INFORMATION TECHNOLOGY ©N S$ TOOR Pye aera Ft) tit SCO 32, 2" Floor, Sector’33-D, eieieend ts) 020 Phone 0172- de EET 2B ays 1NS TOOR compiition on INFORMATION TECHNOLOGY Computerisation in banks ‘The process of computerisation in banks started in early 80s with the recommendations of first Rangarajan Committee set up in 1983 to study the possibilities and stages involved in bank computerisation, 2 Rangarajan Committee was set up in 1988 to draw a perspective plan for bank computerisation over 5 year period of 1990-94 Networking (LAN and WAN) ‘The linking of branches and RO, ZO and HO may be on a Local Area Network (LAN) or Wide Area Network (WAN), LOCAL ARFA NETWORK Thi is computer network that links computers and peripherals within a localized area (Sey within a building). The connection can be "rough nodes (workstations) located any where inthe network.. General its within a limited range of up to 100 metres (in fet ‘eses upto J ki), The no. of devices that can be supported may vary fom 2t0 1000. LAN : The interconnection between these nodes i called LAN. It uses network adapters to share common medium between the connected computers. It uses appropiste software. Nodes: The independent system are known 2s nodes. These are known as clent nodes. These nodes route thelr requests tothe server and obtain required services Server: The central node that provides and controls all the services of the network is called Server. The manner in which the server hands the requests from nodes depends upon the topology and protocols. Topology or layout : The manner in which the devices are interconnacted called topology. There can be a certralized control or a distributed contra. ‘The centralizes control networks are (a) star (b) tree (c loop. The distributed control networks are (2) ring (b) bus topology. Data transmission : The deta is called the message broken into small units called packets. Each packet consists of some data bts and a header containing ts destination adress, These packets are passed from one packet bythe switching exchange to anther to reach ther destination. “The dota transfers over the networks is through @ method called Packet Switching mary of Topologies Topology Devices “connected te | Transmission wevels | Tanarission & veceived | Falure of one sation the network through Z Bus Topalaay ‘Single continoous cable | Ta bath drections By alatherstaions | Rest of network hat = - afleces Ting Topoloay Closed ioop ‘Ohe nade to ancther in | Destination Tecagnises | Rest of newark ‘one drection the packet and copies | affected the contents lar Fopaeay Geival-node is master | Each Wansaction Gavele | Each trareaclon Waves | Nebo Is wal ofleced Eech nade is joined to | through the central | trough the central | due to faiive ‘of one master by separate link | node. node, ode. oe Protocols: For effective communication between two units of equipment, there should be standards cules of commuricaton, that ‘are called protocols. These are protocols relating to software, cables and connectors. Protacols define the message formats and the ‘ules for exchange of messages. Commonly used adapters include: + Ethernet - In Ethernet system, the lsten-before-rensmit media sharing system is called the Carver-Sense Multiple Access {CSMA) with Colision Detection (CD). + Token Ring - The token ring systems use the deterministic medie-access control system. ‘Multiplexer : It is used to recelve signals from several communication lines ard pas on to one communication ine and vice verse. “The muttplever takes multiple low-speed lines and combines thelr individual data transmission capacity needs to transmit spectic ‘grouping, ona single high speed line. Net working operating system: The networking software Is used for LAN which sets up some computers as serve (host) and ‘others as clients tothe server. This software can run over any standard network, ‘The categories ofthese are (2) one using DOS as the filesystem on the server ard (b) one that uses UNIX as the fie system. Use of LAN in branch computerisation : In 2 branch, the front-line computerisation comprises several stand alone system which are connected through @ LAN. This gives access to each standalone system, to the data in other stand-alone systems. In this system, the customer can avail the all services from any stand-alone system. IF there is no networking, the custome wil have to approach diferent stand-alone fora separate service. Ifthe stand-alones are attached through LAN to a mini-computer for back ofice camputersation, the data wil not be required to be entered again to the min-computer. In this set up the stand-alone system function as inteligent terminals to the mini comnputer. “The trensacton processing, will continue to be with the stand-alone and not the minl computer. Advantages of LAN: 4, Resources ae shared by several users bringing down the overall cost of computerisation, 150034, Sector 330, Chanalgth Ph O17 2665623, 099170 1720 1NS 7008 compton on INFORMATION TECHNOLOGY 2, Information available on one stand-alone can be accessed by others. Hence duplication can be avolded. 3. Processing burden is shared by different machines Disadvantages of LAN: 1. Higher security rise 2, Maintenance cast is high as each individual stand-alone requires servicing. WIDE AREA NETWORK \WAW is large scale network spread over o large geographic are by using the telecommunication network, The banks use WAN for interconnect thelr branches with their controling omces, “The telecommunication network may be in the form of (2) dedicated lines celled the leased fines network or (b) by using the ordinary telephone tines called daled-up network or {6 through satelite link (which is an alternative to wite telecommurications) or 6) microwave inks Microwave systams and satelite communication network: icrowave systems have the capabilty of broad bank telecommunicaton. In this system, the signals are trensmitted from @ transmitting dish antenna to 2 receiving dish antenna atthe nest microwave station. Satellite fink : 10 this system, the text, data, voice or video information is converted into radlo waves at Earth stations and beamed over a broad band trensmission channel toa satelite. The satelite relays back the data to an Earth station. Uninterrupted Power System UPS provide cellable power to the computer system. It protects the computer system from power Hackauts as in case of power failre, tie UPS automaticaly takes over the power supply to the fe server. The workstations and cther terminals are algo atached with the UPS. The general features of UPS Is an inverter and bettery charger, m addltion to automatic change-over, The UPS can bet ‘Online UPS : In tis system, the main 230V input current is converted into 48V OC and from the battery charger-cun-rectifie Is then converted to 8 230V AC. In case of power fale, the #0V DC is supplied by the batteries. Offline UPS : In ths system, the battery chaiger and inverter are two separate parts. In case of power feiur, the batteries are ‘connected to the Inverter through an electronic change-over, to supply the power tothe computer system. Payment Systems and electronic Banking AUTOMATED TELLER MACHINE (ATM) tn India, the establishment of ATMs was resommended by the Dr. C Rangarajan Conmmittes, The standalone ATs started making their appearing in India in the early 1990s. ATMs are electronic machines which are operated by a customer himself to depositor withdraw cash, It can also be used o deposit eheques, eting balance infomation, geting account statement fr limited ents, payment of bill, transfer of funds ete. ATMs can be interior (ie, located inthe branch premises) or exterior (oes ouside. the branch premises such asin a shopping cente, ai po, railway station ete) Operation : For using an ATM, a customer requires an ATM card which is a plastic card ‘magnetically coded and read by the machine. To use an ATM, the customer has to insert the ard in the machine ‘aind quote his PIN (personal identification number). After establishing the authentication of the customer, the ATM permits a customer to make entries and after processing the transection, the machine performs the desired function. On completion of the transection, the customer's card is ejected. why Security : In order to provide proper security, the ATMS are provided access locks covering key board, monitor et. that could be opened with the help of ATM card ATM Models in India: 1, Online ATMs : These ATMs are connected to data base of the bank and provides transactions on realtime basis, online, The witherawal limits are fixed and the limit is monitored by ATM switch centre. 2. Offline ATMs: These ATMs are not connected to bank's data base. Withdrawals are permitted within a prefixed limit irrespective of the amount balance. 3. Stand alone ATMs: These ATMs are not connected to any ATM network. The transactions are restricted to the ATM branch and link branches only. 4, Networked ATMs: These ATMs are connected an ATM network '3CO_3, Sectr S50, Chonigarh Ph 172 2eeGbd9, OSLO TAD 2NS TOOR compilation on INFORMATION TECHNOLOGY oan raeennernnrenemeennrneermeentneeetis meee eee 3. Onsite ATMs: The ATMs that are installed within the bank branch premises. Off-site ATMs : The ATMs that are installed away from the bank branch premises. ATM Customer Interface Components Video Display Monitor Key Board or key pad ‘Touch sereen Slots for card reader, cash dispenser, envelop dispenser, deposit slot Advantage: Broader advantage of ATMs are + Quick and efficient services + Provision for un-interrupted service forall days of the week and on any time (24x75365). ‘Any place availability to the customer of the bank amounting to anywhere banking. + Extended working hours. + Helps in utilizing human resources in more productive functions by taking over the routine payment functions. + ATMs provide round the clock service with ease and privacy of operations. + I reduces pressure on bank staff and avoids congestion in the bank premises. 1 2. 4 ATMs for persons with disabilities RBI has advised the banks to provide all existing ATMs / future ATMs with ramps so that wheel char users / persone with disabilities can easly access them and also make arrangemens in such a way that the height of the ATH does not ceate an impediment in te use by a wheelchair user. Further, banks shauld make at leat one third of new ATM installed as talking ATMs with Brae keypaes and place them strategically i2 consultation wih other banks to ence that at lest one talking ATM with Sraile Keypad l generally ‘valle in each loca for catering to needs of visually imesred persons. ‘Transactions at ATMs failure-Time limit ‘times accounts of customers are debited though the ATMs dd not disbursed the cash for various reasons. Ganks take considerable time in reimbursing the amounts involved in such Fale transactions to card hoders. RBI nas decided (Feb 13, 2009) that, customer wil lodge Information within 20 days and tanks shal eimbutse the eustomers, the amount wrongful debited within 2 maximum period of 7 days from the date of recelpt of customer complaints, Norvadherence to the time opine shall attract penalties of Rs.100 per day, prescribed under the Payment end SelUement Systems Act 2007 (Act $2 of 2007). Personal Identification Number (Pin) ‘These are secret numbers written on the plastic money cards (say a debit card) with magnetic means. On insertion of the card into an ATM, the machine inquires about PIN. The machine allows the operation only on typing the correct, PIN and it does not permit operation, in case the PIN is not correct. PIN is similar to a pass word that a computer user has to quote for operating a computer. It is a randomly generated sequence of digits printed on paper and is ‘autornatially folded and sealed before it reaches the bank. The seal is required to be opened by the card holder only and has to be kept secret In addition to normal PIN used as password by the card holder, the pins facility could inelude:éynamic signature verification, fingerprint verification, voice recognition system, hand geometry, retinal pattern verification, vein n, visual recognition. PLASTIC CARDs (PLASTIC MONEY) Plastic cards are used as a medium of payment and are of different kinds with different features. These cards include credit cards, debit cards, smart card etc. ‘CREDIT CARDs A credit card is a plastic card of 8.5 em x 5.5 cm, The card bears the name and the acount umber of the holder and also th. date up to which the card is valid, Being an instrument of payment, the card holder can obtain either goods or services from merchant establishments (called Point of Sele) without prior payment, where such arrangements exist. At the time of purchase, charge slip is prepared on the basis of which payment is claimed from card issuer. ‘The amount is payable by the card holder to the issuer bank during a specified period. "SG 3, Sesto 350, Chandigarh Ph 0172 2665623, O9SATS LORD 3NS TOOR comptetin on INFORMATION TECHNOLOGY ————— How does the system function 2: A number of parties arc involved in credit card transaction and there is a contract between the eard issuer and the card holder Under this agreement the card holder is allowed to make use of the card at specified retail outlets (called merchant establishment) to pay for the goods and services. There is also another separate agreement between the card organisation and the member establishments Procedure : When a credit holder makes purchases fiom specified retail outlets, the retail outlets make out bills to the account of the card holder and obtain payment from the card organisation which in tum makes a monthly bill to the bank which issued the card. The bank makes payments to the debit of customer's aecount subsequently. The whole process takes about 30 to 40 days and during this period the card holder enjoys credit. Terms used with credit card business PoS or Point of sales : It means merchant establishment, where the card is to be used on purchase of goods or services Charge Slip or Sale Draft: It is the provisional bill relating to purchase of goods or services that is created by the merchant establishment and confirmed by the card holder as @ proof of purchase of goods or availment of service Diseretion permitted to the merchant establishment up to which it can aecept the card for payment Limit up to which a card holder can use the card. On payment of the previous purchases, the limit is ‘ost, stolen or misplaced cards. Hot lists The caution, marked by the issuer bank, against use of card by the card holder because of default in payment Charge backs: The transactions which have been accepted by the card holder earlier but disputed Ister: DEBIT CARD A debit card is also a payment card used to obtain cash, goods and services automatically debiting the payments to the card holder’s bank account instant, in which credit balance exists Procedure - Ina debit card when the holder makes a purchase, the merchant establishment swipes the card on an electronic data capture machine which debits the bank account of the card holder. The merchant establishment gets the payment before providing the goods or services. Requirement - A client need to have a bank account if he wants a debit card. In the debit card the limit of the cardholder will be amount of funds he has in his account, Kinds - The debit cards are of two types i.c. personal identification number (PIN) being issued by Master Card in association with CitBank and signature based card being issued by Visa International in association with HDFC Bank, Distinetion between credit and debit card Credit Card : In this card, the catd holder, uses credit line, makes drawings within the sanctioned limit, makes, ptyment on recefpé ofthe bill from the merchant establishment, makes payment from aay other bank account, Debit card : In this card, the Card holder uses the balance in his account, uses the amount avatlable in hi payment is made immediately on purchases, customer must have account with the bank, Smart card RBI defined Smart card (Nov 15, 1999) as card or @ fimetion of a card which contains real valve in the form of electronic money which someone has paid for in advance, some of which can be reloaded with further funds or one which can conneet to the cardholders’ bank account (on-line) for payment through such account and which can be used for a:range of purposes’. The definition include pre-paid cellular phone cards with stored value. These cards look like any other plastic card with an integrated circuit (IC) chip installed, The IC contains memory, a processor and communicates with outside world through ‘contracts on the surface of the card. The card may be intelligent memory chip card or micro-processor card, Process mart cards are most suited for banking application as these cards have build-in-memory and the processor. The protection is based on the Data Eneryption Standard which is accepted by the International Standard Organisation, secount, SMART CARDS - TYPES Stored value eard: These are also known as pre-paid cards or value added cards, Cards have magnetic stripe or a computer chip in which value is stored. On use of card, funds are directly debited from the card, ‘Magnetie stripe card: Conventional cards like ATM card, credit card are all magnetic stripe cards. But smartcard in the form of magnetic stripe card can store much more information Re-loadable eards: These are the cards where the value is replenished once it is used, Disposal cards: These cards have specific value and once the value is used, these are discarded. ~ ‘30034, Sector 39°, Chanda Ph. O172- 2665523, 023178 12720 4[NS TOOR completion on INFORMATION TECHNOLOGY Closed cards: These are the cards the value of which can be used for a specified purpose like phone eards, Open Cards: These can be used for several issuers and called electronic purse or electronic wallet. Electronic purse: The electronic cards have the provision for use of different types of accounts of the user. This facility is known as electronic purse each having storage of separate amount. It provides a new method of payment which permits the bank to enter into transaction market complementary to the credit or debit card transaction market. The cash in electronic purse cannot be spent if the purse if reported as los MULTIPLE PINS & BIOMETRIC SECURITY ‘The smart cards have different pockets for storage of cash for different types of transactions. The personal identification security is the most commonly used method of identification which relates to linking of the card to the * rightful owner. There is unique PIN for different pockets. As a result, a smart card may have multiple PINS, 1 addition to PINS, there can be biometric security features, which include the Following: Véice recognition : Comparison of voice withthe earlier recorded voice. Retinal pattern verification; Retina scanning by using a low intensity infrared beam to ascertain identity of a person. Vein verification uses the unique vein structure ofthe human body to identify the individual Finger print veri done by electronically scanning fingerprint ridges. ‘Visual recognition: It is done by digitizing the picture of a person and store it in a smart card memory. Hand geometry : Its done by scanning the hand geometries with focus on finger Jength, skin web opacity and radius of curvature of fingerprints. Dynamie signature verificatio acing the manner in which the signatures are written, Electronic Cheques When a cheque is issued in electronic farm instead ofits normal physical form by use of digital signature, itis called electronic cheque, It contains exact mirvor image of the paper cheque and is generated, written and signed in a secured system by ensuring the minimum safety standards with the use of digital signature (with or without biometrics signatures and asymmetric crypto system). Electronic cheque is also a valid like a paper cheque, ws 6 of ‘Negotiable Instrument Act (as per 2002 amendment to NI Act) , the Information Technology Act 1999 is applicable to cheques only and not other negotiable instruments such as Bill of Exchange and promissory notes, Internet Banking {In addition to traditional delivery channels such as branch banking, the banks offer banking services through different type of networks. The banks offer banking service through internet also. Intemet banking. removes the traditional seograpttical barriers. ‘Thetta'3 levels of these services: J. Basie level : The banks disseminate information about their service through their websites:-Banks provide information also through eMail . : 2. Simple transactional website : The customers are allowed to submit thei i based transactions. ‘ully transactional websites: Customers are permitted to undertake transfer of funds, payment of bls etc, : Mobile Banking Banks are now offering services on mobile phones, Reserve Bank has brought out a set of operating guidelines (Oct 08, 2008) for adoption by banks, ws 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007). The mobile banking transactions means the banking transactions by using mobile phones by bank customers that involve creditidebit to their accounts, Only banks which are licensed and supervised in India and have a physical presence in India will be permitted to offer mobile banking services. Only Indian Rupee based domestic services shall be provided. Use of mobile banicing _setviges for cross border inward and outward transfers is strictly prohibited ‘Transaction limit in Mobile Banking 3. Transaction iit: As per cscrtion ofthe bank (eater it was 2 daly cap of 8s 50,000). 2. Banks may ago fx math transaction mit degending onthe banks avn rs perception of the customer, lecnolgy/ Security Standard: Transactions up to Rs 5000 canbe without end-to-end encryption, Banks can provie fund transfer services which facitate transfer of funds fom thelr accounts for delvery In cash to the raclents (at ATMs ‘= through any agen(s) appointed by the bank as business correspondents) ‘SCO 3, Sector 38, Chandigarh PR O172 2663623, 00817812700, 5 structions bli'dé'not permit fundNS 1008 compilotion on INFORMATION TECHNOLOGY | Max value sal be Rs 5000/- per transaction i, Banks may cap the velocity of such transactions, subjéc to a max value of Rs 25,000/- per month, per customer, EFT Systems A funds transfer system stands for a wire transfer network, automated clearing house and other communication system of clearing house, through which payment order by a bank may be transmitted to the bank to which the order is addressed. In the 1970, there were ano. of developments that led to emergence of EFT as an important system, Society for Worldwide Inter-bank Financial Telecommunication (SWIFT) SWIFT was also founded in 1973, as non-profit cooperative organisation under Belgian law with its HQ in Brussels, by 239 banks spread over 15 countries. The objective was to create a unified international transaction processing, and transmission system to meet the ever growing telecommunication needs of the banking industry. Major features of SWIFT: + Itis owned by member banks. + Its a basically a message transmission system, that takes place throughout the world. + Itoperates on a 24 x 7 basis. + ‘The messages are acknowledged i. either accepted or rejected. + In India, most of the banks are members of SWIFT. These are connected to SWIFT'S regional processor at Mumbai. Message formats: The message formats for inter-bank transactions are standardised. There is a large no. of message formats covering different business areas, some of which are as under: + Customer directed transfers «Inter-bank wransfers + Documentary credits or guarantees. + Collection of checues ineluding travellers cheques + Cash management Security of messages: SWIFT uses the telegraphic test keys (that are traditionally used for authentication of amounts in messages between banks). [ts automatically calculated on the entire message text. Any change in the message text, in this manner, is immediately detected + The information over the SWIFT secured and confidential + It makes use of encryption (a security control for ensuring data confidentiality) and checksum (a secu to prevent automatic changes during the transmission) + SWIFT undertakes financial lability for the accuracy and timely delivery of all validated messages from the point these enter the network to the point they leave the network. In other words, the SWIFT is responsible for the ‘messages between the regional processors of SWIFT and not between the regional processor and the individual banks. + SWIFT provides protection against unauthorised access and protection of transmission (for loss or mutilation of the ‘ossage, errors in transmission, oss of privagy, fraudulent alteration), REAL TIME GROSS SETTLEMENT (RTGS} RTGS implemented w.e-. 26.03.2004 (revised on 19.10.13), is a cantraized payment system operated by RBI. In RTGS inter-hank ‘ayment. instructions are processed and settled, on gross basis in 2 real time environment. It uses Indian Finance Network CIVFINET) and SEMS piatforms. RTGS is regulated by RTGS System Regulations, 2033, ‘Management : Standing Committze consisting of members from RBI, benks and other stakeholders. Membership: Open to all banks / institution. Grteria for membership : The entity has to fulfil the requirements such as () Membership of INFINET / SFMS /domestc SWIFT network, (i) current account, settlement account and Substdary General Ledger afe with REI. ‘Type of Members : () RA! (i) regular participants such as banks, (li) restricted participants such as primary dealers and (Ww) clearing house (permitted to submit MNS file to RTGS system). RTGS Transaction Type 2a) Interinstttional inter RBT transaction ) Customer transaction ity control ‘300 34, Sector 350, Crndgat Ph. O172- 2665623, 083478 12700 3NSTOOR complotion on INFORMATION TECHNOLOGY a , ©) Government transaction 4) Multatera! Net Settlement Batch (HINSB) ©) Dellvery versus Payment (DvP) 1) Own account Transfer (OAT) 4) Return Payment Transaction ‘Components, Communication and Settlement 4) Transaction Flow: Members communicate through pre-defined message’ format (ISO 20022) to the Centrel System through’ INFINET. Message is digitally signed & encrypted, IDRET isthe Certifying Authority (CA) for digital ceticates. 2) Unique Transaction Reference (UTR) / Transaction Identification Number: Message is assigned UTR number In field ‘Transaction dentiication. Structure : “2OKRCYYYYMMDDnanannnn”, Jn 22 digit UTR, 1000 i Fist 4 characters of IFSC of sending participant, & is RTGS system, Cis channel of trensaction, YYYYMMDD is year, month and date of transaction and nnannnnn is sequence number 3)-Transaction Type Code (TTC): TTC is used to idently te type of individual peyment messages for & particular type of payment transaction. TTC values range is °0000" to "9890". I is part of message content 4) Priority: The members may assign @ priarity for processing a payment transaction. The range of priory & from ‘Ot’ to ‘99 (ower assigned number means higher priority), “The priores from "01" to "10" are for RBI ani "11 to 99" or participants. RBI transactions are assigned highest parties followed by MNNSB transaction fle ard inter-REl, 5) Queuing: Payment messages ere maintained in a logical payment queue, pending settlement, which Is dedered by trensaction Briorty numbers. Top of queue transaction is taken up for settlement. Members may cancel or re-priolise transactions, 6) Settlement: A transaction is finaly and inevocably seitied when the Settlement Account of sending bank is debited and receiving pattcipant is credited. With enatiing of the “Hybrid” and ‘Future value dated transaction’ features w.e¥. July 14, 2014 1) There is of-setting every 5 minutes. The transections with normal prorty are settled in offsetting mechanism, with @ maxi of two attempts ie. 10 minutes. If aot settled in offsetting mode, the priority would be automaticaly changed to “urgent” Parameter value of 10% (he, 10% of balance in settlement A/c would be taken for settlement inthe offsetting mode), 2) Future Value cated Transaction enables the customers to initiate RTGS transactions, 3 vcrking days in advance for setting in RTGS on value date RTGS Business Day and Operating Sessions: RTGS is operational on all days except holidays. RTGS daily events 3) Start of Day (SOD): It triggers basic functions ofthe system. Transectirs are not accepted for settlement: 2) Open for Business (OFB): The system starts processing al types of messages (Time ~ 8 a7). 3) Initial Cut-off (ECO): It pleces restriction oF submission of customer transactions. After ICO time, participants cannot submit ‘customer transactions. Some specific types of transactions viz, iter-institubonal / inter-RAl, return payments, MSB, exc. are ‘accepted for settiement after ths cutoff, bas (Time = 4.30 pm. For Saturday ~ 2 pm). 4) Fitiai Cutoff (FCO): It is end of all normal operations conducted by @ participant forthe business day, with the exception of those payments that credit 2 participant with additional iquidty to repay the outstanding IDL loans. Any other pending traneactions willbe automatically cancelled by the RTGS system. (Time ~ 7.45 pm and for Saturday ~ 3 pm). '5) IDI Reversal Sessions It is avaliable only to the partiopants having outstanding IDL positions after funds from any other RBI/own account transfer purpose. (Time - 7.45 pm to 6.00 pm). : ©) End of Day (EOD): This is the last event of every business day. The balances of settlement accounts will be swept back to the current accounts of respective banks maintained in E- Kuber. a (Time ~ 8.00 pm and for Ssturday 3.30 pr), 7 Participants may request RBI for time extension of any operating Session, one hour prio tothe closing of that operating session. Intraday Liquidity (IDL) Facility: RGX'mey-grent repo fecity called, TDL facility (against eligible collateral Govt. of India dated securities aid treesury bills) for the settlement of RTGS transaction to overcome short-term requirements for funds. Rights of Members : A member may resign from the membership with 30 days prior nolice to RBI Obligations and Rights of Members / Participants 4. The originating member should ensure 2 factor authentications by adopting ‘maker-checker principe It should releese payment message from ther system to RTOS central system within 30 minutes of debting 2 customer's aozount 2. Cred receved by the member to be credited to the account of the beneficiary on the basis of the account number in the payment message within 30 minutes ofthe receipt of the message at the Member Interface. 3. For dey in providing crecit, the beneficiary's bank has to pay compensation at current repo rate plus 296 to the beneficiary per by, 4. IF credit of funds fs not possible, funds wil be returned to originating member within one hour of receipt of payment at Member Interface of the recipient member or before end of RTGS Business day, whichever is earlier, For dele in returning the payment, the recipient member wll pay compensation at current repo rate plus 2% to the originating member. Amount : Min RS.2 12. Max : No rection, “Transaction times : Customer transactions -8 am to 4.30 pm. Bank transactions: 8 ain to 7.45 pm inal Cutoff to veceive ‘SCO 3, Sector 380, handgaih Ph OI72- 266560, BSI7® 12720, 7[NS TOOR compilation on INFORMATION TECHNOLOGY NATIONAL ELECTRONIC FUNDS TRANSFER RBI operationalised NEFT System in Nov¥2005. Tt facilitates transfer of finds from any bank branch to any other ‘bank branch. Parties: The sending bank, the sending Service Centre, the NEFT Clearing Cente, the receiving Service Centre and the beneficiary branch, Amount : There is no lower/upper value limit. Bank account: NEFT is an account to account transfer system. The remitter and beneficiary should have a bank account Foreign remittances : These are not permitted. NEFT for loan repayment : It can be used. Eligibility criteria for participants ‘An applicant shall (1) be a bank (2) be a member of RTGS (3) have installed SFMS () meet other RBI prescribed eligibility conditions. Any time by giving a notice of one month, withdrawal is allowed. n of Payment Instruction: It is irrevocable when executed by the sending bank. Acknowledgement by beneficiary bank & return in case of non-credit: Acknowledgements are nol envisaged. A message which is not returned uneffected before the next settlement is treated to have been completed and credit afforded to the beneficiary’s account by the beneficiary branch. Uneffected credits are re-transmitted back as return NEFT transactions in the immediate next batch itself. Refund advice to sender: If the beneficiary fails to get payment, the sender shall be informed immediately after the sending bank gets the returned NEFT. Advice to beneficiary : After crediting the account of the beneficiary, the beneficiary bank shall advise him of ti funds received. The statement of account or any online messaging system shall indicate the source of funds as well. Confirmation of credit: Destination bank to relay to the originating bank an acknowledgement containing the date and time of credit, immediately after the credit is afforded to beneficiary accounts, in turn, originating bank to initiate a mobile SMS or generate an e-mail to the originator to convey the fate ofthe transaction, Holidays: In case of a holiday at the beneficiary branch, the eredit will be effected on a value dated basis or latest on next working day. Inter-Bank Settlement Inter-bank Funds Settlement at RBI: Every participating bank/institution shall open and main Mumbai, a settlement account for seitlement of payment obligations under the NEFT system. Finality of the settlement: The settlement shall be final and irrevocable, as defined ws 23 of Payment and Sestiement ‘Systems Act 2007, when determined in terms of RBI notified procedure. Other matters 1. Customers can complain to Ombudsman if complaint is not resolved within 30 days. 2. The participating banks shall reconcile the transactions on a daily basis with reference to the settlements/settlement details. in NEFT centre, NEFT-Refinement of Process Flow/Features (@ Return Window ~The concept of retum within 2 hours of completion of a batch has been introduced, This B42 return discipline (instead of earlier ‘T+1) requires: bank to afford credit to beneficiary accounts immediately upon completion of a batch or else retum the trapsaetions within 2 hours of completion of batch settlement, if credits are unable to be afforded. nae i) Operating Hours -8 am to 7 pm i) Hourly Settlements ~ There are 12 hourly settlements Process flow NEFT system ‘Step-1: The remiter fills in the NEFT Application form giving required particulars and authorises the branch to remit the specified amount to the beneficiary by debiting his account. Step-2: The remitting branch prepares a Structured Financial Messaging Solution message and sends it to its Service Centre for NEFT. Step-3: The Service Centre forwards the same to the RBI (National Clearing Cell, Mumbal) to be included for the next available settlement. — ‘800.94, Sector 3-0, handigait Ph 0172 2665523, 83178 1700 8NS TOOR completion on INFORMATION TECHNOLOGY Step-4: At the clearing centre, RBI sorts the transactions bank-wise and prepares the accounting entries of nat debit ‘or credit, for passing on to the banks participating in the system. Thereafter, bank-Wise remittance messages are transmitted to banks. ‘Step-5: The receiving banks process the remittance messages received from RBI and effect the credit to the beneficiaries’ accounts. MW.EE, Mar 09, 2013, RBT implemented the feature of continuous release of credit messages in NEFT system, to provide maximum. time to beneficiany/destination banks to process the inerd NEFT transactions. RIGS & NEFT ~ Distinction : NEFT works on Net settlement, unlike RTGS, that works on gross setllement Besides, NEFT is a batch based system, while RTGS is an online real time system, : CHEQUE TRUNCATION Cheque Truncation is an efficiency enhancement initiative in the Payments Systems area, initiated by RBI. ‘Truncation is the process of stopping the flow of the physical cheque, to the drawee bank branch, The physical instrament is truncated (i.e. movement of paper cheque is stopped) at some point, en-route to the drawee branch and fn electronic image of the cheque is sent, along with the relevant information, like the MICR fields. date of presentation, presenting banks etc, Legal recognition : By amending Seo 6 of NI Act, the physical image of a tuncated cheque and electronie cheques, have been recognised equal to a paper cheque. Method for truncation ‘The truncation can be done by using the MICR data or by use ofthe image processing, Use of MICR data for truncation : The entire MICR code line can be captured electronically. The electronic information can be exchanged with other banks for clearing purpose. Use of image processing: Both sides of the cheque shall be scanned and the image shall be stored in the digital format. The cheque shall be shifted to some off-site storage and the image shall be used Imparting uniqueness of the cheque to the image: Image carries digital signature, and physical endorsement of the presenting bank, in a prescribed manner, Process flow Step-1: The presenting bank captures the data & images of the cheques using their Capture System Step-2: The captured images ond data ate sent to the central clearing house (CH) for transmission to the payee/drawee banks. For that, RBI provides to the banks, the Clearing House Interface (CHI) software. It enables the banks to connect and transmit data in a secure way and with non-repudiation, to the Clearing House (CH). Step-3:+CH processes the data and arrives at the settlement figure for the banks and sends the required data to payee/drawee banks for processing at their end, Step-4: The drawee/payee banks use the same CHI for receiving the data and images from CH. ‘The drawee bank Captare System processes the inward data and images and generates the retum file for unpaid instrents “ Criteria to participate in CTS ‘The criteria for banks participating in CTS are: i, Membership of the clearing house. ‘Membership of the Indian Financial Network (INFINET) ‘selnfrastructure requirement: The infrastructure required for CTS from bank's end are, (a) connectivity from the ‘bank gateway to the clearing house, (b) hardware and software for the CTS applications. RBI provides CH and the banks have to procure other hardware and system software for the CHI and the application software for their capture systems on their own, Image specifications in the CTS The electronic images of truncated cheques is in gray scale technology. There are 3 images of the cheques ie. front srey, front black & white and back black de white. The image specifications are: Image Type : Minimum DPI Format Compression «Front GrayScale : 100 DPI JFIF JPEG Front Black & White :200 DPI TIFF CCITT G4 + Reverse Black & White : 200 DPI TIFF CCITT Gs ‘The image quality of the Grey Scale image shall be 8 bits/pixel (256 levels) Security of the image and data cre ‘SCO 3, Sectr 380, handgath Ph 0172. DOESGPS, 098178 12D 3[NS Y00R compotion on NFORMATION TECHNOLOGY ————— ‘The seourity, integrity, non-repudiation and authenticity is ensured using the Public Key Infrastructure (PK). The CTS is compliant to the requirement ‘of the IT Act, 2000. The PKI standards used are in accordance with the ‘appropriate Indian Acts and practices of IDRBT which is the certifying authority for banks & Fis in India, ‘ Change in the process for the customers ‘There is no change in the clearing process. Customers would continue to use cheques es at present, except in the use of image friendly coloured ink for making the instruments. Those customers, who used to receive the paid instruments, like Govt Departments, would only receive cheque images instead of the physical instruments Benefits of Cheque Tr (@) Speeding up the collection of cheques (b) enhancing the customer service, (c) reducing the scope for clearing related frauds, (d) minimizing the cost of collection of cheques, (e) reducing the reconciliation problems (1) eliminating the logistics problems etc. Image Replace Document (IRD) Under CTS, after the capture of the image, the physical cheque would be warehoused with the presenting bank, In case any connected persons requize the instrument, the payee bank would issue a copy of the image, under its authentication, which is called the Image Replacement document (IRD). It is a legally recognized replacement of the original cheque for re-presentment, The provisions of NI act (Section $1(3) of the NI Act as amended) also permit the usage of such IRD. Preservation of truneated cheques ‘The physical instruments are required to be stored fara statutory period. It would be obligatory for presenting bank 10 warehouse the physical instruments for that statutory period. In ease & customer desires t3 get a paper instrument back, the instrument can be sourced from the presenting bank through the drawee bank, Important eharaeteristics of cheque truncation 1), Truncated is possible when the cheque enters the banking system, 2). Truncation can be done only inthe clearing process, to reduce the time delay. It can be done by the banks involved or clearing house. The drawer or holder cannot truncate a cheque. 3). The paper cheque will be replaced by the electronic image in the process of truncation 4). The paper cheque shall be preserved by the collecting bank or the elearing house, after trincation 4). Truncation is a more secure system than the current exchange of physical documents in which the cheque moves from one point to another. NEPAL REMITTANCE SCHEME It is a cross-border one-way remittance facility scheme, facilitating remittance from India to Nepal. A remiter can transfer funds up to Indian Rs.50,000 from any of the NEFT branches to Nepal. The beneficiary would receive funds in Nepalese rupees. Beneficiary's bank account in Nepal : If the beneficiary maintains a benk account, the credit could be made to the account. If the boueficiary is not serviced by a bank branch, the Nepal SBI Bank’ Ltd. has tied up with a money transfer company in Nepal to arrange delivery of cash to the beneficiary. Documents/ Identifications + If the remitting customer is maintaining an account, there is no need for additional identification, Otherwise, the remitter has to produce proof of identification document like Passport (PAN / Driving Licease/Telephone Bill’ certificate of identification issued by employer with details and photograph etc. This information is captured in the system in compliance with KYC norms. The complete address and telephone/mobile number of the beneficiary in Nepal are also'required, Charges : For transfer of fund from an account in an NEFT enabled branch in India to an account maintained with Nepal SBI Bank, there are no charges. All remittances from any NEFT branch in India are free of charge. As Nepal ‘SBI Benk has to make payment to the Money Transfer agent, charges for other transfers areas under: | up to INR. 5000 - INR. 50.00 inclusive of service tnx for every remittance 2. above INR.5000/- and up to INR 50,000.62 ~ INR. 75.00 for every remittance, inclusive of service tax ‘The amount of charges collected fiom the remiter Is remitted to Nepal as a part of the remittance and forms a part of the message format Restriction on the number of remittances : Any remitter is allowed to remit maximum of 12 remittances in a year. SCO, Sector 33-0, Chanda Ph. OF72 REED, O93178 12720, 701NsTOOR compiiction on INFORMATION TECHNOLOGY ELECTRONIC CLEARING SERVICES ECS is a.mode of electronic fimds transfer from one bank account to another bank account using the services of a Clearing House. This is normally for. bulk transfers from one account to many accounts or vice-versa, ‘Types of ECS : There are two types of ECS called ECS (Credit) and ECS (Debit). ECS (Credit) is used for affording credit to a large number of beneficiaries by vaising a single debit 10 an account, such as dividend, interest or salary Payment. ECS (Debit) is used for raising debits to a numnber of accounts of consumers! account holders for crediting a particular institution. ECS-Credit is available at 60 centres and ECS-Debit at 15 centres. ECS-Credit System ECS payrtients can be initiated by an organisation (called ECS user) which has to make bulk or repetitive payments to ‘a number of beneficiaries, after registering itself with an approved clearing house. ECS users have also to obtain the consent as also the account particulars ofthe beneficiary, for participating in the ECS clearings, =‘The ECS user's bank is called as the sponsor bank and the ECS beneficiary account holder is called the destination account holder or beneficiary and his bank is called the destination bank. Working of ECS Credit system : The ECS useis intending to effect payments, have to submit the data in a specified format to one of the approved clearing houses. The clearing house debits the account of the ECS user through the secount of the sponsor bank.on the appointed day and credits the accounts of the recipient banks, for affording ‘onward credit to the accounts of beneficiaries. Participation by a beneficiary: The beneficiary has to furnish a mandate giving his consent to avail of the ECS «facility by communicating to the ECS user, the details of his bank branch and account particulars, «Communication to the beneficiaries : The details about the credit are communicated by ECS user, so that the beneficiary can match the same with the details furnished by the bank in the account statement/passbook, Advantages to the beneficiary: (t) No need to make frequent visits to his bank for depositing the physical paper instruments (b) no apprehended Joss of instrument and fraudulent encashment (c) no delay in realisation of proceeds after receipt of paper instrument. Benefit fo the ECS user : (a) Saving on administrative machinery for printing, dispatch and reconciliation (b) Avoids chances of loss of instruments in postal transit (c) Avoids chances of frauds due to fraudulent access to the paper instruments and encashment. Advantages to the banks : Banks handling ECS get freed of paper handling that ereates lot of préssure on banks as they hiiVe to encode the instruments, present them in clearing, monitor their retum and follow up with the concerned bank and customers Limit an the amount of Individual transactions : No value limit on the amount of individual transactions has been preserited under the scheme. Processing / Service charges : RBI has deregulated Service Charges to be levied by sponsor banks. As regards Processing Charges levied by RBI and other banks managing the clearing houses, the same has been waived, Be ECS debit system ae Under ECS, an account holder with a bank can authorise an ECS user to recover an amount at a-freseribed frequency by raising 2 debit in his account. The ECS user has to collect an authorisation which is callstl ECS mandate for raising such debits. These mandates have to be endorsed by the bank branch maintaining the account ‘Scheme working: Any ECS user desirous of participating in the scheme has to register with an approved clearing ‘shouse He should also collect the mandate forms from the participating destination account holders, with bank's acknowledgement. A copy of the mandate should be available with the drawee bank. ‘The ECS user has to submit the data in specified form through the sponsor bank to the clearing house, The clearing house: would pass on the debit to the destination account holder through the clearing system and credit the sponsor ~‘bank’s account for onward crediting the ECS user. All the unprocessed debits have to be retumed to the sponsor ben Within the time frame specified. Banks wil treat the electronic instructions received through the clearing system on par withthe physical cheques, Advantages to the beneficiary :(a) Eliminates the need to go to the collection centres/banks by the customers and no figed to stand in Jong ‘Q's for payment (b) Customers also need not track down payments by last dates Benefit to the ECS user : (a) Saves on administrative machinery for collecting the cheques, monitoring their {ealisetion end reconciliation (b) Better cash management (¢) Avoids chances of frauds due to fraudulent access to ‘the paper instruments and encashment. ‘300 34, Secor SD, Ghnaigath Ph 172. 6623, 098178 E20 1NS TOOR comitation on INFORMATION TECHNOLOGY ne rn a Advantages to the banks : Banks handling ECS get freed of paper handling that creates lot of pressure on banks as they have to encode the instruments, present them in clearing, monitor their return and follow up with the concerned bank and customers. + ‘The mandate given is-on par with a cheque issued by a customer. The only stipulation under the scheme is that the cxustomer has to give prior notice to the ECS user, to ensure that they do net include the debits. Current coverage of the scheme :The scheme is in operation at 15 RBI centres (ie centres where RBI manages the Clearing House operations) and at other centres where Public Sector Banks manage the clearing operations rocessing charges on individual transactions : RBI has deregulated the service charges that could be levied by sponsor banks. RBI has waived the processing charges levied by RBI. Institutions eligible to participate : Utility service providers such as telephone companies, electricity supplying companies, electricity boards, credit card collections, collection of loan installments by banks and financial institutions, and investment schemes of Mutual funds, ete. CORE BANKING SOLUTIONS Core Banking Solutions (CBS) or Centralised Banking Solutions is the process which is completed in a centralized environment ie, under which the information relating to the customer's account (ie. financial dealings, profession, income, femily members etc.) is stored in the Central Server of the bank (that is available to all the networked branches) instead of the branch server. Depending upon the size and needs of a banik, it could be forthe all the operations or for limited operations. This task is camvied through an advance software by making use of the services provided by specialized agencies. ue to its benefits, a no, of banks in India in recent years have taken steps to implement the CBS with a view to buita relationship with the customer based on the information captured and offering to the customer, the customised financial products according to their need. 7 Essential requirement of CBS Creation of Primary Data centre : It houses the central server for online transaction. Central data base is used for all customer centric delivery channel services integrated with CBS. It is mavned round the elock to offer 24°7 service to the customer. Disaster recovery site (DRS): It is done to avoid disruption in the business activities of CBS branches due to central system or network failure, to ensure non-stop functioning of branches and on line delivery channels integrated with CBS, to act asa back up for providing a reliable and continnous processing environment. Business process re-engineering: It done with a view to help the bank in reeligning existing business processes in tune with the benefits provided by the new technology platform, to help the bank in taking advantage of the best business practices available in the technology platform to provide more efficient services Software : It is to comprise the branch functional modules, delivery channel needs like ATMs, tele-banking, internet banking, interface to integrate with NDS, RTGS ete. Networking: leased lines of WAN to be used as primary communication channel and ISDN link as back up. Advantages ‘The CBS process is advantageous both to the customers and the banks in the following manner: Customer : (a) Transaction of business from any branch, ATM that offers him anytirse anywhere banking facility (b) Lower incidence of errors, Hence accuracy in transactions (c) Better finds management due to immediate availability of funds. 4 Banks: (a) Standardisation of process within the bank (b) Better customer service lending to retention of customer and increased customer traffic (c} Availability of accurate data (4) Better use of available infrastructure (e) Better MIS and reporting 10 external agencies such as Govt, RBI etc. (f) Increased business volume with better asset liability management and risk management. ELECTRONIC SIGNATURE ‘The digital signature has been accorded Jegal sanctity in Indie through Information Technology Act 2000. The name has been changed to Electronic Signatures as per amendment made in Oct 2009. What is a electronic signatures (BS) ?: ES is used by a person with intent to sign an electronic record I is « means for authentication of an electronic record, in electronie form, attached to the electronic record, by a person, in whose name the digital signature certificate is issued, It is a tool-for message origination, authentication and non- repuclation, that affixes @ coded message to the document, data or messages and guarantees the identity ofthe sender. "SCO 34, Secor 3, Chang Ph O17R 265603, 053178 12720, . 2[NS TOR compiflion én INFORMATION TECHNOLOGY DS & handwritten, signature : DS is the electronic equivalent of the handwritten signature. It is not the seanned version of a handwritten signature ‘Manner of digital signature : The common manner for digital signatures is public key cryptography. Cryptography is based on use of algorithmic fimetions to generate two different but methematially related keys, which is a large number produced by using a series of mathematical formulae applied to the prime numbers. ‘There are two parts of the key ie. publie key and private Key, which are called public-private key pair. Both the keys are issued to the user by the designated authority approved by the Govt. ‘The private Key is Kept confidential and used to sign to create digital signatures. The public key is used by a relying party to verify the digital signatures. Authorization : Through encryption (which is process of converting normal text to a coded message) and decryptton {the process of converting the coded text to its original plan text form) and signature certification, the authentication is ensured. DS certificates are essential for establishing whether the authorisation is from the purported owner, Digital certifieate : The certificate is issued by the Certifying authority, COMMITTEES ON COMPUTERIZATION Beginning with the year 1983, a no, of committees on computerization have been set up by RBI. The summary of recommendations of these committees are given as under Rangarajan Committee (1983-1" committee) + Introduction of mechanization and computerization at branch, regional, zonal and Head office level with a view to bring some level of postive change in finctioning of banks. * Model I of branch mechanization by use of microprocessor based stand along ALPMs. ‘+ Model iT'of branch mechanization by use of single microprocessor based system of large capacity + Installation of mainframe and mini computers at controlling offices. Rangarajan Committee (1988-2 com + Sete pace of competition amongst banks in use of computers + Full computerization of 2500 branches at 30 high activity centres with daily vouchers up to 750. + Branches to have mainframe computers with required no. of online terminals + RO/ZO/HO to be computerized. + Banks to get networked, + New.services should be designed for better customer service + Staff taining in computerization should be given priority “ ‘Saraf Committee (1994) + Remitarce facility for customers called electronic funds wansfer(EPT) and suitable legislation on the pattem of EFT Act 1978 of US. * Inuoduction of delivery vs payment (DVP) for reporting of Subsidiary General Ledger (SGL) transactions in govt securities. + Use of NICNET for reporting of currency chest operations to obviate delays in reporting. + lise of NICNBT for reporting govt. transnetions for settlement purpose, ‘+ Introduction of electron clearing service (ECS) for electronic payment of dividend, interest payménts in bulk. ‘+ Cheque irination system for cheques up to Rs.5000. Physical reach of BANKNET to be extended to all centres, to increase speed of transmission, extensive use of RBINET. “ horny isk s calculated 5 a product or no. of tracks (N), no. of sectors (r), no of sides (5) and dats eapacty (d) le ces oy ‘Magnetic tapa T's in the form of a ribbon/tape red on a reel, similar toa tape record cassete. The rbon ls made up of psie Fear ad aie coating of magnetic oxide is done nk. The data is recorded onthe tape a8 magnetic spots, The lenth of te ae ‘normally 2400 feet with standard wicth of 1/2. Itis alo a cheap medium for storage and easy tease, ard dik : THs is the mast popular storage deve as data stored can be searched out very quicy without pesshg Gough he Ga no. of surfaces, no. of track of each surface and no. of sectors in each tack, Optical disk or compact disk-{CD): Tha storage capacity ofan optical dk very lage. A larga amount of dala Gan be ded oy nese sks and these can be dstiouted to several users. These devices Cannot be simply written by the Users as opecel were ing instruments required for the purpose. Nanuals, books, dilonares et can he detibuted = WTS S035, Sadr 55, Ghandijrh Ph OWE RGBRSED, aire LID 719'NST00R compilation on INFORMATION TECHNOLOGY —— Random Access Memory (RAM) Itis a read and write memory and volatilé'in niture, If information is not saved, the information is lost when ‘computer is shut down. RAMs of two kinds: + Dynami¢ RAM (DRAM) + Static RAM (SRAM) Read Only Memory (ROM) It contains information that could be read only and nothing can be written, Hence itis permanent Iti of various types, such as: + Programmable read only memory (PROM) + Brasable programmable read only memory (EPROM) + Electrically Erasable programmable read only memory (EEPROM) ° + Non-volatile RAM + Cache memory SOFT WARE Software is the instructions, given to the computer, based on which the CPU performs various functions. These instructions are also called a program (i.e, sequenced instructions which direct a computer system to perform particular task). ‘There are various kinds of programs: + System software (required to use the computer and consist of progeams, languages and documentation supplied by the manufacturer. These include operating system say windows-ME, drivers say sound card Arivers, display drivers etc.) + Application software (programs developed by the user for performing specific functions or available off the shelf such as Microsoft Office) + Utility software (@ system software used! in development of a program such as Winzip, Front-page, notepad, web browsers) Language processor A computer understands only the machine codes and the characters fed into the computer are translated into machine codes by this programme. Programming language It is required to communicate with a computer and could be machine language and assembly language (also Jonown as low-level languages) and high level language. In machine codes 0 and x are used which are based on binary number system. The assembly language is based on use of characters, which are simple to use and understand, The programmes performed on a particular computer in low language cannot be used in other computer but the high level-language can be used on other computers as well. The high level language is further divided into commercial language, scientific language, general purpose language and system programming Tanguagé. The examples of these are Beginners. All Purpose Symbolic Instruction Code (BASIC), FORTRAN, Pascal, Common Business Oriented Language (COBOL), Oracle, Java. ‘OPERATING SYSTEMS (05) It is collection of a.number of programs that are used'to control @ computer system. An operating system ‘manages every aspect of the computer system from running an application software, entering data, displaying, information on monitor, printing reports ete. Vet common operating systems include MS-DOS, Unix Operating ‘System, Novell Netware, Windows. » Basic function of OS + Monitoring functions (concerned with collection of resources utilization and system performance information) + Service functions (concerned with enhancing the utility to the user such as file editing, file organization). + Other functions (processor management, memory management, file management, interpretation of commands and instructions). ‘Types of Operating Systems Batch processing systems Multiprogramming operating systems Time sharing systems Real time systems FILES ‘800 34, Sater 39-0, Chanigah Ph 01722665629, 09017012720 20NS 1008 compation on INFORMATION TECHNOLOGY A file is collection of organised records related to each other. The file can be given any suitable name and depending upon their purpose and nature of work, files could be: Master files Such files contain records of } permanent nature such as complete bio-data of employees, records of customers ete. ‘Transaction files This is input file where records of say, sale and purchase can be kept. These files are also made use of for updation of master file records. Back-up files Itis duplicate copy of the master or transaction file and is created for security reasons, These are also called dump fies. Report files This is output file which is created by extracting data out of master or transaction file, DATA BASE MANAGEMENT DBM is maintenance of records and information so that these can be ‘effectively used with the help of a computer. Data is essential raw material for computer which is made use of with the help of software and hardware. DBM helps in reading the data, removing the errors, updation of records, sorting and extraction of data from different files, sharing and storage etc. DATA WAREHOUSING AND DATA MINING Databases are knows as Data Warehouses and the major features of the data stored in a data warehouse are that the data is subject oriented (transactions relating to customers), integrated without inconsistencies, in non= volatile form and is time variant. Data mining is a technique to reveal the strategic information hidden in data warehouse. It is the process of automatically finding patterns and relations in large database. Data warehouse and data mining can be used by banks for various purpose such as loan risk analysis, portfolio risk analysis, demographic information about customer to focus on different segments, overall risk analysis ete. MISC. COMPUTER TERMS ELECTRONIC DATA INTERCHANGE (EDI) In EDI, the data js transmitted between various compater terminals for the purpose of processing which eliminates paper Lransactions. It is more oF less like eMail with the difference being inthe internal structure and structure of messages in EDI and ela. While in eMail data isnot processes in the reeiving system, in EDI the messages are sent only forthe purpose of ‘processing, EDI reduces chances of errors in transmission and improves the quality of data inflow. It avoigs lot of aupication ‘work thug reducing time and financial cots, In order to make use of EDI the data is obtained from a computer sytem and translated in transferable form, Thereafter itis transferred to another computer. The receiving system Uanslates message and retrieves it Banks have been-using EDI in the form of SWIFT messages, EFT, credit clearing and debit clearing, Electronic Data interchange for Administration of Commerce and Transport (EDIFACT) fs the universal set of ctandards ond guidelines for ‘communication by EDI. EDI guidelines are known as communication standards. VERY SMALL APERTURE TERMINALs (VSATS) SATs works with the help of satellite and uses small antennas with variable sizes working like earth stations, This has helped the banking services by providing speed. VSA terminals can exchange and transmit information ‘through a larger earth station which is called Fiub Station having larger size antenna, VSATs are being made use * of in banking, stock exchatige, corporate networking, weather forecasting, international service, reservation ete, eMAIL In eMail, the messages are transmitted through tele-communication by using computers which saves paper work as well as time to a larger extent. The sender of the information keeps the message in the form of a file in computer. eMail is very fast mail service compared to other modes like letters or telegram, the messages received can be stored in the form of files and retrieved in ease of need and message gets stored in the event of the receivers not being available. In banks Email is used for comespondence between departments and offices and has dramatically reduce the ‘time taken in physical movement of messages. ENCRYPTION AND DECRYPTION ‘The process of data encryption involves change of data into coed form, which isan important safety measure to avoid any damage or misuse of data. Only the user of he data can convert this encoded message into a normal message by decoding it ‘The process of decoding is called decryption. = ‘500 3, Sector 3-0, Chanda Ph, C572 2665623, O78 TRO aNSTOOR compilation on INFORMATION TECHNOLOGY en ree eset INTERNET TELEPHONY ‘The Govt of Indie recently ited ban on the voiae ever internet or Inter 01.04.2002. Internet Telephony makes use of Internet Protocol (IP) that computers all over the world use to communicate with each other. The parties involved include the user; the voice over internet protocol (VOIP) service provider and user’s Internet Service Provider (ISP). ‘The system is likely to highly cost effective since 2 on: Rs.2.80 only on internet telephony. Telephony and allowed internet telephony wef inute call to USA which costs R&.60 aver telephone, shall cost PORTALS Web portal (sey Yahoo), is a starting site for web-users when they get connected to the Web. The portals could be ‘general portals or specialised portals. The services offered by a portal include the facility to search for other sites, news, ‘eather information, eMail, stock quotes, plone, map information ete, A povial helps the strfer to go all over the Internet and find the vatious kinds of information, faster and easier. Portals norinaly offer valuable time saving serviee The effective portals provide single point, customised access to structured and unstructured data, stich as manuals, documents, web-sites, eMail ete, The portals have the ability to create 2 cammunity of users with common interests, destroying geographical boundaties and providing extended information reaehnThe portals secure wide user base which froma business view point is their main attraction ait provides extensive reac COMPUTER VIRUS ‘The virus is basicaly a programme written with malicious intent and it has different effects, with venying degree of damage. ‘Some are merely irtitating and can drive one to the brink of sanity while the other could be deadly enough to damage and destroy data, Virus enters the computer when new files, document, programme files eto are added either by Internet or by using floppy disc or CD. They are triggered off by different events such as by opening an eMail file attachment or running a particular programme, opening a dacument file ar opening on a particular date Precautions include having a good anti-virus software, not exchanging data with other computers to the extent possible, not to open eMail attachment unless sure, have a back-up of your dala. COMPUTER GLOSSARY Abacus - An od ype of computer “Abort Hating of a jot din to some error the operetions| ‘Access To search dat ‘ActiveX A mocel for writing a program. Used to maka interactive web pages foakng lke computer program. Algorithm A seris of roles to eave probisms Analog - Atype of computer in which dota is represented in physical Quantity Animation - A simulation or movement created by csplaying Seles of picture or ares, ‘Array ~A ssng of sniar type of data ASCII file ~A ype of fle whic centaing ASCH characters, ‘Assembler A type of software programme that converts assembly language to machine language Back-up ~ Storage of cate Beep A sound when computer shows some error Binary ~ _ Number stem using base 2 Bit - Binary Gigi (0 or 1) BIOS - Basic input output system is a fow evel interface between perioheral (input and output) devices. It is stored in ROM in every ‘computer, helps toad and execute the operating system from the hard disk, CO-ROM or feooy disk Boot - To start the computer Buffer~ It's an area of memory used for sloring messayes. Buller contains input and output entiation which klenties from where i reads and wit, It oso keeps track of count of used.area ari the fee space area in.ths bur. The buffer helps to store 9 part of te Gta to speed up the process. Daa in the butfer is temporary, Byte Aset of Bits whic together represent one character Browser A link betwean computer and internet Cartridge drive type of eck drive Call Storage space in @ computer memory PU Unit ofthe computer in which datas processed : Chip _Asofd state electronic crue which Is exuivalent tone, of transistors and other components such as dade ete Character / letter, number or symbol ‘Checksum Itis security conta in SWIFT thot prevents autematic changes during tresmision ‘Clock n electronic component which contels the tme of transactions In CPU Compiler A software programme which converts high level language into machine language Compression Process of reducing the fle ste. ‘Computer & machine which automatically processes data and performs cekculation ata very fast rate and stores datainformation. ‘$0034, Sector 33-0, Chang Ph O17 ZOGB6Z3, 098378 12720 22[NS TOOR compilation on INFORMATION TECHNOLOGY Computer crime Aci of sealing, cating, defrauding an erganzatlon wth use of @ computer. Control unit part of CPU which controls the functons ofa computer Cursor & Small fine which ashes on tbe computer seresn Cylinder Tracks on magnetic disk Data _—_Neaningful information which can be stored and processed by a computer Database Package for storing data in a computer Data warehouse A place in which business knowledge and information i stored. Data mining Process ofciscovering previcusly unknown information fm the data in data warehouse, Data processing It's one of the most important functlons whch the computers perform. It involves fot of computations which are iflcut to be handled manually. ville undertaking any data processing function, tis necessary to ascertain the cata fjom which the Information isto be obtained, to feed data into computer, to store k for future requirement and process it.The data ie also updated from ‘ine to time, Deck A setof punched cards Digital computer A type 8f computer which stores & processes data inthe form of cigits Digital signature Cacnypted signature fr provcing secunty Dot matrix printer A typ of printer which prints output te form of dots Drum plotter & type of ousputdeviee which — performs orinting by rotating Download Process of transfer of files fara one system to encther, EDP. Data processing which inselves computer Encryptiona security control to ensure data conficentiaity. E-commerce Business irasactions through internet or etre Erasable CD _Atype of compact disk on which the stored information can be erased and changed. Erasable PROM Atype of memory programmable read any memory) which con be erased.” Ergonomics _Scleace concerned with designing safe and cornfrtable machines for humans. Extranet An extended intranet, which is based on intemet standard protocss, that allow access via the Internet, by people outside the enterprise Extended memory Memory capacity more than 1024 KB Ethernet It is 9 set of LAN cabling speciation and protocols Its the standard for LAN, Fescimile Electronic scenning and transmission of @decument age to 2 remote location where tis reproduce. Field An area an adata storage medium vehich contains one item of dats Filed structures cokecion of data Firewall A system that restricts access to and form a net work, It protects the intranet from outside intrusion Floppy dise A magnetic storage medium FORTRAN A high evel computer language formula translation Gateway Interface device between (0 different networks Giga Byte A unit of storage capacity (G8=1024 MB) Giga flops One milionth Noating point arithmetic operations per second, Graphies Display of graphs and pctures on screen Graph plotter An outout device which can print graphs Graphic userinterface A visual repcesentation that permits runing of programe, execution of commands and interaction with the ‘cornputer by sing a point davies tke a mous Hardware Physical parts ofthe computer Hexadecimal Number system having base as 16 i Heap It is an area of memory used for the purpose of dynamic memory alocstion, where memory Ie allocated and freed atthe time of runing a programme. Its always dynamic in nature and generaly used by languages such as C. It folows,the pattern of frsifrst-out inallocation and fceing memory Hacker A computer éxper vith crinal intentions. Hypertext Contains connections within the text to other web documents, High level language- Programming language. Hybrid compiiter A type of computer which contains digital and anaiog units Impact printer An ovtput device which prints withthe halpof bon and_leaves impression an the paper Input. Data which isto be fed into computer Input device 4 device which helps to feed data in @ computer Interface Point of contact between ane device and another Integrated circuit- _ An electronic drcut which contains trarsstrs and other components Interpreter A translator which converts high level language into machine language Joystick An input devies used to play games, KB Kio Byte (1024 bytes) Light pen An output device li 3 pen Line Printer An output device which prints one tine ina given time Login When computers ara linked through a netwerk, login hep in entering into the computer LogoutReverse of login. It breaks the connection between computer and the user Loop Apart of computer programme which is repeated 2 numberof times ~ ‘960 3, Sector 33°, Chachi 072 2EBSEIS, 3178 12720 2[NS TOOR compittion on INFORMATION TECHNOLOGY Location A field or place ina computer — storage where unit of information fs kept ‘Low level language- A computer related language Machine fanguage- A programming language which converts Infrmation into Binary Magnetic tapes Reel made up a plastic material which is coated with magnetic material to store cata ont it Main Memory Internal memory of the computer wiich can be accessed by CPU immediately Mainframe CPU ofa large computer usualy reclving input From 2 no. of terminals Mapping A process of converting data that is ansmited in one format by the sender into the dota format that cen be accepted by the ‘Master filetain source of information for particule ob Mega, Byte 1024 Kilo bytes(L024 x 1024 bytes) Memory Part of CPU where data is Stored Memory unit It stores deta, caleiations and results thereof, The capacity of meanoiy fr messuted in tems of bytes, tlbbyles (1028 bytes), megabytes (1028x1024 byies) or gigabytes (1026¥1024x1024 bytes) and Tera byte (2024 Giga byes). Menu Aistof altemative actons/ commands displayed on the screen fr selection by the wser Morphing An animation technique in which one image is gradually turned into anothes Mouse A palmsize pointing device witha ball bulk into the datom, connected tothe computer, Nano second One thousand lac part of ane second (one biliontn of 3 second) Non-volatile memory A type of memory in which conten remain safe even when the electricity is stopped (Octal Number system whese bare Is 8 Offline Adevice whichis not connected wth CPUYnet work On-line Aevice which s connected with CPU J net wore Operation code Code of work to be performed on the computer Optical mark reading Reading of printed characters written in a special way by optical means, ona specially designed device ‘Output?rnting of data after processing by computer Overflow An error when computer produces a number which s too large for itto store Packing density No. ofcharecters per inch on storing device Package The programme writen for nornal use Pascal A Nigh level computer language Peripheral davices~ Input, ouiput ad storage devices which are connected to CPU of computer and are controled by cemputer Primary storage Wain memory of CPU Processing The functions performed by computer Programme Asetofinsttucons to be given 0 computa for performing some function Programmer A person win writes computer programme Programming language A-set of symbols and rules that can be used to specfy an algrithm Programmable ROM. An internal memory that can be progrerimed aniy once Random Access Memory Hemory avazable on chip which can be writen and read by the programmer Read only memory This memory can be read eny and cannat be changed, Records collection of data which s stored on storage medium such ae Boppy disks Romote accass Accats to computer av Secondary storage- Storage other than main storage ie. on floppy isk ‘Sector & portion ofa track on a magnetic disk ‘Search engine Programs that help In locating 2 website, Server A computer that coorinates all computer actives into 2 newtwork, ‘Soquentia ile & type of fle in whieh recocd are in alphabetical order Serial printer A typeof printer which prints only one tne ina given time such 35 sy whee! printer Software A term for computer programmes invaled inthe operation ofa computer Source program A program written in high level enguage or acsambly language ‘Syntax vie of grammar in 2 programming language. Syntax error An error in composition ofa language Touch pad —_Astationerypelnting device ‘Transaction file A typeof fle which is vse in updation of a master fle ‘Track Circular path on magnetic dsk Unix Acomputer operating system Vista! display unit~ Terminal whore input is visualised on screen Virtual organization An elusive combination of technology, expertise and networks with ite physical infrastructure Virtual reality An interactive, computer generated simulated ersronment with whieh users can Interact using spedaled perpheras such 2s dota doves and graphics displays, ‘500 34, Secor 33.0, Chandigarh Ph. OI7E 26555RS, OB3I7 LATO 24