BF August 2016 - Banking Frontiers

Vol. 15 No.4 August 2016
`75
Pages 56
Indo-African Corridor
India Stack
Top of the Pyramid
Banking in the Gulf
UTION
VOL
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U
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T
O
ION
V
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www.bankingfrontiers.com
An Insight into Payments Business 2016
Presents
FCBA NCBS
2 016
2 016
Frontiers In Cooperative Banking Awards
National Cooperative Banking Summit
Venue : Pride Plaza Hotel, Aerocity, New Delhi
Date : 17-18 September 2016
Theme : Youth Yatra
YOUTH
RATIVE B
AN
OPE
CO
FCBA
2 016
AWARDS
NG
KI
FRONTIERS I
N
YATRA
th
nniversary
10 A
What is special about
NCBS 2016 & FCBA 2016
F We expect to have speakers from
the RBI and Finance Ministry,
both of whom play a key role
in shaping the future of the
cooperative banking sector.
F Instead of a single session, we will
have three parallel sessions so as
to cover a wider range of topics.
Virtually every important topic
for cooperative banking will be
discussed at this forum.
F There are multiple categories of
delegates - Chairman, Directors,
Managing Directors, Chief
Executive Officers, General
Managers and IT Heads. Having 3
parallel sessions will enable each
participant to find a session that
suits their learning needs.
F Demonstration booths are being
set up so that bankers can see a
demonstration of the softwares
that they are interested in.
Event Overview
The event comprises of
F 2 days of conference
F 2 days of expo
F Awards ceremony
The conference is termed as as National Cooperative Banking Summit
(NCBS). The conference will cover a wide range of areas including business,
technology, risk, compliance, HR, etc. See the program schedule for details.
NCBS will have 3 parallel sessions on day 1 and half of day 2. The post-lunch
session on day 2 will be a combined session. The chief guest and guest of
honor will be speaking in this combined session.
In the evening of day 2, the FCBA awards function will be held, followed by
entertainment, cocktails and dinner.
NCBS and FCBA will be held in Imperial Ball Room. Chancery room and the
pre-function area outside both the halls will be used for the expo.
Banking Frontiers has made special arrangements with the hotel for the stay
of the bankers. Rooms are available on single and double occupancy.
Charges for stay at Pride Plaza Hotel
Single Occupancy for 2 nights : `11,000 all inclusive
Double Occupancy for 2 nights : `13,000 all inclusive
The above includes stay, breakfast, lunch dinner. It does not include pick-up
or drop. Any other service will have to paid by the banker directly to the hotel.
Checkin: 11.30 am on September 17
Checkout: 11:30 am on September 19
Please block your calendar. Airlines offer special discounted fares from time to time. As
soon as any such special fare is announced,
you may take the benefit of the same. Please
book the morning flight so that you can reach
New Delhi in time.
For any enquiry, please contact the persons below.
For booking your hotel room, please make a cheque or DD for the
appropriate amount in favor of Glocal Infomart Pvt Ltd and courier it to:
Bharat Solanki / Stalin Saldhana
D-312, Twin Arcade, Military Road. Marol, Andheri (E), Mumbai 400059
Tel: + 91-22-29255569 / 29250166
Award Ceremony at FCBA 2015 at Goa
Editor’s Blog
Manoj Agrawal
Mobile : 98673 66111
Email : [email protected]
August 2016 - Vol. 15 No. 4
Group Publisher
: Babu Nair
Group Editor
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Editor
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L.S. Subramanian
Marketing
Zahid Siddique, Varun Kataria,
Sunny Rajendra H.
Events & Operations
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Gautam Magare, Shirish Joshi,
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Pramod Jadhav, Amit Gupta,
Bharat Solanki, Shweta Kadam
Design
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Banking competition to heat up
T
he Reserve Bank of India has taken a huge step in opening up the banking
sector. With its plan to offer new banking licenses on tap, the banking sector
will increasingly resemble other verticals where competition has fewer
constraints. Running a bank will no longer be limited to a chosen few.
With on tap licensing, several new organizations are sure to jump into the banking
vertical. Customers will surely have more choice, but the real bounty will go to the
bank employees.
Already we see a shortage of talent. The new RBI scheme will create a demand
for many more jobs. So the banks will have to poach and train and tie-up with
educational institutes and all that. Simultaneously, banks will have to adopt newer
technologies that replace manual work with automation. In this transition, a whole
lot of jobs will definitely emerge, particularly at the back end, where expertise in
banking would not be required. So there will be more and more banking jobs that
don’t require knowledge of banking.
Our story on India Stack alludes to one opportunity for greater automation.
Innovations in IoT, drones, voice recognition, etc, are other sources of emerging
technologies to be tapped.
Apart from this, I see several
opportunities in converting
unstructured data to structured
data and thereby enhancing
automation. Given the vast
diversity in India, this is a major
challenge, but then every major
challenge is an opportunity for
new thinking and innovation.
Lastly, managing employees will become a major challenge and competition will
force banks to become even better at retaining employees, rewarding them and
maximizing their productivity. This surely calls for smarter HR policies and smart
systems to implement those policies among the smart youth generation.
Editor: N. Mohan (Responsible for selection
of news under PRB Act)
Banking Frontiers
August 2016
3
Vol. 15 No.4 August 2016
`75
Pages 56
Indo-African Corridor
HOUSING
India Stack
HIGHLIGHTS
www.bankingfrontiers.com
Top of the Pyramid
August 2016
Banking in the Gulf
EVOLUTION
UTION
VOL
RE
Banking in the Gulf
20
Cover Story
Highlights of banking
activities in the Gulf region
An Insight
intoPayments
Payments Business
2016
An Insight
into
Business
2016
Banking Frontiers organized the fourth edition of PayNext
Insights conference, highlighting the recent innovations in the
payments space. Here are the highlights of the conference
14
Focusing on Indo-African corridor
FirstRand Bank is focused on building a
strong commercial banking franchise in
India. The key value proposition that FRB
is bringing to SMEs and mid corporates
is its unique ability to help businesses
operating in the African continent
12
Other interesting stories
Compliance............................................5
Project Pipeline.....................................6
News Regulator....................................8
Central Bank of India...........................9
Reputaional Risk.................................19
News Cyber Security........................ 26
India Stack will give
fillip to lending
India Stack is an effort of a team
of highly skilled non-government
volunteers working relentlessly to
make the dream of financial inclusion
come true
24
Fraud solution at SIB........................ 27
ICICI Securities................................... 28
Research Notes 1............................... 29
Research Notes 2.............................. 30
News Tie-ups.......................................31
Apna Bank........................................... 36
Bhagini Nivedita Coop Bank.......... 38
Deogiri Coop Bank........................... 40
Apex body for UCBs......................... 42
Design: Junoon Ventures | Unik Printers Pvt. Ltd.
Top of the Pyramid grows
THE INDIAN ULTRA HNI
Optimism Uninterrupted
10
4
Banking Frontiers
The annual study ‘Top of the Pyramid’
by Kotak Wealth Management and
Ernst & Young, give an insight into the
varying perceptions of the ultra high
networth households in India
August 2016
Sundarlal Savji Coop Bank.............. 43
Vasai Vikas Coop Bank.................... 44
News Pix.............................................. 52
People Track....................................... 53
Compliance
Reflections
Bimbadhar Mishra
RBI launches website to curb illegal collection
of deposits
RBI launched ‘Sachet’, a website to help members
of public obtain information regarding entities
that are allowed to accept deposits, lodge
complaints and also share information regarding
illegal acceptance of deposits by unscrupulous
entities. The website would also help enhance
coordination among regulators and state
government agencies.
Exchange of soiled/ mutilated/ imperfect
notes
To improve customer service and enhance
customer protection, RBI modified the
procedure for the facility of exchanging
mutilated/ imperfect notes under Note Refund
Rules, 2009 at designated bank branches and
non-chest branches.
Guidelines for relief measures by banks
In view of the difficulties faced by farmers in areas
affected by natural calamities, RBI has advised
all scheduled commercial banks to act with
empathy and consider restructuring and granting
fresh loans without waiting for the receipt of
the insurance claims, in cases where there is
reasonable certainty of receipt of the claim.
Banking Frontiers
August 2016
5
Project Pipeline
SBI to set up innovation center
State Bank
of India is
planning to
set up an SBI
IT Innovation
Center. It
has sought
proposals
from global
companies
registered in
India to set
up such a center on a Build-Operate-Transfer basis or any other model. The bank
intends to develop the center in such a manner that it will have under one roof
ideation lab, collaboration center for innovation and forward looking IT concepts
broadly in the areas related to banking and a customer experience and co-creation
/ crowd sourcing center. The center will also act as a hub for collaboration with
large IT companies known for innovation, IT partners and OEMs of the bank, startups, research organizations and leading academia and industry forum. The broad
objective is to build a best in class center deploying latest world class technologies
for such centers, if necessary partly or wholly in BOT model or any other model as
decided by the bank to enable global sourcing of technology and HR. The center
will continuously engage in collaboration, crowd sourcing, and ideation both in and
out of the bank. It will also manage the customer experience interfaces by using
latest displays, audio visual equipment and other such interactive technologies. The
selected company will be responsible for setting up the center including civil and
IT infrastructure.
Oriental Insurance
needs IT consultant
Oriental Insurance Co is empaneling
consultancy firms/organizations for
its various IT Activities/ initiatives. It
wants help from these consultancies
on its various ongoing IT activities and
forthcoming IT projects. The company
has implemented an integrated nonlife insurance application software,
INLIAS, with the help of 3i-Infotech,
which serves the business requirements,
including underwriting, accounting,
claims processing, report generation and
reinsurance requirements. The company
also has a state-of-the-art web portal
through which customers can transact,
make payments and track the status of
various transactions.
BoB to strengthen
cyber defense
Bank of India to outsource credit card management
Bank of India intends to outsource its credit card management (end-to-end) and
other related back office operations. At present, the bank has a credit card base of
1.5 lakh holders and this is likely to go up to 5 lakh in the next three years. The bank
has arrangement with VISA International and MasterCard International for issuing
credit cards. The whole activity at the moment is outsourced on end -to-end basis.
It is now looking for a new service provider to undertake the enhanced scope,
including establishing a 24 x 7 call center to handle enquiries/ complaints and
grievances of the cardholders such as hot listing, billing queries, etc. The service
provider should have facilities to host Master Card International Process and VISA
Card Process port.
GIC Re wants RAS
GIC Re is looking for a re-insurance administration software (RAS) for its Life
Re department, which is in the business of foreign and domestic business of life
reinsurance. The company wants a comprehensive reinsurance software, which
should support business development, actuarial work for pricing and IRDA
reporting, treaty management, bordereaux management and reconciliation,
underwriting support - facultative and referral cases, claims processing and
integration with financial modules of SAP for independent accounting for Life Re
business (currently SAP is supporting our Non-Life Business). The selected service
provider will also have to ensure that all these functionalities if not in a single system,
should be interacting where required and no manual transfer of data should be
required between various systems.
6
Banking Frontiers
August 2016
Bank of Baroda is in the process of engaging
a consultant to assist it in strengthening
its cyber defense and complying the with
guidelines on Cyber Security Frameworks
for Banks issued by Reserve Bank of
India. The bank and its subsidiaries have
implemented centralized systems at the
data center and DR site and the bank
now wants to strengthen its cyber attack
detection and response mechanism so that
in case of any indicator of compromise,
the bank can detect the same and respond
before the actual damage takes place.
The bank has 24X7 Security Operations
Centre at its DC and DR locations and
logs received from integrated devices at
DC/DR and are monitored using SIEM
tool. The selected service provider will
be required to independently arrive at an
approach and methodology.
Syndicate Bank to have APTS
Syndicate Bank wants to deploy a solution capable of combating any advanced
threats and persistent adversaries
in realtime by taking proactive
measures in security with an ability
to respond immediately against any
type of danger. The bank already has
a well organized security setup at its
data center and DR site and it has
also set up a SOC to monitor security
breaches. The bank has a total of
30000 endpoints including servers
and network and security devices.
For this the bank intends to procure
Advanced Persistent Threat solution
(2 each in active-standby mode at
Mumbai and Bengaluru. having the
capability of detecting and preventing
cyber attacks. The solution should be
supporting prevent persistent threat in network as well as endpoints. The solution
would be integrated with the bank’s SIEM for incident management and it should
be made available across multiple threat vectors including web and file. The bank
wants a service provider to undertake complete installation, commissioning and
maintenance of the system.
SBI to set up microsite for home loans
State Bank of India is proposing to host a microsite and a mobile all for catering to
the needs of its home loan seekers. It will be a dedicated microsite and a mobile app
to help create an impressive and differentiated customer experience for all online
visitors for the bank’s home loan products. The site would provide information and
relevant tools online in a structured, comprehensive and simplified manner on this
platform to simplify the decision making process for the prospective home loan
customers leading to improved online lead generation rate of home loan customers
and serve as a platform to service and cross-sell/ up-sell to existing home loan
customers - leading to retention and enhanced customer satisfaction. The bank is
looking for a micro web-site solution to support the management of all content (web
site assets, images and videos) and has invited proposals from service providers.
PNB to have document protection system
Punjab National Bank is wanting to implement a document protection and
information rights management solution. The bank exchanges information within
and outside with entities/organizations and it wants to protect its data at all stages
from unauthorized access by automating control over content access and content
usage and by applying user rights and policies to secure, control and track content
from viewing, printing, editing, etc while information gets exchanged internally and
externally. The solution eliminates unauthorized usage of contents like Microsoft
Office documents, PDF, emails and other files. While the bank is in the process
of implementing a DLP solution, it also wants to have a Document Protection &
Information Rights Management Solution. The solution may also be implemented
if required at the bank’s subsidiaries and sponsored RRBs. The bank wants
the solution to be capable of Rights Management and Data Classification for
documents created in MS Word, MS Excel, Open Office, PDF, MS Exchange and
MS Outlook client.
IDBI Bank to have
EPMS
IDBI Bank is looking for an enterprise
project management solution (EPMS)
comprising sub-systems like project
management system, resource allocation
system, time-sheet management system,
centralized skill database, IT Balanced
Scorecard, knowledge management
system and source code control system.
It has invited proposals from system
integrators to supply, install, implement,
integrate and maintain the EPMS. The
selected service provider should be able
to support and maintain all interfaces to
the proposed solutions as well as provide
support for integrating any applications
that need to be interfaced with the
solution(s) in future.
NHB to set up new
network
National Housing Bank wants to
implement an end to end network as also
update its existing network and support
services. It is looking for a service provider,
which can undertake the work, including
providing network equipment. The bank
has centralized setup with data center in
New Delhi and DR site at Mumbai. All its
applications are hosted at the data center
and these are accessed by its various offices
through MPLS WAN/internet. At present,
it has MPLS connectivity between Delhi,
Mumbai and other offices - WAN (MPLS)
between New Delhi, Mumbai and regional
representative offices; LAN at New Delhi
and Mumbai offices; other offices are
connected to head office through MPLS;
also applications /internet/intranet.
Banking Frontiers
August 2016
7
N E W S Regulator
New 50 euro notes
The European Central Bank is
issuing a new set of 50 euro notes.
While 50 euro notes are the most
popular currency in EU, it is also
the most counterfeited currency.
The new notes has been designed
to combat counterfeiters and
fake notes. It features a hologram
of mythological figure Europa,
a new watermark and a new
reflective paint. The note will be
made available in the 19 countries
that make up the EU.
BB officials in Manila to get stolen money back
Senior officials of the Bangladesh Bank are visiting Manila to press the authorities
in the Philippines to find ways to return the $63 million that is still missing out of
the funds stolen from its account at the Federal Reserve Bank of New York. Cyber
criminals tried to steal nearly $1 billion from the Bangladesh Bank account in
February 2016 and succeeded in transferring $81 million to four accounts at Rizal
Commercial Banking Corp in Manila. Only $18 million has been recovered so far.
The Bangladesh Bank alleges that the money was allowed to disappear into the
casino industry in the Philippines, where investigators say it was laundered.
China to regulate QR
code mobile payments
People’s Bank of China (PBOC) is working
to create a system for regulating QR code
mobile payments in China. It had earlier
suspended QR code-based services run by
third-party payment providers. Payment
providers including Alipay and Tenpay,
along with a number of commercial banks,
have continued marketing their QR code
payment services. The 2014 ban was put
in place because there were no rules or
standards for third party QR code payment
services. PBOC had opened up Chinese
mobile payment services in August 2015.
BEAC has new
governor
Saudi curb on remittances abroad
Saudi Arabia is proposing to have a new regulation that would control remittances
within the senders’ incomes. The Saudi Arabian Monetary Agency, the country’s
finance ministry and other regulating bodies are working on the regulation, which
is expected to match remittances with the senders’ incomes. This is essentially to
control the transfers as authorities detected that thousands of foreign workers
transfer amounts that exceed their incomes. These incomes are suspected to be the
result of concealed, even criminal, actions. The government has also unveiled plans
to introduce a 6% tax on the remittances sent abroad. Many see this as a move to
stem the flow of money leaving the Kingdom in the wake of oil slump facing the
world’s biggest crude exporter.
Singapore FinTech festival
The Monetary Authority of Singapore is holding the Singapore FinTech Festival, a
weeklong event in November
2016. The event expects to bring
together the global financial
community to a series of backto-back fintech events and
aims in providing a platform
for collaborations, connections
and co-creations within the
fintech ecosystem in and around
Singapore. The Association of
Banks in Singapore is collaborating with MAS in organizing the event, which will
have Hackcelerator Demo Day, Innovation Lab Crawl, MAS FinTech Awards, FinTech
Conference, Tech Risk Conference and RegTech Forum. The event targets on startups,
investors, financial institutions, local ecosystem partners and government agencies.
8
Banking Frontiers
August 2016
The Bank of Central African States, or
BEAC, has a new governor. Chadian-born
Abbas Mahamat Tolli has been appointed
governor of replacing Lucas Abagha
Nchama of Equatorial Guinea, who was
holding the office for the last 6 years. Tolli,
43, will take up the position next January.
The announcement was made in Malabo,
capital of Equatorial Guinea, where an
extraordinary summit of the Community
of Central African States is being held to
appoint the central bank’s new governor.
BEAC serves as central bank for Cameroon,
Central African Republic, Chad, Republic
of Congo, Gabon and Equatorial Guinea.
Dieudonne Evo Mekou, from Cameroon,
will take up the position of vice governor.
Tolli is a former finance minister of Chad.
7th Pay Commission
CBI expects `4000 cr rise in retail credit
R.C. Lodha, ED, Central Bank of India, outlines the credit growth
projection of his bank and the likely banking industry scenario post
implementation of the 7th Pay Commission:
T
he union cabinet had in July
2016 approved most of the
recommendations of the 7 th
Central Pay Commission, including a 16%
hike in pay and 24% increase in pensions,
to be effective from January 2016. The
recommended 63.5% hike in allowances,
including a 138% increase in HRA, has
been deferred. The increase in payouts is
expected to provide an immediate boost to
private urban discretionary consumption.
Apart from consumption, overall savings
in the economy would also get a fillip.
The government has already notified the
2.57-time hike in basic salary of 10 million
government employees and pensioners.
The minimum pay in central government
services will be `18,000 per month with
effect from 1 January 2016, up from the
existing `7000 per month. At the highest
level, the salary would go up from `90,000
a month to `2.5 lakh.
The Reserve Bank of India has
projected a direct impact of these
recommendations on headline inflation
to be around 150 basis points, while the
indirect effects are estimated to be around
40 basis points. While the impact of the
award is likely to be seen over a period of
2 years, as was the experience in the case
of the 6th Central Pay Commission, RBI
forecasts the increase in the housing index
to be ‘more quick and continuous’ and the
indirect effects to be ‘smaller’.
Mehul Dani: How will the ‘7th Pay
Commission’ recommendations benefit
banks and financial institutions in India?
R.C. Lodha: The implementation of
7th Pay Commission recommendations
is going to benefit around 47 lakh central
government employees (including defence
and railways) and 52 lakh pensioners.
It will provide payout of `1 lakh crore
premium products. The major industries
likely to benefit from this is automobile
(Maruti Suzuki, Hero Honda, Bajaj etc)
and consumer goods (Godrej, Whirlpool
and LG). Similarly, demand for housing
too is likely to go up. The ancillary sectors
pertaining to these industries are also
likely to see good growth. Our focus is on
retail credit like housing, consumer goods
and related manufacturers.
R.C. Lodha is confident that
the moderate/low inflation
would enable households
to earn positive interest rate
return on their savings
approximately, which will increase
the disposable income in the hands
of employees, leading to spending on
automobiles, consumer products, housing,
etc. We expect the increase in our retail
credit by `3500-4000 cr. As regards
inflation, it may go up by 1% and growth
will touch 8%.
Which are the major industries/segments
that are likely to generate direct and
indirect loan demand as a result of the
implementation?
Customers having high disposable
income tend to spend more on things to
fulfill their needs and upgrade the status.
There will be increase in the demand of
What could be the estimated increase in
household savings and the subsequent
deposit mobilization in your bank?
The average Indian household’s
tendency is to funnel its savings into
physical assets – gold and real estate.
Physical assets accounted for more than
two thirds of household savings in 2012-13,
up from 48% five years prior to that. The
trend is changing as households return
to financial savings. As long as financial
assets continue to hold the promise of
higher yields, savers would move away
from physical assets. The financial assets
of the household sector during 2014-15
in bank deposits are `5792 billion out of
total financial assets of `12,356 billion.
The total amount of financial savings
made by households was `8194 billion
in 2014, which is an increase of 18%
compared to financial savings of 2013.
The moderate/low inflation would enable
the households to earn positive interest
rate return on their savings, thereby,
enabling them to invest in bank deposits.
The household savings is expected to be
around 5-7% up. We expect that around
`30,000 crore is likely to be parked in
banks, of which, Central Bank of India
expects to mobilize around `2000 crore
during this year out of implementation of
7th Pay Commission.
[email protected]
Banking Frontiers
August 2016
9
Ultra Wealthy
Top of the Pyramid grows
The annual study ‘Top of the Pyramid’ by Kotak Wealth Management
and Ernst & Young, give an insight into the varying perceptions of the
ultra high networth households in India:
T
here are 146,600 ultra high
networth households (UHNH) in
India in FY 2016, against around
137,100 in the previous year, according
to the annual ‘Top of the Pyramid’ report
brought out by Kotak Wealth Management
and Ernst & Young. While defining the
growth as slower and moderate at 7% over
one year and a 16% compounded growth
over five years (corresponding growth
rates last year were higher at 17% and
22%), the report finds that these UHNHs
represent an accumulated net worth of
Rs135 trillion, says the report and this
represents a 5% growth on last year’s
wealth and 18% compounded growth over
the last five years.
The report projects the number of
UHNHs to increase to 294,000 by FY2021
with a combined networth of Rs319 trillion
driven by new UHNHs from emerging
sectors and new avenues for investments.
Smaller cities will also contribute to this
growth in the number of ultra HNIs and
their wealth, predicts the study. The report
defines a UHNH as one with a minimum
networth of `250 million, mapped over
10 years.
“The business and investor-friendly
approach of the government will help
nurture and sustain a start-up ecosystem
in the country and propel the growth of
ultra HNHs,” says the report.
INVESTMENTS UP
One significant finding is that in FY 2016,
59% of the UHNIs surveyed increased their
investments into primary businesses and
43% saw a decrease in their overall savings,
which they substituted with investments.
“Non-discretionary expenses continued
to dominate their income allocation,
except in the case of entrepreneurs,
for whom investments into businesses
10
Banking Frontiers
August 2016
Growth of Ultra HNHs in India
We believe there were 146,600 HNHs in FY16 with an
`135 trillion
accumulated net worth of
`86
`45 `65
trillion
2010-11
62,000
trillion
trillion
2011-12
81,000
`128
`104
trillion
trillion
2012-13
100,900
Combined Net Worth
became a priority. For professionals, the
proportion of savings reduced over last
year, with a commensurate increase in
their investments for personal wealth,”
says the report. It has been found that
family-centered expenses - spending on
jewelry, holidays, apparel, automobiles,
home decor and events – continue to
dominate for the UHNHs by contributing
to 68% of overall spends, a slight increase
over 67% last year. A higher proportion
of UHNIs compared to last year are now
considering these family-related expenses
(except home decor) as non-discretionary.
IMPULSIVE BUYERS
The report found that 64% UHNIs are
impulsive buyers when it comes to apparel
and accessories. “Despite the allure of
foreign destinations, many of them prefer
`135
trillion
2013-14
2014-15
117,000
137,100
2015-16
146,600
Number of Ultra HNHs
to shop within India, as most major foreign
luxury brands are now available locally.
There has also been increasing awareness
about art among the ultra HNIs, not
only because they treasure the absolute
pleasure of owning a beautiful and timeless
creation, but also because owning art has
started making sound business sense due
to its manifold value appreciation. In this
light, UHNIs are increasingly treating art
and paintings as an integral component
of their portfolios. Even so, for 68% of
UHNIs, art and paintings are impulse
purchases; only 32% engage in research
before buying,” the study reveals.
The report also recalls that not too long
ago, visiting a foreign location for shopping
and other purchases was de riguer for
these brand-conscious UHNIs because of
the limited choice that shopping in India
How Ultra HNIs Allocated their Income this Year
Prioritised investments into primary businesses and personal wealth over savings
15 %
23 %
Discretionary
expenses
Investment into
primary business
had to offer. “However, this is not strictly
necessary anymore - the survey found that
as many as 59% UHNIs now satisfy their
apparel and accessory purchase needs in
India itself. Dubai and Singapore have
emerged as other popular destinations
for apparel and accessory shopping, while
Europe is the next most popular. What
they really value is variety and exclusivity.”
WEARABLES
One other area of interest for the UHNHs
is the ‘wearables’. These devices now
form part of their daily lifestyle. It is also
interesting to note that older UHNHs
- between the ages of 36 and 50 years were more eager to adopt wearable devices
than the younger ones. There was close to
61% adoption among the 36 to 50-year age
group compared to 55% adoption among
UHNIs who are below 35 years of age.
COLLECTIBLES
Another area of passion for the UHNIs is
collectibles. They do not leave any stone
unturned to collect items that add to
the grandeur of their living rooms, office
spaces, or atriums, says the report quoting
that 70% of UHNIs confessed that their
passion for owning a collection of exotic
and interesting items drove their purchases.
The study showed that 65% UHNIs prefer
collecting electronic gadgets and about
a third have developed this interest over
the last one year. Luxury cars account for
63% of ultra HNIs’’ collections, followed
by investments made in art and paintings.
GO GREEN
The study also covers the interest UHNIs
have in adopting ‘green’ building practices
to minimize the footprint of their homes
on the ecology, while maximizing comfort.
25 %
Expenses
Savings and
Investments
14 %
Savings
45 %
Non-discretionary
expenses
55 %
16 %
Investment for
personal wealth
2%
Others
Beyond the latest luxury bathroom fittings,
marble floor tiles, and technology timesavers, the wealthy are also investing in
insulated roofs, automated sensor lights,
water-conserving fixtures and fittings,
rainwater-harvesting technology, and
external solar lighting. They are also
increasingly tying up with commercial and
residential high-rises to install solar panels
on rooftops, thus encouraging the usage of
alternate sources of energy. This has not
only turned into a viable business model
for ultra HNIs, but has also made the ‘go
green’ lifestyle a coveted and fashionable
one, finds the study.
SUCCESSION PLANNING
As regards succession planning, the study
found that 43% of UHNIs prepare for at
least five years to put an efficient succession
plan in place, while another 35% take
anywhere between two to five years. “When
it comes to a successor, over 90% of ultra
HNIs choose from their children and highperforming family members, while less
than 10% choose outsiders.”
However, the report indicates that
this trend is likely to change in the
future because of the increasing need for
professional management from a good
governance perspective. “Even today, most
ultra HNIs (73%) prefer planning for
succession with their close confidants; a few
5%
Charity
look for advice from external sources such
as chartered accountants, consultants and
wealth managers. People are also gradually
relying on professional estate planners,
trustees, and wealth advisors,” it says.
REAL ESTATE TOPS
In the investment patterns of UHNHs,
there has been a realignment - with
real estate (mainly commercial), debt,
and alternate assets gaining ground at
the cost of equities. As part of alternate
assets, commodities attracted their
interest - as much as 72% of UHNIs
invest in commodities; of these, 40%
have invested about 5-10% of their total
assets in commodities, with gold and silver
continuing to be the most preferred.
IMPACT INVESTING
One concept that has caught up with the
UHNHs is impact investing. The study
says through impact investing, UHNIs
derive twin benefits - one, investing in
ventures that provide good returns (albeit
over a longer timeframe) and two, the
satisfaction of having created enterprises
that will make a lasting social difference,
a feeling that is hard to put a price tag on.
“While the general interest for impact
investments is high, professionals seem to
have the highest inclination - 67% have an
exposure to these investments. Key sectors
attracting impact investment include
financial services, clean energy and affordable
housing. In addition to the existing Indian
funds focusing on the segment, there is also
a trend towards impact-investment-focused
global funds setting up shop in India, which
will give further impetus to this sector,” says
the study.
[email protected]
Banking Frontiers
August 2016
11
Interaction
Focusing on Indo-African corridor
FirstRand Bank is focused on building a strong commercial banking
franchise in India. The key value proposition that FRB is bringing to
SMEs and mid corporates is its unique ability to help businesses
operating in the African continent.
G
has been able to build a strong brand
among those Indian corporates which
do business with African companies. We
are able to do this because we can offer
them a whole spectrum of services along
with funding. We provide clients with
advisory support and help them execute
their strategic plans. This may be in the
form of identifying potential targets for
acquisitions, identifying distribution
channels for their products and potential
joint venture partners. A client wanting to
have trade relations with an entity in Africa
can depend on us for a variety of products
and services. This is what distinguishes us
from other banks and is our USP.
. Ramaswamy, head, Commercial
Banking, FirstRand Bank India
branch, is a financial services
veteran having begun his career with Ashok
Leyland Finance way back in 1997 and
moved on to Citi, first in Citicorp Finance
India and later Citibank, handling different
roles, including business development,
franchise relationship management and
portfolio management focusing on SMEs.
He joined FirstRand Bank India in 2015 to
head its commercial and business banking
vertical. He elaborates on the bank’s
positioning and the value-add it can bring
in to Indian customers.
N. Mohan: Can you outline FirstRand
Bank’s initiative of banking in the IndoAfrican corridor?
G. Ramaswamy: FirstRand Bank
started Indian operations in 2008-2009
when it became the first bank from the
African continent to be granted a full scale
commercial banking license in the country.
It commenced its banking operations in
April 2009. We began as a small unit,
handling gold trade and forex. Today, we
have assumed the role of a bank of choice
in the Indo-African corridor for trade and
investment activity. Our primary focus
is on trade finance, investment banking,
fixed income, currency and commodity
products as also debt capital markets and
other structured products.
As a bank in India, our value
proposition is to offer banking solutions
and advisory services in the Indo-African
corridor to our customers. FirstRand
Bank, as you are aware, is present in the
major sub Saharan African countries and
there are no other banks in India which can
equal its reach in the continent. We have
the wherewithal to meet all the banking
needs of the Indian corporates wishing to
12
Banking Frontiers
August 2016
G. Ramaswamy points out the
bank can give a spectrum of
services along with funding,
which is a distinguishing factor
do business with their counterparts in the
African countries.
For an Indian Commercial Bank client,
apart from our ability to provide them with
advisory and banking solutions in Africa,
we provide full suite of banking products
in India.
We started commercial banking in
India in 2013. We have a loan book of
around Rs 400 crore, funding Indian
corporates to do business with their
African counterparts. In two years’
time, we intend to take this to `1000 1200 crore.
What are your focus areas while operating
in India?
Obviously, it is trade finance and
advisory services. FirstRand Bank
What distinguishes FirstRand Bank from
other foreign banks in India?
First, our total focus is on Africa.
Second factor that has indeed helped us
stand apart is the transparency and the
quality of service that we offer. When I say
transparency, I mean our pricing of the
services is well laid out on paper and there
are no hidden clauses. This improves TAT
in the delivery process and helps to remove
the possible angst in the customers.
Today, we have 750 highly satisfied
Indian customers, nearly 350 of them
borrowers, whom we have helped in
their dealings with their partners in the
African continent.
Broadly, we cater to sectors such
as chemicals and pharmaceuticals,
auto ancillary, mining equipment and
capital goods.
Can you speak about your technology
advantage?
We have been constantly updating our
technology platform to ensure seamless
online transaction banking experience.
From a client experience perspective, we
have the requisite tools to ensure consistent
delivery of collections, payments, trade,
forex and liquidity management solutions.
What are the allied services that the
bank provides?
Our endeavor is to be a thought partner
to our clients. This is mainly because most
of our clients have some connect with
African countries. For example, when a
customer from India has a trade relation
with a client in Nigeria, we offer 100%
assistance to him. It goes beyond the trade
finance deal. We do have an advantage
here because we have dealings with
approx. 120 banks in Africa and we have
presence in most of the major Sub Saharan
African countries by way of branches,
representative offices or correspondent
banking arrangements.
Another advantage we have is our
corporate finance business that has deep
understanding on whole of Africa. An
Indian customer can seek advisory help
from this team in order to have an impartial
assessment of the business proposal. The
team is wired to all the major cities in
‘Chalo Africa’ event sponsored by FirstRand Bank in Baroda to promote investment in Africa
Africa and it can expedite an authentic
view in couple of weeks whereas in other
cases, it may take months to obtain such a
feedback. It is sort of an end-to-end service
that we offer to the Indian corporates, who
are our customers. In short, it’s a single
window service we try and offer here.
Do you offer wealth management
(investment opportunities) to your
customers?
Yes, we help our customers to identify
avenues for profitable investment options
in Africa. As I said earlier, what we offer
are end to end solutions. The economies
in Africa are all emerging economies
although some of them are admittedly
volatile economies at the moment. But,
there is vast scope for Indian enterprises
to have the first mover advantage and we
help them in this effort.
[email protected]
African continent offers huge scope
C
ountries in the African continent offer huge scope
for India. According to official estimates India-Africa
trade turnover today stands at $70 billion. This has
prompted the government to seek investments from African
countries in reciprocation to the investments India has made
in setting up a backbone.
When it comes to banking, African countries have now
assumed the role of showing the world how to innovate. Some
years ago, these countries were so dependent on developments
in the developed world so that they can adopt the technology,
systems and processes. It is no more so. Take for example
M-PESA, the highly innovative mobile money transfer system,
which Kenya so boldly adopted way back in 2007. Today
M-PESA has millions of subscribers not just in the African
continent, but it is a system unabashedly copied by even some
of the so called emerging economies.
Undoubtedly, what helped the continent in innovating,
especially in the banking space has been the early adoption
of mobiles and the substantially huge number of handsets.
Quite a number of countries in the continent actually skipped
the landline revolution and went straight ahead in adopting
mobile technology. It is said that way back at the beginning
of the century, at least one in 10 Africans was using a mobile
phone. Today that number is pegged at 9 out of 10. Banks in
African countries were bold enough to exploit this situation
and to offer banking services through the mobile platform. The
continent also boasted of a dependable internet connectivity
and penetration, which also helped banks to go beyond
branches and offer online banking.
Despite strong growth in the banking sector, a large section
of the population in the continent remains excluded from the
formal financial services. Even in some of the better economies
in the continent, banking penetration is estimated to be at a
low of 36%. Commercial banks’ reach - in terms of branches
and ATMs as a proportion of the population - remains well
below global averages. However, banks have started to explore
alternative operating models, including mobile banking,
mobile branches and using third-party agents.
Banking Frontiers
August 2016
13
U
L
TION
O
V
E
UTION
VOL
RE
Cover Story
An Insight into Payments Business 2016
Banking Frontiers organized the fourth edition of PayNext Insights
conference, highlighting the recent innovations in the payments
space. Here are the highlights of the conference:
P
ayments system stakeholders
in the country have to take into
account the level innovation in
the payments system across the world, in
order to be ready to meet the increasing
customer requirements. New systems that
are becoming norms and the changing
customer expectations from banks and
payment service providers are challenges
these entities have to encounter. Today
14
Banking Frontiers
August 2016
there are non-banking companies
emerging in the payments scenario and
payments is now a critical factor for
the banks in their strategy formulation.
PayNext Insights 2016 held in Mumbai
recently discussed these core issues
with participants actively encouraging
discussions and deliberations.
Some of the topics that were discussed
at the summit were ‘Challengers vs legacy
banks- New Age of Payments’, ‘Forget the
wires and connect the wallets - Putting
user experience at the heart of the
multi-channel payments’ and ‘Building
customer trust in mobile payments
through improved authentication and
verification process’.
Arvind Mayaram, former finance
secretary, in his keynote address at
the conference stressed the need for
banking relationship and secondary
banking relationship. Now a plethora
of financial players are coming into the
platform in terms of wallets, payments
banks and small financial banks. For
the banks, it is crucial to make their
relationships with its customer primary
relationship and to on-board maximum
customers to its wallets. This will depend
how banks’ customer proposition is and
how relevant banks are to the customers.”
Arvind Mayaram giving his keynote address
digitization in the fast changing payments
landscape. “The world is changing so
rapidly that sometimes yesterday and
today collapse into tomorrow before we
can imagine. If ever the future has to
come as a shock, it is now,” he reminded
the audience.
He also said: “The proliferation of
electronic payments cards has changed
how people consume goods and services,
how they pay, how businesses manage
themselves, how government collects
their dues from the citizens and how it
distributes money to its citizens. Electronic
payments not only create a conducive
environment for the commercial activities
to expand, but also creates convenience
for customers and lead to higher rate of
financial inclusion.”
Mayaram pointed out that newer
banks are going digital from day one, but
the larger legacy banks have a set of their
own challenges to meet. The success of
payments banks will rely heavily on very
large number of small transactions.
Monish Shah, partner, Financial
Service Consulting, Deloitte Touche
Tohmatsu India, said the whole game
regarding the payments industry is
about how to capture the transactions
and monitor the relationship. “Deloitte
believes that over the next few years most
Indians will get comfortable with having
multiple bank accounts, which is the fact
today as well. Many of us have a primary
Panel Discussion 1: Challengers Vs
Legacy Banks - New Age of Payments
Moderator: Monish Shah, partner,
Financial Service Consulting, Deloitte
Touche Tohmatsu India
Shailesh Pandey, Executive VP
& head, Strategy & Branding, FINO
PayTech: Not only in India, but globally
too, we have seen a lot of new age digital
banks which are coming and they are
trying to challenge the existing banks.
FINO PayTech sees this is an opportunity
to banks rather than challenge. We should
look for partnerships with disruptive
banking models rather than be competing.
Deepak Sharma, chief digital
officer, Kotak Mahindra Bank: We are
a 21st century bank. So, we are not either
an incumbent or a challenger. Mostly
banks look at affluent and most affluent
customers. Globally, the disruptive
banking systems are penetrating
into deeper levels of the society. Our
partnership with Idea Cellular is to
leverage from this model. Payments
alone do not make a good revenue model.
Payments entities will need to leverage
from multiples options.
Ram Rastogi, head, Product
Development, IMPS, UPI, NUUP,
NPCI: Collaboration is always better to
effectively cater a huge market. Today,
$15.5 trillion is the payment market. The
entire market in India is growing at a
CAGR of 12% while world’s is 9%. Mobile
is becoming the center of payments.
Mobile phone will take the entire market
by 10 years down the line. We need to
harness the accessibility the telcos and
technology players are enabling.
Divyesh Dalal, India head - Cash
Management & Payments, HSBC: We
have 21 million credit cards, 600 million
debit cards and a billion bank accounts. If
the credits are not growing substantially
to catch up with the debits or the bank
accounts, money will be lying in the
bank accounts. UPI is going to become
the rail network of the payments ecosystem in the country. It is not merely a
wallet. It will help to move money from
a customer to another, irrespective of
Panel discussion on Challengers Vs Legacy Banks - New Age of Payments
Banking Frontiers
August 2016
15
Cover Story
Discussion on Foreget the Wires, Connect the Wallets - Putting User Experience at the Heart of
the Multi Channel Payments
whether the customer is with that bank.
It is transformational, revolutionary and
history in the making.
Kajal Ghose, CGM, SBI: SBI is a
legacy bank with 210 years of history. We
are innovating; otherwise we can’t survive.
We have more than 500 million customers
and 100 million transactions a day. With
the introduction of Jan Dhan Yojana,
most of the people have bank accounts.
Banks need to be innovative to cater
these customers. They have understood
the power of innovation. Technology
company or a disrupter comes in when
there is a weakness in the structure. Today
customers have gone digital more than
banks have gone digital.
Vikram Thiwathia, deputy director
general, COAI: The integration
between Jan Dhan, Aadhaar and mobile
is revolutionary thing in the banking
ecosystem in India. Now, an ecosystem
enabled through mobile and mobile
number has come into existence. The
question for telcos is how to cater the
growing customers seamlessly.
Hemanth Gala, director, Payments
Business, Flipkart: The current
phenomenon is that customers are riding
the change. The rate at which customers
are willing to face change is overwhelming.
It is time for collaboration. Every one
cannot do everything. Banks come with
new products. But can they bring out
solutions specific to segments? There are
16
Banking Frontiers
August 2016
different tiers of geography, age group,
income group etc. Specialized entities will
need to attend to specialized segments.
Panel Discussion 2 - Forget the Wires,
Connect the Wallets - Putting User
Experience at the Heart of the MultiChannel Payments
Moderator: Govind Joshi, partner,
Financial service Consulting, Deloitte
Touche Tohmatsu India
Manish Gupta, head, Products &
Consumer Banking Group, DBS India:
When we were kids, we used to get pocket
money in cash and we used cash to pay
at grocery shops. Now the landscape is
changing. Today, Paytm and Uber have
changed the way we use cash. Now many
grocery shops accept cards and mobile
wallets. Today, it is possible to live without
having cash. People use wallets as they
empower them to transact seamlessly. It
gives them good experience.
Rahoul Rajan, director & head,
Credit Cards, Standard Chartered
Bank: We are seeing a synergy between
cashless society and the ecosystem.
The telcos, the device makers and all
manufactures are coming together to make
a cashless society. From a customer point
of view, what is important is allowing them
not to remember passwords and make the
transactions simple and hassle-free.
Abhishant Pant, Payments Expert: I
have started living without cash literally.
Now I don’t carry cash with me around. I
am trying to understand what it is living
with online and card-based payments
in India. I even travelled abroad. Smart
phone has become the equipment that
leads the change in India while it is feature
phone which drives change when we talk
about Bharat.
K V Dipu, head, Operations, Bajaj
Allianz General Insurance: Banks
survive in the disruptive and innovative
industry because they acquire the profit
making start-ups. Banks won’t become
irrelevant till they do this. New entrants
do not have much bureaucratic layers
unlike existing players. This helps them
to plan and execute new ideas in an agile
and rapid way. Now what existing banks
do to have agility in operations is creating
new departments within themselves,
which use technology and are not under
bureaucratic layers.
Gaurav Zutshi, chief digital officer,
Aditya Birla Financial Services Group:
Jan Dhan Yojana has brought a huge
number of unbanked people into the forefront of banking services. Banks have got
700 crore new customers. But how are we
going to serve them is more important.
We need to look at what this customer
segment wants with a banking account.
They need an account to save and protect
money, invest it in profitable manner and
borrow when they need money. We need
to find solutions for their problems. This
will drive the digital transformation in
payments space.
Sohan Banerjee, head, Pre-sales
Consulting, AppDynamics: All the
wallets and online payments platforms,
whether they are high-end or super secured
platforms such as Apple Pay or M-Pesa,
are built on software. A lot of changes are
happening in the digital financial space
than people are anticipating. To succeed
in the platform, differential serving is
vital. For some customers freebies need
to be offered to on-board to the platform.
Panel Disc ussion 3 - Building
Customer Trust in Mobile Payments
through Improved Authentication and
Moderator: Munjal Kamdar, director,
Deloitte Touche Tohmatsu India
Bharat Panchal, head, Risk
Management & cost information
security officer, NPCI: The biggest
benefit of UPI is that it can hide customer
identity. UPI will make many things
disappear. Customers no more need to
reveal their names, addresses, account
numbers etc. Security is the foundation
of products from NPCI. Likewise, NPCI
has given importance to security for UPI.
Customers just need to look at the mobile
screen, then the iris is scanned and the
identity is established through a link to
the customers’ Aadhaar number.
Neeraj Dhawan, group president
and chief risk officer, Retail & Business
Banking, YES Bank: The language
barrier and product understanding
barrier need to be faced. Digital payments
need to be sensitive regarding the fraud
perspective. The payments app should be
able to rise alarm if a transaction happens
which is not supposed to happen from a
particular person.
Sundar Krishnan, CRO, Reliance
Life Insurance: Payments is going to
evolve around mobile and Aadhaar.
Regarding Aadhaar, there are few issues
that need to be addressed. There are
people who have more than one Aadhar
cards. They take it in different names,
different date of births or different places.
We need analytics and data to leverage
from digitization. We also need to keep
data safe and secure.
Prasanna Lohar, head, Technology
Digital Banking, DCB Bank: At DCB
Bank, we started using e-KYC to on-board
new customers. This is saving a lot of
time. We also launched Aadhaar based
cards. This is giving wow moment for the
customers. The pull mode of transaction
on UPI can be used by eCommerce
companies. On the cash on delivery mode
of eCommerce, the delivery boys can
initiate online payments. They can use the
pull feature, then the customer only needs
is to confirm the payment.
Unconference: Mobile Payments new
dimensions and existing challenges
Electronic Payments
Moderator: Brian Pereira, Editor –
Technology, Banking Frontiers
Representative of regulator: (Topic:
Electronic Payments and UPI): Banks
have inter-operability facility. But digital
wallets do not have this facility. Customers
need to have one wallet to operate across
the platform, though this causes a lot
Panel discussion on Building Customer Trust in Mobile Payments through improved Authentication
and Verfification Process
of issue while on-boarding customers.
Whether NBFCs should be allowed to be
a part of UPI is a question that need to be
discussed. Even though not immediately,
they have to be included in the UPI over a
period of time.
Representative of private bank:
(Topic: Mobile Payments & Wallets):
Will UPI kill wallets is the question of
the hour. In mobile payments, especially
considering a country like India, it
is important to create a favourable
eco-system.
Representative of private bank
(Topic: Ecommerce): Ecommerce
happens to be the most glamorous. How
eCommerce is structured right now, how
government is regulating the space and
how the industry is getting evolved will
decide its future.
Representative of public sector
bank: (Topic: Cards): Merchants are
openly discouraging the use of cards,
especially for transactions below Rs 500.
To solve this issue, waving of charges for
the card based transactions below Rs 500
can be considered. To encourage the use
of ATMs, first the transaction charges
were waived off. This was to make ATM
based transactions a habit. When it
become a habit, gradually the free service
got reduced.
Representative of public sector
bank: (Topic: Security): The most
vulnerable part of a digital security is
not the hardware or the software, but
the human-ware. Human beings are the
most vulnerable component which is
being targeted. The digital and online
security is getting evolved. We have to
train the users with a view to ensure that
the security is not compromised for the
sake of convenience.
Representative of service provider:
(Topic: Security): Security which works
well is the security which is invisible.
We should be able to reduce human
component as much as we can. Banks
should come with best solutions for the
security issues. They can’t always wait for
RBI to come and solve issues.
[email protected]
Banking Frontiers
August 2016
17
Cover Story
Unravelling Payments
Payment system functionaries, payment system providers and select
business heads involved in payments systems participated in a
roundtable on Payments OCFP organized alongside PayNext Insights
2016. Edited excerpts of the deliberations of the session:
Participants:
Siddharth Dhamija, Chief Growth Officer,
RazorPay
Jignesh Gandhi, COO, Essel Finance
Jiji Mammen, CEO, Mudra Bank
Sumit Chhazed, Co-founder, CREDR
K.R. Bijumon, CGM, Muthoot Finance
Utul Kapadia , Partner/Director,
CreditOne Payments
Palani Govindrajan, Chief Risk Officer,
TechProcess
Probhir Roy, Director, Paymate
Amit Bansal, Director, Citrus Pay
Pratik Agarwal, National Head, Products,
Indostar Capital
Peter Moedlhammer, Principal Product
Manager, ACI
Shekhar Ganapathy, GM, South Asia
Region, ACI Worldwide
Manoj Agrawal, Group Editor, Banking
Frontiers (Moderator)
Manoj Agrawal: eCommerce and
mCommerce offer many conveniences
today. We are moving to an eco-system
where cash is becoming less preferred. In
businesses also, definitely we need to move
into the electronic and digital payments
highway.
Siddharth Dhamija: Going global is a
dream for every company. But most of the
companies while expanding the market
to overseas, are trying to replicate the
business model they have in the domestic
market. When we move to foreign market,
we should be aware of the culture and
environment of that market.
Shekhar Ganapathy: It is the
responsibility of payments players to allow
Indian companies to globally pass on their
products and services. eCommerce reduces
the friction and cost of doing this especially
on services but also on manufacturing.
Barriers of customs are slowly falling. If we
18
Banking Frontiers
August 2016
Roundtable discussion in progress
have a compelling product and the world
is your marketplace, we need to have the
ability to facilitate transactions.
Jignesh Gandhi: We are segmenting
the market such as Indian, Middle
East, African etc. It is time to change
our mindset. We have to see the world
as our market. With today's electronic
environment, we can position our products
in multiple markets simultaneously.
K.R. Bijumon: If we set up cost heavy
products abroad, it would be very difficult
to sustain. We should use technology
and should have a good platform to go to
foreign markets. The regulatory aspects
of the foreign market have to be well
examined before overseas expansion.
Utul Kapadia: To expand abroad,
regulatory compliance is something
that is challenging. One other challenge
while going abroad is taxation. Every
government wants to tax you locally.
Palani Govindrajan: Before going
global, the important thing to consider
is that whether you have understood the
pulse of the customer. This is different
in underdeveloped, developing and
developed geographies.
Peter Moedlhammer: In Europe, we
have Eurozone that allows operating with
a single currency across the countries. In
other countries, there is no way. We have
to accept local currencies.
Probhir Roy: Everybody makes a
quick arbitrage on the currency rate things.
They are embedded into financial system's
DNA. Companies like MasterCard and
American Express run their business
based on what the bank gives as rate and
what actually they transfer. That is their
business model.
Amit Bansal: If we are talking
about a high-frequency low-value kind
of merchant, then wallet use cases are
more acceptable. If it is a high-value lowfrequency kind of transaction, then we are
not seeing wallet as a transaction mode
getting accepted at that level.
Pratik Agarwal: There are multiple
vendors, multiple gateways, multiple
wallets and multiple banks. Everything
is getting very fast paced that everybody
wants to catch up with others. The fraud
assessment is somewhere missed in
between catching up the market. We need
to address fraud in a better way. We need
to define what are those PIN numbers that
are generated, how is the linking of API,
how secure is the API etc.
[email protected]
Risk Management
Reputational risk is a serious issue
I
t is said that in a customer
service environment, the
language we use can have a
strong effect on how the customer
perceives our services in total.
One of the offshoots of the
operational risk management is
the reputational risk management.
This is one of the most important
risks applicable for all service oriented
industries, whether it is a bank or a
company providing back-end services.
The nature of banking business is such
that the customers’ trust depends on the
security being offered by the banks. Banks
hold sensitive data and any breach of this
data affects the customers. It is not only
applicable to banks but to service providers
and vendors to whom various banking
services are outsourced. Reputation, once
damaged, is very difficult to be repaired. It
is also difficult to re-create the confidence
in the minds of the customers.
MORE DAMAGING
Operational risk management is handled
by most of the banks, but reputational
risk management is not given its due
importance. Reputational risk will cause
more damages to the bank resulting
in erosion of the customer base and
subsequent business. Reputational risk is to
be handled tactfully at the initial stage itself
as and when any customer complaint is
received. Most of the customer complaints
are sorted out, whether it is technical or
otherwise, through the personal touch.
Reputational risk may arise due to many
factors like technical glitches such as
non-functioning of the system, failures
of hardware/software, human mistakes
like not providing proper attention to the
customer grievances and giving wrong
clarifications to customer queries, either
by the banks staff or by the outsourced
vendors in case the services are outsourced.
This is an era of digital banking. The
new generation banks like small finance and
payments banks will be opting for the latest
digital technology and will adopt
digital marketing. They may
come out with digital banking
applications enabled through
hand-held devices without the
need to depend on the costly
brick and mortar model. Some
V Babu
of the banks have realized that
with their existing CBS solutions
it may be difficult to implement digital
banking solutions and to introduce new
products. They have started looking for an
alternative solution even though it is a time
consuming and a costly affair.
EFFECTS OF DIGITAL
The traditional banks do not want to be
left behind in the digital revolution. If they
decide to not adopt digital technologies, it
will impact their business in general. The
operations of new age banks would not
be limited to urban areas, as they will be
making inroads into rural and semi urban
places and will be directly competing with
the cooperative banks as well.
The business of banks depends upon
customer satisfaction. Today there is doorstep banking with hand-held devices
facilitated by authorized of the banks. This
is going to be the future banking. With more
and more banks are adopting the digital
mode for payments, the risk associated with
it also increases.
Banks are coming out with a number
of mobile applications, which help the
customers to sit back and do their banking
transactions from their homes. In such a
scenario, if a bank is unable to satisfactorily
attend to customer grievances, it may not
only lose the customer but will have to face
the legal issues and subsequent claim for
damages. Today’s payment system takes
care of 24x7 banking needs and with more
number of banks adopting digital modes,
the reputational risk has taken the prime
spot. If any transaction in any of the modes
fails, or transactions are wrongly effected,
the bank’s reputation is at stake. The
concerned customer would first expect the
bank to sort out the issues and they do not
want to know whose mistake it was.
OUTSOURCING ENVIRONMENT
Today, most banks are outsourcing their
technology activities to outside vendors. The
associated risk also increases accordingly.
The outsourced vendor should be able to
sort out customer complaints, without any
delay, so that the bank will be able to satisfy
their customers. Unless the processes are
streamlined, introduction of any new
solution involves risk. The staff members
should be trained properly to provide the
necessary clarifications to the customers
instead of approaching the vendors for
guidance. A well drafted business process
or job card will definitely help the front
desk staff to attend various queries of the
costumers. One of the methods adopted
by banks is to go for a business process
re-engineering (BPR) to streamline
bank functions.
Generally, people avoid answering
queries, since they themselves do not know
how to deal with the situation. Proper
training can avoid this situation. Often
training is give on technology issues, but it
is not given on issues relating to customer
grievances. It is observed that banks tend to
neglect the first sign of trouble, taking it for
granted that it may be a one-off incident. It
is advisable to sort out the issue at the first
sight itself.
It should be remembered that with
every new technology, there comes the
risk associated with it and it is up to the
bank to identify the risk and mitigate it.
All customer complaints received should
be given due importance and it should be
sorted out immediately. Last but not the
least as the saying goes ‘Once bitten twice
shy’ the customer who receives a bad service
from a bank, never comes back again. A
good customer never argues, he just goes
to another bank.
Babu V., ex-Dy General Manager (IT) Bank of
India. Consultant at Finnoviti Consulting
[email protected]
Banking Frontiers
August 2016
19
Banking in the Gulf
Innovating for customer delight
Brian Pereira: What is the big marketing
challenge you face, specific to your region
or market?
Vikram Krishna: Emirates NBD is well
positioned at the moment and our main challenge
is keeping up with customer expectations. We
have to continue to innovate to keep customers
happy as well as manage revenues and costs
in a volatile economic environment. Having
said that, we see several areas of new business
opportunities even in this highly competitive
market. There is a lot to look forward to. We
will also continue to invest in making a positive
difference to the welfare of the community we
work in.
Vikram Krishna
Head of Group
Marketing and
Customer Experience
at Emirates NBD,
speaks about the
bank’s strategic
initiatives in developing
customer relations:
20
Banking Frontiers
How does the bank manage relationships with
its different types of customers?
Relationships are the cornerstone of good
banking and we invest heavily in training our
relationship managers in soft and technical skills
to equip them to provide the right advice and
support to customers. We also invest heavily in
digital tools to enhance the relationship function.
For example, our partnership with LinkedIn on
their Sales Navigator tool enables us to refine
our advisory capabilities through a precise and
targeted approach. Using proactive, targeted
identification and communication has enhanced
our customer engagement and interaction.
How often does the bank get in touch with its
customers? What are the different engagement
channels you have to interact and communicate
with these different customers?
As the world gets increasingly digital, we
are witnessing an increasing level of customer
sophistication. We adopt multiple approaches
to engage with customers and listen to their
needs. In addition to a direct relationship
approach, we also use our social media channels
to engage with and listen to our customers.
We continuously conduct social listening
using Social Relationship Management tools
to listen to discussions related to the brand
across different blogs, twitter, websites and
forums and react accordingly and proactively.
August 2016
How does the bank go about delivering
customer value proposition?
Our mission is to make our customers’ lives
simpler by providing solutions that help fulfill
their financial and complement their needs,
wants and lifestyle. This is a value that stands out
across our product and service offering, whether
it is using digital innovation to enhance our
mobile banking app or educating our customers
through informative ‘how to’ videos on our
YouTube channel.
How do you develop trust and relationships
with customers?
Among our biggest strengths is our ability
to provide customers innovative products and
services that deliver unparalleled value and
convenience. Our focus on innovation and
accessibility through a wide network of branches,
ATMs, mobile and online banking has helped
us win and retain a loyal customer base. This is
complemented by consistent and market leading
customer experience that matches the growing
expectations of our clients, which is especially
important for a large and growing brand in a
multicultural environment where customers’
needs and expectations vary.
Tell us about the type of customers you have.
How do you classify them?
We currently have over a million customers
across different nationalities that are serviced
through our segment-driven business model
that focusses on delivering market leading
value to Personal, Priority, Private, Business and
Wholesale Banking clients. Each segment has a
customized and extensive portfolio of products,
partnerships and channels to cater to their
unique needs and lifestyles. At the heart of every
customer proposition is innovation to enhance
and simplify a customer’s life be it through our
award winning mobile banking app or the suite
of hospitality, travel or business benefits we offer.
Tell us about the loyalty schemes that your bank
uses to retain customers.
We deliver loyalty through a relentless
focus on excellent service and reliable,
convenient banking. Our award winning
and innovative online and mobile banking
platforms offer unparalleled convenience
and our customers value our effort to
keep innovating to make banking easy.
As an example, our customers can remit
money to India in 60 seconds through
our DirectRemit proposition or deposit a
cheque within seconds through the mobile
banking app. In addition, we have a range
of card offerings with in-built loyalty
schemes that are packed with value and
benefits. We focus on offering substantial
value through our extensive partner
network that complement our customers’
lifestyles. Our partners include dining
experiences (Bon Appetit), Wellness
(LiveWell), Travel (Emirates Airlines
Skywards Card), Entertainment (Cinema,
events), Electronics (0% Instalment
Plans), Automobile Financing (preferred
interest rates across all leading car
brands), Lifestyle benefits (Manchester
United Card) etc.
What are the premium products that you
have and how do you market these to a
specific segment of customers?
We have a range of product and service
offerings across our retail and wholesale
business units that offer a range of benefits.
These include lifestyle benefits such as the
Emirates NBD Skywards Card or the
Emirates NBD SPG World Preferred
Guest MasterCard, experiential marketing
such as fine dining experiences for our
priority customers via our Bon Appetit
dining programme or an opportunity to
enjoy world renowned classical musical
talent though our Emirates NBD Classics
program. We also raise awareness of
financial planning through insightful
social experiments on insurance and
wealth management. In addition, we
provide our customers with valuable
learning tools and investment insights.
These include bespoke advice and regular
market analysis to our HNW or corporate
customers from the bank’s Chief
Investment Officer and Chief Economist
as well as the Purchasing Managers Index
research in collaboration with IHS Markitt
that provides helpful industry level insight
on key sectors in the economy.
Towards an omni-channel banking experience
E
mirates NBD bagged the 'Best Customer Experience
- Banking' award at the 2016 Customer Experience in
Financial Services Asia Awards in recognition of its exceptional
commitment to provide superior customer experience in
2015. Its strategic focus on offering an enhanced customer
experience in recent years has significantly contributed to
the massive growth of the bank. With increasing consumer
demand for digital and social banking, Emirates NBD has
made great strides in offering a sophisticated and convenient
omni-channel banking experience, with a particular focus on
new digital solutions via its online and mobile portals.
Commenting on the win, Suvo Sarkar, Senior Executive
Vice President & Group Head - Retail Banking and Wealth
Management, Emirates NBD, said: "We are honoured to
receive the award for Best Customer Experience. Providing a
superior customer experience has been at the core of both our
business model and corporate culture. Since our multichannel
transformation, we have been successful in offering an
unparalleled customer experience on each of our platforms,
be it at our branches or via digital banking."
Emirates NBD's recent AED 500 million commitment
towards digital innovation in banking has largely contributed
toward increasing the bank's customer experience proposition.
Almost all of the bank's products and offerings are available
both on its website as well as the Emirates NBD mobile banking
app, resulting in 87% of the bank's customers transactions now
taking place via digital channels. Highly commended for its
user-friendliness and connectivity, the platforms empower
customers to process all their everyday banking needs, manage
and track their finances and conduct sophisticated transactions
remotely and securely at their own convenience while still
having access to the bank's service ambassadors at all times.
The bank's customer experience proposition is built around
a strategic organisation-wide platform called 'Customer Service
Excellence Program' (CSEP) that ensures customer experience
related initiatives such as 'Customer Journeys' which involves
redesigning the customer experience across segments, products
and services; 'Proactive Services' and 'TOP (Trust, Ownership,
Personal Touch)' service model are implemented and sustained
across all channels while ensuring service consistency.
The CXFS Asia Awards, organised by Timetric, recognize
excellence by financial institutions in various geographies. The
awards have been created to identify industry leaders,
individuals and organisations setting new standards in
customer experience and engagement for the retail financial
services sector.
Banking Frontiers
August 2016
21
N E W S Banking in the Gulf
Qatar bank to use finger vein technology
Qatar’s Commercial Bank
has obtained approval
to introduce new finger
vein pattern recognition
technology at its ATMs. The
technology allows customers
to withdraw cash without the
need for a bank card or PIN
number. Commercial Bank
said it is the first bank in
Qatar and the Middle East to
obtain approval to deploy the technology. The technology will also be extended to
corporate and VIP customers to access their internet banking accounts using a finger
vein scanner. The technology maps the internal vein system within a finger, and will
only accept a living finger unlike fingerprint scanning, meaning that authentication
requires the customer to be present in person each and every time.
85 Arab banks among top 1000 global banks
Some 85 Arab banks are among the top 1000 banks in the world, according to
a ranking by the Union of Arab Banks, or UAB. Twenty of these banks are from
the UAE. According to a report by the General Secretariat of UAB, based on data
published by the Banker magazine, the top Emirati banks are National Bank of Abu
Dhabi, First Gulf Bank, Abu Dhabi Commercial Bank, Emirates NBD, Dubai Islamic
Bank, Mashreq Bank, Union National Bank, Abu Dhabi Islamic Bank, Commercial
Bank of Dubai, RAK Bank, Al Hilal Bank, Sharjah Islamic Bank, National Bank
of Fujairah, Bank of Sharjah, National Bank of Umm Al Qaiwain, Al Masraf Arab
Bank for Investment & Foreign Trade, Noor Bank, United Arab Bank, Invest Bank
and Commercial Bank International. UAE was ranked first for the number of banks
listed, Saudi Arabia came second (12 banks) while Lebanon and Qatar were ranked
third (10 banks).
Award for Doha Bank
Doha Bank has won the ‘Qatar Domestic
Trade Finance Bank of the Year’ award
at the Asian Banking & Finance Awards
2016 held in Singapore. The annual
awards recognized the best-performing
banks from 22 countries across a number
of categories. Doha Bank CEO Dr R
Seetharaman said the bank’s trade finance
operations boast decades of experience
in handling transactions in the local,
Middle East, and international markets,
and its vast network, combined with the
proven efficacy of the services, have been
instrumental in helping clients tap into
trade and infrastructure opportunities.
The bank supports international trade
through its representative offices in
London, Frankfurt, Singapore, Sydney,
Toronto, and Hong Kong among others.
Bank Muscat to train
staff in sign language
Qatari royals hike stake in Deutsche
The royal family of Qatar has increased its stake in Deutsche Bank to close to 10%.
The bank said Paramount Services Holdings and Supreme Universal Holdings,
investment vehicles of Sheikh Hamad Bin Jassim Bin Jaber al-Thani, now each
hold just under 5% of shares in the bank, up from just over 3%. This will make
Qatar Deutsche Bank’s biggest shareholder ahead of Blackrock. Deutsche Bank also
named lawyer Stefan Simon to succeed supervisory board member Georg Thoma
at the suggestion of the Qatari shareholders. Thoma had resigned from his post
in April.
UAE customers prefer digital banking
Middle class customers of banks in the UAE are more likely to interact with their
banks using digital channels. According to research by Collinson Group, 83% of
affluent middle class customers use banking and finance app in 2015, up from 36%
in 2014. The study also found that 42% of customers prefer to do their banking
online or via mobile app, while 32% prefer telephone banking and 26% prefer to
go into a branch. The research covered 6,125 of the top 10-15% of earners from
Australia, Brazil, China, France, Hong Kong, India, Singapore, the United Kingdom,
the United States of America and the UAE. In the UAE, 66% of those polled were
found to make digital payments whenever they can while 64% believed mobile
banking is incredibly important.
22
Banking Frontiers
August 2016
Bank Muscat has launched a program to
train its employees on using sign language
to that they can serve hearing impaired
customers in a more effective and efficient
manner. The bank is joining hands with the
Omani Society for the Hearing Impaired
for the purpose and it intends to have at
least one staff member in its main branches
who knows sign language and interact with
hearing impaired customers. The program
is being organized in association with Al
Tawasul Institute for Training.
UAE Exchange offer to Ugandans
UAE Exchange is offering
free bank transfer facility
to Ugandans and other
nationalities residing in
Uganda. The firm said
its customers in Uganda
wanting to send money using
its FLASHremit and Cash
Payout systems to any part of
the world can do so with no
service fee on every first bank
transfer they make. Customers
can also enroll for the Gold
Card loyalty program and
enjoy special offers and valueadded services throughout
the year. The ‘Send For Free’
promotional campaign offer
is valid for limited period. UAE Exchange commenced its operation in Uganda in
2006 and today it serves over 30,000 customers with money transfer and foreign
exchange services through its 4 branches in the country.
Bank Muscat on
Chip and PIN cards
Bank Muscat has distributed one trillion
Chip and PIN debit cards to its customers.
The bank arranged a function recently to
mark the occasion. The debit cards are
designed to make everyday purchases and
payments easier. Offering greater flexibility
and convenience, they provide access to
the bank’s largest network of branches,
ATMs and CDMs across Oman. The chipbased cards provide additional security for
transactions through PIN. The cards are
in conformity with international standards
and reflect the bank’s commitment to
ensure convenience and security for all
card transactions. While new customers
directly receive the Chip & PIN card, all
the bank’s existing debit cardholders will
automatically migrate to the new card at
the time of renewal.
Mumtalakat buys stake in KOS Group
Bahrain Mumtalakat Holding Company is buying an equity stake in Italy’s KOS
Group, a European healthcare group. Mumtalakat said KOS is focused on long-term
care and rehabilitation services, with additional activities in hospital equipment
management, diagnostics and cancer care services. This investment reflects
Mumtalakat’s continued commitment to grow its portfolio across multiple sectors
and geographies. Founded in 2003, KOS Group operates in the area of social health,
residential care for chronic illnesses, rehabilitation and mental health services,
and management of medical equipment and diagnostic centers. Mumtalakat will
hold a significant minority stake alongside CIR, the founders and existing majority
shareholders of KOS Group. Mahmood Hashim Alkooheji, CEO of Mumtalakat,
said the healthcare sector has solid growth potential and this transaction is aligned
with Mumtalakat’s objectives to create a diversified, global portfolio and achieve
sustainable investment returns.
Ahli Bank buys stake
in Iraqi bank
Summit on innovation
Some 450 senior GCC bankers are expected to participate in the Middle East
Banking Innovation Summit in Dubai in September. The summit will focus on
the latest banking techniques and innovations impacting the region’s banking
sector. Organized by Expotrade, the sixth edition of the summit will bring together
regional and international bankers who will discuss innovative practices that will
enable a transformation in the way banking is done. Among those participating
in the summit will be ADIB’s chief operating officer, Sagheer Mufti Sohail Zubairi,
CEO, Dar Al Sharia Islamic Finance Consultancy; Siamak Amirghodsi, VP - Data
Management & Advanced Analytics, OCC and Roshdi Osman, deputy CISO, Banque
Saudi Fransi. The summit provides a unique platform to develop new opportunities
for business growth, learn from leading industry thought leaders on trends and best
practices, participate in panel discussions and get a hands-on experience on some
of the newest innovative solutions designed to make banking simpler and efficient
for the consumer.
Bahrain’s largest bank Ahli United Bank
has raised its stake in Commercial Bank
of Iraq to 64.71%. The bank bought 25
billion additional shares in Commercial
Bank of Iraq constituting 10% stake. The
price at which the shares were bought was
not disclosed. According to the prevailing
share price of the bank, the deal would be
worth around 10.75 billion dinars ($9.20
million). AUB acquired a 49% stake in
the bank in December 2005. In addition
to Iraq, AUB has a presence in Kuwait,
Egypt, Libya, Oman and Britain.
Banking Frontiers
August 2016
23
Tech Integration
India Stack will give fillip to lending
India Stack is an effort of a team of highly skilled non-government volunteers
working relentlessly to make the dream of financial inclusion come true:
I
n the past 18 months, the government
of India has launched several programs
with the common objective of improving
financial inclusion. Undoubtedly, these
programs have made a huge impact on
citizens and on the economy. Aadhaar for
instance, now covers 940 million Indians.
Jan Dhan Yojna has resulted in 15 million
people getting bank accounts in a short
span of time. DigiLocker, the national
digital locker security system, and e-KYC
were welcome introductions too. And now,
everyone is eagerly awaiting NPCI’s UPI
and Bharat Bill Payment System.
While all these initiatives are directed at
financial inclusion, these have also opened
up multiple opportunities for millions
of entrepreneurs in the country. These
government programs have also impacted
Indian citizens in one form or another.
With a mandate from the regulator, e-KYC
has now become a standard formality. This
year, the 12th grade passing certificates for
all CBSE schools in India have been issued
to students not in paper-based format,
but as an electronic authenticated copy
via DigiLocker.
INTEGRATOR
But the possibilities - and impact - would
increase manifold if all these programs
or components were somehow tightly
integrated. And that is just what a
talented team at the Indian Software
Product Industry Roundtable, or iSPIRT,
has been trying to do for months. After
numerous discussions with stalwarts of the
aforementioned government programs,
with banks and with fintechs, iSPIRT finally
sees it all coming together. The integration
program is named ‘India Stack’.
The real glue to bringing it all together
is the government of India’s Open API
policy. When this finally happens, India
Stack will solve two key problems - it will
establish a much-needed ecosystem for
entrepreneurs in India to build businesses
24
Banking Frontiers
August 2016
Sharad Sharma emphasizes
that India Stack will be a truly
pay forward, conflict-free and
voluntary model
and it will give millions of Indians, who
live below the poverty line, access to
technology and services that were hitherto
beyond their affordability and access.
India Stack will prove that technology can
be a great leveller.
Says Sharad Sharma, co-founder and
governing council member of iSPIRT:
“India Stack is really a collection of these
technology building blocks which are all
public goods. The role of iSPIRT is to
conceptualize, architect and be involved
as ‘Sherpas’ to bring it to life. This is not
an iSPIRT initiative. Rather, this is India’s
effort to build public goods with the goal
of solving its problems with technology.”
SHERPA CONCEPT
iSPIRT likens itself to a team of Sherpas,
the porters who carry loads to base camps
during mountaineering expeditions. But it
is the summiteers who get all the publicity.
In this case, the summiteer would be a
government agency such as DeitY or NPCI.
“We follow the Sherpa model wherein we
combine the expertise of selfless volunteers
who are not in government. They are high
quality techies who are patriotic and are
willing to work in a completely selfless
manner – without money changing hands.
We have strict rules: the core team at India
Stack have foresworn any investments in
this area. We also agreed among us not
to invest in fintech or tech startups. We
don’t take any advisory from any of the
companies we work with. This is truly a
pay forward, conflict-free, and voluntary
model,” explains Sharma.
The strength behind India Stack is its
highly qualified and experienced team,
which includes a core Aadhaar team. The
team that builds India Stack is called the
Open API team. It includes besides Sharma
Nandan Nilekani, Pramod Varma, chief
architect, and Sanjay Jain, chief product
manager, UIDAI, Sanjay Swami, fintech
entrepreneur turned venture capitalist
and N.R.K. Raman, former CEO, i-flex.
The other factor that makes the team
confident is the modern architecture
behind India Stack. It has been deemed
one of the best systems in the world.
API set
Essentially, India Stack is a set of APIs
managed by public organizations,
developed by iSPIRT volunteers with
links to Digital India Initiative and JAM,
which is Jan-dhan, Aadhar, Mobile, to fuel
Innovation & Entrepreneurship. iSPIRT
believes India Stack is going to create the
necessary ecosystem to build applications
and products for the Indian market. The
system is being carefully architected to
ensure that it creates an opportunity for the
entrepreneur. The APIs, made available
under the Open API Policy, which enables
development of payment-enabled apps.
It includes Aadhaar for authentication,
e-KYC documents (safe deposit locker
for issue, storage and use of documents),
e-Sign (digital signature acceptable under
the laws), UPI (for financial transactions)
and privacy-protected data sharing within
the stack of APIs. The topmost layer in the
stack is the Consent Layer and it will be
introduced later this year.
PUBLIC GOODS
Sharma adds: “India Stack was based on a
simple idea. If you want a thriving product
ecosystem in India, then you need public
goods. So, in 2009, we decided to build the
right public goods for India. And we believe
that should be done without using public
money. In fact, that became our motto at
iSPIRT. If you are not using public money,
then the only way out is the open source
model. It is about the volunteer model to
build those public goods.”
iSPIRT’s goal has always been to work
with startups and to foster an ecosystem
in which startups thrive. When startups
create public goods, you can expect a lot
of economic activity.
Venkatesh Hariharan, Director,
Fintech at iSPIRT, says: “We looked at
various sectors such as education and
healthcare and felt that the financial sector
was right for this; with Aadhar serving as
the identity layer, it was easy to build on top
of that, especially for financial inclusion.”
India Stack enables apps that could
open up many opportunities in financial
services, healthcare and education
sectors of the Indian economy. What this
essentially means is that developers and
tech startups can now build software
and create businesses around the readily
available infrastructure offered through
India Stack, thus opening a huge potential
to tap into the booming smartphone
market in the country. Since the consumer
market in India is very large, such startups
could also hope for institutional funding
and gain from the early mover advantage.
Venkatesh Hariharan reveals
that many banks have shown
interest in working with
India Stack
PRIMARY AIM
The primary objective for India Stack is to
enable financial inclusion. The iSPIRT team
has worked on all these technologies and has
deep technical expertise. So it is geared to
playing the role of systems integrator.
According to Venkatesh Hariharan,
many banks have shown interest in
working with India Stack. He says the
response received from Indian fintechs
was overwhelming. So iSPIRT established
the Fintech Leapfrog Council (FTLC). It
is now working with a few banks, notably
Axis Bank, SBI, Bank of Baroda and IDFC
Bank. Representatives meet every three
months to discuss the technology changes
and updates.
“One of the areas where we see impact
is alternate lending. Lending startups are
saying that they are proud to be building
on India Stack. They benefit from all layers
of India Stack. These startups are using
almost all elements of the India Stack,”
adds Sharma.
IMPACT
There are 51 million SME’s in India that
employ close to 40% of India’s workforce.
Yet they contribute only 17% to the GDP.
The reason for this is that SMEs have not
been part of the formal lending system,
which requires them to be tech-savvy.
According to Google India, only 10 million
SMEs are technology ready.
But as India Stack takes shape, with
formal endorsement from the government
and regulatory bodies, this scenario is
likely to change.
“Going digital (and embracing low-cost
and accessible technology) will throw up a
lot of objective data, on the basis of which
you can lend to people. It will provide a
lot of transparency into transactions.
And people will have an incentive to stay
honest. With a clean credit record, one can
get a lower rate of interest. It also opens
up multiple sources of legitimate funding,”
adds Venkatesh Hariharan.
Sharma believes entrepreneurs can
also benefit from India Stack because
it reduces the cost of building a system.
“India Stack allows you to build systems
with small teams, to solve India’s problems
in the hinterland. And using India Stack is
free. It has no opinion on who will be the
winner. So the entrepreneur is safe using
it. They can build on top of it. e-sign is
already used extensively,” says he.
TRANSITION
India has always faced a challenge of
delivering services to its huge population.
But India Stack could get round this
challenge using inexpensive technology.
The nation is looking for a transition from
technology-poor to innovation-rich society
and India’s rich ecosystem of entrepreneurs
have a major role to play here.
The problems (read opportunities) in
financial services, healthcare and education
in India are all so large that it seems only
the right technology and entrepreneurial
brainpower can cost-effectively solve
them. Solving these scale problems should
mean great business sense too for the
entrepreneurs who might be involved.
With the participation of highly
talented entrepreneurs, thanks to an Open
API system, and backed by a supportive
government, India Stack might just
succeed. Recently, on his visit to India, Bill
Gates commented on India Stack: “India is
on the cusp of leapfrogging!”
[email protected]
Banking Frontiers
August 2016
25
N E W S Cyber Security
Cyber attack on Union Bank
Union Bank of India has revealed
that there has been an instance
of a cyber attack on one of its
offshore accounts. However, before
any fund could be transferred
surreptitiously, the trail was traced
and the transaction blocked, the
bank said. CMD of the bank Arun
Tiwari said the breach of the
‘nostro’ account - which a bank
maintains with an overseas bank in
foreign currency - took place in New York. He said the bank has already recovered
the money involved. The bank said a cyber security forensic audit has been ordered
to identity and plug gaps in the security system and to strengthen it.
Banks told to be vigilant
There is urgent need for very strong vigilance on sensitive remittance services by
banks in India, said RBI deputy governor R. Gandhi. Mentioning the cyber attack
attempt on Union Bank of India, Gandhi told the annual summit ‘Cyber & Network
Security’, while no monetary loss occurred in the incident, it was too early to say
how it all happened. He also said banks should detect such incidents on time, for
which banks should evolve robust crisis management strategy. Nonstop process of
awareness, education, re-enforcement, trials, tests and upgrades are compulsory to
ensure continuous cyber vigilance, he added. He also mentioned that banks should
adopt suitable control framework, timely security patches to the IT interfaces,
reconciliation of transactions in real-time basis and supervision of transactions in
order to prevent any eventuality.
New tool to secure
browsers
Israeli cyber security firm Check Point
has evolved a new browser extension for
fighting phishing attacks and malware
while keeping user credentials secure.
The SandBlast Agent for Browsers will
be available for Chrome and Explorer,
providing a lighter weight solution to
protect enterprises and SMBs. Check
Point said the tool will make security
very affordable for clients ranging from
enterprises to SMBs, and not just for the
heavy duty enterprise software. The focus
is on significantly reducing the risk of
phishing and other basic attacks that can
quickly evolve into major incidents.
Barclays to eliminate
passwords
SWIFT engages BAE Systems
The newly formed customer service intelligence team of SWIFT has engaged BAE
Systems to help it get ahead of cyber criminals targeting banks connected to the
global financial messaging service. The announcement comes after the analysis and
identification of malware that BAE Systems’ threat intelligence team was able to
link to an attack on Bangladesh Bank in February 2016. Malware analysis by both
BAE Systems and Symantec linked the crooks behind the Bangladesh account raid
to the hackers who ransacked Sony Pictures Entertainment’s systems back in 2014.
The customer security intelligence team will complement SWIFT’s in-house cyber
security experts and support SWIFT’s customer information sharing initiative to
strengthen cyber security across the global community.
Indians lose more money to internet frauds
Indians are losing more money to internet
fraud than those in other Asian countries,
according to a recent survey. Norwegian
telecom company Telenor, which carried out
a survey found that 36% Indians are cheated
online, which accounts to `8.19 lakh average
financial loss per person from internet scams,
compared with `6.81 lakh in Asia. Similarly,
the survey also found that 57% of respondents
know a friend or family member who has been
a victim of online fraud.
26
Banking Frontiers
August 2016
Barclays will start identifying customers
with voice recognition technology thus
eliminating the need for various questions
to be answered when customer access the
bank accounts over the telephone. This is
the latest step in the banking industry to
abolish passwords, moving to technologies
which banks believe are more convenient
for customers as well as more secure. The
system the bank is using learns enough
about a customer’s voice within just two
phone calls, removing the need for a
password or other identification to be
offered on future calls. It will be open to
all customers, but the bank will proactively
offer the service to those who call up
regularly, rather than those who tend to
use either the branch or website as their
main ways of contacting the bank.
Handling Frauds
SIB implements technology for channel
specialized fraud detection and remediation
An interview with Mr Raphael TJ, General Manager, Department of
Information and Communication Technology, South Indian Bank:
FIS: What is your view on the recent
introduction of Fraud risk management
mandates by governing departments for
Indian banks?
Raphael T.J.: Our mission has always
been to provide a secure, agile, dynamic
and conducive banking environment to our
customers. We have focused on deploying
the best technologies, standards, processes
and procedures where customer convenience
is of significant importance thereby resulting
in increase of stakeholders’ value. While
several initiatives were being undertaken
at the bank, implementing Fraud and Risk
Management was strategic in nature. Upon
recent mandates, we have taken a more formal
approach to updating our fraud detection and
channel systems in parallel to combat fraud.
How is South Indian Bank aligning to
mandated fraud risk initiatives?
Our vision is to be the most preferred
bank in the areas of customer service,
stakeholder value and corporate governance.
In line with this vision, SIB embarked on a
fraud risk management solution in early
2014 and has been monitoring card based
transaction with FIS fraud risk solution since
2015 and reaping value from the installation.
We are the in processes of fine tuning this
system to be in-line with the changing fraud
trends and dynamics of the requirements to
future adoption.
What are the challenges that you have
overcome during implementation?
South Indian Bank’s Department
of Information and Communication
Technology (DICT) underwent the planning
of financial crime management solutions
needs coupled with our banks processes
and unique customer behaviours and
demographics. All of this knowledge from
different internal departments and insight
had to be synthesized by DICT
and incorporated into business
requirements that translate
to a new fraud processes
and detection solutions, to
be further used by our fraud
analyst team, technology
partners, developer, architects
and QA teams to deliver the
channel specialized solution.
Why did you embark on the FRM initiative?
And what was the idea behind it
Implementing fraud solutions and
enabling fraud teams to use them efficiently
demands a complete set of different
understanding of the fraud elements. As fast
growing mid-scale banking organizations, we
constantly face new risks from evolving market
conditions, technologies and fast-spreading
fraud threats that often pose measurable
financial crime exposure to us. Our fraud
prevention strategies and operations should
be robust while maximizing existing systems
and team resources to deliver a Fraud risk
management solution across channels such
as ATM, POS, Ecom, Internet Banking
and Mobile Banking in phases, and later on
including other enterprise channels as next
phase.
What support did you get from Tech Players,
who integrated the applications?
FIS and South Indian Bank have a long
standing relationship. As part of an RFP
process that began in 2014, which constituted
a rigorous selection procedure with external
consultants, FIS FRM solution was selected
by SIB due to market presence across the
globe and investment in product innovation.
FIS track record with our bank in delivering
solution has been as per the desired quality.
What stage of fraud detection coverage has
the bank achieved as on date?
Our implementation is
complete towards card based
channels and we are progressing
towards fine tuning the internet
and mobile applications to
the latest versions before
implementing fraud detection
on these channels with specific
analytics and detection models.
Raphael TJ Since we are addressing each
channel nuance separately and
tackling them, this is not just a single solution
that fits all kind of channels. Our solution
addresses every unique aspect pertaining to
that channel and caters to minute details of
that very channel. In other terms, our FRM
is channel specific cross integrated solution
with an ability to add channels as we move
along time.
Where do you see yourself and digital
Indian banking 5 years down the line? Will
the growth in branch banking and ATMs
slow down once digital picks up?
Our department has won several awards
in the past and are implementing several
initiatives including moving to the latest CBS
version, upgrading our payment platform
and building an environment that adapts
to growing customer needs. Digital is the
way forward as customer demands are quite
diverse and digital is the only option forward –
to address anytime banking. While traditional
ATM channel will continue to sustain this is
why we are cautiously investing in the right
geographic zones and looking to penetrate
digital in more acceptable areas. Over the
next 5 years, our ecosystem will need to start
processing all types of payment transactions
without altering the core applications.
Customer banking usage will be become
device agnostic and input model will not
matter rather the processing and throughput
will become more critical.
Banking Frontiers
August 2016
27
Capital Markets
ICICI Securities has a strong IPO pipeline
Mridul Mehta, EVP, ICICI Securities, speaks about recent developments
in the IPO domain:
R
ecently, the IPO of Advanced
Enzyme Technologies attracted
116 times subscription. The
institutional portion was oversubscribed
94 times. The quota for HNIs (393 times)
and retail investors (11.6 times) saw
overwhelming subscriptions. Similarly,
L&T Infotech’s `1243-crore IPO had more
than 10.58 lakh applications, the highest
for any share sale offer in the last 5 years.
The IPO was oversubscribed by nearly 12
times. The year 2016-17 is likely to turn out
to be a record year for IPOs, going by the
number of draft prospectus filed so far. BRLM
There are a number of criteria for a firm
to be assigned the role of ‘Book Running
Lead Managers’ in an IPO. Profitability
track record, debt and valuations carry a
lot of weightage in the offerings of any IPO.
According to Mridul Mehta, EVP, ICICI
Securities, the decision of acting as BRLM
is based on various factors: the track record
and reputation of the company/promoters
plays a big role. Weightage is also given to
the business model and business structure
to ensure the sustenance, financial
health and profitability of the company.
“Valuation is a derivation of these above
factors and important to the extent of the
size of the company going public; a small
company may face challenges attracting
public investors,” he adds.
LEAGUE TABLES
This year, ICICI Securities has been
associated with a number of important
IPOs including that of Equitas, Ujjivan,
Quess, Thyrocare and L&T InfoTech.
So far, 8 IPOs have been handled by
the company. Mehta explains: “We top
the league tables for IPOs in FY201617 to-date and calendar 2016 to-date
(Bloomberg League Tables).”
The total amount of capital raised and
28
Banking Frontiers
August 2016
Mridul Mehta expects the
IPO momentum will continue
in the days to come in the
light of clearances given by
SEBI
fees earned through IPOs by BRLMs in last
and current financial years is significant.
IPO fees constitute noteworthy percentage
to the total amount of fee income earned
by BRLMs.
Mehta says this year has been a great
year for investors who seem to have an
appetite for good quality issues. “Till
now for CY 2016, the total amount of
capital raised in the primary market is
approximately `82 billion, compared
approximately to `130 billion for CY
2015. We have a healthy mix of fee income
from IPO/equity capital market activities,
as well as advisory fees from M&A and
private equity advisory,” says he.
BFSI IPO
A lot of investor interest has seen
generated on issues from the financial
services space, which is reflected in the
valuation of the existing listed stocks. The
IPO of ICICI Prudential Life Insurance
has also been announced. “The issues
of small finance banks like Equitas and
Ujjivan got tremendous investor response
and have delivered stellar returns to the
investors post listing. The IPO of RBL
Bank is around the corner and we expect
the trend to continue,” says Mehta.
The IPO market seems to have matured
in the last couple of years, with a healthy
appetite for quality and adequately priced
offerings. Mehta is of the view that the time
seems to be ripe for companies to come out
with IPOs. The stock market sentiment
appears to have become conducive for
seeing a growth in number of IPOs this
year. “With investors having benefitted
post listing from most of these IPOs, we
expect the number of IPOs hitting the
market to increase going forward. We have
a strong pipeline and going by the number
of documents filed and cleared by SEBI,
we expect the momentum to continue,”
he concludes.
[email protected]
IPO scenario hotting up
I
ndian companies could raise `14,508.11
crore through IPOs in 2015-16 with 22
corporates entering the capital market.
This amount constitutes 10 times that
of 2014-15. Infrastructure companies
dominated with about 33% issuance
coming form this sector. As many as 21 out
of 22 entities were oversubscribed, while
15 reported listing gain. The IPO market
is expected to see continued activity
in 2016-17, say analysts. There are 20
companies that have already secured
Sebi's approval to raise `7315 crore, with
11 still on the waitlist to mop up `5445
crore. Some of the notable IPOs in the
coming months will be RBL Bank, SP
Apparels and Dilip Buildcon.
Research Notes
30 SUCBs will not meet CRAR levels under extreme scenario
T
he CRAR of scheduled urban cooperative banks (SUCBs) rose
from 12.7% to 13% between September 2015 and March 2016.
However, 6 banks failed to maintain the minimum required CRAR
of 9%. According to the Financial Stability Report (FSR) released
by RBI on 28 June 2016, GNPAs of SUCBs as a percentage of
gross advances declined considerably to 6.4% from 7.7% and their
provision coverage ratio increased from 50.9% to 56.6% during
the same period. Further, RoA declined from 0.8% to 0.6% and
the liquidity ratio fell marginally from 35% to 34.8% during the
same period. A stress test for assessing credit risk was carried out
for these SUCBs using data as of 31 March 2016 and the impact
of credit risk shocks on the CRAR was observed under 4 different
scenarios. The results showed that except under the extreme
scenario, the system level CRAR of SUCBs remained above the
minimum regulatory required level. However, 30 out of 52 banks
would not be able to meet the required CRAR levels under the
extreme scenario.
A stress test on liquidity risk was also carried out using
2 different scenarios; (i) 50% and (ii) 100% increase in cash
outflows, in the 1-28 days’ time bucket. SUCBs will be significantly
impacted under a stress scenario - 25 banks under scenario i and
38 banks under scenario ii..
Many NBFCs investing in microfinance pools
S
ecuritization of microfinance loan
receivables (through DA or PTCs)
surged 125% to an estimated `11,500
crore in fiscal 2016 compared to `5075
crore in fiscal 2015 as MFIs opted for this
funding route to churn capital faster and
fuel growth. CRISIL estimates the overall
securitization market to have grown by
60% in this fiscal to `70,000 crore.
Gross loan portfolio of MFIs rocketed
84% between December 2014 and
December 2015. The yields at which
microfinance pools are placed - up to
11.5% - make them attractive and draw
new investors. Earlier, investors for
PTCs were mostly private banks, and for
direct assignments, public sector banks.
Last fiscal drew many NBFCs, including
MUDRA Bank. With the distribution tax
issue resolved, CRISIL expects renewed
interest from mutual funds and foreign
portfolio investors.
NBFCs’ performance much better than SUCBs
T
here were 11,682 NBFCs registered with the RBI as on 31
March 2016 and the aggregated balance sheet of the NBFC
sector expanded by 15.5% on a yoy basis in March 2016 as
compared to 15.7% in the previous year. Loans and advances
increased by 16.65%, while, total borrowings increased by 15.3%
yoy. Their financial performance has remained unchanged for the
last 2 years. Net profit as a percentage to total income remained
at 18.3% between March 2015 and March 2016 and RoA stood
at 2.2% during the same period. RoE increased to 10.6% from
10.3%. NBFCs’ GNPAs as a percentage of total advances declined
from 5.1% to 4.6% in March 2016 in September 2015. NNPAs as
a percentage of total advances also declined from 2.9% to 2.5%
during the same period. NBFC CRAR increased from 23.8% in
September 2015 to 24.3% in March 2016. 7 NBFCs were unable
to meet the regulatory required minimum CRAR of 15% as of
March 2016.
PSL certificates can potentially impact growth in long term
S
ecuritization transactions in India soared to their highest level
in 8 years, reaching `70,000 crore in fiscal 2016, marking
a 60% jump over fiscal 2015. Both direct assignments (DA) and
pass-through certificates (PTCs) showed growth. CRISIL estimates
around half of the overall volume was purchased by PSBs. Transaction
volume in non-priority sector lending assets also surged to 25% of
the total securitized assets. Transaction volume in DAs surged 70%
to `44,700 crore in fiscal 2016 compared with `26,000 crore in
fiscal 2015. Likewise, transaction volume for PTCs increased 44%
to `24,500 crore from `17,000 crore.
In fiscal 2016, the retail loan book of scheduled commercial
banks grew 19.4%. Nearly a fifth of this growth could be attributed
to direct assignments. CRISIL expects the securitization market to
grow in the near term, as banks grow retail assets by securitization
through DAs till such time corporate credit quality improves.
[email protected]
Banking Frontiers
August 2016
29
Research Notes
Delinquency in tractor loan financing increases
T
he total tractor loans disbursed in 2015
were almost 8x of the volume disbursed
in 2009. Higher delinquency reported
in 2015 has proven that the increase in
disbursement volume was not in line with
the income level and debt serviceability of
tractor owners. Of the top 4 NBFCs that are
financing tractor loans currently, only one
had a prominent presence in 2009, which
contributed over 75% to the disbursements
in 2009. However, in 2015, the top 2 NBFCs
contributed only 70% to the loans disbursed
indicating an increasing competition in this
segment. The relative market share of these
5 NBFCs also changed several times during
2009-2015 with some companies choosing
to grow despite increasing delinquencies
while others reducing their disbursals,
says a report authored by Mithilendu
Jha, associate director, India Ratings and
Research (Ind-Ra).
Nearly 15% of tractor loans disbursed
during 2014 and 2015 were overdue for
more than 3 months as of March 2016.
The average delinquency rate of close to
12 months of seasoned loans was only 9%
during 2009 amid deficient rainfall and
low agriculture output and still it took
Vintage-wise 90+dpd of Tractor Loans of Four NBFCs
(%)
18
15
12
9
6
3
0
2008
2012
1
5
9
2009
2013
13
17
21
25
29
2010
2014
33
37
41
45
2011
2015
49
53
57
61
65
(Months since origination)
nearly 2 years for the delinquency rate
and agriculture output growth rate to
completely normalize.
The continuous, gradual increase in
the delinquency levels of the top tractor
loan financing NBFCs since 2012 indicates
that it is not only the last 2 consecutive
monsoon failures and weakness in the farm
sector but also the increasing competition
among NBFCs which contributes to the
increased delinquency levels.
Ind-Ra believes that recovery to the
lowest delinquency levels observed during
2012 may not be immediately possible
even after a favorable monsoon this year.
Ind-Ra believes that the consecutive
monsoon failures have created severe
impact on the farm sector and tractor loans
now than in 2009 and hence a recovery is
likely to be protracted.
Over 25% increase in MSP for both
food grain and non-food grain crops
and nearly 4% drop in key input cost
(diesel and fertilizer) did lessen farmers’
problems. Ind-Ra believes that it will take
at least a couple of quarters before the
delinquency levels in tractor loans come
close to the lowest levels observed during
2011 based on the historical correlation
between sales growth and delinquency.
Tractor loans turning costlier
T
hough the annual disbursement of
tractor loans has increased by nearly
10x in the last 9 years, the average interest
rate charged on tractor loans has largely
gone back to the levels prevalent during
2007. During 2Q10, the average interest
charged on tractor loans was the lowest
and these loans were 8-10% costlier
than average mortgage loans. However,
since 2014, tractor loans have become
costlier than mortgage loans as indicated
by the increased spread of 12-13%. The
increased spread between tractor loans
and mortgage loans could be attributed to
the gradual increase in the perceived risk
of delinquency in tractor loans and it is not
likely to come down too quickly.
Growing risk in the farm sector in the
Average Interest Charge on tractor Loans
(%)
25
23
21
19
17
15
Mar 07
30
Nov 07
Aug 08
May 09
Banking Frontiers
Mar 10
Nov 10
August 2016
Aug 11
May 12
Mar 13
Nov 13
Aug 14
Jun 15
last couple of years has resulted in credit
rationing by financial institutions. There has
been a gradual decline in medium term and
long term credit supply to the sector, which
reduced to nearly 25% in FY15 compared
to nearly 40% a decade ago. `845 billion of
institutional credit flowed to the agricultural
sector at an annual growth rate of 19% in
FY15. Nearly 70% of this total supply came
from commercial banks.
Ind-Ra believes that the government’s
renewed focus on the farm sector will
alleviate the concerns over the delayed
recovery of the sector. The central
government has budgeted nearly `360
billion for agriculture and allied activities
in FY17.
[email protected]
N E W S Tie-ups
Axis Bank, Vistara to launch credit cards
Axis Bank is tying up with Vistara
Airlines to launch three travel
credit cards. The co-branded
cards will be unveiled in midJanuary 2017 and will offer a host
of privileges and benefits to the
business and leisure travelers of
Vistara under the carrier’s Club
Vistara frequent flyer program.
Vistara has just crossed one lakh
passenger mark. Rajiv Anand,
group executive and head-Retail Banking, Axis Bank, said this is the bank’s first
co-branded travel card in the domestic space and currently there are three types of
cards under this partnership. The personalized benefits from the co-branded credit
card offering will depend on the frequency of one’s travel, starting with the base
card for occasional traveler to a super-premium credit card for frequent flyers. The
product suite is 3-tiered with an entry level card targeting new users and occasional
travelers while two other categories targeting the existing customers under the
premium and super-premium segment for frequent flyers.
SBI, Indian Oil in
FI tie-up
State Bank of India and Indian Oil
Corporation have signed an agreement to
implement financial inclusion program for
farmers through the oil company’s Kisan
Seva Kendras. SBI will provide farmers
access to banking services by using
the IOC’s kiosks and supplement their
incomes by earning revenue on banking
transactions. IOC has set up around 6500
KSKs in rural and remote areas. The
IOC kiosks offer agricultural services like
diesel, seeds, fertilizers, pesticides, etc to
the farming community. The initiative will
help farmers avail facilities and various
banking products and services.
SBI, Flipkart in tie-up
OYO to use PayZapp
Axis Bank partners with LIC
HDFC Bank and hotel rooms aggregator
OYO is in partnership for the bank’s
payment solution PayZapp. OYO said the
tie-up will enable customers to directly
link their debit and credit card to PayZapp,
and book an OYO by making the payment
in a single click. The company said with
PayZapp, users do not need to preload
money each time they transact - and can
thereby access a convenient and secure
way of payment. OYO’s founder and CEO
Ritesh Agarwal said OYO has a superior
app booking and room-service experience.
Making payment frictionless is the next step
in wowing the customer and it has received
positive customer feedback on the tie-up
with PayZapp and how it complements
the three-tap booking experience currently
offered by the OYO app.
State Bank of India has concluded a partnership with Flipkart to offer the latter’s
customers a pre-approved EMI facility to purchase products on the retailer’s website.
The bank said the objective was to provide finance to credit worthy individuals
and not just credit card holders. The EMI facility will be available in tenures of
six, nine and 12 months. SBI will provide overdraft facility to a pre-qualified set of
customers for transacting on Flipkart for a minimum purchase of `5000. Rajnish
Kumar, MD (National Banking Group) of the bank said with the introduction of this
product, EMI facilities on Flipkart are now not limited to just credit card holders.
The objective is to provide finance to credit worthy individuals through an endto-end online facility without having to go through the process of applying for a
personal loan for simple purchases.
Axis Bank and LIC of India are joining hands in one of the largest bancassurance
ventures so that the bank can sell LIC products. Branches of Axis Bank will now
be selling LIC policies. To begin with the bank’s branches in Bengal, Bengaluru
and Panchkula in Haryana will start selling these policies. Mukesh Gupta, ED,
Bancassurance, LIC, said the coming together of the two major reputed organizations
would enable them to combine and utilize the synergies for enhancing customer
satisfaction. Rajiv Anand, head, Retail Banking of Axis Bank said over the past five
years, the life insurance business at Axis Bank has grown at a CAGR of over 25%.
SVC Bank to sell HDFC ERGO products
Shamrao Vithal Cooperative Bank and HDFC ERGO General Insurance Company
have concluded a bancassurance partnership so that the bank can provide its
customers with a range of non-life insurance products. The bank will sell the
insurance products through its 194 branches in 10 states. HDFC ERGO MD and
chief executive Ritesh Kumar said the alliance is an important milestone for the
company as bancassurance is an important part of its growth strategy. It is the
company’s endeavor to continuously innovate and make its products more widely
available to consumers from all sections of the society, he added.
Banking Frontiers
August 2016
31
Pinnacle
Pinnacle is a section on SMART MOVES in Banking Frontiers. Please contact Saaniya Naik on 77380 88612 ([email protected]) or
Wilhelm Singh on 77383 87634 ([email protected]) or phone us on +91-22-29250166 or fax: +91-22-29207563. To apply, please email in
your resumes to [email protected]
Select Openings
NPCI
Position: AVP - Nach/ CTS Technology
Place of posting: Chennai
Educational Qualification: B.E / B.Tech or
equivalent in (IT, Computers or Electronics
& Telecommunication) / M.sc / MCA,
with relevant experience in Banking
and Payment Systems. Minimum postqualification experience of over 15 years
in relevant area, with leadership exposure
on deployment and Management under
Banking and Payment Domains.
Job Code: AVP/CTS/NPCI/01816
Experience: Project Management - Signoff project plans and monitor the project
progress at regular frequency
Review project status and provide
necessary guidance wherever required.
Arrange/facilitate to schedule committee
meetings if required. Escalate to senior
management any envisaged abnormal
delays. Provide out of box / innovative
solutions to overcome project obstacles
Requirement gathering and understanding
the requirement to provide feasible
solution in cost effective manner. Project
management along with budget utilisation
capabilities to effective management of
financial benefits to the organisation and
customers.
NPCI
Position: VP - Head Cloud and IT Infra
Engineering
Place of posting: Mumbai
Educational Qualification: UG -B.Tech/B.E. Any Specialization
PG - Any Postgraduate - Any Specialization,
Post Graduation Not Required
Doctorate - Any Doctorate - Any
Specialization, Doctorate Not Required
Job Code: VP/CIT/NPCI/01816
Experience: Infrastructure Design &
32
Banking Frontiers
August 2016
Engineering: Well versed with virtualization
of compute, storage and networks. Expert in
cloud migrations and consolidations. Expert
in Data center technologies and standards.
Stay up to date with current technology
market trends and evaluate how new
technologies can benefit Best Buy;
engage in discussion with and present
ideas to senior IT leadership. Oversee,
drive and provide guidance on the endto-end process of Infrastructure life cycle
Educational Qualification:he job holder must
have related knowledge of and experience
in dealing in a complex legal environment
and RBI regulations. Knowledge of all
aspects of Commercial Banking with a
background in Corporate Banking / Trade
Finance / Operations. Knowledge of Group
Credit systems, policies and procedures.
Knowledge of local laws and regulations.
Good Analytical skills to analyze information
received. Good verbal and written
We are Hiring !
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management including requirement
gathering, designing solutions and creating
/ executing project plans. Collaborate with
various stakeholders to ensure systems and
processes are leveraged efficiently. Stay up
to date with Infrastructure industry trends.
Drive, oversee and provide direction on
technology infrastructure roadmap creation
and execution.
Responsible for overall development and
maintenance of infrastructure standards
and ensuring projects are in line with
defined roadmaps.
HSBC Bank
Position: AVP Credit Services : 00007Z77
Place of posting: Mumbai
communication skills. Good interpersonal
skills. Corporate Banking or related
experience of min 3 years
Job Code: AVP/CS/HSBC/01816
Experience: Responsibilities include:
Ensure the highest levels of service both
internal and external customers, and with
a objective of protecting the interests
of the bank at all times. Checking of the
security documents and recommending
changes in HUB limits, etc. based on review
/ completion of necessary documentation;
while ensuring adherence to pre-disbursal
comments. Ensure Security Creation and
perfection. Track CARM approval comments
/ conditions and following up with the
business on due dates.
BANKS & FINANCIAL INSTITUTIONS LEVERAGE BIG DATA
FOR ACTIONABLE ANALYTICS
FINESSE BAGS TWO AWARDS AT
NEXGEN BANK SUMMIT
A
s fraudulent activities
become
more
sophisticated, so must the
techniques used by banks
and financial services to
address it. Advanced realtime detection methods
play an essential role in
halting fraud and predicting
the outcome of suspicious
Finesse wins “Best Business Intelligence Practice in BigData” activities accurately.
@ BigData Anaytics & Insights Summit 2016
Today, the ways frauds
are being committed have changed from an opportunistic crime committed by smalltime fraudsters to ones that appear quite normal, yet can be harmful. Because of the ways
banking has evolved with multiple sophisticated products and the growth in channels and
services, fraud identification needs to be addressed in real-time in its entirety.
Most frauds go undetected through simple pattern based detections, simply because
the fraudsters are getting smarter and patterns change often. Thus any delayed action is
actually no action at all and such frauds which go undetected in real-time can cause huge
financial and reputational losses. Hence real-time interventions are required.
Finesse offers real-time, intelligent solutions that empower banks with instant
insights enabling influenced outcomes of deeper customer engagement and fraud-free
transactions. The software identifies and solves complex problems, all in real-time.
These are in the areas of customer experience management, contextual right-sell, fraud
monitoring and compliance. The approach is multi-disciplinary involving artificial
intelligence, statistical modelling, neural networks, psychology and behavioural sciences.
Combined with cutting-edge technological capability, the solution delivers right-time,
actionable insights that are unparalleled.
The Banking & Finance, Retail and the Telecom sectors seem to be leading with the
adoption of big data strategies to monitor and prevent fraudulent activities. Finesse’s
Big Data solutions offer real-time processing and enable ad hoc queries for actionable
analytics. Finesse delivers Big Data systems with unprecedented speed, scale and
flexibility to its clients.
FINESSE AWARDED BY LEADING CO-OPERATIVE BANK IN
KERALA TO PROVIDE CLOUD SERVICES
A large Co-operative bank in Kerala chooses Finesse
to provide cloud services on IBM Softlayer. Finesse
brings to the table our expertise in giving the
highest performing cloud infrastructure available
to our clients. We will be providing a platform that
takes data center that is full of the widest range of
cloud computing options, and then integrates and
automates their IT operations. The cloud platform
Ajay Alex, Practice Head - Banking,
Finesee Global
will provide with a fast, resilient and seamless
network to deliver all services in a single management system. This will automate the
processes of the bank thus reducing huge infrastructure costs and save time; leading to
better performance and productivity.
250+ Professional Team
l
l
l
AWARDED THE EMERGING BFSI TECH VENDOR
WINS “THE BEST BUSINESS INTELLIGENCE PRACTICE IN
BIG DATA” AWARD
l
l
Finesse wins NexGen Bank “Emerging BFSI Technology
Vendor of the Year 2016”
Finesse, the Most Trusted Systems Integrator was declared
winner of ‘The Emerging BFSI Tech Vendor of the Year
2016’ at The NextGen Bank Summit Awards 2016 and the
winner of ‘The Best Business Intelligence Practice in Big
Data for the Year 2016’ held at Vivanta by Taj, Bengaluru.
The Awards recognised companies and individuals
who have transformed the banking industry and provided
real value back to their customers. It honoured those who
have demonstrated unparalleled innovative excellence
in creating the path for bank of the future thus giving an
opportunity to reflect on the best of the last year.
Finesse was narrowed down and chosen from among
many other companies as the Emerging BFSI Tech
Vendor of the year and the Best Business Intelligence
Practice in Big Data for the year 2016. The awards
committee evaluated all the company nominations on
various criteria. This assessment was complemented
by how Finesse implemented solutions for their BFSI
clients as presented in the nomination entries.
Sunil Paul, Co-founder and COO of Finesse said,
“Finesse always strives to be a forerunner in delivering
innovative solutions and services to all our clients, making
us the Most Trusted Software Integration partner for our
clients. We also have a thriving Big Data and Analytics
Practice where we use Business Intelligence and help
organisation to establish a roadmap for Big Data and
unleash the power of analytics.
We are grateful to the
esteemed panel of
judges and the Awards
Committee for bestowing
us with this Award.
We look forward to
maintaining and excelling
in innovation backed
by 100% consistent and
timely delivery.”
l
150+ Enterprise Clients 20+ Nationalities 15+ International Awards 10+ Global Locations
[email protected] www.finessedirect.comwww.facebook.com/finessedirect
Banking Frontiers is pleased to present SMART MOVES, which is its HR section. This section will be of immense help to Banks, IT Companies, Financial Institutions and Insurance Companies which require resources with domain knowledge. They can advertise for people and
products in this section. This section is beginning with a listing of key openings in the industry. To advertise in this section and take advantage of this opportunity, please contact Shirish Joshi on 7738383850 ([email protected]) or Malaika Monteiro on
9004446030 ([email protected]) or phone us on +91-22-29250166 and
fax: +9122-29207563.
Unidus Services Manpower Private Limited
Designation: Team Leader - Insurance Process
Location: Navi Mumbai
Job ID: 19078532
Description: Experience as Team Leader in the
insurance process. Will be responsible to Look after
retention and verification.Open to work in rotating
shift timings.
Careerist Management Consultants Private Limited
Designation: AVP/ Sr. Mgr - Credit - Cv/ce Loans
Location: Rohtak, Delhi
Job ID: 19084283
Description: Accountable to handle the credit
appraisals and analysis for the preparation of Credit
Note to assess the credit worthiness of clients for
sanctioning the loan.
Shapers Management Services Private Limited
Designation: Credit Card-Credit Underwriting
Location: Navi Mumbai
Job ID: 19090347
Description: Credit Appraisal of Credit Card
applications within defined guidelines, Evaluation of
applications of customers for credit cards, use
performance history along with liquidity, debt/asset
management, and profitability ratios to assess credit
worthiness in evaluation.
Krehsst Recruitment Solutions
Designation: Credit Manager: Housing Finance
Location: Mumbai
Job ID: 19065643
Description: Underwriting & making proposals of
business loans and other products as per location
requirement (Home Loan, Housing Loan, Mortgage
Loan, HL).
Job House
Designation: Credit Manager
Location: Jaipur
Job ID: 19091944
Description: Must have good experience in some
finance company, Must have worked as a credit
approval authority in some loan companies leading
finance company(nbfc), Should have good experience.
Genuine Management Services Private Limited
Designation: Assistant / Deputy Manager: Finance &
Accounts
Location: Gurgaon
Job ID: 19092129
Description: Profitability & Variance analysis for
vehicles, spare parts and service agreements,
Computation of cost and profitability for institutional
tenders and marketing schemes, Preparation of
monthly MIS & adhoc analytical reports as required by
the management.
Vsourze Consultancy
Designation: Credit Controller
Location: Mumbai
Job ID: 19094727
Description: There should be a close liaison between
the credit controller and the marketing /sales
department so that credit issues are resolved
smoothly.
Wize Careers Consultants
Designation: Anti Money Laundering AM / Manager
Location: Delhi, Gurgaon
Job ID: 18433637
Description: Extensive knowledge of AML monitoring
tooling (MANTAS, FIRCOSOFT, CLIFF), can draft
Management Information analyses and are skilled to
use applicable tools.
People Tree Consultants
Designation: Finance- Risk & Control
Location: Mumbai
Job ID: 18915928
Description: Looking for professionals in the Core
finance domain in the areas of management
accounting, financial reporting and accounting
controls for a captive arm of a leading foreign bank.
Daedalus Consulting Private Limited
Designation: Head - Treasury
Location: Bengaluru / Bangalore
Job ID: 19010789
Description: Managing local credit lines for commodity
businesses of the client's company in India which may
include negotiating new lines or amendments to
existing lines as well as revising facility documentation.
Jobseeker - To apply for above jobs
1. Logon to www.monster.com
2. Type the Job ID in the "Search Job" box
3. Click the "Go" button
34
Banking Frontiers
August 2016
Universal Hunt Private Limited
Designation: Country Treasury Head
Location: Mumbai
Job ID: 18974054
Description: Looking for country treasury head.
Confluence Consulting India Private Limited
Designation: Relationship Manager - Wealth
Location: Kolkata, Jaipur
Job ID: 19015218
Description: To research, investigate and update
themselves on available investment
opportunities/financial market trend to determine
whether they fit into clients portfolios.
Mancer Consulting Services Pvt Ltd
Designation: AVP-Trade-Finance-Operation
Location: Pune
Job ID: 19011275
Description: The incumbent will need to manage the
portfolio of sourced transaction processing for Trade
Finance ops globally (Primarily Asia & US/Emea). The
span of control for the AVP would be around 30/40 FTE.
Lane Consultancy
Designation: Manager – Secured / Unsecured Loans
Location: Chennai
Job ID: 19082756
Description: The person will be responsible for
executing CreditMantris strategic customer engagement, sales strategy and lender relationship
management.
People Prime Worldwide Private Limited
Designation: Investment Banking
Location: Delhi, Hyderabad / Secunderabad
Job ID: 19095849
Description: 2-9 years of back office operations in
brokerage / investment banking and should possess
business knowledge in US/International markets (back
office).
The Search House
Designation: Head Trade Finance/ CFO
Location: Delhi
Job ID: 18964168
Description: 18 - 25 Years in a large international
trading or manufacturing company, preferably
engaged in bulk commodities.
Employers - To buy Monster products and services
Call us at 1800-419-6666
or
email us at [email protected]
Banking Frontiers is pleased to present SMART MOVES, which is its HR section. This section will be of immense help to Banks, IT Companies, Financial Institutions and Insurance Companies which require resources with domain knowledge. They can advertise for people and
products in this section. This section is beginning with a listing of key openings in the industry. To advertise in this section and take advantage of this opportunity, please contact Shirish Joshi on 7738383850 ([email protected]) or Malaika Monteiro on
9004446030 ([email protected]) or phone us on +91-22-29250166 and
fax: +9122-29207563.
One March India
Designation: Relationship Manager Corporate Banking
Location: Bengaluru / Bangalore, Mysore
Job ID: 19094271
Description: As an RM CBS the candidate is required to
acquire and manage corporates in the transaction,
Banking business in order to enhance current account
balances and generate revenue through fee income
such as Trade, FOREX, CMS and CIP.
Futurz Human Resources Solutions Private Limited
Designation: Req (Female) AVP/Asst Vice President for
Banking
Location: Mumbai
Job ID: 19068948
Description: Individual will be required to manage
teams across Operations. They will be involved in
leading all the deliverables/Service Level Agreements
in accordance with Bank policy and applicable
regulations and organizational priorities.
Flexi Careers India Private Limited
Designation: Product Control - AVP/VP
Location: Chennai
Job ID: 19079746
Description: Develop a sound understanding of risk
positions through detailed discussion with traders and
risk managers on risk positions so that an appropriate
P&L model is deployed with focus on key risk items
and market moves.
Sofomation Energy
Designation: Assistant Manager-Actuarial
Location: Mumbai
Job ID: 19090111
Description: 3-5 years of relevant Actuarial experience,
An active student member of the Institute or Faculty of
Actuaries and / or Indian Institute of Actuaries with
minimum 8 exams cleared.
Pinnacle Placements
Designation: Acquisition Manager – Digital Banking
Location: Delhi, Noida
Job ID: 19074183
Description: Have good awareness of Corporates with
entry point links in those corporates, Good Communication & Presentation Skills required since he will be
focusing on core corporates for Digital Banking.
New Era India Consultancy Private Ltd
Designation: Actuarial - Insurance Domain
Location: Bengaluru / Bangalore
Job ID: 18936853
Description: Work as a core member of the actuarial
team and contribute to make it a center of excellence,
Provide assistance with actuarial system transformation.
Trans Gnx HR Solutions
Designation: US Mortgage ( Senior Manager )
Location: Mumbai
Job ID: 19072254
Description: Minimum 10+ Years experience in US
Mortgage, Should have good experience in US
Mortgage Loan process.
PES HR Services
Designation: Risk and compliance senior analyst
Location: Bengaluru / Bangalore
Job ID: 19097746
Description: Manage the effective implementation and
delivery of all Source to Pay operations designed to
mitigate risk. e.g. Policies; Anticorruption, BCM, InfoSec,
P104, Records Management and Contractor controls.
Kolath And Company
Designation: Senior Manager – Audit and Assurance
Location: Mumbai
Job ID: 19072761
Description:
Lead and Manage Audit and Assurance, Taxation
engagements of Corporate and Banks/Financial
Institutions. Possess indepth knowledge and update
on Statutory Provisions and guidelines.
Srivas Foundation
Designation: Manager(Approval & Compliance)
Location: Jaipur
Job ID: 19092255
Description: Person will be responsible for interaction
with various government/semi government/private
bodies to get approval of projects under skill
development,CSR and other
schemes,documentation,approval of center partners
etc.
Jobseeker - To apply for above jobs
1. Logon to www.monster.com
2. Type the Job ID in the "Search Job" box
3. Click the "Go" button
Saaki Argus And Averil Consulting
Designation: Tax Professionals
Location: Chennai
Job ID: 19017102
Description: Experience in International Taxation,
Hands full of experience in Tax Advisory, Tax
Provisioning, Tax Reporting, Strong knowledge in Tax
Accounting.
Fast forward
Designation: Treasury Manager
Location: Chennai
Job ID: 19094418
Description: Contribute to ongoing Forex risk
management, Develop of new and existing banking
relationships, Help the team operate within the
budget.
GTPL Hathway Private Limited
Designation: Manager -Taxation
Location: Ahmedabad
Job ID: 19081929
Description: Liaisoning with consultants & counsels for
Appellate proceedings - Tribunals & Courts, Handling
direct & indirect Tax, Tax litigation, including
representation at Assessment level.
Talent Corner Hr Services Private Limited
Designation: Wealth Management
Location: Bengaluru / Bangalore
Job ID: 19014766
Description: The core task is to strategize, drive and
increase wealth business, Profiling Customers and
provide financial products to meet customer needs,
Formulating the strategies to increase the client base
and acquisition of Institutional clients.
Brightways Learning Centre
Designation: Credit Manager- Commercial Vehicles
Location: Chandigarh
Job ID: 19089183
Description: Credit Manager is responsible for
appraising & assessing risks for loans under the CV.
Also responsible for finalizing policies and setting up
processes for quality underwriting. Underwriting high
value cases PAN India.
Employers - To buy Monster products and services
Call us at 1800-419-6666
or
email us at [email protected]
Banking Frontiers
August 2016
35
Cooperative
Apna Bank to add
1.5 lakh customers
Dattaram Chalke, chairman, Apna Sahakari Bank, speaks about the
inspiring journey of the bank and the path of progress that lies ahead
in its 49th year:
A
pna Sahakari Bank, popularly
known as ‘Apna Bank’, came into
being on the auspicious Gudhi
Padva day on 29 March 1968. Today,
the bank has its network spread across
Maharashtra and Goa. By the end of
March 2016, it has 65 branches, of which
64 are in Maharashtra. Likewise, it has 54
ATMs in Maharashtra and 1 in Goa. The
employee strength of the bank is 687. The
bank added 8 branches and 7 ATMs in
2015-16 in Maharashtra. It now intends
to add 15 more branches this year.
INNOVATION TO ADD CUSTOMER
The customer base of the bank as of Q1 201516 was 759,971. According to Dattaram
Chalke, chairman of the bank, the bank
targets to add 1.5 lakh new customers. “As
much as 33.4% of customers’ accounts,
totalling to 64,752, have so far been seeded
in Aadhar numbers,” he adds.
T he bank differs from other
cooperative banks in many ways. It started
the first ever night bank service among
cooperative banks at its Naigaon-Dadar
branch. It had a teller payment system
way back in 1990 emphasizing the need for
prompt customer service and quick cash
payments. It also pioneered the scheme
for inculcating the habit of saving for the
school going children with its ‘Kumar
Bachat Yojna’, which also helps them in
learning banking services.
In 2012, after receiving permission
from RBI for direct membership for
INFINET with IDRBT, the bank started
RTGS and NEFT facility for its customers,
which was later upgraded to NGRTGS.
36
Banking Frontiers
August 2016
Dattaram Chalke is
delighted with the team
effort that helped the bank
complete its IT project in
60% of the budgeted cost
Says Chalke: “In the same year, we got
the direct membership of NPCI for the
National Financial Switch to connect with
140,000 ATMs across the country. We also
started the Aadhar based Payment Systems
(ABPS) for our customers in 2012 and
Direct Benefit Transfer for government
subsidies.”
STEADY GROWTH
The bank’s business mix stood at `5154
crore in 2015-16, which is a major
milestone. The total amount of deposits
was `313,096.31, registering a yoy growth
of 24.27%, while total advances stood at
`202,326.82, a yoy growth of 16.71%. The
NIM during the last 3 years has remained
more or less the same: 3.37 in 2013-14,
3.35 in 2014-15 and 3.28 in 2016. The
percentage of loan proposals approved by
the bank in the last 3 years was very high 96% in 2013-14, 97% in 2014-15 and 96%
in 2015-16.
Chalke says the top 3 sectors which
received loans from the bank include
engineering & electrical (`173.97 crore),
housing sector (`168.69 crore) and
printing & paper (`130.32 crore). He adds:
“The prospects this year are different.
Housing and engineering may grow at a
slower pace, whereas printing & paper are
showing downward trend. We want our
deposits to be at `3750 crore and advances
`2550 crore for 2016-17.”
IT EXPANSION
Apna Bank inducted technology as early
as in 1991, by completely computerizing
its operations. Since then, it has kept
itself abreast of the latest technology,
successfully implementing CBS in June
2008 and setting up in its own state of
the art data centre in Mumbai with all
its branches and ATMs going live on
CBS. Chalke feels proud to say: “With
team effort, we were able to complete
the project in 60% of the budgeted cost.
It is a unique combination of Solaris +
Windows for optimum performance and
value for money so much so that, once the
CBS was implemented, no hardware was
upgraded or any additional investment
made for replacement in the last 6 years.
We have OMNI Enterprise Version 2.0
from InfraSoft Tech as our CBS. Earlier,
we were on OASYS Systems’ TBA, which
was subsequently replaced by BKIT from
InfraSoft Tech.”
The bank has its own DR site at
Kolhapur in sync with the data centre on a
real time basis with the data guard feature
of Oracle database. The DR site is tested in
a live scenario at least once annually.
A
Actress Rohini Hattangadi opening the bank’s Goregaon, Mumbai branch recently
In the last 12 months, the bank
has added IMPS, ATM Bunch Notes
Acceptors) for cash withdrawals as well as
cash deposits and e-statement service.
Says Chalke: “As part of new
applications and improvement in
infrastructure, we intend to start internet
banking, Unified Payment Interface, and
Bharat Bill Payment System. We are also
planning for a complete infrastructure
refresh in our primary data center in the
next 12 months.”
The bank has a 7-member IT infra and
applications team and its capex to opex
ratio for I.T. is 90%.”
Keeping ATMs uptodate
pna Sahakari Bank uses Diebold’s ATMs. Around 75 transactions are taking
place per ATM per day, while the number of transactions the bank’s customers
doing at other banks’ATMs per day is 3932. Approximately 250 transactions are
taking place on POS (as issuer) per day. The bank has installed CCTV cameras
at its ATMs as well as two additional CCTV cameras capturing the movements at
the ATM center. There are sensors attached at prime location, which give alerts.
It is monitored 24x7. Even if the shutter of an ATM center is pulled down or lights
switched off, an alert phone call goes to the respective branch ATM custodians and
IT head / admin head. The bank started its first full-fledged ATM in 2003. Its ATMs
have envelope deposit functionality for depositing cash and cheques along with
withdrawal and other facilities. In 2014, the bank launched Apna RuPay debit cards
in association with NPCI. The cards are now upgraded to EMV cards. It has started
the USSD/ NUUP (*99#) mobile banking service as well as ATM cum cash acceptors
for its customers at 17 locations.
I
3rd party product sales
ncome from 3rd party product sales during the last 3 financial years for the bank has
been increasing fast. It has tie ups with LIC, HDFC Life, MAX Life for life insurance
segment and Bajaj Allianz and Future Generali for general insurance and Religare
for health insurance. Income from 3rd party product sales increased from `30.82
lakh in 2013-14 to `39.64 lakh in 2014-15 to `61.11 lakh 2015-16.
The bank has introduced the facility of
National Automated Clearing House for
ECS transactions. The complete cheque
truncation processing is done in-house for
the entire western grid branches of the bank.
It also has a Document Management System
and centralized account opening system.
NPA
The total NPA of the bank in 2015-16 is
2.68%. The bank has chalked out a NPA
containment strategy for 2016-17. “There
will be focused approach towards review
and monitoring of each NPA account.
Action plan with commitment from branch
officials and time bound recovery has been
drawn and there will be weekly/monthly
staff meeting by the recovery committee.
The committee will consider viability of
unit, chances of revival, upgradation, staff
lapses etc. OTS scheme for NPA accounts
will be made,” says Chalke.
FUTURE
Chalke is of the view that there is stiff
competition in banking. Also there is a
huge gap between the rich and the poor,
he says adding the cooperative banks are
seen as the saviours for the downtrodden.
All major cooperative banks are offering
most of the financial services which other
private banks and nationalized banks are
offering. “I strongly believe these banks
can facilitate self-help groups, micro
finance seekers, small traders and basically
all those sectors where employment is
generated. Due to the banks’ personal
touch, especially in interior places and
villages, cooperative banks play a very
important role,” he adds..
[email protected]
Banking Frontiers
August 2016
37
Cooperative
Mahila shakti gives impressive results
Smita Deshpande, CEO, Bhagini Nivedita Cooperative Bank, reveals
a success formula of a cooperative bank, which is not a mahila bank
but is entirely run by women:
B
hagini Nivedita Sahakari Bank
(BNSB) was established in 1974 in
Pune with the primary objective
of offering banking services to the needy
women for the uplift of their (and family’s)
standard of living. The bank has made
continuous and substantial progress in the
last 42 years. Today, it is considered as one
of the leading cooperative banks with head
office at Pune and branches in and around
the city and Satara. Till 2010, the bank
had 9 branches, which has now grown to
17. According to Smita Deshpande, CEO
of the bank, the bank has opened new
branches every year since 2010. The next
branch will be opened shortly in Hadapsar
near Pune. It also has 7 ATMs located in
Pune and Satara.
Besides Deshpande, the bank has 2
general managers, 24 managers, 60 officers,
162 clerks and 47 sub-staff. The management
gives a lot of importance to the development
of human resources and provides training
to enhance their skills on a regular basis.
Recruitments are done for clerical staff and
there is no direct recruitment for the posts of
officers and managers.
Says Deshpande: “For the staff, the level
of job satisfaction at bank is high and the
attrition level in the bank is negligible. The
eligibility criteria for clerical recruitment
is that the person should have a bachelor’s
degree with technical knowledge and
should score marks above the cut-off
limit in the entrance tests and clear the
subsequent interviews. Officers and
managers are promoted from the clerical
/ officer grade on the basis of written tests
and interviews.”
CUSTOMERS
The bank has a customer base of about 2
lakh. Deshpande points out that the bank
is staffed by women. All its directors are
women. “But, we are not a mahila bank.
We offer banking services to both men and
38
Banking Frontiers
August 2016
Day, we offer donations to institutions
doing social work for needy people. The
bank has a tradition of giving loans to
women beneficiaries at concessional rates.
Also, girls are given educational loans at
concessional rate.”
BUSINESS
Smita Deshpande feels
cooperative banks will have
to make tremendous efforts
to deepen mobile banking
penetration
Says Deshpande: “The total amount of
deposits as on 31 March 2016 is `735 crore
and advances `447 crore. Loans approvals
have been increasing in last 3 years. They
have gone up from `264 crore in 2013-14
to `400 crore in 2014-15 to `447 crore
in 2015-16. The bank’s NIM was 3.85%
in 2013-14, 4% in2014-15 and 3.61% in
2015-16.”The bank has been classified ‘A’
by statutory auditors every year. It is also
a financially sound and well managed
(FSWM) bank as per parameters laid
down by RBI and has been making profits
continuously from its inception.
IT APPLICATIONS
women. We intend to add 10,000 more
customers during 2016-17,” she adds.
The bank’s board consists of
experienced and qualified professionals
who have been consistently following
ethical and transparent practices. The
bank’s services to its customers are
appreciated and it has always been keen
on helping women become self-reliant.
The directors realized, well in time, that
technology is a great enabler and its
powers need to be harnessed in every
sphere of modern day banking without
losing focus on safety and security.
Deshpande gives details of the facilities
offered by the bank: “We have provided
Aadhar seeding, ECS, NACH facilities.
We have initiated ‘Nivedita Puraskar’
under which women entrepreneurs who
received financial assistance from the
bank are recognized for their success in
running their businesses. On Women’s
The bank’s decision-making with regard to
digitizing its various systems processes has
been quick and this has helped the bank
to implement various initiatives such as
CBS, CTS clearing, NACH etc within the
time frame given by RBI. The bank is also
offering ATM, RuPay card, NEFT/RTGS
and has its own state-of-the art data center,
staffed with technology experts who are
also well versed in banking domain. It also
has a DR site - at Indapur. While taking
up technology initiatives, the bank has
not been neglecting safety and security
aspects and has adopted well defined
and documented IT security policies
and procedures.
Recently, the bank has implemented
an anti-money laundering application,
E-KYC application and documents
scanning application for streamlining
business processes and for integrating
and sharing data across system effectively
and efficiently and manage documents
in a structured and secured manner.
Says Deshpande:
“We have implemented CBS in 2009
in a distributed environment with ‘Jcore’
software developed by JJIT, Oracle
database system and IBM servers located
at branches which were connected by
leased lines. In 2013, the bank decided
to change the distributed database to a
centralized database and also to connect
bank’s network to NPCI network for
RuPay card transactions. Our DR site is
shared with Janata Sahakari Bank. We
now have high end IBM Blade Center S
chassis for housing critical servers such
as database server, application server,
ATM server and anti-virus server. A
new web-based core banking software
JW_2014 has been implemented. It was
supplied by Jalgaon Janata Infotech and
has been installed with Oracle (12c) as
database system.”
The older 128 kbps leased lines have
been replaced by new 2 mbps leased lines
with MPLS technology so that data traffic
between branch and data center is carried
out smoothly without congestion. There is
a provision for fall back communication
lines in case of failure of primary lines.
“With careful study and planning, we have
successfully carried out implementation
of the CBS system with minimum
difficulties and disruptions in the working
of branches, without having any adverse
impact on customer service during the
transition phase. The IT team of the
bank is encouraged to acquire technical
skills as we reimburse the tuition fees for
the courses which will prove beneficial
for the IT operations of the bank,”
says Deshpande.
Women delegates at a function of Bhagini Nivedita Sahakari Bank
ATM
The bank has installed ATMs of NCR
at prime locations with inbuilt cameras
and CCTV coverage. Security guards
are present at ATM rooms 24X7. It has
distributed 40,000 ATM cards and the
number of peak transactions per day is
1850 and the gross amount `73 lakh. The
number of average transactions per day is
1200 and the gross amount `42 lakh.
NPA
The bank’s gross NPA was `3.16 crore in
2013-14, which decreased to `2.52 crore
in 2014-15 but increased to `4.26 crore in
2015-16. Gross NPA% to total advances
was 0.87% in 2013-14, 0.61% in 2014-15
and 0.95% in 2015-16. Says Deshpande:
“With the systematic and planned efforts
on the part of our staff for timely recovery
of loans, we have succeeded in keeping our
net NPA below at 0% since the last 12 years
and gross NPA below 1% since the last 3
years. In fact, it has repeatedly received
awards for best NPA management.”
THIRD PARTY PRODUCTS
IT EXPENDITURE
Capex for IT was as high as `180 lakh in
2013-14 as the bank implemented its data
center. But it came down dramatically to
`52 lakh in 2014-15 and then increased
marginally to `53.20 lakh in 2015-16.
Opex for IT increased sharply from just
`2 lakh in 2013-14 to `11.4 lakh in 201415 and then to `15 lakh in 2015-16.
Deshpande feels that the needs of the
bank’s customers are changing rapidly.
They look for flawless multichannel sales
and services. By focusing effectively on
the customers’ requirements, the bank
has tied up with New India Insurance
Company to offer insurance products
to its customers. Besides, the bank is
also providing Pradhan Mantri Surksha
BimaYojana and Pradhan Mantri Jeevan
Jyoti Bima Yojana and there are around
9000 customers to these services.
The bank’s income from third party
products has been rising during last 3
years. This has increased from `2 lakh
in 2013-14 to `2.3 lakh in 2014-15 to
`4.22lakh in 2015-16.
TARGETS
The bank had achieved 10.45%, 12.82%
and 10.40% overall business growth for
2013-14, 2014-15 and 2015-16 respectively.
It is targeting 12.49% business growth for
2016-17. Deshpande believes that only those
banks which can take steps to digitize their
top processes quickly to improve customer
experience and cut costs can survive the
tremendously growing competition in the
banking sector. Says she: “Banks which
can leverage technology and corporate
governance to offer customers products
which are simple, safe, low-cost and
easy to use can have a bright future. The
potential for mobile banking as a delivery
channel for financial services is a huge
opportunity in India. Cooperative banks
will have to make tremendous efforts to
deepen mobile banking penetration. They
will have to run customer education and
awareness campaigns focused on mobile
banking including its security aspects. The
future of cooperative banks which follow
this path can be bright but at the same
time it is challenging.”
[email protected]
Banking Frontiers
August 2016
39
Cooperative
Deogiri Bank aims at 5% loan growth
Dr Manjusha Kulkarni, chairperson, Deogiri Nagari Sahakari Bank, is
confident that qualitative growth of cooperative banks will surpass
other banks:
D
eogiri Nagari Sahakari Bank
was established in Aurangabad
in 1984. It is the first bank in
Marathwada region to opt for core banking
solution and today its area of operations
spans Aurangabad, Jalna, Ahemadnagar,
Parabhani, Jalgaon, Pune and Mumbai.
It has 31 well equipped branches and
28 ATMs, a state of art training center,
a modern data center and own head
office. All the offices are air conditioned,
well equipped, fully computerized and
interconnected. In 2015-16, the bank
added 2 more ATMs. RBI has permitted
the bank to operate in the whole of
Maharashtra. The bank’s chairperson Dr
Manjusha Kulkarni says the bank is now
in the process of setting up more ATMs to
cater to the needs of the customers round
the clock. The bank uses Wincor brand
ATMs. Around 3000 transactions are
registered every day.
HR, TRAINING
The bank has 260 employees. It provides
technical as well as soft skills training to
employees that includes on and off job
training. “We have expert trainers from
The banking sector and we also invite
other experts for imparting training. We
recruit those candidates who have good
communication skills, computer and
banking knowledge,” says Kulkarni.
CUSTOMER BASE
Deogiri Nagari Sahakari Bank has 4.7
lakh customers. It conducts many social
activities including blood donation camps,
health check-ups for customers, Swachh
Bharat Abhiyan, International Yoga Day,
entrepreneurship development program
and felicitation of meritorious students of
10th & 12th standards. For social activities
of this kind, the bank has been awarded
state level first prize by Samrudhhi group.
“We would be adding close to 30,000
40
Banking Frontiers
August 2016
sectors to which it has offered funding
are personal, housing and real estate. The
percentage of loan proposals approved by
the bank during the last 3 years is about
90%. Its target for 2016-17 are `1028 crore
in deposits and `627 crore in advances.
Information Technology
Manjusha Kulkarni estimates
90% loan applications have
been approved in the last 3
years
more customers by the end of this year. We
are also planning to expand our network
and customer base. One noteworthy effort
we have made is to hold training sessions
for our shareholders in banking operations.
We have just started linking with the Aadhar
Payment Bridge System. We have just started
watershed development scheme as part of our
CSR initiative in areas near our branches as
there has been scanty rainfall in the whole
of Maharashtra. We have built 14 check
dams and this activity is totally unique in the
banking sector. Our motto is to preserve each
drop of rain water,” says Kulkarni.
DEPOSITS, LOANS
The total deposits of the bank as of Q42016
stood at `981.95 crore and advances at
`596.09. Its NIM was 4.16% in 2015-16,
4.53% in 2014-15 and 3.10% in 2013-14.
The bank is not into the business of third
party product sales, but it gets commission
from PMJJY & PMSBY.
According to Kulkarni, the top 3
The bank implemented FIS switch
application and NACH in 2015. It has also
installed cash deposit machines and updated
its EMV cards and started POS terminals.
“Soon we will start with ABPS and DBTL.
We are also working on IMPS and utility bill
payments. We will be setting up a DR site
at Hyderabad. We have been continuously
updating our system and adding hardware
to improve our IT infrastructure. At present,
we are using Datamate CBS provided by
Data Vision. Earlier, we were using Pack
Module, a homemade TBA. We would soon
be having a better and more efficient CBS,”
says Kulkarni. The bank has an IT team of
8 people. The ratio of capex to opex for IT
budgets is 29.01%.
NPA
The total amount of NPAs of Deogiri Bank
was `44 crore for the year 2014-15 and `57
crore for 2015-16. “The severe drought that
prevailed in Maharashtra for last 2-3 years
has very severely impacted agriculture
in the state and this has affected other
markets as well. Naturally, banks too have
been affected. Our NPA containment
strategy for 2016-17 is to take actions
u/s 101, by way of securitization act for
recovery of debts.”
FUTURE
Kulkarni is of the view that these banks are
facing growing competition. “Though the
percentage is smaller, qualitative growth
of these banks will surpass other banks,”
she concludes.
[email protected]
Vol. 14 No. 11 March 2016
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Cooperative
NAFCUB discusses issue of umbrella organization for UCBs
T
he National Federation of Urban
Cooperative Banks and Credit
Societies (NAFCUB) convened a
meeting of all state level Federations of
Urban Cooperative Banks in New Delhi,
primarily to elicit views of representatives
of the state federations on formation of
a national level umbrella organization
for urban cooperative banks in the
country. In all 31 delegates representing
the state federations of urban cooperative
banks and credit societies participated in
the meeting.
J y o t i n d r a Me h t a , p r e s i d e n t ,
NAFCUB, explained that the need for
the formation of a national level umbrella
organization for UCBs was felt as urban
cooperative banks are self-reliant and do
not have support from the government in
case of liquidity crisis whereas all public
sector banks get the support from the
government in case of need. Further, as a
result of the dual control, the process of
merger/liquidation of weak/sick banks
is very lengthy and cumbersome with
the result that the depositors face lot
of problems in getting back their hard
earned money. However, in the case of
commercial banks, the merger process is
simple and smooth.
GENESIS
Mehta said the formation of the umbrella
organization and constitution of a revival
fund for UCBs were conceptualized on
the recommendations of the working
group constituted by RBI, which found
it necessary to have such an organization,
especially to enhance the confidence of the
public in cooperative banks. He said the
working group has submitted its report in
October 2009 and recommended setting
up of a professionally managed national
level umbrella organization to provide a
range of services to UCBs on the same
line as done by umbrella organizations
for credit unions in several countries.
He also pointed out that the Malegam
Committee constituted in 2010 had
42
Banking Frontiers
August 2016
The meeting in session
reviewed the working group’s report and
recommended that there should be two
separate umbrella organizations - one
a national level organization to provide
payment and settlement services and
other services normally provided by
central banks as also liquidity support to
its members and two one or more state
level organizations or outside agencies
to provide management, IT, training and
services which the UCBs require. Mehta
added that NAFCUB had in the past
submitted its views on various aspects
related to the formation of the umbrella
organization and various meetings with
RBI were also held to discuss the issue.
However, nothing concrete had happened.
Mehta also mentioned that the
high power Gandhi Committee on
UCBs had in its report in July 2015 also
highlighted the importance of having an
umbrella organization for the sector and
recommended to RBI to expedite the
formation of the same.
NO DECISION YET
He said NAFCUB had in the past
submitted its views on the formation
of umbrella organization, but nothing
concrete had happened so far. While some
of the state federations and NAFCUB are
already playing the role of the umbrella
organization and providing management,
IT and training related services to
UCBs, the constitution of revival
fund and emergency fund facility are
more important.
V.S. Das, former executive director,
RBI, and chairman of the working group
to consider formation of the umbrella
organization, made a presentation for
the participants on the formation of the
umbrella organization, its relevance, the
roadmap and benefits to the cooperative
banking sector.
D. Krishna, former chief executive,
NAFCUB, who was a special invitee
at the meeting, explained the various
aspects of the formation of the umbrella
organization.
After detailed discussions, the
meeting felt that the formation of the
umbrella organization is very important
for the benefit of the sector, especially for
providing liquidity support and meeting
training needs of the sector. It also felt that
umbrella organizations should be formed
at the state level by state federations. All
the federations assured their full support
to NAFCUB in this regard.
Shekhar Charegaonkar, chairman,
Maharashtra State Cooperative Council,
was a special invitee at the meeting.
[email protected]
Cooperative
Sundarlal Sawji Bank to add 4 branches & 7 ATMs
Mukundkumar Sundarlalji Kalamkar, chairman, Sundarlal Sawji Urban
Cooperative Bank, Parbhani, has ambitious growth plans for the current FY:
S
undarlal Sawji Urban Cooperative
Bank was established in 1965 in
the rural area of Jintur in Parbhani
in Maharashtra. Sundarlal Sawji, a law
graduate and a freedom fighter, founded a
number of cooperative credit societies and
schools before he established the erstwhile
Jintur Cooperative Bank with the primary
objective of assisting the less fortunate
members of the community.
At present, the bank has 20 branches
across Maharashtra. Of these branches
in Parbhani, Jalna, Akola, Washim,
Hingoli, Nanded, Aurangabad, Amravati,
Kolhapur, Nagpur and Buldhana districts,
8 have on site ATMs. It has 264 employees
as of March 2016, rising from 250 a year
ago. Mukundkumar Sundarlalji Kalamkar,
chairman of the bank, says the bank has
added 6 ATMs during 2015-16 and plans
to add 7 more in the current year. It is also
planning to open 4 new branches in Pune,
Majalgaon, Lonar and Jintur, which will
have on site ATMs. Moreover, 3 existing
branches also will get ATMs during the
current year.
CUSTOMERS
The bank has a customer base of 3.22
lakh as on 31 March 2016. It has been
competing with other banks in places like
Aurangabad, Pune and Nagpur. The bank
celebrated its golden jubilee year last year
and according to Kalamkar, the bank is
aiming to add 25,000 customers in 201617. “We choose to declare new products
and services in festive season - like Ganesh
Chaturthi, Navratri-Dashara and Dipavali
to attract new customers,” says he.
BIZ MIX
The bank has crossed `1456.70 crore
business mix in 2015-16 against `1420
crore in the previous year. “The total
amount of deposits collected as of Q4,
2015-16 is `857.59 crore and loans
extended by the bank as of Q4 is `599.11
Saraswat Infotech. “Very soon, we will be
launching internet banking facility. We
have also tied up with 4 credit bureaus CIBIL, Equifax, Experian and High Mark,
for verifying the credit worthiness of our
borrowers,” says Kalamkar.
ATM
The bank is using Diebold brand ATMs.
In every ATM center, it has appointed
a security guard and CCTV cameras
are installed. At branches too there are
armed guards to ensure security of the
branches as well as the customers visiting
the branches. Says Kalamkar: “We have
around 300 to 700 ATM transactions
taking place on an average per day.”
Mukundkumar Kalamkar
intends to increase the
deposits of the bank to `160
crore and loans to `151 crore
as part of the busines strategy
crore. The yoy growth in deposits is 1.36%
and in loans, it is 4.26%. We have revised
interest rate on cash credit advances
for attracting small and medium size
businesses,” says Kalamkar.
However, the business per employee
declined to `525.76 lakh in 2015-16 from
`539.59 lakh in 2014-15.
The bank lays stress on credit appraisal.
While sanctioning large credit, officials of
the bank assess the need for the loan and
make it a point to visit the prospective
borrower to ensure that the purpose is
clear and there are no false claims. Says
Kalamkar: “We have been holding training
sessions for the loan team in credit
appraisals. We also have a legal person to
take care of legal issues involved.”
TECHNOLOGY
The bank has CBS from Swiftcore from
NPAs
The bank’s total NPA in FY 2015-16
was `31 crore, compared to `27 crore
in 2014-15.
Kalamkar says the bank has seen
overall progress over the year, especially in
business mix. “This has been possible due
to better customer service and technology
upgradation. Our NPAS have gone up
because Maharashtra faced a drought
situation. Overall business was down
due to this but even in such a situation,
we could control NPA compared to other
banks,” says he.
The bank is engaged with Bajaj Allianz
General Insurance to secure its loans. Noninterest income increased from `164.87
lakh in 2013-14 to `181.01 lakh in 2014-15
to `193.36 lakh in 2015-16. “Income from
third party (Bajaj Allianz) product sales
in the last financial year is `18.93 lakh,”
says Kalamkar.
He adds: “Our bank has fixed targets
of increase deposits to `160 crore, loans to
be of `151 crore, low cost deposits to `46
crore, high cost deposits to `114 crore,
income to `130 crore and profit to `26.25
crore in 2016-17.”
[email protected]
Banking Frontiers
August 2016
43
Cooperative
Vasai Vikas Sahakari Bank for `5000 cr business mix
Dilip Sant, CEO, Vasai Vikas Sahakari Bank, has been instrumental in
enabling the bank to have a business growth of 20% for last 3 years,
which is higher than banking industry average. An interaction:
V
a consistent fund based growth which
mainly comprises deposits. The bank
introduced classic savings bank accounts,
classic current accounts for the elite class
of customers with an objective to improve
CASA deposit base, as also to reduce /
control overall cost of funds. This scheme,
which was introduced in the last FY, has
evoked good response.
asai Vikas Sahakari Bank
commenced its business
operations in 1984. Today it has
17 branches in Thane district and one in
Borivli in Mumbai. Since inception, it has
been receiving ‘A’ grade audit certification.
Mehul Dani: Can you an outline the bank, in
respect of the number of branches, ATMs
and employees and the growth plans?
Dilip Sant: Vasai Vikas Sahakari Bank
has 17 branches and 17 ATMs as on 31 March
2016. We have not added any branch or ATM
in 2015-16. The staff sstrength decreased
from 283 in 2014-15 to 278 in 2015-16. But,
business per employee increased to `7.66
crore from `6.29 crore in 2014-15. Business
mix per employee, reflected as productivity,
too increased by 21.9%. We have been hiring
personnel in specialized areas such as loans,
treasury and investment, risk management,
branch operations and technology. Last
year, we started functioning from our own
state-of-the art corporate office at Vasai,
which also includes a training center and a
badminton court. I have been at helm of the
bank for the last 10 years.
What is the customer base of the bank?
What distinguishes the bank from other
cooperative banks?
We have 174,074 deposit customers
and 9824 loan customers as of Q4 201516. We intend to increase this by 15-20%.
We have attractive retail loan schemes and
small business loan schemes, which are
used to canvass new customers. We have in
place policies and procedures with respect
to all operations. Our banking business
has been growing at 20%, which is higher
than the banking industry average for
last 3 years. The emphasis is always on
customer service and bottom line.
What is the total amount of deposits
44
Banking Frontiers
August 2016
What are the steps taken to improve loan
processing and credit appraisal?
We have been sending our officials
for specialized training, while in-house
training is conducted in the context of RBI
circulars on loans.
Dilip Sant contends that
concerted efforts are made
to contain NPAs even in a
stressed economic situation
where PSU banks have seen
increase in their NPAs
collected and loans extended by Q4,
2015-16? Which were the top 3 sectors
receiving loans from your bank?
We have total deposits of `1328.44
crore and loans of `802.68 crore as
on 31March 2016. These figures were
`1106.39 crore and `673.79 crore as on
31 March 2015. In Q4 2015-16 alone, we
could receive `222 crore as deposits and
extend `129.15 crore as loans, which is a
yoy growth of 20.1% and 19.2% growth.
The top three sectors that we catered
to were SMEs and MSME units (`113
crore), retail traders (`122 crore) and
housing (`90 crore). The prospects of
rise in loans to these sectors in 2016-17
are in the range of 20%. Infrastructure,
education and service industries are the
new sectors that we intend to add in the
next 12 months. We have been targeting
Can you speak about the technology
infrastructure of the bank and what are
the plans in the current financial year?
We have today a state of the art the
data center and integrated server rooms.
We have implemented CBS using the
InfrasoftTech CBS system. We also offer
RTGS/NEFT/NECS, cheque truncation
system and RuPay debit card. Of course,
we have our own ATMs covering all the
branches, besides SMS banking facility.
Our technology setup also provides for
offering POS/eCommerce services, NDS–
OM, CBLO, CROMS and eKuber. We
subscribe to CIBIL and there is an antimoney laundering system.
Some of the technology service
providers are Orient Technology, IBM,
Cisco, Check Point, FortiGate, Juniper and
Rittal. We have added eCommerce. The IT
team comprises 8 executives.
Which is the ATM brand? How many
transactions are carried out per day at
your ATMs?
We are using Diebold ATMs. As I
mentioned earlier, we have 19 onsite and
1 offsite ATMs. We have security guards
at all the ATMs 24x7 and there is CCTV
surveillance. There were some 50,700
transactions in June 2016 but this does not
include local users - our own customers on
our ATMs.
What about the NPAs of the bank?
Our gross NPA for 2015-16 was 2.07%,
which was the same in the previous year.
Net NPA was zero. We make concerted
efforts in containing NPAs even in a
stressed economic situation where several
PSU banks have shown alarming increase
in their NPAs.
What improvements have been made in
branches in the recent past?
We lay a lot of emphasis on turnaround
time at branches, increasing footfall of
customers, introducing scheme new
deposit and savings schemes. The intention
is to improve our CASA. Also new retail
loan schemes have been introduced.
All the branches are under CCTV
surveillance and there are fire and
intrusion prevention systems.
What is the income from third party
product sales in 2015-16?
The total income from third party
product sales in 2015-16 is `51,137. We
have entered into tie up with Life Insurance
Corporation of India for PMJJBY scheme
and with New India Assurance Co Ltd for
PMSBY scheme during FY 2015-16. There
has been an increase in profit on sale of
G-Secs from `98 lakh in 2014-15 to `387
lakh and in income from locker rent from
`21 lakh to `23 lakh in 2015-16. However,
the mutual fund sales went down from
`34 lakh to `33 lakh so is the income from
commission from `16 lakh to `14 lakh.
What are the bank’s targets for 2016-17?
We intend to take our deposits to
`1500 crore and advances at `900 crore.
Our business has recorded 20% growth
on yoy basis for the last 3 years. RBI has
confirmed Scheduled Status to the bank
on 1 February 2016. The management has
planned for expansion of network and has
already opened new branches in Nashik
and Aurangabad in May 2016. We have
also been offering alternative products for
development of assets and liabilities. We
plan to record a 10% growth in business by
the year 2020 comprising of `3000 crore
of deposits and `2000 crore of advances.
We will also open at least 2 new branches
every year and it shall have network of 30
branches by 2020.
[email protected]
200 DCCBs under RuPay debit card network
National Payments Corporation of India has enabled over 200 district
central cooperative banks (DCCBs) under the RuPay Debit Card
network. NPCI has now digitized about two-thirds of 675 districts
in the country through the network of RRBs, state cooperative
banks, urban cooperative banks and scheduled cooperative banks
with electronic payment mechanisms. Major states covered are
Maharashtra, Uttar Pradesh, West Bengal, Uttarakhand, Andhra
Pradesh, Bihar, Karnataka, Gujarat, Kerala, Odisha, Haryana,
Himanchal Pradesh, Chhattisgarh, Punjab, Rajasthan and Telangana.
Gautam Thakur chairman, Saraswat Bank
Gautam Thakur has been elected chairman of
Saraswat Cooperative Bank. Son of founder of the
bank, Eknath Thakur, he takes over the reins of the
bank after two years of his father's death. Outgoing
chairman S.K. Sakhalakar has been elected as the
vice-chairman. Gautam Thakur and other directors
of the bank were elected unopposed. Gautam Thakur has been
spearheading all the bank’s strategic programs. He is also responsible
for the bank crossing `5000 crore turnover in 2015-16. Soliciting
support of all the members of the board and the staff, He reiterated
that the bank has no plans to go out of the cooperative fold and would
remain a cooperative bank.
Banking Frontiers
August 2016
45
N E W S Pix
On the eve of 109th Foundation Day, Bank of Baroda organized
a human chain ‘Hum Hindustani – Sambandhon ki Shrankhla’.
About 3000 employees of the bank and customers from different
branches/ offices participated in the event. P.S. Jayakumar, MD
& CEO, Mayank Mehta, ED, Nagesh Srivastava, GM, Greater
Mumbai Zone, and other top officials of the bank participated in
the event
Finance minister Arun Jaitley inaugurating SBI
EXCLUSiF in Delhi. Arundhati Bhattacharya,
chairman, P. K. Gupta, B Shriram and Rajneesh Kumar,
MDs, along with Jaitley at the function
South Indian Bank launched a prepaid card and a gift card on
the RuPay platform. The cards were jointly launched by
A.P. Hota, MD & CEO, NPCI, and V. G. Mathew, MD & CEO
of the bank
Central Bank of India provided barricades for use by
the Railway Police Force, Central Railway in Mumbai.
K.K. Taneja, field GM of the bank, presented a token
barricade to Sachin A. Bhalode, senior divisional
security commissioner of Railway Police Force
52
Banking Frontiers
August 2016
People Track
Shyam Srinivasan to continue head Federal Bank
Shyam Srinivasan has been reappointed
MD & CEO of Federal Bank for a period
of three years. The reappointment will
be effective from 23 September 2016.
The Reserve Bank of India has given
its approval for the reappointment.
Srinivasan took over as the CEO of
the bank on 23 September 2010. He
joined Federal Bank, equipped with
the experience of over 20 years with
leading multinational banks in India,
Middle East and South East Asia. He
has specific exposure to retail lending,
wealth management and SME banking.
Venkatesh is ED, LVB
Lakshmi Vilas Bank has appointed N.S. Venkatesh as ED.
Venkatesh has been with IDBI Bank as ED and CFO. He has over
3 decades of experience in the banking sector with specialized
exposure to treasury and international banking. He has been a
member of the Technical Advisory Committee of RBI on Money
Market, Securities Market & Foreign Exchange and chairman
of Fixed Income, Money Markets & Derivatives Association. At
Lakshmi Vilas Bank, he will be responsible for enhancing the IT
enabled services for ensuring efficient operations, to improve the business and profit
per employee by optimized utilization of resources, duly ensuring compliance to
regulatory and statutory directions.
Khara appointed MD, SBI
D
inesh Kumar
Khara has
been appointed
as a MD of State
Bank of India. The
appointments
committee of the
Dinesh Khara
cabinet issued
orders to this effect, which said
Khara will have a term of three
years, extendable by two years
after a review of his performance.
Khara at present is MD and CEO
of SBI Funds Management. The
government has also appointed
heads of two other public sector
banks. Pawan Kumar Bajaj, now
ED at Indian Overseas Bank will be
the MD and CEO of United Bank
of India, while Ravindra Prabhakar
Marathe, who is currently ED at
Bank of India, will be MD and CEO,
Bank of Maharashtra. Bajaj will hold
the post up to 20 September 2018,
the date of his attaining the age
of superannuation, while Marathe
will continue for a period up to 30
November 2019.
Anand Sinha on board of IDFC Bank
IDFC Bank has appointed former Reserve Bank of India deputy
governor Anand Sinha on its board as an independent director.
He replaces former comptroller and auditor general. The
appointment took effect from 1 August. Rai has been appointed
as the chairman of the Banks Board Bureau and he has resigned
as director of the bank to avoid any potential conflict of interest.
Rai was the nominee director representing IDFC on the board
of IDFC Bank. Sinha joined RBI in July 1976 and was appointed
as deputy governor in January 2011. He had played a key role in the universal bank
licensing process.
Dubhashi is MD, L&T Finance
L&T Finance Holdings has promoted Dinanath Dubhashi as
MD. He was deputy MD in the company. Y.M. Deosthalee, till
now CMD, will continue as chairman. Prior to joining L&T Finance, Dubhashi was associated with BNP Paribas, CARE Ratings and SBI Caps in various capacities. He holds a BE and a
PGDM from IIM-Bangalore. He joined the company in 2007 and
has been responsible for scaling up retail platform operations of
the company.
Ravindra Marathe
PawanKumar Bajaj
The government also announced
the appointment of Ashok Kumar
Garg and Raj Kamal Verma as
EDs of Bank of Baroda and Union
Bank of India respectively and
Gopal Murli Bhagat and Himanshu
Joshi as EDs of Corporation Bank
and Oriental Bank of Commerce
respectively.
Banking Frontiers
August 2016
53
Banking Frontiers Ads rev (7).pdf
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