mShop - A new product by SBI Cards

SBI Card launches mShop

 On Friday, 20^th November, 2009 SBI Card launched a new Product named mShop.

SBI Card, the credit card service offering from the State Bank and GE Capital, launched mShop to enable its customers shop from over 100 merchants across the country, using their mobile phones.

mShop offers SBI Card customers the convenience of transacting anytime, anywhere, while ensuring complete security of their transactions, an SBI Card press release said.

More information on this new product can be accessed @

http://www.sbicard.com/sbi/ngpay-landing.jsp

The details of this Product i.e mShop are

01)                      Initially the product is available over 100 merchants.

02)                     The number of merchants will slowly be increased over a period of time.

03)                     The technology partner for mShop is ngPay.

04)                     SBI Cards has wisely said put a disclaimer stating that this product is made available by ngPay and accordingly SBI Cards is not responsible and disclaims any all liabilities that may arise out of usage of the service.

So folks it is left to your wisdom, whether to use this mShop or not !!!!!

Or maybe, this is a standard disclaimer clause, to protect SBI Cards from any complaints. 

Topice of the Week - eVoting for Corporates

eVoting for Corporates

A new Product has launched in the Electronic World. This Product is known as eVoting for Corporates.

The product is launched by CDSL Ventures Ltd (CVL), a wholly owned subsidiary of Central Depository Services (India) Ltd (CDSL).

This product enables shareholders to participate in the decision making process of companies and cast their votes on resolutions electronically.

The eVoting Product will   permit a company or its registrar to set up the schedule on the e-Voting website www.evotingindia.com and upload the resolutions and register of shareholders.

CVL would then generate and print a password on a pin mailer for each shareholder, which would be communicated to them along with the Notices of the resolutions.

 Shareholders can then access the e-Voting website and cast their votes at any time during the voting period at a place of their convenience.

More about this new product can be accessed @

http://www.thehindubusinessline.com/2009/11/18/stories/2009111851431000.htm

Is this Product legal in India?

Yes, this product is legal in India, as per Government of India, Ministry of Law, Justice and Company Affairs, Department of Company Affairs Notification No.G.S.R._337(E), Dated 10-05-2001.

This Notification can be accessed at

http://www.mca.gov.in/Ministry/notification/Notifications_2001/noti_10052001.html

            As a promoter of Safe ePayments, I am excited about this new product, as it will enable the shareholders to familiarize themselves with an Electronic Product. This familiarization will enable the shareholders to try ePayments too.

This product might aid Companies to aim for ePayment of Dividends too, which is a far better method than conventional Dividend Payments mode.

For more on ePayments of Dividends, drop in @

http://prashantnepayments.blogspot.com/2009/09/dividend-payouts-epayment-mode.html

Of course, this product is new, and am sure, in the next couple of years, any draw-backs in this product will be ironed out.

OLTAS - On Line Tax Accounting System.

OLTAS

What is OLTAS

OLTAS means On Line Tax Accounting System.

This is Income Tax Department's initiative to receive information and maintain records of tax paid through banks through online upload of challan details is named as OLTAS (Online Tax Accounting System).

Why was OLTAS needed?

The collection of government Taxes was done through Banks in a manual way. This procedure was cumber-some, time consuming and also error-prone. To overcome the shortcomings associated with Manual Collection of Taxes, The advisory Group on Tax Reforms under the Chairmanship of Dr. Vijay Kelkar had recommended networking of Income Tax Department, Banks and Reserve Bank of India to facilitate On-line Transmission of details regarding tax collection/refund, etc. between banks and offices of Income Tax Department and also RBI for settlement of funds.

To facilitate this Online Process, a Core Group from Reserve Bank of India, Indian Banks Association, Central Board of Direct Taxes, Controller of Accounts worked together, and as an outcome of this deliberations, OLTAS was born.

The implementation of OLTAS was divided into three pilot phases, to acquaint all the participants about the process flow, between June 2003 and April 2004:-

Originally, the Pilot on OLTAS was confined only to the corporate tax payers, however, after 15th February 2004, the project covered both corporate and individual tax payers and finally, from 1st June 2004, the Pilot went All-India, covering all the authorized branches of the 32 participating banks all over the country.

Originally, the OLTAS Project covered only the tax information data. The funds collected by the bank branches followed the manual mode and was reconciled with the paper scrolls sent to the Zonal Accounts Office. However, from 1st April 2005, the OLTAS Pilot Project was commercially rolled out and the settlement of funds was also migrated to on-line mode. Thus, from 1st April 2005, the banks had to reconcile funds collected on a day to day basis with the electronic data reported by banks to TIN.

What is TIN?

TIN stands for Tax Information Network. TIN has been established by National Securities Depository Ltd., to manage the Challan Information’s and acts as a link between the Banks and the Tax Department.

Only Bank Branches with access to OLTAS Software can collect the Taxes. The Banks depending on the business profile installed the OLTAS Software in the Branches.

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However, over a period of time, many banks started to offer a link to OLTAS through their Net Banking Site too. In fact, this facility assisted the growth of ePayments in our country. As the corporate and individuals started using the OLTAS through the Net Banking Sites, they gained confidence in the Net Banking, which encouraged them to try other forms of ePayments viz RTGS, NEFT, POS Terminals.

e-Payment facilitates payment of direct taxes online by taxpayers. To avail of this facility the taxpayer is required to have a net-banking account with any of the banks listed below, which are the only banks are offering this facility at present i.e 01/11/2009.

Account Holders of

Allahabad Bank

Andhra Bank

Axis Bank

Bank of Baroda

Bank of India

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

HDFC Bank

ICICI Bank

IDBI Bank

Indian Bank

Indian Overseas Bank

Jammu & Kashmir Bank

Oriental Bank of Commerce

Punjab National Bank

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Indore

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

Vijaya Bank

                 

Procedure for e-payment of Taxes:-

1.     To pay taxes online the taxpayer will select the relevant challan i.e. ITNS 280, ITNS 281, ITNS 282 or ITNS 283, as applicable.

2.     Enter its PAN / TAN as applicable. There will be an online check on the validity of the PAN / TAN entered.

3.    If PAN/ TAN is valid the taxpayer will be allowed to fill up other challan details like accounting head under which payment is made, name and address of TAN and also select the bank through which payment is to be made, etc.

4.    On submission of data entered a confirmation screen will be displayed. If the taxpayer confirms the data entered in the challan, it will be directed to the net-banking site of the bank.

5.     The taxpayer will login to the net-banking site with the user id/ password provided by the bank for net-banking purpose and enters payment details at the bank site.

6.    On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.

Abbreviations:-

OLTAS – On Line Tax Accounting System.

TIN – Tax Information Network.

CIN – Challan Identification Number.

ZOA – Zonal Accounts Office.

 

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What are Government Receipts?

  

What are Government Receipts?

After the Reserve Bank of India, Notification on 17^th November, 2009, regarding Government Receipts in RTGS Systems, the question now is what are Government Receipts?

I will try to make this subject as simple and brief as possible.

One good source is the FAQ’s of Reserve Bank of India’s website.

The FAQ’s can be accessed at

http://www.rbi.org.in/Scripts/FAQView.aspx?Id=61

        In simple terms, Government has to receive to itself, on various accounts viz: sales tax, excise duty, professional tax, land revenue etc. from various private institutions, individuals

Hence, the Government has to maintain Bank Accounts to enable people to deposit the Dues to Government. Government too has to maintain Bank Accounts as; it cannot have a different collection channel.

The Central/State Government’s have authorized to Reserve Bank of India, to undertake the receipts and payments of the Central/State Governments and to carry out the exchange, remittance and other banking operations.

Reserve Bank of India, discharges this duty through

01) A network comprising the Public Account Departments of RBI

02)                     Branches of Agency Banks appointed under Section 45 of the RBI Act. At present all the public sector banks and private sector banks viz. ICICI Bank Ltd., HDFC Bank Ltd.and UTI Bank Ltd. act as RBI's agents. Only authorised branches of Agency banks can conduct Govt. business.

Each Credit to a government bank account should be accompanied by a supporting Challan, for proper accounting in the Government Books.

Challan is a standard form prescribed for government payments.

 This format is designed for collection of government payments viz. sales tax, excise duty, professional tax, land revenue etc. from various private institutions, individuals from time to time and is implemented by government departments as per the requirements.

The payment of challan is accepted in the authorized bank branches, only and one has to go in person and stand in long queues if required to make the payment.

Of course some Banks are now offering this facility through their Internet Banking Facility.

The Challan has to be accompanied by Demand Draft/Pay Order/Cash. Please note that RTGS/NEFT is not yet compatible with this Challans.

However, credits to Government Bank Accounts via RTGS/NEFT have started to flow, in customer mode.

The Receiving Bank was having issues to credit to Government Accounts as the RTGS Customer Transaction Message format does not capture the Challan fields.

Hence, the Beneficiary Bank’s, have no other option than RETURN back the funds.

As the number of such RTGS transactions were increasing, Reserve Bank of India, decided to step in, and issue guidelines.

This guidelines were issued vide Notification No: - RBI/2009-10/226 DPSS (CO) RTGS No.991/04.04.002/2009 – 2010 dt. November 17, 2009

  

As the guidelines prescribe bilateral arrangements between the Sending and Receiving Bank, I feel, Reserve Bank, for the present desires to discourage routing of Credits to Government Bank Accounts through RTGS. 

Of course, this is only a temporary phenomenon, and there will be public pressure, to make the necessary changes in RTGS formats to accept Government Receipts.

Dealing with incidents of frequent dishonour of cheques

  

Dealing with incidents of frequent dishonour of cheques

  

Reserve Bank of Inda, Department of Banking Operations and Development, vide paragraph 15.4 of our Master Circular DBOD.No.Leg.BC.9/ 09.07.006/2009-10 dated July 1, 2009 on Customer Service has advised Banks to take certain steps for dealing with incidents of frequent dishonour of cheques of Rs. 1 crore and above.

Now vide  Lr.No. RBI/2009-10/213 DBOD.No.Leg.BC.59 /09.07.005/2009-10, dt November 9, 2009, addressed to All Scheduled Commercial Banks (Excluding RRBs), has advised Banks to have a Board approved policy for dealing with frequent dishonor of cheques of value of less than Rs. 1 crore.  Reserve Bank of India is clear that this policy should also deal with matters relating to frequent dishonor of ECS mandates.

This complete Notification can be accessed @

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=5353&Mode=0

Basically, Post Dated Cheques/ECS Debit Mandates issued for Loan Re-payments, cannot be shifted to ePayments (RTGS or NEFT)

In case customers issue cheques to Government Agencies, Utility Providers, customers ensure sufficient funds are available in the account, to clear such cheques.

However, Banks and other stake-holders should explore if Cheques issued for other than the above mentioned two categories, can be shifted to ePayments. 

RTGS/NEFT Transactions are executed by Banks only if Balance is there in the account to DEBIT. Hence, there will no question of DISHONOUR !!!

This will reduce the number of frequent dishonor of cheques, leading to few cases to deal with, which in turn will increase the operational efficiency of the Banks.