Final Payment-and-Settlement-Systems

8/7/2019 Final Payment-and-Settlement-Systems

1/30

PAYMENT & SETTLEMENT

SYSTEM

PAYMENT & SETTLEMENT

SYSTEM

EFFORTS:

NIRAJ AGARWALA

JESIM

PRANJIB GOSWAMI

KALYAN KUMAR MEDHI

NA1


2/30

Slide 1

NA1 Payment and Settlement system

For GCCCMS 3rd SemesterNiraj Agarwala, 9/1/2010


3/30

Payment and Settlement Act ,2007

EXTENT : Whole of IndiaOBJECTIVE : To provide for the regulation and supervision of

payment systems in India

Came to force on 12 Aug, 2008

Powers vested to RBI

Regulations-

a) The Board for Regulation and Supervision of Payment and

Settlement Systems Regulation, 2008

b) The Payment and Settlement Systems Regulations, 2008

Covers matters like form of application for authorization forcommencing/ carrying on a payment system and grant of

authorization, payment instructions and determination of

standards of payment systems, furnishing of

returns/documents/other information, furnishing of accounts

and balance sheets by system provider etc


4/30

Designated Authorities1. RBI

2. Board for Regulation and Supervision of

Payment and Settlement Systems.

Governor, RBI, Chairperson of the Board;

Deputy Governors, RBI, out of whom the Deputy

Governor who is in-charge of the Payment and

Settlement Systems, shall be the Vice-Chairperson of

the Board; Not exceeding three Directors from the Central Board

of the RBI to be nominated by the Governor.


5/30

MEANING:MEANING:

PAYMENT SYSTEM- is a mechanism that

facilitates transfer of value between a payer

and a beneficiaryby which the payer

discharges the payment obligations to thebeneficiary.

SETTLEMENT- means the settlement of

payment instructions received and theseinclude settlement of securities, foreign

exchange or derivatives or other transactions.


6/30

WAYS OF PAYMENTSWAYS OF PAYMENTS::

CASH CHEQUE

DRAFTS CREDIT CARDS & DEBIT CARDS ELECTRONIC PAYMENTS-

ECS

RTGSNEFT


7/30

Cheque:Cheque:Sec 6 of Negotiable Instruments Act,

1881

Bearer & A/C Payee

Crossing- a) Generalb) Special

c) Restrictive

d) Double

Drafts:


8/30

Cheque/Drafts/Payorder Process:Cheque/Drafts/Payorder Process:

ClearingHouse

Bank 1

Mr ABeneficiary

Bank 2


9/30

Credit Card & Debit CardCredit Card & Debit Card

Credit Card:Credit Card:

PostpaidPostpaid

Purchase & WithdrawalPurchase & Withdrawal--7:3(approx)7:3(approx)

Bill Date & Due DateBill Date & Due DateInterest (3% pm) after due dateInterest (3% pm) after due date

Issued to bank employees & customers ofIssued to bank employees & customers of

good reputation.good reputation.

Debit Card:

Prepaid

No ratio & dates


10/30

Debit Card & Credit Card Process:Debit Card & Credit Card Process:

of ellersa

ofCustomers

a

Customer A/C

Dr.

ellers A/C

Cr.


11/30

EC

S:EC

S:Electronic Clearance ServiceRepetitive Transactions

Automatically debited on due date

Minimal charge

ECS Types- Debit & Credit


12/30

Real Time Gross Settlement

System(RTGS)

Real time gross settlement systems (RTGS) are afunds transfer mechanism where transfer of money

takes place from one bank to another on a "realtime" and on "gross" basis.

Settlement in "real time" means payment transactionis not subjected to any waiting period. Thetransactions are settled as soon as they are

processed. "Gross settlement" means the transaction is settled

on one to one basis without bunching with any othertransaction. Once processed, payments are final andirrevocable.


13/30

RTGS is a large value (minimum value of transactionshould be Rs. 1,00,000) funds transfer system

whereby financial intermediaries can settle interbank

transfers for their own account as well as for their

customers. Customers can access the RTGS facility between

9 am to 4:30 pm on week days and 9 am to 12 noon

on Saturdays.


14/30

Evolution of RTGS The system went live on 26 March with State Bank

of India, HDFC Bank and Standard Chartered Bank.

The Reserve Bank of India expected 120 scheduledcommercial banks and primary dealers to becomepart of the real time gross settlement system(RTGS) by June 2004.

On 11 May 2004, 19 more banks joined RBI's RTGSbringing the total to 23. This include Bank of Baroda,

Punjab National Bank, Canara Bank, Union Bank ofIndia, Indian Overseas Bank, Central Bank of India,Dena Bank, BNP Paribas, IndusInd Bank, INGVysya Bank


15/30

PROCESS:SENDING BANK

PAYMENT MESSAGE

CENTRAL BANK

PROCESSING OF MESSAGE

RECEIVING BANK


16/30

National Electronic Fund Transfer

Launched on Oct, 2005

NEFT is a nation-wide electronic funds transfer

system, which facilitates transfer of funds from any

bank branch to any other bank branch. This is asimple, secure, safe and fastest mode of funds

transfer. This is an ideal mode of funds transfer for

Retail remittances.

Presently, Over 45000 bank branches are enabled forsending and receiving NEFT messages in India. There

is no amount ceiling under this scheme and as such

the customers can remit any amount.


17/30

There are six settlement windows for NEFT at 9.30,10.30, 12.00, 13.00, 15.00 and 16.00 hours on

weekdays and 9.30, 10.30, and 12.00 hours on

Saturdays.

The money will be credited to the beneficiarysaccount on the same day or at the most next day in

case the message is sent during the last batch of

settlement.


18/30

Request for NEFT by bank customer

Data Entry at the Sending Bank Branch

Processing /Data Upload at Sending NEFT Service Centre

Transmission/Submission of NEFT message to the NEFT centre

Processing & transmission of NEFT message to the beneficiary banks

Data validation at receiving NEFT Service Centre

Payment to beneficiary

NEFT - PROCESS FLOW


19/30

Request for NEFT by bank customer

A bank customer (i.e. sender or originator) desirousof remitting funds under the system shall submit an"NEFT Application Form" (to be designed by theparticipating bank) authorizing the sending bank todebit the sender's account and transfer funds to the

beneficiary as specified in the NEFT ApplicationForm. The application could be submitted either inphysical form or electronically.

The payment instruction given by the customer shallbe in compliance with the provisions. Banks shallensure that the customers are made aware of therights and obligations of participants in NEFTsystem.


20/30

A transaction within the NEFT system will be said tohave been initiated when the sending bank accepts

a payment instruction issued by the sender.

If in a single payment instruction, the sender directs

payments to several beneficiaries, each paymentdirection shall be treated as a separate payment

instruction.


21/30

Requirements:

1. Amount to be remitted

2. The account number which is to be debited

3. Name of the beneficiary bank

4. Name of the beneficiary customer5. Account number of the beneficiary

customer

6. Sender to receiver information, if any

7. The IFSC Number of the receiving branch

(number available with branch)


22/30

REJECTION:

i) the customer has not placed funds at

the disposal of the sending bank or

funds placed is not adequate to cover

the sum to be remitted and the servicecharge; or

ii) the beneficiary details given in the

NEFT Application form are notadequate to identify beneficiary by the

beneficiary bank.


23/30

RTGS & NEFT PROCESS:RTGS & NEFT PROCESS:

HOBANK B

HOBANK A

BANK A

CUSTOMER1

Beneficiary

BANK B


24/30

DIFFERENCE B/W RTGS & NEFT

NEFT RTGS

NEFT are electronic fund

transfer modes that operate

on a Deferred NetSettlement (DNS) basis

which settles transactions

in batches. In DNS, the

settlement takes place at a

particular point of time. All

transactions are held up till

that time.

In RTGS, transactions are

processed continuously

throughout the RTGSbusiness hours.


25/30


26/30


27/30

PROCESSING CHARGESAmount Service Charge

NEFT Below Rs. 1 Lakh Rs. 5

Rs. 1 Lakh & above Rs. 25

RTGS Below Rs. 5 Lakh Rs. 25

Rs. 5 Lakh & above Rs. 50


28/30

Complaints : Whom to Approach?Complaints : Whom to Approach?

Bank HO/ Branch

RBI Customer Service:The Chief General Manager,

Reserve Bank of India,

Customer Service Department,

1st Floor, Amar Building, Fort,

Mumbai - 400001

or send and email.

Banking Ombudsman

RBI appellate authority( Deputy Governor)


29/30

CONCLUSION

The objective of any Payment & Settlement systemregime is the establishment ofsafe, secure, soundand efficient payment and settlement systems.

Safety will relate to addressing risk, so as to make the

systems risk free or with minimal risk Security will address the issues relating to

confidence, with specific reference to the users ofthese systems

Soundness will be aimed at ensuring that the systemsare built on strong edifices and that they stand the testof time

Efficiency will represent the measures aimed atefficiencies in terms of costs so as to provide optimal

and cost effective solutions.


30/30

Thank You !

Final Payment-and-Settlement-Systems

Documents

Transcript of Final Payment-and-Settlement-Systems