Cognizance of E-Banking in Rural Areas


S. Anitha
IT Lecturer
Indus Business Academy

Keywords: E-Banking, Online banking, Mobile banking, Electronic banking, e-business


This paper describes an empirical study of investigating cognizance of e-banking (online banking) in rural areas. The research objective is to examine the awareness of e-banking in rural areas and focusing on emerging issues and challenges.


Electronic banking is the wave of the future. It provides enormous benefits to consumers in terms of the ease and cost of transactions. The Internet banking is changing the banking industry and is having the major effects on banking associations. E-banking is a generic term for delivery of banking services and products through electronic channels, such as the telephone, the internet, the cell phone, etc. E- Banking has been around for some time in the form of automatic teller machines and telephone transactions. More recently, it has been transformed by the Internet, a new delivery channel for banking services that benefits both customers and banks. Access is fast, convenient, and available around the clock, whatever the customer's location and banks can provide services more efficiently and at substantially lower costs.

The concept and scope of E-banking is still evolving. It facilitates an effective payment and accounting system thereby enhancing the speed of delivery of banking services considerably. While E-banking has improved efficiency and convenience, it has also posed several challenges to the regulators and supervisors. Several initiatives taken by the government of India, as well as the Reserve Bank of India (RBI), have facilitated the development of E-banking in India. The government of India enacted the IT Act, 2000, which provides legal recognition to electronic transactions and other means of electronic commerce.

Objectives of the study

* To provide the basic idea of e-banking
* To facilitate opportunities of online banking
* To study about challenges of e-banking
* To examine the awareness of e-Banking in Bangalore rural areas

Need for the study

The new information technology is becoming an important factor in the future development of financial services industry, and especially banking industry. Comparing to the tradition banking services, e-banking provides a convenient channel for customers to access all the banking services and information from one place to all over the world.  But in this technology era also rural people are not taking the benefits of Information technology. This paper concentrates on the awareness of e-banking in rural areas and the opportunities of e-banking.

Research method

The study is based on primary data which is collected from various customers of different banks which is available in Bangalore with the help of structured, pre-tested and modified questionnaire. A sample of 100 customers was selected from various nationalized and private banks operating in Bangalore, which are functioning by RBI guidelines. The data used in this research are collected through personal visits as well as phone to customers of various banks in Bangalore.

Sample and study Area

In order to select the sample, various customers of different bank from rural areas of Bangalore were identified. A group of 100 customers were selected from various banks.

What is E-banking?

Electronic Banking in simple terms means, it does not involve any physical exchange of money, but it's all done electronically, from one account to another, using the Internet. Internet banking is just like normal banking, with one big exception. You don't have to go to the bank for transactions. Instead, you can access your account any time and from any part of the world, and do so when you have the time, and not when the bank is open. For busy executives, students, and homemakers, e-banking is a virtual blessing.

Opportunities of online banking

The three broad facilities that e-banking offers are:

Convenience - Complete your banking at your convenience, in the comfort of your home or at any place you can access the Net.

No more Qs - There are no queues at an online bank.

24/7 service - Bank online 24 hours a day, 7 days a week and 52 weeks a year.

Features of Internet banking

1. Fund transfer facility
2. Efficiency in CRM(Customer relationship management)
3. Make Payment of bills
4. Introduces new & innovative products &services.
5. View of  balance and statements;
6. Brings door to door services.
7. Have evolutionary trend at a global scenario.
8. Customers can View Direct Debits.

Challenges of online banking

1. Customer may have to face risky transaction & fraud.
2. Failure of power supply cause to break down of system.
3. Loss of heavy income at times of settlement of higher magnitude.
4. Cost involved in training staff may not be profitable especially in times of attrition.
5. Development of an attitude of lethargy.

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Source: E-mail June 7, 2011


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