Pradhan Mantri Jan Dhan Yojana (PMJDY) launched
The ambitious Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched formally on 28 September 2014 by the Prime Minister Narendra Modi at function held at Vigyan Bhawan in New Delhi. The scheme promoted mainly to end financial untouchability in India saw the opening of an estimated 1.5 crore bank accounts across the country on this single day.
Following are the main benefits for account holders of PMJDY
a) A RuPay debit card for every account holder
b) Rs. 1 lakh accident insurance cover
c) Rs. 5,000 overdraft facility
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KPMG hired for validation of PMJDY
International professional services firm KPMG was hired by the Union Finance Ministry to undertake a validation exercise of the number of basic bank accounts opened by the banks under the Pradhan Mantri Jan Dhan Yojana (PMJDY). KPMG would provide some comfort to the Finance Ministry that the numbers submitted by the banks pertaining to PMJDY were accurate and reflected the true picture.
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SBI launches its 1st first multi-currency international debit card
State Bank of India (SBI) on 8 September 2014 launched its first multi-currency international debit card to allow consumers to use a single card to pay in multiple currencies. This card launched in a tie-up with MasterCard would, at present, enable customers to load four international currencies in this card. These 4 currencies include US dollar, euro, Great Britain pound and Singapore dollar. More currencies will be added going forward as the card has the facility to be loaded up to 12 currencies.
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S.S. Mundra becomes fourth Deputy Governor of RBI
Subhash Sheoratan Mundra (S.S. Mundra) took over as the fourth Deputy Governor of the Reserve Bank of India (RBI) during July 2014. He took the charge as the Deputy Governor of the RBI on 31 July 2014. Three other deputy governors of the RBI are Urjit Patel, HR Khan, and R. Gandhi. Before taking this responsibility at RBI, Mundra was the Chairman and Managing Director (CMD) of the public-sector bank – Bank of Baroda (BOB). Mundra filled the vacancy created by the retirement of K.C. Chakrabarty in April 2014, two months before his five-year tenure was come to an end.
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ICICI Bank launches ‘Cardless Cash Withdrawal’
Private-sector bank ICICI Bank announced its unique ‘Cardless Cash Withdrawal’ service on 10 September 2014, which allows its customers to transfer money from their account to anyone in India with a mobile number. Under the ‘Cardless Cash Withdrawal’ service, the recipient can withdraw money round the clock without using a debit card from over 10,000 ATMs of ICICI Bank across the country. One can do this even without having a bank account of any bank. However, the sender needs to be an ICICI Bank savings account holder. The facility can be initiated by any ICICI Bank savings account customer (sender) by logging into internet banking of ICICI Bank website.
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SBI tops in India’s mobile banking
State Bank of India (SBI) claimed first spot in the mobile banking segment in the country, as reported in the latest data released by the RBI on 15 September 2014. SBI’s total number of mobile banking users stood at 1.15 crore. ICICI Bank stood second with 19.5 lakh users and was followed by Axis Bank (13.6 lakh), Yes Bank (4.3 lakh) and HDFC Bank (3.5 lakh). The number of SBI’s mobile banking users is larger than the mobile banking customer base of large banks in the West. Only a couple of Chinese banks have more mobile banking customers. SBI’s emergence as country’s largest mobile banking operator came as a surprise as traditionally new generation private banks and foreign banks have been the early adopters of alternative platforms like mobile banking.
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Securities Law (Amendment) Bill passed
Indian Parliament on 12 August 2014 passed the Securities Law (Amendment) Bill, 2014, which will empower SEBI to act against ponzi operators and market manipulators more effectively. The bill was passed by the Lok Sabha on 6 August 2014 and the Rajya Sabha passed it on 12 August 2014. It empowers SEBI to act against ponzi operators and market manipulators more effectively through search and seizure, attachment orders and recovery proceedings and with access to call data records. This marks a dilution from the direct powers granted to SEBI Chairman through as many as three ordinances in the past one year to authorise search and seizure operations. Under the act constituted (with the passing of this bill), a special SEBI court would be set up in Mumbai to fast track prosecution proceedings launched by SEBI, as also to clear search and seizure operations proposed by SEBI.
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RBI reduces number of mandated free transactions in 6 metro cities
The Reserve Bank of India (RBI) on 14 August 2014 announced its decision to reduce the number of mandated free transactions for savings bank account holders at other bank ATMs located in six metro cities from five to three per month. This reduction would come into effect from 1 November 2014. The six metro cities (Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad) were chosen first for reducing the number of mandated free transactions as they are well-served in terms of payment infrastructure. This reduction in the number of mandated free transactions will, however, not apply to customers having no-frills/small/Basic Savings Bank Deposit Account (BSBDA) type of accounts as well as for transactions done by savings bank account holders at ATMs situated outside these six metro cities. Banks are also free to offer free transactions above this mandated limit.
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Forensic Audit of Dena Bank and Oriental Bank of Commerce
On 20 August 2014 the Finance Ministry ordered a forensic audit to be done at the branches of two banks – Dena Bank and Oriental Bank of Commerce (OBC) in view of the reports of misappropriation of funds worth Rs. 436 crore. According to media reports, a Mumbai-based branch manager of Dena Bank mobilised fixed deposits (FDs), using middlemen, to the tune of Rs 256.5 crore from seven corporates, while in the case of OBC, misappropriation of funds to the tune of Rs. 180 crore was reported. In the wake of rising scams in public sector banks, the Finance Ministry is looking at various steps, including strengthening of risk.
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RBI releases Charter of Customer Rights
The Reserve Bank of India (RBI) on 22 August 2014 released the charter of customer rights, which seeks to provide the right to be treated with courtesy to both the customer and the financial services provider. Following are the important clauses of this charter-
- The customer should not be unfairly discriminated against on grounds such as gender, age, religion, caste and physical ability when offering and delivering financial products by the financial services provider
- The key risks associated with the financial product as well as any features that may especially disadvantage the customer should be made known to him/her by the financial services provider
- The financial services provider should provide customers with product terms and conditions that are in simple language, easily understandable, and with sufficient information that the customer could be reasonably expected to make an appropriate choice of product
- The financial services provider may, however, have certain special products which are specifically designed for members of a target market group or may use defensible, commercially acceptable economic rationale for discriminating between customers
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Vijaya Bhaskar Committee on Shadow Banking
The Reserve Bank of India (RBI) on 18 August 2014 constituted a 15-member inter-regulatory committee to monitor the growing phenomenon of shadow banking. P. Vijaya Bhaskar, Executive Director of RBI, has been appointed as the Chairman of this committee. Shadow banking refers to banking-like activity by non-banking finance companies (NBFCs) that remain outside the regulatory net. They generally operate as intermediaries between investors and borrowers. The role of this newly constituted committee will be to find out the volume of money in shadow banks, who the investors are and direction of the money flow, etc. Also real estate dealings will be looked into very meticulously by the committee. The 15-member committee comprises of officials of the RBI, Securities and Exchange Board of India (SEBI), Central Economic Intelligence Bureau and the National Housing Bank (NHB).
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Syndicate Bank CMD S.K. Jain arrested
S.K. Jain, the Chairman and Managing Director (CMD) of public-sector Syndicate Bank was arrested by the CBI on 2 August 2014 on charges of allegedly accepting a bribe of Rs 50 lakh to enhance the credit limit of some companies. Jain was appointed CMD of state-owned Syndicate Bank in July last year for a period of five years. He was one of the youngest CMDs of a public sector bank and was due to retire in 2020.
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