Class Room

Security Alert--------Phishing Phishing is a recent form of cyber attack in which the fraudsters induce internet users to divulge sensitive, confidential information relating to bank accounts. the technique uses email to "fish" the internet hoping to " hook" users into supplying them the login-IDs, passwords, PINs, credit card information etc. In a typical phishing attack, a user receives an email purported to be sent by a financial institution. The email will carry the spoofed ( spoofing: creating a look alike/shadow/mirror copy) image or logo of the financial institution and will attempt to convince the user to provide / part with personal, account details by directing him to visit a web link (hyperlink) given in the email message. when the user clicks the hyperlink, he will be led to a fictitious web page, which will be a look alike / exact replica of the website of the financial institution but hosted by the fraudsters. An unsuspecting user, unaware of such a malicious activity will be requested to provide his personal / account details in the fraudulent website in the pretext of some exigencies like updating bank's database, for cross-verification etc. The fraudsters then use the information for fraudulent transactions causing huge financial losses to the individuals and financial institutions. Phishing attacks involve thousands of users. In a single phishing attack, a fraudulent email message is sent to thousands of users with the hope that at least a small percentage of users will respond. The trends show that on an average, 5-10% users respond to such e-mails. Successful phishing counter measures involve educating the users to be careful while handling emails even though they appear to be emanating from legitimate sources. What needs to be remembered is that banks will not request customers for such sensitive information in the first instance, leave alone through relatively unreliable modes like internet / email etc. This necessitates an user to pay close attention to the contents of any email that seek any personal information. The basic approach for an effective anti-phishing effort includes detection, prevention and awareness. The phishing menace cannot be handled solely by the end-users, financial institutions nor stringent industry standards but the solution lies in taking counter measures at all levels. All users in the bank should exercise caution while disclosing personal information on the internet / e-mail.

News

Canara Banks Children Deposit Scheme Canara Bank is launching a deposit scheme for children upto 12 years on Children's Day. Called 'SB Canchamp Deposit Scheme' it allows children to start a deposit with a minimum amount of Rs.100. On opening the account, the deposit holder will get a savings box and a personal photo folder-cum-memoir. The child will also get an education loan eligibility card. Using the card, the child can avail educational loan as per the prevailing bank scheme once he or she completes HSC of plus two. ICICI banks NRI deposit scheme ICICI bank has introduced a new product ' NRI SmartSave Deposit', a fixed deposit scheme for non-resident Indians. Under this scheme, a customer who has a fixed deposit in any bank's overseas branch can get the amount transferred to ICICI bank in India on maturity. The bank will settle all the paper work. Even after the amount is transferred to India, the deposit will continue to remain in NRE/NRO savings account. The bank is also offering free international credit card insurance and free personal accident insurance with the scheme. RBI clarification on Duplicate Draft ( Financial Express 14.10.06) The RBI said in case of delay in issue of duplicate demand draft beyond a fortnight, banks have to pay interest at the rate applicable for fixed deposit of corresponding maturity only to the purchaser or beneficiary of the draft and not a third party. RBI said the period of a fortnight for issue of duplicate demand draft would apply only in cases where the request has been made by the purchaser or the beneficiary. This would not be applicable in case of third pary endorsements, RBI said in a release.

News

Banks propose fee for pass books Banks have appealed to the RBI to relax its recent stipulation making issue of passbooks compulsory and free of cost to savings bank account holders. Some banks, particularly large private and foreign banks, are of the view that this adds to their cost. 6000 SBI officers opt for early exit Over 6000 officers of SBI have sought early separation (retirement) for reasons ranging from bleak future career prospects to difficulty in adjusting with information technology and intensive work environment. At present the total officers strength of the bank is 55000. The scheme which was thrown open in April 2005 was closed by October end this year. SBI faces regulatory resistance overseas SBI which has a presence in 30 countries, has faced regulatory resistance in three countries -- US, Singapore and Australia -- in its foray into full fledged banking operations. Even the Singapore Monetory Authority has asked SBI to furnish a sovereign guarantee to allow upgradation of its offshore banking operation to undertake retail banking. However, the bank, on its part, has refused to agree to Singapore financial regulator's diktat. Even, ICICI Bank is facing stiff resistance in the US and Singapore in its expansion efforts. The latest to deny SBI a full license to undertake comprehensive banking activities is Australia. The Australian banking regulator has given a much restricted license to SBI to upgrade the bank's rep office in Sydney, while the bank has applied for a full license to enter all aspects of banking including local banking, trade finance, treasury operations and even investment banking. The bank has not been allowed to accept public deposits and can only accept deposits from corporates.

Bank Stock News

DCB to consider raising FII limit Development credit Bank Ltd board is meeting on November 24 to discuss options to raise capital and increase the cap of FII investment. Lakshmi Vilas bank to issue bonus, rights The bank has fixed November 24 as the record date to determine the shareholders eligible for bonus and rights issue. The bonus shares will be issued in the ratio of 1:2 ( one share for every two held). The rights issue will be in the ratio of 1:1 (one share for one share held) at a price of Rs.50 per share (Rs.10 face value plus Rs.40 premium), however the bonus shares would be excluded while determining the rights shares entitlement.

News

Capital rejig -- to look attractive Public sector banks hoping to go public have to clean up their books and reduce their bloated equity base. The likes of Indian Bank, Central Bank of India, United Bank of India and Punjab & Sind Bank are in the process of doing just that. They do this in two stages. In the first stage, they ask the Government to write off the accumulated losses against the capital infused by the Government. In the second stage, a portion of the remaining equity (afte the write-off) is converted into preference capital that will carry an interest rate of about 8%, subject to government approval. Indian Bank, for instance, set off accumulated losses of about Rs.3,800 crore against its capital base of Rs.4,574 crore. It further got the Government to convert about Rs.400 crore of equity into preference capital. Following there steps, the bank's earnings per share improves from a little over Rs.1 per share to nearly Rs.7 (before conversion to preference) and about Rs.14 per share after conversion based on March 2006 earnings. HDFC Bank gets notice on credit card promises The Monopolies and Restrictive Trade Practices Commission (MRTPC) issues a notice of inquiry to HDFC Bank for not preventing direct selling agents from making false promises to its credit card customers. The report alleged that the customers were not told the terms and conditions when they signed the documents given by direct selling agents (DSAs) and the card holders come to know about the terms only after receiving the plastic money. The report also said the customers are not revealed schedule of charges to be levied by the bank, the method of calculating interest rates and penal charges. HDFC Bank has outsourced credit card selling business to 11 companies in the National Capital Region. These companies appoint DSAs to sell the credit cards. Customers are not informed that DSAs are not employees of HDFC Bank, the report said. Tax Deduction at Source (TDS) --- Senior Citizens The RBI has told several commercial banks not to deduct interest tax payable on fixed deposits of senior citizens. Senior citizens are eligible for tax exemption on the interest earned on fixed deposits for which they have to submit Form 15 H and Form 15 G to their respective banks. The Finance ministry is receiveing complaints that several banks are deducting tax even after senior citizens submit the forms. Most of the banks to whom notices have gone are in public sector, ICICI Bank is the only private bank. DCB to consider raising FII limit Development credit Bank Ltd board is meeting on November 24 to discuss options to raise capital and increase the cap of FII investment.