Page 7 - Banking Finance September 2019

BANK UPDATE

Central Bank lowers India post payments bank to transform into a SFB
The India Post Payments Bank is all set to be converted into a small finance
MCLR by 20 bps
bank, enabling it to offer small loans to customers,
Following the RBI’s repo rate cut by said the postal department. In addition, the depart-
35 basis points ment looks to open one crore accounts for IPPB in
(bps), during its 100 days. The decisions were taken at the annual
monetary Heads of Circles Conference held at Srinagar in
policy review, Jammu and Kashmir to adopt a 100-day action plan
many banks and a five-year vision to align the Department of
have started lowering lending rates Posts with the Prime Minister's New India initiative, a statement from the postal
and the most recent one is Central department said.
Bank of India.
The decision included "Converting the India Post Payments Bank (IPPB) into a
The Central Bank of India has an- Small Finance Bank (SFB) to provide micro credit at the doorsteps to individuals
nounced that it has lowered its one- and SME's. Targeting the milestone of one crore accounts for IPPB in 100 days"
year marginal cost-based lending among several other steps. India Post will partner with Common Service Centre
rate (MCLR) by 20 bps from 8.5% to to provide a suite of citizen centric services such as banking, remittance, insur-
8.3%, with effect from August 15, ance, DBT, bill and tax payments etc at post offices, the statement said.
2019. It added that it has reduced
rates across all other tenors as well. The postal department has decided to develop infrastructure to extend the reach
of the e-commerce industry to tier 2 and 3 town as well as to rural areas by
Further the bank stated in its press investing in 190 parcel hubs, 80 Nodal Delivery Centers and a Pan India Road
release that it will come out with Transport Network.
repo linked retail products. Pallav
Mohapatra, MD & CEO said, “The Telecom Minister Ravi Shankar Prasad at the conference urged the officers of
bank will come out with new prod- the Department at all levels to think to reform and perform in order to trans-
ucts in the retail segments having form. "In particular, he asked the Heads of Circles to leverage technology to
repo linked interest rate, i.e., RLIR, strengthen Digital India by adopting Artificial intelligence, IOT and Cloud com-
during September 2019.” puting for citizen centric services," the statement said.

SBI reduces interest rates New timings of opening bank branches likely
on recurring deposits With an aim of unifying the opening time of the banks, the banking division of
the Finance Ministry held a meeting re-
With effect from 26 August 2019, SBI
has reduced the interest rate on re- cently through video conferencing, in
curring deposits (RDs). SBI RD inter- which it has been decided that the banks
est rates vary between 6.25%-6.70% must function in accordance with conve-
for general public and an additional nience of the customers. For this, ap-
interest rate hike of 50 basis points proval was given to change the timings
for senior citizens. of the banks.
SBI recurring deposits have maturity Three options for opening timings of the
ranging from 12 months to 120 bank branch have been given by the In-
months. SBI has cut the rate of inter- dian Bank Association (IBA). The first option was to open banks from 9 am to 3
est on 1-year recurring deposit by 10 pm, second was from 10 am to 4 pm and the third was from 11 am to 5 pm.
basis points. SBI's one-year RD will The IBA asked the banks to make a decision about banking time by meeting the
give 6.70 % interest for general pub- district level customer coordination committee by 31 August and also inform
lic and 7.20% for senior citizens. Ear- about it in the local newspaper.
lier, the bank was offering 6.8% and This decision made by the banking division will apply to all government and re-
7.3% interest rates for general public gional rural banks (RRBs). Officials say that the new timings of the bank are
and senior citizens, respectively. expected to be implemented from September.

BANKING FINANCE | SEPTEMBER | 2019 | 7