eDebit Plus – a value added technology solution, automating the ECS clearance process in branch banking!
How eDebit Plus help banks in Debit Clearance Process.
ECS Debit transaction can be initiated by any institution (called ECS Debit User) which has to receive / collect amounts towards telephone, electricity, tax collections, loan installment repayments, periodic investments in mutual funds, etc. It is a Scheme under which an account holder with a bank branch can authorize an ECS User to recover an amount at a prescribed frequency by raising a debit to his / her bank account.
ECS Debit User institution has to first register with a ECS Centre. The User institution has to also obtain the authorization for debiting the account from its customers and their bank account particulars prior to participation in the ECS Debit scheme. The user institutions collect the details by way of an authorization (known as mandate) from the customer with due acknowledgement by the customer’s bank branch. A copy of the mandate should be available on record with the destination bank branch where the customer has a bank account.
The ECS Debit User intending to collect receivables through ECS Debit has to submit details of the customers (like name, bank / branch / account number of the customer, MICR code of the destination bank branch, etc.), date on which the customer’s account is to be debited, etc., in a specified format (called the input file) through its sponsor bank to the ECS Centre
The bank managing the ECS Centre then passes on the debits to the destination banks for onward debit to the customer’s account with the destination bank branch and credits the sponsor bank’s account for onward credit to the User institution. Destination bank branches will treat the electronic instructions received from the ECS Centre on par with the physical cheques and accordingly debit the customer accounts maintained with them. All the unprocessed debits are returned to the sponsor bank through the ECS Centre (for onward return to the User Institution) within the time frame specified.
eDebit Plus, a client server application, will be deployed at destination bank branch. The application will be hosted in bank’s network and will be connected with CBS through a web service. Upon receipt of input file from ECS Center by destination bank branch, in a stipulated format, the same will be uploaded to eDebit Plus. The application has an upload file menu. The input file is uploaded through this upload file menu. The input file will contain the customer information like Name, bank, branch, account number of the customer, MICR code of the destination bank branch, etc. The application has a report window having categories like matched list, pending list, derived list, manually corrected cases, etc. In matched list provides the list of perfectly matched accounts in CBS with input file. The remaining will come in the pending list. With the help of information derived from CBS some of the accounts get matched by mapping the CBS and BBS account number. This is a onetime activity and in the next upload file, if the same case comes for presentation it will appear in the derived list. Even after correcting the BBS vs CBS account number there will be some rejections in upload which will come in manually derived list. Here, the admin user can clear with the help of the details from concerned department
Using the primary key, which is the Account Number of the customer, eDebit Plus will check in the CBS, for the account balance in respective account of the customer and status of account periodically. The frequency of periodic checking can be configured in the Application, so that the system will check the customer account for enough balance and status on the set frequency till the clearance cut off time set. A final file having ECS debit processed transactions will be provided in a specified format (TTUM), in order to upload to branch bank’s CBS. A file uploaded to CBS doesn’t mean that all the records are cleared in one attempt. Files not cleared due to insufficient balance will again send for uploading with next batch. A reference number will be generated from CBS for that particular batch. With this reference number, user can see the status of each debit -failed or success.
eDebit Plus will generate the status file which will have the Cleared, Stop payment and Bounced (with reasons including Closed and Frozen) status mentioned. This report will be generated in a stipulated RBI format, to be sent to ECS center within the specified time (TAT)
Lotex’s eDebit Plus utility technology is a user friendly application which addresses a series of challenges being faced by banks today in ECS transaction processing.
- It address the concerns around complexity of highly disparate, customized IT environments
- Improve inefficient processes without incurring large upfront transformational costs. Huge CBS customization cost can be avoided
- Compliance with standardized processes, regional statutory norms and internal controls
Since the Application is enabled with a scheduler to check the customer account balance in CBS in a frequency set by the user, it will eliminate the opportunity to report an ECS presented as ‘bounced’ For example, the user has set the frequency in eDebit Plus to check the customer balance in CBS as 5 minutes and check should be performed till the clearance cut off time of 2:00 PM. In a few initial checking, an ECS presentation found to be not cleared due to insufficient fund will not get reported as ‘bounced’ till the last check before clearance cut off time. This will facilitate a window time for the customer to deposit fund to his account before the clearance cut off time, wherein he will not be penalized for the bounce as well.
There is also an option available in eDebit Plus to flag the VIP customers. A master is defined to flag VIP customer. Upon checking the account balance, if the transaction is found to be unclear, then an e-mail will get triggered to his bank branch concerned person’s e-mail ID, intimating the account number and non-clearance status with reason during the window period. Branch bank can further call up their customer and inform the status to its customer and become proactive in getting the funds deposited. System will also trigger an SMS directly to the customer with the non clearance status and requesting to deposit fund before the clearance cut off time. User can configure the e-mail IDs and mobile numbers in the system in order to facilitate this feature
In eDebit Plus, there is a provision for keeping a ceiling limit for clearing the utility payments, where the amount will be variable period to period. For example, telephone bills, electricity bills, etc. Upon exceeding the ceiling limit, an intimation e-mail will get triggered to his bank branch concerned person’s e-mail ID, intimating the account number and ECS debit amount and cap limit. The branch bank further takes the confirmation from the customer for clearing the amount in excess of cap limit. If the customer doesn’t permits for the clearance, then the debit will not be processed and a ‘stop payment’ flag can be marked in the system
Upon checking the customer accounts in CBS, as part of the clearance process, and found to be in the status of ‘Account closed’ or ‘Account frozen’ status, the status can be immediately flagged in eDebit Plus application. This flagging process will be an activity to be done once for all for every account, found as ‘Account closed’ or ‘Account Frozen’. eDebit Plus will automatically recognize the closed and frozen accounts from the next day debit clearance process onwards and will not be sent to CBS and will remain as unprocessed debit. Upon lifting the freeze on a customer account, the same should be intimated to the administrator to un-flag the ‘Account Frozen’ status, so that the debit can be processed.
Customer account swapping – for the clearance of debit for the customers having multiple bank accounts in the same bank. For example, a customer having two savings accounts in the same bank and there is a standing instruction from customer to use any of these accounts for processing ECS debit. This situation arises normally when there are insufficient funds in one of the accounts or in closed or frozen status. In eDebit Plus, there is an option to map the respective multiple accounts of the same customer, based on the standing instruction received from him/her, in order to check all the mapped account to enable the clearance of debit. With this, if the system is finding the first account having insufficient funds, it will automatically go to the subsequent accounts mapped. Customer is benefitted in this case without any bounce opportunity
Application eDebit Plus has the facility to flag ‘stop payment’ instruction received from the customer. This feature is more attractive when it comes to stop payment of ECS, where multiple ECS mandates are there from same customer from same drawee bank. In eDebit Plus there is a master (Exception Manager) to define and process multiple ECS from same bank or different banks, and there for can handle single stop payment mandate. For example, if a customer having three ECS, like mobile phone bill payment, electricity bill payment and loan EMI payment. The instruction received from the customer is to stop clearance/payment of mobile bill payment ONLY and, the mobile bill and the electricity bill are to be cleared to same bank. In such cases, in today’s scenario, some of the CBS doesn’t support such request, where in one mandate will be stopped and rest of the mandates will go for debit clearance if the payee bank is same for all the mandates. This can be prevented through eDebit Plus application, by the admin user with the help of Exception manager, by flagging in the application as ‘stop payment’ for the mobile bill alone, which will ensure that only the ECS for the mobile bill is stopped and other two mandates will get processed.
Technical rejections of debits due to account number mismatch between BBS (Branch Banking System) Vs CBS can be eliminated. There could be possibility that the customer’s account number given for ECS clearance will be different from the account number being maintained in the Core Banking System, for the same customer, due to the CBS not extended to their branches and branches maintaining their own independent account series for their customers. Any ECS debits with BBS account number, in the input file received from ECS center will get rejected from the CBS. The administrator user of eDebit Plus can take such rejected accounts and assign a new logical number linking the customer’s BBS account, branch bank code and MICR. This is a kind of rectification process to be carried out for the first time by the administrator for such customer accounts, as a one-time process, in eDebit Plus application. Subsequently, mapping of the new logical number assigned to the account number defined in the CBS will be done in eDebit Plus. Any subsequent debits coming for customers with BBS number in the input file, will not get rejected from CBS. In some cases customer withdraws money or customer may close the account before uploading the TTUM file on the same of ECS presentation. In that cases if the ECS gets bounced, the dispute related to that which may come can be avoided. Every time a file is uploaded to CBS, each time the application captures the status of each account. So, rejection report will be having the exact cause of rejection. Thus the final status report to RBI also will be having the exact reasons for rejections.
eDebit Plus has strong search engines in all the pages of the application, where the information with regard to customers, mandate, past transactions can be retrieved upon the request. Hence the application helps the bank users to handle some of the customer queries too, on a need basis