PRODUCTS AND SERVICES OF COMMERCIAL BANKS

1) NEFT- National Electronic Funds Transfer.

The NEFT is a nationwide payment system facilitating one-to-one funds transfer.

Under this system, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the system.

2) RTGS- Real Time Gross Settlement.

RTGS can be defined as the continuous (real time) settlement of funds transfer individually on an order by order basis.

The minimum amount of remittance through RTGS is Rs 2 Lakhs.

Difference between NEFT and RTGS. 

NEFT	RTGS
1)      Settlement is on Batch basis.	1)      Settlement is on Real Time basis.
2)      No Minimum Limit.	2)    Minimum Limit- Rs 2 Lakh.
3)    Operating Hours.                (Mon-Fri) Weekdays (Batch)                 12 Settlements- 8 AM to 7PM.                Saturday                6 Settlements- 8AM to 1 PM.	3)    Operating Hours.                (Mon-Fri) Weekdays (Real Time)                9 AM to 4:30 PM.                Saturday                9 AM to 1:30 PM.
4)    Processing Charge*.  Inward Transaction at Destination Bank Branch- Free. Outward Transaction at Originating Bank Branch- upto Rs 10,000- Rs 2.50(+ST) Rs 10,000 to Rs 1 Lakh- Rs 5(+ST) Rs 1 Lakh  to Rs 2 Lakh- Rs 15(+ST) Above Rs 2 Lakh - Rs 25(+ST)	4)     Processing Charge*. Inward Transaction at Destination Bank Branch- Free. Outward Transaction at Originating Bank Branch- Rs 2 Lakh to Rs 5 Lakh- Rs 30 Above Rs 5 Lakh- Rs 55

^RBI timing is provided. It is subject to change. It may vary practically from Bank to Bank.

*Vary for different banks, provided to give an idea of the system and the slab.

 3) Electronic Clearing Service (ECS)

• ECS is a electronic mode of payment or receipt for transactions that are periodic and repetitive in nature.

•  Used by institutions for making bulk payments of amount towards distribution of dividend, interest, salary, pension etc.

• It can also be used to pay bills and other charges such as telephone, electricity, water or for making equated monthly installments on loans.

•  ECS can be used for both credit and debit purposes.

4) Immediate Payment Service (IMPS)

Currently majority of interbank fund transfer transactions are channelized through NEFT mechanism. Under NEFT the transactions are processed and settled in batches, hence are not real time. Also, the transactions can be done only during the working hours of the RTGS system.

In the above context National Payment Corporation of India (NPCI) has introduced the Immediate Payment Service (IMPS).

IMPS offers an instant, 24x7, interbank electronic fund transfer service through mobile phones. IMPS facilitates customers to use mobile instruments as a channel for accessing their bank accounts and put high interbank fund transfers in a secured manner with immediate confirmation feature.

This facility is provided by the NPCI through its existing NFS switch. The eligibility criteria for the Bank who can participate in IMPS is that the Bank should have approval from RBI for Mobile Banking Service.

5)  Bancassurance

The Bank Insurance Model(BIM), also known as Bancassurance, is a partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products.

Both the bank and the insurance company shares the commission.

ADVANTAGES

1. Significant source of income for the Bank.

2. Have low costs as they use the existing infrastructure (branches and systems) that they use for banking.

3. Access to large customer base that the banks have.

4. Banks can often sell insurance at better prices(i.e. higher premiums) than many other channels.