Press Coverage-Banknet India's Third Annual Conference on Payment Systems in Banks
Mr M V Nair, Chairman & Managing Director, Union Bank of India. Mr. Arvind Sharma, Member Secretary, Governing Council and Director, IDRBT was the Guest of Honour and spoke on reach of Banking to unbanked and underbanked areas. Mr Kaza Sudhakar, CGM, Customer Services Department, RBI delivered the Key Note Address on Consumer & Service issues in Payment Systems. Conference was attended by more than 350 participants from more than 100 banks, FIs, insurance cos & others.
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Biometric cards pilot project to start off in AP district
The Hindu Business Line
Banking Bureau , January 10, 2007
The Institute for Development and Research in Banking Technology (IDRBT), along with banks, is rolling out a pilot project at Warangal in Andhra Pradesh to offer biometric cards to people in rural areas.
"The software development and testing are in progress," said Mr Arvind Sharma, Member Secretary, Governing Council and Director, IDRBT.
Union Bank of India, SBI, Andhra Bank and UTI Bank, among others, are participating in this project.
Under the pilot project, each bank will appoint a village business facilitator to identify account holders before offering biometric cards to villagers for use at the terminals deployed in the area.
"The project is being implemented at six mandals in the district. In the initial phase, 200 biometric terminals will be deployed," Mr Sharma said at a Banknet India conference.
The pilot project will reach around 50,000 villagers. The Government can use the channel to route statutory payments such as wages to the rural poor under the National Rural Employment Guarantee Programme.
The pilot project will start on February 15 and will be monitored for three months before it is taken to other areas.
IDRBT will act as a neutral platform. "There is also a plan to involve regional rural banks in the future," said Mr Sharma.
Speaking on financial inclusion, Mr M.V. Nair, Chairman and Managing Director of Union Bank of India, said that benefits of the online system have been restricted to metros and urban areas.
"It is time we start examining systems that extend benefit of the financial system to remote areas that lack infrastructure."
Smart cards and handheld devices can ensure that benefits reach the poor at reasonable costs.
"Mobile phone technology could also be examined to expand the scope and reach of our payment and settlements systems," he said.
Tech is just not enough for client service, says RBI
The Economic Times
TIMES NEWS NETWORK, January 11, 2007
BANKS, which pride themselves on deploying high-end technology solutions, are facing the maximum number of complaints related to
payments settlements. At a banking technology seminar organized by Banknet India, Kaza Sudhakar, chief general manger of Reserve
Bank of India, said that banks must follow a system of differential charges for credit card customers, depending on the number of value
added features provided on the cards.
Many times, customers do not understand the complexities involved in the products and banks end up charging them for those services
which the former do not actually utilise at all, Mr. Sudhakar said.
For instance, banks should understand that a senior citizen, who leads a largely inactive lifestyle, who leads a largely inactive lifestyle,
would prefer conectivity of his card to more number of ATMs and point-of-sale terminals within the country, rather then being enabled to
use the card at locations outside India.
He said that a large number of complaints arise due to the simple reason that customers do not read the terms and conditions mentioned
in credit card agreements. Drawing conclusions received by the department so far, he pointed out that false promotions, lack of transparency
in operations, absence of adequate financial education and credit conselling and complex products introduced by banks are some of the
critical issues requiring immediate attention.
He also highlighted some key product features that most customers would wish for these include end-to-end payment at affordable costs with
a maintenance of transaction records.
Banks Need To Further Move Towards Electronification
Money Control.com
Biztech Blog, January 11, 2007
Payment systems form the backbone of every financial infrastructure and as banks in the country aspire to become global institutions, they will have to incorporate payment systems that are efficient, reliable and of global standards. This was the view expressed by various experts present at the third annual conference on payment systems organized by Banknet India.
Themed, “Moving Towards Electronic Payment Systems,” the gathering witnessed several industry experts including regulators, bankers, vendors and CIOs presenting their views on the issues and challenges pertaining to payment systems in banks.
Speaking on the occasion Madhabi Puri Buch, group corporate brand officer & head operations, ICICI Bank said, “If the Indian banking fraternity is to repeat the success of the Indian IT industry, then it can’t do without technology. We have to employ technology and transform our old, predominately manual paper based transaction systems into electronic ones.”
Speaking further she added, “Estimates suggest that even now the majority of our transactions are cash and paper based, which are time consuming, error prone and expensive. This presents a strong case of changing our current systems and deploying electronic clearing services (ECS) to speed up the process of entire process. RBI’s initiative to introduce ECS which covers both debit and credit clearing has helped banks greatly in processing large volumes of small amount instruments such as dividend warrants, interest payments and also periodical disbursements such as salary, payment of utility bills, recovery of EMI etc. There have to be more such initiatives both from regulators side as well as banks’ side if we want to change the current scenario.”
Many present at the event believe that the pace of ‘electronification’ in the banking sector is slower than needed and one of the main reasons for it is their slow adoption among the banks. For instance, Real Time Gross Settlement (RTGS) system introduced in early 2004 by RBI hasn’t found many takers up until now and users, including banks have been lethargic to adopt it.
S.K. Sehgal, GM-IT, State Bank of India said, “Banks have to be more proactive do deploy technology in order to elevate to the desired levels of electronification. However, when deploying technology, banks have to see to it that the technology platform they invest in is scalable enough to meet the huge volume of transactions. Not only this, but the platform also has to be secure in nature so that users have faith in it.”
The event also saw participants discuss alternate delivery channels of payment including internet payments, mobile payments and other channels that could be used by banks to facilitate faster payment and non paper transactions, especially for retail users.
In his concluding remarks, M.V. Nair, Chairman & MD, Union Bank of India stated, “Efficient payment systems help in financial inclusion and implementation of such systems increases efficiency, lowers transaction costs, improves operational efficiency of trade and commerce. It is these benefits that the banks should view as incentives and incorporate technologies to move to electronically driven payment systems.”