Indian banks are quickly upgrading their payment systems, largely driven by the need to modernize and meet regulatory requirements. For modernizing the payment and settlement systems in India, Reserve Bank of India (RBI) is strengthening the computerized cheque clearing and expanding the reach of Electronic Clearing Services (ECS) and Electronic Funds Transfer (EFT).
The critical elements of RBI strategy involve opening of new clearing houses, interconnection of clearing houses through the Indian Financial Network (INFINET), development of RTGS system, Centralized Funds Management System (CFMS), Negotiated Dealing System (NDS) & the Structured Financial Messaging System (SFMS) and introduction of Cheque Truncation System.
According to Mr Anurag Khanna, CEO, Banknet India, 13 major Indian banks floated RFP/EOI for selecting vendors for Cheque Truncation Solutions in the last 5 months. Urgency shown by banks in this area is primarily due to the RBI’s implementation of pilot project for Cheque Truncation in New Delhi by end-March 2006.
Banknet India’s “Conference on Payment Systems in Banks” in January in Mumbai will be the largest gathering of bankers ever in a banking conference in India. This conference will be attended by nearly 500 delegates from 100 banks & FIs.