Banking Awareness Study Material
E-Banking/Online Banking/Internet Banking
E-Banking refers to electronic Banking It is like e-business in banking industry. E-banking also called as “Virtual Banking” or “Online Banking”. E-Banking involves information technology based banking.Under this IT system, the banking services are delivered by way of a Computer -Controlled System. This system involves direct interface with the customers. The customers need not to visit the bank’s premises.
Popular services covered under E-banking
- Automated Teller Machine
- Debit Card Automated Teller Machine
- Electronic Funds Transfer System
- Mobile Banking
- Telephone Banking
- Credit Card
- Smart Card
- Cheques Truncation Payment System
- Internet Banking
Automated Teller Machine (ATM)
ATM is designed to perform the most important function of bank. It is operated by plastic card with its special features. The plastic card has replaced cheque, personal attendance of the customer, banking hours restrictions and paper based verification. These are debit cards. ATMs are used as spring board for Electronic Fund Transfer. ATM itself can provide information about customers account and also receive instructions from customers - ATM card holders . An ATM is an Electronic Fund Transfer terminal capable of handling cash deposits, transfer between accounts,balance enquiries, cash withdrawals and pay bills. It may be on-line or off-line. The on-line ATM enables the customer to avail banking facilities from anywhere. In off-line, the facilities are continued to that particular ATM assigned. Any customer possessing ATM card issued by the Shared Payment Network System can go to any ATM linked to Shared Payment Networks and perform his transactions.
Credit Card/Debit Card
The Credit Card holder is empowered to spend wherever and whenever he wants with his Credit card within the limits fixed by his bank. Credit Card is a post paid card. Debit Card, on the other hand, is a pre-paid card with some stored value. Every time a person uses this card, the Internet Banking house gets money transferred to its account from the bank of th buyer. the buyers account is debited with the exact amount of purchases. An individual has to open an account with the issuing bank which gives debit card with a Personal Identification Number (PIN). When he makes a purchase, he enters his PIN on shops PIN pad. When the card is slurped through the electronic terminal, it dials the acquiring bank system - either Master Card or VISA that validates the PIN and finds out from the issuing bank whether to acceopt or decline the transactions. The customer can never overspend because the system rejects any transaction which exceeds the balance in his account. The bank never faces a default because the amount spent is debited immediately from the customer’s account.
Smart Card
Banks are adding chips to their current magnetic stripe cards in order to enhance security and offer new services, that are called Smart Cards. Smart Cards allow thousands of times of information storable on magnetic stripe cards. In addition these cards are highly secure, more reliable and perform multiple functions. They hold a large amount of personal information ranging from medical and health history to personal banking and personal preferences.
Electronic Funds Transfer
Electronic Funds Transfer (EFT) provides for electronic payments and collections. EFT is safe, secure, efficient and less expensive than paper check payments and collections. RBI EFT is a Scheme introduced by RBI to help banks offering their customers money transfer service from account to account of any bank branch to any other bank branch in places where EFT services are offered.
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