One more innovative feature has been introduced by Reserve Bank of India and IDBRT in NEFT (National Electronic Funds Transfer) ePayment channel.
W.e.f 09/03/2013, the NEFT messages will be released continuously to the destination banks. At present, the messages are piled up at SFMS central server, and were released on the batch settlement timings.
In the new flow, the messages will flow continuously to the destination banks. The destination banks has two options
01) Credit the beneficiary accounts but show the balance under ‘shadow balance’, till receipt of the Batch Settlement Message. Once the Batch Settlement Message is received, the ‘shadow balance’, to be converted to ‘available balance’.
02)Pool the messages at their end and on receipt of Batch Settlement Message, credit the beneficiaries’ accounts.
In my view, majority of the banks will opt for the 2nd option, as it is more customer-friendly and technology-friendly.
Major benefits of the Continuous release of the credit messages envisaged are:
01) No pileup of messages at SFMS central server.
02)Minimal technology disruption at SFMS end or the Banks end.
03)The settlement cycle for some failed transactions like ‘account closed’, ‘no such account’, can be completed in the same batch.
04)Optimum usage of the network, as messages flow continuously.
05) Attract new bulk players to NEFT, as there will be minimal delay between the account debit and the beneficiary account credit.
Way back in March 2010, the benefits of NEFT Batch @8.00am were outlined in this Blog post.
Now, the 8.00am batch has become official. RBI in its Second Quarter Review of Monetary Policy 2012-13 has announced the launch of the NEFT 8.00am batch.
The main aim of the new batch is to decongest the build-up of transactions in the first batch on all days including Saturdays.
It has been observed that many customers including bulk upload customers prefer to queue up transactions after the NEFT cut-off time, so that the beneficiaries can receive the funds early next morning. This batch will benefit them.
With this, the number of NEFT batches will increase to 12 from the present 11.
In my view, this would also motivate customers to opt for NEFT over RTGS, as RTGS opens at 9.00am, and the early bird will experience the joy of quick ePayments via the 8.00am batch.
The new batch will also increase the window time, for retransmitting failed transactions.
The major challenge will be at the HR front, as now the Banks Ops team will have to be in office by 7.30am to ensure all is well.
The numbers of complaints to Reserve Bank of India, on the different bank’s practices on repayment of of term/fixed deposits in the banks.
No doubt, the front-office staff was relying on the internal circulars.
However, to ensure uniformity on the repayment rules, RBI vide its notification No.RBI/2011-12/248
DBOD No. Leg BC 46/09.07.005/2011-12 dt.04/11/2011, sought to the rules guiding repayment of term/fixed deposits in banks.
The clarifications in brief are as under: –
Operating instructions – ‘Either or Survivor’.
If fixed/term deposit accounts are opened with operating instructions ‘Either or Survivor’, the signatures of both the depositors need not be obtained for payment of the amount of the deposits on maturity.
However, the signatures of both the depositors may have to be obtained, in case the deposit is to be paid before maturity.
If the operating instruction is ‘Either or Survivor’ and one of the depositors expires before the maturity, no pre-payment of the fixed/term deposit may be allowed without the concurrence of the legal heirs of the deceased joint holder.
This, however, would not stand in the way of making payment to the survivor on maturity.
Operating Instructions – ‘Former or Survivor’.
In case the mandate is ‘Former or Survivor’, the ‘Former’ alone can operate/withdraw the matured amount of the fixed/term deposit, when both the depositors are alive.
However, the signature of both the depositors may have to be obtained, in case the deposit is to be paid before maturity.
If the former expires before the maturity of the fixed/term deposit, the ‘Survivor’ can withdraw the deposit on maturity.
Premature withdrawal would however require the consent of both the parties, when both of them are alive, and that of the surviving depositor and the legal heirs of the deceased in case of death of one of the depositors.
Special Note for pre-mature withdrawals.
4. If the joint depositors prefer to allow premature withdrawals of fixed/term deposits also in accordance with the mandate of ‘Either or Survivor’ or ‘Former or Survivor’, as the case may be, it would be open to banks to do so, provided they have taken a specific joint mandate from the depositors for the said purpose.
A clear distinction has been made between pre-mature withdrawals and maturity withdrawals. As premature withdrawals are not a normal activity, all depositors’ signatures are insisted upon, to avoid any future complaints.
An attempt to defraud through fake bank guarantee’s-modus operandi
Today, RBI, DNBS department, has released a Notification on an ‘Attempt to defraud using fake bank guarantee-modus operandi’
The RBI Notification no is RBI/2011-12/206,DNBS(PD).CC. No.245 /03.10.42 /2011-12 dt.September 27 , 2011 and is addressed to All Non Banking Financial Companies / Residuary Non Banking Companies
The modus operandi in brief
01) The Bank Guarantees were fake.
02) The signatures of the bank officials appearing on the BG were forged.
03) The format of the BG’s were different from the Banks BG format, which had purported to have been issued.
04) The BG serial numbers, too did not match with that the Bank’s, which had purported to have been issued.
The names of the beneficiaries /representative of beneficiaries and applicants of the BGs are as follows:
M/s SFT Exports
Sumsh Infrastructure Pvt Ltd
M/s Tulip and Co
Alka Hotel Pvt Ltd
Mr Shukum Patel
Shri Shantanu Das
Shri Subhendu Chowdhury
Sri Akash Mitra
M/s Green Apple Infracom Pvt Ltd
J P Enterprise
NBFCs have been advised to take notice of the above facts and to exercise due caution while handling cases involving the above mentioned firms/individuals involved in the instant case.