| In the world of banking and finance nothing stands still. | | | | cherished dream. Interest rates are coming down and |
| The biggest change of all is in the, scope of the | | | | market has seen some innovative products as well. |
| business of banking. Banking in its traditional from is | | | | Other retail banking products are personal loan, |
| concerned with the acceptance of deposits from the | | | | education loan and vehicles loan. Almost every bank |
| customers, the lending of surplus of deposited money | | | | and financial institution is offering these products, but it |
| to suitable customers who wish to borrow and | | | | is essential to understand the different aspects of |
| transmission of funds. Apart from traditional business, | | | | these loan products, which are not mentioned in their |
| banks now a days provide a wide range of services | | | | colored advertisements. |
| to satisfy the financial and non financial needs of all | | | | PLASTIC MONEY |
| types of customers from the smallest account holder | | | | Plastic money was a delicious gift to Indian market. |
| to the largest company and in some cases of non | | | | Giving respite from carrying too much cash. Now |
| customers. The range of services offered differs from | | | | several new features added to plastic money to make |
| bank to bank depending mainly on the type and size of | | | | it more attractive. It works on formula purchase now |
| the bank. | | | | repay later. There are different facts of plastic money |
| RESERVE BANK'S EARLY INITIATIVES | | | | credit card is synonyms of all. |
| As a central bank in a developing country, the | | | | Credit card is a financial instrument, which can be used |
| Reserve Bank of India (RBI) has adopted development | | | | more than once to borrow money or buy products |
| of the banking and financial market as one of its prime | | | | and services on credit. Banks, retail stores and other |
| objectives. "Institutional development" was the hallmark | | | | businesses generally issue these. On the basis of their |
| of this approach from 1950s to 1970s. In the 1980s, the | | | | credit limit, they are of different kinds like classic, gold |
| Reserve Bank focused on "improvements in the | | | | or silver. |
| productivity" of the banking sector. Being convinced | | | | Charged cards-these too carry almost same features |
| that technology is the key for improving in productivity, | | | | as credit cards. The fundamental difference is you can |
| the Reserve Bank took several initiatives to popularize | | | | not defer payments charged generally have higher |
| usage of technology by banks in India. | | | | credit limits or some times no credit limits. |
| Periodically, almost once in five years since the early | | | | Debit cards-this card is may be characterized as |
| 1980s, the Reserve Bank appointed committees and | | | | accountholder's mobile ATM, for this you have to have |
| working Groups to deliberate on and recommend the | | | | account with any bank offering credit card. |
| appropriate use of technology by banks give the | | | | Over the years, the banking sector in India has seen a |
| circumstances and the need. These committees are | | | | no. of changes. Most of the banks have begun to take |
| as follows: | | | | an innovative approach towards banking with the |
| -Rangarajan committee -1 in early 1980s. | | | | objective of creating more value for customers and |
| -Rangarajan committee -11 in late 1980s. | | | | consequently, the banks. Some of the significant |
| -Saraf working group in early 1990s. | | | | changes in the banking sector are discussed below. |
| -Vasudevan working group in late 1990s. | | | | MOBILE BANKING |
| -Barman working group in early 2000s. | | | | Taking advantages of the booming market for mobile |
| Based on the recommendations of these committees | | | | phones and cellular services, several banks have |
| and working groups, the Reserve Bank issued suitable | | | | introduced mobile banking which allows customers to |
| guidelines for the banks. In the 1980s, usage of | | | | perform banking transactions using their mobile phones. |
| technology for the back office operations of the banks | | | | For instances HDFC has introduced SMS services. |
| predominated the scene. It was in the form of | | | | Mobile banking has been especially targeted at people |
| accounting of transactions and collection of MIS. In the | | | | who travel frequently and to keep track of their |
| inter-bank payment systems, it was in the form of | | | | banking transaction. |
| clearing and settlement using the MICR technology. | | | | RURAL BANKING |
| Two momentous decisions of the Reserve Bank in | | | | One of the innovative scheme to be launched in rural |
| the 1990s changed the scenario for ever there are:a) | | | | banking was the KISAN CREDIT CARD (KCC) |
| The prescription of compulsory usage of technology in | | | | SCHMME started in fiscal 1998-1999 by NABARD. |
| full measure by the new private sector banks as a | | | | KCC mode it easier for framers to purchase important |
| precondition of the license andb) The establishment of | | | | agricultural inputs. In addition to regular agricultural loans, |
| an exclusive research institute for banking technology | | | | banks to offer several other products geared to the |
| institute for development and Research in Banking | | | | needs of the rural people. |
| Technology. | | | | Private sector Banks also realized the potential in rural |
| As the new private sector banks came on the scene | | | | market. In the early 2000's ICICI bank began setting up |
| as technology-savvy banks and offered several | | | | internet kiosks in rural Tamilnadu along with ATM |
| innovative products at the front office for the | | | | machines. |
| customers based on technology, the demonstration | | | | NRI SERVICES |
| effect caught on the reset of the banks. Multi channel | | | | With a substantial number of Indians having relatives |
| offerings like machine based (ATMs and pc-Banking), | | | | abroad, banks have begun to offer service that allows |
| card based (credit/Debit/Smart cards), Communication | | | | expatriate Indians to send money more conveniently to |
| based (Tele-Banking and Internet Banking) ushered in | | | | relatives India which is one of the major improvements |
| Anytime and Anywhere Banking by the banks in India. | | | | in money transfer. |
| The IDRBT has been instrumental in establishing a safe | | | | E-BANKING |
| and secure, state of the art communication backbone | | | | E-Banking is becoming increasingly popular among retail |
| in the from of the Indian Financial NETwork (INFINET) | | | | banking customers. E-Banking helps in cutting costs by |
| as a closed user group exclusively for the banking and | | | | providing cheaper and faster ways of delivering |
| financial sector in India. | | | | products to customers. It also helps the customer to |
| CHANGING FACE OF BANKING SERVICES | | | | choose the time, place and method by which he wants |
| Liberalization brought several changes to Indian service | | | | to use the services and gives effect to multichannel |
| industry. Probably Indian banking industry learnt a | | | | delivery of service by the bank. This E-Banking is |
| tremendous lesson. Pre-liberalization, all we did at a | | | | driven by twin engine of "customer-pull and Bank-push". |
| bank was deposit and withdraw money. Service | | | | CONCLUSION |
| standards were pathetic, but all we could do was grin | | | | Technology has been one of the most important |
| and bear it. Post-liberalization, the tables have turned. | | | | factors for the development of mankind. Information |
| It's a consumer oriented market there. | | | | and communication technology is the major advent in |
| Technology is revolutionizing every field of human | | | | the field of technology which is used for access, |
| endeavor and activity. One of them is introduction of | | | | process, storage and dissemination of information |
| information technology into capital market. The internet | | | | electronically. Banking industry is fast growing with the |
| banking is changing the banking industry and is having | | | | use of technology in the from of ATMs, on-line banking, |
| the major effects on banking relationship. Web is more | | | | Telephone banking, Mobile banking etc., plastic card is |
| important for retail financial services than for many | | | | one of the banking products that cater to the needs of |
| other industries. | | | | retail segment has seen its number grow in geometric |
| Retail banking in India is maturing with time, several | | | | progression in recent years. This growth has been |
| products, which further could be customized. Most | | | | strongly supported by the development of in the field |
| happening sector is housing loan, which is witnessing a | | | | of technology, without which this could not have been |
| cut-throat competition. The home loans are very | | | | possible of course it will change our lifestyle in coming |
| popular as they help you to realize your most | | | | years. |