Comprehensive Handbook on Card Erminology, Faqs and NABARD For

A comprehensive handbook on Card Terminology, FAQs and NABARD Guidelines for providing card enabled

services by Regional Ru ral banks and Cooperative Banks

Taking Rural India >> Forward

An initiative of NABARD and NPCI

Special Project Unit – KCC, Head Office, NABARD, Bandra (E ), Mumbai – 400 051 [email protected]

Preface

Banking technology in recent years has been defined by newer forms of payment systems and delivery innovations. These rapid changes in technology have brought along with them new terminology, phrases, products and players driving these changes.

There is, for obvious reasons, a lack of awareness about these new phrases and technology among those who have joined or are in the process of joining this new technology space only recently. This has also been observed in our interactions with the representatives of Regional Rural Banks and Cooperative banks.

A need was therefore felt to bring together various common terms and systems involved in joining National Financial Switch (NFS) by these banks.

An effort has been made in this direction by NABARD along with National Payments Corporation of India (NPCI) to bring a single point reference to the various concerned stake holders in the rural banking sector. Along with the common new terms, we have added a section on Frequently Asked Question (FAQs), the steps involved in joining NFS as well as the details of various schemes of NABARD.

We hope that this document will bring a level of comfort for interested banks in understanding technical terms and methodologies involved in on-boarding new systems.

I wish to place on record my sincere gratitude to NPCI for coming together with NABARD in bringing out this reference document in a very short span of time.

Niraj Kumar Gupta Chief General Manager Special Project Unit – KCC

04 March, 2013 I N D E X

Sr. Particulars Page No. No. 1 Gist of support available for RRBs for issuing KCC 1

2 Gist of support available for Cooperative Banks for issuing 5 KCC

3 Guidelines for joining National Financial Switch (NFS) for 9 ATM and POS application

4 Guidelines for joining RTGS / NEFT Network 11

5 Formats for availing assistance from NABARD 13

6 Frequently Asked Questions (FAQs) for Banks 19

7 Glossary of common words and acronyms used in card 46 based transactions

For any assistance / clarifications kindly contact us at [email protected] Gist of support available for RRBs for issuing KCC

Banks may ensure the following before availing grant assistance from NABARD:

1) RRBs to sign General Agreement for availing grant assistance with NABARD as per our circular No. 08 / FID – 01 / 2012 dated 6 January 2012, if not already signed in the past. 2) Banks to forward a copy of all the agreements signed by the bank with various vendors to NABARD Regional Offices

A. Financial Inclusion by Regional Rural Banks (RRBs) – Support for ICT solutions from FITF

A.1. Objective : The overall objective of the scheme is to provide technology support through POS and ICT cards (RuPay Kisan Cards) to enable Regional Rural Banks to provide doorstep banking facilities. This will enable the clients of Regional Rural Banks to connect with national payment system and avail all types of financial services. All existing and future KCCs will be covered under this scheme.

A.2. Eligibility : The project is to be implemented in all CBS enabled branches of RRBs in each State. The bank is to ensure that certification standards as specified by various agencies are being adhered to for RuPay cards and POS machines / micro ATMs.

A.3. Scope of support : The type of support available under this scheme is given below: I. Cost of Micro ATM / POS terminals upto Rs. 25,000/- per terminal (should be owned by the bank and conform to the standards specified by IBA-IDRBT and UIDAI 1.5 standard). The assessment for the POS terminals / micro ATMs may be done as under: (a) No. of CSPs / BCs to be covered (b) No. of agri input suppliers to be covered (should be owned by the bank) and (c) Spare terminals as backup in the bank (upto 10% of the total, if requested by the bank).

II. Cost of printing and issuing RuPay Kisan Cards upto Rs. 25/- per card (should be owned by the bank and conform to standards specified by NPCI). The card can be a non-personalised card, which can be given as a part of the “ Welcome Kit ” to the customer.

In case of proposals other than KCC, banks may be guided by the Regional Offices of NABARD.

A.4. Operationalisation of Scheme : It was earlier decided to approach the service provider selected through the common RFP process for providing technical as well as BC services in each cluster. Later on, in all cases where the RFP process has not stabilised, they were advised to continue with the existing service providers. Further, for various integrations and other related issues, RRBs may seek the support of Sponsor Banks.

Support from any other agencies, if availed, may be excluded from the claim.

A.5. Pattern of assistance : The concerned RRB may work out a project report covering the total number of POS terminals, RuPay Kisan cards required and submit to the RO. The pattern of assistance thereafter will be as under:

1) Cost of POS terminals : Release of grant will be on reimbursement basis.

2) Cost of printing and issuing RuPay Kisan cards : Release of this grant assistance will be in tandem with achievement. i.e., On coverage of 25% of the 25% of the total eligible cost of the cards operational accounts On coverage of 50% of the 50% of the total eligible cost of the cards operational accounts On coverage of 75% of the 75% of the total eligible cost of the cards operational accounts On coverage of 100% of the 100% of the total eligible cost of the cards operational accounts

A.6. Extent of support : The extent of support will be 100% in North Eastern Region, Sikkim, Chhattisgarh, Jammu & Kashmir, Uttarakhand, Jharkhand, Himachal Pradesh and Andaman & Nicobar Islands and 80% in the rest of the country.

A.7. Duration of Support : The assistance will be extended for a period of 3 years.

B. Operational Support for ATM from FITF:

B.1. Objective : Regional Rural Banks are being encouraged to provide RuPay KCC to their clients. These cards will be used on ATMs / micro ATMs with agri vendors which will result in operational expenditure for the Regional Rural Banks. This scheme is an effort to offset this cost.

B.2. Eligibility : All Regional Rural Banks which are fully CBS enabled and have issued RuPay KCC are eligible for support under the scheme. B.3. Scope of support :

The scheme covers only operational cost. No capital expenditure is covered. The Interchange fees / transaction charges upto Rs. 15/- per KCC transaction arising out of the use of RuPay ATM / Debit Kisan Cards on an ATM other than the parent bank including that of white label ATMs (as and when these ATMs will be deployed in the field) will be reimbursed. This reimbursement is only for KCC transactions.

B.4. Operationalisation of Scheme : Upon stabilisation of the system, the RRB may forward a letter to NABARD informing about the number of ATM cum Debit cards proposed to be issued to KCC customers. The concerned NABARD Regional Office will provide an approval for the same after verifying the claim. Later, on quarterly basis, the bank may approach NABARD for reimbursement along with system generated information of various expenditures.

B.5. Pattern of assistance : Reimbursement on quarterly basis.

B.6. Extent of support : The extent of support will be 100% in North Eastern Region, Sikkim, Chhattisgarh, Jammu & Kashmir, Uttarakhand, Jharkhand, Himachal Pradesh and Andaman & Nicobar Islands and 80% in the rest of the country.

B.7. Duration of Support : The assistance is on reimbursement basis and the banks can forward their claims to ROs every quarter. The support will be extended upto March 2014 with the scheme subject to review thereafter.

C. Support for demonstrating banking technology from FIF

C.1. Objective : To Provide financial support to Regional Rural Banks for demonstrating the usage of RuPay Kisan Cards on ATMs and POS machines / micro ATMs. This medium of banking would encourage financial inclusion as well as technology in rural banking.

C.2. Eligibility : All CBS enabled Regional Rural Banks

C.3. Operationalisation of Scheme : Under the scheme, a Mobile van fitted with ATM and POS machines / micro ATMs will visit villages in the area of operations of the RRBs and work primarily as a literacy tool by demonstrating use of ATMs / POS machines / micro ATMs. The bank will also provide financial literacy material about

the KCC debit cards, ATM services and POS terminals / micro ATMs to be provided in vernacular languages in the Mobile Van. C.4. Components eligible for support under the scheme : The assistance may be utilized for a Mobile Van, ATM, GPRS Router, UPS, POS terminal / micro ATM, etc. (and any other incidental expenditures linked to the project) and financial education material in vernacular language.

C.5. Scope of assistance : Upto Rs. 10 lakh. One mobile van per RRB

C.6. Pattern of assistance : 50% advance may be disbursed once the RRB has accepted the general terms and conditions specified in the RO sanction letter. Balance amount will be released by the Regional Office on reimbursement basis based on the progress of implementation.

C.7. Duration of Support : The assistance will be extended till March 2014.

C.8. Extent of support : The extent of support will be 100% in North Eastern Region, Sikkim, Chhattisgarh, Jammu & Kashmir, Uttarakhand, Jharkhand, Himachal Pradesh and Andaman & Nicobar Islands and 80% in the rest of the country.

D. Support under FIF for other activities : There are various capacity building schemes in place under FIF to help the banks in undertaking technology upgradation for their staff and clients. Banks may make use of the support available for the same.

Gist of support available for Cooperatives for issuing KCC

Banks may ensure the following before availing grant assistance from NABARD:

1) Banks to sign General Agreement with NABARD for availing grant assistance, the details of which can be availed from Regional Offices of NABARD. 2) Banks to forward a copy of all the agreements signed by the bank with various vendors to NABARD Regional Offices

A. Financial Inclusion by Cooperative Banks – Support for ICT solutions

A.1. Objective : The overall objective of the scheme is to provide technology support through POS and ICT cards (RuPay Kisan Cards) to enable cooperative banks to provide doorstep banking facilities. This will enable the clients of cooperatives to connect with national payment system and avail all types of financial services.

A.2. Eligibility : The project is to be implemented in all CBS enabled Cooperative Banks in each State. The bank is to ensure that certification standards as specified by various agencies are being adhered to for RuPay cards and POS machines / micro ATMs.

A.3. Scope of support : Three types of supports are available under this scheme. I. Cost of Micro ATM / POS terminals upto Rs. 25,000/- per terminal (should be owned by the bank and conform to the standards specified by IBA-IDRBT and UIDAI 1.5 standard). The assessment for the POS terminals / micro ATMs may be done as under: (a) No. of branches where the terminals are to be placed (b) No. of PACS to be covered and (c) Spare terminals as backup in the bank (upto 10% of the total, if requested by the bank).

II. Cost of printing and issuing RuPay Kisan Cards upto Rs. 25/- per card (should be owned by the bank and conforming to the standards specified by NPCI). The card can be a non-personalised card, which can be given as a part of the “ Welcome Kit ” to the customer.

III. Cost of integration charges between POS and CBS server.

the RRB / Lead Bank. Cooperative Banks may not require BC services but only technology support for operationalisation of ATM, POS terminals / micro ATMs. Banks may approach the Technology Service Provider (TSP) approved by NPCI for these services.

A.5. Pattern of assistance : The concerned Cooperative bank may work out a project report covering the total number of POS terminals, RuPay Kisan Cards required and the cost of integration between POS terminals and CBS of the bank. The pattern of assistance thereafter will be as under:

1) Cost of POS terminals : Release of grant will be on reimbursement basis.

3) Cost of integration charges between POS and CBS server : Support for this would be on reimbursement basis.

A.6. Extent of support : The extent of support will be 100% in North Eastern Region, Sikkim, Jammu & Kashmir, Uttarakhand, Jharkhand, Himachal Pradesh, Chhattisgarh and Andaman & Nicobar Islands and 90% in the rest of the country.

A.7. Duration of Support : The assistance will be extended for a period of 3 years.

B. Operational Support for ATM:

B.1. Objective : Cooperative banks are being encouraged to provide RuPay Kisan Cards to their clients. These cards will be used on ATMs / micro ATMs with agri vendors which will result in operational expenditure for the cooperative banks. This scheme is an effort to partly meet this cost.

B.2. Eligibility : All Cooperative banks which are fully CBS enabled and have issued RuPay Kisan cards are eligible for support under the scheme.

B.3. Scope and pattern of support : The scheme covers only operational cost. No capital expenditure is covered. There are three types of supports available under this scheme. 1. ATM Add-on Support for CBS : If the bank is running its CBS on ASP model, then an amount upto Rs. 580/- per branch per month is reimbursed. If the bank runs its CBS on ownership model, then an amount upto Rs. 20,000/- will be reimbursed per branch as one time cost. Support for ASP model is extended for a period of 3 years.

2. Switching Fee : An amount of up to Rs. 3/- per transaction for all transactions will be reimbursed towards switching fee charges.

3. Inter-change / Transaction charges : The interchange fees / transaction charges upto Rs. 15/- per KCC transaction arising out of the use of RuPay ATM / Debit Kisan Cards on an ATM other than the parent bank including that of white label ATMs (as and when these ATMs will be deployed in the field) will be reimbursed. The support is only for KCC transactions.

B.4. Operationalisation of Scheme : It is recommended that cooperative banks adopt the ASP route for providing ATM services to their clients considering the huge capital expenditure involved in establishing and maintaining an ATM network as well as the level of comfort with advanced banking technology which is as yet not present in the cooperative banks.

Upon stabilization of the system, the cooperative bank may forward a letter to NABARD informing about number of RuPay KCCs issued to its farming clientele. The concerned NABARD Regional Office will provide an approval for the same after verifying the claim. Later, on a quarterly basis, the cooperative bank may approach NABARD for reimbursement along with system generated information of the various expenditures.

B.5. Extent of support : The extent of support will be 100% in North Eastern Region, Sikkim, Jammu & Kashmir, Uttarakhand, Jharkhand, Himachal Pradesh, Chhattisgarh and Andaman & Nicobar Islands and 90% in the rest of the country.

B.6. Duration of Support : The assistance for this scheme is on reimbursement basis and the banks can forward their claims to ROs every quarter. The support will be extended till March 2014 with the scheme subject to review thereafter.

C. Support under FIF : There are various capacity building schemes in place under FIF to help the banks in undertaking technology upgradation for their staff and clients. Banks may make use of the support available for the same.

Methodology to join National Financial Switch (NFS) for ATM & POS Application

1.1. Direct member of NFS The bank should fulfill the following General and Technical Eligibility criteria for becoming direct member of NFS

General Criteria Bank should have valid Banking License from RBI. Bank should have Current A/c with RBI Bank should have networked ATM and own their ATM Switch Bank should be RTGS Member of RBI

Technical Criteria Use of HSM (External Host Security Module) for encryption and decryption FIPS 140-1/140-2 or FIPS 197 certified crypto product (HSM Standard) Pin Generation and verification using HSM ATMs and POS should have unique Key per terminal Use of Double length Triple Des keys for terminals and translations Mandatory Pin, CVV1 and expiry date verification by issuers

A bank fulfilling all the above criteria may submit the application form to NPCI in the prescribed format. NPCI issues the direct member certificate after examining the all the details submitted by the bank

1.2. Indirect member (Sub member) of NFS A bank that does not fulfil the General and Technical Criteria mentioned in 1.1 can join NFS as a sub member. In order to join NFS through a Sponsor Bank which is already a direct member of NFS the bank may follow the following steps:

i) May negotiate with any direct member bank of NPCI. ii) Discuss the commercial terms iii) The Sponsor Bank should specify the Application Service Provider (ASP) who will be offering switching services to the bank. iv) The ASP should be a certified ASP of NPCI; else the ASP may undergo the necessary certification. v) The Sponsor Bank should assume the role of being the sole clearing and settlement agency

1.3. Steps to be followed by banks for the issue of RuPay debit / KCC cards

i) Bank to take internal board approval for obtaining IIN from NPCI. ii) a) Direct Member: Bank to approach NPCI with the board approval for obtaining Institution Identification Number (IIN). b) Indirect member: Bank to approach its Sponsor Bank with the board approval for obtaining Institution Identification Number (IIN) from NPCI. IIN application to be sent by the bank to NPCI, with an endorsement letter from the Sponsor Bank. iii) Allotment of RuPay Kisan Card IIN by NPCI iv) Sharing of card design files and RuPay card specification by NPCI v) Sharing of sample embossa file and testing by Bank and NPCI(detailed testing procedure will be shared by NPCI) vi) On successful testing go live status accorded directly / in conjunction with the Sponsor Bank vii) Banks to select card vendor who has sufficient expertise in the card printing field. viii) The RuPay Kisan Cards will work at any of the 1,00,000 plus ATMs of more than 68 member banks on the National Financial Switch (NFS) network. ix) The RuPay Kisan Cards are designed to work at micro ATMs with Aadhaar Authentication / or local biometric authentication. The Technical specifications of the Card to be as per NPCI defined standards and micro ATM specifications to be as per UIDAI 1.5 Standards.

Methodology to join of RTGS / NEFT Network

1.1. Direct Membership

Eligibility criteria • Membership is open to all licensed banks. • The entity should satisfy the following Financial Criteria – i. Minimum CRAR of 9% (as per the latest audited balance sheet); ii. Net NPAs below 5% (as per the latest audited balance sheet); iii. Minimum net-worth of Rs. 25 crore; and iv. Recommendation of the regulatory department concerned. • Apply to RBI in the prescribed format • The entity on fulfilling the access criteria would simultaneously be granted membership to INFINET, be eligible for opening current account at the Deposit Accounts Department (RBI, Mumbai), SGL/CSGL account (RBI, Mumbai), • Bank shall at its own cost and responsibility install and maintain in good order the RTGS / NEFT Infrastructure (hardware, software, networking and security products), as required/recommended by the RBI for the purpose. • RTGS members should upgrade/modify/replace such Computer Systems (hardware, software, networking and security products) and other associated components in this regard from time to time as directed by RBI. • The Computer Systems should be located securely within each RTGS member’s premises such that access to them is restricted to that member’s authorised personnel only.

1.2. Indirect Membership Banks which fail to fulfil the access criteria mentioned in 2.1 or because of cost considerations can join RTGS / NEFT Network as a Indirect member. To join RTGS / NEFT Network as an Indirect member, banks may follow the following procedure: i) May negotiate with any direct member bank of RTGS/NEFT Network (Sponsor Bank). ii) Discuss the commercial terms. (The charges for customer transactions of sub- member cannot exceed the charges applicable to customers of sponsor banks/direct members of the centralised payment systems viz., RTGS and NEFT.) iii) Apply for a sub-member IFSC from the Sponsor bank. iv) There will be no branch-wise IFSC number – only bank-wise. v) Establishment of Network connectivity between the Sub member bank and the Sponsor bank. vi) Banks will have to open current accounts with the Sponsor Bank for settlement of transactions.

11 vii) Banks will have to maintain a minimum balance in the current account as may be decided by the Sponsor bank. viii) The sponsor bank would be responsible for sending/receiving all the transactions/messages on behalf of their sub-member. ix) Aspects relating to operational feasibility, risk mitigation, fund settlement, collateral etc have to be taken care by the sponsor bank. x) The sponsor bank should put in place a risk management framework and a system of continuous monitoring of the risk management practices of sub- member/s that they desire to sponsor. The risk management framework should be approved by the Board of the sponsor bank. xi) The sponsor bank under this arrangement will assume complete responsibility for the settlement of all transactions by/on the sub-members. xii) Redressal of all customer complaints / grievance would be the responsibility of the sponsor bank. xiii) Sponsor bank will provide daily report for all transaction so as to enable the client bank to reconcile the transactions.

Format for submitting KCC proposal – Regional Rural Banks ------Ref. No: Date:

The Chief General Manager, NABARD, ……...... Regional Office

Dear Sir,

Proposal for assistance under FITF for Rupay KCC cards and Micro ATMs .

We hereby submit a project seeking Grant Assistance under prevailing guidelines of FITF.

1. Technical details of the bank are as under :

a) Name of the Sponsor bank : ………………………….

b) Name of the FI Service Provider : …………………..

c) Name of CBS service provider : ……………………….

d) Name of ATM service provider : ………………………

e) Name of vendor & model number of the Micro ATMs being purchased : ……………

2. NPCI has allotted the following IIN number(s) to our bank :

a. IIN for RuPay Aadhaar Kisan Card is : ……………………………

b. IIN for RuPay without Aadhaar Kisan Card is : …………………………….

3. We confirm that :

a. The bank’s Board has approved undertaking of this project in its ….. Board Meeting held on …………….. . b. The designs of both Aadhaar & Non-Aadhaar cards have been approved by NPCI. c. We have issued instructions to our branches to open Aadhaar based Accounts and updation of existing Accounts with Aadhaar No. wherever Aadhaar No or Aadhaar Enrolment No. is available.

d. Micro ATM devices complying with UIDAI 1.5 standards and any subsequent modifications thereafter will be purchased.

4. In this connection the following information relating to project particulars along with respective costs is being submitted :

Sr. Details of support Number Amount 1 Number of operational KCC accounts in the bank NA

2 Number and cost of KCC Rupay ATM cards @ ` .. each 3 Number of Micro ATMs terminals owned by the bank , to be deployed @ ` …. each. To be deployed with BCs To be deployed with Agri Vendors Upto 10% additional back up machines 4 Total cost of project NA

We also confirm that the above Rupay KCC cards will be issued by …….. and Micro ATMs will be operationalized by ……… .

Yours Faithfully

Chairman /General Manager

Format for submitting Project Report for ATM proposal – Regional Rural Banks ------

The Chief General Manager …...... ….. Regional Office NABARD

Dear Sir

Sub : Project report seeking assistance for Inter-change charges

We are submitting the following information relating to our RRB’s interface with the ATM network system for claiming re-imbursement of expenses arising out of KCC Rupay Debit cards:

Sr. No. Particulars RRB’s comments 1 Name of RRB 2 Name of Sponsor bank 3 Whether covered under the amalgamation policy of GOI 4 Status of integration between RRB’s CB S and Sponsor Bank’s CBS 5 Status of integration between RRB’s FI server and its CBS 6 Number of ATMs in RRB’s ATM network (including sponsor bank’s ATMs) 7 Number of KCC accounts in the RRB 8 Number of KCC account holders with Rupay cards (as on date)

We agree to submit quarterly claims seeking re-imbursement of interchange charges arising on Rupay Debit cards issued by our bank to our KCC account holders.

Chairman / Chairperson Regional Rural Bank

Format for seeking Reimbursement on Quarterly basis for ATM proposal – Regional Rural Banks ------

Sr Information Comments 1 Name of RRB with Sponsor Bank 2 A Total number of KCC account holders 2 B Total number of KCC account holders with Rupay ATM cards 3 Total number of transactions on these KCC Rupay cards 4 Total payment made by the RRB as Inter-change charges (Information on Off-Us transactions should be submitted in the form of a report generated from CBS.) 5 Amount claimed @ 80% or100% of 4 above

Certified that the above claim is based upon CBS data and is in order.

Chairman / Chairperson Regional Rural Bank

Format for submitting KCC proposal - Cooperative Banks ------Ref. No: Date:

The Chief General Manager, NABARD, ...... …….. Regional Office

Dear Sir,

Proposal for assistance under FITF for Rupay KCC cards, Micro ATMs & other related operational expenditure

We hereby submit a project seeking Grant Assistance under prevailing guidelines of FITF.

1. Technical details of the bank are as under :

a) Implementation date of CBS in the bank: ………………………….

b) No of bank branches on CBS: ………………………….

c) Name of CBS vendor: ………………………….

d) CBS Model (Ownership/Sponsorship): ………………………….

e) Name of the Sponsor bank (ATM services): ………………………….

f) Name of the Technical Service Provider (TSP) for ATM&POS network: ………..

g) Name of vendor & model number of the Micro ATMs being purchased : ……………

2. NPCI has allotted the following IIN number(s) to our bank :

a. IIN for RuPay Aadhaar Kisan Card is : ……………………………

b. IIN for RuPay without Aadhaar Kisan Card is : …………………………….

We confirm that : a. The bank’s Board has approved undertaking of this project in its ….. Board Meeting held on …………….. .

b. The designs of both Aadhaar & Non-Aadhaar cards have been approved by NPCI. c. We have issued instructions to our branches to open Aadhaar based Accounts and updation of existing Accounts with Aadhaar No. wherever Aadhaar No or Aadhaar Enrolment No. is available. d. Micro ATM devices complying with UIDAI 1.5 standards and any subsequent modifications thereafter will be purchased.

3. In this connection the following information relating to project particulars along with respective costs is being submitted :

Sr. Details of support Number Amount 1 Number of KCC accounts in the bank NA

2 Number and cost of KCC Rupay ATM cards @ ` .. each 3 Number of Micro ATMs owned by the bank to be employed with PACS @ `…. each. With PACS / branches Upto 10% additional back up machines 4 Cost of Micro ATM - CBS integration (*)

5 Inter-change fees paid on Rupay KCC card transactions on re-imbursement basis (**) 6 ATM Add on support Cost per branch per month on ASP model OR One time cost per branch for 3 years in Ownership model 7 Switching Fee ( For Cooperatives on Sponsorship model for joining NFS (***)

(*)Cost details as agreed between service provider and the bank required to be submitted along with the project. (**) Interchange fees paid by the bank will be submitted for re-imbursement by NABARD along with a CBS generated file clearly showing Rupay KCC transactions. (***) System generated details of the Switching Fee charges, supported by NABARD on a reimbursement basis, will be provided by the bank along with the claim.

We also confirm that the above Rupay KCC cards will be issued by …….. and Micro ATMs will be operationalized by ……… .

Yours Faithfully

Chairman /General Manager

FREQUENTLY ASKED QUESTIONS FOR BANKS

19 1. What are the Mission, Vision and Objectives of National Payments Corporation of India?

Mission : To build state of the art world class customer friendly electronic retail payment system available and affordable by all, round the clock

Vision : Anywhere Anytime payment services which are –

(a) Simple and easy to use (b) Safe and secure (c) Fast and cost effective

Objectives : To integrate and consolidate all retail payment systems such that they are:

(a) Inclusive (b) Customer friendly (c) Varied yet simple (d) Universally accessible (e) Available round the clock (f) Affordable to all (g) Fully automated (h) World class

2. Why was “RuPay” conceptualized?

The need for a domestic payment card “RuPay” card is on account of two factors: (a) the high cost borne by the Indian banks for affiliation with international card associations in the absence of a domestic price setter and (b) the connection with international card associations resulting in the need for routing even domestic transactions, which account for more than 95% of the total, through a switch located outside the country.

3. Advantages of RuPay over Visa and Master Cards

RuPay, which aims at promoting financial inclusion, is set to rewrite the rules of the electronic payment system in India. Unlike Visa and MasterCard networks, it does not charge an entry fee. RuPay has come as a boon not just for the rural and semi-urban population but also for customers in metros.The need for RuPay is on account of the high cost borne by Indian banks for affiliation with international card associations in the absence of a domestic price setter. RuPay is pin supported, which makes it more secure against fraud.

4. Is “RuPay” approved by the RBI?

NPCI has been granted approval to launch the "RuPay" affiliated cards for use at ATMs and Micro ATMs. NPCI has been advised to ensure that the use of the RuPay Aadhaar cards under the Aadhaar Enabled Payment System (AEPS) is in strict compliance with the DBOD guidelines on Business Correspondents (BCs).

5. What are the main features of a RuPay card? • RuPay is well equipped to handle both the single message and dual messaging systems. • RuPay is a Pin based product so it provides enhanced security • It offers complete web based architecture, so member banks will not have to develop a file based interface. • RuPay provides advanced features such as processing of adjustment file to enable Tip and Surcharge processing on the SMS platform too. • Administration costs & quarterly charges are very low when compared to current international schemes and there is no entry fee.

6. How many variants of the RuPay Cards are available?

As of now there are three variants of RuPay Cards.

(a) RuPay Debit Card (b) RuPay Kisan Card (c) RuPay Aadhaar Card

7. Where can a customer use the RuPay DebitCard?

The RuPay Debitcard can be used at any of the 1,00,000+ ATMs under the NFS network and 1,00,000+ PoS machines at various Merchant establishments.

8. What are the services presently available for the RuPay Debit Card?

The following services are available on the RuPay Debit Card currently:

(a) Cash withdrawal

(b) Balance enquiry

(d) Mini Statement

(e) Purchase at Merchant Establishments

(f) Cash at POS

9. What is NFS?

The National Financial Switch (NFS) maintained by NPCI provides national level ATM switching network. It is the largest Multilateral Shared ATM Network in the country.

10. How can a Bank become a member of NFS?

There are 2 methods by which a bank can become a member of NFS: Direct member & Sub-member. The various criteria for each are given below.

Criteria Direct member Sub -member CBS Implementation Yes Yes EFT switch Yes/Can be on shared Yes/Can be through basis Sponsor bank/ASP Networked ATMs Yes No Connectivity to NPCI Yes/Can be on shared No/Can be through ASP basis RTGS Member Yes No/Can be through Sponsor Bank Current account with RBI Yes No DR/PR site for Data Center Yes/Can be on shared No/Can be through ASP basis Pin generation & Yes/Can be on shared No/Can be through ASP verification using HSM basis HSM for Pin encryption & Yes/Can be on shared No/Can be through ASP decryption basis Mandatory Pin, CVV1, Yes Yes Expiry date verification by issuer Acquiring facility on your Yes/Can be on shared No/Can be through ASP switch basis Debit Card Management Yes/Can be on shared No/Can be through ASP System basis To carry out Clearing & Banks own responsibility Responsibilities can be Settlements shared with Sponsor Bank & ASP Recon & Dispute Banks own responsibility Responsibilities can be management shared with Sponsor Bank & ASP Fraud and Risk Banks own responsibility Responsibilities can be Management shared with Sponsor Bank & ASP

11. Regional Rural Banks are not members of the NFS network and most of the RRBs have not deployed any ATMs of their own. Can they still issue the RuPay Card?

Yes. RRBs have to obtain an IIN from NPCI and under Sponsor Bank or ASP Sub member model the RRB can start issuing RuPay Cards to its customers. Transactions will happen as per the Sponsor Bank – RRB Model or Sub Member- ASP Model. The RRBs can also come as Sub Member- ASP Model if the RRB is not using the infrastructure from its sponsor Banks.

12. Should the RRB invest in any new IT infrastructure?

A linkage needs to be established between the RRB CBS and the Sponsor Bank switch. Therefore no significant investments required.

13. How can a DCCB become a member of NFS and issue the RuPay Card?

DCCBs can join NFS under the Sponsorship Model as a sub-member. DCCBs have to obtain an IIN from NPCI and underSponsor Bankmodel theDCCB can start issuing RuPay Cards to its customers. Transactions will happen as per the Sponsor Bank Model. The bankwill have an ASP(Application Service Provider)for using the shared switching infrastructure & managing transactions.

14. Should the DCCB invest in any new IT infrastructure?

No significant investments are required as the bank will utilise the services and shared infrastructure of an ASP (Application Service Provider).

15. What is the Sponsor Bank Model for RRB?

The salient features of the model are:

a. The Sponsor Bank must be a member of the NFS network i.e sponsor bank should be a NFS member bank b. The RRB customer will have cards having a unique IIN issued by NPCI for RuPay Debit Cards. c. This IIN is treated and updated as Sponsor Bank’s IIN in the NFS network d. A linkage is established between RRB’s CBS and sponsor bank’s switch

e. NPCI will settle all RRB transactions with the Sponsor Bank as a part of the consolidated settlement of the sponsor bank. It will be the responsibility of the Sponsor Bank to settle the same with the RRB f. The Sponsor Bank will refer to the NFS generated Issuer Activity reports and other MIS to settle transactions under the specific RRB IIN number. g. The Sponsor Bank will be responsible for DMS on behalf of the RRBs

16. What is the Sponsor Bank Model for DCCB?

The salient features of this model are:

h. The Sponsor Bank must be on NFS network i.e., sponsor bank should be a NFS member bank i. The DCCB customer will have cards having a unique IIN issued by NPCI for RuPay Debit Cards. j. The Co-op Banks have tie-ups with various ASP/TSPs who automate their inter- branch network, establish ATMs & issue ATM cards. Since the investment and expertise required to setup EFT switch infrastructure is huge, Co-op banks use a shared EFT switch provided by an ASP.

k. ASP Switch drives ATMs of these banks.

l. A switch-to-switch tie-up between the NFS switch and ASP Switch to which multiple co-op banks’ CBS are connected.

m. Since most co-op banks are not member of RTGS, a NFS Member Bank will be the Settlement Banker / “Sponsor Bank” for these Co-op. Banks and this is governed by the ‘Liquidity Manager’.

n. NPCI will settle all DCCB transactions with the Sponsor Bank as a part of the consolidated settlement of the sponsor bank. It will be the responsibility of the Sponsor Bank to settle the same with the DCCB.

o. The Sponsor Bank will refer to the NFS generated Issuer Activity reports and other MIS to settle transactions under the specific DCCB IIN number i.e. for doing recon.

p. The Sponsor Bank will be responsible for DMS on behalf of the DCCBs.

17. What is a Liquidity Manager?

The Liquidity Manager would be run in the NPCI’s data centre& works as a limit check for approving/declining transactions of sub member Banks.. Sub-member (DCCB) will maintain a required amount with the Sponsor Bank, which will be used to cover the

24 settlements that the Sponsor bank will do on the sub -member’s behalf. Based on the float amount, the Sponsor Bank will assign a Bank Limit in the Liquidity Manager. Sponsor Bank would inform NPCI to maintain the limits into the Liquidit y Manager and NPCI would do the same and confirm back to Sponsor Bank.

18. What happens in the case of an On Us transaction for RRBs?

a. Regional Rural Banks will issue cards to its customers which will carry the Unique IIN Nos for RuPay Debit Cards issu ed by NPCI b. This IIN number will be updated by Sponsor Bank as its own IIN number. The same will be updated by NFS in the network and will be treated as sponsor bank’s IIN number. c. Regional Rural Bank Customer having the RuPay card will transact at Sponsor B ank ATM for a Withdrawal or Balance Inquiry. d. The transactions done by Regional Rural Bank Customers on Sponsor Bank ATM will be routed to sponsor bank switch from where it travels to the RRB CBS for authentication and customer balance verification. e. The re levant accept / decline message will travel all the way back from the RRB CBS to Sponsor Bank switch and to the ATM for onward processing.

19. What happens in the case of an Off Us transaction for RRBs?

a. Regional Rural Banks will issue cards to its custo mers which will carry the Unique IIN Nos for RuPay Debit Cards issued by NPCI b. This IIN number will be updated by Sponsor Bank as its own IIN number. The same will be updated by NFS in the network and will be treated as sponsor bank’s IIN number. c. Regional R ural Bank Customer having the RuPay card will transact at Acquirer Bank ATM for a Withdrawal or Balance Inquiry. d. The transactions done by Regional Rural Bank Customers on Acquiring Bank ATM will be routed to NFS through the NFS member bank (acquiring bank) switch e. NFS switch will recognize the RRB IIN as the sponsor bank IIN and rout it to the sponsor bank switch from where it travels to the RRB CBS for authentication and balance verification. f. The relevant accept / decline message travels back from RRB CBS to sponsor bank switch to NFS and onwards to the acquirer bank switch and the particular ATM for onward processing. g. NFS switching charges will be as applicable

20. What is Sub Member- ASP Model for on-boarding the RRBs?

In this model RRB utilizes the services/infrastructure of an Application Service provider for getting connected to NFS. Though the settlement in this model will be done by Sponsor banks only the flow of the transactions in case of “Off-US” mode.

In “Sub- member ASP” Model it is important that ASP selected by RRB/Sponsor bank is certified with NPCI.

In case of “On-Us” Transactions NFS will not come in play.

The transaction flow willbe same as Sponsor bank model as mentioned earlier except for the case that sponsor bank switch will be replaced by ASP Switch and IIN will be updated at NFS and ASP is RRB IIN rather than Sponsor bank IIN.

21. What is the system architecture for the entire transaction flow

1. DCCB issues “RuPay” cards to its customers, which will carry t BIN. So Bank Customer having “RuPay” card is able to transact at any NFS Member Bank ATM.

2. The transaction initiated by the customer at acquirer bank’s ATM will hit the Acquirer bank’s switch. The Acquirer bank’s switch check for the ON US transaction.

3. The switch will determine that the transaction is OFF US; it will rout the transaction to NPCI switch.

4. On the basis of the IIN the transaction to the respective issuer bank’s authentication of the transaction. In case of switch provider of the sub member bank. The transactions at NFS Member Bank ATMs are first checked against availability of the the Liquidity Manager on NFS. Transactions are declined by NFS Switch if amount exceeds DCCB’s available limit.

5. If there is sufficient “Bank Limit” available, the transaction is routed to the ASP switch for the DCCB, which is further routed to DCCB’s CBS host for authorization.

6. If there is sufficient “Customer Balance” then the transaction is approved/decline and sent back to ASP Switch

7. ASP send the approved/decline transaction to NPCI switch.

8. NPCI switch further routs the transaction to acquirer bank’s switch.

9. On the basis of approved/decline by the issuer, the acquirer bank’s switch sends the respective response code to the ATM and the ATM acts accordingly.

The NPCI switch is connected to sponsor banks for the Dispute Management, Recon and settlement for the sub member banks.

22. What is the scope of testing of the existing Sponsor Bank switch of RRBs?

The Sponsor Bank needs to be connected to the CBS of its RRBs and needs to ensure that authentication and balance verification transactions are successful.

23. Will the sponsor bank switch be certified after testing by NPCI / NFS?

It depends on a case to case basis. Usually, since the sponsor bank switch is already connected to NFS no additional certification would be necessary.

24. How does settlement take place in this (Sponsor bank- RRB) model?

The Sponsor Bank will handle the settlements on behalf of its RRBs. The Sponsor Bank and RRB can have an internal settlement mechanism mutually decided by both entities. However for all practical purposes the Sponsor Bank indemnifies settlements on the NFS network on behalf of its RRBs. The Sponsor Bank will check its Issuer / Acquirer activity reports and other MIS received from NFS and settle its accounts accordingly with the RRB at mutually decided intervals.

25. How does settlement take place in this (Sponsor bank – Cooperatives) model?

The Sponsor Bank will handle the settlements on behalf of its DCCBs. The Sponsor Bank and DCCB can have an internal settlement mechanism mutually decided by both entities. However for all practical purposes the Sponsor Bank indemnifies settlements on the NFS network on behalf of its sub member bank. The Sponsor Bank will check its Issuer / Acquirer activity reports and other MIS received from NFS and settle its accounts accordingly with the DCCB at mutually decided intervals.

26. Who handles the Dispute Management in the Sponsor bank- RRB model?

The customer will lodge a complaint with the respective RRB. RRB in turn will forward the complaint to NFS Member Bank (Sponsor Bank). The NFS Member Bank (Sponsor Bank) already has a Dispute Management mechanism in place by virtue of being a part of the NFS network. The Sponsor Bank will raise the dispute in its DMS using its existing DMS ID. Complaint will be solved as per normal procedure &a solution will be provided to sponsor bank which in turn will provide the same to the RRB within defined TAT. (All present RBI Guidelines would be applicable

27. Who handles the Dispute Management in the Sponsor bank- Cooperatives model?

The customer will lodge a complaint with the respective DCCB. DCCB in turn will forward the complaint to NFS Member Bank (Sponsor Bank). The NFS Member Bank (Sponsor Bank) already has a Dispute Management mechanism in place by virtue of being a part of the NFS network. The Sponsor Bank will raise the dispute in its DMS using its existing DMS ID. Complaint will be solved as per normal procedure &a solution will be provided to sponsor bank which in turn will provide the same to the DCCB within defined TAT. (All present RBI Guidelines would be applicable)

28. Will the RRB get a dispute management ID?

Yes the RRBs will get a DMS ID under Sub member-ASP Model.

29. Will the DCCB get a dispute management ID?

Yes the DCCBs will get a DMS ID under Sponsor Bank Model.

30. What types of reports are given by the NPCI / NFS to the Sponsor Bank?

The regular settlement and DMS reports will be provided to the Sponsor Bank.

31. What types of reports are given by NPCI / NFS to the RRB/DCCB?

No additional reports are given to the RRB/DCCB.

32. What are the initial documents to be received to initiate the on-boarding of DCCB as sub member?

The following documents will be required to be submitted:

• Sponsorship letter from the Sponsor bank introducing the DCCB as sub member and the ASP. • Approach paper from Sponsor Bank (if new) • Approach paper from ASP (if new) • Board resolution from Sponsor Bank for participation in the Sponsor Bank Model of NFS (if new) • Dully filled & attested Risk Checklist from the DCCB • A copy of RBI license issued to DCCB • Board Resolution from DCCB for becoming a sub-member • Duly filled and attested Network compliance checklist from the DCCB • Audited balance sheet of the DCCB for last 3 years • A copy of CAMEL ratings of the DCCB • Network Diagram between sub-member(DCCB)& ASP • IIN Request form & Cover letter from DCCB • Application for joining NFS as sub-member and annexure from DCCB • Bank Information Sheet from the DCCB

33. What is the scope of different entities involved in a Sponsor Bank – Cooperative Model?

NFS Sub-Member:  In ITM System, NFS Sub-Member needs to be clearly identified to link with Sponsor Bank  Limits with respect to the Sub-Member need to informed by NFS Sponsor Bank to NPCI to further capture into LM  Sub-Member needs to be tagged with an ASP  NFS Sub-Member can change the relationship with NFS Sponsor Bank and ASP  NFS Sub-Member would act as issuer and acquirer also.

Application Service Provider (ASP)  ASP Switch to be connected to NFS  Proper UAT for Network & Application Level testing to be done before they are put into production system  Any transaction sent to ASP has to be routed through LM first and only successful transaction would be then sent to ASP.  ASP would be certified by the 3rd Party SISA Auditor for IS related matters and their compliance should be handled like any other connection in NFS.  ASP would be sponsored by the NFS Sponsor Bank.

 Technical Certification for NFS connectivity would be done by NPCI.  ASP should be tagged with Sponsor Bank and Sub-Member in all reports of DMS/ITM

NFS Member Bank (Sponsor)  NFS Sponsor Bank would be tagged to its NFS Sub-Member and ASP into ITM/DMS  Separate DMS report for net settlement and other reports to be generated for the Sponsor Bank w.r.t Sub-Member.  Liquidity Manager Limits would be captured as per the request received from the sponsor bank.  Separate DMS IDs to be created for Sponsor Bank to capture their DMS related issues for the multiple Sub-Members.  Provide the technical support to Sub-Member and ASP

34. What is an IIN?

IIN stands for Issuer Identification Number, also known in general terminologies as Bank Identification Number (BIN). The purpose of the numbering system is to uniquely identify a card issuing institution in an international interchange environment. All IINs assigned are six digit numbers and are the first six digits of a card.

35. What is the process involved when a RRB applies for an IIN?

The RRB should apply for an IIN in the prescribed IIN License Agreement form provided by NPCI. The agreement form has to be duly signed by the designated authority of the RRB, duly stamped with the RRB seal and sent to NPCI along with a covering letter from the Sponsor Bank requesting issue of IIN to its RRB. Bank has to provide the Product Type processing for its RRBs. i.e Single Messaging System (SMS) or Dual Messaging System (DMS).

36. What is the process involved when a Cooperative applies for an IIN?

The DCCB should apply for an IIN in the prescribed IIN Request form provided by NPCI. The agreement form has to be duly signed by the designated authority of the DCCB, duly stamped with the seal and sent to NPCI along with a covering letter from the DCCB.

37. What is the cost of obtaining an IIN from NPCI?

NPCI has presently waived off the onetime IIN issuance fee, so currently IIN is issued free of cost.

38. What is the time taken by NPCI to issue an IIN?

Two working days.

39. What are the compliance requirements to be followed for a NPCI issued IIN?

(a) The allotted IIN should be used exclusively for RuPay Branded Cards

(b) The cards issued under the IIN will be as per standards provided by NPCI (RuPay Cards and Marks Specifications)

(c) The cards must be able to perform successful transactions on all NFS ATMs under NFS network operating rules and regulations

(d) NFS operating guidelines and all circulars issued under NFS will be applicable for the cards issued under the IIN

(e) The IIN will be valid only for the product applied for and any other product variation(s) using the same IIN would require separate approvals.

40. Can a RRB/DCCB apply for more than one IIN?

Yes.

41. Can a single IIN issued by NPCI be used for RuPay Debit Card, RuPay Kisan card and RuPay Aadhaar Card also? Or should the RRB/DCCB apply for a new IIN for the same?

If RRB/DCCB has the capability of product differentiation at 7 th and 8 th Digit of card number no separate IIN needs to be issued for Aadhaar Cards. But the bank needs to inform the number series reserved for Aadhaar Card to NPCI. However separate IIN will be issued on request for RuPay Debit and RuPay Kisan Card.

42. Can product variations be made using a single IIN? If so how?

It is advised that you structure your Customer Account Numbers (digits 7 to 15) in such a way that you can reserve specific ranges of account numbers to identify future products, services, technologies, or brands.

IIN fixed length Customer Account Number assigned by card Check issuer Digit 6 digits assigned by Registration Authority (Variable up to 9 digits including any spaces)

Digits 7 - 15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Figure 1 - Example of a Primary Account Number (without any spaces)

The PAN is comprised of three components:

• The IIN - used only to identify the issuing institution (first 6 digits) • Customer Account Number - should be used to identify products, services, geographic locations and technologies, in addition to identifying individual cardholders (7 th digit up to the 15 th ) • Check Digit - used to check that the account number is valid (digit 16 or 19 depending on the account number length). The first 6 digits cannot be used for any identification other than to identify the issuer to whom the IIN is registered. However, any of the next 9 digits can be used to identify products, services, geographic locations and technologies.

43. What is the procedure related to IIN when the RRB undergoes amalgamation?

Post Amalgamation, a particular scenario has emerged wherein the merging entities have been issued RuPay BINs and the new entity formed after the merger will require a new BIN to be given under the new name. The merging entities have not issued any cards as yet and no certification process has been initiated till date. Hence, to handle such a change, we propose the following – 1. The old merging RRB entities will now be a part of the new RRB entity and the new RRB may submit an IIN Surrender form for the old entities. This may be endorsed by the new Sponsor Bank. 2. Such a letter to be accompanied by the Official Gazette Merger Notification of the Govt of India and other circulars / notifications by NABARD / Sponsor Banks. 3. This is to intimate NPCI that the old IINs have not been used and surrendered to NPCI thus obviating any future use of the same 4. The new RRB will submit fresh IIN application form to NPCI for issuance of the same for the required product type. This has to be accompanied by a covering letter of the new Sponsor Bank. 5. NPCI will issue a new IIN to the new RRB entity which will then send us the new card designs and will undergo a certification process as per the existing norms of NPCI. In short the actionable for the RRBs are as under –

RRB X RRB Y New RRB formed by New Sponsor Bank Merger of X & Y NPCI issued IIN NPCI issued IIN New RRB must New Spo nsor Bank surrender RRB X IIN must endorse the and RRB Y IIN as per surrender form and NPCI IIN release forms. new IIN request form. New RRB will apply for a new IIN from NPCI

NPCI issued IIN NPCI not issued IIN New RRB must New Sponsor Bank surrender RRB X IIN as must endorse the per NPCI IIN release surrender form and forms. New RRB will new IIN request form apply for a new IIN from NPCI NPCI issued IIN NPCI not issued IIN New RRB must New Sponsor Bank and card surrender the RRB X must endorse the design IIN. Cards ordered surrender form and approved by needs to be stopped / new IIN request form NPCI and cards scrapped as the cards ordered but should have the New certification RRB logo and New RRB pending name. New RRB must apply for new IIN and go for fresh approval of card designs with new name and new logo NPCI i ssued NPCI not issued IIN New RRB must submit New Sponsor Bank IIN, Card for reassignment of old must endorse the design IIN under new name / same. approved, re-apply for a new IIN. Bank is Live New RRB must re-issue and cards the cards already issued. issued in the field with the new card design, new RRB name and new logo

44. How many test cards are to be sent to NPCI?

Presently 30 test cards have to be sent.

45. What should the test cards contain? Do they need to have the artwork as well?

The test cards may or may not have the art work. White plastic cards also can be sent. But the cards have to contain the dummy Primary Account Number and a PIN mailer.

46. Once the card design is finalized by the RRB/DCCB and its Sponsor Bank, is an approval from NPCI needed?

Yes. The card specifications would have to be as per the NPCI RuPay Card Marks and Specifications latest Version.

47. Does the Card production and design vendor need to be certified by NPCI?

Yes.

48. Are there any approved vendors for Card design & manufacture?

As on date the following vendors are approved by NPCI for card design & manufacture:

Sr Name of the Service Provided Contact Details Company Card Card Manufact Personali uring zation 1 Versatile Card Yes Yes Sridhar T.S Technology Versatile Card Technology (P) Limited AC21, SIDCO Industrial Estate 4th Main Road Thirumudivakkam, Chennai -600 044 Tel: +91- 44-24781551. Fax: +91-44-24781571 Mobile: +91-9840085206 E-mail: [email protected]

2 MCT Cards & Yes Yes Rajesh Shet Technology MCT Cards & Technology Pvt.Ltd.

Plot No. 22 A, Shivalli Industrial Area, Manipal, Karnataka - 576104

Tel: +91-820-2574826 Fax: +91-820-2574827 Mobile: +91-9845518223

E-mail: [email protected]

3 DZ Card Yes Yes Shailesh Patel (India) Pvt. DZ Card (India) Pvt Ltd Ltd. Tel: +91-124-4128888 Fax: +91 -124 -4128899 Mobile: +91-9871998994

E-mail: [email protected]

4 M-Tech Yes Yes Kapil Gandhi Innovations Plot No. 1/2, Rajiv Gandhi Infotech Park, Ltd. Phase I, Hinjewadi, Pune 411057

Phone:- +91-20- 22934880/22932080 Ext:-254

Tele Fax :- +91-20- 22933139

Mobile :- +91 98500 39631

E-mail: [email protected]

5 Oberthur Yes Yes Atul Jain Technologies Oberthur Technologies India Pvt. Ltd, India Pvt. Ltd. A – 201, Sec – 63 Noida – 201303 (U.P.) Phone:- +91-9811142455

E-mail: [email protected] om Priyanka Singh Phone:- +91-9699333779 E-mail: [email protected]

6 Madras Yes Yes Johnny Vitkar Security Head - Western Region, Madras Security Printers Printer Pvt Ltd. Private 72. T.H Road, Chennai 600 081 Limited Phone:- +91-9987005829

E-mail:- [email protected]

7 Giesecke&De Yes Yes ShyamBalakrishnan vrient (G&D) Sr. Sales Manager – MSMS Commercial Bank Giesecke&Devrient India Pvt. Ltd. Plot No. 218, Block A, Okhla Industrial Area, Phase I, New Delhi – 110 020 Mobile: +91 7738037483

mailto:[email protected]

8 CMS No Yes Mr. Mokam Singh InfosystemsP Sr.Business Manager vt Ltd. CMS Info Systems Pvt. Ltd. Silver Metropolis,11th Floor, Western Express Highway, Goregaon 'East', Mumbai - 400063. Landline : 022-67553219 Mobile - 09619858787

Email Id: [email protected]

49. How to ascertain whether the existing vendor of the Bank is certified by NPCI? Please contact NPCI for this information.

50. What if the vendor is not certified, can the vendor apply for a certification from NPCI? Yes.

51. Is there any specific design for RuPay Kisan Credit Card?

Yes, there is a standard design for the RuPay KCC card. In order to achieve uniformity in the Kisan Credit Cards on a debit card platform, the Department of Financial Services, Ministry of Finance have proposed a standardized card design to be used for all Kisan Cards to be issued by all the Scheduled Commercial Banks, Cooperative banks and RRBs. A sample is given below –

52. Once the card design is finalized by the DCCB and its Sponsor Bank, is an approval from NPCI needed?

Yes. The card specifications would have to be as per the RuPay Card marks and specifications.

53. What if the vendor is not certified, can the vendor apply for a certification from NPCI? Yes.

54. How many cards with final artwork, card design and personalization need to be sent to NPCI? Five, for our archives.

55. In the card numbering format, is the RRB/DCCB free to use the 7 th digit of the card as per its product variations? Yes.

56. Does the POS Service provider need to be certified by NPCI Yes (Message format certification only).

57. Can you please share the list of PoS device vendors and PoS application vendors for our reference?

Following are the main vendors for the PoS terminal in the Indian market: • Verifone, • Ingenico, • PineLabs, • Innoviti, • PAX, • M Swipe • Easy Tap

Following are the Technical Service Providers for the PoS terminal application:

Sl. Name of TSP/TPP Regd. Address Board No.

1 ATOS 6TH Floor, A Wing, Prism Tel: +91 (22) 4042 4000 Tower, Mindspace, Link Road,

Malad West, Mumbai - 400064

2 Prizm Payments Silver Metropolis‚ Tel:+91 (22) 39541800 3rd Floor‚ Jai Coach Compound‚ Goregaon (E)‚ Mumbai-400063

3 In Solutions 6th Floor Palm Spring Above Tel:(022) 67603200 Global Croma Link Road Malad (West) Mumbai : 400064 Maharashtra ,India

4 FSS 502 A 5th Floor South Block Tel : (44) 22540251 TIDEL IT Park 4 Canal Bank 22540261 Road Teramani Chennai: 600113 Tamil Nadu, India.

5 OPUS Opus Software Solutions (P). Tel: +91 - 20 6627 2100/ Ltd. Commerzone, 1st Floor, 3092 5100 Building No.4, SamratAshoka Path, Off Airport Road, Yerwada, Pune- 411 006, Maharashtra-India

6 Atom FT Tower, CTS no: 256 & 257, TEL+91 22 67698300 Technologies Ltd. Suren Road, Chakala, Andheri (East), MUMBAI - 400 093

7 TCBIL Tata Communications Tel +91 22 66578765 Plot # C-21 and C-36 Block G, Bandra Kurla Complex Bandra (East), Mumbai 400098

8 Banktech 3rd floor, Sigma Chambers Tel:91-80-43574400 1307,HAL 3rd Stage, Jeevan Bhima Nagar Main Road, Bangalore-560075

9 MRL Posnet MRL Posnet Pvt Ltd, No.134/62, Tel:044 24955569 Greenways Road, Raja Annamalai Puram, Chennai - 600028, Tamil Nadu, India

58. Does the Switch ASP Vendors need to be certified by NPCI ?

Yes. At Present there are nine (9) ASPs which are certified by NPCI. Sub –Member coming from these mentioned ASP does not require two round of testing. Only one round of UAT is required. No comfort Testing is required as already these ASPs are certified.

1. FIS Solutions. 2. C-edge 3. Euronet Services 4. Sarvatra Technology 5. Thane JanataSahakari Bank 6. Shyamrao Co-operative Bank (Maximus and Narada Switch) 7. Saraswat Co-operative Bank 8. Finacus 9. E-Cosmos Solutions(Cosmos Bank)

59. What is the Service Code and which service code is applicable for RuPay Cards?

Service code is comprised of three digits. The first digit specifies the interchange rules, the second specifies authorisation processing and the third specifies the range of services. It is 520 at present for the RuPay Scheme

First digit 1: International interchange 2: International interchange, use IC (chip) where feasible 5: National interchange only except under bilateral agreement 6: National interchange only except under bilateral agreement, use IC (chip) where feasible 7: No interchange except under bilateral agreement (closed loop) 9: Test

Second digit 0: Normal 2: Contact issuer via online means 4: Contact issuer via online means except under bilateral agreement

Third digit 0: No restrictions, PIN required 1: No restrictions 2: Goods and services only (no cash) 3: ATM only, PIN required 4: Cash only 5: Goods and services only (no cash), PIN required 6: No restrictions, use PIN where feasible 7: Goods and services only (no cash), use PIN where feasible

60. Is the card holder name mandatory on the RuPay Card?

Yes.

61. What is the manufacture ID code? Where on the Card layout should the manufacture ID code be placed?

Please see the card reverse lay out below for placement of the manufacture code.

62. What are the costs involved in launching the RuPay Card?

For the Sponsor Bank –

(a) One time participation fees of Rs. 6 lakhs plus Service Tax

For the DCCB-

(b) Costs towards switch sharing with the ASP/Sponsor Bank (c) Cost of card production, personalization and issuance (d) Rs. 0. 50 per transaction towards NFS switching charges in case of Off-Us transactions

Savings on Costs vis-a-vis International Card Schemes

(a) No certification fees (b) No fees on value and volume of transactions (c) No assessment fees (d) No brand usage or royalty fees (e) No network participation fees except the switching charges of NFS.

63. What about the interchange costs?

It may be noted that Interbank Interchange Fee (Decided by banks mutually) will be applicable for Off-us ATM transactions. NPCI has no role to play in these fees. NPCI merely recovers the interchange from issuers and pay the same to the acquirers. The present interchange rates applicable are as under:

Financial Transactions: Rs. 15/-(per txn)+Service Tax

43 Non-Financial Transactions: Rs. 5/-(pertxn)+Service Tax

64. What are the different steps involved in issuing the RuPay Card?

Steps Activity Responsibility Timelines (working days) Step 1 Kick-off discussion with DCCB & ASP DCCB 1 day Step 2 Receiving the initial set of Sponsor Bank & 10 days docume nts DCCB Step 3 Sub-member On-boarding Risk DCCB & NPCI 10 days Compliance Step 4 DCCB to submit application to NPCI DCCB 2 days for IIN assignment Step 5 Issuance of IIN NPCI 2 days Step 6 Card creative & collateral DCCB 7 days preparation and approval

Step 7 Submission of card design by bank NPCI & DCCB 7 days and approval from NPCI Step 8 DCCB to advise the card printing DCCB 7 days vendor (certified by NPCI) Step 9 Submission of embosser file with DCCB 2 days CVD values and track 1 & 2 data Step 10 Validation of the CVD values and NPCI 3 days track data Step 11 Bank to submit30 test card plastics DCCB 7 days & test cases with NPCI Step 12 NPCI to conduct testing & NPCI & DCCB/ASP 30 days certification Step 13 Bank and NPCI to sign off on testing NPCI, Sponsor Bank, 2 days DCCB Step 14 Go Live Approval NPCI, DCCB, Sponsor TBD Bank

RuPay Aadhaar Card

1. Where can a customer use the RuPay Aadhaar Card?

The RuPay Aadhaar Card can be used at any ATM of any bank with PIN authentication and at any Micro ATM with biometric fingerprint authentication.

To know more about the RuPay Aadhaar cards please visit http://www.npci.org.in/AEPSOverview.aspx

2. What are the services available for the RuPay Aadhaar Card ?

(a) Cash withdrawal (b) Cash deposit (c) PIN Change (d) Balance enquiry (e) Aadhaar to Aadhaar Fund transfer

3. Can the customers get the Direct benefits transfer?

Yes, if the bank enrols in the Aadhaar Payment Bridge solution then EBT credit disbursements can be done based on the UID Aadhaar number

4. In the RuPay Aadhaar Card where is the Aadhaar Number stored?

The Aadhaar number is stored in the track 1 discretionary data of the magstripe. The 12 digit Aadhaar number of the customer should start from the 59 th digit with the character “A” as prefix.

5. Is the Aadhaar Number mandatory on the RuPay Aadhaar Card?

No. As per RuPay Card marks specifications the 4 th line embossing should be the UID / Aadhaar Number. But this is optional and depends on the discretion of the individual banks

6. In the RuPay Aadhaar Card layout is the photograph of the card holder mandatory?

No. It is optional.

For any further queries and assistance ,do call us on the below mentioned numbers:

Name Designation Contact Numbers Email ids

Mr. Anupam Bagchi Chief Manager 8108186551 [email protected] Mr. V. Ratnakar Senior Manager 8108108685 V. Ratnakar @npci.org.in Mr. Ashish Bhan Manager 8879772702 [email protected] Ms Nivedita Nayak Manager 8879772716 [email protected]

Ms Kumari Komal Assistant Manager 8108122832 [email protected] National Payments Corporation of India ,13 th Floor , R-Tech Park ,South Side, Nirlon Knowledge Park, Off Western Express Highway,Goregaon(E),Mumbai - 400063

Glossary of common words and acronyms in card based transactions

Acceptor: Any trading or service establishment that accepts transactions, on its own behalf or on behalf of its network, for the payment of goods or services via an electronic money instrument.

Acceptance for settlement: The stage in the processing of a payment at which it has passed all risk management and other tests and can be settled under the system’s rules and procedures.

Acquirer : The entity or entities that hold(s) deposit accounts for card acceptors (merchants) and to which the card acceptor transmits the data relating to the transaction. The acquirer is responsible for the Collection of transaction information and settlement with the acceptors. This is the bank on whose ATM other bank’s customer do the transactions.

ACH: Automated clearing house

ASP (Application Service Provider): It is a third-party entity that manages and distributes software-based services and solutions to customers across a wide area network from a central data centre. The need for ASPs has evolved from the increasing costs of specialized, complex and capital intensive software.

ATM: Automated teller machine. An electromechanical device that permits authorized users, typically using machine-readable plastic cards, to withdraw cash from their accounts and/or access other services, such as balance enquiries, transfer of funds or acceptance of deposits. ATMs may be operated either online with real-time access to an authorization database or offline.

Batch: The transmission or processing of a group of payment orders and/or securities transfer instructions as a set at discrete intervals of time.

Biometric: Refers to a method of identifying the holder of a device by measuring a unique physical characteristic of the holder, eg by fingerprint matching, voice recognition or retinal scan.

Brown Label ATMs : 'Brown label' ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM. The `brown label' has come up as an alternative between bank-owned ATMs and 'white label' ATMs.

Card-based products: Electronic money products which provide the customer with a portable, specialized computer device, typically a Smartcard card containing a microprocessor chip.

Cash card: Card for use only in ATMs or cash dispensers (other cards often have a cash function that permits the holder to withdraw cash).

Cash dispenser: Electromechanical device that permits consumers, typically using machine- readable plastic cards, to withdraw banknotes (currency) and, in some cases, coins.

CBS : Core Banking Solution

CBS on ASP MODEL : When the hardware and software licenses pertaining to CBS is owned and maintained by an outside agency (Application Service provider) then, it is said to be CBS on ASP Model.

CBS on OWNERSHIP : When the hardware and software licenses pertaining to CBS is owned by the bank¸ it is said to be CBS on Ownership Model

Chip card: Also known as an IC (integrated circuit) card. A card containing one or more computer chips or integrated circuits for identification, data storage or special purpose processing used to validate personal identification numbers (PINs), authorize purchases, verify account balances and store personal records. In some cases, the memory in the card is updated every time the card is used (e.g. an account balance is updated).

Clearing: Clearing is referred to the movement of DMS transactions information from the member to NPCI network and NPCI network to members.

Contact cards: Cards that require physical contact through an electronic connection surface between the card and the card reader or terminal device.

Contactless cards: Cards that do not require physical contact between the card and the card reader or terminal

Credit card: A card indicating that the holder has been granted a line of credit. It enables the holder to make purchases and/or withdraw cash up to a prearranged ceiling; the credit granted can be settled in full by the end of a specified period or can be settled in part, with the balance taken as extended credit. Interest is charged on the amount of any extended credit and the holder is sometimes charged an annual fee.

Debit card: Card enabling the holder to have his purchases directly charged to funds on his account at a deposit-taking institution (may sometimes be combined with another function, e.g. cash card or cheque guarantee card).

Delayed debit card: Card issued by banks indicating that the holder may charge his account up to an authorized limit. It enables him to make purchases but does not offer extended credit, the full amount of the debt incurred having to be settled at the end of a specified period. The holder is usually charged an annual fee

DMS (Dispute Management System): This is the grievance redressal mechanism put in place to resolve any customer complaints regarding cash withdrawals at ATM. All present RBI guidelines would be applicable.

DMS Platform : A dual message system comprises of authorization, clearing and settlement. A separate clearing message need to be submitted & the authorisation amount and settlement amount can be different.

Electronic purse: A reloadable multipurpose prepaid card which may be used for small retail or other payments instead of coins

Electronic wallet: A computer device used in some electronic money systems which can contain an IC card or in which IC cards can be inserted and which may perform more functions than an IC card.

Embedding: In IC card manufacturing, the process by which the chip module is mounted on the plastic carrier (card).

HSM : Hardware Security Module. Its main function is to manage digital keys. HSMs provide both logical and physical protection for the sensitive data from non-authorized use and potential adversaries

IDRBT (Institute of Development and Research in Banking Technology): IDRBT is a banking research institute, established in 1996 by Reserve Bank of India (RBI). IDBRT has set up National Financial Switch in 2004. It was handling all the payment authentications until 2009, before transferring it to National Payments Corporation of India. It has also developed common and interoperable standards for all banks in the country.

Interchange: This is the fee that is paid by the card-issuing bank to the acquiring bank (for the maintenance of the machine) for allowing its customers to do transactions at the other bank’s ATM.

Interoperability: A situation in which payment instruments belonging to a given scheme may be used in other countries and in systems installed by other schemes. Interoperability requires technical compatibility between systems, but can only take effect where commercial agreements have been concluded between the schemes concerned.

Issuer : This is the bank which issues the card to the customer.

Micro ATM: It is a POS device with a biometric reader used for doing Aadhaar enabled transactions.

Multifunctional cards: A card which, in addition to a stored value card functions may include other payment facilities such as a debit or credit card function and/or non-payment facilities.

NFS: National Financial Switch. Maintained by NPCI, this switch basically is the clearing platform for all ATM based transactions across the country. All ATM networks in the country are linked with NFS in India.

NPCI (National Payment Corporation of India): NPCI is a “not for profit” entity formed in 2009. It is an Umbrella organization for all retail payment systems in India. NPCI is promoted by 10 commercial banks under the aegis of the IBA and guidance of RBI.

Offline: In the context of payment and settlement systems, the term may refer to the transmission of transfer instructions by users, through such means as voice, written or telefaxed instructions, that must subsequently be input into a transfer processing system. The

term may also refer to the storage of data by the transfer processing system on media such as magnetic tape or disk such that the user may not have direct and immediate access to the data.

Off Us Transactions : A card transaction in which issuer and the acquirer are separate entities is an OFFUS transaction. For offus transactions, authorization will be routed through the NPCI network. NPCI will perform the clearing & settlement for both the members (Issuer & Acquirer).

Online : In the context of payment and settlement systems, this term may refer to the transmission of instructions by users, through such electronic means as computer-to-computer interfaces or electronic terminals, that are entered into a transfer processing system by automated means. The term may also refer to the storage of data by a transfer processing system on a computer database such that the user has direct access to the data (frequently in real time) through input/output devices such as terminals.

On Us Transactions: A card transaction in which issuer and the acquirer is from the same institution is an On Us transaction.

PIN (Personal Identification Number): A numeric code which the cardholder may need to quote for verification of identity. In electronic transactions, it is seen as the equivalent of a signature.

Presentment: It is a message where the acquirer presents transaction data to the issuer for claiming the funds. A Clearing Record that an Acquirer presents to an Issuer through NPCI.

PoS ( Point of Sale): Device used for purchase transactions at merchant locations.

Server: a computer that provides services through a network to other computers.

Settlement: Settlement is the process used to exchange funds between members

Scheme Code: It defines the scheme from which the card belongs for example Visa/Master/RuPay/Domestic Routing. Operating rules will be governed by the scheme code.

Smartcard: A plastic card in which one or more integrated circuits are embedded. Also called chip card.

SMS Platform: Single Message System (SMS) environment uses a single exchange of messages between the acquirer and the issuer to (a) Authorize a financial transaction (b) Post a financial transaction to a cardholder’s account. It will perform real time transaction processing as well as exception or offline transaction processing offline.

Sponsor Bank: The primary bank which sponsors another bank for joining the National Financial Switch (NFS). The Sponsor Bank is already a member of the NFS.

Switch: A hardware device that connects multiple computers together.

Switching: Means routing of interbank ATM and POS transactions through a shared network.

Switch fee: Transaction fee set by the ASP and paid by the card issuing institution to the ASP for the cost of routing transaction information.

TAT (Turn Around Time): Timelines fixed for the completion of a particular activity

Transaction : The act between a cardholder and a merchant or an acquirer that results in the generation of a transaction Receipt or transaction log.

UID 1.5 / IBA-IDRBT Standards : These standards, which specify functional, hardware and Interoperability requirements have been enforced to bring a uniformity in micro ATMs being used in the country today. The overall objective is to allow each micro ATM to provide

standardized bio metric transactions. All micro ATMs used by the banks in the country have to comply with these standards.

UIDAI (Unique Identification Authority of India): UIDAI aims to provide identification (Aadhaar number) for each resident across the country which would be used primarily as the basis for efficient delivery of welfare services. It would also act as a tool for effective monitoring of various programs and schemes of the Government.

White Label ATMs: White Label ATMs (or WLAs) in India will be owned and operated by Non Bank entities. A customer of any bank will be able to withdraw money from such White Label ATMs but will need to pay a fee for the services. These WLAs will not display logo of any particular bank and are likely to be located in non traditional place. With the expansion of ATM network through WLA, customers will be able to withdraw funds at more locations, which will be convenient and located near to their home or place of work. Banks too support introduction of white label ATMs as such machines are likely to reduce pre-transaction cost for them and will be free from the problems relating to maintaining and running such a payment channel.