 On lining of Society is also known as computerization, digitalization of Society

 On lining of Society helps both society and its customers

 On lining of society helps customers to
 View account balance
 View recent transactions
 Download account statement
 Fund transfer
 Open additional accounts
 Bill Payments
 Purchases
 Make Immediate banking work done
 Less time
 Anywhere any time banking
 Secured

 On lining of society helps society to

 Quick customer service
 Centralized management
 Manage more accounts
 Accurate banking calculations
 Store more accounting data
 Retrieve data
 Report generation
 Transparent service
 More variety of service to customer
 More customers

CBS – CORE BANKING SOLUTIONS

 Simple way connecting all branches, Head office by connecting to a central

computer/server at Data center
 Centralized network
 Total Branch Automation is old fashion
 Single computer handles live data from branches
 Centralized Accounting
 Centralized Monitoring
 Centralized Reporting
 Components of Core Banking
o Software – Operating system and other applications
o Hardware – Computers, Servers, Printers
o Data Base – Oracle, MySQL
o Connections – WAN, LAN
o Power supply – EB, Generator
o Anti virus – Macfee, Symmantec
o Data center/Disaster Recovery center
 All customers services are comes in CBS – Deposit , loans
 CIF – Customer Identification Form number should be created
 Computerized Reporting
 Centralized Authorization (Maker – Checker Concept)
 RBI – December 2007 created a committee ( Chairman – R.Gandhi RBI) for
computerization of cooperative Banks. Submitted report on August 2008, recommends
minimum level of computerization
o Computerization front end – customer interface
o Automatic Back end – Accounting
o Computerized Report
 Various CBS application available – BaNCS, Finacle,Flexcube
 CBS application providers – TCS, Infosys, Oracle Corporation
ELECTRONIC PAYMENT
CHANNELS
ELECTRONIC PAYMENT AND SETTLEMENT SYSTEMS IN
INDIA

 Payment and settlement systems in India is for financial transactions.

 Comes under the Payment and Settlement Systems Act, 2007 (PSS Act), legislated in
December 2007.
 Regulated by the Reserve Bank of India and the Board for Regulation and Supervision of
Payment and Settlement Systems.
 Electronic Payment and settlement System is the easy way of payment. (e-Payment)
 Some of e-Payments are
 ECS Debit/Credit
 NACH (National Automated Clearing House)
 NEFT (National Electronic Fund Transfer)
 RTGS (Real Time Gross Settlement)
 IMPS (Immediate payment System)
 BBPS (Bharat Bill Payment System)
 UPI (Unified Payment Interface) – BHIM (Bharat Interface for Money)
 AEPS (Aadhaar Enabled payment System)
 ECS

 ECS – Electronic Clearing Service

 ECS is an electronic mode of payment / receipt for transactions that are repetitive and periodic
 Bulk payment of amounts
 ECS Schemes – Local ECS, Regional ECS and National ECS
 Local ECS – this is operating at 81 centres / locations across the country. One city maximum coverage
 Regional ECS – this is operating at 9 centres / locations at various parts of the country. Core banking
enabled banks can use. State level coverage
 National ECS – this is the centralized version of ECS Credit. Coverage of all core-banking enabled
branches located anywhere in the country.
 Two variants of ECS - ECS Credit and ECS Debit
 ECS Credit payments can be initiated by any institution which needs to make bulk or repetitive payments to
a number of beneficiaries. The institutional User has to first register with an ECS Centre.
 ECS Debit transaction can be initiated by any institution (called ECS Debit User) which has to receive /
collect amounts towards telephone / electricity / water dues, cess / tax collections, loan installment
repayments, periodic investments in mutual funds, insurance premium etc.
 Payments through ECS Credit has to submit details of the beneficiaries (like name, bank / branch / account
number of the beneficiary, MICR code of the destination bank branch, etc.),
 NACH

 NACH – NATIONAL AUTOMATED CLEARING HOUSE

 Handled by NPCI (National Payment Corporation of India)
 Facilitates high volume transactions &Repetitive and periodic transactions
 NACH credit ,NACH Debit
 Customer can initiate NACH mandate from corporate and also from society
 NEFT

 NEFT - National Electronic Fund Transfer

 NEFT system is a Nationwide funds transfer system.
 Inter Bank Transaction ( One Bank A/c Holder to Another Bank A/c Holder)
 One –to-One funds Transfer.
 Can transfer funds from any bank to any other bank.
 Centralized accounting system and the bank's account, that are sending or receiving the
funds transfer instructions, gets operated at one centre, viz, Mumbai only.
 NEFT based on DNS ( Deferred Net Settlement) which is in Batch.( Bunch of
Transactions processed)

Transaction Timings NEFT

24 * 7
 Batch Transactions happens every 1 hour.
 Amount credit to beneficiary will happen in 1 hour.

Amount Sending Limit NEFT

Minimum Rs. 1

Maximum No Maximum limit (Any amount can be send)

*Bank can set Limit for Maximum sending Amount
 NEFT amount settled on netting basis.
 RTGS

 RTGS – Real Time Gross Settlement.

 Now we are using NGRTGS (New Generation RTGS) from 2014
 Transfer of money from one bank to another on a ‘real time’ basis (No wait Time)
 Transfer of money on gross basis.Gross settlement means the transaction is settled on one
to one basis without bunching with any other transaction.
 RTGS is for high value Transaction ( Above 2.00 Lakhs)

Transaction Timings RTGS

24 * 7
 RTGS not available on Bank Holidays.

Amount Sending Limit RTGS

Minimum Rs. 2,00,000

Maximum No Maximum limit (Any amount can be send)

*Bank can set Limit for Maximum sending Amount
Details Needed to Send NEFT/RTGS:
 Debiting A/c Number
 Debiting Amount
 Mobile Number of sender
 Mode of Transfer (NEFT/RTGS)
 Beneficiary A/c Number
 Beneficiary Name
 Beneficiary Bank Name and Branch
 Beneficiary A/c type (Saving, Current, loan...)
 Beneficiary Bank IFSC (Indian Financial System Code)

Channels of NEFT/RTGS:

 Bank Counter
 Net Banking
 Mobile Banking
 ATM
NEFT/RTGS TRACKING:

 NEFT/RTGS can be tracked using UTR Number (Unique Transaction Reference)

 NEFT UTR will be 16 Alpha –Numeric character
 NEFT UTR will be 21 Alpha –Numeric character

Sponsor Bank -
Sender Sender Bank TNSC

Sender A/c Sender Bank

Debited A/c Debited IDRBT RBI
hhh
hhhshh

c
r A/
ve NEFT -1 Hour Batch
Receiver A/c cei ed RTGS - Immediate
e t
Credited R ebi
D

Receiver Receiver Bank

CTS

 CTS – Cheque Truncation System

 Cheque clearing system handle by RBI for faster clearing of cheque
 All over India single Clearing
 No physical movement of cheques only electronic Image
 Time reduction
 Same Day settlement is possible, maximum of 24 hours
 Cheque scanned and image only processed for clearing
 MICR code - Magnetic Ink Character Recognition (9 digit) is used
 Reserve bank will provide Clearing House Interface (CHI) application software to the
member banks
 Possibility of cheque lost reduced
 Like money, cheue has some uniqueness like CTS India , VOID, CTS 2010 is under
usage now

RuPay CARDS

 RuPay cards is our Indian card scheme handled by NPCI

 Rupay – Rupee & Payment
 RuPay is accepted in all ATMs all over India
 RuPay Cards are accepted at all PoS (Point of Sale) terminals in India
 RuPay Cards are accepted in all E-commerce sites
 RuPay comes with EMV chip based
 Rupay can be used for any account
  EMV – Europay, Master card, VISA – global standard chip technology
 Magnetic Strip also included in the Card
 Contactless RuPay card will come soon

ATM
 ATM – Automatic Teller machine
 Any Where Any Time – All over India
 24/7 working
 ATM machine allows customers to check their account balance and also some banking
operations like Fund transfer, Cheque Book request, Pass book printing, Cash deposit,
etc.,
 Two way Authentication – CARD & PIN
 ONUS Transactions (Our card on our Bank ATM)
 OFFUS Transactions (Our card on Other Bank ATM)
 OFFUS transaction / LORO transaction – NPCI involvement
 NPCI provides reports on transaction
 3 Way Reconciliation – Day to day reconciliation to be done
 Any dispute – DMS of NPCI will helps
 PoS
 PoS – Point of Sale (Check out Point)
 Useful for Retail level Transitions
 Card present transactions
 NPCI handles all PoS transactions
 Chip based transactions are insisted by RBI
 3 Way Reconciliation – Day to day reconciliation to be done
 Any dispute – RGCS(RuPay Global Clearing & Settlement) of NPCI will helps
 E – Com
 E- Com – Electronic Commerce / e- Shopping
 Online Trading, Purchase through our society
 Settlement process will be taken care by NPCI
 Card not present transaction
 Can do Business to Business Transactions
 Can do Business to Customer Transactions
NET BANKING
 INTERNET BANKING

 Internet banking is an electronic system that enables customers of a bank to carry out

various financial and non-financial transactions through the bank’s website.

 Internet banking is also known as online banking, e-banking or virtual banking

 Generally, the banks will host their web sites at ‘.com’ domain and e-Banking sites at

‘.net’ domain.

 Internet banking facility is provided by the bank to its customers.

 Credentials, such as userID, Login Password, Transaction Password etc, should be

obtained by the customer from the bank to access their e-Banking facility.

 Must be highly careful with these credentials. They should not be shared with anyone

else. It may lead to misappropriation of funds from the account.

 User Credentials should not be written down in usual places like diary, personal note

books, calendar etc.

 Passwords should not be easily identifiable. It should be a mix of alphabet and numbers.

Special characters can also be added to make the password difficult to guess.

 Passwords should be changed periodically to avoid others from guessing the passwords.

 KYC compliance is a must. KYC score, as advised by RBI, must be greater than 110.

 The customer while transferring funds using Internet Banking module of a bank, the bank

system checks if the beneficiary bank is same or different.

 If the beneficiary bank is same, the transaction is INTRA Bank Transaction.

 If the beneficiary bank is different, the transaction is INTER Bank Transaction.

 If the customer intends to transfer from one of the customer’s account to other account of

the same customer, the transaction is said to be “OWN ACCOUNT” Transfer.

 Interbank transaction requires the beneficiary details such as Account Number, Bank,

Branch or IFS Code etc.

 In case of Intra Bank Transfer and Own Account Transfer, the customer’s account is

debited and credited instantly.

 The transfer request is handled within the bank systems and responded back

spontaneously

 In case of Inter Bank transaction, the request message from the originating bank is sent to

a central Switching spot, where the requests are handled by the switch and forwarded to

the corresponding bank’s branch pointed by the provided IFS Code.

 The beneficiary bank then spots the mentioned beneficiary account, credits the account

and responds back to the originating bank with a ‘SUCCESS’ message.

 If there are any mistakes in the account number, and no such account exists with the

bank, then the beneficiary bank rejects the request with a ‘FAILURE’ message.

 If there are any mistakes in the account number, and there exists an account with that

number with the beneficiary bank, then the account is credited.

 Utmost care must be exercised while adding a beneficiary.

 Addition of beneficiary is usually trailed by a specified ‘Cooling Period’. This is for the

customer to revert back to the bank for any changes or claims in the beneficiary details

added.
 MOBILE BANKING

 Mobile banking is a provided by a bank to allow its customers to carry out various

transactions remotely using a mobile device such as a smart phone or tablet.

 Mobile banking facility can be utilized only through the specific application (Mobile

App) provided by the bank.

 Mobile banking is available on a 24-hour basis.

 The maximum amount per transaction is limited in mobile banking when compared to net

banking.

 Mobile banking facility is provided by the bank to its customers.

 Credentials, such as userID, Login Password, Transaction Password, mPin etc, should be

obtained by the customer from the bank to access their mobile banking facility.

 Mobile banking App shall be downloaded from the ‘Play Store’ for Android phones,

‘App Store’ for IOS phones, etc.

 Mobile apps should be logged off after completing the transactions.

 The transaction flow is same as the Internet Banking, except that it is carried out through

the specific App developed for the hand held mobile device.

 The use of app for carrying out banking transactions is easier and more user-friendly.

 Hence the security levels for Mobile Banking is higher than that of Internet Banking

system
 IMPS

 IMmediate Payment System (IMPS) is an extended facility provided by the banks

through their existing Internet Banking and/or Mobile Banking channels.

 IMPS ensures immediate transfer of money from the sender to the beneficiary.

 IMPS service can be availed by the customers of the bank who have applied and availed

the Internet Banking and/or mobile banking facility.

 National Payments Corporation of India (NPCI) acts as the middleman in routing the

transfers to the specified accounts at the mentioned bank’s branches.

 MMID for the customer shall be generated instantly

 IMPS has no lower limit.

 IMPS is a hybrid technology between RTGS and NEFT.

 IMPS has no defined maximum limit. But the maximum cap may be fixed by each bank

depending upon the various business and strategic criteria

 IMPS transactions are settled four times a day at specified times and intervals

 IMPS is available anytime throughout the year

 IMPS offers interbank electronic fund transfer service capable of processing

 From person to person, using MMID

 From person to account, using beneficiary details

 From person to merchant remittances - ABRS

via mobile, internet and ATMs.

 Sender & Receiver - Have to register for Mobile Banking & get a unique ID

called "MMID"
 Generation of MMID is a One-time process

 Remitter (Sender) transfer funds to beneficiary (Receiver) using Mobile no. & 7digit

MMID of beneficiary.

 Different MMIDs can be linked to same Mobile Number

 In the cases where Remitter is enabled on Mobile Banking, but Beneficiary mobile

number is not registered with any bank account, Remitter shall send money to the

Beneficiary using Beneficiary account number and IFS code as well, in addition to

Beneficiary mobile number and MMID.

 In ABRS – Aadhaar Based Remittance Service, a remitter can initiate IMPS transaction

using the beneficiary's AADHAAR number.

 BILL PAYMENTS

 Banks provide a facility for their customers to pay their bills online.

 Online Bills Payment facility avoids the need for the customers to pay the bills at the

counters.

 Instead, they may make all the payments from their places with ease.

 All the bank’s customers with Online Banking facility may pay their bills online.

 The user accesses the merchant websites and fills in all the required details and proceeds

to the payment.

 During the payment, the request from the merchant site reaches the aggregator and the

aggregator forwards the message to the banks.

 The banks on receiving the message, verifies the account holder details and the account

balance. On positive verification the customer’s account is debited and the aggregator’s

transit account maintained with the bank is credited with the payment amount as

mentioned by the user/customer.

 The aggregators on receipt of the amount, will intimate the merchants and the user gets

the service from the merchants.

 The transit account is tallied periodically and the accumulated amount is settled to the

aggregator(s) on the next working day.

 The amount collected by the aggregator from the user is settled to the merchants within

two working days.

 If there is any disturbance in the flow of requests from the bank to the aggregator, then

the amount, if debited from the customer, will be returned back on the same day.
 If there is any disturbance in the flow of requests from the aggregator to the merchant or

henceforth, then the amount transacted will be reverted or credited at the discretion of the

merchant.
 UBP

 Utility Bills Payment is the facility offered by the banks to customers through their

Internet Banking Channels.

 The UBP service is offered by the banks with the help of aggregators.

 In this scenario, the user logs in to a single bank and find the list of merchants from

which, the user can choose the required merchant of choice and proceed with the

payment from the same site.

 The UBP is an extended version of Bills Payment facility.

 UBP doesn’t require the bank’s customer to visit the merchant site.

 Instead, the customer may prepay or post pay their bills right from the e-Banking site of

their banks.

 This facility eliminates the necessity for the user to

 Submit their user details to a third party

 Login multiple times (once to the merchant site, secondly to the bank’s payment

site)

 Maintain and remember the credentials for different merchants.

 SSO Payments (Single Sign-On Payments) can be made.

 Make multiple payments to multiple merchants at the same time.

 Easy, Secure and Reliable means of Bill Payment

 The user is required to register only once in the site and proceed with the payments for

any number of times henceforth.

 BBPS

 Bharat Bill Payment System is a Bill Payment system similar to UBP.

 BBPS is conceptualized by RBI

 BBPS has the following characters:

 Interoperable- BBPS connects the banks and non-banks in bills aggregation

business, Billers, payment service providers and retail bill outlets.

 Accessible- Facilitate easy payment of bills through both digital and physical

channels

 Cost-effective- Most cost-effective for entire ecosystem

 Integration- Bharat Bill Payment Operating Units (BBPOU) will have to connect

only to Bharat Bill Payment Central Unit (BBPCU) to get access to all the billers.

Utility companies just need to connect to maximum two BBPOUs to enable all

customers to pay bills.

 Complaint Management- Standardized system to handle customer grievances for

both ON-US and OFF-US transactions

 Dispute Management- Facilitate BBPOU’s to raise and resolve disputes relating

to transactions that have passed through the BBPS system

 Clearing & Settlement- Multiple Clearing & Guaranteed Settlements between

different parties standardized TAT

 Standardization- Standardization of processes for entire BBPS ecosystem

 Brand Connect- Single and trusted brand connect and BBPS Assurance
RECONCILIATION
 RECONCILIATION

 Reconciliation is an accounting process that uses two or more sets of records to ensure

figures are correct and in agreement

 Reconciliation provides consistency and accuracy in financial accounts.

 Reconciling the financial statements is a powerful tool to identify any mistakes or

misappropriations made during the day and provides room for us to proceed with the

corrective measures proactively.

 ATM – EJ scroll, Switch file, CBS file, NPCI file

 IMPS, POS have a Four way reconciliation – Switch file, CBS File, NPCI File

 Bill Payment through Bill Desk has a Three way reconciliation – CBS file, BillDesk file,

Switch file.

 CBS entries must be reconciled by means of ‘Matching Entries’ passed.

 Reconciliation must be a daily routine to avoid accumulated hassles.

 Reconciliation is a must for a healthy financial environment

 Reconciliation must be a two step process

 Reconciliation should involve a ‘Maker’ and ‘Checker’

 This minimizes the chances of missing out any vital detail, which may cost the reputation

of the institution.

 Prompt identification of faults or issues enables timely action preventing huge losses.

UPI issuer

C KYC, EKYC,