- Although paper-based transactions may never be completely eliminated due to the geographic spread of the country and limits of clearing house services, India has moved quickly into e-banking these past years.
- Large business centres now all have magnetic ink character recognition cheque-clearing processes, and the Reserve Bank of India has been instrumental in introducing an electronic clearing service, electronic funds transfer, and the special electronic funds transfer system.
- Credit, debit, and smart cards are also gaining popularity in India, but real-time gross settlement (RTGS) is seen as essential to moving India into full e-banking status.
- RTGS will impact banks' technology, their change and risk management, business practices and new products, and the legal system.
"Once upon a time, to make payments in India, you had to obtain a paper instrument and then send it to the beneficiary - hoping that it would not be lost in transit and/or fraudulently cashed. The beneficiary would then deposit the piece of paper with the banker and obtain payment after a few days. This entire payment process could take anywhere from a few days to a few weeks."
