E-banking is known as electronic banking, online banking, or internet banking. It is simply the use of electronic and telecommunications networks for delivering various banking products and services. Through e-banking, a customer can access his account and conduct many transactions using his computer or mobile phone.
Importance of E-banking
We will look at the importance of electronic banking for banks, individual customers, and businesses separately.
- Lesser transaction costs: Electronic transactions are the cheapest modes of transaction
- A reduced margin for human error: Since the information is relayed electronically, there is no room for human error
- Lesser paperwork: Digital records reduce paperwork and make the process easier to handle. Also, it is environment-friendly.
- Reduced fixed costs: A lesser need for branches which translates into a lower fixed cost.
- More loyal customers: since e-banking services are customer-friendly, banks experience higher loyalty from their customers.
- Convenience: a customer can access his account and transact from anywhere 24×7.
- Lower cost per transaction: since the customer does not have to visit the branch for every transaction, it saves him both time and money.
- No geographical barriers: In traditional banking systems, geographical distances could hamper certain banking transactions. However, with e-banking, geographical barriers are reduced.
E-banking in India
In India, since 1997, when the ICICI Bank first offered internet banking services, today, most new-generation banks offer the same to their customers. In fact, all major banks provide online banking services to their customers.
Services Provide Under E-banking in India
- ATMs. (Automated Teller Machines)
- Telephone Banking.
- Electronic Clearing Cards.
- Smart Cards.
- EFT (Electronic Funds Transfer) System
- ECS (Electronic. Clearing Services)
- Mobile Banking.
- Internet Banking.