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Banks asked to upgrade ATMs by June next year

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Reserve Bank of India (RBI) has pulled up banks for not upgrading the ATMs with advance operating systems having the latest security features. The central bank has asked banks to upgrade the operating systems and beef up security features in Automated Teller Machine (ATM) machines with immediate effect to prevent frauds.

Banks have to complete upgrades with the latest operating systems by June 2019.

"The slow progress on the part of the banks in addressing these issues has been viewed seriously by the RBI. The vulnerability arising from the banks' ATMs operating on unsupported version of operating system and non-implementation of other security measures, could potentially affect the interests of the banks' customers adversely, apart from such occurrences, if any, impinging on the image of the bank," the RBI said in a release.

Most of the machines are running on Windows XP which cannot run many of the sophisticated security measures. Navroze Dastur, managing director for India and South Asia at NCR Corporation, said, "Most of the ATMs are running on Window XP where advanced security programmes cannot be loaded. Banks were going slow in upgrading the systems."

RBI has given timelines to banks so that new operating systems and security features can be installed. The central bank has also asked a copy of the circular may be placed before the Board of Directors at its ensuing meeting, along with the proposed action plan for implementation of these measures.

Banks have to submit a Board-approved compliance or an action plan detailing the implementation plan by July 31, 2018.

The progress made in implementation of these measures should be closely monitored to ensure meeting the prescribed timelines, failing which would invite supervisory enforcement action. Banks have to implement security measures such as BIOS (basic input/output system) password disabling USB ports, disabling auto-run facility, applying the latest patches of operating systems and other software by August 2018. Banks will also have to implement anti-skimming and whitelisting solution by March 2019.

posted Jun 28, 2018 by Sanjay Rawat

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Asia-Pacific is the largest as well as the fastest growing region for payment card expenditure; growing card acceptance creates opportunity for international card schemes

Growth in spending will be driven by a three-fold increase in merchant outlets

The value of card payments in Asia-Pacific grew by 25% in 2014 to reach $9.0 trillion, accounting for just under half of the global total card expenditure.

The level of cardholding in Asia-Pacific is comparable to most other regions, but usage per card remains low. Cash continues to be used heavily and card acceptance is limited in some countries – Asia-Pacific’s density of outlets to population is far below the global average. The situation is changing, however, supported by official campaigns to encourage card payments and improve acceptance in several countries, for example in Malaysia and Thailand.

Between 2014 and 2020, RBR forecasts the value of payments with cards issued in Asia-Pacific to more than double, to $19.5 trillion, stimulated by almost three-fold growth in the number of merchant outlets, with the bulk of these in China. The growth in value will be uneven across the region because countries are at vastly different stages of maturity: Japan, South Korea and Taiwan have reached maturity in terms of card penetration but India, Indonesia and Pakistan are underdeveloped and still have substantial scope to grow.

Value of Card Payments in Asia-PacificAAA

Source: Global Payment Cards Data and Forecasts to 2020 (RBR)

UnionPay accounts for 70% of Asia-Pacific card expenditure

UnionPay is the largest card scheme in Asia-Pacific and its share of card expenditure rose from 65% to 70% in 2014, reflecting the rapid expansion of the Chinese cards market. UnionPay cards are issued in nine further countries in the region, but less than 1% of scheme spending in the region originates from cards issued outside China. Visa and MasterCard account for 15% and 9% of the value of Asia-Pacific card payments. JCB makes up 2% overall, but has a 22% share in its home market of Japan.

RuPay is the fastest growing domestic scheme

Domestic schemes are issued in almost all countries in the region, but are generally used for cash withdrawals rather than payments and in most cases their share of payments is static or declining. RBR’s study shows that, at a regional level, they make up less than 2% of value. The fastest expanding domestic scheme is India’s RuPay, operated by the National Payments Corporation of India (NPCI). It has seen phenomenal growth since its inception in 2012, with issuers attracted by its lower processing fees and, by the end of 2014, RuPay’s share of India’s card expenditure had already reached 6%.

Share of Card Payments by Scheme in Asia-Pacific, 2014AAAA

Source: Global Payment Cards Data and Forecasts to 2020 (RBR)

UnionPay will face greater competition in its home market

RBR expects UnionPay to maintain its position as the largest scheme in Asia-Pacific, in the short term at least. The scheme’s dependence on China makes it more vulnerable than its competitors to economic volatility and the end of its monopoly on bank card clearing in China has opened up the Chinese market to foreign players. Going forward, UnionPay will face increased competition, with all the international card schemes eager to exploit the potential that a more open Chinese card market presents.

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Leading Indian private sector bank, Kotak Mahindra has announced its collaboration with Ripple in order to improve their cross-border remittances. The bank will be using the settlement solution of Ripple named xCurrent, which will enable them to decrease the time associated with remittance payments by several minutes. The Chief Digital Officer of Kotak Mahindra Bank, Deepak Sharma says: “We harness new technologies to simplify and enhance banking services for our customers. xCurrent ticks all the boxes, and enables us to offer our customers a more transparent and efficient global payments service using blockchain. Joining RippleNet also expands our payment network globally by allowing us to connect with other members.” Ripple’s South Asia Managing Director, Navin Gupta says: “The payments problem is a global problem, particularly for those in emerging markets trying to send regular, low-value remittances overseas. Kotak Mahindra Bank can offer its retail customers a step-change improvement in their inward remittance experience thanks to xCurrent, and we look forward to connecting them to other RippleNet members to expand their global remittance offering.” Over 25 global financial organizations including the famous British bank, Santander UK uses Ripple’s xCurrent to enhance their customer experience when it comes to cross-border transactions. A Ripple enthusiast named XRPTrump tweeted: “Indian private banking Giant Kotak Mahindra Bank (2nd largest by Market Cap) joins RippleNet. Will use xCurrent for cross-border txns. Kotak has a bigger Market Cap than both previous RippleNet partners Yes Bank & Axis Bank combined!” A Twitterati named Ecent says: “Beyond the joys of seeing another partner join RippleNet I am happy to see another example of there being SO MUCH going on behind the scenes that we’re not aware of. The #xrpcommunity needs to exhale. The professionals at Ripple & Coil are hard at work building the ecosystem” According to a recent survey, India’s inward remittances have reached $69 billion during the previous financial year, which is 8 times more than its outward remittances. As the inward cross-border remittances are increasing every year, many Indian banks such as ICICI Bank, Yes Bank, Axis Bank are obtaining various blockchain technologies to advance their online transactions. Ripple has another advanced technology called xRapid which provides liquidity for cross-border payments. However, this product has not been adopted by many banks as of now. Mike, a blockchain supporter commented: “Hopefully xRapid on the horizon for them.” Another Twitterati named Anirban Biswas says: “Been a customer of @KotakBankLtd for 2 years and I can say that in March they did a massive overhaul of the send/receive section of their app into a much strealined payments section. Very similar to PSPs. Now with this news it makes sense.”
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Digital payments network Visa is close to investing over $250 million into Mumbai-based payments gateway BillDesk, valuing the company at around $1.5-2 billion, three people familiar with the development told TOI. Bill-Desk, which had earlier been in discussions for a strategic sale, has decided to opt for a financing round, these people said. The fundraise, sources said, is a mix of primary and secondary transactions.
BillDesk is the largest online payments processing company in the country and competes with the likes of Naspers-backed PayU, CCAvenue and a bunch of younger startups like RazorPay. “The deal is in the final stages of completion, it’s the valuation which is being negotiated,” a person familiar with the talks said. In 2016, General Atlantic had picked up a 20% stake in Bill-Desk from its existing investors, valuing the company at $800 million.

Founded in 2000 by three former Arthur Andersen executives — M N Srinivasu, Ajay Kaushal and Karthik Ganapathy — BillDesk is one among the rare profitable internet companies in India. For Visa, an investment in BillDesk would help the American firm cement its position in the payments ecosystem in India, which has seen disruption with the introduction of new modes like the Unified Payments Interface (UPI). The entry of global tech giants like WhatsApp Pay and Google’s Tez, as well as homegrown players like Flipkart’s PhonePe, has made the UPI platform extremely competitive. Visa’s investment will also give Bill-Desk a strong foothold in the online merchant acquisition side of the business.

BillDesk processes payments worth almost $50 billion per year and leads the charts for online bill payments. In the e-commerce segment, it is neck-and-neck with PayU, while CCAvenue and others come in next. For FY17, it clocked Rs 950 crore in revenue and has been profitable for over a decade now. Typically, payments firms generate around 1-2% of gross revenue which comes from commission that they fetch from merchants, in a widely known lowmargin business. When contacted, BillDesk’s Srinivasu did not respond to an email and text messages, while a Visa spokesperson said, “As a policy, the company doesn’t comment on partnerships or investment speculation.”

People familiar with the matter said the BillDesk founders are negotiating a higher value of $2 billion in the backdrop of a hugely successful IPO of Dutch fintech startup and PayPal rival Adyen. The payments processing platform IPOed at over $8-billion valuation and saw its shares surge 90% as it doubled its market cap. “With RuPay and UPI gaining share, it has led to players like Visa and Mastercard, looking to tap newer avenues and bolster their space in the fast-growing digital payments market in India,” said another source on the condition of anonymity.

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Wall Street's first analyst to cover bitcoin is debunking a popular bitcoin investment strategy.

According to DataTrek Research co-founder Nick Colas, a vast number of investors erroneously believe that if the stock market rallies, so will bitcoin.

His finding is based on correlation analysis that goes back to the beginning of last year.

"Bitcoin doesn't necessarily go along for the ride," Colas said Wednesday on CNBC's "Trading Nation."

Bitcoin prices and stocks may not rise in tandem, but he did detect one clear trend that could be useful for investors.

"During the recent market drawdown in the early part of February, the correlation was really high. As stocks went down, bitcoin went down," Colas said. "Bitcoin faded just like a stock. However, as stocks began to rebound that correlation fell apart."

Colas, who owns a quarter of one bitcoin (worth about $2,700), contends investors may be better served by using a highly accessible strategy that relies only on an internet connection.

"The precursor for opening a wallet for many people is just googling the term 'bitcoin,' 'how to buy a bitcoin wallet,' 'how to buy a bitcoin' and so forth. So, as bitcoin searches go up, it's a precursor to bitcoin prices appreciating as well," he said.

The correlation was particularly significant between Thanksgiving and Dec. 17, when bitcoin was surging to its $19,843 record. Since then, the emerging asset has plunged 45 percent and is now bouncing along the $10,000 level.

Bitcoin's next catalyst

For bitcoin to stage another breakout, Colas says it would take a major announcement from a retailer such as Amazon about using it for payment. Right now, price volatility and underdeveloped technology is a roadblock.

Even though he doesn't see a near-term surge, he is far from bearish. His 2018 average price for bitcoin is $14,000 — noting that there is a fair amount of crossover between people who own bitcoin and stocks.

"It's such a polar discussion with people. We have clients who love it [bitcoin], and clients who hate it. And, there's really nobody in the middle," Colas said. "Every day it doesn't go to zero is another day it lives. And, every day above ground is a good one. That applies for people and bitcoin."