Question

Write Short Note on the following:
E-banking

Answer 1

Introduction:- E-banking means electronic banking (also known as online banking or virtual banking). Through e-banking, a customer can perform banking transactions such as transferring money from one account to another, checking account balance, making payments and applying for loans. These services are provided by commercial banks to their account holders so that they can easily perform banking transactions online from anywhere and at any time. The customers are not required to go to the bank. E-banking has speeded up all bank transactions.

1. Automated Teller Machine (ATM): -ATMs are electronic machines that are operated by the customer himself to deposit or to withdraw cash. For using an ATM, the customer has to obtain an ATM card from his bank. The ATM card magnetically coded. It can be easily read by the machine. To operate an ATM card, the customer has to insert the card in the machine; he has to enter the password. ATM provides 24 hours service and convenience for the bank customers. It is also beneficial for travelers as they can withdraw money from anywhere in the country or outside the country. ATM provides privacy in banking transactions, so it is safe and not risky.
2. Credit Cards: -Credit Cards (VISA or MASTER CARD) are issued by the bank to the persons who may or may not have an account in their bank. Credit cards are used to make payments for purchase so that the individual does not have to carry cash. Banks allow a certain period to the credit card holder to make payment of the credit amount. The bank may charge a high rate of interest if payment is not done till the due date.
3. Debit Card:-Banks are now providing Debit cards to their customers having savings or current accounts in the banks. The customers can use this card for purchasing goods and services at different places instead of cash. The amount paid through debit card is automatically debited from the customer's account.
4. Electronic Fund Transfer (EFT): -Under this system, money can be transferred from one account to another account. There can be Direct credits, which include dividend on shares, interest on debentures, commission, salary, pension, etc and Direct debits which include telephone and electricity bills, loan installments, insurance installments, credit card dues, etc.
5. Core Banking: -Core Banking solution 'or' Centralized Banking solution' is popularly known as CBS. CBS is that banking system that makes banking convenient by changing the status of a customer from 'Customer of a Branch' to Customer of the Bank' facilitating speedy and effective banking anywhere and at all times. In this system, a customer by opening a bank account in one branch (which has CBS facility) can operate the same account in all CBS branches of the same bank anywhere across the country.
6. Internet Banking: -Computer and internet are commonly used by people. So as to facilitate them, banks have started transactions over internet. The customer has an account in the bank that can log on to the banks website and access his account. He can make payments for bills; give instructions for money transfer, fixed deposits, collection of bills, etc.
7. Phone Banking: -Customer of the bank having an account can get information of his account make banking transactions like fixed deposits, money transfers, demand draft, collection and payment of bills, etc. by using a telephone. As most of people are using mobile phones, phone banking is possible through mobile phones.
8. National Electronic Fund Transfer (NEFT): -NEFT refers to a nation-wide system that facilitates individuals, firms and companies to electronically transfer funds from any bank branch to any individual, firm or company having an account with any other bank branch in the country, NEFT settles transactions in batches. The settlement takes place at a particular time. For e.g., NEFT settlement takes place 6 times a day during the weekdays (9.30 am to 10.30 am, 12.00 noon, 1.00 pm, 3.00 pm, and 4.00 pm) and 3 times during Saturdays (9.30 am, 10.30 am, 12 noon).
9.  Real-Time Gross Settlement (RTGS): -RTGs refers to fund transfer system where transfer of funds takes place from one bank to another on a 'Real Time' and on 'Gross' basis. Settlement in 'Real Time' means payment transaction is not subjected to any waiting period. The transaction is settled as soon as they are processed. The RTGS services for customers are available from 9.00 am to 3.00 pm on weekdays and from 9.00 am to 12.00 pm on Saturdays.