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Tuesday, October 29, 2013

Banks asked to charge for SMS alerts on usage basis

Banks asked to charge for SMS alerts on usage basis - The Hindu var _comscore = _comscore || [];_comscore.push({ c1: "2", c2: "11398210" });(function() {var s = document.createElement("script"), el = document.getElementsByTagName("script")[0]; s.async = true;s.src = (document.location.protocol == "https:" ? "https://sb" : "http://b") + ".scorecardresearch.com/beacon.js";el.parentNode.insertBefore(s, el);})(); Follow Today's Paper Archive Subscriptions RSS Feeds Site Map ePaperMobileApps Social SEARCH

Home News Opinion Business Sport S & T Features Books In-depth Jobs Classifieds Shopping Bus tickets Industry Economy Markets Stock Quotes Business» IndustryMumbai,October 29, 2013 Updated: October 29, 2013 14:16 IST
Banks asked to charge for SMS alerts on usage basisPTIShare · Comment · print · TweetTOPICS computing and information technology IT Enabled Services
telecommunication service
macro economics central bank
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The RBI on Tuesday asked banks to charge customers for transaction SMS alerts on the basis of usage, instead of imposing a fixed fee, to ensure equity and be reasonable.

“Banks are advised to leverage the technology available with them and the telecom service providers to ensure that such (SMS) charges are levied on all customers on actual usage basis,” the Reserve Bank of India said in its Second Quarter Review of Monetary Policy 2013-14.

It said fees based on actual usage are necessary to ensure reasonableness and equity in charges levied by banks.

In March 2011, the RBI had set guidelines for banks to send online alerts to customers for all types of transactions, irrespective of the amount. However, the central bank had not issued rules on charging customers for these alerts.

Earlier in the year, State Bank of India imposed an annual charge of Rs 60 for SMS alerts, a step followed by lenders such as Canara Bank.

Other PSU banks, including Punjab National Bank, State Bank of Patiala, IDBI and Vijaya Bank, have also been levying a fee for SMS alerts.

Keywords: SMS transaction, SMS alerts, RBI directive, RBI monetary policy

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Restructure crop loans, banks told

Restructure crop loans, banks told - The Hindu var _comscore = _comscore || [];_comscore.push({ c1: "2", c2: "11398210" });(function() {var s = document.createElement("script"), el = document.getElementsByTagName("script")[0]; s.async = true;s.src = (document.location.protocol == "https:" ? "https://sb" : "http://b") + ".scorecardresearch.com/beacon.js";el.parentNode.insertBefore(s, el);})(); Follow Today's Paper Archive Subscriptions RSS Feeds Site Map ePaperMobileApps Social SEARCH

Home News Opinion Business Sport S & T Features Books In-depth Jobs Classifieds Shopping Bus tickets National Andhra Pradesh Karnataka Kerala Tamil Nadu Other States National» Other StatesBHUBANESAR, October 29, 2013 Updated: October 29, 2013 14:30 IST
Restructure crop loans, banks told Staff ReporterShare · Comment · print · TweetTOPICS Orissa Bhubaneswar
economy, business and finance agriculture
financial and business service banking
After cyclone and floods damaged crop fields in the State, the State government on Monday moved to restructure and re-phase crop loans.

At a hurriedly convened meeting of State Level Bankers’ Committee, Additional Chief Secretary and Finance Secretary U. N. Behera asked bankers to consider converting short-term loan into medium term loan at 2 per cent per annum for farmers. This would enable the farmers to utilise fresh crop loan in view of recent cyclone and flood, Mr. Behera said.

All banks including commercial banks, regional rural banks and co-operative banks were advised to restructure and re-phase the existing loans in affected areas as per RBI guidelines. Besides, banks were urged to give importance to fresh loan to victims for resumption of normal business.

Focusing on rabi crop loan finance, Mr. Behera called upon all banks to achieve the annual target of crop loan and term loan of agriculture, including allied sector, positively.

Banks were also asked to implement RBI guidelines with regard to rehabilitation package in respect of micro, small and medium enterprises (MSMEs).

The State Level Bankers’ Committee resolved to expedite the credit delivery to affected people by organising special camps by the line departments of the government in coordination with the banks. All banks were advised to issue necessary instructions to the branch-level functionaries for implementation of action plans that emerged at the meeting.

It was also decided to hold monthly review meeting at the State level as well as district level for close monitoring of progress of implementation of relief and tehabilitation measures to be undertaken.

Despite the emphasis laid on crop loan, commercial banks and other public sector banks have failed to achieve targeted disbursement of agricultural loan in the State.

The State had set a target disbursement of crop loan of Rs. 13832.31 crore from 41 scheduled banks. However, after kharif season, banks had disbursed only Rs. 5226.12 crore registering an achievement of 37.78 per cent.

The achievement of public sector banks in crop loan was 24.45 per cent, private sector banks (18.36 per cent), two regional rural banks (27.08 per cent), commercial banks (25.26 per cent) and cooperative banks (48.42 per cent).

Taking exceptions to dismal rate of agriculture loan disbursement by banks during kharif season, the government had even threatened to drop several banks from the list of banks eligible for investment of government and public sector fund. This flood had damaged 1.98 lakh hectares of crop area.

Keywords: crop loans, MSMEs, cooperative banks, rural banks, agriculture loan

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RBI allows banks to pay interest at shorter intervals

The Hindu At presetn banks are required to pay interest on savings and term deposits at quarterly or longer intervals. Savings bank account and term deposit holders can now earn interest at shorter intervals, with the Reserve Bank on Tuesday allowing banks to revise the periodicity of interest payments.

“As all commercial banks are now on core banking platforms, it has been decided to give banks the option to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals,” RBI Governor Raghuram Rajan said in its Second Quarter Review of Monetary Policy 2013-14.

Now, banks are required to pay interest on savings and term deposits at quarterly or longer intervals.

The savings deposit rate for most banks is 4 per cent per annum, while in some cases, it is as high as 7 per cent. The interest rate on savings bank accounts is calculated on a daily basis. Term deposit rates are 8-9 per cent for tenures of one year and above.

In 2011, the RBI decided to give freedom to commercial banks to fix savings bank deposit rates, the last bastion of the regulated interest-rate regime.

While giving banks this freedom, the RBI had said a uniform rate will have to be offered on deposits of up to Rs 1 lakh. On higher amounts, banks are allowed to offer differential rates to depositors.

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Friday, July 12, 2013

Ask 4 Questions About College Savings Plans at Banks

Parents shouldn’t pick a college savings plan solely because it’s sold by their bank.

Parents shopping for a college savings account have at least one place they can visit: a local bank. But before putting their money into an account offered by a bank, there are a few things they should know.

"Your bank may say, 'We have a college savings plan,' which may be true and legal and okay," says College Savings Plans Network Chairman Mike Fitzgerald, but it may or not be a tax-advantaged 529 plan.

Only six states offer 529 plans where banks act as the program manager, the direct contact for consumers: Arizona, Indiana, Montana, Nebraska, Alabama and Illinois.

[Understand how to juggle multiple 529 plans.]

But even outside of those six states, banks could still offer an adviser-sold 529 plan, experts say. An adviser-sold plan is a 529 plan that is sold through financial advisers instead of directly through a state agency or program manager. The drawback is that these plans generally have higher fees, but the plans offer more investment choices and one-on-one help from a financial adviser.

Parents who want to find out what the bank is really offering should ask these questions recommended by Fitzgerald and Rob Seltzer, a California-based certified public accountant and personal financial specialist.

1. Is it a 529 plan? The first question a parent should ask is whether the product the bank is offering is a 529 plan. A college savings plan that isn't a 529 plan can have all the same investment ingredients such as savings, certificates of deposits and mutual funds. But because it's not an official 529 plan, it doesn't qualify for federal tax benefits, state matching grants or state tax credits and deductions, says Fitzgerald.

[Learn how to earn high interest with a 529 plan.]

The other drawback of a college savings account that's not a 529 plan is that the account could have a larger effect on a student's financial aid award if it's in the student's name, he says. This is because children's assets and income impact financial aid awards more than a parent's income and assets. If a parent starts a 529 plan for a child, the money in the account is counted as parental assets.

2. Is it a direct-sold plan? A direct-sold plan is a plan offered directly by the state, and which generally has lower fees on investments, Fitzgerald says. The alternative to a direct plan is an adviser-sold plan that generally has commission fees built into the cost because the investment plans are sold by advisers. Banks can run a direct-sold program on behalf of the state.

First National Bank of Omaha, for example, is the program manager for Nebraska's direct-sold 529 plan. Parents can find out who manages their state's 529 plans at collegesavings.org.

3. Is the bank affiliated with a brokerage? Banks generally handle college savings plans that aren't 529 plans, whereas affiliate brokerages sometimes sell the 529 plans. If a 529 plan is an adviser-sold plan, your bank could have investment advisers who can enroll you in a 529 plan or have a business relationship with a brokerage that will sell you a 529 plan product, Seltzer says.

This doesn't mean parents will pay higher fees than they would with another adviser-sold plan, but it can mean your bank may be splitting the commission on your investments, he says.

That could give the bank a reason to encourage the individual to choose that brokerage over another or instead of a direct plan that has lower fees.

Corrected 6/26/13: A previous version of this article misstated Mike Fitzgerald’s position.

View the original article here