CHAPTER 1

1.1 INTRODUCTION
The origins of banking can be traced to ancient times, starting with simple money
lending and bartering practices for agricultural and other commodities. But it
gained great momentum only after the industrial revolution which commenced in
Europe in the 17th century, when Europeans started establishing colonies around the
world and the need for credit for trade was felt like never before.
Ever since banks started operating, their essential mode of operations remained much
the same until late into 20th century. But the arrival of the Internet in the 1990s
changed all that. A surplus of possibilities emerged for worldwide commerce, which
naturally impacted the functioning of banks as well. Even now, technology
evolution

shapes

the

nature and extent of global economic activity and

continues to fundamentally alter the global banking landscape.

A bank is an institution that provides financial service, particularly taking deposits and
widen credit. Currently the term bank is generally understood as an institution that
holds a banking license. Banking licenses are granted by bank regulatory authorities
and provide rights to conduct the most fundamental banking services such as accepting
deposits and making loans. There are also financial institutions that provide certain
banking services without meeting the legal definition of a bank, and so called nonbanking financial company. Challenges range from inefficient allocation of resource/
infrastructure to customer stickiness. To adapt and survive, banks in India are adopting
multiple techniques to attract and retain clients.
The Indian Financial Intermediation market is surrounded with a range of players like
PSU Banks, Private Banks, Foreign Banks, Cooperative banks, Regional Rural Banks
(RRB's), Non Banking Financial Companies (NBFCs), Housing Finance Companies
(HFC's), Investment Houses, Post offices, Microfinance Institutions (MFI's) and the
ever-present neighbourhood money lenders.

1.2 OBJECTIVES OF STUDY

1. To understand the evolution of banking in context to Indian banking.

2. Emerging trends in technology adoption by Indian banks and IT Governance.
3. To study Indian Banking industry.

1.3 SIGNIFICANCE OF STUDY

This study helps us to understand how banking industry evolved over a period of time
and the technological trends which changed the face of banking.

1.4 RESEARCH METHODOLOGY

This information is been collected from Secondary source such as E-data.

1.5 CHAPTERS SCHEMES

This study consists of following chapters Chapter 1. Introduction
Chapter 2. Trends and adoption of IT Governance
Chapter 3. Current trends in banking
Chapter 4. Conclusion

CHAPTER 2

Introduction
The banking history is interesting and reflects evolution in trade and
commerce. It also throws light on living style, political and cultural aspects of
civilized mankind. The strongest faith of people has always been religion and God.
The seat of religion and place of worship were considered safe place for money and
valuables. Ancient homes didn't have the benefit of a steel safe, therefore, most
wealthy people held accounts at their temples. Numerous people, like priests or
temple workers were both committed and honest, always occupied the temples, adding
a sense of security. There are records from Greece, Rome, Egypt and Ancient Babylon
that suggest temples loaned money out, in addition to keeping it safe. The fact that
most temples were also the financial centers of their cities and this is the major reason
that they were looted during wars. The practice of depositing personal valuables at A
bank is a financial institution that provides banking and other financial services to their
customers. A bank is generally understood as an institution which provides
fundamental banking services such as accepting deposits and providing loans. There
are also nonbanking institutions that provide certain banking services without meeting
the legal definition of a bank. Banks are a subset of the financial services industry.
A banking system also referred as a system provided by the bank which offers cash
management services for customers, reporting the transactions of their accounts and
portfolios, through out the day. The banking system in India, should not only be hassle
free but it should be able to meet the new challenges posed by the technology and any
other external and internal factors. For the past three decades, Indias banking system
has several outstanding achievements to its credit. The Banks are the main participants
of the financial system in India. The Banking sector offers several facilities and
opportunities to their customers. All the banks safeguards the money and valuables and
provide loans, credit, and payment services, such as checking accounts, money orders,
and cashiers cheques. The banks also offer investment and insurance products. As a
variety of models for cooperation and integration among finance industries have
emerged, some of the traditional distinctions between banks, insurance companies, and
securities firms have diminished. In spite of these changes, banks continue to maintain
and perform their primary role-accepting deposits and lending funds from these
deposits.

1.2 Need of the Banks

Before the establishment of banks, the financial activities were handled by money
lenders and individuals. At that time the interest rates were very high. Again there
were no security of public savings and no uniformity regarding loans. So as to
overcome such problems the organized banking sector was established, which was
fully regulated by the government. The organized banking sector works within the
financial system to provide loans, accept deposits and provide other services to their
customers. The following functions of the bank explain the need of the bank and its
importance:

To provide the security to the savings of customers.

To control the supply of money and credit.

To encourage public confidence in the working of the financial system, increase

savings speedily and efficiently.

To avoid focus of financial powers in the hands of a few individuals and

institutions.

To set equal norms and conditions (i.e. rate of interest, period of lending etc) to all
types of customers.

1.3 History of Indian Banking System

The first bank in India, called The General Bank of India was established in the year
1786. The East India Company established The Bank of Bengal/Calcutta (1809), Bank
of Bombay (1840) and Bank of Madras (1843). The next bank was Bank of Hindustan
which was established in 1870. These three individual units (Bank of Calcutta, Bank
of Bombay, and Bank of Madras) were called as Presidency Banks. Allahabad Bank
which was established in 1865, was for the first time completely run by Indians.
Punjab National Bank Ltd. was set up in 1894 with head quarters at Lahore. Between
1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank,
Indian Bank, and Bank of Mysore were set up. In 1921, all presidency banks were
amalgamated to form the Imperial Bank of India which was run by European
Shareholders. After that the Reserve Bank of India was established in April 1935.

At the time of first phase the growth of banking sector was very slow. Between 1913
and 1948 there were approximately 1100 small banks in India. To streamline the
functioning and activities of commercial banks, the Government of India came up with
the Banking Companies Act, 1949 which was later changed to Banking Regulation Act
1949 as per amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was
vested with extensive powers for the supervision of banking in India as a Central
Banking Authority.
After independence, Government has taken most important steps in regard of Indian
Banking Sector reforms. In 1955, the Imperial Bank of India was nationalized and was
given the name "State Bank of India", to act as the principal agent of RBI and to
handle banking transactions all over the country. It was established under State Bank
of India Act, 1955. Seven banks forming subsidiary of State Bank of India was
nationalized in 1960. On 19th July, 1969, major process of nationalization was carried
out. At the same time 14 major Indian commercial banks of the country were
nationalized. In 1980, another six banks were nationalized, and thus raising the
number of nationalized banks to 20. Seven more banks were nationalized with deposits
over 200 Crores. Till the year 1980 approximately 80% of the banking segment in
India was under governments ownership. On the suggestions of Narsimhan
Committee, the Banking Regulation Act was amended in 1993 and thus the gates for
the new private sector banks were opened.
The following are the major steps taken by the Government of India to Regulate
Banking institutions in the country:1949 : Enactment of Banking Regulation Act.
1955 : Nationalisation of State Bank of India.
1959 : Nationalization of SBI subsidiaries.
1961 : Insurance cover extended to deposits.
1969 : Nationalisation of 14 major Banks.
1971 : Creation of credit guarantee corporation.
1975 : Creation of regional rural banks.

1980 : Nationalisation of seven banks with deposits over 200 Crores.

1.3.1 Nationalisation
By the 1960s, the Indian banking industry has become an important tool to facilitate
the development of the Indian economy. At the same time, it has emerged as a large
employer, and a debate has ensured about the possibility to nationalise the banking
industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the
Government of India (GOI) in the annual conference of the All India Congress
Meeting in a paper entitled "Stray thoughts on Bank Nationalisation". The paper
was received with positive enthusiasm. Thereafter, her move was swift and sudden,
and the GOI issued an ordinance and nationalised the 14 largest commercial banks
with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader
of India, described the step as a "Masterstroke of political sagacity" Within two
weeks of the issue of the ordinance, the Parliament passed the Banking Companies
(Acquisition and Transfer of Undertaking) Bill, and it received the presidential
approval on 9 August, 1969.
A second step of nationalisation of 6 more commercial banks followed in 1980. The
stated reason for the nationalisation was to give the government more control of credit
delivery. With the second step of nationalisation, the GOI controlled around 91% of
the banking business in India. Later on, in the year 1993, the government merged New
Bank of India with Punjab National Bank. It was the only merger between nationalised
banks and resulted in the reduction of the number of nationalised banks from 20 to 19.
After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer
to the average growth rate of the Indian economy. The nationalised banks were
credited by some; including Home minister P. Chidambaram, to have helped the Indian
economy withstand the global financial crisis of 2007-2009.

1.3.2 Liberalisation
In the early 1990s, the then Narsimha Rao government embarked on a policy of

liberalisation, licensing a small number of private banks. These came to be known as

New Generation tech-savvy banks, and included Global Trust Bank (the first of such
new generation banks to be set up), which later amalgamated with Oriental Bank of
Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move
along with the rapid growth in the economy of India revolutionized the banking sector
in India which has seen rapid growth with strong contribution from all the three
sectors of banks, namely, government banks, private banks and foreign banks. The
next stage for the Indian banking has been setup with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be
given voting rights which could exceed the present cap of 10%, at present it has gone
up to 49% with some restrictions.
The new policy shook the banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of
functioning. The new wave accompanied in a modern outlook and tech-savvy methods
of working for the traditional banks. All this led to the retail boom in India. People not
just demanded more from their banks but also received more. Currently (2007),
banking in India is generally fairly mature in terms of supply, product range and reacheven though reach in rural India still remains a challenge for the private sector and
foreign banks. In terms of quality of assets and capital adequacy, Indian banks are
considered to have clean, strong and transparent balance sheets as compared to other
banks in comparable economies in its region. The Reserve Bank of India is an
autonomous body, with minimal pressure from the government. The stated policy of
the Bank on the Indian Rupee is to manage volatility but without any fixed exchange
rate-and this has mostly been true. With the growth in the Indian economy expected to
be strong for quite some time-especially in its services sector-the demand for banking
services, especially retail banking, mortgages and investment services are expected to
be strong.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an
investor has been allowed to hold more than 5% in a private sector bank since the RBI
announced norms in 2005 that any stake exceeding 5% in the private sector banks
would need to be voted by them. In recent years critics have charged that the nongovernment owned banks are too aggressive in their loan recovery efforts in

connection with housing, vehicle and 25 personal loans. There are press reports that
the banks' loan recovery efforts have driven defaulting borrowers to suicide.
The last decade has seen many positive developments in the Indian banking sector.
The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of
Finance and related government and financial sector regulatory entities, have made
several notable efforts to improve regulation in the sector. The sector now compares
favourably with banking sectors in the region on metrics like growth, profitability and
non-performing assets (NPAs). A few banks have established an outstanding track
record of innovation, growth and value creation.
Banking in India was defined under Section 5(A) as "any company which transacts
banking, business" and the purpose of banking business defined under Section
5(B),"accepting deposits of money from public for the purpose of lending or investing,
repayable on demand through cheque/draft or otherwise". In the process of doing the
above-mentioned primary functions, they are also permitted to do other types of
business referred to as Utility Services for their customers (Banking Regulation Act,
1949). During Bruisers' time, three Presidencies Banks were opened in Bengal (1809),
Bombay (1840) and Madras (1843) with powers to issue Notes. In the year 1921, due
to banking crisis during First World War, the three Presidency Banks merged to form
Imperial Bank of India. In the year 1955, after Independence, Imperial Bank of India
was nationalized and renamed as State Bank of India (SBI) with a primary mandate to
go to rural areas by opening at least 400 branches immediately. In the year 1957, the
seven banks that were earlier catering to the rulers of different areas or States viz.,
Patiala, Bikaner, Jaipur, Indore, Saurashtra, Hyderabad, Mysore, Travancore, became
subsidiaries of SBI. In 1969 and 1980, Government of India nationalized 14 and 6
major banks respectively. After the merger of New Bank of India with Punjab National
Bank during the era of Financial Sector Reforms, the number of PSBs became 27,
which are under present study. This is reflected in their market valuation. While the
onus for this change lies mainly with bank managements, an enabling policy and
regulatory framework will also be critical to their success. Comparisons of bank
performance based on financial ratios suffer from the problem that financial ratios
might overstate performance because of inaccurate reporting of nonperforming assets
(NPAs) or because NPAs tend to be lower in the initial years in the case of newly
established banks. Stock prices may, however, capture performance more accurately

because markets, including ours, are reasonably efficient in incorporating information

that may escape financial statements. The means of both unadjusted and adjusted
returns for each of the three categories of banks were compared with returns to the
Sensex this gave the relative returns for each category. Two important findings
emerged. The comparisons of stock price performance suggest that, in the perception
of the market, PSBs as a category can withstand competition from todays private
banks. This finding has important implications for policy. It undermines the
proposition that disinvestment, the mere dilution of government equity in PSBs,
cannot possibly contribute to any improvement in performance and that government
control must cease altogether. Consequent to disinvestment, PSBs have performed as
well as the Sensex and private sector banks.
This suggests that listing on the exchanges, a profit orientation, and a measure of
independence can together produce improvement in performance and that a transfer of
ownership is not a pre-condition for such improvement all these were aimed at
generating income or employment to large number of rural masses comprising weaker
sections of society, artisans, and agriculturists and self-employed persons including
educated unemployed youth. In India, till the eighties, the banks operated in a
protected environment characterized by administered interest rates, high levels of preemption in the form of reserve requirements and directed credit. In the process,
strategies of certain banks, especially Public Sector Banks, are aiming to divide
customers into different segments on the basis of the type of service they would like to
render and also trying to segregate their servicing counters in their respective branches
to enable customer to have easy access to a particular transaction.\ "Electronic
Clearing", "Tele-Banking", etc. Lets explores an empirical approach to the analysis of
Non- Performing Assets (NPAs) of public and privates banks in India. The NPAs are
considered as an important parameter to judge the performance and financial health of
banks. The level of NPAs is one of the drivers of financial stability and growth of the
banking sector.
The Banking sector has been immensely benefited from the implementation of
superior technology during the recent past, almost in every nation in the world.
Productivity enhancement, innovative products, speedy transactions seamless transfer
of funds, real time information system, and efficient risk management are some of the
advantage derived through the technology. Information technology has also improved

the efficiency and strength of business processes across banking sector. India's banking
sector has made rapid strides in reforming itself to the new competitive business
environment. Indian banking industry is the midst of an IT revolution. Technological
infrastructure has became an vital part of the reforms process in the banking system,
with the gradual development of sophisticated instruments and innovations in market
practices.
The opening up of the Indian economy in 1991 almost corresponded with the
worldwide Internet revolution which even more impacted the Indian private and
public sector banks that were still stuck in old ways of functioning. Once Indian
IT services companies started booming, it was just a matter of time before
Indian banks wholeheartedly embraced technology. This paved the way for business
process automation in banking, which enhanced customer service, reduced
manpower costs and increased profitability. Apart from normal banking products,
Indian banks started selling third party products such as mutual funds and insurance
to their clients as well. This single window selling saved the customers time and
enabled the bank to enrich the relationship.
The Reserve Bank of India, Indias Central Bank, not to be left behind,
played its part in this transformational journey, by issuing regulations and
recommendations on banking mechanization and computerization. Establishment
of computerized inter-connectivity across bank branches, introduction of MICRbased

cheque clearing,

modernization

of payment services and settlements

through Electronic Clearing Services (ECS), Real Time Gross Settlement System (RTGS),
National Electronic Funds Transfer (NEFT), were all significant landmarks in the
banking technology revolution. Continuing advances in technology rise in middle
class income levels, and increase in demand from a consumer-oriented
financial market, soon catapulted the Indian banking sector to a customer centric,
technology driven, financial supermarket catering to the varied needs of its
customers. Over the years, there has been a noticeable shift

from traditional

to channel-based banking. Introduction of ATMs (Automated Teller Machines) provided

customers with any time access to their money. The credit card by enabling cashless
transactions, unleashed a revolution in the banking world. Affordable technology
infrastructure like cheap, small but powerful computers and other handheld gadgets
and higher Internet bandwidth at lower cost facilitated easy access to banking

products and effortless banking transactions. Call centre and phone banking services
further added to customer convenience. By directing banking transactions through
different electronic channels and by providing customers direct access to their bank
accounts, banks could now offer quick service and transparency as well. They even
started offering incentives to customers for using non-branch channels. All this reduced the
number of walk-in customers and improved the quality of customer service in branches.
The next noteworthy milestone was the introduction of mobile banking
primarily through SMS. The launch of smartphones created a revolution of sorts in the
banking world and smartphones are now a widely accepted delivery channel in developed
countries. As the number of mobile phone users in India rapidly increases, banks are
exploring the feasibility of using the ubiquitous device as an alternative channel for delivery
of full-fledged banking services.
Another concept, virtual banking or direct banking, is now gaining ground.
This model wherein banks offer products, services and financial transactions
only through electronic delivery channels, generally without any physical branch,
has already been tested out in advanced countries such as the United States and
Europe. Owing to lower branch maintenance and manpower costs, such banks
are able to offer competitive pricing for their products and services vis--vis
traditional banks. More and more customers are already moving to non-branch
banking, and the direct banking trend will surely catch up in India as technologysavvy banks adopt this model.
Though it may appear to save the bank a lot of overheads, in reality, the customer
never needing to visit a bank branch, either for completing the account opening
process or the subsequent financial activities actually throws up new challenges.
The power of technology makes it happen seamlessly and virtually, but
customer satisfaction is something which calls for a human touch. For all
their technological sophistication, virtual banking should be hassle free and a
pleasurable experience for the user. The virtual banks need to be aware of this fact in
letter and spirit and always ensure that the quality of user experience is paramount
and leveraging technology is only an aid to enriching user experience.
As Banks adopt more technology, two things stand out - using less paper and doing
transactions wirelessly. In the last few years, many banks in India have

implemented content management solutions

and

succeeded

in

conducting

paperless transactions using the imaging and workflow capabilities of such

software. Also, automated handling of service requests with proper documentation
and tracking facilities has significantly reduced turnaround time.
Processing online applications for account opening and other services, transfer
of funds without cheques, online account statements are all becoming part of
the regular banking process. With digitization of all customer transactions and
data, banks can improve productivity, optimize costs, provide quicker and better
quality customer service. This will also help with the environmental angle of
using less paper. From the customers point of view, paperless banking translates to
easy handling, storage and recovery of financial documents and account
statements without the fear of misplacing them.
With customers demanding anytime and anywhere access to their money and
financial information, banks have no option but to implement wireless
device-independent

and

network-agnostic

ways.

On the

user

solutions
side,

in

rapid

progression of mobile technologies as evidenced by the well known LTE (Long

Term Evolution) means banks must increasingly adapt their own infrastructure to
the client side needs.
On the flip side, unlike PCs, mobile phones are small and are easily lost or stolen,
making them more vulnerable to fraudulent transactions. This calls for greater
security measures combined with powerful regulation. There are also some
privacy issues related to wireless banking that need to be resolved.
Overall, there is no denying that there is both challenge and opportunity for
banks in enriching customer experience arising from the numerous use case scenarios
of powerful smart phones operating wirelessly. By ensuring the ease, comfort,
safety, and seamlessness of such operations, banks can assuredly remain in business.
According to data compiled by the RBI, there has been steady growth in the
number of transactions routed through electronic channels ). Not only that, the share
of paper-based transactions via cheques/demand drafts has fallen over the years
and in terms of value now forms a miniscule part of total banking transactions.

Product innovation and technology

The banking industry is going through a period of rapid change to meet competition,
challenges of technology, and the demands of the end users. Clearly technology is
a key differentiator in the performance of banks. Studies reveal that approximately
20% of non-interest expenditure of large banks in the United States is on information
technology. Banks need to look at innovation not just for products, but for processes
as well. Also, along with new product offerings, they need to work towards
existing product optimization.
The needs of the rural market are quite different and banks have to innovate
accordingly. Studies reveal that in rural areas, more than half of personal savings
is being invested in land, houses, cattle, and gold. With low cost technology as
the enabler, supported by innovative products tailored for the rural populace, banks
can offer secure investments with good returns and in addition, act as catalysts to
alter rural investment patterns along more productive lines.

Indian banks need to

focus on swift and continued combination of technology while ensuring its

appropriateness and utility for both the rural and urban market.

CHAPTER 3
Emerging trends in technology
Technology as the differentiator has become the driver of the Indian banking business
since the past decade with the financial sector reforms providing firm foundation. The
question of implementing technology has now transformed into 'how from the

estimate, the cost per transaction through a branch, ATM and Internet works out to
about Rs.66, Rs.22 and Rs.10 respectively, ignoring the extreme variations owing to
the investment cost vis--vis the number and nature of the transactions. Moreover,
technology has resulted in improved quality of service, any time/any where banking,
focused product delivery, cross selling opportunities, multi-channel touch points for
consumption of services, etc Significant shifts in the business environment, economic
volatility, changing customer and staff expectations, and the adoption of new
technology make it increasingly challenging for banks to navigate technology strategy
alternatives and prioritize technology investments.
In 2012-13, Indian banks continued to transform their businesses by deploying
technology-intensive solutions toincrease revenue, enhance customer experience,
optimizecost structure and manage enterprise risk. While these are fairly common
themes among banks, there is a wide variation in the technology agendas and
implementation capability across different players of the banking a industry.
Enhancing core banking value. At many banks the implementation of core banking has
consumed significant resources and management attention over last five years.
Following the RBI mandate on core banking, banks moved forward with large core
banking transformation programs. The focus was on automation and significant
progress was made in reducing manual processes specifically at the branch. Customer
data was centralized, teller operations were streamlined and network were established
to connect branches to a common platform. However, this initiative has also been
inwardly focussed. Many banks have adopted a lift and shift approach of moving
processes as is with workarounds rather than a holistic business process
reengineering approach. In many cases, this has resulted in sub-optimal
implementations with dubious business cases. In the current scenario, most banks use
their core banking system as a transaction platform without getting the full benefit of
enterprise customer insight and process integration. There is a significant opportunity
to reduce out of work steps in processes, optimize central part of banking functionality
to reduce revenue leakage and speed up customer service processes. The establishment
of a core banking platform has, however, given banks a strong launch pad to offer
various services across alternate channels such as the web, mobile, call centers, ATMs,
kiosks, and other systems, such as point of sale. It has also helped to build a robust
repository of data, both static as well as transactional, which could potentially be

leveraged to analyze and offer business solutions targeted at specific customer

segments. The implementation of core banking therefore, narrowed the technology gap
that was very apparent between private banks and public sector banks. Core banking
has also spawned multiple initiatives in the areas of IT governance, infrastructure,
performance improvement, upgrade of data center, real time alerts on security
incidents, bolstering business continuity planning and disaster recovery, virtualization
of servers among others. Overall this has been a big step forward for the industry and
has increased maturity levels across the board.

Services typically offered by banks earlier

Although the type of services offered by a bank depends upon the type of bank and the
country, services provided usually include:

Taking deposits from their customers and issuing checking and savings

accounts to individuals and businesses

Extending loans to individuals and businesses
Cashing cheques
Facilitating money transactions such as wire transfers and cashiers checks
Issuing credit cards, ATM, and debit cards
Storing valuables, particularly in a safe deposit box

IT in Banking
Indian banking industry, today is in the midst of an IT revolution. A combination of
regulatory and competitive reasons has led to increasing importance of total banking
automation in the Indian Banking Industry. The bank which used the right technology
to supply timely information will see productivity increase and thereby gain a
competitive edge.
To compete in an economy which is opening up, it is imperative for the Indian Banks
to observe the latest technology and modify it to suit their environment. Information
technology offers a chance for banks to build new systems that address a wide range of
customer needs including many that may not be imaginable today.
Following are the innovative services offered by the industry in the recent past:
Electronic Payment Services - E Cheques
Nowadays we are hearing about e-governance, e-mail, e-commerce, e-tail etc. In the
same manner, a new technology is being developed in US for introduction of e-cheque,

which will eventually replace the conventional paper cheque. India, as harbinger to the
introduction of e-cheque, the Negotiable Instruments Act has already been amended to
include; Truncated cheque and E-cheque instruments.
Real Time Gross Settlement (RTGS)
Real Time Gross Settlement system, introduced in India since March 2004, is a system
through which electronics instructions can be given by banks to transfer funds from
their account to the account of another bank. The RTGS system is maintained and
operated by the RBI and provides a means of efficient and faster funds transfer among
banks facilitating their financial operations. As the name suggests, funds transfer
between banks takes place on a 'Real Time' basis. Therefore, money can reach the
beneficiary instantaneously and the beneficiary's bank has the responsibility to credit
the beneficiary's account within two hours.
Electronic Funds Transfer (EFT)
Electronic Funds Transfer (EFT) is a system whereby anyone who wants to make
payment to another person/company etc. can approach his bank and make cash
payment or give instructions/authorization to transfer funds directly from his own
account to the bank account of the receiver/beneficiary. Complete details such as the
receiver's name, bank account number, account type (savings or current account), bank
name, city, branch name etc. should be furnished to the bank at the time of requesting
for such transfers so that the amount reaches the beneficiaries' account correctly and
faster. RBI is the service provider of EFT.
Electronic Clearing Service (ECS)
Electronic Clearing Service is a retail payment system that can be used to make bulk
payments/receipts of a similar nature especially where each individual payment is of a
repetitive nature and of relatively smaller amount. This facility is meant for companies
and government departments to make/receive large volumes of payments rather than
for funds transfers by individuals.
Automatic Teller Machine (ATM)
Automatic Teller Machine is the most popular devise in India, which enables the
customers to withdraw their money 24 hours a day 7 days a week. It is a devise that

allows customer who has an ATM card to perform routine banking transactions
without interacting with a human teller. In addition to cash withdrawal, ATMs can be
used for payment of utility bills, funds transfer between accounts, deposit of cheques
and cash into accounts, balance enquiry etc.
Point of Sale Terminal
Point of Sale Terminal is a computer terminal that is linked online to the computerized
customer information files in a bank and magnetically encoded plastic transaction card
that identifies the customer to the computer. During a transaction, the customer's
account is debited and the retailer's account is credited by the computer for the amount
of purchase.

Tele Banking
Tele Banking facilitates the customer to do entire non-cash related banking on
telephone. Under this devise Automatic Voice Recorder is used for simpler queries and
transactions. For complicated queries and transactions, manned phone terminals are
used.

Electronic Data Interchange (EDI)

Electronic Data Interchange is the electronic exchange of business documents like
purchase order, invoices, shipping notices, receiving advices etc. in a standard,
computer processed, universally accepted format between trading partners. EDI can
also be used to transmit financial information and payments in electronic form.

Data and decisions at fingertips

Technologies for extracting intelligence from data are maturing, adding urgency to all
aspects of data management. There is now exponential progress being made in
companies ability to aggregate and secure data and provide insight quickly and
effectively to the right people at the right time. This data-based intelligence surge will
significantly impact banking sales, marketing and services functions and will support
the increasing development of channel-specific solutions. Opportunity areas for banks

include decision tools and underlying support systems that help to better understand
risk, enhance sales and customer service and reduce time to serve. During the next
three to five years banks will have significantly better data and greater intelligence
about customers. It will be available at the fingertips of all customer-facing
functions, enabling more efficient and effective sales and service. Companies will be
able to capture and retrieve less-structured data types (image and voice, for example)
and increasingly use external public data sources. Analytics will be in place to support
real-time decision making for both banks and their customers. For instance, Maybank
Berhad was recently recognized by research and advisory firm Financial Insights for
Innovation in Analytical CRM, for its efficiency in using advanced data mining that is
enabling the bank to analyze, understand, predict and influence customer behavior
throughout the customer life-cycle.
Data and decision tools also will greatly evolve the information support for decisionmaking among bank customers and prospects. Customers will have the right
information about such things as products, services and billing at their time of need,
and it will be delivered via multiple possible channels including contactless interface
via phone. Kuala Lumpur Hong Leong Bank (HLB), for instance, has launched Pay+,
the first real-time online interbank funds transfer service via Internet banking in Malaysia. Pay+ gives a response in
a matter of seconds (instead of the traditional one to three working days) of acceptance
or rejection from participating banks, giving customers ample time to exercise other
options if necessary.
Banks common, or hub, services such as customer management, product
management, pricing and knowledge management will leverage rule-based analytics
and visualization tools to support better decision making in pricing and many other
functions. And, in the enterprise support functions, the focus of advanced analytics
will be on areas such as mitigating risk through automatically and immediately
notifying staff of regulatory changes or reporting non-compliance via channels such as
email. For example, Large Indian banks such as SBI and Indian Bank are using a
single core banking software that automates and integrates different banking processes
of lending and treasury on a single platform (as compared with many western banks,
which have different systems for specific functions of lending and treasury). In fact,

the research and consulting firm Celent recently selected Indian Bank as the model
bank for its innovative and extensive use of core banking software. The Indian Bank
was able to use core banking software to generate an additional $712 million in
revenue from a newly launched cash management system.
To enable real-time analytics banks also will have improved data scrubbing, data
quality management, data security and governance. In fact, data quality management
will enable banks to make critical improvements in verifying the quality of data (such
as in payments and stock trades), securely source external data and share data between
applications.

Mobility: New markets, new channels, new methods

Mobile devices are beginning to disappear personal computers as the electronic
channel for businesses and consumers. Meanwhile, netbooks are a surprising market
success, and smart phones that can rapidly access expanding 3G networks are
becoming more and more capable.
Mobility provides banks with access to new markets (for instance, banking the
unbanked), new mobile payment methods (including micro and contactless payments)
and better use of channels such as independent financial advisors employed by banks
to prospect for new clients. For the bank workforce, mobility means using locationaware mobile devices and applications, as well as being able to access remote data,
such as home-office data, from afar to make key decisions quickly (for instance, those
involving pricing, payment authorization and relationship management). Mobile sales
force initiatives are making processes such as risk assessment visits faster and more
efficient delivering a positive bottom-line impact. Hub capabilities of the bank
(including pricing decisions, payment authorization and customer relationship
management) will be available via mobile devices and accessible by staff when on the
move. And, all such mobility will be supported via open security architecture.
Banks, particularly in emerging markets, are already capitalizing on mobility. For
example, Monilink is the UKs mobile banking network, providing banking customers
with access to their financial information directly from their mobile handsets.
Monilinks Mobile Money service is currently available to customers of Alliance &
Leicester, first direct, HSBC, Lloyds TSB, NatWest, Royal Bank of Scotland and

Ulster Bank and across all major mobile networks. Istanbul-based, $61 billion-asset
GarantiBank offers mobile banking services. In the first two months, its Mobile
Banking Portal signed up 50,000 customers who racked up more than 30,000
transactions and $24 million in transaction volume.3 And CashEdge is signing up a
first round of banks in the U.S. for its newly launched POPmoney, an email and
mobile person-to-person funds transfer system that allows bank customers to send
electronic payments by using the email address or mobile phone number of the
recipient.

Convergence of Collaboration, Communication, Community and

Content
Two very distinct types of collaboration technologies one supporting effective,
targeted, point-to-point collaboration and the other supporting diffuse, open and
community-based collaborationare converging and redefining how we work. Use of
collaboration and community tools (such as tele-presence, video conference, cobrowsing capabilities, desktop sharing and social networks) will provide better
connectivity with customers and across the workforce. This will enable new remote
sales and service propositions, use of social networks as enabling tools for sales and
service, and increased use of the remote workforce. For instance, experts can connect
to any branch as virtual advisors to answer questions about products or services or
they may connect directly with customers via Web call-backs and Internet chatting. All
will be enabled through a mix of open technology. Innovation programs and social
networking tools are generating interest among banks, particularly with seasoned
experts beginning to retire and a new generation of workers who take Web 2.0 tools
for granted. Bank of America Corp. launched the BoA_Help account on Twitter to
give its customers another way to get help with online banking. BoA also has a Future
Banking Blog that speaks to thought leaders engaged in financial industry innovation.

Internet Computing for Greater Business Alertness

The Internet is rapidly becoming the locus of more and more IT-based business
capabilities for many good reasons. First it reduces cost. For instance, virtualization
and cloud computing typically lower infrastructure, maintenance and energy costs.
Internet computing also provides elasticity, scalability and greater business agility such

as near real-time risk calculation results, and infinite computing capacity on

demand. And, Rich Internet Applications (RIAs) provide the potential for vast
improvements in the usability and productivity of Web-based banking applications,
and increase the Webs usefulness as a computing platform. Significant advances in
Internet websites will enable improved and personalized experiences for customers
and staff. Across the common processes of the bank (such as pricing and customer
management) the focus of Internet computing will be putting in place the technical
capabilities (Web 2.0, RIA, Rich Widget Portals and RSS) to make planning and
knowledge available across multiple distribution channels and improve the staff
experience. External applications will support elements of business processes, if not
complete processes. Use of cloud computing for key banking applications such as
market analysis, portfolio analysis, peak load management and batch processing will
reduce costs and increase flexibility. For example, Deutsche Bank has set up a private
corporate cloud system and cloud computing is being deployed as a less-expensive
loan automation enabler for Community First Bank and Landmark Community Bank.
Both are using a Web-enabled suite of scalable technology resources provided as a
service by LendingCycle. At the production infrastructure layer of the bank,
virtualization will prevail as companies work to reduce costs and increase flexibility.

Restoring the digital agenda

By 2020 the average age of India will be 29 years. This new age consumer base is
technology savvy, always connected and looking for a personalized, contextual
experience with real-time online information. Cell phone penetration has reached
almost 85% and the rise of the middle class has increased the number of households
with internet connectivity.
Banks are acknowledging this change and almost all banks are in the process of rolling
out online, mobile and social banking extensions to their core offerings in an effort to
respond to this changing consumer demographic. Several banks have deployed best in
class online and mobile banking features including personalization, bank wide
customer relationship views and cross channel integration. However, branches
continue to remain the primary service delivery channel for all banks. In many banks,
we see very low customer migration to alternate delivery channels.
There are several reasons for low adoption rates. The key issue is consumer behavior
many banks have large customer segments who are not computer savvy and

still do not have access to the internet. This segment has grown up with a deep rooted
faith in paper transactions and the belief that the branch is the place to conduct all
banking transaction. Added to this is the fear of transacting online. While measures
such as 3-factor authentication and one-time passwords are starting to make a
difference, online security is still a very big concern, especially for the older
generation of banking customers. Banks are therefore, undertaking channel migration
initiatives to increase enrolment of new customers and increase usage across
customers who have already enrolled for the internet banking service. In order to
increase enrolment and activation, banks are integrating the opening of an online
account along with the basic account opening process so that a new customer receives
her online banking credentials along with the welcome kit. Once the customer has
been enrolled there is a need to create an ecosystem that drives the channel usage for
enrolled customers.

Banking Technology and Cost Reduction A Perspective

According to the RBI report on the analysis of current trends in banking, technological
advancement is commonly accompanied by real cost reduction in the production
process. The two major advantages of technological adoption are:
(a) reduction in banks operational costs (the cost advantage);
(b) facilitating more efficient transactions among customers within the same network
(the network effect).
Eyadat and Kozak (2005) showed a positive correlation between the level of
implemented technology and profitability/cost savings between 1992 and 2003 for the
US banking sector. Berger (2003) also showed improvements in bank performance and
consolidation of the banking industry in the US by deployment of new technologies.
The study for the Indian banking sector for the period 2005-06 to 2009-10 too
suggested efficiency gains resulting from technological innovations and investment in
IT (Rajput and Gupta, 2011). Globally, there has been a rapid advancement in
Information and Communication Technology (ICT), which has reflected in banks
business strategies, customer services and organisational structures, among others.
Innovative adoption in the form of internet banking, ATMs and mobile applications
have created a profound impact on the delivery channels of banking services. Also, a
number of innovative developments in retail payments have emerged, which affect the
retail payment market by influencing users in their choice of payment instruments and
by significantly reshaping the payment processes. The Report of the Working Group

on Innovations in Retail Payments (May 2012) set up by the Committee on Payment

and Settlement Systems (CPSS) provides an overview of innovative retail payment
activities in CPSS and other select countries over the past decade. Based on the trends
observed, the Report identified a number of exogenous and endogenous factors that
serve as drivers for retail payment innovations or as barriers to them.
The Report categorised the purposes of innovation across countries into two main\
groups, namely improved efficiency and improved security. The former was
divided into several subcategories, such as reduced cash usage, lower processing costs,
improved convenience and inclusion of the unbanked/under-banked. In this regard, an
important trend identified by the Report was that financial inclusion served as a
driving force for innovations in many countries, either under a government mandate or
because of the new business opportunities opened up by the untapped market.
Developing countries with an under-developed payment infrastructure have higher
potential for introducing innovative payment solutions, and thereby even leapfrogging
some of the advanced countries in terms of the usual stepsfor developing retail
payment instruments/infrastructure. M-PESA, which was launched in 2007 in Kenya,
is an example of such a technological innovation. M-PESA users can use their mobile
phones to transfer money to another mobile phone user. The system provides a safe,
secure and fast money transfer facility at a very low cost.
There has been wide acceptance of the system in view of the benefits derived. As per a
study, M-banking has dramatically reduced the cost of delivering financial services.
About 85 per cent of M-banking customers in the survey registered lower transaction
costs. It is also observed that M-banking reduced the cost of basic banking services to
customers by about 60 per cent from the costs incurred through traditional channels.
M-Pesa has been so successful in Kenya mainly due to the large demand for financial
services which has not been met adequately by the Kenyan banking sector. In India, on
the other hand, the reach of the banking sector has been wider and the focus has been
on the bank-led model for financial inclusion. Further, mobile-led banking can take
care of only remittance products as against a bouquet of products, viz., deposit product
and overdraft/emergency credit product, which are being provided as part of the
financial inclusion policy in India. However, efforts are being made to leverage the
reach of mobile phones by allowing banks to appoint Business Correspondents (BCs)
for financial inclusion.

Status of IT adoption by banks

While the foreign banks operating in India made the beginning, the new private sector
banks aggressively started pursuing technology-based service offering. However, the
public sector banks had to move over from the load of the past legacy. The technology
adoption by these banks had been dictated more by regulatory roadmap (notably, the
two Rangarajan Committees, the Saraf Committee and the Vasudevan Committee) and
mandates by CVC till recently than by any conscious alignment with business strategy.
The poor communication infrastructure and the hostile labour unions of the then era
did not help the cause either. However, the rapid strides made by the technology sector
and their swift adoption by the competitors since the middle of the past decade have
forced these banks also to get into the act by beginning to offer IT-facilitated products
and services. Today, almost every commercial bank branch is at some stage of
technology adoption, be it Automated Ledger Posting Machines, Total Branch
automation or Core Banking Solution (CBS). Keeping in view the large branch
network of these banks, the Core Banking solution(CBS) is being laid across by them
in a phased manner. According to latest estimates, CBS covers around 40% of the bank
branches accounting for nearly 70% of the business volume. ATMs (including shared
ATMs aided further by the National financial Switch initiative of RBI), internet
banking, any branch banking, credit cards, debit cards, etc, are being increasingly
offered. There are over 11,000 ATMs across the country and 11 million net
connections with around 23 million users.

Trends and Opportunities

Technology has enabled the banks to deliver, manage and integrate their products in
line with the customers' need. A range of services is now provided to both retail and
corporate customers covering different financial products, sweep-in/sweep-out
facilities, channel financing, straight through processing, etc. to name a few. The
multi-channel banking has acquired further dimensions to include third party
payments, such as utility bills, through different channels including ATMs (the new
ATM technologies come with nearly 150 types of offerings), mobile banking, etc.
Further extension of RTGS in scope and width and the introduction of the cheque
truncation systems should raise the customer expectation bar even higher. The day is
not far off when the banks would be viewed more as technology companies offering
banking products and services and services. While bank branches would continue to

function, they would reorient themselves as relationship centers rather than routine
banking service providers. More technology spends are expected in the near future on
areas such as implementation of data centre, expansion of CBS, Business Continuity
Plan (BCP)/Disaster Recovery Plan (DRP) installations, IT Security, Electronic Data
Intercharge (EDI), Storage solutions such as Storage Area Network (SAN)/Network
Access Storage (NAS) to take care of the hundreds of terabytes of electronic data
being generated, cheque truncation solutions, compliance to regulatory standards like
Basel II implementations, customer Relationship Management (CRM) solutions, data
ware house and data mining tools, channel integration, global treasury, performance
monitoring tools etc. Another area of great interest concerns the mergers and
acquisitions of banks\ wherein banks with techno-synergy can combine to benefit from
the same. A case in point is the recent acquisition of Global Trust Bank by the Oriental
Bank of Commerce. It is pertinent to note that, on an average, IT constitutes about
20% of the total expenditure of the banks. A major opportunity lies in the outreach to
rural centers which could bridge the urban-rural digital divide. As noted in the draft
report of the Bank's Internal Group set-up to examine the issues relating to rural credit
and micro-finance, opportunities abound in the sector with several possible options
like smart card-based Kisan Credit Cards, smart card solutions for Self-Help Groups
(SHG), bio-metric ATMs, information kiosks with local language and voice facility,
call centers, e-marketing of SHG's products through the bank's payment gateways, etc.
In the industry, IT has graduated from being viewed as a Cost Centre to a Profit
Centre. The line between IT and non-IT functions has got increasingly blurred. The IT
personnel have to know the business and the business personnel should be IT
conscious. The limited security-oriented perspective of IT has given way to wider
areas such as value for investment, performance measurement, etc. As more and more
Indian banks are moving towards centralisation and beginning to offer innovatively
packaged multi-channel products involving huge investment, IT Governance has
become the norm of the day. Thankfully, it is already practised knowingly or
unknowingly by the Top Managements of the banks in some form or other as observed
from the several IT related subjects finding place in the agenda of most Board
meetings. However, adoption of a structured IT Governance framework would enable
a bank to perform its business in an orderly and effective manner benefiting the
customers and, in the process, aid in its own survival and growth. This needs to be

considered against the fact that nearly 70% of all customer defections is a result of
poor customer\ service. After all, it is estimated that it costs 5 times more to acquire
new customers than to retain the existing ones and that about 20% of the customers
contribute to 80% of the profits.
The Customer
John Smith is a businessman and golden customer at ABC Bancorp. John starts his day
by checking his iGoogle dashboard and, particularly, his banking widget where he can
access his accounts and his financial status. He also logs into his Facebook account to
check the latest notifications. He notices that some of his contacts posted
recommendations of a new banking offer: a Green Loan. On his way to the parking lot,
John quickly logs into his Mobile Banking Application, browses through the new
offers and marks his interest in the new Lending Product. He uses his NFC mobile to
pay for the parking.
During the day, David Banks, his account manager, contacts him to schedule an
appointment. John goes to the branch and uses his NFC phone to identify himself. A
personalized message is displayed to welcome him and a notification is sent to his
account manager. While waiting for his account manager, he interacts with an avatar
using his voice to get some additional information about the Green Loan offer. Then,
the account manager welcomes John, explains the advantages and details of the offer
and shows him how to subscribe to it. John decides to take his time to think about it.
Later in the day, John connects to his Banking Widget Portal to subscribe but gets
stuck on a tricky question concerning his tax situation. He requests chatting to his
account manager. He explains the problem to Mr. David Banks who suggests he
securely takes control of Johns computer. Thanks to the collaborative co-browsing
feature of the banking widget portal, John gets a tailored assistance to his needs. He
finally subscribes to the Green Loan offer the same day by digitally and remotely
signing the contract using biometrics.
The Banks Relationship Manager
David Banks starts his day by logging into his RIA Banking Workstation and accessing
his integrated agenda. An integrated Web 2.0 RSS feed reader alerts him of the launch

of some new products. He logs into the banks Social Network to learn more by
discussing it with other colleagues and experts. This Collaboration tool facilitates the
viral spread of knowledge across the bank departments.
Thanks to the Branch Monitoring Application, he gets real time metrics on the
customers within the branch (such as how they are distributed and areas where the
queue is long), which enables him to react quickly, avoid congestions and optimize
space usage. While browsing through the online notification list, he notices John
Smiths interest in a new banking offer. Because John is a golden-level customer,
David uses the RIA Banking Workstation to immediately call John by using an icon on
his profile. He uses the same application to automatically book a free slot during the
same day.
David prepares for his meeting by using an analytical tool that gives a summary of
Johns situation in plain English. This enables him to better understand Johns needs
and make more relevant offers.
During the day, he gets a pop-up notification on his Banking Workstation alerting him
that John has stepped into the branch. David meets with John and gives him details on
the Green Loan offer. He takes the opportunity to suggest other offers that might
interest him. Later on, David gets an alert telling him that John is requesting online
assistance. He accepts and offers to securely take control of Johns PC thanks to the
co-browsing capability. He assists John until the end of the procedure and helps him
digitally and remotely sign the contract.
The Banks CIO
At an executive ballroom in the London headquarters of ABC Bancorp, Steve Brown
-- The banks global CIO -- kicks off his bi-monthly leadership meeting. Participants
include regional CIOs and directors in New York City, Shanghai, Sao Paolo, and
Singapore, linked together via state-of-the-art telepresence systems. Topics on the
meeting agenda include banking in a box for South American countries, data
governance, security and IT risk, IT and sustainable strategy and process optimization
in an agile-sourcing environment. The meeting marks the official launch of ABCs
cloud-based, banking in a box offering, which enables ABC Bancorp to enter new
markets at an unprecedented speed while satisfying local regulatory and market

requirements. With more than half of ABCs IT infrastructure being outsourced, much
of the discussion on that day is devoted to how to effectively manage ABCs data
resources. In light of recent cyber attacks and data breach incidents, data security has
become the No. 1 concern among the meeting participants. The meeting adjourns by
noon.

Challenges and Drawback of technology

It doesnt stretch ones imagination to understand that the scale and complexity of
banking has undergone tremendous changes in the last 20 years. From the Indian
perspective, the evolving banking idea presents unique opportunities and challenges.
The reason is India is a country with huge population and the demographic
growth of India is such that it is going to become the most populated
country very soon. Channel technologies can bring about closer integration
between the rural and urban populace. The hitch is that the pace of technology
adoption, a key feature of the urbanized world, cannot be forced upon the
rural population. Here, India needs to learn its lessons from China which has managed
to rapidly urbanize its rural population and been able to harness technology to the
fuller benefits of its newly urbanized populations.
Another challenge non-branch channels throw up is the lack of human touch that
previously characterized banking transactions. The rather impersonal technologyenabled touch screen key presses and automated answering systems might
intimidate

and

overwhelm newly urbanized users who are by and large

technology-illiterate. It is therefore imperative for banks to ensure that technology is

tailored to the needs of different sections of people and is also backed by suitable
humane yet quick measures in the event of failure or breakdown.
The large number of complaints received by the Banking Ombudsman,
published in the RBI annual report for the financial years 2009-10 and 2010-11, are
indicative of the problems of technology proliferation, making it a priority area for
Indian banks. In 2010-11, 74% of the complaints were from urban/metro regions,
89% were from retail (individual) customers and around 30% complaints were
related to ATM/debit/credit card transactions and remittances. These do not include
complaints lodged at individual banks.

The way forward

Everyone today is convinced that the technology is going to hold the key to future of
banking. The achievements in the banking today would not have make possible
without IT revolution. Therefore, the key point is while changing to the current
environment the banks has to understand properly the trigger for change and
accordingly find out the suitable departure point for the change. There has to be a
holistic approach to fulfill the demand for increased variety in deposit and
investment products (also conforming to regulations) so as to grab a better market
share of investments through banks. Development of sophisticated products with lowcost technology is key. This calls for an in-depth analysis of customer needs,
the market and competitor trends. As the markets are very dynamic and
customer needs ever changing, banks need to invest in advanced analytical tools for
timely introduction of new products, which will give them early mover advantage.
The vendors who supply various banking solutions play a vital role in
leveraging innovation and designing products, thereby enabling banks to
achieve their goals.

CONCLUSION
The banking today is re-defined and re-engineered with the use of Information
Technology and it is sure that the future of banking will offer more sophisticated
services to the customers with the continuous product and process innovations. Thus,
there is a concept shift from the seller's market to buyer's market in the industry and
finally it affected at the bankers level to change their approach from "conventional
banking to convenience banking" and "mass banking to class banking". The shift has
also increased the degree of accessibility of a common man.

BIBLIOGRAPHY
WEBSITES LINK TILL 26TH OCTOBER 2014
1. http://www.infosys.com/trends/pages/banking-2014.aspx
2.

http://www.capgemini.com/resource-

fileaccess/resource/pdf/trends_in_the_global_banking_industry_2013.pdf
3. http://www.abhinavjournal.com/images/Commerce_&_Management/Mar13/8.pdf
4.http://timesofindia.indiatimes.com/tech/it-services/Tech-trends-for-banking-industryin-2014/articleshow/27749719.cms
5. http://reports.dionglobal.in/ChoiceAdmin/KnowledgeCenter/KC160220124.pdf