Introduction   Business Scenario Finacle CBS Process Overview Key Terminologies Step by Step Process Demonstration Summary

Lesson Objective Duration Intended Audience To understand the process of Electronics Clearing system in Finacle CBS Duration 1 Hour Customer Service Intended Audience

Business Scenario A 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.

Various types of mandates for ECS processing through Finacle Finacle Process Overview (Contd…) Various types of mandates for ECS processing through Finacle Term deposit- Outflow of Interest, Total outflow, Principal outflow and repayment Standing instructions Loan disbursements Interest warrant and dividend warrant payment by companies Utility Bill payments Outward ECS – Mandate Types Inward credit of Interest / dividend warrants or any other credit received from other Banks / branches Utility bill payments and any other debits from other Banks / branches Loan installments received from other Bank / branches Inflow of Interest from the Term deposits from other Banks / branches Inward ECS – Mandate Types  

ECS-Electronic Clearing System Key Terminologies TERMSS DESCRIPTIONS 1 Payment system   It 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. 2 ECS-Electronic Clearing System This is a process through which settlement takes place between various Banks involved in the process as a part of Finacle Payment System capability. 3 Real Time Processing Real time processing indicates a process through which the settlement takes place at each transaction level by means of message forwarding. 4 Bulk Processing In case of bulk processing all transactions would be consolidated at the day end/after a cut off time and when the settlement is done. 5 Sponsor Bank The Bank which, initiates / originates messages for either Receipt or Payment on behalf of its customers. 6 Destination Bank Destination Bank is a Bank which receives such messages for responding and completion of the process. 7 Outward Processing All transactions which are originated by Sponsor Bank either Receipt or Payment is an Outward Processing. 8 Inward Processing All messages received by Destination Bank and processed can be referred to as Inward Processing.  

Key Terminologies (Contd…) TERMS DESCRIPTIONS 9 User Account   Beneficiary’s account with Sponsor bank 10 Destination Account The ultimate beneficiary at the Destination Bank 11 Clearing House/Agency It is the central agency, which facilitates the ECS processing 12 Settlement Date It is the date on which the accounts are affected both at the sponsor bank and destination bank with the help of Clearing House/Agency. 13 Service SOL This 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 Banks 14 Mandate It is an instruction given to the Bank by the customer for either sending of receiving Debit or Credit messages 15 ECS Reference Code This code is used to identify the type of Payment system. This is the first step towards defining a Payment System in Finacle 16 ECS Transaction Code This code is used to identify the type of transaction. For each type of transaction a code could be created 17 Over the Counter Transaction Transactions 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.  

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 instruments ECS support both Inward and Outward transaction processing A 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.

Step by Step Process Given 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/SCSSAO Enable the facility of ECS for the existing customer through the menu option SB – CASBAM/QDEMSA, MIS/TD – CMISAM/MISAMAV, RD - CRDACM/RDAMM, SCSS - CSCAM/SCSSMAV Invoke 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

Demonstration

Summary Congratulations!! 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/SCSSAO Enabling ECS facility for the existing customers SB – CASBAM/QDEMSA, MIS/TD – CMISAM/MISAMAV, RD - CRDACM/RDAMM, SCSS - CSCAM/SCSSMAV Invoke 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 ECS The 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

Additional details for User Champions program Annexure Additional details for User Champions program Accounting entries examples and menu options used to run the batch jobs and media file generation.

Outward Credit Transactions Given below are the account entries for Loan disbursement/SI/TD outward credit transaction: Debit Credit Remarks HLADDR SIE ACINT & debit TD HOTCE Other suspense account On day 1 Download data - EGOC On settlement day Run EOSR Other suspense Settlement account Run EOSR In case of rejections, run EORP In case of rejections

Outward Debit Transactions Given below are the account entries for utility bills outward debit transaction: Debit Credit Remarks Segregate data – our accounts and other bank accounts EDS Upload data – EITU for our customers Upload data – EOTP other bank customers followed by EGOC Contra Optional On settlement day Run EOSR Settlement account Customer account Run EOSR optional In case of rejections, run EORP Other suspense In case of rejections Lift Lien ELL

In case of rejections, run EIRP Inward Credit Transactions Given are the account entries for any credit received from other bank as an inward credit transaction: Debit Credit Remarks Upload data – EITU Settlement account Customer account On success Other suspense On failure In case of rejections, run EIRP Generate inward reject file EGIR