Insight into the different forms of internet banking
Key learning points
- Netbank gives you online access to different types of banking services.
- Most banks offer three different types of internet banking services.
- Information-based internet banking includes information about various products and services offered by banks.
- Communicative internet banking allows you to perform simple actions such as applying for loans, checking balances, etc.
- Transactional internet banking allows you to transfer money and make payments.
Internet banking, also called i-banking or net banking, is a facility that banks offer so that you can enjoy various banking services via the internet. This method of banking reduces your dependence on bank branches. You have access to national and international money transfer facilities, can create utility bills, createvast deposit's, and do much more through online banking. The Reserve Bank of India (RBI) has classified internet banking services into three types. Let's access the different types of online banking services available in India.
Types of internet banking
The different forms of internet banking are based on different levels of facilities that the banks offer. Below are the three main types of internet banking.
Transactional internet banking
TransactioneelInternet bankingis the type of internet banking service that deals with all money-based services or payment transactions. Typically, you need an active online bank account and password to conduct cash-based transactions such as money transfers, credit card payments, utility bills, setting up term deposits and investing in marketable securities. Transactional internet banking has streamlined money transfers in India by introducing facilities like NEFT, RTGS and IMPS. These money transfer channels allow instant money transfers with varying minimum and maximum transaction limits. Let us understand them briefly.
- National Electronic Fund Transfer (NEFT): NEFT is a widely used centralized payment system supported by the Reserve Bank of India (RBI). You can use your internet banking platforms to send money to various bank accounts through NEFT. There is no minimum or maximum transfer amount and the cash settlement takes place in batches at half-hour intervals. The NEFT facility is available 24 hours a day.
- Real Time Gross Settlement (RTGS): You can use RTGS if you want to initiate high value transfers. The minimum transfer limit for RTGS is INR 2 Lakh. The bank transfers the money to the recipient's account in real time. You can avail the RTGS facility through your internet banking platforms. RBI has waived off inbound transaction charges, while capping all other transaction charges.
- Immediate Payment Service (IMPS): IMPS is a real-time money transfer facility owned by the National Payments Corporation of India. Banks credit the beneficiary's account immediately, but charge a nominal fee for instant IMPS transactions. There is no lower limit on the money you can transfer via IMPS. However, the upper limit is limited to INR 5 Lakhs. In addition, IMPS is available 24x7 and you can transfer money via mobile banking or internet banking.
Information-based internet banking
Informativeinternet bankingis also known as basic level online banking. Basic level refers to a bank's website, which provides information about the various products and services it offers. You as a customer will have limited access to the general information available on the website and can send requests for detailed information by email. Informational internet banking generally covers the basic banking facilities such as the different types of accounts, loan offers, priority banking facilities, real estate projects related to the bank, nearest bank branches and ATMs, etc.
Communicative internet banking
With this kindinternet bankingThis service allows you to perform simple, communicative functions at banks, such as applying for various services, such as loans, and asking questions about your account balances. Communication between the bank and the customer takes place via virtual chatbots. These chatbots are equipped to provide you with general information and refer you to customer service if necessary. You can ask general questions about minimum balance requirements, transfers, types of bank accounts and cards issued, etc.
Final note
Now that you know the different forms of online banking, you can use your preferred facilities based on your needs. At the heart of online banking is the idea that you can make all kinds of transactions and access the information you need without ever setting foot in the bank. Internet banking has actually made the banking process easier. So make sure you sign up for the service when youopen your bank account.
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*Disclaimer:This article is for informational purposes only. We recommend that you contact your tax advisor or CA for expert advice.
