Saturday, January 14, 2017

ICICI blocks PhonePe transactions in sign of banks moving to protect payments turf

Mumbai: ICICI Bank Ltd has blocked transactions on payments app PhonePe in at least the second such instance of a commercial bank trying to protect its turf against non-bank mobile wallet and payment companies. PhonePe is a unified payments interface (UPI) app which works on the ecosystem created by the National Payments Corp. of India (NPCI).

On Saturday, PhonePe’s co-founder and chief executive officer Sameer Nigam took to microblogging site Twitter to allege that ICICI was blocking transactions since Friday. In a series of tweets, he said that ICICI was blocking “Definitely on purpose! Over 10x txns failed. Bank is not reversing the block.”

An email seeking comment was sent to ICICI Bank late on Saturday night. This story will be updated when the bank responds.

“We are waiting for an actual confirmation from ICICI through either NPCI directly or through Yes Bank, but we have no official intimation from any party,” Nigam told Mint. Yes Bank is a UPI partner of PhonePe.

Infosys co-founder Nandan Nilekani, who currently serves as an advisor to the NPCI and has overseen the development of the Unified Payments Interface (UPI), declined comment.

This is the second instance of an incumbent getting nervous over a disruptor. On 4 January, CNBC-TV18 reported that State Bank of India has blocked net banking transactions with e-wallet companies, although it allowed customers to top their mobile wallets with debit and credit cards. At that time, SBI chairman Arundhati Bhattacharya had said that service was blocked because of security concerns.

“Wallets don’t have proper risk mitigation measures in place and also don’t ensure that one mobile number can use only one wallet. We have seen multiple cases of customers opening multiple wallets on a single mobile number and transferring the money from the bank account to these wallets and then transferring this to non-KYC complaint accounts,” said a senior SBI official.

Since the government decided to ban Rs500 and Rs1,000 currency notes on 8 November, it has tried to promote cashless transactions in a big way from asking banks to waiving off debit card transaction fees to offering discounts for using digital payments to buy fuel.

ALSO READ | Demonetisation is a major assault on poor: Economist Pranab Bardhan

The biggest beneficiaries of this move have been digital payment firms and wallet operators. Paytm, for instance, witnessed a jump from 115 million users to 150 million users in the first week after demonetisation, according to stats shared by the company.

It is clear that banks aren’t enthusiastic about the increasing reach of such non-back payment firms.

“There is a certain degree of apprehension about KYC (know your customer) standards of digital payment app of non-banks. Currently banks and wallets are subjected to two different regulatory and security standards. While banks follow the two factor authentication, wallets have a single pin access,” said a senior official of one of the top three private sector banks on condition of anonymity.

“The wallet architecture is currently not interoperable which means customers using bank wallets cannot pay to those using wallets of other digital payment companies. So, why should banks allow these companies to have a free ride by transferring funds from their account to the wallet,” this person added.

The rise of these firms has also come at the cost of UPI, whose adoption was lukewarm at best during the initial few weeks after demonetisation. At the time, all the big banks were aggressively promoting their own net banking apps and in-house digital wallets instead of promoting UPI.

ALSO READ | What’s ailing UPI and how to fix it

That was because banks didn’t have enough incentive to promote UPI and disrupt their own e-payment services, said experts. Simply put, banks don’t get fees or commissions from UPI transactions originate from the UPI platform, unlike debit and credit cards, and net banking.

To address some of the initial concerns and boost adoption of UPI, the NPCI in late December launched Bharat Interface for Money (BHIM).

Now, with the focus slowly shifting to UPI (where a user can link a bank account to any app—even that of a different bank, or of a third party), the competition has just got tougher for banks as smartphone users switch to these services instead of cash and cards.

Foreign holding in bourses: Sebi notifies rules

Regulator Sebi notified rules allowing foreign investors to own up to 15 percent stake in an exchange, a move that is expected to help attract more overseas funds.

Currently, foreign entities can hold only up to 5 percent in an exchange.

Sebi has amended regulations to increase the limit of shareholding of foreign entities like stock exchange, depository, banking and insurance company and commodity derivatives exchange in Indian stock exchanges to 15 percent, from 5 percent.

Now, these entities "may acquire or hold, either directly or indirectly, either individually or together with persons acting in concert, up to 15 percent of the paid-up equity share capital of a recognised stock exchange", Sebi said in a notification dated January 12.

The move comes after Sebi board in September approved a proposal to this effect.

Already, a number of overseas investors have invested in leading exchanges NSE and BSE and the latest decision will help them enhance their exposure to the Indian market.

In July, the Cabinet had cleared the proposal to increase foreign shareholding limit to 15 percent in exchanges.

Finance Minister Arun Jaitley had made an announcement in this regard in his 2016 Budget speech.

"Investment limit for foreign entities in Indian stock exchanges will be enhanced from 5 percent to 15 percent on par with domestic institutions. This will enhance global competitiveness of Indian stock exchanges and accelerate adoption of best-in-class technology and global market practices," he had said.

Differences over funding pattern may delay Bengaluru suburban rail project

BENGALURU: Differences between the state government and the railways over the funding pattern for the city's suburban rail network could delay the project.

Bengaluru development minister KJ George has said that Karnataka was ready to enter into a memorandum of understanding (MoU) with the railways for the project. Railway minister Suresh Prabhu is scheduled to visit the city on January 16.

George said, "We want to make it a joint venture, with 50-50 equity funding. We have also sent our suggestions on the draft policy proposed by the Indian Railways."

As per the draft policy, the state needs to bear 20% of the project cost, raise loans to cover 60% and the railways will contribute the remaining 20%. The draft also enjoins on the state to handle all land acquisition in Bengaluru, and other cities in the state that are in need of suburban railway networks.

However, Bengaluru Central MP PC Mohan told STOI that the state government wasn't keen on taking ownership of the project. "The railways is responsible for operating freight trains, and long distance passenger trains. Suburban rail network is a state subject. But, the Karnataka government is not taking any initiative to set the ball rolling," Mohan said.

Pointing out that the state was willing to spend Rs 2,100 crore on the steel flyover that would connect a small stretch, Mohan added: "The RITES study reveals that the suburban rail network can provide transportation to 25 lakh people daily. A flyover is a short-term fix. Suburban railway is a more sustainable solution."

Mohan said that George was constantly maintaining that the state government must not spend its money for the suburban rail network. "Bengaluru South MP and Union minister Ananth Kumar also suggested to Siddaramaiah that the state cabinet ministers should meet their central counterparts and lobby strongly for the project. But they seem uninterested," Mohan added.

Meanwhile, officials in the South Western Railway told STOI on Saturday that the joint venture between the two stakeholders is going to be on the formation of a Special Purpose Vehicle (SPV) to execute the suburban rail project.

"The joint venture is the first step to set up a body that will add projects needed to develop the suburban rail infrastructure and work on the lines of the urban development department of state government. The draft policy is on funding of the project which can be discussed later," said SS Soin, additional general manager of SWR.

Rs 360 crore spent on replacing diesel coaches

The Karnataka government has agreed to replace 15 pairs of diesel multiple unit (DEMU) rakes with mainline electric multiple unit (MEMU) coaches, at the cost of Rs 360 crore, in what is the first step towards improving suburban rail connectivity in the city.

South Western Railway (SWR) has also augmented one train from Krantivira Sangolli Rayanna station (KSR) that will have three services to Whitefield during the morning peak hours. It has also introduced a rail bus - a small bus-like coach from Yeshwantpur to Nelamangala. SWR will also run long-distance trains from Mandya and Ramanagara, which will be linked to the Kengeri Metro Station, which will be developed in the second phase of the Namma Metro.
Railway minister Suresh Prabhu will lay the foundation stone for the Byappanahalli coaching terminal on Monday. "This terminal will help us divert some of the trains to run to and from Byappanahalli. The project is worth Rs 130 crore and will be expanded with seven platforms. Three of the platforms with additional amenities will be ready by August 2018 and the remaining will be completed by 2019. After this, we can divert 15-20 trains to be operated from Byappnahalli alone," said Sanjiv Agarwal, divisional railway manager of Bengaluru division of SWR.
Prabhu will inaugurate a new train from Bengaluru to Shivamogga on January 16. SWR officials said the regular service will start from Yeshwantpur station to Shivamogga from January 18 and will be an overnight journey.

At last, there is realization both on the part of Centre and State that there is need to provide local trains in Bengaluru. There is plenty of support from local people also as people are fed up

Support for suburban rail

Citizens for Bengaluru (CfB) will submit a signature campaign to the railway minister on Monday. A total of 22,106 citizens have already signed the campaign to demand suburban railway as an immediate and long-term solution for urban mobility.

Coal India arm CCL hikes coal price, eyes more revenue

State-owned Coal India

arm Central Coalfields Ltd today announced an increase in price of coking coal, which may help the PSU earn an additional revenue of nearly Rs 89.98 crore for the remainder of 2016-17 and Rs 222 crore for the next fiscal.

The announcement came at a time when steel companies are feeling the squeeze because of a surge in global coking coal prices.

However, the company did not specify the quantum of the increase.

In a filing to BSE, Coal India (CIL) said: "The board of directors of Central Coalfields Ltd, a subsidiary of Coal India, has approved revision of coal prices with effect from 00:00 hours of January 14, 2017... this revision, will earn approximately additional revenue of Rs 89.98 crore for the balance period of 2016-17 i.e January 13 to March 2017 and additional revenue of Rs 222 crore for 2017-18 subject to achievement of production and dispatch target norms."

According to an official, the price of various grades of coking coal of the PSU varies between Rs 2,400 and Rs 5,050 per tonne.

"The increase in price is done by subsuming washery recovery charge (WRC), which was being charged separately in the case on non-linked washery grade coking coal, it said.

Yesterday, CIL's arm BCCL raised coking coal price by about 20 per cent, which is likely to help the PSU earn an additional revenue of Rs 702 crore for the remaining part of 2016-17 and Rs 2,986 crore in 2017-18.

The decision on the same was taken at the board meeting of Bharat Coking Coal Ltd (BCCL).

"The board of directors of Bharat Coking Coal Ltd, a subsidiary of Coal India Ltd, has approved revision of coking coal prices with effect from 00:00 hours of January 13, 2017 (of) approximately +20 per cent increase over the current price," Coal India (CIL) said in a filing to BSE.

The company further said the price of steel grade and direct feed coal has been linked to price of washed coking coal, which has been fixed on import parity price.

"Due to this revision, CIL will earn approximately an additional revenue of Rs 702 crore for the balance period of 2016-17 i.e.from January 13 to March 31, 2017, and additional revenue of Rs 2,986 crore for 2017-18 on achieving targetted production and despatch programme," the company said.

Coking coal, also known as metallurgical coal, is used for coke manufacturing, one of the key irreplaceable inputs for production of steel.

Coal India, in May last year, had raised coal prices by nearly 6.3 per cent. It accounts for over 80 per cent of the domestic coal output and has a production target of 598 million tonnes for the current fiscal.

It is eying an output of 1 billion tonnes by 2020.

India ready for four times jump in digital payments: Nandan Nilekani

BENGALURU: Is India's economy prepared to shift from cash to a 'less-cash' model that the government has been talking about since demonetisation? Yes, says Nandan Nilekani, a name synonymous with Aadhaar, and now part of the Niti Aayog panel on e-payments that is working with chief ministers to promote the use of digital payments systems across the country.
In an exclusive interview, Nilekani told TOI that the infrastructure needed to enable more than a billion people to transact digitally is already in place, but unlike the West, where card-based payments are more common, the Indian economy will digitalise through mobile-based payments that are faster and cheaper to roll out. Now, it is a matter of increasing awareness and keeping transaction charges low, he added.
At present, only 5% of personal consumption expenditure in India happens digitally. The 600 million debit cards are used mostly for ATM withdrawals while credit cards number merely 20 million. Nilekani said cards and point of sale (PoS) machines have increased slowly because of high maintenance costs.

Before anything, Govt Machinery must switch over to Digital Acceptance. I read that Govt in Maharashtra still insists on cash payments only.K Joshi

However, National Payments Corporation of India's (NPCI) new payment applications are designed to work on all phones—with or without internet— and even without phones. The Aadhaar-enabled payment system for those who don't have phones is likely to enable digital payments by about 350 million people.
For digital payments to catch on, sellers will need to come on board on a large scale. Nilekani said a combination of low transaction charges and formal sector credit will help. Transaction charges are likely to be low because, unlike the card systems that requires significant investment in PoS machines and other infrastructure, the mobile-based system has no such requirements. Merchants currently prefer cash deals to hide their income because their profit margins are inadequate to pay both taxes and the high rates on informal sector credit. But when they accept digital payments, the income trail will make them eligible for credit from the formal sector at much lower interest rates, besides other products like insurance policies. "Credit is the killer app of digitalisation,

Tata Steel's Noamundi mines to have 1st drone application for

Private steel major Tata Steel's Noamundi Iron-ore Mine in adjoining West Singhbhum district of is all set to become the first mine of the country to launch 'Drone Application in Mine Monitoring' (DAMM) on Monday.

Noamundi Iron Mine of will become the first Mine in to launch "Drone Application in Mine Monitoring" (DAMM) on January 16, a press release here today said, adding the DAMM will be launched by Secretary, Ministry of Mines, Balvinder Kumar.

Under the Flagship program 'Make in India', Prime Minister Modi emphasised on role of Space Science for achieving good governance during his address at the National Meet on Promoting Space Technology based Tools and Application in Governance and Development.

Based on the Prime Minister's vision, Ministry of Mines conceptualised and launched MSS (Mine Surveillance System) on October 15, 2016.

MSS is a satellite-based monitoring system through automatic remote sensing detection technology to have responsive mineral administration by curbing illegal mining and public participation.

Other dignitaries likely to be present on the occasion are R K Sinha, Controller General, Indian Bureau of Mines, A B Panigrahi, Controller of Mines (CZ), Indian Bureau of Mines, Rajeev Singhal, Vice President, Raw Materials, Tata Steel, Pankaj Kumar Satija, General Manager (OMQ), and Manish Mishra, Chief (Regulatory Affairs), Tata Steel.

Cash transfers only under police vigil: EC tells CEOs

New Delhi : The EC has directed Chief Electoral Officers (CEOs) of five poll-bound states to ask top police brass that cash transfers during the election period be done under the protection of cops and that they be kept “informed” about such movements from banks or currency chests, reports PTI.

The Election Commission, in its directives to the CEOs of Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa, has cited the standing orders of the poll-body in this regard even as it appended the recent instructions issued by the Department of Financial Services (DFS) under the Finance Ministry on the subject.

The DFS has said the “operating procedure for transportation of cash by banks and transfer of currency from one chest to another operated by the banks within the state or inter-state level as laid down in the above mentioned letters shall be followed scrupulously.”

“(CEOs) are also requested to kindly advise the Directors General and Commissioners of Police to ensure adequate police protection for the safe, secure and speedy inter-state and intra-state movement of currency chests to the various bank branches/ATMs at some places where banks may apprehend security concerns and while doing so, the police authorities shall have to keep the CEO informed in the poll going states,” it added.

The EC directives on transportation of cash are seen in the backdrop of an incident in poll-bound Tamil Nadu last year, when three trucks carrying Rs 570 crore were intercepted by EC-appointed surveillance teams.

Between February 4 and March 8, Uttar Pradesh, Uttarakhand, Punjab, Goa and Manipur will go for assembly polls and the model code of conduct came into force on January 4 when the EC announced the election schedule.