E-Banking and Its Contribution to Indian Economy

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Summary

Traditional banks offer many services to their customers, including accepting customer money deposits, providing various banking services to customers, and making loans to individuals and companies. Compared with traditional channels of offering banking services through physical branches, e-banking uses the Internet to deliver traditional banking services to their customers, such as opening accounts, transferring funds, and electronic bill payment. E-banking can be offered in two main ways. First, an existing bank with physical offices can also establish an online site and offer e-banking services to its customers in addition to the regular channel. For example, Citibank is a leader in e-banking, offering walk-in, face-to-face banking at its branches throughout many parts of the world as well as e-banking services through the World Wide Web. Citibank customers can access their bank accounts through the Internet, and in addition to the core e-banking services such as account balance inquiry, funds transfer, and electronic bill payment, Citibank also provides premium services including financial calculators, online stock quotes, brokerage services, and insurance. E-banking services are delivered to customers through the Internet and the web using Hypertext Markup Language (HTML). In order to use e-banking services, customers need Internet access and web browser software. Multimedia information in HTML format from online banks can be displayed in web browsers. The heart of the e-banking application is the computer system, which includes web servers, database management systems, and web application programs that can generate dynamic HTML pages. Bank customers' account and transaction information is stored in a database, a specialized software that can store and process large amounts of data in high speed. The function of the web server is to interact with online customers and deliver information to users through the Internet. When the web server receives a request such as an account inquiry from an online customer, it requires an external web application program to process the request. C, Visual Basic, VBScript, and Java are some of the languages that can be used to develop web application programs to process customer requests, interact with the database, and generate dynamic responses. Then, the web server will forward the response HTML files to e-banking customers. Several banks, such as NationsBank, also use state-of-the-art imaging systems, allowing customers to view images of checks and invoices over the Internet. The range of e-banking services is likely to increase in the future. Some banks plan to introduce electronic money and electronic checks. Electronic money can be stored in computers or smart cards and consumers can use the electronic money to purchase small value items over the Internet. Electronic checks will look similar to paper checks, but they can be sent from buyers to sellers over the Internet, electronically endorsed by the seller, and forwarded to the seller's bank for electronic collection from the buyer's bank. Further, banks seek to offer their customers more products and services such as insurance, mortgage, financial planning, and brokerage. This will not only deliver more value to the customers but also help banks to grow business and revenues.

What is Internet banking?

Internet banking (Online banking) is a term used for performing transactions, payments etc. over the internet through a bank's secure website. This can be very useful, especially for banking outside bank hours (which tend to be very short) and banking from anywhere where internet access is available. Customers access e-banking services using an intelligent electronic device, such as a personal computer (PC), personal digital assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone, in most cases a web browser such as Internet Explorer or Mozilla Firefox and any normal internet...
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