Core Banking Solution (CBS) IT Modernisation Project In order to meet the requirements and needs of the IT Modernisation Project, Core Banking Solution (CBS) will be implemented across India covering all the post offices.

Core Banking Solution (CBS) is networking all the post offices, which enables customers to operate their accounts and avail account related services from any post office on CBS network, regardless of where he maintains his account. The customer is no more the customer of a post office. He becomes the Post Office Savings Bank (POSB) Customer. Thus CBS is a step towards enhancing customer convenience through “Anywhere and Anytime Banking”.

Need for Core Banking Solution  Improve operational efficiency - reduce cost of operations Core Banking will provide various alternative delivery service channels, which reduce cost and time taken for the transactions. Currently banks’ counter transaction costs are around Rs. 45-50 per transaction. On the other hand, the transaction cost of withdrawal from an ATM is Rs. 15-18. For net banking, the cost is Rs. 4 per transaction. The centralised process of core banking will also improve efficiency by avoiding duplication of work in post offices from Branch Office (BO) to Sub Post Office (SO) to Head Post Office (HO).  Improve customer service Core Banking will improve customer services by providing services through alternate channels on 24 x 7 basis – ATM, Internet, Phone, SMS and Mobile Banking. Customers would be able to operate their accounts, and avail banking services from any post office on CBS network, regardless of where they maintain their account.

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Comply with Anti Money Laundering (AML)/ Know Your Customer (KYC) requirements It is easy to comply with anti–money laundering norms through core banking. The AML norms require the post office to detect when a customer has opened multiple accounts. This is not possible in Sanchay Post. Moreover, compliance with KYC norms is required to issue debit cards to the customers.  Integrate with electronic payment systems Integration with electronic payment systems will allow Department of Post to participate in an inter-operable electronic payment network run by the National Payments Corporation of India. This will help in quick and safe transfer of funds through National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS).

CBS implementation seeks to meet the following objectives:    

To increase the number of customers To provide multiple delivery channels like internet, mobile banking, ATMs, thereby bringing access to financial services to the doorsteps of the customers To enable faster money fund transfers to reach out to more customers To become one stop solution for financial inclusion initiatives of the Government of India

CBS is a centralized application with browser based interface. So, there is no need for servers at the post office level for running CBS. CBS will have some additional features which are not available in Sanchay Post. These are: real-time 24x7 processing capability, centralized database, availability of alternate channels, capture of KYC (Know Your Customer) details, adequate audit & inspection features etc.

CBS will provide the following benefits: 

Anytime and Anywhere banking

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Standardised, simple and automated processes

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Increase in quality of the service provided to the customers

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Timely and accurate information for management decision making

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Strong audit and internal controls

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Bring down the cost of transaction and thereby improving operational efficiency

 Paving way for new value added services thereby generating additional revenue for the Department

Some of the key process changes that will take place are mentioned below:  Online update of transactions on Core Banking Solution (CBS) platform at the networked post offices  Proper indexing, scanning and tagging of all account opening and KYC related documents 

Adapt new internal audit processes in line with the best banking practices

 All balances will be calculated automatically and no need to maintain office wise balance registers  Account opening will continue to take place at Head Post Office and Sub Post Office; however, the processing of modification of status related requests will take place at Circle Processing Centers (CPC)  Transfer of funds to accounts standing in CBS enabled Post Offices through NEFT (National Electronic Fund Transfer) / ECS (Electronic Clearance Services) / RTGS (Real Time Gross Settlement) 

Instant transfer of funds between accounts standing in CBS enabled Post Offices

 Deposit would be done at any CBS Post office, irrespective of where the account is maintained 

Withdrawal would take place from any post office running on CBS or POSB ATMs

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MIS can be generated at any given time

 Facilities of e-banking and mobile banking for accounts standing in CBS enabled Post Offices  Every customer will be allotted Customer Identification File (CIF) Number which will be a different from the account number 

All the accounts opened by the same customer will be linked to his CIF number which will help in validating the limits of investments/number of accounts prescribed in the rules automatically at the time of opening account

The FSI (Financial Services System Integrator) will deploy the CBS solution in all post offices (POs) and Circle Processing Centres (CPC) as given below: 

Pilot 8 circles with 112 Head Post Offices, 12 Mukhya Dak Ghar (MDGs), and 8 Circle Processing Centres (in Karnataka, Maharashtra, Rajasthan, Uttar Pradesh, Tamil Nadu, Assam, Andhra Pradesh and Delhi)

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Phase 1 All remaining Head Post Offices, 759 Mukhya Dak Ghar and Lower Selection Grade Sub Post Offices, 750 Sub Post Offices, and 14 Circle Processing Centres

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Phase 2 2423 Mukhya Dak Ghar and Lower Selection Grade Sub Post Offices and remaining Sub Post Offices.

Phase I

Phase II

Pilot

122 Post Offices (8Circles) T

2209 (all remaining HOs and select SOs) (22 Circles) Including

23207 Post Offices (22 Circles)

The expected timelines for the same are as below:

For any feedback, please write to us at [email protected]

T + 22 months