A core banking system is a integrated system of maintaining accounts for a bank across all its products and /or

locations. Then a customer is a customer of a 'bank' and not of a branch. In technical words, CBS can be defined as a back-end banking system that processes daily transactions and posts updates to accounts and other financial records. Core banking systems typically include account, loan and credit processing capabilities, interfaces to general-ledger systems,etc.

y CBS is typically centrally managed software application that covers all the
branches of the bank. The transactions could be recorded real time or through batch processing into the Central accounting system of the bank. No this concept came into existence somewhere in 1980s but till recently it was in its budding ages, but with technological advancements in all fields this concept is also grooming and adding more and more features to itself.

Core Banking is a feature wherein officers of a bank in one branch can view the details of customers and accounts of the same bank's other branches Core banking functions differ depending on the specific type of bank. Retail banking, for example, is geared towards individual customers; wholesale banking is business conducted between banks; and securities trading involves the buying and selling of stocks, shares and so on. Core banking systems are often specialized for a particular type of banking. Products that are designed to deal with multiple types of core banking functions are sometimes referred to as universal banking systems.

y substantial reduction of operation costs y easier introduction of new products y faster customer service y integration of all products and services, leading to improved risk y y y y

management mitigation of Operational Risk real-time transaction processing scaling up of operations availability of e-trade options to bank customer.

y Various facilities associated with core banking:

1. All branches of the bank are interconnected. 2. Details of the accounts can be viewed online just as login to view email account. 3. Main thing is that we can transfer money online from our account to any account . 4. We can do majority of the transactions online that we needed to go personally to the bank to perform it. 5. We can perform transactions of our account from the bank counter at any part of the countrymen. Busiore Banking is a general term used to describe the services provided by a group of networked bank branches. Bank Customers may access their funds and other simple transactions from any of the member..
y y

y The need for such a solution does not arise just because of one reason or the

other but it requires a combination of driving forces to come into existence. Some of these forces are;
y To meet the intense competition and changing market dynamics in an

over banked environment.

y To meet the regulations and compliance requirements (example in order

to meet the Basel ll norms banks must enhance there IT infrastructure).

y To meet the demands of customers who are better informed, more

demanding and less loyal than ever.

y To enhance efficiency and effectiveness. y Increasing customer satisfaction and convenience y Freeing up time for branch staff to focus on sales and marketing y Simplifying process for employees y Enhancing banks competitiveness in the market y Improved process efficiency

[1] Bank management: Executives / managers at respective locations, head office, regional offices, branches etc. can obtain the financial position from Core Banking Systems related the respective sphere of banking operations and thus help pinpoint potential problems so as to avoid crises.

y [2] Bank Customers: Can operate any of their accounts from any branch

or preferred delivery channel and have access to his funds any time 24 hours a day.
y [3] Bank Auditors : Ones accounts audited, they operate the same year on

year thus enabling auditors to focus more on systems and procedures at delivery channels like branches, call center etc.

y [4] Bank regulators: Core Banking Systems produce the

required reports for regulatory bodies like the central bank, financial statement, asset and liability reports, NPA reports, large currency transaction reports etc. are all produced by either the deposits, or the loan or a combination of deposit, loan and G.L. System.
y [5] Bank Share Holders: C.B. providing the desired return to

shareholders from banking operations Trends overtime on such data informs S.H. about how the banks is doing and help take timely action to accelerate or improve performance

y Core Banking Solutions (CBS) or Centralized Banking Solutions is the

process which is completed in a centralized environment i.e. under which the information relating to the customers account (i.e. financial dealings, profession, income, family members etc.) is stored in the Central Server of the bank (that is available to all the networked branches) instead of the branch server. Depending upon the size and needs of a bank, it could be for the all the operations or for limited operations. This task is carried through advance software by making use of the services provided by specialized agencies.

Due to its benefits, a no. of banks in India in recent years have taken steps to implement the CBS with a view to build relationship with the customer based on the information captured and offering to the customer, the customized financial products according to their need.

Advantages: The CBS process is advantageous both to the customers and the banks in the following manner: Customer: Transaction of business from any branch, ATM that offers him anytime anywhere banking facility. Lower incidence of errors. Hence accuracy in transactions. Better funds management due to immediate availability of funds

y Banks:

Standardizations of process within the bank. Better customer service leading to retention of customer and increased customer traffic. Availability of accurate data & Better use of available infrastructure Better MIS and reporting to external agencies such as Govt., RBI etc.

Most of the nationalized banks in India for example: State Bank of India, Punjab National Bank, Allahabad Bank, HDFC, ICICI Bank today supports core banking. As of 2007, many Cooperative banks in India such as REPCO Bank, Jain Urban Cooperative Bank, Kangra Central Cooperative Bank, Udaipur Urban Cooperative Bank, Kollam District Cooperative bank. Kerala State Cooperative and Panchsheel Mercantile Cooperative Bank have started to use and offer centralized Core Banking too.

Some of the Cooperative banks and RRBs are yet not having CBS, but they are on their way to go for CBS and very soon they will also be under the roof of the umbrella of Core Banking Solution

Now a days all banks are upgrading to provide the facility of core banking to their customers to be in the race. it is one step closer to mix technology with baking for providing convenience of banking to the customers.. This software is installed at different branches of bank and then interconnected by means of communication lines like telephones, satellite, internet etc.This new platform has changed the way banks are working.

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