Online banking (or Internet banking or E-banking)

allows customers of a financial institution to conduct financial transactions on a secure website operated by the institution, which can be a retail or virtual bank, credit union or building society. It is a part of e-commerce and comes under the category of retail services of the e-commerce.

 Non transactional tasks: viewing account balances viewing recent transactions

downloading bank statements, for example

in PDF format viewing images of paid cheques ordering cheque books

 Transactional tasks Funds transfers between the customer's linked

accounts Paying third parties, including bill payments (see, eg., BPAY) and telegraphic/wire transfers Investment purchase or sale Loan applications and transactions, such as repayments of enrollments

 Electronic fund transfer

Automated teller machines

Electronic data interchange Credit cards/debit cards

Smart cards
Digital cash

 First electronic channel

introduced to HK
Accepting deposits and

dispenses cash
Convenient in handling accounts

A Demonstration of Paying Tax Online of HSBC

Step 1

- Click Add New Merchant

- Choose the category, merchant and bill type - Insert the bill payee account number

Step 2

Choose the account that you want to transfer from Insert the amount of fund that you would like to transfer Choosing the date of transfer

 Benefits to the bank

Benefits to the customers

 Competitive advantage

Unlimited network
Lesser workload Lesser chances of fraud

Better profitability
Increases customer relationship

Convenience - 24 hours a day, seven days a week Cost - Reducing transfer fees Speed - Faster circulation of assets

Competitiveness - Fostering competition in financial market

 A need for customer skill to deal with computers

and browsers. Security Risk:

Increasing number of fraudulent bank websites Fake emails purporting to be sent from banks Use of Trojan Horse programs to capture user IDs and

passwords

 Constituted by the RBI, a working group divided the

internet banking products in India into 3 types based on the levels of access granted.
Information Only System Electronic Information transfer system Fully Electronic Transactional System

Finland was the first country in the world to have e-banking. In India, it was first introduces in 1997 by the ICICI bank Under the brand name infinity

 ICICIs registered a profit of 21% to its equity

shareholders in the year 2001.

Suvidha the initiative started by the Citibank in 1998

claims to encourage customers to interact with electronically using telephones, the internet and ATMs.

 The vice president of the global trust bank P.C.

Narayan says, An electronic transaction costs as much as 65% less than a physical one. ATMs have emerged as a knew business model for the banks and the banking has been conducted. I think it is one of the remarkable things that has happened to the Indian banking industry.

 A Reserve Bank of India (RBI) committee has come out

with the road map for electronic banking and has sought legislation on EFT systems to facilitate multiple payment systems for banks and financial institutions. The RBI has been gearing up to upgrading itself as a regulator and supervisor of the technologically dominated financial system

 Several initiatives taken by the Government of India as

well as the RBI have facilitated the development of Ebanking in India. The Govt. of India enacted the IT Act, 2000 with effect from Oct.17,2000, which provides recognition to electronic transactions and other means of electronic commerce.

 The potential of E-banking is huge. With the

increase in connectivity, the number of users will explode, says K.V. Kamat, the CEO of ICICI Bank.
Web based banking service or E-Banking the latest

generation of banking transactions, has opened up new window of opportunity to the banks and existing financial institutions. Since its evolution in 90th decade, it is having unprecedented growth.