Special Correspondent | HYDERABAD | June 20, 2015 | The Hindu
79 per cent of all retail loans approved only for individuals on CIBIL credit rating >750
A whopping 79 per cent of all retail loans across the country have been approved only for individuals whose credit ratings were beyond 750, according to a data trends report filed by the Credit Information Bureau of India Limited (CIBIL).
Also, there was a significant increase in disbursal of home loans and issue of credit cards in the first quarter of the fiscal 2015-16, as compared to the corresponding quarter in the last financial year.
At an interaction here on Friday, CIBIL’s Senior Vice-President (Customer Relations), Harshala Chandorkar, said home loan growth was driven by higher demand in Mumbai, Pune, Bengaluru and New Delhi, while the maximum number of credit card applications were from Mumbai, New Delhi and Bengaluru. She said the growth was driven by increased availability of credit information.
Fielding questions, she said the number of disputes every month arising out of incorrect information furnished to CIBIL by banks were in hundreds, while CIBIL rating reports and scores were given in crores. Declining to accept that as an agency responsible for issuing reports and scores CIBIL had a role to play in such situations, she insisted that the responsibility of furnishing accurate information lay with the member banks.
Asked if payment of utility bills too would come under CIBIL’s radar soon, she said they were in talks with the concerned regulators but added that it would take some time before utility bills like telephone, power and the like would be tracked.
Ms. Harshala said credit information support from CIBIL had made lending objective, information-oriented, more reliable and less risk-prone. Delinquency of repayments (90 days and more), she said, had come down from 1.06 per cent by the end of 2010, to 0.57 per cent by this year’s first quarter.
Delinquency on credit card payments too had come down from 3.27 per cent at the end of 2010, to 1.06 per cent this quarter.
Source : http://goo.gl/YAXnpf
TNN | Nov 29, 2014, 03.13AM IST | Times of India
Anywhere, anytime bill payment will soon be available for all citizens for all utilities under the Bharat Bill Payment System (BBPS).
MUMBAI: Anywhere, anytime bill payment — currently available to only a section of Indians with access to netbanking and that, too, restricted to a handful of utilities — will soon be available for all citizens for all utilities under the Bharat Bill Payment System (BBPS).
The Reserve Bank of India (RBI) on Friday outlined the final guidelines for the system, which envisages a central entity setting standards and rules, and a host of registered service providers who will aggregate biller information to facilitate anytime and anywhere bill payment. In other words, an individual can collect all his bills — telephone, electricity, water supply, insurance, etc — and pay them through one window.
This will be made possible by creating a network of agents, enabling multiple payment modes and providing instant confirmation of payment. The BBPS will also include existing players in the online commerce segment catering to the requirements of bill payments as well as aggregation of payment services in relation to bill payments.
To facilitate BBPS, the RBI will give recognition to a central entity Bharat Bill Payment Central Unit (BBPCU), which will set the necessary operational, technical and business standards for the entire system and its participants. It will undertake clearing and settlement activities.
Banks will operate as Bharat Bill Payment Operating Units (BBPOUs), which will be the authorized operational units, working in adherence to the standards set by the BBPCU. Besides banks, firms that currently operate as bill payment aggregators can also be part of the system.
“The tiered structure could be further strengthened through an effective agent network/s of the BBPOUs. While there will be a single BBPCU, there could be multiple BBPOUs operating under the BBPS,” RBI said.
Source : http://goo.gl/oYAooX
By Amit Shanbaug, ET Bureau | 10 Jun, 2013, 08.00AM IST13 comments |Economic Times |
Did you know that approaching a bank branch to get a duplicate account statement can cost you around Rs 100, while the same could be had at half the price through online banking? Similarly, a stop payment request that costs upwards of Rs 50 through traditional banking channels is a free service for those who opt for Net banking.
There are many other banking services where you can save money by opting for Net banking (see table). However, most people, especially those who prefer branch banking, don’t even realise they are paying for these services or that their costs are adding up unless they peruse their quarterly bank statements carefully.
Why is Net banking cheaper?
According to Ram Sangapure, general manager, Central Bank of India, facilities like online and mobile banking drastically cut down the cost of providing a service. This saving is passed on to customers who are willing to go beyond the traditional banking channels. “A bank branch has to employ people, incur cost for stationery and in setting up the office. Moreover, paperwork eats up valuable man hours. If the customer uses the online option, a bank hardly incurs any cost, which benefits the former,” he adds.
According to industry experts, a bank spends an average of Rs 40 for each transaction conducted at a branch. If a customer uses the ATM facility, the cost drops to Rs 18-20 per transaction, but it is still much higher than the cost involved in online banking. “In order to promote Net banking, the financial institutions offer certain services for free or charge a nominal amount,” says Sangapure.
Why the cost differential
According to Harsh Roongta, chief executive officer of Apnapaisa.com, banks across the world are within their rights to charge for any service for which they incur a cost. Now, this is being practised by Indian banks as well. Says Rajiv Raj, co-founder and director at CreditVidya.com: “Only if a bank doesn’t incur any cost in completing a transaction will it refrain from charging the customer,” he adds.
In fact, the RBI has not restricted any bank from charging a fee for such transactions. “If you deposit a physical cheque from another bank and it is credited to your account, both banks incur a cost, but you are not charged anything. In the long run, the banks need to recover this amount to sustain themselves,” explains Roongta. “The RBI restricts unreasonable charges. If the fee is within permissible limits and the bank can justify it, it can deduct this from their customers’ account,” adds Roongta.
To keep abreast of the paid services and differential pricing, all you need to do is to visit your bank’s website. Moreover, the details of services and respective fees will be posted on the notice board in every bank branch.
Net banking also helps save money in other ways. For instance, if you have opted for the facility to pay bills online, you can skip the late payment fee.
In addition, there are service providers like credit card issuers, who charge a fee for branch payments. Some banks also offer bonus points for online services, which can then be redeemed for online shopping through the bank’s partner. Consider the ICICI Bank’s Payback facility and State Bank of India’s Loyalty Rewards programme.
Safety vs savings
The benefits of Net banking notwithstanding, a lot of people balk at availing of this option because of the concerns about the security of online transactions, especially in an age where phishing and online fraud is on the rise.
Raj, however, counters this, saying that Internet banking is probably safer than physical transactions. “Banks have introduced a double authentication system, which makes Net banking much safer,” he says. According to him, each customer is given a unique password to log into his account.
To complete any transaction, he needs to key in an ID sent via SMS to his registered mobile number. “So it is not possible to go wrong. It’s highly unlikely that any other person, even a fraudster, could have both the unique log in/password and the registered mobile number,” he adds. Incidentally, you don’t get any security assurances while transacting physically at the bank.
Power, water bill payment history would help assess credit worthiness of people, promote financial inclusion, says Cibil MD
Updated: Sun, Mar 24 2013. 09 14 PM IST | Mumbai | Livemint.com
Credit Information Bureau (India) Ltd, or Cibil, the country’s largest collector of databases on borrowers, is in talks with the Reserve Bank of India (RBI) to use people’s payment history on electricity, water and fixed line telephone bills to help banks assess their credit worthiness.
The talks are preliminary, Cibil managing director Arun Thukral said, adding that consultations with multiple regulators and the ministry of finance are required before the agency can go ahead with the plan.
“Utility data should be allowed because it could help in financial inclusion as people paying their bills on time are likely to be financially disciplined, which means banks can offer them a savings account initially and a loan in the future,” Thukral said in a interview on Friday.
Gathering data from utilities could also be a challenge because the Credit Information Companies (Regulation) Act 2005, which governs companies like Cibil, was drafted keeping in mind only data-sharing with banks and not with other companies.
For example, Cibil is also helping telecom companies like Vodafone India Ltd and Reliance Communications Ltd to analyse data to help these companies target offers to customers based on their credit worthiness.
However, TRAI (Telecom Regulatory Authority of India) regulations forbid companies from sharing their customer phone numbers and hence Cibil has had to use customer names and an identity like a PAN card number or address to give these companies a summary of their customers’ credit history.
The summary includes a credit score—a three-digit number ranging from 300 to 900—that helps in estimating the likelihood of loan repayments. A score closer to 900 indicates a borrower is least likely to default.
Banks have been accessing the scores since 2007 and are increasingly dependent on them to check individual credit history before lending.
“The telecom companies use our data to decide on whether to increase customer credit limits and also to find out which pre-paid customers can be offered a post-paid connection,” Thukral said.
Telecom companies in India are struggling to convert pre-paid customers to post-paid offers because the later give more revenues per user and tend to stick to their service provider for a long time. More than 90% of India’s 893 million mobile customers use pre-paid services.
Launched in 2004 with four million credit records, Cibil now has 250 million individual records, and 12.5 million credit histories of small and medium enterprises.
As many as 900 banks, financial institutions and non-banking finance companies access Cibil’s records.
Jairam Sridharan, head of consumer lending and payments at Axis Bank Ltd, said using people’s utility data is a good idea in India where formal credit penetration is low. However, regulatory approvals won’t be easy to come by, he added.
“Formal credit history in India is thin but using utility data can make it more useful because informal credits like rentals, insurance premiums and post-paid telephone bills will add value to the existing information,” Sridharan said.
“However, credit bureau data users can partake only that much information that they share. So, both banks and utility companies must agree to share the same kind of data, which can happen only after regulatory permission,” he said.
Cibil data shows that 20% of the enquiries made by credit institutions related to new car loan applications in the quarter ended December, the single-largest loan component. Credit cards, for which 40% of the enquiries were made in 2008, has come down to 18% as Indian banks clamped down on unsecured credit due to rising non-performing loans post 2008.
From a peak of 27.55 million in March 2008, outstanding credit cards dropped to 18.53 million in October, RBI data show.
The share of first-time borrowers increased to 50% in 2012 from 35% in 2006, Cibil said.
“Borrowers are also getting younger. In November, 53% of the credit applicants were below the age of 35, with Bangalore’s mostly IT employed population being the youngest group applying for new credit,” Thukral said.
First Published: Sun, Mar 24 2013. 05 54 PM IST
Source : http://goo.gl/CCDnh