13/11/2020
RTGS – REAL TIME GROSS SETTLEMENT
This system was started on 26 March 2004. This means that transfer occurs from one bank to another in Real time and on gross basis. RTGS guarantees same day settlement with almost instant money transfer facility. This requires the participating banks to hold one specific settlement with RBI. In this mode of money transfer, All transactional movements are to be done electrically using a special account with RBI. This increases the viability of fund ownership and payment movement.
Benefits of RTGS
Real time and faster online settlement system for fund transfer.
This helps in inter bank transaction of any amount.
Safe and Secure Electronic Transfer.
The facility is available from 9 AM to 4 PM on weekdays and 9 AM to 12 noon on Saturdays.
Only a small amount of fee is charged for the transaction. This fee varies from bank to bank.
NEFT – NATIONAL ELECTRONIC FUND TRANSFER
This scheme was launched in October 2005. This is the nationwide electronic fund transfer system. This enables fund transfer without the use of any physical movement of cheques or any other paper instruments.
Benefits of NEFT
This is available to the common public’s use through net banking and similar facilities.
Funds can be transferred with no hassle.
Making payments becomes much more easier.
It is a safe and secure system.
The transfer occurs free of cost.
The amount of money is restricted so no hacker can take away all your money.
ATM – AUTOMATED TELLER MACHINES
ATMS are virtual banking systems that gives the customer an inlet into major banking facilities without the involvement of any other human on the reverse end. The machines are installed at many locations across the globe to deposit and withdraw money.
They operate using a system that checks account holders authenticity and run on a pre-decided menu. The most important piece of vulnerable information is the ATM PIN.
ATMs are very customer friendly and simple. Customers can withdraw money, check balance and update settings through all the ATMs available.
Credit Cards
These are cards made out of plastic that have a microprocessor chip embedded on one side of the card and a magnetic strip on the other. It contains the name of the account holder and the validity and account number for the card.
Basically, a credit card is used to take loans in small amount from a banking facility that are paid later as bills. They act as a replacement for cash. Banks charge a small interest for their credit facility.
Credit Cards store a lot of information that are housed in the three main layers of credit cards. All the information is encoded in such a way that it is encoded by the use of a PIN provided to the customer.
Debit Cards
The version of plastic money which enables you to extract money from your own bank account through the use of some credentials contained in a card instantaenously are called Debit Cards. Debit cards were introduced for Electronic Fund Transfer at Point of Sale (EFTPOS) system.
When using credit cards, the delay between the time of purchase and the time that funds are debited to the account varies according to the bank and it is pretty large. This is not the same when using a debit card. No additional charges are recovered when money is taken from the bank accounts.
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Immediate Payment Service
IMPS is the instantaneous and real time electronic fund transfer system between banks. It offers electronic fund transfer service using mobile phones. It is managed by the NPCI using the already existing National Financial Switch. NPCI is the umbrella organisation that takes care of all the retail payment systems in India. It has the vision to make India e-payment accessible at all times and in all places.
RuPay
This is an Indian domestic card scheme that was launched by NPCI (National Payments Corporation of India) to fulfil the Reserve Bank of India’s desire to have a domestic, open loop, and multilateral system of payments in India. It facilitates electronic payments at all Indian Banks. It’s top competitors are Visa and MasterCard. It was started in 2012.
National Financial Switch
This organization constitutes the largest level of shared ATMs in India. The project has been created and presented under the Institute for Development and Research in Banking Technology (IDRBT). It is run under the NPCI. It was started in 2004.
Aadhaar Payment Bridge System
This is a centralized electronic benefit system that solves the purpose of distributing entitlements by the use of Aadhaar Numbers. This has a reliable and efficient mechanism that will bring about a strong and compelling case that might lead to the modernization of the entire government disbursement system.
We hope we have succeeded in making you understand the meaning of Modern Aspects of Banking and it’s related terms. Share this article about Modern Aspects of Banking with your friends to share the knowledge with them. Stay tuned to Studycopter for more information.
CTS
Cheque Truncation System (CTS) or Image-based Clearing System (ICS) is a project undertaken by the Reserve Bank of India (RBI) for faster clearing of cheques.
Cheque truncation means stopping the flow of the physical cheques issued by a drawer to the drawee branch. The physical instrument is truncated at some point en route to the drawee branch and an electronic image of the cheque is sent to the drawee branch along with the relevant information like the MICR fields, date of presentation, presenting banks etc. CTS / ICS substantially reduces the time taken to clear the cheques as well as enables banks to offer better customer service and increases operational efficiency by cutting down on overheads involved in the physical cheque clearing process.
UPI
Unified Payments Interface (UPI) is an architecture and a set of standard app APIs by RBI to facilitate the next generation online immediate payments. The UPI payments can be used for paying cash on delivery, merchant transactions at physical/e-commerce stores, transfer money to other people etc. without any need of entering card details such as number, expiry date, CVV code and OTP. UPI was launched by NPCI in 2016.
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