Mumbai, July 14
The Reserve Bank of India has reduced bank charges for electronic transfer of funds in order to promote cashless transactions, the central bank said in a notification issued on Friday.

From August 1, 2012 transfer of funds not over Rs 10,000 from one account to another account through the National Electronic Funds Transfer (NEFT) system will attract maximum charge of Rs 2.50 per transaction, RBI said.

The notification comes a month after then finance minister Pranab Mukherjee asked the RBI to work out a mechanism so that no fee is charged from customers for electronic funds transfers.

According to the existing fee structure, electronic transfer of fund up to Rs 1 lakh attracts a maximum charge of Rs 5 per transaction.

The notification said a new slab of payment up to Rs 10,000 has been included to promote small value transactions in cashless mode.

"It is desirable that the benefits accruing on account of increasing volume of transactions are passed on to the customers so as to incentivize greater use of the electronic payment system in place of cumbersome paper-based mechanism like cheques or demand drafts," RBI said.

"It is also considered necessary to provide the large number of people being covered under the financial inclusion programmes affordable financial services through an efficient remittance mechanism like the NEFT," it said.

However, charges for transfers beyond the Rs 10,000 limit would remain unchanged, it said. Charges for transfers beyond Rs 10,000 but less than Rs 1 lakh will be a maximum of Rs 5 per transaction.

At the same time, for electronic transfer of funds beyond Rs 1 lakh to less than Rs 2 lakh, RBI has retained maximum charges of Rs 15 per transaction. Similarly, for transactions beyond Rs 2 lakh, the maximum charge will continue to be Rs 25 per transaction from August.

Service tax will be levied on the prescribed charges. "It may be noted that the charges are the maximum that can be recovered by banks from their customers, if they so desire," the RBI said. All member banks are advised to encourage customers to take advantage of this facility, it added.

"Further, it is considered necessary to provide the large number of people being covered under the financial inclusion programme with an efficient and affordable remittance mechanism like the NEFT," the RBI said.

Oriental Bank of Commerce is the first bank to have waived all charges for online transfers up to Rs 1 lakh. The financial services department is working on the implementation of an action plan to bring India’s banking payment structure at par with global standards. For outward online transfers under the RTGS mechanism, banks charge Rs 30 for transfers of Rs 2 lakh to Rs 5 lakh and Rs 55 for amounts above Rs 5 lakh.

Hong Kong/Kuala Lumpur, July 14
Little more than a dozen years after the region's crippling financial crisis, Southeast Asia is looking more a safe haven than a risky bet, with foreign investors souring on China and India and pouring money into markets proving resilient to the global gloom.

Short-term investors in Southeast Asian stocks and bonds are being overtaken by those with a longer-term horizon, signalling growing confidence in a region of 600 million people that boasts a rapidly growing middle-class.

Foreign investment in regional funds is at a record high.

Assets managed by offshore mutual and exchange traded funds dedicated to Southeast Asia rose to more than $26 billion in March, according to an analysis of Lipper data. Four-fifths of the assets are in actively-managed funds, with the rest in shorter-term ETFs.

Those levels have dropped following a 5.6 percent fall in the MSCI Southeast Asian share index in April-June, hit by the global market slowdown. Stock valuations remain high, one reason for investors to be cautious. Still, the March figure was more than triple the low hit after the financial crisis in 2008.

By comparison, funds dedicated to China and India are roughly 30 percent below pre-crisis levels and falling, the data show. China fell to $87 billion at end-March.

"It's a structural change in terms of the way investors perceive the market," said Rajesh Ranganathan, a portfolio manager at Hong Kong-based hedge fund Doric Capital, which has invested in Southeast Asia for over a decade. "Today, India and China are the places where people are looking for beta (risk) and Indonesia and Thailand are the places where people are hiding."

The shift comes as a rising middle-class of consumers crowds malls from Manila to Phnom Penh, helping a region with a combined economy of $2 trillion wean itself off a dependency on US and European demand for exports. Improved competitiveness versus China, strong state spending on infrastructure and better fiscal management have added to the region's pull.

Underpinning the investment thesis is steady economic growth. Indonesia is set to grow 6.5% this year. The Philippine economy raced ahead at a 6.4% annual pace in Q1, its fastest in a year-and-a-half, fuelled by strong consumption and state spending as the country moves to upgrade decrepit infrastructure.

Even the region's "frontier" economies like war-scarred Cambodia are moving on to investors' radar as their own middle- class, albeit small, expands rapidly. Two of the world's largest insurance companies announced plans to open in Cambodia this month.

In contrast, Europe is mired in a debt crisis, the United States is hobbling, and China is showing signs of a slowdown. Longtime emerging-market darlings Brazil and India are in a relative slump, with growth seen slowing to around 2% and 6%, respectively, this year.

"Southeast Asia is coming into its own after being eclipsed by China for almost 10 years," said Frederic Neumann, co-head of Asian economic research at HSBC. — Reuters

San Francisco, Calif., July 14
A northern California jury directed Research in Motion Ltd to pay $147.2 million in patent litigation over a remote management system for wireless devices, according to an attorney for the plaintiff, Mformation Technologies Inc.

The verdict on Friday in a San Francisco federal court comes at a bad time for RIM, whose stock has fallen more than 70 percent in the past year as customers abandon the BlackBerry in favor of Apple's iPhone and a slew of devices using Google Inc's Android software.

Amar Thakur, an attorney for Mformation, said the jury directed RIM to pay an $8 royalty for every BlackBerry device connected to RIM's enterprise server software, which brings the total award to $147.2 million. The verdict only covers U.S. sales through trial, Thakur said, and not future or foreign damages.

RIM spokeswoman Crystal Roberts said the company has pending legal motions that could overturn the verdict.

"Research In Motion has worked hard to develop its leading-edge BlackBerry technology," Roberts said in a statement.

Based in Waterloo, Ontario, RIM last month posted its first operating loss in eight years, and it was much deeper than expected. The company also said it was cutting 5,000 jobs, almost a third of its workforce, as it struggles win back its reputation as an industry innovator.

Mformation sued RIM in 2008, bringing claims on a patent for a process that remotely manages a wireless device over a wireless network, a court filing says. According to its web site, Mformation helps corporations manage their smartphone inventory. The company also says it helps telecoms operators, such as AT&T and Sprint, with remote fixes and upgrades for users' gadgets.

RIM argued that Mformation's patent claims are invalid because the processes were already being used when Mformation filed its patent application.

The jury deliberated for four days this week before handing down its verdict, Thakur said. The case in U.S. District Court, Northern District of California is Mformation Technologies Inc. vs. Research in Motion Ltd. et al. — Reuters

New York City, July 14
Visa Inc, MasterCard Inc and banks that issue their credit cards have agreed to a $7.25 billion settlement with US retailers in a lawsuit over the fixing of credit and debit card fees in what could be the largest antitrust settlement in American history.

The settlement, if approved by a judge, would resolve dozens of lawsuits filed by retailers in 2005. The card companies and banks would also allow stores to start charging customers extra for using certain credit cards in an effort to steer them toward cheaper forms of payment. The settlement papers were filed on Friday in Brooklyn federal court.

Swipe fees — charges to cover processing credit and debit payments — are set by the card firms and deducted from the transaction by the banks that issue the cards, essentially passing on the cost to merchants, the lawsuits said.

The proposed settlement involves a payment to a class of stores of $6 billion from Visa, MasterCard and more than a dozen of the country's largest banks who issue the companies' cards. The card companies have also agreed to reduce swipe fees by the equivalent of 10 basis points for eight months for a total consideration to stores valued at about $1.2 billion, according to lawyers for the plaintiffs.

The deal calls for merchants to be allowed to negotiate collectively over the swipe fees, also known as interchange fees. Merchants would also be required to disclose information about card fees to customers, and credit card surcharges would be subject to a cap, according to the settlement papers. Surcharge rules would not affect the 10 states that currently prohibit that practice, which include California, New York and Texas.

An additional $525 million will be paid to stores suing individually, according to the documents.

"This is an historic settlement," said Bonny Sweeney, a lawyer for the plaintiffs. The settlement "will help shift the competitive balance from one formerly dominated by the banks which controlled the card networks to the side of merchants and consumers," said Craig Wildfang, who also represented the plaintiffs. — Reuters

Bangalore/Mumbai, July 14
A squeeze on billing rates is clouding the outlook for India's IT industry, which is feeling the pain of discount demands from its key financial sector clients.

Infosys, India's no. 2 software services exporter, said on Thursday pricing fell by 3.7% in the June quarter from the previous quarter, and larger rival Tata Consultancy Services said prices fell about 1%.

B. G. Srinivas, Infosys' head of financial services and Europe, told analysts the company faced pressure to discount from the financial sector, the firm's biggest client segment.

"When the overall budgets are under pressure, there is definitely a move to get more for less, and in that context, of course, there's competitive pressure as well," he said.

Bhavin Shah, CEO of Equirus Securities who forecast that Infosys would cut its full-year growth forecast to 5 percent, echoed that feeling.

"Given the weak demand environment when everyone obviously competes for a smaller piece of the growth pie, I expect further price erosion in coming quarters," said Shah, formerly a top JP Morgan Asia technology analyst who has an "underweight" rating on the IT sector.

"We believe the (economic) slowdown and lack of consolidation in the sector will manifest in reduced pricing power and profitability for TCS and the industry," Kotak Institutional Equities analyst Kawaljeet Saluja wrote in a note following the results.

Kotak downgraded both Infosys and TCS to "reduce" from "add." Infosys and TCS lead India's $100-billion-a-year IT and back-office outsourcing industry. — Reuters