The Hindu Business Line : ‘Use e-funds transfer system better’

Chennai, Aug 2 Just three banks (two new-generation private banks and one foreign bank) account for 43 per cent of the aggregate business volumes of the National Electronic Funds Transfer (NEFT) system, according to Mr V. Leeladhar, Deputy Governor, Reserve Bank of India.

He was delivering the presidential address at a function organised by Indian Overseas Bank to celebrate the birth centenary of its founder, M.Ct.M. Chidambaram Chettyar.

Mr Leeladhar said that all public sector banks (including the SBI and associates) put together account for a mere 12 per cent of the volumes on the NEFT. The NEFT was introduced in November 2005 as a secure, nation-wide retail electronic payment system to facilitate funds transfer by bank customers.

There are six settlement cycles every day that enable funds transfer to the beneficiaries’ account within two hours — as against the conventional methods of sending money by drafts or cheques where it could take days or weeks.

Urging public sector banks to wake up and use the NEFT facility well, Mr Leeladhar said that they were doing a great injustice to customers if they didn’t do this. He added that the RBI did not charge a single paisa for this facility. He called upon banks to educate not only their customers but also their staff so that the benefits of the electronic payment products could fully percolate to all customers.

Mr Leeladhar also asked public sector banks to use their ATM networks better. Although they owned two-thirds of the 36,314 ATMs in the country, the total number of hits they registered equalled that of the fewer ATMs of the private and foreign banks.

Similarly, although public sector banks had started credit card operations more than a decade ago, it was the private and foreign banks that were marketing their products and getting higher volumes here.

Biz per employee

Earlier, commending the improvements shown by public sector banks, Mr Leeladhar said the business per employee had risen from Rs 188 lakh in 2002 to Rs 496 lakh in 2007. This was a record anybody can be proud of, he said.

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