Product and Services of NPCI

1) National Financial Switch (NFS) 

  • The National Financial Switch is the largest interconnected network of Automated Teller Machines (ATMs) in India. The primary headquarters is located at Mumbai.
  • This system was developed by Institute of Development and Research in Banking Technology (IDRBT), Hyderabad in 2004. It is run by the National Payments Corporation of India (NPCI).
  • The National Financial Switch enabled the interconnectivity between the bank’s switches such that the transactions made at any ATM could be routed to the connected banks.
  • The NPCI has allowed any bank offering the core banking services round the clock (24/7) with or without ATM can be a part of this National Financial Switch through a sponsor bank. 
  • The objective behind such a move is to enable the non-scheduled cooperative banks and other regional rural banks to access the wide network of ATMs in the country.
  • Thereby, enabling the customers of such bank to access banking services through any ATM of a connected bank.

2) Immediate Payment Service (IMPS)  

  • IMPS is an innovative real time inter-bank electronic funds transfer system in India. Banks are allowed to set their own limit for IMPS.
  • IMPS offers an inter-bank electronic fund transfer service through mobile phones. Unlike NEFT and RTGS, the service is available 24/7 throughout the year including bank holidays.
  • This service is offered by National Payments Corporation of India (NPCI) that empowers customers to transfer money instantly through banks and RBI authorized Prepaid Payment Instrument Issuers (PPI) across India. QSAM (Query Service on Aadhaar Mapper) – This service helps user in knowing their Aadhaar Seeding status with their bank account.
  • Both banked as well as un-banked customer can avail IMPS. However, unbanked customer can initiate IMPS transaction using the services of Pre-Paid Payments instrument issuer (PPI).


3) Unified Payment Interface (UPI

  • Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. 
  • It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.
  • UPI is built over Immediate Payment Service (IMPS) for transferring funds. Per Transaction limit is Rs. 1 Lakh.
  • It uses Virtual Payment Address (a unique ID provided by the bank), Account Number with IFS Code, Mobile Number with MMID (Mobile Money Identifier), Aadhaar Number, or a one-time use Virtual ID.


4) National Automated Clearing House (NACH) 

  • National Automated Clearing House (NACH) is a centralised, webbased clearing service that can ease the work of banks, financial institutions, and the government and corporate by consolidating all regional ECS systems into one national payment system, thereby removing any geographical barriers in efficient banking. 
  • Started by the National Payments Corporation of India (NPCI), NACH aims to create a better option for facilitating clearing services than the existing Electronic Clearing Service (ECS) system. 
  • The service is now active in all Indian banks with core banking facility. It facilitates both ECS credit and ECS debit.


5) *99# USSD

  • A USSD (Unstructured Supplementary Service Data) based mobile banking service of NPCI was initially launched in November 2012. 
  • As USSD code connects to the telecom operator’s server, it also connects to bank’s server. The service had limited reach and only two TSPs were offering this service i.e. MTNL & BSNL.
  • Understanding the importance of mobile banking in financial inclusion in general and of *99# in particular, various regulatory/trade bodies came together to ensure on boarding of all TSPs on *99# (USSD 1.0). 
  • With the wider ecosystem (11 TSPs), *99# was dedicated to the nation by Hon’ble Prime minister on 28th August 2014, as part of Pradhan Manti Jan Dhan Yojna.
  • *99# service has been launched to take the banking services to every common man across the country. Currently, this service is available in 10 regional languages along with Hindi and English.

6) Aadhaar Enabled Payment System:  

  • AEPS is a payment service offered by the National payment Corporation of India (NPCI) to banks using Aadhaar number and online UIDAI authentication through their respective Business correspondent service centers.
  • The customer to have a bank account linked to his / her Aadhaar number with a bank offering the AEPS service.

Issuer Identification Number (IIN) : 

  • It identifies the bank to which the customer has mapped the Aadhaar number. 
  • Each bank would be issued a unique IIN for AEPS. 
  • This is a six digit number.

 Limits for AEPS transactions: 

  • Rs 50,000 per day per a/c. Aadhaar based accounts would be opened on the basis of simplified KYC guideline i.e. where 
  1. Balance does not exceed Rs 50,000 
  2. Annual turnover does not exceed Rs, 1,00,000. 

Settlement agency and charges: 

Clearing Corporation of India Ltd on behalf of NPCI.

Banking services in AEPS: 

Cash withdrawal, Cash Deposit, Balance Enquiry, Fund Transfer.


7) Aadhaar Payment Bridge (APB) System  

  • The APB System sub-serves the goal of Financial Inclusion and provides an opportunity to the Government to attempt financial re-engineering of its subsidy management program. 
  • The implementation of APB System has also lead to electronification of a large number of retail payment transactions which were predominantly either in cash or cheque.
  • Banks can get connect to NPCI either through NPCINet or Internet.
  • Transaction routing on the basis of IIN issued by NPCI.
  • APB System provides Direct Corporate Access (DCA) to Government Departments and Agencies. Provides online Dispute Management System (DMS).


8) Bharat Bill Payment System

  • Bharat Bill Payment System (BBPS) is an integrated bill payment system in India offering interoperable and accessible bill payment service to customers through a network of agents of registered member as Agent Institutions (AI), enabling multiple payment modes, and providing instant confirmation of payment.
  • BBPS aims to make regular bill payments for all utility services easy. That includes water, DTH and telecom. 
  • National Payments Corporation of India (NPCI) will function as the authorized Bharat Bill Payment Central Unit (BBPCU).
  • BBPCU will be responsible for setting business standards, rules, and procedures for technical and business requirements for all participants.


9) RUPAY Card

  • RuPay is an Indian domestic card scheme conceived and launched by the National Payments Corporation of India (NPCI) on 26 March 2012.
  • Banks in India are authorized to issue RuPay debit cards to their customers for use at ATMs, PoS terminals, and e-commerce websites.

It has been incorporated as a Section 25 company under Companies Act 1956 and more recently under the Section 8 of the Companies Act 2013 and is aimed to operate for the benefit of all the member banks and their customers. Its headquarters is located in Mumbai, Maharashtra. 

10) Cheque Truncation System (CTS) 


  • CTS is based on a cheque truncation or online image-based cheque clearing system where cheque images and Magnetic Ink Character Recognition (MICR) data are captured at the collecting bank branch and transmitted electronically.
  • For faster clearing of cheques, Cheque Truncation System (CTS) or Image-based Clearing System (ICS), was introduced in India.
  • Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the paying bank branch. 
  • It is preferable to present instruments complying with CTS-2010 standards for clearing through CTS for faster realisation. Instruments not complying with CTS-2010 standards will continue be accepted but will be cleared at less frequent intervals i.e. once a week (every Monday).


11) BHIM (Bharat Interface for Money) 

  • BHIM (Bharat Interface for Money) is a mobile app developed by National Payments Corporation of India (NPCI), based on the Unified Payment Interface (UPI). 
  • It was launched by Prime Minister Narendra Modi, at Digi Dhan mela at Talkatora Stadium in New Delhi on 30 December 2016.
  • The app supports all Indian banks which use that platform, which is built over the Immediate Payment Service infrastructure and allows the user to instantly transfer money between bank accounts of any two parties. It can be used on all mobile devices.
  • BHIM allow users to send or receive money to or from UPI payment addresses, or to non-UPI based accounts (by scanning a QR code with account number and IFSC code or MMID (Mobile Money Identifier) Code).

 Transaction fees and limits

  • At present, there is no charge for transactions from Rs.1 to Rs.1 lakh.
  • Currently the fund transfer limit has been set to a maximum of Rs.20,000 per transaction and a maximum of Rs. 1,00,000 in a day and maximum number of transaction count of 20 in a day.
  • BHIM app currently supports 13 languages (including English), though there are 22 official languages of India (excluding English) under 8th Schedule of Constitution of India.

Other Important Product used in various sectors

Universal Account Number (UAN) :

  • The UAN is a 12-digit number allotted to employee who is contributing to EPF will be generated for each of the PF member by EPFO. For example, 111222333444. 
  • The UAN will act as an umbrella for the multiple Member Ids allotted to an individual by different establishments and also remains same through the lifetime of an employee. It does not change with the change in jobs. 
  • The idea is to link multiple Member Identification Numbers (Member Id) allotted to a single member under single Universal Account Number.  International Securities Identification Number (ISIN) :
  • An International Securities Identification Number (ISIN) uniquely identifies a security. Its structure is defined in ISO 6166
  • The ISIN code is a 12-character alphanumeric code that serves for uniform identification of a security through normalization of the assigned National Number, where one exists, at trading and settlement.
  • All internationally traded securities issuers are urged to use the ISIN numbering scheme, which is now the accepted standard by virtually all countries. The United States and Canada primarily use a similar scheme, known as a CUSIP number.
  • ISIN codes have a total of 12 characters, consisting of both letters and numbers. These include the country in which the issuing company is headquartered (first two digits), along with a number specific to the security (middle nine digits), and a final character, which acts as a check. An example of an ISIN number for a US company’s stock certificate could look like: US-000402625-0.


Permanent Retirement Account Number (PRAN) :

  • The National Securities Depository Limited (NSDL) is the Central Recordkeeping Agency (CRA) for NPS. Therefore application for PRAN is made on the NSDL portal. Every subscriber is allotted a unique 12 digit Permanent Retirement Benefit Number for a lifetime and can accessible from any location in India.
  • Two types of account in PRAN, Tier I Account: This is a non-withdrawable account meant for savings for retirement.
  • Tier II Account: This is simply a voluntary savings facility. The subscriber is free to withdraw savings from this account whenever subscriber wishes. No tax benefit is available on this account.
  • It is mandatory for all subscribers to the NPS are required to have a PRAN.


Permanent Account Number (PAN) :

  • Permanent Account Number (PAN) is a code that acts as an identification for individuals, families and corporates (Indian and Foreign as well), especially those who pay Income Tax.
  • It is a unique, 10-character alpha-numeric identifier, issued to all judicial entities identifiable under the Indian Income Tax Act, 1961
  • The Income Tax PAN code and its linked card are issued under Section 139A of the Income Tax Act. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.
  • An example of a PAN code number would be in the form of AAAPL1234C. The PAN structure is as follows: AAAPL1234C: The five (5) first characters are letters, followed by four (4) numerals, and the last (10th) character is a letter.


Tax Deduction and Collection Account Number (TAN) :

  • In India, a Tax Deduction and Collection Account Number (TAN) is a 10 digit number issued to persons who are required to deduct or collect tax on payments made by them under the Indian Income Tax Act, 1961. Each tax deductor is uniquely identified by a TAN.
  • TAN is required to be quoted in all TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. TDS/TCS returns will not be accepted if TAN is not quoted and challans for TDS/TCS payments will not be accepted by banks. 
  • Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty of Rs.10,000.
  • TAN structure is as follows: DELA99999B: First four characters are letters, next five are numerals, and last character is a letter.
  • The first three characters represent the city or state where the TAN was issued.
  • The fourth character represents first character of name of the deductor.
  • And the next 5 characters are numerics.


Legal Entity Identifier (LEI) :

  • The Legal Entity Identifier (LEI) code is conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the Global Financial Crisis. 
  • LEI is a 20-digit unique code to identify parties to financial transactions worldwide.
  • These directions are issued under Section 21 and Section 35(A) of the Banking Regulation Act, 1949.

Margin on Loans and Implications

 A loan that is able to be used for a variety of purposes. Typically offered to an investor by a broker for purchasing securities in a margin account and secured via the collateral of the investor.

What is a margin loan?

  • A margin loan is a flexible line of credit that can be used to borrow money for investment purposes, such as investing in shares and managed funds.
  • For example, you can provide existing approved shares, or managed funds as your deposit, or equity contribution. 
  • You can then use the loan to pay for other new investments. 
  • The assets you contribute, plus those acquired with the borrowed funds, become security for your margin loan.

Implication on Marginal loans

  • Margin loan availability describes the amount in a margin account that is currently available for purchasing securities on margin or the amount that is available for withdrawal. 
  • A margin account makes loans available to the customer of a brokerage firm using the customer's securities in their account as collateral.
  • Margin loan availability can be used in a couple of specific contexts.
  1. The dollar amount in an existing margin account that is currently available for purchasing securities. For new accounts, this represents the percentage value of the current balance that is available for future margin purchases.
  2. The dollar amount available for withdrawal from an account with existing marginable positions being used as collateral.



  • A loan is the lending of money from one source to another source for a specified period. A loan is a debt given by an organization to another organization with an interest rate.
  • In a loan, a borrower borrows money from the lender with a certain rate of interest and pay back it in future.
  • The main activities of financial institutions like banks, NBFC, is to provide a loan to the customer.

Types of loan

There are mainly five types of loan.


1) Secured loan

  • In a secured loan, a borrower pledges some asset as collateral like property, car etc. A mortgage loan is a type of secured loan used by a customer. In a secured loan, a money is using to purchase a property.
  • If in case the borrower fails to pay back the loan amount a lender has legal right to possess the collateral security and recover the money.


2) Unsecured loan

  • In the unsecured loan, a loan is not secured against any of property of the borrower. This type of loan is available from the financial institutions like banks, NBFCs and other private institutions.
  • In unsecured loan interest rate depends on the lender and the borrower and the rate of interest in an unsecured loan is always higher than a secured loan.
  • There is more risk associated with the unsecured loan that a customer may not pay back an amount. In case of insolvency, unsecured lenders are the second priority to pay the money.
  • An unsecured loan may be one of the followings:-
  1. Personal loans
  2. Credit card debt
  3. Bank overdrafts
  4. Line of credit
  5. Unsecured bonds


3) Demand loan

  • Demand loans, as the name suggests, are short term loans.
  • Short term loan means there is no fixed time to repay an amount it means it can be repaid at any time.
  • A demand loan uses the floating rate of interest to charge an interest.
  • A demand loan may be a secured or unsecured.


4) Term Loan

  • A term loan is a loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate. Term loans can be given on an individual basis but are often used for small business loans.
  • A term loan is a monetary loan that is repaid in regular payments over a set period of time.
  • Term loans usually last between one and ten years but may last as long as 30 years in some cases. A term loan usually involves an unfixed interest rate that will add additional balance to be repaid.


5) Subsidized loan

  • In a subsidized loan, an interest rate is reduced by subsidy. 
  • This type of loans is given to the students for education purpose.
  • Sometimes in the subsidized loan the whole amount of interest is paid by the government.


6) Concessional loan

  • A concessional loan is also called as a "soft loan".
  • A concessional loan is given either through below market interest rates, by grace periods or a combination of both.