By: PTI | New Delhi | June 23, 2015 10:48 am | Indian Express
In order to incentivise shopkeepers, government has proposed tax rebate to them provided they accept a significant value of sales through debit or credit cards. (Reuters)
Government on Monday proposed income tax benefits for people making payments through credit or debit cards and doing away with transaction charges on purchase of petrol, gas and rail tickets with plastic money.
In a draft paper for moving towards cashless economy and reduce tax avoidance, the government also proposed to make it mandatory to settle high value transactions of more than Rs 1 lakh through electronic mode.
In order to incentivise shopkeepers, it has proposed tax rebate to them provided they accept a significant value of sales through debit or credit cards.
The proposals are aimed at building a transactions history of an individual to enable improved credit access and financial inclusion, reduce tax avoidance and check counterfeiting of currency.
“Tax benefits in terms of income tax rebates to be considered to consumers for paying a certain proportion of their expenditure through electronic means,” said that draft proposals for facilitating electronic transactions on which the government has invited comments till June 29.
It further said that all “high value transactions of, say, more than Rs 1 lakh, (be settled) only by electronic means”.
The paper said the tax benefits could be provided to merchants for accepting electronic payments.
“An appropriate tax rebate can be extended to a merchant if at least say 50 per cent value of the transactions is through electronic means. Alternatively, 1-2 per cent reduction in value added tax could be considered on all electronic transactions by the merchants,” it added.
Finance Minister Arun Jaitley in his budget speech had said that the government would “introduce soon several measure that will incentivise credit or debit card transactions and disincentivise cash transaction”.
The draft made a case for removing different types of fees and charges on e-transactions by various entities and providing incentives for such payments.
Observing that PSUs and other organisations levy a convenience fee and other charges for making e-transactions to utility service providers, petrol pumps, gas agencies and railway tickets, it said, “the feasibility of removing the charges will be examined”.
On the other hand, the paper said, “utility service providers could be advised to give a discount to users for small ticket payments through e-payments, on the lines of BSNL, which provides an incentive of 1 per cent of the billed amount if the payment is done through electronic mode”.
In order to promote wider adoption of e-transactions, it suggested rationalisation of the Merchant Discount Rate (MDR), which at present is 0.75 per cent on Debit Card transactions of up to Rs 2,000 and 1 per cent on all transactions above it.
“The existing inter-change fee on Debit/Credit Card transactions are not uniform and need to be standardised/ rationalised to encourage both issuing and acquiring banks to establish and utilise acceptance infrastructure,” it said.
A nominal cash handling charge on transactions greater than a specified level may be levied, it added.
The draft also proposes to relax the norms for reporting credit card transactions of individuals by banks.
“At present, banks have to report the aggregate of all the payments made by a credit cardholder as one transaction, if such an amount is Rs 2 lakhs in a year. To facilitate high value transactions, the ceiling of Rs 2 lakhs could be increased to say Rs 5 lakhs or more.”
Government departments, it said, should also consider introduction of appropriate acceptance infrastructure or adopt national E-payment gateway ‘PayGov India’ for collection of revenue, fee and penalties etc.
At present there are about 56.4 crore debit cards and 11.25 point of sale (PoS) terminals in the country.
Seeking to promote mobile banking, the draft suggested that the charges levied by telecom companies need to be rationalised.
“Currently, the telecom companies are levying an Unstructured Supplementary Service Data (USSD) charge of Rs 1.50 per transaction for mobile banking/payments. To enhance adoption of mobile banking/payment, the USSD charges could be examined and rationalised.
“Appropriate changes in the regulatory structure, if required, to promote mobile based payment systems.”
The proposals seek to improve ease of transactions for individuals, reduce the risks and costs of carrying cash and curtail cost of managing cash in the economy.
Besides, it will also encourage encourage government, corporates, institutions and merchant establishments to facilitate non-cash payments.
The e-transactions, according to the draft, will include transactions made through debit/credit cards, mobile wallets, mobile apps, net banking, Electronic Clearing Service (ECS), National Electronic Fund Transfer(NEFT), Immediate Payment Service (IMPS), or other similar means.
The draft proposals were prepared by the government after consultations with various stakeholders which includes RBI, NPCI, NIBM, public and private sector banks, card service providers, mobile service providers, research institutions and government departments.
The paper highlights that acceptance infrastructure, particularly Point of Sale (PoS)/Mobile PoS terminals as a percentage of the total number of Debit/Credit Cards is very low.
“Therefore, mandating banks issuing cards to deploy POS terminals in a prescribed ratio could be considered. Like in ATMs, non-banks could be authorised to install white label POS terminals,” it said, while stressing on improving broad band connectivity to enable mobile based payments on a wider scale.
On awareness and grievance redressal, it said in case of a fraudulent transaction, the money will be credited back to customer’s account and blocked and subsequently released after the investigation is complete/limited to say a maximum of 3 months.
It further said changes in the regulatory mechanisms could be examined to ensure that innovations in the payments ecosystem continue to happen.
The linkages with Aadhaar based identification for authentication could also be strengthened, it added.
Source : http://goo.gl/oSVh3i
Manju AB | Monday, 1 June 2015 – 7:00am IST | Place: Mumbai | Agency: dna | From the print edition
Helps banks frame a strategy to sell financial products, have tie-ups with retail stores or simply entice with a good deal so that a good customer transfers his/her loan account.
Ever wondered why you are getting calls offering personal loan? Why personal loans are being sanctioned to you instantly? Or why you get inundated with calls for a credit card even if you don’t need them?
The answer is banks are engaging in data mining, where they analyse customer’s profiles and behaviour. They even track down your favourite restaurant, your eating habits, shopping preferences, movies you watch, books you read, the hospital visits you made; in fact, just anything about you.
Your loan repayments too are intensely scrutinised. These informations help banks take a quick call whether to offer you a loan or deny one, and effectively check bad loans. It also helps banks frame a strategy to sell financial products, have tie-ups with retail stores or simply entice with a good deal so that a good customer transfers his/her loan account.
A senior SBI official said, “We compile such customer data which help us decide on how to sell our insurance, mutual fund products or lure one customer to bank with us or have more than one relationship with an existing customer. Suppose a customer has a savings bank account with us and a home loan with another bank we try to woo the customer to shift his loan account.”
According to Harshala Chandorkor, senior vice-president, Consumer Services and Communications at Credit Information Bureau (India) Ltd (CIBIL), “Banks are engaging in data mining to understand the profile of their customers and understand the health and behaviour of their portfolio. It helps them to deepen their relation with existing customers, enhance credit limits on your credit cards, deny credit cards if your credit history is poor and have tie-ups with retailers. We at CIBIL undertake data mining to understand the profile and behaviour of the customers which help banks to define their strategies.”
The bank has a data mining centre in Belapur, Navi Mumbai. With strict KYC (Know your customer) norms in place, banks get all the basic information from the customers themselves. And often customers with a savings account will be having a debit card, a credit card, a home loan or a car loan. Each time your card is used your bank gets a feedback of what you do with your money.
All banks, especially those in private sector, undertake data mining to understand the customer better before marketing various financial products to them and to avoid bad loan decisions. Tie-ups with online retailers are also undertaken considering the customer profile. HDFC Bank debit card has offers on various travel portals, and jabong and ebay. Banks like ICICI and HDFC are active in making calls to sell credit cards and personal loans.
For example, SBI debit card has tie-up with LG and other traders that the bank markets it as a 24×7 market place; ICICI Bank has tie-up with Shoppers Stop, Flipkart etc. Thus, each bank, depending on the kind of customer profile, will go in for tie-ups with merchant establishments who, in turn, will give discounts on the bank’s credit, debit cards.
A senior banker with Union Bank of India said, “We regularly monitor our savings bank customers to find out from where they may have taken a home loan or a car loan. And try to find out how the bank could not have caught the customer. His relationship with the bank cannot just be a savings bank account. It makes sense for the bank to have more than one relationship with the customer.”
Source : http://goo.gl/7SKAuG
Creditvidya.com | Updated On: January 04, 2015 15:12 (IST) | NDTV Profit
Imagine this: You go down to our local grocery store to pick up a packet of milk on your way back home from work, and when you dip your hand into your handbag you find your wallet missing!
Now, you are breaking out in cold sweat because you have lost all your credit/debit card(s) as well as your PAN card. Panicking at times like these is natural, but good news is you can go about cancelling all your cards and retrieving them in a short span of time. The money in the wallet, however, is gone for good.
If you find your wallet missing, first things first, don’t panic as it’s not the end of the world. You may have lost the money, but you can still still straighten it out. Read on to know about a step-by-step process to check, cancel and replace all the contents of your wallet (except money!).
1. Cancel all your cards immediately
It matters little whether your card issuer is a public sector bank or a private sector bank, because you have to cancel all your cards at once as soon as you can. Calm down and make a list of the banks that you hold cards of. If you do not have their customer service numbers handy, go to their websites and find out the numbers one by one. Once you are sure you have the contacts numbers of cards issuers jotted down, it’s time to start making the calls.
When you call them, mention/ask the following things clearly:
That you have lost your wallet and your card was in it
The date and approximate time of the incident
Ask if any transactions have appeared on your card ever since
Tell them to cancel your card immediately and apply for replacement
2. Wallet protection plans
The procedure mentioned above is the first thing you need to do if your wallet has gone missing, but needless to say, this is a time taking procedure that will take up at least half a working day if you have four or five cards. In the day and age that we live in today, you obviously would not like to spend a lot of time calling up your card issuers. A solution to this problem has been brought forth by service providers such as One Assist and CPP India which provide comprehensive assistance in the event of card loss.
In order to avail of such services, you need to be registered with them and pay them an annual subscription fee that may be around Rs 1,500-2,000 per annum.
In the event of card loss or theft, all you need to do is make a call to your wallet protection service provider and it will take care of blocking your cards on your behalf to prevent misuse. In case you find yourself in such a situation while travelling, they could even help you in settling your hotel bills and arranging a return ticket for getting back home. You would not have to worry about the replacement your PAN card or driving licence either as they go through the documentation required to replace the same for you even free of cost. While it is good to be optimistic and wish that your wallet will never get stolen, it is a good idea to sign up for such wallet protection plans. For a small sum of money you will be required to pay annually, you can be saved of a lot of hassle if you do happen to lose your wallet.
3. List out all your subscription services
These days, if you are an active netizen, chances are that you use your credit cards for a host of online services. It’s a good practice to maintain an excel sheet of all your online subscriptions generally, and in the event of the loss of your credit cards, this list will seem like a boon. You still have to take the trouble of notifying these service providers though and may lose out on a subscription or two till you update the information about your new card.
4. Check your Cibil report
Even after you have cancelled all your active credit cards, it may be a good idea to pull out your Cibil report after 30 days of the date on which you lost your card. Once you receive this report, comb through it for any suspicious transactions or enquiries for loans or credit cards that you have not applied for after the incident. If you find anything at all that seems like a fraudulent transaction, notify both the concerned card issuer or lender and Cibil about it immediately.
Going through these steps are by no stretch of imagination fun things to do, but if you do happen to lose your wallet, they may come in handy and reduce your stress.
Disclaimer: All information in this article has been provided by Creditvidya.com and NDTV Profit is not responsible for the accuracy and completeness of the same.
Source : http://goo.gl/Kw7OoS
PTI | Sep 14, 2014, 12.29PM IST | Economic Times
NEW DELHI: As part of its ‘go-green’ initiative, HDFC Bank has started sending PIN, unique code number, for debit card holders through SMS instead of the practice of sending it by post.
It is not just environment friendly but also convenient and saves time of both customers and the bank, HDFC Bank Senior Vice President and business head (Cards Payment Products) Parag Rao said.
“With the launch of the Green PIN we offer our customers the flexibility to generate a new pin number at a time and location most convenient to them, while simultaneously giving them the opportunity to take a step to save our planet’s vital natural resources,” he said.
Green PIN is One Time Password sent to the customer’s mobile number registered with bank. Using the OTP, customer can set debit card PIN at the bank’s ATM, Rao said. Customers will get OTP within 48 hours of applying for it.
HDFC Bank has nearly 1.75 crore debit card holders and about 16.5 lakh cards on an average is issued annually by the bank.
This facility is for all states except for Jammu and Kashmir due to restrictions on bulk SMS delivery for the state, Rao said.
The green PIN is one of many ‘go green’ initiatives of HDFC Bank, he said.
Source : http://goo.gl/KVUAHX
R. RAMABHADRAN PILLAI | July 14, 2014 11:58 IST | THE HINDU
Once the security issue is taken up in all earnestness, compelling banks to adhere to strict security measures, the cost of operation of the ATMs is bound to go up.
A move by certain banking channels to impose charges on savings bank account holders of banks on transactions done through ATMs of other banks, has not received the nod of the authorities concerned.
Groups of ATM operators in the private sector are understood to be behind the move to levy charges on every transaction made on ATMs belonging to other banks.
At present, five transactions performed through ATMs of other banks such as balance enquiry and changing of secret identification number are free of charge in a calendar month. The charges levied on the transactions from other ATMs differ with each bank, generally in the range of Rs.10-20 for cash withdrawal and Rs.5-Rs.10 for balance enquiry.
The arrival of white label ATMs, set up by private companies, had changed the scenario with the new players seeking to operate the machines profitably. The number of footfalls is important for the white label ATMs as the concerned bank pay the service charges to the former on the basis of the transactions. The issue is understood to have been discussed by the banks with Indian Banks Association, but no decision has been taken on the issue, according to banking sources.
The cost of maintenance of the ATMs had gone up after the incident in Karnataka in which a woman was attacked at an ATM. The banks were asked to spruce up security by ensuring that the shutters should not be closed and there should be security guards to man the ATMs on a 24-hour basis.
The specification on security has not been made a rule by the banking authorities due to various reasons. Once the security issue is taken up in all earnestness, compelling banks to adhere to strict security measures, the cost of operation of the ATMs is bound to go up.
Significantly, RBI had pointed out in a circular concerning the ATM operation earlier that in countries such as U.K., Germany, and France, bank customers have access to all ATMs in the country, free of charge except when cash is withdrawn from white label ATMs or ATMs managed by non-bank entities.
“The ideal situation is that a customer should be able to access any ATM installed in the country free of charge through an equitable cooperative initiative by banks,” it said.
Source : http://goo.gl/AMIshB
Preeti Kulkarni, ET Bureau Jun 17, 2013, 08.00AM IST
The big spenders are expectedly pampered, with credit card issuers and merchant outlets showering them with discounts and freebies. In recent months, however, two private-sector majors ICICI Bank and Axis Bank have expanded their scope of offerings to cover the savers as well. The banks are promising to reward customers having savings bank accounts with loyalty points for carrying out a variety of transactions.
While a plethora of freebies is being offered on a platter, on the flip side, there is the tedium of keeping tabs on the reward points and redeeming them. If you want to make the most of the loyalty programmes, you need to understand how they work and avoid the peril of over-spending.
How does it work?
The savings account holders in banks that offer reward point programmes do not have to make an effort to sign up for it since they are enrolled by default as soon as they open an account. “Our MySavings Rewards Program and credit card programmes are designed to reward and encourage customers to carry out more transactions with us. These help them accumulate points for almost every transaction,” says Rajiv Sabharwal, executive director, ICICI Bank.
The transactions include simple ones like activating Internet or mobile banking, opening a recurring deposit account, updating your mobile number through an ATM, or registering for an e-statement. Then there are more complex activities like taking a loan or paying utility bills using the online payment platform, even making an EMI (equated monthly instalment) payment on time.
To be eligible for the reward points, the retail customer needs to fulfil certain conditions. For instance, in the case of ICICI Bank, the account holders are required to maintain a minimum monthly average balance of Rs 15,000, while the NRI customers are not eligible at all. Similarly, you become eligible for the Axis Bank’s eDGE Loyalty Rewards Points programme when you open a savings account, use its debit or credit cards, and online channels of shopping. However, to qualify, you should have no outstanding dues and the eligibility criteria are open to review from time to time.
The public-sector banks, however, are not rewarding their savings account holders and have largely limited themselves to card spends for now. “Banks are increasingly using loyalty programmes to induce consumers to use debit/credit cards, as well as Internet and mobile banking.
The objective is to incentivise them to use their cards instead of withdrawing cash from the branch or ATM. Once consumers have accumulated points, they can redeem these in return for free goods or services,” says Bijaei Jayaraj, CEO, Loylty Rewardz, which manages loyalty programmes for several PSU banks, including the State Bank of India.
How to redeem reward points
You earn different reward points depending on the kind of transaction and card type. So while you earn 1 point for every Rs 100 you spend online through Net or mobile banking with the ICICI Bank, you can get 100 points for just activating the Net or mobile banking. In the case of Axis Bank, you can earn 25 points for ordering a new chequebook online or via an ATM, but get 500 points one time when you open a Wealth or Privee account.
How do you keep track of your reward points? Since the ICICI Bank’s points are managed by PAYBACK, the multi-brand loyalty programme, you can either get in touch with its contact centre/website, through the bank’s website, or even via your account statement. To redeem points, you have to choose from the list of products or services up on the bank’s website and call up the bank to communicate your decision. You can also redeem the points directly through the Internet channel by clicking on ‘redeem’ at the bank site. You’ll be taken to the PAYBACK website, where you can pick your product/service.
You can also shop at PAYBACK’s online partner sites, or directly at specified merchant outlets by swiping your card. As for the Axis Bank, you can pick from 500 rewards from a range of lifestyle and entertainment products and services, provided that you have accumulated a minimum of 300 points.
Rewards on card spends
A high-end credit card is bound to offer a better spend-to-reward point conversion ratio compared with a no-frills card. However, such cards typically entail a huge membership fee. Plain-vanilla cards may not levy a big fee, but could require you to make substantial purchases to be eligible for worthwhile rewards. Availing of cash-back offers is relatively easy as you have to simply swipe your card at the merchant outlets or make an online purchase and the applicable amount will either be credited to your account or the discount factored into the bill.
While both cash-back and reward point programmes seem attractive, it requires you to choose your bank or card, as well as rewards, carefully. “So, if you watch movies or dine out often, pick a lifestyle card that offers additional points on such spending. If you are a frequent flier, look for a card that converts points into miles and entitles you to concessional fares,” says Harsh Roongta, CEO of Roongta Securities. Another popular category is the one that offers points on refuelling.
On the other hand, cards or savings accounts that entitle you to, say, 5% cash-back on payment of utility bills will be useful for all segments as it is an unavoidable expense.
Ensure that you exercise caution while choosing cards for the cash-back benefits as banks and card issuers routinely revise their offerings. Besides, your spending pattern should justify the membership fee. The last thing you should do is to sign up for a card only to avail of the reward points or cashback offers. Moreover, your bank or card issuer could levy an ad-hoc handling fee for delivering your product at your doorstep, reducing the actual value of the benefit.
Many credit card users believe that hoarding a large number of points for months or years will help them buy an expensive TV or a high-end refrigerator. However, you need to ascertain whether the bank or card issuer has specified a validity period for redeeming the points. Otherwise, you may end up waiting for months only to find out that the offer period has expired.
Source : http://goo.gl/YwNHM