Professional Documents
Culture Documents
Digital Bank
Digital Bank
Certificate Examination in
Digital Banking
(For July 2018 – IIBF & Other Exams)
(Updated upto 19.06.2018)
Compiled by
OBJECTIVE:
EXAMINATION OBJECTIVE:
The course on ‘Digital Banking’ is intended to provide practicing bankers a sound foundation in the digital
banking products such as Cards, ATMs, Mobile and Internet
Banking and PoS. This will make them familiar with relevant aspects such that they could help in
rendering improved customer service and also will help them in properly guiding the customers as and
when needed.
ELIGIBILITY:
1. Members and Non-Members of the Institute
2. Candidates must have passed the 12th standard examination in any discipline or its equivalent
MEDIUM OF EXAMINATION :
Examination will be conducted in English only.
PATTERN OF EXAMINATION:
(i) Question Paper will contain 120 objective type multiple choice questions for 100 marks.
DURATION OF EXAMINATION:
The duration of the examination will be of 2 hours.
PERIODICITY AND EXAMINATION CENTRES:
a) Examination will be conducted on pre-announced dates published on IIBF Web Site. Institute conducts
examination on half yearly basis, however periodicity of the examination may be changed depending
upon the requirement of banking industry.
b) List of Examination centers will be available on the website. (Institute will conduct examination in those
centers where there are 20 or more candidates.)
February to July of a calendar year, instructions / guidelines issued by the regulator(s) and important
developments in banking and finance up to 31st
December will only be considered for the purpose of inclusion in the question papers".
(ii) In respect of the examinations to be conducted by the Institute for the period August to January of a
calendar year, instructions / guidelines issued by the regulator(s) and important developments in banking
and finance up to 30th June will only be considered for the purpose of inclusion in the question papers.
1. Digital banking is the move to online banking where banking services are delivered over the internet.
The advantages for banks and customers are providing more convenient and faster banking services.
The shift from traditional to digital banking has been gradual and should be rather described in degrees of
service digitization than through a categorization into yes and no. It involves high levels of process
automation and web-based services and may include APIs enabling cross-institutional service
composition to deliver banking products and provide transactions. It provides the ability for users to
access financial data through desktop, mobile and ATM services
2. Digital India
Digital India is a campaign launched by the Government of India to ensure that Government
services are made available to citizens electronically by improved online infrastructure and by
increasing Internet connectivity or by making the country digitally empowered in the field of
technology.
It was launched on 1 July 2015 by Prime Minister Narendra Modi. The initiative includes plans
to connect rural areas with high-speed internet networks. Digital India consists of three core
components. These include:
The creation of digital infrastructure
Delivery of services digitally
Digital literacy
Major Advantages of Digital India:
i. Creation of Digital Infrastructure and Electronic Manufacturing in Native India.
ii. Digital Empowerment of Native Indian People.
iii. Delivery of all Government Services electronically (E-Governance).
iv. A Digital Identification which will verify the end user.
v. A Mobile for worldwide access to all services.
vi. A Bank account for Immediate Benefit Transfers of subsidies and payments.
vii. The program also aims to eliminate all electronics imports from foreign countries by
2020 and make India a electronics manufacturing super power.
Other Advantages:
It will help in decreasing crime if applied on whole.
It will help in getting things done easily.
It will help in decreasing documentation.
Some of the services which will be provided through this desire effort are Digital
Locker, e-education, e-health, e-sign and nationwide scholarship portal.
It will ostensibly create a lot of jobs.
It will be a boost to industry; both large and small enterprises.
3. A digital bank represents a virtual process that includes online banking and beyond. As an end-to-end
platform, digital banking must encompass the front end that consumers see, the back end that bankers
see through their servers and admin control panels and the middleware that connects these nodes.
Ultimately, a digital bank should facilitate all functional levels of banking on all service delivery platforms.
In other words, it should have all the same functions as a head office, branch office, online service, bank
cards, ATM and point of sale machines.
The reason digital banking is more than just a mobile or online platform is that it includes middleware
solutions. Middleware is software that bridges operating systems or databases with other applications.
Financial industry departments such as risk management, product development and marketing must also
be included in the middle and back end to truly be considered a complete digital bank. Financial
institutions must be at the forefront of the latest technology to ensure security and compliance with
government regulations
Business efficiency - Not only do digital platforms improve interaction with customers and deliver their
needs more quickly, they also provide methods for making internal functions more efficient. While
banks have been at the forefront of digital technology at the consumer end for decades, they have
not completely embraced all the benefits of middleware to accelerate productivity.
Cost savings - One of the keys for banks to cut costs is automated applications that replace
redundant manual labor. Traditional bank processing is costly, slow and prone to human error,
according to McKinsey & Company. Relying on people and paper also takes up office space, which
runs up energy and storage costs. Digital platforms can future reduce costs through the synergies of
more qualitative data and faster response to market changes.
Increased accuracy - Traditional banks that rely mainly on paper processing can have an error rate of
up to 40%, which requires reworking. Coupled with lack of IT integration between branch and back
office personnel, this problem reduces business efficiency. By simplifying the verification process, it's
easier to implement IT solutions with business software, leading to more accurate accounting.
Financial accuracy is crucial for banks to comply with government regulations.
Improved competitiveness - Digital solutions help manage marketing lists, allowing banks to reach
broader markets and build closer relationships with tech savvy consumers. CRM platforms can track
customer history and provide quick access to email and other forms of online communication. It's
effective for executing customer rewards programs that can improve loyalty and satisfaction.
Greater agility - The use of automation can speed up both external and internal processes, both of
which can improve customer satisfaction. Following the collapse of financial markets in 2008, an
increased emphasis was placed on risk management. Instead of banks hiring and training risk
management professionals, it's possible for risk management software to detect and respond to
market changes more quickly than even seasoned professionals.
Enhanced security - All businesses big or small face a growing number of cyber threats that can
damage reputations. In February 2016 the Internal Revenue Service announced it had been hacked
the previous year, as did several big tech companies. Banks can benefit from extra layers of security
to protect data.
full automated
partially automated
manual tasks
It still isn't practical to automate all operations for many financial firms, especially those that conduct
financial reviews or provide investment advice. But the more a bank can replace cumbersome redundant
manual tasks with automation, the more it can focus on issues that involve direct communication with
customers. The obstacles currently preventing banks from investing in a more digital back end
environment are:
banks have traditionally prioritized launching new products that are still difficult to automate
mergers and acquisitions, new products and government regulations have already established
complex IT architecture difficult to revise
IT teams do not always grasp business priorities
many banks lack the in-house IT expertise beyond traditional mainframe environments
7. Digital cash eliminates many problems associated with physical cash, such as misplacement or the
potential for money to be stolen or damaged. Additionally, digital cash can be traced and accounted for
more accurately in cases of disputes. As consumers find an increasing number of purchasing
opportunities at their fingertips, there is less need to carry physical cash in their wallets.
Other indications that demand for digital cash is growing are highlighted by the use of peer-to-peer
payment systems such as PayPal and the rise of untraceable cryptocurrencies such as bitcoin. Almost
anything imaginable that can be paid with physical cash can theoretically be paid with the swipe of a bank
card, including parking meters. The problem is this technology is still not omnipresent. Cash circulation
grew in the United States by 42% between 2007 and 2012, with an average annual growth rate of 7%,
according to the BBC.
The concept of an all digital cash economy is no longer just a futuristic dream but it's still unlikely to
outdate physical cash in the near future. All digital banks are possible as a consumer option, but people
may still have a need for physical cash in certain situations. ATMs help banks cut overhead, especially if
they are available at various strategic locations beyond branch offices
Information security programs are built around the core objectives of the CIA triad: maintaining
the confidentiality, integrity and availability of IT systems and business data. These objectives ensure that
modification of data (integrity) and guarantee the data can be accessed by authorized parties when
requested (availability).
Many large enterprises employ a dedicated security group to implement and maintain the organization's
information security program. Typically, this group is led by a chief information security officer. The
security group is generally responsible for conducting risk management, a process through which
vulnerabilities and threats to information assets are continuously assessed, and the appropriate protective
controls are decided on and applied. The value of an organization lies within its information -- its security
is critical for business operations, as well as retaining credibility and earning the trust of clients.
Threats to sensitive and private information come in many different forms, such
as malwareand phishing attacks, identity theft and ransomware. To deter attackers and mitigate
vulnerabilities at various points, multiple security controls are implemented and coordinated as part of a
layered defense in depth strategy. This should minimize the impact of an attack. To be prepared for a
security breach, security groups should have an incident response plan (IRP) in place. This should allow
them to contain and limit the damage, remove the cause and apply updated defense controls.
Security is a constant worry when it comes to information technology. Data theft, hacking, malware and a
host of other threats are enough to keep any IT professional up at night.
Information security follows three overarching principles:
Confidentiality: This means that information is only being seen or used by people who are authorized
to access it.
Integrity: This means that any changes to the information by an unauthorized user are impossible
(or at least detected), and changes by authorized users are tracked.
Availability: This means that the information is accessible when authorized users need it.
supervision of payment systems in India and designates the apex institution (RBI) as the authority for that
purpose and all related matters. To exercise its powers and perform its functions and discharge its duties,
the RBI is authorized under the Act to constitute a committee of its central board, which is known as the
Board for Regulation and Supervision of Payment and Settlement Systems (BPSS). The Act also
The PSS Act, 2007 received the assent of the President on 20th December 2007 and came into force
12. The Board for Regulation and Supervision of Payment and Settlement Systems Regulation, 2008
deals with the constitution of the Board for Regulation and Supervision of Payment and Settlement
Systems (BPSS), a Committee of the Central Board of Directors of the Reserve Bank of India. It also
deals with the composition of the BPSS, its powers and functions, exercising of powers on behalf of
BPSS, meetings of the BPSS and quorum, the constitution of Sub-Committees/Advisory Committees by
BPSS, etc. The BPSS exercises the powers on behalf of the Reserve Bank, for regulation and
supervision of the payment and settlement systems under the PSS Act, 2007.
The Payment and Settlement Systems Regulations, 2008 covers matters like form of application for
authorization for commencing/ carrying on a payment system and grant of authorization, payment
instructions and determination of standards of payment systems, furnishing of returns/documents/other
information, furnishing of accounts and balance sheets by system provider etc
13. India has multiple payments and settlement systems, both gross and net settlement systems. For
gross settlement India has a Real Time Gross Settlement (RTGS) system called by the same name and
net settlement systems include Electronic Clearing Services (ECS Credit), Electronic Clearing Services
(ECS Debit), credit cards, debit cards, the National Electronic Fund Transfer (NEFT) system
and Immediate Payment Service.
23.Channels of e-payment
In their effort to enable customers to make payments the electronic way banks have developed many
channels of payments viz. the internet, mobiles, ATM’s (Automated Teller Machines) and drop boxes.
The internet as a channel of payment is one of the most popular especially among the youth. Debit and
credit payments are made by customers on various bank’s websites for small purchases,(retail payments)
and retail transfers( ATM transfers).
ATM’s serve many other purposes, apart from functioning as terminals for withdrawals and balance
inquiries, such as payment of bills through ATM’s, applications for cheques books and loans can also be
made via ATM’s.
The Payment and Settlement Systems Act, 2007 was a major step in this direction. It enables the RBI
to "regulate, supervise and lay down policies involving payment and settlement space in India." Apart
from some basic instructions to banks as to the personal and confidential nature of customer
payments, supervising the timely payment and settlement of all transactions, the RBI has actively
encouraged all banks and consumers to embrace e-payments.
In pursuit of the above-mentioned goal the RBI has granted NBFC’s (Non-Banking Financial
Companies) the permission to issue co branded credit cards forming partnerships with commercial
banks.
The Kisan Credit Card Scheme was launched by NABARD in order to meet the credit needs of
farmers, so that they can be free of paper money hassles and use only plastic money.
A domestic card scheme known as RuPay has recently been started by the National Payments
Corporation of India (NPCI),promoted by RBI and Indian Banks Association (IBA), inspired
by Unionpay in China, which will be promoting the use of cards ie. "plastic money". Initially
functioning as an NPO, Rupay will focus on potential customers from rural and semi-urban areas of
India. Rupay will have a much wider coverage than Visa, MasterCard or American Express cards
which have always been used for card-based settlements.
The NREGA (National Rural Employment Guarantee Scheme) introduced by the Government will
ensure rural employment in turn ensuring that the employees get wages. Each employee will have a
smart card functioning as his personal identification card, driver’s license, credit card which will also
function as an electronic pass book, thus familiarising the rural populations with e-payments[2]
However, the Indian banking system suffers from some defects due to certain socio-cultural factors which
hampers the spread of the e-payments culture even though there are many effective electronic payment
channels and systems in place. Despite the infrastructure being there nearly 63% of all payments are still
made in cash. A relatively small percentage of the population pays their bills electronically and most of
that population is from urban India-the metropolitans. Also in some cases the transaction is done partially
online and partially "offline". The main reason for this apathy to switch to e-payments comes from lack of
awareness of the customer despite various efforts by the Government.
25. Block Chain Technology : ICICI Bank is the first bank in the country and among the first few globally
to exchange and
26. PREPAID PAYMENT INSTRUMENTS : Eligibility : Banks who comply with the eligibility criteria would
be permitted to issue all
categories of pre-paid payment instruments. Non-Banking Financial Companies (NBFCs) and other
persons would be permitted to
issue only semi-closed system payment instruments. Capital requirements : Banks and Non-Banking
Financial Companies which
comply with the Capital Adequacy requirements prescribed by Reserve Bank of India from time-to-time,
shall be permitted to issue
pre-paid payment instruments. All other persons shall have a minimum paid-up capital of Rs 100 lakh and
positive net owned
funds. Safeguards against money laundering (KYC/AML/CFT) provisions - The maximum value of any
pre-paid payment
instruments (where specific limits have not been prescribed including the amount transferred) shall not
exceed Rs 100,000/-.
Deployment of Money collected: Non-bank persons issuing payment instruments are required to maintain
their outstanding balance
in an escrow account with any scheduled commercial bank subject to the following conditions:- The
amount so maintained shall be
used only for making payments to the participating merchant establishments. No interest is payable by
the bank on such balances.
Validity: All pre-paid payment instruments issued in the country shall have a minimum validity period of six
months from the date
of activation/issuance to the holder. The outstanding balance against any payment instrument shall not be
forfeited unless the
holder is cautioned at least 15 days in advance as regards the expiry of the validity of the payment
instrument.
27.Money Transfer Service Scheme (MTSS) : The Reserve Bank has issued Master Directions relating
to Money Transfer Service
Scheme (MTSS), which is a quick and easy way of transferring personal remittances from abroad to
beneficiaries in India.
MTSS can be used for inward personal remittances into India, such as, remittances towards family
maintenance and remittances
favouring foreign tourists visiting India and not for outward remittance from India.
IMPS offer an instant,24*7 interbank electronic fund transfer service capable of processing person to
person, person to account and person to merchant remittances via mobile, internet and atms. It is a
multichannel and multidimensional platform that make the payments possible within fraction of seconds
with all the standards and integrity maintained for security required for even high worth transactions.
IFS Code
11 digit alphanumeric number, available in the users Cheque book.
IMPS Merchant Payments (P2M - Person-to-merchant) service allows customers to make instant, 24*7,
interbank payments to merchants or enterprises via mobile phone. IMPS enables mobile banking users a
facility to make payment to merchants and enterprises, through various access channels such as Internet,
mobile Internet, IVR, SMS, USSD.
Sender enter details of merchant's (Customer initiated - Push)
• Merchant Mobile Number & MMID
• Amount to be transferred
• Payment reference (optional)
• Sender's M-PIN
29.Aadhaar Based Remittance Service (ABRS)In ABRS, a remitter can initiate IMPS transaction using
the beneficiary's AADHAAR number, which acts as a financial address & which will be linked to the
beneficiaries account number. ABRS facilitates in simplifying the IMPS payment initiation process as in
this service the customer will have to input only AADHAAR number of the beneficiary for initiating an
IMPS transaction. Another important utility of this service will be in disbursal of subsidy payment i.e.
Electronic Benefit Transfer (EBT)/ Direct Benefit transfer (DBT) by the Government. ABRS will act as a
catalyst in expanding financial Inclusion reach.
To facilitate the effective implementation of ABRS, a new feature is being added to the existing NUUP
(USSD based platform on *99#) service. Under this new service, known as "Query Service on Aadhaar
Mapper" the customer will be able to know : -
• Whether his/her AADHAAR number is seeded/linked to any bank account number or not?
• If yes, then with which bank and when was it last updated?
Mobile Channel
For transactions initiated using Mobile, transactions will be authenticated using mobile number & MPIN.
Mobile number + MPIN
ATM channel
Authentication will be done for remitting customers while using the ATM channel as follows:
Card + ATM PIN
One of the innovative payment service launched by NPCI includes *99# service, which works on
Unstructured Supplementary Service Data (USSD) channel. This service was launched envisioning the
potential of Mobile Banking and the need for immediate low value remittances which will help in financial
deepening and inclusion of underbanked society in the mainstream banking services. *99# service was
dedicated to the nation by the Honourable Prime Minister of India Shri Narendra Modi on 28th August
2014 as part of Pradhan Mantri Jan Dhan Yojana (PMJDY).
*99# service has been launched to take the banking services to every common man across the country.
Banking customers can avail this service by dialing *99#, a “Common number across all Telecom Service
Providers (TSPs)” on their mobile phone and transact through an interactive menu displayed on the
mobile screen. Key services offered under *99# service include, interbank account to account fund
transfer, balance enquiry, mini statement besides host of other services. *99# service is currently offered
by 43 leading banks & all GSM service providers and can be accessed in 12 different languages including
Hindi & English. *99# service is a unique interoperable direct to consumer service that brings together the
diverse ecosystem partners such as Banks & TSPs (Telecom Service Providers).
The maximum limit of fund transfer per customer on NUUP is ₹5,000 per day.
It is a value added service from NPCI that facilitates the customers to check the status of his/her Aadhaar
number seeding/linking in the bank account. The service works across all GSM service providers and
brings together the diverse ecosystem partners such as Banks & TSPs (Telecom Service Providers).
Considering that various subsides and benefits of the State and Central Government schemes under the
Direct Benefit Transfer (DBT) programme are being doled out basis the Aadhaar number of the
beneficiary; this service has proved to be a convenient mechanism for the users to ascertain his/her
Aadhaar seeding/ linking status in the bank account.
Currently, following Financial, Non-financial and Value Added Services (VAS) are offered through
*99# service:
A. Send Money
B. Request Money
C. Check Balance
D. My Profile
E. Pending request
F. Transactions
G. UPI PIN
Financial Services
A. Send Money : Users can send money to the beneficiary using one of the following
1. Mobile Number ,
2. Aadhar Number ,
3. Payment address,
4. saved beneficiary,
5. IFSC code and Account Number
B. Request Money : Users can request money from another account holder using beneficiary’s
1. Registered mobile number or
2. Virtual Payment address.
C. Check Balance: View available balance of the bank account linked to user’s mobile number.
What kind of issues are faced by the customer in using *99# service?
While doing transactions on *99#, customers may face following issues:
Mobile handsets: *99# service is available only on GSM handsets.Handset Compatibility Issue:
Though USSD based transactions works across all GSM handsets; however, owning to various reasons,
sometimes few handsets do not support
USSD service. Though, the numbers of such handset models is few; still users are requested to check if
there handset supports the USSD service (in case they are facing problems while performing transaction).
Technical Error or Declined Request: Transaction not getting completed due to
Network / connectivity issues at TSPs or Banks end.
The launch of the Unified Payments Interface ("UPI") by National Payments Corporation of India ("NPCI"),
has provided an impetus to India's move to incentivize digital payments with the vision to transform India
into a digitally empowered economy and reduce dependence on cash transactions. NPCI is the umbrella
body for all payment systems in India, which makes digital transactions as effortless as sending a text
message.
UPI makes cutting-edge changes by supporting real time transfer of money between accounts across
banks using smartphones by use of just one single interface besides creating interoperability and superior
customer experience. Embracing the smartphone boom in India and the inclination of customers to move
to digital mobile-based solutions, UPI addresses the challenges and limitations of the existing payment
systems, wherein customers are required to disclose sensitive financial details like bank account details,
IFSC code, credit/debit card details and sensitive PIN numbers while initiating transactions and juggle
between different mobile banking applications with their different user IDs and passwords.
Unified Payments Interface (UPI) is an instant payment system developed by the National Payments
Corporation of India (NPCI), an RBI regulated entity. UPI is built over the IMPS infrastructure and allows
you to instantly transfer money between any two parties' bank accounts.
UPI-PIN
UPI-PIN (UPI Personal Identification Number) is a 4-6 digit pass code you create/set during first time
registration with this App .You have to enter this UPI-PIN to authorize all bank transactions. If you
Payment Address
Payment Address is an Address which uniquely identifies a person's bank a/c. For instance, the
Payment Address for BHIM customers is in the format xyz@upi. You can just share your Payment
Address with anyone to receive payments (no need for bank account number/ IFSC code, etc.). You
can also send money to anyone by using their Payment Address. Note: Do not share your
confidential UPI PIN with anyone.
Virtual Payment address eliminates the need to provide sensitive information like a bank account
details, debit/credit card details and CVV numbers. Also, unlike a mobile wallet, a customer is not
required to set aside funds upfront in the mobile wallet setup with the service provider and all
transfers under the UPI are made from the bank account linked with your virtual payment address. A
virtual payment address is an identifier that will be mapped to a customers bank account, enabling
the bank providing the UPI services to process transactions through the bank account linked with the
respective virtual payment address.
Data Security
In terms of data security, UPI provides for a single click two-factor authorization, which implies that
with one click, the transaction is authenticated at 2 levels, compliant with the existing regulatory
guidelines issued by the Reserve Bank of India ("RBI"), without disclosing banking or personal
information. As UPI primarily works based on an individual's 'virtual payment address', one can send
and receive payments solely based on their 'virtual payment address' without providing any
additional details. For example if you need to make a payment to a merchant for purchases made at
a store, you will need to provide him only your 'virtual payment address', the merchant will then enter
your 'virtual payment address' into his UPI app, the UPI app will send an authentication messages to
the 'virtual payment address' linked to your mobile device, once your receive and acknowledge the
message by entering your password will the transaction be completed and the amount payable to
the merchant will be debited from your bank account.
This innovative dynamic QR-code based solution uses the store's existing credit/debit card POS
terminal to enable UPI-based cashless payments.
When a customer requests UPI Payment mode, the cashier simply needs to select the 'UPI
Payment' option on his existing card POS terminal and inputs the relevant bill payment amount.
This triggers the generation of a dynamic QR-code on the POS terminal screen itself which can
be scanned into any mobile-based UPI-apps like BHIM used by the customer.
When scanned, the QR code automatically transfers relevant transaction details and displays it
on the customer's payment app for authorizing payment transfer.
Once the payment transfer from customer's UPI-linked bank account to store's UPI-linked
account is completed, the payment solution triggers a settlement confirmation to the initiating in-
store POS terminal for printing out a transaction completion charge slip.
Benefits:
By enabling such a UPI payment confirmation on the merchant POS terminal itself, the new in-store UPI
interface addresses a long standing implementation hurdle holding back faster spread of UPI-acceptance
in large multi-lane retail stores.
With multiple checkout points, the cashiers in these stores have no direct means of payment receipt prior
to releasing the purchased goods to the customer. This is unlike a small single cashier store where such
a confirmation could be received via a simple text message to the single cashier's own mobile phone.
The new solution enables the crucial payment confirmation to be received on cashier-independent
infrastructure like the store POS terminal - a necessity for multi-cashier stores with high cashier churn.
Usage of a Dynamic QR with the merchant VPA (Virtual Private Address) or UPI ID and amount
embedded in it eliminates the need for typing in of the customer or merchant credentials in the POS.
This process offers convenience besides eliminating the cumbersome and error-prone process of typing
out credentials.
3. Does the customer need to register a beneficiary before transferring funds through UPI? What
details of beneficiary will be required?
No, registration of Beneficiary is not required for transferring funds through UPI as the fund would
be transferred on the basis of Virtual ID/ Account+IFSC / Mobile No+MMID / Aadhaar Number.
(Please check with your PSP and Issuing bank with regard to the services enabled on the App).
4. Can I link more than one bank account to the same virtual address?
Yes, several bank accounts can be linked to the same virtual address depending on the
functionalities being made available by the respective PSPs. If the selected Bank name to link
with UPI does not find your bank a/c, please ensure that the mobile number linked to your bank
account is same as the one verified in BHIM App. If it is not the same, your bank accounts will not
be fetched by the UPI platform. Only Savings and Current bank accounts are supported by BHIM.
5. What are the different channels for transferring funds using UPI?
The different channels for transferring funds using UPI are:
Transfer through Virtual ID
Account Number + IFSC
Mobile Number + MMID
Aadhaar Number
Collect / Pull money basis Virtual ID
Bharat Interface for Money (BHIM) is an app that lets you make simple, easy and quick payment
transactions. BHIM is a digital payments solution app based on the Unified Payments Interface (UPI) from
the National Payments Corporation of India (NPCI), the umbrella organisation for all retail payments
systems in India. You can easily make direct bank to bank payments instantly and collect money using just
Mobile number or Payment address.
BHIM being UPI-based, is linked directly to a bank account. All the payee needs is a bank account. If this
account is UPI activated, you can just ask for the payee’s Virtual Payment Address (VPA), and make the
payment to that account.Otherwise, there’s the option of IFSC or MMID for sending or receiving money. The
advantage is there’s no need to remember an account number, or to share it with anyone. The VPA is all
that is needed.
If you have signed up for UPI-based payments on your bank account, which is also linked to your mobile
phone number, you’ll be able to use the BHIM app to carry out digital transactions. Services available are as
follows:
1. Send Money: User can send money using a Virtual Payment Address (VPA), Account Number &
IFSC, Aadhaar Number or QR code.
2. Request Money: User can collect money by entering Virtual Payment Address (VPA). Additionally
through BHIM App, one can also transfer money using Mobile No. (Mobile No should be registered
with BHIM or *99# and account should be linked)
3. Scan & Pay: User can pay by scanning the QR code through Scan & Pay & generate your QR
option is also present.
4. Transactions: User can check transaction history and also pending UPI collect requests (if any)
and approve or reject. User can also raise complaint for the declined transactions by clicking on
Report issue in transactions.
5. Profile: User can view the static QR code and Payment addresses created or also share the QR
code through various messenger applications like WhatsApp, Email etc. available on phone and
download the QR code.
8. Block User: Block/Spam users who are sending you collect requests from illicit sources.
9. Privacy: Allow a user to disable and enable mobilenumber@upi in the profile if a secondary VPA is
created (QR for the disabled VPA is also disabled).
QR code based scan & pay option available, Generate your own QR code option is also
available
Option to save your beneficiaries for future references
Access transaction history and Request Balance anytime
Create, reset or change UPI PIN
Report Issue and call Bank facilities are given to lodge complaints
FAQ section is created in the app to answer all the queries reg. BHIM
Available in 2 languages English and Hindi
Benefits of BHIM:
Single App for sending and receiving money and making merchant payments
Go cashless anywhere anytime
Added security of Single click 2 factor authentication
Seamless money collection through single identifiers, reduced risks, real time
Mobile no. or Name used to create VIRTUAL PAYMENT ADDRESS (VPA)
Best answer to Cash on Delivery hassle
Send and collect using VIRTUAL PAYMENT ADDRESS (VPA) or A/c no & IFSC.
Payments through single app in your favourite language.
24X7, 365 days instantaneous money transfer
Transfer Limits:
For Smart Phones with Internet option BHIM can be executed via the app (available in Play store and
coming soon for iPhone app store), whereas for feature phones, BHIM can be executed via phone dialler
using *99# option.
The charges for BHIM is one time hard binding SMS charges depending on the mobile operator (Standard
SMS charges of your operator).For *99# the charges are Rs.0.50/- for one transaction.
2. New BHIM user (Referee) initiates access to BHIM app or by dialing *99# from his/her mobile
number registered with bank and complete on-boarding process on BHIM i.e. downloading,
registering and fetching the bank account
3. New BHIM user (Referee) completes his/her first eligible financial transaction with any unique
user
1. Referee needs to enter the referral code (mobile number) of the referrer at the time doing the
first financial transaction with any unique user (to any valid UPI user including BHIM)
2. The referral code field (as an option) will appear on the transaction page and will be visible only
to the new BHIM user (referee) at the time of their first financial transaction process
3. In case of *99#, the referee will choose the option of entering the referral code (as an option) at
the time of on-boarding
4. System shall validate that if the referrer mobile number is valid BHIM registered
6. The bonus will be credited to the bank accounts of the referrer and the referee after meeting
the eligibility criteria (as stated below)
1. Merchant can download and install the BHIM App or *99# in his phone and will have an option
to self-declare himself/herself as merchant by clicking on “I Am A Merchant’ tab in BHIM App.
2. Once the user clicks on the “I AM A MERCHANT” tab, he/she has to fill in appropriate details
asked by the BHIM App - business name, contact number (auto populated), merchant category
(drop-down), merchant address, city, pin-code, account type
3. The scheme applies to all merchants who receive payments on BHIM App or *99#
4. Reward section in BHIM app would display the cashback received to the merchant.
5. Merchant can use any mode available on BHIM [QR Code, VPA, Mobile number, or Aadhaar
number] to collect the payments from their customers. Both push and pull based payments
shall qualify for this payments.
6. On achieving the cashback incentive slab as defined for the merchants, NPCI initiates the
cashback process using NACH platform and the merchant is notified of the cashback via
notification in BHIM app
Apps are fast becoming the primary way to interact with consumers - When banks first launched apps,
they were convenient tools to check your balance and keep on top of your spending. However,
consumers are expecting - and banks are delivering - ever more functionality. Particularly with younger
consumers, apps are becoming critical to attracting and retaining consumers. The benchmarks for
ranking a mobile banking are;
range of touchpoints,
enrollment and login,
account information,
transactional functionality,
service features,
Download apps for a range of smartphone operating systems. This is one of the greatest challenges -to
make the app work across operating systems with various versions of each. Downloadable smartphone
apps let digital banking teams use device-specific features to create a smoother and more intuitive
experience for mobile banking customers. Although some operating systems are more important in some
countries than others, the major four operating systems are - Android, BlackBerry OS, iOS, and Windows
Phone.
Easily complete banking tasks via a mobile website. Many customers use the browser on their mobile
device to access their bank account information, pay bills on the run, or make other mobile
transactions — and today they expect to perform these tasks without the hassle of pinching and zooming
their way through a mobile-unfriendly web experience.
Interact with the bank via SMS. Most banks report falling use of SMS text messaging relative to other
mobile banking touchpoints. Yet some consumers — especially those who do not have a smartphone —
continue to use text banking.
Enroll in mobile banking directly from their smartphone. As younger generations start opening their first
bank accounts, the proportion of customers who are mobile-first and mobile-only will rise. Digital banking
teams need to enable customers to register for digital banking directly from their mobile devices — rather
than forcing them to sign up for online banking first.
Understand how to use mobile banking. As content and functionality become more extensive, with
leading banks offering regular mobile updates, it’s important that digital banking teams communicate
these improvements and guide new users through how to use mobile banking.
Easily access security and privacy content. Many customers who are just starting to use mobile banking
worry about privacy and security, while others might want to be reassured in specific situations. This area
still remains a weak spot for many retail banks.
Get valuable content and account information pre-login. Digital banking teams have recognized that
customers don’t need to be logged in for every banking task and that many like the convenience of
accessing simple information without needing to enter a password. Log in easily. Banks must make the
mobile banking login process as painless as possible, without compromising security. Leading banks do
this by using multifactor authentication the first time customers use the app, then letting them use a
simplified login subsequently. Many banks offer convenient features, such as a “remember this device”
option and the ability to save user names, and they let users opt into an abbreviated login process using a
simple PIN code rather than entering a full alphanumeric password.
Quickly work out how to achieve their mobile banking goals. The mobile screen customers land on
immediately after logging in is a crucial part of their mobile banking experience. Digital banking teams
must design screens that make it easy for customers to complete the tasks they logged into mobile
banking to do. Most leading banks display prominent one-click links to the most common tasks directly on
the home screen.
Quickly and conveniently find transactions. Different customers will search their transaction history with
different search tools, according to personal preferences: Many banks are expanding the transaction
history tools available via mobile. See an accurate forecast for their spending. A growing number of banks
provide customers with a “future view” of their upcoming payments and transfers. And some are even
using predictive tools to include transactions the customer hasn’t yet set up.
Better understand their financial lives with embedded money management tools. Digital money
management will ultimately be embedded at the heart of digital banking. Not all money management
features make sense for mobile touchpoints, but digital teams should offer simple, integrated, and
contextual tools that help customers quickly and easily get the information they want or take the action
they need.
Move money without hassles. Overall, the banks offer strong and easy mobile money movement
functionality such as account-to-account and P2P money transfers.
Send money to other people without sensitive personal details- This is one of the important desired
features in most of the countries.
Buy items in stores without plastic. It is observed that digital wallets integrating offers, coupons, point-of-
sale (POS) payments, and loyalty rewards are poised to transform the way consumers shop and make
payments.
Solve account issues within the mobile app. Self-service features let a customer initiate or complete a
request without having to interact with a bank employee. Functionality that lets a customer dispute a card
transaction, report fraud, or order a new debit card is not widely available on banks’ mobile banking apps.
increasing number of banks are differentiating themselves by offering alerts delivery and management
within the mobile banking app.
Find branches and ATMs. Most of the banks evaluated make it easy for customers to find nearby
branches and ATMs, including key information such as hours of operation and providing step-by-step
directions.
Easily apply for a new product, account, or service. Application abandonment has been an issue for
digital sales teams at banks for years, and the physical limitations of mobile devices can amplify the
problem. Someone trying to open a new account is more likely to give up if he or she needs to pinch and
zoom through the task flow while also entering information into dozens of data entry fields. So cross-
selling effectively means making buying as easy and quick as possible for a customer. For example,
mBank has developed simplified product applications with two-step task flows and embedded them within
mobile banking.
In a typical world scenario, we come across Internet Service Providers (ISPs) advertising about “high
speed internet”. But when we look at our own internet connections, the download speeds seems to be far
below compared to what has been advertised. So what did your ISP actually mean by “Connection
Speed”? Is “Connection Speed” totally different from “Download Speed”?
People often confuse connection speed with downloading speed. Though both of these terms refer fairly
to the same thing, their interpretation is slightly different from one another.
On the other hand, when we download files from the internet, the same data transfer rate is interpreted as
Download Speed. Download speed is usually measured in KBps (Kilobyte per second).
A Typical Scenario
Say you have a 1 Mbps Internet connection. With such a connection speed, you might expect to
download files at a rate of around 1 MB per second, but when you actually download a file, the download
speed only reaches up to 100 – 120 KB per second.
Where’s the catch? If connection speed and download speed are fairly one and the same, as we
mentioned earlier, then we should be ideally getting the same speed for connection and download. So
what’s missing here?
Actually, connection and download speeds are measured in two different units, so even though these
measurements refer to the same thing, their interpreted values turn out to be quite different.
Unit used for Connection Speed: Kbps (Kilobit per Second), Mbps (Megabit per Second), Gbps (Gigabit
per Second) and so on…
Unit used for Download Speed: KBps (Kilobyte per Second), MBps (Megabyte per Second) and so on.
Why different units are used for measuring connection and download speed?
But a bit in itself is quite meaningless. The data in your computer is stored in the form of 8 bit blocks,
known as a byte. So when you download any file from the internet, it is generally represented in Byte.
Hence, download speed is usually measured in Kilobyte per second (KBps).
The noteworthy point here is the difference between bit and byte as used in the two units. Connection
speed is represented with a (small) ‘b’ for bit while download speed takes a (capital) ‘B’ for Byte. Let us
have a deeper look at the two units.
So, in a 1 Mbps connection, your maximum download speed would be 128 KBps (=1Mbps). And this
convention kind of suits the ISPs too, as it helps them to lure consumers into visually greater figures.
So, we should get a maximum download speed of 128 KBps on a 1 Mbps connection. But practically, we
would only be able to download files at 80 KBps – 120 KBps on average. The fall in the download rate
can be attributed to several external and internal factors.
Regular downloaders that are integrated with web browsers download files through a single connection.
To enhance downloading speeds, third party download manager applications (For example; IDM, DAP,
Orbit Downloader, etc.) are available which are able to set up multiple connections in parallel to download
a file. Of course, this feature can be primarily controlled by server restrictions. However, if allowed,
download managers can simultaneously download several parts of the file and hence improve the overall
downloading speed.
Torrent downloads work in a different way than regular downloads. Instead of the conventional client-
server model, this technology is based on a peer-to-peer model (P2P). In this model, data can flow
universally among number of connected users, known as peers. A file being shared on P2P is distributed
across the entire network.
There are two types of Peer –Seeder and Leecher. Seeders are users uploading data in the network, and
leechers are those who are downloading it. In a torrent network, if there are more number of leechers
than seeders, downloading speed might decrease as there are more nodes downloading the data than
those who are uploading. On the other hand, if there are more number of seeders, downloading speed
might be higher.
Torrent downloads can, in fact, be faster than regular downloads, since there are numerous active
parallel connections to download parts of the data. Nodes can connect to a torrent network via BitTorrent
clients. Once peers complete download, they can also seed it for other leechers to download from.
You can find out your own connection speed by performing an online test. Speedtest.net is a good web
application to rate your connection in terms of Download and Upload speed.
Connection speed and download speed are fairly the same thing, only measured in different units. So, to
get download speed (in KBps) from connection speed (in Mbps), first multiply the connection speed by
1024 to convert from Megabit (Mb) to Kilobit (Kb), and then divide by 8 to convert it from Kilobit (Kb) to
Kilobyte (KB).
Cheque truncation means stopping the flow of the physical cheques issued by a drawer to the drawee
branch. The physical instrument is truncated at some point en-route to the drawee branch and an
electronic image of the cheque is sent to the drawee branch along with the relevant information like the
MICR fields, date of presentation, presenting banks etc. This would eliminate the need to move the
physical instruments across branches, except in exceptional circumstances, resulting in an effective
reduction in the time required for payment of cheques, the associated cost of transit and delays in
processing, etc., thus speeding up the process of collection or realization of cheques.
CTS has been implemented in New Delhi, Chennai and Mumbai with effect from February 1, 2008,
September 24, 2011 and April 27, 2013 respectively. After migration of the entire cheque volume from
MICR system to CTS, the traditional MICR-based cheque processing has been discontinued across the
country. The CTS-2010 compliant cheques are both image friendly and have enhanced security features.
All banks providing cheque facility to their customers have been advised to issue only 'CTS-2010'
standard cheques. Cheques not complying with CTS-2010 standards would be cleared at less frequent
intervals i.e. weekly once from November 1, 2014 onwards.
Banks derive multiple benefits through the implementation of CTS, like a faster clearing cycle meaning
technically possible realization of proceeds of a cheque within the same day. It offers better reconciliation/
verification, better customer service and enhanced customer window. Operational efficiency provides a
direct boost to bottom lines of banks as clearing of local cheques is a high cost low revenue activity.
Besides, it reduces operational risk by securing the transmission route. Centralized image archival
systems ensure that data storage and retrieval is easy. Reduction of manual tasks leads to reduction of
errors. Real-time tracking and visibility of the cheques, less frauds with secured transfer of images to the
RBI are other benefits that banks derive from this solution.
NG-RTGS has been introduced in India since October 2013. With its advanced liquidity and queue
management features, the new RTGS system is expected to significantly improve the efficiency of
financial markets. He hoped the new RTGS system would be such a driver for India‘s financial system.
Reportedly the first in the world to be built on ISO 20022 messaging standards, the new RTGS system is
highly scalable and will have several new functionalities. These include advance liquidity features,
The new ISO 20022 compliant RTGS system provides three access options to participants thick-client,
Web-API (through INFINET or any other approved network) and Payment Originator module. The
participants can decide the mode of participation in the system based on the volume of transactions and
the cost of setting up the infrastructure.
The RTGS infrastructure in India is critical in facilitating the orderly settlement of payment obligations. The
role of central banks as operators of large-value payment systems is important in the context of the
broader role of the central bank in a nation’s financial system insofar as it offers safety net attributes by
providing final settlement in central bank money.
RTGS is a critical Financial market Infrastructure (FMI) operated by the Reserve Bank of India and it will
be assessed against the Committee on Payment and Settlement Systems and the International
Organisation of Securities Commissions (CPSS-IOSCO) Principles for Financial Market Infrastructures
applicable to FMIs.
With implementation of the new RTGS system, the existing RTGS system will cease to be operational.
Further, the RTGS System Regulations 2013would replace the RTGS (Membership) Business Operating
Guidelines, 2004 and RTGS (Membership) Regulations, 2004.
National Electronic Funds Transfer (NEFT) is a nation-wide payment system maintained by Reserve Bank
of India (RBI), facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates
can electronically transfer funds from any bank branch to any individual, firm or corporate having an
account with any other bank branch in the country participating in the Scheme. Against the principle of
RTGS which is a Real-Time as well as Gross Settlement system, NEFT settlement happens in batches.
For being part of the NEFT funds transfer network, a bank branch has to be NEFT- enabled. The list of
bank-wise branches which are participating in NEFT is provided in the website of Reserve Bank of India.
Individuals, firms or corporates maintaining accounts with a bank branch can transfer funds using NEFT.
Even such individuals who do not have a bank account (walk-in customers) can also deposit cash at the
NEFT-enabled branches with instructions to transfer funds using NEFT. However, such cash remittances
will be restricted to a maximum of Rs.50,000/- per transaction. Such customers have to furnish full details
Individuals, firms or corporates maintaining accounts with a bank branch can receive funds through the
NEFT system. It is, therefore, necessary for the beneficiary to have an account with the NEFT enabled
destination bank branch in the country.
The NEFT system also facilitates one-way cross-border transfer of funds from India to Nepal. This is
known as the Indo-Nepal Remittance Facility Scheme. A remitter can transfer funds from any of the
NEFT-enabled branches in to Nepal, irrespective of whether the beneficiary in Nepal maintains an
account with a bank branch in Nepal or not. The beneficiary would receive funds in Nepalese Rupees.
Limit on the amount that could be transferred using NEFT – No. There is no limit – either minimum or
maximum – on the amount of funds that could be transferred using NEFT. However, maximum amount
per transaction is limited to Rs.50,000/- for cash-based remittances within India and also for remittances
to Nepal under the Indo-Nepal Remittance Facility Scheme.
Operating hours of NEFT - Unlike Real-time gross settlement (RTGS), fund transfers through the NEFT
system do not occur in real-time basis. NEFT settles fund transfers in half-hourly
batches with 23 settlements occurring between 8:00 AM and 7:00 PM on week days. Transfers initiated
outside this time period are settled at the next available window. No settlements are made on the second
and fourth Saturday of the month or on Sundays.
Process of NEFT system - An individual / firm / corporate intending to originate transfer of funds through
NEFT has to fill an application form providing details of the beneficiary (like name of the beneficiary,
name of the bank branch where the beneficiary has an account, IFSC of the beneficiary bank branch,
account type and account number) and the amount to be remitted. Customers enjoying net banking
facility offered by their bankers can also initiate the funds transfer request online. Some banks offer the
NEFT facility even through the ATMs.
The originating bank branch prepares a message and sends the message to its pooling centre (also
called the NEFT Service Centre). The pooling centre forwards the message to the NEFT Clearing Centre
(operated by National Clearing Cell, Reserve Bank of India, Mumbai) to be included for the next available
batch.
Finally, the destination banks receive the inward remittance messages from the Clearing Centre and pass
on the credit to the beneficiary customers’ accounts.
IFSC- IFSC or Indian Financial System Code is an alpha-numeric code that uniquely identifies a bank-
branch participating in the NEFT system. This is an 11 digit code with the first 4 alpha characters
representing the bank, and the last 6 characters representing the branch. The 5th character is 0 (zero).
IFSC is used by the NEFT system to identify the originating / destination banks / branches and also to
route the messages appropriately to the concerned banks / branches.
Acknowledgement by SMS - In case of successful credit to the beneficiary's account, the bank which had
originated the transaction is expected to send a confirmation to the originating customer (through SMS or
e-mail) advising of the credit as also mentioning the date and time of credit. For the purpose, remitters
need to provide their mobile number / e-mail-id to the branch at the time of originating the transaction.
Tracking an NEFT transaction - The remitter can track the NEFT transaction through the originating bank
branch or its CFC using the unique transaction reference number provided at the time of initiating the
funds transfer. It is possible for the originating bank branch to keep track and be aware of the status of
the NEFT transaction at all times.
NEFT offers many advantages over the other modes of funds transfer:
The remitter need not send the physical cheque or Demand Draft to the beneficiary. The
The beneficiary need not be apprehensive of loss / theft of physical instruments or the likelihood of
fraudulent encashment thereof.
Remitter can initiate the remittances from his home / place of work using the internet banking also.
Near real time transfer of the funds to the beneficiary account in a secure manner.
NEFT has gained popularity due to its saving on time and the ease with which the transactions can be
concluded. Introduction of Immediate Payment Services (IMPS) by 41.National Payments Corporation of
India (NPCI), which is gaining popularity reduces the burden on NEFT systems at RBI.
National Payments Corporation of India (NPCI), is the umbrella organisation for all retail payment systems
in India, which aims to allow all Indian citizens to have unrestricted access to e-payment services.
Founded in 2008, NPCI is a not-for-profit organisation registered under section 8 of the Companies Act
2013. The organisation is owned by a consortium of major banks,[3] and has been promoted by the
country’s central bank, the Reserve Bank of India. Its recent work of developing Unified Payments
Interface aims to move India to a cashless society with only digital transactions.
It has successfully completed the development of a domestic card payment network called RuPay,
reducing the dependency on international card schemes. The RuPay card is now accepted at all the
ATMs, Point-of-Sale terminals and most of the online merchants in the country. More than 300
cooperative banks and the Regional Rural Banks (RRBs) in the country have also issued RuPay ATM
cards.
More than 250 million cards have been issued by various banks, and it is growing at a rate of about
3 million per month. A variant of the card called ‘Kisan Card’ is now being issued by all the Public
Sector Banks in addition to the mainstream debit card which has been issued by 43 banks. RuPay cards
are also issued under the Jan Dhan Yojana scheme.
NPCI has taken over NFS (National Financial Switch) operations from 14 December 2009 from IDRBT.
Membership regulations and rules are being framed for enrolling all banks in the country as members so
National Financial Switch (NFS) which connects 1, 98, 953 ATMs of 449 banks (91 Member Banks, 358
Sub- Member). Immediate Payment Service (IMPS) provided to 84 member banks, with more than 8.49
crore MMID (Mobile Money Identifier) issued, and crossed 10 million transactions.
National Automated Clearing House (NACH) - has close to 400 banks on board. Aadhaar Payments
Bridge System (APBS) has more than 358 banks. Cheque Truncation System (CTS)
has fully migrated in 3 grids - southern, western & northern grids from MICR centres. Aadhaar-enabled
payment system (AEPS) - has 36 member banks. RuPay – Domestic Card Scheme- has issued over 20
crore cards and enabled 10, 70, 000 PoS terminals in the country. The newest and most advanced
addition to the NPCI revolution is the Unified Payments Interface (UPI) which has been launched on 11
April 2016.
RuPay PaySecure - Over 20 banks now offer this authentication mechanism to their RuPay cardholders.
The new transaction flow of Card + OTP has infused more simplicity to cardholders. More than 70,000
merchants accept Rupay cards online. RuPay PaySecure is live on 10 acquiring banks which includes
Union Bank of India, Kotak Mahindra Bank, Citi Bank, ICICI Bank, HDFC Bank, State Bank of India, IDBI
Bank, IndusInd Bank, Bank of Baroda and Bank of India.
42. Debit Cards known as check cards. It operates like cash or a personal check. Debit cards are
different from credit cards.
Credit card is a way to “Pay Later” whereas debit card is a way to “Pay Now.” In case of debit card, bank
account of the
customer will be debited immediately on completion of transaction. Debit cards are accepted at many
locations, including
retail stores, petrol pumps, and restaurants. The liberalized norms coupled with ease of usage have led to
increase debit
card base over the years. Of late, banks are consciously driving the customers to alternate delivery
channels by issuing
debit cards on the day of opening of the account itself to reduce the work load and to enable them to pay
focused attention
on core banking activities. In order to make Credit/Debit Card transactions more secure, RBI mandated
the card holders to
enter PIN while transacting at POS terminals. As per recent RBI guidelines, all banks are mandated to
issue only Chip
enabled Cards w.e.f.01.10.16.
National Financial Switch (NFS) - network of shared automated teller machines in India. Unified
Payment Interface (UPI) - Single mobile application for accessing different bank
accounts
Immediate Payment Service (IMPS) - Real time payment with mobile number. *99# -
mobile banking using USSD
Immediate Payment Service (IMPS) is an instant real-time inter-bank electronic funds transfer system
in India. IMPS offers an inter-bank electronic fund transfer service through mobile phones. Unlike
NEFT and RTGS, the service is available 24/7 throughout the year including bank holidays. When one
initiates a fund transfer via IMPS, the initiator bank sends a message to IMPS, which debits the money
and sends it to the receiving account. All this happens within 5-10 seconds.
IMPS is an innovative real time payment service that is available round the clock. This service is offered
by National Payments Corporation of India (NPCI) that empowers customers to transfer money instantly
through banks and RBI authorized Prepaid Payment Instrument Issuers (PPI) across India.
Benefits of IMPS
Instant
NUUP (National Unified USSD Platform) is a USSD based mobile banking service from NPCI that
brings together all the Banks and Telecom Service Providers. In NUUP, a customer can access
banking services by just pressing *99# from his/her mobile phones. This service works across all
GSM mobile handsets.
IMPS transactions can be sent and received 24X7, (round the clock), including on holidays. Both sender
& receiver get SMS confirmation.
Bharat Interface for Money (BHIM) is an app that lets you make simple, easy and quick payment
transactions using Unified Payments Interface (UPI). You can make instant bank-to-bank payments and
Pay and collect money using just Mobile number or Virtual Payment Address (VPA).
1. Send Money: User can send money using a Virtual Payment Address (VPA), Account Number &
IFSC, Aadhaar Number or QR code.
2. Request Money: User can collect money by entering Virtual Payment Address (VPA). Additionally
through BHIM App, one can also transfer money using Mobile No. (Mobile No should be
registered with BHIM or *99# and account should be linked)
3. Scan & Pay: User can pay by scanning the QR code through Scan & Pay & generate your QR
option is also present.
4. Transactions: User can check transaction history and also pending UPI collect requests (if any)
and approve or reject. User can also raise complaint for the declined transactions by clicking on
Report issue in transactions.
6. Bank Account: User can see the bank account linked with his/her BHIM App and set/change the
UPI PIN. User can also change the bank account linked with BHIM App by clicking Change
account provided in Menu and can also check Balance of his/her linked Bank Account by clicking
“REQUEST BALANCE”
8. Block User: Block/Spam users who are sending you collect requests from illicit sources.
9. Privacy: Allow a user to disable and enable mobilenumber@upi in the profile if a secondary VPA
is created (QR for the disabled VPA is also disabled).
**BHIM APP is available in play store (for android User) and App Store (for Apple User)**
50. Bharat QR
In a major push for seamless cashless transactions, Govt. of India has launched Bharat QR Code, which
is world’s first interoperable payment platform. National Payments Corporation of India (NPCI), which is
the umbrella organisation for all digital and online retail payment systems in India, has developed this
platform, which is expected to inspire and encourage more digital payments, without using debit or credit
card.
QR Codes are black and white two-dimensional machine readable code, which stores information about
the merchant’s bank accounts and URLs. With Bharat QR Code interface, merchants need to take a
printout of their QR code (or have a soft copy) and show it to the consumer, who can simply scan the
code using his or her smartphone, and the payment would be made. Instantly, seamlessly and without
any hassles.
We had reported last year that Govt. is considering to create a common QR Code based payment
mechanism, which has now been officially launched. The Retail industry is excited by its possibilities
because QR code-based payments solves two major problems in a single go: a) less time consumed to
make the payment, compared to debit/credit card b) no requirement to actually flash your credit/debit
cards for making the payment.
Here are some interesting facts about Bharat QR Code payment system, which every debit/credit holder
(who is also a bank account holder) should be aware of:
The smartcards have increased data security, an active anti-fraud capabilities, multipurpose capabilities,
flexibility in applications, and off-line validation. These functions are more or less inter-related but the
most important of all is the high level of security provided by the smartcard compared to the other type of
cards in operation. This makes it possible the use the smart cards in transactions dealing with money,
property and personal data.
The Reserve Bank of India has set a target for banks to upgrade all ATMs by September 2017 with
additional safety measures to process EMV chip and PIN cards in order to prevent skimming and cloning
of debit and credit cards.
While the POS terminal infrastructure in the country has been enabled to accept and process EMV chip
and PIN cards, the ATM infrastructure continues to process the card transactions based on data from the
magnetic stripe. As a result, the ATM card transactions remain vulnerable to skimming, cloning, etc.
frauds, even though the cards are EMV chip and PIN based.
It has become necessary to mandate EMV (Europay, MasterCard, Visa) chip and PIN card acceptance
and processing at ATMs also. Contact chip processing of EMV chip and PIN cards at ATMs would not
only enhance the safety and security of transactions at ATMs but also facilitate preparedness of the
banks for the proposed “EMV Liability Shift” for ATM transactions, as and when it comes into effect.
Further, in order to ensure uniformity in card payments ecosystem, banks should also implement the new
requirements at their micro-ATMs which are enabled to handle card-based payments.
The CVV Number ("Card Verification Value") on credit card or debit card is a 3 digit number on VISA,
MasterCard and Discover branded credit and debit cards. On American Express branded credit or debit
card it is a 4 digit numeric code.
Providing the CVV number to an online merchant proves that one actually has the physical credit or debit
card - and helps to keep one safe while reducing fraud.
CVV numbers are NOT the card's secret PIN (Personal Identification Number).
One should never enter one’s PIN number when asked to provide the CVV. (PIN numbers allow one to
use one’s credit or debit card at an ATM or when making an in-person purchase with debit card or a cash
advance with any credit card.)
CVV numbers are also known as CSC numbers ("Card Security Code"), as well as CVV2 numbers, which
are the same as CVV numbers, except that they have been generated by a 2nd generation process that
makes them harder to "guess".
In 2016, a new e-commerce technology called Motioncode was introduced, designed to automatically
refresh the CVV code to a new one every hour or so.
ATM (Automated Teller Machine) A typical ATM could duplicate most of the services of a live teller;
deposits, withdrawals, and money transfers between accounts all could be made with relative ease. More
significantly, the terminals could be located outside the bank lobby, allowing 24 hour access and greater
customer convenience. For the banks ATM’s became mini-branches that extended their financial territory
and customer base far beyond physical buildings. As a result, many ATMs rapidly found homes inside
major retail outlets, convenience stores, gas stations, and other highly trafficked locations, a situation
welcomed by businesses because it provided instant cash for customers.
White label ATMs are those ATMs which do not belong to any bank but managed by a non-banking entity,
e.g., Indicash, India-1 ATM, Prism Payment Services.
However, ATM’s would not be the final solution to the common electronic goal, because they still involved
the use of paper money. Yet, in a second generation machine called a Point of Sale terminal (POS), the
A point of sale terminal (POS terminal) is an electronic device used to process card payments at retail
locations. . Point of sale terminals are a combination of software and hardware that allows retail locations
to accept card payments without updating their cash registers to read cards directly. The costs of
installing POS terminals vary with the size of the business and the terms from the supplier. Small
merchants may have to pay rent for the terminal, as well as pay an additional per-transaction fee.
The trend is away from the traditional use of just magnetic stripe reader as more options open up for
mobile payments.
Transfers the funds from the customer’s account to the seller’s account (or at least,
accounts for the transfer with the credit card network)
Despite the more advanced technology of a POS system as compared to a simple cash register, the POS
system is still as vulnerable to employee theft through the sale window. A dishonest cashier at a retail
outlet can collude with a friend who pretends to be just another customer. During checkout the cashier
can bypass scanning certain items or enter a lower quantity for some items thus profiting thereby from the
"free" goods.
With the launch of mobile payment particularly Android Pay and Apple Pay both in 2015, it is expected
that because of its greater convenience coupled with good security features, this would eventually eclipse
other types of payment services - including the use of payment terminals. However, for mobile payment to
go fully mainstream, mobile devices like smartphones that are NFC-enabled must first become universal.
NFC (near field communication) is the technology that allows two devices—like your phone and a
payments terminal—to talk to each other when they're close together. NFC is the technology that enables
contactless payments.
A key outcome of the technology revolution in India has been connectivity, which has fuelled
unprecedented access to information. Millions of people who had little means to join the national
discourse can now gain new insights into the world around them. Farmers know crop prices. Consumers
understand global standards of product and service quality. Rural Indians recognise the differences
between the opportunities available to them and those available to their urban counterparts. And citizens
have a mass forum for expressing their political opinions. The upshot of this connectivity revolution has
been empowerment of Indians.
An analysis of the demographic profile of internet users further testifies that eCommerce will rise rapidly in
India in coming years. Around 75% of Indian internet users are in the age group of 15 to 34 years. This
category shops more than the remaining population. Peer pressure, rising aspirations with career growth,
fashion and trends encourage this segment to shop more than any other category and India, therefore,
clearly enjoys a demographic dividend that favours the growth of eCommerce. In coming years, as
internet presence increases in rural areas, rural India will yield more eCommerce business
Mobile to be the most influential aspect of eCommerce -With mobile apps being developed by most
eCommerce websites, smartphones are increasingly replacing PCs for online shopping. In 2013, only
10% of the mobile users used smartphones, and only 5% of the eCommerce transactions were made
through a mobile device. This figure has more than doubled, and more than 13% of all eCommerce
transactions today happen via mobile3. According to some industry players, over 50% of the orders are
being placed through mobile apps, which is not only leading to substantial customer acquisition but also
building customer loyalty for various brands. However, most mobile transactions so far are for
entertainment, such as booking movie tickets and music downloads. This trend will change soon with
more and more merchandise being ordered online.
More business coming from smaller towns - eCommerce is increasingly attracting customers from Tier 2
and 3 cities, where people have limited access to brands but have high aspirations. According to
eCommerce companies, these cities have seen a 30% to 50% rise in transactions.
Enhanced shopping experience - Besides general online shopping, customers are also shopping online
for weddings and festivals, thanks to wider range of products being offered and aggressive
advertisements. The free and quick shipment and wider choice of products, along with the ease of
Exclusive partnerships with leading brands - Over the year or so, there has been a trend of exclusive tie-
ups between eTailers and established boutiques, designers, and high-end lifestyle and fashion brands.
For instance, Jabong added international fashion brands such as Dorothy Perkins, River Island, Blue
saint and Miss Selfridge, along with local fashion brands through Jabong Boutiques. Similarly, Myntra
benefited from exclusive tie-ups with brands such as Harvard Lifestyle, Desigual and WROGN from Virat
Kohli.
Expanding the product basket - There is a recent trend of relatively newer products such as grocery,
hygiene, and healthcare products being purchased online. Similarly, lingerie and Indian jewellery has also
been in great demand among customers outside India. Export comprises 95% of cross-border
eCommerce, with the US, UK, Australia, Canada and Germany being the major markets.
To get the maximum benefit from eCommerce business, a large number of companies such as Amazon,
Alibaba etc. are adopting different innovative ideas and operating models including partnering with online
marketplaces or setting up their own online stores. Some key operating models include the following:
• Marketplace and pick-up & drop is a model where sellers often partner with leading marketplaces
to set up a dedicated online store on the latter’s website. Here sellers play a key role of managing
inventory and driving sales. They leverage on high traffic on the marketplaces’ website and
access their distribution network. However, the sellers have limited say on pricing and customer
experience.
• Self-owned inventory is a model where the eCommerce player owns the inventory. The model
provides better post-purchase customer experience and fulfilment. It provides smoother
operations due to ready information on the inventory, location, supply chain and shipments,
effectively leading to better control over inventory. On the flipside, however, there are risks of
potential mark downs and working capital getting tied up in inventory.
• Private label reflects a business where an eCommerce company sets up its own brand goods,
which it sells through its own website. This model offers a wide-ranging products and pricing to its
customers and competes with branded labels. Here, margins are typically higher than third-party
branded goods.
• White label involves the setting up of a branded online store managed by the eCommerce player
or a third party. The brand takes the responsibility of generating website traffic and providing
services by partnering with payment gateways. It helps build trust, customer affinity and loyalty
and provides better control of brand and product experience.
SMS banking is a form of mobile banking. It is a facility used by some banks or other financial institutions
to send messages (also called notifications or alerts) to customers' mobile phones using SMS messaging,
or a service provided by them which enables customers to perform some financial transactions using
SMS.
SMS banking services may use either push and pull messages. Push messages are those that a bank
sends out to a customer's mobile phone, without the customer initiating a request for the information.
Typically, a push message could be a mobile marketing message or an alert of an event which happens
in the customer's bank account, such as a large withdrawal of funds from an ATM or a large payment
involving the customer's credit card, etc. It may also be an alert that some payment is due, or that an e-
statement is ready to be downloaded.
Another type of push message is one-time password (OTPs). OTPs are the latest tool used by financial
institutions to combat cyber fraud. Instead of relying on traditional memorized passwords, OTPs are sent
to a customer's mobile phone via SMS, who are required to repeat the OTP to complete transactions
using online or mobile banking. The OTP is valid for a relatively short period and expires once it has been
used.
Bank customers can select the type of activities for which they wish to receive an alert. The selection can
be done either using internet banking or by phone.
Pull messages are initiated by the customer, using a mobile phone, for obtaining information or
performing a transaction in the bank account. Examples of pull messages include an account balance
enquiry, or requests for current information like currency exchange rates and deposit interest rates, as
published and updated by the bank. Depending on the selected extent of SMS banking transactions
offered by the bank, a customer can be authorized to carry out either non-financial transactions, or both
and financial and non-financial transactions. SMS banking solutions offer customers a range of
functionality, classified by push and pull services as outlined below.
insufficient funds;
large value payment on a credit card or out of country activity on a credit card. one-
time password and authentication
Transfers between customer's own accounts, like moving money from a savings account to a
current account to fund a cheque;
The lack of encryption on SMS messages is an area of concern that is often discussed. This concern
sometimes arises within the group of the bank’s technology personnel, due to their familiarity and past
experience with encryption on the ATM and other payment channels. The lack of encryption is inherent to
Suppliers of SMS banking software solutions have found reliable means by which the security concerns
can be addressed. Typically the methods employed are by pre-registration and using security tokens
where the transaction risk is perceived to be high.
Most online banking platforms are owned and developed by the banks using them. There is only one
open source online banking platform supporting mobile banking and SMS payments called Cyclos, which
is developed to stimulate and empower local banks in development countries.
This is a very useful facility that sends customer information on customer’s banking transactions. The
alerts are either event based or frequency based. When register for certain alerts they are sent to
customer either via SMS or email, or both. Some alerts are made mandatory by regulator whereas for
others they customer may choose as per his requirement. Some banks send email alerts for monthly
account statements in encrypted pdf format which may be opened using a password only.
RBI’s has made SMS for clearing cheque transactions mandatory- Expressing concern over the rise in
cheque-related fraud cases, the Reserve Bank of India (RBI) has made SMS alerts mandatory for such
transactions since November 2014. Banks now send SMS alerts to both payer and drawer in cheque
transactions as soon as the instruments are received for clearing.
Bharat Bill Payment System (BBPS) is an integrated bill payment system in India offering interoperable
and accessible bill payment service to customers online as well as through a network of agents, enabling
multiple payment modes, and providing instant confirmation of payment.
57. National Payments Corporation of India (NPCI) will function as the authorised Bharat Bill Payment
Central Unit (BBPCU), which will be responsible for setting business standards, rules and procedures for
technical and business requirements for all the participants. NPCI, as the BBPCU, will also undertake
clearing and settlement activities related to transactions routed through BBPS. Existing bill aggregators
and banks are envisaged to work as Operating Units to provide an interoperable bill payment system
Computer Security which is also at times referred to as information security is concerned with three main
areas:
1. Confidentiality:- Only authorized users can access the data resources and information.
2. Integrity:- Only authorized users should be able to modify the data when needed.
Each of the above three areas is critical for computer security. Confidentiality deals with prevention of
data theft such as bank account information, credit card information, passwords etc. Integrity refers to
prevention of unauthorized data creation, modification or deletion. Last but not the least is availability,
which ensures that the users are able to access data whenever needed.
Background
In order to further speed track Financial Inclusion in the country, Two Working Group were constituted by
RBI on MicroATM standards and Central Infrastructure & Connectivity for Aadhaar based financial
inclusion transactions with members representing RBI, Unique Identification Authority of India, NPCI,
Institute for Development and Research in Banking Technology and some special invitees representing
banks and research institutions.
The working group on MicroATM standards & Central Infrastructure & Connectivity has submitted its
report to RBI. As a part of the working group it was proposed to conduct a Lab level Proof of concept
(PoC), integrating the authentication & encryption standards of UIDAI, to test the efficacy of MicroATM
AEPS is a new payment service offered by the National Payments Corporation of India to banks, financial
institutions using ‘Aadhaar’. This shall be known as ‘Aadhaar Enabled Payment System’ and may also be
referred to as “AEPS”. AEPS is a bank led model which allows online interoperable financial inclusion
transaction at PoS (MicroATM) through the Business correspondent of any bank using the Aadhaar
authentication. Any resident of India holding an Aadhaar number and having a bank account may be a
part of the Aadhaar Enabled Payment System.
The customer conducting an AEPS transaction may visit a BC Customer Access Point. The BC using
the Point of Sale (MicroATM) device will be able to process transactions like Cash Withdrawal, Cash
Deposit, Balance Enquiry and Fund Transfer by selecting the transaction of their choice. The Customer
needs to provide their Aadhaar Number and their bank name or bank IIN number.
IIN number identifies the bank to which the customer has mapped his/her Aadhaar number. Each bank
would be issued a unique Issuer Identification Number (IIN) NPCI. This is a six digit number. The
customer service point will have the IIN number represented on the terminal by various bank logos/ bank
names or the Business Correspondent (BC) agent will have a chart displayed of various banks IIN in the
customer service centre. Therefore the customer need not necessarily remember the IIN. It is however
recommended that the customer be aware of their bank IIN to completely ensure an AEPS transaction.
The four Aadhaar enabled basic types of banking transactions are as follows:-
• Balance Enquiry
• Cash Withdrawal
• Cash Deposit
The only inputs required for a customer to do a transaction under this scenario are:-
• Aadhaar Number
Objectives
To empower a bank customer to use Aadhaar as his/her identity to access his/ her respective
Aadhaar enabled bank account and perform basic banking transactions like balance enquiry,
Cash deposit, cash withdrawal, remittances that are intrabank or interbank in nature, through a
Business Correspondent.
Balance Enquiry
Cash Withdrawal
Cash Deposit
Aadhaar to Aadhaar Fund Transfer
Gateway Authentication Services
12. Maximum RTGS Charge for Rs.2 lac to 5 lac: Rs.25.00 + service tax
13. Application under ASBA can be applied for: a) IPO b) Right Issue c) Mutual fund
14. E-sahyog portal:belongs to Income Tax
15. A Proxy server is for: To provide security against unauthorized users
16. Phising?: To steal the customers personal / confidential data
17. In case of failed ATM transaction customer will get money in 7 working days after compliant
18. CVV: Customer Verification Value
19.NPCI: National Payment Corporation of India.
20. NUUP: National Unified USSD Platform.
21.IMEI: International Mobile Equipment Identity.
22. CVD: Customer Verification Data.
23.STP straight through process
24. . Forward Market Commission is established for:.- Commodity futures
25. Full form of ALU: Arithmetical Logical Unit
26. Full form of HTTP: Hyper Text Transfer Protocol
27. Full form of INFINET? Indian Financial Network
28. GBM: Govt. Business Module
29. IBPP stands for: Internet Bill Presentation & Payment
30. IMPS: Immediate Mobile Payment Service - Mobile to account
31. Starting of a computer is called: Booting
32. Universal set of standards and guidelines for communication by EDI is called: EDIFACT.
33. Full form of ISDN: Integrated Services Digital Network.
34. RTGS amount limit for customers: Min Rs.2 lac and no max
35. Which bank has max share in INFINO PAYTECH Ltd : ICICI Bank
36. USSD: Unstructured Supplementary Service Data.
37. LAN: Local Area Network
38. AEPS stands for : Aadhar Enabled Payment System
39 ATM : Anywhere, anytime,
40. BCP- Business continuity Plan
41. First committee on computerization in banks was headed by: Dr C Rangarajan.
42. In an Organisation communication between the same organization, what type of system applicable:
Intranet.
43. In CBS, signatures are loaded through scanning..
44. WAN: Wide area network
45.WAN uses ….interconnecting computers at different Geographical locations
46.CHI : Clearing Housing interface
47.ECE: electronic clearing system
48.APB: Aadhaar pay bridge
49. When in a computer network one network protocol encapsulates a different payload protocol, it is
called: Tunnel.
50 Computer Security Day : 30th November
GLOSSORY:
COMPUTER TERMINOLOGY
Firewall: Software programme that restricts unauthorized access to data and acts as a security to private
network
Hard Disk: A device for storage of data fitted in the processor itself
Modem: Modulator & Demodulator: A device used for converting digital signals to analog signals & vice-
versa
Virus: Vital Information Resources Under Seize: Software programme that slows down the working of a
computer or damages the data. Main source of virus is internet (other sources are floppy or CD)
Vaccine: Anti Virus Software programme used for preventing entry of virus or repairing the same
Digital Sign: Authentication of. electronic records by a subscriber by means of electronic method or
procedure
Key used: For digital signatures, there is a pair of keys, private key & public key
Hacking: Knowingly concealing, destroying, altering any computer code used for computer network
Address: The location of a file. You can use addresses to find files on the Internet and your computer.
Internet
IMPORTANT ABBREVIATIONS
• Al – Artificial intelligence ,
CC – Carbon Copy,
Processing
EXE - Executable
FAX - Far Away Xerox/ facsimile ,FDC - Floppy Disk Controller, FDD - Floppy Disk Drive ,FORTRAN -
Formula Translation, FS -
File System
Gb – Gigabit ,
GB – Gigabyte ,
GIF - Graphics Interchange Format,
GSM - Global System for Mobile Communication
Disclaimer
While every effort has been made by me to avoid errors or omissions in this publication, any error
ordiscrepancy noted may be brought to my notice throughr e-mail to [email protected] which
shall be taken care of in the subsequent editions. It is also suggested that toclarify any doubt colleagues
should cross-check the facts, laws and contents of this publication with original Govt. / RBI /
Manuals/Circulars/Notifications/Memo/Spl Comm. of our bank.
Blog for updates: https://iibfadda.blogspot.com/