What is Internet Banking

Internet Banking is also known as Online Banking or net banking which is used to conduct financial transactions through the internet using a computer or mobile device. In this article we will discuss in detail What is Internet Banking, its features, advantages.

Internet Banking offers almost every service that we were doing it before by visiting the bank branch like fund transfers, checking account balance, deposits, branch transfer, bill payment, and many more.

The government demonetization in 2016 played an important role in making things digitally. Nowadays nearly all the traditional banks offer online banking services to their customers even without their physical existence.

Read Also What is Green PIN

How does Internet Banking Work?

As you may get a basic idea about internet banking from the above article next thing to understand is how does it work?

In order to do any transactions online, you need a personal computer, laptop, mobile with an internet connection. after having all this you just need to visit the bank website, log in to your internet banking account and use all the services offered by the bank.

How to Set up Internet Banking?

In order to use internet banking for any online transactions first you need to have an account with the bank. Most bank have now the facility to open a new account online.

In case if you are using a bank account for a long time you can check with your bank about the process of having an internet bank account.

your bank will send your user name and password after the creation of your account successfully. you can use these credentials to log into your internet banking account for any financial transactions.

Read Also What is KYC and Documents Required for KYC

Features of Online Banking

Though there are various features of online banking, here are the best ones.

  • It provides us the facility to track whatever activities are done in our account without visiting the bank branch.
  • your user ID and Password protects your account from any fraudulent transactions.
  • You can do bill payments like water bills, electricity bill and funds transfers to any accounts.
  • You can order Cheque book as well online from the bank.
  • Recharge of prepaid/Postpaid, DTH, Data Card can be done.
  • It helps us to buy any insurance from the respective bank website or app.
  • It offers the facility to check the account balance any time.
  • We can keep a track of our investments like mutual funds linked to the bank account.

Advantages of Internet Banking

Mentioned below are the advantages of Internet Banking.

  • Accessibility: Access to online banking is available 24*7 throughout the year. Most of the services are no time constraints. users can transfer funds anytime and can check their account balance without waiting for the bank to open.
  • Time Efficient: The Process of online transactions is very fast and can be done within a few minutes. The funds can be transferred to any account in the country just by a few clicks on net banking.
  • Convenience: It is very convenient as you need not stand in a queue. you can do transactions from where you are through online banking. we can book railway ticket, flight ticket, Hotel, etc just by sitting at home.
  • Safe and Secure: Safety and security come with online banking. Funds transfer via NEFT, RTGS, IMPS is fully secured by the transaction ID, user ID, and Password.
  • Tracking Facility: Whatever the transactions you are doing like transfers of funds, withdrawing money through ATM, purchasing anything online, paying any bill, etc all are getting recorded into your account statement. you can show as the proof of transactions if needed anytime

Disadvantage of Internet Banking

There is always some Positive and negative of everything. of course, we have drawbacks also of online banking. Below mentioned are a few of them.

  • Difficult for new users: For novice customers, it’s fairly difficult for the first time to use online banking for any transactions. If there is no one to help them it’s even more difficult to learn things themselves. In India, we have a large number of people who are still using traditional methods to do any transaction. It is because either they scare to use it or do not find it secure.
  • Transactions Security: One of the major drawbacks of online banking is security though it’s protected by different layers of security. No matter how secure our transactions or bank account is but it’s always vulnerable to hackers. Therefore all the customers are advised not to share any confidential data like OTP, PIN, login credentials with anyone.
  • Internet Connectivity: Uninterrupted Internet connections is the basic requirement for any successful online transactions. In case it is slow or servers are down you can not access it hence can not avail of any online services. Therefore there should be a reliable internet connection.
  • Limitations: In an internet banking facility there is some threshold limitation up to which you can transfer money for the day. Even the most ATM has a limitation of withdrawal. In case if you need a large amount of cash you need to visit to get the rest of the amount.

Services Offered by Online Banking

There are many services offered by the bank. As the things are moving digitally more facilities are provided by the banks online. Below are the major ones offered services online.

Balance checkView Bank StatementsBill payment
Funds TransferTop Up & Rechargeopen Fix deposit Account
Insurance Bill paymentCredit Card Bill PaymentManage Debit Card
PPF AccountInvestments and Tradingordering Cheque Book
Mini StatementTransfer of Savings AccountOnline Booking

How to Register for the Internet Banking?

All the account holders have to register for internet banking access with their respective banks. Most of the banks is providing these facilities when you open a new account with them. Below are the steps to get register for online banking.

  • Download the internet banking form from your bank’s website and fill in the details. if it is not available online visit your bank fill the form.
  • Submit the form either Online of Offline.
  • After the Verification of details, you will receive a unique user name/ID and Password in order to access internet banking.

Also Read What is Universal Account Number

Basics of Fund transfers using Internet Banking

Basically there are 3 types of fund transfers done using Online Banking. here you will get a brief idea about them.


It is defined as Real Time Gross Settlement means the continuous settlement of funds on an order by order basis. the payment transactions are not subjected to any waiting period.

  • ‘Real-time’ means the processing of instructions at the time they receive rather than the later time, and ‘Gross Settlement’ means the settlement of money transfer done via instructions by instructions.
  • RTGS is tracked by RBI hence the final payment transferred is irrevocable.
  • The minimum amount transferred through RTGS is 2 lakhs though there are no upper limits. this system is mainly for large value transactions.


It Stands for National Electronic Fund Transfer. It is a nationwide fund transfer facility.

  • Using NEFT Individuals, firms, and corporates can transfer funds from any bank branch to any individual, firm, or corporate that has an account with any other bank branch in the country.
  • Services are available 24*7 on internet banking though it might be time-restricted at the bank branch.


The full form of IMPS is an Immediate Payment Service that provides real-time funds transfer.

  • It is an interbank electronic fund transfer that could be accessed on various platforms like mobile, internet, ATM 24*7.
  • IMPS is highly economical and safe way of online fund transfer.
  • It does not require the payee account number, IFSC code, etc. only a mobile number is needed in order to transfer funds via IMPS.


1-What is User ID in net banking?

The user id will be one of the log in credentials in order to access internet banking. your bank will let you know your user ID and Password when you open an online banking account with them.

2-What are the types of Internet Banking?

  • NEFT(National Electronic Fund Transfer)
  • RTGS(Real Time Gross Settlement)
  • IMPS(Immediate Payment Service)
  • ECS(Electronic Clearing System)

3-What is the difference between Mobile banking and online banking?

Mobile banking means almost all the banking services which are offered on a laptop or computer can be accessed using a smartphone or tablet.

Online banking means any banking transaction is be done using a laptop or desktop over the internet through a bank website.

4-How Can I secure my online bank transactions?

Always make sure to follow the steps mentioned below to have utmost security from our side.

  • Use a strong password which is difficult for others to guess.
  • Try using the Virtual keyword when you put Password to log in to internet banking.
  • Do not share your details like OTP, PIN, Password with anyone.
  • Make sure you log out after using internet banking.
  • If it is possible use Antivirus on your laptop/desktop or mobile.
  • Do not use Open or public WI-FI to log in to internet banking.

5-Is ATM Card necessary for online banking?

Yes, The card will be linked to your account if you have online banking. This is to avoid any fraud transaction done with your account or ATM/Debit Card.

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