INTERNET BANKING

Meaning and Evolution of Internet Banking

Online banking, also known as internet banking, web banking or home banking, is
an electronic payment system that enables customers of a bank or other financial
institution to conduct a range of financial transactions through the financial institution's
website. The online banking system will typically connect to or be part of the core
banking system operated by a bank to provide customers access to banking services in
place of traditional branch banking. Online banking significantly reduces the banks' operating
cost by reducing reliance on a branch network, and offers greater convenience to customers
in time saving in coming to a branch and the convenience of being able to perform banking
transactions even when branches are closed. Internet banking provides personal and
corporate banking services offering features such as viewing account balances, obtaining
statements, checking recent transactions, transferring money between accounts, and
making payments.
Some banks operate as a "direct bank" (also called "neobanks" or "virtual banks"), where
they operate entirely via internet banking.

First conceptualized in the mid-1970s, some banks offered customers electronic banking
in 1985. However, the lack of Internet users, and costs associated with using online
banking, stunted growth. Many consumers were hesitant to conduct
monetary transactions over the web. It took widespread adoption of
electronic commerce, based on trailblazing companies such as
America Online, Amazon.com and eBay, to make the idea of paying for
items online widespread.  The Internet explosion in the late-1990s made people
more comfortable with making transactions over the web. Despite the dot-com crash, e-
banking grew alongside the Internet.

By 2000, 80 percent of U.S. banks offered e-banking. Customer use

grew slowly. At Bank of America, for example, it took 10 years to
acquire 2 million e-banking customers. However, a significant cultural
change took place after the Y2K scare ended. In 2001, Bank of
America became the first bank to top 3 million online banking
customers, more than 20 percent of its customer base.

BRIEF NOTE

RTGS: Real Time Gross Settlement (RTGS) is an electronic form of funds

transfer where the transmission takes place on a real time basis. It is a
fund transfer method via which money and / or securities is /are sent
immediately without any delays from one bank to another. RTGS is typically
meant for larger value transactions. You can use the net bRTGS is the continuous
process of settling payments on an individual order basis without netting debits with
credits across the books of a central bank.anking or mobile banking facility to
transfer money via RTGS. Settlement in ‘realtime’ means payment transaction is not
subjected to any waiting period. The transaction is settled as soon as they are
processed. “Gross Settlement” means the transaction is settled on one to one basis
without bunching with any other transaction.

Over 60 countries worldwide use RTGS systems. RTGS systems are

typically run by the central bank of a country. Often, these systems are
integral components of the country economy. In India, transfer of funds with
RTGS is done for high value transactions, the minimum amount being Rs 2
lakh. The beneficiary account receives the funds transferred, on a real
time basis. The main difference between RTGS and National Electronic
Funds Transfer (NEFT) is that while transfer via NEFT takes place in
batches (with settlements and transactions being netted off), in the case of
RTGS, the transactions are executed individually and on gross basis.
The customer initiating the funds transfer through RTGS has to have the
Indian Financial System Code (IFSC) of the beneficiary's bank, along with
the name of the beneficiary, account number and name of the bank. The
bank branches, both at the initiating and receiving end, have to be RTGS-
enabled for the transaction to be processed. Customers with Internet
banking accounts can do RTGS transactions on their own.

NEFT (National Electronic Fund transfer)

NEFT started in 2005. National Electronic Fund transfer mechanism
assist fund transfer from one bank to other through RBI server and
settlement occurs on net basis. Every day, RBI system enables 3
sessions of electronic clearing and after the completion of each
session; the net amount will be settled among banks through their
current accounts maintained with RBI. NEFT settlement happens within
24 hours and there is no limit for amount transacted. The condition
here is that, the two branches of bank must be Core Banking Solution
enabled. NEFT is used by many corporates to electronically transfer
money from any bank branch to any individual, firm or corporate having
an account with any other bank branch in the country participating in
the Scheme. 

BENEFITS OF NEFT: You get certain benefits of NEFT (national electronic fund
transfer). Because of the following benefits, this system is still popular in
the age of IMPS and UPI.

 It is a low-cost fund transfer system

 It is an almost instant system. The fund transfer takes place in
batches after every half an hour.
 The NEFT is a convenient system as you can use it sitting in your
home or office.
 You can schedule a payment through the NEFT.
  The system reverses the payment in case it is not credited to the
beneficiary account.

Send Money Through Bank Branch

Sometimes people think that NEFT only works online. But, this system
can be used through the bank branches. You can go to any bank branch
and use NEFT to send money to any bank account. The whole process
goes through the following steps.

1. Visit a bank branch and ask for NEFT form.

2. Fill all the details of the beneficiary.
3. You have to also mention whether you are giving cash or debit
mandate.
4. The bank would accept your form and place order for next batch of
transfer.
5. After 2 hours you can check with the beneficiary.
Send Money Through ATM

Few banks give NEFT fund transfer facility from their ATM. The process
is similar to the offline steps. You have to give beneficiary details and
amount. Finally, you have to enter the amount and your PIN. The
amount would be deducted from your account.
 How Do You Get Money

The beneficiary gets money into the bank account. The money would be
credited same day if it is transferred during working hours. Else, it would
take place on next working day in the morning. You would also get an
SMS of fund credit.

IMPS – Immediate Payment

Service

The full form of IMPS is an Immediate Payment Service. It is one of

the systems used for the purpose of interbank transfer of funds
instantly electronically through different channels like mobile
banking, internet banking, ATM, etc. where the facility of such
transfer is available whole year 24/7, including on the public
holidays and weekends.

Features of IMPS
The following are the different features of the IMPS:

 Unlike RTGS and NEFT, IMPS transactions are not time-bound.

Customers can freely initiate IMPS transactions as and whenever
they feel like without having the compulsion to rely on banking
hours
 IMPS payments can be conducted in various modes such as ATMs,
SMS, bank account, MMID codes, etc. Customers can choose the
 best payment mode they feel is convenient and accordingly choose
to process them.
 The facility of such transfer is available the whole year 24/7,
including on the public holidays and weekends.
 IMPS payments are fast and instant, which allows customers to save
a lot of time.
 IMPS payments are 100% safe and secure, which means customers
will not have to worry about their funds getting stolen in the
process.

How Does IMPS Work?

The customers can use different channels for IMPS transactions that
include a mobile application, internet banking, and ATM. For getting
the transaction done through mobile banking, the mobile number
and MMID of the beneficiary are required, and the transaction can
be verified using the mobile number and MPIN of the transferor.

For getting the transaction done through the internet banking, the
account number and IFSC of the beneficiary are required, and the
transaction can be verified using the internet banking password or
transaction password and OTP of the transferor and forgetting the
transaction done through the ATM, a person only needs valid ATM
card, and the transaction can be verified using the ATM Pin.
In order to transfer the electronically through IMPS mode using
internet banking:

In order to transfer the electronically through IMPS mode using

mobile banking:

E-WALLET
 E-wallet is a type of electronic card which is used for transactions
made online through a computer or a smartphone. Its utility is same as a credit or debit card.
An E-wallet needs to be linked with the individual’s bank account to make payments.
E-wallet is a type of pre-paid account in which a user can store his/her money for any future
online transaction. An E-wallet is protected with a password. With the help of an E-wallet,
one can make payments for groceries, online purchases, and flight tickets, among others.

E-wallet has mainly two components, software and information. The software component
stores personal information and provides security and encryption of the data. The
information component is a database of details provided by the user which includes their
name, shipping address, payment method, amount to be paid, credit or debit card details,
etc.

For setting up an E-wallet account, the user needs to install the software on his/her device,
and enter the relevant information required. After shopping online, the E-wallet automatically
fills in the user’s information on the payment form. To activate the E-wallet, the user needs to
enter his password. Once the online payment is made, the consumer is not required to fill
the order form on any other website as the information gets stored in the database and is
updated automatically.
 Caution to be taken while using ATM, debit and Credit cards

ATM & Debit Card Security Precautions

 Treat your card like cash. Always keep your card in a safe place.
 Keep your PIN a secret. Memorize your PIN and never write it on your card or store it with
your card. Never let someone else enter your PIN for you. If you suspect someone knows
your PIN, notify the bank for assistance immediately.
 Do not disclose information about your card over the telephone. No one needs to know
your PIN, not even your bank. If you perform transactions over the telephone using your
ATM or Debit Card(s), never disclose your PIN.
 Never disclose information about your card in response to an unsolicited email or
request. E-mail is a common channel for fraud perpetration. Never provide your debit or
credit card number, PIN or any other personal information to any entity in response to an
unsolicited e-mail or request. Any Bank will never ask you for your PIN.
 Make sure your Internet shopping sites are secure. Look for secure transaction symbols
when shopping online to ensure your account information is protected. Always logoff from
any site after you make a purchase. If you can’t log off, shut down your browser to prevent
unauthorized access to your account information.
 Report a lost or stolen card at once to reduce the chance that it will be used improperly.
Prompt notice of lost or stolen cards will also limit your potential liability for unauthorized
transactions.
 Review your bank account statements promptly and report any errors including
transactions you believe may be unauthorized as soon as possible. Again, a prompt notice
will limit your potential liability for unauthorized transactions.

ATM Usage Security

 Always observe the ATM surroundings before conducting a transaction. If anyone or
anything appears to be suspicious, leave the area at once.
 If an ATM is obstructed from view or poorly lit, go to another ATM. Report the problem
to the bank that operates the ATM.
 Minimize the time spent at the ATM when conducting a transaction. Have your card out
and ready to use. Do not allow a stranger to assist you in making a transaction, even if you
have trouble or your card gets stuck. If you are doing multiple transactions at a walk-up
ATM, do your cash withdrawals last. Always put your money away quickly and count it when
you are sitting in your locked car.
 Make sure you have finalized the transaction and removed your card before leaving the
ATM. Some ATMs ask if you want “another transaction”. You must reply “No” to close out
your card’s transactions. If you do not close your card’s transactions and remove your card,
the next ATM user can use your card.
 Block the view of others when using the ATM. Shield the keypad as necessary when
entering your PIN and the amount so that it is not seen by anyone waiting.
 If you see anyone or anything suspicious, cancel your transaction and leave the area
at once. If anyone follows you, go immediately to a crowded, well-lit area and call the police.
 Look for possible fraudulent devices attached to the ATM. If the ATM appears to have
any attachments or alterations to the card slot or keypad, do not use the ATM. Report the
potential problem to the bank that operates the ATM.
 When in line at a drive-up ATM, keep your doors locked, windows up and engine running.

ATM and Debit Card Point-of-Sale Security Tips

 When checking out with your purchases, consider using the credit method instead of
debit method. Credit method requires your signature, not your PIN. That way you don’t
have to enter your PIN in view of the people behind you in the checkout lane. If you choose
debit method, block the view of others when using the POS terminal.
 Never allow the cashier or any other person to enter your PIN for you, even if they are
assisting you with the transaction. Always keep your PIN a secret.
 Review your receipt before leaving.
 If you receive cash back from a transaction, put it away before leaving.
 Always observe your surroundings especially when using an outdoor POS terminal such
as at a gas station. Leave the area immediately if anyone or anything appears to be
suspicious.
 Verify your transaction either online on your bank’s website or when you receive your
statement.

Briefly explain some of e-wallets app like Gpay

A mobile wallet or e wallet app or e wallet is an app that consists of your debit and credit
card information which helps the users to pay for goods and services digitally using
their mobile devices. Popular online payment apps or payment apps or e wallet list in India
include: Paytm. Google Pay. Amazon Pay.

Google Pay (stylized as G Pay; formerly Android Pay) is a digital wallet platform and online payment
system developed by Google to power in-app, online, and in-person contactless purchases on mobile
devices, enabling users to make payments with Android phones, tablets, or watches. Users in the
United States and India can also use an iOS device, albeit with limited functionality. In addition to
this, the service also supports passes such as coupons, boarding passes, campus ID cards, car keys,
event tickets, movie tickets, public transportation tickets, store cards, health records, and loyalty
cards.

Google Pay takes advantage of physical authentications such as fingerprint ID where

available. On devices without fingerprint ID, Google Pay is activated with a passcode. When
the user makes a payment to a merchant, Google Pay does not send the credit or debit card
number with the payment. Instead, it generates a virtual account number representing the
user's account information. This service keeps customer payment information private,
sending a one-time security code instead of the card or user details.[4]

Google Pay requires that a screen lock be set on the phone.[5] It has no card limit.[6][7][8]

Users can add payment cards to the service by taking a photo of the card, or by entering the
card information manually. To pay at points of sale, users hold their authenticated device to
the point of sale system. The service has smart-authentication, allowing the system to detect
when the device is considered secure (for instance if unlocked in the last five minutes) and
challenge if necessary for unlock information.[9] Spring CEO Alan Tisch said Google Pay
improves mobile shopping business by supporting a "buy button" powered by Google Pay
integrated within vendor's creative design.

CREDIT CARD FRAUD

Credit card fraud is an inclusive term for fraud committed using a payment card, such as
a credit card or debit card.[1] The purpose may be to obtain goods or services or to make payment
to another account, which is controlled by a criminal. The Payment Card Industry Data Security
Standard (PCI DSS) is the data security standard created to help financial institutions process
card payments securely and reduce card fraud.[2]
Credit card fraud can be authorised, where the genuine customer themselves processes a
payment to another account which is controlled by a criminal, or unauthorised, where the account
holder does not provide authorisation for the payment to proceed and the transaction is carried
out by a third party. In 2018, unauthorised financial fraud losses across payment cards and
remote banking totalled £844.8 million in the United Kingdom. Whereas banks and card
companies prevented £1.66 billion in unauthorised fraud in 2018. That is the equivalent to £2 in
every £3 of attempted fraud being stopped. [3]
Credit cards are more secure than ever, with regulators, card providers and banks taking
considerable time and effort to collaborate with investigators worldwide to ensure fraudsters
aren't successful. Cardholders' money is usually protected from scammers with regulations that
make the card provider and bank accountable. The technology and security measures behind
credit cards are becoming increasingly sophisticated making it harder for fraudsters to steal
money.

Types of payment card fraud

Application fraud
Application fraud takes place when a person uses stolen or fake documents to open an account
in another person's name. When an account is opened using fake or stolen documents, the
fraudster could then withdraw cash or obtain credit in the victim's name.

Account takeover

An account takeover refers to the act by which fraudsters will attempt to assume control of a
customer's account (i.e. credit cards, email, banks, SIM card and more). Control at the account
level offers high returns for fraudsters. A fraudster uses parts of the victim's identity such as an
email address to gain access to financial accounts. This individual then intercepts communication
about the account to keep the victim blind to any threats. Victims are often the first to detect
account takeover when they discover charges on monthly statements they did not authorize or
multiple questionable withdrawals.

Among some of the most common methods by which a fraudster will commit an account
takeover include proxy-based "checker" one-click apps, brute-force botnet attacks, phishing,
[12]
 and malware. Other methods include dumpster diving to find personal information in discarded
mail, and outright buying lists of 'Fullz,' a slang term for full packages of identifying information
sold on the black market.

Social engineering fraud

Social engineering fraud can occur when a criminal poses as someone else which results in a
voluntary transfer of money or information to the fraudster. A common tactic is sending spoof
emails impersonating a senior member of staff and trying to deceive employees into transferring
money to a fraudulent bank account. Telephone phishing is the most common social
engineering technique to gain the trust of the victim.

Skimming
Skimming is the theft of personal information which has been used in an otherwise normal
transaction. The thief can procure a victim's card number by using a small electronic device
(skimmer) to swipe and store hundreds of victims' card numbers. Common scenarios for
skimming are taxis, restaurants or bars where the skimmer has possession of the victim's
payment card out of their immediate view.[16] The thief may also use a small keypad to
unobtrusively transcribe the three or four-digit card security code, which is not present on the
magnetic strip.

Call centers are another area where skimming can easily occur.[17] Skimming can also occur at
merchants when a third-party card-reading device is installed either outside a card-swiping
terminal. This device allows a thief to capture a customer's card information, including their PIN,
with each card swipe.

Instances of skimming have been reported where the perpetrator has put over the card slot of an
ATM (automated teller machine) a device that reads the magnetic strip as the user unknowingly
passes their card through it.[19] These devices are often used in conjunction with a miniature
camera to read the user's PIN at the same time.[20] This method is being used in many parts of
the world, including South America, Argentina,[21] and Europe.

Unexpected repeat billing

Online bill paying or internet purchases utilizing a bank account are a source for repeat billing
known as "recurring bank charges". These are standing orders or banker's orders from a
customer to honor and pay a certain amount every month to the payee.
Increasing losses year – on- year due to online frauds

Case study on any two Internet banking fraud that has taken place in India

After a week-long probe, the Kozhikode Rural police have arrested two
engineering graduates who allegedly tapped the debit card details of many
customers using skimmers at different ATM counters and exchanged it
with a gang of fraudsters from North India.

P.K. Jubair of Villiappally and M.K. Shibin of Kayakkodi were arrested by

a special investigation squad led by Deputy Superintendent of Police
Moosa Vallikkadan on Wednesday.

It was the first time that locals suspected of colluding with kingpins in
banking frauds were being arrested in the district. It would be a turning
point in similar investigations, said the police. They said the special squad
had secured clear evidence about the visit of a three-member group from
North India to meet Jubair and Shibin to plan the theft. According to the
officers, the group was in the district between February 10 and February
16. Their details were collected after visiting a lodge in Vadakara.

Officers part of the investigation said the two youths from the district
allegedly used skimmers to get the debit card details of customers and
exchanged it for a commission. Customers who visited the Punjab
National Bank and State Bank of India ATMs near the Vadakara bus stand
were the main victims. Since March 23, the police had received more than
10 complaints in which the customers claimed to have lost money from
their bank accounts.
Following the arrest, the police asked the ATM cardholders in Vadakara to change
their PIN for safety reasons. They have intensified the probe for tracing the three
persons who reportedly withdrew the amount using the tapped card details.

UNAUTHORISED ELECTRONIC BANKING

TRANSACTIONS OF ₹ 31.5 LAKHS

 After a hard day at office, the official SIM card of an accountant of a Car Dealer got
deactivated in the evening. Even after multiple restarts there was no signal. Suspecting
no foul play, he decided to investigate into it the next morning.
 When he registered a complaint with the cellular service provider, he came to know that
someone had submitted forged documents to get a duplicate sim card. Luckily the
cellular service provider quickly restored his service. As soon as the cell phone started
receiving the signal, the accountant received multiple messages for fund transfer via
RTGS totaling to ₹ 31, 50,000/- that were successfully disbursed.
 Panicked by the multiple SMS, the accountant tried to access his internet banking
account by using the customer id and password. However, the net banking website
showed that the password was incorrect. Evidently, the unscrupulous person had got
unauthorized access to the internet banking account of the customer and he managed to
get a duplicate sim card where the OTP was received for validating the transaction.
 He immediately rushed to the bank and asked the officials to stop all the transfers only to
know that cash was already withdrawn from few accounts where the funds were
transferred. Fortunately, his timely intervention and Bank Official’s co-operation he
managed to stop payment worth ₹ 20,00,000/-
 Knowing only one vendor who could provide techno-legal expertise in this matter, the
owner of the dealership called up ANA Cyber Forensic Pvt. Ltd. for assistance.
 A complaint was made on the official website of the bank on the immediate next day.
Analysing the various RBI circulars, our cyber legal team drafted an official complaint
letter to the Branch manager asking for crediting back the funds within 10 days for the
balance amount of ₹ 11,50,000.
 Bank failed to respond within 10 days. So, ANA Cyber Forensic sent one more letter
including more legalities while looping in the top management of the bank. This triggered
a response from the bank where they mentioned that they were still investigating and
needed more time. When the bank failed to settle within 30 days of the complaint, ANA
Cyber Forensic took up the matter with RBI Ombudsman.
 Finally, the bank agreed to credit back the balance funds and continue their investigation.
Our client receives back the entire amount that was fraudulently siphoned off from their
bank accounts. 
https://www.thehindu.com/news/cities/kozhikode/two-held-in-online-banking-fraud-case/
article34218974.ece

CONCLUSION
The mobile and wireless market has been one of the fastest growing markets in the
world.  The arrival of technology and the escalating use of  mobile and smart phone
devices, has given the banking industry a new platform.  Connecting a customer anytime
and anywhere to their  money and needs is a must have service that has become an
unstoppable necessity.  This worldwide communication is leading a new generation of
strong banking relationships. The banking world can achieve superior interactions with
their public base if they accommodate all  their customer needs.  They have a unique
challenge to keep their customer alliances and keeping up with the new technologies,
and  competitive strategies that other banks also have to offer the public. Conveniences
of services plus outside locations like ATMS are crucial to every banks success. Meeting
all challenges including safety and security are perfect examples of good banking
strategies. In order for the financial institutions to effectively grow they must embrace
the new technologies and customize them to suit their economic success and the public’s
success.

Online banking is certainly here to stay. Online banking is a necessity for the bank's that
we studied and others in order for them to stay in business. While its
existence doesn't necessary give them a competitive edge because it is so common
place, it is truly a cost of doing business.

As a tool of modern living and as a lifestyle aid, it is absolutely indispensable. The fact is
that many services that are now being offered with online banking are almost impossible
to do conveniently with regular banking. 

As we venture into the future, the internet will undoubtedly continue to change the
banking industry. 

https://whatis.techtarget.com/definition/Real-time-gross-settlement-RTGS
https://en.wikipedia.org/wiki/Online_banking

https://bankguruji.com/what-is-neft.html

https://upipayments.co.in/neft-meaning-details/

https://www.wallstreetmojo.com/full-form-of-imps/

https://economictimes.indiatimes.com/definition/e-wallets

https://www.stillmanbank.com/consumer-news/atm-debit-card-security-precautions/

https://en.wikipedia.org/wiki/Credit_card_fraud

https://sites.google.com/site/bankingindustryandtheinternet/financial-information