ASHRAF SHAIKH MMS-1- DIV-A ROLL NO:43

ROLE OF IT IN BANKING
INTRODUCTION: Banking environment has become highly competitive today. To be able to survive and grow in the changing market environment banks are going for the latest technologies, which is being perceived as an enabling resource that can help in developing learner and more flexible structure that can respond quickly to the dynamics of a fast changing market scenario. It is also viewed as an instrument of cost reduction and effective communication with people and institutions associated with the banking business. IT is increasingly moving from a back office function to a prime assistant in increasing the value of a bank over time. IT does so by maximizing banks of pro-active measures such as strengthening and standardising banks infrastructure in respect of security, communication and networking, achieving inter branch connectivity, moving towards Real Time gross settlement (RTGS) environment the forecasting of liquidity by building real time databases, use of Magnetic Ink Character Recognition and Imaging technology for cheque clearing to name a few. Indian banks are going for the retail banking in a big way The customers can view the accounts; get account statements, transfer funds and purchase drafts by just punching on few keys. The smart cards i.e., cards with micro processor chip have added new dimension to the scenario. An introduction of Cyber Cash the exchange of cash takes place entirely through Cyber-books. Collection of Electricity bills and telephone bills has become easy. The upgradeability and flexibility of internet technology after unprecedented opportunities for the banks to reach out to its customers. No doubt banking services have undergone drastic changes and so also the expectation of customers from the banks has increased greater.

1. NETWORK & CONNECTIVITY: Network connectivity has been provided to a total of 4201 locations. BSNL is theprincipal service provider for network of the branches. 800 branches are provided withVSAT backup from different service provider, namely, M/S Hughes. 300 Links procured fornewly opened branches. 275 VSAT have been installed as the primary links at branches wheresecondary link CDMA signal is weak. New Check Point Firewall with higher capacity has been installed at DC & DRC forsmooth functioning of new IT Projects ,SDR, LAPS, FI etc. as well as for the legacyapplications. Network uptime has increased to 98% from 96% in the previous year.

2. INTERNET BANKING Internet banking facility has been implemented for individual and corporate customers.Through Internet Banking customers can avail various facilities like Funds transfer, Online Tax credit view, Utility bill payment, On line Tax payment for Central Govt.departments and various state Govts., Airlines booking Movie ticketing, shopping, templedonations, Prime Ministers National Relief fund donations, Resonance andAllens carrier Institute fees collection, stop payment of cheques, view chequestatus, customized account statements in addition to regular statement of account, etc.Besides, there is also facility for on-line password generation for Retail customers.RTGS/NEFT facility is also available through Internet Banking for corporate customers. 3. ON-LINE TAX PAYMENTS. E-payment of Direct taxes, excise, service, DGFT license fee, West Bengal StateGovernment tax, Maharashtra Government Sale tax, VAT and Professional TAX, UP State Taxpayment, ICEGATE customs payment, Jharkhand Tax, Delhi Sales Tax, are available throughInternet Banking for on-line payment using Internet Banking. A new module for taxcollection of Odisha and Bihar Govt. where customers of more than 40 banks can pay taxeswith payment gateway services provided with the help of Central Bank Of India, has alsobeen made available. EPayment system for Ministry of civil services, Food and othere-PAOs has been made operational.

4. SMS BANKING: SMS banking provides account information to the customers with real-time alerts onbusiness transactions carried out by them. Presently, SMS alerts are sent to customers in15 different Indian languages as per their choice for i) Debit / Credit in account aboveRs. 1000/- in saving account and Rs. 50,000/- in Current / OD accounts ii) clearing chequeis bounced iii) account balance is below the prescribed minimum level iv) fixed depositmaturity before 7 days. SMS alerts are also sent to branch managers for maintaining control and monitoringpurposes and also to higher officials when physical cash is not tallied before EOD andwhen the outstanding balance in Technical contra at branches are unattended for certainprescribed numbers of days. SMS alerts is also proposed for Average weekly cash holdingabove 0.35% of average weekly deposit to Regional Manager. 5. MOBILE BANKING: Mobile Banking is implemented using GPRS with enquiry and funds transfer operations.The transaction done through Mobile Banking is secured with end to end inscription and twofactor authentication features. As per RBI guidelines for transaction up to Rs. 5,000 wehave implemented low security version of Mobile Banking. NEFT fund transfer facility isalso available in Mobile Banking application. 6. TELE BANKING: Phone banking solution is implemented with voice recording in English and Hindi and thefacility is available to all the customers of CBS branches. 7. MISSED CALL ALERTS: This facility is available to our CASA customers, whereby customers can get balance andlast three transactions free of cost by giving missed call to specific number. We havereceived appreciation from Indian Banks Association for this innovative initiative. 8. APPLICATION SUPPORTED BY BLOCKED AMOUNT (ASBA): Securities and Exchange Board of India has streamlined the existing process of InitialPublic offer of shares by companies and introduced a supplementary process called asApplication supported by Blocked amount (ASBA). We have launched the ASBA facilities toall our customers by which an investor can subscribe to public issues (IPO/FPO/RightsIssues) through the Bank by authorizing the bank to block the application from his/herbank account and

thereafter remit the allotment amount. Customers can also apply ASBAthrough Internet banking application for public issues only.

9. E-VOUCHER : E-Voucher Functionality has been implemented on 21.12.2011 under the system transactionare done through POS machine, facilitating customers to deposit / withdraw cash and alsoto do fund transfer within the bank up to the limit of Single Window Operator (SWO). Other initiatives are planned for current financial year are: integration of GRASserver of Govt. of Maharashtra, installation of 100 kiosks /e-lobby, integration ofE-fright for railways, payment system for LIC of India through Corporate Internet Banking.Integration with NPCI for Inter Bank Mobile Payment system, integration with IRCTC forrailway ticket booking through Internet Banking. 10. WEB SITE: Change in look and feel of the website has been done and ready for the productionpromotion. Modification in the on-line complaint module in the website is completed andinformed to the business department. For Internet Banking and Banks officialwebsite, M/s AAA Technologies Pvt. Ltd. has completed the Security Audit for the 4thquarter. 10. CHEQUE TRUNCATION SYSTEM (CTS) CTS implemented in Chennai on an outsourced model. CTS implementation in Bangalore onpilot basis was done on 24.03.2012 using outsourced model. Approval obtained forimplementation of CTS in Coimbatore, using outsourced model.

13. CALL CENTER Call Centre is operated on outsourced Model by IDBI Intech since July 6, 2011. CBSinterface has been provided at Call Centre with restricted view option enabling the CallCentre agents to provide various accounts level information to customers. Followingservices are being offered to customers through Call Centre.

 Information on Banks products and services. Information on Branch/ ATM Location. Information on Interest Rates and Services Charges. Balance Enquiry. Transaction Enquiry. Enquiry on Cheque Number. Debit Card Hot-listing. Enquiry on Interest Earned / Interest Paid.

CONCLUSION: In present day IT play an vital role in banking.Without computer it would be very hard to for bank to offer good customer service day in and day out.Computer help a bank save time and money, and can be used as an aid to generate profits. The impact of information technology on the banking industry,as banks are the intensive users of IT. The usage of IT can lead to lower costs, but on protability remains in conclusiveowing to the possibility of network eects that arise as a result of competition in nancial services. The paper analyzes both theoretically and empirically how information technology related spending can aect bank prots viacompetition in nancial services that are oered by the banks.