neft rtgs etc. _20s_ppt
TRANSCRIPT
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NEFT/RTGS
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Evolution of the Payment System in India
• Earliest Payment Instrument - Coins punch-marked or cast in silver or copper & credit system involved Bills of
Exchange.
• In ancient India - rnapatra or rnalekhya.
• In Mauryan period – adesha• In Mughal period – dastawez
dastawez-e-indultalab
dastawez-e-miadi
barattes
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• Hundis
were used,
as remittance instruments
as credit instruments
for trade transactions
types of Hundis, Darshani Hundis
Muddati Hundis
• Paper Money
• Cheques
• Post Bill – Inland Promissory Notes
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• Cash Credit Account & Buying and Selling of Bills of
Exchange
• Negotiable Instruments Act, 1881• Clearing House
• Reserve Bank of India (RBI)
• Till early 2000, cash, DDs & cheque payments were the
famous modes of transactions
• Payment going E-way
ECS (Credit)
ECS (Debit) NEFT
Credit cards & Debit cards etc
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Classification
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National Electronic Fund Transfer
(NEFT)
• Introduced in November 2005
• Electronic funds transfer
• „Eleven‟ hourly settlements
– Weekdays : 9 am to 7 pm
– Saturday : 9 am to 1 pm
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NEFT Transfer Online screen
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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
PROCESS
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How does NEFT system operate
Step 1: First of all, the remitter has to provide the requisiteinformation like
• Beneficiary‟s Name.
• Beneficiary‟s Account number.
• Beneficiary‟s Account type ( cash credit, loan account, etc)
• Bank name, location & base branch in which the
beneficiary account is held.
• IFSC code of beneficiary bank etc in order to start the
process of NEFT.
Step 2: The bank branch at which the fund transfer request
originated, prepares a message and sends it to its pooling
centre (also called the NEFT Service Centre).
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Step 3: The pooling centre forwards the message to the NEFT
Clearing Centre (operated by the National Clearing Cell, RBI,
Mumbai) to be included in the next available batch.
Step 4: The RBI at the clearing centre sorts the transactions
bank- wise and prepares accounting entries to receive funds from
(debit) the originating banks and give the funds to (credit) the
destination banks. Thereafter, bank-wise remittance messages
are forwarded to the destination banks through their poolingcentre (the NEFT Service Centre).
Step 5: The destination banks receive the remittance messages
from the Clearing Centre and pass on the credit to the beneficiary
accounts.
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Benefits
• Faster – Its faster and more convenient than
sending Demand Drafts / Cheques / TelegraphicTransfers.
• Easier – Forget long queues and time-consuming
DDs, cheques and pay orders! No need to visit the
bank branch and search for a courier.
• Reach – No Geographical limitations within India as
long as it is a participating bank in the RBI's
RTGS/NEFT system.
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Indian Financial System Code(IFSC)
• IFSC Code is 11 digit code for identifying the bank
and branch
• Used by both RTGS and NEFT finance transfer
systems
• code consists of 11 characters- first 4 characters – entity
fifth position - „0‟
last 6 characters – branch number
• E.g. (ICIC0000039) is an IFSC code of one of the
branches of ICICI Bank.
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Real Time Gross Settlement (RTGS)
• Started in October 2004
• Transactions of a value of greater than “Rupees Two
Lac “ is processed and no upper limit
• RTGS is a large value funds transfer system• Transfer of money takes place from one bank to another
on a “real t ime ” and on “gross bas is ”
• Money can be transferred to only those branches of banks where RTGS facility is enabled
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Features of RTGS system
• Participant Interface (PI)
• Y-Topology
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Features Contd.
• Intra-day Liquidity Provision
• Interaction with Net Settlement Systems
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RTGS Transaction Flow
Customer fills up the
RTGS funds transfer
request form.
Remittance Amount
and Charges arepaid
as per desired mode
Data entry and its
authorization in CBS
System.
Data transmitted to
Intra-day Liquidity
Management.
Data transmitted to
the PI maintained at
Belapur.
Data flows through
to the RBI‟s IFTP and RTGS server
Recipient Bank gets
confirmation andcredits Customer
a/c.
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Limitation Benefits
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Criteria NEFT RTGS
Settlement Done in batches (Slower) Real time (Faster)
Minimum amount of moneytransfer limit No Minimum 1 lacs
Maximum amount of
money transfer limitNo Limit No Limit
When does the CreditHappen in beneficiary
account
Happens in the hourlybatch Between Banks
Real time between Banks
Maximum Charges as per
RBI
Upto 10,000 – Rs 2.5
from 10,001 – 1 lac – Rs 5
from 1 – 2 lacs – Rs 15 Above 2 lacs – Rs 25
Rs 25-30 (Upto 1 – 5 lacs)
Rs 50-55 (Above 5 lacs)
(Lower charges for first half of day)
Suitable for Small Money Transfer Large Money Transfer
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Thank You.