ZENITH International Journal of Business Economics & Management Research
Year : 2012, Volume : 2, Issue : 5
First page : ( 117) Last page : ( 130)
Online ISSN : 2249-8826.

Internet banking: A study of regulatory, supervisory & management issues

Prof. Solanki Virender Singh

Institute of Productivity & Management, Meerut

Abstract

With the popularity of PCs, easy access to Internet and World Wide Web (www), Internet is increasingly being used by banks as a channel for receiving instructions and delivering their products. Internet banking has grown at a very rapid pace, and many banks have made the development of services over the Internet a major component of their business and marketing strategy. From the perspective of banking, Internet banking is nothing more than traditional banking services delivered through an electronic communication backbone, via, Internet. But, in the process it has thrown open issues which have concerns beyond what a new delivery channel would normally bring and, hence, has compelled regulators world over to take note of this emerging channel. It has thrown challenges in the area of Legal issues relating to the jurisdiction of law, validity of electronic contract including the question of repudiation. The jurisdiction issue is whether to apply the law of the area where access to Internet has been made or where the transaction has finally taken place. Supervisory and operational issues like risk control measures, advance warning system, customer privacy, Information technology audit and re-engineering of operational procedures. Surveys done of bank supervisors conducted by the EBG (E-Banking Group) indicate that most respondents feel the need for additional, specialized supervisory guidance to address the issues and risks specifically posed by e-banking.

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