Impact of IT on payment and transfer system in banking sector

The banking sector is considered to be the back-bone of Indian economy. The economic reforms and the various e-banking techniques followed by the banks during the last decade strengthened their financial position. The adoption of IT and communication made the things easier for the banks. It made the flow of information smooth. The payment and the settlement system led to greater efficiency and financial stability. The study on the performance of Indian payment system during the last ten years indicates that in India, all electronic modes of payment have shown better growth than the physical cheque based system. The Reserve Bank of India is, therefore, taking necessary steps to provide efficient and integrated payment and settlement system in the country and also taking steps to mitigate the loss and risk. The present paper primarily aims to study the impact of electronic banking on payment and clearing system and to identify the important factors for the customers to choose electronic banking as a mode of payment. An attempt has been made to know the satisfaction of the customers regarding e-payment system. The results of the study indicated that e-payment handles a large volume of payments, growing at much faster speed than paper based instruments and provides faster delivery of banking services.