Account Services – An Overview Certificate of Deposit -Time (CDT) As the name specifies, CDT is the certificate issued to the customer who deposits an.

Account Services – An Overview

Certificate of Deposit -Time (CDT) As the name specifies, CDT is the certificate issued to the customer who deposits an amount with the bank for a particular period, at an agreed rate of interest (ROI). The deposit could be a non-assigned deposit or an assigned / lien marked to bank or a deposit favoring Third Party.

Non- Assigned Deposit Assigned Deposit Third Party Deposit MIBOR Deposit FCY Deposit DIFFERENT TYPE OF DEPOSITS

Non-Assigned Deposit: Also known as Normal Deposit, are placed by the customer from the excess / surplus funds lying in the account. Sole purpose for placing such deposits is to earn interest from the excess / surplus money in the account. Documents required for Booking a Normal / Non-Assigned Deposit: Scan coversheet with OIC initials on it Customer letter (*) mentioning details of deposit to be booked (*) The branch must affix date & time stamp & must verify the signature on the letter. Premature- For Pre-maturing a deposit we would require the Coversheet along with the Customer Letter requesting the same. Premature Penalty - The premature rate of interest would be the lower rate between the original contracted rate and the rate of interest as per the deposit rate grid for the actual tenor and amount of the deposit on the original date of booking the deposit minus 1%. Maturity Instruction- This FDs Can be booked on principal rollover / principal +Interest Rollover / auto credit basis depending upon the customer request. For Principal and principal + interest rollover if we do not receive any instruction then the FD would be automatically rollover for the same tenure Non - Assigned Deposit

Assigned/Lien Deposit: -Such type of deposits are Lien marked to Bank & are booked by the customer in lieu of availing facility like LC’s (Letter of Credit) or Bank Guarantees. Documents required for placing an Assigned deposits: Scan coversheet with OIC initials. Memo signed off by authorized person from LC / GTEE unit. Premature - For Premature we would require a coversheet mentioning about the reason of liquidation along with the approval of CERT. Premature Penalty - The premature rate of interest would be the lower rate between the original contracted rate and the rate of interest as per the deposit rate grid for the actual tenor and amount of the deposit on the original date of booking the deposit minus 1%. Maturity Instruction- These FDs are booked on principal rollover by default and sometimes on principal + Interest Rollover basis (as per request). On Maturity if we do not receive the instruction then the FD would be rolled over for the same Period. If we receive the liquidation request on maturity then we require CERT approval along with the coversheet. In case of Assigned LC(Letter of Credit) one day of back valudation is allowed for assigned Fds. Assigned/Lien Deposit

Third Party Deposits: Third party CDT’s are same as assigned CDT’s with the difference that it is not assigned to bank N.A but is in favor of Third party (*). (*) Third party in this context means only Government entities. Documents required for placing a Third Party Deposit:- Scan coversheet with OIC initials. Third Party Indemnity (*) (*)The branch must affix date & time stamp & must verify the signature on the indemnity. Premature - For Premature we would require the Original Fixed Deposit Reciept or conformation advice along with the liquidation request from the customer. Premature Penalty - The premature rate of interest would be the lower rate between the original contracted rate and the rate of interest as per the deposit rate grid for the actual tenor and amount of the deposit on the original date of booking the deposit minus 1%. Maturity Instruction- These FDs are always booked on Principal or Principal +Interest rollover. In this case if we do not receive any instruction then the FD would be automatically rollover for the same tenure. Third Party Deposit

MIBOR Deposit: MIBOR (Mumbai Inter Branch Offer Rate) deposit are same Non Assigned deposits but the same is booked at a floating rate of interest, here ROI is decided by NSE on a daily basis & interest is calculated on Daily Compounding Basis. It is booked in Basis Points Interest Rate. Documents required for placing a MIBOR Deposit:- Same as Non-Assigned Deposits (given in previous slide) Premature- For Pre-maturing a deposit we would require the Coversheet along with the Customer Letter requesting the same. Premature Penalty -There is no premature penalty charges for this Deposit unlike for the other type of Deposits. Maturity Instruction- These FDs Can be booked on principal rollover / principal +Interest Rollover / auto credit basis depending upon the customer request. For Principal and principal + interest rollover if we do not receive any instruction then the FD would be automatically rollover for the same tenure.. MIBOR Deposit

Power Deposit: These are also called as Auto Deposits, here customer provides as a onetime Standing Instruction for linking his account to deposit facility & system at EOD books / liquidates deposits into the customer account directly. Here the instruction provided by the customer is for moving surplus available funds from the account into power deposits in pre-specified multiples. Once the Standing instruction is in place, system at EOD books / liquidates deposits as per the requirement. This is not a Manual FD. For Eg: Customer instruction could be for placing power deposits from the account balance over & above 1lacs in the multiples of Rs 1lacs & at EOD the balance in the acc is 2.5lacs, system will book deposit for Rs 1lacs & leave the balance 1.5lacs in the account. Subsequently if the EOD balance of the account goes less than 1lacs system will break existing deposit (if available) to bring the balance in the account to 1lac. Documents required for linking an account to Power deposit facility: Coversheet signed by authorized maker and checker and Standing Instruction in Bank prescribed format in original along date & time Stamp & Signature verification. Premature-This would be automatically done by the system when the balance in the account goes below the prescribed limit. Premature Penalty- The premature rate of interest would be the lower rate between the original contracted rate and the rate of interest as per the deposit rate grid for the actual tenor and amount of the deposit on the original date of booking the deposit minus 1%. Maturity Instruction-This activity is done by the system automatically there is no manual intervention required. Power Deposit

TYPE OF SWEEP RANGE BALANCE SWEEP- It refers to pre specified amount range checking to be done on a 'daily basis', 'Cumulative basis' from Minor to Major account which will enable the company to manage their asset liability limits in terms of borrowing or lending between group (INTER) entities. By this structure customer can come to know the total amt swept till date, Thru automated report customer can access the details Electronic subject to relevant maintenance on Electronic platform Sweep will not take place once total accumulated sweep balance (Net cash position) reached to maximum limit defined/maintained, however it will resume once accumulated balance is reduced. FIXED AMOUNT - To sweep fixed amt on given day from Source/Minor a/c to beneficiary /major ac. ZERO BAL SWEEP - To sweep either debit balance or credit balance of Source/Minor a/c at EOD. DEBIT SWEEP - To sweep Credit balance of Source/Minor a/c to Major/ beneficiary ac. CREDIT SWEEP - To Sweep Dr balance of Source/Minor a/c., which will be funded by Major/beneficiary ac. MAXIMUM LIMIT SWEEP - To sweep either debit balance or credit balance of Source/Minor a/c at EOD however sweep amount should not exceed to maximum sweep amt defined on daily basis. MINIMUM SWEEP - To Keep the Minimum balance in Source/Minor a/c, and sweep rest of amt to Major/beneficiary ac. SWEEEP

Electronic Clearing System It is a mode of Electronic funds transfer from one bank account to another bank account using the services of a Clearing House. Electronic Clearing System

Documents required: Standard ECS mandate form Coversheet signed off by OIC Checkpoints: Date & Time stamp Signature Verified by OIC A/c no must be mentioned on mandate All the details must be filled up in Annexure ( Bene name, Date of mandate, expiry date etc ) Signatory Name & signing limit of the signatory to be checked in Signature maintenance system RBI code of the beneficiary Electronic Clearing System

Know Your Customer (KYC)

KYC refers to due diligence activities that financial institutions and other regulated companies must perform to ascertain relevant information from their clients for the purpose of doing business with Banks. KYC assists the bank to understand the Type of Business, Reputation of the client in the market, Financial Performance, Beneficial to the Bank etc. Prior to account opening there is a KYC check which needs to be conducted for all the corporate accounts. What is Know Your Customer Objective of KYC Guidelines The objective of KYC guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Related procedures also enable banks to know or understand their customers, and their financial dealings better. This helps them manage their risks prudently. Banks usually frame their KYC policies incorporating the following four key elements:  Customer Acceptance Policy;  Customer Identification Procedures;  Monitoring of Transactions; and  Risk management. This would be helpful for On-Boarding as well as Existing Clients. Know Your Customer (KYC)

Purpose of KYC policy, Who is Customer :  A person or entity that maintains an account and/or has a business relationship with the bank;  One on whose behalf the account is maintained and stake holding above 25% in the company (i.e. the beneficial owner);  Customer is classified with different constitution Private Ltd, Public Ltd, Sole Proprietorship Firm, Partnership Firm, Hindu Undivided Family (HUF), Trust, Society etc Purpose of KYC Policy

Process Flow of Scrutinizing KYC Documents and other requisite details get updated/uploaded in an Electronic system which is later processed by Ops Team. A unique number gets generated for tracking the renewal dates periodically and accordingly city wise a KYC Owner / Relationship Manager is assigned for respective clients. Respective Units involved in doing due diligence with regards to KYC checks : Process Flow of Scrutinizing KYC KYC Owner / Relationship Manager Account Intelligence Unit Maker Account Intelligence Unit Checker Relationship Supervisor

Process Flow is as Below :  KYC Owner / Relationship Manager uploads Documents and other particulars in the Electronic system  Submits the KYC documents through Electronic system to AIU maker for First Level Scrutiny and Name Screening  Discrepancies (if any) are raised to KYC Owner / Relationship Manager for resolution through Electronic system  After resolution KYC Owner / Relationship Manager sends the resolution through Electronic system to AIU checker and accordingly exception or approval takes place  On AIU checkers approval the same has to be approved by KYC Owner / Relationship Manager ‘s Supervisor  Post which accounts gets opened. KYC Controls KYC controls typically include below details:  Collection and analysis of basic identity information (CIP)  Name matching against lists of known parties  Determination of the customer's risk in terms of propensity to commit money laundering or identity theft  Creation of an expectation of a customer's transactional behavior  Monitoring of a customer's transactions against their expected behavior and recorded profile. Process Flow of Scrutinizing KYC

Apart the document scrutinizing, TCS Das ops team need to perform the Name screening activity before opening the account. Name Screening should be done before a transaction is processed. What does Name Screening mean?  Name Screening is a technique for searching the name and other attributes of current and prospective customers. This is generally accomplished through checks against variety of risk lists including regulatory lists, internal Client lists and other external databases.  It is a Check Done For Company name, authorized signatories, Promoters & Directors, shareholders (>25%), Senior Management. Why Name Screening is important?  To ensure that the business is not processing prohibited transactions.  It is the requirement for Client businesses to screen client relationships and client’s financial transactions.  It is a key activity for managing risk requirements and practices around Know Your Customer (“KYC”). Name Screening Client Relationships

Electronic Banking Maintenance What is Electronic Banking?  Electronic Banking is Internet banking system that enables you to perform multiple banking functions via one access point. The advanced technology of Electronic Banking enables us to deliver the services and support you need with the reliability and advanced security you require.  Electronic Banking is a sophisticated, user-centered interface offering global access, uniform client software, enhanced, customized reporting capabilities and Electronic technical and customer services support.  Electronic Banking has been designed to add to the effectiveness of your business, providing automatic upgrades to the system and extending access and control to your users worldwide.  Electronic Banking is a powerful way to bank on the Web that puts your business banking functions all in one place. Now you can be more efficient, more flexible and more in control. Electronic Banking gives us the opportunity to take our Electronic banking services to a new level, using Internet technology and enhanced security.

Electronic Banking Maintenance What are the service Modules offered by Electronic Banking ?  Payments  Reporting  Receivables  Trade Services. What are the Characteristics of the Electronic Banking ? * Enhanced Security, Increased Flexibility. * Efficient and Easy to Use * Secure, Flexible Design * Detailed Information at Every Step * Easy Payment Repair * Up-to-date, Electronic Support at Your Fingertips * File Import.

Electronic Banking Products What are the basic products offered by Electronic Banking ?  Activation of Payments and Trade Services.  Cross Border activations  Electronic Pre-format Maintenance.  Commercial Banking Product.  Client Linkage.  Many other products.

Activation of Payments and Trade Services. Requirements  Electronic Banking form. Activation of Payments and Trade Services. -Type of Information Obtained and Entered on Electronic Banking Form.  Basic Client Information like Client Name and Address  Security Management Information either Client or bank  Products and Services to be used like Payments / Trade.  Links to accounts and then to Electronic Services  User access information and controls

Cross-Border activations What is Cross-Border Activation ? For Foreign Instance with Indian Account  Foreign Instance, where India Account (Ac of Account owner entity) is to be linked. In this scenario, letter would be signed by Account owner (India) and hence Company’s Ops team have to verify Signature for signatory signed on behalf of Account owner. For Indian Instance, with Foreign account  India Instance, where foreign Account (Ac of Account owner entity) is to be linked. In this scenario, letter would be signed by Account owner (Foreign entity) and hence we have to request Regional team to verify the signature and confirm.

Pre-Formats Maintenance. What is Pre-format ?  Pre-formats are templates that can be retrieved to assist in the creation of payment transactions. In addition to eliminating repetitive data input and reducing typing errors, pre-formats also provide an added security feature, as user entitlement for various processes can be restricted to payments that were created using pre- formats.  Pre-formats are required when users want to enter payment data directly on the Input/Modify Tab. This is known as the Quick Entry method because payment information can be entered into specific data fields very quickly.  There are two ways to create pre-formats: A payment is created by clicking Submit with Pre-format, or by using the Libraries Service Class in the Maintenance category on the Electronic Banking navigation bar. Creation or maintenance of pre-formats through Libraries allows the user to enter the beneficiary information required to support a specific payment method. There are three types of pre-formats: -  Beneficiary Pre-formats  Full Pre-formats  Template Pre-formats

Client Linkage. n New functionality that facilitates the movement of EXTERNAL users across related Electronic Banking client entities without the need for multiple sign-ons or multiple sets of security credentials n Can be used to facilitate various inter-customer relationships (for example, parent/subsidiary relationships) n Expands the security administration functionality to support our customers’ need for centralized or decentralized security management n Can be one- or multi-directional depending on client inter-relationship and client need

Client Linkage.  In what ways the Client Linkage can be done in Electronic Platform ? Client A Client B Client A Client B One-Directional Link Multi-Directional Link Client A users can be linked to Client B Client B users ARE NOT linked to Client A Only Client A is configured Client A users can be linked to Client B Client B users can be linked to Client A Both clients must be configured

Multiple other Products Which are the other multiple products offered by Electronic Banking ?  Corporate Tax payments  Stop and Reissue  Mobile Notification and Mobile Banking.  IMPS – Bill Payment.  Payroll set up for Salary payments.  And many more.

Call Back Process– An Overview

MIFT CALLBACK ECS DEBIT DAY 0 CALLBACK WAU CFO CALLBACK CLEARING- TECHNICALS Signature maintenance CALLBACK FIRC CALLBACK DEFERRAL TRACKING Callback Process PRE Ben/Standing Instruction CALLBACK

Objectives To receive and initiate callbacks to the customer for MIFT Instructions given by the customer. Callback Contact designates from recorded Telephone Lines Initiate verification call to customer where in X% of the total number of transactions, needs to be confirmed. Exception to be raised if any details not clear/matching Failed Call Back Raise exception for “MIFT Failed Callback” or “MIFT designates not maintained” TAT 1 HOUR MIFT CALLBACK

Objectives To initiate callbacks to the customers to confirm technical discrepancies for Cheque/Cash clearance. Callback Contact designates from recorded Telephone Lines Initiate informatory call to customer informing all cheque details. Confirm cheque needs to be honored/dishonored for inwards & correct details for Outwards. Registered e-mail id to be confirmed for follow up. Exception to be raised if any details not clear/matching TAT for Teller & High value cheque will be 30 min. Failed Call Back Check deferral bucket (Deferral outstanding from weekly MIS. Close the case with internal approval as per below grid. ELC Company- RM and RSH Non – ELC Company – RM and CVP. Deferral Outstanding Company – additional approval. TAT 1 HOUR CLGTECH CALLBACK (Clearing Tech Callback)

Objectives To initiate callbacks to the customer for Addition of new signatory/modification in the current limits & Callback for Commercial Card /POA/Treasury Board Resolution of the signatory Instructions given by the customer.. Callback Contact designates / Signatory from recorded Telephone Lines Initiate verification call to customer where in X% of the total number of Accounts/Signatories,transactions needs to be confirmed. Exception to be raised if any details not clear/matching/coversheet not scanned. Failed Call Back RM/PSM approval to be taken on mail. Transaction pending from 3 days, needs to highlighted to Unit head and Business BUCOs for their intervention. (raise exception) TAT 3 DAYS Signature maintenance CALLBACK

Objectives Callback to confirm the ECS debits/credits instructions for the customers. Callback Contact RM for callback approval. Contact designates from recorded Telephone Lines. Initiate call back to customer informing ECS debit details. Post confirmation of debit follow-up to be done for ECS mandate. Exception to be raised if any details not clear/matching. Failed Call Back Check deferral bucket (Deferral outstanding from weekly MIS. Close the case with internal approval list as per the TAT 1 Day ECS DEBIT CALLBACK

Objectives To update the contact details on the basis of the instructions given by the customer/RM. Callback Contact designates/Signatory from recorded Telephone Lines. Initiate informatory callback for designates updation. Exception to be raised if any details not clear/matching. Letter is valid only with coversheet, received date/time stamp & SV. Signatory contact to be referred from RM only. Failed Call Back RM approval on mail is required to process the updation. TAT 3 DAY CFO CALLBACK

Objectives To receive and initiate callbacks to the customer for inward remittances where purpose of remittance in not provided for ICG customers (except custody customers). Callback Contact designates from recorded Telephone Lines. Initiate informatory callback providing transaction details (Cr A/C no, Bene name, Amount & Currency). FTU Team sources the callback file over a mail, all further details will be resolved by FTU (Fund Transfer Unit). Failed Transaction Report sent to BKC FTU, respective RM (s), SBOO (s) & Product at EOD Failed Call Back Purpose needs to confirmed by RM/SBOO. A deferral needs to be logged, post which customer contact to be established for purpose confirmation. The purpose confirmed by customer should be in sync with purpose confirmed by RM to close the deferral. Transaction remained failed for 7 days, then highlighted to the SCOO, GTS Business Head / CBG Head / ELC Head / FI Head and Compliance Head. TAT 1 DAY FIRC(Foreign Inward Remittance Certificate) CALLBACK

Objectives For discrepant transactions & incremental account opening, Callback to be carried out for deferrals taken to prevent fraud. Callback Contact designates from recorded Telephone Lines. Initiate verification callback providing deferral reason. content to be verified as per MIFT process. All details filled in transaction by branch. Exception to be raised if any details not clear/matching. Failed Call Back Internal approval required as per the Approval grid for failed callbacks. For Incremental account opening: In case of a failed callback, the team will raise an exception requesting the initiator for seeking a deferral for failed callback. (Similar to the MIFT failed callback process) TAT 1 HOUR DAY0 CALLBACK

Objectives Maintenance of the customer accounts on WAU Status and suppress statements after due diligences have been carried out for all the statements returned with the reason Company Shifted, Short Address, Office Closed, Incomplete address. Callback Contact designates from recorded Telephone Lines. Initiate informatory callback providing details ( A/C no, Address). For address change, documentation required is BR copy, request letter, address proof with form 18. for no address change, send mail to branch to close the case. Exception to be raised for NO service & refuse to accept reason. Failed Call Back In case no revert received post two follow ups from RM/CUSTOMER, approval taken from Unit head and Customer put on WAU. TAT 25th of every Month. WAU – WHERE ABOUNT UNKNOWNS

Objectives To regularize the transaction by following up for all outstanding deferrals on Deferral tracking system for 1/7/10/14/15/21/30 days. Callback Email sent to the customer maintained on CSDS system except for internal documentation reason code. If email not maintained, hard copy to be sent on registered correspondence address. Subsequently callback to be initiated on day 7 & 15. Failed Call Back Not available as this are mailer follow up. DEFERRAL TRACKING

Objectives To receive and initiate callbacks to the customer for Pre-defined Beneficiary & MIFT designate Maintenance (optional) letter given by the customer. Callback Contact designates/Signatory from recorded Telephone Lines. Initiate verification call back for Predefined Beneficiary Request of RGTS, NEFT, DD, A2A. With Dr a/c no details. Callback Recipient Details needs to be informed. Exception to be raised if any details not clear/matching/coversheet not scanned. Failed Call Back RM approval to be taken on mail. PRE Ben CALL TAT 1 DAY

Objectives To receive and initiate callbacks to the customer for SI Instructions given by the customer. Callback Contact designates from recorded Telephone Lines. Initiate verification call back to confirm Beneficiary Name, Location, Amount & Dr & Cr A/C Number details. Exception to be raised if any details not clear/matching/coversheet not scanned/additional data not filled. Failed Call Back Raises exception with comment customer contacts not maintained. Branch to obtain the designate letter & maintain the same on signature maintenance system post which callback would be initiated by callback team. Raises exception with comment customer not responding please confirm with suitable time to contact customer. SI(Standing Instruction) CALLBACK TAT 1 DAY

 India Cash – Electronic Payments –RTGS –NEFT & Account To Account Trf –Direct & Indirect Tax –NECS –Cash Delivery  India Cash – Paper Payments –Demand Drafts –Warrants Payments Products

EB Channels Fax Payments Process Flow KEY Highlights & Offering's :  ADOBE digitally certified instruction format to ensure automated data capture & validation  Facilitated launch of new products like Mobile Banking, Tax Payments, Wire Collections, Aggregator & E-collct.  Automated Cheque Pouching.  Bulk Warrant Printing & Scanning ability  Customised reports to customers during the day  Down-streaming for cost benefit.  Paradise Unit for Identified Segments  One Point Contact concept for Customers for Day-to-day queries and implementation Hard Copy Funding / Liquidation Client Physical Instruments Drafts, Customer Checks & Advices Corr Banks TCS eServe Electronic Payments NEFT / RTGS / Tax Book Transfers / Salary Electronic Collections Bene Dispatch Customer Dispatch Hold for Customer Hold for Bene Bene Email / SMS Return Tracking Draft Issuance Customer Reports Repair/ Reject/ Processing Control Compliance and Operations Mobile Banking

RTGS stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers In India. –'Real Time' means the processing of instructions at the time they are received rather than at some later time. –'Gross Settlement' means the settlement of funds transfer basis individual instructions. The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is INR 2 lakh. There is no upper ceiling for RTGS transactions. Beneficiary Bank to act (apply/return) within 2 hours of transaction. RTGS (Real Time Gross Settlement)fund settlement is done from the Banks RBI account. Active across approximate 78,000 (As on September 29, 2011) bank branches across over 20,000 locations. Settlement happens in 3 Transaction Windows: –Customer Mode (R41): 9.00 AM to 4.30 PM on Weekdays 9.00 AM to 1.30 PM on Saturdays –Interbank Mode (R42): 9.00 AM to 5.00 PM on Weekdays 9.00 AM to 2.00 PM on Saturdays –Special Window (R42): 7.00 PM to 7.30 PM on Weekdays 3.00 PM to 3.30 PM on Saturdays RTGS - Definition Electronic Payments

RTGS - Macro Flow DAY 0 Sender DAY 0 Remitting Bank Transmission to RBI RBI Recipient Bank Transmission to Beneficiary Bank Returns if Any within Specified Timelines Beneficiary Credit Passed to Beneficiary

 Speed: The Beneficiary branches are expected to receive the funds in real time, soon after the funds are transferred by the remitting bank  Quicker Settlement cycles: Cuts across inter-bank and clearing house settlement issues  Wider Boundaries: No geographical limitations within India, if the bank is participating in RBI’s RTGS Processing  Funds transferred basis IFSC (Indian Financial System Code) to the Bene Bank  Unique Reference number – UTR Number is generated for each txn. This is a 16 digit number. The minimum transaction value of Rs. 2,00,000 BENEFITS LIMITATIONS RTGS - Benefits & Limitations

 NEFT is an Electronic payment system that uses a secure mode of transferring funds from one bank branch to another bank branch.  NEFT was launched in October 2005.  NEFT is a nation-wide system that facilitates individuals, firms and corporate to Electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country.  Presently, little over 75,000 branches / offices of 100 banks in the country (out of around 80,000 bank branches) are NEFT-enabled.  Amount Limit - There is no limit for transferring the fund thru NEFT  RBI Cutoff: Presently, NEFT operates in hourly batches - there are twelve settlements from 8 am to 7 pm on week days and six settlements from 8 am to 1 pm on Saturdays.  1 NEFT (National Electronic Funds Transfer) transaction which has not been settled on the same day and got returned from RBI’s gateway. In that case,customer account will get debited for the said amount and Credit at EOD  List of bank branches participating in the NEFT system : http://www.rbi.org.in/scripts/neft.aspx NEFT – National Electronic Funds Transfer

 Originating and destination bank branches should be part of the NEFT network  Beneficiary details such as beneficiary name, account number and account type, Name and IFSC of the beneficiary bank branch. Beneficiary name check as per RBI is mandatory for all banks before crediting a payment.  Bene bank to return a NEFT transaction within 2hrs of it being sent by RBI.  1 NEFT transaction initiated on Day 0 could not be processed on the same day in RBI Systems. This transaction will get Auto processed by RBI on Day 1. The transaction will be processed with Same UTR (Unique Reference number ) Brief of IFSC CODE  IFSC CODE: IFSC or Indian Financial System Code is an alpha-numeric code.  It helps uniquely identifies a bank-branch participating in the NEFT system.  This is a 11 digit code with the first 4 alpha characters representing the bank, and the last 6 numeric characters representing the branch.  The 5th character is 0 (zero).  IFSC is used by the NEFT system to route the messages to the destination banks / branches.  IFSC (Indian Financial System Code )Code for RTGS and NEFT can be different for same bank and branch. NEFT – Cut off RBI cutoff: 7PM (Weekdays) RBI curoff: 1PM (Saturdays) Prerequisites for Originating NEFTTransactions Prerequisites for Originating NEFT Transactions

DAY 0 Sender DAY 0 Remitting Bank Clearing Switch RBI Recipient Bank Transmission to Beneficiary Bank Returns if Any within Specified Timelines Beneficiary Credit Passed to Beneficiary NEFT FLOW

NEFT - Benefits & Limitations Benefits:  Remitter need not to be physically presented in bank branches.  Settlement in batches which is near real time processing  No Amount limitation while making the payment thru NEFT  The beneficiary need not to be apprehensive of loss /theft of physical copy  Wide range of NEFT enable branches help to overcome geographical barrier.  Funds transferred basis IFSC (Indian Financial System Code) to the Bene Bank  Unique Reference number – UTR Number is generated for each txn Limitation  Dependency on internet; without which the transfer will not get processed  Only participating banks can make/settle a payment

 Definition Direct Tax is defined as the tax which is directly levied on the citizens of a country. All individuals and business concerns have to pay direct taxes to the government on a regular basis. These direct taxes are calculated on every source of income that accrues to the business of individual.Tax payment is done on Day 1 by debiting the customer account on Day 0  Types of Direct Tax Challans TDS / TCS 1. Challan 281 - Tax Deducted at Source / Tax Collected at Source (TDS/TCS) from corporate or non-corporate Non-TDS/TCS 2. Challan 280 - Payment of Income tax & Corporation Tax 3. Challan 282 - Payment of Security Transaction Tax, Hotel Receipts Tax, Estate Duty, Interest Tax, Wealth Tax, Expenditure Tax /Other direct taxes & Gift tax 4. Challan 283 - Payment of Banking Cash Transaction Tax and Fringe Benefits Tax Direct Tax : An Introduction

DAY 1 DAY 0 Before Cut-off Sender Remitting Bank Partner Bank Govt. of India Tax Payment Confitmation E-Challan E-Challan via email DAY 1 Direct Tax : Macro Flow

 Definition Indirect Tax or the tax that is levied on goods or services rather than on persons or organizations. They are levied upon commodities before they reach the consumer who ultimately pays the taxes as part of the market price of the commodity.  Categories of Indirect Tax Sales Tax Service Tax Value Added Tax (VAT) Customs Duty* Excise Duty * Paid to port authorities for imported goods Indirect Tax : An Introduction

DAY 1 DAY 0 Before Cut-off Sender Remitting Bank Partner Bank Govt. of India Tax Payment Confitmation E-Challan DAY 1 Indirect Tax : Macro Flow

The service aims to centralise the Electronic Clearing Service (ECS) operation and bring in uniformity and efficiency to the system. ECS was introduced in the early nineties and was operational at 74 locations before NECS was introduced, facilitating easy payments and collections for repetitive and bulk transactions. On an average around 20 million ECS transactions are processed each month. ECS system functions in a decentralized manner requiring users to prepare separate set of ECS data centre-wise. Users are required to have tie-up with local sponsor banks for presenting ECS file to each ECS Centre. NECS (Credit) would facilitate multiple credits to beneficiary accounts destination branch at participating centre against a single debit of the account of a user with the sponsor bank. NECS (Debit) would facilitate multiple debits to destination account holders against single credit to user account. The system has a pan-India characteristic leveraging on Core Banking Solutions (CBS) of member banks. This would facilitate all CBS bank branches to participate in the system, irrespective of their locations. The files can be uploaded up to the cut-off time one day prior to the settlement day by sponsor banks thus bringing down further the lead time required for processing. The returns also would get processed on the settlement day itself thus on the third day the users would have the status of the transactions. As on date approx 50,000 branches of more than 50 banks are participating in NECS operations and other banks are expected to join in course of time. In first phase, it is proposed to introduce the NECS (Credit). The NECS (Debit) would be introduced subsequently, based on the experience and feedback received from member banks. Each participating bank has a SORTCODE basis which a payment is made to the Beneficiary bank. NECS – National Electronic Clearing System : A Brief History

NECS Flow Company Sponsor Bank RBI National Clearing Cell Payment Data Destination Branch Service Branch Credit to Investor Account

CASH DELIVERY – An Introduction: As name suggests, process of delivering cash to Bank Customers is known as “Cash Delivery”. Cash Delivery Request Pre Processing Passing Accounting Entries Collating of Requests Cash Delivery Exceptions Fax Reconciliation Cash Delivery is done with the help of external vendor, thus extensive coverage Cash delivery Denomination can be pre-decided with the customer. Email alerts are sent to Authorised Cash Recipient on delivery to the customer

 Interest Warrant Dividend warrant Dept provides service to corporate customers to disburse Dividend and Interest to shareholders.  Disbursements are done in the form of – Warrants – Demand Drafts – NECS  Post payments, Reconciliation is also provided to customers are pre-decided frequency  All Dividend Deals have a Life-Cycle of 7yrs. Post 7yrs from the date of change of Dividend account to Unpaid Div Ac, Entire Unpaid Amount in the account has to be transferred to “Investor Education Protection Fund” by the Company (as per Sec 205A of the Companies Law)  Dividend Account has to be funded within 5days of the AGM.  Dividend account has to be changed to “Unpaid Dividend Ac” post 37 days of the AGM  Dividend account is a pre-funded account for the total corpus of the payout. Thus the account can never go into Negative Dividend (Interest Warrant Dividend Warrant) – An Introduction Paper Payments

Warrant Processing – Flow

Types of Paper Based Instruments Customer Cheques (CCPP) : Draft Payable at Par at all bank Branches. Valid for 3 months. Managers Cheques (MC) : Draft Payable at Par at all bank Branches Demand Draft (DD) : Draft payable at correspondent branch location. DD is a pre-funded instrument & is printed with Bank signatures Correspondent Bank Customer Check (CBCC) : Cheques payable at Corr Bank. For ex: UTIPAP Draft Purchase (DP) : Purchases from Allied Banks Warrants : Metro / NonMetro. Warrant is a post funded instrument & is printed with company signatures Transactions are received in the Print Queue with requisite details and printed Instruments can be printed, pouched and dispatched to customers or beneficiaries, depending on the customer arrangement Drafts are pre-printed instruments, thus account gets debited once the instrument is issued Return Tracking and AWB report sharing with customers Processing

Collections … Product definition & Important Entities Product Definition  Local Product => Pickup location = Drawee location = Bank branch  Local Product => Pickup location = Drawee location = Correspondent Bank branch  Outstation => Pickup location <> Drawee location = Correspondent Bank Arrangement  Outstation => Pickup location <> Drawee location <> Correspondent Bank Arrangement remote Important Entities  Drawee bank  Presenting bank  Our Customer  Bank arrangement  Correspondent bank  Coordinator  Courier Pickup Location - The pickup location is the city/town from where the deposits & cheques have been picked for the customer. Pickup Point - The pickup point is the place/dealer within the pickup location of the customer from where the deposits/cheques have been picked up. Drawee Location - The drawee location is the city/town where the cheque is drawn i.e. the location where the cheque is to be sent for clearing. Correspondent Bank -Bank do have partner banks to clear cheques for location were they do not have presence. The correspondent bank acts as clearing agent for the banks and provide funding on realization of the cheques. Coordinator - Bank vendor whose job is to coordinate between the local customers, bank & TCS EServe and the correspondent bank.

 All the products are offered either on Guaranteed Credit Basis or Clear Fund basis.In case of Guaranteed arrangement, funds are credited to customer account as per credit arrangement maintained and for clear fund the account is credited on realization.  Local and Outstation are the two products offered by the banks for cash management clients for cheque pickups.  Credit can be effected to an account with the bank or with any bank in Co consortium of banks through RTGS/NEFT/ Pay-orders deposited on clients behalf.  Dedicated courier arrangement for movement of all cheques.  Cheques processed under Speed clearing for outstation product.  Return cheques information at cheque level.  Customized MIS.  Complete transaction history available on the intranet accessible for viewing. Product Features

Collection Operating Model CLIENT CPC BANK Local Clearing Drawee Bank P/Up Location Coordinator Drawee Bank Correspondent Bank Local Clearing P/Up Location Hub Drawee Location Bank Arrangement Local Clearing Drawee Bank Cheques Cheques & Schedules Drawee Bank (cheques sent by courier / mail) Cheques Funds sent through demand draft Hub Cheques P/Up Location Outstation Local Product

COLLECTIONS PROCESS FLOW Cust Pick-up Points Funds Flow Funds Flow CPC Local Instruments Co-ordinators across 486 locations Bank BRANCHES Information flow Faxes (Local) MIS TO CUSTOMERS Hub North East West South Hub Outstation Instruments DPC Control / Authorisation Corr Bank Kiosk Banking Drawee Banks / Correspondent Banks Collection Operating Model

Maintenances & Start ups Maintenances are carried out on basis of forms received. Necessary documents, Customer communication and approvals are also shared along with the forms as per the requirement. Following are the various maintenances handled.  Addition of New customer / client code.  Modification in existing set up ( Pricing / Arrangements / pickups etc)  Closures Once the customer is maintained on the product processor, information is shared with respective coordinators for pickups. Start up MIS is shared with Sales team providing feedback of the first visit.

Credit Card Payments Telephone bills Mobile bills Insurance premiums EASYPAY Drop Boxes Kiosks Pickups

EASYPAY One stop shop for the customer i.e. Pickup Processing Batching Deposit slip generation Banking Customized MIS Reconciliation of customer a/c. MIS are sent to customer prior to banking of cheques.

EasyPay Operating Model Key Features:  Same day MIS provided to the client before banking of cheques  Customized MIS, directly unloadable in client’s systems  Works on largely an outsourced model; large degree of vendor management.  City Owner concept to locally manage clients / vendors  Paper based Cash Management services provided to Utility companies.

EasyPay Process Control Hub  Tracking  Co-ordination  Recon KDDD Cleared by Clearance Vendor Processed by Processing Vendor Cheque presentation Cust Data Uploads Runsheets/ TJ Pickup MIS Processing MIS, Data Uploads Customer Contact Management - Daily feedback, Queries, Resolutions 1 2 3 4 5 Bank Delhi, Kolkata, Chennai, Bangalore, Ahmedabad, Hyderabad, Pune, Mumbai, and other cities Easy Pay Module

Clearance Vendor (CV) Collects Cheque / Cash from Kiosks, drop boxes, & pickup points Updates count on run sheet, takes acknowledgment from pickup location Segregates cheques according to utility & hands over to Cheque processing vendor Emails collection report to e-Serve Easy Pay Process Cheque Processing Vendor (CPV) CPV physically counts the cheques recd from CV. Acknowledges the handover tracker. Sorts cheques for any discrepancies encountered. Data enters in the vendor module Encodes and banks cheques in respective customer codes.

TRACKING & RECONCILIATION PROCESS Reconciliation of count of cheques handed over by CV & processed by CPV. Verification of customer handover tracker for timely delivery of deposit slips, return cheques, & daily deposit summary. Reconciliation includes checking debits & credits in client’s a/c thru cross checking of deposit slips and CPC / Flex statements.

EASY PAY PROCESS CONTROLS Vendor performance is measured through Monthly Appraisal & regular audits. Constant Interaction & Client Feedback Regular Telecalling at drop box locations Drop Box Audit (Seeding) Monthly Vendor Audits

ARMS- Account Receivables Management System  PDC Warehousing & Banking  Cheque writing  E2E processing of PDC cheques

 Customer will provide PSBC (Pre-Signed Blank Cheques) which will be stored in the vault.  Customer will also provide soft copy of cheque details with unassigned status for cheques handed over which will be uploaded on ARMS.  Upload of invoice file on ARMS provided by customer.  Generating report to link the invoice due with first unassigned cheque of the particular customer.  Same report will be uploaded back on ARMS with assigned status.  Generate chqeue pull out report for particular date and sending the same to vendor for cheque writing (Writing amount in figures & words and date ) and banking. CHEQUE WRITING

PDC Process  Vaulting and banking of Post Dated cheques received from corporate customers.  The process can be elaborated as follows –PDC WAREHOUSING –PDC PRESENTATION –PDC FORECLOSURE  PDCs are stored in the vault based on predefined storage logic

CONTROLS  100 % Stock Audit conducted semi-annually by external auditor.  Surprise stock audit conducted at regular intervals.  Daily calling is done across locations by Outsourced agency to confirm the receipt & banking of cheques.  Daily deposit level recon done.  Daily Presentation Tracker maintained.  Vendor defects are highlighted on monthly basis.  PDC lot tracker maintained.

Bulk Process Flow Client Centralized vendor Location Coordinator Corr bank Drawee Bank Returns Bulk Team PHYSICAL RETURN CHQS MIS Presentation Soft Copy CHEQUES FOR PRESENTATION THRU MICR CENTRE RETURN MIS & CHEQUES PRESENTATION SOFT COPY & CHEQUES PRESENTATION SOFT COPY

Control Point  Tele calling by C.V to location for presentation/returns activities to avoid delays / discrepancies.  Select calling by bulk team to location / corr bank to resolve the pre & post presentation issues (as may be highlighted by CV).  Cross check the tracker provided by C.V basis the trend for previous months.  Eg.: Avg returns to be expected for a location for a presentation cycle can be know basis the avg of previous months data.In case of any substantial difference in the actual returns vis-à-vis the avg returns expected, we can proactively investigate the issue and get it timely resolved thereby avoiding the possible delay & thus helping the customer / clearing to finish the process cycle sooner.  Reconciliation of the data provided by C.V with the CPC data to maintain accuracy & minimise the errors.  To ensure & check the Daily control check list sent by CV for all the activites done for the day.

WHY MEGA RECON ?  Pick-up (Cash & Cheque) level recon between customer file & CPC report & sharing match – unmatched reports.  Capturing additional fields on CPC as per customer’s requirement which gets shared to customer through the Credit MIS that is used for further recon at their end.  Re-enrichment of cheque level data to improve the accuracy of data captured on CPC.  Pro-actively highlighting deposit level mismatches to the concerned team & getting the same resolved before customer highlights it to us.

Process flow chart- MR Chennai local team for processing on CPC based on summary received from coordinators Deposit in Corr bank or Clearing team Coordinator pickup cash & Chques Cheques & cash Processing of cash and cheques Sharing matched and unmatched and credit reports Amicom-Mega Recon on Aplab and sharing reports to be uploaded on CPC TCS E-serve Cash enrichment and cheque level report

Recon– An Overview

RECON 2 major products – Paylink and IWDW PAYLINK RECON ( Correspondence Bank Operations)  Arrangements with Corr Bank – Netting (ZBA) & Funding (DD Drawing)  Daily Funding based on type of arrangement For DD’s issued / paid based on type of arrangement Cancellation recovery may be Net or Gross (of funding) Interest implication in case of delayed funding  Daily Liquidation Updating of Draft Paid data on the PayLink systems Correspondent Bank Customer Cheque Liquidation  Daily Reconciliation Exceptions - Excess (refunds) & Short funding, Cancellation recovery Incomplete or incorrect data Reconciliation of outstanding drafts for Funding arrangements Stale Recovery from correspondent banks on periodic basis  RFRS (Reconciliation, Funding and reporting system) used to manage funding, reconciliation, liquidation. Consolidates inputs across product processors

 RFRS maintains instrument level data and accounting entries are recorded in Accounting System.PAYLINK SERVICE (Correspondence Bank Service )  Service Queries – Stop Payment / Status / Paid copies Funding Arrangements – 14 day Turnaround Netting Arrangements – 7 days Timelines for paid copies are longer  High Value intimations  Clearing of technically inconsistent cheques  Incorrect stop payments or returns  Netting bank arrangement - Check issued but Funds are lying with client bank  Funding bank arrangement - Check issued but Funds are lying with Correspondent bank RECON

Payment Recon IWDW RECON  Integrity Tracking - Interest & Div. Product Processor vs. Accounting System  Our A/c Recon - 3 Way reconciliation between Correspondent bank a/c statement vs. Client A/c Statement vs. Client Master for Paid Instruments.  Customer A/c Recon - paid data vs. debits of deal wise A/c’s at Correspondent Bank.  Upload of Balances:- In four cycle i.e. 07th,15th,25th & Month end, closing flex/correspondent bank balances are uploaded on IDS  Reconciliation Statement Generation Reconciliation statements are generated though the system (Generate Module) & dispatched to customer. IWDW reconciliation is between funding and pay-outs and any difference is highlighted as Work In Progress.  Tracking Work in Progress (WIP) :- Work In Progress = Total Funding - Payouts (DDs + FT + ECS + Warrants + Noms) -Account balance

COLLECTION RECON COLLECTION RECON ( Local Chq Collections)  Local chq collections – Check collection product where in checks drawn locally in non-client branch locations are picked up and deposited with Correspondent Banks through network of Coordinators.  Sub Products :- Telecom – Small value instruments picked from Drop boxes for Telecom customers. BULK – Small value Instruments picked up from Insurance / financial Companies. Cash – Physical Cash deposited by Customer / Cash Pickup Agency with Correspondent Banks or with Cash Pickup Agencies.  Network 11 Correspondent Banks. 466 Locations covered.  Guaranteed Funding Arrangement with Correspondent Banks.  Daily Reconciliation :- Funds Tracking - Receipt of funds from Correspondent Banks. Follow up with Correspondent Banks / Coordinator for outstanding exceptions. Handling customer queries raised by Client Service Desk Monitoring and reporting daily utilization of Correspondent Bank limits. Monthly reporting of Outstanding exceptions to clients.

COLLECTION RECON COLLECTION RECON (Upcountry and Upcountry Remote)  Upcountry Chq Collection –is a Check Collection products wherein upcountry cheques are picked up and sent on Collection to the correspondent banks branches.  Network :- 12 Correspondent Banks. 3431 Locations covered.  Guaranteed and Clear funds arrangement with Correspondent banks.  Upcountry Chq Collections (Remote):- is a Check collection products wherein upcountry cheques are picked up and sent on collection to the respective Drawee Banks.  Remittance of funds through Demand drafts.  Daily Reconciliation :- Funds Tracking - Receipt of funds from Correspondent Banks / Drawee Banks. Co-ordination with correspondent banks and vendors for outstanding follow-up Direct Collection tracking and follow-up Duplicate draft follow-up for remote collections demand drafts Handling customer queries raised by Client Service Desk Dealer Bank Collusion / Portfolio and Monthly MIS reporting's Monthly reporting of Outstanding exceptions to clients.

CASH RECON PAYMENTS RECON Demand Draft (DD) – Draft payable at correspondent branch location Post Dated DD - The Draft payable date later than printing date (future date) Correspondent bank locations – Issued by the customer Stop payment\ Cancellation –Caution to be marked for lost drafts/ cancellation request received from customer Stale instruments recovery –DD which has expired its validity (90 days post issuance) Warrant processing – Processing of paid warrants and identifying and resolution of exceptions if any. Two major products are handled under Payments Recon – Paylink and IWDW Payments services are offered to client across three segments - ICG (Corporate), GCG (Retail) and Cards (Merchant Payments, Loan-on-Phone) Payments recon also handled stationery Reconciliation & ETM Control, Vendor Review & monitoring, Vendor Bill tracking & Payments

CASH RECON COLLECTION RECON ( Upcountry & Remote Chq Collection) Important Terms :- Pickup Location :- The pickup location is the city/town from where the deposit & cheques are picked for the customer. Pickup Point :-The pickup point is the place/dealer within the pickup location of the customer from where the deposit/cheques have been picked up. Drawee Location :- The drawee location is the city/town where the cheque is drawn i.e. the location where the cheque is to be sent for clearing. Correspondent Bank :- The bank arrangement that presents customer cheques in local clearing under Local and Upcountry Chq Collections. Coordinator :- vendor at the Local Chq clearing location whose job is to coordinate between the local customers, Recon / Network team and the correspondent bank Dollar Schedules :- Cheques processed under product Upcountry and drawn on Local Chq clearing locations are known as Dollar cheques. Drawee bank - One on whom the chq is drawn Presenting bank - One who presents the chq in clearing

CASH RECON Exception Types :- All the exceptions are classified into four types depending on the entry passed: a) We Debit Exception b) We Credit Exception c) They Credit Exception d) They Debit Exception  We Debit Exceptions :- These exceptions pertains to entries passed in Our A/C for deposits made by the clients. WD exceptions means credit receivable from the Correspondent Bank or excess credit given to the customer.  We Credit Exceptions :- These exceptions are for returns yet to be debited by bank or duplicate debits to clients for returns  They Debit Exceptions :- These types of exceptions pertain to debits by the correspondent bank for returns or charges.  They Credit Exceptions :- These exceptions is due to the excess credit received from the correspondent bank or short credit provided to the client.

Fund Transfer– An Overview

Messaging

Messaging- Communicating Instructions Hello State Bank NY, this is A bank NY, our customer has asked us to pay your customer $25000, on today’s date. We have credited your account with us for that amount Message A bank, New York C Bank, New York Messaging

Generally unstructured messages Not secure Messages are garbled and unreliable Susceptible to fraud Usage of the system is diminishing Telex Messaging

The Society for Worldwide Interbank Financial Telecommunication ("SWIFT") operates a worldwide financial messaging network. Messages are securely and reliably exchanged between banks and other financial institutions using MT Types. SWIFT is a company that operates and manages a network that connects banks and other financial institutions. Through this network (a.k.a. SWIFTnet) information can be exchanged using special crafted messages known as Message-Types (MT). The majority of international interbank messages use the SWIFT network. As of April 2008 SWIFT linked 8,612 financial institutions in 209 countries, as on Sep 2008 (YTD) 2,529,575,207 messages have been exchanged between financial institution. SWIFT does not facilitate funds transfer. Financial institutions would need a Direct Relationship / Corresponding banking relationship for financial transactions. What is S.W.I.F.T ? Messaging

SWIFT is solely a carrier of messages. It does not hold funds nor does it manage accounts on behalf of customers, nor does it store financial information on an on-going basis. As a data carrier, SWIFT transports messages between two financial institutions. This activity involves the secure exchange of proprietary data while ensuring its confidentiality and integrity SWIFT is a cooperative society under Belgian law and it is owned by its member financial institutions. SWIFT has offices around the world. SWIFT headquarters are located in La Hulpe, Belgium, near Brussels. It was founded in Brussels in 1973, supported by 239 banks in 15 countries. It started to establish common standards for financial transactions and a shared data processing system and worldwide communications network. Fundamental operating procedure were established in 1975 and the first message was sent in 1977. What is S.W.I.F.T ?... continued Messaging

S.W.I.F.T - Connecting the financial community Banks Insurance companiesCorporates Broker/Dealers Investment Managers Stock Exchanges Depositories Trustees Clearing Systems Payments Systems Settlement Systems Govt. Institutions Messaging

How does SWIFT work? A physical telecommunications network connects all members of Swift to each other. This physical network is the same as that used for telephone and fax communication, and is usually provided by the Telecom providers in each member’s country. Swift communication Software is installed on computers in each member’s location. Swift works in much the same way as the Internet, and it enables members to send messages to each other. The message structure, format and contents are common across banks - only the method of viewing the messages differs. Messaging

Common Parties to Electronic Payment

Remitting Bank Naming Payment Participants Remitter Beneficiary Account with Institution Correspondent Bank Common Parties to Electronic Payment

Remitter Original Source of the Payment order/instruction Known as Ordering Customer. Also referred to as Originating Customer, initiator of a funds transfer. Common Parties to Electronic Payment

Remitting Bank Bank which has ordered the payment on behalf of itself or its customer. Also referred to as Ordering Bank, Ordering Institution or as Originating Bank The financial institution receiving the transfer instructions from the originator and transmitting the instructions to the next party in the funds transfer. Common Parties to Electronic Payment

Correspondent Bank Other financial institutions that may be required to effect the transaction. The financial institution generally interacts between the remitter and the account with institution bank for delivery of funds. Common Parties to Electronic Payment

Beneficiary Bank The financial institution that is to credit or pay the beneficiary party. Common Parties to Electronic Payment

Beneficiary The ultimate party to be credited or paid as a result of a funds transfer. Common Parties to Electronic Payment

There are two different messaging methods as below - Cover method Serial method Messaging Methods

Cover Payments The “Cover” payment method divides the message into two parts. The originator’s bank sends the detailed funds transfer instruction directly to the beneficiary’s. The originator’s bank also sends a second “cover” payment instruction that directs the transfer of the funds from the originator’s bank to the beneficiary’s bank as a financial institution-to-financial institution settlement payment. Messaging Methods

The message includes all the customer information, It does not need to include any information about the intermediary banks in the chain It is a bank to bank message that does not include any information about the ultimate beneficiary. It simply indicates the institution to which the payment should be passed on. The account-with institution needs to match up the two messages for the payment to be completed. Cover Payments Messaging Methods

In the serial payment method, one financial institution transmits the funds transfer instructions to the next financial institution in the overall “payment chain.” Each institution in the communication chain receives the same level of detail about the transaction at each step. Serial Payments Messaging Methods

Serial Payments Advantages Serial payments are simpler. The remitting bank sends only one message. Less reconciliation is required by the bank. Disadvantages Time issues Potentially, each bank in the chain can take charges. Messaging Methods

Who can choose the messaging method ? The Originating bank can choose the most suitable method. The other banks in the chain have no choice but to follow the method chosen by the Originating bank. When do we choose to use cover payments ? Direct and Cover is the preferred method when there are more than 2 banks in the payment chain. When not to use Cover payments ? Paying USD into the United States Paying EUR into Europe. Messaging Methods

Account Services – An Overview Certificate of Deposit -Time (CDT) As the name specifies, CDT is the certificate issued to the customer who deposits an.

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Account Services – An Overview Certificate of Deposit -Time (CDT) As the name specifies, CDT is the certificate issued to the customer who deposits an.

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Presentation on theme: "Account Services – An Overview Certificate of Deposit -Time (CDT) As the name specifies, CDT is the certificate issued to the customer who deposits an."— Presentation transcript:

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