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A Synopsis ON E-Banking in new Era , impact and Effects For the degree of MASTER OF BUSINESS ADMINISTRATION (MBA) SESSION

2011-2013

Under the guidance of: Ms. Naaz Gorowara Lecturer M.M UNIVERSITY

SUBMITTED BY: Ankush Sharma Roll No. 1208006 MBA- 4th Sem.

SUBMITTED TO

M.M INSTITUTE OF MANAGEMENT MAHARISHI MARKANDESHWAR UNIVERSITY MULLANA Ambala - 133203

What is banking?
Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer, and automated teller machine(ATM). Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such

as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide different payment services, and a bank account is considered indispensable by most businesses and individuals. Non-banks that provide payment services such as remittance companies are normally not considered as an adequate substitute for a bank account.

Online banking
Online banking (or Internet banking or E-banking) allows customers of a financial institution to conduct financial transactions on a secure website operated by the institution, which can be a retail or virtual bank, credit union or building society. To access a financial institution's online banking facility, a customer having personal Internet access must register with the institution for the service, and set up some password (under various names) for

customer verification. The password for online banking is normally not the same as for telephone banking. Financial institutions now routinely allocate customer numbers (also under various names), whether or not customers intend to access their online banking facility. Customer numbers are normally not the same as account numbers, because a number of accounts can be linked to the one customer number. The customer will link to the customer number any of those accounts which the customer controls, which may be cheque, savings, loan, credit card and other accounts. Customer numbers will also not be the same as any debit or credit card issued by the financial institution to the customer. To access online banking, the customer would go to the financial institution's website, and enter the online banking facility using the customer number and password. Some financial institutions have set up additional security steps for access, but there is no consistency to the approach adopted.

Features
Online banking facilities offered by various financial institutions have many features and capabilities in common, but also have some that are application specific.

The common features fall broadly into several categories


A bank customer can perform some non-transactional tasks through online banking, including -

Bank customers can transact banking tasks through online banking, including

Financial institution administration Management of multiple users having varying levels of authority Transaction approval process.

Literature Review
V. Shilpa, concluded that Internet banking is changing the banking industry, having the major effects on banking relationships. Banking is now no longer confined to the branches were 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. This research paper will introduce you to e-banking, giving the meaning, functions, types, advantages and limitations of e-banking. It will also show the impact of e-banking on traditional services and finally the result documentation.

O. Hasan ,B. Talal The study aims to identify the impact of electronic banking on achieving competitive advantage for banks in Jordan. To achieve the goal of the study, a questionnaire consisting of (24) parts divided on (4) areas was distributed to the study sample consisting of (209) Branch Managers of (3) main banks: The Housing Bank for Trade and Finance, Arab Bank, and Jordan Islamic Bank in (3) provinces: Amman, Irbid, and Zarqa, who were selected randomly from the population of the study. After conducting the necessary statistical treatment, the results showed the presence of a statistically significant impact at the level of significance ( =

0.05) for e-banking services in achieving competitive advantage in the banking sector in Jordan. Divya Singhal and V. Padhmanabhan finds that Internet banking is becoming is increasingly becoming popular because of convenience and flexibility. The present paper explores the major factors responsible for internet banking based on respondents perception on various internet applications. It also provides a framework of the factors which are taken to assess the internet banking perception. Chun wang, Zheng wang With the continuous growth of competition in the market place, understanding customers has become more and more important method of marketing. Research has shown that high service quality contributes significantly to profitability. In search of competitive advantage, both practitioners and academics are keen on accurately measuring service quality in order to better understanding its essential antecedents and consequences, and ultimately establish methods for improving service quality. The result of the present study shows that the Internet is a convenience tool available whenever and wherever customers need it. It is also found that the Internet has improved the factors in service quality like Responsiveness, communication and access. It is concluded that the Internet has an important and positive effect on customer perceived banking services and the service quality has been improved since the Internet has been used in banking sector

Research Methodology 3.1 Selection of the Topic


As today the whole world is connected to the internet as a fast working means. In every sector Internet is playing a vital role. With it today banking has become very easy. But with this there are many problems which arise in front of us. Hacking of accounts has become a major problem for the banks and the banks customers. The main objective of selecting is to find out the impact and the effects of the E banking on both the bankers and the customers.

3.2 Objectives of the Study


1. To study the impact of E- banking on the customers and the Bankers. 2. To study the behavior towards the E-banking 3. To measure the satisfaction level of the customers and Bankers.

3.3 Nature of the Study


As concerned to my study questionnaires are used to collect the data and the study is totally descriptive in nature because we have used the primary data here.

3.4.1 Sampling Plan - Sampling is an effective step of collection of


primary data and has a great influence on the quality of results. The and sampling sampling plan includes the population, sampling size design.

Population:
The study aimed to include the banks of Yamuna Nagar and the customers of different banks.

Sample Size:
The sample size for the research would be 50 customers and 4 banks.

Sample Technique:
Random sampling technique is used.

Method Of data collection


Primary data collection method is used to collect the data. Here questionnaires are used for the collection of data about their viewpoints and what are their responses towards the E- baking. The secondary data was collected through various websites, books, journals etc

3.5 Data analysis and interpretation


Data analysis and interpretation should be done with the help of the diagrams and the analysis of the data. The average method is use to analyze the data and to find out the conclusions.

Significance of the Study


The study helps to find out the satisfaction level of the e-banking users and the to know about their views towards the E- banking. It also helps me to know that how internet banking impact the bankers and the customers and how its effect their working life. It helps me to know the satisfaction level of the E-banking users.

Limitations of the study


1. Time factor. 2. Although the data has been quantified as much as possible, yet the possibility of bias cannot be completely overruled.

Scope of the Study


With the rapid and significant growth in electronic commerce, it is obvious that electronic (Internet) banking and payments are likely to advance. Researches show that impact of Internet banking on cost savings, revenue growth and increased customer satisfaction on Industry is tremendous and can be a potential tool for building a sound strategy. However, it has raised many public policy issues before the banking regulators and government agencies. Interestingly, reliable and systematic information on the scope of Internet banking in Indian context is still not sufficient, particularly what it means to the consumers and the bankers. The paper fills significant gaps in knowledge about the consumers perspective of Internet banking, trace its present growth and project the likely scenario. The paper identifies the weaknesses of conventional banking and explores the consumer awareness, use patterns, satisfaction and preferences for Internet banking vis--vis conventional form of banking and also highlights the factors that may affect the banks strategy to adopt Internet banking. It also addresses the regulatory and supervisory concerns of Internet banking.

Significance of study in future

India is a fast developing economy in the world and it is getting developed very vastly. Today E- banking has become the backbone of the india economy. It is growing with a great speed and its helping the organization to grow in aright and profitable manner. As the current research helps the customers and the bankers to know about the impact and the effects of the E-banking and how they can overcome the problems of phishing and hacking and accessing the internet banking with great ease. It helps to know about those areas where one face the problem regarding the internet banking uses.