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Data storage issue: RBI stops MasterCard from adding new customers

Banking & Finance

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The Reserve Bank of India (RBI) has barred MasterCard from acquiring new customers (debit, credit or prepaid) from July 22 for not complying with data localisation requirements.

In a statement, the central bank said that MasterCard is required to advise all card-issuing banks and non-banks to conform to these directions.

“Notwithstanding lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data. This order will not impact existing customers of MasterCard,” the RBI statement said.

The RBI, through an April 23 order, had imposed similar restrictions on American Express Banking Corp and Diners Club International Ltd from on-boarding new domestic customers onto their card networks from May 1.

Mandatory data storage

The central bank had made it mandatory for banks to store all the data relating to payment systems in India. For the foreign leg of the transaction, if any, the data could also be stored abroad, if required. The data includes end-to-end transaction details, information collected, carried and processed as part of the message/payment instruction.

Further, they were also required to report compliance to the RBI and submit a Board-approved System Audit Report conducted by a CERT-In empanelled auditor within a set timeline.

MasterCard did not comment on the RBI action.

The RBI action may benefit homegrown payment gateways especially those running on the UPI platform. Market experts said that there won’t be any impact on consumers as banks can switch to Visa or RuPay for issuing cards. Existing MasterCard users can continue to use their cards.

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RBI allows UCBs to refund share capital to members

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The Reserve Bank of India (RBI) plans to permit Urban Co-operative Banks (UCBs) refund the share capital to their members, or nominees/ heirs of deceased members, on demand, subject to conditions, as per its draft guidelines for issue and regulation of share capital and securities by UCBs.

Also, UCBs issuing regulatory capital instruments such as preference shares and debt instruments may be required to get a specific sign-off from the investors that they have understood the features and risks of the instruments.

On refund of share capital, the RBI said UCBs can do so only if their capital to risk-weighted assets ratio (CRAR) is 9 per cent or above, both as per the latest audited financial statements and the last CRAR as assessed bythe central bank during statutory inspection.

Banks’ CRAR

The central bank emphasised that the refund should not result in the CRAR of the bank falling below regulatory minimum of 9 per cent.

For the purpose of computing CRAR, accretion to capital funds after the balance sheet date, other than by way of profits, may be taken into account. Any reduction in capital funds, including by way of losses, during the aforesaid period will also be considered.

The RBI said that for floating rate instruments, banks cannot use their Fixed Deposit rate as benchmark. UCBs have to obtain a specific sign-off from investors, stating that they have understood the terms and conditions of the issue of the share/security being issued by the bank as disclosed in the Prospectus and Offer Document.

These banks need to ensure that all the publicity material / offer document, application form and other communication with the investor clearly state how the regulatory capital instruments are different from a fixed deposit, and that these instruments are not covered by deposit insurance.

Share-linking

The RBI said share-linking to borrowing norms shall be discretionary for UCBs, which meet the minimum regulatory CRAR criteria of 9 per cent and a Tier 1 CRAR of 5.5 per cent, as per the latest audited financial statements and the last CRAR as assessed by the RBI during statutory inspection.

Such UCBs shall have a board-approved policy on share-linking to borrowing norms, which shall be implemented in a transparent, consistent and non-discriminatory manner. Currently, borrowings from UCBs are linked to shareholdings of the borrowing members – 5 per cent of the borrowings if on unsecured basis – and 2.5 per cent of the borrowings in case of secured borrowings.

The RBI said where a member already holds 5 per cent of the total paid-up share capital of a UCB, it would not be necessary for him / her to subscribe to any additional share capital on account of the application of extant share-linking norms.

In other words, a borrowing member may be required to hold shares for an amount that may be computed as per the extant share linking norms or for an amount that is 5 per cent of the total paid-up share capital of the bank, whichever is lower.

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RBI extends implementation timeline of ATM cassette swap

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The Reserve Bank of India (RBI) has extended the timeline for implementation of cassette swap in all ATMs till March 31, 2022.

This comes in the wake of the Indian Banks’ Association making a representation on behalf of various banks, expressing difficulties in meeting the March 31, 2021 timeline.

Based on the recommendations of the Committee on Currency Movement (CCM), RBI, in April 2018, had advised that banks may consider using lockable cassettes in their ATMs, which shall be swapped at the time of cash replenishment. This is aimed at mitigating risks involved in open cash replenishment/ top-up.

The RBI then said cassette swap in ATMs may be implemented in a phased manner, covering at least one third ATMs operated by the banks every year, such that all ATMs achieve cassette swap by March 31, 2021.

As at March-end 2021, banks had 2.14 lakh ATMs and white label ATM operators had 25,000 ATMs across the country.

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Bandhan Bank appoints Kamal Batra as Head–Assets

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Bandhan Bank has appointed Kamal Batra as Head – Assets to bolster its goal of building a robust and granular retail assets franchise.

The bank’s ‘Vision 2025’ envisages a well-diversified and high-quality asset portfolio, strategically spread across secured and unsecured advances. This appointment is aimed at providing the necessary leadership direction and support towards the same, said a press statement issued by the bank.

The four pillars of the bank’s asset base would comprise Emerging Entrepreneurs Business (erstwhile known as microbanking), housing finance, commercial banking and other retail assets.

Also read: Bandhan Bank acquires branding rights of Kolkata metro station

New focus

Batra will assume the responsibility for growing the bank’s commercial banking (comprising SME lending and NBFC lending) business and retail assets (comprising gold loans, personal loans, auto loans, among others) portfolios.

The growth of these verticals will help the bank capitalise on its robust liabilities franchise and cater to the needs of all customers through an entire suite of offerings spanning deposits, business and retail loans, and third-party products such as mutual funds and insurance, across physical and digital banking.

A veteran of the financial services sector with over twenty five years of experience, Batra, in his last role, was Executive Vice President and Head, Business Banking and Secured Assets at IndusInd Bank. His responsibilities included establishing the SME lending business and scaling up other businesses, including Loan Against Property, unsecured business loans, channel finance, warehouse finance and gold loans among others.

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Sharekhan Is Betting On These 2 Stocks For Returns, “Buy” Says The Brokerage

Personal Finance

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Investment

oi-Sunil Fernandes

|

India’s top broking firm Sharekhan with a significant amount of retail investors is betting on 2 stocks for long term returns. The first is the stock of Indian Hotels and the second is the stock of Mahindra Lifespace. Let’s take a look at why the brokerage is bullish on these two stocks. First let us tell readers that the markets are highly priced at these levels and hence do thorough research before investing.

According to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd equity markets so far has shown strong resilience even though it faces headwinds from the advent of a possible third COVID wave, persistent inflation readings prompting a potential rate increase, and volatility around the US Fed taper talk.

“It has been consolidating for quiet sometime due to lack of trigger. Q1FY22 earnings season has started off and would continue to provide stock specific action. Also it may give some direction to the market as investors would eye management commentary to gauge scale of economic recovery. Since restrictions this time around was localized and less stringent v/s the lockdown in CY20, we expect the impact in 1QFY22 to be contained. We expect earnings momentum to accelerate in FY22 as the pace of vaccinations picks up and the economy opens up further. Consistent earnings delivery v/s expectations are critical for further outperformance in our view,” he says.

Sharekhan Is Betting On These 2 Stocks For Returns,

Indian Hotels

Sharekhan says that Indian Hotels has a strong focus on building an asset-light model and recovery in the business environment, which will help the hotel major to recover to 80% of pre-COVID levels in FY2023 and clock strong profitability.

“In FY2022, the company is focusing on keeping its balance sheet lean with no major capital investments. Stock is currently trading at 25x its FY2023E EV/EBIDTA. Any sustained improvement in the business fundamentals and reduction in debt as planned would further re-rate the stock. We maintain a Buy recommendation on the stock with a revised price target of Rs. 182. Among hotels, Indian Hotels is one of the better plays in the unlock theme due to a relatively stable balance sheet, strong room inventory and brand recognition,” the brokerage has said.

The shares of Indian Hotels last closed at Rs 148, against Sharekhan’s target price of Rs 182. This is at least a 25% upside from the current levels.

Sharekhan Is Betting On These 2 Stocks For Returns,

Mahindra Lifespace Developers

Real estate shares are soaring and Sharekhan says to “buy” this real estate stock. The firm has set a price target of Rs 795 on the stock.

“Mahindra Lifespace Developers is poised to scale up its sales and execution over the next two to three years with a strong management team at the helm of having a credible experience in its respective fields. Further, the company is expected to benefit from the government’s relentless focus on affordable housing segments, rising affordability levels, favourable state government policies for real estate, and ample inorganic growth opportunities in the sector. The company’s low gearing (current consolidated net debt to equity at just 0.07 times with 7.1% cost of debt) can be utilised to raise debt to fund inorganic expansion and land acquisitions. Overall, we believe MLDL is poised to generate strong presales and execution ramp-up over the next 2-3 years,” the broking firm has said.

Disclaimer

Investors are advised caution before investing in the stocks above and should only invest if they are able to bear losses. Greynium Information Technologies, the author and the brokerage firm should not be held liable for any losses suffered on account of the decisions based on the above article. Please consult a professional advisor.

Story first published: Wednesday, July 14, 2021, 21:01 [IST]



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PNB moves court seeking restoration of assets of Nirav Modi’s firms seized by ED

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The Punjab National Bank (PNB) on Wednesday moved multiple applications before a special PMLA court here, seeking restoration of the assets of two firms owned by fugitive diamond merchant Nirav Modi, who is accused of duping the bank.

The bank submitted the applications before special judge V C Barde under the relevant provisions of the Prevention of Money Laundering Act (PMLA).

The Enforcement Directorate (ED) had earlier confiscated assets worth over ₹329.66 crore of Nirav Modi under the fugitive economic offenders law. The confisticated property includes assets of Firestar Diamond International Pvt Ltd and Firestar International Limited, firms owned by Modi.

Nirav Modi and his uncle Mehul Choksi, both prime accused in the case, along with others are being probed by the Enforcement Directorate (ED) on money laundering charges for allegedly perpetrating an over $2 billion (more than ₹13,000 crore) bank fraud in connivance with bank officials and by issuance of fraudulent Letters of Undertaking (LoUs) at the Brady House PNB branch in Mumbai.

The court has asked the ED to file its reply on July 28.

Nirav Modi (49) was declared a fugitive economic offender by the PMLA court in December 2019. Following that, the court had authorised the ED to confiscate the assets under the provisions of the Act. He is currently lodged in a UK jail after being arrested in London in March 2019 and is currently fighting extradition to India.

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Reserve Bank of India – Tenders

Tenders

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1. The Reserve Bank of India, Bhubaneswar intends to prepare a panel of Architects for project works costing a) up to ₹50 Lakh b) above ₹50 lakh and up to ₹100 lakh. Application are invited, in sealed envelopes, from reputed architects / firms of architects having membership of the Council of Architecture, India, requisite organizational set up, sufficient supporting staff, competence, reliability, experience, sound financial standing, satisfactory track record of execution of works awarded by their clients, integrity, credibility, fairness in dealings, etc., and fulfilling the pre-qualification criteria as described in the application form, for construction, renovation, interior decoration of office and residential buildings at Bhubaneswar.

2. Pre-Qualification criteria

Sr. No. Criteria Particulars
1. Duration of Prior Experience Should have minimum 5 years of experience of executing similar works (during last 5 years ending May 31, 2021).
2. Number of minimum works of similar nature executed Minimum three (works) of architectural / interior designing of similar nature during last 5 (five) years.
3. Minimum value of each completed work (Qualifying) Category A) Estimated cost upto ₹ 50 Lakh Category B) Estimated to cost more than ₹ 50 lakh upto ₹ 100 Lakh
  Three similar completed works each costing not less than
(OR)
Two similar completed works each costing not less than
(OR)
One similar completed works each costing not less than		 ₹ 20 Lakhs

₹ 25 Lakhs

₹ 40 Lakhs

 ₹ 40 Lakhs

₹ 50 Lakhs

₹ 80 Lakhs
4. Membership Should be a member of Council of Architecture, India with valid Registration

Note: Similar works shall mean: Work to Construction / Renovation projects of office and residential buildings including specialized work, additions/ alterations, interiors works, modular work stations & modular type kitchen, having provided comprehensive architectural services, which would broadly cover submission of plans, obtaining approval from all the concerned statutory authorities including engaging the services of consultants for other connected trades like geo-tech investigations, structural, sanitary, plumbing, electrical, etc., preparation of working drawings for all trades, preparation of tender papers and cost estimates for all the trades including interior and obtaining the occupation certificate from the local statutory authority, preferably for Government/ Semi Government Organisation / Government of India undertaking etc.

3. Interested architects fulfilling the following pre-qualification criteria can download from website / collect application forms from Estate department, RBI Bhubaneswar during July 13, 2021 to August 03, 2021. The applicants are mandatorily required to furnish details about their Organization, technical experience, technical personnel, spare capacity, competence and evidence of their financial standing as per the enclosed proforma (Part I, II & III) which will be kept confidential. Documentary evidence is a must for the provided information.

4. The application form/s attached with duly filled in the prescribed formats and the requisite documents as specified above in a sealed envelope/ cover super scribing “Application for Empanelment of Architects” shall be addressed to Regional Director, Estate Department, Reserve Bank of India, Bhubaneswar, so as to reach on or before 14:00 Hrs. on August 23, 2021. The same will be opened by a designated officer of the Bank in the presence of the applicants or their authorized representatives who choose to be present at 15:00 Hrs. on August 23, 2021.

*Separate application should be submitted for each of the categories.

Note: No request for change in last date and mentioned time will be entertained by the Bank.

5. The applicant are advised to go through the Application, its conditions and instructions thoroughly before submitting the same. Application containing false or inadequate information is liable for rejection.

6. Applicant needs to have mandatory Registration certificate issued by Council of Architects, India to be eligible for making application.

7. The panel shall remain valid for three years from the date of coming into existence subject to periodical review of performance as specified.

8. The Bank reserves the right to reject any or all the applications without assigning any reason thereof.

Regional Director
RBI, Bhubaneswar

Date: July 13, 2021

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Longevity finance: Gift-City regulator IFSCA sets up expert committee

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Gift-City regulator IFSCA has set up an expert committee to recommend approach towards development of Longevity Finance Hub in the Gift-City in Gujarat and provide a road map for the same.

The expert committee is being co-chaired by Kaku Nakhate, President and Country Head (India), Bank of America, and Gopalan Srinivasan, Ex-CMD, New India Assurance Company Limited.

The committee members comprise leaders from the entire longevity finance ecosystem including from areas such as banking, insurance, wealth management, fintech, legal, compliance and management consultancy, an official release said.

Global estimates suggest that there are one billion people in the silver generation (a global cohort of individuals aged 60 and older) with a combined spending power of $15 trillion and the size is ever expanding.

Development in medicinal science and technology will support extending of lifespan and longevity of the silver generation. It is estimated that by 2040, there will be more members of the silver generation than people under 20. This demographic change will throw open new challenges and opportunities especially in the areas of wealth management, health, insurance, and other investment products, the release added.

This has prompted the International Financial Services Centre Authority to set up an expert committee.

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Reserve Bank of India – Notifications

Notifications

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RBI/2021-22/71
DCM (Plg.) No.S39/10.25.007/2021-22

July 12, 2021

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

Madam / Dear Sir,

Cassette – Swaps in ATMs

Please refer to our circular RBI/2017-18/162/DCM (Plg.) No.3641/10.25.007/2017-18 dated April 12, 2018 on the captioned subject wherein banks were advised to consider using lockable cassettes in their ATMs which shall be swapped at the time of cash replenishment. The same was advised to be implemented in a phased manner covering at least one third ATMs operated by the banks every year, such that all ATMs achieve cassette swap by March 31, 2021.

2. In this regard, representations have been received from Indian Banks’ Association on behalf of various banks expressing difficulties in meeting this timeline. Accordingly, it has been decided to extend the timeline for implementation of cassette swap in all ATMs till March 31, 2022.

3. Banks shall monitor progress and make the required course correction at the end of every quarter, at the level of Board / ACB and report status within seven days of the end of the quarter, starting from the quarter ended September 2021, to the Chief General Manager-in-Charge, Department of Currency Management, Reserve Bank of India, Central Office, Amar Building, Fourth Floor, Sir P. M. Road, Fort, Mumbai 400 001. The said report should be sent by e-mail. No hard copy need be sent.

Yours faithfully,

(Subrata Das)
Chief General Manager-in-Charge

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RBI bars Mastercard from onboarding new customers over data storage norms, BFSI News, ET BFSI

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The Reserve Bank of India has asked Mastercard to not onboard domestic customers in India on debit, credit or prepaid platforms on to its card network from July 22, 2021.

RBI said, “Notwithstanding lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data. This order will not impact existing customers of Mastercard. Mastercard shall advise all card issuing banks and non-banks to conform to these directions. The supervisory action has been taken in exercise of powers vested in RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act).”

Mastercard is a payment system operator (PSO) authorised to operate a card network in the country under PSS Act.

As per RBI norms on Sotrage of Payments System Data dated April 6, 2018 all system providers were directed to ensure that within a period of six months the entire day which was related to payment system operated by them is stored in a system in India only.

Further, they were also required to report compliance to RBI and submit a Board-approved System Audit Report conducted by a CERT-In empanelled auditor within the specified timelines.

Previously in April 2021, RBI had barred American Express and Diners Club International from onboarding new domestic customers over non-compliance of data storage norms.



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