Project report On A STUDY ON CUSTOMERS PERCEPTION TOWARDS E-BANKING IN INDIA

SUBMITTED IN THE PARTIAL FULFILMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION (BANKING & INSURANCE) 2010-2013

UNDER THE GUIDANCE OF: Dr. URVASHI SHARMA ASSOCIATE PROFESSOR (MAIMS)

SUBMITTED BY: NITIN HOODA BBA (B&I) VI SEM En.No-03414701810

MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES

(Affiliated to Guru Gobind Singh Indraprastha University) Maharaja Agrasen Chowk,Sector 22, Rohini Delhi 110041.

DECLARATION
I hereby declare that the project on A Study on Customers Perception Towards E-Banking in India submitted to Maharaja Agrasen Institute Of Management Studies under the guidance of Dr. URVASHI SHARMA towards the partial fulfillment for the award of the degree of Bachelor of Business Administration is my original work and is not copied or meant for any other degree/ diploma courses. I hereby declare that all the information provided in the project is valid and is based on immense research work done. All the data provided is factual and based on the information provided as per the website and the brochures of the organization. NITIN HOODA BBA (B&I) VI SEM En.No 03414701810

CERTIFICATE
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This is to certify that the project titled A Study on Customers Perception Towards E-BANKING IN INDIA is an academic work done by NITIN HOODA submitted in the Partial fulfillment of the requirement for the award of the degree of Bachelor of Business Administration from Maharaja Agrasen Institute of Management Studies, Delhi, under my guidance & direction.To the best of my knowledge and belief the data & information presented by him in the project has not been submitted earlier.

Dr. URVASHI SHARMA

Associate Professor(MAIMS)

ACKNOWLEDGEMENT
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I take due pleasure to thank all those who have helped & supported me for the completion of this project. At the outset I express my profound and sincere gratitude to Maharaja Agrasen Institute Of management Studies , New Delhi for providing me with the opportunity to explore the corridors of the corporate world and gather invaluable information and practical experience in the field of Finance and banking. I express my indebtness and deepest gratitude to Dr. URVASHI SHARMA (project guide), who took great pains in going through each step of my project and made valuable comments and suggestions, which has helped me to prepare this project on time. My thanks to the entire unit of Kotak Mahindra including the bank and the life insurance, for their valuable guidance and the help given directly or indirectly due to which I have been able to make optimum utilization of my learning and knowledge into practice successfully. I express my sincere gratitude to my parents for their invaluable support and continuous encouragement for the successful completion of my project. Last but not the least, I would like to thank GOD without whose grace; I wouldnt have been able to complete this project. A project of this nature calls for intellectual nourishment, professional help & encouragement from various quarters. This report has naturally gained a number of ideas and theory from the books of this subject. I express our thanks to all these authors, too numerous to acknowledge.

NITIN HOODA

Executive summary
The project Report on:
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Customers Perception Toward E-Banking in India. Project carried at: SBI, SBH, ICICI, ETC.

We have tried to put our best effort to complete this task on the basis of skill that we have achieved during our studies in the institute. We have tried to put our maximum effort to get the accurate statistical data. However we would appreciate if any mistakes are brought to us by the reader. Chapter 1. Includes the Introduction of the topic and briefly deals with the company and industry profile. Chapter 2. Consists of the observations pf the study Chapter 3. Deals with Research Methodology which mentions the sources and methods of data collection. Chapter 4. Deals with the literature review of the topic i.e. E-Banking Chapter 5. States the objectives of the study. Chapter 6. States the limitations of the study. Chapter 7. Reflects the Data Analysis Chapter 8. Recommendations and Findings Chapter 9. Represents the Conclusion for the organization

Table of Contents
Chapter 1: Introduction...7
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E-Banking.8 Meaning of E-Banking........8 Chapter 2: Observation of study..9 E-Banking Support Services.10 Wireless E-Banking11 Plastic Cards...13 Chapter 3: Research Methodology15 Research design.16 Collection of data Primary and Secondary Data Collection Chapter 4: Literature Review .17 ICICI18 HDFC..20 Chapter 5: Objective of study..22 Chapter 6: Limitation of study24 Chapter 7: Data analysis...28 Chapter 8: Findings and suggestions...36 Chapter 9: Conclusions.....38 Bibliography Questionnaire

Chapter 1 Introduction

E-banking: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
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functions. In internet banking system the bank has a centralized database that is web-enabled. 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. 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 delivery channels include direct dialup connections, private networks, public networks, etc. with the popularity of computers, 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.

Meaning of E-Banking
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 channel by which to conduct banking activity, for example, transferring funds, paying bills, viewing checking and savings account balances, paying mortgages and purchasing financial instruments and certificates of deposits (Haque et al, 2009). 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 the 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. There are many advantages of online Banking. It is convenient, it isnt bound by operational timings, there are no geographical barriers and the services can be offered at a minuscule cost (IAMAIs, 2006). Electronic banking has experienced explosive growth and has transformed traditional practices in banking (Gonzalez et al., 2008). 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
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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 efficient. An efficient back ground operation can be conducted only when it is integrated by 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 convenience and comfort while transacting with the bank. Internet enabled electronic system facilitate the operation to fetch these result. An 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. I-banks enable transfer of information more swiftly on- line. (Salawu et.al, 2007). 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), E banking 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 (Hiltunen et al., 2002 .); as it is observed as a larger concept than user satisfaction. From this perspective, assessing the user experience is essential for many technology products and services (Wilson & Sasse, 2004) 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 features and services using internet applications.
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HISTORY OF INTERNET BANKING The term online banking was first started in 80s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. Home banking can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the citys major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotext system. Because of the commercial failure of videotext these banking services never became popular except in France where the use of videotext was subsidized by the telecom provider and the UK, where the Prestel system was used. The UKs first home online banking services was set up by the Nottingham Building Society (NBS) in 1983 .The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as 'Home link') allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Home link system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an 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 Oct, 1994. Later on it was adopted by worldwide banks

SERVICES PROVIDED BY INTERNET BANKING

RETAIL BANKING: The Retail banking application is an integration of several functional areas, and enables customers to: Issue Demand Drafts online

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 Transfer funds to own and third party accounts Credit beneficiary accounts using the VISA Money Transfer, RTGS/NEFT feature Generate account statements Setup Standing Instructions Configure profile settings Use e-Tax for online tax payment Use e-Pay for automatic bill payments Interface with merchants for railway and airline reservations Avail DEMAT and IPO services CORPORATE BANKING: The Online SBI corporate banking application provides features to administer and manage corporate accounts online. The corporate module provides roles such as Regulator, Admin, Up loader, Transaction Maker, Authorizer, and Auditor. These roles have access to the following functions: Manage users, define rights and transaction rules on corporate accounts Access accounts in several branches with a single sign-on mechanism Upload files to make bulk transactions to third parties, supplier, vendor and tax collection authorities. Use online transactional features such as fund transfer to own accounts, third party payments, and draft issues Make bill payments over the Internet. Authorize, modify, reschedule and cancel transactions, based on rights assigned to the user Generate account statement Enquire on transaction details or current balance
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 VALUE ADDED SERVICES Tax payments to central and state governments through site to site integration. Supply Chain Finance( e-VFS- Electronic Vendor Finance Scheme) Direct Debit Facility E Collection Facilities for: Core Banking Transactions Internet Bank transactions for incoming RTGS/NEFT Transactions Internet banking transactions for SBI and associate banks Debit facility where suppliers can directly debit their customers account through internet banking PRODUCTS & SERVICES E-Ticketing SBI E-Tax Bill Payment RTGS/NEFT E-Payment Fund Transfer Third Party Transfer Demand Draft Cheque Book Request Account Opening Request
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 Account Statement Transaction Enquiry Demat Account Statement Donation E-TICKETING: You can book your railway, air and bus tickets online through Online SBI. To book your train ticket, just log on to irctc.co.in and create an ID there at if you do not have one. Submit your travel plan and book the ticket(s)-either i-ticket (where the delivery of tickets will be made at your address) or E-tickets (wherein after successful payment transactions, an e-ticket is generated which can be printed any time. For an e-ticket, the details of photo identity card will required to be filled in) and select State Bank of India in the payment options. You will be redirected to Internet Banking site of SBI (www.onlinesbi.com). After submitting the respective ID and password, you can select your account. After a successful debit, Railways will generate the ticket. E-ticket can be printed by you whereas the i-ticket will be dispatched by IRCTC at the given address. Service charges @ Rs.10/- per transaction shall be levied in addition to the cost of the ticket. Cancellation of Eticket can be done by logging on to IRCTC's site; refund amount will be credited to your account directly within 2-3 days. For cancellation of i-ticket, you shall be required to submit your ticket at a computerized counter of Railways and on cancellation; the amount shall be credited back to your account. You can also book your Air ticket through the e-ticketing feature. Logon to Indian Airlines website to make a payment for an e-ticket through State Bank of India, you need to select SBI as the payment option. The payment request will be redirected to Internet Banking site. The request may be processed based on values sent from the airlines website. Once a transaction is processed, an appropriate response will be sent to airlines site to update the status of the transaction. You can print the E-ticket immediately.

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To book bus tickets to destinations in Karnataka, log on to the KSRTC website. Provide details about the start and end points of your journey, date of journey and number of tickets. Verify availability of seats on the selected date and confirm the transaction. Select Online SBI to make the payment. Provide your credentials and select the SBI account that will be debited for the payment. You are provided a KSRTC reference number for your e-Ticket. BILL PAYMENT A simple and convenient service for viewing and paying your bills online. No more late payments No more queues No more hassles of depositing cheques Using the bill payment you can view and pay various bills online, directly from your SBI account. You can pay telephone, electricity, insurance, credit cards and other bills from the comfort of your house or office, 24 hours a day, 365 days a year. Simply logon to http://www.onlinesbi.com/ with your credentials and register the biller to which you want to pay, with all the bill details. Once the bill is uploaded by the biller, you can make payment online. You can see 'how do i' to learn the steps for using the facility. You can also set up Auto Pay instructions with an upper limit to ensure that your bills are paid automatically whenever they are due. The upper limit ensures that only bills within the specified limit are paid automatically, thereby providing you complete control over these payments. The ePAY service is available in various cities across the country and you can now make payments to several billers in your region. RTGS/NEFT You can transfer money from your State Bank account to accounts in other banks using the RTGS/NEFT service. The RTGS system facilitates transfer of funds from accounts in one bank to another on a "real time" and on "gross settlement" basis. This system is the fastest possible interbank money transfer facility available through secure banking channels in India. RTGS transaction requests will be sent to RBI immediately during working hours post working hours

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requests are registered and sent to RBI on next working day. You can also schedule a transaction for a future date. You can transfer an amount of Rs.1 lac and above using RTGS system. National Electronic Funds Transfer (NEFT) facilitates transfer of funds to the credit account with the other participating bank. RBI acts as the service provider and transfers the credit to the other bank's account. NEFT transactions are settled in batches based on the following timings 1. 6 settlements on weekdays - at 09:00, 11:00, 12:00, 13:00, 15:00 and 17:00 hrs. 2. 3 settlements on Saturdays - at 09:00, 11:00 and 12:00 hrs. Please note that all the above timings are based on Indian Standard Time (IST) only. In order to transfer the funds to an account with other bank, kindly ensure that the bank branch of the beneficiary is covered under the RGTS/NEFT payment system. It is recommended that you choose the Bank/ Branch from the drop down option provided under the link "Add Interbank beneficiary" and exercise care to provide the correct account number and name of the beneficiary. E-PAYMENT You can pay your insurance premium, mobile phone bills and also you can purchase mutual fund units by coming from the billers website and selecting state bank of India in the payment option. LIC PREMIUM: For paying premium of LIC policy logon to www.licindia.com and register your policy details. When the premium is due select State Bank of India in the make payment option. SBI Mutual FUND: You can invest in the SBI Mutual Fund schemes online. Logon to www.sbimf.com and select the scheme in which you want to make investment in the payment option select State Bank of India. CC Avenue: Enjoy shopping at the CC Avenue Shopping Mall and purchase from a wide variety of products and services through CC Avenue Certified Vendors. Make payments for your purchases using your Internet enabled SBI accounts. FUND TRANSFER
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The Funds Transfer facility enables you to transfer funds within your accounts in the same branch or other branches. You can transfer aggregating Rs.1 lakh per day to own accounts in the same branch and other branches. To make a funds transfer, you should be an active Internet Banking user with transaction rights. Funds transfer to PPF account is restricted to the same branch. Just log on to retail section of the Internet Banking site with your credentials and select the Funds Transfer link under Payments/Transfers tab. You can see all your online debit and credit accounts. Select the debit account from which you wish to transfer funds and the credit account into which the amount is to be credited. Enter the amount and remarks. The remarks will be displayed in your accounts statement for this transaction. You will be displayed the last five funds transfer operations on your accounts. On confirming the transaction, you will be displayed a confirmation page with the details of the transaction and the option to submit or cancel the funds transfer request. A reference number will be generated for your record. THIRD PARTY TRANSFER You can transfer funds to your trusted third parties by adding them as third party accounts. The beneficiary account should be any branch SBI. Transfer is instant. You can do any number of Transactions in a day for amount aggregating Rs.1lakh. To transfer funds to third party having account in SBI, you need to add and approve a third party, you need to register your mobile number in personal details link under profile section. You will receive a One Time SMS password on your mobile phone to approve a third party. If you do not have a mobile number, third party approval will be handled by your branch. Only after approval of third party, you will be able to transfer funds to the third party. You can set limits for third party transactions made from your accounts or even set limits for individual third parties. DEMAND DRAFT The Internet Banking application enables you to register demand drafts requests online. You can get a demand draft from any of your Accounts (Savings Bank, Current Account, Cash Credit or Overdraft). You can set limits for demand drafts issued from your accounts or use the bank specified limit for demand drafts.
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You can opt to collect the draft in person at your branch, quoting a reference to the transaction. A printed advice can also be obtained from the site for your record. Alternatively, you may request the branch to courier it to your registered address, and the courier charges will be recovered from you. CHEQUE BOOK REQUEST You can request for a cheque book online. Cheque book can be requested for any of your Savings, Current, Cash Credit, and Over Draft accounts. You can opt for cheque books with 25, 50 or 100 cheque leaves. You can either collect it from branch or request your branch to send it by post or courier. You can opt to get the cheque book delivered at your registered address or you can provide an alternate address. Cheque books will be dispatched within 3 working days from the date of request. Just log on to retail section of the Internet Banking site with your credentials and select the Cheque Book link under Requests tab. You can view all your transaction accounts. Select the account for which you require a cheque book; enter the number of cheque leaves required and the mode of delivery. Then, submit the same.

ACCOUNT OPENING REQUEST It enables you to open a new account online. You can apply for a new account only in branches where you already have accounts. You should have an INB-enabled account with transaction right in the branch. Funds in an existing account are used to open the new account. You can open Savings, Current, Term Deposit and Recurring Deposit accounts of Residents, NRO and NRE types. Just log on to retail section of the Internet Banking site with your credentials and select the New Account link under Requests tab. You can see all types of accounts. Select the account and account type you wish to open and submit the same. Then, you need to select the branch and enter the initial amount to open the account. You can select any of your accounts for debiting the
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initial amount. Then, submit the transaction. Your new account opening request will be processed by the branch. ACCOUNT STATEMENT The Internet Banking application can generate an online, downloadable account statement for any of your accounts for any date range and for any account mapped to your username. The statement includes the transaction details, opening, closing and accumulated balance in the account. You can generate the online account statement for any date range or for any month and year. The account statement can be viewed online, printed or downloaded as an Excel or PDF file. You also have the option to select the number of records displayed in each page of the statement. The options are 25, 50, 75, 100 and ALL. TRANSACTION ENQUIRY It provides features to enquire status of online transactions. You can view and verify transaction details and the current status of transactions. Your VISA transactions can also be viewed separately. Just log on to retail section of the Internet Banking site with your credentials and select the Status Enquiry link under the Enquiries tab. You will be displayed all online transactions you have performed. To view details of individual transactions, you need to click the Transaction Reference number link. You are displayed the debit and credit account details, transaction amount, narration and transaction status. DEMAT ACCOUNT STATEMENT This enables you to view Demat account statement and maintain such accounts. The bank acts as your depository participant. In the third party site, you can mark a lien on your Demat accounts and use the funds to trade on stock using funds in your SBI savings account. You can view Demat account details, and generate the following statements: statement of holding, statement of transactions, statement of billing. DONATION

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You can make donation to religious and charitable institution by using Internet Banking of SBI. After selecting the debit account select the religious/charitable institution that you want to offer donation. After successful payment you can print an E-receipt for the donation made.

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Chapter 2 Observation of study

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DEFINITION OF E-BANKING
For this booklet, e-banking is defined as the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive communication channels. E-banking includes the systems that enable financial institution customers, individuals or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the Internet. Customers access ebanking services using an intelligent electronic device, such as a personal computer (PC), personal digital assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone. While the risks and controls are similar for the various e-banking access channels, this booklet focuses specifically on Internet-based services due to the Internets widely accessible public network. Accordingly, this booklet begins with a discussion of the two primary types of Internet websites: informational and transactional.

E-BANKING SUPPORT SERVICES

WEBLINKING
A large number of financial institutions maintains sites on the World Wide Web. Some websites are strictly informational, while others also offer customers the ability to perform financial transactions, such as paying bills or transferring funds between accounts.

WIRELESS E-BANKING
Wireless banking is a delivery channel that can extend the reach and enhance the convenience of Internet banking products and services. Wireless banking occurs when customers access a financial institution's network(s) using cellular phones, pagers, and personal digital assistants (or similar devices) through telecommunication companies wireless networks. Wireless banking services in the United States typically supplement a financial institution's e-banking products and services.

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PERSON TO PERSON PAYMENTS

Electronic person-to-person payments, also known as e-mail money, permit consumers to send money to any person or business with an e-mail address. Under this scenario, a consumer electronically instructs the person-to-person payment service to transfer funds to another individual. The payment service then sends an e-mail notifying the individual that the funds are available and informs him or her of the methods available to access the funds including requesting a check, transferring the funds to an account at an insured financial institution, or retransmitting the funds to someone else. Person-to-person payments are typically funded by credit card charges transfer from the consumers account at a financial institution. Since neither the payee nor the payer in the transaction has to have an account with the payment service, such services may be offered by an insured financial institution, but are frequently offered by other businesses as well. Banking Services through Internet: 1. The Basic Level Service is the banks web sites which disseminate information on different products and services offered to customers and members of public in general. It may receive and reply to customers queries through e-mail; 2. In the next level are Simple Transactional Web sites which allows customers to submit their instructions, applications for different services, queries in their account balances, etc. but do not permit any fund-based transactions on their accounts
3. The third level of Internet banking service are offered by Fully Transactional Web sites

which allow the customers to operate on their accounts for transfer of funds, payment of different bills, subscribing to other products of the bank and to transact purchase and sale of securities, etc. The above forms of Internet banking service the customer or by new banks, who deliver banking service primarily through Internet or other electronic delivery channels as the value added services. Some of these banks are known as Virtual banks or Internet only banks and may not have physical presence in a country despite offering different banking services.

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The Indian Scenario: Internet banking, both as a medium of delivery of banking services and as a strategic tool for business development. At present, the total internet users in the country are estimated at 9 lakh. However, this is expected to grow exponentially to 90 lakh by 2003. Only about 1 percent of Internet users did banking online in 1998. This is increased to 16.7 percent in March 2000. - (India Research, May 29, 2000, Kotak Securities) Cost of banking service through the Internet from a fraction of costs through conventional methods. Rough estimates assume teller cost at Re.1 per transaction, ATM transaction cost at 45 paise, phone banking at 35 paise, debit cards at 20 paise and Internet banking at 10 paise per transaction.

Plastic Cards as Media for Payment: There are four types of plastic cards being used as media for making payments. These are: 1. Credit Card 2. Debit Card 3. Smart Card 4. ATM Card

1. Credit Cards: The credit card enables the cardholders to: Purchase any item like clothes, jewellery, railway/air tickets, etc. Pay bills for dining in a restaurant or boarding and lodging in hotel Avail of any service like car rental, etc. 2. Debit Cards: 23

A debit card is issued on payment of a specified amount by the issuing company like a telephone company to a customer on cash payment or on debiting his account by a bank. Thus it is like an electronic purse, which can be read and debited by the required amount. It may be noted that while through a credit card, the customer first makes a purchase or avails service and pays later on, but for getting the debit card, a customer has to first pay the due amount and then make a purchase or avail the service. For this reason, debit card are not as popular as credit cards. 3. Smart Cards: Smart Cards have a built-in microcomputer chip, which can be used for storing and processing information. For example, a person can have a smart card from a bank with the specified amount stored electronically on it. As he goes on making transactions with the help of the card, the balance keeps on reducing electronically. When the specified amount is utilized by the customer, he can approach the bank to get his card validated for a further specified amount. Such cards are used for paying small amounts like telephone calls, petrol bills, etc. 4. ATM Cards: The card contains a PIN (Personal Identification Number) which is selected by the customer or conveyed to the customer and enables him to withdraw cash up to the transaction limit for the day. He can also deposit cash or cheque.

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CHAPTER -3

Research Methodology

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The research methodology is a way to solve the research problem in a systematic manner. It depends upon the various steps like objectives of the study, how the data is collected, how much is the sample size required and the limitations of the study. Properly conducted study is a valuable tool for the top management in making some decisions. Good study reduces the uncertainty. Effective research methodology leads to good research. RESEARCH DESIGN Research design is the arrangement of the condition for collection and analysis of data in the manner that aims to combine relevant to the research purpose with the economy in the procedure. Research design of the study is Exploratory Research Design Exploratory research designs major emphasis is on the discovery of ideas and insights. In this research problem is transformed into one with more precise meaning. Methods of explorative research design -: 1. Depth Interviews 2. case study 3. surveys

SAMPLING Sampling is concerned with the selection of a subset of individuals from within a statistical population to estimate characteristics of the whole population. Acceptance sampling is used to determine if a production lot of material meets the governing specifications. Two advantages of sampling are that the cost is lower and data collection is faster than measuring the entire population. Each observation measures one or more properties (such as weight, location, color) of observable bodies distinguished as independent objects or individuals. In survey sampling, weights can be applied to the data to adjust for the sample design, particularly stratified sampling (blocking). Results from probability theory and statistical theory are employed to guide practice. In business and medical research, sampling is widely used for gathering information about a population. The sampling process comprises several stages:

Defining the population of concern Specifying a sampling frame, a set of items or events possible to measure Specifying a sampling method for selecting items or events from the frame Determining the sample size
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Implementing the sampling plan Sampling and data collecting

Sampling techniques Three main types of sampling strategy:

Random Systematic Stratified Convenience

In my study I used random sampling plus convenience sampling technique Sample Size for the study was 40 customers. COLLECTION OF DATA The data collection is mainly of two types: 1) primary data 2) secondary data Primary Data was collected by conducting (a) Questionnaire and (b). By conducting personnel interview of the managers In this research with a sample size of 40 customers data will be available in form of questionnaire collected in terms of different questions influencing the use of internet banking. Internet banking is considered as dependent on awareness among customers which will be studied with help of different independent variable. Only the customers of HDFC & ICICI bank are taken as samples for study.

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Different methods of collecting primary data 1. Questionnaire Method: A questionnaire is means of eliciting the feeling, beliefs, experience, perception & attitude of sample of the individual. As a data collecting instruments. It could be:a) Structured b) Unstructured 2. Interviews: Finally, for the purpose of additional information all the respondents were personally interviewed. In addition, classification and to know about the performance appraisal, the QUESTIONNAIRE, INTERVIEW method has been used. This questionnaire has 10 questions, which are aimed to achieve the objectives of the study. All the questions are close ended with two to seven options. In the questionnaire, various internet banking applications were included from previous research. For the purpose of analysis, various tables and charts were prepared with numbers and percentages of the employees in different choices. Along with primary data collected through questionnaire-interview, I also have used secondary data, which include theory part from some books, websites,newspapers etc. Sample size for the study was 40 customers. Secondary Data was collected from websites and management books. Managers need information in order to introduce products and services that create value in the mind of the customer. But the perception of value is a subjective one, and what customers value this year may be quite different from what they value next year. As such, the attributes that create value cannot simply be deduced from common knowledge. Rather, data (information) must be collected and analyzed. The goal of Marketing Research (analysis) is to provide the facts and direction that managers need to make their more important marketing decisions. The analysis involves the following steps: Define the problem. Determine research design.
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 Identify data types and sources. Determine sample plan and size. Collect the data. Analyze and interpret the data. Prepare the research report. For the purpose of study, both primary as well as secondary data has been used and also for coming out with the recommendation. It was also felt that mere secondary data would not provide in-depth information for the analysis, hence it was decided that interactive discussions with the customers and the head of every department would help in an in-depth and true understanding of e-banking. The methodology adopted was to gather relevant information from the appropriate department, correlate the information obtained and to present the information in a logical and systematic manner. Once the findings are finalized by a research, suggestions should be made for the betterment of enterprise. The data collected from questionnaire will be tabulated and analyzed so that the result can be presented as simple as possible. There are a number of ways like o Pie-chart o Graphs

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Chapter 4 Literature Review

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A new review by Tower group of 10 top US e- banking web sites evaluated several aspects of core online banking components. Group found that there is difference in terms of actual functionality and usability. Among different banks and their services. The UK's first home online banking services were set up by the Nottingham Building Society (NBS) in 1983 ("History of the Nottingham". Retrieved on 2007-12-14.). The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tan data Td1400) connected to the telephone system and television set. The system (known as 'Home link') allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Home link system. An American study conducted last year by Booz-Allen projects that by the year 2000, 16 million US households will be using Internet banking. While these numbers do not appear to be significant as compared to the total population, each Internet user is projected to be 50-250% more profitable than the average banking customer. It is expected that these Internet customers will be some of the banking system's most profitable customers representing close to 30% of all retail banking profits. The study projects that by 1999, 1,500 banks will have Internet Web sites and at least 500 of these banks will be offering full-fledged Internet banking services. In 2001 Micro banker send detailed questionnaire to the leading vendors of internet banking software27 companies responded with information on thirty programs the aggregate outcome of the outcome was that almost all the companies have developed functions for internet banking and have inbuilt feature to aid with one to one marketing on the web.

ICICI Bank ICICI Bank Online Banking Services provide the largest private bank in India right here at your desktops. Banking becomes a pleasure as the transactions and services become instant with ICICI Bank online Internet banking. The services provided are totally secure and unique. These cover online account transactions and operations, credit card and account
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applications and payments, share trading and investments through mutual funds, bill payments, statement generation and a virtual demo of each service. See in brief in final report.

Role of customer when using e-banking

You can access ICICIBank.com only by using your User ID and Password. During the first login attempt, it is mandatory to change both passwords - login and transaction which would have been mailed to you by the bank.

If you forget your password, you will have written to us using the "Email Us" option. The Bank will then issue a new password and send it to your mailing address as per our records. Kindly check with your branch that this address is updated...

Make sure no one can see the account login name or password you are entering when you log on to ICICIBank.com.

Logout of ICICIBank.com before moving on to other Websites. Before leaving the PC please "close" the browser. Do not write your ICICIBank.com login name or password anywhere. Do not leave your login name and password such that someone sitting at your computer could see them.

Never reveal your ICICIBank.com login name and password to anyone (no representative of ICICI Bank will ever ask you for your ICICIBank.com password).

Notify ICICI Bank immediately if you notice any unusual account activity. Keep all documents that include your account information in a secure location. When you login you can view the date and time of your last log in.

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Features offered by ICICI bank for internet banking

Balance enquiry and statement Transfer fund online Card to card fund transfer Use debit card online Prepaid mobile recharge Subscribe for mobile banking Link bank account to ATM Lock / activate debit cards /ATM Request a cheque book Stop payment

HDFC
Net Banking is HDFC Bank's Internet Banking service. Providing up-to-the-second account information, Net Banking lets you manage your account from the comfort of your mouse anytime, anywhere. Features offered by HDFC bank for internet banking

View account balances and statements Transfer funds between accounts Request stop payments
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Pay bills Create fixed deposit online Order cheque books

USE OF E-BANKING IN INDIA FEOM LAST FEW YEARS Year 2002 Incr.% 9 2003 12 2004 15 2005 20 2006 25 2007 32 2008 40 2009 50

Finding
In 2002-2009 the user of the E-banking is increase in more in every year.

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Chapter 5 Objective of study

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Find the customer satisfaction relating to E-banking service. The present study aims to explore the major factors responsible for internet banking based on respondents perception on various internet applications.

Study also tries to examine whether there is any relation with the demographic variable (e.g. gender) and respondents perception about internet banking; and, whether the user and non-user perception differs.

To understand the concept of Internet banking and importance, to bank as well as customers.

To study the awareness of internet banking among the customers of ICICI and HDFC banks.

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Chapter 6 Limitation of Study

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Banks were not giving me all information about E-banking services. They do not permit to meet any of the employees in their bank. Time factor (banks closed sharp at 5p.m) Banks employees were not knowledgeable enough to provide in depth information Necessity of personal attending for filling of questionnaire Geographically distribution of banks Little cooperation of some responders

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39

Chapter 7 Data analysis

1. Users of E-banking

Yes No

65% 35%

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Approx. 65% of the customers knew about E-Banking and used it and rest 35% were unaware of E-Banking.

1) No. of user of the banks ICICI SBI SBH Axis Bank UBI 20% 30% 20% 10% 8%
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HDFC

12%

This table shows the percentage of customers using the E-Banking service of various banks listed above and below is the graph for better understanding.

2) PREFERENCE FOR ONLINE BILL PAYMENT SERVICES

Yes No

60% 40%
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NO 40% YES 60%

This tells us that 60% of the customers uses e-banking for online bill payment and rest 40% do not use e-banking for payment of their bills.

3) PREFERENCE FOR ONLINE SHOPPING

Yes

70%
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No

30%

The above table and graph shows that 70% of customers uses e-banking for online shopping purposes and rest 30% do not use e-banking for online shopping.

4. PREFERENCE FOR ONLINE FUND TRANSFAR `

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Yes No

35% 65%

The above graph shows that 35% customers uses e-banking for fund transfer and rest 65% do not use e-banking for the purpose of fund transfer.

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4) SATISFIED CUSTOMERS

Yes No

65% 35%

The above graph shows that 65% customers are satisfied with e-banking and rest 35% are not satisfied with e-banking service.

5) PERFERRED MODE OF PAYMENT (TO BANK)

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CHEQUE CASH E-BANKING

50 25 25

6) SPEND PER BILL FOR ON LINE BILL PAYMENT

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ABOVE Rs.10 BETWEEN RS.5-10 BELOW RS.5 NOTHING

21 11 32 36

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Chapter 8 Findings & Suggestions

FINDINGS
1. In the users ratio of internet banking 65% of customers are using this service.
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2. More banks are connecting to the any software co. to running the E-banking service. In these services the Sbi banks is top in service of E-banking. 3. The services that are mostly used by maximum customers are transactions, online trading, bill payment, shopping etc. 4. The mode of the cash deposit in bank is for use to online truncation cash, cheque & ebanking. 5. Different banks different charge for online service.

SUGGESTIONS
1. TRAINING AND AWARENESS AMONG EMPLOYEES

It is recommended that Banks in India should conduct various training programs for the employees, so that they will get aware with the terms of internet banking. After such programs they can create awareness amongst the consumers.
2. EXCHANGE OF INFORMATION ON THREATS AND VULNERABILITIES AT APPROPRIATE FORUMS

There should be an open end discussion on the threats and vulnerabilities coming across the functioning of internet banking work by the employees in the various official forums and meets.
3. BUILD AN OPTIMAL OPERATING MODEL BY UNDERSTANDING WHICH ACTIVITIES TO RETAIN COLLABORATE AND OUTSOURCE

There should be clear sight of operations which needs to outsource to other companies, this will lead to ease in work for employees. Outsourcing operations like, cyber security department, building IT structure on internet.
4. BANK SHOULD CREATE AND SUSTAIN CUSTOMER, INVESTOR AND REGULATOR CONFIDENCE BY ADOPTING INTERNATIONAL ACCOUNTING STANDARDS 50

Adopting international standards adds some more star to the glory of any company, banks should impose such standards when it comes to internet banking or virtual banking, this will enhance the goodwill of banks among regulator, customers and invertors.
5. BANK SHOULD ANTICIPATE AND GET PREPARED FOR REGULATORY CHANGES

Laws regarding IT or cyber laws get change as per the need. Banks should anticipate such kind of changes and get loaded with various plans and actions.
6. FOCUS ON IDENTIFYING CORE COMPETENCE

Banks possess some unique characteristics or positive points in it and with the help of them it can become a leader in market. Bank should identify such points and concentrate to flourish them more. This can be done with the help of internet banking, as internet banking of banks are getting largely accepted by customers.
7. INCREASING USAGE OF MOBILE PHONES IS GOING TO REVOLUTIONIZE THE BANKING CULTURE IN NEAR FUTURE

Mobile banking is also getting popular in the segment of internet banking thus this can add some more steps to progress for banks. Bank is into the mobile banking but it is providing limited features.
8. MORE STRESS SHOULD BE GIVEN ON SECURITY CONCERN ON INTERNET

There are some people who are into unethical practices of hacking of accounts of customers. This is nothing but the breach in the security of the banks on internet. There should be some measures in order to prevent such practices. IT structure should be unbreakable.

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Chapter 9 Conclusion

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. Although the findings reveal that people know about the services but still many people are unaware and many of them are non users so the bank should by promotion try to retain the customers. Banks
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should look forward to have some tie ups with other financial institutions to increase the service base. Thus, the analysis done with the help of statistical tools clearly indicate the factors responsible for internet banking. Factor analysis results indicate that utility request, security, utility transaction, ticket booking and fund transfer are major factors. Out of total respondents more than 65 % agreed that internet banking is convenient and flexible ways of banking and it also have various transaction related benefits. Thus, Providing Internet banking is increasingly becoming a need to have than a nice to have service.

BIBLIOGRAPHY

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Books Giriappa Somu (2002), Impact of Information Technology on Banks , Mohit Publication. Macmillan, Information Technology, Data communications & electronic banking, 2nd edition, 2007, Banking Course Book, Indian Institute of Banking and Finance, Macmillan, Security in Electronic Banking, 2nd edition, 2007, Banking Course Book, Indian Institute of Banking and Finance, Suri,R. K.,5th edition,2005 Retail Management, Excel Books,2005. Jha, S.M.,10th edition,2010 Bank Marketing, Himalaya Publishing House. Singh & Chabra,5th edition,2007Commercial Banking,Dhanpat Rai& Sons. Mithani & Gorden,3rd edition ,2008 Banking Theory & Practice,Himalaya Publications,.

Websites www.rbi.org.in www.Banknetindia.com http://en.wikipedia.org/wiki/Bank#History189 http://en.wikipedia.org/wiki/Banking_regulation http://en.wikipedia.org/wiki/Banking_in_India#Early_history www.rbi.org.in/scripts/publications http://www.scribd.com/doc/5434275/indian-banking-sector http://www.scribd.com/doc/4569884/The-Reserve-Bank-of-India89

QUESTIONNAIRE

1. Name of the customer:-xyz

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2. How often do you use e-banking per week? a. 1 time b. 2-3 times c. Never d. Everyday

3. Do you use any e-banking services? a. Yes b, No

4. Do you like E-banking? a. Yes b. No

5. Tick which bank you prefer the most. a. Icici b. Sbi c. Sbh d. Axis e. Union bank f. Hdfc
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g. UTI Bank Ltd h. Bank of Punjab Ltd

6. Why any of the above stated bank?

a. Service is good b. They provide security c. Cheaper service fees.

7. Which type of service mostly you use? a. Balance and transaction history search

b. Transfer fund online c. Card to card fund transfer d. Open FD e. Lock / activate debit cards /ATM f. Request a cheque book g. Stop payment h. Railway pass / ticket 8. Rate The Services of the bank , a. poor
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b. good c. Very good

9. Are you satisfied with the using of E-banking? a. Yes b. No

10. For What Purposes did you use E-Banking? a) Bill payment b) Account information c) Funds transfer d) Others

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