Tag: Customers

‘Q1 is a cautious phase as customers are on wait-and-watch mode’

Banking & Finance

[ad_1]

Read More/Less


The first quarter of the fiscal year 2021-22 will be a cautious phase with customers on a wait-and-watch mode amid localised lockdowns and surging Covid-19 cases, believes Ramesh Iyer, Vice-Chairman and Managing Director, Mahindra Finance.

“Customers have money but they want to wait for a month to see how things pan out. Up to mid-May one would be on the wait-and-watch situation and if things were to come under control, there would be a sudden spurt of demand. The pent-up demand will get capitalised. Customers are not averse to buying but they want to wait for some time,” he said.

In an interaction with BusinessLine, Iyer said he expects growth in segments like vehicle sales to revive in coming quarters.

“Going forward, trend will be a growth curve but it may not be the first quarter. At least April and May will not be so. Last one week has been tough. We will have to wait till May 15,” he said, adding that the festival season, post-monsoon, would see a substantial growth potential.

In terms of disbursements, Iyer said Mahindra Finance will focus on areas which are less impacted by Covid infections.

“We have mapped across the country pockets which are least, moderately and severely impacted. So, in the severely impacted pockets, we will focus on collection efficiency and asset quality while the least and moderately impacted ones will be an opportunity for us,” he said.

The NBFC has also added about 150 branches in the last quarter and it is mapped on the basis of new economic activity and agri support in the current scenario.

“We said it even last year that when there are unknowns around, it is better to be cautious and finance people who genuinely want to use the vehicle and not use it as an opportunity. In difficult times, they can’t survive. We need experienced operators,” Iyer said.

However, in terms of collection efficiency, the fourth quarter of 2020-21 was even better than the fourth quarter of 2019-20 for Mahindra Finance. Collection efficiency was at 110 per cent.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Customers irked by service issues in merged public sector banks

Banking & Finance

[ad_1]

Read More/Less


Customers of public sector banks that got merged with larger peers fear either missing out on dividend payments or facing cheque-bounce charges on post-dated instruments as they have not been able to intimate companies and lenders about the changed IFSC Code of their branches or issue new MICR cheques before the March 31, 2021 deadline.

They want this deadline extended as updating the new Indian Financial System Code in all the mandates given by them and notifying the remitters (of dividend on shares and interest on bonds) and replacing old post-dated MICR cheques given to lenders with new ones will take time.

Six PSBs were amalgamated with four public sector banks with effect from April 1, 2020. Oriental Bank of Commerce and United Bank of India were merged with Punjab National Bank; Andhra Bank and Corporation Bank with Union Bank of India; Syndicate Bank with Canara Bank; and Allahabad Bank with Indian Bank.

Social media consultant Dhimant Bhatt observed that customers of transferor PSBs (that got merged with larger PSBs) may be owning shares in many companies as well as having investments in bonds. Then may also get IT refunds.

Since intimating each company/authority about the change in branch IFSC Code will require some time, the deadline for updating new IFSC Codes and issuing new post-dated MICR cheques needs to be extended by three months, he said.

Trouble merging A/Cs

Indeed, customers of the merged PSBs continue to face issues. Praveen Bhat, a resident of Mangaluru and a customer of both Syndicate Bank (now merged with Canara Bank) and Canara Bank, wanted to merge two accounts in one branch of Canara Bank. When he approached the Canara Bank branch to merge the account from erstwhile Syndicate Bank’s (e-SB), Bhat was asked to visit the latter’s branch.

Since he did not get a satisfactory response to merge the account at e-SB branch, Bhat decided to close the account there. To his surprise, he was charged more than ₹1,000 as closing charges, including for a debit card he did not have. Terming the account closing charges as unethical, he said: “Merger is not my idea. They should not impose closing charges. Banking sector claims to use emerging technologies such as big data. Can’t they use it for identifying the customer having accounts in the same bank, and give him an option to merge or close?”

Bhat, who also has an account with the erstwhile Corporation Bank (e-CB), said he did not face much problem there. However, most of the time the bank (now part of Union Bank of India) sends messages about the non-availability of online banking/ATMs on Sundays due to server upgradation. “I get time to do my personal work on Sundays. That is the time when the online banking facility is not available,” he said.

Issues with app

Fifty-two-year-old Indrajit Haldar used to frequently use the mobile app of the erstwhile Kolkata-headquartered United Bank of India (e-UBI) prior to its merger with Punjab National Bank, for all kinds of transactions. But of late he seldom uses the app as he feels it has become “more complicated” and “very slow”.

It took nearly a month for Subhasis Pal to withdraw money from his father’s Senior Citizens’ Savings Scheme account which was with e-UBI. “After my father expired in February, I approached the bank to close the account and withdraw the funds. However, it took them nearly one month to complete the formalities.

“They were facing severe challenges as there were some technical issues. In fact, the branch manager told me that it was as though the zip of one jacket has been forcibly fixed onto another jacket (referring to the technical difficulties in enabling the transaction post-merger),” he said.

With inputs from Kolkata and Mangaluru bureaus

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

SBI official, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Cyber security is critical for the success of digital banking and banks should create the infrastructure to win customers‘ trust for all such transactions, a senior SBI official said on Wednesday.

Digital banking or Figital is here to stay and is the future but it is equally important to safeguard the interests of all stakeholders, State Bank of India (SBI) Deputy Managing Director and Chief Digital Officer Ravindra Pandey said at a webinar.

“It is important to win the customers’ trust in any system. It is the objective of banks to create and win the customers’ trust, such that all transactions are routed through banks as is presently done by multiple payment apps,” Pandey was quoted as saying in a release issued by industry body PHD Chamber of Commerce & Industry.

The official said that fintech has bought about changes in the customer mindset and it is an era of techfins rather than fintech.

Digital banking has helped in enhancing customer relationship, engagement and satisfaction and reduced operating cost, processing cycle time, among others, he added.

Digital banking is thriving on artificial intelligence and technical algorithm models which help to find out the customer’s ability to pay and also the intention to pay along with credit ratings of the customer.

According to the official, conventional operating models have given way to new channels. There are three areas in fintech that needs to be intertwined to make it a success — payment and remittance; process improvement – compliance and risk management; and customer engagement –, he noted.

Sanjay Aggarwal, President of PHD Chamber of Commerce & Industry, said the banking industry is moving towards a more collaborative and open environment while focusing on data protection and minimising systemic risks.

Representatives from fintech companies, NBFCs and other financial sector also participated in the webinar.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Deloitte, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Data sharing, cybersecurity and data protection have emerged as the top concern areas for the banks as well as customers, according to Deloitte‘s report on open banking. “About 70 per cent survey respondents feel that greater emphasis should be made towards data protection by institutions,” said the report ‘Open banking: Unleashing the power of data and seizing new opportunities’.

Deloitte said the insights in the paper are supported by extensive research, past work, and credentials, complemented by a survey to understand customer needs with 400 plus respondents across age groups and population codes.

The report further said more than 80 per cent of respondents are uncomfortable in sharing the transaction history of accounts, hinting towards a need for all financial institutions (FIs) to assure customers that their data is secure.

Observing that not only banks, but even customers are wary of data sharing, it said, “Cybersecurity and data protection are the top concern areas across all age groups, followed closely by wariness towards third-party access to data and transparency on data usage”.

Over the years, the value of data has reached unprecedented levels.

Countries, globally, are empowering customers with access to institutions of their choice, while jurisdictions are witnessing various approaches to open banking strategy and implementation based on regulatory favourability and industry maturity.

FIs, it said, also have realised that they are now custodians and not owners of data and are trying to move to alternative revenue streams after receiving customer consent. Sandeep Sonpatki, Partner, Deloitte India said the onset of the pandemic has given a boost to welcome digital and API based banking in India with most salaried respondents already being highly comfortable with digital banking.

“However, 69.3 per cent of respondents in our survey felt that greater emphasis should be placed on data protection by the institutions, which makes it very crucial for banks embarking on a journey to develop API-enabled products and services, to have a well-defined roadmap to produce demand-driven solutions and to remain ahead of the curve while maintaining the principles of customer-centricity, security, and trust,” he said.

The report further said access to data can be leveraged by FIs for lead generation, cross-selling products, risk assessment, pre and post delinquency management, collections strategy, and product development; potentially leading to significant business augmentation, asset quality improvement, operational efficiency, and cost optimisation.

Open banking, the report said, is perceived quite differently across jurisdictions. Some have gone ahead to create a regulator-driven, well-defined framework such as the UK and Australia; while others have followed a more market-driven approach such as India.

The bottom line, however, is providing customers control over sharing their information and servicing them through a targeted, data-driven approach, it added. Open banking also offers scope to increase customer onboarding at remote locations through quick, paperless documentation, verification, and alternate credit risk assessments.

With the onset of COVID-19 and the focus towards digitisation, the report said it believes the next 12-24 months will see a significant shift towards open banking amongst Indian FIs. Companies will invest in building core capabilities to address customers’ immediate needs.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

Banks review services policy for WhatsApp, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Banks, which were looking to integrate WhatsApp as a key channel for customers to transact on, are reviewing their policies in respect of the use of the messaging platform. This comes after general concerns among the public that have arisen over Facebook sharing user data among its group companies.

HDFC Bank, which was earlier offering customers the option to obtain bank account balances through WhatsApp banking, has discontinued the facility. Customers seeking balance inquiry are asked to use the bank’s mobile banking app, net banking or other offline methods. Others — ICICI Bank, IDBI Bank, Kotak Mahindra Bank and IndusInd Bank — continue to allow customers to check their balance.

According to an industry source, earlier the idea was to have deep integration with the bank’s systems and artificial intelligence chatbots so that customers can get their servicing requests and even transactions done in a straight-through manner. The idea was to facilitate the entire banking experience through the social media platform, where customers spend most of their time, without having to log into net banking.

Now there appears to be some caution in using WhatsApp banking as a channel. It is not clear whether HDFC Bank’s change in WhatsApp services is part of its ongoing back office overhaul or review of the WhatsApp policy.

Incidentally, all Whatsapp banking chats come with a label stating that while these are encrypted, the bank may use a service to store, read and respond to messages and calls. According to Rajshekhar Rajaharia, a researcher on internet security who pointed out the policy change, businesses and solution providers will use WhatsApp’s parent company, Facebook, to securely store messages and respond to customers.

While Facebook will not automatically use messages to determine the ads that you see, businesses will be able to use chats they receive for their own marketing purposes, which may include advertising on Facebook.An ICICI Bank spokesperson, responding to a query from TOI, said, “Messages to the ICICI Bank WhatsApp Banking service are secured with end-to-end encryption. This means that WhatsApp or third parties cannot read them. Further, the delivered chats are neither shared with Facebook nor saved in the servers of Facebook. Facebook has meanwhile integrated a Whatsapp button on the homepage of banks. Customers will have the option to chat with the bank clicking on the button. The button is also available on some advertisements.”According to WhatsApp’s privacy policy, “Facebook may use the way you interact with these ads to personalise the ads you see on Facebook.”

Experts say that WhatsApp messages, being encrypted, are more secure than SMSs, which are viewable to telecom companies and government agencies and can also be intercepted by hackers. However, the concerns are not about hacking but privacy with organisations using customer data to sell third-party products.



[ad_2]

CLICK HERE TO APPLY

One comment , , , , , , ,

PMC Bank revival: Phased deposit withdrawal likely for customers

Banking & Finance

[ad_1]

Read More/Less


Harried depositors of the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank may be allowed to withdraw deposits in a phased manner, spread over 4-5 years, if it gets revived by an equity investor/ group of investors.

Such a move will assure the investor of a relatively stable liability base (deposits) even as the new management goes about mobilising fresh deposits, in all probability under a new brand name, according to sources aware of the modalities of the revival plan.

While the principal withdrawal could be in tranches of either 20 per cent of outstanding deposit each year over the next five years or 25 per cent over the next four years, existing depositors are likely to be allowed unfettered access to the accrued interest.

“If depositors can withdraw the interest on deposits, they can get on with their lives.

“Senior citizens, who depended on interest income on deposits to meet monthly expenses, have faced untold misery ever since the Bank was put under RBI Directions in September 2019,” said a depositor.

Currently, deposit withdrawals are capped at ₹ 1 lakh per depositor for the entire duration of the Directions.

ALSO READ Investors given time till Feb 1 to submit final bids for PMC Bank

Potential investors

Potential investors who have submitted expression of interest (EoI) to invest in the Bank include the Centrum Group-BharatPe combine and the UK-based Liberty Group.

RBI is likely to announce the name of the investor who will steer the fortunes of the Bank before the extended validity period of its Directions ends on March 31, 2021.

If PMC Bank revives with the help of an investor, it can serve as a template for the revival of other distressed urban co-operative banks.

The Directions against PMC Bank were necessitated as RBI came across a nexus between borrowers (promoters of a real estate group) and some Bank officials, with the alleged fraud/ financial irregularities pegged at about ₹4,355 crore.

ALSO READ RBI extends restrictions on PMC Bank to March

Conversion into SFB

AK Dixit, PMC Bank’s Administrator, in a letter to customers and stakeholders, said: “As you are aware, the bank had issued EoI on November 03, 2020, inviting investors for revival/ reconstruction of PMC Bank.

“Initially, four investors had shown their interest. Further process has been undertaken by three of them.”

As per the EoI, subsequent to commencement of the normal day-to-day operations, it will be open for the investor(s) to convert the bank into a Small Finance Bank by making an application to RBI.

“The investor(s) should ideally bring in the capital required for enabling the bank to achieve the minimum required capital to risk weighted assets ratio (CRAR) of 9 per cent.

“However, the investors may explore the option of restructuring a part of deposit liabilities into capital/capital instruments,” the EoI said.

The bank may also approach the Deposit Insurance and Credit Guarantee Corporation (DICGC) for its support for payment up to ₹ 5 lakh (insured deposits) to depositors under the provisions of the DICGC Act, 1961, it added.

According to the EoI, PMC Bank was having total deposits of ₹ 10,727.12 crore, total advances of ₹ 4,472.78 crore and gross NPA (non-performing assets) of ₹ 3,518.89 crore as on March 31, 2020. Further, the share capital of the bank is ₹ 292.94 crore. However, the bank registered a net loss of ₹6,835 crore during 2019-20 and has a negative net worth of ₹ 5,850.61 crore.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

HDFC Bank signals IT issues may not be fixed by March, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


MUMBAI: HDFC Bank has indicated in its conference call with analysts that the lender might not complete fixing its back-end IT issues during the current fiscal. The bank said that its action plan relating to disaster recovery would take 12-18 months, while its immediate plans would take 10-12 weeks.

The country’s largest private bank had reported its Q3 results on Saturday — the first after the RBI pulled up the lender for repeated problems faced by customers in accessing digital banking. The bank had reported an 18% year-on-year growth in earnings. The bank’s share price rose by over 1% after the results on a day the sensex fell by nearly 1% after its record profit of Rs 8,758 crore.

According to Macquarie research analyst Suresh Ganapathy, the tech resolution will take time and could spill over to end of June. “They want to be very sure everything is in place, ramp up capacity and then call the RBI for due diligence… As of now, inability to give credit cards has not affected account openings … But if this continues beyond June, we can see some impact coming in the near term… Meanwhile, for others like ICICI and Axis, this is an opportunity to ramp up their credit card base,” said Ganapathy.

The RBI has barred the bank from launching digital initiatives and issuing credit cards until it fixes issues with its IT system and ensures that multiple outages of online services do not repeat. According to analysts, though it would take time to fix the issues, the bank was optimistic of getting permission from the RBI for a digital lending platform for auto loans. ICICI Securities said that the bank’s credit card portfolio was up 9% quarter-on-quarter despite the ban on acquiring new customers coming into effect from mid-December.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,
1 2