INTRODUCTION

BANKING SERVICES CHARACTERSTICS OF BANKING SERVICES MACHINEAUT OMATED TELLER PHONE BANKING ONLINE SERVICES POINT OF SALE SYSTEM INTERNET BANKING

ONLINE SERVICES

AUTOMATTED TELLER MACHINE

POINT OF SALE SYSTEM

PHONE BANKING

INTERNET BANKING

RECENT TRENDS IN BANKING SERVICES  CENTRALISED BANKING SOLUTION  ONLINE TAX PAYMENT  CORPORATE INTERNET BANKING  ONLINE SHOPPING  RETAIL INTERNET BANKING  FOREIGN EXCHANGE  E-MONEY INDIA  ONLINE RAILWAY RESERVATION  DEPOSITORY SERVICE  ONLINE BILL PAYMENT  ONLINE TRADING  CUSTOMER CARE FACILITY

CHEQUE TRUNCTION SYSTEM  CHEQUE TRUNCTION SYSTEM IS A CHEQUE CLEARING SYSTEM UNDERTAKEN BY RBI FOR CLEARING OF CHEQUES  YOU MUST HAVE NOTICED ADVERTISEMENTS IN NEWSPAPERS PUT UP BY BANKS URGING ACCOUNT HOLDERS TO STOP CIRCULATING NON –CTS COMPLIANT CHEQUES AND REPLACE THEIR OLD CHEQUE BOOKS WITH NEW CTS ENABLED ONES

NEED OF CHEQUE TRUNCATION SYSTEM IN INDIA  SPEEDS UP THE PROCESS OF COLLECTION OF CHEQUES  REDUCES THE SCOPE OF CLEARING-RELATED FRAUDS  LOWERS THE COST OF COLLECTION OF CHEQUES  OPERATIONAL EFFICIENCY  BUSINESS PROCESS RE-ENGINEERING  ADOPTION OF LATEST TECHNOLOGY

NEW APPROACH TO CTS IMPLEMENTATION IN OUR COUNTERY  GRID BASED APPROACH UNDER THIS APPROACH THE ENTIRE CHEQUE VOLUME IN THE COUNTRY CLEARED ACROSS NUMEROUS MICR CHEQUE PROCESSING LOCATIONS WILL BE CONSOLIDATED INTO THE THREE GRIDS EACH GRID WILL PROVIDE PROCESSING AND CLEARING SERVICES TO ALL THE BANKS UNDER ITS JURISDICTION,BANKS,BRANCHES AND CUSTOMERS BASED AT SMALL LOCATIONS

STATUS OF CTS IMPLEMENTATION  RBI HAS IMPLEMENTED CTS IN THE NATIONAL CAPITAL REGION,NEW DELHI,CHENNAI AND MUMBAI WITH EFFECT FROM FEBRUARY 1,2008,SEPTEMBER 24,2011 AND APRIL 27,2013 RESPECTIVELY  BASED ON THE ADVANTAGES REALISED BY THE STAKEHOLDERS AND THE EXPERIENCE GAINED FROM THE ROLL-OUT IN THESE CENTRES,IT HAS BEEN DECIDED TO OPERATIONALISE CTS ACROSS THE COUNTRY

THE PROCESS OF CHEQUE TRUNCTION

1) Capturing of the Data

2) Sending the Data to a central processing unit for onward transmission to payee Bank 3)Providing of an interface/gateway called Clearing House Interface (CHI) to drawee banks 4)Transmission of the data to the drawee banks

5) Receipt of the data by drawee banks and generation of return file for unpaid instruments 6) Processing of the return files by CHIs and transmitting the same to the presenting banks 7) Completion of Clearing cycle

BENEFITS OF CTS TO CUSTOMERS SHORTER CLEARING CYCLES SUPERIOR VERIFICATION AND RECONCILIATION NO GEOGRAPHICAL RESTRICTIONS OPERATIONAL EFFICIENCY REDUCTION IN RISKS

CHEQUE STANDARDISATION AND CTS 2010 STANDARD  Standardisation in terms of size, MICR band, quality of paper  Benchmarks for standardisation are collectively known as “CTS-2010 STANDARD”

GLOBALISED CHALLENGES IN BANKING

 Basel II Implementation  Enhancing Corporate Governance  Compliance with International Accounting Standards  Outsourcing Risks  Application of advanced technology  Capacity building  Other challenges

BASEL II IMPLEMENTATION  Comprehensive risk management  Capital Efficiency

CORPORATE GOVERNANCE  Risk Management Failure  Poor management of conflicts of Internet  Inadequate understanding of key banking risks  Poor internal Audit

COMPLIANCE WITH INTERNATIONAL ACCOUNTING STANDARDS International Standards – “ Core Principals for Effective Banking Supervision ”

OUTSOURCING RISKS

APPLICATION OF ADVANCED TECHNOLOGY  Inadequate investment in technology  Wasteful expenditure and challenge of getting the maximum advantage

CAPACITY BUILDING  Capacity Building to handle advanced risk management  Equiping the staff with desired skills and motivating and retaining them

OTHER CHALLENGES FACED BY BANKS  Increased Competition from domestic and international market  High Transaction Costs  Frequent Changes in key policy rates and reserve rates by RBI  Maintaining Sufficient Liquidity

CONCLUSION