UPSC Prelims 2016 Question:

The term ‘Core Banking Solution’ is sometimes seen in the news. Which of the following statements best describes/describe this term?

1. It is a network of a bank’s branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts. 
2. It is an effort to increase RBI’s control over commercial banks through computerization. 
3. 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:

Explanation: 

• The basic goals of Core Banking Solutions (CBS) are providing greater customer convenience and cutting down on operational expenses. Hence, the customers are benefited by having more freedom in transaction.
  
  

• Among the most significant core banking solutions are: Internet Banking, Phone Banking, Automated Teller Machines (ATMs), Fund Transfers remotely and immediately (IMPS, NEFT, RTGS etc.), Point of Sale systems etc. Thus, customers can avail banking services from any branch of the bank on CBS network, regardless of where they open and maintain their account. So, statement 1 is correct.
  
  
• Core Banking Solutions (CBS) are related to give more hassle free experience to the customers. This concept has nothing to do with the Reserve Bank of India (RBI) control over commercial banks and non-performing assets (NPA) management. So, statement 2 and statement 3 are not correct.
  
  

Therefore, option (1) is the correct answer.

Subject: Economics | Money and Banking