Bank computerization in India increased after economic liberalization in 1991. The Reserve Bank of India set up committees in 1984 and 1988 to define banking technology standards and coordinate computerization efforts. The 1984 committee recommended introducing MICR technology and standardized cheque forms. The 1988 committee emphasized computerizing clearing house settlement operations and increasing branch connectivity through computers. Automated teller machines allow customers to perform basic transactions without a bank representative. Customers use an ATM card and PIN for authentication. ATMs make cash available 24/7 and are part of interbank networks. HSBC introduced the first ATM in India in 1987. Electronic clearing service is an electronic funds transfer between bank accounts, used for payments like salaries, dividends, and loan

1. Bank computerization

2. Bank Computerization
What is computerization?
To control, perform, process, or store (a
system,operation,or information) by means of or in an
electronic computer or computers.
Bank computerization in India
The use of computers in the Banking sector in
India has increased many fold after the economic
liberalization of 1991 as the country’s Banking sector
has been exposed to the world’s market.

3. The RBI set up a number of committees to define and
co-ordinate Banking technology. These have included:
1) In 1984 was formed the committees on
Mechanization in the Banking industry whose
chairman was Dr. C. Rangarajan, Deputy Governor of
RBI. The major recommendation of this committee
were introducing MICR technology in all the banks in
the metropolises in India. The provided for the use of
standardized cheque forms and encoders.

4. 2) In 1988, the RBI set up the committee and it
emphasized that settlement operation must be
computerized in clearing houses of RBI. It also
focused on computerization of branches and
increasing connectivity among branches through
computers. The committee submitted its reports in
1989 and computerization began from 1993.

5. Automated Teller Machine
 An automated teller machine is an electronic
Banking outlet, which allows customer to complete
basic transaction's without the aid of a branch
representative or teller
 On the most modern ATM’s, the customer is
identified by inserting a plastic ATM card with a
magnetic strip or a plastic smart card with a chip
that contains a unique card number and some
security information.
 An ATM card is an ISO 7810 card issued by a
Bank, credit union or building society.

6.  Using an ATM, customer can access their bank
account in order to make cash withdrawals and
check their account balances. ATM’s are known by
various casual terms, namely, automated Banking
machine, money machine, cash machine, hole-in-
wall, cash point or Bancomat.
 Most ATM’s are concerned to interbank network,
enabling people to withdraw and deposit money
from machines not belonging to the Bank where
they have their account or in the country where
their accounts are held.

7.  Unlike debit card, an ATM card can only be used
for transaction in person, as it requires
authentication through a personal identification
number or PIN.
 ATM’s make cash available 24 hours a day, seven
days a week at any location. You can use ATM’s
that are located at all of your Bank’s locations as
well as those at other Banks, grocery and drug
stores, offices building and street corners
worldwide.
 ATM cards can often be used to buy things is
called a “point-of-sale transaction”.

8. HSBC- Hong Kong and Shanghai Banking
Corporation was the first Bank to introduce the
ATM concept in India way back in 1987.
John Shepherd-
Barron inventor of
ATM in 1967
The first user of ATM,
English actor Reg
Varney

9. Electronic Clearing Service
ECS is an electronic mode of funds transfer
from one Bank account to another. It can be used by
institutions for making payments such as
distribution of dividend, interest, salary, pension,
among others.

10.  There were two types of ECS, one is called the ECS
credit, while the other is called the ECS debit.
 ECS credit is when an institution makes a credit to
your savings account. ECS debit is when you
choose to make recurring payments, as EMI
towards your loans, or SIP payments towards your
mutual funds and the like.
 This ensures don’t need to keep writing cheques
every month and also decrease the possibility of
missing due dates on variables bills.

11.  In ECS account holder need to maintain minimum
amount in his account. If holder bounce an ECS,
holder will have to bear the same fine as holder
would have for a bounced cheque.
 On the part of person receiving payments ECS is a
boon because he or she does not has to remind the
person from whom the payment is due as payment
will be received automatically due to electronic
clearing service.