Page 246 - DCOM208_BANKING_THEORY_AND_PRACTICE

Unit 14: Core Banking Solution

Notes
banking services to enable national and international trade and business, investment and
foreign exchange and treasury services. Right from its inception the bank focused more on
incorporating advanced technology. The bank operated the largest chain of ATMs in the
country, which amounted to more than 450 in 2000. All the bank's branches were fully
computerized and networked through V-SAT5 technology...
The Future

Despite the rosy predictions and increased corporate activity, the Indian Internet banking
system is facing many hurdles. The problems include operational risks, security risks,
system architecture risks, reputational risks and legal risks.
Apart from the security issues, there are a host of other problems like:
PC user base in India is extremely low compared to global standards.
The Internet user base is limited.

Lack of infrastructure to advanced technology based banking services.
The absence of a regulatory framework for Internet banking transactions in India.
The mindset of the Indian consumer, who prefers personal interactions and is not
very comfortable, doing transactions through the Internet.
Limited awareness about the potential of Internet banking on the part of banks
Question
Prepare a report on the basic concepts of Internet banking, its working mechanism and
benefits.
Source: www.icmrindia.org

14.12 Summary

Core banking is a term used to describe the services offered by a group of interconnected
bank branches.
Core Banking Solutions (CBS) is a procedure which is realized in a centralized environment

RTGS can be defined as the continuous (real-time) settlement of funds transfers individually
on an order by order basis (without netting)
NEFT is a country-wide payment system providing one-to-one funds transfer.
Electronic funds transfer refers to the computer-based systems used to perform financial
transactions electronically. It is a system of transferring money from one bank account
directly to another without any paper money changing hands.

Asset Liability Management is the process involving decision making about the
composition of assets and liabilities including off balance sheet items of the bank and
conducting the risk assessment.
Anti Money Laundering is the term used by banks and other financial institutions to
describe the diverse measures to combat this illegal activity and to forbid criminals from
using individual banks and the financial system in general as the channel for their proceeds
of crime.

Money laundering is traditionally done in three stages, called Placement, Layering and
Integration.

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