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What is CBS? Why do the Banks Need it?

March 12, 2024

What is CBS? Why do the Banks Need it?

CBS stands for Core Banking Solution, which is the networking of various bank branches through a robust IT infrastructure.

It allows the customers to operate their bank accounts and avail themselves of banking services with a centralized network.

In other words, with CBS, their accessibility is not limited to just their bank branch, but the bank as a whole.

CBS has been greatly used by banks across India because of its numerous advantages. For starters, it helps to speed up the majority of transactions that are carried across the bank branches on the network with the help of a centralized server.

CBS also offers powerful software programs that help banks with their basic operations, like calculations of deposits and loans, interest, etc.

A Brief History of CBS

Until the 1970s, it would take at least a day for a transaction to reflect in the bank accounts.

This is because each bank had its own local server, and the transactional data was collected for each day and sent at the same time in batches.

In 1984, an initiative regarding CBS was taken with the ‘First Rangarajan Committee Report’ that shed light on the importance of banking computerization.

Although many banks were initially reluctant to adopt the software solutions, by 1994–1996, the majority of them had moved to CBS services.

What is CBS important for the banks?

Banks need CBS to:

  • Meet the growing demands of their customers
  • Simplify and speed up the basic banking processes so that the banking staff can focus on other areas like upselling and cross-selling, marketing, etc.
  • Minimize the time taken for the banking transactions
  • Making banking services more accessible and convenient for customers

What are the top CBS software providers?

The major CBS software providers are also the top IT companies in the world. Some of these are:

  • EdgeVerveFinnacle by Infosys Technologies Ltd.
  • Oracle Flexcube Core Banking
  • TCS FNS (Financial Network Services Limited) by TCS.
  • Wipro Core-Banking
  • SAP Banking and Financial Service
  • Canopus EpaySuite by Canopus Innovative Technologies

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