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RBI pushes for electronic payments

Also extends time for withdrawal of non-CTS cheques by 4 months

BS Reporter  |  Mumbai 

To give electronic payments a push, the Reserve Bank of India (RBI) today asked not to accept (PDCs) and equated monthly instalment payment cheques on locations where the (ECS) is available.

This means new borrowers will have to compulsorily shift to electronic payment system if the ECS facility is available. The central bank also said should make all efforts to convert existing PDCs to the ECS system by obtaining a fresh mandate from borrowers. However, it hasn't specified any timeframe for such conversion.

ECS, a popular mode to transfer funds, is used by institutions to make bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc, or for bulk collections of amounts towards telephone, electricity, water dues, etc.

"There are many places where infrastructure (ECS) is getting ready, though it is on the solutions (CBS) platform," a public sector banker said, requesting anonymity. RBI, therefore, had clearly mentioned that centres with such facility should accept e-payments, he said.

This step is seen in RBI's thrust to promote electronic payments in the country. H R Khan, deputy governor of RBI, had said in November 2012: "The payment system vision document 2012-15 of the Reserve Bank envisages to proactively encourage electronic payment systems for ushering in a less-cash society in India."

Regulations would enable channelising innovations and competition to meet these demands, consistent with international standards and best practices, Khan had said.

In the same order, extended time for withdrawal of non-CTS (cheque truncation system) cheques by four months to July 2013. It will review the progress in June, indicating it might again extend the deadline if needed. Earlier, had extended the deadline from December 2012 to March 2013.

said shouldn't charge customers for the first cheque book issued under the CTS-2010 format and continue with existing policies in compliance with the fair practices code for cheques issued afterwards. Experts say e-payments are more safe, secure and cost-effective for banks and customers.



ENUMERATING E-PAY
  • Banks asked not to accept (PDCs) and EMI payment cheques in locations where (ECS) is available
  • This means new borrowers will have to compulsorily shift to electronic payment system if the ECS facility is available
  • RBI asks banks to take steps to convert existing PDCs to the ECS system

First Published: Tue, March 19 2013. 00:48 IST
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