Management Thesis on

“Services provided by the bank

through

E-BANKING IN INDIA”

By
Abhinav Tawani

1
SYNOPSIS

A Thesis
2
 ON
“Services provided by the bank
through
E-BANKING IN INDIA”

Submitted by

ABHINAV A TAWANI

Enroll. No. 08OSB201

OSB Aurangabad.

A report submitted in partial fulfillment of

The requirements of

THE MBA PROGRAM

(The Class of 2010)

OSB Campus

Introduction
3
E-banking:-
Internet banking (or E-banking) means any user with a
personal computer and a browser can get connected to his bank -s website to
perform any of the virtual banking functions. In internet banking system the
bank has a centralized database that is web-enabled. All the services that the
bank has permitted on the internet are displayed in menu. Any service can be
selected and further interaction is dictated by the nature of service. Once the
branch offices of bank are interconnected through terrestrial or satellite links,
there would be no physical identity for any branch. It would a borderless
entity permitting anytime, anywhere and anyhow banking.
The delivery channels include direct dialup connections, private
networks, public networks, etc. with the popularity of computers, easy access
to Internet and World Wide Web (WWW), Internet is increasingly used by
banks as a channel for receiving instructions and delivering their products and
services to their customers. This form of banking is generally referred to as
Internet Banking, although the range of products and services offered by
different banks vary widely both in their content and sophistication.

Meaning of E-Banking
E-bank is the electronic bank that provides the financial service for the
individual client by means of Internet.

4
 Need of study
 To know the customers perception toward the E-banking service.
 I am interested in E-BANKING that I am taken this topic.

5
 Benefits of study

1) Organizing Educational Campaign To Create Goodwill Of Company.

2) Services It Effectively valuable to Create Place in the Minds of

Customer.

3) Availability should be increased by using various services Strategy.

4) Company should make service equal to or better than Competitive

Brands By All Means.

Executive summary
6
The project Report on:

Services provided by the bank through E-BANKING IN INDIA

Project carried at:

SBI, SBH, ICICI, ETC.

Project objectives:

 Find the customer satisfaction relating to E-banking service.

 To study the awareness of internet banking among the customers of

ICICI and HDFC banks.

Research Methodology:

Primary Data:

In this research with a sample size of nearly 20 customer’s data will be

available in form of questionnaire collected in terms of different questions
influencing the use of internet banking.

Internet banking is considered as dependent on awareness among customers

which will be studied with help of different independent variable. Only the
customers of HDFC & ICICI bank are taken as samples for study.

Secondary data:

Collection of information from different kind of books the data of the company
what they maintained.

7
 Conclusion
The basic objective of my research was to analyze the awareness among
customers for internet banking in INDIA. It gives direction to research tools,
research types and techniques. Although the findings reveal that people know
about the services but still many people are unaware and many of them are
non – users so the bank should by promotion try to retain the customers.
Banks should look forward to have some tie – ups with other financial
institutions to increase the service base.

8
Interim Report

9
 A Thesis
ON
“Services provided by the bank
through
E-BANKING IN INDIA”

Submitted by

ABHINAV A TAWANI

Enroll. No. 08OSB201

OSB Aurangabad.

A report submitted in partial fulfillment of

The requirements of

THE MBA PROGRAM

(The Class of 2010)

10
 OSB Campus

Table Contents
Chapter 1: Introduction…………………………………………………………16

Chapter 2: Observation of study………………………………………………..17

Chapter 3: Literature Review ………………………………………………….22

Chapter 4: Objective of study………………………………………………….27

Chapter 4.1: Limitation of study………………………………………………27

Chapter 5: Methodology………………………………………………………28

Chapter 5: Questionnaire…………………………………………………..….29

Chapter 6: Data analysis………………………………………………………32

Chapter 7: findings……………………………………………………………38

Chapter 8: Conclusions………………………………………………………39

11
 Acknowledgement
I would like to express my gratitude to all those who gave me the possibility to
complete this project.

I would like express my guide Mr. Mangesh Kela and I am also thankful to my
faculty guide Mrs. J.R. Phansalkar to continuous guidance.

In the end, I express our gratitude to my friend who inspired me in this work
without their inspirations the work were almost impossible.

Signature

Abhinav A Tawani

08OSB201

12
 Declaration
I am Abhinav A Tawani this project report is my original work and have not
been submitted in any form as a part of any other project.

Information derived from the published and unpublished work of other has
been acknowledgement in the list references in given in the bibliography.

Abhinav A Tawani

08OSB201

13
 CERTIFICATE

This is to certify that the Management Thesis titled” Services provide by the
banks through E-banking in INDIA”submitted

By Abhinav A. Tawani

Enroll No: 08OSB201

During semester 3rd of the MBA Program (The Class of 2010) embodies
original work done by him / her.

Signature of the Faculty Supervisor ----------------------------

Name (in Capitals) … Mrs. J.R. Phansalkar

Designation … Faculty Guide

Campus ... OSB Aurangabad

14
 Bibliography
Book:-

 E-banking in India

 Banking service operation (ICFAI)

 Indian Banking
 Money & Banking

Links Visited
www.google.com

www.icici.com

www.hdfc.com

www.wikipedia.com

Chapter 1

Introduction
15
E-banking:-
Internet banking (or E-banking) means any user with a
personal computer and a browser can get connected to his bank -s website to
perform any of the virtual banking functions. In internet banking system the
bank has a centralized database that is web-enabled. All the services that the
bank has permitted on the internet are displayed in menu. Any service can be
selected and further interaction is dictated by the nature of service. Once the
branch offices of bank are interconnected through terrestrial or satellite links,
there would be no physical identity for any branch. It would a borderless
entity permitting anytime, anywhere and anyhow banking.
The delivery channels include direct dialup connections, private
networks, public networks, etc. with the popularity of computers, easy access
to Internet and World Wide Web (WWW), Internet is increasingly used by
banks as a channel for receiving instructions and delivering their products and
services to their customers. This form of banking is generally referred to as
Internet Banking, although the range of products and services offered by
different banks vary widely both in their content and sophistication.

Meaning of E-Banking
E-bank is the electronic bank that provides the financial service for the
individual client by means of Internet.

16
 Chapter 2

Observation of study
DEFINITION OF E-BANKING

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

E-BANKING SUPPORT SERVICES

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

WIRELESS E-BANKING
Wireless banking is a delivery channel that can extend the reach and enhance
the convenience of Internet banking products and services. Wireless banking
occurs when customers access a financial institution's network(s) using

17
cellular phones, pagers, and personal digital assistants (or similar devices)
through telecommunication companies’ wireless networks. Wireless banking
services in the United States typically supplement a financial institution's e-
banking products and services.

Person-to-Person Payments
Electronic person-to-person payments, also known as e-mail money, permit
consumers to send “money” to any person or business with an e-mail address.
Under this scenario, a consumer electronically instructs the person-to-person
payment service to transfer funds to another individual. The payment service
then sends an e-mail notifying the individual that the funds are available and
informs him or her of the methods available to access the funds including
requesting a check, transferring the funds to an account at an insured financial
institution, or retransmitting the funds to someone else. Person-to-person
payments are typically funded by credit card charges transfer from the
consumer’s account at a financial institution. Since neither the payee nor the
payer in the transaction has to have an account with the payment service, such
services may be offered by an insured financial institution, but are frequently
offered by other businesses as well.

Banking Services through Internet:

1. The Basic Level Service is the banks’ web sites which disseminate
information on different products and services offered to customers and
members of public in general. It may receive and reply to customer’s
queries through e-mail;

2. In the next level are Simple Transactional Web sites which allows
customers to submit their instructions, applications for different services,
queries in their account balances, etc. but do not permit any fund-based
transactions on their accounts;

18
3. The third level of Internet banking service are offered by Fully
Transactional Web sites which allow the customers to operate on their
accounts for transfer of funds, payment of different bills, subscribing to
other products of the bank and to transact purchase and sale of securities,
etc. The above forms of Internet banking service the customer or by new
banks, who deliver banking service primarily through Internet or other
electronic delivery channels as the value added services. Some of these
banks are known as ‘Virtual’ banks or ‘Internet only’ banks and may not
have physical presence in a country despite offering different banking
services.

The Indian Scenario: -

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

as a strategic tool for business development.

• At present, the total internet users in the country are estimated at 9

lakh. However, this is expected to grow exponentially to 90 lakh by 2003.
Only about 1 percent of Internet users did banking online in 1998. This is
increased to 16.7 percent in March 2000.
- (India Research, May 29, 2000, Kotak Securities)

• Cost of banking service through the Internet from a fraction of costs

through conventional methods. Rough estimates assume teller cost at
Re.1 per transaction, ATM transaction cost at 45 paise, phone banking at
35 paise, debit cards at 20 paise and Internet banking at 10 paise per
transaction.

19
Plastic Cards as Media for Payment: -
There are four types of plastic cards being used as media for making
payments. These are:
1. Credit Card
2. Debit Card
3. Smart Card
4. ATM Card

1. Credit Cards: -

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

2. Debit Cards: -

A debit card is issued on payment of a specified amount by the issuing

company like a telephone company to a customer on cash payment or on
debiting his account by a bank.

Thus it is like an electronic purse, which can be read and debited by the
required amount.

It may be noted that while through a credit card, the customer first makes a
purchase or avails service and pays later on, but for getting the debit card, a
customer has to first pay the due amount and then make a purchase or avail
the service. For this reason, debit card are not as popular as credit cards.

3. Smart Cards: -
20
Smart Cards have a built-in microcomputer chip, which can be used for storing
and processing information. For example, a person can have a smart card from
a bank with the specified amount stored electronically on it. As he goes on
making transactions with the help of the card, the balance keeps on reducing
electronically. When the specified amount is utilized by the customer, he can
approach the bank to get his card validated for a further specified amount.
Such cards are used for paying small amounts like telephone calls, petrol bills,
etc.

4. ATM Cards: -

The card contains a PIN (Personal Identification Number) which is selected by

the customer or conveyed to the customer and enables him to withdraw cash
up to the transaction limit for the day. He can also deposit cash or cheque.

Chapter 3

21
 Literature Review
A new review by Tower group of 10 top US e- banking web sites evaluated
several aspects of core online banking components. Group found that there is
difference in terms of actual functionality and usability. Among different banks
and their services.

The UK's first home online banking services were set up by the Nottingham
Building Society (NBS) in 1983 ("History of the Nottingham". Retrieved on
2007-12-14.). The system used was based on the UK's Prestel system and used
a computer, such as the BBC Micro, or keyboard (Tan data Td1400) connected
to the telephone system and television set. The system (known as 'Home link')
allowed on-line viewing of statements, bank transfers and bill payments. In
order to make bank transfers and bill payments, a written instruction giving
details of the intended recipient had to be sent to the NBS who set the details
up on the Home link system.

An American study conducted last year by Booz-Allen projects that by the year
2000, 16 million US households will be using Internet banking. While these
numbers do not appear to be significant as compared to the total population,
each Internet user is projected to be 50-250% more profitable than the
average banking customer. It is expected that these Internet customers will be
some of the banking system's most profitable customers representing close to
30% of all retail banking profits. The study projects that by 1999, 1,500 banks
will have Internet Web sites and at least 500 of these banks will be offering
full-fledged Internet banking services.

In 2001 Micro banker send detailed questionnaire to the leading vendors of

internet banking software27 companies responded with information on thirty
programs the aggregate outcome of the outcome was that almost all the
companies have developed functions for internet banking and have inbuilt
feature to aid with one to one marketing on the web.

ICICI Bank
22
 ICICI Bank Online Banking Services provide the largest private bank in
India right here at your desktops. Banking becomes a pleasure as the
transactions and services become instant with ICICI Bank online Internet
banking. The services provided are totally secure and unique. These cover
online account transactions and operations, credit card and account
applications and payments, share trading and investments through mutual
funds, bill payments, statement generation and a virtual demo of each
service. See in brief in final report.

Role of customer when using e-banking

 You can access ICICIBank.com only by using your User ID and Password.
During the first login attempt, it is mandatory to change both passwords
- login and transaction – which would have been mailed to you by the
bank.
 If you forget your password, you will have written to us using the "Email
Us" option. The Bank will then issue a new password and send it to your
mailing address as per our records. Kindly check with your branch that
this address is updated...

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

 Logout of ICICIBank.com before moving on to other Websites.

 Before leaving the PC please "close" the browser.

 Do not write your ICICIBank.com login name or password anywhere.

23
  Do not leave your login name and password such that someone sitting at
your computer could see them.

 Never reveal your ICICIBank.com login name and password to anyone

(no representative of ICICI Bank will ever ask you for your
ICICIBank.com password).

 Notify ICICI Bank immediately if you notice any unusual account activity.

 Keep all documents that include your account information in a secure

location.

 When you login you can view the date and time of your last log in.

Features offered by ICICI bank for internet banking

 Balance enquiry and statement

 Transfer fund online

 Card to card fund transfer

 Use debit card online

 Prepaid mobile recharge

 Subscribe for mobile banking

 Link bank account to ATM

 Lock / activate debit cards /ATM

 Request a cheque book

24
  Stop payment

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

Features offered by HDFC bank for internet banking

 View account balances and statements

 Transfer funds between accounts

 Request stop payments

 Pay bills

 Create fixed deposit online

 Order cheque books

25
USE OF E-BANKING IN INDIA FEOM LAST FEW YEARS

Year 2002 2003 2004 2005 2006 2007 2008 2009

Incr. 9 12 15 20 25 32 40 50
%

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

26
 Chapter 4

Objective of study
 Find the customer satisfaction relating to E-banking service.

 To study the awareness of internet banking among the customers of

ICICI and HDFC banks.

Chapter 4.1

Limitation of Study
 Banks are not giving me all information about E-banking services.
 They do not permit to meet any of the employees in their bank.

Chapter 5

Data collection
Primary Data:

27
In this research with a sample size of nearly 20 customer’s data will be
available in form of questionnaire collected in terms of different questions
influencing the use of internet banking.

Internet banking is considered as dependent on awareness among customers

which will be studied with help of different independent variable. Only the
customers of HDFC & ICICI bank are taken as samples for study.

Secondary data:

Collection of information from different kind of books the data of the company
what they maintained.

Methodology
Once the findings are finalized by a research, suggestions should be made for
the betterment of enterprise.

The data collected from questionnaire will be tabulated and analyzed so that

The result can be presented as simple as possible. There are a number of ways
like

o Pie-chart
o Graphs

Questionnaire:-
1. Name of the customer:-

2. Do you like E-banking

a. Yes
b. No

28
3. Tick which bank you preferred…
a. Icici
b. Sbi
c. Sbh
d. Axis
e. Union bank
f. Hdfc
g. UTI Bank Ltd
h. Bank of Punjab Ltd

4. Why this bank

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

5. Which type of service mostly you use?

a. Balance and transaction history search

b. Transfer fund online

c. Card to card fund transfer

d. Open FD

e. Lock / activate debit cards /ATM

f. Request a cheque book

g. Stop payment

h. Railway pass / ticket

29
 i. Shopping

j. Share payment

6. Services of the bank are….

a. poor
b. good
c. Very good

7. Are you satisfied with the using of E-banking?

a. Yes
b. No

30
 Final Report

Chapter 6

Data analysis
1) Users of E-banking

Yes 65%
31
 No 35%

2) No. of user of the banks

Icici 20%
Sbi 30%
Sbh 20%
Axis 10%
Union 8%
Hdfc 12%

32
3) PREFERENCE FOR ONLINE BILL PAYMENT SERVICES

Yes 60%
No 40%

33
4) PREFERENCE FOR ONLINE SHOPPING

Yes 70%
No 30%

5) PREFERENCE FOR ONLINE FUND TRANSFAR `

Yes 35%
No 65%

34
6) SATISFIED CUSTOMERS

Yes 65%
No 35%

35
7) PERFERRED MODE OF PAYMENT (TO BANK)

CHEQUE 50

CASH 25

E-BANKING 25

8) SPEND PER BILL FOR ON LINE BILL PAYMENT

36
 ABOVE Rs.10 21

BETWEEN RS.5-10 11

BELOW RS.5 32

NOTHING 36

37
 Chapter 7

Findings
1. In the users ratio of internet banking 65% of customers are using this
service.
2. More banks are connecting to the any software co. to running the E-
banking service. In these services the Sbi banks is top in service of E-
banking.

3. The services that are mostly used by maximum customers are

transactions, online trading, bill payment, shopping etc.

4. The mode of the cash deposit in bank is for use to online truncation
cash, cheque & e-banking.

5. Different banks different charge for online service.

Suggestions
1. To prevent online banking from remaining customers to prompt this
service through advertising co.
2. After repairing this basic deficiency, banks must ensure that there
services is competitive.
3. Banks is not take more charge from there customers.

38
 Chapter 8

Conclusion
The basic objective of my research was to analyze the
awareness among customers for internet banking in INDIA.
It gives direction to research tools, research types and
techniques. Although the findings reveal that people know
about the services but still many people are unaware and
many of them are non – users so the bank should by
promotion try to retain the customers. Banks should look
forward to have some tie – ups with other financial
institutions to increase the service base.

39