E banking

USEFUL TO COMMERE STUDENTS

1. ELECTRONIC BANKING

2. INTRODUCTION Electronic banking is a form of banking in which funds are transferred through an exchange of electronic signals rather than through an exchange of cash, checks or other types of paper documents. Electronic Banking is a major innovation in the field of Banking. E-banking was conceptualized in the mid-1970s, some banks offered customers electronic banking in 1985. Internet banking arrived in India in the late of 1990 . ICCI Was introduced E-banking to its customers in 1996 with lower internet cost and increased awareness.

3. ADVANTAGES AND DISADVANTAGES OF E-BANKING ADVANTAGES User friendly. Low cost and Convenience. Portable Banking. Speed Banking. Round The Clock Banking. Available 24 hours 365 days. Efficiency. DISADVANTAGES Difficult for Beginners. Trust and Responsibility. Inconvenience. Inability to Handle Complex Transactions. Security and Technology issues. Virtual Assistance. Financial Jargon.

4. SERVICES Bill payment service. Credit card customers. Tickets booking. Recharging your prepaid phone. Shopping at your finger tips. Transfer funds . Manage all your accounts in one place.

5. TYPES Automated Teller Machines (ATM). Telephone Banking. Mobile Banking. Internet Banking. Electronic Clearing cards. Electronic Clearing Services (ECS). Electronic Fund Transfer (EFT).

6. AUTOMATED TELLER MACHINE (ATM) An Automated teller machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller. Any one with a credit or debit card can access cash at most ATMs. Its perform financial transactions, such as cash withdrawals , deposits , funds transfers, or account information inquiries , at any time. It is a plastic ATM card with a magnetic strip. It contains a unique card number and identity information. This card is used by bank. Now a days it is widely used in all fields such as defense and many others.

7. HISTORY Alex Robertson has been credited with developing and building the first automatic teller machine in USA. The first ATM called Bankograph was installed in Barkley bank in north London on 27 th June 1967. After that it was later countries like Japan, Sweden, U.K. credited in developing first cash machine. The first ATM in India was set up in 1987 by HSBC in Mumbai. IBA Indian Bank’s Association set up Swadhan , the first network of shared ATMs in India.

8. ADVANTAGES AND DISADVANTAGES OF ATM ADVANTAGES You can withdraw cash at any time, day or night. The bank don’t need to be open. Convenience and secure. You don’t need to fill out withdrawal and deposit slips as required at the bank. Available 24 hours 365 days. DISADVANTAGES ATM may be offline (System down) You may forget your pin number. Risk of robbery when you leave the ATM. Inability to Handle Complex Transactions. The ATM can break down or run out of cash. Fees charged to use ATMs of other banks can become expensive.

9. CARD TECHNOLOGY TYPES OF CARDS Debit cards Credit cards Prepaid cards

10. SMART CARD TECHNOLOGY It is a chip based card (micro chip containing monetary value). It is used for making purchases without the need of any pin. It is a powerful card which carries out functions of ATM card, credit card, Debit card. Atalla in 1972 and introduced the first hardware security module ( HSM ) for securing card payment transactions in 1973, utilizing microprocessor technology. Smart payment cards were introduced to the banking sector in 1979, and came into wider use in the mid 1980s .

11. TELEPHONE BANKING It means banking over phone. Mainly used for marketing banking services. A customer can do entire Non-cash related banking over phone anywhere at any time. Mobile banking will emerge as one of the most cost effective delivery channel. United kingdom , which established a dedicated telephone banking services in 1984 .

12. MOBILE BANKING Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smart phone or tablet. Unlike the internet banking it uses software, usually called an app. The earliest mobile banking service used SMS banking. After smartphones were introduced with WAP. European banks started offering mobile banking. In the year 2002 Mobile banking was started in India by way of SMS Banking.

13. INTERNET BANKING It is an electronic payment system that enables customers of a bank or other financial institution to conduct range of financial transactions through financial institution’s website. Internet banking, customer of a bank with a pc can log on to the bank website & conduct basic functions by clicking mouse. Internet banking is also known as online banking or web banking. Internet banking was first adopt in New York in 1981 in banks like Citibank. Stanford Federal Credit Union was the first service provider of Internet banking in October 1994. Internet banking arrived in India in 1990’s by ICICI.

14. ELECTRONIC FUND TRANSFER Electronic funds transfer (EFT)is the electronic transfer of money from one bank account to another. The fund transfer might be either within a single financial institution or across multiple institutions. It is done through computer based systems, without the direct intervention of bank staff . An EFT can be initiated by a person or by an institution like a business . It may be referred to as electronic cheques or e-cheques.

15. Electronic fund transfer allows customers to make money transfers at the comfort of their homes using integrated banking tools such as internet and mobile banking. Besides being convenient, electronic transfer modes are considered to be safe, secure and make transferring money much simpler . Electronic transfers are processed immediately with the transferred amount being deducted from one account and credited to the real time, thus saving time and effort involved in physically transferring a sum of money. REASONS FOR PREFFERING ELECTRONIC FUND TRANSFER

16. ADVANTAGES OF EFT Increase efficiency and productivity. Manage cash flow easily. Improve safety and control . Saves money. Less paper works. Eliminate the risks associated with lost. Eliminate the risks associated with lost, stolen, or misdirected cheques.

17. DISADVANTAGES OF EFT Technical problems. Vulnerability to cybercriminals. Quite expensive to setup. Payment gateways charge Service fees. The fund transfer process generally consists of a series of electronic messages sent between financial institutions directing each to make debit and credit accounting necessary to complete the transaction.

18. TYPES OF ELECTRONIC FUND TRANSFER National Electronics Fund Transfer Real Time Gross Settlement Immediate Payment Service

19. NATIONAL ELECTRONIC FUNDS TRANSFER (NEFT) NEFT is an electronic funds transfer system maintained by the Reserve bank of India and Started in November 2005 . The setup was established and maintained by Institute for Development and Research in Banking Technology. NEFT is a facility provided to bank customers to enable them to transfer funds easily and secure. It is done via electronic messages. NEFT facilities are available in all over the country and work on a batch mode.

20. ADVANTAGES AND DISADVANTAGES OF NEFT ADVANTAGES DISADVANTAGES Safe Effective and Highly reliable. It takes time to settle the transaction. Low processing Charges. It does not work when the bank is closed the transaction remain pending till the bank is open. Eliminates delays. It is not fastest system to transfer the money compare to RTGS & IMPS.

21. REAL TIME GROSS SETTLEMENT (RTGS) RTGS are specialist funds transfer systems  where the transfer of money or securities  takes place from one bank to any other bank on a "real-time" and on a "gross" basis. Established in March 2004. Maintained by RBI. Settlement in "real time" means a payment  transaction is not subjected to any waiting period, with transactions being settled as soon as they are processed. " Gross settlement" means the transaction is settled on a one-to-one basis , without bundling or netting   with any other transaction. " Settlement" means that once processed, payments are final and irrevocable.

22. ADVANTAGES AND DISADVANTAGES OF RTGS ADVANTAGES DISADVANTAGES Safe , Secure and Reliable. It is mainly employed for the large value and the transfer of the inter fund banks. Real time online fund transfer. It has the Gross system grid lock risk that do not have enough money. Immediate clearing. It does not provide the facility to track the transaction.

23. IMMEDIATE PAYMENT SERVICE (IMPS) IMPS is an instant real time inter-bank electronic funds transfer system in India. IMPS offers an inter-bank electronic fund transfer service through mobile phones. The service is available 24/7 thought the year including bank holidays. It is managed by the National payments corporation of India (NPCI). It was established in 2010 , with 4 member banks (State Bank of India, Bank of India, Union Bank of India and ICICI Bank), and expanded it include Yes Bank, Axis bank and HDFC Bank. IMPS was publicly launched on November 22, 2010.

24. ADVANTAGES AND DISADVANTAGES OF IMPS ADVANTAGES DISADVANTAGES Simple architecture. Security issues. Available for 24 hours in a day even on Holidays. Lack of charging protocol. The money will be credited in the beneficiary’s account within a few seconds. Available only through online mode.

25. UNIFIED PAYMENTS INTERFACE (UPI) Unified payments Interface is an instant real time payment system. UPI is a U pgraded version of IMPS. It was established in 11 April 2016 . It was developed by National payments Corporation of India facilitating inter bank-transactions. The interface is regulated by the Reserve Bank of India and works by instantly transferring funds between two bank accounts on a mobile platform like Google pay, Paytm, Phonepe.

26. DIFFERENCE BETWEEN NEFT, RTGS, IMPS, UPI

27. BASIS OF DIFFERENCE NEFT RTGS IMPS UPI Managed By RBI RBI NPCI NPCI Established Year In 2005 In 2004 In 2010 In 2016 Minimum transfer limit Rs 1 Rs 2 lakh Rs 1 Rs 1 Maximum Transfer Limit No limit No limit Rs 2 lakh Rs 1 lakh Offline Transfer Yes Yes No No Online Transfer Net Banking, Mobile Banking Net Banking, Mobile Banking Net Banking, Mobile Banking Google pay, Phonepe, Paytm, Etc. Transfer Speed Within 2 Business Hours Immediate Immediate Immediate

28. BASIS OF DIFFERENCE NEFT RTGS IMPS UPI Settlement Type Group (Half Hourly Batches) One-one One-one One-one Service Timing Monday To Saturday (Except 2 nd & 4 th Saturday) RBI makes facility available for 24 hours 365 days on Dec 16 2019 Weekdays 8 Am to 7pm Saturday 8 Am to 1 pm Monday to Saturday (Except 2 nd & 4 th Saturday) Weekdays 9 Am to 4.30pm Saturday 9 Am to 2 pm 24/7 24/7 Details required to transfer Receiver’s Bank Account Number and IFSC code Receiver’s Bank Account Number and IFSC code Receiver’s Bank Account Number and IFSC code or Mobile Number and MMID Receiver’s Bank Virtual ID or Account Number and IFSC code or Mobile Number

29. BASIS OF DIFFERENCE NEFT RTGS IMPS UPI Service Charges for sender For Transaction up to Rs 10,000 Rs 2.50 (+Applicable GST). For Transaction above Rs 10,000 up to Rs 1 lakh Rs 5 (+Applicable GST). For transaction above Rs 1,00,000 and up to Rs 2 lakh Rs 15 (+Applicable GST). For transactions above Rs 2 lakh; Rs 25 (+Applicable GST). 2,00,000/- to 5,00,000; Rs 24.50/- (exclusive of tax if any). Above Rs 500,000/- Rs 49.50/- (exclusive of tax, if any). Bank may decide to charge a lower rate but cannot charge more than the rates prescribed by RBI. Charges Based on Banks. Free as of Now. Charges for receiver Free. Free. Free. Free.

30. SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATIONS (SWIFT) L imited L iability Co-operative Society with head office in Belgium and established in 1973. To send and receive information about financial transactions secure and standardized messages . Today over 200 different SWIFT messages exist, including : Credit and Debit Instructions . Buy and Sell Orders . Documentary Credits . Collections, Guarantees, interbank transfers etc.

31. STRUCTURED FINANCIAL MESSAGING SYSTEM (SFMS)   SFMS is a secure messaging standard developed to serve as a platform for intra-bank and inter-bank applications. It is an  Indian standard similar to  SWIFT . It is built on the lines of SWIFT (Society for World-wide Interbank Financial Telecommunications ). SFMS can be used for secure communication within the bank and between banks. The SFMS was launched on December 14, 2001 at   IDRBT It is used by applications like electronic funds transfer  ( EFT ), real time gross settlement systems ( RTGS ), delivery versus payments ( DVP ), centralized funds management systems ( CFMS ) and others.

32. OMBUDSMAN An ombudsman is a person who acts as a trusted intermediary between an organization and some internal or external constituency and represents not only but mostly the broad scope of constituent interests. Established in 1809 at Sweden. Acting as a Agent of the parliament. Safeguard of the citizen . Works as a civil court. Accountable to the G overnment .

33. FUNCTIONS May investigate and take action. Sometimes it works different from Court. During investigation time its act like a civil court. May give punishment. Look into complaints for the citizen. May examine the witness. To give summon for examination.

34. POWERS Investigating power. Restriction of publication of proceedings. Power to punish any person for obstruction. Delegation power. Power of entry. Immunities.

35. CUSTOMER SERVICES

36. CUSTOMER SERVICES Customer service in banking  is one of the most important ways to keep  customers  coming back . It includes responding to customers questions and complaints in a thorough and timely manner and interacting with  customers  through face-to-face meetings, telephone, mail, fax and email .

37. CONCLUSION E-Banking Enable Better Business Anywhere , Anytime. E-banking represent a tremendous opportunity in India. However, Factors such as illiteracy in India. The main aim of e-banking is to making transactions through online poses and make customer more beneficial. Technology enables banks as well as the customers to access a host of amazing services by simply logging in to internet banking account.