Understanding IFSC Code for Secure Transactions in India

Demystifying USSD, AEPS and Micro ATMS in India’s Digital Payments Ecosystem Digital payments refers to those transactions that are carried out through online mediums, where no physical exchange of money is required. Digital payment can be made from the comfort of your home and the receiver can get the amount directly to their bank account. 1️⃣ Unstructured Supplementary Service Data Unstructured Supplementary Service Data (USSD) is method through which transactions can be made even without an internet connection. Banking customers may avail this option by dialling *99#, which is a common number across all telecom service providers and transact via an interactive menu shown on their mobile screen. Some of the key services offered under this method of digital payment includes interbank account to account fund transfer, balance enquiry, mini statement and various other banking services. Today many leading banks offer the *99# service. It is a unique interoperable service to consumers that brings the diverse ecosystem partners like banks and telecom service providers together. 2️⃣ Aadhaar Enabled Payment System (AEPS) AEPS is a revolutionary digital financial service in India that allows bank account holders to perform basic banking transactions using their Aadhaar number. AEPS is a payment system which is based on the unique identification number of the aadhaar card. It allows aadhaar cardholders to make financial transactions seamlessly through aadhaar based authentication. This method of digital payment has been introduced to ensure financial inclusion and to empower all sections of the society by making financial and banking services available to every section of the society. Through this method, one can easily transfer funds, make payments, deposit cash, withdraw money, know account balance etc. In order to use this feature, your bank account should be linked with your aadhaar. 3️⃣ Micro ATMs Micro ATMs are device that delivers banking services to customers. Business correspondents who may be a local store owner can facilitate a Micro ATM to perform instant transactions. Through this device, one can transfer money from your aadhaar linked bank account by finger authentication. The major services that can be accessed from this Micro ATM includes withdrawal, deposit, money transfer, and balance inquiry. The fundamental requirements to access these feature is to link your bank account with Aadhaar.

Real-Time Monitoring Systems – A Double-Edged Sword in Banking⚠ While real-time monitoring is undoubtedly a major step forward for advanced banking — enhancing transparency, security, and efficiency — there’s another side to the story that deserves attention. My latest post/illustration highlights the potential downsides of real-time monitoring systems, from privacy concerns to operational risks when systems fail or accounts get frozen unexpectedly. As part of my current profile as a Concurrent Bank Auditor, I have recently observed something quite concerning. Over the past few days, many banks — especially the branch where I conduct audits — have been flooded with customers whose accounts, both savings and current, are suddenly getting frozen. The reason? Real-time transaction monitoring. Banks have implemented automated systems that monitor debit and credit transactions in real time. Whenever the system detects anything “suspicious,” the account gets frozen instantly. Customers are being told various reasons — 1️⃣ Too many UPI transactions 2️⃣ Large or unusual credit amounts 3️⃣ Same-day credit and debit of identical amounts But in most cases, the main trigger seems to be the increasing number of UPI transactions. Now, here’s the irony — on one hand, our Government is promoting Digital India and encouraging citizens to go cashless, while on the other hand, banks are freezing accounts for the very same digital behaviour. This contradiction is leaving many innocent customers helpless. Think of people who have EMIs, hospital bills, or urgent payments to make — yet their accounts are completely locked. No debits, no credits, no relief. Adding to this, even the RBI’s recent initiative of cheque clearing within 2 hours — though well-intentioned — has created confusion. In October, many customers faced delays where cheques remained uncleared for over 25 days. In several cases, the amount was debited from the drawer’s account but not credited to the payee, leaving both parties in distress. So, the question is — 👉 How long will customers continue to suffer because of technical lapses and unprofessional handling in banking operations? 👉 Shouldn’t our banking systems evolve in sync with government initiatives toward a digital economy? Innovation is important, but so is balance. We need to ensure that as we adopt cutting-edge technologies, we also safeguard customer trust and accessibility.

Core Banking Core Banking refers to a centralized system enabling banks to manage key operations like deposits, loans, payments, and accounts through an integrated platform. The acronym CORE stands for Centralized Online Real-time Environment, emphasizing real-time, centralized data management across branches and digital channels. What is Core Banking? Core banking connects all bank branches and services via a central database, allowing customers to access accounts and perform transactions (e.g., withdrawals, transfers) from any branch, ATM, or digital platform (mobile apps, internet banking). It replaces the older branch-specific model with a unified system for efficiency and accessibility. Key Features Centralized Database: Stores all customer and transaction data in one server, accessible globally. Real-Time Processing: Updates transactions instantly (e.g., UPI payments). Multi-Channel Access: Supports services via branches, ATMs, online banking, and mobile apps. Automation: Minimizes manual processes, reducing errors and costs. Scalability: Adapts to new products and regulatory changes. Core Functions Account Management: Handles savings, current, and fixed deposit accounts. Deposits/Withdrawals: Processes cash and digital transactions. Loan Management: Manages loan disbursal, repayments, and interest calculations. Payments: Supports NEFT, RTGS, UPI, and IMPS transfers. Compliance: Ensures KYC and anti-money laundering adherence. Reporting: Generates reports for RBI and internal audits. Core Banking Systems in India (2025) Finacle (Infosys): Used by SBI, ICICI, HDFC. Flexcube (Oracle): Adopted by Axis Bank, others. TCS BaNCS: Popular for scalability in public/private banks. Temenos T24: Common in cooperative and global banks. Benefits Customer Convenience: Access services anytime via UPI, ATMs, or apps. Efficiency: Streamlines operations, cutting costs and errors. Fast Transactions: Real-time updates (e.g., instant UPI transfers). Compliance: Simplifies adherence to RBI’s CRR (4.5%), SLR (18%), and Basel III. Analytics: Centralized data enables personalized offerings. Challenges High Costs: Expensive setup and migration. Cybersecurity: Centralized data vulnerable to hacks. Downtime: System outages disrupt all services. Training: Staff need ongoing tech training.

Technology-a game Changer for Banks & Customers! The world is evolving at a pace faster than ever before. Cultures are blending, societies are becoming more complex, and technology is at the heart of this transformation. Today, organizations across industries have embraced technology not just as a tool but as a strategic enabler of business. Technology, which was once viewed as a necessary evil is now recognized as a catalyst for innovation, efficiency and growth. The banking Industry has fully embraced this shift. In the modern financial landscape, no bank can survive without leveraging technology. From Mobile Banking apps to AI-driven customer service, technology has become the backbone of banking operations. Even the older generation have transitioned to using Mobile Banking, online transfers and digital wallets, aligning with the fast-paced evolution of financial services. Jones’ grandfather, a retired banker, marvels at how far Banking has come. “In our days,” he recalls, “Banking meant physically visiting a Bank branch for any service or transaction you needed.’’ Who would have imagined that bank branches could one day fit into the palm of our hands? Today, customers seamlessly access Banking products and services through Mobile phones—anytime and anywhere, 24/7. The idea of physically visiting a Bank branch for basic services are quickly fading and becoming old-fashioned. Modern customers have essentially become their own tellers, using Mobile apps to transfer funds to friends, pay University or College fees, water and TV bills, check bank balances, place excess funds in fixed deposits and manage accounts with ease. Corporates, too, have embraced this shift. “I have a Central Securities Depository (CSD) account with Bank of Zambia, which I personally opened from the comfort of my home with the assistance of my son to facilitate bidding for government securities. I no longer need to contact my Bank to assist me with investing in government securities. I now access my CSD account through my smartphone and effortlessly initiate and complete bidding transactions online,” boasted Jones’ friend To further extend their reach, Banks have also partnered with Mobile Network Operators (MNOs) to introduce Agency Banking through a network of agents. Theses agents provide essential Banking services such as cash withdrawals, deposits, and money transfers, effectively bridging the gap between traditional Banking and previously disadvantaged areas. Indo Zambia Bank is a fine example of a financial institution forging strategic alliances with MNOs and FinTech Companies. This collaboration has enabled the Bank to keep pace with innovation, offering a wide range of technology-driven products tailored to meet evolving customer needs. These products include IZB Mobile Banking, IZB Indo Wallet, and IZB Internet Banking. Thinking about opening an account with Indo Zambia Bank? Please don’t hesitate. Supporting You. Developing Zambia!

Top 10 banking trends for 2025 and beyond — here’s what’s coming 1. Technology helps banking reach everyone. Digital banking made it easy to access money and services. Now, AI will make things even more personal. Soon, banking will feel like having a chat with a trusted advisor. By 2030, everyone will have access to smarter, more helpful banking services. 2. Rules keep changing, creating new challenges. Regulators want banks to be safe. That pushes banks and fintechs to come up with new ideas faster. Banks that work well with regulators and partner with others will be stronger and serve more people. 3. Bigger banks are more powerful. Large banks can do things more efficiently and quickly because they have more resources. They can offer more services and reach a wider audience. But, they also need to team up with others and focus on the areas where they can make the biggest difference. 4. Customer service goes back to being personal; AI and data will let banks treat each person like an individual. Expect smarter chatbots, voice assistants, and apps that remember your past, predict what you need, and help you make decisions — all while feeling friendly and human. 5. Products connect better with customers. Banks will organize their services around their customers, not just around separate products. They will offer packages that are easy to understand, with prices that change based on what you need. This will make banking easier and more personal. 6. New ways of working. Banks will change how they work. Routine tasks will be done by machines, while staff will focus on helping customers and solving problems. Leaders will encourage new ideas and make sure AI is used ethically. Workers will learn new skills and work better with technology. 7. From cutting costs to making more money. At first, AI focused on saving money. Now, banks will use AI to grow revenue — offering better services, personal deals, and stronger relationships. This helps turn savings into new income. 8. Open source is the future. Banks will use shared, flexible technology that’s open and easy to change. This helps them innovate faster and work together with fintechs and other banks. Building open systems means they can adapt quickly to new ideas. 9. Coding becomes easier and faster. AI will help create software much more quickly. Banks can update old systems faster and find new ways to build apps and tools. This speeds up change and makes it easier to bring new technology to customers. 10. Vendors will offer more tools. Banks will move away from big, fixed systems. Instead, they’ll pick and mix smaller, specialized tools from different vendors. This makes it easier to update and improve their systems without starting from scratch. The future of banking is changing fast, Let’s talk about how your organization can stay ahead.  

A brief understanding of UPI Payments! Glossary TPAP: Third Party Access Provider (e.g., Google Pay, PhonePe) PSP: Payment Service Provider (Usually a bank partnered with the TPAP) NPCI: National Payments Corporation of India (The central governing body) Remitter Bank: The bank account from which the money is debited. Beneficiary Bank: The bank account where the money is credited. VPA: Virtual Payment Address (Your unique UPI ID) Underlying Concepts & FAQs 1. What is a VPA? A VPA is essentially an alias that maps directly to a bank account. A single VPA can only point to one bank account. Example: If your HDFC bank account is added on Google Pay (a TPAP), you might have multiple VPAs pointing to it, like: vpa-1@okhdfcbank vpa-2@oksbi The relationship is: One Bank Account can have Many VPAs. 2. What does the part after the '@' symbol mean? The suffix after the @ (e.g., @oksbi, @ybl) represents the PSP (Payment Service Provider) managing that specific VPA. In the example vpa-2@oksbi, it means the VPA was created and is managed via SBI's PSP. You cannot choose the PSP suffix; it's automatically determined by the TPAP based on their existing partnerships. Key point: When you make a payment, you select the Bank Account to debit. The TPAP simply uses one of the associated VPAs for routing the transaction. Only the chosen bank account is used for the actual payment. 3. Why multiple VPAs for the same account? Multiple VPAs ensure High Availability (HA). If one PSP (and its corresponding VPA) faces a technical difficulty, the payment can be automatically routed through another VPA/PSP, ensuring a high success rate and minimizing transaction failure. 4. Why do TPAPs need a PSP? TPAPs need PSPs because they generally cannot communicate directly with NPCI and the banking network. Almost all PSPs are banks themselves. They possess the necessary banking license and infrastructure required to securely communicate with the NPCI settlement system and other banks. This structure maintains network security and facilitates inter-bank communication, which is crucial for settlement processes. Transaction Success A UPI payment is only considered successful when all legs of the transaction return a success result: Remitter Bank (Debit) Beneficiary Bank (Credit) NPCI (Clearing & Authorization) TPAPs and PSPs use their own APIs, but all members utilize the common NPCI APIs for the core transaction flow. Refer to the picture below to understand the sequence and entiteis involved when you make a upi payment.

Seylan Bank ATMs delivers customer ease with option to withdraw cash in preferred currency mixes Seylan Bank continues to offer customers control and ease in their daily banking through its wide network of Automated Teller Machines (ATMs), Cash Deposit Machines (CDMs), and Cheque Deposit Kiosks (CDKs). Among the services offered to customers is the ability to select their preferred cash note denominations. Introduced in 2023, Seylan Bank stands as one of only two banks in Sri Lanka with an improved network of ATMs allowing customers to receive currency in bill mixes of 5000, 1000, 500, and 100. Recognizing the immediate needs of customers when withdrawing the cash mix of their choice, the Bank with a Heart introduced the ability for customers to choose their preferred cash denominations directly from ATMs. As a customer centric banking solution, the feature eliminates the hassle of inflexible ATM withdrawals. It aims to empower all users with flexibility over their choice of withdrawals and remove the reliance on bank counters and spending time breaking down larger notes. Offering real-time value to clients, the feature reaffirms Seylan Bank’s commitment to leveraging innovation towards providing the best possible customer experiences. By offering this choice directly through ATMs, Seylan Bank effectively resolves time delays and erases numerous inconveniences. From retailers to taxis and more, Seylan Bank’s varied offering of bill mixes ensures efficacy for customers in satisfying their diverse personal and business needs. The service also adds an extra layer of security and trust to every transaction. As the Bank with a Heart, Seylan Bank’s latest addition to its services continues to provide practical, reliable solutions that blend convenience with customer protection. With ATMs placed at key locations across the island, Seylan Bank makes it easier for customers to access fast, secure, and contactless transactions, shaping the future of everyday banking.

A demand draft (DD) is a secure, prepaid financial instrument issued by a bank, used to transfer money or make payments. It guarantees payment to the recipient, as the bank deducts the amount from the payer’s account (or cash) at the time of issuance. Unlike a cheque, a demand draft cannot bounce, making it a reliable payment method for large transactions, such as paying fees, purchasing property, or settling bills. Key Features of a Demand Draft Prepaid: The amount is paid upfront by the issuer, ensuring the recipient receives the funds. Bank Guarantee: The bank guarantees payment, reducing the risk of non-payment. Non-Negotiable: The DD is payable only to the specified recipient or their bank account. Validity: Typically valid for 3 months, though this may vary by bank or country. Non-Cashable: Cannot be encashed directly; the amount is credited to the recipient’s bank account. How It Works Request: The payer visits a bank, fills out a DD application form, and provides details like the recipient’s name, amount, and location. Payment: The payer pays the DD amount plus a small issuance fee (varies by bank, typically $1–$10 or equivalent). Issuance: The bank issues the DD, which includes details like the payee’s name, amount, date, and bank branch details. Delivery: The payer sends the DD to the recipient, who deposits it in their bank account for clearance (usually 2–5 days). Advantages Secure: Eliminates the risk of bounced payments. Widely Accepted: Used for institutional payments, such as university fees or government transactions. Traceable: Banks maintain records, making it easy to track. No Cash Handling: Safer than carrying large amounts of cash. Disadvantages Processing Time: Clearing can take a few days, unlike instant digital payments. Fees: Issuance and cancellation fees apply. Limited Flexibility: Cannot be altered once issued; cancellation requires bank approval. Common Uses Educational institutions for admission or exam fees. Property purchases or rent deposits. Government or legal payments. International transactions (in some cases). Demand Draft vs. Cheque Cheque: Drawn on the payer’s account, may bounce if funds are insufficient. Demand Draft: Prepaid by the bank, guaranteed payment. Cancellation/Revalidation If lost or unused, a DD can be canceled with a fee, and the amount is refunded. Expired DDs can be revalidated by the issuing bank. Modern Alternatives With digital banking, demand drafts are less common. Alternatives like NEFT, RTGS, or online transfers are faster and cheaper but may lack the guaranteed payment feature of a DD.

Starting from October 15, 2025, For current and savings accounts held with Singapore’s seven major retail banks — DBS Bank, OCBC Bank, United Overseas Bank (UOB), Citibank Singapore, Maybank Singapore, HSBC Singapore, and Standard Chartered Bank — a new “cooling-off period” mechanism will take effect. When an account’s balance is at least S$50,000, and a single electronic transfer (combined with any withdrawals made in the previous 24 hours) exceeds 50% of the account balance, the transaction will trigger the cooling-off mechanism. In such cases, the transaction — along with subsequent outgoing payments — will either be delayed for 24 hours or automatically declined. This measure applies only to electronic fund transfers made through mobile banking apps or internet banking. Transactions conducted at bank branches or ATMs, such as cash withdrawals or over-the-counter services, are not affected. Certain categories of transactions are exempted, including: • Standing instructions for recurring transfers • Regular GIRO / eGIRO payments • Bill payments to recognised institutions (e.g., utilities and telecommunications providers) as determined by the bank When a transaction is delayed, the bank will immediately notify the customer via the mobile banking app or internet banking platform. If the transaction is legitimate, no further action is required, and the system will automatically release the funds after 24 hours. The aim of this cooling-off mechanism is to combat scams involving rapid electronic fund transfers, giving customers a period to review and verify their transactions — and to prevent significant financial losses caused by impulsive or fraudulent actions.