- [Block-1] Money transfer related
- [Block-2] Banking-Finance operations
- [Block-3] New Product launch
- Mock Questions for Bank exams
- In the previous article, we saw some of the recent developments in banking sector at ‘organizational’ level e.g. RRB Amendment bill, Small banks-payment banks, Kotak-ING Vysya merger, new guidelines for NBFC etc.
- In this article, we’ll checkout some current banking developments at “operation” level.
- Utility: IBPS Bank interviews and MCQs.
- 2013: RBI’s G.Padmanabhan Committee estimated ~6000 billion rupees are transacted through >30,000 million bills every day.
- At present we have multiple channels to pay electricity, telephone, gas, cable and other utility bills – through cash, cheque, netbanking, credit card etc. and many middle-men involved such as paytm, ccavenue, billdesk etc.
- PAdmanabhan Committee recommend a integrated bill payment system for the whole country, to improve efficiency, cut down operation costs and protect customers.
- 2014: RBI sets up Prof. Umesh Bellur Committee (IIT Bombay).
- As per Bellur Committee suggestions, Rajanbhai released guidelines for BBPS in 2014, November.
- BBPS is an integrated bill payment system
- To pay light bill, phone bill, piped-gas bill, DTH, school fees & other utility bills.
- Will also hear consumer complaints in bill payment.
- Nodal body: NPCI (National Payment Corporation of India). NPCI is also responsible for Rupay cards.
- Other guideline points too technical and unnecessary for MCQs.
- Customer will have ease of paying bills and protection from frauds and mischief.
- RBI and Government can keep tabs on all payments made in India- to fine tune their monetary policy and tax policies respectively.
- Prepaid cards allow customers to spend money without comprising their privacy and security (unlike credit cards)
- Examples: SBI gift card, ICICI meal card etc.
|Existing money in individual card||Rajanbhai increased to|
- If a person has KYC compliant bank account, the bank is allowed to issue pre-paid cards to his family members as well.
- But one beneficiary can get 1 card only.
- Bank must report suspicious transactions to FIU (financial intelligence unit)
- Card must be used in India only.
RBI has permitted bankers to impose following ATM transaction charges on customer.
|6 Metro cities||Non metro|
|Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore||remaining areas|
|Only 5 free transactions a month in home bank||unlimited|
|only 3 free transactions in other banks||5 times|
|Afterwards, Rs.20 charged per transaction, even for printing that stupid mini-statement.||same charge|
- Obviously, Metro customers don’t like it. Not one bit. Especially hostel students because their lukkha-type roommates steal money, so they prefer to takeout required money from ATM only, instead of hiding under the pillow or wallet.
- Although Rajanbhai’s original motive is to encourage people to use virtual money (netbanking, creditcard etc) instead of paper currency.
- So in long term, it’ll help decreasing the menace of fake currency as well.
|PNB||We’ll continue giving free ATM service to our customers. No monthly five-transaction limit.|
- You can send money to your facebook friends in real time.
- But you’ve to first register to a separate site called “KayPay”.
- Limits: Rs.2500 per transaction and monthly maximum Rs.25,000
- ICICI too allows such thing but among its own account holders only.
- It provides an online platform for ‘repetitive’ payments- as an alternative to post-dated cheques and ECS (electronic clearing service).
- Applications: Lightbill, Phonebill, Utility bills, Loan installements, school fees etc.nstalment payments, school fee payments, premium payment and the line,
- Corporation bank will run this E-Mandate using National Payments Corporation of India’s (NPCI) National Automated Clearing House (NACH) services.
- ICICI Bank launched ‘Cardless Cash Withdrawal’ at ATMs.
- ICICI account holder can transfer money to a mobile phone user in the country.
- No need even to have an account with any bank to receive money.
- Beneficiary will get a six-digit code in his mobile.
- Can use that code to withdraw money from ICICI’s bank ATMS (Even if he has no account)
- Code valid for 2 years.
Rajanbhai’s new order on lukkha-type customers who don’t submit KYC documents despite repeated reminders
|3 months||Bank should send first reminder to client to submit documents for KYC (Know your customer norms).|
|Another 3 months||Send another reminder. IF customer still doesn’t give documents then partially freeze his account i.e. he can deposit money but cannot take it out.|
|Another 6 months|
From 1st April 2015, Banks will have to implement following RBI-guidelines about minimum balance for customers.
- They’ll have to inform client in advance IF his minimum balance falls below the prescribed limit. e.g. for ICICI Salaried savings account, minimum monthly balance requirement is Rs.10,000 for metro areas. Otherwise penalty of Rs.250/- at present.
- IF client doesn’t maintain minimum balance, then penalty must be only in the proportion of short-fall. So banks will have to shift from the absolute figure like Rs.250 penalty, to a percentage figure like 1% of the shortfall.
- Client must be given 1 month’s grace period to fix the problem, only after that levy penalty.
- Penalty charges should be reasonable. OR simply convert such accounts to “No-frills” account instead of levying penalty. (No frills=basic savings bank deposit accounts meant for Poors.)
- Bank should not take undue advantage of client’s difficulty or inattention. e.g. Terminally ill person, person who lost everything in a natural or man-made disaster and therefore unable to maintain minimum balance.
- Gold loan companies such as Muthoot Finance and Manappuram, are accused of charging very high interest rate from borrowers. (~24-30%)
- RBI said ‘we don’t regulate the interests charged by such NBFCs’. Consequently, PIL filled in Madras highcourt.
Madras high court order (Nov.2014)
- Mostly uneducated people borrow from such Gold loan companies for personal needs.
- They lack the acumen to read fineprints in loan agreement and its future consequences.
- Since Colonial times, Money lenders have exploited poor masses.
- Therefore, It is the responsibility for RBI to ensure Non-Banking financial companies don’t turn into exploitative moneylenders.
- RBI cannot wash off its hands from this responsibility.
- RBI must force NBFCs to adopt Fair practices code (FPC).
- Long term investment. Each unit costs Rs.10
- Then SBI mutual fund managers will invest that money on the shares (equities) of Islamic Shairya compliant companies i.e. companies not involved in alcohol, tobacco, gambling, moneylending etc.
- Outside Islamic nations, only 2 countries offering Shariya compliant investment options: (1) UK (2) India.
- Benefit? Financial inclusion among Muslims. Because Shariya law forbids them from earning ‘interest’ on money, hence many of them averse to investing in share market.
- Within India, 3 mutual fund managers already offering such schemes viz. Goldman Sachs, Taurus and Tata.
- In Indian stock-markets, hardly 600-700 companies have Shariya-compliant shares.
- Some critiques argue a public sector bank must not cater to a particular religion, because it goes against the principles of secularism.
|2014, November||SBI gets permission from SEBI to launch this scheme.|
|2014, December||SBI delays the launch of this scheme, without citing any reasons.|
- SBI and “Fashion at Big Bazaar” (Kishore Biyani’s Future group company)
- Type: Co-branded credit card.
- Benefit: lifetime 10% discount on fashion, accessories and footwear, at all big bazaar stores.
- Additional reward points for buying even non-fashion items from big bazaar malls.
|Synd Mahila Shakthi|
- Finance ministry
- Post Office network
Q. Bharat Bill Payment system is designed on the recommendations of ____ Committee?
- Urjit Patel
- Nachiket Mor
- Bimal Jalan
- Umesh Bellur
Q. Purpose of Bharat Bill Payment System (BBPS) is to ___?
- Facilitate government to issue treasury bills.
- Facilitate RBI to sell treasury bills.
- Facilitate customers to pay utility bills.
Q. What is the maximum limit for Pre-paid cards in India?
- None of above
Q. Find correct statement()s)
- SBI is the first entity in India to launch Shariya compliant equity scheme.
- To launch Shariya compliant mutual fund products, SEBI permission is not required.
- Both A and B
- Neither A nor B
Q. Recently, SBI introduced “Styleup” credit card in association with ___.
- Chroma Retail stores
- Raymond garments
- Myntra Fashion
- Big Bazaar
Q. Consider following pairs of bank vs minor account product. Which of them are correctly matched?
- Kotak Mahindra: Smart star
- Andhra Bank: Gen Next
- SBI: Nayi Manzil
- Only 1 and 2
- Only 2 and 3
- Only 1 and 3
- All of them
Q. In 2014-15, _____ bank introduced Samurai bonds in Japanese market.
- Axis Bank
- State Bank of India
- Exim Bank
Bank Interview Questions
- What do you know about Bharat Bill Payment system? How will it help Indian economy?
- Recently, SBI announced Shariya compliant equity funds. What are its features? How is it different than regular mutual fund products? What is the need to introduce such products in India?
- What are your views about the ATM transaction limit imposed by Reserve bank of India?
- Tell us something about KYC-norms and Fair practices code in India.
- If a customer has not maintained minimum balance in his account, then what will you do?
- If a customer is not submitting the KYC documents, then what will you do?
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