Payment & Settlement System in India PDF Download
Payment & Settlement System in India is an important topic in the banking sector. It is essential to understand the various aspects of the payment and settlement system in order to have a clear understanding of the banking system in India. Payment and settlement systems play a crucial role in the functioning of a modern economy, facilitating smooth and efficient transactions between individuals, businesses, and other entities. In this article, we will discuss the Payment & Settlement System in India and provide you with a PDF download link for further reading.
Payment & Settlement System in India: The Payment and Settlement System in India comprises the arrangements, infrastructure, and institutions that enable transfer of funds between individuals, businesses, and other entities. The Reserve Bank of India (RBI) is the apex regulatory authority for payment and settlement systems in India. The RBI plays a key role in formulating policies and regulations for payment and settlement systems and ensures that they are safe, secure, efficient, and accessible.
Types of Payment and Settlement Systems: There are various types of payment and settlement systems in India, including:
Real-Time Gross Settlement System (RTGS): RTGS is a system used for large value interbank fund transfers in real-time. The minimum amount that can be transferred through RTGS is Rs. 2 lakh. RTGS transactions are settled on a gross basis, which means that each transaction is settled individually and not on a net basis. The RTGS system is available on all working days, except on 2nd and 4th Saturdays of the month.
National Electronic Fund Transfer (NEFT): NEFT is a system used for interbank fund transfers of up to Rs. 2 lakh. NEFT transactions are settled on a deferred net settlement (DNS) basis, which means that transactions are processed in batches at pre-determined times during the day. NEFT is available 24x7, including weekends and holidays.
Immediate Payment Service (IMPS): IMPS is an instant payment system used for interbank fund transfers. IMPS enables customers to transfer funds instantly 24x7, including weekends and holidays, using mobile phones, internet banking, ATMs, etc.
Unified Payments Interface (UPI): UPI is a real-time payment system launched by the National Payments Corporation of India (NPCI). UPI enables customers to transfer funds instantly using a mobile application, without the need for bank account details.
Bharat Bill Payment System (BBPS): BBPS is a centralized payment system that enables customers to pay their bills, such as electricity, water, gas, and telephone bills, through a single platform.
Payment and Settlement System Institutions: In addition to the above payment and settlement systems, there are various institutions that play a key role in the payment and settlement system in India, including:
National Payments Corporation of India (NPCI): NPCI is an umbrella organization for all retail payment systems in India. NPCI was set up with the objective of promoting electronic payments and financial inclusion in India.
Clearing Corporation of India Limited (CCIL): CCIL is a central counterparty for all forex transactions in India. CCIL acts as a mediator between the buyer and the seller, ensuring settlement of transactions in a timely and efficient manner.
Clearing Houses: Clearing Houses are institutions that facilitate the clearing and settlement of cheques and other payment instruments. There are various clearing houses in India, including the National Clearing Cell (NCC), the Mumbai Automated Clearing House (MACH), and the Delhi Automated Clearing House (DACH).
Payment and Settlement System Regulations: The RBI has issued various regulations and guidelines for payment and settlement systems in India, including the Payment and Settlement Systems Act, 2007, and the Guidelines for Payment Gateways and Payment Aggregators, among others.