Chapter 13 -E-BANKING

 Chapter  13 -E-BANKING

INTRODUCTION

 

E-banking, also known as electronic banking, refers to the provision of banking services through electronic channels such as the internet, mobile devices, and other digital platforms. E-banking enables customers to conduct financial transactions remotely without physically visiting a bank branch. These transactions include account management, fund transfers, bill payments, and other banking services. The introduction of e-banking has revolutionized the banking industry, providing customers with a more convenient and accessible way to manage their finances.

 

WHAT IS ELECTRONIC BANKING

 

Electronic banking (e-banking) refers to the use of electronic channels and technologies to carry out various banking transactions and activities, including but not limited to, account management, payments, fund transfers, deposits, and loan applications. These electronic channels include the internet, mobile devices, ATMs, and other electronic payment systems. E-banking has transformed the traditional banking system by offering customers the convenience of banking from anywhere and at any time, making transactions faster, more secure, and more efficient.

 

Features currently available in E-Bamking:

 

Some features that are currently available in e-banking include:

 

Account management: Customers can view their account balances, transaction history, and other account details online.

 

Transfers and payments: Customers can transfer funds between accounts, make payments, and pay bills electronically.

 

Mobile banking: Customers can access their accounts and conduct transactions using a mobile device.

 

Remote deposit capture: Customers can deposit checks electronically using their mobile device or a scanner.

 

Card management: Customers can manage their debit or credit cards online, including setting spending limits, reporting lost or stolen cards, and disputing unauthorized transactions.

 

Alerts and notifications: Customers can receive notifications via email, text message, or mobile app for various account activities, such as balance updates and transaction alerts.

 

Personal finance management: Some e-banking platforms provide tools to help customers manage their finances, such as budgeting and expense tracking.

 

Customer support: Customers can access customer support and assistance through various channels, such as chatbots, email, or phone.

 

Services provided by E-banking:

 

Some of the services provided by e-banking are:

 

Account balance inquiry: Customers can check their account balances in real-time through online banking.

 

Funds transfer: Customers can transfer funds between their own accounts or to other accounts within the same bank or to other banks.

 

Bill payment: Customers can pay their bills online, including utility bills, credit card bills, and loan payments.

 

Mobile banking: Customers can perform banking transactions using their mobile phones or tablets.

 

Electronic statements: Customers can receive their bank statements electronically instead of through the mail.

 

Investment services: Customers can access investment services through online banking, such as purchasing stocks, mutual funds, and other investment products.

 

Online loan applications: Customers can apply for loans online, including personal loans, home loans, and car loans.

 

Customer support: E-banking provides 24/7 customer support through online chat, email, or phone.

 

Debit and credit card services: Customers can manage their debit and credit cards through e-banking, including activating and deactivating cards, viewing transaction history, and reporting lost or stolen cards.

 

Foreign exchange services: Customers can perform foreign currency transactions through e-banking, including buying and selling foreign currencies and managing foreign currency accounts.

 

TREADITIONAL V/S E-BANKING PRACTICES:

 

Traditional banking practices refer to the methods of banking that rely on physical branches, paper-based transactions, and face-to-face interactions with bank staff. On the other hand, e-banking practices rely on electronic channels to offer banking services to customers.

 

Here are some differences between traditional banking practices and e-banking practices:

 

Accessibility: Traditional banking practices require customers to visit a physical branch during working hours, while e-banking is accessible 24/7 from anywhere with an internet connection.

 

Convenience: E-banking offers greater convenience as customers can conduct banking transactions without leaving their homes or offices.

 

Speed: E-banking transactions can be completed much faster than traditional banking transactions, as they do not require physical travel or manual processing.

 

Cost: E-banking is generally less expensive than traditional banking, as it eliminates the need for physical branches and associated overhead costs.

 

Security: Traditional banking practices rely on physical documents and signatures for verification, while e-banking relies on digital security measures like encryption and authentication to ensure the security of transactions.

 

Personal touch: Traditional banking practices offer a more personal touch, with customers able to interact with bank staff face-to-face, while e-banking relies on electronic channels and may feel less personal.

 

Specifically, there are following differences  between traditional banking and e-banking:

Availability: Traditional banking requires customers to physically visit a branch during working hours, whereas e-banking services are available 24/7 from anywhere with internet access.

 

Convenience: E-banking allows customers to perform transactions and access account information from their own devices, whereas traditional banking requires customers to visit a branch, wait in lines, and complete paperwork.

 

Speed: E-banking transactions are typically faster than traditional banking transactions, as they can be completed instantly without the need for physical paperwork or manual processing.

 

Cost: Traditional banking may have additional costs such as transaction fees or minimum balance requirements, whereas many e-banking services are often free or have lower fees.

 

Personal Interaction: Traditional banking offers personal interaction with bank staff, whereas e-banking does not have the same level of human interaction.

 

Security: E-banking may have additional security measures in place to protect against fraud and unauthorized access, whereas traditional banking may rely more on physical security measures like locks and alarms.

 

TYPES OF E-BANKING SERVICES:

 

There are several types of e-banking services, including:

 

Online Banking: It enables customers to access their bank accounts, make transactions, and manage their finances through the internet.

 

Mobile Banking: It is similar to online banking but allows customers to access their accounts and perform banking transactions using their mobile devices.

 

Automated Teller Machines (ATMs): ATMs enable customers to withdraw cash, deposit checks, and perform other transactions without visiting a bank branch.

 

Debit and Credit Cards: These cards allow customers to make purchases, withdraw cash, and perform other transactions.

 

Electronic Fund Transfers (EFTs): EFTs enable customers to transfer money between accounts or to other individuals or businesses electronically.

 

Electronic Bill Payment and Presentment (EBPP): EBPP allows customers to pay their bills electronically and receive bills from businesses or individuals online.

 

Virtual Banking: It is a fully online banking service that allows customers to perform all banking transactions without visiting a physical bank branch.

 

Digital Wallets: These are mobile apps that store payment information and allow customers to make purchases online or in stores using their mobile devices.

 

These e-banking services provide customers with convenience, accessibility, and flexibility in managing their finances.

 

Advantages:

 

 Advantages of e-banking include:

 

Convenience: E-banking allows customers to conduct transactions and access banking services anytime and from anywhere, as long as they have an internet connection.

 

Accessibility: E-banking services are accessible 24/7, making it easy for customers to manage their accounts and complete transactions without the need to visit a physical bank branch.

 

Time-saving: E-banking saves time as customers can complete transactions quickly and easily without the need to wait in long queues or spend time traveling to a physical bank branch.

 

Cost-effective: E-banking services are generally less expensive than traditional banking services, as there are lower overhead costs involved in operating an online banking platform.

 

Increased efficiency: E-banking provides faster and more efficient services for customers, with transactions processed in real-time or near real-time.

              

Improved security: E-banking platforms often have robust security measures in place to protect customer data and prevent fraud, providing customers with greater peace of mind when conducting transactions online.

 

Debit card:

 

A debit card is a payment card that allows cardholders to make purchases, withdraw cash, and transfer funds from their bank account. It looks like a credit card and can be used in the same way, but unlike a credit card, a debit card withdraws money directly from the cardholder's account.

 

Debit cards are typically issued by banks or credit unions, and can be linked to a checking or savings account. When the cardholder makes a purchase or withdraws cash, the amount is immediately deducted from their account balance.

 

Debit cards are a convenient way to make transactions without having to carry cash, and they offer several advantages over credit cards. One advantage is that they help cardholders stay within their budget, since they can only spend the amount of money they have in their account. Another advantage is that they don't charge interest, since the cardholder is using their own money rather than borrowing from a lender.

 

However, there are some risks associated with debit cards that cardholders should be aware of. For example, if the card is lost or stolen, the cardholder may be liable for any unauthorized transactions that occur before the card is reported missing. In addition, some merchants may place a hold on the cardholder's account for a larger amount than the actual purchase, which can result in overdraft fees if the account balance is not sufficient to cover the hold.

 

To protect themselves when using a debit card, cardholders should follow some basic security measures. These may include:

 

Keeping the card in a safe place and not sharing the PIN with anyone.

 

Checking account balances regularly to ensure there are no unauthorized transactions.

 

Reporting lost or stolen cards immediately to the issuing bank.

 

Using secure websites and payment processors when making online purchases.

 

Avoiding using the card on unfamiliar or unsecured websites or ATMs.

 

Signing up for fraud alerts and monitoring credit reports regularly.

 

In addition, some card issuers may offer additional security features such as transaction notifications and purchase controls that allow cardholders to set limits on their spending. By following these measures and being vigilant about their account activity, cardholders can help protect themselves from fraud and other risks associated with using a debit card.

 

IMPORTANCE/BENEFITS ADVANTAGES OF E- BANKING

 

 

E-banking, also known as online banking, is a service provided by banks and financial institutions that allows customers to access their accounts, make transactions, and manage their finances through the internet. E-banking has become increasingly popular in recent years, and for good reason. Here are some of the benefits and advantages of e-banking:

 

  E-banking provides customers with the convenience of banking from anywhere at any time. They can check their account balances, pay bills, transfer money, and manage their finances all from the comfort of their home or office.

 

Time-saving: E-banking is a time-saving option as it eliminates the need to travel to a physical bank branch or wait in long queues. Transactions can be completed with just a few clicks, which saves customers valuable time.

 

24/7 Access: E-banking provides customers with 24/7 access to their accounts, which allows them to manage their finances even outside of regular business hours.

 

Lower Fees: Many banks offer lower fees for online transactions, as it saves them the cost of maintaining physical branches and staff.

 

Enhanced Security: E-banking provides enhanced security features such as two-factor authentication and encryption, which makes it difficult for fraudsters to access customer information and carry out fraudulent activities.

 

Increased Control: E-banking gives customers increased control over their finances. They can monitor their account activity and set up alerts for certain transactions, which helps them keep track of their spending and prevent fraudulent activity.

 

Easy to Use: E-banking is user-friendly and easy to use, even for those who are not tech-savvy. Banks provide step-by-step instructions and customer support to help customers navigate the platform.

 

Overall, e-banking provides customers with a convenient, time-saving, and secure way to manage their finances. It has revolutionized the banking industry and has become an essential part of our daily lives.

 

1.Benefits to customers:

 

E-banking or online banking provides numerous benefits to customers, including:

 

Convenience: E-banking allows customers to perform banking activities from anywhere and at any time without physically visiting the bank. Customers can access their accounts, check balances, transfer funds, pay bills, and perform other banking activities through their computer or mobile device.

 

Time-saving: E-banking saves customers time by eliminating the need to visit a bank or stand in long queues for basic transactions. It enables customers to complete transactions quickly and efficiently, thereby saving time.

 

Cost-effective: E-banking can be cost-effective as it reduces the need for banks to maintain a large number of branches and staff. This allows banks to offer lower fees and interest rates on loans and accounts to their customers.

 

24/7 Availability: E-banking services are available 24/7, allowing customers to perform banking transactions at any time of the day or night, including weekends and public holidays.

 

Improved Security: E-banking uses advanced security measures such as two-factor authentication, encryption, and secure servers to protect customers' personal and financial information from fraud and unauthorized access.

 

Access to Information: E-banking provides customers with access to real-time information on their accounts, including balances, transaction history, and statements. This enables customers to monitor their accounts and detect any fraudulent activity.

 

Environmentally Friendly: E-banking eliminates the need for paper-based transactions, reducing paper waste and contributing to environmental conservation.

 

Overall, e-banking provides numerous benefits to customers, making banking more convenient, cost-effective, and secure.

 

2.Benefits to banks:

 

E-banking offers several benefits to banks, including:

 

Cost savings: E-banking reduces the cost of maintaining and operating physical branches, including rent, utilities, and staff. Banks can also save on cash handling costs and paper-based transactions.

 

Increased efficiency: Electronic transactions can be processed much faster than paper-based transactions, which leads to increased efficiency and productivity.

 

Expanded customer base: E-banking allows banks to reach a wider audience, including customers in remote locations who may not have access to physical branches.

 

Improved customer service: E-banking offers customers 24/7 access to their accounts, which can improve customer satisfaction and loyalty.

 

Enhanced security: E-banking offers advanced security features, such as two-factor authentication and encryption, which can protect against fraud and unauthorized access.

 

Competitive advantage: Banks that offer e-banking services have a competitive advantage over those that do not, as customers increasingly expect to be able to access their accounts and conduct transactions online.

 

Overall, e-banking can help banks improve their operational efficiency, reduce costs, and provide better service to their customers, which can ultimately lead to increased profitability and growth.

 

3.Benefits to government:

 

E-banking also provides several benefits to the government. Some of these benefits include:

 

Increased Tax Collection: E-banking allows for easy tracking and monitoring of financial transactions, which can help to reduce tax evasion and increase tax collection for the government.

 

Reduced Cash Handling: The use of e-banking reduces the need for physical cash transactions, which in turn reduces the cost of printing, transportation, and security of physical currency.

 

Improved Efficiency: E-banking reduces the need for manual data entry and processing of financial transactions, which can improve efficiency and reduce errors. This can result in significant cost savings for the government.

 

Increased Financial Inclusion: E-banking can help to increase financial inclusion by providing access to banking services for people who are unable to access physical bank branches.

 

Improved Transparency: E-banking allows for easy tracking and monitoring of financial transactions, which can improve transparency and reduce corruption.

 

Overall, the benefits of e-banking for the government include increased revenue, reduced costs, improved efficiency, increased financial inclusion, and improved transparency.

 

4.Benefits to merchants/ Traders:

 

E-banking also provides several benefits to merchants and traders, including:

 

Increased sales: Merchants can accept online payments, which can help increase sales as customers are more likely to make a purchase when they can pay online. E-banking also allows merchants to expand their customer base as they can sell their products or services to anyone with an internet connection.

 

Faster payment processing: With e-banking, payments can be processed much faster than traditional payment methods like cheques or money orders. This means merchants can receive payments quickly and can therefore improve their cash flow.

 

Lower transaction costs: E-banking often has lower transaction costs than traditional payment methods, such as credit cards. This can help merchants save money on transaction fees and other costs associated with processing payments.

 

Better record-keeping: E-banking provides merchants with electronic records of all their transactions, which can be easily accessed and searched. This can help with accounting and record-keeping tasks and can also provide valuable insights into customer behavior and spending patterns.

 

Improved security: E-banking can provide merchants with enhanced security features, such as encryption and fraud detection tools, which can help protect against fraudulent transactions and other security threats.

 

Overall, e-banking provides several benefits to merchants and traders, including increased sales, faster payment processing, lower transaction costs, better record-keeping, and improved security.

 

LIMITATIONS OF E-BANKING:

 

Despite its benefits, e-banking also has some limitations, which include:

 

Technology Dependence: E-banking is dependent on technology, and any failure or malfunction in the technology can cause significant problems, such as transaction failures or security breaches.

 

Security Risks: E-banking is associated with several security risks such as hacking, phishing, and identity theft, which may cause losses to customers, banks, and merchants.

 

Lack of Personal Interaction: E-banking does not offer face-to-face interaction, which some customers may prefer, especially when it comes to seeking advice or resolving complex issues.

 

Limited Accessibility: E-banking requires internet connectivity and electronic devices, which may not be accessible to everyone, especially in underdeveloped or remote areas.

 

Transaction Limits: Some e-banking platforms may impose transaction limits, which may not be suitable for high-value transactions.

 

Dependency on Third-party Services: E-banking relies on third-party services such as internet service providers and payment gateways, which may cause delays and interruptions in the service.

 

Technical Issues: E-banking platforms may experience technical glitches, such as system crashes, which may cause inconvenience to customers and merchants.

 

Cost: E-banking requires significant investments in technology and infrastructure, which may result in high costs for banks and merchants.

 

Low level of awareness:

 

One of the limitations of e-banking is the low level of awareness among some customers. Some people may not be comfortable with online banking, and may not be familiar with the various features and benefits of e-banking. They may also be concerned about the security of their personal and financial information, and may prefer to do their banking transactions in person.

 

Technical issues: Another limitation of e-banking is the possibility of technical issues. This can include problems with online banking platforms, slow internet connections, and other technical issues that can affect the user experience. These issues can be frustrating for customers and can lead to delays or even loss of funds.

 

Security concerns: E-banking also faces security concerns, which can be a major limitation. Cyber criminals can use various techniques such as phishing, hacking, and identity theft to steal customers’ personal and financial information, which can lead to loss of funds and other serious consequences. Therefore, banks and other financial institutions need to invest heavily in security measures to ensure that their customers’ information is protected.

 

Lack of personal touch: E-banking transactions lack the personal touch of traditional banking, which can be a limitation for some customers. Some people prefer to have face-to-face interactions with their bankers, and may prefer to go to a physical branch to conduct their transactions.

 

Transaction limits: Another limitation of e-banking is the transaction limits that are imposed by banks. Some banks may have limits on the amount of money that can be transferred online, which can be inconvenient for customers who need to transfer large sums of money.

 

Status of E-Banking in india:

 

E-banking or online banking in India has witnessed tremendous growth in recent years, primarily due to the government's push for digital payments and the proliferation of smartphones and the internet.

 

As per the Reserve Bank of India (RBI), the number of transactions processed through digital channels, including online banking, mobile banking, and digital wallets, crossed 7 billion in December 2020, up from 3.5 billion in March 2018. The value of these transactions has also been on a steady rise, reaching Rs. 17.6 trillion in December 2020, up from Rs. 3.3 trillion in March 2018.

 

In addition, several Indian banks have been investing heavily in their online banking infrastructure, offering a range of services such as fund transfers, bill payments, credit card management, and loan applications. Many banks have also introduced chatbots and virtual assistants to enhance customer experience and provide quick and efficient support.

 

However, there are still several challenges that need to be addressed to promote the wider adoption of e-banking in India, such as security concerns, low levels of digital literacy, and inadequate internet infrastructure in certain areas. Nevertheless, the overall outlook for e-banking in India is positive, and it is expected to continue to grow in the coming years.

 

PRESENT STATUSOF E-BANKING IN INDIA:

 

E-banking in India has seen significant growth and development in recent years. The government of India has taken various initiatives to promote e-banking and digital transactions in the country. Some of the recent developments and trends in e-banking in India are:

 

Digital Payments: The growth of digital payments has been a significant trend in recent years. The government's initiatives like demonetization and the promotion of digital transactions have given a significant boost to digital payments in India. Popular digital payment modes like UPI, mobile wallets, and online payments have seen exponential growth.

 

Mobile Banking: With the growth of smartphone penetration in the country, mobile banking has become a popular mode of banking. Most banks in India offer mobile banking services that allow customers to perform transactions like fund transfers, bill payments, and balance inquiries using their mobile phones.

 

Online Banking: Online banking services like internet banking and mobile banking have become very popular in India. Customers can perform various banking transactions like fund transfers, bill payments, and account statements through online banking services.

 

Rural E-banking: The government has initiated various measures to promote e-banking in rural areas. The government's initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY) and digital literacy programs have helped in promoting e-banking in rural areas.

 

Cybersecurity: With the growth of e-banking, the concern for cybersecurity has also increased. Banks in India have become more cautious and have implemented various measures to prevent cyber frauds and protect customer data.

 

Overall, e-banking in India has witnessed significant growth and is expected to continue to grow in the future. With the increasing use of digital transactions and the government's initiatives to promote e-banking, the future of e-banking in India looks promising.

 

FUTURE PROSPECTS OF INTERNET BANKING IN INDIA:

 

The future prospects of internet banking in India are quite promising. With the increasing penetration of smartphones and the internet, more and more people are becoming tech-savvy and willing to adopt digital banking channels. Additionally, the government's push towards digitalization and the ongoing COVID-19 pandemic have accelerated the adoption of e-banking services.

 

Here are some of the potential future prospects of internet banking in India:

 

Increased adoption: As more people become comfortable with using digital banking channels, the adoption of e-banking services is expected to increase significantly. This will lead to a higher volume of transactions being carried out online, which will reduce the load on physical bank branches.

 

New technologies: The use of new technologies such as artificial intelligence, machine learning, and blockchain can significantly enhance the security and efficiency of e-banking services. Banks are already exploring these technologies to provide a better customer experience and reduce operational costs.

 

Expansion of rural banking: With the government's push towards financial inclusion, e-banking services are expected to expand to rural areas in India. This will enable people in remote areas to access banking services without having to travel long distances.

 

Collaboration with fintech startups: Fintech startups are increasingly collaborating with banks to offer innovative e-banking services such as digital wallets, payment gateways, and robo-advisory services. This collaboration is expected to continue in the future, leading to the development of new and improved e-banking services.

 

Personalization: Banks are using customer data to offer personalized e-banking services. This trend is expected to continue, with banks leveraging customer data to provide targeted offers, customized investment advice, and other value-added services.

 

Overall, the future prospects of e-banking in India are bright, with banks and fintech startups constantly innovating and improving their offerings. As the adoption of e-banking services increases, it is expected to become an integral part of the Indian banking system, providing convenience, security, and efficiency to customers.

 

FACTORS FOR A BRIGHT FUTURE

 

There are several factors that contribute to a bright future for internet banking in India. Some of them are:

 

Increasing internet penetration: With the increasing number of internet users in India, the scope of internet banking is growing rapidly. According to a report by the Internet and Mobile Association of India (IAMAI), India had 687.62 million internet users as of 2020, which is expected to reach 974.27 million by 2025. This presents a huge opportunity for internet banking services.

 

Government's push towards digitalization: The Indian government's initiatives towards digitalization, such as the Digital India campaign, Jan Dhan Yojana, and Aadhaar, have led to a significant increase in the adoption of digital banking services. This trend is expected to continue, making it easier for people to access internet banking services.

 

Convenience and ease of use: Internet banking offers convenience and ease of use, which is attracting more and more customers towards it. Customers can access their bank accounts anytime and anywhere, transfer funds, pay bills, and perform other banking transactions with just a few clicks.

 

Security and safety measures: With the advancement of technology, banks are implementing more robust security measures to protect their customers' data and transactions. This has increased customer confidence in internet banking services and is expected to drive adoption in the future.

 

Innovation and customization: Banks are constantly innovating and customizing their internet banking services to cater to the changing needs of customers. This has led to the introduction of new services such as mobile banking, virtual debit cards, and contactless payments, making internet banking more accessible and appealing to customers.

 

Overall, the future prospects of internet banking in India are promising, with the increasing adoption of digital services and the government's push towards digitalization. With the right strategies and investments, internet banking can play a significant role in driving financial inclusion and economic growth in.

 

1. VERY SHORT ANSWER TYPE QUESSTIPONS

 

Q.1. What do you mean by EDI?

Ans. EDI stands for Electronic Data Interchange. It is a system for exchanging business documents and information electronically between organizations in a standard electronic format.

 

Q.2. Where can EDI be used?

Ans: EDI (Electronic Data Interchange) can be used in various industries such as healthcare, retail, manufacturing, logistics, finance, and government agencies for exchanging electronic documents and transactions between trading partners.

 

Q.3.What does FPT stand for?

Ans. FPT stands for File Transfer Protocol, which is a standard network protocol used for transferring files over the internet or other networks.

 

Q.4. What is digi cash?

Ans. DigiCash was a form of electronic payment system and digital currency created in the 1990s by David Chaum. It allowed users to make secure payments and transfer digital cash without the need for a financial institution or central authority. However, the company went bankrupt in 1998 due to lack of adoption and competition from other payment systems.

 

Q.5. What digi cash was started?

Ans. Digi Cash was started in 1989.

 

Q.6. What is the function of client software in e-cash system?

Ans. In an e-cash system, the client software is used by the user to store and manage their digital cash. It enables the user to make electronic payments and transfer funds securely using their digital cash balance. The client software also provides various features like account management, transaction history, and security settings to ensure safe and secure transactions.

 

Q.7. What is e-cash?

Ans. E-cash refers to a form of digital currency that allows electronic transactions to take place. It is a digital form of cash that can be used to make purchases online or to transfer money between individuals or businesses electronically. E-cash is designed to provide a secure and anonymous means of conducting transactions over the internet. It is also known as electronic cash, digital cash, or cyber cash.

 

Q.8. Can e-cash transactions be traced?

Ans. E-cash transactions can be traced, depending on the specific implementation of the e-cash system. Some e-cash systems are designed to provide anonymity to users, while others may include mechanisms for tracking transactions.

 

Q.9. What does ATM stands for?

Ans. ATM stands for Automated Teller Machine.

 

Q.10. What is net cash?

Ans. I'm sorry, but I'm not familiar with the term "net cash". Can you please provide more context or information so that I can assist you better?

 

Q.11. Are all the net cash transition anonymous ?

Ans. No, not all net cash transactions are anonymous. It depends on the specific implementation and configuration of the system. Some net cash systems may provide anonymity for transactions, while others may require some level of identification or authentication.

 

Q.12. What is contained in smart card ?

Ans. A smart card contains a microprocessor chip that stores and processes data securely. It may also have memory for storing data and an operating system for running applications. Smart cards are often used for electronic payments, access control, and other applications that require secure storage and processing of data.

 

Q.13. UP to What limit smart card can be used?

Ans. The limit of the smart card varies depending on the type of card and the issuing bank. Generally, smart cards have a higher limit than traditional magnetic stripe cards, and some can even be used for large transactions such as purchasing a car or a house. However, the exact limit will depend on the specific card and the policies of the issuing bank.

 

Q.13. UP to what  limit smart card can be used?

Ans. The limit of a smart card varies depending on the type of card and its purpose. Some smart cards are designed for a specific purpose, such as public transportation or access control, and have a preloaded value or limit. Others, such as debit and credit cards, can have a much higher limit that is determined by the issuing bank or financial institution.

 

Q.14. What is credit card?

Ans. A credit card is a plastic card that allows the holder to borrow money from the issuer up to a certain credit limit to purchase goods or services. The cardholder must pay back the borrowed amount with interest and any other fees as per the agreement with the issuer.

 

Q.15. what is debit card?

Ans. A debit card is a plastic card issued by a bank to its account holders, which allows them to access their account to withdraw cash, make purchases or pay bills. When a transaction is made using a debit card, the amount is immediately deducted from the account balance.

 

Q.16. What does EFT stands for?

Ans. EFT stands for Electronic Funds Transfer.

 

Q.17. Name the services provided by ATM.

Ans. EFT stands for Electronic Funds Transfer, which is the electronic transfer of money from one bank account to another, either within the same financial institution or between different financial institutions.

 

Q.18. Name the services provided by mobile banking.

Ans. Mobile banking services include but are not limited to:

 

1.Balance inquiry and account management

2.Fund transfers and payments

3.Mobile wallet services

4.ATM and branch location information

5.Check deposit and bill payments

6.Transaction history and alerts

7.Loan and investment management

8.Cardless cash withdrawals

9.Person-to-person payments

10.Mobile recharges and top-ups.

 

2. SHORT ANSAWER TYPE QUESTIONS

 

Q.1. What is the meaning of e-banking?

Ans. E-banking, also known as online banking or internet banking, refers to conducting banking transactions over the internet using a computer or mobile device. E-banking allows customers to perform a variety of financial transactions, such as checking account balances, transferring funds between accounts, paying bills, and applying for loans or credit cards, without having to physically visit a bank branch. It provides convenience, flexibility, and 24/7 accessibility to customers, while also reducing costs for banks. E-banking is an important aspect of the digital revolution in the banking industry.

 

Q.2. What is traditional banking ?

Ans. Traditional banking refers to the traditional way of conducting banking transactions, which primarily involves face-to-face interactions between the customers and the bank staff. This method of banking relies heavily on physical branches, and customers are required to visit the bank in-person to carry out various transactions such as deposits, withdrawals, opening accounts, and applying for loans. Traditional banking also involves the use of paper-based methods for recording and processing transactions. It has been the predominant mode of banking for several decades, but in recent years, with the widespread use of the internet and mobile phones, electronic banking has emerged as a viable alternative to traditional banking.

 

Q.3. Give any two differences between traditional  banking and e-banking ?

Ans. Here are two differences between traditional banking and e-banking:

 

Accessibility: Traditional banking requires customers to physically visit a bank branch during working hours, while e-banking allows customers to access banking services and perform transactions anytime and anywhere through the internet or mobile devices.

 

Human interaction: Traditional banking offers personal interaction with bank staff, while e-banking relies on technology and lacks face-to-face interaction.

 

Q.4. Write  any two advantages of e-banking?

Ans. Two advantages of e-banking are:

 

Convenience: E-banking provides customers with the convenience of accessing their bank accounts and conducting transactions anytime and anywhere through the internet. Customers do not have to physically visit a bank branch or wait in long queues to perform banking tasks.

 

Cost Savings: E-banking allows banks to reduce their operating costs by minimizing the need for physical infrastructure and human resources. This, in turn, can lead to cost savings for the banks, which they can pass on to their customers in the form of lower fees and charges.

 

Q.5. Write any two limitations of e- banking?

Ans. Sure, here are two limitations of e-banking:

 

Security concerns: E-banking involves the use of electronic devices and networks, which are susceptible to cyber-attacks and frauds. This raises concerns over the security of personal and financial information of customers. Despite the use of various security measures, such as encryption and firewalls, there is always a risk of hacking, phishing, and identity theft.

 

Limited access: E-banking services require customers to have access to the internet and digital devices such as computers or smartphones. This can be a limitation for people who do not have access to these resources or are not familiar with using them. This limits the reach of e-banking services, particularly in rural or underdeveloped areas.

 

Q.6. What are the different services provided by e- banking?

Ans. E-banking provides a variety of services to customers, including:

 

Account management: Customers can view account balances, transaction history, and account details online.

 

Funds transfer: Customers can transfer funds between their own accounts, as well as to other accounts within the same bank or to other banks.

 

Bill payment: Customers can pay bills online, including utilities, credit card bills, and loan payments.

 

Online applications: Customers can open new accounts, apply for loans, and perform other banking services online.

 

Investment services: Many e-banking platforms offer investment services such as buying/selling stocks and mutual funds.

 

Mobile banking: Customers can access their accounts and perform banking services through their mobile devices.

 

24/7 availability: E-banking services are available round the clock, allowing customers to perform transactions anytime, anywhere.

 

Electronic statements: E-banking offers customers the option to receive electronic statements, reducing paper waste and providing a convenient way to store financial records.

 

Online customer support: Many e-banking platforms offer online customer support, allowing customers to get assistance quickly and conveniently.

 

ATM services: Customers can use their debit or credit cards to withdraw cash, deposit cheques, and perform other transactions at ATMs.

 

Q.7. Explain demerits of e-banking.

Ans. E-banking, like any other technology, also has some demerits, which are discussed below:

 

Security Risks: One of the major concerns with e-banking is security. As all transactions are performed over the internet, there is a risk of cyber-attacks, such as hacking, phishing, identity theft, and malware attacks. Customers' personal and financial data may be compromised, resulting in significant losses.

 

Technical Issues: E-banking relies heavily on technology, and as such, technical issues may arise from time to time, such as system failure, internet connectivity issues, software bugs, and hardware malfunctions. These issues can result in disruptions to banking services, causing inconvenience to customers.

 

Limited Accessibility: Not all people have access to the internet or mobile phones, making it difficult for them to use e-banking services. This limits the reach of e-banking and hinders financial inclusion, particularly for people living in remote areas.

 

Lack of Personal Interaction: E-banking eliminates the need for face-to-face interaction with bank employees. While this may be seen as a convenience, it can also lead to a lack of personalized service and customer support.

 

Transaction Limits: Most e-banking services have limits on the amount of money that can be transacted in a single transaction or in a day. This can be inconvenient for customers who need to make large transactions, and may force them to use traditional banking methods.

 

Dependency on Technology: E-banking is entirely dependent on technology, and in case of a technology failure, all banking services may come to a standstill, leading to significant losses to both banks and customers.

 

These demerits of e-banking can be addressed through proper security measures, technical support, improved accessibility, and better customer support.

 

Q.8. Briefly explains the process of e-banking.

Ans. E-banking, also known as online banking, is a banking system that allows customers to perform financial transactions over the internet. The process of e-banking typically involves the following steps:

 

Account Creation: To use e-banking services, customers must first create an account with their bank's online banking portal. This usually involves providing personal information and creating login credentials (username and password).

 

Authentication: Once a customer has created an account, they must authenticate their identity to access their account. This may involve entering their login credentials or answering security questions.

 

Account Management: Customers can then perform various account management tasks, such as checking account balances, viewing transaction history, transferring funds between accounts, paying bills, and setting up automatic payments.

 

Security: To ensure the security of financial transactions, e-banking systems use various security measures such as encryption, firewalls, and two-factor authentication.

 

Logging Out: It is important for customers to log out of their e-banking account when they are finished using it to prevent unauthorized access to their account.

 

Overall, e-banking provides customers with a convenient and efficient way to manage their finances. However, it is important for customers to be aware of the risks associated with e-banking and take appropriate measures to protect their accounts from fraud and unauthorized access.

 

3.MEDIUM ANSWER TYPE QUESTINS

 

Q.1. What is the meaning of e-banking? Is their any difference between traditional banking and e-banking?

Ans. E-banking, also known as electronic banking, is a banking service that allows customers to conduct various banking transactions through electronic channels, such as the internet, mobile devices, or automated teller machines (ATMs).

 

Yes, there is a difference between traditional banking and e-banking. Traditional banking is the traditional method of banking where customers physically visit a bank branch to perform transactions. Whereas e-banking enables customers to perform banking activities without having to visit a physical bank branch. E-banking allows customers to conduct transactions through electronic channels such as the internet, mobile devices or ATMs. This has made banking more convenient, efficient and accessible to customers, which is not possible with traditional banking.

 

Q.2. What are the advantages of e-banking?

               OR

What is e-banking ? write about its importance.

 

Ans.E-banking, also known as online banking or internet banking, refers to the electronic delivery of various banking services through a digital platform, such as a computer or mobile device, using the internet. Some of the services provided by e-banking include checking account balances, transferring funds, paying bills, opening new accounts, and applying for loans.

 

The advantages of e-banking include:

 

Convenience: E-banking allows customers to access their banking services anytime and from anywhere, as long as they have an internet connection. This saves them the hassle of physically visiting a bank branch and waiting in long queues.

 

Cost-effective: E-banking reduces the cost of banking operations for banks, which in turn leads to lower fees for customers. Online transactions are cheaper and faster compared to traditional banking methods.

 

Time-saving: With e-banking, customers can carry out their banking transactions quickly, without having to spend time traveling to the bank. This helps them save time and allows them to focus on other important tasks.

 

Increased efficiency: E-banking provides a faster and more efficient way of carrying out banking transactions. Customers can easily transfer funds, pay bills, and manage their accounts online without any delay or errors.

 

Enhanced security: E-banking employs advanced security measures such as two-factor authentication, encryption, and firewalls, to ensure the safety of customer's financial information and transactions.

 

Overall, e-banking is becoming increasingly popular due to its convenience, cost-effectiveness, and efficiency. It has revolutionized the way people bank, making it easier and faster for customers to access and manage their finances.

 

Q.3. What is the present status e-banking in india?

Ans. As of now, e-banking has seen significant growth and adoption in India. The COVID-19 pandemic has accelerated the adoption of digital banking services in the country, as more people are now turning to online banking to carry out their financial transactions. According to a report by the Reserve Bank of India (RBI), the number of digital transactions in India has increased by more than 45% in the last year alone.

 

Many banks in India have also invested in improving their digital infrastructure and offering a wide range of e-banking services to their customers. The government has also introduced various measures to promote digital transactions in the country, such as the Unified Payments Interface (UPI) system, which has gained widespread popularity and usage.

 

However, despite the growth of e-banking in India, there are still challenges that need to be addressed. These include the low level of digital literacy among some sections of the population, security concerns related to online transactions, and the need for better digital infrastructure in some areas of the country.

 

Q.4. What is the future of e-banking in india?

Ans. The future of e-banking in India looks promising due to the increasing adoption of digital technologies and the growing number of internet users. As more people become comfortable with using digital platforms for financial transactions, e-banking is likely to see a significant rise in usage.

 

The Indian government's push towards digitalization and financial inclusion through initiatives like the Digital India campaign and the Pradhan Mantri Jan Dhan Yojana (PMJDY) is also expected to further boost the growth of e-banking in the country.

 

In addition, the emergence of new technologies like blockchain and artificial intelligence is likely to bring about significant advancements in e-banking, making it even more convenient, secure, and efficient.

 

Overall, the future of e-banking in India seems bright, with the potential to revolutionize the country's financial landscape and provide greater access and convenience to individuals and businesses alike.

 

Q.5.what are main limitations of E-Banking?

Ans. There are several limitations of e-banking, including:

 

Limited Access: E-banking requires a computer or smartphone and internet access, which may not be available to everyone. This limits the reach of e-banking services to only those who have access to the required technology.

 

Security concerns: E-banking involves the transmission of sensitive personal and financial information over the internet, which can make customers vulnerable to cyber attacks and fraud. Security breaches and identity theft can have serious financial consequences.

 

Technical glitches: Technical glitches such as server crashes or system downtime can occur, causing inconvenience to customers and affecting their trust in e-banking services.

 

Low level of awareness: Many people may not be aware of the benefits and risks of e-banking, which can make them hesitant to use such services.

 

Lack of personal touch: E-banking lacks the personal touch that traditional banking provides, which some customers may prefer. They may prefer interacting with a human being rather than a computer screen.

 

Q.6. What are the services offered in e-banking? What are the advantages of e- banking ?

Ans. Services offered in e-banking include:

 

Account management: Customers can view account balances, transaction history, and account statements online.

 

Fund transfers: Customers can transfer money between accounts, pay bills, and make online purchases.

 

Deposits and withdrawals: Customers can deposit and withdraw funds using online banking services.

 

Loan and credit card applications: Customers can apply for loans and credit cards online.

 

Investment services: Customers can manage their investments, including buying and selling securities and managing their portfolio.

 

Advantages of e-banking include:

 

Convenience: E-banking services can be accessed from anywhere and at any time, making banking more convenient for customers.

 

Cost-effective: E-banking reduces the cost of transactions, as there is no need for physical branches, staff, and other overheads.

 

Time-saving: E-banking reduces the time required for banking transactions, as customers can perform transactions quickly and easily online.

 

Enhanced security: E-banking uses advanced security measures to protect customer data and prevent fraud.

 

Improved customer service: E-banking services provide 24/7 customer support, making it easier for customers to resolve any issues they may face.

 

4. ESSAY TYPE QUESTIONS

 

Q.1. What is the importance and limitations of e-banking?

Ans. The importance of e-banking lies in its ability to provide convenient, fast, and secure banking services to customers anytime and anywhere. With e-banking, customers can perform various transactions such as account balance inquiry, fund transfer, bill payment, and online shopping, among others. It also enables banks to improve their operational efficiency, reduce costs, and expand their customer base.

 

However, e-banking also has certain limitations. These include the low level of awareness among people about e-banking, security concerns such as phishing and online fraud, technological limitations in rural areas, and the digital divide between the urban and rural population. Additionally, e-banking relies heavily on technology, and any system failures or disruptions can lead to significant disruptions in banking services. Therefore, it is essential for banks to continuously monitor and improve their e-banking infrastructure to overcome these limitations and provide a seamless experience to their customers.

 

Q.2. what is e-banking ? what are the services of e-banking?

Ans. E-banking refers to the electronic banking services that are provided by banks to their customers through the internet. These services are designed to enable customers to perform various banking activities such as account management, fund transfers, bill payments, and online shopping from the comfort of their homes or offices.

 

The services offered in e-banking include:

 

Account management: Customers can view their account balances, transaction history, and account statements.

 

Funds transfer: Customers can transfer funds between their own accounts or to other accounts in the same bank or to other banks.

 

Bill payments: Customers can pay their bills, such as utility bills, credit card bills, and mobile phone bills, online.

 

Online shopping: Customers can use their e-banking account to pay for online purchases.

 

Investment and insurance: Customers can invest in mutual funds, purchase insurance, and apply for loans online.

 

The advantages of e-banking are:

 

Convenience: Customers can access their accounts and perform banking transactions from anywhere and at any time.

 

Time-saving: E-banking saves customers time by eliminating the need to visit a physical branch.

 

Cost-effective: E-banking is generally cheaper than traditional banking as there are no overhead costs associated with maintaining physical branches.

 

Improved security: E-banking uses advanced security measures such as encryption and two-factor authentication to protect customer data and transactions.

 

The limitations of e-banking are:

 

Low level of awareness: Many people, particularly in rural areas, are not aware of e-banking services and how to use them.

 

Internet connectivity issues: Poor internet connectivity can make e-banking difficult or impossible.

 

Security concerns: Cybersecurity threats such as hacking and phishing attacks can compromise customer data and transactions.

 

 

Technical issues: Technical glitches or system failures can cause inconvenience to customers and disrupt banking services.

 

Q.3.E-Banking has more importance than traditional Banking for both bank well as the consumer .why?

Ans. E-banking refers to the electronic banking services that are provided by banks to their customers through the internet. These services are designed to enable customers to perform various banking activities such as account management, fund transfers, bill payments, and online shopping from the comfort of their homes or offices.

 

The services offered in e-banking include:

 

Account management: Customers can view their account balances, transaction history, and account statements.

 

Funds transfer: Customers can transfer funds between their own accounts or to other accounts in the same bank or to other banks.

 

Bill payments: Customers can pay their bills, such as utility bills, credit card bills, and mobile phone bills, online.

 

Online shopping: Customers can use their e-banking account to pay for online purchases.

 

Investment and insurance: Customers can invest in mutual funds, purchase insurance, and apply for loans online.

 

The advantages of e-banking are:

 

Convenience: Customers can access their accounts and perform banking transactions from anywhere and at any time.

 

Time-saving: E-banking saves customers time by eliminating the need to visit a physical branch.

 

Cost-effective: E-banking is generally cheaper than traditional banking as there are no overhead costs associated with maintaining physical branches.

 

Improved security: E-banking uses advanced security measures such as encryption and two-factor authentication to protect customer data and transactions.

 

The limitations of e-banking are:

 

Low level of awareness: Many people, particularly in rural areas, are not aware of e-banking services and how to use them.

 

Internet connectivity issues: Poor internet connectivity can make e-banking difficult or impossible.

 

Security concerns: Cybersecurity threats such as hacking and phishing attacks can compromise customer data and transactions.

 

Technical issues: Technical glitches or system failures can cause inconvenience to customers and disrupt banking services.

 

Q.4. What are the limitations of e-banking? How much success has e-banking achieved?

Ans. The limitations of e-banking include concerns over security and privacy, dependence on technology, lack of personal interaction, and limited access for those without internet access or technical expertise. Additionally, some customers may prefer traditional banking methods or feel uncomfortable with the use of electronic systems for financial transactions.

 

Despite these limitations, e-banking has achieved significant success and growth in recent years. Many customers appreciate the convenience and flexibility of online and mobile banking services, which can save time and offer 24/7 access to account information and transactions. E-banking has also allowed financial institutions to reach a broader customer base and reduce costs associated with physical branches and in-person transactions.

 

Q.5. write about the services of the e- banking .

Ans. E-banking or electronic banking refers to the delivery of banking services through electronic channels such as the internet, mobile devices, and ATM machines. The services provided by e-banking include:

 

Online banking: This allows customers to access their bank account online and perform various transactions such as checking account balance, transferring funds, paying bills, and applying for loans.

 

Mobile banking: This allows customers to access their bank account using their mobile devices such as smartphones and tablets. Customers can perform similar transactions as online banking through a mobile app.

 

ATM services: Customers can use automated teller machines (ATMs) to withdraw cash, deposit cheques, and check account balances.

 

Debit and credit card services: Customers can use debit and credit cards to make payments and purchases.

 

Electronic fund transfer (EFT): This enables customers to transfer funds electronically between accounts, both within the same bank and between different banks.

 

E-wallets: This allows customers to store their credit and debit card information in a digital wallet and use it to make payments online or in stores.

 

The services offered by e-banking provide customers with greater convenience, speed, and accessibility to their banking needs. Customers can perform transactions at any time and from any location, as long as they have an internet connection or a mobile device. E-banking has also made it easier for customers to manage their finances and monitor their account activity

 

Q.6. Write in detail about the status of e-banking in india.

Ans. The status of e-banking in India has been rapidly growing in recent years, particularly with the government's push towards digitization and the increasing availability of internet and mobile technology across the country. Some of the key developments and trends in the Indian e-banking sector include:

 

Increase in digital payments: India has seen a significant increase in digital payments, particularly after the demonetization drive in 2016. With the introduction of various e-payment platforms such as UPI, BHIM, and Paytm, more and more Indians are using digital payments for their daily transactions.

 

Expansion of mobile banking: With the rapid increase in smartphone users in India, mobile banking has become a popular channel for e-banking services. Banks and financial institutions are increasingly offering mobile apps to their customers, allowing them to access banking services on-the-go.

 

Growth of internet banking: Internet banking has been a popular channel for e-banking services in India for several years now. Most banks offer internet banking services to their customers, allowing them to perform a variety of transactions such as checking account balance, transferring funds, paying bills, and more.

 

Emphasis on cybersecurity: As e-banking becomes more widespread, the risk of cyber threats such as hacking and phishing also increases. To address this, the Reserve Bank of India (RBI) has issued guidelines for banks to follow in order to ensure the safety and security of their customers' data.

 

Push towards financial inclusion: The government of India has been working towards increasing financial inclusion in the country, particularly for those in rural areas. E-banking has the potential to help achieve this goal by providing access to banking services to those who may not have had access to them before.

 

Overall, the status of e-banking in India is one of growth and expansion. With increasing digitization and a growing emphasis on financial inclusion, the e-banking sector is expected to continue to thrive in the coming years.

 

Q.7. What is e-banking? What are the importance and limitations of e-banking ?

Ans. E-banking, also known as online banking or internet banking, refers to the electronic payment and financial services provided by banks and financial institutions to their customers through the internet. E-banking allows customers to perform various banking activities online, such as checking account balances, transferring funds, paying bills, applying for loans, and opening new accounts.

The importance of e-banking lies in its convenience and accessibility. Customers can access their bank accounts and perform transactions from anywhere and at any time, without having to visit a physical bank branch. E-banking also offers faster and more efficient services, reducing the need for paper-based transactions and saving time and effort. Additionally, e-banking provides a higher level of security and privacy, as customers can monitor their accounts and transactions in real-time and can set up alerts for any suspicious activity.

However, e-banking also has its limitations. The reliance on technology and the internet can lead to system failures or cyber attacks, potentially compromising the security and privacy of customers' information and transactions. Additionally, not all customers may have access to reliable internet or may lack the technical skills required to use e-banking services effectively.

Overall, the benefits of e-banking outweigh its limitations, and the growth of e-banking in India and around the world is evidence of its success. However, it is important for banks and financial institutions to continually improve their e-banking services and security measures to ensure the safety and satisfaction of their customers.

 

MCQ

1. E-Banking provides banking services :

(a) During the normal banking hours

(b) 24 hours 7 days a week

(c) Both of the above

(d) None of these.

E-Banking provides banking services 24 hours a day, 7 days a week, allowing customers to access their accounts and perform transactions at any time and from any location with internet access.

 

2. E-Banking makes use of :

(a) ATMs (b) POS

(c) Telephone Banking (d) All of these.

E-Banking makes use of the Internet, online platforms, and various digital devices such as computers, laptops, and mobile phones to provide banking services such as account management, transactions, and other financial services.

 

3. E-Banking is :-

(a) Based on cash (b) Cash and cheque both

(c) Cash less (d) None of these.

E-Banking is a type of banking where transactions are done through electronic means such as the internet, mobile phones, and other digital devices. This type of banking allows customers to access banking services and perform transactions such as account management, money transfer, and bill payments without the need for physical cash.a

 

4. ATMs enable the user for :

(a) Balance Enquiry (b) Mini statement of Accounts

(c) Withdrawls (d) All of these.

ATMs enable the user for various banking services such as cash withdrawal, balance inquiry, PIN change and other financial transactions.

 

5. Tele banking is a banking service provided during :

(a) The normal working hours (b) 24 × 7 days

(c) Only on holidays (d) None of these

Telebanking refers to the provision of banking services over the phone through an automated system or through customer service representatives. These services are typically available 24/7, and not just during normal working hours.

 

6. While using credit card, the customer is using "

(a) Own money

(b) Employer’s money

(c) Money of the institution which has issued the credit card

(d) all of the above

When a customer uses a credit card, they are borrowing money from the institution that issued the credit card, and are required to pay it back with interest. The institution may also set a credit limit, which is the maximum amount the customer can borrow.

 

7. Credit cards are issued to the persons who are :

(a) Govt. employees

(b) Businessmen

(c) Persons with high credit ranking

(d) None of these

This is generally true, as credit card issuers typically evaluate the creditworthiness of potential cardholders before issuing a card. Factors such as income, credit history, and outstanding debt are considered when determining a person's credit ranking.

 

8. Electronic clearing services include :

(a) Only debit clearing

(b) Only credit clearing

(c) Both debit and credit clearing

(d) None of these

Electronic clearing services include both debit and credit clearing, where electronic debits are used to withdraw funds from a customer's account and electronic credits are used to deposit funds into a customer's account. This allows for more efficient and secure financial transactions.

 

9. Debit card is also called :

(a) ATM card (b) Check card

(c) Both of these (d) None of these

ATM card and Check card.

 

10. A debit card can be used at :

(a) ATM (b) Restaurant

(c) Shopping Mall (d) All of these.

A debit card can be used at ATMs, point of sale terminals, and online or over the phone transactions. It can also be used for cash withdrawals, balance enquiries, and other banking transactions.

 

11. ATM stands for :

(a) Automated Teller Machine (b) Automated Totaller machine

(c) Automated Token Machine (d) All of these.

ATM stands for Automated Teller Machine. It is an electronic banking outlet that allows customers to perform a variety of financial transactions such as cash withdrawals, deposits, and balance enquiries. ATMs are typically available 24/7 and are located both on and off bank premises.

 

12. Which of the following is not true for EDI :

(a) It requires paper based documents

(b) It is faster than any other communication media

(c) It does not require re-entering the data

(d) None of these.

EDI (Electronic Data Interchange) is a technology that enables the electronic exchange of business documents, such as purchase orders, invoices, and shipping notices, between different organizations. It does not require paper-based documents, making it a faster, more efficient, and cost-effective way of doing business. The statement "It requires paper based documents" is not true for EDI.

 

Q.1. What is electronic banking (e-banking)?

A. Conducting financial transactions remotely through physical bank branches.

B. The use of electronic channels and technologies to carry out various banking transactions.

C. The provision of banking services through paper-based platforms.

D. The traditional way of banking before the introduction of technology.

 

Q.2. What are some of the features currently available in e-banking?

A. Account management, transfers and payments, and mobile banking.

B. Account management, branch visits, and loan applications.

C. ATM withdrawals, cash deposits, and bill payments.

D. None of the above.

 

Q.3. Which of the following services is NOT provided by e-banking?

a) Investment services

b) Bill payment

c) Phone banking

d) Debit and credit card services

 

Q.4. What is the difference between traditional banking and e-banking with respect to accessibility?

a) Traditional banking is accessible 24/7 from anywhere with an internet connection.

b) E-banking requires customers to visit a physical branch during working hours.

c) Traditional banking is accessible from anywhere with an internet connection.

d) E-banking is only accessible during working hours.

 

Q.5.What is the advantage of using e-banking over traditional banking in terms of speed?

a) E-banking transactions can be completed much faster than traditional banking transactions.

b) Traditional banking transactions can be completed much faster than e-banking transactions.

c) Both e-banking and traditional banking transactions have the same speed.

d) E-banking transactions take longer than traditional banking transactions.

 

Q.6. What is the difference between traditional banking and e-banking in terms of personal interaction?

a) E-banking offers a more personal touch than traditional banking.

b) Both traditional banking and e-banking offer the same level of personal interaction.

c) Traditional banking offers a more personal touch than e-banking.

d) E-banking does not offer any personal interaction.

 

Q.7. Which e-banking service allows customers to make purchases using their mobile devices?

a) Online banking

b) Virtual banking

c) Digital wallets

d) Electronic fund transfers

 

Q.8. Which of the following is an advantage of e-banking?

a) It increases the overhead costs involved in banking operations.

b) It does not provide faster and more efficient services for customers.

c) It allows customers to access banking services anytime and from anywhere.

d) It is more expensive than traditional banking services.

 

Q.9. How is a debit card different from a credit card?

a) Debit cards charge interest on the amount spent.

b) Debit cards do not withdraw money directly from the cardholder's account.

c) Debit cards can only be used to make purchases, not to withdraw cash.

d) Debit cards withdraw money directly from the cardholder's account.

 

Q.10. Which of the following is an advantage of using a debit card?

a) It helps cardholders stay within their budget.

b) It charges interest on the amount spent.

c) It allows cardholders to borrow money from a lender.

d) It withdraws money directly from the card issuer's account.

 

Q.11. What is e-banking?

a) A service provided by restaurants

b) A service provided by banks and financial institutions

c) A service provided by hospitals

d) A service provided by schools

 

Q.12.What are the benefits of e-banking for customers?

a) Convenience, time-saving, and improved security

b) Better health, more time, and enhanced privacy

c) Better transportation, more free time, and lower fees

d) None of the above

 

Q.13. What is the advantage of e-banking for banks?

a) Increased cost of operation

b) Reduced cost of operation

c) Increased need for physical branches

d) None of the above

 

Q.14. What benefit of e-banking does the government gain from easy tracking and monitoring of financial transactions?

a) Increased tax collection

b) Reduced cash handling

c) Improved efficiency

d) Increased financial inclusion

 

Q.15. Which of the following is a benefit that e-banking provides to merchants and traders?

a) Increased tax collection

b) Reduced cash handling

c) Increased financial inclusion

d) Faster payment processing

 

Q.16. Which of the following is a limitation of e-banking?

a) Increased tax collection

b) Reduced cash handling

c) Dependence on third-party services

d) Improved transparency

 

Q.17. What is a limitation of e-banking due to the possibility of technical issues?

a) Limited accessibility

b) Low level of awareness

c) Dependency on third-party services

d) Transaction limits

 

Q.18. What is a security concern associated with e-banking?

a) Increased tax collection

b) Reduced cash handling

c) Lack of personal interaction

d) Cybersecurity risks

 

Q.19. What is a limitation of e-banking due to the lack of personal touch?

a) Technology dependence

b) Limited accessibility

c) Transaction limits

d) Lack of personal interaction

 

Q.20. What is a limitation of e-banking due to transaction limits?

a) Dependence on third-party services

b) Technical issues

c) Low level of awareness

d) Limits on the amount of money that can be transferred online

 

Q.21. What is a benefit that e-banking provides to merchants and traders related to record-keeping?

a) Increased sales

b) Faster payment processing

c) Better record-keeping

d) Improved security

 

Q.22.Which of the following is a benefit that e-banking provides to the government?

a) Increased sales

b) Reduced cash handling

c) Improved security

d) Increased financial inclusion

 

Q.23. What is a limitation of e-banking due to the lack of personal touch?

a) Technology dependence

b) Limited accessibility

c) Transaction limits

d) Lack of personal interaction

 

Q.24. According to the Reserve Bank of India (RBI), the number of transactions processed through digital channels crossed ___________ in December 2020.

a) 3.5 billion

b) 7 billion

c) 17.6 trillion

d) 3.3 trillion

 

Q.25. What are some challenges that need to be addressed to promote the wider adoption of e-banking in India?

a) Security concerns

b) High levels of digital literacy

c) Adequate internet infrastructure in certain areas

d) All of the above

 

Q.26. What is the most popular mode of banking in India?

a) Online banking

b) Mobile banking

c) Rural e-banking

d) None of the above

 

True or False

1. ATMs are installed on or off the bank's premises. True

mobile banking is a growing trend in the banking industry, where customers can access a variety of banking services such as account balance inquiry, fund transfer, and bill payments through their mobile phone. This allows customers to perform transactions and manage their finances on-the-go.

 

2. Various banking services are also provided on the mobile phone. True

mobile banking is a growing trend in the banking industry, where customers can access a variety of banking services such as account balance inquiry, fund transfer, and bill payments through their mobile phone. This allows customers to perform transactions and manage their finances on-the-go.

 

3. Traditional banking covers large area as compare to E-banking. False

E-banking, also known as online banking, allows for global coverage as it allows customers to access their bank accounts and perform transactions from anywhere with internet access. Traditional banking, on the other hand, is limited to the physical locations of bank branches.

 

4. E-banking provides global coverage. True

e-banking allows customers to access their bank accounts and perform transactions from anywhere in the world as long as they have internet access. This allows for greater convenience and flexibility for customers who may be traveling or living in different locations.

 

5. E-banking increases the risk of carrying heavy cash.  False

E-banking reduces the risk of carrying heavy cash as transactions are done electronically and there is no need to physically carry cash

 

1. E-banking refers to the provision of banking services through electronic channels such as the internet, mobile devices, and other digital platforms. (True/False)

 

2. E-banking has not changed the traditional banking system in any way. (True/False)

 

3. Customers cannot manage their debit or credit cards online using e-banking platforms. (True/False)

 

4. E-banking platforms do not offer any tools to help customers manage their finances. (True/False)

 

5. Customers cannot receive notifications for various account activities using e-banking platforms. (True/False)

 

6. Traditional banking practices are entirely paper-based and do not involve any digital channels. (False)

 

7. E-banking is generally less expensive than traditional banking because it eliminates the need for physical branches. (True)

 

8. Electronic statements are not available through e-banking. (False)

 

9. Automated Teller Machines (ATMs) enable customers to perform transactions only during working hours. (False)

 

10. Electronic Fund Transfers (EFTs) enable customers to transfer money between accounts or to other individuals or businesses electronically. (True)

 

11. E-banking is accessible only during banking hours. False

 

12. Debit cards can be linked to a savings account. True

 

13. If a debit card is lost or stolen, the cardholder is not liable for any unauthorized transactions that occur before the card is reported missing.  False

 

14. Cardholders can protect themselves from fraud by following basic security measures when using a debit card. True

 

15. Debit cards charge interest on the amount spent.  False

 

16. E-banking provides customers with the convenience of banking from anywhere at any time. (True/False)

 

17. E-banking does not save customers valuable time. (True/False)

 

18. E-banking does not provide enhanced security features such as two-factor authentication and encryption. (True/False)

 

19. E-banking can be cost-effective as it reduces the need for banks to maintain a large number of branches and staff. (True/False)

 

20. E-banking does not allow banks to reach a wider audience. (True/False)

 

21. E-banking helps reduce tax evasion and increase tax collection for the government. True/False

 

22. E-banking reduces the cost of printing, transportation, and security of physical currency. True/False

 

23. E-banking requires significant investments in technology and infrastructure, which may result in high costs for banks and merchants. True/False

 

24. E-banking may not be accessible to everyone, especially in underdeveloped or remote areas. True/False

 

25. E-banking provides merchants with electronic records of all their transactions, which can be easily accessed and searched. True/False

 

26. The growth of digital payments has been a significant trend in recent years. - True/False

 

27. Cybersecurity is not a concern for e-banking in India. - True/False

 

28. The future prospects of e-banking in India are not promising. - True/False

 

     A. One Word or one line questions

Q. 1. Define Electronic Banking.

Ans. E-Banking means use of electronic technology to various banking transactions/

operations such as cash receipts, payments and transfer of funds etc.

Electronic banking, also known as online banking or internet banking, refers to the use of electronic means, such as computers, mobile devices, and the internet, to perform banking transactions. This includes activities such as account management, bill payment, money transfers, and more. Electronic banking allows customers to access their bank accounts and perform financial transactions from virtually anywhere, at any time, and with greater convenience and efficiency than traditional banking methods.

Q. 2. Expand term EDI.

Ans. Electronic Data Interchange.

Electronic Data Interchange (EDI) is the electronic exchange of business documents between organizations. It is commonly used to transfer purchase orders, invoices, and other business-critical documents in a standardized format, typically using a specific EDI standard such as ANSI X12 or EDIFACT. EDI allows organizations to automate their business processes and reduce the need for paper-based transactions.

Q. 3. What does ATM stands for ?

Ans. Automatic Teller Machine.

ATM stands for Automated Teller Machine.

Q. 4. Why is ATM called Any time Money ?

Ans. ATM is called Any time money because we can withdraw money any time 24 × 7 × 30.

ATM is called Any time Money because it allows customers to access their bank account and withdraw cash at any time, 24 hours a day, 7 days a week. It allows for convenient banking transactions without the need to visit a bank branch during normal business hours.

Q. 5. What is Credit Card ?

Ans. Credit card is an online method of payment. Basically it is a plastic card issued by the

Banks. it is issued on the basis of creditability of the card holders. The cutomers can make

payment from credit card.

A credit card is a payment card that allows the cardholder to borrow funds from the card issuer, typically a bank, up to a certain limit. The cardholder can then use the credit card to make purchases, withdraw cash, or transfer balances, and the card issuer will bill the cardholder for the amounts borrowed plus any interest and fees. Credit cards are widely used for both personal and business expenses and are a popular form of revolving credit.

Q. 6. What is Electronic Credit Clearing ?

Ans. Electronic Credit clearing means preparing credit instructions on a magnetic media and

submit the same.

Electronic Credit Clearing refers to the process of clearing and settling credit transactions electronically, typically through the use of electronic funds transfer (EFT) systems. This can include the use of credit cards, debit cards, and other forms of digital payment. The goal of electronic credit clearing is to make transactions faster, more efficient, and more secure, while also reducing the need for paper-based transactions and manual processes.

Q. 7. What is Debit Card ?

Ans. This card work as a cash. This is used to make instant payment. This allow you to

access money in savings account.

A Debit Card is a payment card that deducts money directly from a consumer's checking account to pay for a purchase. Unlike a credit card, which allows the cardholder to borrow funds, a debit card requires the cardholder to have sufficient funds in their account to make the purchase. Debit cards are linked to the cardholder's checking account and are often used for point-of-sale transactions, online shopping, and cash withdrawals from ATMs. They are also known as ATM cards or check cards.

Q. 8. What is meant by Electronic Debit clearing ?

Ans. Electronic debit clearing covers the payment to utility companies.

Electronic Debit Clearing refers to the electronic processing of debit transactions, where the funds are transferred directly from the customer's bank account to the merchant's bank account. This is done through the use of debit cards, which are linked to the customer's bank account, and the use of electronic point of sale terminals, which process the transactions. This method of payment is also known as Electronic Funds Transfer (EFT) or Direct Debit. It is a quick, secure and convenient way of making payments for goods and services, and is commonly used for recurring payments such as utility bills, subscriptions, and other regular payments.

Q. 9. Which out of traditional Banking or E-Banking provides greater security ?

Ans. E-Banking provides greater security.

It is difficult to say which one provides greater security as it depends on the specific system and security measures in place for each. Traditional banking typically has established security protocols and physical security measures, while e-banking also has digital security measures such as encryption and firewalls. Both have their own strengths and weaknesses interms of security, and it is important for individuals and organizations to assess their own needs and choose the option that best suits their level of risk tolerance.

Q. 10. What is meant by global coverage ?

Ans. Global coverage means you can access the globe—any transaction — any time — any

organisation sitting on your PC.

Global coverage refers to the ability to reach and provide services to customers or clients in different countries or regions around the world. This can be achieved through the use of technology such as the internet, which allows businesses to expand their reach beyond their physical location and offer products or services to customers in other parts of the world.

Q. 11. What is Digi Cash ?

Ans. Digi cash is another electronic payment system based on digital tokens or digital coins.

Digital Cash, also known as DigiCash, is a type of electronic cash or digital currency that was developed in the early 1990s. It allows for secure, anonymous transactions over the internet, using a combination of encryption and digital signature technology. DigiCash used a system of digital tokens, which could be exchanged between users like physical cash, but with the added security and convenience of being able to be transferred electronically. The company behind DigiCash, however, struggled to gain traction and eventually filed for bankruptcy in 1998.

Q. 12. What is E-Cash ?

Ans. E-Cash is an on-line system of payment.

E-Cash, also known as electronic cash, is a digital form of currency that can be used for online transactions. It is stored on a computer or mobile device and can be used to make payments or transfer funds electronically, similar to physical cash. E-Cash is typically issued and managed by banks or financial institutions and can be used to make purchases on websites, in mobile apps, or in-store through digital wallets or other electronic payment methods.

B. Fill in the blanks

1. Banking on net is known as E-Banking.

E-Banking, also known as online banking or internet banking, refers to the use of electronic technology, such as computers and the internet, to conduct financial transactions and manage banking services. This includes activities such as making deposits and withdrawals, transferring funds, paying bills, and checking account balances. E-Banking allows customers to access their bank accounts and perform transactions from any location with internet access, making it convenient and efficient.

2. ATM include Cash Withdrawl, PIN change and Balance enquiry etc.

ATM stands for Automated Teller Machine and it typically allows for cash withdrawals, PIN changes, balance enquiries, and other banking transactions.

3. Digi Cash was started in October1994

Digi Cash was a pioneering digital currency system developed in the 1990s that aimed to provide an alternative to physical cash and credit cards. It was started in October 1994 and was one of the first electronic cash systems to be introduced. However, it ultimately failed to gain widespread acceptance and was eventually shut down.

4. A Credit Card is a promise to pay later.

A Credit Card is a payment card that allows the cardholder to borrow money up to a certain limit to make purchases or withdraw cash. The cardholder is then required to pay back the borrowed amount, usually with interest, at a later date. It is essentially a promise to pay later.

5. Internet Banking allow you to on-line bill payments.

Internet banking typically allows customers to pay bills online, often through a third-party bill payment service, which can include recurring bills such as utility payments, credit card payments, and other types of bills. This can be done through a computer or mobile device and can save time and effort compared to traditional methods of paying bills, such as mailing a check or visiting a physical location to make a payment.