Impact Of Technology In Banking

In the wonderful world of banking and finance little or nothing stands still. The biggest change of all is in the, scope of the business of consumer banking. Banking in its traditional from is involved with the acceptance of debris from the customers, the lending of surplus of deposited money to appropriate customers who wish to borrow and transmission of funds. Aside from traditional business, banks these days provide a variety of services to meet the financial and non financial needs coming from all types of customers from the tiniest accounts holder to the most significant company and occasionally of non customers. The number of services offered differs from bank to bank depending mainly on the kind and size of the lender. visit this website

As being a central bank in a developing country, the Reserve Bank of India (RBI) has adopted development of the banking and financial market as one of its prime aims. “Institutional development” was the hallmark of this way from 1950s to 1974s. In the 1980s, the Reserve Bank aimed at “improvements in the productivity” of the banking sector. Staying convinced that technology is the key for increasing in productivity, the Hold Bank took several projects to popularize use of technology by banks in India.

Periodically, almost once in five years since the early 1980s, the Reserve Bank appointed committees and working Groups to deliberate as well as recommend the appropriate use of technology by finance institutions provide the circumstances and the need. These committees are as follows:
-Rangarajan panel -1 in early eighties.
-Rangarajan committee -11 at the end of eighties.
-Saraf working group in early 1990s.
-Vasudevan working group in late nineties.
-Barman working group in early 2000s.

Based on the advice of such committees and working groups, the Reserve Bank issued appropriate guidelines for the finance institutions. In the 1980s, consumption of technology for your back office businesses of the banks predominated the field. It was in the form of accounting of transactions and collection of MIS. In the inter-bank payment systems, it was in the form of clearing and settlement using the MICR technology.

Two momentous decisions of the Reserve Bank in the 1990s changed the situation for ever there are:
a) The prescription of mandatory use of technology in full measure by the new private sector financial institutions as a precondition of the license and
b) The establishment of the exclusive research institute for banking technology institute for development and Research in Banking Technology.

As the new private sector banks came on the scene as technology-savvy banks and offered several progressive products at the front office for absolutely free themes based on technology, the demonstration effect caught on the reset of the banks. Multi channel programs like machine based (ATMs and pc-Banking), card centered (credit/Debit/Smart cards), Communication structured (Tele-Banking and Internet Banking) ushered in Anytime and Anywhere Banking by the banks in India. The IDRBT has been critical in establishing a secure and secure, state of the art communication central source in the from of the Indian Financial NETwork (INFINET) as a sealed user group exclusively for the banking and financial sector in India.

Liberalization brought several changes to Indian service industry. Probably Indian banking industry learnt a tremendous class. Pre-liberalization, all we performed at a bank was deposit and withdraw money. Service standards were horrible, but all we could do was grin and bear it. Post-liberalization, the tables have turned. Is actually a consumer oriented market there.