Saturday, January 26, 2013

Current Position of Technological Banking Services Drift Towards Innovative Banking


1. Presence of Women on Boards
Banking in the West has traditionally been a male bastion and continues to be so. Study titled “Women on Corporate Boards in India 2010” ranked the companies listed in the Bombay Stock Exchange (BSE-100) in terms of the gender diversity of their boards, with those with the highest percentage of women on their boards appearing at the top. The BSE-100 comprises 26 industry classifications with the banking industry making up the largest group of companies.
Indian banks, with better gender equality on board than their western counterparts, scraped though the economic slowdown unscathed. Kalpana Morparia heads the Indian arm of global financial leviathan J. P. Morgan Chase & Co; Meera Sanyal is the country executive for Royal Bank of Scotland and; Manisha Girotra is the managing director of Union Bank of Switzerland’s India operations. K. J. Udeshi is the Chairman of Governing Council of BCSBI.
 2. Mobile Branches
Domestic scheduled commercial banks (other than RRBs) were granted general permission by RBI, to operationalise Mobile branches in Tier 3 to Tier 6 centres (with population upto 49,999 as per Census 2001) and in rural, semi urban and urban centres in the North Eastern States and Sikkim, subject to reporting. The mobile branch should be stationed in each village/location for a reasonable time on specified days and specified hours, so that its services could be utilized properly by customers. The business transacted at the mobile branch shall be recorded in the books of the base branch/data centre. The bank may give wide publicity about the mobile branch in the village, including details of ‘specified days and working hours’ at various locations so as to avoid any confusion to local customers; and any change in
this regard should also be publicized.
3. Social Responsibility, Sustainable Development and Non-Financial Reporting
Government infused into bank-ing sector the ‘socialist’ constituent through nationalization of major banks.
CSR entails the integration of social and environmental concerns by companies in their business operations as also in interactions with their stakeholders. SD essentially refers to the process of maintenance of the quality of environmental and social systems in the pursuit of economic development. NFR is basically a system of reporting by organizations on their activities in this context, especially as regards the triple bottom line, that is, the environmental, social and economic accounting. RBI circular (dated December 20, 2007) on Role of Banks in Corporate Social Responsibility, Sustain-able Development and Non-Financial Reporting is appreciable. Stressing the need for Corporate Social Responsibility (CSR), RBI pointed out that these
initiatives by the banks are vital for sustainable development. Banks have been directed to start; non-financial reporting will help to audit their initiatives towards the corporate social responsibility (CSR). Such a reporting will cover the work done by the banks towards the social, economic and environmental betterment of
society.
4. Universal Banking
Universal Banking refers to those services offered by banks beyond traditional banking service such as saving accounts and loans and includes Pension Funds Management, undertaking equipment leasing, hire purchase business and factoring services, Primary Dealer-ship (PD) business, insurance business
and mutual fund business.
The issue of universal banking came to limelight in 2000, when ICICI gave a presentation to RBI to discuss the time frame and possible options for transforming itself into an universal bank. Later on RBI asked financial institutions which are interested to convert them into a universal bank, to submit their plans for
transition to a universal bank for consideration and furtherdiscussions. FIs need to for-mulate a road map for  the transition path and strategy for smooth con-version into an universal bank over a specified time frame. The plan should specifically provide for full com-pliance with prudential norms as applicable to banks
over the proposed period. Though the DFIs would continue to have a special role in the Indian financial System, until the debt market demonstrates substantial improvements in terms of liquidity and depth, any DFI, which wishes to do so, should have the option to transform into bank (which it can exercise), provided the prudential norms as applicable to banks are fully satisfied. To this end, a DFI would need to prepare a transition path in order to fully comply with the regula-tory requirement of a bank. The DFI concerned may consult RBI for such transition arrangements. Reserve Bank will consider such requests on a case by case basis. Thus, Indian financial structure is slowly evolving towards a continuum of institutions rather than discrete specialization.
Conclusion
The applicability of various existing laws and banking practices to e-banking is not tested and is still evolving, both in India and abroad. With rapid changes in technology and innovation in the field of e-banking, there is a need for constant review of different laws relating to banking and commerce. A re-orientation of strategy is required in order to accommodate the changes and challenges of the present globalised scenario. Technological developments may become threat but still enable banks to access the global market through the electronic networks. IT usage by banks would continue to exist in substantial scales. Indian Banking is trying to embrace latest technology upgrading its services. Clientele are reveling sophisticated services specific needs, preferences and conveniences by the banks.

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