In recent years, India has grown with the fundamental economy based on Internet Banking. By providing economic growth, online banking is giving opportunities to government, common man, industries to rely on. Banking is the only sector that adopts Information technology to play any functions through any PC or smartphone. As per now, the Indian banking system consists of 27 public sector banks, 21 private sector banks, 49 foreign banks, 56 regional rural banks, 1,562 urban cooperative banks, and 94,384 rural cooperative banks.
Indian banking infrastructure is very big and it is growing faster than anywhere. Online banking is the part of core banking connected to the bank and operated by the bank only. Here the number of customers is not equal to the no of accounts opened because many customers linked to one account. It has many names like e-banking, virtual banking, online banking, or internet banking.
Types of Online Banking
Personal computer banking
ECC(Electronic Clearing cards)
EFT (Electronic fund transfer System)
In this level of banking, banks offer through their sites. Through this administration, the bank offers data about its items and administrations to clients. Further, a few banks may get an answer to inquiries through email as well.
In this level, banks permit their clients to submit directions or applications for various administrations, check their record balance, and so on. In any case, banks don’t allow their clients to do any reserve put together exchanges for their records.
In the third level, banks permit their clients to work their records for reserves move, charge installments, and buy and recover protections, and so on.
Why E-Banking is needed?
In India, since 1997, when the ICICI Bank first offered internet banking services, today, most new-generation banks offer the same to their customers. All major banks provide e-banking services to their customers.
Online banking is needed because it has low transaction costs and a reduced margin of human error. It reduced fixed costs and it has lessened the paperwork which pulls more customers to this sector.
Legal framework and issues with online banking
Various provisions that apply to online banking couldn’t overcome the problem. So some strict rules needed to maintain it. The legal framework for banking in India is provided by a group of enactments, viz.
The Banking Regulation Act, 1949; the Reserve Bank of India Act, 1934 and Foreign Exchange Management Act, 1999 are few among many such legislations. It is mandatory on the part of all entities to obtain a license from Reserve Bank of India under Banking Regulations Act, 1949 to function as a bank. Besides, banking activities are also influenced by various enactments governing trade and commerce, such as The Indian Contract Act, 1872, the Negotiable Instruments Act, 1881, Indian Evidence Act, 1872, etc.
Even though e-banking has presented simplicity of doing banking it has with it offered ascend to numerous issues and dangers, for example, operational dangers, security dangers, and protection of consumer loyalty and assessment. A portion of these issues are more touchy than others for instance protection and security are the critical highlights around which e-banking has advanced.
So RBI had set up working guidelines to this sector to maintain this and the banking Lawyers are also there to provide legal services of banking. So let’s discuss it here.
Role of Banking Lawyers
The banking industry recruits many lawyers, and legitimate work is vital to its prosperity. So banking legal advisors are very generously compensated. How about we do a profound jump into the universe of banking legal advisors.
Attorneys resemble the general without whom organizations don’t go into war. Or on the other hand, you could state it resembles a sound nibble in your sack, you may not require one now, however, it is in every case better to have it in the event of some unforeseen issue.
Like some other division, banking lawyers come into the image to predict the weaknesses in exchanges and possible debates and sort them out. Excessively obscure? These banking lawyers handle the value-based administrative work, normalize reports, make and execute strategies, answer the questions, stay aware of the guidelines, guarantee consistency, and handle the debates.
In particular, you need banking lawyers when managing the unpredictable and huge laws identifying with money. Who else will stay aware of ever-changing laws and RBI guidelines? So these knights in sparkling protective layer act the hero, and devise an activity plan for the business, retail, and business groups! They have to make the activity plan, however, they likewise need to guarantee that different groups have comprehended them all around ok to actualize them.
Work of Banking Lawyers
With various divisions, a legal advisor’s work changes depending on the idea of exchange he/she are taking care of. They have to realize how to structure the credit or prompt on the speculation as needs be. They may be capable of taking a shot at recuperating terrible advances and implementing security interests. Litigators don’t do exchanges and the other way around.
Contract drafting and Negotiation
Drafting is fundamental for a financial legal counselor. He/she may need to draft a standard agreement for credit with a person who is non-debatable. He/she may need to draft a coordinated advance understanding or draft a specialist organization understanding for the corporate customers, where the advertisements are energetically arranged. So a legal counselor should be adroit at both agreement drafting and arrangement. There must be a reached out due industriousness and compliances done before broadening such term credits, to stay away from rehashes of default like in the instances of Vijay Mallya or Nirav Modi.
The Knowledge of law
A banking lawyer has to know the laws. In any case, it is unimaginable to expect to comprehend and recollect all the laws that exist. So for the freshers in the business, it is a decent practice to build up a sound and explicit information on the Contract Act and Companies Act, The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI), Transfer of Property Act (TOPA), Insolvency and Bankruptcy Code (IBC).
The ideas of repayment, contract, hypothecation, made sure about credit, and so forth ought to be clear for the attorneys keen on banking law. For example, did you realize that the SARFAESI Act is affected uniquely in the event of made sure about credit? Also, upon default, the bank doesn’t require the mediation of the courts to remove the sold or hypothecated security. This is a stage where baking lawyers needed.
So we know the role and functions of the banking lawyers in the banking industry. It all depends on what you choose. banking lawyers are the most demanding lawyers in the business industries because they are doing business on huge transactions. Online banking farauds are going higher day by day. So we need to consult a baning lawyer before using the e-banking system. we have to know the advantage and disadvantages of online banking.