Banking- Payment And Settlement

PAYMENT AND SETTLEMENT SYSTEMS ACT, 2007:-
This act was passed in 2007 and was implemented in 2008.
Under this act RBI or a company Authorised by RBI can conduct payment and settlement in India.
For More visit here

Authorised Company:-
NPCI :- National Payment Corporation of India. Its owner is RBI. It launched the Rupay Card.

Types of Payment :-
(i) Paper Based through cheque, PO, DD etc.
(ii) Electronic Based through EFT, NEFT, RTGS, ECS, IMPS
(iii) ATM, Card Based through ATM cards, Debit Cards, Credit Cards, POS, etc.

(i) Paper Based :-
Paper Based payments can be done through cheques, DD, PO, etc in which papers are involved.

CTS:- Cheque Truncation System.
It is the use of virtual image of the cheque by the Banks for clearing purpose.

CTS 2010:- It was implemented from July 31, 2013. It is a standardised security feature common to the cheques of the banks participating in the CTS system.

MICR:- Magnetic Ink Character Recognition.
It is a 9 digit numeric codewhose first 3 digit is the city code, next 3 digit is the bank code and the last 3 digit will be the branch code.

(ii) Electronic Based:-
(a) EFT is Electronic Fund Transfer
EFT is a Scheme introduced by Reserve Bank of India (RBI) to help banks offering their customers money transfer service from account to account of any bank branch to any other bank branch in places where EFT services are offered.
For more on EFT click Here.

(b) RTGS / NEFT :- 
RTGS is Real time Gross settlement And
NEFT is National Electronic Fund Transfer.

Difference b/w RTGS and NEFT :-

RTGS (Real Time Gross Settlement)	NEFT (National Electronic Fund Transfer)
1. Bulk Amount are Transferred	1. Smaller amounts arre transferred
2. Minimum 2 Lakh and Maximum Unlimited Can be Transferred	2. Minimum  50Paise and Maximum unlimited can be transferred.
3. Funds are transferred Instantly i.e., No Batch System.	3. Delayed Transfer of Funds & Funds are transferred in Batches.
4. In RTGS, Banks has to Credit the funds transfer amount within two hours into beneficiary account receiving message from RBI.	4. In NEFT, it depends on the settlement cycle.
5. This facility cannot be given to the non account holder or the walkin customer.	5. This facility can be provided to the walkin customer with the limit of upto Rs. 50,000/day in cash only.

For more on NEFT visit this Link here
For more on RTGS visit here

IFSC :- Indian Financial System Code.
This is an alphanumeric code used to do the transaction using NEFT or RTGS facilities. It is a 11 digit code which consist of
First 4 ------> Bank Code
Next--------> Zero (0)
Last 6------> Branch Code.

Bank Charges for NEFT/RTGS :-
(i) For NEFT :-

SLAB	Maximum Bank charge
0- 10,000/-	Rs. 2.5 + S.Tax.
10,000- 1 Lakh/-	Rs. 5 + S.Tax.
>1 Lakh – 2 Lakh/-	Rs. 15 + S.Tax
>2Lakh	Rs. 25 + S.Tax

(ii) For RTGS:-

SLAB	Maximum Bank charge
2-5 Lakh	Rs. 30 + S.Tax
> 5 Lakh	Rs. 55 + S.Tax

IMPS :- Immediate Payment Service.

MMID:- Mobile Money Identifier (7 digit Code)

IMPS:- It stands for immediate payment services. It was Launched by NPCI in 2010. It is an instant & 24x7 service electronic fund transfer thoriugh mobile phone. A minimum of 50Paise and a no limit on maximum amount is there for transaction.

A committe on mobile banking was headed by B. Sambamurthy.

For more on IMPS click here

ECS:- Electronic Clearing Services is repetitive and periodic in nature. It was introduced by RBI in 1990s. It is a electronic paperless system offered to the companies for making or preceding bulk payments which are repetitive and periodic in nature.

For More on ECS click here

(iii) Card Based Payments :- 

It can be done using Credit cards, debit cards , prepaid cards at any Point of Sale terminals,etc

For more on types of Cards visit this link here

RuPay Cards:- It was launched by NPCI. It is a domestic payment gateway which is at present available for payments done through ATM & Debit Cards. It is the Seventh Payment Gateway of the world.