Electronic Banking Services/ E-banking
It is the use of computers and internet in the functioning of the banks.
Main electronic banking services:
Electronic Fund Transfer (EFT):
In this, a bank transfers wages and salaries directly from the company's account to the accounts of employees of the company. Some other examples are online payment of electricity bill, water bill, insurance premium, house tax etc.
Automatic Teller Machines (ATMs):
ATM is an automatic machine with the help of which people can withdraw or deposit money by inserting the card and typing your personal Identity Number (PIN). This machine operates for 24 hours.
Debit Card:
A Debit Card is issued to a customer in lieu of his money deposited in the bank. The customers can make immediate payment of goods purchased or services obtained on the basis of his debit card if the terminal facility is available with the seller.
Credit Card:
A bank issues a credit card to its customers. This is a type of overdraft facility by which, with the help of this card the holder can buy goods or obtain services up to a certain amount even if he has insufficient balance in his bank account.
Tele Banking:
Under this facility, a customer can get information about the balance in his account or information about the latest transactions on the telephone.
Core Banking Solution (CBS)
Also called Centralised Banking Solution, In this system a customer by opening a bank account in one branch (which has CBS facility) can operate the same account in all CBS branches of the same bank anywhere across the country.
Two more very important E-Banking Services:
National Electronic Fund Transfer (NEFT):
NEFT refers to a nationwide system that facilitates individuals, firms and companies to electronically transfer funds from any branch to any individual, firm or company having an account with any other bank branch in the country. NEFT settles transactions in batches. The settlement takes place at a particular point of time during the day.
Real Time Gross Settlement (RTGS):
RTGS refers to a funds transfer system where transfer of funds takes place from one bank to another on a Real time and on Gross basis.
Settlement in Real time means transactions get settled as soon as there is processing. Gross settlement means the transaction settles on one-to-one basis without bunching or netting with any other transaction.
This is the fastest possible money transfer system through the banking channel.
The basic difference between RTGS and NEFT is that while RTGS processes the transactions continuously, NEFT settles transactions in batches.
Modes of Card Based and Biometric Based Digital Payments Class 8