E-Banking Modernization on the technological front by the business sector during the nineties has transformed the manner in which Indian businesses are required to be performed. I.T. has launched novel business models and is more and more contributing a major part in enhancing the e-banking services in India. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues) The description of e-banking differs among the research fraternity since electronic banking pertains to various categories of services. Burr for instance, explains it as an electronic linkage between the bank and its customer so as to organize, deal with and regulate monetary transactions. Electronic banking can even be described as a diversity of the proposals: (a) Internet Banking or online banking (b) Phone Banking (c) T.V-linked banking (d) Mobile Banking and (e) PC Banking or offline banking. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues) The concepts 'Anywhere Banking', 'Tele-Banking', 'Internet Banking', 'Web Banking', e-banking, e-commerce, e-business etc. In the sphere of financial service providers have become the catchphrase in the present era and the financial institutions in India are striving to go along the competition exerted by extending innovative and alluring packaged technology-based services to their clients. (Present level of Computerization)

The present day financial structure demonstrates the customer to be a king and the service providers are hurrying to show regards to the authority. In this queue the financial service providers cannot be the exception. In their search to discriminate their services and gain competitive benefits over their competitors, the financial service providers in India are attempting to provide their services to the customers in the convenience of their homes. In India the Internet is growing to appear as a suitable channel for such service providers. (E-Finance: Quo Vadis) The paper shall endeavor to look at the successes and challenges faced in implementing e-banking services in India and employ recommendations by way of which financial institutions in India could attain a beneficial competitive edge by assuming a policy of presenting its customers e-banking products and services.

Causes and Benefits for Implementing E-Banking in India:

The Financial Reforms which were started in the early 90s and the globalization and liberalization measures infused in a comprehensively new operating environment to the financial industry in India which was till then operating in a highly safeguarded milieu. The emergence of the foreign banks, the institution of several private banks and the measures of deregulation that enhanced competition resulted in circumstances in the country whereby it was clear that if the financial institutions do not join the race it will become problematic for them and would be ousted from the competition. In the absence of the application of the art and technique of the IT as early as possible adopting new business and even continuance of the old one will become increasingly problematic for the financial institutions in India. (Present level of Computerization)

The major impeller in case of any financial institution in India to present services online is to give round-the-clock accessibility and benefits to its customers. (Interesting ... Log on to Bank) Implementing e-banking would be an enhanced brand proposition and improved customer responsiveness. The banks presenting these services in India would be considered as frontrunners in accomplishment of technology. Thus they will benefit from an enhanced brand image. (E-Banking in Estonia: Reasons and Benefits of the Rapid Growth) E-banking leverages technology to let the customer of financial institution and other stakeholders in India to communicate, carry out business with the bank flawlessly by an array of avenues like the Internet, wireless gadgets, ATMs and brick and mortar branches. Net Banking is one part of an exhaustive E-banking facility. The Internet Banking is regarded as the principal method of e-banking in India with the Internet emerging to extend the facility of new delivery mechanism for the financial institutions in accessing the customer. (XIII Payment and Settlement Systems) E-banking has taken on the Internet by storm and the Net is a potent and viable medium for businesses to communicate with and offer facilities to their customers. The figures of online banking facilities in favor of customers keep on multiplying and the Internet presents a great deal of financial services to basically restructure their businesses in India. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues)

In a survey based on the end user undertaken by the IDC among the privileged Net banking users, it has been revealed that the people classified as Socio-Economic Class A1 in topmost five Indian cities log on to access their account through the Internet once every week. (Interesting ... Log on to Bank)...

It is also discovered that Internet connectivity is available in more than 200 cities and towns in India. The McKinsey study of Nasscom in 2002 presented that irrespective of the worldwide economic challenges confronting the IT software and service sector, the outlook for the Indian industry continues to be optimistic. (Present level of Computerization) In the wake of this, the attention is changing from generic banking service to customized banking service services in India. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues)
The e-banking services in India extend innumerable prominent advantages, incorporating increased productivity and quick access to an extensive range of practical information. Additionally, such users can presently interactively modify their applications, reach to the services, and information collection processes to cater to their specific, individual requirements. (Impact of the Information Technology Act 2000: In Banking Sector) The significance of e-banking is not possibly ignored by the financial institutions in absence of entailing the cost of withdrawal from the competition. This is so since the application of information technology generates certain benefits which are not available when the traditional and conventional methods of doing business are used. The application of information technology generates the following advantages to the financial institutions in India. "The convenient management of day-to-day affairs of an organization, quick disposal of routine and daily works, promise of authenticity, integrity and confidentiality in the functioning of the organization, cost economy, integration and communication with the institutions worldwide and organizations, better communication and presentation facilities, assurance of safety and sound security of the sensitive and valuable information, like trade secrets, instant transfer of data and information where the situation demands so, it provides access to public documents which are digitalized by several departments of the Government, for making online payments of several bills and dues, to file statutory documents online and so on." (The Compulsive Mandates of Electronic era)

Financial institutions in India can engender income by means of increased account, access fees and take advantage from promotional scope to cross-sell credit cards and loan products. IT plays a crucial part directly in improving work competence and productivity of transaction, resulting in lowering of costs and enhanced customer satisfaction. (E-Business: www.gailonline.com) Jeevan has marked in the year 2000, that the Internet facilitates the financial institutions in India to give high value-added financial services which is cheap. (E-Banking: An Emerging Perspective of the Regulatory and Taxation Issues) The cost to the Bank for each business dealings carried out through the Internet has been calculated to be roughly one eighth of that performed through banking through the physical branch. (Interesting ... Log on to Bank) Through assuming e-banking, more reassurance and less time consuming- business in India can be carried out round the clock and without needing real communication with the financial institution. Rapid and simultaneous access to information will be possible. Financial institutions in India will have speedier and ready access to information since; they can keep a tab on various accounts with a single click of a button. (XIII Payment and Settlement Systems)

With simple transactions like enquiry facilities, today messages transmitted through the net to banks in India entail tasks like funds transfer and account opening. Internet banking however, necessitates that the financial institutions entail a secure web server and a pivotal data base of their customers to facilitate flow of information from customers to the financial institutions and also vice versa. Some of the financial institutions in India have systems to satisfy such requirements and others are at several stages of implementation. (XIII Payment and Settlement Systems) The several forms of electronic-based payments like credit cards, Automated Teller Machines -- ATMs, Stored Value cards, Shared Payment Network Services -- SPNS etc., are approaching at an incredible speed in the country. (Internet Banking and its challenges in India) All such are available in India and the large scale application of such are relying on the levels of technology at financial institutions and their prepared reception by the components of the financial institutions. Still more facilitating factor in the application of technology is Electronic Data Interchange -- EDI. EDI facilitates transmission of information / data along different communities in the Indian economy. EDI is considered fundamental…