To ensure the safety and security of the payment systems, the Reserve Bank of India (RBI) has proposed that all payment transactions of INR 10 million and above will have to be made through electronic mode with effect from 1st April 2008.
These transactions could be carries out between RBI regulated entities including banks, primary dealers and Non Banking Financial Company's (NBFCs) as well as in RBI regulated markets like money market, government securities market and foreign exchange market. This mode of transaction will not only reduce the risk from moving large paper based value retail payments to safer electronic modes, but will also bring greater efficiency and customer convenience to the payment systems. An internal working group which examined various issues related to electronic systems recommended a phased approach in the transformation of the present paper based systems to electronic systems.
Earlier, the RBI has introduced three modes of electronic payments which include Real Time gross Settlement (RTGS) system, National Electronic Fund Transfer (NEFT) system and Electronic Clearing Service (ECS).