Routing codes for payment system serving purpose: RBI committee
Mumbai: The existing routing codes for payments systems and clearing of cheques are serving their purpose and may be continued, an RBI committee said Wednesday.
"The existing routing codes are serving their purpose and may be continued...IFSC suits the new payment systems (RGTS and NEFT) and many continue to be used," said a report of the Technical Committee to examine uniform routing code and account number structure.
The Committee chaired by RBI Chief General Manager, Department of Payment and Settlement Systems, Vijay Chugh, was formed to look into feasibility of doing away with branch identifier in the Indian Financial System Code (IFSC).
It also looked at the desirability of implementing International Bank Account Number (IBAN) to replace the multiple identifiers for all financial transactions and harmonisation of different types of bank/branch code/magnetic ink character recognition code, among others.
"To ensure the inter-operability among the payment systems, it is recommended that any new payment system being rolled out in the country should be based only on IFSC," it said.
Removing the same may put many banks to risk who use it along with account number to route the transactions to the intended account as many banks do not have 'check digit' built into their account numbers, the report added.
The national payment systems, RTGS (Real Time Gross Settlement System) and NEFT (National Electronic Funds Transfer System) make use of IFSC in routing of transactions. Banks use IFSC for validation, reconciliation and other purposes.
RBI has invited comments by February 15, 2013 from public on the recommendations of the Committee before looking into their implementation.