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Net Banking / Mobile Banking
    Net Banking / Mobile Banking Services in India
Net Banking
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Know more about Mobile Banking | Read Survey on Mobile banking

Electronic Fund Transfer And Clearing System:

The Indian Banking Association has been busy. Having launched the Electronic Fund Transfer (EFT) and the Electronic Clearing System (ECS) among member banks, customers were looking forward to catching up with the time-is-money culture in more ways than way. Here is a look at what gives and the many-a-slip-'tween cup-and-lip even as domestic banks spruce up their act.

Electronic Fund Transfer:

Unlike Swadhan, this is a system that IBA offers that is better-applied and waiting for appreciation. EFT is probably the safest and fastest way to transfer money from your account to another individual in another city regardless of which bank she uses.

All the transferer needs is her account number. A maximum of Rs0.1mn can be transferred for a flat fee of Rs25. The bank has discretionary powers to raise the limit for selected customers. Or a customer can break up the transactions in to multiples of upto Rs0.1mn. The money sent is credited overnight and can be withdrawn by the receiver the day after transfer.

The hitch, it is not well known and secondly, the facility is only available in the four metros! Plus, money sent from abroad cannot be transferred through EFT.Disclosing other advantages of the EFT, an official of the IBA's department of information technology, says, "The facility can be availed of even if the branch from where you are sending the amount is not fully computerized.

The details of the transfer have to be sent to the RBI which in turn notifies the receiving bank to credit the individual with the mentioned amount."Most bank officials agree that publicizing and marketing these facilities should be a priority since many customers are used to old methods of transaction: telegraphic machinery or by the cheques.

Electronic Clearing System :

Never mind the vagaries of the stock market. For those who are and will always make equity investments a way of life the ECS has made the life a lot easier as far as dividend payments go. All a person has to do is provide the company with details about the bank where the deposits should be made. The firm can then directly deposit the dividends into the shareholder's account. The maximum that a company can deposit is Rs0.1mn, though here too, the bank has the discretion to raise that ceiling.

Apart from being a free service, from four metros the facility can now be availed of in 15 cities (those that have regional RBI offices) including Ahmedabad, Pune, Thiruvananthapuram and Nashik. This geographical spread, lacking in the EFT, has led to the increasing popularity of ECS. By one estimate, the volume of transactions has increased this year. Last year, the IBA recorded Rs2.3mn through ECS; this year upto now the transactions have already touched over Rs4mn. What stymies growth is the number of firms that use ECS. At present the facility is available with 65 Indian companies, so check if your investible companies are on this list.

A word of caution. Despite assurances of speed and safety, there have been complaints of delays in transfers to accounts. To ensure that the money has been credited, check account statements at regular intervals.

So it’s not that IBA's intentions are not honorable. If only the infrastructure was in place, real-time banking off-hours would be available to the loyal customers. On par with the rest.

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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, corporates can issue 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, transfering 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.
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