Category: banking

RBI removes NEFT, RTGS payment charges to push digital transactions

RBI has removed charges for payments via NEFT and RTGS and asked banks to pass on the benefits to customers. This means that payments via NEFT and RTGS would become either free or charges would be drastically reduced. This was announced in the Statement on Developmental and Regulatory Policies, which was released today by the central bank as part of its monetary policy review. 

The Reserve Bank levies minimum charges on banks for transactions routed through its Real Time Gross Settlement System (RTGS) meant for large-value instantaneous fund transfers and the National Electronic Funds Transfer (NEFT) System for other fund transfers. Banks, in turn, levy charges on their customers. In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. Banks will be required, in turn, to pass these benefits to their customers. Instructions to banks in this regard will be issued within a week. 



1. National Electronic Fund Transfer (NEFT)
NEFT is a payment system facilitating funds transfers from one bank account to another. One can access this service either by using Internet banking or by visiting the bank branch. (Not all bank branches are enabled with this service.)

Once you initiate the transfer, the money reaches the beneficiary account within hours. There is no limit on the minimum or maximum amount you can transfer, however, individual banks may put restrictions on the per transaction amount. 

2. Real Time Gross Settlement (RTGS)

This is a facility used for transferring high value amounts. In RTGS, the minimum amount that can be currently transferred is Rs 2 lakh. 

You can only transfer funds using RTGS on any working day between Monday and Saturday either via internet banking or bank branch. 



Source:-The Economic Times

from Blogger http://www.systempost.in/2019/06/rbi-removes-neft-rtgs-payment-charges.html

How Digital Technology is Powering Doorstep Banking in India?

As part of the government of India’s push to broaden financial inclusion across the country, the Reserve Bank of India, India’s central bank, has licensed a unique form of banking which has not been used elsewhere in the world.

The new model, called payments banks, operate like any other bank except with limited offerings. Their key remit is to widen the spread of payment and financial services to small businesses, low-income households and a migrant labor workforce in a secured, technology-driven environment. India Post Payments Bank (IPPB), hosted under the Department of Posts, is the only public sector entity to have been issued a licence to operate a payments bank.

Thinking long term

Setting up a brand-new, digitally-focused bank is no task for the faint hearted. Right from the beginning, IPPB needed to think long term and create a banking ecosystem that was both cost effective to run and scalable over the years.

The challenge put to DXC was to design a technology solution for IPPB to serve the nation and drive development toward a truly digital India. DXC provided the digital roadmap and set up the entire IT infrastructure and business applications for this ambitious project.

“IPPB’s vision is to build the most accessible, affordable and trusted bank for the common man. Towards that, it was critical to invest in a scalable and resilient solution that leverages the existing interoperable payments infrastructure to achieve affordability, while ensuring simple and intuitive interfaces for easier adoption by the customers and the service providers,” says Suresh Sethi, CEO of IPPB.

“The solution we developed for IPPB was designed with the constant need to keep operational costs low,” says Bhushan Sharma, Managing Director of DXC Technology in India. “We used a light operating model with minimal data entry, straight through processing and digitization. We also used a mix of reliable open-source solutions to keep the cost of IT low.

“In order to meet the changing industry demands and stay relevant, we implemented a future-proof platform and solution with more than fifty business applications aligned to a robust product roadmap.”

Serving the people

IPPB now offers customers an integrated suite of core banking services to support savings and current accounts, payments, money transfer, direct benefit transfers, bill and utility payments, and enterprise and merchant payments. One of the most important functions of IPPB is its ability to deliver government subsidies to people. These products and related services are being offered through counter services and via smartphone-based, hand-held devices carried by postal staff.

IPPB is also looking at the unorganized retail segment, where payments today are largely dominated in cash. It wants to create a ‘less cash’ system that allows these kirana stores and merchants to use IPPB accounts and interact digitally.

Taking it one step at a time

Following successful pilots in 2017, IPPB expanded country-wide in September 2018, opening 650 branch offices, setting up 3,250 post offices across urban and rural India to operate as banking access points, and, most importantly, offering counter and doorstep service through around 10,000 postal staff and gramin dak sewaks. For the launch, IPPB invested more than 800,000 hours into training 15,000 postal staff and since has achieved one of the fastest expansions of over 100,000 banking access points while also training and certifying over 250,000 service providers throughout the country.

“We are taking a step-by-step approach to rolling out our services,” says Sethi. “Although many of our customers will be familiar with banking, we’re largely dealing with people who have never used a bank before. Therefore, IPPB is initially focusing on financial inclusion through financial literacy, educating customers on how insurance secures the unsecured, how wealth grows from wealth and how even a little saving can go a long way towards building a better future.”

“We believe that a nation can only grow when every citizen gets an opportunity to prosper. With simple, diverse and growth-oriented offerings, IPPB aims to give every Indian access to a comprehensive suite of banking services.”Suresh Sethi,

CEO of IPPB.

India’s most trusted icon

The beauty of IPPB’s model is that it is based on one of India’s most trusted public figures—that of the postman or postwoman. They are the key contacts for customers, bringing banking right to their doorsteps. And this is, in essence, the bank’s slogan Aapka Bank, Aapke Dwaar which roughly translates to ‘banking at your doorstep’.

IPPB is gearing up to lead the digital evolution of banking as one of the largest financial inclusion networks in India, covering both urban and rural areas. “As we continue to expand our services to every doorstep, our postmen and postwomen will become the trusted financial services advisors to our customers,” says Sethi. “At India Post Payments Bank, we believe that a nation can only grow when every citizen gets an opportunity to prosper. With simple, diverse and growth-oriented offerings, IPPB aims to give every Indian access to a comprehensive suite of banking services.”

Sharma recalls the opinion of a 65-year-old driver and former goat herder in rural Rajasthan, who believes that digitalization is key to economic success. “We need to get money directly to the workers and the new payment banks are the answer. Banks like IPPB will make a real difference.” What better endorsement can there be?

“This greenfield model of banking should enable individuals, small businesses and merchants to utilize full-fledged digital banking services,” continues Sharma. “It’s paving the way for India’s largest banking network to reach every corner of the nation.”

from Blogger http://www.systempost.in/2019/02/how-digital-technology-is-powering.html