Page 9 - Banking Finance AUGUST 2015
P. 9
RBI CORNER
Banks non-food credit Mass Transit Operators to issue own pre-paid card: RBI
rises to 8.9% in April
The Reserve Bank of India (RBI) has Settlement Systems Act, 2007. RBI
Non-food credit of scheduled com- recently given a proposal which states said that it has been receiving requests
mercial banks rose from 8.9 per cent
on a year-on-year basis to Rs. that mass transit system operators from various segments, including
60,41,400 crore in April as against (MTS) such as Mumbai Metro or Delhi providers of mass transit service, such
non-food credit growth with 14.2 per Metro should issue their own prepaid as metro train and road transport ser-
cent in the same period last year cards, a move to change the current vices, indicating the need for PPIs ca-
according to RBI data released scenario where MTS op-
recently. tering to the require-
The Data on credit development was erators need to tie up ment of this segment to
collected from 46 scheduled com- with banks to issue pre- enhance commuter con-
mercial banks, accounting for about paid cards which enables veniences.
95 per cent of the total non-food customer to tap and pay
credit deployed by all scheduled for transit rather than It further said that the
banks. Banks advances to agriculture standing in long queues migration of micro and
and allied activities increased 14.1 to buy tickets for travelling. small value cash pay-
per cent in April 2015. This was how- ments to electronic payments can play
ever, lower than 14.8 per cent in
April 2014. The draft norm issued by RBI says that, a significant role to achieving the vi-
pre-paid payment instruments (PPI) by sion of less-cash society and MTS is
RBI directs banks to pro- MTS operators will be a new category one such area where a large number
mote Agri hedging of semi-closed PPI which will have to of small value cash payments take
The Reserve Bank of India had asked be authorized under Payment and place.
the banks to encourage borrowers
of agricultural products to hedge RBI liberalizes authentication rules for small value
their risk on commodity derivative
exchanges. transactions
National Commodity and Derivatives The Reserve Bank has relaxed the payments up to Rs.2,000 made through
Exchange (NCDEX) is the largest for contact-less cards. It might no longer need additional authentication. The
trading in agri commodity derivatives move has been taken to do away with additional security features in light of
and also has a platform for forward new technologies available to protect customer interests.
trading. At present, some banks
have tied up with NCDEX or its sub- RBI decree on card issuance
sidiary for trading in spot markets
for lending agents stocks deposited The Reserve Bank of India has advised banks that with effect from September
in recognized warehouses and it has 1, 2015, all new cards - debit and credit, domestic and international - issued
been hedged on the exchange's by them should be EMV (Europay, MasterCard, and Visa) chip - and pin-based
platform. It is the first time that RBI cards. The RBI observed that while some banks have already moved to EMV
has directly asked banks to encour- chip and pin cards issuance, a large number of banks continue to issue mag-
age hedging by their borrowers, netic strip cards. In this regard, it pointed out that the acceptance infrastruc-
thereby helping banks to manage the ture is getting geared up to accept EMV chip and pin cards.
risk in such loans.
An abrupt fall in the bank credit in march quarter: RBI
The RBI data releases reflects that the bank credit grew at a sluggish rate of
9.8 per cent and deposit growth rate slowed down in 10.7 per cent in the March
quarter. Both credit and deposit had recorded a growth
of 13.8 per cent during the same quarter of last year.
"The declaration was broad-based and observed across
all population groups except rural" RBI said. The growth
in gross bank credit increased to 14.7 percent for 'rural'
in March 2015 from 14 per cent a year ago.
BANKING FINANCE | AUGUST | 2015 | 9
