Despite directions from RBI, banks refuse to share details of the entity sending money through NEFT

The National Electronic Fund Transfer (NEFT), used by almost everyone to transfer money quickly, can also put the receiver in a difficult position. The main reason is, there are no details available about the remitter or sender and if the amount is large, then the recipient may end up facing Income Tax (I-T) Department queries. Remember what happened with Aishwarya Rai, when in 2006 she received a parcel containing 23,000 euros (around Rs14 lakh at that time) sent by an unknown person from the Netherlands?

Well, with banks hesitating in sharing details of the person or entity who is transferring money via NEFT, it may be you next time. Although the Reserve Bank of India (RBI) has directed banks to furnish appropriate details in passbook or account statement for credits sent and received by the customer through NEFT, all the recipient gets is just a name and amount. “A very generic mention as ‘NEFT’ or ‘NECS’ does not help customers in identifying the source of credits, particularly where multiple credits are afforded to their accounts through these products. The Core Banking Solutions (CBS) of banks should be enabled to capture complete information from the relevant fields in the messages, data files which can be displayed to customers when they access their accounts online or provided to them additionally when they approach the branch counters, help desks, call centres,” the RBI had said.

However, all the recipient gets to know is just a name. There are no details like sender’s PAN number, address and the cause/remark for the money transfer.

Often money launderers are found using bank accounts of low-income individuals for transferring money. In addition, due to the forceful implementation of the Jan Dhan Yojana, we have about 10 crore new bank accounts, out of which 73% do not have a single penny. But consider that tomorrow, if somebody uses these accounts to launder money, then without detailed information about the remitter, how is a poor Kalawati supposed to answer queries from the authorities, including but not limited to I-T department. In the absence of detailed information about the remitter, how will she explain the unaccounted money remitted into her account through NEFT?

Receiving funds from unknown remitters becomes an even bigger issue for non-governmental organisations (NGO), who need to give a receipt as well as I-T exemption certificate. If there is just a name of the remitter, how and where is an NGO, like Moneylife Foundation, supposed to send the receipt?

Another issue with NEFT fund transfer is the delay. According to RBI policy, banks need to afford credits to beneficiary accounts or return transactions (uncredited for whatever reason) to the originating / sponsor bank within the prescribed timeline. It also directed banks to move towards hourly settlement starting from 9am to 7pm on all week days and between 9am to 1pm on Saturdays. Yet, it appears that banks are still using the last part of the work-day or first hour of the next day for NEFT transactions.

Coming back to the Aishwarya Rai episode, the actor was grilled by the Customs official for two-and-a-half hours at the international airport as soon as she landed in Mumbai from Jodhpur. The parcel was allegedly sent by one Avineshwar from the Netherlands marked to the actress. It arrived at the Foreign Post Office in Mumbai during September 2006. Besides the currency, it also contained a top-brand shirt, a pair of binoculars, a DVD player and other electronic items. Following a notice, Aishwarya’s father Krishnaraj Rai, on 15th November met Custom officials to clarify her position. However, the officials insisted to know details from Aishwarya, due to which the actor had to come to Mumbai to clarify her position. She was shooting for the movie ‘Jodha Akbar’ in Jodhpur at that time. After the enquiry, she was give a temporary clean chit by the Customs.

Therefore, it is high time the central bank issues another order mandating banks to share all details of the remitter who is sending money through NEFT or any other payment method to the recipient and actually penalises banks if there are persistent complaints about flouting the RBI’s order.

Courtesy : MoneyLife Foundation

http://www.moneylife.in/article/receiving-money-through-neft-can-put-you-in-trouble/40102.html

Bank on the go even without an internet connection on your mobile phone. Presenting the new USSD (*99#) service, through this, you can check your:

To know more, click here

Please note: the USSD service is not restricted to Kotak Bank alone. All accounts of different banks linked to your registered mobile number can be checked through this service using the bank’s IFSC. The USSD service works only on GSM mobile phones and with select telecom operators. Kotak Mahindra Bank does not charge any fees for this service. However, call charges as applicable may be levied by telecom operators.

While the banks have considerably benefitted from the introduction of CBS, the customers of banks have yet to reap the benefits

How banks have benefitted from introducing the core banking solution -CBS?

With the introduction of CBS, the cost of servicing customers went down considerably for banks, besides helping them to improve their capability to service a large number of accountswith minimum cost as evidenced by the following facts and figures.

Table: 1- Growth of business of all scheduled commercial banks (SCBs) and their employee position for fifteen years from 1983 to 1998 (before introduction of CBS)

As stated in the tables above, while the business of banks grew exponentially, the number of employees went up marginally, thereby saving them huge manpower expenses with attendant benefits of lower capital cost on infrastructure. The banks, however, needed to invest onhardware and software on a regular basis, but this was much less compared to the total savings in work force cost on a continuous basis year after year.
On the other hand, customer service started deteriorating slowly, and the biggest casualty of CBS is the personal relationship between banker and customer. For every hiccup in service quality, banks started blaming computers and expressed helplessness in servicing customers across the counters.

Click Here for the full story at MoneyLife

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

Enclosed is the list of Banks, whose statements / Pass Books are accepted as address proof for Passport creation / renewals

List_of_banks_for_address_proof

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? 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.

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