- CURRENT SCENARIO IN INDIA

Beginning of e-banking
Liberalization and de-regulation process, which started in 1991-92 has made a
drastic change in the Indian banking system. From a totally regulated environment,
we have gradually moved into a market driven competitive system.
With the number of computers increasing every year, the electronic delivery of
banking services is becoming the ideal way for banks to meet their clients
expectations. Today most of the banking happens while you are sipping coffee or
taking an important call. ATMs are at your doorstep. Banking services are accessible
24x7. There are more plastic cards in your wallet than currency notes.
The credit of launching internet banking in India goes to ICICI Bank.
Citibank and HDFC Bank followed with internet banking services in 1999.

Understanding e-banking..
Customers, both corporate as well as retail, are no longer willing to queue in
banks, or wait on the phone, for the most basic of services. They demand and
expect to be able to transact their financial dealings where and when they wish
to.
Also known as PC banking, online banking, cyber banking or virtual banking, Ebanking is the term that signifies and encompasses the entire sphere of
technology initiatives that have taken place in the banking industry. E-banking is
a generic term making use of electronic channels through telephone, mobile
phones, internet etc. for delivery of banking services and products. The concept
and scope of e-banking is still in the transitional stage. E-banking has broken the
barriers of branch banking.

e-banking steps taken by government for its promotion

The Government of India enacted the IT Act, 2000 with effect from October 17,
2000 which provided legal recognition to electronic commerce.
The Reserve Bank monitors and reviews the legal requirements of e-banking on a
continuous basis to ensure that challenges related to e-banking may not pose any
threat to financial stability of the nation.
Dr. K.C. Chakrabarty Committee prepared the IT Vision Document- 2011-17,
which provides guidelines to enhance the usage of IT in the banking sector.
National Payments Corporation of India (NPCI) was permitted by the RBI to
enhance the number of mobile banking services and widen the IMPS (Immediate
Payment Service) channels like ATMs, internet, mobile etc.
On the recommendations of the Damodaran Committee, the guidelines were
induced by RBI that provide internet banking as secure mode of banking.
Under the Banking Ombudsman Scheme 2006, a customer can file their
complaint against any deficiencies in any means of banking service.
The Basel Committee on Banking Supervisions (2001) primarily focus on how to
extend, adapt, and tailor the existing risk-management framework to the
electronic banking setting.

e-banking stages
E- Banking has following stages:
I.

Information Kiosk: The conventional information and data are available

on the banks website regarding products and services offered by the
bank.
II. Basic I- Banking: Through this internet banking infrastructure has been
set by the bank to access basic banking services, as, online opening of a
bank account, online payment of bills, access account statement and
enquire bank account balance online.
III. Virtual Medium: This mode of e-banking uses internet facility as a mode
of conducting banking transactions. Customers can buy and sell products
and services offered through payment gateway service of bank.

Need for e-banking

Banks' external environment, including globalization and deregulations, have made
the banks highly competitive.
Banks find it difficult to compete on price, and need to look at other ways to retain
customers.
As customers become more sophisticated, it becomes banks essential to consider
the use of technology to respond to their continuously changing requirements.
Technology in banking has been used in four major ways:
1. To handle a greatly expanded customer base
2. To reduce substantially the real; cost of handling payments
3. To liberate the banks from the traditional constraints on time and place
4. To introduce new products and services.

To analyze progress made by Indian banking industry in adoption of technology,

averages, pecentages and simple growth rate is calculated.
Simple growth , GR= YtY0 /Y0 x 100
Yt = value of given parameter in current year
Y0 = value of given parameter in base year.

e-banking products and services

Indian banks offer to their customers following e-banking products and
services:
Automated Teller Machines (ATMs)
Internet Banking
Mobile Banking
Phone Banking
Tele-banking
Electronic Clearing Services (ECS)
Smart Cards
Interactive TV banking
Door Step Banking
Electronic Fund Transfer(EFT)

e-banking products and services

Transactions through Retail Electronic Payment Systems:

The electronic payment systems such as Electronic Clearing Service (ECS)

which consists of- Electronic Credit Clearing Service & Electronic Debit
Clearing Service and National Electronic Fund Transfer (NEFT) have
improved the speed of financial transactions across the country.
ECS is a non-paper based movement of funds which is encouraged by the
RBI on a wide scale.
ECS brings down administration cost and ensures profitability and
productivity to the banks.
National Electronic Fund Transaction (NEFT) is a deferred net settlement
system and is an improvement over other modes in terms of security and
processing efficiency.
This facility is currently available at over 46,300 bank branches
throughout the country.

e-banking products and services

Electronic Clearing Cards(debit and credit cards):

Now-days Electronic Cash is being used in place of hard cash.

Debit card allows anywhere any time accesses to the customers with
their savings or current account.
A customer possessing a Debit Card need not carry cash.
Credit card enables a customer to purchase goods or services within
prescribed limits from certain authorized retail and service
establishments without making immediate cash payments.
It is also called plastic money.
The most important difference between a Credit card and a Debit card
is that while credit card is a post- paid and debit card is pre-paid.

e-banking products and services

ATM
Apart from these, ATM services are also offered by all the banks. These include
24 hours access to cash, transfer fund between accounts, view account balances
& mini statement and pin change option.
Among other services, most of the banks offer simple transaction of e- banking
which includes

Online transfer of funds

97.7 per %

Change password
95.5 per %

Customer correspondence
95.5 per %

Request of cheque book

88.8 per %

Bill payment
64.4 per %

monthly bank account statement by e-mail

75.5 per %

However, the services like online tax payments

66.6 per %

Demonstration of ibanking
66.6 per %

Stop payment request

46.6 per %

Corporate internet banking

42.2 per %
should also be provided by all the internet banks

e-banking products and services

Facilities provided to the ATM customers
1. Anytime, anywhere access to cash, withdrawal of cash is available 24x7.
2. Transfer of money from one account to another account is possible with the
help of ATMs.
3. A customer with the help of ATMs can check his/her last transactions and
current balance. In addition to these, a mini statement can also be generated with
the help of ATMs.
4. Change of personal identification number of ATM/debit card can be made with
ATMs.
5. Cheque book request can be made by the customers through ATMs.
6. Fixed deposits can be done with the help of ATMs.
7. Utility bills can be paid by the customers with the help of ATMs.
8. Customers can pay their credit card bill with ATMs.
9. Mobiles can be recharged via ATMs.
10. To get the latest updates on mobile, customers can change their mobile
number through ATMs.
11. Check drop facility can also be used by customers at ATMs.

e-banking products and services

Facilities provided to telephone/phone banking customers

1. Customer can get the details of saving, current, fixed deposits available in
their account balance.
2. With phone banking facility, customers can get their cheque book and latest
account statement delivered to them.
3. Money transfer can be possible with the help of phone banking.
4. Customers can request the bank to stop payment of a particular cheque by
using phone banking service.
5. Mobile banking request can be made with the help of phone banking.
6. Customers can get the latest information about the interest rates prevailing
along with the foreign exchange rates.
7. Customer can use phone banking for blocking of Internet Banking User ID
8. Blocking of ATM/debit card credit cards can be done by phone banking.
9. Phone banking can be used by the customers for issuing ATM card.
10. TDS(Tax deduction at source) certificate can also be received by the
customers via phone banking.

e-banking bank ranking

Ranking of banks on offering e banking facilities:
1. State bank of India
2. ICICI Bank
3. Axis Bank
4. HDFC Bank
5. Bank of India
6. Punjab National Bank
7. Bank of Baroda
8. Canara bank of India
9. Union Bank of India
10.Citibank

How e-Banking helps?

To Corporate

Competition
New Markets
Customer Service
Revenue Potential
Reduce Costs

How e-Banking helps?

To Customer

Anytime banking- managing funds in real time and most importantly,

24x7.
Convenience acts as a tremendous psychological benefit all the time.
Cash or card free banking through PC banking. E- Banking expands the
domain of access to banking services.
Brings down cost of banking to the customer over a period of time.
Cash withdrawal from any branch/ATM.
On line purchase of goods and services including on line payment for the
same.
Transactions are executed and confirmed almost instantaneously.
Also, the range of transactions available is fairly broad. Consumers can do
everything from simply checking on an account balance to applying for a
mortgage.

How e-Banking helps?

To Bank
Reduces customer visits to the branch and thereby human intervention.
This impact tells upon establishment costs of the bank.
Inter-branch reconciliation is immediate thereby reducing chances of fraud
and misappropriation.
E-Banking site can act as a revenue earner through promotion activity by
consumer corporate.
E-Banking provides competitive advantage to the bank.
E-Banking provides unlimited network to the bank and is not limited to the
number of branches.
By connecting all the branches through WAN (wide area network),
anywhere banking facility can be provided.
Helps in establishing better customer relationship and retaining and
attracting customer since todays customer demands are more inclined to
technology.
Load of branches can be considerably reduced by establishing centralized
data base and by taking over some of the accounting functions.

How e-Banking helps?

To Merchants, Traders etc.

Increase in business because of increased purchasing power of the

credit card holders and ease with which purchasing can be done.
Less need for merchants or traders to provide credit facility to their
customers.
Making e-commerce a reality and globalizing the trade.
Development of global and loyal clientele base. Assured immediate
payment / settlement.
Avoid all the cost and risk problems involved in handling cash.
Providing services of international standard at low transaction
corporation.

How e-Banking helps?

To Government and Nation

Globalization of trade and e-commerce - Providing global market to the

national products and services.
Establishment of e-commerce in India will promote exports and
increase inflow of foreign exchange.
Promotion of e-commerce and e-banking will eliminate the risk of
carrying heavy cash.
E-banking and e-commerce will improve transparency in transaction.

e-Banking - recommendation for banks

Customers should be made literate and aware about the use of ebanking products and services.
Special arrangements should be made by banks to ensure full security of
customer funds. Technical defaults should be avoided by employing well
trained and expert technicians in field of computers, so that loss of data
can be avoided.
Employees of banks should be given special technical training for the use
of e-banking so that they can further encourage customers to use the
same.
Seminars and workshops should be organised on the healthy usage of ebanking especially for those who are ATM or computer illiterate.
E-banking services should be customised on basis of age, gender,
occupation etc so that needs and requirements of people are met
accordingly.
Government should make huge investments for building the
infrastructure.

e-Banking opportunities and challenges

Opportunities which encourage marketers to promote e-banking
Increasing internet users and computer literacy
Initiatives taken by government agencies for financial literacy
Competitive advantage
Challenges
Security risk-frauds, phishing, pharming, etc.
Privacy risk-skimming
Trust factor
Customer awareness
Less internet penetration in Indian context

Conclusion
In India, E-banking is in a nascent stage.

People are aware of e banking , but not fully

Customers are at ease after using e-banking

It saves the precious time of the customer, which they can utilize somewhere
else.

Customer satisfaction varies according to age, gender, occupation etc.

It has increased the pace of transaction

Customer perception is that it has made the life of customer easy.

Younger generation is beginning to see the convenience and benefits if e-banking.
In years to come, e-banking will not only be acceptable mode of banking but will
be preferred mode of banking.
Electronic banking is the wave of the future.

Conclusion
But it also poses new challenges for country authorities
in regulating and supervising the financial system and
in designing and implementing macroeconomic policy.
Loyalty of e-banking customers is directly affected by
satisfaction and trust in an online bank, which in turn
are determined by Web site quality and service quality.

Achieving consumers trust regarding transaction is

the key to expand e banking. Customers are more
worried about the security of their password and ID.
The results show that customers are satisfied with
quality of service on four dimensions such as
1. Reliability
2. Accessibility
3. Privacy/security
4. Responsiveness and fulfillment

Example
Recent step taken by State Bank of India to insure secure transaction
Instances of fraudulent transactions emanating from China and the US
have prompted State Bank of India (SBI) to block a large number of ATM
cards.
It is learnt that the bank has proceeded to block cards of those customers
who had failed to change the ATM PIN when alerted on an earlier
occasion. These customers had been instructed to look out for a message,
Response Code 150 saying your card is blocked, while logging in at the
ATM.

Submitted by:
Ankush Sharma
Aarush Thakur
Raman Kant
Meenu Chauhan
Deepanshu

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