Termination of BSP Cheque pick up facility

Airlines, Aviation, Featured, IAAI, Travel — By on December 21, 2015 at 6:06 am

The Indian Travel Trade industry is going to be affected severely from 1st January, 2016, onwards.  The new decision to use services of National Automated Clearing House (NACH), the electronic transaction facilities, will ease and enhance financial processing of IATA’s Clearance House. It can also be termed as a part of IATA’s “StB” (simplifying the Business) process. Technology is good and advanced.  Good for them, but bad for the Indian Agents Fraternity.

A look at this automatic process:
On the Remittance day, IATA will initiate the process and the Agent’s bank account will be automatically debited as per the BSP payment calendar. The poor Agent is not required to take action to initiate the debit. If there is insufficient fund in the bank at the time of debit, the Agent will be termed to be in “DEFAULT”.

As per the current IATA Bank Settlement Plan (BSP) applicable till 31st December, 2015, the “Remittance Day” is the day on which the Travel Agent is required to submit the payment cheque to IATA. Under the new system, effective 1st January, 2016, the “Remittance Day” is the day on which the Travel Agent’s  payment is to be credited to the Airline’s Bank Account. As a result of this new payment procedure, a Travel Agent stands to lose one precious day from the allowed credit period.

In a country like India, no Agent can run a business without Corporates and cannot flourish without extending credit facilities to them and most of the agents are compelled to do so just for the sake of their survival.

IATA has provided an alternative system. Instead of NACH, Agents can deposit their cheques at the Deutsche Bank head quarters at Mumbai or any of their 16 branches in India.  We have 3000 agents spread out in 29 States and 7 Union Territories. Is it practically possible for the Agents located in these 36 different parts of India to avail this facility with the limited 16 branches of the Deutsche Bank?

Remittance through RTGS and other means of transfer involve additional expenses and are time consuming and will not be viable and practical over a long period. Agents in India prefer the traditional method of payment by cheque as it affords them more flexibility with their Bankers at certain times.

Are the Indian Travel Agents geared up and equipped fully for its compliance yet? Already, many Travel Agencies are closed as a result of the various restrictive measures imposed on them by the Airlines like ‘Zero’ commission, ‘Ticketing Authority Process’ (TAP) and the ‘Weekly Payment System’ (WPS). It will now have to be seen how many more will survive through this “simplified” process. Sooner or later, the Industry is going to meet with a tragic end as it appears from ‘the writings on the wall’.

The Agency Programme Joint Council- India (APJC-India) is the forum instituted by IATA to decide on these policies. The primary responsibility of APJC-India is to ensure the welfare and smooth running of the Indian aviation industry and of the airline / travel agency partnership. The best practices and procedures should be followed for the betterment of the Industry.  It is an admitted fact that the Travel Agent Representatives in APJC-India tend to dance to the tunes of the Airlines and IATA. ‘Yes Men’ with a vested interests policy.

However, most of the APJC-India policies are not influenced by considerations for the Agents’ welfare or aspirations but by the vested interests. Should IATA decide APJC-India Policies?

When IATA insists on NACH, it is essential that the Agents’ Representatives in APJC – India should have followed the best practices required for the Indian conditions and demanded IATA to have a cheque collection facility through a Nationalized Indian Bank which has networking all over India instead of the Deutsche Bank that has a very limited number of branches in India.

The Regulatory Authorities for Civil Aviation in the Government of India should take the necessary steps to ensure that foreign airlines operating to/from/through India deal with only Indian Banks and entities. With India set to become the third largest aviation market by 2020 and the largest by 2030, foreign Banks must not be allowed to poach on the USD 16 billion+ Indian Aviation & Travel Industry business at the cost of the Nationalized Indian Banka.

Looking at it patriotically, why force Indian Travel Agents to deal with a foreign bank?.

IATA cannot enforce rules. And, Agents should not be against developmental procedures also. But, implementation of IATA Resolutions and procedures or adaption of new technological systems should be with  the approval of the APJC in a country and  which MUST be conducive to the Indian  market requirements and conditions, subject to the National Law and within the framework of IATA and ICAO.

It is hoped that APJC-India would feel the pulse of the Indian Travel Agents and that better sense would prevail upon the Airline & Agent Representatives in APJC-India to frame rules and practices that are for the good of the Travel Agents Fraternity.

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