INTRODUCTION

BANKING SERVICES

CHARACTERSTICS OF BANKING

SERVICES

MACHINEAUTOMATED 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 SERVICESCENTRALISED BANKING SOLUTIONONLINE TAX PAYMENTCORPORATE INTERNET BANKINGONLINE SHOPPINGRETAIL INTERNET BANKINGFOREIGN EXCHANGEE-MONEY INDIAONLINE RAILWAY RESERVATIONDEPOSITORY SERVICEONLINE BILL PAYMENTONLINE TRADINGCUSTOMER 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 INDIASPEEDS UP THE PROCESS OF COLLECTION OF CHEQUESREDUCES THE SCOPE OF CLEARING-RELATED FRAUDSLOWERS THE COST OF COLLECTION OF CHEQUESOPERATIONAL EFFICIENCYBUSINESS PROCESS RE-ENGINEERINGADOPTION OF LATEST TECHNOLOGY

NEW APPROACH TO CTS IMPLEMENTATION IN OUR COUNTERYGRID BASED APPROACHUNDER 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 IMPLEMENTATIONRBI 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 RESPECTIVELYBASED 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