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Project report on E Banking activities followed by Commercial Banks in India
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I, MISS. SHRADDHA ANIL YELLATTIKAR student of B.Com – Banking & Insurance – Semester V (2013-14) hereby declare that I have completed the Project on E-BANKING. The information submitted is true & original to the best of my knowledge. D ATE: Student’s Signature PLACE: SHRADDHA YELLATTIKAR
ACKNOWLEDGEMENT
banking. PC banking and Internet or online banking are the most frequently used designations. It should be noted, however, that the terms used to describe the various types of electronic banking are often used interchangeably. The ever increasing speed of internet enabled phones & personal assistant, made the transformation of banking application to mobile devices, this creative a new subset of electronic banking i.e. mobile banking. In 1999 & 2000 mobile banking as an established channels, still seems to be a distant prospect. The internet is revolutionizing the way the financial industry conducts business online, has created new players who offer personalize services through the web portals. This increase to find new ways and increase customer loyalty to add the value to this product and services. Banks also enables customers lifestyle needs by changing and increasing preference for speed and convenience are eroding the traditional affinity between customer and branch offices as a new technology disinter mediates traditional channels, delivering the value proposition hinges on owing or earning the customer interface and bringing the customer a complete solution which satisfies their needs. Smart card is a new trend which provides the opportunity to build an incremental revenue stream by providing an ideal platform for extended application and services. Banks are well positioned to play central role unit in future M-commerce market. Banks have strong relationships with corporate and business customers and a wide experience in providing them with corporate banking services. Bank provides a multimedia of small and large retailers with acquiring functionality in credit card transactions. Customers have trusted relationships with banks and a lower propensity to switch banking providers.
CHAPTER 1 1.1 INTORDUCTION OF E- BANKING 1.2 SCOPE/OBJECTIVE OF E- BANKING 1.3 NEED OF E-BANKING 1.4 HISTORY OF E-BANKING CHAPTER 2 2.1 INDIAN VIEW OF E-BANKING 2.2 GLOBAL VIEW OF E-BANKING
CHAPTER 1 1.1 INTRODUCTION OF E-BANKING 1.2 SCOPE/ OBJECTIVE OF E-BANKING 1.3 NEED OF E-BANKING 1.4 HISTORY OF E-BANKING
INTRODUCTION OF E-BANKING
business, or obtain information on financial products and services through a public or private network, including the Internet. Customers access e-banking services using an intelligent electronic device, such as a personal computer, personal digital assistant, automated teller machine, Touch tone telephone. While the risks and controls are similar for the various e- banking access channels, this booklet focuses specifically on Internet-based services. Scope Of E- Banking The traditional mode of banking is manual It is paper based It is now no longer acceptable in the changing global economy. With the widespread internet technology the business is also all electronic - electronic commerce, electronic import and export, electronic procurement of goods electronic trade mobile banking etc. The banking sector, if it is to survive in the 21st century, shall have to change its entire banking structure. It shall have to provide better, economical and quick monetary services through the use of advance electronic technology. The customers of the banking are fast becoming computer literate. They are now able to interact more fluently with the provision of basic electronic services. The needs of the customers have also changed. They require the services of banks at home, in office, 24 hours a day, seven days a week, anywhere, anytime and anyhow. The banks are quite alive to the changing needs of the customers. They fully realize that if they are to compete they shall have to provide electronic delivery of financial services to the customers.
NEED FOR E-BANKING One has to approach the branch in person, to withdraw cash or deposit a cheque or request a statement of accounts. In true Internet banking, any inquiry or transaction is processed online without any reference to the branch (anywhere banking) at any time. Providing Internet banking is increasingly becoming a "need to have" than a "nice to have" service. The net banking, thus, now is more of a norm rather than an exception in many developed countries due to the fact that it is the cheapest way of providing banking services. Banks have traditionally been in the forefront of harnessing technology to improve their products, services and efficiency. They have, over a long time, been using electronic and telecommunication networks for delivering a wide range of value added products and services. The delivery channels include direct dial – up connections, private networks, public networks etc and the devices include telephone, Personal Computers including the Automated Teller Machines, etc. With the popularity of PCs, easy access to Internet and World Wide Web (WWW), Internet is increasingly used by banks as a channel for receiving instructions and delivering their products and services to their customers. This form of banking is generally referred to as Internet Banking, HISTORY OF E-BANKING
financial institution. The online banking services are becoming more and more prevalent due to the well-developed systems. Though there are pros and cons of electronic cash, it has become a revolution that is enhancing the banking sector.
CHPTER 2 2.1 INDIAN VIEW OF E-BANKING 2.2 GLOBAL VIEW OF E-BANKING 2.3 EVOLUTION OF E-BANKING 2.4 USAGE OF E-BANKING INDIAN VIEW The Reserve Bank of India constituted a working group on Internet Banking. The group divided the internet banking products in India into 3 types based on the levels of access granted. They are:
institutions have shrunk considerably. The Internet has leveled the playing field and afforded open access to customers in the global marketplace. Internet banking is a cost effective delivery channel for financial institutions. Consumers are embracing the many benefits of Internet banking. Access to one's accounts at anytime and from any location via the World Wide Web is a convenience unknown a short time ago. Thus, a bank's Internet presence transforms from 'brouchreware' status to 'Internet banking' status once the bank goes through a technology integration effort to enable the customer to access information about his or her specific account relationship. The six primary drivers of Internet banking includes, in order of primacy are: Improve customer access Facilitate the offering of more services Increase customer loyalty Attract new customers Provide services offered by competitors Reduce customer attrition GLOBAL VIEW. Since its inception, Internet banking has experienced strong and sustained growth. World Bank report on leapfrogging in e-finance pointed out that the three countries with impressive progress in information technology in this sense are Estonia, Republic of Korea and Brazil. Creation of the world’s leading electronic banking systems has been done at a remarkably low cost compared to other world-class internet banks. In the European Union, 60 million people, representing 18 per cent of the adult population, use online banking In France, the number of online banking accounts is recording an annual growth rate of 75
per cent. However, Estonia is a country that has become a leader in Internet banking (which now reaches 18 per cent of the population), not only among Eastern European countries but in world rankings, through a combination of easy to- use software, free-of-charge transactions and behavior changes resulting from the influence of the Nordic countries’ IT culture on Estonia. A sector in which Latin America is seems to be performing better than in other industries is online retail banking. Growth in this area has been driven by traditional banks, which have used the online channel to generate customer loyalty and improve their operating margins. Two Brazilian banks, Bradesco and Banco do Brasil have thus achieved more than 4 million online customers each. Mexico is another leader of Internet banking in Latin America. It adopted legislation providing for the development of both E-Commerce and e-finance. In Mexico, the number of online bank users more than tripled from 700,000 in 2000 to 2.4 million in 2001, and it could reach 4.5 million in 2005 (E-Marketer 2002b). One reason for the success of Latin American banks’ online ventures seems to be the attention they have paid to providing retail customers with multiple ways to access their accounts (Internet, telephone, wireless). However, given that the share of the total population that actually has a bank account is relatively small, the expansion of Latin American online banking may be facing a bottleneck. Compared with overall Internet usage estimated at 4.4 million in Australia, the major banks together have attracted only 1.2 million to online banking. The Internet is a global phenomenon and so is e-finance. Its deployment is not limited to developed countries, and indeed some developing countries – such as India and the Republic of Korea – are experiencing particularly strong growth in E-Banking. In Asia one of the most impressive records has been achieved by the Republic of Korea. The Republic of Korea is leading in online brokerage and in mobile banking. In South-East Asia Internet banking is also developing rapidly in Thailand, Malaysia, and Singapore and to a lesser extent, in the Philippines. In Bangladesh there is a large gap between
