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GITA GOPINATH
(^) Gita Gopinath is an Indian-American economist who served as the first Deputy Managing Director of IMF. (^) Born – 8th^ December 1971 in Kolkata. (^) She received BA degree from Lady Shri Ram College for Women of University of Delhi in 1992 & MA degree in Economics from Delhi School of Economics. (^) She further completed MA degree at the University of Washington in 1996. She earned her PhD in Economics from Princeton University in
(^) Previously served as Chief Economist of IMF between 2019-2022.
HONOURS
In 2021 Financial Times named her among the “25 most influential women of the year. The Economic Association named her the “Schumpeter-Heberler Distinguished Fellow”. In 2019, she was awarded the “Pravasi Bharatiya Samman” by the President of India. She was chosen as the “Young Global Leader” by the World Economic Forum in 2011. The “Agriculture & Applied Economics Association” recognized her with the “John Kenneth Galbraith” award. In 2017, she received the “Distinguished Alumnus Award” from the University of Washington
MODERN BANKING (^) The concept of modern banking emerged after LPG reforms (^) Indian banks were forced to compete with world’s banks that were permitted to function in India. ICICI was the first bank to adopt modern banking facilities in the early 1990s. (^) After the internet charges became low in late 1990s, banks in India started adopting modern banking. (^) Now all the banks in India are providing modern banking facilities to their customers and competing each other in terms of advancement in banking and becoming customer friendly.
EVOLUTION The need for computerization of banking was felt in 1980s. Therefore Dr. C. Rangarajan committee was set up in 1988. (^) The committee suggested for customer friendly banking, “anywhere and anytime banking”. (^) As a result process of computerization kicked off with opening of economy in the early 1990s. It aimed at “Faceless, Paperless and Cashless” transactions. (^) The GoI initiated the digitalization of banks through the RBI. (^) Reserve Bank of India started two agencies under NPCI (National Payment Corporation of India. They are
- NACH (National Automated Clearing House)
- NFS (National Financial Switch)
CHALLENGES FOR GROWTH OF MODERN BANKING
Cyber security risks
Lack of customer awareness and understanding
Fear of online theft
Lack of training
Liquid money preference
Increasing pressure from competition
DIGITAL BANKING
Meaning : Digital banking is the automation of traditional
banking service through a digital platform.
- (^) Digital banking is not just helpful for the users but to the
banks as well.
- (^) Financial institutions offering digital banking get rid of
paperwork like cheques, demand drafts , pay slips etc.
- (^) Users will have 24x7 access without visiting the banks.
- (^) Digital banking is decreasing the circulation of hard
money.
TYPES OF DIGITAL BANKING PAYMENTS
Banking cards : Cards are not just used for
withdrawal but for online payments as well.
UPI ( Unified Payments Interface)
Mobile wallets
USSD (Unstructured Supplementary Service Data) : by dialing
‘*99#’, mobile transactions can be carried out without an
application or internet connection.
AEPS( Aadhar Enabled Payment System) : AEPS lets the
client initiate banking instructions following the successful
verification of Aadhar number.
TYPES OF DIGITAL BANKING PAYMENTS
PoS (Point of Sale) terminals : PoS machines
are portable devices that read a card to
authorize and complete payment.
Super markets and gas stations opt for this
method. Mobile phone’s NFC( Near Field
Communication) are being used now.
Internet and Mobile banking
DIGITAL BANKING
ADVANTAGES DISADVANTAGES
Low cost banking services (^) Online bill payments (^) Transfer services (^) Quality services (^) Convenience 24x7 availability (^) Less to no paper work required (^) Security issues (^) Lack of direct contact between bank officials and customers (^) Training and development (^) Technology disruptions render banking unavailability (^) Impersonal customer services (^) Money laundering risks
DIGITAL WALLETS
Meaning : A digital wallet is software based system that allows individuals to make transactions, such as bill payments, mobile recharge, travel/movie booking etc. (^) They can be used to transfer money from one bank account to other. (^) They provide a secure and convenient alternative to physical wallets. (^) With the help of digital wallets transactions can be done without cash or cards.
Digital wallets Physical wallets
(^) No additional charges i. There is no fees or additional charges associated with using digital wallets ii. Digital wallets are available for use at no cost. (^) Ease of use i. Can be accessed from anywhere at an time, providing convenience for users ii. Require only a smart phone with internet connection and a linked bank accounts. (^) Multiple transactions i. Can be used for wide range of transaction from paying bills to completing online purchases. ii. Can be used at the sales by scanning QR codes or by adding mobile number.
DIGITAL ACCOUNT OPENING
DIGITAL ACCOUNT OPENING (DAO) is the process of empowering an applicant to quickly , easily and securely open an account digitally. (^) Digital is now the everyday banking channel and DAO is accelerating at rapid pace. (^) DAO is more convenient than traditional banking as it can be accessed remotely from anywhere in the world at the click of the button. (^) It is also faster at processing requests than traditional banking. (^) Virtual savings accounts in India offer features like opening a savings account, creating FDs starting an SIP (Systematic Investment Plan) and more.
(^) Easier bill payments A person can set reminders for bill payments and clear the in just few seconds through mobile banking apps. (^) Rewards Offers reward like one-time rewards or a point system to redeem rewards of your choice. These rewards include points on transaction and discount codes for E-commerce websites. (^) Reduced black money circulation This is less of an individual benefit and more for the country at large scale, as the country moves towards virtual banking, it may positively affect the economy by curbing the black and counterfeit money. (^) Banking in remote locations Allow people in remote locations to access banking services, as long as they have mobile phones. This is a positive step towards inclusivity for the underbanked.
BIOMETRICS
Biometrics is a Point of Sale (PoS) technology that uses biometric authentication based on physical characteristics to identify the user and authorize the deduction of funds from a bank account.
- (^) Fingerprint payment, based on finger scanning is the most common biometric payment method. These type of features are called biometric data and they are becoming very much increasingly important when it comes to security in digital banking.
