2. E-Banking - The Concept E- Banking Telephone Banking
Electronic Banking Other Electronic Delivery Channel Example- ATM
(Intranet Concept)
3. Information on E-Banking What is Internet Banking or E-
Banking ?The performance of banking activities via the Internet.
Online banking is also known as "Internet banking" or "Web
banking." A good online bank will offer customers just about every
service traditionally available through a local branch, including
accepting deposits (which is done online or through the mail),
paying interest on savings and providing an online bill payment
system. Easy Transaction - Electronic fund transfer is about
transferring of funds through electronic medium. It consists of
transfer of funds from one account to the other, instead of other
conventional medium for e.g. cheques/cash. It is a user friendly
and customer oriented, as there is a need of only the user to be
connected to through his/her browser to the banks centralized
database wherein it is web enabled
4. IT and E-Banking Sound Payment System -The payment basis
with respect to the banks in India has its large base via the cash
medium even though there is a provision of that of the non-cash
basis. Many banks have taken the initiative of setting up an IT
structure to promote electronic mode of payment. Sound Payment
System Herein the role of IT in E-banking has been exlained.
Information Technology Improvement of Financial Infrastructure
System - Several steps have been taken by reserve bank of India to
speed up the up gradation of banking system through improving the
infrastructure of financial system.Some of these steps include the
payment through the MICR cheque as well as the Electronic Funds
Transfer and Electronic Service Clearing Financial Infrastructure
System
5. Means of E-Banking RTGS E- Cheque Tele Banking Mobile
Banking Smart Card ATM
6. E- Banking in India
7. Indian Scenario E banking contributes heavily to countries
development of economy both as part of past and future. Competition
has lead to the adoption of E- banking. The guidelines which are
set up by RBI with respect to the security issues is not followed
by most of the banks in India. RBI has also insisted for the banks
to adopt ethical hacking policies as the banks do not have any
clear guidelines to follow regarding this aspect under the IT act
or any by the RBI.
8. Continued.. The ICICI Bank kicked off online banking in
1996, followed by a host of other banks. But even for the Internet
as a whole, 1996 to 1998 marked the adoption phase, while usage
increased only in 1999, owing to increased PC penetration and a
tech-friendly atmosphere. The IT Act of 2000 did address the need
for banks to go online However, one cannot say the aspirations of
the industry have been satisfactorily looked into. Reserve Bank of
India has taken several initiatives in setting guidelines for
Internet banking, and reviews them at periodic intervals. and have
laid out security measures to
9. Effect of E-Banking in India Secured Future The future of
e-banking seems secure due the ever increasing adoption and arrival
of new technologies to address existing limitations. Major
innovations are expected in the area of e-banking using mobile
phones, in security provision and customer services. Solutions
being Adopted Develop a clear strategy and communicate it
throughout the organization. It must be driven by the top
management and should take into account the effects of e-banking.
Solutions being Adopted The electronic devices which perform
interact with customers and communicate with other banking system
is called electronic banking delivery channels which is being
adopted. E-Banking transaction needs some interface to communicate
with banking customer. All the electronic transaction performs
through some interfaces.
10. Issue 1: Customers Types of Bank Observed frequency
Percentage PSU 425 42.5 Private Bank 445 44.5 Foreign Bank 38 3.8
Co operative Bank 92 9.2 Total 1000 1000
11. Awareness of E-Banking (1 st Issue) Particulars Category
Respondents Percentage Awareness of E-banking offers NO 106 10.6
Awareness of E-banking offers YES 894 Total: 1000 89.4
Total:100
12. Problems faced with E-Banking ( 1 st Issue) Reason for not
using E Banking Services Respondents Satisfied with traditional
Banking 51 It is difficult to use 32 Fear of insecure transaction
26 No access to Internet/Mobile/Other 28 Lack of Operational
Knowledge 22 Hidden Costs 25
13. Issue 2 : Government Failure of Implementation of Project
No Proper Guidelines from RBI Sluggish Services Trust Issues Speedy
Decisions Needed
14. Issue 3: Small Scale Enterprises Smaller-Loans needed
therefore large charge so as to cover the cost. . The online
information is considered to will enhance the SMEs ability wherein
they can secure financing. Collaterals and Guarantees -in many
developing countries, banks are still in the very early stage of
mastering sound lending policies and good credit practices.
15. Issue 4: Online Frauds and Internet Security Trail
Procedure Error Data Protection Hacking
16. India VS. US Scenario USA The US laws if there is any bank
fraud which takes place because of the e-banking then the liability
lies on that of the bank wherein the bank has to pay the liability
and there is a cap of $ 50. USA Is more proactive when it comes to
resolving the issue of Internet fraud. INDIA While the story is
different when it comes to India , here the customer is liable for
any fraud if it takes place via the internet. Reserve Bank of India
has come up with draft payment vision document for the year 2012-15
wherein it states that there will be the introduction of that of
the customer protection measures as like that of the zero liability
clause which is considered to be similar to that of the paper based
transaction and the proving of the aspect of the good faith lies
onto the banks, wherein under the electronic aspect this basically
lies onto the customers largely
17. Issue 5: Cross Border E- Banking Foreign Laws &
Regulations Licensing Policies & Laws may lead to due diligence
of the bank Treaty Shopping
18. Issue 6: Bitcoins It is an online system by which payment
can be done. This system involve peer to peer users for the
transaction wherein there is no need for an intermediately. This
system is regarded to be that of a decentralized virtual currency
by the US treasurery. It is considered to a largest of its kind
with respect to the total market value which is there. The use of
Bitcoin as a form of that of the payment for the service is growing
rapidly. Even though many merchant are accepting its use but it
does not have much market as for the retail transaction. Some
authorities like the European Banking Authority have warned the
users that they cannot be protected when it comes to refund rights
or that of the charge backs
19. Continued . Many of the giants are using the bitcoin like
Microsoft in the year 2004 and then the Chinese Internet giant
Baidu. Bitcoin is seen with an eye of suspicion in India. According
to the SourceForge, this online platform is connecting the
consumers to that by the open source project and the downloads in
India had reached to 35, 648 in India Anuj Srivas, Reserve Bank
Warns against Bitcoin Use.
20. Legal Provisions E -Banking
21. Legal Provision Section 131 of that of the Negotiable
Instrument Act, 1881 are of the view that there is a need with
respect to the establishment of that of the identity as well as to
make inquiry with respect to the reputation of that of the future
customer. That is why there was an introduction of that under the
IT Act 2000 with respect to the digital certification machinery
Refer to Section 131 of Negotiable Instrument Act, 1881. Section 21
of the IT Act banks to be allowed to issue digital signature as
well to be the authority which would certify the internet banking.
RBI also has the power to make recommendation with respect to the
Central Government for the notification of that of the business of
the certifying authority as being an approved authority under the
clause (o) of that of Section 6(1) of that of the Banking
Regulation Act.Refer to Section 21 of Information Technology Act
2000. may assess the risk and insure themselves against such risk
The Consumer Protection Act, 1986 clearly defines the rights of
consumers in India and is pertinent to banking services as well.
Presently, the rights and liabilities of customers availing
Internet banking services are being determined by bilateral
agreements between the banks and customers. It is subject to debate
vwhether any bilateral agreement defining customers rights and
liabilities, which are adverse to consumers than what they enjoy in
the traditional banking scenario will be legally secured.
Considering the banking practice and rights enjoyed by customers in
traditional banking, it appears the banks providing I-banking may
not absolve themselves from liability to the customers on account
of unauthorized transfer through hacking. Similar position may
obtain in case of denial of service. Even though, The Information
Technology Act, 2000 has provided for penalty for denial of access
to a computer system (Section-43) and hacking (Section 66), the
liability of banks in such situations is not clear. The Group was
of the view that the banks providing Internet banking s.
22. Case Analysis :If it would have been an Indian Case PATCO
VS. PEOPLES UNITED BANK Patco, a family-owned construction firm in
southern Maine, fell prey to the Zeu Sbotnet in May 2009. According
to the court ruling, indicators of the ZeuStrojan were found on the
employee's computer, but it was later quarantined and deleted by an
outside IT consultant who ran an anti-malware scan. Hackers bilked
its account with Ocean Bank for more than $588,000 before the
fraudulent activity was detected and stopped. The bank recovered
roughly $243,000. Patco sued Ocean Bank for the balance, but it
won't see a dime. A U.S. District Court magistrate in Maine
recently recommended the case be dismissed, citing the bank's
accordance with Federal Financial Institutions Examinations Council
(FFIEC) security guidelines. Here the SMBS were responsible to
submit the money for the loss. 'reasonable security' was very
tightly aligned with FFIEC guidance,"
23. Continued. Similar Ideas but different judgement: Experi-
Metal, a Michigan-based manufacturing firm, sued Comerica after it
was robbed of more than $1.9 million by hackers in early 2009. At
the surface, the case bears quite a bit in common with the Patco
suit, yet it produced an entirely different outcome. US District
Court Judge Patrick J. Duggan ruled earlier this month in favor of
Experi-Metal, requiring the bank to reimburse the company's
losses.
24. Conclusion.. Banking Regulations Act, 1949, the Reserve
Bank of India Act, 1934 and the Foreign Exchange Management Act,
1999 The Information Technology Act 2000 attempted to address a
number of e-commerce regulatory issues. Reserve Bank of India has
taken several initiatives in setting guidelines for Internet
banking, and reviews them at periodic intervals. Most important,
RBI approval was made mandatory for all banks before offering any
transactional services over the Internet. Adoption of this type of
System: While in the US n 1973, the U.S. Defense Advanced Research
Projects Agency (DARPA) initiated a research program to investigate
techniques and technologies for interlinking packet networks of
various kinds.