EXAMINING THE ROLE OF INTERNET BANKING IN INDIA
Introduction
The origin of Banking in India was done in the last decade of the 18th century. The oldest bank in India is the State Bank of India, which is owned by the government that was formed back in June 1806 and is the largest commercial bank in India. Central banking is the duty of the Reserve Bank of India 1935 which previously took over these duties from the Imperial Bank of India, transferring it to commercial banking functions. After India's independence, the Reserve Bank was nationalized and was given wider powers. In 1969 the government nationalized over 14 largest commercial banks; the government nationalized the 6 next largest in the year 1980. Currently, India has 96 scheduled commercial banks (SCBs) - 31 private banks (these do not have government stake), 27 public sector banks (that is with the Government of India holding a stake), and 38 foreign banks. They have joined a network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.
What Is Internet Banking
Internet Banking is the banking services given by the banks over the internet. Some of these services include funds transfer, paying bills, viewing account statements, etc. Banks also provided their latest services and products over the internet. Internet Banking is exercised through a computer system or similar devices that can connect to the banking site via the internet. Nowadays, one can also enjoy internet banking on your mobile phone using a 3G or Wi-Fi connection. With the efficient availability of cyber cafes in the cities, it has become quite popular. Banking is now no more restricted to visiting the bank in the person for various like withdrawing and depositing money, stopping a payment, requesting for account statement, etc. One can do all this work and many more the online services offered by the banks. One can also trace your account transactions and balance anytime. Now provided with passbooks updated to know the total account balance is an issue of the past.
Internet Banking in India
The Reserve Bank of India established a working group on Internet Banking. In India, The group of internet banking is divided into 3 types based on the levels.
1. Information Only System
Common purpose information like interest rates, bank products, branch location, and their features, deposit calculations, and loans is provided on the bank's website. There exist services for downloading various types of application forms. Communication is generally done through e-mail. There is no interaction between the bank's application system and the customer. No identification is done. In this system, there is no chance of any unauthorized person getting into the production systems of the bank from the Internet.
2. Electronic Information Transfer System
The system gives customer-specific information in the form of account statements of accounts, transaction details, and account balances. The information is still wide in the 'read only' format. Authentication and Identification of the customer are through a password. The information is gathered from the bank's application system either in off-line or batch mode. The application systems cannot be directly invaded through the internet.
3. Fully Electronic Transactional System
This system enables bi-directional capabilities. The transaction can be given by the customer for online updates. This system needs a high degree of control and security. In these surroundings, application systems and web servers are connected over secure infrastructure. It consists of technology covering networking and security, computerization, legal infrastructure, and inter-bank payment gateway.
Functions Of Internet Banking
The following are the basic function of internet banking in India
Issue Demand Drafts online
Transfer funds to own and third-party accounts
Credit beneficiary accounts using the RTGS/NEFT feature, VISA Money Transfer
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
SWOT Analysis of Internet Banking
The below mentions are the strengths, weaknesses, opportunities, and threats of Internet Banking in India
Strength
Aggression towards the progression of the being norms of banks
Strong managerial effect by the central bank to all the banks
Presence of intellectual capital to face the change in enactment with rational quality
Completely computerized and techno- canny
A person can pierce his account from anywhere he is
A person can do banking transactions like finances transfer to any account, bill pay at any time of the day, book ticket.
Weakness
High bank service charges.
All the bank charges largely to the customers for the services handed through internet banking
Poor technology structure
inefficient risk measures
The wrong people getting easy Access of internet banking account through email ids
When the server is down the entire process is hindered
Opportunities
Escalating risk management field
Enhancement of technology, strong asset base would help in better growth
The safety in using internet banking is a string, so there will be more internet banking users in the future
The international scope of internet banking provided fresh growth aspects and internet business is a catalyst for more new business processes and new technologies
Threats
Banks give all services through electronic computerized machines and this creates challenges for the lower educated people
Incapability to meet the fresh capital conditions
Huge investment in technologies
Internet banking will be substituted by mobile banking
Ways In Which Internet Banking Is Influencing Modern Lives
1. Easy to Set-up Internet banking permits to easily set up your online accounts with only prior bank account information. You can use your computer or even smartphones for creating your online accounts. Once it is done, you can easily access your account and transfer money for your loved ones from anywhere and at any time.
2. Secure
Online banking gives permission to conduct your bank transactions securely and safely. One can control and keep a record of all the financial transactions and assure balance information is accurate. As the technology is progressing, experts are coming up with the fresh idea that will entirely restore passwords with thumb impressions while using internet banking services. This gives more correct and safe transactions and thus, can help in detecting fraudulent transactions more efficiently.
3. Convenience
Internet banking provides a platform for paying your telephone bills, electric bills, and transfer funds. Making transactions right from your doorstep or offices is easy with single payments or recurring payments. Keeping a record of your accounts is efficient and also one does not have to keep the receipts of all the bills and can comfortably view your transactions.
4. Services
Internet banking acts as a great medium for banks to endorse their products and services. These services consist of investment options, financial planning, loan calculators, and many others as simple applications on the bank’s website. All these services are available 24/7 i.e., you can avail of these services at anytime, anywhere, and even when the banks are closed. Some services also offer features like balance alerts, so that you can monitor your account and avoid late fees. They also provide easy access to online statements.
5. Cost-Effective
For bankers, an internet banking facility is cost-effective. Administrative and paper-related works which occupy not only office spaces but as well create job opportunities have been cut down with the introduction of internet banking. Though it has turned out to be a disadvantage for employees, it has nonetheless benefited the banks. Furthermore, banks can efficiently support their services to a huge number of customers at the same time. The profits acquired by the banks are increasing because of these factors. This has allowed them to give acceptable interest rates on saving bank accounts and credit cards.
Through internet banking, fund transfer for both national and international has become faster and more convenient. Nowadays, you can transfer your money within a short time efficiently. You can exercise stock trading and other investments and also handle several accounts easily. All these factors have created online banking ideal for all those who make the number of financial transactions every day.
Conclusion
Internet banking has become obligatory survival protection and is basically altering the banking industry worldwide. present, the click of the mouse offers customers banking services at a much lesser cost and also empowers them with original freedom in choosing brokers for their financial service requirements. The rise of Internet banking is reanalysing business relationships with customers. The International dimension of Internet banking provides new growth angles and Internet business is a catalyst for new technologies 13 and new business processes. The reach of Internet banking has swiftly increased due to the Telecommunication framework development in India.
REFERENCES
[1.] Data Protection in Consumer E-banking Journal of Internet Banking and Commerce,
[2.] Adoption of Internet Banking: An Empirical Investigation of Indian Banking Sector By Balwinder Singh, Reader, Department of Commerce and Business Management, Guru Nanak Dev University, Amritsar, India
[3.] A Study of Net Banking provided by HDFC Bank, www.scribd.com/.../a-study-of- netbanking-providedby-hdfc-bank
[4.] ICICI Bank Consumer Banking in India, www.icicibank.com
[5.] Project on SWOT analysis of ICICI Bank, www.scribd.com/doc/13163460/Swot-of- CICI-Bank
[6.] www.scribd.com/doc/25049932/Final-Project-on-E-banking
[7.] WWW.WIKIPEDIA.COM
Written by Parul Sharma.
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