PREFACE

Internet Banking is one of a major part of Banking Methods available to the

customers.
My Objective of study was to deal with Customer Satisfaction regarding Internet
Banking., I generally deal with the customers of Jorhat branch region. The purpose of
the Internet banking survey was to gather information on banks practices and
procedures related to enrolling customers in online banking, opening accounts online,
and monitoring, detecting, and preventing bank account fraud perpetrated using the
Internet as a channel. The survey addresses practices for consumer, business, and
wholesale accounts regarding to Bank of Baroda.
Here are the actual numbers for the Preferred banking method of Indian
consumers:
Internet Banking 18% - Branches 45% - ATM 29% - Mail 5% - Telephone 2% Mobile 1%
Internet banking was not only popular with the youngest consumersit was the top
response of all those under age 55. Older bank customers still preferred their local
branch (26%) and ATMs (17%), but the popularity of branches and ATMs was down
in all age groups (compared to 2008).
The results of this survey make it clear that for the first time, more consumers prefer
the speed and convenience of conducting their banking transactions on the Internet,
rather than visiting their local branch. It also indicates that consumers now have more
confidence in the accuracy and security of online banking.

LISTS OF TABLES / GRAPHS / FIGURES

LIST OF TABLES:
Table 1- Data Table for the Estimation of Growth Rate & Forecasting (Page
No. 22)
Table 2- Data Table of Customer Satisfaction Survey INTERNET BANKING #1
(Page No.- 24.a)
Table 3- Data Table of Customer Satisfaction Survey INTERNET BANKING #2
(Page No.- 24.b)
Table 2- Gender Ratio (Page No. 24)
Table 3- Age Group (Page No. 26)
Table 4- Satisfaction Analysis (Page No. 27)
Table 5- Reason to Choose "Online-Banking" (Page No. 28)
Table 6- Customers Accessing their A/c (Page No. 28)
Table 7- Bill Payment (Page No. 29)
Table 8- E-Alerts (Page No. 30)
Table 9- Fund Transfer (Page No. 31)
Table 10- Stop Payment (Page No. 32)
Table 11- Balance Enquiry (Page No. 33)
Table 12- Check Retrieval (Page No. 34)
Table 13- Bank Statement (Page No. 35)

LIST OF CHARTS:
Chart1- Growth rate of Baroda-Connect (Page No. 23)
Chart 2- Gender Ratio (Page No. 24)
Chart 3- Age Group (Page No. 26)
Chart 4- Satisfaction Analysis (Page No. 27)
Chart 5- Reason to Choose "Online-Banking" (Page No. 28)
Chart 6- Customers Accessing their A/c (Page No. 28)
Chart 7- Bill Payment (Page No. 29)
Chart 8- E-Alerts (Page No. 30)
Chart 9- Fund Transfer (Page No. 31)
Chart 10- Stop Payment (Page No. 32)
Chart 11- Balance Enquiry (Page No. 33)
Chart 12- Check Retrieval (Page No. 34)
Chart 13- Bank Statement (Page No. 35)

EXECUTIVE SYNOPSIS
Internet banking is still at infancy stage in the world. Many studies focused on usage
of Internet banking but many factors on non-usage were overlooked. This research
was carried out to validate the conceptual model of Internet banking. The causes were
identified and researched through correcting the causative factors so that more people
can use Internet banking. This will help the banking operations to be more cost
effective.
The research is focused on what are the customers perceptions about Internet banking
and what are the drivers that drive consumers. How consumers have accepted Internet
banking and how to improve the usage rate were the focus of research area in this
study.
Qualitative exploratory research using two different questionnaires was applied. More
than 100 respondents were selected for study after initial screening. They were all
bank customers.
The studies revealed that education, gender, income play an important role in usage of
Internet banking. Not much research has been done on these areas as they were
focused more on the acceptance of technology rather than on people. The research
corroborated the conceptual framework stating that if skills can be upgraded there will
be greater will to use internet banking by consumers. Inhibitory factors like trust,
gender, education, culture, religion, security, price can have minimal effect on
consumer mindset towards Internet banking.
My research is based on Bank of Barodas Baroda-Connect Internet banking facility
avail to the customers, and to proceed with the research on Customer Satisfaction
Survey on Internet Banking.

INTRODUCTION TO SUBJECT
Knowledge cannot be gained only on the basis of theoretical understanding from
books. A practical insight is necessary for the learning process to make it complete
and effective. This is especially in case of Management Education, banking is one of
the emerging or rather to say it one of the fastest growing in India. Today the banking
sector has transcended the normal banking activities and has diversified into insurance,
merchant banking, advisory services and many more.
My project aims at Comparative study on Customer Perception Towards E-banking
With Respect To Bank Of Baroda. In this research study 100 respondents from the
Banks were taken, After analyzing the results of the questionnaire we conclude that
even now a days banks are providing innovative services day by day, but still there
are a lot of customers who are even not aware about these services, the usage of these
services is a different issue, Today Banks are using huge amount of funds to provide
differentiate services to their customers from their competitors like by using new
software or by providing new innovative services like internet banking, mobile
banking, and many others but still they are focusing only to provide the innovative
services to the customers not focusing too aware them regarding these services and
also there is a need to aware the customers about the use and benefits to the services
provided by the bank, because its the way to get competitive advantage, as per as we
all know that today most of the organizations are focusing on the promotion- element
of marketing mix, which is providing financial as well as non financial benefits like
Brand image, so these Banks is not focusing over this element, Majority of the
respondent in Bank have savings account with banks. The facility that was availed by
most of the people at these Banks was that of ATM/Debit Cards. The most important
channel that aware customer most regarding the innovative services is family&
friends.
This is the marvelous kinds of innovation in technology and hard line blend of it with
information technology made a paradigm shift in the banking industry. Technology
itself created its world in the globe of human beings. Advent of Internet banking
happened in early 1990. Internet banking is a kind of systems that enable financial
institution customers, individuals or businesses, to access accounts, transact business,
or obtain information on financial products and services through the Internet.

The Government of India enacted the IT Act, 2000 (Information Technology Act).
This act came into effect from the 17th of October 2000. The purpose of this act, in
context of banking, was to provide legal recognition to electronic transactions and
other means of Electronic Commerce. The working group set by Reserve bank of
India, has been working as a watchdog on the different aspect of the Internet banking.
Bank of Baroda was the pioneer bank to use Internet banking first time in Sept 2006
with its services in India. Bank of Baroda and a lot of other Indian banks use the
Internet banking system to provide online banking solution.
In the current scenario Indian customers are moving towards Internet banking, slowly
but steadily. Most of the big Indian banks like SBI, BOB, and PNB etc. have started
providing Internet banking services.
There is a clear need to develop a better understanding of how consumers evaluate
these services and develop e-loyalty. Service quality is one of the main factors
determining the success/failure of electronic. The customer perception and
preferences of service quality have a significant impact on banks success. The main
aim of this research is to find out the acceptance of Internet banking among Indian
consumers and how they perceive it. This becomes important especially when
education level is only 67% in India. A study of an Internet portal for understanding
customer perception about service quality, customer satisfaction and loyalty goes a
long way in figuring out how these e-services are evaluated.
As India is taking giant leaps towards globalization Internet banking is the sector to be
studied with great interest. The question of how attitude towards elements of existing
banking service might influence the consumers decision to use Internet banking has
not been investigated. As consumers get more and more educated, getting insight
about modern banking, via Internet banking has evolved as primary area of concern
for all leading and upcoming banks in India.
INTRODUCTION OF E-BANKING
The world is changing at a staggering rate and technology is considered to be the key
driver for these changes around us. An analysis of technology and its uses show that it
has permeated in almost every aspect of our life. Many activities are handled
electronically due to the acceptance of information technology at home as well as at

workplace. Slowly but steadily, the Indian customer is moving towards the internet
banking. The ATM and the Net transactions are becoming popular. But the customer
is clear on one thing that he wants net-banking to be simple and the banking sector is
matching its steps to the march of technology. E-banking or Online banking is a
generic term for the delivery of banking services and products through the electronic
channels such as the telephone, the internet, the cell phone etc. The concept and scope
of e-banking is still evolving. It facilitates an effective payment and accounting
system thereby enhancing the speed of delivery of banking services considerably.
Several initiatives have been taken by the Government of India as well as the RBI
(Reserve Bank of India); have facilitated the development of e-banking in India. The
government of India enacted the IT Act, 2000, which provides legal recognition to
electronic transactions and other means of electronic commerce. The RBI has been
preparing to upgrade itself as regulator and supervisor of the technologically
dominated financial system. It issued guidelines on the risks and controls in computer
and telecommunication systems to all banks, advising them to evaluate the risks
inherent in the systems and put in place adequate control mechanisms to address these
risks.
WHAT IS E-BANKING?
Electronic banking is one of the truly widespread avatars of E-commerce the world
over. Various authors define E-Banking differently but the most definition depicting
the meaning and features of E-Banking are as follows:
Banking is a combination of two, Electronic technology and Banking.
Electronic Banking is a process by which a customer performs banking
Transactions electronically without visiting a brick-and-mortar institutions.
E-Banking denotes the provision of banking and related service through
Extensive use of information technology without direct recourse to the bank
by the customer.

NEED FOR E-BANKING

One has to approach the branch in person, to withdraw cash or deposit a cheque or
request a statement of accounts. In true Internet banking, any inquiry or transaction is
processed online without any reference to the branch (anywhere banking) at any time.
Providing Internet banking is increasingly becoming a "need to have" than a "nice to
have" service. The net banking, thus, now is more of a norm rather than an exception
in many developed countries due to the fact that it is the cheapest way of providing
banking services.
Banks have traditionally been in the forefront of harnessing technology to improve
their products, services and efficiency. They have, over a long time, been using
electronic and telecommunication networks for delivering a wide range of value
added products and services. The delivery channels include direct dial up connections,
private networks, public networks etc. and the devices include telephone, Personal
Computers including the Automated Teller Machines, etc. With the popularity of PCs,
easy access to Internet and World Wide Web (WWW), banks increasingly use
Internet as a channel for receiving instructions and delivering their products and
services to their customers. This form of banking is generally referred to as Internet
Banking, although the range of products and services offered by different banks vary
widely both in their content and sophistication.
More and more people are using electronic banking products and services because
large section of the banks future customer base will be made up of computer literate
customer, the banks must be able to offer these customer products and services that

allow them to do their banking by electronic means. If they fail to do this will, simply,
not survive. New products and services are emerging that are set to change the way
we look at money and the monetary system.
USAGE OF E-BANKING
The rise in the e-commerce and the use of Internet in its facilitation along with the
enhanced online security of transactions and sensitive information has been the core
reason for the penetration of online banking in everyday life. According to the latest
official figures from the office of National Statistics (ONS 2007) indicate that
subscriptions to the internet has grown more than 50% from 25 million in 2005 to 45
million in 2007 in India. It has also been estimated that 60% of the population in India
use internet in their daily lives. The fundamental shift towards the involvement of the
customer in the financial service provision with the help of the technology especially
internet has helped to reduce the costs of financial institutions as well as helped client
to use the service at anytime and from virtually anywhere with access to an internet
connection. The use of electronic banking has removed personnel that facilitate the
transactions and has placed additional responsibilities on the customers to transact
with the service. The computerization of the banking operations has made maximum
impact on: Internal Accounting System
Customer service
Diversification of system

The Conceptual Model of Internet Banking

INTERNET BANKING VERSUS TRADITIONAL BANKING

In spite of so many facilities that Internet banking offers us, we still seem to trust our
traditional method of banking and is reluctant to use online banking. But here are few
cases where Internet banking will turn out to be a better option in terms of saving your
money.
'Stop payment' done through Internet banking will not cost any extra fees but when
done through the branch, the bank may charge you Rs 50 per cheque plus the service
tax.
Through Internet banking, you can check your transactions at any time of the day, and
as many times as you want to.
On the other hand, in a traditional method, you get quarterly statements from the bank
and if you request for a statement at your required time, it may turn out to be an
expensive affair. The branch may charge you Rs 25 per page, which includes only 30
transactions. Moreover, the bank branch would take eight days to deliver it at your
doorstep.
If the fund transfer has to be made outstation, where the bank does not have a branch,
the bank would demand outstation charges. Whereas with the help of online banking,
it will be absolutely free for you. As per the Internet and Mobile Association of
India's report on online banking 2006, "There are many advantages of online banking.
It is convenient, it isn't bound by operational timings, there are no geographical
barriers and the services can be offered at a miniscule cost."
TYPES OF INTERNET BANKING OR E-BANKING
Understanding the various types of Internet banking will help examiners assess the
risks involved. Currently, the following three basic kinds of Internet banking are
being employed in the marketplace.
Informational- This is the basic level of Internet banking. Typically, the bank
has marketing information about the banks products and services on a standalone server. The risk is relatively low, as informational systems typically have
no path between the server and the banks internal network. This level of
Internet banking can be provided by the banks or outsourced. While the risk to a
10

bank is relatively low, the server or web site may be vulnerable to alteration.
Appropriate controls therefore must be in place to prevent unauthorized
alterations to the banks server or web site.
Communicative- This type of Internet banking systems and the customer. The
interaction between the banks system and the customer. The interaction may be
limited to electronic mail, account enquiry, loan applications, or static file
updates (name and address change). Because these servers may have a path to
the banks internal networks, the risk is higher with this configuration than with
informational systems. Appropriate controls need to be in the place to prevent,
monitor, and alert management of any unauthorized attempt to access the banks
internal networks and computer systems. Virus controls also become much more
critical in this environment.
Transactional- This level of Internet banking allows customers to execute
transactions. Since a path typically exists between the server and the bank or
outsourcers internal network, this is the highest risk architecture and must have
the strongest controls. Customer transactions can include accessing accounts,
paying bills, transferring funds etc.
FEATURES OF E-BANKING
Transactional: (e.g. performing a financial transaction such as an account to account
transfer, paying a bill or applications like applying for a loan, new account, etc.)
Electronic Bill Presentment and Payment (EBPP).
Funds transfer between customers own checking and savings accounts, or to
another customers account.
Investment purchase or sale.
Loan application and transactions such as repayments.
Non-transactional: (e.g. online statements, Check links, Chat, Co-browsing etc.)
Financial Institution Administration- features allowing financial institutions to
manage the online experience of their end users. ASP/ Hosting Administration
features allowing the hosting company to administer the solution across financial
institution.

11

ADVANTAGES OF E-BANKING: Convenience- Unlike your corner bank, online banking sites never close;
theyre available 24 hours a day, seven days a week, and theyre only a mouse
click away. With pressures on time and longer travelling periods, more and
more people find it tiresome waiting in queues. People want flexibility, and
Internet banking offers just that.
Ubiquity- If youre out of state or even out of the country when a money
problem arises, you can log on instantly to your online bank and take care of
business, 24\7.
Transaction speed- Online bank sites generally execute and confirm
transactions at or quicker than ATM processing speeds.
Efficiency-You can access and manage all of your bank accounts, including
IRAs, CDs, even securities, from one secure site.
Effectiveness- Many online banking sites now offer sophisticated tools,
including account aggregation, stock quotes, rate alert and portfolio managing
program to help you manage all of your assets more effectively. Most are also
compatible with money managing programs such as quicken and Microsoft
money.
Cheaper alternative: - With increasing competition, it seems to be the cost
factor that is driving banks to offer the facility. The Internet is still a very cheap
alternative to opening a physical branch, and most of the push seems to be
coming from the supply side. The costs of a banking service through the Internet
form a fraction of costs through conventional methods.
From snob value to necessity:- A couple of years ago, there was a belief even
among bankers that customers opening new accounts wanted the online banking
facility, just to "feel good" and very few of them actually used the services.
Today, bankers believe that the trend from `nice to have' is changing to `need to
have'. The "snob value" of banking with an organization that could offer service
on the Internet has given way to a genuine necessity, he feels. "It all depends on
how busy a person is."

12

DISADVANTAGES OF INTERNET BANKING

Start-up may take time-In order to register for your banks online program,
you will probably have to provide ID and sign a form at a bank branch. If you
and your spouse wish to view and manage their assets together online, one of
you may have to sign a durable power of attorney before the bank will display
all of your holdings together.
Learning curves- Banking sites can be difficult to navigate at first. Plan to
invest some time and\or read the tutorials in order to become comfortable in
your virtual lobby.
Bank site changes- Even the largest banks periodically upgrade their online
programs, adding new features in unfamiliar places. In some cases, you may
have to re-enter account information.
HOW E-BANKING CAN EASE YOUR LIFE
Indian banks are trying to make your life easier. Not just bill payment, you can make
investments, shop or buy tickets and plan a holiday at your fingertips. In fact, sources
from ICICI Bank tell us, "Our Internet banking base has been growing at an
exponential pace over the last few years. Currently around 78 per cent of the bank's
customer base is registered for Internet banking." To get started, all you need is a
computer with a modem or other dial-up device, a checking account with a bank that
offers online service and the patience to complete about a one-page application-which can usually be done online. You can avail the following services.
1.Bill payment service: Each bank has tie-ups with various utility companies,
service providers and insurance companies, across the country. It facilitates the
payment of electricity and telephone bills, mobile phone, credit card and
insurance premium bills. To pay bills, a simple one-time registration for each
biller is to be completed. Standing instructions can be set, online to pay
recurring bills, automatically. One-time standing instruction will ensure that bill
payments do not get delayed due to lack of time. Most interestingly, the bank
does not charge customers for online bill payment.
2.Fund transfer: Any amount can be transferred from one account to another of
the same or any another bank. Customers can send money anywhere in India.

13

Payees account number, his bank and the branch is needed to be mentioned
after logging in the account. The transfer will take place in a day or so, whereas
in a traditional method, it takes about three working days. ICICI Bank says that
online bill payment service and fund transfer facility have been their most
popular online services.
3.Credit card customers: Credit card users have a lot in store. With Internet
banking, customers can not only pay their credit card bills online but also get a
loan on their cards. Not just this, they can also apply for an additional card,
request a credit line increase and God forbid if you lose your credit card, you
can report lost card online.
4.Railway pass: This is something that would interest all the aam janta. Indian
Railways has tied up with ICICI bank and you can now make your railway pass
for local trains online. The pass will be delivered to you at your doorstep. But
the facility is limited to Mumbai, Thane, Nasik, Surat and Pune. The bank would
just charge Rs 10 + 12.24 percent of service tax.
5.Investing through Internet banking: Opening a fixed deposit account cannot
get easier than this. An FD can be opened online through funds transfer. Online
banking can also be a great friend for lazy investors. Now investors with
interlinked demat account and bank account can easily trade in the stock market
and the amount will be automatically debited from their respective bank
accounts and the shares will be credited in their demat account.Moreover, some
banks even give the facility to purchase mutual funds directly from the online
banking system. So it removes the worry about filling those big forms for
mutual funds, they will now be just a few clicks away. Nowadays, most leading
banks offer both online banking and demat account. However if the customer
have there demat account with independent share brokers, then need to sign a
special form, which will link your two accounts.
6.Recharging your prepaid phone: Now there is no need to rush to the vendor to
recharge the prepaid phone, every time the talk time runs out. Just top-up the
prepaid mobile cards by logging in to Internet banking. By just selecting the
operator's name, entering the mobile number and the amount for recharge, the
phone is again back in action within few minutes.
7.Shopping at your fingertips: Leading banks have tie ups with various shopping
websites. With a range of all kind of products, one can shop online and the
14

payment is also made conveniently through the account. One can also buy
railway and air tickets through Internet banking.
INTERNET BANKING IN INDIA
The Reserve Bank of India constituted a working group on Internet Banking. The
group divided the Internet banking products in India into 3 types based on the levels
of access granted. They are:
Information Only System: General purpose information like interest rates,
branch location, bank products and their features, loan and deposit calculations
are provided in the banks website. There exist facilities for downloading various
types of application forms. The communication is normally done through e-mail.
There is no interaction between the customer and bank's application system. No
identification of the customer is done. In this system, there is no possibility of
any unauthorized person getting into production systems of the bank through
Internet.
Electronic Information Transfer System: The system provides customerspecific information in the form of account balances, transaction details, and
statement of accounts. The information is still largely of the 'read only' format.
Identification and authentication of the customer is through password. The
information is fetched from the bank's application system either in batch mode
or off-line. The application systems cannot directly access through the Internet.
Fully Electronic Transactional System: This system allows bi-directional
capabilities. Transactions can be submitted by the customer for online update.
This system requires high degree of security and control. In this environment,
web server and application systems are linked over secure infrastructure. It
comprises technology covering

computerization, networking and

security,

inter-bank payment gateway and legal infrastructure. It includes the followings:

o ATM
o DEBIT CARDS
o SMART CARDS
o MOBILE BANKING

15

THE INDIAN SCENARIO

DRIVERS OF CHANGE: Advantages previously held by large financial institutions
have shrunk considerably. The Internet has leveled the playing field and afforded
open access to customers in the global marketplace. Internet banking is a costeffective delivery channel for financial institutions. Consumers are embracing the
many benefits of Internet banking. Access to one's accounts at anytime and from any
location via the World Wide Web is a convenience unknown a short time ago. Thus, a
bank's Internet presence transforms from 'brouchreware' status to 'Internet banking'
status once the bank goes through a technology integration effort to enable the
customer to access information about his or her specific account relationship. The six
primary drivers of Internet banking includes, in order of primacy are:
Improve customer access
Facilitate the offering of more services
Increase customer loyalty
Attract new customers
Provide services offered by competitors
Reduce customer attrition

INTRODUCTION TO ORGANISATION
Bank of Baroda was founded in July 20, 1908 with a paid up capital of Rs 10 lakhs.
Since then bank has traversed an eventful and successful journey of almost 100 years.
Today, Bank of Baroda has a network of 2737 branches including 39 overseas
branches spread over 20 countries. In mid-80s, the Bank of Baroda diversified into
areas of merchant banking, housing finance, credit cards and mutual funds. In 1995
the Bank raised Rs 300 crores through a Bond issue. In 1996 the Bank tapped the
capital market with an IPO of Rs 850cr.
Bank of Baroda (BOB) (BSE: 532134) is the third largest bank in India, after the State
Bank of India and the Punjab National Bank and ahead of ICICI Bank. Bank Of
Baroda has total assets in excess of Rs. 2.27 lakh crores, or Rs. 2,274 billion, a
network of over 3,403 branches and offices, and about 1,100 ATMs. IT plans to open
400 new branches in the coming year. It offers a wide range of banking products and
financial services to corporate and retail customers through a variety of delivery
16

channels and through its specialized subsidiaries and affiliates in the areas of
investment banking, credit cards and asset management. Its total business was Rs.
4,402 billion as of June 30.
As of August 2010, the bank has 78 branches abroad and by the end of FY11 this
number should climb to 90. In 2010, BOB opened a branch in Auckland, New
Zealand, and its tenth branch in the United Kingdom. The bank also plans to open five
branches in Africa. Besides branches, Bank Of Baroda plans to open three outlets in
the Persian Gulf region that will consist of ATMs with a couple of people.
Bank of Baroda took the lead in shifting from manual operating systems to a
computerized work environment. Today, the Bank has 1918 computerized branches,
covering 70% of its network and 91.64% of its business.
Bank of Baroda gives high priority to quality service. In its quest for quality, the Bank
has secured the ISO 9001:2000 certifications for 15 branches. By end of the 2005-06,
the Bank is targeting 54 more branches for this quality certification.

Centenary Year
On the 20th July 2007, the Bank entered its Centenary year. In its quest to become a
world-class bank with global best practices, the Bank is, now, well poised to takeoff
with the most modern business and HR systems and processes. The Bank has already
initiated myriad HR interventions with special thrust on internal talent discovery,
upgrading the managerial skills through training, and improving the motivational
level of the employees of the bank

Mission Statement
To be a top ranking National Bank of International Standards committed to
augmenting stakeholders' value through concern, care and competence.
Education is the most important investment one makes in life. Higher studies and
specialization in certain fields call for additional financial support from time to time.
Whether you are planning school education (nursery to standard XII) of your child,
pursuing a graduate or post-graduate degree, the Bank of Baroda Education Loans,
can help finance your ambitions and goals.
17

Objective of Bank of Baroda

1) Special focus on improving relations with the existing corporate customers
as well as efforts to add new quality customers to the Banks Book.

2) Thrust on business process reengineering to reduce the transaction costs.

3) A dedicated effort to add 2.5 to 3.0 million quality customers to Banks book
in FY09 and in subsequent years

International Presence:
In its international expansion, the Bank of Baroda followed the Indian diaspora. It has
significant international presence with a network of 72 offices in 25 countries, six
subsidiaries, and four representative offices. Among the Bank of Barodas 42
overseas branches are ones in the worlds major financial centers as well as a number
in other countries. The bank is engaged in retail banking via 17 branches of
subsidiaries in Botswana, Guyana, Kenya, Tanzania, and Uganda. The Bank of
Baroda also has a joint-venture bank in Zambia with nine branches. The Bank of
Baroda maintains representative offices in Malaysia, China, Thailand, and Australia.
It plans to upgrade its offices in China and Malaysia shortly to a branch and joint
venture, respectively.
The slogan of Bank of Baroda is "India's International Bank".

Global Presence of Bank of Baroda:

Australia

Bahrain

Belgium

Botswana

China

Ghana

Hong Kong

Guyana

Mauritius

18

Malaysia

South Africa

Singapore

Tanzania

Thailand

Uganda

Trinidad & Tobago

United Arab Emirates

United Kingdom

United State of America

Zambia

Branch Network of BOB in India

Area

No. Of Branches

Metro

604

Urban

504

Semi-urban

619

Rural

1100

Total

2827

Branch Network Overseas

Foreign (Overseas) 71
Total Global

2897

19

International Operations

Wide global network

Bank of Baroda started its overseas journey by opening its first branch way back in
1953 in Mombassa, Kenya. Since then the Bank has come a long way in expanding its
international network to serve NRIs/PIOs and locals. Today it has transformed into
India's International Bank.
It has significant international presence with a network of 72 offices in 25 countries
including 48 branches/offices of the Bank, 21 branches of its eight Subsidiaries and 3
Representative Offices in Malaysia, Thailand&Australia. The Bank also has one
Joint Venture in Zambia with 9 branches
The Bank has presence in world's major financial centers i.e. New York, London,
Brussels, Dubai, Hong Kong, and Singapore.
The "round the clock around the globe" Bank of Baroda is further in the process of
identifying/opening more overseas centers for increasing its global presence to serve
its 33 million global customers in still better way.

20

Recently, it upgraded its operations in Guangzhou, China from Representative Office

to a branch on 2nd August 2008. It also has plans to upgrade its Representative
Offices in Australia and Malaysia.
It has further plans to establish overseas offices in Houston (USA), Canada, New
Zealand, Qatar, Saudi Arabia, Mozambique, Russia etc. Besides this, it has plans to
extend its reach in existing countries of operations in UK, UAE, Uganda, Kenya and
T&T etc.

Customers:

Individual

Stock Broking Entities

HUF (Hindu Undivided Family)

Proprietorship Concerns

Public Limited Companies

Private Limited Companies

Corporate Partnership Firms

Competitors: SBI, HDFC, ICICI, PNB, HSBC etc.

Strength:
It has diversified customer profile, including Blue chip companies, small and medium
sized companies, retail customers, self-help groups, and high net worth individuals.
It has strong brand equity and a wide customer base of over 5 million.
Bank of Barodas financial strength has been recognized by international credit rating
agencies.
A strong capital base ensures that it is well placed for growth of business.
The bank, which has consistently earned profit since its inception, has committed and
competent human capital to power its aggressive growth plan.

21

Future of the bank:

Bank of Baroda looks confidently into future to face & thrive in intense competitive
environment that is emerging in global era. The Bank has now gained experience and
has in place the strategies required for gaining a leadership position.

The values of the bank:

Management Team- The core strength of Bank.
Technology and Tech Initiatives
Strategic Initiatives
Corporate Banking and Credit
The Bank Of Baroda bank family

Product profile
Wholesale Banking

Deposit Products

SME Banking

Loan Products

Retail Banking

ATM / Debit Cards

Rural/Agri Banking

Internet Banking

Wealth Management

Rapid Funds2India

Demat

Baroda e-Trading

BANK OF BARODA SERVICES

NET BANKING: Baroda-Connect is Bank Of Barodas Internet Banking service.
Providing up-to-the-second account information, Net Banking lets you manage your
account from the comfort of your mouse - anytime, anywhere.
BOB Net Banking Secure Access
Bank of Baroda has implemented a new security solution for its customers Baroda22

Connect. As your security is our top priority, we have initiated the Secure Access
solution to protect you from fraudsters and hackers - who are looking to find a way to
access your account.
Currently following transactions are covered under Secure Access
Transfer from one Bank account to other Bank account holders.(under distinct
customer ID)
Transfer from HDFC Bank account to any other Bank's account (also knownas
RTGS & NEFT)
Visa Money Transfer
Third Party Demand Draft through Net Banking
Third Party Transfer?
Third-Party Transfer is a Net Banking feature for which you will need your unique
Customer ID and Login password. Login to Retail/Corporate Banking to confirm that
your ID is active in our records.
What is TPT?
With Third-Party Transfer (TPT) you can transfer funds online from your Bank
account to another Bank/Other Bank account (beneficiary), anywhere in India. This is
a real-time transaction and the debit and credit will reflect in the respective accounts
immediately.
Third Party Transfer can be initiated:
From your Account to other Bank Accounts using National electronic Funds Transfer (NEFT) - Funds will be credited to
thebeneficiary account in two working days.
Real Time Gross Settlement (RTGS) - Funds will be credited to thebeneficiary
account on the same working days.
From your Bank account to other Bank accounts (different cuts ids).
From your account to any Visa Card (Debit or Credit) within India.
For issuance of Third Party Demand Drafts from your account.

23

Organizational Structure:

24

LITERATURE REVIEW
The Internet, much like the ATM that came before it, is fundamentally a new
distribution channel through which banks can deliver traditional banking products and
services. Initially, banks promoted their core capabilities, namely, products, channels
and advice, through the Internet. Then, they entered the Internet commerce market as
providers/distributors of their own products and services
Malhotra, Pooja & Singh, B. (2010) This study is an attempt to present the present
status of Internet banking in India and the extent of Internet banking services offered
by Internet banks. In addition, it seeks to examine the factors affecting the extent of
Internet banking services. The data for this study are based on a survey of bank
websites explored during July 2008. The sample consists of 82 banks operating in
India at 31 March 2007. Multiple regression technique is employed to explore the
determinants of the extent of Internet banking services. The results show that the
private and foreign Internet banks have performed well in offering a wider range and
more advanced services of Internet banking in comparison with public sector banks.
Among the determinants affecting the extent of Internet banking services, size of the
bank, experience of the bank in offering Internet banking, financing pattern and
ownership of the bank are found to be significant. The primary limitation of the study
is the scope and size of its sample as well as other variables (e.g. market,
environmental, regulatory etc.), which may have an effect on the decision of the banks
to offer a wide range of Internet banking services. The purpose of the study is to help
fill significant gaps in knowledge about the Internet banking landscape in India. The
findings are expected to be of great use to the government, regulators, commercial
banks, and other financial institutions, e.g. co-operative banks planning to offer
Internet banking, bank customers and researchers. The bankers as well as society at
large will come to know where the banks lag in terms of adoption of Internet banking
and in providing different products and services. An understanding of the factors
affecting the extent of Internet banking services is essential both for economists
studying the determinants of growth and for the creators and producers of such
technologies. Moreover, this paper contributes to the empirical literature on diffusion
of financial innovations, particularly Internet banking, in a developing country, i.e.
India.

25

Uppal, R.K. & Chawla, R. (2009) this study highlights customer perceptions
regarding e-banking services. A survey of 1,200 respondents was conducted in
October 2008 in Ludhiana district, Punjab. The respondents were equally divided
among three bank groups namely, public sector, private sector and foreign banks. The
present study investigates the perceptions of the bank customers regarding necessity
of e-banking services, quality of e-banking services, bank frauds, future of e-banking,
preference of bank customers regarding banks, comparative study of banking services
in various bank groups, preferences regarding use of e-channels and problems faced
by e-bank customers. The major finding of this study is that customers of all bank
groups are interested in e-banking services, but at the same time are facing problems
like, inadequate knowledge, poor network, lack of infrastructure, unsuitable location,
misuse of ATM cards and difficulty to open an account. Keeping in mind these
problems faced by bank customers, this paper frames some strategies like customer
education, seminars/meetings, proper network and infrastructure facilities, online
shopping facilities, proper working and installation of ATM machines, etc., to
enhance e-banking services. Majority of professionals and business class customers as
well as highly educated and less educated customers also feel that e-banking has
improved the quality of customer services in banks.
Azouzi, D. (2009) this paper aims to check if the current and prompt technological
revolution altering the whole world has crucial impacts on the Tunisian banking
sector. Particularly, this study seeks some clues on which we can rely in order to
understand the customers' behavior regarding the adoption of electronic banking. To
achieve this purpose, an empirical research is carried out in Tunisia and it reveals that
panoply of factors is affecting the
Customers attitude toward e-banking. For instance; age, gender and educational
qualifications seem to be important and they split up the group into electronic banking
adopters and traditional banking defenders and so, they have significant influence on
the customers' adoption of e-banking. Furthermore, this study shows that despite the
presidential incentives and in spite of being fully aware of the e-banking's benefits,
numerous respondents are still using the conventional banking. It is worthy to
mention that the fear of loss because of transactions errors or hackers plays a
significant role in alienating Tunisian customers from online banking.

26

B. Dizon, J.A. (2009) In this study they have founded that while big banks still
conduct the bulk of their business in brick and mortar bank branches, the finance
sector has been increasingly investing on e-banking facilities to offer 24-hour, queuefree services to their regular clients, whether through ATM machines, mobile phones
or the Internet. "E- Banking's appeal is primarily its convenience. Clients nowadays
want instant results; they don't want to wait anymore," said Francisco M. Caparros, Jr.,
senior vice-president of Asia United Bank and president of Banc Net. It's also turned
out to be a more efficient way to process transactions, as e-banking does away with
most of the paperwork that clients have to accomplish. "A lot of people don't like
filling forms," Mr. Caparros added. "Online banking, in particular, relies on user
names and passwords which need to be protected," said Ferdinand G. La Chica, first
vice- president and marketing group head for Sterling Bank of Asia.
These anti- theft barriers are at times supplemented by transaction passwords and
"tokens", often a keychain-like device that is issued to the client and generates
random, one-time passwords to enable him to log into his account online. Last year,
the Rural Bank Association of the Philippines announced that its members are looking
to appoint local merchants like sari-sari stores as third party agents where consumers
can open new accounts and make large payments. Such informal outlets will enable
banks to reach out to small-income businesses and individuals, particularly those in
the agrarian sector, most of who are based outside the city center.
Nitsure, R.R. (2003), this article indicates the E-banking Challenges and
opportunities lies in the banking industry. e-banking has the potential to transform the
banking business as it significantly lowers transaction and delivery costs. This paper
discusses some of the problems developing countries, which have a low penetration of
information and telecommunication technology, face in realizing the advantages of ebanking initiatives. Major concerns such as the 'digital divide' between the rich and
poor, the different operational environments for public and private sector banks,
problems of security and authentication, management and regulation, and inadequate
financing of small and medium scale enterprises (SMEs) are highlighted.
Picado, Gonzalez & Eckelman (2004), this study investigated the customer
satisfaction using QFD and a research on service quality and customer satisfaction has
become significant in the service industries. This study develops a case study that

27

considers both external and internal service management issues and subsequent
service innovations based on the framework of quality function deployment (QFD).
The application of the customer window quadrant (CWQ) and the action plan matrix
in the analysis of customer and service elements constitute a different approach for
QFD. Some benefits and disadvantages of the QFD process are discussed as
compared to extant service quality and customer paradigms. Finally, suggestions and
directions are offered for future applications, with particular interest in the e-bank
service management issues.
Shah & Braganza (2007), this survey indicates the Critical Success Factors in ebanking and the author suggest in this article that the organizational factors, which are
critical to the success of e-banking, are investigated. Different pieces of literature
report different factors as key to success and generally based on subjective, perceptual
data. A synthesis of existing literature is a basis for survey questions. The top factors
found to be most critical for the success in e-banking are: quick responsive
products/services, organizational flexibility, services expansion, systems integration
and enhanced customer service. An important lesson from this research is that
organizations need to view the e-banking initiative as a business critical area rather
than just a technical issue. They need to give attention to internal integration, which
may include channels, technology and business process integration, and improving the
overall services to their customers.
Malhotra, P. & Singh, B. (2007) stated about this research tells us that the larger
banks, banks with younger age, private ownership, higher expenses for fixed assets,
higher deposits and lower branch intensity evidence a higher probability of adoption
of this new technology. Banks with lower market share also see the Internet banking
technology as a means to increase the market share by attracting more and more
customers through this new channel of delivery. Further, the adoption of Internet
banking by other banks increases the probability that a decision to adopt will be made.
An understanding of the factors affecting this choice is essential both for economists
studying the determinants of growth and for the creators and producers of such
technologies. From this perspective, understanding the factors determining the
adoption of technology becomes highly relevant from the policy point of view.
Moreover, the studies on the adoption of financial innovations are related to
developed markets, e.g. US or European banking markets. Hence, this paper
28

contributes to the empirical literature on diffusion of financial innovations,

particularly Internet banking, in a developing country.
Reeti, Sanjay, and Malhotra, A. (2009), stated about the Customers perspectives
regarding e-banking in an emerging economy. So that, the author determining various
factors affecting customer perception and attitude towards and satisfaction with ebanking is an essential part of a bank's strategy formulation process in an emerging
economy like India. To gain this understanding in respect of Indian customers, the
study was conducted on respondents taken from the northern part of India. The major
findings depict that customers are influenced in their usage of e-banking services by
the kind of account they hold, their age and profession, attach highest degree of
usefulness to balance enquiry service among e-banking services, consider security &
trust most important in affecting their satisfaction level and find slow transaction
speed the most frequently faced problem while using e-banking.

OBJECTIVES

To study about the factors that affects the customer perception towards ebanking of Bank of Baroda

To know about the current and future prospects of E-Banking to the customers.

To find out the major problems faced by the customers while using e-banking
services.

To determining growth direction of online banking service.

Promoting E-banking services in banking industry.

Customer perception will be taken into consideration about the Internet banking.

RESEARCH METHODOLOGY
I have collected data from Bank of Baroda Annual Reports and Statistics from year
2005 to 2011; I estimate the growth rate and calculate the forecasting of the BarodaConnect users in future.
We have used different set of formula as follows:-

29

DATA ANALYSIS
Data Table for the Estimation of Growth Rate & Forecasting

This data table is provided to have an overview at the total no. Of users of BarodaConnect and later on, Ive calculated the growth rate and the forecasting of BarodaConnect.

No. of Baroda-Connect users Year-wise

700000
600000
500000
400000
300000
200000
100000
0
31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09 31-Mar-10 31-Mar-11

This shows the growth rate of Baroda-Connect users Year wise from the financial
Year 2006 to Year 2011.

30

The growth rate of BARODA-CONNECT is 39 %, and based on the financial data the
calculation tells that the Forecasting for the users in year 2015 assuming 2008-09 as
base year. The value comes 12,76,555.
It means that 12,76,555 customers get registered through BARODA CONNECT.

Data for Customer Satisfaction Survey

INTERNET BANKING
Here two Surveys are
Enclosed
Customer Satisfaction Survey 1
Based on Questionnaire # 1
Customer Satisfaction Survey 2
Based on Questionnaire # 2
(*Note: - Questionnaire are attached in APPENDIX at the last)

Customer Satisfaction Survey

INTERNET BANKING
This survey is based on the set of questionnaire filled up by the customers using the
Baroda-Connect facility of Bank of Baroda.
1st questionnaire is to analyze the behavior of Customers, i.e. they are using Internet
Banking or not, their age, incomes, and their taste and preferences regarding and also
to analyze whether they are a frequent internet user or not.
And,
2nd questionnaire is a detailed study of the features of the Bank of Baroda in
BARODA-CONNECT

31

DATA ANALYSIS & INTERPETATION

Based on 1st questionnaire
1. Gender:Gender

Total

Male

46

Female

104

Pie-Chart Analysis:-

Gender Ratio
31%
Male
Female
69%

Interpretation: The result shows that majority of respondents i.e. 69% are males who are
using the E-banking services and 31% are the female who are using E-banking services.
Female are not using this service because they have less knowledge about the internet and
they trust face to face interaction more. So it shows that E-banking is more famous among
male.

32

2. Age:Age

Total No.

Below 20

21-30

51

31-40

57

41-50

38

Above 51

Age Group
3% 0%
25%

34%
Below 20
21-30
31-40
41-50
38%

Above 51

Interpretation: The result shows that majority of respondents i.e. 34% and 38 % falls under
the category of 21-30 years and 31-40 years, where as 25 %falls under 41-50years it shows
that E-banking is mainly famous among youngsters as they are the major users of E-banking
and least comes under above 51 years.

33

3. Third factor which I came to know about the choices and preferences of the
customers, and they opinion i.e. they are satisfied with the internet banking
facility, and also they asked to score the services out of 10.

Yes

No

Total

Male

83

21

104

Female

39

46

Total

122

28

150

Satisfaction (Yes-No)
90
80
70
60
50
40

Male

Male, Yes, 83

Female

30
20

Female, Yes, 39
Male, No, 21
Female, No, 7

10
0
Yes

No

Interpretation: The results show that 122 respondents who are aware of E-banking they are
availing E-banking services and 28 are not availing E-banking services yet they are aware of
E-banking the reason is that they still have faith in traditional banking. They fell that their
would be the Risk factor involved with the online usage of their bank accounts, other than risk
factor, the browser compatibility, and lack of knowledge of features led to the less satisfaction
level of the customers.

34

DATA ANALYSIS & INTERPETATION

Based on 2nd questionnaire
As stated earlier my 2nd questionnaire is entirely based on the Baroda-Connect
features avail to the customers, the 2nd questionnaire is totally customer centric, to
check whether the Baroda-Connect is fulfilling the customers requirements or not, Is
customer satisfied with the banking facilities over internet ?
Here I apply the liker scaling to find out the actual score provided by the customer,
they were given a 7 rating scale to choose their options.
1. What were your reasons for choosing our online banking service?

Reason to Choose "Online-Banking"

8%

20%
Convenience

35%

To save Time
24 hr. Acess to Acc.
37%

Others

Interpretation: The results shows that approximately 70% respondents use the
facility to save their time, and to have 24 hr. access to their A/c, it is 20 % customer
feels convenient to facility, 8% choose the option othersand the study tells that
respondents found it difficult to access their bank online because of lack of internet
knowledge and connectivity.

35

2. How often do you use our online services?

Access their A/c

150

121
78

100
35

50

26

0
Daily

Weekly

Monthly

Never

3. Online features of Bank of Baroda BARODA CONNECT

A. Bill Payment:Bill Payment Rating

Total No.s

65

68

Total

150

Pie-Chart Analysis:-

0% 1%

Bill Payment

2%
5%
3%

1
2

45%

3
44%

4
5
6
7

36

Interpretation: The most of the customers are really liked the facilities provided by
banks as they agree that the facilities are good for them so they like to avail the Ebanking services provided by the banks and the result shows that approximately 90%
respondents are highly satisfied with the e-banking services provided by their bank
and 10% respondents are not satisfied with the e-banking services provided by the
bank.
B. E-Alerts:E-Alerts Rating

Total No.s

66

73

Total

150

Pie-Chart Analysis:-

0%

0%

E-Alerts

1%
4%
2%

1
2

49%
44%

3
4
5
6

Interpretation: The most of the customers are really liked the facilities provided by
banks as they agree that the facilities are good for them so they like to avail the Ebanking services provided by the banks and the result shows that approximately 90%
respondents are highly satisfied with the e-banking services provided by their bank
and 10% respondents are not satisfied with the e-banking services provided by the
bank.
37

C. Fund Transfer:Fund Transfer Rating

Total No.s

39

71

32

Total

150

Pie-Chart Analysis:-

Fund Transfer
0%
21%

0%

1%

5%

1
26%

2
3
4
5

47%

6
7

Interpretation: The most of the customers are really liked the facilities provided by
banks but they need the improvement in the services, they feel that the usage of fund
transfer facility is bit complicated, or some of them were not able to understand the
process thats why they think so. 47% respondents are satisfied with the e-banking
services provided by their bank and around 30% respondents feel that the change in
the services usage is required.

38

D. Stop Payment:Stop Payment Rating

Total No.s

22

70

52

Total

150

Pie-Chart Analysis:-

Stop Payment

0%
0%

35%

0%
4%

15%

1
2
3
4
5

46%

6
7

Interpretation: The most of the customers are really liked the facilities provided by
banks but they need the improvement in the services, they feel that the usage of stop
payment facility is bit complicated, or some of them were not able to understand the
process thats why they think so. 46% respondents are satisfied with the e-banking
services provided by their bank and around 44% respondents feel that the change in
the services usage is required.

39

E. Balance Enquiry:Balance Enquiry Rating

Total No.s

59

89

Total

150

Pie-Chart Analysis:-

0%

0%

Balance Enquiry
0% 1%

1%
1
39%

2
3

59%

4
5
6
7

Interpretation: The most of the customers are really liked the facilities provided by
banks as they agree that the facilities are good for them so they like to avail the Ebanking services provided by the banks and the result shows that approximately 90%
respondents are highly satisfied with the e-banking services provided by their bank
and 10% respondents are not satisfied with the e-banking services provided by the
bank.

40

F. Check Retrieval:Check Retrieval Rating

Total No.s

81

63

Total

150

Pie-Chart Analysis:-

Check Retrival
0%

0%

0%

0%

4%

1
2

42%

3
54%

4
5
6
7

Interpretation: The most of the customers are really liked the facilities provided by
banks as they agree that the facilities are good for them so they like to avail the Ebanking services provided by the banks and the result shows that approximately 90%
respondents are highly satisfied with the e-banking services provided by their bank
and 10% respondents are not satisfied with the e-banking services provided by the
bank.

41

G. Bank Statement:Bank Statement Rating

Total No.s

69

71

Total

150

Pie-Chart Analysis:0%
0%
0%

Bank Statement
0%

0%
1
2

51%

49%

3
4
5
6
7

Interpretation: The most of the customers are really liked the facilities provided by
banks as they agree that the facilities are good for them so they like to avail the Ebanking services provided by the banks and the result shows that approximately 90%
respondents are highly satisfied with the e-banking services provided by their bank
and 10% respondents are not satisfied with the e-banking services provided by the
bank.

42

RECOMMENDATIONS
We can see the time is changing and we the passage of time people are accepting
technology there is still a lot of perceptual blocking which hampers the growth its the
normal tendency of a human not to have changes work on the old track, thats also
one of the reason for the slow acceptance of internet banking accounts.

Banks should obey the RBI norms and provide facilities as per the norms, which
are not being followed by the banks. While the customer must be given the
prompt services and the bank officer should not have any fear on mind to
provide the facilities as per RBI norms to the units going sick.

Internet banking facility must be made available in all branches of these two
Banks.

Each section of these Banks should be computerized even in rural areas also.

Personalized banking should be given a thrust as more and more banks area
achieving in usual services.

Covering up the towns in rural areas with ATMs so that the people in those area
scan also avail better services.

Prompt dealing with permanent customers and speedy transactions without

harassing the customers.

Fair dealing with the customers. More contributions from the employees of the
bank. The staff should be co-operative, friendly and must be capable of
understanding the problems of the customers.

Give proper training to customers for using I-banking.

Create a trust in mind of customers towards security of their accounts.

Provide a platform from where the customers can access different accounts at
single time without extra charge.

Make their sites more users friendly. Customers should be motivated to use Ibanking facilities more.

Keeping in view the terms of reference, the recommendations in case of securetransactions over Internet. A summary of these recommendations is given below.

43

1. Technology and Security Standards:

The role of the network and database administrator is pivotal in securing the
information system of any organization. Some of the important functions of the
administrator via-a-vis system security are to ensure that only the latest versions of
the licensed software with latest patches are installed in the system, proper user
groups with access privileges are created and users are assigned to appropriate groups
as per their business roles, a proper system of back up of data and software is in place
and is strictly adhered to, business continuity plan is in place and frequently tested
and there is a robust system of keeping log of all network activity and analyzing the
same.
Organizations should make explicit security plan and document it. There should be a
separate Security Officer / Group dealing exclusively with information systems
security. The Information Technology Division will actually implement the computer
systems while the Computer Security Officer will deal with its security. The
Information
Systems Auditor will audit the information systems.
Access Control: Logical access controls should be implemented on data, systems,
application software, utilities, telecommunication lines, libraries, system software, etc.
Logical access control techniques may include user-ids, passwords, smart cards or
other biometric technologies.
Firewalls: At the minimum, banks should use the proxy server type of firewall so that
there is no direct connection between the Internet and the banks system. It facilitates
a high level of control and in-depth monitoring using logging and auditing tools. For
sensitive systems, a stately inspection firewall is recommended which thoroughly
inspects all packets of information, and past and present transactions are compared.
Isolation of Dial Up Services: All the systems supporting dial up services through
modem on the same LAN as the application server should be isolated to prevent
intrusions into the network as this may bypass the proxy server.
Security Infrastructure: PKI is the most favored technology for secure Internet
banking services. However, it is not yet commonly available. While PKI

44

infrastructure is strongly recommended, during the transition period, until IDRBT or

Government puts in place the PKI infrastructure, the following options are
recommended
1.

Usage of SSL, which ensures server authentication and the use of client side

certificates issued by the

2.

banks themselves using a Certificate Server.

The use of at least 128-bit SSL for securing browser to web server

communications and, in addition, encryption of sensitive data likes passwords in

transit within the enterprise itself.
Isolation of Application Servers: It is also recommended that all unnecessary
services on the application server such as ftp, telnet should be disabled. The
application server should be isolated from the e-mail server.
Security Log (audit Trail): All computer accesses, including messages received,
should be logged. All computer access and security violations (suspected or
attempted) should be reported and follow up action taken as the organizations
escalation policy.

Penetration Testing: The information security officer and the information system
auditor should undertake periodic penetration tests of the system, which should
include:

Attempting to guess passwords using password-cracking tools.

Attempt to overload the system using DdoS (Distributed Denial of Service) &
DoS attacks.

Check if commonly known holes in the software, especially the browser and the
e-mail software exist.

The penetration testing may also be carried out by engaging outside experts
(often called Ethical Hackers).

Physical Access Controls: Though generally overlooked, physical access controls

should be strictly enforced. The physical security should cover all the information
systems and sites where they are housed both against internal and external threats.

45

Back up & Recovery: The bank should have a proper infrastructure and schedules
for backing up data. The backed-up data should be periodically tested to ensure
recovery without loss of transactions in a time frame as given out in the banks
security policy. Having disaster recovery sites, where backed-up data is stored, should
ensure business continuity. These facilities should also be tested periodically.
Monitoring against threats: The banks should acquire tools for monitoring systems
and the networks against intrusions and attacks. These tools should be used regularly
to avoid security breaches.
Education & Review: The banks should review their security infrastructure and
security policies regularly and optimize them in the light of their own experiences and
changing technologies. They should educate on a continuous basis their security
personnel and also the end-users.
Log of Messages: The banking applications run by the bank should have proper
record keeping facilities for legal purposes. It may be necessary to keep all received
and sent messages both in encrypted and decrypted form.
Certified Products: The banks should use only those security solutions/products,
which are properly certified for security and for record keeping by independent
agencies (such as IDRBT).
Maintenance of Infrastructure: Security infrastructure should be properly tested
before using the systems and applications for normal operations. The bank should
upgrade the systems by installing patches released by developers to remove bugs and
loopholes, and upgrade to newer versions which give better security and control.
Approval for I-banking: All banks having operations in India and intending to offer
Internet banking services to public must obtain an approval for the same from RBI.
The application for approval should clearly cover the systems and products that the
bank plans to use as well as the security plans and infrastructure. It should include
sufficient details for RBI to evaluate security, reliability, availability, auditability,
recoverability, and other important aspects of the services. RBI may provide model
documents for
Security Policy, Security Architecture, and Operations Manual.

46

2. Legal Issues
The banks providing Internet banking service, at present are only accepting the
request for opening of accounts. The accounts are opened only after proper physical
introduction and verification. Considering the legal position prevalent, particularly of
Section 131 of the Negotiable Instruments Act, 1881 and different case laws, the
Group holds the view that there is an obligation on the banks not only to establish the
identity but also to make enquiries about integrity and reputation of the prospective
customer. The present legal regime does not set out the parameters as to the extent to
which a person can be bound in respect of an electronic instruction purported to have
been issued by him. Generally authentication is achieved by security procedure,
which involves methods and devices like user-id, password, personal identification
number (PIN), code numbers and encryption etc., used to establish authenticity of an
instruction.
In Internet banking scenario there is very little scope for the banks to act on stoppayment instructions from the customers. Hence, banks should clearly notify to the
customers the timeframe and the circumstances in which any stop-payment
instructions could be accepted.
The banks providing Internet banking service and customers availing of the same are
currently entering into agreements defining respective rights and liabilities in respect
of Internet banking transactions. A standard format / minimum consent requirement to
be adopted by banks may be designed by the Indian Banks Association, which should
capture all essential conditions to be fulfilled by the banks, the customers and relative
rights and liabilities arising there from. This will help in standardizing documentation
as also develop standard practice among bankers offering Internet banking facility.
The Consumer Protection Act 1986 defines the rights of consumers in India and is
applicable to banking services as well. Currently, the rights and liabilities of
customers availing of Internet banking services are being determined by bilateral
agreements between the banks and customers. It is open to debate whether any
bilateral agreement defining customers rights and liabilities, which are adverse to
consumers than what is enjoyed by them in the traditional banking scenario will be
legally tenable. Considering the banking practice and rights enjoyed by customers in
traditional banking, it appears the banks providing I-banking may not absolve
47

themselves from liability to the customers on account of unauthorized transfer

through hacking. Similar position may obtain in case of denial of service.
3. Regulatory and Supervisory Issues
All banks, which propose to offer transactional services on the Internet, should obtain
approval from RBI prior to commencing these services. Banks application for such
permission should indicate its business plan, analysis of cost and benefit, operational
arrangements like technology adopted, business partners and third party service
providers and systems and control procedures the bank proposes to adopt for
managing risks, etc. The bank should also submit a security policy covering
recommendations made in chapter-6 of this report and a certificate from an
independent auditor that the minimum requirements prescribed there have been met.
After the initial approval the banks will be obliged to inform RBI any material
changes in the services / products offered by them.
RBI may require banks to periodically obtain certificates from specialist external
auditors certifying their security control and procedures. The banks will report to RBI
every breach or failure of security systems and procedure and the latter, at its
discretion, may decide to commission special audit / inspection of such banks.
Record maintenance and their availability for inspection and audit is a major
supervisory focus. RBIs guidelines on Preservation and Record Maintenance will
need to be updated to include risks heightened by banking on the net. The
enhancements will include access to electronic record only by authorized officials,
regular archiving of data, a sufficiently senior officer to be in charge of archived data
with well defined responsibilities, use of proper software platform and tools to
prevent unauthorized alteration of archived data, availability of data on-line, etc. If
not available on-line, the system should be capable of making available the data for
the same financial year within 24 hours and past data within a period of maximum 48
hours.
Banks should develop outsourcing guidelines to manage effectively, risks arising out
of third party service providers such as risks of disruption in service, defective
services and personnel of service providers gaining intimate knowledge of banks
systems and mi utilizing the same, etc. Alternatively, IBA or IDBRT may develop

48

broad guidelines for use of the banking community.

Inter-bank payment gateways must have capabilities for both net and gross settlement.
All settlement should be intra-day and as far as possible, in real time. It must be
obligatory for payment gateways to maintain complete trace of any payment
transaction covering such details like date and time of origin of transaction, payee,
payer and a unique transaction reference number (TRN).
Connectivity between the gateway and the computer system of the member bank
should be achieved using a leased line network (not through Internet) with appropriate
data encryption standard. All transactions must be authenticated using user-id and
password. Once, the regulatory framework is in place, the transactions should be
digitally certified by any licensed certifying agency. SSL / 128 bit encryption must be
used as minimum level of security. Adequate firewalls and related security measures
must be taken to ensure privacy to the participating institutions in a payment gateway.
Internationally accepted standards such as ISO8583 must be used for transmitting
payment and settlement messages over the network.
The credit risk associated with each payment transaction will be on the payee bank.
The legal basis for such transactions and settlement will be the bilateral contracts
between the payee and payees bank, the participating banks and service provider and
the banks themselves. The rights and obligations of each party must be clearly stated
in the mandate and should be valid in a court of law.
It will be necessary to make customers aware of risks inherent in doing business over
the Internet. This requirement will be met by making mandatory disclosures of risks,
responsibilities and liabilities to the customers through a disclosure template. The
banks should also provide their latest published financial results over the net.
Hyperlinks from banks websites often raise the issue of reputational risk. Such links
should not mislead the customers in to believing that they sponsor any particular
product or any business unrelated to banking. Hence, hyperlinks from banks websites
should be confined to only those portals with which they have a payment arrangement
or sites of their subsidiaries or principals. Hyperlinks to banks website from different
portals are normally meant to pass information pertaining to purchases made by
banks customers in the portal. Banks must follow the minimum recommended

49

security precautions while dealing with such request, which includes customer
authentication through user-id and password, independent confirmation of transaction
by the customer and authorizing payment, use of SSL and 128-bit encryption for all
communication both with the portal and customer browser terminal, etc.

LIMITATIONS
Every research is conducted under some constraints and this research is not an
exception.
Limitations of this study are as follows:

As a research is based on a sample, therefore, the findings may not reveal

the factual information about the research problem, though an utmost care
will be taken to select a truly representative sample.

There may be some bias in the responses of the respondents, which cannot
be ruled out fully.

Sudden change in the e- banking practices during the course of research can
affect the results.

The study is limited to areas of Jorhat District only.

The sample size of only 150 was taken from the large population for the
purpose of study, so there can be difference between results of sample from
total population.

People were reluctant to go in to details because of their busy schedules.

Merely asking questions and recording answers may not always elicit the
actual information sought.

Due to continuous change in environment, what is relevant today may be

irrelevant tomorrow.

CONCLUSIONS
In this paper a new conceptual perspective on how to measure user experience in the
Internet banking context was introduced. The user experience in Internet banking was
a construct of three underlying dimensions:
1) Satisfaction,

50

2) Appearance, and
3) Ease of use.
In addition, when markets of electronic services mature a good user experience of
customer could be a competitive advantage, with which companies could differentiate
their products and services. From this perspective, it could be argued that evaluation
of user experience and different user experience scales will be likely needed in the
future.
This study attempted to identify key quality attributes of Internet banking services by
analyzing Internet banking customers & their comments on banking experience. The
findings of this study show that despite of many advantages of online banking. People
still consider it as an alternative for analyzing their bank records. Although every
bank today provides the facility of online banking but most of people use it only once
a month. This reason is that in case of Internet banking interpersonal interaction with
customers is seldom possible. Identification & measurement of customers
expectations of the Internet banking services provide a frame of reference & their
related quality dimension. The main factors, which persuade people to use online
banking, are comfort & convenience & the facility, which attracts them most, is
quality & quantity of information. Therefore the implementation of quality initiatives
should begin with defining customers need & preferences & their related quality
dimensions
There is still a lot needed for the banking system to make reforms and train their
customers for using internet for their banking account. Going through the survey the
main problem lies that still customer have a fear of hacking of accounts and thus do
not go on for internet banking. Banks are trying their level best by providing the best
security options to the customers but then to there is lot of factors which betrays a
customer from opening an internet bank account.
Banks are providing free Internet banking services also so that the customers can be
attracted. By asking the bank employs we came to know that maximum numbers of
Internet bank account holders are youth and businessman. E Banking is an innovative
tool that is fast becoming a necessity. It is a successful strategic weapon for banks to
remain profitable in a volatile and competitive marketplace of today. If proper

51

training should be given to customer by the bank employs to open an account will be
beneficial secondly the website should be made friendlier from where the first time
customers can directly make and access their accounts. In future, the availability of
technology to ensure safety and privacy of e-transactions and the RBI guidelines on
various aspects of internet banking will definitely help in rapid growth of internet
banking in India.

BIBLIOGRAPHY
Bailey, J., & Pearson, S. (1983). Development of a Tool for Measuring and

Analyzing Computer User Satisfaction. Management Science, 29(5), 530545.

Beckett, A., Hewer, P., & Howcroft, B. (2000). An exposition of consumer

behavior in the financial services industry. The International Journal of

Bank Marketing, 18(1).
Daniel, E. (1999). Provision of electronic banking in the UK and the

Republic of Ireland. International Journal of Bank Marketing, 17(2), 7282.

DeVellis, R. (2003). Scale Development: theory and applications (2 ed.

Vol. 26). California: Sage Publications.

Hadden, R., & Whalley, A. (2002). The Branch is dead, long live the

Internet! (or so you'd have thought if we hadn't listened to the customer).

International Journal of Market Research, 44(3), 283.
Ives, B., Olson, M., & Baroudi, J. (1983). The Measurement of User

Information Satisfaction. Communications of the ACM, 26, 785-793.

Johnson, G. (1996). Exploring Novel Banking User Interfaces: Usability

Challenges in Design & Evaluation. IEE Colloquim on Interfaces, 126(3),

1-3.
Joseph, M., McClure, C. And Joseph, B. (1999). Service quality in the

banking sector: the impact of technology on service delivery. International

Journal of Bank Marketing, 60, 50-68.

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 Lewis, J. (2002). Psychometric Evaluation of the PSSUQ Using Data from

Five Years of Usability Studies. International Journal of Human-Computer

Interaction, 14(3&4), 463-488.
Otter, M., & Johnson, H. (2000). Lost in hyperspace: metrics and mental

models. Interacting with Computers, 13, 1-40.

Sheshunoff, A. (2000). Internet Banking - an update from frontlines. ABA

Banking Journal, 92(1)

53

APPENDIX
Questionnaire # 1
Customer Satisfaction Survey INTERNET BANKING
Name- _________________________________ Location-________________________
DatePersonal Profile:
1. How old are you?
Below 25 years old

25 30 years old

31 35 years old

36 40 years old

41 45 years old

46 years old and above

2. What is your gender?

Male

Female

3. What is your qualification?

Matriculation

Sr. Secondary

Diploma

Bachelor of Degree

Master

Doctor of Philosophy (PhD)

4. What is your current profession?

Priv./ Govt. Sector employee

Self employee

Student

Others

5. What is your monthly income?

Less than Rs 20,000

Rs 20,000 Rs 35,000

Rs 35,000 Rs 50,000

Rs 50,000 Rs 65,000

Rs 65,000 and above

6. How many banks are you dealing with?
1

54

5 and above

Name of the Banks-_______________________________________________________

Internet Banking Questionnaire
1. How long have you been using the Internet Banking?

Less than 1 month

1 to 6 months

7 to 12 months

More than 1 year

2. How frequently do you use Mobile-banking services per month (for example, balance inquiry, fund transfer
between accounts)?

Never

1 to 4 times

5 to 8 times

9 to 12 times

Over 12 times
3. How frequently do you visit your bank branch per month?

Never

1 to 4 times

5 to 8 times

9 to 12 times

Over 12 times
4. How frequently do you use an Automated Teller Machine (ATM) per month?

Never

1 to 4 times

5 to 8 times

Over 9 times

5. What is the main reason that you typically visit your bank branch (please choose the single most important
reason)?

Make a deposit

Investment

Balance inquiry

Cash Withdrawal

advice

Other

55

6. Have you purchased any product through Internet Banking?

Yes

No

7. Approximately how many times have you purchased any product through the Internet in the last 12 months?

Never

1 to 4 times

5 to 8 times

Over 9 times

This survey is designed to understand Internet users perspectives on Internet banking, their experience with
Internet banking, and their expectations of Internet banking services. Only summary measures and conclusions
from this survey will be reported. Your participation in this survey is greatly appreciated.
-Thank You-

56

Questionnaire # 2
Customer Satisfaction Survey
INTERNET BANKING

Name- _____________________________________

Location-________________

DateDear

customer,

We continually strive to improve our products and services. Please complete this survey about
our Internet-Banking to help us serve you even better in the future.

1* What were your reasons for choosing our online banking service? Please select all
that apply.
Convenience
To save time
24 hour access to accounts
Other

2* How often do you use our online services?

Daily
Weekly
Monthly
Never

57

3* Which online features do you use regularly? Please select all that apply.
Pay bills
Make an account inquiry
Transfer funds between accounts
Wire Transfers
Process payroll
Order check books
Other

4* Please rate the following online features of Bank of Baroda (e-banking)...

Bill payment
1

Very Bad

Excellent

E-alerts

58

Very Bad

Excellent

Wire Transfer
1

Very Bad

Excellent

Stop Payment
1

Very Bad

Excellent

Balance Inquiry
1

Very Bad

Excellent

Check Image Retrieval

1

Very Bad

Excellent

Retrieving Bank Statement

1

Very Bad

Excellent

Your participation in this survey is greatly appreciated.

59

-Thank You-

60