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Core Banking System

Why we need Core Banking Technology?
Nowadays, the use of Information Technology (IT) is must for the survival & growth of any organization and same applicable to banking industry also. By using IT in any industry, banks can minimize the operation cost; also banks can offer products & services to customers at competitive rates.

CBS is required :
  • To meet the dynamically changing market & customer needs.
  • To improve & simplify  banking processes so that bank staff can focus on sales & marketing stuff.
  • Convenience to customer as well as bank.
  • To  Speed up the banking transactions.
  • To expand presence in rural & remote areas.

Basic elements of CBS that helps customers are :
  • Internet Banking
  • Mobile Banking
  • ATM
  • POS & kiosk systems
  • Fund Transfers – NEFT, RTGS

Benefits of Core banking –
Core banking solutions are beneficial to both banks as well as customers.

A] Benefits For Customers
  • Quicker services at the bank counters for routine transactions like cash deposits, withdrawal, passbooks,  statement of accounts, demand drafts etc.
  • Anywhere banking by eliminating branch banking.
  • Provision of banking services 24 X 7.
  • Fast payment processing through Internet banking, mobile banking .
  • Anytime any where banking through ATMs.
  • All branches access applications from central servers/datacenter , so deposits made in any branch reflects  immediately and customer can withdraw money from any other branch throughout the world.

B] Benefits For Banks
  • Process standardization within bank & branches.
  • Retention of customers through better customer service.
  • Accuracy in transactions & minimization of errors.
  • Improved management  of documentation & records – having centralized databases results in quick gathering of data & MIS reports.
  • Ease in submission of various reports to the Government & Regulatory boards like RBI.
  • Convenience in opening accounts, processing cash, servicing loans, calculating interest, implementing change in policies like changing interest rates etc..

In India most of the private sector banks have implemented the Core banking solutions but most of the Co-operative Bank, Regional Rural Banks are missing the benefits of CBS.With the help of core banking & latest technology, private sector banks are giving tough competition to urban co-operative banks(UCBs) & other government managed banks. To cope up with the growing needs of customers; co-operative banks need to implement core banking solutions. To face the challenges of dynamic market , UCBs need to take help of IT their operations . Considering the importance of the matter, the Reserve Bank of India (RBI)   mandated a deadline for Urban Co-operative Banks (UCBs) and advised to implement the core banking solutions (CBS) by December 31, 2013.