Category: Banking

Is the restriction on free use of ATMs fair?

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What bankers get from charging for ATM use is peanuts compared to what they are losing in NPAs

A day before this announcement by the PM, the Reserve Bank of India (RBI) announced certain changes to the ATM facility offered to bank customers and the charges levied for withdrawals through ATMs with effect from 1 November, 2014.
What are the changes introduced by RBI for ATM withdrawals?
The present rules for ATM withdrawals are as under:
1. At present every ATM card holder could withdraw cash from the same bank’s ATM any number of times free of all charges. For example, if you have an account with State Bank of India (SBI), you could withdraw cash or do any other non-cash transactions from ATMs of SBI any number of times in a month with out any charges.
2. Secondly, at present, you can transact or withdraw cash from other banks’ ATMs also, but only five times a month without any charges. For withdrawals beyond five times in a month, you are being charged Rs.20/- plus service tax for every such withdrawal.
3. These rules are applicable even for non-financial transactions, like using the ATMs forbalance enquiry and seeking details of last five transactions in your account. In short, usage, for any purpose, of ATMs of your own bank where you maintain your account is totally free, but you can use other banks’ ATMs also for  maximum of five times in a month without any charges.

Click Here for the detailed story from MoneyLife

Conned Indian Financial Consumer

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As these examples from Moneylife Foundation’s Helpline show, the consumer has little chance of being treated fairly by companies, regulators and intermediaries

Mr Mallick from Sambalpur in Orissa runs an NGO. He has 17 insurance policies, sold to him by eight banks through their Bankassurance partners, with large premiums. He claims to have borrowed funds from various banks for a project (which we gather involves lending to the rural poor like a banking correspondent) and was persuaded to buy insurance policies. Since Mr Mallick’s English is poor, it is not clear if there was coercion; he alleges ‘gross mis-selling’.

The real question is: Why would anyone, in his right senses, buy 17 insurance policies and commit to the payment of such high premiums? We believe he was made false promises by his bankers, taking advantage of his financial illiteracy. Like Suchitra Krishnamoothi, he too made the mistake of trusting his bankers and did not suspect that they would mislead him.

Moneylife Foundation took up the issue of mis-selling of third-party financial products with RBI governor, Dr Raghuram Rajan. We are most upbeat that Dr Rajan, once he applies his mind to the issue, will begin to see how people’s finances are decimated by bankers who prey on their ‘trust’.

We are especially heartened by the speed with which he has directed banks not to levy penalties for failure to maintain minimum balances on inoperative accounts. He has also implemented the long-pending demand to scrap foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, through a directive.

Click Here to read the full article by Sucheta Dalal.

 

When can a Bank Close your Safe Deposit Locker (India)

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Normally bank lockers are opened for the safe keeping of valuable confidential documents, gold and precious ornaments.   The bank lockers will give a sort of comfort to the locker holders with total peace of mind.  The main features and benefits of safe deposit lockers are convenient, safe and private way of keeping valuables secure and facility to deposit or retrieve valuables at any time during the banking hours.  
But please remember to operate your bank lockers at least once in a year (base on the customer risk category) otherwise your bank can open your safe deposit locker and allot the same to another customer. The RBI direction related to unoperated bank lockers are given below
“Where the lockers have remained unoperated for more than three years for medium risk category or one year for a higher risk category, banks should immediately contact the locker-hirer and advise him to either operate the locker or surrender it. This exercise should be carried out even if the locker hirer is paying the rent regularly. Further, banks should ask the locker hirer to give in writing, the reasons why he / she did not operate the locker. In case the locker-hirer has some genuine reasons as in the case of NRIs or persons who are out of town due to a transferable job etc., banks may allow the locker hirer to continue with the locker. In case the locker-hirer does not respond nor operate the locker, banks should consider opening the lockers after giving due notice to him. In this context, banks should incorporate a clause in the locker agreement that in case the locker remains unoperated for more than one year, the bank would have the right to cancel the allotment of the locker and open the locker, even if the rent is paid regularly. “
RBI direction is very clear, even if you pay your locker rent regularly, the bank has got every right to open the locker and allot this to another customer, if you failed to operate your bank locker within the time limit prescribed by RBI
So please keep in mind that, you should operate your bank locker at least once in a year (as per the risk category) even if there is nothing to deposit or withdraw from your bank safe deposit locker.  The simple solution is to visit your bank locker once in a year and open and close it and also once in a while ensure that the contents stored in the locker is in order.  Please ensure to obtain a copy of the safe deposit locker agreement and read all terms and conditions carefully.
Note: RBI rules related to opening and operating of Bank Safe Deposit lockers are subject to change. Please contact your bank for more information and guidance.  This article is just for the general information of the readers.
Courtesy : Noshir Parlewalla

Scribbled notes – RBI

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RBI: Scribbled notes are acceptable

Mumbai: Banks will continue to accept currency notes that are scribbled on, the Reserve Bank of India (RBI) said on Tuesday, dismissing rumours that it has stopped banks from accepting such notes from Wednesday.

“In the wake of rumours circulating in the market that from January 1, 2014, banks will not accept banknotes with anything written on them, the RBI has urged members of public not to fall prey to such rumours and to use their banknotes without any fear,” RBI said in a notification.

However, it reiterated that writing or scribbling on banknotes works against its ‘clean note policy’ and sought co-operation from public and institutions in keeping the banknotes clean.

Are you angry about being harassed by Bank services?

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Are you angry about being harassed by Bank services? Are you worried about Bank charges being too high?

This is a rare opportunity to voice your concerns and share all your issues relating to banking services. Don’t Miss It!

Open House

 with Dr KC Chakrabarty, Deputy Governor, Reserve Bank

Dr Chakrabarty, one of RBI’s Deputy Governors, has had a banking career spanning over three decades. Previously, he was the CMD of Punjab National Bank and Indian Bank for two years each and also the chairman of the Indian Banks’ Association (IBA). Dr Chakrabarty is the central bank’s nominee on the Financial Stability Board. He is closely associated with many institutes, organisations, committees and working groups like National Housing Bank, Confederation of Indian Industry (CII), National Institute of Bank Management (NIBM), Indian Institute of Banking & Finance, etc.

Contact: Seraphina / Shilpa at 022-49205000
or email us at foundation@moneylife.in
or log on to foundation.moneylife.in

 

Monday, 3 June 2013 – 6 pm

Opening remarks
by Dr Chakrabarty and Open House for interaction:
6:30pm to 8:30pm
Venue:
Walchand Hirachand Hall, 4th floor,
Indian Merchants’ Chamber, IMC Marg,
Mumbai – 400 020. Opposite Churchgate station.
No Admission Fee, Prior registration is a must

Levy Cheque return charges only if customer is at fault

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RBI/2012-13/493
DPSS.CO.CHD.No. 2030/03.06.01/2012-2013

May 7, 2013

The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including RRBs /Local Area Banks
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks

Madam / Dear Sir,

Delay in re-presentation of technical return cheques and levy of charges for such returns

As you are aware, banks are expected to indicate the timeline for realisation of local/outstation cheques in their Cheque Collection policy(CCP) and charges for cheque returns to be levied in an upfront manner with due prior notice to the customers as enumerated in RBI circulars no. DPSS.CO. (CHD) No. 873 / 03.09.01 / 2008-09 dated November 24, 2008 and DBOD.No.Dir.BC. 56 /13.03.00/2006-2007 dated February 2, 2007 respectively.

2. However, recently, instances have been brought to our notice where banks are (i) levying cheque return charges even in cases where customers have not been at fault in the return and (ii) delaying the re-presentation of the cheques which had been returned by the paying banks under technical reasons. Both of these issues result in unsatisfactory customer service.

3. It is, therefore, considered necessary to streamline the procedure followed by all banks in this regard. Accordingly, banks are advised to adhere to the following instructions with immediate effect:

1.                     Cheque return charges shall be levied only in cases where the customer is at fault and is responsible for such returns. The illustrative, but not exhaustive, list of returns, where the customers are not at fault are indicated in the annex.

2.                     Cheques that need to be re-presented without any recourse to the payee, shall be made in the immediate next presentation clearing not later than 24 hours(excluding holidays) with due notification to the customers of such re-presentation through SMS alert, email etc.

4. Banks are accordingly advised to reframe their CCPs to include the procedures indicated in paragraph 3(i) and 3(ii) above, and may note to give publicity to their revised CCPs for better customer service and dissemination of information.

5. The above instructions are issued under Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

6. Please acknowledge receipt and confirm compliance.

Yours faithfully,

(Vijay Chugh)
Chief General Manager

Annex

Illustrative but not exhaustive list of objections where customers are not at fault

(Applicable for Instrument and Image-based Cheque Clearing as detailed in Annexure D to Uniform Regulations and Rules for Bankers’ Clearing Houses)

Code No.

Reason for Return

33

 Instrument mutilated; requires bank’s guarantee

35

 Clearing House stamp / date required

36

 Wrongly delivered / not drawn on us

37

 Present in proper zone

38

 Instrument contains extraneous matter

39

 Image not clear; present again with paper

40

 Present with document

41

 Item listed twice

42

 Paper not received

60

 Crossed to two banks

61

 Crossing stamp not cancelled

62

 Clearing stamp not cancelled

63

 Instrument specially crossed to another bank

67

 Payee’s endorsement irregular / requires collecting bank’s confirmation

68

 Endorsement by mark / thumb impression requires attestation by Magistrate with seal

70

 Advice not received

71

 Amount / Name differs on advice

72

 Drawee bank’s fund with sponsor bank insufficient(applicable to sub-members)

73

 Payee’s separate discharge to bank required

74

 Not payable till 1st proximo

75

 Pay order requires counter signature

76

 Required information not legible / correct

80

 Bank’s certificate ambiguous / incomplete / required

81

 Draft lost by issuing office; confirmation required from issuing office

82

 Bank / Branch blocked

83

 Digital Certificate validation failure

84

 Other reasons-connectivity failure

87

 ‘Payee’s a/c Credited’ – Stamp required

92

 Bank excluded

Mis-selling by banks

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Will this 79-year old’s protest move the government and the RBI to stop mis-selling by banks?

When a banker comes to your home, exploits your trust and dupes you, he is called a bankster. Why doesn’t such systematic criminal exploitation of hapless depositors move the government and the banking regulator? This 79-year old has resorted to Gandhigiri to get justice

In the past couple of days 79-year old Mangelal Sharma goes to his bank (IndusInd Bank, Preet Vihar Branch, New Delhi) wearing a specially made T-shirt. It carries his photograph and says “BEWARE IndusInd Bank is a cheat. It has cheated me and may cheat you”. He says there was a lot of commotion when he first walked in and some said that they too had been cheated by the bank. On Saturday he wore the T-shirt and danced at the branch singing “Kya mil gaya sirkar toomhen meri FD (fixed deposit) toodake, mujhe mutual fund mein fansa ke, mujhe choona lagakey”. This parody of this song from the film Kissa Kursi Ka has Mr Sharma asking the bank what it achieved by entrapping him to invest in a mutual fund.

The story behind this protest will make you furious. It is about how banks have turned into banksters and send out armies of managers to entrap, con and lure trusting account holders to invest their saving in instruments that earn them a high return.

 Click Here for this scary story of scamster banks cheating senior citizens

RBI extends deadline for withdrawing non-CTS 2010 cheques by four months

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RBI extends deadline for withdrawing non-CTS 2010 cheques by four months

All cheques currently with customers in the old format (non-Cheque Truncation System) will continue to be valid for another four months till 31st July, the RBI circular said

The Reserve Bank of India (RBI) on Monday asked banks to issue new CTS2010 compliant cheque books under the new format and gave them time till July-end to withdraw the old format cheques.

All cheques currently with customers in the old format (non-Cheque Truncation System) will continue to be valid for another four months (the earlier deadline was 31stMarch), the apex bank said.

The RBI also said the system of post-dated cheques and payment via equated monthly instalment (EMI), in either the old or new format, will be banned from now wherever electronic debit facilities are available.

Click Here for the RBI Circular

 

Shocking Disclosures

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Cobrapost’s Shocking  Mega Expose: Major Indian Private Sector Banks, HDFC Bank, ICICI Bank and Axis Bank, Are Blatantly Running A Huge Nation-wide Money Laundering Racket  –

A Cobrapost pan-India undercover investigation spanning several months, unearths a vast, nation-wide money laundering racket being run by HDFC Bank, ICICI Bank and Axis Bank.  The brazen criminal activity by these banks is channelizing vast amounts of black money into the regular banking system as laundered white money.

See more at: http://www.cobrapost.com/index.php/news-detail?nid=138&cid=25#sthash.zQqyBCrn.dpuf