Measures taken to facilitate digital banking

Posted on 28th Jul 2021 by Business So Simple in Banking

Measures taken to facilitate digital banking

Nearly 72% of financial transactions of PSBs done through digital channels

Active customers doubled on digital channels from 3.4 crore in FY 2019-20 to 7.6 crore in FY 2020-21

Financial transactions undertaken through home and mobile channels increased from 29% in FY 2018-19 to 76% in FY 2020-21

The Government has taken a number of steps to facilitate digital banking, doorstep banking services and digital lending platforms. This was stated by Union Minister of State for Finance Dr Bhagwat Kisanrao Karad in a written reply to a question in Rajya Sabha today.

Giving details of the steps, the Minister stated that these include, inter-alia, the following:

Initiation of digital lending has been made contactless through PSBloansin59 minutes.com, using triangulation of credit bureau, income-tax and goods and services tax (GST) data, to provide online in principle approval for MSME loans.
Online bill discounting for MSMES has been enabled on a competitive basis through Public Sector Banks (PSBs) onboarding onto the Trade Receivables Discounting System (TReDS) platform and the proportion of online discounted bills has grown rapidly.
Government’s Jeevan Pramaan’ initiative for pensioners has enabled senior citizen pensioners the facility to update their annual life certificate online.
Under the Government-initiated PSB Reforms Agenda,-

Enhanced access to Mobile and Internet banking has been enabled through an increase in the average number of services offered (43), customer-friendly features (135) and regional language customer-interface (8);
End-to-end automated digital lending has been introduced in larger PSBs for unsecured personal loans (in five PSBs), loans to micro-enterprises (“Shishu Mudra”, in five PSBs) and renewals of loans to micro, small and medium enterprises (in three PSBs);
Digital retail loan request initiation through digital channels has been enabled in all the seven large PSBs, with retail disbursements from loan requests so initiated in the financial year (FY)2020-21 amounting to Rs. 40,819 crore;
Customer-need-driven, analytics-based credit offers have been given an impetus, resulting in Rs. 49,777 crore of fresh retail loan disbursements by the seven larger PSBS in the financial year (FY) 2020-21.

As a result, the Minister stated, nearly 72% of financial transactions of PSBs are now done through digital channels, with doubling of customers active on digital channels from 3.4 crore in FY2019-20 to 7.6 crore in FY2020-21, and the share of financial transactions undertaken through home and mobile channels has increased from 29% in FY2018-19 to 76% in FY2020-21.

PSB Alliance, an initiative of all PSBs and Indian Banks’ Association, has launched doorstep banking services for all customers, including senior citizens, through call centre (1800-121-3721 and 1800-103-7 188), web portal (https://psbdsb.in/ and https://doorstepbanks.com/) mobile app (Google Play Store). At present 13 services are being offered in 100 cities across the country, which include cash withdrawal or deposit, pick-up of cheque or demand draft or pay order etc., pickup of cheque-book requisition slip, pickup of income-tax forms no. 15G/15H, pick up of income-tax/GST challan, and delivery of tax deduction at source (TDS) and Form- 16 certificates for income-tax purposes.

The Minister further said that there is no proposal under consideration of the Government for setting up of a Digital Banking Infrastructure Corporation (DBI). As per inputs from banks, some PSBs have held discussions to set up a corporation to create a common digital infrastructure platform as a joint initiative of the banks, with a view to enable enhanced access to consumers and businesses for credit offerings.

Ministry of Finance Press Release dated 27 July 2021

India’s forex reserves position comfortable for import cover of more than 18 months & provide cushion against unforeseen external shocks

Posted on 28th Jul 2021 by Business So Simple in Banking, Financial Prudence

India’s foreign exchange reserves position is comfortable in terms of import cover of more than 18 months and provides cushion against unforeseen external shocks. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha today.

Weather the reserve funds are adequate to meet the international payment obligations, the Minister said that the ratio of forex reserves to total external debt stood at 101.2 per cent and short-term external debt to forex reserves stood at 17.5 per cent as at end-March 2021. The ratio of volatile capital flows (including cumulative portfolio inflows and outstanding short-term debt) to reserves was 67.0 per cent at end-December 2020. India is comfortable in most of the external sector vulnerability indicators.

Giving details of India’s foreign exchange reserves in last five years, the Minister tabled the following data:

India’s Foreign Exchange Reserves

Year

Foreign Exchange Reserves

(US$ Billion)

2016-17

370.0

2017-18

424.5

2018-19

412.9

2019-20

477.8

2020-21

577.0

9^th July 2021

611.9

Source: RBI

Speaking on the international currencies in our forex reserve, the Minister said the foreign currency assets, constituting more than 90 per cent of India’s forex reserves, are maintained as a multi-currency portfolio comprising major currencies, such as, US dollar, Euro, Pound sterling, Japanese yen, etc.

Ministry of Finance Press Release dated 27 July 2021

Comprehensive measures taken to curb incidence of frauds in Banks

Posted on 28th Jul 2021 by Business So Simple in Banking, Financial Prudence, Public Affairs

As per the information received from RBI, the number of cases of frauds of Rs 500 crore and above reported by Public Sector Banks/ Indian Banks (Except Foreign Banks) / Select Financial Institutions are 79 cases in 2019-20, 73 cases in 2020-21 and 13 cases in 2021-22 (up to 30th June 2021). This was stated by Union Minister of State for Finance Dr Bhagwat Kisnrao Karad in a written reply to a question in Rajya Sabha today.

The Minister further stated that the RBI Master Circular on Frauds, 2015, observes that frauds are committed by unscrupulous borrowers by various methods including, inter alia, fraudulent discount of instruments, fraudulent disposal of pledged /hypothecated stocks, fund diversion, criminal neglect and mala fide managerial failure on the part of borrowers. The Master Circular also refers to certain other methods, which include forged instruments, manipulated account books, fictitious accounts, unauthorized credit facilities, fraudulent foreign exchange transactions, exploitation of “multiple banking arrangement”, and deficiency on the part of third parties with role in credit sanction/disbursement.

Giving details of the steps the Government has taken comprehensive measures to curb the incidence of frauds in banks, the Minister said, they include, inter-alia, the following:

Government has issued “Framework for timely detection, reporting, investigation etc. relating to large value bank frauds” to Public Sector Banks (PSBs), for systemic and comprehensive checking of legacy stock of their non-performing assets (NPAs), which provides, inter-alia, that-

all accounts exceeding Rs. 50 crore, if classified as NPAs, be examined by banks from the angle of possible fraud, and a report placed before the bank’s Committee for Review of NPAs on the findings of this investigation;
examination be initiated for wilful default immediately upon reporting fraud to RBI; and
report on the borrower be sought from the Central Economic Intelligence Bureau in case an account turns NPA.
Fugitive Economic Offenders Act, 2018 has been enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. The act provides for attachment of property of a fugitive economic offender, confiscation of such offender’s property and disentitlement of the offender from defending any civil claim.
PSBs have been advised to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore and, decide on publishing photographs of wilful defaulters, in terms of Reserve Bank of India (RBI)’s instructions and as per their Board- approved policy and to strictly ensure rotational transfer of officials/employees. The heads of PSBs have also been empowered to issue requests for issue of Look Out Circulars.
For enforcement of auditing standards and ensuring the quality of audits, Government has established the National Financial Reporting Authority as an independent regulator.
Instructions/advisories have been issued by Government to PSBs to decide on publishing photographs of wilful defaulters, in terms of RBI’s instructions and as per their Board-approved policy, and to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore.

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