Alternate Delivery Channels (ADCs)

Alternate Delivery Channels (ADCs) are methods used by banks to provide services to customers outside the traditional bank branch. The goal is to offer customers “anywhere, anytime banking.” Digital banking is the most significant part of these alternate channels.

Key Digital Banking Channels

1. Automated Teller Machines (ATMs)

ATMs are electronic machines that allow customers to perform basic banking transactions without the help of a bank employee.

  • Services Offered:
    • Financial Transactions: Cash withdrawal, cash deposit, and fund transfers.
    • Non-Financial Transactions: Balance inquiry, mini statement, and PIN change.
  • Types of ATMs:
    • White Label ATMs: Owned and operated by non-bank entities.
    • Brown Label ATMs: The hardware is owned by a third-party service provider, but the cash management and network connectivity are handled by the sponsor bank.

2. Internet Banking (or Net Banking)

A facility that allows customers to access their bank accounts and perform a wide range of transactions through the bank’s website.

  • How it works: Customers use their Customer ID and password to log in securely.
  • Services Offered:
    • View account statements.
    • Transfer funds using NEFT, RTGS, and IMPS.
    • Pay bills (electricity, phone, etc.).
    • Open Fixed Deposits (FDs) and Recurring Deposits (RDs).
    • Request a new chequebook.

3. Mobile Banking

A service provided by a bank that allows its customers to conduct financial transactions remotely using a smartphone app.

  • How it works: Customers download the bank’s official app and set up a secure login using an MPIN or biometrics (fingerprint/face ID).
  • Key Feature: It offers the convenience of banking on the go.
  • Example: Using the SBI YONO app or the HDFC Bank MobileBanking app to check your balance or transfer money.

4. Unified Payments Interface (UPI)

An instant, real-time payment system developed by the National Payments Corporation of India (NPCI).

  • How it works:
    • It allows users to link multiple bank accounts to a single mobile application.
    • Users can send and receive money using a Virtual Payment Address (VPA) or UPI ID (e.g., yourname@bank), without needing to enter bank account details or IFSC codes.
    • Transactions can also be done by scanning a QR code.
  • Key Feature: It has made digital payments incredibly simple and popular in India.
  • Example: Using apps like Google Pay, PhonePe, or Paytm to pay a shopkeeper or transfer money to a friend.

Summary

Alternate Delivery Channels, driven by digital banking, have transformed how customers interact with banks. They have moved banking from a place you go to (a branch) to a thing you do (on your phone or computer). Key channels like ATMs provide 24/7 access to cash, Internet Banking offers comprehensive services from home, Mobile Banking brings the bank to your fingertips, and UPI has made instant payments seamless and universal. These channels have increased customer convenience, reduced the workload on bank branches, and played a massive role in promoting financial inclusion.

Quick Revision Points

  • ADCs: Banking channels outside the physical branch.
  • ATM: For basic cash and non-cash transactions. White Label ATMs are operated by non-banks.
  • Internet Banking: Banking through a website.
  • Mobile Banking: Banking through a smartphone app.
  • UPI (Unified Payments Interface): Instant payments using a VPA/UPI ID (e.g., name@bank) or QR code.
  • NPCI (National Payments Corporation of India): The organization that created UPI and RuPay.
  • Goal of ADCs: To provide “anywhere, anytime banking.”