Technological developments in scheduled commercial banks: Indian experience

Indian banking industry today is in the midst of an IT revolution. A combination of regulatory and competitive reasons has led to increasing importance of total banking automation in the Indian Banking Industry. Information technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. In the area of payment systems, there have been significant advancements of technology on the customer transactions. India is one of the countries that have effectively tackled huge volumes of paper instruments in cost effective manner. The Magnetic Ink Character Recognition (MICR) cheque clearing System, cheque transaction system (CTS) is another innovative solution that has been developed to enhance the efficiency of paper-based clearing system. CTS have eliminated the need for physical movements of cheques. The National Electronic Clearing System (NECS), with its centralized processing capability coupled with the implementation of CBS has brought down the clearing and settlement cycle. Electronic Fund Transfer(EFT)/National EFT (NEFT) is another illustration, where better process re- engineering coupled with CBS and strict adherence to NEFT procedural guidelines has made this product offer fund transfer service on a real time basis to customer. This paper presents computerization of banks as well as the number of ATMs having by the scheduled commercial banks in India. In the second part; the author has made an attempt to highlight the issuance of debit and credit cards of scheduled commercial banks. In the final facet of this paper; the author concludes with the bank group-wise number of transactions in RTGS and NEFT.