Full Length Research
Internet banking in India: Emerging risks and new dimensions R. K.Uppal
Principal Investigator, University Grants Commission Sponsored Major Research Project, D.A.V College, Malout152107, Punjab, India. E-mail: email@example.com, Mb. 094635-99700, 01637-261188(R) Accepted 24th February, 2011
In the present day, total automation of banking operations is an imperative need for all banks to attract more customers, provide efficient services, and survive in the emerging new competition, apart from the profit motive which is the primary objective of the business. In order to achieve these goals of business, various e-channels have been developed through technology. ‘Internet Banking’ is one of the best alternative channels available to customers for quick, correct and efficient service at anytime and anywhere. The present paper is devoted to explore the extent of Internet banking in Indian banking industry. Time period taken for study is 2000-01 to 2006-07 because this period is the eye-witness of infant condition of IT and during the same period IT became mature. Simple statistical tools like average, standard deviation, co-efficient of variation are used to calculate the efficiency of various bank groups providing the service of I-banking. On the basis of analysis, the paper concludes that the private sector banks are on the top in providing the I-banking services to their customers and have high profitability as compared to other bank groups under study except foreign banks. The paper also highlights the benefits of i-banking to customers as well as to bankers and suggests some strategies with their possible solutions like to spread awareness regarding I-banking and to increase its area and scope to enhance I-banking services in India, particularly in rural and semi-urban areas. Keywords: Extent of internet banking, strategies to enhance i-banking services INTRODUCTION Competition and the constant changes in technology and lifestyles have changed the face of banking. Now-a-days, banks are seeking alternative ways to provide and differentiate amongst their varied services. Customers, both corporate as well as retail, are no longer willing to queue in banks, or wait on the phone, for the most basic of services. They demand and expect to be able to transact their financial dealings where and when they wish to do. With the number of computers increasing every year, the electronic delivery of banking services is becoming the ideal way for banks to meet their clients’ expectations. The use of information technology in banking is now inherent in banking industry. A customer can log on banks website and access his account. He can perform following functions online: Balance enquiry, Transfer of funds and online payment. Internet banking is the term used for new age banking system. Internet banking is also called as online banking and it is an outgrowth of PC banking. Internet banking uses the internet as the delivery channels by which to conduct banking activity, for example, transferring funds, paying bills, viewing checking and saving account balances, paying mortgages and purchasing financial instruments and certificates of deposits. Internet banking is a result of explored possibility to use internet application in one of the various domains of commerce. It is difficult to infer whether the internet tool has been applied for convenience of bankers or for the customers’ convenience. But ultimately it contributes in increasing the efficiency of banking operation as well providing more convenience to customers. Without even interacting with the bankers, customers transact from one corner of the country to another corner. More recently in India too, a wider array of financial products and services have become available over the Internet which has thus become an important distribution channel...