Podcast
Questions and Answers
Which feature of Core Banking Systems indicates that all transactions are recorded at once across all locations?
Which feature of Core Banking Systems indicates that all transactions are recorded at once across all locations?
- Daily closing
- On-line real-time processing
- Centralized Operations (correct)
- Remote interaction with customers
What is a key benefit of online real-time processing in Core Banking Systems?
What is a key benefit of online real-time processing in Core Banking Systems?
- Immediate transaction postings (correct)
- Lesser operational costs
- Duplication of entries reduced
- Increased manpower requirements
Which technology component of Core Banking Systems refers to the secure storage of data?
Which technology component of Core Banking Systems refers to the secure storage of data?
- Data warehouse
- Application environment
- ATM Switch
- Database environment (correct)
What is a distinguishing feature of transactions in Core Banking Systems?
What is a distinguishing feature of transactions in Core Banking Systems?
Which module is essential for handling customer transactions remotely in Core Banking Systems?
Which module is essential for handling customer transactions remotely in Core Banking Systems?
Which of the following is NOT a feature of Core Banking Systems?
Which of the following is NOT a feature of Core Banking Systems?
In terms of operational efficiency, what is an effect of using Core Banking Systems?
In terms of operational efficiency, what is an effect of using Core Banking Systems?
What does the application environment in a Core Banking System primarily consist of?
What does the application environment in a Core Banking System primarily consist of?
Which of the following components is NOT part of the CBS IT Environment?
Which of the following components is NOT part of the CBS IT Environment?
Which core business process is related to managing financial services for individuals and businesses?
Which core business process is related to managing financial services for individuals and businesses?
Which subprocess of Information Security focuses on defining user access and privileges?
Which subprocess of Information Security focuses on defining user access and privileges?
What is necessary for the successful implementation of CBS?
What is necessary for the successful implementation of CBS?
Which of these is a responsibility of the Maintenance phase of CBS?
Which of these is a responsibility of the Maintenance phase of CBS?
Which of the following best describes Application Security?
Which of the following best describes Application Security?
Which component is specifically responsible for handling online transactions in CBS?
Which component is specifically responsible for handling online transactions in CBS?
What is the purpose of an audit in the context of CBS?
What is the purpose of an audit in the context of CBS?
What is one of the primary purposes of Core Banking Systems (CBS)?
What is one of the primary purposes of Core Banking Systems (CBS)?
What is a key factor contributing to the growth of banking services in India?
What is a key factor contributing to the growth of banking services in India?
Which of the following is NOT a type of deposit that commercial banks typically accept?
Which of the following is NOT a type of deposit that commercial banks typically accept?
What are advances in the context of commercial banks?
What are advances in the context of commercial banks?
Which of the following best describes the role of banks in addressing fraud risks?
Which of the following best describes the role of banks in addressing fraud risks?
How does the geographical dispersion of branches affect banking services?
How does the geographical dispersion of branches affect banking services?
What is one of the primary responsibilities of banks regarding monetary items?
What is one of the primary responsibilities of banks regarding monetary items?
What is a common type of remittance operation provided by commercial banks?
What is a common type of remittance operation provided by commercial banks?
Which remittance method involves the physical issuance of an instrument from one bank branch to another?
Which remittance method involves the physical issuance of an instrument from one bank branch to another?
What is the minimum amount for a transaction using Real Time Gross Settlement (RTGS) in India?
What is the minimum amount for a transaction using Real Time Gross Settlement (RTGS) in India?
Which of the following is an electronic form of inter-bank transfer available 24x7?
Which of the following is an electronic form of inter-bank transfer available 24x7?
What distinguishes Mail Transfer (MT) from other forms of remittance?
What distinguishes Mail Transfer (MT) from other forms of remittance?
Which method allows for bulk transfers for payments such as salary or pensions?
Which method allows for bulk transfers for payments such as salary or pensions?
What is a characteristic feature of Electronic Funds Transfer (EFT)?
What is a characteristic feature of Electronic Funds Transfer (EFT)?
ECS Credit operates by debiting a single account to credit how many beneficiary accounts?
ECS Credit operates by debiting a single account to credit how many beneficiary accounts?
Which of the following statements is true regarding National Electronic Funds Transfer (NEFT)?
Which of the following statements is true regarding National Electronic Funds Transfer (NEFT)?
What is Compliance Risk associated with?
What is Compliance Risk associated with?
Which of the following is a common source of People Risk?
Which of the following is a common source of People Risk?
What defines Credit Risk?
What defines Credit Risk?
What is the primary concern of Market Risk?
What is the primary concern of Market Risk?
Which aspect describes Strategic Risk?
Which aspect describes Strategic Risk?
Which of the following is NOT a common IT Risk in CBS?
Which of the following is NOT a common IT Risk in CBS?
What is an essential control for unauthorized Credit Line setup in banks?
What is an essential control for unauthorized Credit Line setup in banks?
What could be a potential impact of People Risk on an organization?
What could be a potential impact of People Risk on an organization?
Which function is not associated with the Reserve Bank of India (RBI)?
Which function is not associated with the Reserve Bank of India (RBI)?
What is the objective of money laundering?
What is the objective of money laundering?
Which stage of money laundering involves moving proceeds from the crime scene?
Which stage of money laundering involves moving proceeds from the crime scene?
What is involved in the layering stage of money laundering?
What is involved in the layering stage of money laundering?
What does the integration stage of money laundering aim to achieve?
What does the integration stage of money laundering aim to achieve?
Which of the following is a reporting requirement under Section 12 of PMLA?
Which of the following is a reporting requirement under Section 12 of PMLA?
Which statement is true regarding the calculation of interest and charges in the loan disbursal system?
Which statement is true regarding the calculation of interest and charges in the loan disbursal system?
Which of the following is NOT a stage of money laundering?
Which of the following is NOT a stage of money laundering?
Flashcards
Demand Draft
Demand Draft
A financial instrument issued by one bank branch, payable by another.
Mail Transfer (MT)
Mail Transfer (MT)
Remittance method where no instrument is given to the applicant; the bank handles the transfer.
Electronic Funds Transfer (EFT)
Electronic Funds Transfer (EFT)
Electronic transfer of funds between locations.
Real-time Gross Settlement (RTGS)
Real-time Gross Settlement (RTGS)
Signup and view all the flashcards
National Electronic Funds Transfer (NEFT)
National Electronic Funds Transfer (NEFT)
Signup and view all the flashcards
Immediate Payment Service (IMPS)
Immediate Payment Service (IMPS)
Signup and view all the flashcards
Collections
Collections
Signup and view all the flashcards
Clearing
Clearing
Signup and view all the flashcards
Core Banking Systems (CBS)
Core Banking Systems (CBS)
Signup and view all the flashcards
Banking Services - Key Factors
Banking Services - Key Factors
Signup and view all the flashcards
Core Banking Functions
Core Banking Functions
Signup and view all the flashcards
Banking Security
Banking Security
Signup and view all the flashcards
Bank Deposits
Bank Deposits
Signup and view all the flashcards
Bank Advances
Bank Advances
Signup and view all the flashcards
Bank Remittances
Bank Remittances
Signup and view all the flashcards
Bank Transaction Features
Bank Transaction Features
Signup and view all the flashcards
Core Banking System
Core Banking System
Signup and view all the flashcards
On-line real-time processing
On-line real-time processing
Signup and view all the flashcards
Centralized Operations
Centralized Operations
Signup and view all the flashcards
Seamless Data Merging
Seamless Data Merging
Signup and view all the flashcards
Productized Services
Productized Services
Signup and view all the flashcards
Database Environment
Database Environment
Signup and view all the flashcards
Application Environment
Application Environment
Signup and view all the flashcards
CBS Modules
CBS Modules
Signup and view all the flashcards
Loan Disbursal Restriction
Loan Disbursal Restriction
Signup and view all the flashcards
Automatic Interest Calculation
Automatic Interest Calculation
Signup and view all the flashcards
Money Laundering
Money Laundering
Signup and view all the flashcards
Placement (Money Laundering)
Placement (Money Laundering)
Signup and view all the flashcards
Layering (Money Laundering)
Layering (Money Laundering)
Signup and view all the flashcards
Integration (Money Laundering)
Integration (Money Laundering)
Signup and view all the flashcards
RBI Functions
RBI Functions
Signup and view all the flashcards
PMLA Reporting Requirements
PMLA Reporting Requirements
Signup and view all the flashcards
Compliance Risk
Compliance Risk
Signup and view all the flashcards
People Risk
People Risk
Signup and view all the flashcards
Credit Risk
Credit Risk
Signup and view all the flashcards
Market Risk
Market Risk
Signup and view all the flashcards
Strategic Risk
Strategic Risk
Signup and view all the flashcards
IT Risk in CBS
IT Risk in CBS
Signup and view all the flashcards
Unauthorized Credit Line Setup (CBS)
Unauthorized Credit Line Setup (CBS)
Signup and view all the flashcards
Control for Unauthorized Credit Line in CBS
Control for Unauthorized Credit Line in CBS
Signup and view all the flashcards
CBS Maintenance
CBS Maintenance
Signup and view all the flashcards
CBS Updation
CBS Updation
Signup and view all the flashcards
CBS Audit
CBS Audit
Signup and view all the flashcards
Application Server
Application Server
Signup and view all the flashcards
Database Server
Database Server
Signup and view all the flashcards
ATM Channel Server
ATM Channel Server
Signup and view all the flashcards
Internet Banking Channel Server
Internet Banking Channel Server
Signup and view all the flashcards
Core Business Processes
Core Business Processes
Signup and view all the flashcards
Study Notes
Core Banking Systems
- Banks provide various services, even in remote locations in India.
- Key factors aiding service delivery include IT, government reforms, financial inclusion for Indians, and internet penetration growth.
- Core Banking Systems (CBS) fulfill customer needs, meet global challenges, and enhance service delivery, scaling operations and improving customer satisfaction and overall efficiency.
Key Features of Banking Services
- Core functions involve deposit acceptance and lending.
- Managing large volumes of monetary items (cash, negotiable instruments) with secure physical handling is important.
- Wide branch networks and departments (geographically dispersed) are crucial.
- Protecting from fraud requires multi-point authentication and high information security.
Major Products and Services of Commercial Banks
- Deposits: Various schemes (term, savings, current, recurring) and innovative products.
- Advances: Lending in various forms, including cash credit, overdrafts, bill discounting, term loans, and loans like housing, education, or car loans.
- Remittances: Transferring funds from one location to another, utilizing various methods.
Other Banking Services
- Back operations: General ledger, management information systems, and reporting.
- Retail banking: Front-office operations (debit cards, personal loans, mortgages).
- High Net-worth Individuals (HNIs): Specialized services catering to high-value customers.
- Risk management: Strategic, operational, and technological risk management based on policy.
Core Banking System (CBS) Characteristics
- Centralised database (data centre), branches for delivery channels (consolidated view).
- CBS is centralised banking application.
- Incorporates advanced technology and high standards of functionality.
- Modularity for bank-specific implementation in stages.
- Integrates third-party applications for simple and complex business processes.
Key Features of Core Banking Systems
- Online real-time processing (transactions posted immediately, all databases updated simultaneously).
- Centralised operations (All transactions in one database/server).
- Real-time merging of back office and self-service operations, reducing errors from data duplication.
- Separate hierarchy for business and operations, productized service divisions, customer remote interaction, transaction balancing.
- Highly dependent system-based controls, authorization within the application, staff access based on authorization.
- Daily/half-yearly/annual closing.
- Less operational cost due to less manpower utilization, automatic processing of standing instructions for centralized interest applications across account types.
- Anywhere access for customers and vendors through multiple channels like mobile, web, etc.
Key Modules of CBS
- Central server, back office, branch, data warehouse, ATM switch, mobile, internet, phone banking, and credit card systems are all interconnected.
Key Technology Components of CBS
- Database servers storing central data.
- Application servers for core banking systems.
- Enterprise security architecture (proxy servers, firewalls, intrusion detection systems).
- Corporate network and internet connectivity (high bandwidth).
- Data centers/disaster recovery centres (redundancy, backup, disaster recovery plans).
- Online transaction monitoring for fraud management (risk profile evaluation, monitoring).
Steps in Implementing CBS
- Planning: Aligned with strategic and business objectives.
- Approval: Board of directors' approval.
- Selection: Choosing the appropriate CBS solution.
- Design and development/procurement: Proper controls.
- Testing: Comprehensive testing stages.
- Implementation: Meeting pre-defined milestones.
- Maintenance: Program bugs, versions implemented, etc.
- Support: Ensuring CBS functionality.
- Updation: Keeping CBS modules updated.
- Audit: Internal and external audits for control verification.
Components of CBS IT Environment
- Application server
- Database server
- ATM channel server
- Internet banking channel server
- Internet banking application server
- Web server
- Proxy server
- Anti-virus software server
Core Business Processes in CBS
- Current and savings accounts
- Credit cards
- Loans and trade finance
- Mortgage and property loans
- Internet banking
- Treasury
Information Security Subprocesses
- Information Security Policies, Procedures and Practices
- User Security Administration
Risks and Controls in CASA Processes
- Credit Line setup (unauthorized, not aligned with policy)
- Credit line setups (unauthorised and not in line with bank's policy)
- Customer Master definition in CBS
- Accuracy of interest calculations in CBS
- Unauthorized personnel approving transactions in CBS
- Inaccurate reconciliations in CBS
Risks and Controls Associated with Loans and Advances
- Unauthorized Credit Lines
- Incorrect Loan Setup and Authorization
- Inappropriate Customer Master Data Input
- Inaccurate Interest/Charge Calculation
- Unauthorized Disbursement Operations
- Customer Rate/Commission Discrepancies in CBS
- Non-compliance with Disbursement Certificate Issues
- Inappropriate Loan Facilities/Granting Processes
Risks and Controls in Treasury Processes
- Unauthorized securities setup in systems
- Inaccurate trade processing
- Unauthorized confirmations
- Insufficient securities
- Incomplete/inaccurate data flows between systems
- Insufficient funds for settlements
- Incorrect Nostro payments
Risks and Controls with Respect to Mortgages
- Incorrect customer and loan details
- Incorrect loan amounts disbursed
- Inaccurate interest calculation
- Unauthorized changes to loan/customer data
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz covers the fundamental concepts of Core Banking Systems, their role in providing banking services across remote locations in India, and the technology and reforms driving financial inclusion. It also highlights the key features and security measures essential for modern banking operations.