Implementation of Core Banking Systems (CBS) in the Banks in India – With Special Reference to Urban Co-Operative Banks (UCB)

Abstract

This paper gives an overview of Implementation of Core Banking Systems in the Banks in India. This study is based on Secondary data. A bank is an institution which deals with money and credit. It accepts deposit from the public, makes the funds available to those who need them, and helps in the remittance of money from one place to another. It is a financial institution that creates demand deposits, that is deposit account which are subject to withdrawal by the owner on demand and subject to transfer to a third party by means of a cheque, in fact a modern bank performs such a variety of functions that is difficult to give a precise and general definition of it. CBS stand for Core Banking System or Core Banking Solution. Core Banking System is another way of saying the core functions of a bank. These functions represent the essential (core) business of banking. Because of the plethora of services banks now provide, it is easy to forget that the root of banking is the accepting deposits and lending money the definition of core banking may have been mudded by the emergence of package computer solution which combine core banking functions, with other elements of a bank’s operation but at the most basic level core banking manages financial transactions and their impact on the accounts of each customers. The core banking system will often offer a basic customer database function; often refer to as a customer information file or CIF. The customer of CBS is no more the customer of a branch he becomes the bank customer thus CBS is a step towards enhancing customer convenience through anywhere and anytime banking. Core banking became possible with the advent of computer and telecommunication technology that allowed information to be shared between bank branches quickly and efficiently. A few decades ago it used to take at least a day for a transaction to reflect in the account because each branch had their local servers, and the data from the server in each branch was sent in a batch to the servers in the data center only at the end of the day (EoD). Nowadays, most banks use core banking applications to support their operations where CORE Banking may stand for "centralized online real-time exchange". This basically means that the entire bank's branches access applications from centralized data centers. This means that the deposits made are reflected immediately on the bank's servers and the customer can withdraw the deposited money from any of the bank's branches throughout the world. These applications now also have the capability to address the needs of corporate customers, providing a comprehensive banking solution.