Innovative Banking

Innovative banking refers to the modern, technology-driven products and services that banks now offer, which have transformed banking from something done only inside a branch during working hours into something a customer can do anytime, anywhere. These innovations improve convenience, speed, and reach.

1. Merchant banking. A merchant bank provides specialised financial services to businesses rather than ordinary deposit-and-loan services to individuals. Its services include helping companies raise capital by managing new issues of shares and debentures, underwriting issues, advising on mergers and acquisitions, portfolio management, and project counselling. Merchant banking helps industry and trade mobilise long-term finance.

2. Consortium approach (consortium banking). When a single borrower needs a very large loan that is too big or too risky for one bank alone, several banks join together to form a consortium and jointly finance the project, sharing the amount and the risk among themselves under a lead bank. This lets banks fund big industrial and infrastructure projects while spreading their exposure.

3. Credit card facilities. A credit card lets a customer buy goods and services on credit up to a sanctioned limit and pay the bank later, within a billing cycle. It offers cashless convenience and a short interest-free period, though interest is charged on amounts not paid by the due date.

4. Online banking / internet banking. Internet banking (also called online or net banking) lets customers operate their accounts through the bank's website or app over the internet — checking balances, transferring funds, paying bills, and requesting services — from a computer or phone, at any time, without visiting a branch.

5. Telephone banking (tele-banking). Telephone banking allows customers to carry out banking transactions and enquiries over the telephone, using an interactive voice-response system or by speaking to a bank representative, again without going to the branch.

6. ATM-cum-debit card. An Automated Teller Machine (ATM) is a self-service machine that lets customers withdraw and deposit cash, check balances, and make certain payments at any hour. An ATM-cum-debit card combines two uses in one card: it operates the ATM, and it also works as a debit card for cashless purchases at shops and online, where the payment is deducted directly from the customer's own account. …