Build robust mechanism to prevent e-banking fraud: RBI
MUMBAI, NOV. 12:
The Reserve Bank of India wants banks to build a robust mechanism to prevent incidents of fraud in areas of mobile/Net banking and electronic fund transfer.
“With greater infusion of technology in banking, the incident of frauds in Internet banking has witnessed an increase in recent times. Banks need to improve customer awareness to contain incidents of frauds involving customers,” the RBI said in its latest Report on Trend and Progress of Banking in India.
Ensuring efficiency of the banking sector by way of technology infusion while minimising the occurrence of fraudulent events has become one of the major objectives of the Reserve Bank in recent years.
According to RBI, complaints related to unauthorised fund transfers, fraudulent withdrawals from ATMs using duplicate cards, phishing e-mails aimed at extracting personal information have registered significant increase in recent times.
http://www.thehindubusinessline.com/industry-and-economy/banking/build-robust-mechanism-to-prevent-ebanking-fraud-rbi/article4077994.ece?homepage=true&ref=wl_home
| Banks to face penalty for violating info sharing norms |
| RBI has asked banks to develop a proper information sharing mechanism in the wake to sharp increase in NPAs |
| BS Reporter / Mumbai Nov 21, 2012, 21:39 IST The Reserve Bank of India today said banks may face penal action if they fail to adhere to the norms regarding sharing of information relating to credit, derivatives and unhedged foreign currency exposures among themselves. Banks have been asked to put in place an effective mechanism for information sharing by end-December 2012. The banking regulator has asked banks to develop a proper information sharing mechanism in the wake to sharp increase in non-performing asset and also restructured assets “It has been observed that of late theNPAs and restructured loans of banks have been increasing significantly. A major reason for deterioration in the asset quality of banks is the lack of effective information sharing among banks,” the central bank said. The central bank noted that lack of effective and timely information exchange among banks may also result in occurrence of frauds. Banks have been asked to ensure that fresh sanctions of loans, from 1 January, to new or existing borrowers should be done only after obtaining necessary information. “Non-adherence to the above instructions by banks would be viewed seriously by the Reserve Bank and they would be liable to action, including imposition of penalty, wherever considered appropriate,” it said. http://business-standard.com/india/news/banks-to-face-penalty-for-violating-info-sharing-norms/196793/on
Sat, Nov 17, 2012 at 13:27
How Indian banks fared in FY12: CARE Ratings analysesThe most important challenge going ahead is controlling quality of assets and the RBI has highlighted issues relating to restructured assets, slippage in quality, write-offs etc.
CARE Ratings has come out with its report on Indian Banks.
The RBI in its Report on Trends and Progress in Banking 2011-12, has highlighted the major issues confronting the Indian banking system. Important themes that emerge are the differential performance of various bank groups, movement in profits, spreads, quality of assets etc. The most important challenge going ahead is controlling quality of assets and the RBI has highlighted issues relating to restructured assets, slippage in quality, write-offs etc.
The banking sector, which withstood the turmoil of the global financial crisis during 2008-09, started showing some signs of stress during the subsequent period. Performance of Indian banks during the post-crisis period was conditioned to a large extent by a fragile recovery of the global financial markets as well as a challenging operational environment on the domestic front, with high inflation and muted growth performance. In addition, stressed financial condition of some State Electricity Boards and airline companies further added to the deterioration in the asset quality of banks. Further, with inflation being high, the RBI had followed an aggressive interest rate policy which put pressure on both banks and borrowers in an environment which is typified by a slowdown in FY12.
It is against this background that the main features of the banking system have been highlighted below. The data taken from this report has been put together to bring about a comparison between various bank groups in the last two years. Hence, besides highlighting the state of various banking parameters over two years, a comparison can be drawn across bank groups.
http://www.moneycontrol.com/news/care-research/how-indian-banks-faredfy12-care-ratings-analyses_783984.html
http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=783984&num=0 Social banking: New kid on the block? ASHOAK UPADHYAY
First it was priority lending, then financial inclusion and, now, social banking. But Indian banking remains as cross-eyed as ever.
October 23, 2012:
It is certainly fortuitous that P. Chidambaram’s return as Finance Minister should be celebrated, in a manner of speaking, by the banking fraternity’s introduction of another term to dress up its confusions about business expansion. This, in a country with contesting claims on public resources.
At a recent summit on international banking in Mumbai, which drew the heads of many banks, ‘social banking’ made a grand entry as the latest hobby horse of eye-on-the-ball experts and lazy policymakers.
The times bode well for this concept’s rapid adoption. The world economy is in a mess, capital is available with an increasing few to spread around: In the European Union, it goes to bail out banks, which lend to Government at high interest rates and low promise of return.
The European Central Bank’s Long Term Re-Finance Operations have injected €1000 billion into governments on the periphery. Their bonds are due for redemption by 2014, and in all likelihood, another rollover will occur. India’s former Chief Economic Advisor Kaushik Basu has termed this repeated rescheduling a Ponzi scheme.
A SAFER BET
In India, bankers and policymakers are prone to grandstanding and holier-than-thou righteousness: We believe in social banking. That sounds faintly familiar as a more anodyne and acceptable substitute for “financial inclusion”. In 2006, Chidambaram pointed to a severe lapse of banking policy, providing data in his budget speech to drive home the point of just how many farmer households were left out of the formal banking system. The Finance Minister, indeed, gave bankers and dial-a-quote ‘seminarians’ something to talk and to be written about.
But ‘financial inclusion’ has a nasty ring to it; it connotes exclusion, divisiveness, a chasm separating the privileged from the not-so-privileged. In underscores the deep failures of policymaking.
‘Social banking’, on the other hand, has a more amorphous, yet embracing, ring. It does not conjure up the Dark Other; nor does it spell failure or cast any burden of guilt on the banker.
CROSS-EYED BANKING
Just how ambiguous and appealing it could be was evident in K. C. Chakrabarty’s keynote address at the aforementioned event in Mumbai. The Reserve Bank of India (RBI) Deputy Governor opened his speech with this vision of ‘social banking’ and promptly tripped over himself several times.
“Before delving into the nuances of social banking, let me briefly dwell on what is social business, or more specifically, social banking. In my opinion, any activity which is viewed by society as not being in sync with societal priorities would get weeded out in the course of time. Therefore, any business, in order to be sustainable, needs to be socially oriented.
This is all the more true of banking business which, due to its financial intermediation function, has to necessarily be aligned to the developmental needs of the society that it operates in. Notwithstanding, banks being commercial organisations, must earn profit, else they would not remain viable or be able to absorb shocks. At the same time, they must serve a social purpose; otherwise, they will become irrelevant and unsustainable.”
The first time the Deputy Governor tied himself in a knot was in conflating social priorities with social needs. The first is an act of deliberation by someone, usually the powerful who ranks needs. People need money, but to say that some sections need it more than the others is to set the social priority for its distribution.
The second double-knot Chakrabarty tied around himself was in declaiming that any “business” that is not “social oriented” and “does not serve a social purpose” will become “irrelevant and unsustainable”, even if as he admitted that banks need to earn profits to remain viable. Money-lending at exorbitant rates was socially oriented and it remained self-sustaining and relevant only because formal banking, though “socially oriented”, became “irrelevant” to a wide swathe of the Indian poor.
After this clumsy start, Chakrabarty then cut to the chase. Social banking, he said, is “one where the rich subsidise the provision of financial services to the poor and where banking business is oriented towards serving the masses instead of exploiting them.”
The terms of discourse on banking activity are now undergoing change. It is not for banks to simply adopt financial inclusion processes and procedures. Social banking now recasts them as the principal agents of a transfer of resources (capital) from the rich to the poor; banks must be on their side.
FAINT ECHOES OF ’69?
At first glance, this sounds more radical than banks simply trying out financial inclusion practices because they have to. The sentiments are faintly reminiscent of the defence of bank nationalisation in 1969. But back then, the sweep fitted easily into a ‘democratic socialist’ rhetoric that spawned other ‘populist’ policies.
In today’s stressed out global scenario, Chakravarty’s social banking seems to make eminent sense on its own terms. Stripped of the context in which the speech was made — the rampant growth of avaricious banking world-wide, the steady drum of voices calling for more private banks and less regulation in India; the desire for advanced banking services that work on the assumption of dangerous risk taking, creating innovative products and services (think CDOs, sub-prime mortgages) that hold investors in short-term thrall — the prelapsarian fantasy world of ‘social’ banking, as Chakrabarty envisions it, could conceivably take shape.
In the meanwhile, the RBI has to deal with more pressing matters — the steady prodding from the Finance Ministry to allow more private banks and the fearful rise in banks’ non-performing assets, caused not the least by some elbowing from New Delhi to fund unviable businesses and poor farmers unable to pay back.
Who is more socially relevant: Sons of the soil or Princes in their towers?
http://www.thehindubusinessline.com/opinion/columns/ashoak-upadhyay/social-banking-new-kid-on-the-block/article4026060.ece |
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