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DBT full form in bank is Direct Benefit Transfer, a government program designed to transfer subsidies directly to beneficiaries’ bank accounts, ensuring convenience and transparency. With many welfare programs introduced by the Government of India, DBT ensures its benefits reach the underprivileged population on time without hassle. Often, the funds released from the government trusts take time to reach the targeted population. Furthermore, if the fund distribution process involves mediators, it may take longer and increase the chances of fraud. So, DBT emerged as a reform to increase accuracy.  

Read on to learn the meaning of DBT, how it works, its types, benefits and more.  

What is Direct Benefit Transfer (DBT) in Banking? 

Introduced on January 1, 2013, the Direct Benefit Transfer Scheme enhances the transferability of the subsidies, funds and benefits directly to the people through their linked bank accounts. Using this initiative, the government aims to provide financial benefits to women, children and people involved in labour welfare.  

Initially, DBT was introduced in 43 districts, after which 78 districts were added to 27 different schemes.  

Currently, DBT has been active in 300 districts since the introduction of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).  

How Does the DBT Scheme Work?  

To improve transparency, the government starts by compiling the list of people eligible for funds with the help of the Central Plan Scheme Monitoring System (CPSMS). Afterwards, an Aadhaar card acts as a government ID through which the required details can be retrieved, making it easy to transfer funds to the intended beneficiaries.  

However, having an Aadhaar card is not mandatory, as the Government also uses the Jan Dhan Account and Mobile connections to implement DBT. With this scheme, 43 crore beneficiaries have received subsidies so far through 316 crore DBT.  

DBT, RBI and several banks, including private, public, cooperative and regional banks, process the payments directly into the beneficiary’s accounts. This way, account holders can get the funds and benefits without the involvement of any middleman.  

Also Read: Personal Loan Balance Transfer.  

Schemes Covered Under Direct Bank Transfer 

Here are different kinds of welfare and subsidy programs under the Direct Benefit Transfer scheme: 

1) Cash Transfer 

Under this option, the cash benefits that get transferred reach directly to individual beneficiaries using the following methods: 

• Direct transfer to the recipient’s account 

• From the State Treasury Account 

• Government-appointed agencies 

• From the Central/State Governments 

2) In-Kind Benefit 

With in-kind transfers, beneficiaries receive the benefits through an appointed third party. The beneficiary gets the product or service free of cost as the government or intermediary bears all internal costs. Kerosene, schoolbooks, vaccinations and fertilisers are some examples of in-kind subsidies 

3) Other Transfers 

This involves all the other types of benefits apart from cash and in-kind transfers to non-government entities that help in implementing government policies. These include community workers, NGO workers, ASHA workers, incentives, teachers and others.  

The DBT Scheme also allows fund or subsidy transfers to other non-governmental functionaries that enable the implementation of government policies. It includes community workers, aided schoolteachers, NGO workers and others. These members are not beneficiaries but are still offered training, wages, food and other benefits.  

Benefits of Direct Benefit Transfer 

Now that you know the meaning of DBT and its types, here are some top benefits: 

• DBT prevents fraud by removing middlemen, which reduces the possibility of malpractice.  

• The beneficiaries get funds directly in the account linked with their Aadhaar number.  

• It promotes accountability in distribution, which reduces delays and inconsistency.  

• It helps deserving applicants get the rightful help from government resources.  

• Direct Benefit Transfer also helps reduce the misuse of public funds.  

In addition to the above benefits, the Direct Benefit Transfer scheme proved to be most beneficial during the COVID-19 pandemic, with the imposition of lockdown. Since its introduction, beneficiaries get direct benefits from the government treasury to their bank accounts securely.  

If you need additional funds or you aren’t a beneficiary of the scheme, you can opt for the Fibe Instant Personal Loan. With rates starting at 2% per month, you can easily manage your requirements by receiving funds of up to ₹5 lakhs.  

Simply meet the minimal eligibility requirements and apply online in just a few clicks. Download the Personal Loan App or register on the website to apply for a loan today!  

FAQs on Direct Benefit Transfer 

Is Aadhaar mandatory for DBT?  

No, the government can also retrieve the required details from Jan Dhan account or mobile number linked to the bank account.  

How do I enable DBT in my bank account?  

To receive DBT benefits, you must visit your nearest bank branch and fill up the required mandate to link your Aadhaar number. If you are eligible, you will become a beneficiary of the scheme and receive its benefits. 

Who gets the DBT payment? 

Eligible beneficiaries of government schemes receive DBT payments, including farmers, students, senior citizens and low-income households. These payments ensure direct transfer of subsidies and welfare benefits to their bank accounts. 

RBI launched Digital Rupee officially as a legal tender for the wholesale segment on December 1, 2022. Taking another step towards the ‘Digital India’ initiative, the new digital currency of India is exchangeable with paper currency. 

Also referred to as the Central Bank Digital Currency (CBDC), this helps the country head towards a cashless economy. This was a welcome move as most people prefer digital payments with the Unified Payments Interface (UPI). 

However, various attributes of the Digital Rupee make it different from UPI payments. For instance, this new form of payment functions using a secure and fast payment blockchain technology similar to cryptocurrency. 

Here’s all you need to know about the digital currency of India, its working process, how it differs from cryptocurrency, its benefits and more. 

What is the Digital Rupee?

The Reserve Bank of India launched the digital currency in a phased manner. In the pilot phase, four banks recognised and issued this currency. These banks include:

• SBI
• YES Bank
• IDFC First Bank
• ICICI Bank

In the next phase, the following banks started issuing the currency:

• Bank of Baroda
• Kotak Mahindra Bank
• HDFC Bank
• Union Bank of India

Simply put, Digital Rupee is the legal currency of India you get in an electronic format. Know that this has the same domination as your physical cash. So, you can opt for CBDC in several values of the legal tenders: ₹1, ₹2, ₹5, ₹10, ₹20, ₹50, ₹100, ₹200 and so on. Furthermore, transferring digital currency from one digital wallet to another is only possible, which helps improves its security feature with a QR code. 

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How Does Digital Rupee Work? 

To use digital currency, the foremost thing you need to do is to download and register for a digital wallet. After registering, simply purchase the CBDC from the issuing banks and store it in your digital wallet. That’s all.

You can transfer funds to individuals or merchants via a QR code using the digital currency, just like you initiate UPI payments from your bank account. However, this is only possible if the recipient also has a digital wallet for CBDC. It doesn’t attract any interest and you can convert it into various forms, such as opening a deposit, transferring to your bank account and much more.

Digital Currency vs Cryptocurrency

The Reserve Bank of India regulates the digital currency of India and acknowledges it as a sovereign currency. However, it functions like a cryptocurrency, as both depend on blockchain technology and enables contactless transactions. That’s not all. There are specific differences, too. 

Firstly, CBDC, the digital currency of India is a centralised currency, while crypto is not. This means there is no regulating body or central authority for crypto while the RBI regulates CBDC. Secondly, CBDC is a legal tender which can replace physical currency. 

The value of cryptocurrencies also fluctuates as per the demand and supply factors. On the other hand, CBDC has fixed dominations, with the Government of India exercising complete control over its monetary value.

Advantages of Digital Rupee

Now that you know how the digital currency of India works, here are its benefits. 

• It is faster and more secure for digital payments
• The cost per transaction is less
• You can easily convert your bank deposits into CBDC and vice versa 
• It is protected against all types of damages, unlike physical currency
• Offers better protection against fraud and theft as there’s no third-party involvement
• It cuts the cost incurred in producing physical cash, helping the government channelise the allocated budget for other developmental plans 

Switching from physical currency towards digital currency will also help improve the economic climate of the country. That said, once the Central Bank Digital Currency gets embedded in India’s currency system, fund transfers will become safer, faster and more cost-efficient. If you are looking for a safer way to transact other than digital currency, you can get the Fibe Axis Bank Credit Card. 

This is a numberless credit card and therefore, offers better security for online transactions. You can also link it to a third-party UPI app and make seamless payments. What’s more, you get to earn cashback of up to 3% on every transaction and enjoy numerous exciting benefits, too. 

These perks include zero annual or renewal fees, complimentary lounge access and much more. Download our Personal Loan App or visit our website to apply for a credit card today! 

FAQs on Digital Rupee

What is digital rupee, and how does it work?

Digital rupee is an RBI-backed digital currency with the same denomination as a legal tender. Similar to cryptocurrency, you must purchase the currency and then you can initiate transfers like UPI transactions. 

How is UPI different from Digital Rupee?

The primary difference between UPI and Digital Rupee is centralisation, as the latter is regulated by the RBI. UPI comes under NPCI (National Payments Corporation of India) and has links with all decentralised platforms that allow fund transfer. 

What is the benefit of Digital Rupee?

Digital currency reduces the chances of theft, loss or damage compared to a physical currency. It also minimises the cost of issuing money, which can help boost the economy. 

What is the Digital Rupee in India? 

The Digital Rupee or Central Bank Digital Currency (CBDC) is a legal tender issued by the RBI, which is exchangeable with paper currency.

The bank number on a card is the first 4 to 6 digits mentioned on all payment cards. Also known as the Bank Identification Number or BIN for short, it is an essential component of your card number. It helps track stolen cards and reduces the chances of theft.

You’ll find the Bank Identification Number on various types of payment cards. These include:

• Credit cards
• Gift cards
• Debit cards
• Charge cards

Read on to learn what is BIN, where you can check BIN and more.

What is a Bank Identification Number on a Card?

The Bank Identification Number is a security measure that helps protect consumers as well as merchants engaging in transactions. It compares the data received from BIN to the data of the cardholder and hence, helps avoid identity theft, stolen card issues and credit card fraud.

Consider a bank card number example of 5656 3825 2209 1124. Here, the first set of four to 6 numbers is the BIN or the issuer identification number. A successful online transaction needs authorisation and clearance. This bank number on a card helps authorise the payment and identify the card issuer entitled to get the authorisation request for further verification. 

The authorisation process includes a thorough check of the numbers against a third-party service provider. The payment processors of most e-commerce retailers check BIN against the maintained BIN lists.

What are the Benefits of a Bank Identification Number?

Here are a few advantages of this crucial bank number on a card:

• It helps verify the identity of the purchaser
• It helps avoid identity theft and other financial fraud
• It confirms the validation of the transaction by requiring the purchaser to provide their credit card number and the card type
• It saves time by checking whether an online merchant accepts a credit card before the authorisation request

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What is a Bank Identification Number Scam?

In a BIN scam, fraudsters pretend to be from your bank and say that your account information is compromised. They may provide your personal and financial details to gain your trust. Once they get you involved, they can extract additional details of your bank account.

Once they get this information, they will give you your BIN and request you to confirm the remaining digits of your card and other information. Remember, these fraudsters can also generate numbers from a valid BIN and test them to carry out online transactions to find an active number.

How to Prevent a Bank Identification Number Scam?

Merchants can avoid such scams by verifying transactions with the help of the BIN. They can identify potential fraud by checking the billing addresses and bank locations. Merchants can also contact the issuer for verification if they suspect any suspicious transactions. 

Also Read: What is Mobile Banking?

Example of How a Bank Identification Number Works

To help you get better clarity on how BIN works, here is an example. Say you need to purchase a dress from an offline store in a mall. After choosing the dress, you decide to make the payment through your credit card. To do so, you need to swipe your credit card in their machine. 

Once you swipe the card, the system determines the specific credit card issuer through BIN. The merchant then sends an authorisation request to your credit card account. The transaction gets authorised after the approval of the request. If the purchase amount is higher than your credit card limit, the request gets declined.

If the safety feature of a credit card is your topmost priority, look no further! You can get the newly launched Fibe Axis Bank Credit Card with best-in-class security as it is a numberless card. 

It also comes with several other exciting benefits, such as up to 3% cashback on every transaction, up to 15% discount on dining with partner restaurants, complimentary airport lounge access and more. Download the Fibe Loan App or register on the website to apply for this credit card today!

FAQs on Bank Identification Number (BIN)

How do I find my Bank Identification Number?

The Bank Identification Number, or BIN, is a part of the bank number on a card. It is the first 4 to 6 digits of the number.

For instance, consider a bank card number example 3582 6674 3823 0191. Here, the first digit starting from 3 up to the digit 6 is referred to as BIN.

What is the Bank Identification Number in the passbook?

A Bank Identification Number, or BIN, is a set of 4 to 6 numbers that help identify the credit card issuer. You can check BIN on your credit, debit or other payment cards.

How many digits constitute a Bank Identification code?

A Bank Identification Number, or BIN, includes 4 to 6 digits.

What is a bank card number?

A bank card number is the unique identification number of a card issued by the bank. Credit cards, debit cards, and other such payment cards have a unique bank card number.

What is a Bank Identification Number?

A Bank Identification Number includes 4 to 6 digits that identify the credit card issuer. You can easily check BIN on your credit, gift or other payment cards.

With paper money replacing heavy coins, carrying and circulating money becomes easier. As a legal tender, paper currency holds its value even in the digital age. It will continue to do so in the near future.

Given this, you need to know the history behind the origination of paper money and how it works. Know that the Reserve Bank of India (RBI) is the authorised entity involved in the production and distribution of currency in India. 

Continue reading to understand the definition of paper money, how it works, its printing process in India and more. 

What is Paper Money? 

Paper money is an authorised medium of exchange for goods and services. Also called paper currency or bank notes, the country’s central bank regulates the printing and circulation of this medium, as RBI does for India. 

Brief History of Paper Money in India

Paper notes were first introduced in 1717 AD by the British East India Company, replacing the Mughal copper and silver coins. The Bank of Hindostan General Bank in Bengal and the Bengal Bank issued these currencies under British rule. 

As the popularity of paper notes started increasing in the 18^th century, the currency featured the British Queen. The notes included the bank name and denomination in Urdu, Bengali and Nagri. 

With the Paper Currency Act of 1861, the British government established paper currency as a legitimate document with the ‘Victoria Portrait Series’ notes. These notes were available in denominations of ₹10, ₹20, ₹50, ₹100 and ₹1,000 and printed at India’s first currency printing press in Nasik. 

After independence, India replaced the image of British rulers on the note with the Lion Capital of Ashoka at Sarnath, first printed on a ₹1 note. It wasn’t until 1996 that the Mahatma Gandhi series of paper notes were printed and circulated in the country.

How is Currency Printed in India? 

To produce Indian currency, manufacturers use 100% pure cotton, made by formulating 75% cotton with 25% linen. This ensures that the currency lasts longer, which is then added to an adhesive solution to increase its shelf life further. These notes have many security features, such as a watermark, micro lettering, security thread, intaglio, etc. 

All currencies currently circulating in the Indian economy will always be printed in these four printing presses. Security Printing and Minting Corporation of India Ltd. (SPMCIL) manages two of these, which control the press in Dewas (Madhya Pradesh) and Nashik (Maharashtra). 

Furthermore, Bharatiya Reserve Bank Note Mudran Private Ltd. (BRBNMPL) manages two of these presses located at Salboni (West Bengal) and Mysuru (Karnataka). 

How Does Paper Money Work?

Now that you are aware of the meaning of paper money, learn how it works. In the twenty-first century, paper currency only has a face value, as most paper money is fiat. This means they are not backed by physical commodities like gold and silver. Rather, they have a value banked by the stability of the issuing government.  

As paper money is a legal tender, the currency holder can make payments in exchange for goods and services. But that’s not all. You’ll be surprised to know that the currency’s stability depends on the stability of the government and the economy. Moreover, the value of currency depends on the exchange rates. 

So, if there’s a higher amount of paper currency in circulation, it will directly affect inflation as it can reduce its value. Hence, the RBI monitors the printing and circulation of money to keep inflation under control. 

Knowing all these details gives you an insight into the value of paper money, which can help you understand its effects on the economic climate. 

As the cost of printing these currencies falls on government treasuries, digital transactions will help channelise allocated funds towards developmental programs and investments that generate revenue. So, using cashless transactions can help contribute towards a better economy. 

One of the classic ways to initiate cashless transactions is using credit cards. And what’s a better option than the Fibe Axis Bank Credit Card, which allows you to make UPI-based transactions without hassle. 

This numberless credit card adds an extra layer of security to your card, letting you enjoy up to a 3% cashback on every transaction. So, download the Fibe App from the Google Play Store or App Store and apply now! 

FAQs on Paper Money 

What do you mean by paper money?

Paper money is the official currency of a country with a fixed value issued by the central bank. It allows you to make transactions in exchange for goods or services. 

How does paper money work?

It works as a legal tender backed by the government issuing the currency. While it does not have any intrinsic value, it is a crucial tool to maintain the flow of funds in an economy. 

Why is paper money important?

Historically, physical currency has been used to make transactions. It allows you the freedom to receive goods/services without involving any third parties. Furthermore, people who are not tech-savvy can make payments effortlessly with paper money.

By knowing the difference between NEFT and RTGS, you can decide which option is right for you, depending on the urgency and limit. Since the introduction of digital modes of fund transfers, these options have gradually replaced traditional methods like cheques and demand drafts.

RTGS and NEFT are among the most popular online transfer options, as you can make payments instantly or in a few hours at the most. However, both have different limits and conditions, which you must know to help you choose the right option at the right time. 

Read on to learn more about RTGS and NEFT and their differences. 

What are RTGS and NEFT?

RTGS stands for Real-Time Gross Settlement, while NEFT’s full form is National Electronics Funds Transfer. Both are digital fund transfer options that allow you to send money from one bank account to another across the country.

With NEFT, you can send funds from one bank branch to another through online transfers. However, ensure that the receiver has NEFT enabled to their account, or the fund transfer will fail. Likewise, RTGS is suitable for making high-amount transactions via online and offline modes. 

Also Read: How Net Banking Can Save Time?

Difference between NEFT and RTGS

Here are some crucial points of difference between NEFT and RTGS you should know:

Timings

When mentioning RTGS and NEFT fund transfer options, the first difference you must know is the time taken. With both options, you can transfer money within a day. If you choose NEFT, your fund transfer will get settled within 23 half-hourly batches. However, with RTGS, you can opt for real-time settlement without any waiting period.

Minimum and Maximum Limit

The minimum limit for NEFT is ₹1 without any upper limit, so you can transfer funds of any amount you want. However, for RTGS, the minimum transfer amount is ₹2 lakhs and there’s no maximum limit.

Settlement Speed

The time taken for a fund transfer or settlement is another key factor when it comes to deciding between RTGS and NEFT. NEFT takes a minimum of 30 minutes to fund a transfer since it generally takes some time to add a beneficiary to your account. 

However, RTGS, as the name suggests, offers real-time fund settlement and credits the beneficiary’s account within 30 minutes.

Charges

Another key difference between RTGS and NEFT is the additional charges applied. While you don’t have to pay any fees for inward transactions, the charges for outward transactions are different for both of them. 

For NEFT, the following charges will apply as per your transaction amount

Here are the charges for outward transactions in RTGS: 

Also Read: What is RTGS?

Which is Better: NEFT or RTGS?

With the above difference between NEFT and RTGS, it is clear that both options have their benefits and drawbacks. For instance, the minimum limit for NEFT transfer is ₹1, and it can take up to 2 hours to process. On the other hand, RTGS is only possible for amounts beyond ₹2 Lakhs, but the transfer happens immediately. 

Considering this, you can choose between the two options based on your requirements. So, if you need to make a fund transfer for a substantial amount immediately, you can choose RTGS. Similarly, to make a small transaction without any urgency, you can opt for NEFT.  

Once you clearly understand the difference between NEFT and RTGS, you can make seamless payments with your preferred fund transfer mode. It is important to note that both of these options allow transparent and secure fund transfers quicker than offline modes. 

Another option for secure and seamless payments is the Fibe Axis Bank Credit Card. This is India’s first numberless credit card and it allows you to get better security. Furthermore, it is a UPI-enabled card that offers swift payments and up to 3% cash back on all your transactions. Download the Fibe App or register on our website and apply now. 

FAQs on NEFT and RTGS

Which is best among RTGS and NEFT?

Deciding which is better, NEFT or RTGS depends on your requirements. You can consider the limits, charges and time taken to choose an option that best suits your needs. 

Why is RTGS faster than NEFT?

RTGS doesn’t follow any specific processing method and each transaction is processed as the request is made, unlike NEFT. Therefore, it is a faster option. 

Which is cheaper, NEFT or RTGS?

The cheaper option between these two depends on your transfer amount. The charges for NEFT begin at ₹2.50, plus taxes and go up to ₹25, plus taxes for amounts above ₹2 laks. On the other hand, RTGS charges start at ₹25, plus taxes for amounts above ₹2 lakhs, and go up to ₹50, plus taxes for transfers of ₹50 lakhs and above.