Tag Archives: India

SBI (Big Daddy) finally enters the Cash@POS arena

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Would you like to withdraw cash at your local supermarket/grocery store? Just to refresh reader’s memories. Way back in 2009, Reserve Bank of India, permitted Banks to offer cash withdrawal facility at POS(Point of Sales) Terminals.

During the last 5 years there was not much traction in this ePayments division. Banks like IDBI entered had offered the Cash@POS to their debit card holders. However, the transactions volumes were negligible and there were very few marketing campaigns by the Banks.

The Big Daddy of Indian Banking i.e State Bank of India plans to deploy over 1.25 lakh point-of-sale (POS) terminals in the next 18 months at various merchant outlets and counters at branches across the country.

POS terminals help customers carry out cashless transactions at merchant outlets by swiping credit/ debit cards on the POS machine.

Further, the terminals also facilitate withdrawal of cash (up to a maximum of Rs 1,000 a day according to existing RBI guidelines) using debit cards at designated merchant outlets.

As the merchant outlets have to be physically manned, the Cash withdrawal at POS terminals will help the merchants reduce the risk and costs associated with handling cash and also earn a small commission.

The terminals that SBI is planning to roll out will enable transactions using credit, debit and pre-paid cards. Besides, they will also support signature based, chip based and personal identification number based cards.

In its annual report, SBI said “In order to create a comprehensive electronic infrastructure in the country, activate the debit cards on PoS terminals, increase visibility and tap the huge potential available in the market, Merchant Acquiring business is being conducted by the bank.”

In line with RBI’s proposition to allow cash withdrawals through prepaid cards issued by banks from point of sale terminals, India’s biggest lender has come up with the Cash@POS facility across the country from last week that lets merchant shops act as ATM counters.

This helps customers to withdraw about Rs 100 to Rs 1,000 per debit card per day at any of this point of sale (PoS).

“Though the facility will be made applicable to all debit cards issued in India, to start with, we are rolling out the facility with SBI group debit cards,” said P.V. Rajamani, AGM, merchant acquiring business, of the bank.

 

This includes customers of State Bank of Travancore, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Patiala and State Bank of Mysore.

Though RBI had permitted cash withdrawals at PoS terminals through debit cards way back in 2009, the service had not taken off owing to various reasons including lack of clarity on processing fee structures. In other countries, stand-alone cash withdrawal at POS terminals is not permitted. Bank customers have to club their purchase payments and cash withdrawals in a single transaction. However, in India, stand-alone cash withdrawals at POS Terminals are permitted. Hence, this is an attractive feature for merchant outlets to offer at their end.

For now, a convenience fee of one per cent of the transaction amount will be levied on the cardholder which can be anything in the range of Rs 7.50 to Rs 10. This convenience is less when compared with the cost of travelling to an ATM.

Merchants will be paid an incentive of Rs 5 for every successful transaction along with the cash paid to customers.

Closing of Old Outstanding Bills : Export-Follow-up–XOS Statements

The exporter is legally bound to realize and repatriate full value of goods or software to India within a stipulated period, depending on the category to which he/she belongs too.

Like all business transactions, there could be cases wherein the payments are not received or received but not repatriated.  To understand the nature of O/s Export Bills, as per A. P. (DIR Series) Circular No. 12 dated September 9, 2000, AD Category – I banks are required to furnish to the Regional Office concerned of the Reserve Bank, a consolidated statement in Form XOS giving details of all export bills outstanding beyond six months from the date of export on a half yearly basis as at the end of June and December every year.

Reserve Bank of India, vide Notification No RBI/2013-14/325,A.P. (DIR Series) Circular No. 62 dt.October 14, 2013, has  decided that an old export bill may be closed by AD banks as a onetime measure, provided

  • With ceiling of USD 1, 00,000 and outstanding beyond 15 years as on December 31,2012
  • With ceiling of USD 50,000 and outstanding for more than 5 years as on December 31, 2012, where customers not traceable subject to proof of non traceability from competent authority and under bank’s internal boards approved policy.

 

Report of such closed cases should be submitted to concerned Regional Offices of Reserve Bank of India by AD banks and after closing of cases, there will be no further follow up by Ads. Hence, these outstanding bills need not be reported in future Export Outstanding Statements (XOS).

India’s Subsidy disbursement engine – NPCI ACH-APB

The first set of subsidy disbursements are getting routed through the NPCI ACH-APB mode.   The LPG Subsidy disbursements are routed through the beneficiaries’ ‘Aadhaar Number’. The ‘Aadhaar Number’, is the common link between the LPG companies and the Banks.

Over the last few months, there has been a steady increase of LPG subsidy transactions.

 

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The Banks have to seed the Aadhaar numbers in the customer’s banks accounts, and share such Aadhaar numbers with NPCI.

Based on the mapping done in the NPCI Aadhaar Mapper, the transactions are routed to the destination bank.  Destination banks based on the Account Number-Aadhaar number mapping, route the funds to the respective destination account.

The return file sent to NPCI should invariably contain the Beneficiaries’ Account Holder Name and Beneficiaries’ Account Number.  This is a vital requirement for Subsidy disbursement departments to answer any queries. The information is important from a risk-angle too.

At the launch of ACH-APBS, the guidelines clearly mentioned that the return file should contain the Beneficiaries’ Account Holder Name and Beneficiaries’ Account Number. However, still 30% of the transactions do not contain the requisite data.

NPCI has made it mandatory that the two fields are included in the APB Return file w.e.f November 11, 2013.