NTERNET BANKING IN INDIA: A GLIMPSE OF ITS
ADOPTION AND IMPLEMENTATION IN INDIA
Author: Sonal Chawla
Lecturer, Dept. of computer science and Applications
Punjab University, Chandigarh india
The banking sector in India has undergone a rapid transformation. Almost a decade ago this area was limited to nationalized banks and cooperative. Then came the multinational banks, but were these limited to serve small elite. One could consider the past as the "Middle Ages" in the banking sector, in which each branch of the same bank acted as independent information silo and multichannel banking (ATMs, Net Banking, tele-banking, etc) was almost nonexistent. The main reason for this first transformation is due to improved methods developed encryption security and Internet. The second reason is that banks do not want to lose a potential market share for banks that are quick to offer their Internet services.
The objective of this research is just comparing the modern era banking system with the old one. EVOLUTION OF MODERN BANKING
The evolution of modern banking technology began with the use of advanced machines shipping Ledger (ALPM) in the 1980s. The Reserve Bank of India, which is a central policy under which several public sector banks, financial institutions, NBFCs etc. working in India had advised then all banks to go massive computerization branch level. Two options were raised i.e. either to automate the front office or office. Many banks opted for ALPM office automation in the first phase. Banks as State Bank of India, a public sector commercial bank, focused on automating back office in branch level. The Rangarajan Committee 1985 report said the banks had to get computerized. The second wave of development called for Total Bank Automation (TBA) in late 1980. This automated both the front-end and back-end operations within the same branch. TBA compound total automation of a particular branch with its own database. In the third wave, the new private sector banks entered the field. These banks have opted for a different model of having one central database instead of having multiple databases for all branches. This was possible thanks to the availability of good network infrastructure. In the beginning of the 1990s, the cost of the leased line goes down. The DoT was expanding its capacity and new technologies were being implemented. Earlier, banks were unsure of directing the whole operation through a single data center. However, when a couple of private sector banks implemented efficiently, other banks began to show interest, and also began consolidating their databases in a single database . Banks follow this movement by choosing appropriate application software that supports centralized operations. The fourth wave began with the evolution of ATM delivery channel. This was the first stage of training the client for their own transactions. The second stage was Suvidha experiment in the city of Bangalore in India. This showed the power of technology and how the scope can be increased at a rate unusually large. Seeing this, all banks began to renew their retail distribution channels. Their main focus became the number of customers they can service at a lower cost. The main channels are chains such as Internet banking and mobile banking. After this came alliances for payment through different gateways. The third major event happening now is the real time gross settlement system of the RBI. Once this is in place, transactions between banks can be done through the settlement system, online, electronically. So collections will become very fast. Within five years, most transactional services are provided by way of the Internet. Net-based banking takes only 10 percent of the operating costs of conventional banking practices and services. Because banks will play a key role in terms of public services related to electronic money transactions we feel that cooperative banks NET-Banking...
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