Financial Daily from THE HINDU group of publications
Thursday, Aug 19, 2004
Financial Daily from THE HINDU group of publications Thursday, Aug 19, 2004 |
||
|
|
||
|
Money & Banking
-
Information Technology RTGS: Low-value deals may carry higher fees Our Bureau
Mumbai , Aug. 18 RETAIL customers may have to shell out a larger proportion of the transaction value in terms of service charges when it comes to real-time transfer of funds through banks across cities. Banks may levy higher transaction charges on low-value transactions conducted on the Real-Time Gross Settlement System (RTGS). Transactions that have bulkier volumes are likely to cost less, according to banking sources. "Banks have invested a lot in terms of technology and infrastructure for implementing this system. These costs will eventually have to be recovered. But initially, we will promote this system for free, to let people get used to the idea. Eventually we will start charging customers," said an official with a leading public sector bank. "Small-value transactions will work out to be more expensive for the bank. In this system, the higher the volumes, the better the cost. Therefore eventually, smaller value transactions may attract a higher transaction cost for the customer," he said. However, at this time, bankers seem reluctant to quantify a "low-value-transaction." "It is a relative issue depending on the size of the bank. Each bank will decide for itself what it perceives to be high or low value. Broadly speaking, one can say that retail customer transactions can be classified as low-value transactions," said a banker. A costlier charge on low-value transactions assumes significance in light of the Reserve Bank's announcement on Monday that the RTGS has been enabled for straight-through processing (STP) at the bank's end for putting through customer transactions. With STP's the introduction, of the STP banks can directly credit customer accounts upon receiving credit advice without any manual intervention. For example, if you are a customer with a bank connected to the RTGS in Mumbai, and you want to make a payment to someone or remit funds to a relative in Delhi, then your account can be debited and the funds thereof can be credited into the account of another bank in Delhi in a matter of a few hours. As regards security, while many banks are "constantly" fine-tuning their own internal systems, the officials contend that transactions on the RTGS, complete with digital signatures and other encryptions, will be secure.
More Stories on : Information Technology
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2004, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|