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Mumbai: Recognising the increasing utility of electronic payments, which also ensure safety and speed of such payments, the insurance regulator, Irda has decided to permit payments for all life insurance policyholders and beneficiaries through electronic payment methods such as Electronic Clearing Service (ECS), National Electronic Funds Transfer (NEFT) systems as approved by the RBI (Reserve Bank of India) in addition to account payee cheques as stipulated in the clause mentioned above.
The Irda has modified its earlier order on AML Guidelines dt. 31st March 2006 which among others specifies that all payments should be made after due verification of the bonafide beneficiary through' account payee' cheques.
The above stipulations were aimed at having audit trail and also a control mechanism on all payments in light of the vulnerability of such fund transfers for money laundering purposes, said Irda in its new order.
RBI has been impressing upon banks the need to migrate to electronic modes for initiating and receiving payments, so that the dependence on paper-based clearing products is brought down and the payment systems universe becomes safe, secure, sound and efficient. Electronic payment systems also speed up the clearing process, apart from reducing incidence of frauds inherent in cheques, drafts and other paper modes of payment. Individuals, corporates and government departments are using electronic payment products like ECS, NEFT and RTGS extensively.
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