Trends in Banking(Part VI)

HDFC Bank to make its ATMs mini branches

HDFC Bank ATMs will soon give customers instant personal credit, top-up loans & approve credit-card application. The move to make ATMs more than just a cash dispensing tool would help HDFC in morphing to Digital BankHDFC states that it was important that they build “Scale” which could be easily achieved over widespread ATM network

In the First phase, the

bank would offer loans under 10 seconds

across its ATM

Network

At the end of December quarter HDFC Bank had ;11,843 ATMS & 4,281 Branches(cost of setting-up branch was typically 10 times more than cost of setting an ATM) At the end

of third quarter in 2015,the size of HDFC Banks

personal loan book stood at

Rs.35,494 crores against

Rs.24,988 crore in the

same quarter in

2014

The second phase which will begin in April 2016 will have ATMs disbursing top-up loans & renewing Gold Loans

HDFC will be using “Advanced Analytics” to determine a customers worthiness

THE BIG LEAGUEIn the pilot project that HDFC undertook, it was

found that 40-42%of the customers were using the offers on ATM outside the branch-hour timing & out of this 50% were doing it between 5 & 9 AM

Cholamandalam Investments & Finance expects Payment Banks

to start in 12-14 Months(The firm also receives Board Approval to raise Rs.6,000

Crores through Non-Convertible Debentures)

Cholamandalam Investment & Finance Company Ltd launched as the financial services arm of the Murugappa Group is in the

process of appointing a consultant for its payment bank project & is expecting the Bank

to be ready in next 12-14 months

The Board has approved a proposal to invest upto Rs.75

crores in equity shares of Cholamandalam Distribution Services Limited(CDSL),a

100% subsidiary of the company as a long-term investment for its

payment BankThe capital infusion is consequent to CDSL obtaining

an in-principle approval for payment bank license from RBIAs per RBI guidelines/terms &

conditions of in-principle approval for conversion into a

payment bank, CDSL shall maintain a minimum net worth

of Rs.100 cr all timesThe company has posted a growth of

31.2% in net profit at

Rs.148.03 cr during quarter ended Dec 31,2015 as compared to

Rs.112.79 cr posted during the same quarter of 2014

The Board has also approved raising Rs.6,000 cr through Non-Convertible

Debentures

The Total income from operations as on Dec

2015 stood at Rs.1060 crores as against

Rs.970.29 crores during 2014

(an increase of 9.25%)

Cholamandalam Investments & Finance at a Glance

• The Total Assets under Management(AUM)of the company has crossed Rs.30,000 crores & the Net Income margin has seen a growth of 17% during the December 2015 quarter compared to the corresponding quarter of 2014

• According to the company, Profit improvements has happened because of;

• Good Book Growth• Better fee income on disbursement • Cost of funds has been lower• NPAs under control• In December 2015,the Board also approved a proposal to

invest upto Rs.8 crores in White Data Systems India Pvt Ltd towards acquiring controlling stake of 63%.The company is in the business of providing holistic freight data solutions

• CDSL disbursed Rs.3245 cr in Vehicle Finance Business as against Rs.2,290 cr in Dec 2015 quarter.

• Home Equity disbursements grew by 17% from Rs.754 cr during Dec 2014 quarter to Rs.882 cr in the corresponding quarter of Dec 2015 quarter

• The aggregate disbursements for the quarter were Rs.4260 cr as against Rs.3082 cr during the third quarter of 2015

Navigating through the Digital Banking Space(Banks, e-tailers & third-party independent companies are

coming up with interesting options for customers)

Non Banking entities like e-

commerce companies are

offering “Electronic

Wallets”

Banking these days is no longer about opening

accounts or increasing card usage. Every player wants its customer to transact more & provides them all possible ways of transactions using

digital modes

E-Wallets may be issued by;

-Banks-E-tailers

-Third-party independent payment companies like

PayTm/Citus Pay-Also Mobile operators

In semi-closed wallets, the maximum reloadable amount & the maximum balance

every month is Rs.10,000.This can

go upto Rs.50,000/1,00,000

in the wallet if one gives his KYC

documents to the issuer

Typically three types of transactions are done in PayTm e-

wallets;1.Shop & Pay Online

2.Pay Online3.Use it Offline/shop

& use offline

E-Wallets/Prepaid Instruments A major attraction of these e-wallets are -cash-back offers-Discounts -Deals(You spend Rs.500 & get a refund of Rs.70.You save money as you spend)

Punjab & Sind Bank’s Uttar Pradesh’s Biz touches Rs.11,000 Crores

Punjab & Sind Bank has touched almost Rs.11,000

cr in total business in Uttar Pradesh

Punjab & Sind Bank has total of

220 branches across the UP

state

Punjab & Sind Bank has achieved

significant improvement in the credit deposit ratio (CDR) in UP and

are mobilizing low cost deposits,

Chairman of the Bank Jatinderbir

Singh said

The agricultural advances of the Punjab & Sind

Bank UP branches was

over 81% of the priority sector

advances

Of total business of over Rs.10,900 cr,

the deposit & dvances account for Rs.6,000 cr &

Rs.4,000 cr respectively

SMARTPHONES to replace Debit Cards at ATM Machines

(Dozens of US Banks are installing new ATM’s or updating existing ones to allow customers to order cash on a mobile App without having to insert a Bank ATM Card)

The concept of using SMARTPHONE-based system in ATM aims to curb the growing problem of “skimming” in which criminals steal the data on a card often by inserting devices into the ATM Card slot. Skimming cost the Global Banking industry some $ 2 billion in 2015 & can lead to other kinds of fraud when card data is stolenAnother security benefit of using SMARTPHONE-based system in ATM is that authenticating on the handset reduces the time spent at the ATM to around 10 seconds instead of the typical 30-40 seconds

Bank of America(BoA) is currently developing a new card less ATM solution based on NFC(Near Field Communication)technology to allow customers to authenticate without the use of the card. The Bank will roll out this facility in select ATMs in Silicon Valley, San Francisco, Charlotte,New York & Boston

Case Study

In case of Chase Bank, customers will be able to request an access code through the

Chase Mobile App & enter it at the ATM to do their transactions. Later on they will be able to use their digital mobile wallets to

complete the transaction at the ATM

Wells Fargo is also on board developing ATMs that will allow

customers to use their SMARTPHONES to obtain an 8-digit token to authorize a cash withdrawal. Wells Fargo will support Android Pay

for this facility

Chicago-based BMO Harris ,an affiliate of Bank of Montreal began using

SMARTPHONE at its 750 ATMs in 2015

ATM manufacturer Diebold is testing a Headless Teller Machine without a

screen or keypad which dispenses cash from interaction on the

SMARTPHONE. Customers need to only verify their identity which

can be done with the devices fingerprint reader or possibly with an iris scanner on

the ATM

Diebold is testing the new concept with Citibank that

could prove a better experience

Anup George RebelloAsst.Manager

The Catholic Syrian Bank Ltd(anuprebello.6@gmail.com)

http://www.slideshare.net/anuppresentations