The Term ‘Core Banking Solutions’ is sometimes seen in the news. Which of the following statements best describes this term?
- It is the networking of a bank’s branches that enable customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts.
- It is an effort to increase RBI’s control over commercial banks through computerization.
- It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank.
Select the correct answer using the code given below.
- 1 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Explanation
Statement 1 is correct
- A core banking solution (CBS) is a software used by banks to manage primary operations. It is a centralized system that allows customers or businesses to carry out transactions from any branch rather than only from the branch where the account was opened.
Statements 2 and 3 are incorrect
- CBS is not intended to increase RBI’s control over commercial banks. It is primarily a technological upgrade by banks to improve efficiency, customer service, and operational convenience.
- CBS has nothing to do with bank takeovers or handling Non-Performing Assets (NPAs). The takeover of banks with high NPAs is done through bank mergers, acquisitions, or resolution mechanisms, not through CBS.
