1. National Clearing Data Center 2009
Functional Requirement specifications
OF
National Clearing Data Center
FOR
National Payment Corporation of India
6th Floor, Stadium House
Veer Nariman Road, Mumbai 400021
BY
IIT Solutions Private Limited
120, Kothari Industrial Estate,
L. B. S. Marg, Bhandup (East)
Mumbai 400078
www.iits.in, info@iits.in
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2. National Clearing Data Center 2009
Index Page
Sr. No. CONTENT PAGE No.
1 Introduction 3
2 NCPI Website functions 5
3 Proposed Hardware Architecture Diagram 6
4 Proposed Software Application Architecture 7
5 List of Applications/ Module, Locations, Users and 8
Functional Specifications
6 Big Picture Diagram 10
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3. National Clearing Data Center 2009
1. Introduction:
This proposed system document has been prepared based on the study carried out (Available as a separate document) on
the current clearing operations and processes at various levels like Manual, MMBCS based, MICR and CTS Clearing Houses
being run by RBI and other nationalized banks across India at more than 1000 locations.
NPCI has versioned a centralized tracking of all clearing transactions that will achieve:
a. Daily settlement of each banks position due to clearing on daily basis with efficient systems and operations.
b. Empower the Clearing houses with the state of the art secured systems and processes software solutions.
c. Provides systems and processes to ensure that the clearing differences are kept close to zero with help from member
banks.
d. With the best of technology this also should be a more economical operation if possible.
e. The exact time of operations of clearing houses and the debits & credits to bank accounts to be tracked.
f. Track the movement, transactions on value, volume basis with trends to take improvements and changes timely.
g. Make a suggestion for architecture, hardware, software and technology and seek improvements on this through RFP.
h. Set standard files formats that need to be exchanged amongst banks and also between Clearing House and NCDC.
i. Make this user friendly and incorporate a module to process requests and complaints from all users.
j. Track all bank holiday for all states and enable clearing house within specified time. In case there is need to extend hours
submit reason why extended time was required.
k. The system will also have all rules, regulations, operations procedures and manuals available online to all users based on
their roles and requirements.
l. This will have a very strong secure user and role management to create and define new roles and functions to ensure that
the users seen only what is to be seen by them i.e. there is no need to view data and report that is irrelevant to them.
m. Database structure and reports will be so designed to be able to drill down from day to week to month to year(s) for a
given range of date.
n. EOD will be allowed at all operational levels only after the data is completely uploaded to central NCDC servers.
o. Suggest possible methodology that can be adapted to provide MICR code to each and every bank branch.
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4. National Clearing Data Center 2009
2. External Boundaries for NCDC:
CTS / MICR RBI Existing Interface to
Clearing Houses Data Center at Users at RBI,
Nagpur NPCI & Banks
Manual / MMBCS National Clearing
Clearing Houses Data Center (NCDC) Utilities MIS,
Non-MICR /
Centralised at Holidays,
Manual Clearing
Banks Website Queries etc
Houses
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5. National Clearing Data Center 2009
3. Major Functions Covered Under NCDC:
N-MICR non-
CTS / MICR N-MICR MMBCS CTS Clearing
MMBCS
Clearing Center Clearing Center Centers
Clearing Center
Interface Interface
Interface
Government
Master Circular Revenue
Management with Executive Query
History for All Interface
Users
Complaint And NPCI Website Bank Executive
Request Administrator, Supervisor user Interface
Processing users & Operators
Executive User
Interface NPCI /
National Holiday RBI
management (just
recording)
Yearly Reports and
Daily Reports Weekly reports Monthly reports Processing specific
same to Month /
Printing Operations and same to date and same to date reports on request
Date
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6. National Clearing Data Center 2009
4. The complete over all System of Multiple servers:
The following server cluster diagram indicates that the servers replicate data amongst themselves to ensure high availability of the
system to all users and their queries operations can be executed from any server depending on the data replication time across the
server. Excluding the absolute live operation all applications can be run from any server.
a. The usrs loggedin information and his current page operations status are available in all servers to ensure that the query
requested by the user is answered by the server that is free.
b. We can mark one of the server as DR back up site equivalent to live operation and that takes over the live operation when
one of the server fails or is overloaded with queue of requests.
c. This will ensure high availability and faster user program query execution.
d. Each of the server location has Reporting Server, Image storage server and database server to the capaity it serves.
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7. National Clearing Data Center 2009
Transaction Replication:
The data is replicated from each server to the other server through the transaction log and this is a contineous process where we set
the replication time for the data transfer from online to every x time depending on the application requirements.
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8. National Clearing Data Center 2009
Database Mirroring:
The database mirroring is done for the Distributor database.
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9. National Clearing Data Center 2009
5. National Clearing data Center Connectivity:
National Clearing Data Centers Connectivity Over NPCI / Bank / Public Network
Members of MMBCS
Clearing House
Physically Exchange
Cheques (City C)
Member Bank n Manual clearing Members
MMBCS City C Manual Clearing without Computer
House
MICR Clearing
House `
MMBCS Clearing City B
House City C Manual clearing Members
Member Bank 2 Members of MICR
without Computer
NPCI
MMBCS City C Clearing House Present
Network
Outward Cheques (un-
CTS Clearing encoded) with XML data
MICR Clearing
House file through NPCI Network
House City A
Can Easily adapt to CTS
with scanners at Bank
branches
Member Bank 1
MMBCS City C
Distributed NCDC
Replicated City 2
Server Locations
NPCI
Private Network
NPCI
Network NCDC Network
City 1
NCDC
City 3
Bank / Public Bank / Public
Member Network Network Member Bank 2
Member Bank 2 Cheque Scanner Member Bank 1 City A
Bank 1 Branch 1 City A
Cheque Scanner
Branch 1
Cheque Scanner
Member Bank n Branch 2 Cheque Scanner Member Bank n
Member Bank 3 Member Bank 3
One Branch 2 City A
connection City A
per Bank
Cheque Scanner
Branch n Cheque Scanner
Branch n
Page 1
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10. National Clearing Data Center 2009
NPCI National Clearing data Server Grid Detailed Overview
This is Back up server Located at Nagpur
and daily back up is taken from all the Four
Servers at EOD. All Executive MIS is
available from here to RBI and NPCI
File Server Executive
Data Base Real Time Streaming Web Application Print Rerver
Communication Media
Zonal Servers Grid
Server South Server West Server East
Server North
Chennai Mumbai Kolkata
Delhi
These Servers are at State capitals to support routine Clearing house Operations.
Please note that the operation of these servers can be achieved by
scaling up the configuration of the four regional Servers.
Page 1
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11. National Clearing Data Center 2009
Transaction Data Flow from Service Branch to NCDC Data Center
Maker Operations at Bank Branches UPLOAD the Outward Files to
Iteration until all Checker
Validate State Clearing House server and confirm
Outward entry the data is YES
Validate data & All Data Entry Outward Data end of upload / Download Inward Files
& Marking validated
return to maker Completed? and delivery From Server Confirmation of end of
returns for all process is necessary
in case of error Cheques Revalidate data &
Branches
NO Cheques from Server
reports
Operations at Clearing House
Download Inward Members collect reports Record discrepancies Confirm and close
Wait till All Is Process
YES Reports for banks validate Exchange and These are to be Day’s operation for
files are Complete
& Clearing House Cheques and Confirm adjusted in This clearing data is available
uploaded at Server
register Figures at MMBCS centers return clearing at state server
ON For MICR & CTS batch
presentations are made
Operations at State Server
Upload Data for The servers at
Receive Files for Process & on Generate Inward Wait For Clearing
all Clearing house these locations are
Clearing Member member Bank list bank wise House to confirm
` on their confirmation. also capable of
banks of All Confirmation Update and Clearing End of Clearing
Track all clearing house running the CTS
Clearing Houses each Clearing House House register Zone
operations are done Clearing Houses
Operations at Zonal Server
These servers are identical to configuration being used at NCR Delhi with scalable volume. Upload Data for
The total clearing house operations for all clearings types and all zones are operated here. all Clearing house
Operations of Major Cities EOD reports are available live for one week & older from the backup servers on their confirmation.
CTS Clearings
` Live data access by all users is from this servers Track all clearing house
Similar to delhi All utility services are executed from these servers & also from state level servers also. operations are done
Operations at Back Up Server at Nagpur Server Upload Data for
all Clearing house
Has back up to previous Web based on their confirmation.
day data & can be live` for any server if others application on all Track all clearing house
can not support Servers is identical operations are done
Page 1
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12. National Clearing Data Center 2009
6. Proposed Hardware Architecture Diagram (Single set of Server / Users)
N A T IO N A L C L E A R IN G D A T A C E N T E R
( R e p lic a te d a t 3 – 4 lo c a tio n s p a ra lle l L iv e s ite s )
C le a rin g H o u s e s o f U s e rs a t S ite
V a rio u s T y p e s (C T S ,
M IC R , M M B C S , M a n u a l)
D a ta
D a ta b a se S e rve r
W e b S e rve r
IIS
P re se n ta tio n L a ye r
B u sin e ss L a ye r
D a ta L a ye r
R e p o rt A rch iva l a n d S e rve r
Im a g e S to ra g e a n d A rch iva l S e rve r
N P C I N e tw o rk
L A P T O P / E x e c u tiv e s a te R B I, N P C I a n d B a n k s to v ie w
R e p o rt V ie w ,
C o m p la in t & R e q u e s t a n d C irc u la rs
O p e ra tio n s L im ite d to th e ir s p e c ific n e e d s
B ra n c h L o c a tio n C le a rin g P ro je c t : NCDC
M e m b e r U s e rs D ia g ra m : S y s te m A rc h itu re D ia g ra m
A u th o r : V in a y K a b ra (IIT S )
V e rs io n : 1 .0
R e l. D a te : 2 4 O c to b e r 2 0 0 9
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13. National Clearing Data Center 2009
7. MMBCS Clearing House Operations:
Clearing Incharge Reports Sorted &
Organised
Reports Generated
Bank Representative
Bank Representative
Bank Representative
Bank Representative
MMBCS Clearing House operations / Without computers It is Manual CH:
All members of clearing house Hand over floppy to Clearing Head and
move to table & exchange cheques.
2. Clearing head merges floppy, generates reports, sorts and hand over
to Clearing members
3. They match reports Non-conformity is informed, updated till all
reports match.
4. Leave with final settlement reports.
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14. National Clearing Data Center 2009
8. Proposed Software Application Architecture:
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15. National Clearing Data Center 2009
9. List of Applications/ Module, Locations, Users and Functional Specifications:
SN Application/Module Location Users Brief Functional Description
Name
1 Data Entry (Web Browser Based) Bank Branch / DEO and Individual detailed cheque entry for beneficiary name,
MMBCS type of centers Service Branch Executive Account Number, cheque number, drawee bank, Account
Type, MICR Code, Presentation date and amount.
Upload, Download clearing Files, reports detailed and
summary for Inward, Outward, Inward Returns, Outwards
Returns and settlement register from NCDC website.
This will also have facility to mark return from Inward
cheques, and will also have provision to enter the
receivable and payable differences to server directly.
2 Data Entry (Client Server) Bank Branch / DEO and Individual detailed cheque entry for beneficiary name,
MMBCS type of centers Service Branch Executive Account Number, cheque number, drawee bank, Account
Type, MICR Code, Presentation date and amount.
Upload, Download clearing Files, reports detailed and
summary for Outward clearing cheques.
This will also have facility to mark return from Inward
cheques, Create and upload the return file. Similarly this
will also have provision to enter the receivable and
payable differences, create and upload difference file.
3 Clearing House: (Web Browser MMBCS Executive Admin to view if any bank is missing for their presentation.
Based) MMBCS type of centers Clearing House and Generate Inward, Outward returns and inward returns list
Manager for banks generate settlement register for all banks to view
and confirm net position from all.
MIS reports generation for internal use and reporting to
higher management.
4 Clearing House: (Client Server MMBCS Executive In case of any problem due to internet link the user will
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16. National Clearing Data Center 2009
Based) MMBCS type of centers Clearing House and have option to use this program to upload CD / Floppy /
Manager Pen drive from all member banks and complete the
operations and generate Clearing House Settlement
Register.
5 MICR Clearing without Encoders Bank Branches DEO, The changes at banks will be sending the batches without
& Executives encoding through the encoder and only the endorsement
Service Branch and will be done by cheque reader / encoder or scanner.
Manager
The data capture program will be possible to be entered or
uploaded using the MMBCS program.
Physical cheques are to be sent to clearing house in
batches with preprinted batch ticket having presenting
branch code, serial number and amount (optional). This is
identical to current presentation system except that there
is no amount encoding on the cheque.
This proposed system will be efficient and economical
since there will be no errors due to wrong amount.
There will also be a provision to send the data file in CD to
clearing house if there are issues with internet
connectivity.
6 MICR Clearing without Encoders MICR Clearing DEO, The clearing house will accept batches and blocks of
House Executives cheques and process these for reading, correction, sorting
and and generating reports & delivery of inward cheques to
Manager bank along with the settlement register.
The system needs to work without amount capture from
MICR cheques and will correctly extrapolate the MICR
data record for each presented cheque with the right
amount based on the data file received from them. These
clearing houses operations including the activity times are
uploaded t the central NCDC site on completion of work.
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17. National Clearing Data Center 2009
through the changes that are changes at banks will be
sending the batches without encoding through the encoder
and only the endorsement will be done by cheque reader /
encoder or scanner. The captured data program will be
possible to be entered or uploaded using the MMBCS
program. Physical cheques are to be sent to clearing
house in batches with preprinted batch ticket having
branch code, serial number and amount. Sorting and
settlement will happen as per the present system and this
proposed system will not have errors due to wrong amount
reading / correction.
There will also be a provision to send the data file in CD to
clearing house if there are issues with internet
connectivity.
7 CTS Clearing at MICR centers Bank Branches DEO, This step is a simple extension from the above proposed
(near future step) & Executives process by adding the images by adding cheque scanners
Service Branch and for data capture.
Manager
The upload, download of image and data files will be quite
similar to present CTS Operations at NCR Delhi with
scope to improve security and lower cost.
8 CTS Clearing at MICR centers MICR Clearing DEO, This will be a web based solution similar to the one
(near future step) House Executives deployed at NCR Delhi with scope to improve security and
and lower cost.
Manager This study will be detailed out within a week while the draft
proposal will be reviewed by the NPCI executives.
9 Utilities
9.1 Daily Settlement Position local At all servers Executives Depending on the availability of the data at the server the
clearing house to National level at Bank / local Summary of the clearing houses and settlement
NOCI reports will be available. The central server will have the
national position, regional will provide the regional
information and state will provide for the state level
information. Users will see only their relevant information.
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18. National Clearing Data Center 2009
9.2 Master Holiday Management At all Servers System This is to ensure that the clearing houses are operational
system Executives only when they are required to operate. This should also
NPCI help in removing the national clearing cheque
presentations to other regions when they have holidays.
Should this be controlled with CBS solutions in bank?
9.4 Requests, complaints and query The users can request for amendments by indicating their
processing module practical operational difficulties, for new formats of reports.
Similarly there will be scope to put in their complaints and
queries about the system, operations specific situations
not yet addressed by the system.
These will be directly answered by the NPCI executives
and staff directly or with referring to the right level in case
of complex queries, update in application software /
reports.
9.5 Queries to address Government Here the doubtful transactions can be queried and these
Revenue department and will be reviewed by senior executives and then forwarded
Ministry queries about specific judiciously to the system executives for further processing.
transactions
9.6 Data Mining Functionalities Indicate the scope what all could be done by their software
with these tools to locate circular, fraud transactions
processed by certain accounts across India.
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19. National Clearing Data Center 2009
10. Software Specifications for MMBCS Clearing Operations
Note:
1. This software works with client server and web based with NCDC servers.
2. The entire functions are covered with a single application.
3. The functional requirement of the software is divided as per the location of use.
4. All file structures for upload and download are provided in a separate document.
AT Clearing Member Bank Branches:
1. Set Bank Branch Details (Bank Name, Branch Name, City, MICR Code, Clearing House, Weekly Holiday, Operation
Time)
2. Set Clearing Types (Inward, Outward, Returns for various types of Clearing) with standard batch size for each clearing.
3. Software Installation Version(To be part of each file being uploaded)
4. Set Image repository path
5. Set Signature image repository Path.
6. Master list of Banks in the clearing house where
Outward Clearing Operations:.
1. Any branch can do data entry for other branch also
2. Select Clearing Type
3. Select Mandatory Fields for this Clearing
4. Select Cheques only or Slips and cheques only. The software provides multiple cheques with single slip or single cheque
with multiple slips with balancing facility.
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20. National Clearing Data Center 2009
5. Complete data entry to cover some or all of Cheque number, Beneficiary Account Number, Beneficiary Name, Payee
Account Number, Transaction Code, payee bank code, Amount, Cheque date for each cheque.
6. Close batches on reaching batch count set for the clearing house.
7. Create file for outward Clearing and send cheques with file to Service branch.
8. Service branch also has the outward clearing program and can enter cheques for all their branches.
9. Service Branches of banks will have internet connectivity and those banks who do not have this will be provided this by
their clearing House.
7. The service branch uploads creates outward file and is uploaded to NCDC server through the terminal that has secured
login and the software.
8. Service branch even after upload can enter any new received cheque directly to the NCDC server through the terminal
that has secured login.
9. The outward presentation cheque report bank wise amount wise sorted report can be generated from local software or
from the NCDC server for verification and validation.
10. The bank Representative goes to Clearing house with the sorted cheques with the list for each drawee bank of clearing
house.
Clearing House Operations:
1. Bank Representatives come to clearing house and exchange cheques with the list. The software has provision to print the
Inward list of each bank at clearing house with continuous stationary and there is no printing required at service branches
of bank.
2. Clearing houses publishes the Clearing House balance register and get confirmation from the bank representatives.
3. Updates in case there is any difference in the inward cheques in NCDC data center.
4. The NCDC on confirmation from Clearing house associates a unique transaction number
5. The Final settlement register can be downloaded by any service branch of bank that has NCDC software terminal.
6. Bank representatives then return back with their inward clearing cheques with the list and their net position figure.
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21. National Clearing Data Center 2009
Inward Clearing and Inward Returns Operations:
1. Select Clearing type in the system and date. (some times it becomes necessary to allow late returns by mutual consent
within the presenting and drawee bank and a previous date can be selected. Though this is not right practice but system
has provision for the same.
2. Download the inward clearing file from NCDC website by selecting the clearing code.
3. Debiting the account will be an internal process to banks and they will have only the cheques that are to be returned are
available for Mark the return cheques with their reason code.
4. Create upload file for return clearing.
5. The service branch of banks can directly mark the returns with the reason code and hence there will not be any need to
create and upload file.
6. The return reason code master is maintained at NCDC server and the will be synchronised to local system.
7. The beneficiary account number is also required to be updated on NCDC server for all inward cheques. This can be
optional for some time but can be mandatory in future.
Outward Return Clearing at Clearing House:
1. Select the outward presentation cheques
2. Identical to outward presentation the return cheque list is made available to clearing member banks.
3. The cheques are the ones which were presented by them in their previous outward clearing. At times these could be from
other previous outward clearing of some other date.
4. These are matched and confirmed to clearing house that does discrepancy updates on the NCDC website prior to
generating the reports.
5. Clearing house members return with their outward clearing return cheques.
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22. National Clearing Data Center 2009
Outward Return Operations at bank branches:
1. Download the outward return file and reports.
Query execution facility for banks:
1. The reports for any day can be viewed, printed, downloaded by banks for specific number of days for which the data is
kept live.
2. Query on older reports will be available through the complaint and request module at this website.
3. To get any specific transaction details user needs to give the known parameters of transaction and run the query and the
returned list will be all those transaction having the entered parameter for given range of dates.
Request Module:
1. This will be used by the clearing member / clearing house to set up local internal circulars in relation to clearing
operations.
2. These requests will be like as given below with reason for the same:
i. Not participating for clearing on specific day due to some reasons.
ii. Clearing house closed on specific day.
iii. Any other internal circulars.
Holiday maintenance for all state across India:
1. The NCDC website will have all India holiday maintenance for all states.
2. This will ensure the operations of clearing houses only on the non holidays.
MIS Reports:
1. This will be to monitor the time of start and end of clearing house operations.
2. Other list of reports will be added to this.
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23. National Clearing Data Center 2009
11. Software Specifications for MICR Clearing Houses:
The proposal for existing centers is to move these to CTS based clearing operations in two steps.
1. Convert these to MICR centers without encoding with huge operational and processing cost saving.
2. Gradually move these to CTS clearing house operations.
Banks Outward presentation of cheques without encoding:
SN Current Operations Proposed Operation Advantage / Disadvantage
1 Banks enter data Once in Step to encoding amount on cheque will be Errors arising due to encoding
their system and create removed & just endorsement will be done on will not exist. Original amount
batches and send for batches. Each presentation document is having of cheque will be available with
Amount and batch ticket unique presentation number from each bank each cheque that is entered
encoding. and batch tickets are also inserted within the with balancing the slip amount.
cheque records with data.
2 At present the capturing of Capturing of these will be mandatory and Some banks will have to start
the Drawee bank MICR code without this the the electronic data of the this and some are already
and TN are not mandatory. presenting bank will not be accepted at the capturing this for their internal
clearing house. use.
3 Encoded cheques with batch Pre-encoded batch ticket (Serial Number, Clearing house is provided by
tickets are sent to Clearing Presenting Bank Branch code, TC) will be sent the data completely that helps
house and no data is sent to clearing house in front of each batch and the in reduction of payable and
separately. record will have the details from the batch receivable differences.
tickets. Electronic data will be sent on CD or
through the secured network.
4 Endorsement is done by the This can be done using cheque scanners and Very cost effective as the
cheque encoders. image is also available at banks end and scanners give better cost per
captures the MICR band. instruments & preprinted fields
are also captured saving in
data entry time and errors.
5 Not really CTS ready Can quickly shift to CTS with training only. CTS Readiness
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24. National Clearing Data Center 2009
Operational changes at clearing House:
SN Current Operations Proposed Operation Advantage / Disadvantage
1 Amount reading errors exists There will not be any error on amount capture Saving time, reducing clearing
as this will be taken from banks presentation file. differences, better accuracy
2 Rejection re-entry has The preprinted fields entry is validated against Saving time, reducing clearing
possibility of entering wrong the data available from the banks outward file differences and better
values. and hence a better check for validation accuracy of processing.
3 Reports related to amount There will not be any report related to amount Mismatch due to amount in file
encoding errors are required encoding errors. and physical cheque remains.
4 Uses correction terminals for The number of terminals will be reduced. Staff reduced, saving cost and
about 1% amount encoding time, reducing clearing
errors in reading differences.
Note: This requires an update on the software running at existing MICR Clearing houses and is the only bottleneck.
Inward clearing does not change and the received cheques do not have any amount encoded on them.
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25. National Clearing Data Center 2009
12. Software Specifications for CTS Clearing Centers:
We can adapt the existing CTS operation as being done at Delhi. Yes there could be some change in the file structure to
accommodate the plan to track the clearing solutions from end to end.
13. Other Administrative utilities:
The utilities in this system will be as given below:
Administrator Role at NPCI:
1. Set up Administrator roles for organizations using the specific part of the software. The administrator will have the rights to
create roles within the organization.
2. The updates in the client server programs will be updated by the organization based on notification and process to
download and install. System administrator is informed about this through mail notification with the version number in
upload file header.
The proposed system will have many roles for different types of users at various organizations. These
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26. National Clearing Data Center 2009
14. Proposed Clearing File Structures:
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