Question:
What is Online Banking and how does it work ?
What is Online Banking and how does it work ?
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Define online (internet) banking, then give the steps: registration, login, choosing a service, OTP check and confirmation.
Updated On: Oct 19, 2026
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Solution and Explanation
Step 1: Meaning of online banking:
Online banking, also called internet banking, lets customers use bank services through the bank's website or mobile app over the internet.
The customer does not need to visit the branch.
Step 2: How it works:
The customer registers for the facility and gets a user ID and password from the bank.
After login, the customer picks a service. The bank checks the identity again with an OTP or a transaction password.
The bank's computer system processes the request, updates the account at once and sends a confirmation by SMS or email.
Step 3: Services offered:
Checking balance and downloading statements, transfer of funds by NEFT, RTGS, IMPS and UPI, paying bills, booking tickets, and opening fixed or recurring deposits.
It works at any time of the day and from any place.
Final Answer:
Online banking is banking through the internet with secure login, where the bank's system processes each request instantly.
Online banking, also called internet banking, lets customers use bank services through the bank's website or mobile app over the internet.
The customer does not need to visit the branch.
Step 2: How it works:
The customer registers for the facility and gets a user ID and password from the bank.
After login, the customer picks a service. The bank checks the identity again with an OTP or a transaction password.
The bank's computer system processes the request, updates the account at once and sends a confirmation by SMS or email.
Step 3: Services offered:
Checking balance and downloading statements, transfer of funds by NEFT, RTGS, IMPS and UPI, paying bills, booking tickets, and opening fixed or recurring deposits.
It works at any time of the day and from any place.
Final Answer:
Online banking is banking through the internet with secure login, where the bank's system processes each request instantly.
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