INDIAPOST INKS DEAL TO ISSUE 1.5 CRORE DEBIT CARDS

MUMBAI: India Post will soon issue debit cards to its 1.5 crore account holders with the Department of Post signing a Rs 30 crore deal with CMS Info System to supply Rupay enabled cards. The Department of Post (DOP) has over 10 crore account holders in India, and has already begun deploying ATMs across the country in a phased manner.

            The personalized debit cards for DOP will be issued on the NPCI platform and their usage would initially only be on ATMs installed at DOP branches, as a closed loop environment. The cards can later be used on other ATMs with Rupay affiliation. These cards will initially be of the magstripe variant, with the option of EMV being available to the account holders after a set period of time. 

            "This deal will power issuance of personalized cards to complement India Post's ATM deployment plans over a three-year period. We expect this to benefit people using teller facilities at the branches, as they can now begin to use these cards for more convenient cash withdrawals," said Mokam Singh Matta, Head of Card Business, CMS Info System. In addition to financial cards, CMS also personalizes Smart Cards which are being increasingly used in large scale government projects, including National ID, Rashtriya Swasthya Bima Yojana (RSBY), Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) and Employee's State Insurance Corporation (ESIC). Some of these form a critical backbone for financial inclusion projects in the country, he said. 

            India Post which is a large mobiliser of deposits is currently awaiting approval from Reserve Bank of India to set up the Post Bank of India. The government department, which has the largest financial services distribution network across the country, is presently running a large deficit on postal services. With traditional mail services on a decline due to electronic communication, the department is looking for opportunity in logistics and financial services. 

            The department has already embarked on deploying core banking solutions which will make it easier for customers to get service outside their home branch.

Source: The Times of India

Govt to raise Bonus ceiling : Financial Express

Several lakhs of workers in the organised sector will benefit as the Narendra Modi government is set to raise the salary threshold for mandatory bonus for workers from Rs 10,000 a month at present to Rs 15,000 and the minimum bounty from an annual Rs 3,500 now to Rs 4,500. The proposal, agreed to by employers’ associations at a recent meeting of an inter-ministerial group, would require Parliament’s approval as the Payments of Bonus Act, 1965, requires to be amended for this purpose.

While the minimum bonus is a legal liability on the firms concerned, whether or not they make a profits, these firms are also required to pay the workers a higher bonus if their “allocable surplus” exceeds the amount payable as minimum bonus, subject to a cap (20%) of the salaries.

If the new proposal takes affect, the maximum bonus payable by profit-making ventures would be close to Rs 11,000 as against Rs 8,400 now.

The salary ceiling for mandatory bonus eligibility was last fixed in 2007 and made effective retrospectively from April 1, 2006. While industry associations demanded exempting sick units from the requirement of paying bonus, trade unions have pitched for removal of the ceilings as “profits are not capped”, official sources said. The unions also asked for extending the benefit to workers under the Industrial Disputes Act, they added.

The revision of the bonus eligibility and the amounts is being done by factoring in the relevant price increases, the gauge used being the consumer price index-industrial workers or CPI(IW). This index stayed in the range of 6.4-12% since 2008. After hitting as high as 12% in 2010, CPI(IW) has maintained a roller-coaster ride — it eased to 8.9% in 2011 before rising to 10.9% in 2013 and dropping again to 6.4% in 2014. In the current calendar year, it has slowed almost consistently from 7.2% in January to 5.8% in April.

An estimate is two-thirds of the 6 crore organised sector workforce in the country are eligible for the mandatory bonus given their salary levels. Analysts, however, say that actual number of beneficiaries could be less as many units practically circumvent the norm.

Under Section 10 of Payments of Bonus Act, “every employer (as defined in the Act) shall be bound to pay to every employee in respect of every accounting year, a minimum bonus which shall be 8.33% of the salary or wage earned by the employee during the accounting year”. All factories and establishments employing 20 or more persons are expected to pay the bonus compulsorily, provided the worker has worked in the establishment for at least 30 days. Employees in Life Insurance Corporation, seamen, dock workers and university employees are outside the Act’s ambit.

Although the country witnessed high inflation between 2009 and 2014, the move to raise the bonus amounts comes at a time inflation has come down (consumer price inflation is now below 5%). Consumer confidence is yet to be restored to the pre-2008-09 levels, while in recent months rural income growth has slowed.

Read more at: Financial Express