Understanding E-Banking: Formation, Evolution, and Regulations in Nepal

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E-banking has revolutionized the banking sector, allowing customers to conduct financial transactions conveniently. This article explores the history, ways of e-banking, total number of BFIs in Nepal, bank accounts in the country, and policy provisions related to electronic banking services. It also highlights the formation of skilled users in e-banking and the measures taken to protect financial customers and enhance financial literacy in Nepal.

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FORMATION OF SKILLED USERS IN E-BANKING GROUP 5 BIKASH THAPA, BISHWAS REGMI, NIKITA SHRESTHA, NIRAJ SHRESTHA, SURENDRA TIWARI

INTRODUCTION E-banking is a service provided by a Bank or other financial institutions that allows its customers to conduct financial transaction/services through internet. E-banking has changed the traditional banking method.

WAYS OF E-BANKING Automated Teller Machines (ATM) Point of Sales (PoS) Telephone Banking (Tele Banking) Internet Banking Mobile Banking (SMS Banking) Smart Cards

HISTORY NABIL was the first bank to start Credit Card in early 1990( JV). Himalayan Bank introduced Automated Teller machine (ATM) in 1995 and tele banking which Started from 1997. Kumari Bank first introduced SMS banking in 2002 and Internet banking was first introduced by Laxmi bank in 2004.

TOTAL NUMBER OF BFIS IN NEPAL Commercial Banks Development Banks Finance Companies Micro Credits 28 33 24 57 Total 157

NUMBER OF BANK ACCOUNTS IN THE COUNTRY Class A Class B Class C 20978261 4127818 552308 Total 25658387 *as of Push 2075

POLICY PROVISION 1. Directives no. 20/075 : About Electronic Banking Services. Branchless Banking : Terms, Conditions, Minimum Requirements, Contract between Bank and Customers, Reporting 2. Directives no. 21/075 : Provision related to Protection of Financial Customer and Financial Literacy - Should give information about accounts, Fees, Procedure, Procedure on different kinds of electronic Cards

3Directives no. 5/075 : Limit on Electronic Transactions Prepaid Card : 1 lakh (Nepal 25 Thousand-Day, 50 Thousand Month) David Card: 25 Thousand- Per Transaction, 1 lakh-Day Mobile Banking : 5000- Per Transaction, 15 Thousand- Day, 50 Thousand- Month Internet Banking : 1 Lakh - Day, 10 Lakh- Month E- Wallet : 5000- Per Transaction, 15 Thousand- Day, 25 Thousand- Month

NUMBER OF MOBILE BANKING CUSTOMER IN NEPAL Year Class A Class B Class C Total 2075 5866531 509897 18488 6394916 2074 3198198 314926 17103 3530227 2073 2050354 174389 11331 2236074

NUMBER OF INTERNET BANKING CUSTOMER IN NEPAL Year Class A Class B Class C Total 2075 835293 17444 3958 856695 2074 825097 14638 2696 842431 2073 544008 18219 1901 564128

INTERNET USERS IN NEPAL 368610 2357660 12789497 Fixed Broadband(wired) Mobile Broadband Fixed Broadband(wireless)

WHO IS LEFT OUT ? Out of total, 71.74% person people having bank accounts still don t take e banking service. Out of total, 53.26% person using broadband internet don t use e banking.

CHALLENGES - SKILLED USERS IN E-BANKING Infrastructure Transaction Limitations Perception Towards Banking Risk Linguistic/Lite racy Factor Management/ Operability