RBI tightens norms for credit card issuers on minimum dues

RBI tightens norms for credit card issuers on minimum dues

RBI SETS NORMS FOR LATE FEE ON CREDIT CARDS:

RBI has told banks that the can charge late fees only in the next billing cycle following a missed payment. At present  card issuing banks charge a late fee for any payment made after the due date.

The late fee imposed by card issuers ranges between Rs.100 and Rs.700 depending on the outstanding amount above Rs.20000 most banks charges a late fee of between Rs.600 and Rs.700 .Most utility providers like electricity and telecom companies charges  customers if they miss the due date.How ever i the case of credit card payment the issuers charges interest for the delayed payment and in addition to this they charge a late fee payment.

This had led to a lot of heartburn among customers as they ended up paying both late fee and the interest even if they made the payment before the next bill was due.

CEO of SBI confirmed that RBI has asked banks not to impose late charges if the cardholder had paid before the next billing but after the due date .It is possible that the regulator must have felt that since the card holder is not being considered a delinquent until the next bill is unpaid the penalty should not ve charged he added when asked about the rationale .

In December 2013 RBI had directed banks credit card accounts to be treated as delinquent only if the minimum amount due as mentioned in the statement is not paid fully within 90 days from the next statement date .The gap between two statement should not be more than a month.

Some banks took the due date specified in the statement of payment of minimum amount due to determine the overdue status while others used the subsequent billing date to determine the over due status.

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Minors over 10 years can operate bank accounts: RBI

Minors can operate bank accounts: RBI

RBI has allowed banks to offer additional facilities as internet banking ,ATM,debit card and cheque book to a minor account holder.

Banks should not allow a minors account to be overdrawn and that these accounts should always remain  in credit.

RBI has given the leeway to banks to fix the minimum age at which they will allow minors to operate saving bank accounts independently .

In a separate notification the RBI said banks cannot slap charges on customers for not maintaining the minimum balance in inoperative saving and current accounts in which no transaction have been made for two years .The central bank had announced this change in its april 1 monetary policy and was made effective . 

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MANAGEMENT AND GOVERNANCE ISSUE IN PUBLIC SECTOR BANK

MANAGEMENT AND GOVERNANCE ISSUE IN PUBLIC SECTOR BANK:

Reserve bank of India and government over bad loans at public sector banks have led to a bitter exchange of notes between the banking regulator and the finance ministry that controls state run lenders.

Bad loans at state run banks have gone up at a brisk pace ,unlike their private sector banks. The RBI says this was because of reckless lending to corporate and allegation that has not gone down well with the ministry which says the banks we only following government advice to help boost the economy.


The RBI said the sharp rise in bad loans can not be just because of the downturn in the economy and blamed  what it called sub optimal credit management among public sector banks for the problem.

In its response defending PSU banks the ministry said most private banks had stopped lending post global financial crises in 2008 while PSU banks emerged as the only providers of big ticker loans .

The Central Banks was not convinced .It responded last week maintaining its stand threat PSU banks have week credit  management skills.In response to the ministry defensive letter RBI noted that even if the PSU banks were lending at the instance of the government to boost the economy they should have followed the principles of prudent lending which implied giving loans to credit worthy borrowers against adequate security as collateral.

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TARGETTING INFLATION-Govt to allow more private banks

TARGETTING INFLATION-Govt to allow more private banks 

The Governor of Reserve Bank of India Mr.Rajan will explain to the new Government the need to keep inflation under control.

Further keeping interest rates relatively high may be un avoidable to achieve that government officials famillar with RBI .RBI which is in the process of formulatingnew guidelines for bank licence was unlikely to allow corporate houses set up new banks in the near future .
RBI will talk to the next government on the inoprtance of inflation control , the inflation targer and the need to stay the course which the central bank is following.

RBI strenghthing its supervisory capabilities before issuing the new licences to the corporates.RBI hold a dialouge with the new government on a number of areas including the need oto present a credible budget.

The economy currently skating along at bottom but growth could pick up by at least one percentage point if measures were taken to unlock projects tied up in red tape.
we could see growth between 5.5% to 6% nudging the latter in the second half of hte current fiscal year. 

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RBI AUDIT 2014- Big Loan Defaulters to Face RBI Audit

RBI AUDIT 2014- Big Loan Defaulters to Face RBI Audit

Reserve Bank of India has taken upon itself the task of investigatinf bank frauds after a series of inquiries by banks themselves i high profile cases such as those involving Deccan chronicle and Kingfisher Airlines yielded very little.

The Board of Financial Supervision chaired by RBI Governor Mr.Rajan, has in fact cleared a proposal that the central bank will conduct an independent forensic audit of corporates declared fraudulent by banks. Independents audit ,however will be restricted to corporates that have borrowed more than Rs. 1000 crore.
The Hyderabad based Decan Chronicle borrowed Rs.4000 crore from a consortium of 18 lenders ,who allege the company misused the banking system by borrowing from  one set of lenders without keeping others.

Banks officials say the central banks move reflects poorly on the banks and reaffirms the fact that banks and some promoters have developed cozy ralationship that has  led to thousands of crores of bad loans.

Independent forensic audit is one of the many steps taken by the RBI to check the rise in stressed assets in the banking system for instance RBI decided to incentivise lenders who take quick action to resolve such cases and penalise those who sit on them. Banker say the findings from forensic audit will enable RBI to devise policies that will help it keep a close watch on the creditor borrower relationship and quickly step in when there is misuse. 

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Bharatiya Mahila Bank news in India- Mahila Bank to offer services via mobile Van

Mahila Bank To Offer Services Via Mobile Vans-

Bhartiya Mahila Bank Limited ,India first women s bank is considering to have mobile banking 
vans fitted with automatic teller machines (ATM) to cater to customers living in areas where there are no bank network.

We can not expect women to visit our Hyderabad branch for far off places around the city.Also ,we cannot have a wider branch network to be present in every neighborhood like the established public sector banks. Therefore we are thinking of launching mobile banking vans that visit different locations at the fixed time schedules .

BMB Chairperson and Managing Director Usha Ananthasubramanian toil reporters after inaugurating a branch on March 22.

According to Ananthasubramanian , the bank has nineteen branches so far and by the end of this month another four five branches would come up . There are plans to open 55-60 more branches in he next financial year .Each branch will be manned by five six staff,out of this senior positions ate being filled by people brought from other banks on three year deputation. Staff manning form offices will be recruited by BMB.

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RBI ALLOWS 5 PRIVATE BANKS TO IMPORT GOLD

TOP 5 BANKS ALLOW TO IMPORT GOLD

The Reserve Bank of India has allowed five domestic private banks to import gold.Sector officials said this could be a significant step towards easing of tough  curbs o the metal imposed last year to cut the country trade deficit.

The central bank allowed imports by  HDFC Bank,Axis Bank, Kotak Mahindra Bank,IndusInd Bank,YES Bank ,officials at the respective banks told Reuters.Two sector sources confirmed the names of the banks.

The Government had enforced an 80/20 rule in July, making it mandatory to export a fifth of all gold imports.Under that ,only six banks and three state run trading agencies that had facilitated export of gold or jewelry in three years were allowed to import. 

The six banks were mostly state run lenders . The central bank has permitted banks though they had not facilitated any exports of metal or jewelry in three years.

RBI ALLOWS 5 PRIVATE BANKS TO IMPORT GOLD List-

1. HDFC Bank

2.Axis Bank

3.Kotak Mahindra Bank

4.IndusInd Bank

5.YES Bank 

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RBI keeps repo rate unchanged ahead of polls 2014-15

RBI repo rate 2014-15,  RBI keeps repo rate remains same at 8 per cent .

LENDING RATES UNCHANGED

RBI Governer Mr. Rajan today focused on banking policy where they had indicated that lending rates will remain the same and no further hikes are expected in this year and if inflation remains comfortably low.Further the EMIs will not rise immediately.

GROWTH PROSPECT 2014-2015

RBI forecast for India's GDP growth in the year 2014-15 about 5.5% from the projected 4.9%in 2013-14, ADB  forecast India's GDP growth during the year 2014-15 is 5.5%.

BIG RELIEF TO THE CUSTOMER OF THE BANKS:-

RBI has asked banks not to charge penalty for future for maintaining minimum balance in inoperative accounts from their customers.

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