Procedural Guidelines1

Procedural Guidelines for AEPS
PROCEDURAL GUIDELINES
FOR
AADHAAR
ENABLED
PAYMENT
SYSTEM
Version 1.4
Approved for Pilot launch by the Reserve Bank of India vide letter no. DPSS. CO. PD. No.
1584/ 02.017.001/ 2010-11 dated January 11 2011.
National Payments Corporation of India Confidential Page 1 of 69

Procedural Guidelines for Aadhaar Enabled Payment System

1. Short title of the Service.
The new payment service offered by the National Payments Corporation of India to banks,
financial institutions using ‘Aadhaar’, the Unique Identification Authority of India (UIDAI)
issued unique identification number shall be known as ‘Aadhaar Enabled Payment
System’ and shall be referred to as “AEPS” hereinafter.
2. This procedural guidelines document for AEPS of the National Payments Corporation of
India is based on and has references to:
a) MICRO-ATM STANDARDS report of the working group on technology issues of the
Indian Banks Association and UIDAI for banking services facilitated, hardware and
interbank message flow.
b) AEPS Interface Specifications of National Payments Corporation of India.
c) Aadhaar Authentication API and Devices Security Specifications and Biometric
Fingerprint Scanner Specifications of the Unique Identification Authority of India for
Aadhaar authentication.
3. Definitions.
The acronyms/abbreviations used in this document with their descriptions and meanings
are listed in Annexure-I.
4. Objectives of AEPS:
a) To empower a bank customer to use Aadhaar as his/her identity to access his/ her
respective Aadhaar enabled bank account and perform basic banking transactions like
balance enquiry, Cash deposit, cash withdrawal, remittances that are intrabank or
interbank in nature, through a Business Correspondent.
b) To sub-serve the goal of Government of India (GoI) and Reserve Bank of India (RBI) in
furthering Financial Inclusion.
c) To sub-serve the goal of RBI in electronification of retail payments.
d) To enable banks to route the Aadhaar initiated interbank transactions through a central
switching and clearing agency.
e) To facilitate disbursements of Government entitlements like NREGA, Social Security

pension, Handicapped Old Age Pension etc. of any Central or State Government bodies,
using Aadhaar and authentication thereof as supported by UIDAI.
f) To facilitate inter-operability across banks in a safe and secured manner.
g) To build the foundation for a full range of Aadhaar enabled Banking services.

5. AEPS Membership:
a) All existing members of National Financial Switch (NFS) are eligible to participate in
AEPS. NFS members intending to participate in AEPS may apply for membership in the
format as given in Annexure-II.
b) A bank that is not a member of NFS can also join AEPS provided :
i) The applicant bank is a type A member of the RBI’s Real Time Gross Settlement
System.
ii) The applicant bank undertakes to join NFS within 3 months on payment of a onetime
membership fee of Rs. 3,00,000.00 (Rupees Three lakhs only)
iii) The applicant bank is willing to contribute to the Settlement Guarantee Fund of NPCI.
6. Certification:
a) On admission of a bank as a member to participate in AEPS, NPCI will prepare a project
plan detailing steps needed for establishing Host-to-Host connectivity between a
member bank and NPCI. The interface specifications would be made available to banks
upon approval of the application and admission of the bank in AEPS.
b) Apart from this, the project plan will also document steps related to test plan and test
execution. The test plan will detail all the personnel involved in conducting the
acceptance test.
c) If any third party on behalf of NPCI develops software application or releases new
version of the software, NPCI reserves the right to upgrade the existing system after
appropriate certification. Such enhancements pertaining to software should comply with
Industry Standards and will be undertaken after a notice of sixty (60) days to all
member banks participating in the AEPS Network. However, NPCI will examine whether
to proceed for re-certification and in such case all expenses pertaining to re-certification
will be borne by the member banks. All such software enhancements and new versions
of software so released will be retained by NPCI.
d) If a member bank develops software application or releases new version of the software,
the respective member bank should notify NPCI at least sixty (60) days in advance and
should allow NPCI to perform re-certification. All cost associated with re-certification
will be borne by the member bank migrating to new platform.
7. Customer Participation:
a) Any resident of India having an Aadhaar number with his/her bank account linked to
the Aadhaar number and willing to use the services of a Business Correspondent of a
Bank, can participate in AEPS service.
b) For the purpose of financial inclusion, institutions like LIC, Banks become registrars to
the UIDAI and undertake Aadhaar enrolment for their customers.

c) Banks as registrars to UIDAI may choose to issue a card to enable Interoperability

between urban ATMs and MicroATM for financial inclusion customers. In order to
enable financial inclusion customers to use the urban ATM and the services of business
correspondents wherever accessible seamlessly, banks as registrars to UIDAI may
choose to issue a card (which can be read at regular urban ATM and swiped at
MicroATMs) having the Aadhaar number and ISO BIN/IIN embedded in the card as given
by NPCI. This will help the customer to have an identity card and enable him/ her to
access basic banking services without the need to memorize a 12 digit Aadhaar number
and 6 digits ISO IIN. The card is swiped at a regular ATM/ MicroATMs and thereafter
providing his/ her biometric data (fingerprints) for authentication, the customer can
avail the banking services.
d) Aadhaar can be linked to a bank account for use in carrying out banking transactions
like, balance enquiry, Cash deposit, Cash Withdrawal and Remittances including
receiving of government entitlements like Social Security Pension etc. A bank account
linked to an Aadhaar will be known as an Aadhaar enabled bank account.
e) For availing AEPS, a bank customer shall use his/her their respective Aadhaar enabled
Account for carrying out all Aadhaar enabled banking transactions like balance enquiry,
cash deposit, cash withdrawal and remittance to another person’s Aadhaar enabled
bank account. Other services may get progressively added based on member banks
inputs and customer needs.
8. Issuer Identification Number - IIN:

a) A Bank offering AEPS shall advise an Aadhaar enabled bank account holder its unique
Issuer Identification Number (IIN) for referring to the bank in all his/her AEPS
Transactions. The IIN will be a six digit number which will be allotted to a bank upon an
application to NPCI from the Bank seeking IIN for AEPS. (Annexure-XIV).
b) The Aadhaar number of the beneficiary would be accompanied by the IIN of the
Beneficiary’s Bank. Thus the input for uniquely referring to the beneficiary’s (or the
destination) account would be:
IIN + Aadhaar number
c) IIN coupled with Aadhaar number will uniquely link to an Aadhaar enabled bank
account with that Bank. Alternatively, instead of entering the digits for IIN, it may be
represented at the MicroATM level by the respective banks’ name/ logo, which may be
selected from a drop down menu. This would make the customer experience richer.
9. Customer Access Point:

a) The Customer access points may have Business Correspondents (BC) using Point of Sale
(POS) devices to facilitate customers to make Cash Deposit, Cash Withdrawal, Fund
Transfer and Balance Enquiry and other services which may get introduced from time to

time based on member bank inputs and customer needs. The POS devices used by BC
should adhere to the standards as specified in the document on MicroATM standards
referred to in paragraph 2 a) of this document.
b) A Business Correspondent is an intermediary used by a bank to extend Banking

services in areas where they do not have a branch. The scope of activities undertaken by
the Business Correspondents includes, inter alia, collection of small value deposits, Cash
withdrawals and small value interbank remittances. Member banks are advised to refer
to various RBI notifications on Financial Inclusion from time to time for more details.
c) Within the scope of AEPS, a BC of a bank is treated as an integral part of the Bank that it
corresponds with. The Bank will be known as its Correspondent Bank. The Bank will be
responsible for all acts of commissions and omissions of its BC.
10. Intrabank (On-us) and Interbank (Off-us) Transactions:
An intrabank (On-us) transaction is one where an Aadhaar initiated transaction has effects
only in accounts within one and the same Bank and does not necessitate an interbank
settlement.
An interbank (Off-us) transaction is one where there is movement of funds from one Bank
to another necessitating an interbank settlement.
11. Issuer Bank:

Issuer Bank within the scope of AEPS is one that has an Aadhaar enabled account of a
transaction initiating customer, held with it.
12. Acquirer Bank:

Acquirer bank within the scope of AEPS is one that acquires an Aadhaar enabled interbank
financial transaction initiated by a person, whose Aadhaar enabled Account is not held with
it, i.e. the transaction initiating person’s Aadhaar enabled bank account is held with some
other bank.
13. Transaction Receipt:

For all transactions whether intrabank or interbank, a Transaction Receipt will be printed
and handed over to a customer as a transaction record with its finality status, by the BC
through whom the transaction was initiated. The details provided in a transaction Receipt
shall be as per the AEPS Interface Specifications referred to in Para 2 b) above.
14. Aadhaar Authentication:

In any Aadhaar enabled financial transaction, whether, intrabank or interbank, a customer
is required to provide his Aadhaar and biometrics on the MicroATM managed by a BC to
prove his identity and get himself authenticated by the UIDAI. A transaction will be put
through only when the Aadhaar authentication is successful. MicroATMs that submit
Aadhaar and the related biometrics to UIDAI should adhere to the ‘Aadhaar Authentication

API and Devices Security Specification and Biometric Fingerprint Scanner Specifications’ of
the Unique Identification Authority of India for Aadhaar authentication referred to in Para
2 c) above.
A positive Aadhaar authentication is an indispensable part of any Aadhaar enabled financial
transaction. An Aadhaar authentication may be declined due to various reasons. Please
refer to ‘Aadhaar Authentication API and Devices Security Specification and Biometric
Fingerprint Scanner Specifications’ of the Unique Identification Authority of India for
Aadhaar authentication referred to in Para 2 c) of this document.
NPCI facilitates Aadhaar authentication service too. Banks, therefore, have an option to
route their intrabank transactions to NPCI switch for Aadhaar Gateway Authentication or
have an arrangement with UIDAI for direct Access. (Please see Annexure-IV).
15. Aadhaar enabled interbank (Off-us) Transactions:
While member banks would be offering a wide range of banking services through their
Business Correspondents, an Aadhaar initiated interbank transaction would be routed
through the NPCI switch only.
The four Aadhaar enabled basic types of banking transactions are as follows:-
a) Cash Withdrawal
b) Cash Deposit
c) Aadhaar to Aadhaar Funds Transfer
d) Balance Enquiry
a) Cash Withdrawal through a Business correspondent:
A Bank customer would make a Cash withdrawal through the MicroATM of a BC. The cash
withdrawal transaction first flows to the Correspondent Bank of the BC. If the transaction is
intra-bank, on successful Aadhaar Authentication, the bank will debit the customer’s
account and send its positive response to the MicroATM. If it is interbank, the transaction
will be forwarded to the Issuer Bank through NPCI’s switch. On successful Aadhaar
Authentication, the Issuer Bank will debit the Aadhaar enabled account of the customer and
send its positive response to the MicroATM of the BC through the NPCI switch. Whether
intrabank or interbank, only after receipt of a positive response, cash will be dispensed.
If the response from the Issuer bank is not received within a set time limit, the issuer bank
will receive reversal notification from anyone of NPCI switch or the Acquirer Bank or the
MicroATM depending upon who got the response timed-out. No money will be dispensed to
the initiating customer by BC; it is however, advisable that the BC initiates a balance
enquiry before sending a reversal notification to the issuer if a time-out response is
received by it.
A cash withdrawal is possible from the initiating customer’s own Aadhaar enabled account
only. Annexure-VII shows the transaction flow in respect interbank cash withdrawal
transactions.
b) Cash Deposit through a Business Correspondent:

A Bank Customer would make a Cash Deposit through a BC who uses a MicroATM terminal.
A cash deposit transaction initiated by a BC first flows to the Correspondent Bank of the BC.
If the transaction is intra-bank, on successful Aadhaar Authentication, the bank will credit
the customer’s account and send a positive response to the MicroATM. If it is inter-bank,
the transaction will be forwarded to NPCI’s switch for onward submission to the Issuer
Bank. On successful Aadhaar Authentication, the Issuer bank will credit the customer’s

Aadhaar enabled account and send its response to the MicroATM that initiated the
transaction, through NPCI switch, for having credited the account.
If the response from the Issuer bank is not received within a set time limit, the issuer bank
will receive a reversal notification from anyone of NPCI switch or the Acquirer Bank or the
MicroATM depending upon who got the response timed-out. The BC would, in this case,
return the cash to the remitting customer. However, it is advisable that the BC sends a
Balance enquiry to ensure that the credit for the cash deposit has not been effected in the
destination account before returning the cash.
A cash deposit is possible for credit to the initiating customer’s own Aadhaar enabled
account only. Annexure-VI shows the transaction flow in respect of an interbank cash
deposit transaction.
c) Aadhaar to Aadhaar Interbank Funds Transfer:

In the initial phase of AEPS implementation, an Aadhaar to Aadhaar funds transfer cannot
be an acquired transaction. The Remitting customer should necessarily have his/her
Aadhaar enabled Account with the Remitting Bank and the transfer will be effected only
after a successful debit to this account. A Remitting Customer is required to initiate an
Aadhaar enabled inter Bank remittance only from the MicroATM of a Bank with whom he/
she is holding an Aadhaar enabled Account.
When a Funds Transfer transaction is initiated from a MicroATM of a BC, the Remitting
Bank firstly, gets the transaction Aadhaar authenticated. Upon successful Aadhaar
Authentication, the bank debits the Aadhaar enabled account of the initiating customer
with the remittance amount and sends a Payment Request to the Beneficiary’s Bank based
on the IIN provided, through the NPCI Switch. Beneficiary’s Bank would credit the
Beneficiary’s Aadhaar enabled account and forward its positive response to the MicroATM
that initiated the request, through NPCI switch. The customer will know the finality of the
remittance from the Transaction Receipt.
If the response from the beneficiary’s bank is not received within a set time limit, no
reversal notification from NPCI switch or the Acquirer Bank or the MicroATM will be sent to
the beneficiary’s Bank. For all interbank remittances that have got timed out, Banks are
advised to use the Dispute Management System referred to herein to resolve interbank
settlement issues.
In the initial phase, a Fund Transfer is possible only from one Aadhaar Enabled account to
another Aadhaar enabled Account. Annexure-VIII shows the transaction flow of an
Aadhaar to Aadhaar interbank Remittance.
In any typical Aadhaar to Aadhaar funds transfer, there would be six parties:
i. A Customer initiating a transaction through a BC.
ii. Remitting Bank’s switch
iii. NPCI - AEPS Switch
iv. UIDAI Authentication
v. Beneficiary Bank’s Switch
vi. A Beneficiary accessing his account through a BC.
In the second phase Aadhaar to non-Aadhaar interbank funds transfer would also be made
possible from a BC of an acquirer bank.

d) Aadhaar Initiated Balance Enquiry:

Balance Enquiry is a non-financial transaction. A balance enquiry may be on-us or off-us. If
it is On-Us, the bank upon a successful Aadhaar Authentication, advises the balance in the
customer’s account to the MicroATM that originated the Inquiry. If it is off-us, a balance
request will be forwarded to the issuer Bank through NPCI. Upon successful Aadhaar
Authentication, the Balance advice received from the Issuer bank will be forwarded to
MicroATM that originated the Inquiry, through NPCI switch. Annexure-V shows the
transaction flow of an interbank Balance Inquiry.
e) Transaction decline:
Aadhaar initiated financial transactions may fail to be effected due to various reasons
like loss of network connectivity, incorrect Account holder details etc. In such a scenario,
the transaction initiating MicroATM normally receives from its Correspondent Bank or
NPCI switch or the destination bank, a negative response with an appropriate decline code.
Details of various possible decline scenarios and the corresponding decline codes are given
in the AEPS Host interface specifications. This document is available to a bank upon
admission as an AEPS member.
A transaction declined by a destination bank with an appropriate decline code is deemed as

a successful transaction from the NPCI switch perspective. A time-out is a treated as a
decline for technical reasons. For detailed error response codes descriptions please refer to
the Interface specification for Interoperable AADHAAR enabled Financial Inclusion
Architecture of the National Payments Corporation of India.
For all acts of commissions and omissions of a Business Correspondent, only its
Correspondent Bank would be held liable.
16. Interbank Settlements and Net Debit Cap (NDC):

All Aadhaar enabled interbank remittances, acquired Cash Deposits or Withdrawals result
in interbank settlements. The interbank settlement for AEPS takes place once a day on a
netted basis. These transactions are simply referred to as interbank transactions for the
purpose of convenience herein below:
a) An interbank cash deposit or remittance is delivered to NPCI for routing to the Issuer
or beneficiary bank only after Deposit of Cash by the remitting Customer or a
successful debit having been made to his/her Aadhaar enabled account. Therefore,
there is no risk of a credit being made with the remitting customer not having
adequate fund. Once the remittance request reaches the beneficiary bank, it should be
treated as a “good fund” and the beneficiary bank should credit the beneficiary’s
account immediately with all effects cleared. Thus, it would be a real time money
transfer from the customer’s point of view.
b) NPCI would compute a member bank’s net position (payable or receivable) on

successful execution of all its interbank transactions on a real time basis.
c) The net position of a member bank so computed should always be within the “Net
Debit Cap (NDC)” prescribed for that bank. Processing of outgoing transactions of a

bank, when its net exposure exceeds its NDC during a day, would be stopped until
additional collaterals by cash or Government Securities is deposited in NPCI’s account
(with the Reserve bank of India.)
d) Members can increase their collateral any time during the RTGS window by remitting
the extra collateral through RTGS to NPCI’s current account with RBI, Mumbai. The
Net Debit Cap would be updated within half an hour of receipt of the confirmation of
credit. Once NPCI gets PDO-NDS membership, members would have the choice of
posting additional collateral in Government of India securities in favor of NPCI’s SGL
Account maintained with RBI, Mumbai.
e) NDC fixed for Aadhaar enabled interbank transactions is exclusively for AEPS and no
portion of it can be shared with NPCI’s other services like NFS, Interbank Mobile
Payment Service etc. and vice versa. The collaterals however, will be pooled in a single
account of NPCI with respective NDC for each member bank apportioned in the NPCI
switch against each service.
f) NDC would be twice the amount of collateral (in cash or Government of India
securities) posted with NPCI for Aadhaar enabled remittance service. NPCI is in the
process of opening SGL account with RBI. Till that time, all collateral should be in cash.
g) Minimum collateral would be Rs.5,00,000/-(Rupees five lakhs). The collaterals

deposited with NPCI will be in form of non-interest bearing deposits.
h) The purpose of collateral would be only for guaranteeing the settlement.
i) At the close of a AEPS business cycle on any day i.e., at 23.00 Hrs., the net receivable or
payable in respect of each member bank, will be generated and a Daily settlement
report for all Aadhaar enabled interbank transactions will be made available for
download from the AEPS DMS solution to all member Banks. The Net Settlement
Amount will be inclusive of the Interchange, Transaction switching and settlement fees
etc., payable by Member Banks.
j) NPCI’s Type-D membership is activated and will arrange for the necessary inter-bank
settlement of credits and debits to the banks’ respective current accounts with RBI. .
k) The settlement time would usually be the first hour (10.00-11.00 hr.) of the next
working day at RBI Mumbai, through RTGS. Please refer to paragraph 3.1.5, 3.1.6, 3.1.7
of the RBI notification referred to in Annexure-XII.
l) It will be members’ responsibility to verify the accuracy of the Daily Settlement

Reports with reference to the data available at their end.
m) In case of net debit, a member bank has an obligation towards other member banks.
Banks are therefore advised to ensure strict compliance to the RTGS operational
instructions of RBI in this connection. Any failure to maintain the required balance in
the RTGS settlement account shall attract penal action from RBI.

n) All banks before participating in AEPS shall issue a Letter of Authority to RBI
authorizing them for AEPS related settlements in their respective accounts by NPCI or
its settlement agency, duly approved by their respective boards. (Annexure-IX).
o) If a member bank fails to meet the clearing liability at the time of settlement, RBI
would make use of the fund balance in NPCI’s Settlement Guarantee Fund account and
complete the settlement. Thereafter, NPCI would initiate the process of recovering the
fund from the defaulting bank with penal interest as per the terms of SGF agreed to by
member banks.
In this connection, Member Banks are required to be guided by paragraph 3.3 of the
notification from the Department of Payments and Settlements of the Reserve Bank of
India, Ref No: RBI/2010-11/218 DPSS.CO.CHD. No.695/03.01.03/2010-2011 dated
29th September, 2010 - (Annexure-XII).
p) A bank failing to meet the clearing liability more than two times in a month or three
times in a quarter would be debarred from AEPS membership.
17. Fees charged by NPCI for AEPS:

Transaction Fee:
a) The Fees charged per transaction shall be as under:
i) Aadhaar Authentication through NPCI
ii) Acquired Balance Inquiry
iii) Acquired Cash withdrawal
iv) Acquired Cash Deposit
v) Aadhaar interbank Remittance
b) The charges mentioned below are exclusive of UIDAI authentication fee, if any.
c) In the case of Intrabank (On-US) transactions for Aadhaar gateway authentication

routed through NPCI, the fees will be Rs 0.10 per authentication request routed
through NPCI to UIDAI. This fee does not take into account any authentication fees
levied by UIDAI separately.
d) The interchange per offus transactions, as per the Meeting conducted by IBA on 17th
March 2012 would be the following:-
i) Financial transactions through AEPS

 1% of fund flow ( value of transaction) per transaction, subject to
 Minimum interchange of Rs. 5 per transaction
 Maximum interchange of Rs. 15 per transaction
ii) Non- Financial transactions through AEPS

 Rs. 3 per transaction

Please refer to the detailed table below for transaction type and relevant interchange fees
Switching
Authentication
fee to be
Interchange Fee fees to be
Transaction type Interchange fee credited to
Movement credited to
NPCI by
NPCI by Issuer
Issuer
ONUS Rs 0.10 per
Not
Authentication Not Applicable Not Applicable authentication
Applicable
request only request
OFFUS Balance Rs 3/- per successful

Issuer->Acquirer Not Applicable
Enquiry transaction Rs 0.25
1% of fund flow, subject

OFFUS Cash to minimum Rs 5/- with a
Issuer->Acquirer Rs 0.25 Not Applicable
Withdrawal maximum cap of Rs 15/-
per successful transaction

OFFUS Cash to minimum Rs 5/- with a
Issuer->Acquirer Rs 0.25 Not Applicable
Deposit maximum cap of Rs 15/-

Remitter-> to minimum Rs 5/- with a
Fund transfer Rs 0.25 Not Applicable
Beneficiary maximum cap of Rs 15/-
e) The Switching fees for interbank (Off-US) will be borne by the issuer. The minimum
suggested rate is Rs. 0.25 per transaction. There shall be no separate fee charged for
authentication.
f) The fees indicated herein are subject to revision by NPCI in consultation with the AEPS
Steering Committee.
18. Settlement Fee:

The fee, as applicable, shall be exclusive of all prevalent taxes as made applicable from
time to time. This fee is payable to NPCI, whenever applicable,
19. AEPS Availability:

AEPS shall be in operation/ available to all member banks on 24 x 7 basis with 99.5%
uptime except in the event of force majeure such as war and natural calamities and a
regular periodic maintenance with prior notice. However, the regular periodic
maintenance of the NPCI systems shall be notified to all member banks 36 hours in
advance.

20. Choice of Connectivity:

Member Banks have to connect to AEPS directly from their own Switch or through their
respective Financial Inclusion Service Provider’s Switch located at the bank’s premises.
Member banks shall establish connectivity with NPCI switch only on NPCINET.
21. Message Formats:

All Aadhaar transactions routed through the NPCI switch should comply with the message
formats specified by NPCI as a part of AEPS Interface specification referred to in
paragraph 2.b. hereof, with modifications if any communicated to member banks from
time to time.
22. Transaction Logging:

NPCI shall maintain logs of all Aadhaar transactions passing through the NPCI switch.
Member Banks are also advised to store transactions logs as per their own policies in
force.
23. Member Notification:

NPCI shall notify all the member banks regarding:
a) Inclusion of a new member participating in AEPS

b) Cessation of membership of any bank.
c) Suspension/Termination of any member bank.
d) Amendments in the AEPS Procedural Guidelines.
e) New enhancement of the software and hardware released pertaining to the AEPS.
f) Changes in the periodic maintenance hours.
g) Any other issues deemed important by NPCI for the member banks.
24. Steering Committee for AEPS:

An AEPS Steering Committee would be dedicated for discussion on the operational issues
relating to Aadhaar enabled banking services and would consist of:
a) Select Member banks

b) NPCI
The steering committee meetings may optionally have invitees from UIDAI and other
organizations involved in promoting Aadhaar enabled banking services and industry
experts as required, to get better insight and improve AEPS. The committee shall meet at
least once in a quarter in addition to two user group meetings in a year which would be
attended by all the members. The list of members and the calendar of meetings in a year
would be published in the website of NPCI in the beginning of the year.

25. Reports and Reconciliation:

Following reports will be made available to the member banks:
a) Aadhaar Authentications through NPCI.

b) Intrabank & Interbank balance Inquiry (Acquirer and Issuer)
c) Intrabank & Interbank Cash deposits (Acquirer and Issuer)
d) Intrabank & Interbank Cash withdrawals (Acquirer and Issuer)
e) Intrabank & Interbank Remittances (Remitter/ beneficiary)
f) Intrabank & Interbank Net Settlement (Payables and receivables)
Member banks shall ensure that they download these reports and keep their settlement
accounts reconciled on a daily basis.
Besides these reports, Raw Transaction Data files, Settlement Files, Verification Files and
Daily settlement Reports of all the Originating and responding transactions of a bank will
also be available to the banks for download. In case of any discrepancy in the raw
transaction data file, the reports cited above will be deemed as authentic.
26. Operating Procedure:

a) Member banks participating in the AEPS shall maintain connectivity of their network
for the AEPS services on 24x7 basis with an uptime of 99.5% of their respective
SWITCHES.
b) Banks shall ensure their own Switch generates accurate input data with reference to
the NPCI - AEPS Interface Specification for all AEPS transactions.
c) Ensure Security of Transactions between the MicroATM, Bank’s Switch and NPCI
switch.
d) All member banks shall monitor and ensure adequacy of their collateral with NPCI as
detailed in paragraph 16 on Inter-bank settlement and Net Debit Cap.
e) All Member banks shall ensure that they download their respective transactions and
settlement reports from the AEPS DMS solution and shall keep their books of accounts
reconciled on a daily basis.
f) Each member bank shall conduct annual internal audits of itself and their Business
Correspondents in order to comply with the AEPS Procedural guidelines.
g) If any member fails to fulfill its commitment towards other members participating in
AEPS, thereby, incurring any loss in the form of settlement or transaction fees, it would
be completely borne by the defaulting member. In such a case, funds available in the
defaulting member’s Settlement Account will be used to settle the claims at the
earliest.

h) A member may resign from the AEPS at any time on giving a notice of ninety (90) days
in writing to NPCI of such member's intention to do so. On receipt of such notice, NPCI
shall inform the other members, of its resignation. On the expiration of such a notice,
the member resigning shall cease to be a member of AEPS. NPCI will also disconnect its
Network service to such a member.
i) A member bank shall cease to be a member in any of the following events:

i) If it’s banking license has been cancelled by RBI.
ii) If it stops or suspends payment of its debts generally or ceases to carry on
business, or goes into liquidation.
iii) If it is granted moratorium or prohibited from accepting fresh deposits.
27. Risk Management at Originating and Responding Banks:

a) Transaction Originating Bank shall be responsible for the following (as
applicable to an issuer or an acquirer or both):
i) Limits on the Transaction amount if any

ii) Balance authorisation before effecting a Payment Request
iii) Aadhaar Number and account Validations/Verifications.
iv) Validation of Number of Transactions in a day, if any
v) Multiple Requests from same MicroATM within X time period with same
reference/transaction number (This is to avoid responding to multiple requests
for one and the same transaction)
vi) Maximum customer level limits, if any
vii) Adequacy of Collateral posted with NPCI towards NDC compliance.
viii) Adequacy of contribution to Settlement Guarantee Funds
ix) AML related validations for Funds Transfer transaction for the debit leg (online or
offline)
x) Fraud Check (online or offline) & reporting
xi) All acts of commissions and omissions of the Bank’s BC.

b) Transaction Responding Bank shall be responsible for the following (As

applicable to an issuer or an acquirer or both):
i) Limits on the Transaction amount if any.
ii) Incoming message validation
iii) Issuer Aadhaar Authentication and posting of transaction to an Aadhaar enabled
Account in respect of Cash Deposit, Cash Withdrawal and Remittance.
iv) Posting of transaction to the beneficiary’s account in respect of interbank funds
transfer between two Aadhaar enabled accounts.
v) Declining of a remittance, if necessary, if a beneficiary is unable to respond to
Bank’s remittance enquiry if any.
vi) Declining of a remittance, in case the beneficiary account is on lien or blocked or
credit is banned by any regulatory Authority.
vii) Checks on Multiple Requests for one and same Aadhaar Remittance within X time
period with same ref/transaction number (This is to avoid responding to multiple
requests for a single Payment Request)
viii) Maximum permissible limit in a day, if any.
ix) AML related validations for Funds Transfer transaction for credit leg (online or
offline).
x) Fraud Check (online or offline) & reporting.
28. AEPS Dispute Management System and Exceptions handling:

Exception Transactions are those that are reported as unreconciled for a long time in the
settlement accounts of the member banks or erroneous by customers. NPCI has provided
Dispute Management systems on similar lines as DMS for NFS to help member banks raise
charge back/ re-presentments or make credit/debit adjustments to resolve all disputes
arising out of Aadhaar enabled banking transactions. (Annexure-XV)
Member banks shall collaboratively endeavor to settle discrepancies in Settlement, if

raised by other member banks. Where necessary, NPCI shall provide transaction logs as
logged by the SWITCH, if any, relating to the transaction reported as exception to facilitate
settlement of the same.
Exception handling for onus transactions in case of authentication failure by UIDAI for
absence of last mile connectivity or extremely worn out biometrics of customers even
after repeated attempts etc. banks need to put in place appropriate internal exception
handling mechanisms in view of customer service

29. Customer Complaints:

Aadhaar transactions are similar to ATM transactions. Therefore, any complaint about
debit without cash being dispensed or cash deposited/ debit made without corresponding
credit to the beneficiary account should be conclusively and bilaterally dealt with by the
remitting and beneficiary banks within 12 days from the date of receipt of a complaint as
per the guidelines on ATM transactions.
30. Audit by NPCI:

NPCI reserves the right to audit the AEPS related systems (including Hardware and
software) of the member banks or their Business Correspondents if found necessary.
31. NPCI service Provider Liability:

The owner and co-coordinator of AEPS is NPCI. NPCI reserves the right either to operate
& maintain the AEPS and the Network on its own or obtain necessary services from third
party service providers.
32. Non-Disclosure Agreement:

All members participating in the AEPS Network should sign a non-disclosure agreement
with NPCI as given in Annexure-X. Each member should treat AEPS related documents
strictly as confidential and should not disclose to alien parties without prior written
permission from NPCI, failing to comply with, shall invite severe penalties. However, the
participating members can disclose the AEPS Procedural Guidelines within its employees
or agents related to the specific areas.
33. Interpretational Disputes and Arbitration:

It will be NPCI’s endeavor to resolve amicably any disputes or differences that may arise
from misconstruing the meaning and the operation of this document. NPCI has set up a
Panel for Resolution of Disputes (PRD) consisting of four member banks and the Chief
Operating Officer of NPCI as the President to look into interbank disputes as per the
directives of the Department of Payments and Settlement Systems of the Reserve bank of
India, notification Ref: DPSS.CO.CHD.No:654/03.01.03/2010-2011 dated 24th September,
2010. Please see Annexure-XIII, attached hitherto.
The AEPS Network shall continue to work under the contract during the PRD proceedings
unless the matter is such that the work cannot possibly be continued until the decision of
the PRD or the Appellate Authority at RBI, as the case may be is obtained.
34. Indemnification:
It is binding on all members, including NPCI, participating in AEPS to defend and
indemnify themselves from all loss and liabilities if any, arising out of the following:

a) Member’s failure to perform its duties and responsibilities as per the Procedural
guidelines for AEPS.
b) Malfunctioning of Member’s equipment.
c) Fraud or negligence on the part of member.
d) Unauthorized access to AEPS Network.
e) Member’s software, hardware or any other equipment violating copyright, patent laws
and UIDAI authentication policy etc.
All members should comply with the AEPS Procedural Guidelines as framed by NPCI. NPCI
reserves the right to impose penalty on the members either by suspending or terminating
(Host-to-Host) connectivity for frequent violations of the AEPS Procedural Guidelines.
35. Termination of services:

Criteria for Termination/ Suspension of AEPS Membership:
AEPS under the following circumstances may terminate/suspend the AEPS membership:
a) The member has failed to comply with or violated any of the provisions of the AEPS
Procedural guidelines, as amended from time-to-time.
b) Member commits a material breach of AEPS Operating Procedures, which remains un-
remedied for thirty (30) days after giving notice.
c) The current account with RBI of the member bank is closed or frozen.
d) The member bank is amalgamated or merged with another member bank.
e) Steps have been initiated for winding up the business of the member bank.
f) Suspension or cancellation of RTGS membership.
36. Process of AEPS Membership’s Termination/Suspension:

a) NPCI shall inform in writing to the member bank regarding termination/suspension of
its membership to AEPS.
b) If NPCI is of the opinion that the breach is not curable, it may suspend/terminate the
AEPS membership with immediate effect. However, the member bank shall be given an
opportunity to be heard within thirty (30) days and confirming or revoking the
termination/suspension passed on earlier.
c) NPCI may at any time, if it is satisfied, either on its own motion or on the representation
of the member that the order of suspension/termination of its membership may be
revoked, it may pass on accordingly.
d) If the breach is capable of remedy but cannot be reasonably cured within thirty (30)
days period, termination/suspension will not be effective if the member in default

commences cure of the breach within thirty (30) days and thereafter diligently peruses
such cure to the completion within sixty (60) days of such notice of breach.
e) The member bank whose termination of membership has been revoked shall be entitled
to apply for membership afresh in accordance with AEPS Procedural guidelines.
37. Prohibition to Use NPCI Logo/ Trademark /Network:

Upon termination from AEPS, the bank shall abstain from further using the AEPS
Trademark with immediate effect and failure to comply with the same, shall invite legal
proceedings.
Banks that have been terminated from AEPS membership shall be deprived of the
privilege to use NPCI Switch for any transactions.
Any pending dispute pertaining to transaction errors not resolved before the member
bank is terminated will be retrieved from the respective bank’s settlement account.
The terminated member bank shall not disclose any information regarding the AEPS
Network or any knowledge gained through participation in the AEPS Network to the
external world. Failure to comply with the same shall be treated as breach of trust and
will invite legal penalties. This rule shall be binding on the terminated member bank for
One (1) year from the date of the termination.
38. Fines:
NPCI reserves the right to impose a fine of an amount of equal to the One-Time
Membership Fee on member banks participating in the AEPS Network upon violating the
Common Operating Procedures for AEPS.
39. Frequent Deviation from AEPS Operating Procedures:

In the event of non-compliance with the Operating Procedures-AEPS, NPCI reserves the
right either to notify the member bank or shall directly impose penalty on the member
bank depending on its past record. No fines shall be imposed, if the rectification is done
within the stipulated time frame, as set by NPCI, failing to abide by shall be subject to
steering committee recommendations/legal penalties.
40. Pending Dues:

It is obligatory on the part of all member banks to clear all pending dues i.e. fines, etc.
within the stipulated time frame as set by NPCI, failure to comply with, shall result in
suspension/termination from further participation.

41. Invoicing:
Fines will be billed separately and shall be sent to the respective member banks. The fines
shall be payable to NPCI in accordance with the terms and conditions as defined in the
invoice.
42. Compliance to Regulatory Guidelines by Reserve Bank of India:

All member banks shall strictly comply with the RBI’s notifications on financial inclusion
business correspondent guidelines from time to time.
The Regulatory Guidelines of Reserve Bank of India shall have over-riding effect over the
provisions made in these Guidelines.
43. Amendment to the Procedural Guidelines:

NPCI may issue amendments to these Guidelines from time to time by way of circular. The
revised versions of the Guidelines may also be issued incorporating the new provisions
periodically.
44. KYC/ AML Compliance as per RBI guidelines:

It would be the responsibility of the remitting and beneficiary banks to check any unusual
pattern of remittance if any in respect of their respective customers. We have given in
Annexure XI, a declaration to be signed and submitted to NPCI in this connection, by the
member banks.
45. Inclusion of Regional Rural Banks (RRBS) in AEPS

NABARD has been very keen to include Regional Rural Banks in Aadhaar Enabled
Payment System (AEPS) to strengthen the financial inclusion network in rural areas.
Hence, Regional Rural Banks (RRBs) are proposed to join AEPS as per the “Sponsor Bank
Model” subject to RBI approval
The RRBs have adopted the Application Service Provider (ASP) model to implement Core
Banking Solutions (CBS). This has been supported both technically and financially by the
Sponsor Banks who typically have a 35 % share in the RRBs. Taking in to view the limited
IT and financial resources of the RRBs, NPCI has devised a sponsor bank model for
implementation of AEPS and RuPay AADHAAR MicroATM & ATM cards for RRB
customers.

The main features of this model are:

 The Sponsor Bank must be a member of the AEPS service i.e. sponsor bank should
be a direct AEPS member bank. The sponsor bank may have its own AEPS /FI
switch.
 In AEPS, a transaction can be initiated from a MicroATM either manually or through

a card. We recommend issuance of RuPay AADHAAR card to customers as it will
facilitate customer in performing a transaction. Customer is not required to
remember its AADHAAR number & even IIN.
 A unique IIN will be issued to RRB by NPCI.
 Sponsor Bank will provide an IIN (BIN) update form to NPCI to update the said IIN
under their IIN list.
 NPCI would ask all the AEPS Member Banks to populate the IIN across AEPS
network.
 IIN would be linked by Sponsor Bank to CBS of RRBs.
 NPCI will settle all RRB transactions (excluding On-Us which come through sponsor
bank to NPCI for UIDAI authentication gateway) with the Sponsor Bank as a part of
the existing AEPS Settlement for the direct AEPS members.
 The existing reports of Daily Net Settlement Report and Raw Data Files sent to the
AEPS Members should be used for daily reconciliation.
 The access to the DMS would be given to a designated personnel nominated by the
sponsor bank. However, sponsor bank would be responsible for all dispute handling
on DMS on behalf of RRB whom they are facilitating.
 The transactions conducted at sponsor bank MicroATMs by the customers of RRBs

will be treated as on-us transactions.
 The transactions conducted between RRBs of the same sponsor bank will also be
treated as on-us transactions.
 All AEPS settlements for RRB transactions would be settled by Sponsor Bank ONLY.
 The Sponsor Bank has to ensure that all guidelines of RBI / any regulatory authority
would be adhered to by the RRBs before connecting the RRB MicroATMs to the
sponsor bank.
 Any RRB that chooses to use its own infrastructure such as MicroATMs or kiosk
would be issued a separate acquirer ID.
 If a RRB avails services of sponsor bank infrastructure then the acquirer ID of

sponsor bank would be populated in the transaction request from bank.

I. SET OF TRANSACTIONS
Currently, NPCI facilitate 4 types of transaction in AEPS. They are:
 Balance Enquiry
 Cash Withdrawal
 Cash Deposit
 Aadhaar to Aadhaar Fund Transfer
We have envisaged 6 possible ways of performing a transaction as below:
i. TYPE 1- RRB CUSTOMER ON SAME RRB MICROATM

 In this type of transaction the RRB customer will visit its RRB MicroATM.
 RRB MicroATM will send the encrypted packet to RRB switch/ASP
switch/Sponsor bank switch
 The switch will forward the request to NPCI for getting the customer
authenticated from UIDAI. This will be used if the sponsor bank is not directly
connected to UIDAI.
 Upon getting the response from UIDAI, NPCI will send the transaction back to
sponsor bank
 Sponsor bank will send the transaction to RRB/ASP switch which will send it to
CBS for necessary action as per the transaction type.
 The response of the transaction will be send to MicroATM and receipt will be
generated.
 This will be an ON-US transaction for NPCI & will be charged for authentication
service only.
ii. TYPE 2 – RRB CUSTOMER ON SPONSOR BANK MICROATM

 In this type of transaction the RRB customer will visit its sponsor bank
MicroATM.
 Sponsor bank MicroATM will send the encrypted packet to Sponsor bank switch
connected to UIDAI.
sponsor bank
 CBS response will be sent to sponsor bank switch which will route the response
to MicroATM & a receipt will be generated.
service only.

Transaction flow will be as below:
iii. TYPE 3 - CUSTOMER OF RRB1 ON RRB2 MICROATM (SPONSOR BANK IS SAME)

 In this type of transaction the RRB customer will visit some other RRB MicroATM
wherein both these RRBs have same sponsor bank.
 RRB2 MicroATM will send the encrypted packet to Sponsor bank switch
connected to UIDAI.
sponsor bank
 Sponsor bank will send the transaction to RRB1/ASP switch which will send it to
to MicroATM & a receipt will be generated.
service only.

iv. TYPE 4 - CUSTOMER OF RRB ON OTHER AEPS BANK MICROATM

 In this type of transaction the RRB customer will visit some other AEPS member
bank MicroATM.
 Other bank MicroATM will send the encrypted packet to its FI switch.
connected to UIDAI.
 Upon getting the response from UIDAI, NPCI will send the transaction to sponsor
bank of the RRB.
to NPCI.
 NPCI will then forward the response to AEPS member bank switch which will
internally route the response to its MicroATM and a receipt will be generated.
 This will be an OFF-US transaction for NPCI and applicable switching fees and
authentication fees of AEPS will be charged.
v. TYPE 5 – TRANSACTION BETWEEN TWO RRBs OF DIFFERENT SPONSOR BANK

 In this type of transaction the RRB customer will visit MicroATM of some other
AEPS member bank RRB.
 Other RRBs MicroATM will send the encrypted packet to its FI switch.
 RRB/ASP switch will send the packet to its sponsor bank.
 The sponsor bank switch will forward the request to NPCI for getting the
customer authenticated from UIDAI. This will be used if the sponsor bank is not
directly connected to UIDAI.
 Upon getting the response from UIDAI, NPCI will send the transaction to sponsor
bank of the customer’s bank.

to NPCI.
 NPCI will then forward the response to AEPS member bank switch which will
internally route the response to its RRB switch.
 Acquirer RRB will send the response to its MicroATM and a receipt will be
generated.
 This will be an OFF-US transaction for NPCI and applicable switching fees and
authentication fees of AEPS will be charged.

II. Dispute Management

i. If there is any complaint regarding any AEPS transaction, then customer will lodge a
complaint with the respective RRB.
ii. RRB in turn will forward the complaint to Sponsor Bank. The Sponsor Bank already
has a Dispute Management mechanism in place by virtue of being a part of the
AEPS.
iii. The access to the DMS would be given to a designated personnel nominated by the
sponsor bank. However, sponsor bank would be responsible for all dispute handling
on DMS.
iv. Complaint will be solved as per normal procedure & solution will be provided to
sponsor bank which in turn will provide the same to the RRB within defined TAT.
(All present RBI Guidelines would be applicable)
III. Guidelines on Roles and Responsibilities of Entities involved

i. Regional Rural Bank
 Maintain customer accounts with proper KYC norms in CBS that supports online
real time transaction processing from sponsor bank switch using ISO8583
messaging protocol for card based and manual financial transactions.
 Ensure 24x7 uptime of the CBS servers to process transactions from sponsor bank
switch.
 Obtain unique RuPay IIN from NPCI. .
 Educate its customers about usage of RuPay AADHAAR ATM/debit cards within its
own network (if exists), sponsor bank network, AEPS & NFS network.

 Establish a reliable network link with fall back/auto-failover options between

their CBS servers and the Sponsor bank/ASP switch.
 Open a current account with sponsor bank for daily settlement of transactions
carried out by its customers on AEPS. A corresponding reconciliation account will
be maintained in the CBS of the Regional Rural Bank. The CBS system may have
alerting mechanism via email/SMS/online dashboard that can alert the bank
officials when the balance in this account falls below a threshold value.
 Maintain sufficient funds in the settlement account with sponsor bank as mutually
decided by sponsor bank and RRB.
 Provide a 24x7 helpline number to its customers to address any issues they may
face in using their card on their own or AEPS or NFS network. This helpline should
be able to register a complaint raised by the customers and provide feedback on
the complaints previously registered by them.
ii. Sponsor Bank

 The Sponsor Bank is responsible for sharing its switch with its RRBs and
establishing a link with AEPS for routing all RRB transactions. This linkage should
be as per specifications and requirements intimated from time to time by AEPS
and must be configurable.
 Carry out settlement of AEPS transactions on behalf of its member RRBs.
 Provide the operational and technical support to the RRB for reconciliation and
dispute resolution. If the RRB needs to raise a dispute on behalf of its customer for
a transaction carried out on AEPS, the same should be raised through the sponsor
bank.
 Host and provide a standard AEPS switch to Regional Rural Banks
 Ensure that all off-us transactions are routed via AEPS.
 Provide daily settlement and reconciliation reports to each RRB and provide
complete transaction record for dispute resolution.
 Maintain a network link with fall back/auto-failover options to RRB CBS.
 Provide reconciliation reports to sponsor bank and each RRB for transactions
routed to and from AEPS.
 To ensure strict compliance of AEPS guidelines and RBI guidelines by the RRBs
sponsored by them.
 Important points to be considered:

i. All Risk Management would be done by the Sponsor Bank Switch as per the
requirement of the AEPS Member Banks
ii. All settlement would be done at Sponsor Bank Settlement Account (Existing)
and no separate report would be provided by AEPS to the Sponsor banks.
iii. The settlements are done on a T + 1 Basis.
iv. All regulations of RBI/AEPS related to the Switching Issued by AEPS from
time to time would be binding on Sponsor Bank ASP Switch.
v. NPCI would certify the sponsor bank Switch as and when required by them.
vi. Sponsor bank’s switch to comply with AEPS Interface specification and other
requirements to get certified for AEPS Switch.
vii. The Sponsor Bank Switch, RRB will at all times comply with the AEPS
operating procedures.

Annexure-I
Definitions & Abbreviations
i) Aadhaar: A Unique Identification number issued by the Unique Identification Authority of India
to a resident in India.
ii) AML: Anti Money Laundering
iii) ATM: Automated Teller Machine
iv) BC: Business Correspondent.
v) Correspondent Bank: The Bank whom a BC represents and corresponds with.
vi) Customer: Customer shall refer to an Aadhaar enabled account holder of a bank.
vii) DMS: Dispute Management System - an on-line application for resolving disputes arising out of
interbank AEPS transaction.
viii) FI: Financial Inclusion.
ix) IBA: Indian Banks Association.
x) IDRBT: Institute for Development and Research in Banking Technology.
xi) KYC: Know Your Customer.
xii) MicroATM: A Point of Sale (POS) device used by a Business Correspondent for handling
customer initiated cash and transfer transactions.
xiii) IIN: Issuer Identification Number issued by National Payments Corporation of India for the
specified service.
xiv) NFS: National Financial Switch of National Payments Corporation of India.
xv) NPCI: National Payments Corporation of India.
xvi) NREGA: National Rural Employment Guarantee Act
xvii) PDO-NDS: Negotiated Dealing System of Public Debt Office, RBI.
xviii) SGL Account: Subsidiary General Ledger Account.
xix) RBI: Reserve Bank of India.
xx) RTGS: Real Time Gross Settlement System of RBI.
xxi) AEPS: Aadhaar Enabled Payment System.
xxii) SGF: Settlement Guarantee Fund.
xxiii) SMS: Small Messaging Service.
xxiv) UIDAI: Unique Identification Authority of India.

Annexure-II
(On the Letter Head of the Applicant Bank)
Application for AEPS Membership
The Chief Executive Officer

National Payments Corporation of India
C-9, 8th Floor, RBI Premises,
Bandra Kurla Complex,
Bandra (E), Mumbai-400 051
Dear Sir,
Subject: Aadhaar Enabled Payment System (AEPS) Membership.
We would like to participate in the Aadhaar Enabled Payment System (AEPS) and agree to the
Terms & Conditions stipulated thereof.
Kindly take a note of details provided below:

Name of the Bank
Bank Switch/ Primary Single Service Provider’s
Connectivity Option
Switch
Location of the Switch
AEPS Contact Person Name (A Single
point of contact)
Telephone Number
Fax Number
Email Id
Brief Details (Hardware, Software &
Network)
Test Switch IP Address: Port
Production switch IP Address: Port
The above application is being made under the Authority of our Board and certified true copy of
the Board Resolution shall be submitted once we receive an In Principle approval from NPCI.
The documents required in this connection as under are submitted herewith:

i) Mandate to RBI - (Stamped in Duplicate) (Annexure-IX)
ii) Non-Disclosure Agreement - (Stamped) (Annexure-X)
iii) KYC/ AML Undertaking - (Annexure-XI)
iv) General Undertaking - (Annexure-XVI)
Authorised signatory

Annexure-II.I
Annexure to Membership Form
Applicant Bank Name: _______________________________________________________
NFS Member since: ___________________________
Sr. Please tick one or more

Description Remarks
No or enter the value
Current Details
1. Number of customers already enrolled for

Aadhaar
2. Projections for AEPS participating 2011 2012 2013

customers
2011 2012 2013
3. Projections for interbank AEPS
transactions.
Note: 2 and 3 are required for NPCI’s Capacity planning only
Posting Collateral with NPCI
4. Initial Collateral money the bank is willing

to place with NPCI? (minimum Rs. 5 Lakhs)
Mode of Remittance of Collateral
5. Mode of remittance of the Collateral money
will be RTGS or Pay Order?
Sharing of Switch.
6. Is the Switch connectivity to NPCI is

dedicated or shared with other banks?

Annexure-III
Connectivity Options
Annexure-IV
NPCI Offered Aadhaar Authentication - Process flow
Customer’s Inputs:
 IIN
 AADHAAR Number
 Finger Print Data

Annexure-V
Aadhaar Initiated Inter Bank Balance Enquiry - Process flow
 IIN
 AADHAAR Number
Annexure-VI
Aadhaar Initiated Interbank Cash Deposit - Process flow
 IIN
 AADHAAR Number
 Amount of Cash to be Deposited

Annexure-VII
Aadhaar initiated Interbank Cash Withdrawal – Process flow
 IIN
 AADHAAR Number
 Amount of Cash to be Withdrawn
Annexure-VIII
Aadhaar to Aadhaar Interbank Funds Transfer - Process flow
Remitting Customer’s Inputs: Beneficiary’s Details:

 IIN  IIN
 Aadhaar Number  Aadhaar Number
 Amount to be remitted

Annexure-IX
ON STAMP PAPER
Letter of Authority
To,
The Regional Director,

Reserve Bank of India
Mumbai
Dear Sir,
Our Current A/c No. _________________________ and Settlement A/c No____________________ with the
Reserve Bank of India (RBI) Mumbai.
1. National Payments Corporation of India (hereafter referred to as the NPCI) has admitted us
as member of a networking arrangement called the Aadhaar Enabled Payments System
(AEPS) whereby switching and processing of all our electronic payments transactions over
their network takes place under NPCI’s guarantee of clearing and settlement of our
transactions.
2. For that purpose, we hereby authorize and request that as and when a settlement
instruction is received by you from the NPCI relating to our transactions in the said AEPS
Network, you may, without reference to us, debit/credit our above Current Account/s with
such sums as may be specified by the NPCI in its settlement instructions, notwithstanding
any dispute that may exist or arise between us and NPCI.
3. The settlement instruction for debiting/crediting our Current Account/s with you shall be
conclusive proof of debit/credit of our Current Account/s relating to our transaction in the
said AEPS Network as referred to in paragraph 2 above and it shall not be necessary for us
to admit and/ or confirm to the fact of such debit/credit by means of separate advice to you
and/ or NPCI.
4. We hereby further unconditionally and irrevocably undertake to arrange for the requisite
funds in our Current Account with Deposit Account Department, Reserve Bank of India,
Mumbai to meet the demand of NPCI. We shall be bound by this undertaking and shall be
liable therefore under all circumstances.
5. The mandate and undertaking shall not be revoked by us except with the prior concurrence
of both the NPCI and the Reserve Bank of India (RBI) and you may act upon this mandate
till such time this authority is revoked in writing and all actions taken by RBI in pursuance
of this mandate shall be absolutely binding on us, without any risk or responsibility to the
RBI.
Thanking you,
Yours faithfully,
For and on behalf of the Applicant

Annexure-X
(On Rs. 100/- Stamp paper)
NON-DISCLOSURE AGREEMENT
This Non-Disclosure Agreement is made and entered into at Mumbai as of <Date in

words>_____________________________________________________ (DD-MM-YYYY),
_______________________________ the (“Effective Date”) By and Between having its registered office <
Bank Name>, ___________________________________________________________________________ carrying on the
business of Banking, having its registered office at <Bank Registered Office Address(herein
referred to as “Bank”)
And
National Payments Corporation of India (NPCI), a company incorporated under Section 25 of

the Companies Act, 1956 and having its registered office at C9, 8th Floor, RBI Building, Bandra-
Kurla Complex, Bandra (East), Mumbai – 400 051 (herein referred to as “NPCI”).
Each of Bank and NPCI is sometimes referred to herein as a “Party” and together as the
“Parties”, each of which expression shall, unless repugnant to the context or meaning thereof,
shall mean and includes its respective successors and permitted assigns.
RECITALS
WHEREAS, NPCI an umbrella organization, is inter alia engaged in catering the banking sector
requirements in the areas of Retail Payments and Settlements, and providing National Financial
Switch(NFS), Interbank Mobile Payment Service(IMPS) and Aadhaar Enabled Payment System
(AEPS); And
WHEREAS, Bank is inter alia engaged in the business of Banking; And
WHEREAS, NPCI has and is in the process of entering into agreements with various Banks
admitting the Banks in NFS, IMPS and AEPS; And
WHEREAS, the Parties presently desire to discuss and/or consult with each other's business for
the purposes of entering into Agreements for use of AEPS services. And

WHEREAS, the Parties recognize that each other’s business involves specialized and proprietary
knowledge, information, methods, processes, techniques and skills peculiar to their security and
growth and that any disclosure of such methods, processes, skills, financial data, or other
confidential and proprietary information would substantially injure a Party’s business, impair a
Party’s investments and goodwill, and jeopardize a Party’s relationship with a Party’s clients
and customers; And
WHEREAS, in the course of consultation with respect to the potential business venture, the
Parties anticipate disclosing to each other certain information of a novel, proprietary, or
confidential nature, and desire that such information be subject to all of the terms and
conditions set forth herein below.
NOW, THEREFORE, the Parties hereto, in consideration of the premises and other good and
valuable consideration, agree such information shall be treated as follows:
1. Confidential Information. “Confidential Information” shall mean and include any

information which relates to the financial and/or business operations of each Party,
including but not limited to, specifications, drawings, sketches, models, samples, reports,
forecasts, current or historical data, computer programs or documentation and all other
technical, financial or business data, including, but not limited to, information related to
each Party's customers, products, processes, financial condition, employees, intellectual
property, manufacturing techniques, experimental work, trade secrets.
2. Use of Confidential Information. Each Party agrees not to use the other's Confidential
Information for any purpose other than for the specific consultation regarding the potential
business venture. Any other use of such Confidential Information by any party shall be
made only upon the prior written consent from an authorized representative of the other
Party which wishes to disclose such information (the “Disclosing Party”) or pursuant to
subsequent agreement between the Parties hereto.
3. Restrictions. Subject to the provisions of paragraph 4 below, the Party receiving

Confidential Information (the “Receiving Party”) shall, for a period of five (5) years from the
date of the last disclosure of Confidential Information made under this Agreement 1(except
for personal customer data which shall remain confidential forever), use the same care and
discretion to limit disclosure of such Confidential Information as it uses with similar
confidential information of its own and shall not disclose, lecture upon, publish, copy,
modify, divulge either directly or indirectly, use(except as permitted above under clause 2)
or otherwise transfer the Confidential Information to any other person or entity, including
taking reasonable degree of care and steps to:
a. restrict disclosure of Confidential Information solely to its concerned employees,
agents, advisors, consultants, contractors and /or subcontractors with a need to know
and not disclose such proprietary information to any other parties; and
b. advise all receiving Party employees with access to the Confidential Information of the
obligation to protect Confidential Information provided hereunder and obtain from
agents, advisors, contractors and/ or consultants an agreement to be so bound.
c. use the Confidential Information provided hereunder only for purposes directly
related to the potential business venture.

4. Exclusions. The obligations imposed upon either Party herein shall not apply to
information, technical data or know how, whether or not designated as confidential, that:
a. is already known to the Receiving Party at the time of the disclosure without an
obligation of confidentiality;
b. is or becomes publicly known through no unauthorized act of the Receiving Party;
c. is rightfully received from a third Party without restriction and without breach of this
Agreement;
d. is independently developed by the Receiving Party without use of the other Party’s
Confidential Information and is so documented;
e. is disclosed without similar restrictions to a third party by the Party owning the
Confidential Information;
f. is approved for release by written authorization of the Disclosing Party; or
g. is required to be disclosed pursuant to any applicable laws or regulations or any order
of a court or a governmental body; provided, however, that the Receiving Party shall
first have given notice to the Disclosing Party and made a reasonable effort to obtain a
protective order requiring that the Confidential Information and/or documents so
disclosed by used only for the purposes for which the order was issued..
5. Return of Confidential Information. All Confidential Information and copies and extracts
of it shall be promptly returned to the Disclosing Party at any time within thirty (30) days
of receipt of a written request by the Disclosing Party for the return of such Confidential
Information.
6. Ownership of Information. The Parties agree that all Confidential Information shall remain
the exclusive property of the Disclosing Party and its affiliates, successors and assigns.
7. No License Granted. Nothing contained in this Agreement shall be construed as granting or

conferring any rights by license or otherwise in any Confidential Information disclosed to
the Receiving Party or to any information, discovery or improvement made, conceived, or
acquired before or after the date of this Agreement. No disclosure of any Confidential
Information hereunder shall be construed to be a public disclosure of such Confidential
Information by either Party for any purpose whatsoever.
8. Breach. In the event the Receiving Party discloses, disseminates or releases any
Confidential Information received from the Disclosing Party, except as provided above,
such disclosure, dissemination or release will be deemed a material breach of this
Agreement and the Disclosing Party shall have the right to demand prompt return of all
Confidential Information previously provided to the Receiving Party. The provisions of this
paragraph are in addition to any other legal right or remedies the Disclosing Party may
have.
9. Arbitration and Equitable Relief.

a. Arbitration. The Parties shall attempt to settle any disputes arising out of or relating
to this Agreement through consultation and negotiation. In the event no settlement can
be reached through such negotiation and consultation, the Parties agree that such
disputes shall be referred to and finally resolved by arbitration under the provisions of
the Arbitration and Conciliation Act, 1996 or any statutory modification thereof shall
apply. The arbitration shall be held in Mumbai. The language used in the arbitral
proceedings shall be English. The Parties shall appoint their own arbitrators.
b. Equitable Remedies. The Parties agree that it would be impossible or inadequate to

measure and calculate the Disclosing Party's damages from any breach of the

covenants set forth herein. Accordingly, the Parties agree that in event of breach of any
of the covenants contained in this Agreement, the affected Party shall have, in addition
to any other right or remedy available, the right: i) to obtain an injunction from a court
of competent jurisdiction restraining such breach or threatened breach; and ii) to
specific performance of any such provisions of this Agreement. The Parties further
agree that no bond or other security shall be required in obtaining such equitable relief
and the Parties hereby consent to the issuance of such injunction and to the ordering of
specific performance.
c. Legal Expenses. If any action and proceeding is brought for the enforcement of this
Agreement, or because of an alleged or actual dispute, breach, default, or
misrepresentation in connection with any of the provisions of this Agreement, each
Party shall bear its own expenses, including the attorney's fees and other costs
incurred in such action.
10. Term. This Agreement may be terminated by either Party giving sixty (60) days' prior
written notice to the other Party; provided, however, the obligations to protect the
Confidential Information in accordance with this Agreement shall survive for a period of
five (5) years from the date of the last disclosure of Confidential Information made under
this Agreement (except for personal customer data which shall remain confidential
forever).
11. No Formal Business Obligations. This Agreement shall not constitute create, give effect to
or otherwise imply a joint venture, pooling arrangement, partnership, or formal business
organization of any kind, nor shall it constitute, create, give effect to, or otherwise imply an
obligation or commitment on the part of either Party to submit a proposal or to perform a
contract with the other Party or to refrain from entering into an agreement or negotiation
with any other Party. Nothing herein shall be construed as providing for the sharing of
profits or loss arising out of the efforts of either or both Parties. Neither Party will be liable
for any of the costs associated with the other's efforts in connection with this Agreement. If
the Parties hereto decide to enter into any licensing arrangement regarding any
Confidential Information or present or future patent claims disclosed hereunder, it shall
only be done on the basis of a separate written agreement between them.
12. General Provisions.

a. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of India.
b. Severability. If one or more of the provisions in this Agreement is deemed void by law,
the remaining provisions shall continue in full force and effect.
c. Successors and Assigns. This Agreement shall be binding upon the successors and/or
assigns of the Parties, provided however that neither Party shall assign its rights or
duties under this Agreement without the prior written consent of the other Party.
d. Headings. All headings used herein are intended for reference purposes only and shall
not affect the interpretation or validity of this Agreement.
e. Entire Agreement. This Agreement constitutes the entire agreement and

understanding of the Parties with respect to the subject matter of this Agreement. Any
amendments or modifications of this Agreement shall be in writing and executed by a
duly authorized representative of the Parties.

f. Two original sets of Non-Disclosure Agreement are executed and retained by either
parties, Bank and NPCI.
The Parties, by the signature of their authorized representatives appearing below, acknowledge
that they have read and understand each and every term of this Agreement and agree to be
bound by its terms and conditions.
ACCEPTED AND AGREED TO BY:

NATIONAL PAYMENTS CORPORATION OF INDIA
______________________________________
(Signature)
Print Name:
Title:
IN WITNESS WITH:
(TYPE BANK’s NAME)
______________________________________
(Signature)
Print Name:
Title:
IN WITNESS WITH:
Bank:
_________________________________
(Signature)
Print Name:
Title:
NPCI:
________________________________
(Signature)
Name:
Title:

Annexure-XI
Bank’s Letter Head.
KYC/AML Undertaking By Banks
We ___________________________________________________(Name of the bank) with registered office at

___________________________________________________________ agree to participate in the “Aadhaar Enabled
Payment System” pilot launched by National Payments Corporation of India, with registered
office at C9-8th Floor, RBI premises, Bandra-Kurla Complex, Bandra East, Mumbai-400051 and
for that purpose:
We hereby declare and undertake to NPCI that:
i) Our Bank has an established Know Your Customer (KYC)/Anti Money Laundering process
(AML) and that we comply with all the Reserve Bank of India norms on KYC and AML.
ii) We shall offer AEPS only to those customers who have their Aadhaar number linked to an
account with us and undergo our KYC/ AML verification processes.
iii) We shall comply with all the guidelines issued by the Reserve Bank of India/ Government of
India on Business Correspondents and KYC/ AML related aspects, etc. for transactions
routed through this system.
Date: Sd…
Place: (Authorized Signatory)

Annexure-XII






Annexure-XIII




Annexure-XIV
Page i
IIN Request/Assignment Form

Part I – Request (From ISSUER to NPCI)
I. Member Details
Member Legal Name Participant ID
Member Legal
Address
City State
Zip/Pin Code Country
Phone Number/s Fax Number/s
Email ID
II. Request: Kindly assign our institution one IIN for issuance of RuPay cards. Our
institution also confirms that we will commence issuance of RuPay card on assigned IIN
by |M|M| /|D|D| /|Y|Y|Y|Y| or before completion of 9 months from IIN assignment date.
III. Requestors Declaration

Our institution acknowledges and accepts full responsibility for any and all activities associated
with the use of the IIN (if and when assigned) and warrant its usage in conformance with all
applicable RBI guidelines, NPCI operating procedures & NPCI Bylaws. For this purpose our
institution undertakes
 To comply with the ISO/ IEC 7812 standards of the numbering system for identification of
Issuer of cards
 To submit the IIN Activation / Update Form at least 1 month prior to issuance of cards
with the assigned IIN range
 To inform NPCI of any change to the details provided in this application form
Our institution is also aware that acceptance or rejection of this request for an IIN is at the sole
discretion of NPCI and confirm that the signing officer below is duly authorized to execute this
form.

Page ii
IIN Request/Assignment Form
Authorized
Authorized Officer
Officer
Name
Designation
Authorized Officer
Signature & Member Request Date
Seal
Direct Phone Mobile Number
Number State
Email ID
NOTE: Two original copies of this form needs to be submitted to NPCI at the address specified in the IIN Maintenance
Manual.
Part II – Assignment (From NPCI to ISSUER)

IIN Request Receipt
Date
IIN Request Granted? YES NO
IIN Assigned
Remarks (if request

declined)
Authorized Officer
Name and
Designation
Authorized Officer
Signature & NPCI
Seal
Assignment Date

Annexure - XV
Dispute Management Cycle
The various possible dispute scenarios have been given here to enable member banks to refer to
and resolve interbank settlement issues:
A. Aadhaar to Aadhaar Funds Transfer:

Scenario: The Remitting Bank has debited the Remitting customer’s Account. The Beneficiary
Bank has made the Credit to the Beneficiary’s Account too. The status of the remittance
transaction in the NPCI switch, however, is timed-out.
Solution: Beneficiary Bank advised to raise a Debit Adjustment on the Remitting Bank. The
resulting interbank settlement will resolve the problem.
B. Aadhaar initiated Cash Withdrawals:

For all Cash Withdrawal transactions, dispute management will be in the same manner as in
NFS.
Case i) Issuer Bank has debited the customer’s Account. But due to a time-out, Cash was not
dispensed by the acquirer. Interbank settlement also failed.
Issuer to reverse the debit made to the customer account by passing internal transfer
transactions.
Case ii) Issuer Bank has debited the customer’s account. But due to a time-out between the
NPCI switch and the acquirer switch, cash was not dispensed by the acquirer. Interbank
settlement however, was successful.
There are two options as under:

a. A Chargeback may be raised by Issuer (Representment to be raised by Acquirer if the charge
back is disputed)
b. A pro-active Credit Adjustment by the Acquirer. (If an Acquirer sends a proactive credit
adjustment, it should be ensured that a charge back by the issuer is also not allowed. i.e.
Either Acquirer or Issuer will originate an interbank adjustment and not both.)
C. Aadhaar initiated Cash Deposit Transactions:

Case i) The customer’s account was credited with the cash deposit at the Issuer bank. Due to
time out, the Cash was returned to the customer by the acquirer. Interbank settlement also
failed due to time out status in the NPCI switch.
Issuer bank will simply reverse the credit by passing internal transfer transactions.
Case ii) The customer’s account was credited with the cash deposit at the Issuer bank. Due to
time out received by the Acquirer, the Cash was returned to the customer. However, interbank
settlement was successful.
The Acquirer will raise a Debit Adjustment with a request to the issuer to reverse the credit
made.

As best practice, business correspondent should be advised to initiate a balance enquiry before
any cash deposit transaction. After executing a cash deposit transaction, the BC is advised to
send another Balance enquiry. The Balance Enquiry transactions receipts together should
confirm the cash deposit having been made in the remitting customer’s account. This is basically
to prevent the last leg time-out between the acquirer and the MicroATM terminal after a
successful transaction up to the acquirer switch. For time-outs between the Issuer-NPCI and
NPCI-Acquirer switches, a reversal is generated by the NPCI switch or the acquirer switch as the
case may be.
I. Responsibilities in Dispute Resolution

It is obligatory on the part of individual member banks to resolve all disputes amicably,
pertaining to customer’s transaction within the stipulated time frame as decided by NPCI.
Apart from this, member bank should provide all documents in support of the dispute,
error, fraud, etc. either to NPCI or to any other member bank (as directed) who is a party
to the dispute for the purpose of scrutiny, following the procedure and timelines laid
down in this document and the document on Settlement Procedure.
It is mandatory for all banks to enable generation of electronic logs in all MicroATMs on
the similar lines of ATMs. The electronic log will be a collection of all communications
between a MicroATM and its immediate switch/server on a business day. This will include
original transaction request, last transaction status request, reversal request and their
responses, respectively. The BC must push the electronic log file to bank switch/server at
the End of Day (EOD). The MicroATM application must facilitate the transmission in an
encrypted format.
The format of electronic logs is standardized in AEPS. Please refer AEPS Interface
document for reference.
It is highly recommended to banks that the banks Business Correspondents should carry
Withdrawal Slip, Deposit slip & fund transfer along with them while moving into field.
This may be required to settle on-site disputes and facilitating interbank settlement for
on-site dispute cases.
II. Dispute Resolution Mechanism

The Dispute Resolution mechanism will have below listed stages.
Categories of disputes
a. Chargeback
b. Re-presentment
c. Credit Adjustment
d. Debit Adjustment
e. Chargeback on Debit Adjustment
f. Pre-Arbitration
g. Arbitration
h. Good Faith

Stage I
1.1. Chargeback
Issuers have the right to return a disputed transaction as a chargeback to NPCI.
Chargeback can be raised within 60 days from the next date of the transaction. This
will be subject to conditions such as:
 Timeframes for submitting the Chargeback
 Conditions applicable to chargeback right
 Whether Supporting Documentation (Electronic copy of the Transaction log

etc.) is required
 Whether Retrieval Request for Transaction log or audit trail etc. in

electronic form will be necessary
Issuer can raise chargeback when its customer has been debited but cash was not
given to the customer. However, the Issuer was debited during settlement.
NPCI will validate the charge back and then forward the information to the Acquirer
as a part of its Settlement Process. On successful fulfilling of the chargeback
conditions, the DMS will process the dispute in favor of Issuer against Acquirer.
NPCI will credit the Issuers and debit the Acquirers for the amount of charged back
transactions.
1.2. Acquiring Chargeback

Acquirer has the right to return a disputed transaction as an acquiring chargeback to
NPCI. Chargeback can be raised within 60 days from the next date of the transaction.
This will be subject to conditions such as:
 Timeframes for submitting the acquiring chargeback
 Conditions applicable to acquiring chargeback right

etc.) is required

Acquirer can raise acquiring chargeback when issuer bank customer has been
credited but cash was not taken from the customer. However, the Acquirer was
debited during settlement.
NPCI will validate the charge back and then forward the information to the issuer as a
part of its Settlement Process. On successful fulfilling of the acquiring chargeback
conditions, the DMS will process the dispute in favor of Acquirer against Issuer.
NPCI will debit the Issuer and credit the acquirer for the amount of charged back
transactions.

1.3. Credit Adjustment

Acquirer is expected to raise a credit adjustment for a transaction wherein it has
surplus money with it. This will reduce the scope of Chargeback and add to customer
convenience. Credit Adjustment can be raised within 60 days from the next day of the
transaction. This will be subject to conditions such as:
 Timeframes for submitting the Credit Adjustment
 Conditions applicable to Credit Adjustment right

etc.) is required

Acquirer can raise Credit Adjustment when the Issuer bank customer has been
debited but cash was not given to the customer. However, the Issuer was debited
during settlement.
NPCI will validate the Credit Adjustment and then forward the information to the
Issuer as a part of its Settlement Process. On successful fulfilling of the Credit
Adjustment conditions, the DMS will process the dispute in favor of Issuer against
Acquirer.
NPCI will credit the Issuers and debit the Acquirers for the amount of Credit
Adjustment transactions.
1.4. Debit Adjustment

Beneficiary has the right to return a disputed transaction as a Debit Adjustment to
NPCI. Credit Adjustment can be raised within 17 days from the next day of the
transaction.
This will be subject to conditions such as:
 Timeframes for submitting the Debit Adjustment
 Conditions applicable to Debit Adjustment right

etc.) is required

Beneficiary can raise Debit Adjustment when its customer has been credited but due
to transaction decline at NPCI, the settlement has not taken place. NPCI will validate
the Debit Adjustment and then forward the information to the Remitter as a part of
its Settlement Process.
On successful fulfilling of the Debit Adjustment conditions, the DMS will process the
dispute in favor of Beneficiary against Remitter.

Stage II
2.1. Representment
The Acquirer shall have the right to represent the transaction received as a charge
back to NPCI from the Issuer within 5 days from the next day of the chargeback,
provided it finds that it satisfies the conditions laid down for Representment or if the
charge back was invalid. The acquirer’s right to represent will be subject to following
conditions:
 The time frame for submitting a Representment
 Conditions applicable for exercising the Right to Represent
 Supporting Documents (Electronic copy of the Transaction log etc.) which

should prove that the disputed transaction was successful at ATM.
NPCI DMS application shall validate all Re-presentments, and process the dispute in
favor of Acquiring Bank through the Settlement Process.
NPCI will debit the Issuers and credit the Acquirers for the amount of represented
transactions.
2.2. Representment
The Issuer shall have the right to represent the transaction received as an acquiring
chargeback to NPCI from the Acquirer within 5 days from the next day of the
chargeback, provided it finds that it satisfies the conditions laid down for
Representment or if the charge back was invalid. The Issuer’s right to represent will
be subject to following conditions:
 The time frame for submitting a Representment
 Conditions applicable for exercising the Right to Represent
 Supporting Documents (Electronic copy of the Transaction log etc.) which

should prove that the disputed transaction was successful at ATM.
NPCI DMS application shall validate all Re-presentments, and process the dispute in
favor of Acquiring Bank through the Settlement Process.
NPCI will debit the acquirer and credit the issuer for the amount of represented
transactions.
Stage III Pre-Arbitration Process

If the Issuer and Acquirer are still unable to settle the dispute after these two stages, the
next stage will be a process of Pre-Arbitration Dispute Resolution through DMS Online
System.
An Issuer bank, who has been debited for a re-presentment and still disputes it, has a right
to refer to Pre-Arbitration. For all cases of Pre-arbitration including Pre-arbitration of
debit adjustment disputes, the time frame for raising Pre-arbitration will be 30 days after
re-presentment date. Similarly, an acquirer can also raise pre arbitration when it has been
debited for re-presentment.

The Issuer/Acquirer bank can make reference to Pre-Arbitration by lodging the dispute in
DMS interface with the requisite proof in support of his claim. Disputes satisfying the
validation process will be processed by DMS Online System.
Acquirer/issuer bank has to respond to the pre-arbitration raised by Issuer/Acquirer

bank within 17 days from the pre-arbitration date. Acquirer/Issuer bank can decline the
pre-arbitration along with reasons and valid attachments.
In the absence of response from the Acquirer/issuer bank within 17 days, the pre-
arbitration request submitted by the Issuer/Acquirer bank would be considered as
accepted (by default) and the amount will be reversed to the Issuer/Acquirer bank.
Where the pre-arbitration decline by Acquirer/Issuer is not acceptable to the
Issuer/Acquirer bank, they can refer the dispute for arbitration by manual process.
For uploading of incorrect EJ copies by Acquiring/issuing bank, a flat penalty of Rs. 100
will be imposed at the time of Pre-arbitration. This amount will be credited to the
Issuer/Acquirer bank.
Stage IV Arbitration by Manual Process

The timeframe for referring a dispute to Arbitration by manual process is 30 days from
the date of concluding the Pre-arbitration. Request for Arbitration after the timeline will
be subjected a late fee of Rs. 500.
4.1. All arbitration disputes concerning settlements will be referred to Dispute

Management Committee as per NFS practice.
4.2. The member bank has to pay Rs. 500 as processing fee for referring a dispute for
arbitration as per NFS practice.
4.3. Dispute Management Committee comprising members of the Steering Committee

will operate as Panel for Resolution of Disputes as per NFS practice.
4.4. The Dispute Management Committee will have 5 members, 4 members of the
Steering Committee and Chairman who will be either the Chief Executive Officer or
the Chief Operating Officer of NPCI as per NFS practice.
4.5. In case of specific disputes involving any member(s) of the Dispute Management
Committee, the member(s) concerned shall be replaced by other member(s) of
AEPS for the limited purpose of looking into the specific dispute as per NFS practice.
4.6. Any party aggrieved by the decision of the Dispute Management Committee can
approach the Appellate authority for review as per NFS practice.
4.7. Until the disposal of appeal by the Appellate authority, the Dispute Management
committee can decide levy of the refund / compensation and hold such amount in
an interim account till disposal of the appeal as per NFS practice.

Stage V Arbitration
Banks are given a chance for disputing transactions using Good-Faith option for those
transactions for which the regular TAT was missed. The time frame for raising Good Faith
would be 60 days from the expiry of the regular TAT. Any Good-faith dispute should be
resolved within 15 days from date of raising the dispute in the DMS.
A Good Faith dispute would only be settled if it has been accepted/ deemed accepted by
the member bank. For rejected Good Faith dispute there would not be any settlement.
If there is no response from the concerned bank, DMS will consider the dispute to be
deemed accepted and the same will be settled. Pre-arbitration/Arbitration options shall
not be available for disputes raised as Good-faith dispute in DMS.
III. Reference Scenarios for disputes

Below are some of the dispute scenarios for reference. However, disputes may not be
limited to these cases only. The below mentioned scenarios may guide for taking
appropriate actions.
a. Cash Withdrawal
Failure at Step 1, Step 2, Step 3, Step 4

a) If any of Step 1, Step 2, Step 3 or Step 4 fails due to ‘time out’ then, there would
be no financial impact on the customer, acquirer bank, NPCI or Issuer bank.
b) These cases would not result into any kind of dispute as the original request
itself was not processed.
c) The acquirer bank is expected to send decline message to MicroATM.

d) The customer may opt to do the transaction again which will be entertained as a
new transaction.
Failure at Step 5
a) If NPCI is not able to send request to Issuer, due to no connectivity etc, it will
send 0210 response message with response code ‘08’ to acquirer bank.
b) In this case, 08 signify ‘NPCI is not able to send the request at all to issuer’.
c) Acquirer bank will send decline transaction to MicroATM.
d) Customer account remains unaffected, no settlement at NPCI.
Failure at Step 6
a) If the connectivity between NPCI and Issuer bank is up and NPCI has sent 0200
request message to Issuer bank.
b) If the Issuer switch is unable to send the request to CBS, it will send 0210
response message with response code ‘08’ to NPCI.
c) In this case, 08 signify ‘Issuer CBS not available’.
d) NPCI will forward the response message to Acquirer bank. Acquirer bank will
send decline message to MicroATM.
e) Customer account remains unaffected, no settlement at NPCI.
Failure at Step 7
b) NPCI will wait for 20 seconds to get the response.
c) If the Issuer switch has successfully sent the request to CBS.
d) Issuer CBS failed to get response in stipulated time period it will send 0210
e) In this case, 91 signify ‘No response from CBS.
f) NPCI will forward the response message to Acquirer bank. Acquirer bank will
g) Issuer has to raise internal reversal with CBS to revert the original transaction, if
it was processed.
h) If internal reversal posting request does not gets processed, the customer will
raise complaint to Issuer bank branch/BC.
i) No settlement will take place at NPCI end.
Failure at Step 8
c) If NPCI does not get any response from Issuer bank, it will send 0210 response
message with response code ‘91’ to acquirer bank.

d) In this case, 91 signify ‘NPCI doesn’t get any response from Issuer after sending
the request’.
e) Acquirer bank will send decline message to MicroATM.
f) NPCI will raise 0420 reversal request with response code ‘91’ to issuer bank and
Issuer bank is expected to revert the transaction internally and respond with
0430 response message with response code ‘91’
g) If the issuer bank does not respond to 0420 request message, 0421 message will
be send thrice after the logon message.
h) If internal reversal posting request does not gets processed, the customer will
raise complaint to Issuer bank.
i) This transaction will not come in DMS.
Failure at Step 9
a) If the 0200 request for a withdrawal transaction was successfully processed at
the Issuer bank end and Issuer bank also responded ‘00’ in 0210 response
message, this transaction will be listed as successful transaction at NPCI end.
b) If the acquirer bank fails to receive 0210 response message from NPCI to the
original request, it will generate 0420 reversal message request with response
code ‘68’ to NPCI and send decline message to MicroATM, simultaneously.
c) NPCI will send the message to Issuer Bank and Issuer needs to reverse the
transaction in CBS and respond with 430 message containing Response Code
‘00’.
d) NPCI will forward this 0430 to acquirer bank.
e) If the reversal request is processed at all the nodes then the customer account
will be credited back and there will be no dispute.
f) If the 0420 reversal request does not reach NPCI or Acquirer sent reversal after
NFS cutover or next business day, acquirer bank would not be able to receive
0430 from NPCI.
g) On T+1, during settlement Issuer bank will be debited and acquirer bank would
be credited. Issuer bank will raise ‘Chargeback’.
h) Acquirer bank is expected to raise proactive ‘Credit Adjustment’ when cash not
given but account got settled.
i) If an Acquirer sends a proactive credit adjustment, it should be ensured that a
charge back by the issuer is also not allowed. i.e. Either Acquirer or Issuer will
originate an interbank adjustment and not both.
Failures at Step 10
a) If the MicroATM does not get 0210 response message from acquirer bank switch
within 90 seconds, it will generate reversal request to acquirer bank switch.
b) Acquirer bank switch will forward the 0420 request with response code ‘68’ to
NPCI and NPCI will forward the request to Issuer bank.
c) Issuer needs to reverse the transaction in CBS and respond with 430 message
containing Response Code ‘00’.
d) If the reversal request is processed at all the nodes then the customer account

e) If the 0420 reversal request does not reach NPCI or Acquirer sent reversal after
0430 from NPCI.
f) On T+1, during settlement Issuer bank will be debited and acquirer bank would
be credited. On the next day, Issuer bank will raise ‘Chargeback’.
g) Acquirer bank is expected to raise proactive ‘Credit Adjustment’.
h) Reversal generated by MicroATM even after successful transaction.
b. Cash Deposit
Failure at Step 1, Step 2, Step 3, Step 4

be no financial impact on the customer, acquirer bank, NPCI or Issuer bank.
c) The acquirer bank is expected to send decline message to MicroATM.
new transaction.
Failure at Step 5
a) If NPCI is not able to send request to Issuer, due to no connectivity etc, it will
send 0210 response message with response code ‘08’ to acquirer bank.
b) In this case, 08 signifies ‘NPCI is not able to send the request at all to issuer’.
c) Acquirer bank will send decline transaction to MicroATM.
d) Customer account remains unaffected, no settlement at NPCI.

Failure at Step 6
b) If the Issuer switch is unable to send the request to CBS, it will send 0210
c) In this case, 08 signify ‘Issuer CBS not available’.
d) NPCI will forward the response message to Acquirer bank. Acquirer bank will
e) Customer account remains unaffected, no settlement at NPCI.
Failure at Step 7
c) If the Issuer switch has successfully sent the request to CBS but Issuer CBS failed
to get response in stipulated time period it will send 0210 response message
with response code ‘91’ to NPCI.
d) In this case, 91 signify ‘No response from CBS.
e) NPCI will forward the response message to Acquirer bank. Acquirer bank will
f) Issuer has to raise internal reversal with CBS to revert the original transaction, if
it was processed.
g) Since, this is a decline transaction at NPCI therefore it will not be settled.
h) The BC will return cash to customer.
Failure at Step 8
c) If NPCI does not get any response from Issuer bank, it will send ‘91’ to acquirer
bank.
d) In this case, 91 signify ‘NPCI doesn’t get any response from Issuer after sending
the request’.
e) NPCI will forward the response message to Acquirer bank. Acquirer bank will
f) NPCI will raise 0420 reversal request with response code ‘91’ to issuer bank and
Issuer bank is expected to revert the transaction internally and respond with
0430 response message with response code ‘91’
g) If the issuer bank is not available or does not respond to 0420 request message,
0421 thrice will be sent.
h) Since, this is a decline transaction at NPCI therefore it will not be settled.
i) However Issuer has credited his customer account with the requested amount,
j) NPCI raw data file will show decline to that particular transaction, thus Issuer
bank to raise ‘internal reversal’.

Failure at Step 9
a) If the 0200 request for a deposit transaction was successfully processed at the
Issuer bank end and Issuer bank also responded ‘00’ in 0210 response message,
this transaction will be listed as successful transaction at NPCI end.
b) If the acquirer bank fails to receive 0210 response message from NPCI to the
original request, it will generate 0420 reversal message request with response
code ‘68’ and send decline message to MicroATM.
c) NPCI will send the message to Issuer Bank and Issuer needs to reverse the
transaction in CBS and respond with 430 message.
d) NPCI will forward this 0430 to acquirer bank.
e) If the reversal request is processed at all the nodes then the customer account
will be debited back and there will be no dispute.
f) If the 0420 reversal request does not reach NPCI or Acquirer sent reversal after
0430 from NPCI.
g) During settlement Issuer bank will be credited and acquirer bank would be
debited.
h) Acquirer bank is expected to raise ‘Chargeback’ based on raw data file received
from NPCI when cash was not accepted by BC from customer but the transaction
settled as per NPCI records.
Failures at Step 10
a) If the MicroATM does not get 0210 response message from acquirer bank switch
within 90 seconds, it will generate reversal request to acquirer bank switch.
b) Acquirer bank switch will forward the 0420 request with response code ‘68’ to
NPCI and NPCI will forward the request to Issuer bank.
c) Issuer needs to reverse the transaction in CBS and respond with 430 message
containing Response Code ‘00’.
d) If the reversal request is processed at all the nodes then the customer account
e) If the 0420 reversal request does not reach NPCI or issuer bank could not receive
0420 request, acquirer bank would not be able to receive 0430 from NPCI.
f) During settlement Issuer bank will be credited and acquirer bank would be
debited. On the next day,
g) Acquirer bank is expected to raise ‘Chargeback’ based on raw data file received
from NPCI

c. Fund transfer
Failure at Step 1, Step 2, Step 3, Step 4 and Step 5

be no financial impact on the customer, Remitter bank, NPCI or beneficiary bank.
c) The Remitter bank is expected to send decline message to MicroATM.
new transaction.
Failure at Step 6
a) The connectivity between NPCI and Remitter bank is up and NPCI has sent 0210
response message to it after authentication. The Remitter switch is unable to
send the request to CBS, it will send decline message to MicroATM.
b) Customer account remains unaffected, no settlement at NPCI.
Failure at Step 7
a) The connectivity between NPCI and Remitter bank is up and NPCI has sent 0210
request message to it after authentication. The Remitter switch is unable to
receive the response from its CBS for the debit request it had sent, it will send
decline message to MicroATM.
b) Remitter bank has to do internal reversal posting at its end.
c) If the internal reversal fails and customer account remains debited, then both the
bank and the customer have to settle among them.

d) No settlement would take place at NPCI.
Failure at Step 8
a) The remitter bank has debited its customer account and sent 0200 request
message but NPCI did not receive the 0200 request message (credit leg).
b) This request will get time out as NPCI will not reply.
c) Now, remitter bank has to raise internal reversal with CBS to revert the original
transaction.
d) If the internal reversal fails and customer account remains debited, then both the
e) No settlement would take place at NPCI.
Failure at Step 9
a) If NPCI is not able to send request to beneficiary, due to no connectivity etc, it
will send 0210 response message with response code ‘08’ to remitter bank.
b) Now, remitter bank has to raise internal reversal with CBS to revert the original
transaction, if it was processed.
c) If the internal reversal fails and customer account remains debited, then both the
d) No settlement would take place at NPCI.
Failure at Step 10
a) NPCI has send 0200 request message to beneficiary bank to credit beneficiary
account and will wait for 20 second to get response.
b) If the beneficiary switch is unable to send the request to CBS, it will send 0210
c) In this case, 08 signify ‘Beneficiary CBS not available’.
d) NPCI will forward the 0210 response message with response code ‘08’ to
remitter bank, which in turn will send decline message to MicroATM and raise
internal reversal with CBS to revert the original transaction,
e) If the internal reversal fails and customer account remains debited, then both the
f) No settlement would take place at NPCI.
Failure at Step 11
a) NPCI has send 0200 request message to beneficiary bank to credit beneficiary
account and will wait for 20 second to get response.
b) If the beneficiary switch has successfully sent the request to CBS but beneficiary
CBS failed to send response in stipulated time period, switch will send 0210
response message with response code ‘91’ to NPCI and raise internal reversal
with CBS to revert the original transaction, if it was processed.
c) In this case, 91 signify ‘No response from CBS’.

d) NPCI will forward 0210 response message with response code ‘91’ to remitter
bank, which in turn will send decline message to MicroATM and raise internal
reversal with CBS to revert the original transaction.
e) If the internal reversal fails and customer account remains debited, then both the
f) No settlement would take place at NPCI.
g) Beneficiary bank to raise Dr. Adjustments if a/c of the customer was originally
credited but beneficiary bank was not credited.
Failure at Step 12
a) The connectivity between NPCI and beneficiary bank is up and NPCI has sent
0200 request message to beneficiary bank.
c) If NPCI does not get any response from beneficiary bank, it will send 0210
response message with response code ‘91’ to remitter bank.
d) Remitter bank will send decline message to MicroATM and hold customer money
in a pooling account.
e) NPCI raw data file will show decline to that particular transaction.
f) On T+1 the transaction is unsuccessful, no settlement will happen between
remitter & beneficiary, No settlement would take place at NPCI.
g) Beneficiary bank to raise “Dr. Adjustments” if a/c of the customer was originally
credited but beneficiary bank was not credited.
Failure at Step 13
a) The connectivity between NPCI and beneficiary bank is up and NPCI has sent
0200 request message to beneficiary bank.
b) The 0200 request for a fund transfer transaction was successfully processed at
the beneficiary bank end and beneficiary bank also responded ‘00’ in 0210
response message, this transaction will be listed as successful transaction at
NPCI end.
c) If the remitter bank has failed to receive 0210 response message from NPCI to
the original request, it will send decline message to MicroATM and maintain the
debited position of customer account.
d) Since, the original transaction was a success at NPCI so settlement will take place
at 2300 hours & the remitter will be debited and beneficiary will be credited
e) Based on the raw data file details provided by NPCI, status of original transaction
would be known both to remitter and beneficiary.
f) Both the banks must settle customer account with them based on Raw Data File.
g) Original transaction was a success so settlement would take place at NPCI.
Failure at Step 14
a) If the MicroATM does not get 0210 response message from remitter bank switch
within 90 seconds, it will generate last transaction status message to acquirer
bank switch.
b) Acquirer bank switch needs to response accordingly.

Please refer the table for dispute scenarios:
Sr. Transaction Scenario Response Action Raised Fund Switching

No. Type Code At By Movement& Fee
NPCI Interchange Involved
Involved
1 Cash Acquirer 00 Chargeback Issuer Yes No
Withdrawal Received
successful
response from
NPCI but due to
time out between
Acquirer Switch
and MicroATM,
BC did not give
cash to customer
OR Acquirer
bank did not get
0210 message for
0200 request, it
generated 0420
but NPCI did not
received it,
settlement done
at NPCI
2 Cash -do- 00 Cr. Acquirer Yes No
Withdrawal Adjustment
3 Cash Deposit Acquirer 00 Acquiring Acquirer Yes No
Received Chargeback
successful
response from
NPCI but due to
time out between
Acquirer Switch
and MicroATM,
BC did not give
cash to customer
OR Acquirer
bank did not get
0210 message for
0200 request, it
generated 0420
but NPCI did not
received it,
settlement done
at NPCI

4 Fund Transfer NPCI did not 91 Dr. Beneficia No Yes

receive 0210 Adjustment ry
message from
Beneficiary but
the account was
originally
credited
Note: If Acquirer bank has raised Cr. Adjustment then Issuer must not chargeback for same
transaction.
Disputes Summary
Dispute type Cash withdrawal Cash-Deposit Fund Transfer
Chargeback* Issuer Acquirer NA
Credit Adjustment Acquirer NA NA
Debit Adjustment** NA NA Beneficiary
* Chargeback shall be followed by Re-presentment, pre-arbitration, arbitration & good faith

** Debit Adjustment shall be followed by chargeback on debit adjustment, pre-arbitration,
arbitration & good faith.
IV. Fund Movement & Fee Structure
Transaction Response Fund Interchange fee to Switching fee to

type Code movement from be charged from be charged from
ONUS Issuer
00/U3 - -
Authentication
OFFUS Balance Issuer

00 - Issuer-> Acquirer
Enquiry
OFFUS Cash Issuer
00 Issuer->Acquirer Issuer-> Acquirer
Withdrawal
OFFUS Cash Issuer
00 Acquirer->Issuer Issuer-> Acquirer
Deposit
Remitter-> Remitter-> Remitter
Fund transfer 00
Beneficiary Beneficiary
NOTE: Please refer to DMS guidelines for more information on handling disputes.

Annexure-XVI
On Bank’s Letter Head
Aadhaar Enabled Payment System (AEPS)
Declaration cum undertaking
We, _____________________________________________(Name of the bank) with registered office at

___________________________________________________________ have agreed to participate in the Pilot
implementation of the Aadhaar Enabled Payment System (AEPS) sponsored by the National
Payments Corporation of India, with registered office at C9-8th Floor, RBI Premises, Bandra
Kurla Complex, Bandra East, Mumbai-400051and for that purpose:
We hereby declare and undertake that:

i) We are a member of National Financial Switch.
ii) We agree with the interchange, switching and settlement fees as prescribed by AEPS
guidelines.
iii) We agree and undertake to deposit a sum of (____________ in words) towards collateral in the
Current Account No.: of NPCI with HDFC Bank. We note to ensure that our Net payable will
never exceed twice the amount of this deposit, towards the Net Debit Cap, (NDC) at any
point of time during any 24 hour AEPS cycle.
iv) We also undertake to monitor our daily Net payables from the daily settlement reports and
will deposit in advance as and when required, the additional collateral in the NPCI’s
account so that our net payables at any point of time, does not exceed the NDC during any
24hr AEPS cycle.
v) We further agree and undertake that all our AEPS financial messages routed through AEPS
will comply with the format specification as laid down in the AEPS Host interface
specifications.
vi) We also agree and undertake that the operation and risk management responsibilities as
laid out in the AEPS Procedural Guidelines (Paragraph 26 & 27) implemented and complied
with, to the entire satisfaction of the NPCI.
vii) We agree and undertake that all interbank Balance Enquiry, Cash Deposit, Cash Withdrawal
and Aadhaar to Aadhaar interbank remittance services offered to our Customers using
AEPS will be branded only as ‘Aadhaar Enabled Payment System’.
viii) We declare that we have made necessary changes in our I.T. Systems to enable Straight
Through Processing of both AEPS inward and outward financial transactions conforming to
the requirement of the AEPS Host Interface specifications of NPCI.

ix) We declare that the Debit or Credit respectively, to a customer will be automatically
reversed if NPCI or the Acquirer/ Remitting Bank sends a reversal notification in respect of
a cash deposit or a Cash Withdrawal transaction excepting time-out responses.
x) We declare that the POS devices used by our Business Correspondents adhere to the
standards as specified in the document on MICRO-ATM STANDARDS report of the working
group on technology issues of the Indian Banks Association and UIDAI for banking services
facilitated, hardware and interbank message flow.
xi) We declare that the details provided in the transaction receipts issued by our BCs will be as
per the AEPS Interface Specifications.
xii) We declare that the security aspects, authentication and encryption standards on the
MicroATM (FI POS/ terminal) comply with extant Aadhaar Authentication API and Devices
Security Specification, fingerprint device specifications of the UIDAI for Aadhaar
Authentication.
xiii) We undertake and declare that our bank will be wholly responsible for all acts of
commissions and omissions of all our Business correspondents.
xiv) We undertake that we shall comply with all guidelines issued by the Reserve Bank of India/
Government of India on Business Correspondent related aspects for all AEPS transactions.
Date:
Place: (Authorized Signatory)

Procedural Guidelines1

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Procedural Guidelines for AEPS

National Payments Corporation of India Confidential Page 1 of 69

Procedural Guidelines for Aadhaar Enabled Payment System

c) To sub-serve the goal of RBI in electronification of retail payments.

e) To facilitate disbursements of Government entitlements like NREGA, Social Security

f) To facilitate inter-operability across banks in a safe and secured manner.

National Payments Corporation of India Confidential Page 2 of 69

National Payments Corporation of India Confidential Page 3 of 69

c) Banks as registrars to UIDAI may choose to issue a card to enable Interoperability

8. Issuer Identification Number - IIN:

IIN + Aadhaar number

9. Customer Access Point:

National Payments Corporation of India Confidential Page 4 of 69

b) A Business Correspondent is an intermediary used by a bank to extend Banking

10. Intrabank (On-us) and Interbank (Off-us) Transactions:

11. Issuer Bank:

12. Acquirer Bank:

13. Transaction Receipt:

14. Aadhaar Authentication:

National Payments Corporation of India Confidential Page 5 of 69

15. Aadhaar enabled interbank (Off-us) Transactions:

b) Cash Deposit through a Business Correspondent:

National Payments Corporation of India Confidential Page 6 of 69

c) Aadhaar to Aadhaar Interbank Funds Transfer:

National Payments Corporation of India Confidential Page 7 of 69

d) Aadhaar Initiated Balance Enquiry:

A transaction declined by a destination bank with an appropriate decline code is deemed as

16. Interbank Settlements and Net Debit Cap (NDC):

b) NPCI would compute a member bank’s net position (payable or receivable) on

National Payments Corporation of India Confidential Page 8 of 69

g) Minimum collateral would be Rs.5,00,000/-(Rupees five lakhs). The collaterals

h) The purpose of collateral would be only for guaranteeing the settlement.

l) It will be members’ responsibility to verify the accuracy of the Daily Settlement

National Payments Corporation of India Confidential Page 9 of 69

17. Fees charged by NPCI for AEPS:

c) In the case of Intrabank (On-US) transactions for Aadhaar gateway authentication

i) Financial transactions through AEPS

ii) Non- Financial transactions through AEPS

National Payments Corporation of India Confidential Page 10 of 69

OFFUS Balance Rs 3/- per successful

1% of fund flow, subject

1% of fund flow, subject

1% of fund flow, subject

18. Settlement Fee:

19. AEPS Availability:

National Payments Corporation of India Confidential Page 11 of 69

20. Choice of Connectivity:

21. Message Formats:

22. Transaction Logging:

23. Member Notification:

a) Inclusion of a new member participating in AEPS

24. Steering Committee for AEPS:

a) Select Member banks

National Payments Corporation of India Confidential Page 12 of 69

25. Reports and Reconciliation:

a) Aadhaar Authentications through NPCI.

26. Operating Procedure:

National Payments Corporation of India Confidential Page 13 of 69

i) A member bank shall cease to be a member in any of the following events:

27. Risk Management at Originating and Responding Banks:

i) Limits on the Transaction amount if any

National Payments Corporation of India Confidential Page 14 of 69

b) Transaction Responding Bank shall be responsible for the following (As

28. AEPS Dispute Management System and Exceptions handling: