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CHAPTER – 1

INTRODUCTION TO
SUBJECT

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INTRODUCTION TO SUBJECT

1.1.1 INTRODUCTION OF E-BANKING


The world is changing at a staggering rate and technology is considered to be the key
driver for these changes around us. An analysis of technology and its uses show that it
has permeated in almost every aspect of our life. Many activities are handled
electronically due to the acceptance of information technology at home as well as at
workplace. Slowly but steadily, the Indian customer is moving towards the internet
banking. The ATM and the Net transactions are becoming popular. But the customer
is clear on one thing that he wants net-banking to be simple and the banking sector is
matching its steps to the march of technology. E-banking or Online banking is a
generic term for the delivery of banking services and products through the electronic
channels such as the telephone, the internet, the cell phone etc. The concept and scope
of e-banking is still evolving. It facilitates an effective payment and accounting
system thereby enhancing the speed of delivery of banking services considerably.

Several initiatives have been taken by the Government of India as well as the RBI
(Reserve Bank of India); have facilitated the development of e-banking in India. The
government of India enacted the IT Act, 2000, which provides legal recognition to
electronic transactions and other means of electronic commerce. The RBI has been
preparing to upgrade itself as regulator and supervisor of the technologically
dominated financial system. It issued guidelines on the risks and controls in computer
and telecommunication systems to all banks, advising them to evaluate the risks
inherent in the systems and put in place adequate control mechanisms to address these
risks.

WHAT IS E-BANKING?

Electronic banking is one of the truly widespread avatars of E-commerce the world
over. Various authors define E-Banking differently but the most definition depicting
the meaning and features of E-Banking are as follows:

1. Banking is a combination of two, Electronic technology and Banking.

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2. Electronic Banking is a process by which a customer performs banking
Transactions electronically without visiting a brick-and-mortar institutions.

3. E-Banking denotes the provision of banking and related service through


Extensive use of information technology without direct recourse to the bank by
the customer.

Bank

Information
technology

Customer

NEED FOR E-BANKING

One has to approach the branch in person, to withdraw cash or deposit a cheque or
request a statement of accounts. In true Internet banking, any inquiry or transaction is
processed online without any reference to the branch (anywhere banking) at any time.
Providing Internet banking is increasingly becoming a "need to have" than a "nice to
have" service. The net banking, thus, now is more of a norm rather than an exception
in many developed countries due to the fact that it is the cheapest way of providing
banking services.

Banks have traditionally been in the forefront of harnessing technology to improve


their products, services and efficiency. They have, over a long time, been using

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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.

1.1.2 HISTORY OF E- BANKING

The precursor for the modern home online banking services were the distance banking
services over electronic media from the early '80s. The term online became popular in
the late '80s and refers 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 city’s major
banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered
home banking services using the videotex system. Because of the commercial failure
of videotex these banking services never became popular except in France where the
use of videotex (Minitel) was subsidised by the telecom provider and the UK, where
the Prestel system was used.

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 (Tandata Td1400) connected to the telephone system and
television set. The system (known as 'Homelink') 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 Homelink 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

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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.

EVOLUTION OF E-BANKING

The story of technology in banking started with the use of punched card machines like
Accounting Machines or Ledger Posting Machines. The use of technology, at that
time, was limited to keeping books of the bank. It further developed with the birth of
online real time system and vast improvement in telecommunications during late
1970’s and 1980’s.it resulted in a revolution in the field of banking with “convenience
banking” as a buzzword. Through Convenience banking, the bank is carried to the
doorstep of the customer.

The 1990’s saw the birth of distributed computing technologies and Relational Data
Base Management System. The banking industry was simply waiting for these
technologies. Now with distribution technologies, one could configure dedicated
machines called front-end machines for customer service and risk control while
communication in the batch mode without hampering the response time on the front-
end machine.

Traditional banking Virtual or E-banking

Gunpowder Nuclear charged

Personalized services, time Real time transactions,


consuming, limited access integrated platform, all time
access

Intense competition has forced banks to rethink the way they operated their business.
They had to reinvent and improve their products and services to make them more
beneficial and cost effective. Technology in the form of E-banking has made it
possible to find alternate banking practices at lower costs.

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More and more people are using electronic banking products and services because
large section of the banks future customer base will be made up of computer literate
customer, the banks must be able to offer these customer products and services that
allow them to do their banking by electronic means. If they fail to do this will, simply,
not survive. New products and services are emerging that are set to change the way
we look at money and the monetary system.

1.1.3 USAGE OF E-BANKING

The rise in the e-commerce and the use of internet in its facilitation along with the
enhanced online security of transactions and sensitive information has been the core
reason for the penetration of online banking in everyday life. According to the latest
official figures from the office of National Statistics ( ONS 2007) indicate that
subscriptions to the internet has grown more than 50% from 25 million in 2005 to 45
million in 2007 in India. It has also been estimated that 60% of the population in India
use internet in their daily lives. The fundamental shift towards the involvement of the
customer in the financial service provision with the help of the technology especially
internet has helped to reduce the costs of financial institutions as well as helped client
to use the service at anytime and from virtually anywhere with access to an internet
connection. The use of electronic banking has removed personnel that facilitate the
transactions and has placed additional responsibilities on the customers to transact
with the service. The computerization of the banking operations has made maximum
impact on:-
1) Internal Accounting System
2) Customer service
3) Diversification of system

1.1.4 INTERNET BANKING VERSUS TRADITIONAL BANKING

In spite of so many facilities that Internet banking offers us, we still seem to trust our
traditional method of banking and is reluctant to use online banking. But here are few
cases where Internet banking will turn out to be a better option in terms of saving your
money.

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'Stop payment' done through Internet banking will not cost any extra fees but when
done through the branch, the bank may charge you Rs 50 per cheque plus the service
tax.

Through Internet banking, you can check your transactions at any time of the day, and
as many times as you want to. On the other hand, in a traditional method, you get
quarterly statements from the bank and if you request for a statement at your required
time, it may turn out to be an expensive affair. The branch may charge you Rs 25 per
page, which includes only 30 transactions. Moreover, the bank branch would take
eight days to deliver it at your doorstep.

If the fund transfer has to be made outstation, where the bank does not have a branch,
the bank would demand outstation charges. Whereas with the help of online banking,
it will be absolutely free for you. As per the Internet and Mobile Association of
India's report on online banking 2006, "There are many advantages of online banking.
It is convenient, it isn't bound by operational timings, there are no geographical
barriers and the services can be offered at a miniscule cost."

1.1.5 IMPACT OF E-BANKING ON TRADITIONAL SERVICES

One of the issues currently being addressed is the impact of e-banking on traditional
banking players. After all, if there are risks inherent in going into e-banking there are
other risks in not doing so. It is too early to have a firm view on this yet. Even to
practitioners the future of e-banking and its implications are unclear. It might be
convenient nevertheless to outline briefly two views that are prevalent in the market.
The view that the Internet is a revolution that will sweep away the old order holds
much sway. Arguments in favor are as follows:

E-banking transactions are much cheaper than branch or even phone transactions.
This could turn yesterday’s competitive advantage - a large branch network - into a
comparative disadvantage, allowing e-banks to undercut bricks-and-mortar banks.
This is commonly known as the "beached dinosaur" theory.

E-banks are easy to set up so lots of new entrants will arrive. ‘Old-world’ systems,
cultures and structures will not encumber these new entrants. Instead, they will be

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adaptable and responsive. E-banking gives consumers much more choice. Consumers
will be less inclined to remain loyal.

E-banking will lead to an erosion of the ‘endowment effect’ currently enjoyed by the
major UK banks. Deposits will go elsewhere with the consequence that these banks
will have to fight to regain and retain their customer base. This will increase their cost
of funds, possibly making their business less viable. Lost revenue may even result in
these banks taking more risks to breach the gap.

Portal providers are likely to attract the most significant share of banking profits.
Indeed banks could become glorified marriage brokers. They would simply bring two
parties together – e.g. buyer and seller, payer and payee. The products will be
provided by monolines, experts in their field. Traditional banks may simply be left
with payment and settlement business – even this could be cast into doubt.

Traditional banks will find it difficult to evolve. Not only will they be unable to make
acquisitions for cash as opposed to being able to offer shares, they will be unable to
obtain additional capital from the stock market. This is in contrast to the situation for
Internet firms for whom it seems relatively easy to attract investment. There is of
course another view which sees e-banking more as an evolution than a revolution. E-
banking is just banking offered via a new delivery channel. It simply gives consumers
another service (just as ATMs did). Like ATMs, e-banking will impact on the nature
of branches but will not remove their value. Experience in Scandinavia (arguably the
most advanced e-banking area in the world) appears to confirm that the future is
‘clicks and mortar’ banking. Customers want full service banking via a number of
delivery channels. The future is therefore ‘Martini Banking’ (any time, any place,
anywhere, anyhow).

Traditional banks are starting to fight back. The start-up costs of an e-bank are high.
Establishing a trusted brand is very costly as it requires significant advertising
expenditure in addition to the purchase of expensive technology (as security and
privacy are key to gaining customer approval). E-banks have already found that retail
banking only becomes profitable once a large critical mass is achieved. Consequently
many e-banks are limiting themselves to providing a tailored service to the better off.
Nobody really knows which of these versions will triumph. This is something that the
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market will determine. However, supervisors will need to pay close attention to the
impact of e-banks on the traditional banks, for example by surveillance of:
• strategy
• customer levels
• earnings and costs
• advertising spending
• margins
• funding costs
• Merger opportunities and threats, both in the UK and abroad.

1.1.6 DIAGRAM OF E-BANKING SYSTEM

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1.1.7 E-BANKING PRODUCTS

Automated Teller Machine (ATM): These are cash dispensing machine, which are
frequently seen at banks and other locations such as shopping centers and building
societies. Their main purpose is to allow customer to draw cash at any time and to
provide banking services where it would not have been viable to open another branch
e.g. on university campus.

An automated teller machine or automatic teller machine (ATM) is a


computerized telecommunications device that provides a financial institution's
customers a method of financial\ transactions in a public space without the need for a
human clerk or bank teller. On most modern ATMs, the customer identifies him or
herself by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard
with a chip that contains his or her card number and some security information, such
as an expiration date or CVC (CVV). Security is provided by the customer entering a
personal identification number (PIN).

Using an ATM, customers can access their bank accounts in order to make cash
withdrawals (or credit card cash advances) and check their account balances. Many
ATMs also allow people to deposit cash or checks, transfer money between their bank
accounts, pay bills, or purchase goods and services.

Some of the advantages of ATM to customers are:-


• Ability to draw cash after normal banking hours
• Quicker than normal cashier service
• Complete security as only the card holder knows the PIN
• Does not just operate as a medium of obtaining cash.
• Customer can sometimes use the services of other bank ATM’s.

Tele banking or Phone Banking: Telephone banking is relatively new Electronic


Banking Product. However it is fastly becoming one of the most popular products.
Customer can perform a number of transactions from the convenience of their own
home or office; in fact from anywhere they have access to phone. Customers can do
following:-

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• Check balances and statement information
• Transfer funds from one account to another
• Pay certain bills
• Order statements or cheque books
• Demand draft request

This facility is available with the help of Voice Response System (VRS). This system
basically, accepts only TONE dialed input. Like the ATM customer has to follow
particular process, initially account number and telephone PIN are fed for the process
to start. Also the VRS system provides the users within additional facilities such as
changing existing password with the new desired, information about new products,
current interest rates etc.

Mobile Banking: Mobile banking comes in as a part of the banks initiative to offer
multiple channels 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 Indian banking- both directly and
indirectly. They are being used both as banking and other channels.

Internet Banking: 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 customer’s
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. In India first one to move into this area was ICICI Bank. They started
web based banking as early as august 1997.

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1.1.8 TYPES OF INTERNET BANKING OR E-BANKING

Understanding the various types of Internet banking will help examiners assess the
risks involved. Currently, the following three basic kinds of Internet banking are
being employed in the marketplace.

• Informational- this is the basic level of Internet banking. Typically, the bank
has marketing information about the bank’s products and services on a stand-
alone server. The risk is relatively low, as informational systems typically
have no path between the server and the bank’s internal network. This level of
Internet banking can be provided by the banks or outsourced. While the risk to
a bank is relatively low, the server or web site may be vulnerable to alteration.
Appropriate controls therefore must be in place to prevent unauthorized
alterations to the bank’s server or web site.

• Communicative- this type of Internet banking systems and the customer. The
interaction between the bank’s system and the customer. The interaction may
be limited to electronic mail, account enquiry, loan applications, or static file
updates (name and address change). Because these servers may have a path to
the bank’s internal networks, the risk is higher with this configuration than
with informational systems. Appropriate controls need to be in the place to
prevent, monitor, and alert management of any unauthorized attempt to access
the bank’s internal networks and computer systems. Virus controls also
become much more critical in this environment.

• Transactional- this level of Internet banking allows customers to execute


transactions. Since a path typically exists between the server and the bank or
outsourcer’s internal network, this is the highest risk architecture and must
have the strongest controls. Customer transactions can include accessing
accounts, paying bills, transferring funds etc.

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1.1.9 FEATURES OF E-BANKING

Transactional: (e.g. performing a financial transaction such as an account to account


transfer, paying a bill or applications like applying for a loan, new account, etc.)
• Electronic Bill Presentment and Payment (EBPP)
• Funds transfer between customers own checking and savings accounts, or to
another customers account.
• Investment purchase or sale.
• Loan application and transactions such as repayments.

Non-transactional: (e.g. online statements, Check links, Chat, Co-browsing etc.)


Financial Institution Administration- features allowing financial institutions to
manage the online experience of their end users.
ASP/ Hosting Administration – features allowing the hosting company to administer
the solution across financial institution.

1.1.10 ADVANTAGES OF E-BANKING:-

• Convenience- Unlike your corner bank, online banking sites never close;
they’re available 24 hours a day, seven days a week, and they’re only a mouse
click away. With pressures on time and longer travelling periods, more and
more people find it tiresome waiting in queues. People want flexibility, and
Internet banking offers just that.
• Ubiquity- If you’re out of state or even out of the country when a money
problem arises, you can log on instantly to your online bank and take care of
business, 24\7.
• Transaction speed- Online bank sites generally execute and confirm
transactions at or quicker than ATM processing speeds.
• Efficiency-You can access and manage all of your bank accounts, including
IRA’s, CDs, even securities, from one secure site.
• Effectiveness- Many online banking sites now offer sophisticated tools,
including account aggregation, stock quotes, rate alert and portfolio managing

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program to help you manage all of your assets more effectively. Most are also
compatible with money managing programs such as quicken and Microsoft
money.
• Cheaper alternative: - With increasing competition, it seems to be the cost
factor that is driving banks to offer the facility. The Internet is still a very
cheap alternative to opening a physical branch, and most of the push seems to
be coming from the supply side. The costs of a banking service through the
Internet form a fraction of costs through conventional methods.
• From snob value to necessity:- A couple of years ago, there was a belief even
among bankers that customers opening new accounts wanted the online
banking facility, just to "feel good" and very few of them actually used the
services. Today, bankers believe that the trend from `nice to have' is changing
to `need to have'. The "snob value" of banking with an organisation that could
offer service on the Internet has given way to a genuine necessity, he feels. "It
all depends on how busy a person is."

DISADVANTAGES OF INTERNET BANKING

• Start-up may take time-In order to register for your bank’s online program,
you will probably have to provide ID and sign a form at a bank branch. If you
and your spouse wish to view and manage their assets together online, one of
you may have to sign a durable power of attorney before the bank will display
all of your holdings together.
• Learning curves- Banking sites can be difficult to navigate at first. Plan to
invest some time and\or read the tutorials in order to become comfortable in
your virtual lobby.
• Bank site changes- Even the largest banks periodically upgrade their online
programs, adding new features in unfamiliar places. In some cases, you may
have to re-enter account information.

1.1.11 HOW E-BANKING CAN EASE YOUR LIFE

Indian banks are trying to make your life easier. Not just bill payment, you can make
investments, shop or buy tickets and plan a holiday at your fingertips. In fact, sources

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from ICICI Bank tell us, "Our Internet banking base has been growing at an
exponential pace over the last few years. Currently around 78 per cent of the bank's
customer base is registered for Internet banking." To get started, all you need is a
computer with a modem or other dial-up device, a checking account with a bank that
offers online service and the patience to complete about a one-page application--
which can usually be done online. You can avail the following services.

1. Bill payment service: Each bank has tie-ups with various utility companies,
service providers and insurance companies, across the country. It facilitates the
payment of electricity and telephone bills, mobile phone, credit card and insurance
premium bills. To pay bills, a simple one-time registration for each biller is to be
completed. Standing instructions can be set, online to pay recurring bills,
automatically. One-time standing instruction will ensure that bill payments do not
get delayed due to lack of time. Most interestingly, the bank does not charge
customers for online bill payment.

2. Fund transfer: Any amount can be transferred from one account to another of the
same or any another bank. Customers can send money anywhere in India. Payee’s
account number, his bank and the branch is needed to be mentioned after logging in
the account. The transfer will take place in a day or so, whereas in a traditional
method, it takes about three working days. ICICI Bank says that online bill payment
service and fund transfer facility have been their most popular online services.

3. Credit card customers: Credit card users have a lot in store. With Internet
banking, customers can not only pay their credit card bills online but also get a loan
on their cards. Not just this, they can also apply for an additional card, request a credit
line increase and God forbid if you lose your credit card, you can report lost card
online.

4. Railway pass: This is something that would interest all the aam janta. Indian
Railways has tied up with ICICI bank and you can now make your railway pass for
local trains online. The pass will be delivered to you at your doorstep. But the facility
is limited to Mumbai, Thane, Nasik, Surat and Pune. The bank would just charge Rs
10 + 12.24 percent of service tax.

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5. Investing through Internet banking: Opening a fixed deposit account cannot get
easier than this. An FD can be opened online through funds transfer. Online banking
can also be a great friend for lazy investors. Now investors with interlinked demat
account and bank account can easily trade in the stock market and the amount will be
automatically debited from their respective bank accounts and the shares will be
credited in their demat account.

Moreover, some banks even give the facility to purchase mutual funds directly from
the online banking system. So it removes the worry about filling those big forms for
mutual funds, they will now be just a few clicks away. Nowadays, most leading banks
offer both online banking and demat account. However if the customer have there
demat account with independent share brokers, then need to sign a special form,
which will link your two accounts.

6. Recharging your prepaid phone: Now there is no need to rush to the vendor to
recharge the prepaid phone, every time the talk time runs out. Just top-up the prepaid
mobile cards by logging in to Internet banking. By just selecting the operator's name,
entering the mobile number and the amount for recharge, the phone is again back in
action within few minutes.

7. Shopping at your fingertips: Leading banks have tie ups with various shopping
websites. With a range of all kind of products, one can shop online and the payment is
also made conveniently through the account. One can also buy railway and air tickets
through Internet banking.

1.1.12 INTERNET BANKING IN INDIA

The Reserve Bank of India constituted a working group on Internet Banking. The
group divided the internet banking products in India into 3 types based on the levels
of access granted. They are:

• Information Only System: General purpose information like interest rates,


branch location, bank products and their features, loan and deposit calculations
are provided in the banks website. There exist facilities for downloading
various types of application forms. The communication is normally done

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through e-mail. There is no interaction between the customer and bank's
application system. No identification of the customer is done. In this system,
there is no possibility of any unauthorized person getting into production
systems of the bank through internet.
• Electronic Information Transfer System: The system provides 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.
• Fully Electronic Transactional System: This system allows bi-directional
capabilities. Transactions can be submitted by the customer for online update.
This system requires high degree of security and control. In this environment,
web server and application systems are linked over secure infrastructure. It
comprises technology covering computerization, networking and security,
inter-bank payment gateway and legal infrastructure. It includes the
followings:
o ATM
o DEBIT CARDS
o SMART CARDS
o MOBILE BANKING

1.1.13 THE INDIAN SCENARIO

DRIVERS OF CHANGE: Advantages previously held by large financial institutions


have shrunk considerably. The Internet has levelled the playing field and afforded
open access to customers in the global marketplace. Internet banking is a cost-
effective delivery channel for financial institutions. Consumers are embracing the
many benefits of Internet banking. Access to one's accounts at anytime and from any
location via the World Wide Web is a convenience unknown a short time ago. Thus, a
bank's Internet presence transforms from 'brouchreware' status to 'Internet banking'
status once the bank goes through a technology integration effort to enable the

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customer to access information about his or her specific account relationship. The six
primary drivers of Internet banking includes, in order of primacy are:

• Improve customer access


• Facilitate the offering of more services
• Increase customer loyalty
• Attract new customers
• Provide services offered by competitors
• Reduce customer attrition

INDIAN BANKS ON WEB

The banking industry in India is facing unprecedented competition from non-


traditional banking institutions, which now offer banking and financial services over
the Internet. The deregulation of the banking industry coupled with the emergence of
new technologies, are enabling new competitors to enter the financial services market
quickly and efficiently.

Indian banks are going for the retail banking in a big way. However, much is still to
be achieved. This study that was conducted by students of IIML shows some
interesting facts:

• Throughout the country, the Internet Banking is in the nascent stage of


development (more than 50 banks are offering varied kind of Internet banking
services).
• In general, these Internet sites offer only the most basic services. 55% are so
called 'entry level' sites, offering little more than company information and
basic marketing materials. Only 8% offer 'advanced transactions' such as
online funds transfer, transactions & cash management services.
• Foreign & Private banks are much advanced in terms of the number of sites &
their level of development.

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1.1.14 EMERGING CHALLENGES

Information technology analyst firm, the Meta Group, recently reported "financial
institutions who don't offer home banking by the year 2000 will become
marginalized." By the year of 2002, a large sophisticated and highly competitive
Internet Banking Market will develop which will be driven by

• Demand side pressure due to increasing access to low cost electronic services.
• Emergence of open standards for banking functionality.
• Growing customer awareness and need of transparency.
• Global players in the fray
• Close integration of bank services with web based E-commerce or even
disintermediation of services through direct electronic payments (E- Cash).
• More convenient international transactions due to the fact that the Internet
along with general deregulation trends eliminates geographic boundaries.
• Move from one stop shopping to 'Banking Portfolio' i.e. unbundled product
purchases.

Certainly some existing brick and mortar banks will go out of business. But that's
because they fail to respond to the challenge of the Internet. The Internet and its
underlying technologies will change and transform not just banking, but also all
aspects of finance and commerce. It represents much more than a new distribution
opportunity. It will enable nimble players to leverage their brick and mortar presence
to improve customer satisfaction and gain share. It will force lethargic players who
are struck with legacy cost basis, out of business-since they are unable to bring to play
in the new context.

1.1.15 E-BANKING WORLD WIDE

Since its inception, Internet banking has experienced strong and sustained growth.
World Bank report on leapfrogging in e-finance pointed out that the three countries
with impressive progress in information technology in this sense are Estonia,
Republic of Korea and Brazil. Creation of the world’s leading electronic banking
systems has been done at a remarkably low cost compared to other world-class
internet banks.

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In the European Union, 60 million people, representing 18 per cent of the adult
population, use online banking In France, the number of online banking accounts is
recording an annual growth rate of 75 per cent. However, Estonia is a country that has
become a leader in Internet banking (which now reaches 18 per cent of the
population), not only among Eastern European countries but in world rankings,
through a combination of easy to- use software, free-of-charge transactions and
behavior changes resulting from the influence of the Nordic countries’ IT culture on
Estonia.

A sector in which Latin America is seems to be performing better than in other


industries is online retail banking. Growth in this area has been driven by traditional
banks, which have used the online channel to generate customer loyalty and improve
their operating margins. Two Brazilian banks, Bradesco and Banco do Brasil; have
thus achieved more than 4 million online customers each. Mexico is another leader of
Internet banking in Latin America. It adopted legislation providing for the
development of both E-Commerce and e-finance. In Mexico, the number of online
bank users more than tripled from 700,000 in 2000 to 2.4 million in 2001, and it could
reach 4.5 million in 2005 (E-Marketer 2002b). One reason for the success of Latin
American banks’ online ventures seems to be the attention they have paid to
providing retail customers with multiple ways to access their accounts (Internet,
telephone, wireless). However, given that the share of the total population that
actually has a bank account is relatively small, the expansion of Latin American
online banking may be facing a bottleneck.

Compared with overall Internet usage estimated at 4.4 million in Australia, the major
banks together have attracted only 1.2 million to online banking. The Internet is a
global phenomenon and so is e-finance. Its deployment is not limited to developed
countries, and indeed some developing countries – such as India and the Republic of
Korea – are experiencing particularly strong growth in E-Banking. In Asia one of the
most impressive records has been achieved by the Republic of Korea. The Republic of
Korea is leading in online brokerage and in mobile banking. In South-East Asia
Internet banking is also developing rapidly in Thailand, Malaysia, and Singapore and
to a lesser extent, in the Philippines.

[20]
In Bangladesh there is a large gap between the computerization of foreign banks and
that of local commercial banks and as regards the state of their intra- and inter-branch
online networks. However, 75 per cent of local banks are planning to introduce E-
Banking, which implies very dynamic improvements.

Apart from North and South Africa the Sub Saharan Africa is the region that is
seriously lagging behind in Internet banking, although it is giving to the rest of the
world the good example of microfinance developments.

[21]
CHAPTER – 1.2

INTRODUCTION TO
HDFC & ICICI

[22]
1.2.1 HDFC COMPANY PROFILE

INTRODUCTION

HDFC Bank (NYSE: HDB), one amongst the firsts of the new generation, tech-savvy
commercial banks of India, was incorporated in August 1994, after the Reserve Bank
of India allowed setting up of Banks in the private sector. The Bank was promoted by
the Housing Development Finance Corporation Limited, a premier housing finance
company (set up in 1977) of India.

HISTORY

The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set
up a bank in the private sector, as part of the RBI's liberalization of the Indian
Banking Industry in 1994. The bank was incorporated in August 1994 in the name of
'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995.

BRANCH NETWORK

Currently HDFC Bank has 1416 branches, 3382 ATMs, in 550 cities in India, and all
branches of the bank are linked on an online real-time basis. The bank offers many
innovative products & services to individuals, corporate, trusts, governments,
partnerships, financial institutions, mutual funds, insurance companies.

It is a path breaker in the Indian banking sector. In 2007 HDFC Bank


acquired Centurion Bank of Punjab taking its total branches to more than 1,000.
Though, the official license was given to Centurion Bank of Punjab branches, to
continue working as HDFC Bank branches, on May 23, 2008.

BUSINESS FOCUS

HDFC Bank's mission is to be a World-Class Indian Bank. The Bank's aim is to build
sound customer franchises across distinct businesses so as to be the preferred provider
of banking services in the segments that the bank operates in and to achieve healthy

[23]
growth in profitability, consistent with the bank's risk appetite. The bank is committed
to maintain the highest level of ethical standards, professional integrity and regulatory
compliance. HDFC Bank's business philosophy is based on four core values:
Operational Excellence, Customer Focus, Product Leadership and People.

BUSINESS PROFILE

HDFC Bank caters to a wide range of banking services covering commercial and
investment banking on the wholesale side and transactional/branch banking on the
retail side. The bank has three key business areas:

• Wholesale Banking Services : The Bank's target market is primarily large, blue chip
manufacturing companies in the Indian corporate sector and to a lesser extent,
emerging midsized corporate. For these corporate, the Bank provides a wide range of
commercial and transactional banking services, including working capital finance,
trade services, transactional services, cash management, etc. The bank is also a
leading provider of structured solutions that combine cash' management services with
vendor and distributor finance for facilitating superior supply chain management for
its corporate customers.
• Retail Banking Services: The objective of the Retail Bank is to provide its target
market customers a full range of financial products and banking services, giving the
customer a one stop window for all his/her banking requirements. The products are
backed by world-class service and delivered to the customers through the growing
branch network, as well as through alternative delivery channels like ATMs, Phone
Banking, Net Banking and Mobile Banking. The HDFC Bank Preferred program for
high net worth individuals, the HDFC Bank Plus and the Investment Advisory
Services programs have been designed keeping in mind needs of customers who seek
distinct financial solutions, information and advice on various investment avenues.
The Bank also has a wide array of retail loan products including Auto Loans, Loans
against marketable securities, Personal Loans and Loans for Two-wheelers. It’s also a
leading provider of Depository Services to retail customers, offering customers the
facility to hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the MasterCard Maestro debit card
as well. The debit card allows the user to directly debit his account at the point of

[24]
purchase at a merchant establishment, in India and overseas. The Bank launched its
credit card in association with VISA in November 2001. The Bank is also one of the
leading players in the "merchant acquiring" business with over 25,000 Point-of-sale
(POS) terminals for debit / credit cards acceptance at merchant establishments. The
Bank is well positioned as a leader in various net-based B2C opportunities including
a wide range of Internet banking services for Fixed Deposits, Loans, Bill Payments.,
etc.
• Treasury Operations: Within this business, the bank has three main product areas-
Foreign Exchange and Derivatives, Local Currency Money Market & Debt
Securities, and Equities With the liberalization of the financial markets in India,
corporate need more sophisticated risk management information, advice and product
structures, These and fine pricing on various treasury products are provided through
the bank's Treasury team. To comply with statutory reserve requirements, the bank is
required to hold 25% of its deposits in government securities. The Treasury business
is responsible for managing the returns and market risk on this investment portfolio.

1.2.2 HDFC BANK SERVICES

NET BANKING: 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.

HDFC Bank Net Banking Secure Access


HDFC Bank has implemented a new security solution for its customers - Secure
Access .As your security is our top priority, we have initiated the Secure Access
solution to protect you from fraudsters and hackers - who are looking to find a way to
access your account.
Currently following transactions are covered under Secure Access
• Transfer from one HDFC Bank account to other HDFC Bank account holders
(under distinct customer ID)
• Transfer from HDFC Bank account to any other Bank's account (also known
as RTGS & NEFT)
• Visa Money Transfer
• Third Party Demand Draft through Net Banking

[25]
Third Party Transfer
Third-Party Transfer is a Net Banking feature for which you will need your unique
Customer ID and IPIN (password). Login to Net Banking to confirm that your ID is
active in our records.

What is TPT?
With Third-Party Transfer (TPT) you can transfer funds online from your HDFC
Bank account to another HDFC Bank/Other Bank account (beneficiary), anywhere in
India. This is a real-time transaction and the debit and credit will reflect in the
respective accounts immediately.

Third Party Transfer can be initiated:

• From your Account to other Bank Accounts using


• National electronic Funds Transfer (NEFT) - Funds will be credited to the
beneficiary account in two working days
• Real Time Gross Settlement (RTGS) - Funds will be credited to the
beneficiary account on the same working day.
• From your HDFC Bank account to other HDFC Bank accounts (different cuts
ids).
• From your account to any Visa Card (Debit or Credit) within India.
• For issuance of Third Party Demand Drafts from your account.

You can transfer up to a maximum of Rs. 10, 00,000/- per cuts id per day using this
facility. This amount can be transferred in parts or on a single basis.

INSTA IPIN FACILITY


It has been our constant endeavor to make banking a hassle-free experience for you.
At HDFC Bank, we understand that it is quite possible to forget even important things
like your Net Banking password (IPIN). But that should not be holding you back from
accessing your bank account. You can now re-generate your Net Banking password
instantly with the help of your Debit Card details and start using your new password
(IPIN) immediately. No need to request for a new password and await its arrival. And

[26]
it is even better as you select your new HDFC Bank password yourself so it becomes
much easier to remember the same.

CREDIT CARDS ONLINE


We take great pleasure in announcing that the HDFC Bank Net Banking service is
now available for Credit Cards also. Now using your HDFC Bank Credit Card has
become more convenient and time saving. You can now access your Credit Card
account from home or office or even while traveling. With Net Banking you can view
your card account information and do much more just at the click of a button.
Currently the following Credit Cards Net banking features are available:-
• Account Information
• Unbilled Transactions
• Credit Card Statement
• Download Card Statement (upto last 6 months)

ONEVIEW: One View is a revolutionary service from HDFC Bank that allows you
to manage multiple accounts in different banks through one single online interface. If
you are an HDFC Bank customer and have one or more accounts with Citibank, ICICI
Bank, HSBC India, Standard Chartered Bank then One View is just right for you.

FEATURES & BENEFITS


No need to individually log on to internet banking of every account. Just log on to
One View and manage upto FIVE accounts in different banks.
• Remember only ONE password.
• No charges whatsoever

HOW SECURE IS ONEVIEW?


One View gives you the world class banking security and technology sophistication
you'd expect of HDFC Bank, with features such as:
• Robust firewall protection makes it nearly impossible to break through.
• All information is transmitted using advanced 128 bit Secure Socket Layer (SSL)
encryption technology.
• Automatic time-outs ensure that your account details are not viewed by others.
• You can only view your accounts and cannot transact, so your money is absolutely
safe.

[27]
INSTA ALERTS: Now you can get regular updates on your bank account on your mobile
phone or email ID. Just register for our Insta Alert service and receive updates on your
account as and when the select transaction happens - all this without visiting the branch or
ATM.You can register for any or all of the following alerts:
• Debit transactions greater than Rs. 5,000/ Rs.10, 000/ Rs. 20,000/Rs. 50,000
• Credit in account greater than Rs. 5,000/ Rs.10, 000/ Rs. 20,000/Rs. 50,000
• Account Balance below Rs. 5,000/ Rs.10, 000/ Rs. 20,000/Rs. 50,000-
• Weekly account balance
• Salary Credits
• Utility bill payment due Alert

MOBILE BANKING: Your Mobile is now your bank! Now access your bank
account and conduct a host of banking transactions through your mobile, with our
unique Mobile Banking service. You can check your account level information such
as balance details, mini statement, and cheque status as well as carry out financial
transactions such as Funds Transfer using HDFC Bank Mobile Banking service.

FEATURES OF MOBILE BANKING


Using our Mobile Banking service, you can avail of a host of features at your finger
tips
• Perform funds transfers
• Get your balance details
• Obtain your last 3 transaction details
• Request a cheque book
• Stop a cheque payment
• Enquire cheque status
• Request an account statement
• Get Fixed Deposit details
• Request for I-PIN generation
• Request a cheque book

AUTOMATED TELLER MACHINE: With wide spread network of 4,000 ATMs


across India, enjoy the following benefits at your convenience.

[28]
• 24-hour access to Cash - Withdraw up to Rs.10, 000/- per day on your ATM
Card and up to Rs. 15,000 on your Debit Card.
• Personalized Cash Withdrawals – Save time on your cash withdrawal
transactions by pre-setting your preferred language / account / amount.
• View Account Balances & Mini-statements - Get details of the last 9
transactions on your account with the mini-statement, along with your account
balance.
• Change ATM PIN - Change your ATM PIN at any given point in time.
• Order a Cheque Book / Account Statement
• HDFC Bank Credit Card Payment - Make payment of your HDFC Bank
Credit Card dues using the ATM. The primary account of your Debit / ATM
card will be debited.
• Deposit Cash or Cheques - Deposit Cash or Cheques into your account
without visiting the Branch. Available at Non-Branch HDFC Bank ATMs
• Transfer Funds between accounts – Transfer money between your accounts.
Both accounts must be linked to your ATM / Debit Card. Maximum of 16
A/Cs (Savings / Current) can be linked to a card.

REFILL YOUR PREPAID MOBILE – Refill your prepaid mobile using Prepaid
Mobile Refill service instantly. HDFC Bank offers – Prepaid Mobile Refill, which
allows you to recharge your prepaid mobile phone anytime from anywhere and pay
directly from your Bank account. Avoid hassles of withdrawing cash or searching for
a retailer for buying the recharge card.
• You can avail of this service in two convenient ways:
Prepaid Mobile Refill on Internet
Prepaid Mobile Refill on ATM

Prepaid Mobile Refill on Internet


You can now recharge your Prepaid Mobile phone right here on the HDFC Bank
website.
Enjoy Convenience of:
Recharging your prepaid mobile phone from the comfort of your home or office
anytime.

[29]
Paying directly from your Bank account - avoid the hassle of withdrawing cash from
an ATM or Branch.
To avail the facility, customer has to go to the recharge page and do the following
steps:
• Select Mobile Operator Name, enter Mobile Number, Amount for Top-Up
• Confirm payment by logging into Net Banking using your Customer ID and
IPIN (Net Banking password).
• Depending on the recharge option chosen, your phone will be recharged in a
few seconds.

PHONE BANKING: Your phone is now your bank. When you dial in to Phone
Banking, a voice prompt will guide you through the various transactions. You may
also talk to a Phone Banker, who will provide you with the required assistance.
Avail of the following services via Phone Banking:

• Check your account balance - Get up-to-the-second details of your Savings


or Current Accounts and your Fixed Deposits. You can also get the details of
the last 5 transactions on your account, or have a mini statement of last 9
transactions faxed across to you.
• Enquire on the cheque status - You can use Phone Banking to check on the
status of cheques issued or deposited from anywhere in India.
• Order a Cheque Book / Account Statement - Just call Phone Banking and
get your Cheque Book or latest Account Statement delivered at your doorstep.
• Stop Payment - Stop payment of a single cheque or a series of cheques, 24
hours a day. Loan Related queries - Get details of the outstanding loan
amount, enquire about your loan account, request for an interest certificate and
repayment schedule, etc. Just call Phone Banking in your city and dial 4 to
speak to our Phone Banker
• Open a Fixed deposit or Enquire on your Fixed deposits / TDS*# - Talk to
our Phone Banker to easily open a Fixed Deposit over the phone, by simply
authorizing a transfer of funds from your Savings Account.

[30]
• Transfer Funds between accounts*# - You can also transfer money from
one of your accounts to another. Both accounts must be linked to your
Customer ID. You can transfer amounts upto Rs 1 Lac in a single day.
• Pay your bills - Pay your cellular, telephone, electricity and HDFC Bank
Credit Card bills through Phone Banking using Bill Pay, a comprehensive bill
payments solution.
• Report loss of your ATM / Debit Card / Forex Plus Card - If your ATM /
Debit / Forex plus Card are lost, call any Phone Banking number to deactivate
your card(s).
• Learn about all our other products - Get details on HDFC Bank products &
services by talking to our Phone Banker.
• Enquire about latest Interest / Exchange rates - Get latest Interest rates on
Deposits and Foreign Exchange rates by talking to our Phone Banker.
• Request a Demand Draft / Manager's Cheque #** - Call Phone Banking
and get a Demand Draft / Manager's Cheque delivered to your doorstep.
• Demat Related Queries - Get the Account holding details, Transaction
details, ISIN Number of a scrip, Status of Depository Slips, details of Client
Master list (Dividend account, Charges Debit account, PAN etc.) & others.
Call Phone Banking in your city & dial 5 to speak to our Phone Banker.

1.2.3 ICICI BANK PROFILE

INTRODUCTION

ICICI Bank is India's second-largest bank with total assets of Rs. 3,562.28 billion
(US$ 7 billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$
648.8 million) for the nine months ended December 31, 2009. The Bank has a
network of 1,723 branches and about 4,883 ATMs in India and presence in 18
countries. 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 specialized subsidiaries and affiliates in the areas of investment banking, life and
non-life insurance, venture capital and asset management. The Bank currently has

[31]
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'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).

HISTORY

ICICI Bank is India's second-largest bank with total assets of Rs. 3,562.28 billion
(US$ 77 billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$
648.8 million) for the nine months ended December 31, 2009. The Bank has a
network of 1,723 branches and about 4,883 ATMs in India and presence in 18
countries. 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 specialized subsidiaries and affiliates 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'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).

1.2.4 ICICI BANK SERVICES

MOBILE BANKING: Conducting banking operations using the mobile phone has
been fast catching up around the world for its convenience. We have launched mobile
services in India to convenience our customers. You can do your banking operations
sitting anywhere, anytime. It is discreet, personalized and on your phone. Use it when

[32]
at a meeting, in a movie hall, while having your Sunday brunch or at any other place
you cannot usually expect to get the information you want from your bank. It is an
empowering and user-friendly mode of accessing your bank account. To get started,
take a look at the menu on the left and go through our various services.

You can now access the following ICICI Bank services via your mobile phone:

Bank Account Credit Card Demat Loan Other Services

Provisional
Funds Balance Holding
Income Tax Locate Branch
Transfer* Details Enquiry
Certificate

Last Payment Transaction Final Income


Bill Payment+ Locate ATM
Details Status Tax Certificate

Balance Payment Due Phone Banking


Bill Enquiry Reset Letter
Enquiry Date Number

Prepaid
Last 5 Reward Point Rescheduled
ISIN Enquiry Mobile
Transactions Status Letter
Recharge*

Loan
Cheque Book Apply for
Agreement
Request Bank Products
Copy

Status of
Stop Cheque Service
Request Request
Raised

Cheque Status
Enquiry

INSTA BANKING
Insta Banking makes your banking simpler, faster, and more convenient. Through
these 5 great channels - Internet Banking, Mobile Banking, ICICI Bank ATMs,

[33]
Instant Voice Response (IVR) Banking and iMobile - you can do your day today
banking anytime, anywhere.

INTERNET BANKING
ICICI Bank brings convenience and security to your desktop. Now you can check
your account balance, transfer funds, download your account statement, and pay bills
or even book tickets online, from the comfort of your home or in the middle of a busy
day at the office. Explore the power of simpler and smarter Banking whether you are
a Banking, Credit Card, Loan or Demat customer.

ATM BANKING
Bank 24/7 through a widespread network of ICICI Bank ATMs making life easy and
convenient for you. User-friendly graphic screens and easy to follow instructions
available in a choice of local languages, makes ATM Banking with ICICI Bank a
smoother experience. ICICI Bank's widespread network of ATMs makes it easy and
convenient for you to bank 24/7. With over 4,883 + ATMs and 1,626 + branches set
up within India, we ensure that you are never too far from an ICICI Bank ATM. User-
friendly graphic screens and easy to follow instructions in a choice of local languages,
makes ATM Banking with ICICI Bank a smooth experience.

ICICIBank.com also features the easy to access ATM Locator, making it easy for you
to find an ICICI Bank ATM in your neighbourhood.

The ICICI Bank edge

• Cash withdrawal up to Rs. 25,000/- per day from your account (50,000 for
HNI's). Fast Cash option facilitates withdrawal of prefixed amounts; Ultra Fast
Cash allows withdrawal of Rs. 3000/- in one shot
• Check your ledger balance and available balance
• Print out your Mini Statement which displays your last 8 transactions and the
current balance
• Deposit Cash / Cheques at all full function ATMs; cash deposited in ATMs
will be credited to the account on the same day if deposited before the clearing
and cheques are sent for clearing on the next working day
• Transfer funds from one account to another linked account in the same branch.
[34]
• Change the Personal Identification Number (PIN) of your ATM or Debit card
• Pay bills, make donations to temples / trusts, buy internet packs, airtime
recharges for prepaid mobile phones, etc.
• Request for a cheque book from our ATMs; concerned branch dispatches it to
reach you within 10 working days
• No charge is levied on ICICI Bank customers for transacting through ICICI
Bank's ATMs. But, if the minimum quarterly average balance is not
maintained in your savings account, first 6 transactions in the quarter are free
and thereafter, Rs. 25 per transaction is charged.

I MOBILE
ICICI Bank's iMobile is a breakthrough innovation in banking that allows you to
transfer funds, make your credit card payments, pay utility bills, check your balance
and do lots more, for free. So why wait anymore. Just download the iMobile
application on your phone by sending us an SMS and experience iMobile. . ICICI
Bank brings to you the 2nd generation iMobile that has newer features, smarter
interface, quicker navigation and enhanced functionality. ICICI Bank's iMobile is
your answer to banking on the move. The next generation iMobile is your key to a
faster, easier and simplified banking service. Using GPRS enabled on your mobile
handset or through SMS, iMobile helps you to connect directly to your bank account.
This Rich Client Based Application needs to be installed on your mobile thereby
enabling a single click access to your account.

Services available with i Mobile:

• Payment of utility bills and credit card bills


• Transfer of funds to any bank account
• Payment of insurance premium
• Placement of service request such us ordering of cheque books, bank account
statements, cheque status and balance enquiry

Access the following ICICI Bank services via iMobile:

[35]
Bank Account

Funds transfer
• Bill Payment
• Balance Enquiry
• Last 5 transactions
• Cheque Book Request
• Stop Cheque request
• Cheque status Enquiry

Credit Card
• Balance Details
• Last Payment Details
• Payment Due Date
• Reward Point Status

Demat A/c
• Holding Enquiry
• Transaction Status
• Bill Enquiry
• ISIN Enquiry

Loan A/c
• Provisional IT Certificate
• Final IT Certificate
• Reset Letter
• Rescheduled Letter
• Loan Agreement Copy

M Shop
• Prepaid Mobile Recharge

Other Services
• Status of Service Request Raised
• Locate US

[36]
IVR BANKING
Find answers to all your banking needs from your phone. ICICI Bank's Instant Voice
Response (IVR) Banking is free of charge, fully automated and at the same time user-
friendly. Just having an ATM PIN for your account and credit card ensures that your
transactions are secure.
• Saving A/C
• Credit cards
• Demat
• Bonds
• Others

TV BANKING
At ICICI Bank, we've introduced India to an all new way of banking. TV Banking.
This pioneering initiative now enables you to get information regarding loans,
accounts, deposits and a lot more while you're watching that exciting cricket match or
your favorite sitcom.

[37]
CHAPTER – 2

REVIEW OF LITERATURE

[38]
2.1.1 REVIEW OF LITERATURE

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

Polaris Software Lab (2010) In this study Polaris Software Lab Limited (POLS.BO),
a leading Financial Technology Company, launched Intellect(TM) PRIVACY based
on state-of-the-art technology and four patents filed by the Indian Institute of
Technology Madras. IndusInd Bank has become the first bank in India to implement
Intellect(TM) PRIVACY, an online and internet banking security card, for its internet

[39]
banking customers. The technology will protect customers and banks from practically
all kinds of phishing attacks, viz. deceptive e-mail, key/screen logger, brute
force/dictionary attacks and Trojans, etc.Intellect PRIVACY uses multi factor,
dynamic authentication technology providing for authorizing online banking
transactions, in a completely secure platform. Commenting on the innovation,
Professor L S Ganesh, Coordinator of the programmer, said, "At IIT Madras, the
Department of Computer Science and Engineering and the Department of
Management Studies got particularly interested in designing an internet security
technology that is cost efficient and easy to use in a rapidly growing e-commerce
scenario, and transferring it commercially. We chose the Cost-Usability-Security
(CUS) approach to arrive at a solution and Polaris Software created an eminently
usable application for the banking industry. IndusInd Bank, which was looking for
providing greater security for web based transactions, became the first organization to
adopt it." Intellect PRIVACY is a simple plastic card that customers can use to
generate a one-time password (OTP) for carrying out any kind of online banking
transaction including the sign on. Banks can issue booklets containing a desired
number of cards that would last many transactions. The card has no pilferage value by
itself and customers can easily manage its life cycle, including making a request for a
new booklet and reporting loss of cards through online banking.

Azouzi, D. (2009) this paper aims to check if the current and prompt technological
revolution altering the whole world has crucial impacts on the Tunisian banking
sector. Particularly, this study seeks some clues on which we can rely in order to
understand the customers' behavior regarding the adoption of electronic banking. To
achieve this purpose, an empirical research is carried out in Tunisia and it reveals that
panoply of factors is affecting the customers-attitude toward e-banking. For instance;
age, gender and educational qualifications seem to be important and they split up the
group into electronic banking adopters and traditional banking defenders and so, they
have significant influence on the customers' adoption of e-banking. Furthermore, this
study shows that despite the presidential incentives and in spite of being fully aware
of the e-banking's benefits, numerous respondents are still using the conventional
banking. It is worthy to mention that the fear of loss because of transactions errors or
hackers plays a significant role in alienating Tunisian customers from online banking.

[40]
B. Dizon, J.A. (2009) In this study they have founded that while big banks still
conduct the bulk of their business in brick and mortar bank branches, the finance
sector has been increasingly investing on e-banking facilities to offer 24-hour, queue-
free services to their regular clients, whether through ATM machines, mobile phones
or the Internet. "E- Banking's appeal is primarily its convenience. Clients nowadays
want instant results; they don't want to wait anymore," said Francisco M. Caparros,
Jr., senior vice-president of Asia United Bank and president of Banc Net. It's also
turned out to be a more efficient way to process transactions, as e-banking does away
with most of the paperwork that clients have to accomplish. "A lot of people don't like
filling forms," Mr. Caparros added. "Online banking, in particular, relies on user
names and passwords which need to be protected," said Ferdinand G. La Chica, first
vice- president and marketing group head for Sterling Bank of Asia. These anti- theft
barriers are at times supplemented by transaction passwords and "tokens", often a
keychain-like device that is issued to the client and generates random, one-time
passwords to enable him to log into his account online. Last year, the Rural Bank
Association of the Philippines announced that its members are looking to appoint
local merchants like sari-sari stores as third party agents where consumers can open
new accounts and make large payments. Such informal outlets will enable banks to
reach out to small-income businesses and individuals, particularly those in the
agrarian sector, most of who are based outside the city center.

Uppal, R.K. & Chawla, R. (2009) this study highlights customer perceptions
regarding e-banking services. A survey of 1,200 respondents was conducted in
October 2008 in Ludhiana district, Punjab. The respondents were equally divided
among three bank groups namely, public sector, private sector and foreign banks. The
present study investigates the perceptions of the bank customers regarding necessity
of e-banking services, quality of e-banking services, bank frauds, future of e-banking,
preference of bank customers regarding banks, comparative study of banking services
in various bank groups, preferences regarding use of e-channels and problems faced
by e-bank customers. The major finding of this study is that customers of all bank
groups are interested in e-banking services, but at the same time are facing problems
like, inadequate knowledge, poor network, lack of infrastructure, unsuitable location,
misuse of ATM cards and difficulty to open an account. Keeping in mind these
problems faced by bank customers, this paper frames some strategies like customer

[41]
education, seminars/meetings, proper network and infrastructure facilities, online
shopping facilities, proper working and installation of ATM machines, etc., to
enhance e-banking services. Majority of professionals and business class customers as
well as highly educated and less educated customers also feel that e-banking has
improved the quality of customer services in banks.

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

Hsun, K.S. (2008), this study considers the coherence of the financial service sector
and adopts different observational variables to identify innovation capital (training
and R&D density) and process capital (IT system sufficiency). The results show that
human capital has a direct impact on both innovation capital and process capital,
which in turn affect customer capital; while finally, customer capital affects business
performance. In addition, there is a negative relationship between process capital and
customer capital in the financial service sector. It suggests that in the financial service
sector, customer satisfaction relies on a sufficient degree of training and R&D density.
Intemperate investment on the support of e-banking operation systems may not be a
good answer.

Laukkanen, P., Sinkkonen, S. & Laukkanen, T. (2008) The purpose of this paper is
to further the understanding of innovation resistance by dividing internet banking
non-adopters into three groups based on their intentions to use the innovation.
Thereafter, the aim is to identify how the resistance differs in these customer groups.
This study identifies three groups of internet banking non-adopters, namely

[42]
postponers, opponents and rejectors. The data were collected by conducting an
extensive postal survey among the retail banking customers in Finland who had not
adopted internet banking. The measurement development was based on consumer
resistance theory and the earlier literature on internet banking. Principal component
analysis was used to classify the resistance items into five adoption barriers derived
from the earlier literature. Thereafter, analysis of variance was used to analyze the
statistical differences in resistance to internet banking between the three groups.
Significant differences were identified between the groups explored. The resistance of
the rejectors is much more intense and diverse than that of the opponents, while the
postponers show only slight resistance. The results also indicate that psychological
barriers are even higher determinants of resistance than usage and value, which are
constructs related to ease-of-use and usefulness determining acceptance in the
traditional technology acceptance model. Moreover, the findings highlight the role of
self-efficacy in bank customers' risk perceptions to internet banking. This study
provides further understanding of what inhibits internet banking adoption by
comparing three non-adopter groups with respect to their resistance to internet
banking. It also has implications for management in overcoming non-adopters'
resistance to the innovation.

Routray (2008), the study describes that Mobile and Wireless communication devices
are becoming enablers for organizations to conduct business more effectively and
efficiently. One of the most effective applications is mobile banking (m-banking). For
any application to gain recognition technological advancements play a vital role. To
make m-banking application a success bandwidth management is an important issue.
The increased flexibility and mobility feature of wireless ATM and its bandwidth on
demand function is motivating a large number of carriers towards deployment of the
WATM networks. But there are certain issues which are required to be addressed in
WATM. The issues are cost effective planning of network, location management and
handover management. In this paper we have suggested and evaluated a technological
framework for the m-banking application using wireless ATM which optimizes the
bandwidth usage and provides an effective handover management. Simulation results
show that the resultant framework is very effective in handling the bandwidth and the
handover issue in wireless ATM and provides an effective WATM framework model.

[43]
Malhotra, P. & Singh, B. (2007) stated about this research tells us that the larger
banks, banks with younger age, private ownership, higher expenses for fixed assets,
higher deposits and lower branch intensity evidence a higher probability of adoption
of this new technology. Banks with lower market share also see the Internet banking
technology as a means to increase the market share by attracting more and more
customers through this new channel of delivery. Further, the adoption of Internet
banking by other banks increases the probability that a decision to adopt will be made.
An understanding of the factors affecting this choice is essential both for economists
studying the determinants of growth and for the creators and producers of such
technologies. From this perspective, understanding the factors determining the
adoption of technology becomes highly relevant from the policy point of view.
Moreover, the studies on the adoption of financial innovations are related to
developed markets, e.g. US or European banking markets. Hence, this paper
contributes to the empirical literature on diffusion of financial innovations,
particularly Internet banking, in a developing country.

Shah & Braganza (2007), this survey indicates the Critical Success Factors in e-
banking and the author suggest in this article that the organizational factors, which are
critical to the success of e-banking, are investigated. Different pieces of literature
report different factors as key to success and generally based on subjective, perceptual
data. A synthesis of existing literature is a basis for survey questions. The data was
collected from UK based financial sector organizations who are offering their services
on electronic channels, using postal questionnaires. The top factors found to be most
critical for the success in e-banking are: quick responsive products/services,
organizational flexibility, services expansion, systems integration and enhanced
customer service. An important lesson from this research is that organizations need to
view the e-banking initiative as a business critical area rather than just a technical
issue. They need to give attention to internal integration, which may include channels,
technology and business process integration, and improving the overall services to
their customers.

Awamleh (2006) This study analyses the internet banking channels and service
preferences of educated banking consumers in the UAE and examines the factors
influencing the intention to adopt or to continue the use of internet banking among

[44]
both users and non users of internet banking. It is shown that although the banking
sector in the UAE is a regional leader, internet banking in the UAE is yet to be
properly utilized as a real added value tool to improve customer relationship and to
attain cost advantages. The Technology Acceptance Model (TAM) was used to
identify factors influencing the intention to adopt and continued use of internet
banking customers. Data was collected from internet banking users and potential users
in the United Arab Emirates and factor analyses and multiple regression analyses
were conducted to examine the data. Relative usefulness is introduced as one of the
factors and is defined as the degree to which a new technology is better than existing
ones. There is a significant difference between users and non-users on six of the seven
factors identified. Further, it was revealed that relative usefulness, perceived risk,
computer efficacy and image had a significant impact on continued usage of internet
banking for IB Users, while relative usefulness and result demonstrability were the
only ones significant for Non-users of internet banking. The effects of age, gender,
income, and e-commerce users also explored. Result demonstrability is significant for
all categories of non-users except for those with income below AED 7,000.
Implications of results were discussed, and future research directions outlined.

Bauer, Malik & Falk (2006), this article reviews the measuring the quality of E-
Banking portals. In the internet economy, the business model of web portals has
spread rapidly over the last few years. Despite this, there have been very few
scholarly investigations into the services and characteristics that transform a web site
into a portal as well as into the dimensions that determine the customer’s evaluation
of the portal’s service quality. Based on an empirical study in the field of e-banking
the authors validate a measurement model for the construct of web portal quality
based on the following dimensions: security and trust, basic services quality, cross-
buying services quality, added value, transaction support and responsiveness.
Findings – The identified dimensions can reasonably be classified into three service
categories: core services, additional services, and problem-solving services.
Originality/value – The knowledge of these dimensions as major determinants of
consumer’s quality perception in the internet provides banks a promising starting
point for establishing an effective quality management for their e-businesses.

[45]
Kamiya (2006) this articles show that Indian banks are trying to make your life
easier. Not just bill payment, you can make investments, shop or buy tickets and plan
a holiday at your fingertips. In fact, sources from ICICI Bank tell us, "Our Internet
banking base has been growing at an exponential pace over the last few years.
Currently around 78 per cent of the bank's customer base is registered for Internet
banking." To get started, all you need is a computer with a modem or other dial-up
device, a checking account with a bank that offers online service and the patience to
complete about a one-page application--which can usually be done online. You can
avail the following services: Bill payment Services, Fund Transfer, Credit Card,
Internet shopping, and Investment though Internet etc. Due to the Internet banking the
life of an individual becomes easy and raises the standard of life of the humans.

Maumbe (2006) This study depicts that most banks throughout the world, ICT have
become the back bone of financial service delivery and finance networks have shifted
from paper-based to the digital mode. However, digital financial service delivery
confronts a number of challenges regarding its efficacy in closing the “financial
divide” affecting the poor. Although e-banking is considered an inexpensive way to
reach clients, its accessibility is hindered by a number of factors including poor
Internet penetration, lack of e-banking awareness and customer inflexibility to new
technology. In developing countries most of which are characterized by extreme
poverty and poor infrastructure, universal Internet-based service provision remains
indefinable. Further, the author argues that developing nations need to improve
educational standards and computer literacy prior to broad-based adoption and
constructive use of Internet services. As result, the poor and unemployed remain
disadvantaged in terms of access to rural Internet based services. Real access to “well-
functioning” and “efficient financial services” has the potential to empower poor
communities.

Veneeva (2006) this article describes that world is changing at a staggering rate and
technology is considered to be the key driver for these changes around us. Many
activities are handled electronically due the acceptance of information technology at
home as well as at workplace. Internet can be seen as a truly global phenomenon that
has made time and distance irrelevant to many transactions. The evolution of
electronic banking started from the use of automatic teller machines (ATM) and has

[46]
passed through telephone banking, direct bill payment, electronic fund transfer and
the revolutionary online banking (Alter, 2002). The future of electronic banking
according to some is the acceptance of WAP enabled banking and interactive-TV
banking (Petrus & Nelson, 2006). But it has been forecasted that among all the
categories, online banking is the future of electronic financial transaction. The rise in
the e-commerce and the use of internet in its facilitation along with the enhanced
online security of transactions and sensitive information has been the core reasons for
the penetration of online banking in everyday life.

Anthony (2004), this article discusses the importance of usability within the E-
Banking sector and identifies common usability problems and ways to resolve them.
It is widely recognised that online banking provides more revenue per customer and
costs less per transaction than any other channel, including phone banking.
Encouraging news from Forrester Research states that by 2007 the number of
Europeans banking online will double to 130 million. Based on the principles of
Human Computer Interaction (HCI), web usability has become a recognised success
factor for all e-business, including online banking. Users most enjoy those sites that
provide clear information, easy navigation and an engaging customer experience. Yet
people will naturally gravitate to the ones which are easiest to use and offer the best
service. Banks aiming to profit the most from the increase in online banking volumes
should consider the usability and accessibility of all aspects of their site to welcome
them.

Asghar (2004), the study depicts that online banking and the web channel are here to
stay. Financial services rely on multiple distribution channels and e-banking
represents the channel of the future. Success stories around e-banking have taken
shape through a mix of innovation and experience. The financial services sector needs
to apply both these factors to their advantage to produce the desired results. Win-win
implementation of e-banking not only requires high Internet penetration rates and
stable infrastructures, but more importantly, for companies to realize the powerful
revenue opportunity of this business arm vis-à-vis the traditional brick and mortar
system of operation. Therefore, it is imperative that all e-banking implementations are
seamlessly integrated with the core 'traditional' services thereby making the online
experience truly holistic for the customer.

[47]
Picado, Gonzalez & Eckelman (2004), this study investigated the customer
satisfaction using QFD and a research on service quality and customer satisfaction has
become significant in the service industries. This study develops a case study that
considers both external and internal service management issues and subsequent
service innovations based on the framework of quality function deployment (QFD).
The application of the customer window quadrant (CWQ) and the action plan matrix
in the analysis of customer and service elements constitute a different approach for
QFD. Some benefits and disadvantages of the QFD process are discussed as
compared to extant service quality and customer paradigms. Finally, suggestions and
directions are offered for future applications, with particular interest in the e-bank
service management issues.

Nitsure, R.R. (2003), this article indicates the E-banking Challenges and
opportunities lies in the banking industry. E-banking has the potential to transform the
banking business as it significantly lowers transaction and delivery costs. This paper
discusses some of the problems developing countries, which have a low penetration of
information and telecommunication technology, face in realizing the advantages of e-
banking initiatives. Major concerns such as the 'digital divide' between the rich and
poor, the different operational environments for public and private sector banks,
problems of security and authentication, management and regulation, and inadequate
financing of small and medium scale enterprises (SMEs) are highlighted.

[48]
CHAPTER – 3

NEED, OBJECTIVE, SCOPE &


METHODOLOGY

[49]
3.1.1 NEED OF THE STUDY

• To determining growth direction of online banking service.


• Promoting E-banking services in banking industry.
• Customer perception will be taken into consideration about the internet
banking.

3.1.2 OBJECTIVES

• To study about the factors that affects the customer perception towards e-
banking of HDFC and ICICI bank.
• To know about the current and future prospects of E-Banking to the
customers.
• To find out the major problems faced by the customers while using e-banking
services.

3.1.3 HYPOTHESIS

EASE OF USE
Ho: Ease of use does not influence the use of E Banking services.
H1: Ease of use does influence the use of E Banking services.

DIRECT ACCESS
Ho: Direct Access does not influence the use of E Banking services.
H1: Direct Access does influence the use of E Banking services.

FRIENDS/RELATIVES
Ho: Friends/Relatives do not influence the use of E Banking services.
H1: Friends/Relatives do influence the use of E Banking services.

[50]
3.1.4 SCOPE OF THE STUDY

• Area is restricted to only JALANDHAR because due to the time constraint


and not able to visit all the branches in other cities or states.
• All the classes of the customers were taken into consideration.
• This study was covered E-Banking service sector.
• This is a realistic source directly collected from the customers of Bank.

3.1.5 RESEARCH METHODOLOGY

Research is defined as human activity based on intellectual application in the


investigation of matter. The primary purpose for applied research is discovering,
interpreting, and the development of methods and systems for the advancement of
human knowledge on a wide variety of scientific matters of our world and the
universe.

The term research is also used to describe an entire collection of information about a
particular subject.

Methodology is the method followed while conducting the study on a particular


project. Through this methodology a systematic study is conducted on the basis of
which the basis of a report is produced.

It is a written game plan for conducting Research. Research methodology has many
dimensions. It includes not only the research methods but also considers the logic
behind the methods used in the context of the study and explains why only a
particular method or technique has been used. It also helps to understand the
assumptions underlying various techniques and by which they can decide that certain
techniques will be applicable to certain problems and other will not. Therefore in
order to solve a research problem, it is necessary to design a research methodology for
the problem as the some may differ from problem to problem. The methodology
adopted for studying the objectives was surveying the in-house customers of these
two banks in the city of Jalandhar.

[51]
NATURE

The methodology adopted to achieve the project objective involved descriptive


research method. The information required for fulfilling the objective of study was
collected from various primary and secondary sources.

TYPE OF RESEARCH

This study is DESCRIPTIVE in nature. It helps in breaking vague problem into


smaller and precise problem and emphasizes on discovering of new ideas and
insights.

RESEARCH DESIGN

Research design constitutes the blue print for the collection, measurement and
analysis of data. The present study seeks to identify the extent of preferences of E-
Banking over traditional banking among service class. The research design is
descriptive in nature. The research has been conducted on customers of HDFC and
ICICI Bank within JALANDHAR. For the selection of the sample, convenient
sampling method was adopted and an attempt has been made to include all the age
groups and gender of every class.

RESEARCH INSTRUMENT

The instrument used for gathering data was questionnaire. To get further insight in to
the research problem, interview regarding their buying practices too was made. This
was done to crosscheck the authenticity of the data provided. To supplement the
primary data and to facilitate the process of drawing inference, secondary data was
collected from published sources like magazines, journals, newspapers etc.

DATA COLLECTION

Keeping in view the nature of requirements of the study to collect all the relevant
information regarding the extent of awareness of the customers using E-banking

[52]
facilities offered by ICICI and HDFC bank, direct personal interview method with
structured questionnaire was adopted for the collection of primary data. Secondary
data has been collected through the various internet sites by surfing on Internet and
from the records available with the bank.

Sources of data: Following are the methods of sources of data:


SECONDARY DATA:
• Articles on E-Banking taken from journals, magazines published from time to
time.
• Through internet.

PRIMARY DATA:
Questionnaire was used to collect primary data from respondents. The questionnaire
was structured type and contained questions relating to different dimensions of e-
banking preferences among service class such as level of usage, factors influencing
the usage of e-banking services, benefits accruing to the users of e-banking services,
problems encountered. An attempt was also made to elicit reasons for its non-usage.
The questions included in the questionnaire were open-ended, dichotomous and
offering multiple choices.

SAMPLE DESIGN AND SIZE

In this research project Descriptive research design is used. Judgement and


Convenience sampling method will be used to get the information about online
banking. This method is used because we are interested in exploring gender, age, or
occupation disparities in terms of online banking in the population. For conducting
this research, a structured questionnaire is prepared and sample of 150 customers is
taken from ICICI and HDFC bank.

SAMPLING SIZE

It indicates the numbers of people to be surveyed. Though large samples give more
reliable results than small samples but due to constraint of time and money, the

[53]
sample size was restricted to 150 respondents. The respondents belong to different
income group and profession.

SAMPLING UNIT

It defines the target population that will be sampled i.e. it answers who is to be
surveyed. In this study, the sampling unit is the people of ICICI and HDFC,
Jalandhar, Punjab.

TOOLS AND TECHNIQUES OF ANALYSIS:

The data so collected will be analyzed through the application of statistical


techniques, such as bar graphs and pie charts.

Data formulation: SPSS


Data Analysis tools: CHI SQUARE TEST

[54]
CHAPTER – 4

DATA ANALYSIS & INTERPETATION


• E-BANKING WITH RESPECT TO
CUSTOMER PROSPECTIVE

• INTERPRETATION OF CHI SQUARE


TEST

[55]
• GENDER

GENDER TOTAL

Male 114

Female 36

Total 150

gender

female
24%

male
76%

Interpretation: The result shows that majority of respondents i.e. 76% are males who
are using the E-banking services and 24% are the female who are using E-banking
services. Female are not using this service because they have less knowledge about
the internet and they trust face to face interaction more. So it shows that E-banking is
more famous among male.

[56]
• AGE

AGE TOTAL NO.


Below 20 34
21-30 40
31-40 32
41-50 27
Above 50 17
Total 150

Age

Above 50
11% Below 20
23%
41-50
18%

21-30
31-40 27%
21%

Interpretation: The result shows that majority of respondents i.e. 27% falls under the
category of 21-30 years and 23% falls under below 20years it shows that E-banking is
mainly famous among youngsters as they are the major users of E-banking and least
comes under above 50years.

[57]
• OCCUPATION

OCCUPATION TOTAL NO.


Government 37
Private 40
Business 48
Others 25
TOTAL 150

occupation

other
17%
government
24%

business
32% private
27%

Interpretation: The result shows that majority of respondents that are using E-
banking are Businessman i.e. 32% they are using E-banking services because it results
in time saving. And 27% respondents are working in private sector and 24%
respondents are working in government organizations and 17% are others which
include students and housewives they are using E-banking because it saves time and
students they have complete knowledge of internet.

[58]
• INCOME

INCOME TOTAL NO.

Below 10,000 23

10,000-25,000 48

25,000-50,000 45

More than 50,000 34

TOTAL 150

income
below 10,000
more than 50,000 15%
23%

10,000-25,000
32%
25,000-50,000
30%

Interpretation: The result of this study shows that 32% of the respondents who are
using E-banking fall under the income category of 10,000-25,000 and 30% falls under
the income category of 25,000 to 50,000 and 23% % falls under the income category
of more than 50,000 and 15% % falls under the income category of below 10,000.

[59]
Q1) IN WHICH BANK DO YOU YOU’RE YOUR ACCOUNT?

Options No. of Respondents


ICICI 24
HDFC 39
BOTH 87

Interpretation: According to this study majority of respondents i.e. 58% have their
accounts in both the banks HDFC and ICICI bank and 16% respondents have their
account in ICICI Bank and 26% have their account in HDFC bank so it means a large
no. of respondents have experience of both the banks.

Q2: WHILE OPENING UP THE ACCOUNT, WERE YOU AWARE OF E-


BANKING SERVICES PROVIDED BY YOUR BANK?

Options No. of Respondents


Yes 109
No 41

[60]
Interpretation: According to this survey majority of respondents i.e.73% were
aware about E-banking services provided by their bank and 27% of respondents were
not aware about the E-banking services provided by their bank at the time of opening
up of their account because of lack of awareness and some are using banking services
from last so many years at that time bank was not offering E-banking service so they
were not aware at that time but now they are aware.

Q3) IF ANSWER TO QUESTION NO.2 IS YES, WHICH OF THE FOLLOWING


E-BANKING SERVICES IS YOU AWARE OF?

Options No. of Respondents


Internet Banking 49
Mobile Banking 97
Phone Banking 67
One Line Banking 12
Debit Card 102
Others 21

[61]
Interpretation: According to this study almost every customer is using more one E-
banking service and Debit Card is used by almost 95% of respondents and mobile
banking is used but 89% of respondents and 61% respondents are using phone
banking and only 1% are using one line banking this shows the trend that how
customers are using E-banking and among all the E-banking products debit cards are
mostly used by respondents because they are easy to use and do not require technical
or computer knowledge.

Q4) ARE YOU AVAILING E-BANKING SERVICES?


Options No. of Respondents
Yes 96
No 13

[62]
Interpretation: The results show that 88% respondents who are aware of E-banking
they are availing E-banking services and 12% are not availing E-banking services yet
they are aware of E-banking the reason is that they still have faith in traditional
banking.

Q5) HOW CONVENIENT YOU FIND ACCESSING YOUR BANK ONLINE?

Options No. of Respondents


Easy 34
Normal 53
Difficult 22

Interpretation: The results shows that 49% respondents found it normal when they
access their bank online and 31% respondents found it easy in accessing their bank
online and 20% respondents found it difficult to access their bank online because of
lack of internet knowledge and connectivity.

[63]
Q6) IF ANSWER TO QUESTION NO.4 IS YES, HOW FREQUENTLY DO
YOU USE EACH OF THE FOLLOWING SERVICES?

Once in
Once in Once in Once in Infrequen
Factors a
a day a week a month tly
fortnight
A Internet Banking 55 26 11 10 7
B Mobile Banking 45 31 15 10 8
C Phone Banking 44 31 22 9 3
D One Line Banking 31 23 21 16 18
E Debit Card 51 42 9 4 3

60 55

50

40

30 26

20
11 10
10 7

0
A

once in a day once in a week once in a fortnight once in a month infrequently

Interpretation: The results shows majority of the respondents use internet banking,
as. 55 respondents are like to use internet banking because according to them it’s easy
to use and easily accessible. They can use this any time anywhere. So it’s good for
them to use this facility of E- banking they are satisfied with this facility of E-
banking.

[64]
50 45

40
31
30

20 15
10
8
10

0
B

once in a day once in a week once in a fortnight


once in a month infrequently

Interpretation: The results shows majority of the respondents use mobile banking,
as. 45 respondents are like to use mobile banking because according to them it’s easy
to use and easily accessible. They can use this any time anywhere. So it’s good for
them to use this facility of E- banking they are satisfied with this facility of E-
banking. They also have the same reasons because its saves their time period but the
usage of mobile banking is less as compare to internet banking. Because in the time of
technology the most respondents are like to use the facility of internet instead of using
any other.

[65]
Interpretation: The results shows majority of the respondents use phone banking, as.
44 respondents are like to use phone banking because according to them it’s easy to
use and easily accessible. They can use this any time anywhere. So it’s good for them
to use this facility of E- banking they are satisfied with this facility of E-banking. As
phone banking is also used by less people as compare to other respondents who are
using internet banking as phone banking is also same as mobile banking so the
respondents are mainly used this as mobile banking.

35
31
30

25 23
21
20 18
16
15

10

0
D

once in a day once in a week once in a fortnight once in a month infrequently

Interpretation: The results shows majority of the respondents use one line banking,
as. 31 respondents are like to use one line banking but one line banking is used by
very less respondents because they are not fully aware about this facility provided by
banks so the main focus is on internet banking, mobile banking, phone banking etc.
So they don’t have any knowledge about the one line banking.

[66]
60
51
50
42
40

30

20

9
10
4 3
0
E

once in a day once in a week once in a fortnight once in a month infrequently

Interpretation: The results shows majority of the respondents use debit card, as. 51
respondents are like to use debit card because according to them it’s easy to use and
easily accessible. They can use this any time anywhere. Most of the respondents are
used this facility after the internet banking because it’s the main facility which is used
by the customers and they really like this facility.

Q7) TICK THE FEATURE WHICH YOU LIKE WHILE CONSIDERING


HDFC AND ICICI BANK?

Features HDFC ICICI

A Net Banking 12 8
B Credit Card Online 9 8
C One view 3 1
D Insta Alerts 5 2
E Mobile Banking 10 10
F ATM 10 9
G Phone banking 4 5
H I Mobile 1 3
I TV Banking 1 1
J IVR Banking 3 2
K I-Zone 1 1

[67]
Net Banking

HDFC

12 ICICI

Interpretation: As per the survey, 12 respondents liked the Net Banking services
provided by HDFC bank, whereas in case of ICICI bank 8 respondents liked it. So, we
can say that HDFC bank provides better Net Banking services as compared to ICICI
bank.

Credit Card Online

8
HDFC
9 ICICI

Interpretation: According to the survey conducted there are total 17 persons who use
E-Banking because of the Credit Card online feature. And out of total respondents, 9
rated HDFC’s Credit Card online service best and 8 rated ICICI’s best.

[68]
ONE VIEW

HDFC
ICICI

Interpretation: Out of total 4 respondents who liked One-View feature of E-banking


the most, 3 liked HDFC and only 1 liked the One-View feature provided by ICICI
bank.

Interpretation: As per the survey conducted, 5 respondents said that they like the
INSTA ALERTS provided by HDFC bank, whereas only 2 think that ICICI provide
better INSTA ALERTS.

[69]
MOBILE BANKING

10 10 HDFC
ICICI

Interpretation: Mobile banking is one of the vital features of E-Banking. As per the
survey, 20 respondents rated this feature for which they use E-Banking services. And
out of that 20 respondents, half think that HDFC provides this services better and half
think that ICICI provides better. So, we can say that both the banks are providing this
feature of E-Banking with almost same quality.

ATM

10 HDFC
ICICI

Interpretation: Out of the total respondents 19 think that they use E-Banking
services because of its ATM feature. And, out of those 19 respondents, 10 liked the
services provided by HDFC bank whereas 9 liked it by ICICI bank.

[70]
PHONE BANKING

4
HDFC
5 ICICI

Interpretation: As per the survey, 4 people liked the phone banking feature of HDFC
bank the most, where as this number is 5 in case of ICICI bank.

I-MOBILE

HDFC
ICICI

Interpretation: According to the survey, 1 respondent liked the I-MOBILE feature


the most in case of HDFC bank, and 3 in case of ICICI bank.

[71]
TV BANKING

1 1 HDFC
ICICI

Interpretation: TV Banking feature is not very common. Only 2 respondents out of


the total respondents think that this service feature is crucial for E-Banking. And, out
of those 2, one rated HDFC the best and the other rated the ICICI the better provider.

I-ZONE

1 1 HDFC

ICICI

Interpretation: As per the survey conducted, 2 respondents think that they use E-
Banking because of its I-Zone feature. Out of those 2, one rated HDFC the best and
one rated ICICI the best.

[72]
Q8) WHICH OF THE FOLLOWING FACTORS INFLUENCE YOU THE
MOST TO USE E-BANKING SERVICES?

More than Less than


Factors Strongly Average Not at all
average Average

A All time availability 55 31 13 8 2


B Ease of use 49 27 17 11 5
C Nearness 45 33 25 4 2
D Security 43 25 19 14 8
E Direct access 49 31 19 8 2
F Friends/ Relatives 51 27 17 10 4
G Status symbol 57 31 13 6 2

60

50

40
strongly
more than average
30
average
less than average
20
not at all

10

0
A

Interpretation: The result shows that according to 50% respondents all time
availability strongly influence them to use E-banking and according to 29%
respondents all time availability influence them more than average to use E-banking
and according to 7% respondents all time availability influence them less than average
to use E-banking the reason of variation in views of respondents is the because of
their preferences and perception.
[73]
60

49
50

40

30 27

20 17
11
10 5

0
B

strongly more than average average less than average not at all

Interpretation: The results shows that according to 45% respondents ease of use
strongly influence them to use E-banking and according to 25% respondents ease of
use influence them more than average to use E-banking and according to 5%
respondents ease of use influence them not at all to use E-banking

50
45
45
40
35 32
30
25
25
20
15
10
4 3
5
0
C

strongly more than average average less than average not at all

Interpretation: According to 41% respondents nearness strongly influence them to


use E-banking and according to 23% respondents nearness influence them average to
use E-banking and according to 4% respondents nearness influence them less than
average to use E-banking.

[74]
50
45 43

40
35
30
25
25
19
20
14
15
10 8

5
0
D

strongly more than average average less than average not at all

Interpretation: According to 39% respondents security strongly influence them to


use E-banking and according to 23% respondents security influence them more than
average to use E-banking and according to 13% respondents security influence them
less than average to use E-banking.

60

50

40
strongly
more than average
30
average
less than average
20
not at all

10

0
E

Interpretation: The result shows that according to 45% respondents direct access
strongly influence them to use E-banking and according to 28% respondents direct
access influence them more than average to use E-banking and according to 7%
respondents direct access influence them less than average to use E-banking

[75]
60
51
50

40

30 27

20 17

10
10
4

0
F

strongly more than average average less than average not at all

Interpretation: The result shows that according to 47% respondents their


friends/relatives strongly influence them to use E-banking and according to 25%
respondents their friends/relatives influence them more than average to use E-banking
and according to 9% respondents their friends/relatives influence them less than
average to use E-banking.

60 57

50

40
31
30

20
13
10 6
2
0
G

strongly more than average average less than average not at all

Interpretation: The result shows that according to 52% respondent’s status symbol
strongly influence them to use E-banking because now a days a person who is using

[76]
E-banking services is considered as a high profile person and according to 28%
respondents status symbol influence them more than average to use E-banking
services.

Q9) TO WHAT EXTENT IS YOU SATISFIED WITH YOUR BANKS’ E-


BANKING SERVICES?

E- banking services TOTAL NO.

Highly satisfied (1) 56


satisfied (2) 31
Neutral (3) 4
Dissatisfied (4) 15
Highly dissatisfied (5) 3
TOTAL 109

highly
satisfied no. of respondants
3%

dissatisfied
neutral 14%
4%

highly satisfied
51%
satisfied
28%

Interpretation: The most of the customers are really liked the facilities provided by
banks as they strongly agree that the facilities are good for them so they like to avail

[77]
the E-banking services provided by the different banks and the result shows that 48%
respondents are highly satisfied with the e-banking services provided by their bank
and 28% respondents are satisfied with the e-banking services provided by their bank
and 14% respondents are dissatisfied with the e-banking services provided by their
bank.

Respondents from HDFC and ICICI

Banks No. of Respondents


HDFC 39
ICICI 24

banks

ICICI
38%
HDFC
62%

Interpretation: In this we can easily say that out of the 150 respondents there are 39
respondents who are from HDFC and 24 are from ICICI. From this we can easily
understand that which bank provides good services to their customers and who are
satisfied their customers.

HDFC

E- banking services TOTAL NO.

[78]
Highly satisfied 1 19

satisfied 2 11

Neutral 3 2

Dissatisfied 4 6

Highly dissatisfied 5 1

TOTAL 39

20 19
18
16
14
12 11
10
8
6
6
4
2
2 1
0
hdfc

highly satisfied satisfied neutral dissatisfied highly dissatisfied

Interpretation: From this we can analysis that most of the respondents that is 19
respondents are satisfied with the services provided by the bank. That they like the E-
banking services provided by the by HDFC bank and the bank also easily satisfied
their customers.

ICICI

E- banking services TOTAL NO.

[79]
Highly satisfied 1 11

satisfied 2 8

Neutral 3 1

Dissatisfied 4 2

Highly dissatisfied 5 2

TOTAL 24

12 11

10

8
8

2 2
2 1

0
icici

highly satisfied satisfied neutral dissatisfied highly dissatisfied

Interpretation: From this we can analysis that most of the respondents that is 11
respondents are satisfied with the services provided by the bank. That they like the E-
banking services provided by the by ICICI bank and the bank also easily satisfied
their customers.

Q10) WHICH OF THE FOLLOWING BENEFITS ACCRUE TO YOU, WHILE


USING E-BANKING SERVICES?

[80]
Benefits TOTAL NO.

Time Saving 56
Inexpensive 31
Easy Processing 14
Easy Fund Transfer 8
Total 109

Easy fund
transfer Respondents
7%
Easy processing
13%

Time saving
51%
Inexpensive
29%

Interpretation: Most of the respondents think that the major benefit from E-banking
services is time saving facility. Because the major problem which the respondents
faced is time problem so E-banking eases their lives and save their time so they like
this facility because of this facility.

HDFC

Benefits TOTAL NO.

Time Saving 15

[81]
Inexpensive 11

Easy Processing 8

Easy Fund Transfer 5

Total 39

16 15

14

12 11

10
8
8

6 5

0
hdfc

time saving inexpensive easy processing easy fund transfer

Interpretation: We can analysis that the customers of HDFC really satisfied with the
time saving facility of E-banking. They thought that it’s a good for them to use the E-
banking services because it’s save their time and they can easily access the service.

ICICI

Benefits TOTAL NO.

Time Saving 12

Inexpensive 8

[82]
Easy Processing 2

Easy Fund Transfer 2

Total 24

14
12
12

10
8
8

4
2 2
2

0
icici

time saving inexpensive easy processing easy fund transfer

Interpretation: We can easily understand that there is not at all the biggest difference
between the respondents of HDFC and ICICI they both use the E-banking services
because it’s save their time and it’s easily to handle.

Q11) KINDLY RATE THE FOLLOWING REASONS ENLISTED FOR NOT


USING THE E-BANKING SERVICES?

More Less Least


Highly Averag
Factors than than importan
important e
average average t
A No need( Satisfied with 10 4 12 3 12
traditional banking)
B It seems like a 5 0 9 16 11
botheration
C Insecurity 10 7 12 4 8
D No access to 9 3 9 8 12
internet/mobile

[83]
E Lack of operational 8 3 7 7 16
knowledge
F Hidden costs 12 3 9 8 9

45
40
No. of Respondents

35 Least important
30 Less than average
25
Average
20
15 More than average
10 Highly important
5
0
Satisfied with

Insecurity

operational
knowledge
Lack of
traditional
No need(

Factors

Interpretation: From the non users, an attempt was made to elicit the reasons for its
non usage. As shown in the table, satisfaction with traditional banking was considered
as prime de-motivating factor, followed closely by the fear of insecurity, then ‘hidden
cost’ factor, which suggested their resistance to change, which to some extent can be
countered by aggressive advertisement and utilizing other modes of awareness
dissemination as well.

Q12) RATE THE FOLLOWING STATEMENTS WITH REGARDS TO


POTENTIAL PROBLEMS IDENTIFIED IN E-BANKING SERVICES?

Highly
Avera Ignorab
Factors considere Major Minor
ge le
d
A Time consuming 18 14 9 35 33
B Security Issue 8 20 29 30 22
C ATM out of order 9 18 14 33 35
D Internet Connectivity 18 25 13 29 24

[84]
Issue
E Password forgotten 22 35 9 18 25
F Card 28 16 35 21 9
misplaced/Misused
G Difficulty in Claiming 35 21 29 16 8
False transactions

40
35
35 33

30

25

20 18
14
15
9
10

0
A

highly considered major average minor ignorable

Interpretation: According to this result 32% respondent’s time as a minor identified


potential problems in E-banking services and 30% respondents consider time as a
ignorable identified potential problems in E-banking services but 17% respondents
highly consider time as a identified potential problems in E-banking services.

[85]
35
29 30
30

25 22
20
20

15

10 8

0
B

highly considered major average minor ignorable

Interpretation: The result shows 28% respondents highly consider security issue as a
minor identified potential problems in E-banking services and 18% respondents
consider security issue as major identified potential problems in E-banking services.

40
35
35 33

30

25

20 18
14
15
9
10

0
C

highly considered major average minor ignorable

Interpretation: The result shows that 32% respondents consider ATM out of order
as a ignorable identified potential problems in E-banking services and 30%
respondents consider ATM out of order as a minor identified potential problems in E-
banking services and 8% respondents consider ATM out of order as a highly
considered identified potential problems in E-banking services.

[86]
35
29
30
25 24
25

20 18

15 13

10

0
D

highly considered major average minor ignorable

Interpretation: The result shows that 27% respondents consider internet connectivity
as minor identified potential problems in E-banking services and 17% respondents
consider internet connectivity as highly considered identified potential problems in E-
banking service.

40

35

30

25 highly considered
major
20
average
15
minor
10 ignorable

0
E

Interpretation: The result shows that 32% respondents consider password forgotten
as a major identified potential problems in E-banking services and 8% respondents
consider password forgotten as an average identified potential problems in E-banking
services.

[87]
40
35
35
30 28

25
21
20
16
15
9
10
5

0
F

highly considered major average minor ignorable

Interpretation: The result shows that 32% respondents consider card


misplaced/misused as an average identified potential problems in E-banking services
and 8% respondents consider card misplaced/misused as an ignorable identified
potential problems in E-banking services.

40
35
35
29
30

25
21
20
16
15

10 8

0
G

highly considered major average minor ignorable

Interpretation: The result shows that 27% respondents consider difficulty in


claiming false statement as an average identified potential problems in E-banking
services and 15% respondents consider difficulty in claiming false statement as a
minor identified potential problems in E-banking services.

[88]
Q13) IF YOU USE, RATE YOUR ONLINE BANKING FACILITY ON THE
FOLLOWING CRITERIA USING A SCALE OF 1 TO 5 (WHERE 1 IS VERY
SATISFIED AND 5 IS VERY DISSATISFIED)

Factors 1 2 3 4 5
A Quality of 26 36 22 17 8
information
B Quality and Quantity 14 32 46 11 6
of content
C Security of personal 35 28 18 12 16
information

Rating for quality of TOTAL NO.


information
Very satisfied 1 26

satisfied 2 36

Average 3 22

Dissatisfied 4 17

Very dissatisfied 5 8

TOTAL 109

[89]
40

35

30

25 very satisfied
satisfied
20
average
15 dissatisfied

10 very dissatisfied

0
rating for quality of information

Interpretation: From above its clear that majority of our respondents were satisfied
and very satisfied with the quality of information provided at online banking. This
result show that the customers are satisfied with the information quality provided by
the bank, quality of information play very important role if the customer understand
what is provided then he can demand it more otherwise not.

Rating for quality and quantity of content TOTAL NO.

Very satisfied 1 14
satisfied 2 32
Average 3 46
Dissatisfied 4 11
Very dissatisfied 5 6
TOTAL 109

[90]
50 46
45
40
35 32
30
25
20
14
15 11
10 6
5
0
rating for quality and quantity of content

very satisfied satisfied average dissatisfied very dissatisfied

Interpretation: From above its clear that majority of our respondents get average and
satisfied with the quality and quantity of content provided at online banking. Quantity
of information also play vital role in online banking because the customer of bank
want simple information and as per their requirement only then he get satisfied.

[91]
Rating for security of personal information TOTAL NO.

Very satisfied 1 35

satisfied 2 28

Average 3 18

Dissatisfied 4 12

Very dissatisfied 5 16

TOTAL 109

40
35
35

30 28

25

20 18
16
15 12
10

0
rating for security of personal information

very satisfied satisfied average dissatisfied very dissatisfied

Interpretation: From above its clear that majority of our respondents were very
satisfied and satisfied with the security of personal information provided at online
banking. This result shows that the bank customers believe that their personal
information is secure while using online banking facility provided by the banks.

Q14) If answer to question no.2 is NO, even if you are not aware about E
Banking services then would you like to have information about this or would
you like to get information from the bank itself?

GET INFORMATION ABOUT E-BANKING TOTAL


Yes 81

[92]
No 69

TOTAL 150

information about the e-banking services

No Yes
46% 54%

Interpretation: The result shows 54% respondents will like to get information from
the bank itself and 46% respondents will not like to get information from the bank
itself as E-banking services is provided by every bank so majority of respondents
wants to get information about E-banking.

Q15) WOULD YOU LIKE TO USE E BANKING SERVICES AFTER


GETTING THE REQUIRED KNOWLEDGE ABOUT THE SERVICES
OFFERED BY THE BANKS?

GET INFORMATION ABOUT E-BANKING TOTAL

Yes 89

No 61

TOTAL 150

[93]
Use the E-banking services

No
41%
Yes
59%

Interpretation: The result shows that 59% respondents would like to use E Banking
services after getting the required knowledge about the services offered because now
a days E-banking services considered very important and everyone use these services
daily to do work easily and quickly but 41% respondents would not like to use E
Banking services after getting the required knowledge about the services offered by
the banks.

[94]
4.1.2 CHI SQUARE TEST

The main objective is to study about the factor that affects the customer perception
towards e-banking of HDFC and ICICI bank.

• EASE OF USE WITH RESPECT TO OCCUPATION


Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 22.182a 12 .036


Likelihood Ratio 24.800 12 .016
Linear-by-Linear Association .796 1 .372

N of Valid Cases 109

a. 13 cells (65.0%) have expected count less than 5. The minimum expected count is .73.

Interpretation: As from the above table the value of Pearson Chi-Square with p
value is .036 which is less than 5% level of significance. Hence, we have to reject null
hypotheses stated that ease of use has influence on the use of E-banking services.

• DIRECT ACCESS WITH RESPECT TO OCCUPATION


Chi-Square Tests

Asymp. Sig. (2-


Value df sided)

Pearson Chi-Square 9.946a 12 .621


Likelihood Ratio 10.878 12 .539
Linear-by-Linear Association 2.091 1 .148

N of Valid Cases 109

a. 10 cells (50.0%) have expected count less than 5. The minimum expected
count is .37.
Interpretation: As from the above table the value of Pearson Chi-Square with p
value is .621 which is greater than 5% level of significance. Hence, null hypothesis is
accepted and thus we reject the alternative hypothesis which stated that direct access
have no influence the use of E-banking services.

[95]
• FRIENDS AND RELATIVES WITH RESPECT TO OCCUPATION
Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 6.477a 12 .890


Likelihood Ratio 7.580 12 .817
Linear-by-Linear Association .694 1 .405

N of Valid Cases 109

a. 13 cells (65.0%) have expected count less than 5. The minimum expected count is .62.

Interpretation: As from the above table the value of Pearson Chi-Square with p
value is .890 which is greater than 5% level of significance. Hence, null hypothesis is
accepted and thus we reject the alternative hypothesis which stated that
friends/relatives has no influence the use of E-banking services.

• EASE OF USE WITH RESPECT TO AGE


Chi-Square Tests

Asymp. Sig. (2-


Value df sided)

Pearson Chi-Square 15.399a 16 .496


Likelihood Ratio 18.341 16 .304

Linear-by-Linear Association .108 1 .742


N of Valid Cases 109

a. 17 cells (68.0%) have expected count less than 5. The minimum expected count is .64.

Interpretation: As from the above table the value of Pearson Chi-Square with p
value is .496 which is greater than 5% level of significance. Hence, null hypothesis is
accepted and thus we reject the alternative hypothesis which stated that ease of use
has no influence the use of E-banking services

[96]
• DIRECT ACCESS WITH RESPECT TO AGE
Chi-Square Tests

Asymp. Sig. (2-


Value df sided)

Pearson Chi-Square 11.776a 16 .759


Likelihood Ratio 13.472 16 .638
Linear-by-Linear Association .374 1 .541
N of Valid Cases 109

a. 15 cells (60.0%) have expected count less than 5. The minimum expected count is .28.

Interpretation: As from the above table the value of Pearson Chi-Square with p
value is .759 which is greater than 5% level of significance. Hence, null hypothesis is
accepted and thus we reject the alternative hypothesis which stated that direct access
has no influence the use of E-banking services.

• FRIENDS AND RELATIVES WITH RESPECT TO AGE

Chi-Square Tests

Asymp. Sig. (2-


Value df sided)

Pearson Chi-Square 26.941a 16 .042


Likelihood Ratio 26.596 16 .046
Linear-by-Linear Association .176 1 .674
N of Valid Cases 109
a. 17 cells (68.0%) have expected count less than 5. The minimum expected
count is .48.

Interpretation: As from the above table the value of Pearson Chi-Square with p
value is .042 which is less than 5% level of significance. Hence, null hypothesis is not
accepted and thus we accept the alternative hypothesis which stated that ease of use
have some influence the use of E-banking services.

[97]
CHAPTER – 5

SUMMARY, FINDINGS,
CONCLUSION, LIMITATION &
RECOMMENDATIONS

[98]
5.1.1 SUMMARY

Knowledge cannot be gained only on the basis of theoretical understanding from


books. A practical insight is necessary for the learning process to make it complete
and effective. This is especially in case of Management Education, banking is one of
the emerging or rather to say it one of the fastest growing in India. Today the banking
sector has transcended the normal banking activities and has diversified into
insurance, merchant banking, advisory services and many more.

My project aims at Comparative study on Customer Perception Towards E-banking


With Respect To HDFC and ICICI Bank. In this research study 150 respondents from
both the Banks were taken, After analyzing the results of the questionnaire we
conclude that even now a days banks are providing innovative services day by day,
but still there are a lot of customers who are even not aware about these services, the
usage of these services is a different issue, Today Banks are using huge amount of
funds to provide differentiate services to their customers from their competitors like
by using new software or by providing new innovative services like internet banking,
mobile banking, and many others but still they are focusing only to provide the
innovative services to the customers not focusing too aware them regarding these
services and also there is a need to aware the customers about the use and benefits to
the services provided by the bank, because it’s the way to get competitive advantage,
as per as we all know that today most of the organizations are focusing on the
promotion- element of marketing mix, which is providing financial as well as non
financial benefits like Brand image, so these Banks is not focusing over this element,
Majority of the respondent in Bank have savings account with banks. The facility that
was availed by most of the people at these Banks was that of ATM/Debit Cards. The
most important channel that aware customer most regarding the innovative services is
family& friends.

[99]
5.1.2 FINDINGS OF THE STUDY

• From our study we find out that 114 male and 36 female are using E-banking
services of both the banks. The male are having more knowledge about the
transactions and having more knowledge about the services provided by the
banks. Only the working ladies having knowledge about the services or the
female having the knowledge but not of the all the services which are provided
by the banks. So that’s why we considered only those persons who are having
knowledge about all services of E-banking which is provided by the banks.
• Most of the respondents who lies under the age of 21-30 are using E-banking
services as near about 40 respondents are using these services because under
the age of these respondents they are having more knowledge about the
services of e-banking.
• Most of respondents are business man are using E-banking services as near
about 48 respondents are using E-banking services. Because the benefits
which are having while using these services are more benefited by the
business man people so they are availing these services more than the other
respondents.
• Most of the respondents who are using this facility having income lie between
10,000-25,000. And there is no at all a huge difference between the
respondents who are having income between 25,000-50,000.
• Among the overall percentage of the customers whose having their account in
the both the bank which we have conducted in our survey should be the 58%,
and they are using the services of both the banks and the categorical division is
to be 16% in ICICI and 26% in HDFC.
• The overall percentage of businessmen having complete knowledge about e-
banking services provided by the bank while opening an account in it is 73%
and the percentage of people have no awareness of e-banking services
provided by the bank is 27%. It can reasonably, be concluded that nearly 73%
of the population is having awareness about e-banking services.
• Among those aware (which account for 150 in number) about 109 persons use
e-banking services, which is 73% of total population studied.

[100]
• E-banking constitutes services provided in terms of ATMs, Debit Card, Credit
Card, Phone Banking, Mobile Banking, Internet Banking etc, of which the
first six have been covered. Amongst these Debit Card scores the largest used
service status (68%) Close on the heels is Mobile Banking (64.66%), Phone
Banking (44.66%), while One Line banking lags behind by scoring the least
ie.,0.08%.
• To find out the level of usage amongst the business class, percentage has been
calculated from the total completely filled in questionnaires and the
incomplete questionnaires were discarded. The frequency of usage of Debit
card is highest followed by ATM.
• A study of the factors, influencing the usage was made by listing out various
factors such as all time availability, ease of use, nearness etc., and amongst
the various factors status symbol is ranked as the major motivating factor,
followed by all time availability, friends, ease of use and direct access in
decreasing order of importance. Quite interestingly security symbol scored the
least motivating factors.
• When asked to list various benefits accruing from the usage of e-banking,
time saving received highest percentage score at 51.37% among different
benefits such as inexpensive (28.44%), easy processing (12.84%), easy fund
transfer (7.3%).Quite interestingly, easy processing feature scored more than
the inexpensiveness of the e-banking services. The other benefits accruing to
the people include ready availability of funds, removal of middlemen and no
rude customer relation executives.
• Among the users, various problems that are encountered while using e-
banking services. Firstly they highly considered Difficulty in claiming false
transactions are major reasons that create hurdles in its usage, while card
misplaced and misused, password forgetting, time consumption and internet
connectivity issue also considered seem to be the least bothering problems.
• From the non users, an attempt was made to elicit the reasons for its non
usage. most important factors which have been considered by customers who
are not using e banking services are no access to internet, mobile then hidden
cost factor, followed by dissatisfaction with traditional banking was
considered as de-motivating factor, followed closely by the fear of insecurity,

[101]
then ‘botheration’ factor, which suggested their resistance to change, which to
some extent can be countered by aggressive advertisement and utilizing other
modes of awareness dissemination as well.
• We easily from our interpretation find out that there is not at all as such
comparison between both the banks. As there are some of the services which
are equally good as the services of other bank. As the services of net banking
is good in HDFC as compare to ICICI. And if we compare the mobile banking
services then both are at equally side. But if we compare the phone banking
facility of both the banks then ICICI provides totally satisfaction to their
customers. So in findings we can’t say that overall which bank provides the
satisfactory facility to their customers only there is some services which is
better of HDFC and some are better of ICICI bank. Like out of 109
respondents 59 respondents prefer the E-banking services of HDFC and 50
respondents prefer the services of ICICI bank. So most of the respondents
considered the services provided by HDFC bank are better in respect of ICICI
bank.

[102]
5.1.3 CONCLUSION

This study attempted to identify key quality attributes of internet banking services by
analyzing internet banking customers & their comments on banking experience. The
findings of this study show that despite of many advantages of online banking. People
still consider it as an alternative for analyzing their bank records. Although every
bank today provides the facility of online banking but most of people use it only once
a month. This reason is that in case of internet banking interpersonal interaction with
customers is seldom possible. Identification & measurement of customer’s
expectations of the internet banking services provide a frame of reference & their
related quality dimension. The main factors which persuade people to use online
banking are comfort & convenience & the facility which attracts them most is quality
& quantity of information. Therefore the implementation of quality initiatives should
begin with defining customer’s need & preferences & their related quality dimensions

There is still a lot needed for the banking system to make reforms and train their
customers for using internet for their banking account. Going through the survey the
main problem lies that still customer have a fear of hacking of accounts and thus do
not go on for internet banking. Banks are trying their level best by providing the best
security options to the customers but then to there is lot of factors which betrays a
customer from opening an internet bank account.

Banks are providing free internet banking services also so that the customers can be
attracted. By asking the bank employs we came to know that maximum numbers of
internet bank account holders are youth and business man. E-Banking is an innovative
tool that is fast becoming a necessity. It is a successful strategic weapon for banks to
remain profitable in a volatile and competitive marketplace of today. If proper
training should be given to customer by the bank employs to open an account will be
beneficial secondly the website should be made friendlier from where the first time
customers can directly make and access their accounts. In future, the availability of
technology to ensure safety and privacy of e-transactions and the RBI guidelines on
various aspects of internet banking will definitely help in rapid growth of internet
banking in India.

[103]
5.1.4 LIMITATIONS

Every research is conducted under some constraints and this research is not an
exception. Limitations of this study are as follows:-
• As a research is based on a sample, therefore, the findings may not reveal the
factual information about the research problem, though an utmost care will be
taken to select a truly representative sample.
• There may be some bias in the responses of the respondents which cannot be
ruled out fully.
• Sudden change in the e- banking practices during the course of research can
affect the results.
• The study is limited to areas of Jalandhar only.
• The sample size of only 150 was taken from the large population for the
purpose of study, so there can be difference between results of sample from
total population.
• People were reluctant to go in to details because of their busy schedules.
• Merely asking questions and recording answers may not always elicit the
actual information sought.
• Due to continuous change in environment, what is relevant today may be
irrelevant tomorrow.

[104]
5.1.5 RECOMMENDATIONS

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

• Banks should obey the RBI norms and provide facilities as per the norms, which
are not being followed by the banks. While the customer must be given the
prompt services and the bank officer should not have any fear on mind to provide
the facilities as per RBI norms to the units going sick.
• Internet banking facility must be made available in all branches of these two
Banks.
• Each section of these Banks should be computerized even in rural areas also.
• Personalized banking should be given a thrust as more and more banks are
achieving in usual services.
• Covering up the towns in rural areas with ATMs so that the people in those areas
can also avail better services.
• Prompt dealing with permanent customers and speedy transactions without
harassing the customers.
• Fair dealing with the customers. More contributions from the employees of the
bank. The staff should be co-operative, friendly and must be capable of
understanding the problems of the customers.
• Give proper training to customers for using i-banking
• Create a trust in mind of customers towards security of their accounts
• Provide a platform from where the customers can access different accounts at
single time without extra charge.
• Make their sites more users friendly. Customers should be motivated to use I-
banking facilities more.

[105]
CHAPTER – 6

BIBLIOGRAPHY

[106]
6.1.1 BIBLIOGRAPHY

• Agarwal, R., Raastogi, S., & Malhotra, A. (2009), “Customers’ perspectives


regarding e-banking in an emerging economy”, Journal of Retailing and
Consumer Services, Vol.16, Iss. 5, pp. 340-351
• Anthoney, R. (2004), “User Friendly E-Banking: A Survey of Online E-
Banking Retail Initiatives”, Communications of the ACM, Vol. 47, Iss. 10, pp.
99-102
• Asghar, O. (2004), “Banking In a Cloud of Electrons”.

• Awamleh, R. (2006), “Diffusion of Internet Banking amongst educated


consumers in a high income Non-OECD country”, Journal of Internet
Banking and Commerce, Vol. 11, Iss. 3
• Azouzi, D. (2009), “The Adoption of Electronic Banking in Tunisia”, Journal
of Internet Banking and Commerce, Vol. 14, Iss. 3, pp. 1-11
• Bauer H. Hans, Maik, H. & Falk, T. (2006), “Measuring the quality of e
banking portals”, International Journal of Bank, Vol. 23, Iss. 2
• B. Dizon, Javier A. (2009), “Special Feature: Electronic Banking”.
• IIT Madras, (2010), “Polaris Software and IndusInd Bank launch
INTELLECT PRIVACY Internet Banking Security Card”, PR Newswire
• Kamiya, J. (2006), “How E-Banking Can Ease Your Life”,Rediff.com
• Kuang Hsun, S. (2008), “Is E-Banking A Competitive Weapon”, International
journal of electronic finance, Inder Science Publishers, Vol.2, No. 2, pp.180-
196
• Laukkanen, P., Sinkkonen, S., & Laukkanen, T. (2008), “Consumer resistance
to internet banking: postponers, opponents and rejectors”, The International
Journal of Bank Marketing. Vol. 26, Iss. 6, pp. 440
• Malhotra, P., & Singh, B. (2007), “Determinants of Internet banking adoption
by banks in India”, Journal of Internet Research, Emerald Group Publishing
Ltd., Vol. 17, Iss. 3, pp.323-339
• Malhotra, P., & Singh, B. (2010) “An analysis of Internet banking offerings
and its determinants in India”, Journal of Internet Research, Vol. 20, Iss. 1,
pp. 87

[107]
• Maumbe, M. (2006), “Digital Financial Service Delivery to Poor Communities
in”, International Review of Business Research Papers, Vol. 2, Iss. 2, pp.72-
79
• Nitsure, R.R. (2003), “E-Banking: Challenges and Opportunities”, Economic
and Political Weekly, Vol. 38, No. 51/52 , pp. 5377-5381
• Picado, F., Gonzalez Marvin, E. & Carl Eckelman,A., Quesada,G. (2004),
“Customer Satisfaction Using QFD”, Journal of managing service quality,
Emerald Group Publishing Limited, Vol. 14, Iss. 4, pp.317-330
• Routray, S. (2008), “Wireless ATM: A Technological Framework to M-
Banking”, Journal of Internet Banking and Commerce, Vol. 13, Iss.1
• Shah, M.H., & Braganza, A. (2007), “A Survey of Critical Success Factors in
e-banking”, European Journal of Information Systems, Vol. 16, Iss. 4,pp.511-
524
• Uppal, R K. & Chawla, R. (2009), “E-Delivery Channel-Based Banking
Services: An Empirical Study. Institute of Chartered Financial Analysts of
India (Hyderabad)”.
• Veneeva, V. (2006), “E-Banking (Online Banking) and Its Role in Today's
Society”, Ezine articles

[108]
6.1.2 REFERENCES

• http://banking-online-internat.blogspot.com/search/label/Banking
• http://dikkedeur.dyndns.org/index.php?option=com_ewiki&view=mediawiki
&article=HDFC_BANK
• http://en.wikipedia.org/wiki/online_banking
• http://ezinearticles.com/?E-banking-%28Online-Banking%29-and-Its-role-in-
Todays-Society&id=232606
• http://ibnlive.in.com/news/easy-banking-get-tech-savvy-to-manage-
money/88527-7.html
• http://indianbanksinfo.com/indianbanks/ICICI/
• http://investmentexpert.blogspot.com/2006/11/e-banking-services-offered-
by.html
• http://ivythesis.typepad.com/term_paper_topics/2009/08/evolution-and-the-
impact-of-electronic-banking-on-the-banking-industry.html
• http://library.thinkquest.org/C0110237/Banking___Financial_Institutio/Electr
onic_Banking/electronic_banking.html
• http://pcinternetbanking.com/
• http://proquest.umi.com/pqdweb?did=1837252841&sid=1&Fmt=3&clientId=
129893&RQT=309&VName=PQD
• http://university-essays.tripod.com/ebanking_online_internet_banking.html
• http://www.answers.com/topic/online-banking
• http://www.articlesbase.com/internet-articles/internet-banking-a-global-way-
to-banks-in-india-1855956.html
• http://www.banknetindia.com/banking/ibkg.htm
• http://www.banknetindia.com/banking/ibkg.htm
• http://www.courseworkyou.co.uk
• http://www.easternbookcorporation.com/moreinfo.php?txt_searchstring=1394
• http://www.ehow.com/about_5109945_history-ebanking.html

[109]
• http://www.ehow.com/about_5366338_internet-banking-vs-traditional-
banking.html
• http://ezinearticles.com/?A-Brief-History-of-Internet-Banking&id=353450
• http://ezinearticles.com/?Internet-Banking-Vs-Traditional-Banking&id=93016
• http://www.ffiec.gov/ffiecinfobase/booklets/e_banking/ebanking_00_intro_def
.html
• http://www.fisglobal.com/Products/eBanking/index.htm
• http://www.fsa.gov.uk/Pages/Library/Communication/Speeches/2000/SP46.sh
tml
• http://www.hdfcbank.com/personal/access/atm/atm.htm
• http://www.hdfcbank.com/nri/access/oneview/oneview.htm
• http://www.hdfcbank.com/personal/default.htm
• http://www.homebusinesscenter.com/bank/internet_bank_account.html
• http://www.icicibank.com/
• http://www.icicibank.com/Personal-Banking/insta-banking/atm-banking/atm-
banking.html
• http://www.icicibank.com/Personal-Banking/onlineservice/mobile-
banking/mobile.html
• http://www.icicibank.com/Personal-Banking/insta-banking/insta-index.html
• http://www.imf.org/external/pubs/ft/fandd/2002/09/nsouli.htm
• http://www.isbs.com/partnumber.asp?cid=&pnid=296990
• http://www.management-hub.com/cm-online-banking.html
• http://www.managementparadise.com/forums/customer-relationship-
management-banking-insurance/25547-e-banking.htm
• http://www.medbib.com/HDFC_Bank
• http://www.moneycontrol.com/2006/articles/html
• http://www.rediff.com/money/2006/nov/17mc.htm
• http://www.tebetbarat.com/bank/
• http://www.tieto.com/?path=1;93;16080;123;273;25070;25071;25048
• http://www.watblog.com/2006/11/24/e-banking-easy-banking/
• http://www.worldjute.com/ebank.html

[110]
CHAPTER – 7

APPENDIX

[111]
7.1.1. APPENDIX

Dear Respondent,

We are conducting a research study of B We will appreciate your cooperation in this


regard by filling up the questionnaire carefully. I assure you that the information
provided by you will be kept confidential and will be used for academic purpose only.
Please put a tick (√) in appropriate brackets.

Q1) In which bank do you have your account?


 ICICI  HDFC  BOTH

Q2) While opening up the account, were you aware of E-banking services provided
by your bank?
 Yes  No
(If No, answer question no. 11 directly).

Q3) if answer to question no.2 is YES, which of the following E-banking services is
you aware of?

 Internet Banking  Mobile Banking  Phone Bank


 One Line Banking  Debit Card

Q4) Are you availing E-banking services?


 Yes  No

Q5) How convenient you find accessing your bank online?


 Easy  Normal  Difficult

Q6) if answer to question no.4 is yes, how frequently do you use each of the
following services?

Once in a Once in a Once in a Once in a Infrequent


Factors
day week fortnight month ly

[112]
A Internet Banking
B Mobile Banking
C Phone Banking
D One Line Banking
E Debit Card

Q7) Tick the feature which you like while considering HDFC and ICICI bank?

Features HDFC ICICI

A Net Banking
B Credit Card Online
C One view
D Insta Alerts
E Mobile Banking
F ATM
G Phone banking
H I Mobile
I TV Banking
J IVR Banking
K I-Zone

Q8) Which of the following factors influence you the most to use E-banking services?

More than Less than


Factors Strongly Average Not at all
average Average

A All time availability

B Ease of use

C Nearness

D Security

E Direct access

F Friends/ Relatives

G Status symbol

[113]
Q9) To what extent are you satisfied with your Banks’ E-banking services?
 Highly Satisfied  Satisfied  Neutral
 Dissatisfied  Highly Dissatisfied

Q10) Which of the following benefits accrue to you, while using E-banking services?
 Time Saving  Inexpensive  Easy Processing
 Easy Fund Transfer  Any Other________________

Q11) Kindly rate the following reasons enlisted for not using the E-banking services?

More
Highly Less than Least
Factors than Average
important average important
average
No need( Satisfied with
A
traditional banking)

B It seems like a botheration

C Insecurity
No access to
D
internet/mobile
Lack of operational
E
knowledge

F Hidden costs

Any other, please specify__________________________________________

Q12) Rate the following statements with regards to potential problems identified in E-
banking services?

Highly
Factors Major Average Minor Ignorable
considered

A Time consuming

B Security Issue

C ATM out of order


Amount debited but not
D
withdrawn

[114]
E Internet Connectivity Issue
F Password forgotten
G Card misplaced/Misused
Difficulty in Claiming False
H
transactions

Q13) If you use, rate your online banking facility on the following criteria using a
scale of 1 to 5 (where 1 is very dissatisfied and 5 is very satisfied)

Factors 1 2 3 4 5

A Quality of information

Quality and Quantity of


B
content
Security of personal
C
information

Q14) If answer to question no.2 is NO, even if you are not aware about E Banking
services then would you like to have information about this or would you like to get
information from the bank itself?
 YES  NO

Q15) Would you like to use E Banking services after getting the required knowledge
about the services offered by the banks?
 YES  NO

Q16) What other services you would like to have through E-banking?

[115]
Personal details-

Name: - _________________________________________
1. Gender  Male  Female
2. Age Group  Below 21 Years,  21 years – 30 years,
 31 years – 40 years,  41 years – 50 years,
 Above 50 years
3. Occupation  Govt. Job  Private Job
 Business Other (specify) ___________
4. Income Group (Per month)  below 10,000/-  10,001 – 25,000/-
 25,001 – 50,000/-  More than 50,000/-

[116]

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