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E-Banking Project












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 are
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.
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
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 timeconsuming, paper-based aspects of traditional banking in order to manage
your finances more quickly and efficiently.



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.
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. 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. Accordingly, this booklet begins with a
discussion of the two primary types of Internet websites: informational and
Our e-banking and e-commerce solutions facilitate integration with a variety
of electronic delivery channels, like ATM, tele-banking, Internet and mobile
banking, and call centre operations. And our development efforts have
helped us design popular e-Banking products such as eTreasury, eBankWorks
and eHelpdesk, an Internet-based assistance tool.
The flexibility of our business offerings provides our banking clients the
choice of engaging us right through to implementation, or only up to a
particular stage, or to even proceed from wherever another consultant may
have left off. The considerable experience that we bring to the table makes
our highly regarded implementation and integration expertise available to
your organization. And we focus on the functional perspective rather than
on the information system.
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.
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 .





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
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.

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.

Fraud or Risk in "e-banking"

Some customers avoid online banking as they perceive it as being too
vulnerable to fraud. The security measures employed by most banks are
never 100% safe, but in practice the number of fraud victims due to online
banking is very small. Indeed, conventional banking practices may be more



prone to abuse by fraudsters than online banking. Credit card fraud,

signature forgery and identity theft are far more widespread "offline" crimes
than malicious hacking. Bank transactions are generally traceable and
criminal penalties for bank fraud are high. Online banking can be more
insecure if users are careless, gullible or computer illiterate. An increasingly
popular criminal practice to gain access to a user's finances is phishing,
whereby the user is in some way persuaded to hand over their password(s)
to a fraudster.
However, management should consider additional precautions when
originating and approving loans electronically, including assuring management
information systems effectively track the performance of portfolios originated
through e-banking channels.

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 batter 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
E-banking. 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
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.
All services that are usually available from the local bank can be found
on a single website.
The Growth of credit card usage also owes greatly to E-banking. Now a
customer can shop world wide 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.



Benefits to Banking Industry:

Banking industry has also received numerous benefits due to growth of EBanking infrastructure. There are highlighted below:
The growth of E-banking has greatly helped the banks in controlling their
over heads and operating cost
Many repetitive and tedious tasks have now been fully automated resulting
in greater efficiency, better time usage and enhanced control.
The rise of E-banking has made banks more competitive. It has also led
to expansion of the banking industry, opening of new avenues for banking
Electronic banking has greatly helped the banking industry to reduce paper
work, thus helping them to move the paper less environment.
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.

Benefits to General Economy:

Electronic Banking as already stated has greatly serviced both the general
public and the banking industry. This has resulted in creation of a better




enabling environment that supports growth, productivity and prosperity.

Besides many tangible benefit in form of reduction if cost, reduced delivery
time, increased efficiency, reduced wastage, e-banking electronically
controlled and thoroughly monitored environment discourage many illegal
and illegitimate practices associated with banking industry like money
laundering, frauds and embezzlements. Further E-banking has helped banks
in better monitoring of their customer base. This it is a useful tool in the
hand of the bank to device suitable commercial packages that are in
conformity with customer needs. As e banking provide opportunity to
banking sector to enlarge their customer base, a consequence to increase the
of volume of credit creation which results in better economic condition,
Besides all this E-banking has also helped in documentation of the
economic activity of the masses.




E-banking in India - Challenges and Opportunities

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. While E-banking has
improved efficiency and convenience, it has also posed several challenges to
the regulators and supervisors. 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. The existing regulatory framework over banks has also
been extended to E-banking. It covers various issues that fall within the
framework of technology, security standards, and legal and regulatory issues.







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

Features & benefits

1]Account services :
You can now access up to date information on your accounts, ANYWHERE,
ANYTIME. Complete account details like account balance, monthly
statements, uncleared funds or cheque status is available for your Savings
account and Current account.




2] Funds Transfers & Payments:

Transfer funds instantly within your accounts or to any third party account
in Barclays. You can also leave standing instructions for frequent / periodic

3] Requests
Request a cheque book or give stop payment instructions.

4] Bill Payments
Our Bill Payment facility allows you to pay your utility bills online, at
your convenience.

5] Other Services
Services (Secure Mail box and Bulletins).

6] Protection Cover
As a personal customer, you are fully protected against third party fraud
when banking using Barclays Online Banking/mobile banking. You will not
suffer any loss 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 ecommerce applications.




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 you home and benefits come with it.
However, though internet banking is such a good and desirable innocent, it
has some disadvantages as listed;
1] Setting up an account may take time:
In order to register for your bank's online program, you will probably have
to provide ID and sign a form at a bank branch. Some banks even ask for
2] Legal issues:
If you and your spouse wish to view and manage your assets together
online, one of you may have to sign a durable power of attorney before the
bank will display all of your holdings together.
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:
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.





Advantages Of Using Mobile Banking Through

Cell Phone
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] Mobile banking has an edge over internet banking. In case of online
banking, you must have an internet connection and a computer. This is a
problem in developing countries. However, with mobile banking,
connectivity is not a problem. You can find mobile connectivity in the
remotest of places also where having an internet connection is a problem.

2] You can make transactions or pay bills anytime. It saves a lot of time.




3] 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.
4]. Cell phone banking is cost effective. Various banks provide this facility
at a lower cost as compared to banking by self.

5] 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.

6] Banking through cell phone benefits the banks too. It cuts down on the
cost of tele- banking and is more economical.

7] 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.

8] Banks can be in touch with their clients with mobile banking.

9] Banks can also promote and sell their products and services like credit
cards, loans etc. to a specific group of customers.

10] 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.




11] You can transfer money instantly to another account in the same bank
using mobile banking.

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.

Pros of Mobile Banking: No More lines

1] Three ways to connect from your phone.
Arising from the need to accommodate the limitations of different cell
phones, banks are trying to offer a connection to meet most models. The



typical method to access your banking information is via a web browser on

those phones with Internet surfing capability. You would log on in the same
way as when using your computer. For those phones without Internet
capability, some banks provide special software that 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

2] Account numbers are not displayed over wireless cell phone

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
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.

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.

Reserve Bank has brought out a set of operating

1] 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

2. Regulatory & Supervisory Issues

Only banks which are licensed and supervised in India and have a
physical presence in India will be permitted to offer mobile banking
The services shall be restricted only to customers of banks and
holders of debit/credit cards issued as per the extant Reserve Bank of
India guidelines.
Only Indian Rupee based domestic services shall be provided. Use of
mobile banking services for cross border transfers is strictly
Banks may also use the services of Business Correspondent appointed
in compliance with RBI guidelines, for extending this facility to their
The guidelines issued by the Reserve Bank on Risks and Controls in
Computers and Telecommunications vide circular DBS.CO.ITC.BC.
10/ 31.09.001/ 97-98 dated 4th February 1998 will apply mutatis
mutandis to mobile banking.
The guidelines issued by Reserve Bank on Know Your Customer
(KYC), Anti Money Laundering (AML) and combating the
Financing of Terrorism (CFT) from time to time would be applicable
to mobile based banking services also.
Only banks who have implemented core banking solutions would be
permitted to provide mobile banking services.
Banks shall file Suspected Transaction Report (STR) to Financial
Intelligence Unit India (FID-IND) for mobile banking transactions
as in the case of normal banking transactions.




3. Registration of customers for mobile service

Banks shall put in place a system of document based registration
with mandatory physical presence of their customers, before
commencing mobile banking service.
On registration of the customer, the full details of the Terms and
Conditions of the service offered shall be communicated to the

4. Technology and Security Standards

Information Security is most critical to the business of mobile

banking services and its underlying operations. Therefore,
technology used for mobile banking must be secure and should
ensure confidentiality, integrity, authenticity and non-repudiability.
An illustrative, but not exhaustive framework is given at

5. Inter-operability
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.
The long term goal of mobile banking framework in India would be
to enable funds transfer from account in one bank to any other
account in the same or any other bank on a real time basis
irrespective of the mobile network a customer has subscribed to. This
would require inter-operability between mobile banking service
providers and banks and development of a host of message formats.
To ensure inter-operability between banks, and between their mobile
banking service providers banks shall adopt the message formats like
ISO 8583, with suitable modification to address specific needs.

6. Clearing and Settlement for inter-bank funds transfer






To meet the objective of a nation-wide mobile banking framework,

facilitating inter-bank settlement, a robust clearing and settlement
infrastructure operating on a 24x7 basis would be necessary. Pending
creation of such a national infrastructure, banks may enter into
bilateral or multilateral arrangement for inter-bank settlements, with
express permission from Reserve Bank of India, wherever necessary.

Customer Complaints and Grievance Redressal Mechanism

The customer /consumer protection issues assume a special
significance in view of the fact that the delivery of banking services
through mobile phones is relatively new. Some of the key issues in
this regard are given at Annex-II.

8. 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.

9. 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.

10. 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.





Telebank helps track and control finances, all from the comfort of home or
office. Designed to save time and money, Telebank 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.









With balance and basic account enquiries

Order cheque and paying-in books
Stop a cheque
Set up, cancel and amend standing


Order foreign currency and travelers cheques

Transfer money between your business and personal accounts
Order copies of your statements and change the date you receive
With information on business products and services

Automated teller machine

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 or CVVC (CVV). Authentication is provided by the customer
entering a personal identification number (PIN). The newest ATM at Royal
operates without a card to withdraw cash up to 100. The customers should
register first their mobile phone number and bank will give a six-digit code
to enter into ATM to withdraw the cash.[1]
Using an ATM, customers can access their bank accounts in order to make
cash withdrawals, debit card cash advances, and check their account
balances as well as purchase prepaid cell phone credit. If the currency being
withdrawn from the ATM is different from that which the bank account is
denominated in (e.g.: Withdrawing Japanese Yen from a bank account
containing US Dollars), the money will be converted at an official
wholesale exchange. Thus, ATMs often provide one of the best possible
official exchange rates for foreign travelers, and are also widely used for
this purpose.

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.

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 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.

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.




Disadvantages of Automatic Teller Machines

Automated teller machines, or ATMs, are machines that function like bank
tellers, allowing customers to perform basic banking functions, such as
making deposits, making withdraws and shifting money between different
accounts. In place of identification, bank members use personalized debit
cards to access their holdings. There are a number of disadvantages to these

Unlike bank tellers, ATMs do not require the
person performing the transaction to present a 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.

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.

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




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.

Difficulty of Use
The performance of business at an ATM is generally quicker than
that at a human teller. However, the ATM is incapable of providing
personalized instruction to the user in a way that a human teller can. This
can result in longer wait times if the user currently using the machine is
struggling to complete a transaction.

Eating a Card
Occasionally, ATMs will malfunction and swallow a user's ATM
card. The customer will then be directed to contact a service number or
their bank and wait for a repair technician to retrieve this card. While this
happens only rarely, if it occurs on a weekend or at night, the user may be
left to wait for several days before they can again use their card, something
that would not happen with a human cashier.





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. [1]

In many countries, the use of debit cards has become so widespread that
their volume has overtaken or entirely replaced cheques and, in some
instances, cash transactions. The development of debit cards, unlike credit
cards and charge cards, has generally been country specific resulting in a
number of different systems around the world, which were often
incompatible. Since the mid 2000s, a number of initiatives have allowed
debit cards issued in one country to be used in other countries and allowed
their use for internet and phone purchases.
Unlike credit and charge cards, payments using a debit card are immediately
transferred from the cardholder's designated bank account, instead of the
them paying the money back at a later date.
Debit cards usually also allow for instant withdrawal of cash, acting as the
ATM card for withdrawing cash. Merchants may also offer cash back



facilities to customers, where a customer can withdraw cash along with their

Advantages of debit cards

Obtaining a debit card is often easier than getting a credit card. If

you qualify to open a bank account, you can usually get a debit card.

Unlike when you write a check, using a debit card saves you from
having to show identification or give out personal information at the
time of the transaction.

It frees you from carrying cash or a checkbook.

It can save you from having to stock up on traveler's checks or cash

when you travel.

Debit cards may be more readily accepted than checks, especially in

other states or countries.

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 offline 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.




A credit card is a payment card issued to users as a system of payment.

It allows the cardholder to pay for goods and services based on the holder's
promise to pay for them.[1] The issuer of the card creates a revolving
account and 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: a charge card requires the
balance to be paid in full each month.[2] In contrast, credit cards allow the
consumers a continuing balance of debt, subject to interest being charged. A
credit card also differs from a cash card, which can be used like currency
by the owner of the card.
The size of most credit cards is 85.60 53.98 mm (33/8 21/8 in),[3] and
conform to the ISO/IEC 7810ID-1 standard. Credit cards have an embossed
bank card number complying with the ISO/IEC 7812numbering standard.

Advantage of credit cards:




1. They allow you to make purchases on credit without carrying around

a lot of cash. This allows you a lot of flexibility.

2. They allow accurate record-keeping by consolidating purchases into a

single statement.

3. They allow convenient remote purchasing - ordering/shopping online or

by phone. They allow you to pay for large purchases in small,
monthly installments.

4. Under certain circumstances, they allow you to withhold payment for

merchandise which proves defective.

5. They are cheaper for short-term borrowing - interest is only paid on

the remaining debt, not the full loan amount.

6. Many cards offer additional benefits such as additional insurance

cover on purchases, cash back, air miles and discounts on holidays.




1. 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.
2. 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.
3. Lost or stolen cards may result in some unwanted expense and
4. The use of a large number of credit cards can get you even further
into debt.

5. 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.





Telebank helps track and control finances, all from the comfort of home or
office. Designed to save time and money, Telebank 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.

Potential Areas Where E-Banking Is Successfully Used

Online bill payment: Internet banking is frequently used for tax payments,
Bill payments like of electricity, water, municipal and telephones. Many
public sector companies are offering online payment services, for e.g.
MTNL, BSNL etc. Indian Railways has started online reservation system for
credit card and debit cardholders. In coming future even persons having
Internet bank account can book seat online at ease of their home. Online
brokerage: Strong financial markets are always backbone of any economy.
Through e-banking channels stock trading can reach to the people who want
to invest their money in financial markets but due to time constraints they
are not able to visit the broker. At Asian tigers like Korea and Taiwan 30%
of the stock trading is done online. This will create more dynamic
environment and there will be more choice for small investor for his
investment. The small investor is not only dependent on government bonds
or other fixed deposits schemes. Online Account Management: Citizens can
manage their account online. Anytime banking, it will reduce the time
delays and dependency on bank staff and timing of operations. Anywhere
banking: Citizen can deposit/withdraw their money anywhere in country
irrespective of the branch where their parent account is held. This will give
greater security for traveling business people to deposit money collected
from traders/clients. ATMs is another mode of anywhere banking, consumer
can use services of ATMs anywhere in country, reducing burden of carrying
money while traveling. Smart Card Solutions: Smart cards will give helpful



in bringing governmental services and banking more closer to people.

Farmer service centers are example of this initiative. Smart cards will be
greater flexibility to users reducing the frauds and malpractices what debit
cards and credit cards are not able to offer. On the other hand smart card
can be used as identification card for number of other services like driving
license, passport, election id card and other things. The application of online
banking in e-governance can explain by two real life case studies.

How e-banking can ease your life :

Penalty due to non-payment of bill is not new to anyone of us. And quite
obviously, who likes the long procedure of writing a cheque, standing in a
long queue and then ensuring that the particular amount is available in your
bank account?.
Indian banks are trying to make your life easier. Not just bill payment, you
can make investments, shop or buy tickets and plan a holiday at your
fingertips. In fact, sources from ICICI Bank [ Get Quote ] tell us, "Our
Internet banking base has been growing at an exponential pace over the last
few years. Currently around 78 per cent of the bank's customer base is
registered for Internet banking."
To get started, all you need is a computer with a modem or other dial-up
device, a checking account with a bank that offers online service and the
patience to complete about a one-page application--which can usually be
done online. You can avail the following services.

Bill payment service

Each bank has tie-ups with various utility companies, service providers and
insurance companies, across the country. You can facilitate payment of



electricity and telephone bills, mobile phone, credit card and insurance
premium bills.
To pay your bills, all you need to do is complete a simple one-time
registration for each biller. You can also set up standing instructions online
to pay your recurring bills, automatically. One-time standing instruction will
ensure that you don't miss out on your bill payments due to lack of time.
Most interestingly, the bank does not charge customers for online bill

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 [ Images ].
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
[ Images ] and Pune. 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 [ Images ], Thane,
Nashik, Surat

Investing through Internet banking




Opening a fixed deposit account cannot get easier than this. You can now
open an FD online through funds transfer. Online banking can also be a
great friend for lazy investors.
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
Moreover, some banks even give you the facility to purchase mutual funds
directly from the online banking system.
So you need not worry about filling those big forms for mutual funds, they
will now be just a few clicks away. Nowadays, most leading banks offer
both online banking and demat account. However if you have your demat
account with independent share brokers, then you need to sign a special
form, which will link your two accounts.

Recharging your prepaid phone

Now you no longer need to rush to the vendor to recharge your prepaid
phone, every time your talk time runs out. Just top-up your prepaid mobile
cards by logging in to Internet banking. By just selecting your operator's
name, entering your mobile number and the amount for recharge, your
phone is again back in action within few minutes.

Shopping at your fingertips

Leading banks have tie ups with various shopping websites. With a range of
all kind of products, you can shop online and the payment is also made
conveniently through your account. You can also buy railway and air tickets
through Internet banking.

Internet banking versus traditional method

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."

Security Precautions

Customers should never share personal information like PIN numbers, passwords etc with
anyone, including employees of the bank. It is important that documents that contain
confidential information are safeguarded. PIN or password mailers should not be stored,
the PIN and/or passwords should be changed immediately and memorized before
destroying the mailers.
Customers are advised not to provide sensitive account-related information over unsecured
e-mails or over the phone. Take simple precautions like changing the ATM PIN and



online login and transaction passwords on a regular basis. Also ensure that the logged in
session is properly signed out.

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








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 policyrelated issues in the period ahead is therefore critical.




Current scenario of E-banking

E-banking cannot only improve the access to finance,
particularly for SMES but also allows access to finance
with better and more competitive rates.
Uses online banking as new delivery tools to improve to
access to finance and alleviate financial constraints
Banking Finance & Service System

Website :