Page 34 - Banking Finance April 2021

ARTICLE

transfer to AUCA is a mechanism for interim parking of NPAs wise, year wise write off and recovery there against for say
till such time as recoveries are in process, it is important to a 5 year period is a felt necessity.
monitor recovery against each account under the AUCA
head. Recoveries are a long drawn out process and never Once the recoveries are crystallised and there exist no other
easy. It may take well over 3-5 years for any recovery which means, resource or prospects of any further recovery, the
even thereafter, may be, at best, partial. Most recoveries residual amount, if any , will be the true write-off/ haircut
shown in the books are clubbed figures for the year and incurred by the bank and enable the account to be then
present no clarity on account wise recovery. removed from the AUCA head and further monitoring. RBIs
recent advice to banks to implement the revised LFAR (Long
While banks would internally be monitoring account wise Format Audit Report) from FY21 onwards wherein Statutory
recovery on an ongoing basis, no information is readily Central Auditors (SCAs) will be required to examine and
available in the public domain. Banks usually take the plea comment upon recovery from all the written-off accounts
that on account of customer confidentiality they cannot during the financial year is a right step in this direction and
discuss individual accounts. However there is a RBI aligns public expectations and best practices. This, coupled
reporting system in place and under RTI or otherwise too with the accounting standards under Ind-AS (Indian
the data about write offs can be gleaned/procured. Since Accounting Standards)/IFRS(International Financial
the names of the corporate and accounts are in public Reporting Standards), when implemented in banks, is
knowledge, it is incumbent upon the banks, in the interest expected to bring about a much better grasp of and a
of transparency, to declare information about recovery greater degree of transparency about such transactions.
against each account.
In sum, the system of technical write offs is a well established
A system of mapping each account, at least say, exposures management tool to achieve tax efficiency and balance
of Rs.100 crores and above, needs to be developed so that sheet cleansing without impacting the recovery effort.
the oft spoken raison d'etre of technical write off is justified. However it could surely do with improving transparency
This will also serve as a confidence building measure in the through publicly available granular recovery data. This will
public eye and confirm that recoveries are actually being not only help in clearing some of the opacity surrounding
effected and the technical write off is not a sham. Hence write offs but also aid in fine-tuning NPA and AUCA policy
the need for mapping, collating and presenting an account prescriptions. T

'Wear N Pay': Axis Bank launches India's first wearable

contactless payment devices at Rs. 750
Axis Bank has become the first Indian bank to launch its own range of wearable contactless payment devices, dubbed
as 'Wear N Pay'. The bank has joined hands with Thales and Tappy Technologies to design these affordable wearable
products, exclusively available on the Mastercard platform. These wearable devices, which are directly linked to the
customers' bank account, function like a regular debit card. India's third largest private.

'Wear N Pay' devices, which are available in a variety of accessories like watch loop, band and key chain, can be purchased
at a price of Rs. 750. Customers can use these devices at any merchant who accepts contactless transactions. Users
only need to wave the device at a POS machine for transactions up to Rs. 5,000. For transactions of more than Rs.
5,000, a PIN is required.
Sanjeev Moghe, EVP & Head, Cards & Payments, Axis Bank, stated, "Contactless payments are the future of payments
industry in India. To tap into this market, our Wear 'N' Pay program brings in convenience in contactless payments at
a budget friendly price point, offering a safe and secure mode of payments on the go."

"Not only are these devices contemporary looking, but are also designed in a way that it becomes a part of our daily
lives, thus increasing adoption of cashless transactions for everyday requirements. We are confident that the 'Wear 'N'
Pay' program would be an attractive value proposition for our customers," he added.

34 | 2021 | APRIL | BANKING FINANCE