RECENT TRENDS IN BANKING

 
Electronic Payment Services – E-Cheques – this technology will eventually replace the
conventional paper cheque. India, as forerunner to the introduction of e-cheque, the Negotiable
Instruments Act (Section 6) has already been amended to include; Truncated cheque and E-
cheque instruments.
 
Real Time Gross Settlement (RTGS) system, introduced in India since March 2004, is a system
through which electronics instructions can be given by banks to transfer funds from their account to
the account of another bank. The RTGS system is maintained and operated by the RBI and provides
a means of efficient and faster funds transfer among banks facilitating their financial operations. As
the name suggests, funds transfer between banks takes place on a ‘Real Time' basis. Therefore,
money can reach the beneficiary instantaneously and the beneficiary's bank has the responsibility to
credit the beneficiary's account within two hours. (upper limit of twenty lakh)
 
National Electronic Funds Transfer (NEFT) is a system whereby anyone who wants to make
payment to another person/company etc. can approach his bank and make cash payment or give
instructions/authorization to transfer funds directly from his own account to the bank account of the
receiver/beneficiary. Complete details such as the receiver's name, bank account number, account
type (savings or current account), bank name, city, branch name etc. should be furnished to the bank
at the time of requesting for such transfers. RBI is the service provider. (upper limit of two lakh)
 
Electronic Clearing Service (ECS) is a retail payment system that can be used to make bulk
payments/receipts of a repetitive nature and of relatively smaller amount. This facility is meant for
companies and government departments to make/receive large volumes of payments rather than for
funds transfers by individuals. 

Automatic Teller Machine (ATM) is the most popular devise in India, which enables the customers
to withdraw their money 24 hours a day 7 days a week. It is a devise that allows customer who has an
ATM card to perform routine banking transactions without interacting with a human teller. In
addition to cash withdrawal, ATMs can be used for payment of utility bills, funds transfer between
accounts, deposit of cheques and cash into accounts, balance enquiry etc. 
               
Mobile Banking facilitates the customer to do entire non-cash related banking on telephone. Under
this devise Automatic Voice Recorder is used for simpler queries and transactions. For complicated
queries and transactions, manned phone terminals are used.
 
SWIFT (Society For Worldwide Inter-Bank Financial Telecommunications) is a co-operative
society. SWIFT provides rapid, secure, reliable and cost effective mode of transmitting the financial
messages worldwide. At present more than 3000 banks are the members of the network. It is a
method of the sophisticated message transmission of international repute. This is highly cost
effective, reliable and safe means of fund transfer. This network also facilitates the transfer of
messages relating to fixed deposit, interest payment, debit-credit statements, foreign exchange etc.
This system ensure against any loss of mutilation against transmission.

Internet banking is a system of accessing accounts and general information on bank products and
services through a computer while sitting in its office or home. This is also called virtual banking.

Biometric Technology: Linking of Aadhaar number to accounts has enabled banks to recognise their
customer by evaluating one or more distinguishing biological traits like face, hand, retina, voice and
ear features in wake of an issue. The growth of such technology is far more reliable and will continue
to spread across in the times to come, since it can eliminate the requirement of multiple passwords
and PINs.

Artificial Intelligence: Artificial Intelligence has provided personalised services by dealing with

each customer and focusing on his or her specific requirements. It will be used to collect information
and automatically build models based on that information.  It is used to analyze legal documents and
extract important data points and clauses, where manual review requires approximately 360,000
hours, AI could review the same in a few seconds. It communicates with users to provide account
information and helps customers reset their passwords. It anticipates the unique financial needs of
each customer and helps them reach their financial goals by providing smart recommendations.

Bitcoin: Bitcoin is a cryptocurrency, a form of electronic cash. It is a decentralized digital currency

without a central bank or single administrator that can be sent from user-to-user without the need for
intermediaries. In India, the RBI hasn’t yet authorised the use of bitcoins cautioning the users,
holders and traders of bitcoins about the potential financial, operational, legal, customer protection
and security related risks. Blockchain Technology: NITI Aayog is creating ‘IndiaChain’- India’s
largest blockchain network, to reduce fraud, speed up contract enforcement and increase
transparency in India. Blockchain is considered un-hackable due to time stamps that mark a data
entry. The blockchain is a powerful technology that enables Bitcoin (virtual currency) to be open,
anonymous, and secure. The blockchain essentially is a database about every Bitcoin transaction in
detail.

UPI- A Unified Payment Interface (UPI) is a single-window mobile payment system developed by
the National Payments Corporation of India (NPCI). It eliminates the need to enter bank details or
other sensitive information each time a customer initiates a transaction. The interface is regulated by
the Reserve Bank of India (RBI), India's central bank. It works by transferring money between two
bank accounts along a mobile platform.The system is said to be a safe and secure method of
transferring money between two parties, and cuts out the need to transact with physical  cash or
through a bank. The pilot system was launched in India on April 11, 2016. The user can access
balances and transaction histories along with sending and receiving money. In order to send money,
the user will require an account number, the Indian Financial System Code (or IFSC, which is an
alphanumeric code that facilitates electronic transfers), mobile number of the recipient, a virtual ID
or Aadhaar number (which is like a Social Security number).