INTRODUCTION OF INFORMATION TECHNOLOGY ACT 1999 IN BANKING

Introduction of Information Technology-Act of 1999 under

banking sector reforms gave new dimensions to the Indian bankingindustry.

 ATMs, Smart cards, Internet banking,  Tele banking, etc.INDIA has transformed the banking structure, business process and also the work culture and human resource development. The banks in India have started using electronic and telecommunication networks for providing a wide range services. The various new technologies that are use in the banks are explained below:

1) Virtual Banking: It includes providing of banking and related services through extensive use of IT to the customer. The services are delivered to the customers by depending only on IT. The most important types of virtual banking services are

Automated Teller Machines (ATMs), electronic fund transfer,

phone-banking, credit card, debit card, smart card, internet

banking and so on.

2) ATMs (Automated Teller Machines): ATMs are self service vendor machine that help the banks to provide all timebanking services to their customers at convenient places without visiting to the bank premises.

3)Debit Card: It is a kind of prepaid card with some stored value. A Personal Identification Number (PIN) will be issued to the customers for using the debit card. It can be used at all outlets that accept, such cards for payments. In this case, the Transaction amount is  debited to the bank account of the customer. Debit card does not permit a customer to spend over and above his cash balance in the bank.

4) Credit Card: It enables a customer to purchase goods and services within the prescribed limits  without making  cash payments. The main difference between a

credit card and debit card is that while credit card is a 'post paid', the latter is 'pre-paid'.

5) Point of Sale (PoS): The PoS terminal is a machine that Facilates  transactions through swipe of a card in an online environment. Merchant business establishments operate point of sale in their premises in order to accept plastic cards. The PoS terminals facilitate electronic funds transfer. PoS system identify the cardholder and check whether the customers account has sufficient funds to cover the purchase. 

6) Door Step Banking: This means banking services and products made available to a customer at his place of residence or work. Under this system, there is no need for the customer to visit the branch for getting services or products from the bank.

7) Internet Banking: It is also called on-line banking where the traditional banking services are provided through the internet. Internet banking is a product of e-commerce in the field of banking and financial services. Internet banking enables the customers to open accounts, pay bills, know account balances, forward loan application, view and print copies of cheques , transfer funds, stop payments, etc. Different banks have different levels of such devices offered, starting from low level. where only information is provided to high level where online transactions  are made possible.

8) Mobile banking: It is an extension of internet banking. It gives everybody with a mobile phone to access banking services, irrespective of their location. In this system, a customer can access his account details on a mobile phone by using the Short Messaging Service (SMS) technology. It provides many services such as account balance, mobile alerts :about credit card or debit card transactions, mini account statement and so ON.

9) Tele-banking: It is another form of electronic banking through which banking services or products are rendered through telephone to its customers. It is a 24 hour banking facility to the customer. It is based on the voice processing facility available in the computers of bank.

10)Electronic Fund Transfer (EFT): It is an easy and speedy mechanism to facilitate the transfer of funds from one place to another. It enables the customers to transfer money instantly from one bank account to another one of the same or another customer, from one branch or the other of the same bank or a

different bank not only within the country but also within other countries.

11) Electronic Clearing Services (ECS): It is non-paper based movement of funds. It consists of:  Electronic Credit Clearing service is a reliable device used

for bulk and repetitive credit-push payments such as salary, pension, dividend, commission, IPO refunds, interest, etc.Electronic Debit Clearing Service was introduced to facilitate the payment of credit-pull transactions such as Payment of utility bills, insurance premium and repayment of loan emi(easy monthly installment).