Debit Cards are electronic plastic cards that are used as a substitute for cash.

Bank Debit
Cards help reduce the need for carrying cash and cheques. Debit cards are directly linked to a
cardholder’s bank account. Whenever a card holder withdraws money from an ATM or uses
the debit card for making payments, his/her account balance is automatically reduced.

History of Debit Cards

Two decades ago, the number of debit cards in circulation was approximately 19 million.
This figure is projected to cross 34.4 million by 2016. The history of debit cards shows that
they have largely been used to pay for food and drinks.

THE CARD ISSUERS PREFER TO RAISE THE DEBIT CARDS USAGE AMONG THE
CUSTOMERS. THEREFORE TO ATTRACT CUSTOMERS TO INCREASE
TRANSACTIONS MADE THROUGH DEBIT CARDS, MANY BANKS OFFERING
BENEFITS OF REWARD POINTS, CASH BACK, DISCOUNTS AND OTHER
INCENTIVES.

Debit Cards vs. Credit Cards: Similarities and Differences

The same financial institutions offer both debit cards and credit cards. Both cards offer special
rewards, such as points and cash back on purchases made through the card. Debit cards and
credit cards can be used to make online payments with the help of the Pin number assigned to
them. They can be used to withdraw money from ATMs, depending on the cash limit
available on these cards.
Debit cards and credit cards differ in some significant ways. In the case of a credit card, the
issuer offers credit and overdraft facilities. This facility is not available with a debit card,
which will only debit payments from existing and available funds within the cardholders
account. A credit cardholder therefore has a monthly bill to pay in every month that the card
is used. If they don’t pay that bill, high interest charges are applied. A debit card holder is free
from the hassle of paying those bills, and from the risk of building up large debts to credit
card companies.

Bank Debit Cards: Types

Debit cards are offered by banks in the following forms:
• Online Card

• Prepaid Card

• Offline Card

• Electronic Purse Debit Card

• Debit Cards for telephone, mail and internet transactions.

Debit Cards: Benefits

Debit cards offer the following benefits:
 • They help people to be disciplined financially, since one cannot splurge
with the limited amount of funds deposited for the card.

• A person with poor credit can obtain a debit card without too much trouble.

• Debit cards can be used to make online purchases and payments.

• They provide freedom from carrying cash and checks while traveling,
thereby offering more safety.

• Debit cards do not charge high interest rates or fees on card transactions.

Disadvantages of Debit Cards

Debit cards, however, do entail certain limitations, such as:
• Debit cards come with lesser fraud protection

facilities than credit cards.

• Some transactions cannot be carried out with a debit card, such as renting
a car in a foreign country.

• You can only use as many funds as you have available. Therefore, in case
of an emergencies where credit is urgently needed beyond your account
balance, a debit card will not be enough to meet your needs.

INDIA:
The debit card has limited popularity in India as the merchant is charged for each transaction.
The debit card therefore is mostly used for ATM transactions. Most of the banks issue VISA
debit cards, while some banks (like SBI and Citibank India) issue Maestro cards. The debit
card transactions are routed through the VISA or MasterCard networks rather than directly
via the issuing bank.
The National Payments Corporation of India (NPCI) is introducing a payment network and
debit card dubbed 'india card'. The Reserve Bank of India is expecting this system will
gradualy replace the overseas run networks from Visa and MaterCard for Indian ATM, debit
and credit card services.
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Q1. What is RTGS System?

Ans. The acronym 'RTGS' stands for Real Time Gross Settlement. RTGS system is a funds
transfer mechanism where transfer of money takes place from one bank to another on a 'real
time' and on 'gross' basis. This is the fastest possible money transfer system through the
banking channel. Settlement in 'real time' means payment transaction is not subjected to any
waiting period. The transactions are settled as soon as they are processed. 'Gross settlement'
means the transaction is settled on one to one basis without bunching with any other
transaction. Considering that money transfer takes place in the books of the Reserve Bank of
India, the payment is taken as final and irrevocable.
Q2. How RTGS is different from Electronic Fund Transfer System (EFT) or National
Electronics Funds Transfer System (NEFT)?
Ans .EFT and NEFT are electronic fund transfer modes that operate on a deferred net
settlement (DNS) basis which settles transactions in batches. In DNS, the settlement takes
place at a particular point of time. All transactions are held up till that time. For example,
NEFT settlement takes place 6 times a day during the week days (9.00 am, 11.00 am, 12.00
noon. 13.00 hours, 15.00 hours and 17.00 hours) and 3 times during Saturdays (9.00 am,
11.00 am and 12.00 noon). Any transaction initiated after a designated settlement time would
have to wait till the next designated settlement time. Contrary to this, in RTGS, transactions
are processed continuously throughout the RTGS business hours.
Q3. Is there any minimum / maximum amount stipulation for RTGS transactions?
Ans. The RTGS system is primarily for large value transactions. The minimum amount to be
remitted through RTGS is Rs.1 lakh. There is no upper ceiling for RTGS transactions. No
minimum or maximum stipulation has been fixed for EFT and NEFT transactions.
Q4. What is the time taken for effecting funds transfer from one account to another
under RTGS?
Ans. Under normal circumstances the beneficiary branches are expected to receive the funds
in real time as soon as funds are transferred by the remitting bank. The beneficiary bank has
to credit the beneficiary's account within two hours of receiving the funds transfer message.
Q5. Would the remitting customer receive an acknowledgement of money credited to
the beneficiary's account?
Ans The remitting bank receives a message from the Reserve Bank that money has been
credited to the receiving bank. Based on this the remitting bank can advise the remitting
customer that money has been delivered to the receiving bank.
Q6. Would the remitting customer get back the money if it is not credited to the
beneficiary's account? When?
Ans. Yes. It is expected that the receiving bank will credit the account of the beneficiary
instantly. If the money cannot be credited for any reason, the receiving bank would have to
return the money to the remitting bank within 2 hours. Once the money is received back by
the remitting bank, the original debit entry in the customer's account is reversed.
Q7. Till what time RTGS service window is available?
Ans. The RTGS service window for customer's transactions is available from 9.00 hours to
16.30 hours on week days and from 9.00 hours to 12.30 noon on Saturdays for settlement at
the RBI end. However, the timings that the banks follow may vary depending on the
customer timings of the bank branches.
Q8. What about Processing Charges/Service Charges for RTGS transactions?
Ans With a view to rationalize the service charges levied by banks for offering various
electronic products, a broad framework has been mandated as under:
a) Inward transactions – Free, no charge to be levied

b) Outward transactions –
Rs. 1 lakh to Rs. 5 lakh - not exceeding Rs. 25 per transaction.
Rs. 5 lakh and above – not exceeding Rs. 50 per transaction.
Q9. What is the essential information that the remitting customer would have to furnish
to a bank for the remittance to be effected?
Ans. The remitting customer has to furnish the following information to a bank for effecting a
RTGS remittance:
1. Amount to be remitted
2. His account number which is to be debited
3. Name of the beneficiary bank
4. Name of the beneficiary customer
5. Account number of the beneficiary customer
6. Sender to receiver information, if any
7. The IFSC Number of the receiving branch
Q10. How would one know the IFSC code of the receiving branch?
Ans. The beneficiary customer can obtain the IFSC code from his branch. The IFSC code is
also available in the cheque leaf. This code number and bank branch details can be
communicated by the beneficiary to the remitting customer.
Q11. Do all bank branches in India provide RTGS service?
Ans. No, all the bank branches in India are not RTGS enabled. As on December 31, 2008
more than 52,000 bank branches are RTGS enabled. The list of such branches is available on
RBI website www.rbi.org.in/Scripts/Bs_viewRTGS.aspx
Q12. Is there any way that a remitting customer can track the remittance transaction?
Ans It would depend on the arrangement between the remitting customer and the remitting
bank. Some banks with internet banking facility provide this service. Once the funds are
credited to the account of the beneficiary bank, the remitting customer gets a confirmation
from his bank either by an e-mail or by a short message on the mobile.
Q13. Whom do I can contact, in case of non-credit or delay in credit to the beneficiary
account?
Ans Contact your bank / branch. If the issue is not resolved satisfactorily, the Customer
Service Department of RBI may be contacted at -
The Chief General Manager,
Reserve Bank of India,
Customer Service Department,
1st Floor, Amar Building, Fort,
Mumbai - 400001
or send and email.
Q14. How much volume and value of transactions are routed through RTGS on a
typical day?
Ans On a typical day, RTGS handles about 60,000 transactions a day for an approximate
value of Rs.2,700 billion.
Q15. How can a remitting customer know whether the bank branch of the beneficiary
accepts remittance through RTGS?
Ans. For a funds transfer to go through RTGS, both the sending bank branch and the
receiving bank branch would have to be RTGS enabled. The lists are readily available at all
RTGS enabled branches. Besides, the information is available at RBI website
(www.rbi.org.in/Scripts/Bs_viewRTGS.aspx). Considering that more than 52,000 branches at
more than 10,000 cities/ towns and taluka places are covered under the RTGS system, getting
this information would not be difficult.