GIVES A KNOWLEDGE ABOUT ECS

1. ELECTRONIC CLEARING
SERVICE(ECS)
BY:-
MAYANK SAXENA
SRMS IBS
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2. Electronic Clearing
Service (ECS):
FASTEST
ECS
TRANSFER
OF
MONEY
SAFEST CHEAPEST
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3. WHAT IS ECS?
• Electronic mode of payment / receipt for
1 transactions that are repetitive and periodic in
nature.
• ECS is used by institutions for making bulk
2 payment of amounts towards distribution of
dividend, interest, salary, pension, etc
• For bulk collection of amounts towards telephone
3 / electricity / water dues, cess / tax collections,
loan installment repayments, periodic investments
in mutual funds, insurance premium etc
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4. Example of JIVAN TYRES
ECS Really
helps in giving
salary to
Employees
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5. Illustration 1
Jivan Tyres Ltd. has to pay salaries to its employees
Customers have accounts across different banks
Can he use the ECS payment system?
Yes it will make his work simpler
An ECS is only an account to account payment
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6. Example of ANITA
ECS had made my life
simpler and reduced
time wastage due to
waiting in queues.
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7. Authorization of
Anita Debiting her
Account
Request of debiting
Anita’s A/C
Smart Authorizes New Gen Bank New Gen
Bank Bank
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8. ECS Requirements
Payer and payee must have bank
accounts in banks participating in the
ECS system
These banks have to be the member
of the local Clearing House, to avail
the ECS facility.
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9. Participants of ECS
Payer
PAYEE
CLEARING HOUSE
PAYERS BANK
PAYEES BANK
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10. Variants of ECS
Two variants of ECS - ECS Credit and ECS Debit
ECS CREDIT
ECS Credit enables
Used by an In case of ECS Credit,
payment of amounts
institution for the initiator can be
towards distribution
affording credit to a the paying bank,
of dividend, interest,
large number of requesting a credit to
salary, pension, etc.,
beneficiaries. the receiving bank
of the user institution
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11. Contd….
ECS Debit
Used by an institution for
raising debits to a large
number of accounts (for Useful for payment of
In case of an ECS Debit,
instance, consumers of telephone / electricity /
the initiator of the
utility services, borrowers, water bills, cess / tax
process is the payee's
investors in mutual funds collections, loan
bank.
etc.) maintained with installment repayments
bank branches at various
locations.
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12. Advantages of ECS
The end beneficiary does not need to make frequent visits to the bank for
depositing the physical papers.
There is no risk of loss or fraud for the beneficiary.
The delay in realization of proceeds after receipt of paper is avoided.
Its trouble free as it eliminates the need to go to the collection centers or
banks by the customers.
Provides peace of mind to the customers
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13. Categories of ECS Schemes
Local ECS
• Operating at 81 centres / locations across the
country
Regional ECS
• Operating at 9 centres / locations at various parts of
the country.
National ECS
• Centralized version of ECS Credit which was
launched in October 2008.
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14. Advantages of the ECS Credit Scheme
to the beneficiary
The The Cost Effective
3
1
2
beneficiary beneficiary
need not visit need not be
his / her bank apprehensive
for depositing of loss / theft
the paper of physical
instruments instruments
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15. Advantages of ECS Debit Scheme to
the customers?
ECS Debit mandates will take care of automatic
debit to customer accounts on the due dates
without customers having to visit bank branches
Customers need not keep track of due date for
payments
Cost effective.
The debits to customer accounts would be
monitored by the ECS Users, and the customers
alerted accordingly.
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16. Processing / service charges levied
under ECS Credit and Debit
• With effect from 1st July 2011,
originating banks are required
to pay a nominal charge of 25
paise per transaction to the
COST Clearing house and destination
EFFECTIVE bank respectively.
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17. QUIZ
• Is ECS Applicable in the case of different bank
accounts in different banks.
a) Yes b) No c) Cant say
• What are the variants of ECS
Ans
• Who is the initiator in the case of ECS Debit
a) Payees bank b)Receiving bank c) Sponsor bank
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18. • Who is the initiator in the case of ECS Credit
a) Payees bank b)Receiving bank c) Sponsor
bank
• Amount paid by the originating bank to clearing
house is?
a) 25 paise per transaction b) 30 paise per
transaction c) 35 paise per transaction
• Is is necessary for the banks to be the member
of the local Clearing House, to avail the ECS
facility.
a) Yes b) No c) Cant say d) depend on the banks
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