Page 36 - Banking Finance May 2020

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implementation of reliable techniques for control of risks and year. At the end of March 2019, the RTGS facility was
helps the financial intermediaries to reach remote and available through over 1.43 lakh branches of 216 banks.
diversified markets.
National Electronic Funds Transfer/ Electronic
Recentrends in IT in banking sector Funds Transfer (NEFT/EFT): Electronic Funds Transfer
The Indian banking industry has transformed tremendously. (EFT) is a system whereby anyone who wants to make
The payment and settlement systems recorded a robust payment to another person/company etc. can approach his
growth during 2018-19, with volume and value growing at bank and make cash payment or give instructions/
54.3% and 14.2%, respectively. The growth in both the authorization with Complete details such as the receiver's
parameters was higher compared to 2017-18, when name, bank account number, account type, bank name, city,
payment and settlement volumes and value increased 44.6% branch name to transfer funds directly from his own account
and 11.9%, respectively. The share of electronic transactions to the bank account of the receiver/beneficiary etc. NEFT
in the total volume of retail payments increased to 95.4% system handled 2.3 billion transactions valued at around Rs
in 2018-19, up from 92.6% in the previous year, the central 228 lakh crore in 2018-19, up from 1.9 billion transactions
bank observed. Some of the new trends witnessed by banking valued at Rs 172 lakh crore in the previous year, registering
sector are as follows: a growth of 19.1% in terms of volume and 32.3% in terms
Electronic Payment Services: In present scenario, with of value.
the growing concepts like e-governance, e-mail, e-
commerce etc. the Negotiable Instruments Act has already IMPS (Immediate Payment Services): IMPS stands
been amended to include; Truncated cheque and E-cheque for Immediate Payment Service and is an electronic system
instruments. for transferring funds in India. Funds can be transferred
24*7. The settlement takes place instantly unlike NEFT.
Real Time Gross Settlement (RTGS): The RTGS system
is maintained and operated by the RBI. Through RTGS Electronic Clearing Service (ECS): Electronic Clearing
electronics instructions can be given by banks to transfer Service is used to make bulk payments/receipts of a similar
funds from their account to the account of another bank. nature especially where each individual payment/receipt is
Funds transfer between banks takes place on a "Real Time" of a repetitive nature and of relatively smaller amount. This
basis. Under electronic payments, the Real Time Gross facility is meant for companies and government departments
Settlement (RTGS) system handled 137 million transactions to make/receive large volumes of payments.
valued at Rs. 1,357 lakh crore in 2018-19, up from 124 million
transactions valued at Rs. 1,167 lakh crore in the previous Automatic Teller Machine (ATM): ATM enables the
customers to withdraw their money 24 hours a day 7 days
a week. In addition to cash withdrawal, ATMs can be used
for payment of utility bills, funds transfer between accounts,
deposit of cheques and cash into accounts, balance enquiry
etc.

Point of Sale Terminal: Point of Sale Terminal is a device
that is linked online to the computerized customer
information files in a bank and magnetically or EMV chip
encoded plastic transaction card that identifies the customer
to the computer. During a transaction, the customer's
account is debited and the retailer's account is credited by
the computer for the amount of purchase.

Mobile Banking: Along with technological advancement,

36 | 2020 | MAY | BANKING FINANCE