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banking is electronic banking or banking using electronic media. Thus, e-banking is a service
provided by many banks, that allows, a customer to conduct banking transactions, such as
managing savings, checking accounts, applying for loans or paying bills over the internet using a
personal computer, mobile telephone or handheld computer (personal digital assistant) The range
of services offered by e-banking are: Electronic Funds Transfer (EFT), Automated Teller
Machines (ATM) and Point of Sales (PoS), Electronic Data Interchange (EDI) and Credit Cards
Electronic or Digital cash.

Functions of e-banking:

E-banking means banking transactions carried out with the help of computer systems (i.e.,
banking over the internet).
a. Electronic Fund Transfer (EFT): Under this system, a bank transfers wages and salaries
directly from the company’s account to the account of employees of the company.
b. Automatic Teller Machine (ATM): It refers to an electronic terminal that allows people
with plastic card to perform simple banking transactions like withdrawal of cash 24 x 7
without any help of human teller.
c. Debit Card: It refers to a plastic card that allows the bank to take money from the
customer’s account and transfer it to a seller’s account.
d. Credit Card: It refers to a plastic card that allows the customer to buy now and pay back
the loaned amount to bank at a future date.
e. Online Banking: Under this system, when the customer gives instruction on his
computer, the bank computer transfers money from customer’s account to biller’s
account.
f. RTGS: RTGS is a system of inter-banking settlement of transactions conducted among
different banks on real time and gross basis. Real time settlement means settling
transactions at the time when they take place; there is no time lag between transactions
taking place and their settlement. Gross basis involves settling all transactions
individually without matching any transaction with another. In RTGS system, every bank
along with the Central Bank is linked electronically. Whenever any transaction takes
place between two banks, it is settled by the RTGS system. A bank may know its
liquidity position at any time during the transaction hours.
g. NEFT: NEFT is a nationwide system that facilitates individuals and organisations having
bank accounts to transfer funds from their accounts electronically to individuals and
organisations having any other bank accounts. However, the intending funds transferor
must be authorised by the bank for this. For transferring the funds, the transferor may
either use his own electronic resources (computer network). However, branches