Types Of Banking

By: Siva Prasanna_D, Bharath_Kumar04 Date: 17-Dec-09

Confidential

Declaration

I hereby declare that this document is based on my personal project experiences and / or experiences of our project members. To the best of my knowledge, this document does not contain any material that infringes the copyrights of any other individual or organization including the customers of Infosys. Siva Prasanna, Bharath Kumar

key words: Banking, Types of Banking.

Table of Contents
What is Banking? Why Banking? Types of Banks Types Of Banking Various Testing handled in Banking Domain.

What is Banking?

In simple word Banking is none other than a Business. In all other businesses only Owners earn profits but in Banking owners as well as public cherish profits.

This is simply understandable by Depositing/Withdrawing our money from a safest place.

Another main benefits of Banking includes lending money at some specific interests when the customers are in need. This can be done either by Public Sector or Private Sector Banks. Now-a-days Banking widen their services into loans, Plastic Money, Money transfer across the Globe. FYI: Banking in India originated in the last decades of the 18th century.

Why Banking?
As we already said that Banking is simply a Business. In all Business, profit is the key motive. The very first objective of Banking is LOANs. Customers can easily reach Banks for Loans by keeping some valid documents as corroboration. The second main profit are earned initially through INTEREST for our money. Money in the pocket confer no use. Instead if we deposit in banks, that will earn us Interest for our money which was deposited. Third objective for Banking is SAFETY. The money which we deposited are in safer side. We can get rid of the fear of protecting our money. Last but not the Least is your CREDIT CARD. You can fetch Credit card from desired banks from which you can purchase things without money in your account and you will be billed periodically. It will help you in emergency period. They are cheaper for short term borrowing.

Types of Banks:

You may hear different kinds of banks specialize in different ranks of business. But for the basic understanding for novice users of banking. We just classify Banks in to two categories. They are

Public Sector Banks Private Sector Banks

Public Sector Banks

By the name its implies Public Sector Banks are fully supported and maintained by government. Among the public sector banks, UNION Bank of India is one of the 14 major banks which are nationalized on July 19,1969. Sometimes public sector is also called as State sector where banks are ruled over by their own states. This types of banks provide wide range of activities for the state like delivering social security, administration of Urban banking, commercial success meet and production decisions. The role of public sector banks are also extended to large according to the conflict of different economic positions of societys political philosophy. Some of the banks which come under public sectors are State Bank of India Canara Bank Central Bank of India, Etc

Private Sector Banks

As like the Public Sector banks, Private Sector is also an financial institution in which money and services are produced and distributed by an single individuals or an Organization which are not a part of Government. It has all the functionalities and services as same as the public sectors but their may be some limitations to these Private Sector Banks. Even though Private sector banks are controlled and driven by single owners or an private organization, it should follow the norms and standards of RESERVE BANK OF INDIA. FYI: The first Private Bank in India was INDUSLAND Bank.

Private Sector Banks are even providing all sort of services, there may be some risks in investing money in those Private Bank Institutions.

Types Of Banking

Banks act as an agent between the financial institutions which are ready to lend money to the customers. It is a business which meant for receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers. This system of financial bodies engages different secured modes of Banking for the customers. Here we are going to discuss about different types of safer banking which enables the banking process easier and secure for the customers.

Core Banking

Core banking is nothing but banking business enabler using its small retail and business components. This type of core banking is to promote business in wide range to serve all corner of the world from the dawn to dusk. This mode of banking is very efficient type in which customers can reach the nearby branches directly and do their banking. This basically covers depositing and lending money to the people.

Now-a-days all the banks trying to make their banks international wide to serve the public better. This is the great achievement on their perspective. Also known as Real Time Banking.

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Mobile Banking

Now a days Mobiles becomes an ubiquitous gadget all over the world. So most of the banks provide this mobile banking facility which is a method to use ones mobile phones to do simple banking process like Funds Transfer, Mobile Recharge, Balance Checking, etc by connecting remotely to the bank network. This invention had revolutionized the technique of financial institutions to conduct business, empowering the organizations, implementing new features, and the new business models to offer 24 X 7 accessibility to their customers.

This functionality would be possible only to the multimedia mobiles.

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Corporate Banking

This is also a kind of banking which includes all the banking and financial services but this type of banking mainly pay attention to small and large local corporate. Most of the banks follow this type of banking mainly in the intention to enhance the own trade and transactional services along with the world-wide corporate companies. Their services includes access to commercial banking products, including working capital facilities such as domestic and international trade operations and funding, channel financing, overdrafts, etc. Even though this corporate services involves higher risks to the banks, they implemented various risk management process to manage those risks.

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Investment Banking

This type of banking mainly come across Sales and Trading. The primary function of these investment banking is buying and selling financial products with the objective of increasing money on each trade. This banking provide IPOs, mutual funds, bond offerings, purchasing securities and also acts as a Broker and carriers through mergers and acquisitions. This kind of banking not only involves in trading and sales services but also provide advice to the customers in trading and on financial services to clients and customers. Its also facing lots of challenges in Investment banking such as falling in margins, compliance issues, budget allocation, corporate restructuring, etc.

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Retail Banking

Retail Banking mostly preferred by bank to transact with customers directly rather than through institutions or corporations. This meant for One-Stop shops for various banking services like checking funds, transferring funds, debit amount, applying for loans, etc. This kind of banking is very helpful for the Customers in such a way that many people can use the small branches of large commercial banks which is located near to them instead of visiting the main branches of those commercial banks. Those small retail branches provide intertwine with their respective main commercial banks and able to do all kinds of transactions and banking from these small retail banks.

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Types of Testing Handled in Banking Domain

Like the other kind of Domain Testing services, Testing in banking domain is not a simple effort. Its very challenging to test every software deployed in every kind of Banking. Nonetheless every application should be deployed to the customers as very right defect free application at the first time itself. Banking involves lots and lots of transactions, millions of Dollars / Euros / Rupees at fraction of seconds. So it should be accurate with no exceptions. To provide that perfect defect less application they are using various efficient kind of testing like User Acceptance Testing Performance Testing Integrated System Testing Automation Regression Testing Web Testing Usability Testing
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Types of Testing Handled in Banking Domain- Contd

BAU Testing Support Operations Acceptance Testing They are following even more types of testing which help to provide the customers with ever ready application which will enhance the banking to great extent.

The topics which we have covered here is only a small extent. Banking is wide range of business which exists everywhere in the world. All these banking methodologies are to envelop every nook and corner of the world.

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Thank You

In case of any queries or further clarification required, Drop a mail to Bharath_Kumar04 or SivaPrasanna_D

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