To bridge fiscal deficit, RBI likely to pay govt $5.8 bn interim dividend

The dividend could help Prime Minister Narendra Modi's administration bridge a widening budget deficit following a drop in tax collections.

Interim Budget 2019: The Reserve Bank of India (RBI), having changed management last month following a clash with the government, is likely to transfer an interim dividend of Rs 300-400 billion ($4.32 billion-$5.8 billion) to the government by March, according to three sources with direct knowledge of the matter.

The dividend could help Prime Minister Narendra Modi's administration bridge a widening budget deficit following a drop in tax collections, and would come after the government pushed the RBI for the additional funds ahead of a national election due by May.

Former finance ministry official Shaktikanta Das was appointed as the new governor of the Reserve Bank of India (RBI), following resignation of Urjit Patel last month amid tensions over the dividend payout and other issues.

The government and RBI have now appointed a panel to look into the issue around the sharing of the RBI's reserves.

"We are absolutely sure that an interim dividend of more than 300 billion rupees would be paid before March end," one of the sources told Reuters.

Read the full news here → Union Budget 2019

Bank of England tales: The ghost, giant and heroic sewer worker

Over its three centuries, the institution nicknamed the Old Lady of Thread needle Street has built up as many stories as there are gold bars in its vaults.

 

International News: When the Bank of England’s 121st governor takes over from Mark Carney next year, he or she will be reminded that the world’s second-oldest central bank is steeped in history.

From funding wars to a buried giant and a roaming ghost, over its three centuries the institution nicknamed the Old Lady of Threadneedle Street has built up as many stories as there are gold bars in the vault.

The BOE’s first job in July 1694, when it opened its doors at rented premises in the Mercer’s Hall in the City of London, was to raise capital for William and Mary’s war against France. It then moved a couple blocks away to the Grocer’s Hall, where it fended off an upstart South Sea Company, which tried to usurp it as the government’s banker.

When that enterprise’s bubble popped in 1720, the BOE cemented its position as the home of stable money, and in 1734 moved to its legendary address on Threadneedle Street. The BOE bought the neighboring St. Christopher’s church after a group of protesters climbed the steeple during the anti-Catholic Gordon Riots of 1780 and flung missiles into the bank.

It promised to leave the graves of the church undisturbed and refurbished the graveyard as its garden court. At the end of the 18th century, the garden would once again serve to bury the dead when a giant was laid to rest.

At 6 foot, 7.5 inches (202 cm), William Jenkins was a hulk at a time when the average man was 5 foot 7.

Sickly in the last weeks of his life, the bank teller developed a crippling fear that body snatchers might dig him up and sell his corpse to medical practitioners eager to inspect and display it. This was a rational fear in 1798 — the going rate for a corpse of that size was 200 guineas — about 25,000 pounds ($32,000) in today’s money.

Read full story → Bank of England Tales

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News Source: BS

From cheating banks to faking identity, Aadhaar frauds peak in 2018

At a recent court hearing, UIDAI admitted that 6% of Aadhaar authentication requests using fingerprints transactions are known to fail.

Finance News India : In January 2018, eight persons were arrested in Chandigarh for purchasing expensive mobile phones with fraudulent loans secured using fake Aadhaar cards. The accused, among whom were former bankers and employees of a finance company, had placed their own photographs on others’ Aadhaar cards to secure bank loans, and were booked for cheating, fraud, forgery and criminal conspiracy under the relevant sections of the Indian Penal Code.

This is just one among the 73 incidents of misuse of the Unique Identity Authority of India’s (UIDAI) Aadhaar programme that have been reported in the English-language media so far this year (up to May 7, 2018). This averages nearly four incidents each week, as per a new database created by independent researchers Anmol Somanchi and Vipul Paikra.

Of these, 52 cases involved fake or forged Aadhaar numbers–coming up with entirely new Aadhaar enrolment based on fake details, or forging existing cards by replacing certain details like photographs–and 21 involved Aadhaar-related banking frauds.

In the six years since the launch of the Aadhaar programme in September 2011, 164 cases of forged or fake Aadhaar numbers and Aadhaar-related banking frauds have been reported in the English-language media, the database noted. These include 123 cases of fake or forged Aadhaar numbers or cards and 41 cases of Aadhaar-related banking fraud.

“This database does not include the whole gamut of reported incidents of Aadhaar-related fraud and forgery,” Somanchi told IndiaSpend. “We had initially included Hindi reports and found more such incidents. However, since we couldn’t include all other regional languages we restricted the database to English news reports.”

Several attempts to reach out to the UIDAI for comment on the findings of the database met with no response. On April 30, 2018, IndiaSpend reached out to the office of the chief executive officer of UIDAI via email. On May 2, 2018, we reached out again and were told by the communications team that UIDAI would get back to us. On May 3, 2018, IndiaSpend reached out a third time, telephonically. On May 8, 2018, we sent out a third email.

The story will be updated with the Authority’s response when we receive one.

Read More on → Aadhaar Frauds

Smart Spending: You can rent a yacht and live a day like a billionaire

Boats are a billionaire pursuit, but rigs can also be leased for parties, the weekend or quick jaunts.

Finance News : Any mention of yachts evokes images of the luxury boats owned by the wealthiest men in the world – the size of their ships directly proportional to the amount of money that’s spent on them. In that world, bigger is better; and around the globe, yachts have been a billionaire pursuit – from Aristotle Onassis’s 99-metre superyacht ‘Christina O’ to absconding billionaire Vijay Mallya’s 95-metre ‘Indian Empress’.

But what most may not know is that it’s possible to sail like a billionaire even if for a day or two because most owners lease their boats out when they aren’t using them. Case in point – can you rent ‘Ashena’ – a 45-metre superyacht with five cabins owned by Raymond’s boss Gautam Singhania? It’s possible if you cough up Rs 800,000 a day, and if that’s too steep for the wallet, there are other options that cater to every budget.

In the island metropolis of Mumbai, the business of boats is a less flashy affair with most owners being avid sailors as opposed to grandstanding tycoons who throw champagne parties for hundreds of people after an F1 race when docked in Monte Carlo or Barcelona. Which also means that ‘Ashena’ is an exception, and most of the boats range between 10 metres and 20 metres. A 20-metre boat can host a party for two dozen people with ease.

Also Read : To earn higher interest income, you have to take some measured risks

These boats can be leased for an evening or a weekend from any one of the couple dozen companies such as Gateway Charters, Sailing Stuff and Yacht Charters India in Mumbai. The upside: it’s cheaper than shelling out a few lakhs for a ballroom at a five-star hotel in the city.

Aashim Mongia, managing director of West Coast Marine Yacht Services in Mumbai says that there are at least fifty professionals who own boats and many do lease them out. The average cost of renting a yacht hinges on size and ranges from between Rs 20,000 for a few hours to a million rupees, depending primarily on size and amenities. He points to two broad sets of clients – those who throw corporate events such as TCS or Axis Bank, or then as a celebration for their clients or themselves.

“We’ve had finance companies bring 25 top-end clients, and they use the boat and for around Rs 300,000 for 25 people in an ambience that is far more unique than anything on land. The only catch is that the gateway of India shuts at 11 pm, so you have to return by then,” Mongia says.

Read More About → Smart Spending

Cong slams Modi over EPF rate cut, says govt backstabbing honest tax payers

Congress claimed that post 2014-15, this was the second such reduction on EPF interest rate.

EPF0 Rate Cut : The Congress accused the Narendra Modi government of “back stabbing” honest tax payers by lowering the interest rate on EPF.

The party also alleged that it the government was indulging in “organised fleecing” and “legalised pilferage”.

Congress communications in-charge Randeep Surjewala said that the prime minister had promised to bring ‘achhe din’ (good days), but in the last four years his actions have only brought ‘burre din’ (bad days) to the people of the country.

“Post the colossal loss of almost Rs 300 billion ‘loot’ and scams being unravelled in the past seven days, the Modi government has once again back stabbed the common people and honest tax payers of the country by reducing the interest rates on EPF Rate Cut from 8.65 per cent to 8.55 per cent,” he said.

The Congress leader claimed that post 2014-15, this was the second such reduction and interest rate on EPF has now been reduced twice from 8.75 per cent (in 2014-15) now to just 8.55 per cent.

Earlier in December 2017, he said the Centre had cut the interest rate on small savings schemes, including the Public Provident Fund (PPF), National Savings Certificate (NSC) and Kisan Vikas Patra, by 0.2 percentage points for the January-March quarter.

“Since Modi came to power in 2014, his government has indulged in a systematic reduction of interest rates which have extinguished the savings of crores of common people,” he said.

Your Loan Eligibility Holds the Key to Your Dream Home

Latest News - Have you ever been hounded by telemarketers urging you to apply for a loan? Calls, text messages, WhatsApp or even meeting you in person, representatives of financial companies leave no stone unturned when it comes to convincing you to take a loan.

But how is the loan eligibility application processed? Do lenders really bend over backwards to hand you the loan cheque? It does not quite work that way.

Yes, sales personnel employed by financial institutions are aggressive in their attempts to lure you. They have to be; their commissions depend on it. And if one takes the bait and applies for a loan, the situation is likely to change by the time the application is processed.

It is the borrower who is expected to satisfy the credit parameters and fulfil all the eligibility criteria for the Home Loan.

Let’s get down to the basics. What do you think is the main eligibility criteria for taking a Home Loan?

The simple answer is the borrower’s ability to repay the loan.

This means the income of the loan applicant must be enough to pay the instalments on time. The lender provides a schedule for paying the equated monthly instalments (EMIs).

With interest rates favourable, now is as good a time to take a Home Loan as any. And non-banking financial companies (NBFCs) such as Bajaj Finserv offer instant approvals and Home Loans at attractive interest rates when you apply online.

Find out how:(read more...)

57 defaulters owe banks a whopping Rs 85,000 cr: RBI to SC

Only 57 borrowers have defaulted on bank loans worth a whopping Rs 85,000 crore.

The Supreme Court said this after perusing a report submitted by the Reserve Bank of India (RBI) about persons who have taken loans worth over Rs 500 crore and defaulted and asked the central bank why their names should not be made public.

"Who are these people who have borrowed money and are not paying back? Why this fact that the person has borrowed money and not paying back be not known to public," asked a bench headed by Chief Justice T S Thakur. 

Related Story:  Now, RBI takes complete charge of monitoring debit card data breach

The bench, also comprising Justices D Y Chandrachud and L Nageswara Rao, said if the bar was lowered below Rs 500 crore, then the default amount would cross over Rs one lakh crore.

Observing that if people file an RTI query, they must know who the defaulters are, the bench asked the Reserve Bank of India (RBI) why the information on defaulters should be withheld.

"People should know how much money a person has borrowed and how much money he needs to pay back. The amount payable should be known to public. Why should you withhold the information," the bench said.

Read Source

Watch out! Lenders are now tracking your social media profile

If you are involved in clandestine gambling activities or drunk driving, watch out – you might be hampering your chances of getting a loan from new-age online lenders like InstaPaisa, GoPaySense, Faircent, CashCare and Vote4Cash! Lenders have been using an algorithm to track your social media profile for assessing your creditworthiness.

A report in the Economic Times on Monday says: "Online credit marketplaces like CreditMantri and BankBazaar.com that have found a clientele in the 25-35 age group do their due diligence on borrowers using not just payslips and bank statements but also unorthodox metrics like phone location data, SMS alerts and social media behaviour.”

How does it work?
The social lenders run their algorithms through tonnes of data in just a few minutes to assign someone a personality score. This score determines the rate at which the person would get a loan. The rate so determined could range from, say, 9% to 30% -- against the standard industry norm of 13-17%.

Besides, mobile phone data also give lenders and other financial service providers useful information about potential borrowers. From someone’s smartphone usage – how much the person spends on airtime, how he or she uses mobile wallet, etc – algorithms can determine both creditworthiness and need for credit.

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Debit card scare: Why you need to change the ATM PIN immediately

Recently, many customers have got mails and messages from their banks to change the ATM PIN of their debit cards. We now know the reason, with reports suggesting 3.2 million accounts in five leading banks -- State Bank of India, Axis Bank, ICICI Bank, HDFC Bank and YES Bank -- are compromised.

Bankers and cyber experts advise that ideally an ATM PIN should be changed every three to six months. Are they being overly cautious? Perhaps not. Several banks have already asked their customers to change their card security details and to stick to own ATM networks.

An ATM breach means the PIN numbers of not only that bank’s customers but all those who use that bank’s ATM network could be compromised.

“Once the malware is detected, the bank or payment services company will fix it but the problem is to identify the malware. While such incidents are common overseas, they are increasingly happening in India, too, as banks adopt more technology and transactions become digital. There is a need to be more pro-active and put the proper checks in place,’’ Khurana adds.

“While we have leapfrogged in digital technology, we still lag in digital security. Both banks and customers need to actively protect themselves. Going ahead, customers may ask a bank about its digital security and protection before opening an account and not only about services and rates. For banks, it is a question of their reputation,’’says Piyush Singh, Managing Director, Financial Services, Accenture India.

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From cloning to ATM passwords, learn how to save yourself from debit card frauds

The data breach that has led to an estimated 3.2 million debit cards getting compromised is only a small manifestation of a larger malaise called cyber crime. The breach occurred due to an introduction of malware in the network of a third-party payment processor.

Living in a digital world, we need to be aware of different types of cyber frauds and take steps to safeguard our financial well-being.

Password theft: Today, people have apps on their mobiles for almost everything - buying vegetables or furniture, booking a taxi, stock trading or anything else. Given the large number of apps, many people keep the same password and e-mail id for convenience - a wrong move.

Precaution.............

Cloning: An SMS that your debit or credit card has been swiped in Amsterdam while you were sleeping in Mumbai could happen because of cloning...

Precaution.............

Vishing: A call from a bank executive that your account is under threat and he needs your CVV number to ensure safety should be ignored. No bank executive is authorised to seek your CVV numbers...

Precaution.............

Phishing: An email saying you have won $500,000 in a lottery and need to share bank account details for the transfer snared many people in the past. Now that most people ignore such mails, they use other methods, such as sending an email supposedly from the income-tax department. 

Precaution.............

Read More...

ICICI Bank first Indian lender to execute Blockchain transaction

ICICI Bank has become the first Indian lender to complete a banking transaction using Blockchain technology. This remittance transaction has been completed in partnership with Emirates NBD, a lender from the West Asia.

India’s largest private sector lender has managed to authenticate remittance transaction messages as well as original international trade documents related to purchase order, invoice, shipping and insurance, etc electronically on Blockchain in real time. Blockchain technology simplifies the process and drastically reduces duration of the transaction to few minutes, compared with few days otherwise.

“I envision that the emerging technology of Blockchain will play a significant role in banking in the coming years by making complex bilateral and multi-lateral banking transactions seamless, quick and more secure,” said Chanda Kochhar, MD & CEO, ICICI Bank.

She said the bank will also look at expanding the Blockchain ecosystem and creating common working standards for commercial adoption of the technology.

Read Source

Jim Yong Kim re-appointed as World Bank President

Jim Yong Kim has been re-appointed for a second five-year term as World Bank president, beginning July 1, next year, the bank announced.

"Humbled to have the honour of serving a second term as the head of this great institution. I would focus on building a more inclusive world free of poverty," Kim said in a statement.

He said the starting point for his work when he joined the Bank in 2012 was the setting of two ambitious new goals for the institution: to end extreme poverty by 2030, and to promote shared prosperity by boosting the income growth of the bottom 40 per cent of the population in every developing country.

"In order to deliver these goals, the Bank had to accelerate, become bolder and more agile, and reposition itself. We did this so that we could increase support for countries and deliver better results more quickly.

"I believe we are well on the way to achieve these important aims," he said.

"The challenges going forward remain large, with climate change, forced displacement and pandemics threatening the gains we have made to improve the lives of billions.

"We will need to work even more closely with partners and continue to find new and innovative ways to leverage scarce development resources effectively," Kim said.

Earlier in a statement, the Executive Directors of the World Bank noted that in the first year of Kim's leadership, which began in July 2012, shareholders endorsed two ambitious new goals for the institution: to end extreme poverty by 2030, and to...Read full Story

India not ready to privatise public sector banks: Arun Jaitley

India has not reached the point where it can consider selling majority stakes in the public sector banks that control seven tenths of assets in the financial system, Finance Minister Arun Jaitley said on Wednesday.

"I don't think that public or political opinion has converged to the point where we can think of privatisation in the banking sector," Jaitley told the Economist India Summit in New Delhi.

The government is consolidating some of the public sector banks to strengthen them, but does not plan to reduce the state's share below a threshold of 52 per cent, Jaitley said in a  read more..

Also Read:  GST, banks, infrastructure India's top priorities: Arun Jaitley