The Hindu Business Line : GAIL shifts from cheques to e-payment

The Central Vigilance Commissioner has noticed the GAIL experiment with 100 per cent e-payments along with its obvious advantage of transparency. The CVC has now held this as a model for other PSUs to follow.

Chennai , Oct 12

A COUPLE of weeks ago there was an advertisement showing a corporate executive smiling after playfully flying a paper rocket/plane that was actually a cheque. The tag line said, "Our ED (Finance) has said goodbye to cheques... "

It went on to explain that the company had now moved to 100 per cent electronic payment and that cheques were now history. And cheekily added that the Executive Director, with all the new-found leisure time, was putting the old cheques to use as paper planes.

That catchy ad was from GAIL India, formerly, Gas Authority of India Ltd.

GAIL India Ltd, which makes payments of about Rs 10,000 crore a year, has switched from cheques to the e-payment mode. Whether the payments are for salaries or for supplies from vendors, the company has moved away from issuing cheques.

Reduction in cash handling time and associated paper work and online confirmation of execution of transaction from bankers' portal are claimed to be the benefits of the new system.

Vendors and contractors get their money credited instantly instead of having to wait for cheque clearance.

The smoother flow of funds, along with the online confirmation to the vendor, provides better avenues for fund management.

Vendors can access their accounts irrespective of their location and banking hours.

To ensure transparency and reduce delay in processing of bills, GAIL has introduced an integrated online Web-based Bill Watch System, by which suppliers, vendors, and contractors can track the status of their pending bills through GAIL's Web site.

All they have to do is enter the `receipt number' given at the time of submission of the bills and the system informs them instantly about the detailed status of their bills and at which level they are pending, if so.

The GAIL experiment with 100 per cent e-payments along with its obvious advantage of transparency has come to the notice of the Central Vigilance Commissioner. The CVC is now holding this up as a model for other PSUs to follow.

What were the savings for the company by adopting e-payment? A GAIL official said: "The value chain that derives through e-banking has reduced the administrative and overhead costs for the cash and cheque handling and redeployment and optimum utilisation of manpower to the extent of Rs 1.5-2 crore a year."

Were there any problems in the implementation? The official said, "GAIL is a multi-location company, so some resistance was faced in remote locations such as Lakwa, Agartala, Jhabua, etc. There were problems of connectivity, bank location, and distance, and customer accounts had to be in specified banks, etc. However, GAIL's continuous effort and follow-up along with the role played by bankers - SBI, ICICI Bank, and HDFC Bank - enabled us to make a breakthrough in achieving 100 per cent payments through e-banking."

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Twin-engined reverse monsoon in top gear

`Over 400 officers opt for absorption in BSNL, MTNL' — Telecom officers' association contests claim

IA to raise domestic fares by 10 pc from October 18

UK court restricts launch of Ranbaxy's cholesterol drug — Pfizer says ruling will protect UK turf from generic competition

20 sugar, cement, paper projects likely to trade carbon — Methodologies for fly-ash mixing, power generation from bio-residues cleared

GAIL shifts from cheques to e-payment

Reliance in talks with Woodside of Australia for oil, gas imports

Infosys Q2 net rises 36 pc

TCS net moves up to Rs 694 cr

US IT sector seeks hike in cap for H1B visas