Digital Payments
RBI has been playing pivotal role in the area of national payment system, which is the backbone of economic activity
and has taken several initiatives for a safe, secure, sound and efficient payment system in India. Last one decade
witnessed spurt in digital payments on account of increased adoption of technology and regulatory guidelines.
The evolution of e-payment systems in India are:
i) Speed clearing: Banks as part of their normal banking operations undertake collection of cheques/drafts
deposited by their customers drawn on other banks and the collection process is taking 7 to 14 days since cheques need
to move physically from presentation centre to drawee centre. In order to reduce the collection time, RBI has
introduced Speed Clearing where in cheques/drafts drawn on outstation are treated on par with local cheques and
presented in the local clearing provided the presentment location is MICR/ECCS centre and the destination bank branch
is under CBS platform. However, Government cheques are not eligible for collection under Speed Clearing. Drawee bank
debits the account online without movement of cheque and sends the proceeds to the collecting bank. Under Speed
Clearing, it would be working on T+1 or 2 basis. No charges for cheques up to Rs.1 lakh. For above one lakh the
maximum amount that can be levied is Rs.150/-. In case of return of cheques, the charges ranges from 750 to 7500
depending on the value of the instrument. The facility of immediate credit would not be applicable to cheques collected
under speed clearing arrangements.
ii) Cheque Truncation System (CTS): It is the process of stopping the flow of the physical cheque issued by a drawer
at some point by the presenting bank en-route to the paying bank branch. In its place an electronic image of the cheque
is transmitted to the paying branch through the clearing house, along with relevant information like data on the MICR
band, date of presentation, presenting bank, etc. Cheque truncation thus obviates the need to move the physical
instruments across bank branches, other than in exceptional circumstances for clearing purposes. Further, domestic
instruments, where both presenting and drawee banks are the same are not allowed in the CTS. To facilitate the
transformation to an image based processing scenario, RBI directed all banks to issue cheques confronting to CTS-2010
standard with uniform features in terms of size, paper quality and fields such as the MICR band, signature and date
format. Now, CTS is implemented at all the MICR centres with the introduction of Grid Based Cheque Truncation
clearing. Under this, all cheques drawn on bank branches falling within in the grid jurisdiction are treated and cleared as
local cheques. Cheque collection charges including Speed Clearing Charges should not be levied if the collecting bank
and the paying bank are located within the jurisdiction of the same CTS grid even though they are located in different
cities. CTS effectively eliminate the associated cost of movement of the physical cheques, reduce the time required for
their collection and bring elegance to the entire activity of cheque processing. In addition to operational efficiency, CTS
offers several benefits to banks and customers, including human resource rationalisation, cost effectiveness, business
process re-engineering, better service, adoption of latest technology, etc. Thus, it has emerged as an important
efficiency enhancement initiative undertaken by RBI in the Payments Systems arena.
iii)National Automated Clearing House (NACH): National Payments Corporation of India (NPCI) has implemented the
NACH, a web based solution for Banks, Financial Institutions, Corporates and Government to facilitate interbank, high
volume, electronic transactions which are repetitive and periodic in nature. It is a centralized system, launched with an
aim to consolidate multiple ECS systems running across the country leveraging robust technology platform with a single
set of rules. It supports the financial inclusion measures through Aadhaar based transactions and Mobile based ACH
transactions. The system is covering all core banking enabled bank branches spread across the country. It is used for
making bulk transactions towards distribution of subsidies, dividends, interest, salary, pension etc. and also for bulk
transactions towards collection of payments pertaining to telephone, electricity, water, loans, investments in mutual
funds, insurance premium etc. Further, it has best in class security features, cost efficiency & payment performance
(STP) coupled with multi-level data validation facility accessible to all participants in real-time mode rather than batch
mode. It gives a positive confirmation from investors' bank about registration acceptance or non-acceptance, unlike
ECS. Investors can opt for a one time registration and avail this facility any time for their future investments and can
make use of this payment mode for their Lump-sum Mutual Fund investments apart from SIPs. Realization of funds from
the investors account happens on "T" day which helps them to track their payments on time. The existing ECS is
replaced with NACH with effective from 01.04.2016.
iv) Debit cards known as check cards. It operates like cash or a personal check. Debit cards are different from credit
cards. Credit card is a way to "Pay Later" whereas debit card is a way to "Pay Now." In case of debit card, bank
account of the customer will be debited immediately on completion of transaction. Debit cards are accepted at many
locations, including retail stores, petrol pumps, and restaurants. The liberalized norms coupled with ease of usage
have led to increase debit card base over the years. Of late, banks are consciously driving the customers to alternate
delivery channels by issuing debit cards on the day of opening of the account itself to reduce the work load and to
enable them to pay focused attention on core banking activities. In order to make Credit/Debit Card transactions
more secure, RBI mandated the card holders to enter PIN while transacting at POS terminals.As per recent RBI
guidelines, all banks are mandated to issue only Chip enabled Cards w.e.f.01.10.16.
v) RuPay Cards: It is a domestic card payment network established by National Payment Corporation of India (NPCI)
having more than 100 Banks in India as members with its ATM network spread across the country. These cards can be
used in all the ATMs of NPCI network and POS terminals & e-com transactions (Internet) enabled for RuPay acquiring.
The various types of RuPay cards are as under:
Card Type Meant for
RuPay Kisan Farmers availing Agriculture production loans (Crop Loans)
RuPay Aadhaar Beneficiaries of Electronic Benefit Transfer (EBT) scheme
RuPay Debit Beneficiaries under Financial Inclusion schemes
It provides accidental insurance cover upto 71 lakh without any charge to the customer. To avail this benefit, the card
must be used atleast once in 90 days. The existing identification modes used in new delivery channels has a major
drawback as it recognize the PIN but not the person. Sometimes, it leads to impersonation and may cause financial loss. To
overcome the problem, biometric technologies such as Fingerprint Recognition, Face Recognition, Voice Authentication,
Hand Geometry, Retinal Scanning, Iris Scanning and Signature Verification have come in to force. Whenever the user
access to delivery channel, it verifies with the server and deliver the service if found correct.
v) Credit cards: The concept of credit card was used in 1950 with the launch of charge cards in USA by Diners Club and
American Express. Credit card became more popular with use of magnetic strip in 1970. The first Credit Card was issued
in 1981 and Gold Card in 1986 by VISA. Credit cardholder need not carry cash and purchase goods and services at any
approved Merchant Establishments/Point of sale Terminals by tendering the card duly signing the charge slip. Further,
cardholders can make online purchases through internet using the card and PIN. Added to this, cardholder can withdraw
cash at any ATM across the globe. However, cash advance attracts charge i.e. transaction fee as well as service
fee/interest charge.
Charge Card is like any Credit or Debit Card. These cards neither offer revolving credit like the Credit Card nor debit the
account instantaneously like Debit Card. However, the cardholder is required to settle the bill in full by the due date each
month. Charge cards make a good option to develop financial discipline which likely to enable the cardholders to improve
their credit history. Further, charge card offers a dynamic limit, while rewarding good payment record.
Prepaid Card looks like a credit card and works like a debit card. These cards resemble credit and debit cards in
appearance and allow users to load any amount up to 750000/- and can be used at any ATM/Point of Sale Terminal. On
use of card, funds are directly debited from the card. Cardholders preload the cards with funds via a cash deposit or
wire transfer. There are no finance fees or interest payments as charges are deducted from the prepaid balance. It is an
opportunity for people who have had little or no access to the mainstream financial system by loading funds onto a
prepaid card. It is a secure and convenient alternative to cash. Various types of Prepaid Cards are - Re-loadable Cards
(value is replenished once it is used), Disposable Cards (discarded once the value is used), Closed Cards can be used for
a specific purpose (Phone Cards) and Open Cards (multi-purpose). Re-loadable cards are most popular among "under-
banked" individuals, or those who tend not to possess conventional bank accounts.
vi) Gift Card is one of the paperless payment systems and is highly popular in card industry. It is a card with predetermined limit
and value is loaded through cash or transfer from the account. However it is not reusable.
vii) Internet Banking is leveraging the potential of Internet to facilitate customer access to his account from any place
at any time. Apart from viewing the transactions in his account for any period, the customer is able to effect transfer of
funds and request for various services. Internet is one of the cost effective channel for delivery of banking services.
Internet Banking is provided to Individual/Joint/Sole proprietary concerns, Corporate etc. at their request. The terms
and conditions governing Internet banking are displayed on the Bank's website. The services available through Internet
banking are - View account balances and download statements, Transfer of funds within Bank and across the Banks,
Request for Cheque Book / Fixed Deposit, Payment of Utility bills viz., Electricity, Telephone, Income Tax etc., Booking
of Train/Bus/Airline tickets, Recharge of Moble / Online shopping, Online Equity Trading - Primary and Secondary
market etc.
viii)Customer access is controlled through "Customer ID" and "Password". It is
protected with "firewalls" to prevent unauthorized access, hacking and virus infection. Advanced encryption
technology is used to ensure that messages from/to the customers are not intercepted and misused by others.
Registered customer has an option to transfer balances between linked operative accounts of the same customer
across the branches and also undertake third party transfers from his/her account to any other operative account.
Funds transfer facility to the customers across the Banks through NEFT/RTGS is allowed on Internet. Normally, the
transaction limit is fixed at 72 lakh per day, inclusive of all types of funds transfers (Self, Third party, External, e-tax
payments, Online trading, e-commerce etc.). However, banks can have their own limits depending on the client
profile. To execute funds transfer facility, the internet customer is required to create an account i.e. Online
Authentication Code (OAC), which is a mandatory.
ix)Applications Supported by Blocked Amount (ASBA) is a payment method for IPO or FPO where the bidding amount
remains in investors account, but blocked by the bank until allotment is done. It is made mandatory for both retail and
institutional investors with effective from 1st January 2016. The investors have option to bid IPO/FPO either through
designated branches or Internet Banking. Revision and cancellation of bids are permitted till the issue closure date and
time. The investor continues to earn interest on the application money. It enables the listing process faster. Registrar
transfers the allocated shares to investor's Demat Accounts. No charges will be levied to the investors for this service.
It is an opportunity to branches to improve low cost deposits and non-interest income since bank earns commission on
each application received under ASBA.
In the light of potential risks (hacking and phising) associated with Internet Banking and to protect the interest of the internet
customers, Banks have introduced Two Factor Authentication where bank generates six-digit One Time Password (OTP) and
sending as SMS to the customer as and when the customer transacts on internet.
x) Mobile Banking: The mobile-phone revolution that is transforming the world could also turn into a banking
revolution. Banks have been exploring the feasibility of using mobile phones as an alternative channel of delivery of
banking services. The swift growth in number of Mobile users and wider coverage of mobile phone networks has made
this channel an important platform for extending banking services to customers. Today, the number of Mobiles in India
crossed 1000 million of which 1/3rd mobiles are in Rural India alone. At present, Mobile Banking is providing the Bill
payment and Funds Transfer facility besides information services to the customers. The recent guidelines issued by RBI
on Mobile Banking are as under:
-
RBI approval is required to extend mobile banking services.
-
All the transactions/services should be in Indian currency only. Cross-border transfers through mobile banking are
strictly prohibited and the operating banks have to be based, licensed and supervised in India.
-
Registered customers can only avail this facility from banks. For financial services one time registration should be done
through a signed document.
-
Banks are allowed to provide cash-out through ATMs or BCs subject to cap of 710000/- per transaction and maximum of
750000/- per month per customer.
-
Banks may put in place end-to-end encryption of the mobile PIN number (mPIN) for better security.
-
Banks are advised to provide registration facility to the customers at all ATMs as well as other Alternate Delivery
Channels.
All operative account holders having ATM/Debit card are eligible to avail this facility. Customer has an option to link any
CASA account connected to the card with the mobile number. However, the mobile handset should be Java enabled or
Windows Mobile 5.0 & above model or Windows Mobile Professional model with activated GPRS (General Packet Radio
Service). Customer can register for mobile banking through Branch or ATM across the country. It is hassle-free paperless
process and upon registration, customer receives a registration slip which contains the default application password and
MPIN. Under this the customer can transfer 750000/- in a day through mobile banking application and 75000/- SMS tag
messaging which attracts transaction cost of 75/- plus applicable service charges.
xi) The National Payment Corporation of India (NPCI) launched the intermediate payment service i.e. Inter Bank Mobile
Payment Service (IMPS), a 24/7 real-time electronic Interbank fund transfer on a Person-to-Person (P2P) or Person-to-
Merchant (P2M) basis, which has boosted mobile banking. It gives the banks an opportunity to expand their customer
base without incurring additional infrastructure costs. It would also help in financial inclusion as it would provide a large
number of un-banked people access to banking services. Banks could save a huge amount of money on card issuance and
merchant acquiring with zero point of sale cost. Mobile Banking is the hottest area of development in the banking sector
and is expected to replace the credit/debit card system in future. The increased phase of mobile usage is going to place
our country on the top in the Asia Pacific region shortly.
xii) Interbank Mobile Payment Service (IMPS): The National Payment Corporation of India (NPCI) has rolled out
National Unified USSD platform (NUUP) based mobile banking service to boost IMPS based transactions. Users can dial
*99# short code on their handset, which will allow every banking customer to access banking services with a single
number across all banks - irrespective of the telecom service provider, mobile handset make or the region. The service
is currently available on MTNL/BSNL telecom operators and with majority commercial banks. Since the service is
Unstructured Supplementary Service Data (USSD) based, it will work only with GSM telecom operators and not with
CDMA. Apart from that, the service does not need users to send an SMS or require a GPRS enabled device and can be
used even on a basic mobile handset. As of now, users can perform Interbank Mobile Payment Service (IMPS) fund
transfer through the service with a daily
digit random number issued by the bank. When the customer dial *99# the service will ask for entering first three
letters of Bank name or first four letters of IFSC code. Customers can select i) Balance enquiry ii) Mini Statement iii)
Send money using MMID iv) Send money using IFSC code v) Show MMID vi) MPIN vii) Generate OTP. The prerequisites
for using this application are Mobile Banking Registration, MMID and MPIN. The charges will be levied by Telecom
service provider @ 0.50 paise per session which is most cost effective to the customers.
xiii)Mobile Wallet: It is another payment channel independent of bank account. Recently, RBI has permitted the
telecom service providers to enter into this space through collaboration. These entities can undertake host of services -
Deposit, transfer of funds, utility payments and cash withdrawal. Under this the funds can be transferred from mobile
to mobile and mobile to bank account. Companies that have launched mobile wallet in India are Paytm, Chillr, Buddy,
mPay, Airtel money, Zip cash, Mobi cash etc.
xiv) Unified Payments Interface (UPI) is a unique payment solution as the recipient is now empowered to initiate the
payment request from a smart phone. It facilitates "virtual address" as a payment identifier for sending and collecting
money and works on single click Two factor authentications without knowing the recipient's name, mobile number,
bank account number and IFSC code. It allows the user to pay directly to different merchants without the hassle of
typing card details or net banking password. It also provides an option for scheduling push and pull transactions for
various purposes like sharing bills among peers. One can use UPI app instead of paying cash on delivery on receipt of
product from online shopping websites and can perform miscellaneous expenses like paying utility bills, over the
counter payments, barcode (scan & pay) based payments, donations, school fees and other such unique and
innovative use cases. The interface is the advanced version of NPCI's Immediate Payment Service (IMPS) which is a
24*7*365 funds transfer service. In order to make use the UPI services both the bank customer and the beneficiary is
required to register with the bank and get the virtual ID.
xv)BHIM: A new digital application "Bharat Interface for Money (BHIM)" is launched on 30th December 2016 by Shri
Narendra Modi, Prime Minister of India. It acts as aggregator for all UPI based offerings of banks across the country. Till
now, each bank has come out with its own mobile banking application on UPI platform being operated by NPCI. It is
built by NPCI and expected to evolve as the common UPI application to facilitate faster and smoother digital payments.
Password: Form a random sequence of words and/or letters but easy to remember say base-word. Add numbers to the
base-word to make it more secure and use punctuation and symbols to complicate it further. Create complexity with
upper and lowercase letters. Change the password frequently and do not share your password with anyone and desist
the practice of writing password on paper or in the system.
UNITS OF COMPUTER DATA
Computer data is stored in Bytes ,8 bits = 1 byte, 1024 bytes = 1 Kilobyte, 1024 KB = 1 Megabyte, 1024 MB = 1 Gigabyte,
1024 GB = 1 Terabyte, 1024 TB = 1 Petabyte, 1024 PB = 1 Exabyte, 1024 EB = 1 Zettabyte, 1024 ZB = 1 Yottabyte
ISSUANCE OF EMV CHIP AND PIN CARDS
♦ The RBI has granted extension of time for issuance of all new EMV Chip and Pin cards – debit and credit, domestic and
international by banks.For cards issued under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) / Basic Savings Bank Deposit
Account (BSBDA) / other Government schemes, the time is extended upto September 30, 2016 and for all cards other than
these, the extended period is upto January 31, 2016.During the extended period, if any customer specifically requests for EMV
Chip and Pin cards, banks should promptly comply with request. Besides, all cards issued for international usage will
necessarily be EMV Chip and Pin cards. Further, the magnetic stripe cards issued would have to be replaced by December 31,
2018 irrespective of the validity period of the card
RBI has been playing pivotal role in the area of national payment system, which is the backbone of economic activity
and has taken several initiatives for a safe, secure, sound and efficient payment system in India. Last one decade
witnessed spurt in digital payments on account of increased adoption of technology and regulatory guidelines.
The evolution of e-payment systems in India are:
i) Speed clearing: Banks as part of their normal banking operations undertake collection of cheques/drafts
deposited by their customers drawn on other banks and the collection process is taking 7 to 14 days since cheques need
to move physically from presentation centre to drawee centre. In order to reduce the collection time, RBI has
introduced Speed Clearing where in cheques/drafts drawn on outstation are treated on par with local cheques and
presented in the local clearing provided the presentment location is MICR/ECCS centre and the destination bank branch
is under CBS platform. However, Government cheques are not eligible for collection under Speed Clearing. Drawee bank
debits the account online without movement of cheque and sends the proceeds to the collecting bank. Under Speed
Clearing, it would be working on T+1 or 2 basis. No charges for cheques up to Rs.1 lakh. For above one lakh the
maximum amount that can be levied is Rs.150/-. In case of return of cheques, the charges ranges from 750 to 7500
depending on the value of the instrument. The facility of immediate credit would not be applicable to cheques collected
under speed clearing arrangements.
ii) Cheque Truncation System (CTS): It is the process of stopping the flow of the physical cheque issued by a drawer
at some point by the presenting bank en-route to the paying bank branch. In its place an electronic image of the cheque
is transmitted to the paying branch through the clearing house, along with relevant information like data on the MICR
band, date of presentation, presenting bank, etc. Cheque truncation thus obviates the need to move the physical
instruments across bank branches, other than in exceptional circumstances for clearing purposes. Further, domestic
instruments, where both presenting and drawee banks are the same are not allowed in the CTS. To facilitate the
transformation to an image based processing scenario, RBI directed all banks to issue cheques confronting to CTS-2010
standard with uniform features in terms of size, paper quality and fields such as the MICR band, signature and date
format. Now, CTS is implemented at all the MICR centres with the introduction of Grid Based Cheque Truncation
clearing. Under this, all cheques drawn on bank branches falling within in the grid jurisdiction are treated and cleared as
local cheques. Cheque collection charges including Speed Clearing Charges should not be levied if the collecting bank
and the paying bank are located within the jurisdiction of the same CTS grid even though they are located in different
cities. CTS effectively eliminate the associated cost of movement of the physical cheques, reduce the time required for
their collection and bring elegance to the entire activity of cheque processing. In addition to operational efficiency, CTS
offers several benefits to banks and customers, including human resource rationalisation, cost effectiveness, business
process re-engineering, better service, adoption of latest technology, etc. Thus, it has emerged as an important
efficiency enhancement initiative undertaken by RBI in the Payments Systems arena.
iii)National Automated Clearing House (NACH): National Payments Corporation of India (NPCI) has implemented the
NACH, a web based solution for Banks, Financial Institutions, Corporates and Government to facilitate interbank, high
volume, electronic transactions which are repetitive and periodic in nature. It is a centralized system, launched with an
aim to consolidate multiple ECS systems running across the country leveraging robust technology platform with a single
set of rules. It supports the financial inclusion measures through Aadhaar based transactions and Mobile based ACH
transactions. The system is covering all core banking enabled bank branches spread across the country. It is used for
making bulk transactions towards distribution of subsidies, dividends, interest, salary, pension etc. and also for bulk
transactions towards collection of payments pertaining to telephone, electricity, water, loans, investments in mutual
funds, insurance premium etc. Further, it has best in class security features, cost efficiency & payment performance
(STP) coupled with multi-level data validation facility accessible to all participants in real-time mode rather than batch
mode. It gives a positive confirmation from investors' bank about registration acceptance or non-acceptance, unlike
ECS. Investors can opt for a one time registration and avail this facility any time for their future investments and can
make use of this payment mode for their Lump-sum Mutual Fund investments apart from SIPs. Realization of funds from
the investors account happens on "T" day which helps them to track their payments on time. The existing ECS is
replaced with NACH with effective from 01.04.2016.
iv) Debit cards known as check cards. It operates like cash or a personal check. Debit cards are different from credit
cards. Credit card is a way to "Pay Later" whereas debit card is a way to "Pay Now." In case of debit card, bank
account of the customer will be debited immediately on completion of transaction. Debit cards are accepted at many
locations, including retail stores, petrol pumps, and restaurants. The liberalized norms coupled with ease of usage
have led to increase debit card base over the years. Of late, banks are consciously driving the customers to alternate
delivery channels by issuing debit cards on the day of opening of the account itself to reduce the work load and to
enable them to pay focused attention on core banking activities. In order to make Credit/Debit Card transactions
more secure, RBI mandated the card holders to enter PIN while transacting at POS terminals.As per recent RBI
guidelines, all banks are mandated to issue only Chip enabled Cards w.e.f.01.10.16.
v) RuPay Cards: It is a domestic card payment network established by National Payment Corporation of India (NPCI)
having more than 100 Banks in India as members with its ATM network spread across the country. These cards can be
used in all the ATMs of NPCI network and POS terminals & e-com transactions (Internet) enabled for RuPay acquiring.
The various types of RuPay cards are as under:
Card Type Meant for
RuPay Kisan Farmers availing Agriculture production loans (Crop Loans)
RuPay Aadhaar Beneficiaries of Electronic Benefit Transfer (EBT) scheme
RuPay Debit Beneficiaries under Financial Inclusion schemes
It provides accidental insurance cover upto 71 lakh without any charge to the customer. To avail this benefit, the card
must be used atleast once in 90 days. The existing identification modes used in new delivery channels has a major
drawback as it recognize the PIN but not the person. Sometimes, it leads to impersonation and may cause financial loss. To
overcome the problem, biometric technologies such as Fingerprint Recognition, Face Recognition, Voice Authentication,
Hand Geometry, Retinal Scanning, Iris Scanning and Signature Verification have come in to force. Whenever the user
access to delivery channel, it verifies with the server and deliver the service if found correct.
v) Credit cards: The concept of credit card was used in 1950 with the launch of charge cards in USA by Diners Club and
American Express. Credit card became more popular with use of magnetic strip in 1970. The first Credit Card was issued
in 1981 and Gold Card in 1986 by VISA. Credit cardholder need not carry cash and purchase goods and services at any
approved Merchant Establishments/Point of sale Terminals by tendering the card duly signing the charge slip. Further,
cardholders can make online purchases through internet using the card and PIN. Added to this, cardholder can withdraw
cash at any ATM across the globe. However, cash advance attracts charge i.e. transaction fee as well as service
fee/interest charge.
Charge Card is like any Credit or Debit Card. These cards neither offer revolving credit like the Credit Card nor debit the
account instantaneously like Debit Card. However, the cardholder is required to settle the bill in full by the due date each
month. Charge cards make a good option to develop financial discipline which likely to enable the cardholders to improve
their credit history. Further, charge card offers a dynamic limit, while rewarding good payment record.
Prepaid Card looks like a credit card and works like a debit card. These cards resemble credit and debit cards in
appearance and allow users to load any amount up to 750000/- and can be used at any ATM/Point of Sale Terminal. On
use of card, funds are directly debited from the card. Cardholders preload the cards with funds via a cash deposit or
wire transfer. There are no finance fees or interest payments as charges are deducted from the prepaid balance. It is an
opportunity for people who have had little or no access to the mainstream financial system by loading funds onto a
prepaid card. It is a secure and convenient alternative to cash. Various types of Prepaid Cards are - Re-loadable Cards
(value is replenished once it is used), Disposable Cards (discarded once the value is used), Closed Cards can be used for
a specific purpose (Phone Cards) and Open Cards (multi-purpose). Re-loadable cards are most popular among "under-
banked" individuals, or those who tend not to possess conventional bank accounts.
vi) Gift Card is one of the paperless payment systems and is highly popular in card industry. It is a card with predetermined limit
and value is loaded through cash or transfer from the account. However it is not reusable.
vii) Internet Banking is leveraging the potential of Internet to facilitate customer access to his account from any place
at any time. Apart from viewing the transactions in his account for any period, the customer is able to effect transfer of
funds and request for various services. Internet is one of the cost effective channel for delivery of banking services.
Internet Banking is provided to Individual/Joint/Sole proprietary concerns, Corporate etc. at their request. The terms
and conditions governing Internet banking are displayed on the Bank's website. The services available through Internet
banking are - View account balances and download statements, Transfer of funds within Bank and across the Banks,
Request for Cheque Book / Fixed Deposit, Payment of Utility bills viz., Electricity, Telephone, Income Tax etc., Booking
of Train/Bus/Airline tickets, Recharge of Moble / Online shopping, Online Equity Trading - Primary and Secondary
market etc.
viii)Customer access is controlled through "Customer ID" and "Password". It is
protected with "firewalls" to prevent unauthorized access, hacking and virus infection. Advanced encryption
technology is used to ensure that messages from/to the customers are not intercepted and misused by others.
Registered customer has an option to transfer balances between linked operative accounts of the same customer
across the branches and also undertake third party transfers from his/her account to any other operative account.
Funds transfer facility to the customers across the Banks through NEFT/RTGS is allowed on Internet. Normally, the
transaction limit is fixed at 72 lakh per day, inclusive of all types of funds transfers (Self, Third party, External, e-tax
payments, Online trading, e-commerce etc.). However, banks can have their own limits depending on the client
profile. To execute funds transfer facility, the internet customer is required to create an account i.e. Online
Authentication Code (OAC), which is a mandatory.
ix)Applications Supported by Blocked Amount (ASBA) is a payment method for IPO or FPO where the bidding amount
remains in investors account, but blocked by the bank until allotment is done. It is made mandatory for both retail and
institutional investors with effective from 1st January 2016. The investors have option to bid IPO/FPO either through
designated branches or Internet Banking. Revision and cancellation of bids are permitted till the issue closure date and
time. The investor continues to earn interest on the application money. It enables the listing process faster. Registrar
transfers the allocated shares to investor's Demat Accounts. No charges will be levied to the investors for this service.
It is an opportunity to branches to improve low cost deposits and non-interest income since bank earns commission on
each application received under ASBA.
In the light of potential risks (hacking and phising) associated with Internet Banking and to protect the interest of the internet
customers, Banks have introduced Two Factor Authentication where bank generates six-digit One Time Password (OTP) and
sending as SMS to the customer as and when the customer transacts on internet.
x) Mobile Banking: The mobile-phone revolution that is transforming the world could also turn into a banking
revolution. Banks have been exploring the feasibility of using mobile phones as an alternative channel of delivery of
banking services. The swift growth in number of Mobile users and wider coverage of mobile phone networks has made
this channel an important platform for extending banking services to customers. Today, the number of Mobiles in India
crossed 1000 million of which 1/3rd mobiles are in Rural India alone. At present, Mobile Banking is providing the Bill
payment and Funds Transfer facility besides information services to the customers. The recent guidelines issued by RBI
on Mobile Banking are as under:
-
RBI approval is required to extend mobile banking services.
-
All the transactions/services should be in Indian currency only. Cross-border transfers through mobile banking are
strictly prohibited and the operating banks have to be based, licensed and supervised in India.
-
Registered customers can only avail this facility from banks. For financial services one time registration should be done
through a signed document.
-
Banks are allowed to provide cash-out through ATMs or BCs subject to cap of 710000/- per transaction and maximum of
750000/- per month per customer.
-
Banks may put in place end-to-end encryption of the mobile PIN number (mPIN) for better security.
-
Banks are advised to provide registration facility to the customers at all ATMs as well as other Alternate Delivery
Channels.
All operative account holders having ATM/Debit card are eligible to avail this facility. Customer has an option to link any
CASA account connected to the card with the mobile number. However, the mobile handset should be Java enabled or
Windows Mobile 5.0 & above model or Windows Mobile Professional model with activated GPRS (General Packet Radio
Service). Customer can register for mobile banking through Branch or ATM across the country. It is hassle-free paperless
process and upon registration, customer receives a registration slip which contains the default application password and
MPIN. Under this the customer can transfer 750000/- in a day through mobile banking application and 75000/- SMS tag
messaging which attracts transaction cost of 75/- plus applicable service charges.
xi) The National Payment Corporation of India (NPCI) launched the intermediate payment service i.e. Inter Bank Mobile
Payment Service (IMPS), a 24/7 real-time electronic Interbank fund transfer on a Person-to-Person (P2P) or Person-to-
Merchant (P2M) basis, which has boosted mobile banking. It gives the banks an opportunity to expand their customer
base without incurring additional infrastructure costs. It would also help in financial inclusion as it would provide a large
number of un-banked people access to banking services. Banks could save a huge amount of money on card issuance and
merchant acquiring with zero point of sale cost. Mobile Banking is the hottest area of development in the banking sector
and is expected to replace the credit/debit card system in future. The increased phase of mobile usage is going to place
our country on the top in the Asia Pacific region shortly.
xii) Interbank Mobile Payment Service (IMPS): The National Payment Corporation of India (NPCI) has rolled out
National Unified USSD platform (NUUP) based mobile banking service to boost IMPS based transactions. Users can dial
*99# short code on their handset, which will allow every banking customer to access banking services with a single
number across all banks - irrespective of the telecom service provider, mobile handset make or the region. The service
is currently available on MTNL/BSNL telecom operators and with majority commercial banks. Since the service is
Unstructured Supplementary Service Data (USSD) based, it will work only with GSM telecom operators and not with
CDMA. Apart from that, the service does not need users to send an SMS or require a GPRS enabled device and can be
used even on a basic mobile handset. As of now, users can perform Interbank Mobile Payment Service (IMPS) fund
transfer through the service with a daily
digit random number issued by the bank. When the customer dial *99# the service will ask for entering first three
letters of Bank name or first four letters of IFSC code. Customers can select i) Balance enquiry ii) Mini Statement iii)
Send money using MMID iv) Send money using IFSC code v) Show MMID vi) MPIN vii) Generate OTP. The prerequisites
for using this application are Mobile Banking Registration, MMID and MPIN. The charges will be levied by Telecom
service provider @ 0.50 paise per session which is most cost effective to the customers.
xiii)Mobile Wallet: It is another payment channel independent of bank account. Recently, RBI has permitted the
telecom service providers to enter into this space through collaboration. These entities can undertake host of services -
Deposit, transfer of funds, utility payments and cash withdrawal. Under this the funds can be transferred from mobile
to mobile and mobile to bank account. Companies that have launched mobile wallet in India are Paytm, Chillr, Buddy,
mPay, Airtel money, Zip cash, Mobi cash etc.
xiv) Unified Payments Interface (UPI) is a unique payment solution as the recipient is now empowered to initiate the
payment request from a smart phone. It facilitates "virtual address" as a payment identifier for sending and collecting
money and works on single click Two factor authentications without knowing the recipient's name, mobile number,
bank account number and IFSC code. It allows the user to pay directly to different merchants without the hassle of
typing card details or net banking password. It also provides an option for scheduling push and pull transactions for
various purposes like sharing bills among peers. One can use UPI app instead of paying cash on delivery on receipt of
product from online shopping websites and can perform miscellaneous expenses like paying utility bills, over the
counter payments, barcode (scan & pay) based payments, donations, school fees and other such unique and
innovative use cases. The interface is the advanced version of NPCI's Immediate Payment Service (IMPS) which is a
24*7*365 funds transfer service. In order to make use the UPI services both the bank customer and the beneficiary is
required to register with the bank and get the virtual ID.
xv)BHIM: A new digital application "Bharat Interface for Money (BHIM)" is launched on 30th December 2016 by Shri
Narendra Modi, Prime Minister of India. It acts as aggregator for all UPI based offerings of banks across the country. Till
now, each bank has come out with its own mobile banking application on UPI platform being operated by NPCI. It is
built by NPCI and expected to evolve as the common UPI application to facilitate faster and smoother digital payments.
Password: Form a random sequence of words and/or letters but easy to remember say base-word. Add numbers to the
base-word to make it more secure and use punctuation and symbols to complicate it further. Create complexity with
upper and lowercase letters. Change the password frequently and do not share your password with anyone and desist
the practice of writing password on paper or in the system.
UNITS OF COMPUTER DATA
Computer data is stored in Bytes ,8 bits = 1 byte, 1024 bytes = 1 Kilobyte, 1024 KB = 1 Megabyte, 1024 MB = 1 Gigabyte,
1024 GB = 1 Terabyte, 1024 TB = 1 Petabyte, 1024 PB = 1 Exabyte, 1024 EB = 1 Zettabyte, 1024 ZB = 1 Yottabyte
ISSUANCE OF EMV CHIP AND PIN CARDS
♦ The RBI has granted extension of time for issuance of all new EMV Chip and Pin cards – debit and credit, domestic and
international by banks.For cards issued under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) / Basic Savings Bank Deposit
Account (BSBDA) / other Government schemes, the time is extended upto September 30, 2016 and for all cards other than
these, the extended period is upto January 31, 2016.During the extended period, if any customer specifically requests for EMV
Chip and Pin cards, banks should promptly comply with request. Besides, all cards issued for international usage will
necessarily be EMV Chip and Pin cards. Further, the magnetic stripe cards issued would have to be replaced by December 31,
2018 irrespective of the validity period of the card
Good information, Very nice. Thanks for the useful article.
ReplyDeleteDr. Datsons Labs
SBI Card IPO
Equitas SFB IPO
BHIM UIP