Online Banking or E BankingIntroductionOnline banking (Internet banking orE-banking) allows customers of afnancial institutiontoconduct fnancial transactions on a securedwebsite operated by the institution, which can bearetail bank, virtual bank, credit union orbuilding society.Online bankingis an umbrella term for the process by which a customer may perform bankingtransactions electronically without visiting a brick-and-mortar institution. The following termsall refer to one form or another of online banking: personal computer (PC banking! Internet banking! virtual banking! online banking! home banking! remote electronicbanking! and phone bank. PC banking and Internet or online banking is the most fre"uently used designations. Itshould be noted! however! that the terms used to describe the various types of online banking areoften used inter changeably.#nline banking is an activity that is not new to banks or theircustomers. $anks having been providing their services to customers electronically for yearsthrough software programs. These software progr ams allowed the user s personal computer to dial up the bank directly. In the past however! banks have been very reluctant to provide theircustomers with bankingvia the Internet due to security concerns.Today! banks seem to be %umping on the bandwagon of Internet banking. &hy is there a suddenincrease of bank interests in the Internet' The first ma%or reason is because of the improvedsecurity and encryption methods developed on the Internet. The second reason is that banks didnot want to lose a potential market share to banks that were "uick to offer their services on theInternet.(any of the banks like )$$*! +,$C! I-IC! Citibank! .lobalTrust $ank (.T$! $ank of (adhumati $ank were offering /-banking services. $ased on theabove statistics and theanalysts comments that $angladesh had a high growth potential for e- banking or #nline banking the players focused on increasing and improving their /-banking or#nline $anking services. 0s a part of this! the banks began to collaborate with functions online&hy is there a sudden increase of bankinterests in the Internet' The first ma%or reason is because of the improved security andOnline Banking or E Bankingencryption methods developed on the Internet. The second reason is that banks did not want tolose a potential market share to banks that were "uick to offer their services on the Internet.To access a financial institution1s online banking facility! a customer having personal Internetaccess must register with the institution for the service! and set up some password (under variousnames for customer verification. The password for online banking is normally not the same asfor 2telephone banking3. -inancial institutions now routinely allocate customers numbers (alsounder various names! whether or not customers intend to access their online banking facility.Customer s numbers are normally not the same as account numbers! because number of accountscan be linked to the one customer number. The customer will link to the customer number any ofthose accounts which the customer controls! which may be che"ue! savings! loan! credit card andother accounts. Customer numbers will also not be the same as any debit or credit card issued bythe financial institution to the customer.To access online banking! the customer would go to the financial institution1s website! and enterthe online banking facility using the customer number and password. ,ome financial institutionshave set up additional security steps for access! but there is no consistency to the approachadopted.#nline $anking or /-banking is definedas the automated delivery of new and traditional banking products and services directly to customers through electronic! interactive communicationchannels. #nline $anking or /-banking includes the systems that enable financial institutioncustomers. Individuals or businesses! to access accounts! transact business! or obtain informationon financial products and services through a public or private network including the Internet!Customers access e-banking services using an intelligent electronicdevice.TheOnline Banking or/-banking was firstly introduced in $angladesh by the )$$* around 4556.There after many other banks like +,$C! I-IC! Citibank Trust $anks! Islami $ank! etc. followedthe service. 0s today private and foreign bank had started capturing the market throughOnline$anking or e-banking hence7the competition is heating up and the lack of technology can make a bank loose acustomer8 so now the public banks are breaking the shackles of traditional set-upand gearing up to face the competition posed by the private sector counterparts.Online Banking or E BankingDefinition OF Online Banking#nline banking is an outgrowth of PC banking. #nline banking uses the Internet as the deliverychannel by which to conduct banking activity! for e9ample! transferring funds! paying bills!viewing checking and savings account balances! paying mortgages! and purchasing financialinstruments and certificates of deposit. 0n Internet banking customer accesses his or heraccounts from browser software that runs #nline banking programs resident on the bank s &orld&ide &eb server! not on the user s PC. :et $anker defines a 7true Internet bank8 as one that provides account balances and some transactional capabilities to retail customers over the &orld&ide &eb. Internet banks are also known as virtual! cyber! net !interactive! or web banks.Internet banking is %ust like nor mal banking! with one big e9ception. ;ou don t have to go to the bank for transactions. Instead! you can access your account any time and fromany time and from any part of the world! and do so when you have the time! and notwhen the bank is open. -or busy e9ecutives! students! and homemakers!e-banking is virtual blessing. :o more talking precious time off from work to get ademand draft made or a che"ue book issued./lectronic banking! also known as electronic funds transfer (/-T! is simply the use of electronicmeans to transfer funds directly from one account to another! rather than by che"ue or cash. ;oucan use electronic funds transfer to:Online Banking or E Banking+ave your paycheck deposited directly into your bank or credit union checking account.&ithdraw money from your checking account from an 0T( machine with a personalidentification number (PI:! at your convenience! day or night.Instruct your bank or credit union to automatically pay certain monthly bills from your account!such as your auto loan or your mortgage payment.+ave the bank or credit union transfer funds each month fromyour checking account to yourmutual fund account.+ave your government social security benefits check or your ta9 refund deposited directly intoyour checking account.$uy groceries!gasoline and other purchases at the point-of-sale! using a check card rather thancash! credit ora personal check.