In recent years, the banking industry has undergone rapid technological changes and developments. Information Technology (IT) has introduced new business standards and is increasingly playing a significant role in changing the face of the banking industry. Internet, wireless technology and global straight-through processing have created a paradigm shift in the banking industryfrom brick-and-mortar banks to virtual banking. The adoption of technology by Indian banks is occurring partly because of customer demand and partly because of the increasing competitive environment in the global context. Legal and technological standards are being formulated to make banking a secure and pleasant experience. The future holds wide vistas in terms of what technology can do for banks. However, the banks must take caution as every technological tool such as the Internet has its own shortcomings, which can have major consequences. There are many areas of banking business, such as customer relations, which cannot be delegated entirely to technology. The present paper discusses and highlights the prospects and perils associated with the banking technology in India. It attempts to investigate, using document analysis (Neuman, 1997), the problems and prospects of banking-technology interface in India. The paper also seeks to answer the question: Is technology a threat or an opportunity in itself for Indian banks? An endeavor has been made to judge how the banking business and practices have changed with the introduction of electronic channels. Also, from the viewpoint of technology adoption, the history and trends of e-banking, in both public and private sector banks, have been examined.

What exactly is banking-technology interface? To put it simply, it is banking through electronic means. It does not involve any physical exchange of money, i.e., all money transactions take place electronically, from one account to another, using the Internet or technology-based solutions. Banking technology is possible in two main ways. An existing bank with physical offices can establish a website and offer Internet banking to its customers, in addition to its traditional delivery channels. A second alternative is to establish a `virtual', `branchless', or `Internet-only' bank. The computer server that lies at the heart of a virtual bank may be housed in an office that serves as the legal address of such a bank, or at some other location. Virtual banks may provide their customers the facility to make deposits and withdraw funds via Automated Teller Machines (ATMs), or other remote delivery channels owned by other institutions.

The banking customers can view their bank account balances, transaction histories and pie charts of their investment holdings, initiate payments or orders to buy and sell securities, and have interactive communication with their banks via `chat service', interactive e-mail and Short-Message-Services (SMS). Banking technology makes it easy to transfer one's money from one branch, in a particular city, to any other branch in another city. One can open a Fixed Deposit (FD) account via the Net. One needs to provide data regarding the amount and term of the deposit and also the branch in which the account is to be opened. One can order for an issue of a demand draft or a banker's cheque. However, the draft can be delivered only to the customer's address and not to any other third party. One can inquire about the balance in one's savings, current and FD account, and also on the tax deducted at the source on one's FD account for the current and previous financial years. One can give instructions over the Net for stopping payment on a cheque(s). One can also request for a cheque book via the Internet, which will take three days to come. One can view all the transactions completed on an account for a specified period and get a copy via e-mail. Moreover, these services offered by banks are without a fee, hence the effort is quite appreciable. Almost all the private sector banks and many of the public sector banks have free demonstrations on their respective websites, which are self-explanatory and can guide a first-time user on how to use the facility.

India's Leapfrogging Steps, Bricks-and-Mortar, Virtual Banking, Prospects and Perils, Short-Message-Services, Automated Teller Machines, Fixed Deposit, business standards, access points, delivery channels, online banking, Secure Electronic Transactions, SETs.