National Electronic Funds Transfer(NEFT) System-Business Continuity Plan

National Electronic Funds Transfer(NEFT) System-Business Continuity Plan

On 29^th July, 2009, Reserve Bank of India, DPSS, issued a Notification, (RBI/2009-10/108 DPSS (CO) EPPD No.192 / 04.03.02 / 2009-10 dated July 29, 2009), stressing on the need for Business Continuity Plan in National Electronic Funds Transfer (NEFT) System, of our country.

The complete Notification can be accessed at

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=5191&Mode=0

The tremendous growth in NEFT Transactions in our country, heightens   the need for a effective BCP for NEFT.

Business Continuity is the ability of a business to continue its operations with minimal disruption or downtime in the advent of natural or intentional disasters. BC begins with a plan that addresses all risks and secures systems that are vital to business operations.

A good BCP must factor in all the risks, and should ensure continued availability, reliability, and recoverability of resources. It should balance the costs of risk management with the opportunity cost of not taking appropriate action.

Till now, the BCP drills used take place IDBRT and RBI’s NEFT Back-up site. Now, Reserve Bank of India, desires that Banks too should be part of such drills, atleast once in a quarter.

Of course, the costs for back-up site should not discourage Banks, in having a effective BCP in place. Innovative strategies like sharing of resources, between Banks, can 01) Bring down costs 02) Ensure adequate Trained Staff at BCP Locations.

A good BCP can act as a motivator, for the common folk, to switch over to ePayments.   

Tit-Bits Committee on Payment and Settlement Systems broadens its membership

Committee on Payment and Settlement Systems broadens its membership

ON 24^th July, 2009, Reserve Bank of India India, joined the select club of Committee on Payment and Settlement Systems (CPSS).

CPSS is part of BIS (Bank for International Settlements)

The above step will enable our country, to be part of the latest developments in ePayments. At the same time, the experience-sharing with old and new members, will aid the Indian ePayments Players, to avoid the pit-falls, for a smooth ePayments ride.

New Members which joined CPSS on 24^th July, 2009 are the central banks of Australia, Brazil, China, India, Mexico, Russia, Saudi Arabia, South Africa and South Korea.

With its newest members, the CPSS now consists of representatives from Australia, Belgium, Brazil, Canada, China, the European Central Bank, France, Germany, Hong Kong SAR, India, Italy, Japan, Mexico, the Netherlands, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sweden, Switzerland, the United Kingdom and the United States.

The expansion will enhance the Committee’s ability to contribute to financial stability through improvements to the global payments and settlement infrastructure.

The expansion will also help the Committee keep oversight practices and standards in line with market developments and with increasing interdependencies among financial market infrastructures.

QUOTE

About the Committee on Payment and Settlement Systems

The CPSS serves as a forum for central banks to monitor and analyse developments in domestic payment, clearing and settlement systems as well as in cross-border and multicurrency settlement schemes. The chairman of the Committee is William C Dudley, President of the Federal Reserve Bank of New York. The CPSS secretariat is hosted by the BIS.

UNQUOTE

The ‘Red Book’, published by CPSS can said to be the most authoritative annual publication that provides data on payments and payment systems in a large set of industrial countries.

Increase in RTGS timings-Is it required

Increase in RTGS timings-Is it required

Banks may change timings if bourses extend trading

At present RTGS Session Time on week ends is 9.00am to 6.00pm, and than again 7.00pm to 7.30pm

However, the above timings may have to be revised if SEBI, decides to incrae the market hours of trading in exchanges. The Securities and Exchange Board of India had placed a discussion paper titled “Increase in market hours of trading in exchanges” on its Web site on March 19 for seeking public comments.

Mr Namo Narain Meena, Minister of State for Finance, told the Lok Sabha in a written reply, on 24^th July, 2009 that Banks and other financial institutions are likely to change their timings if the capital market regulator were to allow stock exchanges to extend their trading hours, the Lok Sabha was informed today.

At present, the longest RTGS Session time is in New Zealand, i.e 23 hours 30 minutes on week days.

Surprised, for confirmation just visit this link

http://www.emeap.org/emeapdb/upload\Publications\rtgs.pdf

However, it is to be seen, if there will be increase in customer session timings or only inter-bank session timings, or will the settlement sessions take place, with breaks in between.

August 1, 2009 – Your Online Transactions will be more secure

  

August 1, 2009 – Your Online Transactions will be more secure

August 1, 2009-The day when the RBI’s Notification regarding an additional level of authentication using information that is not visible on the card, for online credit and debit cards, has to be implemented.

Link to my earlier Post on this Notification is accessible at

http://prashantnepayments.blogspot.com/2009/02/revolutionary-security-features-credit.html

            However, in the last couple of week, articles have started to appear in the media, that the banking industry and card consumers are not yet ready for this feature. And, they are suggesting that Reserve Bank of India, defer the implementation date(01 Aug 2009).

            In my view, the Notification was issued in Feb2009, and 6 months is sufficient time, for the consumers to be made aware of the new rule.

This Notification must have been issued by RBI, after discussions with the stake-holders, and with an view to protect the interests of the customers, service providers.

            It is to be seen, if RBI’s defers the date or prefers the new rule to come into effect.

Let the new rule come into Effect

           

ePayments - Standard Helpdesk Contact Details of Participant Banks.

ePayments - Standard Helpdesk Contact Details of Participant Banks.

One of the reasons for the low volumes in ePayments in our country, is the lack of Helpdesk’s for ePayments in Banks.

The FAQ of Reserve Bank of India, only say that the customer

QUOTE

Q13. Whom do I can contact, in case of non-credit or delay in credit to the beneficiary account?

Ans Contact your bank / branch. If the issue is not resolved satisfactorily, the Customer Service Department of RBI may be contacted at -
The Chief General Manager,
Reserve Bank of India,
Customer Service Department,
1st Floor, Amar Building, Fort,
Mumbai - 400001
or send and email.

UNQUOTE

Nothing more, nothing else

As a customer, I will be interested in resolution of my query at the earliest, as money is involved.

A query on Search Engines, for RTGS Contact Details, does not generate uniform results.

Of course, majority of the Banks have Toll Free Customer Care Numbers, which try to resolve the customer’s query.

The idealistic situation is a Toll Free Number for ePayments.

An alternate approach is to standardize the email id’s of ePayments Helpdesk of Banks.

I suggest the following format,

--------------

ePayments-Helpdesk

Email id epaymentshelp@rest of address

Contact Phone Numbers

This information should be

01) Circulated amongst Bank’s Customers

02) Displayed in the Contact Us Link of the Banks website.

--------------

The above step will be a major comfort factor, to customers, to venture into ePayments.

This information will also aid RTGS/NEFT Member Banks, in resolution of their queries.

Trust Reserve Bank of India, DPSS, will shortly issue a Circular for Standard Helpdesk Contact Details.

eMagic-Withdraw Cash from POS(Point of Sales)

eMagic-Withdraw Cash from POS(Point of Sales)

A small notification by Reserve Bank of India-DPSS, has the magic to unleash the genie of ePayments in our country.

As a further step towards enhancing the customer convenience in using the plastic money, the Reserve Bank of India (RBI) has decided to permit cash withdrawals at point-of-sale (POS) terminals.

The complete Notification can be accessed at
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=5184&Mode=0

To enable the customers, Banks, System Integrators, and System Solution Providers, to stablise, RBI has for the time being allowed a maximum cash withdrawal of Rs1000/- from POS.
Once, all the players are comfortable, the amount might be enhanced.

The beauty of this concept is the facility is available irrespective of whether the card holder makes a purchase or not.
In majority of the countries, Cash withdrawal from POS is allowed only when purchases are made in the particular establishment.

Reserve Bank of India-DPSS by making its intention clear in the first Notification itself, reflects the maturity of the admired Institution.

In future posts, I will be analyze in detail, the impact of this astonishing notification.

Salaam R B I

ATM Related Complaints on the rise.

ATM Related Complaints on the rise.
A lot of ATM Related complaints, have been addressed to Reserve Bank of India, in the last couple of months.

The rise in complaints is directly proportional to the increase of ATM Transactions, due to the, No Transaction Fee Facility from 1st April, 2009.
Roughly, since April 2009, the volumes have risen by 400%. And, the technology to cope with such a huge rise is not yet in place.

It is strange, that Banks, Technology Providers, were unable to visualize the huge jump in transactions.
In my view, the following couple of factors could be the reason for the stupendous spike in volumes.
01) The Average Withdrawal per transaction has come down, since the transactions are free.
02) Consumers are still not yet adequately educated about the benefit of Debit Card Transactions rather than Cash Transactions. 40% of the Cash withdrawal, is spent on locations, where a Debit Card could be employed to close the deal.

Now, it is expected that matters will be less chaotic in by this year-end, when Banks/Technology Providers will resolve the issues.

However, Reserve Bank of India, acting on the Customer’s Complaints, has issued a series of Notifications, to make life easier for the Customers. The latest Notification, is regarding Payment of Penalty Fees, for delayed reimbursement of wrong debits to the customer’s transactions.
The Complete Notification can be accessed at

http://rbi.org.in/scripts/NotificationUser.aspx?Id=5177&Mode=0

The above Notification is timely, however my Wish List is, that each ATM Booth should display the following Information

ATM ID
Customer Care Number
Customer Care Email ID



The present ATM Transaction Slip, contains the ATM ID, and it would be wonderful, if the Customer Care Number and Customer Care Email ID are also printed on the Transaction Slip.
This will make life easier for both the customers and the bank staff.

GONE IN 30 SECONDS…
An ATM must do these steps in 30 secs to make the transaction valid
1. An SBI ATM card holder swipes his card at an ICICI Bank ATM
2. The ATM links to its own core banking network to verify if it is an ICICI card
3. On finding it is an SBI card, it transfers data to the SBI Bank switch
4. The SBI switch connects to its core banking network and processes the transaction
5. After verification, the SBI switch communicates with the ICICI Bank switch
6. Finally, ATM dispenses the cash to the customer

Andhra Bank- A Leading Public Sector Bank, trying to increase it’s pie of ePayments

Andhra Bank- A Leading Public Sector Bank, trying to increase it’s pie of ePayments

A good number of Public Sector Banks, are waking up to the immense possibilities of ePayments.

Andhra Bank is one such bank, the full text of this development can be accessed at

http://www.thehindubusinessline.com/2009/06/19/stories/2009061952450100.htm

Mr.Mathew Josheph, Deputy General Manager, Andhra Bank, feels that the transaction cost of ePayments as compared to normal banking is very less.

Andhra Bank, in my view, can increase it’s share of ePayments and also it’s CASA Base by -- Installing POS Terminals at APSRTC(Andhra Pradesh State Road Transport Corporation), Ticket Counters.

On an average, the cost of an Overnight Inter-State Ticket is Rs350/-, and 70% of the inter-state travellers are aware of Debit cards, and its benefits.

By installing POS Terminals, Andhra Bank can tap the float funds of APSRTC and also gain experience in marketing ePayments products.

Another untapped segment is the School/College Fees. This is a lucrative segement and again 60-70% parents are aware of the benefits of Debit Cards.

In fact, the above two segments are waiting to be captured by Banks for ePayments and the first-mover will have the last laugh.

Come On Andhra Bank------- You can lead the way for ePayments in Road Corporations and Education sector

Topic of the Week - 40th Anniversary of Bank’s Nationalization in our Country.

40^th Anniversary of Bank’s Nationalization in our Country.

Today(19^th July, 1969) is the 40^th Anniversary of Bank’s Nationalization in our Country.

Banking System in India is split between by nationalised banks, private sector banks and foreign banks.

The nationalisation of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective behind nationalisation was to spread banking infrastructure in rural areas and make available cheap finance to Indian farmers. Fourteen banks were nationalised in 1969. 14 Banks were nationalized in the first wave of nationalization. The list of the 14 banks are

01) Central Bank of India

02) Bank of Maharashtra

03) Dena Bank

04) Punjab National Bank

05) Syndicate Bank

06) Canara Bank

07) Indian Bank

08) Indian Overseas Bank

09) Bank of Baroda

10) Union Bank

11) Allahabad Bank

12) United Bank of India

13) UCO Bank

14) Bank of India

Before 1969, State Bank of India (SBI) was the only public sector bank in India. SBI was nationalised in 1955 under the SBI Act of 1955.
The second phase of nationalisation of Indian banks took place in the year 1980. Seven more banks were nationalised with deposits over 200 crores.

The above nationalization has had profound impact for our economy. As with every decision, there are pros and cons of nationlisation. But, in my view, the pros are more than the cons.

The early 90’s, with the advent of liberalization, private sector banks entered the banking scene.

ePayments as on date, are dominated by private/foreign banks, though the nationalized banks, are catching up.

ePayments-Easy and Efficient.