Saturday, March 15, 2014

Electronic Fund Transfer: Spoilt for Choice


I never cease to wonder at the way in which our lives have been transformed by the internet.

Take net-banking for instance. We stay in Delhi NCR and our housemaid, Basanti's family is based at Murshidabad, West Bengal. Last week, her daughter took ill and had to be taken to a hospital in Kolkata. Money was urgently needed for the travel and medical expenses.

Until a few year's ago, Basanti would have taken a wad of notes to the nearest post-office, stood in a line for her turn, written out an application form, and hope that a week or two later, the postman would not take a 'cut' while handing over the cash.

Today, anybody with an internet connection can be the intermediary. It was my turn today. An SMS was sent out to the family asking for details of their village bank account. Five items were requested - name as in bank records, account number, name of bank & its branch, and its IFSC code.

It was already past 8PM when these details came in. On ICICI Bank's webpage three options were available - NEFT, RTGS and IMPS. The first two work only during office hours. So I used the last option - IMPS - which was a 24x7 service. Within a few minutes the money was already accessible at an ATM 1500 kms away!

Hats-off to all those who put this amazing system in place!

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Note: Efficiency of service varies across banks. I had first logged on to HDFC bank. Six hours later, they were still flashing "Authorization Awaited". ICICI Bank was a lot faster.

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Decoding the alphabet soup:
  • IFSC - Indian Financial System's Code. Each bank participating in the national electronic fund settlement system as its own unique code.
  • NEFT - National Electronic Fund Transfer. RBI FAQ on NEFT - http://www.rbi.org.in/scripts/FAQView.aspx?Id=60 // RBI's NEFT FAQs
  • RTGS - Real Time Gross Settlement. Unlike NEFT this is final and irrevocable.
  • IMPS - Immediate Payment Service -- http://www.icicibank.com/Personal-Banking/onlineservice/online-services/imps/index.html 


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