PROJECT REPORT

(Submitted for the Degree of B.Com. Honours in Accounting and Finance under the
University of Calcutta)

TITLE OF THE PROJECT

Customer Perception on On-line Banking

Submitted by

Name of the Candidate:

Registration No.:

C.U. Roll No.:

Name of the College:

Supervised by

Name of the Supervisor:

Name of the College:

Month Of Submission February, 2019

Supervisor’s Certificate

1
This is to certify that ………………. a student of B.Com Honours in Accounting & Finance of
………………………… under the University of Calcutta has worked under my supervision and
guidance for her Project Work and prepared a Project Report with the title Customer Perception
on “On-line Banking” .

The project report which she is submitting, is her genuine and original work to the best of my
knowledge.

Signature:

Place:

Date:

2
 Student’s Declaration

I hereby declare that the Project Work with the title Customer Perception on “ON-LINE

BANKING” submitted by me for the partial fulfillment of the degree of B.Com. Honours in

Accounting & Finance in under the University of Calcutta is my original work and has not been

submitted earlier to any other University/Institution for the fulfillment of the requirement for any
course of study.

I also declare that no chapter of this manuscript in whole or in part has been incorporated in

this report from any earlier work done by others or by me. However, extracts of any

literature which has been used for this report has been duly acknowledged providing details of
such literature in the references.

Signature:

Name:

Place:

Date:

Address:

Registration No.

3
 Acknowledgement

While conducting the Online Banking project, innumerable people have given me various
suggestions and opinions regarding this topic. I have tried to incorporate all those suggestions
which are really relevant in preparing my final report. I think it is essential to thank all those who
have contributed and helped me throughout the duration of the project.

I pay my immense gratitude to………………. Faculty of ……………………………… for his

continuous and deliberate discussion on the topic and indeterminable burden taken by him in
helping me throughout conducting the project. I would also like to thank my friends who
rendered their wholehearted co-operation in the successful completion of the project work.

Finally, I am thankful to all the people who willingly responded to the questionnaire and their
contribution has been invaluable. This project would not have been completed without their
participation. I am pleased to state that the whole report is just the presentation of the facts that
have been found during the project through different sources and its each sentence is an exact
representation of the information obtained and the analysis thereof. I hope that I have manifested
my sincere attempts to represent all the information and other things to the best of my ability.

4
 CONTENT
SERIAL NO TOPIC PAGE NO
Chapter-1 Introduction
1.1 Background of Online
banking
1.2Objectives of the study
1.3 Literature Review 6-9
1.4 Database and Methodology
1.5 Limitation of the study

Chapter-2 Conceptual Framework

2.1 Concept of Online banking
2.2 Features of online banking
2.3 Various Forms of Online
Banking
10-17
2.4 Advantages of Online
Banking
2.5 Disadvantage of Online
Banking
2.6 National Scenario
2.7 International Scenario
Chapter-3 Data Analysis and Findings
3.1 Data Analysis
18-32
3.2 Findings
Chapter-4 Conclusion and
Recommendation
4.1 Conclusion
33-36
4.2 Recommendation
5. Bibliography
37
6. Appendix
38-41

5
 CHAPTER-1

INTRODUCTION

1.1. Background

Banking system of a nation is the shadow of nation’s economy. A healthy and profitable banking
system is just like the backbone of nation’s economy. It is necessary for a nation to achieve
growth and remain stable in this global world and global economy. In the early 1990s , the
government embarked on a policy of liberalization, licensing a small number of private banks.
Some of the private sector banks are Axis Bank (earlier known as UTI Bank), ICICI Bank and
HDFC Bank. The Indian banking system, with one of the largest banking networks in the world,
has witnessed a series of reforms over the past few years like use of Online banking and the
increased participation of both public and private sector banks. Online banking is the term that
describes all transactions that take place among companies, organizations, and individuals and
their banking institutions. First conceptualized in the mid-1970s, some banks offered customers
electronic banking in 1985. However, the lack of internet users, and costs associated with using
online banking, stunted growth. The internet explosion in the late 1990s

made people more comfortable with making transactions over the web.

 Online banking allows customers of a financial institution to conduct financial

transactions on a secure website operated by the institution, which can be a retail or
virtual bank, credit union or building society.
 Online banking is the practice of making bank transactions or paying bills via the
internet. People no longer have to leave the house to shop, communicate, or even do their

6
 banking. Online banking allows a customer to make deposits, withdrawals, and pay bills
all with the click of a mouse.

1.2 Objectives of the study

The main objectives of the study are:

 To understand the concept of Online-Banking.

 To analyze the importance , functions, advantages and limitations of Online-Banking.
 To explain the different form of Online-Banking and to analyze the rules

& regulation regarding Online-Banking guided by RBI.

 To highlight on the security problems of Online-Banking and how to

reduce the security issues with the help of security control tools

 To analyze the present e-banking scenario concerned with ATM, Internet

banking, Mobile banking, credit-debit card, Fund transfer and other e-

banking services.

 To examine the impact of ATM, internet banking, Mobile banking and

credit-cards on customer satisfaction by analyzing the problems faced by

the customers.

1.4.Review of literature

 Rakesh H M & Ramya T J (2014):- In their research paper titled “A Study on Factors
Influencing Consumer Adoption of Internet Banking in India” tried to examine the
factors that influence internet banking adoption. Using PLS, a model is successfully

7
 proved and it is found out that Internet banking is influenced by its perceived reliability,
Perceived ease of use and Perceived usefulness.
 Amruth Raj Nippatlapalli (2013):- In his research paper “A Study on Customer
Satisfaction of Commercial Banks: Case Study on State Bank of India”. This paper
present Customer satisfaction, a term frequently used in marketing, is a measure of how
products and services supplied by a company meet or surpass customer expectation.

 Mr. Vijay Prakash Gupta & Dr. P. K. Agarwal (2013):- In their research paper
“Comparative Study of Customer Satisfaction in Public Sector and Private Sector
Banks in India”. This paper gives with the introduction of liberalization policy and
RBI's easy norms several private and foreign banks have entered in Indian banking sector
which has given birth to cut throat competition amongst banks for acquiring large
customer base and market share.

 Uppal & Chawla, (2009) study about “E-Delivery Channel-Based Banking

Services: An Empirical Study customer perceptions about online banking services :
“highlighted about the customer perceptions about e-banking services in India. The
research methodology included survey of 1200 respondents in Ludhiana and respondents
included public, private and foreign bank sector. The present study investigated the
customer perceptions regarding the necessity of e-banking services, bank frauds, future
of e- banking and the problems faced by e-banking customers. The study depicted that
customers of all bank groups are interested in e-banking services but at the same time
they face problems like inadequate knowledge, poor knowledge, lack of infrastructure
and difficulty they face in opening an account.”

8
1.5. DATABASE AND METHODOLOGY

 Data Collection:

Primary Source: The study is based on both of primary and secondary data. The study is based
on both of primary and secondary data. For the purpose of case study primary data have been
collected from the people of KOLKATA through phone

calls, social network and direct interview from them. The primary data is collected through

questionnaire prepared that is circulated within a sample of 50 respondents randomly selected.

Secondary Source: The secondary data have been collected from different articles & website
resources such as www.wikipedia.com, www.google.co.in and so many others. We have used
simple pictures, tables, & graphs to analysis & present the data. Apart from this I also followed
my supervisor's instructions to finish the project.

1.6. LIMITATION OF THE STUDY

The major limitations of the study are:

 I have not used modern statistical tools to analysis the data.

 Due to shortage of time I have not been able to make a depth study.

9
 CHAPTER 2

CONCEPTUAL FRAMEWORK

2.1 WHAT IS ONLINE BANKING?

Online banking refers to banking services where depositors can manage more aspects of their
accounts over the Internet, rather than visiting a branch or using the telephone. Online banking
typically is comprised of a secure connection to banking information through the depositor’s
home computer or another device.

2.2 FEATURES OF ONLINE BANKING.

The common features fall broadly into several categories: A bank customer can perform non-
transactional tasks through online banking, including-

 viewing account balance

 viewing recent transactions
 Downloading bank statements, for example in PDF format
 viewing images of paid cheque ordering cheque books
 Downloading applications for M-banking, E-banking etc.
 Bank customers can transact banking tasks through online banking, including -
 Funds transfers between the customer's linked accounts
 Investment purchase or sale
 Loan applications and transactions, such as repayments of enrolment’s
 Credit card applications
 Transaction approval process of banking has become much faster

Some financial institutions offer unique Internet banking services, for example: Personal
financial management support, such as importing data into personal accounting software. Some

10
online banking platforms support account aggregation to allow the customers to monitor all of
their accounts in one place whether they are with their main bank or with other institutions.

2.3 Various Forms Of On-line Banking

A. N.E.F.T

National electronic Funds Transfer (NEFT) is electronic funds transfer

system, which facilitates transfer of funds to other bank accounts. This is

a simple, secure, safe, faster, and cost effective way to transfer funds

especially for retail remittances.

B. R.T.G.S

Real Time Gross Settlement (RTGS) is an electronic form of funds

transfer where the transmission takes place on a real time basis.

In India, transfer of funds with RTGS is done for high value transactions,

the minimum amount being Rs 2 Lakh. The beneficiary account receives

the funds transferred, on a real time basis.

C. AUTOMATED TELLER MACHINES(ATM)

An automated teller machine is an electronic computerized

telecommunications device that allows a financial institution’s customers

to directly use a secure method of communication to access their bank

11
accounts, order or make cash withdrawals and check their account

balances without the need for a human bank teller. Many ATMs also

allow people to deposit cash or cheques, transfer money between their

bank accounts.

D. 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 to the
buyer. The buyer account is debited with the exact amount of purchases.

12
2.4 ADVANTAGES OF ONLINE BANKING

1. Pay your bills online: You can use online banking to pay your bills through bank or directly
through the website of your service provider. Set up automatic bill payments for bills that do not
change.

13
2. View your Transactions

Online banking allows you to access your account history and transactions from anywhere. This
is the quickest way to check and see if a transaction has cleared your account. You can keep
track of pending transactions.

3. Transfer Money Between Accounts

Online Banking also allows you to transfer money between accounts much more quickly. Make
transfers without leaving home. Check on availability of funds before you spend the money.

4. Mobile Banking

Most banks have a mobile bank that allows you to take advantage of online banking on your
phone.

5. Environment Friendly

Online banking is environmental friendly. Electronic transmission requires no paper and are
virtually pollution free.

2.5 DISADVANTAGE OF ONLINE BANKING

1. Transaction issues: Sometimes a face-to-face meeting is required to complete complex

transactions and address complicated problems. A traditional bank can host meetings and call in
experts to solve a specific issue. Moreover, international transactions may be more difficult (or
impossible) with some direct banks.

2. Service Issues: Some direct banks may not offer all the comprehensive financial services such
as insurance and brokerage accounts that traditional banks offer.

14
3. Security: Accounts may be subject to phishing, hacker attacks, malware and other
unauthorized activity.

4. Connectivity: Another issue is that sometimes it becomes difficult to note whether your
transaction was successful or not. It may be due to the loss of net connectivity in between, or due
to a slow connection, or the bank’s server is down.

2.6. National Scenario

Indian scenario in banking is not up to the mark in comparison to the developed

Economies. In 1966, ICICI Bank took the initiative towards starting e-banking

services in India. The time period of 1996 to 1998, can be defined as early

adoption phase for e-banking in India. But public sector banks were the late

adopters of the e-banking services. SBI owns the pride of being pioneer among

public sector banks to start providing e-banking services to its customers.

Although, it experienced tremendous increase in usage of e-banking in 1999,

due to lower ISP internet fee & charges, increased PC penetration and tech-

savvy environment.

Online Banking has become an integral part of banking system in India. The

concept of online banking is of fairly recent origin in India. Till the earl 90’s

traditional model of banking i.e. branch based banking was prevalent, but after

that non-branch banking services were started. The Indian government enacted

the IT Act, 2000 with effect from the 17th October 2000. To examine different

15
aspects of Internet Banking RBI set up a committee on Internet Banking. The

committee had focused on three major areas of Internet banking, Technology

and security issues, legal issues and regulatory and supervisory issues. RBI had

accepted the suggestions and recommendations of the Working committee and

accordingly issued guidelines to banks to implement Internet banking in India.

E-banking is viewed as expansion of conventional banking services

Internet banking, both as a medium of delivery of banking services and as a

strategic tool for business development, has gained wide acceptance

internationally and is fast catching up in India with more and more banks

entering the fray.

2.7. Internal Scenario

The misuse of Internet amounts to cyber-crime, and India too has been

witnessing a sharp increase in cyber-crimes in the recent years. The Cyber Law

of India provided in the Information Technology Act, 2000. Reserve Bank of

India had set up a ‘Working Group on Internet Banking’ to examine different

aspects of Internet Banking. The Group had focused on three major areas of e-

banking, i.e., (i) technology and security issues, (ii) legal issues and (iii)

regulatory and supervisory issues. RBI has accepted the recommendations of

the Group to be implemented in a phased manner.

16
A major problem for banks and Internet banking users, Phishing is an art of

tricking someone into giving confidential information and fraudulently

acquiring their sensitive information like passwords and credit card details. The

IT Act 2000, however, does not specifically define phishing as an offence and

thus the law enforcement authorities have to take recourse to the generic

provisions of cheating and criminal breach of trust under the Indian Penal Code.

Due to the lack of adequate legal provisions for dealing with growing cyber

crimes, banks are working towards intimating net users about e-security. SMS

alerts are used to inform customers promptly about their online transactions.

Banks have also put in place security measures, as outlined by the Reserve Bank

of India in its guidelines for Internet banking. The guidelines talk about the risks

associated with Internet banking, technology and security standards, legal issues

involved, and regulatory and supervisory concerns.

17
 CHAPTER-3

DATA ANALYSIS AND FINDINGS

The study deals with results which came from the analysis of the

primary and secondary data.

3.1.1.Age Basis

DATA ANALYSIS ON THE BASIS OF AGE GROUP

ABOVE 50
11
BELOW 20
12

20-35
35-50 8
19

Interpretation

Out of 50 respondents 12 respondents are below20 age group,8 respondents in 20-35 age
group.19 respondents in 35-50 age group and 11 respondents in above 50 age group. This is
shown with the help of a Pie-Chart.

18
3.2. Time Using The Internet Facilities

5 to 10 years
2
more than 10 years
0
3 to 5 years
11

less than 3 years

37

Interpretation

In this graph out of 50 customers 37 are using internet from less than 3 years and

2 customers are using from 5-10 years and rest of the respondent using internet between the

periods of 3-5 year.

19
3.3. Objective For Using The Internet ?

50
45
40
35
30
25
20
15
10
5
0
Shopping Entertainment Research Banking Other

Interpretation

Under the purpose of using internet 21 using for shopping motive and 15

using for entertainment and 3 for research and 9 for banking and 2

other.

20
3.4. Are you Aware About The E-Banking?

No
Yes 0
50

Interpretation

The following graph represents that the majority of respondents are not aware

about e-banking on the other hand 50 respondents know about e-

banking.

21
3.5. Does E-Banking Services Save The Time?

No
0

Yes
50

Interpretation

50 respondent said E-Banking services save the time of the person.

22
3.6.How Much Is The Satisfaction Level Of The Respondent From E-Banking Service?

Average Not Satisfied

4 3

Satisfied
43

Interpretation

This study shows that most of the respondent satisfy with the services of E-

banking provided by the banks and 4 respondent said they were average

satisfy from the E-Banking services, 3 respondent is not satisfy with the E-Banking

services.

23
3.7.Do you avail of banking facilities online?

42

YES No

Interpretation

Most of the respondents prefer online banking services, which is about 42. It thus indicates that
there is a larger section of the people connected to internet banking today.

24
3.8.How frequently do you use online banking services?

20 17
14
15
8
10 6 5
5 0
0
DAILY WEEKLY MONTHYLY OCCASIONALLY YEARLY NEVER

Interpretation

Most of the people do not need the services of bank regularly. They make transactions with bank
on weekly, monthly, occasionally or yearly basis.

25
3.9.Are you aware of the security threads and frauds in online banking and familiar with
the methods of secured online transaction?

40

38
35

30

25

20

15

10 12

0
YES NO

Interpretation

It can be seen that most of the online users are aware of the online frauds and securities but even
with the increasing knowledge of internet banking some respondents are unaware of the methods
taken up by the banks to secure each and every transaction.

26
3.10.How much do you spend for a single online transaction?

30

25
24

20

15

10
9
8

5 5
4

0
0-2000 2000-5000 5000-10000 10000-20000 AB O V E 2 0 0 0 0

Interpretation

Most of the online users have a tendency to spend 2000 and below in a single transaction.

27
3.11.Does your bank educate you about the online banking services being offered?

YES NO

NO, 22

YES, 28

Interpretation

Among 50 respondents 28 people said their banks provide them information with online services
offered, while 22 people rejected any sort of participation from their banks.

28
3.12.Does your bank upgrade online services regularly?

CAN'T SAY
12

YES
24

NO
14

Interpretation

This is very interesting to see that most of the online banking users think that their banks upgrade
their services regularly. But some people did not think so and few did not come to a conclusion.

29
3.13.Do you think online banking is better substitute of traditional banking system?

32

10

YES NO CAN'T SAY

Interpretation

It is seen that most of the respondents preferred using online banking over traditional banking
system. Thus it can be concluded that online banking has a bright future ahead.

30
3.14.which online operation should be modified promptly for better services in future?

12
11
10
10

6 6
6
5
4
4
3
2 2
2
1

0
ATM ACCOUNTS FUNDS BILL E-TAX E-DEPOSIT DEMAT LOANS INTERNET CUSTOMER
SERVICE SERVICE TRANSFER PAYMENT PAYMENT SERVICE AND SECURITY FEEDBACK
CREDIT SERVICE SERVICE
SERVICE

Interpretation

This chart shows that “INTERNET SECURITY SERVICE” AND “CUSTOMER FEEDBACK
SERTVICES” should be modified in future.

31
3.15.Rating of online banking services.

EXCELLENT VERY GOOD GOOD AVERAGE POOR

EXCELLENT, 4
POOR, 8

VERY GOOD, 9

AVERAGE, 11

GOOD, 18

Interpretation

The satisfaction level of online users of their respective banks has a mixed review. This may be
due to multiple reasons. Moreover 18 respondents chose “GOOD” option.

32
 FINDINGS

 More banks are connecting to many software company

for running the online banking service. In these services

the SBI bank tops in providing service of E-banking.

 The services that are mostly used by maximum customers

are transactions, online trading, bill payment, shopping etc.

33
 CHAPTER-4

4.1. Conclusion

In a country like India, there is need for providing better and customized services to the
customers. Banks must be concerned about the attitudes of customers with regard to acceptance
of internet banking. The importance of security and privacy for acceptance of internet banking
has been noted in many earlier studies and it was found that people claim that they have
knowledge about security issues but they have no clear idea about all kinds of frauds. The
present study shows that customers are more reluctant to accept new technologies or methods
that might contain little risk. Hence, banks should design the website to address security and trust
issues. The basic objective of my research was to analyze the awareness among customers for
internet banking in India. It gives direction to research tools, research types and techniques.
Banks should look forward to have some tie-ups with other financial institutions to increase the
service base. The study reveals that ATM BANKING, BILL PAYMENT, ONLINE SHOPPING
and ONLINE RECHARGE etc. are performed by many respondents but it also reflects that
NEFT, RIGS or DMAT services are not performed by the people in majority.

4.2. Recommendations

We can see the time is changing and we are now accepting technology but there is still a lot
of perceptual blocking which hampers the growth its normal tendency of technology that’s
why the growth of internet banking is very primitive in nature.

 Recommendations to banks:

34
▪ Banks should obey the RBI norms and provide facilities as per the norms. But these are
not completely followed by the banks. Some of our respondents complained that their
bank does not give feedback of online transaction in proper times. If customers do not
get proper feedback then their interest in online services will be reduced, so bank should
take proper steps to build their feedback services.

▪ Internet banking facilities must be made available in all banks as well as in all branches

▪ Banks should develop their services not only in town areas but also in village areas
Banks should install more and more ATMs in both urban and rural areas.

▪ Banks should give proper training to customers to use net banking.

▪ Banks should always update their security systems and create a trust in the mind of
customers towards security of their accounts.

▪ Banks should make their sites more user friendly. Customers should be motivated to use
internet banking facilities more.

▪ Banks are now using two factor authentication, e- password and OTP but they should
improve that and start using three factor authentication because hackers sometimes break
the two factor authentication system.

 Recommendations to users:

 Users must use anti-virus and maintain the integrity of their computer by scanning
regularly for viruses.

35
 Do not respond to emails requesting account information, account verification or banking
access credentials such as user names, passwords, PIN codes and similar information.

 Do not use email to send sensitive information.

 Avoid using automatic login features that save one’s personal details.

 Create a strong password but that will be easy to remember without writing it down
anywhere.

 Frequently change or password combination for better protection.

36
 4.3.BIBLIOGRAPHY

WEBSITES:

 www.google.co.in
 www.wikipedia.com
 www.slideshare.net
 www.investopedia.com
 www.simpli.com

BOOKS:

 An introduction to e-commerce: written by Romit Kumar Roy and Debasri Dey.

 Indian Banking System: written by Renu Jatana.
 Banking Law and Practice: written by Kandasami K.P.
 Indian Banking: written by S Natarajan
 Banking System in India: written by Md. Shabbir Alam

37
Appendix

QUESTIONNAIRE

Dear Respondent,

I am a student of The Bhawanipur Education Society College, Department of commerce, and

presently doing a project on "Customer Perception on Online Banking in India”. I request you
to kindly fill the questions stated below and I assure you that the data provided by you will be
kept confidential.

KRISHNA PUROHIT

B.COM HONOURS-3rd YEAR

THE BHAWANIPUR EDUCATION SOCIETY COLLEGE

A.PERSONAL DETAILS:

i. Name ………………………………………. ii. Gender- Male Female

iii. Age Group: Below 20 20-35 35-50 Above 50

iv. Occupation …………………………… v. Monthly Income……………………….

38
QUESTION 1: IN WHICH BANK DO YOU HAVE YOUR ACCOUNT?

SBI BOI UBI HDFC ICICI

UFO PNB AXIS Others

QUESTION 2: DO YOU AVAIL OF ALL BANKING FACILITIES ONLINE?

Yes No

QUESTION 3: HOW LONG HAS BEEN THE BANK PROVIDE INTERNET

FACILITIES?

Less than 3 year more than 3-5 year less than 10 year Other

QUESTION 4: WHAT IS YOUR OBJECT OF USING ONLINE FACILITIES?

Shopping Entertainment Research Banking

Other

QUESTION 5: ARE YOU AWARE ABOUT E-BANKING SERVICES?

Yes No

QUESTION 6: HOW FREQUENTLY DO YOU USE ONLINE BANKING SERVICES?

Daily Weekly Monthly Occasionally

39
Yearly Never
QUESTION 7: ARE YOU AWARE OF THE SECURITY THREADS AND FRAUDS IN
ONLINE BANKING AND FAMILIAR WITH THE METHODS OF SECURED
ONLINE TRANSACTION?
Yes No

QUESTION 8: HOW MUCH DO YOU SPEND FOR A SINGLE ONLINE

TRANSACTION?

0-2000 2000-5000 5000-10000 10000-20000

Above 20000

QUESTION 9: DOES YOUR BANK EDUCATE YOU ABOUT THE ONLINE BANKING
SERVICES BEING OFFERED?

Yes No

QUESTION 10: DOES YOUR BANK UPGRADE ONLINE SERVICES REGULARLY?

Yes No Can’t Say

QUESTION 11: WHICH ONLINE OPERATION SHOULD BE MODIFIED

PROMPTLY FOR BETTER SERVICES IN FUTURE?

ATM service Accounts Service Fund Transfer

Bill-Payment E-Tax payment E-Deposit De mat

service

Loans and Credit service Internet security service

40
QUESTION 12: DO YOU THINK ONLINE BANKING IS BETTER SUBSTITUTE OF
TRADITIONAL BANKING SYSTEM?

Yes No Can’t say

QUESTION 13: WHAT IS YOUR OBJECT OF USING ONLINE FACILITIES?

Shopping Entertainment Research Banking

Other

QUESTION 14: DOES E-BANKING SAVES TIME?

Yes No

QUESTION 15: RATING OF ONLINE BANKING SERVICES.

Excellent Very Good Good Average

Poor

41