Technological Developments in Indian Banking Sector Essay Sample
The beginning of Banking in the modern epoch is traced in Italy. Banking is a concern like any other concern. banking sector topographic point a important function in development of Indian Economy. So. Banks need to hold engineering to better their productiveness and efficiency. to supply faster and better services to the clients. Technology enables the Bankss to lend more for overall growing and development of the state. After Industrial Revolution. Financial establishments including Banks have used Information Technology to accomplish desired degree of efficiency and to maximise the profitableness. IT improves the front terminal operations with back terminal and helps in conveying down the dealing costs for the clients. Electronic Fund Transfer ( EFT ) . Automatic Teller Machines ( ATMs ) . Telephone Banking. Home Banking. Credit Card installation. Internet Banking etc. are most utile technological progresss for banking sector to function clients efficaciously now a yearss. So. the effectual usage of engineering has multiplier consequence on growing and development.
The bank of Venice. founded in 1157. was the first public banking Institution. The Bank of Barcelona and the Bank of Genoa wee established in 1401 and 1407 severally. The Banking companies Act-1949 of India defines bank as – “A Bank is a fiscal Institution which accepts money from the populace for the intent of loaning or Investment repayable on demand or otherwise backdown by checks. bill of exchanges or order or otherwise. ” Technological Development in Banks
After the industrial revolution. the information revolution has been hailed as the most important development in this state. Fiscal Institutions including Banks have used Information Technology to manage big volumes of concern with the coveted degree of efficiency and maximising profitabilility of operations. IT improves the front terminal operations with back terminal and helps in conveying down the dealing costs for the clients. Some of import events are
Arrival of card-based payments – Debit. Credit Card late 1980 and 1990s. Introduction of Electronic glade Services ( ECS ) in late ninetiess. Introduction of Electronic Fund Transfer ( EFT ) in early 2000s. Introduction of RTGS in March 2004.
Introduction of National Electronic Fund Transfer ( NEFT ) as a replacing to Electronic Fund Transfer/Special Electronic Fund Transfer in 2005/06. Computerization in Banks
Among the entire figure of Public Sector Bank subdivisions. 98 % are to the full computerized at the terminal March 2011. Table 1: Computerization in Public Sector Banks |Category |2007 |2008 |2009 |2010 |2011 | |Fully Computerized Branches ( % ) |85. 6 |93. 7 |95. 0 |97. 8 |98 |
Automated Clearing House ( ACH )
The ACH system is the primary Electronic Fundss Transfer ( EFT ) system used by bureaus to do payments. and the Financial Management service anticipates the bureaus progressively will utilize the ACH system to roll up financess. ACH processes big figure of Debit and Credit minutess in batches. National Automated Clearing House Association ( NACHA )
The National Automated Clearing House Association ( NACHA ) governs the Automated Clearing House ( ACH ) web. a system that allow Banks and Financial Institutions to treat direct debits. electronic checks and direct sedimentations. NACHA formulates concern patterns and runing regulations to maintain ACH and electronic banking secure. efficient and dependable. FEDACH is the Federal Reserve’s centralized application package used to treat ACH minutess. Electronic Clearing Service ( ECS )
ECS is an electronic manner of payment ; it facilitates bulk transportation of money from one Bank history to many Bank histories or Vice versa.
There are two discrepancies of ECS- ECS Credit and ECS Debit. 1. ECS ( Credit ) : – It is used for raising debits to a figure of histories of consumer/account holders for crediting a peculiar establishment. 2. ECS ( Debit ) : – It is utile for payment of telephone. electricity. H2O measures. revenue enhancement aggregations. loan installment refunds etc. Table 2: – European union minutess in Rs. Crores.
|Item/Year |2008-09 |2009-10 |2010-11 |2011-12 | |ECS Credit |97. 487 |1. 17. 833 |1. 80. 000 |2. 51. 494 | |ECS Debit |66. 796 |69. 819 |70. 000 |80. 000 |
National Electronic Fund Transfer ( NEFT )
National Electronic Fund Transfer ( NEFT ) is an on-line system for reassigning financess of Indian Financial Institution ( particularly loans ) . This installation is used chiefly to reassign financess below Rs. 2. 00. 000/- . The NEFT system in India lives with consequence from 21st November 2005. Electronic Fund Transfer ( EFT )
Electronic Fund Transfer ( EFT ) is the electronic exchange. transportation of money from one history to another. either with a individual Financial Institution or across multiple Institutions. through computing machine based systems. Table3: – EFT/NEFT minutess in Rs. Crores.
|Item/Year |2008-09 |2009-10 |2010-11 |2011-12 | |EFT/NEFT |2. 51. 956 |4. 11. 088 |9. 40. 000 |17. 90. 000 |
Card games Minutess
Debit card is a fictile card which provides an alternate payment method for hard currency when doing minutess. Debit card is chiefly used for hard currency withdraw from ATM. at point of sale ( Pos ) . on the cyberspace for on-line purchase. paying measures etc. From first January2011. RBI declared that for every dealing with debit card on ATM user has to come in watchword. Table 4: – Card based payment Transaction Value ( Rupees in Crores ) |Item/Year |2008-09 |2009-10 |2010-11 |2011-12 | |Credit Cards |61. 356 |62. 950 |80. 000 |1. 00. 000 | |Debit Cards |18. 547 |26. 566 |40. 000 |50. 000 |
Automated Teller Machines
Even though ATM originally developed for hard currency dispenses. now it includes many other bank related maps like financess transfer. buying on-line merchandises. Train tickets reserves etc. Table 5: – Growth in the ATM installing
|Year |2007-08 |2008-09 |2009-10 |2010-11 | |No. of ATMs. |34. 547 |43. 651 |62. 600 |79. 000 |
Real Time Gross Settlement ( RTGS )
RTGS is financess transportation system where transportation of money or securities takes topographic point from on Bank to another on a existent clip and on gross footing. Once processed. payments are concluding and irrevokable.
Bank cyberspace is a cyberspace based communicating web. It provides velocity of Financial Transactions. BANKNET is setup in 1991by the RBI. this is meant to ease transportation of inter-bank ( and inter –branches ) messages within India by Public Sector Banks who are members of this web.
Mobile Banking: –
Mobile Banking ( besides known as M-Banking. mbanking. smsbanking etc. ) is a term used for executing balance cheques. history minutess. payments. recognition applications etc via nomadic device such as a Mobile or Personal Digital Assistant ( PDA ) . Decision
Use of Technology in spread outing Banking is one of the cardinal focal point countries of Banks. IT helps for the Banks to supply better client service and to better their ain internal procedures. Efficient usage of engineering can cut down the personal interactions of clients with Banks has facilitated clip direction. By planing and offering simple. safe and unafraid engineering. Bankss reach at door measure of client with delight client satisfaction.