in India it is increasing rapidly as more and more people are using plastic money. Recently skimming gangs have been busted.
In one of the cases, on April 19, 2010, an MBA graduate named Fiyaaz Ahmed was held in Gurgaon for cloning cards. He had stolen data from 35 cards, duplicated three of them and did shopping worth Rs 3 crore.
Mohammed Fadil Koshmin, 22-year old computer science student from Mangalore was nabbed by crime branch official on March 22, 2010, for using fake credit cards. He was allegedly the ring leader of a card-cloning gang. He had a pan-India network and he made transactions worth Rs 10 lakh in six months.
Friday, May 21, 2010
Indian credit card base is close to 2005-06 levels
Banks in order to get rid of their bad loans they have cut down on the issuing of credit cards. As a result in India credit card base has shrunk by 10 million cards to 18.31 million at the end of March 2010 from 28.31 million at the end of March 2008.
At present the number of credit cards is close to 2005-06 levels, when it touched the lowest in the previous five years at 17.32 million.
According to bankers the reduction is due to increased interest rates on card out standings, besides from those that have been cancelled and are inactive. At present, banks have stopped seeking business from the open market.
Saurabh Tripathi, partner and director of Boston Consulting Group said, “The irrational lending in the Indian unsecured market has corrected. The market has now become stable as banks strike a balance between profitability and growth.” “We will continue to see a drop in card numbers as banks become selective in sourcing customers. However, the spends will continue to rise as customers now pay an annual fee to hold a card and banks (are) also coming up with more value-based promotions.”
In the previous years, banks cancelled large number of dormant cards, which is a major reason for the shrinkage of the portfolio, said Sandeep Bhalla, business manager, cards, Citibank India. He added, “However, spends on cards have increased around 2-3% during the same time.” “Another reason for the dip in the number of credit card customers is the high level of delinquencies in the industry. However, the customer base in the industry has stabilized as the industry delinquencies have slowed down.”
An anonymous credit card head working with foreign bank said, “Non-performing loans, or NPAs, for the banking industry in the credit card business peaked in the fourth quarter of 2009. The NPAs have come down from the high of 18-20% to the low teens.” The dues which are not cleared for at least 90 days are designated as NPAs.
ICICI Bank Ltd, the largest credit card issuer in the country, has reduced the number of issuing cards to about five million from 8.5 million and stopped taking on fresh customers.
HDFC Bank Ltd is the second largest credit card issuer with 4.5 million cards. In January 2009, Citibank’s card based stood at 3.8 million, which reduced to 2.5 million by the end of December. At present it is having at least two million card holders.
“We are sourcing around 80,000 new card customers every month. The bank sources 85-90% of its business from bank customers. The rest comes from the open market generated by direct sales agents,” said Parag Rao, head, product, portfolio and service delivery, credit cards, HDFC Bank. “The delinquent cards ratio has gone up in the past one year and banks have closed those accounts. Banks have also been cleaning their credit card book in the past one-and-a-half years by closing down dormant cards.”
State Bank of India (SBI), have a joint venture of credit card with GE Capital Services, the largest issuer of private label credit cards in the world, said the card issuers have become strict and are cautious while issuing cards.
“At SBI Card, we have always believed in stringent credit assessment and underwriting,” said the spokesperson of SBI Cards and Payment Services Pvt. Ltd. “We now have more stringent credit checks with credit information bureaus/agencies including Credit Information Bureau (India) Ltd (Cibil).”
Cibil gather the credit history of individuals and assigns credit scores, which banks use before they sanction a loan or credit card.
“This short-term correction in the credit card base is a step in the right direction over the long term. It is part of the process of maturing for the industry in India,” added the SBI spokesperson. SBI Card has at least 2.5 million customers
However the average monthly spending on cards across the country is between Rs2,200 and Rs2,400, but only around 40% of users return their credit. If card holders clear dues within due date then banks does not earn any interest.
As per RBI records, the amount of out standing on credit cards has increased to Rs6,722.59 crore at the end of March 2010 from Rs4946.34 crore at the end of March 2009.
Card cancellations, specially driven by both defaults on payments and non-usage, are around 8-12% of the total card base. Banks block a card if payment is not made within 30 days and cancel it if no payment is made for 90 days.
“In the past one year, card companies’, including Citibank’s, focus has narrowed to the top 10-12 cities when it comes to sourcing credit cards as the usage is higher in these centres,” Bhalla said.
At present the number of credit cards is close to 2005-06 levels, when it touched the lowest in the previous five years at 17.32 million.
According to bankers the reduction is due to increased interest rates on card out standings, besides from those that have been cancelled and are inactive. At present, banks have stopped seeking business from the open market.
Saurabh Tripathi, partner and director of Boston Consulting Group said, “The irrational lending in the Indian unsecured market has corrected. The market has now become stable as banks strike a balance between profitability and growth.” “We will continue to see a drop in card numbers as banks become selective in sourcing customers. However, the spends will continue to rise as customers now pay an annual fee to hold a card and banks (are) also coming up with more value-based promotions.”
In the previous years, banks cancelled large number of dormant cards, which is a major reason for the shrinkage of the portfolio, said Sandeep Bhalla, business manager, cards, Citibank India. He added, “However, spends on cards have increased around 2-3% during the same time.” “Another reason for the dip in the number of credit card customers is the high level of delinquencies in the industry. However, the customer base in the industry has stabilized as the industry delinquencies have slowed down.”
An anonymous credit card head working with foreign bank said, “Non-performing loans, or NPAs, for the banking industry in the credit card business peaked in the fourth quarter of 2009. The NPAs have come down from the high of 18-20% to the low teens.” The dues which are not cleared for at least 90 days are designated as NPAs.
ICICI Bank Ltd, the largest credit card issuer in the country, has reduced the number of issuing cards to about five million from 8.5 million and stopped taking on fresh customers.
HDFC Bank Ltd is the second largest credit card issuer with 4.5 million cards. In January 2009, Citibank’s card based stood at 3.8 million, which reduced to 2.5 million by the end of December. At present it is having at least two million card holders.
“We are sourcing around 80,000 new card customers every month. The bank sources 85-90% of its business from bank customers. The rest comes from the open market generated by direct sales agents,” said Parag Rao, head, product, portfolio and service delivery, credit cards, HDFC Bank. “The delinquent cards ratio has gone up in the past one year and banks have closed those accounts. Banks have also been cleaning their credit card book in the past one-and-a-half years by closing down dormant cards.”
State Bank of India (SBI), have a joint venture of credit card with GE Capital Services, the largest issuer of private label credit cards in the world, said the card issuers have become strict and are cautious while issuing cards.
“At SBI Card, we have always believed in stringent credit assessment and underwriting,” said the spokesperson of SBI Cards and Payment Services Pvt. Ltd. “We now have more stringent credit checks with credit information bureaus/agencies including Credit Information Bureau (India) Ltd (Cibil).”
Cibil gather the credit history of individuals and assigns credit scores, which banks use before they sanction a loan or credit card.
“This short-term correction in the credit card base is a step in the right direction over the long term. It is part of the process of maturing for the industry in India,” added the SBI spokesperson. SBI Card has at least 2.5 million customers
However the average monthly spending on cards across the country is between Rs2,200 and Rs2,400, but only around 40% of users return their credit. If card holders clear dues within due date then banks does not earn any interest.
As per RBI records, the amount of out standing on credit cards has increased to Rs6,722.59 crore at the end of March 2010 from Rs4946.34 crore at the end of March 2009.
Card cancellations, specially driven by both defaults on payments and non-usage, are around 8-12% of the total card base. Banks block a card if payment is not made within 30 days and cancel it if no payment is made for 90 days.
“In the past one year, card companies’, including Citibank’s, focus has narrowed to the top 10-12 cities when it comes to sourcing credit cards as the usage is higher in these centres,” Bhalla said.
Tuesday, May 18, 2010
Jet Airways in a tie-up with SBI Cards offer unique travel option to its guests
Jet Airways, India’s premier international airline, tied-up with SBI Card, the joint venture between State Bank of India and GE Capital, to offer its guests a unique travel option.
Through this tie-up airline company is trying to make air travel more affordable for guests across India. Under this Jet Airways’ guests can opt to convert their air tickets purchased on www.jetairways.com, using an SBI Credit Card into a zero per cent equated monthly installment (EMI) with tenure of 6 months.
Mr. Sudheer Raghavan, Chief Commercial Officer of Jet Airways, said “Jet Airways is committed to significantly enhance the travel options available for all its guests, with an eye on convenience. The tie up with the SBI Card is another unique travel option aimed at making air travel more economical and cost-effective for family travel. This new scheme bears testimony to our customer-centric approach wherein Jet Airways’ has time and again created products catering to the specific travel needs of our guests.”
He added with this scheme people can fly with family to tourist’s spots and this will encourage domestic tourism.
Mr. Abhay Kumar Singh, CEO, SBI Cards & Payment Services Pvt. Ltd said, “We are delighted to partner with Jet Airways and offer SBI Card holders an affordable travel option. This offering is in line with our focus on the travel segment as it enables air travelers a unique opportunity to fly now and pay later without any additional costs.”
Through this tie-up airline company is trying to make air travel more affordable for guests across India. Under this Jet Airways’ guests can opt to convert their air tickets purchased on www.jetairways.com, using an SBI Credit Card into a zero per cent equated monthly installment (EMI) with tenure of 6 months.
Mr. Sudheer Raghavan, Chief Commercial Officer of Jet Airways, said “Jet Airways is committed to significantly enhance the travel options available for all its guests, with an eye on convenience. The tie up with the SBI Card is another unique travel option aimed at making air travel more economical and cost-effective for family travel. This new scheme bears testimony to our customer-centric approach wherein Jet Airways’ has time and again created products catering to the specific travel needs of our guests.”
He added with this scheme people can fly with family to tourist’s spots and this will encourage domestic tourism.
Mr. Abhay Kumar Singh, CEO, SBI Cards & Payment Services Pvt. Ltd said, “We are delighted to partner with Jet Airways and offer SBI Card holders an affordable travel option. This offering is in line with our focus on the travel segment as it enables air travelers a unique opportunity to fly now and pay later without any additional costs.”
Monday, May 17, 2010
Axis Bank signed the largest ATM outsourcing deal with two private companies
Axis Bank, the country’s third largest private sector lender has signed the largest ATM outsourcing deal. It has signed an agreement with two third-party service providers in order to increase its ATM count. Bank is planning to increase its ATM count to more than 9,000 within the next 18 months.
An official connected to the development told bank has signed the contract with two companies Prizm Payment Services and AGS Infotech to set up and manage 5,000 ATMs on a purely variable model.
By end of March 31,2010, the bank had 4,293 ATMs. Prizm will be setting up 3,500 ATMs while AGS Infotech will set up 1,500 ATMs.
The ATMs will be owned and managed by the two service providers and bank will not incur capital expenditure, it will only look after cash settlement and will pay the service providers a fee per transaction.
Bank will pay Rs 13-15 for each cash withdrawal, for balance enquiry it will pay Rs 3-5 to the two service providers. In case of third-party transactions, in which a non -Axis Bank customer uses the ATMs, charges over and above the fixed fee will be split between the bank and the service provider.
On the other hand State Bank of India, the country’s largest lender has the largest ATM in the country with 18,246 units as on December 31, 2009, followed by ICICI Bank with 5,219 ATMs as on March 31. Then is HDFC Bank with 4,232 ATMs.
After this deal Axis Bank will have the second-largest ATM network in the country told the person quoted earlier.
Since the implementation of the Reserve Bank of India (RBI) norms according to which banks cannot charge customers for cash withdrawals, for banks setting up and managing ATMs has become a costly affair. Whenever a customer uses an ATM of another bank, his bank has to pay the bank whose ATM is used an interchange fee of about Rs 18.
Earlier, in April last year, on the directive of RBI banks had stopped charging even third-party customers for ATM withdrawals. But when banks requested RBI to withdraw this directive as the banks were facing lose, they were permitted to charge customers who had used their quota of five free third-party transactions per month.
Thus most of the banks are trying to avoid the expense and headache of setting up and managing ATMs by following an outsourcing model.
Last year, State Bank of India had signed an agreement with C-Edge for outsourcing ATMs. Even the smaller banks such YES Bank and Dhanlaxmi Bank are adopting this model.
A senior executive of a private sector bank said, “While RBI has given banks some respite from the free-ATM rule, we think it’s just a matter of time before ATMs become free again. This will increase ATM expenses for banks.”
An official connected to the development told bank has signed the contract with two companies Prizm Payment Services and AGS Infotech to set up and manage 5,000 ATMs on a purely variable model.
By end of March 31,2010, the bank had 4,293 ATMs. Prizm will be setting up 3,500 ATMs while AGS Infotech will set up 1,500 ATMs.
The ATMs will be owned and managed by the two service providers and bank will not incur capital expenditure, it will only look after cash settlement and will pay the service providers a fee per transaction.
Bank will pay Rs 13-15 for each cash withdrawal, for balance enquiry it will pay Rs 3-5 to the two service providers. In case of third-party transactions, in which a non -Axis Bank customer uses the ATMs, charges over and above the fixed fee will be split between the bank and the service provider.
On the other hand State Bank of India, the country’s largest lender has the largest ATM in the country with 18,246 units as on December 31, 2009, followed by ICICI Bank with 5,219 ATMs as on March 31. Then is HDFC Bank with 4,232 ATMs.
After this deal Axis Bank will have the second-largest ATM network in the country told the person quoted earlier.
Since the implementation of the Reserve Bank of India (RBI) norms according to which banks cannot charge customers for cash withdrawals, for banks setting up and managing ATMs has become a costly affair. Whenever a customer uses an ATM of another bank, his bank has to pay the bank whose ATM is used an interchange fee of about Rs 18.
Earlier, in April last year, on the directive of RBI banks had stopped charging even third-party customers for ATM withdrawals. But when banks requested RBI to withdraw this directive as the banks were facing lose, they were permitted to charge customers who had used their quota of five free third-party transactions per month.
Thus most of the banks are trying to avoid the expense and headache of setting up and managing ATMs by following an outsourcing model.
Last year, State Bank of India had signed an agreement with C-Edge for outsourcing ATMs. Even the smaller banks such YES Bank and Dhanlaxmi Bank are adopting this model.
A senior executive of a private sector bank said, “While RBI has given banks some respite from the free-ATM rule, we think it’s just a matter of time before ATMs become free again. This will increase ATM expenses for banks.”
Friday, May 14, 2010
BPBEA to go on three-day ATM strike this month
In Bengal the ATMs will remain closed for three days as the Bengal Provincial Bank Employees' Association will be going on strike three-day ATM strike later this month. For three days people will have to stand in long queues to withdraw money.
The Association is demanding for minimum wages notification by the Centre and eight-hours-a-day work for ATM contract employees. It has decided to shutdown on May 17, 28 and 29. The ATMs of 14 PSU banks, including SBI, and five private sector banks are under purview of the strike.
The banks that will be affected include Bank of India, Bank of Baroda, PNB, Allahabad Bank, Central Bank, Union Bank, Bank of Maharashtra, United Bank of India, UCO Bank, Andhra Bank, Vijaya Bank, Bank of Rajasthan, Yes Bank, Federal Bank and Karur Vysya Bank. These banks have over 2,000 ATMs across the state and have over 4,000 contract employees.
Earlier BPBEA had observed a strike in ATMs of five PSU banks on February 12 this year. BPBEA general secretary Rajen Nagar told that in spite of assurances, most of the PSU banks and some private banks have not revised the wages of ATM contract employees. He added, "We know customers will suffer because of the strike but we have no other option".
He further said, "ATM contract employees in other banks get Rs 2,000-3,000, which is lower than the subsistence wage. The working hours are longer than the stipulated hours. This cannot go on indefinitely".
The Association is demanding for minimum wages notification by the Centre and eight-hours-a-day work for ATM contract employees. It has decided to shutdown on May 17, 28 and 29. The ATMs of 14 PSU banks, including SBI, and five private sector banks are under purview of the strike.
The banks that will be affected include Bank of India, Bank of Baroda, PNB, Allahabad Bank, Central Bank, Union Bank, Bank of Maharashtra, United Bank of India, UCO Bank, Andhra Bank, Vijaya Bank, Bank of Rajasthan, Yes Bank, Federal Bank and Karur Vysya Bank. These banks have over 2,000 ATMs across the state and have over 4,000 contract employees.
Earlier BPBEA had observed a strike in ATMs of five PSU banks on February 12 this year. BPBEA general secretary Rajen Nagar told that in spite of assurances, most of the PSU banks and some private banks have not revised the wages of ATM contract employees. He added, "We know customers will suffer because of the strike but we have no other option".
He further said, "ATM contract employees in other banks get Rs 2,000-3,000, which is lower than the subsistence wage. The working hours are longer than the stipulated hours. This cannot go on indefinitely".
Thursday, May 13, 2010
In 2009-10 banks cancelled 6 million credit cards and reduced issuing of cards
In 2009-10 there was sharp cut down on issuing of credit cards and many banks closed a number of cards during this period. According to records last fiscal six million credit cards or about a quarter of the total number of cards a year were cancelled.
According to the data provided by the Reserve Bank of India by March 2010, around 18.3 million of cards were circulated this was the level about five years ago.
In June 2008 credit card industry has touched a peak level of 27 million cards after this in two years time slide in credit card industry started and in next nine months, the industry cancelled about three million cards.
Then in the last fiscal especially in March 2010, there was increase in pace when around two million cards were out of use.
During economic slowdown there was increase in defaults in the credit card industry as well as unsecured personal loans portfolio due to which many banks started restructuring their growth strategy. Apart from this, the strict warnings from RBI and court regarding aggressive recovery practices forced many banks to go slow in this business.
Besides cutting down in new issuances, banks also started cutting down credit limits for existing customers to reduce risk in default. Also the accounting rules forced banks to cull out inactive and risky cards as they were required to set apart more capital against unused credit limits.
These measures have even resulted in drop in card spending, in 2009-10 card spending dropped to 4%. Thus total credit card spend fell to Rs 62,852 crore.
As a result the top players of credit card industry such as ICICI bank, the top card issuer, cut the number of its cards by a third during the last one year.
At present it is having about five million cards against a peak of about nine million cards two years ago.
Banks also tightened their credit card norms thus they issue cards very selectively - only to customers with whom it has a long-standing relationship.
At its peak level bank was issuing over two lakh cards a month.
Now it is less than a thousand a month.
However, now you are not thrust with unsolicited credit cards. In fact it has become difficult to get a credit card.
According to the data provided by the Reserve Bank of India by March 2010, around 18.3 million of cards were circulated this was the level about five years ago.
In June 2008 credit card industry has touched a peak level of 27 million cards after this in two years time slide in credit card industry started and in next nine months, the industry cancelled about three million cards.
Then in the last fiscal especially in March 2010, there was increase in pace when around two million cards were out of use.
During economic slowdown there was increase in defaults in the credit card industry as well as unsecured personal loans portfolio due to which many banks started restructuring their growth strategy. Apart from this, the strict warnings from RBI and court regarding aggressive recovery practices forced many banks to go slow in this business.
Besides cutting down in new issuances, banks also started cutting down credit limits for existing customers to reduce risk in default. Also the accounting rules forced banks to cull out inactive and risky cards as they were required to set apart more capital against unused credit limits.
These measures have even resulted in drop in card spending, in 2009-10 card spending dropped to 4%. Thus total credit card spend fell to Rs 62,852 crore.
As a result the top players of credit card industry such as ICICI bank, the top card issuer, cut the number of its cards by a third during the last one year.
At present it is having about five million cards against a peak of about nine million cards two years ago.
Banks also tightened their credit card norms thus they issue cards very selectively - only to customers with whom it has a long-standing relationship.
At its peak level bank was issuing over two lakh cards a month.
Now it is less than a thousand a month.
However, now you are not thrust with unsolicited credit cards. In fact it has become difficult to get a credit card.
Monday, May 10, 2010
The latest form of fraud – bank’s SMS alert system blocked by phisher
People who are involved in online frauds use advance methods. Recently, a 42-year-old Chennai-based customer's SMS alert informing money withdrawals was blocked by phishers after fraudulently obtaining online banking information of the victim. This is a first of its kind case therefore a thorough probe is being done to find its modus operandi.
The victim received the phishing email in February, the email looked as if it was sent by a nationalized bank where he has an account with online and mobile banking facility. “Taking it for real, the complainant responded to the email asking to update his online and mobile bank account to refrain from debarment,” said Additional Deputy Commissioner of Police (Cyber Crime Cell) M. Sudhakar.
The victim when visited an ATM few days late he found that all the money from his account was withdrawn. He was puzzled that he did not receive any SMS alert on his mobile phone on the withdrawal, thus he contacted the bank and later, lodged a police complaint.
According to preliminary police investigations the phishing mail was sent from Lagos in Nigeria and Rs. 60,000 that was illegally transferred from the victim's account was deposited in two nationalized bank accounts in Lucknow and Jaipur. The accounts were blocked immediately and sums of Rs. 43,000 and Rs.17,000 has been recovered from them.
Dr. Sudhakar told, “After obtaining confidential online banking details of the complainant through the phishing mail, the culprit de-activated the SMS alert in order to keep the victim unaware of the money transfer from his account as long as possible.”
This type of case is the first one to be reported in which an SMS alert was blocked before money transfer, he added.
Although the money lost was minimal, the Cyber Crime Cell has carried out a detailed investigation into how the phisher in Lagos managed to go to the extent of deactivating the mobile alert system.
Also, police is trying to track the account-holders of the bank accounts in Lucknow and Jaipur hit a roadblock after it was found to be opened for non-existing business houses.
He added that illegal online money transfer can be reduced, only when banks verify with the respective customer on every request for an online money transfer from overseas. “The culprit in Lagos cannot be apprehended as there is no international law to extradite him.”
Pointing towards the case, city Police Commissioner T. Rajendran said it is necessary that an international apex body investigate cyber crime. He added, “The number of arrests made in cyber crime cases here is very less now as most culprits operate from overseas.”
The victim received the phishing email in February, the email looked as if it was sent by a nationalized bank where he has an account with online and mobile banking facility. “Taking it for real, the complainant responded to the email asking to update his online and mobile bank account to refrain from debarment,” said Additional Deputy Commissioner of Police (Cyber Crime Cell) M. Sudhakar.
The victim when visited an ATM few days late he found that all the money from his account was withdrawn. He was puzzled that he did not receive any SMS alert on his mobile phone on the withdrawal, thus he contacted the bank and later, lodged a police complaint.
According to preliminary police investigations the phishing mail was sent from Lagos in Nigeria and Rs. 60,000 that was illegally transferred from the victim's account was deposited in two nationalized bank accounts in Lucknow and Jaipur. The accounts were blocked immediately and sums of Rs. 43,000 and Rs.17,000 has been recovered from them.
Dr. Sudhakar told, “After obtaining confidential online banking details of the complainant through the phishing mail, the culprit de-activated the SMS alert in order to keep the victim unaware of the money transfer from his account as long as possible.”
This type of case is the first one to be reported in which an SMS alert was blocked before money transfer, he added.
Although the money lost was minimal, the Cyber Crime Cell has carried out a detailed investigation into how the phisher in Lagos managed to go to the extent of deactivating the mobile alert system.
Also, police is trying to track the account-holders of the bank accounts in Lucknow and Jaipur hit a roadblock after it was found to be opened for non-existing business houses.
He added that illegal online money transfer can be reduced, only when banks verify with the respective customer on every request for an online money transfer from overseas. “The culprit in Lagos cannot be apprehended as there is no international law to extradite him.”
Pointing towards the case, city Police Commissioner T. Rajendran said it is necessary that an international apex body investigate cyber crime. He added, “The number of arrests made in cyber crime cases here is very less now as most culprits operate from overseas.”
Wednesday, May 5, 2010
Credit & Debit Card information extracted by hackers earned a huge premium
In 2009 although there was economic crisis in the country but credit card information, wrongfully extracted by hackers, earned a huge premium in the grey market, it was more than double the price in comparison to a year earlier.
In some cases, data encrypted on the magnetic strip of credit cards was sold at six times more. The sites using username and password such as PayPal where account holders can with draw cash fetched around $600 per account.
Whereas in the past one year the bank credentials like account numbers, net banking transaction access codes and personal account passwords have become little cheaper. Also the e-mail passwords have also become cheaper over the past one year.
According to a leading web security firm Symantec credit card information along with the card verification value (CVV) — was for $30 per card during 2009 against $12 in 2008. CVV is the three-digit number on the opposite side of the card and is a must for making online transactions.
The data encrypted on the magnetic strip of a credit card, referred to as credit card dumps, contains the primary account number and the expiration date as well as card-holder’s name. Each credit card issuer has its own standards for encoding this information. The highest price for such information increased to $140 per card in 2009 against $25 per card in the previous year.
However during 2008, the user name and password of sites, including PayPal, referred to as cash-out services were sold at 50% of the total value of the cash that could be siphoned off from a single account but in 2009 the prices increased to $600 flat.
But the price of bank account information dropped from $1,000 in 2008 to $850 in 2009. During the same period e-mail accounts were sold at $20 on the higher side during 2009 against $30 in the previous year. Officials from Symantec said: “Credit card info and bank accounts still top advertised items in the underground economy. However, credit card dumps saw a marked increase in advertisements.”
Abhinav Karnwal, product marketing manager, APEC Trend Micro, pointed out, “Popularly called underground economy, there are a set of hackers who deploy various malicious methods to extract sensitive data from unsuspecting PC users. Having extracted a sizeable volume, they advertise on various sites to sell them. The potential of financial gain from these data determines the price for any set of information.”
Then there are hackers who just want to make money by selling stolen information. Mr Karnwal said, “The ones that steal the information may not always want to use them and, therefore, remain unidentified. Hence, they are satisfied with selling them in the underground economy. The ones that buy them are capable or intend to take more risks than the ones that steal the information... Interestingly, there are two distinct sets of people.”
He explained, “Prices of credit card information have gone up because credit limits offered were raised over the past one year. Prices of bank account information have declined because it is becoming increasingly difficult to use bank information to siphon off funds”.
He added, “Prices are also dependent on factors like average credit limits on cards in specific countries. For example, credit card information in the US will fetch higher prices than those in India or Bangladesh. In contrast, bank account or debit card information from countries like India will fetch more money than in the US since Indians have a propensity to save and, therefore, likely to have more funds in their bank accounts than an average US citizen”.
In some cases, data encrypted on the magnetic strip of credit cards was sold at six times more. The sites using username and password such as PayPal where account holders can with draw cash fetched around $600 per account.
Whereas in the past one year the bank credentials like account numbers, net banking transaction access codes and personal account passwords have become little cheaper. Also the e-mail passwords have also become cheaper over the past one year.
According to a leading web security firm Symantec credit card information along with the card verification value (CVV) — was for $30 per card during 2009 against $12 in 2008. CVV is the three-digit number on the opposite side of the card and is a must for making online transactions.
The data encrypted on the magnetic strip of a credit card, referred to as credit card dumps, contains the primary account number and the expiration date as well as card-holder’s name. Each credit card issuer has its own standards for encoding this information. The highest price for such information increased to $140 per card in 2009 against $25 per card in the previous year.
However during 2008, the user name and password of sites, including PayPal, referred to as cash-out services were sold at 50% of the total value of the cash that could be siphoned off from a single account but in 2009 the prices increased to $600 flat.
But the price of bank account information dropped from $1,000 in 2008 to $850 in 2009. During the same period e-mail accounts were sold at $20 on the higher side during 2009 against $30 in the previous year. Officials from Symantec said: “Credit card info and bank accounts still top advertised items in the underground economy. However, credit card dumps saw a marked increase in advertisements.”
Abhinav Karnwal, product marketing manager, APEC Trend Micro, pointed out, “Popularly called underground economy, there are a set of hackers who deploy various malicious methods to extract sensitive data from unsuspecting PC users. Having extracted a sizeable volume, they advertise on various sites to sell them. The potential of financial gain from these data determines the price for any set of information.”
Then there are hackers who just want to make money by selling stolen information. Mr Karnwal said, “The ones that steal the information may not always want to use them and, therefore, remain unidentified. Hence, they are satisfied with selling them in the underground economy. The ones that buy them are capable or intend to take more risks than the ones that steal the information... Interestingly, there are two distinct sets of people.”
He explained, “Prices of credit card information have gone up because credit limits offered were raised over the past one year. Prices of bank account information have declined because it is becoming increasingly difficult to use bank information to siphon off funds”.
He added, “Prices are also dependent on factors like average credit limits on cards in specific countries. For example, credit card information in the US will fetch higher prices than those in India or Bangladesh. In contrast, bank account or debit card information from countries like India will fetch more money than in the US since Indians have a propensity to save and, therefore, likely to have more funds in their bank accounts than an average US citizen”.
Yes Bank to roll out credit cards by end of current fiscal
Yes bank is planning to expand its retail segment thus it will be rolling out its credit cards by the end of present financial year. Yes Bank is the youngest private sector bank in India is also planning to increase its home loan and auto loan business by March 2012, said Rana Kapoor, founder, managing director and chief executive officer of the bank.
At present bank is having 150 retail branches in 26 states, by the end of the current financial year bank will be adding 100 more branches to its branch network. In a conference while announcing bank’s annual results said, “We will take our branch count to 250 by end of March 2011.” By March end 2010 bank have 210,000 of retail customers and around 500,000 of borrowing clients (companies).
Besides credit cards, to take its retail banking business on growing path bank is also looking at loans to small and medium enterprises (SME), unsecured loans to small businesses, mortgage loans and auto loans. Kapoor said, the bank is working on increasing its retail branch presence in tier-I and Tier-II cities to 750 branches by 2015.
In order to provide funds for its growth plans it will be raising Rs 1,500 crore as hybrid tier-I and tier-II capital in the present financial year. Kapoor said, . “We have enough headroom to raise around Rs 1,500 crore of hybrid capital, which will be raised domestically.” He added, “In a rising interest rate environment, it is better to raise money.” Earlier in January 2010 bank had raised around Rs 225 crore through qualified institutional placement (QIP) and Rs 2,100 crore capital, where LIC was the single biggest contributor with Rs 600 crore.
In the fourth quarter of the past financial year bank registered 74.8 per cent increase in their net profit from Rs 80.1 crore in Q4 FY09 to Rs 140 crore in Q4 FY10.
Bank witnessed growth by 78.98 per cent in its advances in March 2010 to Rs 22,193.1 crore, against Rs 12,403.1 crore in March 2009. Its deposits reported a growth by 65 per cent from Rs 26,796 crore in March 2010, against Rs 16,169 crore in March 2009. However the cost of funds for the bank stood at 6.9 per cent in FY10, against 9 per cent in FY09.
In Q4FY10 bank net interest margin marginally increased by 3.2 per cent as against 3 per cent in Q4FY09. Kapoor said, “We should be able to keep our net interest margins at the three-plus-level in coming year too.” On the other hand bank net non-performing assets reduced from 0.33 per cent in March 2009 to 0.6 per cent in March 2010.
At present bank is having 150 retail branches in 26 states, by the end of the current financial year bank will be adding 100 more branches to its branch network. In a conference while announcing bank’s annual results said, “We will take our branch count to 250 by end of March 2011.” By March end 2010 bank have 210,000 of retail customers and around 500,000 of borrowing clients (companies).
Besides credit cards, to take its retail banking business on growing path bank is also looking at loans to small and medium enterprises (SME), unsecured loans to small businesses, mortgage loans and auto loans. Kapoor said, the bank is working on increasing its retail branch presence in tier-I and Tier-II cities to 750 branches by 2015.
In order to provide funds for its growth plans it will be raising Rs 1,500 crore as hybrid tier-I and tier-II capital in the present financial year. Kapoor said, . “We have enough headroom to raise around Rs 1,500 crore of hybrid capital, which will be raised domestically.” He added, “In a rising interest rate environment, it is better to raise money.” Earlier in January 2010 bank had raised around Rs 225 crore through qualified institutional placement (QIP) and Rs 2,100 crore capital, where LIC was the single biggest contributor with Rs 600 crore.
In the fourth quarter of the past financial year bank registered 74.8 per cent increase in their net profit from Rs 80.1 crore in Q4 FY09 to Rs 140 crore in Q4 FY10.
Bank witnessed growth by 78.98 per cent in its advances in March 2010 to Rs 22,193.1 crore, against Rs 12,403.1 crore in March 2009. Its deposits reported a growth by 65 per cent from Rs 26,796 crore in March 2010, against Rs 16,169 crore in March 2009. However the cost of funds for the bank stood at 6.9 per cent in FY10, against 9 per cent in FY09.
In Q4FY10 bank net interest margin marginally increased by 3.2 per cent as against 3 per cent in Q4FY09. Kapoor said, “We should be able to keep our net interest margins at the three-plus-level in coming year too.” On the other hand bank net non-performing assets reduced from 0.33 per cent in March 2009 to 0.6 per cent in March 2010.
Tuesday, March 30, 2010
Dhanlaxmi Bank launched Platinum and Gold Credit Cards
Dhanlaxmi Bank, a Thrissur-based lender has entered the retail assets business launched Dhanlaxmi Bank Platinum and Gold Credit cards. A bank statement release stated premium customers will be the target.
Bank has also introduced a ‘Pay by Transaction’ billing mode for credit cards. Normally the monthly billing cycle process is followed but under this interest-free credit period will be considered for individual transactions from the day of purchase. Thus customer will get 45-day interest-free credit period on each purchase and don’t have to time the purchase based on the billing cycle.
During the launch, Amitabh Chaturvedi, MD and CEO, said for the overall growth strategy bank’s main focus will be on retail asset in view of this bank has plans to launch a number of innovative, customer-centric products in the coming financial year.
The released added, for all its credit card customers bank is offering several other benefits like 5 per cent cash back on grocery purchases, priority pass - valid for over 500 lounges and a worldwide concierge services for all its credit card customers.
Bank has also introduced a ‘Pay by Transaction’ billing mode for credit cards. Normally the monthly billing cycle process is followed but under this interest-free credit period will be considered for individual transactions from the day of purchase. Thus customer will get 45-day interest-free credit period on each purchase and don’t have to time the purchase based on the billing cycle.
During the launch, Amitabh Chaturvedi, MD and CEO, said for the overall growth strategy bank’s main focus will be on retail asset in view of this bank has plans to launch a number of innovative, customer-centric products in the coming financial year.
The released added, for all its credit card customers bank is offering several other benefits like 5 per cent cash back on grocery purchases, priority pass - valid for over 500 lounges and a worldwide concierge services for all its credit card customers.
Thursday, March 18, 2010
Various cards have made payment convenient
In current conditions when it is becoming difficult to carry big amount of cash credit card, debit card, gift card, forex card and smart card have become necessity for people.
According to data in Patna alone there are approximately 80,000 users of plastic money. A senior PNB banker said, "In about five years' time, credit card market has grown by 100% and we are looking forward to a more handsome growth in the near future.”
In Bihar, in the last five years there has been a GDP growth of 11% due to which bankers are seeing good business prospects in the state. The PNB official pointed out, "Why talk only about the past five years? There are positive signs all around of growth in investment and infrastructure sectors in the state in days to come." But if you don’t have control over your spending then you might end up spending beyond your means. In the state banks that are into credit card business are targeting the college students as their aspirant customers. Students being young and immature are more likely to be irresponsible.
To attract students banks are offering freebies and exciting offers like discount on spa treatment etc. One of the cardholder Poonam Sharma of S K Puri said, "The best part is you don't have to think much before buying and you can shop without the fear of running short of cash... It's a smarter way of shopping." In her early 30s, Sharma preferred to pay through cards at jewellery shops, boutiques and beauty salons.
Another card holder Ann Qurratulain, a 3rd year student of city's Chanakya National Law University says she can’t think of life without her credit card. Ann, who belongs to Patna, said, "For students who have to stay in a hostel and travel for training, internships and conferences on a regular basis, a credit card is a must" and added she use her credit card to buy her rail and air tickets online and thus saves both time and energy.
People, who go on foreign trips, find credit card convenient for doing money transaction. Raman Jha who runs a travel agency said, "I pay hotel bills and taxi bills and shop using my cards only when I'm in a foreign country. Forex card comes quite handy then. One can even play foreign lottery online."
However credit card technology has led to creation of many jobs with credit card issuing companies and banks as they employ customer care representatives, training positions, business technology positions etc.
As new developments and researches are being done in different technologies soon plastic money is going to become a passé. A private telecom company is going to launch e-money where you don’t even have to carry a wallet. You will be able to make payments using mobile phone. However some of the banks such as SBI, ICICI bank, etc, have launched the mobile banking and now you can even make payments of groceries through mobile phone.
According to data in Patna alone there are approximately 80,000 users of plastic money. A senior PNB banker said, "In about five years' time, credit card market has grown by 100% and we are looking forward to a more handsome growth in the near future.”
In Bihar, in the last five years there has been a GDP growth of 11% due to which bankers are seeing good business prospects in the state. The PNB official pointed out, "Why talk only about the past five years? There are positive signs all around of growth in investment and infrastructure sectors in the state in days to come." But if you don’t have control over your spending then you might end up spending beyond your means. In the state banks that are into credit card business are targeting the college students as their aspirant customers. Students being young and immature are more likely to be irresponsible.
To attract students banks are offering freebies and exciting offers like discount on spa treatment etc. One of the cardholder Poonam Sharma of S K Puri said, "The best part is you don't have to think much before buying and you can shop without the fear of running short of cash... It's a smarter way of shopping." In her early 30s, Sharma preferred to pay through cards at jewellery shops, boutiques and beauty salons.
Another card holder Ann Qurratulain, a 3rd year student of city's Chanakya National Law University says she can’t think of life without her credit card. Ann, who belongs to Patna, said, "For students who have to stay in a hostel and travel for training, internships and conferences on a regular basis, a credit card is a must" and added she use her credit card to buy her rail and air tickets online and thus saves both time and energy.
People, who go on foreign trips, find credit card convenient for doing money transaction. Raman Jha who runs a travel agency said, "I pay hotel bills and taxi bills and shop using my cards only when I'm in a foreign country. Forex card comes quite handy then. One can even play foreign lottery online."
However credit card technology has led to creation of many jobs with credit card issuing companies and banks as they employ customer care representatives, training positions, business technology positions etc.
As new developments and researches are being done in different technologies soon plastic money is going to become a passé. A private telecom company is going to launch e-money where you don’t even have to carry a wallet. You will be able to make payments using mobile phone. However some of the banks such as SBI, ICICI bank, etc, have launched the mobile banking and now you can even make payments of groceries through mobile phone.
Ahmedabad crime branch arrested two for credit card fraud
Ahmedabad crime branch arrested two persons on the charges of credit card fraud. The two accused Mayur Panchal and Shaktisinh Parmar used to dupe customers by promising new credit cards, generally golden credit cards. They used to tell customers that the golden credit card have high purchase limit so they should exchange their old credit cards with this new one. But the golden credit cards given to the customers were duplicates and the two using the old credit cards purchased electronic gadgets.
The crime branch arrested the duo on the complaint of Harshad Patel who lodged a complaint after receiving a bank statement which showed that he had made purchases worth Rs 93,000.
According to crime branch sources Parmar, used to work with Pathak Associates in CG road and would call the credit card holders and tell them about a new scheme in which their old card will replaced with new cards.
He would tell the card holder that a person from the company will visit them and replace their cards once a form is filled. At the time of visit Parmar used to replace customer’s card with duplicate golden credit cards in exchange for old ones. Crime branch PI, BC Solanki said, "Based on the complaint the two were arrested." Solanki further said, after assessing the bank statements the crime branch officials traced the duo through their mobile IMEI numbers.
The crime branch arrested the duo on the complaint of Harshad Patel who lodged a complaint after receiving a bank statement which showed that he had made purchases worth Rs 93,000.
According to crime branch sources Parmar, used to work with Pathak Associates in CG road and would call the credit card holders and tell them about a new scheme in which their old card will replaced with new cards.
He would tell the card holder that a person from the company will visit them and replace their cards once a form is filled. At the time of visit Parmar used to replace customer’s card with duplicate golden credit cards in exchange for old ones. Crime branch PI, BC Solanki said, "Based on the complaint the two were arrested." Solanki further said, after assessing the bank statements the crime branch officials traced the duo through their mobile IMEI numbers.
Friday, February 26, 2010
RBI new norms on card bills to bring relief for credit card holders
There are around thousands of credit card holders who have cleared their credit card dues but still their names are blacklisted in the bank’s central database due to which there names also exist on cibil defaulter list. The Reserve Bank of India (RBI) is formulating guidelines instructing the banks not to declare someone a defaulter if the person has settled his or her account with the bank after paying the negotiated amount.
Some of the card holders have got into negotiation with their banks and have paid some lump some amount but then also they are being treated as defaulter in the bank's records. Due to this their name displays in the defaulters list prepared by Credit Information Bureau of India Ltd (CIBIL), which depends on the information provided by banks for the purpose.
Thus most loans become off-limits for the 'blacklisted' person - be it a personal or house loan — from any bank or finance company. Due to this the customer has to settle the new bill raised by the bank, which is the 'balance amount' from the earlier settlement plus penalties and interest. A harassed customer Arvind Gupta (name changed), who is CEO of an IT company told, "The present practice is nothing short of blackmail of customers by banks".
He told recently he paid Rs 75,000 to clear his dues, which had previously been settled for 50% of the then outstanding amount — Rs 6,200 in 2001. It was compulsion for him to pay the amount because his home loan application was rejected by a bank as his name was in CIBIL's defaulter list.
An RBI spokesperson pointed out that central bank is aware of the matter and soon will provide an appropriate solution. CIBIL MD Arun Thukral said to solve this issue RBI held a series of meeting with banks and CIBIL. He told at present when a card holder gets into settlement with the bank, generally bank treats the rest of the amount as "written off".
In many cases, it has been observed that banks raise demand for a small left over amount, according to the customer which should not have been there at all. In many cases banks say they won’t charge the annual fees. For instance, In Arun Sharma (name changed), case who works for a big corporation, bank had raised bill of Rs 900 against his name and was told to settle dues by paying Rs 450 of the disputed bill.
But then also he continued to receive statements which first showed Rs 450 as outstanding and then the amount kept increasing. After sometime he received a call from the bank asking him to clear his dues of around Rs 1,000.
This time bank again offered to settle the dues for the 50% of the amount and said it will issue him an "all dues cleared" certificate if he made the payment. Sharma told he had paid Rs 500 but still he has not received certificate from the bank.
Some of the card holders have got into negotiation with their banks and have paid some lump some amount but then also they are being treated as defaulter in the bank's records. Due to this their name displays in the defaulters list prepared by Credit Information Bureau of India Ltd (CIBIL), which depends on the information provided by banks for the purpose.
Thus most loans become off-limits for the 'blacklisted' person - be it a personal or house loan — from any bank or finance company. Due to this the customer has to settle the new bill raised by the bank, which is the 'balance amount' from the earlier settlement plus penalties and interest. A harassed customer Arvind Gupta (name changed), who is CEO of an IT company told, "The present practice is nothing short of blackmail of customers by banks".
He told recently he paid Rs 75,000 to clear his dues, which had previously been settled for 50% of the then outstanding amount — Rs 6,200 in 2001. It was compulsion for him to pay the amount because his home loan application was rejected by a bank as his name was in CIBIL's defaulter list.
An RBI spokesperson pointed out that central bank is aware of the matter and soon will provide an appropriate solution. CIBIL MD Arun Thukral said to solve this issue RBI held a series of meeting with banks and CIBIL. He told at present when a card holder gets into settlement with the bank, generally bank treats the rest of the amount as "written off".
In many cases, it has been observed that banks raise demand for a small left over amount, according to the customer which should not have been there at all. In many cases banks say they won’t charge the annual fees. For instance, In Arun Sharma (name changed), case who works for a big corporation, bank had raised bill of Rs 900 against his name and was told to settle dues by paying Rs 450 of the disputed bill.
But then also he continued to receive statements which first showed Rs 450 as outstanding and then the amount kept increasing. After sometime he received a call from the bank asking him to clear his dues of around Rs 1,000.
This time bank again offered to settle the dues for the 50% of the amount and said it will issue him an "all dues cleared" certificate if he made the payment. Sharma told he had paid Rs 500 but still he has not received certificate from the bank.
Banks encouraging use of debit card, tie-up with 3rd party to offer incentives
People those who do not have credit card prefer to make payments in cash. However some people are getting into habit of using debit card for making payments. Banks also want people should use debit card for this they are devising innovative ways by offering extra benefits on use of debit cards. Use of debit card will also help banks in reducing the cost of money transaction.
Taking lead on this matter State Bank of India (SBI) country’s largest lender has taken innovative measures to encourage customers to use debit card. Soon few of the foreign sector banks including Deustsche Bank, Citibank and Standard Chartered Bank are going to follow the suite.
Amongst the state-owned banks Punjab National Bank (PNB), Central Bank of India and Union Bank of India will be joining the bandwagon. To offer benefits on the use of debit card SBI in October 2009 inked an agreement with a loyalty and reward management company, Loyalty Rewardz. The agreement has been signed for three years. At present the SBI's debit card users in Mumbai will be covered in the tie-up. In Mumbai there are around 6.7 crore SBI debit card users. Bank sources said this facility will be extended for its entire customer base.
Amitabh Kumar, general manager (alternative channel) SBI explained, "We want to encourage our customers to use debit cards beyond withdrawing money from ATMs." Kumar claimed more SBI customers have started using debit card after the tie-up with the third party for the promotion of incentive schemes.
On every Rs 100 spent the SBI debit card holder gets 2.5 reward point as a standard reward at any of the point of sale (POS). And, if the customer gets the card swiped at the POS located in the premises of any of the program partners, then the reward to be awarded gets increased and it varies from company to company.
If a customer earns 1000 points on using the debit card, then he can get free tickets for watching movie, free apparel and so on. Bijaei Jayraj, chief executive officer, Loyalty Rewardz Mgmt told, "In fact we have got 20 lakh merchandising items on our platter to serve for the Freedom Rewardz customers."
At present there are 30-35 program partners of the Loyalty Rewardz including some of the big retail service providers such as John Player, Fame Cinema, Provogue in its fold.
In case the customer visits the bank branch to withdraw money through cheque approximately, the cost per transaction amounts to Rs 50 to the bank. Likewise, money withdrawn from an ATM costs to Rs 20.
Although the use of ATM by the customers have become bank neutral for cash withdrawal but it has increased burden on the big banks like SBI as their customers frequently with draw money form other bank’s ATM.
Taking lead on this matter State Bank of India (SBI) country’s largest lender has taken innovative measures to encourage customers to use debit card. Soon few of the foreign sector banks including Deustsche Bank, Citibank and Standard Chartered Bank are going to follow the suite.
Amongst the state-owned banks Punjab National Bank (PNB), Central Bank of India and Union Bank of India will be joining the bandwagon. To offer benefits on the use of debit card SBI in October 2009 inked an agreement with a loyalty and reward management company, Loyalty Rewardz. The agreement has been signed for three years. At present the SBI's debit card users in Mumbai will be covered in the tie-up. In Mumbai there are around 6.7 crore SBI debit card users. Bank sources said this facility will be extended for its entire customer base.
Amitabh Kumar, general manager (alternative channel) SBI explained, "We want to encourage our customers to use debit cards beyond withdrawing money from ATMs." Kumar claimed more SBI customers have started using debit card after the tie-up with the third party for the promotion of incentive schemes.
On every Rs 100 spent the SBI debit card holder gets 2.5 reward point as a standard reward at any of the point of sale (POS). And, if the customer gets the card swiped at the POS located in the premises of any of the program partners, then the reward to be awarded gets increased and it varies from company to company.
If a customer earns 1000 points on using the debit card, then he can get free tickets for watching movie, free apparel and so on. Bijaei Jayraj, chief executive officer, Loyalty Rewardz Mgmt told, "In fact we have got 20 lakh merchandising items on our platter to serve for the Freedom Rewardz customers."
At present there are 30-35 program partners of the Loyalty Rewardz including some of the big retail service providers such as John Player, Fame Cinema, Provogue in its fold.
In case the customer visits the bank branch to withdraw money through cheque approximately, the cost per transaction amounts to Rs 50 to the bank. Likewise, money withdrawn from an ATM costs to Rs 20.
Although the use of ATM by the customers have become bank neutral for cash withdrawal but it has increased burden on the big banks like SBI as their customers frequently with draw money form other bank’s ATM.
Tuesday, February 23, 2010
InduInd Bank to start credit cards, personal loans segments
A senior executive of IndusInd Bank informed the bank is planning to start credit cards and personal loans segments in the next financial year.
SV Parthasarthy, head of consumer finance at the private sector bank told, “We see good potential in these segments and are considering introducing these products in 2010-11.” Earlier till 2005-06 bank was in personal loans lending but it stopped when there was increase in delinquencies.
Last year during the economic slowdown most banks witnessed increase in bad loans in credit card and personal loan segments.
To keep control on delinquencies, now bankers are targeting influential customers who are having good relationship with the bank. IndusInd will be following the same strategy. Parthasarthy said, “We are looking to tap our existing customer base.”
He added, “A lot of mistakes have been made but there will possibly be a time when banks are bullish on this segment again. Banks have improved their customer screening processes and with the advent of CIBIL (credit information bureau), they now have more information on potential customers”.
IndusInd Bank Managing Director and CEO Romesh Sobti told the bank for the current financial year has planned to expand its retail loan book by 20 per cent. This will amount to 40 per cent of the bank’s Rs 19,090-crore loan book.
However in the vehicle loans segment IndusInd Bank has an important place. Bank’s commercial vehicle loan accounts for 19 per cent of its loan book whereas other vehicle loans amount to about 13%.
SV Parthasarthy, head of consumer finance at the private sector bank told, “We see good potential in these segments and are considering introducing these products in 2010-11.” Earlier till 2005-06 bank was in personal loans lending but it stopped when there was increase in delinquencies.
Last year during the economic slowdown most banks witnessed increase in bad loans in credit card and personal loan segments.
To keep control on delinquencies, now bankers are targeting influential customers who are having good relationship with the bank. IndusInd will be following the same strategy. Parthasarthy said, “We are looking to tap our existing customer base.”
He added, “A lot of mistakes have been made but there will possibly be a time when banks are bullish on this segment again. Banks have improved their customer screening processes and with the advent of CIBIL (credit information bureau), they now have more information on potential customers”.
IndusInd Bank Managing Director and CEO Romesh Sobti told the bank for the current financial year has planned to expand its retail loan book by 20 per cent. This will amount to 40 per cent of the bank’s Rs 19,090-crore loan book.
However in the vehicle loans segment IndusInd Bank has an important place. Bank’s commercial vehicle loan accounts for 19 per cent of its loan book whereas other vehicle loans amount to about 13%.
Friday, February 19, 2010
Kotak Mahindra Bank offers cash back facility on Trump Card
Kotak Mahindra Bank offers cash back facility on its Kotak Trump Card. Bank is offering 10% cash back on dining and movie and play spends. According to a statement issued by the bank the cash back offer will be available throughout the year.
The bank sources said the cash back offer can be availed at all restaurants, fast food joints, pubs, bars and movie theatres. On this card for the first three months the customers do not have to pay any interest. Also, on this card bank offers EMI facility. The purchases above Rs 5,000 can be converted into EMIs.
The bank sources said the cash back offer can be availed at all restaurants, fast food joints, pubs, bars and movie theatres. On this card for the first three months the customers do not have to pay any interest. Also, on this card bank offers EMI facility. The purchases above Rs 5,000 can be converted into EMIs.
Tuesday, February 9, 2010
Banks adopting safer option of open prepaid cards
Banks are shrinking their credit card segment to avert risks. In view of this banks are adopting the safer option to make profits, ‘open’ prepaid cards.
Through open prepaid cards banks will be able to offer payment services to people who are not using net banking, while enabling easy access for huge base of secure card users.
This concept has worked well for public sector banks and their foreign peers.
An anonymous senior Bank of India official said, “We are planning to launch open prepaid cards (that allow cash withdrawals). Things are in advanced stages of examination.”
Another official from Andhra Bank said, “We are also exploring the opportunity since we do not have a prepaid card now.”
Even Barclays and HSBC too, said they are also weighing options.
A senior foreign bank official told, “We want to issue a card to vendors, dealers, suppliers, etc who work with a company. But our parent requires us to do KYC (know your customer) verification for each individual who holds a prepaid card. That may not be feasible. So we are assessing.”
Piyush Khaitan, managing director of Venture Infotek, a technical service provider to plastic cards industry, told now most of the public sector banks are preferring to issue prepaid cards.
Khaitan added, “It is the best way to cover people who are not covered by the banking channel.”
According to the Reserve Bank of India (RBI) banks can issue only prepaid cards which can only be used for cash withdrawals.
But two private companies such as Itz Cash Cards (a unit of Zee, the company that owns 50% of Diligent Media Corporation, which publishes the DNA) and Done Cards, authorized by RBI, can issue semi-closed cards, using which various utility payments and other transactions can be done.
Single entity issue closed cards to its customers or vendors for payment to be made to the same entity.
Naveen Surya, managing director of Itz Cash Cards, said, “Banks offer forex, meal cards etc, but so far most have not come up with a general purpose prepaid card. The population covered by credit and debit cards is just 10%, of which credit is hardly 2%.”
The two public sector banks Central Bank and Punjab National Bank have already launched their gift cards, and these cards fall in the prepaid card category.
Central Bank is aiming to become a big player in the prepaid card market, while Punjab National Bank is planning to roll out its international travel card (prepaid variant), in which customer will get facility to load money in rupees and use it in select countries to pay in relevant currencies.
Last month, two international prepaid card industry bodies have made entry in India.
Tony Craddock, chief executive director of Global Prepaid Exchange, based in London, said, “Many US and UK-based companies are willing to enter the prepaid market in India. There is a whole lot of money waiting to enter in this sector.”
The UK-based ‘hiten’ cards is having discussion with programmers and the regulator to launch prepaid cards in India. “We have already done our feasibility test,” Jitendra Mistry, financial consultant of hiten Prepaid MasterCard, said.
As per Indian banking regulator non-banking companies cannot offer open cards while most of the international companies are looking forward to offer the same. Some of the existing players have a huge turnover which shows good opportunity in India.
Surya of Itz Cash said, “We had a turnover of Rs 2,000 crore in the last financial year and this year we are hoping to touch Rs 2,500 crore”.
George Paul, general manger (brand & ARB) retail, who heads the Petro-card and fleet operators pre-paid cards for Bharat Petroleum Corporation, told there are more than 2.6 million cards in the market thus company is seeing a turnover of Rs 10,000 crore. With another 1.7 million cards being used by fleet of truck drivers and transportation companies.
Event the chances of frauds in prepaid card are quite low as compared to credit and debit cards.
Paul said, “In the last 10 years of our history I haven’t heard of a fraudulent transaction”.
“In the last five years, I haven’t come across any instance of fraud. There may be one or two cases of theft, but no fraud,” Itz Card’s Surya said.
As per the information provided by officials, a person who tries to make fraudulent transaction will not get much incentive as the money involved is limited in each card.
Through open prepaid cards banks will be able to offer payment services to people who are not using net banking, while enabling easy access for huge base of secure card users.
This concept has worked well for public sector banks and their foreign peers.
An anonymous senior Bank of India official said, “We are planning to launch open prepaid cards (that allow cash withdrawals). Things are in advanced stages of examination.”
Another official from Andhra Bank said, “We are also exploring the opportunity since we do not have a prepaid card now.”
Even Barclays and HSBC too, said they are also weighing options.
A senior foreign bank official told, “We want to issue a card to vendors, dealers, suppliers, etc who work with a company. But our parent requires us to do KYC (know your customer) verification for each individual who holds a prepaid card. That may not be feasible. So we are assessing.”
Piyush Khaitan, managing director of Venture Infotek, a technical service provider to plastic cards industry, told now most of the public sector banks are preferring to issue prepaid cards.
Khaitan added, “It is the best way to cover people who are not covered by the banking channel.”
According to the Reserve Bank of India (RBI) banks can issue only prepaid cards which can only be used for cash withdrawals.
But two private companies such as Itz Cash Cards (a unit of Zee, the company that owns 50% of Diligent Media Corporation, which publishes the DNA) and Done Cards, authorized by RBI, can issue semi-closed cards, using which various utility payments and other transactions can be done.
Single entity issue closed cards to its customers or vendors for payment to be made to the same entity.
Naveen Surya, managing director of Itz Cash Cards, said, “Banks offer forex, meal cards etc, but so far most have not come up with a general purpose prepaid card. The population covered by credit and debit cards is just 10%, of which credit is hardly 2%.”
The two public sector banks Central Bank and Punjab National Bank have already launched their gift cards, and these cards fall in the prepaid card category.
Central Bank is aiming to become a big player in the prepaid card market, while Punjab National Bank is planning to roll out its international travel card (prepaid variant), in which customer will get facility to load money in rupees and use it in select countries to pay in relevant currencies.
Last month, two international prepaid card industry bodies have made entry in India.
Tony Craddock, chief executive director of Global Prepaid Exchange, based in London, said, “Many US and UK-based companies are willing to enter the prepaid market in India. There is a whole lot of money waiting to enter in this sector.”
The UK-based ‘hiten’ cards is having discussion with programmers and the regulator to launch prepaid cards in India. “We have already done our feasibility test,” Jitendra Mistry, financial consultant of hiten Prepaid MasterCard, said.
As per Indian banking regulator non-banking companies cannot offer open cards while most of the international companies are looking forward to offer the same. Some of the existing players have a huge turnover which shows good opportunity in India.
Surya of Itz Cash said, “We had a turnover of Rs 2,000 crore in the last financial year and this year we are hoping to touch Rs 2,500 crore”.
George Paul, general manger (brand & ARB) retail, who heads the Petro-card and fleet operators pre-paid cards for Bharat Petroleum Corporation, told there are more than 2.6 million cards in the market thus company is seeing a turnover of Rs 10,000 crore. With another 1.7 million cards being used by fleet of truck drivers and transportation companies.
Event the chances of frauds in prepaid card are quite low as compared to credit and debit cards.
Paul said, “In the last 10 years of our history I haven’t heard of a fraudulent transaction”.
“In the last five years, I haven’t come across any instance of fraud. There may be one or two cases of theft, but no fraud,” Itz Card’s Surya said.
As per the information provided by officials, a person who tries to make fraudulent transaction will not get much incentive as the money involved is limited in each card.
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