COMMUNICATION NETWORKS IN BANKING
BANKNET:
ü BANKNET is a communication network backbone connecting, at present, seven centres viz. Mumbai, Delhi, Calcutta, Madras, Nagpur, Bangalore and Hyderabad.
ü This backbone is meant to facilitate transfer of inter-bank (and inter-branch) messages within India by Public Sector banks who are members of this network.
' INFINET ' - Indian Financial Network:
ü The 'INFINET' - Indian Financial Network is a satellite based wide area network using VSAT (Very Small Aperture Terminal) technology
ü The hub and the Network Management System of the INFINET are located in the Institute for Development and Research in Banking Technology, (IDRBT) Hyderabad (an institute set up by the RBI).
ü A Closed User Group of the member banks of the network called the "INFINET User Group" has been formed to resolve issues of common interest on a continuing basis.
Indian banks and S.W.I.F.T
ü 88 Indian banks are part of the international financial messages communication network, namely, Society for Worldwide Inter-bank Financial Telecommunication (S.W.I.F.T).
ü The S.W.I.F.T provides reliable and expeditious telecommunication facilities for exchange of financial message all over the world.
ü The gateway is in Mumbai and efforts are on to other cities through leased lines/public data network.
Electronic Data Interchange (EDI)
ü EDI is a computer-to-computer transfer of details of commercial or administrative transactions using an agreed protocol and standard data structure.
ü EDI standards have been developed in respect of specific messages for transmission of business transactions which are electronic equivalents of commercial invoices, purchase orders, transport bookings and payment instructions etc.
ATM network - SWADHAN (Shared Payment Network System -SPNS)
ü The Automatic Teller Machines (ATMs) and Cash Dispensers have become a common feature of Banking in India, particularly in Metropolitan cities.
ü ATMs deliver services like cash withdrawal / deposit, balance enquiry, depositing cheques for collection, request for transfer of funds, request for cheque book, giving standing instructions, getting a statement of account etc. without human intervention and off the site.
ü The ATM account holder is provided with an ATM card which he operates on the ATM along with a pre-agreed secret PIN Number which uniquely identifies him to the machine.
ü In Mumbai, some of the IBA member banks have come together and set up a Shared Payment Network System (SPNS) named the "Swadhan" ATM network.
ü In this network, the ATM holder of any member bank can avail of the facility at any of the ATMs of any of the member Banks in the city.
ü This provides round-the-clock banking services like cash withdrawals / deposits to the customers.
ü Other services like balance enquiry etc. has not yet been fully integrated into the system. Inaugurated in 1997, the network at present comprises 109 ATMs and 4 CDs of 29 Banks.
ELECTRONIC CLEARING SERVICES (ECS)
ü ECS Scheme helps to make payment from a single account at a bank branch to any number of accounts maintained with the branches of the same or other banks.
ü This is the most useful mode of payment of dividend / interest/ pension/refund etc. which are otherwise handled through "warrant" mechanism.
ü The latter has, in the past, led to large number of frauds and malpractices, besides huge and unmanageable clearing volumes.
MICR (Magnetic Ink Character Recognition) CLEARING
ü Introduced in 1987 in the four Metros, the MICR Clearing is now in operation in 14 centres (HYDERABAD, BANGLORE, AHMEDABAD, KANPUR, JAIPUR, NAGPUR, BARODA, PUNE, GAUHATI, and TRIVANDRUM) and is proposed to be extended to a total of 22 centres where volume of clearing transactions is large.
ü The cheque leaves used in these centres are pre-printed with the bank-branch code and account type in MICR strip, while the amount is read manually and fed into the system using the Encoders by bank branches.
ü Use of high-speed readers and sorters at Service Branches of member banks and the National Clearing Centres at Metros / Clearing Houses ensures that the clearing work is speeded up.