The term 'Core Banking Solutions' is sometimes seen in the news. Which of the following statements best describes/describe this term?
- 1.It is a networking 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.
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Answer: A. Statement 1 is correct: Core Banking Solutions links all branches of a bank to a central system, so a customer can operate an account from any branch. Statement 2 is wrong: it is a bank's own technology, not an RBI control tool. Statement 3 is wrong: it has nothing to do with takeovers. So only 1.
Watch for: Computerisation in banking is pushed by RBI, so students think CBS is meant to increase RBI control.
Why the other options are wrong
- B. Wrong because CBS is neither an RBI control tool nor a takeover process.
- C. Wrong because CBS has no link with takeover of weak banks.
- D. Wrong because Statements 2 and 3 are false.
Source to check: RBI, Report on Trend and Progress of Banking in India (chapter on technology in banking) (rbi.org.in)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.