DEBIT

Reference Guide for On-boarding

RuPay Kisan Card and RuPay Debit Card
GIZ NABARD Rural Financial Institutions Programme
in Cooperation with NPCI
Imprint
Published by:
Deutsche Gesellschaft fr Internationale
Zusammenarbeit (GIZ) GmbH

GIZ NABARD Rural Financial Institutions Programme

Contact:
Dr. Detlev Holloh, Programme Director
Deutsche Gesellschaft fr
Internationale Zusammenarbeit
(GIZ) GmbH

L-20, Green Park (Main)

New Delhi 110 016 / INDIA

Phone: +91-11-2652 6024

Telefax: +91-11-2652 8612
Email: detlev.holloh@giz.de
Homepage: www.giz.de

Responsible:
Amit Arora
amit.arora@giz.de

Author:
Sunil Aggarwal

Editor:
Nitin Jindal

Design/Layout:
artworkstudiosk39@gmail.com

Second Edition
New Delhi, October, 2013

DISCLAIMER
Since the guide addresses all SCBs and DCCBs in India, it is possible that the requirements of some banks do not fit into the defined
processes. The contents are indicative and supporting in nature. Also the cost heads mentioned in this document are indicative in nature.
While every care has been taken to ensure accuracy, banks are advised to exercise their own due diligence and treat this guide only as an
additional point of reference.
 Reference Guide for On-boarding
RuPay Kisan Card and RuPay Debit Card
GIZ NABARD Rural Financial Institutions Programme
in Cooperation with NPCI
Preface

Definition of Payment System the contract governing the relationship among

the system participants, the rules and regulations
Payment System is a unique and critical part which deal with the operation of the payment
of banking activities. This has been regulated system, the terms and conditions of authorization
under the Banking Regulations Act 1949 and and the directions given by the RBI from time to
the RBI Act 1934. The advent of electronic time.
payment system resulted in the paradigm shift in RBI is authorized to issue directions to a payment
the way the banking is done. It has given birth system or system participant to cease or desist
of Anywhere Anytime Banking and a host of from engaging in any act, omission or course of
new products, services and conveniences like conduct or direct it to perform any acts as well
paperless, cash less payments. It also resulted in as issue general directions in the interests of
need to expand the scope of regulations to include the smooth operation of the payment system.
electronic payment systems. Accordingly, in RBI is empowered to revoke the authorization
2007, an Act was passed, namely the Payment and granted by it, if the system provider contravenes
Settlement Systems Act, 2007 (PSS Act) and the any provisions of the Act or Regulations, fails
governing regulations were enacted vide Payment to comply with its orders/ directions or violates
and Settlement System Regulations, 2008. the terms and conditions under which the
PSS Act defines the payment system as a system authorization was granted to it.
that enables payment to be effected between a payer RBI has since authorized several payment system
and a beneficiary, involving clearing, payment operators of pre-paid payment instruments,
or settlement service or all of them, but does not card schemes, cross-border in-bound money
include a stock exchange or clearing corporations transfers, ATM networks and centralized clearing
set up under stock exchanges. To decide whether arrangements. RBI is empowered to prescribe
a particular entity operates the payment system, it the format of payment instructions, size and
must perform either the clearing or settlement or shape of instructions, timings to be maintained
payment function or all of them. by payment systems, manner of funds transfer
Under the PSS Act, RBI is the designated criteria for membership including continuation,
Authority for regulation and supervision of the termination and rejection of membership, terms
Payment Systems and for matters connected and conditions for participation in the payment
therewith or incidental thereto. In terms of the system etc.
provisions of the Act, no person other than the For operating various Retail Payment Systems in
RBI can commence or operate a payment system India, an umbrella organization has been setup,
in India unless authorized by the RBI. The namely National Payments Corporation of India
RBI is empowered for authorizing, prescribing (NPCI).
policies and setting standards for regulating and
supervising the payment and settlement systems Current Payment Systems
in the country. Any unauthorized operation of a
payment system would be an offence under the The Payment Systems currently in use include
PSS Act and accordingly liable for penal action clearing of cheques/demand drafts/pay orders,
under that Act. money transfers through ECS/NEFT/RTGS,
Further, the system provider is required to card operations (Debit/Credit/Pre-paid) through
operate the payment system in accordance with ATM/POS/Internet, Mobile Banking, Internet
the provisions of the Act and the Regulations, Banking etc., described briefly below:

iii
 1. Paper Based Clearing Cheque/DD/ PO ii) Regional ECS (RECS)
etc Operating at 9 centres/locations across the
country. RECS facilitates the coverage all
Payment System operated by RBI/ designated core-banking-enabled branches in a State or
banks at different locations group of States and can be used by institutions
Membership - Direct/Through Sponsor Bank desirous of reaching beneficiaries within the
Types of Clearing Non MICR Clearing/MICR state/group of states
Clearing/CTS (Cheque Truncation System) Confined to the bank branches within the
jurisdiction of a Regional office of RBI
Pre-requisite: Clearing Membership at the
2. Electronic Clearing Service (ECS) location and CBS
iii) National Electronic Clearing Service (NECS)
ECS is an electronic mode of payment / receipt for The centralized version of ECS Credit, being
bulk transactions that are repetitive and periodic in operated at Mumbai and facilitates the
nature. Once the customer subscribes to the facility coverage of all core-banking enabled branches
by giving a mandate (authorization), the funds are located anywhere in the country
transferred on the due date from/into the bank Operated by: National Clearing Cell (NCC)
account electronically. ECS is of 2 types ECS RBI, Mumbai
Credit and ECS Debit, briefly described below: Pre-requisite: Clearing Membership at
Mumbai and CBS
a. ECS CreditFor affording credit to a large
number of beneficiaries (like distribution 3. NEFT and RTGS
of dividend, interest, salary, pension, etc.,)
having accounts with bank branches at various One-to-one Inter-bank funds transfer for
locations within the jurisdiction of an ECS individuals /corporate
Centre by raising a single debit to the bank Real Time Gross Settlement (RTGS) Online
account of the user institution. transfer during business time. Minimum
b. ECS Debit For raising debits to a large number amount Rs.2 lac. Each transaction payment is
of accounts (like payment of telephone/ settled between remitting and recipient banks
electricity/water bills, cess/tax collections, loan independently at the time of remittance
instalment repayments, periodic investments National Electronic Funds Transfer (NEFT)
in mutual funds, insurance premium etc.) Remittance in hourly batches during business
maintained with bank branches at various hours. No minimum and maximum amount
locations within the jurisdiction of an ECS limit. Inter-bank settlements at hourly intervals
Centre for single credit to the bank account of RTGS System is also used by banks for their
the user institution. inter-bank settlements for various types of
transactions, like:
ECS Centres a) Remittances
b) Purchase of government securities (through
i) Local ECS Clearing Corporation of India Ltd.)
Operating at 81 centres / locations across c) ATM/Micro-ATM/PoS Transactions
the country. At each of these ECS centres, (through National Payment Corporation of
the branch coverage is restricted to the India Ltd.),
geographical coverage of the clearing house, The System is operated by the National
generally covering one city and/or satellite Clearing Cell, RBI, Nariman Point, Mumbai
towns and suburbs adjoining the city Banks have to fulfill terms and conditions
Operated by: RBI/ Designated Banks at prescribed by RBI to become member
different locations of the System. Those unable to meet the
Pre-requisite: Clearing Membership at the conditions can become sub-member through
location sponsorship by an existing member.

iv
4. Card Based Payment System Credit/ to offer mobile banking after obtaining necessary
Debit/Pre-Paid permission from RBI
Provided by: NPCI through its existing NFS switch
Card Payment Network operated by NPCI/ Pre-requisite Bank should have mobile
Visa/Master Card banking licence from RBI, CBS and Mobile
Pre-requisite: Membership Direct/through banking application.
Sponsor Bank and CBS Electronic Payment Systems have been adopted
The Cards enable the customers to effect quickly by the commercial banks, which has
payment through ATMs/Micro-ATMs/Point of brought unprecedented benefits to them. RRBs
Sales Terminals (PoS) and Internet have also moved forward with the support of
their sponsor banks. SCBs and DCCBs in India
5. Internet Banking, Bills/Taxes Payment have also now embarked upon the mission of
and E-Commerce on-boarding the Core Banking Solution and
Electronic Card Payment Systems. Some SCBs
Customers can use Internet channel for payments. have taken the lead for themselves as well as for
Banks provide access to account through Internet the DCCBs under their fold. Some DCCBs have
to their customers for transfer of funds in own moved forward of their own.
account, remittance to others accounts, bills/ This Reference Guide has been prepared with
taxes payments, payment for purchase of goods/ a view to support these banks in on-boarding
services etc. Electronic Card Payment Systems. The reference
points are intended to draw attention to key
6. Mobile Payment System (Immediate points which the banks should keep in mind while
Payment System) selecting Card Payment System and to improve
understanding of the systems to avoid pitfalls and
Only banks, licensed and supervised in India and adopt processes which led to successful adoption
having physical presence in India are permitted of the system by members of the peer group.

Contents | v
 Table of Contents

Title Page

Introduction.......................................................................................................................... 1

RuPay Kisan Card/ RuPay Debit Card- Procedure for On-boarding.................................. 3

1. Compliance with the Guidelines Issued by NPCI.............................................................. 5

2. Acquisition of Card Payment Switch (with Card Management System)............................. 6

2.1 Option 1 - Acquisition of the Card Payment System on Ownership Basis.................... 6

2.2 Option 2 - Acquisition of the Card Payment System on ASP Model............................. 7

2.3 NABARDs Financial Support........................................................................................ 8

3. Membership of National Financial Switch (NFS)............................................................... 9

3.1 Direct Membership......................................................................................................... 9

3.2 Sub Membership............................................................................................................. 9

4. Printing of Cards, PINs and Welcome Kits........................................................................ 12

4.1 Cost Components........................................................................................................... 13

4.2 Procedure for Getting IIN from NPCI............................................................................ 13

4.3 Standard Operating Procedure........................................................................................ 14

4.4 NABARDs Financial Support for Introduction of RuPay Kisan Card............................. 14

5. Installation of PoS/MICRO-ATM...................................................................................... 16

5.1 Key Features.................................................................................................................... 16

5.2 Key Components of PoS/Micro-ATM Facility................................................................. 16

5.3 Acquisition of PoS/Micro-ATM Switch Module.............................................................. 17

5.4 Acquisition of PoS/Micro-ATMs..................................................................................... 18

5.5 NABARDs Support for Installation of PoS/Micro-ATM................................................ 18

Contents | vi
Title Page

6. Installation of ATM........................................................................................................... 22

6.1 Acquisition of ATM Switch Module................................................................................... 22

6.2 Acquisition of ATMs.......................................................................................................... 23

6.3 Prominent ATM Manufacturers and ASP Vendors for ATM ................................................ 24

6.4 NABARDs Support for ATM............................................................................................ 25

Annexure A-ATM Transaction Flow...................................................................................... 26

Annexure B - Vendors Approved by NPCI for Card Design & Manufacture........................ 28

Annexure C - Format for Submitting KCC Proposal - Cooperative Banks........................... 30

Glossary................................................................................................................................. 32

Contents | vii
 Introduction

Photographs by Enrico Fabian

Having migrated to CBS, the natural progression the software solution called Switch. The
for the cooperative banks is to on-board transactions on banks own alternate channels
electronic Card Payment System to be able to are routed through the Switch to the banks
offer Anywhere Anytime Banking Services to CBS. To facilitate transactions of cards issued
their customers and to provide short term credit by other banks, the Switch should be connected
facility to farmers through RuPay Kisan Card to NFS so that such transactions are transmitted
(KCC Card). It would help the farmers to get to respective banks Switch. Those other banks
banking facilities at their door step on a 24 x 7 Switches should however be similarly connected
basis across all locations through ATMs/PoS/ to the NFS.
Micro-ATMs (alternate channels). To connect to the NFS, the banks have to
The salient features of the Card Payment System secure membership of the same from NPCI.
are: Banks can become direct member or can go
These alternate channels of the bank are through another existing member bank under
connected to the banks CBS through the Sponsorship Scheme.

1
 The international transactions through Card and PIN in case of ATM
International Debit/Credit Cards are routed to Card, PIN and/ or Signature in case of PoS
the concerned Network Service Provider Visa/ Card and Biometric Identification in case of
MasterCard/American Express/Diners Card Micro-ATM
etc. NFS has recently entered into a strategic The Card related transaction on Internet
alliance with Discover Financial Services (DFS) Banking is routed through Internet Module of
to expand its reach to international transactions. CBS to the Card Payment Switch for validation
These being card based channels, banks require of the Card related information; and thereafter
a Card Management System (CMS) which it is relayed to the CBS.
contains the requisite information about The Switch for Mobile Banking is independent
the cards account holders name, account of the ATM and POS/Micro-ATM Switches,
number, card number generation & updation having its own logic, processing and operating
logic, password, PIN Management, hot listed system.
cards, expired cards, biometric record etc. It The Cards are linked in the CBS to the
validates the authenticity of the card before the respective KYC Compliant Accounts
transaction is transmitted to the CBS through The banks are required to print cards, PIN
the Switch for completing the transaction. mailers and Welcome Kit etc. Most of the banks
It is not necessary for a bank to have ATM, find it beneficial to outsource these activities to
PoS or Micro-ATM to introduce Card Based approved vendors.
Electronic Payment System as the Card Holder To facilitate inter-bank transactions within the
is free to use the Card at these alternate channels country relating to ATM, PoS, Micro-ATM
installed by other banks in the network. It and Mobile Banking, National Financial Switch
would be however necessary for these banks to (NFS) has been setup by NPCI. To be a part of
have EFT Switch with the CMS Solution. As the inter-bank payment through these channels,
and when the bank intends to install its own it is necessary that banks become member of
ATM and/or PoS/Micro-ATM, it has to add NFS and arrange connectivity of their Switches
ATM and/or PoS/Micro-ATM module(s) to the to NFS. For international card transactions,
Switch. In all there would be 5 modules in the currently Visa and MasterCard services are
Card Payment Switch Switching system, Card being availed. NPCI also has started issuing
Management System, ATM Module, the PoS/ International Chip Cards recently in association
Micro-ATM Module and the Host Security with Discover Financial Services.
Module (HSM). Annexure A contains the Transaction Flow of
The validation of a card initiated transaction is ATM/PoS/Micro ATM transactions.
through

Contents | 2
 RuPay Kisan Card/ RuPay Debit Card
- Procedure for On-boarding

The RuPay Kisan Card and RuPay Debit Card routed through the multi- lateral network created
are plastic cards issued by banks to the farmers by NFS to reach the Issuer banks switch /CBS.
and other customers to extend the facility of To enable the aforesaid, the bank is required to
Anywhere Anytime Banking. The Card Holder take multiple steps which are briefly described in
is able to use the Card at any ATM, PoS, and table below.
Micro-ATM or through Internet (alternate chan- The activities to be undertaken under each step
nels / delivery channels) to con- duct financial can be broadly divided into following six seg-
and non-financial transactions. All transactions ments:
done at the above delivery channels of the Card 1. Compliance with the Guidelines issued by
Issuer Bank are routed through the switch to the NPCI
CBS of the bank. The transactions done at the 2. Acquisition of Card Payment Switch (with the
alternate delivery channels of other banks are Card Management System)

Steps for on-boarding the Card Payment System

1 Acquisition of Switch and Card Management System

OR
Engaging an ASP Vendor for providing Switch and Card Management Services. (NPCI has displayed list of
Vendors having required certification. Other Vendors will require prior NPCI certification)
2 Bank to obtain Membership of NFS from NPCI after complying with specified terms and conditions OR
3. Banks to become Sub Member through Sponsorship by an existing Member bank (For easier connectivity,
the Banks may keep in mind the Switch taken by the Sponsor Bank while selecting Switch Vendor/ASP)
4 Linking ASP Vendors Switch with Switches of DCCB
5 Internal certification with identified ASP and Banks CBS for conforming readiness to NPCI for certification
6 Selection of Card Vendor (certified by NPCI)
7 Submission of application to NPCI for IIN assignment
8 Submission of Documents to NPCI for Risk Assessment & Compliance evaluation
9 Finalization of Card Design as per NPCI card specifications
10 Submission of card design for approval from NPCI
11 Submission of embosser file with CVD values and track 1 & 2 data to NPCI for validation
12 Placing order with Card Vendor for printing of test cards
13 Submission of 30 test card plastics, card details & Requirements template to NPCI
14 Carrying out the Host to Host Testing & Certification round as per RuPay Specs and NPCI specified TAT.
15 Bank and NPCI to sign off successful testing on the UAT scripts
16 Pilot Go Live with 4 to 5 identified Members
17 Reconciliation & accounting conformation from the bank on pilot go live process
18 Full go Live

3
3. Printing of Cards, PIN mailers and Welcome Switch and (3) Printing of Cards/Pin. (4) PCI &
Kits other certifications done by ASP.
4. Membership of National Financial Switch It is not necessary to install PoS/Micro- ATM/
(NFS) ATM. However, the Card Issuing Bank has to
5. Installation of PoS/Micro-ATM pay Inter-change Fee to the Bank which owns the
6. Installation of ATM ATM/Micro-ATM on which the Card is used. In
The key points relating to each of the segment case of use at PoS, the Card Issuing Bank is enti-
have been described below with the aim to help tled to receive a part of the commission received
the banks in selection of the appropriate solution, by the bank owning the PoS. The rates of pay-
hardware and the vendor, evaluation of costs, fol- able fee and receivable commission are advised by
lowing the process for joining the payment sys- NPCI. Banks generally prefer to install their own
tem, commissioning of the solution, ensuring ATM/Micro-ATMs at locations having large us-
the security, managing technology upgrades and age of the Cards issued by them.
growth etc. Banks are advised to exercise due diligence and
It may be noted here that the mandatory activities consider these guidelines only as a support in
for on-boarding the Card Payment System are their endeavour.
(1) Membership of NFS (2) Acquiring Payment

Contents | 4
 1. Compliance with the Guidelines
Issued by NPCI

Following are the key steps required to be taken e. Allotment of IIN for RuPay Debit and RuPay
by banks for on-boarding the RuPay Card Pay- Kisan Card by NPCI
ment System: f. Sharing of card design files and RuPay card
a. Obtain Board approval for Direct/Indirect specification by NPCI
membership of the Payment System. g. Sharing of sample embosser file and test cases
b. Submit application to NPCI alongwith the by the Bank to NPCI
board approval, copy of RBI License, bal- h. On successful testing, bank would be ready
ance sheet and other documents prescribed by to go live directly / under sub-membership of
NPCI, for obtaining Institution Identification Sponsor Bank
Number (IIN). Banks are advised to visit website of NPCI (www.
c. Tie-up with a Sponsor Bank in case of Indirect npci.org.in) for detailed guidelines in the matter.
Membership and submit the IIN application Besides, NABARD has published A Compre-
to NPCI, with the Sponsorship letter from the hensive Handbook on Card Terminology, FAQs
Sponsor Bank. and NABARD Guidelines for providing card
d. Alongside, the bank to proceed with the selec- enabled ser- vices by Regional Rural Banks and
tion of the card vendor from the approved list Cooperative Banks. It is hosted on the web site
of NPCI. The technical specifications of the of NABARD. The banks will find the handbook
Card are to be as per NPCI defined standards extremely helpful in implementing the Card Pay-
ment System.

5
2. Acquisition of Card Payment Switch
(with Card Management System)

Banks can acquire Card Payment Switch on 2.1 Option 1 - Acquisition of the
Owner- ship basis as well as under ASP Model. Card Payment System on Ownership
Major contributing factors for selection of the
Basis
Option are outlined below:

a. Estimated No. of Cards/No. of Transactions If the bank intends to offer sponsorship to other
If the number of cards is low, it is cost effec- banks or expects large volumes and has sufficient
tive to outsource this activity to ASP rather IT resources, the ownership model may be better
than managing the entire Payment System suited.
which will have a certain minimum cost of
maintenance 2.1.1 Selection of Software Solution
b. Cost of Acquisition of the Card Payment
Switch The cost of acquiring Payment Sys- Following key points are to be given due consid-
tem has a certain minimum cost. If the volume eration:
of transactions is not likely to be high in the a) Certification by NPCI
medium term, it may be worthwhile to opt for b) Adherence of the Switch to all the Technical
ASP Model. The cost benefit needs to be as- norms & security guidelines as per RBI &
sessed appropriately. Over the period of time, NPCI requirements
it is also likely that the technology and/or me- c) Licensing Terms -
dium undergo changes which may call for ad- i)  Limitation on the Number of Transac-
ditional expenses. That can be avoided in ASP tions/Cards/Channels/Devices present
Model or future
c. Plans to offer sponsorship to other banksIn ii) Right of use by Associates/BCs/Agencies/
case a bank intends to be the sponsor for other Subsidiaries
banks, it may be advantageous to select own- d) Price Points
ership basis i)  Inclusions: Application Software, System
d. Availability of IT Resources The availability Software, Connectivity with Host & NFS,
of IT resources in the bank to manage the Pay- Project Implementation, Training/Support
ment System is a key factor for taking decision ii) One time Licence Fee and recurring fee etc.
in favour of ownership basis iii) Exclusions: Hardware, third party software etc.
e. Financial Resources The upfront cost of ac- iv) Customization cost
quiring Payment System is required to be seen e) Integration with the CBS/Implementation
in the backdrop of financial strength of the Turn Around Time
bank f ) Customization requirements and time lines
f. Available Roll-out time The ownership basis g) Availability of regulatory and normal reports
model would require time to setup the Payment h) Support for additional/future MIS require-
System. In view of most of the banks running ments
behind projected time-lines, ASP Model would i) Training to Implementation Team& other staff,
be better suited. The readiness of the technol- support methodology
ogy base would be a key factor j) Performance Warranties, Quality Assurance,

Contents | 6
 Certifying Authority, Date, Validity etc. This Model is considered a value proposition for
k) Problem/Critical Support Management Sys- the DCCBs in the background of limited volume
tem and Turn Around Time and IT resources, need for quick turn-around-
l) Terms of Annual Maintenance/Technical Sup- time and savings of capital costs.
port, Period of validity of rates
m) Future Versions upgrade, release terms, fre- 2.2.1 Selection of Vendor
quency, management of existing Version
n) Solvency of the Vendor for sustained support The Switch of the ASP Vendor needs to be certi-
in the medium/long term fied by NPCI. The certification process followed
o) Reference Check with an existing client by NPCI ensures that the ASP Vendor has requi-
onsite visit site wherewithal to undertake the activity on the
p) Security from external threats - hacking/in- sustainable basis, ensuring security and safety.
tervention ASPs compliant of laid down specifications need
q) Hardware requirement and other dependen- certification by NPCI to be able to offer services
cies to the Banks. At present following nine (9) ASPs
r) Turnkey options Software/Hardware/Com- are providing services to the bank as per norms
missioning and initial hand-holding specified NPCI. The list is subject to revision
from time to time and therefore banks are advised
2.1.2 Selection of Hardware to get in touch with NPCI for updated status at
the time of selection of the Vendor:
a) Technical specifications as per Software Solu- 1. FIS Solutions
tion 2. C-edge
b) Sizing of Capacity to take care of at least me- 3. Euronet Services
dium term requirements 4. Sarvatra Technology
c) Delivery Period, dependencies 5. Thane Janata Sahakari Bank
d) Complaint Management System Methodol- 6. Shyamrao Co-operative Bank (Maximus and
ogy for resolution of problems, Turn Around Narada Switch)
Time, Critical Support Management System 7. Saraswat Co-operative Bank
e) Annual Maintenance Contract/Annual Tech- 8. Finacus
nical Support Terms 9. E-Cosmos Solutions (Cosmos Bank)
f) Reference Check with any existing client
onsite visit 2.2.2 Banks need to look into the following
g) Solvency matters, inter-alia:

2.2 Option 2 - Acquisition of the a) Licensing Terms -

i) Limitation on the Number of Transactions/
Card Payment System on ASP
Cards/Channels/Devices present or future
Model ii) Right of use by Associates/BCs/Agencies/
Subsidiaries
The Model relieves the bank from the efforts in- b) Price Points
volved in setting up their own Switch. The ASP i) Fixed Cost (one time for Integration/
Vendor owns the Switch and undertakes the entire Inter-facing with Bank and NPCI), Com-
operating activity at its own location on a shared missioning
basis, providing the service to many banks. It has ii) Transaction (Switching) Fee - Financial
the connectivity with the NFS already in place, if Transactions/Non-financial Transactions
its duly certified by the NPCI. The ASP Vendor iii) Basis of Fee Fixed or per Transaction, Flat
also possesses the DR site for the Switch. Only Rate or Graded on the basis of Volume , all
connectivity with the CBS of the client bank is inclusive or any exclusion, any minimum
required which significantly cuts down the time per month criteria
and costs. iv) Project Implementation, Training/Support

7
 v) Exclusions: Hardware, third party software k) Quality Assurance, Certifying Authority, Date,
etc. Validity etc.
vi) Customization cost l) Problem/Critical Support Management System
c) Customization requirements and time lines and Turn Around Time
d) Availability of regulatory and normal reports m)  Warranties for Performance (uptime) and
e) Support for additional/future MIS require- Data Security
ments n) Solvency of the Vendor - for long term suste-
f ) Turn Around Time nance and support
g) Implementation time, training to Implemen- o) Reference Check with an existing client
tation Team and others, support methodology onsite visit
h) Hardware requirement and other dependen-
cies 2.3 NABARDs Financial Support
i) Data Centre Integrity, Safety and Confidential-
ity Cost of integration charges between POS and
j) DR site at a different seismic zone CBS server On reimbursement basis.

Contents | 8
 3. Membership of National Financial
Switch (NFS)

The bank should consider following points before c) Bank should be on CBS for all its Branches,
deciding the mode of membership: RO, HO and extension counters.
a) Direct Membership may not be a cost d) Bank should be a direct RTGS Member of RBI
effective proposition if the volumes are not e) Bank should have HSM and Card Management
sufficient System*
b) Scope of sponsoring other banks If the f) Should have ATMs and the ATM Switch
bank intends to be the sponsoring bank, networked with the NFS*
direct membership is suitable in line with the g) Should have EFT Switch* as per NPCIs
Banks technical & operational capabilities. technical criteria & adhering to security
Otherwise, it may be better to opt for guidelines of RBI
sponsorship model h) Should have DR&PR site for Data Centre*
c) Sponsorship model can prove to be quite a and Switch
value proposition if the tie-up terms are well i) Bank to own responsibility to carry out
negotiated. Following benefits can accrue: Clearing & Settlements
i)  Migrating to Payment System would Daily 3-way Reconciliation
be quick as technical issues relating to Dispute Management
approval of the switch, establishment of Fraud and Risk Management
link with NFS etc., would stand addressed. *Own or Sharing Basis
Only link with ASPs switch would need to
be established. 3.1.2 Technical Eligibility Criteria
ii) Sponsoring banks ATM/ PoS network
may be available for Card Holders without a) Use of HSM (External Host Security Module)
any interchange costs. for encryption and decryption
iii) 
Sub Membership would overcome the b) FIPS 140-1/140-2 or FIPS 197 certified crypto
requirement of two rounds of testing. Only product (HSM Standard)
one round of UAT would be required. No c) Pin Generation and verification using HSM
comfort Testing would be required as the d) ATMs and POS should have unique Key per
ASP would already be certified. terminal
e) 
Use of Double length Triple Des keys for
3.1 Direct Membership terminals and translations
f) Mandatory PIN, CVV1 and expiry date
Bank fulfilling the following General and verification by issuers
Technical Eligibility criteria can apply to NPCI g) PCI DSS compliance for Switch PR & DR
for direct membership.
3.2 Sub-Membership
3.1.1 General Eligibility Criteria

a) Bank should have valid Banking License from 3.2.1 Salient Features:
RBI.
b) Bank should have Current A/c with RBI a) Since most of the DCCBs are not member of

9
 RTGS, they tie up with the Direct Member h) Fraud and Risk Management #
Bank of the NFS.
b) Under the terms of agreement the Sponsor # Responsibilities can be shared with Sponsor Bank
Bank assumes the role of the Settlement & ASP
Banker / Sponsor Bank for these DCCBs.
c) The DCCB has to open a current account with 3.2.3 Technical Eligibility Criteria Own or
the sponsor bank and keep it funded as per through ASP
mutual arrangement for settlement.
d) The Banks customer will have cards having a a) PIN generation & verification using HSM
unique IIN issued by NPCI for RuPay Debit b) HSM for PIN encryption & decryption
Cards. c) Mandatory Pin, CVV1, Expiry date verification
e) The Banks would have tie-ups with various by issuer
ASP/TSPs who automate their inter-branch d) Switch duly certified by the NPCI
network, establish ATMs & issue ATM cards. e) Debit Card Management System
f ) Since considerable investment and expertise f ) Switch to be PCI-DSS compliant
is required to setup Payment Switch, smaller
banks normally use the services of ASP for 3.2.4 Documents to be submitted by the Bank
Payment Switch on sharing basis. to NPCI to initiate the on-boarding of the
g) ASP usually has a switch-to-switch tie- Bank as sub member
up between the NFS switch and its Switch
through which multiple co-op banks CBS a) Sponsorship letter from the Sponsor bank
are connected. The bank would therefore be introducing the Bank as sub member and the
required to only arrange connectivity between ASP.
its CBS and the Switch of ASP. b) Approach paper from Sponsor Bank (if new)
h) Sub-Member can act both as Issuer and c) Approach paper from ASP (if new)
Acquirer also d) Board resolution from Sponsor Bank for
i) As a sub member the Bank incurs the costs participation in the Sponsor Bank Model of
towards NFS (if new)
i) Switch sharing with the ASP/Sponsor Bank e) Duly filled & attested Risk Checklist from the
ii)  Card production, personalization and
 Bank
issuance f ) A copy of RBI license issued to the Bank
iii) Rs. 0. 50 per transaction as switching g) Duly filled and attested Network compliance
charges to NPCI for Off-us transactions checklist from the Bank
iv) Interchange @ Rs. 15/- + Service Tax for h) Audited balance sheet of the Bank for last 3 years
Financial Transaction and Rs.5/- + Service i) A copy of CAMEL ratings of the Bank
Tax for Non-Financial Transactions to j) KYC & AML Compliance Undertaking
Acquirer Banks for Off-us transactions k) Status Form of OC 47 - Disabling Cash
Retraction Facility in ATMs, if the Bank has
3.2.2 General Eligibility Criteria deployed own ATMs
l) Network Diagram between sub-member Bank
a) CBS Implementation &the ASP
b) Sub membership through sponsorship by an m) IIN Request form & Cover letter from Bank
existing NFS Direct Member Bank n) Application for joining NFS as sub-member
c) EFT Switch Own or through ASP and annexure from Bank
d) RTGS Member - Direct or through Sponsor o) Bank Information Sheet from the Bank
Bank p) Non-Disclosure Agreement
e) DR/PR site for Data Centre* Own or q) Sub-membership Undertaking
through ASP r) RuPay Membership Agreement
f ) To carry out Clearing & Settlements # s) Tri-partite agreement to be executed between
g) Reconciliation& Dispute Management # Sponsor Bank, Sub-member & NPCI.

Contents | 10
 3.2.5 Standard Operating Procedure f) All transactions would be routed through
Liquidity Manager first and only successful
a) The Sponsor Bank will handle the settlements transactions would be sent to sub member
on behalf of the sub-member bank and will through ASP
indemnify settlements on the NFS network on g) The Sponsor Bank will check its Issuer/Acquirer
behalf of its sub member bank. The Sponsor activity reports and other MIS received from
Bank and the sub member bank will have NFS and settle its accounts accordingly with
an internal settlement mechanism mutually the DCCB at mutually decided intervals.
decided by both entities. h)  The Sponsor Bank will refer to the NFS
b) DCCB will forward the customer complaint to generated Issuer Activity reports and other
the Sponsor Bank (who would already have a MIS to settle transactions under the specific
Dispute Management mechanism in place by DCCB IIN number i.e. for doing recon.
virtue of being a part of the NFS network). i) The Sponsor Bank will be responsible for DMS
The Sponsor Bank will raise the dispute in on behalf of the DCCBs.
its DMS using its DMS ID assigned to the j) Separate DMS report for net settlement and
Sub-member. Complaint will be solved as per other reports would be generated for the
normal procedure &a solution will be provided Sponsor Bank in respect of the sub member
to sponsor bank which in turn will provide the k) Separate DMS IDs would be created for
same to the DCCB Sponsor Bank to capture DMS related issues
c) NPCI will settle all DCCB transactions with for the sub members
the Sponsor Bank as a part of the consolidated l) NPCI would tag sub member to its Sponsor
settlement of the sponsor bank. It will be the Bank and the ASP
responsibility of the Sponsor Bank to settle the m) ASP should be certified by the 3rd Party SISA
same with the DCCB. Certified Auditor
d) Sponsor Bank would inform NPCI to maintain n) Technical Certification for NFS connectivity
the limits into the Liquidity Manager and would be done by NPCI
NPCI would do the same and confirm back to DCCBs need to lay down detailed Procedure
Sponsor Bank. for operating under Direct/Sub Membership,
e) 
Limits with respect to the Sub-Member, liquidity management, reconciliation, dispute
as advised by the Sponsor Bank would be management etc.
captured in the Liquidity Manager

Differences in Direct membership and Sponsor Bank (Sub-member) Model

Requirements Direct Members Sub Members

CBS implementation Yes Yes
EFT Switch Yes/ Can be on Share basis Yes/Can be thru Sponsor Bank
Connectivity to NPCI Yes/ Can be on Share basis No/ Can be thru ASP
RTGS member Yes No/ Can be thru Sponsor Bank
DR/PR site for data center Yes/ Can be on Share basis No/ Can be thru ASP
HSM for Pin encryption /Decryption Yes/ Can be on Share basis No/ Can be thru ASP
Debit Card Management System Yes/ Can be on Share basis No/ Can be thru ASP
Acquiring facility on your switch Yes/ Can be on Share basis No/ Can be thru ASP
To carry out Clearing & Settlements Banks Own responsibility Responsibilities Can be shared with Sponsor Bank& ASP
Recon & Dispute Management Banks Own responsibility Responsibilities Can be shared with Sponsor Bank & ASP
Fraud & Risk Management Banks Own responsibility Responsibilities Can be shared with Sponsor Bank & ASP

11
4. Printing of Cards, PINs and
Welcome Kits

Banks are required to print cards and PIN mailers network operating rules and regulations
for the Card. Following type of practices are d. 30 test cards have to be sent for testing
followed by different banks in this regard: e. The test cards may or may not have the art
work; white plastic cards also can be sent.
a) RuPay Card Details But the cards have to contain the dummy
a. The Card production and design vendor Primary Account Number and a PIN
need to be certified by NPCI f. Numbering Structure of the Card Number
b. Bank has to adopt the standardized card i) Card number consists of 16 digits
design and specifications laid down by ii)  First 6 digits are to identify Issuer
NPCI for the Kisan Cards Identification Number (the Bank)
c. The cards must be able to perform successful iii) Last digit (16th) is the check sum digit
transactions on all NFS ATMs under NFS (system generated digit to verify account

Contents | 12
 number) ii) Many other banks opt for outsourcing the
iv)Digits number 7 to 15 (9 digits) are for use entire activity of printing the card & the PIN
by the Bank. Out of this, first 2 i.e. 7th and 8th mailers as well as preparing the Welcome Kit.
are for product differentiation. Remaining 7 e) Third Party Vendor Selection
digits can be used to identify the card holder. The Vendor needs to have requisite technical
Separate IINs are issued for RuPay Kisan Card expertise, resources and credibility to
and Aadhaar based cards. undertake this very critical activity. The very
b) Issuance of Card/Welcome Kit basis of transaction being the Card and the
i) INSTA CARDS - Some Banks offer Welcome PIN, the activity has to be carried out in high
Kit to their customers, containing Card and the level of secured and confidential environment.
Welcome Letter. The PIN mailer is not separately NPCI has prepared a panel of approved card
delivered to the customer and is in the welcome vendors. The List of such vendors approved by
kit itself. These Cards are not customized i.e. they NPCI for card design & manufacture is given
are not pre-linked to an account and dont carry in Annexure B
customers name. The non-personalised Cards
(Insta Cards), contained in the Welcome Kit 4.1 Cost Components
are delivered to the branches who hand-over the
same to Customers after duly linking the same to There are several components of the cost in respect
their Account. of preparation of Card/PIN mailer/ Welcome
ii) PERSONALIZED CARDS - Some banks Kit, like:
opt for issuing personalized cards, carrying a) Integration, interfacing and host certification
the name of the Card Holder. In this case - onetime cost
PIN is delivered separately to the customer. b) Card Designing - onetime cost
c) Delivery of Cards/PINs c) First 100 Card printing onetime cost
d) PIN Generation per PIN
e) Printing of Card, Personalization, PIN mailer
printing, Welcome Kit, collation and courier

4.2 Procedure for getting IIN from NPCI

a) The Bank should apply for IIN in the prescribed
IIN Request form provided by NPCI
b) The request form has to be duly signed by
the designated authority of the DCCB, duly
Card Personalization Bureau stamped with the seal and sent to NPCI
along with a covering letter on the DCCBs
The process of delivery of the Card, PIN letterhead and a copy of the banks RBI license.
mailer and the Welcome Kit is also different The Sponsorship letter from the Sponsor bank
in various banks. Some route everything from should also be attached.
their Central Office. Many banks have an c) The IIN will be valid only for the product
arrangement with the Vendor for supplying applied for and any other product variation(s)
the Welcome Kit directly to the branches as using the same IIN would require separate
per Indent sent to the Vendor. PIN mailers are approvals
sent separately in case of (personalized cards), d) Th
 e Bank may request for a single IIN if it
usually by the bank, either through the branch has the capability of product differentiation
or directly to the Card Holder. at 7th and 8th Digit of card number. However
d) Printing of Cards for RuPay Debit, RuPay Kisan Card and
i) 
Some banks print PIN mailers in-house. Aadhaar based cards, NPCI will issue
Similarly, they compile the Welcome Kit also. separate IINs
Only Cards are procured from the Vendor. e) 
NFS operating guidelines and all circulars

13
 issued under NFS will be applicable for the switch files
cards issued under the IIN xiv) 
Generation and monitoring reports
transaction, exception etc.
4.3 Standard Operating Procedure
4.4 NABARDs Financial Support for
a) There are several supporting activities which
Introduction of RuPay Kisan Card
the banks are required to undertake to ensure
smooth card operations like With the objective of enabling the clients of
i) Handling of Card/PIN mailer/ Welcome cooperatives to connect with national payment
Kit - Receipt and storage of Card/PIN/ system and avail all types of banking facilities at
Welcome Kit, Distribution, Activation of their doorstep, NABARD has floated a scheme
cards and Operations to provide financial support to cooperative banks.
ii) Servicing of ATM cash loading, collecting
cheques/purged notices, reconciliation of 4.4.1 Eligibility
machine cash etc.
iii) Hot-listing cards, issuing modified/ a) All Cooperative banks which are fully CBS enabled.
duplicate Cards b) The bank has to ensure that certification
iv) Reconciliation standards as specified by various agencies for
v) Complaint and Dispute Management RuPay cards are being adhered to.
vi) MIS Formats
b) Banks should set-up a 24 X 7 Help Desk of 4.4.2 Pattern of Assistance
its own or engage the services of third party
service provider to take care of hot-listing of a) Cost of printing and issuing RuPay Kisan Cards -
lost stolen cards and other urgent customer i) Upto Rs. 25/- per card (should be owned
service related issues. by the bank and conforming to the
standards specified by NPCI). The card
c) It is important that the banks lay down detailed can be a non-personalised card, which can
Standard Operating Procedures to handle be given as a part of the Welcome Kit to
various operational activities such as the customer.
i) Processing of Application from the Account ii)  The concerned Cooperative bank may
Holder at branch and Central Office work out a project report covering the total
ii)  Generation of Card, PIN mailer and number of RuPay Kisan Cards required
Welcome Kit iii) Release of Assistance - Release of the grant
iii) Delivery of the Card/Welcome Kit at the will be in tandem with achievement. i.e.
Branch
iv) Handing over of the Card/Welcome Kit to
On coverage of 25% of 25% of the total
the Account Holder
the operational accounts eligible cost of the
v) Delivery of PIN mailer to the Account cards
Holder On coverage of 50% of 50% of the total
vi) Hot-listing cards, issuing modified/ the operational accounts eligible cost of the
duplicate Cards cards
vii) Product-wise fee management On coverage of 75% of 75% of the total
viii) Card Accounts Management the operational accounts eligible cost of the
cards
ix) Card Renewal & Re-Issuance
On coverage of 100% of 100% of the total
x) PIN Re-issuance
the operational accounts eligible cost of the
xi) Transaction charge management cards
xii)  Fees to be levied on various products
during issuance, renewal, reissuance etc.
xiii)  Reconciliation between network To get real benefit, banks must aim at achieving
association files, CBS files and bank 100% coverage of the operational accounts.

Contents | 14
 4.4.3 Extent of support NABARD informing about number of RuPay
Kisan Cards issued to its farming clientele.
The concerned NABARD Regional Office will
a) 100% in North Eastern Region, Sikkim, Jammu & provide an approval for the same after verifying
Kashmir, Uttarakhand, Jharkhand, Himachal Pradesh, the claim. Later, on a quarterly basis, the
Chhattisgarh and Andaman & Nicobar Islands cooperative bank may approach NABARD for
b) 90% in the rest of the country reimbursement along with system generated
information of the various expenditures.
4.4.4 Duration of Support c) 
It has been recommended by NABARD
that cooperative banks adopt the ASP route
For a period of 3 years. for providing ATM services to their clients
considering the huge capital expenditure
4.4.5 Operationalisation of Scheme involved in establishing and maintaining an
ATM network.
a) Banks to ensure the following before availing d) Banks may apply to NABARD on prescribed
grant assistance from NABARD: Application Form - Annexure C
i)  Banks to sign General Agreement with
NABARD for availing grant assistance, 4.4.6
the details of which can be availed from
Regional Offices of NABARD. In addition, there are various capacity building
ii) Banks to forward a copy of all the agreements schemes of NABARD under Financial Inclusion
signed by the bank with various vendors to Fund (FIF) to help the banks in undertaking
NABARD Regional Offices technology upgradation for their staff and clients.
b) Upon stabilization of the system, the Banks may make use of the support available for
cooperative bank may forward a letter to the same.

15
5. Installation of PoS/Micro-ATM

With the acquisition of Switch and Membership

of NFS, the banks can launch the Cards, as ex-
plained above. However, the card holders will be
able to use these cards only at the ATMs and PoS/
Micro-ATMs of other banks if the Issuer Bank
does not have its own ATMs/PoS/Micro-ATMs.
Before explaining the merits of acquiring ATMs,
the issue of acquiring PoS/Micro-ATM is being
detailed below since it is more important for DC-
CBs to have PoS/Micro-ATMs vis--vis ATMs.

5.1 Key Features

a) PoS is a portable device which is provided to
the Shop/Merchant Establishment where the
Card can be swiped to pay for goods/services.
The card holder is thus relieved of the need
to carry cash to purchase goods and services.
This device is provided to the Shops/Merchant
Establishments by the Acquiring Banks with
a view to earn Fee from the transactions con-
ducted on these devices. In addition, the busi-
ness of these shops/merchant establishments
accrues to the Acquiring Banks.
b) PoS is linked to the CBS of the Acquiring Bank
through PoS Switch. Since the PoS Switch is
linked to other banks through NFS, the card
holder of any other bank can swipe the card
at the PoS.
c) The installation of PoS involves costs, like the e) Micro-ATM is primarily to provide basic bank-
cost of PoS device, networking of PoS with the ing facilities to the cardholder through various
Switch and the cost of the Switch. The merit of outlets engaged by the banks as their Business
installing PoS thus depends upon the fee earn- Correspondents. Banks are increasingly opting
ing vis--vis costs of installing PoS. to install Micro-ATMs in the unbanked areas
d) Micro-ATM is an improved PoS like device, for financial inclusion of the people residing
with additional facilities of biometric identi- in unbanked areas. DCCBs are likely to play
fication of the card holder, printing of trans- an important role in this financial inclusion
action and mini account statement. Like PoS, effort, apart from their captive requirement of
the cardholder can be of any bank linked to providing RuPay Kisan Cards to the members
the NFS. of PACS.

Contents | 16
 5.2 Key components of PoS/Micro- solution for PoS/Micro-ATM may also be on
ATM facility ownership basis.
b) The solution should meet the specifications
laid down by NPCI. Banks may contact NPCI
a) RBI approval for Merchant Acquiring in this regard.
b) PoS/Micro-ATM Device the portable hard- c) The vendors given by NPCI (http://www.npci.
ware org.in/) for providing the PoS/Micro-ATM*
c) Software Solution - Switch Solution are given in the table below.
i) The PoS/Micro-ATM Switch Solution, inte- d) Key points of reference for selection of the
grated with the Switch installed for issuing Vendor:
RuPay Cards. i)  Approved by NPCI/Compliance with
ii) 
The software installed in the PoS/Micro- NPCI Specifications
ATM to integrate communication between ii) Integration with the Switch, CBS and NFS
the Switch and the device iii) Upgradation in line with NPCI require-
iii) SIM installed in the device to provide con- ments from time to time
nectivity between the device and the Switch iv) 24 x 7 support at different locations
e) Licensing Terms:
5.3 Acquisition of PoS/Micro-ATM i) Limitation on the Number of Transactions/
Cards/Channels/Devices present or future
Switch Module
ii) Right of use by Associates/BCs/Agencies/
a) Banks have the option of either acquiring the Subsidiaries
Switch on ownership basis or availing the ser- f ) Price Points:
vices on ASP Model, depending upon the op- i) Fixed Cost (one time for Integration/
tion exercised by them for the Card Switch. Inter-facing with Bank and NPCI), Com-
If the Card Switch is on ownership basis, the missioning

Vendors Approved by NPCI for providing PoS/Micro-ATM* Switch Solution

1 ATOS 6TH Floor, A Wing, Prism Tower, Mindspace, Link Road, Malad West, Mumbai 400064 Tel:
+91 (22) 4042 4000
2 Prizm Payments Silver Metropolis 3rd Floor Jai Coach Compound Goregaon (E) Mumbai-400063 Tel:+91 (22)
39541800
3 In Solutions Global 6th Floor Palm Spring Above Croma Link Road Malad (West)Mumbai : 400064 Maharashtra
,India Tel:(022) 67603200
4 FSS 502 A 5th Floor South Block, TIDEL IT Park 4 Canal Bank Road Teramani Chennai: 600113
Tamil Nadu, India. Tel : (44) 22540251 22540261
5 OPUS Opus Software Solutions (P).Ltd. - Commerzone, 1st Floor, Building No.4, Samrat Ashoka
Path, Off Airport Road, Yerwada, Pune- 411 006, Maharashtra-India Tel: +91 - 20 6627
2100/3092 5100
6 Atom Technologies Ltd. FT Tower, CTS no: 256 & 257, Suren Road, Chakala, Andheri (East), MUMBAI - 400 093
TEL+91 22 67698300
7 TCBIL Tata Communications Plot # C-21 and C-36 Block G, Bandra Kurla Complex Bandra (East),
Mumbai 400098 Tel +91 22 66578765
8 Banktech 3rd floor, Sigma Chambers 1307,HAL 3rd Stage, Jeevan Bhima Nagar Main Road,
Bangalore-560075 Tel:91-80-43574400
9 MRL Posnet MRL Posnet Pvt. Ltd, No.134/62, Greenways Road, Raja Annamalai Puram, Chennai - 600028,
Tamil Nadu, India Tel:044 24955569

* Some of these vendors may not be ready with the Micro-ATM device, meeting Micro ATM Standards of UIDAI Version 1.5.1 specifications. Banks
may ascertain the facts before inviting the bids.

17
 ii)  Transaction (Switching) Fee - Financial tem, Methodology for resolution of problems,
Transactions/Non-financial Transactions Turn Around Time
iii) Basis of Fee Fixed or per Transaction, Flat i) Annual Maintenance Contract/Annual Techni-
Rate or Graded on the basis of Volume , all cal Support Terms
inclusive or any exclusion, any minimum j) Reference Check with existing client onsite visit
per month criteria
iv) Project Implementation, Training/Support 5.4.2 Illustrative list of vendors in the Indian
v) Exclusions: Hardware, third party software etc. market for the PoS/Micro-ATM Device
vi) Customization cost
g) Customization requirements and time lines a) Verifone
h) Availability of regulatory and normal reports b) Ingenico
i) S upport for additional/future MIS requirements c) PineLabs
j) Turn Around Time d) Innoviti
k) Implementation time, training, support meth- e) PAX
odology f ) M Swipe
l) Training to Implementation Team g) Ezetap
m) H  ardware requirement and other dependencies
n) Data Centre Integrity, Safety and Confidentiality 5.4.3 Standard Operating Procedures
o) DRC at a different seismic zone
p) Quality Assurance, Certifying Authority, Date, Detailed Process and Procedural Guidelines for
Validity etc. activities relating to PoS/Micro-ATM, like-
q) Problem/Critical Support Management Sys-
tem and Turn Around Time a) BC Management
r) Warranties for Performance (uptime) and Data b) Servicing of Micro-ATM
Security c) Cash Logistics Management
s) Solvency of the Vendor - for long term suste- d) Reconciliation
nance and support e) Monitoring of Uptime
t) Reference Check with an existing client f ) Security
onsite visit
u) Annual Maintenance Contract 5.5 NABARDs support for
installation of PoS/Micro-ATM
5.4 Acquisition of PoS/Micro-ATMs
These devices are usually owned by the banks. NABARD provides financial support to DC-
There are not many options currently available to CBs to promote installation of PoS/Micro-ATMs
acquire these devices on lease/rent. at unbanked locations. The key features of the
scheme are:
5.4.1 Key issues for selection of the device
5.5.1 Eligibility
a) C ompliance with Specifications laid down by
NPCI. PoS service provider need to be certified a) CBS enabled Cooperative Banks
by NPCI b) Adherence to certification standards as speci-
b) Delivery Period and dependencies fied by various agencies
c) Integration with the software solution
d) Performance Warranty 5.5.2 Scope of support
e) Upgradation in line with NPCI requirements
frotime to time a) Cost of Micro ATM / POS terminals upto Rs.
f ) 24 x 7 support at different locations 25,000/- per terminal
g) Solvency of the Vendor b) Cost of integration charges between POS and
h) Complaint Critical Support Management Sys- CBS server

Contents | 18
 5.5.3 Extent of support Checklist for On-Boarding to the
NFS and RuPay platform
a) 
100% in North Eastern Region, Sikkim,
Jammu & Kashmir, Uttarakhand, Jharkhand, 1. Pre-Project Initiation
Himachal Pradesh, Chhattisgarh and Anda-
man & Nicobar Islands a. Ensure ASP (Application Service Provider)
b) 90% in the rest of the country Switch Vendor is in place. (NPCI Certified or
any other Switch Vendor will need additional
5.5.4 Duration of Support NPCI Switch Certification)
b. Ensure Switch Vendor can provide Hardware
For a period of 3 years Security Module (HSM) and Debit Card
5.5.5 Pattern of assistance Management System capabilities (DCMS).
a) The concerned Cooperative bank may work c. Ensure negotiation and tie up with a Sponsor
out a project report covering the total number Bank. A Sponsor Bank can be any Bank who is
of POS terminals and the cost of integration a member of the NFS Network of NPCI. For a
between POS terminals and CBS of the bank. list of existing NFS Member banks please visit
b) The assistance thereafter will be on reimburse- http://www.npci.org.in/nfsatm.aspx
ment basis for - d. Ensure the required documentation and neces-
i) Cost of POS terminals sary agreements are completed.
ii) Cost of integration charges between POS e. Ensure a Card Vendor is selected by the Bank.
and CBS server In some cases the ASP provides this facility, else
Bank has to appoint a card vendor from the
5.5.6 Other conditions empanelled list available with NPCI.
f. Ensure CBS and Switch level integration is
a) Should be owned by the bank and conform completed
to the standards specified by IBA-IDRBT and g. Ensure all technical developments are in place
UIDAI 1.5.1 standard) as per NPCI RuPay Online Switching Specifi-
b) The assessment for the POS terminals / micro cations Version 1.5.1
ATMs may be done as under - h. Ensure Business Plans for Debit Card issuance
i) No. of branches where the terminals are to and P & L management is in place
be placed i. Ensure Liquidity Manager limits are set in con-
ii) No. of PACS to be covered and junction with the Sponsor Bank
iii) Spare terminals as backup in the bank (upto
10% of the total, if requested by the bank) 2. Project Tracking

5.5.7 Operationalisation of Scheme a. Kick Off discussions with NPCI, Sponsor

Bank and ASP
NABARD has extended the support for technol- b. IIN Issuance by NPCI
ogy support for operationalisation of ATM, POS c. Card Design finalization with necessary ap-
terminals / micro ATMs. Banks may approach provals from Bank and NPCI
the Technology Service Provider (TSP) approved d. Welcome Kit and Marketing Collateral finali-
by NPCI for each of these services. zation with necessary review from NPCI
Banks to apply to NABARD on prescribed Ap- e. Test Cards, Track Data Verification, CVD vali-
plication Form - Annexure C. dation and Test Card templates

19
f. Host to Host Certification and Testing c. Ensure RuPay Card marketing activities and
g. Sharing of Test results, UAT Scripts Sign Off customer education are rolled out
h. Sharing of Production Keys and Production d. Ensure Branch Staff training in RuPay Debit
Movement card issuance and other RuPay related products
i. Pilot Go Live e. Ensure customer service facilities like, Call
j. Full Go Live with all NFS Member Banks Centre, Help Desk are up and running
f. Ensure systems are in place for speedy redressal
3. Post Implementation Tracking of customer grievances as per RBI guidelines
g. Ensure systems are in place to track ATM De-
a. Ensure Reconciliation and Settlement systems clines and put in place appropriate measures to
are in place in accordance with NPCI / RBI control the same.
Guidelines
b. Ensure RuPay Card Issuance as per Banks
Business Plans

Project Plan for On-boarding under Sponsorship Model.

S.No Project Head Tasks to be accomplished Responsible

1 Project Initiation Kick off discussion & Sharing of project details. Submission of pre-requisite format to NPCI
Banks.
Member to confirm SMS / DMS Product Type Bank
2 IIN Issuance
IIN assignment after confirmation of product type (SMS/DMS) NPCI
Sharing of RuPay Card & Marks Specifications, list of NPCI Approved vendors with the NPCI
Bank
Bank to share the design files with its Card Vendor Bank
Bank to share its Card Vendor details to NPCI Bank
3 Card Designs
Bank to send card design for approval by NPCI (Artwork proof) Bank
Card Design approval by NPCI NPCI
Post production, laser proof & 5 sample cards from production lot to be submitted to Bank
NPCI
Marketing collateral and sample card envelope files to be shared Bank/NPCI

Marketing NPCI to review the marketing collateral etc and review NPCI
4
Collaterals Bank to take up with their vendor for marketing collaterals Bank
Bank to send hard copy of final marketing collaterals to NPCI for records Bank
Sharing of test keys, CVD calculation logic, key exchange process documents NPCI
Bank to share the keys with their vendor, vendor to generate test card data with the Bank
RuPay Test Keys ONLY
CVD Verification
5 Bank to ensure their vendor sticks to the RuPay Track 1 and Track 2 specifications as per Bank/ASP
and Track Data
the card and mark specs document
Bank to send sample embossa file generated from above step Bank/ASP
CVD & Track 1-2 data correctness to be checked by NPCI NPCI

Contents | 20
 Project Plan for On-boarding under Sponsorship Model.

S.No Project Head Tasks to be accomplished Responsible

Handover of Test Cases NPCI
Handover of Transaction Dump ( Test Transaction Data Dump)
Connectivity Checklist NPCI/ASP
Network Compliance Form
Bank side interface development (Between Bank switch and NPCI Net)
Letter from ASP for completion of their internal testing with the sub member ASP
Bank to confirm on Interface readiness Bank/ ASP
Issuer to provide confirmation on message dumps before commencing certification
30 Physical test cards and test card details Bank/ASP
Bank to send completed test cases template along with contact details of Banks testing Bank/ASP
team
Network
6 Connectivity and Verification & validation of the data received by NPCI NPCI
Testing
Sharing of Network Details (test switch- IP and Port) NPCI/Bank
System Readiness Testing (to check the network connectivity) ASP
Mail is sent to NFS implementation team to seek a time slot for testing & commence the NPCI and
testing Bank/ASP
Testing to Start NPCI/Bank
Testing review NPCI
UAT Testing NPCI AND Bank
UAT Offline Review NPCI
Provide sign off for UAT offline testing NPCI/Bank
UAT Script preparation (online) and sending to Bank NPCI
Bank to give sign off for UAT scripts Bank
Bank to give names of 3 custodians for sharing of production keys Bank
7 Production Keys Production keys to be sent to Bank by COURIER ONLY NPCI
Confirmation of production key check value match from Bank Bank/ASP
NPCI to share network details in production environment with Bank NPCI
Get production Port, Bank code, and acquirer ID from NFS production team NPCI
Share Bank Production IP after confirming with Network team ASP/NPCI

Production Actual port opening

8
Movement Production movement
Go Live Documents 22
Pilot Go Live, bin update and test transactions
Final production and go live date Bank and NPCI

21
6. Installation of ATM

As explained earlier, the acquisition of ATM is

not necessary to issue RuPay Cards. The RuPay
Cards are acceptable at all ATMs and PoS/Micro-
ATMs linked to NFS installed by any bank. The
Card Issuer Bank is however required to pay In-
terchange to the Acquiring Bank for the transac-
tions conducted by the Issuer Banks Customers Module of the Card Payment Switch. It will be
on Acquiring Banks ATM/Some DCCBs may acquired from the vendor who has supplied the
nevertheless like to install ATMs for business Card Payment Switch. Following key reference
considerations like: points may be kept in view while acquiring the
Better customer service ATM Module:
Earning profit due to scope of earning high In-
terchange fee 1. Key points of reference for selection of the
Enhance image of the bank Vendor:
To be able to install own ATMs, the bank will be a) Approved by NPCI/Compliance with NPCI
required to install ATM Switch module in their Specifications
Switch, apart from installing the ATMs. Given b) Upgradation in line with NPCI requirements
below are the key points of action: from time to time
c) Integration with the Switch, CBS and NFS
6.1 Acquisition of ATM Switch d) 24 x 7 support at different locations
Module
2. Licensing Terms:
Just as required for installing PoS/Micro-ATMs, a) Limitation on the Number of Transactions/
the bank would be required to acquire ATM Cards/Channels/Devices present or future

Contents | 22
 b) Right of use by Associates/BCs/Agencies/Subsidiaries cupies space for which considerable amount is
spent on furnishing and maintenance. In ad-
3. Price Points: dition, there is a cost attached to guarding the
a) Fixed Cost (one time for Integration/Inter-fac- ATM 24 x 7.And if the ATM is installed off-site,
ing with Bank and NPCI and Commissioning) there is additional expenditure in providing con-
b) Transaction (Switching) Fee - Financial Trans- nectivity and in regular servicing of the ATM.
actions/Non-financial Transactions b) Key issues for selection of the ATM on owner-
c) Basis of Fee Fixed or per Transaction, Flat ship basis
Rate or Graded on the basis of Volume , all i) Compliance with NPCI Specifications/
inclusive or any exclusion, any minimum per Technical specifications as per Software
month criteria Solution
d) Project Implementation, Training/Support ii) Upgradation in line with NPCI require-
e) Exclusions ments from time to time
f ) Customization cost iii) Installation cost
iv) Security Systems
4. Customization requirements and time lines v) Delivery Period and dependencies
5. Availability of regulatory and normal re- vi) Integration with the software solution in
ports terms of products and services
6. Support for additional/future MIS require- vii) Performance Warranty
ments viii) 24 x 7 support at different locations
7. Turn Around Time ix) Solvency of the Vendor
8.  Implementation time, training, support x) Complaint Management System Methodol-
methodology ogy for resolution of problems, Turn Around
9. Training to Implementation Team Time, Critical Support Management System
10. Hardware requirement and other depend- xi)  Annual Maintenance Contract/Annual
encies Technical Support Terms
11. Data Centre Integrity, Safety and Confi- xii) Reference Check with existing client
dentiality onsite visit
12. DRC at a different seismic zone c) Networking Solution
13. Quality Assurance, Certifying Authority, i) In case of on-site ATM, there is no ad-
Date, Validity etc. ditional effort in connectivity as the net-
14. Problem Management System and Turn working facility for CBS is used for ATM
Around Time, Critical Support Manage- as well.
ment System ii) In case of off-site ATMs, the bank is re-
15. Warranties for Performance (uptime) and quired to incur recurring expenditure to
Data Security connect the ATM with the CBS. Depend-
16. Solvency of the Vendor - for long term sus- ing upon the location of the site, banks
tenance and support choose either landline on lease or VSat
17. Reference Check - with an existing client connection. In addition, the standby con-
onsite visit nection is also installed as a backup.
18. Annual Maintenance Contract d) Outsourcing of ATM Servicing
i) Many banks outsource servicing of owned
6.2 Acquisition of ATMs ATMs. Under this, Vendor takes care of the
maintenance, cash servicing, security etc.
Banks have option to either acquire it on owner- ii) Banks provide requisite cash to the ASP
ship basis or on ASP Model. Vendor on day to day basis.
iii) The Vendor undertakes reconciliation of entries.
6.2.1 Ownership Basis iv) The arrangement with the Vendor is usu-
ally based on fixed monthly charges.
a) The ATM is a high cost item. Besides, it oc- e) Standard Operating Procedure

23
Banks are required to lay down detailed process and v)  Vendors receives transaction based Fee
procedures for operations and maintenance of the from the bank
ATMs. Some of the key activities are listed below: vi) Outsourcing of servicing of the ATM to
i) Daily Servicing of the ATM an outsource agency frees the bank from
ii) On-line monitoring of Cash levels the day to day maintenance of the ATM
iii) Reconciliation of physical balance with and the ATM site
Machine Balance and the CBS vii) If ATM Switch is on ASP model, the bank
iv) Monitoring of Uptime is also freed from managing the Switch
v) Maintenance of the Security Systems and related activities
vi) Upkeep of the ATM premises including viii) There are several Service Providers which
supply of stationery are offering all or a combination of these
vii) Maintenance of the Machine, consumables services
viii) 
Provision and Supervision of Security ix) Thus practically all activities and invest-
Guards ment relating to ATM rests with the Ser-
ix) Complaints/Dispute Management vice Providers. Bank is left with only pro-
viding cash for uploading the ATMs and
6.2.2 ASP Model managing customer accounts
c) White Label ATMs
There are 3 types of ASP Models. Key Features of i) ATMs are owned by the ASP Vendor, of-
each Model are described below: fering complete solution under its own
a) ATMs owned by the Bank but managed by the name
ASP Vendor ii) Banks logo is not displayed on the ATM
i) ATM owned by the Bank Site
ii) Premises owned/rented by the Bank iii) ATM offers common services to multiple
iii) All other items also owned by the Bank banks on shared basis
iv) Cash is provided by the bank on day to iv) Banks pay Fee on transaction basis to the
day basis as required to load in the ATM Service Provider
v) All ATMs are connected to the Switch v) White Label ATM is in the nascent stage
owned by the ASP Vendor in India at present. RBI has issued detailed
vi) The Switch is connected to the CBS and guidelines for eligibility to offer and man-
the NFS age this type of facility
vii) The transactions are routed to the CBS vi) Currently, most of the banks are on first
and to other banks (through NFS) model.
viii) Reconciliation, Cash Management, Dis-
pute Management, ATM Premises Man- 6.3 Illustrative list of ATM
agement, Security Guard etc. are the re-
manufacturers and ASP Vendors for
sponsibility of the ASP Vendor
ix) Stationery is provided by the Bank
ATM
b) ATMs owned and leased by the ASP Vendor
6.3.1 ATM Manufacturers
i) Capital investment is done by the ATM
vendors. So, bank need not lock its funds
in capital expenditure a) NCR Corporation
ii) The identication of ATM site is mutually b) Diebold Systems
agreed upon between the bank and the c) Wincor Nixdorf
vendor.
iii) The connectivity, power arrangement, ne- 6.3.2 ASP Vendors
gotiation of rent, furnishing of the interi-
ors of the ATM site etc. are taken care of a) FSS
by the vendor b) Prizm Payments
iv) ATM carries Brand and logo of the bank c) Tata Communications

Contents | 24
 d) AGS Transact Technologies 15/- per KCC transaction arising out of the use
e) Euronet India of RuPay Kisan Cards on an ATM other than
the parent bank including that of white label
6.4 NABARDs support for ATM ATMs (as and when these ATMs will be de-
ployed in the field) will be reimbursed.

6.4.1 Objective 6.4.5 Extent of support

Cooperative banks are being encouraged to pro- a) 

100% in North Eastern Region, Sikkim,
vide RuPay Kisan Cards to their clients. These Jammu & Kashmir, Uttarakhand, Jharkhand,
cards will be used on ATMs / micro ATMs with Himachal Pradesh, Chhattisgarh and Anda-
agri-vendors which will result in operational ex- man & Nicobar Islands
penditure for the cooperative banks. This scheme b) 90% in the rest of the country
is an effort to partly meet this cost.
6.4.6 Duration of Support
6.4.2 Eligibility
The assistance for this scheme is on reimburse-
All Cooperative banks which are fully CBS ena- ment basis and the banks can forward their claims
bled and have issued RuPay Kisan cards are eligi- to ROs every quarter. The support will be extend-
ble for support under the scheme. ed till March 2014 with the scheme subject to
review thereafter.
6.4.3 Scope and pattern of support
6.4.7 Operationalisation of Scheme
a) The support is only for KCC transactions.
b) The scheme covers only operational cost. a) It is recommended that cooperative banks
c) No capital expenditure is covered. adopt the ASP route for providing ATM ser-
vices to their clients considering the huge capi-
6.4.4 Types of Support tal expenditure involved in establishing and
maintaining an ATM network as well as inad-
Three types of supports available under this equate level of comfort with advanced banking
scheme: technology in the cooperative banks.
a) ATM Add-on Support for CBS - If the bank b) Upon stabilization of the system, the coopera-
is running its CBS on ASP model, then an tive bank may forward a letter to NABARD,
amount upto Rs. 580/- per branch per month informing about number of RuPay Kisan
is reimbursed. If the bank runs its CBS on Cards issued to its farming clientele. The con-
ownership model, then an amount upto Rs. cerned NABARD Regional Office will provide
20,000/- will be reimbursed per branch as one an approval for the same after verifying the
time cost. Support for ASP model is extended claim.
for a period of 3 years. c) Later, on a quarterly basis, the cooperative
b) Switching Fee - An amount of up to Rs. 3/- bank may approach NABARD for reimburse-
per transaction for all transactions will be re- ment along with system generated information
imbursed towards switching fee charges. of the various expenditures.
c) Inter-change / Transaction charges - The in- Banks to apply to NABARD on prescribed Ap-
terchange fees / transaction charges upto Rs. plication Form - Annexure C

25
Annexure A-ATM Transaction Flow

Sub-membership Model

Contents | 26
 Liquidity Management Process Flow

Source: NPCI

27
Annexure B-List of Vendors for Card
Design & Manufacture Currently
Approved by NPCI

S. No. Name of the Company Card Manufacturing Card Personalization Contact Details
1. Versatile Card Yes Yes Sridhar T.S
Technology (VCT) 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: tss@vct.co.in
2. MCT Cards & Technology Yes Yes Rajesh Shet
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: rajesh.shet@manipalgroup.info
3. DZ Card (India) Pvt. Ltd. Yes Yes Shailesh Patel
DZ Card (India) Pvt. Ltd
Tel: +91-124-4128888 Fax: +91-124-4128899
Mobile: +91-9871998994
E-mail: shailesh.patel@dzcard.com
4. M-Tech Innovations Ltd. Yes Yes Kapil Gandhi
Plot No. 1/2, Rajiv Gandhi Infotech Park, Phase I,
Hinjewadi, Pune 411057
Phone:- +91-20- 22934880/22932080 Ext:-254
Tele Fax :- +91-20- 22933139
Mobile :- +91 98500 39631
E-mail: development@m-techindia.com
5. Oberthur Technologies Yes Yes Atul Jain
India Pvt. Ltd Oberthur Technologies India Pvt. Ltd,
A 201, Sec 63
Noida 201303 (U.P.)
Phone:- +91-9811142455
E-mail: a.jain@oberthur.com
Priyanka Singh
Phone:- +91-9699333779
E-mail: p.singh3@oberthur.com
6. Madras Security Yes Yes Johnny Vitkar
Printers Private Ltd. Head Western Region, Madras Security
Printers Pvt. Ltd.
72. T.H. Road, Chennai 600081
Phone:- +91-9987005829
E-Mail:-johnnyvitkar@gmail.com

Contents | 28
 List of Vendors for Card Design & Manufacture Currently Approved by NPCI

S. No. Name of the Company Card Manufacturing Card Personalization Contact Details
7. Giesecke & Devrient Yes Yes Shyam Balakrishnan
(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 110020
Mobile: +91 7738037483
mailto:shyam.balakrishnan@gi-de.com
8. CMS Infosystems Pvt. No Yes Mr. Mokam Singh
Ltd. Sr. Business Manager
CMS Info Systems Pvt. Ltd.
Silver Metropolis, 11th Floor, Western Express
Highway,
Goregaon East, Mumbai 400063.
Landline:022-67553219
Mobile 09619858787
Email Id:mokam.singh@cms.com
9. Gemalto Digital Security Yes Yes Anand G. Dhuri
Pvt. Ltd. Manager Secure Transaction
8th Floor, Hallmark Business Plaza,
Bandra Kurla Complex, Bandra (east),
Mumbai -51, India
Landline:022-30945800
Mobile 09820845822
Email Id: anand.DHURI@gemalto.com
10. Syscom Corporation Ltd. Yes Yes Mr. Jerome Bouvard
Vice President APAC Industrials Operations
Plot No. 60-61 NSEZ, Dadri Road, Phase-II , Noida
,Uttar Pradesh
Tel No. +91-120-4710835
jerome.bouvard@morpho.com
Mr. Rajan Misra
Vice President, Payment & Transit
D-216, Sector-63, Noida-201 301, NCR of Delhi, India
Tel No. +91-120-4072932
rajan.misra@morpho.com

29
Annexure C - 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 banks Board has approved undertaking of this project in its .. Board Meetingheld 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
d. Enrolment No. is available.
e. 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:

Contents | 30
 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

This form can be downloaded from https://www.nabard.org/pdf/Handbook.pdf

31
Glossary

Acceptor Any trading or service establishment that accepts, on its own behalf or on behalf of its
network, the payment of goods or services via an electronic money instrument
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.
Acquiring Bank Bank which has provided PoS to the shop/Merchant Establishment
Alternate Delivery Alternate Delivery Channels are channels and methods for providing banking services
Channels/Alternate directly to the customers. Customers can perform banking transactions through their
Channels ATM, Micro-ATM, PoS, contact the banks Call Center for any inquiry, access the digital
Interactive Voice Response (IVR), perform transactions through Internet Banking, and even
on smart phones through mobile banking, etc.
ASP Application Service Provider the third party Vendor who owns, manages and distributes
software-based switch services and solutions to various banks on pay per use/rental
basis
ATM Switch Switching Solution along with the Card Management System for ATM
Authentication The methods used to verify the origin of a message or to verify the identity of a
participant connected to a system and to confirm that a message has not been modified
or replaced in transit.
Automated Teller an electromechanical device that permits authorized users, typically using machine-
Machine (ATM) 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.
BC Business correspondents are bank representatives who help villagers to open bank
accounts, do banking transactions. (deposit money, take money out of savings account,
loans etc.). The Business Correspondent carries a mobile device where person ives his
thumb impression or electronic signature, and get the money.
Biometric Method of identifying through matching a unique physical characteristic of a person, e.g.
thumb impression, voice recognition or retina
Card Vendor Vendor engaged in printing Card, PIN mailer and Welcome Kit etc.
CBS Core Banking Solution
Contact cards Cards that require physical contact through an electronic connection surface between the
card and the card reader or terminal device.
Contactless Cards that do not require physical contact between the card and the card reader or
terminal.
DCCB District Central Cooperative Bank - DCCBs function as a link between the PACS and State
Cooperative Banks (SCBs). They are basically meant for meeting the credit requirement
of PACS. They also undertake banking business such as accepting deposits from public,
collecting bills, cheques, drafts etc. and providing credit to the needy persons. The area
of operation varies from taluk to district but in most of the states their operations are
confined to the taluk level. Membership of the DCCBs is open to individuals and societies
working in its area of operation
DMS Dispute Management System Grievance redressal mechanism put in place by NPCI to
resolve any customer complaints regarding cash withdrawals at ATM

Contents | 32
 DRC Disaster Recovery Centre
Enterprise License Acquiring Software Solution on Ownership Basis without any restriction on number of
Users/Transactions etc.
HSM Host Security Module Digital Keys Management system attached to the Server to
prevent tampering of data through encryption and decryption of messages/data
IIN Issuer Identification Number allotted by NPCI to uniquely identify a Card Issuer Bank in
an international interchange environment. All IINs assigned are six digit numbers and are
the first six digits of a card.
Interchange Fee payable by the Card Issuer Bank to the acquiring bank for allowing its customers to
do transactions at the acquiring banks ATM/PoS
Interchange fee Transaction fee payable in the context of a payment card network by one participating
financial institution to another, for example by an acquirer to a card issuer in respect of
a card payment by the cardholder to the card acceptor (merchant).
Inter-operability Technical compatibility between different systems
Issuer Bank The bank which issues the card to its customer
Liquidity Manager System installed in NPCI Data Centre to setup Limits for keeping minimum balance to
cover the settlements of the banks transactions. It works as a limit check for approving/
declining transactions
MICRO-ATM A small Hand-held Device (like PoS) connected to CBS, having ATM like facilities,
operated by a person on behalf of the bank, with biometric reading facility
NFS The National Financial Switch facilitates routing of ATM transactions through inter-
connectivity between the Banks switches thereby enabling the citizens to use any ATM of
the connected bank. It is maintained by NPCI.
NPCI National Payments Corporation of India - the umbrella organization of all retail payment
systems in India is set up by the banks in India with the support and guidance from RBI
and Indian Banks Association. It has been mandated to build central infrastructure for
payment systems like ATM Switching, Mobile Payments, Cheque Truncation System, POS
Switching, 24*7 remittance system and Financial Inclusion transactions. It has also a
mandate to build a domestic card payment scheme, RuPay. http://www.npci.org.in/
Off us Transactions A card transaction in which issuer and the acquirer are separate entities. For off- us
transactions, authorization will be routed through the NPCI network. NPCI will perform the
clearing & settlement for both the members (Issuer & Acquirer).
Online Exchange of Data between different processing systems directly without any intervention
On-us Transactions A card transaction in which issuer and the acquirer is from the same entity.
Ownership Basis Software Solution acquired under License from the Software Company for own use
PIN Personal Identification Number A numeric code which the cardholder has to enter for
verification of identity for conducting an electronic transaction. It is deemed equivalent of
signature and hence it must not be disclosed by the cardholder to anyone.
Point of sale This term refers to the use of payment cards at a retail location (point of sale). The
payment information is captured either by paper vouchers or by electronic terminals,
which in some cases are designed also to transmit the information. Where this is so, the
arrangement may be referred to as electronic funds transfer at the point of sale.
PoS Point of Sales Terminal a portable device provided to Shops/Merchant Establishments
by the Acquiring Bank with the facility to execute payment transactions of a customer
through swiping of Card
Micro-ATM Switch Switching Solution along with the Card Management System for Micro-ATM
PSS Act Payment and Settlement Systems Act, 2007 of RBI
RRB Regional Rural Bank
RuPay Debit Card Card for operations in Customers Bank Account, on RuPay Platform managed by NPCI
RuPay Kisan Card KCC Card issued to farmers, operated on RuPay Platform managed by NPCI

33
SCB The state co-operative bank is a federation of central co-operative bank which come
under the State Co-operative act of respective state and acts as a watchdog of the
co-operative banking structure in the state. Its funds are obtained from share capital,
deposits, loans and overdrafts from the Reserve Bank of India. The state cooperative
banks lend money to central co-operative banks and primary societies and not directly to
the farmers.
Server Computer that provides services through a network to other computers
Settlement Process of settlement of payments between members
SMS Platform Single Message System - Messages between the acquirer and the issuer to (a) Authorize
a financial transaction (b) Post a financial transaction to a cardholders account
Sponsor Bank The primary bank (already a member of the NFS) which offers its own networking
platform to another bank for joining the NFS
Switch An electronic device that connects multiple computers together. Hardware to operate the
Payment Switch
Switch fee Transaction fee set by the network organization and paid by the card issuing institution
to the organization for the cost of routing transaction information.
Switching Routing of interbank ATM and POS transactions through a shared network.
UID 1.5.1 / IBA-IDRBT Standards, which specify functional, hardware and Interoperability requirements to bring
Standards uniformity in micro ATMs in use with the objective to have standardized bio metric
transactions. All micro ATMs in the country have to comply with these standards.
UIDAI Unique Identification Authority of India Authority appointed by Government of India to
provide identification (Aadhaar number) to each resident across the country.

Contents | 34
Deutsche Gesellschaft fr
Internationale Zusammenarbeit (GIZ) GmbH

GIZ NABARD Rural Financial Institutions Programme

L-20, Green Park (Main)

New Delhi 110016

T +91 11 26526024/25.
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