Bank Money

  • Baked by Fiat money
  • Easy to transfer
  • Exact amount can be transferred
  • Legally recognized for high value payment
Bank Money

Negotiable Instruments Act, 1881

Bill of Exchange

  • 3 parties: future dated promise for payment
  • Requires ‘ stamping’


  • 3 parties: drawer, Drawee (Bank), Payee (recipient)
  • .No ‘stamping’, but sign req, may be crossed
  • Types depends on date
    1. Stale – lapsed for not withdrawn in 3 months
    2. Postdated – After a specific date
    3. Before a specific date
  • Types depends on crossing
    1. Open cheques or travel cheques
    2. Crossing – no cash, deposited in account

Promissory Notes

  • I promise to pay bearer the sum of – 2 parties
  • Not fiat-money though.

By usage or custom

  • Hundis, Share warrants, Dividend warrants, Bankers draft, Circular notes, Bearer debentures, Railway receipts, Delivery orders.
Bank Money

Core Banking

  • centralized system established by a bank which allows its customers to conduct their business irrespective of the bank’s branch.
  • It removes the impediments of geo-specific transactions.
Bank Money
  • Core banking solution for RBI
Bank Money
Bank Money

Digital Payment

Real Time

  • IMPS
  • RTGS

Delayed Settlement

  • NEFT
  • NECS
  • NACH
  • Card System

Immediate Payment Service (IMPS)

  • It is an instant payment inter-bank electronic funds transfer system in India.
  • It is available 24/7 throughout the year including bank holidays.
  • It is managed by the National Payments Corporation of India (NPCI)
  • In 2010, its built upon the existing National Financial Switch network
  • Max Amount 10k for mobile and 2 lac for IFSC

Real-time gross settlement (RTGS)

  • It transfers money or securities from one bank to another
  • Its a “real time” and a “gross” basis system
  • Operated by RBI
  • Available in weekdays only
  • Min amount – 2 lac, Max amount – 500 Cr.

National Electronic Funds Transfer (NEFT)

  • It is an electronic funds transfer system
  • Maintained by RBI
  • Started in November 2005
  • Setup was established and maintained by Institute for Development and Research in Banking Technology (IDRBT).
  • NEFT settles fund transfers in half-hourly batches
  • It has 23 settlements windows between 8:00 AM and 7:30 PM
  • It works on week days and the 1st, 3rd and 5th Saturday
  • Transfers initiated outside this time period are settled at the next available window
  • Max amount 10 lac

Indian Financial System Code (IFS Code or IFSC)

  • It is an alphanumeric code that facilitates electronic funds transfer in India.
  • A code uniquely identifies each bank branch participating in the two main Payment and settlement systems RTGS and NEFT
  • It is an 11-character code
  • First 4 alphabetic characters representing the bank name
  • Last 6 characters representing the branch
  • 5th character is 0 (zero) and reserved for future use
Any amt
2 lac
10 lac
500 Cr.
10 k mobile 2 lac IFSC
Maintain by
Electronic Clearing Service
  • payments are made on a timely-basis like monthly, a year, half a year, etc.
  • It used to pay monthly bill, salaries, dividends or commissions, Direct benefit transfer
  • Over time it has become one of the most convenient methods of making large payments
  • Maintained by RBI in national level


  • Maintain by NPCI
  • Same work as ECS

Classification of Digital Payment Service Provider

  • Cross Border Money Transfer – Western Union and Moneygram
  • Instant Money Transfer Outbound – Empays
  • Financial Market Infrastructure – Clearing Corp. of India
  • Retail payments – NPCI
  • Card Payment network – Visa, Mastercard
  • M-walet or PPI – paytm, Phonepe
  • ATM

Automated teller machine (ATM)

  • ATM works through National Financial Switch (NFS).
  • All the transaction use Core Banking Solution
  • HSBC 1st installed ATM in india
  • 3 types ATM
    1. Banks – own by banks
    2. Brown Label – outsourced by banks
    3. White Label – Non Banks by the help of sponsor bank
Card Payment type
  • Debit Card
  • Credit Card
  • Prepaid card – Need to recharge
Card Technology
  • Magnetic – Data on magnetic strip
  • Chip Based – Data on chip
  • Contactless
    • RFID – Radio Frequency Identification Ex-Fastag
    • NFC – near field communication tech 

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