Techno-Based Services: An Alternative Way of Banking in India

Abstract

Indian economic policy has been founded on the philosophy of economic growth with social justice. It is against this background that we have to assess the steps taken by the Indian banking system during the recent past which makes a significant departure from the beaten track of traditional banking . Intense competition among the banks has redefined the concept of the entire banking system. The banks are looking for new ways not only to attract but also to retain the customers and gain competitive advantage over their competitors through universal banking and relationship banking. India’s banking system has seen some major financial innovations in the past decade as well as steps to promote financial inclusion, schemes that aim to take banking services to yet-to-be-banked areas. The various innovations in banking and financial sector are ECS, RTGS, EFT, NEFT, ATM, Retail Banking, Debit &Credit Cards, free advisory services, implementation of standing instructions of customers, payments of utility bills, fund transfers, internet banking, telephone banking, mobile banking, selling insurance products, issue of free cheque books, traveller’s cheques and many more value added services. Banking through internet has emerged as a strategic resource for achieving higher efficiency, control of operations and reduction of cost by replacing paper based and labour intensive methods with automated processes thus leading to higher productivity and profitability. Financial innovation associated with technological change totally changed the banking philosophy and that is further tuned by the competition in the banking industry. Challenging business environment within the banking system create more innovation in the fields of product, process and market. .

Keywords: Internet banking, financial innovation, ATM, Credit Cards