Banking Awareness::

CAMELS Rating System

Definition of 'CAMELS Rating System'

An international bank-rating system where bank supervisory authorities rate
institutions according to six factors.

The six factors are represented by the acronym "CAMELS."
Investopedia explains 'CAMELS Rating System'

The six factors examined are as follows:

C - Capital adequacy
A - Asset quality
M - Management quality
E - Earnings
L - Liquidity
S - Sensitivity to Market Risk

Bank supervisory authorities assign each bank a score on a scale of one (best) to
five (worst) for each factor. If a bank has an average score less than two it is
considered to be a high-quality institution, while banks with scores greater than
three are considered to be less-than-satisfactory establishments. The system
helps the supervisory authority identify banks that are in need of attention.

ATM::

Q. 1. What is an Automated Teller Machine (ATM)?
Ans1. Automated Teller Machine is a computerized machine that provides the customers of
banks the facility of accessing their account for dispensing cash and to carry out other
financial & non-financial transactions without the need to actually visit their bank branch.
Q.2. What type of cards can be used at an ATM?
Ans 2. The ATM debit cards, credit cards and prepaid cards (that permit cash withdrawal)
issued by banks can be used at ATMs for various transactions.
Q. 3. What are the services/facilities available at ATMs?
Ans3. In addition to cash dispensing ATMs may have many services/facilities enabled by the
bank owning the ATM such as:
Account information
Cash Deposit
Regular bills payment
Purchase of Re-load Vouchers for Mobiles
Mini/Short Statement
Loan account enquiry etc.
Q.5. What is Personal Identification Number (PIN)?
Ans 5. PIN is the numeric password which is separately mailed / handed over to the
customer by the bank while issuing the card. Most banks require the customers to change the
PIN on the first use.
Q.6. Can these cards be used at any bank ATM in the country? Is the customer charged
for the same?
Ans 6. Yes. The cards issued by banks in India may be used at any bank ATM within India.
However the savings bank account holders can transact a maximum of five transactions free
at other bank ATMs in a month, which is inclusive of all types of transactions, financial and
non-financial, beyond which the customer can be charged by his/her bank.
Q. 9. Is there any minimum and maximum cash withdrawal limit per day?
Ans 9. Yes. broadly the withdrawal limits are set by the card issuing banks. This limit is
displayed at the respective ATM locations.
Q. 11. Is there any time limit for the card issuing banks for recrediting the customers
account for a failed ATM transaction indicated under Q No. 10?
Ans 11. As per the RBI instructions (DPSS.PD.No. 2632/02.10.002/2010-2011 dated May
27, 2011), banks have been mandated to resolve customercomplaints by recrediting the
customers account within 7 working days from the date of complaint.
Q. 12. Are the customers eligible for compensation for delays beyond 7 working days?
Ans 12. Yes. Effective from July 1, 2011, banks have to pay customers Rs. 100/- per day for
delays beyond 7 working days. The compensation has to be credited to the account of the
customer without any claim being made by the customer.If the complaint is not lodged within
30 days of transaction, the customer is not entitled for any compensation for delay in
resolving his / her complaint.
PAYMENT SYSTEMS IN INDIA::

Board for Regulation and Supervision of Payment and Settlement Systems (BPSS):

The Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), a sub-
committee of the Central Board of the Reserve Bank of India is the highest policy making body on
payment systems in the country.

In India, the payment and settlement systems are regulated by the Payment and Settlement
Systems Act, 2007 (PSS Act) which was legislated in December 2007.

Paper-based Payments:
Use of paper-based instruments (like cheques, drafts, and the like) accounts for nearly 60% of
the volume of total non-cash transactions in the country. In value terms, the share is presently
around 11%. This share has been steadily decreasing over a period of time and electronic
mode gained popularity due to the concerted efforts of Reserve Bank of India to popularize
the electronic payment products in preference to cash and cheques.
Since paper based payments occupy an important place in the country, Reserve Bank
had introduced Magnetic Ink Character Recognition (MICR) technology for speeding
up and bringing in efficiency in processing of cheques.
IFSC CODE:
IFSC
IFSC code means Indian Financial System Code. IFSC code is being used as the address
code in one user to another user. RTGS and NEFT payment system of Reserve Bank of India
(RBI) use these codes. IFSC code consists of 11 Characters identified as under (Lets take an
example of SBI, Madhapur Hyderabad):-
First 4 digits show the Identity of the bank. i.e. SBIN
5th digits in default as ZERO (for future use) i.e. 0
Last 6 Characters display the Branch Identity. i.e. 004187
So, IFSC code for SBI, Madhapur in Hyderabad is SBIN-0-004187. IFSC (Indian
Financial System Code) is excellent unique code for International electronic payment system
MICR
MICR code means Magnetic Ink Character Recognition code which contains 9 digits, like
380002006 appearing at the bottom of the cheque, following the cheque number. Each Bank
Branch has a unique MICR code.
One wonders what these codes are and how to make it easy to remember our branch code. If
you are able to understand the code, it becomes easy to remember your Bank Branch MICR
code.
First three digits of the code display the city and is derived from first 3 character of
PIN (Postal Index Number) mentioned in the address of the Branch. For example
PIN code of Hyderabad, Madhapur is 500081; therefore first three digits of MICR
code will be 500.
Digit 4, 5&6 display the bank codes allotted to each bank by Reserve Bank of India.
For example State Bank of India has been allotted 002. Six digits of MICR code
will become 500002
Digit 7, 8 and 9 display the Bank Branch Codes allotted to each branches of bank. For
Example SBI, Madhapur , Hyderabad 500081 branch has been allotted code no. 072.
Therefore 9 digits of MICR code of State Bank of India, Madhapur(Hi Tech), Hyderabad-
500081 will be 500-002-072 i.e. City PIN Code + Bank Code +Branch Code

Question 1 What is Speed Clearing?
Answer Speed Clearing refers to collection of outstation cheques (a cheque drawn on
non-local bank branch) through the local clearing. It facilitates collection of
cheques drawn on outstation core-banking-enabled branches of banks, if they
have a net-worked branch locally.
Question
6
How does the Speed Clearing work?
Answer Banks have networked their branches by implementing Core Banking Solutions
(CBS). In CBS environment, cheques can be paid at any location obviating the
need for their physical movement to the Drawee branch.

Cheques drawn on outstation CBS branches of a Drawee bank can be processed
in the Local Clearing under the Speed Clearing arrangement if the Drawee bank
has a branch presence at the local centre.
Question
7
When will the beneficiary get funds under Speed Clearing?
Answer As on date, the local cheques are processed on T+1 working day basis and
customers get the benefit of withdrawal of funds on a T+1 or 2 basis. 'T' denotes
transaction day viz. date of presentation of cheque at the Clearing House. So, the
outstation cheques under Speed Clearing will also be paid on T+1 or 2 basis.
Cheque Truncation System::
1. What is Cheque Truncation?
Truncation is the process of stopping the flow of the physical cheque issued by a drawer at
some point by the presenting bank en-route to the drawee bank branch. In its place an
electronic image of the cheque is transmitted to the drawee branch through the clearing
house, along with relevant information like data on the MICR band, date of presentation,
presenting bank, etc. Cheque truncation thus obviates the need to move the physical
instruments across branches, other than in exceptional circumstances for clearing purposes.
This effectively eliminates the associated cost of movement of the physical cheques, reduces
the time required for their collection and brings elegance to the entire activity of cheque
processing.
The new approach envisioned as part of the national roll-out is the grid-based
approach. Under this approach the entire cheque volume in the country cleared across
numerous MICR Cheque Processing locations will be consolidated into the three grids
as mentioned in (3) above.
Each grid will provide processing and clearing services to all the banks under its
jurisdiction, Banks, branches and customers based at small / remote locations falling
under the jurisdiction of a grid would be benefitted, irrespective of whether there
exists at present a formal arrangement for cheque clearing or otherwise. The
illustrative jurisdiction of the three grids are indicated below:
New Delhi Grid: National Captial Region of New Delhi, Haryana, Punjab, Uttar
Pradesh, Uttarakhand, Bihar, Jharkhand and the Union Territory of Chandigarh.
Banks
Mumbai Grid: Maharashtra, Goa, Gujarat, Madhya Pradesh and Chattisgarh.
Chennai Grid: Andhra Pradesh, Telangana, Karnataka, Kerala, Tamilnadu, Odisha,
West Bengal, Assam and the Union Territory of Puducherry.
Clearing House Interface (CHI)

The benefits from CTS could be summarized as follows
Shorter clearing cycle
Superior verification and reconciliation process
No geographical restrictions as to jurisdiction
Operational efficiency for banks and customers alike
Reduction in operational risk and risks associated with paper clearing
The set of minimum security features would not only ensure uniformity across all cheque
forms issued by banks in the country but also help presenting banks while scrutinising /
recognising cheques of drawee banks in an image-based processing scenario. The
homogeneity in security features is expected to act as a deterrent against cheque frauds, while
the standardisation of field placements on cheque forms would enable straight-through-
processing by use of optical / image character recognition technology. The benchmark
prescriptions are collectively known as "CTS-2010 standard".
All banks providing cheque facility to their customers have been advised to issue only 'CTS-
2010' standard cheques. Cheques not complying with CTS-2010 standards will be cleared at
less frequent intervals i.e. twice a week up to October 31, 2014 and weekly once from
November 1, 2014 onwards.
RTGS::
Q1. What is RTGS System?
Ans. The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as
the continuous (real-time) settlement of funds transfers individually on an order by order
basis (without netting). 'Real Time' means the processing of instructions at the time they are
received rather than at some later time; 'Gross Settlement' means the settlement of funds
transfer instructions occurs individually (on an instruction by instruction basis). Considering
that the funds settlement takes place in the books of the Reserve Bank of India, the
payments are final and irrevocable.
Q2. How RTGS is different from National Electronics Funds Transfer System (NEFT)?
Ans. NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement
(DNS) basis which settles transactions in batches. In DNS, the settlement takes place with
all transactions received till the particular cut-off time. These transactions are netted
(payable and receivables) in NEFT whereas in RTGS the transactions are settled
individually. For example, currently, NEFT operates in hourly batches. [There are twelve
settlements from 8 am to 7 pm on week days and six settlements from 8 am to 1 pm on
Saturdays.] Any transaction initiated after a designated settlement time would have to wait till
the next designated settlement time Contrary to this, in the RTGS transactions are
processed continuously throughout the RTGS business hours.
Q3. Is there any minimum / maximum amount stipulation for RTGS transactions?
Ans. The RTGS system is primarily meant for large value transactions. The minimum
amount to be remitted through RTGS is ` 2 lakh. There is no upper ceiling for RTGS
transactions.
NEFT::
"NEFT SFMS message" means an electronic Structured Financial Messaging Solution (SFMS)
message containing a batch of NEFT payment instructions for funds transfer, processed and
consolidated in the manner specified for transmission of payment instructions from NEFT Service
Centre to the NEFT Clearing Centre.
"IFSC" means Indian Financial System Code used to identify a participating bank branch in the NEFT
SFMS message.
5. Procedure for Participation
(i) Admission : To be eligible to apply for admission as a participating bank, an applicant
(a) shall be a bank. Regional Rural Banks (RRBs) can also participate through their sponsor bank in
accordance with the guidelines issued by RBI.
(b) shall be a member of the Real Time Gross Settlement (RTGS) System.
(c) shall have installed SFMS.
(d) shall meet the other prescribed eligibility criteria / conditions which are notified by RBI from time to
time (eligibility criteria for the present is indicated in Annexure IV).
(i) Request for NEFT by a Bank Customer / Any Person
(a) A bank customer (i.e. sender or originator) desirous of remitting funds under the system shall
submit an "NEFT Application Form" (to be designed by the participating bank) authorising the sending
bank to debit the sender's account and transfer funds to the beneficiary as specified in the Model
NEFT Application Form (Annexure III). The application could be submitted either in physical form or
electronically.
Q.1. What is NEFT?
Ans: National Electronic Funds Transfer (NEFT) is a nation-wide payment system
facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates
can electronically transfer funds from any bank branch to any individual, firm or corporate
having an account with any other bank branch in the country participating in the Scheme.
Q.3. Who can transfer funds using NEFT?
Ans: Individuals, firms or corporates maintaining accounts with a bank branch can transfer
funds using NEFT. Even such individuals who do not have a bank account (walk-in
customers) can also deposit cash at the NEFT-enabled branches with instructions to transfer
funds using NEFT. However, such cash remittances will be restricted to a maximum of
Rs.50,000/- per transaction. Such customers have to furnish full details including complete
address, telephone number, etc.NEFT, thus, facilitates originators or remitters to initiate
funds transfer transactions even without having a bank account.
Q.4. Who can receive funds through the NEFT system?
Ans: Individuals, firms or corporates maintaining accounts with a bank branch can receive
funds through the NEFT system. It is, therefore, necessary for the beneficiary to have an
account with the NEFT enabled destination bank branch in the country.

The NEFT system also facilitates one-waycross-border transfer of funds from India to Nepal.
This is known as the Indo-Nepal Remittance Facility Scheme. A remitter can transfer funds
from any of the NEFT-enabled branches in to Nepal, irrespective of whether the beneficiary
in Nepal maintains an account with a bank branch in Nepal or not. The beneficiary would
receive funds in Nepalese Rupees. Further details on the Indo-Nepal Remittance Facility
Scheme are available on the website of Reserve Bank of India at
http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf.
Q.5. Is there any limit on the amount that could be transferred using NEFT?
Ans: No. There is no limit either minimum or maximum on the amount of funds that
could be transferred using NEFT. However, maximum amount per transaction is limited to
Rs.50,000/- for cash-based remittances and remittances to Nepal.
Q.6. What are the operating hours of NEFT?
Ans : Presently, NEFT operates in hourly batches - there are twelve settlements from 8 am to
7 pm on week days (Monday through Friday) and six settlements from 8 am to 1 pm on
Saturdays.
Q.7. How does the NEFT system operate?
Step-1 : An individual / firm / corporate intending to originate transfer of funds through
NEFT has to fill an application form providing details of the beneficiary (like name of the
beneficiary, name of the bank branch where the beneficiary has an account, IFSC of the
beneficiary bank branch, account type and account number) and the amount to be remitted.
The application form will be available at the originating bank branch. The remitter authorizes
his/her bank branch to debit his account and remit the specified amount to the beneficiary.
Customers enjoying net banking facility offered by their bankers can also initiate the funds
transfer request online. Some banks offer the NEFT facility even through the ATMs. Walk-in
customers will, however, have to give their contact details (complete address and telephone
number, etc.) to the branch. This will help the branch to refund the money to the customer in
case credit could not be afforded to the beneficiarys bank account or the transaction is
rejected / returned for any reason.
Step-2 : The originating bank branch prepares a message and sends the message to its pooling
centre (also called the NEFT Service Centre).
Step-3 : The pooling centre forwards the message to the NEFT Clearing Centre (operated by
National Clearing Cell, Reserve Bank of India, Mumbai) to be included for the next available
batch.
Step-4 : The Clearing Centre sorts the funds transfer transactions destination bank-wise and
prepares accounting entries to receive funds from the originating banks (debit) and give the
funds to the destination banks(credit). Thereafter, bank-wise remittance messages are
forwarded to the destination banks through their pooling centre (NEFT Service Centre).
Step-5 : The destination banks receive the inward remittance messages from the Clearing
Centre and pass on the credit to the beneficiary customers accounts.
Q.8. What is IFSC?
Ans : IFSC or Indian Financial System Code is an alpha-numeric code that uniquely
identifies a bank-branch participating in the NEFT system. This is an 11 digit code with the
first 4 alpha characters representing the bank, and the last 6 characters representing the
branch. The 5th character is 0 (zero). IFSC is used by the NEFT system to identify the
originating / destination banks / branches and also to route the messages appropriately to the
concerned banks / branches.
Q.10. What are the processing or service charges for NEFT transactions?
Ans: The structure of charges that can be levied on the customer for NEFT is given below:
a) Inward transactions at destination bank branches (for credit to beneficiary accounts)
Free, no charges to be levied from beneficiaries
b) Outward transactions at originating bank branches charges applicable for the remitter
- For transactions up to Rs 10,000 : not exceeding Rs 2.50 (+ Service Tax)
- For transactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Service Tax)
- For transactions above Rs 1 lakh and up to Rs 2 lakhs: not exceeding Rs 15 (+ Service Tax)
- For transactions above Rs 2 lakhs: not exceeding Rs 25 (+ Service Tax)
Q.21. What are the benefits of using NEFT?
Ans: NEFT offers many advantages over the other modes of funds transfer:
The remitter need not send the physical cheque or Demand Draft to the beneficiary.
The beneficiary need not visit his / her bank for depositing the paper instruments.
The beneficiary need not be apprehensive of loss / theft of physical instruments or the likelihood of
fraudulent encashment thereof.
Cost effective.
Credit confirmation of the remittances sent by SMS or email.
Remitter can initiate the remittances from his home / place of work using the internet banking also.
Near real time transfer of the funds to the beneficiary account in a secure manner.



US-Dollar Cheque Collection:
One of the services rendered by banks as part of their normal banking operations is collection
of cheques deposited by their customers, some of which could also be drawn or payable on
banks that are outside the country. Such cheques are called foreign currency cheques
iv. Check-21 Facility : The System has been facilitated under Check-21 Legislation. It works more or
less like CTS. When using check 21 facility, dealings are cleared utilizing the exchange of check
images from bank to bank. It saves time in transit.
Ques. 4 What is a Nostro Account?
Ans. A Nostro account is a bank account established in a foreign country usually in the
currency of that country for the purpose of carrying out transactions there. For example most
commercial banks maintain US dollar accounts with their correspondent banks in USA in
order to facilitate settlement of interbank and customer transactions in US dollar.
(Cooling period is the time up to which banks wait after receiving provisional credit for the
amount of cheque in their Nostro account for possible return of the cheque under provisions
of the laws of USA by the drawee bank, before giving credit to the customers. More details
are available under Question 9.)
Ques. 9 It appears that the cooling period has a major impact on collection time?
Ans. Yes. Cooling period is the time up to which banks wait after receiving provisional credit
for the amount of cheque in their Nostro account for possible return of the cheque by the
drawee bank under the provisions of the US laws, before giving credit to the customers.
Cooling period is dependent on the mode and area of collection and varies from 5-8 days for
cheques in New York area and 15-21 days for other cities collected under CLA mode.
However, under the FCS mode, banks receive final credit in their Nostro account without any
recourse to recall. It does not involve cooling period as this is already factored into by the
CBs before releasing the final credit
Immediate Payment Service (IMPS)
Main article: Immediate Payment Service
Immediate Payment Service (IMPS) is an initiative of National Payments Corporation of
India (NPCI). It is a service through which money can be transferred immediately from one
account to the other account, within the same bank or accounts across other banks. Upon
registration, both the individuals are issued an MMID(Mobile Money Identifier) Code from
their respective banks. This is a 7 digit numeric code. To initiate the transaction, the sender in
his mobile banking application need to enter the registered mobile number of the receiver,
MMID of the receiver and amount to be transferred. Upon successful transaction, the money
gets credited in the account of the receiver instantly. This facility is available 24X7 and can
be used through mobile banking application. Some banks have also started providing this
service through internet banking profile of their customers. Though most banks offer this
facility free of cost to encourage paperless payment system, ICICI bank and Axis bank
charge for it as per their respective NEFT charges.
Nowadays, money through this service can be transferred directly also by using the receiver's
bank account number and IFS code. In such case, neither the receiver of the money need to
be registered for mobile banking service of his bank, nor does he need MMID code. IMPS
facility differs from NEFT and RTGS as there is no time limit to carry out the transaction.
This facility can be availed 24X7 and on all public and bank holidays including RBI holidays.
Comparison
The key difference between RTGS and NEFT is that while RTGS is on gross settlement
basis, NEFT is on net settlement basis. Besides, RTGS facilitates real-time ("push") transfer,
while NEFT involves twelve settlements from 8 am to 7 pm on week days and six settlements
from 8 am to 1 pm on Saturdays. Customers can access the RTGS facility between 9 am to
4:30 pm on weekdays and 9 am to 1:30 pm on Saturday. Thus if a customer has given
instruction to its bank to transfer money through NEFT to another bank in the morning hours,
money would be transferred the same day, but if the instruction is given much later during the
day, money may be transferred next day.
RTGS facility is available in over 72,000 branches across India, while NEFT is available in
little over 75,000 branches of a 100 banks.
Indo-Nepal Remittance Facility Scheme
Indo-Nepal Remittance Facility is a cross-border remittance scheme to transfer funds from
India to Nepal, enabled under the NEFT Scheme. The scheme was launched to provide a safe
and cost-efficient avenue to migrant Nepalese workers in India to remit money back to their
families in Nepal. A remitter can transfer funds up to 50,000 (maximum permissible
amount) from any of the NEFT-enabled branches in India.The beneficiary would receive
funds in Nepalese Rupees.
Electronic Clearing Services ECS::
Q.1. What is Electronic Clearing Service (ECS)?
Ans : ECS is an electronic mode of payment / receipt for transactions that are repetitive and
periodic in nature. ECS is used by institutions for making bulk payment of amounts towards
distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts
towards telephone / electricity / water dues, cess / tax collections, loan installment
repayments, periodic investments in mutual funds, insurance premium etc. Essentially, ECS
facilitates bulk transfer of monies from one bank account to many bank accounts or vice
versa.
Q.2. What are the variants of ECS? In what way are they different from each other?
Ans : Primarily, there are two variants of ECS - ECS Credit and ECS Debit.
ECS Credit is used by an institution for affording credit to a large number of beneficiaries
(for instance, employees, investors etc.) having accounts with bank branches at various
locations within the jurisdiction of a ECS Centre by raising a single debit to the bank account
of the user institution. ECS Credit enables payment of amounts towards distribution of
dividend, interest, salary, pension, etc., of the user institution.
ECS Debit is used by an institution for raising debits to a large number of accounts (for
instance, consumers of utility services, borrowers, investors in mutual funds etc.) maintained
with bank branches at various locations within the jurisdiction of a ECS Centre for single
credit to the bank account of the user institution. ECS Debit is useful for payment of
telephone / electricity / water bills, cess / tax collections, loan installment repayments,
periodic investments in mutual funds, insurance premium etc., that are periodic or repetitive
in nature and payable to the user institution by large number of customers etc.
Q.10. Can ECS be used to transfer funds to Non Resident External (NRE) and Non Resident
Ordinary (NRO) accounts?
Ans: Yes. ECS can be used to transfer funds to NRE and NRO accounts in the country. This,
however, is subject to the adherence to the provisions of the Foreign Exchange Management
Act, 2000 (FEMA) and Wire Transfer Guidelines.
Q.13. What are the advantages of the ECS Credit Scheme to the beneficiary
Ans : ECS Credit offers many advantages to the beneficiary
The beneficiary need not visit his / her bank for depositing the paper instruments
which he would have otherwise received had he not opted for ECS Credit.
The beneficiary need not be apprehensive of loss / theft of physical instruments or the
likelihood of fraudulent encashment thereof.
Cost effective.
The beneficiary receives the funds right on the due date.
Q.16. Is there any limit on the value of individual transactions in ECS Credit?
Ans : No. There is no value limit on the amount of individual transactions.
Bank Wire
Definition of 'Bank Wire'

An electronic message system allowing major banks to communicate various actions or occurrences
regarding client accounts. The wire represents a secure computerized messaging system that sends
account information, notifications and transaction requests between banks.
Investopedia explains 'Bank Wire'

While the bank wire does not affect actual transfer payments, such as a wire transfer, it will provide
the financial institutions with knowledge of such events. For example, the purpose of a bank wire
would be to notify a bank if a client has deposited funds into its account.

Core Banking Solution:

What is Core Banking Solution ?
Core Banking Solution (CBS) is networking of branches, which enables Customers to operate
their accounts, and avail banking services from any branch of the Bank on CBS network,
regardless of where he maintains his account. The customer is no more the customer of a
Branch. He becomes the Banks Customer. Thus CBS is a step towards enhancing customer
convenience through Anywhere and Anytime Banking.
How shall CBS help Customers?
All CBS branches are inter-connected with each other. Therefore, Customers of CBS
branches can avail various banking facilities from any other CBS branch located any where in
the world. These services* are:
To make enquiries about the balance; debit or credit entries in the account.
To obtain cash payment out of his account by tendering a cheque.
To deposit a cheque for credit into his account.
To deposit cash into the account.
To deposit cheques / cash into account of some other person who has account in a
CBS branch.
To get statement of account.
To transfer funds from his account to some other account his own or of third party,
provided both accounts are in CBS branches.
To obtain Demand Drafts or Bankers Cheques from any branch on CBS amount
shall be online debited to his account.
Customers can continue to use ATMs and other Delivery Channels, which are also
interfaced with CBS platform. Similarly, facilities like Bill Payment, I-Bob, M-bob
etc. shall also continue to be available. Bank is in the process of launching Internet-
banking facility shortly.
All these aim to provide convenient, efficient, and high quality banking experience to the
customers, comparable to world class standards.
What are other benefits to the Customers ?
A CBS branch is like a Sales & Service Delivery Center. Back office processes/activities are
handled through technology at some other site, called Data Center. Branch, therefore, has
more time for serving customers. This improves the quality and efficiency of the services
rendered and the customer is directly benefited by way of satisfying and happy banking
experience.
Since a CBS branch is essentially designed to focus on customer-interface and customer
service, the special lay-out and ambience of the branch is made to provide a convenient and
delightful banking experience. The Customer Service Representatives / Executives at the
branch are specially trained to understand, facilitate and deliver banking services efficiently
and effectively.
We wish our customers happy banking.

Core banking
Core banking is a banking services provided by a group of networked bank branches where
a customers may access their bank account and perform basic transactions from any of the
member branch offices.
Core banking is often associated with retail banking and many banks treat the retail
customers as their core banking customers, and have a separate line of business to manage
small businesses. Larger businesses are managed via the Corporate banking division of the
institution. Core banking basically is depositing and lending of money.
Normal core banking functions will include transaction accounts, loans, mortgages and
payments. Banks make these services available across multiple channels like ATMs, Internet
banking, and branches.
The platform where communication technology and information technology are merged to
suit core needs of banking is known as core banking solutions.
Here, computer software is developed to perform core operations of banking like recording of
transactions, passbook maintenance, interest calculations on loans and deposits, customer
records, balance of payments and withdrawal. This software is installed at different branches
of bank and then interconnected by means of communication lines like telephones, satellite,
internet etc.
Communication networks in banking::
.1. BANKNET: The Bank recognised the pressing need to harness information technology
for intra-bank and inter-bank communications in the 1980s5 and set up BANKNET. The
design and implementation of BANKNET was entrusted to M/s. CMC.
Commissioned in 1991, BANKNET is a packet switched X.25 based network with nodes at
Mumbai, Delhi, Chennai and Calcutta, and a switching centre at Nagpur with a mesh
topology. In addition, Bangalore and Hyderabad are connected to Chennai through remote
PADs. IBM 4381 mainframes at the 4 NCCs, connected to nodal Packet Switch Exchanges
(PSEs) through Front-End processors using NCP/NPSI (Network Control Program/Network
Packet Switching Interface), provide messaging facility. BANKNET uses a store-and-collect
transmission logic, provided by the Message Transfer Utility(MTU), in the systems.
User banks access BANKNET through leased lines at the respective local centres using
asynchronous ports on PADs and PC/UNIX machines with COMET (Computerised Message
Transfer and File Transfer) software, developed in 'C'. The Message Transfer Utility enables
400 users to login at a time at each IBM node.
7.5.Various message format templates, similar to SWIFT formats are available in COMET.
Message formats for funds transfer applications such as TT issue, TT Purchase and TT
Confirmation, Bank transfer on own account, Bank transfer in favour of a third party, etc. Are
navailable. Similarly several message formats for critical data transmission activities such as
reporting weekly statement of accounts, daily and monthly balances of Government accounts,
agency transactions in Government accounts, transfer responding advices, foreign currency
rates, advice of cheques for collection, balance queries, inter-city advices etc. too are
available.
7.6.BANKNET usage, however, fell far below expectations. The main reason for this was
that BANKNET was far ahead of its time in the sense, that a critical mass in computerisation,
change in work procedures necessitating the use of communication technology had not been
reached at the user end. The users did not, therefore, feel the necessity to make use of the
network resources. Coupled with this was the high rate of leased line failure of both the inter-
city and intra-city data circuits. Another crippling factor was the reach of the network, which
was limited to the number of BANKNET ports which a bank had. This essentially meant that
the exchange of messages was limited to these nodes. The improper location of these ports at
the banks' end was also an additional factor. The limitations of the COMET application
software, which did not permit file transfer was yet another factor.
7.7. RBINet: RBINet, a communication software, developed in 'C' and available for both
DOS and UNIX machines, allows free format messaging and file transfer on the existing
BANKNET infrastructure with the help of UNIX servers installed at the 4 NCCs. Each
RBINet user interacts with the local UNIX server through PADs connected to the X.25
switch. The UNIX servers in turn communicate with each other using TCP/IP over the X.25
protocol. The software allows free format messaging without any restrictions on the length of
the message, nenables file transfer of both ASCII-text and Binary (spreadsheets, data bases,
programs etc.) files, facilitates dial-up access, and has security features such as end-to-end
encryption, audit trail, etc.
7.8. RBINet is also being used by several Departments of the Bank for various applications
such as (i) transmission of Sec 42(2) of the RBI Act, 1934, data by commercial banks to n
Regional offices of Department of Banking Operations and Development (DBOD) and
furnishing of consolidated data by the Regional offices of DBOD to Central DBOD; (ii) Press
Relations Division daily news summary of important financial matters; (iii) Department of
Economic Analysis and Policy Macro Economic Indicators on a weekly basis.
7.9. Society for Worldwide Inter-bank Financial Telecommunication (SWIFT) : India was
the 74th country to join the Society for Worldwide Inter-bank Financial Telecommunication
(SWIFT) network on December 2, 1991. The initial membership of Banks in India was 34.
Using advanced data-processing and telecommunications technology, the SWIFT system is
based on the following features:
it is available worldwide, 24 hours a day, 7 days a week;
standard message formats for transactions enable members to avoid language
and interpretation problems and permit the automated handling of messages;
delivery of a message is very 'swift';
ensures a high level of security while transmitting all messages;
assumes financial liability for the accuracy, completeness and timely delivery
of all validated messages.
7.10.Each country has a SWIFT gateway called the SWIFT Access Point (SAP) to which the
individual users' terminals are connected. The users are connected to the SAP through leased
lines with PSTN as backup. The SAPs are connected to the Regional Processors, which in
turn
are connected on-line to mother operating centres in the USA and Netherlands from where
the
messages are distributed to the ultimate destination address indicated in each message.
7.11.SWIFT has 9 types of Standard Message Categories. Each broad Message category has
various message types for specific uses. A majority of the forex related messages are sent to
correspondent banks abroad through SWIFT.
INDONET:
The INDONET network was made operational in March 1986. The thrust areas
of the company
were to:
A. Create the infrastructure for a network and promote a "network culture"
within the country.
B. Create a "software library" so that specialized users could afford to use
software
C. Provide a platform for developing software
D. Develop in-house expertise in networking and disseminate information to the
computing professional arena through training programs, seminars etc.




Insider Trading
Definition of 'Insider Trading'

The buying or selling of a security by someone who has access to material,
nonpublic information about the security.
Investopedia explains 'Insider Trading'

Insider trading can be illegal or legal depending on when the insider makes
the trade: it is illegal when the material information is still nonpublic--trading
while having special knowledge is unfair to other investors who don't have
access to such knowledge. Illegal insider trading therefore includes tipping
others when you have any sort of nonpublic information. Directors are not the
only ones who have the potential to be convicted of insider trading. People
such as brokers and even family members can be guilty.

Insider trading is legal once the material information has been made public, at
which time the insider has no direct advantage over other investors. The SEC,
however, still requires all insiders to report all their transactions. So, as
insiders have an insight into the workings of their company, it may be wise for
an investor to look at these reports to see how insiders are legally trading
their stock.