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Showing posts with label HDFC. Show all posts
Showing posts with label HDFC. Show all posts

Wednesday, 14 June 2017

07:14

HDFC Bank, SBI to start charging for P2P payments on UPI

HDFC Bank, SBI to start charging for P2P payments on UPI

Nearly two years after operationalisation of the Unified Payment Interface (UPI), banks have started moving to charge for peer-to-peer payments on the new platform.
Country's largest lender State Bank of India has come out with charges with effect from June 1, while the second largest private sector lender HDFC Bank has also gone public with its rate structure which will be effective July 10.
"So far, no bank is charging for UPI transactions but at the same time it is at their discretion to levy a reasonable fee towards Person to Person (P2P) transactions for UPI and IMPS," National Payments Corporation of India's chief operating officer Dilip Asbe said in a statement.
A senior NPCI official explained that worldover, charges are levied for such transactions and added that in case of UPI at merchant transactions it is the merchant who pays while for P2P, it is the sender who has to pay.
On the transaction fees front, the critical aspect to be examined is whether there are enough number of transactions happening on UPI which establish a maturity of the platform and also the reasonableness of charges, the official added.
The UPI platform is averaging around one crore transactions with a value of Rs 2,900 crore per month, the NPCI official said, adding the number of transactions needs to be at least 2-3 crore per month for the charges to set in.
The NPCI official said there may be a review on the subject, saying there can be a meeting with bankers which can be called in the next two months to assess the situation.
It was, however, not immediately clear if the P2P transactions on the BHIM App launched by Prime Minister Narendra Modi, will also be chargeable.
When contacted, SBI's deputy managing director Manju Agarwal acknowledged that the bank has put out a circular on UPI charges on its website, but promised to withdraw it soon.
"We are not charging for UPI transactions. The circular will be removed," she said.
An HDFC Bank spokesperson was not reachable for comment, but a senior official pointed out that the charges are applicable from July 10 and there may be a review based on the outcome of such a meeting with NPCI.
SBI is charging Rs 5 per transaction of up to Rs 1 lakh, Rs 15 for transactions between Rs 1-2 lakh and Rs 25 for those between Rs 2 lakh and Rs 5 lakh, while HDFC Bank is proposing Rs 3 for transactions of up to Rs 25,000 and Rs 5 for those between Rs 25,000 and Rs 1 lakh.Billed as a game changing platform in the Indian banking space, UPI was launched in April 2015 and operationalised in August same year.
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Saturday, 22 April 2017

17:23

Digital push sees HDFC Bank record highest-ever staff cull in a quarter

Digital push sees HDFC Bank record highest-ever staff cull in a quarter

HDFC Bank, India’s second largest private bank by assets and most valued lender, has cut employee strength for the second straight quarter on the back of its digital outreach and slower branch expansion.

The bank’s staff strength has fallen by 6,096 or 7 percent to 84,325 in the quarter ended March 2017 from 90,421 in December 2016.

This reduction is the highest in a quarter and at least one-third more than 4,581 people the bank lost in the previous quarter ending December 2016.

“We have not replaced the staff which has moved out due to attrition and have rebalanced our capabilities due to the increase in digital transactions,” said Paresh Sukthankar, Deputy Managing Director at HDFC Bank.
We have seen an increase in digital transactions which has given us certain efficiencies linked to the digital channel, he said.
The total employee strength now stands at 84,325 as on March end, down from 87,555 a year ago.
Even though bank branches have increased, expansion has slowed from an average of 400 to bout 200 branch additions per year currently.
HDFC bank’s branch network has increased to 4,715 branches and 12,260 ATMs till March 2017, up from 4,520 branches and 12,000 ATMs in March 2016.
This also helped the bank cut its employee costs by 4 percent to Rs 1,553 crore in March 2017 from Rs 1,498 crore in March 2016.
Sukthankar said, “It is fair to say that we will open new branches at a slower pace and it will be at an annual rate of 200 or lower rather than the average we saw earlier. Our people needs will also be lower due to the transaction efficiencies, so it’s also fair to say that our employee count will be around current levels or lower and not grow at the pace it was growing earlier.”
Clearly, given the surge in bad loans that are troubling the banking sector, coupled with reducing costs and increasing efficiencies with the rise of digital technology, the most employable industry is also hurting the job market.

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Friday, 17 March 2017

07:37

ICICI Bank, SBI, StanChart top bank frauds list: RBI

ICICI Bank, SBI, StanChart top bank frauds list: RBI

ICICI Bank topped the list of banks that witnessed most number of frauds during April-December period of 2016 with state-owned SBI taking the second spot, RBI data said.
During the first nine months of the current fiscal, as many as 455 fraud cases involving Rs 1 lakh and above were detected in ICICI Bank, closely followed by SBI (429), Standard Chartered (244) and HDFC Bank (237).

The other banks which reported large number of frauds to the apex bank during the period include Axis Bank (189), Bank of Baroda (176) and Citibank (150).
However, in value terms, frauds involving Rs 2,236.81 crore were reported in SBI, followed by Punjab National Bank (Rs 2,250.34 crore) and Axis Bank (Rs 1,998.49 crore).
The data provided by RBI to the Finance Ministry also revealed the involvement of bank staffs in fraud cases.
In the case of SBI, 64 employees were involved in fraud cases, while it was 49 for HDFC Bank and 35 for Axis Bank.
In all, 450 employees were involved in fraud cases in different public and private sector banks during April-December 2016, in 3,870 cases involving a total value of Rs 17,750.27 crore. 



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Wednesday, 4 May 2016

06:58

Mutual Funds: Industry paid more in salaries than aggregate profit earned in FY15

Mutual Funds: Industry paid more in salaries than aggregate profit earned in FY15

According to the data sourced from Association of Mutual Funds of India, the industry paid a total of Rs 1,832 crore in salaries for the year 2014-15 and it was 105 per cent of the total amount that the industry earned in profits during the year.

While salary disclosure of top executives by mutual funds on Monday revealed that some of them earned even more than salaries drawn by heads of leading corporate houses, a look into the overall employee expenses of fund houses shows that in the financial year ended March 2015, the industry paid more in salaries than the aggregate profit earned.
According to the data sourced from Association of Mutual Funds of India, the industry paid a total of Rs 1,832 crore in salaries for the year 2014-15 and it was 105 per cent of the total amount that the industry earned in profits during the year.
While the data on profitability and wage expense for the top five players shows that the employee cost stood at 56 per cent of the total profit earned by them, industry insiders say that the high wage to profit ratio for the industry is largely on account of the lower profitability and relatively higher salary payout by the smaller fund houses.
“The smaller fund houses either earn less profit or are making losses but they pay in line with the industry standards and that result into a higher wage to profit ratio for the industry as a whole,” said a senior official with a leading mutual fund.
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Monday, 4 April 2016

07:35

ICICI, SBI and other banks take the battle to mobile wallet players

ICICI, SBI and other banks take the battle to mobile wallet players

Banks are taking the battle to mobile wallet companies, armed with their readymade payment systems, wide merchant network and an on tap customer base, attempting to reclaim a turf which just a couple of years ago was their fiefdom.

In the past year, large lenders like ICICI Bank, State Bank of India, Axis Bank and HDFC Bank, which together control around 40 per cent of local banking assets, have launched new payment instruments as they seek to prevent customers from moving money to newly emerging non-bank companies.

SBI's Buddy, ICICI's Pockets, HDFC Bank's PayZapp and Axis' Lime are the new kids on the block, challenging the likes of Paytm, MobiKwik and Citrus Pay.

"It is an evolving space and the shift is towards digital transactions. None of us know the pace of the shift. Everyone is trying to experiment with the space," said Axis Bank Chief Executive Shikha Sharma.

While wallets have had to spend millions to get their branding done, banks are leveraging their existing brand value to lure customers away from wallet players. Tie-ups with new tech innovators are also keeping bank costs low.

"Investments in this business for us is in terms of deployment of resources as platform has been provided by our technology partner," said Manju Agarwal, deputy managing director, corporate strategy and new businesses, at SBI. Ease in small-value payments attracted the bank to this space, Agarwal added.

Parag Rao, head of cards and merchant acquiring at HDFC Bank, said he has been leveraging the bank's merchant and customer base to offer attractive discounts for PayZapp users.

"We want to facilitate all forms of transactions that the customer uses. In the physical world, the user can use the credit card and the debit card while in the mobile world he can use wallets," Rao said.'

HDFC Bank dominates card spending with a 3 lakh strong network of point of sale terminals. It is this offline success that it wants to replicate online.

However, wallet companies say banks cannot ensure enough attention to this business to make a difference. They point out to the fact that spending through debit and credit cards is still nascent despite an exponential increase in cards issued.

Reserve Bank of India data show that the number of outstanding debt and credit cards has increased more than three times in six years to 669.61 million in January 2016. However, people still prefer to pay in cash after withdrawing it from ATMs.

"Banks are excellent settlement engines, but when it comes to user experience, we have been able to train 123 million people over the last five years to make digital transactions without glitches. People trust us with their money," said Nitin Mishra, head of products at Paytm, India's largest wallet company.

Source:BankingUpdates

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Friday, 1 April 2016

08:20

Commercial banks announce new lending rate structure

Commercial banks announce new lending rate structure

As a step to improve transmission of monetary policy, commercial banks announced marginal cost of funds-based lending rates (MCLR), a new regime which kicks in from April this year.

The overnight MCLR rate of seven large banks, including State Bank of India (SBI), ICICI Bank, HDFC Bank and Axis Bank, varied between 8.95 per cent (SBI) to 9.15 per cent (Punjab National Bank).
Bank of India did not provide MCLR rates. Its officials said the public sector lender will like to study rates quoted by competitors and finalise its rates today. Banks are not open for public transactions on the first day of the new financial year (FY17), starting today.
New home loans from SBI, the country’s largest lender, will be cheaper by 10 basis points (bps) under the revised loan pricing regime that begins from Friday.
Under MCLR regime, SBI’s benchmark rate would range between 8.95 per cent (overnight) to 9.35 per cent (for three years).

The Reserve Bank of India (RBI) had prescribed the new system for all banks, to improve transmission of monetary policy. Instead of one benchmark rate, banks would indicate at least five. Starting with one for overnight tenors, banks would quote rates for one month, three months, six months and one-year buckets. RBI has left it to banks for giving more rates for longer periods.

Anshula Kant, deputy managing director at SBI, said the MCLR rate for a one-year tenor will be 9.2 per cent. At present, their home loan rate is 9.55 per cent (base rate of 9.3 per cent plus 25 bps premium). Under the revised regime, it could be with MCLR for one year of 9.2 per cent plus 25 bps premium or 9.45 per cent for home loans sanctioned from Friday.

Existing home borrowers would get the option to move to the new rate. They will be charged a switch fee, to be announced soon. There would be a saving of ~600 in equated monthly instalment on a one-year loan, Kant said. This tenor (one year) will be most crucial for banks, as a little more than 30 per cent of deposits have a maturity of this much. The change in deposit rates for this bucket would drive revision in the MCLR rates.
Deposit rates are expected to slide further in FY17, depending on liquidity conditions. Asked about revision in these rates, Kant said they’d review these after RBI announces its policy review on April 5.

At present SBI’s term deposits range between 5.25 per cent at the short end to 7.5 per cent for 456 days to less than three years.
India Ratings and Research said the shortest tenor MCLR for bigger banks would be 90-100 bps lower than the base rate, making it comparable to commercial paper (CP) rates with similar tenor. On the longer end (one-year rate), considering the 70-75 bps of tenor premium in the market, the difference from the base rate could be 25-30 bps.
Implementation of MCLR has the potential to channelise the recent surge of volumes in the CP market towards bank credit. CP dues as a percentage of short-term bank credit went up to 14 per cent in FY16 (from 11 per cent last year) and three to five per cent of this, which is ~74,500 crore to ~1,20,000 crore, is likely to flow back into the banking system as rates get competitive.

Banks with a higher share of stable current and savings accounts will see less impact. Those with a relatively higher mix of domestic borrowing (in the form of longer tenor senior or subordinated debt) will be better positioned (in the current decreasing interest rate scenario). MCLR calculations would entail borrowing costs to be computed on an average basis.

Analysts said existing large corporate borrowers might be able to negotiate with banks to shift their loans to MCLR, putting downward pressure on margins. Aggressive refinancing of better rated companies by banks with lower MCLRs is likely and this could further dent the competitiveness of many mid-sized public sector banks.
The MCLR computation also factors in all operating costs, which will mean inefficient banks get penalised more. Additionally, MCLR provides flexibility for banks to re-price their floating rate book, compared to the base rate regime.
Bank yields and margins will be volatile in the new regime and a prudent asset-liability match will become more important in managing competitiveness through interest rate cycles, the rating agency added.

RBI recently said fixed rate loans up to three years would also be linked to MCLR. This could put further pressure on the net interest margin of banks, as it removes the possibility of using the fixed rate structure for working capital loans, which has been driving incremental corporate credit growth, it said.
Source:BankingUpdates
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Sunday, 13 March 2016

12:31

HDFC Bank has no love and respect for India: National Consumer Disputes Redressal Commission

HDFC Bank has no love and respect for India: National Consumer Disputes Redressal Commission

NEW DELHI: The HDFC Bank "has got no love and respect for India" as it put the country's reputation at stake by not activating a debit card of a couple "trapped in a foreign country", the apex consumer court has said.

The National Consumer Disputes Redressal Commission (NCDRC) made the observations while asking the bank to pay a compensation of Rs 5 lakh to the Indian couple, who were stuck in Thailand and Singapore as the bank did not activate their debit card for 10 days in 2008.

"The bank has got no love and respect for India. The reputation of India was at stake. Knowing fully well that Indians were trapped in a foreign country, it was the bounden duty of the manager to swing into action immediately.

"He committed an egregious mistake for taking no action for 10 days. It exposes the sloth and callousness on the part of the manager. This shows negligence, inaction and passivity on the part of the bank.

"Foreigners always complain that due to procedural delays, they do not want to have business relations with this country. The lackadaisical approach by the bank is surprising. The bank manager did not make any effort to straighten out the problem," the bench headed by Justice J M Malik said.

The apex commission enhanced the compensation from Rs 50,000 to Rs 5 lakh to Chandigarh residents, senior advocate Mohinderjit Singh Sethi and his wife Rajmohini Sethi.

The couple had approached NCDRC against an order of a state consumer commission which had refused to enhance Rs 50,000 compensation awarded by a district consumer form.

In its order, the apex consumer commission said the bank was at liberty to take action against branch manager Rajinder Patheja and at least Rs 50,000 may be deducted from his salary, out of the said compensation.

According to the complaint filed by the couple, Raj Mohini opened a joint account after depositing Rs 1.5 lakh and the bank issued a debit card with an assurance that they would face no difficulty in foreign countries.

However, in Bangkok, the couple were told the card was not operational. Thereafter, they contacted Patheja who informed that there was some minor discrepancy in the date of birth of the woman, which was to be rectified.

The couple were again stuck in Singapore as the card was not functional even then and they faced a lot of difficulties due to lack of money till they returned home.
The bank and the branch manager, however, had denied the allegations and claimed the papers submitted by the couple were not complete.



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Thursday, 11 February 2016

11:18

Product Crack: HDFC Retirement Savings Fund

Product Crack: HDFC Retirement Savings Fund

With mutual funds now allowed to launch pension-based schemes that aim to help you save for retirement and which also qualify to give tax deduction benefits under section 80C of the Income-tax Act, 1961, HDFC Asset Management Co. Ltd has launched a new scheme.

WHAT IS IT?
Under the retirement scheme, you have three plans to choose from: an equity plan, a hybrid equity plan and a hybrid debt plan. The equity plan is a full fledged equity scheme that will invest up to 100% in equity. The hybrid-equity plan will invest 60-80% in equities and the rest in fixed income securities, and the hybrid-debt plan will invest 5-30% in equities and the rest in fixed income securities.
All three will offer section 80C tax deduction benefits and come with a five-year lock in. Over and above the lock-in, there is an exit load if you redeem before you attain the age of 60.

WHAT WORKS...
The fund managers come with a good track record. Chirag Setalvad, who will manage the equity component, also manages the successful HDFC Midcap Opportunities Fund. Setalvad will, however, use a multi-cap strategy and will invest in scrips and sectors across market capitalisation. Given that such schemes run with a limited corpus, he will run a concentrated equity portfolio. For the fixed income portion, fund manager Shobhit Mehrotra will stick to high credit rated securities and will invest in a mix of government securities and corporate bonds. A small portion may be kept aside for any credit opportunities as and when there is merit in them.

A lock-in period and an exit load will also nudge investors to remain invested for as long as they can, though this is still not stringent enough to discourage premature withdrawals before 60. If you invest your corpus to build a retirement nest, it’s best that you invest regularly throughout your working life and remain invested till turn at least 60.

...WHAT DOESN’T
At the heart of it, HDFC Retirement Savings Fund is a basket that consists an equity fund, an equity-oriented fund with some exposure to fixed income securities and a fixed-income oriented fund with a small equity exposure. There are scores of existing schemes in the market that look just like these. To build a good retirement nest, you don’t really need a fund that has ‘retirement’ written on its brochure. Any ordinary equity-oriented fund is good enough, provided it is well-managed and you stay invested in a disciplined fashion. Sure, the lock-in and exit loads do their bit to make investors stay invested, but self-discipline ought to work as well.

MINT MONEY TAKE
We usually do not recommend targeted schemes—those that have a targeted goal like a children’s education mutual fund scheme or a retirement saving fund, and so on. Stick to investing in existing plain-vanilla diversified schemes that come with a healthy track record.

Source:BankingUpdates
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Sunday, 7 February 2016

11:19

`Step-up' repayment products -HDFC BANk

`Step-up' repayment products -HDFC BANk

The country's largest housing finance company HDFC has said that it would not offer 'interest only' mortages, which were launched by SBI on Monday, but was offering `step-up' repayment products. The corporation also does not see interest rates coming down until after the budget following Reserve Bank of India's unchanged monetary policy on Tuesday.

Speaking to ToI, Keki Mistry, VC & MD, HDFC said that he expected that there would be further rate cuts during the course of the year but fewer than earlier expected. "In the short-term this is as good as it gets. Going forward, if budget is in line with expectations and global situation stabilises we expect 25-50bps during the year as against 50-75 basis points cut expected earlier." A basis point is one hundredth of a percentage point.

Mistry's comments come after the RBI governor Raghuram Rajan left key policy rate unchanged in his sixth bi-monthly monetary policy review. The governor has said that higher wages following implementation of the seventh central pay commission would provide upward pressure to prices.

On Monday, State Bank of India (SBI) introduced an interest only home loan which allows the borrowers to make lower repayments in initial years and thereby be eligible for larger loans.
"We already have a loan product which allows borrowers a lower instalment in earlier years with a subsequent increase in equated monthly instalments as they move ahead in their careers. This scheme entitles borrowers for a higher loan. But we have not seen many takers for this product," said Mistry.

Even in cases of under-construction projects the corporation allows borrowers to pay interest only during the construction period in the form of pre-EMI payment. "Our experience is that borrowers want to start repaying their loans as soon as possible," said Mistry.

Source:BankingUpdates
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Thursday, 4 February 2016

13:50

HDFC Bank would offer loans under 10 seconds across its ATM network

HDFC Bank would offer loans under 10 seconds across its ATM network 

HDFC Bank to make its ATMs mini-branches

HDFC Bank automated teller machines (ATMs) might soon give customers instant personal credit, top-up loans and approve credit card applications. The move to make ATMs more than just a cash dispensing tool would help the lender.

Arvind Kapil, senior executive vice-president (unsecured loans, home and mortgage loans), HDFC Bank, said making ATMs double up as branches will lead to cost efficiency.
"There are investments that have already been made by the bank so we are building up on that. Moreover, for any offering to become successful, it is important that we build scale, which can be easily achieved over the widespread ATM network that we have."

At the end of quarter ended December, the bank had 11,843 ATMs and 4,281 branches. The cost of setting up a branch was typically 10 times more than the cost of setting up an ATM.

In the first phase of the exercise, which starts in February, the bank would offer loans under 10 seconds across its ATM network. Last year, the bank had launched a new product using its backend advance analytics that can disburse personal loans in under 10 seconds. At the end of the third quarter of this financial year, the size of the bank's personal loan book stood at Rs 35,494 crore against Rs 24, 988 crore in the same quarter of the previous financial year.

The second phase, which would begin in April, would have ATMs disbursing top-up loans, renewing gold loans and approving credit cards. These services would initially be offered to bank customers. The lender would use advanced analytics to determine a customer's worthiness.

However, Kapil said these ATMs would now also become an acquisition tool and would help in reaching out to potential customers. "We have a click-to-call facility as well which can be used by non-HDFC Bank customers. Once you see the offers on the ATM and you want to avail of these, we will call you back in less than two minutes. With this, we can all get past the barrier of reaching out to customers who are in the do-not-call registry as they would have authorised us to call them (by using the ATM facility)."

These ATMs would become a convenient touch-point for customers instead of branches. "In the pilot project that we undertook, we realised that 40-42 per cent of the customers were using the offers on ATM outside the branch-hour timing. And out of this 50 per cent were doing it between 5 and 9 am."

 Source:Bankingupdates
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Wednesday, 30 December 2015

09:20

HDFC Bank cuts base rate to 9.30%

HDFC Bank cuts base rate to 9.30%

The new rate offered will match State Bank of India, which had the lowest base rate in the market. HDFC Bank had earlier cut rates in August to 9.35%.

Second largest private sector lender HDFC Bank slashed its base rate by 5 basis points to 9.30% from 9.35% earlier.

The new rate offered will match State Bank of India, which had the lowest base rate in the market. HDFC Bank had earlier cut rates in August to 9.35%. ICICI Bank, the largest private sector bank, which has its base rate at 9.35%, may also bring down its base rate to stay in line with competition.

Ashish Parthasarathy, head treasurer, HDFC Bank told dna, "Lending rates are unlikely to come down significantly. We took a call taking into consideration our cost of funds and other factors. The cut is unlikely to impact our net interest margins (NIMs) which have remained stable over most interest rate cycles.

HDFC Bank, however, does not give home loans. It originates the requests and sells them down to its parent.

After the Reserve Bank of India slashed the repo rate or rate at which it lends to the banks by 0.50% in September, most of the banks followed suit and reduced their base rate by 0.25% to 0.40%. Home loans and car loans were priced slightly higher than the base rate with the lowest rate being 9.50% for women customers and 9.55% for general customers.

Bank credit has been sluggish with demand for working capital loans. But, bank loans rose 11% in the two weeks to December 11 from a year earlier, while deposits rose 11.5%, as per RBI's weekly statistical supplement.

RBI lowered rates by 1.25% in the calendar year 2015 but banks have only passed on half the cuts by lowering rates only by 0.60% to 0.75%. Banks now have to shift to the marginal cost lending rate (MCLR) from April 2016, which is expected to bring a faster transmission of monetary policy. The new regime is expected to make the loans cheaper by 0.60 to 1.8% on an average as banks will have different interest depending on the tenure of the loan.

Moody's, in a report illustrated: If a bank intends to fund a five-year loan based on its one-year deposits base by pricing it off the one-year MCLR, there will be lower mismatch between yields and the cost of the bank's intended funding base if policy rates were to change.

With the US Federal Reserve hike behind us and further hikes to be gradual and data dependent, there is an assurance that interest rates will not climb sharply across the globe. In India, though it is dependent on inflation, banks are often left with little choice but to bring down rates to encourage a credit growth.

 Source :DNAINDIA
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Friday, 18 December 2015

23:14

Banks may now give home loans for Rs 1 crore for 30 years

Banks may now give home loans for Rs 1 crore for 30 years

Banks have turned active in giving out home loans for as long as 30 years for the first time since credit crisis days as they attempt to revive demand in high-end home purchases which has come to a grinding halt in the top six cities, said two people familiar with the development. This may turn out to be a life line for struggling real estate developers saddled with unsold inventories despite throwing freebies such as registration and other perks such as car park, and gadgets such as television sets and part furnishing.

Two largest mortgage lenders — State Bank of India and Housing Development Finance Co. are leading the push. These long duration loans — above 20 years — are being given to properties valued at more than Rs 1 crore, and for salaried people in the age group of 25-30 who are at the early stages of careers and at the same time have the potential to be high earners as they grow.

"We are seeing better traction for home loans this year as younger people are taking loans for long tenors such as 25-30 years," said an executive at the State Bank of India who did not want to be identified.

Till recently banks were lending for homes with a maximum tenor of 20 years since anything beyond that was considered risky as the ability to repay diminishes. But given the rising salary expectations and the optimism of youngsters to load up on debt, banks are pushing for loan terms for as high as 30 years.

Reduction in lending rates along with 15-25% salary rise across the spectrum has improved buying capacity for customers. "With pay commission salary hikes and interest rate cuts, borrowers' eligibility will definitely go up," said Keki Mistry, vice-chairman at HDFC. "People who were holding their decisions to buy homes expecting further price correction will now come back." A few months ago before the latest round of rate cuts, a person who was qualifying for Rs 1 crore worth of home loans, can now avail loans with 20-30% higher ticket size, according to home loan consultants.

For example, HDFC Bank which sells home loans on behalf of its parent HDFC, charges Rs 1,044 EMI for Rs 1 lakh loan with 15-year maturity versus Rs 874 and Rs 841 with 25-30 year tenors. "Large value loans in the wide range of Rs 80 lakh and 1.60 crore are picking up," said Vipul Patel, founder at Mortgage World, a real estate advisory firm. "With realistic price expectations home demand is coming back. Banks are now pushing for long tenor loans in 25-30 year categories, which in turn increases borrowers' eligibility."

Lenders have significantly slashed rates after the Reserve Bank of India reduced the benchmark borrowing cost by 50 basis points in September. For example, SBI and HDFC sell home loans at about 9.50-9.55% or a little less than that. The maiden base rate, less than what banks cannot lend, has declined by 60 bps even as the central bank lowered repo rate by 125 basis points since January.

 Source :BankingUpdates
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Saturday, 5 December 2015

12:14

Missed Call to Bank for Recharge Mobiles - HDFC BANK

Missed Call to Bank for Recharge Mobiles - HDFC BANK

HDFC Bank's mobile recharge via missed call

HDFC Bank, the country’s second largest private sector lender, is planning to come up with a service that will allow customers to recharge their mobile phones by giving a missed call to the bank.

For this, customers would need to register their numbers with the lender and authorise the amount by which they want to get their phone recharged. And thereafter the customer gives a missed call and their phone will be recharged automatically and the amount debited from the bank account.

“We are looking at lunching this service in the next two-three months. At present we will be offering it only for bank customers. Going ahead we may look at offering it even to the credit card customers,” said Nitin Chugh, head-digital banking, HDFC Bank.

Since over 80 per cent of the telecom customer base in India is on prepaid and also it is one of the most frequently done transactions even on the mobile banking applications, it made sense to offer a simpler solution for this.

The minimum amount of recharge that can be done has been kept limited to Rs 10 and the maximum up to Rs 250. Considering that the average mobile recharge ticket size for prepaid continues to be less than Rs 100, the bank thinks that the limit set by them will be sufficient. It also allows you to add up to three members of the family on this service.

Like several other services launched in the past, this is in line with the bank’s digital strategy that it had embarked on about a year ago. “The idea has been to become a full-service digital bank and to make everything simpler using digital. So the missed call for recharging your phone is in line with that philosophy,” Chugh added.

Source :BankingUpdates
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12:05

Chennai rains: HDFC to waive off penalty on EMI delay in November

Chennai rains: HDFC to waive off penalty on EMI delay in November

With heavy rains causing havoc in Chennai, top mortgage lender HDFC has decided to waive off any penalty on its home loan customers impacted by the rains for any delay in EMI payments for last month.

"HDFC has also decided to offer Quick Home Improvement Loans to all people whose properties have been impacted by the rains. There will be no processing fees on all such loans," HDFC Ltd Managing Director Renu Sud Karnad said.

This will be valid only for all loan applications submitted on or before December 31, 2015, subject to HDFC's norms and eligibility criteria.

Torrential downpour has caused havoc and great difficulty to people in Tamil Nadu, especially in Chennai.

"Understanding the gravity of the situation, HDFC has decided to be sympathetic towards its home loan customers impacted by the rains for delay in EMI payments for the month of November 2015," HDFC said in a statement.

Separately, Reliance Life Insurance said it has asked all its agents and sales staff to call all the customers in Chennai and check for their well-being. The company has over 1.5 lakh customers there.

This is part of the 'best business practices' being brought in by Reliance Life Insurance's foreign partner Nippon Life.

Source:BankingUpdates
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Friday, 4 December 2015

18:52

HDFC Bank sells Vijay Mallya's USL shares for Rs47 crore

HDFC Bank sells Vijay Mallya's USL shares for Rs47 crore

United Spirits Ltd (USL) on Tuesday said HDFC Bank has sold 150,000 shares that the liquor maker’s chairman Vijay Mallya had pledged with the mortgage lender, for Rs.47 crore.

In a BSE filing, USL said HDFC Bank sold the shares pledged by Kingfisher Finvest to secure loans given to the holding company United Breweries Holding Ltd (UBHL).

The move comes days after Yes Bank sold United Breweries shares worth Rs.778 crore, pushing promoter Mallya to repay loans over Rs.7,000 crore taken for the now-defunct Kingfisher Airlines.

According to USL, HDFC unilaterally invoked the shares, amounting to 0.1% stake in USL.
Diageo Plc is now a majority (54.78%) shareholder in USL.

Mallya recently said he is focused on clearing dues with lenders, after State Bank of India (SBI), the country’s largest lender, declared Mallya a wilful defaulter after a long legal battle.
On the sidelines of a USL annual general meeting that Mallya chaired in Bengaluru on 24 November, the 59-year-old said his efforts are directed towards initiating a truce with the lenders of Kingfisher Airlines.

“I am focusing on settling Kingfisher’s affairs with the banks,” Mallya said. “That’s what my current focus is.”

 Source :BankingUpdates
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Saturday, 21 November 2015

16:27

HDFC bank to monitor ATM fraud transactions on real time basis

HDFC bank to monitor ATM fraud transactions on real time basis

HDFC Bank, the country’s second largest private sector lender, has come up with a solution which will allow the lender to curb fraudulent or suspicions transactions at its automated teller machines (ATMs) as and when the transaction is taking place.

The bank, in association with the National Payments Corporation of India (NPCI), has done a pilot of this project and is looking at rolling it out in the next three-six months. According to this technology, the lender will be able to map a customer’s location using that person's smartphone. If the ATM card is being used at a loacation which is at a different location from the phone, then it will raise an alert. Nitin Chugh, Head-Digital Banking, HDFC Bank, explained this was based on the assumption that most consumers carry their cellphone along while visiting an ATM.

“If you have a smartphone, the location of the phone can be identified based on the telecom towers in that area. However, if the phone happens to be in another city then it can raise an alarm and give warning signals to stop that transaction. Then we can determine whether to decline the transaction or send a confirmation call to the customer first before allowing it,” Chugh said.

The bank is yet to lay down rules regarding the distance between the ATM where the transaction is taking place and the mobile phone or whether it will be available to all debit card holders etc. The technology has been developed by Zumigo that also owns the application. However, it is unlikely that a red flag will be raised if the mobile phone is also within a 300-metre radius of where the transaction is taking place.

Considering that NPCI is also a part of this digital imitative, it is likely that other banks may also offer similar services later. However, HDFC Bank has the proof of concept in the last three months and has tested it at over 20 situations. According to Reserve Bank of India (RBI) data, in August the bank had 24.1 million debit cards and 6.4 million credit cards in circulation.

Bank fraud has been a pressing concern for banks because there has been a surge in the number of suspicious transactions. According to the Deloitte 2015 Banking Fraud Survey, 93 per cent of respondents had agreed that there had been an increase in the incidents of fraud in the banking sector over the past two years.

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Wednesday, 28 October 2015

08:29

HDFC Bank reduces its ATM network

HDFC Bank reduces its ATM network

HDFC Bank, India's second largest private sector lender, has rationalised the number of automated teller machine (ATM) network by 276 in the July-September quarter.
The bank has reduced the number of ATMs to 11,686 at the end of the quarter ended June.

Paresh Sukthankar, deputy managing director, HDFC Bank, said, “We continue to add ATMs in certain locations but we have also been simultaneously rationalising and reviewing the existing ATMs across multiple parameters…so we look at things like vintage of deployment, number of transactions, feedback from front-end branches, opportunities for relocating, etc. So, as a part of this exercise, we have rationalised a few hundred ATMs before we either redeploy them or in some cases pull them completely.”

Sukthankar added there has been a change in customer behaviour. Now, more people are now comfortable using their debit cards as plastic money instead of withdrawing money from ATMs. Besides, people are also increasingly making payments in the digital mode via applications such as PayZapp and Chillar.

The bank's move comes at a time when it has been expanding its branch network and geographical reach. Prior to the quarter ended September, the lender had reduced its ATM count in Jaunary-March 2014, quarter. The ATM network had come down to 11,256 from 11,473 in the quarter ended December, 2013.

The management had said the cost of running ATMs was going up. To tide over the problem, some lenders have been asking for an increase in interchange fee (the amount one bank charges another if the latter's consumer uses the ATM of the non-home bank).

However, not all banks are in favour of this hike. According to bankers, the public sector lenders have been working to keep the interchange fee low whereas, on the other hand, the private sector banks have been lobbying for an increase.

This is because state-run banks are generally the issuer ones (which issue the card) and the private banks in most cases are the acquirer bank (the non-home bank ATM the consumer uses) and therefore a hike in interchange fee would benefit them unlike public sector banks. The interchange fee has remained unchanged at Rs 15 plus service tax for financial transactions.
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Monday, 26 October 2015

11:45

RBI rejects plan for 100% FDI in banks

RBI rejects plan for 100% FDI in banks

The Reserve Bank of India (RBI) has turned down a proposal from the government to allow up to 100% foreign direct investment (FDI) in banks, a move that may come as a damper for several private sector lenders such as ICICI Bank and HDFC Bank.

Sources said the RBI has not provided a clear reason to turn down the proposal from the department of industrial policy and promotion (DIPP) that deals with FDI policy. But in the past the regulator has seen banking as a sensitive sector and opposed allowing significant shareholding by foreign institutional investors, who are seen as short-term investors and can enter or exit a stock for short durations, largely to book profits.

Private banks are particularly keen on a higher ceiling and investors are also hoping for a relaxation. In fact, HDFC Bank recently got permission for 74% foreign investment and was also found to be in breach of the norms for a short period.

A few years ago, in the draft norms for new banks, the RBI had suggested limiting FDI to 49%, against the 74% cap. The finance ministry, however, saw it as a retrograde step and got the regulator to stick to the prescribed ceiling. In fact, a few years before that, during UPAI's tenure, there had been a major battle between the finance ministry and the RBI on how the FDI norms should be applied, with North Block finally saying that setting the foreign investment rules was in its domain.

Currently, the government permits 74% FDI in private banks, with up to 49% allowed under the automatic route. Foreign holdings beyond 49% need to be cleared by the Foreign Investment Promotion Board (FIPB). Portfolio investment in the sector is capped at 49% and banking is one of the segments where the composite caps, which allow fungibility between FDI and FII flows, have not been applied as the government argued that it is a "sensitive sector".

The DIPP has moved the proposal to allow 100% FDI in the sector at a time when several new players are entering the market with the RBI offering payments and small bank licences. Easier rules for overseas investment were seen to have helped some of the new players.

In any case, there are sublimits on ownership by a group in a bank and even promoters are expected to cut their stake over a period of time to encourage wider public participation and reduce concentration of risk.

Source:BankingUpdates.
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Monday, 19 October 2015

11:11

HDFC Bank suspends official involved in Bank of Baroda scam

HDFC Bank suspends official involved in Bank of Baroda scam

Amid the alleged involvement of HDFC Bank official Kamal Kalra in the Rs 6,000-crore illegal remittances, the private sector bank has suspended Kalra pending the investigation.
The scam involves Rs 6,000 crore illegal remittances that have suspected to be flown out from Bank of Baroda's Ashok Vihar branch in New Delhi to Hong Kong and Dubai.

In a statement, HDFC Bank said, “The bank has a zero-tolerance policy for any misconduct on the part of its staff and any deviation from its clearly defined processes is viewed very seriously. Swift action is taken both at an organizational and employee level, and as per process the employee in question has been suspended pending the outcome of the investigation.”

”In response to reports relating to investigations against one of our employees, we would like to state that the matter is being examined internally on top priority. The Bank is also extending its full cooperation and support to the authorities as they conduct their investigations,” the statement further adds.
As per the investigation so far, both Central Bureau of Investigation and Enforcement Directorate have arrested six persons including Kalra, who is HDFC Bank’s Forex Sales Manager in the forex department, for the alleged money laundering.

While CBI arrested Suresh Kumar Garg, the assistant general manager of Ashok Vihar Branch and Jainis Dubey, the foreign exchange head, the persons arrested by the Enforcement Directorate include Kamal Kalra, Chandan Bhatia, Gurucharan Singh and Sanjay Aggarwal, who were allegedly involved in the transaction of 15 accounts.
Bhatia, Singh and Aggarwal are said to be owners of companies based in Hong Kong and Dubai towards which the money was being transferred through 59 accounts at the bank's Ashok Vihar branch.

Meanwhile, Bank of Baroda’s internal investigation had detected irregularities in foreign exchange transfers from said branch and also suspended five officers. The public sector bank has also changed the concurrent auditor firm of the specific branch.

“The investigation currently underway pertains to 59 current accounts, which were opened during the period between May 13, 2014 to June 20, 2015 and were used for outward foreign remittance transactions aggregating to $576 million (Rs 3,672.30 crore) predominantly for the purpose as “Advance remittance for imports” to overseas parties numbering about 418, mainly based in Hong Kong,” Bank of Baroda had said on Tuesday.

“It is pertinent to note that less than 10 per cent (Rs 343 crore) of the amount involved had been deposited in these accounts by way of cash and balance 90 per cent amount had been received through RTGS / NEFT from 51 different banks. Bank would also like to clarify that while the investigations are underway, at the current stage, it does not envisage significant financial losses on account of this incident,” it added.

There are many unanswered questions which continue to be probed, such as opening of current accounts in spite of inconclusive KYC process in some cases, individual failure of detection of irregularities, non-follow up of system alerts to track exceptional transactions and reasons for the long lead time to identify these irregularities.

The newly appointed MD & CEO, P.S. Jayakumar said, “My utmost priority is to examine the current situation and bring about the necessary changes within the bank to ensure such unfortunate incidents do not recur. This will include the appointment of an external accounting firm for full review of our KYC norms and its effectiveness across all branches…”
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11:03

E-surveillance may take away 2 lakh ATM security jobs

E-surveillance may take away 2 lakh ATM security jobs

Almost two lakh security personnel manning ATMs across the country may lose their jobs over the next two-three years as Indian banks have started deploying advanced e-surveillance architecture for security and monitoring of their cash machines.

Axis Bank has taken a lead in implementing the globally prevalent centralised e-surveillance in most of its ATMs while others such as State Bank of India, HDFC Bank and Uco Bank are in the various stages of mechanising their ATM security arrangement.

Bankers say the shift will help them save up to 90% in security costs and that the modern system is safer and more reliable. "This (centralised e-surveillance) enables us to remotely monitor our ATMs 24x7 rather than relying on the guard to report any incidents," said a senior official from HDFC Bank, which is running a pilot in 500 machines. He said the bank will do additional deployment going ahead.

"This initiative is in line with our overall objective of leveraging the digital solutions to enhance our services & provide a secure transacting environment to our customers," Sonchhatra said.

A centralised e-surveillance facility can monitor ATMs 24x7 from a security operation centre.

The system includes installation of multiple sensors—motion sensor, thermal sensor, removal sensor and breaking sensor—a hooter or alarm, 2-3 CCTVs, and a two-way speaker in the ATM room. In the event of unauthorised activities, a hooter alert propels a twoway communication between the officials at the security operation centre and the alleged intruders, through mike, speakers and CCTV system. The system would also alert the local police station and nearby onroad patrolling officer.

Banks are also deploying a quick response team to visit ATMs whenever the need arises.

"The e-surveillance solution is safer and more reliable than physical caretaker," said Rajiv Anand, head for retail banking at Axis Bank.He also pointed out that the cost of e-surveillance is approximately Rs 5,000 per site per month while at present banks spend about Rs Rs36,000 per ATM per month for engaging security guards in three shifts a day.

Uco Bank Executive Director JK Garg said that the bank is planning to put a centralised surveillance system in place to reduce cost. According to Bank Employees Federation, as many as 20,000 contractual security personnel guarding ATMs may turn redundant immediately. 

About 370 people have lost jobs this year in West Bengal alone. Kunal Pande, partner at KPMG in India, said most banks in the country so far merely brought ATMs under CCTV coverage. "Although this can greatly add to efficiencies of security and law enforcement agencies and reduce reliance on physical security guards, they can only help in monitoring, they cannot provide an immediate response to a crime in action," he said.

"The security guards and policemen who are deployed today to physically monitor infrastructure and establishments could be redeployed for active security work," said Pande.

Indian banks have installed about 1.84 lakh ATMs between them as of May end. One-fourth of them belong to SBI.
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