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Digital Banking
• Digital banking refers to the digital technologies provided by banks for their
services replacing traditional banking system.
• Digital banking's objective: Provide a standard as well as comfortable
online and mobile banking services by integrating their digital technologies.
• 360-degree benefits: Through digital banking, all the activities like balance
update, fund transfer, deposition or withdrawal of cash, passbook update,
bank account opening is made easier at single click without the need of
visiting the bank branch.
• Banker friendly: Digital banking benefits the customers as well as bankers.
Banks are using CSM (cash sorting machine) for cash-counting, Digital lamps
for cheque verification, enhanced software’s for calculations and data
storage, software’s to update their all inventories of bank-like cheque books,
account-opening kit, debit-credit cards, locker details etc.
• Examples of digital banking: Internet banking, Mobile banking, Wallet
banking, Customer Service, Digital Cash, ATM, SMS Services and IVR calling,
etc.
Parts of Digital Banking
Internet Banking
• Internet banking is a facility offered by banks and financial institutions for
customers to use banking services over the internet.
• If one wants to use internet banking services, one must register for this
facility while opening the account or later.
• Customers availing Internet Banking must use their registered customer ID
and password to log into your internet banking account.
Mobile Banking
• It is just like an internet banking. Customer can perform all banking activities
through a mobile phone with the help of bank mobile app like iMobile of
ICICI, YONO of SBI.
• These apps can perform wide variety of activities like fund transfer, bill
payment, online shopping, etc.
Core Banking System (CBS)
• Core Banking Solutions (CBS) is a type of solution that enables banks to
offer a multitude of customer-centric services on a 24x7 basis from a single
location, supporting retail as well as corporate banking activities.
• It is a centralized system developed by bank which allows its customers to
conduct banking activities from anywhere and any branch of the bank.
• A customer can avail banking services from any branch of the bank which is
on CBS network irrespective of a branch in which account has been opened.
• It is basically banking software with web-platform for centralized data
management and branchless banking.
• Example: E-Kuber is the CBS of RBI, Finacle (Infosys) and BanCS (TCS)

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National Electronic Fund Transfer (NEFT)

• National Electronic Funds Transfer (NEFT) is an electronic fund transfer
system that works on Deferred Net Settlement (DNS) basis which resolves
transactions in batches.
• It facilitates one-to-one funds transfer.
• Under this facility, any customer can electronically transfer funds from any
bank branch to any individual, firm or corporate having an account with any
other bank branch in the country.
• NEFT is made available for 24*7 by RBI now.
• Minimum Transaction Limit: NIL
• Maximum limit: Rs 10 Lakh
• There are no charges for transfer of funds in NEFT
• Note: Maximum amount per transaction for cash-based remittance and
remittance to Nepal is limited to Rs 50,000.
Real Time Gross Settlement (RTGS)
• RTGS is the continuous (real-time) settlement of funds individually on an
order-by-order basis (without netting).
• Under this facility, the transfer of funds is done individually on an order by
order basis (without any delay).
• It is primarily meant for large value transactions.
• This system is available on all days.
• The transactions under RTGS have legal backing.
• Minimum Transaction Limit: Rs 2 Lakh
• It is generally used for corporate transactions.
Indian Financial System Code (IFSC)
• IFSC is an 11-digit alpha-numeric code which identifies a bank-branch
participating in the NEFT & RTGS system.
• IFSC is used by NEFT system to identify the originating / destination
banks/branches and also to route the messages appropriately to the
concerned banks/branches.
• IFSC code represent:
o First 4 alpha characters indicates bank name
o Fifth characters is 0
o Last 6 characters indicates bank branch.

National Payments Corporation of India (NPCI)

• Established: 2008 under Section 8 of Companies Act
• NPCI is an umbrella organization for all retail payments system in India.
• It was set up with the guidance and support of the RBI and Indian Banks’
Association (IBA).
• Headquarters: Mumbai, Maharashtra
• It aims to allow Indian citizens to have unrestricted access to ‘e-payment’
services.
• Its recent work of developing Unified Payments Interface (UPI) 2.0 aims to
move India to a cashless society with only digital transactions.

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Unified Payments Interface (UPI)

• Launched: 11th April 2016
• This single mobile application helps users in accessing different bank
accounts.
• It is an instant payment system to transfer money between two parties bank
accounts.
• It is a similar to NEFT or RTGS transfers in that way.
• It is developed by the National Payments Corporation of India (NPCI).
• Immediate money transfer through mobile device round the clock 24*7 and
365 days.
• The different channels for transferring funds using UPI are:
o Transfer through Virtual ID
o Account Number + IFSC
o Mobile Number + MMID
o Aadhaar Number
o Collect / Pull money basis Virtual ID

Immediate payment service (IMPS)

• Launched: 22nd November 2010.
• It offers an instant, 24X7, interbank electronic fund transfer service through
mobile phones.
• It was built upon NFS network.
• It is an instant real-time payment service which help customer to transfer
money anytime and anywhere in India.
• It is similar to NEFT & RTGS and available 24/7 throughout the year including
bank holidays.
• Transaction limit – There is a maximum limit of Rs. 2 lakhs.
• To transfer fund, account number & IFSC code of Payee is needed.
• This facility is available in internet banking of every bank.
Interbank Mobile Payment Service
• It is an instant interbank fund transfer service in which mobile phones are
used as a channel for transaction happens with the use of Mobile Money
Identifier(MMID).
• MMID is generated by the bank for each account, and it is linked to the
registered mobile number.
• IMPS is functional through National Financial Switch (NFS) of NPCI, which is
also used for routing ATM transactions.
• Benefits:
o Instant money transfer.
o Available 24 x7 (functional even on holidays)

Aadhaar Payments Bridge System (APBS)

• Launched: 2013
• Under APBS, online interoperable financial inclusion transaction can be
performed at PoS (Point of Sale - Micro ATM) through Business
correspondent of any bank using Aadhaar authentication.

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• It is a payment gateway platform used for Aadhaar schemes.

• Under this, Aadhaar number used as a central key for electronically
channelizing the Government subsidies and benefits in Aadhaar Enabled Bank
Accounts (AEBA) of the intended beneficiaries.
Aadhar Enabled Payment System (AEPS)
• It is a payment system which is based on unique identification number,
AADHAAR.
• It allows a person holding an Aadhaar number to carry out financial
transaction on a Micro-ATM provided by the Banking correspondent.
• It is developed by National Payments Corporation of India (NPCI).
BHIM
• Bharat Interface for Money (BHIM) is an instant payment application
which allows users to transfer fund with the help of mobile phone.
• It is based on the Unified Payment Interface (UPI) and is developed by
National Payments Corporation of India (NPCI).
• Transaction limit: You can't pay more than Rs. 20,000 in a transaction in a
day. If you want to pay more than Rs. 20 thousand than you have to pay
twice.
• Maximum limit: The daily limit for BHIM app transaction is ₹40,000. If you
want to transfer more than ₹40 thousand, wait for the date change.
• Transaction Charges: There is no transaction charges.
• You can transfer money to any bank account.
• You can transfer money to a person using his mobile number.

Bank Apps facilitating Digital Banking

Apps Launched By
MANI App RBI
Airtel Money Airtel Payment Bank
Barodapedia Bank of Baroda
Branch on wheels in Odisha ICICI Bank
DiYA Canara Bank
DLite Karur Vysya Bank
e-Infobook Canara Bank
e-Kisaan Dhan HDFC Bank
Freedom State Bank of India
GO Mobile+ IDBI Bank
GENIE Punjab National Bank
iMuseum ICICI Bank
iStudio Voice ICICI Bank
iTravelSafe ICICI Bank
iBizz ICICI Bank
IndPay Indian Bank
Kochi1 Card Axis Bank
Kona Kona Umeed’ Campaign Kotak Mahindra Bank

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LIME Digital Wallet Axis Bank

LUMOS E-learning App Development Credit Bank
#LeadTheNew ICICI Bank
m-invest Bank of Baroda
M-Connect Plus Bank of Baroda
Maha Mobile Bank of Maharashtra
MahaSecure Bank of Maharashtra
mBandhan Bandhan Bank
mServe Canara Bank
Mera iMobile ICICI Bank
Money2India Europe ICICI Bank
m-Pesa ICICI bank + Vodafone
MSMESaksham SIDBI + TransUnion CIBIL
NETSECURE Axis Bank
FX Connect Portal Axis Bank
Nanban Indian Overseas Bank
No Queue State Bank of India
PayApt IDBI Bank
Pockets ICICI Bank
PAYZAPP HDFC Bank
StarToken – NG Bank of India
Saathi Canara Bank
Saral State Bank of India
SECURE Yes Bank
Universe on the move ICICI Bank
Video Branch IndusInd Bank
YONO (You Only Need One) State Bank of India