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BANK UPDATE

BANKING

NEWS

RuPay gaining currency Irks Visa and MasterCard Public banks lose market

US card companies MasterCard and Ari Sarker, co-president, Asia Pacific, share, thanks to private
Visa have complained of an invisible MasterCard, said his company wants
mandate to keep them out of Jan Dhan to get an equal opportunity to banks
Yojana, the government's fi-
nancial inclusion programme, participate in Jan Dhan The Brickwork Ratings agency, in its
and demanded a level playing Yojana, touted by the gov- first Bank Book, estimated that pub-
field with government-backed ernment as the world's big- lic sector banks (PSBs) have lost mar-
card issuer RuPay. gest financial inclusion ket share by about two per cent and
programme. the same has been gained by private
sector banks in FY15. Private sector
Stung by a sharp rise in cards issued by He added that banks are aware of banks are gradually gaining market
RuPay, thanks to Jan Dhan, MasterCard their cost but cannot do anything as share at the expense of public sec-
and Visa say they have asked Reserve there appears to be a mandate in tor banks, according to the
Bank and the government to consider favour of RuPay. "The market is not Bengaluru-based credit rating
their services, which are cheaper than open and competitive in its entirety, agency.
that of the local card issuer. only in parts," Sarker said.
If the current growth trends con-
IDBI Bank to sell a 20% stake in Life In- tinue for another three years, by
FY18, Brickwork Ratings' estimate is
surance that PSBs share would have come
down to about 71 per cent, and the
IDBI Bank has begun to monetise assets and bolster its entire gain will be of the private
capital as it plans to sell a 20% stake in its life insurance banks. In contrast, the private banks
venture for Rs.800 crore valuing the firm at Rs.4,000 crore. have accredited themselves quite
well by avoiding lending to problem
861 bank fraud cases reported in first half of the fiscal sectors such as infrastructure and
steel, lending short-term rather than
already long term and focus on retail loans.

As many as 861 bank advance related fraud cases of Rs. 1 lakh Vivek Kulkarni, MD, Brickwork Rat-
and more were reported in the first half of the current fiscal ings, said this has resulted in a clear
which involved Rs. 4,920 crore. Last fiscal, 1,651 such cases were situation where the PSBs not only lose
reported that involved Rs. 11,083.11 crore, Minister of State market share, but also potentially lose
for Finance Jayant Sinha said. "On receipt of fraud reports from good and profitable business.
banks, various aspects related to the frauds are examined and
concerned banks are advised to report the case to CBI/ Police/ Serious Fraud
Investigation Office and take further action," Sinha added.

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