Pros and Cons of internet banking

Wondering what is meant by internet banking? Want to know what all facilities you can avail through it? Here in this article you will find all about internet banking, ranging from its advantages to the few demerits and the security measures you need to follow most diligently for a safe and happy banking experience.


Internet banking is taking the world by storm. It has made our lives a lot more easy and comfortable. No more have we to depend on banks or make frequent visits to them. Standing in queues for hours altogether for withdrawing or sending money has now become a thing of the past. With internet banking, you can shop online or send money to anyone, all by sitting in the comforts and security of your home. It has kind of brought a revolution in banking and people are enjoying its numerous advantages. In case you are yet to experience the joys of internet banking, it is highly suggested that you approach your bank at the earliest and apply for the same. Internet banking, if we follow the safety guidelines, can be most profitable to us and also saves on a considerable amount of our valuable time that is generally lost visiting banks, reservation offices, ticket counters and standing in queues.

For the benefit of those who are not much aware of this form of banking, we will first begin with understanding what is meant by internet banking. Subsequently, we will also come to understand how it can be beneficial to us. Like every modern technological aid, internet banking too comes with its flaws. We will see them too. To make our internet banking experience secure and confidential we will also see the safety measures that we need to take care of.

What is meant by internet banking?

Internet banking is known by various terms. Some prefer to call it as net banking and some as online banking, e-banking or virtual banking. Whatever be the name it all means the same. As is apparent from its name, an internet connection is what is required to do a transaction with this kind of banking. For carrying out a transaction, you can use any of the devices such as a laptop, desktop, tablet or a mobile phone. One thing you need to ensure, you should have a fast and reliable internet connection. You can avail of internet facilities from any of the internet service providers (ISP) such as BSNL, Airtel, Idea, Vodafone, Reliance and many more. In case you are using a mobile or tablet you can even download the relevant app meant for internet banking.South Indian bank is one of the bank in India with highly secured and flexible Internet banking.

Other than the device and an internet connection, what you require is authorization from your bank for proceeding with internet banking. Asking your bank to authorize you is a very easy procedure. In case your savings account hasn't come with an internet banking provision, all that you need to do is fill a relevant form giving your savings account details and hand it over to your bank. On receipt of the form and necessary verification of your account details, the bank will almost immediately allot you with an id and password for internet banking. However, some of the banks might ask you to write an additional application to the bank manager for providing you with the facilities of internet banking. In that case you can write a hand written application in a plain white paper and submit the same to the bank manager or the concerned clerk. For getting help in writing an application to the bank requesting for net banking facilities, you can go through this article on application format for internet banking.

Once you have obtained the necessary id and password, you are now ready to experience the advantages that internet banking provides to you by bringing banking services at your doorsteps. I will now enumerate some of the many advantages that can be derived from online banking. They are as follows.

Advantages of net banking

  1. Internet banking saves on considerable amount of time. You don't have to spend time visiting your bank or standing in queues that are often the case during peak hours and in the beginning of months.
  2. Sending money through online banking to your near and dear ones and to others is considerably cost effective, as you don't have to pay for the hefty bank charges for making demand drafts. Add to that, the money saved on fuel or bus/auto fare.
  3. Internet banking makes it possible for you to do ticket bookings for buses, trains and airlines from the comforts of your home. You need not spend your valuable time heading to reservation counters and standing in queues.
  4. You can satisfy most of your shopping needs by visiting any of the online shopping portals and pay through your net banking account.
  5. Paying utility bills like telephone, electricity, property taxes, income taxes are all possible by visiting the concerned website and paying through internet banking.
  6. Whether you want to top up your mobile phone or your dish TV connection, you can simply pay for them by pressing a few clicks.
  7. Online banking is a very easy way to open fixed deposits in your names. You need not even visit the bank and fill a bunch of forms. Just fill a few relevant columns and your e-fixed deposit is ready for you. It is also very easy to encash even before maturity, if the need be.
  8. There are other facilities like, you can apply for demand drafts, order cheque books, view your account balances, transactions, tax deductions and a lot more. Whenever required you can download account statements too.
  9. You kind of have permanent access to your bank and can transact at any time of the day, any day in the week.

A few demerits

Sure, like most other things, internet banking has a negative side to it. They are mostly security issues. One has to be very careful while doing any kind of online financial transaction. Some of the points you should take care of while doing financial transactions on the net are:

  1. Whichever device you use for carrying online transactions, ensure that you have a good antivirus and internet security software loaded into it. Also see to it that the antivirus software is regularly updated.
  2. Don't ever respond to phishing mails. Most of these mails tend to obtain vital information of your account when you respond to them. Responding to such phishing mails often results into accounts getting hacked and your money getting compromised.
  3. Revealing login data like id and passwords to others is not at all recommended and one should be very careful from such people.
  4. Doing financial transactions in internet cafes and in public places is very dangerous. Quite often the login information gets stolen at such places.
  5. Then there are many malware and social engineering attacks, which fraudulently persuade you to transfer money to fraudsters. On the name of your bank and a test transfer, they will ask you to transfer a certain sum. Many have lost their hard earned savings to such fraudsters.
  6. Even though beneficial, the reach of internet banking is limited. One needs to be educated as well as internet savvy to be able to use internet banking for financial transactions. It's mostly in the cities and towns that people use the facilities of net banking.
  7. Then there is another drawback, if at all one calls it as a drawback. With the power to shop sitting in the comforts of home you are very likely to shop more than your requirement. We need to be a bit prudent in deciding what we need and what we can do without.

A quick wrap up

So it is very clear to us that internet banking has numerous advantages. It has changed how we bank, shop and pay our bills. But one has to be very careful while using net banking for any kind of financial transactions. One should remember that banks never ask us for our login id or password. They will never ask us for any test transfer either. In case you receive such mails or promos that ask for your bank details or ask you to send money, never ever respond to them. Delete such mails and messages and if possible inform your bank about such things. Keep in mind that a safe and secured approach will lead you to a happy and profitable experience in internet banking. I will request readers to share their experiences, if any, of internet banking, both positive and negative. It will be then of great help in educating one and all about internet banking.

Article by Dhruv
Dhruv is an electrical engineer by profession. Apart from liking his job, he has a special love for writing and has often dabbled in writing scripts for skits and short plays. As a Content Developer at ISC, Dhruv is having a whale of a time, showcasing his writing skills.

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Author: Kailash Kumar10 Sep 2016 Member Level: Platinum   Points : 1

There are other benefits associated with internet banking like account management features which enables the account holder to view transaction history, view current balance, view past statements etc. Also, internet banking enables tax management e.g. online tax payment, view TDS forms, tax e-filing etc. Yet another feature associated with the internet banking is investment through Demat accounts etc.

Author: Swagatika Pattanaik13 Sep 2016 Member Level: Gold   Points : 8

Nice article written by the author. In this modernization and busy schedule for every one who ever using Internet should aware about Internet banking. As Many people afraid to and not aware about this service, so banks should arrange awarness programme to educate more and more customers.

As author has said you can transfer money to anyone. Just add a payee (with some details like customer name, account number, IFSC code) and you can transfer through NEFT, RTGS, IMPS. As IMPS is the instant transfer method, so you can transfer money to your friend or relatives, or employees any time (24x7, 365 days). You can request for fixed deposits, recurring deposits, can apply for a loan through internet abnking, can update your mobile number, communication address, can download your statement etc. Also you can do lots of online transactions through Internet banking as mentioned by the author.

The additional benefit is by using internet banking you not only save your time and money but also you get reward points from banks which can be converted after certain level as cash or gifts. Also you save lots of paper work, stationary items of banks.
But before you start internet banking, kindly get proper knowledge of all functions and features from authorized bank person only.

Author: Partha K.15 Sep 2016 Member Level: Platinum   Points : 6

I have three bank accounts, but thanks to internet banking facilities, I have not visited two of these banks for more than two years! For me, internet banking is a blessing and it saves lots of time, energy as well as money, because I can save the transportation cost for to and fro journey to the banks located at faraway places from my present residence and present office. I enjoy all the nine facilities mentioned by Mr. Dhruv, the author, from the comfort of my residence and from my office anytime of the day.
Mr. Dhruv has also mentioned seven demerits of internet banking. In this connection, I am mentioning another demerit of internet banking. In case of sudden power-cut during transaction, I have faced lot of problem in retrieving the money involved in the transaction. Every person who has experience in internet banking, has faced this particular problem several times.
Concluding my response, I would like to thank Mr. Dhruv, the author, for this useful article.

Author: Dhruv26 Sep 2016 Member Level: Platinum   Points : 3

Thanks Kailash, Swagatika and Partha for adding more value to this article about internet banking. The additional information given by you will definitely aid our readers in getting a better grasp of the subject. As mentioned by Mr Kailash there are lots of possibilities with internet banking. Perhaps one day I will be able to update this article with internet banking features such as tax management, e-filling of tax, viewing forms associated with tax deducted at source and many more. And yes Mr Partha, interruptions in power and internet connections is a common problem which we all have experienced, one or the other time. With improved infrastructure I hope we will be one day able to overcome such issues. After all, internet banking is here to stay for the long term.

Author: K Mohan17 Jan 2017 Member Level: Platinum   Points : 2

Through this post the author created greater awareness to the general public who can go for internet banking and the precautions to be taken while transacting. What I presume is that those who are elders and having bank account won't believe in internet banking and they would get satisfied only when they visit the bank and get the things done in front of their eyes. For example if a FD has to be renewed, there is no provision for the bank to do so through internet banking as the account holder must bring the FD receipt and he must personally sign the same either for renewal or for closing the FD. So in some cases visiting bank is compulsory and we cannot fully depend on internet banking for every need. Moreover those who have much time in their life, they would like to toil and not sit and get the work done.

Author: Venkiteswaran29 May 2018 Member Level: Diamond   Points : 7

It is now almost two years since this article was posted. Naturally, the dimensions and ground realities have changed. Internet banking is now an essential and integrated part of our life. Now there is no escape from it and it is here to stay until something better replaces it entirely.
Just as it is becoming more and more used, it is also facing more and more threats and attacks from criminals.
So now the discussion focus is not on pros and cons, but how to safeguard the online or internet banking. While all the possible and prudent precautions and measures are taken by the banks, the network providers and the users also have to be prudent, alert, aware and vigilant in this regard. Internet banking users should treat their transactions with the same prudence and precaution as if they are dealing in cash in public.
If we use the internet banking carefully with proper precaution and vigilance, then this is very easy and convenient. That is why some banks advertise it as ‘the bank branch in your home’. After the popularity of internet banking via mobile phones the same has been changed to ‘bank in your pocket’. So we should take due care of them.

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