Uti To Route Payments Via Sbi Funds Transfer Grid

In a bid to reduce it voluminous paper-based payments system, the Unit Trust of India has roped in the State Bank of India to provide electronic funds transfer facility to its unit holders from July.

From July 1, the State Bank of India will take responsibility for electronic funds transfer of UTI dividends and other payments at over 52 locations all over India.

Apart from greatly expanding the number of cities where electronic funds transfer is on offer, the Unit Trust of India is also seeking to attract more investors into the electronic funds transfer fold. Towards this end, the Unit Trust of India is seeking help from its vast agent network to encourage more than more unit holders to opt for direct transfer of dividends into their bank accounts instead of relying on the postal service and cheques.

 

"Apart from increasing the electronic funds transfer system to 52 cities, we are also giving our agents higher incentives if they can manage to get unit holders to opt for the electronic system," senior UTI officials said. UTI officials hope to greatly reduce their paper-based payments by the year-end when all the 52 cities where they have branches will be covered.

UTI has 2.7 crore shareholders and has to send out over 2 crore cheques another paid instruments every year. They are hoping to drastically reduce this in the next one year.

Currently, the RBI performs the function of electronic funds transfers at over 16 cities all over India where it has offices. "State Bank of India will start providing the facility of transferring funds directly into the accounts of unit holders from July," UTI officials said.

For this purpose, UTI has already organised training sessions where officials from the Reserve Bank of India have been training State Bank of India officers in the electronic funds transfer. "UTI is the largest user of the Electronic Funds Transfer system and therefore we have taken the initiative to bring SBI also into this system since they perform the clearing functions in places where the RBI does not have branches," UTI officials said.