1. MEANING OF E-BANKING.

E-banking, or electronic banking, refers to the use of electronic means to conduct banking
transactions and activities over the internet. It allows customers to perform a variety of banking
functions, such as checking account balances, transferring money, paying bills, applying for loans, and
managing investments, without needing to visit a physical bank branch.

E-banking is accessible through various devices, including computers, smartphones, and

tablets, making banking more convenient and available 24/7. It's also known as online banking, internet
banking, or digital banking.

2. DEFINITION OF E-BANKING.

E-banking, or electronic banking, is defined as the delivery of banking services and products
through electronic channels, primarily the internet. It allows customers to perform financial
transactions and access banking services online, such as checking account balances, transferring funds,
paying bills, and managing investments, without the need for physical interaction with a bank branch.

3. E-BANKING FEATURES.

Key features include:

• Account Management: Customers can view their account balances, transaction history, and
detailed statements.
• Funds Transfer: Users can transfer money between their own accounts or to other bank
accounts, both domestically and internationally.
• Bill Payments: E-banking allows for the easy payment of utility bills, credit card bills, and
other recurring payments.
• Mobile Banking: Access to banking services through smartphone apps, enabling banking on
the go.
• Loan Applications: Customers can apply for personal loans, mortgages, or other types of credit
online.
• Deposit Services: Remote deposit options, including check scanning and depositing through a
mobile device.
• Notifications and Alerts: Customizable alerts for account activity, low balances, large
transactions, or due dates.
 • Security Features: Use of multi-factor authentication, encryption, and secure login systems to
protect users’ data and transactions.
• Customer Support: Access to virtual customer service via chatbots, emails, or 24/7 helplines.
• Investment and Portfolio Management: Tools for managing investments, tracking market
trends, and trading stocks or mutual funds.
• Personal Finance Tools: Budgeting and expense tracking features to help users manage their
finances effectively.
• Scheduled Transactions: Options to set up automated or recurring transfers and payments.
• Card Services: Ability to request new cards, report lost or stolen cards, and manage card limits
or security settings.
4. E-BANKING CHANNELS

These channels include:

• Internet Banking (Online Banking): Accessible through web browsers on desktops, laptops,
or tablets. It allows users to log in to their bank's website and perform banking transactions.
• Mobile Banking: Banking apps designed for smartphones and tablets. Mobile banking offers
features like mobile check deposits, funds transfers, and bill payments, optimized for smaller
screens and convenience on the go.
• Automated Teller Machines (ATMs): Though primarily used for cash withdrawals and
deposits, ATMs also provide e-banking services like account inquiries, fund transfers, and bill
payments.
• Telephone Banking: Provides customers with banking services through automated voice
systems or by speaking to customer service representatives over the phone.
• SMS Banking: Allows users to perform simple banking functions by sending predefined text
commands to their bank. This channel is often used for balance inquiries, transaction alerts, and
mini statements.
• Interactive Voice Response (IVR): A telephonic system where users interact with an
automated service to conduct banking transactions using voice commands or keypad inputs.
• Banking Kiosks
• Chatbots and Virtual Assistants
• Email Banking
5. IFSC NUMBER

Indian Financial System Code is an alphanumeric code used to uniquely identify a bank branch
in India for electronic payment applications like Real Time Gross Settlement (RTGS), National
Electronic Funds Transfer (NEFT), and Immediate Payment Service (IMPS). It ensures that electronic
funds are transferred to the correct bank and branch.

Structure of an IFSC Number:

An IFSC code consists of 11 characters, formatted as follows:

First 4 characters: Represent the bank code (e.g., "SBIN" for State Bank of India).

5th character: Is always "0", reserved for future use.

Last 6 characters: Represent the branch code, which is unique to each branch of the bank.

6. ATM

Automated Teller Machine. It is a self-service electronic banking device that allows customers
to perform basic financial transactions, such as withdrawing cash, depositing money, checking account
balances, and transferring funds between accounts, without the need for direct interaction with a bank
teller.

ATMs are typically available 24/7 and are located in various public places like bank branches,
shopping malls, airports, and convenience stores, providing customers with convenient access to
banking services.

7. CHARACTERS OF ATM

An ATM (Automated Teller Machine) typically involves a PIN (Personal Identification

Number) and a card (ATM or debit card) that the user inserts to access their banking services. However,
when you're referring to "ATM - Characters," it may relate to two possible things:

• ATM Card Number: The number printed on an ATM or debit card usually has 16 digits, often
grouped into the following sections:
• First 6 digits: Bank Identification Number (BIN) – Identifies the bank or financial institution
that issued the card.
 • Next 9 digits: Personal Account Number (PAN) – Uniquely identifies the user's account
within the bank.
• Last digit: Check digit – Used for verifying the authenticity of the card number.
• ATM PIN (Personal Identification Number): This is a 4-digit or sometimes 6-digit numeric
code that the user enters when using the ATM for security and identity verification.
• Card Expiry Date: ATM cards also feature an expiry date, typically displayed as a MM/YY
format, indicating the card’s validity period.
• CVV/CVC: The CVV (Card Verification Value) or CVC (Card Verification Code) is a 3-digit
code usually printed on the back of the card (for security during online or card-not-present
transactions).
8. FEATURES OF AN ATM (AUTOMATED TELLER MACHINE):
• Cash Withdrawal: ATMs allow users to withdraw cash from their bank accounts, usually up
to a specified limit.
• Balance Inquiry: Users can check their account balance without needing to visit a bank branch.
• Fund Transfer: Many ATMs allow users to transfer funds between their own accounts or to
other bank accounts.
• Deposit Services: Some ATMs support cash and cheque deposits, automatically crediting the
funds into the user’s account.
• PIN Change: Users can change their Personal Identification Number (PIN) directly at the ATM
for enhanced security.
• Mini Statement: ATMs provide a printout of recent transactions, showing the last few deposits,
withdrawals, and balance updates.
• Bill Payments: Certain ATMs offer services for paying utility bills, credit card bills, and other
payments.
• Cardless Transactions: Some ATMs allow cardless transactions, where users can withdraw
cash using a QR code or a mobile banking app.
• Multilingual Support: Many ATMs support multiple languages, making them more accessible
to users from different linguistic backgrounds.
• Security Features: ATMs are equipped with security mechanisms like cameras, encryption
technology, and shields for user privacy during transactions.
• Cheque Book Request: Some ATMs allow customers to request a new cheque book for their
accounts.
 • Receipt Printing: ATMs can print transaction receipts for users to keep a record of their
banking activities.
9. INTERNET BANKING

Internet Banking, also known as Online Banking, refers to the use of the internet to carry out
financial transactions and access banking services. Through internet banking, customers can manage
their bank accounts, transfer funds, pay bills, apply for loans, and perform other financial activities
from anywhere in the world, using a computer, smartphone, or tablet. It eliminates the need for physical
visits to a bank branch, offering 24/7 convenience.

Key Features of Internet Banking:

• Account Management: Check balances, view statements, and monitor account activities.
• Funds Transfer: Transfer money between accounts, both within the same bank and to other
banks.
• Bill Payments: Pay utility bills, credit card bills, taxes, and more.
• Loan Services: Apply for personal loans, mortgages, and track loan status.
• Investment Management: Manage mutual funds, stocks, and other investments online.
• Security: Use of encryption, multi-factor authentication, and secure login features to protect
user information.
10. BENEFITS OF INTERNET BANKING:
• Convenience: Access your account from anywhere at any time.
• Speed: Transactions are processed instantly or within a short time frame.
• Cost-effective: Many internet banking services are free or come with lower fees compared to
in-branch transactions.
• Paperless: Reduces the need for paper, helping the environment and providing digital records
of all activities.
11. NET BANKING ACCOUNT OPENING

Net Banking Account Opening refers to the process of opening a bank account online through
a bank's internet banking platform. This process allows customers to open and manage their bank
accounts without needing to physically visit a branch. Most banks offer the ability to open an account
online via their website or mobile app.
Steps to Open a Net Banking Account:

Visit the Bank’s Website or Mobile App:

Go to the official website or open the mobile banking app of the bank where you want to open the
account.

Select Account Type:

Choose the type of account you wish to open (e.g., savings account, current account, or other
specialized accounts).

Fill in Personal Details:

Enter your personal details, including your name, address, contact information, date of birth, and
employment details.

Provide Identification Documents:

Upload necessary documents for identity verification, such as:

• Government-issued photo ID (Aadhaar, Passport, Voter ID, etc.)

• Proof of address (e.g., utility bills, rent agreements)
• Recent passport-sized photograph

Complete KYC (Know Your Customer):

Most banks require completing KYC formalities. This can be done online by uploading scanned
copies of documents and sometimes through a video call for further verification.

Set Up Online Banking Credentials:

Create login credentials (username and password) for your net banking account. You may also
need to set up security features, such as an OTP (One-Time Password), security questions, or multi-
factor authentication (MFA).

Review & Submit:

Review all the entered information and documents. If everything is correct, submit the
application.
 Account Activation:

After successful verification, the bank will send an account activation confirmation. Some banks might
offer an instant account number and net banking credentials, while others might take a few days to
process the application.

Start Using Net Banking:

Once your account is activated, you can start using internet banking for various services such as fund
transfers, bill payments, and account management.

12. ADVANTAGES OF OPENING A NET BANKING ACCOUNT:

• Convenience: You can open an account from anywhere at any time, avoiding the need to visit
a branch.
• Quick Process: The process is typically faster than traditional account opening methods.
• 24/7 Access: You can access and manage your account anytime through internet banking.
13. SECRECY OF MAINTAINING A ONE-TIME PASSWORD

The secrecy of maintaining a One-Time Password (OTP) is crucial for securing online
transactions and protecting sensitive personal and financial information. OTPs are used as an additional
layer of security, typically in two-factor authentication (2FA), to verify the identity of users during
login or while performing specific actions (e.g., fund transfers, bill payments). To ensure OTPs provide
the maximum level of security, it is important to follow best practices for maintaining their secrecy:

Key Practices for Maintaining OTP Secrecy:

• Do Not Share OTPs:

• Be Wary of Phishing:
• Use Secure Devices:
• Check for Authenticity:
• Limit Access to Your Phone:
• Avoid Delaying OTP Entry:
• Avoid Screen Sharing or Viewing OTPs in Public:
• Do Not Write Down OTPs:
• Notify the Bank or Service Provider in Case of Suspicion:
• Use OTP Apps Instead of SMS (where possible):
14. NET BANKING SERVICES

Net Banking Services, also known as Online Banking, offer a wide range of financial services
that allow customers to manage their bank accounts and perform transactions over the internet. These
services provide the convenience of accessing banking functions 24/7, without needing to visit a
physical bank branch. Below are the common net banking services available:

1. Account Management

• View Account Balances: Check your current balance and available funds in real-time.
• Transaction History: Access detailed statements and recent transactions.
• Mini Statements: Get a summary of recent transactions on your account.
• Account Details: Update your personal details, such as contact information or address, and view
account-specific information.

2. Funds Transfer

• Internal Transfers: Transfer money between your accounts within the same bank.
• External Transfers: Transfer money to accounts at different banks via services like NEFT,
RTGS, or IMPS.
• Scheduled Transfers: Set up one-time or recurring transfers to other accounts or recipients.
• UPI Transfers: Use Unified Payments Interface (UPI) for fast, real-time transfers between
different banks using mobile numbers.

3. Bill Payments

• Utility Bill Payments: Pay electricity, water, gas, and telephone bills online.
• Credit Card Payments: Pay credit card bills directly from your bank account.
• Taxes: Pay taxes like income tax, property tax, and others.
• Subscription Services: Set up automatic payments for services like internet, insurance
premiums, or memberships.

4. Loans & Credit Services

• Loan Applications: Apply for personal loans, home loans, car loans, or business loans.
• Loan Repayment: Manage loan repayments and view the loan status.
 • EMI Calculators: Use online calculators to determine loan EMIs (Equated Monthly
Instalments).
• Credit Card Services: Apply for or manage credit cards, check credit card statements, and make
payments.

5. Investment Services

• Mutual Funds: Invest in mutual funds, track the performance, and make lump sum or SIP
(Systematic Investment Plan) investments.
• Stocks and Bonds: Buy and sell stocks, bonds, or other securities through the bank's online
trading platform.
• Fixed Deposits (FD): Open or manage fixed deposit accounts with various tenures and interest
rates.
• Recurring Deposits (RD): Start recurring deposit accounts for regular savings.

6. Mobile and Digital Wallets

• Linking to Wallets: Connect your bank account to digital wallets for easy payments and
transfers.
• Mobile Recharge: Recharge your mobile phone, DTH, and data plans through net banking
services.

7. Cheque Book Request

• Request Cheque Books: Order new cheque books or request additional cheque leaves online.
• Stop Payment: Initiate stop payment requests for a lost or stolen cheque.

8. Account Security Features

• PIN and Password Management: Change your internet banking password and security PIN.
• Two-Factor Authentication: Enable additional security layers, such as OTP (One-Time
Password) or biometric login.
• Account Alerts: Set up alerts for transactions, balance changes, or other account activities to
stay informed.
 9. Tax and Financial Planning

• Tax Filing Assistance: Get help with filing income tax returns and accessing tax-related
documents.
• Investment Portfolio: Track and manage your investment portfolio and its performance.

10. Customer Support

• Online Chat: Many banks offer customer support through online chat on their net banking
platform.
• Service Requests: Submit requests for services such as account inquiries, dispute resolutions,
or changes in personal details.

11. ATM and Debit Card Services

• ATM/Debit Card Management: Request new cards, block a lost card, or set card limits for
online transactions.

12. Cross-Border Services

• Foreign Exchange: Apply for foreign currency exchange for international travel or remittances.
• International Transfers: Transfer money abroad or receive international payments via the bank’s
net banking platform.
15. BENEFITS OF NET BANKING SERVICES:
• Convenience: Access to banking services at any time from anywhere.
• Speed: Instant transfers, bill payments, and access to funds.
• Cost-Effective: Reduced need for physical visits to branches and lower transaction fees.
• Security: Enhanced security with encryption, multi-factor authentication, and account
monitoring.
• Real-Time Updates: Instant updates on transactions, balances, and other activities.
16. FUND TRANSFER

Fund Transfer refers to the process of moving money from one account to another. This can be
done between accounts in the same bank or to accounts in different banks. Fund transfers are widely
used for payments, settling debts, sending money to friends or family, or transferring money between
 personal accounts. Most fund transfers are conducted online via net banking, mobile banking, or ATMs,
but they can also occur through physical bank branches.

17. Types of Fund Transfer Methods:

1. NEFT (National Electronic Funds Transfer):

Description: NEFT is a widely used electronic fund transfer system in India that allows customers to
transfer money between different banks and branches.

Key Features:

• Available 24/7 in India (since 2020, including holidays).

• Transaction speed varies from a few hours to a day, depending on the bank's processing time.
• Suitable for one-time or bulk payments.
• Use Cases: Paying bills, sending money to family members, etc.

2. RTGS (Real-Time Gross Settlement):

Description: RTGS is an instant fund transfer system used for high-value transactions between banks.

Key Features:

• Transactions are settled in real-time, meaning the transfer occurs immediately.

• It is generally used for large transactions (minimum amount usually starts from ₹2 lakh in
India).
• Available only during working hours on business days.
• Use Cases: Large business payments, urgent transfers, inter-bank settlements.

3. IMPS (Immediate Payment Service):

Description: IMPS allows real-time interbank transfers, available 24/7.

Key Features:

• Immediate, round-the-clock transfer of funds, even on holidays.

• Available through mobile banking, internet banking, or ATMs.
• Useful for small and medium-sized transfers.
 • Use Cases: Quick transfers to family, paying for services, small business payments.

4. UPI (Unified Payments Interface):

Description: UPI is a mobile-based payment system that enables instant fund transfers between
different banks.

Key Features:

• Operates 24/7 and allows for instant payments using mobile apps (e.g., PhonePe, Google Pay,
Paytm).
• Transfers money by linking the user’s bank account with a virtual payment address (VPA).
• No need for details like IFSC code or bank account number for transfers.
• Use Cases: Peer-to-peer transfers, paying for goods and services, quick payments in mobile
apps.

5. Bank-to-Bank Transfer:

Description: A general term for transferring funds from one bank account to another, within the same
bank or between different banks.

Key Features:

• Can be done through internet banking, mobile apps, or visiting the bank branch.
• Transfer can be done through NEFT, RTGS, IMPS, or UPI depending on the transaction
requirements.
• Use Cases: Transferring money between personal accounts, paying bills, sending money to
others.

6. Wire Transfer (International Fund Transfer):

Description: A wire transfer is used to send money internationally from one bank account to another.

Key Features:

• Typically used for cross-border transactions.

• Faster than traditional bank drafts or checks.
 • Can be done via banks or money transfer services (e.g., Western Union, PayPal).
• Use Cases: Sending money abroad, paying international invoices, family remittances.
7. Direct Debit / Standing Instructions:

Description: This method allows recurring payments, where funds are automatically transferred from
one account to another at regular intervals.

Key Features:

• Useful for monthly bill payments, loan repayments, subscriptions, or salary deposits.
• Can be set up for automatic withdrawals on specific dates.
• Use Cases: Utility bills, loan EMIs, insurance premiums, subscription services.
18. PROCESS OF FUND TRANSFER (VIA NET BANKING OR MOBILE BANKING):
• Log into Online Banking: Access your net banking or mobile banking app using secure
credentials (username, password, and possibly OTP).
• Select Transfer Option: Choose the type of transfer (e.g., NEFT, IMPS, RTGS, UPI).
• Enter Details: Provide the recipient's bank account number, IFSC code (for NEFT/RTGS),
mobile number (for UPI/IMPS), and the amount you wish to transfer.
• Verify Details: Double-check the recipient's details to avoid errors.
• Authorize Transfer: Confirm the transfer, usually with an OTP or additional security
verification.
• Transaction Confirmation: After completing the transfer, you will receive a confirmation
receipt (either on the screen or via email/SMS) with the transaction details.
19. ADVANTAGES OF FUND TRANSFER:
• Convenience: Transfer funds anytime and from anywhere, without visiting a branch.
• Speed: Real-time or near-instantaneous transfers (especially with IMPS and UPI).
• Security: Encrypted transactions and secure login methods ensure safety.
• Cost-Effective: Many fund transfer methods are free or have minimal fees.
20. DISADVANTAGES OF FUND TRANSFER:
• Transfer Limits: Some methods (e.g., NEFT, IMPS) may have limits on the amount you can
transfer in a single transaction.
• Transaction Fees: Some methods (e.g., RTGS) may involve a fee, especially for high-value
transactions.
• Technical Issues: Errors can occur due to connectivity problems or system outages.
 • Fund transfers have become an essential tool for personal and business banking, offering ease
of use, security, and speed for conducting financial transactions.
21. NEFT

NEFT (National Electronic Funds Transfer) is an electronic payment system that allows
individuals and businesses to transfer money from one bank account to another within India. NEFT is
used for both one-time payments and bulk transactions and operates on a deferred settlement basis,
meaning the transactions are processed in batches at specific intervals.

Key Features of NEFT:

• One-to-One Transfer: NEFT allows individuals or businesses to transfer money between

accounts in different banks, including transfers from one bank to another.
• Batch Processing: Transactions are processed in batches, and funds are credited to the
recipient’s account within a few hours, depending on the batch timing.
• 24/7 Availability: Since 2020, NEFT operates 24/7, including on holidays, making it available
at any time for transactions.
• No Minimum or Maximum Limit: There is typically no minimum limit for NEFT
transactions, but banks may set maximum limits for different types of transactions.
• Low Cost: NEFT transactions are usually low-cost or free for both personal and business
transactions, depending on the bank’s policies.
22. USES OF NEFT:
• Transferring money to another person or business.
• Paying for bills, loans, or services.
• Sending money to family or friends.
• NEFT is widely used because it’s secure, cost-effective, and reliable for domestic bank
transfers.
23. PRIMARY FUNCTIONS OF NEFT:

1. Fund Transfer Between Different Banks

2. Batch Processing of Transactions

• Deferred Settlement:
• Transaction Timing:
3. Cross-Bank Transfers

• Interbank Transactions:

4. Secure and Reliable

• Security
• Regulated by RBI:

5. Payment for Various Services

• Utility Bill Payments:

• Loan Repayments:
• Tax Payments:

6. No Minimum Transfer Limit

• Maximum Transfer Limits: Banks may impose upper limits for individual transactions,
particularly for retail transactions. Larger transactions may be subject to additional security
checks.

7. Available on Multiple Platforms

• Internet Banking:
• Mobile Banking:
• Bank Branches:

8. Domestic Transactions

• India-Centric: NEFT is exclusively for domestic transfers within India, and it doesn't support
international transactions. For international transfers, banks use other methods like SWIFT.

9. Tracking and Status Updates

• Transaction Confirmation:
• Confirmation Messages:

10. 24/7 Availability (Since 2020)

• Around-the-Clock Transactions:
24. ADVANTAGES OF NEFT:
• Convenience: Available anytime, anywhere via internet or mobile banking.
• Low Cost: Most banks offer NEFT transfers with minimal or no charges, especially for smaller
transactions.
• Transparency: NEFT allows customers to track and verify their transactions using reference
numbers.
• Accessibility: Available for both individuals and businesses for transferring money.
25. LIMITATIONS OF NEFT
• Batch Processing: As it works in batches, NEFT transfers are not instantaneous and may take
a few hours to process.
• Transaction Fees: Some banks may charge a fee for processing NEFT transactions, especially
for higher-value transactions.
26. NEFT SERVICES PROVIDED BY BANKS:

1. Fund Transfer Services

• Interbank Transfers:
• One-Time Transfers:
• Bulk Transfers:

2. Utility Bill Payments

• Electricity Bills:
• Water and Gas Bills:
• Telecommunication Bills:

3. Loan Repayments

• EMI Payments:
• Home Loan, Personal Loan, Car Loan Payments:

4. Payment for Taxes

• Income Tax Payments:

• GST Payments:
5. Investment Transactions

• Mutual Fund Investments:

• Stock Market Investments:

6. Government Payments

• Subsidy Transfers:
• Government Services:

7. Cross-Border Payments (Domestic Only)

While NEFT is used for domestic transfers, it can be an intermediary step for some cross-border
transactions, especially for payments routed through international accounts (not for direct foreign
transfers).

8. Salary Payments

• Salary Disbursements:
• Wages and Bonuses:

9. Recurring Payments (Standing Instructions)

• Automated Transfers:
• Subscription Services:

10. Online Shopping Payments

Some online merchants and e-commerce websites may accept NEFT payments for purchases.
Buyers can transfer funds directly from their bank accounts to complete the payment for goods and
services purchased.

11. Donations and Charitable Payments

Many charitable organizations and NGOs provide NEFT as a mode of donation. Individuals
can directly transfer money to the organization’s account to contribute to causes or charity.
 12. Payment for Insurance Premiums

• Life and Health Insurance Premiums:

• Renewals:

13. Refunds and Reimbursements

• Refund Transfers:
• Reimbursement Payments:

14. Educational Fee Payments

• School and College Fees:

• Training Programs and Workshops:

15. Transaction Tracking and Status

• Transaction Monitoring:
• Confirmation:
27. ADVANTAGES OF NEFT SERVICES:
• Cost-Effective:
• Wide Accessibility
• Secure and Reliable:
• Fast and Convenient:
28. RTGS

RTGS (Real-Time Gross Settlement) is an electronic payment system that enables the transfer
of large sums of money from one bank to another in real time. It is used for high-value transactions
and settles payments individually, without batching, which means the transfer happens instantly when
initiated.

Key Features of RTGS:

• Real-Time Settlement:
• Large-Value Transactions: In India, the minimum amount for an RTGS transaction is ₹2 lakh,
and there is no maximum limit for transfers.
• Gross Settlement:
 • Operating Hours: RTGS operates during the bank’s business hours, typically from 7 AM to 6
PM on weekdays. It is not available on weekends and public holidays.
• Secure and Regulated:
• Used for Urgent Payments:
29. FUNCTIONS OF RTGS:

1. Real-Time Settlement of Payments

• Instant Processing:
• No Batching:

2. High-Value Fund Transfers

• Large Transactions:
• Bulk Payments for Businesses:

3. Cross-Bank Transfers

• Bank-to-Bank Transfers:
• Corporate Transactions:

4. Secure and Regulated Payments

• Security:
• Monitoring:

5. Settlement of Interbank Liabilities

• Clearing Interbank Transactions:

6. Settlement of Government Transactions

• Government Payments
• Public Sector:

7. Time-Sensitive Payments

• Urgent Payments:
• Real-Time Liquidity Management:
 8. Settlement of Securities Transactions

• Bond and Securities Settlement:

9. Efficient Payment System for Large Payments

• Corporate and Institutional Use:

10. Bank Account Reconciliation

• Real-Time Reconciliation:

11. Foreign Exchange Payments (Domestic Only)

30. RTGS OPERATING HOURS:

RTGS is available during business hours, typically from 7 AM to 6 PM (weekdays), and

transactions are processed in real time during these hours. However, it is not available on weekends or
public holidays.

Key Benefits of RTGS:

• Immediate Settlement:
• High Security:
• No Batching:
• Transparency:
• Large Value Transactions:
31. LIMITATIONS OF RTGS:
• Minimum Transaction Limit: RTGS has a minimum transaction limit (typically ₹2 lakh in
India), making it unsuitable for smaller payments.
• Not Available 24/7: RTGS operates only during bank working hours and is unavailable on
weekends or public holidays.
• Processing Fees: While the fee is generally low, some banks may charge a fee for using the
RTGS service.
32. RTGS TRANSACTIONS WORK AND THEIR KEY ASPECTS:

Real-Time Processing
 • Instant Transfer:
• Immediate Settlement:

High-Value Transactions

• Minimum Amount: ₹2 lakh in India.

• There is no maximum limit for RTGS transactions

Secure and Regulated System

• RTGS transactions are highly secure

• Regulated by the RBI

Settlement on Gross Basis

• Gross Settlement:
• No Netting or Batching:
33. HOW RTGS TRANSACTIONS WORK
• Initiating the RTGS Transaction
• Through Bank's Channels:
• Information Required:
• Beneficiary's name and account number
• Beneficiary’s bank name and branch
• IFSC code of the beneficiary's bank branch
• The amount to be transferred
• A description or purpose for the transfer (optional)
• Transaction Processing
• Once the payment instruction is submitted, the bank verifies the details and processes the
transaction in real time.
• The transaction is forwarded to the RTGS central system operated by the Reserve Bank of India
(RBI) for settlement.
• The funds are immediately transferred to the beneficiary's bank account.
• Confirmation and Receipt
• After the transaction is processed, both the sender and the recipient receive confirmation
messages, usually via SMS or email, along with a reference number for the transaction.
 • The transaction details, such as the date, time, amount, and reference number, are available for
tracking and record-keeping purposes.
• Account Credit
• The beneficiary's bank receives the payment in real time and credits the amount to their account
immediately.
• This ensures that the funds are available for use without delay, making RTGS ideal for urgent
payments.
34. ADVANTAGES OF RTGS TRANSACTIONS
• Immediate Transfer:
• Large Value Payments:
• High Security:
• Transparency:
• 24/7 Availability:
• No Risk of Batching Delays:
35. TYPES OF RTGS TRANSACTIONS
• Individual RTGS Transactions
• One-Time Transfer:
• Bill Payments:
• Bulk Corporate Transactions
• Salary Disbursements:
• Vendor Payments:
• Government and Institutional Transactions
• Government Payments:
• Bank-to-Bank Settlements:
36. RTGS TRANSACTION FEES

While RTGS transactions are generally considered cost-effective for large-value transfers,
banks may charge a fee based on the transfer amount. The fees typically range from ₹25 to ₹50 for
transactions under ₹2 lakh and can be higher for larger amounts. The specific charges depend on the
bank’s fee structure.
SFMS

SFMS (Structured Financial Messaging System) is a secure and efficient messaging platform
used by financial institutions for electronic communication related to financial transactions in India. It
facilitates the transmission of secure financial messages such as fund transfers, payment instructions,
and other financial communication between banks, financial institutions, and regulatory authorities.

To ensure the confidentiality, integrity, and availability of financial data transmitted through SFMS,
several security features are incorporated into the system:

Key Security Features of SFMS

End-to-End Encryption

• Data Protection:
• Secure Channels:

Message Authentication

• Message Integrity:
• Digital Signatures:

Access Control

• User Authentication
• Role-Based Access Control (RBAC):

Non-Repudiation

• Transaction Accountability:
• Audit Trails:

Data Integrity and Error Detection

• Checksums and Hash Functions:

• Message Validation:

Firewall and Intrusion Detection Systems

 • Network Security:
• Network Segmentation:

Real-Time Monitoring and Alerts

• Continuous Monitoring:
• Automated Alerts:

Backup and Disaster Recovery

• Data Backup:
• Disaster Recovery Plan:

Compliance with Regulatory Standards

• Regulatory Compliance:
• ISO 20022 Compliance:

Security Audits and Penetration Testing

• Regular Security Audits:

• Penetration Testing:
37. KEY FORMATS OF SFMS

Here are some of the commonly used formats in SFMS:

1. IFX Format (Indian Financial Exchange)

2. RTGS Format
3. NEFT Format (National Electronic Funds Transfer)
4. Demand Draft (DD) Message Format
5. Cheque Truncation System (CTS) Format
6. SWIFT Message Format
7. Corporate Payment Message Format
8. M-T Messages (Mobile Banking)

Key Standards Followed in SFMS Formats

• ISO 20022:
 • XML:
• MT:

38. RAS

RAS (Risk Assessment System) is a critical part of the regulatory and operational framework
for financial institutions, particularly in areas such as banking, insurance, and investment. RAS is used
to assess, monitor, and mitigate risks related to the organization’s operations, including credit, market,
operational, and liquidity risks. RAS helps ensure that the institution is complying with regulatory
requirements, maintains adequate risk management practices, and can handle potential financial stress.

Key Requirements of a Risk Assessment System (RAS)

Here are the essential requirements for an effective Risk Assessment System (RAS):

1. Risk Identification

2. Risk Measurement and Quantification

3. Risk Mitigation Strategies

4. Regulatory Compliance

5. Technology Infrastructure

6. Reporting and Communication

7. Stress Testing and Scenario Analysis

8. Risk Appetite and Tolerance

9. Continuous Monitoring and Review

10. Training and Capacity Building

39. SECURITY FEATURES OF A RISK ASSESSMENT SYSTEM (RAS):

1. Data Encryption

2. Access Control
 3. Audit Trails and Logging

4. Data Integrity and Validation

5. Intrusion Detection and Prevention

6. User Authentication and Identity Management

7. Backup and Disaster Recovery

8. Compliance with Regulatory Standards

9. Access to Sensitive Data (Data Masking)

10. Risk-Based Monitoring and Alerts

11. Third-Party Risk Management

40. INFORMATION TECHNOLOGY ACT, 2000

The Information Technology Act, 2000 (IT Act) is an important legislation in India that provides
a legal framework for the regulation of electronic commerce, digital transactions, cybercrimes, and the
protection of information. The Act was introduced to facilitate the growth of electronic commerce in
India and to address issues related to cybercrimes and electronic transactions. The IT Act is intended
to give recognition to electronic records, digital signatures, and online transactions, and to ensure that
the legal framework aligns with modern digital technology.

41. LEGAL STATUS OF THE IT ACT, 2000

Official Recognition of Electronic Transactions:

• The IT Act, 2000 gives legal recognition to electronic transactions and digital signatures.
• Section 4 of the IT Act specifically recognizes electronic records and digital signatures as valid
forms of communication and authentication, giving them the same legal status as their paper
counterparts.

Cybercrimes and Penalties:

• The IT Act defines various cybercrimes and prescribes penalties for offenses such as hacking,
identity theft, cyberstalking, and the spreading of malware.
 • Sections 43 and 66 of the IT Act deal with penalties for hacking and unauthorized access, while
Section 66C and 66D address penalties for identity theft and fraud.
• The Act has been amended to expand the definition of cybercrimes and to strengthen penalties.

Protection of Sensitive Information:

• The IT Act also includes provisions for the protection of personal data and sensitive
information, especially for businesses and entities that handle such data.
• Section 43A of the IT Act mandates that companies must protect sensitive personal data and
implement reasonable security practices. Failure to do so can result in penalties for the
company.

Cyber Appellate Tribunal (CAT):

• The Act established the Cyber Appellate Tribunal (CAT), a specialized body for the
adjudication of disputes related to cybercrimes and violations of the IT Act.
• The decisions of the Tribunal can be appealed in the High Courts.

Electronic Governance:

• The IT Act empowers the government to facilitate electronic governance, including the
recognition of electronic documents, signatures, and the establishment of a secure electronic
environment for public services.
• It also encourages the establishment of electronic records for government documents and legal
records, which facilitates e-governance initiatives across India.

Amendments and Updates:

• The Information Technology (Amendment) Act, 2008 expanded the scope of the original Act
to address new challenges in the digital landscape, including the introduction of provisions
related to:
• Cyber terrorism
• Data protection
• Online child pornography
• Interception of electronic communication
 • The amendments have strengthened the framework to deal with emerging cybercrimes and
ensure better protection for online transactions.

Legal Framework for E-Commerce:

• The IT Act provides the legal foundation for the operation of electronic contracts and e-
commerce.
• The Act ensures that e-commerce transactions, including online contracts and agreements, are
legally enforceable and can be used in a court of law as evidence.

Adoption of International Standards:

• The IT Act aligns with global standards for digital transactions and cybersecurity, particularly
UN model laws and international treaties.
• It also facilitates India’s adoption of international cybersecurity and data protection standards.