At the retail level a wide range of payment instruments like EFT, ECS, E-money, Smart Cards and credit cards will cater to the needs of different types of economic transactions. At the level of inter-bank payments and settlements, real time and on-line funds transfers are likely to play a major role, both in local as well as inter-city transactions. The spread and the reach of the modern system enable equal and convenient access from both small and big centres alike. The design of an integrated system should be such that there is a wide choice of payments instruments at the retail level and there is end to end connectivity over all parts of the country to enable delivery of these instruments through fast, reliable and secure communications. An integrated system would enable real time movement of funds between different f‌inancial markets, allow fair and equal access to all the f‌inancial intermediaries and enable effective regulatory overseeing. The fundamental requirement is the integration of various payments instruments, transactions and settlements into a single system which combines f‌lexibility with eff‌iciency.

Information Technology and Electronic Funds Transfer system have emerged as the twin pillars of modern banking development. Not only have the services or products offered by banks moved way beyond conventional banking, but access to these services has become a round the clock round the week routine. India, unfortunately, has largely by-passed this phenomenon. While many technologies that could be considered suitable for India have been introduced in some diluted form or the other "as a pilot“, the required success has not been achieved because of the following reasons:-

• Inadequate Bank Automation.
• Not so strong commercially oriented inter~bank platform.
• Lack of a planned, standardised, electronic payment systems backbone.
• Inadequate telecorn infrastructure.
• Inadequate marketing effort.
• Lack of clarify and certainty on legal issues
• Lack of Data Warehousing network.

Legal issues relating to electronic transaction processing at banks are very many and the need to address them by amending some of the existing Acts and by promoting legislation in a few hitherto unexpected areas has assumed critical urgency. Necessary legislative support is essential to protect the interests as much of the customers as of the banks/branches in several areas relating to electronic banking and payment systems. This is specially required to establish the credibility of ECS and EFT schemes based on the electronic message transfer.