E - Banking

History
qImagine a Scenario

qStandard Federal Credit Union was the first

financial institution to offer online internet
banking services in October, 1994
 E - Banking
qDefinition

qWhat is E-Banking?
 Internet Banking

qMeaning

qAdvantages of E-Banking
Internet Penetration in
India
 Stages in Internet Banking

qInformation Kiosks

qBasic I-banking

qVirtual medium
 E-Banking in India

qNet Banking Facilities

qChanging Scenario
Services Provided by E-
Banking
qAutomatic Teller Machine (ATM)

qTelephone Banking

qDebit/Credit Cards

qSms Banking
 Internet Banking Services
qMobile Banking

qeTax

qOnline Trading

qOnline Remittances

qOnline Bancassurance
qElectronic Bill Payment

qShop Online

qOther Value Added Services

v IRCTC
v User Profile
v Prepaid Mobile
 Challenges in Internet
Banking:
qProper understanding of the customer
qSecurity:
qProtected against being "net-jacked“
qCracking login and passwords
qData Diddling
qSession hijacking

qStandardization

qLegislative and Regulatory Issues

 Challenges in Internet
Banking:
qInfrastructure

qHeavy Investment Costs

qSocio-Cultural Challenges
qBreach of privacy
qBandwidth
qComputer literacy
Guidelines for internet banking
qTechnology and security issues

qLegal issues

qRegulatory and supervisory issues.

Technology and Security
Standards:
q Banks should select a network and database
administrator with clearly defined roles.

q Proper security policy approved by the Board of

Directors.

q Banks should introduce logical access controls

q Banks should use the proxy server type of firewall

q All unnecessary services on the application server such

as FTP (File Transfer Protocol), telnet should be
disabled.
Technology and Security
Standards:
q Review their security infrastructure and security policies
regularly and should change with changing technologies

q Banks should have proper infrastructure and schedules

for backing up data. Business continuity should be
ensured by setting up disaster recovery sites.

q Proper record keeping facilities for legal purposes.

q Security infrastructure should be properly tested before

using the systems and applications for normal operations.
 Legal Issues
qBanks have to make enquiries about integrity
and reputation of the prospective customer.

qSecurity procedure adopted by banks for

authenticating users needs to be recognized by
law as a substitute for signature.

qUnder the present rule there is a compulsion on

banks to maintain secrecy and confidentiality of
customers accounts.

qVery little scope for the banks to act on stop-

payment instructions from the customers.
 Regulatory and Supervisory
Issues
qOnly such banks which are licensed and
supervised in India and have a physical presence
in India will be permitted to offer Internet banking
products to residents of India.

qThe products should be restricted to account

holders only

qThe services should only include local currency

products.

qThere should be three screen authentication

giving access to customers.
 Current news
Ø Banking system needs consolidation, says
OP Bhatt

ü To produce stronger player to fund globalizing Indian

Industry

ü Atleast 4 banks of SBI Bank size and two banks having

global scale

ü SBI merges its subsidiaries i.e. Bank of Saurashtra

ü Initiative to be taken by banks itself : FM

Ø RBI caps third-party ATM withdrawals:

ü Set a limit of Rs.10,000 per transaction

ü Five times per month

Ø RBI rejects plan to reopen Nanded bank

ü Ashok Chavan, CM, had sanctioned a Rs 110-crore grant.

ü Banking regulation act does not permit co- operative
bank to have ‘government grants’.
ü Raised the limit of the depositor withdrawals of deposits
from Rs.1000 to Rs. 3000.
Ø Nokia plans to launch mobile 'banking’

Ø The service, available 24 hours a day, will be rolled out from

early 2010.

Ø Kerala to set up first Islamic i-firm

Ø With a net corpus of Rs 500 crore, the Shariah-based

investment firm will roll out Islamic leasing in the first phase
and housing finance subsequently

Ø State government will permanently hold 11% stake in the

Ø Religare bids for ING's Asia assets:

ü Religare will be able to get a presence across Asia. The

pricing would depend on the asset composition and also
the sustainability of these assets
ü ING would like to go for multinational private unit.

Ø ICICI Bank for doubling returns; to be in top-5

listed cos
Ø Ambitious plans to double the returns to investors in
3yrs time.
Ø Share price has increased sharply from Rs 252.75 to Rs.
750.
Ø Cut down on wholesale deposits, focus on CASA, raise
fee income, cut operating costs and control credit losses.
Ø Don't count ADR, GDR to decide bank's nationality:
ICICI
Ø Under DIPP( Department of Industrial policies and promotion), if it
has more than 50% of indirect foreign investment to be a non
resident.

Ø ICICI Bank has little over 51% held by FIIs, 29.07% held through
ADRs alone.

Ø All villages to enjoy banking in two years

Ø Reserve Bank of India (RBI) to achieve financial inclusion
across the country with the help of business
correspondents (BCs).

Ø Will prefer acquiring a domestic bank over global: ICICI

BanK

Ø Our focus is to grow as the Indian corporate grows here, and even
international focus was always to grow with international
requirements of the Indian corporate
Ø Sangli bank and Bank of Madura
Ø Under DIPP( Department of Industrial policies and
promotion), if it has more than 50% of indirect
foreign investment to be a non resident.

Ø ICICI Bank has little over 51% held by FIIs, 29.07%

held through ADRs alone.