Digitalisation In The Indian Banking Sector And Its Evolution

“Digital Banking” refers to digitalizing the traditional methods of banking to conduct banking transactions more smoothly. Contrary to traditional banking, digitized banking aims to make versatile computerized products and services to fulfil the requirements of their digitized clients. The introduction of digital banking has revolutionized the banking sector and modified the entire procedure of bank transfers. It has facilitated the purchasers assisting them to see their account details, pay online bills and transfer money from one account to the opposite during a faster way. This has helped the end-user to enjoy a methodical financial life, further embracing hassle-free online banking.
Digitalisation is the new buzz or new expression these days quite common among all the sectors. Almost every sector has gone digital. It refers to the use of digital technologies to change a business model and further provide new revenue and value-producing opportunities. The world has seen a rapid advancement in technology over the past several decades. Technology has left an indelible mark on everything and anything that human beings can fathom. There has been a technology outburst in all sectors and banking has been one of the sectors to adopt information technology. All over the world, banks are making a tremendous stride towards digitalization to cope up with the competition and provide their clients with the best services.
The need for computerization was felt within the Indian banking sector within the late 1980s, where there was a need to enhance the customer service, book-keeping and MIS reporting. In the late 1980s, India was marred by various financial reforms and therefore the banking sector felt a requirement to enhance customer services and computerization of recording and accounting of knowledge. A committee was found in 1988 by the Federal Reserve Bank of India which was headed by Dr C. Rangarajan to review Computerization within the Banking Sector. After the introduction of the Liberalization, Privatization, and Globalization (LPG) policy, the method of digitalization picked up pace alongside the change within the Indian Economy.
The digitalization within the banking sector is often seen in India since the establishment of ATMs. Further developments like Telebanking, Electronic Compensation Service, Electronic Funds Transfer system, MICR, RTGS (Real-Time Gross Settlement), Point of sale terminal, etc. are often seen within the banking sector. E-banking has resulted in reducing costs drastically and has helped generate revenue through various channels. Various steps and initiatives had been adopted by the RBI and National Payment Corporation of India in strengthening the Payment and Settlement Systems in banks just like the launch of United Payments Interface (UPI) and Bharat Interface for Money.