Indian banks asked to push the use of electronic transactions among customers
(Extracted from the article "RBI tells banks to promote e-payment options" in the Economic Times, 8 Nov, 2010)
The Reserve Bank of India (RBI) has told banks to push the use of electronic transactions among customers and educate customers about real-time gross settlement, national electronic funds transfer, and electronic clearing service, for transactions.
The central bank acknowledged that paper-based systems will continue to dominate in terms of numbers , but it said banks should try to increase the share of electronic payment options in terms of the value of transactions. At present, nearly 90% of all banking transactions are done electronically in value terms; the share of electronic payment is just about 35% in terms of the number of transactions.
Over a period of time, the RBI has been encouraging the use of electronic payment products that are superior to paper-based systems in terms of traceability , efficiency, speed and safety. While RTGS is for high-value transactions, NEFT and ECS are for small amounts.
The share of paper-based instruments has been on the decline both in volume and value terms. But RBI said that paper-based solutions will dominate in terms of numbers and launched a speed-clearing system to streamline the process and reduce the time taken for collection of outstation cheques. Speedclearing system is available for MICR cheques at 66 MICR chequeprocessing centres across the country.
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