SUKET GUPTA

Case summary

Organisation, technology and management aspect

Systems

CORE- Centralized Online Real-Time Exchange

Centralization of IT infrastructure has led to implementation of core banking in India

Complete front and back end automation of banks

RBI Report- 94.6% public sector bank branches fully computerized, 67.7% installed core banking systems

E-Banking is a mix of services, including

Internet Banking

Mobile Banking

ATM Kiosks

Fund Transfer System

RTGS

Credit/Debit/Smart/Kisan Cards

Cash Management Services

CRM

Internet used as a channel for receiving instructions and delivering products and services

Increases efficiency

Reduces cost

24 hours service

Those banks which do not have branch network and are only available on the Internet

Lot less expensive to run and thus can offer cheap loans and higher interest rates

Example – FNBO, NetBank etc

No such banks in India

Advantages of online banking

High speed

Low cost

Effective

Disadvantage of online banking

Difficult to operate

Security and trust

Frequent change in features

It is system which allow customer to do financial transaction through a mobile device.

Transaction information

Banks App

Internet

Main purpose is to withdraw money and balance check.

Routing transactions to ATMs frees bank resources

Biometric ATMs- Eliminate need for PIN entry and literacy requirements. To reach rural and illiterate people.

HDFC set up the first ATM machine in 1987 in India.

India- 28 ATMs per million people

Payment and Settlement Systems

Electronic Clearing

Service(ECS)

ECS Credit ECS Debit

Bulk Transactions

One-to-One Transactions

RTGS NEFT

Real Time Gross Settlement System Real Time- Processing of instructions at the time

they are received Gross Settlement- Settlement of funds transfer

when instructions are given individually Facilitates faster movement of high value

transactions Minimum threshold value of Rs 1 lakh introduced

in Jabuary 1,2007, currently the minimum limit is 2 lakh.

55,006 RTGS enabled bank branches on March 31,2009 (Case fact)

1,17,491 RTGS enabled bank branches (present data as on RBI website)

National Electronic Funds Transfer System

Operates on Deferred Net settlement System (DNS)- settles transactions in batches

NEFT operates in hourly batches

RBI website- 1,19,620 NEFT enabled bank branches

E-Banking is a mix of services which include: Internet Banking Mobile Banking Telephone Banking ATM Fund Transfer System Payment and Settlement System Cash Management Services Data Warehousing Customer Relationship Management Electronic Clearing Services (ECS) Payment Gateway

Internet Banking or Online Banking Receiving instructions and delivering their

products and services Operational efficiencies and reduces costs Convenient Ubiquity Fast transaction Effectiveness First adopted by ICICI bank providing services by

the name INFINITY SBI, BOB, BOI, Allahabad and Syndicate bank also

adopted

Enquiry Transactions Fund Transfer

(NEFT) Bill payment Statement enquiry Cheque status Cheque book

request Transaction history Trading

• UBI: U-Mobile

• BOB: M-Connect

• BOB helpline number: *99#

+91-9223011311

Toll free number: 1900-22-3344

Withdrawal

Balance Enquiry

Mobile Recharge

Mini Statement

Fund Transfer

Now, Banks are giving additional ATM services:

Cheque book request

School fee submission (linked account)

Brown-level ATMs

Biometric

Thumb Impressions

Talking ATMs

Mobile ATMs

Mini Van

White-level ATMs

Centralized

BNA Machines

• Note (Currency)

• PIN

• Deposit

• Cassette Dispenser (Junk Box)

• Instant credit

• Receipt Printer

Started in Metro Cities

Computer

ATMs

BNA (Bunch Note Acceptor) Machines

Passbook Printers

Reference: Ruchika Garg (Manager, IT), Regional Office, Bank of Baroda, Ajmer (Raj.)

Awareness for Rural Consumers

Payment gateways

Biometric Cards

Account linked to PAN number

ECS (Electronic Clearing Services)Repetitive Transaction

Salary, Dividends, bill payment, etc.

CTS (Cheque Truncation System)Image-based Clearing System

eliminates the associated cost of movement of the physical cheques

reduces the time required for their collection

brings elegance to the entire activity of cheque processing

National Electronic Fund Transfer (NEFT) and RealTime Gross Settlement (RTGS) allow individuals,companies and firms to transfer funds from one bankto another. NEFTNEFT operates on a deferred net settlement (DNS) basis

and settles transactions in batches. The settlement takesplace with all transactions received till a particular cut-off time. It operates in hourly batches.

RTGS In RTGS, transactions are processed continuously, all

through the business hours. 'Real Time' means the processing of instructions at the

time they are received rather than at some later time. 'Gross Settlement' means the settlement of funds

transfer instructions occurs individually