Jet, American Express launch co-branded credit card

Private carrier Jet Airways has launched a co-branded credit card in partnership with American Express that offers the members 6 JPMiles for every Rs 100 spend besides a host of other benefits. JPMiles is Jet Airways' loyalty programme. The Jet Airways American Express Platinum Credit Card offers card members the quickest way to earn free travel with Jet Airways, a press release said here. The card also offers a special 5 per cent discount on base fare for ticket booked on the Jet Airways and JetKonnect websites, it said adding, an earn rate of 6 JPMiles for every Rs 100 spend makes the card the fastest ongoing JPMiles earn rate on all spending with no limit to the number of points earned.

The card rewards members with 20,000 JPMiles and a complimentary one-way base fee waiver domestic ticket on the very first charge on the card, plus 10,000 JPMiles on applying before 25 December, it said.

Jet has co-brand credit card with ICICI Bank and HDFC Bank as well.

RBI denies banks' plea on loans to realtors

The Reserve Bank of India has rejected the request of banks that they be allowed to restructure real estate loans without providing for likely losses if the loans go bad, according to an Economic Times report. A loan is said to be restructured when the original terms of the agreement (interest rates, tenure) are diluted to enable troubled borrowers to repay loans. This also helps banks to recover a good chunk of the funds they have lent.

 

This RBI move is welcome for two reasons, points out CNBC-TV18. One, home prices could soften (or at least the steep rate of climb could be arrested) as banks put pressure on property developers to repay loans. This in turn could force builders to push up sales by dropping prices if need be. Second, and more important, by bringing greedy realtors to heel, the RBI may also be able to rein in a key contributor to inflation: soaring property prices.

The RBI stance is in marked contrast to that of finance minister P Chidambaram, who last week is said to have told banks to help out builders of residential projects facing a cash crunch. This could also set the stage for a fresh conflict between the RBI and the finance ministry, which have been publicly sparring over interest rates.

When property prices crashed in 2008-09, banks should have ideally forced builders to sell property at prevailing rates and repay the loans owed to banks. Instead, with permission from RBI, banks rolled over the loans, by allowing builders to keep paying interest even if they were unable to repay the principal amount. Had the RBI not given this leeway, banks would have had to set aside huge provisions for doubtful loans, which would have then dented their profits. The central bank had little choice but to give this concession, given the backdrop of the raging global financial crisis which was hurting the Indian financial sector as well.

One, there have to be rules in place to ensure that builders have a good chunk of their own funds (equity) tied up in the project. According to a presentation made by Corporation Bank to the finance ministry last week (as reported in The Economic Times), builders are showing advances collected from purchasers as their equity contribution. With the rest of the funds arranged from banks, builders have little to lose in case the project is delayed.But the move set a bad precedent. Knowing that it was as much in the interest of banks not to let the loans go bad, developers held on to high prices, undeterred by slowing sales as they were in no hurry to repay the loans. Even now, many banks resort to 'evergreening' of real estate loans (giving fresh loans to repay the old loans) so that they don't have to make provisions which would hurt their profits and thereby valuations. There are two more things that need to be done to ensure that unrealistic real estate prices don't create distortions in the economy.

Second, the government needs to expedite the setting up of a regulator for the real estate sector. Stringent penalty clauses in the agreements with home buyers will put additional pressure on the builder to complete projects on time.

Banks setting up info sharing mechanism to check NPAs

The Reserve Bank of India (RBI) has directed banks to put in place an effective information sharing mechanism by end-December 2012, to address the issue of rising non-productive assets (NPAs) and restructured advances of banks.

This will help banks to use information on credit, derivatives and unhedged foreign currency exposures of prospective borrowers.

Effective 1 January 2013, any sanction of fresh loans / ad-hoc loans/renewal of loans to new or existing borrowers should be made only after obtaining/sharing necessary information, as per the RBI directive.

RBI will view non-adherence to these instructions seriously and banks would be liable for action, including imposition of penalty wherever considered appropriate, an official release said today.

NPAs of nationalised banks as a whole increased to Rs 33,699.12 crore at the end of September 2012 from Rs 27,637.84 crore at end-September in the previous fiscal. The regulatory and supervisory measures are aimed at reducing growth in NPAs and restructured advances by banks and are being closely monitored by the RBI on an ongoing basis, minister of state for finance Namo Narain Meena informed the Rajya Sabha in a written reply today. 

Total non-performing assets of scheduled commercial banks in the country rose to Rs 62,602.57 crore at the end of September in the 2011-12 financial year from Rs 56,332.30 crore during the similar period of the previous fiscal (2010-11). Among state-run banks, the share of the State Bank group stood at Rs16,300.15 crore at end-September 2012 against Rs15,359.00 crore as of end-September 2011.

 

As a percentage of gross advances, NPAs of all scheduled commercial banks increased to 3.57 per cent of gross advances at end-September 2011-12 from 2.94 per cent in 2010-11. Total NPAs with all public sector banks rose to 4.01 per cent at end-September 2011-12 from 3.17 per cent in the previous year.

NPAs of nationalised banks rose to 3.5 per cent as of end-September 2011-12 from 2.67 per cent during the comparable period of the previous fiscal. The State Bank group had the highest NPA of 5.16 per cent at end-September 2011-12 against 4.36 per cent during the comparable period in 2010-11.

RBI has also asked banks to monitor their NPAs and take steps to bring them down through upgradation/ recovery/prudential write-off. The government has, meanwhile, advised public sector banks (PSBs) to take a number of new initiatives to increase the pace of recovery and manage NPAs, which include appointment of nodal officers for recovery, conducting special drives for recovery of loss assets, putting in place early warning system, replacing system of post-dated cheques with electronic clearance system (ECS), e-auctions, sharing of credit information through CIBIL, assigning of loss assets on incentive basis to asset reconstruction companies and giving weightage to recovery of NPAs in statement of intent on annual goals of PSBs, the minister added.

JCB announces credit card deal in Burma

JCB is to become the third of the major global credit card companies to launch operations in Burma after its international subsidiary, JCB International (JCBI), signed an agreement with Myanmar Payment Union (MPU) to issue JCB cards in the country.
The company said it aims to expand JCB card acceptance early in 2013 and to launch a JCB card issuing program in the near future.
JCB, meaning Japan Credit Bureau, is the leading credit card in Japan and has increased its presence heavily in other parts of Asia in recent years. JCBI says its cards are now issued in 16 countries and territories, with more than 77 million card members worldwide.
Japanese press reported on November 26 that JCB—following in the footsteps of US giants VISA and MasterCard— had signed a Memorandum of Understanding for building a JCB ‘card acceptance network” and for issuing JCB cards in Burma through the member banks of MPU.
MPU was established by the Central Bank of Myanmar in 2011 with 17 local banks to promote the acceptance and issuance of payment cards in the country.
The MPU debit card scheme was officially launched in September among eight private banks out of the 17 members. Those were: Myanmar Citizen Bank, Myawaddy Bank, Myanmar Oriental Bank, Kanbawza Bank, Cooperative Bank, Asian Green Development Bank, and Myanmar Apex Bank.
It was announced that the first ATMs would be installed in the three main cities of Rangoon, Mandalay and Naypyitaw.
The cash amount an MPU card-carrying customer can request is set at a minimum of 1,000 kyat ($1.14) and a maximum of 5 million kyat (about $5,700).
On November 1, Co-operative Bank Ltd launched the first ATM in Burma at its head office in Rangoon. The name of the ATM service is “Easi Banking”.

Beyond Branch Banking

After all, rich-country banking systems accounted for over 90% of worldwide industry assets as recently as 2004, according to Economist Intelligence Unit data. Developing-country lenders now account for about 24% of global banking assets, and this share will increase to over 35% by 2016, according to our forecasts. About half the world’s adult population lacks an account at a formal financial institution—that is, at a bank, a savings and loan association (building society) or a credit union—according to a recent series of household surveys by the World Bank and Gallup. Many developing countries have only low levels of bank usage and thus offer the greatest potential to reach new customers and deepen financial sectors. For example, in China some 64% of adults have or share an account, with lower levels in Brazil (56%), Russia (48%) and India (35%). By contrast, in developed markets most adults have accounts, and any growth in customer numbers depends on population growth and immigration (which are themselves often stagnant). For example, in the United States 88% of adults hold accounts, with even higher rates of bank usage in Japan (96%), the United Kingdom (97%) and Germany (98%). The industry has recently been shrinking in many rich countries as banks trim loan books, sell off assets and realign their capital ratios to meet regulatory requirements.

A successful formula in Peru: Microfinance has grown by leaps and bounds in Peru, a market that combines sound regulation and private-sector participation.

According to Asomif, an industry association, the volume of loans increased by nearly 17% in the year to June 2012 and have more than trebled since end-2007. The growth of the sector in the three decades it has existed has been solid. More than three dozen entities offer microfinance in Peru, and they already account for about 16% of the money lent in the country. Since MFIs focus on small-value loans to individuals and small businesses, their market share of total borrowers is much higher than that.

The industry has even given birth to a not-for-profit, diversified financial group with international ramifications in the form of Grupo ACP, which owns the local heavyweight Mibanco, with outfits in Argentina, Mexico and Uruguay, plus a bank in Ecuador.

Their most important group of clients is composed of small and microbusinesses, which account for most of the country’s economy. Almost 80% of all loans provided by microfinance entities go to this group, while around 12% are granted to individuals. Even mid-sized companies sometimes employ the services of microlenders, with firms of this size representing slightly more than 5% of all loans. Some supporters of the model argue that it is working because, if they want to, operators can try and make a profit out of microcredit. Some surely seem to be aiming at the most promising markets from a business point of view, rather than simply targeting destitute regions. Data from Asomif show that almost one-third of all the money lent by microfinance companies has gone to the Lima region,which is the economic heart of the country.

Indian Banks entice uber rich with super-premium credit cards

It is an area where Indian banks had rarely ventured in the past but the concept ofcredit cards for the uber-rich is fast gaining popularity among local lenders.

Superior credit quality, large ticket transactions, and the opportunity to get high-profile clients have made ultra-premium cards a necessity in private banks’ product portfolio.

These cards were a forte of foreign lenders such as American Express Banking Corporation, Citi, Standard Chartered Bank, and Hongkong and Shanghai Banking Corporation till mid-2010. But Indian banks have now started gaining market share in this business.Axis Bank, HDFC Bank and ICICI Bank were among the first domestic banks to enter this space.

CREDIT CARD PORTFOLIO OF BANKS IN INDIA
Bank	Credit cards (in million)
HDFC	5.9
ICICI	2.8
State Bank of India	2.4
Citibank	2.3
Standard Chartered	1.3

Axis Bank introduced ‘Privee Infinite’, a credit card for its high net worth customers, in November, 2010.

Almost a year later, HDFC Bank, the largest credit card issuer in the country, launched ‘Infinia’, a by-invitation-only credit card, with no spending limits. It positioned Infinia as a direct competition to Amex’s high-end cards and strengthened its portfolio further with follow-up launches — Regalia, Superia and Platinum Edge. “We want to offer our customers all possible banking products. This strategy prompted us to launch Infinia and other premium cards. The HNI (high networth individual) is an important and growing business segment. Their numbers may be small but they generally spend more,” said Parag Rao, senior executive vice-president and head of credit cards at HDFC Bank. According to rough estimates by bankers, wealthy individuals account for 25 per cent of the total cardholders in the country but their share in total spends is estimated at 65-70 per cent.

Recently ICICI Bank has launched Diamant, a super premium card for private banking customers. The bank had also launched a couple of premium cards, Sapphiro and Rubyx, earlier this year. “Our strategy is to deepen the relationship with clients and expand the product offering to meet the financial needs of customers. There are different ways of getting a client into the bank’s family. This (super-premium cards) is certainly one of them. Delinquency is hardly there. The average spend is also three-four times more than mass segment cards,” said Rajiv Sabharwal, executive director and head of retail banking at ICICI Bank.

Even IndusInd Bank that entered the credit card market only in 2011, by acquiring Deutsche Bank’s portfolio, is likely to introduce an ultra-premium credit card soon, a top official of the bank said.

Bankers agree Indian lenders have made a delayed entry into this space. A limited client pool, lower returns and the affluent Indians’ preference for global brands made them hesitant.

“The HNI segment is a relatively small but growing segment in India. Customers in this segment are defined by the banking relationships they share with us. Typically, such clients will not only be a credit card customer but will have two to three different banking relationships with us. All these factors have made this segment very attractive for banks in India,” saidMuge Yuzuak, managing director and head of payment products at Citibank in India. Bankers also felt HNIs are no longer “excessively brand conscious” and choose their cards based on reward programmes and convenience.

http://business-standard.com/india/news/banks-entice-uber-richsuper-premium-credit-cards/494124/

Cybercrime alert on credit card fraud on 500000 Australians

Credit card data of up to 500,000 Australians has been stolen, writes Ken McGregor.

Shockwaves have been sent through the banking sector following the arrest of an international organised crime gang that allegedly committed the biggest theft of credit card data in Australia's history.

While the banks agreed to shoulder the burden of the losses - which totalled about $30 million - consumers have been put on high alert that their details need to be protected from the global cybercrime network.

In the latest fraud, committed by computer hackers from a Romanian syndicate, the alleged criminals gained access to 100 small retail out-lets where the credit card details of up to 500,000 Australians were stored.

One of those picked up in the Romanian raids was the international martial arts and Greco-Roman wrestling champion, Gheorghe "The Carpathian Bear" Ignat.

Ignat allegedly travelled to Australia in recent years and Romanian prosecutors were expected to argue his role in the gang included creating fake credit cards from stolen credit-card details.

Thousands of counterfeit transactions have been carried out in numerous overseas locations including Europe, Hong Kong, Australia and the United States.

The probe grew to involve law enforcement agencies in 13 countries, with the Australian banking and finance sector in strong support.

By all accounts, cybercrime is a booming industry.

Australians lost $4.8 billion through direct cash and lost productivity to online criminals last year, according to a Norton cybercrime report. That's an average of $212 per Aussie citizen.

While some online hackers emptied bank accounts in one hit, the majority were silently fleecing bank accounts of small amounts, leaving the victims none the wiser.

Recently released Visa statistics showed 40,000 small and medium-sized businesses in Australia and New Zealand were considered the highest risk for victims of fraud. Such businesses were large enough to process about 20,000 eCommerce transactions each year but too small to adequately protect their systems - which meant that criminals could spy on customers' credit-card details.

RBS India sale of retail unit to HSBC falls through as deadline ends

Royal Bank of Scotland's (RBS) proposed sale of its retail and commercial banking operations in India to Hongkong and Shanghai Banking Corporation Ltd (HSBC) failed to materialise as the conditions for the sale were not met even after the deadline expired today.

RBS had, in July 2010, agreed to sell its 31 branches, which had revenues of 42 million pounds and a customer base of 400,000, to HSBC by end of November this year (2012).

''The agreement for the acquisition by The Hongkong and Shanghai Banking Corporation Ltd of The Royal Bank of Scotland Group plc's Indian retail and commercial banking businesses has expired as the long stop date of November 30, 2012, has been reached without all conditions required to close the transaction being satisfied,'' HSBC said today.

Neither RBS nor HSBC offered to specify the reasons for the breakdown and explained it away as a failure to complete all the details by 30 November, the deadline for resolving all issues related to data and customer transfers and regulatory approvals.

Obviously, the two parties have failed to meet regulatory norms for branch ownership by foreign banks.
RBS's proposal last month to sell of 316 branches to Spanish bank Santander for $2.7 billion also failed to materialise, after more than two years of talks, as the issue got stuck on IT issues.

RBS said it would now start winding down of its retail and commercial banking business in India, in order to reduce or exit its non-core assets and businesses.
"Consistent with RBS's strategic objective to reduce or exit its non-core assets and businesses, it will begin to wind down its retail and commercial banking business in India, whilst meeting all customer obligations."
In a regulatory filing with the London Stock Exchange, HSBC said it would rather pursue growth in India without meeting the conditions required for the RBS deal.
HSBC was due to pay a premium of up to $95 million over the tangible net asset value (TNAV) of RBS's retail business in India.

RIM bundles free BBM service with BlackBerry Curve

With Diwali celebrations to begin next week, Research-In-Motion's special festive offer will come as good news to many customers.On purchase of the new BlackBerry Curve 9220 or Curve 9320, customers would be entitled to free BBM service for the next one year. To avail this offer, they would need to go for a new Airtel or Vodafone connection. Airtel subscribers would need to text message "BBM" to 543210 for activating the free BlackBerry Messenger service, while Vodafone subscribers would have their BlackBerry services automatically activated in 48 hours after the phone was started with the SIM for the first time.

Starting today, the offer would be available till 9 December.Customers are expected to choose from the two from December 9, 2012 and avail the benefits of free BBM services on Airtel and Vodafone.

This offer is open only for those who purchase BlackBerry Curve 9220 or Curve 9320 between 9 November  and 9 December, 2012. It should be noted though that only new subscribers to Airtel and Vodafone can make the best of this offer.

The company is also offering a plethora of premium applications worth Rs2,000 for BlackBerry smartphone and PlayBook users.

Banks hit the slow lane in FY'12, says RBI

The consolidated balance sheet of scheduled commercial banks (SCBs) in the country recorded slower growth during 2011-12, compared with the previous year, amidst an overall slowdown in the domestic economy, the Reserve Bank of India (RBI) said in a report released on Friday.

Banks reported a slowdown in profit growth, mainly due to steep increase in interest expenditure. Consequent to the slowdown in net profit, return on assets (RoA) and return on equity (RoE) dipped marginally. Also, net interest margin (NIM) declined marginally during 2011-12 compared with the previous year, RBI said in its `Report on Trend and Progress of Banking in India-2011-12'.
The capital to risk-weighted asset ratio (CRAR) remained well above the stipulated minimum for the system as a whole as well as for all bank groups during 2011-12, indicating that Indian banks remained well-capitalised. As at end-March 2012, Tier I capital accounted for more than 70 per cent of the total capital of Indian banks.

During 2011-12, the deteriorating asset quality of the banking sector emerged as a major concern, with gross non-performing assets (NPAs) of banks registering a sharp increase, RBI noted.

However, banks have progressed well under the financial inclusion plan (FIPs), and have almost completed the process of providing banking outlets in all villages with population more than 2,000.

NBFCs
The performance of financial institutions (FIs) in terms of both operating and net profits improved substantially during 2011-12. The performance of non-banking financial companies - deposit taking (NBFCs-D) witnessed improvement as reflected in the increase in their operating and net profits during 2011-12 mainly emanating from fund-based income.

The performance of systemically important non-deposit taking NBFCs (NBFCs-ND-SI) showed marginal deterioration in their net profits during 2011-12. Besides, the increase in impaired assets was a cause of concern, RBI said.

The report said while the financial system in the country remained robust, risks to stability are, however, elevated due to global and domestic macroeconomic factors.

The key issues related to the Indian banking sector include prospective migration to Basel III, which will increase the capital requirements on Indian banks. There is also a need to achieve meaningful financial inclusion through the evolution of sustainable business and delivery models.

Banks should contain slippage in asset quality while at the same time tapping untapped business opportunities for resources to power the growth engine.The challenge for Indian banks is to reduce costs and pass on the benefits to both depositors and lenders, the report added.

India PC Market Share Estimates for Third Quarter of 2012 (Percentage of Shipments)

 

Vendors	3Q12 Market Share (%)	3Q11 Market Share (%)
Lenovo	17.0	12.1
Acer	15.7	10.8
HP	15.5	13.3
Dell	12.4	15.0
HCL	3.4	5.6
Others	36.0	43.2
Total	100.0	100.0

Gartner (November 2012)

ICICI BANK AND VODAFONE INDIA ANNOUNCE A STRATEGIC ALLIANCE TO LAUNCH “m-pesa”

ICICI Bank, India’s largest private sector  bank and Vodafone India, one of India’s  largest  telecom service providers, announced a strategic alliance to launch a  unique  mobile money transfer and payment service called  ‘m-pesa’.
The  announcement was made by  Chanda Kochhar, MD & CEO, ICICI Bank and Marten Pieters, MD & CEO, Vodafone India Ltd. ICICI Bank and  Vodafone  India through its 100% subsidiary,  Mobile Commerce Solutions Ltd. (“MCSL”)  have finalized plans to launch mobile payment services this year, under the brand name ‘m-pesa’.This offering will  comprise: a mobile money account with ICICI Bank and a Mobile Wallet - issued by MCSL.

This innovative offering will give the customer a comprehensive service comprising:

• Cash deposit and withdrawal from designated outlets
• Money transfer to any mobile phone in India
• Range of mobile payment services including purchase of mobile recharge, recharge of DTH services and utility bill payments
• Money transfer to any bank account in India
• Payments at select shops

The partnership between ICICI Bank and Vodafone  effectively leverages the strengths of  Vodafone’s  significant distribution reach and the security of financial transactions provided to customers by ICICI Bank. These services are made convenient using a vast network of  authorized agents  who will enable the customer
to deposit and withdraw cash in and from their account. By facilitating banking transactions at such agent  locations,  this  alliance effectively delivers the last mile access in remote areas. The mobile payment service will be launched  initially in  the eastern  region  of the country viz. Kolkata, West Bengal, Bihar and Jharkhand and then will be rolled out to other parts of the country in a phased manner.

ICICI Bank launches super premium Diamant credit card for private banking customers

Provides access to private islands, yachts, jets, supercars and exclusive golf courses

ICICI Bank Limited, India’s largest private sector bank, announced the launch of ICICI Bank Diamant, a super premium card for private banking customers. This card is yet another addition to the“Gemstone Collection” of credit cards. The other cards, which form a part of this collection, include the ICICI Bank Sapphiro, ICICI Bank Rubyx and ICICI Bank Coral Credit Card.
The ICICI Bank Diamant is available on the MasterCard World platform and offers a wide range of exquisite and opulent privileges to complement the lifestyle of our discerning customers. On offer are elite privileges that include access to private islands, yachts, jets, supercars, membership to the Leading Hotels of the World, Ltd., Priority Pass, and the loyalty programme from Air France and KLM, entrée to exclusive movie premieres and complimentary tee-offs at the some of the finest golf courses across the world. The card also has premium offerings on travel, shopping and entertainment hubs.
The ICICI Bank Diamant credit card has been voted amongst the 3 best card designs in the world by International Card Manufacturer's Association (ICMA) for 2012.
Ms. Chanda Kochhar, Managing Director and CEO, ICICI Bank said, “At ICICI Bank, we have a distinctive suite of premium products and services designed to delight our Private Banking segment. The launch of the super premium ICICI Bank Diamant Credit Card will throw open a world of possibilities to our distinguished customers and enrich their experience. The Gemstone Collection includes a wide range of cards that have been tailor made to meet the diverse requirements of our customers and offers competitive benefits and rewards to generate enhanced value to them”.
Mr. Vicky Bindra, President, APMEA, MasterCard Worldwide, said, “MasterCard is pleased to collaborate with ICICI Bank for the launch of the ICICI Bank Diamant card. The continued emergence of the affluent consumer segment in India presents a huge opportunity but also requires world class products to fulfill the higher expectations of these consumers who seek exceptional quality in every aspect of their lives. The ICICI
Bank Diamant card is an example of MasterCard's commitment to provide payment experiences that have been developed specifically to cater to their sophisticated tastes and lifestyle choices of the affluent Indian cardholder."
The ICICI Bank Diamant Credit Card offers a wide list of attractive benefits to the card members:

• Access to over 50 exotic private islands spread across the Indian Ocean, the Caribbean Isles, off the coasts of New Zealand and  Australia and in Europe’s famed Aegean and Mediterranean Sea
• Complimentary private cruise aboard the luxurious Lagoon 560 or the stately Azimut 39 that rank among the finest crafts in the world
• Access to the world’s best jets including the CRJ ExecLiner, the Cessna Citation C II and Citation XL
• Complimentary access to supercars such as the Ferrari F430, Audi R8 and Porsche 911 Turbo among others
• Complimentary membership to the exclusive Leaders  Club from Leading Hotels of the World, Ltd., the largest luxury hospitality organisation representing over 430 of the finest hotels, resorts and spas across 80 countries
• Direct membership to the platinum tier of Flying Blue, the leading European frequent flyer programme, upon purchase of a return trip air ticket from Air France-KLM
• Worldwide complimentary airport lounge access through membership to Priority Pass, the world’s largest airport lounge access programme, MasterCard affiliated Clipper and Plaza airport lounges and 300+ lounges of the Air France-KLM and Sky Team alliance
• Complimentary MacBook Air on joining
• Complimentary rounds of golf at more than 100 of the finest golf courses worldwide
• Complimentary movie tickets
• Access to Culinary Treats programme offering a minimum 15% savings at 800+ restaurants across India from ICICI Bank
• Offers rewards on all purchases powered by PAYBACK,which is India’s first and largest multi partner loyalty programme
• Enhanced security through embedded microchip to prevent counterfeiting and skimming

HDFC bank launches VISA Bharat credit card for farmers

HDFC Bank, the country's second-largest private sector bank after ICICI Bank, said it had opened 87 rural branches on Sunday across the states of Punjab and Haryana.

Manned by three or four staff, these are full-service branches located primarily in the rural areas.

The bank said that along with opening the branches, it had also launched HDFC Bank VISA Bharat credit card, targeted towards farmers and agriculturists.

"The new global credit card has special features designed with Indian farmers and their shopping needs in mind," the bank said in a statement. "The card will offer farmers cash back on every purchase as well as a waiver on petrol surcharge on fuel transactions between Rs400 and Rs5,000."
The push into the interiors of the country is aimed at bringing 10 million unbanked families from rural and remoter areas like Leh in Ladakh and the north-east into the banking fold.

''We are committed to providing efficient, technology driven banking products and services across India to help bring about inclusive growth. The launch of the 87 full-service rural branches reiterates this commitment and we are confident that our endeavour will help in the economic development of the rural areas in the state of Punjab and Haryana, ''said Navin Puri, country head, Branch Banking, HDFC Bank.

''Agriculture is a critical sector of the Indian economy and forms the backbone of our country," Parag Rao, senior executive vice president, business head, credit cards & merchant acquiring services, HDFC Bank.

Rao added that like HDFC Bank;s credit card for doctors and teachers, Bank through the launch of Bharat card hopes to fulfill the needs and desires of farmers.

"The Bharat Credit Card will not only provide timely financial support to agriculturists when they require it, but also give them access to many additional features and benefits. This is a global credit card for Indian farmers,'' he added.

http://www.domain-b.com/finance/institutions/HDFC/20121126_bank_launches.html

RBI bans lending for purchase of gold in any form

The Reserve Bank of India (RBI) has directed banks not to give loans for purchase of gold in any form, including primary gold, bullion and jewellery or exchange traded funds (ETF) in order to deter excessive speculation in gold.

''No advances should be granted by banks against gold bullion to dealers/traders in gold if, in their assessment, such advances are likely to be utilised for purposes of financing gold purchase at auctions and/or speculative holding of stocks and bullion,'' RBI said in a notification issued today.

The new guidelines have been issued in the context of a significant rise in imports of gold in recent years and concern that direct bank financing for purchase of gold in any form, viz, bullion/primary gold/jewellery/gold coin etc could lead to fuelling of demand for gold.

Accordingly, RBI has advised banks against granting any  loan for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold exchange traded funds (ETF) and units of gold mutual funds.

However, banks can provide finance for genuine working capital requirements of jewellers.

India imported 1,067 tonnes of gold worth about $60 billion in the 2011-12 financial year. In the April-June quarter of the current fiscal, however, gold imports had contracted by 18.4 per cent year-on-year to $13 billion (Rs71,912 crore) amidst rising international prices of the precious metal.

SBI GE Cards Number

As per SBI Analyst Presentation for Q2 FY 2013, performance of SBI Cards & Payment Services Pvt. Ltd. (joint venture between SBI & GE) is as follows:

• Sourced 2.82 lakhs new cards during H1 FY13 vs 1.8 lakhs cards during H1 FY12 (55% growth)
• Increase in spends by Rs. 343 crores over previous quarter
• Gross NPA came down to 1.83% in Q2 FY13 from 2.1% in Q1 FY13

Mastercard with LCD screen, built-in keyboard‏

Mastercard in Singapore has launched a new credit card that has an LCD display and built-in keyboard.The card has touch-sensitive buttons and the ability to create a ‘one-time password’, doing away with the need for a separate device sometimes needed to log in to online banking.Many people find using security tokens cumbersome given the need to keep it with them in order to use online banking.

According to the BBC, Mastercard's interactive card aims to solve that issue.“We brainstormed on ways to make it convenient and yet secure for customers,” the report quoted V Subba from Standard Chartered Bank, which is collaborating with Mastercard, as saying."The question was: instead of sending customers another bulky token, could we replace something which already exists in the customer''s wallet? That was when credit, debit and ATM cards immediately came to mind,” Subba added. According to the report, future versions of the card could display added information such as the remaining balance. The card will be available from January before being rolled out globally.

http://www.indianexpress.com/news/now-mastercard-with-lcd-screen-builtin-keyboard/1029236/#

GE Capital realigns, sells mortgage biz to Magma FinCorp

GE Capital India, a unit of General Electric Co, has exited the home-loan business — under GE Money Housing Finance — as part of a strategic global realignment. Magma FinCorp, a non-banking finance company (NBFC), and its affiliates acquired the business comprising a home-loan business and an SME mortgage loan business — and 10,000 customers — in an all-cash deal.

Anish Shah, president and CEO, GE Capital India, said the money received will be allocated to grow extant businesses. “We are globally gravitating to businesses where we have a very good value proposition. We will continue to focus on growing our commercial finance business and credit card joint venture with State Bank of India,” said Shah.

As part of the transaction, Magma FinCorp will fully acquire GE Money Housing Finance for Rs. 660 crore, and the home equity loans portfolio of GE Money Financial Services with Rs. 940 crore loan assets as on May 31, 2012.

The funding will be refinanced by 20 banks and includes top nine public sector banks. Sanjay Chamria, vice chairman and managing director, Magma Fincorp, said the acquisitions, while strengthening Magma’s presence in the retail lending space, also offer an excellent platform for Magma to leverage its network in the rural and semi-rural India for its home loans foray. Customers will continue to be serviced by the GE Money team till the completion of the transactions.

As far as GE Capital India’s commercial financing business is concerned, healthcare finance doubled volumes last year. “Corporate debt, which is mostly term loans, are more focused on mid-market. Our leasing business is also doing very well, especially auto. We have bagged 50 of the top 200 signed up with no losses till date,” said Shah.

The company’s credit card business with State Bank of India (SBI) witnessed 60% growth in issuance with spends by the cardholders growing roughly by 40%. The business has seen a gradual decline in delinquencies over the last few years among credit card users and it is well below what it was 2-3-4 years ago, Shah said.

Said to be the No. 2 player in the country in terms of new card issuances, SBI Cards currently has around 2.3 million cardholders. “We don’t want to be in a race to be the No. 1. We’d rather grow credit cards as a solid, quality business,” said Shah.

http://www.dnaindia.com/money/report_ge-capital-realigns-sells-mortgage-biz-to-magma-fincorp_1762265

Visa Signs Credit-Card Deal With Three Myanmar Banks

Visa Inc. said Saturday that it will partner with three banks in Myanmar, allowing Visa's ubiquitous credit cards to be issued and accepted in the nascent market—a move designed to bring the long-isolated Southeast Asian country closer to global financial integration. The U.S.-based financial-services giant signed licensing agreements with three local banks, Kanbawza Bank Ltd., Myanmar Oriental Bank Ltd. and Co-Operative Bank Ltd., known as CB Bank.

Myanmar has in October allowed four international credit cards - - Visa, Master, CUP (China Union Payment) and JCB (Japan Credit Bureau) for the first time to facilitate foreign travelers in domestic payment as a follow-up program of MPU (Myanmar Payment Union) card for local citizens in September.

Allowing international bank cards to operate in the country is another step forward for Myanmar's banking sector and would have positive improvement in tourist industry of the nation that could attract more foreign investors, bankers said.

At present, 17 private banks have participated in the MPU program and all private banks would join in soon. Initially, ATM has begun service in November 2011 with six private banks, Myanmar currently has 19 private banks and four state-owned banks.

Standard Chartered Bank India launches Yatra Platinum card

Standard Chartered in collaboration with travel portal Yatra.com launched the ‘Standard Chartered Yatra Platinum Credit Card’. The card offers a suite of benefits to credit-card customers when they make travel reservations on Yatra.com besides their regular shopping and other spends. The co-branded card offers benefits like Cashback and accelerated reward points on spends at yatra.com, travel discount vouchers and free tickets.  

Some of the attractive benefits that the card holder will get are – 10 per cent cashback on all travel spends at Yatra.com, waivers on Yatra.com domestic air cancellation fees for all tickets booked on Yatra.com, on-boarding vouchers (discount vouchers ranging from Rs 4,000 to Rs 8,500 for travel reservations across flights, hotels and holiday packages), four reward points for every Rs 100 spend on Yatra spends and fuel surcharge waiver on all fuel spends.

Commenting on the launch Sanjeeb Chaudhuri, Regional Head, South Asia & Group CMO, Standard Chartered Bank said, “Indian travel industry is growing by leaps and bounds.  In the cluttered market of travel services, we see the need among customers for services that will not just facilitate their travel reservations but also reward them for their spends.” To avail this facility, customers can apply for the card online at the bank’s website or at any of its branches.

HSBC restructuring its consumer banking business in India

HongKong Shanghai Banking Corp is  restructuring the consumer banking and wealth management business of its India operations, a top executive told ET. The UK-based bank is also changing its incentive practice for relationship managers to bring in more accountability and plans to reduce its basket of mutual funds from 170 to below 100.

We have now tightened our credit standards and are using the credit bureau extensively," said Gannesh Bharadwaj, head of retail banking and wealth management at HSBC India. Unsecured loans, including personal loans and credit cards, are now being marketed to bank customers and corporate salaried customers.

"The bank is now focusing on customers with deposits of over Rs 3 lakh, rather than going for mass customers, a move that did not go well with us in 2008," Bharadwaj said.

HSBC, like most foreign banks, has been cleaning its books since 2008, when its consumer banking business was hit by losses on account of rising bad loans. Prior to the economic crisis in 2008, the bank was marketing its loans to non-bank customers and relying heavily on third-party agents. A weak credit bureau also added to the bank's woes.

The bank's non-performing loans, which stood at 2.31% OF GROSS LOANS in March 2010, has dipped to about 0.62% In March 2012. The NPAs in the personal loans business has dipped to 5.74% at the end of March 2011, compared with 18.36% in March 2010. The retail banking business of HSBC India posted a profit of Rs 383.63 crore at the end of March 2012, compared with Rs 516.6-crore loss in March 2010.

The bank has set up a customer value management cell, which will house all products including mortgage, personal loans, credit cards and wealth management. This is different from the structure followed by most foreign banks where every loan product is housed in a separate vertical.

"Globally, the retail banking business is being revamped. It is no more a product-driven approach. The 500 relationship managers will provide investment advice and also sell home and personal loans, credit cards and deposits," Bharadwaj said. The bank is now ramping up its credit card and home loan business. The bank after shrinking its credit card book is now back in the market. It has 5 lakh credit card customers compared to about 18 lakh customers two to three years ago. The bank is also in the process of acquiring Royal Bank of Scotland's retail assets in India

http://articles.economictimes.indiatimes.com/2012-10-30/news/34817229_1_personal-loans-bank-customers-loan-product

Banks grow loan books with credit card, car loan advances‏

Rising NPAs have forced lenders to focus on smaller retail loans

Banks have aggressively grown their loan advances through credit cards, vehicle loans, personal loans and agriculture, while sharply cutting down loans to industry.

Rising non-performing assets (NPAs) have made lenders risk-averse, forcing them to concentrate on smaller retail loans, rather than chunky advances to a single corporate account. According to latest data by the Reserve Bank of India (RBI), the year-to-date bank credit growth (April to October 19) is just 2.7 per cent, while in the corresponding period last year, it was over 5 per cent.

Outstanding bank credit to industry stands at Rs 20,13,400 crore at the end of September, growing at the rate of 15.6 per cent over the previous year, while the year-on-year growth in the corresponding period last year was 22.9 per cent. The worst impacted are roads, infrastructure and the textile sectors.

Credit card advances grew fastest by 21.9 per cent over the previous year to Rs 23,000 crore, while the year-on-year growth in the corresponding quarter last year was just 2.2 per cent.

For over the past four quarters, banks have been focusing on retail loan growth with reduction in interest rates, processing fees and other promotional schemes. So, while banks are turning risk-averse on industrial credit, they are also trying to grow their NIM (net interest premiums) by growing unsecured loan book.

There is also a spurt in the growth of vehicle loans with total outstanding at Rs 1,02,700 crore, growing at the rate of 22.2 per cent over the previous year, up from 19.3 per cent growth recorded last year. Most banks are sitting on excess liquidity which is being deployed into government securities rather than on loan assets.

RBI governor D Subbarao in an interview with Financial Chronicle on Tuesday, said, “We expect credit to flow to all productive sectors like infrastructure, agriculture and SME sectors.” A senior SBI official said, “We are selectively lending by putting most of the excess liquidity of close to Rs 70,000 crore into government securities or other options with very selective lending.”

Agriculture credit has gone up by 21.3 per cent at the end of September over the previous year, while the year-on-year growth in the corresponding quarter rose by 7.9 per cent over the preceding year. The outstanding personal loans rose by 16.6 per cent over the previous year to Rs 15,122.6 crore. In the same time last year, the year-on-year growth for personal loans was just 12.2 per cent.

Chanda Kochhar, CEO and MD, ICICI Bank, said in a media concall last week, “Working capital loans and retail credit growth will be the mainstay of credit for the bank in the coming quarters until investments begin into projects.” About half of the Rs 6,670 crore of incremental credit growth reported in the second quarter came from retail loans.

In the industrial segments, one of the worst hit is the road sector where the pace of growth of bank credit is just 19.1 per cent, down from 31.9 per cent last year. With many infrastructure projects held up due to of various approvals, the pace of growth in infrastructure advances have slowed to 15.1 per cent over the previous year to Rs 6,50,100 crore, down from 20.3 per cent last year.

http://www.mydigitalfc.com/banking/banks-grow-loan-books-credit-card-car-loan-advances-040

Virtual Card: Good to have for Online Transactions

RBI had mandated a second factor authentication based on information not present on the cards with effect from August , 2009. This measure enhanced the confidence of customers as evidenced by the spurt in online transactions in the recent past. The second factor of authentication has been mandated for Interactive Voice Response (IVR) transactions from February 2011 and for the residual transactions ( Mail Order Telephone Order transactions, hotel bookings etc.) with effect from May 2012.

RBI has also mandated issue of online alerts to customers for all card transactions irrespective of the value of the transaction or the channel used. This measure will at least help a customer to remedial action to prevent further misuse of his card. RBI is playing its part brilliantly in making online transactions more secure and safe. Moreover, there is already a product exists in the payment solution world that protects the customer from online frauds which is Virtual Card.

What is Virtual Card?

As the name suggests, it's a virtual (not physcial)/intangiable in nature. For any online transactions, details required are card number, expiry date and CVV. So, all these details of virtual card are provided online, without any physical card.

How does it works?

Virtual card is linked to your existing credit card; implying that it's just a new card (with new card number) while retaining all the characterstics of your existing card (billing date, credit limit etc.). You can fix a lower limit on this card. Fixing a lower limit actually limits your online exposure in case details of virtual card get compromised.

For eg, if you have an actual card with credit limit of Rs. 100,000. You can create a virtual card with credit limit of Rs. 5,000. In case of online fraud on virtual card, card can be used upto Rs. 5,000 only.

Most of the Indian private banks do offer virtual card facility. 

For ICICI Bank virtual card offering, please check http://www.icicibank.com/infinity/virtualcc_faq.html

For HDFC Bank virtual card (NetSafe card) offering, check http://www.hdfcbank.com/personal/making_payments/making-payments-details/netsafe/gts8mitl

Kotak Mahindra Bank netc@rd, http://www.kotak.com/bank/personal-banking/cards/faqs-netcrd.html

The Cyber Attack on HSBC: Denial of Service Attack

The Cyber Attack on HSBC: What Happened (via CFO.com)

Data Security | October 24, 2012 | CFO.com | US The recent “denial of service” attack on HSBC’s websites around the world may have been an annoyance for customers and the bank, rather than a damaging breach of security. But it’s yet another reminder of the disruption and reputational damage…

Credit Cards to Non Relation Customers

Banks are again targeting to push up credit card sales and unsecured loans portfolio by mainly focusing on customers without an existing relationship with the bank.

Banks had stopped these practices after the Lehman Brothers crisis. Banks had a huge number of defaulters and so the had to stop such practices. But about a year back the banks again slowly resumed such practices.

Ms Rajashree Nambiar, General Manager & head of retail banking products, personal & preferred segment (South Asia) of Standard Chartered said, "Yes, we do offer credit cards and unsecured loans to customers not having an existing relationship. We believe we have a robust risk assessment framework ably supported by a maturing credit bureau, to underwrite such customers. We also use data from strategic alliances and partners to supplement the traditional risk management framework, wherever applicable".

Managing Director and head of cards and unsecured loans, Citi India, Mr. Muge Yuzak said, "We are targeting customers outside our bank to maintain our market leadership position and growth momentum. The reason why this market went through pain in 2008 was not just because consumers did not use credit responsibly but also because the overall credit framework to provide banks with access to the exposure of individuals at an industry level was not robust. This resulted in loans being provided way above the ability of customers to repay".

But there are still some banks like HSBC Bank, who are still cautious in few segments.

Credit Card Numbers: Random Numbers???

Credit Card Numbers Logic

Credit card numbers are not random and they follow a standard logic. Card number contains information about card issuer as well as card holder and also it contains a check digit that validates the complete card number.

The very first number is the Major Industry Identifier (MII) and indicates type of card issuing institution. For instance,

• 1 and 2 are issued by airlines.
• 3 is issued by travel and entertainment.
• 4 and 5 are issued by banking and financial institutions.
• 6 is issued by merchandising and banking.
• 7 is issued by petroleum companies.
• 8 is issued by telecommunications companies.
• 9 is issued by national assignment.

The first six digits are the Issuer Identification Number (IIN). These can be used to look up where the card originated from. Check list of popular IINs on Wikipedia for more details. Popular ones are

• Visa: 4*****
• American Express (AMEX): 34**** or 37****
• Diner’s Club International: 36****
• Mastercard: 51**** to 55****

The seventh digit to the second-to-last digit is the customer account number. Most companies use just 9 digits for the account numbers, but it’s possible to use up to 12.

The very last digit of each credit card is the check digit, or checksum. It is used to validate the credit card number using the Luhn algorithm.

The Luhn Algorithm Validation Check

The Luhn Algorithm is used to validate all sorts of numbers, including credit cards, IMEI numbers and some social security numbers. It is not foolproof, but is generally considered to be useful.

Take the credit card number and read the digits from the right. Double every other number and write them down – if you do it in the same order as your card is written it will help with clarity. Now, wherever you have calculated a double-digit number, change it so that it reads as “first digit + second digit” (in other words, sum the digits of the products). Finally, take your calculations and add those numbers to the numbers remaining on your card that you didn’t double. A legitimate credit card number will give you a result that is divisible by 10.

For instance, let’s use a number: 4012 8888 8888 1881.

Card no.	4	0	1	2	8	8	8	8	8	8	8	8	1	8	8	1
Double every 2nd digit from right	8		2		16		16		16		16		2		16
Sum of digits	8	0	2	2	7	8	7	8	7	8	7	8	2	8	7	1	90

90 result is divisible by 10.