Page 1 of 13
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 503
E-Banking in India: Challenges and Opportunities
RITU BANSAL
Assistant Professor, Faculty of Commerce,
S.D. (PG) College, Panipat
ABSTRACT
Banking is the lifeline of an economy. The present and future of any economy depends upon
the success and development of banking. The objective can’t be achieved with the traditional
banking as now is the age of technology. Today banks have expanded their purview of
activities and are getting into new range of products and services like e-banking services,
investment banking, mutual funds, general insurance, credit cards, demat services and so on.
Due to liberalization, the financial system has a greater role to play than in the past and thus
one cannot afford to ignore the importance of existence of a strong Indian banking sector. E- banking plays a major role in the present banking functionality. Electronic banking is inferred
to be safe and secured, compared to physical banking. E-banking ensures qualitative banking
operations compared to traditional banking. However, it has its own limitations and
challenges when we talk about security, on the contrary. The discussion throughout the paper
revolves around the challenges that Indian banks are facing in term of e-banking, opportunity
to increase awareness and measures adopted for safe and secure e-banking. Online banking
has a lot of benefits which add value to customers’ satisfaction in terms of better quality of
service offerings and at the same time enable the banks gain more competitive advantage over
other competitors. This paper discusses some challenges and opportunities in an emerging
economy.
Key Words: E- Banking, Information Technology, Customer Satisfaction, Challenges, Risks,
Opportunities, Managerial Implications.
Page 2 of 13
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 504
INTRODUCTION
Banking is the lifeline of an economy. They are considered as vital for the growth and
development of the financial system of a country. In the past decade, the overall economy has
undergone a phenomenal change in terms of technological updations. With the advent of
technology, the banking sector is also not left behind. Online/e-banking/virtual banking has
become an important aspect in today’s lives. Internet plays vital role between banks and
customers to receive and deliver information, this form of banking is described as internet
banking.(Reserve Bank of India’2001).Internet banking refers to a system where individual
customers are allowed to perform banking activities 24*7 at off-shore sites such as home,
office or any other locations via internet based secured networks. Online banking enables
bank customers to get access to their accounts and general information on bank products and
services through the medium of bank’s website without the intervention of sending letters,
faxes, original signatures and telephonic confirmation (Thulaniet al.2009).
INTERNET BANKING IN INDIA
E-banking came into being in UK and US in 1980s. However, in India, e-banking is still at
nascent stage. ICICI was the first bank to introduce internet banking services in India
followed by Citibank and HDFC. The Government of India and Reserve Bank are working
together to strengthen and develop e-banking in India. IT Act’2002 was enacted by the
Government to provide legal recognition to electronic transactions. Most of the public and
private banks have started providing Internet banking services to their customers. Indian
banks offer the following ebanking services to their customers:
a) Automatic Teller Machines (ATMs)
b) Internet Banking
c) Mobile Banking
d) Phone banking
e) Debit and credit cards
f) NEFT and RTGS transactions
g) Smart cards
RECENT TRENDS IN BANKING
Page 3 of 13
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Available online: https://ejbss.org/ P a g e | 505
The growing competition, growing expectations led to increase awareness amongst banks on
the role & importance of technology in banking. Banking today has transformed into a
technology intensive and customer friendly model with a focus on convenience. Recent trends
are as follows:
E-Cheques: E-Cheques which replace the conventional paper cheque. In India
Negotiable Instruments Act has already been amended to include truncated cheque and
E-cheque instruments.
Real Time Gross Settlement (RTGS): RTGS introduced in India since March, 2004
is a system through which electronic instructions can be given by banks to transfer
funds from their account to the account of another bank.
Electronic Funds Transfer (EFT): It is system whereby anyone who wants to make
payment to another person can approach his bank and make cash payment or give
instructions to transfer funds directly from his own account to the bank account of the
receiver.
Electronic Clearing Service (ECS): It is a retail payment system that can be used to
make bulk payment of a similar nature. It is meant for companies and government
department to make and receive large volumes of payment.
Automatic Teller Machine (ATM): It enables the customers to withdraw their
money at any time without interacting with a human teller.
Point of sale Terminal: It is a computer terminal that is linked online to the
computerized customer information files in a bank & magnetically encoded plastic
transaction card that identifies the customer to the computer. During transaction the
customer’s account debited and the retailers account is credited by the computer for
the amount of purchase.
Tele Banking: It facilitates the customer to do entire non-cash related banking on
telephone. Under this devise Automatic Voice Recorder is used for smaller queries
and transactions.
REVIEW OF LITERATURE
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