Payment System In India
to BIS ―A payment system consist of
instruments, banking procedures and typically interbank funds transfer that
ensures and facilitate the circulation of money. In essence, it facilitates
corporation, businesses and consumers to transfer funds to one other‖.
The Reserve Bank of India‘s
publication on Payment Systems in India (2009–12).
India has multiple payments and settlement systems.
RBI Still continues to evolve new payment methods
and slowly revamping the payments and settlement capability in India.
supports a variety of electronic payments and settlement system,
A. Gross Settlement System:
ECS - Credit
ECS – debit
Credit cards and Debit cards
National Electronic Funds Transfer (NEFT)
Indo-Nepal Remittance Facility Scheme
1 Real Time Gross Settlement(RTGS)
The Reserve Bank of
India (India's Central Bank) maintains this payment network.
RTGS system is
a funds transfer mechanism where transfer of money takes place from one bank to
another on a 'real time' and on 'gross' basis. This is the fastest possible
money transfer system through the banking channel.
in 'real time' means payment
transaction is not subjected to any waiting period. The transactions are
settled as soon as they are processed.
'Gross settlement' means the transaction is
settled on one to one basis without bunching with any other transaction.
RTGS vary from bank to bank.
RTGS is a
large value . Minimum value of transaction should be 2,00,000.
can access the RTGS facility between 9 am to 4:30 pm on weekdays and 9 am to
2:00 pm on Saturdays.
service window for customer's transactions is available from 9:00 hours to
16:30 hours on week days and from 9:00 hours to 14:00 hours on Saturdays.
Transaction on weekly holidays and public holidays.
Service Charge for RTGS
1%, no charge to be levied. b) Outward transactions
transactions of 2 lakhs to 5 lakhs - not
exceeding 30 per transaction, (+ Service Tax).
lakhs -Not exceeding 55 per transaction, (+ Service Tax).
National Electronic Fund
The national electronic fund transfer (NEFT) system
is a nation-wide system that facilitates individuals, firms and corporates to
electronically transfer funds from any bank branch to any individual, firm or
corporate having an account with any other bank branch in the country.
part of the NEFT funds transfer network, a bank branch has to be NEFT-enabled.
end-January 2011, 74,680 branches / offices of 101 banks in the country (out of
around 82,400 bank branches) are NEFT-enabled.
Service Charges for NEFT
transactions up to 10,000:
exceeding 2.50 (+ Service Tax)
transactions above 10,000 up to 1 lakh:
exceeding 5 (+ Service Tax)
above 1 lakh and up to 2 lakhs:
exceeding 15 (+ Service Tax)
transactions above 2 lakhs:
exceeding 25 (+ Service Tax)
Indo-Nepal Remittance Facility
Remittance Facility is a cross-border remittance scheme to transfer funds from
India to Nepal, enabled
under the NEFT Scheme.
scheme was launched to provide a safe and cost-efficient avenue to migrant
Nepalese workers in India to remit money back to their families in Nepal
A remitter can transfer funds up to 50,000 (maximum
permissible amount) from any of the NEFT-enabled branches in India.The
beneficiary would receive funds in Nepalese Rupees.
Inter Mobile Payment system
Payment Service (IMPS) is an initiative of National Payments
Corporation of India (NPCI). It is a
service through which money can be transferred immediately from one account to
the other account, within the same bank or accounts across other banks.
registration, both the individuals are issued an MMID(Mobile Money Identifier)
Code from their respective banks.
This is a
7 digit numeric code.
initiate the transaction, the sender in his mobile banking application need to
enter the registered mobile number of the receiver, MMID of the receiver and
amount to be transferred.
successful transaction, the money gets credited in the account of the receiver
facility is available 24X7 and can be used through mobile banking application.
Electronic Clearing Service (ECS
―Credit-push‖ facility or one-to-many facility this method is used mainly for
large-value or bulk payments where the receiver‘s account is credited with the
payment from the institution making the payment.
payments are made on a timely-basis like a year, half a year, etc. and used to
pay salaries, dividends or commissions.
it has become one of the most convenient methods of making large payments.
Electronic Clearing Services (ECS
many-to-one or ―debit-pull‖ facility this method is used mainly for small value
payments from consumers/ individuals to big organizations or companies.
eliminates the need for paper and instead makes the payment through
banks/corporate or government departments.
It facilitates individual payments like telephone
bills, electricity bills, online and card payments and insurance payments.