Thursday, May 11, 2017

NEFT is almost Real Time now-11 Benefits of NEFT

            Come July 10, 2017 and a new era will commence in India’s ePayment system. Buoyed by the increase of volumes in NEFT, Reserve Bank of India has introduced additional NEFT settlement batches

In NEFT, the funds transfer happen in batches as compared to real-time in RTGS or as the full form suggests Real Time Gross Settlement.

Under NEFT, settlement takes place with all transactions received till the Particular cut-off time in a particular batch.

After the introduction of 11 additional NEFT settlements, the total number will increase to 23 at half hourly settlement batches during the day. Currently there are twelve settlements from 8 am to 7 pm at hourly intervals. 

The overall NEFT timings - between 8.00 am and 7.00 pm - will remain the same as earlier.

The more number of settlement batches means that the fund transfer will happen at a quicker pace. This will improve the efficiency and add to customer convenience, the RBI said. However, the timings that the banks follow may vary depending on the customer timings of the bank branches.

The minimum amount which can be remitted through NEFT is INR 1. The maximum amount is restricted to the amount available in the originators bank account.

Through the additional 11 batches, the transfer is almost instantaneous.

"The half hourly settlements would speed up the funds transfer process and provide faster credit to the destination accounts," the RBI said in a notification.

The RBI has advised banks to carry out the required changes in their processing system to initiate the NEFT transactions for half hourly settlements. They have also been told to accept and credit the inward NEFT transactions on half hourly basis. Customers will also get a confirmation SMS once the transaction is completed.

NEFT online fund transfer to get faster from July 10 as settlement frequency doubles

The Reserve Bank of India has decided to reduce clearance time for online money transfers using the NEFT (National Electronic Funds Transfer) mechanism by increasing the settlement frequency to every half-an-hour, from the existing one hour.

Customers having savings or current account are eligible to avail NEFT/ RTGS service. Individuals who do not have a bank account can also deposit cash at the NEFT-enabled branches. However, such cash remittances will be restricted to a particular amount per transaction.

11 Benefits of NEFT to Corporates   

 Benefit NO 01:: Access to customers of 183 + Banks

Benefit NO 02:: Access to customers spread over the length and width of India via 1,37,000+ Bank Branches

Benefit NO 03:: Special facility to receive Credit Card dues. In case of payments towards Credit Card dues, customers have to key in the 16 Digit Credit Card Number as the Beneficiary's account number, the Beneficiary's account type as 52 and the beneficiary bank's IFSC will be the IFSC of the branch responsible for handing these card bill payments.

The card issuing banks have to designate a branch for accepting such payments and communicate the IFSC of the designated branch to their credit card customers.

Through this facility the card holders can plan the payment date of their credit card dues.  They can schedule future dated payments through their respective online banking tool.

Ban k of India Card Payment through NEFT

Benefit NO 04:: Centralized Customer Facilitation Centers facilitate quick resolution of queries.

Benefit NO 05:: Positive conformation by the Beneficiary Bank.

The main grouse of NEFT users was the non-availability of any conformation once the beneficiary has received the customers. They were multiple complaints from corporate that the beneficiaries did not receive the funds. In majority of the cases it was noticed that the funds were received by the beneficaries, however in the absence of any conformed messages, Banks were finding it difficult to respond to queries.  Hence, Reserve Bank of India introduced the concept of “Acknowledgement / Positive Confirmation by the Beneficiary Bank”. This step was welcomed by the Users and led to increase in the NEFT volumes.

How does the “Positive Conformation”, work?
The originator has to indicate his/her mobile number or email id in the NEFT Application while initiating the transaction. Usually, the customers’ mobile number and email id is picked up from the CBS Module.

·         After successfully crediting the Beneficiary's account, the beneficiary bank will send a Credit Acknowledgement message indicating “credited to customers' account” to the originating bank through NEFT Service Centre.

·         The originating banks after receiving the positive confirmation message from the beneficiary bank, initiates a mobile SMS or generate an e-mail to the originator to convey the fate of the transaction.

Basing on customization for corporate customers, this positive conformation message can be part of the MIS available in the corporate banking website.

Benefit NO 06:: Return Transactions are highlighted with special narration in the customers statement of account.  The originating bank has to provide the description “NEFT-Return” in the pass book / account statement of the originator whose NEFT transaction is returned.

Benefit NO 07:: Standard narration in Beneficiary’s statement of bank account . Another main grouse from the beneficiaries was improper narration in the statement of bank account. To minimize such complaints, Reserve Bank of India has advised all Banks to provide standard narration for NEFT Credits.

After crediting the account of the beneficiary, the beneficiary bank has to advise the beneficiary of the funds received.

The Account Statement / Pass Book entry or any online messaging system shall indicate briefly the source of funds as well.

 For this purpose, the mandatory field 6091 which contains the remitter's name shall be picked up for the source of credit and information contained shall be printed in the Account Statement / Pass Book.

Banks originating transactions shall ensure proper and meaningful details are provided in this field. Description of field 6091 is : 

M  6091  Sending customer a/c name    50x    Sender's account name

Benefit NO 08:: Almost Real time credit to Beneficiary account. The beneficiary branches have to make the payment to the beneficiaries within two hours of batch settlement time by crediting the specified account of the beneficiary or otherwise placing funds at the disposal of the beneficiary.

NEFT presently functions with a Batch+2 (B+2) return cycle. The B+2 return discipline requires  banks to afford credit to the beneficiaries' account immediately upon completion of a batch else return the transactions within two hours of completion of the batch settlement, if it is not possible to afford credits to the beneficiaries, for any reason.

Therefore, an inward credit message which is not returned within two hours from the time at which the payment instructions are processed at NEFT Centre (B+2) is treated to have been completed and credit afforded to the beneficiary's account by the beneficiary branch. It is, therefore, vital that banks systems are geared to credit within 2 hours of the batch or are re-transmitted back as return NEFT transactions in the immediate next batch itself.

Benefit NO 09:: Corporates can request their Banks to customize MIS, introduce additional filters before a NEFT credit is transmitted. The concept of virtual accounts is very popular amongst Corporates.

Benefit NO 10:: Reduce the reconciliation time from few working days to few hours.

Benefit NO 11:: Be a partner of Reserve Banks of India ‘LessCash’ Mission.

Additional Reading:

01 _ Kotak Life Insurance – Payment of Premium through NEFT
Make premium payments through your bank account using National Electronic Fund Transfer (NEFT). Log into your Net Banking, select the option NEFT transfer and enter the below mentioned details:
Beneficiary account -  99800KLIFExxxxxxxx
(The number after KLIFE would be your 8 digit Policy Number)
For example if your policy no is 00921500, the beneficiary account would be 99800KLIFE00921500
If your Policy No is less than 8 digits, please add requisite number of zeroes before the Policy No
Read more at Premium Payment Options


03 _ Optimising Commissions and Payout Mechanism For G2P Payments Under Electronic and Direct Benefit Transfer

04 _ Piloting Basic Income Transfers in Madhya Pradesh,India

Sunday, April 23, 2017

Tender Document for Supply of IT Manpower for PFMS

          To harness the complete capabilities of PFMS throughout the country, Government of India through Controller General of Accounts (CGA) is inviting tenders for placement of 120 IT Manpower for development and implementation of various modules of web enabled software and application portal of PFMs.

          The Controller General of Accounts, Ministry of Finance was given the mandate to move the funds payment to the respective implementing agencies and beneficiaries from paper-based to digital based.

The outcome of the mandate was CPSMS, which at a later date transformed to PFMS.

PFMS is a web-based online transaction system for fund management and e-payment to implementing agencies and beneficiaries.

The primary objective of PFMS is to establish an efficient fund flow system and expenditure network.

PFMS also provides various stakeholders with a reliable and meaningful management information system and an effective decision support system.

The following numbers show the success of PFMS across the country.

Total number of schemes:   CS – 679; CASP – 104

Total Implementing Agencies:        17.88 lakhs

Interface with Banks: PSBs (26), RRBs (50), PrSBs(10),Coop (2) RBI, India Post
FY 2015-16 3.02 lakh sanctions:     Rs4.09 lakh crore

Payments processed per day 2015-16:       >7 lakh
                                     2016-17:  >15 lakh

Average log-in on website – 20,000 per day

Payments are made though following routes:     
§  ABPS & NACH of NPCI for DBT payments     
§  NEFT for PAO payments    

§  RBI route for IGAA/IAAA

PFMS primarily supports Central Government Schemes; however it extends its expertise to State Governments too.


Friday, April 14, 2017

Kerala Gramin Bank – Kerala’s Own Bank unveils ‘DiGi KGB’ Selfie APP

          KGB with 602 branches spread over 14 Kerala districts is slowly spreading the Joy of Safe Banking across Kerala.

          KGB has taken a massive leap into digital banking with the launch of DiGi KGB in the first week of April 2017.

          You can download this App from Playstore. This is first Selfie APP launched by any RRB in India.

          The complete list of Regional Rural Banks can be viewed here

Kerala Gramin Bank (KGB) is a Regional Rural Bank (RRB) formed on 08.07.2013. The bank was formed by amalgamating the two RRBs of Kerala namely South Malabar Gramin Bank and North Malabar Gramin Bank.

The head office of Kerala Gramin Bank is at Malappuram and the sponsor bank is Canara Bank.

Kerala Gramin Bank is the largest Regional Rural Bank in the country with a total business of above Rs. 26,800 Crore and a network of 600 branches spread all over Kerala, serviced by a dedicated team of 3,500 plus staff members.

DiGi KGB is a selfie account opening and m-passbook application that is offered by Kerala Gramin bank. It is a light weight, robust and highly informative app that enables the user to create savings bank account instantly. It also gives complete real time information about all the accounts of the customer.

Kerala Gramin bank is the first Regional Rural Bank in the country to launch a such an app.

The highlights of Digi KGB are:

1) Selfie Account Opening - Instantly open a Savings Bank account by uploading a selfie and images of AADHAAR

2) Mini statements, Balance Enquiry and Passbook of all the accounts, in real time, pertaining to the Customer KGB accounts

3) the ePassbook is locally stored in device, and once downloaded it can retrieved offline at any point of time.

4) Another unique feature is the provision for the account holder to update user remarks against passbook entries. This feature will enable faster reconciliation of the bank enteries and also encourage account holders to transact through DiGi KGB.

5) Customers can locate ATMs or KGB branches through ‘Locate Me’, GPS feature or by manual search option.

6) Standard Interest calculators for Fixed, Cumulative, Recurring Deposits.

7) Loan EMI calculator.

5 Points through which KGB can encourage potential customers  to become KGB customers via DiGi KGB

Point No 01) – Run conversion campaigns at its 600 plus branches

Point No 02) – Enable limited time free WiFi at its 600 plus branches for download of DiGi KGB App and become a KGB customer on the spot.

Point No 03) -  Offer Limited Time sign up bonus for potential customers to download  DiGi KGB App and sigh up for KGB accounts.

Point No 04) – Explore synergies with NPCI BHIM App especially from the rewards angle

Point No 05) – Highlight the DiGi KGB app on its webpage, as the same is still not highlighted on its webpage.

Another interesting App by Kerala Gramin Bank is “Little KGB”

The “Little KGB”, primary target are kids and the main purpose of “Little KGB”, is to inculcate banking and savings habit in children. KGB stands for "Kids Go Banking".

Today's children are more inclined to technology. Hence at Kerala Gramin Bank, Team KGB decided to embrace the medium of smart phone to reach out to children.

The chief character in “Little KGB”, is NOTEY,a naughty boy who becames a coin by the ire of a wizard. During his journey he meets children of different walks of life. He guides them to savings and guides them regarding the different benefits of banking.

Every story ends with some questions about the story. User needs to answer the simple questions to continue to the next story.

Little KGB is available in both Malayalam and English. In the near future, KGB Team along with OrisysIndia team plan to introduce more fun and frolic in the app in the days to come.

Sunday, April 2, 2017

11 Differentiators which Fino Payments Bank can adopt

          Fino Payments Bank has received the final ok from Reserve Bank of India. In the next couple of years, you will be able to see ‘Fino Payments Bank’, signboard.

          The Fino group has a number of key features which can be deployed to scale up volumes quickly.

These “11 Differentiators” will enable Fino Payments Bank to rise above the crowd.

Differentiator 01: Leverage Fino Bpay to attract customers around BPCL Outlets for digital transactions.  In July 2016, Fino Paytech entered into a strategic partnership with domestic oil major Bharat Petroleum Corporation Limited (BPCL), which acquired a 21% stake in Fino for ₹251 crore.
BPCL has 13,450+ fuel stations spread all over India. BPCL has 4,500+ LPG distributors, with 1500 exclusive rural distributors.
In fact, Fino Payments Bank should set up a separate vertical to digitise all transactions at BPCL outlets. This itself will provide the much needed CASA Balances to earn a decent float income.
The main advantages of BPCL Outlets are:
A)   Uninterrupted power supply
B)    Ease of ensuring uninterrupted network connectivity
C)    A safe atmosphere for customers to carry out banking related transactions
D)   Ease of getting premium space with minimal efforts

Differentiator 02:: Integrate Fino Bpay Wallet into BPCL Smart Drive App. BPCL launched its Smart Drive in 2016 with various features to encourage fuel users to search for a BPCL fuel station only.
Differentiator 03::: Quickly sign up merchants in and around BPCL Outlets on Fino Bpay. Open Current Accounts for the merchants and as and when the balances touches INR 1 lacs, initiate an auto transfer to the Merchants main bank account via NEFT/IMPS.
This will significantly reduce the cash usage at such merchants
Quote from Reserve Bank of India’s operating guidelines for Payment Banks
Bank deposits
(i) As provided in the current RBI directions, PBs can accept only savings and current deposits. The aggregate limit per customer shall not exceed INR100,000, as provided in the Licensing Guidelines. However, the RBI will have no objection to the PBs making arrangements with any other scheduled commercial bank / SFB, for amounts in excess of the prescribed limits, to be swept into an account opened for the customer at that bank. This arrangement should be activated with the prior written consent of the customer

Differentiator 04:::: Deploy mobile banking kiosks at local Haats in and around BPCL Rural outlets.

Differentiator 05::::: Tie up with Small Finance Banks for instant overdraft facility to its Fino BPay merchants. The overdraft can commence with a minimal amount and be scaled up based on the merchants cash-flows.

Alternatively, it can offer overdrafts through its  its own RBI registered NBFC-MFI, i.e Intrepid Finance & Leasing Pvt Ltd.

Differentiator 06:::::: Create Wi-Fi Hotspots in all its branches to enable its customers to transact digitally with minimum cost and high safety. Depending on the potential, it can deploy trained staff to assist customers to transact digitally.

In this area, Fino Paytech is already having experience i.e Assisted e-commerce model, an innovation under FINO Money started off with Snapdeal.

Differentiator 07::::::: Focus on national high-remittance corridors to increase the footfalls to its digital platform. Fino Payments Bank has already tied-up with Western Union to tap the lucrative remittance market.

Differentiator 08:::::::: Decide which is better -  High service fees, low volumes or – Low service fees, high volumes

Differentiator 09::::::::: Adopt local Government schools in and around BPCL outlets for Financial inclusion and financial literacy programs. This is a good way to promote brand value.

Differentiator 10:::::::::: Focus on Truck Drivers to attract customers into Fino Payments Bank fold

Differentiator 11::::::::::: Tap its massive 78 million customers for more differentiators

Link A) Fino Paytech to launch payment bank, targets high domestic remittance areas

Link B) Fino Paytech set to start payments bank ops from April

Link C) Fino BPay

Sunday, March 26, 2017

HipBar – India’s newest Mobile Wallet - For your nocturnal thrills, not your electricity bills

          I was just browsing through this Reserve Bank of India URL @  and this name caught my attention:-

“Hip Bar Private Limited”.

          Curious, I Googled ‘HipBar’, and got these results

This innovation can be directly attributed to Government of India’s thrust on Safe Digital Transactions. With digitisation picking up, innovators are looking forward to rollout specialised Mobile Wallets.  HipBar Mobile Wallet is an early entrant in this space.

          HipBar has gone through the whole process to become a semi-closed Pre-Paid Wallet and be governed by the Payments & Settlements Act of 2007

          Semi-Closed  PrePaid Instruments facilitate CashLess transactions amongst merchants part of the closed loop. These instruments do not permit cash withdrawal or redemption.

          As per the description on HipBar website, “HipBar is a mobile wallet exclusive for drinks (We don't like using the 'B' word). Explore an assortment of drinks and experiences from your favourite watering holes and liquor stores in the city. Pre-pay for the drinks (at special rates) through the app and stock 'em in your very own Bar On The Cloud™. Happy Stocking !”

Operating concept::

01)  HipBar invites Watering Holes management to sign-up for HipBar Wallet and display their merchandise.

02) HipBar also invites general public to download HipBar App and reserve the merchandise displayed by the participating merchants.

03) Registered consumers of HipBar can redeem their purchases as and when they visit the respective Watering Holes.

04) No, door delivery of Drinks is not on the immediate agenda, as door delivery of drinks is not yet legally permitted.

HipBar has just started and is gaining traction day-by-day.

          The HipBar App is attracting mixed reviews. The common thread amongst the reviews is on the limited choice!!

          The concept of HipBar was formally unveiled in October 2015 by Prasanna Natarajan, founder of Hipbar .

          Read this article on HipBar @



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