ELECTRONIC BANKING
After nationalisation, the Indian Banking Industry has witnessed tremendous records of developments. The 'Class Banking' was replaced by 'Mass Banking' . The concept of 'Priority Sector Advances' was introduced to uplift the poor people. The attainment of statutory bench mark under different segments was insisted by the Reserve Bank of India. A vast branch expansion programme was envisaged and implemented. Consequent to the growth and development took place in the Banking Industry, the task of management become a challenging one. The Government of India and Indian Banks Association felt the necessity of introducing mechanisation in banks. Thus, Banks in India started computerisation in their branches and introduced ' Electronic Banking' .
" The Electronic Banking is a banking system whereby banking services and products are made available to customers through electronic channels". It removes the customer constraints regarding branch location, timings, geographical boundaries, access mode and settlement means. It ensures value added services for basic banking requirements.
Internet Banking, Electronic Clearing Services, Electronic Fund Transfer, Real Gross Settlement, Core Banking etc. are the latest electronic banking services introduced by the bank in India.
(1) Computerisation in Banks
Computers are means of obtaining,storing, processing and exchanging information in a fast and accurate way. The need of computerisation was felt by Indian Banks Association with the following objectives.
(i) To improve the quality of customer service.
(ii) To improve the profitability
(iii) To handle increasing volume of transactions easily and quickly, and
(iv) To upgrade the standards of Indian Banks at par with the International Banking Standards.
(2)Automated Teller Machines (A T M)
An Automated Teller Machine is an electronic machine which is operated by the customer himself for withdrawing money from the bank. A T M is a step in improvements of customer service and also in main centers like Bus Station, Railway Station, Airport, Hospital etc. A T M facility is available to customers 24 hours a day. It dispenses currency notes of specific denominations.
The customers is issued an A T M card. This is a plastic card which bears the customer's name, signature and card number. This is magnetically coded and can be read by the machine. Every card holder is provided with a secret Personal Identification Number (P I N). When the customer wants to use the card, he has to insert this card recognised by the machine, the customer enters his personal identification number. After establishing the authentication of the customer, the A T M allows the customer to enter the amount to be withdrawn by him . Then the transactions are processed and the output slot of the machine gives the required cards to the customers.
(3) Electronic Clearing Service
This scheme was introduced by R B I in 1990-91. It provides alternative method of effecting bulk payment transactions of a repetitive nature. The payment of dividend, interest,salaries,pension and other transactions of similar nature may be done against a single debit to the government/corporate account. The various government departments, large size public limited companies, financial institutions and banks are major users of the above scheme.
(4)Internet Banking
Banks are now using the services of internet to deliver the clock services to their customers at lowest possible costs. Under the Internet Banking Services, the customers can operate their account from their homes or work place. The following are some of the services that can be availed of by the customers;
(i) Obtaining Statement of Accounts
(ii) Balance enquiry
(iii) Transfer of Funds
(iv) Requisitioning for a cheque book
(v) Stop payment of cheque
(vi) Submitting an order for obtaining Demand Draft
(vii) Book Railway tickets, Air tickets etc.
(5) Tele-banking
Telebanking is yet another modern banking service, where the customers' queries are responded over telephone with 'voice processing facility' . Telebanking services is available to customers round the clock.
In this system, the computers at bank are connected to a telephone link with the help of modem. Voice processing facility is provided in the software. This software identifies the vaices of caller and provides him suitable reply.
(6) Electronic Fund Transfer (E F T)
Transfer of fund from one source to another through electronic media is known as "Electronic Fund Transfer". E F T enables transfer of funds in the following ways;
(i) Transfer of fund within the city
(ii) Transfer of fund between the cities
(iii) Transfer of fund between the branches
(iv) Transfer of fund between the banks
(7) SWIFT ( society for World Wide Interbank Financial Telecommunication)
Swift, as a co-operative society ,was formed in May 1973 with 239 participating banks from 15 countries within its head quarters at Brussels. It started functioning in May 1977. Reserve Bank of India and 27 other public sector banks as well as 8 foreign banks in India have obtained the membership of the SWIFT. It provides rapid, secure,reliable and cost effective mode of transmitting the financial message world wide. At present more than 3000 banks are the members of this Network. Swift is a method of spohisticated message transmission of international repute.
(8) Electronic Fund Transfer at Point of Sale (EFTPoS)
Point of sale is another system of Electronic Fund Transfer. In this system, computer terminals are provided to showrooms and other stores by the sponsor banks. The customers of these show rooms or stores need not carry cash with them for purchasing their commodities. The customers are provided with a special type of plastic card. After purchasing the required items, the customer has to insert this card in the slot of the terminal. The computer confirms the transaction and the shopkeeper's account is credited with requisite amount.
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