BANKING TERMS

Core Banking Systems —The introduction of Core Banking Systems (CBS) which was at its nascent stages has become full blown and all banks are at varying stages of implementation of Core Banking Systems in their branches. There are 5 ingredients that form part of the Core Banking system viz. General Ledger
Customer, Information System, Deposit System, Loan System and Management Information System.


INFINET—INFINET (Indian Financial Network), is used by a large number of banks for funds and non-funds-based message transfers, and is made available by the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad. INFINET is perhaps among the few networks in the world which uses the latest in technology and security called Public Key Infrastructure—PKI, which is not only state-of-the-art and robust but also well within the legal requirements of the Information Technology Act, 2000.


National Electronic Funds Transfer System— RBI introduced an electronic funds transfer system to facilitate an efficient, secure, econo-mical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India, and to relieve the stress on the existing paper-based funds transfer and clearing system called National Electronic Funds Transfer System (NEFT System).
The parties to a funds transfer under this NEFT System are the sending bank, the sending Service Centre, the NEFT Clearing Centre, the receiving Service Centre and the beneficiary branch. The EFT scheme enables transfer of funds within and across cities and between branches of a bank and across banks.


National Electronic Clearing Services —The objective of National Electronic Clearing Services (NECS) is to facilitate centralised processing for repetitive and bulk payment instructions. Sponsor banks shall submit NECS data at a single centre viz. at Mumbai. While NECS (Credit) shall facilitate multiple credits to beneficiary accounts at destination branch against a single debit of the account of a User with the sponsor bank, the NECS (Debit) shall facilitate multiple debits to destination account holders against single credit to user account.


Centralized Funds Management System —The Centralized Funds Management System (CFMS), is a system to enable operations on current accounts maintained at various offices of the Bank, through standard message formats in a secure manner. It is set up, operated and maintained by the Reserve Bank of India.


Mobile Banking Services —Mobile payments is defined as information exchange between a bank and its customers for financial transactions through the use of mobile phones. Mobile payment involves debit/credit to a customer’s account’s on the basis of funds transfer instruction received over the mobile phones.
Only Indian Rupee-based domestic services shall be provided. Use of mobile banking services for cross border inward and outward transfers is strictly prohibited. Only banks which have implemented core banking solutions would be permitted to provide mobile banking services. Banks shall file Suspicious Transaction Report (STR) to Financial Intelligence Unit–India (FIU-IND) for mobile banking transactions as in the case of normal banking transactions. To ensure inter-operability between banks, and between their mobile banking service providers, banks shall adopt the message formats like ISO 8583, with suitable modification
to address specific needs. Hence, banks offering mobile banking should notify the customers the timeframe and the circumstances in which any stop-payment instructions could be accepted.