Page 5 - Banking Finance February 2022
P. 5
BANK UPDATE
Banking News
Global vendors refusing The e-mail continued, "Effective De- As per Section 45 of the Banking Regu-
cember 15, 2021, Heroku is no longer lation Act, the Reserve Bank of India
credit cards issued by In- accepting credit cards issued from In- (RBI) has the power to apply to the
dian Banks dia banks. Customers who are unable Central Government for suspension of
Even as the Reserve Bank of India's to utilise a different credit card will business by a banking company and to
deadline to adopt tokenisation for have until end of January 2022 to down- prepare a scheme of reconstitution of
cards nears and start-ups continue to load their data, at which point their amalgamation.
find alternative ways to make pay- account will be suspended and then It may be recalled, sometime back,
ments, global vendors have started deleted." Tamil Nadu based Lakshmi Vilas Bank
taking the extreme step of not accept- (LVB) was amalgamated with DBS
ing cards issued by Indian banks. RBL Bank depositors pro- Bank when the former's financial posi-
Recently, Chennai-based entrepreneur tected, unanswered ques- tion went bad.
Nalin Narayan came in for a shock tions remain: AIBEA While the LVB shareholders did not get
when Heroku, a platform-as-a-service anything, the funds of the depositors
(Paas) solution offering, announced Depositors of the RBL Bank Ltd need were safe.
not worry about the safety of their
discontinuing services to Indian cus- "The RBI may impose a moratorium
tomers citing issues with accepting money as Section 45 of Banking Regu- and some other conditions on with-
subscription fee through Indian credit lation Act will protect their interests, drawal of deposits when it amalgam-
and debit cards. said a top leader of All India Bank Em- ates a weak bank with another. But the
ployees' Association (AIBEA).
Narayan is currently working on his depositors will not lose out,"
CRM and marketing SaaS app for his He also said the branch expansion by Venkatachalam said.
stealth mode start-up and he had sub- RBL Bank within a short span of time - The RBI on its part said the bank's fi-
scribed to Heroku for deploying his app - from 92 branches in 2010 to 196 in nancial condition is stable.
and back-end infrastructure support. 2015 and 462 in 2021 -- resulted in in-
creased operational expenses, deposits
"Thank you for your patience while we as well as loans and finally the non-per- HDFC Bank ties up with
worked through the RBI regulation forming assets (NPA). IPPB to serve semi-urban,
changes. Unfortunately, because of
these new regulations, Heroku is un- Allaying fears of RBL Bank depositors on rural areas
able to verify and process India issued the safety of their money C.H. HDFC Bank has tied up with India Post
credit cards for Heroku online custom- Venkatachalam, General Secretary, Payments Bank (IPPB) to offer its bank-
ers," Heroku said in an e-mail to AIBEA told IANS: "Section 45 of the ing services to the unbanked and
Narayan. A copy of the e-mail was re- Banking Regulation Act gives the de- underserved segments in semi-urban
viewed. positors the necessary protection." and rural areas.
BANKING FINANCE | FEBRUARY | 2022 | 5