3 days are left for my SBI exam. I am very bad at writing descriptive essays. So i am planning to write small points and templates for each and evry topic everyday so that we can utilize these common points to write in exam. All the puys are requested to give their additional viewpoints for the topic discussed...
2nd Topic
Interne
t Banking or E- Commerce
Para 1 (Introduction)
1.E-banking comprises of Internet Banking, Smart Cards, Debit Cards, Credit Cards, Automated Teller Machines, and Charge Cards etc. Now-a-days, foreign banks are also entering into the Indian Banking Market. They are serving a hard and severe competition to nationalize and private sector banks.
2.Introduction of these techniques have made the transactions and activities of businesses very effective and smooth.
3.A sound and effective banking system is the backbone of an economy. The economy of a country can function smoothly and without many hassles if the banking system backing it is not only flexible but also capable of meeting the new challenges posed by the technology and other external as well as internal factors. The importance and role of information technology for achieving this benign objective cannot be undermined.
Para 2 (Advantages)
1. Customers traditionally believed in branch banking where in we use to go the branch personally for making banking transactions but now it is not the case.
2. Customers can do our banking at finger tips with the help of the internet. It not only enables the users to make the transaction on the computer but also through the mobile phone.
3. Customers can now perform several banking operations such as fund transfers, opening deposit accounts, ordering cheque books and demand drafts, paying utility bills, applying for loans, and getting account statements without visiting a branch.
5. Those days foreign banks like HSBC, SCB, and Citibank offered Internet banking but now Indian banks like Canara bank, Union Bank and Indian Overseas bank has also started offering internet banking in full fledge.
6. This serves as an advantage for both the customers as well as for the bank since it is a cost effective method for the banks wherein they can also serve more customers for more complex transactions in the bank.
7.Also one can transfer funds online to any A/c in India provided they are signed up for the service through IFSC code which not only saves time but also money and it prevents writing cheques unnecessarily.
8.Banking has also seeing a change due to efforts of the Reserve Bank of India (RBI) to inculcate a habit of paperless payments such as credit and debit cards, electronic fund transfers and mobile banking.
9.Banks even offer discounts and offers and reward points for using their website for doing banking transactions which is a boon for customers.
10. Thus one need not have to travel all the way to bank unless needed. E-Commerce has clearly revolutionized the Indian banking system.
Para 3 (Cost Benefit)
1. When a customer walks into a branch to withdraw money, the cost to the bank may be as high as Rs 200 whereas an ATM transaction would cost around Rs 20 or even less
2. There is a tendency to discourage customers from visiting branches since it adds to the cost of the bank and is also inconvenient for customers. Moving to alternative channels is a win-win for both sides
3. Banks are also discouraging direct interface with customers by levying charges for some transactions such as payment of credit card bills through cash or depositing cheques at bank counters instead of putting them in drop boxes.
4. Some banks though are using the business correspondent model (where a third party serves as the interface between a bank and its customers) to expand their reach and bring more people under formal banking using technologies such as handheld devices and micro-ATMs.
5. Similar to the central customer identification system (Know Your Customer, or KYC) used by mutual funds, a common database may soon do away with the need for physical verification of new customers
Para 4 (Bottlenecks)
1. Acceptance of electronic payments and cards is very low in the country. The cost of using electronic payment modes is also a hurdle. Moving out of the metros, people are more comfortable with cash.
2. For small transactions, cost of using credit or debit cards is very high, both for banks and vendors. This is a bottleneck in expansion of electronic payments
3. Many people are having access to Internet and Mobile Connections. But everything has two aspects – good and bad.
4. The adoption and switch over to Electronic banking will also raise certain legal issues and disputes in the future which have to be anticipated and remedial measures for the same need to be adopted.
5 Banking websites even offer additional security like firewalls, encryption etc to make the websites safer.
6. Companies like Master card and Visa is now offering additional security for internet credit card users through MasterCard Secure Code and Verified by Visa and RBI has made.
Para 5 (Conclusion)
1. However, modern electronic payment systems are still concentrated in metros and large towns (Tier-I and II locations). A large chunk of the Indian population still does not have access to formal banking channels, let alone the newer alternatives.
2. The technology and security standards are of prime importance as the entire base of Internet banking rests on it.
3. Even as technology transforms banking as we know it, branches will continue to play a crucial role in moulding the industry.
4. The day where all customers do banking only on the internet is not far away.