CAIIB · ITDB

Information Technology and its Implications

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Information Technology and Digital Banking (Elective) — CAIIB.

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Q

What is the primary role of Information Technology in modern banking operations?

A

IT enables banks to automate processes, enhance operational efficiency, improve customer service delivery, and support real-time transaction processing across multiple channels.

Q

What is a Distributed Ledger Technology (DLT) and how does it differ from traditional databases?

A

DLT stores data across multiple nodes without central authority.

Q

What does the term 'core banking solution' (CBS) refer to in the context of IT in banking?

A

CBS is a centralized banking software platform that connects all branches and channels to a single database, enabling customers to transact from any branch and providing real-time account updates.

Q

What is the purpose of a Public Key Infrastructure (PKI) in banking transactions?

A

PKI enables secure digital signatures and encrypted communications in banking.

Q

Which RBI guideline mandates banks to have a robust IT governance framework?

A

RBI's IT Framework for Banks (2011) and subsequent Master Directions on IT mandates banks to establish IT governance, risk management, and audit frameworks aligned with international standards.

Q

What is 'Open Banking' and what regulatory framework supports it in India?

A

Open Banking allows third parties to access bank data via APIs with customer consent.

Q

What is meant by 'digital banking' in the context of IT implications for banks?

A

Digital banking refers to the delivery of banking products and services through electronic channels such as internet banking, mobile banking, ATMs, and digital wallets, minimizing physical branch dependency.

Q

What is 'data masking' and why is it important for banks handling customer data?

A

Data masking hides sensitive data by replacing it with fictional but realistic values.

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