CBS Full Form

CBS Full Form is CORE Banking Solutions, and Core means Centralised Online Real-time Exchange. All the branches of the respective banks are networked through a sophisticated IT infrastructure. It is no longer branch-banking. It is bank-banking. The customer need not limit his transactions to his branch. The account of the customer can be accessed from any branch and need not be the branch where they are maintaining the bank account, i.e., the accessibility is not limited to a single branch but to the bank as a whole.

With a Centralised Server, the turnaround time for transactions between the branches has become faster. Complicated calculations of deposit/loan interests have been made simple with the introduction of CBS. The sophisticated software is programmed to do it all.

The introduction of telecommunication technology that enabled sharing of information among bank branches efficiently made CBS Full Form or Core Banking Solutions possible. Until 1970 it would almost take a day for any transaction to reflect in the accounts as the branches consolidated all the transactions and sent them in batches to the data centre at the End of the Day (EOD).

The First Rangarajan Committee Report elucidated the importance of computerisation for banking operations. The initiative for CBS was taken up with the Committee in the year 1984. Initially, some banks were reluctant to migrate to CBS, but on witnessing the advantage the CBS banks had over the non-CBS banks, most of the banks migrated to CBS.

For over a period of 30 years, most banks have migrated to CBS, which allows Centralised Online Real-time Exchange of information. The transactions are immediately reflected in the customer’s account on completion. For instance, deposits made into the account will reflect immediately in the beneficiary’s account, enabling the beneficiary to withdraw the amount instantly. The deposits need not be made at the branch where the account is maintained; they can be made from any branch of the bank. Post the implementation of CBS, the customer is a bank customer and not a branch customer.

The following are the standard CBS software used in Banking Sector.

• Finnacle
• BaNCS
• Flexcube

The following are the advantages of CBS in the banking sector.

• The transactions have become faster as Real-time Exchange of information among the bank branches is made possible.
• The customer can transact from a bank branch that is nearest to them. Earlier, if the customer relocated to a different address, they had to get the account transferred to a branch that was close to the relocated address. But now, they can access the account from any branch.
• It is easier for the customer to manage the account as they are no longer a branch customer but a bank customer.

The following make CBS Full Form, i.e., Core Banking Solutions, important for Banks.

• Manual work is reduced, and the efficiency has increased. Banks are able to provide better customer service. 
  With reduced manual work, more focus can be given to marketing the different products of the bank.
• Since the Real-time Exchange of Information among bank branches is made possible, the transactions have become faster.
• Laborious calculations like deposit/loan interest calculations have become more manageable.  
  Investment calculations like the maturity value of deposits for a certain period and interest have become easy with the introduction of CBS.
• Calculation of EMI for loans have become simpler, and it can be done in a jiffy.

CBS has by far been a blessing in disguise for the banking sector. The transactions have become faster, and the internal work of the bank like interest calculations, maturity value calculations have also become simpler with no manual calculations involved.

The customer can now access the account from any branch and so can conduct transactions from anywhere and need not visit the branch where the account is maintained. Knowing the CBS Full Form is not adequate. You should also know the advantages of CBS, have knowledge of the service providers and also about how CBS works. This article contains all the required information about CBS, and you can benefit significantly by browsing through the article.