Question

Answer in brief.

Explain any four e-banking services.

Answer 1

E-banking stands for electronic banking. As the name suggests, the banking operations are computerised under e-banking. It is the result of development in the field of electronics and computers. E-banking is also called as 'Virtual Banking'.

The elements of e-banking can be explained as follows:

1. Automatica Teller Machine (ATMs)

ATMs are electronic machines operated by customers on their own in order to withdraw or deposit money. ATM provides 24 hours service. ATMs are also used for other purposes such as balance enquiry, transferring money, request for cheque book/bank statements etc. Nowadays, ATM also provides facility of cash deposits through Cash Deposit Machines (CDM).

2. Credit Card

A credit card is a payment card. It enables the holder to buy goods/services without using actual money. The bank issuing the credit card makes payment to seller and the card holder has to directly make payment to the bank within specified time limit. The issuing bank creates a revolving account and grants a line of credit to the user.

3. Debit Cards

Banks provide debit card facilities to its account holders. Debit card enables holders to buy goods/services, without using actual cash. When the debit card is used by the account holder to buy any good/service, the amount is automatically debited (deducted) from the customer’s account. Some banks offer personalised debit and credit cards as per the requirement of customer.

4. Real Time Gross Settelement (RTGS)

RTGS is the fastest fund transfer system through the banking channel wherein transfer of funds takes place from one bank to another bank on a real time and gross basis. “Real Time” means immediate i.e. without any waiting period. “Gross Settlement” means the transaction is settled independently and not in any particular batch or combined with other transactions. The receiving bank has to credit the account of the client within 2 hours of receiving the funds transfer message. The minimum amount to be remitted through RTGS is Rs. 2 lacs while there is no upper limit for transactions. However, amount changes from bank to bank.

5. National Electronic Fund Traansfer (NEFT)

NEFT is a system by which funds can be transferred electronically from one bank account to another account in the same bank or any other bank in the country. The client who wants to transfer the funds via NEFT has to give bank name, NEFT code of branch and account number of the beneficiary to whom the money is to be transferred. Earlier the fund transfer (settlement) used to happen at certain specific timings throughout the day. However, with effect from December 2019, the settlement will happen every half hour starting from 12.30 am and will go upto 12 am of that day. The main difference between NEFT and RTGS is that in case of NEFT the transactions are bundled together i.e. all NEFT transactions of a bank are settled together. However, in case of RTGS, transactions are settled on individual basis i.e. there is no bundling.

6. Net Banking And Mobile Banking

Net banking enables customers to access their account over internet i.e. by logging onto the bank’s website with the help of computers, laptop and other gadgets. By the way of internet banking, customer can pay his bills, give instructions for fund transfer, pay taxes, check his bank statement, book a fixed deposit, request for cheque book etc. online from the comfort of his home/office. Mobile banking refers to banking over the phone. The client registers with the bank for this facility and gets a unique code for transactions. The customer can pay his bills, request for balances, transfer funds, enquire bank balance, stop payment, request for issue of cheque book etc.

7. Immediate Payment Services (IMPS) Faculty

IMPS allow customers to instantly transfer funds to any other bank account.