Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations

that manage money, including credit unions, banks, credit card companies, insurance companies, accountancy companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises. The term "financial services" became more prevalent in the United States partly as a result of the Gramm-Leach-Bliley Act of the late 1990s, which enabled different types of companies operating in the U.S. financial services industry at that time to merge. Companies usually have two distinct approaches to this new type of business. One approach would be a bank which simply buys an insurance company or an investment bank, keeps the original brands of the acquired firm, and adds the acquisition to its holding company simply to diversify its earnings. Outside the U.S. (e.g., in Japan), non-financial services companies are permitted within the holding company. In this scenario, each company still looks independent, and has its own customers, etc. In the other style, a bank would simply create its own brokerage division or insurance division and attempt to sell those products to its

own existing customers, with incentives for combining all things with one company.

This chapter contains the different innovations in banking products such as EBanking, Mobile Banking, Debit Cards, Credit Cards, ATM, Internet Banking.

Introduction:
With the trend of globalization all over the world, it is difficult for any nation whether big or small, developed, to remain isolated from what is happening around. The growth of e-commerce and Internet has transformed the world into the GLOBAL VILLAGE. Fast development in electronic technology has concerned the computers to take over the bank counters and to convert brick banking into electronic banking. Usage of technology by banks is due to challenge of competition, rising consumer expectations and shrinking margins of banks, which lead to reduction in cost, and enhancement of productivity, efficiency and customer convenience.
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Meaning:
E-banking means, application of electronic technology towards transfer of funds through an electronic terminal, computer or magnetic tape to conduct various transactions like cash receipts, payments, transfer of funds etc. It is often known as banking on net. It does not involve any physical exchange of money, but its all done electronically, from one account to another, using the Internet. With the advent of e banking, customers are benefited by unlimited accessibility through the network of Automated Teller Machines, personal computers or even through mobile phones. Customer can perform various banking transactions such as balance enquires, bill payments, and transaction histories, transfer money between accounts, without having to step to office of the branch.

Features of e banking:
Anywhere any time banking: customers can avail banking facility while sitting at their home/office. Globalization of service: E-Banking has a special feature of globalising banks services all over. Intense competition: E-Commerce is a product of handling intense competition among various banks. Cash less banking: E-Commerce also provides feature of cash less banking as cash is not require in raw form but electronic cash like debit or credit cards may serve the purpose.

Promptness: Another feature of E-Commerce is provides promptness in services.

Process of E-Banking/ procedure of E-Banking

E-Banking process can be explained with the help of following diagram and explanation as under: Verification Of password

Log on to website

Final Approval

Credit Card request

Processing Of information

To make the use of E-Banking user has to go to the World Wide Web and log on to the website.
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Next step follows verification of user ID and password by the website server.

As soon as password is approved on the server, then processing of information will start on the web.

In this step, credit card number will be demanded for online transaction.

If all security measures are completed then the transaction is approved accordingly.

Advantages of E-Banking:
Importance of E-Banking can be explained from four aspects: Advantages

To banks

To customers

To Govt.

To merchant Trader

I. Benefits to banks
Reduction in cost: E-Banking is helpful to banks by reducing the cost of various transactions as compared to traditional cost by way of ATMs Telephone banking. Global coverage: E-Banking provides global network coverage of banks services i.e. through the concept of Anywhere Anytime Banking. Good customer relationship: E-Banking helps in attracting and retaining the customer by properly handling their grievances. Reduction in paper work: E-Banking helps in eliminating endless paper based bank statements, spreadsheets, bulky books of accounts, ledger including the use of calculator.
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 Reduction in frauds and misappropriations: Through E-Banking frauds and misappropriations can be reduced as inter branch reconciliation is possible through internet.

II. Benefits to customers

Anytime banking: E-banking provides 24 hours, 365 days services to customers. Anywhere banking: customers can avail any sort of banking services from

anywhere around the globe from sitting at anyplace. Prompt services: Customer can avail the services of details regarding their

accounts and transactional details instantly. On line purchase: Customer can buy product of bank or invest in any

scheme without actually insisting the bank branch but only through online. Saving in time: With the help of E-banking there is no need for bank

customers to stand in queue for hours to complete financial transactions.

III. Benefits to government

Transparency in transactions: E-Banking provides transparency in transactions i.e. access to information is possible easily. Global market: With the help of E-Banking products of our country will get global market to be popularized properly. Risk of carrying cash: E-Banking provides the facility of cash less banking which helps in growth of economy.

IV. Benefits to merchant traders

Promotion of business: with the help of E-Banking business of merchants traders will be promoted because of increased purchasing power of credit holder.
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Immediate settlement: E-Banking helps settlement, and payment of cash

is possible by the customer. Avoids risks: it helps merchants bankers also as there is no risk of

handling cash.

Limitations of E Banking:
Problems of security: Security and privacy aspects are major issue in case of E-Banking transaction. Various sites are not properly locked at to ensure weather customers money is safe in cyber world or not. High cost: The infrastructural cost of providing E-Banking facility is very high. The banks not only have to automate front-end services but also back office services, which involves high cost. Lack of awareness: Another great hindrance is lack of awareness because effective and wide media efforts in publishing Internet banking need to be emphasized. Lack of computerization: Lack of computerization and low density of telephone lines is also a bottleneck for online banking. In India, out of 65000 bank branches, only 5000 branches are computerized. Wrong assumption by people: Many people are away from net banking on the assumption that it is more expensive than the traditional method of dealing with bank transactions. They still prefer going to bank to perform transactions.

Types of E-Banking services

E-banking Services ATM Card E-cheque Mobile Banking Telephone Banking EFT

1.Automatic Teller Machine (ATM): ATM facility was started in early 1990s by foreign banks like HSBC, City bank. ATM is made to work 24 Hrs a day. For the purpose of withdrawing cash from ATM machine, plastic currency and debit cards are used. 2.Credit Cards: Credit card is another facility produced by E-Banking. Credit card is a product with the help of which a customer can avail various facilities or buy products/services without making immediate payment and that payment could be made at later stage of time. 3. Mobile Banking: Mobile banking provides customer to access their account on mobile phone screen. Routine banking transactions can be performed by just punching a few buttons on the mobile. 4. Telephone Banking: Tele banking is another main service provide by ebanking Tele banking is a service where banks get various phone calls during their working hours. It helps the user to transact various transactions while remaining at home. 5.Electronic Fund Transfer (EFT): E-Banking has given a system of electronically transferring funds .i.e. EFT which involves transfer of funds from bank account of one customer to bank account of another customer electronically. This is done through electronic data interchange (EDI).

6. Electronic Cheques: E-cheque is a system, which provides more security and reduction in overall cost. E-cheque facilitates on line payment. It needs no clearance charges. Issue of E-cheque is more familiar in various advanced countries.

Introduction:
There are rapid changes in the financial services environment, which has led to increased competition by few players and product innovations. Recent innovations in tele communications have opened up an additional channel for electronic banking.

Meaning:
Banks have noticed and availed the opportunity that exists between banking and mobile telephony. SMS (short messaging services) and GSM(global system mobile)of mobile can be used for banking transactions. The mobile banking enables the customers to bank anywhere and at any time.

These wireless devices may give services as hand held PCs. Mobile devices are enabled now days to perform many activities which earlier have been available only as internet services.

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Issues relating to M-Banking

Cost saving: SMS offers revenue opportunities for operators by changing SMS into higher value added applications. The service offerings in SMS banking are numerous and highly cost saving. Simple to operate: The success of M- Banking is due to its user-friendly interface and range of services it offers. Market research: Proper understanding of specific market is key in the success of mobile banking. Research on available payment methods, user habits and key players is required to be done. Players will have to be creative to make users perceive it as beneficial.

Services:
Global system mobile (GSM) is not just about voice communications but also supports wireless personal digital assistant and other devices, just as it supports telephony. SMS tariffs should be lowered in order to capture the markets and to exploits the potential for commercial transactions over mobile device. Many services and schemes are being piloted and some are already available. Few are mentioned here under: Balance enquiry can be made. Requesting for providing bank statement. Requesting countermanding cheque payments (stop cheque) Chequebook request can be made. Cheque clearance alerts are given to customers. Sending account balances every time one makes a withdrawal, which helps in finding out if some one else is using your ATM card.

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Limitations /problems in M-Banking:

Possibility of error is higher than in internet banking. The data transmission is very slow. M-banking services are risky and not secure trials and pilots are still on World

Wide Web to developed enhanced security. M-banking services are not enough versatile. The information knowledge available related to M-Banking is not sufficient. Some non-users of mobile banking perceive it to be complicated due to lack of guidance available. M Banking is not just a service reserved for international banks but for any financial institution wishing to take it. There is a great opportunity to exploit the combination of fast growing consumer device the mobile phone with the richness of internet protocols that will surpass a similar revolution imitated by pc related banking M-Banking has a lot to offer banks and to its customers, but its success depend upon of variety of services, security and user friendly interface its make it easy, cheaper it simple to use.

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Introduction:
ATM facility was started in early 1990s by foreign banks like HSBC, City bank. ATM is made to work 24 Hrs a day. For the purpose of withdrawing cash from ATM machine, plastic currency and debit cards are used. The account number and credit limit of customers are magnetically embedded on a strip of the tape on the back of card. ATM enables user to perform banking transactions by actually interacting with the human teller. This is one of the unattended or unmanned devices usually located on or off the banks premises. Its function is to receive and dispense cash and to handle routine financial transactions. The operation mechanism is that card is inserted into the ATM; the terminal reads the tape data to processes, which activates the accounts. According to the instructions, the details are displayed on the screen and by checking a few keys of the keyboard the user can direct the computer to carry out the financial transactions. An automated teller machine (ATM) is a computerized telecommunications device that provides the customers of a financial institution with access to financial transactions in a public space without the need for a human clerk or bank teller. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard with a chip, that contains a unique card number and some security information, such as an expiration date or CVC

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(CVV). Security is provided by the customer entering a personal identification number (PIN).

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Using an ATM, customers can access their bank accounts in order to make cash withdrawals (or credit card cash advances) and check their account balances as well as purchasing mobile cell phone prepaid credit. ATMs are known by various other names including automated banking machine, money machine, bank machine, cash machine, hole-in-the-wall, cashpoint, Bancomat (in various countries in Europe and Russia), Multibanco (after a registered trade mark, in Portugal), and Any Time Money (in India).

Working of ATM
Insertion of Card into ATM Transmission of Tape data to Processor Activation of account

Actual Transaction Operation by user

Clicking of keys of keyboard

Display of details on screen

ATM will give various options on the screen like: Balance enquiry Mini statement Deposits Cash withdrawals etc. Banks have launched the operation of accepting payments for utility services like electricity and telephone bills etc. Banking on the net is only an extension of the ATM and tele banking services.
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Various facilities produced by ATMs: Cash withdrawals Personal identification number (PIN) change On line balance enquiry Transfer of funds between accounts linked to ones card Request for cheque book Request for account statement

HISTORY:
The first mechanical cash dispenser was developed and built by Luther George Simjian and installed in 1939 in New York City by the City Bank of New York, but removed after 6 months due to the lack of customer acceptance. Thereafter, the history of ATMs paused for over 25 years, until De La Rue developed the first electronic ATM, which was installed first in Enfield Town in North London, United Kingdom on 27 June 1967 by Barclays Bank. This instance of the invention is credited to John Shepherd-Barron, although various other engineers were awarded patents for related technologies at the time. ShepherdBarron was awarded an OBE in the 2005 New Year's Honours List. The first person to use the machine was the British variety artist and actor Reg Varney.The first ATMs accepted only a single-use token or voucher, which was retained by the machine. These worked on various principles including radiation and lowcoercivity magnetism that was wiped by the card reader to make fraud more difficult. The machine dispensed pre-packaged envelopes containing ten pounds sterling. The idea of a PIN stored on the card was developed by the British engineer James Goodfellow in 1965
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In 1968 the networked ATM was pioneered in Dallas, Texas, by Donald Wetzel who was a department head at an automated baggage-handling company called Docutel. In 1995 the Smithsonian's National Museum of American History recognised Docutel and Wetzel as the inventors of the networked ATM. ATMs first came into wide UK use in 1973; the IBM 2984 was designed at the request of Lloyds Bank. The 2984 CIT (Cash Issuing Terminal) was the first true Cashpoint, similar in function to today's machines; Cashpoint is still a registered trademark of Lloyds TSB in the U.K. All were online and issued a variable amount which was immediately deducted from the account. A small number of 2984s were supplied to a USA bank. Notable historical models of ATMs include the IBM 3624 and 473x series, Diebold 10xx and TABS 9000 series, and NCR 5xxx series.

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Introduction:
Debit cards combine the functions of ATM cards and checks. When you pay with a debit card, the money is automatically deducted from your checking account. Many banks issue a combined ATM/debit card that looks just like a credit card and can be used in places where credit cards are accepted. But don't be mistaken -- they are not credit cards. The money you spend comes out of your checking account immediately. Debit and check cards, as they have become widespread, have revealed numerous advantages and disadvantages to the consumer and retailer alike. Advantages are as follows (most of them applying only to a some countries, but the countries to which they apply are unspecified):

A consumer who is not credit worthy and may find it difficult or impossible to

obtain a credit card can more easily obtain a debit card, allowing him/her to make plastic transactions.

Use of a debit card is limited to the existing funds in the account to which it is

linked, thereby preventing the consumer from racking up debt as a result of its use, or being charged interest, late fees, or fees exclusive to credit cards.

For most transactions, a check card can be used to avoid check writing

altogether. Check cards debit funds from the user's account on the spot, thereby
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finalizing the transaction at the time of purchase, and bypassing the requirement to pay a credit card bill at a later date, or to write an insecure check containing the account holder's personal information.

Like credit cards, debit cards are accepted by merchants with less identification

and scrutiny than personal checks, thereby making transactions quicker and less intrusive. Unlike personal checks, merchants generally do not believe that a payment via a debit card may be later dishonored.

Unlike a credit card, which charges higher fees and interest rates when a cash

advance is obtained, a debit card may be used to obtain cash from an ATM or a PIN-based transaction at no extra charge, other than a foreign ATM fee. The Debit card has many disadvantages as opposed to cash or credit:

Some banks are now charging over-limit fees or non-sufficient funds fees based

upon pre-authorizations, and even attempted but refused transactions by the merchant (some of which may not even be known by the client).

Many merchants mistakenly believe that amounts owed can be "taken" from a

customer's account after a debit card (or number) has been presented, without agreement as to date, payee name, amount and currency, thus causing penalty fees for overdrafts, over-the-limit, amounts not available causing further rejections or overdrafts, and rejected transactions by some banks.

In some unspecified countries, debit cards offer lower levels of security

protection than credit cards. Theft of the users PIN using skimming devices can be accomplished much easier with a PIN input than with a signature-based credit transaction. However, theft of users' PIN codes using skimming devices van be equally easily accomplished with a debit transaction PIN input, as with a credit

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transation PIN input, and theft using a signature-based credit transation is equally easy as theft using a signature-based debit transaction.

In many places, laws protect the consumer from fraud a lot less than with a

credit card. While the holder of a credit card is legally responsible for only a minimal amount of a fraudulent transaction made with a credit card, which is often waived by the bank, the consumer may be held liable for hundreds of dollars in fraudulent debit transactions. The consumer also has a much shorter time (usually just two days) to report such fraud to the bank in order to be eligible for such a waiver with a debit card, whereas with a credit card, this time may be up to 60 days. A thief who obtains or clones a debit card along with its PIN may be able to clean out the consumer's bank account, and the consumer will have no recourse.

When a transaction is made using a credit card, the bank's money is being spent,

and therefore, the bank has a vested interest in claiming its money where there is fraud or a dispute. The bank may fight to void the charges of a consumer who is dissatisfied with a purchase, or who has otherwise been treated unfairly by the merchant. But when a debit purchase is made, the consumer has spent his/her own money, and the bank has little if any motivation to collect the funds.

In some unspecified coutriesand for certain types of purchases, such as

gasoline, lodging, or car rental, the bank may place a hold on funds much greater than the actual purchase for a fixed period of time. However, this isn't the case in other countries, such as Sweden. Until the hold is released, any other transactions presented to the account, including checks, may be dishonored, or may be paid at the expense of an overdraft fee if the account lacks any additional funds to pay those items.

While debit cards bearing the logo of a major credit card are accepted for

virtually all transactions where an equivalent credit card is taken, a major exception (in some unspecified countries only, is at car rental facilities. In some
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unspecified countries, car rental agencies require an actual credit card to be used, or at the very least, will verify the creditworthiness of the renter using a debit cardThere are currently two ways that debit card transactions are processed: online debit (also known as PIN debit) and offline debit (also known as signature debit). In some countries including the United States and Australia, they are often referred to at point of sale as "debit" and "credit" respectively, even though in either case the user's bank account is debited and no credit is involved. Some cards are blocked from making either online or offline transactions, while other cards are enabled for both kinds of transactions. Online debit ("PIN debit" or "debit") Online debit cards require electronic authorization of every transaction and the debits are reflected in the users account immediately. The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine (ATM) cards. One difficulty in using online debit cards is the necessity of an electronic authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN, although this is becoming commonplace for all card transactions in many countries. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problems with processing lag on transactions that may have been forgotten or not authorized by the owner of the card. Banks in some countries, such as Canada and Brazil, only issue online debit cards.

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Introduction:
A credit card is a system of payment named after the small plastic card issued to users of the system. A credit card is different from a debit card in that it does not remove money from the user's account after every transaction. In the case of credit cards, the issuer lends money to the consumer (or the user). It is also different from a charge card (though this name is sometimes used by the public to describe credit cards), which requires the balance to be paid in full each month. In contrast, a credit card allows the consumer to 'revolve' their balance, at the cost of having interest charged. Most credit cards are the same shape and size, as specified by the ISO 7810 standard. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. A credit card is different from a charge card, where a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers to 'revolve' their balance, at the cost of having interest charged. Most credit cards are issued by local banks or credit unions. Credit cards are issued after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card. When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates his/her consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a Personal
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identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a 'Card/Cardholder Not Present' (CNP) transaction.

Electronic verification systems allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained from a magnetic stripe or chip on the card; the latter system is in the United Kingdom and Ireland commonly known as Chip and PIN, but is more technically an EMV card.
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Other variations of verification systems are used by eCommerce merchants to determine if the user's account is valid and able to accept the charge. These will typically involve the cardholder providing additional information, such as the security code printed on the back of the card, or the address of the cardholder. Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect (see Fair Credit Billing Act for details of the US regulations). Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount owed. The cr Cit provider charges interest on the amount owed if the balance is not paid in full (typically at a much higher rate than most other forms of debt). Some financial institutions can arrange for automatic payments to be deducted from the user's bank accounts, thus avoiding late payment altogether as long as the cardholder has sufficient funds.

Interest charges Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid. For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even $1.00 of the

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total amount remained unpaid, interest would be charged on the $1,000 from the date of purchase until the payment is received. The credit card may simply serve as a form of revolving credit, or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments. Usually this compartmentalization is the result of special incentive offers from the issuing bank, to encourage balance transfers from cards of other issuers. In the event that several interest rates apply to various balance segments, payment allocation is generally at the discretion of the issuing bank, and payments will therefore usually be allocated towards the lowest rate balances until paid in full before any money is paid towards higher rate balances. Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card or any other credit instrument, or even if the issuing bank decides to raise its revenue.

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Advantages: The main advantages are as follows:

Advantages

To customers

Grace period

To merchants

Benefits to customers:
Because of intense competition in the credit card industry, credit card providers often offer incentives such as frequent flyer points, gift certificates, or cash back (typically up to 1 percent based on total purchases) to try to attract customers to their programs. Low interest credit cards or even 0% interest credit cards are available. The only downside to consumers is that the period of low interest credit cards is limited to a fixed term, usually between 6 and 12 months after which a higher rate is charged. However, services are available which alert credit card holders when their low interest period is due to expire. Most such services charge a monthly or annual fee.

Grace period
A credit card's grace period is the time the customer has to pay the balance before interest is charged to the balance. Grace periods vary, but usually range from 20 to

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40 days depending on the type of credit card and the issuing bank. Some policies allow for reinstatement after certain conditions are met. Usually, if a customer is late paying the balance, finance charges will be calculated and the grace period does not apply. Finance charges incurred depend on the grace period and balance; with most credit cards there is no grace period if there is any outstanding balance from the previous billing cycle or statement (i.e. interest is applied on both the previous balance and new transactions). However, there are some credit cards that will only apply finance charge on the previous or old balance, excluding new transactions.

Benefits to merchants

An example of street markets accepting credit cards For merchants, a credit card transaction is often more secure than other forms of payment, such as checks, because the issuing bank commits to pay the merchant the moment the transaction is authorized, regardless of whether the consumer defaults on the credit card payment (except for legitimate disputes, which are discussed below, and can result in charges back to the merchant). In most cases, cards are even more secure than cash, because they discourage theft by the merchant's employees and reduce the amount of cash on the premises. Prior to credit cards, each merchant had to evaluate each customer's credit history before

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extending credit. That task is now performed by the banks which assume the credit risk. For each purchase, the bank charges the merchant a commission (discount fee) for this service and there may be a certain delay before the agreed payment is received by the merchant. The commission is often a percentage of the transaction amount, plus a fixed fee.

Parties involved

Cardholder: The holder of the card used to make a purchase; the consumer. Card-issuing bank: The financial institution or other organization that issued

the credit card to the cardholder. This bank bills the consumer for repayment and bears the risk that the card is used fraudulently. American Express and Discover were previously the only card-issuing banks for their respective brands, but as of 2007, this is no longer the case.

Merchant: The individual or business accepting credit card payments for

products or services sold to the cardholder

Acquiring bank: The financial institution accepting payment for the products

or services on behalf of the merchant.

Independent sales organization: Resellers (to merchants) of the services of

the acquiring bank.

Merchant account: This could refer to the acquiring bank or the independent

sales organization, but in general is the organization that the merchant deals with.

Credit Card association: An association of card-issuing banks such as Visa,

MasterCard, Discover, American Express, etc. that set transaction terms for merchants, card-issuing banks, and acquiring banks.

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Transaction network: The system that implements the mechanics of the

electronic transactions. May be operated by an independent company, and one company may operate multiple networks. Transaction processing networks include: Cardnet, Nabanco, Omaha, Paymentech, NDC Atlanta, Nova, TSYS, Concord EFSnet, and VisaNet.

Affinity partner: Some institutions lend their names to an issuer to attract

customers that have a strong relationship with that institution, and get paid a fee or a percentage of the balance for each card issued using their name. Examples of typical affinity partners are sports teams, universities, charities, professional organizations, and major retailers. The flow of information and money between these parties always through the card associations is known as the interchange.

Features: As well as convenient, accessible credit, credit cards offer consumers an easy way to track expenses, which is necessary for both monitoring personal expenditures and the tracking of work-related expenses for taxation and reimbursement purposes. Credit cards are accepted worldwide, and are available with a large variety of credit limits, repayment arrangement, and other perks (such as rewards schemes in which points earned by purchasing goods with the card can be redeemed for further goods and services or credit card cashback). Some countries, such as the United States, the United Kingdom, and France, limit the amount for which a consumer can be held liable due to fraudulent transactions as a result of a consumer's credit card being lost or stolen.

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Problems
A smart card, combining credit card and debit card properties. The 3 by 5 mm security chip embedded in the card is shown enlarged in the inset. The contact pads on the card enable electronic access to the chip. The low security of the credit card system presents countless opportunities for fraud. This opportunity has created a huge black market in stolen credit card numbers, which are generally used quickly before the cards are reported stolen. The goal of the credit card companies is not to eliminate fraud, but to "reduce it to manageable levels". This implies that high-cost low-return fraud prevention measures will not be used if their cost exceeds the potential gains from fraud reduction. Most internet fraud is done through the use of stolen credit card information which is obtained in many ways, the simplest being copying information from retailers, either online or offline. Despite efforts to improve security for remote purchases using credit cards, systems with security holes are usually the result of poor implementations of card acquisition by merchants. For example, a website that uses SSL to encrypt card numbers from a client may simply email the number from the webserver to someone who manually processes the card details at a card terminal. Naturally, anywhere card details become human-readable before being processed at the acquiring bank, a security risk is created.

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Smart Cards or Stored Value Cards is relatively new payments technology. It is a plastic card, with or without magnetic stripe, capable of storing, retrieving and manipulating data and used in variety of applications.1 It is also known as Electronic Money or E Purse issued by banks to its customers having the size as of credit card. A customer needs not to have currency in his pocket as value or amount is stored in the card itself by transferring it from his account, due to this feature it is regarded as electronic purse. The emergence of Smart Card arises in order to issue multipurpose cards which function as credit cards, debit cards and ATM cards so that it suits all types of customer base and their choice. These are generally the reloadable cards in which money is loaded into it by transferring the required amount from customers account via ATMs, telephone or internet. When a customer makes purchases through smart card, unlike credit card, no validations and authentications from vendor's bank and bank card association are required as the money is available in the card itself. Funds are directly deducted from the cards and transferred to the vendor's terminal.

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Smart cards are multipurpose in nature which can serve as an identity card for a cardholder, a medical card that contains the medical history of the holder and as a credit card/debit card, facilitating off-line transactions where settlement across different banks is involved. The Smart Rupee System (SMARS) pilot project sponsored by Reserve Bank of India (RBI) has set the foundation for usage of smart card-based financial applications in India. These are currently being issued by few banks in India having tied up with FINO (Financial Information Network and Operations Ltd). IDBI bank has introduced its smart card called MoneySmart, Corporation Bank has issued CorpSmart, and Bank of India has issued its E-purse cards. PNB, SBI, ABN Amro, ICICI bank and Bank of Baroda have also launched smart card-based banking solutions. Thus, banks are now showing interest in the smartcards approach to reach out to the unbanked population. FINO is focusing more on increasing the number of cards of its current partners.2 With the spread of rapid technological developments and the potential of the usage of smart cards for many purposes, the Reserve Bank also teamed up with the Government of India, banks and the card industry to conduct pilot project for the use of smart cards for multiple purposes. The future prospects of plastic cards in India are bright enough to bring paradigm change in its popularity among customers as well as banks. The number of debit and credit card users in India is anticipated to reach 73.4 million and 406 million by the year 2010 and 2011.3 Also, plastic money has immense

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opportunities in a growing economy like India. All types of banks whether public, private or foreign are contributing positively towards the development of plastic cards in India. Until now, the growth and usage of plastic cards has been seen more in urban areas due to existence of more literate people, better infrastructure facilities and proper awareness as compared to rural areas. The rural people can only understand their regional language and most of them are even illiterate who are least aware about the usefulness of plastic cards. Moreover, there is lack of adequate infrastructure to push the development of cards and induce more innovation. Thus, most of the banks have now planned to expand aggressively into rural India, where about 60% of the population lives, using an innovative system based biometric cards through which customers will be able to do anytime anywhere banking on their own.4 The rise in consumerism generated by economic reforms began in 1990's has also sparked robust demand for plastic cards. The arrival of malls, multiplexes, online shopping stores and shopping complexes encourage the customers to make use of plastic cards. The modern day, Indian customers find it easier to make physical payment (credit card or debit card payments) rather than carrying too much cash contributing to the growth of plastic money in the country. The prevalence of intensifying competition has further fuelled the usage of plastic cards in the country like never-before. It benefits the consumer through enhanced product offerings at a lower cost and that too with lucrative deals delighted with rewards scheme, loyalty bonus points, promotional campaigns etc. This has been a very welcome change and the contribution of all the players is very important to

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continue the momentum.5 However, operational risk involved with the usage of plastic cards like chances of fraud, card damage etc. plays the negative part too. Moreover, some customers are not able to utilise cards effectively due to its complex nature and they don't actually know how to operate it for specific purpose. Thus, the banks should give them some training regarding its usage. The banks can also provide them facility to use plastic cards on trail basis so that they can become more confident while using their own cards. Cost has also remained an issue in case of credit cards. The interest levied on outstanding amount is very high which sometimes takes the customers in debt trap ultimately discouraging the potential customers to make use of it. However, all these hurdles will diminish over time and positively influencing trends are expected to continue in the near and farfuture. Also, the growth of plastic cards in future would depend upon the capacity building of the banks to meet the challenges and make use of the opportunities profitably. However, the kind of technology used and the efficiency of operations would provide the much needed competitive edge for success in plastic cards business. Furthermore, in all these customers' interest is of paramount importance.6

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Introduction:
Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.

Features:
Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific. The common features fall broadly into several categories

Transactional (e.g., performing a financial transaction such as an account to

account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.)
o

Electronic bill presentment and payment - EBPP

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Funds transfer between a customer's own checking and savings accounts, or to

another customer's account

o o

Investment purchase or sale Loan applications and transactions, such as repayments Non-transactional (e.g., online statements, check links, cobrowsing, chat) Bank statements Financial Institution Administration - features allowing the financial institution

to manage the online experience of their end users

ASP/Hosting Administration - features allowing the hosting company to

administer the solution across financial institutions

Security

Security token devices

Protection through single password authentication, as is the case in most secure Internet shopping sites, is not considered secure enough for personal online banking applications in some countries. Basically there exist two different security methods for online banking.

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The PIN/TAN system where the PIN represents a password, used for the login

and TANs representing one-time passwords to authenticate transactions. TANs can be distributed in different ways, the most popular one is to send a list of TANs to the online banking user by postal letter. The most secure way of using TANs is to generate them by need using a security token. These token generated TANs depend on the time and a unique secret, stored in the security token (this is called twofactor authentication or 2FA). Usually online banking with PIN/TAN is done via a web browser using SSL secured connections, so that there is no additional encryption needed.

Signature based online banking where all transactions are signed and encrypted

digitally. The Keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on the concrete implementation.

Attacks
Most of the attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also be used to steal login information. A recent FDIC Technology Incident Report, compiled from suspicious activity reports banks file quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of 2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states.[4]

Countermeasures
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There exist several countermeasures which try to avoid attacks. Digital certificates are used against phishing and pharming, the use of class-3 card readers is a measure to avoid manipulation of transactions by the software in signature based online banking variants. To protect their systems against Trojan horses, users should use virus scanners and be careful with downloaded software or e-mail attachments.

This chapter represents a conclusive review of the efforts made since up till about the different innovations by in services banking sector. Various innovations of the bank provide benefits to the various business and Industries in many different ways. The innovations of bank are of two types: innovations in products & innovations in branches Innovations in products includes, E-banking, ATM, debit cards, credit cards & mobile banking whereas innovations in branches includes, universal banking, offshore banking, retail banking, wholesale banking. The project report summarizes about the facilities of CBI accounts and deposits and also provides the different products. This information is based on the primary and secondary data available from different sources.

FINDINGS The Project work is done on basis of certain objectives, which are as follows:

To understand the various innovations in banking sector by the bank.

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To know about the different products of the bank. To know about the benefits of innovations of the bank. In the light of these objectives the following are the findings that represent

the changing environment of Indian economy in global scenario in the wake of liberalization and globalization. The study reveals about the different types of innovations of the bank, which helps the people in many ways. The study presents the different types of products available in the bank for the help of its customers. So, these are the findings, which the project reveals by making an analysis of the topic. Moreover to making efficient central bank of India, certain suggestions have to be followed by these banks. These are as follows: Central bank of India has to provide ATM facility to its customers so that the

people can get benefit of this facility and withdraw money at any time at any place with this they would not have to face any problem regarding to money. Central bank of Indias branch network should be wider as, we have already

discussed about ATM network in each branch. Central bank of India has to improve its disclosure policies so that everyone can get easily all information regarding banking policies and other information related to bank. Indian market will provide for high growth market so bank should make strategies to grab such opportunities. Bank should open their branches in rural area.

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www.wikepeadia.com www.google.com www.lycos.com www.central bank of india.com Value notes.com White papers.com Banknetindia.com Finance biz.com Yahoo.com Google.com Banking Law and Practice by Sharma publications. Banking theory and practices by kalyani publishers. Principles of banking by AIBA (All India banking associations)

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