Net Banking

If you are tired to stand in a long queue waiting for a passbook to be updated or wait for the next day for a demand draft to be prepared, take heart. Internet technology has invaded the portals of our banking institutions and as the cliché goes everything will just be a click away. No doubt, innovations like telebanking and automated teller machines (ATMs) have considerably put customers at ease in the recent past. But with net banking the customer will be able to transact with the help of a mouse and his visits to the neighborhood bank will become a thing of the past.

Though a modest start has been made in India, net banking has still a long way to go. This development has been acknowledged by the latest Online Banking Report, which features a listing for ICICI Bank. Some others like Citibank, HDFC Bank and Global Trust Bank also have also endeavored to make real time banking a reality before this century closes.

In this article we attempt to enlist the various services offered over the net by the different banks. An average customer will be interested to know whether firstly, net banking offers him/her a wide range of services, secondly, show a history of transactions made, thirdly, transfer funds between accounts and most importantly whether the services offered are well secured.

We have listed below the broad range of services offered by HDFC Bank via its net banking network. These, with a few exceptions, will also be representative of what others like ICICI Bank have on offer.

Net banking makes it easy to transfer one’s money from one branch in a particular city to any other branch in an another city.

One can open a FD account via the net. One needs to provide data regarding the amount and term of the deposit and also the branch in which the account is to be opened.

One can order for an issue of a demand draft or a banker’s cheque. However, the draft can be delivered only to the customer’s address and not to any other third party.

One can inquire on the balance in one’s savings, current and FD account and also on the tax deducted at source on one’s FD account for the current and previous financial year.

One can give instructions over the net for stopping payment on a cheque/s.

You can request for a cheque book via the internet, which will take three days to come.

One can view all the transactions completed on an account for a specified period and get a copy via e-mail.

As can be seen there is not much on offer in terms of transactional business except being able to order for cheque books and statements, transfer funds between accounts of the same person and open a fixed deposit account. In contrast, ICICI Bank with its net banking service called ‘Infinity’ goes a step forward by allowing the account holder to transfer funds into another person’s account within the bank. Also one can intimate about the loss of an ATM Card over the net when using Infinity. Moreover, corporate can issue of letters of credit and make enquiry’s regarding bills sent for collection via this service. A special feature on Infinity is the facility for nicknaming all accounts to avoid remembering lengthy account numbers. In terms of safety, HDFC Bank allows one to have three login attempts after which a new password is given while ICICI Bank will disable the password after five login attempts.

Considering the fact that these services are offered without charging a fee, the effort is commendable. Both HDFC and ICICI have free demonstrations on their respective websites which are self-explanatory and can guide a first time user on how to use the facility.

There are others who also have the facility like Global Trust Bank, which is the latest entrant in the bandwagon. Others like ABN Amro and Times Bank are also set to hit the net by next year.

There is no doubt that potential for net banking in India is immense considering the rising penetration levels of the World Wide Web in Indian homes and offices. When one takes a look at what is available worldwide, one sees that net banking is more of a norm rather than an exception in many developed countries. The services offered enables one to check credit card transactions, paying bills, transferring funds between accounts in two different banks and scheduling future payments and transfers. The gradual increase in net banking is logical as the need to minimize costs catches attention. A North American Internet Banking Survey done by management consultancy Booz Allen & Hamilton in 1996 revealed that the cheapest way of banking is Internet banking. The survey estimated that a brick and mortar network of a bank would cost US$1.07 per transaction while it is only US$0.01 for internet banking. The same survey said that by 2000, 16 million US households would be banking through the net.

In India, however, there may arise problems with nationalized banks, which have in the past opposed computerization. However, the fact remains that given a choice, customers would like to bank via the net and the next decade could well see virtual banking becoming a reality.