Remarks by Smt Shyamala Gopinath, DG, RBI at the inauguration of Inter-Bank Mobile Payment Service of the National Payment Corporation of India at Mumbai on November 22, 2010

1. Mr Hota, Mr Balachandran, my colleague Mr Padmanabhan, other executives of NPCI, fellow bankers, other dignitaries and my media friends present here. I am honoured to be here and I thank the NPCI for inviting me to inaugurate the Interbank Mobile Payment Services (IMPS), which has the potential to change the retail payment landscape in India provided all the stakeholders get it right.
2. The success of mobile penetration in India is now widely recognized. This huge success has encouraged it being increasingly leveraged to address other frontier issues of inclusive growth process. Exchange of money, one of the most fundamental economic functions in any economy, is one of such frontline issues. I can do no better than refer to the observations  from a recent book¹ coauthored by  Mr. Sam Pitroda, one of the key architects of telecom revolution in India:  M-commerce is poised for a revolution, commencing in China and India.   It may initially focus on mobile banking and later, with integration of applications for consumer convenience, extend to other services.
3. Intuitively, the mobile phone, being more ubiquitous in nature offers a greater opportunity for effective delivery of financial services and furthering the cause of financial inclusion in a significant way.  With the evolution through Information & Communication Infrastructure, knowledge based initiatives, right to information and education, delivery of public services and employment and entrepreneurship mobile money has the potential to facilitate inclusive growth. .
4. Reserve Bank has acknowledged the importance of mobile banking channel as a critical element to achieving inclusive growth in India and has been taking several important steps, the recent being enabling the mobile companies to partner with banks as business correspondents. The twin challenge in our country would be to succeed in reducing the use of cash while encouraging the spread and use of mobile wallet to reap the full benefits of this ubiquitous product.
5. The three stakeholders viz. the telecom operators, banks and merchants have realized the value proposition and the only sustainable business model is where these stakeholders work together to deliver true value to customers and effectively share the costs saved and new revenues generated. Hence it is imperative that all the three while being cognizant of their strengths, do not lose sight of their weakness and find ways to integrate their offerings without losing their individuality.
6. As far as banks are concerned, the real challenge would be to reorient their business models to exploit the synergies provided by this model while addressing the key concerns.

• Leveraging on  new technology
  
• Extend the existing risk management practices to various delivery channels
  
• Acquire all these transactions over the existing settlement networks
  
• Aggregate various services as part of their existing cross-selling and co-branding initiatives
  
• Fraud prevention and security standards; safeguards against money laundering, KYC issues
  
• Ability to leverage their existing reporting, auditing, and campaign management at back end
  

Mobile Phones for financial services - across the globe
7. World over there has been increased use of mobile phones for extending financial services to the excluded populations.  Two models are mainly evident (i) bank led model and (ii) Non-bank led model.
8. The bank led model involves extending all banking facilities including money transfer facility to bank customers through the mobile channel. This pure bank led model essentially incorporates the whole gamut of financial services like acceptance of deposits, extending loans and also providing money transfer facility. The agents are employed by the banks and are therefore directly responsible for their activities.
9. The non-bank led model which are mainly provided by MSPs. A virtual electronic prepaid wallet on the mobile phone is provided to the customers. Customers can use the amount in the virtual account for remittance/payments for goods and services (M-Pesa, Kenya). The number of such models across the globe is very few. In this model the focus is on providing remittance facility. These models provide a virtual prepaid account held with  the MSP, which can be used by the customer for person-to-person remittance and payments.
10.  In India, it has been decided to adopt the bank-led model.
Mobile Payments in India :
11. The significance of this channel for the development of payment instruments and as payment channel has been recognized by the Reserve Bank. Accordingly the Reserve Bank of India issued the guidelines for Mobile Banking Transactions in October 2008.
12. The guidelines permit banks to provide mobile banking transactions and mandates that all transactions have to originate from one bank account and terminate in another bank account. The guidelines also permit banks to extend this facility through their business correspondents. The mobile banking guidelines were relaxed in December, 2009 to –

1. enhance the daily cap  on both funds transfers and transactions involving purchase of goods and services to Rs.50,000
   
2. Requirement of end-to-end encryption relaxed for transactions up to Rs.1000/- for small value transactions.
   
3. Facilitate funds transfer from a bank account using a mobile phone with cash payout at ATMs/BCs up to Rs 5000.
   

13. Non-bank entities have been permitted, in August  2009, to issue semi closed prepaid m-wallets up to the value of Rs 5000/- with full KYC compliance based on the representation received from Cellular Operators Association of India (COAI) The objective of keeping the limits low was to study the trend and progressively liberalize based on the experience. As on date a total of 6 non-bank entities have been authorized to issue prepaid mobile wallets. This includes one Mobile service provider. Another application is under process.
14. Given that India is still far from being a cash less society, the cash-in/cash-out arrangements in these models play an important part for scaling up. This can happen only if banks and mobile operators/card issuers work together as partners. It is gratifying to note that the high level of Inter-Ministerial Group anchored by the Department of Information Technology, Government of India that went into the issue, after extensive discussions, have reached more or less the same conclusion.GOI has consequently appointed various committees to address issues pertaining to provision of prioritized services for mobile banking transactions and pricing of such services.
15.  The recent relaxations contemplated in enabling mobile operators as BCs of banks should give a further fillip to these efforts.
16.  It has to be appreciated that in India, unlike in Kenya and Philippines, there are a number of    MSPs and a huge base of mobile subscribers. To have an efficient mobile based payment and remittance system would require inter-MSP payment services. This inter-operability is an important criterion for any payment product to be successful and acceptable. Facilitating this would require the setting up of a clearing and settlement arrangement for such non-bank operators. Such clearing and settlement arrangements could have systemic implications. This is where the facility being inaugurated today by the NPCI is filling an important pre requisite for the product to scale up.
17.  RBI has permitted 40 banks to do mobile banking and the customer base availing of mobile banking facilities as on September 30, 2010 stands at 8.87 lakh as compared to 6.16 lakh as at the end of August 2010. During September, 2010, 4.9 lakh transactions of value Rs. 44 crores were carried out  using this mode of payment both for transfer of funds and purchase of goods and services.
Concluding thoughts :
18. While the growth of mobile payments has been rapid, it is far from becoming an important source of financial inclusion. This in my view calls for two important facilitations. One, partnership rather than competition among the stake holders, importantly mobile companies and banks and two, a ubiquitous switch for enabling interbank p to p and p to b payments. While we are working towards achieving the first facility, NPCI has taken the important step of enabling the second important facility.
19. The Interbank Mobile Payment Services (IMPS) provides an inter-operable infrastructure to the banks for enabling interbank real time funds transfer transactions. What may be one of its strongest points, IMPS rides on the existing NFS Interbank ATM transaction switching infrastructure and message format – and hence easy for banks to adopt. It has the potential for the wide reach across the country when all NFS member banks adopt this service and promote this service aggressively.
20. Alongside this, with the recent relaxations in the BC guidelines, I believe that all the building blocks are in place. Now it is entirely up to the various stake holders to take the product forward.  More importantly, what has been facilitated by NPCI today can be construed as yet another step towards achieving its stated vision of becoming a true umbrella organisation for retail payments in this country. I hope NPCI will continue to show equal enthusiasm in commissioning and completing other important projects like the cheque truncation and the much awaited India Card.
21. I too join Mr Balachandran in congratulating the IBA, entire NPCI team and all others who have contributed to the roll out of this product. I wish the NPCI success in all their endeavors.

---

24 Hours Payment System By NPCI

National Payment Corporation of India (NPCI) is providing Interbank Mobile Payment Service (IMPS) with seven banks viz, State Bank of India, ICICI Bank, Union Bank of India, Bank of India, Yes Bank, Axis Bank, HDFC Bank. The service allows a customer in one bank to remit funds to an account holder in another bank. Mobile phone is used as a service delivery channel of the member banks. For providing this offer, the bank needs to have authorization from Reserve Bank of India and has to be admitted as a member of IMPS. Till 31st March 2011, NPCI will be providing the service to the member banks free of charges. Thereafter switching fee of Rs. 0.25 per transaction will be levied by NPCI to member banks. Member banks may levy a fee on the customers as per the policy formulated by them. However for the present, they have also been providing this service free of charges.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question raised in Lok Sabha.

Electronic payment products - Processing inward transactions based solely on account number information

RBI/2010-11/235
DPSS (CO) EPPD No. / 863 / 04.03.01 / 2010-11

October 14, 2010

The Chairman and Managing Director / Chief Executive Officer
of member banks participating in RTGS / NEFT / NECS / ECS
Madam / Dear Sir,
Electronic payment products - Processing inward transactions
based solely on account number information

As you are aware, the Reserve Bank of India has introduced various electronic payment products (RTGS, NEFT, NECS and the ECS variants) to facilitate electronic transfer of funds in a secure and efficient manner. The volume of transactions routed through these products has witnessed substantial growth, indicating the acceptance and ease of use, by bank branches and customers alike.

2. The electronic payment products rely extensively on technology for origination, movement, processing and ultimate settlement of instructions. You would agree that any manual intervention not only delays completion of the instruction but also provides scope for error and fraudulent intent. Implementation of core banking solutions (CBS) in banks, software interfaces connecting the CBS platform to the payment system gateways and internet access to customers have been major enablers towards providing a straight-through-processing (STP) environment and, thus, popularising these products.

3.  In the CBS environment customers of a bank can be uniquely identified by their account number across branches. In terms of the extant Procedural Guidelines for RTGS / NEFT / NECS / ECS Credit, however, banks are generally expected to match the name and account number information of the beneficiary before affording credit to the account. In the Indian context, given the many different ways in which beneficiary names can be written, it becomes extremely challenging to perfectly match the name field contained in the electronic transfer instructions with the name on record in the books of the destination bank. This leads to manual intervention hindering STP and causing delay in credit or due return of uncredited instructions.

4.  Being essentially credit-push in nature, responsibility for accurate input and successful credit lies with the remitting customers and the originating banks. The role of destination banks is limited to affording credit to beneficiary's account based on details furnished by the remitter / originating bank. In order to handle surging volumes in a limited time window, some banks use name matching software, while a few others employ a risk-based approach based on the nature and value of transfer. 

5.  Keeping in view the foregoing, in the RTGS / NEFT / NECS / ECS Credit products, it has since been decided as under :

1. Responsibility to provide correct inputs in the payment instructions, particularly the beneficiary account number information, rests with the remitter / originator. While the beneficiary’s name shall be compulsorily mentioned in the instruction request, and carried as part of the funds transfer message, reliance will be only on the account number for the purpose of affording credit. This is applicable both for transaction requests emanating at branches and those originated through the online / internet delivery channel. The name field in the message formats will, however, be a parameter to be used by the destination bank based on risk perception and / or use for post-credit checking or otherwise.
   
2. Originating banks may put in place an appropriate maker-checker system to ensure that the account number information furnished by their customers is correct and free from errors. This may entail advising customers enjoying online / internet banking facilities to input the account number information more than once (with the first time feed being masked as in case of change of password requirements) or such other prescriptions. Customers submitting funds transfer requests at branches may be required to write down the account number information twice in the application form.
   
3. For transactions requested at branches, the originating bank shall put in place a maker-checker process with one employee expected to input the transaction and the other checking the input.
   
4. Banks should put suitable disclaimers on the funds transfer screens in the online / internet banking platform and funds transfer request forms advising customers that credit will be effected based solely on the beneficiary account number information and the beneficiary name particulars will not be used therefor.
   
5. Destination banks may afford credit to the beneficiary’s account based on the account number as furnished by remitter / originating bank in the message / data file. The beneficiary’s name details may be used for verification based on risk perception, value of transfer, nature of transaction, post-credit checking, etc.
   
6. Member banks shall take necessary steps to create awareness amongst their customers about the need for providing correct account number information while making payments through RTGS / NEFT / NECS / ECS Credit.
   
7. The system of providing mobile / e-mail alerts to customers for debit / credit to their accounts will be another way of ensuring that the debits / credits are genuine and put through / expected by them, and preferably, should be extended to all customers for all funds transfer transactions irrespective of value.
   
8. The above notwithstanding, in cases where it is found that credit has been afforded to a wrong account, banks need to establish a robust, transparent and quick grievance redressal mechanism to reverse such credits and set right the mistake and / or return the transaction to the originating bank. This particularly needs to function very efficiently and pro-actively till such time customers are comfortable with the new arrangements.
   

6.  These modifications are equally applicable to ECS Debit transactions to be used by destination banks for debiting their customer accounts based on details furnished by the user institutions / sponsor banks.

7. Banks are hereby advised to put in place appropriate systems and procedures to ensure compliance with the above prescriptions. The guidelines are issued under the powers vested with Reserve Bank of India under Section 10(2) of the Payment & Settlement Systems Act, 2007 and would come into effect from January 1, 2011. The instructions would be reviewed and suitable changes will be effected, if necessary, based on operational experience and general feedback.

8.  Please confirm receipt of this circular.

Yours faithfully

(G. Padmanabhan)
Chief General Manager

Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT

RBI/2010-11/259
DPSS (CO) RTGS No.1008/04.04.002/2010-2011

November 03, 2010

Chairman and Managing Director /
Chief Executive Officer of all banks participating in RTGS and NEFT
Madam / Dear Sir,
Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT
Please refer to our earlier circulars DPSS (CO) RTGS No. 729/04.04.002/2006 – 2007 dated December 1, 2006 (introducing the threshold value limit for customer transactions in RTGS to Rs 1 lakh) and DPSS (CO) No. 611 / 03.01.03 (P) / 2008 – 09 dated October 8, 2008 (levy of service charges for electronic payment products).
2. The Indian RTGS system has displayed tremendous growth in both transactions volume and the values that it has been processing since its inception in March, 2004. With the increasing number of electronic payment transactions, it has become expedient to position the Indian RTGS system primarily for processing and settling large value payment orders. Further, RBI has set up a robust retail electronic funds transfer system in the form of National Electronic Funds Transfer (NEFT) system, with near real-time settlement finality with 11 settlement cycles in a day.
3. It has, therefore, been decided in consultation with system participants to increase the threshold value limit for RTGS transactions from the present limit of ` 1 lakh to ` 2 lakhs. As an incentive to customers to move their transactions to NEFT, a new value band in the ` 1 lakh to ` 2 lakh segment has been created, with customers having to pay lower charges vis-à-vis RTGS transactions. The details of the existing service charges and the revised service charges are given below :

System	Value Band	Customer Charges
RTGS		Existing	Revised
	` 1 lakh to ` 2 lakhs	` 25	-
	above ` 2 lakhs to ` 5 lakhs	` 25	` 25
	above ` 5 lakhs	` 50	` 50
NEFT	up to ` 1 lakh	` 5	` 5
	above ` 1 lakh to ` 2 lakhs	` 25	`15
	above ` 2 lakhs	` 25	` 25

4. The service charges in the value band ` 1 lakh to ` 2 lakhs at ` 15/- per transaction in NEFT, effectively provides a saving of ` 10/- per transaction to the customer. Thus, the special niche value band created in NEFT, is a value proposition for customers providing funds transfer in a timely manner with wider geographical coverage at a lesser cost. This measure would also significantly contribute to further improving the efficiency of the RTGS system.
5. The revised threshold limits for customer transactions in RTGS system and revised NEFT service charges will be implemented with effect from November 15, 2010.
6. All member banks are advised to encourage customers to take advantage of this facility.
Please acknowledge receipt.
Yours faithfully,
(G. Padmanabhan)
Chief General Manager

Uniformity in penal interest payable by banks for delays in credit / return of NEFT / NECS / ECS transactions

RBI/2010-11/188
DPSS (CO) EPPD No.  477/ 04.03.01 / 2010-11

September 1, 2010

The Chairman and Managing Director / Chief Executive Officer
of member banks participating in / NEFT / NECS / ECS
Madam / Dear Sir,

Uniformity in penal interest payable by banks for delays in
credit / return of NEFT / NECS / ECS transactions

As you are aware, the recent past has been witness to significant growth in retail electronic payment products - both in terms of reach and volume. NEFT is offered by close to 70,000 bank branches in the country and ECS is available at 89 centres. More than 9 million transactions in NEFT and 25 million transactions in NECS / ECS were processed during the month of July 2010 alone. While this augurs well for the migration of payment transactions to the electronic mode, it is imperative that customer service and efficiency parameters are effectively dealt with as well by the member banks.

In terms of the NEFT / NECS / ECS Procedural Guidelines as also the relevant circulars / instructions issued by us from time to time, member banks need to afford credits to beneficiary accounts or return transactions (uncredited for whatever reason) to the originating / sponsor bank within the prescribed timeline. Any delays in doing so attract penal provisions specified therein.

The penal provisions are not uniform across these retail electronic payment systems. While banks have to pay penal interest @ prevailing Bank Rate + two per cent in NECS (Paragraph 15.4 of Procedural Guidelines) and ECS-Credit (Paragraph 29 of Procedural Guidelines), the relevant provision is Bank Rate in NEFT (Paragraph 6.7 of Procedural Guidelines). In order to ensure standardisation of the benchmark rate used and bring in uniformity in penal provisions across the retail payment products, the following modifications are being made:

NECS / ECS-Credit

“........Destination Bank would be held liable to pay penal interest at the current RBI LAF Repo Rate plus two per cent from the due date of credit till the date of actual credit for any delayed credit to the beneficiaries’ account. Penal interest shall be credited to the Beneficiary's Account even if no claim is lodged.”

NEFT

Paragraph 6.7 - “In the event of any delay or loss on account of error, negligence or fraud on the part of an employee of the destination bank in the completion of funds transfer pursuant to receipt of payment instruction by the destination bank leading to delayed payment to the beneficiary, the destination bank shall pay compensation at current RBI LAF Repo Rate plus two per cent for the period of delay. In the event of delay in return of the funds transfer instruction for any reason whatsoever, the destination bank shall refund the amount together with interest at the current RBI LAF Repo Rate plus two per cent till the date of refund."

Paragraph 6.8 is also being substituted as under –

"During the NEFT operating hours, originating banks should endeavour to put through the requests for NEFT transactions received by them, either online or across the counters, preferably in the next available batch but, in any case, not exceeding two hours from the time of receipt of the requests. In the likelihood of any delay / possible delay in adhering to this requirement, the originators / customers should be informed of the delay / possible delay and the reasons for the same."

Member banks may take note of the above changes in the Procedural Guidelines. These changes are applicable with immediate effect.

Yours faithfully

(G. Padmanabhan)
Chief General Manager

Electronic payment products - Processing inward transactions based solely on account number information

RBI/2010-11/235
DPSS (CO) EPPD No. / 863 / 04.03.01 / 2010-11

October 14, 2010

The Chairman and Managing Director / Chief Executive Officer
of member banks participating in RTGS / NEFT / NECS / ECS
Madam / Dear Sir,
Electronic payment products - Processing inward transactions
based solely on account number information
 
As you are aware, the Reserve Bank of India has introduced various electronic payment products (RTGS, NEFT, NECS and the ECS variants) to facilitate electronic transfer of funds in a secure and efficient manner. The volume of transactions routed through these products has witnessed substantial growth, indicating the acceptance and ease of use, by bank branches and customers alike.

2. The electronic payment products rely extensively on technology for origination, movement, processing and ultimate settlement of instructions. You would agree that any manual intervention not only delays completion of the instruction but also provides scope for error and fraudulent intent. Implementation of core banking solutions (CBS) in banks, software interfaces connecting the CBS platform to the payment system gateways and internet access to customers have been major enablers towards providing a straight-through-processing (STP) environment and, thus, popularising these products.

3.  In the CBS environment customers of a bank can be uniquely identified by their account number across branches. In terms of the extant Procedural Guidelines for RTGS / NEFT / NECS / ECS Credit, however, banks are generally expected to match the name and account number information of the beneficiary before affording credit to the account. In the Indian context, given the many different ways in which beneficiary names can be written, it becomes extremely challenging to perfectly match the name field contained in the electronic transfer instructions with the name on record in the books of the destination bank. This leads to manual intervention hindering STP and causing delay in credit or due return of uncredited instructions.
4.  Being essentially credit-push in nature, responsibility for accurate input and successful credit lies with the remitting customers and the originating banks. The role of destination banks is limited to affording credit to beneficiary's account based on details furnished by the remitter / originating bank. In order to handle surging volumes in a limited time window, some banks use name matching software, while a few others employ a risk-based approach based on the nature and value of transfer.

5.  Keeping in view the foregoing, in the RTGS / NEFT / NECS / ECS Credit products, it has since been decided as under :

1. Responsibility to provide correct inputs in the payment instructions, particularly the beneficiary account number information, rests with the remitter / originator. While the beneficiary’s name shall be compulsorily mentioned in the instruction request, and carried as part of the funds transfer message, reliance will be only on the account number for the purpose of affording credit. This is applicable both for transaction requests emanating at branches and those originated through the online / internet delivery channel. The name field in the message formats will, however, be a parameter to be used by the destination bank based on risk perception and / or use for post-credit checking or otherwise.
   
2. Originating banks may put in place an appropriate maker-checker system to ensure that the account number information furnished by their customers is correct and free from errors. This may entail advising customers enjoying online / internet banking facilities to input the account number information more than once (with the first time feed being masked as in case of change of password requirements) or such other prescriptions. Customers submitting funds transfer requests at branches may be required to write down the account number information twice in the application form.
   
3. For transactions requested at branches, the originating bank shall put in place a maker-checker process with one employee expected to input the transaction and the other checking the input.
   
4. Banks should put suitable disclaimers on the funds transfer screens in the online / internet banking platform and funds transfer request forms advising customers that credit will be effected based solely on the beneficiary account number information and the beneficiary name particulars will not be used therefor.
   
5. Destination banks may afford credit to the beneficiary’s account based on the account number as furnished by remitter / originating bank in the message / data file. The beneficiary’s name details may be used for verification based on risk perception, value of transfer, nature of transaction, post-credit checking, etc.
   
6. Member banks shall take necessary steps to create awareness amongst their customers about the need for providing correct account number information while making payments through RTGS / NEFT / NECS / ECS Credit.
   
7. The system of providing mobile / e-mail alerts to customers for debit / credit to their accounts will be another way of ensuring that the debits / credits are genuine and put through / expected by them, and preferably, should be extended to all customers for all funds transfer transactions irrespective of value.
   
8. The above notwithstanding, in cases where it is found that credit has been afforded to a wrong account, banks need to establish a robust, transparent and quick grievance redressal mechanism to reverse such credits and set right the mistake and / or return the transaction to the originating bank. This particularly needs to function very efficiently and pro-actively till such time customers are comfortable with the new arrangements.
   

6.  These modifications are equally applicable to ECS Debit transactions to be used by destination banks for debiting their customer accounts based on details furnished by the user institutions / sponsor banks.

7. Banks are hereby advised to put in place appropriate systems and procedures to ensure compliance with the above prescriptions. The guidelines are issued under the powers vested with Reserve Bank of India under Section 10(2) of the Payment & Settlement Systems Act, 2007 and would come into effect from January 1, 2011. The instructions would be reviewed and suitable changes will be effected, if necessary, based on operational experience and general feedback.

8.  Please confirm receipt of this circular.
Yours faithfully
(G. Padmanabhan)
Chief General Manager

Practice Stop. Think. Connect.(TM ) and encourage others to do it as well.

Tips and Advice

Tip: Keep a Clean Machine.
Advice:

• Keep security software current: Having the latest security software, web browser, and operating system are the best defenses against viruses, malware, and other online threats.
• Automate software updates: Many software programs will automatically connect and update to defend against known risks. Turn on automatic updates if that's an available option.
• Protect all devices that connect to the Internet: Along with computers, smart phones, gaming systems, and other web-enabled devices also need protection from viruses and malware.
• Plug & scan: "USBs" and other external devices can be infected by viruses and malware. Use your security software to scan them.

Tip: Protect Your Personal Information.
Advice:

• Secure your accounts: Ask for protection beyond passwords. Many account providers now offer additional ways for you verify who you are before you conduct business on that site.
• Make passwords long and strong: Combine capital and lowercase letters with numbers and symbols to create a more secure password.
• Unique account, unique password: Separate passwords for every account helps to thwart cybercriminals.
• Write it down and keep it safe: Everyone can forget a password. Keep a list that's stored in a safe, secure place away from your computer.
• Own your online presence: When available, set the privacy and security settings on websites to your comfort level for information sharing. It's ok to limit who you share information with.

Tip: Connect with Care.
Advice:

• When in doubt, throw it out: Links in email, tweets, posts, and online advertising are often the way cybercriminals compromise your computer. If it looks suspicious, even if you know the source, it's best to delete or if appropriate, mark as junk email.
• Get savvy about Wi-Fi hotspots: Limit the type of business you conduct and adjust the security settings on your device to limit who can access your machine.
• Protect your $$: When banking and shopping, check to be sure the sites is security enabled. Look for web addresses with "https://" or "shttp://", which means the site takes extra measures to help secure your information. "Http://" is not secure.

Tip: Be Web Wise.
Advice:

• Stay current. Keep pace with new ways to stay safe online. Check trusted websites for the latest information, and share with friends, family, and colleagues and encourage them to be web wise.
• Think before you act: Be wary of communications that implores you to act immediately, offers something that sounds too good to be true, or asks for personal information.
• Back it up: Protect your valuable work, music, photos, and other digital information by making an electronic copy and storing it safely.

Tip: Be a Good Online Citizen.
Advice:

• Safer for me more secure for all: What you do online has the potential to affect everyone – at home, at work and around the world. Practicing good online habits benefits the global digital community.
• Post only about others as you have them post about you.
• Help the authorities fight cyber crime: Report stolen finances or identities and other cybercrime

Courtesy: Stop. Think. Connect.^TM

PAYMENT SYSTEMS IN INDIA VISION 2009-12

CSIR ERP Finance & Accounts Module (including eFinance, eAccounts, ePayments, eReceipts, and eRecords Management & Automation of all processes)

Open publication - Free publishing - More finance

Faq's on Digital Signature Certificate

What is a Digital Signature Certificate?

Digital Signature Certificates (DSC) are the digital equivalent (that is electronic format) of physical or paper certificates. Examples of physical certificates are drivers' licenses, passports or membership cards. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver's license identifies someone who can legally drive in a particular country. Likewise, a digital certificate can be presented electronically to prove your identity, to access information or services on the Internet or to sign certain documents digitally.

Why is Digital Signature Certificate (DSC) required?

Like physical documents are signed manually, electronic documents, for example e-forms are required to be signed digitally using a Digital Signature Certificate.

Who issues the Digital Signature Certificate?

A licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) means a person who has been granted a license to issue a digital signature certificate under Section 24 of the Indian IT-Act 2000.

What are the different types of Digital Signature Certificates valid for MCA21 program?

The different types of Digital Signature Certificates are: Class 2: Here, the identity of a person is verified against a trusted, pre-verified database.

Class 3: This is the highest level where the person needs to present himself or herself in front of a Registration Authority (RA) and prove his/ her identity.

What is the cost of obtaining a Digital Signature Certificate?

The cost of obtaining a digital signature certificate may vary as there are many entities issuing DSCs and their charges may differ.

How much time do CAs take to issue a DSC?

The time taken by CAs to issue a DSC may vary from three to seven days.

What is the validity period of a Digital Signature Certificate?

The Certifying Authorities are authorized to issue a Digital Signature Certificate with a validity of one or two years.

What is the legal status of a Digital Signature?

Digital Signatures are legally admissible in a Court of Law, as provided under the provisions of IT

Insurence payment to beneficiary through electronic payment

Usage of Inter-bank window for customer transactions

RBI/2008-09/476
DPSS (CO) RTGS No.1959/04.04.002/2008-2009

May 11, 2009

Chairman and Managing Director /
Chief Executive Officer of all banks participating in RTGS

Dear Sir,

Usage of Inter-bank window for customer transactions

We invite a reference to our earlier circular No.RBI/2008-09/362 dated January 28, 2009 advising extension of cut off timings for various types of RTGS transactions.

1. It is brought to our notice that many RTGS participants are routing RTGS customer payments in the inter-bank session i.e., after the customer window is closed. This is probably done to accommodate late transactions of high net worth customers.
   
   
2. We advise that different time windows are prescribed for different types of RTGS transactions taking various things in to consideration. For example, a gap of one hour and thirty minutes is kept between customer timings and interbank timings to ensure that a customer transaction where credit cannot be afforded to the beneficiary would have to be returned to the sender’s account within one hour and thirty minutes. Therefore, routing of customer transactions in the inter-bank session is a violation of return discipline since the gap of one hour and thirty minutes is not maintained.
   
   
3. All RTGS participants are, therefore, advised to strictly adhere to the RTGS procedural guidelines and desist from the practice of pushing customer transactions in the interbank mode. Violations, if any, brought to our notice would be viewed seriously and would attract penalty under Section 30 of the Payment and Settlement Systems Act, 2007(51 of 2007).
   
   
4. Please acknowledge receipt of the circular.

Yours faithfully,

(G. Padmanabhan)
Chief General Manager

RBI FAQ on NEFT System

Q.1. What is NEFT System?

Ans : National Electronic Funds Transfer (NEFT) system is a nation wide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch.

Q. 2. Are all bank branches in the system part of the funds transfer network?

Ans : No. As on December 31, 52427 branches of 89 banks are participating. Steps are being taken to widen the coverage both in terms of banks and branches.

Q.3. Whether the system is centre specific or has any geographical restriction?

Ans : No, there is no restriction of centres or of any geographical area inside the country. The system uses the concept of centralised accounting system and the bank's account, that are sending or receiving the funds transfer instructions, gets operated at one centre, viz, Mumbai only. The individual branches participating in NEFT could be located anywhere across the country, as detailed in the list provided on our website.

Q.4. What is the funds availability schedule for the beneficiary?

Ans : The beneficiary gets the credit on the same Day or the next Day depending on the time of settlement.

Q.5. How does the NEFT system operate?

Step-1: The remitter fills in the NEFT Application form giving the particulars of the beneficiary (bank-branch, beneficiary's name, account type and account number) and authorises the branch to remit the specified amount to the beneficiary by raising a debit to the remitter's account. (This can also be done by using net banking services offered by some of the banks.)

Step-2: The remitting branch prepares a Structured Financial Messaging Solution (SFMS) message and sends it to its Service Centre for NEFT.

Step-3: The Service Centre forwards the same to the local RBI (National Clearing Cell, Mumbai) to be included for the next available settlement. Presently, NEFT is settled in six batches at 0900, 1100, 1200, 1300, 1500 and 1700 hours on weekdays and 0900, 1100 and 1200 hours on Saturdays

Step-4: The RBI at the clearing centre sorts the transactions bank-wise and prepares accounting entries of net debit or credit for passing on to the banks participating in the system. Thereafter, bank-wise remittance messages are transmitted to banks.

Step-5: The receiving banks process the remittance messages received from RBI and effect the credit to the beneficiaries' accounts.

Q.6. How is this NEFT System an improvement over the existing RBI-EFT System?

Ans : The RBI-EFT system is confined to the 15 centres where RBI is providing the facility, where as there is no such restriction in NEFT as it is based on the centralised concept. The detailed list of branches of various banks participating in NEFT system is available on our website. The system also uses the state-of-the-art technology for the communication, security etc, and thereby offers better customer service.

Q.7. How is it different from RTGS and EFT?

Ans : NEFT is an electronic payment system to transfer funds from any part of country to any other part of the country and works on Net settlement, unlike RTGS that works on gross settlement and EFT which is restricted to the fifteen centers only where RBI offices are located.

Q.8. Any limit on the amount of individual transaction?

Ans : There is no value limit for individual transactions.

Q.9. What about Processing Charges/Service Charges

Ans : While RBI has waived the processing charges till March 31, 2009. With a view to rationalize the service charges levied by banks for offering various electronic products, a broad framework has been mandated as under: –

a) Inward transactions – Free, no charge to be levied
b) Outward transactions –
Upto Rs. 1 lakh - not exceeding Rs.5 per transaction.
Rs. 1 lakh and above – not exceeding Rs. 25 per transaction.

Q.10. How will I know which are the branches participating in the NEFT?

Ans : RBI publishes the list of bank branches participating in the NEFT on its website i.e. https://www.rbi.org.in/scripts/neft.aspx

Q.11. What is IFS Code (IFSC)? How it is different from MICR code?

Ans : Indian Financial System Code (IFSC) is an alpha numeric code designed to uniquely identify the bank-branches in India. This is 11 digit code with first 4 characters representing the banks code, the next character reserved as control character (Presently 0 appears in the fifth position) and remaining 6 characters to identify the branch. The MICR code has 9 digits to identify the bank-branch.

Q.12. How I will know, what is the IFS Code of my bank-branch?

Ans : RBI had since advised all the banks to print IFSC on cheques leaves issued to their customers. You may also contact your bank-branch and get the IFS Code of that branch.

Q.13. Whom I can contact, in case of non-credit or delay in credit to the beneficiary account?

Ans : Contact your bank / branch. If the issue is not resolved satisfactorily, the Customer Service Department of RBI may be contacted on nefthelpdeskncc@rbi.org.in or write to -

The General Manager,
Reserve Bank of India,
National Clearing Centre
First Floor, Free Press House
Nariman Point
Mumbai – 400 027

Q.14. Is it necessary to have a bank account to originate the NEFT transaction?

Ans : Yes, NEFT is an account to account funds transfer system.

Q.15. Is it necessary that the beneficiary should have an account at the destination bank-branch?

Ans : Yes, NEFT is an account to account funds transfer system.

Q.16. Can I receive foreign remittances through NEFT?

Ans : This system can be used only for remitting Indian Rupee among the participating banks within the country.

Q.17. Can I send remittances abroad using the NEFT?

Ans : No

Q.18. Can I originate a transaction to receive funds from another account?

Ans : No

Q.19. Can I send/receive funds from/to NRI accounts?

Ans : Yes, subject to applicability of provisions of FEMA

Q.20. Would the customer receive an acknowledgement of money credited to the beneficiary?

Ans : No, however electronic acknowledgement is generated for the customer that his money is received by the beneficiary at the sender branch.

Q.21. Would the remitting customer get back the money if it is not credited to the beneficiary’s account?

Ans : Yes, the remitting customer gets back the money if it is not credited to the beneficiary account.

Q.22. Till what time NEFT service window is available?

Ans : There are six settlements at 0900, 1100, 1200, 1300, 1500 and 1700 hours on weekdays and 0900, 1100 and 1200 hours on Saturdays.

Q.23. What is the essential information that the remitting customer would have to furnish for the remittance to be effected?

Ans : The essential information that the remitting customer has to furnish is:

* Beneficiary details such as beneficiary name and account number
* Name and IFSC of the beneficiary bank branch.

Q.24. Is there any way a remitting customer can track the remittance transaction?

Ans : The remitting customer can track the remitting transaction through the remitting branch only, as the remitting branch is informed about the status of the remitted transactions.