Professional Documents
Culture Documents
E - Banking in India
E - Banking in India
E-BANKING IN INDIA
RESEARCH METHODOLOGY
The primary source of the information in this research study is the secondary data.
The available information on internet regarding the E: Banking has been
extensively used to complete the dissertation report. All the available Journals,
Articles, papers provided necessary information to the group to finalize the
research study. The group worked hard to collect all the necessary data to frame
this report.
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INTRODUCTION
Electronic banking is an umbrella term for the process by which a customer may
perform banking transactions electronically without visiting a brick-and-mortar
institution. The following terms all refer to one form or another of electronic
banking: personal computer (PC) banking, Internet banking, virtual banking,
online banking, home banking, remote electronic banking, and phone banking. PC
banking and Internet or online banking is the most frequently used designations.
Customers access e-banking services using an intelligent electronic device, such as
a personal computer (PC), personal digital assistant (PDA), automated teller
machine (ATM), kiosk, or Touch Tone telephone.
The advent of Internet has initiated an electronic revolution in the global banking
sector. The dynamic and flexible nature of this communication channel as well as
its ubiquitous reach has helped in leveraging a variety of banking activities.
Electronic banking, also known as electronic funds transfer (EFT), is simply the
use of electronic means to transfer funds directly from one account to another,
rather than by Cheque or cash.
E-Banking has revolutionized to days banking by making it very fast, easy and far
reaching. The expectations are growing at very fast speed on the E-Banking
services. With the result, it is demanding more attention for study from various
people around the globe. Huge volume of research has been done and is still going
on different issues of E-banking. The research has helped the customers, the
bankers, and other dependent institutions in understanding various aspects of Ebanking. E-Banking has over-performed all the obsolete banking practices and the
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threat of security measures has also been growing with it. Researchers are trying to
find out the ways to cover up this risk in the E-Banking and make it more
sophisticated for everyone.
The present research study has been done in this context only. There were huge
amount of issues related to E-Banking available on the internet. But our study has
emphasized on threats and the preventive measures to accept the challenging
situations. Due, to the presence of time constraint, the study is based upon limited
papers on the same issue.
This allows customers to do their banking outside of bank hours and from
anywhere where Internet access is available. In most cases a web browser such as
Internet Explorer or Mozilla Firefox is utilized and any normal Internet connection
is suitable. No special software or hardware is usually needed.
Like any other business you have to select a bank that has a good reputation and
thats very important because you will be providing them with your account
number and password. It is also advisable to save or print any transaction done on
your behalf.
Online banking isn't out to change your money habits. Instead, it uses today's
computer technology to give you the option of bypassing the time-consuming,
paper-based aspects of traditional banking in order to manage your finances more
quickly and efficiently.
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DEFINITION
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 includes the systems that enable financial institution customers,
individuals or businesses, to access accounts, transact business, or obtain
information on financial products and services through a public or private network,
including the Internet.
Access of e-banking services is possible through using an intelligent electronic
device, such as a personal computer (PC), personal digital assistant (PDA),
automated teller machine (ATM), kiosk, or Touch Tone telephone. While the risks
and controls are similar for the various e-banking access channels, this booklet
focuses specifically on Internet-based services due to the Internets widely
accessible public network.
Electronic banking, also known as electronic funds transfer (EFT), is simply the
use of electronic means to transfer funds directly from one account to another,
rather than by Cheque or cash. You can use electronic funds transfer to:
Have your paycheck deposited directly into your bank or credit union checking
account.
Withdraw money from your checking account from an ATM machine with a
personal identification number (PIN), at your convenience, day or night.
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Instruct your bank or credit union to automatically pay certain monthly bills
from your account, such as your auto loan or your mortgage payment.
Have the bank or credit union transfer funds each month from your checking
account to your mutual fund account.
Have your government social security benefits check or your tax refund
deposited directly into your checking account.
Buy groceries, gasoline and other purchases at the point-of-sale, using a check
card rather than cash, credit or a personal check.
Use a smart card with a prepaid amount of money embedded in it for use
instead of cash at a pay phone, expressway road toll, or on college campuses at
the library's photocopy machine or bookstores.
Use your computer and personal finance software to coordinate your total
personal financial management process, integrating data and activities related
to your income, spending, saving, investing, record keeping, bill-paying and
taxes,
along
with
basic
financial
analysis
and
decision
making.
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FEATURES OF "E-BANKING"
You can do all of your banking 24 hours a day, seven days a week.
Internet banking is simply a means of providing Customers with more
banking choices.
Many of the transactions you do over-the-counter can now be done on
the Internet, on a computer, in your home - or anywhere else in the
world.
E-banking provides a range of convenient online banking services:
Transaction History - an online list of your transactions with a
convenient search option.
Bill payment provider.
Pay all your bills online.
Pay Anyone - transfer funds to any account.
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BENEFITS OF E-BANKING
In recent time E-banking has spread rapidly all over the globe. All Banks are
making greater use of E-banking facilities to provide better service and to excel in
competition. The spread of E-banking has also greatly benefited the ordinary
customer in general and corporate world in particular.
The following points summarize benefits of E-Banking.
Benefits to Consumers:
General consumers have been significantly affected in a positive manner by Ebanking. Many of the ordinary tasks have now been fully automated resulting in
greater ease and comfort.
Customers account is extremely accesses able with an online account.
Customer can withdraw can at any time through ATMs that are now widely
available throughout the country.
Beside withdrawing cash customers can also have mini banks statements, balance
inquiry at these ATMs
Through Internet banking customer can operate his account while sitting in his
office or home. There is no need to go to the bank in person for such matter.
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E banking has also greatly helped in payment of utility bill. Now there is no need
to stand in long queues outside banks for his purpose.
The Growth of credit card usage also owes greatly to E-banking. Now a customer
can shop worldwide without any need of carrying paper money with him.
Banks are available 24 hours a day, seven days a week and they are only a mouse
click away.
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Electronic banking has also helped bank in proper documentation of their records
and transactions.
The reach and delivery capabilities of computer networks, such as the Internet,
are far better than any branch network.
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ONLINE BANKING
II.
MOBILE BANKING
III.
TELE BANKING
IV.
V.
VI.
I.
DEBIT CARD
CREDIT CARD
ONLINE BANKING:
Since the internet has become a popular place to buy and sell goods, online
banking services have made their way into most homes. Easier to pay bills, manage
money, and transfer money to other accounts, internet banking is a convenient way
to handle money. Many employers now have direct deposit, which makes it easier
to put money into one's account. No more trips to the bank every day. The money
is in the account the night before and is available for use on next morning. Most
banks now offer some type of banking services on the net.
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if money is taken from your account without your permission provided you have not
acted fraudulently or negligently.
7] Security
Admittedly, such a service requires complete privacy protection and security of the
highest nature. We provide a completely secure environment, using 128-bit
encryption SSL (Secure Sockets Layer), digitally certified by Verisign. 128-bit SSL
guarantees world-class security for Internet and e-commerce applications.
Disadvantages
The world has come from far and we are every day digging into the unknown, what
was unthinkable then is now a practice. Today, you can bank right from the comfort
of your home and benefits come with it. However, though internet banking is such a
good and desirable innocent, it has some disadvantages as listed:
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3] Learning difficulties
Banking sites can be difficult to navigate at first. Getting acquitted with the banking
sites software may require some time to read the tutorials in order to become
comfortable in your virtual lobby.
4] Site changes and upgrades
Even the largest banks periodically upgrade their online programs, adding new
features in unfamiliar places. In some cases, you may have to re-enter account
information.
5] Customer service
There is no personal contact with any of the staff, and if talk to any staff through the
telephone, you have guarantee you are talking to the best person available.
6] Internet account
You need to get an account with an Internet Service Provider (ISP) which may be
another hectic experience.
7] Security concern
Even though online banking sites are heavily encrypted, with the developing
technology, its hard to rule out the "hackers" who may access your bank accounts.
8] Switching banks
This can be more cumbersome online than in person.
9] Money usage
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You cant spend your money from the online bank account as you wish, in the end;
you will need to go to an ATM to withdraw money for usage.
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II.
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MOBILE BANKING:
Mobile banking through cell phone is really catching up. Now you can access your
account, transfer funds or make payments with your mobile. Mobile connectivity is
vast and this makes mobile banking very successful.
Advantages of
Mobile Banking
Mobile banking through cell phone offers many advantages for customers as well
as banks. Some of them are as follows:
1] You can make transactions or pay bills anytime. It saves a lot of time.
2] Mobile banking thorough cell phone is user friendly. The interface is also very
simple. You just need to follow the instructions to make the transaction. It also saves
the record of any transactions made.
3] Cell phone banking is cost effective. Various banks provide this facility at a lower
cost as compared to banking by self.
4] Banking through mobile reduces the risk of fraud. You will get an SMS whenever
there is an activity in your account. This includes deposits, cash withdrawals, funds
transfer etc. You will get a notice as soon as any amount is deducted or deposited in
your account.
5] Banking through cell phone benefits the banks too. It cuts down on the cost of
tele- banking and is more economical.
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6] Mobile banking through cell phone is very advantageous to the banks as it serves
as a guide in order to help the banks improve their customer care services.
7] Banks can be in touch with their clients with mobile banking.
8] Banks can also promote and sell their products and services like credit cards,
loans etc. to a specific group of customers.
9] Various banking services like Account Balance Enquiry , Credit/Debit Alerts, Bill
Payment Alerts, Transaction History, Fund Transfer Facilities, Minimum Balance
Alerts etc. can be accessed from your mobile.
Mobile banking has become really popular owing to the convenience that it gives
its customers. You can access your account, pay bills, and make cash transfers
through cell phone banking. It offers many benefits over internet banking and
banking in person. With the wide range of mobile connectivity, mobile banking
through cell phone can be accessed by anyone.
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you can download onto your phone. Other banks offer balance information via text
messaging. How you access your banking information is really is a matter of cell
phone compatibility.
2] Account numbers are not displayed over wireless cell phone connections
When you log into your account from your cell phone you will not be asked for
account information and once you access your account the number is not visible.
Such precautions make it less likely (although not impossible) for your sensitive
financial information to be breached by hackers.
3] The servers of most banks are encrypted for wireless transactions
Although safety does vary from bank to bank, if handled correctly, wireless
transactions can actually be more secure than wired or landline connections due to
the use of encrypted serversthough, again, there is no guarantee.
4] Mobile banking is generally offered free by your bank
Most banks are not charging their customers additional fees for this service.
However, your cell phone bill will increase due to Internet usage. Some mobile
banking programs also allow customers to pay their bills from their phone. In this
regard,
the
service
might
actually
be
less
expensive
than
online bill
payment programs.
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TELE BANKING:
Tele bank helps track and control finances, all from the comfort of home or office.
Designed to save time and money, Tele bank allows 24 hour access to bank
accounts via the telephone. You can access current balances, transfer money
between accounts, and much more. It is safe and secureand free!
United Bank of India offers Tele-Banking Services to its Retail Customers. The
IVR (Interactive Voice Response) supports three languages Hindi, English &
Bengali. The facility is available for Savings, Current, Cash Credit, Overdraft,
Deposit and Loan accounts.
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A wallet-sized plastic Automatic Teller Machine (ATM) card linked to your bank
account makes financial transactions a breeze by eliminating the waste of writing
checks or the dangers of carrying large sums of cash. Also known as a debit card,
ATM cards benefit both consumers and the banking institution where they
originated.
On most modern ATMs, the customer is identified by inserting a plastic ATM
card with a magnetic or a plastic smart card with a chip, that contains a unique card
number
and
some
security
information
such
as
an
expiration
date
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best possible official exchange rates for foreign travelers, and are also widely used
for this purpose.
Benefits of ATM
1] Benefits for Consumers
Use an ATM card to keep accurate records of banking transactions. Monthly
statements, usually available online or printed and mailed, itemize each transaction
made with the card. This benefit leads to fewer accidental overdrafts, and provides a
visual record of spending habits, unlike using cash. Transactions are processed
quickly with an ATM card. Sliding the card is faster than writing a check, more
accurate than paying with cash (since change can be miscounted), and makes some
transactions quicker. For example, using an ATM card at a gasoline pump eliminates
the hassle of standing in line in a convenience store to complete the sale. After a
quick swipe and approval, a receipt is often printed at the gas pump for user
convenience. ATM cards are usually free, according to Merchant's State Bank.
Unlike checks, many financial institutions do not charge their customers for an ATM
card.
2] Benefits for Businesses
When consumers use ATM cards to pay for purchases, funds are deposited quickly
into the business account. In as little as 48 hours, businesses will have access to
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money from ATM card transactions. Checks can take up to seven days to clear,
putting a hold on accessible funds. Business owners pay to offer the convenience of
credit card transactions for their customers. For each transaction, a small percentage
is paid to the credit card company as a convenience fee. ATM card transactions are a
win-win for both the businesses that accept the ATM card and the consumer. When
consumers pay retailers with an ATM card, the business owner doesn't have to pay a
fee. And, consumers don't have to pay interest or annual fees when using an ATM
card, like they would with use of a credit card.
3] Benefits for Travel
When you're trying to pack light, leave the checkbook and stack of paper money at
home. One simple ATM card can pay for purchases with funds directly withdrawn
from your checking account. The small card is simple to tuck in a small purse or in
a snug pocket. When cash is needed, get a better exchange rate in foreign countries
by using an ATM card. Foreign ATM machines offer users access to the wholesale
exchange rate, which is often less expensive than paying service fees when
exchanging cash or travelers checks in a foreign bank or currency exchange office.
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1] Security
Unlike bank tellers, ATMs do not require the person performing the transaction to
present picture identification. Rather, the person must only insert a bank card and
enter a personal identification number. If the bank card is stolen and the number
ascertained, an unauthorized person can easily access the account.
2] Inability to Perform Complex Transactions
ATMs can only perform relatively basic transactions. This means that people who
need to complete these longer transactions will be forced to use the teller,
restricting use of the ATM for people who need to complete simple business. In
this sense, the ATM Is rather like the express line in a supermarket--faster for
some, but unavailable to others.
3] Fees
With the advent of ATMs came ATM fees. Not only do banks of which you are not
a member charge fees for the use of their ATMs, but users are often charged
surreptitious fees by their own banks for using other banks' ATMs--meaning the
customer is docked twice for the same transaction.
4] Privacy
Unlike banks, in which security guards and tellers are present to ensure the person
performing a transaction receives privacy, there is no such guarantee when using
an ATM. People may try to spy on users as delicate information appears on the
screen, without the user being aware.
5] Difficulty of Use
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V.
DEBIT CARD:
A debit card (also known as a bank card or check card) is a plastic card that
provides the cardholder electronic access to his or her bank account(s) at a
financial institution. Some cards have a value with which a payment is made, while
most relay a message to the cardholder's bank to withdraw funds from a designated
account in favor of the payee's designated bank account. The card can be used as
an alternative payment method to cash when making purchases. In some cases,
the primary account number is assigned exclusively for use on the Internet and
there is no physical card.
In many countries, the use of debit cards has become so widespread that their
volume has overtaken or entirely replaced Cheque and, in some instances, cash
transactions. The development of debit cards, unlike credit cards and charge cards,
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If you return merchandise or cancel services paid for with a debit card, the
transaction will be treated as if it were made with cash or a check.
Customers usually get cash back for on-line purchases; for off-line
transactions, the amount is credited to your account.
Most ATMs will allow you to get a cash advance against the line of credit
on your credit card, using your credit card and a separate PIN. You do not
necessarily have to have a bank account to do this.
Disadvantages of debit cards
Unlike a credit card, debit card transactions give you no grace period. They
are a quick, pay-now deal.
They can make balancing your account tricky if you are not fastidious about
keeping receipts and recording transactions in a timely fashion. It is easy to
forget, for example, when you pay at the gas pump with a debit card and
drive off without your receipt.
Using a debit card may mean you have less protection than you would with
a credit card for goods that are never delivered, are defective or were
misrepresented. But, as with credit cards, you can dispute unauthorized
charges or other mistakes within 60 days. Contact your bank if a problem
with a merchant cannot be resolved.
Fees -- The convenience can be costly, especially when using an ATM that
is not affiliated with your bank.
VI.
CREDIT CARD:
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Disadvantages
You may become an impulsive buyer and tend to overspend because of the
ease of using credit cards. Cards can encourage the purchasing of goods and
services you cannot really afford.
Credit cards are a relatively expensive way of obtaining credit if you don't
use them carefully, especially because of the high interest rates and other
costs.
Lost or stolen cards may result in some unwanted expense and
inconvenience.
The use of a large number of credit cards can get you even further into debt.
Using a credit card, especially remotely, introduces an element of risk as the
card details may fall into the wrong hands resulting in fraudulent purchases
on the card. Fraudulent or unauthorized charges may take months to
dispute, investigate, and resolve.
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opportunities for banks to expand their client base and rationalize their business
while the customers received value in the form of savings in time and money.
LOOKING FORWARD
An old Chinese saying goes: If you don't know where you are going - you will
never get there. Globally, the financial sector is metamorphosing under the impact
of competitive, regulatory and technological forces. The banking sector is currently
in a transition phase with re-alignment, mergers and entry of new players from
different industry is becoming common. Many countries including are deregulating their banking sector and government policies no longer form an entry
barrier to banks competitors.
Technology has leveled the playing field: the bargaining power of consumers is
increasing, switching costs are becoming lower and consumer loyalties are harder
to retain. Primary goal of the banking sector including every Bank is mainly to
make profit, which in turn is ploughed back to increase business and reach, and
pay dividends or share profits to the stakeholders. This is perfectly correct, yet
generic goal. More over the product (schemes) differentiation is very difficult for
banks as most of the products sold are constrained by legal or industry regulations.
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Now, if you are already thinking about Technology as a tool in Banking you could
probably set some of these goals:
Selling financial products and services
Cutting operational costs
Branding & Market recognition
Keeping profitable customers
Every day more and more people are turning to the Technology for their personal
banking. It is a safe, convenient way to shop for financial services, maintain bank
accounts and conduct business 24 hours a day. Every one of us has always enjoyed
a special relationship with their neighborhood bank. Why are so many people
suddenly choosing their personal computers as the new way to view and manage
their money?
Quite simple - because it is a valuable option to have. Bank customers can save
time by banking online. There is no need to stand in one more line to perform the
most basic transactions when they can be done quickly from the desktop PC
anytime, day or night. But even with more complicated transactions or investment
decisions, people like having direct control over their finances themselves. They
find it convenient to access all of their financial information in one place. Ease of
use is one of the most important factors. Navigation through online banking should
be simple and intuitive. Banks need to appeal to customers who may not be
technologically sophisticated, and should not require an engineering degree to get
started or use the service. Customers also choose banks whose online services are
reliable. Benefits for the bank should always reflect benefits for the customer of
banking services.
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INTERNATIONAL EXPERIENCE
Internet banking has presented regulators and supervisors worldwide with new
challenges. The Internet, by its very nature, reaches across borders and is, for this
reason, engaging the attention of regulatory and supervisory authorities all over the
world.
In the USA, the number of thrift institutions and commercial banks with
transactional web-sites is 1275 or 12% of all banks and thrifts. Approximately 78%
of all commercial banks with more than $5 billion in assets, 43% of banks with
$500 million to $5 billion in assets, and 10% of banks under $ 500 million in assets
have transactional web-sites.
Several new business process and technological advances such as Electronic Bill
Presentment and Payment (EBPP), handheld access devices such as Personal
Digital Assistants (PDAs), Internet Telephone and Wireless Communication
channels and phones are emerging in the US market.
For retail e-commerce in the US, most payments made over the Internet are
currently completed with credit cards and are cleared and settled through existing
credit card clearing and settlement systems. Efforts are under way to make it easier
to use debit cards, Cheque and the Automated Clearing House (ACH) to make
payments over the Internet. Versions of e-money, smart cards, e-Cheque and other
innovations are being experimented with to support retail payments over the
Internet.
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one specified gateway in order to ensure rigorous access control measures at the
user level. The system will have various levels of security, viz., Access security,
128 bit cryptography, firewall, certification etc. Further, Generic Architecture, both
domestic and cross border, aimed at providing inter-connectivity across banks has
been accepted for implementation by RBI. Following a reference made this year, in
the Monetary and Credit Policy statement of the Governor, banks have been
advised to develop domestic generic model in their computerization plans to ensure
seamless integration. The abovementioned efforts would enable online banking to
become more secure and efficient.
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SECURITY MEASURES
Protection through single password authentication, as is the case in most secure
Internet shopping sites, is not considered secure enough for personal online
banking applications in some countries. Online banking user interfaces are secure
sites (generally employing the https protocol) and traffic of all information including the password - is encrypted, making it next to impossible for a third party
to obtain or modify information after it is sent. However, encryption alone does not
rule out the possibility of hackers gaining access to vulnerable home PCs and
intercepting the password as it is typed in (key logging). There is also the danger of
password cracking and physical theft of passwords written down by careless users.
Many online banking services therefore impose a second layer of security.
Strategies vary, but a common method is the use of transaction numbers, or Tans,
which are essentially single, use passwords. Another strategy is the use of two
passwords, only random parts of which are entered at the start of every online
banking session. This is however slightly less secure than the TAN alternative and
more inconvenient for the user. A third option, used in many European countries
and currently being trialled in the UK is providing customers with security token
devices capable of generating single use passwords unique to the customer's token
(this is called two-factor authentication or 2FA). Another option is using digital
certificates, which digitally sign or authenticate the transactions, by linking them to
the physical device (e.g. computer, mobile phone, etc.). While most online banking
in the United States still uses single password protection, the FDIC has issued
regulations requiring that banks implement more secure authentication
mechanisms by the end of the year 2006.
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Reserve Bank has brought out a set of operating guidelines for adoption by
banks.
For the purpose of these Guidelines, mobile banking transactions is undertaking
banking transactions using mobile phones by bank customers that involve
credit/debit to their accounts. It also covers accessing the bank accounts by
customers
for
non-monetary
transactions
like
balance
enquiry
etc.
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Banks offering mobile banking service must ensure that customers having
mobile phones of any network operator is in a position to avail of the
service. Restriction, if any, to the customers of particular mobile operator(s)
is permissible only during the initial stages of offering the service, up to a
maximum period of six months subject to review.
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7. Transaction limit
A per transaction limit of Rs. 2500/- shall be imposed on all Mobile
Banking transactions. Subject to an overall cap of Rs. 5000/- per day, per
customer.
Banks may also put in place monthly transaction limit depending on the
banks own risk perception of the customer.
8. Board approval
Approval of the Board of Directors (Local Board in case of foreign banks)
for the product as also the related security policies must be obtained before
launching the scheme.
9. Approval of Reserve Bank of India
Banks wishing to provide mobile banking services shall seek prior one time
approval of the Reserve Bank of India, by furnishing full details of the
proposal.
10. Security Precautions
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out on your bill payments due to lack of time. Most interestingly, the bank does not
charge customers for online bill payment.
Fund transfer
You can transfer any amount from one account to another of the same or any
another bank. Customers can send money anywhere in India. Once you login to
your account, you need to mention the payees account number, his bank and the
branch. The transfer will take place in a day or so, whereas in a traditional method,
it takes about three working days. ICICI Bank says that online bill payment service
and fund transfer facility have been their most popular online services.
Credit card customers
Credit card users have a lot in store. With Internet banking, customers can not only
pay their credit card bills online but also get a loan on their cards. Not just this,
they can also apply for an additional card, request a credit line increase and God
forbid if you lose your credit card, you can report lost card online.
Railway pass
The bank would just charge Rs 10 + 12.24 per cent of service tax. This is
something that would interest all the aam janta. Indian Railways has tied up with
ICICI bank and you can now make your railway pass for local trains online. The
pass will be delivered to you at your doorstep. But the facility is limited to
Mumbai, Thane, Nashik, Surat
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E-BANKING IN INDIA
In spite of so many facilities that Internet banking offers us, we still seem to trust
our traditional method of banking and is reluctant to use online banking. But here
are few cases where Internet banking will turn out to be a better option in terms of
saving your money.
'Stop payment' done through Internet banking will not cost any extra fees but when
done through the branch, the bank may charge you Rs 50 per Cheque plus the
service tax.
Through Internet banking, you can check your transactions at any time of the day,
and as many times as you want to.
On the other hand, in a traditional method, you get quarterly statements from the
bank and if you request for a statement at your required time, it may turn out to be
an expensive affair. The branch may charge you Rs 25 per page, which includes
only 30 transactions. Moreover, the bank branch would take eight days to deliver it
at your doorstep.
If the fund transfer has to be made outstation, where the bank does not have a
branch, the bank would demand outstation charges. Whereas with the help of
online banking, it will be absolutely free for you.
As per the Internet and Mobile Association of India's report on online banking
2006, "There are many advantages of online banking. It is convenient, it isn't
bound by operational timings, there are no geographical barriers and the services
can be offered at a miniscule cost."
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TYBBI
E-BANKING IN INDIA
CONCLUSION
While electronic banking can provide a number of benefits for customers and new
business opportunities for banks, it exacerbates traditional banking risks. Even
though considerable work has been done in some countries in adapting banking
and supervision regulations, continuous vigilance and revisions will be essential as
the scope of e-banking increases. In particular, there is still a need to establish
greater harmonization and coordination at the international level. Moreover, the
ease with which capital can potentially be moved between banks and across
borders in an electronic environment creates a greater sensitivity to economic
policy management. To understand the impact of e-banking on the conduct of
economic policy, policymakers need a solid analytical foundation. Without one, the
markets will provide the answer, possibly at a high economic cost. Further research
on policy-related issues in the period ahead is therefore critical.
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