Challenges of E-Banking in India

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Thesis-D

Topic: The challenges of Legal and technical infrastructure of  e-banking in India.

Abstract

Electronic banking has been successfully adopted by developed countries and has been fully embraced by all the stakeholders active in the process. But developing countries are still lagging behind to fully embrace the benefits of e-banking. This paper explores Technical and legal factors impacting e-banking adoption in India. The research framework consists of two dimensions; technology and legal; to guide and constrain the scope of study. The findings are based on literature study of models and implementation experience of e-banking in India. The purpose of this study is to offer insights into the current e-banking adoption situation and its implications for e-banking growth in India as an example of a developing country.

Research Question: What are technical and legal challenges for adopting electronic banking system in India?

Keywords: e-banking, internet banking, online banking, security, privacy, trust, India.

Introduction

Electronic banking, an upcoming trend in today’s commercial world is widely demanded by citizens, companies and various other organizations. The ease of use and availability has been the striving business drivers in this sector; that has led to this new revolution of electronic banking. With the increasingly complex methodology of commerce evolved over the information technology platform, serious concerns are also raised in various aspects.

Security of transaction has been in the limelight as a major concern among the e-bank’s account holders. Due to the open nature of the Internet, confidentiality of data and integrity of the system and data are other emerging concerns among the end-users[1] (Benjamin M. Friedman, 2000). Certain risks particularly governance, legal, operational, and reputational, that was inherent in traditional banking has been exacerbated to a large extend with the advent of e-banking[2] (World Bank discussion Paper 431). But there has only been an obscure understanding of risks of an e-banking system.

As the economy is heading towards customer centric online services, reliability of the e-banking system has a huge stake in the overall success of the system. Understanding the affectivity; is pivotal in terms of ensuring seamless implementation and overall success of the system[3]. The objective of this paper is to comprehend the technical and legal challenging factors of electronic banking system in India.

Method

The approach taken in this paper is to outline a present electronic banking through literature reviews. With the wide range of variations in the banking model across countries and states, literature review will be mainly focused on a particular domain. The main analysis would be to understand the past and present models and the trend of changes that is driving the innovations in the system. Suggestions of improvement in the system will be generated by extrapolating the system expectations based on the trend and rational expectation of the users. Apart from being informal and incomplete, I hope that this framework will serve the purpose of providing a conceptual structure for this paper and for answering the questions addressed in it. The paper adopts literature study approach by referring to case studies and authentic articles in the domain of challenges of technical and legal e-banking systems. The purpose is to introduce a model to get a holistic and multiple perspective view of risks involved in implementation and how to mitigate it.

Data Retrieval

The case study was carried out as a post facto study of the development of a recently launched e-service in privatized banks in India[4]. The researchers identified the bank’s goals of introducing the e-service and also identified the requirements aimed at fulfilling the needs and expectations of the different stakeholders. This was achieved by investigating documents regarding the...
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