Question- What is online banking or e-banking? Discuss its benefits.

Related Short Answer Questions
1. What is online banking or e-banking?

Ans.

Online Banking or E-Banking

Online banking is an umbrella term for the process by which a customer may perform banking transactions electronically. The terms electronic banking: personal computer banking, Internet banking, virtual banking online banking, home banking, remote electronic banking, and phone banking, refer to online banking. PC banking and Internet or online banking are frequently used designations. The terms used to describe the various types of electronic banking are often used interchangeably. PC banking is a form of online banking that enables customers to execute bank transactions from a PC via a modem. In most PC banking ventures, the bank offers the customer a proprietary financial software program that allows the customer to perform financial transactions from his or her home computer. The customer dials into the bank with his or her modem, downloads data, and runs the programs that are resident on the customer's computer. E-banking is a result of the growing expectations of bank's customers. E-banking involves information technology based banking. Under this IT system, the banking services are delivered by way of a Computer-Controlled System. This bank's system does involve direct interface with the customers. The customers do not have to visit the premises. Internet banking or online banking, is an outgrowth of PC banking. Internet banking, uses the Internet as the delivery channel by which to conduct banking activity. An Internet banking customer accesses his or her accounts from a browser-software that runs Internet banking programs resident on the bank's World Wide Web server, not on the user's PC. Net Banker defines a "true Internet bank" as one that provides account balances and some transactional capabilities to retail customers over the World Wide Web.

The Internet banks offer many of the same services as do traditional brick- and-mortar Banks, analysis view Internet banking as a means of retaining increasingly sophisticated customers, of developing a new customer based, and of capturing a greater share of depositor assets. A typical Internet bank site specifies the types of transactions offered and provides information. Because Internet banks generally have lower operational and transactional costs than do traditional brick-and-mortar banks, they are often able to offer low-cost checking and high-yield Certificates of deposit. Internet banking is not limited to a physical site; some Internet banks exist without physical branches.

Online banking, also known as internet banking, web banking or home banking, is an electronic payment system. It enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website. The online banking system will typically connect to or be part of the core banking system operated by a bank to provide customers access to banking services in place of traditional branch banking. Online banking significantly reduces the banks' operating cost by reducing reliance on a branch network, and offers greater convenience to customers in time saving in coming to a branch and the convenience of being able to perform banking transactions even when branches are closed. Internet banking provides personal and corporate banking services offering features such as viewing account → balances, obtaining statements, checking recent transactions and transferring money.

E-bank is the electronic bank that provides the financial service for the individual client by means of Internet.

E-banking is defined to include the provision of retail and small value banking products and services through electronic channels as well as large value electronic payments and other wholesale banking services delivered electronically.

Electronic banking is for the process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution. Therefore transactions related to bank activities via Electronic means and medium is called electronic Banking.

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