E-Banking in India

E-Banking Introduction

E-banking is a generic term for delivery of banking services

and products through electronic channels, such as the
telephone, the internet, the cell phone, etc. The concept
and scope of E-banking is still evolving. It facilitates an
effective payment and accounting system thereby
enhancing the speed of delivery of banking services
considerably.
 Indian Banks on WEB

The banking industry in India is facing unprecedented competition from non-

traditional banking institutions, which now offer banking and financial
services over the Internet. The deregulation of the banking industry coupled
with the emergence of new technologies, are enabling new competitors to
enter the financial services market quickly and efficiently.

 Throughout the country, the Internet Banking is in the nascent stage of

development (only 50 banks are offering varied kind of Internet banking services).
 In general, these Internet sites offer only the most basic services. 55% are so
called 'entry level' sites, offering little more than company information and basic
marketing materials. Only 8% offer 'advanced transactions' such as online funds
transfer, transactions & cash management services.
 Foreign & Private banks are much advanced in terms of the number of sites &
their level of development.
 Objectives of E-Banking

Main objectives of E-banking includes

1. Facilitate the offering of more services

2. Increase customer loyalty
3. Attract new customers
4. Provide services offered by competitors
5. Reduce customer attrition
6. Improve customer access
 Recent Technological developments in Indian
Banking

Advantages previously held by large financial institutions have shrunk

considerably. The Internet has leveled the playing field and afforded open
access to customers in the global marketplace. Access to one's accounts at
anytime and from any location via the World Wide Web is a convenience
unknown a short time ago. Thus, a bank's Internet presence transforms from
'brouchreware' status to 'Internet banking' status

Several initiatives taken by the government of India, as well as the Reserve

Bank of India (RBI), have facilitated the development of E-banking in
India. The government of India enacted the IT Act, 2000, which provides
legal recognition to electronic transactions and other means of electronic
commerce. The RBI has been preparing to upgrade itself as a regulator and
supervisor of the technologically dominated financial system. It issued
guidelines on risks and control in computer and telecommunication system
to all banks, advising them to evaluate the risks inherent in the systems and
put in place adequate control mechanisms to address these risks.
 Credit Cards

A credit card is part of a system of payments named after the small

plastic card issued to users of the system. It is a card entitling its holder
to buy goods and services based on the holder's promise to pay for
these goods and services.[1] The issuer of the card grants a line of
credit to the consumer (or the user) from which the user can borrow
money for payment to a merchant or as a cash advance to the user.

A credit card is different from a charge card, where a charge card requires
the balance to be paid in full each month. In contrast, credit cards allow
the consumers to 'revolve' their balance, at the cost of having interest
charged. Most credit cards are issued by local banks or credit unions,
and are the shape and size specified by the ISO 7810 standard.
 Automated Teller Machine

An automated teller machine (ATM) is a computerized telecommunications

device that provides the customers of a financial institution with access to
financial transactions in a public space without the need for a human clerk
or bank teller. On most modern ATMs, the customer is identified by
inserting a plastic ATM card with a magnetic stripe or a plastic smartcard
with a chip, that contains a unique card number and some security
information, such as an expiration date or CVC. Security is provided by the
customer entering a personal identification number (PIN).
Using an ATM, customers can access their bank accounts in order to make
cash withdrawals and check their account balances as well as purchasing
mobile cell phone prepaid credit. ATMs are known by various other names
including automated banking machine, money machine, bank machine,
cash machine, hole-in-the-wall, cashpoint,
 Equated Monthly Installment - EMI

A fixed payment amount made by a borrower to a lender at a specified date

each calendar month. Equated monthly installments are used to pay off both
interest and principal each month, so that over a specified number of years,
the loan is paid off in full.
With most common types of loans, such as real estate mortgages, the borrower
makes fixed periodic payments to the lender over the course of several years
with the goal of retiring the loan. EMIs differ from variable payment plans,
in which the borrower is able to pay higher payment amounts at his or
her discretion. In EMI plans, borrowers are usually only allowed one fixed
payment amount each month.

The benefit of an EMI for borrowers is that they know precisely how much
money they will need to pay toward their loan each month, making the
personal budgeting process easier.
 Debit Cards

A debit card (also known as a bank card or check card) is

a plastic card which provides an alternative payment
method to cash when making purchases. Functionally, it
can be called an electronic check, as the funds are
withdrawn directly from the bank account . In some cases,
the cards are designed exclusively for use on the Internet,
and so there is no physical card