The correct option is (a).
Explanation
Core Banking Solutions (CBS) refers to a back-end system that processes daily banking transactions and posts updates to accounts and other financial records. The term "CORE" stands for Centralized Online Real-time Exchange. It transforms a customer from being a client of a specific branch to a client of the bank as a whole.
Statement-wise Analysis:
- Statement 1 is Correct: CBS is a networking of a bank's branches that shares a centralized database. This infrastructure enables customers to operate their accounts and avail banking services from any branch of the bank on its network, regardless of where the account was originally opened.
- Statement 2 is Incorrect: The primary objective of CBS is to improve customer convenience, operational efficiency, and speed of transactions. While computerization aids in better reporting and compliance, CBS is not defined as a mechanism specifically designed to increase the Reserve Bank of India's (RBI) control over commercial banks.
- Statement 3 is Incorrect: This statement describes a mechanism for the resolution or merger of stressed banks (often related to Non-Performing Assets or insolvency). CBS is a technological platform for banking operations, not a legal or regulatory procedure for takeovers.
Key Takeaway:
Core Banking Solutions (CBS) enables "Anytime, Anywhere" banking by connecting all branches of a bank to a central server, allowing real-time transaction processing across the entire network.