The Reserve Bank of India, or RBI, has told a bunch of top bank executives to push the use of electronic transactions among customers to trim the serpentine queues in front of teller counters despite lakhs of automated teller machines and net banking facilities.
On November 3, the central bank told the executive directors of select state-run banks to educate customers about the many options, like real-time gross settlement, national electronic funds transfer, and electronic clearing service, for transactions.
“RBI told banks to improve the penetration of electronic payment systems during a meeting to review the present situation,” a bank executive who participated in the meeting said not wanting to be named. Executive directors of Allahabad Bank , Bank of Baroda , Bank of India, Central Bank of India , Dena Bank , Punjab & Sind Bank, Syndicate Bank , Uco Bank and Vijaya Bank were at the meeting presided over by RBI chief general manager G Padmanabhan.
The central bank acknowledged that paper-based systems will continue to dominate in terms of numbers , but it said banks should try to increase the share of electronic payment options in terms of the value of transactions. At present, nearly 90% of all banking transactions are done electronically in value terms; the share of electronic payment is just about 35% in terms of the number of transactions. Some banks are lagging the industry average in making their customers adopt the electronic options.
Over a period of time, the RBI has been encouraging the use of electronic payment products that are superior to paper-based systems in terms of traceability , efficiency, speed and safety. While RTGS is for high-value transactions, NEFT and ECS are for small amounts.
The share of paper-based instruments has been on the decline both in volume and value terms. But RBI said that paper-based solutions will dominate in terms of numbers and launched a speed-clearing system to streamline the process and reduce the time taken for collection of outstation cheques. Speedclearing system is available for MICR (magnetic ink character recognition) cheques at 66 MICR chequeprocessing centres across the country.