CAIIB RB Unit 9 - Remittance Products

CAIIB RB Unit 9 - Remittance Products (Year: 2019)

Cheques, Demand Drafts, Bank Orders, Telegraphic Transfers are some of the earliest remittance products.

Retail electronic and card based payments registered a quantum jump mainly due to introduction of RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer).

NEFT (National Electronic Funds Transfer).

Reserve Bank of India has introduced an electronic funds transfer system called 'The Reserve Bank of India National Electronic Funds Transfer System"

The parties to a funds transfer under NEFT System are

(a) the sending bank
(b) the sending Service Centre
(c) the NEFT Clearing Centre
(d) the receiving Service Centre
(e) the beneficiary branch

RTGS (Real Time Gross Settlement)

Transactions are processed instantaneously and settlement made on a gross basis.
The remittances are communicated through a structured messaging process and settlement for the message is made on a gross basis from the liquidity maintained by the sender bank with the settlement bank.

The remittances are credited on a dynamic basis and settlement also made on a dynamic basis.

The transactions carried out by RTGS are :

Inter Bank Transactions
Customer Payment Transactions
Delivery Vs Payment Transactions

Electronic Clearing Services (ECS)

Electronic Clearing Services (ECS) is a mechanism to effect payments to a desired beneficiary on a periodical basis for the monies payable to them.