Page 7 - Banking Finance November 2020

BANK UPDATE

the Centre managed to seamlessly growth of 6.8 per cent in August last play a crucial role in expanding the APY
transfer money to these accounts, par- year. subscriber base.
ticularly women account holders, to Credit growth to the services sector
help the poor tide over the difficult decelerated to 8.6 per cent from 13.3 Banks to get reimbursed
pandemic period. Transfer of money at
per cent last year. for compound interest
such a large scale has earned praise
from multilateral agencies and experts. Pension regulator enables Banks are relieved at the government
notification waiving off only com-
Citing empirical research, the report online onboarding through pounded interest as it will restrict their
said PMJDY accounts work as a primary losses without burdening the fiscal
vehicle for labour remittances, apart bank portal much. The Reserve Bank of India (RBI)
from increased lending, smoothing Savings bank customers of banks may issued a notification directing banks to
consumption, increased spending on soon get another channel for online follow the government order reimburs-
healthcare and, most importantly, the onboarding to Atal Pension Yojana ing small borrowers with loans up Rs 2
usage is more frequent in areas that (APY) - a government-backed pension crore that have paid compounded in-
are more crime prone. scheme targeted at the unorganised terest on their loans between March
sector - without having to use internet
The PMJDY data was juxtaposed with 1 and August 31.
statewise crime data to assess the banking or mobile app. Bankers said the government's clarity
impact of these accounts on crime in Pension regulator PFRDA has now al- and its notification committing to bear
those areas. lowed APY-Points of Presence (PoPs) to the difference between the rates have
introduce an alternative channel for
lifted a major over hang over banks.
Bank credit up 5.6%, de- online on-boarding of their existing "This issue has now been taken care off.
savings account customers through the
posits rise 10.5% bank's own web portal. The fact that the government has
given a timeline for crediting the losses
Bank credit grew by 5.66 per cent to At present, some banks provide online
Rs 103.44 lakh crore, while deposits APY account opening through net to banks is very positive because at
increased by 10.55 per cent to Rs one time we were not sure of what
banking or mobile app. However, a
143.02 lakh crore in the fortnight the court would say and whether we
large number of bank customers who
ended October 9, according to RBI are eligible and can be enrolled under will have to bear the burden," said a
data. bank CEO.
APY, do not use the mobile app or
Banks have to credit customer accounts
In the fortnight ended October 11, netbanking facility. In such cases, these
by November 5 and raise a request for
2019, bank credit had stood at Rs 97.89 bank customers are not able to open
lakh crore and deposits at Rs 129.38 an APY account through online/digital reimbursement from the government
lakh crore. mode. through the State Bank of India which
the government has appointed as the
In the previous fortnight ended Sep- To solve this issue, PFRDA has enabled nodal bank. Banks will have to seek re-
tember 25, 2020, bank credit had the facility of 'Online Paperless On- imbursement from the government
grown by 5.15 per cent to Rs 102.72 boarding of Subscribers using the Web through the State Bank of India, the
lakh crore and deposits rose by 10.51 Portal', sources said. nodal bank appointed by the govern-
per cent to Rs 142.64 lakh crore. This new facility is expected to help ment for this purpose. Banks will be cred-
On a year-on-year basis, non-food bank PFRDA realise its aim of having an over- ited the difference by December 15.
credit growth decelerated to 6 per all APY subscriber base of 30 million by Analysts said the government order
cent in August as against 9.8 per cent March 2021. It maybe recalled that as and the subsequent RBI notification
in the same month last year, central many 3 million new APY subscribers
clears a big overhang on banks.
bank data showed. were added during the pandemic pe- "Already some banks and NBFCs in
Growth in loans to agriculture and al- riod so far this fiscal.
their results commentary have indi-
lied activities rose 4.9 per cent in the Recently, PFRDA Chairman Supratim cated that they have proactively pro-
reporting month, as compared to a Bandyopadhyay had said that banks
vided for the interest on interest,

BANKING FINANCE | NOVEMBER | 2020 | 7