Emerging Trends in Financial Services

S.R.DeepikaAssistant Professor

Department of BBAKristu Jayanti College

Emerging Trends in Financial ServicesPersonalized banking: • ATM• Mobile Banking • e-banking• Credit & Debit Card• Real- time Gross Settlement(RTGS)• National Electronic Fund Transfer (NEFT) • Immediate Payment Service (IMPS)• Rupay

Automated Teller Machine (ATM)

• Automated Teller Machine is a computerized machine that provides

the customers of banks, the facility of accessing their account for

dispensing cash and to carry out other financial & non-financial

transactions without the need to actually visit their bank branch.

• ATMs set up, owned and operated by non-banks are called White

Label ATMs. Non-bank ATM operators are authorized under Payment

& Settlement Systems Act, 2007 by the Reserve Bank of India

• ATM cards/debit cards, credit cards and prepaid cards (that permit

cash withdrawal) can be used at ATMs for various transactions.

Services/facilities available at ATMs

• Account Information• Cash Deposit • Regular Bills Payment • Purchase of Re-load Vouchers for Mobiles • Mini/Short Statement• PIN change• Request for Cheque Book

Are customers entitled to any free transactions at ATMs?• With effect from November 01, 2014, a bank must offer to its savings bank account holders a minimum

number of free transactions at ATMs as under:

• Transactions at a bank’s own ATMs at any location: Banks must offer their savings bank account holders

a minimum of five free transactions (including both financial and non-financial) in a month, irrespective

of the location of ATMs.

• Transactions at any other banks’ ATMs at Metro locations: In case of ATMs located in six metro

locations, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, banks must offer their

savings bank account holders a minimum of three free transactions (including both financial and non-

financial transactions) in a month.

• Transactions at any other banks’ ATMs at Non-Metro locations: At other locations, banks must offer the

savings bank account holders a minimum of five free transactions (including both financial and non-

financial transactions) in a month at other bank ATMs.

• RBI has mandated only the minimum number of free transactions at ATMs. Banks may offer more

number of transactions free of cost to their customers.

Cont…

• customers can be charged for transactions at

ATMs over and above the mandated number

of free transactions. In case a bank decides to

levy charges, the customer can be charged a

maximum of Rs. 20/- per transaction (plus

service tax, if any) by his/her bank.

Do’s and Don’ts to keep transaction safe and secure at ATM

• Customer should conduct any ATM transaction in complete privacy.

• Only one card holder should enter and access ATM kiosk at a time.

• He/she should never lend his/her card to anyone.

• Do not write PIN on the card.

• Never share PIN with anyone or seek help from anybody by handing over the

card and revealing the PIN.

• Never let anyone see the PIN while it is being entered at the ATM

• Never use a PIN that could be easily guessed. e.g. his/her birthday, birthday of

spouse or telephone number.

• Never leave card in the ATM

• Register mobile number with the card issuing bank for getting alerts for ATM

transactions. Any unauthorized card transaction in the account, if observed,

should be immediately reported to the card issuing bank.

• Beware of any extra devices attached to the ATMs. These may be put to

capture customer’s data fraudulently. If any such device is found, inform the

security guard / bank maintaining it immediately.

• Keep an eye on suspicious movements of people around ATMs. Customer

should beware of strangers trying to engaging him/her in conversation or

offering assistance / help in operating the ATM.

• Remember that bank officials will never ask for card details or PIN over

telephone / email. So, do not respond to any mails from people indicating that

they represent your bank.

Procedure for complaints

• The customer has to approach his/her bank (bank that issued the card) to lodge a

complaint in the event of a failed ATM transaction.

• The time limit, for resolution of customer complaints by the issuing banks, is within 7

working days from the date of receipt of customer complaint. Hence the bank is

supposed to re-credit the customer’s account within 7 working days. For failure to re-

credit the customer’s account within 7 working days of receipt of the complaint from the

customer, the bank is liable to pay Rs 100 per day as compensation to the customer.

• If a complainant does not get satisfactory response from his/her bank within a maximum

period of thirty (30) days from the date of his lodging the complaint, he/she will have the

option to approach the Office of the Banking Ombudsman for redressal of his grievance.

Who invented the ATM?

John Shepherd-Barron installed the world's first

automatic cash dispenser at a Barclays Bank

branch near London in 1967

Who first introduced ATMs in India?

HSBC - the Hongkong and Shanghai Banking

Corporation - was the first bank to introduce

the ATM concept in India way back in 1987.

Where is the world's highest ATM?

Sikkim

• On December 12, 2003, UTI Bank inaugurated its ATM at Thegu, near

the Nathu-la Pass in Sikkim, which is at 13,200 feet above sea level.

• That makes it an ATM at the highest location in India.

• NCR Corporation provided the technology to build this heat-

generating ATM, which is capable of handling rough weather and sub-

zero temperatures.

• The ATM caters to Indian army personnel -- especially of the 63rd

Mountain Brigade, which has its headquarters there and tourists.

Who set up the world's first floating ATM?

State Bank of India has set up the world's first-

ever floating ATM on a boat in Kerala.

Electronic Fund Transfer

If one want to electronically transfer money,

bank broadly give three options:

• National electronic funds transfer (NEFT)

• Real-time gross settlement (RTGS)

• Immediate payment service (IMPS)

Whom is it beneficial?• When the ECS transactions are bulk and repetitive ,this is basically of two

types:

• ECS Credit (One large debit & multiple credits ) – For e.g., salary,

dividends

• ECS Debit (One large credit & multiple debits) – For e.g., bill payments,

mutual fund SIP

• Apart from repetitive corporate transactions, NEFT and RTGS are also

used by individuals on need basis . When one transfer fund to friend or

relative he is essentially using NEFT or RTGS

NEFT• National Electronic Funds Transfer (NEFT) is a nation-wide payment system

facilitating one-to-one funds transfer. Under this Scheme, individuals, firms

and corporates 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.

• For being part of the NEFT funds transfer network, a bank branch has to be

NEFT- enabled.

• In this process, the funds are transferred in batches from one bank account

to another. Day Timing No.of settlements

Monday – Friday 8 AM to 7 PM 12

Saturday 8 AM to 1 PM 6

Who can transfer & receive funds through NEFT?

• Individuals, firms or corporates maintaining accounts with a bank branch can transfer

funds using NEFT.

• Individuals who do not have a bank account (walk-in customers) can also deposit cash

at the NEFT-enabled branches with instructions to transfer funds using NEFT. However,

such cash remittances will be restricted to a maximum of Rs.50,000/- per transaction.

Such customers have to furnish full details including complete address, telephone

number, etc.

• It is, necessary for the beneficiary to have an account with the NEFT enabled

destination bank branch in the country.

• The NEFT also facilitates one-way cross-border transfer of funds from India to Nepal.

This is known as the Indo-Nepal Remittance Facility Scheme.

NEFT Process• The payments are cleared/settled in batches every hour. For the last two

settlements on weekdays and last settlement on Saturday the account of

beneficiary will be credited the next day.

• There is no limit – either minimum or maximum – on the amount of funds that

could be transferred using NEFT. However, maximum amount per transaction is

limited to Rs.50,000/- for cash-based remittances within India and also for

remittances to Nepal under the Indo-Nepal Remittance Facility Scheme.

• Following are the requirements for funds transfer transaction using NEFT:

– Originating and destination bank branches should be part of the NEFT

network

– Beneficiary details such as beneficiary name, account number and account

type, name and IFSC of the beneficiary bank branch

Transaction Charges for NEFT

Transaction Limit Charges

Amounts up to Rs 10,000 Rs 2.50 + Service Tax

Amounts above Rs 10,000 up to Rs 1 lakh Rs 5 + Service Tax

Amounts above Rs 1 lakh upto Rs 2 lakh Rs 15 + Service Tax

Amounts above Rs 2 lakh Rs 25 + Service Tax

RTGS

• The acronym 'RTGS' stands for Real Time Gross Settlement, which can be

defined as the continuous (real-time) settlement of fund transfer

individually on an order by order basis (without netting).

• '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).

• The RTGS system is primarily meant for large value transactions. The

minimum amount to be remitted through RTGS is ` 2 lakh. There is no

upper ceiling for RTGS transactions.

Processing Charges / timing for RTGS transactions

• Inward transactions – Free, no charge to be levied.• Outward transactions: 

Amount Maximum charges

Rs. 2 – Rs. 5 lakh Rs. 30 per transaction

Above 5 lakh Rs. 55 per transaction

Day Start Time End Time

Monday to Friday 09:00 AM 04:30 PM

Saturday 09:00 AM 01:30 PM

Essential information that the remitting customer would have to furnish to a bank

The remitting customer has to furnish the following information to a bank for

initiating a RTGS remittance:

• Amount to be remitted

• Remitting customer’s account number which is to be debited

• Name of the beneficiary bank and branch

• The IFSC Number of the receiving branch

• Name of the beneficiary customer

• Account number of the beneficiary customer

• Sender to receiver information, if any

IMPS

• IMPS offers an instant, 24X7, interbank electronic fund transfer

service through mobile phones.

• IMPS is used to transfer money instantly within banks across

India through mobile, internet and ATM which is not only safe

but also economical both in financial and non financial

perspectives.

• This facility is provided by National Payments Corporation of

India (NPCI)

Pre-Requisites for Mobile Banking through IMPS

Registration for Remitter:

• Register yourself with the mobile banking service of the bank.

• Get Mobile Money Identifier (MMID) and MPIN from the bank

• Download Software (Application) for mobile banking (ensure the

compatibility of mobile with the application) or use the SMS facility in your

mobile if your bank provides IMPS on SMS

Registration for Beneficiary:

• Link your mobile number to the account in the respective bank.

• Get Mobile Money Identifier (MMID) from the bank

For Remitter (To send money):

• Login to the application and select the IMPS menu from the IMPS or use the SMS

facility in your mobile if your bank provides IMPS on SMS

• Get Beneficiary Mobile number and MMID

• Enter Beneficiary Mobile number, beneficiary MMID, Amount and your MPIN

• Await confirmation SMS for the debit in your account and credit in beneficiary A/C

• Note the transaction reference number for any future query

• Share your Mobile number and MMID with the remitter

• Ask the remitter to send money using your Mobile number and MMID

• Check the confirmation SMS for credit to your account from the remitter

• Note the transaction reference number for any future query

Objectives of IMPS• To enable bank customers to use mobile instruments as a channel for accessing their

banks accounts and remit funds

• Making payment simpler just with the mobile number of the beneficiary         

• To sub-serve the goal of Reserve Bank of India (RBI)  in electronification of retail

payments

• To facilitate mobile payment systems already introduced in India with the Reserve Bank

of India Mobile Payment Guidelines 2008 to be inter-operable across banks and mobile

operators in a safe and secured manner

• To build the foundation for a full range of mobile based Banking services.   

Rupay

• RuPay is an Indian domestic card scheme conceived and launched by

the National Payments Corporation of India(NPCI).

• It was created to fulfil the Reserve Bank of India’s desire to have a

domestic, open loop, and multilateral system of payments in India.

• RuPay facilitates electronic payment at all Indian banks and financial

institutions, and competes with MasterCard and Visa in India.

• NPCI maintains ties with Discover Financial to enable the card

scheme to gain international acceptance