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Chapter - 15
Electronic Banking
Tntroduction
What is meant by Electronie Bat
Qbscdves oF Fectronie Banking
story & Development of Electroni
eee lp leotro
Structure of Electronic Banking
Basic Components of Electronic Banking
Types of Electronic Banking
15.8-6 Reiailed Automated Clearing House
Service
158-7 Home Banking
Wholesale Electronic Banking
Cash Management
Wire Transfer
Corporate Clearing House
Inteiet Banking
‘etal Hlecronie Banking Risk in Electronic Banking
tiomated Teller Machine Handling Risks in e-Banking
| 15.8-2 Debit Card Problem of Electronic Banking
eee 5.14 Suggestion for Introducing Electronic
of Sales Service Banking in Bangladesh
que Truncation 15.15 Conclusion
15.1 Introduction
and technology brings pace in the world civilization. Banking is a changing
ginning from the roadside of the Lombardy Street of Italy to the modem exquisite building,
technological improvement of banks never stop. In the early period of banking,
r hands/fingers for computing, Later, many innovative devices were devised and
services. Then, the use of computer in banking activities in the 60s of
‘was an unprecedented incident, The main purpose of which was to ensure
‘and prompiness in providing banking services like deposit and withdrawal
Tatest technology to provide its customers high quality banking facilities. In
‘one of those reliable institutions through which business contact with any
. The improvement of information technology narrows down the
banking services is now casy and convenient to the clients. They
of carrying cash or cheques with them. A plastic card is sufficient for
it and withdrawal. Electronic Banking brings unprecedented
. With the help of this technology, the clients are directly
; “Promlaes the soul of business.”
- Chester Field 290
nent-A Hund Linphiasis
This chapier dain withthe iden of using plastic und electronic money instead of coh und
this on the Wfesivie: Hebankiny in now going popularly for facilitating lek, nck ra
transactions. In this era of e-banking, plastic curds and companers ute used In tren ct A
cheques, Forms ete. The entry of w revord for each account is piven In computer |
Wransaction also, data is entered into the conipuier, All th
Resides, other interested parties outside the burking px
‘Feport aller getting permission trom the appropriate aithoni
1 dats are «
wan access Ui
‘is 4 modem computerized wyster of providing banking services by the bon
By using the moclern technologies, bunks have become able to provide their ce ny
eklys more accurately and more convenienily, It has created revolution in the wer
ing industry,
ig Systems, banks usually provide the following services:
cl withdrawal facilities
of funds from one bank to another with the help of lectronic Pung
's)
ies, andl opening of Letter of Credit (L/C) and other utility services,
he oF at own chamber
miking activities with the help of electronic system
nH, Lipis said, “Electronic banking systems are electronic
data relating to these transfers....electronic banking services
services delivery system,”
Oviding traditional services in a modern or newer way
insactions between the banker and customer are done
hat in the near future, this technology based banking
of economic and political sovercignty
adem technology or satellite based computerized
icket, more accurate and convenient
among them,
‘in communication, trade and
national life. Technological
and quality
hat is, banking activities
and thus world trade,
are able to provide Electronic Banking Poy
better services than before, which improve the banker:
logy is welcomed both bythe Ranks ante SHSHOMEY relationship, In the banking inci,
‘ustomers.
following table, the main objecti
PEW point have been GRINS Of the clectronic
banking both from the banks’ and the
. ae
Objectives of Electronic
Banking
From Clients’ Point of View
|. Receiving timely and instant information. such as —
2. Balance statement
bi, Account statement
Transaction statement
2 Ability to deposit and withdraw of money flawlessly within
short time and at lower cost.
3. Advantageously making payment for the goods snd services,
4, Staying at home or ouside, availing the facility lice opening,
‘UCs, making investment, obtaining loan facility and above ali
‘making fund irinsfer with the help of electronic banking
‘5. Securing the advantage of maimtaining secrecy of accouks of
the clients,
§, Enjoying utmost protection of the accounts maintained under
electronic banking,
of Electronic Banking
leW York introduced successfully the certificate of
The primary stages of the e-banking are the
Of the EFTS are the Automated Teller
Clearing House (ACHs).
first. The working procedure of this
lays, there were no magnetic cards.
these vouchers in the machine
ar of the establishment of
stared “National Cash Dispenser
eel unk Management-A Fund Emphasis
Pfapan and USA started the use of these (YPes of machines produced by them, The
actime were in off-line, there was rho connection with the computer.
Ngseond cra: 1n 1972, Lloyd's Bank of UK ‘established the very first on-line “Cash
ies plasls cakes 16 tice clients, ‘There were magnetic SiDus On those
Mies sezounis othe client could be identified. In this on-tine system, every
with the central computer,
‘The machines, which are used at present, are the oweene of the research
30 years, In today's machine, there is a full graphics screen monitor like color
on in different currencies can be c From the same machine. The cost of
reducing. Now-a-days, 50-60 lac is needed to establish a
panking, which is also known as “No man Banks”, From
it phases of the banking servic
Virtual Banking Hleetronie Hankin
Level of :
e-banking Hervices in diferent sages of de opment
developmen
-binkding wt
differ ‘
eee Huck Offlee Wectronle Banking In from thervies
‘ownter of
Hlectronie Banking
Cash distnurse
Primitive wage | 1, Ledger
of a
Cash management
banking - Head office MIS,
Ine ate Offline transaction processing | 1, Payment of telephone bills
es Automated clearing house 2, Poinvat-sale
in 3, Generating information for filing
Fund transfer
nang)
3. Cheque verification
4, Auomnmied Teller Machine
Online wansaction procening 1
Central processing ai the country
level
Internet Banking.
Procesing, intrar bank transactions
‘Automatically oninwe fund
transfer
2, Home Banking
4, Dishonored check truncation
4, Storing used check truneation
5, Electronic fund wansfer
6, Presenting cheques through
electronic process
7, Intemet Banking
4, Blectronic direct deposit,
we can see that in the earlier stage of electronic banking, banks used e-banking
F, perform cash management and wse management information wysterns (MIS)
‘were major inter-office e-banking activities, They extended cash
ng to their customers.
banks used offline transactions, automated clearing house (ACH),
ef a6 internal and telephone bill payment, point-of-sale, check
e-banking activities.
banks use online transaction processing system, internet banking,
ities as internal e-banking activities, They offer online fund
tion, check presentation through electronic means, Internet
‘ag e-banking facilities to their customers Bank Management-A Fund Emphasis
Banking Software: By using computer software package, banks can deal with the
Fe System ch deposit, withdrawals, bill payment, bill Collection, salary and Meiers
Mands, making accounting repor's and statements etc, It does not require any use of +
journals, ledgers, vouchers or notes.
cation network: Communication network is an important issue in an online banking.
‘cases dial-up Belephone ‘and in other cases radio link is used for communication network.
"usage of these networks depends on the practice of e-banking. .
‘Channel: These channels are used in corporate and retail banking, as well as to the
| or family oriented banking~ Modern banks and financial institutions are providing
balance reportin, ints Keeping, domestic and international payments, trade
netting cash withdrawal and factoring and other sorts of services related to
; SWIFT cic.
¢ transactions data in due places, electronic banking network and
in bank host computer requires the use of switching system. It helps
|
‘customer services by means of various techniques and/or products
ent for each single product. Not all of the products were invented at
ated with the passage of time. With the advent and invention of
of client service is increasing rapidly.
Wholesale Electronic Banking
‘Cash Management
Wire Transfer
| Corporate Automated
1Ey Cheating Htouse- ACH Sa
Electronic Hanking 295
In the following section
OMS, We wil
wholesale services one by ome.
‘liscuss in brief the mechanisen of E-banking services i, retail and
Retail etrnic Peking is such a banig System where the banking ut vies are operated mainly for
teres en feature of retail banking isto provide the clients u commehecere
banking facility. The tao led by the retail electronic banking services are diseacet fete,
15.8.1 Automated Teller Machine (ATM)
Rane the electronic fund transfer services, ATM is the most widely used and popular. With this
Sipated computing machin, clients can deposit ot withdraw any time of 24 hours a day. With the
Sots machine, fund can be transferred from one account to another and loan can be repaid. This
machine can be established at the bank’s lobby, at the clients’ business avenues, apartment
busy commercial areas, shopping centers, factory etc. ‘Through ATM service, bank can render
I services to the cients’ door,
‘Thus clients can save their time and the transactions seem to be
- On the other hand, banks earn their profit by proving services at a lower cost
ies puoi
‘operational expenses and increase profit: Reducing the intemal operating
di increasing the profit by increasing the market share are the main objectives of
XTM program,
I As ATM is an automated system, so there is no need to engage
‘provide deposit and withdrawal services. As a result, periodic cost cutting
he domestic and foreign countries for their banks and to sustain in the
fficient services in this modern age of connectedness,
al accuracy of the bank.
er
as its distinct number, client's name, signature of
PIN (personal Identification Number). During
‘Then ATM instructs its client to input the
ified time limit (usually 30 to 90 seconds). If the
, the machine will take the card inside of it and the
10 physically to the bank and get their cards
type of the service. If the client wants to
input with the numerical key board Bank Management-A Fund Emphasis
‘amount, client will press the Key" and within few seconds receive the cash,
r He aan the wansaction receipt and th came. prepared. for the next
Clients are required to change their tran the
fonce the key is pressed, there is no other alter
End of Day Reconciliation
Put Money in
End of Day Transaction summary
‘Send Automatically through
Telephone! Manually’ pat money in
Merchant card
omer card in Merchant terminal
-PIN Entry / Amount authorization
M, some preventive or protective measures are taken for
tight clients, ATM has a plastic coated card and a
ity. Usually banks provide card and PIN in two
es, clients forget the PIN and for this reason he/she
‘with the card in the moncy bag or vanity bag. If
ive measures to prevent such fraudulent
fem, in which two sets of Magnetic Bars
stic Card. Heat and pressure sensitive
‘becomes difficult to copy. In addition
g invented. Recently, research is
signature ctc.
of the banks, sometimes data
e the sound operation of the
(of service engineers may
‘banks have to employ Blectronic Banking ww
@ Physical Penetration: There are examples where ATM is broken down andthe cash has been
stolen, although this type of risk is lower in practice. The total weight of ATM is 1.33 tons and it
{installed with high security with the wall. Normally, te machine has a security alarm, Alarm sill
‘ing whenever any unauthorized person will attempt to damage ito use it illegally,
ATM Economics:
From the business perspective, the main purpose of installing ATM is to minimize the transaction costs
‘and to maximize the profit by increasing the market participation. The main point of installing ATM is,
Lt is profitable to transact with the human teller or ATM. Although from the whole economic
it is a narrow view, but in the cra of globalization, ATM economics can not be avoided.
@ Gecade ago, a survey conducted in USA showed that ATM is faster and quicker and profitable
human teller. ATM economies can be explained by showing the costs of human teller ATM,
ion in the following table-
) Yearly expenses of ATM are 30,000 USD (including depreciation, maintenance, software
‘personnel, electricity, telephone, security expenses etc). ;
| Per human teller costs 18,000 USD yearly (including salary and other facilities)
feller can transact in each year = 39,600 (daily average 150 transactions X 264
‘cost in human teller = (18000 / 39600) USD = 0.45 US dollar.
‘cost in ATM in different layers of transaction:
e Me
Transaction ‘Per transaction Cost (US dollar
125
0.63
0.42
O31
035
___ 4000
__ 6000,
cate
neve that, 6000 transactions in ATM cosis same as per transaction in human
n amount is less than 6000, ATM costs become higher than the human teller.
‘Because cost decrease with the increase in transaction. Now-
Jy 000 to 10000 transactions are conducted through ATM. The
the acceptability of ATM to the clients.
ei
ss the account information stored on the magnetic stripe
{card The host processor uses this information to route
pears A.
the bank what kind of transaction is required
“what amount, Also, the bank requires the
verification, Federal Jaw requires that
form. Bank Management-A Fuad Emphasis i
Blectronic Banking wm
Objectives of debit card services;
The objectives of debit card services can be descrit
lencribed in 9 ways:
> Revenue Generation a
> Expenditure Reduction,
> Client Service,
‘They are explained in the following section:
Revenue generation:
Debit card issuing banks alon
ith fs
using that card ee
>
inancial institutions expect that, they can enhance their income
in the following ways; is i = os
Merchant discount,
Intercharge fees
Card fees.
Interest on credit line
‘and other financial institutions have become able to reduce their expenditure to a greater extent
debit cards, By using debit cards the expenses of paper transactions like file, voucher, letir,
which were really expensive. Besides this, by using the
) greater extent by reducing the number of employees.
ternative of cash, cheque, and credit card, On the other hand, it is very risky
cash while shopping. Again, payment by cheque creates many difficulties, For
ques are not allowed for payment, Besides, endorsement of cheques is a
theque of one country is not accepted in another, But, as the debit card is
account of a client, (s)he will feel comfortable at the time of payment,
where credit card payment is not accepted; in those cases, debit cards
6f financial institutions need to consider whether the target
sof clients. Generally, debit card is used as & mass-market
in aliernative of cash, check and credit card, Usually credit
this card, Studies showed that the following types of people emphasis
cP Bank Management-A Fund Em
‘Consideration for the issue of debit card:
bank that has consideration to launch debit card PrOBr
0 take 1
‘Authorization: Debit card issuing banks have 1 take bat
‘National Authorization Network before issuing such Cae © TT
the deposit accounts of the clients with the credit card S¥*
Bintng and processing Network. « of debit card are conducted thorough Internet, So, banks
ag 2 rvcessing Ue trrign such a aystem to which cardholders’ deposit accounts ae
Beet etic cnyic reaction can be observed from the account statement ofthe
sing)
Mein cod issuing banks issue the card after considering the following issues 4p
issuing
mm need to consider the following issues;
a
‘authorization from the authority o¢
he tient, Tesuing banks need t© connec,
external processor or directly ¢,
‘the minimum deposit balance
xr the applicant is a client of
t's habit and nature of 9
ss in retail electronic banking. Generally, if the clients have
joney in the deposit account, then the bank provides this plastic card
balance in the deposit account, a client can use this card
‘of a client is debited to reimburse the transactions
‘used for payment of a product or service ot fur
it card at first. At the end of 1950s, Bank of
Taunched the charge card. Bank of Ametice
: ae branch network. In 1966,
in other counties for launching this
ican Express, Gold Card etc. are the most
‘their valuable and responsible
by using this card ina
ce cash from the financial
client deposits money
‘issuing bank will not
‘is usually 15 days. Electronic Banking 301
When cardholders want to buy something wit the help of cet car, hen the shoppe wil wey at
Fiat whether te card is real or fke aul wily to know how much efi limit the cardholder has by
making a phone cll or by any other means fhe hopper recive satisfactory information easing
Whe eardholdes, te (the shores) wil repre bill with the information ofthe name of the cardholder,
the ane ofthe Card Company, ead number, te. and then ge the il signa by the cen. Onc copy
ft alin given tthe earhoder, The shopper wl vbr a copy of hn illo Meher bank an the
‘will then collect the money from the cardholder's bank. Afterward, the card issuing company will
collect the amount from the cardholder.
Risk of Credit Card & its necessary Legal Framework:
‘this process is followed rather than the manual system, risks can be minimized to a greater extent.
® is a trend to duplicate cards. Moreover, many frauds are committed by disclosing the
which is supposed to be confidential. It is now necessary to develop and implement
Tegal framework to preserve the interest of the client, merchant and the bank as well
should be amended in order to ensure the control of the central bank,
15.8.4 Point of Sale Service
jal institutions provide services to the place advantageous to their clients. tn this
ount of the service provider and receiver are simultancously debited and credited
POS, transactions are accomplished by providing one or more services:
When a client presents a check to scller, (s)he needs to consider
of receiving the check. For example, whether the cheque is written on an.
ith money is deposited in the account, etc. In those cases, the businessman
‘tunable to encash the cheque or requires to incur huge expenses to encash it.
n a of USA reveals that ifthe cheque is examined with the help of computer, the
ring will reduce by two-thirds. How much amount the bank will spend for cheque
‘on the possible amount of bounced cheque, collection expenses and
accept the presented credit card, businessman needs to check the
card that were misused by the unauthorized persons, Moreover if
floor limit, then the salesman/shopper has to contact with the
th the license provided by the financial institutions to accept
‘Transaction Approval by making a phone call to the card
sophisticated system the shopper is advised to phone and
“or credit card association, which has information of local
Communication Nevwork. In a sophisticated
through card activated terminal techniques that
service bureau and credit card processing
rer Bank Managoment-A Pund Emphasis
nder debit card nervice, enrd avmer's newenints becene
unt of the purchased goods on soevices
‘Take can be transferred by two ways?
1» Soller is required 10 make a sates draft like credit card. Ther: this sales
card owner's account and credit the seller's aceou
> Respective clients/financial insttutions/seller's acco
‘transferring taka from online point of sale terminals
dealt Won debit the
wins are 19 be debited oF credited try
+ components using in POS from the view point of activities conducting
15.8.5 Check truncation
‘of service where, financial institutions do not return the rejected and un-
institutions keep these checks with the monthly statements and
ng with monthly statements to the clients.
cheques till 90 days. If the client finds any inconsistency or
d by the financial institutions and his/her own record, then
eating with the institution within the “preservation period”
‘cancelled cheques are destroyed after keeping their micro
the clients’ future query, if arise. Microfilm copies
payments of different financial institutions are
computer based integrated system and it is the
‘payments are the substitutes of papers and are
is debited and another is credited.
ed Clearing House Association. ACH
area, .
Electronic Banking
NoW- a- days limited use of ACH can be found in the follow
(1) Payment of telephone bil
Ayment of pre-approved mortgage, rent and k
10 hi loan install ment:
G) Cash transfer from one business to another under a part of ecisk
management system
ACH service bazaar:
fansactions occur through ACH service bazaar:
03
ing types of payments:
any government or company sends elecironic credit to their employees or ther
¢ accounts in the member financial institutions, with the help of ACH system, ic
An the credit transaction recording system of ACH, the pension payments. salary
iment or non-government retired employees are directly deposited through
stem, payment is made from the account by debiting it. At present.
‘the highest debit volume is the payment of pre-approved insurance
elude. installments in mortgage loan, payment of bills of credit card,
mnie approval system by which the transaction originating
dit or debit entry will be presented in future for the account of
n’t result in instant fund transfer.
wre 5 participants - person, company, paying financial
institutions. Although ACH entry can be initiated by any
ame for all of them. ACH operation can be described
Bini
in the computerized system by different
susiness organizations, financial institutions,
d magnetic ACH input tape.
input tape prepared by the originators.
‘bank can get ACH entry from different
and then send it to ACH.
ting banks. ACH then sorts the files based
g points of financial institutions. OMEN A Pil Fahne
Ate wel the ACH erty, receiving finawial sion gent ceed He Hn
Stopes In WN ep, setlemens of thet yukon ACH sauee 4 ak hen
cc m/Originator ail Resprnderi/eveiver wstiuitic
Ages the cuncolled/jected ACH enivieyine sent buck 1 the eviplantioye fmm
| the accounts of the cancelled ACH enypfer are seited Herwveen the nbn Ht
Anstitutions. Later on, if wecessury/Ahe vripinwthig finn wl twetitutients senate the
165 (othe entry originating party yf settee
rome fn transfer nysiem, bunks cur offer is finn lil ner vices ter te donne of
I telephone bill payments C448) prowess su the! vllents ean tay
‘na fund transfer service ty which clients ccnnmainate with the
i {0 wollect thet (clients) Vill, us 4 pewult of sehen
B AccOAL und transfer the Fume to the elie divested payen
any cheques snd can nv the
they only require to make w phone vall, tewthe Fires
ph ‘In Touhy” ibe: "The nent avid inmprevvedd veveiem of
In this systenn, cllente ver inferrmantico 1 trends Electronic Banking es
Operation system:
VEB process is performed through 4 Processing function:
% Customer information preparation
> Network control
> Session management
> After session
Network control: Thi
incoming call, b
10 another,
Session ‘management: communication with the clients
‘With the help of a phon; ; ithelps the clients (o quickly commit their transactions It
by the clients,
‘Much popularity in the western ‘countries, That is,
banks face’ litle problem in Providing this
banks other than Unit Banks are facing
0, Skilled services ate required to be provided to
indi banks or banks with few branches
©. The bases of such Inter-bank or inter- = ee arene
eo ee ein ees te prnirrinn
eile peameens. Pemmment Seraiticaticn Sony ‘
dee seeraam species oe to
od ,
day nee of eget ext smentnc at oe 7 :
[ 15.9 Whaleaate Fertrdaie Mentor
Water edecrworsic Santing one® + mening tte oem
| emer tank ET
we gericrmed Mespeste ‘eet Bank Management-A Fund Emphasis
Transfer Check (DTC): Where lock box system is not uieful (Postal Service, Grovery
a reinave ruany sales centers In diferent localities), the banks may wwe depontuary chert
Se ria tanser funds to Central Concentration Account. Under TTC: service. a lot ees
Poop makes daily Grpoit in focal bank and then informe it the head fice of the company x
‘a phone eal
Disbursement: Corporations use the following tactics to slow down the payment.
fio discount is allowed for quick payments, cheques are not sent for collection wrt gayenene
due.
‘cheques to the head office of the organizations rather than vending it to the Lacie Bors
se sent in such a time so that the creditor receives the cheques at the end of the
the weekend's float.
e account by considering the probable time for cheque presentation.
to the employees/officers in the name of the company vo thst floss
jiled of from the expense account.
editing fund collection program and lengthening payment propracs,
determination with account reconciliation etc. are the parts of cash
companies impose central regulation on funds to operate zex0
[present their cheques on that account, then an overdraft is created. At
‘necessary funds from the concentration account. that cwerdeat:
for transferring fund. Wire transfer is 2
quickly and in due time. This type of Electronic Banking 409
) Payment processing and delivery: 1 another
2 trosh Fed ae Bis caves ae re pat transfers fund from one account to
yment advising: After transferring funds, banks in this sia 8 Pipe
Picton radtsnticnsthdce SSE
a, Fed wire (The Federal Reserve Communicati
% peli c nunication system)
cc CHIPS (The Clearing House Interbank Payment Service)
a SWIFT (The Society for Worldwide Interbank Financial Tele Communication)
Wire and how it works?
payment network established in the USA is called Federal Reserve Communication
Wire. The owner and operator of this network is the Federal Reserve System. Fed wire
ing process of its 6000 member banks through the interconnection of 12
Fed Wire system was limited to the members of Federal Reserve System,
ository institutions for example, commercial bank, savings bank, credit union,
o are operated under Federal Reserve Act can get this Fed Wire ser\
em is done through the Federal Reserve Account of the members, In this.
in Bilateral process, Federal Reserve System debits the fund sender's
's account according to the nature of the transaction.
ed information /fund transferring process through which members
tion and fund. Bank wire is basically data ‘Store and Forward”
ive, co ion in any case, switching centers are pointed at various 310 Bank Management-A Fund Emphasis
fi iesas
ic nsec iad ws (on terion a
Peers Ee ay cian wes coriounnly plats te becom ofthe senders nd eoshyen 2
seneen
Pique We Teter
sessing and Deliver
Bank A Bank B
Fed Wire
ieee
Money Bank Wire | Money Corp. Customer
ze Bank
Transfer Swit) Transfer
Individual
‘Function TeleTWX | Function
Institution
Internal
\
See Meee
Bank C
Gif no relationship
between A and C)
Financial Telecommunication:
Taunched SWIFT for easy, quick and accurate
communication network among the member
igh SWIFT are customer transfer, bank
Joan on demand/deposit, payment of
Europe, Latin America and South-
center of almost all of the member Electronic Banking as
countries are connected to the 3 switchi
te the central print of Uie senate comers (Relgivm, Netherlands and USA). Switching centers
rk, because they T 2
wm sstetween ener a nae they are mually ineconnected and they operste
2 itching crmmark, Hal erg eves SWIFT assistance to Belgium, Luxemburg, Germany, Finland,
sone Denmark, Nand Spain. Switching center of Netherlands give SWIFT assistance to Sweden,
oe — Nooway, France, Holand, treland, and Great Britain, Switching center of United
States sistance to Asia, Latin America, and North American member countries,
. CHIPS (Clearing House Interbank Payment System):
New York Clearing House started CHIPS in licu of Pay
sper Clearing Process. CHIPS is formed
‘bank members along with New York Clearing Bark. All the members of CHIPS should have
New York and only the members of CHIPS get entrance in CHIPS, The outside computer
which get entrance in CHIPS must connect to CHIPS from their office in New York,
‘procedure of CHIPS:
pr the fund collector bank provides the necessary information to the central computer of
-clearing house regarding the identification number of cheque submitting bank, amount of the
‘cheque number etc. After collection, the central computer preserves all the information. If
given by the cheque is approved and verified from the authorized person of the cheque
bank, then the central computer will seule the transaction by debiting the account of the
‘of the collector bank, After settling the transaction,
k that its account is credited. At the end of the day, the
it All these transactions are completed daily basis.
institutions clear and exchange their electronic payments. At present, in
‘a million people arc using ACH system in paying their salary.
For example, large insurance companies
by using the debit entry of depository transfer cheque. Cash
is very popular and widely used service. Corporations are going
sial the facilities (cost reduction, receipt of funds within one
%e premium and cash concentration strategy.
‘Automated Clearing House Association - NACHA had
g transactions through ACH-
poration automated clearing house, NACHA needs to
ovide complete information related to invoices to the
mnd million dollars, NACHA has to carefully deal
sh transacting with ACH. By changing trade term
problem can be solved. For example, to make ue Honk NTAMnWHIENA Hunt Baptyale
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ee AU the priimuy level of Anternet Hanking, 1 represents
Hig, hough insignificant but with a hope to install at a large scale in
alized Inier-communiewiive wot between bank and clients Here
Onal relatlonahip is ertabtished with every single client tough ¢
Banking: Iniernet Is a global network of interconnected
information, data through satellite, In
general banking activities, ‘Transferring of funds
UpeEng account Wlitements, payment of bills, and
Gan be done through Internet, Sometimes, confusion
J Internet Banking syatem, ‘Usually, bank provides PC
ickage provided in a diskette and customers are
bank in Off tine through the bank's prlvate
clients Gan access their accounts at any tin
han using floppy disk or other secondary
1b (WWW) Is the main platform of TD
Electronic Banking 313
8, Selling Financial Products,
9. Gate-way to the Internet ~ Internet ace Vi
10, Account Transaction Services. “