Remittance Products & Electronic Payment Systems in India

---

Description: This document provides a detailed overview of various remittance products and electronic payment systems in India, including NEFT, RTGS, ECS, NACH, AePS, BBPS, and a review of benchmarking India’s payment infrastructure.

Key Concepts

• NEFT (National Electronic Funds Transfer): A nation-wide payment system facilitating one-to-one fund transfers. Settlements are done in half-hourly batches.
• RTGS (Real Time Gross Settlement): Real-time and gross settlement of large value transactions (Rs. 2 lakhs and above).
• ECS (Electronic Clearing Service): Used for bulk transactions like dividends, salary, or bill payments.
• NACH (National Automated Clearing House): A centralized system by NPCI for bulk payments, both credit and debit.
• AePS (Aadhaar Enabled Payment System): Allows Aadhaar-linked bank account transactions via micro-ATMs using biometric authentication.
• BBPS (Bharat Bill Payment System): Unified platform for all kinds of bill payments – electricity, telecom, gas, DTH, etc.
• Benchmarking India's Payment System: Measured using parameters like availability, adoption, affordability, and regulation compared to global systems.

Mathematical Examples

1. NEFT transfer of Rs. 25,000 with service charge of Rs. 5:
   Total cost = Rs. 25,000 + Rs. 5 = Rs. 25,005
2. RTGS transfer of Rs. 5,00,000 with charge of 0.01%:
   Charge = (0.01/100) × 5,00,000 = Rs. 50
3. Monthly ECS for 100 employees' salary at Rs. 30,000 each:
   Total = 100 × 30,000 = Rs. 30,00,000
4. BBPS bill payment for 4 utilities – Rs. 1,200, Rs. 850, Rs. 430, Rs. 970:
   Total = 1,200 + 850 + 430 + 970 = Rs. 3,450
5. NACH debit mandate for EMI Rs. 8,000/month for 12 months:
   Total debit = 8,000 × 12 = Rs. 96,000

Multiple Choice Questions (MCQs)

1. Which system is used for real-time large value transactions?
   A. NEFT
   B. ECS
   C. RTGS
   D. NACH
   Answer: C
2. NEFT transactions are settled in:
   A. Real time
   B. Weekly batches
   C. Half-hourly batches
   D. Hourly batches
   Answer: C
3. Which payment platform uses biometric authentication?
   A. RTGS
   B. AePS
   C. ECS
   D. BBPS
   Answer: B
4. NACH is implemented by:
   A. RBI
   B. SEBI
   C. NPCI
   D. IRDAI
   Answer: C
5. Minimum amount for RTGS is:
   A. Rs. 50,000
   B. Rs. 2,00,000
   C. Rs. 5,00,000
   D. Rs. 1,00,000
   Answer: B
6. Which platform allows payment of utility bills across India?
   A. AePS
   B. RTGS
   C. BBPS
   D. NEFT
   Answer: C
7. ECS is primarily used for:
   A. Stock transactions
   B. Loan issuance
   C. Bulk repetitive payments
   D. Single high-value transfers
   Answer: C
8. AePS transactions are done through:
   A. Internet banking
   B. Cheques
   C. Micro ATMs
   D. Bank drafts
   Answer: C
9. BBPS was developed and managed by:
   A. RBI
   B. NPCI
   C. IRDAI
   D. SEBI
   Answer: B
10. Which parameter is NOT used in benchmarking India’s payment system?
    A. Accessibility
    B. Availability
    C. Cost
    D. Language
    Answer: D