2 IntroductionBusiness ScenarioFinacle CBS Process OverviewKey TerminologiesStep by Step ProcessDemonstrationSummary
3 Lesson Objective Duration Intended Audience To understand the process of Electronics Clearing system in Finacle CBSDuration1 HourCustomer ServiceIntended Audience
4 Business ScenarioA Customer of your SO approaches you to debit his account for a fixed amount every month and credit the same to a State Bank of India account within the city. How will you register the customers mandate in Finacle CBS?Let us see the generic process in detail for Outward ECS.
5 Various types of mandates for ECS processing through Finacle Finacle Process Overview (Contd…)Various types of mandates for ECS processing through FinacleTerm deposit- Outflow of Interest, Total outflow, Principal outflow and repaymentStanding instructionsLoan disbursementsInterest warrant and dividend warrant payment by companiesUtility Bill paymentsOutward ECS – Mandate TypesInward credit of Interest / dividend warrants or any other credit received from other Banks / branchesUtility bill payments and any other debits from other Banks / branchesLoan installments received from other Bank / branchesInflow of Interest from the Term deposits from other Banks / branchesInward ECS – Mandate Types
6 ECS-Electronic Clearing System Key TerminologiesTERMSSDESCRIPTIONS1Payment systemIt is the mechanism for the transfer of monetary value and related information between banks for bank’s customers and / or financial institutions. Payment systems can be cash, paper based, plastics or electronic. Electronic payment systems comprise of ECS, SWIFT and so on.2ECS-Electronic Clearing SystemThis is a process through which settlement takes place between various Banks involved in the process as a part of Finacle Payment System capability.3Real Time ProcessingReal time processing indicates a process through which the settlement takes place at each transaction level by means of message forwarding.4Bulk ProcessingIn case of bulk processing all transactions would be consolidated at the day end/after a cut off time and when the settlement is done.5Sponsor BankThe Bank which, initiates / originates messages for either Receipt or Payment on behalf of its customers.6Destination BankDestination Bank is a Bank which receives such messages for responding and completion of the process.7Outward ProcessingAll transactions which are originated by Sponsor Bank either Receipt or Payment is an Outward Processing.8Inward ProcessingAll messages received by Destination Bank and processed can be referred to as Inward Processing.
7 Key Terminologies (Contd…) TERMSDESCRIPTIONS9User AccountBeneficiary’s account with Sponsor bank10Destination AccountThe ultimate beneficiary at the Destination Bank11Clearing House/AgencyIt is the central agency, which facilitates the ECS processing12Settlement DateIt is the date on which the accounts are affected both at the sponsor bank and destination bank with the help of Clearing House/Agency.13Service SOLThis is a SOL which represents all branches of a Bank in a particular Center. The branches would be linked to an identified SOL for settlement with other Banks and this will be the Nodal/Focal point of reference to all other Banks14MandateIt is an instruction given to the Bank by the customer for either sending of receiving Debit or Credit messages15ECS Reference CodeThis code is used to identify the type of Payment system. This is the first step towards defining a Payment System in Finacle16ECS Transaction CodeThis code is used to identify the type of transaction. For each type of transaction a code could be created17Over the Counter TransactionTransactions either in cash or for the debit of a customer account where ECS is not enabled at account level and not a routine transfer. The Customer may or may not have account with the sponsor bank for performing such transactions.
8 FEATURES OF ELECTRONICS CLEARING SYSTEM This is the process through which settlement takes place between post office and Banks involved in the process as a part of FInacle Payment system capabilities, supports settlements without physical instrumentsECS support both Inward and Outward transaction processingA customer can give a mandate for credit of Term deposit interest or maturity proceeds. The instruction can be for payment of loan installment obtained at another bank. The instruction can be for receiving loan payment from another Bank, it can be for crediting of loan disbursement for an accounts it supports over the counter transactions.ECS is convenient for both the sponsor bank/PO (refers to the PO/bank which initiates or originates the messages for either receipt or payment on behalf of its customer) and the destination Bank/PO (is a bank which receives messages for responding and completion of the process in settlement of customer transaction. Sponsor Bank refers to the Bank, which acts as an agent to its customer and submits the ECS data to the clearing agency on their behalf. The destination Bank refers to the bank where the beneficiary holds the account.Facilitates collection of charges from customers through ECS.The data is processed at the Service branch level on behalf of all the branches attached to the service branch.
9 Step by Step ProcessGiven below is the step by step process to perform electronic clearing in Finacle:Enable the facility of ECS for the customers at the time of account opening from the menu option, SB- CASBAO/QDESA, RD –CRDOAAC/RDAOCM, TD/MIS – CMISAOP/MISAO , SCSS- CSCAOP/SCSSAOEnable the facility of ECS for the existing customer through the menu option SB – CASBAM/QDEMSA, MIS/TD – CMISAM/MISAMAV, RD - CRDACM/RDAMM, SCSS - CSCAM/SCSSMAVInvoke the menu option HECSM (ECS Mandate Maintenance) to set a mandate for customer accounts for Outward transactions in ECS.Run the required batch jobs through centralized operations for creation of upload data files and download data files for inward clearing electronically
11 SummaryCongratulations!! You have successfully completed the lesson Electronic Clearing System using Finacle. Following are the summary of important points discussed in this lesson:Maintaining Service Branch Member by invoking menu option “HSBM” and for uploading Service Branch member “HSBMU”Finacle supports issue of ECS (Electronic Clearing System). ECS can be enabled at the time of opening for new customers from the menu options:SB- CASBAO/QDESA, RD –CRDOAAC/RDAOCM, TD/MIS – CMISAOP/MISAO , SCSS- CSCAOP/SCSSAOEnabling ECS facility for the existing customersSB – CASBAM/QDEMSA, MIS/TD – CMISAM/MISAMAV, RD - CRDACM/RDAMM, SCSS - CSCAM/SCSSMAVInvoke HECSM menu to set up the customer mandate for ECS (Electronic Clearing System).Two types of Electronic Clearing System are Inward and Outward. Run the required batch jobs for outward and inward files (data center/CPC activity) This the EOD process.HOTCE menu should be invoked for Over the Counter Transaction on ECSThe process at the Service Head Office for uploading and downloading of the files to be sent to Clearing House.The Menu Option for different processes at Service branch are :- HEGOC,HEOTP,HEOSR,HEORP,HEITU,HEIRP,HEGIR
12 Additional details for User Champions program AnnexureAdditional details for User Champions programAccounting entries examples and menu options used to run the batch jobs and media file generation.
13 Outward Credit Transactions Given below are the account entries for Loan disbursement/SI/TD outward credit transaction:DebitCreditRemarksHLADDRSIEACINT & debit TDHOTCEOther suspense accountOn day 1Download data - EGOCOn settlement day Run EOSROther suspenseSettlement accountRun EOSRIn case of rejections, run EORPIn case of rejections
14 Outward Debit Transactions Given below are the account entries for utility bills outward debit transaction:DebitCreditRemarksSegregate data – our accounts and other bank accountsEDSUpload data – EITU for our customersUpload data – EOTP other bank customers followed by EGOCContraOptionalOn settlement day Run EOSRSettlement accountCustomer accountRun EOSRoptionalIn case of rejections, run EORPOther suspenseIn case of rejectionsLift Lien ELL
15 In case of rejections, run EIRP Inward Credit TransactionsGiven are the account entries for any credit received from other bank as an inward credit transaction:DebitCreditRemarksUpload data – EITUSettlement accountCustomer accountOn successOther suspenseOn failureIn case of rejections, run EIRPGenerate inward reject file EGIR