Credit Card issuers in a fix over Aadhaar #UID

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 , TNN | Jun 12, 2013, 06.48AM IST


MUMBAI: Credit card issuing banks are in a fix over Reserve Bank of India‘s move to consider Aadhaar as an additional factor for authentication of credit card transactions in shops. The reason – a huge investment in upgrading credit card swipe machines and prospects of losing customers in states whereAadhaarenrolment has been slow.

RBI had constituted a working group headed by Pulak Kumar Sinha, general manager, State Bank of India, to study the feasibility of Aadhaar as an additional factor for authentication of card-swiped transactions and the panel is set to submit its report by the month-end.

The scheduled release of the report will coincide with the deadline which RBI has set for card-issuing banks to migrate to EMV cards and PIN-based authentication for transactions by end-June. EMV cards are smart cards that have an embedded chip, while PIN authentications require card users to punch a secret code on the swipe machine every time they pay by card.

Given the uncertainty over whether Aadhaar-based authentication will come into place, banks have been reluctant to make large investments in upgrading their credit card swipe machines. Also, some bankers say that if Aadhaar-based authentication becomes mandatory, some cardholders may drop out since there is a huge section of the population which has not got an Aadhaar number. As a result, some card issuers may end up missing the June 30 deadline for moving toward an EMV- plus PIN-based authentication.While biometric authentication is secure, card issuers say they have issues with it. For one, since fingerprint images require much higher bandwidth, this will add to the communication costs. Secondly, bankers say that authentication typically requires matching of multiple fingers and this uses up bandwidth as well as time. The biggest hurdle is that this will require over seven lakh point of sales terminals and perhaps automated teller machines to be upgraded and would incur capital expenditure running into thousands of crores.

The introduction of compulsory EMV chip cards and PIN confirmation for transactions was proposed in the wake of widespread credit card frauds that took place earlier this year. RBI had told banks in a circular that they should migrate to EMV and chip cards. Bankers feel that there could be some pressure from the government to push Aadhaar as part of banking transactions, which would make it mandatory for cardholders.

Bankers say that although Aadhaar enrolments are picking up on account of it being made mandatory for LPG subsidy, the numbers are still low in large states like Tamil Nadu and Gujarat.




#India- Now, penalty for paying credit card dues by cheque! #RBI #WTFnews


SUCHETA DALAL | 12/03/2013 , Monelylife, Exclusive

In a mockery of RBI‘s independence, a lowly under-secretary of Dept. of Financial Services has issued a fatwa to government banks to penalise you if you pay your credit cards due by cheque! The under-secretary got this idea from HDFC Bank!
Nearly a month after Moneylife Foundation discovered and took up the issue of the Reserve Bank of India‘s (RBI) bizarre idea of penalising bank depositors for using cheques, we find that the idea or rather the fatwa to this effect had emanated from the finance ministry as far back as 25 October 2012 at the possibly at the instigation of India‘s most profitable bank.

On 25 October 2012, DD Maheshwari, Under Secretary in the Department of Financial Services sent out a fatwa marked “most immediate” to all chief executives of public sector banks (PSBs). The burden of this two-paragraph diktat was that “to discourage the use of physical/cash mode of transactions, all public sector banks are requested to consider charging a processing fee from the customer paying credit card dues either in cash or through cheque”. HDFC Bank has recently increased such charges from Rs50 to Rs100 per transaction and has sent a communication to its customers in compliance with the regulatory requirement of giving a month’s notice.

It doesn’t stop at that, after holding up HDFC Bank’s usurious charges as a role model for PSBs, the letter asks them to “consider issuing appropriate instructions in this regard” and send a “copy of the instructions” back to the finance ministry. 

The finance ministry may have used the word ‘consider’, but its insistence that banks must report back to it shows that it is an order and various banks are planning to fall in line.  The finance ministry’s fatwa makes a mockery of the RBI’s pretence that it is an independent regulator of banks, because the government has not even bothered to refer this issue to the central bank before issuing orders on what amounts to micro-management of bank charges.

RBI deputy governor Dr KC Chakrabarty has repeatedly exhorted customers to vote with their feet and move to another bank if they dislike the high costs and charges of foreign and private banks. It now appears that the finance ministry will forcefully intervene to ensure that they do not have PSBs to turn to.

The government, as owner of PSBs obviously feels it is within its rights to dictate charges, since it is coughing up vast sums of taxpayers money for bank recapitalisation (Rs14,000 crore is set to be pumped into PSBs for their recapitalisation just now). But instead of ensuring better loan recoveries from dubious industrialists such as Vijay Mallya of the UB group, realty companies and others, who owe tens of thousand crores to banks in bad loans, the government has hit upon the idea of punishing legitimate and tax paying bank customers with new charges.

It gets worse. The RBI, which has been lamenting that a large part of the Indian population is unbanked, then responds by setting up an internal committee to prepare a paper titled “Disincentivising Issuance and Usage of Cheques”. This was put up on its website and open for public comment until 28th February. The report itself was kept low-key and been ignored by the mainstream media almost entirely.  Moneylife had then pointed out that the plan to levy a series of punitive charges on the use of cheques, with the utopian objective of forcing people to use online money transfer facilities (such as NEFT and RTGS which are also charged) only punishes those with legitimate bank customers. Please read RBI Must Scrap No Cheque Idea, which is the most commented article in Moneylife since then.

Moneylife Foundation, which has over 21,000 members has sent a detailed memorandum to the RBI on behalf of depositors.

A senior banker who writes for Moneylife under the pseudonym Gurpur also said that the RBI report on Dis-incentivising Issuance and Usage of Cheques “is a classic example of putting the cart before the horse. Because there are problems galore in the electronic payment system, and even before stabilising this, the RBI wants to dispense with the cheque system”. See Incentivise usage of electronic payment systems before dis-incentivising usage of cheques.  Gurpur followed it up with another article that pointed out how the UK had bowed to public pressure given up the idea of abolishing cheque usage. See UK govt bows to public pressure-rejects abolition of cheque system. Will RBI follow suit?

Moneylife had said, “The report on stopping the use of cheques makes you wonder whether RBI is accountable to us or exists solely to help banks enhance profits at the cost of customers, under the guise of seemingly lofty objectives”. Ironically, the finance ministry’s order makes it clear that it swings to the tune HDFC Bank.


#Mumbai- Police hand over mentally challenged ‘missing girl” to drug addict #WTFnews #Vaw

Careless cops hand over ‘missing’ girl to drug addict

Police trace 19-year-old mentally challenged girl who had been reported missing, but promptly hand her over to a complete stranger who claimed to be her ‘husband’

January 08, 2013
Saurabh Vaktania, mid day

With public sentiment choked with anger against police insensitivity in handling crimes against women, the men in khaki are in for some deep derision yet again for handing over the custody of a mentally-challenged young woman, reported missing, to a complete stranger without so much as verifying who he was. The woman’s photo was right in front of their eyes, but they did not take a blind bit of notice before packing her off with a druggie, as they later termed him.

Aarti Bhanushali

Two days after kin of Aarti Bhanushali (19) filed a missing complaint with the NM Joshi Marg police, the cops located her. But they gave her away to a man who walked into the police station and claimed to be her spouse, the victim’s parents alleged. When Aarti’s relatives approached the police again, the officer on duty said he had sent the girl away with her “husband”. The relatives are yet to come to terms with what they claim is “mammoth negligence” on the part of the cops.

On January 4, Gujarati MiD DAY had published a report about how Aarti, who had come to the city from Gandhidham in Gujarat to meet her grandparents at Asalfa village in Ghatkopar, reportedly went missing the day she arrived here. Her grandparents said she disappeared from their Ghatkopar residence on December 25. After looking for her, the couple informed her relatives in Gujarat who rushed to Mumbai and joined the search. On December 26, a complaint was lodged with the Ghatkopar police.

“After waiting for a day, we registered a non-cognisable complaint at Ghatkopar police station, and placed an ad in the papers,” said Vasant Bhanushali, Aarti’s uncle. Over a week passed by with no news of Aarti. “But last Saturday morning, one of our friends called us and said he had seen Aarti on NM Joshi Marg with someone. Aarti’s mother and her relatives rushed to the area and began looking for her,” Vasant said.

When they could not find her anywhere by the end of the day, her kin approached the NM Joshi Marg police station and registered another missing complaint. “The police officer on duty asked for Aarti’s photograph. We gave it to him and he duly slid it under the glass plate covering his wooden table. The photo was displayed prominently,” said a relative.

Another two days passed by and Aarti’s family did not hear from the NM Joshi Marg police. When they approached the police station, they were aghast to hear the cops explain how Aarti had been found, and then lost again. “The cop whom we had given Aarti’s photo had handed her custody to an absolute stranger, who they later said appeared to be a chronic substance abuser, without verifying his identity. They should have been more cautious. The least they could have done was run a background check before handing over her custody,” the relative said.

After the family complained to the cops that Aarti’s custody had been given to the wrong person, the cops reportedly swung into action. Police teams were sent out to find the woman. The officer responsible for the mix-up could not be reached for comment. DCP Kishore Jadhav said, “I have not been informed about the incident. I will look into the matter.”

Have you seen her?
In case if you come across any information on Aarti, please call Thakarshi Bhanushali on 9979406659 or Vasant Bhanushali 9810067381



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