Thursday, May 18, 2017

Paytm to launch payments bank on 23 May, Renu Satti to take over as CEO

New Delhi, May 17: Paytm has received the final approval from the Reserve Bank of India (RBI) and is set to launch Paytm Payments Bank on 23 May, its holding company One97 Communications Pvt. Ltd said on Wednesday.

Renu Satti, vice-president of business at Paytm, will take over as the chief executive officer (CEO) of Paytm Payments Bank, the company said. Shinjini Kumar, who was hired in February last year by Paytm to lead the payments bank, is on her way out, according to people directly involved in the matter. Kumar was a former senior executive at the Reserve bank of India.

Satti has been with Paytm for nearly a decade now and started out as manager of human resources at One97 Communications. Since then she has worked on several projects, including Paytm marketplace and the wallet business.

One97 Communications founder and CEO Vijay Shekhar Sharma was among the 11 applicants to receive RBI’s in-principle nod for a payments bank licence in November 2015.

In January, Paytm had said it received the final approvals from the RBI and was planning to start payments bank in one or two months, but the launch was delayed. In the same month, Bharti Airtel Ltd started operations for Airtel Payments Banks, a joint venture between Bharti Airtel Ltd and Kotak Mahindra Bank Ltd.

Paytm said that all active wallet accounts on the payments app will be transferred to the payments bank. “As per the directions of RBI, the company will be transferring its wallet business to the newly incorporated payments bank entity, Paytm Payments Bank Ltd, under a payment bank licence awarded to a resident Indian, Vijay Shekhar Sharma,” it said in a statement.

Paytm will allow users, who do not wish to transfer their accounts, to opt out through a written request, while for accounts dormant for six months and having zero balances, Paytm will transfer wallets only when the user notifies it to do so. Such communication will have to be made before 23 May.

Paytm Payments Bank has set itself a target of 200 million accounts, across current and savings accounts, and mobile wallets, within 12 months of the launch. It aims to touch half a billion accounts by 2020. Paytm has close to 218 million wallet accounts.

Friday, May 12, 2017

SBI New ATM, Cash Transactions Service Charges wef 01.06.2017

SBI clarified on new charges on ATM and cash transactions to be effective from June 1

New Delhi, May 11: India’s largest lender State Bank of India, revised service charges on various cash transactions for its customers, effective from June 1.

Announced in a circular on the SBI website on Thursday morning, the revisions initially created confusion among customers over news that all cash withdrawals through ATM will now be charged at Rs. 25 per transaction. The bank later clarified that the Rs. 25 charge will be levied only on withdrawing money from an ATM through SBI’s mobile wallet app “State Bank Buddy.”

In an emailed statement to NDTV Profit, an SBI spokesperson clarified that a limit of four ATM withdrawals per month only applied to the Basic Savings Banks deposit account.

All normal Saving Bank accounts will continue to get 8 free ATM transactions (5 SBI ATMs + 3 other bank ATMs) in metros & 10 free transactions in non-metros (5 SBI ATM + 5 Other Bank ATMs) free, the clarification added. 

Apart from ATM charges, SBI also  revised service charges on various cash transactions for its customers. Here are some of the other key changes.

  1. Online Transfers: Online fund transfer through IMPS will now be charged Rs. 5 plus service tax for amounts of up to Rs. 1 lakh, Rs. 15 plus service tax for above Rs. 1 lakh and up to Rs. 2 lakh and Rs. 25 plus service tax for above Rs. 2 lakh and up to Rs. 5 lakh.

  1. Exchange of Soiled Notes: Going forward SBI said it will charge 2 rupees for every soiled note on exchange of more than 20 notes or if the total value of exchanged notes is above Rs. 5,000 plus service tax.

  1. Cheque Books: From June 1, a customers with a Basic Savings Bank Deposit will have to pay Rs. 30 plus service tax for a 10 leaf cheque book, Rs. 75 with service tax for 25 leaf cheque book and Rs. 150 plus service tax for a 50 leaf cheque book.

  1. Charges on ATM Cards: SBI said that issue of new debit cards will be charged from June 1 and only Rupay classic card will be issued for free.

  1. Cash Withdrawals: Customers with a Basic Savings Bank Deposit will get four free withdrawals (including ATM) in a month, after which withdrawals will be charged at Rs. 50 plus service tax at an SBI branch and at Rs. 20 plus service tax at other bank ATMS.

  • Cash deposit through banking correspondents of up to Rs. 10,000 (in multiples of 100) will be charged at 0.25 per cent of the value with a minimum of Rs. 2 and maximum of Rs. 8, plus service tax.
  • Cash withdrawal through the same channel of up to Rs. 2,000 (multiples of 100) will be charged at 2.50 per cent of the transaction value (minimum of Rs. 6), plus service tax.

Thursday, May 11, 2017

We Should Try to be Among World's Top 30: SBI

Excerpts from an interview with State Bank of India chairman Arundhati Bhattacharya...

On preparations for the merger

We started with putting together a team at the corporate centre and transition teams on ground. There were seven groups, including technology, accounting, credit quality, organisational structure and human resources. Each group had members from both SBI and the subsidiary working out challenges, gaps and what we wanted to achieve. Then there was the monitoring committee led by the MD of associates and subsidiaries and MDs of the associate bank. I will sit in on the review process of the plan on a quarterly basis or more frequently, if needed.

On the most challenging part of the process

Two things. The first is the HR piece. It is a question of so many people coming into the organisation. When we discuss a merger of two parties, we talk of culture. Here, the DNA and culture of seven organisations are coming together (SBI, five subsidiaries and Bhartiya Mahila Bank). We have to make sure the people are handled and re-skilled properly. HR is the biggest challenge.

The other thing is IT. While everyone uses the same central system, the versions are different, patches are different. There were 350 applications in different banks which need to be aligned. There were overlaps, so we needed to pick one. In some cases, we felt we did not need to pick it at all. We ran 62 mock trials of the data merger to ensure that the final integration works smoothly.

On whether the process will divert focus away from the core business

Not at all. For all those not involved in the merger process, it was business as usual. To ensure that people would not take their eyes off routine banking, we opened clear lines of communication. Internally, we held town halls. Deputy managing directors of subsidiaries held interactive sessions on a regular basis to ensure people didn't pull back on work.

Among customers, there is more than 80% overlap in the loan books, so teams were patched together and handed over to single customer relations managers. A few days ago, we discussed how we can showcase better abilities to the customers of erstwhile banks. Under SBI, we can offer any loan product that was not available to subsidiary customers so far.

On competing against the private sector

We will have a bigger reach along with our global presence. This is a network customers can truly leverage. It gives us an even bigger advantage in the retail space. We can leverage technology synergies. For example, a customer can generate a token number from the app and needn't stand in line at the branch. Our digital and social media efforts can now be combined. The move also frees up some very highly skilled people. Earlier, there were five treasuries using 200 people. The expanded treasury is only using 20 more people, so 180 highly-trained staff are free for other tasks.

In the corporate book, we have 80% common customers. So six independent teams were serving accounts of the big conglomerates but now we need only one. These high quality and skilled teams can be redeployed. There were also some gaps in mid-level management that arose from lower hiring in certain years. Those have been bridged completely.

On how long before competitors have to face up to the new SBI

One or maximum two quarters!

On global prospects

We will grow our international banking in a way that makes sense for us. We have some very good prospects in the neighbourhood. We will be in places where there is a market especially for our kind of offerings. We should gradually try to be among the top 30 from the current top 50 globally.

On targets from the merger

Increase the retail share in the portfolio from the current 54%. Our agri business and SME have been de-growing, which we should correct.

Wednesday, May 10, 2017

Wage talks: ‘Conditional mandate’ to IBA irks State Bank officers’ Federation

Wage talks: ‘Conditional mandate’ to IBA irks State Bank officers’ Federation Goes against the spirit of bilateralism followed thus far, says officers’ body

Thiruvananthapuram, May 8:  A ‘conditional mandate’ given to Indian Banks’ Association (IBA) for the ongoing 11th bipartite negotiations has irked the All India State Bank Officers’ Federation (AISBOF).

“We are given to understand that the bank has given a conditional mandate authorising the IBA to negotiate in respect of officers in Scale I to III only,” Y Sudarshan, General-Secretary of the federation wrote to the Chairman of State Bank of India.

Revised mandate

“We request you to kindly send a revised mandate authorising IBA to negotiate with us on behalf of all scales, which has been the practice hitherto, based on Pillai Committee recommendations,” Sudarshan said.

The bipartite negotiations began on May 2. The conditional mandate, he said, goes against the spirit of bilateralism that has been followed thus far at the industry level.

It would hurt the sentiments not only at the bank level but also at the industry level since the AISBOF has often set the agenda for the peers. It claims to represent the interests of nearly a lakh officers.

Sudarshan recalled that the federation has been pursuing issues related to officers of all scales. It has supported all progressive initiatives of the bank, right from computerisation and business process re-engineering to merger of associate banks.

He hoped that the conditional mandate would not be stretched to the levels of hurting the sentiments of all concerned, leading to potential industrial-relations issues.

Better deal sought

Such a decision does not augur well for strengthening officers’ confidence in the bank and earning their trust. Dividing them on the basis of ‘scales’ tantamounts to ‘divide and rule’ policy that is not in the interest of either party.

Sudarshan also flagged pending issues on which the management has failed to respond despite many reminders. This included a plea for a better deal for officers of associate banks that merged into SBI as also of existing officers of SBI.

The officers have helped with the successful implementation of demonetisation but till today they have not been compensated for late-sitting or for working on holidays.

Staff strength is steadily going down increasing the work pressure, which has disturbed the work-life balance. Many of the entitlements and perks revised once in three years have not been enhanced even after four/five years, he said.

The AISBOF leader said that members would be forced to go on an agitation if these issues are not sorted out soon.

Monday, May 8, 2017

SBT branches won’t be shut immediately: SBI

Kochi, May 6: The State Bank of India has clarified that it would not immediately close down the branches of the State Bank of Travancore that merged with it recently. The assurance has come after the list of SBT branches that have been identified for closure after the merger was doing the rounds.

Now the bank is focusing on coordinating the functions of the employees as well as the customers. The SBT branches will continue to function as SBI branches for the time being, it has been clarified.

On winding up a branch, the SBI would have to surrender its license with the Reserve Bank of India. The bank does not intend to take any such action at present. It intends to relocate certain SBT branches within the same panchayat and municipal areas where they are functioning at present.

This mostly applies in the case of branches of the two banks that had been functioning in a locale or in the same building before the merger.

The SBI had identified 189 branches that needs to be relocated after the merger long back. The process would be completed only within a year or two and for the time being the branches would function without any hitch.

Now the priority is for training SBT staff to sell the banking products and improving the service to customers. Such training is progressing at various centres. Care should be taken to protect the customer base of SBT, so that other banks would not canvass them. Employees should ensure that they are getting the same service even after the merger.

But employees who have completed three years at one branch are being transferred. Additional posts are also being created for ensuring the efficient disbursal of loans to customers at certain branches.

Thursday, May 4, 2017

Banks may push for variable pay for employees in wage negotiations

 Mumbai, May 3:  Banks Unions and the Indian Banks' Association (IBA) are likely to introduce variable pay as it initiates the negotiations for the next wage settlement in the banking industry.

Talks between IBA and the bank unions under the banner of United Forum of Bank Unions (UFBU) were held at Mumbai on May 2.

Bank unions are resisting variable pay but want a salary that is at par with the central government employees with the revision of Seventh Pay Commission.

"AIBEA would like to expedite the settlement on time. We deserve a good revision in our wages to catch up with the market as well as commensurate with the increased work load in banks of late," CH Venkatachalam, General Secretary of All India Bank Employees' Association (AIBEA) had said.

The negotiations will be around the merger of Dearness Allowance (DA) and basic pay, percentage of hike or the load factor / amount and distribution of the load to different components of salaries.

The IBA is likely to introduce variable pay as the Khandelwal committee recommendations have also pushed for it given that the bipartite agreement does not consider new challenges arising out of competition, eliminates professionalism and has no relation with the capacity of individual banks to pay.

Punjab National Bank Chairperson Usha Ananthasubramanium, during her last analysts meet, had sounded out, “Today, an employee’s salary is predictable. There is a need to recognise performance and give remuneration. We have formed an internal committee of general managers to work on this matter and submit the proposal to the board."

In the last wage negotiation between the unions and bank management, IBA had settled for a 15 percent hike.

The negotiation meeting on May 2, would be led by Rajeev Rishi, Chairman of IBA. Representatives from the Workmen Unions / Officers Associations of United Forum of Bank Unions (UFBU) will be meeting the negotiating committee of the IBA.

This would be the 11th bipartite settlement on wage revision for nearly 8-9 lakh bank employees and officers of 21 public sector banks. The wage revision is due from November 1, 2017.

Since 1996, 10 industry level bipartite settlements have been signed by IBA with the bank unions for five year tenures. This would be the 11th after the 10th settlement signed in May 2015 covering the period from November 2012 to October 2017.

The finance ministry had recently asked the heads of public sector banks finalise the modalities for timely implementation of the next pay revision.

The Banks Board Bureau Chairman Vinod Rai also recently made a case for an improved compensation package across the board of public sector banks.

"Maybe, we are not able to do much with the fixed part of compensation package but (with) variable part we are hopeful that in the next financial year (2017-18), we will be able to introduce a far more attractive package which do have bonuses, ESOPs and other performance linked incentives as part of the package," he said.

Rai has also suggested that managing directors of the public sector banks should be appointed for minimum 6 years.

Wednesday, May 3, 2017

Banking union sources said there was a meeting on 11th bipartite wage revision

Mumbai, May 2:  Wage negotiations between bank employees and managements got off the ground with an aim to finalise the package by October-end.

United Forum of Bank Unions (UFBU) is representing officers, employees, and staff organisations. Indian Banks’ Association (IBA) is representing bank managements.

Banking union sources said there was a meeting on 11th bipartite wage revision. While unions have already submitted a summary of demands, IBA may place its offer in 7-10 days.  

Sanjeev K Bandlish, convenor, UFBU, will lead the team from workers’ side. From bank managements’ side, a panel of bankers headed by R K Takkar, managing director and chief executive officer (MD and CEO) of UCO Bank will carry on negotiations. Other members of IBA panel include Usha Ananthasubramanian, MD and CEO of Punjab National Bank; Shyam Srinivasan, MD and CEO of Federal Bank; and P S Jayakumar, MD and CEO of Bank of Baroda.

Most public sector banks including State Bank of India have given board-approved mandate for talks. With many state-owned banks reeling under losses due to loan-loss provisions, the scope for meaningful improvement over last wage settlement is limited.

The term for industry-wide wage pact ends in October. The last negotiation, pending since 2012, was settled in May 2015, with 15 per cent hike which was the lowest achievment (below the average increase). On that time other's achieved highest increase in their salary (like for LIC & Central Govt.)

Tuesday, May 2, 2017

Bank Staffs Salary will be reduced by 1.3% of Basic from May 2017

13 slabs are reduced in the DA rate.

The new DA rate for the month of May, June & July 2017 is reduced by 1.30%.

Now, the new DA rate would be 45.60%.