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The Internet has revolutionized the way we live, shop, entertain and interact and also the way

we save and invest. Internet banking arrived in India in the late 1990s [1]. ICICI was the first bank to champion its usage and introduced internet banking to its customers in 1996. With lower internet costs and increased awareness about electronic media, online banking established itself only in 1999. Other banks followed suit, including HDFC, Citibank, IndusInd and the now redundant Times Bank [2]. Internet banking changed both the banking industry as well as banks services to its customers. Anywhere banking came to be recognized as an opportunity also for differentiated and competitive services. Ancillary online services like checking account status, fund transfer, ordering demand drafts, loan applications, credit card verifications, shopping portals etc. as well as not requiring a visit to the branch during office hours were viewed as high-value offerings and increasingly started to become a necessity rather than a service. Once banking institutions recognized the low processing cost per transaction via the internet, they began viewing online banking as an extension of the bank rather than as an add-on service. The motivation to introduce online banking now also included new business potential, additional funds from new and existing customers, expansion in geographical reach, image as a tech-savvy bank especially if targeting the youth and the threat of customers shifting loyalty if they did not introduce it [3]. Nationalized banks initially viewed online banking as insecure and counterintuitive and were therefore hesitant. But eventually, SBI, Canara Bank, Allahabad Bank, Punjab National Bank, Bank of Baroda, Syndicate Bank and others introduced it. SBI launched internet banking in 2001 and experienced good response. In general, internet banking saw an exponential rise in users [4]. Today, banks encourage their customers to use online banking. Besides cost and revenue impacts, this paradigm shift is because they also recognize that self-control

transactions have greater potential for customer satisfaction and retention. Online banking has thus come to be among essential banking services. The approach to adopting online banking however is often to merely stay abreast of industry and technology and online banking is becoming a separate business unit driven by technological possibilities. The user often has minimal place in such an approach as evidenced by non-human centric experiences that flourish. However, the cultural and organizational shift needed by Indian banks to draw old customers into this new banking channel as well as to draw new customers requires a user centric focus. But how much have banks paid attention to the user? How is the overall experience and how do customers perceive their bank as they struggle unaided in the comfort of their homes? How cognizant are banks that customers silently leave after getting frustrated? Do they measure how much revenue they are losing because of a technology focused approach to online banking? How do Indian consumers behave in this dichotomy between technology barrier and convenience? 2Indian Banking Industry and Online Awareness of its User Base A large chunk of the Indian banking industry still belongs to the public sector banks having the most extensive network of physical branches. These are followed by large private banks and lastly by multinational banks (MNC) who have the smallest physical network and therefore their online banking needs to be the most developed and able to address user needs without requiring human intervention. This is depicted in Figure 1. The fact that most government organisations have their payroll accounts with public sector banks contributes significantly to the large customer bases of thesebanks. Traditional public sector banks have existed for many years and have serviced diverse income groups. This has resulted in their customer base being huge as well as belonging to a wider demographic representation, given Indias heterogenous

population as well. However, most of the traditional customers prefer to bank with a bank with a human touch and prefer public sector banks as they form an emotional relationship with their bank personnel, which is not really encouraged by private sector or multi-national banks [5]. The new generation which has been banking for less than a decade prefers faster transactions and more professional relationships as compared to the traditional customer. For them, opening a bank account is incidental and connected to their direct deposit salary accounts. The private sector bank has captured the corporates and IT sector as compared to the public sector bank. As a result, banks in the public sector tend to have a huge user base, but very few of their customers have the technology orientation or the inclination to use electronic media for banking. This is depicted in Figure 2. Therefore, the awareness of customers of public sector banks about online banking as an active banking tool is relatively lower. To tap this type of user base that has an inherent barrier to and not an obvious need for internet usage, just adding an internet banking channel to a banks lists of services may not be enough of an incentive. A streamlined, simple and customer satisfaction oriented approach to service novice users only can help banks achieve better internet banking penetration. Competition and the constant changes in technology and lifestyles have changed the face of banking. Now-a-days, banks are seeking alternative ways to provide and differentiate amongst their varied services. Customers, both corporate as well as retail, are no longer willing to queue in banks, or wait on the phone, for the most basic of services. They demand and expect to be able to transact their financial dealings where and when they

wish to do. With the number of computers increasing every year, the electronic delivery of banking services is becoming the ideal way for banks to meet their clients expectations. The use of information technology in banking is now inherent in banking industry. A customer can log on banks website and access his account. He can perform following functions online: Balance enquiry, Transfer of funds and online payment. Internet banking is the term used for new age banking system. Internet banking is also called as online banking and it is an outgrowth of PC banking. Internet banking uses the internet as the delivery channels by which to conduct banking activity, for example, transferring funds, paying bills, viewing checking and saving account balances, paying mortgages and purchasing financial instruments and certificates of deposits. Internet banking is a result of explored possibility to use internet application in one of the various domains of commerce. It is difficult to infer whether the internet tool has been applied for convenience of bankers or for the customers convenience. But ultimately it contributes in increasing the efficiency of banking operation as well providing more convenience to customers. Without even interacting with the bankers, customers transact from one corner of the country to another corner. More recently in India too, a

wider array of financial products and services have become available over the Internet which has thus become an important distribution channel for a number02 Uppal of banks. There are many advantages of online banking. It is convenient, it is not bound by operational timings, there are no geographical barriers and the service can be offered at a minuscule cost. Electronic banking has experienced explosive growth and has transformed traditional practices in banking. Private banks in India were the first to implement internet banking services in the banking industry. Private banks, due to late entry into the industry, understood that the establishing network in remote corners of the country is a very difficult task. It was clear to them that the only way to stay connected to the customers at any place and at anytime is through internet applications. They took the internet applications as a weapon of competitive advantage to corner the great monoliths like state bank of India, Indian bank etc. Private banks are pioneer in India to explore the versatility of internet applications in delivering services to customers. As per prediction of Broadie et al (2007) the e-banking is leading to a paradigm shift in marketing practices resulting in high performance in the banking industry. Delivery of service in banking can be provided efficiently

only when the back ground operations are an electronic system. The components like data, hardware, software, network and people are the essential elements of the system. Banking customers get satisfied with the system when it provides them maximum conveniences and comfort while transacting with the bank. Internet enabled electronic system facilities the operation to fetch these result. As in depth analysis would help to understand that internet enabled electronic bank system differentiates from traditional banking operation through faster delivery of information from the customer and service provider. Additionally, it has to be noted that the banking operations does not transfer physical currencies instead it transfer the information about the value for currencies. Ibanks enable transfer of information more swiftly on-line. In service organizations like banks, information flows more than physical items. In the commercial world, especially in most advanced societies today, money is rather carried in information storage medium such as cheques, credit cards and electronic means that in its pure cash form. According to christopher et al (2006). Ebanking has become an important channel to sell the products and services and is perceived to be necessity in order to stay profitable in successful. The perception is the formed as a result of interpreting

the experience. There is a growing interest in understanding the users experience as it is observed as a larger concept than user satisfaction. Customers have started perceiving the services of bank through internet as a prime attractive feature than any other prime product features of the bank. Customers have started evaluating the banks based on the convenience and comforts it provides to them. Bankers have started developing various product feature and sThere are many advantages of online banking. It is convenient, it is not bound by operational timings, there are no geographical barriers and the service can be offered at a minuscule cost. Electronic banking has experienced explosive growth and has transformed traditional practices in banking. Private banks in India were the first to implement internet banking services in the banking industry. Private banks, due to late entry into the industry, understood that the establishing network in remote corners of the country is a very difficult task. It was clear to them that the only way to stay connected to the customers at any place and at anytime is through internet applications. They took the internet applications as a weapon of competitive advantage to corner the great monoliths like state bank of India, Indian bank etc. Private banks are pioneer in India to explore the versatility of

internet applications in delivering services to customers. As per prediction of Broadie et al (2007) the e-banking is leading to a paradigm shift in marketing practices resulting in high performance in the banking industry. Delivery of service in banking can be provided efficiently only when the back ground operations are an electronic system. The components like data, hardware, software, network and people are the essential elements of the system. Banking customers get satisfied with the system when it provides them maximum conveniences and comfort while transacting with the bank. Internet enabled electronic system facilities the operation to fetch these result. As in depth analysis would help to understand that internet enabled electronic bank system differentiates from traditional banking operation through faster delivery of information from the customer and service provider. Additionally, it has to be noted that the banking operations does not transfer physical currencies instead it transfer the information about the value for currencies. Ibanks enable transfer of information more swiftly on-line. In service organizations like banks, information flows more than physical items. In the commercial world, especially in most advanced societies today, money is rather carried in information storage medium such as cheques, credit cards and electronic means that in its

pure cash form. According to christopher et al (2006). Ebanking has become an important channel to sell the products and services and is perceived to be necessity in order to stay profitable in successful. The perception is the formed as a result of interpreting the experience. There is a growing interest in understanding the users experience as it is observed as a larger concept than user satisfaction. Customers have started perceiving the services of bank through internet as a prime attractive feature than any other prime product features of the bank. Customers have started evaluating the banks based on the convenience and comforts it provides to them. Bankers have started developing various product feature and services using internet applications. Benefits of i-banking The concept of i-banking is becoming popular among the customers and the bankers. It is very convenient, easy, cost effective and time savvy for the bank customers and at the same time, it is very convenient, cost effecting and time savvy for the bank employees. The bank can enhance customer base and make planning for the future with the help of i-banking. Review of literature Aktan B., Teker E. and Erosy P. (2009) examine the usage of internet in Turkey to make a basic due-diligence

investigation for the financial institutions, including banking, stock trading, insurance and provision of financial information over the period 2005 and 2008. The findings show that internet usage in Turkey with its young population has continued to grow dramatically in financial services in terms of customers and financial transactions of various nature. Amin Hanudin (2007) studies technology acceptance of internet banking among undergraduate students in Malaysia based on modified version of Technology Acceptance Model (TAM) and develops a technology acceptance model for internet banking. The results suggest that perceived usefulness (PU), perceived ease of use (PEOU) and perceived credibility (PC) had a significant relationship with behavioral intention. Further, these measures are good determinant for undergraduate acceptance for internet banking. Results also suggest that PU and PEOU had a significant relationship with computer self-efficacy (CSE). The study is useful in providing the understanding of the TAM among undergraduate from Malaysians perspective. Avasthi & Sharma (2000-01) have analyzed in their study that advances in technology are set to change the face of banking business. Technology has transformed the delivery channels by banks in retail banking. It has

also impacted the markets of banks. The study also explored the challenges that banking industry and its regulator face. B. Janki (2002) analyzed that how technology is affecting the employees productivity. There is no doubt, in India particularly public sector banks will need to use technology to improve operating efficiency and customer services. The focus on technology will increase like never before to add value to customer services, develop new products, strengthen risk management etc. the study concludes that technology is the only tool to achieve their goals. Ganesan R. and Vivekanandan K. (2009) describe a secured hybrid architecture model for the internet banking using Hyperelliptic curve cryptosystem. This hybrid model is implemented with the Hyperelliptic curve cryptosystem (HECC) and it performs the encryption and decryption processes in an efficient way merely with an80-bit key size. The various screen shots given in this contribution shows that the hybrid model which encompasses HECC can be considered in the internet banking environment to enrich the privacy and integrity of the sensitive data transmitted between the clients and the application server. Hua G. (2009) investigates the online banking acceptance in China by conducting an experiment to

investigate how users perception about online banking is affected by the perceived ease of use of website and the privacy policy provided by the online banking website. The 110 undergraduate students in Chinese University are involved in the investigation. The study finds that both perceived ease of use and privacy policy have a significant impact on users adoption of online banking. The study also investigates relative importance of perceived ease of use, privacy, and security. Perceived ease of use is of less importance than privacy and security. Security is the most important factor influencing users adoption. The study also discusses the implications of these results and limitations. Janson N. (2009) analyzes the consequences of the major instability introduced by internet banking on the banks ability to manage a liquidity crisis in Northern Rock Bank. The study shows that inconsistency of the Bank of England policy led to the initial bank run and that because it persisted in that direction it further led to the banks bankruptcy. Internet banking did not cause the failure of the bank but it certainly accelerated the fall of the bank which calls for a greater consistency of the central bank role as a lender of last resort. The study concludes that despite the existence of lender of last resort and deposit insurance scheme, markets

participants and individual depositors in particular do not like confusing messages during uncertain times. Karjaluoto et al. (2002) Internet banking offer services regardless of geography and time and banks thus provide its services to the customers for them to use at their convenience. Khan M.S. (2007) examines the service quality of education sector and internet banking by employing SERVQUAL. The data is collected through questionnaire from students, alumni, parents and recruiters of technical institutions for education quality and from internet banking customers for internet banking quality. The study employs factor analysis to differentiate the dimensions of service quality into different factors and concludes that all type customers are more concerned with academic factor to improve the education service quality while in case of internet banking customers are satisfied with reliability of services but not very much satisfied with user friendliness dimensions. The results indicate that privacy/security and fulfillment do not contribute significantly towards the overall service quality and the male and females differ in their views towards service quality dimensions. The study also suggests some measures to improve service quality and explore future areas of further research.
E-banking is defined as the automated delivery of new & traditional banking products & services directly to customers through electronic, interactive communication channels. E-banking includes the systems that

enable financial institution, customers, individuals & businesses to access accounts, transact business or obtain information on financial products & services through a network including the internet. Customers access e-banking services using an intelligent electronic device such as personal computer, Automated teller machine etc. There are five basic services associated with online banking: view account balances and transaction histories; paying bills; transferring funds between accounts; requesting credit card advances; and ordering checks for more faster services that can be provide by domestic and foreign bank.

E-banking involves information technology based banking. Under this I.T system, the banking services are delivered by way of a Computer-Controlled System. This system does involve direct interface with the customers. The customers do not have to visit the bank's premises. WHAT IS INTERNET BANKING ? Internet banking allows customers to perform a wide range of banking transactions electronically via the bank's Web site. When first introduced, Internet banking was used mainly as an information presentation medium in which banks marketed their products and services on their Web sites. With the development of asynchronous technologies and secured electronic transaction technologies, however, more banks have come forward to use Internet banking both as a transactional as well as an informational medium. As a result, registered Internet banking users can now perform common banking transactions such as .

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Writing checks, Paying bills, Transferring funds, Printing statements, and Inquiring about account balances.

Popular services covered under E-Banking The popular services covered under E-banking include:-

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Automated Teller Machines, Credit Cards, Debit Cards, Smart Cards, Electronic Funds Transfer (EFT) System, Cheque Truncation Payment System, Mobile Banking,

Advantages of E-Banking The main advantages of E-banking are:-

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The operating cost per unit services is lower for the banks. It offers convenience to customers as they are not required to go to the bank's premises. There is very low incidence of errors. The customer can obtain funds at any time from ATM machines. The credit cards and debit cards enables the Customers to obtain discounts from retail outlets. The customer can easily transfer the funds from one place to another place electronically

Types of Products & Services

1. Total Branch Automation Speed up bank transactions and less error More customer friendly and flexible Towards paperless transactions. 2. Any Branch Banking (ABB) Any Branch Banking (ABB) is a facility for the customers to operate their account from any of the networked branches. The branch where the customer maintains his account is the base branch and the branch from where he carries out his transactions is referred as the remote branches. Facilities available under ABB : Cash withdrawal & Cash deposits Account statement Facility to issue multi-city cheques Fund transfer Balance enquiry Purchase of demand drafts pay order Repayment of loan account 3. DEMAT Services It offers secure and convenient way to keep track our securities and investment over a period of time without the hassle of handling physical documents. It also provides facility of online trading. 4. Microfinance It refers to a movement that envisions a world in which low income households have permanent access to a range of high quality financial service to finance their income producing activities, build assets, stabilize consumption and protect against risks. 5. Plastic Money Plastic money is the alternative to the cash or standard money. It is convenient to carry. The various Plastic money/cards include ATM cards, Debit Card, ATM cum Debit Card, Credit Cards, Smart Card, Charge Cards, Co-branded cards; add on cards and so on. 6. Mobile Banking Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information. It is used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). Type of Electronic Systems 1. ATM ATM stands for Automatic Teller Machine. It is a computerized telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller. In simple words, it is simple to use self service solution.

2. RTGS It stands for Real Time Gross Settlement system. It is a fund transfer mechanism where transfer of money takes place from one bank to another on a real time and on gross basis. This is the fastest possible money transfer system through the banking channel. It is different from EFT and NEFT. It is primarily for large volume transaction. The time taken for effecting funds transfer o from one account to another is normally 2 hours.