E - Banking

E - Banking

History qImagine a Scenario

qStandard Federal Credit Union was the first financial institution to offer online internet banking services in October, 1994

E - Banking qDefinition

qWhat is E-Banking?

Internet Banking qMeaning

qAdvantages of E-Banking

Internet Penetration in India

Stages in Internet Banking qInformation Kiosks

qBasic I-banking

qVirtual medium

E-Banking in India qNet Banking Facilities

qChanging Scenario

Services Provided by EBanking

qAutomatic Teller Machine (ATM) qTelephone Banking qDebit/Credit Cards qSms Banking

Internet Banking Services qMobile Banking qeTax qOnline Trading qOnline Remittances qOnline Bancassurance

qElectronic Bill Payment

qShop Online

qOther Value Added Services v IRCTC v User Profile v Prepaid Mobile

Challenges in Internet Banking: qProper understanding of the customer qSecurity: qProtected against being "net-jacked“ qCracking login and passwords qData Diddling qSession hijacking qStandardization qLegislative and Regulatory Issues

Challenges in Internet Banking: qInfrastructure qHeavy Investment Costs qSocio-Cultural Challenges qBreach of privacy qBandwidth qComputer literacy

Guidelines for internet banking q Technology and security issues

qLegal issues

qRegulatory and supervisory issues.

Technology and Security q Banks should select a network and database Standards: administrator with clearly defined roles.

q Proper security policy approved by the Board of Directors. q Banks should introduce logical access controls q Banks should use the proxy server type of firewall q All unnecessary services on the application server such as FTP (File Transfer Protocol), telnet should be disabled.

Technology and Security Standards: q Review their security infrastructure and security policies

regularly and should change with changing technologies

q Banks should have proper infrastructure and schedules for backing up data. Business continuity should be ensured by setting up disaster recovery sites. q Proper record keeping facilities for legal purposes. q Security infrastructure should be properly tested before using the systems and applications for normal operations.

Legal Issues qBanks have to make enquiries about integrity and reputation of the prospective customer. qSecurity procedure adopted by banks for authenticating users needs to be recognized by law as a substitute for signature. qUnder the present rule there is a compulsion on banks to maintain secrecy and confidentiality of customers accounts. qVery little scope for the banks to act on stoppayment instructions from the customers.

Regulatory and Supervisory Issues qOnly such banks which are licensed and supervised in India and have a physical presence in India will be permitted to offer Internet banking products to residents of India. qThe products should be restricted to account holders only qThe services should only include local currency products. qThere should be three screen authentication giving access to customers.

Current news Ø Banking system needs consolidation, says OP Bhatt ü To produce stronger player to fund globalizing Indian Industry ü Atleast 4 banks of SBI Bank size and two banks having global scale ü SBI merges its subsidiaries i.e. Bank of Saurashtra ü Initiative to be taken by banks itself : FM

Ø RBI caps third-party ATM withdrawals: ü Set a limit of Rs.10,000 per transaction ü Five times per month

Ø RBI rejects plan to reopen Nanded bank ü Ashok Chavan, CM, had sanctioned a Rs 110-crore grant. ü Banking regulation act does not permit co- operative bank to have ‘government grants’. ü Raised the limit of the depositor withdrawals of deposits from Rs.1000 to Rs. 3000.

Ø Nokia plans to launch mobile 'banking’

Ø The service, available 24 hours a day, will be rolled out from early 2010.

Ø Kerala to set up first Islamic i-firm

Ø With a net corpus of Rs 500 crore, the Shariah-based investment firm will roll out Islamic leasing in the first phase and housing finance subsequently

Ø State government will permanently hold 11% stake in the

Ø Religare bids for ING's Asia assets: ü Religare will be able to get a presence across Asia. The pricing would depend on the asset composition and also the sustainability of these assets ü ING would like to go for multinational private unit.

Ø ICICI Bank for doubling returns; to be in top-5 listed cos Ø Ambitious plans to double the returns to investors in 3yrs time. Ø Share price has increased sharply from Rs 252.75 to Rs. 750. Ø Cut down on wholesale deposits, focus on CASA, raise fee income, cut operating costs and control credit losses.

Ø Don't count ADR, GDR to decide bank's nationality: ICICI Ø Under DIPP( Department of Industrial policies and promotion), if it has more than 50% of indirect foreign investment to be a non resident. Ø ICICI Bank has little over 51% held by FIIs, 29.07% held through ADRs alone.

Ø All villages to enjoy banking in two years Ø Reserve Bank of India (RBI) to achieve financial inclusion across the country with the help of business correspondents (BCs).

Ø Will prefer acquiring a domestic bank over global: ICICI BanK Ø Our focus is to grow as the Indian corporate grows here, and even international focus was always to grow with international requirements of the Indian corporate Ø Sangli bank and Bank of Madura

Ø Under DIPP( Department of Industrial policies and promotion), if it has more than 50% of indirect foreign investment to be a non resident. Ø ICICI Bank has little over 51% held by FIIs, 29.07% held through ADRs alone.