Page 120 - DMGT303_BANKING_AND_INSURANCE

Unit 5: Payment and Settlement System

Generally, a time limit of sixty days should be given to the customers for referring their Notes
complaints/grievances.

Banks/NBFCs and their Standing Committee on Customer Service should review on a
monthly basis the credit card operations including reports of defaulters to CIBIL and
credit card related complaints.

5. 11 Keywords

Core Banking Solutions or Centralised Banking Solutions: wherein the customers can transact
business any banking branch of the country which is under the system.
Credit Card : credit card involves provision of credit to the card user which is paid by the card
user on receipt of the bill either in full or partially in instalments.
Debit Card: Debit Card is a direct account access card (amount transacted gets debited
immediately).
Electronic Funds Transfer (EFT): Electronic Funds Transfer (EFT) is a system whereby anyone
who wants to make payment to another person/company etc. can approach his bank and make
cash payment or give instructions/authorization to transfer funds directly from his own account
to the bank account of the receiver/beneficiary.

MICR Clearing: Under this system, specific type of paper is used for printing the cheque. The
cheque conforms to required specification as laid down and are having two white bands at the
top and another at the bottom.
Payment System: A payment system is a mechanism that facilitates transfer of value between a
payer and a beneficiary by which the payer discharges the payment obligations to the beneficiary.
5.12 Review Questions

1. Discuss the payment and settlement system in banks.
2. Differentiate between debit card and credit card.
3. Explain Customer Grievances Redressal under Payment System.
4. Describe the major developments in payment and clearing system of India.

5. Define clearing house and its working.
6. Define the terms:
(a) MICR clearing

(b) cheque truncation
7. What do you mean by direct selling agents?
8. Discuss the credit card operations.

Answers: Self Assessment

1. Payment systems 2. Development
3. Electronic 4. Banks/NBFCs

5. Cheque 6. True

LOVELY PROFESSIONAL UNIVERSITY 115