2005
E-Payment Products
based on Centralised RBI
Platforms
By :
Kaza Sudhakar
General Manager
Department of Payment and Settlement
Systems
Reserve Bank of India
Banking Infrastructure of
India
Constraints Issues
» Administrative Burden
2
Payments System’s
Vision
• Objective : “To Provide A Safe,
Secure, Sound and Efficient payment
and settlement system for the
country”
• Increase Efficiency of the Payments
systems
• Customer Facilitation for each of the
payment system products
3
Payment System
Developments
• Initiatives driven by the Reserve Bank of India
– Increase in the number of centers offering MICR clearing
– Cheque Truncation
– NEFT
4
Payment System ..RBI
Vision
Banks to focus on:
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The Road Blocks
• Attitude
• It is something new.. We are comfortable
with the existing order.
• Failure to think ahead…
• The difficulty in marketing new products.
• The resistance from vested interests and
those interested in the existing order.
6
Benefits of RTGS
• Real-time Payment Settlement: Payments settled in real time
on a transaction-by-transaction basis, as soon as they are
accepted by the system.
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Issues relating to growth in
RTGS…
• Awareness..
-Create independent counter at branches..
-Create user friendly delivery channels and offer
dedicated products through….
>a robust website
>a kiosk
>an ATM
>or menu driven user friendly interface at the
banks branches.
• Charges..
-Some of the banks have reduced charges
substantially..Rs.25 to Rs.50 per transaction
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RTGS .. Coverage
• 11300 Branches of 95 Banks…covering 508 Clearing
Centres. Nearly 800 cities/towns covered.
• 79 Banks offering Customer Transactions
• Delivery Channels to reach the different categories…
-- Website
-- ATMs
-- Kiosks
• RTGS should be extended to all the CBS / AWB branches.
• Customers desire RTGS facility at an affordable price.
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EFT and SEFT
…net settlement system
• Electronic Funds Transfer (EFT) and Special
Electronic Funds Transfer (SEFT) facilitate
paperless inter and intra-bank settlements;
both inter and intra-city.
• There is no Maximum value limit for an
individual SEFT/ EFT transaction.
• EFT is available at 15 locations: Mumbai,
Kolkata, New Delhi, Chennai, Bangalore,
Hyderabad, Ahmedabad, Chandigarh,
Trivandrum, Jaipur, Nagpur, Guwahati,
Bhubhaneshwar, Patna and Kanpur.
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EFT and SEFT
• SEFT participation is voluntary and participating banks
have discretion to define branches that can participate
in SEFT
• SEFT covers approximately 3200 networked branches
of 35 banks in over 180 cities (currently).
• Two Settlements every day from November 2, 2005
• 10.30am – 3.00 pm
• Working Group on EFT for Capital Markets
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Some EFT
Products
• EFT for crediting Merchant Establishments of Credit Cards, Point of Sale,
Smart Cards.
• Banks having EDI interface with Govt. Departments say for example Customs,
can credit payments like duty drawback etc., into accounts of other banks
instead of giving pay orders.
12
Some EFT Products
• The Govt. Departments can also be credited
through EFT from various banks.
13
Local ECS…
• Available at the 44 Clearing Centre.
• (15 RBI Centres, 23 SBI Centres, 2
PNB, 1 Union Bank, 1 Corp Bank, 1
Andhra Bank and 1 SB of Indore)
• Funds transfer on T+2 basis..
• Available for Credit as well as Debit.
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How ECS Works - Process flow
service branches
Encrypted
Reports on Day-1
Destination
branches
Credit on Day-2
User Institution
Beneficiaries’
A/Cs 11 15
ECS - Processing of Uncredited Payment
Instructions contd...
Post Settlement
Data on
Destination
branches
User Institution
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Centralised ECS…
• Available at 15 centres..
• Submit data file at one location and
get credit across 15 locations..
• Funds transfer on T+2 basis..
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Banking Products based on
ECS
• ECS Credit
• Corporate users credit Dividend, Interest and
other types of warrants.
• RBI uses ECS credit for crediting RBI bonds
interest to the bond holders.
• Most Corporates and Govt. Departments use ECS
credit for Salary credit
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Banking Products – ECS Credit..
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Banking Products for ECS
Debit
• Credit Card payments
• Utilities payments .. Telephone, Cell
phones, Electricity bills
• Equated Monthly Instalment payments of
personal loans
• School fees
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Banking Products for
ECS
Credibility issues in ECS debit solved
by internet. The customer first
validates the bill through Internet
and thereafter the User releases the
ECS Debit
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What Corporates Should
Do…????
• Analyse the payments and receipt stream
• Identify the payments for each type of product. (RTGS,
SEFT, ECS and EFT)
• Put a mechanism in place for receipts and payments.
• Demand the Required Products from your
Bank !!!
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Thank You..
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