1. Presently,
two types of institutional mechanism exist for effecting
payments electronically. First is known as “Electronic Clearing
Scheme(Credit Clearing) referred to as ‘ECS’ and the second “Electronic
Fund Transfer” referred to as ‘EFT’. Both these mechanism operate under
the aegis of RBI. The first scheme caters to electronic payment of bulk
and repetitive payments like salary and the second scheme caters to
transfer of funds electronically from one bank branch to another – both
inter-city and intra-city-- for payment of suppliers’ bills in lieu of
outstation cheques/demand drafts and telegraphic transfers. ECS is
currently in operation in 16 centres and is further being extended
to more locations. EFT is currently available in 4 metropolitan
cities and is being extended to other cities. While ECS is being
implemented in three phases, EFT will follow office automation
package.
2. Under
“ECS”, the institution which has to make payment would prepare
payment data on a magnetic media ( ie floppy) and submit the same to
its banker called “Sponsor Bank”. The Sponsor Bank would present the
payment data to the local banker’s Clearing House (managed by RBI in 15
centres and by SBI &Associate banks in other centers) along with
mandate form authorizing the Manager of the Clearing House to debit the
Sponsors Bank’s account and credit Destination Bank’s account. The
Clearing House will advice the beneficiary details to service branch of
the destination banks. Based on this, beneficiary’s account is credited
on the appointed date. Un-credited items are reported back by the
destination bank to the Clearing House which in turn pass on the
information to the Sponsor Bank.
This completes the ECS cycle. ECS has
two limitations—one, the facility is available in select centers and
not all over India. Secondly, submission of files to Clearing Cells
located in individual locations separately. Submission of files for
multiple locations at one Clearing Cell will be possible only after RBI
does networking of all the Clearing Cells, which is likely to take some
time.