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What is E-Banking?
E -banking is defined as:
Electronic banking is an umbrella term for the process by which a customer may
perform banking transactions electronically without visiting a brick-and-mortar
institution. The following terms all refer to one form or another of electronic
banking: personal computer (PC) banking, Internet banking, virtual banking,
online banking, home banking, remote electronic banking, and phone banking.
PC banking and Internet or online banking are the most frequently used
designations. It should be noted, however, that the terms used to describe the
various types of electronic banking are often used interchangeably.
Various authors define E-Banking differently but the most definition depicting the
meaning and features of E-Banking are as follows:
Electronic banking is also called Cyber banking , virtual banking and online
banking .
Development of E-Banking
HISTORY:-
E-Banking made its debut in UK and USA during 1920s. It became prominently popular
during 1960s through electronic funds transfers and credit cards. The concept of Webbased banking came into existence, in Europe and USA in the beginning of 1980s.
1980s :
-
E-commerce
Early 1980s :
-
May 1995 :
Wells Fargo - the first bank in the world to offer customer access to their
accounts over the internet .
Automated Teller
Machine (ATM)
Tele banking or phone
banking
Mobile banking
PC banking
Internet banking
Wireless or PDA
baking
Types of E-Banking
Environmenntal
Communication
Competitiveness
Cost
Convenience
1- ) Accepting deposits
and dispenses cash
2- ) Convenient in
handling accounts
3- ) First electronic
channel introduced
HISTORY:
It came into operation in the 1970s in the developed countries like the US. It is
accessible for corporate customers that have large volumes of payments to effect
and dispose of a fully automated accounting system. They can establish a
Computer to Computer link with their bank and in this way exchange truly
paperless credit transfers which are handled all the way
advice giving details of the payment was sent to the account holder. BACS was
later used to transfer the payment directly.
Stanford Federal Credit Union was the first financial institution to offer online
internet banking services to all of its members in October 1994.[4]
Today, many banks are internet only banks. Unlike their predecessors, these
internet only banks do not maintain brick and mortar bank branches. Instead,
they typically differentiate themselves by offering better interest rates and more
extensive online banking features.
Security
Another way to provide TANs to an online banking user is to send the TAN of the
current bank transaction to the user's (GSM) mobile phone via SMS. The SMS
text usually quotes the transaction amount and details, the TAN is only valid for a
short period of time. Especially in Germany, Austria and The Netherlands, many
banks have adopted this "SMS TAN" service as it is considered very secure.
Signature based online banking where all transactions are signed and encrypted
digitally. The Keys for the signature generation and encryption can be stored on
smartcards or any memory medium, depending on the concrete implementation.
Attacks[edit]
Attacks on online banking used today are based on deceiving the user to steal
login data and valid TANs. Two well known examples for those attacks are
phishing and pharming. Cross-site scripting and keylogger/Trojan horses can
also be used to steal login information.
A method to attack signature based online banking methods is to manipulate the
used software in a way, that correct transactions are shown on the screen and
faked transactions are signed in the background.
A 2008 U.S. Federal Deposit Insurance Corporation Technology Incident Report,
compiled from suspicious activity reports banks file quarterly, lists 536 cases of
computer intrusion, with an average loss per incident of $30,000. That adds up to
a nearly $16-million loss in the second quarter of 2007. Computer intrusions
increased by 150 percent between the first quarter of 2007 and the second. In 80
percent of the cases, the source of the intrusion is unknown but it occurred
during online banking, the report states.[5]
The most recent kind of attack is the so-called Man in the Browser attack, where a
Trojan horse permits a remote attacker to modify the destination account number
and also the amount.
Countermeasures[edit]
There exist several countermeasures which try to avoid attacks. Digital
certificates are used against phishing and pharming, the use of class-3 card
readers is a measure to avoid manipulation of transactions by the software in
signature based online banking variants. To protect their systems against Trojan
horses, users should use virus scanners and be careful with downloaded
software or e-mail attachments.
In 2001, the U.S. Federal Financial Institutions Examination Council issued
guidance for multifactor authentication (MFA) and then required to be in place by
the end of 2006.
Advantages of Tele-banking:-
i.
ii.
iii.
iv.
v.
vi.
Transfer of funds
vii.
viii.
3- ) Mobile Banking
What is mobile banking:
Mobile banking comes in as a part of the banks initiative to offer multiple channel
banking providing convenience for its customer. A versatile multifunctional, free
service that is accessible and viewable on the monitor of mobile phone. Mobile
phones are playing great role in banking- both directly and indirectly. They are
being used both as banking and other channels.
SMS-banking:
The Short Message Service (SMS) is a GSM service to exchange text
messages up to 140 byte (or 160 characters of 7 bit). The transmission of mobile-
Digital TV Banking:
Digital TV Banking- Using the standard digital reception
equipment (set top box and remote control), users can access
their bank account. Abbey National and HSBC services are
available via Digital TV providers. One of its main selling points
is that no account details are transmitted via the World Wide Web.
Advantages:
24 hour, 7 day a week access
No need to queue as you would at a bank
Disadvantages:
Limited use of your account compared to other methods
Costs are incurred when accessing your account (charged at local rate)
There is no personal interaction between yourself and the bank (employee/advisor)
You cannot deposit physical cash using TV banking i.e. cheques, cash in hand. This
would require a personal visit to the bank
If your Sky TV system fails to function you cannot access TV bank.
5- ) INTERNET BANKING
Internet Banking lets you handle many banking transactions via your personal
computer. For instance, you may use your computer to view your account balance,
request transfers between accounts, and pay bills electronically. Internet banking
system and method in which a personal computer is connected by a network service
provider directly to a host computer system of a bank such that customer service
requests can be processed automatically
The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions
have used powerful computer networks to automate million of daily transactions; today,
often the only paper record is the customers receipt at the point of sale. Now that their
customers are connected to the Internet via personal computers, banks envision similar
advantages by adopting those same internal electronic processes to home use. Banks
view online banking as a powerful value added tool to attract and retain new
customers while helping to eliminate costly paper handling and teller interactions in an
increasingly competitive banking environment
It generally implies a service that allows customers to use some form of computer to access
account-specific information and possibly conduct transactions from a remote location - such as
at home or at the workplace. The obvious advantage to the consumer is convenience--one bank
recently used the advertising motto "bank naked" to emphasize the customer's freedom to
conduct routine banking transactions from the comfort and security of his/her home 24X7.
INFORMATIO
NAL
COMMUNUCAT
IVE
TRANSACTIO
NAL
ADVANTAGES OF INTERNET
BANKING
Convenience
Transaction speed
Efficiency
Effectiveness
6- ) WIRELESS OR PDA
BANKING
The most widespread solution for mobile banking is based on micro-websites following the
WAP standard (Wireless Application Protocol). The function of WAP banking is in many
ways similar to the function of Electronic banking using http. The client sends a request
and gets a response with page content which is stored on or dynamically generated by a
standard web server. The main difference is in the usage of a WAP gateway for the
conversion of the protocols. At banks must be considered that very sensitive data is
processed. While a normal content provider doesnt has to observe special security
precautions, and in some cases can even use the services of extern providers, has to
secure its web server and WAP Gateway especially against unauthorized access. This is
especially necessary because of the fact that inside the WAP Gateway the encryption
protocol is converted from SSL/TLS to WTLS with the effect that data is not encrypted
while it is processed. While authentication is assured via a PIN (personal identification
number) of the user, authorization for transactions is realized via transaction numbers
(TAN).
Fund transfer
Credit card
Debit Card
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. 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.
Credit card:
Credit card customers
A credit card is part of a system of payments named after thesmall plastic card issued to users
of the system. It is a cardentitling its holder to buy goods and services based on theholder's
promise to pay for these goods and services. The issuerof the card grants a line of credit to the
consumer (or the user)from which the user can borrow money for payment toa merchant or as a
cash advance to the user.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.
Debit Card:
Debit cards are also known as check cards. Debit cards look likecredit cards or ATM (automated
teller machine) cards, butoperate like cash or a personal check. Debit cards are differentfrom
credit cards. While a credit card is a way to "pay later," adebit card is a way to "pay now." When
you use a debit card, yourmoney is quickly deducted from your checking or savingsaccount.
Debit cards are accepted at many locations, includinggrocery stores, retail stores, gasoline
stations, and restaurants.You can use your card anywhere merchants display your card's brand
name or logo. They offer an alternative to carrying a checkbook or cash.
Debit Card Debit Card is an identity card issued by a bank to a customer, which the customer
can use to buy goods. The price of the goods is charged to customer's bank account.
BENEFITS OF E-BANKING
It enables a business;
To run its operations more
effectively
Lower cost than traditional
financial
Management mechanisms
Communication
-
communicate easily
Environmental
Others
-
Banks have quickly leveraged the capabilities of and Web 2.0 technologies and adopted the
online banking model. Every mainstream bank now offers a host of banking services and
products to an ever increasing base of customers. Through online banking, banks have been
able to reach out to millions of customers not in their geographical area of operations and offer
more products and a relatively better, convenient and flexible banking experience than that
prevalent in traditional, fixed-location branches.
More Customers
Through online banking, better service levels and strategic marketing initiatives, banks are able
to reach out to more customers than possible through traditional banking through physical
location branches.
Online Only Products and Services
Leveragability--and amenability of new technologies, tools and widespread broadband Internet
acceptance--has made it possible for banks to offer a whole host of online only products and
services to customers, such as CDs, e-bank statements, financial calculators, and news feeds.
Broader Customer Base
Banking online has afforded customers user-friendly features of Websites, robust security
technologies, privacy protection measures, and mainstream Internet acceptance. Banks can
reach out to a broader customer base beyond the geographical confines of their locations or
base operations.
Attractive Rates and Incentives
Better management practices, consolidated operations and streamlined savings from managing
and delivering online banking services allow banks to offer attractive rates and other incentives
to customers.
Cost Savings
Banks save a significant amount of operational capital from not having to open brick and
mortar branches in new locations and far-flung areas. These savings are passed onto the
consumer in the form of reduced or no fees for inter-bank and even intra-bank money.
DISADVANTAGE OF E-BANKING
Security Risk
there are several other establishments in and outside Mumbai, apart from the corporate
center. The bank boasts of having as many as 14 local head offices and 57 Zonal
Offices, located at major cities throughout India. It is recorded that SBI has about 10000
branches, well networked to cater to its customers throughout India.
ATM
SBI provides easy access to money to its customers through more than 8500 ATMs in
India. The Bank also facilitates the free transaction of money at the ATMs of State Bank
Group, which includes the ATMs of State Bank of India as well as the Associate Banks
State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc.
You may also transact money through SBI Commercial and International Bank Ltd by
using the State Bank ATM-cum-Debit (Cash Plus) card.
Subsidiaries
The State Bank Group includes a network of eight banking subsidiaries and several
non-banking subsidiaries. Through the establishments, it offers various services
including merchant banking services, fund management, factoring services, primary
dealership in government securities, credit cards and insurance.
Other Services
Agriculture/Rural Banking
NRI Services
ATM Services
Demat Services
Corporate Banking
Internet Banking
Mobile Banking
International Banking
RBIEFT
E-Pay
E-Rail
Broking Services
Gift Cheques
ICICI
ICICI Bank is India's second-largest bank with total assets of Rs. 3,634.00 billion (US$
81 billion) at March 31, 2010 and profit after tax Rs. 40.25 billion (US$ 896 million) for
the year ended March 31, 2010. The Bank has a network of 2,530 branches and 6,102
ATMs in India, and has a presence in 19 countries, including India.
ICICI Bank offers a wide range of banking products and financial services to corporate
and retail customers through a variety of delivery channels and through its specialised
subsidiaries in the areas of investment banking, life and non-life insurance, venture
capital and asset management.
The Bank currently has subsidiaries in the United Kingdom, Russia and Canada,
branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai
International Finance Centre and representative offices in United Arab Emirates, China,
South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has
established branches in Belgium and Germany.
ICICI Bank Limited (NSE: ICICIBANK, BSE: 532174, NYSE: IBN, NASDAQ: IBN) is a
major banking and financial services company based in Mumbai. It is the second largest
bank in India and the largest private sector bank in India by market capitalization. The
bank also has a network of 2,529 branches (as on 31 March 2010) and about 6,102
ATMs in India and presence in 19 countries, as well as some 24 million customers (at
the end of July 2007). ICICI Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels and
specialization subsidiaries and affiliates in the areas of investment banking, life and
non-life insurance, venture capital and asset management. (These data are dynamic.)
ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank's shares are
listed on the stock exchanges at BSE, NSE, Kolkata and Vadodara (formerly Baroda) ;
its ADRs trade on the New York Stock Exchange (NYSE).
The Bank is expanding in overseas markets and has the largest international balance
sheet among Indian banks. ICICI Bank now has wholly owned subsidiaries, branches
and representatives offices in 19 countries, including an offshore unit in Mumbai. This
includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary
through which the HiSAVE savings branch is operated), offshore banking units in
Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong
and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia,
South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is
targeting the NRI (Non-Resident Indian) population in particular.
ICICI reported a 1.15% rise in net profit to 1,014.21 crore on a 1.29% increase in total
income to 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank's
CASA ratio increased to 30% in 2008 from 25% in 2007.
ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab
National Bank and HDFC Bankits main competitors
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE).
In 1994, the Industrial Credit and Investment Corporation of India established ICICI
Bank, to undertake commercial banking operations - taking deposits, credit cards, car
loans etc. In 1998, its stake was reduced to 46 per cent through a public offering of
shares in India in 1997; an equity offering in the form of ADRs listed on the NYSE in
1999; an all-stock amalgamataion of Bank of Madura in 2000; and secondary market
sales to institutional investors in 2001.
However, in October 2001, the Boards of ICICI and ICICI Bank approved the reverse
merger of ICICI and its retail finance subsidiaries ICICI Personal Financial Services
Limited and ICICI Capital Services Limited, with the more profitable ICICI Bank.
At the same time, ICICI Bank started its international expansion by opening
representative offices in New York and London. In India, ICICI Bank bought the Shimla
and Darjeeling branches that Standard Chartered Bank had inherited when it acquired
Grindlays Bank. In 2003, ICICI Bank opened subsidiaries in Canada and the United
Kingdom (UK), and in the UK it established an alliance with Lloyds TSB. It also opened
an Offshore Banking Unit (OBU) in Singapore and representative offices in Dubai and
Shanghai. In 2004, ICICI Bank opened a representative office in Bangladesh to tap the
extensive trade between that country, India and South Africa. In 2005, ICICI Bank
acquired Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn in
assets, head office in Balabanovo in the Kaluga region, and with a branch in Moscow.
ICICI Bank renamed the bank as ICICI Bank Eurasia. Also, ICICI Bank established a
branch in Dubai International Financial Centre and in Hong Kong.
In 2006, ICICI Bank UK opened a branch in Antwerp, in Belgium. ICICI Bank opened
representative offices in Bangkok, Jakarta, and Kuala Lumpur. In 2007, ICICI Bank
amalgamated Sangli Bank, which was headquartered in Sangli, in Maharashtra State,
and which had 158 branches in Maharashtra and another 31 in Karnataka State. With
respect to the international sphere, ICICI Bank also received permission from the
government of Qatar to open a branch in Doha. Also, ICICI Bank Eurasia opened a
second branch, this time in St. Petersburg. In 2008, The US Federal Reserve permitted
ICICI Bank to convert its representative office in New York into a branch. ICICI Bank
also established a branch in Frankfurt. In 2009, ICICI Bank made huge changes in its
organisation like elimination of loss making department and restreching outsourced staff
or renegotiate their charges in consequent to the recession. In addition to this, ICICI
Bank adopted a massive approach aims for cost control and cost cutting. In consequent
of it, compesation to staff was not increased and no bonus declared for 2008-09. On 23
May ICICI Bank announced that it would merge with Bank of Rajasthan through a
share-swap in a non-cash deal that values the Bank of Rajasthan at about 3,000 crore.
ICICI Bank announced that the merger expand ICICI Bank's branch network by 25%. [9]
[10][11]
On 18h October 2010, ICICI Bank will inaugurate I-Express, an instant crossborder money transfer option for Non-Resident Indians (NRIs). This service will be
available through the ICICI Bank's select partners in the Gulf Cooperation Council.
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), Internet is increasingly used by banks 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.
Indias banking sector is growing at a fast pace. India has become one of the most
preferred banking destinations in the world. The reasons are numerous: the economy is
growing at a rate of 8%, Bank credit is growing at 30% per annum and there is an everexpanding middle class of between 250 and 300 million people (larger than the
population of the US) in need of financial services. All this enables double-digit returns
on most asset classes which is not so in a majority of other countries. Foreign banks in
India achieving a return on assets (ROA) of 3%, their keen interest in expanding their
businesses is understandable even more so when compared with the measly 1%
average ROA for the Top 1000 banks in the world.
From the perspective of banking products and services being offered through Internet,
Internet banking is nothing more than traditional banking services delivered through an
electronic communication backbone, viz, Internet. But, in the process it has thrown open
issues which have ramifications beyond what a new delivery channel would normally
envisage and, hence, has compelled regulators world over to take note of this emerging
channel. Some of the distinctive features of i-banking are:
1. It removes the traditional geographical barriers as it could reach out to customers of
different countries / legal jurisdiction. This has raised the question of jurisdiction of law /
supervisory system to which such transactions should be subjected,
2. It has added a new dimension to different kinds of risks traditionally associated with
banking, heightening some of them and throwing new risk control challenges,
3. Security of banking transactions, validity of electronic contract, customers privacy,
etc., which have all along been concerns of both bankers and supervisors have
assumed different dimensions given that Internet is a public domain, not subject to
control by any single authority or group of users,
4. It poses a strategic risk of loss of business to those banks who do not respond in
time, to this new technology, being the efficient and cost effective delivery mechanism of
banking services,
5. A new form of competition has emerged both from the existing players and new
players of the market who are not strictly banks.
Why this
research
An analysis of the differences in risk perceptions between bank customers using
Internet Banking and those not using Internet Banking was done and it showed that
Literature
review:-
[1] IAMAI report on online banking 2006 . 43% of online banking user
havent started online financial transaction because of security reasons, 39% havent
started because they prefer face to face, 22% havent started because they dont know
how to use, for 10% sites are not user friendly and for 2% banks are not providing the
facility of internet banking. According to research 68% of the customers can not say that
when they will be starting the financial transactions through internet.
Maximum numbers of online banking users are male and maximum of them are in age
the group of 25-35. Numbers of female users are very less i.e. 17% only. More than
60% of the people who are having account with have accounts in 3-4 banks.
Only 37% of Indian Internet users come from Top 10 cities i.e. Mumbai, Bangalore,
Delhi, Calcutta, Chennai, Pune, Hyderabad, Ahmedabad, Surat and Nagpur. Another
day and another number. As per IAMAI and I-cube, the number of active Internet user
(i.e. ones who logon to Internet atleast once a month) is now 32 million and numbers
who have used Internet atleast once stands at 46 million.
[2] The Indian Internet Banking Journey In 2001, a Reserve Bank of India
survey revealed that of 46 major banks operating in India, around 50% were either
offering Internet banking services at various levels or planned to in the near future.
According to a research report,( India Research, Kotak Securities, May 2000.) while in
2001, India's Internet user base was an estimated 9 lakh; it was expected to reach 90
lakh by 2003. Also, while only 1% of these Internet users utilized the Internet banking
services in 1998, the Internet banking user base increased to 16.7% by mid- 2000.
[3] Meuter et al. (2000) have identified critical incidents of customer satisfaction
and dissatisfaction with technology-based service encounters. Given that business-tobusiness transactions are the fastest growing segment of technology-driven services
(Hof, 1999); Meuter and his colleagues (2000) suggested investigating what drives
business customer satisfaction or dissatisfaction with technologydriven services.
According to Gnroos (1982), customers distinguish the quality of customer interactions
that take place during service delivery (functional quality) and the quality of the outcome
the customer receives in the service encounter (technical quality).
time
risk,
finacial
risk,
performance
risk,
psychological
risk
and
RESEARCH METHODOLOGY
RESEARCH TYPE
We use descriptive research
Descriptive research is also called Statistical Research. The main goal of this type
of research is to describe the data and characteristics about what is being studied.
The idea behind this type of research is to study frequencies, averages, and other
statistical calculations. Although this research is highly accurate, it does not gather
the causes behind a situation. Descriptive research is used to obtain information
concerning the current status of the phenomena to describe "what exists" with
respect to variables or conditions in a situation.
Here we also tried to find out the main cause why there is perceptual blocking of
the Indian customers towards internet banking. The methods involved range from
the survey which describes the status quo, the correlation study which investigates
the relationship between variables, to developmental studies which seek to
determine changes over time.
procedure
Collection of information
Analysis of information
DATA COLLECTION
Primary Data: Structured Questionnaire
Secondary Data: Online Database, Journals, Surveys
SAMPLING
TOOLS
Statistical : SPSS
Techniques : MDS , Multiple Regression, cross tabs, anova test, factor analysis, chi
square test.
Primary research entails the use of immediate data in determining the survival of
the market. The popular ways to collect primary data consist of surveys, interviews
and focus groups, which shows that direct relationship between potential customers
and the companies. Whereas secondary research is a means to reprocess and reuse
collected information as an indication for betterments of the service or product.
Both primary and secondary data are useful for businesses but both may differ
from each other in various aspects.
In secondary data, information relates to a past period. Hence, it lacks aptness and
therefore, it has unsatisfactory value. Primary data is more accommodating as it
shows latest information.
Secondary data is obtained from some other organization than the one
instantaneously interested with current research project. Secondary data was
collected and analyzed by the organization to convene the requirements of various
research objectives. Primary data is accumulated by the researcher particularly to
meet up the research objective of the subsisting project.
Secondary data though old may be the only possible source of the desired data on
the subjects, which cannot have primary data at all. For example, survey reports or
secret records already collected by a business group can offer information that
cannot be obtained from original sources.
Firm in which secondary data are accumulated and delivered may not
accommodate the exact needs and particular requirements of the current research
study. Many a time, alteration or modifications to the exact needs of the
investigator may not be sufficient. To that amount usefulness of secondary data
will be lost. Primary data is completely tailor-made and there is no problem of
adjustments.
Summary of the reportInternet banking (or E-banking) means any user with a personal computer and a
browser can get connected to his bank -s website to perform any of the virtual banking
functions. In internet banking system the bank has a centralized database that is webenabled. All the services that the bank has permitted on the internet are displayed in
menu. Any service can be selected and further interaction is dictated by the nature of
service. The traditional branch model of bank is now giving place to an alternative
delivery channels with ATM network. Once the branch offices of bank are
interconnected through terrestrial or satellite links, there would be no physical identity
for any branch. It would a borderless entity permitting anytime, anywhere and anyhow
banking.
The network which connects the various locations and gives connectivity to the central
office within the organization is called intranet. These networks are limited to
organizations for which they are set up. SWIFT is a live example of intranet application.
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:
i) 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.
ii) Electronic Information Transfer System: The system provides customer- specific
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.
iii) 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.
Automated Teller Machine (ATM):
ATM is designed to perform the most important function of bank. It is operated by
plastic card with its special features. The plastic card is replacing cheque, personal
attendance of the customer, banking hours restrictions and paper based verification.
There are debit cards. ATMs used as spring board for Electronic Fund Transfer. ATM
itself can provide information about customers account and also receive instructions
from customers - ATM cardholders. An ATM is an Electronic Fund Transfer terminal
capable of handling cash deposits, transfer between accounts, balance enquiries, cash
withdrawals and pay bills. It may be on-line or 0ff-line. The on-line ATN enables the
customer to avail banking facilities from anywhere. In off-line the facilities are confined
to that particular ATM assigned. Any customer possessing ATM card issued by the
Shared Payment Network System can go to any ATM linked to Shared Payment
Networks and perform his transactions.
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, Nashik, Surat and Pune.
Investing through Internet banking
You can now open an FD online through funds transfer.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 you the facility to
purchase mutual funds directly from the online banking system.
Nowadays, most leading banks offer both online banking and demat account. However
if you have your demat account with independent share brokers, then you need to sign
a special form, which will link your two accounts.
Recharging your prepaid phone
Now just top-up your prepaid mobile cards by logging in to Internet banking. By just
selecting your operator's name, entering your mobile number and the amount for
recharge, your phone is again back in action within few minutes.
Shopping
With a range of all kind of products, you can shop online and the payment is also
made conveniently through your account. You can also buy railway and air tickets
through Internet banking.
Advantage of Internet banking
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."
Through Internet banking, you can check your transactions at any time of the day, and
as many times as you want to. Where in a traditional method, you get quarterly
statements from the bank. 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.
Security Precautions
Customers should never share personal information like PIN numbers, passwords etc
with anyone, including employees of the bank. It is important that documents that
contain confidential information are safeguarded. PIN or password mailers should not
be stored, the PIN and/or passwords should be changed immediately and memorised
before destroying the mailers.
Customers are advised not to provide sensitive account-related information over
unsecured e-mails or over the phone. Take simple precautions like changing the ATM
PIN and online login and transaction passwords on a regular basis. Also ensure that the
logged in session is properly signed out.
21-30
c 31-40
41-50
+51
Interpretation:-in this study 20-30 years persons more than to others.22% less than 20 years, 68%
20-30 year old persons, 16% 31-40 years , 11% is 41-50 year , 3% above 50
Q-2: sex:Male
b) Female
INTERPRETATION:Take 67 mens
And 33 womens in this study
(b) Rs 10001-20000
Rs 20001-30000
INTERPRETATION:-in this study we found out 28% less than 10000 salary persons,
34% in mid 10000-20000, 23% in mid 20000-30000, and 15% in above 30000.
Q-4: Qualification:
a) Graduates
Post Graduates
Ph.D.
Professional
INTERPRETATION:-
No
INTERPRETATION:In this study I found out lots of people aware about the E-BANKING and using the EBANKING services.
94% using E-BANKING services.
6% not using the E-BANKING services.
current
others
No
Tax Filling
none
Q-9: What benefits you derive from bank for using E-Banking
FACTORS
Rank-1
Rank-2
Rank-3
Rank-4
Rank-5
Discount
Reward point
Low process
Better customer care
Better security
Q-12: Which bank has better and easy homepage for internet banking service?
HDFC Banks
Axis Bank
SBI Bank
Bank of Baroda
Other, Specify.
INTERPRETATION:-
b) Female
No
Crosstabs
[DataSet1]
Missing
Percent
100
100.0%
Total
Percent
0
.0%
Percent
100
100.0%
Total
64
67
30
33
94
100
Total
Analysis:I found that after the result male uses E-BANKING more than females.
So hypothesis alternative is accepted and null hypothesis is rejected.
Out of 67 males 64 uses e-banking and 3 not uses e-banking.
Post Graduates
Ph.D.
Professional
No
Analysis:Crosstabs
Case Processing Summary
Cases
Valid
N
Q-4 * Q-5
Missing
Percent
100
100.0%
Total
Percent
0
.0%
Percent
100
100.0%
Total
58
60
28
31
94
100
Total
PH.D. person are 100% using e-banking, Graduates person out of 60, 58 uses e-banking services,
Post graduates 28 using e-banking services out of 31, out of 7 professionals 6 uses e-banking
services.
(b) Rs 10001-20000
Rs 20001-30000
Missing
Percent
100
Total
Percent
100.0%
Percent
.0%
100
Total
100.0%
10
13
28
13
34
23
15
19
24
16
41
100
Total
Analysis:-
This test is found that high level income person uses has a/c on a
monthly basis.
Which has Less than 10000 salary:Uses
regular
occasionally
Weekly
monthly
Less than
10000
1000020000
2000030000
Above
30000
10
13
13
No
Q-11: What benefits you derive from bank for using E-Banking
FACTORS
Discount
Reward point
Rank-1
Rank-2
Rank-3
Rank-4
Rank-5
Low process
Better customer care
Better security
Analysis:
Case Processing Summary
Cases
Valid
N
Missing
Percent
Total
Percent
Percent
Q-5 * Q-11(1)
94
94.0%
6.0%
100
100.0%
Q-5 * Q-11(2)
94
94.0%
6.0%
100
100.0%
Q-5 * Q-11(3)
94
94.0%
6.0%
100
100.0%
Q-5 * Q-11(4)
94
94.0%
6.0%
100
100.0%
Q-5 * Q-11(5)
94
94.0%
6.0%
100
100.0%
Total
Total
14
14
32
26
92
15
14
32
27
94
Total
10
19
32
30
92
11
19
33
30
94
Total
Total
44
21
11
12
92
44
21
12
13
94
Total
Total
Total
20
47
15
92
20
48
16
94
Total
Total
16
35
10
22
92
17
35
10
23
94
E banking users 1 gives priority to low process, 2 nd it gives to the better customer care,
4rd it gives to the better security, than discount and reward point.
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, business man and HNIs.
We can see the time is changing and we he 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.
Provide a platform from where the customers can access different accounts
at single time without extra charge.
SBI and ICICI bank are largest bank in india which provides a better e banking
services to the customer. But customer not affiliated with only sbi and icici bank. So its
a major issue for all the banks. Customer not 100% aware with the e-banking services
and products. People think e-banking is harmful for the society but its not true so bank
needs to advertise the security segment to the customer.
With increased developments, we are seeing the demand for the traditional service
delivery points and branch networks diminishing, while that of internet service based
takes on the central role. But that does not mean that the whole of the tradional system
will be diminished or will be wiped out completely, because there are several types of
works which can be more effectively dont by the tradional labor system rather than
ebanking
Appendix
Consumer perception towards e-banking
Name: ________________________________________
Address: ________________________________________
Phone no: -
________________________________________
21-30
c 31-40
41-50
+51
b) Female
(b) Rs 10001-20000
Rs 20001-30000
Q-4: Qualification:
b) Graduates
Post Graduates
Ph.D.
Professional
b) Yes
No
current
others
None
No
Strongly
Agree
Agree
Neutral
Disagree
Strongly
Disagree
Rank-4
Rank-5
Accessibility
Saves time
Easy to acquire information
Self-service
More facilities
Security/less risk to use
Greater control over finance
Q-10: What benefits you derive from bank for using E-Banking
FACTORS
Discount
Reward point
Low process
Better customer care
Better security
Rank-1
Rank-2
Rank-3
Q-11: The main reason that you typically visit your bank branch (please choose a single
most important reason)
To make a deposit & withdrawal
Q-12: Which bank has better and easy homepage for internet banking Service
HDFC Bank
Axis Bank
SBI Bank
Bank of Baroda
Other,Specify.
Have a clear and widely disseminated strategy that is driven from the top and takes into
account the effects of E-banking, together with an effective process for measuring
performance against it.
Take into account the effect that e-provision will have upon their business risk
exposures and manage these accordingly.
Undertake market research, adopt systems with adequate capacity and scalability,
undertake proportional advertising campaigns and ensure that they have adequate
staff coverage and a suitable business continuity plan.
Ensure that crisis management processes are able to cope with Internet related
incidents. One of the benefits that banks experience when using E-banking is increased
customer satisfaction. This due to that customers may access their accounts whenever,
from anywhere, and they get involved more, this creating relationships with banks.14
Banks should provide their customers with convenience, meaning offering service
through several distribution channels (ATM, Internet, physical branches) and have more
functions available online. Other benefits are expanded product offerings and extended
geographic reach. This means that banks can offer a wider range and newer services
online to even more customers than possible before. The benefit which is driving most
of the banks toward E-banking is the reduction of overall costs. With E-banking banks
can reduce their overall costs in two ways: cost of processing transactions is minimized
and the numbers of branches that are required to service an equivalent number of
customers are reduced. With all these benefits banks can obtain success on the
financial market. But E- banking is a difficult business and banks face a lot of
challenges.
Internet banking (or E-banking) means any user with a personal computer and a
browser can get connected to his bank -s website to perform any of the virtual banking
functions. In internet banking system the bank has a centralized database that is webenabled. All the services that the bank has permitted on the internet are displayed in
menu. Any service can be selected and further interaction is dictated by the nature of
service. The traditional branch model of bank is now giving place to an alternative
delivery channels with ATM network. Once the branch offices of bank are
to that particular ATM assigned. Any customer possessing ATM card issued by the
Shared Payment Network System can go to any ATM linked to Shared Payment
Networks and perform his transactions.
Credit Cards/Debit Cards:
The Credit Card holder is empowered to spend wherever and whenever he wants with
his Credit Card within the limits fixed by his bank. Credit Card is a post paid card. Debit
Card, on the other hand, is a prepaid card with some stored value. Every time a person
uses this card, the Internet Banking house gets money transferred to its account from
the bank of the buyer. The buyers account is debited with the exact amount of
purchases. An individual has to open an account with the issuing bank which gives debit
card with a Personal Identification Number (PIN). When he makes a purchase, he
enters his PIN on shops PIN pad. When the card is slurped through the electronic
terminal, it dials the acquiring bank system - either Master Card or VISA that validates
the PIN and finds out from the issuing bank whether to accept or decline the
transactions. The customer can never overspend because the system rejects any
transaction which exceeds the balance in his account. The bank never faces a default
because the amount spent is debited immediately from the customers account.
Smart Card:
Banks are adding chips to their current magnetic stripe cards to enhance security and
offer new service, called Smart Cards. Smart Cards allow thousands of times of
information storable on magnetic stripe cards. In addition, these cards are highly
secure, more reliable and perform multiple functions. They hold a large amount of
personal information, from medical and health history to personal banking and personal
preferences.
You can avail the following services through E-Banking.
Bill payment service
You can facilitate payment of electricity and telephone bills, mobile phone, credit card
and insurance premium bills as each bank has tie-ups with various utility companies,
service providers and insurance companies, across the country. To pay your bills, all
you need to do is complete a simple one-time registration for each biller. You can also
set up standing instructions online to pay your recurring bills, automatically. Generally,
the bank does not charge customers for online bill payment.
Fund transfer
You can transfer any amount from one account to another of the same or any another
bank. Customers can send money anywhere in India. Once you login to your account,
you need to mention the payees's account number, his bank and the branch. 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.
Credit card customers
With Internet banking, customers can not only pay their credit card bills online but also
get a loan on their cards. If you lose your credit card, you can report lost card online.
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, Nashik, Surat and Pune.
Investing through Internet banking
You can now open an FD online through funds transfer.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 you the facility to
purchase mutual funds directly from the online banking system.
Nowadays, most leading banks offer both online banking and demat account. However
if you have your demat account with independent share brokers, then you need to sign
a special form, which will link your two accounts.
Recharging your prepaid phone
Now just top-up your prepaid mobile cards by logging in to Internet banking. By just
selecting your operator's name, entering your mobile number and the amount for
recharge, your phone is again back in action within few minutes.
Shopping
With a range of all kind of products, you can shop online and the payment is also
made conveniently through your account. You can also buy railway and air tickets
through Internet banking.
Advantage of Internet banking
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."
Through Internet banking, you can check your transactions at any time of the day, and
as many times as you want to. Where in a traditional method, you get quarterly
statements from the bank. 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.
Security Precautions
Customers should never share personal information like PIN numbers, passwords etc
with anyone, including employees of the bank. It is important that documents that
contain confidential information are safeguarded. PIN or password mailers should not
be stored, the PIN and/or passwords should be changed immediately and memorised
before destroying the mailers.
Customers are advised not to provide sensitive account-related information over
unsecured e-mails or over the phone. Take simple precautions like changing the ATM
PIN and online login and transaction passwords on a regular basis. Also ensure that the
logged in session is properly signed out.
THANKS
Bibliography and
Webliography
Webliography:www.sbi.com
www.icici.com
www.bpointroduction.com