by June 17, 2001 0 comments



There would hardly be any one reading this article, who has not used the services of a bank. You would use a bank for two broad types of activities — put in or take out your money and to track and manage your money. Both of these require you to interact with your bank on a one to one basis. So, banks, like grocery shops have an urgent need to physically accessible to their customers. That is why you will find bank branches at all places, and where they cant build branches, you will these days find ATMs.

Swiss Bank online?

Want a numbered Swiss account? We came across
www.paibank.com. The highlight of the site is that it offers anonymous online bank accounts and debit cards. No, it is not run by one of the Pais of southern India. Nor is it meant only for people with the surname
Pai.

This is supposedly the Pacific International Bank. Why supposedly? There was no contact address anywhere on the website. A whois lookup showed that the site is registered by a US based webhosting service called Edifax, and the administrative and technical contact was from Edifax itself.

Things got curiouser when we did a bit of hunting around. The bank has another web address at
www.pacinbank.com. The admin contact for this site is a usa.net address. Edifax has another page up on its server at
https://secure.edifax.com/foxanon/application.phtml. This as you can guess is the application form for opening a numbered account at another online setup called
foxanon.com.

And there were enough indication in various government advisories and in news group postings to raise enough questions about the authenticity of the site.

So, before you jump headlong into online banking, be sure that you are at the right site.

Both these (Branches and ATMs) require the bank to invest considerably in infrastructure and manpower, and you to physically go to the bank counter or ATM, to transact your business. When the Internet happened, a convenient way opened out for the bank to reach each one of its customers, without having to build physical branches. And when the dotcom mania hit, many purely online banks also started off (in the West). Like the dotcoms who were offering huge discounts to buy from them, these online banks offered higher interests on deposits and better terms on credit cards to attract
clientale.

When the dotcom dream was beginning to crumble, there came a theory that you needed a click and mortar business model as opposed to a click only business model in order to survive. That is, existing (read old economy) businesses, which use the net as another way of reaching the customer would survive, while businesses, which used only the net to reach the customer would fail.

Rating online banking in India

Indian banks are definitely moving online. As we explored the Internet space, we came across 50 Indian banks that have an online presence, of which 11 offer online services. A significant proportion of the rest have account opening forms that you can download and send to the respective banks. Some banks also offered mobile banking, and the Internet banking services of some were under construction.

Of the banks that do offer online services, you can pretty much do most of what you’d go to the bank for from the environs of your home or office. From opening an account to finding out the balance, transferring funds, applying for bank drafts or checkbooks, most commonly used services are available online. Some banks also let you apply for loans or credit cards online, and even give you calculators to find out the amount of loan you’re eligible for. So, if your bank offers online services, applying for the same will save you a lot of time and energy.

We found a strong NRI orientation, in that some banks only offered forms for opening NRI accounts in the name of online services.
The most important concern in banking online is security. Most online banks use 128-bit SSL encryption to protect the data that you exchange with the site. This is an industry standard supported by most browsers, and is secure enough to trust your confidential data to.

However, orientation to customers still leaves much to be desired.

To test a bank’s responsiveness to customers, we sent a query to all bank sites at the address provided, asking them for terms and conditions to open a savings account, whether we could operate this account online, and whether they offered locker services. Only eight banks responded, one of which was an automated response promising to get in touch later, but nothing happened subsequently.

In the following reviews, we have looked at the information available from their websites, since it was not possible for us to open an account with each bank and check out their actual quality of services. That is why we have not rated them.

Pragya Madan

By that yardstick, of all online ventures, old economy banks that extend their services over the net would be the most likely candidates for dotcom success. And as a natural corollary, all of them should be rushing to the web to reap the benefits of the net. And we, those who need the banks services should have given up queuing up at bank branches and instead transacted all our banking business (barring depositing and withdrawing money) an instead taken to net banking like nothing else.

Have we? Obviously not!

It is the chicken and egg story again. Banks have to go online with interactive web pages and account tracking and modifying functionalities for people to be able to transact their banking business completely on the web. Banks on the other hand seem to be waiting for enough customers to come online before they take the big leap. But some efforts are being taken by Indian banks to maintain an online presence, and give their customers limited online functionality.

Before we get into what each of these banks have (or do not have) to offer on their websites, let us first take a quick look at some of the things that could be done online with regard to your bank account.

At the very minimum, a bank should offer information about itself and details about all the services it offers, including interest rates and various service charges. This information should obviously be updated regularly.

Also available should be a searchable list of physical branches and ATMs with full address, telephone and fax numbers along with email addresses.

There should also be detailed guidelines on how to start accounts, apply for a loan or a credit card etc.

All this would just be starters, and will not qualify the site to be an online bank. Not by any measure!
The bare minimum required for a bank web site to qualify as online banking enables is for it to provide account-tracking facilities. That is, an account holder, or a credit card holder should be provided with, or should be able to create an account at the site, much like you create an account at any other portal. By logging into this account, you should be able to see your balance(s), see whether credits and debits have been made etc. You should be able to make simple requests like for a passbook.

Going a step further, you should be able to give and change standing orders, like transferring a stipulated sum every month to your parents account, or automatically paying your credit card bill and so on.

The next step is when you can transfer money to another account, operated by some one else, say a utility or a merchant, maybe in a different bank, from your account.

There should also be facilities at the site to interact with the bank, to clarify doubts, etc. At the most basic, this could be email. Most banks get away by giving a mailto: link on the page that opens up your email client. Not the most secure way to communicate. Better would be a secure page, with a form for mail. I guess that online banking is still far away from having online chat based help. Many banks do provide the number to a helpline though.

At the start of this piece, I said that Internet only banks opened up at the height of the dotcom fever. What happened to
them? Well, they are still around, given that quite a few were promoted by existing brick and mortar banks themselves. The Egg, an internet only bank that was promoted by the Prudential Bank of England has since added a shopping section to their site. One guess is that the quest for a better business model has hit them too.

Krishna kumar

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