Explain how information technology has changed the face of banking in India.

The banking system in India has matured in the last decade. Earlier the banking was manual and had the following difficulties/lacunas: The banking records were maintained manually. The records of transactions in an account were hand written in ledgers and thus prone to errors. The manual activity demanded building of procedures and rules to detect errors. Thus the bankers were required to maintain and update the general ledgers on daily basis and tally the same i.e. ensure that debits equal credits. The major time of the staff was spent in in-house book keeping. This included general ledger and individual ledger balancing. The customer was required to visit the branch for every transaction and had to wait in queues to be serviced. The customer could be serviced at the branch where he maintained the account and could not avail of any facility at other branches. The transactions were done through issuance of cheques and the system used to take 2 to 21 days to clear the cheques as the cheques were required to be sent to the branch of the payee where the account was maintained. With the advent of IT in the banking system, all the problems mentioned above have vanished. As a result the following benefits have accrued to staff and customers: The books are balanced automatically and thus there is very little in-house book keeping to be done. The staff can concentrate on customer service and marketing of banking as well as investment products. The customer is no longer required to visit his home branch only as he can avail of all the services from any branch. The customer can do all his banking from home and office and even on the move through mobile banking. Payments have been automated and now customers can make all payments electronically. The banks now offer the following facilities for payment: Electronic Funds Transfer, Electronic Clearing System (ECS), Real Time Gross Settlement (RTGS), Banks can settle interbank and forex transactions on real time basis, National Electronic Funds Transfer (NEFT). Automatic Teller Machines (ATM): In order to automate all small cash transactions banks have setup ATMs in convenient locations for withdrawal and deposit of cash and for performing selected transactions. Internet banking and mobile banking: The customer can do almost all transactions using internet and mobile. Bill pay facility: Under this facility the customer can register the details of all service providers including credit card companies, insurance companies and mutual funds to whom the payments have to be made periodically. The bank would collect the details from the said service providers and remit the amounts to them. Conveyance banking: Under this all accounts of a customer are grouped under one customer id and he can access them through a common login.