Budget 2013-14 – Benefits for Safe ePayments

            The following points are of great interest to Safe ePayments Motivators.

            In the medium run, these new initiatives announced by Mr.P.Chidambaram, Finance Minister, will encourage Indian industry and bank customers to adopt more and more ePayments modes in their daily routine.

01) 11 lakh beneficiaries have received benefit under Direct Benefit Transfer scheme. Direct Benefit Transfer (DBT) Scheme to be rolled out throughout the country during the term of UPA Government: - The more beneficiaries experience the joy of Safe ePayments, the more they will spread the word of Safe ePayments.

02)Rs 532 crore to make post offices part of core banking: - At present, Post Office Saving Bank is not part of electronic payment channels viz ATMs,NEFT,RTGS,IMPS etc. The core banking solution is the first step to integrate Post Office Saving Bank into mainstream eBanking Channel.

03)Tax credit of Rs. 2,000 for income upto Rs. 5 lakh: - This will encourage people to file their tax-returns irrespective of whether their tax liability. This is a step to ensure more and more countrymen obtain PAN.

04)First home loan from a bank or housing finance corporation upto Rs. 25 lakh entitled to additional deduction of interest upto Rs. 1 lakh: The disbursements to real-industry should be via eMode only.

05)Insurance companies can now open branches in Tier 2 cities and below without prior approval. All towns of India with a population of 10000 or more will have an LIC branch and one other public sector insurance company:- All Insurance companies have adopted ePayments in their daily routine. The above initiative will deepen the reach of ePayments.

06)All public-sector banks have assured the Finance Minister that they will all have ATMs in their branch areas by 2014.

07)India's first women's bank as a PSU proposed, Rs. 1,000 crore working capital announced

08)The country has moved a step towards uniform know-your-customer (KYC) norms for different investments. The Union Budget has proposed the use of bank KYC for buying insurance as well. This will make the process for purchase of insurance simpler

            

Aadhaar Payment Bridge System – The heart of GOI’s DCT.

            The APBS was conceptualized by NPCI in the mid 2011, with Reserve Bank of India, according permission to launch it in October 2011. Bank of India was the first bank to go live on APBS, followed by ICICI Bank and Union Bank of India.

            The testing field was the state of Jharkhand.

APBS was built around the Aadhaar Numbers being issued by UIDAI. The Aadhaar number is the common link between the Government Departments and the beneficiary.

The core idea of APBS is to ensure that the Aadhaar number holder receives his/her funds from the Government in the respective bank account. The Aadhaar number holder need not inform all the government departments in case of the change of his bank account number.

The mapping between the bank account number and the Aadhaar number would be via the ‘Mapper Module’, built in APBS.   

In the long run, this approach would result in a) minimal transaction cost b) reduced TAT c) minimal customer complaints d) minimal recon issues.

The present process flow is as follows: -

01) The government departments submit the transaction files to NPCI via their Sponsor Bank between 10.30am to 12.30pm.

02)Around 2.00pm, NPCI switches the transactions to the recipient banks, to the banks as mapped on the Aadhaar Mapper which is a part of APBS.

03)By 3.00pm the beneficiary banks would have passed on the credits to the respective beneficiary account holders.

04)By 5.00pm, the beneficiary banks intimate NPCI the status of the individual transactions i.e successful or rejected.

05)By 7.00pm, NPCI updates the statuses to the Sponsor Banks.

All the above happens on the same day. Initially there is only one payment cycle. Yes, the APBS can handle multiple payment cycle, it is up to the sponsor banks and the government departments to demand more payment cycle, in case of surge in the volumes.