Professional Documents
Culture Documents
Internet Banking A Global Way To Banks in India
Internet Banking A Global Way To Banks in India
Internet Banking A Global Way To Banks in India
It has been observed that customers who adopt online banking are typically
more profitable to the bank, stay with the bank longer and use more products
strengthening the bank customer relationship. Information Technology and
Internet banking has bridged the information gap, which was interestingly
because of human involvement. Banks can make the information of products
and services available on their site, which is, an advantageous proposition.
Prospective customer can gather all the information from the website and thus
if he comes to the branch with queries it will be very specific and will take less
time of employee. Customer can visit these websites and can compare the
services offered by a bank with that of another. Customer can get all the
information, by saving money and time. The trend thus emerging out is that of
virtual corporate system where the human role is minimized to maximum
effect.
The overall banking size and structure has increased considerably. It can also
be accredited to the current market characteristics. More private players and
multinational banks are establishing their base in India. Earlier nationalized
bank dominated the scenario. Now after deregulation private banks have
emerged as a powerful force. As a result, there is a fierce competition among
these players for capturing the savings of individuals and current accounts of
organisations. This has been spearheaded by the liberalization in the
insurance industry. Insurance industry is giving fierce competition through
their offerings on various policies. This sudden surge has necessitated the
use of technology in offering better services competitively. Most of the banks
have coupled IT with their offering to add value.
Several banks have been positioning themselves as a one-stop shop financial
service provider with a fairly exhaustive range of products, including deposit
products, loans, credit cards, debit cards, depository (custody services),
investment advice, bill payments and various transactional services. These
apart, banks have also been entering into the business of selling third-party
products such as mutual funds and insurance to the retail customers. To
provide their customers greater flexibility and convenience as well as to
reduce servicing costs, banks have been investing to computerize their
branches and in new delivery channels such as ATMs, phone banking,
internet banking and mobile banking.
Internet banking in India
The Reserve Bank of India constituted a working group on Internet Banking.
The group divided the internet banking products in India into 3 types
based on the levels of access granted. They are:
Information Only System General Purpose information like interest rates,
branch location, bank products and their features, loan and deposit
calculations are provided in the banks website. There exist facilities for
downloading various types of application forms. The communication is
normally done through e-mail. There is no interaction between the customer
and bank’s application system. No identification of the customer is done. In
this system, there is no possibility of any unauthorized person getting into
production systems of the bank through internet.
Electronic Information Transfer System The system provides customer-
specific information in the form of account balances, transaction details, and
statement of accounts. The information is still largely of the ‘read only’ format.
Identification and authentication of the customer is through password. The
information is fetched from the bank’s application system either in batch mode
or off-line. The application systems cannot directly access through the
internet.
Fully Electronic Transactional System This system allows bi-directional
capabilities. Transactions can be submitted by the customer for online update.
This system requires high degree of security and control. In this environment,
web server and application systems are linked over secure infrastructure. It
comprises technology covering computerization, networking and security,
inter-bank payment gateway and legal infrastructure.
Internet banking can be categorized in following stages:
Information Kiosks: traditional information on banking products and services
are available on the website of the bank.
Basic I-Banking: Here, bank sets up infrastructure for internet banking and
for accessing basic services like opening an account, paying utility bills and
checking the balance.
Virtual medium: Here internet is taken as an official medium for financial
transactions. Buying and selling activities can be undertaken through banks
payment gateway technology. Today most of the banks are having their own
functional websites through which banks are serving customers.
Unique features of internet banking
Online banking solutions have many features and capabilities in common, but
traditionally also have some that are application specific.
Support account aggregation to monitor accounts in one place
Make fund transfers between own accounts and third party accounts
Interbank fund transfer
Maintenance of future fund transfers
Maintenance of beneficiaries
Make Payment on bills to service providers
Maintenance of registered bill payment
Manage our investments with placement in our General Investment Account
Withdrawals with details of investment history
Initiate standing instructions and delete them Manage financing accounts
payment facility financing details
Manage Card account
Manage cheques status inquiry
Stop cheque facility
Release of stop cheque facility
Cheque book request
Cheque return inquiry
Cheque deposit inquiry
Current Account statement request
Profit rates inquiry
FOREX rates inquiry
Update profile
Change account correspondence address
Change password
Send message to Internet Banking customer care
Delete ATM card in cases of loss or authorized usage.
Services through e-banking
Bill payment service It facilitates payment of electricity and telephone bills,
mobile phone, credit card and insurance premium bills as each bank has tie-
ups with various utility companies, service providers and insurance
companies, across the country. To pay our bills, all we need to do is complete
a simple one-time registration for each biller. We can also set up standing
instructions online to pay our recurring bills, automatically. The bank does not
charge customers for online bill payment.
Fund transfer We can transfer any amount from one account to another of
the same or any another bank. Once we login to your account, we 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 With Internet banking, customers can not only pay
their credit card bills online but also get a loan on their cards. If we lose our
credit card, we can report lost card online.
Railway pass Indian Railways has tied up with ICICI bank and we can now
make our railway pass for local trains online. The pass will be delivered to us
at our doorstep. But the facility is limited to Mumbai, Thane, Nasik, Surat and
Pune.
Investing through Internet banking We can now open an FD online through
funds transfer. Now investors with interlinked demat account and bank
account can easily trade in the stock market and the amount will be
automatically debited from their respective bank accounts and the shares will
be credited in their demat account. Moreover, some banks even give us the
facility to purchase mutual funds directly from the online banking system.
Recharging prepaid phone Now we just top-up our prepaid mobile cards by
logging in to Internet banking. By just selecting our operator’s name, entering
our mobile number and the amount for recharge, our phone is again back in
action within few minutes.
Shopping With a range of all kind of products, we can shop online and the
payment is also made conveniently through our account. We can also buy
railway and air tickets through Internet banking.
Advantages of online banking