Technological Up gradation and Transformation of Indian Banks
Anshul Dhamija
12PGDM010

Role of Technology in the Indian Banking Sector

Ever since the nationalization of banks, the Indian Banking Sector has experienced tremendous growth. A number of recent developments in the economy are poised to change the shape of the Banking Sector. With the passing Banking Laws (Amendment Bill) 2011, RBI would be issuing new banking licenses. The growing population of India is another opportunity for Indian Banks. The government’s focus on financial inclusion will lead to opening of a number of branches of banks in rural areas. IT has also brought about a paradigm shift in this sector.
Advancement in banking technology is one of the major factors that have led to growth of this sector. It has lead to the global expansion of banks. New delivery channels such as interest and phone have also emerged. With the consolidation and centralization of information, the risk management capabilities of the banks have been strengthened. Electronic Payment Systems through the use of credit and debit cards provide ease of use and convenience to the customers. All this has led to increasing banking activity. Recently, an expert from the Boston Consulting Group quoted “The Indian banking sector is poised to become the world's third largest in asset size over the next 14 years with the growth in the usage of new channels like mobile phones, propelled by 3G and smart phone technology characterizing the next decade in Indian banking” Thus, the sector needs to strongly leverage its IT infrastructure to service its customer base and risk management to make this possibility stronger.
A number of innovative products are offered by India’s Banking Sector. Few of the same have been explained below:
RTGS (Real – Time Gross Settlement)
This system was introduced in India in March 2004. It