Despite the growth of e-banking adoption worldwide, Ethiopian banks continue to conduct mostrnof their banking transactions using traditional methods. The general objective of the study wasrnassessment of the current extent and practices, benefits realized by banks, driving forces,rnopportunities and challenges for the adoption of e-banking service in Ethiopia. From this generalrnobjective, five specific issues were explored. An exploratory research design was employed tornconduct this study. Both primary and secondary qualitative data were collected for the purpose ofrnthis study from the E-banking Department of each bank at the head office level and bank webrnsites respectively. The collected data was analyzed by using descriptive analysis such as tablesrnand percentages.rnFrom the analysis of the collected data, the findings revealed that: balance inquiry, cashrnwithdrawal, funds transfer within same bank, statement printingsrna r e some the majorrnpractice of e-banking in those banks that are providing the service to their customer. Therndifferent e-banking channels by which banks are using to provide these services to theirrncustomers are ATM, debit card, Internet banking and Mobile banking. In addition to this somernbanks start to provide different type of card services. On the View point of the bank Costrnreduction, coverage of wide geographical area, customer satisfactions are some of the benefits ofrnusing E banking. The driving forces that initiate banks to adopt e-banking services are : existencernof high competition in the banking industry, desire to improve organizational performance,rndesire to reduce transaction cost, desire to cover wide geographical area, and desire to buildrnorganizational reputation are among others. Chances of risk, Lack of suitable legal andrnregulatory framework, absence of financial networks that links different banks, Low level ofrninternet penetration and poorly developed telecommunication infrastructure, high cost ofrninternet, security concerns are among the major challenges of e-banking service in the country.rnHowever, late adopter opportunities, improvement in the banking habit of the society,rncommitment of the government to facilitate the expansion of ICT infrastructure and willingnessrnamong banks to cooperate in building infrastructure are the major opportunities for the adoptionrnof the system in the banking industry