Bank fined Rs 2 lakh after glitch causes card to act up

Manish Raj, TNN | Sep 15, 2014, 01.31AM IST
CHENNAI: A student pursuing a postgraduate course at a foreign university could not pay his fees because of several failed bank transactions. Eight years after he moved the state consumer disputes redressal commission, it has fined a bank 2 lakh for deficiency in services. 

In his submissions to the commission, R Sivakumar of Adyar said his son studied at the University of Leicester. Sivakumar had availed a 'world currency card' from IDBI Bank that allowed the card holder to use it abroad for payments. He had given the card to his son. 

His son was solely dependent on the card for withdrawing cash and making payments. On October 17, 2005, he used the card at the university to pay around 588 pounds for his accommodation fees. But the transaction was declined. He made two more attempts which were declined. Despite the failed transactions, around 1188 pounds was debited from the account. Due to the failed transactions, he could not pay the fee on time. 

After informing bank officials, the amount was debited back in his account after 10 days. Sivakumar said during this period his son "lost his credibility for not paying the fee within time," and was put to "mental agony and indignity." 

IDBI Bank said the bank "duly honoured" the transactions but the merchant establishment (acquirer bank) declined it. "The case of rejection would arise when there is insufficient amount...In this case, the account had enough fund and all three transactions were honoured," said IDBI Bank. Also, after receiving the dispute form, it had credited the amount in the account, it said. 

The bench of presiding judicial member J Jayaram and member S Sambandam said the argument that the acquirer bank being at fault was "untenable." Despite explanations submitted by IDBI, deficiency in service was "patently evident." 

It then directed IDBI Bank to pay the compensation for "monetary loss, loss of reputation and credit worthiness..." along with 10,000 as case costs.

IDBI :CBI registers preliminary enquiry to look into the bank’s decision to sanction Rs950 crore to Kingfisher Airlines

Live Mint 11 Aug 14

 Shares of IDBI Bank Ltd fell as much as 5.5% after the Central Bureau of Investigation (CBI) registered a preliminary enquiry against the state-owned lender and grounded airline Kingfisher Airlines Ltd, with the intention to look into the bank’s decision to sanction Rs.950 crore to the airline at a time when it had a negative net worth and negative credit rating.

Shares of Kingfisher Airlines fell over 5%.

The enquiry comes a week after CBI arrested S.K. Jain, chairman and managing director of Syndicate Bank Ltd for allegedly taking a bribe of Rs.50 lakh for increasing the credit limit of two companies in violation of banking rules. It also arrested Ved Prakash Agarwal, chairman and managing director of Prakash Industries Ltd, which has interests in mining and steel, and Neeraj Singal, vice-chairman of Bhushan Steel Ltd, in the bribery case.

The shares of Bhushan Steel Ltd fell 10% to Rs.197.45. The stock has fallen 50% in the last one week, while Syndicate Bank stock fell 10.58% during the same period.

Recent moves by the CBI against IDBI Bank and the chairman of Syndicate Bank are likely signs of the government getting tough on bad loans in the banking system—as much a reflection of the rot in Indian banking as it is of the economic slowdown and policy paralysis that delayed projects, Mint reported on Monday.

There could be more such action by enforcement and investigative agencies and the banks could get more aggressive in dealing with the sour loans on their books, the Mint report added.

IDBI Bank becomes first lender to tap China funds

Source :16 NOV, 2011, 04.47PM IST, REUTERS 



MUMBAI/HONG KONG: India's IDBI Bank became the first lender to raise funds in offshore yuan in Hong Kong, signalling a new set of borrowers to enter the growing bond market. 


From its sleepy origins as a tiny market for Chinese and Hong Kong companies in 2009, the so-called "dim sum" market or bonds sold by issuers in Hong Kong is known, has exploded to include multinational firms, large Chinese state-run enterprises and even casino companies. 


While the steady increase in rupee interest rates has driven local companies to raise funds overseas, the yuan's attractiveness has received a boost after New Delhi added the Chinese currency as a external financing vehicle to the US dollar, Japanese yen, euro and the pound sterling in September . 


India has set a $1 billion limit for borrowing in yuan within the $30 billion overseas borrowing limit for companies. The bond sold by the mid-sized Indian lender was eventually sold at a lower-than-projected yield of 4.5 percent, indicating demand from investors for yuan-linked assets remained intact despite a September selloff in Asian rates and FX. 


The three-year deal was eventually priced at 4.5 percent, below an initial projection of 4.625 percent. The issue size was expanded to 650 million yuan ($101 million) from an expected 500 million yuan. The orderbook closed at around 900 million yuan with more than 20 accounts involved. 


"IDBI Bank decided to access this market as an attractive funding cum diversification play as also to cultivate a new and fast developing investor class," Melwyn Rego, executive director at the bank told a media briefing. IDBI has a "Baa3" rating from Moody's and "BBB-" from S&P, both with stable outlooks, and similar ratings are expected for the new bonds. 


The bank has already lined up assets, which will be funded from the proceeds of the bond said, Rego said. While the bank did not have any immediate plans to tap the market again, despite the good demand from investors, Rego said the bank has applied to Chinese banking authorities to open a representative office in Shanghai. 


Many foreign corporate borrowers, including the World Bank, Volkswagen, McDonald's Corp and Caterpillar , have tapped the CNH market for funds for their Chinese operations, rather than borrowing in the dollar markets and converting into Chinese currency, which can be costlier. 


Growth in the offshore renminbi, or yuan, bond market has been driven by a near-consensus market view that the yuan will rise, which has enabled top-rated issuers to pay less than 1 percent interest on their offerings. This year, dim sum bonds worth 140 billion yuan have been issued, compared with 40 billion yuan worth bonds sold during 2010. 

IDBI Bank waives service charges on current and savings accounts

IDBI Bank waives service charges on current and savings accounts















Source:Business Line Bureau:Mumbai: Sep 2,2010

IDBI Bank has waived all charges on a host of services for its current account and savings bank account (CASA) customers in a bid to grow low-cost deposits, retain customers and attract new ones.

The waivers are for ATM interchange fee and charges related to average balance, cheque book, demand draft, electronic funds transfer, electronic clearing service, account statement and others.

The public sector bank expects this waiver strategy to help boost its low-cost CASA deposit base to around 20 per cent of the total deposits in the next six months, from 13 per cent now.


One of the highlights of the service-charge waiver is that the bank's customers will be able to access ATMs of other banks any number of time without having to pay a fee.
The other charges that have been removed for CASA customers relate to new card fee, new card issue, cash service, pay order, stop payment, account closure, demand draft issue and cancellation, and standing instruction.


Mr R.M. Malla, CMD, said the fee ceded due to waiver of service charges on CASA accounts will be recouped through gains in business volumes.



“We would rather earn fees on the assets side of the balance sheet by syndicating a Rs 5,000-crore loan and earn Rs 50 crore fees than go after small charges on the liabilities side. Large corporates, mid-corporates and SMEs know us very well. We want to be known as a universal bank that caters to the financial needs of the common man,” said Mr Malla.



Meanwhile, IDBI Bank is considering tapping the equity market in 12-18 months. The bank now has the headroom to tap the market as it recently received capital injection of Rs 3,011 crore from the Government.