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Internet banking is an electronic payment system that enables customers of a bank to conduct a range of financial transactions through the bank’s website. It is also known as Netbanking, online banking, e-banking or virtual banking.

It was originally introduced in the UK, in the year 1983, followed by the U.S in 1984. It was first introduced in India by ICICI Bank in the year 1998. In the early 1990s, banks wanted to utilize the rising popularity of the internet as an opportunity to advertise their services. They developed bank websites that were nothing more than online brochures, without any interaction with the customer. These preliminary websites featured pictures of the bank's officers or buildings and provided customers with maps of branches and ATM locations, phone numbers to call for further information and simple listings of products. It was also because the internet was not accessible by all households. But, by the year 2005, Netbanking had reached more than billions of households across the world. As per a 2015 survey, 700 million customers use Netbanking regularly in Asia alone.

At the time of opening an account, the customer is allocated a customer number or User ID and a password to access their Netbanking account. Netbanking provides various banking services such as viewing account balances, obtaining statements, checking recent transactions, transferring money between accounts, and making payments. The Netbanking system is typically connected to the Core Banking System of the Bank and is very different from the traditional Branch Banking. It aims at making banking much easier and accessible to everyone.

  • Requires a secure internet connection to access the bank’s website or application
  • Customer needs a registered User ID and Password to access their accounts
  • Allows for financial transactions like money transfer, bill payments, investments, and online shopping
  • Also allows for non-financial transactions like balance enquiry, cheque book request, cheque stop requests, address changes, mobile number updates, subscription to transaction alerts and so on
  • Opening accounts like Fixed Deposits, Recurring Deposits, PPFs, etc. can be done through Netbanking
  • Applying for various loans offered by the bank, like home loans, personal loans, car loans, etc. is also possible

Advantages of Netbanking

The primary advantage of Netbanking is the liberty of not having to visit the bank branch to carry out various transactions. As they call it, Netbanking is ‘Banking at your fingertips’. You can carry out various transactions from the comfort of your home.

  • Accessibility: One of the primary advantages of Netbanking is accessibility. Users can access Netbanking at any time of the day from anywhere in the world. It allows them access to their account at all times. With various money transfer options like NEFT, RTGS & IMPS, they are able to carry out transactions with ease. They can also avoid going to the bank for various non-financial transactions like cheque book requests, FD/RD account opening, address/mobile number updation, and so on.
  • Easy to use and navigate: Netbanking operations are very easy to understand and follow. They are interactive and self-instructional, enabling users to carry out transactions with ease. It also helps older people to perform these functions quite comfortably.
  • Account Activity Tracking: With Netbanking, customers can access all their account information in one place, allowing them to keep track of their money. Netbanking accounts include all your account types and the transactions you have carried out with complete details. Customers can see their cheque clearances, bill payments, ECS debits, Standing instructions, salary credits, and all other transactions linked to their account. They can also link their loans, credit cards, FDs, and RDs from the same bank under a single Netbanking login to have greater control over their account.
  • Time & Cost Efficient: Netbanking saves enormous time and energy for the customers. Firstly, they do not have to spend time and energy to visit the bank branch to carry out transactions. Secondly, online transactions through Netbanking take less time than the ones carried out at the bank. Fund transfers and bill payments are done immediately to save time for the customers. All these transactions can be carried out free of charge or for a very nominal fee that saves the users a considerable amount of money.

How does Netbanking work?

In order to use Netbanking, you must have a bank account. These days all bank accounts come with a Netbanking account by default. (There might be a few types of accounts that may not have a Netbanking facility. You need to check with the bank on that.)

If your account has a Netbanking facility, you will be given an Internet Banking Kit. This Kit will contain your Netbanking Username and Password. If you did not receive the Kit while opening the account, you can submit a request at the bank branch to get one.

You can use this Username and Password on the Bank’s official Netbanking portal to access your account. While accessing your account for the first time, you will be required to verify a few confidential details like your date of birth, mobile number or similar details to register your account. Once you have done this, you will be allowed to reset your password to your preferred one.

Internet Banking usually has a password policy. They require the password to be of a certain length, to contain special characters, upper case letters or numbers, and so on. You should choose a password that is strong and cannot be guessed easily to prevent hacking.

Once you have reset your password, you can log in to your account. The account page will have various tabs for different transactions. Some of the primary tabs available in most Netbanking portals are:

Account Summary – Access your account details, balance enquiry, account statements, profile details, etc.

Funds Transfer – Transfer money to self-accounts or other accounts using NEFT, RTGS, IMPS, etc.

Bill Payments – Allows bill payments for utility services, insurance providers, mutual fund operators, etc.

Credit Cards – Shows details of the credit cards linked to your name

Loans – Access information on various loan products linked to this account

Investments – Allows you to invest in various investment products offered by the bank, like mutual funds, stocks & shares, bonds, government schemes, FDs & RDs, etc.

Insurance – Access various insurance products offered by the bank and invest in them

E-Services – This section contains non-financial transactions like address updation, cheque book request, cheque stop request, Form 15H submissions, Income Tax statement requests, any account-related service requests, etc.

Customer Support – As the name suggests, this tab has options to contact the customer support for any queries or grievances relating to your account. This tab may have options to send an email or chat with a customer support executive, directly from your Netbanking portal. They may also list the phone numbers for customer support for you to call them.

Different types of Fund Transfer on Netbanking

National Electronic Fund Transfer (NEFT)

National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. This is the most widely used Fund Transfer method. NEFT allows account holders to transfer money from their bank account to another bank account of an individual, firm, or corporate having an account with any other bank branch in the country participating in the Scheme.

The important feature of this scheme is that even individuals who do not have a bank account can walk into any of the NEFT-enabled branches with instructions to transfer funds to another account using NEFT. However, such cash remittances will be restricted to a maximum of Rs. 50,000/- per transaction. NEFT, thus, facilitates individuals to initiate funds transfer transactions even without having a bank account. Presently, NEFT operates in hourly batches - there are twelve settlements from 8 am to 7 pm on weekdays (Monday through Friday) and six settlements from 8 am to 1 pm on Saturdays. There is no minimum or maximum limit for NEFT transfers in a day. However, the maximum per transaction is Rs. 10 lakhs.

Real-Time Gross Settlement (RTGS)

RTGS is defined as the continuous real-time settlement of funds transferred individually on an order by order basis. In RTGS, the fund transfer is processed at the time they are received rather than at some later time; 'Gross Settlement' means the settlement of funds transfer instructions occurs individually on an instruction by instruction basis. You have to remember that the fund transfer takes place in the books of the Reserve Bank of India, which makes the transfers final and irrevocable. The RTGS system primarily deals with large value transactions. The minimum amount to be remitted through RTGS is Rs. 2 lakhs with no upper ceiling for the amount that can be transferred. The RTGS service is operational from 9.00 AM to 16.30 PM on weekdays and from 9.00 AM to 14:00 PM on Saturdays for settlement at the RBI end. However, customers should check the RTGS timings of the bank branches before making the transaction.

Immediate Payment Service (IMPS)

IMPS has been increasing in popularity and usage these days. The benefit of IMPS is that it offers instant, 24X7, interbank electronic fund transfer service through mobile phones. IMPS is a dynamic tool to transfer money instantly within bank accounts across India through mobile, internet, and ATM, which is not only safe but also economical both in financial and non-financial perspectives.

IMPS was established with the aim of enabling bank customers to use their mobile phones as a tool for accessing their bank accounts and remit funds. It makes fund transfers simpler by utilizing the mobile number of the beneficiary. It helps in realizing the goal of Reserve Bank of India (RBI) in the digitalization of retail payments. The ultimate goal is to make mobile payments the primary way of funds transfers to enable better transparency and security for both the remitter and the beneficiary.

Electronic Clearing System (ECS)

ECS is primarily a bill payment tool. It serves as an alternative method for effecting payment transactions in respect of utility bill payments such as telephone bills, electricity bills, insurance premia, card payments, and loan repayments, etc., ECS was established with the objective of removing the need for physical bill payment transactions and the horde of paperwork that follows.  It has helped in focusing the time saved on improved customer service by banks/companies / Corporations/government departments, etc., that are into collecting/receiving the payments.

Comparison CategoryNEFTRTGSIMPS

Settlement Type

Half hourly batches

Real time

Real time

Minimum Transfer Limit


Rs.2 lakh


Maximum Transfer Limit

No Limit 

(However, maximum amount per transaction is limited to Rs.50,000/- for cash-based remittances within India and to Nepal under the Indo-Nepal Remittance Facility Scheme.)

No limit

Rs.2 lakh

Service Timings

 8:00 AM – 7:00 PM all working days except 2nd and 4th Saturday of the month

Unavailable on Sunday and Bank Holidays

Operates in 23 half-hourly settlement batches

 8:00 AM – 6:00 PM all working days

Unavailable on Sunday and Bank Holidays

 Available 365 days and 24/7

Transaction Charges

No charges for inward transactions at destination bank branches for credit to beneficiary accounts

No charges for inward transactions.

Charges applicable for outward transactions. For Rs.2 lakh – Rs.5 lakh - not exceeding Rs.25

Above Rs.5 lakhs: not exceeding Rs.50

(GST is also applicable)

Charges for remittance through IMPS are decided by the individual member banks and PPIs. The taxes are included.

Payment Options

Online and Offline

Online and Offline


Are there any disadvantages of Netbanking?

As is the case with any technology-driven digital product, Netbanking also has its own pitfalls.

  • Transaction Security: In Spite of tremendous efforts on the bank’s part and the users’ part, Netbanking is prone to hacking. Hackers can lay hands on your sensitive information and can figure out the password for your Netbanking account to hack it. These days, there are modern techniques employed by these hackers to cheat ignorant people and elderly people to get their login details and rob them from their accounts.
  • Difficult to operate for the elderly and the less knowledgeable: Netbanking requires basic computer knowledge, which is not very common with the current generation of elderly people and the less knowledgeable people. They might not be able to navigate the website with ease and would prefer branch banking.
  • Availability of Internet and a computer: Though the world has no dearth of internet connectivity, not everyone would have access to a computer to use Netbanking. Also, most Netbanking transactions require continuous internet connectivity, which is still not available in most rural areas across the country. Using public internet cafes may put them at risk of hacking.
  • There are chances of errors: Unlike branch banking, the entire Netbanking process is performed by the user, which may give a chance for errors while typing the beneficiary account number or biller details. This may result in the money being transferred to the wrong person or the bill being paid to an incorrect account. It then becomes a hassle to revert back the transaction, which might be impossible in certain cases resulting in loss to the account holder. This is another reason people prefer branch banking.

Safety in Netbanking

Technology has revolutionized the whole banking system. Banking is now a 24/7 business, catering to a wide segment of customers. Recent years have seen a rise in cyber-crimes targeting the banking system. There have been breaches in the Indian Banking system where millions of account user information were exposed. This has forced the banks to increase their website security with tougher encryptions to safeguard customer interests.

Hackers and miscreants basically use the following tools to disrupt the online banking system:

Trojans: Trojans are internet viruses that get installed on your system without your knowledge while you are browsing a potentially harmful website. These Trojans then steal sensitive information from your computer through keystrokes or screenshots enabling robbers to access your Netbanking account and steal your money.

Phishing Emails: These are very common these days. As the name suggests, these are fraudulent emails posing as having come from authentic sources. They usually contain a link and instruct you to click on this link to perform some action related to your bank account. If you click on these links unknowingly, your computer is compromised giving complete access to the hackers.

Email Scams: The numbers of this kind of scam has reduced but not completely obliterated. These email scams target specific customers based on their internet activity. They usually ask you to deposit a small amount of money to their account in order to receive a huge bounty of unimaginable amounts. Some are ignorant and weak-minded and fall prey to these scams ultimately losing huge amounts of money.

Customers should also take some necessary precautions to Netbanking. Ultimately it will be them losing the money. Here are some basic security tips you can follow for a safe Netbanking experience:

  • Use an up to date Anti-Virus software: Many computer users ignore the need for good antivirus software. Even if they use one, they download some cheap and free downloads that may not provide complete protection. It is important to use genuine anti-virus software with ultimate features to provide 365-degree protection for your computer.
  • Keep your Operating System and Browser software up to date: Make sure that you have all the latest updates for your Operating System and the Browser so that you get all the security updates for the same.
  • Check the permission settings on all the software installed on your system: It is important to know what information from your system is used by the installed apps and stored on their servers. Some applications might store your sensitive information and may be easily hacked compromising your data.
  • Avoid using public Wi-Fi or internet café’s for Netbanking: It is common knowledge but still to be emphasized not to use public Wi-Fi or internet café to access your Netbanking account. They may not be secure and could be used by miscreants to collect your account information. However, if you are a regular public Wi-Fi user, consider setting up a VPN software on your computer. It creates a secure tunnel between the computer and the internet and prevents hackers from intercepting the traffic.
  • Have a strong password and reset it regularly: Having a strong password is important. Make sure that it does not have your name, family member’s name, date of birth, or any personal information that can be easily guessed by hackers. Make sure that you do not share your password with anyone or write them down anywhere. It is also wise to choose OTP for every transaction for additional security.
  • Enable SMS alerts for all transactions: You might have to pay a nominal fee for SMS alerts but it is an important feature. When you get SMS alerts for all transactions, you can immediately identify any fraudulent transactions and take timely action to prevent huge loss. There are alerts even for failed login attempts that are very helpful.
  • Never click on links from doubtful sources: No matter how authentic the email looks, keep in mind that banks never send you such emails. Banks have been sending repeated emails and SMSs reassuring customers that banks will never call and ask for any passwords, CVVs, or OTPs. Neither will they send you an email asking you to click on a particular link to carry out a transaction. Customers should be highly aware of these and take smart actions to prevent loss.
  • Login only on secure web pages: Make sure that you are logging in to an authentic, secure web page of the bank to access your Netbanking account. Miscreants can replicate your bank website easily and make you enter your login information on these fraud websites to steal them. Remember that web pages over a secure connection will start with "https" (note the "s" at the end) instead of just “Http”. You can also see a padlock symbol in the address bar, just before the page address. Also, always type in the bank’s web page address in the address bar to access it instead of clicking on a link from a different page.

Netbanking FAQs:

1. What are the banking services I can access through Netbanking?

Netbanking allows various banking transactions to be carried out from the comfort of your home. Some of the functions you can perform via Netbanking are - viewing account balances, obtaining statements, checking recent transactions, transferring money between accounts and making payments to another account.

2. What are the basic things needed to set up my Netbanking account?

The basic 3 things you need for Netbanking are – A Bank Account, Login ID/Username & Password.

3. Can I carry out non-financial banking services through Netbanking?

Yes, of course. You can carry out various non-financial transactions like – downloading Account Statement for a specific period, updating profile information like address & phone number, requesting new cheque book, request for cheque stop, setting up standing instructions, adding a new fund transfer beneficiary, subscribing for email/SMS alerts for all kinds of transactions, contacting the customer support to register a query or grievance and many more such services.

4. Who issues the Netbanking credentials for my account?

Your banker is the issuing authority for your Netbanking account credentials. These days all bank accounts come with a Netbanking account by default. If your account has a Netbanking facility, you will be given an Internet Banking Kit while you open your account. This Kit will contain your Netbanking Username and Password. If you did not receive the Kit while opening the account, you can submit a request at the bank branch to get one.

5. Can I pay my electricity bill through Netbanking?

Yes, you can. Netbanking has a bill payment feature that allows for utility bill payments of a number of service providers. You should first register your biller under your Netbanking account. Then you can start making payments.

Latest & Update Net Banking News

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