As one of the channels of internet banking, e-banking helps bank customers to perform their financial transactions electronically over the internet from the convenience of their personal computer, laptop or smartphone at a time convenient to them, without having to be restricted to regular bank operating hours. Internet banking can be defined as the process of doing financial transactions through electronic channels which may include lending, electronic bill payment, deposits and so on. Internet banking has transformed the way banks across the world carry out banking transactions and has brought new strategic directions for investment in banking information and communication technologies.
Difficulties in e-banking
Major cities like Kathmandu, Pokhara, Biratnagar have good internet facilities and majority of the banks provide internet banking in urban cities. However, internet banking services have not been properly able to reach the rural and underdeveloped areas of Nepal. Although many account holders are using internet banking, they are yet to develop comfort in the habit of utilising this facility. Reasons behind it include inadequate awareness about this facility and its benefits, and second is the concern about security.
Even if customers are knowledgeable about facilities, it may be insufficient for them to jump from the traditional method of banking to this entirely new approach. In addition to awareness, concerns about internet security, privacy and trust are major factors for adaption and conversion to internet banking.
Banks should not only provide general information about their online facilities but also explain and educate their customers about the security policies, risk and benefits of using it, and develop a strategy to motivate current non-users.
The Electronic Transaction Act 2008 oversees aspects of information technology including internet banking and has prescribed several forms of punishment depending upon the gravity of offence where a person shall be liable to punishment with fine not exceeding Rs 200,000 or imprisonment not exceeding three years or with both depending on the seriousness of the offence. These provisions would be attracted in addition to civil/criminal law depending on the nature of crime such as fraud, forgery, cheating.
The new Information Technology Bill also seeks to regulate aspects concerning information technology of which internet banking forms a part. It has widened the scope of regulation by including topics such as consent of agreeing to terms and conditions pertaining to data usage before use of electronic mediums, data security and liability of service providers.
The Information Technology Bill has also envisioned the formation of an “Information Technology Court” in each province to hear cases and until the formation of the court, the cases registered shall be judged by the District Court.
In conclusion, internet Banking needs improvement in terms of its application, environments of use as well as legal reform to encapsulate these changes. Banks should not only merely focus on the adaption of new technology but also on encouraging customers to use this facility. Meanwhile, it is the government’s role to ensure that the entire population of the country has access to internet and that policies and laws protect the consumer and are in line with digital policies globally.