an analysis of opportunities and risk of e-banking in rural areas

1. JASNA. P T
M.PHIL SCHOLAR
DEPT. OF ECONOMICS
GANDHIGRAM INSTITUTE-DU
AN ANALYSIS OF
OPPORTUNITIES AND RISK OF
E-BANKING IN RURAL AREAS

2. INTRODUCTION
 The introduction of e-banking in banking business is one of the most
important innovations of the 20th century. It provides a large
number of opportunities to the bank itself as well as the customers.
 The introduction of electronic banking has changed manual and
traditional forms of banking business and is being replaced by the
sophisticated technology that is based on automation and
interconnection of computers and other electronic devices.
 Generally speaking, e-banking means providing banking products
and services directly to customers through electronic and interactive
communication channel.

3. OBJECTIVES OF THE STUDY
 The study gives an overview of e-banking services in rural area,
especially potential opportunities and challenges. The important
objectives of the present study are:-
1. To give an overview of e-banking services and to
identify potential opportunities.
2. To identify the challenges of e-banking services in rural areas.

4. METHODOLOGY
 The present study is descriptive one. The study is entirely based
on secondary data. The data were collected from various articles,
books, journals, thesis and websites related to e-banking.
Wherever possible and relevant, the existing and comprehensive
studies have also been corroborated for a clear understanding and
inference on the issue under investigation.

5. What is e-banking?
 E-banking is the application of electronic devices in banking
activities. The electronic devices like ATM’s, mobile banking,
internet banking, home banking etc are widely used by people in
daily banking activities.
 The Basel Committee defines e-banking as “ The provision of
retail and small value banking products and services through
electronic channel , such products and services can include
deposit taking , lending , account management , the provision of
financial advice , electronic bill payment products and services
such as electronic money “

6. PRODUCTS AND SERVICES OF E-BANKING
 The electronic banking provides wide variety of products and
services to the customers, some of them are
• Automated Teller Machine
• Mobile Banking
• Phone Banking
• Internet Banking
• Electronic Fund Transfer
• Debit card
• Credit card etc.,

7. OPPORTUNITIES OF E-BANKING IN RURAL
AREAS
 The e-banking provides wide variety of opportunity or benefits to
bank itself and also provide more facilities and services to
customers. It increases the organizational efficiency, easier
expansion, cost reduction, attracting high value of customer and
e-marketing.
 Lower cost for accessing and using the bank service
 It save the time and increase comfortabilty
 Transaction can be made at 24 hours without going bank
 Quick and continues access to information

8. Cont…
 Globalization of trade in rural areas are also possible
 Growth in customer number and people use more banking service
 Better management of cash diffusion is possible
 The rural society has benefited from the development of e-
finance

9. CHALLENGES OF E-BANKING IN RURAL AREAS
 Comparing to urban people or urban area the usage of net
banking facility is low in rural areas. The main reason for low
usage of e-banking in rural area are as follows:
 Psychological challenges
 Operational challenges
 Security challenges
 Lack of education
 Lack of adequate infrastructural facilities
 Lack of awareness about e-banking and internet
 Lack of knowledge about information technology
 Fear to perform bank transactions on machine
 Economically backward situation.

10. CONCLUSION
 E-banking offers several benefits to rural people, along with thus
benefits some problems are being addressed. Problems such as
lack of securities, lack of acceptance and lack of knowledge
about technologies have farfetched to the development of e-
banking services in rural area. Through an institutional
framework is required for overcoming this problem. The banks
can provide awareness classes and training to people to reduce
problems related to e-banking.

11. REFERENCES
 shodhganga.inflibnet.ac.in/bitstream/10603/28610/9/09_chapter
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 shodhganga.inflibnet.ac.in/bitstream/10603/10160/11/11_part%2
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 http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.259.18
54&rep=rep1&typr=pdf. Date assessed 6/01/2016
 www.researchmanuscripts.com/isociety2012/65.pdf
 shodhganga.inflibnet.ac.in/bitstream/10603/3563/.../13_chapter
%205.pd
 Ing.Adriana Chovanova (2006) “ Forms of Electronic Banking”.
www.nbs.sk/_img/Documents/BIATEC/BIA06_06/22_25.pdf.
retrived on 6/01/2016