“A STUDY ON CORE BANKING SOLUTION

(CBS) AND ITS IMPACT ON THE OVERALL

WORKING OF ANANTNAG CENTRAL
COOPERATIVE BANK LIMITED OF UT
J&K”

POST GRADUATE DIPLOMA IN COOPERATIVE

BUSINESS MANAGEMENT (PGDCBM)
17TH August, 2022 TO 17TH February, 2023

Submitted By: Under the Supervision of:

MUZAFAR SULTAN Dr. Y.S. PATIL

Roll No. 5612 (Head)

Centre of Information &

Technology, VAMNICOM

VAIKUNTH MEHTA NATIONAL INSTITUTE OF

COOPERATIVE MANAGEMENT, PUNE- 411007

Page 1 of 49
 DECLARATION
I do hereby declare that the project report entitled “A STUDY ON

CORE BANKING SOLUTION (CBS) AND ITS IMPACT ON THE

OVERALL WORKING OF ANANTNAG CENTRAL

COOPERATIVE BANK LIMITED OF UT J&K” submitted by me for

the partial fulfillment of the award of the of POST GRADUATE

DIPLOMA IN COOPERATIVE BUSINESS MANAGEMENT is my

original work and has not been submitted earlier to VAMNICOM or to any

other Institution for the fulfillment of the requirement for any course of

study. I also declare no chapter of this manuscript in whole or in part is

lifted and incorporated in this report from any earlier word done other or

me.

Place: - Signature

Date: - MUZAFAR SULTAN

Participant No. 5612

Page 2 of 49
 CERTIFICATE
This is to certify that MUZAFAR SULTAN student of POST

GRADUATE DIPLOMA IN COOPERATIVE BUSINESS

MANAGEMENT from VAMNICOM, PUNE was working under my

supervision and guidance for his dissertation for the course entitled “A

STUDY ON CORE BANKING SOLUTION (CBS) AND ITS IMPACT

ON THE OVERALL WORKING OF ANANTNAG CENTRAL

COOPERATIVE BANK LIMITED OF UT J&K” Which he is

submitting, is his genuine and original work.

Place: - Signature

Date: - Dr. Y.S. PATIL

Supervisor

Page 3 of 49
 ACKNOWLEDGEMENTS
“It is not possible to prepare a project report without the assistance &
encouragement of other people….”
On the very outset I would like to extend my sincere and heartfelt
obligation towards various persons who have helped me in this endeavor,
without their active guidance, help, cooperation & encouragement, I would
not have made headway in the project.
At first I am extremely thankful to my noble guide Dr. Y.S. Patil his
precious suggestions, profound knowledge and ingenuity have been a great
asset to me. His helping attitude, sympathy, guidance, and spirit of
cooperation will remain as permanent part of my memory and also thanks
to Chief Executive of the Bank for his support and assistance towards
completing the project. He has always actively supported me for rendering
proper support to collect information.

Secondly, I would like to express my deepest sense of gratitude and respect

all the dignitaries especially to Dr. Hema Yadav, Director VAMNICOM
Pune and Shri S.Y. Deshpande. Associate Professor, Head CCM-cum-
Course Coordinator of this 56th Batch of PGDCBM programme for their
encouragement and valuable advices and being the source of inspiration in
course of the training programme.

Last but not least I thank to my dear parents, who have been a source of
encouragement and inspiration to me. Due regards are also paid to my
friends and family members who extended their support in completing this
research work.

MUZAFAR SULTAN
Participant of 56th PGDCBM
Roll Number (5612)

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 Table of Content

S. No. Title Page No.

ABSTRACT 6-7

Chapter-1 Introduction 8-17

Chapter-2 Bank Profile 18-20

Chapter-3 Review of Literature 21-27

Chapter-4 Research Methodology 28-32

Chapter-5 Data Analysis and Interpretation 33-40

Chapter-6 Findings 41-42

Chapter-7 Conclusion, Suggestions and 43-45

Limitation

References 46-49

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 Abstract

This paper gives an overview of Implementation of Core

Banking Systems (CBS) in the Banks. This study is based on
Secondary data. A bank is an institution which deals with money and
credit. It accepts deposit from the public, makes the funds available to
those who need them, and helps in the remittance of money from one
place to another. It is a financial institution that creates demand
deposits, that is deposit account which are subject to withdrawal by the
owner on demand and subject to transfer to a third party by means of a
cheque, in fact a modern bank performs such a variety of functions that
is difficult to give a precise and general definition of it. CBS stand for
Core Banking System or Core Banking Solution. Core Banking System
is another way of saying the core functions of a bank. These functions
represent the essential (core) business of banking. Because of the
plethora of services banks now provide, it is easy to forget that the root
of banking is the accepting deposits and lending money the definition
of core banking may have been mudded by the emergence of package
computer solution which combine core banking functions, with other
elements of a bank’s operation but at the most basic level core banking
manages financial transactions and their impact on the accounts of each
customer. The core banking system will often offer a basic customer
database function; often refer to as a customer information file or CIF.
The customer of CBS is no more the customer of a branch he becomes
the bank customer thus CBS is a step towards enhancing customer
convenience through anywhere and anytime banking. Core banking
became possible with the advent of computer and telecommunication
technology that allowed information to be shared between bank
branches quickly and efficiently. A few decades ago, it used to take at
least a day for a transaction to reflect in the account because each
branch had their local servers, and the data from the server in each
branch was sent in a batch to the servers in the data center only at the
end of the day (EoD). Nowadays, most banks use core banking
applications to support their operations where CORE Banking may
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stand for "centralized online real-time exchange". This basically means
that the entire bank's branches access applications from centralized data
centers. This means that the deposits made are reflected immediately
on the bank's servers and the customer can withdraw the deposited
money from any of the bank's branches throughout the world. These
applications now also have the capability to address the needs of
corporate customers, providing a comprehensive banking solution.

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 CHAPTER 1
INTRODUCTION

Page 8 of 49
 CHAPTER 1

INTRODUCTION

We know that technological advancements paved the way for rapid

changes in the banking practices of both bank employees as well as bank
customers. Introduction of Core Banking Solutions tremendously reduced
the efforts of bank employees in meeting the diversified requirements of
modern customers. With the introduction of Core Banking Solutions by all
most all bankers today, it is expected that customers are treated uniformly
at all the branches of the Bank. But the experiences of customers and bank
employees tell us a different story. Both bankers and customers agree that
CBS has become not just an enabler, facilitating integration of a range of
services which can be provided anywhere and at any time through multiple
channels like, ATM, NEFT, RTGS, Telephone Banking, Mobile Banking,
Internet Banking, Unified Payments Interface (UPI) etc. but is also
indispensable for the survival and growth of Banking institutions in the
changing banking landscape. Besides helping the bankers to provide
ecstatic services to the customers, it helps them in generating MIS reports
to the top management and in submission of various reports to the
regulators and the Government. In today’s banking scenario, CBS is a
necessity as customers of today have no time and patience to wait in a long
queue in a bank counter for conducting their banking transactions. Since
CBS is the main driver of digital banking concept which is more relevant
and prominent in today’s banking field, an effort is made in this paper to
understand the impact of CBS on bank employees in a changing landscape
of banking by considering the opinions of 100 bank employees.

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1. INTRODUCTION

Technological advancements, particularly introduction of CORE Banking

Solutions by the bankers brought transition in the banking landscape by
shifting the bank employees from people-driven processes to machines-
controlled ones over the past many years. No doubt, Core Banking
Solutions have made banking very easier and convenient for the customers.
But by making manual data entry obsolete, it has also made banking a
challenging job for bank employees. Unless they transform their traditional
models and products and service delivery methods, they cannot meet the
diversified requirements of changing customers. Moreover, the process of
digital and technological transformation significantly affects the human
resource requirements of banks. Many economists and researchers have
already speculated negative impact on the workforce of bank employees
because of automation by 2021.

Economic Times already reported that, in the duration of one year between
September 2016 and September 2017, HDFC Bank’s workforce dipped
from 95,002 to 86,543. Yes, Bank reported that it has already reduced its
workforce by 10%. These Banks cited reasons such as redundancies, poor
performance, digitalization, and technological changes as the driver for
taking such a drastic step. SBI also claimed that there could be significant
job cuts this year. In a report SBI chairman Rajnish Kumar said that public
sector banks are likely to end the fiscal year with a smaller workforce than
what they began the year with. It is a clear sign that nature of skill sets
required for bank employees are changing with a more focus on front- end

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talent. Even among the people who are already employed in banks, many
are in need of retraining in order to remain at par with the changing nature
of work. This is also clear from the fact that many of the bank employees
are redeployed across positions and functions in recent years.

With the introduction of Core Banking Solutions by all most all bankers
today, it is expected that customers are treated uniformly at all the branches
of the Bank. But the experiences of customers and bank employees tell us a
different story. Both bankers and customers agree that CBS has become not
just an enabler, facilitating integration of a range of services which can be
provided anywhere and at any time through multiple channels like, ATM,
NEFT, RTGS, Telephone Banking, Mobile Banking, Internet Banking etc.,
but is also indispensable for the survival and growth of Banking institutions
in the changing banking landscape. Besides helping the bankers to provide
ecstatic services to the customers, it helps them in generating MIS reports
to the top management and in submission of various reports to the
regulators and the Government. In today’s banking scenario, CBS is a
necessity, as customers of today have no time and patience to wait in a long
queue in a bank counter for conducting their banking transactions. Besides
this, CBS is the main driver of digital banking concept which is more
relevant and prominent in today’s banking field.

Today Banking as a business has grown tremendously and transformed

itself from only a deposit taking and loan providing system to an institution
which provides an entire gamut of products and services under a wide
umbrella. Banks are not just a part of our lives, but have a significant role
in our daily lives. For many, day will not end without at least a single
financial transaction.

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Thus, banks always try to adopt latest technologies to enhance customer
experience. Digitization is not an option for banking industry, rather it is
inevitable because every industry is being digitized and banking sector is
no exception. Mobile banking is increasing at a fast pace more than online
banking. All such activities commenced by a bank is called Core Banking

Other than retail banking customers, core banking is now also being
extended to address the requirements of corporate clients and provide for a
comprehensive banking solution.

Core Banking is normally defined as the business conducted by a banking

institution with its retail and small business customers. Many banks treat
the retail customers as their core banking customers, and have a separate
line of business to manage small businesses. Larger businesses are
managed via the Corporate Banking division of the institution. Core
banking basically is depositing and lending of money. Normal core
banking functions will include deposit accounts, loans, mortgages and
payments. Banks make these services available across multiple channels
like ATMs, Internet banking, and branches.

Digitalization means the adoption of technology. Core banking is a general

term used to describe the services provided by a group of networked bank
branches. Bank customers may access their funds and other simple
transactions from any of the member branch offices. In fact, CORE is an
acronym for "Centralized Online Real-time Exchange", thus the bank’s
branches can access applications from centralized data centres Core
Banking solutions are banking applications on a platform enabling a phased,
strategic approach that lets people improve operations, reduce costs, and

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prepare for growth. Implementing a modular, component-based enterprise
solution ensures strong integration with your existing technologies. An
overall service-oriented-architecture (SOA) helps banks reduce the risk that
can result from multiple data entries and out-of-date information, increase
management approval, and avoid the potential disruption to business
caused by replacing entire systems.

Core banking solutions are systems that provide financial institutions with
the ability to manage their customers' accounts, transactions, and other
banking services. These solutions are designed to automate and streamline
the process of banking, making it easier for banks and credit unions to
provide services to their customers.

One of the key features of core banking solutions is their ability to provide
real-time access to account information. This allows customers to check
their account balances, view transaction history, and perform other banking
tasks from anywhere, at any time. This is particularly useful for customers
who are constantly on the go, or for those who prefer to bank online or
through mobile devices.

Another important feature of core banking solutions is their ability to

handle a wide range of banking transactions. This includes everything from
deposits and withdrawals to loan applications, account transfers, and more.
This allows financial institutions to offer a wide range of services to their
customers, without having to invest in a separate system for each type of
transaction.

One of the most important aspects of core banking solutions is security.

With the increasing number of cyber threats and data breaches, it is crucial

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that core banking solutions are able to protect sensitive customer
information. This includes measures such as encryption, multi-factor
authentication, and intrusion detection systems.

One of the main advantages of core banking solutions is their scalability.

As financial institutions grow, so do their customer base and the number of
transactions they need to handle. Core banking solutions are designed to
handle this growth, with the ability to add new services and features as
needed. This allows banks and credit unions to keep pace with the
changing needs of their customers, without having to constantly replace
their systems.

Another advantage of core banking solutions is their cost-effectiveness.

These systems are designed to automate many of the tasks that were
previously done manually, which can help financial institutions save
money on labor costs. Additionally, core banking solutions can be
customized to meet the specific needs of each institution, which can help to
further reduce costs.

One of the most popular core banking solutions is the Core Banking
System (CBS). This is a type of system that is used by many financial
institutions worldwide to manage their customers' accounts and
transactions. CBS is a centralized system that provides real-time access to
account information and is able to handle a wide range of transactions,
making it a versatile and efficient solution.

In conclusion, core banking solutions are essential for financial institutions

looking to streamline their operations and provide a better customer
experience. These systems provide real-time access to account information,

Page 14 of 49
handle a wide range of transactions, and are designed to be secure and
scalable. With the right core banking solution in place, financial institutions
can offer a wide range of services to their customers, while also reducing
costs and increasing efficiency.

1.2 IMPORTANCE OF CORE BANKING SOLUTIONS

Core banking solutions are the backbone of modern banking operations,

providing financial institutions with the tools and infrastructure necessary
to manage their customers' accounts, transactions, and other banking
services. These systems are designed to automate and streamline the
process of banking, making it easier for banks and credit unions to provide
services to their customers, while also reducing costs and increasing
efficiency.

One of the most important benefits of core banking solutions is their ability
to provide real-time access to account information. This allows customers
to check their account balances, view transaction history, and perform other
banking tasks from anywhere, at any time. This is particularly useful for
customers who are constantly on the go, or for those who prefer to bank
online or through mobile devices. This real-time access to account
information also helps to reduce the risk of fraud and errors, since
customers can quickly identify and report any suspicious activity on their
accounts.

Another key feature of core banking solutions is their ability to handle a

wide range of banking transactions. This includes everything from deposits
and withdrawals to loan applications, account transfers, and more. This
allows financial institutions to offer a wide range of services to their

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customers, without having to invest in a separate system for each type of
transaction. This also means that customers can perform all their banking
needs at one place, rather than having to go through different systems for
different transactions.

Core banking solutions also play a crucial role in security, with the
increasing number of cyber threats and data breaches, it is crucial that core
banking solutions are able to protect sensitive customer information. This
includes measures such as encryption, multi-factor authentication, and
intrusion detection systems. These security measures help to ensure that
customer information remains safe and secure, even in the event of a data
breach or cyber-attack.

Another major advantage of core banking solutions is their scalability. As

financial institutions grow, so do their customer base and the number of
transactions they need to handle. Core banking solutions are designed to
handle this growth, with the ability to add new services and features as
needed. This allows banks and credit unions to keep pace with the
changing needs of their customers, without having to constantly replace
their systems. This scalability also allows financial institutions to expand
their services and product offerings to meet the ever-changing needs of
their customers.

Core banking solutions also provide cost-effectiveness. These systems are

designed to automate many of the tasks that were previously done
manually, which can help financial institutions save money on labor costs.
Additionally, core banking solutions can be customized to meet the specific
needs of each institution, which can help to further reduce costs. This cost-

Page 16 of 49
effectiveness is important for financial institutions, as it allows them to
offer more services to their customers without increasing their operating
costs.

One of the most popular core banking solutions is the Core Banking
System (CBS). This is a type of system that is used by many financial
institutions worldwide to manage their customers' accounts and
transactions. CBS is a centralized system that provides real-time access to
account information and is able to handle a wide range of transactions,
making it a versatile and efficient solution. CBS also allows financial
institutions to offer different channels of banking services such as internet
banking, mobile banking, and ATM banking.

Core banking solutions also help financial institutions to comply with

regulations. With increasing regulatory requirements, it's important for
financial institutions to have systems in place that help them to comply
with these requirements. Core banking solutions have built-in compliance
and reporting capabilities that help financial institutions to meet their
regulatory obligations, thereby reducing the risk of penalties and fines.

In conclusion, core banking solutions are essential for financial institutions

looking to streamline their operations and provide a better customer
experience. These systems provide real-time access to account information,
handle a wide range of transactions, and are

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 CHAPTER 2
BANK PROFILE

Page 18 of 49
 CHAPTER 2

BANK PROFILE

2.1 ANANTNAG CENTRAL CO-OP BANK LTD

The Anantnag Cooperative Bank Limited was registered in the year 1923
as a District Central Cooperative Bank with its area of operation confined
to Anantnag, Pulwama, Kulgam & Shopian of South Kashmir. At present
there are 34 Branches, with total strength of 143 employees are catering the
agricultural and non-agricultural credit needs of the farmers of north
Kashmir for sustainable development of rural economy and also rendering
Banking Services to Rural as well as Urban Community.

The ACC Bank has placed service to its clients as its primary objective. It
aims to help clients and resolve their problems. Still if there is any
compliant it is dealt with immediately to the satisfaction of clients.

The ACC Bank provide all types of accounts facility i.e., Current Deposit,
Savings Bank Deposit, Recurring Deposit and Fixed Deposits.

Deposits up to the value of Rs.5.00 lac per depositor have insurance cover
with Deposit Insurance & Credit Guarantee Corporation (DICGC).

The ACC Bank has migrated its operations to Computerization in 2015 and
onboard the operations on Core Banking (CBS) from 2017. The bank is
currently giving services of CBS, Cheque Truncation System (CTS),
NEFT/RTGS and SMS services to its customers. The bank is using Finacle
Software of C-Edge Technologies.

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 IMPACT OF CBS ON FINANCIALS OF THE BANK

Amt. in Crores
Sr. No Indices Pre-CBS Post- CBS Growth

1 Deposits 312.80 357.33 44.53

2 Advances 126.28 186.96 60.68

4 Total Business 439.08 544.29 105.21

4 CD Ratio 46% 59% 3%

5 No. of Deposit A/cs 110254 190302 80048

6 No. of Loan A/cs 7528 12247 4719

7 No. of Transactions /year through 0 2600 2600

NEFT/RTGS

9 KYC Compliant A/cs 75342 125649 50307

From the above table it appears that there is a significant growth in the financials of the
bank after onboarding the bank on Core Banking Solution.

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CHAPTER 3
REVIEW OF
LITERATURE

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 CHAPTER 3

REVIEW OF LITERATURE

This chapter presents a comprehensive review of relevant literature in an

attempt to position the study in an appropriate theoretical framework. Thus
it discusses findings of related researches to this study.

Core banking solutions have been the subject of numerous studies and
research in the literature. These studies have examined the various benefits
and challenges associated with implementing and using these systems, as
well as their overall impact on the banking industry.

Ahmed, M., & Qureshi, M. (2016) One of the main benefits of core
banking solutions that has been highlighted in the literature is their ability
to improve the efficiency and effectiveness of banking operations. A study
by them found that core banking solutions can help financial institutions to
streamline their processes, reduce costs, and improve customer service.
Additionally, the study found that core banking solutions can also improve
the accuracy and integrity of financial data, helping to reduce the risk of
errors and fraud.

Biswas, S., & Bose, I. (2015) Another benefit of core banking solutions
that has been identified in the literature is their ability to provide real-time
access to account information. A study found that core banking solutions
can help customers to access their account information and perform
transactions from anywhere, at any time. This is particularly useful for
customers who are constantly on the go, or for those who prefer to bank
online or through mobile devices.

Page 22 of 49
Chowdhury, M., & Hasan, M. (2018) However, the literature also
highlights some challenges associated with implementing core banking
solutions. A study found that one of the main challenges is the high cost of
implementation, which can be a significant barrier for smaller financial
institutions. Additionally, the study found that the complexity of core
banking solutions can also be a challenge, as it can take time for financial
institutions to fully understand and utilize all of the features and
functionality of the system.

Das, S., & Das, A. (2017) Another challenge that has been identified in the
literature is the need for financial institutions to have a high level of IT
expertise to implement and maintain core banking solutions. A study by
found that many financial institutions struggle to find the necessary IT
resources to implement and maintain core banking solutions, which can
delay the implementation process and increase costs.

In conclusion, the literature suggests that core banking solutions can bring
many benefits to financial institutions, including improved efficiency and
effectiveness, real-time access to account information, and improved data
integrity. However, it also highlights some challenges such as the high cost
of implementation, the complexity of the system, and the need for IT
expertise. Financial institutions are encouraged to carefully consider these
factors before implementing a core banking solution and ensure they have
the necessary resources and support to ensure a successful implementation.

Odiagbe (1998) looks at discipline as “a normal behavior or codes of

conduct based on principles of natural justice which modifies or controls
behavior to reduce misbehavior and makes organizational goals

Page 23 of 49
accomplishment possible. This point shared by Harris (1976) who believes
that discipline is “the process of training workers so that they can develop
self-control and become more effective in achieving organizational goals”.
He goes further to say that “the purpose of the supervisory imposed
disciplinary process in the development and furtherance of the type of
performance from the individual employee that will be conducive for the
achievement of organization goals.

Knight (2014) therefore defines discipline as a pattern of behavior which

can be traced back from a particular training. This behavior is portrayed by
a person in order to demonstrate his personal traits. An employee, for
example reflects a particular behavior in a workplace situation and his
behavior contributes towards attaining his or her goal at the organization.
Dumisan, (2002) define discipline as a system of rules and mechanism for
ensuring that disciplinary codes are followed. This implies that every
organization has its rules and regulation “dos and don’ts.” Observance of
these sets of rules in itself is discipline.

Odiom (2001) observed that that ‘a fair degree of predictable behavior is

needed from individual(s) for the achievement of organizational goals and
objectives. One of the means in ensuring decorum, progress and
effectiveness in organization is discipline. Where there are no proper
disciplinary procedures for erring officers there will be a dislocation of
effective organizational functionality.

Bacal (2012) Lateness, tardiness and indiscipline of employees have

always been a problem for employers from time immemorial. Against this
backdrop, no companies can succeed in achieving its set aims and

Page 24 of 49
objectives without using disciplinary actions to curb such an unwanted
behavior. In its most general sense, discipline refers to systematic
instructions given to a person or an employee either to do or not to do
something. Usually, the phrase 'to discipline' carries a negative connotation.
This is because it is an enforcement of an order by ensuring that
instructions are carried out. It is the instant willingness and obedience to all
orders, respect for authority, self-reliance and teamwork.

Cooke (2012) said that employee discipline the regulations or conditions

that are imposed on employees by management in order to either correct or
prevent behaviors that are detrimental to an organization. To discipline
means to instruct a person to follow a particular code of conduct or order.
For instance, in the field of child development, discipline refers to methods
of modelling characters and of teaching self-control and acceptable
behavior e.g. teaching a child to wash her/his hands before meals). Here,
'washing hands before meals' is a particular pattern of behavior, and the
child is being disciplined to adopt that pattern. However, usually the phrase
'to discipline' carries a negative connotation. This is because of the need to
maintain order by ensuring that instructions are carried out. Order is often
regulated through punishment, sometimes refers to as disciplinary action.
To be disciplined is then, subject to context, either a virtue (the ability to
follow instructions well) or a euphemism for punishment (which may also
be referred to as disciplinary procedure).

Bacal (2012) Progressive discipline is a process for dealing with job-

related behavior that does not meet expected and communicated
performance standards. The primary purpose for progressive discipline is to
assist the employee to understand that a performance problem or

Page 25 of 49
opportunity for improvement exists. Such a process provide feedback to the
employee so he or she can correct the problem and if he or she fails to
correct the problem, progressive discipline enables the organization to
fairly, and with substantial documentation, terminate the employment of
employees who are ineffective and unwilling to improve upon.

Saundry and Antcliff (2011), employees’ anywhere in the world are relied
upon for effective implementation of organizational policies. The
employees are expected to render effective and efficient service delivery to
their clients and members of the public as well as help government in
carrying out developmental programmes that will improve the quality of
life of the people. Unfortunately, this has not been so as a result of many
factors which canters on poor employee performance management, lack of
employees’ discipline etc. Employees’ have complained of poor conditions
of service, lack of transparent performance appraisal process, selective
administration of disciplinary measures and lack of training opportunities
all of which have resulted in undesirable labor management relations,
hence negative work attitudes such as absenteeism, lateness to work, and
general lack of commitment to duty have ensued. This motivated the
researcher to embark on this study.

Odiom (2001) observed that that ‘a fair degree of predictable behavior is

needed from individual(s) for the achievement of organizational goals and
objectives. One of the means in ensuring decorum, progress and
effectiveness in organization is discipline. Where there are no proper
disciplinary procedures for erring officers there will be a dislocation of
effective organizational functionality.

Page 26 of 49
Ahmed, M., & Qureshi, M. (2016) One of the main benefits of core
banking solutions that has been highlighted in the literature is their ability
to improve the efficiency and effectiveness of banking operations. A study
by them found that core banking solutions can help financial institutions to
streamline their processes, reduce costs, and improve customer service.
Additionally, the study found that core banking solutions can also improve
the accuracy and integrity of financial data, helping to reduce the risk of
errors and fraud.

Biswas, S., & Bose, I. (2015) Another benefit of core banking solutions
that has been identified in the literature is their ability to provide real-time
access to account information. A study found that core banking solutions
can help customers to access their account information and perform
transactions from anywhere, at any time. This is particularly useful for
customers who are constantly on the go, or for those who prefer to bank
online or through mobile devices.

Chowdhury, M., & Hasan, M. (2018) However, the literature also

highlights some challenges associated with implementing core banking
solutions. A study found that one of the main challenges is the high cost of
implementation, which can be a significant barrier for smaller financial
institutions. Additionally, the study found that the complexity of core
banking solutions can also be a challenge, as it can take time for financial
institutions to fully understand and utilize all the features and functionality
of the system.

Page 27 of 49
 CHAPTER 4
RESEARCH
METHODOLOGY

Page 28 of 49
 CHAPTER 4

RESEARCH METHODOLOGY

The word research is derived from the Latin word meaning to know. It is a
systematic and a replicable process, which identifies and defines problems,
within specified boundaries. It employs well-designed method to collect the
data and analyses the results. It disseminates the findings to contribute to
generalize able knowledge.

Methodology includes a collection of theories, concepts, or ideas as they

relate to a particular discipline or field of inquiry: Methodology refers to
more than a simple set of methods; rather it refers to the rationale and the
philosophical assumptions that underlie a particular study relative to the
scientific method. Therefore, scholarly literature often including a section
on the methodology of the researchers. This section does more than outline
the researchers’ methods might explain what the researchers. Ontological
or epistemological views are.

Another key (though arguably imprecise) usage for methodology does not
refer to research or to the specific analysis techniques. This often refers to
anything and everything that can be encapsulated for a discipline or a series
of processes, activities and tasks. Examples of this are found in software
development, project management and business process fields. This use of
the term is typified by the outline who, what, where, when, and why. In the
documentation of the processes that make up the discipline, which is being
supported by “this” methodology, that is where we would find the
"methods" or processes. The processes themselves are only part of the

Page 29 of 49
methodology along with the identification and usage of the standards,
policies, rules, etc.
Researchers acknowledge the need for rigor, logic, and coherence in their
methodologies, which are subject to peer review.
4.1 OBJECTIVES OF THE STUDY

1. To study the benefits of implementation of Core Banking Solutions

(CBS)

2. To study the impact of CBS on customer services

3. To offer suggestions for effective utilization of CBS software

features.

4.2 RESEARCH DESIGN

Exploratory Research Design: Exploratory research design is conducted

for a research problem when the researcher has no past data or only a few
studies for reference. Sometimes this research is informal and unstructured.
It serves as a tool for initial research that provides a hypothetical or
theoretical idea of the research problem.

Descriptive Research Design: Descriptive research aims to describe a

population, situation, or phenomenon accurately and systematically. It can
answer what, where, when and how questions, but not why questions. A
descriptive research design can use a wide variety of research methods to
investigate one or more variables.

Casual Research Design: Causal research is the investigation of cause-

relationships. To determine causality, Variation in the variable presumed to

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influence the difference in another variable must be detected, and then the
variations from the other variable must be calculated.
Here, for this research project, descriptive research design is being used.

4.3 SAMPLING DESIGN

Sampling Techniques

Random Sampling Technique: Random sampling is a part of the

sampling technique in which each sample has an equal probability of being
chosen. A sample chosen randomly is meant to be an unbiased
representation of the total population.

Convenience Sampling Technique: A convenience sample is a type of

non-probability sampling method where the sample is taken from a group
of people easy to contact or to reach. For example, standing at a mall or a
grocery store and asking people to answer questions would be an example
of a convenience sample.

Probabilistic Sampling Technique: Probability sampling means that

every member of the target population has a known chance of being
included in the sample. Probability sampling methods include simple
random sampling, systematic sampling, stratified sampling, and cluster
sampling.

Cluster Sampling Technique: Cluster sampling is a probability sampling

method in which you divide a population into clusters, such as districts or
schools, and then randomly select some of these clusters as your sample.
The clusters should ideally each be mini representations of the population.

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For this project, we have used the convenience sampling technique. The
sampling has been taken from the group of people with ease of access.
Results have been drawn on the basis of sample collected.

4.4 SAMPLING SIZE

The sample size of this research is 100 employees selected randomly. The
project is to understand the people with different mind sets, try to make
them prospects from suspects.

4.5 DATA COLLECTION METHODS

Primary Data:

Primary Data is collected through personal interviews, questionnaires,

telephonic conversations. A survey was conducted on the employees of
Baramulla Cooperative Bank Limited with the help of questionnaire.

Secondary Data:

Secondary data is collected through company’s official website and

internet and with the help of books available.

4.6 ANALYSIS TOOLS

The main research instrument with the help of which survey was
undertaken was questionnaire. The questionnaire contains a set of open-end
questions through which information was collected. Simple statistical tools
will be used to interpret the data and analyze it. The presentation will be
done using graphs and tables suiting perfect as per the situation.

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 CHAPTER 5
DATA ANALYSIS AND
INTERPRETATION

Page 33 of 49
 CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

To derive meaningful information from the data collected by conducting a

survey among 100 bank employees of Baramulla Cooperative Bank
Limited, data analysis is carried out. 5-point Likert type scale questions
were included in the questionnaire to know the level of satisfaction of bank
employees on various aspects of CBS. Statistical tools like percentage
analysis, weighted sum, Mean, Comparative analysis with ranking and Chi
square tests are used for the purpose of interpretation of results.

Table No. 1: Demographic profile of respondents

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It is inferred from table 1 that both male and female employees have been
surveyed, and numbers of female employees are more forming 54 percent
of total respondents surveyed. 43 percent of respondents belong to the age
group of 30 to 40 years. 40 percent of respondents have 10 to 15 years of
work experience at banks. 50 percent of respondents are rendering services
as Bank Officers, 42 percent of respondents are clerks, and 4 percent each
of respondents are rendering services as Assistant General Managers and
Managers of their branch. And majority, 85 percent of respondents work on
computer for 5 to 8 hours per day. It means that these respondents are
already accustomed to the system of providing services through CBS.

Table 2: Significant changes noticed by the respondents in the banking

landscape after the introduction of CBS.

SI No. Changes noticed by the respondents in the banking

landscape after the introduction of CBS

1 Long queues of customers in the bank counters for dealing

with the Banks are not found

2 ATMs, Internet banking, Mobile Banking, NEFT etc. are

preferred by the customers. That means, generic customer
services offered by the bank employees are no longer

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 preferred. Customers are less willing to take the advice of
the bankers for secondary products like mortgages and
investments, instead they prefer to research themselves

3 Customers expect a more tailored and personalised

experience, when they rarely need to contact their banks in
person at branches or by phone, or by other electronic
means. Bankers are required to offer more ecstatic services
to customers.

4 Because of cyber security issues, keeping financial

information safe has become a biggest challenge for both
bankers and customers. Banks make huge investment on
data protection.

5 Information technology is playing a dominant role in

Banking. Globalization has opened up the banking horizon
very wide, leading to severe competition among domestic
and foreign banks. Many new players with strong muscle
powers are entering into Indian banking Industry with their
own innovative products

6 Because of complete automation, banks are giving

preference to domain experts and technology specialists in
their recruitment. Employees without technical knowledge
are already trained or are being trained. People sitting with
large bound ledger books are out of scene now.

7 Complexities of banking have risen, there is a paradigm

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 shift from “conventional banking” to “convenience
banking,” and from “mass banking” to “class banking.”

8 Submission of MIS reports to the top management and

various other reports to the RBI, other regulators and
Government is done online. It ensures efficiency and
reduces the cost of operations.

9 Today, Banks recruit a greater number of officers and less

number of clerks. It means that CBS has reduced clerical
works at banks. Banks demand for a greater number of
officers, who are technical experts with high computer
knowledge.

From Table 2, it is very clear that CBS has brought many changes and
improvements in the Indian banking landscape. Contribution of CBS to the
banking industry is noteworthy. In fact, the present well developed banking
system is the outcome of introduction of CBS by the banks in all most all
the branches. From table 2, it is very clear that, CBS is the root cause for
rapid developments in the field of banking. It has made banking a friendly
exercise for the customers and made bankers technically advanced and
smarter in rendering services.

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Table 3: Level of satisfaction of bank employees with various aspects
of CBS

Particulars Strongly Disagree Neutral Agree Strongly Total Weighted Average Ranking
Disagree Agree sum level of
satisfy.

Reduces the 00 00 4 10 86 100 482 4.82 I

work

Free from 00 00 2 5 93 100 491 4.91 II

repetitive
work

Improves 00 00 2 6 92 100 490 4.90 III

coordination

Saves time 00 4 4 92 100 488 4.88 IV

00

Speeds up 00 00 5 5 90 100 485 4.85 V

the work

Free from 65 30 4 1 00 100 141 1.4 VI

security
issues

No 70 27 3 00 00 100 131 1.3 VII

Technical
problems

Free from 60 30 30 10 00 100 151 1.5 VIII

customers’
grievances

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From Table 3, it is very clear that, the average level of satisfaction of the
bank respondents was much more than Agree state which is denoted by 4
with respect to factors like, Free from repetitive work, improves
coordination, saves time, Speeds up the work and Reduces the work, Bank
employees are highly satisfied with the CBS as regards to the above factors.
On the basis of weighted sum, ranking was also done in the above table to
know which factor contributed the most towards maximizing the
satisfaction of respondents. Table 3, also reveals that, the average level of
satisfaction of the bank employees was much lesser than the Disagree state
which is denoted by 2 with respect to factors like, Free from customers’
grievances, Free from security issues, and No Technical problems showing
the strong dissatisfaction of Bank employees. Hence, they are ranked
accordingly. The Table clearly shows that CBS has both positive and
negative impact on the services of bankers. But needless to state that, if
proper measures are taken, CBS will produce wonders.

Table 4: Distribution of respondents on the basis of their perception

regarding durability of CBS as a tool of smart banking.

V=(r-1) (c-1) = (2-1) (2-1) =1 For V = 1

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Table value of Chi square at 5% level of significance = 3.84

The calculated value of Chi square is greater than the Table value of Chi
square; hence the null hypothesis is rejected. We therefore conclude that
CBS will last long as a tool of Smart Banking.

Table 5: Perception of respondents about CBS as a factor responsible

for causing reduction in Bank jobs

Perception of respondents Number of Respondents Percentage

CBS will increase bank jobs 00 00
CBS will decrease bank jobs 95 95
CBS has no impact on bank jobs 03 03
No opinion 02 02
Total 100 100

From table 5, it is very clear that, Bank jobs are reduced due to smartness
of CBS. Now banks give preference to people with high technical caliber,
who have specialized knowledge of computer software and computer
applications, besides having other academic qualifications. Number of
clerical posts has been already reduced by almost all the banks. More
recruitment is for the post of officers. It is inferred from the opinions of
respondents in our study. Hence null hypothesis is rejected and alternative
hypothesis is justified. We therefore conclude that Bank jobs are reduced
due to smartness of CBS. And it is advantageous from the point of view of
bankers.

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CHAPTER 6
FINDINGS

Page 41 of 49
 CHAPTER 6
FINDINGS

6.1 FINDINGS FROM THE STUDY

 Bank employees surveyed are already accustomed to the system of

providing banking services through CBS
 CBS has brought many changes and improvements in the Indian
banking landscape. Contribution of CBS to the banking field is
noteworthy. In fact, the present well developed banking system is the
outcome of introduction of CBS by the banks in all most all the
branches.
 CBS has made banking a friendly exercise for the customers and
made bankers technically advanced and smarter in rendering services.
 The average level of satisfaction of the bank respondents was much
more than agree state which is denoted by 4 with respect to factors
like, Free from repetitive work, improves co-ordination, saves time,
Speeds up the work and Reduces the work, Bank employees are
highly satisfied with the CBS as regards to these factors.
 The average level of satisfaction of the bank employees was much
lesser than the Disagree state which is denoted by 2 with respect to
factors like, Free from customers’ grievances, Free from security
issues, and No Technical problems showing the strong
dissatisfaction of Bank employees.
 According to the perceptions of respondents surveyed, CBS will last
long as a tool of Smart Banking.
 CBS is the main factor responsible for banks opting for reduction in
their man power

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 CHAPTER 7
CONCLUSION,
SUGGESTIONS AND
LIMITATIONS

Page 43 of 49
 CHAPTER 7

CONCLUSION, SUGGESTIONS AND LIMITATIONS

7.1 CONCLUSION

Business of banks has increased multi fold during the last two decades.
Many ancillary services like Life/Non-life Insurance, Mutual funds etc are
provided by banks along with the traditional business. At the top level,
separate workforce is available to take care of the new business, but at
ground level only existing staff have to manage them. Increased business
and drastic reduction in the staff strength is causing lots of confusions
among them. However, some visible changes are observed among the staff,
but there is much scope for improvement. Further bank charges are
continuously on rise, which creates lots of hardships for the common men
in the country. There is an urgent need for looking into this issue in the
interest of common men. Technology when used wisely and appropriately
will no doubt create wonders.

A glimpse ahead in the field of banking shows more emphasis on virtual

banking, men less banking, paperless banking through digital banking by
using new and innovative technologies. Business Analytics and Artificial
Intelligence (AI) are expected to bring a major change. Robotics enabled
by AI may be the future game changer in the banks. Growing competition
in the field of banking may lead to major transformation leading to the
survival of some banks and emergence of new banks which are highly
competitive. Banks will deploy Robots for customer service, investment
advisory and credit –approval process to enhance their customer base and
to gain more from ecstatic services. Digital banking through highly

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advanced CBS will be the most preferred form of banking in the coming
years. Hence, candidates with high technical caliber will be in more
demand in the banking industry in future.

7.2 SUGGESTIONS/ACTION PLAN

 More user-friendly CBS software in rural local languages must be

introduced in rural and remote branches of banks.
 Though Banks have invested hugely for technology up gradation
they have neglected to train the staff adequately. Employees, though
they are using this CBS from many years, still they get into many
confusions while adapting themselves to the changing environment
in the industry. Employees must be taught the intricacies of the
system and trained from time to time. Up gradation of their
knowledge is a basic necessity of the industry.
 Banks must reasonably charge their customers for offering services
through CORE banking channels like, ATMs, Telephone Banking,
Mobile Banking, & Internet Banking. Customers in general are upset
about ATM charges levied by the bankers.
 Issues relating cybercrimes should be properly dealt with.
7.3. LIMITATIONS OF THE STUDY

1. It is not as easier to report the training and development process and

plans of an organization by doing a sample survey on 100 employees.
2. The employees were busy with their daily schedule and it was very
much difficult for them to give time.
3. Personal biasness of various employees may have supplied wrong
data.
4. Time and money were also an important constraint.

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