Prof. (Dr.) V.

Balakista Reddy Professor of International Law & Head, Centre for Air & Space Law NALSAR University of Law, Hyderabad E-mail: balakistareddy@yahoo.com Web: www.nalsar.ac.in

electronic mail.Introduction  ‘Internet banking’ refers to systems that enable bank customers to access accounts and general information on bank products and services through a personal computer (PC). websites.  Today. and electronic bill payment systems are an important way for banks to reach their customers .

.Role of Financial system  a number of entities that work together to permit the transfer of value of financial claims by means of systematic procedures. communicating and storing of digital data as value.  the newer systems for electronic payment has introduced new roles for example.  entities known as financial intermediaries participate. Thus entities such as digital service provides and certification authorities now participate directly in these payment system.  The financial system lubricate the wheels of commerce. The processing. modern commerce would grind to a halt without the payment systems are regarded as an exciting and strategically crucial feature of electronic commerce.

 recent times.Meaning of E.  For customers.  Some time in the form of automatic teller machines (ATMs) and telephone transactions. it has been transformed by the internet . the internet offers faster access.Banking  e-banking implies provision of banking products and services through electronic delivery channels. .a new delivery channel that has facilitated banking transactions for both customers and banks. is more convenient and available around the clock irrespective of customers location.

internet for delivery of banking products and services no longer confined to the branches In true internet banking. Providing internet banking is increasingly becoming a ‘need to have’ than a ‘nice to have’ service.Need of E. The internet. opportunities to expand or change their product and service offerings.enabling technology-has made banking products and services available to more customers by eliminating geographic and proprietary systems barriers. any inquiry or transaction is processed online without any reference to the branch at any time.Banking  widespread growth of the internet  customers may use this technology anywhere in the world to      access a bank’s network. .

classical economic theories of market functioning. moved real banking behavior closer to neo. clients (both business as well as retail) can compare the services of various banks more easily. internet has facilitated its transmission electronic banking services. the internet has significantly reduced the physical costs of banking operations. whether delivered online or through other mechanisms . change strategic behaviour and thus bring      about new possibilities. absolute transparency of the market.New opportunities offered by ebanking -Business Strategies  to scale borders.

by whom and to whom.The Payment Systems  Money  The term “money’ is a generic one that can be applies to a wide array of objects depending on the context.  Characteristics of money  Acts as a medium of exchange  Act as a unit of exchange  a measure of what is owed.  Act as a means of final payment .

Paying for goods and Services in the traditional way A service is provided or a product is manufactured The service or product is brought and paid for with cash or by card Product or service Payment (Cash or Card) Bank .

Paying for goods and services using Electronic technology Providing a service or manufacturing a product Seller’s Computer Buyers Computer Electronic transfer of value Product or service received BANK .

Continue  Automated Teller Machines  Electronic Fund Transfer at the Point of Sale (EFTPOS)  These transactions incorporate from point of sale.  Online Payment Process  Who are the participants involved in an online transaction?  What are the various payment modes?  How the online transaction process works?  Participants        The participants involved in an online transaction are: Customer Merchant Card issuer/ customer’s bank Merchant’s bank Acquirer Payment gateways  Payment Modes  Cash  Cheque  Credit . typically at a payment terminal within the premises of merchants.

Electronic Payment System Risks  Credit risk:  Liquidity risk:  Transaction risk  Strategic risks  Reputation Risk:  Compliance risk  Foreign exchange risk .

 Reduces paper work  Minimise Frauds  High Productivity  Advertising Tool .ADVANTAGES OF E-BANKING  Benefits to Customers  Anytime Banking  Anywhere Banking  Quick Service  Saving in Time  Customer Satisfaction.  Benefits to Banks  Minimise cost  Global Coverage  Central Data Base  Customer-Bank Relationship.

 Benefits to Merchants Traders  Minimise Risk  Instant Settlement  Promotions of business enterprises  Increased purchasing .Continue  Benefits to Government  Global Market  Cash less Banking  Transparency.

LIMITATION OF E-BANKING  Banking System not Ready  Laws of Land Not Ready  Lack of Infrastructure Facilities  adequate steps have not yet been taken (facilities )  Security Issue  Costly  Low level of Awareness  Hesitation on the part of Customers  Lack of Initiative  Insignificant Role of Govt .

Thank You .

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