Online Banking
Internet Banking
Table of Contents
Chapter–1– Introduction 0
Chapter–2– Internet Banking a new medium 7
Chapter--3 - International experience 19
Chapter -4 -The Indian Scenario 33
Chapter- 5- Types of risks associated with Internet banking 41
Chapter- 6- Technology And Security Standards For Internet - Banking 49
Chapter -7 - Legal Issues involved in Internet Banking 74
Chapter- 8- Regulatory and supervisory concerns 84
Chapter–9 - Recommendations 98
Annexure 1 111
Annexure 2 112
Annexure 3 113
Annexure 4 115
Chapter–1– Introduction
1.1 Background
1.1.1 Banks have traditionally been in the forefront of harnessing technology to improve their products, services and efficiency. They have, over a long time, been using electronic and telecommunication networks for delivering a wide range of value added products and services. The delivery channels include direct dial – up connections, private networks, public networks etc and the devices include telephone, Personal Computers including the Automated Teller Machines, etc. With the popularity of PCs, easy access to Internet and World Wide Web (WWW), Internet is increasingly used by banks as a channel for receiving instructions and delivering their products and services to their customers. This form of banking is generally referred to as Internet Banking, although the range of products and services offered by different banks vary widely both in their content and sophistication.
1.1.2 Broadly, the levels of banking services offered through INTERNET can be categorized in to three types: (i) The Basic Level Service is the banks’ websites which disseminate information on different products and services offered to customers and members of public in general. It may receive and reply to customers’ queries through e-mail, (ii) In the next level are Simple Transactional Websites which allow customers to submit their instructions, applications for different services, queries on their account balances,
Table of Contents
Chapter–1– Introduction 0
Chapter–2– Internet Banking a new medium 7
Chapter--3 - International experience 19
Chapter -4 -The Indian Scenario 33
Chapter- 5- Types of risks associated with Internet banking 41
Chapter- 6- Technology And Security Standards For Internet - Banking 49
Chapter -7 - Legal Issues involved in Internet Banking 74
Chapter- 8- Regulatory and supervisory concerns 84
Chapter–9 - Recommendations 98
Annexure 1 111
Annexure 2 112
Annexure 3 113
Annexure 4 115
Chapter–1– Introduction
1.1 Background
1.1.1 Banks have traditionally been in the forefront of harnessing technology to improve their products, services and efficiency. They have, over a long time, been using electronic and telecommunication networks for delivering a wide range of value added products and services. The delivery channels include direct dial – up connections, private networks, public networks etc and the devices include telephone, Personal Computers including the Automated Teller Machines, etc. With the popularity of PCs, easy access to Internet and World Wide Web (WWW), Internet is increasingly used by banks as a channel for receiving instructions and delivering their products and services to their customers. This form of banking is generally referred to as Internet Banking, although the range of products and services offered by different banks vary widely both in their content and sophistication.
1.1.2 Broadly, the levels of banking services offered through INTERNET can be categorized in to three types: (i) The Basic Level Service is the banks’ websites which disseminate information on different products and services offered to customers and members of public in general. It may receive and reply to customers’ queries through e-mail, (ii) In the next level are Simple Transactional Websites which allow customers to submit their instructions, applications for different services, queries on their account balances,
References: 24. The Information Technology Bill, 1999 25. E Banking: Risks And Responses Carol Sergeant Director, Banks & Buildings Societies Financial Services Authority –www.fsa.gov.uk