The term 'Core Banking Solutions' is sometimes seen in the news. Which of the following statements best describes/describe this term? 1. It is a networking of a bank's branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts. 2. It is an effort to increase RBI's control over commercial banks through computerization. 3. It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank. Select the correct answer using the code given below.
- (a) 1 only ✓ UPSC's answer
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Why the answer is (a)
• Core Banking Solutions (CBS) is the centralised software and networking that links all branches of a bank so customers can transact from any branch ('anywhere banking'), and enables ATMs, internet and mobile banking (statement 1).
• It is a bank's own technology platform, not an RBI control device (2), nor a takeover procedure for NPA-laden banks (3).
• All public sector banks completed CBS migration around 2012–13.
• Hence 1 only, option (a).
Why the other options are wrong
- (b) 2 and 3 only
- Statements 2 and 3 misdescribe CBS.
- (c) 1 and 3 only
- Statement 3 is wrong: CBS is not a takeover procedure.
- (d) 1, 2 and 3
- Statements 2 and 3 are wrong.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2016, held on 7 August 2016. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.