JAIIB RBWM Paper-4 Module-B Unit 7: Remittance Products

JAIIB Paper 4 (RBWM) Module B Unit 7: Remittance Products (New Syllabus) 

IIBF has released the New Syllabus Exam Pattern for JAIIB Exam 2023. Following the format of the current exam, JAIIB 2023 will have now four papers. The JAIIB Paper 4 (Retail Banking and Wealth Management) includes an important topic called “ Remittance Products”. Every candidate who are appearing for the JAIIB Certification Examination 2023 must understand each unit included in the syllabus. In this article, we are going to cover all the necessary details of JAIIB Paper 4 (RBWM) Module B Retail Products and Recovery Unit 7: Remittance Products Aspirants must go through this article to better understand the topic, Important Retail Asset products and practice using our Online Mock Test Series to strengthen their knowledge of Banker Customer Relationship. Unit 7: Remittance Products

Remittance Products

The two most traditional forms of making remittances used by  the banks for making local payments and for remitting funds outstation are:

  • Banker’s Cheque: The Bank Cheques are issued for making local payments on behalf of customers. All local payments by branches should be made by means of Banker’s Cheques on account of purchase of stationery, furniture, sundry articles, telex/telephone/electricity bills, etc.,
  • Demand Draft: A bank draft is a negotiable instrument, drawn by one branch of a bank upon another instructing the latter to pay a certain sum of money only or to the order of a certain person. However, by prior arrangement, the paying bank may be a different bank also. A bank draft is a bill of exchange but is not a cheque as such.

Electronic Payment Systems

RBI set in motion necessary regulation and payment for electronic funds transfer. There are two sets of access criteria for Banks:

Centralised Payment Systems (CPC)

  • Real Time Gross Settlement (RTGC)
  • National Electronic Fund Transfer (NEET)
  • National Electronic Clearing Service (NECS)

Decentralised Payment Systems (DPS)

  • Clearing House at MICR centres
  • Electronic Clearing Service (ECS)

Note: Payment and Settlement Systems Act 2007.

Real-Time Gross Settlement (RTGS)

  • RTGS stands for Real-Time Gross Settlement system which can be described as a transfer system wherein the transfer of money takes place from one bank to any other bank on a “real-time” and a gross basis.
  • ‘Real Time’ means the processing of instructions at the time they are received and ‘Gross Settlement’ means that the settlement of funds transfer instructions occurs on a one-to-one basis.
  • In RTGS, the transactions are processed continuously on a one-to-one basis 24×7, 365 days. RGTS is most used for high-value transactions and is managed by the Reserve Bank of India. In India, there are more than 110,000 RTGS enabled bank branches.


  • It is a safe mode of money transfer with no amount cap
  • It is a real-time fund transfer system
  • No additional charges
  • Available 24×7 from Monday to Sunday
  • Customers can initiate the remittances from his / her home or place of work using internet banking
  • Transaction through RTGS has legal backing


  • Inward transactions – Free, no charge to be levied
  • RBI has directed all the banks to not charge any service fee on transfer of funds through RTGS initiated online via internet banking and/or mobile banking
  • Outward transactions – ₹2,00,000/- to 5,00,000/-: not exceeding ₹30/-
  • Above ₹5,00,000/- not exceeding ₹55/-


  • The minimum amount to be transferred via RTGS is ₹2,00,000/- and there is no maximum RTGS limit as RTGS service is meant for high-value transactions.

National Electronic Fund Transfer (NEFT)

National Electronic Fund Transfer (NEFT) is a nation-wide payments system that allows the transfer of funds from one bank’s account to another. With an increased focus on online banking, NEFT has become one of the most popular ways of transferring funds. Since it can electronically transfer funds from any bank branch to any individual, it has eliminated the need to visit a bank branch for transfer of funds.

NEFT Timings 

  • NEFT works on a round-the-clock basis i.e. 24×7, 365 days. Earlier, NEFT transactions were available from 8:00 AM to 6:30 PM from Monday to Friday only. However, RBI has regularised that NEFT transactions will be available 24*7 on all days of the year, including holidays.
  • Also, after usual banking hours, NEFT transactions are expected to be automated transactions initiated using ‘Straight Through Processing (STP)’ modes by the banks.

NEFT Transfer Limit

  • There is no upper or lower limit on the amount that can be transferred via NEF You can begin with an NEFT transfer with Rs. 1. There is only a single limitation on the amount of one-time transaction through cash mode, which is Rs. 50,000.
  • Depending on each bank, timings and settlement period for each transaction could be different. Ordinarily, if funds are transferred within the same bank account, one can expect to receive them within a matter of a few seconds. However, when such transfers take place between different banks, the settlement time could be longer.

Charges applicable to NEFT

Fund transfer charges applicable to remitter are: (GST excluded)

  • 2.50 on transfers up to Rs. 10,000
  • 5 on the transfer of Rs. 10,000 to Rs. 1 Lakh
  • 15 on the transfer of Rs. 1 Lakh to Rs. 2 Lakh
  • 25 on the transfer of more than Rs. 2 Lakh


Given below is a detailed comparison between NEFT, UPI (Unified Payments Interface) and RTGS:

Parameters NEFT UPI RTGS
Minimum Transfer Value Rs. 1 Rs. 1 Rs. 2 Lakh
Payment Option Online and Offline Online Online and Offline
Maximum Transfer Value No limit Rs. 1 Lakh No limit
Transfer Time Min. 2 hours Immediate Immediate
Service Timing Available 24*7 Available 24*7 Available 24*7
Inward Transaction Charges No Charges No Charges No Charges
Details Required Account No. and IFSC Code VPA of beneficiary and MPIN Account No. and IFSC Code
Beneficiary Registration Yes No Yes


National Electronic Clearing Service (NECS)

Payment and settlement systems in India are used for financial transactions. They are covered by the Payment and Settlement Systems Act, 2007 (PSS Act), legislated in December 2007 and regulated by the Reserve Bank of India and the Board for Regulation and Supervision of Payment and Settlement Systems.

Electronic Clearing Service (ECS Credit)

Known as “Credit-push” facility or one-to-many facility this method is used mainly for large-value or bulk payments where the receiver’s account is credited with the payment from the institution making the payment. Such payments are made on a timely-basis like a year, half a year, etc. and used to pay salaries, dividends or commissions. Over time it has become one of the most convenient methods of making large payments.

Electronic Clearing Services (ECS Debit)

Known as many-to-one or “debit-pull” facility this method is used mainly for small value payments from consumers/ individuals to big organizations or companies. It eliminates the need for paper and instead makes the payment through banks/corporates or government departments. It facilitates individual payments like telephone bills, electricity bills, online and card payments and insurance payments. Though easy, this method lacks popularity because consumer awareness is important.

Electronic Clearing Services (ECS)

ECS is an electronic mode of payment / receipt for transactions that are repetitive and periodic in nature. ECS is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax collections, loan instalment repayments, periodic investments in mutual funds, insurance premium etc. Essentially, ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa. ECS includes transactions processed under National Automated Clearing House (NACH) operated by National Payments Corporation of India (NPCI).

Categories of ECS

  • Local ECS – this is operating at 81 centres / locations across the country. At each of these ECS centres, the branch coverage is restricted to the geographical coverage of the clearing house, generally covering one city and/or satellite towns and suburbs adjoining the city.
  • Regional ECS – this is operating at 9 centres / locations at various parts of the country. RECS facilitates the coverage all core-banking-enabled branches in a State or group of States and can be used by institutions desirous of reaching beneficiaries within the State / group of States.
  • National ECS – this is the centralized version of ECS Credit which was launched in October 2008. The Scheme is operated at Mumbai and facilitates the coverage of all core-banking enabled branches located anywhere in the country. This system too takes advantage of the core banking system in banks.

National Automated Clearing House (Nach) System

National Automated Clearing House (NACH) has taken place of ECS on May 1, 2016.  National Payments Corporation of India (NPCI) has implemented “National Automated Clearing House (NACH)” for Banks, Financial Institutions, Corporate and Government, a web based  solution to facilitate interbank, high volume, electronic transactions which are repetitive and  periodic in nature. NACH System can be used for making bulk transactions towards distribution of subsidies, dividends, interest, salary, pension, etc., and also for bulk transactions towards  collection of payments pertaining to telephone, electricity, water, loans, investments in mutual  funds, insurance premium, etc.

Benefits to customer: 

  • No need for a manual process in this case.
  • The process is easier and faster than ECS.
  • No need to keep track of due dates for payments such as utility bills, phone and credit card bills, interest payments, and a variety of other payments because they are all handled automatically through registered banks.

Benefits to Organization: 

  • No dependence on cheques or clearance.
  • Payments such as scholarships, allowances, and subsidies take less time to process.
  • Salary, dividends, and pension payments are all made on scheduled date.
  • Much improved customer service and bill payment.

Benefits to Bank: 

  • Better customer service, faster payment processing, and stronger ties with associated organisations.
  • No need to rely on checks or paperwork.
  • Registration, payment, and collection of EMI, loans, and advances are all done in a hassle free manner.
  • Because no manual processes are involved, there are fewer errors and a smoother workflow than before.
  • Transactions that are quick and do not take a long time to complete.

Comparison between ECS and NACH:

  • NACH is much faster with same day presentation, settlement and returns processing, compared to the ECS system, where the entire process spreads over 3-4 days.
  • NACH has a well-defined Dispute Management System, to raise and solves issues, which was absent in the case of ECS.
  • NACH also has a robust Mandate Management System, with standardised mandate format and verification workflow.
  • NACH introduced the Unique Mandate Reference Number to clearly identify each mandate with reference to a customer.

Aadhaar Enabled Payment System

Aadhar Enabled Payment System (AePS) is a bank led model which allows online interoperable financial transaction at PoS (Point of Sale/ Micro ATM) through the Business Correspondent  (BC)/Bank Mitra of any bank using the Aadhaar authentication. This needs a KYC compliant bank account in which Aadhaar has been linked. It allows online interoperable financial inclusion transaction at PoS (Micro ATM) through the Business correspondent of any bank using the  Aadhaar authentication.

Services Offered by AePS 

  • Cash Withdrawal
  • Cash Deposit
  • Balance Enquiry
  • Aadhaar to Aadhaar Fund Transfer
  • Mini Statement

Bharat Bill Payment System (BBPS)

Bharat BillPay

Bharat BillPay has multiple modes of payment and provides instant confirmation of payment via an SMS or receipt. It offers myriad Bill collection categories like electricity, telecom, DTH, gas, water bills, etc. and also other repetitive payments like insurance premium, mutual funds, school fees, institution fees, credit cards, fastag recharge, local taxes, housing society payments, etc. at one single window. An effective mechanism for handling consumer complaints has also been put in place to support consumer regarding any Bill related problems in Bharat BillPay

Different Payment Channels

Bharat BillPay transaction can be initiated through multiple payment channels like Internet, Internet Banking, Mobile, Mobile-Banking, Mobile Wallets, Kiosk, ATM, Bank Branch, Agents and Business Correspondents, by just looking at the Bharat BillPay logo

Different Payment Modes

Bharat BillPay facilitates myriad payment modes enabling Bill payments. The payment modes options facilitated under the ecosystem are Cards (Credit, Debit and Prepaid), NEFT Internet Banking, UPI, Wallets, Aadhar based Payments and Cash.

Key Features

Interoperable Bharat BillPay is an integrated ecosystem connecting banks and non-banks in bills aggregation business, Billers, payment service providers and retail Bill outlets.
Accessible Facilitate seamless payment of bills through any channel : Digital and physical.
Cost-effective Most cost-effective for entire ecosystem – Flat fee charge vs current ad valorem.
Integration BBPOUs will have to connect only to BBPCU to get access to all the billers. Utility companies just need to connect to maximum two BBPOUs to enable all customers to pay bills.
Complaint Management Standardised system to handle customer grievances for both ON-US and OFF-US transactions.
Dispute Management Facilitate BBPOU’s to raise and resolve disputes relating to transactions that have passed through the Bharat BillPay ecosystem.
Clearing & Settlement Multiple Clearing & Guaranteed Settlements between different parties, standardised TAT.
Standardisation Standardisation of processes for entire Bharat BillPay ecosystem.
Brand Connect Single and trusted brand connect and Bharat BillPay Assurance.

 Key Participants

About Bharat Bill Payment Central Unit (BBPCU)

National Payments Corporation of India (NPCI) has been authorized by RBI as the Bharat Bill Payment Central Unit (BBPCU) and is responsible for setting business standards, rules and procedures for technical and business requirements for all participants. The BBPCU undertakes clearing and settlement activities related to transactions routed through Bharat BillPay.

About Bharat Bill Payment Operating Unit (BBPOU)
  • Bharat Bill Payment Operating Unit aka BBPOU is the entity that is authorized by Reserve Bank of India. It can be a Bank or a Non-Bank. BBPOU may choose to integrate either with the customers, (COU: Customer OU) or with the billers (Biller OU) or may wish to participate as both – which means such BBPOU will be integrated with customers as well as billers.
  • Going forward, only authorised BBPOU – both banks and non-banks authorised by RBI – can handle payment and aggregation of payment services relating to bills under the scope of Bharat BillPay.
Agent Institutions
  • Eligible Entities who wish to offer or those who are currently in Bill payment, collection and aggregation business, would operate under a COU (Customer BBPOU).
  • Customer BBPOU will on-board Agent institutions which may further on-board agents and/ or set up customer service points in various regions and locations.

Agents are the customer touch points and service points in the Bharat BillPay ecosystem available in the form of agent outlets, Business Correspondent outlets, Bank branches, collection centres, retail outlets.

Biller/Utility Company

Service providers, who shall receive payments from customers for services rendered. By participating in the Bharat BillPay scheme, the biller will be able to receive payments from third party channels for the services provided to the customer. A biller may tie up with up to two BBPOUs to access the entire universe of its consumers and all payment channels.

JAIIB Paper-4 Module-B Unit-7 Remittance Products (RBWM) PDF

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