RBI Roll-Backs FREE ATM Withdrawal Transactions

In April, RBI had launched a mandate to enable FREE ATM Transactions to all customers across all ATMs. This was a very customer centric move wherein all customers (irrespective of bank) could do a cash withdrawal from any ATM free of cost.

As per the new policy to be made effective starting 15th October, this will be available to Savings Account customers for the first five transactions in a calendar month and for Current Account customers there will be no FREE Transactions at all. However the Banks may continue to offer additional FREE transactions basis the Average Balances maintained – so you will need to check with your bank for how many transactions you have FREE.

How do you know if it impacts you?

(1) If you do not do more than 5 ATM withdrawal transactions from other Bank ATMs in a calendar month then your life does not change
(2) If you do more than 5 ATM Transactions, then you need to call and check with your bank how many transactions you have FREE basis the balances you maintain
(3) Current Accounts Customers will also need to contact the bank and check how many transactions they have FREE
(4) Now at other Bank ATMs you can do a transaction of at max Rs.10000 as a per transaction limit

It is disappointing that RBI has withdrawn this mandate, however in my opinion 95% of the retail customers will not be impacted as I do not think they do more than 5 transactions from other bank ATMs, however RBI should focus on making this policy easy to understand and this rollback is going to complicate understanding from a customer point of view.

For other useful Personal Banking tips do go to www.simplybank.blogspot.com or you can mail me at Ask.Pranav@Gmail.Com and I will try to respond to your queries at the earliest.

Product Review: Yatra Barclaycard Platinum Credit Card

This Credit Card is a Travel Card, however it is not a co-brand with an airline, however it is a co-brand with a travel aggregator which is www.yatra.com. The plus point is the fact that the customer does not get tied down to a particular airline and can redeem points across airlines and holiday packages.

The strengths of this Credit Card are as follows

(1) It is a FREE Visa Platinum Credit Card (not many Platinum cards are free in the market) and hence the customer becomes eligible for VISA platinum Offers which are decent from time to time such as PVR Movie tickets etc. Check www.visa.com for the latest offers
(2) It is not tied to any airline and unlike the other travel cards such as Jet Airways Citibank Credit Card are not linked to 1 Airline only. This gives a lot of redemption options to the customer

For the 2 strengths listed above, this Card has several drawbacks

(1) The redemption ratio is the worst in the Industry. The last time I calculated 1 Yatra Mile was 0.25 paise and you get only 1 Yatra Mile for all spends other than those done on www.yatra.com
(2) You will have to spend at least 3 times what you spend on Normal Cards to get free flights. You are better of spending on any of the regular credit cards and using the regular Reward Program to convert them to JP Miles or King Club Miles
(3) Poor Quality Customer Service both at the Contact Centre where complaint resolution and turn around times are not managed well
(4) Barclaycard has got several serious customer complaints on www.mouthshut.com and other such forums
(5) No Internet Banking Platform, so you will need to call the Barclaycard Customer Service Helpline for any details you require (which is not a very pleasant experience)

On the whole this Credit Card is nor recommended for customers as the pitfalls far outweigh the strengths. Please think several times before you apply for this card because it is very unlikely you will get any value for it. Barclaycard has the Timescard offering which is awesome, so you could try considering that.

For other useful Personal Banking tips do go to www.simplybank.blogspot.com or you can mail me at Ask.Pranav@Gmail.Com and I will try to respond to your queries at the earliest.

Consumer Offer Review: Deutsche Bank Festive Promo 2009 (SpendVantage)

Deutsche Bank has launched its Credit Card festival Promotion for the year end. The offer period is 15th September to 15th November, 2009.

The offer is open to Deutsche Bank Platinum, Mile & More and Deutsche Bank Signature Credit Card holders. The Vanilla Deutsche Bank Card Holders are not eligible for this promotion.

The construct of this offer is as follows.

• Customer needs to spend a minimum of Rs.25000 in a minimum of 5 purchases between 15th September and 15th November, 2009
• If the above condition is satisfied, the customer qualifies for a quiz to be conducted in the last week of November
• The first 1000 correct responses get Rs.4999 Cash Back

This is a VERY GOOD offer from a customer stand point due to the following reasons

• This is a 20% Cash Back on the total spend amount
• Customer needs to satisfy the spend criteria and then be alert on 20th November for the quiz
• The quiz questions will be simple and can be googled out instantly
• The main focus should be to respond to the quiz on 20th November itself and then walk home with the 20% Cash Back

This offer is much better than the maximum 10% Cash Back that Deutsche Bank launched in the Festival promotion in 2008

If you want to apply for a Deutsche Bank Credit Card you can www.deutschebank.co.in and fill up the application form. This Bank has very good customer Service and it is a pleasure banking with them.

Myths of Online RTGS and NEFT Transfers

Common Myths about RTGS and NEFT Transfers

One of the cool things RBI has done in the last few years is introducing Online Funds Transfers which are of 2 types.

(1) RTGS: Real Time Gross Settlement which require a minimum transaction amount of Rs. 100,000 (transfer happens within 2 hours usually into the destination account)
(2) NEFT: National Electronic Funds Transfers which can be of any amount (transfers happen in 3 cycles of 10 AM, 2:00 PM and 4:00 PM or some similar time)

I am not dwelling too much on the technicalities of the process. What I want to highlight is the convenience of this process and the security aspects related to the same. The objective is to get more and more people (especially the younger crowd who are always short of time) to use this for funds transfers instead of cutting out cheques.

Security Aspects

(1) You will need to register for Internet Banking to effect RTGS and NEFT Transfers online
(2) Your Bank should have a Payee List (to whom you can make RTGS and NEFT payments) with a separate Payee Registration process.
(3) I have a Citibank Account whenever, I need to transfer Funds to a friend, I need to register him / her as a Payee and enter his Account Details. An SMS gets triggered to my Mobile which I enter on the Internet and confirm him as a Payee. It is only now, after payee confirmation that I can start transferring funds to him
(4) If your Bank does not have a Payee Registration Process with an SMS leg to it, then please do not use the Internet Banking of this bank, else if somebody hacks into it, they will be able to empty your account – and I am sure you do not want that happening
(5) Also ensure that you have an Instant SMS alert facility that whenever your Account is debited for RTGS/ NEFT or for any transaction s above a threshold, you should get an alert on the Mobile
(6) The bank should have daily limits for RTGS and NEFT Transfers

If the above criteria are met in the Internet Banking of your Bank, you can go ahead and execute Online Funds Transfers from your Bank Account

Payee Registration Process

There is one obstacle you will face in the Payee Registration process which is the entry of the IFSC Code of the destination Account. It is important to note that RBI has assigned an IFSC Code to every Bank Branch. This IFSC Code can be found in 2 ways

(1) One the Cheque Leaf: You will have to ask your friend the IFSC Code of his Bank Account which he can read on his cheque book / cheque leaf
(2) Bank and Branch Combination: Your Internet Banking may ask you to enter the Bank Name and Branch and Auto Select the IFSC Code. In this case you will have to ask your friend to specify his Branch

Common Problems faced with RTGS and NEFT Transfers

(1) Funds Transferred but not credited to the destination Account: You have no reason to worry. If the funds get returned to your account means that the data (Payee Name, Bank Name, Account Number, IFSC Code) you entered was incorrect.
(2) If the funds do not come back to your account and your friend has also not received them, all you need to do is call your bank. They will tell you if the funds are with them or have been transferred to the destination Bank
(3) If transferred to the destination bank then you can take the RBI Reference Code and pass it on to your friends. He can confirm the same to his bank and get the amount transferred to his account
(4) If the money is still with your bank, you can ask them to transfer it back to your account.
(5) These are small technical issues in the process and I will not dwell into the reasons for the same

Other than the Common problems and the security issues sighted above, this process works with 99.5% accuracy and can save you multiple trips to your Bank / ATMs to drop off cheques.

For any further clarification on Customer Related Banking Processes you can write to me at Ask.Pranav@Gmail.Com and I will revert to you as soon as possible

Dynamic PIN Pads for Internet Logins

With the advent of hacking softwares and professional hackers in India, it has become extremely important for Banks to combat Financial Fraud and more importantly Internet Banking Fraud. When Internet Banking was first launched sometime in 2000, the customer would have to enter the Internet Banking User ID and Password on his keyboard which continued for about 5 years till 2005.

Today we have hacking softwares to capture keyboard entries, so if you are entering your User ID and Password on your computer, some hacker can easily capture the letters you are entering with the help of hacking software. As a result, he knows your User ID and password and can hack into your account. When I speak to customers about this risk, they just dismiss it saying that the chances are one in a million, but you never realise the import of it until the same happens to you.

To counter this risk, banks have launched Dynamic PIN Pads where the customer does not enter his Internet Password on the keyboard but on a dynamic Keyboard with a mouse. The layout of this dynamic keyboard changes with every login, so the hacking software cannot understand the letters / numerals you are selecting and your Internet User ID and Password is protected.

I would strongly recommend that all customers who use internet banking, need to ensure that they enter their password on the Dynamic PIN Pad only and not on the keyboard. If your Bank does not offer it, then write to them and ask them to. If you are keeping significant money in your account, I am sure they will listen.

However, it is important to note that when you use the Dynamic PIN Pad the password will become easily visible to people standing behind you who are looking into your computer (a phenomena known as “shoulder surfing”) so make sure you login when you are alone, else someone could be looking at your screen and noting down your password.

If you have any further questions pertaining to Online Security do write into Ask.Pranav@Gmail.Com I will revert to your query as soon as possible.