Several Founders, Co-Founders, CXO Bankers, CXO Fintech professionals & people who participated in the ePanel discussions:
- Mr. Chitti Babu, former Global Head- Payments & Digital Solutions, Unimoni
- Mr. Piush Kothari, Head of Business Operation, Walt Disney Direct to Consumer & International
- Mr.Rajeev Panikath, COO, SBM Bank India
- Mr. Amit Jadhav, Senior Vice President, DBS Bank
- Mr. Anuj Khosla, Chief Executive Officer, Hitachi Payment Services
- Mr. Sharad Goklani, former CTO at Equitas Small Finance Bank
- Mr. Rakesh Watal, Head Liability Operations Western Region, HDFC Bank
- Mr. Subbiaa Olimuthu, former Product Manager – RuPay Product
- Mr. Prasad Likhite, Director Sales, ACI Worldwide
- Mr. Ajay B Panicker, CEO & Founder, NetPay Limited
- Mr. Muthu Krishnan, former Associate VP – Merchant Acquisition, India Transact Services Ltd
- Mr. Amarto Chakrabarty, former Principal Consultant- Global Consulting Group, Wipro Limited
- Mr. Hitesh Thakkar, Fintech Consultant, Self-Service Automation
- Mr. Yogesh Raut, Vice President Technology, Mitsubishi UFJ Financial Group(MUFG)
- Ms. Priyanka Subhadarsini, Payments Business Analyst, Standard Chartered GBS
- Mr. Vikas Kukreja, Founder, Nupay Solutions Private Limited
- Mr. Shamil Vazir, former AVP– Alternate Channels & Digital Payments, Equitas Small Finance Bank
- Mr. Sanjiv Vanzara, Manager, Makarpura Industrial Estate Co Op Bank Ltd
- Mr. Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous
Debit done, credit none
Where’s the money gone?
Every common man’s nightmare is their money, although temporarily, ‘lost in transit’.
The goal of Immediate Payment Service (IMPS) is to allow real-time Intra & inter-bank transactions. For a layperson who is not acquainted with the nuts and bolts of the banking-fintech industry, having their money debited from an account without getting successfully credited could be anxiety-provoking, or can even have real implications. Here are a few scenarios that have occurred:
- “A transaction of INR 60,000 was ‘lost in transit. I keep excess money in Liquid/ Ultra Short-term funds and service my account when it’s required. I was doing the transfer to service the EMI which was due today. If I wouldn’t have checked, my EMI ECS would have bounced, would have got penalty charges and my CIBIL would have got updated”, said a community member (SCB → HDFC). They were asked to wait for 3-4 days for an action to be taken.
- A failed transaction was credited back to the sender’s account only after five days.
- Once it took 14 days for the credit, it was between HDFC and Syndicate bank. Transaction failure after trying to transfer from HDFC account to sub-account. Didn’t get any response from HDFC except for an initial message of 3-4 days, then went to the branch and gave a complaint, finally got the amount reversed back
While these FIAKS Community members were privileged enough to be well connected with authorities and can understand/resolve the issue, an average customer would have a very bad experience.
An important point to be cleared: Even in the case of delayed transactions, banks cannot enjoy the float:
- Float is, albeit briefly, money that is counted twice. It can be used by countries to manipulate the value of their currency, or by banks (if unregulated) to create large revenue.
- However, incomplete transactions are poured into a ‘suspense account’. Thus, floats cannot be exploited as a source of income.
- The National Payments Corporation of India (NPCI) has also framed regulations to deal with such incidents: In case of transfer via IMPS & UPI, where the bank account is debited but the beneficiary account is not credited, then auto-reversal must be done by the beneficiary bank by T+1. If not done, then a penalty of Rs 100 per day beyond T+1 is levied. For example, if there’s a delay of T+5 days, the beneficiary gets INR 500 irrespective of the principal amount.
Payment timeouts occur when the beneficiary doesn’t respond within 180 seconds. Settlement of such transactions can occur only once NPCI shares the report for reconciliation. In the case of IMPS in India, such reconciliation is a manual process and takes 1-2 days, and a couple more can be considered as a buffer. The best practice for banks is daily reconciliation.
Within the bank, a professional game of ‘Not it!’ is set in motion, and without incentive, action is seldom taken – complacency becomes the norm.
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