Core Banking

Core Banking Solution (CBS) is a banking service provided by a group of networked bank branches where customers may access their bank account, perform basic transactions, and avail banking services from any of the branch of the Bank on CBS network, regardless of where he maintains his account. The customer is no more the customer of a Branch. He becomes the Bank's Customer

A core banking solution must be technologically sophisticated and serve future business objectives. Core Banking is a flexible, powerful, long-term solution that will help you transform your bank into a next-generation financial institution.

For the bank, which implements CBS, the customer becomes the bank’s customer instead of customer of particular branch.

Execution of Core banking system across all branches helps to speed up most of the common transactions of bank and customer. In Core banking, the all branches access banking applications from centralized server, which is hosted in secured datacentre. Banking software/application performs basic operations like maintaining transactions, balance of withdrawal & payment, interest calculations on deposits & loans etc. These banking applications are deployed on centralized server & can be accessed using internet from any location.

Now a day, the use of Information Technology (IT) is must for the survival & growth of any organization and same applicable to banking industry also. By using IT in any industry, banks can minimize the operation cost; also, banks can offer products & services to customers at competitive rates.

CBS is required:

  • - To meet the dynamically changing market & customer needs.
  • - To improve & simplify banking processes so that bank staff can focus on sales & marketing stuff.
  • - Convenience to customer as well as bank.
  • - To Speed up the banking transactions.
  • - To expand presence in rural & remote areas.

Basic elements of CBS that helps customers are:

  • Internet Banking
  • Mobile Banking
  • ATM
  • POS & kiosk systems
  • Fund Transfers – NEFT, RTGS

Benefits of Core banking –

Core banking solutions are beneficial to both banks as well as customers.

Benefits For Customers

  • • Quicker services at the bank counters for routine transactions like cash deposits, withdrawal, passbooks, statement of accounts, demand drafts etc.
  • • Anywhere banking by eliminating branch banking.
  • • Provision of banking services 24 X 7.
  • • Fast payment processing through Internet banking, mobile banking.
  • • Anytime anywhere banking through ATMs.
  • • All branches access applications from central servers/datacentre, so deposits made in any branch reflects immediately and customer can withdraw money from any other branch throughout the world.
  • • CBS is very helpful to people living in rural areas. The farmers can receive e-payments towards subsidy etc. in his account directly. Transfer of funds from the cities to the villages and vice versa will be done easily.
  • Benefits For Banks

  • • Process standardization within bank & branches.
  • • Retention of customers through better customer service.
  • • Accuracy in transactions & minimization of errors.
  • • Improved management of documentation & records – having centralized databases results in quick gathering of data & MIS reports.
  • • Ease in submission of various reports to the Government & Regulatory boards like RBI.
  • • Convenience in opening accounts, processing cash, servicing loans, calculating interest, implementing change in policies like changing interest rates etc.
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