2. Information technology referring to computer and peripheral equipment shown tremendous growth in service industry Obvious e.g is banking industry where IT related products in internet banking,electronic payments,security investment Banks can now provide more diverse services to customer

3. BANKING SERVICES KEY CHARACTERSTICS 1. ONLINE SERVICES 2. AUTOMATED TELLER MACHINE [ATM] 3. POINT OF SALE SYSTEM [POS] 4. PHONE BANKING 5. INTERNET BANKING  Provide online real time transaction. Customers are not restricted to transaction at a/c opening branches  Replace the function of cash receiving and dispensing,fund transfer between accounts etc. provide services unrestricted by banking hours  Trend towards cashless society  Easy and convenient access to account  Allowing customer to perform internet based transaction and access to making an enquiry about their a/c

4. 1. Computerization of branches of banks 2. Setting up of the institute for development and research in banking technology 3. Commencement of certification authority for ensuring electronic banking transaction 4. Providing guidelines for internet banking 5. Establishment of e-payment gateways for the benefit of customer 6. Introducing a secured web site for data transfer to central and state government 7. Implementation of the National Financial Switch to ensure interconnectivity of ATM

5. 1. Centralised banking solution 2. Online tax payment 3. Corporate internet banking 4. Online shopping 5. Retail internet banking 6. Foreign exchange 7. E-money 8. Online railway reservation 9. Online bill payment 10. Online trading 11. Customer care facility

6. Electronic image of the cheque is transmitted Obviates the need to move the physical instrument across branches Eliminates the cost of movement of physical cheque Flow of stopping the physical cheque issued by drawer at some point by presenting bank en- route to the drawee branch

7. Speeds up the process of collection of cheque resulting in better services to customer,reduce scope for fraud,lower the cost of collection of cheque CTS offer several benefits to bank and customer including cost effectiveness, business process,better services, latest technology CTS is efficient initiative undertaken by RBI in payment system

8. Presenting bank capture the data and image of cheque Presenting bank send data and captured image duly signed to clearing house Presenting and drawee banks are provided with an gateway called clearing house interface that enable to collect and transmit data Clearing house processes the data,arrives at settlement.This is called presentation clearing CHI receive data and also generate return file Clearing house processes the return file in same way as presentation Process is treated to be complete when presentation and return clearing are processed successfully

9. 1. Shorter clearing cycle 2. Superior verification and reconciliation process 3. No geographical restriction 4. Reduction in operational risks 5. Operational efficiency for banks and customers alike

10. Standardisation of cheque forms in terms of size, band, quality of paper etc Banks added a variety of design and pattern forms to aid segmentation, branding,identification etc to reduce the misuse, alteration and tempering of cheque Growing use of multi-city and payable at par cheques,increasing popularity of speed clearing etc. led to requirement of minimum security feature in cheques printed and issued

11. Application of technology Improvement of risk management standards Enhancement of customer services Enhancement of transparency and disclosure

12. .Base II implementation.Enhancing corporate governence Alignment of regulatory and accounting requirements Outsourcing risks Application of advanced technology