BANKING LATEST TRENDS

E-BANKING:
E-Banking means banking transactions carried with the help of computer system or electronic
device. It is banking over the internet. It is a part of virtual banking.

FEATURES:
1. Customer gets 24 hours and 365 days a year services, using personal computer, laptop
or any other electronic device.
2. It is a part of virtual banking.
3. Customers can make the permitted transactions from residence or office and even
while travelling. They need not go to the bank.
4. It gives sense of security to the customers. They do not face the risk of carrying cash.
5. Main forms of e-banking are: Electronic funds transfer system, NEFT, RTGS, ATM,
Debit Card, Credit Card, Core banking solution and SMS alert.

ADVANTAGES:
1. Customers get 24 hours and 365 days-a-year services.
2. Customers can make the permitted transactions from residence or office and even
while travelling.
3. Customers feel a sense of security. They do not face the risk of carrying cash.
4. Unlimited access to the bank increases customer satisfaction.

ADVANTAGES TO BANKS:
1. The bank gains a competitive advantage.
2. Centralized data base reduces load on branches.

DISADVANTAGES:
1. It adds to cost as it requires computer or mobile device all the time that too with
internet facility.
2. Illiterate people or the ones living in rural areas with no internet access derive no
advantage of this facility.

NEFT
National Electronic Funds Transfer (NEFT) is a system that facilitates individuals and
organisations having bank accounts to transfer funds from their accounts electronically to
individuals or organisations having bank accounts. Transfer of funds from one bank branch to
another or from one bank to another is settled in batches.

FEATURES:
1. Can be processed at NEFT enabled Bank/ Branch.
2. In order to receive fund, there must be an account in NEFT enabled Bank/ Branch.
3. Cash transfer is possible by individual firm or company.
4. No minimum or maximum amount in case of bank account.
5. Transaction takes place in batches.
6. If the customer does not have a bank account, maximum amount to be transferred is ₹
49,999.
7. Sender of funds has to pay certain charges.
8. Cannot be used for foreign remittances. It can be used to transfer within the national
boundaries only.
RTGS
It is a fund transfer system under which transfer of funds takes place from one bank to
another on a ‘Real Time’ and ‘Gross basis’. Real Time means, there is no waiting period abd
gross basis means, transactions are done on one to one basis rather than in batches.

FEATURES:
1. Real Time Gross Settlement (RTGS) facility is provided only by CBS enabled bank
branches.
2. RTGS transactions are processed individually and continuously rather than in batches.
3. The minimum amount in a RTGS transaction is rupees two Lakhs.
4. There is no upper ceiling for RTGS transactions.
5. The receiving or beneficiary bank must credit the customer’s account within 30
minutes of receiving the funds transfer message.
6. Timing of RTGS is 7 a.m. to 6 p.m.
7. It is irreversible/ irrevocable/ cannot be changed.
8. It can be used for foreign remittances.
9. No charges from the receiver.
10. Sender has to pay some charges.

BASIS RTGS NEFT

1. processing Transactions are settled on Transactions are settled after a
real-time basis and specified time and in batches.
individually
2. Amount Minimum ₹ 2 lakhs, no upper No upper or lower limit on
Limit limit on transfer of funds. transfer of funds.
3. Number of No limit on number of Limit of 6 transfers each weekday
Transfer transfers per day and 3 transfer on Saturday.

IMPS
Immediate Payment Service (IMPS) provides robust and real time fund transfer which
offers an instant, 24X7, interbank electronic fund transfer service that could be accessed
on multiple channels like Mobile, Internet, ATM, SMS. IMPS is an emphatic service
which allows transferring of funds instantly within banks across India which is not only
safe but also economical.

SHORT NOTES:
1. Electronic Funds Transfer System (EFTS):
Under this system, money can be transferred from one account to another account.
Examples of EFT:
a. Direct credits: Salary, pension, dividend on shares, interest on debentures,
commission, royalty, etc. are directly credited to the bank account of a person.
b. Direct Debits: Loan instalment, school fees, insurance premium, telephone bills,
electricity bills, water bills, club membership fee, credit card dues, etc. are directly
debited from the bank account of the account holder.
ADVANTAGES:
1. Payments are made on due dates.
2. There is no loss in transit.
3. There is no mishandling of cash.
4. Transactions are effortless.
ATM
Automated Teller Machine (ATM) is an automatic machine. A customer can withdraw or
deposit money with the help of this machine by inserting his ATM card and typing his
personal identity number (PIN). It provides 24 hours money without a human cashier,
clerk or bank teller. Using the ATM, the customers can access their bank deposits or credit
accounts in order to make a variety of transactions. For operating the ATM, the customer
has to insert his card in the machine or swipe it with the designated space of the machine.
After this, the machine asks the customer for ATM Pin. By filling the details of the
transaction, the ATM works. The customer can operate from anywhere in the country and
need not visit his/ her bank.

DEBIT CARD
A person can get a debit card by depositing money in the bank. The card holder can make
payment for the goods purchased or services. When the customer presents his debit card,
the terminal automatically transfers money from the buyer’s account to the seller’s
account. Debit card can also be used to withdraw money from the ATM.

FEATURES:
1. Issued by bank to the account holders at the time of opening a savings or current
account.
2. Meant to facilitate withdrawal of money through ATM.
3. Used to check account balance, transfer money, etc.
4. Used for shopping and making online payments.
5. Can be used to the extent customer has balance in his/her bank account.

CREDIT CARD
Anybody having good reputation can obtain a credit card from a bank. A person need not
have money in his bank to get a credit card. The card holder can buy goods and services
with the help of credit card. He keeps on depositing the money used as per the agreement
with the bank.

FEATURES:
1. Issued by finance company or a bank.
2. Issued at the discretion of issuer after satisfying himself of the credit worthiness of
applicant.
3. Allows holder of credit card to buy merchandise without actually paying for it at the
time of sale.
4. User has to pay monthly bill which include the transacted amount along with fee for
using the card.

BASIS DEBIT CARD CREDIT CARD

1. issuance It is issued to bank account It is issued at the discretion
holder at the time of of issuer after satisfying
opening a savings or himself of the credit
current account. worthiness of applicant.
2. withdrawal They are used to withdraw Money cannot be
money from ATM. withdrawn through a credit
card.
 3. Invoice/statement The holder gets an e- The holder gets monthly
statement on a regular bill for its use.
basis.
4. Account balance The card is useless if the The card extends credit for
holder’s account does not the holder and is not linked
have the required balance. to any bank account.

TELE BANKING
The personal computer of a customer is linked by telephone to the bank’s computer. The
customer can get information about the balance in his account and latest transactions on
the telephone. This facility is available round the clock.

CORE BANKING SOLUTION

Core Banking Solution (CBS) is a system where a customer becomes ‘customer of the
bank’ rather than ‘customer of a branch’. By opening a bank account in the branch the
customer can operate the same account in all the CBS branches of the same bank
anywhere across the country. It offers the following facilities:
a. Cash withdrawal facility from any of the CBS branches.
b. Updating of pass book at all CBS branches.
c. The facility of centralized corporate limits in all the CBS branches.

SMS ALERTS
Under this service, customer gives his/her mobile number. The bank records the mobile
number in its computer system in the customer’s account. Whenever, a transaction takes
place in the customer’s account the customer receives information about withdrawal and
deposits by an SMS on his/her mobile phone. The SMS states the nature and amount of
transaction, date of the transaction and the balance in the account on that date.

FEATURES OF MOBILE BANKING:

a. Available 24X7
b. It is a secure facility.
c. It is convenient to use.
d. Cost saving technology.
e. Novel way of selling banking and service products by bank.

DEMAND DRAFT
It is a negotiable instrument similar to a bill of exchange. A bank issues a demand draft to
a client (drawer), directing another bank (drawee) or one of its own branches to pay a
certain sum to the specific party (payee).

FEATURES:
1. It is drawn by one office of a bank upon another office of the same bank.
2. It is payable on demand.
3. Its payment has to be made to the person whose name is mentioned therein or
according to his order.

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