ECCS – NPCI Circular

ECCS – NPCI Circular

With 1000+ Clearing Houses in India, it is a herculean task, to migrate all the Clearing Houses to ECCS.

ECCS is picking up tempo.

The NPCI Cir. No. is NPCI/ ECCS/2011-12/0807   dt.07/07/2011 and is addressed to The Chairman and Managing Director/Chief Executive Officer of All Scheduled Commercial Banks including RRBs/Urban 

Cooperative Banks State Co-operative Banks/ District Co-operative Banks

The original ECCS circular states that Non-MICR centres will be migrated from the present MMBC to ECCS. MMBC is also present in MICR centres, wherein the ‘Return’, Clearing is conducted on MMBC. Hence, even in 

MICR centres, ECCS has to be introduced.

During the last couple of months, the ECCS awareness is picking up. This is reflected in the increase in the search strings for ECCS in Google and other search engines.

 Originally, it was envisaged that the complete roll-out Pan India, should be over by 30^th September, 2011. Yes, this was an ambitious target. A mid course survey in July 11, by the concerned stake holders i.e NPCI, showed that the progress was not on the intended timelines.

To speedup the roll-out process, NPCI has released 3 Annexures.

 Annexure  I  contain a small write up on ECCS.

 Annexure-II lists out the requirements for a Clearing House Managing Bank

Annexure-II lists the requirements for participation in ECCS for a member bank in the Clearing House  

The best part of the Annexure is the copy of the Purchase Order placed by Manmad Banker’s Clearing House.

NPCI has advised clearing houses to place a collective purchase order on behalf of the Clearing House members with Image Infosystems, the Vendor  of ECCS.

A single purchase order, by the respective clearing houses is a better option, than individual Banks placing the Purchase Order with the Vendor.  

The logistics and the receivable’s are otherwise un-manageable.

The payment to the Vendor is to be released only when ECCS goes live. This minimizes the risks to individual bank’s as the Clearing House can take a collective decision. 

Retail Electronic Payment Systems – NEFT / NECS / RECS / ECS – Levy of Processing Charges

Retail Electronic Payment Systems – NEFT / NECS / RECS / ECS – Levy of Processing Charges

The era of free lunch is over. As the volumes in Retail Electronic Payment Systems are zooming up, the various participants are looking forward to reduce their operating costs.

So far, the RBI had been waiving processing charges for retail electronic payment products (NEFT, NECS, RECS and ECS) since the year 2006 in order to promote the usage of these systems.

The last waiver by Reserve Bank of India was valid up to March 31, 2011. 

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6453&Mode=0

Today, vide RBI Notification No RBI/2010-11/559,DPSS (CO) EPPD No. /2649/ 04.03.01/2010-11, RBI has permitted   Clearing Houses / processing centers to levy charges on the originating banks as under :-

·        25 paise (exclusive of service tax) for every outward transaction

·        25 paise (exclusive of service tax) for every return transaction

The compensation to destination banks, to be paid by the originating banks is also finalized as under:

·        25 paise (exclusive of service tax) for every credit transaction

·        50 paise (exclusive of service tax) for every debit transaction

RBI has made it clear that the participant banks are not permitted to pass on these charges to customers.

 These charges will be applicable from July 01, 2011.

RTGS is not under Retail Electronic Payment Product; hence the charges for RTGS transactions are not covered under this notification.

These charges should encourage new players to set up processing centers and also enable the existing Clearing Houses / processing centers, to strength their infrastructure.

Of course, customers would not prefer to revert back to paper based from electronic mode, due to these charges.  

RBI - Report on Securing Card Present Transaction - Public Comments

RBI - Report on Securing Card Present Transaction - Public Comments

Reserve Bank of India, DPSS has turned its attention to ‘secure transactions’, of ‘cards present’.

Here cards might be Credit Cards/Debit Cards/ATM Cards/ ATM cum Debit Cards

To increase the security levels for ‘card present transactions’, RBI had constituted a working group in March 2011, to look into all the related issues implementing the security of card transactions in India and suggesting a road map for migration.

The Working Group had members drawn from Banks and Card Companies and also NPCI representatives.

The Working Group in a short span of 8 weeks, submitted its report today i.e 02/06/2011

The Working Group members have to be praised for their perseverance to submit the report within a short period of 8 weeks.

RBI has invited comments to be emailed or forwarded to them, by 30^th June 2, 2011

The Working Group Report can be accessed @ http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=634

As the electronic money market grows rapidly, it is important that the fraudulent transactions are kept to the minimum, to ensure that the participant’s profitability is not hurt.

It can be noted that the electronic money usage is not only spreading in the urban area, but also spreading in the rural area. The advantages of electronic money are plenty for the rural folks to be attracted towards them.

Over the next month, the report will be discussed thread-bare not only on the internet but also in the print media. 

The more it is discussed, the more comments RBI will receive. The more comments RBI receives, the more robust solution can be found.

By now, articles on the report should have appeared on the Internet.

Time – limit Reconciliation of failed transactions at ATMs slashed

Time – limit Reconciliation of failed transactions at ATMs slashed

With Banks gaining experience in the recon of failed transactions at ATMs, Reserve Bank of India, DPSS has decided to slash the time limit for resolution of the customer complaints by the Issuing Banks from 12 working days to 7 working days.

The Notification No is : RBI/2010/11/547, DPSS.PD.No.2632 / 02.10.002 / 2010-2011 dt.May 27, 2011

The complete notification can be accessed @

http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6437&Mode=0

The high lights of the notification are:-

1.     The time limit for resolution of customer complaints by the issuing banks shall stand reduced from 12 working days to 7 working days from the date of receipt of customer complaint. Otherwise compensation of Rs100/- for every delayed day will be due to the customer.

2.     Compensation can only be claimed if the customer’s lodges the complaint with the ATM Card Issuing Bank, within 30days of the transaction. Yes, such a time limit is necessary to encourage customers to lodge complaints as early as possible. The older the complaint is, the difficult it is trace the corresponding records.    So folks, preserve your charge slips and lodge complaints immediately. The ideal mode of complaints is handing over in person in the Branch or via email/online complaint lodgement

3.     Another important change is on the number of free transactions. The number of free transactions permitted per month at other bank ATMs to Savings Bank account holders shall be inclusive of all types of transactions, financial or non-financial. At present, 5 free transactions are permitted at other Bank ATMs. There was no clarity as to whether the number of free transactions, included non-financial transactions or not. RBI has now clarified, that the limit for free transactions will be all inclusive. It is up to the customers as to how they make use of the free transactions limit.

4.     It has been made clear that all the disputes regarding ATM failed transactions will be settled between the Issuing Bank and Acquiring Bank through the ATM system provider ONLY. The practice, if any, of bilateral arrangements outside the ATM dispute resolution mechanism is discouraged.

5.     The directive shall be effective from July 01, 2011

Banks are encouraged to widely publicize these changes at all ATM locations and also by individual intimation to customers.

These changes can be intimated individually to customers via a pamphlet with the Monthly/Quarterly statement of accounts dispatched to account holders

Implication:

Majority of the Banks have streamlined their internal systems for the effective ATM recon issues, so this will not be a major change for the ATM Recon Team.

The major change for the customers is on the ‘free transaction limit’. They have to remember financial and the non-financial transactions too. Otherwise, they will have to shell out charges. This discipline is necessary for the overall financial viability of the system.

As I always say, why use ATMs, go for POS transactions while shopping, dining, paying fees etc.

IDBI Bank joins IMPS with soft launch

IDBI Bank joins IMPS with soft launch

IDBI Bank – the only Bank in ‘OTHER PUBLIC SECTOR BANK’ group has jumped on to the IMPS Bandwagon, on 01/04/2011, via a soft launch.

I am trying to understand the logic of 01/04/2011, is it the end of a new financial year or the beginning of a new financial year

Anyhow, IDBI Bank has started off 2011-2012 with a bang, by joining IMPS on the first day itself.

The most interesting aspect of IDBI Bank is that it is the only Bank under the ‘OTHER PUBLIC SECTOR BANK’ sub-group.

RBI had to create a new sub-group i.e ‘OTHER PUBLIC SECTOR BANK’, to place IDBI Bank.

Ministry of Finance has vide its circular no. F.No. 7/96/2005-BOA dated December 31, 2007 advised Secretaries of all Ministries/Departments of Government of India that the bank may be treated on par with Nationalized Banks/State Bank of India by Govt. Departments/Public Sector Undertakings/other entities for all purposes, including deposits/bonds/investments/guarantees etc. and Government business.

Not only this, Section 10(23D) of the Income Tax Act 1961 has been amended, in terms of Finance Act 2009, incorporating 'Other Public Banks' in the expression 'Public Sector Banks' appearing therein.

One interesting document on IDBI Bank’s website is the document on :

Central Interest Subsidy Scheme on Education Loan

The same can be accessed @

http://www.idbibank.com/pdf/CentralInterestSubsidyScheme-EL-uploadontheinternet_03011011.pdf

At present, IDBI Bank is offering the subsidy scheme in 4 states of Kerala, Maharashtra, TamilNadu and Andhra Pradesh.

The scheme will be rolled out to other states, as and when the list of designated authority/authorities, is received by the Bank.

CSIS is a Central Scheme to provide Interest subsidy during the moratorium period for the educational Loans taken by students from Economically Weaker Sections to pursue Technical / Professional educational Studies in India.