Net Banking – What is Internet Banking? Features & Advantages

In the era of digital connectivity, internet banking, or net banking, is a cornerstone of modern financial management. From transferring funds and paying bills to accessing account statements and applying for financial products, internet banking offers unparalleled convenience and accessibility. This blog delves into the essentials of Internet banking, highlighting its key features and advantages.

What is Internet Banking?

Internet banking, commonly referred to as online banking, e-banking, or net banking, is a service provided by banks and financial institutions that enables customers to conduct banking activities via the Internet. This means you can perform various transactions and access services without visiting your bank's physical branch.

However, not all account holders are automatically granted access to internet banking.

To use this service, you must register for it either when you open your account or at a later time. The registration process is simple, and accessing your Internet banking account requires you to log in with your registered customer ID and password.

How Does Internet Banking Work?

Net banking is an extremely beneficial facility anyone can enjoy. But how does it work?

• To get started with Internet banking, you must have a basic savings or current account with any bank or financial institution.
• To register your bank account and access internet banking, you need a proper internet connection and a mobile, laptop, or computer.
• Once you register on the online site of the bank or financial institution, you will be provided with a password and a unique customer ID, which you need to use every time you log-in to your internet portal.

Features of Internet Banking

Here are some of the key features of Internet banking you should consider:

• You can view your account statements digitally
• Open a fixed deposit account through your online banking platform.
• Pay utility bills such as electricity and water online.
• Transfer funds to accounts at different banks.
• Make payments to merchants.
• Buy general insurance.
• Request a chequebook with just a few clicks.
• Recharge your mobile or DTH services.

What are the Advantages of Internet Banking?

In today's technology-driven world, internet banking has become an essential service. It offers numerous advantages over traditional banking, often involving visiting the bank and waiting in line. Here are some of the key benefits of Internet banking that simplify our daily lives:

1. Availability

   You have access to banking services 24/7, all year round. Many services are not bound by time restrictions, allowing you to check your account balance and transfer funds whenever you need to without waiting for the bank to open.

2. Easy Operability

   One advantage of net banking is its user-friendly design. The platforms feature intuitive interfaces, making it simple for users to navigate and complete transactions. Additionally, most platforms offer tutorials and customer support to help users utilise the service efficiently.

3. Convenient

   There's no need to abandon your tasks to wait in line at the bank. With online banking, you can handle transactions from anywhere. Pay utility bills, recurring deposit instalments, and more, all from the convenience of your location.

4. Time Efficient

   With internet banking, you can finalise transactions in just a few minutes. Whether you're transferring funds to any account within the country or opening a fixed deposit account, the process is swift and efficient.

5. Activity Tracking

   Whenever you conduct a transaction at a bank branch, you receive an acknowledgement receipt, which can sometimes be misplaced. However, transactions made through the bank's online banking portal are automatically documented. This digital record serves as proof of your transaction and includes important details such as the payee’s name, bank account number, amount paid, date and time of payment, and any remarks.

What are the Disadvantages of Internet Banking?

While there are fair sets of advantages of Internet banking, there are also some disadvantages. Let’s take a look at all the disadvantages of internet banking:

1. Requirement of Internet

   Having a continuous Internet connection is essential for using Internet banking services. Without internet access, you won't be able to take advantage of any online facilities. Additionally, if the bank's servers experience technical issues, you may also be unable to access net banking services.

2. Security of Transactions

   Despite banks implementing extensive precautions to secure their networks, online banking transactions remain vulnerable to hackers. Even with advanced encryption methods in place to protect user data, there have been instances of compromised transaction data. This poses significant risks, such as unauthorised use of the data for the hacker's gain.

3. Not Easy for Elders and Beginners

   In India, there are individuals leading lives largely disconnected from the internet. For them, comprehending the workings of net banking might present a significant challenge. Moreover, lacking guidance on the processes involved can make it exceedingly difficult for novices to navigate independently.

4. Password Security

   Accessing Internet banking services necessitates entering a password, making its security crucial for maintaining integrity. If the password is disclosed, it can be exploited for fraudulent purposes. Moreover, passwords must adhere to the banks' specified guidelines. It's advisable for individuals to regularly update their passwords to prevent theft, despite the potential inconvenience of remembering them.

How to Register for Net Banking?

There are two ways in which you can register for online banking services – online and offline. Below, we will show you how you can avail of internet banking services in both ways:

• Offline

  • Submit the completed internet banking application form to your home branch along with necessary documents, including scanned copies of your Aadhar card, bank passbook, and other relevant paperwork.
  • Branch officials will review and verify your documents. After verification, they will provide you with a customer ID and password to access the internet banking portal.
  • You can download the internet banking application form from the bank’s official website.
  • After receiving your login credentials, you can access the net banking portal.

• Online

  • Go to your bank's official internet banking website.
  • Navigate to the personal/retail banking section and click the ‘Login’ button.
  • You will be directed to a new page where you need to click on the ‘New User? Register Here’ link.
  • If you already have a customer ID and password, enter them and click ‘Login’. If not, click ‘Next’.
  • You will be taken to an online ‘Self Registration Form’ where you must enter details such as your account number, registered mobile number, email address, CIF number, branch code, and debit card details.
  • Click on ‘Submit’. Verify your registration by entering the One Time Password (OTP) sent to your registered mobile number. You will receive a temporary customer ID and password on the screen, which you can use to log in and create a new login ID and password.

Security Concerns to Address When Using Internet Banking in India

While Internet banking is a blessing, it is inevitable to shy away from the fact that it comes with security concerns. But you can stay safe while using net banking services if you consider the following things:

1. Check Account Activities Frequently

   You need to frequently check your account activity and examine your transaction history to identify any unauthorised or suspicious transactions. If any irregularities are detected, immediately report them to your bank.

2. Stay Cautious of Phishing Attempts

   You need to exercise caution when receiving unsolicited emails, text messages, or phone calls requesting personal or account information. Such communications could be phishing attempts by scammers aiming to gain unauthorised access to your bank accounts. It is crucial to never disclose personal or account details in response to these unsolicited messages.

   Remember, reputable banks and financial institutions will never ask for sensitive information through phone calls or emails.

3. Secure Your Passwords

   To enhance the security of Internet banking accounts, generate robust and unique passwords and refrain from sharing these passwords. Additionally, regularly update passwords and activate two-factor authentication.

4. Access Net Banking Only on Trusted Devices

   We encourage you to use only your personal computers or mobile devices, equipped with the latest security software, to access your online banking accounts. Avoid using public or shared devices for online banking, as they may not be secure.

5. Always Type Your Banking URL

   Typing your bank's URL directly into your browser's address bar is safer than clicking on links provided in emails. Fraudsters often send emails containing links to fake websites that closely mimic the appearance of legitimate bank websites. Entering your login details on these fraudulent sites can lead to unauthorised access to your account and potential theft of your money. When logging in, always check for 'https://' in the URL and verify that you are on your bank’s genuine website.

Get Convenient with Internet Banking!

Internet banking comes with tons of advantages to manage your personal finances. When you take proper security measures, you can also take complete advantage of online banking services. With Freo’s digital banking solutions, you can also make the best of net banking with ease and security.

FAQs

1. Is internet banking safe?

   Net banking is typically secure due to the advanced technology banks employ to safeguard customer data. Furthermore, accessing net banking requires a user ID and password, providing additional protection.

2. Are there any charges for internet banking?

   In most cases, banks do not charge for using Internet banking services.

3. Is it necessary to visit the branch to register for net banking?

   For joint account holders, most banks in India typically advise visiting a branch to establish net banking credentials for both account holders.

4. What is a User ID in net banking?

   A User ID is a unique identifier the bank provides that allows customers to access the net banking system. This User ID can typically be found in your bank passbook or statement. If you have trouble locating it, please contact your local bank branch for assistance.

5. Do I require an ATM card to access online banking?

   You do not necessarily require an ATM card for net banking. However, in many instances, you may need to provide your ATM card details to establish your account or update your banking password.