This paper examines the implementation of information technology and internet based banking in Indian Banking Sector. It also analyzes the benefits of technology in banking sector to customers, banks and to government. UK and USA are the first nations, started technology in banking sector in 1920s. Technology in banking sector becomes popular during 1960 with the use of credit cards and funds transfer. The adoption of Information Technology in India came into existence since last two decades. The operational and transactional cost of banking cost of banking become very low with the implementation of technology. The banks in India who did not adopt technology lost business rapidly. With the help of internet banks can explore new markets because there are no geographical boundaries. Small banks can also increase their customers with the help of internet and new technology. Now instead of waiting in lines customers can easily avail almost all the banking services at home. This also reduces the pressure at branch level and easy banking for branch visiting customers. ATM machines, net banking and mobile banking are the key services which enables anywhere and anytime banking.

KEYWORDS: Information Technology, Internet Based Banking, Transactional Cost, ATM Machines.