BANK & BANKING

BANK AND BANKING

Finance is the life blood of trade, commerce

and industry.
Development of any country mainly depends
upon the banking system.
The term bank is either derived from old
Italian word banca or from a French word
banque both mean a Bench or money
exchange table.
Oxford Dictionary defines a bank as "an
establishment for custody of money, which it
pays out on customer's order."
A bank is a financial institution that serves as
a financial intermediary.
Functions of bank are known as banking.

What are banks

Institutions which deals in money and credit.
An intermediary, which handles other

peoples money both for their advantage and

to its own profits.
A financial institution that flows funds from
savers to the users.
Plays an important role in the economy of any
country as they hold the saving of the public.

BANKING
Under Banking Regulation Act,1949 ,
banking includes accepting deposits
from public, for the purpose of lending
or investment; and repayable on
demand
or otherwise and withdrawable by check
,
draft, order or otherwise .

Characteristics / Features of a
Bank
Dealing in Money
1.Bank is a financial institution which deals with other
people's money i.e. money given by depositors.
2.Individual / Firm / Company
3.A bank may be a person, firm or a company. A banking
company means a company which is in the business of
banking.
4.Acceptance of Deposit
5.A bank accepts money from the people in the form of
deposits which are usually repayable on demand or after
the expiry of a fixed period. It gives safety to the deposits
of its customers. It also acts as a custodian of funds of its
customers.
6. Giving Advances
A bank lends out money in the form of loans to those who
require it for different purposes.

Characteristics / Features
of a Bank
5. Payment and Withdrawal
A bank provides easy payment and
withdrawal facility to its customers in the
form of cheques and drafts, ATM. It also
brings bank money in circulation. This
money is in the form of cheques, drafts, etc.
6. Agency and Utility Services
A bank provides various banking facilities
to its customers. They include general utility
services and agency services.
7. Ever increasing Functions

Significance of Banks
Savings Mobilisation
Remittance of Funds
Well Developed

Money market
Development of
Capital Market
Public Finance
Financing the Nation
Risk Free Investment
Corporate Services
Social Banking

Evolution of Banking
in India
Banking in India originated in the first decade of 18th

century with The General Bank of India (1786),

Followed by Bank of Hindustan.
Three presidency banks established in India. Bank of
Bengal(1809), the Bank of Bombay and the Bank of
Madras, were established in 1840 and 1843,
The three presidency banks were amalgamated into
the Imperial Bank of India (IBI) under the Imperial Bank
of India Act, 1920 which is now known as the State
Bank of India.(1955)
A couple of decades later, foreign banks like Credit
Lyonnais started their Calcutta operations in the 1850s.
The first fully Indian owned bank was the Allahabad
Bank, which was established in 1865.
By the 1900s, the market expanded with the
establishment of banks such as Punjab National Bank,
in 1895 in Lahore and Bank of India, in 1906, in

Evolution of Banking
in India
The Reserve Bank of India was set up in 1935 to

monitor banking system in India & post independence

regulator power were given.
Banking Regulation Act of India, 1949
Nationalisation of 14 Banks-1969(These banks were
the Central Bank of India, Bank of Maharashtra, Dena
Bank, Punjab National Bank, Syndicate Bank, Canara
Bank, Indian Overseas Bank, Indian Bank, Bank of
Baroda, Union Bank, Allahabad Bank, United Bank of
India, UCO Bank and Bank of India)
Second Dose of Nationalisation(6) 1980(Andhra Bank,
Corporation Bank, New Bank of India, Oriental Bank of
Commerce, Punjab and Sind Bank, and Vijaya Bank)
Narasimham Committee Reforms-1990s
First Phase of Reforms: 1991-92 to 199798(Financial Health and Soundness)
Second phase 1998-99 and

Indian Banking
Sector:overview
Market size is Rs 77 trillion
The country has 87 scheduled commercial

banks with deposits worth Rs.71.6 trillion

Of this, 26 are public sector banks, which
control over 70 per cent of Indias banking
sector, 20 are private banks and 41 are foreign
banks.
Of the total, 41 banks are listed with a total
market capitalization of Rs.9.35 trillion (US$
158.16 billion)
Reaches out to only about half of the

THE INDIAN BANKING SYSTEM

Public
Sector
Banks

l SBI and its

7associates
*19 nationalized
banks
*Regional Rural
banks
(sponsored by
Public sector
banks)

Private
Sector
Banks

*New
Generation
pvt Sector
banks
*Foreign banks
*Scheduled
Cooperative
Banks
*Nonscheduled
Banks

Cooperative
Banks

*Central CB
*State CB
*Primary
Agricultural
Societies
*Urban CB

Development
Banks

* Industrial
Finance
Corporation
of India
(IFCI)
*Industrial
Investment
Bank of
India
(IIBI)
*SIDBI
*NABARD
*Exim Bank
*National
Housing
Bank (NHB)

STUCTURE OF THE
ORGANISED BANKING
SECTOR IN INDIA

Central bank
A bank which is entrusted with the functions of guiding

and regulating the banking system of a country.

It acts as Governments banker, maintain deposit
accounts of all other banks and advances money to
other banks, when needed.
known as the bankers bank.
It also advises the Government on monetary and credit
policies and decides on the interest rates for bank
deposits and bank loans. In addition, foreign exchange
rates are also determined by the central bank.
Another important function of the Central Bank is the
issuance of currency notes, regulating their circulation
in the country by different methods.
The Reserve Bank of India is the central bank of our
country.

Commercial Banks
Commercial Banks are banking institutions that accept

deposits and grant loans and advances to their

customers.
Types of Commercial banks:
Public sector banks,
Private sector banks and
Foreign banks.
Development Banks
Meets medium and long-term capital needs of the
business
Also undertake other development measures like
subscribing to the shares and debentures issued by
companies, in case of under subscription of the issue by
the public
Co-operative Banks
When a co-operative society engages itself in banking
business it is called a Co-operative Bank

Functions of commercial
banks
A. Primary Functions
a) Accepting Deposits
b) Advancing Loans

B. Secondary Functions
c)Agency Functions
d)General utility Services

Account
2)Current or Demand
Deposit
Account
a)Accepting
Deposits
3)Saving Deposit
Account
4)Recurring Deposit
Account

b) Advancing Loans
1)Cash credit
2)Overdraft
3)Demand Loans
4)Short Term Loans

AGENCY
FUNCTIONS

I. Collection and payment of various items:

Bank collect cheques,rent,interest and
also make payment of taxes, insurance
premium.
II. Purchase of sale and security:
Banks are more knowledgeable with
regard of stoke and share business, they
provide security to their customers.
III. Trustee and Executer:
Banks also acts as trustees and executers
of the property of their customers.

IV. Remitting of Money:

Banks remit money at distance place
though bank drafts.
V. Purchase and sale of foreign exchange:
Banks buy and sell foreign exchange,
promoting international trade.
VI. Letter of Reference:
Banks give information about economic
position of customers to domestic and
foreign traders.
VII. Underwriting:
Banks Underwrite the sale of new shares.

GENERAL UTILITY
SERVICES

I. Locker facilities:
Banks provide locker facilities to their
customers.
II. Travelers cheque and Letters of credit:
Banks issue traveler's cheque and letters of
credit to avoid the risk of carrying cash.
III. Business Information and Statistics:
Banks give advice to customers on financial
matters.
IV. Help in Transportation of goods:
Banks help big businessmen and
industrialists in transportation of goods from
production centre to consumption centers.

Difference b/w primary and

secondary functions:
Primary Functions
1.These are the main
activities of the bank.
2. These are the main
source of income of the
bank.
3.These are obligatory on
the part of bank
performance.

Secondary functions
1.These are the secondary
activities of the bank.
2. These are not main
source of income of the
bank.
3.These are not obligatory
on the part of bank
performance.

Role of Commercial Banks in

the Economic Development
of a Country
Banks promote capital formation

The banks are not only the store houses of

the countrys wealth, but also provide

financial resources necessary for economic
development.
provision of credit & finance
Credit is the pillar of development,
lubricate all commerce & trade
Nerve centre of all commerce & trade
Promotion of trade and industry
The use of bank draft, check, bill of
exchange, credit cards and letters of credit
etc has revolutionized both national and
international trade.

Role of Commercial Banks in

the Economic Development
of a Country
Development of agriculture

Raised agriculture productivity and

income of the farmers.

Balanced development of different
regions
They help in transferring surplus capital
from developed regions to the less
developed regions.
Influencing economy activity
Availability of credit
The rate of interest
Implementation of Monetary policy
Promote Industrial Development

Role of Commercial Banks in

the Economic Development
of a Country
Monetization of the economy

Existence of non-monetised sector is a

hindrance in the economic development

of the country
Export promotion cells
Innovations
Facilities of bank loans enable the
entrepreneurs to step up their investment
on innovational activities, adopt new
methods of production and increase
productive capacity of the economy

Role of Commercial Banks in

the Economic Development
of a Country
Banking is thus used to achieve the

national policy objectives of reducing

INEQUALITIES OF INCOME AND WEALTH,
REMOVAL OF POVERTY AND
ELIMINATION OF UNEMPLOYMENT IN THE

COUNTRY.

Traditional Services Offered By

Banks
Exchange of Currency
Commercial Notes and Loans
Offering Savings Deposits
Safekeeping of Valuables
Supporting Government Activities with Credit
Selling Insurance Products
Checking Accounts
Trust Services

Corporate Services of Banks

Working capital loans
Short term & Long term loans
Financial Advice
Cash Management
Equipment Leasing
Venture Capital Loans
Security Underwriting and Brokerage

Services
Mutual Funds and Annuities
Merchant Banking Services

Diversification in Bank
operations
Diversified to non-traditional para-banking

activities such as
Factoring and Forfaiting
Primary dealer system
Venture capital financing
Retail banking
Insurance
Loan syndication and consortium financing

Banking Innovations
Retail Banking
Bank as authorized dealer
Customer service
Lead Bank scheme
Service area approach
Micro finance
Consortium approach
Credit cards
Local Area Banks

Technology and Banking

The Nature of Banking harmonizes closely with
Technology
Tasks Common to
Both

Banking

Information
Storage
Processing
Transmission

Technology

Innovative Risk
Management
Complex Credit
Calculations

Global Operations

Pervasive Branch
Network
Mass Transaction
& Items Processing

Banking and Technology

Many Benefits of Technology

Increased

operational efficiency, profitability &

productivity
Superior customer service
Multi-channel, real-time transaction processing
Better cross-selling ability
Improved management and accountability
Efficient NPA and risk management
Minimal transaction costs
Improved financial analyses capabilities

Focus aspects of Commercial Banking

now are:

BANKS BUSINESS

Electronic
Banking
Any Branch
Banking
CRM

MIS & Intranet

ATMs
POS Terminals
and Cash
dispenser

Corporate
Network

Card
Management
Document
Management

RAISING DE

Risk
Management
BANKS BUSINESS

Resource
Managemaent

LOANS & MISC. SERVICES

Core
Banking (CBS)

POS Terminal and Cash Dispenser

POS Terminal
Connected to
Cash
dispenser

ATM

Electro
nic
Banking

Branc
h
Branch 3
Banki
ng

Branch 2

Branch 1

Head
Office

Branch n

Branch 4

Branch 5
Branch 6

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Benefits to Customer
More convenience & flexi timings
Better awareness of products & services
Up-to-date information on accounts
Low cost of accessing the accounts

(1984 and 1989)

recommendations and
Technological
later progressed
Developments
in India
through the Saraf
Committee (1993) and
the Vasudevan
Committee (1998)
recommendations.

Core Banking Solutions

(CBS)
pooling data at central server
transactions of delivery channels from

delivery points (branch/atm) feed online to

host no back office
host database is up to the minute
39end of day (eod) and start of day (sod)
tasks performed at branches will be done
by host server
eliminates br reconciliation work
staff productivity bank customer!

Definition of E-Banking

It is defined as the automated delivery of

new and traditional banking products and

services directly to customers through
electronic, interactive communication
channel.
Objectives of E-banking
To attain the ability to pursue value
creation opportunities.
It provides a clear view on the benefits to
corporate and private customs
It provides useful insights for its readers
on the security concern and the
technological focus areas of the e-banking
industry.

Technology-based Banking
Products & Services
Balance inquiry
Transaction

information
Funds transfer
Cash Management
Automated
Bill payment
clearinghouse (ACH)
Bill presentment
transactions
Loan applications Internet Payments
Wireless Banking
Data Storage

INTRODUCTION
British actor Reg Varney
using the world's first ATM in
1967, located at a branch of
Barclays Bank, Enfield. The
system was developed by De
La Rue

Email Money Transfer

A retail banking service that allows users to

transfer funds between personal accounts

using email and their online banking
service.
Email money transfers are considered
secure because only the notification of
transfer is done through email.
The actual funds are settled through the
existing funds transfer networks that banks
have used for years.

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SWIFT www.swift.com

Society

for Worldwide Inter-bank Financial

Telecommunication
HQ La Hulpe, Brussels, Belgium
Provides reliable, fast tele-communication
facilities for exchange of financial messages all
over the world between Banks and FIs
As non-profit making co-operative society in
1973 by 239 banks in 15 countries
Hubs in Brussels, New York and Netherlands
Rules in 1975; first message in 1977
>7,000 members in 200 countries now
Handles over 7 million messages every day
India a member since 1991
88 Indian banks are members as on date

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SWIFT contd...

Any Bank / FI can become a member

Allots an address called Bank Identi-fication

Code (BIC) of 8 characters

Enables members to send secure and reliable
messages authenticated...
Correspondent bank arrangements...
Advantages: 24 hours service, system based
fraud-free faster accurate confidential
funds/LCs/Guarantees

Internet banking
Enables banking customers to operate their

accounts from anywhere, anytime, removing

the restrictions imposed by geography and
time.
It's a platform that enables the customers to
carry out their banking activities from their
desktop, aided by the power and
convenience of the Internet.
Following normal banking transactions can
be performed online:
Funds transfer between own accounts. like
Third party transfers , Group Transfers &
Inter Bank Transfers to accounts with other

Credit PPF accounts across branches

Request for Issue of Demand Draft
Request for opening of new accounts
Request for closure of Loan Accounts
Request for Issue of Cheque Book

Apart from these, the other salient value-

added features available are:

Utility bill payments
Online Ticket Booking for travel by Road, Rail and

Air
Insurance premia payments & Mutual funds
Investments
Credit Card dues payments
Tax Payment Income, Service, State Govt
Customs Duty Payment
Online Share Trading
Online Application for IPO

Development of E-banking
Contd
The service was developed by Stanford
Federal Credit Union, which is a financial
institution.
In May 1995 : Wells Fargo - the first bank in
the world to offer customer access to their
accounts over the internet(allows customer to
see their accounts online)
The online banking services are becoming

Development of E-banking
in India
ICICI was the first bank to initiate the
Internet
banking revolution in India as early as
1997
under the brand name 'Infinity.
ICICI Bank kicked off online banking way
back in 1996 . But even for the Internet
as a
whole, 1996 to 1998 marked the
adoption
phase, while usage increased only in
1999-

RBI & E-Banking

The Reserve Bank of India constituted a
working group on Internet Banking.
The group divided the internet banking
products in India into 3 types based on the
levels of access granted.
They are:- i) Information Only System: ii)
Electronic Information Transfer System: iii)
Fully Electronic Transactional System:

Information Only System

General purpose information
like interest rates, branch
location, bank products and
their features, loan and deposit
calculations are provided in the
banks website.
There exist facilities for
downloading various types of
application forms.

Contd..

There is no interaction

between the customer and

bank's application system.
No identification of the
customer is done. In this
system, there is no
possibility of any
unauthorized person
getting into production

Electronic Information
Transfer System

The system provides customer- specific information in

the form of account balances, transaction details, and
statement of accounts.
The information is still largely of the 'read only' format.
Identification and authentication of the customer is
through password.
The information is fetched from the bank's application
system either in batch mode or off-line.
The application systems cannot directly access through
the internet.

Fully Electronic Transactional

System
This system allows bi-directional capabilities.
Transactions can be submitted by the customer
for online update.
This system requires high degree of security
and control. In this environment, web server and
application systems are linked over secure
infrastructure.
It comprises technology covering
computerization, networking and security, interbank payment gateway and legal infrastructure .

Automated Teller Machine

(ATM)
ATM is designed to perform

the most important function of

bank.
It is operated by plastic card

with its special features.

The plastic card is replacing

cheque, personal attendance

of the customer, banking hours

Automated Teller
Machine (ATM)
An automated teller machine (ATM) is a

computerized telecommunications device

that provides the customers an access to
financial transactions in a public space without
the need for a human clerk or bank teller.
On most modern ATMs, the customer is
identified by inserting a plastic ATM card with
a magnetic stripe or a plastic smartcard with a
chip, that contains a unique card number and
some security information, such as an
expiration date or CVV(card verification value).
Security is provided by the customer entering

a personal identification number (PIN)

How ATM works

How ATMs Work

Provides the necessary information by means of the card

reader and keypad.

The ATM forwards this information to the host processor,
which routes the transaction request to the cardholder's
bank.
If the cardholder is requesting cash, the host processor
causes an electronic funds transfer to take place from the
customer's bank account to the host processor's account.
Once the funds are transferred to the host processor's bank
account, the processor sends an approval code to the ATM
authorizing the machine to dispense the cash.
The processor then ACHs the cardholder's funds into the
merchant's bank account, usually the next bank business
day. In this way, the merchant is reimbursed for all funds
dispensed by the ATM.
"ACH" is short for "automated clearing house
Means that a person or business is authorizing another
person or business to draft on an account.

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SWADHAN

Launched in 1997
India's FIRST Shared

Payment Network
Service(SPNS) covers > 1000 ATMs in 64
cities
55 member banks in the network, which
include nationalized, private and foreign
banks
Enables member banks to share their ATMs
with other participating banks
Objective - reduce the huge investment
being made by the banks to deploy ATMs in
different locations

SBIs Mobile ATM in

Kerala

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Mobile Banking
Mobile Banking refers to provision and

availing of banking- and financial services

with the help of mobile telecommunication
devices.
The scope of offered services may include
facilities to conduct bank and stock market
transactions, to administer accounts and to
access customized information.

REASONS OF GENESIS OF
MOBILE BANKING
Introduction of new technologies.
Controlcosts,removalofcostduplication
Cater to increasing online channel customers
Personalize customer interactions

CLASSIFYING SERVICES
On the basis of originator of service session
1.Push
2.Pull
.On the basis of nature of service
1.Transaction Based
2.Enquiry Based

Push Based
Transaction Based

Enquiry Based

Pull Based
* Fund Transfer
* Bill Payment
* Other financial
services like share
trading.

* Credit/Debit Alerts.
* Minimum Balance
Alerts
* Bill Payment Alerts

* Account Balance
Enquiry
* Account Statement
Enquiry.
* Cheque Status
Enquiry.
* Cheque Book
Requests.
* Recent Transaction
History.

Technology behind
Mobile Banking
SMS (Short messaging service)
GPRS (General Packet Radio Service)
USSD (Unstructured Supplementary Service

Data)
(USSD) is a protocol used by GSM cellular

telephones to communicate with the service

provider's computers

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ECS

Electronic Clearing Scheme (ECS) operated

by the RBI since 1996-97

Utilises BANKNET and INFINET
Facilitates payment from a single account
at a bank branch to any number of
accounts maintained with the branches of
the same or other banks Eg., Payment of
dividends
RBI has also launched ECS Debit for
payment
to
utility
companies
like
Telephones, Electricity etc

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BANKNET
Set up in 1991 by RBI
Meant to facilitate transfer of inter-bank/

inter-branch messages within India by

Public Sector banks who are members of
this network
Wide connectivity - Major Centres like
Mumbai, Delhi, Calcutta, Madras, Nagpur,
Bangalore, Hyderabad, Pune, Ahmedabad,
Kanpur, Lucknow, Chandigarh, Kochi,
Jaipur, Bhopal, Patna, Bhubaneshwar,
Thiruvanantha-puram, Guwahati, Panaji,
Jammu, etc

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INFINET
Indian Financial Network
Set up by RBI in June 1999
Satellite based WAN using VSAT (Very

Small Aperture Terminal) technology

The hub and Network Management
System of INFINET are located in the
Institute for Development and Research in
Banking Technology, Hyd
Major applications: E-mail, Electronic
Clearing Service - Credit and Debit,
Electronic Funds Transfer
http://www.idrbt.ac.in/index_fromsm.html?infinet1.

html?infinet

RTGS(Real Time Gross

Settlement)
Transfer of money from one bank to another

on a real time basis and on gross basis.

This is the fastest possible money transfer
system through the banking channel.
Real time means payment transaction is not
subjected to any waiting period
Gross settlement means the transaction is
settled on one to one basis without bunching
with any other transaction.
Once processed, payments are final and
irrevocable .

Minimum / maximum
amount stipulation for
RTGS transactions
The RTGS system is primarily for large

value transactions.
The minimum amount to be remitted
through RTGS is Rs.2 lakh
There is no upper ceiling for RTGS
transactions
The RTGS service window for customer's
transactions is available from 9.00 hours to
16.30 hours on week days and from 9.00
hours to 12.30 noon on Saturdays for
settlement at the RBI end.

Inward transactions Free, no charge to be

levied
Outward transactions
Rs. 2 lakh to Rs. 5 lakh - not exceeding Rs. 25
per transaction.
Rs. 5 lakh and above not exceeding Rs. 50
per transaction.
As on 23 February, 2011 there are more than
74,000 RTGS enabled bank branches.
On a typical day, RTGS handles about 60,000
transactions a day for an approximate value of
Rs.2,700 billion.

NEFT
National Electronic Funds Transfer (NEFT) system is

a nation wide funds transfer system to facilitate

transfer of funds from any bank branch to any other
bank branch.
NEFT operate on a deferred net settlement (DNS)
basis which settles transactions in batches.
In DNS, the settlement takes place at a particular
point of time. All transactions are held up till that
time
As on December 31, 52427 branches of 89 banks
are participating. Steps are being taken to widen the
coverage both in terms of banks and branches.

Processing
Charges/Service Charges
a) Inward transactions at destination bank branches (for

credit to beneficiary accounts) Free, no charges to be

levied from beneficiaries
b) Outward transactions at originating bank branches
charges applicable for the remitter
- For transactions up to Rs 10,000 : not exceeding Rs
2.50 (+ Service Tax)
- For transactions above Rs 10,000 up to Rs 1 lakh: not
exceeding Rs 5 (+ Service Tax)
- For transactions above Rs 1 lakh and up to Rs 2 lakhs:
not exceeding Rs 15 (+ Service Tax)
- For transactions above Rs 2 lakhs: not exceeding Rs 25
(+ Service Tax)

IFSC Code and MICR

Code
Indian Financial System Code (IFSC) is an
alpha numeric code designed to uniquely
identify the bank-branches in India.
This is 11 digit code with first 4 characters
representing the banks code, the next
character reserved as control character
(Presently 0 appears in the fifth position)
and remaining 6 characters to identify the
branch.

IFSC Code and MICR Code

MICR is the name given to the technology used in

printing the code.

One of the modes for safe and effective payments
across the country. Introduced in early 80s by RBI
Every bank branch is given a unique MICR code and this
helps the RBI to identify the bank branch and speed up
the clearing process.
The MICR code has nine digits in it
For example, State Bank of India (SBI) Mumbai (Central)
MICR code will be 400002009 wherein:
400, the first three digits representing the city code for
Mumbai;
002, the next three digits representing the bank code
for SBI;
And 009, the last three digits representing the bank
branch code for Andheri (West).

Credit creation and

Deployment of Funds
Creation of credit is an important function of a

commercial bank.
A banks demand deposits arise mainly from :Cash deposits by customers and Bank Loans
and Investments.
Cash Deposits By Customers : These are termed as primary deposits as they

arise from the actual deposits of cash in a bank

made by its customers.

Credit creation and

Deployment of Funds
Bank Loans And Investments :These are termed as derivative or active deposits.
The derivative deposits are lent in the form of

loans or advances, discounting of bills or used for

purchasing securities or other assets.
Every loan creates a deposit, which increase the
quantity of bank money
The size of derivative demand deposits is
determined by the banks lending and investment
activities.
Primary deposits serve as a basis for creating
derivative deposits, that is credit creation, and for
increasing money supply.

Credit creation and

Deployment of Funds
Example :-

Suppose the Cash Reserve Ratio is 20% and a person

deposits Rs. 10,000/- with Bank of India. This is primary deposit.

Bank Clearing house

The clearing house is a voluntary association

of banks under the management of a bank

where the settlement accounts are
maintained.
Wherever Reserve Bank of India has its office
(and a banking department), the clearing
house is managed by it. In the absence of an
office of the Reserve Bank, the clearing house
is managed by the State Bank of India, its
associate banks and in a few cases by public
sector banks.
In India there are about 1050 cheques

Bank clearing house

The RBI plays a pivotal role in the development of

Indias payment and settlement systems for both

large-value and retail payments.
The central bank played a pioneering role in
automating the paper-based clearing system in the
1980s.
It introduced an electronic funds transfer system and
electronic clearing services (ECS Credit and Debit) in
the 1990s.
The special electronic fund transfer (SEFT) system
was introduced in April 2003 (subsequently
discontinued in March 2006, after the implementation
of the National Electronic Fund Transfer (NEFT) system
in November 2005) and
the real-time gross settlement (RTGS) system in
March 2004.