One time password(OTP) is the authentication method used in online banking system today. Hackers are getting better each day at cracking sensitive information. Once this happened, they can gain access to our private network and steal our sensitive business information. A common technology used for the delivery of OTPs is text messaging. OTP over SMS might not be encrypted by any service provider. In addition, the cell phones which is used to receive the SMS also play an important role, in which more than one phone comes into account. The vulnerable parts of the cell phone network can be mount to man in the middle attack. To overcome the difficulties the virtual password concept is introduced. The virtual password concept involves a small amount of human computing to secure users passwords in on line environments. To provide high security, we enhance the existing system with virtualization concept. Hacker may guess our password but he cannot access our account because he cannot access virtual password. The major hacking threats like phishing, key logger, shoulder surfing attacks, and multiple attacks cannot affect our schema. In user specified functions, we adopted secret little functions in which security is enhanced. Virtual password is a password that is valid for only one login session or transaction and after that it becomes obsolete. The calculation of the virtual password is done at the client side which reduces the delay of time in receiving OTP via SMS. To make the client more convenient in calculating the virtual password an application is used which reduces the work of the client. This method is more instant than the traditional OTP system used today.