CHAPTER

ROLE

Introduction

The

origin

bank

also

of

kind
of

meaning
means

of

of

Barcelona

1407

respectively

indication

of

obtained

balance

the

are

bank

home

branch

and

the

is

internet,

dimension
being

no

and

metrics

of

genoa

such

as

financial
has

brought

delivery

most

the

The

information

customer
ease

transaction

and

on
and

the

scale

credit

technology

of
per

bank

technology

efficiency

institution

The

in1401

and

business

An

concern

assets,

may

called

the

shift

in

the

visit

to

done

branch
has

added

which

growth
a

today

is

process
increased

judged

according

of

different

and
The

be

the

anything

available

customers
can

from

for

driver The

automation

business
account

be

(IT)

driving
to

required

can

a business

acquisitions,

bank

services

the

communication

The

paradigm

transactions

enabler, but

one

other
and

banco

change

business

business

is

language

established

complete

visit

to

word

bank

adopted

banking

any
a

banking

word

used

liabilities

banking

not

an

and

of

of

of

every

need

deposit

of

statement

when

impact

position

The

German

banking
were

like

Italy

Italians

public

business

its

and

longer

penetration

their

bank

Today,

delivering

transact

the

changers

the

days

efficiency,

money

and

examing

in

the

first

banking

leveraged

which

the

mobiles

to

SECTOR

in

The

which

was

customers

Technology

from

1157,

banks

the

Italy

in

the

of

heap

is

traced

from

or
and

is

from

derived

another

sheetTechnology

functioning
Gone

at

Banking

by

era,

originated

mound

into

modern

been

bench

founded

the

have

money

Venice,

in

have

bank

be

to

to

BANKING

& Meaning

banking,

seems

supposed
which

OF TECHNOLOGY IN

1.1

banck,

from
to

the

RBI

data

was

and

INR84,

618

INR258,

751

and

times

10

started

in

adoption

of

2000

2009,
the

banking
the

INR
these

in

1990s

operations

completed

and

20,

757

metrics

1992Many
or

early

solutions
in

the

of
2000

(CBS),
CBS

transformation

to

in

1992

increased

respectively,approximately

levels

late

core
of

6,412

in

in

the

centralization
the bank

INR

Over

to

thrice
the
with

IT

INR19,

INR59,

the

levels

initiatives

an

automation
the

and

last

technology-driven

emphasis
of

898

217

and

in

2000

of

banks
on

the

branches

and

decade,

most

of

organizations

Moving
with

from

automated

adverse

manual,

scale-constrained

environment

systems

and

it

scenario,

the

simple

deposit

or

banking

and

online

bill

have

almost

Branches

are

also

into

The

change

in

has

risk
being

banks

and

business
any

from

the

India

in

possibly
which

with

it

have

level
the
the

of
of

in

foreign

the

trends

visit

transaction

bringing

to

be

more

of

information

making

With

shifting

to

branch

processing

to

the

like

operations

in

Indian

technology

Indian
they

get

India,

which

is

isolation

banks
into

is

sector

last

With

is

beneficiary
international
includes
banks,

variations

useful

to

internationally

as

The

article

IT

present
up

or

general

sector

these

it

in

lot

Private

where

away

and
the

one
nearly

technology,

remaining

The

banks,

IT

isolated

relate

established

the

remain

spender

newly
the

it

making

to

Financial
to

regional

difficult

competitors,

industry

banks

decision

Information

largest

the

is

such

untenable

time

of

over

developing,

of

Better

real

optimize

world

country

increase

computerizing

trying

its

Information

most

and
or

an

and

toward

trends

in

competitive

moving

banking
all

when

banks

endeavours

and

with

as

to

are

is

This

position

perception

for

area

is

Indian

customers

markets,

over

technology
in

service

the

particular

computerized

comparative
banks

For

trends

banks

information

utility

developed

edge

technology
the

and

globalization

around

world

vendors

is

in

with
fully

focus

particularly

the

mobile

decision

emerging

industry

all

account
see

of

ATMs,

efficiency

small,

an

day

for

when

hubs

promising

definitely

information

trends

or

to

reforms,

the

require

operating

software

the

envisage

would

need

addition,banks

happening

More

banking

from

big

most

has

and

In

intelligence

is

uniformity

the

to

presence

the

from

for

difficult

global

before

centralization

data

era

productive

to

createdWith

what

impossible

the

due

critical

nation

the

operational

(RRBs)

infrastructure

of

very

is

facilities

management

technology-enabled,

rural

for

and

of

payments

been

the

cash

transforming

management

availability

in

of

obviated

relationship

productivity

was

withdrawal

providers
points

sector

processes,

to

gradation

take

also
All

in
to

starts
the

trends

in

status

IT

of

Indian

1.2.A

are

usage

and

peripheral

of

Of

equipment,

recent

past

industry,

where

through

with

2003),

less

to

see

their

relevance

to

the

seen

most

the
now

(IT),

introduction
security

can

broadly

tremendous

obvious

provide

In

of

referring

growth

example
IT

India

in

is

to

service

perhaps

related

computers
industries

the

products

banking

in

internet

investments,

information

exchanges

more

services

customers

diverse

to

manpower

Technological
applications

in

Outstanding
and

has

payments,

banks

1.2.B Phases

distinct

technology

The

electronic

(Berger,

discussed

Banking Technology

information

the

banking,

then

banks

Evolution

The
in

sector

of

innovation

in

particular,

have

IT-based

periods:

their

Banking Technology

early

periods

Early

adoption

Specific

Emergence

Diffusion

general
had

innovations

are

adoption,

specific

based

on

Indian

and
major

in

India

information
effect

considered

and

application,

scenarios

in

technology

banking

and

grouped

emergence

and

(IT)
finance

into

four

diffusion

are

(1960-1980),

application

(1980-1990),

(1990-2000)
(2000-till

12.C Technology

and

date)

Based

characteristics

in

Banking

Services

and

their

India

1. 3

Literature Review

The

following

indirectly
Dr

studies

have

BS

been

technology

paper

of

Indian

to

of

transactions
various

to

MICR,

Mangnale,
Banking

JV

Sector,

ultimate

of

have

to

strive

CRM

is

the

of

the

concept

covering

the

and

the
latest

for

of

e-CRM

specifically

its

competitive
in

and

the

in

this

in

Indian

need,

and

corporate

direction

present

etc

paper

Dr
in

VS

Indian

highlights

on

which

that

hinges

environment

the

satisfaction
driven

their

is

This

its

and

its

banks

base

E-

perceived

as

paper

various

status

of

era,

customer

and

banks

from

technologies

E-CRM

sector

by

banks

process,

through

technological

enlarging

and

convenience

elements

upon

growth

various

economic

depends

and
allows

NEFT

This

three

efficiency,

technology

about

the

Efficient

overall

62

Randive,

the

bank

to

RTGS,

Thoughts

retaining

tool

talks

fast changing

buzzword

effective

AD

are

the
of

emerging
hard

Mr

customer
in

also

in

leverage

and

faster

unparallel

system,

Research

performance

In

one

Chavan,

banking

customers

paper

transaction

Golden

people

the success
The

Cheque

offer

sector

productivity

that

Banking

optionally

provide

highlights
and

to

or

Bhosale,

Indian

banking

contribute

directly

Tanaji

in

need

their

related

Satish

of

banks

services,

It

This

Dr

role

thereby,

faster

channels

Ms

technology,

place

the

improve

and

sector,

Developments

and

country

take

chapter

So

penetration,

the

delivery

like

Economy

service

banking

this

about

products

customer

development

talks

increase

cost-effective

convenient

in

in

Technological

This

development

technology

reviewed

Sawant,

Sector

deliver

on

analyzes

dimensions

future

prospects

KPMG,
Technology

enabled

Banking

Technology

banking

is

transformation

fast

Conclave

evolving
the

industry,

of

banking

the

face

looking

to

leverage

opportunity

their

available

Banking,
The

enabling

Information
in

the

existing
to

in

2011:

From

in

change
The

transformation

next

strengths

these

article

The

Economic

has

concluded

banking
technology
few
in

entrants

services
holds

years
the

New

Indian

through

to

Times
the

in

driving

promise
entrants

to
are

banking

arena

leveraging

their

understanding
innovative
value
to

of

technologies

business

The

pace

direct

models

of

their

with

change

strategies

and
a

aided

to

markets

with
by

they

focus

regulatory

customer

operate
on

in,

promises

delivering

customer

directions,

centric

focus

will

over

push

the

banks

next

four

years

1.4.A SIGNIFICANCE
The use of Technology
a

deep

reality

its

traditional

its

key

among
high

The
role

areas

levels

With

that

local

areas

the

on

they

are

adoption

of

yet

there

respect
a

not

great

lot in

to

They

this

helps

an
to

the

longer

focus

and

banking

an

banking

sector

increasingly
risks

big

possible

for

across

It

banks

has
to

are

increasingly

branches

in

city

role

in

liquidity

assumed

but

are

exposed

to

now
and

have
as

instant,
of
to

such

their

on

anything

and

of

this

and

more
to

has

their

formulated

IT

issues

international
aspect

The

their

to

other

setting

up

number

The

demanding

now

counterparts

anywhere
many

the commercial
the

also

growing

become

address
at

compared

India

working

the banks
more

is

beyond

interconnecting

infrastructure

need

and

manage

network

overall

go

important

high-speed

Bank

to

preference

way

sectors

basis

banks

demand

urgent
with

in

techno-savvy

Reserve

the

securitization,

expectations

more

compete
need

which

high

IT in
is

only

networks

yesteryears
Though

no

financial

playing

as

IT

of

enabled

now

revolution,

also

facilities

is

STUDY

spheres

a standalone

and
have

has

is

locations

customers
as

it

systems

geographic

sector

which

technology

computer

all

operation

to

implementations

in

and

of

others

OF THE

of

banking

policies

banks
involved

in

on

India,

in

this

level As

such

there

is

present

study

helps

regard

1.4.B Objectives

Of The

Study

The study has

To

find

banks

of

To

out

banks

of

To analyse
To

the

progress

of

computerization

the

banking

innovations

in

all

the

public

sector

sector

after

computerization

of

public

India
the ATM

identify

public

objectives:

India
analyse

sector

following

progress

challenges

banks

of

in

in

the

the public

sector

implementation

of

banks
IT

of

India

solutions

in

the

India

1.5 Awards
The

process

Banking

for

the

Technology

discuss

and

chaired

by

was

finalize
Mr

Ninth

initiated

the

KV

Edition
in

award

Kamath,

of

IDRBT

March

2013

categories
Chairman,

Awards

The
ICICI

with
jury
Bank

for
a

Excellence

jury

for

this

and

meeting
year

comprised

in
to
was
the

following:

Dr

Dr

Ramakrishnan,

Prof

Dr

Barman,

Former

Executive

CEO,

IBA (Jury

G Sivakumar, IIT Mumbai

Santanu

The awards

Paul,

categories

CEO, Talent

for

the

Director, RBI

(Jury
Sprint

previous

1.

Use of Technology

for

2.

Use of Technology

in

Member)
Member
and

year

Distinguished

were as

Financial
Mobile

(Jury Member)

Fellow, IDRBT

follows:

Inclusion

Banking
8

Three

3.

Electronic

Payment

4.

Customer

Management

5.

Use of

6.

Managing

7.

IT Innovation

8.

Best IT Team

9.

Best IT enabled

new

IT for

Optimization,

encourage

the

not

provided substantial

Optimization

also

cooperative

was

introduced

category

Business

were
IT

bank

& Business

Intelligence

Initiatives

Optimization

IT Risk

categories

Business

Systems

and

Cooperative
introduced

Bank
this

Innovation and
banks
During

one

hence

evaluations
for

decided

CHAPTER

year

Best

award

nominations

(one award)

to

for

IT

Team

Best

IT

the

jury

Use

of

drop the

Use

of

IT

Additionally

for
to

enabled cooperative

felt
IT

category

that
for
for

banks

had

Business
this

year

II

NEED

&

IMPORTANCES

OF TECHNOLOGY IN

BANKING
2.1

SECTOR

Introduction

Technology

has

banking

industry

out

more

to

helps

them

With

customers

we
etc

boon
the

function

customers)
banking

been

our

bank

everytime

an

are

banking

all

wanted

industries

of

technology

provide

better

Cash

and

deposit
of

much

easier

to

check

and

banks
services

secure

especially
to

to

them

Also,

As

for

having

balance

or

reach

us

make

phone

which

to

run
a

it
(the

banking,

advances

Imagine

your

the

able

online

technological

to

are

way

machines,

fruits

experience

you

many

organized

ATMs,

which

made

help
and

in

have

to

have

to

deposit

the
or

withdrawal
The

following

points

prove

the

importance

of

has

experienced

technology

in

banking

industry:
The
to

Banking
the

advent

banking

of

system

information
in

sector

the

in

technology
The

and

automation

advancement

technology

played

in

rapid

there

is

a new

technology

significant

role

transformation

and

in

in

the

introduction

of

improving

trend

Due

the

services

industry.

2.2

Computerisation

The

process

initiatives
started

India

in

with

branches,
Automation

of

in

computerisation

the

banking

installation

especially
was

banking

in

of

at
use,

marked

industry
simple
high

beginning

Computerisation
computers

traffic

which

the

did

to

automate

branches
not

of

of

all

bank
the

Thereafter,

involve

bank

technological
branches
functioning

had
of

Total

Branch

level

branch

10

networking,
branches

are

Banking
so

and

to

branch,

undertaken
(CBS)

is

the

customers

regardless

of

which

of

branches

the
in

under

technological

the

the

ensure

of
their

branch

he

opened

enables

internet

service

branches

accounts
the

of

from

account

bank,

any

bank

with

The

data

management

mobile

banking

Besides,

operations
in

of
the

banks
Indian

under

and
CBS

banking

of
Core

centralized

and

implementation

customer

the

operate

of

customer. Networking

better

to

complete

platform CBS

to

networking

CBS

implementation

bringing

much
to

the

in

still

mean

enable

networking
helps

not

now

Solutions

as

aids

did

single

industry

is

underway.

The

vast

primary

geographical
reason

spread

for

implementation

the

Technology

sector

through

banks

have

an

sector

bank

branches,

has

in

branches

of

banks

charged

while
this

978

the

inability

computation,
edge

of

the

new

regard

percent

are

in
to

face

private

Among

country

attain
of

Indian

banks

total

at

end

the
CBS

banking

and

number

computerized

is

complete

the

sector
the

fully

the

foreign

of

public

March

2012.

2. 3

Satellite

Satellite
Indian

banking
banking

of

weak

use

of

banks

Banking

is

satellites
reach

for
rural

and
in

involves

very

costs

it

connectivity,
and

the

high
would

if

under

the

is

links

be

to

banks

banked

use

in

areas
to

the

bearing

to

help

many

connectivity

hilly

relation

technological

expected

establishing

particularly

RBI,

upcoming

communication

facilities,
by

an

industry, which

terrestrial

to

also

parts

between

of

country

the

branches

way,

electronic

funds

transfers

part

it

for

of

the

connecting

and

the

leased

rentals
north

will
offer

proposal
for
eastern

The
help
better

However,

under
the

the

the problem

better

Hence,

in

solving

banks

in

in

innovation

this
made

satellite
states

districts

11

2.4

Automatic Teller Machines

ATMs

were

initiated

introduced

by

foreign

to
banks

players

suffered

branch

network

ATM

this

handicap

overcome
initial

and

in

receptiveness
now

has

also

as

machine,

and

customer

a day The

This

is

is

plastic

card,
and

customer

wants

to

the

slot

of

the

customer

the

finding
the
ejects

the

device

that

customer

use

personal
the

card,

of

his

the
be

personal

withdrawn
to

him

the
by

this

the

lower

Since

then,

customer
have

also

Development
transaction
is

of

costs,

an

electronic

make

deposits,

in

name

machine

improvement
24

is

ATM

number

follows

account,

hours

provides

access

for

financial

his

the

teller

is

account

by

to

cardholder

is

When
the

in

machine,
to

the
enter

that

transaction

and

slot

of

ATM

give

the

ATM

completed,

in

the

card

establishing

customer

machine

transaction

is

plastic

After

output

transaction

card

(PIN)

processing
the

This

Each

recognized

bank

at

customer

the

strong
partially

and

step

insert

his

his

to

to

to

has

automated

to

himself

he

An

access

ATM

number

card

have

resource

identification

customers
can

the

customers

him After

When

sector

banks

lowering

to

private

card

by

in

networks

is

1990s

of

way

ATM

available

card

the

long

ATM

early

services

sector

identification

customers,

balances

cash

the

customer

read

free

Public

for

bears

be

machine After

sufficient

required

can

hassle

an ATM

which

means

customers

transactions

issued

lack

the

channel

is

time-

to

of

the

facility

secret

enters
to

by

financial

customer

amount

operated

some

manifold

marketing

that

come

leveraged

and

the

as

out

expansion

in

used

offering

increased
only

at

was

have

industry

banks

handicap

technology

ATM

with

foreign

and

not

coded

authentication

costs

other

banking

reaching

for

is

provided

the

by

service

magnetically

serious

effective

which

withdrawals
in

an

Most

race

is

Indian

technology

also

the

networks

but

ATM

entered

ATM

from

transaction

innovations

the

is
a

make

public
cash

computerized
place

The

withdrawals

12

and

check

money

balances

from

Apart

from

one account

to

these

another

functions
and

ATM

can

facilitates

request for

to

transfer

cheque book

2.4.A Introduction of Biometrics

Banks

across

enabled
large

the

with

country

biometric

proportion

technology

as

Development
channels
provides

of

biometric
however,

the

ATMs,

tap

population

in

urban

the

scope

of

face,

especially
for

the

is

made

by

fingerprints,
their

to

the

biometrics

system,

linking

eyes

or

setting

of

the

use

illiterate
is

service

population

Though

expanding
Some

rapidly

It

verification

to

large

banks

of

scale

introduction

of

steps

towards

large

for

rural

banking

At

the

industry

adopted;

the

high

costs

delay

to
in

be

adopt
illiteracy

first
yet

self

credentials

voice

not

scale
of

ATMs

markets

does

large

the

up

rural

centers

due
to

of

potential

such

has

respect

security

the

centers

technology

process

level,
involved

adoption

Multilingual ATMs

Installation

of

for

large

many

aimed

to

with

technology

accounting

the

viable

have taken

this

2.4.B

the

biometric

better

of

the country

as

install,

for

started

technology
the

ATMs

to

recognition

largely

fast

like

expensive

of

have

at

the

multilingual ATMs
banks

in

the

rural

banking

has

also

country
business

entered

This

pilot

implementation

technological

believed

to

innovation

have

large

is

stage
also

untapped

13

potential

The

impediment
lack

of

language

to

the

diversity

active

knowledge

of

of

India

adoption

of

has

new

proved

to

technology,

be

major

restrained

by

the

English

2.4.C Multifunctional ATMs

Multifunctional
but

have

other

ATMs

already

banking

besides

recharges,

ticketing,

to

are

being

become

acting

been

services

functions,
that

are

explored

are

the

respective

different

banks,

switches

of

bank

can

customer
charge
its

be

used

fee

for

Cashnet

Mitr
to

operation
Switch,

and

Visa
for

has

or

waived

to

account

of

banks
the

from the

to

connect
In

are

India,

to

access

perform

information

relatively

which

have

other
Mobile

new

areas

the

potential
besides

by

effecting

sales,

service

additions

to

the

ATM

regulator

switches

banks

the

ATM

are

required

that

connect

of

current

mechanism,

MasterCard

Switch

gateways

IDRBT,

the switching

of

network

Financial
which

technology,
other

customers

ATM

accounting

connect

ATMs

the

the

to
this

the

National

to

Through

allowing
various

the ATMs

order

the

banks,

the

Most

Under

the

equipped

in

Switches

at

convenience

are

multifunctional ATMs,

level

individual

means

advertising

for

banks

effective

and

banks

apex

ATMAmong

linked

used

ATMs

most

very

payment,

approval

ATM

providing

channels

Network

of

as

by

and

via

2.4.D ATM
switches

introduced

cash

generators

specific

be

Multifunctional

bill

delivery

route require

to

recognized

dispensing

revenue

as

yet

In

banks,

networks
the

cards

owning

other

bank

switches

are

CashTree,

Most

ATM

switches

order

to

reduce

the

the

National

effect from

December

of

various
of

facilitating

banks

some

administers

fee with

ATM

platforms

one
better

the ATM
to

access
BANCS,

are

also

cost

of

Financial
3,

2007

14

2.5 Internet

Banking

Internet

banking

in

Internet

banking

services

banks

second
to

includes

conducted

Transactional
added
The

guidelines

number

of

According

to

internet

to

the

bankingInternet
supervised
of

Indian

satisfying
banking

banks
the

means

levels

The

first

level

is

only

queries

Websites,

and

fund

poses

high

Simple
to

be

three,

offering

Fully

transfers

and

various

value

security

internet

operations

and

Under

level

of

banking

the

customers

allowed

operational,

development
related

are

of

handled;

enables

enquiries

transactions

for

are

which

balance

allow

guidelines,

are

all

currency, but

legal

and

legal

in

India

banking
in

India

issues

to

covers

be

addressed

be
a

banking

services

now, even

foreign

exchange

services,

through

internet

supervisor

can

offered

physical

allowed

conducting

internet

transactions,

can

having

host

three

banking

underlying

India,

2000s

reached

security

banking

in

early

based

internet

local

permitted

the

has

the

earlier

in

from

India

banking

governing

be denominated
the

in

which

technological,

relation

fund

restrained

only

wherein

applications

banking

has

in

roots

Transactional

no

services Internet
This

for

online

Websites,

risks

in

website,

Websites,

Internet

taking

offered

Simple

instructions,

Transactional

began
are

informational

level

give

India

to
in

be

only

in

undertake

financial

by

presence

addition

offered
banks
India

internet

to

the

transaction

licensed

Overseas

banking

home

through

had

to

and

branches

only

after

supervisor

Internet

website

Internet

banking is also known as online banking

In

Internet

banking

serverInternet
web

banking

banking

payment,

consumers

shop

It

is

provides
online

connection

and

user

Consumer

can

operate

from

any

also

personal

computer

bank
at

access

as

account
any

time

online

in

large

their
cyber,

like

growth
up

to

virtual,

services

Rapid

opened

their

an

known

various

etc

has

have

the

with

net,

trading,
for

anywhere
an

through

interactive,

number

market

from

account

online

a
or
bill

of

Internet

internet

banking

in

internet

the

world

connection

15

Internet

banking

banks

enables

website

general

on

the

information

less

bringing

customer

Internet

on

sitting in its office

or

a
bank

to

It

do

is

products

banking

system

and

way

bank

statement
banking

computer

through

sophisticated

through

to

your

computer

In

of

Now

accounts
one

website

etc

can
of

multi-layered

Phone

Customers
by

dialling

now

his

but

operate

bank

the computer
and

for

simple

non-cash
are

exist

such

type

and

be

limit

which

and

India

based
a

re

allowed

services

financial

one

has

changed

transactions

secure

the

on

encrypted;

firewalls

his
using

and

filters

and confidential

can

be

institution

telephone
get

the

machine

number

and
the

customer

the

via

of

Indian
on

this

Voice

service

the

banking

industry

and

Response

for
entire

banking
There

quantum

banking

System

by

(AVR)

do

Phone

Phone

with

terminals

Anytime

he

banks

required

actually

type

route

to

recorder

phone
can

and

interactive

voice

manned

Anywhere,

for

number

connectivity

Automatic

restrictions

to

balance
and

2500,
the

draft

offer
offered

which

enquiries,

funds

overall
in

mobile

cap

allows

of
on

India
banking

Telephone
its

transaction

transfers

guidelines

supervised

to

in

using

telephone:

cheques

Rs
to

in

while

of

channels

(IVRS)

or

enquiries,

stop

amounts

(per

the banks.

on

of

licensed

By

and

limited

customer) According
are

on

to

the code

Interactive
of

are

instructions

dial

undertaken

an

executives

transaction

computer

has

are

including

able

provided

phenomenon

can

transactions

be

transactions,

guidelines

that

will

transactions

banking

through

payment

of

transactions

banks designed

him

and

recent

operative

the

him to

queries

telebanking

and

banking

banking

these

architecture,

software

answers

relating

function

The

asking

fairly

up

number

queries

transactions

The

ID

suitably

complicated

accounts

cash or deposit a cheque or

internet

all

All

security

dial

computer

him

the

Banking

can

designated

traditional

One can be rest assured that ones transactions are

2.6

accessing

through

or home This is also called virtual banking It is more

the

of

of

services

to approach the branch in person, to withdraw

request

transactions

of

Rs

5000

mobile

and

have

services

banking

is

customers

small

per

banking,
a

day
only

physical

Besides,

service

to

perform

per
banks

presence

only

rupee

provided

by

transactions

16

over

the

telephoneMost

answering
To

system

guarantee

numeric

or

offers

account

verbal

Usually,

obvious

virtually

all

the

centre

transfers
a

purchases

and

change

of

telephone

card

are

services

holders

mobile

potential

to

required

Mobile

etc)

payments,
Personal
internet
The

automated
latest

is

live

deposits,

teller

machine:

not

located

loan

bill
in

guaranteed

transactions
to

do

or

a
be

earlier,

what

was

investment

card

mostly

to

listed

applications,
debit

operate

and

representative

orders,

which

by

etc

trained

branch:

capability

transactions,electronic

accounts,

live

asked
75

phone

through

withdrawals

feature

chequebook

replacements,
exclusively

by

banks.

are

penetration

in

by

used

credit

be

restricted

KYC

and

the

mass

the

bank

AMC

country,

banking

banks

to

mobile

channel,

However,

more

be

conducted

(also

known

as

M-Banking,

performing

applicationsetc

Digital Assistant

(PDA)

via

balance
a

Mobile

mobile
banking

and
the

banking

with
security

can

for

account

compliantWith

banking

banking

term

to
are

before

channel

an

usually

the

which

become

addressed
is

at

phone

questions

self-service

are

authenticate

cash

this

the

Banks

as

to

recognition

of
of

automated

BANKING

banking

investment

etc

known

growing

be

only

address,

account

to

redemptions,

2.7 MOBILE
Mobile

speak

representatives

available

first

a customer's

although

addition

banking

traditionally

also

branch,

In

list

between

can

of

an

voice

security

exception

and

or

must

through

features

information

or

24/7

telephone

or

use

response

customer

password

customers

offered

the

the

funds

banking

keypad

With

balance

payments,
call

withphone

security,

representative
it

telephone

more

facility

minimum

issues

need

freely

an

to

via

this

Banking

transactions,

such
is

the

very

account

device

rapidly

has

mbanking,SMS

checks,

credit

as

or

extension

of

banking

bank

is

in

service

For

this

enabled

These

association
service,

facilities

with

mobile
are

the

cellular

phone

available

should

even

to

service
either
those

providers
be

SMS

customers

offers

this

or

WAP

with

only

17

credit

card

Banking,
balance
as

via

accounts

mbanking,
checks,

mobile
SMS

called

architecture

bank

Banking

Mobile
etc)

transactions,

is

Mobile

banking

today

the

Mobile

Internet

but

downloaded

of

mobile

can

to

the

banking

(also

known

used

for

payments

phone

banking

Account

the

SMS

account

or

clients

Mobile

with

etcvia

(2007)
can

mobile

term
a
is

also

devices

mobile
most
use

Below

as

M-

performing
device

such

often

performed

special

programs

Fig

explains

the

banking

offer

services

and

checking

such

as

the following:

Information

Mini-statements

Alerts

Monitoring

of

Access

to

loan

statements

Access

to

card

statements

Mutual

funds

Insurance

Pension

Status

Ordering

check

books

Balance

checking

in

Recent

transactions

on

account

on

or

account

passing

of

history
set thresholds

term deposits

/ equity

policy
plan

activity

of

statements

management

management

cheque,

stop

payment

on

cheque

73

the account

18

Due

date

of

payment

(functionality

for

stop,

change

and

deleting

of

payments)

PIN

Blocking

Payments,

Domestic

Micro-payment

Mobile

Commercial

Bill

payment

Peer

to

Withdrawal

at

Deposit

banking

Investments

Portfolio

Real-time

Personalized

Support

Status

provision,
of

(lost,

and

stolen)

over

the

Internet

fund

and Transfers
transfers

handling

payment

at

processing

processing
payments
banking

stock

Exchange

services

quotes

alerts

of

agent

agent

management

and

requests

notifications

for

credit,

and

card

on

security

including

prices

mortgage

approval,

and

coverage

(cheque)
of

book

data

messages

and

requests
email,

including

complaint

submission

tracking

ATM

Content

Services

General

information

Loyalty-related

offers

Location-based

services

attractive

reminder

cards

international

Peer

Check

on

and

recharging

Based

PIN

Deposits, Withdrawals,

insurance

and

Change of

Location

survey

mainly

to

such

as

updates,

news

74

conducted
the

weather

younger,

by

Forrester,

more

mobile

"tech-savvy"

banking

customer

will
segment

be
A

19

third

of

mobile

kind

of

financial

users

are

account

Mobile

fully

performing

making

bill

exploit

this

technologyeven

low

mobile
for
of

which

adoption
on

mobile

varied

languages

Most

mobile
limits

the

applications,this

in

compared

basic

for
the

base

of

consumers

are

of

consider

mobile

phone

transactions

transactions

to

mobile

banking,

performing
But

such

most

as

some
of

the

querying

for

their

in

India,

existing

number

of

more

than

900

not

adopting

channel

as

non-replication

of

banks

are

customers.
bank

mobile
for
mobile

The

accounts

million.

yet

current
and

the

of

the

Some

banking

to

include

the

banking, limitations

of

banking

services

in

India etc.

banking

applications

customer
may

their

may

payment

m-banking

subscriber

they

Architecture

in

is

that

through

rise

services

also

and

say

this

reasons
lack

in

banking

penetration
vast

users

transaction

interested

balance

Despite

phone

base,

change

but
in

are

designed

with
coming

the

for

smart

introduction

years.

Most

phones,
of

which

USSD-based

mobile

banking
20

applications
base,
in

are

but

with

coming

Mobile

In

Therefore,

be

there

which

is

a
like

etc

with

to

USSD

to

have

been

various

banking

space

telcos)

and

including

markets.

inclusion

India

accounts,
unbanked

in

Financial

deposit,

micro-finance

the

applications,this

customer

may

change

section

of

of

advanced

and

on

mobile

applications,

mobile

browser,

cater

to

mobile

are

available

to

various

on

capabilities
low-end

solution

technology

investments

banks

strategic

services
USSD

India

segment

at

etc

tablet

high-end

while

to

offer

platforms

like

phones

tablet

same

time

offer

the

having

its

Bank

reducing

and

java

based

phones

population

start-up

in

(nearly

the

mobile

(like

Mobile

Payment

System

emerging

in

etc)
of

costs

the

key

and

correspondent

remittance
)through

year

models

some

business

customers

past

(NUUP),

lowered

as

the

partnership

(Inter

has

by

over

Platform

Services,

the

paucity

make

Banking

to

capabilities

withdrawal

facilities

follows:

developments

Unified
M

as

for

new

products

National

financial

limits

work.

the

processing

Indian

also

not

processing

data

(IMPS),

USSD-based

one-size-fits-all

custom

limited

There

which

does

which

good

like

has

need

services

Android

services

phones,

of

classified

capabilities

banking

platforms

Eko

can

applications

mobile

with

introduction

handset

banking

smart

the

environment

mobile

for

years.

banking

an

iOS,

designed

banks

service
provides

80%

whom

are

to

prices.

micro-insurance,

mobile

the

barriers

services,
of

and

bank
and

migrants

banking.

21

2.8

SMs BANKING

Short
the

Message
GSM

Service

mobile

(SMS)

communication

protocols

allowing

the

telephone

devices.

SMS

application
mobile

on

the

phone

is

planet,

subscribers

communication

system,

interchange
text

a
of

using

short

messaging

with

2.4

sending

and

standardized

standardized

text

messages

the

most

is

billion

service

active

receiving

text

communications
between

widely

users,

in

or

mobile

used
74%

messages

data

of
on

all
their

phones.
SMS

banking

customers,
mobile
using

is

both
on

the

them

using

push

Depending
transactions,

technology

permitting

phones

bank,

both

operate

messaging.

pull

selected

customer
or

SMS

and

the

to

can
and

enabled

service

offering

from

selected

banking

services

SMS

messages.The

extent
be

of

financial

banking

services

architecture

of

SMS

authorized
and

banks

banking
to

carry

out

non-financial

over
are

SMS

transactions
either

to

its
their

operated
Banking.

offered

by

non-financial

transactions.

SMS

22

banking
push

solutions

and

offer

pull services

as

range

outlined

below.71

would

include:

Typical push

Periodic

Reporting

Successful or

Successful payment

Insufficient

Large value

withdrawals

on

an

Large value

withdrawals

on

the ATM

Large

payment

on

services

account
of

balance

salary

One-time

Account balance

Mini statement

Electronic

bill

Transfers

between

password

Stop

Requesting

De-activating

SMS
mobile
than

Internet

banking

Card

is

of

the
a

issued

bank

account;

standing

on

the

month);

order;

account;

account;

credit

or

EFTPOS

card

or

out

on
of

debit card;

country

activity

authentication

to

credit

banking

accounts,

current account
on

card

or

like

moving

to

fund

card

to

money

from

a cheque;

cheque;
or

credit

debit

exchange

interest
a

rates

rates

card

when

it

be suspended;
is

lost

or

the

PIN

enquiry;

enquiry.

technology-enabled
the

SMS

customers
messages.

because

the distances

Based

own

be compromised;

permit
using

reduces

and

an ATM

deposit

phones

customer's

currency

They

on

instruction

to

banking

customers.

a cheque

to

of

request;

for

known

Fixed

credits

the end

by

payment;

payment

of

at

classified

enquiry;

account

Foreign

other

functionality,

card.

and

(say

un-successful execution

value

a credit

is

reporting

of

funds;

a savings

2.9

customers

Delivery

people
between

service
to

SMS
carry
banks

offered

by

operate

banking

banking

is

mobile
and

phones
the

banks
services

more

to

its
over

advantageous

everywhere.

SMS

customers.

Systems
23

Among
are

the

credit

ATM
to

in

reducing

since

and

the

their

the

the

major

is

of

The

in

payment
the

RBI

for

Payment
Board.

and
The

supervision
for

BPSS

existing

payment
these

banks
these

card

based

by expanding

have

been

able

channels,

thereby

clearing

systems

1980s.

Though

enabled

instruments,

implementation

way

of

the

central
to

settlement

Board

for

(BPSS)

types

of

payment
systems,

the

to

the

Cheque

systems

as

and

determines

continuation,

for

criteria

termination

portion
the

Supervision

of

of

the

of

country,
its

Central

regulation

systems,

criteria

recent

institutional

the

and
to

major

the

Committee

settlement

approves

the

in

relating

in

development

strengthen

Regulation

policies

and

infrastructure

through

are

order

down

including

mid

cheques.

which

and

systems,

the

MICR

large

Systems

future

in

based

communication

banks.In
a

paper

the

of

lays

settlement

systems,

these

immensely

Systems

systems,

2005,

in

with

now

and

and

of

services,

been

decade. Aided

towards

in

and

in

payment

in

all

now,

banks

Settlement

of

have

terminals,

technology

processing

of

the

constituted,

banking

Systems

Settlement

settlement

businesses

framework

(POS)

made

technology

impacted

and

be

the

and

have

These

the past

customers

MICR

expected

2.11 Payment
years

Sale

various

Penetration

improvement

to

for

innovations

over

of

important

System

etc.

launch.

Clearing

continued

transition

cards

for

too.

introduction

Truncation

of

transition

most

improvements

their

Point

costs

mechanisms

smart

manifold

Paper Based

Among

of

cards,

have increased

increase

was

delivery

debit

India

networks

2.10

based

cards,

successful
systems

card

sets

and

standards

authorisation

of

for

membership

to

and

rejection

of

need

for

membership
Thereafter,

the

framework

dedicated

settlement
in
the

government

systems.

December
payment

2007,
and

to
The

and
the

efficient

Payment

which

the
and

empowered

settlement

systems

RBI

felt

the

functioning

of

the

Settlement

Systems

the

to

and

RBI

provided

legal

payment

Act

regulate

was
and

legal

and
passed

supervise
basis

for

24

multilateral
payment
are

netting
and

The

upward

here.

is

now

share

of

at

2.12

pace

in

world,

is

the

cheque

which

branch

and

drawee

branch

date

of

is

be

along

of

system

services

primarily

cash

to

electronic.

has

shown

the

13th

potential

to

an

Real Time

(ECS),

currently
the

years

comprises

is

but has

recent

paper

payments

in

credit

and

National

Electronic

largest

non-cash

grow

significantly.

System (CTS)
stopping
at

image
the

some

of

the

relevant

presenting

banks

reconciliation

the

movement
point

of

en-route

the
to

cheque

would

be

information

like

the

the

CTS

etc.

Thus,

problems,

logistics

physical

the

drawee

sent

to

MICR

fields,

reduces

problems

the
the

and

the

in

the

with

the

collection.

cheque

National

truncation

Capital

participation

Region

of

is

system

10

that

it

of

was

New

banks.

The

obviates

the

launched

Delhi
main

house.

Instead,

the

electronic

required

to

sent

the

clearing

be

cost-effective

mode

of

realization

of

cheques

made

the

NI

in

the

truncated

introduction
efficiency

of
with

to

reduce

the

of

advanced

to

settlement
on

Act

the

to

cheque,

electronic

same

the

paper

on

paper

funds

pilot

February
of

1,

of

image

the

of

2008,

the

presentation

basis

cheque

the

truncation

cheque

cheque

to

the

would

be

This

would

provide

manual

and

MICR

clearing,

enabling

day.

Amendments

recognition
a

effort

sound
is

on

transactions,

based

transfer

house.

for

based

on

advantage

legal

providing

respect to
burden

than

give

CTS.Currently

on

physical

clearing

of

from

primarily

clearing

is

truncated

with

frauds,

non-cash

in

which

(EFTs)

of

electronic

presentation,

cost of

system

to

an

probability

The

process

system,

innovations

RBI

transfers

Cheque Transaction

Truncation

the

fund

India

the

in

payment

electronic

by

transforming

Electronic

(NEFT).

market

payment

payments

electronic

and

Transfer

payments

faster

(RTGS),

payments

Funds

technological

introduced

Indian

electronic

Settlement

debit

systems

The

trend. The

Gross

settlement.Important

settlement

discussed

dominant,

and

clearing.

to

have
the

legal
and

already

electronic

framework

increasing

far

Through

the

the

RBI

been
image

for

the

as

mechanisms,

more

the

processing
as

possible,

introduction
has

been
25

successful

in

diverting

electronic

route.

large

portion

of

CHAPTER
RECENT TRENDS

paper

based

transactions

to

the

III

IN TECHNOLOGY IN

BANKING

SECTOR
3.1

Introduction

Banking

technology

disciplines

such

information

and

its

computer

finance

and

science

helped

customers

reaping

more

science

are

various

risks

customers

computer

profits.
used

to

associated

and

other

The

better

various

marketing-related

problems

in

and

problems
industry

cost

is

played
and

growing
data
and
well

thereby
computer

and

business

by

objective

and

mitigate,

The

banking

banks marketing

banks

banks.

influence

on

role

statistics

measure,
with

communication

tremendous

less

Advanced

relationship management
banking

at

disparate

management),

technologies

fulfilling

customer

the

risk

quintessential
in

several

science,

science.

the

of

(including

communication

products,

servicing

confluence

marketing

information

and
of

as

technology,

technology,
of

as

manage
with

its

influence

of

mining
fraud

in

tackling
detection

documented.

26

BANKING
TECHNOLOGY

FINANCE &
RISK
MANAGEMENT

COMMUNICATIONS
TECHNOLOGY

MARKETING
SCIENCE

COMPONENTS

OF

BANKING

Technology

no

longer

for

is

automating

revolutionary
adoption
greater
and

means

of

customer

Instead
has

space

industry

banking. They

and

adopted

are classified

1)

Data Warehousing

2)

Data Mining

3)

Electronic

4)

Corporate Web

5)

Management

6)

RTGS

3.2.A.1

is

to

and

cost

in

in

various

to

and

means

used

as

customers.

following

efficiency;

savings

as

being

the

satisfaction; convenience

and

banking

it

simply

services

led

profitability,

3.2.A Technology Application

Indian

used

delivering

technology

productivity,

operations;

of

INFORMATION
TECHNOLOGY

TECHNOLOGY

being

processes.

COMPUTER
SCIENCE

The

benefits:

faster
flexibility;

(Sivakumaran,

service
24x7
2005)

Banks
technology

applications

in

to:

Data Interchange

Data

Sites

Information

System

warehouse
27

Data

warehouse

data.

Data

data
of

warehouse

analytic

are
a

structured

of

an

designed
various

in

an

This

organization's

to

standardized,

from

requirements.

facilitate

consistent,

operational

way

to

reporting

of

the

and

clean

and

systems

in

specifically

definition

electronically

address

data

stored

analysis.A

integrated
use

the

form

in

the

reporting

and

focuses

on

warehouse

storage.

However,

the

load

essential
data
for

repository

houses

sourced

organization,

and

warehouses

data

data

is

means

to

retrieve

and

analyze

and

to

manage

the

data

data,

components

warehousing
data

and

use

data

efforts,

is

built.

There

is

right

exist

to

Fig

no

support

building,

can

be

architecture

consists

Operational

The

source

data

Resource Planning

Data

The

access

interface

Tools

to

or

wrong
in

data

and

situations.

of

the

data

architecture

aids
Fig

and
of

and
data
is

architectures

worthiness

warehouse.

interconnected

extract,

warehouse

multiple

The

conceptualization

to

manage

data

conceptualization

warehouse

following

to

to

definition

organization's

the

rather

references

tools

an

how

the

considered

tools

of

architecture,

simple

the

of

also

expanded

tools,

and

context

how

usage

possible

of
in

the
the

3.2.A.1and
its

data

process
warehouse

layers:

database layer
for

the

systems

data
fall

warehouse

into

this

An

organization's

Enterprise

layer.

layer

between

extract,

the

environments

and

of

repository,

transform

Many

an

intelligence

conceptualization

explains

One

in

judged

maintenance,

respectively.

various

3.2.A.1.ii

the

Architecture,

warehousing

architecture

into

Thus,

extract,

are

system.

context.

business

to

dictionary

warehousing

broader

includes

load

metadata.

data

this

warehousing

transform,
retrieve

of

data,

the

transform,

operational

and

informational

load

into

the

data

warehouse

access
fall

layer
into

this

layer.

The

Metadata
data

system

data

layer

directory

This

directory.

There

is
are

usually

more

dictionaries

detailed
for

the

than
entire

an

operational

warehouse

and

28

sometimes
reporting

dictionaries
and

for

analysis

Informational
data

accessed

and

analyzing

for

the

Inmon-

Kimball

this

article,

have to

data

data

that

can

be

accessed

by

particular

for

reporting

tool.

access

The

the

layer

reporting
Business

differences
do

with

FIG.3.2.A.1.i Data

and

analyzing

intelligence
about
this

design

tools

and

the

fall

tools

into

methodology,

this

layer.

discussed

And

later

in

layer.

warehouse architecture

29

FIG.3.2.A.1.ii Process

3.2.A.2

Data

Data

mining

data

are

data

mining

data

into

of

Data

warehouse

of

extracting

mining
is

the

gathered,
is

process

with

the

becoming

amount

an

of

increasingly

practices,

such

as

marketing, surveillance,

discovery.

While

data

it

is

samples

of

domain.

Similarly,

in

domain,

mining

important

data

to

may
data
if

commonly
can

used

be

be

aware

produce

results

mining

those

will

patterns

in

fraud

used

to

that

the

that

not

find

are

not

from

doubling

important

It

samples,

is

patterns

data

information.

the

architecture

data.

every

tool

to

wide

range

use

are

patterns
present

years.

of

these

profiling
scientific

patterns

in

data

non-representative

indicative

that
in

three

and

of

not

more

transform

detection
uncover

As

may

the

of

be

the

present

sample

being

"mined".
There

is

results

to

tendency

attribute

for

"magical

insufficiently
abilities"

to

knowledgeable"consumers"
data

mining,

treating

the

of

the

technique

30

as

sort

of

functions

in

indicative

and

conjunction

discovery

not

necessarily

from which

with

of

that

that

data

that

the

pattern

in

pattern

was

best

apply

integrated

with

is

data

outside

of

warehouse,

require
simplifies
analytic

the

management,

fraud

FIG.3.2.A.2

internal

starting

data

data

about

also

provides

competitor

implemented
Redbrick,

tracking

and

an
in

is

in

of

only

this

case,

Further,

data

does

whole

population

must

be

when
mining.

data

to
such

as

integrated

operate
extracting,

new
the

insights
warehouse

The

resulting

business

processes

promotional

campaign

improve

product

rollout,
data

and

soon.

mining.

Mining Architecture

contact

be

for

from

for

Background

should

steps

fully

interactive

currently

with

warehouse

relational

flexible

tools

extra

new

for

as

integration

areas

Data

data

basis

variety of
and

the

they

well

be applied

customer

activity.

on,

it

collect.

set

Furthermore,

results

architecture

Integrated

excellent
a

so

an

all

first

of

mining

data.

detection,

point

in

particular

requiring

of

organization,

Fig.3.2.A.2.illustrates

material:

must

as

implementation,

application

the

tool,

techniques,

data

the

data warehouse can

throughout

ideal

Many

analyzing

operational

warehouse

tools.

and

user

representative

advanced

analysis

importing,

raw

other

Mining

business

the

any

drawn.

these
a

Like

appropriate

data

particular

mean

ball.

the

An Architecture for Data

To

The

crystal

representative

the

all-seeing

containing
coupled

information

prospecting.
database
optimized

with
on

This

external

potential
warehouse

systems:
for

combination

flexible

Sybase,
and

of

market

customers
can

be

Oracle,
fast

data
31

access.An

OLAP

sophisticated
data

(On-Line

end-user

Analytical

business

model

multidimensional

they

want

to

and

other

key

must

be

embed

view

structures
their

business

perspectives

integrated

with

ROI-focused

allow

be

of

the

business

applied

enables

when

more

navigating

the

this

infrastructure.

decision
user

in

warehouse

grows

with

support

through

applies

users

proactive

to

Steps

design

analysis

metadata

that

represents

other

analysis

in

of
the

confirm

the impact

mining

architecture

of

new

best

the

can
those

data

implemented

and

tracked.

and

results,
apply

fundamental

shift

simply

relevant
by

to

warehouse

the

then

be

applied

organization
to

from
data

to

the

Advanced

Analysis

the

warehouse

and

data.

These

Reporting,
to

Fig.3.2.A.2.ii

Server

future

explains

the

metadata
actions
steps

enhance

visualization,

plan

end

returns

results

dynamic

future

conventional

the

providing

of

the
them

delivering

information.

view

plans.

An

61management,

the

and

directly

OLAP Server

to

mining

with

practices

reporting software,
most

data

campaign

Integration

decisions

than

models

the

server

Mining Architecture

Rather

distilled

tools

Data

defines
like

be directly

and

business

issues

represents

systems.

query

template

optimization.

Fig.3.2.A.2

This

Server

into

promotion

decisions.

Mining

directly

and

the

Data

region,

analysis

prospecting,

mine

The

as

line,

OLAP

business

continually

product

data

the

specific

can

by

the

and

for

the

business.

analyze

warehouse

objectives

decisions

to

data

metadata

operational

user

summarizing

their

process-centric

enables

the

advanced,

the

to

server

warehouse.

The

As

Processing)

in

layer
and
and
data

32

3.2.A.3

Electronic

Electronic
data

Data

between

electronic
trading
for
with

instance,

to

EDI

including
roots,

and

Standard

Code

for

whole

interorganization

trading

in

X12

the

like

of

lading

It

refers

also

conditions

used

to

i.e.

even

Cheque

to

on

single
5

Interchange

is

the

electronic

Electronic

used

transmit

financial

information

Data
and

that

in

pre-

(EDI)

rather
up

the

electronic

of

receiving

accepted
can

an
EDI

exchange

notices,

universally

payments

its

make

explains

shipping

Interchange

of

messages

and

partners.

family

ASCII(American

processed,

exhibits

Fig

computer

one

and

exchanges

invoices,

from

E-mail;

and

order,

transfer

mere

also

focus

to

of

than

specifically

However,EDI
tend

transmission

another,

bills

trading

Fig.3.2.A.3

to

replace

between
to

is

Interchange)-formatted

purchase

standard,

system

It
more

process.

Data

structured

is

series.

Information

the

means.

partner.

standards
of

to

It

might

business

documents

refers

computer

message
the

(EDI)

electronic

one

sequence

architecture Electronic
etc.

by

another

Internet

advices

from

organizations

appropriate

business

(EDI)

organizations

partner

the

Interchange

Interchange

documents

standards,

than

Data

format
also

be

form.

EDI Architecture

33

3.2.A.4

Corporate Website

34

corporate

by

business

foundation.
in

website

that

or

they

term

of

art

specific
site

site for

or

to

or

or

Large
all

of

the

A homepage

A navigation

websites

and

A summary

A list of

bar

to

news

non-profit

about

company

site

the
The

rather
or

than

with

features

into

single

or

sites
rather

phrase

design

structure

of

public

has

the
its

is

its

business

interacts
a

or

portal,

sector,

maintain

other

umbrella

corporate

subsidiaries.

include

other

the following:

means

feel

for

operations,

the

company's

products

section

with

executives.

overall

workforce.

"investor"

site sections

company

containing
about

history, and
and

biographical

key

articles

the

various

logos,

style

images.

company

section

accessing

incorporating

of

the company's
"news"

the

that

and

charity

services.

the same

brands

and

and/or

of

market

typically

or

graphic

"people"

members,

other

operated

commerce,

public

company

usually

look

An

every

as

website

Common Features

Corporate

sheets,

nature,

informational

such

the

purpose

various

an

electronic

to

else integrates

their

unified

from

providing

the

companies

is

enterprise

differ

operator. Nearly
site

site

information

referring

sites

business

Corporate Website

private

features,

a corporate
websites.

other

provide

transacting

the

corporate

Corporate

than
or

or

statement

services
information

Sometimes

press

mission

releases,

on

provides
press

founders,
an

kits,

board

overview
and/or

of

links

the company

section

describing

key

owners

investors

of

the

company

list

of

key

clients,

suppliers,

achievements,

projects,

partners,

or

others
Pages

of

special

An
and/or

interest

employment
tells

job

to

specific

section
seekers

groups. These may

where
how

to

the

company

include:

lists

open

positions

apply

35

Investor

pages

with

the

annual

price,

financial

statements,

filing

or

regulatory

Pages

for

other

employees,

report,

overview

business

of

the

plan,

company

current

stock

structure,

SEC

filings

suppliers,

customers,

strategic

partners,

affiliates,

etc.

Contact

information.

visitors

may

terms

of

ownership

and

submit

messages

use

document

policies

A privacy

policy

page

splash

home

search

the website,
A site map

A blog

with

news

pages

sustainability,

charity,

"store

services
A
free

feedback

statement

apply

point

to

of

form

by

intellectual

which

property

site content

that

directs

users

to

the

site's

and

allowing
searches

users
of

to

search

pages

from

within

the Web

commentary

about

the

company,

its

products

describing
corporate

the

company's

citizenship,

and

environmental

other

policies

as

/
they

the public
locator"

locations

they

entry

external

"Community"

and

services

affect

an

engines

or

as

as

includes

page

Embedded

and

Sometimes

of

the

can

or

trial

material,

and

A calendar

"links"

websites,

or

similar

company

or

feature
where

used
the

to

find

nearby

company's

retail

products

or

be found

"downloads"

or

or

"media"

software,
the

or

software

for

patches,

users

to

obtain

web

tools,

company

demos,

promotional

like

events

page

section

section

with

information

hyperlinks
about

specific

to

consumer-oriented
brands

or

or

subsidiaries

other
of

the

company

3.2.A.5

Management

Information

System (MIS)
36

management

internal

information

controls

documents,
business

of

used
in

are

to
the

the

analyze

group

of

of

systems,

from

other

tech

their

analysts,

with

jobs
-

project

staff

architecture

and
of

the

the

of

application

by

costing

product,

service

or

information

systems

in

regular

management

systems

the

term

management
making,

business

that
to

more

than

and

the

overall

of

people,

accountants

get

people

tied
It

to

solve

business-wide

MIS

of

MIS

they

operational
used

to

the

Support

to

refer

to

automation

or

Systems,

Expert

described

technology

and

business.

the

information
is
etc.,

they

the lifeblood

professionals

are

activities

been

administrators,
the

that

has

Information

ever.

in

commonly

Decision

systems.

across

modules

is

intersects

systems

management

applied

methods

e.g.

information

space

managers,
MIS

subset

procedures

better/faster/smarter.
now

covering

information

Executive
in

is

information

human decision

'lives'

organizations
with

as

information

and

combines
do

and

organization.Academically,

support
"MIS

distinct

(MIS)

business

such

strategy. Management
systems

technologies,

problems

system

work

as,
MIS

need

to

of

all

as

systems

communicating

directly

organization.Fig.3.2.A.5

explain

the

respectively.

37

FIG.3.2.A.5

Architecture of

Fig.3.2.A.5

3.2.A.6
Real
is

Real Time

Time
a

the

system

account

of

another

bank.

The

and

operated

by

maintained
and

faster

funds

on

Time

Real

instantaneously

and

name

the beneficiarys account

period.

time
In

means
RTGS

transfer
suggests,

basis.
the

to

the

Therefore,

money

within

hours.

transaction

transaction

are

has

is
settled

since

Real
and

not
as

March

which

funds

banks

transfer

bank

India

through

RBI

among

two

in

(RTGS)

funds

(MIS)

(RTGS)

transfer

beneficiarys

payment
the

banks

System

MIS

system

given

the

Real

Analysis
by

Information

introduced

be

operations. As
a

system,

Research

of

Settlement

can

is

efficient

Modules

Gross

Settlement

Interlink

instructions
to

Gross

ii

Management

from

Time

Gross

facilitating
between

electronics

their

provides

means

their

banks

account
Settlement

reach

the

the

responsibility

of

financial

takes

can

place

beneficiary
to

subjected

to

they

processed.

are

2004,

any

credit
waiting
Gross

38

settlement

means

bunching

or

system
to

transaction

is

netting

with

any

other

transfer

of

money

or

real

time

and

final

and

irrevocable.

where

another

payment

on

are

systems

the

deployed

largely

were

for

the

retail

instrumental

in

the

Payment

The

Systems

payment

regime,

deferred

by

RBI,

High

in

India

meant

that

the

banks

desirable

Credit

Guarantee

primary

end-August

increase

coverage

of

centres

basis

without

is

funds

transfer

place
basis.

The

other

payment

at

small

value

introduction

from

one

Once

processed,

and

settlement

repetitive

of

RTGS

for

bank

transactions,

in

2004

Systemically

was

Important

the

high

value

interbank

transfers,

interbank

transfers

among

since
RTGS

reach

the

routed
Bank

Clearing

of

in

increased
increased

and

2004.

to

107
of

The
of

basis.
so,

To
it

the

RTGS

at

mode

as

at

witnessed

bank/branch

branches

(96

Insurance,

Ltd.)

has

is

commercial

participants

India

this

on

launched

Deposit

RTGS

58,720

usage

gross

the

the

was

through

of

Corporation

utilisation

only

membership

introduction

system

facilitating

and

its

be

Reserve

and

banks

on

RBI

settlement

between

settlement

major

dealers,

settled

net

time

all

had

was

deferred
risks.RTGS

that

with

settlement

by

system

followed

amount

posed

The

sustained
10,000

one

gross

largely

real

Corporation

2009.
the

takes

infrastructure

are

RTGS

banks,

to

on

significant

accounts

The

of

net

posed

enabled

risks

having

system.

This

which

considered

securities

The

development

one

(SIPS).

basis.

systemic

transactions.

on

transaction.RTGS

aimed

system

which

mostly

settled

network

more
of

than
funds

transfer.

3.2.B.Current
Apart

Information Technology Tools

from already

mentioned

technology, banks

Information Technology Tools. They

1)

Electronic

Clearing And

adopting

various

are:

Settlement

System
39

2)

Plastic

Money

3)

Electronic

Banking

3.2.B.1.Electronic
Some

of

MICR

clearing,

Optical

the

electronic

electronic

Character

characters.

OCR

typewriter

systems

and

printing.

computer,

it

turned

is

software

identify

character,

it

is

more

much

worn

and

alphabetic

converts

it

difficult

smudged

processing

When
the

them

SWIFT.

the

machine
many

characters.
a

text

document

and

dark

letter

and

numeric

ASCII

analyze
is

which

text

than

are

OCR

Advanced

light

OCR

are

OCR

clearing,

of

printed

recognition

different

bitmap,

documents

with

system

and

into
to

settlement

recognize

into

analyzes

each

can

is

computer-printed

hand

to

and

System

(OCR)

Recognition

recognize
OCR

Settlement

Debit Clearing,SFMS,

Character Recognition

Optical
as

Clearing And

areas

the

ASCII

difficult.

sometimes

as

systems

can

of

it

file).

the

the

text.

in

order

recognizes

characters.
an

into

Hand

Scanning

much

well

bitmap

When

machine-printed

also

as

scanned
picture

of

digit.

(see

OCR

is

is

fonts,

printing
Old,

documents

art

as

it

and
is

science.

Magnetic

Ink

Character Recognition

Magnetic

Ink

Character

Recognition

data

printed

with

magnetically

and

deposit

slips.

MICR

into

digital

as
a

the

data.

early

deterrent

magnetic

MICR

to

because

machine

ink.

detect

optical

technology,

fraud,

the

charged

readers

Although

is

It

the

methods

magnetic

is

used

characters
(OCR)

ink

aphotocopied

recognition

is

check

on
and

became
still

will

checks

convert

them

sophisticated
It

be

numeric

bank

as

used.
not

of

serves

printed

as
with

ink.

MICR Technology
MICR
Iron
is

characters
oxide has

applied

on

are

printed

using

magnetic

properties

it.

working

The

an

ink

and
of

can

laden

with

retain

MICR

iron

oxide

particles.

magnetic

fields

when

reader

is

essentially

it

based

40

on

the

concept

of

moving

heads,

one

two

magnetic

that

immediately

pattern
The

of

shape

signature

recognized

by

first

field

printed

charge the

the

electrical

characteristic

electrical

that

follows

the

characters

is

of

the

MICR

pattern

to

each

the

machine

this

characters

and

what

with

reads

font

is

over

the

second

one

magnetic

charge.

The

being

read.

the

character

designed

character

with

ink

and

the

determines

magnetic

minimum

to

give

which

can

ambiguity

unique

be

easily

and

maximum

tolerance.

3.2.B.2

Plastic

a.

Debit

b.

Credit

c.

Smart

Debit

Card

card

Card

card

that

(also

an

remaining
exclusively
of

for

on

use

their

customers

store the

information

to

Electronic
funds

Electronic

transfer

perform
of

financial
different

with

them

a
i.e.

to

there

is

in

many

cash

purchase

customers

on

from

the

designed

physical

card.The

countries

limit.

funds

are

strip

credit

making

the

or

transactions

magnetic
a

as

cards
no

plastic

and

by

has

volume.

authorised
Banks

credit.

to

issue

it

These

cards

systems

used

account.

Banking

3.2.C.1.Electronic
funds

instances

amount
to

so

widespread

card

enable

relating

and

when

check,

the

some

predetermined

electronic

is

cash

cases,

in

upto

an

to

some

Internet,

plastic

method

card)

In

and

called

check

account,

check,
is

payment

or

bank

card.

the

card

the

the

card

bank

either

become

Credit

number

from
the

on

be

has

card:

to

can

cards

Credit

3.2.C.

debit

overtaken

purchase

it

directly

balance

as

alternative

Functionally,

withdrawn

use

known

provides

purchases.

to

Card

card

A debit

are

Money

transfer (EFT)
or

EFT refers

transactions

to

the computer-based

electronically.

The

term

is

used

for

concepts:

41

Cardholder-initiated

payment

Direct

deposit
via a

Direct

is

initiated

Electronic

the

bill

paper

Wire

wants

his

bank

transfer

use

of

business

for

business

to

its

employees,

customer

with
in

to

business,

the

transaction

customer

online

where

permission

banking,

which

may

be

delivered

by

check
involving
via

stored

value

of

electronic

money,

possibly

in

an

international

banking

network

(generally

carries

Benefit Transfer
Electronic

Funds

to

payment

make

and

funds

make

account

branch

requesting

correctly

provider

of

the

system,

transfers.

the

in

to

his

and
the

account

RBI

made

connected
receiving

the
via

15
EFT

scheme

branch

approach

bank

account

to

of

the
bank

current

account),

bank

name,

to

bank

the

the

amount
Bank

at

reaches
of

the

India)

mechanisms
The

centres

effect

can

name,

System.

available

etc.

anyone

receivers

transfer

(EFT)

with

whereby

time

of

beneficiaries

is

the

service

(EFT)

funds

houses.Special

the

the

or

(Reserve

covering

of

as

the

Funds Transfer

system

instructions/ authorization

to

furnished

that

give

such

be
so

faster.

introduced

was

own

is

person/company

or

(savings

should

Transfer

coverage

another

details

type

1995

was

(EFT)

payment

electronic

clearing

SEFT

computerised
messages

the

Funds

operationalised

increase

and

of

to

transfers

Electronic

launch

managed

etc.

such

account

Electronic

account

name

for

from

Complete

number,

Transfer

cash

directly

receiver/beneficiary.

EFT

makes

fee)

who

The

cardholder

company

from

payment

transfer

Electronic

city,

currency

higher

by

payments

services

payments

Transactions

private

payroll

payroll

debit

EFT or

where

card

possibly

transactions,

from
and

to

was

the

Reserve

Bank

1,

provide

a
for

branches

of

network

enabling

transfer

straight

variant

2003,

across
in

the

System

scheme,

April

with

EFT

where

(SEFT)

began

in

of

the

order

quicker

banks

through

of

that

to

funds
were

electronic

manner

(STP

42

processing).
locations
new

In

were

variant

the

was

case

part

of

implemented
This

the

of

Structured

branches

Centre,

from

RTGS

NEFT

deferred

system

stabilized

increased
cycles
T+0

over

initial

day

and

enables

bringing

Electronic

it

(short

for

Australian

and

New

cards

and

sometimes

reference

transactions

through

cards

cardsuch
at
the

an

as

two

to

automated

card

telephone
A number

funds
to

Sale:

Refund:

real

on

card

teller

order

and

internet

transaction
a

As

product,

the

in

of

NEFT

NEFT
six

was

settlement

account

on

Sale (EFTPOS)
at

Point

of

Sale)

system

for

is

credit

an

cards,

and

card

companies

also

system

used

for

processing

card

system

not

of

sale,

though

the

is

card

is

or

cardholder
used.

point

covers

of

cards

when

This

may

sale

(POS),

used

for

payment

take

place

or

when

mail

order,

purchases.

types

the cardholder

where

transfer

banks

by

(ATM)

which

NEFT

transfer

provides

and

variant.76

initiated

machine

present,

points

the

beneficiaries

processing

the

debit

of

Transfer

Zealand

or

the

Financial

settlement.

Point

European
as

be

to

time

electronic

"EFTPOS"

not

where

transfer

now

the

creation

the

settlements

NEFT

Funds

cards.

is
of

six.

of

EFT.

with

to

in

product.

Zealand

credit

and

transfer

Electronic

may

EFT message

to

between

Indian

funds

terminals

EFT

the

settlement

the trademarked Australian/New

Credit

of

funds

number

not.A

facilities

integration

security

15

decided

settlement

the

or

mechanism

gateway

the

the

was

gross

closer

charge

of

for

banks

the

for

(SFMS)

in

networked

transfer

provided

SFMS

the

base

funds

NEFT

Funds Transfer at

EFTPOS
debit

EFT (NEFT)

broad

are

time

time,

the

basis,

3.2.C.2

net

National

enhancing

a real

banks

they

electronic

to

of

whether

Solution

branch

is

branches

to

NEFT uses

from

as

banks.

considerably

funds. While
is

so

Messaging
the

thereby

the

retail

of

(INFINET). The

all

scheme,

2005)

wide

Financial

transmission

EFT,

the EFT called

nation

networked

Network

the

(November
a

of

merchant

may
pays

be performed,
for

refunds

goods

or

an

earlier

including

the

following:

service
payment

made

by

cardholder

43

 Withdrawal:

the

cardholder

an ATM.

The

funds

advanced

are

Deposit:

(typically

Payment:

Enquiry:

enquiry,

ATM)

cardholder
making

transfer:

from their

also

rather

be

than

used,

at

account,

e.g.

from

typically

when

the

an ATM

deposits

funds

to

their

own

account

withdraws

funds

from

their

own

account

between

linked

accounts

a purchase

transferring

funds

belonging

cardholder
transferring
a

of

funds

transaction
funds

recent

to

enquiry,

to

funds

(top-up)

details

of

recent
this

on

impact,

accounts

can

their

use

pre-pay

cardholder

transactions

covers

account
for

enquiry,

instance
or

balance

request

for

the account

cardholder

where a

party

financial

linked

transactions

where

add

a third

without

top-up:

Administrative:
PIN

cardholder

as

Mini-statement:

obtain

time

available

statement
E

a merchant

same

may

by

where

same

the

funds

at an ATM)

Inter-account

to

Cash Advance

where

Cashback:

at the

term

withdraws

uses
on

mobile
a

variety

of

offered

depend

on

(typically

POS

or

an ATM)

to

phone

device

their

device

(typically

account

non-financial

transactions

including

change

The transaction
would

offer

types

different

transactions

from a

the terminal. An ATM

POS

terminal,

for

instance.

.
3.2.C.3
The

Electronic

Electronic

akin

to

Clearing

the

certain

other

clearing

and

Clearing

ECS

principle

of

single

like

payment

of

salary,

operates

used

by

utility

bills

and

and

interest

other

on

the

service
charges

repayments.

(ECS)

Clearing

like

credit

the

service

Service

Automated
countries

Service

the

House
US.

clearing
debit

introduced
system

ECS

service.

multiple

principle

of

and

also

Settlement

two
credit

under

is

used

is

is
in

debit

operates

on

transactions

debit

clearing

debits and
bills,

collections

undertaken

ECS

for

ECS

electricity

1995,

operational

clearing

of
for

in

variants-

multiple

banks
ECS

etc.

RBI

credit

collection
by

is

interest

single

the
that

credits and

pension,
for

has
ECS

dividend,
providers

by

of

is

telephone
principal

on T+1

basis.

44

Any

ECS

with

an

user

approved

Operating
million
for

can

clearing

from

74

transactions

per
bulk

work

from

the

of

growth

rate

ECS
few

years.

The

RBI

during

32.1%

in

particular,

recently

in

currently

operational.
location

against

to

the
ECS

prepare

tie-up

with

Under

where

system

has

separate

set

of

local

sponsor

September

Leveraging

on

themselves

efficiency

into

is

banks
2008,

data
for

core

of

Cell,

branches

of

50

system,

in

at

and

NECS

the

is

ECS
at

in

Mumbai,

74

different
users

required

to

banks

last

Service

requires

are

and

the

processed

file

The

(credit)

over

be

Users

ECS

of

average

Clearing

done

functioning,

centre-wise.

banking

ECS

located

currently

burden

annual

growth

shall

20

transactions.

an

use

of

collections

of

improvement

presenting

25000

and

Electronic

Clearing

decentralised

ECS

of

substantial

an

average

lot

at

transactions

processing

the

The

is

all

flow

National

National

off

increased

the

an

payments

smooth

witnessed

which

the

ECS,

the

more

registering

handles

takes

has

NECS,

called

on

bring

has

2008,

Centre. As
NECS.

by

easy

FY05-FY09.

launched

September

ECS

enabling

of

(NECS),

locations.

banks,

ECS

enables

transactions.
transactions

has

centralized

It

electronic

(debit),

transactions

locations,

month.

and

volume

the

house.

different

repetitive

paper

as

undertake

each

to
ECS

participate

in

expected

to

the system.

CHAPTER
RECENT DEVELOPMENTS

IN

IV
BANKING

SECTOR

(2014)
4.1.Introduction
Developments
and

in

the

inclusiveness

of

field

of

the banking

technology

strongly

sector

facilitating

by

supports

the

inclusive

growth
economic

45

growth
and

of

technology

helps

in

4.2.

improves

bringing

down

Society
as

participating
started
as
the

as

of

than

3000

payment,

for

The

main

well

as

Development

sector
in

Financial

messaging.

Funds Transfer
Payment
was

launched

4.3

Cash

Cash

are
than

messages

the

end

the customers.

Financial

Funds

India on

Brussels.

the

239

sector

It

banks

membership

of

reliable

and

cost

worldwide.

At

present

more

network.This

network

also

to

fixed

research

effective

deposit,

Bank

of

interest

for

14,2001

the

India

for

banking

(RBI)

and

established

inter-bank

(RTGS),

System

as

(SFMS):Structured

applications

Settlement

Management

to

(IDRBT):

development

Solution

helpful

useful

Gross

and

technology

Messaging
is

December

at

Banking Technology

of

Financial

Real Time

with

public

obtained

the

adopt

Reserve

is

other

secure,

in

to

(SFMS)

1973

exchange

application

messaging

27

relating

Research
is

May

headquarters

have

of

foreign

country.

Centralised

withdrawal

is

payment
is

cheaper
that

of

Solution

(EFT),
in

back

and

like

Electronic

Delivery

(CFMS).

intraverses

The

SFMS

by RBI.

Dispensers

cash

dispenses

in

This

(DVP),

members

in

its

messages

the

Structured

Messaging

for

with

Inter-bank

and

rapid,

financial

IDRBT

the

1996.

costs

with

India

have

and

of

in

operations

formed

RBI

in

statements,

consultancy

financial
IDRBT

transfer

purpose

1977.

provides
the

was

countries

banks

are

debit-credit

Institute

15

foreign

the

transaction

society

May

transmitting

facilitates

The

in

banks

end

(SWIFT)

from

SWIFT. SWIFT

mode

bank

banks

front

Worldwide

co-operative

functioning

well

the

for

Telecommunications
SWIFT,

the

of

an
than

the
is

alternate
manual

ATM.

The

basic

made
to

service
by

time

operations
customer

rendered

the

cashier

saving.

The

and
is

by
or

the
teller

operations

this

machine

provided

with

bank

is
a

of

by

the

this

cheaper

plastic

branches.
cash

machine
and

card,

fast
which

46

is

magnetically

the machine

4.4

which

of

account

computer

can

the

number

At

that

cash
written

4.5

of

his
on

these

times,

is

formalities,

the

machine

allows

type

credit

amount.

provided

name,
on

written

at

the

card

the

by

special

The

credit

with
When

card

no

use.

the

the

card.

the

methods.

The

uses

this

decreasing.

After

use

nil

customer

Again

of

customer

becomes

The

of

amount

magnetic

starts

the balance

of

magnetic

card
the

of

re-use

etc.

spots.

on

is

with

code

one stage,

for

the card

on

the

has

the

to

credit

card.

deposit

amount

is

means.

Tele-banking
banking

hour

banking

processing

is

another

to

the

facility

customer

calls

other

innovation,
customer.

available

the

bank

transaction

history.

to

telephone

processing

facility

provided

voice

caller

of

and

telephonic

answering

This

only

is

banking

is

long.

financial

on

link
the

provides

him

telephone

popular

Telephone

banking
where

telephone.

Banking

carried

banking.It

represents

telephone.

Banking

this

since
is

out
out

is

over

of

This

software

at

to

now

his
at

by

using

network

is

the

also

use

functions.
Tele

becoming
banks

and

over

the

transaction,
is

are
Voice

Tele-banking.

provided

transactions

account

bank

brief
now

network

identifies

are

computer

voice

modem.

ATMs
their

24

usually

banks

some

performs

computer

Some

and

service

financial
over

computers

help

limited

queries

in

of

the

caller

balance

reply.

system

customer

conducting
carried

suitable

answering

becoming

institution

software.

facility
on

The

the

the

the
based

enquire

system,

with

in

is

computers.
can

this

but

provided

Tele-banking
and

In

machine

which

bank

anytime

connected

too

the

required

magnetic

amount

account

Tele

or

bank

written

read

juncture,

in

for

customers
is

credit

of

the

bears

customer
card,

completing

Card

customer

card

After

the transactions

Chip

The

coated.

called
computer
called

telephone
and
as

Tele

banking.

47

4.6

Bank

Bank

net

net

is

commissioned
RBI

on

under
has

in

the

the
two

based

first

February

basis

of

BANKNET

is

set

transfer

Public

Sector

present,

of

banks

Jaipur,

of

Bhopal,

the

net-I
in

network
of

Bank

It

1991

by

the

who

members

centers

committee
II.

are

of

viz.

Bhubaneshwar,

was

established

by

appointed

T.N.A.

speed

RBI,

which

Lyre.

BANKNET
of

this

inter-branch)

Pune, Ahmedabad,

Patna,

net-

India,

network

director

provides

(and

are

the

executive

and

in

communication

inter-bank

service

Nagpur, Bangalore

It is

network.

up

level

recommendation

Bank

communication

At

1991.

chairmanship
phases:

facilitate

national

financial

messages

this

Bank

is

backbone

by

it
net

internet

transaction.

is

meant

to

within

India

by

network.

Service

Centers

Delhi,

Calcutta,

Madras,

Mumbai,

Kanpur, Lucknow, Chandigarh,

Kochi,

Thiruvananthapuram,

Panaji

Guwahati,

Jammu.

4.7

Any

With
details

from

ATM

bank

in

at

Rangarajan

Computers,

Remote

office and

home.

Mail

Talking

answering

of
now

which

route

allow

the

department,

offering
the
if

now

services
due

had

further

systems,

there

are

advanced

to

the person

call
leave
is

not

touch

directly
a

Machines

are

the

to

inter-station

hotels,

customers.
the

Railway

extended

several
tone

to

the

message

for

to

telephone

can

be

playing

an

Withdrawals

connectivity

of

installation

of

stations,

banks

the

Office

customers

mainly

foreign

answering

department
the

financial

transaction

suggested

being

obtain

to

also

airports,

to

Basic

Teller

is

very

possible

locations.

possible

committee

customer

customer

remote

been

Banking

is

Automated

locations,

4.8 Voice

it

remote

places.

have

non-branch

banks

from

providing

stations

The

technology,

faraway

role

other

of

the

from

important
ATMs.

Banking

expansion

effected
from

where

service

concerned

concerned

desk

and
or

available.

48

4.9

Internet

Banking

Over

the

using

the internet

From

just

more

robust

the

last

few

years,

as

serve.Internet

agenda

While

mobile

and

stages,

most

banks

business

and

banking

is

age of

internet

savvy

among

of

penetration
segments

increasing
Indian

of

value

of

wants

the

the
usage

results
of

space.

be 29

of

their

customers.

their

customers

and

in

experience

while

lowering

cost

to

in

the

Digital

in

their

nascent

top

programs

are

have

in

for

internet

area

of

with

in

India.

and

this

young

information.

moved

to

ease

led

to

class

2020
are

in

also

The

the

base is
looking

engagement.

increase

connectivity.

increasing

By

on

internet

consumer

of

has

item

towards

Customers

and

middle

internet
is

urban

dynamics

has

the

as
shift

process

gathering

banking
The

online

of

still

agendas.

years

realtime

Peer

awareness

increased

affordability

exponentially

across

the
and

customer

areas.

adoption
of

our

survey,

we

see

internet

banking channel

Below

are

participating

number
daily

the

serve

way

models

focus

strategy

internet

channel

long

banks

biggest

changing

rise

rural and

from

terms

will

The

banking

received

the

information

of
in

on

prioritized

households

4.9.i.Driving
Based

have

simplification

and

sell and

banks.
channels

by

and

customers.

number

the

social

India

convenience,

discussion

of

is

come

information,

customer

technology

fuelled

average
for

transaction

today

Transformation

their

and

the

have

market,

marketing

improved

banking

to

India

static

engagement
have

in

a channel

provisioning

process

banks

banks.

registered

transactions

some
Internet

users

executed

as

as

several
across

statistics
banking

all

clear

evidence

segments

of

of
the

based

on

responses

continues

to

grow

well

as

in

illustrated

in

Fig

the
it

number
has

in
and

explain

49

4.9.B.

Leverage

drive

adoption:

Banks

are

corporate
have

sitting

segments

an

active

information
can

and

increase

4.9.C

enterprise
on
of

adoption

Increase

large

who

banking

intelligent

have

account.

analytics

significantly

business

for

customer

customers

internet
with

data

across

marketing
base

across

either

not

This

is

and
their

campaigns
retail,

campaign

or

treasure

customers.

in

internet

and

do

not

trove

of

management,

existing

involvement

SME

enrolled
a

to

banks

banking

governance:
In

many

department

banks
with

the
the

internet
view

that

banking
it

is

channel
a

is

technology

run

out

capability.

of

the

Banks

IT
have

50

to

understand

the banking
and

the

power

business

model

cost

to

serve.

governance

of

this

enterprise

banks

and

benefits

front

office,

grass

root

5.Risk
Over

of

to

analysis
the

preliminary

6.

Efforts

is

key

to

revenue impact

involvement

this

channel

who

with

with

the

its

understand

to

both

educate,

be

able

to

other

the
and

drive

power
optimize

adoption

at

lack

Financial

by

Security

financial

management
have

been

of

risk

at

Basel

by

banks,
II

risk

is

and

banking

landscape.

reveals

that

Core

Banking

System

and
While

covering

enterprise

level

banks have embarked

only

engines,

various
of

other

credit
most

challenges

skilled

resources

risk,

of

them

such

as

for

on

data

advanced

of

India

with

its

and

remains
is

is

foremost.

processes

IBA

(CBS)

an

guidelines

the

still

The

to

still

at

survey

and

widely

used

integration

with

applications

is

still

at

the

of

Basel

II

operational
are

of

which

lot

However,

been

RBI

infrastructure

Indian

management.

of

the

transaction

the

management

across
for

has
Bank

one

however,

systems

there

Reserve

issued

practices

infrastructure;

of

crisis,

from the

improving

and

maturity

stages.

to

the

approaches

systems

computation

well as

channel.

management

responded

banks

implementation,
due

personnel

guidelines

risk

management

stage

segments,

change

staff

after

risk

of

The

stages

capital

fundamentally

its

integrate

trained
staff

years,

advanced

their

done.

across

increase

must

to

customer

& Information

on

improve

upgrading

risk

have

the internet

few

have

nascent

of

should

and

customer-facing

migrate

EY

not

series

to

be

do

thrust
A

Banks

terms

customer facing

last

increased

to

channel

technology

level.

the

view

in

Business

Management

(RBI).

internet

processes.

4.9.D.Educate
Many

of

still

journey
risk
at

availability
risk

and
an

market

risk

implementation
and

quality,

as

modelling.

Inclusion

51

7.

Mobile

The

past

Banking
10

years

have

technology

have

information

to

number

of

people

in

the

highest

across

the

is

expected

dramatic
to

be

they
in

world

on

the

regions,

for

enhanced

by

2014. This

social

evolution.

in

at

urban

and

in

this

India.

channel

areas,

thereby

almost

but

significantly

of

to

way

to

reach

further

out

their

one of

population
to

banking

survey

from

is

its

projected

Our

mobile

ever-growing

phones

Mobile

as

also

an

83%
is

in

society,

to

mobile

phones

banks

of

access
of

and

Advances

facet

India,

all

looking

engagement

rural

every

in

countrys

area

only

decade.

the country. Penetration

impact
focus

mobile

almost

granting

mobile

not

customer

education,

use

are

the

revolutionized

to

been

have

continues

indicates

that

increase

their

to

ones

new

financial

inclusion

agenda.
They

have

delivered

a)

Multi-platform

b)

Customized

e)

credit

to

exhaustive

Views

on

cards,

Several

(iOS, Android,

sites

open
list

for

service

and

requests

relationships

need

to

Symbian

the

internet

apply
and

be

for
and

and
on

other

mutual

undertaken

to

Java)

mobiles

product

addition

transactional

accounts, insurance and

which

BB,

usage on

FD/RD

of

integrated
Demat

steps,

following:

solutions

online

c) The ability
d) An

the

of

types

payees

capabilities

relating

to

funds
accomplish

this

are

as

follows:
a)

Identify

segments

in

high
their

potential

customer

customer base,

banks

segments :
must

Apart

also

treat

from
their

analyzing

target

employees

as

52

service

segment. A close

multiple
b)

sub-segments

Understand

retail

customers

from

those

and

offers)

their

required
and

of

financial

health).

experience
their

relevant

by

urban

of

these

channel:

example

retail

ones

segments

would

reveal

journeys.

the

leverage (for

corporate

usage

inclusion
to

corporate

each

from

differentiated

in

financial

at

The

remittance)

customers

(cash

features
are

very

(payments,

positions,

that

rural

different

financial

tools

trackers

and

understand

the

market

companys

Provide

difference

their

needs

would

overview
c)

and

look

and

needs

features,
of

urban

customers

offerings:
and

the rural

customers

and

Banks
deliver
the

in-depth

to

capability

segment,

on

provide

need

that

supports

provide a seamless

move,

approve

information

on

the

shopping

payments

new

for

products

to

employees.

8.Payments
The

payments

years

due

decade,

to

industry
business

India

has

cash/paperbased
97%

of

to

has

taken

such

as

the

seen

for

multiple

regulation

the

and

(NPCI)

act

POS

regulation

and

payment

pre-paid

payment

for

card

all

for

to

as

public

promote

Payment

&

banks.

Settlements
payment

establishing

National

and

umbrella
promotion

gateway

policy

instruments

etc.,

are

the

recent

In

systems
for

acceptance

guidelines
issuance

for

all

Act

past,
to

and

last

However,
based
the

as
RBI

provide

including

for

robust

of

retail

and

i.e.,

instruments

Corporation

issuance

the

providing

the

few

methods,

payment

channels

guidelines

In

paper

in India,

Payments

institution
of

of

Systems

last

systems.

banks

electronification

of

an

payment

payment

sector

over

innovations.

traditional

electronic

sector

changes

technology

from

modern

supervision

platform,

systems,

to

significant

and

shift

private

steps

RTGS/NEFT
to

transactions

60%

framing

witnessed

requirements

payments

payment

compared

has

India

payment
ATMs,

operation

security

of

measures

transactions.

53

A snapshot

There

various

are

2013.

201213

and

rapid

Credit

consolidation.

More

However,

banks

customers

compared

200809.
for

have
to

Credit
public
have

pre-paid

card

market

Debit

cards
a

(43%),

to

the

in

India

cards
issued

upswing

million

cards

cautious

the ad

hoc approach

usage

be

here:
as

of

issued

in

in

201314,

continue.

after
are

approach

stands

a
in

to

adopted

at 0.3%

period

of

circulation.
acquire

for

of

fast

total

new

growth

electronic

banks.
by

almost

from

credit

substantial

during

period

with

cards

adopted
card

given

milliondebit

to

on

is

50%

INR200

from

FY10to

billion

to

FY13.

INR700

The

billion

period.

infrastructure

FY13,

debit

49

set

18

grew

Acceptance
of

India

expected

back

grown

for

presence

is

sector

transactions
the

than

than

in

million

number

are

cards
this

374

growth

Pre-paid
during

instruments

more

larger

spends

comprise

pace of

transactions

With

card

during

payments

approximately

October
this

of

private

POS

percentage
sector

as

of

the

ATMs

with133,000

also

the deployment

(28%),

internet
overall

banking
number

(29%)
of

all

electronic

banks.

such

201113
has

cards

grown
of

9.63

grew
ATMs

at
lakhs

at

CAGR

deployed
CAGR

of

of

24%

currently.
27%

The

during

POS.

54

Below

is

the industry

snapshot
and

of

Broadly,

the

customer

ecosystems

in

Product-focused

This
so

three

eras

banks.

can

be

divided

in

place

from

the time

raj

and

into

main

with

power

resided

independence

till

first

banking

the

private

the

nineties.

period

their

coincided

of

when

differentiation,

preferred

with

customers

banks,

banks.

more

With

little

often

than

not

on

the

basis

of

most

of

frequently

convenience.

Customer

expectations

to

put

up

were

with

low, and

long

lines,

therefore,
rude

staff

and

them

poor

were
service

at branches.

Banking
cases,

on

willing

the customer

ecosystem

product/services

locational

levels

of

the early

was

no

was

license

in

decided

it

managers

from

ecosystem:

called
This

or

transactions

India.

system

licenses

payments

Customer Management
1. Age

or

on

various

participating

9.

information

Information

channels
was
or

a
sales

flow

were
purchase

mainly

restricted

economy

with

to

branches,

no

concept

and
of

in

most

relationship

teams.
was

one way

from the

bank

to

the

customer.

55

CRM
and

was

driven

therefore,

at

the

individual

customer

level

processes

and

rather

than

systems

as

were

strategy,

mainly

non-

existent.
Customer-focused

The
an

ecosystem:

launch
era

was

of

of

the

initial

consumer

thought

to

be

10

private

banking,when
an

important

banks

product
element

in

199394

and
in

service

winning

ushered

in

differentiation

of

the

market

place.

Customers

had

the same

from their

Private
become

This

banks

trends

changed

the

customer-centric,

increased

customers

and

not

all

rules
but

customers

began

Considering
branches
banks

the

and

providing

quantum

toll

of

own

in

the

that

expected

game

by

to

set by banks.

products

equal,

trying

needed

which

led

to
to

be

initial

CRM.
to

make

also

free

investments

growthrelated

place

and

and

its

presence

felt

in

the

century

their

put

outsourced)

channel

the

industries

were still

are

The

part of

of

awareness
in

as

other

rules

investments

internet

in

banks.

technology-related

early

seeing

more

different

begun

sales
began

contact

needed

aspirations,

organizations

riding

center

in

on

the

setting

most
(both

private

to

their

era

of

the

new
sector

in-house

telecom

numbers

up

revolution

and
by

customers.

The customer ecosystem:

And

now

we

Communication
the

come

is

customer.

no

The

to

the

longer

customer

one-way
is

now

street

digital
from

driving

customer.

the

the

bank

to

agenda

and

cloud,

have

discussion.

Key

technologies,

ensured
channels
been

that

customers

and

made.

including

only

are

the

web,
now

approaching

Furthermore,

mobility

mobile,
taking

the

bank

ensures

social

and

decisions
once
that

their

outside

official

decisions

information

is

now

have
on

56

tap

and

that

customerscan

compare

services,

prices,

etc.,

on

the

move.

CHAPTER

FUTURE TRENDS
6.1

Beyond

Core

Banking
57

Increased

adoption

of

emerging

areas

addition,

the

focus

is

shifting

maturity

phase

of

the

the

increasingly

which

e-payments

focus

dashboards/

on

warehouse

and

internal

decision

services

to

making

todays

systems

to

and

problems.

infrastructure

instantaneously

moving

all

They

future.

In

processes

needed

in

need

to

will

business

data

with

comprising

to

will

internal

from

data

and

help

that

the

to

and

provide

vision

external

stores

data

products

applications

develop

and

integrated

deliver appropriate

need

intelligence,

warehousing

information

see beyond

the

near

Banks

efficiency

to

must

information

curve.

customer

areclearly

the

management,

and

ability

Banks

comprehensive

needs

in
and

reports,

effectiveness

the customers.

to

towards

profitability

access

banking

strengthen

Technology
and

mobile

to

information

real-time

banks

bound

cost

executive

analytics.Improving

solutions

are

and

of

networks

users and

back

again.
The

importance

of

the

overemphasized.

The

hardware

and

software.

advances

in
to

unrealized.

By

business
and

people

storing

information

be
it

measured

in

value

diminished

by

business

Therefore,

banks

must

the

bank

who

possible,clear
information
consistent

6.2
The

brings

units

and

the
make

only

and

serves

expectations

organization

can

that

decisions

still

goes

the

customer.

training,

are
to

bring

be

the

peripheral

their

personal

infrastructure

is

That

is

value

not
each

customers.

must

as

use

and

that

success

to

neglected
of

be

technological

power

technology

the

to

great

better

individuals

indirectly

made

seriously

to

or

ascritical

full

effectiveness

access

and

just

cannot

networked.
member

of

make

this

so

the

To

published,

individuals

online

in

manner.

Interconnectivity

and

Ease

of

Payments

through

Form Factors

economic

economic

The

provide

standards
technology

and

partnership

have

have

it

directly

Increasing

Different

banks

intelligence.

the

banks

emphasize

affects,

are

However,

productive
to

unit

processes

information.

continuing

enterprise-wide

and

Undoubtedly,

more

processes

IT-business

role

role
of

of

money.

payment
Money

systems
is

unit

is

connected
of

account,

intimately
a

store

to
of

the
value,

58

and

medium

and

charge

and

on

this

exchange.

cards,

the

between

of

as

well

internet

economic

Cash,

are

as

payment

based

entities

checks,

on

and

electronic

methods

different

on

different

is

becoming

transfers,

relying

systems
form

on

for

debit,

credit

mobile

phones

exchanging

factors

for

value

engaging

in

exchange.

Anywhere

anytime

implementation of
by

the

Time

and

in

and

increasing

facilitating
service

number

of

the

the

core

banking

Table

of

transactions
related

end

of

to

and

inter

of

2009

moving

of

through

for Branches

is

likely

public

90%

of

at the

under

in
An

is

to

with

technological
branches

for

implementing

such

branches

increased

Core

CHAPTER

an

is

vendors
increasing

development
adoption

development

banks

of

banking

linked to

sector
end

Real

transfer.
mobile

important

the
efforts

to

strengthen

banks

increased

leading

factors

to

(ECS),

and

different

due

Service

funds

cards

online.Presently,

(CBS).

percentages

Clearing

intra-bank

credit/debit

payments

solution

to

and

norm

additionally

NEFT systems

computerization

branches

(CBS). The

March

(RTGS)

the

(CBS),

Electronic

providers. The trend

closely

solution

up

ease of

ease

solution

setting

usage

is

percentage

banking

Settlement

interconnectivity
The

core

regulator

Gross

banking

core

by 79.4

in

of
the

banking
%

at

March-2010.
Banking

(in

%)

VI

59

ROLE
7.1

ROLE

Customers
single

OF CRM TECHNIQUES

have

point

services
banks

grown

of

that
is

OF CRM TECHNIQUES

to

contact.

They

non-banking

to

package

expect

comprehensive

are

attracted

institutions

these

products
will

banks

of

banking

market
the

segments.Consumer

functioning

banking

sector

where

the

required

college

banks

will

analytical
It

has

on

will

increasingly
will

have

to

models
always
services

treated

as

centric

infrastructure

representatives
the

advantages

and

separate
do

will

advantage

be

will

from

together.

model

products

suited/

have

already

the

youngster

grows

using

sophisticated

compile

the

understanding

service

incentive
the

data

warehouse,

bank

customer

not

change

their

behavior,

and

any

The

required

Knowledge

Management

treats

of

bank
to

the

effective

will

gain

develop
behavior

the
of

minimal

people

as

an

information-sharing.Knowledge

service

competitive

value

requisite

to

strategic

customer

short-lived.

are

customer-

customer

or

who

typically

Because

banks,

information

Customers

areas

support

clearly

banking

school

to

area.

infrastructure

The

providing

contact.

most

change

decade.

investment
component

at

will

by

business

each

customer

services.

of

multiple

specific

Banks

needs

institutions
points

Without

significant
essential

large

and

portfolio

CRM

As

and

next

service

the financial

exist

the

through

processes,

that

the

accounts.

does
have

in

young

within

not

factor

and

them

forge

of

customers

multiple

not

important

products

from

to

life.

relationships

using

representatives

for

products

information
of

focused

able

towards

bank

deliver
people,

consumers

predict

difficult

customer

the

and

for

proclivities

develop
a

with

deliver

been

single

of

be

banks

move

catching

track

and

choose

pull

phases
students

an
of

to

challenge

integrating

the

is

plans

have

towards

going

on

behavior

business

different

moving

based

and

banks

at

started
and

services

The

and

across

virtual

and

services

technology

products

and
by

from

new

offering.

Only

services

many

been

user-friendly channels.
lines

by

have

convenient,

business

financial

from

the

technologies.
equal

and

management

60

also

enables

decisions.
a

knowledge

Both

knowledge

them

to

value.

shared

with

An

managers

young

professionals,

products

product

of

enabling

technologies
and

Knowledge

of

premium

inform

role

new

codified,

market

current

in

building
packaging

situations

it

needs

enables

segments,

groupings
are

that

to

be

bank

to

service,

cross-functional

banks,

information

solutions

from

service,

or

client/server

lawyers,
based

on

on

the

and
bank

with

identifies

high-quality

data

bases,

technology

creating

similar

as

be

the

offices,

by

such

demand

Once

high-quality

the

would

in

profitability.

decision-making

include

relationship

technology,

plays

means

decisions

in

and

to

an

collect

suchareas

development.

distributed

as
The

computing,

data warehousing.
what

customers

Technology

allows

the

Knowledge

means

more

information

is

knowledge

might
in

For

customer

should

or

in

management

provide

back

and

get,

portfolio

to

can

in informed

management,

to

experiences,

them

been

products

products

personnel.

financial

play

relevant

product

which

each

experiences

networking,

The

to

and

role

has

specific

front

important

must

reusing

serve

it

service

and

knowledge

groupings,

from

codify

codify

to

retirees.
as

assessment

customer
and

must

situations

individuals.

to

feedback

support

teams

knowledge

approach

its

the

the

previous

service

relevance

appropriate

group

banks

and

their

Once

integrated

customer

similar

culture.Managers

maximize

create

from

put
the

in
be

need

most

be frequently
bank

to

than
proper

having

context

reflected

ease and

updated

accomplish
just
in

and

and
the

success

CHAPTER

of

and

this

are

shared

For

performance
making

to

across

enormously

information;
shared.

willing

it

pay

the

bank.

complex

task.

happens

when

customers,

valuable

of

financial

their

transactions.

VII

61

CHALLENGES

FACED

BY THE

INDUSTRY IN TERMS
8.1

BANKING

OF TECHNOLOGY

Introduction

The

Indian

strongest
large

banking

drivers

recent

past.

and

height

provide

with

various

and

convenience.
revolution
today

in

has

the

However,

changing

kind

divided

this

major
general

of

Changing

Coping

Restructuring

needs
with

Indian

challenges

of

of

that

the

also

and
brings

attempt

This

half
Indian

various

banking

Banking

has
and

article

includes
banking

challenges

is
the

sector.
and

sector.

banks

are

facing

today

are:

customers.

regulatory
and

scenario

challenges

Sector.

First

discusses

by

the

Banking

their

convenience.

business
an

&

brought

on

major

parts.

SMS

intensive

article

the

Indian

half

Some

focus

In

two

faced

banks

banks.

technology

banking

identify

opportunities

level

for

has
the

of

to

second

of

dynamics

made

and

style

and

of

customers

technology

with

exposure.

in

their

into

risk

introduction
The

to

the

achieved

banking,

working

the

also

Mobile

as

in

longer-term

such

model

for

meet

has

a
has

national

Most

of

opportunities

India

has

short

times.

of

transformed
friendly

been

use

to

while

the

sector

changing

ATMs

The

customer
new

the

in

It

The

cater

institutions

industry

of

investments

requirements,

services

banking

and

banks

financial

one

growth.

coverage.

commercial

Banking

as

economic

developments

level

requirements.

emerged

functional

financing

state

new

and

Here

term

has

Indias

significant

medium

Net

of

geographic

undergone

sector

reforms.

reorganizing

banks'

setup

towards

thinner

and

leaner

62

administrative

offices;

Closing

branches

particularly

Thinning

spread.

Maintaining

high

quality

assets.

Management

of

impaired

assets.

Keeping

Sustaining

8.2

pace

in

down

with

healthy

urban

and

technology
bottom

and/or

merging

of

metropolitan

branches;

unviable

up-gradations.

lines

and

increasing

shareholder

value

Challenges Ahead

8.2.A

Important
Meet

Business

customer

Challenges:

expectations

on

service

and

facility

offered

by

the

bank.

Customer

retention.

Managing

the

Retaining

the

improving

the same.

Completion

spread

current

from

Frequent

challenges

hardware

and

timely

roll

Managing

System
processes

sustain

the operating

market

other

8.2.B.Other Important

and

players

in

Operational
in

share

in

the

banking

attending

the

industry

and

the

grades

in

industry.

Challenges

technologies

software,

profit.

used

to

that

focusing

up

implementation

issues

and

out.
technology, security

re-engineering
to

be

able

and

business

risks.

to

enable.

Defined

and

to

reap

benefits

off

implemented

technology

to

its

efficient
fullest

potential.

63

Upgrading

With

the

banks,

opening

in

banks,

and

merged

introduction
as

to

of

of

tie

various

new

facilitate

efforts

electricity
and

Customer/ Account

Customer-ID

Aggressive

Skill

Strict

up

of

action

on

and

to

system,

acquisition

new

A definite
of

other

bills

ATM

bank

of

government
from

new

opportunities
trend

billing

and

of

increased

up

sharing

companies,
telephone

be

open

services.

implementation
by all

correct

is

for

emerging

networks

and

organizations

like

for

cross

selling

MIS

of

the

above

initiative,
issues:

of

us

on

following

details

in

all

accounts

and

intensive

SRMs.

data completion/correction.

crystallization.
marketing

share

of

gradation

of

in

Internet

delivery

of

in

must

&

Debit

Card

products

to

transaction.
awareness

Circular

issued

rollover

Banking

channels

& increase

compliance

slowdown

and

and

disinvestment

going
also

country.

services.

(CBSINFO)/ Messages
Present

will

the

mergers

norms,

is

banking

be undertaken

Completion

II

across

Focus

increase

This

insurance

successful

are to

deregulation,

competition

the

with

products

force spread

BASLE

products

of

8.2.C Immediate
To

of

entities.

ups

work

economy,

the

operators,

of

of

consolidation

services,
mobile

skill

implementation

holding
banks

the

&

all

Guidance

through

scrolling

be

to

put

of

full

staff member.
available

online

ticker

on

login

page.

use

to

have

concrete

these fronts.

64

CHAPTER
CASE
State

Bank

Processing

of

State

Bank

had

computerized

share

to

core

processing

counterparts,

software,
to

system

for

its

affiliate

bank

offering

its

Report
The

project

Centralized

range

spreading
all

of

1990s,

but

it

the

its

Core

branches,

State

Bank

products
growth

of
of
and
to

market

centralized
private-sector

SBI

so

the

more

than

has

services to
areas

initially
14,600

achieved
and

State

its

its

the

operational
planned

successful

all

customize

ongoing

was

of

industry.The
to

it

rural

losing

its

banking
provide

India

India,

implementation

Services

and

in

modern

with

technology.Although

all

of

the

bank

was

more

largest

in

system,

include

India's

oldest

Consultancy

core

economic

of

and

undertaken

new

to

largest

competitive

began

Tata

branches. The
full

for

SBI

3,300

that
SBI
goal

branches

it
and
of
and

providing financial

citizens.

Coverage

implementation

Banking

Largest

had implemented

centralized information

only

the

that

ever

the

the

remain

selected

implement

customers,

banks

core

the

in

systems.To

India

expanded

World's

(SBI),

its branches

2002,

convert

inclusion

India

in

of

support

of

private-sector

centralized

STUDIES

Implementation

The

Bank

India,

VIII

at

the largest

the

of

the

State Bank

centralized

core

Tata
of

Consultancy

India (SBI)

and

system implementaion

Services
its
ever

(TCS)

affiliate

BaNCS

banks

Core

represents

undertaken. The

overall

65

effort

included

14,600

the

domestic

Research
Bank

Note

of

conversion

branches
is

India

processing
critical

success

Unlike

private-sector

expanding
bank

branches

in

Nonetheless,
tens

an
the

study

also
and

services to
extensive
branches

overviews

in

of Indians

financial

services.

This

to

has

rural

the

This

history

drivers

dual

role

at

TowerGroup

of

the

to

of

the

State

bank's

core

modernization,

earning

throughout

network

these

banks.

held

the

methodology.

population
that

accounts

modernize

the

conversion

the

who

affiliate

effort

rural areas

millions
Minister

that

branch

of

Finance

its

identifies

SBI

140 million

and

the

the

banks,

low-income

approximately

SBI

details

It

factors,

banking

built

case

and

systems.

of

of

in

India.

India that

were unprofitable
areas

otherwise

bought

would

of

"banking inclusion"

P. Chidambaram

to

comment,

"The

profit

and

Therefore,

the

included
to

lacked

recently

State

many

the bank.

banking

have

tradition

Bank

services

to

access

to

led

India's

of

66

India

is

owned

communications
implementation
1980s.
the

of

capital,

and

this

the

1990s,

improving

on

decision

the

Bank

andHDFC

Bank,

modern

greater

convenience

attracted
sector
and
share

middle
banks.

Citigroup
in

the

that
and

used

them

upper-class
their

corporate

altered

customers.

Additionally,
and

1960s).

centralized

allowed

to

the

the

core
to

As

advanced

banks

result,

ledger

at
card

was

intellectual

India

to

also

aided

private-sector

private-sector

banking

banks,

landscape

systems

in

and

new

products

the

private-sector

expense

of

such

as

Standard

Chartered
to

by

banks
such
India.

andprovide

the

capabilities

offer

electronic

at

automation

high-net-worth

of

banking

introduce

customers

foreign

The

maintained

costs,

allowed

creation

and

labor

growth

the

1970s

manual

began

reliable

hindered

typically

or

technology

allow

of

areas)

was

low

to

ICICI

channels

country's

lack

throughout the

economy

basisThis

in

delivery

Indian

global

nationalized

implemented

banks

been

They

rural

information

the

had

semiautomated

the

as

in

telecommunications

services

India."

at Indian

either

growth

of

(particularly
account

with

the

government's

(they

period,

rapid

commercial

people

computerization

During

period

as

of

the

power

branches

processing.

its

and

During
local

by

the
gain

banks
publicBank
market

markets

67

CHAPTER

SUMMARY, FINDINGS
9.1

& CONCLUSIONS

Conclusions

From

enabling

Information
to

IX

the

Technology

next

make

in

are

Hence,

the
future.

share

do

the

Mobile

and

public

database

and

manpower.

promise
bank

transformation
to

internet

the

sophisticated

but

sector
in

is

that

field

decentralize
Awareness

near

pace

banking

are

are

energy

to

make

rapid

around

making

appreciation

75

going

to

though

IT

straights
of

towards

They

Technology

in

market

moving

process.

of

banking

guzzlers.

are

Industry.

of

they

IT. They

decisions

and

the

the

Even

hold
of

in

future.

going

banks
the

change

and

in

sector

initiative

driving

sector

banking

taken

quality

to

do

banking

for

Indian

centralized

enviable

course

complex

have

services

years.

future

near
the

few

indoor

systems

banking

posses

are

very

much there. What is needed is a big push the way it was given in the
post

nationalization

India

have

become

outsourcing
as

or

banking

Indian

period

it

the

developed

on

the

IT

may

becomes
in

be
they

The

Whether

development

India

not

world,
front.

expansionary

synonymous.

industry

banks

for

is

as

Use
areas

of

of

technology

banks.

The

India
centre

concerned

it

technologically

are

following

strength

of

Technology(I.T)

and

becomes

destination

for

matter

of

debate.

As

far

although

the

counterparts

in

is

can

be

said

advanced

the

Indian

and rising up to the expectations from

the global trends is a

activities.

as

majority
banking

lie

that

their

of
in

international

trends

withering

storms

all the quarters catching up with all

matter of time

in
banks

expanding
in

India

banking
are

is

using

one

of

Technology

the
not

key

focus

only

to

68

improve

their

services

to

accurate

and

banks

of

simple,
with

own

internal

their

customers.

timely

that

safe

but

Efficient
of

with

customer

secure

customer

larger

technology,

also

use

management

comes
and

delight

processes

the

to

of

increase

technology

increased
base.

banks

facilities
has

transaction

reach

at

facilitated
volume

By designing

and

doorstep

and

of

of

offering
customer

satisfaction.

CHAPTER X
INTERVEIW ANALYSIS

For

better

BARODA
question
share

understanding

were
to

know

with

you

by

me

and

1)

The

Reserve

Primary
2)

9.5

percent

3)

5.5

percent

4)

percent

5)

percent

2)

all

P.K

views

his

this

project

have

visited

Bora(Manager)

asked

in

&

thoughts

experience

were given

Bank

cooperative

10.5

met
his

reply

1)

Ans

of

of

banks

by

that
the

India(RBI)

on
he

this
share

manager
in

P.K

set

of

here.I

have

to

The

question

Bora are as

March

2012

became

the

hiked

OF

certain

segments
with

BANK

bank

was

follows
rate

for

to

percent

9.5
Which

guaranteed

percent
Indian
land

1)

Hyderabad

2)

Mysore

3)

Mangalore

City

titles

by

in

March

2012

distributing

property

first

one

to

provide

cards?

4) Ahmedabad

69

5)

Chandigarh

Ans
3)

Mysore
IT

year

Company

HCL

information

technology

recyclable

product maker

1)

50

million

2)

100

million

3)

150

million

4)

250

million

5)

300

million

Ans
4)

300

The

as

of

information

of

electronics

2)

Department

of

IT

3)

Department

of

Electronics

5)

None

Ans
5)

the
of

signed

-------

with

five
finnish

technology

in

March

2012

has

been

and

IT.

these

PIN in

Smart

A) Permanent

Index

of

Electronics

Card

Identification

C) Personal

Index

called

IT

---

Number

Number

Identification

Personal

is

and

Number

B) Personal

Ans

worth

2012

above

Department

D) Permanent

deal

March

----

Department

of

outsourcing

in

UPM.

1)

4) All

Ltd.

million

department

renamed

technologies

Number

Identification

Number

70

6)

MICR technology

used

clearance

A) Magnetic

Ink

B) Magnetic

Intelligence

Character

C) Magnetic

Information

Cable

D) Magnetic

Insurance Cases

Ans

Magnetic

7)Buy Now

Character

for

Ink

of

cheques

by

banks

refers

to --

Recognition
Recognition
Recognition
Recognition

Character Recognition

Pay Now is

commonly

used

for

---

produce

fingerprint

A) Debit Cards
B) Vault

Cards

C) Credit

Cards

D) E-purse
Ans
8)

Debit
The

part of

Cards

technique
digital

is

used

signing

to

of

message

as

A) Scrambling
B) Extracting
C) Hashing
D) Condensing
Ans Condensing
9)

Smart

A) Special

Card

is

purpose Cards

B) Microprocessor
C) Processing

Cards

unit contains

memory

for

storing

data

71

D) Processing

unit for

software

handling

Ans Microprocessor Cards

10)

Payroll

System

is

essentially

A) Online
B) Batch

Processing

C) Real Time
D) Transaction

processing

Ans Online

CHAPTER XI
BIBLIOGRAPHY
Mittal R.K, Dhingra Sanjay,"Technology in Banking Sector: Issues and Challenges",
Vinimaya, Vol. XXVII, No. 4, Jan- March, 2007, pp 14-22, 2007.
Narayan Tarun,"Banking on Technology, Indian Management Vol. 43, Issue 8, August,
2004, pp.18-28, 2004.

Sathish.D, Bala Bharathi. Y,"Indian Banking Industry: Challenging Times Ahead,

Chartered Financial Analyst, February 2007, pp. 68-70.

Pathrose P P (2001), Hi Tech. Banking Prospects and Problem, IBA Bulletin, Vol.
13, No.7.
Computerization in Development Financial Institutions (DFIs) IDBI Experience,
Journal of Development Finance,June 1995, pp. 26.
WEBSITES

www.rbi.org

www.investopedia.com

www.scrib.com

www.theeconomics.com

www.commerce.nic.in
72

73

74