Presented by:

Priyanka Sil Roll No.10

University of Calcutta MBA (Finance)
 WHAT IS INTERNET BANKING?
• 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) or other intelligent
device.
• Internet banking allows
customers to conduct financial
transactions on a secure website
operated by their retail or virtual
bank ,credit union etc.
 REASONS FOR GROWTH OF
INTERNET BANKING
• COMPETITION
• COST EFFICIENCIES
• GEOGRAPHICAL
REACH
• BRANDING
• CUSTOMER
DEMOGRAPHICS

Source: Susannah Fox & Jean Beier, Online

Banking 2006: Surfing to the Bank 1 (Pew
Internet & American Life Project, Jun. 14,
2006)
 TYPES OF INTERNET BANKING
• INFORMATIONAL
e.g. The bank has marketing information about the
bank’s products and services on a stand-alone server
• COMMUNICATIVE
e.g. The interaction may be limited to electronic mail,
account inquiry, loan applications, or static file updates .
• TRANSACTIONAL
e.g. Customer transactions can include accessing
accounts, paying bills, transferring funds, etc
 FEATURES
• Transactional
– EBPP
– Fund Transfer
– Loan & credit card Application
– Balance Inquiry
– Investment activity
• Non Transactional
– Financial institution administration
– Transaction approval Process
– Support of multiple users
– Personal financial management support.
– Account aggregation.
– Automated clearinghouse (ACH) transactions.
 Table : Adoption Rates of Internet Banks in India
Number
of
Number Banks Number Internet banks as a
of with of Internet percentage of
Bank Banks Website Banks banks in category
Private Sector
Banks 28 27 17 60.7
New 7 7 7 100
Old 21 20 10 47.6
Public Sector
Banks 28 28 26 92.8
SBI Group 8 8 8 100
Nationalized 20 20 18 90
Foreign Banks 29 29 6 20.7
All Banks 85 84 49 57.6

Source: Web sites of the individual banks and annual reports of the
respective banks
Sources: Survey by The Division of Banking ,September
Source: study by the American Bankers Association (ABA).
 INTERNET BANKING RISKS
• CREDIT RISK
• INTEREST RATE RISK
• LIQUIDITY RISK
• PRICE RISK
• FOREIGN EXCHANGE
RISK
• TRANSACTION RISK
• COMPLIANCE RISK
• STRATEGIC RISK
• REPUTATION RISK
ISSUES IN INTERNET BANKING
• SECURITY
• AUTHENTICATION
• TRUST
• NONREPUDIATION
• PRIVACY
• AVAILABILITY