Modern Banking Services

Modern Banking Services:

After Libera-lization, Privatization and Globalization, there was a huge development taken place in the Indian banking scenario. All Indian banks were forced to compete with world banks that were permitted to open their branches in India. As a result, all banking customers were offered multiple and model banking products which are different from traditional and conventional banking system in India and these banking functions or mostly based on information technology.

Such modern banking services include new products such as Core Banking Solutions; No frills account; Demat accounts; Net Banking/ E-Banking; Mobile banking; Debit Card/ Credit cards; Automated Teller Machines (ATM); Insurance etc.

1. Core Banking Solution (CBS):

Core Banking Solution (CBS) is networking of branches, which enablesCustomers to operate their accounts, and avail banking services from any branch of the Bank on CBS network, regardless of where he maintains his account. The customer is no more the customer of a Branch. He becomes the Bank’s Customer. Under this system all CBS branches are inter-connected with each other. Therefore, Customers of CBS branches can avail various banking facilities from any other CBS branch located anywhere in the world. This CBS helps the customers

·              To make enquiries about the balance or debit or credit entries in the account.

·              To obtain cash payment out of his account by tendering a cheque.

·              To deposit a cheque for credit into his account.

·              To deposit cash into the account.

·              To deposit cheques/cash into account of some other person who has account in a CBS branch.

·              To get the statement of account.

·              To transfer funds from his account to some other account – his own or of third party, provided both accounts are in CBS branches.

·              To obtain Demand Drafts or Banker’s Cheques from any branch on CBS – amount shall be online debited to his account.

·              Customers can continue to use ATMs and other Delivery Channels, which are also interfaced with CBS platform.

2. No Frills Accounts:

These accounts are opened mostly in rural areas as a part of financial inclusion project encouraged by Reserve Bank of India. These accounts are opened by banks without the condition of maintaining minimum balance. No charge will be levied for non-operation/activation of inoperative basic savings bank accounts. No frill accounts are mainly aimed to take the banking facilities to the poor people in the unbanked rural areas and semi-urban areas.

3. Demat Accounts:

These are maintained by banks for high value transactions which are maintained in electronic forms for dealing in shares and securities of the customers mostly dealing in Government Bonds.

4. Net Banking:

 This is the easy way of doing banking from the convenient place of the customer and avoids queue or delay. We can also check balance,transfer funds, pay bills, open fixed and recurring deposits etc. Each customer is given a unique user ID and password for the purpose of accessing internet banking. Electronic Banking is also known as Electronic fund Transfer. Electronic means to transfer funds from one account to other account by ways of NEFT, RTGS or IMPS.

NEFT- National Electronic Fund Transfer

RTGS- Real Time Gross Settlement

IMPS-Immediate Payment Service

5. Mobile Banking:

Mobile Banking is a service provided by banks or other financial institution that allow their customers to do financial transaction using mobiles like smart phone or tablet. It is quick and simple way of banking. Mobile banking app helps to check the account balance, transfer funds, pay in bills etc.

6. Debit Card / Credit Card:

A debit card is a plastic payment card that can be used instead of cash when making purchases. It is similar to a creditcard, but unlike a credit card, the money depited directly from the user’s bank account when performing a transaction. It is also known as a bank card, plastic card or check card.

In credit card, in the customer can perform the transaction upto a predefined limit, and pay them to the bank before a specified date.

7. ATM (Automatic Teller Machine):

This is an electronic device which helps the customers for withdrawal, deposits money, transfer fund etc, round the clock. For Availing the services of an ATM the customer need ATM card with PIN number (Personal identification number). It provides 24 x7 and 365 days a year service.

8. Insurance:

Insurance is a means of protection from financial loss. It is an arrangement by which the company undertakes to provide a guarantee of compensation for specified loss, damages, illness, or death in return for payment of specified premium. The largest insurance company in India is owned by government.

9. Lock-Box and Night Safe Services:

These services are provided by some banks. Lock-box helps the customers particularly the traders, to keep cheques and other remittances in a box for next day collection and certain entries should be passed. Nightsafe service is useful to the traders who receive large amount of money after the banking hours and who feel insecured at their premises.