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Banking News 15/04/2014

FDI from Mauritius to India halves:

Foreign direct investment (FDI) inflows from Mauritius have almost halved in April- January of the previous financial year to $ 4.11 billion on fears of impact of GAAR and possible renegotiation of the tax avoidance treaty. India had received $ 8.17 bn during April- January 2012- 13, according to the Department of Industrial Policy and Promotion.

India behind in IP generation: Cisco:

India is yet to reach the scale of intellectual property (IP) generation being seen in China and Israel, technology giant Cisco Chief Executive Officer John Chambers said. "The Indian market has to do a lot more (with) start-ups, create that entrepreneurial spirit at a faster scale. I am committed to India, but it has not taken off in terms of IP generated anywhere like China or Israel," Chambers told PTI in an interview.

Banks override credit card PIN requirement:

Some banks have been overriding the requirement of PIN (personal identification number) at card swipe machines as merchants are yet to put their infrastructure in place. As a result, cardholders are finding that they can continue paying with a mere signature, in some outlets. To ensure that business is not affected, banks have bypassed the requirement of PIN in some machines. Banks are also in a dilemma over new machines as RBI has made it mandatory that all new machines should be capable of biometric identification.  There are two banks involved in card transactions — the bank which has issued the card and the bank that has installed the POS terminals. The RBI directive making chip and pin mandatory was aimed primarily at card issuers. For the banks installing POS terminals, RBI has made it mandatory to implement security standards prescribed for payment industry internationally. Banks said that there were problems with POS machines capable of biometric reading. The first issue was that there were not many suppliers in the market. Secondly, their tests showed that the authorization using fingerprints took up to 20 seconds on a 3G connection as against less than five seconds earlier.

Banks offer women special loans, rates:

Taking a leaf out of home finance companies, banks are now wooing women with attractive auto loan offers. India’s first women’s bank, Bharatiya Mahila Bank, is in talks with Tata Motors to offer its customers cheaper auto loans across the latter’s entire car range.  Similarly, Axis Bank ran an auto loan campaign for women that included waiver of processing charges during the International Women’s Day weekend. Nearly one-fifth of the bank’s auto loan borrower base comprises women (who have either taken the loan jointly or alone). Moving forward, the bank will extend special offers to women during major festivals. With auto financiers targeting more customer niches, the search for women borrowers and special schemes is beginning to pick up speed. One reason why financiers are targeting women is their excellent loan record history.

Faster, Safer Payment Gateways Bring More Shoppers Online

Many technology start-ups are offering newer payment solutions aimed at weaning people away from paying cash for buying online. Their improved technology helps make the process faster and safer for shoppers. For instance, a watch retailer uses payment solutions offered by Citrus Pay and has seen its transaction rate improve almost 10%, according to its founder Peyush Bansal. By addressing both customer issues and meeting the needs of online retailers, payment gateways like Citrus Pay, PayU, and Zaakpay are stealing a march over older incumbents like EBS and CCAvenue that also offer payment gateway solutions for online retail. E-retailing in India is expected to grow to over $56 billion in the next decade from $2 billion now. While cash on delivery still dominates the e-commerce market, Pragya Singh, assistant vice president for retail at advisory firm Technopak is of the view that cash payments will account for just half of all transactions in the next five years from the current rate of 65%.

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