1. SBIePay: SBI becomes first Indian bank to have own payments aggregator.
State Bank of India (SBI) chairperson Arundhati Bhattacharya launched its online electronic payments aggregator service – ‘SBIePay’ – at its corporate centre, Mumbai on March 13, 2014 in the presence of its top management.
She said the possibility for other bank customers to use the facility would ensure more e-commerce activity and also help banks increase usage of alternate channels.
The payment intermediary, which would act as an aggregator to facilitate payments to multiple merchants from different bank accounts, would make SBI the first lender in the country to have a payment aggregator of its own in a space dominated by private players like Billdesk and CCAvenues.
Existing players have targeted specific merchant categories and created their own niche segments, but SBI’s service called ‘SBIePay’ plans to target newer spaces, especially government bodies’ payments, SBI sources said.
“SBIepay aspires to bring in additional payment modes, new merchant categories, with a special focus on government merchants like central, state departments and municipal corporations,” the source said.
In the next three years, it aims to become a “dominant player” in the aggregator space by being a one-stop solution for processing all online payment modes, sources said.
It would provide business information and analytics to merchants as well as banks for all transactions as an add on feature and is already in talks with 40 banks for tie-ups, sources said.
Between 2008 and 2012, electronic payments grew at 32 per cent per annum and have touched Rs 47,349 crore, and added that online travel bookings as well as online retail sales are the two major segments.
At present, debit card and Internet banking form around 45 per cent of transactions, while 43 per cent come from credit cards.
The government space, which the SBI targets, currently does not have any online mode of payment at present and operates through authorised bank branches, collection centres and drafts.
2. IBA wants free use of other-bank ATMs to end in metros.
Indian Banks Association (IBA) on March 14, 2014 said it has requested the Reserve Bank of India (RBI) to allow banks to charge customers in the metros to pay for accessing Automated Teller Machines (ATMs) of other banks but continue with the current cap of five free transactions a month for rural customers.
“We have made our recommendations to the RBI that at least in the metros, the current five free usage of other bank ATMs be withdrawn so that every transaction on other bank ATM is chargeable. At the same time, the present set up be continued in rural areas,” chief executive of IBA Mr. MV Tanksale said.
The issue of charging customers for ATM usage has become into a very vexed one, ever since banks were asked by state governments to place armed guards at all the ATMs after a brutal attack on a customer in Bangalore last November.
According to banks, the overheads will make operations of ATMs unfeasible and hence, they have been struggling to come up with a solution for over three months now, without much of success.
The IBA says banks are losing Rs 400 crore a month because of the excess security requirements at 1.4 lakh ATMs.
A slew of measures, including raising the inter-bank charges and limiting the number of all free transactions at five per month, have been mooted.
Currently, a customer can enjoy unlimited free transactions at his own bank’s ATMs and is allowed five free transactions a month in other banks’ machines.
Irrespective of it being a free transaction for the customer or not, a bank has to pay the other a fee of around Rs 15 for every transaction done at the other bank’s ATM.
Meanwhile, when asked if banks have written to the Reserve Bank to extend the mark to market loss amortization by two more quarters, Tanksale said replied in the affirmative but did not confirm the time period for which the relief has been sought.
3. Wholesale Price Index (WPI): Wholesale Inflation dips to 4.68% on lower food, fuel prices.
India’s wholesale price-based inflation eased to a nine-month low in February as food and fuel prices moderated, raising expectations that the Reserve Bank of India (RBI) would leave interest rates unchanged at its policy review next month.
The wholesale price index (WPI), long regarded as India’s main inflation measure, rose 4.68 percent last month, data showed on Friday, compared with a 4.99 percent jump forecast by economists in a Reuters poll.
A 10 percent drop in wholesale vegetable prices from January helped overall inflation ease for the third straight month.
Friday’s data comes on the heels of a faster-than-expected slowdown in consumer inflation, which eased for a third straight month to a 25-month low of 8.10 percent in February.
4. Exim Bank extends $90 mn line of credit to Republic of Congo.
Export-Import Bank of India (EXIM Bank) has, at the behest of the Government of India, extended a Line of Credit of $89.90 million to the Government of Republic of Congo, for development of transportation system in the Republic of Congo.
Under the line of credit, Exim Bank will reimburse 100 per cent of contract value to the Indian exporters, upfront upon the shipment of equipment and goods/ provision of services.
The Agreement was signed in New Delhi, India by Yaduvendra Mathur, Chairman & Managing Director, Exim Bank and Félix NGOMA, Ambassador of the Republic of Congo in India. This is the second line of credit to the Government of the Republic of Congo.
5. Windows XP running ATMs to put additional financial burden on banks.
Banks around the world, consumed with meeting more stringent capital regulations, will miss a deadline to upgrade outdated software for automated teller machines (ATMs) and face additional costs to Microsoft to keep them secure.
The U.S. software company first warned that it was planning to end support for Windows XP in 2007, but only one-third of the world’s 2.2 million ATMs which use the system will have been upgraded to a new platform, such as Windows 7 by the April deadline, according to NCR, one of the biggest ATM makers.
To ensure the machines are protected against viruses and hackers many banks have agreed deals with Microsoft to continue supporting their ATMs until they are upgraded, extra costs and negotiations that were avoidable but are now likely to be a distraction for bank executives.
“There are certainly large enterprise customers who haven’t finished their migrations yet and are purchasing custom support,” a spokesman for Microsoft said, declining to name those customers or to quantify the extra revenue it is earning.
“The cost will depend on both the specific needs of the customer and what support they already have in place, so it’s different for every customer.”
Britain’s five biggest banks – Lloyds Banking Group, Royal Bank of Scotland, HSBC, Barclays and Santander UK – either have, or are in the process of negotiating, extended support contracts with Microsoft.
According to Sridhar Athreya, a London-based head of financial services advisory at technology firm SunGard Consulting, the cost of extending support and upgrading to a new platform for each of Britain’s main banks would be in the region of 50 to 60 million pounds.
Athreya said banks have left it late to upgrade systems after being overwhelmed by new regulatory demands in the wake of the 2007-08 financial crisis.
“They were probably not very serious about the directive that came in from Microsoft. There’s a lot of change going on at these banks at this moment in time and they would have seen Windows XP as one more change,” he said.
Windows XP currently supports around 95 percent of the world’s ATMs.
About 440,000 – or one-fifth of the world’s ATMs – are located in the United States and many of the banks operating them will still be running their ATMs with Windows XP for a while after the April 8 deadline, said Doug Johnson, vice president for risk management policy at the American Bankers Association.
“One thing in our favour is that XP is battle-hardened,” Johnson said. “People will benefit from years of fine-tuning of XP…It has been through wars.”