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Banking - NEFT and RTGS.

Banking - NEFT and RTGS.



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    Neft&rtgs Neft&rtgs Presentation Transcript

    • Group Members• Benson Verghese 19• Sarita Sapaliga 29• Aditi Mahapadi 40• Dhananjay Joshi 43• Shruti Ketkar 52
    • Evolution of the Payment System in India• Earliest Payment Instrument - Coins punch-marked orcast in silver or copper & credit system involved Bills ofExchange.• In ancient India - rnapatra or rnalekhya.• In Mauryan period – adesha• In Mughal period – dastawez  dastawez-e-indultalab  dastawez-e-miadi  barattes
    • • 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
    • • 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
    • Classification
    • 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
    • NEFT Transfer Online screen
    • PROCESS 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 centreProcessing & transmission of NEFT message to the beneficiary banks Data validation at receiving NEFT Service Centre Payment to beneficiary
    • How does NEFT system operateStep 1: First of all, the remitter has to provide the requisite information 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).
    • Step 3: The pooling centre forwards the message to the NEFTClearing 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 transactionsbank- wise and prepares accounting entries to receive funds from(debit) the originating banks and give the funds to (credit) thedestination banks. Thereafter, bank-wise remittance messagesare forwarded to the destination banks through their poolingcentre (the NEFT Service Centre).Step 5: The destination banks receive the remittance messagesfrom the Clearing Centre and pass on the credit to the beneficiaryaccounts.
    • Benefits• Faster – Its faster and more convenient than sending Demand Drafts / Cheques / Telegraphic Transfers.• 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 RBIs RTGS/NEFT system.
    • 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.
    • 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 time” and on “gross basis”• Money can be transferred to only those branches of banks where RTGS facility is enabled
    • Features of RTGS system• Participant Interface (PI)• Y-Topology
    • Features Contd.• Intra-day Liquidity Provision• Interaction with Net Settlement Systems
    • RTGS Transaction Flow
    • Criteria NEFT RTGSSettlement Done in batches (Slower) Real time (Faster)Minimum amount of money No Minimum 1 lacstransfer limitMaximum amount of No Limit No Limitmoney transfer limitWhen does the Credit Happens in the hourlyHappen in beneficiary Real time between Banks batch Between Banksaccount Upto 10,000 – Rs 2.5 Rs 25-30 (Upto 1 – 5 lacs)Maximum Charges as per from 10,001 – 1 lac – Rs 5 Rs 50-55 (Above 5 lacs)RBI from 1 – 2 lacs – Rs 15 (Lower charges for first half Above 2 lacs – Rs 25 of day)Suitable for Small Money Transfer Large Money Transfer
    • Thank You.