The introduction of online banking has its inception from 1980s when internet banking had a much different concept and practice than it does at this time. In December 1980 the first established domestic electronic banking was introduced by the United American Bank, a community bank located in Knoxville, Tenn. United States collaborated with Radio Shack to produce a secure TRS-80 custom modem that would allow bank customers to securely access account data. The resources offered for the first year included bill pay, balance checks and credit transfers, game access, budget and tax calculators, and everyday articles. During the late 1990s, internet banking came to India. ICICI Bank was the first bank to promote its use and in 1996 provided its customers with internet banking services. However, online banking only developed in 1999 with lower internet costs and increased knowledge of electronic media.[1]

The world economy is undergoing a large financial crisis due to the outbreak of such hazardous pandemic COVID’19. The technological advancements had started to undertake a paradigm shift wherein such transformations have led to the devolution of conservative banking system and evolution of a technically advanced banking system. The consequences and dependence of man on internet or virtual banking is being supported in almost all the industrial sectors. The nature of such a banking system does not involve too much trouble on the part of the consumer by traveling from one place to another but enables the work being done by just few clicks on their mobile phones. The increased utilization of internet facilities has led to the immense growth of e-banking in India.

India has been experiencing lockdown and curfews since the past 2 months which has even completely banned entry in few contaminated zones. Now the problem that arises here is that how will the people having their bank accounts in those contaminated zones avail their services? The simplest and the most precise answer to this question can be solved by bringing into limelight the practice of e-banking services by most of the population. These services have not only simplified but also reduced the burden of the banks as long as they are able to provide us with proper data protection and security.

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This article aims to discuss the inception and the meaning of e-banking and how this is gaining momentum during this COVID’19 pandemic.



E-banking is also known as internet banking, virtual banking, electronic banking or online banking. Countries have incorporated this system of banking with advanced technology and initiates such as Digital India, jio services and other mobile data plan services have ensured easy availability of internet facilities at almost every Indian’s place. It is a program that provides a customer with the facility to perform financial and non-financial transactions from their net bank account. A user can access a website or an online application to transfer or accept amounts from their accounts to another or from another account to their own. This actually supports the bank to bank facility as the transaction takes place internally between them and the customer is served with the result. The bank cats a medium or a resource to carry out such financial transactions. The communication takes place through internet by accessing it in devices such as computer, laptop or mobile phone. Such facilities are made available readily to the customers who have an account in the bank providing such internet banking facilities.

Such banks usually provide the customers with two types of websites i.e. transactional and informational websites. Transactional websites allow customers to carry out transactions via the website of a financial institution at the start of banking transactions or the purchase of goods and services and on the contrary, informational websites are the ones that allow customers to have access to general information on the financial institution and its goods or services through information websites.[2]

Banking services have expanded over the years and are now offering services such as ATMs, Telephone Banking, Electronic Clearing cards, Smart cards, EFT System, ECS, Mobile Banking, Internet Banking Telebanking and Door-step Banking. In addition to these, online banking services also include Bill Payment, Funds Transfer, Investing, Point-of-Sale Systems, Direct Deposits and Withdrawal, Pay by Phone Systems, etc.



Social distancing and avoiding of personal contact is the most crucial way to prevent the spread of COVID’19. This means that the people are expected to stay indoors and should only move out of their house if essential. This will eventually minimise the flow of cash and also less number of people will come in contact with each other. Hence the need to support e-banking arises at a vast scale especially during the times of such widespread pandemic.

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Enabling proper banking services through digital means has received seemingly good amount of acceptance throughout the nation. To ensure and enable such smooth flow of cash amidst this pandemic, RBI has supplied Rs. 1.2 lakh crore from April 1 to April 14 to currency chests across the country to meet the increased demand for currency.[3] The payment facility is still being used through Paytm, Google Pay, UPI Pay facilities which are also in immense demand these days.

The ATM operations have increased to such levels that the machine needs a refill almost everyday on a regular basis in spite of facing logistics problem. Even if the businesses have experienced a downfall in recent times, use of money or monetary facility will never come to a hault.

When this pandemic outbroke, it was decided to open a bank in every five kilometers in almost all the major cities. But at the same time, these banks have been cooperative enough in letting people enable and enjoy digital banking facilities. This is the only way by which situations such as people getting infected can be prevented. However, the government has been providing the poor class of the society with monetary assistance for which these banks ought to have been opened since the people living in rural areas are not familiarized with the digital world.

In these times, it is extremely essential for a customer to be informed about the banking frauds because an alert and a well-informed customer in advance in less likely to fall for such bank frauds. The HDFC Bank has undertaken a safe initiative called the ‘Secure Banking during COVID’19’ in which the bank will educate their customers as well as the general public about three types of emerging frauds. These are namely EMI moratorium frauds, COVID’19 apps and social media phishing.

Even though banking services were included as a part of essential requirements, assure of social distancing still has to be made mandatory with minimum human intervention which makes it possible by ensuring cashless transactions. Moreover the Public Sector Undertakings are also undergoing a massive change by consolidating into better technology like other large banks.

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The engine of the Indian economy had been running since this lockdown has started and is likely to not put a hault to their services. Even centrally banks have been operating on a regular basis facilitating sustained and robust growth of the economy. But at the same time, it might be difficult for the banks to give credit facility to their customers because at a glance they cannot be assured of their customers credibility to repay such loans. However, returning to EMI payments have been extended to be paid for a considerable period of time.



As a matter of fact, online banking has undergone a major focal turning point in the Indian market. The people of our generations are slowly and gradually becoming accustomed to the new advanced technologies. Due to the resources being applied to support such technological developments, India will definitely meet its goal of a Digital India. This pandemic is indeed a golden opportunity for the banking sector to promote and adjust Indian people into digitalization and modernization.

Post this pandemic, the Indian economy is expected to under digitalization in the banking sector by embracing neo technologies, channels of digitalization, security, privacy and customer trust, policy and compliance. Even during these times of such difficult situations when the economy is undergoing a downfall, these banks are still assuring their regular services and will surely help in the revival of our economy.


[1] Iyengar, J., & Belvalkar, M. (2010). Case Study of Online Banking in India: User Behaviors and Design Guidelines. Human Work Interaction Design: Usability in Social, Cultural, and Organizational Contexts IFIP Advances in Information and Communication Technology, 180–188. doi: 10.1007/978-3-642-11762-6_15


[3] https://www.financialexpress.com/industry/banking-finance/banking-system-provides-services-seamlessly-during-covid-19-crisis/1931990/

Author: Shubhi Dhiman,
School of Law, UPES Dehradun; 3rd year

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