Tit-bits-RBI plans 24x7 remittance facility

Recent news articles, have focused on Reserve Bank of India’s plans for a Pan India 24 X 7 remittance facility.

Please find enclosed the said news articles. Reserve Bank of India’s plans should materialize by this year end.

Article 1

Complete Link is available at

http://www.thehindubusinessline.com/2009/06/11/stories/2009061151700600.htm

RBI plans 24x7 remittance facility

Our Bureau

Kolkata, June 10 To make fund transfers convenient, fast and more affordable for retail customers, the Reserve Bank of India plans to introduce 24x7 remittance facility called India Money Line, according to Mr Anup Raj, Manager (Systems), RBI.

“India Money Line will be on the lines of the National Electronic Fund Transfer (NEFT) scheme but will be much wider in scope and will work on a 24x7 basis to benefit customers,” Mr Raj told newspersons on the sidelines of a training programme on ‘Payments through RTGS and NEFT,’ organised by the Merchants’ Chamber of Commerce here on Wednesday.

NEFT is a nationwide system to facilitate transfer of funds from a bank branch to any other bank branch. A total of 52,427 branches across 89 banks were part of this NEFT system as on December 31, 2008, he pointed out.

The 24x7 remittance system being worked out by the RBI would be more or less similar to the one in countries such as Singapore, he said. “The idea has been floated and responses have been sought from the regional offices of the RBI. The final implementation will be based on the responses received,” he pointed out.

Electronic transactions were lot more cost effective as compared with paper-based transactions, he observed.

Article 2

Complete Link is available at

http://www.thehindubusinessline.com/2009/04/01/stories/2009040150621500.htm

Soon, money transfer through banks 24x7

Facility being created by National Payments Corporation.

A file picture of a State Bank ATM counter.

N.K. Kurup

Mumbai, March 31 Money transfer through banks in India will soon be possible 24 hours a day.

Picture this. Your parents, living in another city, need some cash to make an urgent hospital payment. You can send the money from your workplace or from home to their bank account even at midnight and they can withdraw it the next moment.

This facility will be available throughout the country in the next few months when the newly set up National Payments Corporation of India (NPCI) launches its retail money transfer facility.

Branded as “India money line”, the facility will enable bank account holders to transfer money anytime to any bank, anywhere in the country, said an official of NPCI.

The real-time money transfer facility is available even now, but the funds are credited to the beneficiary account only during banking hours. Money received after banking hours gets credited to the account only the next working day.

The new facility being created by NPCI, a non-profit entity promoted by banks according to Reserve Bank of India’s advice to take up the retail payment and settlement work, will overcome this problem, said the NPCI official.

Switching facility

How does it work? You can transfer the money from your bank account by mobile or net banking facility and the beneficiary account holder can withdraw it through an ATM. NPCI’s national switching facility helps process the transaction faster. It ensures automatic debit of funds from the sender’s account and credits the same to the beneficiary account, the official said.

There could be an upper limit for the amount which can be sent through this system. Each bank will have a settlement limit and the amount up to that extent will be available for automatic clearing. Since the facility is mainly meant for retail payment, there is no lower limit, the official said.

All bank branches with core-banking facility (having networked branches) will be able to offer the real-time money transfer facility. As of now, close to 80 per cent of the bank branches in the country are core-banking enabled.

Four services

NPCIL, incorporated in December 2008, started functioning from February. At its first board meeting last week, the corporation, set up under the Payment and Settlement Systems Act, decided to take up four lines of services to begin with: Real-time payment service, building a national financial switching facility, India Pay Card service and automated cheque clearing house.

The cheque clearing facilities run by the RBI will not be transferred to NPCI immediately as this was a promise given by the Finance Minister to the RBI employees union, which protested such a move fearing job losses.

However, Dr Duvvuri Subbarao, RBI Governor, recently said that operations of Electronic Clearing Service and the National Electronic Fund Transfer systems will eventually be transferred to NPCI.

Set up under the initiative of Indian Banks’ Association, NPCI, a section 25 company, initially has nine banks as shareholders — five public sector banks holding 51 per cent, two private sector banks and two foreign banks holding the balance.

Eventually, all banks operating in the country will be members of NPCI.

Spread the Joy of ePayments

'Self user creation facility' Union Bank launches new facility for internet banking users

'Self user creation facility' Union Bank launches new facility for internet banking users

A major step towards popularizing ePayments, has been taken by Union Bank of India on Saturday i.e., 06/06/2009.

'Self user creation facility' enables users of the Union Bank's internet banking services to generate their own password for internet banking.

The facility, the first to be offered by a public sector bank, enables first time users log in with their new chosen passwords within two days of submission of request

The process, powered by leading software major Infosys Technologies, enables those who are already using the Bank's internet banking facility to create their own passwords and start operations immediately without any waiting period.

To avail oneself of the facility, customers need to enter a few details in the link provided by the bank's website. Once these personal details are verified, the system enables the customer to create his own password.

The customer’s email and phone number have to be registered with the Bank, to avail the above facility. This is a security precaution.

Earlier, a customer had to send a request and wait for a fortnight to receive the password through post, which sometimes did not reach the customers. Non-receipt of the password through post is chiefly due to the details of the mailing address provided to the customers.

The customers could use this facility anytime, anywhere and free of charge.

However, Union Bank of India, as of date i.e 07/06/2009 7.54pm, has not updated this major achievement on its website. Union Bank over the last couple of years, has taken a conscious decision to be an innovator in the Banking Industry. This strategy seems to be paying off now.

What I notice, that banks in India, are still to appreciate the benefits of updating their websites, at the same time, a press release is issued. Indian customers are very tech-savvy, and prefer to access updated information on the Banks website.

The customers need be aware of the safety precautions, when using the new service provided by Union Bank of India.

Enjoy and spread the Magic of ePayments

A few simple safety precautions, are mentioned here

TIP 1: SAFE LOG ON / SAFE LOG OFF

· Never access your Internet banking website from a public computer (e.g. in a cyber cafe)

· Close all browser windows before logging on to Internet banking to protect your personal information from unauthorized access from another website.

· Always log off after using Internet banking service.

TIP 2: SAFEGUARD YOUR IDENTITY

• Use safe passwords that are:
  > different from your user IDs
  > easy to remember only by yourself
  > difficult to guess
  > a combination of letters and numbers of at least 6 characters.

• Never disclose your online passwords to anyone (including bank staff and the police) and do not record them anywhere. Contact your bank immediately if you believe your passwords have been compromised.
  
• Do not use the same password for other online services, e.g. e-mail or Internet access, or for other Internet banking accounts.
  
• Change your passwords regularly.
  
• Disable your browser's 'AutoComplete' function that remembers the data (including your online passwords) that you input. Refer to your browser's'Help' function for details.
  

TIP 3: SECURE YOUR COMPUTER

• Make sure you are using supported versions of OS and applications. Enable the auto-update feature to obtain and apply security patches regularly from trusted sources.
  
• Install Internet security software with anti-virus, anti-spyware and personal firewall features to perform real-time detection of new viruses, spyware and intrusions on your computer. Enable the auto-update feature to obtain the latest virus and spyware definition files.
  
• Do not download any freeware onto the computer that you use to access Internet banking.
  
• Do not share computers: if you must share, set your own password to block access to your accounts.
  
• Always disconnect from the Internet when you are not using it.

TIP 4: BE ALERT

• Check your bank balance and transactions regularly and notify your bank immediately if you discover any errors or unauthorised transactions.
  
• Be wary of opening unexpected emails with attachments, and never click on a hyperlink in a suspicious email.

Ø Never use hyperlinks in emails or Internet search engines to log on to Internet banking. Always type the address into your browser or bookmark the genuine website and use that to access your bank account.

Ø Never open an email attachment that contains a file ending with .exe, .pif, or .vbs as these are commonly used with viruses.

POS Terminals-Requisite for ePayments

POS Terminals-Requisite for ePayments

The success of Debit card depend on the presence of POS (Point of Sales) Terminals.

A point-of-sale (POS) terminal is a computerized replacement for a cash register. Much more complex than the cash registers of even just a few years ago, the POS system can include the ability to record and track customer orders, process credit and debit cards, connect to other systems in a network, and manage inventory.

POS terminals are deployed in retail establishments to enable customers to make payments through debit, credit or pre-paid cards.

Presently, the POS Terminals are mainly of Private Sector Banks. However, recently, Public Sector Banks too have entered the fray.

Union Bank of India and Corporation Bank, have firmed up major expansion plans in the POS Arena.

The Benefits to Bank, via a large POS Network are

01) Increase in Float Funds in current accounts, of the Merchant Establishments.

02) Commission on every transaction, executed on its POS Netowork.

03) Brand Boosting Image, amongst its existing and potential customers.

Currently, the POS Terminals are concentrated in Tier 1 cities. Real success will be achieved by Banks, who spread their POS Network, in Tier 2 and Tier 3 cities.

The Banks at the same time, should publicize the benefits of Debit Cards amongst their customers.

Benefits to Cardholders

• The card is very convenient as it eliminates the need to carry cash
• The cardholder does not need to visit the bank to load the card as the card gives access to his/her bank account
• Since it is PIN protected, it is safe as long as the cardholder does not compromise his/her PIN
• Cardholders can access cash not only from the ATMs but also from the PoS terminals at merchant outlets
• Cardholder can perform balance enquiry at PoS terminal
• Fast, real-time transaction speed.

• Bank access to all information transacted on the POS.
• Higher security for merchants.
• Takes services closer to Bank’s customers.
• Reduction of cash related risks.

However, to increase the safety levels of Debit Card usage, it is opined, that Banks issue separate ATM and Debit Cards. The main advantage of this separation is that incase of loss of card, the actual loss to the cardholder will be minimized.

Of course, the operating costs to the Banks will shoot up substantially. The above idea, can be implemented when Banks acquire issue large number of Debit/ATM Cards.

A separate post on Commissions/Transaction Fees on Debit Card Transactions will be dealt later.

Enjoy and Spread, the Magic of ePayments

!! Delays in Cheque Clearing-Switch over to ePayments!!

!! Delays in Cheque Clearing-Switch over to ePayments!!

Numerous complaints have been lodged by bank customers, with various regulators, complaining delay in Collection of Cheques.

During August 2006, a case was filed before National Consumer Disputes Redressal Commission, New Delhi (the Commission) under the Consumer Protection Act, 1986, inviting attention to the delays in cheque clearing and, specifically, to the issue of float in local and inter-city clearing. Admitted in public interest as Case No. 82 of 2006, the complaint had named Reserve Bank of India (the Bank) and all Scheduled Commercial Banks (the banks) as respondents and sought adequate compensation by way of interest for delay in collection.

A number of affidavits were filed by the Bank and by the banks at various points of time and the case was finally disposed off by the Commission on August 27, 2008, with the Commission observing that the Reserve Bank of India, with its wide range of powers under the Payment & Settlement Systems Act, 2007 would try to control the float, if any, arising due to delay in collection of outstation cheques. During the course of hearings, orders were passed by the Commission culminating in the final order on timeframe for collection of outstation cheques' which is available @ http://www.ncdrc.nic.in/CC820605.htm.

the Reserve Bank of India (RBI) has reiterated that banks must reframe their cheque collection policies (CCPs) covering local and outstation cheque collection as per the timeframe prescribed by the commission.

Reserve Bank of India, vide its Lr.Dt.02/06/2009, the guidelines advised vide its Lr.Dt.24/11/2008, be followed. Specifically, the Reserve Bank of India (RBI) has reiterated that banks must reframe their cheque collection policies (CCPs) covering local and outstation cheque collection as per the timeframe prescribed by the National Consumer Disputes Redressal commission.

The complete notification, can be accessed at http://rbidocs.rbi.org.in/rdocs/notification/PDFs/CIR020609.pdf

My appeal to all bank customers, is to switch over to ePayments, to avoid delays in receipt of the funds due to them.

Enjoy and Spread, the Magic of ePayments

Freedom Rewardz-State Bank Group’s Debit Card Rewards Program

Freedom Rewardz-State Bank Group’s Debit Card Rewards Program

Please refer my post, http://prashantnepayments.blogspot.com/2009_04_01_archive.html, wherein I had, forecasted that the new marketing mantra, for banks, will be Debit Card Incentives.

Well, State Bank Group, today kicked off the same, under the Brand Name-Freedom Rewardz.

State Bank of Group has released large advertisements, in leading newspapers.

However, as of now, i.e 7.37 IST, 31/05/2009, no message regarding Freedom Rewardz, is visible on the main page of State Bank of India website.

Trust State Bank Group will also advertise the -Freedom Rewardz Program, through Electronic Media also.

FreedomRewardz is a Rewards Program launched for State Bank Group Debit Card customers. FreedomRewardz, will help you to earn points whenever you choose to buy a product or pay for a service using your State Bank Group Debit Card.

I was expecting, a foreign to launch India’s first Debit Card Incentive Program. However, State Bank Group, has taken the lead, and no doubt, will reap the benefits of the first move.

Kudos to State Bank Group for daring to test new methods to attract and retain customers.