Financial Daily from THE HINDU group of publications
Wednesday, May 04, 2005

Port Info

Group Sites

Home Page - RBI & Other Central Banks
Money & Banking - Financial Services

Banks to float company for new settlement system

Our Bureau

Mumbai , May 3

ALL banking transactions in the four metros - Mumbai, Delhi, Kolkata and Chennai - will be cleared and settled under the proposed National Settlement System (NSS) by December. The NSS will function under a limited company owned and operated by banks, the Reserve Bank of India said on Tuesday. This proposed company will act as an umbrella organisation for all retail clearing operations. The vision document for Payment and Settlement System released by RBI on Tuesday said that apart from starting technology-intensive electronic credit system (ECS) and electronics funds transfer (EFT) facility, the proposed institution will also take steps to convert MICR clearing into cheque-truncation-based clearing.

The new institution will also work on ATM switching, multi-application smart cards, e-commerce and m-commerce. RBI is also looking to widen the reach of the real time gross settlement system and electronic payment products. By March 2006, around 10,000 bank branches at 500 centres are likely to offer EFT products with a combination of RTGS and ECT (electronic clearing terminal).

The Cheque Truncation Project will also be launched in the Delhi region by March 2006 and extended to the other three metros within the next two years. By March 2007, MICR clearing will be introduced to 14 more centres. It is currently available in 40 centres.

The vision document calls for a sound legal base (by way of the Payment System Act). Payment system service providers have been urged to set up customer facilitation centres.

A compensation policy should also be formulated to take care of deficiency in services, the document added.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
BSNL plans undersea cable to Singapore

NCDEX launches agri index
50 pc of farm households indebted: Survey
Ranbaxy to rejig branded biz in US
Power crisis likely to continue — Coal, gas shortage results in 2 b units loss
Bt cotton allowed in some States, not in AP
Cautious mood prevails in market
Banks to float company for new settlement system
MSEB, Maharashtra asked to pay $125 m to GE, Bechtel

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line