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This article has been written by Manasi Sheth pursuing the Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho. This article has been edited by  Prashant Baviskar (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho).


Digitalization has turned the world upside down. With the constant upgradation in technology, e, all  sectors have benefitted, the banking sector being no different. Remember a time when one had to stand in long queues to deposit cheques or negotiable instruments or when people could not transfer money on a bank holiday? Well, we have  left those kinds of days behind us. Now, the  transfer of money from one account to another is just one click away. Payment to vendors has become so easy.  Out shopping for vegetables? Forgot your wallet? UPI payments are just a click of your phone away. Modern-day banking has made life easier and simpler. Electronic signature has replaced physical signature. There was a time when buying something meant the hassle of dressing up and stepping out but shopping these days is also a click away. Liked a dress online? E-banking to your aid. 

Covid-19 has changed the dynamics of monetary transactions. Most people were out of jobs, out of cash, and had to stand in long queues outside the banks for cash withdrawal. These hassles made people turn to digital banking. It was at this time that   UPI payments such as Paytm, Google Pay, BHIM, etc gained their  footing in the Indian banking sector. According to a survey by Statista Research Department 32% of the people who took the survey turned to digital banking in 2020. Most people think Internet Banking and Electronic Banking are one and the same but there is a difference between the two.

Electronic banking

Electronic Banking or as better known as E-Banking is a form of banking which can be done using a form of electronic means such as a laptop, computer, mobile, tablet, Etc. It allows individuals and corporations to access all the banking and financial facilities using networks such as the internet. 

There are different types of E-banking facilities such as:

Types of E-banking

Out of all these Automated Teller Machines are the most popular type of E-banking. These Machines allow people to withdraw funds, deposit them, set or change their card PIN and other services but the banks do charge a nominal fee after the limit of a certain specified free limit is crossed, if such transaction is done from any other bank’s ATM.

These days mobile banking is gaining a foot in the banking sector since everyone these days  owns a smartphone which has made banking easier with the aid of banking apps and  UPI apps. All you have to do is register with your bank for mobile banking, set up an id-password or in case of UPI, set up an UPI pin, set daily limit for transaction, and you are good to go.

Almost everyone these days owns a debit card. With this card you can directly access the funds available in your bank account using the debit card pin. You can usually set  a debit card pin  using the ATM facility.

E-banking also facilitates direct deposit and withdrawals. Under this service, the bank allows the  customer to approve regular paychecks or give the bank the authority to deduct funds for instalments.

Electronic Banking has a much wider scope than Internet banking. We can also say  internet banking is a form of E-banking. Let us take a look at what internet banking actually is, its scope and advantages. 

Electronic Banking also provides services such as:

  • Mobile Banking;
  • E-commerce shopping;
  • Debit Cards;
  • Internet Banking;
  • Electronic Clearing Services;
  • Electronic Funds Transfer;
  • ATM’s;
  • Telebanking.

Internet banking

Internet banking,  also known as net-banking or online banking, is an electronic payment system which enables the customer of a bank or a financial institution to make financial or non-financial transactions online using the internet. This service gives customer’s online access to almost every service provided by a bank, which is available through a bank’s local branch including NEFT/RTGS fund transfers, deposits, and online bill payments.  Internet banking can be accessed by any individual who has registered for online banking at the branch where they hold an account. After registering for online banking facilities, a customer does not even need to visit the bank every time he  or she  wants to avail of a banking service. It is not only very convenient but also a very secure method of banking. Net banking portals are secured by User/Customer IDs and passwords and the passwords are to be changed frequently so as to remain safe.

Features of internet banking

  • Safe and secure method of banking;
  • Hassle free process;
  • Avoidance of queues for all utility bill payment;
  • Easy transfers from one account to another;
  • Unique user id and password;
  • Application for fresh cheque book;
  • Keep a check on your balance and all investments.

Internet banking also provides various services, such as:

  • NEFT/RTGS funds transfer;
  • Balance Check;
  • Utility bill payment;
  • Open or close fixed deposit account;
  • Buy sovereign gold bonds;
  • Buy Insurance;
  • Set-up auto payment;
  • Book all kinds of tickets online;
  • Issue of Cheque book;
  • Buying/selling Shares, IPOs;
  • Buying or Selling using E-commerce websites;
  • Daily Account Statements.

Advantages of internet Banking

  • One of the most important and prominent features of internet banking is its 24×7 availability, most of the banking transactions can be done even after the banking hours and are not time restricted.
  • Another one is that one can keep a proper track on all their transactions.
  • It is also very quick i.e., people do not have to visit their bank’s branches for any transaction, it can be done directly with a touch or a click.

Comparison between e-banking and internet banking

The terms ‘E-Banking’ and ‘Internet Banking’ are often misunderstood and confused with each other but that is not the case, let us break down these two phenomena and understand their points of comparison. 

  1. Definition
E-Banking: E-Banking is a blanket term used to indicate a process through which a customer is allowed to carry out personal  or commercial banking transactions using an electronic and telecommunication network. It is a product offered by banks which facilitates online banking, with the help of which the customer can have access to the bank account in just one click.Internet Banking is a method of banking in which transactions are conducted electronically via the internet.
  1. Types of Service

E-banking includes various regular transactions such as internet banking, mobile banking, ATM’s, smart cards. It is one of the latest additions to electronic banking.

Internet Banking is helpful for traditional banking services offered by a bank’s branch such as funds transfer, online payments, bill payments, and more.

How to use these services?

To use the services of electronic banking and internet banking, the company or individuals need to first and foremost own a bank account with banks that offer such services, then apply for such services at their bank’s local branch. The banks normally within 24-48 hours process such requests and then assign a temporary unique id and password for internet banking to the customer through this process customers can also apply for M-Pin for mobile banking (which can later be changed by the customer).

Are electronic banking and internet banking one and the same?

No, as discussed above the terms electronic banking and internet banking are often misunderstood and confused with each other. However, both of those terms are different but not mutually exclusive. Electronic banking is a wider/broader concept which includes services such as internet banking, mobile banking, ATM, debit card, etc while internet banking is the latest addition to e-banking is a form of electronic banking which offers traditional banking services like viewing account statements, balance check, funds deposit, withdrawal, transfer. Thereby we can say that internet banking is a part of electronic banking.


The banking infrastructure has changed drastically with increasing technological advancement in the banking sector. Just a few days back I myself used the facilities of mobile banking to buy stocks of a company.  The Pandemic that we faced has changed the way we use banking facilities. People prefer using modern contactless banking methods. Traditional banking is slowly starting to become a relic of the past. Modern-day banking has eliminated the need for paper. Financial transactions have become fast-tracked with a reduction in the need for human assistance in the banking process.  With advantages, however, come certain disadvantages such as online frauds. People are becoming easy targets for phishing. People are not cautious enough with the Id-passwords, M-Pin, UPI id and PIN, CVV number, they share it with others and that is how fraud occurs. With the banking sector introducing new ways of transactions, they should also conduct sessions on educating the customers for such services.



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