Professional Documents
Culture Documents
PROJECT REPORT
On
“E-BANKING IN INDIA”
BACHELOR OF COMMERCE
BANKING & INSURACE
V- SEMESTER
2012-2013
SUBMITTED BY
SHIVANI CHANDA
UNDER GUIDANCE OF
PROF. SUBHASHINI
MUMBAI -37.
2
CERTIFICATE
in banks.
DECLARATION
3
SIGNATURE OF STUDENT
ROLL NO : - 40
4
ACKNOWLEDGEMENT
First & forecast, we would like to thank to our prof. Sudha whose
invaluable support and guidance helped me in every aspect of this
project.
INDEX
SR NO TOPIC
1 INTRODUCION TO BANKING
2 INTRODUCTION TO E-BANKING
3 TYPES OF E-BANKING
5 RISK MEASURERING
6 E-BANKING IN REALITY
7 CONCLUSION
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CHAPTER-1
INTRODUCTION TO BANKING
For the past three decades India’s banking system has several outstanding
achievements to its credit. The most striking is its extensive reach. It is no
longer confined to only metropolitans or cosmopolitans in India. In fact,
Indian banking system has reached even to the remote corners of the
country. This is one of the main reasons of India’s growth process.
The government’s regular policy for Indian bank since 1969 has paid rich
dividends with the nationalization of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters
for getting a draft or for withdrawing his own money. Today , he has a
choice. Go ne are days when the most efficient bank transferred money
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The first bank in India, though conservative, was established in 1786. From
1786 till today, the journey of Indian banking system can be segregated into
three distinct phases.
Phase I
The general Bank of India was set up in the year 1786. Next come bank of
Hindustan and Bengal bank. The East India Company established Bank of
Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) and Bank
of Madras (1843) as independent units and called it presidency Bank. These
three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly Europeans
shareholders.
Lahore. Between 1906 and 1913, central Bank of India, Bank of Baroda,
Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank
of India came in 1935.
During the first phase the growth was very slow and banks also experienced
periodic failures between 1913 and 1948. There were approximately 1100
banks, mostly small. To streamline the functioning and activities of
commercial banks, the Government of India came up with The Banking
Companies Act, 1949 which was later changed to Banking Regulation Act
1949 as per amending Act of 1965. Reserve Bank of India was vested with
extensive powers for the supervision of banking in India as the Central
Banking Authority.
Phase II
Government took major steps in this Indian Banking Sector Reform after
independence. In 1955, it nationalized Imperial Bank of India with extensive
banking facilities on a large scale especially in rural and semi-urban areas. It
formed State Bank of India to act as the principal agent of RBI and to
handle banking transaction of the Union and State Government all over the
country.
The following are the steps taken by the government of India to Regulate
Banking Institutions in the Country :
After the nationalization of banks, the branches of the public sector bank
India rose to approximately 800% in deposits and advances took a huge
jump by 11,00o%.
Phase III
This phase has introduced many more products and facilities in the banking
sector in its reforms measure. In 1991, under the chairmanship of M
Narasimham, a committee was set up by his name which worked for the
liberalization of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts
are being put to give a satisfactory service to customers. Phone banking and
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net banking is introduced. The entire system become more convenient and
swift. Time is given more importance than money.
CHAPTER 2
INTRODUCTION TO E-BANKING
E-BANKING
Electronic banking in simple terms means, it does not involve any physical
exchange of money, but it’s all done electronically, from one account to
another, using the Internet. Internet banking is just like normal banking,
with one big exception. You don’t have to go to the bank for transactions.
Instead, you can access your account any time and from any time and from
any part of the world, and do so when you have the time, and not when
the bank is open. For busy executives, students, and homemarkers,
e-banking is virtual blessing. No more talking precious time off from work to
get a demand draft made or a cheque book issued.
Banks offer Internet banking in tow main ways. An existing bank with
physical offices can establish a Web site and offer Internet banking to its
customers in addition to its traditional delivery channels.
Virtual banks may offer their customers the ability to make deposits and
withdraw fund via automated teller machines (ATMs) or other remote
delivery channels owned by other institutions.
Online system allow customers to plug into a host of banking services from
a personal computer by connecting with the bank’s computers over
telephone wires the convenience can be compelling. Not only is travel time
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reduced, but ATM machines, telephone banking or banking by mail are often
unnecessary. And, technology continues to make online banking once
attempted only by computer enthusiasts, easier for the average consumer.
Can one imagine life without paper cash? Money has always been part of
human emotions. And although it is difficult to imagine that all those years
of savings at the bank is now just a whole bunch of bits and bytes, it is
becoming a reality and the sooner people adjust to it, the better it is.
EVOLUTION OF E-BANKING:
The story of technology in banking started with the use of punched card
machines like accounting machines or ledger posting machines. The use of
technology, at that time, was limited to keeping books of the bank. If
further developed with the birth of online real time system and vast
improvement in telecommunications during late 1970’s and 1980’s it a
resulted in a revolution in the field of banking with “convenience banking”
as a buzzword. Through convenience banking, the bank is carried to the
doorstep of the customer. The 1990’s saw the birth of distributed computing
technologies and Relational Data Base Management System. The banking
industry was simply waiting for these technologies. Now with distribution
technologies, one could configure dedicated machines called front-end
machines for customer service and risk control while communication in the
batch mode without hampering the response time on the front- end
machine.
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HISTORY OF E – BANKING
The precursor for the modern home online banking services were the
distance banking services over electronic media from the early 80s. the term
online become popular in the late 80s and refers to the use of a terminal,
keyboard and TV (or monitor) to access the banking system using a phone
line. “Home Banking” can also refer the use of numeric keypad to send
tones down a phone line with instructions to the bank. Online services
started in New York in 1981 when four of the city’s major banks (Citibank,
chase Manhattan, chemical and manufacturers honover) offer home banking
services using the videotext these banking services never become popular
except in France where the use of videotext (Minitel) was subsidized by the
telecom provider and the UK, where the pestle system was used. The UK’s
first home online banking services were set up by the Nottingham Building
Society (NBS) in 1983. The system used was based on the UK’s pestle
system and used a computer, such as the BBC Micro, or keyboard
connected to the telephone system and television set. The system (known as
‘Home link’) allowed on-line viewing of statement, bank transfers and bill
payment. In order to make bank transfers and bill payment, a written
instruction giving details of the intended recipient had to be sent to the
NBS who set the details up on the Home link system. Typical recipient were
gas, electricity and telephone companies and accounts with other bank.
Details of payments to be made were input into the NBS system by the
account holder via pestle. A cheque was then send by NBS to the payee
and an advice giving details of the payment was send to the account
holder. BACS was later used to transfer the payment directly. Stanford
federal credit Union was the first financial institution to offer online internet
banking services to all of its members in Oct, 1994.
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Traditionally the relationship between the bank and its customer has been
on a one-to-one level via the branch network. This was put into operation
with clearing and decision-making responsibility for the overall clearing
network, the size of the branch network and the training of staff in the
branch network. The bank monitored the organization’s performance and set
the decision-making parameters, but the information available to both
branch staff and their customers was limited to one geographical location.
On IT Adoption
private sector banks and foreign banks have tended to concentrate their
efforts more on the top 23 centers which house the cream of the country’s
urban customers. These banks have taken the which house the cream of the
country’s urban customers. These banks have taken the lead in technology
adoption and have succeeded in building up a substantial base of technology
savvy, high-end customer
Making and observation about the adoption of technology by the bank, P.C.
Narayan, vice-president (IT and retail banking) of Global Trust Bank Ltd, says.
“The rate of adoption of IT by foreign and private sector banks in country
has been significant over the Internet phenomenon worldwide. A number of
banks in the public sector have also accelerated the pace of IT deployment
largely because of the competitive pressure brought upon them by private
sector banks and foreign banks’’.
“Banks would have certainly started downing their shutters had banking
software not taken over the reins.”
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In sharp contrast, most of the private banks like GTB, HDFC, and ICICI
started their operations with the use of technology. And with these new
banks wooing the customers by offering what was till then an unknown
phenomenon-customer service-the nationalized banks were forced to take
remedial steps. “The compulsion for private banks to adopt a very high level
of IT was driven by their desire to contain their operating cost at the
lowest levels and at the same time be able to offer a wide variety of
product and services in quickset possible time.” Observes Narayan.
Commenting on the reasons for public sector banks being laggards in the
adoption of technology, State Bank of Mysore managing director sitarama
Murty says: “The private banks started with a clean slate. They hired
technology savvy people. On the other hand, public sector banks didn’t have
those advantages. We need to follow the public sector bank’s rules and
regulation while hiring people. We can’t appoint computer professional in
the top management directly.”
Today most of them have their own in-house IT department which not only
takes care of deployment and implementation issues but is also into
developing specific and customized application for the bank. From SBI to
canara bank, everyone is expanding its IT division and making huge
investment to develop the division as a profit centre by itself. According to
an SBI official, “It makes more sense to have our own division which
understand our needs and comes out with a solution. It is not just cost-
effective but also useful for a bank to have a separate division that takes
care of IT in totality.”
Faced with deregulation, privatization and globalization , the Indian banks are
slowly looking at various options to stay ahead in the rat race. This has
resulted in the following recent trends:
Phone banking
CHAPTER 3
TYPES OF E-BANKING
E-BANKING IS DIVIDED IN FOLLOWING TYPES:
Types of E-Banking:-
Mobile banking.
PC banking.
Internet banking.
The ATM is the device use by the bank customers to process account
transaction. This system is known as “anytime money” because with services
the person having the ATM card can withdraw cash any time he want. Since
the ATM machine can be build anywhere like near markets and railway
stations etc, so one can easily with draw money from it.
Advantages of ATM:
To banks
To customer
Disadvantages of ATM:
The wait, with all the promise of ATM’s capabilities many details are still in
the standards process.
In normal course all above activities would have involved customer visit to a
branch and this Tele-banking has improved banking services and enabled
remote banking.
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Advantages of Tele-banking:
1. You may not have time to visit your bank every week and if our
business is located out of town, getting to a branch can be time
consuming and expensive. With telephone banking, your bank is on the
other end of the line whenever you need it.
2. You can manage your business account at any time, which is idial if
you are busy during the day with running your business.
3. As well as the basics of running your business account – paying a bill,
transferring money, setting up a direct debit and so on – you may also
be able to appointment with your bank manager.
4. Making payment by phone can simplify your banking – you don’t need
to confirm the payments in writing, and you can check all your
transactions against your statement when it arrives.
The most common one would have to be the fact that not all banks and
building societies offer 24 hour telephone banking. They may if is simply a
case of checking your balance or recent transaction but for anything more
involved in that it can cause a problem. Also telephone banking is not
active usually over bank holidays such as Christmas day or New year day.
Mobile banking
mobile phone. Mobile phones are playing great role in banking and other
channels.
Alert facility:
Mobile banking alert facility keeps you informed about the significant
transaction in your account. It keeps you update where ever u go.
Request facility:
Mobile banking request facility enables you to enables you to query for your
account balance.
Mobile banking through cell phone offers many advantages for customers as
well as banks. Some of them are as follows:-
5) Banking thought cell phone benefits the banks too. It cuts down an the
cost of Tele-banking and is more economical.
6) Mobile banking through cell phone is very advantageous to the banks
as it severs as guide in order to help the banks improve their
customer care service.
7) Banks can be in tough 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,
and Minimum Balance Alerts etc can be accessed from your mobile.
10) You can transfer money instantly to another account in the same
bank using mobile banking.
PC banking:
PC banking allows the customer to access the information regarding to
their bank accounts through a dial up connection. They can also
download the information and process it in their own manners. It is
different from the internet banking in the sense that internet banking is
done over a highly accessible public networks, where as PC banking is
accessible just to bank’s customers.
You can access your account just from your home PC, 24 hours per day,
7 days per week. All you need is a computer with an internet connection,
and a card reader, which can be obtained at your four Fortis Bank. The
card reader gives you unique codes based on your bank card and pin
number, so your account stays safe.
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Because you don’t need to go all the way to your local bank office, you
save a lot of time that you don’t want to be wasting in traffic. A lot of
information and reports can be obtained with a few clicks, and
transactions can be done without signing papers. Most of your time will
be spend on time going to the website and logging in, so it is advisable
to do all you’re banking at a certain time. For example, Every Monday
you log in and do your transaction and administration. Now you just log
in once and process all transfers and reports at once.
Advantages of PC banking:
You could also check your balances and love the conversation and power
of electronic fund transfer.
Disadvantages:
Internet banking:
Internet banking let you handle many baking transaction via your personal
computer. For instance, you may use your computer to view your account
balance, request between accounts, and pay bills electronically. Internet
banking system and method in which a personal computer is connected by
a network service provider directly to a host computer system of a bank
such that customer service requests can be processed automatically.
view online banking as a powerful “vale added” tool to attract and retain
new customers while helping to competitive banking environment.
INFORMATION.
COMMUNICATION.
TRANSACTION.
Information:
This is most basic level of internet banking. The bank has marketing
information about its product and services on a stand-alone server. This
level of internet banking services can be provided by the bank it self or by
sourcing it out. Since the server and website may be vulnerable to
alteration, control must therefore be in place to prevent unauthorized
alterations to data the server or web site.
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Communication:
This type of internet banking allows the interaction between the bank’s
system and customer. It may be limited to electronic mail, account inquiry,
loan application, or static file update. This risk is higher with this
configuration that with the earlier system and therefore appropriate control
need to be in place to prevent, monitor, and alert management of any
unauthorized attempt to access bank’s internal network and computer
system. Under this system the client makes a request to which the bank
subsequent responds.
Transaction:
Under this system of internet banking customers are allowed to execute
transaction. Relative the information and communication type of internet
banking, this system processes the highest level of risk architecture and
must have the strongest control. Customer transaction can include accessing
accounts, paying bills, transferring funds, etc. this possibilities demand very
stringent security.
You can track your balance daily, seen what checks have cleared and
know when automatic deposit and payment are made this is all possible
by simply going online to the banks website and logging into your
account.
You can keep your account balance using your computer and your
monthly statement.
As soon as you log into your account, you will quickly see whether
there is anything amiss when you check on your deposits and debits. If
anyone writes a check or withdraws fund from your account and you
know it wasn’t you, you will see it right away. This lets you get
started on correcting the problem immediately rather that having to
wait a month to even have a clue it is happening as would be the
case with a traditional bank.
Internet banking offers a great deal more convenience that you could
get from a conventional bank.
You aren’t bound by ‘banker’s hours and you don’t have to go there
physically in your car. Time is not wasted when you have work to do
because you can do your office’s banking without leaving the office. No
matter where you are or what time it is, you can easily mnage your
money.
There are sound reasons why internet banking is growing. The economic
advantages have encourage banks to provide an increasing rang of easy
to use services via the internet.
Customers have found doing business online simple and speedy and
become have very have become very comfortable with the arrangement.
Internet banking gives people more control over their money in convenient
way that they find enjoyable and reassuring.
Identity conformation
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With hacking and identity theft on the rise, internet banking customer
have to place a certain amount of trust in the bank that their account
information and personal information are safe.
Customer service
If you bank or a traditional bank, you can go to the bank and speck to
someone face to face about your problem but, with an internet bank,
you will likely spend a lot of time on the phone being passed around
and placed on hold.
Accessibility
If the internet goes down in your area or the area of the banking
office, you will be unable to access your accounts. This includes being
unable to withdraw money from ATM’s or to use your debit card.
Fees
Many internet banks don’t have ATMs, which means you will have to
pay ATM fees. This can cost you more money that paying the regular
monthly fees at a brick and mortar bank.
Competition
Cost Efficiencies:
Geographical Reach:
Branding:
Allows user to pay bills, transfer funds between accounts and check
accounts from anywhere.
Offers wireless banking.
Security is important issue in Wireless Banking.
Newsbytes reports that wireless banking users will number over 7
million in the US by 2005.
take over the web are simply invincible, unlike the surveillance cameras
and lobby guards posted in many banks. If the general public is aware
of, or understand, the many features put into a place to guard their
finances, and then people remain skeptical.
Firewalls
Every user in PKI transaction owns a pair of keys: A public key known to
everybody and a private key known only to the owner. The keys have 2
main characteristics. Once, they are complimentary sets of passwords.
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Let’s now see how PKI compares with existing security technologies. Anti-
virus is merely for integrity, firewall give authentication and
confidentiality, Access is similar to firewall; encryption ensures
confidentiality. Thus PIK emerges as the only solution that guarantees all
the four pillars of security and trust via authentication, non-repudiation,
integrity and confidentiality.
Encryption
Digital Signatures:
Access Codes
The access codes used to indentify you to the online banking system are
called passwords, and are further protected by using PINs (personal
identification number).
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CHAPTER 4
ADVANTAGES AND DISADVANTAGES OF
E-BANKING
BENEFITS OF E-BANING
Benefits to customers:
Save money
In addition to making money, the bank can save money with an Internet
banking system. Online banking can actually decrease operating costs by
reducing the daily reproduction and distribution of paper-drawn
transaction and delivering and processing statements for accounts, credit
cards, and bills. Performing transactions via the Internet also provides
cost savings, as indicated by a study done by Booz, Allen & Hamilton that
shows a transaction over the phone cost $.54, at an ATM it cost $.27
and via the Internet the cost is $.0.1. using the Internet to perform
transactions greatly reduces the cost to the bank.
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Improves productivity
DISADVANTAGE OF E-BANING
The most obvious disadvantage is: technophobes need not apply i.e. if
you are still not comfortable using a computer,e-banking is not for you.
CHAPTER 5
RISK MEASURERING
E-BANKING RISK
E-BANKING RISK:-
Strategic Risk
Operational Risk:
Technology infrastructure
Security
Data integrity
System availability
Internal control
Reputational Risk
Legal Risk
E-banking using internet as an added delivery channel may shift bank risk
profiles to some degree and create new risk control challenges for banks.
Accordingly, supervisors need to consider the implication of a bank’s use of
e-banking delivery channels on its strategic risk, operational risk, reputational
risk, legal risk, market risk, and foreign exchange risk.
Strategic risk is one of the most significant risk that e-banking activity
presents for banking organization. Strategic risk differs for other risk
categories in that it is more general and board in nature. Strategic decision
to be given by bank’s board of directors and executive management will
have implicative for all other risk categories.
Some of the strategic risk involve with e-banking are directly linked with
timing issues. There can be significant strategic risk associated with
management decision to be a technology pioneer, particularly if the
institution becomes burdened with system made redundant by rapid
technological charges.
Operational risk:
Technological infrastructure:
integrating system for e-banking activities with their existing legacy system
and with system of multiple service providers and partners.
Security:
Data integrity:
System availability:
Internal control/audit:
Reputational risk:
Legal risk:
A bank that develop relationships via the internet with customer in other
jurisdictions may be unfamiliar with the banking and customer protection
laws and regulation specific to those countries and may consequently
incur heightened legal risk.
The e-banking delivery channels also has implication for other traditional
banking risks such as credit risk., Liquidity risk, interest rate risk and
market risk.
Credit risk:
b) Liquidity risk:
The speed with which the information and mis informatin moves over the
internet can have implication for liquidity risk profile of banks. Adverse
information about a bank, whether it is true or not, can be easily
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disseminated over the internal through bulletin boards and news groups.
This couuld cause depositors to withdraw their funds in mass at any time of
the day, any day of the week. Accordingy, increased monitoring of liquidity
and changes in deposits and loan may be warranted depending on the
volume of activity created through e banking.
Market risk:
The impact of recent growth in securities issuance and tradind over the
internet on banks market risk is complex. From a market standpoint, the
increase volume of securities, which are traded over the internet volatility,
but on the other hand, it can lead to increased liquidity. From an individual
bank's standpoint, banks may be exposed to increase market risk if they
create or expand deposits brokering, loan sales, or securitization programmer
as a result of internet banking activities. As with liquidity risk, the effect the
increased E banking activities on market volatility need to be monitered by
banks and supervisors.
for e-banking. The central bank has decided to keep the limit on the ticket-
size for e-banking at Rs 2,500 per transaction, and Rs 5,000 per day. Banks
have also been allowed to put in place a monthly transaction limit,
depending on the bank's risk perception of the customer. While the
guidelines will enable lenders such as State Bank of India and Axis Bank to
go ahead with their launch of mobile banking services, the central bank has
decided to restrict the services only to holders of debit and credit cards.
The card user base in the country is 80 million, with 55 million debit card
users and 25 million credit card users. Only Indian rupee-based domestic
services shall be provided on the mobile- payment platform, and the use of
mobile-banking for cross-border transactions have been strictly prohibited.
Banks which are based, licensed and supervised in India will be allowed to
offer such services. Further, only banks which have implemented the core
banking platform will be allowed to offer e-banking. At the same time, the
RBI has recommended that all e-banking transactions are validated through a
two-factor authentication system, thereby complying with the latest security
and encryption standards.
Perhaps, the biggest of all concerns for e-banking customers is the security
issue. People still aren't comfortable having information about their life's
hard-earned money saved on a server they don't know about. A physical
pass-book is still preferred. While e-bankers use multiple firewalls, filtering
routers, 128-bit. Encryption and digital certification for safe and confidential
transactions, there are still chances of a snafu.
Also, there is no more security and customer loyalty. With Internet, the
gateway to low cost international expansion around, tackling the virtual
competition would be a key. Competition is just a 'click' away. Customers
would be loyal as long as the rates offered are competitive.
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At the same time, banks would have to manage different product portfolios,
at different yet competitive prices to different corporate accross the world.
The issue of offering services in multiple geographics/customers - due to
increased global access and competition may ask for new virtual alliances
between small local banks and the global players.
CHAPTER 6
E -BANKING IN REALITY
The experiences of the west are the clear indicator that Internet Banking is
not far off for India. The Internet usage, combined with aggressive moves by
new Internet players in this highly fragmented industry will have profound
effects on financial services.
But are the Indians banks ready for the sudden change? where do we stand
as of today? would future be as diverse as today or would traditional banks
painfully lose incremental revenue growth opportunities to a host of
aggeressive players that may rapidly consolidate the news revenue
opportunities in the business. And what exactly do the banks need to do to
meet the challenges of ''Banking Business without barriers.''
The lead in Internet banking in India has been taken by the new private
sector banks and foreign banks, and the four banks which offer Internet
banking facilities in a significant way are ICICI Bank, HDFC Bank, Citibank and
Global Trust Bank. Banks like UTI Banks, IndusInd, and SBI also offer net
banking facilities in a lesser time.
The current base of online banking customers has been estimated at 4.2
Lakhs, which is 8.7% of the overall Internet user base. The user base as of
December 2002 has been estimated under alternative scenarios: The
conservative scenario puts the user base as of 31st december; 2002 at 41.0
lakhs (14.7% of the internet user base), while the more optimisic forecast
puts the user base at 73.0 lakhs with an of overall penetration of 26.2 %.
ICICI, HDFC and CITIBANK have emerged as the early leaders in online
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Research revealed that close to 40% of adult Internet users have accounts
with one of the four major Internet banks offline. However, only 10.8% of
adult Internet users are banking online.
Specific aspects of the Indian banking scenario which are pertinent to note
are:
The recents IT Act which accepts the legal validity of the digital signatures
The last 4 points - from entry of new players to rapid growth are factors,
which should enable the growth of online banking in India.
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Banks must today at least hedge by experimenting with the web business
model. But it calls for
profound organizational changes if it to be executed successfully.
It needs the banks to fundamentally re-assess their opportunities for adding
value and hence re-define their roles in the new paradigm.
Banks must first determine what kind of web to target. Customer webs
focus on maximizing a bank's share of wallet of a target customer segment
while Market webs seek to aggregate a critical mass of buyers and sellers
within one transaction category.
Within any web that it might target, there are a number of possible roles a
banks could play. web shapers are the one or two companies that own a
shaping platform, take initiative to mobilize other companies around it, and
define a set of standard practices or policies to coordinate participant's
activities. Banks that choose not be Web shaper would be adapters and
would need to define a clear niche that will help them differentiate
themselves from other participants. Some adapters may becomes influencers,
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Indian Banks still have a few important lesssons in customer services that
they would do well to pay heed to.
Customer Relationship
Banks and other financial institutions cannot go completely virtual - they
need physical branches after all. This is probably one area where Internet
banking in India scores over the 'stand alone' Internet banks of the West.
Several Internet banks like E-trade have acquired ATM networks like Card
Capture Services to offer consumers a way to deposit and access their
money through ATMs. Physical branches help forge a
'relatonship' with customer that a virtual banks cannot. most online
consumers utilize account tracking, bill pay and e-shopping, they would
prefer direct, personal contact with their banker when shopping for financial
products.
Personalization
Banking solution become truly personalized when they are able to respond
to the changing customer needs, and this possible using strong data mining
and target marketing capabilities.
For example , software that migth tell you which credit balances to pay off
first, or alert you in advance when your cheque will boune. This level of
personalization is still lacking in the banking solutions offered by Indian
banks.
Integration
Another important aspect is integrating customer service interfaces and
channels, so that the customer deals with a single channel that cater to
diverse needs such as Kiosks, ATMs, Web TV, mobile phones, pagers, and
branches counters. Banks have to get their acts together. If the , and the
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online Banking, and the ATM's, and the Branches don't work together,
there's no real benefits in havings the electronic tools.
Customer shouldn't have to go to one site to just pay their utility bill and
phone bill and then have to go offline to pay their cable and credit card
bills. They should be able to check the value of their investment portfolio,
updated daily, in their personal balance sheet, include all their other
assets and other personal finance.
Innovation
Today's value-added product could easily be tomorrow's commodity. That is
why banks would need to depend more on product innovation, expending
the range of their products and service offerings. Apart from just online
accounts, e-banks would need to tailor specific products for the Internet,
llike online bill presentment or credit cards with instant online approval.
Many Internet banks like Egg have taken the lead in offering innovative
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products like Egg card- a credit card that features an introductory zero-
percent interest rate.
Banks must also move swiftly to acquire new on -line customers. Most of
the early attempts to do so, carried out in partnership with Internet
portals, have flopped largerly because the banks failed to offer any
differentiation in pricing or any other very compelling lure. Yet here, too,
banks have an advantage. Despite significant increases in revenue from on-
line relationships, credits card companies and brokerage firms have spent
so much money building their on-line customer base that some would
questions whether they will ever profit from these efforts. Most banks
already have a powerful retail distribution network that should allow them
both to migrate their customers and to accquire new ones at much lower
cost.
M-Banking
Today, with mobile being the 'in-thing', banks are not far behind to
position themselves for this new medium to ring in customers and
convenience. Most of them are talking about helping people access
information of their accounts and even do transactions while on the
move-calling this M-banking (mobile banking). Almost all major banks have
SMS-enable mobile banking. The use of WAP-based applications for
Internet banking is an increasing trend especially in the Asia pacific region,
though it doesn't seem likely that it will catch on in India given the
miniscule populace of WAP-enabled phone users.
"We have plans to offer WAP-enabled Fed Net soon" says Nair of Federal
Bank.
Account Aggregation
A new wave called 'Account Aggregation' is slowly sweeping through the
online banking/brokerage industry. Account aggregation -- or account
consolidation -- provides consumers with the ability to access the
information about all of their financial transactions sourced from different
web sites, at a single web site.
Now you can obtain updates of all of your investments (from banks,
mutual funds, online brokers), and liabilities (car lones, credit card lones,
bank lones) at a single point. That way you don't need to remember
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multiple login IIs, and passwords, and also don't need to consolidate this
information yourself. Further, at the same site you shall be able to get
'payment due' reminders, online payment services and even query your
transactions to find, say how much you spent on entertainment last year.
They could also provide you with e-mail; book your airline tickets and
more.
Integration
Services provides will integrate and market their offerings across different
channels. The strategic and battles of the future are going to be fought
for channel Integration.
The beauty of integration is that one channel does not display another.
They feed on each other to create incremental value for the customer, as
well as the institution. The incremental value comes from two distinct
sources. Finally, you reduce inefficiencies. you don't send people junk mail
because you know that they are not likely to buy a particular product or
service today. The result in net saving for economy. Secondly, you
persuade people at the right time (the right time from the consumer's
perspective, not from the service provider's perspective) to opt for a tailor
made offering. This too increases value. Actually, this has to do with the
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Now days, all the major banks in India provide online banking. It is offered
freely to all its customers and doesn't require any additional deposits to
be done.
HDFC
HSBC
IDBI
ING Vysya
Axis Bank
Andhra Bank
Bank of Baroda
Bank of India
Citi bank
Indian Bank
There are many banks that avail internet banking to the customers, but
the list of the above banks is the famous banks in INDIA. Online internet
banking is something that you need to have. It's easy, fat, secure and
convenient.
Stop payments
Email queries
ICICI Bank
Account information - Summary of accounts and transactions
Bill payment
HDFC Bank
Real-time account information including transactions
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Depositary account
CHAPTER 7
CONCLUSION:
E-banking has its own advantages and disadvantages. The main
advantege of implementing E-Banking is an increase in customer
satisfaction. This is because customers do not have to go the branches
in order to access their accounts, make withdrawals and deposits. They
can also check it anytime of the day, a feature that physical branches
do not offer thus creating a good relationship with the bank and the
customer. E-Banking is also advantageous not only for customer but
also for the bank because it reduces costs in setting up a branch and
the resources to process transactiions. All these benefits are the reasons
why many banks are already investing in E-Banking.
can transacted with the bank with the bank with visiting it on sitting in
the home.
BIBLIOGRAPHY
BOOKS
Indian Banking In Electronic Era
By-S.S.kaptan
Website:
http://www.indianmba.com
http://www.worldjute.com
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