1. D.A.V.V.
School Of Economics
3rd Internal Assignment
“IT FOR MANAGERS”
On
“Internet Banking”
Submitted By:
Ashutosh Kaurav
Dhiresh Chawla
Sunil Chichra
Vivek Pandey

2. Internet Banking
Introduction
Internet banking mixes with 2 words i.e. Electronic technology and
Banking. It is Process by which a customer performs banking
transactions electronically via internet.
The automated delivery of new and traditional banking products
and services directly to customers through electronic, interactive
communication channels.
It’s also known as online banking or E-banking.This new and
convenient way of banking has set a boom in our day to day life
The concept of Internet banking has been simultaneously evolving
with the development of the World Wide Web (www). The online
shopping promoted the use of credit cards through Internet.
The automated delivery of new and traditional banking products
and services directly to customers through electronic, interactive
communication channels.
Internet Banking offers consumers and business alike the ease of
managing banking and financial tasks from home. Online banking
has become a lifeline for those who cannot leave the house, or live
in rural areas where access to banks can be limited.
Online banking facilities offered by various financial institutions
have many features and capabilities in common.
The remote delivery of new and traditional banking products and
services through electronic delivery channels.
The common features fall broadly into several categories:

3. A bank customer can perform non-transactional tasks through
online banking, including Viewing account balances
Viewing recent transactions
Downloading bank statements
Viewing images of paid cheques
New Cheque Book ordering
Download periodic account statements
Depositing Taxes
Downloading applications for M-banking, E-banking
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Funds transfers between the customer's linked accounts
Paying third parties, including bill payments
Investment purchase or sale i.e. investment services
Loan applications and transactions, such as repayments
of enrollments
Shopping
Ticket Booking
Prepaid Mobile Recharge
LIC & other insurance premium payments
Donations to NGO’s
Self-account funds transfer across India
Internet/Online banking is easy, reliable and convenient way to
fulfil our banking needs. This robust banking facility connects us
with our bank at our convenience, we don’t have to plan our day
according to bank hours, no more waiting in queue and even you
can check your balance whenever and wherever you want. Most of
the time online banking and internet banking are often used
interchangeably.
In this method, customer gets his bank account ID and password
and he can check his account, pay his bill and print his receipt

4. through his home personal computer which is connected with
Internet. E-banking is development of today banking system.
It refers to the provisions of electronic banking services via
internet through personal computer (PC) or other access devices
with internet capabilities.
From an economic perspective, information technology and
computer networks have enhanced the automation, speed and
standardization in communications and internal administration,
increasing customer convenience and functionally and reducing
costs in back-office and front desk banking functions.
Internet banking gives customers the ability to access virtually any
type of banking services in any place and at any time.
Many depository institutions contract with third party firms for
internet banking support services they choose not to provide
themselves.
ICICI was the first bank to initiate the Internet banking revolution
in India as early as 1997 under the brand name 'Infinity‘
ICICI Bank kicked off online banking way back in 1996. But even
for the Internet as a whole, 1996 to 1998 marked the adoption
phase, while usage increased only in 1999- due to lower ISP online
charges, increased PC penetration and a tech-friendly atmosphere
The Reserve Bank of India constituted a working group on Internet
Banking. The group divided the internet banking products in India
into 3 types based on the levels of access granted.
They are:- i) Information Only System ii) Electronic Information
Transfer System iii) Fully Electronic Transactional System
Information Only System

5.  General purpose information like interest rates, branch
location, bank products and their features, loan and deposit
calculations are provided in the banks website.
 There exist facilities for downloading various types of
application forms.
 The communication is normally done through e-mail.
 There is no interaction between the customer and bank's
application system.
 No identification of the customer is done. In this system,
there is no possibility of any unauthorized person getting into
production systems of the bank through internet
Electronic Information Transfer System
 The system provides customer- specific information in the
form of account balances, transaction details, and statement
of accounts.
 The information is still largely of the 'read only' format.
Identification and authentication of the customer is through
password.
 The information is fetched from the bank's application
system either in batch mode or off-line.
 The application systems cannot directly access through the
internet.
Fully Electronic Transactional System
 This system allows bi-directional capabilities.
 Transactions can be submitted by the customer for online
update.

6.  This system requires high degree of security and control. In
this environment, web server and application systems are
linked over secure infrastructure.
 It comprises technology covering computerization,
networking and security, inter-bank payment gateway and
legal infrastructure.
 Automatic 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 is replacing cheque, personal
attendance of the customer, banking hours restrictions
and paper based verification
HISTORY
Online services started in New York in 1981 when four of the city’s
major banks (Citibank, Chase
Manhattan, Chemical and Manufacturers Hanover) offered home
banking services
First internet banking service start in the UK 1983,Bank of Scotland
offers Nottingham Building Society (NBS) known as “home link”
connecting via a telephone and television to send transfers and pay
bills.
The first online banking service in United States was introduced, in
October 1994. The first online website was Stanford Federal
Credit Union, which is a financial institution.
In 2001, 19 million users start accessing bank accounts online

7. In 2005, Debit and credit was launched
In 2007, Apple launches I-phone and shifting of banking services via
personal computer or Smartphone begins
Technology has enabled numerous advantages and overcome the
traditional banking, offering the best of banking experience on
your fingertips.
Advantages Of Internet Banking
1. Convenience
2. No lines
3. Availability
4. Innovation
5. Easy to Operate
6. Friendlier Rates
7. Transfer Service
8. Ease of Transactions
9. Less Time Consumption (Speed)
10. Multiple Operations In Single Shot
11. Performance
12. Shop & Payment
13. Banking from anywhere in the world
14. Inexpensive

8. Disadvantages Of Internet Banking
1. Legal Issues
2. Setting up an account may take time
3. Site changes and Updates
4. Customer Services
5. Ease Internet Access
6. Security Concerns (Risks, Hacking)
7. Technical Breakdowns
8. Switching Banks
9. Money Usage (req. ATM)
10. Learning Difficulties
11. Computer Skills and Internet Knowledge Required
12. Required Hardware’s to operate (PC, handsets)
13. Banks himself don’t trust their own security systems
14. Relevant Operating system required (98, 2000, vista)

9. Online Banking versus Traditional Banking: – A Comparison
Traditional Banking
* Traditional banking is great because you can develop relationships
with your bank representatives. This is helpful when you’re
borrowing money, looking for sound advice or just like to know the
people who are managing your money.
* In traditional banking transactions you do not need any type of
security.
* Traditional banking also offers the convenience of easy deposits
and withdrawals. You know that your deposit will be in your account
the same day or the next day. And you can withdraw money during
regular banking hours.
* Traditional banks offer a number of features like money orders,
wire transfers and travelers checks, often without a fee. You can still
get these from banks where you don’t have an account but there is
usually a high fee involved to process.
* The only matters that you have to keep your bank papers of
bankbook safe.
* Traditional banks have security in the form of surveillance cameras
and occasionally they employ security guards.
* If you are having any problem related to the bank, you can
immediately go to the bank and solve your doubts.
* You can get any information related to bank and still have any
doubts you can immediately ask.
The downside to traditional banks is that you have to stick to their
business hours, which aren’t always convenient. You cannot access
your bank account when you’re out of town, and every time you need
to process a transaction you have to go to the bank.
* If the papers of bank are lost you may also lose the right of your
bank properties.

10. * In traditional banking sometimes your work may remain
uncompleted which is wasted of time.
*If employees are busy with their bank it is not possible that they
may give you the proper answer.
*Your bank papers are not secured through traditional banking
Online Banking
* Online banking means you can access your account from anywhere
at any time. You can get into your account, transfer money, pay a bill,
and make withdrawals and deposits from other accounts.
* Online banking is fast. You don’t have to leave your couch to
process a transaction.
* Online banking is often cheaper. In addition to being able to offer
competitive rates, many online banks don’t charge hefty fees and you
don’t have to pay for the gas to get there. And you save money on
postage if you’re paying bills electronically.
* Most online banks also send notices and statements via email,
which saves paper and notifies you immediately if there is any funny
business with your account.
However, the downside to online banking is that you need an internet
connection to interact with your account. You also have to be
comfortable using the computer. Finally, online banking poses some
security and identity theft risks. Most online bank accounts offer
advice, assistance and protections to keep your information and your
money safe.
* In online banking services one needs to count with an internet
service provider.
*Hackers may access your bank account
Switching banks can be more cumbersome online than one person.

11. CONCLUSION
E-banking transactions are much cheaper than branch or even
phone transactions. This could turn yesterday’s competitive
advantage – a large branch network –into a comparative
disadvantage, allowing e-banks to undercut bricks and mortar

12. banks. This is commonly known as the “Beached Dinosaur”
theory.
E-banks are easy to setup, so lots of new entrants will arrive . Old
world’ systems, cultures and structures will not encumber these
new entrants. Instead, they will be adaptable and responsive. Ebanking gives customers much more choice. Consumers will be
less inclined to remain loyal. Portal providers are likely to attract
the most significant share of banking profits. Indeed banks could
become glorified marriage brokers. They would simply bring two
parties together e.g. buyer and seller, payer and payee.
The products will be provided by monoclines, experts in their field.
Traditional banks may simply be left payment and settlement
business even this could be cast into doubt.
Traditional banks will find it difficult to evolve, not only will they
be unable to make acquisitions for cash as opposed to being able to
offer shares, they will be unable to obtain additional capital from
the stock market. This is in contrast to the situation for internet
firms for whom it seems relatively easy to attract investment.