Online Banking in India :
Online banking was initially brought in when the Governor, Reserve Bank of India delegated a Committee under Shri W.S.Saraf, Executive Director to view into technological issues relating to installment or payment system and to make recommendations for augmenting the utilization of modern technology in the banking industry. The Saraf Committee recommended institution of Electronic Funds Transfer Systems in India. It additionally inspected the telecommunication system like use of BANKNET and ideal use of SWIFT by the banks in India. The Shere Committee in 1995 had suggested framing of RBI (EFT System) Regulations under Section 58 of the Reserve Bank of India Act 1934 (RBI Act), amendments to the RBI Act and to the Bankers’ Books Evidence Act,
1891 as short term measures and establishing of a few new Acts such as the Electronic Funds Transfer Act, the Computer Misuse and Data Protection
Online Banking Bank of India :
The primary risk of online banking is the security concerns. For this the IT Act has a provision, Section 3(2) which, accommodates a specific asymmetric crypto system and function as a method of authenticating electronic record. Any other method used by banks for authentication should be recognized as a source of legal risk.
The Reserve Bank of India constituted a Working Group to analyze diverse issues identifying with e-banking and suggest technology, security, legal standards and operational standards keeping in perspective the global best practices.
Section 2 in The Reserve Bank of India Act, 1934
2. Definitions.—In this Act, unless there is anything repugnant in the subject or context,— 1[***] 2[(aii)] “the Bank” means the Reserve Bank of India constituted by this Act; 3[(aiii)] “Bank for International Settlements” means by body corporate established with the said name under the law of Switzerland in pursuance of an agreement dated the 20th January, 1930, signed at the Hague
(b) “the Central Board” means the Central Board of Directors of the Bank; 4[***] 5[6[(bvi)] “Deposit Insurance Corporation” means the Deposit Insurance Corporation established under section 3 of the Deposit Insurance Corporation Act, 1961 (47 of 1961);] 7[8[***] 9[***] 10[(bviiia)] “Exim Bank” means the Export-Import Bank of India established under the Export-Import Bank of India Act, 1981;] 11[(bix) “foreign currency” and “foreign exchange’ have the meanings respectively assigned to them in the Foreign Exchange Regulation Act, 1973(46 of 1973)
(c) “Industrial Finance Corporation” means the Industrial Finance Corporation of India established under the Industrial Finance Corporation Act, 1948 (15 of 1948);] 12[(ca) “International Development Association” means the “Association” referred to in the International Development Association (Status, Immunities and Privileges) Act, 1960 (32 of 1960)
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