CHALLENGES FACED BY E-BANKING IN INDIA

INTRODUCTION 

E-banking, also knows as online banking, virtual banking, or internet banking it is a system that enables the banking transactions like transfer of funds, payment of loans, deposits, withdrawal of cash virtually, and EMIs, with the help of the internet. E-banking is added to the lifeline of an economy. Today, e-banking in the midst of an IT (Information Technology) revolution.

Finland was the first country, taking a lead on E-banking. In India, it was ICICI bank that initiated E-banking as early as 1997 under the brand name identity. E-banking defined as the use of computers and telecommunications to enable banking transactions to be done by telephone or computer rather than through human interaction. For delivering various banking products and services, simply use telecommunication and internet banking. The services covered under E-banking are: -

• Credit cards
• Debit cards
• ATM (Automated Teller Machine)
• Smart cards
• Electronic Funds Transfer (EFT) System
• Mobile Banking
• Telephone Banking
• Electronic Clearing Services

It is a generic term for the delivery of banking services and products through electronic channels such as mobile, internet, etc. The concept of electronic banking is still evolving. It facilitates an effective and efficient payment and accounting system, enhancing the speed of delivery of banking services considerably. Several initiatives were taken by the Reserve Bank of India (RBI) as well as the government of India, which has facilitated the development of E-banking in India. IT Act 2000 enacted by the government of India, provides legal recognition to electronic transactions and other means of electronic commerce. RBI issued guidelines on risks and control in computer and telecommunication systems to all banks. The existing regulatory framework over banks, also been extended to E-banking. It covers issues related to the framework technology, security standards, and legal and regulatory issues.

Electronic banking offers facilities like:

• E-banking is a service that is available to everyone who is a bank account holder.
• Provides flexible services like 24*7.
• Enable customers to withdraw cash through debit cards and payment of bills.
• The greatest advantage, it saves our time. It not very time-consuming.
• Quality customer service with personal attention.

It also posed several challenges faced by electronic banking systems. India is the outsourcing hotspot of the world regarding IT and tech services, it is very surprising that internet banking has not taken off like the way it should. As the major objective of our study is to focus on the challenges that e-banking is facing in India at present:

• Difficulties faced in the implementation of global technology: in developing countries, many consumers either do not trust or do not access to the necessary infrastructure to be able to process e-payments.
• Confidentiality, authentication, and integrity: three are very important features of banking. Before e-banking, these facilities successfully managed but now through e-banking, it is an insecure channel.
• Customer satisfaction: in today’s competitive world, the satisfaction of a customer is a major challenge for the banking sector as customers have various alternative choices in various types of services provided by banks.
• Competition: in the banking sector competition brings various challenges before the banks such as product positioning, innovative ideas, and channels, new market trends, cross-selling, and managerial and organizational part this system needed to be managed, assets, and contain risks.
• Security risks: most Indians are not using internet banking facilities because of security concerns.
• Privacy Risk: the risk of disclosing private details and fear of identity theft is one of the major factors that inhibit consumers while opting for e-banking.
• Trust factors: there is a perception that online transactions are risky because the internet is also a platform where fraud occurs.
• Customer awareness: awareness about internet banking, facilities, and procedure all this awareness should be spread among customers. Less awareness of new technologies and their benefits is among one of the most ranked barriers in the development of e-banking.

Despite all this. There are plenty of issues, which influence customers to adopt internet banking. These issues must be of prime concern to the banks providing internet banking facilities and banks should make efforts to expunge these issues. Financial reforms had their own impact on Indian banks and financial institutions.

PROSPECTS OF E-BANKING

Despite all the problems. The following opportunities are motivating the marketers for implementing E-banking are:

• Untapped Rural Markets: contributing to 70% of the total population of India largely untapped market for the banking sector. Majority of Indian still lives in rural areas and reaching bank through the internet is easy to reach.
• Multiple Choices: banks can offer so many channels to access their banking and other services such as ATM, Local Branches, Telephone/mobile, video banking, etc. to increase the banking business.
• Internet Banking: anytime anywhere banking will become common and will have to upscale, this includes separate internet banking services apart from traditional banking services. It provides facilities like share trading, insurance, loans, based on data warehousing and data mining technologies.
• Increasing Internet Users and Computer Literacy: the rapid growth of the internet users in India can be a very big opportunity and the banking sector should cash this opportunity to attract more internet users.
• Initiatives are taken by the government agencies for financial literacy play an important role in financial inclusion and inclusive growth. There is a significant impact on financial literacy on the use of internet banking if customers are not aware of facilities related to internet banking and not educated regarding e-banking. They try to avoid internet banking and stick to the traditional way of banking. Various government institutions like RBI, SEBI, IRDA, and various market players have taken a number of initiatives on financial education.

CONCLUSION

In the past few years, many changes have been noticed in the Indian Banking System. The banking sector has transformed completely. The bank is facing many challenges but the banking sector trying to overcome those challenges faced them. And trying to give a positive outcome to the customers. Many financial innovations like ATMs, credit card, debit card, RTGS, change the face of Indian Banking. Awareness among customers as well as the employees of the banks regarding computer literacy needs to be improvised. This paper analyzes and presents the sketch of E-banking in India.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.