Chapter - 1

Introduction

EXECUTIVE SUMMARY

While financial institutions took steps to implement E-banking services in the mid

1990s, more consumers were hesitant to conduct financial 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. 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. In comparison,

larger national institutions, such as Citigroup claimed 2.2 million online relationships

globally, while J.P. Morgan Chase estimated it had over 750,000 online banking

customers. Wells Fargo had 2.5 million online banking customers, including small

businesses. Online customers customers proved more loyal and profitable than regular

customers. In October 2001, Bank of America customers executed a record 3.1

million electronic bill payments, totaling more than $1 billion. In 2009, a report by

Gartner Group estimated that 47 % of U.S. adults and 30 % in the United Kingdom

bank online.

The first online banking service in United States was introduced, in October 1994.

The service was developed by Stanford Federal Credit Union, which is a financial
institution. The online banking services are becoming more prevalent due to the well-

developed systems. Though there are pros and cons of electronic cash, it has become a

revolution that is enhancing the banking sector.

E-BANKING

MEANING:-

Internet banking is the term used for new age banking system. Internet

banking is also called a online banking and it is an outgrowth of PC

banking. Internet banking uses the internet as the delivery channel by

which to conduct banking activity, for example, transferring funds,

paying bills, viewing checking and savings account balances, paying

mortgages and purchasing financial instruments and certificates of

deposits (Haque et al, 2009). Internet banking is a result of explored

possibility to use internet application in one of the various domains of

commerce. It is difficult to infer whether the internet tool has been

applied for convenience of bankers or for the customers’ convenience.

But ultimately it contributes in increasing the efficiency of the banking

operation as well providing more convenience to customers. Without

even interacting with the bankers, customers transact from one corner of

the country to another corner. 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 minuscule

cost (IAMAI’s, 2006). Electronic banking has experienced explosive

growth and has transformed traditional practices in banking (Gonzalez et

banking services in the banking industry. Private Banks, due to late entry

into the industry, understood that the establishing network in remote

corners of the country is a very difficult task. It was clear to them that the

only way to stay connected to the customers at any place and at anytime

is through internet applications. They took the internet applications as

a weapon of competitive advantage to corner the great monoliths like

State Bank of India, Indian Bank etc. Private Banks are pioneer in India

to explore the versatility of internet applications in delivering services to

customers. As per prediction of Broadie et al(2007)the e- banking is

leading to a paradigm shift in marketing practices resulting in high

performance in the banking industry. Delivery of service in banking can

be provided efficiently only when the back ground operations are

efficient. An efficient back ground operation can be conducted only when

it is integrated by an electronic system. Then components like data,

hardware, software, network and people are the essential elements of the

system.

Internet enabled electronic system facilitate the operation to fetch

these result. An in-depth analysis would help to understand that internet

enabled electronic bank system differentiates from traditional banking

operation through faster delivery of information from the customer and

service provider. Additionally, it has to be noted that the banking

information about the value for currencies. I-banks enable transfer of

information more swiftly on- line. ( Salawu et.al, 2007). In service

organizations like banks, information flows more than physical items. In

the commercial world, especially in most advanced societies today,

money is rather carried in information storage medium such as cheques,

credit cards and electronic means that in its pure cash form. According to

christopher et al (2006), E banking has become an important channel to

sell the products and services and is perceived to be necessity in order to

stay profitable in successful. The perception is the formed as a result of

interpreting the experience. There is a growing interest in understanding

the users’ experience (Hiltunen et al.,2002 .); as it is observed as a larger

concept than user satisfaction. From this perspective ,assessing the user

experience is essential for many technology products and services

(Wilson & Sasse, 2004) Customers have started perceiving the services of

bank through internet as a prime attractive feature than any other prime

product features of the bank. Customers have started evaluating the banks

based on the convenience and comforts it provides to them. Bankers have

started developing various product features and services using internet

applications.

Definition of E-Banking:-

E-banking is defined as the automated delivery of new and traditional banking

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 personal digital assistant assistant (PDA), automated teller machine

(ATM), 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 Internet's widely accessible public network. Accordingly, this

booklet begins with a discussion discussion of the two primary types of Internet websites:

informational and transactional.

E Banking is your personal banking service on the Internet, protected with bank

identifiers. It is available anywhere, anytime. E Banking allows you to pay invoices to

Finnish and foreign recipients easily and securely. You can also check your account

balances and transactions. You can order a new card, withdraw a loan granted to you

and make mutual fund subscriptions .You access E Banking services by obtaining

bank identifiers. E Banking as such is free of charge but commissions commissions and fees in

accordance with the service tariff will be levied on orders and other transactions

carried out through e Banking. E Banking allows you to pay invoices to finish and

foreign recipients easily and securely. You can also check your account balances and

transactions.
You can order a new card, withdraw a loan granted to you and make mutual fund

subscriptions. You access E-Banking services by obtaining bank identifiers. E-

Banking as such is free of charge but commissions and fees in accordance with the

service tariff will be levied on orders and other transactions carried out through E-

Banking.

The last decade has witnessed a drastic change in the economic and banking

environment all over the world. With the economic and financial sector reforms

introduced in the country since early 1990s, the operating environment for banks in

India also undergone a rapid change. The process of deregulation and reforms in the

Indian banking system resulted in the creation of an efficient and competitive banking

system. Deregulation has opened up new vistas for banks to extend their revenues by

diversifying into universal banking, investment banking, bank assurance, mortgage

financing, depository services, securitization, personal banking etc. At the same time,

liberalization has opened the turf to new players and brought greater competition

among banks. To survive the competition, the information & communication

technology significantly contributed to the growth and profit of financial institutions worldwide.

Technology is the key to move towards providing integrated banking

services to customers. Indian banks are late starter in the adoption of technology for

automation of processes and the integrated banking services. But with the global

adoption of technology, Indian banking is also at the threshold of paradigm shift due
to the latest changes. There are various factors which have played important role in

the Indian banking sector for adoption of technology. Firstly, the economic reforms

introduced by the government almost fifteen years back which resulted in opening up

of new vistas for banks outside the country. E-banking is defined as the automated

delivery of new and traditional banking products and services directly to the

customers through multiple electronic means ADCs like ATM, IB, MB, etc.

E-banking was firstly introduced in India by the ICICI around 1996. E-banking

includes the systems that enable financial institutions, customers and individuals or

businesses businesses to access accounts, transact business business or obtain information of financial

of financial products and service through a public or private network, including the internet.

E-banking revolution provides new opportunities like Payment and Settlement .E- banking creates ‘huge

world of customer convenience’ With continuing technoloy

evolution and changing demographic preferences banks all over the world keep

finding new channels to put their money on . E-banking improves the internal

working of a bank and ensures customer satisfaction. It facilitates market penetration

and growth in customer base without any geographical constraints or time-based

limitations. Customers are influenced to use electronic channels to conduct their

banking transactions due to the benefits gained from E-banking services. They are

tremendous reduction in transaction costs, world over delivery of banking services,

real-time information, real-time transaction, absence of geographical and time

constraints, better employee-customer social relationship, publicity of innovative and

globally accepted products/services, confidence of customers in the low-cost and cost-

banks(‘click and portal’), better quality service, increased speed, increased efficiency,

touch-screen technology, convenient and cheaper electronic channels, easy, fast,

efficient and secured financial services at reasonable costs, single window servicing,

convenience for customers at their options to transact from anywhere, at anytime andusing any delivery

channel that are suitable for them, minimizing personal visit to the

branch premises and more suitability for changing demographic demographic preferences, etc.

Thus, customers are embracing all the above benefits of E-banking. E-banking

enables banks to provide good, superior, very high quality customer service as well as

to offer a broad range of products and/or services to customers. It maximizes returns,

acquires more customers and builds the customer product ratio, extends their reach

and increases their contact with multi platform consumers and ensures one’s privacy

and trust. These features enhance customer satisfaction. When the customers adopt E-

banking they have increased expectations about service and support to enable them to

banking on-line. Thus, E-banking services have become the virtual main street of the

world. The Internet has created a new economic ecosystem. On October 18, 1995

Security First Network Bank opened to the public as world’s first Internet bank. ICICI

bank introduced IB first in India. Advent and adoption of Internet by the industries

have removed the constraints of time, distance and communication making globe truly

a small village. Financial sector is no exception. Numerous factors such as

competitive cost, customer service, increase in education and income level of

customers, cheapness, convenience speed, security, accessibility at anytime and at

anywhere in the world, etc. influence banks to evaluate their technology and assess
their electronic commerce and IB strategies. IB is a powerful technological innovation

which has the power to increase not only customer satisfaction but also the bank’s

profitability. It holds the potential to drive the future of banking. It provides various

types of new innovative products and /or services to customers like account enquiry,

fund transfer, payment of utility bills, etc. It increases operational efficiencies and

reduces costs. Online banking plays a very important role in capital market

transactions too.

The various payment and settlement systems through IB in Indian banking system are

MICR, Electronic Clearing Service (ECS), EFT, Centralised Funds Message Service

(CFMS), National Deferred System (NDS), INFINET, RTGS, etc. Out of various

ADCs, the IB is emerging as a most cost effective and convenient and a delightful

channel to the banks as well as customers due to its inherent advantages. 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. Directly deposit your pay check intoyour bank or credit

union bank account. Withdraw cash from your bank account from

an ATM machine with a personal identification number (PIN), at your convenience.

Instruct your bank or credit union to mechanically pay few monthly bills from your

account, such as your auto loan or your mortgage payment. Have the bank or credit

union transfer funds monthly from your bank account to your mutual fund account.

Have your government social security benefits check or your tax refund deposited

directly into your bank 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 to be used rather than cash

at a pay phone, expressway road toll, or on college campuses at the library’s

photocopy machine or bookstores. Use your pc and private finance software to

coordinate your total personal monetary management process, integrating data and

activities related to your income, spending, saving, investing, recordkeeping, bill-

paying and taxes, alongside basic monetary analysis and decision making.

HISTORY OF E - BANKING IN INDIA

In India, since 1997, when the ICICI Bank first offered internet banking services, today,

most new-generation banks offer the same to their customers. In fact, all major banks

provide e-banking services to their customer. India is still in the early stages of E-

banking growth and development. Competition and changes in technology and

lifestyle in the last five years have changed the face of banking. The changes that have

taken place impose on banks tough standards of competition and compliance. The

issue here is – ‘Where does India stand in the scheme of E- banking.’ E-banking is

likely to bring a host of opportunities as well as unprecedented risks to the

fundamental nature of banking in India.

The impact of E- Banking in India is not yet apparent. Many global research

companies believe that E-banking adoption in India in the near future would be slow
compared to other major Asian countries. Indian E-banking is still nascent, although it

is fast becoming a strategic necessity for most commercial banks, as competition

increases from private banks and non banking financial institutions. Despite the global economic

challenges facing the IT software and services sector, the outlook for the

Indian industry remains optimistic.

The Reserve Bank of India has also set up a “Working Group on E -banking to

examine different aspects of E-banking. The group focused on three major areas of

E-banking i.e. (1) Technology and Security issues (2) Legal issues and (3) Regulatory

and Supervisory issues. RBI has accepted the guidelines of the group and they provide

a good insight into the security requirements of E-banking.

The importance of the impact of technology and information security cannot be

doubted. Technological developments have been one of the key drivers of the global

economy and represent an instrument that if exploited well can boost the efficiency

and competitivity of the banking sector. However, the rapid growth of the Internet has

introduced a completely new level of security related problems. The problem here is

that since the Internet is not a regulated technology and it is readily accessible to

millions of people, there will always be people who want to use it to make illicit

gains. The security issue can be addressed at three levels. The first is the security of

customer information as it is sent from the customer’s PC to the Web server. The

second is the security of the environment in which the Internet banking server and

customer information database reside. Third, security measures must be in place to

the website.

SERVICES PROVIDED BY INTERNET BANKING

• RETAIL BANKING: The Retail banking application is an integration of several

functional areas, and enables customers to:

• Issue Demand Drafts online

• Transfer funds to own and third party accounts

• Credit beneficiary accounts using the VISA Money Transfer, RTGS/NEFT feature

• Generate account statements

• Setup Standing Instructions

• Configure profile settings

• Use e-Tax for online tax payment

• Use e-Pay for automatic bill payments

• Interface with merchants for railway and airline reservations

• Avail DEMAT and IPO services

• CORPORATE BANKING: The Online SBI corporate banking application provides

• features to administer and manage corporate accounts online. The corporate module

• provides roles such as Regulator, Admin, Up loader, Transaction Maker, Authorizer,

• and Auditor. These roles have access to the following functions:

• Manage users, define rights and transaction rules on corporate accounts

• Access accounts in several branches with a single sign-on mechanism

• Upload files to make bulk transactions to third parties, supplier, vendor and tax
• collection

• authorities.

• Use online transactional features such as fund transfer to own accounts, third party

• payments, and draft issues

• Make bill payments bill payments over the Internet.

• Authorize, modify, reschedule and cancel transactions, based on rights assigned to

• the user

• Generate account statement

• Enquire on transaction details or current balance

• VALUE ADDED SERVICES

• Tax payments to central and state governments through site to site integration.

• Supply Chain Finance ( e-VFS- Electronic Vendor Finance Scheme)

• Direct Debit Facility

• E Collection Facilities for:

• Core Banking Transactions

• Internet Bank transactions for incoming RTGS/NEFT Transactions

• Internet banking transactions for SBI and associate banks

• Debit facility where suppliers can directly debit their customer s account through

• internet ‟

• banking

• PRODUCTS & SERVICES

• E-Ticketing

• SBI E-Tax
• Bill Payment

• RTGS/NEFT

• E-Payment

• Fund Transfer Fund Transfer

• Third Party Transfer

• Demand Draft

• Cheque Book Request

• Account Opening Request

• Account Statement

• Transaction Enquiry

• Demat Account Statement

E-TICKETING:

You can book your railway, air and bus tickets online through Online SBI. To book

your train ticket, just log on to irctc.co.in and create an ID there at if you do not have

one. Submit your travel plan and book the ticket(s)-either i-ticket (where the delivery

of tickets will be made at your address) or E-tickets (wherein after successful payment

transactions, an e-ticket is generated which can be printed any time. For an e-ticket,

the details of photo identity card will required to be filled in) and select State Bank of

India in the payment options. You will be redirected to Internet Banking site of SBI
(www.onlinesbi.com). After submitting the respective ID and password, you can

select your account. After a successful debit, Railways will generate the ticket. E-

ticket can be printed by you whereas the i-ticket will be dispatched by IRCTC at the

given address. Service charges @ Rs.10/- per transaction shall be levied in addition to

the cost of the ticket. Cancellation of E-ticket can be done by logging on to IRCTC's

site; refund amount will be credited to your account directly within 2-3 days. For

cancellation of i-ticket, you shall be required to submit your ticket at a computerized

counter of Railways and on cancellation; the amount shall be credited back to your

account. You can also book your Air ticket through the e-ticketing feature. Logon to

Indian Airlines website to make a payment for an e-ticket through State Bank of

India, you need to select SBI as the payment option. The payment request will be

redirected to Internet Banking site. The request may be processed based on values

sent from the airlines website. Once a transaction is processed, an appropriate

response will be sent to airlines site to update the status of the transaction. You can

print the E-ticket immediately .To book bus tickets to destinations in Karnataka, logon to the

KSRTC website. Provide details about the start and end points of your

journey, date of journey and number of tickets. Verify availability of seats on the

selected date and confirm the transaction. Select „Online SBI to ‟make the payment.

Provide your credentials and select the SBI account that will be debited for the

payment. You are provided a KSRTC reference number for your e-Ticket.

BILL PAYMENT

A simple and convenient service for viewing and paying your bills online. No more
late payments No more queues No more hassles of depositing cheques .Using the bill

payment you can view and pay various bills online, directly from your SBI account.

You can pay telephone, electricity, insurance, credit cards and other bills from the

comfort of your house or office, 24 hours a day, 365 days a year. Simply logon to

http://www.onlinesbi.com/ with your credentials and register the biller to which you

want to pay, with all the bill details. Once the bill is uploaded by the biller, you can

make payment online.You can see 'how do i' to learn the steps for using the

facility.You can also set up Auto Pay instructions with an upper limit to ensure that

your bills are paid automatically whenever they are due. The upper limit ensures that

only bills within the specified limit are paid automatically, thereby providing you

complete control over these payments. The e-PAY service is available in various

cities across the country and you can now make payments to several billers in your

region.

RTGS/NEFT

You can transfer money from your State Bank account to accounts in other banks

using the RTGS/NEFT service. The RTGS system facilitates transfer of funds from

accounts in one bank to another on a "real time" and on "gross settlement" basis. This

system is the fastest possible interbank money transfer facility available through

secure banking channels in India. RTGS transaction requests will be sent to RBI

immediately during working hours post working hours requests are registered and

sent to RBI on next working day. You can also schedule a transaction for a future

date. You can transfer an amount of Rs.1 lac and above using RTGS system.National
Electronic Funds Transfer (NEFT) facilitates transfer of funds to the credit account

with the other participating bank. RBI acts as the service provider and transfers the

credit to the other bank's account.

E-PAYMENT

You can pay your insurance premium, mobile phone bills and also you can purchase

mutual fund units by coming from the biller s website and selecting state bank of

India in the payment ‟option. LIC PREMIUM: For paying premium of LIC policy

logon to www.licindia.com and register your policy details. When the premium is due

select State Bank of India in the make payment option. SBI Mutual FUND: You can

invest in the SBI Mutual Fund schemes online. Logon to www.sbimf.com and selectthe

scheme in which you want to make investment in the payment option select State

Bank of India.CC Avenue: Enjoy shopping at the CC Avenue Shopping Mall and

purchase from a wide variety of products and services through CC Avenue Certified

Vendors. Make payments for your purchases using your Internet enabled SBI

accounts.

FUND TRANSFER

The Funds Transfer facility enables you to transfer funds within your accounts in the

same branch or other branches. You can transfer aggregating Rs.1 lakh per day to own

accounts in the same branch and other branches. To make a funds transfer, you should

be an active Internet Banking user with transaction rights. Funds transfer to PPF

account is restricted to the same branch. Just log on to retail section of the Internet
Banking site with your credentials and select the Funds Transfer link under

Payments/Transfers tab. You can see all your online debit and credit accounts. Select

the debit account from which you wish to transfer funds and the credit account into

which the amount is to be credited. Enter the amount and remarks. The remarks will

be displayed in your accounts statement for this transaction. You will be displayed the

last five funds transfer operations on your accounts. On confirming the transaction,

you will be displayed a confirmation page with the details of the transaction and the

option to submit or cancel the funds transfer request. A reference number will be

generated for your record.

THIRD PARTY TRANSFER

You can transfer funds to your trusted third parties by adding them as third party

accounts. The beneficiary account should be any branch SBI. Transfer is instant. You

can do any number of transactions in a day for amount aggregating Rs.1lakh.

To transfer funds to third party having account in SBI, you need to add and approve a

third party ,you need to register your mobile number in personal details link under

profile section. You will receive a One Time SMS password on your mobile phone to

approve a third party. If you do not have a mobile number, third party approval will

be handled by your branch. Only after approval of third party, you will be able to

transfer funds to the third party. You can set limits for third party transactions made

from your accounts or even set limits for individual third parties.

DEMAND DRAFT
The Internet Banking application enables you to register demand drafts requests

online. You can set limits for demand drafts

issued from your accounts or use the bank specified limit for demand drafts. You can

opt to collect the draft in person at your branch, quoting a reference to the transaction.

A printed advice can also be obtained from the site for your record. Alternatively, you may

request the branch to courier it to your registered address, and

the courier charges will be recovered from you.

CHEQUE BOOK REQUEST

You can request for a cheque book online. Cheque book can be requested for any of

your Savings, Current, Cash Credit, and Over Draft accounts. You can opt for cheque

books with 25, 50 or 100 cheque leaves. You can either collect it from branch or

request your branch to send it by post or courier. You can opt to get the cheque book

delivered at your registered address or you can provide an alternate address. Cheque

books will be dispatched within 3 working days from the date of request. Just log on

to retail section of the Internet Banking site with your credentials and select the

Cheque Book link under Requests tab. You can view all your transaction accounts.

Select the account for which you require a cheque book; enter the number of cheque

leaves required and the mode of delivery. Then, submit the same.

ACCOUNT OPENING REQUEST

It enables you to open a new account online. You can apply for a new account only in

branches where you already have accounts. You should have an INB-enabled account
with transaction right in the branch. Funds in an existing account are used to open the

new account. You can open Savings, Current, Term Deposit and Recurring Deposit

accounts of Residents, NRO and NRE types. Just log on to retail section of the

Internet Banking site with your credentials and select the New

Account link under Requests tab. You can see all types of accounts. Select the

account and account type you wish to open and submit the same. Then, you need to

select the branch and enter the initial amount to open the account. You can select any

of your accounts for debiting the initial amount. Then, submit the transaction. Your

new account opening request will be processed by the branch.

ACCOUNT STATEMENT

The Internet Banking application can generate an online, downloadable account

statement for any of your accounts for any date range and for any account mapped to

your username. The statement includes the transaction details, opening, closing and

accumulated balance in the account. You can generate the online account statement

for any date range or for any month and year. The account statement can be viewed

online, printed or downloaded as an Excel or PDF file. You also have the option to

select the number of records displayed in each page of the statement. The options are

25, 50, 75, 100 and ALL.

TRANSACTION ENQUIRY

It provides features to enquire status of online transactions. You can view and verify
transaction details and the current status of transactions. Your VISA transactions can also be

viewed separately. Just log on to retail section of the Internet Banking site

with your credentials and select the Status Enquiry link under the Enquiries tab. You

will be displayed all online transactions you have performed. To view details of

individual transactions, you need to click the Transaction Reference number link. You

are displayed the debit and credit account details, transaction amount, narration and

transaction status.

DEMAT ACCOUNT STATEMENT

This enables you to view Demat account statement and maintain such accounts. The

bank acts as your depository participant. In the third party site, you can mark a lien on

your Demat accounts and use the funds to trade on stock using funds in your SBI

savings account. You can view Demat account details, and generate the following

statements: statement of holding, statement of transactions, statement of billing.

DONATION

You can make donation to religious and charitable institution by using Internet

Banking of SBI. After selecting the debit account select the religious/charitable

institution that you want to offer donation. After successful payment you can print an

E-receipt for the donation made.

ADVANTAGES OF ELECTRONIC BANKING :-

Now it is also called on line or home banking electronic banking was stared with the

use of proprietary software. Following are the important advantages of electronic

banking:
1. Paper Work Reduced :-

The traditional procedure of banking is manual and paper based. Electronic banking is

gradually replacing the paper transactions in the banks which has reduced the paper

work.

2. Easy Transactions :-

Electronic banking has reduced the problems of the customers like writing cheques,

filing taxes, and transforming of cash. Now in ATM facility there is no need of

cheque book.

3. Security :-

Electronic banking provides the safe system of payment. Now transactions are made

in the accounts through internet.

4. Saving Of Time :-

Electronic banking has saved the time and money of the customers and also the bank.

Now burden of work on bank employees has been also reduced were hired at higher

wages, so operating cost was very high. Now by using electronic banking the number

of employees has been reduced.

5. Reduction In Cost :-

In case of manual banking, large number of employees were hired at higher wages,

so operating cost was very high. Now by using electronic banking the number of

employees has been reduced.

6. Market Expanded :-
Due to electronic banking, national international market of various goods and services

has been expanded. Now we can purchases and make payment in any place in the

world.

7. Increase In Customers :-

As the banking industry is expanding due the modern facilities, it is attracting more

and more customers. So number of customers are increasing day by day.

8. Branches Reduced :-

Now there is no need to open the branches on every place in the city because due to

electronic banking facilities, there is no rush of customers in the banks. Because there

is no need to visit the bank physically. So heavy cost of opening the new branches has

been reduced and facilities are provided at low cost.

9. Checking Of Account :-

Every customer can check his balance of account sitting at home and makes the

payments without travelling. It saves his time and expenses.

10. Utility Bills Payment :-

Bills, like telephone, gas, electricity and water can be easily paid to the concerned

departments without going to the bank physically. Even he is sitting in any other

country, he can make the payment.

11. Transferring Of Money :-

There is no need of writing the deposit slip cheques and drafts. By using the electronic

banking money can be transferred easily.

12. Credit Cards :-

ca make the payment by using the credit cards.

Disadvantages of Online Banking

No one type of bank can be the best at everything. In spite of their many advantages,

there are some drawbacks to using online banks as well. Here are some of the

downsides of working with an online bank:

1. Technology issues

2. Security issues Security issues

3. Inefficient at complex transactions

4. No relationship with personal banker

5. Inconvenient to make deposits

1 .Technology Issues

In many ways, an online bank is only as good as your or their internet connection. If

there’s a power outage, or if servers go down, you might not have any access to your account

whatsoever. While some banks offer a phone number for customer service, it

might be overwhelmed if online access is down. With a real bank, you can always

find someone to talk to in the branch.

2. Security Issues

While many online banks are reputable and well-established, sometimes it can be hard

to feel comfortable with a bank that doesn’t have a physical presence, particularly
when large sums of money are involved. If a website suddenly folds up, what will

happen to your money? There’s also the risk of identity theft or actual theft if

someone gains unauthorized access to your account via a hacked or stolen password

or log-in credentials.

3. Inefficient at Complex Transactions

Online banks might be able to transfer money between accounts or pay bills, but you

might be more comfortable with an international, bricks-and-mortar bank if you have

complex transactions. Worldwide, business-oriented banks like Chase have global

transaction capabilities, such as the ability to send payments to more than 35 different

currencies worldwide, that online banks might not be able to muster. Without a real-

world presence, most online banks can’t even offer the services of a notary public,

which require an in-person visit and necessary for most important financial

transactions like buying a home.

4. No Relationship With Personal Banker

Over time, you can develop a relationship with a personal banker if you visit a

traditional bricks-and-mortar location. If you’re dealing with an online bank, on the

other hand, you’re typically handed off to an anonymous customer service agent who

is unli is unlikely to know you from the next customer. If you’re really in a bind, financially

speaking, having a relationship with someone who can help and who knows you well

can be a major advantage over a strictly online banking relationship.

It might seem counterintuitive that a bank, whose purpose is to attract assets, makes it

hard for customers to make deposits, but that can be true in the case of some online

banks. With an online bank, you can’t simply drop off cash or a check at a local

branch. In fact, some online banks, like Ally Bank, won’t accept cash deposits at all.

Using Ally Bank as an example, to make a deposit you’ll have to m ail a check,

transfer money from another bank or another account, or use the bank’s e -check

deposit service.