Payment and Settlement Systems in Indian Banking Industry : A Study on Pre and Post Electronic Period Experience

In the present economic environment in general and business world in particular, the importance of an efficient payment and settlement systems of financial obligations can not be over emphasized. Like any other process, the present system of payment and settlement has passed through a series of changes from simple barter to highly advanced electronic medium. Today there is a bouquet of payment and systems to suit the requirements of all types of customers, purpose and segment. However the latest trend in payment and settlement systems through electronic form is fast catching up in India and rest of the world. is payment through the electronic form. In India, RBI has been trying very hard to push through the reforms in the payment and settlement systems on account of the benefits derived from the use of technology and its development. RBI has been sharing and signaling the expected developments in line with its objectives of the new system.

An effort has been made in this paper to trace the development of payment and settlement system of financial obligation over the period of time, e.g., from cash to recent electronic media. The study also throws light on the issue of shifting from paper based to electronic based payment and settlement system.