Law and Practice of Banking

BCOM ‘B’ GROUP 1

 E BANKING

• Electronic banking is a form of banking in which funds are transferred through an exchange of electronic
signals rather than through an exchange of cash, checks, or other types of paper documents. Transfers of
funds occur between financial institutions such as banks and credit unions. They also occur between
financial institutions and commercial institutions such as stores. Whenever someone withdraws cash from an
automated teller machine (ATM) or pays for groceries using a debit card (which draws the amount owed to
the store from a savings or checking account), the funds are transferred via electronic banking.
• For decades financial institutions have used powerful computer networks to automate millions of
daily transactions. In the 1950s the Bank of America was one of the first institutions to develop the
idea that electronic computers could take over the banking tasks of handling checks and balancing
accounts, which was, at that time, extremely labor-intensive. Other institutions gradually joined the
effort and progressed away from using paper checks and toward all-electronic banking. Data-
processing machines, robotic document sorting, and the invention of optical character recognition (a
computer application that translates handwritten or typewritten words into text that can be machine-
edited) were a few of the developments which allowed this evolution.
 Concept of E-Banking
• E-Banking indicated towards the method of utilizing services of banking online upon the
computer network. It is a method with the help of which users use all services of banks through
the online network. It is also defined as internet banking, online banking & virtual banking
(Kaur.2017).Consumers are quickly able to run their accounts & carry out various economic
business dealing just by utilizing services which exists of distinct kinds for example Telebanking,
smart cards, cash machine, Electronic cheques & plastic money.
 Concept of Traditional Banking
• Traditional banking means that the users has to go the bank for the primary banking requirement such as
withdrawal or deposit of cash, funds transfer, verifying statement of accounts etc (Golden.2016). It has been
called as the original banks which was the method of past in the economy. They were the original
commercial mediator to provide bank accounts. From the exterior they had the big buildings with pillars
made by marbles but interior it had abundance of money in box. This has been entitled as “Bank”. They were
big athlete of the commercial markets. They converted the savings of house into loans for business as per an
investment. Traditional Banking designed on IT acceptance. The Indian Banking Sector arises up to the world
of technology in beginning of 1990’s. In India public sector bank has been influenced the banking sector, who
occupied above 80% base of total asset (Chanda. 2012). Difference between Traditional banking and E-
Banking
 Difference
between traditional
banking and E
banking
 TRADITIONAL BANKING
Traditional Practice provides limited coverage.
Traditional Practice does not provide proper
marketing tools.
Traditional Practices involves process which requires
more time.
Traditional banking practices do not provide a
complete check on banking transactions.
Bank executives have to perform a lot of paperwork
which increases both time and cost.
In the case of traditional business, a person has to
carry cash at each point of time.
E- Banking
E-Banking Practices involve global coverage while sitting at
home/office.
E-Banking provides the facility of marketing of products/ schemes
online easily.
E-Banking same lot of line as there is no need to stand in long
queues.
With the system of reconciliation of inter-branch transactions, frauds
and errors could be reduced.
Cost and time could be reduced or everything is to be through some
interval and no need for huge paperwork.
E-banking provides banking without carrying cash as plastic money
(ATMs, Credit cards are available)
Electronic Delivery
channels
 Introduction to Electronic Channels:
• We are all familiar with telephone and television channels and the internet and web, and may be aware of
the other electronic vehicles that are currently at developmental stage. The consumer and business
services that are made possible through these vehicles include movies on demand, interactive news and
music, banking and financial services, multimedia libraries, and databases, distance learning, desktop
video-conferencing, remote health services, and interactive, network-based games. The more a service
relies on technology and/or equipment for service production and the less it relies on fact-to face contact
with service providers, the less the service is characterised by inseparability and non-standardisation.
• Electronic channels are the only service distributors that do not require direct human interaction. What
they do require is some predesigned service (almost always information, education, or entertainment)
and an electronic vehicle to deliver it. Electronic channels overcome some of the problems associated
with service inseparability and allow a form of standardisation not previously possible in most services.
Electronic Channels include all forms of service provision through television, interactive multimedia, and
computers. Many financial and information services are currently distributed through electronic media –
banking, bill paying, education
 Internet Banking:
• In simple way internet banking is nothing but use of banking facility on your computer or mobile with the
help of internet. It is considered as modern form of banking. Internet banking is a complete online banking
system itself and facilitates you to do all banking operations setting at your home. It also helps you to transfer
your fund or make bill payment from any were at home.
 Mobile Banking:
• Mobile banking is most popular method of banking, which assists you to initiate the banking operations on
your mobile phone. All banks are providing their mobile banking application to their customer. You can use
mobile banking for instant fund transfer, payment of bill, view account balance etc.

• Transactions through mobile banking depend on the features of the mobile banking app provided
and typically includes obtaining account balances and lists of latest transactions, electronic bill
payments, remote check deposits, P2P payments, and funds transfers between a customer's or
another's accounts.[1] Some apps also enable copies of statements to be downloaded and
sometimes printed at the customer's premises. Using a mobile banking app increases ease of use,
speed, flexibility and also improves security because it integrates with the user built-in mobile
device security mechanisms.
 UPI – Unified Payments Interface:
• Deliberate efforts are being made at the government level to promote alternative delivery channels in the
banking sector. Due to the complexities in the use of internet banking and mobile banking the use of these
alternative delivery channels in the banking sector has been limited to few people. Due to these simple
methods like UPI and Bhima have been made available to the customers by the Government of India in the
form of Mobile Banking. UPI is real type system of payment developed by NPCI (National Payment
Corporation of India) and controlled by RBI and Indian Bank Association. UPI is a multi-banking system
through which customer can not only transfer money but also send request for money. To use UPI, the
customer has to create his own UPI virtual ID (payment address) therefore; this UPI ID can be easily
identified by another transferor
 E-Wallets
• In today’s age of smart phones, young generation is preferring e-wallet instead of their ATM and Debit card.
E-wallet has become a great option for cashless payment. E-wallet is also known as Digital wallet and it is
electronic software or online service that allows you to transfer fund electronically to other. It also facilitates
storage of entire information of your bank account and reduces the need to enter account detail at the time of
online payment.
• Digital wallets are composed of both digital wallet devices and digital wallet systems. There are dedicated
digital wallet devices such as the biometric wallet by Dunhill, a physical device that holds cash and cards
along with a Bluetooth mobile connection. Presently there are further explorations for smartphones with NFC
digital wallet capabilities, such as smartphones utilizing Google's Android and Apple's iOS operating systems
to power wallets such as Google Pay and Apple Pay.
 ATM, Debit card and Credit Card
• Now a day’s plastic money becomes more popular among the younger generation. This plastic money
includes ATM card, debit card and credit card. These cards are also known as payment card that every
financial institution issue to their customer. Plastic money is mainly used for online transactions. These cards
are most commonly used alternative delivery channels in banking sector. These cards allow cardholder to
transfer money electronically from there account and also help to complete the payment transaction at the
time of shopping.
• ATMs or Automated Teller Machines are mostly used to withdraw cash. If a bank allows it, you can also make deposits into
an account during and outside regular business banking hours. This card can only be used at ATMs and requires a PIN
(Personal Identification Number).

• Credit cards allow a consumer to purchase goods and services by borrowing against an approved line of credit. It is a
loan. Purchases made during the month are billed to the credit card holder, and you will pay the bill at a later date.
PRESENTED BY

ROHAN J

S H R E YA S T G

SAGAR HARITHSA

S U J AY D I X I T H

SUMUKHA JOIS

SHAMAL AHMED