Management Thesis on

Services provided by the bank

through

E-BANKING IN INDIA

By

Abhinav Tawani

SYNOPSIS

A Thesis
!

ON
Services

provided by the bank through

E-BANKING IN INDIA
Submitted by ABHINAV A TAWANI Enroll. No. 08OSB201 OSB Aurangabad.

A re ort !ubmitted in artial "ul"illment o" T#e re$uirement! o" THE %BA &'O('A% )T#e *la!! o" 2010+ OSB *am u!

Introduction
"

E-banking:Internet banking #or E-banking$ %eans any user &ith a persona' co%puter and a bro&ser can get connected to his bank -s &ebsite to per(or% any o( the virtua' banking (unctions) In internet banking syste% the bank has a centra'i*ed database that is &eb-enab'ed) A'' the services that the bank has per%itted on the internet are disp'ayed in %enu) Any service can be se'ected and (urther interaction is dictated by the nature o( service) +nce the branch o((ices o( bank are interconnected through terrestria' or sate''ite 'inks, there &ou'd be no physica' identity (or any branch) It &ou'd a border'ess entity per%itting anyti%e, any&here and anyho& banking) -he de'ivery channe's inc'ude direct dia'up connections, private net&orks, pub'ic net&orks, etc) &ith the popu'arity o( co%puters, easy access to Internet and .or'd .ide .eb #...$, Internet is increasing'y used by banks as a channe' (or receiving instructions and de'ivering their products and services to their custo%ers) -his (or% o( banking is genera''y re(erred to as Internet Banking, a'though the range o( products and services o((ered by di((erent banks vary &ide'y both in their content and sophistication)

Meaning of E-Banking
E-bank is the e'ectronic bank that provides the (inancia' service (or the individua' c'ient by %eans o( Internet)
/

Need o( study

-o kno& the custo%ers perception to&ard the E-banking service)

I a% interested in E-BANKING that I a% taken this topic)

Bene(its o( study
$ +rgani*ing Educationa' 1a%paign -o 1reate Good&i'' +( 1o%pany)

!$

Services It E((ective'y va'uab'e to 1reate 2'ace in the 3inds o( 1usto%er)

"$

Avai'abi'ity shou'd be increased by using various services Strategy)

/$

1o%pany shou'd %ake service e4ua' to or better than 1o%petitive Brands By A'' 3eans)

E6ecutive su%%ary
The project Report on: Services provided by the bank through E-BANKING IN INDIA Project carried at:
SBI, SBH, ICICI, ETC.

Project objectives:

7ind the custo%er satis(action re'ating to E-banking service) -o study the a&areness o( internet banking a%ong the custo%ers o( I1I1I and 8D71 banks)

Research Methodology: 2ri%ary Data9 In this research &ith a sa%p'e si*e o( near'y !: custo%er;s data &i'' be avai'ab'e in (or% o( 4uestionnaire co''ected in ter%s o( di((erent 4uestions in('uencing the use o( internet banking)
<

Internet banking is considered as dependent on a&areness a%ong custo%ers &hich &i'' be studied &ith he'p o( di((erent independent variab'e) +n'y the custo%ers o( 8D71 = I1I1I bank are taken as sa%p'es (or study) Secondary data9 1o''ection o( in(or%ation (ro% di((erent kind o( books the data o( the co%pany &hat they %aintained)

1onc'usion
-he basic ob>ective o( %y research &as to ana'y*e the a&areness a%ong custo%ers (or internet banking in INDIA) It gives direction to research too's, research types and techni4ues) A'though the (indings revea' that peop'e kno& about the services but sti'' %any peop'e are una&are and %any o( the% are non ? users so the bank shou'd by pro%otion try to retain the custo%ers) Banks shou'd 'ook (or&ard to have so%e tie ? ups &ith other (inancia' institutions to increase the service base)

Interim Report

A Thesis ON
Services provided by the bank
through

E-BANKING IN INDIA

Submitted by ABHINAV A TAWANI Enroll. No. 08OSB201 OSB Aurangabad.

A re ort !ubmitted in artial "ul"illment o" T#e re$uirement! o" THE %BA &'O('A% )T#e *la!! o" 2010+

OSB *am u!

-ab'e 1ontents
*#a ter 1, Introdu-tion......................1/ *#a ter 2, Ob!er0ation o" !tudy....................11 *#a ter 2, 3iterature 'e0ie4 ....................22 *#a ter 5, Ob6e-ti0e o" !tudy....................21 *#a ter 5.1, 3imitation o" !tudy..................21 *#a ter 7, %et#odology.....................28 *#a ter 7, 8ue!tionnaire.......................29 *#a ter /, :ata analy!i!.....................22 *#a ter 1, "inding!.......................28 *#a ter 8, *on-lu!ion!.....................29

Ackno&'edge%ent
I &ou'd 'ike to e6press %y gratitude to a'' those &ho gave %e the possibi'ity to co%p'ete this pro>ect) I &ou'd 'ike e6press %y guide Mr. Mangesh Kela and I a% a'so thank(u' to %y (acu'ty guide Mrs. J.R. Phansalkar to continuous guidance) In the end, I e6press our gratitude to %y (riend &ho inspired %e in this &ork &ithout their inspirations the &ork &ere a'%ost i%possib'e)

Signature Abhinav A -a&ani :@+SB!:

"

Dec'aration
I a% Abhinav A Tawani this pro>ect report is %y origina' &ork and have not been sub%itted in any (or% as a part o( any other pro>ect) In(or%ation derived (ro% the pub'ished and unpub'ished &ork o( other has been ackno&'edge%ent in the 'ist re(erences in given in the bib'iography)

Abhinav A -a&ani :@+SB!:

1EB-I7I1A-E
-his is to certi(y that the 3anage%ent -hesis tit'ed Servi es provi!e b" the banks thro#gh $%banking in IN&IA'sub%itted By Abhinav A. Tawani Enro'' No9 ()OS*+(, During se%ester -r! o( the 3BA 2rogra% #-he 1'ass o( !: :$ e%bodies origina' &ork done by hi% C her)

Signature o( the 7acu'ty Supervisor ---------------------------Na%e #in 1apita's$ Designation 1a%pus D 3rs) E)B) 2hansa'kar D 7acu'ty Guide ))) +SB Aurangabad

Bib'iography
Book9-

E-banking in India Banking service operation #I17AI$ Indian Banking 3oney = Banking

Finks Gisited
www.google.com www.icici.com www.hdfc.com &&&)&ikipedia)co%

Chapter 1

Introduction
E-banking:Internet banking #or E-banking$ %eans any user &ith a persona' co%puter and a bro&ser can get connected to his bank -s &ebsite to per(or% any o( the virtua' banking (unctions) In internet banking syste% the bank has a centra'i*ed database that is &eb-enab'ed) A'' the services that the bank has per%itted on the internet are disp'ayed in %enu) Any service can be se'ected and (urther interaction is dictated by the nature o( service) +nce the branch o((ices o( bank are interconnected through terrestria' or sate''ite 'inks, there &ou'd be no physica' identity (or any branch) It &ou'd a border'ess entity per%itting anyti%e, any&here and anyho& banking) -he de'ivery channe's inc'ude direct dia'up connections, private net&orks, pub'ic net&orks, etc) &ith the popu'arity o( co%puters, easy access to Internet and .or'd .ide .eb #...$, Internet is increasing'y used by banks as a channe' (or receiving instructions and de'ivering their products and services to their custo%ers) -his (or% o( banking is genera''y re(erred to as Internet Banking, a'though the range o( products and services o((ered by di((erent banks vary &ide'y both in their content and sophistication)

<

Meaning of E-Banking
E-bank is the e'ectronic bank that provides the (inancia' service (or the individua' c'ient by %eans o( Internet)

Chapter

+bservation o( study
!E"I#ITI$# $" E-BA#%I#&

7or this book'et, e-banking is de(ined as the auto%ated de'ivery o( ne& and traditiona' banking products and services direct'y to custo%ers through e'ectronic, interactive co%%unication channe's) E-banking inc'udes the syste%s that enab'e (inancia' institution custo%ers, individua's or businesses, to access accounts, transact business, or obtain in(or%ation on (inancia' products and services through a pub'ic or private net&ork, inc'uding the Internet) 1usto%ers access e-banking services using an inte''igent e'ectronic device, such as a persona' co%puter #21$, persona' digita' assistant #2DA$, auto%ated te''er %achine #A-3$, kiosk, or -ouch -one te'ephone) .hi'e the risks and contro's are si%i'ar (or the various e-banking access channe's, this book'et (ocuses speci(ica''y on Internet-based services due to the Internet;s &ide'y accessib'e pub'ic net&ork) According'y, this book'et begins &ith a discussion o( the t&o pri%ary types o( Internet &ebsites9 in(or%ationa' and transactiona')

E-BA#%I#& S'(($)T SE)*ICES

.EBFINKING A 'arge nu%ber o( (inancia' institutions %aintains sites on the .or'd .ide .eb) So%e &ebsites are strict'y in(or%ationa', &hi'e others a'so o((er custo%ers the abi'ity to per(or% (inancia' transactions, such as paying bi''s or trans(erring (unds bet&een accounts) .IBEFESS E-BANKING .ire'ess banking is a de'ivery channe' that can e6tend the reach
A

and enhance the convenience o( Internet banking products and services) .ire'ess banking occurs &hen custo%ers access a (inancia' institutionHs net&ork#s$ using ce''u'ar phones, pagers, and persona' digita' assistants #or si%i'ar devices$ through te'eco%%unication co%panies; &ire'ess net&orks) .ire'ess banking services in the Inited States typica''y supp'e%ent a (inancia' institutionHs e-banking products and services. 2erson-to-2erson 2ay%ents E'ectronic person-to-person pay%ents, a'so kno&n as e-%ai' %oney, per%it consu%ers to send %oney to any person or business &ith an e-%ai' address) Inder this scenario, a consu%er e'ectronica''y instructs the person-to-person pay%ent service to trans(er (unds to another individua') -he pay%ent service then sends an e-%ai' noti(ying the individua' that the (unds are avai'ab'e and in(or%s hi% or her o( the %ethods avai'ab'e to access the (unds inc'uding re4uesting a check, trans(erring the (unds to an account at an insured (inancia' institution, or retrans%itting the (unds to so%eone e'se) 2erson-to-person pay%ents are typica''y (unded by credit card charges trans(er (ro% the consu%er;s account at a (inancia' institution) Since neither the payee nor the payer in the transaction has to have an account &ith the pay%ent service, such services %ay be o((ered by an insured (inancia' institution, but are (re4uent'y o((ered by other businesses as &e'') Banking Services through Internet9
)

-he Basic Feve' Service is the banks; &eb sites &hich disse%inate in(or%ation on di((erent products and services o((ered to custo%ers and %e%bers o( pub'ic in genera') It %ay receive and rep'y to custo%er;s 4ueries through e-%ai'J !) In the ne6t 'eve' are Si%p'e -ransactiona' .eb sites &hich a''o&s custo%ers to sub%it their instructions, app'ications (or
!:

di((erent services, 4ueries in their account ba'ances, etc) but do not per%it any (und-based transactions on their accountsJ

") -he third 'eve' o( Internet banking service are o((ered by 7u''y -ransactiona' .eb sites &hich a''o& the custo%ers to operate on their accounts (or trans(er o( (unds, pay%ent o( di((erent bi''s, subscribing to other products o( the bank and to transact purchase and sa'e o( securities, etc) -he above (or%s o( Internet banking service the custo%er or by ne& banks, &ho de'iver banking service pri%ari'y through Internet or other e'ectronic de'ivery channe's as the va'ue added services) So%e o( these banks are kno&n as KGirtua'; banks or KInternet on'y; banks and %ay not have physica' presence in a country despite o((ering di((erent banking services) -he Indian Scenario9 Internet banking, both as a %ediu% o( de'ivery o( banking services and as a strategic too' (or business deve'op%ent)

L At present, the tota' internet users in the country are esti%ated at A 'akh) 8o&ever, this is e6pected to gro& e6ponentia''y to A: 'akh by !::") +n'y about percent o( Internet users did banking on'ine in AA@) -his is increased to 5)< percent in 3arch !:::) - #India Besearch, 3ay !A, !:::, Kotak Securities$ L 1ost o( banking service through the Internet (ro% a (raction o( costs through conventiona' %ethods) Bough esti%ates assu%e te''er cost at Be) per transaction, A-3 transaction cost at /0 paise, phone banking at "0 paise, debit cards at !:
!

paise and Internet banking at : paise per transaction.

2'astic 1ards as 3edia (or 2ay%ent9 -

-here are (our types o( p'astic cards being used as %edia (or %aking pay%ents) -hese are9
) !) ") /) 1redit 1ard Debit 1ard S%art 1ard A-3 1ard

) 1redit 1ards9 -he credit card enab'es the cardho'ders to9 2urchase any ite% 'ike c'othes, >e&e''ery, rai'&ayCair tickets, etc) 2ay bi''s (or dining in a restaurant or boarding and 'odging in hote' Avai' o( any service 'ike car renta', etc) !) Debit 1ards9 A debit card is issued on pay%ent o( a speci(ied a%ount by the issuing co%pany 'ike a te'ephone co%pany to a custo%er on cash pay%ent or on debiting his account by a bank) -hus it is 'ike an e'ectronic purse, &hich can be read and debited by the re4uired a%ount) It %ay be noted that &hi'e through a credit card, the custo%er (irst %akes a purchase or avai's service and pays 'ater on, but (or
!!

getting the debit card, a custo%er has to (irst pay the due a%ount and then %ake a purchase or avai' the service) 7or this reason, debit card are not as popu'ar as credit cards)

") S%art 1ards9 S%art 1ards have a bui't-in %icroco%puter chip, &hich can be used (or storing and processing in(or%ation) 7or e6a%p'e, a person can have a s%art card (ro% a bank &ith the speci(ied a%ount stored e'ectronica''y on it) As he goes on %aking transactions &ith the he'p o( the card, the ba'ance keeps on reducing e'ectronica''y) .hen the speci(ied a%ount is uti'i*ed by the custo%er, he can approach the bank to get his card va'idated (or a (urther speci(ied a%ount) Such cards are used (or paying s%a'' a%ounts 'ike te'ephone ca''s, petro' bi''s, etc)

/) A-3 1ards9 -he card contains a 2IN #2ersona' Identi(ication Nu%ber$ &hich is se'ected by the custo%er or conveyed to the custo%er and enab'es hi% to &ithdra& cash up to the transaction 'i%it (or the day) 8e can a'so deposit cash or che4ue)

!"

Chapter +

Fiterature Bevie&
A ne& revie& by -o&er group o( : top IS e- banking &eb sites eva'uated severa' aspects o( core on'ine banking co%ponents) Group (ound that there is di((erence in ter%s o( actua' (unctiona'ity and usabi'ity) A%ong di((erent banks and their services) -he IKHs (irst ho%e on'ine banking services &ere set up by the Nottingha% Bui'ding Society #NBS$ in A@" #M8istory o( the Nottingha%M) Betrieved on !::<- !- /)$) -he syste% used &as based on the IKHs 2reste' syste% and used a co%puter, such as the BB1 3icro, or keyboard #-an data -d /::$ connected to the te'ephone syste% and te'evision set) -he syste% #kno&n as H8o%e 'inkH$ a''o&ed on-'ine vie&ing o( state%ents, bank trans(ers and bi'' pay%ents) In order to %ake bank trans(ers and bi'' pay%ents, a &ritten instruction giving detai's o( the intended recipient had to be sent to the NBS &ho set the detai's up on the 8o%e 'ink syste%) An A%erican study conducted 'ast year by Boo*-A''en pro>ects that by the year !:::, 5 %i''ion IS househo'ds &i'' be using Internet banking) .hi'e these nu%bers do not appear to be signi(icant as co%pared to the tota' popu'ation, each Internet user is pro>ected to be 0:-!0:N %ore pro(itab'e than the average banking custo%er) It is e6pected that these Internet custo%ers
!/

&i'' be so%e o( the banking syste%Hs %ost pro(itab'e custo%ers representing c'ose to ":N o( a'' retai' banking pro(its) -he study pro>ects that by AAA, ,0:: banks &i'' have Internet .eb sites and at 'east 0:: o( these banks &i'' be o((ering (u''-('edged Internet banking services) In !:: 3icro banker send detai'ed 4uestionnaire to the 'eading vendors o( internet banking so(t&are!< co%panies responded &ith in(or%ation on thirty progra%s the aggregate outco%e o( the outco%e &as that a'%ost a'' the co%panies have deve'oped (unctions (or internet banking and have inbui't (eature to aid &ith one to one %arketing on the &eb)

I1I1I Bank
I1I1I Bank +n'ine Banking Services provide the 'argest private bank in India right here at your desktops) Banking beco%es a p'easure as the transactions and services beco%e instant &ith I1I1I Bank on'ine Internet banking) -he services provided are tota''y secure and uni4ue) -hese cover on'ine account transactions and operations, credit card and account app'ications and pay%ents, share trading and invest%ents through %utua' (unds, bi'' pay%ents, state%ent generation and a virtua' de%o o( each service) See in brie( in (ina' report)

Bo'e o( custo%er &hen using e-banking

Oou can access I1I1IBank)co% on'y by using your Iser ID and 2ass&ord) During the (irst 'ogin atte%pt, it is %andatory to change both pass&ords - 'ogin and transaction ? &hich &ou'd have been %ai'ed to you by the bank)
!0

I( you (orget your pass&ord, you &i'' have &ritten to us using the ME%ai' IsM option) -he Bank &i'' then issue a ne& pass&ord and send it to your %ai'ing address as per our records) Kind'y check &ith your branch that this address is updated))) 3ake sure no one can see the account 'ogin na%e or pass&ord you are entering &hen you 'og on to I1I1IBank)co%) Fogout o( I1I1IBank)co% be(ore %oving on to other .ebsites) Be(ore 'eaving the 21 p'ease Mc'oseM the bro&ser) Do not &rite your I1I1IBank)co% 'ogin na%e or pass&ord any&here) Do not 'eave your 'ogin na%e and pass&ord such that so%eone sitting at your co%puter cou'd see the%) Never revea' your I1I1IBank)co% 'ogin na%e and pass&ord to anyone #no representative o( I1I1I Bank &i'' ever ask you (or your I1I1IBank)co% pass&ord$) Noti(y I1I1I Bank i%%ediate'y i( you notice any unusua' account activity) Keep a'' docu%ents that inc'ude your account in(or%ation in a secure 'ocation) .hen you 'ogin you can vie& the date and ti%e o( your 'ast 'og in)

!5

7eatures o((ered by I1I1I bank (or internet banking

Ba'ance en4uiry and state%ent -rans(er (und on'ine 1ard to card (und trans(er Ise debit card on'ine 2repaid %obi'e recharge Subscribe (or %obi'e banking Fink bank account to A-3 Fock C activate debit cards CA-3 Be4uest a che4ue book Stop pay%ent

8D71
Net Banking is 8D71 BankHs Internet Banking service) 2roviding up-to-the-second account in(or%ation, Net Banking 'ets you %anage your account (ro% the co%(ort o( your %ouse anyti%e, any&here) 7eatures o((ered by 8D71 bank (or internet banking

Gie& account ba'ances and state%ents -rans(er (unds bet&een accounts Be4uest stop pay%ents 2ay bi''s 1reate (i6ed deposit on'ine
!<

+rder che4ue books

ISE +7 E-BANKING IN INDIA 7E+3 FAS- 7E. OEABS Oear Incr) N !::! A !::" ! !::/ 0 !::0 !: !::5 !0 !::< "! !::@ /: !::A 0:

!@

"in,ing In -- - --. the /0er of the E-banking i0 in1rea0e in 2ore in every year.

Chapter 3

+b>ective o( study

7ind the custo%er satis(action re'ating to E-banking service) -o study the a&areness o( internet banking a%ong the custo%ers o( I1I1I and 8D71 banks)
!A

Chapter 3.1

Fi%itation o( Study

Banks are not giving %e a'' in(or%ation about E-banking services)

-hey do not per%it to %eet any o( the e%p'oyees in their bank)

Chapter 4
":

Data co''ection
2ri%ary Data9 In this research &ith a sa%p'e si*e o( near'y !: custo%er;s data &i'' be avai'ab'e in (or% o( 4uestionnaire co''ected in ter%s o( di((erent 4uestions in('uencing the use o( internet banking) Internet banking is considered as dependent on a&areness a%ong custo%ers &hich &i'' be studied &ith he'p o( di((erent independent variab'e) +n'y the custo%ers o( 8D71 = I1I1I bank are taken as sa%p'es (or study) Secondary data9 1o''ection o( in(or%ation (ro% di((erent kind o( books the data o( the co%pany &hat they %aintained)

3ethodo'ogy
+nce the (indings are (ina'i*ed by a research, suggestions shou'd be %ade (or the better%ent o( enterprise) -he data co''ected (ro% 4uestionnaire &i'' be tabu'ated and ana'y*ed so that -he resu't can be presented as si%p'e as possib'e) -here are a nu%ber o( &ays 'ike o 2ie-chart o Graphs

Puestionnaire9"

) Na%e o( the custo%er9-

!)

Do you 'ike E-banking a) Oes b) No

") -ick &hich bank you pre(erredD a) Icici b) Sbi c) Sbh d) A6is e) Inion bank () 8d(c g) I-I Bank Ftd h) Bank o( 2un>ab Ftd

/) .hy this bank

a)

Service is good
"!

b) -hey provide security

c)

1heaper service (ees)

0)

.hich type o( service %ost'y you useQ

a)

Ba'ance and transaction history search

b) -rans(er (und on'ine c) 1ard to card (und trans(er d) +pen 7D e) Fock C activate debit cards CA-3 () Be4uest a che4ue book g) Stop pay%ent
h)

Bai'&ay pass C ticket

i) Shopping >) Share pay%ent 5) Services o( the bank areD) a) poor b) good c) Gery good

<)

Are you satis(ied &ith the using o( E-bankingQ a) Oes

""

b) No

"/

.inal Report

"0

Chapter 5

Data ana'ysis
$ Isers o( E-banking

Oes No

50N "0N

!$ No) o( user o( the banks I i i Sbi Sbh

"5

+(/ -(/ +(/

A0is 1nion 2!3

,(/ )/ ,+/

"$

2BE7EBEN1E 7+B +NFINE BIFF 2AO3EN- SEBGI1ES

Yes No

4(/ 5(/

"<

/$

2BE7EBEN1E 7+B +NFINE S8+22ING

Yes No

6(/ -(/

"@

0$

2BE7EBEN1E 7+B +NFINE 7IND -BANS7AB R

Yes No

-7/ 47/

"A

5$ SA-IS7IED 1IS-+3EBS

Yes No

47/ -7/

/:

<$ 2EB7EBBED 3+DE +7 2AO3EN- #-+ BANK$

82$91$ 8AS2 $%*ANKIN:

0: !0 !0

@$ S2END 2EB BIFF 7+B +N FINE BIFF 2AO3EN/

AB+GE Bs) : BE-.EEN BS)0- : BEF+. BS)0 N+-8ING

"! "5

/!

1hapter <

7indings
) In the users ratio o( internet banking 50N o( custo%ers are using this service) !) 3ore banks are connecting to the any so(t&are co) to running the E-banking service) In these services the Sbi banks is top in service o( E-banking)
")

-he services that are %ost'y used by %a6i%u% custo%ers are transactions, on'ine trading, bi'' pay%ent, shopping etc)

/) -he %ode o( the cash deposit in bank is (or use to on'ine truncation cash, che4ue = e-banking)
0)

Di((erent banks di((erent charge (or on'ine service)

Suggestions
)

-o prevent on'ine banking (ro% re%aining custo%ers to pro%pt this service through advertising co)

!) A(ter repairing this basic de(iciency, banks %ust ensure that there services is co%petitive)
")

Banks is not take %ore charge (ro% there custo%ers)

/"

Chapter 6

1onc'usion
-he basic ob>ective o( %y research &as to ana'y*e the a&areness a%ong custo%ers (or internet banking in INDIA) It gives direction to research too's, research types and techni4ues) A'though the (indings revea' that peop'e kno& about the services but sti'' %any peop'e are una&are and %any o( the% are non ? users so the bank shou'd by pro%otion try to retain the custo%ers) Banks shou'd 'ook (or&ard to have so%e tie ? ups &ith other (inancia' institutions to increase the service base)

//