MODERNISATION OF

BANKING SYSTEM

INTRODUCTION
India is developing country which is growing at a fast
pace. There is a tremendous revolution in the banking
sector. Traditional banking has now changed to
Electronic banking and personal wallet is known as E-
wallet. Electronic banking basically refers to performing
banking functions or transactions using a smart
technologically inclined device or the internet.
Information Technology has recently influenced banking
operations, transactions and service delivery. It has
provided a channel through which banking is done in
convenience, thereby, reducing customer queues in
banking halls, administrative expenses and the
complexities associated with traditional banking.
However, the disadvantages of electronic banking are
quite significant. They include unauthorized data access,
data loss and fraudulent activities. Using the internet,
banks display all relevant information regarding their
products on their website which is easily accessible to
customers. Through modern technology, branches are
networked using terrestrial or satellite links such that
customers can visit any branch of their bank to transact
business and transfer funds both locally and
internationally. 

OBJECTIVES

1. To study the changes between the oldest banking

system & the today’s modernized banking system of
India.

2. To know in detail about the new invented

technologies for banking in India.
 3. To know how the new banking technologies are
helping the customers for their easier and
convenient banking.

4. To ascertain the development in the banking system

of India because of the modernized technologies &
strategies used by banks for their growth.

5. To understand the level of satisfaction &

convenience of those customers who had used the
services provided by the banks.

RESEARCH METHODOLOGY
The present study is based on the secondary data
collected from different journals, magazines, sites and
published data from various issues of RBI and different
Public sector banks. Various studies on this subject have
also been referred in this study. Technological Evolution
of IT in Indian banking industry the technological
evolution of the Indian banking industry has been largely
directed by the various committees set up by the RBI and
the government of India to review the implementation of
technological change. No major breakthrough in
technology implementation was achieved by the industry
till the early 80s, though some working groups and
committees made stray references to the need for
mechanization of some banking processes. The early
1980s were instrumental in the introduction of
mechanization and computerization in Indian banks. This
was the period when banks as well as the RBI went very
slow on mechanization, carefully avoiding the use of
computers to avoid resistance from employee
unions. However, this was the critical period acting
as the icebreaker, which led to the slow and steady
move towards large scale technology adoption.

SAMPLE SIZE
The sample size of the survey size is 50.
AREA
The survey is conducted in South Delhi.

SCOPE OF THE STUDY

Recent growth in technology and innovation has fast-

tracked the desire of customers of banks for exceptional
services to meet the current trend of technological
advancement. Contemporary studies on e-banking
acknowledges that factors that drive customer
satisfaction are security/trust, design, availability,
convenience and reliability with availability, convenience
and reliability being the most influential factors of e-
banking on customer satisfaction . Apparently this study
concentrates on e-banking availability, convenience and
reliability and the effect on customer satisfaction.
Convenience is a dimension of e-banking that enables
customers to access e-banking services at anytime and
anywhere. E-banking offers customers 24/7 banking
services. E-banking customers are able to check their
account balances, pay bills, apply for loan, trade
securities and conduct other financial transactions.
Customers become satisfied when they are able to
perform their banking transactions at any location and
any time convenient for them.

Statement of the Problem

The point of investigation that is explored in this research
is electronic banking in general particular. Electronic
banking as it has demonstrated the velocity of its growth
is incredibly fast and efficient. It has allowed individuals
including companies to perform their banking businesses
from their homes or offices in a very cost-effective way.
Studies have shown that with this new technology, it has
become possible for both the banks and customers to
have an immediate insight about the status and
operations of their accounts
This study focused on the opportunities and
challenges that the introduction of electronic banking
has brought in India. On a deeper level the research
aims to acquire better understanding of the factors
influencing the development of electronic banking.
The research problems in this research can be
formulated as:

 What are the main opportunities for banks to

adopt and implement electronic banking? The
opportunities will be examined in the light of the
reduction of costs and marginal profit.
 What are the main challenges that may delay
development of electronic banking in India?

We will examine how the e - banking will affect

productivity & efficiency, and profitability of banks.
The research aims to identify the important
challenges for development of electronic banking in
India.

Participation in electronic banking can remain

underdeveloped if customers encounter low level of
security, widespread fraud, cultural resistance,
poverty and poor operational infrastructure and
management. Participation may also have been
affected by the skill required for electronic banking
technology and the service level provided by the
banks. It is known fact that the application of a new
technology will depend on how the technology is
being perceived and embraced by the customers.
There are many factors that have led
underdeveloped countries being too slow in the
application of modern technologies. Some of these
factors are the ones cited above.

Questionnaire for
Employees
NAME-
AGE-
PHONE NO.-
OCCUPATION-

1. What do you think that modernization in banking system

reduces the work load of employees?

A. Yes
B. No

2. Approximately how many people visit your bank web site

per day?
A. Less than 1000
B. 1000 to 5000
C. Above 5000
D. Others

3. How long has your bank been providing Internet Banking?

A. Less than a year

 B. 1 to 5 years
C. More than 5 years

4. How frequently do you update your website?

A. Daily
B. Weekly
C. Monthly
D. More than once in a month for every update

5. What was the reason behind introduction of internet

banking?

A. Because of competition from foreign banks

B. Man power shortage
C. Qualitative customer service
D. Faster transactions & Time saving
E. Any other

6.How do you make your potential customer aware of your

location on the Net?

A. Advertising on the Net

B. News media
C. Banks publications
D. Any other

7. Employee Benefits with Electronic banking. Rank

(12345)
 A. Minimizes the cost of transactions [ ]
B. Saves time [ ]
C. Minimize inconvenience [ ]
D. Provided up – to date information [ ]
E. Facilitates quick responses [ ]
F. Improves service quality [ ]
G. Minimizes the risk of carrying cash [ ]

8. How satisfied are you with Working through e-channels?

A. Highly Satisfied
B. Satisfied
C. Neutral
D Dissatisfied

9. Responses regarding the statement, “There is a

downsizing of employees due to the emerging
technology but efficiency in terms of productivity has
increased.”

A. Strongly Agree
B. Agree
C. Neutral
D. Disagree
E. Strongly Disagree

10. Difficulties Faced by the Employees to Work

with e-channels
 Very Some Not
Much What at all

A. Lack of
knowledge
regarding how
to use/ operate

B. Lack of proper training

C. Technology up gradation

11. Is behavioral training to the bank employees provided

during induction?

A. Yes

B. No

C. Cannot say
12. The contribution of new technology to the success of
banks in your opinion is:

A. Very high
B. High
C. Average
 D. Low
E. Nil

13. The factors that contribute to better services in:-

Traditional E-banks Both
Banks

A. Higher return in deposits

B. Overall Efficiency
C. Customer Shift
D. More Profit

14. What do you think which bank provide more facilities to

the employees?

A. Traditional banks
B. E- banks
C. Both
15. Employees of which type of banks are more satisfied
from job?

A. Traditional banks
B. E- banks
C. Both

16. No. of complaints (per month) from E- bank customers

as compared to customers of traditional banks.

No 1-5 More than

 Complaints 5

A. Delay in banking functions

from customers view point
B. High cost of service charges
C. Higher amount of minimum
Balance maintained in their
accounts
D. Problems regarding use of
ATMs or online banking
technologies
E. Lack of attention or im-
proper behavior of bank
employees
F. Wrong entries in their accounts

17. Do you think that branch has adequate staff to meet

customer complaints?.
YES ( ) NO ( )

18. Which category of the bank do you consider as most

technologically advanced?
Public sector ( ) Private sector ( )
19. Does online banking helps you to retain your

customer and helps in to discover new customer?

A. Yes

B. No

C. Cannot say

20. Is the security always updated to protect any theft or

fraudulent?

A. Yes

B. No

C. Cannot say