Month: September 2021

Kerala High Court asks Dhanlaxmi Bank to adjourn AGM

Banking & Finance

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Dhanlaxmi BankThe petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

The Kerala High Court on Wednesday directed Dhanlaxmi Bank to refrain from concluding the annual general meeting scheduled for Wednesday (September 29). The single bench of the high court gave an interim order directing the bank to adjourn the AGM to a day after one month after transacting the businesses included in the agenda for the meeting.

The order by Judge PB Suresh Kumar came following a writ petition filed by KN Madhusoodanan, a shareholder of the company, P Mohanan and Prakash DL, seeking a direction to the respondents — the RBI and Dhanlaxmi bank — to discharge their statutory responsibilities under Section 160 of the Companies Act to inform the members about the candidature of the petitioners for the office of the director as mandated under Section 160(2) of the Companies Act.

The board of the bank arbitrarily rejected the applications of all five candidates, including prominent shareholder Ravi Pillai (B Ravindran Pillai) and former independent director PK Vijayakumar, filed under Section 160 of the Companies Act, a highly-placed source told FE. The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

“The HC interim order has upheld the importance of shareholders in appointing directors. The bank rejected applications without any valid reasons. The AGM is supreme for any company, including banking company. Some of the directors who came to that position with the votes of majority shareholders are now behaving as if they were made directors by some other authority, and not by shareholders. The interim order of HC is an eye opener for all who try to belittle importance of shareholders in the administration of any company,” PK Vijayakumar said.

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Soiled notes taking more space than usable ones, banks tell RBI, BFSI News, ET BFSI

Banking & Finance

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Banks have conveyed to the Reserve Bank of India (RBI) that soiled notes are occupying more space in chests than the issuable currency, seeking an urgent intervention. Even as overall cash in the system has gone up, soiled notes are occupying more space, a senior bank executive said, suggesting an increase the chest cash holding limits till the soiled currency notes are lifted.

“RBI can take a policy decision for increasing the cash holding limits of currency chests if the soiled currency notes exceed a certain percentage, say, 60% of chest space,” the banker said.

RBI regional offices can hand out approvals for increasing the cash holding limits, the person said. The central bank has embarked on a ‘clean note policy’, which includes retrieval and processing of banknotes received from currency chests and destruction of soiled banknotes in an automated manner.

According to the RBI annual report, there was a higher than average rise in banknotes in circulation in 2020-21 primarily due to precautionary holding of cash by the public due to the Covid-19 pandemic.

The value and volume of banknotes in circulation increased by 16.8% and 7.2%, respectively, during 2020-21, as per the report. In value terms, the share of Rs 500 and Rs 2,000 banknotes together accounted for 85.7% of the total value of banknotes in circulation as on March 31, 2021, against 83.4% a year earlier. The report further said the pandemic also affected disposal of soiled banknotes although it was expedited during the latter part of 2020-21.

“Despite efforts, the year as a whole still witnessed a 32% decline in the disposal of soiled banknotes as compared to the previous year,” the report noted. At present, there are 3,054 currency chests of which 55% are with the State Bank of India (SBI).

“We anticipate that as the informal economy gathers pace as the country emerges from the shadow of the Covid-19 pandemic, there will be a greater demand for currency notes,” a second bank executive said.

Some industry participants suggest that the central bank should comprehensively update its currency chest policy. “They should allow private third party non-banking entities to operate currency chests for greater cost efficiency,” said Rituraj Sinha, group MD at private security firm SIS India.

RBI is in the process of introducing varnished banknotes in Rs 100 denomination on a field trial basis with a view to elongate the life of the banknotes.



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Rajesh Dahiya quits Axis Bank, to pursue ESG initiatives, BFSI News, ET BFSI

Banking & Finance

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Axis Bank executive director and strategy head Rajesh Dahiya has quit the private lender to pursue work in theEnvironmental, Social, and Governance (ESG) sector. Dahiya who will be associated with the bank in his current role till December 31, 2021, will continue to participate in the social work carried out by Axis Foundation. Dahiya who has quit his executive role at the lender, has sought early retirement from the services of the bank, to pursue personal and professional interests outside his executive corporate career.

“I have requested the Axis Bank board to be redeemed from the executive position at the bank, but I will continue to be associated with the bank in various other capacity, like I will continue to be on the board of Axis Bank foundation and a few other bank subsidiaries including Max board,” Rajesh Dahiya, ED, Axis Bank told ET. “I will continue to lead the sustainability initiative for the bank.”

Dahiya has consented to be closely associated with the Bank through specific projects and assignments. He will continue as a key board member for associates & subsidiaries including Axis Bank Foundation, Axis Trustee and Max Life.

Dahiya had joined the Bank in June 2010, after a successful stint of 20 years across various group companies of the Tata Group. During his over 11 years stint with the Bank, he has worked in various Corporate functions and was last responsible for Corporate Centre of the Bank as Executive Director on the Board of the Bank.

“I have devoted a large part of the last 10 years in the social sector and want to spend some time and my personal resources directly working with rural India, women livelihood and sustainability,” Dahiya said.



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Kerala HC stays conclusion of Dhanlaxmi Bank’s AGM, BFSI News, ET BFSI

Banking & Finance

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KOCHI: The high court of Kerala through an interim order stayed the conclusion of the AGM of Thrissur-headquartered Dhanlaxmi Bank, which had been scheduled to be held on Wednesday.

Four stakeholders – one of them a former board member and three who expressed their interest to become board members – had filed the plea to stay the conclusion of the AGM.

The petitioners were P K Vijayakumar, former director of the bank, KM Madhusoodanan, P. Mohanan and Prakash DL.

“In the light of the discussion aforesaid, having regard to the peculiar facts of this case, I deem it appropriate to pass an interim order directing the Bank to refrain from concluding the Annual General Meeting scheduled for today. Ordered accordingly. It is made clear that this order will not preclude the Bank from transacting the businesses included in the agenda for the meeting. Needless to say that after transacting the businesses included in the agenda for the meeting, the meeting shall be adjourned to a day after one month. The Bank would be free to issue appropriate communication to the Securities and Exchange Board of India concerning the businesses transacted in the Annual General Meeting,” the High Court order said.

The petitioners had alleged that the Annual General Meeting of the Bank, scheduled to take place on 29.09.2021 and that they were informed that the Board has decided on 20.09.2021 not to place the notices issued by the petitioners under Section 160 of the Act in the ensuing Annual General Meeting of the bank or any adjournment thereof.

The Nomination and Remuneration Committee (the NRC), constituted in terms of Section 178 of the Companies Act, 2013 (the Act), after conducting due diligence, had recommended to the Board of Directors of the Bank to appoint two of the petitioners as the Directors of the Bank. And, according to the Companies Act, once the NRC of the Bank makes a recommendation, it is obligatory on the part of the Board to place the recommendation before the General Meeting of the Bank for appropriate decision. It is stated that since the Board has not acted upon the recommendation of the NRC to appoint petitioners 2 and 3 as Directors, they have given notice under Section 160 of the Act signifying their candidature as Directors of the Bank.



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Auto debit instructions won’t work from tomorrow, banks ready new system, BFSI News, ET BFSI

Banking & Finance

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From tomorrow, your standing instructions for bill payments to your bank won’t be honoured, till the bank develops an alternate system.

A huge number of credit and debit card users set auto payment instructions for utility services ranging from electricity and gas and subscription services for music, movies and other media. The new rules may lead to lead to chaos for millions of users.

Dashing messages

Banks are sending communications to customers saying that they will not process the recurring payments and customers will have to make payments directly to merchants.

“Attention! From 1st Oct’21, as per RBI guidelines on e-Mandate on cards, we will decline Non Compliant recurring txn at Merchant Web/App on your Credit/Debit Card. Alternate Solution – Retry regular payment on Merchant Web/App authenticated via OTP or Pay via AutoPay in BillPay on our NetBanking for your Electricity /Water/Gas/ Landline/Postpaid mobile/Broadband/Insurance billers,” said a message to customers by HDFC Bank.

Banks and payment aggregators are rushing to meet the October 1 deadline for implementing a new system for standing instructions for recurring online transactions as RBI may not extend it.

“In compliance with the regulatory requirements, we are currently building a solution to seamlessly manage all your domestic standing instructions for recurring payments. This solution will be available soon for you. Starting October 1, any existing standing instruction for domestic and international recurring transactions on your card account will not be processed. We request you to make these payments directly to the service providers to avoid any interruptions,” American Express said in a recent message to customers.

How does the new system work?

Under the proposed system, as a risk mitigating and customer facilitation measure, the card-issuing bank will have to send a pre-transaction notification to the cardholder, at least 24 hours before the actual charge or debit to the card. While registering e-mandate on the card, the cardholder shall be given the facility to choose a mode among available options (SMS, email, etc.) for receiving the pre-transaction notification from the issuer. On receipt of the pre-transaction notification, the cardholder shall have the facility to opt-out of the particular transaction or the e-mandate. For transactions above Rs 5,000, banks will also be required to send one time passwords to customers.

What is a standing instruction?

A standing instruction is a service offered to customers of a bank, wherein regular transactions that the customer wants to make are processed as a matter of course instead of initiating specific transactions each time.

This service relates to transactions like renewing subscription to OTT platforms, newspapers and magazines, and utility bill payments.

The issue

Large lenders and payment entities including State Bank of India, ICICI, Citi, HDFC, Axis, HSBC, Visa and Mastercard had asked the Reserve Bank of India (RBI) to postpone the deadline for putting in place a new system to alert customers on ‘standing instruction’ transactions.

The banks were asked to set up the system by March 31, 2021.

The lenders also wanted RBI to exclude transactions against pre-existing standing instructions and those with international merchants from the new conditions for e-mandates on cards for recurring transactions.



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RBI adds ‘displeasure’ notes to regulatory action against banks, BFSI News, ET BFSI

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Along with taking penal action against banks, the Reserve Bank is making its displeasure over their functioning known to them.

The central bank has been issuing ‘displeasure’ letters to expressing dissatisfaction over their functioning, according to a report. These letters are issued by the Department of Supervision, which does not take any enforcement action.

The intent of these letters is not to interfere in the functioning of the banks, but to suggest changes that are deemed necessary for course correction. The letters have had the desired effect and prod the boards to make necessary changes.

Regulatory action

The Reserve Bank of India (RBI) took enforcement action against 41 regulated entities by imposing an aggregate penalty of Rs 61.15 crore between July 1, 2019, and June 30, 2020, the bank said in its annual report.

The actions were taken against regulated entities for non-compliance of various regulations, the RBI said in its annual report. Enforcement actions were also undertaken against contravention of the directions pertaining to third-party account payee cheques; non-compliance with directions contained in risk mitigation plan (RMP); and failure to comply with the provisions of Section 10B of the Banking Regulation Act, 1949, among others.

The RBI undertook enforcement action and imposed fine for non-submission of compliance to risk assessment reports’ (RAR) findings; non-compliance with/ contravention of directions on fraud classification and reporting; not adhering to discipline while opening current accounts, etc.

As many as 26 penal actions were taken against public sector banks with an aggregate fine of Rs 38.35 crore, while eight were initiated against private sector banks with an aggregate fine of Rs 8.55 crore. With regard to cooperative banks, it said 13 penal actions were taken with imposition of Rs 9.18 crore, it said. During the period, it said, a total fine of Rs 5 crore were imposed on two foreign banks.



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HDFC Bank issues 4 lakh credit cards post-RBI ban

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The bank will relaunch its Millennia, MoneyBack+ and Freedom cards, to which it has added a host of new features and benefits.

HDFC Bank has issued 4 lakh credit cards since the Reserve Bank of India (RBI) lifted a regulatory embargo on issuance of new cards by the lender in August. The largest private bank by assets plans to relaunch three credit card products, which will be available to customers in October, it said on Wednesday.

The bank will relaunch its Millennia, MoneyBack+ and Freedom cards, to which it has added a host of new features and benefits. Creating and co-creating new card products is part of the bank’s strategy to straddle every customer segment across the Indian market, said Parag Rao, group head – payments, consumer finance, digital banking & IT, HDFC Bank.

The bank also plans to partner with other entities to expand its customer base. Last week, HDFC Bank had announced a strategic tie-up with Paytm to deliver financial solutions to consumers and merchants across the country.

“We looked at our existing 15 million customers and how we could show them much more value. We are thankful to these customers for being with the bank and we would like to reward them by revamping and relaunching a couple of our products so that they get far more value than before,” Rao said.

The Freedom card is targeted at consumers who have just started earning and are used to making online purchases. Meant for first-time job-seekers, it will offer credit limits ranging between Rs 15,000 and Rs 50,000. The MoneyBack+ credit card is aimed at middle-class families seeking value on their everyday spends. The Millennia card is meant for the affluent, tech-savvy consumer in the age group of 25 to 40 years. The refashioned card will offer cashbacks on spends on shopping, dining, entertainment and travel.

“Our research over the last 15-20 years and a lot of customer feedback tells us that once you cross the first three-four years of credit card usage, your requirements become more fine-tuned and sharper. Some customers love reward points, some love cashbacks, discounts and deals,” Rao said. Over the next three to four quarters, HDFC Bank will gain back its market share in the number of cards in force, he added.

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Reserve Bank of India – Annual Report

Publications

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April 14, 2015




Dear All




Welcome to the refurbished site of the Reserve Bank of India.





The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.




With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.




The site can be accessed through most browsers and devices; it also meets accessibility standards.



Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.



Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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Indian Bank’s festive campaign offers special rates to boost retail loan growth

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Customers can benefit from interest rates as low as 6.80% per annum for home loans while new car loans are now available starting at 6.90% per annum for customers with a CIBIL score of over 750.

In a bid to boost retail sector loan growth in the wake of upcoming festive season, Indian Bank on Wednesday announced the commencement of its Utsav Dhamaka campaign. The campaign gives special offers on home loan, vehicle loan and non-priority jewellery loan products for retail customers. The campaign and all offers will be applicable till the end of 2021 across the country.

Highlights of the campaign include relaxation in the rates of interest for home loans, vehicle loans and jewellery loan schemes along with a blanket 100% waiver of processing charges.

Customers can benefit from interest rates as low as 6.80% per annum for home loans while new car loans are now available starting at 6.90% per annum for customers with a CIBIL score of over 750.

For non-priority jewellery loan products, Indian Bank is offering loans for a tenure of up to 35 months at a fixed interest rate of 8% p.a for all categories of customers, including senior citizens. With such attractive lending rates on offer, Indian Bank is aiming to bring more customers under its fold, and provide a significant boost to customer confidence especially in the upcoming festive period, the bank said in a release.

Vikas Kumar, GM, retail assets, said, “Being one of the largest PSU banks in the country, Indian Bank has been at the forefront in implementing measures and schemes intended at reviving the Indian economy since the onset of the Covid-19 pandemic last year. With the upcoming festive season holding promise, we have launched the campaign with the objective of providing capital to retail customers for their consumption needs at attractive interest rates and value add-ons.”

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