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CORE BANKING
SOLUTION(CBS)
&
Types of CBS Server
 ACKNOWLEDGEMENT

“I wish to thank various people for their contribution to this

project. I would like to express my deep gratitude to my ITT
educator Ms. SUMINDER KAUR for their guidance,
enthusiastic encouragement and useful advice of this
research work”.
INDEX
■ What is Core Banking Solution?
■ Working Of Core Banking Solution
■ Structure of Core Banking Solution
■ Need of Core Banking Solution
■ Difference between CBS and TBS
■ Types of Server
■ Core Banking Solution Architecture
■ Evolution of CBS Architecture
■ Operations of CBS Branch
■ CBS Flows of Transactions
■ Component of CBS
■ Advantages of Core Banking Solution
■ Disadvantages of Core Banking Solution
■ Top CBS Application Software Providers
 What is Core Banking Solution?
■ Core Banking Solution (CBS) is centralized Banking Application Software. It has several
components which have been designed to meet the demands of the Banking Industry.
■ In other words, Core Banking is a Banking service provided by a group of networked bank
branches where customers may access their bank account and perform basic transactions
from any of the member branch offices.
■ Banking Software and network technology allows a bank to centralize its record keeping
and allow access from any Locations.
■ It is supported by advanced technology infrastructure and have high standards of business
functionality.
■ Open source Technology in Core Banking solution or software can helps banks to maintain
their Productivity and Profitability at the same time.
■ There are different Companies in the market providing CBS software like Finacle by
Infosys, Quartz by TCS and Flex Cube by Iflex Solutions.
Working Of Core Banking Solution
■ Core banking, is a solutions to the issues of traditional banking
system.

■ In CBS, though your account remains with the home branch, but you
can access your account from any branch of the same bank.

■ For Example If you have your account in SBI Ring Road Branch,
you can still access your accounts from any SBI branch within the
nation.
■ Meaning, you can make deposit and withdrawal transactions from
any branch of the same bank.

■ This is because the bank now maintains a central database of the

accounts that can be accessed from any branch of the nation.
■ Core Banking Solution (CBS) is networking of
branches, which enables Customers to operate their
accounts,
■ And avail banking services from any branch of the
Bank on CBS network, regardless of where he
maintains his account.
■ The customer is no more the customer of a Branch.
He becomes the Banks Customer.
■ Another interesting fact regarding CBS is that all CBS
branches are inter-connected with each other.
■ Therefore, Customers of CBS branches can avail
various banking facilities from any other CBS branch
located anywhere in the world.
Structure of Core Banking Solution
Need of Core Banking Solution
■ To meet the dynamically changing market & customer needs.
■ Speed up the Banking Transactions.
■ To improve & Simplify banking processes so that bank staff
can focus on sale and marketing stuff.
■ Convenience to a customer as well as the bank.
■ To expand Presence in Rural and Remote areas.
■ To integrate various Branches of the bank
Difference between CBS and TBS
Core Banking Solution
■ Core (Centralized online Real-time
Exchange) banking is a banking services
provided by a group of networked bank
branch.
■ Customers may access their bank account
and perform basic transactions from any of
the member branch offices.
■ Core Banking functions will include
transaction accounts, loan, mortgages and
Payments.
■ Banks make these services available
across multiple channels like ATM, Internet
Banking, mobile banking and branches.
Traditional Banking Solution
■ In a traditional banking system, an
individual or a firm that opens an account
with the bank can get its transaction only
through that bank or branch.
■ E.g. : If you have opened your account
with ICICI bank, Rohini Branch, then your
transactions will be limited to such branch.
■ This means:
 To deposit the money,
 To withdraw the money,
 To transfer your funds,
 To deposit your cheques, etc. you
will have to visit your branch.
 In case of any transaction happening
outside of the branch, you will have to wait
for such funds to be reflected in your
branch for days.
Types of Server
A server is a sophisticated computer that accepts request
from different machine called clients.
■ Application Server
■ Database Server
■ ATM Server
■ Web Server
■ Antivirus Server
■ Internet Banking Application Server
■ Internet Banking Data Base Server
■ Proxy Server
■ Mail server
Application Server
■ An Application server is a software framework that
facilities to create web application and a server
environment to run them.
■ An application server is a component-based
product that resides in the middle-tier of a Server
centric architecture.
■ It provides middleware services for security
and state maintenance, along with data access and
persistence.
■ Application Server frameworks contain a
comprehensive service layer model.
■ It acts as a set of component accessible to the
software developer through a standard API defined
for the Platform itself.
■ For Example, Tomcat is an application server for
Java Web Application, which contain additional
Functionalities like Servlet Container.
Database Server
■ A database server is a computer program that
provides database services to other computer
programs or to computers, as defined by the client
server model.
■ The term may also refer to a computer dedicated to
running such a program.
■ Most database servers respond to a query language.
■ Each Database understands its query language and
converts each submitted query to server readable
form.
■ Users access a database server either through a
“front end” running on the users computer.
■ Example of Database application include Oracle, DB2,
Informix and Microsoft SQL Server.
ATM Server
■ This server contains the details of ATM account holders.
■ Soon after the facility of using the ATM is created by the
Bank, the details of such customers are loaded on to the
ATM server.
■ When the Central Data Base is busy with central end-of-day
activities or for any other reason, the file containing the
account balance of the customer is sent to the ATM switch.
■ Such a file is called Positive Balance File (PBF).
■ Till the central data base becomes accessible, the ATM
transactions are passed and the balance available in the
ATM server.
■ This ensures not only continuity of ATM operations but also
ensures that the Central data base is always up-to-date.
Web Server
■ A Web server is a program that uses HTTP(Hypertext
Transfer Protocol) to serve the files that form Web
pages to users.
■ All computers that host Web sites must have Web
server Program.
■ The primary function of Web server is to store, process
and deliver web pages to Client.
■ The Communication between client and Server takes
place using the Hypertext transfer protocol (HTTP)
■ Dedicated computers and appliances may be referred
to as Webservers as well.
■ Leading Web server include Apache (the most widely
installed Web Server), Microsoft Internet Information
Server and nginx (pronounced Engine X)
Proxy Server
■ In network, a proxy server is a server that acts as
an intermediary for requests from client seeking
resources from other servers.
■ It intercept all the requests to the real server to see
if it can fulfill the request itself. If not, it forwards
the request to real server.
■ A proxy server is a dedicated computer or a
software system running on a computer.
■ A client connects to the proxy server, requesting
some services, such as a file, connection, web
page, or other resources.
■ Proxy server have two main Purposes;
■ To improve Performance and to filter request.
Mail Server
■ A mail server(or email server) is a computer system
that sends and receives email.
■ Mail servers send and receive email using standard
email protocols.
■ The mail server works in conjunction with other
programs to make up what is sometime referred as
messaging system
■ A messaging system includes all the applications
necessary to keep E-mail moving.
■ This system uses SMTP (Simple Mail Transfer
Protocol) or ESMTP (Extended Simple Mail Transfer
Protocol).
■ For example, the SMTP protocol sends messages and
handles outgoing mail requests.
Core Banking Solution Architecture

 CBS is a Three Tier Architecture:

 Data Base Tier
 Application Tier
 Presentation Tier
Evolution of CBS Architecture
Operations of CBS Branch
■ Access Control Procedures
■ Server Related Procedures
■ Physical and Environmental Controls
■ Network Related Procedures
■ ATM Configuration
■ Business Continuity Planning & Disaster
Recovery planning
CBS Flows of Transactions
 User access CBS from a PC.
 It is a web browser based access
- Similar to Internet Browsing.
 URL is intranet address.
 Access is granted after authentication of user ID and password.
 User command is transmitted from PC.
Component of CBS

INTERNET BANKING DATA CENTRE

COMPONENT OF CBS

ANTIVIRUS
DATA NETWORK
SOFTWARE
ATMs
Internet Banking
■ Just as in the case of ATM servers, where the details of all the
account holders who have ATM facility are stored, the Internet
banking data base server stores the user name, password of
all the internet banking customers.
■ IBDS (Internet Banking Data Base Server) software stores the
name and password of the entire internet banking customers
(Please note that the ATM server does not hold the PIN
numbers of the ATM account holders).
■ IBDS server also contains the details about the branch to
which the customer belongs. The Internet Banking customer
would first have to log into the bank’s website.
■ The next step would be to give the user name and password.
■ The IBDS is located in a Demilitarized zone.
■ It has a separate VLAN that connects a proxy server, mail
server, web server and IBAS.
Antivirus Software
■ In the Core Banking Solution as there is a Centralized Data Centre
and also as there was a Centralized Data Base server, application
server etc., the Anti Virus Software was also available only in the
Centralized Data Centre.
■ This copy of the Anti Virus Software was updated promptly and
■ Regularly at the Data Centre and pushed into all of the servers and in
all the systems in the branches by push pull method
■ Some Banks had, for back up purposes as also for business of the
■ bank continuity planning had decided to have servers in the different
branches.
■ All the servers also were updated with the latest Anti Virus.
Advantages of Core Banking Solution
Advantage to Customer Point of view

All the Branches access application from central server, so that deposits made in any branch reflects
immediately and customer can withdraw money from any other branch throughout the world.

Anywhere Banking by eliminating branch Banking and can Provide Banking Services 24*7

Transfer of funds from the Cities to the Villages and Villages to Cities will be done Easily.

CBS is very helpful to people living in Rural areas. Farmer can Receive E-Payments towards
Subsidy directly in their Bank Accounts.

ATM, Interest Banking, Mobile Banking, Payment Gateways facilities are available.

Centralized printing and backup resulting in reduction in capital and revenue expenditure on printing and
backup devices and media at branches.
Advantages to Bank
Convenience in Opening accounts Processing cash, servicing loans,
calculating interest, implementing changes in Policies like charging interest
rates etc.

Retention of customer through better customer services.

Process standardization within bank & branches.

Accuracy in transaction & minimization of errors.

Ease of Submission of various reports to the government & regulatory

bodies like RBI.

Improved management of Documentation & Recording having centralized

database result in quick gathering of data & MIS Report
Disadvantages of Core Banking Solution

Any Failure in Computer systems can cause entire network to go

down.

Excessive Reliance on Technology.

If Data is not protected properly and if proper care is not taken,

hackers can gain access to the sensitive Data.

Costly maintenance and support requiring niche skills and costly

Staff.

Vendor of the Platform controls the pace of Innovation, if they don’t

do it, you can’t have it.
Top CBS Application Software Providers

Company Product

Infosys Finacle
I-Flex Solutions Flexcube
HCL Technologies Bankmate
Tata Consultancy Services Quartz
(TCS)
Polaris Intellect suite
 BIBLIOGRAPHY
■ ICITSS Study Material – ICAI

■ https://www.researchgate.net/figure/The-
example-of-CBS-architecture_fig1_283283862
■ https://www.sesameindia.com/images/core-
banking-system-architecture
THANK YOU