E Banking

E-Banking
Introduction
 E-Banking or Electronic Banking is a major innovation in
the field of Banking.
 Earlier Banking was conducted in a very traditional
manner, there were no such innovations.
 Information revolution led to the evolution of internet ,
which lead to E-Commerce continued by evolution of E-
Banking.
History of E-Banking
 E-Banking History dates back to 1980s.

 The term online became popular in the late '80s and
referred to the use of a terminal, keyboard and TV
(or monitor) to access the banking system using a
phone line
 Stanford federal credit union was the first who offer
online internet banking services to all of its members
in 1994.
 Later on snapped up by other banks like
Well Fargo, Chase Manhattan and Security First Bank.
E-BANKING
 Modern banking is virtual banking.
 Virtual Banking means a customer cannot see the bank but
with the help of technology he can conduct the banking
activities anywhere in the world.
 The major types of virtual banking services includes:
1. Automated Teller Machines (ATMs)
2. Smart Cards
3. Phone banking
4. Home banking
5. Internet banking
E-Banking or Internet banking
Online banking also known as internet
banking, e-banking, or virtual banking, is an
electronic payment system that enables
customers of a bank or other financial
institution to conduct a range of financial
transactions through the financial institution's
website.
Internet banking is a term used to describe
the process whereby a client executes banking
transactions via electronic means. This type of
banking uses the internet as the chief medium
of delivery by which banking activities are
executed. The activities clients are able to
carry out are can be classified to as
transactional and non transactional.
Advantages of E-banking
E-banking in India
In India, since 1997, when the ICICI Bank first offered internet
banking services, today, most new-generation banks offer the
same to their customers. In fact, all major banks provide e-banking
services to their customers.
Popular services under e-banking in India
• ATMs (Automated Teller Machines)
• Telephone Banking
• Electronic Clearing Cards
• Smart Cards
• EFT (Electronic Funds Transfer) System
• ECS (Electronic Clearing Services)
• Mobile Banking
• Internet Banking
• Telebanking
• Door-step Banking
Further, under Internet banking, the following
services are available in India:
Bill payment – Every bank has a tie-up with different
utility companies, service providers, insurance
companies, etc. across the country. The banks use
these tie-ups to offer online payment of bills
(electricity, telephone, mobile phone, etc.). Also,
most banks charge a nominal one-time registration
fee for this service. Further, the customer can create
a standing instruction to pay recurring bills
automatically every month.
Funds transfer – A customer can transfer
funds from his account to another with
the same bank or even a different bank,
anywhere in India. He needs to log in to
his account, specify the payee’s name,
account number, his bank, and branch
along with the transfer amount. The
transfer is effected within a day or so.
Investing – Through electronic banking, a
customer can open a fixed deposit with the
bank online through funds transfer. Further,
if a customer has a demat account and a
linked bank account and trading account, he
can buy or sell shares online too.
Additionally, some banks allow customers
to purchase and redeem mutual fund units
from their online platforms as well.
Shopping – With an e-banking service,

a customer can purchase goods or
services online and also pay for them
using his account. Shopping at his
fingertips.
Real-Time Gross Settlement (RTGS)
The term real-time gross
settlement (RTGS) refers to a
funds transfer system that allows for
the instantaneous transfer of money
and/or securities. RTGS is the
continuous process of settling
payments on an individual order basis
without netting debits with credits
across the books of a central bank.
Once completed, real-time gross
settlement payments are final and
irrevocable. In most countries, the
systems are managed and run by
their central banks.
National Electronic Funds Transfer
(NEFT)
National Electronic Funds Transfer (NEFT) is a payment system
that facilitates one-to-one funds transfer. Using NEFT, people can
electronically transfer money from any bank branch to a person
holding an account with any other bank branch, which is participating
in the payment system. Fund transfers through the NEFT system do
not occur in real-time basis and the fund transfer settles in 23 half-
hourly batches.
Immediate Mobile Payment Services(IMPS )
Immediate Mobile Payment Services(IMPS) is a real-time instant
inter-bank funds transfer system managed by National payment
corporation of India. IMPS is available 24/7 throughout the year
including bank holidays, unlike NEFT and RTGS.
NEFT, RTGS and IMPS payment systems were introduced to offer

convenience and flexibility to the account holders. To use these
online fund transfer services, the remitter must have the basic bank
account details of the beneficiary. The bank account details include
the beneficiary’s name and bank’s IFSC. Though all the three
payment systems are used for funds transfer, they exhibit a few
differences.
https://www.paisabazaar.com/banking/difference-between-neft-
rtgs-imps/
The Society for Worldwide
Interbank
Telecommunication (SWIFT),
Financial
SWIFT
legally S.W.I.F.T. SCRL, provides a
network that enables financial
institutions worldwide to send and • Society for Worldwide Interbank
receive information about financial
Financial Telecommunications
transactions in a secure, standardized
and reliable environment. (SWIFT) is a member-owned
SWIFT also sells software and cooperative that provides safe and
services to financial institutions, much secure financial transactions for
of it for use on the SWIFTNet network, its members.
and ISO 9362 Business Identifier Codes • This payment network allows
(BICs, previously Bank Identifier Codes), individuals and businesses to take
popularly known as "SWIFT codes". electronic or card payments even
if the customer or vendor uses a
different bank than the payee.
• SWIFT works by assigning each
member institution a unique ID
code that identifies not only the
bank name but country, city, and
branch.
Inside a SWIFT Transaction
SWIFT is a messaging network that financial institutions use to securely
transmit information and instructions through a standardized system of
codes.
SWIFT assigns each financial organization a unique code that has either
eight characters or 11 characters. The code is interchangeably called the
bank identifier code (BIC), SWIFT code, SWIFT ID, or ISO 9362 code. To
understand how the code is assigned, let’s look at Italian bank UniCredit
Banca, headquartered in Milan. It has the 8-character SWIFT code
UNCRITMM.
First four characters: the institute code (UNCR for UniCredit Banca)
Next two characters: the country code (IT for the country Italy)
Next two characters: the location/city code (MM for Milan)
Last three characters: optional, but organizations use it to assign codes to
individual branches.
SWIFT does not facilitate funds transfer: rather,
it sends payment orders, which must be settled
by correspondent accounts that the institutions
have with each other. Each financial institution, to
exchange banking transactions, must have a
banking relationship by either being a bank or
affiliating itself with one (or more) so as to enjoy
those particular business features.
Who Uses SWIFT?
In the beginning, SWIFT founders designed the network to
facilitate communication about Treasury and correspondent
transactions only. The robustness of the message format design
allowed huge scalability through which SWIFT gradually expanded
to provide services to the following:
• Banks
• Brokerage Institutes and Trading Houses
• Securities Dealers
• Asset Management Companies
• Clearing Houses
• Depositories
• Exchanges
• Corporate Business Houses
• Treasury Market Participants and Service Providers
• Foreign Exchange and Money Brokers
Services Offered by SWIFT
Applications
SWIFT connections enable access to a variety of applications, which include real-time
instruction matching for treasury and forex transactions, banking market infrastructure
for processing payment instructions between banks, and securities market
infrastructure for processing clearing and settlement instructions for payments,
securities, forex, and derivatives transactions.13
Business Intelligence
SWIFT has recently introduced dashboards and reporting utilities which enable the
clients to get a dynamic, real-time view of monitoring the messages, activity, trade
flow, and reporting.14 The reports enable filtering based on region, country, message
types, and related parameters.
Compliance Services
Aimed at services around financial crime compliance, SWIFT offers reporting and
utilities like Know Your Customer (KYC), Sanctions, and Anti-Money Laundering (AML).
Messaging, Connectivity, and Software Solutions
The core of the SWIFT business resides in providing a secure, reliable, and scalable
network for the smooth movement of messages. Through its various messaging hubs,
software, and network connections, SWIFT offers multiple products and services which
enable its end clients to send and receive transactional messages.

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E-Banking

 E-Banking History dates back to 1980s.

Shopping – With an e-banking service,

NEFT, RTGS and IMPS payment systems were introduced to offer

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