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Whatis online banking?
Online banking, also known as internet banking,
e-banking or virtual banking
It is an electronic payment system that
enables customers of a bank or other
financial institution to conduct a range
of financial institution through the
financial institution's website.
Why Online Banking:
Internet banking is becoming more and more popular among
To provide more Quality Information on Internet Banking.
Make the concept and procedure more familiar.
To warn against its negative effects.
Chase Manhattan Chemical
Offered home banking using the video text system.
Online Banking Started in 1981 when four of the city’s
History in India
ICICI Was the first bank to initiate the internet banking
Revolution as early as 1997 under the brand name
ICICI bank kicked off online banking way back in1996.
But even for the internet as a whole ,1996 to 1998
marked the adoption phase ,while usage increase only
in 1999 due to lower ISP charges ,increase PC
penetration and a technology friendly atmosphere.
A bank customer can perform some non- transactional
task through online banking including-
Viewing account balance
Viewing recent transaction
Downloading bank statement
Viewing image of paid cheques.
Ordering cheque books
Downloading application for M-banking ,E-banking.
Bank Customer can transact banking tasks through
online banking, including-
Fund transfer between the customer’s linked account
Paying third parties, including bill payment
Investment Purchase or sale
Loan application and transaction, such as repayments of enrollments.
Any sum of Money can be transferred using the NEFT system with a
maximum Cap of Rs.10,00,000
NEFT transaction can be ordered anytime you want , even on holidays
except for Sundays which are designated bank holidays.
There are 12 settlement batches operating at present between the time slot
of 8 A.M to 7 P.M. on week days and from 8 A.M. to 1 P.M. On Saturday with
6 settlement batches.
RTGS as the name suggests is a real time fund transfer system which
facilities You to transfer funds from on bank to another in real time on
The transaction is not put on a waiting list and cleared out instantly.
The minimum value that can be transferred using RTGS is Rs. 2 lac and
The RTGS payment gateway, maintained by RBI make transaction between
IMPS is offered on all the cellular device via mobile banking or through
To be able to transfer money via IMPS route you must register for IMPS with
On obtaining the mobile phone Identifier and MPIN from the bank you can
login or make the request via SMS to transfer a certain amount to a
beneficiary. Meanwhile the beneficiary must link his/her mobile number
with his /her respective A/c and obtain the MMID from the bank to be able
to receive money.
This is the basic level of Internet banking
In this level, bank has marketing information about the banking products
and services on stand alone server
This level of internet banking can be provided by the banks or outsourced.
This is meant for marketing purposes only ,and there is no connection to the
Bank’s main computer systems.
This type of internet banking system allows some information between
The bank’s system and the customer.
The interaction may be limited to electronic mail ,account inquiry, loan
application , or static file update(name and address change).
Communicative online banking may connect with the bank’s main computer
This level of internet banking allows customer to execute
Customer transaction can include accessing accounts, paying bills,
Transforming Fund etc.
Since a path typically exist between the server and
the banks or outsourced internal network ,this is
the highest risk architecture and must have
the Strongest controls.
Advantages of Online Banking
Mobility- Internet banking also includes mobile capabilities. New
applications are continually being created to expand and improve
this capability on smart-phones and other mobile device
Convenience- Unlike Your Corner bank ,online banking sites never
close; they're available 24 hours a day, seven days a week, and they’re
only a mouse click away.
Ubiquity: If you’re out of state or even out of the country when a
Money problem arises, you can log on instantly to you online bank and take
care Of business,24/7.
Advantages of Online Banking
Transaction speed: online bank sites generally execute and confirm
transaction at or quicker than ATM processing speed.
Efficiency: You can access and manage all of your bank accounts,
Including IRAs, CDs, even securities, from one secure site.
Effectiveness: Many online banking sites now offer sophisticated tools,
including account aggregation ,stock quotes ,rates alert and portfolio
managing program to help you manage all of your assets more effectively.
Customer Service-If you bank at a traditional bank, you can go to the bank
and speak to someone face to face about your problem but, with an internet
bank, you will likely to spend a lot of time on the phone being passer around
and placed on hold.
Accessibility-If the Internet goes down in your area or the area of the
banking office ,you will be unable to access your accounts. This includes
being unable to withdraw Money from ATMs or to use your debit card.
Learning Curve: Banking sites can be difficult to navigate at first. Plan to
invest Some time and/or read the tutorials in order to become comfortable in
your virtual body.
Setting-up an account-In order to register for your online bank program, you
will Probably have to provide ID and sign a format at a bank branch.
Site Changes and upgrades-Even the largest bank periodically upgrade thei
Online program, added new feature in unfamiliar places.
Security Concern-Even Through E-Banking heavily encrypted, through
developing Technology, it’s hard to rule out hacker who may access your
1-Authentication-This means ensuring customers are verified and
their identifies established before conducting business over the
2-Non-repudiation-Bank should make certain that customer who
transact on the Internet cannot later deny having originated the
communicate this to customer. Customers must
be allowed opt-out options, and great care must
be Exercised before sharing Customer information
with outside entities.
4-Availability- Bank should have business continuity and contingency
Planning process to help ensure continuous availability of internet
5-Services-This is challenging because of the potential for high
transaction volume and the demand for 24 hours , seven days a
Online banking is changing the banking industry and is having
the major effects on banking relationship
Online banking , thus, ” now is more of a norm rather than an
exception in many developed Countries” due to the fact that
it is economical way of providing banking services.
Banking is now no longer confined to the traditional brick and
mortar branches, where one has to be at the branch in person,
to withdraw cash or deposit a cheque or request a statement
Providing online banking is increasingly becoming a
“need to have” than a ”nice to have ” services.