Question 1. What Is Electronic Clearing Service (ecs)?
It is a style of digital funds switch from one financial institution account to every other bank account using the offerings of a Clearing House. This is normally for bulk transfers from one account to many bills or vice-versa. This can be used each for making bills like distribution of dividend, hobby, income, pension, and so on. Through establishments or for series of amounts for purposes including bills to software organizations like smartphone, power, or prices which include house tax, water tax, and so forth. Or for mortgage installments of economic establishments/banks or everyday investments of individuals.
Question 2. What Are The Types Of Ecs? In What Way They Are Different From Each Other?
There are two kinds of ECS referred to as ECS (Credit) and ECS (Debit):
ECS (Credit) is used for affording credit score to a big number of beneficiaries via elevating a single debit to an account, consisting of dividend, interest or income charge.
ECS (Debit) is used for raising debits to some of money owed of clients/ account holders for crediting a specific institution.
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Question 3. Who Can Initiate An Ecs (credit score) Transaction?
ECS payments can be initiated by using any institution (referred to as ECS person) who've to make bulk or repetitive bills to some of beneficiaries. They can initiate the transactions after registering themselves with an accepted clearing house. ECS customers have additionally to acquire the consent as additionally the account particulars of the beneficiary for collaborating the ECS clearings. The ECS person’s bank is called because the sponsor financial institution under the scheme and the ECS beneficiary account holder is called the vacation spot account holder. The vacation spot account holder’s financial institution or the beneficiary’s bank is known as the vacation spot financial institution.
The beneficiaries of the regular or repetitive payments can also request the paying organization to utilize the ECS (Credit) mechanism for effecting payment.
Question four. How Does The Ecs Credit System Work?
The ECS customers proceeding to effect payments have to post the statistics in a special layout to one of the authorized clearing houses. The listing of the accredited clearing homes or the list of centres wherein the ECS facility has been supplied is to be had at www (dot) RBI (dot) org (dot) in.
The clearing residence could debit the account of the ECS consumer via the account of the sponsor bank at the appointed day and credit score the accounts of the recipient banks, for affording onward credit to the money owed of the final beneficiaries.
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Question 5. At Which Of The Centres Ecs Facility Is Available?
At gift ECS facility is available at more than 60 centres and the full listing is available on the web-website of RBI.
The beneficiaries need to keep an account with one of the banks at these centres so that it will avail of the gain of ECS.
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Question 6. How Does A Beneficiary Participate In Ecs (credit) Scheme?
The beneficiary has to provide a mandate giving his consent to avail of the ECS facility. He have to additionally speak to the ECS person the information of his bank department and account particulars. Such authorisation form is referred to as a mandate.
Question 7. Will There Be Any Need For The Beneficiary To Alter This Mandate?
Yes. In case the statistics/account details go through trade, then he has to notify the ECS consumer to carryout adjustments with a purpose to ensure persevered benefits from the ECS user. In case the account particulars at the vacation spot department do not in shape, the destination branches might go back the credit score via their provider department to the clearing residence.
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Question eight. Who Will Communicate The Beneficiaries’ About The Credit?
It is the responsibility of the ECS person to speak to the beneficiary the details of credit score that is being afforded to his account, indicating the proposed date of credit, quantity and the relative particulars of the payment, so that the beneficiary can fit the same with the details supplied by the financial institution within the account declaration/passbook.
Question nine. What Are The Advantages To The Ultimate Beneficiary?
The stop beneficiary want no longer make common visits to his bank for depositing the bodily paper instruments.
He need now not apprehend lack of device and fraudulent encashment.
The postpone in recognition of proceeds after receipt of paper instrument.
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Question 10. How Does The Scheme Benefit The Ecs User-like Corporate Bodies/ Institutions?
The ECS person saves on administrative equipment for printing, dispatch and reconciliation.
Avoids chances of loss of devices in postal transit.
Avoids chances of frauds because of fraudulent get entry to to the paper units and encashment.
Ability to make price and ensure that the beneficiaries’ account gets credited on a delegated date.
Question 11. What Are The Advantages To The Banks?
Banks managing ECS get freed of paper dealing with.
Paper dealing with also creates lot of pressure on banks as they ought to encode the devices, gift them in clearing, screen their go back and observe up with the concerned financial institution and clients.
In ECS banks virtually get the charge particulars relating to their customers. All they want to do is to healthy the account particulars like name, a/c variety and credit the proceeds.
Wherever the info do now not suit, they should return it lower back, as consistent with the system.
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Question 12. How Can The Customer Track-down These Payments?
Banks were counseled to make certain that the skip-books/statements given to the clients mirror the details of the transaction supplied with the aid of the ECS customers. Customers can fit these entries with the recommendation obtained by way of them from the fee group.
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Question thirteen. Is There Any Limit On The Amount Of Individual Transactions?
No cost limit on the quantity of person transactions has been prescribed under the scheme.
Question 14. Is It Necessary For The Corporate/institutions To Collect Mandate From The Investors?
Yes. A version mandate form has been prescribed for the purpose. Payment processing by means of banks will become simpler once the database is ready. SEBI has also issued pointers to investors to provide their account numbers of their share applications for printing the identical on the hobby/dividend warrants, collecting the account details and mandates won't pose a whole lot problem.
Question 15. What Is Ecs (debit) Scheme?
It is a scheme beneath which an account holder with a financial institution can authorize an ECS consumer to get better an quantity at a prescribed frequency by raising a debit in his account. The ECS consumer has to accumulate an authorization that's called ECS mandate for raising such debits. These mandates have to be recommended by the financial institution branch preserving the account.
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Question sixteen. How Does The Scheme Work?
Any ECS user desirous of collaborating in the scheme has to sign in with an accepted clearing house. The list of accepted clearing homes is available at RBI internet-website online www (dot) RBI (dot) org (dot) in. He need to also acquire the mandate bureaucracy from the participating destination account holders, with financial institution’s acknowledgement. A replica of the mandate must be available with the drawee financial institution.
The ECS person has to put up the statistics in certain shape thru the sponsor bank to the clearing house. The clearing residence might skip on the debit to the vacation spot account holder via the clearing device and credit the sponsor financial institution’s account for onward crediting the ECS user.
All the unprocessed debits must be again to the sponsor bank in the time body designated. Banks will treat the digital commands received via the clearing gadget on par with the physical cheques.
Question 17. Can The Mandate Given Once Be Withdrawn Or Stopped?
Yes. The mandate given is on par with a cheque issued by means of a consumer. The handiest stipulation beneath the scheme is that the customer has to provide previous observe to the ECS consumer, to make sure that they do no longer include the debits.
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Question 18. Can The Customer Stipulate Any Maximum Debit, Purpose Or Validity Period For The Mandate?
Yes. It is left to the selection of the individual patron and the ECS person to finalize those components. The mandate can incorporate a maximum ceiling; it is able to also specify the purpose as additionally a validity length.
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Question 19. What Is The Current Coverage Of The Scheme?
At gift the scheme is in operation at 15 RBI centres (i.E. Centres wherein RBI manages the Clearing House operations) and at different centres where Public Sector Banks manipulate the clearing operations. The listing of centres is to be had at the RBI internet-site under the procedural tips.
Question 20. Processing Charges On Individual Transactions?
RBI has deregulated the carrier costs that would be levied through sponsor banks. RBI has waived the processing charges levied by way of RBI and different banks dealing with the clearing homes till March 2008.
Question 21. Which Are The Institutions Eligible To Participate In The Ecs Debit Scheme?
Utility carrier vendors inclusive of cellphone organizations, electricity presenting corporations, energy forums, credit card collections, collection of mortgage installments with the aid of banks and financial institutions, and investment schemes of Mutual funds, and so on.