Tuesday, November 7, 2017

Union Bank of India launches “UNION TRADE-GST”

         Indian Banks as predicted have started to launch credit products around GST Returns.

        A few weeks back, Union Bank of India which has its Head Office in Mumbai unveiled “UNION TRADE-GST”

        In layman terms, “UNION TRADE-GST” is a working capital finance scheme aimed at SME entrepreneurs, both traders as well as manufacturers.

        Union Bank of India is the first Bank in India to launch a Credit Scheme based on GST Returns.
        Under “UNION TRADE-GST”,  working capital limit upto 30% of the turnover as per GST returns will be provided without insisting on assessment on other financial returns.

        Isn’t it simple n short? SMEs need not submit any other financial returns. Just file the GST Returns and be eligible for Bank Finance of upto  30%  under “UNION TRADE-GST”.

        This also reduces the manual intervention both at customer end as well as bank end.

The launch of this scheme will help the Bank to have synergy with the GST regime.

The large numbers of SME entrepreneurs have been included under the ambit of formal trade with implementation of GST. These SMEs are facing working capital crunch as in absence of proper past financials returns, they are unable to access the Bank’s credit.

The working capital assessment is based on the sales turnover, as indicated in balance sheet. Beside this, existing entrepreneurs under banking ambit are also facing credit crunch, as in GST regime the SMEs are entitled for input credit claim which is stretching their operating cycle.

Generally Banks are providing 20% of the sales turnover as working capital limit to a business entity, but to have ease in GST regime, under this scheme Union Bank of India is providing hassle free regular working capital limit upto 30% of the turnover as per GST returns without insisting on assessment on other financial returns.

The scheme will provide regular working capital limit above Rs 10.00 lacs upto Rs 200.00 lacs. The assessment of turnover & quantum of working capital is tailor-made to benefit especially the SME sector.

In furtherance to the Government of India initiatives in tax reform, compliance and digitalization, the Bank is offering POS machine with no Installation charges and waiver of annual maintenance charges for first year under the scheme.

Union Bank of India excepts this scheme to be a great enabler for an honest tax payer and incentivize the filing of GST return.

At the same time adequate financial support to such entrepreneurs through this unique scheme with inbuilt hassle free assessment based only on GST return will be easier for businesses to adopt.

Union Bank of India services its customers with through 4,295 branches spread over India and Hong Kong, DIFC (Dubai), Antwerp (Belgium) and Sydney (Australia).

To strengthen its Credit Department, Union Bank of India has kicked off a recruitment project for adding 200 Credit Officers to its HR Portfolio.

In the near future, trust Union Bank of SME Customers can avail the “UNION TRADE-GST” facilities through its Net Banking Portal.

Monday, October 2, 2017

NPCI to debut Proximity Payments for UPI Transactions

                   As on date, 55 Banks are Live on the NPCI UPI platform. Multiple approaches are in pipeline to enable the remaining Banks to onboard UPI platform.

         A large number of Banks live on NPCI UPI Platform will make it attractive for 3rd Party PSPs to roll out innovative UPI products.
         UPI transactions can be executed through the App, Website and QR as the payment address needs to be keyed in manually or scanned to successfully complete the Transaction.
         There have been a number of instances wherein the wrong VPA was keyed in, and the payment landed in a wrong bank account!!  It was a hectic job, to recall the funds credited to the wrong beneficiary.
The QR mode is superior over manual keying mode of the VPA, however in some cases, the QR Code not be scanned, and the VPA had to be keyed in manually.

To overcome the barriers associated with 01) Manual keying of VPA 02) Scanning VPA, NPCI has decided to go for additional payment channels under ‘Proximity Based Payments’.

The new ‘Proximity Based Payments’ channels in UPI will be live in the next 2 quarters.


The RFP focus is on UPI only. The Objective of this RFP: To make available method of payments other than text and QR to the end customers, which will expedite the payment process as well reduce complaints.

Remote and Proximity payments in UPI are currently done only by entering the VPA or scanning a QR within the App or a web site, which limits the possible methods in which payment can be made.

Banks have been implementing various proximity payment solutions in their existing non-UPI apps but have not been able to extend it to their UPI apps as there are no standardization sets and the current implementation limits them to work with their own PSP apps only.

NPCI has been getting requests from various proximity payment players on taking their products and having them embedded within NPCI library or environment and/or certified by NPCI to be implemented within BHIM App or other UPI Apps.
Hence, the above RFP is expected to fill the gap and A) reduce complaints associated with wrong payments B) increase transactions routed through UPI c) provide a platform for FinTech companies to be part of India’s digital transactions platform.

The main requirements for Proximity Payments are the presence two devices to complete the financial transaction.Proximity Payments are equal to ‘Card Present’, transactions.

In India, the NFC based payments did not take off to various reasons.

The best examples of Proximity Payments are Apple Pay, Samsung Pay, Android Pay

Through this RFP, NPCI intends to introduce the benefits of proximity payments to UPI transactions.
UPI has gained acceptance since its launch and more and more bank customers have understood the benefits of UPI.

Introducing Proximity Payments will add an additional security layer and reduce the last-mile friction.

The RFP states that the following:-

The Bidders need to develop a solution for proximity payments where the mechanism for transfer could be anyone of the below however not limited to the following.
1. Sound
2. Tone
3. NFC
5. UHF
6. Location based payments

The Bidder/solution provider would need to have a fair understanding on UPI and also would need to provide solutions which addresses the below concerns as well.

a)   Multiple VPAs configured.

b)   Storage of VPA

c)   Functioning of proximity payments in case the app is not launched & battery optimization.

d) Payments between un-intended devices.

Proximity payments via UPI will encourage merchants to adopt UPI quickly.

One of the major drawbacks in the present UPI process is that intentionally a wrong VPA may be provided by the store staff to the customer. This leads to payment to a person other than the merchant.
Through Proximity Payments, this can be avoided.

The ‘Collect’, option is not preferred for onsite payments, as the time taken to complete the transaction is more.

The same applies to ‘QR Code’ option too. In case, the store staff shows a wrong ‘QR Code’, to the customers, the payment will land in the wrong bank account.

Service Charges –

No charges for P2P transactions
Solution Provider may charge for P2M transactions

It is not for a single service provider to provide all the methods of proximity payments. NPCI may choose different vendors for each proximity payment channel.

5 Benefits of Proximity Payments being part of NPCI UPI

Benefit No 01) – Introduce the Joys of proximity payments to Digital India.
Benefit No 02) – Enhance the confidence levels of merchants to adopt UPI

Benefit No 03) – Reduce complaints associated with wrong payments, time-outs, etc

Benefit No 04) – Increase the number of UPI transactions

Benefit No 05) – Increase the turnover rates for P2M transactions

Benefit No 06) – Enable Banks to launch ‘Cash Management Products’ based on UPI

Benefit No 07) – Ensure quick adoption of proximity payments channels to other financial products

Google TeZ is a trailblazer in UPI based proximity payments.  

Good to read articles:
MoboMoney takes sound-based mobile payments to India

A new approach to digital payments - Ultracash


Monday, August 21, 2017

Shri Amitabh Bachchan is back with Kaun Banega Crorepati – Will he promote Safe ePayments?

           The 9th season of KBC will go live on 28th August 2017.

Shooting for the same has started few months back, with the momentum building up every day.

Contestants from India participate in the game show hosted by Shri Amitabh Bachchan, where they are asked questions based on their knowledge of general topics in order to win the grand prize.    KBC has completed 8 seasons with Shri Amitabh Bachchan playing host for majority of the seasons.

"KBC" first aired in 2000 and was hosted by Shri Amitabh Bachchan. It also marked his first appearance on Indian television.

The actor went on to host the second season of the show which went on air in 2005.

Season three was hosted by Shah Rukh Khan. Bachchan made a comeback in front of "computer ji" with the fourth season and has been serving as the anchor since then.

KBC is back after a two-year bread. SET has been able to lock in three sponsors even before the launch of the show. The channel has got on board Reliance Jio as the presenting sponsor while the series is being co-powered by Vivo Cameras and Mobile and Ching’s Secret.

The highlights of KBC from a Payment angle, is the writing of the PAYMENT ADVICE by Shri Amitabh Bachchan to the contestant after every round.

At this moment, it would be a great boost to Safe ePayments in India, if Shri Amitabh Bachchan can provide nuggets on Safe eTransactions. 

Tuesday, August 15, 2017

National Automated Clearing House – Banks are requested to adhere to the laid down rules

          NPCI through circular dt July 19, 2017 has strictly advised all member banks participating in NACH Mandate Management System to adhere to laid down procedures while processing mandates.

          Mandate Management System is in operation from 2013 and over the years, 2.71 crores mandates have been added to the MMS repository.

          It was brought to the notice of NPCI that some of the member banks had started formulating their own rules for acceptance of mandates. Such non-standardised processes by banks have led to confusion in the participants of NACH eco-system.  

          Hence, NPCI to restore order in the NACH eco-system has advised Banks to strictly follow the laid-down procedures while processing the mandates.

          However NPCI is open to suggestions and has advised member banks to put forth any process improvement points to the Steering committee. The process improvements points will be deliberated at the Steering committee and further action will be planned.

          Yes, non-members too can put their points to the Steering Committee. This is a welcome step by NPCI


Mandate Management System (MMS) is an essential part of National Automated Clearing House (NACH) service. The Mandates are necessary from the regulatory National Automated Clearing House perspective in order to process NACH transactions.
As a step towards streamlining the process and making it more customer and participant -friendly, it is proposed to implement the MMS, where mandate information is captured on a standard cheque like mandate form.


Sunday, July 23, 2017

Government of India Digital Transactions Target – 2,500 crores / 25 Billion

          Government of India under the leadership of Shri Narendra Modi has set a target of 2,500 crore digital transactions in the financial year 2017-2018.

          The number of 2,500 crore digital transactions or 25 billion digital transactions has been announced by Shri Arun Jaitely, Union Minister for Finance, Government of India, in Parliament on February 1, 2017 during the presentation of the Union Budget for 2017-18.

An announcement has been made to set up a Mission to reach 25 billion digital transactions for 2017-18 through Unified Payment Interface (UPI), Unstructured Supplementary Service Data (USSD), Aadhar Pay, Immediate Payment Service (IMPS) and debit cards.

Please note transactions through Cheques will not qualify under the 25 billion numbers.

The action from the Central Government side has picked up for ensuring that the target of 25 billion digital transactions is met by 31st March, 2018.

The government has split the number across 35 government ministries and 29 states and seven Union Territories.

In the next couple of months a real-time tracking portal will be rolled out. The primary objective of the portal is to remind the various stake-holders the road ahead.

The ministry of road transport and highways and the department of telecommunications (DoT) will be chasing the highest targets for electronic payments in the government's plan to turn India into a less-cash economy.

Ministries have been chosen depending on their ability to carry out digital transactions through their physical footprint. “For the petroleum ministry, the point of interface will be the petrol pump network; for human resource development it is the educational institutes, and for railways, it will be the stations or the booking counters," said the official.

Image courtesy - Economic Times

While the ministry of road transport and highways and the department of telecommunications have been given targets upwards of 5 billion, they are followed by the ministries of railways and petroleum and natural gas, which must aim for 2.82 billion and 2.29 billion transactions, respectively.

Now the targets have been distributed, the respective ministries and states will unveil detailed road-maps.

Among states, Maharashtra and Uttar Pradesh have the highest targets (above 3 billion) followed by Tamil Nadu, West Bengal and Gujarat with numbers in the 1.5-2 billion range.


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