Open Access Research Article
THE IMPCT OF E-BANKING ON USE OF BANKING SERVICES AND CUSTOMERS SATISFACTION
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Article Details
THE IMPCT OF E-BANKING ON USE OF
BANKING SERVICES AND CUSTOMERS SATISFACTION
AUTHORED BY - DHANASHRI RAMDAS SHEGAR
ROLL NO. 34
(LLM- II)
YEAR 2022-2023
SAVITRIBAI PHULE PUNE UNIVERSITY
P.E.S. MODERN LAW COLLEGE,
GANESHKHIND, PUNE
ABSTRACT-
During
the era of modern technology. Every task in daily life is lot simpler than it
used to be. Everything is computerised now because of technology. The one from
all of them is banking as well. The banking business has advanced significantly
in terms of technology since the 18th century. The banking industry has undergone
numerous developments as a result of technology. From account opening to money
transfers through e-banking, every task in the banking sector is computerised,
eliminating the need for customers to visit banks and wait in long lines. This
makes work for both customers and banking institutions easier, faster, and more
efficient. E-banking also encourages
competition among banks to offer their clients better services and draw in a
growing number of clients. The RBI made many adjustments to follow the mandatory
rules and regulations, guidelines, and directions for the banks and customers,
which helps to give clients privacy about their accounts and every transaction
when using online banking.
However,
in the current environment, a small number of customers are not taking
advantage of this e-banking due to ignorance and lack of education (since
technology requires knowledge to run it). It
takes a long time for certain of the public sector banks' staff members who are
over 50 to complete transactions since they are quite uninformed about
computerised banking and e-banking. The public sector banks are therefore under
pressure to spend a lot of money on employees' computer skills training so they
can handle any transaction while working for the bank. A key influence in the
financial sector has been performed by technology otherwise. "Need to have
than a Nice to Have Service" is how many people would describe online
banking. According to one point of view, the banking services and products
provided via debit and credit cards on the internet, mobile devices, and
e-banking are just traditional banking services that are distributed via a
network of commercial communication.1
KEYWORDS:
E-banking, banking, Customer satisfaction, ATM
INTRODUCTION-
The
development of computers has proven to be one of the great miracles of the 20th
century. In every aspect of life, the development of computers has been a huge
blessing for people. The way that banks operate now has been revolutionised by
the use of computerised banking. A new era in banking has emerged as a result.
When the first computerization commission, the Rangajan commission, issued its
recommendations in 1984, the process of computerization in Indian banks
officially began in the early 1980s. In 1989, the second report of the
Rangrajan Committee set the much-needed pace for the computerization. Improved
customer service, better housekeeping, speedier decision-making, and higher
revenues and productivity can all be important goals of computerization1.
Online
banking, sometimes referred to as Internet banking, e-banking, or virtual
banking, is an electronic payment system that enables customers of a bank or
other financial institution to carry out a variety of financial transactions
through the websites of the financial institutions. In contrast to branch
banking, which was the customary method by which customers received banking
services2, the internet banking system will often connect to or be a
component of the main banking system run by a bank.[1]
An
alternate method of distribution for banking services and goods is e-banking,
which uses an electronic user interface. E-banking allows customers to conduct
their financial transactions even when they are not in a bank branch3
DEFINATION
Electronic,
interactive communication channels are used to deliver innovative and classic
banking products and services automatically to customers. E-banking systems
include those that let customers of financial institutions—whether they are
people or businesses—access their accounts, conduct transactions, or get
information on financial products and services through a public or private
network, including the internet. An intelligent electronic device, such as a
personal computer (PC), personal digital assistant (PDA), automated teller
machine (ATM) kiosk, or touch-tone phone, is used by customers to access online
banking services. Although the various e-banking access methods have equal
risks and controls4.
E-BANKING'S
DEFINITION
E-Bank
is an electronic bank that offers internet-based financial services to
individual customers.
BENEFITS
TO BANKING INSTITUTIONS
1.
E-banking lowers the price of providing services to the customers.
2.
It gives banks a competitive edge over their competitors.
3.
Because less paper money is used, the central bank needs to create fewer paper
notes.
4.
Banks can generate income through promotional activities on websites.
5.
The customer can move money electronically with ease from one location to
another.
6.
The user has access to cash at all times via ATMs.
7.
Because customers can use e-banking services anytime, anywhere, there is a
growing need to invest more money in the necessary infrastructure.
OPPORTUNITIES
FOR CUSTOMERS
1.
Customers can use e-banking services 24/7.
2.
Rapid, easy access to account information.
3.
Online payments are accepted for the purchase of products and services.
4.
The client can move money electronically with ease from one location to
another.
5.
A customer can use ATMs at any time to get cash.
6.
Customers who use e-banking can check their account balance, acquire an account
statement, request for loans, and gather other data.5
BENEFITS
OF e-banking
1.
The products that some credit units offer are constrained.[2]
2.
Savings and credit cooperatives-in particular, tiny local cooperatives-to offer
conveniences on par with larger cooperatives. Despite the fact that many of
their customers are a part of the shares network, many banks provide their
clients, increasing the channels available to its members.
3.
One must meet the requirements to join.
4.
There is a membership fee required to join.6
5.
The risk of entering your credit card information while making an online
purchase.
6.
Criminals abusing bank cards at ATMs
Customers
who don't currently use e-banking are not included in the comparison of
attitudes between e-banking users and non-users. Additionally, it only covers
bank customers who have started using e-banking; it does not fully cover those
who have not.
The
majority of previously produced research data may not fully describe the local
context to our country.7
E-BANKING'S
EFFECT
E-banking
transactions are significantly less expensive than branch or phone
transactions. This could turn a big branch network a competitive advantage in
the past into a comparative disadvantage, allowing e-banks to undercut brick
and mortar banks. This idea is known as the "beached dinosaur"
argument. Since setting up an e-bank is simple, many new patterns will emerge.
Customers have a lot more options with e-banking. Customers will be less likely
to remain committed. E-Banking has already discovered that retail banking only
turns a profit after a sizable critical mass is reached.
To
communicate with banking customers, e-banking transactions require an
interface. All electronic transactions include an interface. Simply said,
e-banking is banking provided through a new delivery channel.
Consumers
are simply given another service. In order to satisfy a variety of consumer
needs in the banking industry and to keep up with rising expectations in the
Indian banking system, e-banking has become an essential component of the
global financial ecosystem. Online banking has long been popular among those
who are computer savvy, and as internet users increase and more people become
aware of its numerous advantages, it continues to gain popularity.8
An e-bank has extremely high startup costs. Building a reputable brand is quite
expensive because it involves spending a lot on pricey equipment and
advertising. Not only are traditional banks unable to buy things for cash as
opposed to being able to sell shares, but they are also unable to get more
capital through the stock market. In contrast, it appears to be extremely
simple to connect with investments at home for internet businesses. In order to
satisfy a variety of consumer needs in the banking industry and to keep up with
rising expectations in the Indian banking system, e-banking has become a
crucial component of the global financial environment.
E-banking
is simply banking provided through a new delivery method. Customers are just
given another service. An e-bank's startup costs are very high. Building a
reputable brand is quite expensive because it involves spending a lot of money
on pricey equipment and advertising. [3]
Not
only are traditional banks unable to buy things for cash as opposed to being
able to sell shares, but they are also unable to raise more money via the stock
market. In contrast, it appears to be rather simple to connect with investments
at home for internet businesses.
E-BANKING
TYPES
1.
Making balance inquiries, inter-account transfers, and pay links using a
computer for direct banking.
2.
Use an ATM to deposit money, make withdrawals, transfer money between accounts,
and pay a linked account.
3. Making direct bank transfers, checking
account balances, and paying associated accounts over the phone.
4 Avoiding the need to carry cash or a
chequebook by making purchases and paying with debit cards and smart cards.
LEGAL PROVISIONS REGARDING E BANKING
It
is impossible to expect the law to keep up with technological advancements. The
recent scandal surrounding virtual voyeurism has highlighted a number of
issues, including how inadequate and open to abuse the laws controlling
internet use are. Liability determination, recording and reproducing evidence,
and determining jurisdiction are issues that don't seem to be getting any
easier.
As
more Indian banks begin to offer electronic banking services, worries about
security and abuse of the system have grown.9
Although
there was a warning to banks that they should be established for the benefit of
the public, banking has always been a for-profit business, with the main goal
of banks being to increase profits. Additionally, the banking industry has
recently been troubled by the adoption of new economic environments including
globalisation, privatisation, and economic liberalisation. Deregulation,
technology advancements, and globalisation are all having a profound impact on
the banking industry in India, which has likewise undergone a wrenching
transformation.10
In
highly competitive marketplaces, the introduction of internet banking has
forced many banks to reconsider their information technology (IT) strategy. It
is asserted that the cost of providing online banking services is lower than
the cost of maintaining branch banking, and that banks who do not adapt to the
market's introduction of internet banking are likely to lose customers.11
In
comparison to other developing countries, India offers excellent prospects for
utilising the potential of electronic banking and creating a cashless society.
The Government of India (GOI), in addition to having a strong IT sector and a
very dense population, has made it apparent that it wants to attain financial
inclusion12 and is actively working to make this happen.13
For
financial inclusion to last, it is crucial to provide market-driven financial
services to the underserved or disadvantaged. Over the past ten years, the
Reserve Bank of India (herein referred to as RBI) and the GOI have carried out
a number of reforms and enrolment efforts related to financial inclusion. [4]
The
development of the E-Banking system has been greatly aided by the policy
initiatives and reforms of the RBI and the GOI.
Adoption
of technological prototypes such smart cards, mobile-based choices, debit
cards, and credit cards is one of the reforms. These amenities and developments
have given rise to a more market-driven atmosphere, which is actually the
Indian economy's future face.
The reforms include adoption of
technology prototypes like smart cards, mobile based options, debit cards and
credit cards. These facilities and advancement have given vent to more market
driven environment, which is in fact, the future face of the Indian economy.
Adoption of new technology has resulted in risks.14
To regulate the banking in India:
There are many statutes, which forms
the legal framework such as:
Banking Regulation Act, 1949. 15
The Reserve Bank of India Act.193416
The Negotiable Instruments Act, 1881.17
The Indian Contract Act, 1882.18
Foreign Exchange Management Act,
1999.19
Consumer Protection Act, 1986.20
Prevention of Money Laundering Act,
2002.21
Bankers Books Evidence Act, 1891.22
Indian Evidence Act, 1872.23
Indian Penal Code, 1860.24
The Payment and Settlement Systems
Act, 2007.25
and most importantly Information
Technology Act, 2000.26
CONCLUSION
E-banking
makes doing business better anywhere, at any time. It offers a fantastic
opportunity. E-banking has benefits for banks as well as customers, in addition
to both. Customers can access their accounts, make withdrawals, and deposit
money without going to a bank. E-banking, which is the market's
competitiveness, is more available, practical, secure, quick, and affordable for
both clients and banks. E-banking is a virtual blessing for busy executives,
students, and homeowners. with specialised technical skills.
REFERENCE
[1] R. N.
CHOUDARY Banking Law,378, central law publication.
[2] www.scribd.com
[3] chapter 3
review of literature p47, shodhganga inflibnet.ac.in, visited on 02/02/2019
[4]
https/ithanbookffiec.gov.
[5]
Sodganga.inflibnet.ac.in
[6]
https://mangalmay.org.
[7] Ankur Gupta,
‘Data Protection in consumer E-Banking’, Journal of Internet Banking and
Commerce, vol. 11, April (2006), p.1.
[8] Rimpi Kaur,
‘An Impact of IT on Branch Productivity of Indian Banking in the Era of
Transformation’, Journal of Internet Banking and Commerce, vol. 17, December,
(2012), p.2.
[9] Salim
Al-Hajri & Arthur Tatnall, ‘Technological Innovation and the Adoption of
Internet Banking in Oman’, The Electronic Journal for Virtual Organizations and
Networks, vol. 10, August, (2008), p.60
[10] Financial
inclusion or inclusive financing is the delivery of financial services at
affordable costs to sections of disadvantaged and low-income segments of
society.
[11] Graham A.
N. Wright, et. al., ‘Why E/M-Banking Will Soon Reach Scale In India’,
inhttp://www.microsave.net, Accessed on 24th January, 2013.
[12] Legal risk,
security risk, market risk.
[13] Law and
Regulation of Electronic Finance and Internet Banking, 2007, in U.K.,
Electronic Fund Transfer Act, 1978, in U.S.A are few examples such regulations.
[14] Act No. 10
of 1949.
[15] Act No. 2
of 1934.
[16] Act No. 26
of 1881.
[17] Act No. 9
of 1872.
[18] Act No. 42
of 1999.
[19] Act No. 68
of 1986.
[20] Act No. 15
of 2003.
[21] Act No. 18
of 1891
[22] Act No. 1
of 1872.
[23] Act No. 45
of 1860.
[24] Act 51 of
2007.
[25] Act No. 21
of 2000.
[26] Mishra A. K
(2005) “internet banking in India, part1”, www.bank net india.com.
[27]
Gupta.V,(2002) “overview of e-banking” : A global prospective bankers
[1] R.
N. CHOUDARY, Banking Law,378, Central Law Publication
2 www.scribd.com)visitedon2/02/20198;56pm
4 https/ithanbookffiec.gov.
5 Shodganga.inflibnet.ac.in
9 Ankur Gupta, “Data Protection in
consumer E-Banking”, Journal of Internet Banking and Commerce, 1 vol. 1, April
(2006).
10 Rimpi Kaur, “An Impact of IT on Branch
Productivity of Indian Banking in the Era of Transformation”, Journal of
Internet Banking and Commerce,2, vol. 17, December, (2012).
11 Salim Al-Hajri & Arthur Tatnall,
“Technological Innovation and the Adoption of Internet Banking in Oman” The
Electronic Journal for Virtual Organisations and Networks,60, vol. 10, August,
(2008).
12
Financial inclusion or inclusive financing is the delivery of financial
services at affordable costs to sections of disadvantaged and low-income
segments of society.
13 Graham. A. N. Wright, et. al., “Why
E/M-Banking Will Soon Reach Scale In India”, inhttp://www.microsave.net,
14 Law and Regulation of Electronic Finance
and Internet Banking, 2007, in U.K., Electronic Fund Transfer Act, 1978, in
U.S.A are few examples such regulations.
15 Act No. 10 of 1949.
16 Act No. 2 of 1934.
17 Act No. 26 of 1881.
18 Act No. 9 of 1872.
19 Act No. 42 of 1999.
20 Act No. 68 of 1986.
21 Act No. 15 of 2003.
22 Act No. 18 of 1891
23 Act No. 1 of 1872.
24 Act No. 45 of 1860.
25 Act 51 of 2007.
26 Act No. 21 of 2000
Article Information
THE IMPCT OF E-BANKING ON USE OF BANKING SERVICES AND CUSTOMERS SATISFACTION
Authors: DHANASHRI RAMDAS SHEGAR
- Journal IJLRA
- ISSN 2582-6433
- Published 2023/05/15
- Volume 2
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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