1. INTRODUCTION:

As we know India lives in villages, nearly 70 percent of India’s population has found their livelihood in villages and people in this area have half of Indian consumption. Now a days increasing urbanization and migration have attracted ruralites to colourful cities, it is predicted that 63 percent of India’s population may live in rural areas by 2025. Therefore we cannot ignore the importance rural economy and rural parts will continue to remain significant to the Indian economy. According to the 2011 census, there are 6,40,867 villages in India and about 85 crores of Indian population lives in these villages among 130 crores of total population.

Today, customers are considered as the celebrities for any economic organisation.

Even Consumer has awareness to exercise his/her rights. Rural customers are also not free from this. The rural markets have the potential to reach $500 billion by 2020. E-banking is gradually replacing the traditional branch banking system and is introducing advanced technology. Customer awareness is key ingredient to bring the hatric success to banking sector and also to increase the market share.

E-banking is defined as delivering technology based banking services for 24x7 to its customers. The changing global scenario is inducing banking sector to adopt this latest technology. Banks are also interested to deliver value based services with the help of advanced electronic and telecommunication technology. Our country has an extensive network of bank branches in rural areas. Many of them are commercial banks, the main motto of this extensive growth of bank branches in rural India is financial inclusion. We cannot ignore rural parts of India because regional disparity is also one of the drawbacks of Indian economy. The rural banking system is clearly more inclusive of low income families than those provided by the commercial banks.

2. WHAT IS E- BANKING?

Electronic banking is defined as “the automated delivery of new and traditional banking products and services directly to customers through interactive communication channels”. E-banking which is gradually replacing the traditional branch banking system. Each bank tries to satisfy customers because they are central to optimal performance and financial returns. Even in rural areas customer awareness has become the key point. If rural customers are informed and induced to use latest technology the dream of cashless economy becomes true. With this advent any bank can identify the key success factors to survive in intense competition and increase the market share. Today, the concept of electronic banking has made ‘anywhere and anytime’ banking a reality.

A. Services Covered Under E-Banking

Services covered under E-banking as follows

1 Automated teller machines

2 Credit Cards,

3 Debit Cards,

4 Smart Cards

5 Electronic Funds Transfer system

6 Mobile banking

7 Internet banking

8 Telephone banking.

All Banks are making greater use of E-banking facilities to provide best service and to face cut throat competition at entire globe. The spread of E-banking is also greatly helping the ordinary rural customers.

B. Benefits of E-Banking:

E banking ensures various attractive services for banks and customer's. e-banking has made life much easier and banking much faster for both customers and banks.

· It saves time spent in banks

· It provides ways for international banking.

· It provides banking throughout the year 24/7 days from any place have internet access.

· It provides well-organized cash management for internet optimization

· It provides convenience in terms of capital, labour, time all the resources needed to make a transaction.

· Taking advantage of integrated banking services, banks may compete in new markets, can get new customers and grow their market share.

· It provides some security and privacy to customers, by using state-of-the-art encryption and security technologies.

3. OBJECTIVES:

Electronic banking has become very much popular throughout the globe. It has given customers easier, faster and more accessible banking services. Off course customers are also very much interested to practice E-banking offers. The primary objective of the research is to know the benefits of e-banking to rural people.

Following are the main objectives of the paper

· To understand the meaning of e-banking

· To analyse the importance of ICT in Indian banking sector

· To know the role of banking technology in rural India

4. METHODOLOGY:

The study mainly includes literature review from secondary data. The secondary data sources include RBI reports of the respective banks and other relative information published on the banks, journals and other internet sites. The study reveals that electronic banking practices are useful not only for the banking sector but also helps banks to operate their business at lower cost in rural areas.

5. BANKING TECHNOLOGY AND RURAL ECONOMY:

Indian banking sector has witnessed a complete transformation both in its functioning and delivery of services. Today technology being the main driving force for maintaining customer base and for attracting new customers. Technology has enabled banking customers to get complete information from banks for anything and everything. As the advancement of technology has taken place with immense use of internet, mobiles and online bill payments banking sector in India has got a new facet altogether.

A. Banking Development in Rural India:

The banking industry has witnessed tremendous growth in volume and complexity during the last few decades. Despite making significant improvements in the areas relating to financial viability, profitability and competitiveness, there are concerns that banks have not been able to reach and bring vast segment of the population, especially the underprivileged sections of the society into the fold of basic banking services.

There is a positive correlation between technology advancement and banking development in rural areas. Brach enhancement in rural areas and technology advancements such as ATMs, internet banking, mobile banking, NEFT, RTGS etc together play key role in determining the improvement of productivity in banking centers and transparent services for customers.

Rural Banking is now a large opportunity and will be captured those who remove the current barriers of profitable scale. Skewed distribution of bank branches is observed across population groups with 6000 per branch in urban areas and 24000 in rural areas. Out of 6.4 lakh villages, the presence of bank branches with full-fledged services is available only in 34000 villages and recently another 73000 villages are covered under BC model. Still more than 5 lakh villages remain unbanked due to structural and operational issues such as infrastructure, distance, costs, viability etc. Though, rural India constitutes 83 crores of country’s population, its share to total deposits (9%) and an advance (8%) is abysmally low compared to urban counterpart. Absence of banking services in villages is the cause to flourish informal financial markets which suffer from several imperfections such as high cost of credit at exploitative terms, loss of precious savings on account of fly-by-night operators, inordinate delays in effecting transfer of funds and settlement of accounts. Thus, the financial exclusion not only widens the ‘Rich-Poor divide’ but also leads to ‘Social Exclusion’.

B. Technology Based Banks in Rural India:

The people who reside in rural areas many times are unable to pay visit to branches located at distant places due to time, cost and opportunity. Therefore, it has instigated banks to reach out customers through a variety of technology driven delivery channels such as Micro ATMs, Bio-metric ATMs, Mobile ATMs, and Smart Cards etc., because they are most cost effective as compared to traditional banking structure. ATM has brought considerable changes in Indian banking space with significant qualitative improvement in delivery of banking services and within short span the presence of ATMs are outnumbered the physical branch network.

Micro ATMs: Though there is considerable improvement in ATM network, the presence of ATMs in rural areas is very limited. Banks are not keen to install ATMs at Rural/Semi Urban centers on account of high investment and low transaction volume. In order to make the ATMs viable at these centers, there is a need to deploy low cost ATMs with basic features such as cash withdrawal and balance enquiry etc. It is convenient and cost effective to the customers compared to pay visit to the bank branch located at nearby center.

Biometric ATMs: The penetration of ATMs into Rural areas may not serve the envisaged purpose unless it is put to use by illiterates/semi-literates whose presence is predominant in unbanked areas. The existing ATMs are not put to use optimally by rural folk on account of PIN/Password related issues. Introduction of Biometric ATMs enable them to avail hassle-free services as these devices function on thumb print and recognize voice commands in vernacular language.

Mobile ATMs-In this model, ATM is installed in a vehicle, which would move to the pre-determined places at regular intervals to provide Door-step banking. These new breed of ATMs also have biometric authentication mechanisms like fingerprint verification and voice guided animated screens with touch enabled transactions. Mobile ATMs can undertake opening of accounts, which has immense benefit to the residents of unbanked centers.

White Label ATMs-The recent initiatives of the RBI and the Government is to allow white-label ATMs, permitting third-party service providers to set up more ATMs in off-premises areas, which include residential complexes, hospitals, tourist destinations, bus stops and railway stations. These ATMs would not belong to any bank in particular but will be owned as well as maintained by independent service providers. This initiative will enable the excluded segments to avail ATM services as at present majority ATMs are confined to Urban/Metro areas only. However, service provider levy charges which are to be either bear by the Bank or the customer.

Smart Cards: State Governments are actively looking at making pension payments and disbursals under Rural Employment Generation Program using smart cards linked bank accounts. Smart card provides biometric authentication, which would help in reducing frauds and ensure identity of customers. In order to popularize smart cards, all agriculture short term loans and payment of social security schemes are to be dispensed through Smart Cards.

M-wallet is the further extension of Mobile Banking and it acts like a pre-paid account operated through a mobile phone which can be used for small purchases, remittances, bill payments and cash withdrawals. Telecom players are playing significant role in taking this concept forward with strategic tie-ups with banks as service provider as well as business correspondents. As per the recent study, the cost effectiveness is one of the major advantages of the Mobile Banking, as the mobile based transaction cost is about 2% of branch banking, 10% of ATM and 50% of the Internet banking.

T-Banking: Today, we rarely come across a house without Television. It has become one of the cost effective modes to disseminate information and to provide entertainment to the public. Banks may make use of the existing cable network to extend banking services to vast segment using this mode as non-branch service delivery channel.

Even today, rural banks are at evolutionary stage in banking system in India. This paper clearly discusses concept and growth of internet banking in rural areas. The main objective of research is to analyse the role internet banking in rural area.

6. LIMITATIONS:

The following limitations have been found by the researcher

1 The research study has been done from selective secondary materials.

2 Only selective journals, papers and articles have been utilised.

3 It has some time constraints

4 There is the possibility of further updating of this research paper because of updatation in future.

7. CONCLUSION:

As we know that the rural masses play a very crucial and significant role in building up the country’s economy. Therefore banks are eagerly providing more and more banking facilities to rural areas which comprise 61.35 percent of the total population of India, The presence of a strong banking system in the rural areas will not only improve and uplift the Indian economy from its grass-roots level but also the rural population will have scope to participate and contribute in the country’s economic growth.

Now the focus of banks have been shifted from well structured cities to rural banking platform as most of the banks have become technology enabled and different banking committees have made compulsory for all Indian banks to open at least one-fourth of their new branches in the rural areas. As the operational expenses of the public sector banks have shot up extensively, it has become a huge problem for the public sector banks to open up and run them, making the rural banking profitable.

8. REFERENCES:

1 Gurusamy S, “Banking in the New Millennium: Issues, Challenges and Strategies”, Kanishka Publishers and Distrubutors, New Delhi, 2001, pp. 1-62.

2 H.S. Srivatsa, Srinivasan, (2007), research on Banking Channel Perceptions, An Indian Youth perspective, International Marketing Conference on Marketing and Society, 8-10 April, 2007, IIMK.

3 Khan, M.S., Mahapatra, S.S. and Sreekumar, (2009), Service quality evaluation in internet banking: an empirical study in India, International. Journal of Indian Culture and Business Management, 2 (1), pp 30-46.

4 Klinkerman, Steve., (2000), Bridging Two Worlds. (Management strategies in transforming banking companies to compete in e-commerce.). Banking Strategies. September, pp 26-27.

5 Kunukunju Benson, “Commercial Banks in India: Growth, Challenges and Strategies”, New Century Publications, New Delhi, 2008, pp. 61-107.

6 Lichtenstein, S., and Williamson, K. (n.d.). Understanding consumer adoption of internet banking: an interpretive study in the Australian banking context.

7 Reserve Bank of India, Report on Trend and Progress of Banking in India 2013-2015

8 Sharma Himani, “Banker‟s Perspective on e-banking”, NJRIM, Vol. 1, No. 1, June 2011, pp. 71-84.

9 Uppal R K, “E-Age Technology-New Face of Indian Banking Industry: Emerging Challenges and New Potentials”, Journal of Social and Development Sciences, Vol. 1, No. 3, April 2011, pp. 115-129.

10 Uppal R K, “E-Delivery Channels in Banks-A Fresh Outlook”, Researchers WorldJournal of Arts Science and Commerce, Vol. II, No. 1, January 2011, pp. 180-191.

11 Uppal R.K and Kaur Rimpi, “Banking in the New Millennium-Issues, Challenges and Strategies”, Mahamaya Publishing House, New Delhi, 2007, pp. 33-118.

Received on 24.03.2018 Modified on 26.04.2018

Asian Journal of Management. 2018; 9(3):1191-1194.

DOI: 10.5958/2321-5763.2018.00192.0

Group	Population (Crore)	Branches (in ‘000)	Per Branch Population	Share of Deposits	Share of Advances
Rural	83 (68)	34 (37)	24	9%	8%
Urban	38 (32)	59 (63)	6	91%	92%
Total	121	93	13	100	100