Banking Domain Concepts

The banking domain is a crucial part of the financial services sector. It involves handling financial transactions, providing credit facilities, managing deposits, and offering investment solutions to individuals and businesses. Understanding the core concepts in banking is essential for those involved in banking software development, testing, and financial services.

Core Banking

Core banking refers to the centralized systems that allow banks to offer services like account management, loans, deposits, and withdrawals across branches in real-time. Examples include CBS (Core Banking Solution) software.

Types of Bank Accounts

• Savings Account: Used for saving money with interest benefits.
• Current Account: Used by businesses with frequent transactions.
• Fixed Deposit (FD): Money is deposited for a fixed period at a fixed interest rate.
• Recurring Deposit (RD): Regular deposits are made, and interest is earned over time.

Banking Transactions

• NEFT (National Electronic Funds Transfer): Electronic fund transfer system for one-to-one transfers.
• RTGS (Real-Time Gross Settlement): Real-time fund transfers for large amounts.
• IMPS (Immediate Payment Service): Instant money transfer available 24/7.
• UPI (Unified Payments Interface): Mobile-based real-time payment system.

Payment Cards

• Debit Cards: Linked directly to a bank account for direct withdrawals.
• Credit Cards: Allow users to borrow money for purchases, to be paid later.
• Prepaid Cards: Loaded with funds in advance for usage.

Banking Channels

• Branch Banking: Traditional method through physical branches.
• Internet Banking: Online access to banking services.
• Mobile Banking: Banking using smartphones or apps.
• ATM (Automated Teller Machine): Allows cash withdrawals, deposits, and mini statements.

Loan Products

• Home Loan
• Personal Loan
• Auto Loan
• Education Loan
• Business Loan

KYC (Know Your Customer)

A regulatory process to verify the identity and address of customers to prevent fraud and money laundering.

Interest and Charges

• Interest Rate: Percentage charged or earned on deposits and loans.
• Overdraft: Facility to withdraw more than the account balance.
• Penalties and Fees: Charges for late payments, minimum balance, etc.

Regulatory Bodies

• RBI (Reserve Bank of India): Central bank in India.
• SEBI (Securities and Exchange Board of India): Regulates capital markets.
• Banks Board Bureau, NABARD: Regulate other aspects of banking.

Security and Compliance

• Two-Factor Authentication
• PCI-DSS Compliance
• Anti-Money Laundering (AML)
• Fraud Detection and Prevention Systems

Banking Software Systems

• Core Banking Software (CBS)
• Loan Management Systems
• Customer Relationship Management (CRM)
• Mobile and Internet Banking Platforms