The ultimate aim of any modern corporate is growth with profit maximization. Growth is the first and foremost characteristic of nature and its products which include modern societies with all their industrial, agricultural and service sectors and above all the research organizations to cater to the needs of primary, secondary and tertiary sectors. Governed by the laws of the universe and nature, societies, markets and above all human life are in the constant churn of development in the realm of creativity and innovativeness.

Major problems associated with current payment and settlement systems in India are their regionality and different local practices. These are also roadblocks for the product innovation in payment system. RBI has planned a national entity for payment and settlement system which will be helpful in new product innovation besides increased awareness among customers about various channels available for payment and settlement system.

At present there are diverse payment systems functioning in the country, ranging from the paper-based systems to the most sophisticated electronic fund transfer system. In paper-based payment systems the instruments are physically exchanged and settlements worked out manually. They typically handle transactions which are low in value, but very large in number, relating to individuals, firms and corporates. These transactions relate mainly to settlement of obligations arising from purchase of goods and services. In India, there are about 1050 cheque clearing houses and clearing and settling transactions relating to various types of paper-based instruments like cheques, drafts, payment orders, interest/dividend warrants, etc. Out of 1050, in 40 clearing houses, Cheque Processing Centres (CPCs) using MICR technology have been set up. The clearing houses at 16 places, including four metros, are managed by the Reserve Bank which also functions as the settlement banker at these places. In other places, the clearing houses are managed by the State Bank of India and certain other public sector banks and the settlement bank functions are also performed by the respective banks. The clearing houses are voluntary bodies set up by the participating banks and post offices and functioning in an autonomous manner. The Reserve Bank has issued the Uniform Regulations and Rules for Bankers' Clearing Houses (URRBCH) which has been adopted by all the clearing houses. These regulations and rules relate to the criteria for membership/sub-membership, withdrawal/removal/suspension from membership and the procedures for conducting of clearing as well as settlement of claims between members.

Payment and Settlement System in India,payment, settlement, innovation, transactions, product, customers, electronic, banker, problems, services, roadblocks, adopted, technology, Cheque Processing Centres,Uniform Regulations and Rules for Bankers' Clearing Houses, public sector banks.