PAY

Information updated till December, 2017

For RBI, IBPS, SBI& other Banking & Government Exams

PAYMENT MODES

IN INDIA

BANKING AWARENESS

E-BOOK

Questions on banking awareness are common in the general awareness section of

Bank & Government exams. To aid your preparation, we are providing the following eBook

which describes the various payment modes in our country

2

BHIM App is based on

a) USSD

b) NEFTc) UPI

d) RTGS

Solution: c

2

Payment Modes In India

In competitive exams, as little as 1 mark can make a lot of difference. To help our students increase their knowledge, we are providing a list of payment modes in India along with a brief description, in the following pages of this e-book.

PAYMENT MODES IN INDIA

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CHEQUES

ELECTRONIC CLEARING SERVICE (ECS)

- Outer time limit for collection of outstation cheques drawn on

state capitals / major cities / other locations is 7/10/14 days

respectively

- Banks cannot charge the collection charges more than the

RBI prescribed charges ranging between 25 and 100

(excluding service tax) for cheques up to 1 lakh. Over

1 lakh, banks x their own charges.

- No additional charges such as courier, out of pocket

expenses, etc, can be levied by banks.

- If there is any delay in collection beyond stipulated period,

bank has to pay interest at the rate specied.

- No service charge is levied to the Saving Bank customers for

cheques up to 1 lakh cleared under speed clearing.

- It is an electronic mode of payment / receipt for bulk

transactions that are repetitive and periodic in nature. Once

the customer subscribes to the facility by giving a mandate

(authorization), the funds are transferred on the due date

from/into the bank account electronically.

IDEAL FOR:

- ECS Debit for paying utility bills, EMIs, school fees etc.

- Use ECS Credit for paying salary, dividends, interest etc.

PAYMENT MODE IMPORTANT POINTS

Payment Modes In India

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3

Payment Modes In India

NATIONAL ELECTRONICS FUND TRANSFER (NEFT)

REAL TIME GROSSSETTLEMENT (RTGS)

- It is a nation-wide payment system facilitating one-to-one

funds transfer.

- Under this Scheme, individuals, rms and corporates can

electronically transfer funds from any bank branch to any

individual, rm or corporate having an account with any

other bank branch in the country participating in the Scheme.

- Under NEFT, the transactions are processed and settled in

batches.

- There is no limit – either minimum or maximum – on the

amount of funds that could be transferred using NEFT.

- However, for cash-based remittances, the maximum amount

per transaction is limited to 50,000

- There are twenty three half-hourly settlement batches run

from 8 am to 7 pm on all working days of week nd th (Except 2 and 4 Saturday of the month).

-system is also available for fund transfer in real time for

transactions over 2 lakh

-It can be availed either by going to a bank branch or via

internet banking

-The RTGS service window for customers' transactions is

available from 9.00 hours to 16.30 hours on week days and

from 9.00 hours to 13.30 hours on Saturdays for settlement

at the RBI end.

PAYMENT MODE IMPORTANT POINTS

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5

Payment Modes In India

PERSON 2 PERSON FUND TRANSFER (P2P)

ATM / POINT OFSALE TERMINALS

- Domestic migrant population and others not having access

to formal banking channels for want of proof of

identity/address nd difculty in transferring funds to their

family/relatives. To facilitate these migrant working force,

Reserve Bank has put the P2P fund transfer in place.

- A bank account holder can transfer funds to a non-account

holder up to 10,000 per transaction and maximum 25,000

in a month.

- A non-account holder (also referred to as walk-in customers)

can transfer cash up to 50,000 to a bank account holder

using NEFT system through the nearest bank branch.

- A non-account holder can also transfer funds to a bank

account holder up to 5,000 per transaction and maximum

25,000 in a month through a Business Correspondent or

using an ATM.

- Funds can also be transferred from one Debit/Credit/Prepaid

cards to another Card or bank account up to 5,000 per

transaction and maximum 25,000 in a month.

- Saving bank customers can use ATM/Debit Cards issued by

any bank at another bank's ATM free of cost up to 5

transactions in a month for balance enquiry/withdrawal of

cash with a ceiling of 10,000 for each transaction.

- Beyond ve transactions, banks levy transaction fee for

using another bank's ATM.

PAYMENT MODE IMPORTANT POINTS

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Payment Modes In India

CARDS

UNIFIEDPAYMENT INTERFACEUPI

- CREDIT CARDS issued by banks/NBFCs in India enable you to

buy goods & services on credit. Charges are levied on

delayed payments.

- DEBIT CARDS are issued by banks which are directly linked to

the savings/current account which enables you to withdraw

cash at ATM/POS or pay for goods and services.

- PREPAID CARDS are issued by banks/non-banks (authorised

by RBI) that facilitate purchase of goods and services against

the value stored on them. These cards can be acquired

depending on the KYC requirement for a maximum value of

50,000 in the form of paper coupons, plastic cards, mobile

wallets and electronic wallets. Cash withdrawal is

permissible only on Open System prepaid cards issued by

banks.

- It is a system that, through a universal application for

transaction, connects multiple bank accounts into a single

mobile application (of any participating bank) for immediate

money transfer through mobile device round the clock 24x7

and 365 days. It uses a single mobile application for

accessing different bank accounts. Recently NPCI has

launched a front-end app called BHIM that can be

downloaded on mobiles to use UPI for fund transfer.

PAYMENT MODE IMPORTANT POINTS

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Payment Modes In India

UNSTRUCTUREDSUPPLEMENTARY SERVICE DATA (USSD)

- service of NPCI caters to the need for immediate low value

remittances. The USSD service brings together diverse

ecosystem partners such as banks & telecom service

providers and allows customers to access nancial services

by dialling *99# from their mobile registered with the bank.

The service works across all GSM service providers all types

of handsets – smart phones and feature phones.

PAYMENT MODE IMPORTANT POINTS

SBI PO IBPS PO RBI GRADE B IBPS CLERK

CAT

UPSC

OICL AO NICL AO NIACL AO IRDAI IB ACIO NIACL Assistant

CMAT

SSC CGL

XAT

LIC AAO UIIC AO RAILWAYS RRB LIC HFL UIIC Assistant NICL Assistant

MHCET NMAT SNAP IIFT

IBPS SO NABARD SBI CLERK SIDBI

RBI ASSISTANT IPPB OFFICER IBPS RRB OFFICER IBPS RRB ASSISTANT LAKSHMI VILAS BANK

DENA BANK PO BOB MANIPAL BOM MANIPAL SYNDICATE BANK PO IDBI BANK PO