Information Technology In Banking

Information Technology has become a necessary tool in today 's organizations. Banks today operate in a highly globalized, liberalized, privatized and competitive environment. In order to survive in this environment banks have to use information technology. Information Technology has introduced new business paradigm. It is increasingly playing a significant role in improving the services in the banking industry. Indian banking industry has witnessed a tremendous development due to sweeping changes that are taking place in the information technology. Electronic banking or e-banking has emerged from such an innovative development.

Modern Technology is seen as a panacea for most of the ills that the banking sector faces today. Even at present, India

E-banking is the use of electronic methods to deliver traditional banking services such as taking deposits, making loans and clearing payments using any kind of E-channels. It is about using the infrastructure of the digital age to create opportunities- both local and global. It enables the dramatic lowering of the transaction costs and the creation of new types of banking opportunities that address the barriers of time and distance. Banking opportunities are local, global and immediate in e-banking. The current web based variant of banking is the latest of several generations of systems: ATM was the first well known machines to provide electronic access to customers of retail banks. With the advent of ATM, banks are able to serve customers outside of banking halls. Next came phone banking where users call their bank 's computer system on their ordinary phone and use phone keypad to perform banking transactions. PC banking superseded phone banking and allowed users to interact with their bank by means of a computer with a dial up modem connection to phone network. PSBs which are foundation of the Indian Banking system, account for more than 78% of the assets of total banking industry. Unfortunately they are burdened with excessive NPAs, massive manpower and lack of modern technology. On the other hand private sector banks are showing immense progress. They are leaders in internet banking,

The traditional model for banking has been through branch banking. Only in the early 1990s there has been start of non-branch banking services. The good old manual systems on which Indian Banking depended upon for centuries seem to have no place today. The credit of launching internet banking in India goes to ICICI Bank. Citibank and HDFC Bank followed with internet banking services in 1999. Several initiatives have been taken by the Government of India as well as the Reserve Bank to facilitate the development of e-banking in India. The Government of India enacted the IT Act, 2000 which provided legal recognition to electronic transactions and other means of electronic commerce. The Reserve Bank is monitoring and reviewing the legal and other requirements of e-banking on a continuous basis to ensure that e-banking would develop on sound lines and e-banking related challenges would not pose a threat to financial stability. A high level Committee under chairmanship of Dr. K.C. Chakrabarty and members from IIT, IIM, IDRBT, Banks and the Reserve Bank prepared the "IT Vision Document-2011-17", for the Reserve Bank and banks which provides