SBI signs up “Reliance Money Infra” as business correspondent

SBI signs up “Reliance Money Infra” as business correspondent

The Anil Ambani group firm will identify borrowers, process loan applications and follow up on recovery

THIRUVANANTHAPURAM, APRIL 29:  

State Bank of India has signed up Reliance Money Infrastructure (RMIL), an Anil Ambani Group company, in a ‘business correspondent’ deal to source a range of banking services.

The deal was concluded on February 25 but has been made effective with retrospective effect from October 5, 2013.

SBI strategy

The deal authorises RMIL to identify borrowers; collect, process, and submit loan applications; promote credit groups; take up post-sanction monitoring, follow-up, and recovery.

As the service provider, RMIL will also collect small-value deposits; sell micro-insurance, mutual fund and pension products; and receive and deliver small-value remittances.

An industry analyst called this a mother-of-all-business-correspondent agreement, part of an SBI strategy to outsource listed services for ‘facilitating business growth.’ It is particularly significant since it comes after the latest round of issuance of banking licences in which Reliance Capital, another group company, was an applicant but failed to make the grade.

Products list

Among products the service provider will dabble in are: no-frill savings bank accounts through kiosk banking model; home loans/loans against property; auto loans; gold loans; SME loans;

general purpose credit card; kisan credit card; current account; savings bank account (other than no-frill account); term deposit; recurring deposit; and mutual fund on a referral basis.

Additional products may be added by mutual consent. Products may be also amended from time to time.

The agreement binds RMIL to the Fair Practices Code for lending as also its own code for collection of dues.

In the absence of such a code, it should abide by the Indian Banks’ Association code for collection of dues and repossession of security.

The agreement specifies that it is essential that the service provider refrains from action that could damage the integrity and reputation of the bank.

It shall not resort to intimidation or harassment of any kind, either verbal or physical, against any person in debt collection efforts, including making threatening or anonymous calls or making false and misleading representations.

Performance standards

The service provider shall also adhere to performance standards in respect of services and products set by the bank, which will be entitled to inspect and audit records maintained by the service provider.

Persons authorised by the Reserve Bank of India also shall have the right to obtain copies of records and information in possession of the service provider.

The agreement shall be valid for a period of one year from its execution and shall stand automatically renewed for another year unless specifically terminated by either of the parties.

(This article was published on April 29, 2014) Businessline
***************************************

Bank employees stage protest in Palakkad

STAFF REPORTER

A demonstration by the State Bank Staff Union in front of the bank’s regional office in Palakkad on Wednesday against the move to “hand over” SBI services to Reliance.

Bank employees organised protests in front of the regional office of the State Bank of India (SBI) to protest against the bank authorities signing an agreement with Reliance Money Infrastructure Limited to outsource its services to the private company.

In a statement here on Wednesday, State Banks’ Staff Union deputy general secretary G.P. Ramachandran said with the signing of the agreement between the SBI and Reliance, 90 per cent work of the bank will go to Reliance.

The Chairperson of the bank had already announced that there would not be any recruitment for next three years. This is a move to hand over the SBI, the biggest bank in the country and the backbone of the country’s economy, he alleged.

The Bank Employees Federation of India (BEFI) also organised a meeting in front of the regional office of the SBI to protest against the decision to hand over the services of the bank to Reliance. The meeting was inaugurated by BEFI state joint secretary Saji Varghese. It was presided over by district president T.R. Sivaprasad. --Businessline
**********************************************

‘SBI, Reliance Money deal shocking’

OUR BUREAU

KOCHI, APRIL 30:  

The Bank Employees Federation of India has termed as ‘shocking’ the deal between SBI and Reliance Money Infrastructure Ltd wherein the latter will act as a business correspondent to the public sector bank.

BEFI State general secretary C J Nandakumar said the deal, which was signed in February and with which took retrospective effect from October last, had been kept a secret from the public, trade unions and the bank staff. This was being done in the name of ‘financial inclusion’, he said, urging all bank unions to oppose the deal.

(This article was published on April 30, 2014) Businessline
**************************************************************

In a statement its AIBEA general secretary C.H.Venkatachalam said that the Agreement provides for RMIL to identify borrowers; collect, process, and submit loan applications; promote credit groups; take up post-sanction monitoring, follow-up, and recovery. As the service provider, RMIL can also collect small-value deposits; sell micro-insurance, mutual fund and pension products; and receive and delivers mall-value remittances, opening of no-frill savings bank accounts through kiosk banking model; home loans / loans against property; auto loans; gold loans; SME loans; general purpose credit card; kisan credit card; current account; savings bank account (other than no-frill account); term deposit; recurring deposit.

While the Business Correspondent model itself is wrought with risks and deficiencies, it is really atrocious that Reliance had been handed over such vital banking functions by a major public sector bank. Itis strange that while RBI itself has not chosen to give them license to start their own Bank, SBI management has brought Reliance through backdoor method into dealing with regular banking services.

Reliance group is already under cloud in KG Basin project, etc, and handing over regular banking services to them is risky, he said. He added that AIBEA would strongly oppose the SBI decision and demands rescinding of the agreement in public interest
----BUSINESS STANDARD DT. 02.05.2014
********************************************************

Are Bank Employees to oppose these types of agreements or just concentrate on some wage hike?

If these activities are unchecked , it will spread to all PSBs and deny employment opportunities to lacs of youth, and they will be forced to work under these agencies for paltry salary.