oo @ NPA Resolution Process (SARFAESI, DRT, ARC, and IBC) Kapil KathpelNATIONAL PAYMENT CORPORATION OF INDIA (NPCI) + The National Payments Corporation of India (NPC!) is a pioneer organization in the field of retail payments in India. Founded in December 2008, the NPCI is a not-for-profit organization, established by the Reserve Bank of India and Indian Banks’ Association. The organisation presently have ten core promoter banks (State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC). The vision of NPCI is being able to provide citizens of our country anytime, anywhere payment services that are simple, easy to use, safe, secure, fast and also cost-effective. NPCI aims to operate for the benefit of all the member banks and the common man at large. NPCI, during its journey in the last few years, has made a significant impact on the retail payment systems in the country. With Immediate Payment Service (IMPS), India has become the leading country in the world in real-time payments in the retail sector. Needless to say, National Financial Switch (NFS) and Cheque Truncation System (CTS) continues to be the flagship products of NPCI. Unified Payments Interface (UP!) has been termed as the revolutionary product in the payment system. The other products include RuPay Credit Card, National Common Mobility Card (NCMC) and National Electronic Toll Collection (NETC). With these products, the aim is to transform India into a ‘less-cash' society by touching every Indian with one or other payment services. Some payment systems/products managed by NPCI are detailed here.ALTERNATE DELIVERY CHANNELS R INES (A Automated Teller Machines (ATMs) are primarily used to perform some banking functions such as the withdrawal of cash or deposit of cash/cheque, etc., using an ATM/ATM cum debit cards, credit cards and prepaid cards, as permitted by the issuer. ‘The committee headed by Dr. C. Rangarajan recommended setting up ATMs in India.Stand-alone ATMs made their appearance in India in the early 1990s. For facilitating the operations through these ATMs, a customer is provided with an ATM card with a personal identification number (PIN), which can be changed at any time by the customer. Whenever a customer performs a transaction, he/she has to key in the PIN, which is validated by the ATM switch, before the machine permits any transaction. The PIN has to be kept secret by the customer to prevent any misuse or fraudulent transactions in the event of loss of the card. The Reserve Bank instructed banks in August 2015 to replace all magnetic stripe cards with Europay, Mastercard and Visa (EMV) Chip and PIN-based cards by end of December 2018. Later in May 2016, Banks were instructed to enable EMV Chip based processing at ATMs/micro-ATMs.ATM Models in India Online: When an ATM is connected to a bank's database and provides online access to the customers’ accounts, it is said to be ‘online.’ Normally, there is a daily withdrawal limit set by the bank for each account. The ATM switch monitors this limit. Offline: When an ATM is not connected to a bank's database, it is stated to be ‘offline.’ In this mode, withdrawals are permitted up to a pre-fixed limit only, irrespective of the balance available in customers‘ accounts. Networked: When ATMs are connected to an ATM network, they are said to be ‘networked’. The advantage of networked ATMs is that cardholders can use their ATM cards at any of the networked ATMs. This, in effect, permits 'anywhere anytime’ banking. The majority of the ATMs in India are networked through National Financial Switch (NFS) operated by NPCI.Cash Dispenser (CD) + A cash dispenser (CD) is a pruned down version of the ATM. CD is an ATM without a depository and intended to serve the customers for making cash withdrawals only. Networking of ATMs + For optimizing the cost of investments in ATMs, banks joined in small clusters to share their ATM networks. There are many such ATM network clusters functioning in India. Indian Banks’ Association (IBA) was the first ‘organisation to set up a shared payment network system (SPNS) or SWADHAN network of ATMs of its member banks in Mumbai. The network went live on 1 February 1997. + The Objective behind the SWADHAN network is to provide 24 hours, 7 days a week electronic banking service to the customer of a member bank anywhere in the city of Mumbai. The customer is free to carry transactions at the ATMs of any of the member banks located in the neighborhood. To facilitate interoperability among these clusters at the national level, IDRBT initiated the process of setting up a National Financial Switch’ (NFS) to facilitate apex level connectivity of other switches established by banks. IDRBT had been providing ATM switch services to banks in India through NFS. NPCI (National Payment Corporation of India) took over NFS operations from IDRBT on December 14, 2009.Services provided by ATMS (a) Cash Withdrawal (b) Balance Enquiry (c) Statement (2) PIN change (e) Cash Deposit (f) Cheque Deposit (g) Funds Transfer (h) Credit Card Payment () Utility Bil Payment () Cheque Book Request (k) Insurance Premium Payment () Recharge/top-up of Mobile, DTH, etc. (m) Term deposit opening (n) User details updation (0) Aadhaar UpdationATMs Customer Interface The following components of the ATM provide the customer interface: (a) Video Display Monitor (b) Keyboard/Keypad (c) Touch Screen (d) Slots: There are various slots in an ATM for different purposes, as detailed below: (i) Card Reader (ii) Envelope Dispenser (ji) Cash Dispenser (iv) Deposit SlotWhite Label ATMs (WLA) + ATMs, which are set up, owned, and operated by non-banks, are called White Label ATMs (WLAS). As of 1 Jan 2022, Four Non-bank ATM operators (Indial Payments (formerly known as BT! Payment), Tata Communications Payment Solutions, Hitachi Payment Services and Vakrangee). 10 other licenses issued were surrendered or cancelled are authorised to install and operate WLAS. + Under the Payment & Settlement Systems Act, 2007 by the Reserve Bank of India. The Reserve Bank of India (RBI) released the first guidelines in June 2012 to introduce "White Label ATMs" to expand with the entire ATM network in the country. Customers from any bank can transact on such White Label and hence they are called White Label ATMs. They serve all banks’ customers and will be interconnected banking services in the country. White label ATMs (WLAS) do not display any bank's branding/signage, ATM's, which is comparable to non- home bank ATMs. This initiative is aimed at Financial Inclusion for the country with aiding the ATM penetration in Tier 1 to Tier 6 cities, towns and villages.Goneral Criteria for non-bank entities authorised by RBI to sot up and operate WLAS + The WLA Operator would be permitted to earn extra revenue through advertisement and by offering value- added services. Advertisements on such ATMs would be subject to Advertising Standards Council of india (ASC1) codes and other regulations. + WLAs are non-bank owned ATMs, and hence the guidelines on five free transactions in a month for using other bank ATMs would not be applicable for transactions effected on the WLAS. The charges for the transactions should be displayed on the screen before the customer initiates the transaction. + The WLA Operator would not be entitled to any other fee from the issuer bank other than the “Interchange” fee payable to the “acquirer” bank under the present bank-owned ATM scenario. The WLA Operator shall also not be permitted to charge any fee from the customers to use the ATM resources.Brown Label ATMs ‘Brown label’ ATMs are those Automated Teller Machines where a service provider owns the hardware and lease the ATM to banks, cash management and connectivity to banking networks is the responsibility of sponsor bank whose brand is used on the ATM. Thus, the service provider takes the responsibility of maintenance of the ATM, whereas the sponsor bank takes the responsibility of cash management and connectivity of ATM to the banking network.Gash Recyclers Cash Recycler machine is a self-service terminal that lets one deposit and withdraws cash. The customer's account is immediately credited or debited in real-time on a successful transaction, and an acknowledgement slip is issued confirming the transaction. Transactions can be done through Debit Card for cash withdrawal, and a transaction receipt is given with an updated account balance. Some features of Cash Recyclers are: (1) Cash recyclers can accept cash from customers and dispense it as well. (2) They ensure the genuineness of currency. (3) Counterfeit notes are recognised. (4) Cash deposit is made with debit card (5) Cardless transaction up to 20,000/- per day.Kiosk Bankii + An electronic kiosk in a Bank is a small electronic/computerised Box/structure that helps users inquire, print, transact. These kiosks are deployed in places with high foot traffic like airports, malls, etc. These kiosks are essentially unmanned. ‘Services offered through Kiosk banking are: (1) Balance enquiry (2) Cheque Deposit Facility (3) Cheque Deposit facility with CTS interface (4) Opening of no-frill account (5) Cash Deposit (6) Cash withdrawal (7) Bill payment facility using a Debit card and Net banking (8) Browser-based Internet Banking (9) Non-cash/Enquiry services like Balance Enquiry and Mini Statement (10) Bill payment facility using a Debit card and Net bankingPass Book Printing Kiosks (PBK) + A Passbook Printing Kiosk is an automated kiosk wherein a customer can print his passbook independently. Normally these passbook printers are of self-service in nature. PBK the account details from the magnetic strip placed on the Passbook. PBK fetches the transaction details through this magnetic strip and prints them on the passbook. Customers can use this facility at any time of the day on a 24x7 basis. These PBKS are installed in E-lobbies along with ATM, BNA, and Internet banking Kiosk etc.Cash Deposit Machine (CDM) + ACash Deposit Machine (CDM) allows customers to deposit money using a debit card or account number. One of the remarkable features of CDM is that the Account is credited instantly at any time of the day on all days of the year. + As per RBI guidelines, customers can deposit only up to 49,950 per account per day if the PAN number is not recorded with the Bank. To deposit cash for more than 49,950 per account per day, the PAN number should be registered with the Bank.Bulk Note Acceptors (BNAS) + BNAs are new generation, secure ATMs that have the multi functional ability to offer deposits or dispense transactions of bundles notes up to 200 mixed notes after having counted and authenticated them in 8-10 seconds.The customer is first asked to verify the amount of deposit to ensure that it tallies and then it is credited into his/her account immediately. It completely takes away human intervention required until now and enables users to manage and control the same. The initial attempt at automating Deposits included certain types ATMs which allowed users to deposit cash via envelopes. The money would then be counted, verified and credited later. This never really gave customers a sense of security regarding their deposit. The potential impact of BNAs on currency circulation and customer service was seen as significant for the RBI to subsidize the cost of BNAs up to 50 per cent for urban areas (and even 75 per cent in semi urban areas).Banks are offering a Green Pin generation facility. Green PIN is an easy and convenient way to generate a Debit card PIN through various channels like ATM, Internet Banking, IVR and SMS. Green PIN is instant PIN generation/regeneration functionality available for Debit Card with One Time Password (OTP) sent to the customer's mobile number registered with the bank. Using the OTP, customers can set debit card PIN through various channels. ELECTROMAGNETIC CARDS + There are different types of electromagnetic cards which serve as plastic money. Some of which are discussed below: (a) Charge card (b) Debit card (©) Credit card (d) Smart card or Chip card (e) Restricted card/Member cardCredit Card * Generally, a bank enters into an agreement with its customer and issues to the customer a credit card. A credit card is a small plastic card around 8.5 cm by 5.5 cm. It contains the name and the account number of the holder embossed on it. In addition, the date up to which the card is valid will also be embossed and a specimen signature panel on the reverse side. Many card issuers banks also allow cash withdrawals for emergency purposes and levy a service fee for such withdrawals. Many banks also have credit cards, which double up as ATM cards. This is the same as a charge card, where the transactions are charged to the account with the total value of transactions debited to the card holder's account once a month. The difference between the credit and charge card is that in the case of a charge card, the amount becomes payable immediately on the debit to the account. In the case of credit cards, the cardholder has the option to pay the entire amount as soon as the card account is debited, or he may choose to pay only a certain percentage of the amount debited, and he gets a credit to the extent of rest, i.e. he can pay it in monthly instalments later. However, a service fee is charged on the amount, payment of which is deferredDebit Cards + A bank-issued card allows users to access their funds to pay for merchandise. A debit card acts like a credit card, the difference being that funds are immediately debited to the cardholders’ accounts.Smart Cards ‘The Smart Card looks exactly like any other plastic card or an ATM card with an integrated circuit (IC Chip) installed. The IC chip contains memory, may contain a processor and communicates with the external world through contacts on the card's surface. The size, position and ulity of the contacts are specified by an international standard (ISO 7816), so that cards can interact with a variety of equipment. Assecure pin pad must be provided to allow the user to enter the PIN and have it checked by the smart card. The pin pad ‘would have to store the secret keys for the application and must be designed so that it is impossible to extract these keys under any circumstances. ‘The security level should be certified by independent and competent authorities. Unlike a conventional magnetic stripe ‘card, which can be easily erased or copied, a smart card has a protected and much larger memory. Smart cards also have confidential memory zones holding secret user information. EMV Cards: EMV stands for ‘Europay, MasterCard and Visa’, a global standard for inter-operation of integrated circuit ccards (IC cards or “chip cards") for authenticating credit and debit card transactions, It is @ joint effort initially conceived between Europay, MasterCard and Visa to ensure the security and global interoperability of chip-based payment cards. EMV chip cards are payment cards carrying an embedded microchip. The ‘computing power of the chip enables smart cards to offer new payment options and services, additional levels of security, ‘and more convenience and choice. Chip cards used with PIN are a solution to counterfeit, lost and stolen card fraud. The chip prevents the card from being counterfeited, and the PIN uniquely identifies the owner of the card and prevents it from being used by someone else if lost or stolen,Member Card + This is used exclusively by the members of a club or a chain of hotels. For example, the Taj Card is a card issued by the Management of Taj Group of Hotels to be used by patrons. The cards are for use in their hotels only. Similarly, there are many other types of cards where the usage is exclusive to the members of a group or establishment.gital wallet/e-Wallet + Amobile wallet or an e-wallet is nothing but a digital version of a physical wallet. + It uses a bank account, debit or credit card information to process payments and the payment details are stored in a secure and encoded format. * Mobile wallets can either be bank-owned or non-bank owned. For non-bank wallets, the provider should have a PPI license from RBI before launching a mobile wallet. Using mobile wallets, customers can make any type of transaction, right from utility payments to e-tailing (online purchases) and offline payments. + There are separate guidelines issued by RBI for the issuance of Prepaid Payment Instruments (PPIS); mobile wallet is one such instrument.