| The contemporary trends in Banking operations and | | | | POS. The client enters his personal identification |
| services with the help of computers are quite cheering | | | | number [PIN] and confirms the amount due. |
| for customer. As we find information technology | | | | Customer’s account is automatically debited with |
| invading the banking sector, only banks, which used the | | | | the amount of purchases and it credits the retailers |
| right technology, could come out with success. Banks | | | | account POS installed at petrol stations and large retail |
| are required to ‘restructure’, re-invent and | | | | houses are linked to banks network. |
| reengineer themselves go meet the necessary | | | | D-Mat Accounts: |
| performance improvement and get the competitive | | | | Transacting shares business through electronic |
| edge due to the introduction of information technology | | | | media is called D-Mat. Investor opens an account |
| (Internet Baking) being an imperative one | | | | called Demat Accounts with DPS. They get shares |
| Application of Information Technology | | | | in electronic form.. Then they send the actual shares to |
| Phone banking: | | | | the investor. Investor pays for the opening, |
| 1. Bank on phone, provides | | | | maintenance and collection of shares. This has |
| easy access for customers to have large businesses | | | | reduced the paper work, bad deliveries; loss of shares |
| through telephones. Data are exchanged over | | | | and less transaction cost. However delays in |
| the phone regarding any queries, to issue instructions | | | | demating, higher cost charged by the investors has not |
| on balance transfer, statement of account, cheque- | | | | given a good start for the growth and scope of |
| book, stop payments, new schemes, interest rates etc. | | | | Demat in India. Depository participant sometimes |
| at any convenient time and place. Tele banking has | | | | make illegal money at the cost of investors. SEBI |
| gone a long way in providing maximum customer | | | | should find ways to over come this to give a good |
| satisfaction within the limited infrastructure. | | | | scope for Demat in India. |
| Automatic Teller Machines: (ATM) | | | | Electronic Data Interchange-EDI: |
| 1. Now, the banks provide this facility in a more | | | | EDI refers to the electronic exchange of structure |
| sophisticated way that a customer of one bank and | | | | information using telecommunication like payment |
| branch can withdraw from any other banks, at any | | | | orders, debits credits, statement of account etc. As |
| other branch, nation wide. In developed countries, this | | | | part of EDI, satellite communication network is also |
| service is provided to their blue chip client globally. This | | | | entering the banks. EDI will very soon do away with |
| is possible only through worldwide networking and | | | | branch banking and the customers will be identified as |
| communication system. | | | | ban customer and not branch customer |
| Credit cards: | | | | E-cheques: |
| These plastic cards enable | | | | Digital cheque used by the payer to the payee through |
| customers to spend whenever he/she wants within | | | | internet is called e-cheques. Electronic versions of |
| the prescribed limits and pay later. Debit card is a | | | | cheques are issued, received and processed. Most |
| prepaid card with stored value, whereas credit card is | | | | of the banks use e-cheques. A secure means of |
| post paid with fixed limits. It is seen that spending is | | | | operation is provided for collecting, payments, and |
| higher through debit cards than with credit cards | | | | transferring cash flows through this method. The |
| currently CITY Bank and time bank have started with | | | | payer issues a digital cheque to the payee and the |
| Debit cards and now other banks are also following | | | | entire transactions are done through internet |
| these to launch their own cards. | | | | Benefits of Internet Banking Services |
| Electronic Funds Transfer: (EFT) | | | | 1.It reduces cost of both in services and |
| Electronic funds transfer is a | | | | administration |
| system of processing and communication of payment | | | | 2. Overcoming the geographical barriers |
| through electronic methods. EFT assumes greater | | | | 3. Cost minimized for customers |
| significance in the banking system as the RBI also | | | | 4. It helps to maintain customer loyalty |
| encourages the commercial banks to adopt this | | | | 5. Web site enables banks to develop |
| technique. Normally, payments are made through cash, | | | | advertisement |
| cheques, drafts and credit cards. The latest in this | | | | 6. Information technology enables banks to |
| process are the debit card system, charge, digital cash, | | | | deliver products and services |
| and electronic purse and so on. | | | | 7. Multimedia capabilities offer homogenous |
| SPNS- (Shared payment network system): | | | | branding |
| SPNS installed by the | | | | 8. Online banking encourages promotion of |
| IBA in the city of Mumbai, enables electronic banking | | | | various schemes of the bank |
| service like cash transactions, extended hours of | | | | 9. Individualized and customized services with |
| banking, utility payments, cheques, point of sale facilities | | | | the help of integrated customer data |
| by the SPNS can go to any ATM linked to SPNS. | | | | 10. Minimizing fraud and misappropriation by |
| Electronic Clearing Services [ECS]: | | | | inter-branch reconciliation Convenience to |
| Electronic clearing of | | | | customers – like card free banking, cash free |
| funds from one centre to another for handling bulk | | | | banking provides a domain of access to banking |
| transactions like salary, interest, dividend, commission | | | | services. |
| etc., has dispensed the cheques. A part of electronic | | | | From the discussions on the internet banking |
| clearing service is computerized clearing of cheques at | | | | services, it is felt that, this will enable the domestic |
| metropolitan centers and linking with international | | | | banks to challenge the competition from their foreign |
| communication system of SWIFT. These services | | | | rivals. Further, there will be a reduction in the staff |
| have contributed in a great way towards improving | | | | strength to a considerable extent due to the adoption |
| the customer’s services globally. ECS was | | | | of information technology and ultimately banks can |
| introduced in India in 1996. It has made it possible for | | | | provide timely services to customers to their fullest |
| customers to get the funds next day itself. | | | | satisfaction. |
| Point of sale [POS] terminal: | | | | |
| Payment card at | | | | . |
| a retail location for electronic transfer of fund is called | | | | |