Mumbai, May 3
ALL banking transactions in the four metros - Mumbai, Delhi, Kolkata and Chennai - will be cleared and settled under the proposed National Settlement System (NSS) by December. The NSS will function under a limited company owned and operated by banks, the Reserve Bank of India said on Tuesday. This proposed company will act as an umbrella organisation for all retail clearing operations. The vision document for Payment and Settlement System released by RBI on Tuesday said that apart from starting technology-intensive electronic credit system (ECS) and electronics funds transfer (EFT) facility, the proposed institution will also take steps to convert MICR clearing into cheque-truncation-based clearing.
The new institution will also work on ATM switching, multi-application smart cards, e-commerce and m-commerce. RBI is also looking to widen the reach of the real time gross settlement system and electronic payment products. By March 2006, around 10,000 bank branches at 500 centres are likely to offer EFT products with a combination of RTGS and ECT (electronic clearing terminal).
The Cheque Truncation Project will also be launched in the Delhi region by March 2006 and extended to the other three metros within the next two years. By March 2007, MICR clearing will be introduced to 14 more centres. It is currently available in 40 centres.
The vision document calls for a sound legal base (by way of the Payment System Act). Payment system service providers have been urged to set up customer facilitation centres.
A compensation policy should also be formulated to take care of deficiency in services, the document added.