In the banking sector, there are two ways of recording a transaction i.e. traditional bank passbook and a digital bank passbook. In this article, we would be discussing the differences between the two in detail.
What is Traditional Bank Passbook?
It means keeping a track of the transactions made in the bank account. It reflects all the debit and credit transactions. It also reflects the details of the transactions like where the amount has been spent and who has credited it to the bank account.
Customers can get the passbook printed whenever they visit the bank so as to keep it updated. Below mentioned are some factors to be known:
- The banking kit includes a Bank passbook, cheque book, debit card, and other important banking credentials.
- An account holder is required to visit the bank to get the passbook updated as there is no alternative method to get the same updated physically.
- It is to be printed on paper.
- It is also used as address proof.
Components of a Bank Passbook
- Name of the Bank
- Address of the Bank
- MICR Code
- IFSC Code
- Name of the account holder
- Type of Bank Account
- Customer ID
- Address of the account holder
- Bank account number
- Date of opening bank account
Benefits of a Bank Passbook
Below mentioned are some of the benefits of using a traditional bank passbook:
- Recording account statements
Passbook helps keep a track of the transactions made in the bank account.
The transactions that get printed on the passbook become permanent and can be used to refer to any transaction in the future. It provides the user with the time and date of the transaction along with the debits and the credits and the account balance.
- Easily keep track of transactions
It allows an account holder to keep track of the transactions made in a specific week/ month/ year and also the account balance. Users can plan the transactions for the future as it allows them to analyze the difference between the total expense made and the total savings.
- Used to provide proof of transactions
It can be used as proof as it can be submitted to organizations or individuals who want to review the user’s financial statements. It can be submitted to HRD as proof for verification and salary purposes.
- Identifies the fraud
A false or suspicious entry reflected in the passbook can be an alert for the user to know about the possible fraud that may happen. After which, the user shall notify the same to the bank so that the bank account can be deactivated temporarily or any other measure can be taken.
Limitations of a traditional bank passbook:
Below mentioned are the limitations of the traditional bank passbook:
- To get the bank passbook updated, the user is required to visit the bank as there is no other alternative method for the same.
- Once the passbook gets filled with transactions, the user is required to apply for the new one.
- There is a possibility of the passbook getting misplaced as the user carries it with him/her whenever he/ she wants to get it updated.
What is a Digital Bank Passbook?
It is a digital method of recording transactions made in the bank account, but without having any requirement of visiting the bank. It also reflects all the transactions i.e. debit and credit made in a particular week/month/ year along with the amount debited. Below mentioned are some factors to be known:
- Transactions are not processed manually in the case of a digital passbook.
- Digital Passbook gets updated automatically whenever a transaction gets initiated or completed.
- No need to visit the bank to get it updated.
- It shows a detailed account of all the transactions that can be submitted for multiple reasons.
- To check a particular transaction, the date of the transaction can be segregated to check its detailed summary.
Benefits of Digital Passbook
Below mentioned are the benefits of a digital passbook:
- Reduced visits to the branch
The number of visits to the bank can be reduced, especially those for getting the passbook updated as it automatically gets updated online after each and every transaction.
- Track Income & Expenses
As it can be accessed at any time, one can track previous expenditures and incomes so as to plan ahead for the future.
It lets users add remarks to the expenses made on a specific date by writing down their purpose to spend. This allows users to track their spending on a monthly basis so as to reduce expenses.
As everything becomes online in the case of a Digital passbook, one can access it at any time and from anywhere. Let’s suppose, a user has two bank accounts i.e. in Indian Bank and Axis Bank and he spends INR 20,000 each. Now, he wants to know his account balance so as to plan his expense for the future, then he would be required to visit as per the Indian Bank timings and the Axis Bank timings to get it updated in the passbook.
However, with the growing technology and digitalization, there is no more need to visit the bank for the same as it can be easily accessed sitting at home.
- Real-time update
It lets users know their bank account status after each and every transaction. As soon as money is spent or any amount is received in the bank account, it gets updated whereas, in the case of a traditional passbook one was required to visit the bank to get the same.
- How much time does it take to update a bank passbook?
A traditional bank passbook takes a few minutes to update the bank passbook. On the other hand, a digital bank passbook gets updated after each and every transaction that is initiated or completed.
- Are there any charges for getting the passbook updated?
No, the bank does not charge any fees to get the bank passbook updated.