Globally, about 10% of the customers regularly do online banking. In India, less than 1% of the millions of customers are using Internet banking but the trend is catching up and here’s why..

At present, 1.3 million users are connected through online banking but this number is bound to increase with the total increase in internet penetration and also with the banks offering convenient services through the online platform.

So what all can you do through e-banking? (the following facilities differ from bank to bank but most top banks like HDFC, ICICI and Citibank have such facilities available.

Bill payment service

Each bank has tie-ups with various utility companies, service providers and insurance companies, across the country. You can facilitate payment of electricity and telephone bills, mobile phone, credit card and insurance premium bills all at the click of a button!

Fund transfer

You can transfer any amount from one account to another of the same or any another bank. Customers can send money anywhere in India. Once you login to your account, you need to mention the payees’s account number, his bank and the branch and voila the money is transfered!

Credit card

Credit card users have a lot in store. With Internet banking, customers can not only pay their credit card bills online but also get a loan on their cards. Not just this, they can also apply for an additional card, request a credit line increase and God forbid if you lose your credit card, you can report lost card online.

Railway pass

Indian Railways has tied up with ICICI bank and you can now make your railway pass for local trains online. The pass will be delivered to you at your doorstep. But the facility is limited to Mumbai, Thane, Nashik, Surat and Pune. The bank would just charge Rs 10 + 12.24 per cent of service tax.

Investing through Internet banking

Opening a fixed deposit account cannot get easier than this. You can now open an FD online through funds transfer. Online banking can also be a great friend for lazy investors. Now investors with interlinked demat account and bank account can easily trade in the stock market and the amount will be automatically debited from their respective bank accounts and the shares will be credited in their demat account. Moreover, some banks even give you the facility to purchase mutual funds directly from the online banking system as well.  So you need not worry about filling those big forms for mutual funds, they will now be just a few clicks away. Nowadays, most leading banks offer both online banking and demat account. However if you have your demat account with independent share brokers, then you need to sign a special form, which will link your two accounts.

Recharging your prepaid phone

Now you no longer need to rush to the vendor to recharge your prepaid phone, every time your talk time runs out. Just top-up your prepaid mobile cards by logging in to Internet banking. By just selecting your operator’s name, entering your mobile number and the amount for recharge, your phone is again back in action within few minutes.

Shopping at your fingertips

Leading banks have tie ups with various shopping websites. With a range of all kind of products, you can shop online and the payment is also made conveniently through your account. You can also buy railway and air tickets through Internet banking.

So what does do research reports say?

As per the Internet and Mobile Association of India’s report on online banking 2006, “There are many advantages of online banking. It is convenient, it isn’t bound by operational timings, there are no geographical barriers and the services can be offered at a miniscule cost.”

So what do bankers have to say about e-banking?

“With the infrastructure in place, internet is proving to be the cheapest mode of operational costs. We handle 20,000 transactions per day and there is almost 20% cost reduction per transaction,” says RIS Sidhu, general manager, IT, Punjab National Bank

“Within the next 10 years, we foresee 15-20% cost saving in transactions because of the advancement and ITadoption,” says Kalyan Sunder, general manager, IT, Bank of India.
 
“At present, 1.3 million users are connected through online banking. About 12-13% of our daily transactions are online,” says Pravir Vohra, general manager, IT, ICICI Bank

So is E-banking just limited to urban masses due to access to internet?
The banks are going rural with ebanking..

“We have tied-up with BSNL and VSNL to provide better connectivity via phone banking. We also give special Kissan debit cards”, says SK Sharma, deputy general manager, Oriental Bank of Commerce.

“We are coming up with the concept of smart cards for farmers. We are also in line to devise services that are both offline and online to make the process of e-banking more farmer-friendly,” adds Mr Vohra of ICICI Bank.

Well what about NRI’s? Are they using e-banking?

“We offer a host of services to NRIs including remittance (QuickRemit), fund transfer and wire transfer. With the online trading systems offered by HDFC Securities a customer can trade in BSE and NSE. The trading system is integrated with the banking systems,” says CN Ram, head, IT, HDFC Bank.

E-banking the way its going ahead would make banks more profitable and customers happy with its convenience though the only concern is the security threats that online transactions bring with it especially cases of phishing which has resulted in people losing their money!

Here are some security precautions that once can observe..

Customers should never share personal information like PIN numbers, passwords etc with anyone, including employees of the bank. It is important that documents that contain confidential information are safeguarded. PIN or password mailers should not be stored, the PIN and/or passwords should be changed immediately and memorised before destroying the mailers.

Customers are advised not to provide sensitive account-related information over unsecured e-mails or over the phone. Take simple precautions like changing the ATM PIN and online login and transaction passwords on a regular basis. Also ensure that the logged in session is properly signed out.

(Source: ET and Rediff)

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