Domestic Payments

Domestic Payments

Domestic Payments, as the name suggests within a single geographical jurisdiction transfers. When payer and payee resides in the same country and the transfers happening in local currency which uses a single common clearing system, then the payment becomes domestic in nature. They are also called as “Domestic Transfers“.

Domestic payments general requirements:

  • Payers Name & Address
  • Payees Name & Address
  • Payees Bank Name and Unique ID [BIC/National Clearing System Codes]
  • Transfer currency is in local currency or currency supported by common local clearing system
  • Payers and Payees Bank’s to be members of common clearing system
Examples
  1. ¬†Arun, an ICICI Bank, Bengaluru customer transferring 500INR to his friend Roger, customer of SBI, Hyderabad. Both the parties have accounts in INR. –P2P
  2. Johny, a HDFC Bank, Mysore customer paying tax to Govt. of India. Both the parties account in INR, taxes paid are in INR, Govt. account is with Canara Bank, Delhi. –P2G
  3. Rahim, a customer of IDBI Bank, Mumbai paying Tata Chemicals, who owns an account with RBL Bank, Ahemadabad. Both accounts are in INR, transfer currency is in INR. –P2B
  4. Agriculture Ministry of India, having an account of INR with Union Bank of India, Chennai, issuing monetary relief to a farmer in INR for his crop damage due to calamity. Farmer account is in Cochi with Syndicate Bank. Accounts of parties are in INR. –G2P
  5. Agriculture Ministry of India, having an account of INR with Union Bank of India, Chennai, issuing 50% monetary relief to a farmers in Karnataka by transferring money to Karnataka State Farmer’s Ministry account (Karnataka Bank, Tumkur, currency INR) –G2G
  6. Ministry of Renewable Energy having an account in INR with HDFC Bank, Kolar issuing subsidy to Bharat Petroleum whose account(INR) is with Andhra Bank, Kalluru – G2B
  7. Fruit Basket having INR account with SBI, Tumkur issuing refund(INR) to a customer due to bad product, customer having INR account with Punjab National Bank, Chitoor – B2P
  8. Tata Motors having account in INR with DBS, Delhi paying(in INR) to Tata Steel for steel purchase. Tata Steel having account(INR) with CITI, Badravathi – B2B
  9. Reliance Fresh company paying(INR) out for the vegetable purchase to APMC Yard, Yeshwanthapur. Reliance Fresh has account(INR) with Indian Bank, Madur and APMC(State owned) account(INR) is held with City Union Bank, Chikkaballapur – B2G
Did you know about other types of payments apart from Domestic? check out here: SEPA, Global Payments, Book Transfers.
Note1:

Domestic Payments (A.K.A Domestic Transfers) discussed here are w.r.t electronic fund transfers but even paying out using bank notes between parties can also be termed “Domestic” but this requires requirements discussed above (account, clearing system).

Note2:

Any payments happening within same Bank and transfer of funds between different accounts of same party are a special type of domestic payments which are discussed later under “Book Transfers”

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