Banking Power-Pack – June 2015

BANKING - 2015 JUNE
June 1

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IRDAI removes cap on business from one insurer for banks.
IRDAI has done away with the capping of insurance business from one insurer by a bank in its latest draft. As compared to the previous draft that mandated banks to cap business from one insurer to 50%, IRDAI has removed this cap.
This would mean that those insurers without a bank partner or promoter would still have to wait longer to get business from bancassurance. The regulator has said that an insurer can have tie-ups with up to three insurers in any line of business-life, non-life or health.
Background
Presently, banks are allowed to tie-up as a corporate agent with one life, one non-life and one standalone health insurer.
Hence, insurers who entered the market later did not have any bank partner.

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FinMin, RBI set up panel on reducing cash transactions.
To reduce cash transactions in the economy and boost the usage of cards and point of sales (PoS) terminals, the Union finance ministry and Reserve Bank of India (RBI) have set up a committee to look at ways to encourage use of plastic money. The committee has representatives from National Payments Corporation of India, State Bank of India and ICICI Bank.
Background
RBI data at the end of December 2014 showed 1.05 million PoS machines in the country, whereas there are over 500 mn debit cards and at least 20 mn credit cards.
In 2013-14, according to a Boston Consulting Group report, the number of cash transactions in the economy was 26 percent of the total; cheque transactions were 19 percent. Another 37 percent were through ATMs or cash deposit machines. Transfer through ECS systems was three percent; NEFT/RTGS use was four percent. PoS accounted for five percent and transactions through the internet were six percent.

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HDFC Bank to stop paper slips, to send detailed SMSes.
HDFC Bank has