Innovative banking way to the future

Updated on June 10, 2022, 5:34 a.m.

The Indian Banking Segment is well organised due to the great job done by the Reserve Bank of India. Our financial and economic situation is progressive compared to other nations in the world and our banks have stood the test of Recession, Political Uncertainty, Terrorism and the onslaught of the Pandemic to a great extent.

India has good history of private and public banking and the oldest bank is the State Bank of India. Furthermore, the three Presidency Banks consisting of the Bank of Calcutta, Madras and Bombay were established under the British East India Company. The 3 banks merged in 1921 to form the Imperial Bank of India, and this later became the State Bank of India in 1955 after independence.

The government issued a decree on July 19, 1969 stating that all the 14 largest banks will get nationalised thereby bringing many banks under their control. Another set of 6 banks were nationalised in 1980. After this the Indian Banking Segment saw tremendous growth and development as most of them were subject to centralised direction and the controls. Banks had less autonomy as the deposit and the lending rates were regulated by the government.

Over the next coming years from 1991 onwards, the Indian Banks began to have crisis leading to tightening of the monetary policies, putting pressure on the customer from the middle and weaker sections. Innovation said to have started during this period.

Developments in IT led to having wideranging economic growth and this led to enhancement of the banking segment and improve the front-end operations to deliver quality customer service. The Reserve Bank has been actively involved in connecting technology for the development of the Indian banking sector over the years.

Types Of Innovative Banking

The vital way where in the technology has changed the face of the Indian banking sectors is because of the Information Technology and entry of the Foreign and Private Sector banks. This has forced the Public Sector Banks to address the computerisation in the recent years. The Central Vigilance Commission wants modernisation to check frauds and other illegal activities.

There are various banks handling accounts and some of the innovative banking techniques available are as follows:

Core Banking Solutions (CBS)

The Core Banking Solution is a networking process, where in the servers of the bank are connected to a common centralised server and thus enabling the account holder to access, deposit, do all banking services and withdraw money from any branch of the relevant bank.  It is highly secured using the Close Circuit Cameras CCTV.

This is the major component of the banks IT systems and stressed on the concept of effective Customer management, Transaction processing and other Account related activities. This encouraged to develop a 360-degree view of the customers relationship with the bank, there by forming an essential component of the Customers Relationship Management CRM and getting the delight of the customer.

Corporate Banking

The format of banking dealing with customers of the corporate world is known as the Corporate Banking. It is the major source of profit and loans that they give to the customers of any Public or Private Banks. The services offered will be consisting of the Credit and the Cash management facilities.

The services will be consisting of Credit, Treasury related services, Fixed Asset financing, Trade Finances, Cash management services and the Employee and Employer Services and the Commercial Services.

Investment Banking

This is a unique division of banking dealing with the creating the capital of other Companies, Governments and other units. They endorse the new debt and the relevant equity securities for various types of corporations, help in the mergers and sell the securities of the companies. They offer the guidance to the issuing authorities regarding the placement of the stocks. Furthermore, they also play a major role in assisting various Corporations, Governments and other groups to manage various projects, saving them lot of time and money by looking at the risks and mitigate the risks.

Rural Banking

The banks established in India to act as Cooperative, Financial establishment set up in the rural communities and assist the people in the rural areas and enhance the standard of living. Unlike the Urban banks the rural areas will have more customers and the bank will be set up with the sole motive of enhancing the living of the customers and offering them the loan facility for agricultural and commercial purposes. Credit must be given to former PM Indira Gandhi, playing a major role in rural development.

NRI Banking

This facility was introduced by the private banks in 1970and later moved on to the public banks to protect the interest of the Non-Resident Indians living abroad and help them do various financial transaction with comfort. They also have individual, Savings, Current and the Fixed Deposits under this category as well.

An individual who is living more than 180 days in a year and spent less than a year in India in the last 5 years is termed as the NRI (Non-Resident Indian). This facility prevents NRI from visiting India for doing any financial transaction by taking break from his or her busy work schedule.

ATM Services

The major concept of banking will be the extensive usage of the Automated Teller Machines (ATM) from 1990. The first nation to use the ATM was USA in 1960. It is a unique kiosk where in you can do the all-banking transactions without visiting the branch and avoid long queues. At present every bank in the nation is giving the ATM facilities to its customers.

The Debit Card is a unique plastic card displaying the Customers Name, Expiry Date, and a CVV number at the back, helping customers around the world to withdraw money any time anywhere.

All banks have been instructed by the RBI to put a unique system of Online Alerts for all cardholders, irrespective of the amount involved due to increase in the fraud related cases.

Telephone Banking

Telephone banking is creating ripples in banking segment where in the customer using Telebanking can access their accounts details, activities like Debit and Credit the money, Order Statements and Change address, Block Card, Mobile Number Change, Order new Card, Chequebooks and others using the IVR-Interactive Voice Responses. They also offer the T-PIN to the customers.

Mobile and SMS Banking

The entry of the Smart Phones is the ultimate medium for extending the banking services in India and getting the cynosure among the people from various walks of life. The number of people using mobile is 1.21 million in India and banks are exploring the chance of encouraging the people to use banking services in Mobile.

This service is available 24 hours in a day and 7 days in a week.

The SMS banking is the major constituent where it encourages the customers to perform all the transactions and they get messages instantly in their mobile. The mobile banking is the amazing area of development in banking segment and will replace the Credit and Debit Cards in the future. All the banks in India are offering the SMS facility to its customers. It is also a form of banking that travels with you and offers the option to use your banking account from any place in India.

Services Offered by the Mobile Banking in India

There are various facilities offered by the Mobile Banking by various banks like SBI, AXIS, ICICI, CORPORATION BANK, CANARA Bank and others. They are as follows:

  • Change of Pin
  • Change Email
  • Funds Transfer
  • Change Address
  • Account Balance
  • Balance Enquiry
  • Recent Transactions
  • Change Mobile Number
  • Send the Money Abroad
  • Recharge Mobile Number
  • Check the Mini Statements
  • Checking the Account Status
  • Cheque Book Request and Stop
  • Credit and Debit Card Statements
  • Blocking of Lost Debit and Credit Cards
  • Payment of the mobile bills Prepaid and Post-paid

The Indian banking sector is emerged as a powerful banking industry after technological growth and good in retaining and expanding its customer base. They concentrate on achieving the customer delight and credit must go to the private bank acting as a brilliant catalyst to ignite the fire of contest, where in the public banks can also progress. So, it is rightly said that Innovative Banking will definitely lead to Convenience banking in the years to come.

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