Technology in Banking-Insight and Foresight for BTA_2011 ... - IDRBT

More documents

Recommendations

Info

Technology in Banking – Insight & Foresight 30 Exhibit 19: Percent of electronic transactions (value) 3.3.5. Trends in Electronic Payments The paper-based systems categorized as a system-wide important payment system (SWIPS) still continue to dominate in terms of volume. However, its share has been declining both in volume and value terms in recent years. The RTGS system has been in operation in India since March 2004 and has been exhibiting rapid growth, not only in terms of volume and value of transactions, but also in the coverage of branches. During the year 2009–10, a total of 11,172 bank branches were added in the RTGS system, increasing the number of RTGS-enabled bank branches to 66,178. The efficiency of the RTGS system can be judged from the peak volume of RTGS transactions, which reached 248 thousand transactions on 30 March 2010, as compared to the last year’s peak level of 128 thousand transactions on 29 March 2009. NEFT (national electronic funds transfer) has been doing extremely well and the product is growing from strength to strength in terms of acceptability, reach and volumes handled. As at end-February 2011, around 75,000 branches of the 100 banks participated in the NEFT system and the volume of transactions processed increased to 13.5 million in February 2011. The concept of speed clearing was introduced in 2008, leveraging on the core banking infrastructure of banks. It has now been made available as a part of the Magnetic Ink Character Recognition (MICR), clearing at all the 66 MICR cheque processing centers (CPCs). This has reduced the time taken for the realization of proceeds of outstation cheques to T+2/3 days. The cheque truncation system (CTS), which involves the use of images for processing cheques in clearing, was introduced in the national capital region (NCR) of Delhi in 2008. It was meant to ensure the efficiency of cheque clearing as well as reduce the physical movement of cheques. With the complete migration of cheque volume to CTS, the MICR processing has been discontinued in the NCR and the CTS system now handles around 12% of the total cheque volume in the country. Currently, CTS is being rolled out at Chennai and it will soon be extended throughout the country. Institute for Development & Research in Banking Technology
Technology in Banking – Insight & Foresight 31 3.3.6. Electronification Approaches by Indian Banks Since the adoption of core banking systems by most banks, banks have started to focus on technology enablers in a broad spectrum of areas and electronification of payments is a major area in this direction. Banks have taken up the regulators initiatives seriously and have taken various steps to improve electronic channels to meet customer demands. 3.3.7. Internet Banking Currently, internet banking has emerged as a major banking channel in India. Most of the large and medium banks now offer internet banking and funds transfer facilities. While the large banks have developed specific infrastructure to handle large value transactions, even the small banks operate through shared resources. The positive fact is that most of the electronic transactions are through STP (straight through processing) in the larger banks. This trend will result in enhanced service delivery and quick settlement. Banks are offering several value-added services through their electronic channels such as tax collections, trading, bill payments, and viewing demat accounts, etc. Certain services such as prepaid mobile recharge have become extremely popular among consumers. 3.3.8. Upcoming Technology Architecture With the growth of the concept of payment hubs, the technology architecture for processing payments is going to change a lot. Banks are evaluating newer architectures such as payment hubs, which will act as the single point of routing for all payment transactions. 3.3.9. Fraud and Security Aspects of Electronic Payments Considering the inherent risks involved and as an important step toward encouraging the transition to alternate efficient electronic payment systems viz. RTGS, NEFT, the Reserve Bank discontinued the separate high value clearing (HVC) (i.e., same-day clearing of local cheques of INR1 lakh and above), which was operational at 30 large centers across the country. The cheques of higher value can, however, continue to be presented in the normal MICR clearing. 3.3.10. Emerging Payment Channels and Technologies The use of the electronic/online mode of payments for the purchase of goods and services and making payments to public utility companies is becoming increasingly popular. This involves intermediaries such as aggregators and payment gateway service providers handling customer funds. 3.3.11. Real Time Gross Settlement System RBI is working toward the implementation of the next generation real time gross settlement (NG- RTGS) system. The Reserve Bank has initiated steps to enhance the capacity of the hardware system in the short term by rationalizing the use of resources during peak and non-peak periods and has also initiated the process of enhancing the capacity. Moreover, several new features are being envisaged in the proposed NG-RTGS system such as advanced liquidity management facility; extensible markup language (XML)-based messaging system conforming to ISO 20022; and real-time information and transaction monitoring and control system. Institute for Development & Research in Banking Technology
Page 1 and 2: Technology in Banking Insight and F
Page 3 and 4: Technology in Banking - Insight & F
Page 31: Technology in Banking - Insight & F
Page 61: Technology in Banking - Insight & F

Technology in Banking-Insight and Foresight for BTA_2011 ... - IDRBT

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?