National Electronics Fund Transfer (NEFT) – India's Retail ePayments System working overtime on 31/03/2012 !!! Wanna have a piece of the action?

Yes, it's first time, that the NEFT Settlement timings have been extended. Normally, the RTGS cut-off timings are extended depending on the requirements.

But, for the first time on 31/03/2012, NEFT will have the entire gamut of 11 batches. Normally, on Saturday's, there are only 4 batches I.e 9.00am, 10.00am, 11.00am and 12 noon.

However, on 31/03/2012, there will be the complete 11 Batches ie.

1. 9.00hrs
2. 10.00hrs
3. 11.00hrs
4. 12.00noon
5. 13.00hrs
6. 14.00hrs
7. 15.00hrs
8. 16.00hrs
9. 17.00hrs
10. 18.00hrs
11. 19.00hrs

Banks should ensure that the 'Returns', if any should be completed on the same day I.e 31/03/2012, otherwise the customers will get back the funds only after 2 days I.e 03/04/2012.

Maximum Returns settlement on the same day, will boost the customer's confidence in NEFT, and encourage bank customer's to migrate to ePayments.

Bank customer’s too need to be careful, and double-check the account number they are transferring too, so that the funds transfer goes on without any hitches.

Yes, it is up to the customer's, to make the most of the extended NEFT settlement timings.

RBI releases Draft Guidelines for White Label Automated Teller Machines (WLAs) in India.

Q) What are White Label ATM's?

Ans) Do not worry, their will be labels on the ATM's stating the owner. The only difference is that the Owner will not be a Bank but non-bank entities.

Traditionally, Banks are owners of ATM's, but ATM's owned by non-bank entities are referred to as the White Label ATM's.

A a white label ATM is owned, run and maintained by a third-party service provider. There has a demand in India for introduction of White Label ATM's, as it was felt that this would speed up the ATM penetration in India, and reduce the load on the Banks.

The number of ATM's in Urban India is increasing day by day, but the same cannot be said in rural interiors.

Hence, to encourage non-bank entities to enter the ATM arena, Reserve Bank of India, has issued Draft Guidelines for White Label Automated Teller Machines (WLAs).

The top 20 highlights of this draft guidelines are:

1. Views/Comments by the public can be sent to Reserve Bank of India before 06/03/2012.
   
   
2. The views/comments can be sent by snail mail to the Chief General Manager, Reserve Bank of India, Department of Payment & Settlement Systems, Central Office, 14h floor, Central Office Building, Shahid Bhagat Singh Marg, Mumbai -400001 or can be emailed.
   
   
3. The interested Non-bank entities proposing to set up WLAs have to make an application to RBI for seeking authorization under the Payment and Settlement Systems Act 2007.
   
   
4. Such entities should have a minimum net worth of Rs. 100 crore at the time of making the application and on a continuing basis after issue of the requisite authorization.
   
   
5. To ensure that the ATM's are not concentrated only in Tier I & II centers, there will be annual targets in terms of the ratio of WLA between Tier I &II and Tier III-VI centers. These targets will be stipulated by Reserve Bank of India.
   
   
6. Initially, only the Cards issued by banks would be permitted to be used at the WLAs.
   
   
7. Cash Deposits, as of now, will not be permitted.
   
   
8. The WLA Operator will be the "acquirer" for all transactions at the WLA and earn his fee accordingly.
   
   
9. To decrease his operating costs, the WLA Operator would be permitted to earn extra revenue through advertisement and by offering value added services. Naturazlly, such advertisements would be subject to Advertising Standards Council of India (ASCI) codes and other regulations. The other regulations might be that there should no advertisement between the keying of the Password and disbursement of the cash.
   
   
10. Regulatory guidelines relating to compensation for failed ATM transactions would apply to transactions at WLAs.
    
    
11. Prior Authorization of RBI under the Payment and Settlement Systems Act, 2007, is required by the WLA Operator, to commence its operations.
    
    
12. Each WLA Operator shall have one “Sponsor Bank” , who will serve as the Settlement Bank for the settlement of all the service transactions at the WLAs. The Sponsor Bank should be a member of one of the ATM networks authorized by the RBI and also be a member of the RTGS.
    
    
13. Cash Management of the WLAs shall be entrusted to the Sponsor Bank, who may have necessary arrangements in this regard with other banks for servicing cash requirements at various places. At no point of time, the WLA Operator or his agents shall have access to the cash at the WLAs.
    
    
14. Settlement of all the transactions at the ATMs shall be done only in the books of the Sponsor Bank through the ATM Network with whom the WLA Operator has established connectivity.
    
    
15. Maintenance and servicing of the WLAs shall be the sole responsibility of the WLA Operator.
    
    
16. Customer Grievance Redressal : The primary responsibility to redress grievance of customers relating to failed ATM transactions will vest with the Issuing Bank,. However, the Sponsor Bank will provide necessary support in this regard, including making available relevant records and information, to the Issuing Bank. For this purpose, the Sponsor Bank should have necessary arrangement with the WLA Operator.
    
    
17. The extant directives of the RBI on the time-lines for resolution of complaints of failed ATM transactions would also apply to transactions at the WLAs. For delay in resolution of such complaints attributable to the Sponsor Bank or the WLA Operator resulting in payment of penalty to the customer by the Issuing Bank in terms of the directives of RBI, the Issuing Bank shall be compensated by the Sponsor Bank. The Sponsor Bank may have appropriate agreements with the WLA Operator for recovery of such amounts.
    
    
18. ATM Network Operators will offer direct connectivity to the WLA Operator to facilitate transactions at the WLA and the settlement thereof after seeking requisite approvals from the RBI.
    
    
19. The above step bring the WLA Operator under the ambit of the Network’s Operating Guidelines and the Dispute Resolution Mechanism put in place in accordance with the extant directives of the Reserve Bank of India.
    
    
20. A Tripartite Service Level Agreement between 01) The ATM Network Operator, 02) the WLA Operator and 03) the Sponsor Bank will be requied to address issues relating to inter-bank settlement of the transactions at the WLAs and settlement of customer complaints relating to failed ATM transactions. The SLAs should clearly spell out the role of each party.

To reduce the instances of counterfeit currency entering the system, the cash handling responsibility is of the Sponsor Bank. RBI is clear that at no point of time, the WLA operator or his agents, shall have access to the cash at the WLAs.

Internationally, retailers that own white label ATMs, and not banks, load cash into the machines.