3. • The Central bank of any country is usually the driving
force in the development of national payment system.
• The board for regulation and supervision of payment and
settlement systems (BPSS) a sub committee of central
board of reserve bank of India is the highest policy
making body on payment system in country.
• The payment and settlement system Act,2007 which was
legislated in December 2007 which regulates payment
system in India.
• No person other than the Reserve Bank of India (RBI)
can commence or operate a payment system in India
unless authorized by RBI.
4. • RBI introduced the Electronic clearing service (ECS)
(credit) scheme during the 1990s.
• September 2008, the bank launched a new service known
as National Electronic Clearing service (NECS), at
National Clearing Cell (NCC) , Mumbai.
• Post which, Electronic Clearing service (ECS) Debit was
launched by RBI to provide a faster method of effecting
periodic and repetitive collections of utility companies.
• November 2005, a more secure National electronic fund
transfer (NEFT) system was introduced for facilitating one
to one fund transfer requirement of individuals
/companies.
5. ECS is an electronic mode of funds transfer from one bank
account to another. It can be used by institutions for
making payments such as distribution of dividend interest,
salary, pension, among others. It can also be used to pay
bills and other charges such as telephone, electricity, water
or for making monthly installments payments on loans as
well as SIP investments. ECS can be used for both credit
and debit purposes.
6. 1.PAYEE – One who is going to receive
2.PAYER- One who is going to pay
3.PAYEE’s BANK
4.PAYER’s BANK
5.CLEARING HOUSE- Facilitates the interaction
between two bank.
7. Payer and Payee must have bank
account
These banks have to be the member of
the local clearing house .
9. ECS Credit enables payment of amounts towards
distribution of dividend , interest, pension , salary
payment etc. of the user institution.
Example – Jivan Tyres Ltd. Has to pay monthly salaries
to its employees who have account across different
banks.
The initiator can be the paying bank, requesting a credit
to the receiving bank.
10. • The beneficially need not visit his/her bank for
depositing the paper instrument.
• Secure of physical instrument from loss/theft.
• Cost effective
11. • It is used by an institution for raising debits to a large
number of accounts maintained with bank branches at
various locations.
• It is useful for payment of telephone /electricity/ water
bills/ tax collection/ loan insallment payments etc.
• In case of an ECS debit , the initiator of the process is the
payee’s bank.
12. • Take care of automatic debit to customer account on
due dates.
• Customer need not to track of due dates payment.
• Cost effective
• The debit to customer accounts would be monitored
by the ECS users and the customers alerted
accordingly.
13. • Operates at 81 centers across
the country. It operates by RBI
Local
ECS
• Operates at 9 centers/
location at various part of the
country. It operates by RBI.
Regional
ECS
• Centralized version of ECS
credit which was launched in
October 2008.
National
ECS
