Banking Ppt

INFORMATION TECHNOLOGY

IN BANKING

Electronic

Banking

ATMs

Branch

Banking

E-Banking Developments

 ALPMs and Back Office Computerization.

 Need to improve Customer Service.

 Reconciliation/ union problems.

 Competition and Reforms.

 Introduction of Computerization.

 Clearing Houses, ATMs, Electronic Fund Transfers, Banknet, Swift,

Why Technology In Banks ?

 To transform financial services industry in the net-worked world

 Banks to be customer centric

 Provide services / products across a range of channels

Many Benefits of Technology



Increased operational efficiency, profitability &

productivity.



Superior Customer Service.



_{Multi-channel, real-time transaction processing.}



Better Cross-Selling ability.



_{Improved management / accountability.}



Efficient NPA and Risk Management.



_{Minimal transaction costs.}

Pre-requisites for Technology

Planning for

Disasters

Business Process

Re-engineering

Human Resource

Empowerment

Communication Networks



MICR (Magnetic Ink Character Recognition) Clearing.



BANKNET.



INFINET.



SWIFT.



Electronic Funds Transfer at Point of Sale(EFTPOS)



Electronic Data Interchange (EDI).



Electronic Funds Transfer (EFT) System.



Electronic Clearing Services (ECS).



ATM network - SWADHAN (Shared Payment Network

System).

MICR Clearing

 Magnetic Ink Character Recognition.

 Introduced in 1987 in the four metros.

 1,047 Clearing Houses; 42 with MICR.

 SB/CA Cheque leaves standardized size (8 X 3 2/3”) are pre-printed with the bank-branch code and account type in MICR strip, while the amount is read manually and fed into the system using the encoders for funds settlements.

Automated Teller Machines

 ATMs or 24 hour Tellers – Electronic Terminals - allow to bank at any time.

 On-site and Off-site Automated Teller Machines.

 Average withdrawal per ATM transaction - Rs 1,500 to Rs 3,000

 Total cash movement through ATMs in India is Rs 35,000 - 40,000 crores every year

 Medium for non-cash transactions such as printing of statements, credit card enquiry, cross selling, etc

BANKNET

 Set up in 1991 by RBI

 Meant to facilitate transfer of inter-bank/ inter-branch messages within India by Public Sector banks who are members of this network

INFINET

 Indian Financial Network.

 Set up by RBI in June 1999.

 Satellite based WAN using VSAT (Very Small Aperture Terminal)

technology .

 Major applications: E-mail, Electronic Clearing Service - Credit and Debit, Electronic Funds Transfer.

Electronic Funds Transfer (EFT)

 Hosted and operated by the RBI.

 Permits fund transfer up to Rs 5 lacs from any account at any branch of any

member bank in any city to any other account at any branch of any member bank in any other city.

Electronic Funds Transfer at Point of

Sale(EFTPOS)

 While travelers' cheques meant 'pay-now-buy-later' and credit cards

had 'buy-now-pay-later' advantages, EFTPOS or debit cards signify

'buy-now-pay-now' but without cash transaction. The user presents his ATM card when he buys goods and the EFTPOS system immediately debits his bank account.

Electronic Data Interchange

 EDI typically denotes paperless financial transactions across the locations. EDI is fast becoming the norm for inter-company

transactions and also for procurement of bought out items from the suppliers.

 The companies can now operate their bank accounts through corporate

banking terminals in their own offices which are linked to the bank computers.

 Companies can thus carry out transactions like transferring funds, managing its cash flow, opening letters of credit,etc.

ECS

 Electronic Clearing Scheme (ECS) operated by the RBI since 1996-97

 Utilizes BANKNET and INFINET

 Facilitates payment from a single account at a bank branch to any number of accounts maintained with the branches of the same or other banks.

 RBI has also launched ECS – Debit for payment to utility companies like Telephones, Electricity etc.

SWADHAN

 Launched in 1997

 India's FIRST Shared Payment Network Service

 55 member banks in the network, which include nationalized, private and

foreign banks

 Enables member banks to share their ATMs with other participating banks

 Objective - reduce the huge investment being made by the banks to deploy

Services

 Bill Payment through Electronic Banking

 Electronic Shopping Mall

 Effecting Personal Investments through Electronic Banking

 Trading in shares

 Investing in Mutual Funds

 Trade In Derivatives

Real Time Gross Settlement

 Introduced in India in 2004 by RBI

 Internationally accepted system to minimize the settlement risks

 Settlements occur simultaneously

 >10,000 bank branches networked

Smart Cards

 Multi-application Smart Card

 Channel of the future

 Pilot project started

 Pilot Project funded by Govt. of India

Beware of