DEBIT CARDS - USE THEM WITH CARE.

There are about 100 million Debit Cards and 35 million Credit Cards currently in circulation in India.

DEBIT CARD CAPABILITIES:
Cash Withdrawal and Deposit at ATMs.
Top up prepaid cell phones.
Utility Payments like Phone Bills/Electricity Bills and Card Payments.
Pay LIC premiums and other insurance premiums.(Corporation Bank has enabled this feature in all of the ATMs.
Making donations to temples/charities.
Booking of Air and Rail Tickets.

Transfer of money to debit card account with another debit card.
Transfer of money to account holders within the same bank or to the account holders of other banks below 50,000.00.

A host of other usages of the card are in the offing.

DEBIT CARDS - MORE FRAUD PRONE VIS A VIS CREDIT CARDS: BEWARE!!!!
Ignore calls purportedly from your bank whereby you are required to furnish details of your card including security codes/account details. Please keep in mind that a banker never calls a customer for these information since they already have these information. You could be taken for a ride.

Skimming is a process of swiping your card through a card swiping machine with a skimmer attached, which we are not aware. The skimmer captures all the confidential features of your card. The information is used by fraudsters to clone the cards. IF THE USAGE OF A DEBIT CARD IS IMPERATIVE, INSIST THAT THE CARD IS SWIPED IN YOUR PRESENCE.

Never use a Debit Card to do your shopping if you can help it. Please bear in mind that there is no grace time for Debit Cards. Use your Credit Card since there is an option for your to contest a fraudulent transaction.

Insist on debit cards with PIN usage every time you use it since it is more safer. Debit cards which does not require PINs are more dangerous.

Surveys have shown that merchants, airline staff, petrol station attendants, and restaurant cashiers never checked signatures and 75% of the cases test purchases made by males using credit cards issued to females went unnoticed.

When misuse is noticed, complain to the bank issuing the card. If the same is not resolved, complain to the Banking Ombudsman within 30 days.

Fraudulent/phishing emails seeking debit card details not be answered.

Shop/book using credit cards since you have option to contest in case of fraudulent usage. Never use debit cards while shopping through the net/web.

Check/track the bank accounts. Statements to be scrutinized periodically.
Complete transactions in ATM before leaving. Scope of card left and used for withdrawal by the next user. Readiness of ATM to be ensured. Wait till the welcome screen appears on the ATM.

Guard ATM statements. Destroy before putting in the waste basket lest account/card details would be given away inadvertently.

DEPOSIT INSURANCE

INSURANCE COVER ON BANK DEPOSITS:


All deposits (SB/CA/RD/FDs) upto Rs.1.00 lakh in a commercial bank or co-operative bank in India are insured by the DICGCI. The insurance cover is extended by collecting premium from banks, at half yearly intervals at the rate of 10 paise per annum per Rs.100/- . Te coverage is free to the depositors. Rs 1.00 lakh is inclusive of interest also. Deposits in different banks are separately insured with each deposit eligible for Rs.1.00 lakh cover. The banks covered are all commercial banks including branches of foreign banks functioning in India, lcal area banks and RRBs. All co-operative banks other than those in states like Meghalaya, UT of Chandigarh, Lakhshadeep and Nagar Haveli are also covered. Primary co-operative societies are not covered under the scheme.

MSMEs:MICRO SMALL AND MEDIUM ENTERPRISES

How to identify Micro Small and Medium Enterprises?

MICRO ENTERPRISES : Units with investment in Plant & Machinery not exceeding Rs.25.00 lakhs in the manufacturing sector and Rs.10.00 lakhs in the services sector.

SMALL ENTERPRISES: Units with investment in Plant & Machinery between Rs.25.00 lakhs and Rs.5.00 crores in the manufacturing sector and between Rs.10.00 lakhs and Rs.2.00 crores in the service sector.

MEDIUM ENTERPRISES: Units with investment in Plant & Machinery between 5.00 crores and 10.00 crores in the manufacturing sector and Rs.2.00 crores and 5.00 crores in the service sector.

CHEQUE TRUNCATION

What is Cheque Truncation?

Truncation is the process of stopping the flow of physical cheques issued by the drawer to the drawee bank/branch. The physical instrument is truncated at some point en-route to the drawee bank and the electronic image of the cheque is sent to the drawee branch along with the relevant information such as MICR fields, date of presentment and so on. The need to move the physical instruments across branches is done away with thereby reducing the time required for payment of the cheques, the associated cost of transit and the delay in processing etc leading the speedy collection and realization of cheques. Advantage of CTS are:

Speeds up collection of cheques and thereby enhances customer satisfaction.
Reduces scope for clearing related frauds.
Minimises cost of collection of cheques.
Reduces reconciliation problems.
Eliminates logistical problems.

SUB PRIME CRISIS

WHAT CAUSED THE GLOAL ECONOMIC CRISIS?
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So far there has been no unanimity on the factors responsible for the crisis. There have been two different, but mutually exclusive view points on what is behind the crisis.

According to one view, the financial sector debacle has its origin in the “Global Imbalance” – the phenomenon of large current account surpluses in China and few other countries co-existing with USA with a large deficit. The global imbalance is reflected in the large mismatches in the current account positions of some countries and their mirror image in the form of domestic savings – investment mismatches.

The US has been running huge deficits. Countries such as China and Japan needed an outlet to deploy their surpluses. It was mutual convenience, as it were, for the savings of Asian Countries to find a haven in the U.S which needed money because it saved very little. The money from the Asian surplus countries flooded the US market that kept the interest rates low, inflated the prices of real estates, shares and other assets. When the bubble burst, the financial sector crisis surfaced. Hence, an orderly unwinding of the imbalance alone would help mitigate the crisis. If this is so, macro economic policies of countries need fine tuning.
The US Govt’s unsuccessful effort to persuade China to revalue the yuan to make their exports less competitive points to the belief that the global imbalances to be the primary reason for the global economic crisis.
However as per the totally different view expressed by the IMF in a recent paper, global imbalance is only an indirect cause. The main culprits were the deficient financial regulation and the failure of market discipline resulting in a systematic flouting of rules and regulations by banks.

1. Deficient Financial Regulations.
2. Failure of market discipline leading to systematic flouting of rules and regulation by the banks.

The sub prime crisis showed that almost all the banks used their ingenuity to develop structures and products that were outside the normal regulatory confines of banking in order to satisfy their customers seeking high returns. In the process they created a large number of shadow institutions – Investment Banks, Hedge Funds and the like. These shadow institutions grew over time to be systemically important. Through securitization and other means, the banks convinced themselves that the risks were spread out.

The complex instruments presumed to minimize the risk with the original issuer and guarantee a high return for the investor who bought them. In the end those created them did not comprehend their risks. Hence, IMF prescribes brining shadow banks within the ambit of regulations.

Hence, winding down global imbalance and enhanced regulation will be the key measures that would be agreed upon as a solution to the global economic crisis.