In today’s world as the technology increases banking facility has also be improved. Like olden days the people do not need to go to bank and wait in long queue for transacting or withdrawing the money. This has been changed through Online Banking; customers can access his/her account by sitting at their place anytime and anywhere. This was first introduced in the year 1997. It was the first Kerala based bank to offer this internet banking facility. The interest in World Wide Web business border ceases to exist and the technological ties extend well beyond the traditional networks. Technology has already driven the way to offer better banking. The internet banking system provides the facilities like balance enquiry, fund transfer to another bank or the same bank account, request a cheque book and checking the details of inward or outward cheque clearing details. This system has developed a new security infrastructure for conducting commerce on the internet. The initiative, called bank ID, aims to become national ID infrastructure supporting services such as authentication and digital signatures. Many researchers expect rapid growth in customer using online banking services. This system allows customer contact through increased geographical reach and lower cost delivery channels. Customers can reach a given institution literally from anywhere in the world. Before taking online banking customers need to understand the risk associated with the internet banking.