The Banking Industry is witnessing a revolution in products, process, market and regulations. And it’s a revolution that is not about to stop or even slow down. Since the only option is to adapt and evolve, it is essential that system have the flexibility to quickly adjust the need of today’s financial market.
It’s a tough challenge, because today’s fast moving market place is also extremely competitive. More over the need to retain the existing customers and attract new ones often conflicts with the need to reduce the cost and improve the efficiency. But what ever the challenges facing in retail banking operations the technology which help the Bank through online banking system to meet the over come of them.
Online banking system offers flexible, client server technology based on a scalable system. Its centralized, customer centric design to offers a complete set of integral retail banking modules sharing a user friendly interface. The modules are of two types
1. Customer transaction module and
2. Employee transaction module.
Customer Transaction Module : An enhanced atomized system is developed to maintain customer transaction. Features includes
Creation of new banking customer
Customer type – Current Account, Savings Account, Fixed Account Customer Creation Form.
Existing customer details
Customer Access Form
Each customer login identified by Access Code and Account No. Banking Main menu option like.
Transaction – Debit, Credit, Transfer
Customer Detail – Modify Details, Lock Customer.
Help – User Manual.
Employee Transaction Module : An enhanced automized system is developed to
maintain employee transaction. Features includes Customer Details
User can withdraw amount from his account.
User can credit the amount to the bank through cash or cheque. User can also transfer money from his/her account to another’s account within the bank. He can view and modify his details.
User can freeze/unfreeze his account.
User can view his transaction report for particular month.
No interest is given on current account.
In saving account 4% interest is given.
In fixed account 4% interest is given for 45 days, 4.5% is given for 3 months, 7% for 6 months, 9% for 1 year. Security of password
Online Banking system is developed for automate the process of day to day transactions of any bank, its all the features need to operate of Banking procedures which includes the
Core Banking Solutions : core banking solution is a comprehensive, integrated yet modular business solution that effectively addresses the strategic and day-to-day challenges faced by banks. It is highly parameterizable providing that much-needed flexibility to innovate and adapt to a dynamic environment.
The solution has an integrated CRM module enabling banks to offer a rich and differentiated value proposition to customers. The layered Service Oriented Architecture (SOA), Web-enabled technology and 24X7 operations ensure multi-channel, multi-country and multi-currency implementations. The functionality-rich modules in the solution provide banks with a varied palette of features to continuously innovate on their product and service offerings. From the services innovation perspective, Finacle offers a comprehensive and unified customer repository with capabilities to educate and empower customers. With Finacle core banking solution, banks can meet the challenges of managing change, competition, compliance and customer
Various modes of money transfer i.e., NEFT, RTGS.ECS and EFT etc
NEFT/RTGS: Revolution in cost effective domestic money transfer
NEFT : National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporate can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme. NEFT / RTGS are the cheapest mode of transferring money through banks in India. Corporate are saving huge money by utilizing the two but lack of awareness depriving the general public from such cheapest and fastest mode of transfer of money.
RTGS :The acronym ‘RTGS’ stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis. ‘Real Time’ means the processing of instructions at the time they are received rather than at some later time. ‘Gross Settlement’ means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable. NEFT (National Electronic Fund Transfer) and RTGS (Real Time Gross Settlement) are such transactions, which are being utilized heavily by corporate customers but yet to pick up by retail customers of the banks.
The two are the cheapest, most convenient and super fast mode of domestic money transfers available in banks in India. NEFT and RTGS are immediate real time transfers of money in the banks in India. The NEFT and RTGS are message based mode of funds transfer means for transfer of funds, message is being sent by originating bank branch (where customer account will be debited) to receiving branch where the beneficiary or intended customer will be having account through RBI intervention. The two systems utilize public key infrastructure based security system with sound legal based system and intervention of the RBI makes it reliable and secured. Specific features of NEFT: NEFT was introduced in 2005 and is highly improved version of EFT (Electronic Funds Transfer) that is available at select center whereas NEFT is available nation wide.
1.Different banks are charging different amounts on usage of NEFT and RTGS but still the two are the cheapest mode of funds transfer. RBI keeps watch on charges levied by banks in NEFT. Some banks are giving free NEFT to its customer up to an amount of Rs.50000/-. Means up to Rs.50000/- money from your account of State Bank Of Mysore at Bangalore (say) to your friends account at a branch of Canara Bank, Mumbai (say) can be transferred in a minute and to too without any cost, completely free. 2.There is no floor or cap on the amount of transfer in NEFT, means from an amount as small as one rupee to any amount one can transfer within a minute. To make the NEFT and RTGS cheaper and popular. RBI is not charging anything to banks on playing their role, for the time being.
3.NEFT facility is available at approximately 32407 banks branches of banks in India. These branches may be available in remote corner of country also. You may check your bank branch about NEFT availability. It is available in 67 banks and at more than 3000 centers (Review of Payment and settlement system in India 2006-07, RBI). 4.Money through NEFT can be transferred from Bank to Bank; only thing both the bank branch (the receiving and originating branch) should have IFSC code given by RBI. IFSC code is 4 alphas plus 7 numeric codes given by RBI, which is basic requirement for NEFT transfer.
Specific features of RTGS: For an amount over Rs 1.00 lakh, the exclusive message based system RTGS is very popular. Fixing of a floor limit differentiates RTGS and NEFT and hence RTGS is being used for remittance over Rs 1.00 lakh, while NEFT is treated as retail transfer for lower amount less than 1.lakh of Rupees. RTGS is available in 30472 numbers of branches across the country and banks. As per RBI, over a period, RTGS remittance has increased substantially. In 2009-2010, 68492 numbers of RTGS remittance took place amounting to Rs 2,49,662/- crore. This amount has increased to 24,81,779 numbers of RTGS transactions amounting to Rs 71,67,807.91 crore in 2010-2011.
Ease of Transactions: RBI has designed Both NEFT and RTGS in such a way that it gives you smooth, safe and fastest mode of transferring money across the banks in India. The simple prerequisite of availing this facility is as follows: — 1.IFSC Code: If possible get the IFSC Code (4 Alpha+7numeric code) for the branch where in intended account is maintained. However your bank itself will give information whether the receiving bank is having IFSC code or not. Without IFSC code NEFT/RTGS will not be possible. 2.Availability of funds at your account.
3.Account number and name of the beneficiary.
4.Branch code and name of the Bank of the beneficiary branch (which can be easily provided by the beneficiary to whom you are sending the money). If above mentioned details are available you can walk into your branch and feel the convenience of modern banking. The great thing is that some banks provide the facility of NEFT/RTGS through Internet banking. Means there is no need to even visit the branch for high value domestic remittances through NEFT/RTGS. One can send the remittance sitting at his work place. Precautions while conducting NEFT/RTGS:
1.Although these two remittances are almost error free but for future references please do not forget to take the 16 digits UTR No from your branch after the remittance instruction is sent by your branch. 2. Due to involvement of a third party (in this case RBI), there is cut off time limit to transfer the funds through NEFT/RTGS. Generally the instructions received up to 4pm (1600 hrs) are processed on the same day and almost immediate. What is NEFT and RTGS – Difference Between NEFT and RTGS online funds transfer?
NEFT and RTGS are the two convenient modes of money transfer between banks in India. The acronym “RTGS” refers to for Real Time Gross Settlement, it is a unique and popular fund transfer mechanism which enables the transfer of money between two banks on a “real time” and on “gross” basis. “NEFT” is the abbreviation for National Electronic Funds Transfer which is an online system for transferring funds between financial institutions.
This system was introduced in 2005 and is highly improved version of EFT (Electronic Funds Transfer) which was confined to a select centre. •The fundamental difference between RTGS and NEFT which can be clearly educed from the above definitions is that RTGS is based on gross settlement and NEFT is a net-settlement process. •RTGS is the swiftest money transfer system through the banking channel as it is done in real time (‘push’ transfer), while NEFT being net based is comparatively slower than RTGS. •In RTGS payment transaction will not involve any waiting period which is the true meaning of “real time” settlement.
Under normal circumstances the transactions are settled as soon as they are processed by remitting bank. The transaction is settled on one-one basis without clustering any other transaction making it a “Gross settlement”. The transaction is considered irrevocable as the money transfer occurs in RBI records. NEFT functions on a deferred net settlement (DNS) basis where transactions are completed in batches at specific times. These settlements takes place at a particular point of time and all transactions are held up till that time •Another significant factor that differentiates RTGS and NEFT is fixing a floor limit.
RTGS is an exclusive message based transfer mechanism for an amount over Rs 2 lakhs i.e the minimum amount to be remitted through RTGS is Rs.2 lakhs. There is no upper ceiling for RTGS transactions. Contrary to that, NEFT is used mainly to transfer funds below Rs 2 lakhs, and this system is most commonly used for smaller value transactions involving smaller sum of money i.e from an amount as minute as one rupee. However, there is no maximum limit for transfers through NEFT. •In RTGS the beneficiary bank credits the beneficiary’s account in a span of two hours post the receipt of funds transfer message.
RTGS transactions are processed throughout the working hours of the system. Marking its difference yet again NEFT is done on net basis where the bank clubs transactions together and only the net amount is transferred. This settlement usually takes place 7 times a day on weekdays and 3 times on Saturdays. NEFT takes place within the same day if it is within the cut-off time and the next working day if it is beyond the prescribed cut-off time. •Majority of the commercial banks have employed RTGS and it is available in over 30472 numbers of branches while the count of banks which have purchased the software required to facilitate NEFT based transaction are over 89 and NEFT facility is available at approximately 32407 branches of banks in India. These branches may be available in remote corner of country also.
Hence, RTGS and NEFT though distinct in their functionality and process, are unique and similar in their ultimate service which is now rendering plethora of advantages making the easiest service available in service sector industry across globe. Conclusion: RBI in its review on the payment system in India has told that lack of awareness in coming on the way of effective usage of such revolutionary payment system in India.
Large corporate bodies have taken no of initiatives for the adoption of new payment modes but need is there the general public should be aware of this facilities and hence should be able to utilize it effectively and take the advantage in the form of cost saving, time saving and ease of banking. So say good bye to costly and slow mode of remittance like demand draft, banker’s cheque and switch over to cheapest and immediate transfer mode NEFT/RTGS. A Good Example – Services Provided by ICICI Bank
ICICI Bank provides money transfer services under different names of e – Transfer, Cheque Transfer, Power Transfer, Net Express and Card Transfer. Each of these services vary according to the procedure to be followed and the transfer period. These services are designed according to convenience of different group of customers. There are also similarities in some of the features of various services. The table given below explains some of the common features of different services. e-Transfer – With e-Transfer, debit in your local bank account in USA and withdraw from a bank account in over 30 banks in India as a DD. Cheque Transfer – Money transfer with this methods is faster compared to that of traditional mailing mode to India. You have to post a printed form from ICICI website along with cheque to a local P.O. Box.
Money will be transferred within 1-7 days on the receipts of cheque by the bank. All the advantages of online money transfer is available with this method such as online tracking, free money transfer to ICICI Bank account, best exchange rates etc. Power Transfer – Money transfer is possible with this method with in 48-96 hrs. This is a wire transfer facility with options for multiple currency debit. Net Express – You can transfer money to India from your internet bank account. This facility is available in U.K., Singapore, France and Germany. Card Transfer – In this methods you can debit using your Credit Card. (Master Card). Money is transferred within 3 working days.
This mode also has the advantage of using the credit period. A benefit offered by the card issuer. Me-NRI, NRI-Direct – Those are specially designed online money transfer services offered to Gulf NRIs. ICICI Bank in alliance with Me-Bank in UAE (Me-NRI) and with Commercial Bank in Qatar (NRI-Direct) offers specialized money transfer services to residents of UAE & Qatar respectively. Remittance Card
: In 2007 ICICI Bank introduced standalone card based transfer system. NRIs can charge these card at thier own ease using bank accounts and credit cards. Beneficiary can use the card over ICICI bank affiliated ATMs to withdraw amounts upto 50000 at a time. The card is re-usable and faster than other methods. Features
Completely online – no paper work required.
e-Transfer, Net Express,Card Transfer
Free money transfer in to ICICI bank accounts across India. e-Transfer, Net Express, Cheque Transfer, Power Transfer.
Money transfers above $1000 or equivalent into 30 other banks in India are free; for lesser amounts nominal fee is charged. For all the online money transfer services.
Online tracking of transactions.
For all the online money transfer services.
Best Exchange Rate
For all the online money transfer services.
Issuing DD for non-ICICI bank beneficiaries around 1750 locations in India. e- Transfer, Power Transfer
Money transfer period of these services vary as follows
e-Transfer – within 1-2 working days Cheque Transfer – 1-7working days
Power Transfer – 48-96hrs.
Card Transfer – 3working days
Branch Remittance – Money transfer to India can be made through ICICI Bank overseas branches located in Canada, Britain and U. K.. Instant money transfer can be done through these branches for the customers and non customers of ICICI Bank at these regions. ICICI – Well Fargo Services – ICICI Bank and Wells Frago USA offer this money transfer service after an alliance agreement. Money can be sent to India from a Well Frago Branch or ATM centre in USA. Transfer occurs in 24hrs. Insta Transfer – This service is made available in Gulf Countries by ICICI Bank.
Your ICICI bank account can be credited instantly approaching the partnering exchange houses or banks. Speed Transfer – This is a fast money transfer service with turnaround time of 24 hrs. through partner exchange banks in different countries. Demand Draft – An instant DD across the counter in INR available at the partner exchange banks of ICICI Bank which is payable in different locations of ICICI bank. Home Point – This service is available only in Canada. You can transfer within 2hrs from any of the partner banks in Canada. Cheques – Foreign Currency Cheques can be deposited in ICICI Bank and credit is usually available with in 8 days.
Wire Transfer – Here you can remit money from your local bank to any ICICI bank account by giving them wire transfer instructions. Money usually transferred within 24-48 hrs. Remit2India Services Remit 2 India.com offers online money transfer services to India. In USA this facility is provided through automated clearing houses and in UK through customer initiated payments. Remit 2 India offer complete web based money transfer service where money is deposited in receiver’s bank account across 54 banks including 1800 SBI branches or a DD is delivered at the receiver’s door step if the receiver has no account. You can send upto $5000 using this service.
Fast Track Transfer – This service is offered in UK through money brokers and an over night remittance in to the specified bank account is possible. You can send up to GBP1000. Cheque Transfer – The steps to be followed with this mode of money transfer is to book a remittance online and mail cheque for the remittance amount along with remittance booking from to the local cheque collection boxes. Once the money is cleared and transferred to Remit 2 India account, the money is delivered to the designated address or bank account.
Wire Transfer – Money from the existing bank account can be transferred to India using this facility. After completing the transactions handover remittance booking from to your bank for transferring the money to remit 2 india.com accounts. with n 48 hrs. the money transfer to India is completed. Fixed Amount Remittance – With this method, at the time of booking the amount to be sent to the beneficiary can be fixed up to $5000 and can be sent via complete online transfer. PayPal Transfer – This facility is offered for sending money from USA to India through PayPal network. Up to $5000 can be transferred using this facility. The table given below explains some of the common features of various services. Features
Money deposited to receiver’s bank account across 54 banks including 1800 SBI branches. Fastrack Transfer, Cheque Transfer, Wire Transfer, Fixed Amount Transfer, PayPal transfer In case the receiver doesn’t have an account in partner banks, DD is delivered at the doorstep. Around 6000 destination have this facility. Fastrack Transfer, Cheque Transfer, Wire Transfer, Fixed Amount Transfer, PayPal transfer Online tracking facility to know the status of transaction.
Fastrack Transfer, Cheque Transfer, Wire Transfer, Fixed Amount Transfer, PayPal transfer Send upto $7500 or equivalent. Cheque Transfer, Wire Transfer Xoom Money Transfer Xoom Corporation is a San Francisco, USA based company provide secure and easy money transfer facility to India. The sender should have a bank account or credit/debit card and internet access. The recipient need not have either of these facilities. When the money is sent to India through Xoom, it is made available for recipient to pick up or deposited in a bank account
This service is entirely web based, where sender can use his credit card / debit card for remitting the amount though their website. After remitting you are asked to provide the details of recipient. Electronic Clearing System (ECS) : It stands for Electronic Clearing Service ECS is an electronic mode of payment / receipt for transactions that are repetitive and periodic in nature. ECS is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc.
Essentially, ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa. Electronic Clearing System (ECS) is a facility which customers can avail by which the outstanding on the customer’s card account will be directly debited from the customer’s designated bank account on the due date.