E – BANKING
M. Narayanan
Post Graduate and Research Department
of Commerce
Vivekananda College, Tiruvedakam West,
Madurai – 625234.

MEANING
E – Banking is a method of banking in which the customer
conducts transactions electronically via the internet.
It is an umbrella term for the banking process by which a
customer may perform banking transactions electronically
without visiting a branch of bank.
E - Banking implies performing basic banking transactions by
customers round clock globally through electronic media.
Virtual banking denotes the provision of banking and other
related services through the extensive use of Information
technology, without direct recourse to the bank by customers.

FEATURES AND TYPES OF VIRTUAL BANKING
The overwhelming reliance on information technology
The absence of physical bank branches to deliver banking services to the
customers.
Types
 Virtual banking services includes the Automated Teller Machine (ATM)
 Shared ATM networks
 Electronic Fund Transfer at point of sale (EFTPoS)
 Smart cards
 Stored Value cards
 Phone banking
 Home banking
 Internet banking
 Intranet banking

TRADITIONAL BANKING Vs E – BANKING
Basis of
Difference
Traditional Banking Internet Banking
Meaning
In this relationship between bank and Customer
establishes through branch network.
It refers to banking on internet
Presence Banks exist physically for serving the customers, Internet banks do not have physical presence as services are provided online.
Time
It consumes a lot of time as customers have to visit banks
to carry out bank transactions like — checking bank
balances, transferring money from one account to
another.
It does not consume time as customers do not have to visit banks to check bank
balances or to transfer money from one account to another. Customers can access
their account readily from anywhere with a computer and internet access.
Accessibility
People have to visit banks only during the working
hours.
Internet banking is available at any time and it provides 24 hours access.
Security
Traditional banking does not encounter e-security
threats.
Online banking is the tempting target for hackers. Security is one of the problems
faced by customers in accessing accounts through internet.
Finance Control
Customers who often travel abroad cannot pay close
attention and control of their finances.
Customers who often travel abroad can have greater control over their finances.
Expensive Customers have to spend money for visiting banks.
Customers do not have to spend money for visiting banks. They can avoid bank
charges that may be charged for certain teller transactions or when they pay bills
electronically — directly from their account to the merchant. It helps to save money
on postal charges.
Cost
The cost incurred by traditional banks includes a lot of
operating and fixed costs.
Such costs are eliminated as the banks do not have physical presence.
Customer
Service
ln traditional banks, the employees and clerical staff of
the bank can attend only few customers at a time.
In online banking, the customers do not have to stand in queues to carry out
certain bank transactions.
Contact
Customers can have face to face contact in traditional
Customers can have only electronic contacts.

ELECTRONIC DELIVERY CHANNELS
E-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive
communication channels.
E-banking means electronic banking, whenever bank serving their customer
through electronically and when receipts and payments and other banking
transactions can make through computer network it’s called e-banking.
 ATMs
 Smart Cards
 Telebanking
 Internet banking

1. ATM (Automated Teller Machine)
 These machines are available at bank and public places. Banks issues their customer
ATM cards as per request. ATM holders use this card for quick money any time means
24 hours and 365 days. Through this machine, card holder can deposit limited amount.
Card holder can use this card in another bank ATM. Some bank charge nominal fee per
transaction
 ATM is a computerized telecommunications device that provides a financial institution’s
customers a method of financial transactions in a public space without the need for a
human clerk or bank teller. Most banks now have more ATMs than branches, and ATMs
are providing a wider range of services to a wider range of users. For example in Hong
Kong, most ATMs enable anyone to deposit cash to any customer of the bank’s account
by feeding in the notes and entering the account number to be credited. Also, most
ATMs enable card holders from other banks to get their account balance and withdraw
cash, even if the card is issued by a foreign bank

FEATURES OF ATM
The modern ATMs are very versatile. It not only allows you to withdraw
cash but it also allows depositing money, transferring money, payment of
several bills, generation of statements and many more.
ATMs are very user-friendly machines. Anyone can use it whether they are
educated or are a specially-abled person. It has become easy with the
introduction of the biometric identification scanner.
ATMs are multilingual devices. India is a country with different types of
people speaking different languages. So, the machine being multilingual is
very helpful as everybody can use it in their own preferred language.
ATMs have now started providing receipts via email, which eliminates the
use of paper.

ATM LABELS
The ATM deposit machine can be categorized into a few labels. These
labels distinguish the different uses of an ATM.
Green Label ATMs are used for agricultural purposes.
Yellow Label ATMs are used for e-commerce transactions.
Orange Label ATMs are used for share transactions.
Pink Label ATMs are designed for females to help them eliminate the long
queues and waiting time.
As introduced by the TATA group, White Label ATMs are owned by non-
bank entities, not a particular bank.
Brown Label Banks are operated by a third party other than a bank.

ADVANTAGES OF ATMS
 Convenience
 24x7 Service
 Takes the Edge Off the Bank
 Accessibility
 Saviour in Crisis

2. SMART CARD
The smart card is all about changing a tiny rectangular piece of card
in to ‘smart’. These cards are so convenient to be fitted in our
wallets or back pockets. This is where the foremost advantage of
smart card can be seen.
These cards are used by banks, shops, educational institutions,
offices etc. to carry out different transaction purposes. Though these
cards are available in different sizes and forms, they all serve the
same purpose i.e., the technology that drives them.
Smart card have enabled the security and convenience of any
transactions. The technology used behind help users to store unique
personal details

3. PREPAID PAYMENT INSTRUMENTS (PPIs)
RBI as per the guidelines provided under the Payment and
Settlement Act, 2005 defined Prepaid Payment Instruments (PPIs)
as instruments of payment that facilitate buying of goods and
services, including the transfer of funds, financial service and
remittances, against the value stored within or on the instrument.
The value stored in the instrument is represented by the value that
has already been paid for by the holder or the instrument by any
method such as, by cash, by debit from a bank account, credit card
or even from other PPIs. PPIs can come in the form of payment
wallets, smart cards, magnetic chips, vouchers, mobile wallets etc.
any instrument that can be used to access a prepaid amount is a
PPI.

4. TELE BANKING
Telephone banking is a service provided by a bank or other
financial institution, that enables customers to perform financial
transactions over the telephone, without the need to visit a bank
branch or automated teller machine.
Telephone banking times can be longer than branch opening
times, and some financial institutions offer the service on a 24
hour basis. From the bank’s point of view, telephone banking
reduces the cost of handling transactions by reducing the need
for customers to visit a bank branch for non-cash withdrawal
and deposit transactions.

THANK YOU