Wednesday, July 30, 2008

RBI issue circular to banks on credit card rates

The Reserve Bank of India (RBI) has issued a cautionary circular to banks on credit cards rates to protect customers and stop defaults. RBI has also warned the banks that they themselves will be liable for misuse of unwanted cards.

RBI said banks must set ceiling for interest rates including processing fees though the central bank has not specified any limit.

The central bank stated that any bank or government body must inform about increasing or reducing interest rates.

As most customers are not aware or mislead into the method of calculation of charges RBI said there is a need for illustrative examples should be given to the cardholder to avoid any confusion on customer front.

RBI's issued cautionary circular on credit cards in view of a fear of rising defaults faced by banks. The easy availability of cards is coming back to trouble banks, as they are struggling to control losses and defaults. By issuing this circular, the RBI has tried to prevent this becoming a general issue.

Monday, July 28, 2008

Police arrested three persons and busted credit card racket

Police busted another credit card racket by arresting three persons identified as Vipin, Hazari and Ghanshayam, aged between 25 and 30. Accused did shopping worth Rs 30,000 with the fake credit credit. The accused had replaced the original credit card of Adarsh Khanna with the fake one.

On June 27, the victim Adarsh Khanna had applied for a credit card to Kotak Mahindra Bank. The police arrested the three accused on July 23.

DCP (Outer) Sagarpreet Hooda told, "Later a man, posing as a bank representative, who identified himself as Arun, came to meet him. He took Khanna's ICICI Bank credit card to take an impression of it. He replaced it with another credit card deceptively. Khanna soon realized this and called the customer service to block the card, but it nearly took three hours and by that time the accused person had indulged in shopping worth Rs 30,000".

On the other hand, one Nitin, who claimed to have been calling from Kotak Mahindra Bank called Khanna, and inquired whether his executive had verified documents.

When Khanna described the incident to him, he said that he will ask his executive to come back and return the card, but nothing happened and later on Nitin's mobile phone was found to be switched off.

The police came to know that the accused had purchased two mobile phones and shirts from a mall in Inderlok. Later on they stopped using their mobile phone and even left their rented accommodation.

Yet, police was able to caught the three accused from Rohini with the help of CCCTV image and recovered the credit card belonging to Khanna. Police from them was also able to seize goods purchased with the help of credit card.

Wednesday, July 23, 2008

Barclays Bank offer 10% cash back offer on debit cards

Barclays bank is offering 10% cash back to all its debit card customers. According to bank sources the offer is valid on all purchase transactions made in the country using a Barclays debit card from July 1 to September 30.

According to bank statement customers will receive a total cash back amount of up to Rs 500 per month, which will be credited to the customer’s account in the first week of the next month.

During the campaign period if a customer does a minimum of three purchases (minimum Rs 500 each) per month then he can avail this facility.

The statement specified the offer is not applicable on the ATM and outside-the-country transactions on the debit card.

As per statement new customers who open accounts during the promotional period will also be eligible for cash back offer if they make at least three transactions per month, each with a value of Rs 500 or more.

The scheme is available for all the customers using Barclays Classic Debit Card, Barclays Premium Debit Card or Barclays Gold Business Card.

Barclays is providing services in retail and commercial banking, credit cards, investment banking, wealth management and investment management services. Bank has made its presence in Europe, US, Africa and Asia with operations in over 50 countries.

Tuesday, July 22, 2008

Mumbai police arrested 19 yr – old girl for credit card fraud

Muskaan Shaikh a 19 years old girl has passed class XI and is a resident of Aurangabad has mastered the art of forging signatures with ease. Shaikh was busy shopping at the Infinity Mall in Andheri (west) on Sunday when her shopping spree came to an end when an alert employee noticed that her signature did not match with the one on the credit card.

At the mall when she went into the Reebok store after visiting a few other outlets. She selected a pair of sport shoes costing Rs4, 000. Inspector Datte Sankhe told, “Shaikh confidently went to the cash counter and offered to pay with a credit card”.

At cash counter the executive asked her to sign on the credit card receipt. The alert executive noticed that the signature did not match with the one on the card. He then kept Shaikh involved in a conversation and meanwhile alerted his seniors, who got in touch with the police.

Sankhe told, “We found 12 credit cards belonging to different people from her purse”. Most of the credit cards were stolen from Mumbai. Earlier in May, a middle-aged woman had lodged a complaint about her purse being stolen from the Infinity mall. Police said watching the CCTV footage it was clear that Shaikh was responsible for the act.

Police has taken Shaikh in its remand till July 24.

Monday, July 21, 2008

Chennai police arrested two Lankans for credit card fraud

Chennai police on Saturday arrested two Sri Lankan Tamils for defrauding a bank to the tune of Rs 5 lakh using forged international credit cards. The duo created fake credit cards using information stolen from foreign credit cards, mostly in London, through an accomplice.

The two arrested - S Navaneethan (28) and S Rajkumar (24) - are Sri Lankan natives living in Porur. Rajkumar had recently completed his graduation in commerce (B. Com) from a private college in Aminjikarai.

On getting clue from a leading mobile telephone showroom in Kodambakkam, officials of the Axis Bank laid a trap for the duo on Saturday. The employees of the showroom got suspicious after the two did purchasing on three consecutive days; they purchased mobile phones and electronic equipment worth about Rs 1.70 lakh. The duo did the payment through international credit cards.

On receiving information the Axis Bank officials, led by Ashok Kumar of the executive risk and fraud containment wing, laid a trap and waited at the showroom. The duo Navaneethan and Rajkumar, as usual, came to the showroom and were nabbed by the bank officials.

From the duo credit cards were seized and verification done. During enquiries it was revealed that Navaneethan and Rajkumar had been using the credit cards of many unknown persons, mainly of those living in London, to make expensive purchases. The accused were taken to the police commissioner's office and produced before the city police commissioner R Sekar.

Ashok Kumar officially lodged a complaint with the central crime branch. On the basis of complaint lodged by Ashok Kumar the bank fraud detection cell in the commissioner's office have registered a case and arrested the duo.

During the preliminary inquiries it became clear that the Navaneethan got the credit card details from another friend, who is now in London. Using this information the duo prepared fake cards at their residence and did purchasing of several electronic goods and household articles from several city showrooms.

"The two had been making such purchases for the past four months," an investigation officer said.

Moreover officials of another bank went with a complaint to the city police against the two persons, in their complaint the officials stated that the accused had gone to a star hotel in Nungambakkam and had spent nearly Rs 2 lakh there.

The police have discovered a television, refrigerator, two-wheeler, two mobile phones, three fake credit cards and a pen drive with data about credit cards from the hotel room. The arrested two have been remanded in judicial custody after being produced before the XI metropolitan magistrate court in Saidapet on Sunday.

Friday, July 18, 2008

Chennai police arrested 2 persons for cheating banks of lakh

On Wednesday Chennai’s bank fraud wing of the city police's Central Crime Branch arrested two persons on the charge of cheating several banks to the tune of Rs 8.5 lakh. The accused S Krishna Kumar (22) and R Barathi Syam (21), both are residents of M K B Nagar, have been arrested on the complaint of Narotham Kumar, manager, risk control unit, Citibank. From the accused police recovered five computers, a motorcycle and seven credit cards from the duo.

Krishna Kumar, used to work as a collection agent for two banks and later ran a computer centre, and Bharati Syam, a collection agent, both of them became partners in crime after discovering innovative methods of cheating banks using credit cards.

According to the complainant, the duo targeted Citibank credit card holders who had never used their cards. A CCB official in an interview to the TOI told "Kumar first contacted these persons and told them that since they had not used the cards they could return them and get fresh ones from the bank. The next day, Syam contacted them over phone and reiterated what Kumar had said. He said a person from Citibank would come to their homes with a letter and that they could submit the cards to him. Then, the duo armed with the 'letters,' collected the credit cards. They then went on a shopping spree". Using these credit cards they made purchases worth Rs 3.25 lakh.

Not satisfied with that, they copied some credit card applicants and received the cards in their names.

"Syam, who used to get many applications for credit cards, used them to receive cards. He pasted his photograph on the application forms and used the same identity certificates. He replaced the address on the form with his and asked the banks to send the cards to his address. The duo managed to dupe seven customers and received cards addressed to them from ABN Amro Bank, HSBC, Barclays and ICICI Bank," the official said. Krishna Kumar started computer center at M K B Nagar with this money.

The duo accused used the cards for various purchases and cheated the banks to the tune of about Rs 5.25 lakh.

CCB officials suggests that those who do not want to use their credit cards should cut them up and submit to the banks concerned to avoid such cheating.

Banks offer cash back on debit cards to promote spends

Debit cards have various advantages over a credit card. When you use debit card there is no fear of overspending and no penalty and interest charges for late payments, as is in the case of credit cards. Therefore more and more people prefer using debit card.

Currently banks are offering a cash back facility on debit cards in order to encourage customers to use more of the plastic money.

On using debit card customers can avail themselves of up to ten per cent cash back (the percentage varies from bank to bank), which are directly linked to the account.

Senior bank official said receiving cash back on debit card is therefore a better offer for the customer.

Usually such schemes are announced by the banks during the festive season, although some banks have such schemes running throughout the year. In some cases some of the banks offer it on specific categories of purchase or spend, such as on fuel recharge.

However banks do not give cash back offer on ATM withdrawals and Internet transactions. According to Mr Sai Narain CDK, Head – Consumer Transaction Banking & Strategic Initiatives, Standard Chartered Bank, India, “Consumer research pointed to dissatisfaction with existing reward points and redemption program that offered exchange of rewards points with products. Consumers are more interested in instant gratification.”

Standard Chartered round the year give thematic cash back offer to its customers. “Double the rewards points — implying double the cash back has been the most successful promotion,” said Mr Narain. He said last year bank has seen a 30 per cent increase in customer spends on debit cards because of these promotions.

A senior bank official at a private bank, explained for banks, higher spends means higher income from interchange fee. “If you can run a campaign of 2-3 months you can see spends increase by 10-20 per cent,” said Mr Sameer Nemavarkar, Vice-President, Retail Banking, Axis Bank.

Another private bank, Axis Bank offers cash back schemes for certain segment such as for spends on fuel. Mr Nemavarkar, explained that giving such schemes on credit card is a high-risk high-return game and calls for efficient managing of the outstanding; that on debit card is more of an activation strategy.

“We had run a campaign on activation of new cards by offering a cash back of Rs 50 on a spend of Rs 1,000,” he said.

From 1st July State Bank of India and Barclays has announced cash back scheme and other banks are expected to follow suit. While SBI is giving 5 per cent cash back, Barclays is offering 10 per cent cash facility.

“10 per cent cash back offer will help us strengthen our relationship with our customers and enhance brand loyalty,” said Mr Suresh Gurumani, Director, Retail Banking, Barclays India.

Wednesday, July 16, 2008

Gram Sabha credit cards issued to villager of Mandla district

Gram Sabha credit cards were issued to villagers of Nainpur block of tribal Mandla district. With these credit cards villagers will be able to get credit and a gram sabha will be able to function as a micro-finance institution.

Jaltare village, has 350-plus population, the gram sabha has issued credit cards to poor families. Till now, 30 gram sabha credit cards have been issued. At least in 50 cases small loans have been given.

The gram sabha credit card is a simple credit card unlike those of national banks credit card, having basic details including name and assets.

The credit card has certain rules according to which credit will not be given for marriage, purchasing vehicles and house construction. The amount is chiefly to be used for earning livelihood.

According to office release Madhya Pradesh Rural Livelihood project provides funds to the gram sabha, which is operating in about 3,000 villages in nine tribal districts. Mandla is one of them. The others are Jhabua, Dhar, Barwani, Alirajpur, Sheopur, Dindori, Shahdol, and Anuppur.