ICICI Bank adopts new technology

ICICI Bank is country’s largest private sector bank and in adopting latest technology, bank is in the forefront in banking sector in India. Even in business aptitude also currently bank has a long journey with 12 million terabyte of data. The reason for ICICI bank spending so much on technology is mainly because of two reasons- firstly, customer expectations and change in behavior in India and second, the diversified customer base in India.

ICICI group have so many business units like banking, mutual funds and insurance and it is very important for the group to flawlessly incorporate these units because there is an overlap of the customer base among these business units.

Therefore it is very important for the group to have one fundamental group unit having made all acquiescence with different laws and regulations. Retail banking has continuously developed over last two decades. Earlier in 1990s, the banking operation was high cost and people intensive with low scalability and inevitability of customer behavior. But after 10 years, at the start of this new millennium, there has been efficiency in banking operations with lower cost, higher scale and more predictability but lag in differentiation or customized product offerings.

Currently many banks have crossed all hurdles and are offering many personalized products and services. "Efficiencies, effectiveness and adaptability are three pillars of necessities in improving the banking business", says Pravin Vohra, Group Chief Technology Officer of ICICI Bank. A bank requires Enterprise Intelligence capability to process more and more data. And to gain such capabilities, banks are required to have right technology, culture and processes in place.

In case of ICICI Bank, it has taken up a number of proposals like score card, business intelligence for sales and marketing, customer acquisition and linking different accounts of the same customer. According to Mr Vohra the next use of enterprise intelligence will be used in new areas like corporate performance management, master data management, web analytics and enterprise fraud management. It can also be used for budgeting, planning, forecasting and the profitability optimization in the area of corporate performance management.

At the same time, data from different channels can be used by the same customer can be integrated to create master data. But the real gain from the analytics tools can be obtained only if it is properly used. "For any business intelligence tool to be successful, the senior management should believe and own it. At the end of the day, business intelligence is a tool and requires human intelligence to reap maximum benefit out of it", emphasises Mr Vohra.

ICICI bank to pay fine for unfair practice

It has become very common to receive a call on mobile from an insurance company which tries to sell you a policy. Sometimes, companies go beyond this and offer medical insurance policy absolutely free. But, in reality nothing comes free. The customer one day realizes that he has been charged a heavy amount for something which he did not want at all.

Harish Sisodia, a city businessman and Maharashtra Sports Council member had to face this when he received a call from ICICI Lombard General Insurance Company, which offered him a medical insurance policy free of cost. In the beginning, Sisodia did not show any interest in the policy at all but he kept receiving a call from ICICI Lombard executives urging him to accept the policy.

Ultimately, Sisodia agreed to take the policy (No. 4034/FNP/01727327/00/000) on December 29, 2006, but on one condition that none of the policy transactions “would get reflected in his ICICI Credit Card statements”. However, when he received a monthly statement of January 2007, the insurance transactions showed up in the credit card statement. Therefore Sisodia contacted ICICI Lombard and told them to cancel his policy.

Sisodia told TOI, “It took four months for the insurance company to cancel the policy on April 28, 2007, but until then I kept on receiving the credit card statements wherein the premium amount and some other charges were levied”. But, even after this till January, 2008, Sisodia continued to get ‘statements’ showing premium amount and others charges. The total amount had by now risen to Rs 25,422.59.

Sisodia informed, “Unable to take it anymore I contacted ICICI officials on two three occasions and told them to reverse the entries, but all my requests fell on deaf ear.” He said, “With no option left, I approached the Consumer Disputes and Redressal Forum, Nagpur district, which gave a verdict in my favor and ordered both ICICI Lombard and ICICI Bank to pay me a compensation of Rs 5,000 for mental agony. The forum also stamped a cost of Rs 1,000 on both respondent companies.”

The forum observed that Sisodia had taken the policy on one condition that no payment will be made through his credit card. But, ICICI Bank submitted that ICICI Lombard had given them the authority to collect the premium amount from Sisodia through credit card.

The forum further stated that while it was sufficiently clear that Sisodia said that his transactions will not be made through credit card, but neither ICICI Lombard nor ICICI Bank could put forward any proof saying that ICICI Bank (credit card) has been authorized to collect money from Sisodia. The forum considered this an unfair trade practice.

It also supported Sisodia’s views that ICICI Lombard and ICICI Bank being connected companies, the latter provides names of some credit card holders to the former who trail the customers to take policies. Therefore forum directed the ICICI Bank to reverse all the charges relating to the policy.

“We had demanded a compensation of Rs 25,000 for mental harassment. The forum partly upheld the claim and ordered the insurance company and bank to pay Rs 5,000 as compensation and Rs 1,000 as cost,” said Advocate Ranjit Sardey, Sisodia’s counsel.

ICICI Lombard had appealed against the verdict at the state consumer forum but to no avail. In the end, the ICICI Bank had to hand over Rs 6,000 cheque (dated September 5, 2008) to Sisodia on September 18.

ICICI Bank leads in offering remittance services online

India in recent times receives over 12% of global remittances which has made it the single largest recipient country for remittances, followed by Mexico and Philippines.

The World Bank alone has estimated the remittance inflows at USD 337 billion for 2007 from migrants which in recent times have brought considerable attention towards this.

In the recent time remittances to India have skyrocketed to USD 42 billion in FY2007-08 as compared to USD 2.1 billion in FY1990-1991 in the past.

ICICI Bank, India’s largest private sector bank and second largest bank in the country, has come forward in recognizing the remittance opportunity and has started offering a host of remittance services made to meet the needs of various customer segments. It has acquired a market share of over a fifth of the migrant remittances into India.

For this in 2001, ICICI Bank set up an online remittance tracking portal, www.money2india.com which has become the fastest and largest online remittance tracking service for disbursements to India.

Through www.money2india.com bank offers tracing money transfers from any bank in over 10 countries to any bank in India through ICICI Bank’s correspondent banking network along with centralized transaction processing and 24X7 customer support.

Money2india is leveraging the payment infrastructure in India to the fullest, offering credits to accounts in ICICI Bank, electronic payments using the National Electronic Funds Transfer (NEFT) system to over 100 banks, payments to debit and credit cards (through VISA) and bank drafts.

The website is a convenient and a user friendly for money transfer tracking service. There is only one-time simple registration process after which the user can, at his convenience track the sent money as and when s/he wants from the comfort of home or office.

Peerless in tie-up with ICICI launches co-branded credit card

With the increase in defaults in payments of credit cards banks are going slow on issuing credit cards. ICICI bank country’s largest private sector bank and Peerless General Finance & Investment Company Ltd in a tie-up has launched a co-branded credit card.

Under the banner of Peerless Smart Money, the credit card business will operate it is already selling life insurance, general insurance and mutual funds products.

Addressing a press conference during the launch of credit cards S K Roy, managing director, Peerless General Finance, said, "Through Peerless Smart Money, we seek to ensure total customer satisfaction."

In the beginning, the company will be disbursing the card through 76 branches across the country.

Ray informed the company is aiming to launch its own insurance and mutual funds products soon.

Similar to all other credit cards, standard offers like balance transfer and utility bill payment services will be offered through the cards.

Speaking during the launch, Jayanta Roy, director, (corporate planning and strategy), of Finance, said, by 2010, the Peerless has plans to considerably build up its operations.

ICICI bank reduces interest free credit periods on credit cards

ICICI Bank the largest credit card issuer has recently done changes in the interest-free credit periods. Such a move taken by the banks is going to prove a setback for the credit card holders regarding the interest-free credit periods.

The bank has reduced the interest-free credit period on its credit cards to a maximum of 48 days, earlier it was 52. After this change now the card holders will have to pay up within 18 days on receiving the monthly statement rather than 22 days earlier. Nowadays a very special rewards point are being offered with icici credit card so make a check to them and choose the best one.

Sachin Khandelwal, head of cards group at ICICI Bank said, “We decided to reduce the cycle in May 2008. It was communicated to the customers in June, so it has been effective from the July cycle. There is no particular reason for reducing it. The market has a cycle of 46-52 days and we have decided to keep it at 48 days.”

However other bankers are not persuaded with this move of ICICI Bank. The bankers are of a view that ICICI bank might have done this without a reason. Going by them, the rising cost of funds could the reason behind this move.

Earlier the Reserve Bank of India tightened the liquidity measures which had resulted in rise in the cost of funds of banks in the recent months. In turn this has reduced their ability to offer bigger concessions such as free credit periods on cards. More over banks having low current account and savings account deposits which contribute for lower-cost funds compared to other sources have been hit harder.

Subrat Pani, business head - cards, Kotak Mahindra Bank, conceded, “If the cost of funds increases, banks might look at revising the credit cycle.”

However Kotak Mahindra Bank, entered in the credit card business in mid-April this year, has already kept the free credit period to a maximum of 48 days from the beginning. “The credit cycle is different for each bank. We have decided to keep it at 48 days and we do not plan to change it,” said Pani.

DNA Money reporter contacted other major credit card issuers whether they are also planning to lower the interest-free period.

HSBC Bank sources informed that they will not change the current credit cycle, it will remain at 22-52 days. But, the bank refused to comment on whether it has any future plans of reducing it.

Other banks foreign banks such as Citibank and Standard Chartered Bank also informed that they have no plans to change the credit cycle in recent times.

A Citibank spokesperson told DNA Money, “The interest-free or grace period for all Citibank Cards ranges from 17 to 55 days. This is stated in our customer communication and we have no near-term plans to change the disclosure.”

However if we look on the other side, some banks have raised the interest rates on their credit cards. Earlier banks charged an interest of 2.95% per month, or 41.75% annually, but now they will be charging as much as 49-50% annually on some cards.

In some cases, the interest charges vary, i.e. it depends on the last bill payment. “Customers who consistently maintain a good payment record are eligible for rates as low as 1.49% per month. However, customers who miss their payments repeatedly can see their rates rise to a maximum of 3.5% a month,” said the Citibank spokesperson.

Hence the card holders should better start repaying their debts. This is the only best option.

ICICI bank Airtel join hands to provide M-Cheque facility

ICICI bank country’s largest private lender and Airtel are planning to launch M-cheque cashless transaction facility for bank customers.

There are rumors that Tata is already working on this type of project called Tata IndiPay. Now Airtel and ICICI bank will be joining hands to allow the bank customers to use their mobile phones for conducting transactions.

The two companies in joint venture will be offering a facility called M-Cheque which will enable the facility of cashless transactions. Consumers will be required to have an Airtel connection with a SIM card with 32K capacity.

For this project ICICI Bank is taking services from Mumbai-based IT firm Littleworld to develop the technology. In this process a merchant will be required to send an SMS to Littleworld, which will have the customer’s mobile database. After the getting authorization from the ICICI bank, an SMS will ask for the customers’ authorization. Also must check out icici housing loan to make your dreams come true to buy a fully furnished house.

After getting authorization, from both the bank and the customer the transaction will be completed. The merchant would receive the payments though the bank the next day. ICICI Bank general manager B Madhivanan said on this new initiative: “We have launched the pilot project in some 100 outlets and for customers in Delhi and Mumbai. The project will be ready in some month’s time. Based on the results of the pilot project a proper rollout will be initiated”.

Two-wheeler makers to get into finance biz.

After ICICI bank decision not to provide two-wheeler loan facility through its dealer network as part of its efforts to cut down expenses, the two-wheelers manufacturers are gearing up to enter the finance business by either expanding their non-banking finance arms or through tie-ups with local financers.

However the ICICI bank said that it will be providing two wheeler loans at its branches.

Two of India’s largest two-wheeler manufacturers TVS Motor and Bajaj Auto, have almost finalized the alternate arrangements to finance their businesses. “This would mean better service for customers,” said S Sridhar, CEO, two-wheelers, Bajaj Auto. “However, we would ensure that the customers’ credit history is properly scrutinized”.

However both the companies have expanded their domestic finance arms, TVS is trying for outsourcing finance to local financers to fill in the gaps at its showrooms across the country. The company is having talks with up to six local financers in various regions as well its own finance arm, TVS Finance.

HS Goindi, head of sales, service and marketing, TVS Motor pointed out, “The question is not of credit, it is of the need for two-wheelers in India, and we are working out a strategy to fill the need”. “Since local financers have better local knowledge, they will be able to figure out a way to ensure credit quality.”

Bajaj Auto Finance Ltd, the finance arm of the Bajaj Group, has decided to enter the two-wheeler finance market.

“Mercedes Benz, Audi are among some companies abroad who have been very successful in finance businesses. We feel this is an opportunity,” said Sridhar.

Sridhar informed BAFL is on the expansion mode since last six months.

Companies do agree that ICICI Bank’s pullout is going to hurt two-wheeler makers, they also said that the quality of credit is not necessarily a killer. “There is a huge need for two-wheelers in the Indian market, and we have seen growth at TVS in the last two months,” said Goindi.