UNIT 5
Banking
UNIT 5 RECENT TRENDS IN
BANKING
Introduction, New technologies in Banking, E-
services, debit and Credit cards, internet
Banking, Electronic fund Transfer, MICR,
RTGS, NEFT, IMPS, UPI, ECS, payment banks,
digital wallet, Crypto currency, Mobile
banking, FINTECH ,Any other recent
developments in Banking- {self study} .
E BANKING
E-banking refers to providing/ availing
banking services through any electronic
media and technology with out any
geographical barrier
RECENT TRENDS IN BANKING
AND FINANCIAL SERVICES
E-services
EFT
RTGS
NEFT
Internet Banking
Mobile banking
ATM
DEMAT
MICR
BENEFITS OF E BANKING
Round the clock Banking
Convenient Banking:
Low cost banking service:
Increase in profit
Quality Services:
Reduce the time
CHALLENGES
High start-up cost.
Security issues
Training and Maintenance:.
Lack of professional knowledge
Restricted Business
Less customer interaction
Traditional banking E- banking
Customer should go to bank to avail the Customer can do banking activates any
services where with computer and network
Physical structure is essential Reduce the use of physical structure
Working hours only from 10 am to 3 pm Works round the clock
It take more time to get things done Takes minimum time for transactions
ELECTRONIC FUNDS TRANSFER (EFT)
EFT is the system used to transfer of funds
from one bank account to another account
instantly in the same city, between cities and
countries using electronic technology and
telecommunication
NATIONAL ELECTRONIC FUND TRANSFER SERVICE-
FEATURES[NEFT
Under this system customer request bank to
transfer money to a specified by providing
account detail like beneficiary account
number, ifsc code and name of beneficiary .
Bank will execute the transaction batch wise
on regular interval.
REAL-TIME GROSS SETTLEMENT
(RTGS)
Real-Time Gross Settlement (RTGS) is a fund
transfer method via which money is sent
immediately without any delays.
the system of processing transactions
individually and not in batches.
RTGS is meant for larger value transactions
and the minimum amount that can be sent
via this mode is Rs.2 lakh.
FEATURES
It is a safe and secure source of sending and getting
money.
It will facilitate the real-time transfer of the funds
right online.
It is also a reliable source as it is maintained by RBI.
As it is used for high-value transactions - the
minimum transaction in this mode is Rs. 2 lakhs.
The fees and the charges of RTGS will depend on the
amount of transfer.
The time for RTGS will differ from one bank to
another.
It can either be done online or also by physically
visiting the bank.
MOBILE BANKING
It’s a system that allows the customer of a
bank to conduct banking transaction through
his personnel mobile
INTERNET BANKING
Its an electronic system that enables the
customer of bank to conduct financial
transaction through the website operated by
the bank
DEMAT ACCOUNT
DEMAT account is account offered by bank as
the capacity of depository participant where
shares are kept in electronic format
AUTOMATED TELLER MACHINE
(ATM):
It is a electronic computerized machine
which works through telecommunication
network designed to perform banking
activities like withdrawal of money, transfer
of money etc depositing cash any other value
added services without any human
interaction
DEBIT CARDS
A debit card is plastic card with magnet
character embossed in it , issued to an
account holder against their savings account
or current count. The card allows the
customer to purchase good and services,
withdraw money and to avail other value
added services
CREDIT CARDS
Credit card is a payment card issued by bank
to its users which allows the customer to
utilize the credit facility sanctioned by
[Link] holder can use it for withdraw
money and Pos. End of the month card
holder can repay the amount to bank
MAGNETIC INK CHARACTER RECOGNITION
(MICR)
It is a character-recognition technology used
in cheque leaf which facilitates processing
and clearance of cheque. The MICR numbers
are encoded at the bottom of cheque which
denotes cheque number, bank code ,city
code and type of account. The technology
allow the scanning to read the characters
and enter the information in the system
FINTECH
Fintech is an innovation that describes a group of new
technologies designed to enhance and automate the use and
delivery of financial services.
It describes any business that uses technology to modify,
enhance, or automate financial services for businesses or
consumers.
Financial technology (also called FinTech) is an industry
composed of companies that use technology to offer financial
services
Some examples include mobile banking, peer-to-peer payment
services (e.g., Venmo, CashApp), automated portfolio managers
(e.g., Wealthfront, Betterment), or trading platforms such as
Robinhood. It can also apply to the development and trading of
cryptocurrencies (e.g., Bitcoin, Dogecoin, Ether).
CRYPTO CURRENCY
Cryptocurrency , is any form of currency that exists
digitally or virtually and uses cryptography to
secure transactions.
Cryptocurrencies don't have a central issuing or
regulating authority, instead using a decentralized
system to record transactions and issue new units.
Cryptocurrencies are a digital representation of value
considered by their holders as a means of payment.
Examples of virtual currencies include Bitcoin,
Litecoin, and XRP.
Digital currencies are stored in and transacted
through designated software, applications, and
networks in digital form
DIGITAL WALLET
A digital wallet (or electronic wallet) is a
financial transaction application that runs on
mobile devices. It securely stores your
payment information and passwords. These
applications allow you to pay when you're
shopping using your device so that you don't
need to carry your cards around. You enter
and store your credit card, debit card, or
bank account information and can then use
your device to pay for purchases.
UNIFIED PAYMENT INTERFACE
A Unified Payment Interface (UPI) is a
smartphone application that allows users to
transfer money between bank accounts. It is a
single-window mobile payment system
developed by the National Payments
Corporation of India (NPCI). It eliminates the
need to enter bank details or other sensitive
information each time a customer initiates a
transaction.
.
FEATURES- UPI
UPI is a system that integrates multiple bank
accounts into a single mobile app from any
participating bank..
The Unified Payment Interface is a real-time
payment system.
It is designed to enable peer-to-peer inter-
bank transfers through a single two-click
factor authentication process.
The interface is regulated by the Reserve
Bank of India (RBI), India's central bank.
It works by transferring money between two
bank accounts along with a mobile platform
PARTICIPANTS IN UPI
Payer PSP
Payee PSP
Remitter Bank
Beneficiary Bank
NPCI
Bank Account holders
Merchants
ELECTRONIC CLEARING SERVICE
(ECS)
ECS is an electronic mode of payment / receipt for
transactions that are repetitive and periodic in
nature.
ECS is used by institutions for making bulk
payment of amounts towards distribution of
dividend, interest, salary, pension, etc., or for
bulk collection of amounts towards telephone /
electricity / water dues, cess / tax collections,
loan instalment repayments, periodic investments
in mutual funds, etc.
ECS facilitates bulk transfer of money from one
bank account to many bank accounts or vice versa
using the services of a ECS Centre at a ECS location
TYPES OF ECS
ECS Credit
ECS credit is used for allowing credit to a large number of
beneficiaries by raising a single debit to the customer’s
account, such as dividend, interest or salary payment.
Advantages
The end beneficiary need not make frequent visit to his bank
for depositing the physical paper instruments.
Delay in the realisation of proceeds, which used to happen
in the receipt of the paper instrument, is eliminated.
The ECS user helps to save on administrative machinery for
printing, dispatch and reconciliation.
Provides the ability to make payment and ensure that the
beneficiaries account gets credited on a designated date.
TYPES OF ECS
ECS Debit
ECS debit is used for raising debits to a number of accounts of
consumers or account holders for affording a single credit to a
particular institution, in cases such as utility payments like
electricity bills and telephone bills.
Advantages to Clients
Trouble-free: Eliminates the need to go to the collection centres or
banks and the need to stand in long queues for payment.
Easy to track: Customers are not required to track down payments
by last dates. The ECS users would monitor the debts. The ECS user
saves on administrative machinery for collecting the cheques
by monitoring their realisation and reconciliation.
Better cash management: Chances of frauds due to fraudulent
access to paper instruments and encashment are avoided.
The realisation of payments on a single date is enabled instead of
fractured receipt of payments
