Payment and Settlement Systems - Vision 2009-12 - Part 1

Payment and Settlement Systems  - Vision 2009-12

Annual Policy Statement for the Year 2010-11

Part 1

	Policy Stance	What is there in it
1	Membership to the Committee on Payment and Settlement Systems	·        India was included as one among 9 other countries for The Committee on Payment and Settlement Systems (CPSS), constituted under the aegis of the Bank for International Settlements (BIS) ·        The Reserve Bank is also represented on three Working Groups of the CPSS
	Why is this required?	How it will impact?
	·        This will aid in developing a robust payments settlement system, which will benefit the economy as well as the common man. ·	·        Please visit my earlier post on the CPSS membership ·        http://prashantnepayments.blogspot.com/search/label/CPSS ·        This 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.

Quoted from Investopedia

 

Committee On Payment And Settlement Systems - CPSS

What Does Committee On Payment And Settlement Systems - CPSS Mean?
A committee made up of the central banks of G10 countries that monitors developments in payment, settlement and clearing systems in an attempt to contribute to efficient payment and settlement systems, and build strong market infrastructure. The CPSS was created in 1990, and its secretariat is hosted by the Bank for International Settlements.

Investopedia explains Committee On Payment And Settlement Systems - CPSS
The Committee on Payment and Settlement Systems undertakes its work through specific studies by working groups as required, and publishes reports on its findings. The committee also extends its work outside of the G10 countries by creating relationships with the central banks in many emerging market economies.

Unquoted

Handling of Cheque Returns under Cheque Truncation Process - CTS

Handling of Cheque Returns under Cheque Truncation Process - CTS

In simple terms, Cheque Truncation System, is ”Once deposited, the cheque is scanned and its electronic image transmitted through the entire clearing cycle, instead of the physical cheque itself.

The physical cheques are retained with the collecting bank, instead of the paying bank.

The basic doubt that arises amongst the common man, is what happens when a Cheque is dishonored under CTS?

Hence in ideal conditions, once the Cheque is dishonored under CTS, an Image Return Document (IRD) is generated and sent to the payee.

In many countries, where the CTS has been fully implemented, this IRD is a legal substitute for the dishonored cheque.

However, in our country CTS is still only functional in Delhi (NCR). Hence, an IRD will not solve the purpose. Further, if IRD are issued in the present scenario, there will be chaos at the Banks customer’s centers and branches

To overcome this issue, a-via medium was found out, which was implemented in our country.

In Delhi (NCR), once the cheque is dishonored, under CTS, the collection bank, removes the physical cheque from its possession and hands over to the customer along with the cheque return memo.

As it is, now also the Returned/dishonored cheques are returned to the collection banker by the paying banker, for onward transmission to the customer.

Hence, the end process to the customer remains the same, irrespective of whether the cheque is transmitted physically or through CTS.

For the IRD to be acceptable in our country, it will take a very long time, may be two decades or so.

April 14th, 2010 - 14/04/2010 - RTGS/NEFT/ECS Closed

Today morning Reserve Bank of India, announced a Holiday on April 14th, 2010 - 14/04/2010 - RTGS/NEFT/ECS Closed. This is on account of Dr.Ambedkar Jayanti.


This holiday was a bit unexpected. Anyhow, as it is in the middle of the week/also month, there should not be much  impact on the RTGS/NEFT transactions.


It should be a welcome break for the respective Bank's RTGS/NEFT centralised operations team members.


Enjoy

Tit Bits - NEFT/RTGS Heavy Volumes expected on 03rd April 2010

Hi there,

NEFT/RTGS Heavy Volumes are expected on 03rd April 2010.


1st April and 2nd April 2010 were  NEFT/RTGS holidays and folks must have already executed the NEFT transactions through their Net Banking Module. All this transactions will be in the pipe-line and will hit the beneficiary bank in the first settlement of 9.00am or maximum by the 3rd settlement, i.e 11.am batch.


Apart from the transactions executed on the Net Banking, there will be a rush of regular transactions.
This will keep all the concerned personnel in the respective Banks, a bit busy.

Up-gradation of RTGS System to Windows 2008 - HCM Module

 This is in relation  to the Reserve Bank of India's Notification dt. 23/10/2009, regarding -- Up-gradation of RTGS System to Windows 2008 --

The link to my Post on the same is @

http://prashantnepayments.blogspot.com/2009/11/up-gradation-of-rtgs-system-to-windows.html

Today, Reserve Bank of India, DIT, vide. Notification  No RBI/ 2009-10/370

DIT (CO) Circular No. 7/09.63.08/2009-10 dt.March 30, 2010, has informed, that the process for finalisation of HSM(Hardware Security Module) has been completed.

The complete notification can be accessed @

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=5556&Mode=0

What is HSM(Hardware Security Module)?

As I am not an expert on this issues, I QUOTE from Wikepedia

A hardware security module (often abbreviated to HSM) is a type of secure cryptoprocessor targeted at managing digital keys, accelerating cryptoprocesses in terms of digital signings/second and for providing strong authentication to access critical keys for server applications. They are physical devices that traditionally come in the form of a plug-in card or an external TCP/IP security device that can be attached directly to the server or general purpose computer.

The goals of an HSM are 

(a) onboard secure generation, 

(b) onboard secure storage, 

(c) use of cryptographic and sensitive data material, 

(d) offloading application servers for complete asymmetric and symmetric cryptography. 

HSMs provide both logical and physical protection of these materials from non-authorized use and potential adversaries. In short, they protect high-value cryptographic keys.

UNQUOTE

The highlights of today's RBI-DIT Notification are

01) The rate for the new HSM is fixed.

02) A buy-back option also has been negotiated by RBI-DIT.

03) The AMC rate also has been negotiated.

04) A 1year warranty is also there.

05) The Migration Plan has to submitted by the Banks to RBI-DIT by 15th April, 2010

I personally feel, that as all the pricing details have been negotiated,  the Bank Approval authorities, should be able to clear the Budgets for this activity, without much discussion.

This makes life easier for all the concerned.

To me the best part, is the email link in the Notification. This reflects the customer-friendly face of RBI-DIT.