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Yes is also chasing what analysts have termed India's "mass affluent", mainly office-working households with annual incomes of between Rs500,000 (£6,380) and Rs2.5 million a year (£25,000). NCAER estimates that there are about 30 million such households in India - a massive market in any terms, and one to which Mr Kapoor claims the net holds the key.

"In the new-age economy given the high penetration of PCs into offices and homes, increasingly customers are accessing their bank through the internet. Also, mobile internet and broadband services have made feature rich services on internet banking easily accessible," he says.

Mr Kapoor believes that Yes Bank's internet platform has helped it to shift "the paradigms of business". To illustrate how, he returns to India's affluent non-residents. Global Indian Banking allows clients based anywhere in the world the power to transfer funds instantly from his account to over 10,000 bank branches of other banks within India, he explains.

"This service introduced by us for the first time in the country has enabled some of our customers to operate 'cheque free'."

Q&A: Bringing internet banking to India

What’s the demand for internet banking in India and how does India compare to other markets?

Rana Kapoor: In India, internet banking has a huge demand from corporates. Individual customers are slowly taking to the medium. However, within some pockets there is a strong demand. For the "Global Indian", the bank is on the internet and this community uses the medium to the fullest. The medium is also popular with the workers between the age of 18-35 who primarily access the bank from desktops at offices.

India compares well to other emerging markets. There is no clear statistics available to validate the same, however by looking at the services being offered and the marketing activities of other global banks one can make a fair assessment.

It will be interesting to note that even in advanced markets like the Unites States, security fears have not allowed Internet banking to grow aggressively. Customers are very comfortable using the medium to view balances, own funds transfers and do bill pay. They are not very comfortable doing more. This however will change in the coming year with better security standards.

What role does the non-resident Indian community play in your plans?

A booming Indian Economy has ensured that India is now the second fastest growing market in the world in terms of GDP. Global Indians or non-residental Indians are now increasingly looking at India as a strong and competitive destination for investments in Financial Products and Real Estate. At YES BANK, we wish to provide our expertise to the customer to help them optimize their returns across a range of Asset classes in India. The huge appetite to invest in India coupled with the growing interest for their home Country clearly shows immense potential in the NRI market.

There is also a latent concern in NRIs of managing funds from a distance. Through ‘Global Indian Banking’ our attempt is to provide experiential Banking to the Global Indians and address their concerns around distance banking and desire to be in control of their finances in a secure environment. YES BANK offers Global Indians innovative, value-added products and services that provide convenient access to their account and facilitate greater efficiency in funds management. Thus enabling them to carry out their banking transactions, from anywhere across the globe.

At Yes we see the Global Indians or the NRI segment forming a significant part of the overall business mix.

What challenges does internet banking pose for providers, what benefits does it brings?.

"The internet brings with it the key challenge of acceptance. Acceptance can be linked to security issues and awareness. The customer today has no idea what kind of malicious programs are running on his PC or has his user ids and passwords been compromised. His knowledge base of how to secure himself from such threats is also very limited.

"The challenge for the internet economy is to present secure solutions in a very user friendly manner. Educate the customer on the benefits of the medium and how to secure his access.

"Once that is done then the benefits of the internet are immense. The medium can be used to drive down costs of servicing and acquiring customers to a fraction of branch costs. It helps a business operate virtually and quickly generate marketshare – Like Egg in UK or E*Trade in USA.

What about security concerns?

RK: The success of internet banking will depend on how securely one is able to conduct his banking. Over the last ten years we have witnessed issues related to hacking, phishing etc slowing down the consumer acceptance to the medium. Today there is a concerted effort by regulators, technology providers and criminal investigators globally to address the growing concerns of the medium.

Regulators are prescribing standards to be adopted for internet banking, which are being shared across markets to ensure consumers access their bank securely. The Indian Regulator (RBI) for example has a very stringent process each bank has to adhere to before launching internet banking services which includes audit and certification by independent auditors. In other markets like Hong Kong their monetary authority recently mandated two factor authentications. Technology providers have moved on to offer solutions more secure than namely passwords. Today there is Two Factor and Multi –Factor security and authentication tools which allow safer and convenient banking.

Having said this, internet is a very dynamic medium and one is constantly challenged to innovate and change. The greater benefits of the medium will force us to constantly offer safer solutions so that our customer is greatly benefited.

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