Information Technology (IT) has become an integral part of the banking system. With the help of IT, the banking industry is able to meet customers' requirements efficiently. The major issue causing concern for extensive application of IT in banking relates to e-security threats in the form of cyber crimes, frauds, thefts, etc. This article discusses the recent developments in the Indian banking industry, various IT initiatives, e-security aspects, cyber laws and the RBI guidelines to regulate the e-security issues.

Banks play an important role in the Indian financial sys tem. Several reforms have been initiated in the banking sector after their nationalization in 1969. With the liberalization of the economy and due to the increased global competition, many private and foreign players have entered the Indian banking sector. As a result, the overall scenario of the economy has changed drastically. It is now called information age and knowledge-based economy with boundaries open to the outside world. With the developments in the living standards and the lifestyles of the people, the use of technology in banks has become almost inevitable. Hence, the banks need to diversify their role from that of an institution of deposits and lending to a complete solution-provider.

It is essential to bring Indian banking at par with global standards. The banking industry in the country has experienced changes in its regulatory framework with the implementation of Basel-I and Basel-II, adoption of International Accounting Standards, changed capital adequacy norms, reduction in level of Non- Performing Assets (NPAs), etc. All these developments required increased application of information technology in successfully carrying out banking operations.

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