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Economy Oct 30, 2012

RBI announcement: Of Credit report, fake notes and NEFT

By Bindisha Sarang

In its second quarter review of monetary policy 2012-13, the Reserve Bank of India has taken some measures to improve various customer service issues.

NEFT: Take for instance, the efficiency of the system and enhancing customer service for you as far as National Electronic Funds Transfer (NEFT) goes.

What they did: As per its statement, starting from 19 November, an additional batch of National Electronic Funds Transfer (NEFT) will work, that will start at 8:00 am. Currently, NEFT operates in hourly batches - there are eleven settlements from 9 am to 7 pm on week days (Monday through Friday) and five settlements from 9 am to 1 pm on Saturdays.

As far as fake notes goes, you won't be able to palm them off to the banks, since RBI has asked banks to be very strict as far as impounding fake notes goes.

Why this move: This move comes in to meet the growing demand and increasing volume of NEFT transactions. Due to the heavy demand, there is decongestion that build-up of transactions in the first batch on all days including Saturdays. Typically the beneficiaries' banks get credited with the transferred amount either on the same day or on the next working day morning. But instances of delay have been known for various reasons. With an additional batch, let's hope the decongestion issue to eases out and delays are prevented.

Credit Report: RBI had observed that even though there are a number of credit information granting companies (like CIBIL, Experian, etc), the number of credit reports accessed by banks to take a decision while granting loans was not as per its expectation. RBI has reinstated that banks should make extensive use of available credit information as a part of their credit appraisal process. Also RBI told banks to provide lenders timely and accurate credit information on their borrowers to credit information companies, for as update of borrowers' records.

What this means:
Banks have to be prompt while sharing the latest information on your account to credit bureaus. This means, if there are any errors on your report, they could be rectified sooner. Also, if you haven't taken your credit report seriously until now, it's about time you do so. RBI has strictly told banks to take into account your credit report before giving you any kind of credit.Detailed guidelines in this regard are being issued separately.

Aadhaar for Authentication for Securing Card Present Transactions:
Another move on the cards is that banks consider the Aadhaar biometric authentication along with the MagStripe (black magnetic stripe at the back of a credit/ debit card) as an additional factor of authentication for card present transactions (where physical card is used) at ATMs and POS terminals. This move is expected to make such transactions safer for consumers and decrease the risk of frauds. RBI will come up with further steps and guidelines regarding the same, in the future.

Currency Notes issues:
If you are tired of soiled, damaged or even fake currency notes, RBI has suggested some guidelines to bank, which would handle this issue. RBI has asked banks to identify four-five branches at each of the centres where the Reserve Bank's Issue offices are located. These branches would provide exchange facilities for soiled, mutilated notes as also issue coins to the general public through their dedicated counters or coin vending machines. So, no more dealing with dirty notes, or looking for change. As far as fake notes goes, you won't be able to palm them off to the banks, since RBI has asked banks to be very strict as far as impounding fake notes goes. If any bank fails to impound a fake note, they could be penalized.

by Bindisha Sarang

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