Do you find your bank really convenient? How much are your bank's telebanking and automated banking services helping you? BT provides answers to the FAQs on the seamless world of e-banking.

By Larissa Fernand

Dear Money Minder,

I have noticed that people want to open accounts with banks that offer telebanking services and have Automated Teller Machines (ATMs). The reason cited: easy accessibility. But I fail to see the logic. Aren't nationalised banks, with branches across the country, as--if not more--accessible?

Questioning Depositor

Dear Questioning Depositor, you refer to the word accessible in a narrow sense. Accessibility shouldn't be restricted merely to the number of branches a bank has. We are in the age of e-banking--banking anytime, anywhere--which is possible only through ATMs and telebanking. Hence, the move from the teller to the telephone. And in the age of cellphones, this provides the customer with much more flexibility.

After all, if you just want to know your bank balance and don't have the passbook with you, a mere phone call would resolve the problem. And if you are desperate for cash, but the bank's shutters are down on a particular day, just visit your ATM. In case of nationalised banks, even if it has many branches, you can conduct transactions only from the branch where you have an account.

Dear Money Minder,

What's the big deal about telebanking? Neither can I withdraw money over the telephone nor can I deposit it. I have to make that trip to the bank.

Practical Depositor

Dear Practical Depositor, the telebanking facility basically allows access to information over the telephone. It comes in handy when one needs to enquire about the balance deposit, term deposits, renewals, deposit rates, products and services, and requesting for a statement of accounts, details of the last five transactions by fax, and requisitioning cheque books et al. Of course, if you wish to make deposits or withdrawals, a visit to the ATM at the location most convenient to you will suffice. And before you ask what exactly can be done on the ATM, let me state the array of services. You can deposit cheques, check out the previous 10 transactions, make a request for a cheque book or a statement, request for a draft to be made, and transfer money from one account to another. But if you wish to do the latter, you will have to make sure, with your bank, that all your accounts are linked to your ATM card.

Dear Money Minder,

You are wrong on that front. A friend of mine wanted to withdraw Rs 10,000, and he was unable to do so through the ATM.

Angry Depositor

Dear Angry Depositor, I couldn't agree more. Every bank puts a cap on the amount that can be withdrawn in a single day, and you're bound by those limits. Some banks vary the limit, depending on the discretion of the branch manager. If he finds that a long-term relationship will be fruitful, you do stand to benefit, through an increase in your ATM withdrawal limit. Also, withdrawals are not permitted in any denominations except in multiples of Rs 50 and Rs 100. Moreover, if you want to dispense with loose change or get more, just forget it. The ATMs don't accept coins. And if you decide to withdraw a huge amount at the end of a long weekend, the machine will probably run out of cash. The machine can also be non-functional because of accounting problems, maintenance, or repair work.

Dear Money Minder,

Sure enough, the ATMs can be accessed any time, but the concept of any place is still in doubt. First, ATMs are located only at few places. Furthermore, they are usually located at bank branches, which, obviously, means making a trip to the bank.

Adamant Depositor

Dear Adamant Depositor, you do have a point. But it may not hold good for long. The first modern ATM was introduced in America way back in 1969. However, it was only in 1987 that India got her first ATM when Hongkong Bank introduced it. But we are fast catching up. Not only are new players entering the fray, but the existing ones are also increasing the number of their ATMs.

Hongkong Bank already has 13 off-branch ATMs, the latest being at a petrol pump in Mumbai. Centurion Bank has island model drive-in ATMs, in Kochi and Calcutta. The banks whose ATMs have inter-city connectivity can access that account in any city via the ATM. And with the Shared Payment Network System (SPNS), you won't have to make a trip to your bank's ATM. You can visit any of the member ATMs.

Dear Money Minder,

Did you say that I can use my Bank of India ATM card at the Citibank ATM? If so, does this apply to every bank?

Bewildered Depositor

Dear Bewildered Depositor, let me make myself clear. The SPNs was started in Mumbai early this year. It is a large network of ATMs of all foreign, public sector, and private banks that are connected to a network. There are 45 such ATMs in Mumbai. A customer possessing the ATM card can go to any of these ATMs. The card will contain data such as the name of the card-holder, the bank code, the branch code, and the personal identification number (PIN). This facility will be extended to other cities as well.

Dear Money Minder,

What if somebody gets access to my account number? What are the security measures against this possibility?

Paranoid Depositor

Dear Paranoid Depositor, where ATMs are concerned, you have a PIN that you have to punch in for each and every transaction. The same is true for the SPNs. So, even if you lose your card, nobody will be able to use it as they wouldn't know the pin. Also, if someone does try to use your card, as a safety measure, the machine will swallow the card after three failed tries.

As far as telebanking goes, here too a telephone identification number (TIN) is given. This too has to be punched in after you punch in your account number. If the service is voice-automated, you keep on selecting your options as you go along. If it is operator-assisted, then you will have to state your account number. The operator may ask you specific details such as address, phone number, and your date of birth. This is done to verify the authenticity of the person who is on the line.

Dear Money Minder,

So, the customer has the going really good. But how does the bank benefit? Surely, there must be some hidden cost. After all, the bankers are in the business of making money and I can't imagine them offering a free ride to anyone.

Sceptical Depositor

Dear Sceptical Depositor, you don't mince words, do you? Banks benefit as much as their customers. One is that they are going in for volumes. After all, they are targeting the upwardly-mobile customers who do not have the time to visit the bank for mundane transactions. And, believe it or not, from the bank's point of view, it works out to be much cheaper in the long run. The brick-and-mortar form of delivery, a.k.a the branch, is the most expensive one. ATMs and telebanking lightens the load at the counter and reduces teller costs. Hence, such delivery channels as well as pc banking and Internet banking are proving to be far less costlier.

When Citibank introduced PC banking in the US in the 1980s, it was offered as a cost to the subscribers. Since 1995, however, it is being offered as free service. Banks actually find it cheaper because the cost of updating, changing, and informing is negligible. And the customers just have to download it. This way, the bank can service millions of accounts. It will, thus, eliminate fully-staffed branch operations. One can safely predict that e-banking will be the most important delivery channel of the future.

Dear Money Minder,

On a trip to the US, I found that my friends were in touch with their respective banks through their PCs. In fact, they did all their banking with the help of the PC. Is there any bank offering this service in India?

Hi-Tech Depositor

Dear Hi-Tech depositor, to answer your last question first: PC banking is not available for retail consumers as yet. Studies in the US indicate that 40 per cent of the households had PCs. In fact, by the year 2000, on-line consumer banking will generate $860 million in the US.

However, the situation in India is completely different. Some banks, like Citibank, ICICI Bank, and Global Trust Bank, have created their Websites, but they are not interactive in the sense that such services are still not available. However, if you do have an Internet connection, do check out Security First Network Bank (www.sfnb.com), the world's first bank on the Internet. Headquartered in Atlanta, this one does not have a single branch. You can visit it on the Net, and get a real-time feel of the virtual bank of tomorrow. For, it will still be a few years before you can go banking on the Net in India.