Chapter – I INTRODUCTION

Banking is becoming more of a game of ideas than any other business: building new products that attract customers, creating new services and learning new skills. It is also becoming an extensive marketing exercise as much as journey up the technology ladder. In order to improve customer service, increase volumes, reduce costs and justify their existence in the market, banks are spending on information technology according to their capacity and future growth plans. IT has changed the paradigms of business in many service industries. One industry that has really felt the impact of IT has been banking sector. Credit card and ATMs were only the first step away from physical cash. The next major step has been introduction of Internet and Mobile banking and that is likely to be the most important of future. Technology is used in banking business to lower costs, increase productivity, improve the way-service is delivered, put more information in the hands of service representatives, personalize the service, collect data on customer needs, add value for the customer and build relationships with customer.

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Banking in India has seen the induction of new technologies during the decade, broadly computerization and networking. This has opened up new avenues for diversification and augmenting revenues. Coming time, ahead, will usher in electronic- banking at a truly national level. Of late, the Indian banking industry has embraced information technology not only as a means of automating manual operations but also as a strategic weapon. The customer channel at bank branches 15 gradually moving out of the confines of "brick and mortar banking" to "customer- centric banking" and this is due to the induction of Electronic Clearing System (ECS), Automated Teller Machine (ATM); and Credit cards / Debit cards. On the anvil is Electronic Fund Transfer at point of sales (EFTOPS), Home Banking, Smart card loaded with e-cash and the new revolutionary leader 'Internet Banking'. Most of the banks are now networking their branches, Networking service branches will permit the electronic communication between bank branches across the country. BANK NET is to be domestic data communication network for instant receipt and dispatch of information for internal use as well as interbank communication. Installation of VSAT at remote locations is a major step in ensuring communication link throughout the net. Branches will have wide spread connectivity. Internationally through SWIFT i.e. Society for Worldwide Inter-Bank Financial Telecommunication.

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With the increasing and continued globalization of capital and financial markets, banks can ill afford to be left behind. Worldwide banks are growing in size by communication and technology, which has left other banks uncompetitive in the market. Technology particularly computer; and

communication has generated economies of scale unthinkable a few years ago. Banks have also begun spread to serve communities, continents apart. So, technology will play a major role in increasing efficiency and courtesy as also the speed of customer service. In the changing banking scenario Tele banking, Credit card, ATM card, ECS, EFT will be dominated by the customer on a aggressive scale. Infact, banks, which do not see the writing on the wall and do not take pro-active steps, will be out of the race in an era of competition. There is a saying that "Nothing is permanent but change ". Certainly world events and their impact on banking have proved this beyond doubt. Through information technology India's banking system has changed and improved its customer service, its product range and its general health considerably over the last 7 or 8 years. With globalization sweeping through the financial services industry, intense competition, reduced margins and increased customer expectation will be the key challenges facing by financial institutions. The growth of e-banking

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will make the banking essentially customer-centric. Most of. the banks will be becoming increasingly reliant upon their information systems. Increased competition and improvements in the information technology front have necessitated the need for up gradation of the technology in the banking sector. E-banking is the coming wave that banks are riding. E-banking offers cost effective and convenient way to access the information related to the accounts and transact business and exchange information globally. Banks are making inroads into electronic-banking. It could be through internet based banking, tele-banking, WAP enabled banking, ATM cards etc. The fact that requisite infrastructure is also being put up by RBI in the form of 438 VSAT Networks creating the environment under which e-banking will have sound health, leading to real time transactions, lesser transaction costs, better internal control, higher efficiency and productivity levels. This could be shown from the fact that in India there are 3.5 lacks registered users of internet banking, 1200 ATM booths. The very concept of electronic banking or e-banking (also called internet banking or banking on line) is more prevalent in the technologically developed (also cash rich) parts of the world such as Europe and the US. Simply put: it does not involve any physical exchange of money, but its all done electronically, from one account to another, using the internet.

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But sales of retail banking products (schemes. By mid 1999. The scene in the US is not different. worldwide sales of internet banking application reached $ 326 million in 1999 (from $ 93 million in 1998).845 according to Blue Sky International Marketing. The US now has about 6. and 107 times less than that a physical branch transaction.3 million people banking online. another US-based research firm. the number of online bank has been mushroomed there. this number was 1.7) million households are expected to also pay bills online.2 percent of the world's population is net users and of these only a tenth do banking online. IDC (International Data Corporation) reports that. 5 .If we take Europe.2 million in 2004. for instance) have shot up. Acceptance too seems to be quite high.245 in the same period. In late 1998. The numbers are just too small to call this a revolution just yet. A recent D3tc7qLle5t report2 forecast that the number of US households banking online will reach 24. Only about 2. About 57 percent of those predicted to bank online (13. 54 times less than that of a telephone transaction. The cost per transaction through the internet is 27 times less than that through ATMs (Automatic Teller Machines). according to a study by Cyber Dialogue. For countries such as India this provides tremendous opportunity. a US based research agency. there were only 863 internet-enabled banks. Of these the number of banks that allowed customer to make online transactions has jumped from 448 to 1.

Banks have now clicks and bricks strategy. a number of banks are working in this direction. ICICI is working with Satyam Infoway to install ATMs in Satyam Cyber Cafes across the country. However brick and mortar branches will coexist with electronic delivery channels to provide multiple options to its customers. One way to support the cause of internet banking. as they offer a cost-effective option to the middle class to become netizens. that may not be possible for most of us and we'd usually get the office peon or family member to do a routine banking task. And it is bound to change the way banking is done in India. In addition. ICICI is in the process of putting up about 250 centers for this across India. However. Tele banking and more recently. HDFC.In fact. Working professionals know what it's like to visit a bank on their way to work. or sometime during the day. e-banking growth is not restricted to the four million odd PC owners in the country alone. Technology is now able to deliver the advantages of reach without the attendant paraphernalia and costs associated with a limbering branch network. ICICI bank is already planning to provide web-banks at every ATMs outlet. For many. In this way. that usually means spending an hour or two attempting to 'check' out the various procedures and deal with the familiar hassles. As ATMs. would be through cyber cafes. Global Trust Bank and Citibank. Net-banking practices proliferate and a bank will need fewer branches to achieve critical mass. In 6 . notable among them being ICICI.

7 .this scenario.A combination of regulatory and competitive pressures have led to increasing importance of total banking automation in the Indian banking industry. ATM machines and extended banking hours enable us to perform certain transactions at convenient times. It clearly shows that need of an hour is e-banking. the future would belong to those who would be able to offer excellent customer services by keeping pace with changing technology. Technology is playing a crucial role in the day to day working of the banks. but also all aspects of finance and commerce. anywhere. Significance of the study Indian banking industry is in the midst of an IT revolution . It is likely that some of the existing brick and mortar banks will go out of -business from failing to respond to the challenge of technology. The Internet and its underlying technology will change and transform not just banking. anyplace banking practical. anywhere. But it is Internet banking that is really making anytime. anyplace banking is a big convenience for all concerned. With the advent of ebanking It-here will be a paradigm shift in banking processes leading to greater customer satisfaction. However. Banks that have harnessed and utilized technology best have distinct and strategic advantage. the concept of anytime. Liberalization and the entry of large MNCs into the Indian economy was the trigger of IT adoption on Banks.

Credit/Debit cards to Electronic Funds Transfer and Electronic Clearing System. The research will prove significant approach in the development of banking sector. The focus of this research study is mainly around technology issues (ebanking) in the banks.1 Electronic Funds Transfer (EFT) EFT is RBI sponsored payment system to facilitate inter-bank and intercity funds transfer without the use of paper-based instruments such as cheques.1 Various services provided by Electronic-Banking This section shows the various e-banking services providing through different banks. banks are looking for those kind of profitable opportunities through which they will be able to focus on the customers to become 'Customer. Now in the fast changing world. DDs etc. In the current promising economic scenario. which are expected to change the way the banking has been done before. It includes various services ranging from stand alone ATMs.IT adoption has been rendered a priority during the past 2-3 yrs.Centric'. Mobile banking. 8 . Tele banking. adoption of IT could become key to increase market share and profitability. The study will throw light on the benefits of these services to the customers as well as to the bank. 1. These are discussed below: 1. Net banking. E-banking is becoming the way the most of the banks are riding upon.

Most bank officials agree that publicizing and marketing these facilities should be a priority since many customers are used to conventional methods of transaction: telegraphic machinery or by the cheques.25. (a) The salient features of the EIFT scheme are as follows:  EFF operates at 4 metros and is likely to be extended to other centers.  Maximum amount of transfer is Rsl. which in turn notifies the receiving bank to credit the individual with the mentioned amount. The money sent is credited overnight and can be withdrawn by the receiver the day after transfer.0.1 million can be transferred for a flat fee of Rs. All transferor needs is her account number. 9 . The details of the transfer have to be sent to the RBI.Electronic Funds Transfer (EM is probably the safest and fastest way to transfer money from your account to another individual in another city regardless of which bank she uses. The bank has discretionary powers to raise the limit for selected customers or a customer can break up the transactions in the multiples of upto Rs. The facility is only available in the four metros. A maximum of Rs. Syndicate bank.000/-.1million. At present various banks like ICICI bank.00.0. PNB etc. The facility can be availed of even if the branch from where you are sending the amount is not fully computerized. Money sent from abroad cannot be transferred through EFF. are providing this facility. SBI.

 Credit on third day.  Same commission as for DDs.  Branch sends EFF schedules to CAO (Central Account Office).  Local RBI communicates to destination RBI through RBI network.  CAO conveys to local RBI through floppy or dial up. Direct Credits  Dividend income from investment in shares/debentures. 10 .  Credits passed on to destination branch through respective service branch. (b) Procedure of EFT  Customer submits applications at the branch.2 Electronic Clearing System (ECS) ECS is a RBI sponsored payment system for effecting bulk and repetitive credits and debits without the medium of instruments. 1.  Remittances can be by transfer or cash. Accounts of respective banks with RBI credited/debited.  Branch credits beneficiary's account on receiving advice from their service branch.  Interest income from fixed deposits and bonds.

2. 6 million. College and Club membership fees. Indian Banks' Association (IBA) recorded Rs. Commission and other regular incomes. Property taxes and other regular payments.  Loan installments and Insurance premia. Apart from being a free service. By one estimate. 2001 the transactions have already touched over Rs.  School. the volume of transactions has increased this year. Thiruvanathapuram and Nasik.  Credit Card dues.1 million. has led to the increasing popularity of ECS. Income-Tax refund orders and other inward remittances. The maximum that a company can deposit is Rs. though here too. Direct Debits  Telephone and Electricity bills.0. the bank has the discretion to raise the ceiling.3 million through ECS in Year 2000 and up to 31st march. Salary and Pension. lacking in the EFF. It helps them in getting dividend payments in less time.  Water taxes. All a person has to do is to provide the company with details about the bank where the deposits should be made. Electronic Clearing System is blessing for those make equity investment. This geographical spread. The firm can then directly deposit the dividends into the shareholder's account. What stymies growth is 11 . from four metros the facility can now be availed of in 15 cities (those that have regional RBI offices) including Ahmedabad. Pune.

per transaction. The facility is provided by various banks like SBI.the number of firms that use ECS. HDFC bank.  Prevents loss of interest in transit. fraudulent encashment.  Corporates submit payment particulars such as beneficiary's name.. LIC. bank/branch name. IOC etc.000/. Credits are sent to the beneficiary's accounts through their bank by the RBI.  Available at various centers. there have been complaints of delay in transfers to accounts.  Eliminates the need to print the Interest/ Dividend Warrants. account no. At present the facivy is available with 65 indian companies. Despite assurances of speed and safety. ICICI bank.3 Tele banking 12 . to RBI through their banks. etc.00. (b) Benefits of ECS are:  Payment on due date. amount. like LM. Reliance Industries. 1. Syndicate bank etc.  Maximum amount is Rs l. (a) The ECS Scheme in Credits operates as follows:  Corporates obtain the details of bank accounts of their customers to which credits are to be sent. pilferage etc..

 Registering request for a statement of account to be sent by mail. etc. Citibank. office.  Registering request for a cheque-book.  Prevailing exchange rates for main currencies.  Statement of account over FAX at the customer's place. The facilities provided through Tele banking are as follows:  Balance enquiry. HDFC bank. The Tele banking facility is made easy to use with user-friendly menu driven simple instructions. round the clock. 13 . SBI. ICICI bank.Tele banking is a new concept of electronic. This interactive voice response (IVR) facility enables the customer to get a variety of services.banking where a customer can avail a number of services without actually visiting the branch. telephone booth. through a telephone call from home. Various banks are providing this facility like IDBI bank.  Cheques enquiry. The customer is provided with a personal identification number (PIN) and this ensures secrecy of the facility as only an authorized customer can enquire into his accounts.  Prevailing rates of interest on deposit schemes. Syndicate bank etc.

Tele banking is convenient and secure. through Tele banking. 365 days through the automated Tele banking menu and speaking to customer service officers. Tele banking brings you a host of services at your fingertips. Your transactions are protected by a T-PIN which is your personal password to your account. It is possible to provide other services such as payment of bills for utility services such as electricity. school fees etc. water. With ICICI Tele banking you can avail various services regarding: Saving account  Balance enquiry  Statement of account  Cheque status enquiry  Stop payment  Cheque book request 14 . the customer queries coming through Tele banking are handled by the Tele-server (a PC) fetching information from the database on the main computer system eliminating the need for any manual intervention. telephone.At the branch. For example ICICI Tele banking comes totally free of charge.

4 Net banking Information technology introduced another convenient way to access your bank account from around the world. through the internet. When you register for Net banking. Dial-a-draft/pay order  ATM lost card reporting FIxed deposits  Opening a fixed deposit  Checking fixed deposit details  Request of change in tenure  Request for TDS statement Credit Cards  Balance and Account related inquires  Statement of account  Lost/ Replacement card Others  Standing Instructions  Inquire about the ICICI product  Complaints and Suggestions  Payment instructions  Card pin re-issue  4.1. which you can use with your customer identification number to conduct transactions and get 15 . bank will issue you a password.

PNB and SBI etc. current and FD account and also on the tax deducted on one's FD account for the current and the previous financial year. the draft can be delivered only to the customer's address and not to any other third party. HDFC bank. One can open a FD account via the Net. One can order for an issue of a demand draft or a banker's cheque. will become a thing of the past. Bank of Punjab. You can request for a cheque book via the internet. Brief summary of various facilities provided through Net banking: 16 .up-to-date information on the products and services of the bank. round the clock. However. One can view all the transactions completed on an account for a specified period and get a copy via e-mail. One needs to provide data regarding the amount and term of the deposit and also the branch in which the amount is to be opened. Net banking makes it easy to transfer one's money from one branch in a particular city to any other branch in another city. One can inquire on the balance in one's saving. With Net banking the custom& will be able to transact with the help of a mouse and his visits to the neighborhood bank. One can give instructions over the net for stopping payment on cheques. which will take a few days to come. This facility is available in various banks like ICICI bank.

enter the location (in case of DD).  Ledger balance .The closing balance as of the pervious day.The amount available to you for withdrawal. and enter the name of the beneficiary and the amount.  Demand draft (DD) / Banker's Cheque (BC) Request .  Cheque status inquiry .You can request stop payment on a cheque or series of cheques online.  Uncleared Fund -The total amount of cheques deposited by you that are yet to be cleared.You can use the Net banking to avail various facilities like  Available balance . The DD/BC will be sent by courier to your mailing address on the records. Your cheque book will be sent by courier to the address on the records.You can view a statement of the transactions you have completed on your accounts for the current period.  Funds Transfer . 17 . even if they are in different branches.You can request for a new dheque book online.  Cheque Book Request . or a specific period determined by you.Net banking makes it easy W transfer funds between any of your accounts.You can have a Banker's Cheque or Demand Draft issued from your account.  Stop payment request . All you have to do is to select the account to be debited.  Account statement inquiry .You can use Net banking to view the status of a specific cheque that you have issued on any of your accounts.

Maturity date. Also one can intimate about the loss of an ATM card over the Net.You can access information on the tax deducted at source for all your FDs held at any of the branches for the current or previous financial year.You can open a fixed deposit account by following simple steps. In terms of safety. corporates can issue letters of credit and make enquiry's regarding bills sent for collection via this service.  New FD Request .You can use Net banking to access the details of your Fixed Deposit Account such as : Principal Balance (Initial and Current). Rate of interest. A special feature on Infinity is the facility for nicknaming all accounts to avoid remembering lengthy account numbers.  TDS Inquiry . ICICI bank with its Net banking service called 'Infinity' goes a step forward by allowing the account holder to transfer funds into another person's account within the bank.  Leave an instruction . HDFC bank allows one to have three login attempts after which a new password is given while ICICI bank will disable the password after five login attempts. Tel m of deposit.You can leave any instruction not currently included in Net banking service that you would like to perform on any of your accounts. More over. Maturity amount. Instructions for payment on maturity & Lien amount. FD Inquiry . 18 .

A multilayered security architecture comprising of firewalls.  Make sure no one can see the account login name or password you're entering when you log on to infinity. the effort is commendable. You can also contribute to protect the confidentially of your logirt name and password.  Logout of infinity before moving on to other websites. filtering routers. 1.  Notify ICICI bank immediately if you notice any unusual account activity.  Do not leave your login name and password such that someone sitting at your computer could see them.5 Mobile banking 19 . encryption and digital certifications will provide you the confidence that your account information is protected from unauthorized access.  Keep all documents that include your account information in a secure location.Considering the fact that these services are offered without charging a fee.  Do not write your infinity login name or password. ICICI bank takes utmost care to keep your account protected.  Before leaving the PC please "close" the browser.  Never reveal your infinity login name and password to anyone (No representative of ICICI bank will ever ask you for your infinity password).

 Checking a few last transactions. 1. With Mobile banking the following transactions are currently available  Balance inquiry of all your savings and current accounts held with the bank.  Cheque status inquiry.  Placing a stop payment on a cheque. Citibank. A help facility which allows you to check the text message required to perform a particular transaction.  Bill payment.  Bill presentation. 20 .6 ATM (Automated Teller Machine). HDFC bank. Bank of Punjab etc. all you have to do is to open an account with the bank and register for the Mobile banking. IDBI bank.  FD inquiry.Mobile banking is conducting banking transactions through the Mobile Phone.  Requesting a cheque-book.  Requesting an account statement. To use Mobile banking. There are many players in the banking sector that are providing this facility like ICICI bank.

using a plastic. fill out a deposit slip. 100 Deposits ATMs enable you to deposit cash or cheques into your account at any time. ATM allows you to do a number of banking functions such as withdrawing cash from one's account. put your cash or cheque into the envelope provide c4t the ATM. if you need to withdraw cash in a hurry. Moreover. which allows you to withdraw money in multiples of Rs. making balance inquiries and transferring money from one account to another . you can use fast cash option. and insert into the slot provided.ATM is electronic terminal that let you bank almost anywhere. All you have to do is select the account into which you want to make your deposit. magnetic-strip card and personal identification number issued by the financial institution. Facilities provided through ATM: Cash withdrawals/Fast Cash You can withdraw cash on your ATM card. 21 .

PIN/ Charge Using your ATM to change your personal identification number (PIN) assures you complete security. and the account into which you want to make the transfer. Your PIN number is not displayed on the screen. Mini statement request You can use your ATM card to check a few last transactions done in your account. being replaced by crosses to ensure the secrecy of the transaction.Balance Inquiry You can use your ATM card to check the balance in your account. 22 . Both accounts must be linked to your ATM card. All you have to do is select the account from which you want to transfer funds. Cheque Book /Statement Requests You can log a request book or account statement at the ATM booth and it will be delivered to you and it will save you the trouble of visiting a branch. then indicate the amount of money you want to transfer. Funds Transfer ATMs make transferring funds between two of your bank account easy.

Interest is charged on the amount of any extended credit and the holder is sometimes charged an annual fee. all you have to do is select a banking product.day transactions. and the information will be displayed on the ATM screen.to. It enables the holder to make purchase or withdrawal cash up to a prearranged ceiling. 1. Almost all the banks are providing this facility.end and reports have suggested that the figure may cross the 34000 mark within the next tour years. The Credit card allows you to 'buy now pay later' with quick and easy access to funds. ATM installation went up by almost 100 percent during the past two years. Credit card a plastic card indicating that the holder has been granted a line credit. with the balance taken as extended credit. and. the least possible documentation.7 Credit/Debit cards The Credit and Debit cards both are dramatically changing the way of day. the credit granted can be settled in full by the end of a specified period or can be settled in part.Product Information If you want to know about any of product offerings. like purchase of goods and payments of bills are being conducted. India had 3000 ATMs by 2001 march. no 23 . of course. It is put into use by swiping it through the machine at the purchase counter.

(b) Flip Side of Debit card 24 . but believe in using their own money (as opposed to credit from outside sources as in the case of Credit cards). the swipe of this card. a Debit card works much like a Credit card. unlike a Credit card that extends credit. It provides customer with enhanced access to his account.  No sign-up transaction or annual fees as in the case of credit cards. At the point of purchase. you don't have to carry around loads of cash and are equipped for emergencies. save for an account with the issuing bank. a Debit card debits money from your account during a transaction.automatically debits the payment from his bank account. But. A Debit card is for people who value the convenience of plastic. It means you can only spend as much money as you have in your account.  No eligibility criteria for a card.guarantors.  Your money earns interest till you spend it. The major advantage. The Debit card is changing the way people are banking and carrying cash. (a) Benefits of Debit Card  You can't spend what you don't have. When a customer uses a debit card at an outlet.

8 (a) New happenings in E-Banking Swadhan Swadhan is the name given to the ATM Network of public sector banks and some private banks.  No grace credit period available. distance and time.ATM outlet banks and its attendant problems of limited access. The 44 members between them have 85 operational branches whose clients could swap the existing ATMs card of one member bank for the Swadhan card to access the teller machines of this retail chain. 1. A self evident testimony to the demand for ATMs from customers which was first triggered off over a decade ago in 1987 when the Hong Kong and Shanghai Bank first introduced ATMs in Mumbai. Swadhan it was hoped that Indian bank's customers would be able to benefit from an ATM pool that solved the problems of single . a system of shared payments network. Not all merchant establishments are equipped to accept debit cards. The main features of this card are : 25 . Vashi and Thane have become a part of Swadhan. With. introduced by the Indian Banks' Association (IBA). Over the past year upto 44 banks in Mumbai.

STEPS is aimed at providing same day credit/debits for telegraphic transfers and collections between computerized branches. All transactions conducted in any of the member banks appear on the bank statement. which approves or declines the transaction request and notifies the switch. but only your own bank will provide this.No exchange fee is charged to change an old ATM card for a Swadhan card. It transmits the information. Transaction conducted through any of the member banks appear on a bank statement. (b) STEPS (State Bank Electronic Payment System) State Bank of India (SBI) has drawn up an ambitious project for devising a fully automated system for inter-branch transactions under its programme STEPS (State Bank Electronic Payment System). no overdraft works. accounts among members are settled and account balances are transmitted to each member institutions. The switch to the processor of the ATM. However.15000 by regular ATMs. which completes the transactions. Exception made for selected customers who can withdraw upto Rs. and / or data to the card-issuing bank of its processor. At the end of each day. IBA gives banks the discretion to decide a higher amount for withdrawal.10000 still this is lower than the average withdrawal of Rs. which is given only by your own bank. The bank proposes 26 . A switch routes all information and transactions among member institutions. then routs the card issuing bank's decision. Rs.3000 is fixed as the ceiling in withdrawal.

The RTGS interacts with the current account of the banks maintained with RBI and settles the payment instructions across these RBI accounts on a real time basis. (c) RTGS (Real Time Gross Settlement) In a key technology initiative. the Reserve Bank of India (RBI) has shifted the entire clearing operations to the real-time online mode. This project is expected to become shortly. (d) Share trading 27 . against two days taken now for intra-city cheques and around a week for outstation cheques. The RBI promoted RTGS provides on-line fund settlement of banking transactions on a real-time basis. The purpose for undertaking this exercise is to reduce the transaction processing and clearing to the lowest possible time.to set up a centralized server connected to all computerized branches through VSAT/leased lines/ dialup lines and routing of all interbranch transactions through this server. The proposed system allows clearing of transactions within a day.

9 Security in e-banking It has been observed that threat of security and large & continuous flow of resources required for maintenance of error. has been one of major deterrents for venturing into this field. But the unperceived threats need to be addressed so. it might be tougher for a burglar to burgle many branches of a bank. Many security features like firewalls. ICICI bank already offers its customer e-broking services through a ICICI brokerage service. therefore. encryption/clecryption.A number of banks have either set up or are in the process of setting up Internet trading facilities for their customers. public key cryptography. A constant R&D has to be in place to ensure a safe banking over cyberspace. Internet banking and WAP-banking have opened up the banks' network. which have been perceived so far. It is. Security is a key point to be addressed in the new phase of cyber-banking. a hacker has the whole bank on a platter in the absence of security. are being put in place to effectively safeguard these networks. HDFC too offers e-broking facilities through HDFC securities and e-Net facilities for equity brokerages. Whereas in the cyber-banking scenario. essential that adequate and redundant security layers should be in place to gain the trust of the users of technology.free and secured transactions in the E-banking / Commerce environment. In a real life environment. etc. These features safeguard us from threats. 1. 28 .

All messages entering or leaving intranet must pass through the fire wall which 29 . Only those who possess secret key can decrypt the message. It is extremely necessary to secure intranet data from being accessed by customers or business partners. Encryption This is technique of codification of the data of text into an up-readable format called cypher text. It is equally important that the security provision so put in place initially should be upgraded on periodical intervals in time with emergence of newer technologies so that the technology provides a safe to use the following basic security features which must be in place. Fire Wall This is a system designed to prevent un-authorised users accessing the private network. Client Authentication To ensure genuineness of the users.The following basic security infrastructure should be made available for operations. which are connected to Internet. Digital Certificate It is an attachment to an electronic message to verify that users sending a message is the same who he/she claims to be and to provide j ecerver with the means to encode.

To check the awareness and usage of their services by the customer. 2. To determine customer view point regarding their services. 30 . Objectives of the study The present study has the following objectives: 1.scrutinizes each message and blocks those which do not meet the specified security criteria.

. The relevant literature in this area is briefly reviewed hereunder: Singh (1999) found that the marriage of technology and banking has changed the face of global banking like never before. Physical transaction banking gave way to anytime banking and anywhere banking through ATMs. 31 .II REVIEW OF LITERATURE To formulate the problem and to point out the importance of undertaking this study. where the need for physical cash will be replaced by digital cash where cash balance and assets will be held in the form of computer chips reducing no. Internet banking & Mobile banking. The key to success in the changed environment will be one's ability to reach the client at his doorstep. of transactions and cost substantially.Chapter . This development is indeed good as it has immense potential for growth of a banking business in future. The paradigm of future is most likely to be anyhow money.centric. Verma (1999) talked about trend in commercial banking that the market has changed drastically that it has become largely customer. it is essential to present a brief review of the researches and studies on this subject. and meet his requirement of products and services in a customized manner. Thus depositor could access his account from any part of the world.

an ATM transaction is less than half this. at 45 paise. Coming times ahead. But Internet banking would be the cheapest at 10 paise a transaction. cinema tickets.Cherian (2000) concluded that the heavy investments in technology have enabled the banks to increase customer base without a proportionate rise in expenditure. Technology will play a key role in pulling down the transaction costs of banks but the real benefits will be derived when banks achieve the critical mass. deposits of bills etc. Tele banking is still cheaper at 35 paise a transaction and a debit card transaction costs just 20 paise. if a teller transaction costs Re. Transaction costs are expected to fall to a tenth of what they are at present. would be made possible through ATM booths. Cresci (2000) found that you don't have to have a brick and mortar presence to attract customers. This would make ATM booths a prominent place for 32 . According to statistics available. Goel (2000) talked about ATMs that banks are planning to turn its ATM booths into profit center through innovative measures. Technology is definitely going to play a dominant role in the success of the banks. As more and more people come to the internet and it allows them to cut costs and charge less for the same services and winwin situation for both banks and customers. Banks have made huge investment in technology to offer quality services to the customer. railway tickets. 1.

The same transaction done telephonically costs about Rs. Internet banking. Out of various delivery channels. These delivery channels inter alia include ATM.for now "Bricks" or "brick and mortar" is the tag given to old economy banks with large physical branch networks while "Clicks" refers to new economy online banking where in theory at least. costs would disappear. could cut costs by replacing "bricks" with cheaper new technology. Joe et al.17 to 25 and through the Internet when the volumes are right. about Rs.45-50. through an ATM it costs between Rs. Bricks have beaten up by the clicks. 33 . the Internet banking is emerging as a most cost effective and convenient delivery due to its inherent advantages.1-4. Telebanking. (2000) conducted a survey on e-banking and found that the view is that e-banking would transform the economics of the banking industry every one would be wired up. Goerge (2000) investigated that the todays banking is no longer confined to branches as the customers are being provided with additional delivery channels which are more convenient to the customers and are most effective to the banks. Gopinath (2000) revealed that a transaction through a bank branch costs about Rs.30-35. Mobile banking etc. banks.advertisement as well as earning fee based income and a good amount of float for the banks.

Those banks.Krishnamurthy (2000) revealed that banking is one sector that is rapidly changing. increase cross-selling opportunities and integrate new financial product. which are able to cut costs through technology. Now it is mobile banking that is the largest rage in technology convergence. improve customer data. The Net can help lower the cost of transactions. will alone be able to offer products 34 . ATM (automated teller machine) are now a necessity for banks and for the customers and no more enjoy the status of being a value service. Prasad (2000) concluded that in the retail-banking arena the banks are trying to become one-stop shops for all the financial services that the average customer could look for. Most banks also offer credit cards and dernat (dematerializations) accounts. Shapping (2000) talked about the effect of IT on cost impact that the democratization of information will also push costs down. The idea is to increase the total revenues per customer while reducing transaction cost and the technology is helping in doing so. making the cellular phone a prized possession for technology savvy users. considering the large population of investors in the country. Rao (2000) conducted survey on net banking and found that it firmly unleashed tremendous change and upheaval in banking sector. "More people than ever before are getting access to more information than ever before thanks to the Net".

Agnihotri (2001) in the article "IT way of getting cash" have described that the IT revolution has permeated the global retail banking industry. Banks are looking at ATMs as outlets where a customer can conduct any transaction that he can do in a bank. Phone banking is making a limited 35 . the potential to analyze trends such as how much of a bank’s deposits has come because of this facility .all of which can be put to good use. Bhasin (2001) concluded that the brick and mortar branch continues to be the predominant channel of old generation banks. mostly located at a branch. But its time to look beyond this.visibility.that suit the wallet of the customers. It has broken down business models and has given customers an unprecedented position of power. They have become a major influencing factor on banking strategy overall. brand equity. Shetty (2000) found that banks are repositioning the humble ATM from being a cash dispenser to a visible effective marketing weapon. In the space of a decade the internet as well as the intranet have evolved into legitimate distribution channels for financial services. Soldanha (2000) said that setting up an ATM network brings with it a whole lot of intangible benefits as well . The internet will ultimately become the largest channel. commanding 50% of all transaction worldwide and lower the procession cost. They have a few online ATMs.

beginning. From this. The review of literature shows that a lot has been written on the concept of Electronic Banking and the problem envisaged. and some banks have plans to offer e-banking in due course time. It is dear from the type of the studies reviewed that none of the studies has explained electronic-banking in India. Customer interaction of old generation banks would continue to revolve around the branch until they network all-or most of their fully computerized branches. 36 . Some banks now operate with fully centralized databases that optimize costs compared to inter-connection of distributed databases. need for my study arose. All banks should recognize the potential threat of computer frauds and crimes. so that the future of computerization becomes safe and sound. and focus on its prevention. In contrast new generation banks started off with all branches fully networked. Dhall (2001) talked about crime in banking sector with the use of computer that widespread use of computer networks in the banking industry worldwide has only made embezzlement easier-the criminals do not even have to forge signatures or steal or alter cheque.

Sample selection. Definition of population. The chapter is divided into different parts viz-Conceptual Framework of the research problem. Every aspect of the e-banking services was minutely studied during the research. Internet banking. Questionnaire was designed to gain information on customers' awareness about e-banking services. Tele banking.3 Sample Selection 37 . Electronic-banking services include all those services that are provided in the banking sector with the help of information technology. 3.2 Definition of population The population for the study comprises of all the banks providing ebanking facilities and the customers of these banks in Ludhiana 3. 3. Collection of data.1 Conceptual Framework In this study on electronic-banking services -five banks were chosen to study various e-banking services. Mobile banking. Analysis of data & Interpretation of data.Chapter-III RESEARCH METHODOLOGY This chapter describes the research methodology of the present study. Electronic Clearing System. It includes ATMs. Electronic Funds Transfer and Credit/Debit cards.

3. purpose for using these services and their experiences in using electronic banking services. ECS etc was taken for the present study. Averages etc. The method employed for the selection of these banks was judgment sampling. dichotomous.4 Collection of data A non-disguised structured questionnaire was designed comprising all relevant questions from all aspects of the study to extract the maximum and the best possible information. The respondents were asked questions to know their awareness of electronic-banking services.banking like ATM.A sample of all the banks providing e. 100 customers from the banks were selected for gathering primary information. usage of electronic-banking services. Convenience sampling was used for the selection of respondents. The questions included were open-ended.5 Analysis & interpretation Analysis of the questionnaires was done using simple statistical tools like Percentage. Information from Managers/Staff of the banks was collected through personal visits at the bank. bank journals. Mobile banking. magazines. and bank manuals like IBA bulletin. Interpretation of likert scale was done as under: 38 . 3. likert scale and multiple choices. reasons for their use. Internet banking. The Economic Times etc. Secondary data to know the functioning of various e-banking services in today's banking sector was collected from various newspapers.

of respondents.(a) + 2 score for strongly agree (b) +1 score for agree (c) 0 score for indifferent (d) -1 score for disagree (e) -2 score for strongly disagree Scores were summed up and divided by no.g. In ranking questions mean rank accorded by the respondents was taken for evaluation. The total score was thus calculated as follows. To find out the mean rank. lowest rank has been given highest score and vice versa. the highest mean score was given rank 1st and so on. After all the mean scores were calculated. Total score = Sn Fn = = Sn*Fn Score awarded to nth rank Frequency of the nth rank The mean score was calculated by dividing the total score with sample size.6 Limitations of the study 39 . they were arranged in order of descending order e. 3. scores were given in reverse order.

(2) The selection of the respondents was based on convenience sampling and it might not be true representation of the entire universe. (5) Since a -small size sample has been taken. the possibility of sampling errors can't be ruled out in research study. (1) Owing to the paucity of time and lack of financial resources. yet. 40 .This study is subjected to certain limitations. because of the risk of ambiguities and misinterpretation on the part of the respondents. the research is concentrated only in Ludhiana. (4) Although utmost care has been taken to get accurate results. (3) Due to busy schedule of Managers under study. These are mentioned below so that findings of the present study can be perceived in the correct prospective. some elements of inaccuracy could have crept in. (6) Not all the respondents were always forthcoming with their views on certain questions. The gen6ralization made on the basis of this study may not hold good for other parts of the country. researcher had to resort to short interviews and only major points on the topic were discussed so chances are that minute details may be missed.

The findings are presented according to the objectives of the research. 4.1. The chapter is divided into various sections.banking services provided through various banks. The respondents were asked about the various e-banking services. The third part deals with suggestions to be made to improve the electronic-banking Services. 41 .IV RESULTS AND DISCUSSIONS The chapter presents the results obtained after analysis of the primary data collected from the questionnaires and secondary data obtained from various secondary resources. The first part deals with the study of electronic.1 DATA ANALYSIS In this section data collected from questionnaire is analysed and its interpretation is written.Chapter .1 shows the awareness of various e-banking services among respondents. Banks have started providing various types of e-banking services. Table 4. 4. The second part contains the data analysis and its interpretation.1 Awareness of E-banking services E-banking is the coming wave that most of the banks are riding upon.

2 illustrates the respondents' knowledge about e-banking services from various sources.2 Knowledge of E-banking through various sources Nowadays customers are becoming more aware of e-banking services. 4. it has been found that ATMs and Credit/Debit cards are very much in the awareness of respondents. Table 4. 62% respondents have shown their awareness of Mobile Banking and 60% of Tele banking. clearly indicates that these facilities should be extended to more places and more parties so that there should be more awareness of these facilities. 42 .1. of respondents aware of services 100 78 60 52 96 28 Percentage 100 78 60 62 96 28 On the basis of the responses. 78% of the respondents are aware of Net Banking.1 Awareness of E-Banking Services Services ATM NET BANKING TELE BANKING MOBILE BANKING CREDIT/DEBIT CARDS ECS & EFT No.Table 4. Only 28 respondents have shown the awareness of Electronic Clearing System and Electronic Funds Transfer.

3 Various banks providing E-banking services There are various banks providing e-banking services. of respondents 72 28 60 30 10 Percentage 72 28 60 30 10 PRINT MEDIA INTERNET TELEVISION BANK REPRESENTATIVES OTHERS (Friends etc. No.2 Knowledge of E-banking through various sources Sources No. Table 4. Table 4.) The above data shows that 72 respondents out of 100 have shown that they have got the knowledge of e-banking services through Print Media. 28% of respondents have come to know about e-banking services -through Internet and 30% of respondents have got the knowledge of e-banking services through bank representatives. 4. Television has also played major role in spreading the knowledge of e-banking services.3 shows the respondents' knowledge of various banks providing e-banking services.1.Table 4.3 Banks Various banks providing E-banking services . of respondents Percentage 43 .

banks have got about 90%. 30% respondent’s shows that other private sector banks like Bank of Punjab. This shows that ATM is in very much use for banking transactions and customers have started preferring the ATM card for most of the banking transactions. It can be well inferred from the table that private sector banks provide many of the e-banking services. 44 .ICICI HDFC IDBI BANK OF PUNJAB CITIBANK SBI PNB 94 90 26 32 30 26 22 94 90 26 32 30 26 22 It has been found from the table that ICICI and HDFC. Public sector banks like SBI & PNB have got less response.1. responses showing that they are e-bank leaders.4 Ownership of an ATM Card The Table (4. IDBI. and Citibank are also in the race of e-banking.4) given below describes the data on the ownership of an out of 100 respondents studied. 4. 76 owned an ATM card.

1. 76 owned an ATM card. 45 . Table 4.5 shows the various factor considered while going for ATM card by respondents. of an ATM card.4 Ownership of an ATM No.Table 4.5 Factors considered while going for an ATM card. In order to find out the various factors which are responsible for increasing use. the respondents were asked to rank the factors which they considered while going for an ATM card. of respondents 76 24 Percentage 76 24 Yes/No Yes No Chart 4. This shows that ATM is in very much use for banking transactions and customers have started preferring the ATM card for most of the banking transactions.1 Out of 100 respondents studied. 4.

2 3. 24hr banking has got highest mean rank. 46 .1. convenience are also considered while going for an ATM card but less than 24 hr banking and wider accessibility. In order to see for which purpose ATM card is mostly used. Factors like time saving. the respondents were asked about the purpose for using an ATM card. This reveals that respondents seek ATM as 24hr banking products. Wider accessibility is another factor considered for using ATMs as it has got second highest mean rank.6 Purpose for using an ATM card ATM card helps in conducting many banking transactions.Table 4.35 3.4 1 Mean Rank 1 2 3 5 4 6 Factors 24 hr Banking Wider accessibility Time saving Speedier Convenient Others Different respondents use ATM card for different reasons and out of the various factors considered going for ATM. Table 4.6 shows the various purposes for which the respondents use an ATM card.65 3.5 Factors considered while going for an ATM card Mean score 5. speedier. 4.375 4.

Table 4. 64 respondents have shown that balance enquiry is another purpose for which they use ATM.1.6 Purpose Purpose for using an ATM card No. Deposit of cash/ cheques is done by 50 respondents. The respondents were then examined to see whether they were satisfied with the withdrawal limit set up by bank. of respondents Percentage Cash withdrawal Deposit of cash / cheques Balance inquiry Transfer of funds Account statement 76 50 64 16 48 100 66 84 21 63 From the table it is seen that cash withdrawal is the main purpose for which ATM card is used. Table 4.7 throws the data on the satisfaction of respondents about withdrawal limit set up by banks on ATM card. 4.Table 4.7 Satisfied with withdrawal limit There is limit set up by the bank on the withdrawal of amount through ATM card.7 Satisfied with withdrawal limit 47 .

of respondents 26 50 Percentage 34 66 Yes 34% No 66% 48 .2 No.Yes/No Yes No Chart 4.

As is clear from the table. This clearly indicates that banks should raise the withdrawal limit on ATM card. 4.1.10 times 10-15 times More than 15 times No. 6 respondents are using ATM card for 5-10 times in a month. Table 4. the respondents were asked about their usage of an ATM card. of respondents 4 6 56 10 Percentage 5 8 74 13 From the table it is seen that 56 respondents use ATM card for 10-15 times in a month on an average. 4. it can be inferred that customers have started preferring ATM for banking transactions.9 Problems faced while using an ATM card 49 .From the table it is clear that 50 out of 76 respondents using ATMs have shown that they are not satisfied with withdrawal limit set by bank through ATM.1.8 Usage of an ATM card in a month on an average In order to examine the increasing use of ATM card.8 Usage of ATM card in a month on an average Usage on average 0-5 times 5. Only 10 respondents use ATM for more than 15 times on average in a month.9 illustrates the usage pattern of ATM cardholders. Out of 76. Table 4.

9 Problems faced while using an ATM card Problem a) Not connected to server b) System does not allow to avail facilities when you required c) Unavailability of cash during festivals.10 reveals the various problems faced by respondents while using an ATM card. the respondents were asked about the problems they experienced while using an ATM card.In order to find out various problems in functioning of ATM. seasons and holidays d) Machine itself is not working 72 36 Respondents 18 60 It can be well visualized from the table that most of the respondents about 75% have experienced the problem of not working ATM. 36 respondents have faced problem of unavailability of cash during festivals.10. This reveals that different respondents have faced different problems and too indicates that functioning of ATMs are not up to the mark as ATM card holders are facing various kinds of problems. seasons & holidays. 4. Table 4. as 60 respondents have faced problem of Unavailability of facilities when required by them. Table 4. Usage of Mobile phone for Banking Services 50 .1.

1. 4. the respondents were asked about the use of Mobile phone for banking purposes. 20 respondents often go for it.11 shows the responses of the customers about the use of Mobile phone for banking purposes. it has been found that 56 respondents use mobile phone for the banking purposes and out of these 56. In order to find out use of mobile phone for the banking purposes. of respondents 20 36 44 Percentage 20 36 44 On the basis of responses. The reason was found that customers don't consider it very safe and also not many mobile phone companies are giving this option to the mobile phone users. 44 respondents have never availed this facility. The remaining 36 respondents are using mobile phone for some banking purposes.11 Purpose considered for using Mobile banking 51 . It shows that they perform most of the banking transactions through mobile phone. Table 4.10 Usage of Mobile phone for Banking Services Frequency Often Sometimes Never No.Nowadays Mobile phone can be used to conduct banking transactions. Table 4.

12 Problems faced while using Mobile banking 52 .11 Purpose considered for using Mobile Banking Factors Checking of accounts Balance enquiry Payment of bills Transfer of funds No. To see for which purpose it is used mostly.1.There are various purposes for which mobile banking is used.12. Table 4. 34 respondents out of 56 have shown that balance enquiry is other purpose considered for using Mobile banking and followed by a few respondents who use Mobile phone for banking transactions like payment of bills and transferring of funds. 4. of respondents 56 34 18 12 Percentage 100 61 32 24 From the table it is clear that 100% of the respondents use mobile banking for the purpose of checking of account. Table 4. the respondents were asked about the problems they experienced while using mobile banking. the respondents were asked about the purposes for which they use mobile banking. Table 4.10 reveals the various problems faced by respondents while using mobile banking. Table 4.12 shows the various purposes for which respondents use mobile banking. Problems faced while using Mobile banking In order to find out various problems in mobile banking.

53 . This reveals that different respondents have faced different problems.Problem a) Delay in delivery of message b) Network connectivity c) Traffic d) Burnout Respondents 33 24 39 9 It can be well visualized from the table that most of the respondents about 59% have experienced the problem of delay in delivery of message. 39 respondents have faced problem of traffic.9 have faced problem of burnout. as 24 respondents have faced problem of network connectivity.

13 Usage of Tele banking Yes/No Yes No No.13 Usage of Tele banking Tele banking is another important aspect of electronic-banking services. of respondents 38 62 Percentage 38 62 Chart 4. Table 4. In order to find out the use of tele banking services.3 Yes 38% No 62% 54 . the respondents were asked about use of tele banking.1. Table 4.4.13 shows the responses of customers regarding the usage of tele banking.

Data reveals that 38 respondents have used the facility of tele banking. this is expected to go up. 4.1. Table 4. This shows that 38% respondents use tele banking as more and more banks have started provided tele banking services. the respondents were asked about the use of tele banking.14 shows the list of various facilities for which respondents use tele banking. 55 .14 Facility for which they use Tele banking To see for which facility tele banking is used mostly.

the respondents were asked about the problems they experienced while using tele banking. request for pass book etc. have got less responses.14.Table 4.1.14 Facility for which -they use Tele banking Facility No.14 reveals the various problems faced by respondents while using tele banking. 4. Table 4. of respond ents a) b) c) d) e) f) DD making Alc balance enquiry Cheques enquiry Request for passbook Stopping payment Rate of int. 24 respondents use the tele banking for DD Making. 56 . Problems faced while using Tele banking In order to find out various problems in tele banking. most of the respondents are using tele banking for the purpose of A/c balance enquiry. on deposit 24 32 16 14 10 16 63 84 42 37 27 42 Percentage schemes Out of the various purposes of tele banking. this indicates that these are not very much used by tele banking users. Other facilities like cheques enquiry.

Table 4.9 have Lack of awareness.15 Ownership of a Credit card Credit cards. 4. as 24 respondents have faced problem of poor customer care. have helped in doing away wallets stuffed with fat weds of currency. This reveals that different respondents have faced different problems. Table 4.14 Problems faced while using Mobile banking Problem a) Authenticity of call receiver is not sure b) Poor Customer Care Service c) Traffic d) Lack of awareness among Tele Executives Respondents 17 24 19 9 It can be well visualized from the table that most of the respondents(24) have experienced the Authenticity of call receiver is not sure. of respondents Percentage 57 . 19 respondents have faced problem of traffic. to the some extent.Table 4.15 shows the number of respondents owning a Credit card.15 Ownership of a Credit card Yes No No. The respondents were asked whether they owned Credit card.1.

1. This shows that 54% of respondents have got Credit cards for banking purposes and remaining 46% of respond don’t own credit card.16 shows the response of customers towards usage of cards in a month on average.Yes No 54 46 54 46 Chart 4. Table 4.4 No 46% Yes 54% Yes No The table depicts that out of 100 respondents studied 54 were having Credit cards. 58 .16 Usage of card in a month on an average To find out the use of credit/debit card. the respondents were asked about the usage of Credit/Debit cards. 4.

16 Usage of card in a month on an average Frequency 0-5 times 5-10 times 10-15 times More than 15 times No.17. 4.17 Problems faced while using Credit cards Problem Respondents 59 .1.17 reveals the various problems faced by respondents while using credit cards. This tells that Credit cards are not often used in a month. the respondents were asked about the problems they experienced while using credit cards. A credit card is used for more than 15 respondents only by 4 respondents. Table 4.Table 4. Out of 54 respondents. of Merchant Establishments accepting the credit cards. Problems faced while using Credit cards In order to find out various problems in credit cards. Table 4. of respondents 34 10 6 4 Percentage 63 19 11 7 The data shows that 34espondents use credit card for 0-5 times in a month on an average. On being asked it was found that there are less no. 10 respondents are using the card for 5-10 times in a month.

1. The table given below (4. 21 respondents have faced problem of Less acceptance and 19 have faced problem of Less credit time .5 60 . of respondents 16 36 48 Percentage 16 36 48 Chart 4. as 24 respondents have faced problem of High interst rate customer care. This reveals that different respondents have faced different problems.18) shows the responses of' customers regarding access of internet banking. Table 4. 4.18 Access of Internet Banking Internet banking is another convenient way to do banking transactions from around the world.18 Access of Internet Banking Frequency Often Sometimes Never No.a) High Interest Rate b) Less Credit limit c) Less Acceptance d) Less Credit Time 24 26 21 19 It can be well visualized from the table that most of the respondents(26) are facing the problem of less credit limit .

52 respondents are using services of internet banking and out of these 52. data on the responses of customers showing the various reasons for using internet banking. 4.1. The data shows that 48% of respondents have never used internet banking.19 throws the. 16 respondents use internet for most of the banking transactions and remaining 36 respondents sometimes use intelnet banking.19 Reasons for using Internet Banking To find out the reasons for using internet for the banking purposes. the respondents were asked about the reasons for using Internet banking. 61 .It has been found that out of 100. Table 4.

of respondents 38 32 30 6 Percentage 73 62 58 12 The above data shows that more than half of the respondents (73%) have been using internet banking because of its more accessibility followed by 32 respondents who are of the view that internet banking is speedier to conduct transactions than others. 4. It also shows that 58% of the respondents use internet banking because of the convenient. A few respondents have gone for internet banking due to its cost advantage. the respondents were asked about the various purposes of using internet banking.20 Purposes of using Internet banking In order to find out the purposes for which internet banking is used.19 shows that various purposes for which internet banking is used by respondents.Table 4. Table 4.20 Purposes of using Internet Banking 62 . Table 4.1.19 Reasons for using Internet Banking Reason More acceptability Speedier transaction Convenience Reduction in processing cost No.

have got 24 responses out of 52. it was found that respondents were having doubts over the online transactions conducted through internet banking and it was security network required for using the internet banking and other reason was that there were not many corporate offering this facility.) (share trading No.21 illustrates the data regarding various kinds of problems experienced during internet banking by respondents. 63 . 34 responses out of 52 use the internet banking for A/c enquiry. Other purposes like share trading. Table 4. The data shows that only 14 respondents have conducted online transactions.Purposes Opening of account Online transactions Payment of bills A/c enquiry Others etc. 4. demat transactions etc. of respondents 42 14 18 34 24 Percentage 81 27 35 65 46 From the table it is very clear that the opening of account is the main purpose of using internet banking as it has got 42 respondents out of 52. On being asked the reason for this.1.21 What kind of problems experienced during Internet Banking The respondents were asked about what kind of problem they experienced during Internet banking.

4. 18 respondents out of 52 have faced problem in conducting transactions through internet banking.22 General view of E-Banking E-banking is going to change the way banking has been done before. of Respondents 44 Percentage 85 c) Any transaction problem 18 35 d) Complexity of the terms 15 29 Most of the respondents have found the problem of downloading site of the Bank and slow speed while using internet banking.1.21 shows the general view of e-banking by respondents.21 What kind of problems experienced during Internet Banking Problems a) Downloading of bank b) Slow processing speed 38 73 site No. the respondents were asked about their general views of e-banking.Table 4. 64 . To examine the overall view of the e-banking among the customers. Table 4.

46 0.96 0.22 General view of E-Banking Statement E-banking will replace traditional banking E-banking is safe E-banking saves times E-banking is convenient E banking will give rise to fraud/misuse E-banking gives you wider choice *Mean Score 0. I means agree and 2 means strongly agree) Data shows that most of the customers are of the view that e-banking will replace traditional banking and it saves times. 65 .1 1. it is convenient and it gives them wider choice.Table 4.3 Suggestions Banking in the new millennium has been marked by high expectations of customers who are well informed and possess the technical knowledge to conduct banking transaction from home or office or while on the move.28 1. The customers has shown indifferent attitude towards the rise in chances of fraud/misuse by e-banking.92 1. Taking this point into mind the study was conducted and with it some of the points have come up as suggestions and measures to be adopted by banks to improve EBanking Services. Customers do agree that e-banking is safe as with proper infrastructure & support system. 4.22 * Mean Score (Score near to 0 means indifferent.

it is considered that there should be more penetration of ATMs and for it ATMs should be set up within 4-5 Kms of the territory in a city. After seeing the use of ATMs among respondents. through mobile phone and internet.  Withdrawal limits set up by the banks from ATM should be enhanced raised as most of the ATM cardholders are not satisfied with the withdrawal limit. for it strong security network should be made so as to make Internet Banking as a safe channel.  The lack of inter bank Electronic Funds Transfer facilities and Electronic Clearing System was felt in many places.  ATM should be Used for providing facilities of more financial products like buying of mutual funds and others income bonds should be started through ATMs.  Internet banking is the fastest way of conducting transactions like payment of bills and transfer of funds. a strong technical infrastructure should be placed in. These facilities should be extended to more places and to more parties. the banks would have to have strong tie-ups with 66 .  To remove the problems experienced by customers in using ATM or for the better functioning of ATM. as well as for other purposes like in Japan it is used as laundries for mutilated and soiled notes.  To conduct online transaction like payment of bills etc.

considering the vast customer base they serve. if utilities like electricity boards. Tele-Banking.major players in the game for payment gateways and delivery system for secured and convenience payment mode for customers. Chapter .  There should be more merchant establishments ready to accept Credit/ Debit card.V SUMMARY AND CONCLUSION Banks have achieved high level of automation and have started offering electronic products to their customers.  It will be win-win situation for both the customers and utility companies. Electronic Clearing System and Fund Transfer etc. phone companies etc. Entry of Private Sector into this has been tremendous as some of the PSBs have also moved towards Electronic Banking which include standalone ATMs. start accepting payment through Mobile banking and internet banking.  More and More cellular operator should be called to put their shoes into Mobile Banking and facilities should be extended more. Technology has opened up option for various 67 . Net Banking.

The current low Internet users base of 2-3 million is expected to blow upto 23-30 million by 2004 when India is expected to be the 2nd largest internet user population in the country.Easy. Convenience. The customers access the banks website for viewing their account details and subsequently as per requirements they can perform the transactions on account through website. a cheque or cash deposit. The Internet revolution has thus taken up quite well in the country. ATM will do the needful in a matter of seconds. Technology ended products like ATMs. WAP Banking etc. 68 . Safe. have given the customers to choose his channels of getting catered to his requirements. a mini statement or transfer of money from one account to another. Global access and Round-the-clock. The Internet Banking enables the customers to perform basic banking transactions by sitting at his office or at home through PC or LAFFOP.delivery channels. Whether it is cash needed in a hurry. ATM has completely changed the way you bank. Six reason to put the money where the mouse is. Internet banking. Quick. With the Interpet Banking Me brick and mortar structure of the tradItIonal banking gets converted Into a click and portal model there by glvln_q a concept of virtual banking asreal shape.

do we need banks? 5. The security measure will have to be improved and changes in certain laws would become necessary. Mobile-banking will take your bank on the move. Tele Banking. ECS & EFT they are found to be less in knowledge of the customers.1 MAJOR FINDINGS  Out of the various e-banking services.d information technology driven. The networking of banks. Television media too promotes the E-Banking 69 . it has found that ATM has been most popular among the customers. Anytime & Anywhere banking would transform the face of banking. from your home or office over the phone banking absolutely free. Net Banking and Mobile Banking is picking up its slot after ATMs & Tele banking. We need banking. ATM facilities. The future would witness an increase in online banking giving shape to the idea floated initially by Biill Gates. remote access. Now banking is going to be highly competitive ai.You can carry out all your banking work. 24hrs a day. This would reduce the manpower and physical infrastructure requirements of the banks and they would be able to handle large value of business with manpower.  Print media has been fast in promoting the E-Banking services offered through different banks.

IDBI & UTI are following them. Internet is slow in this effort.  Most of the customers prefer to have ATMs set up at railways/bus stands and on highways/on roads with also at concerned banks.services but less than print media. SBI and Syndicate Bank etc. Bank representatives are also doing a good job in promoting various E-Banking products. 70 . are also pushing up their reputation in providing E-Banking services.  ICICI and HDFC banks are considered to be leaders in E-Banking as they have pioneered in providing different E-Banking products. petrol pumps are also give preferences. time saving and wider accessibility are considered to be the most influential factor going for ATMs. Other factors like convenience and speed are also to be considered while using ATMs.  Factors like 24hr banking.  ATM is mainly considered as cash dispensing machine as mainly these are used for cash withdrawal and deposit of cash/cheques besides used for statement and balance enquiry. PSBs like PNB. are also preferred but less than all. Other private sector banks like Bank of Punjab. Other locations like school/colleges etc. Although locations like offices. Citibank.

The Mobile banking generally is used for checking of accounts and balance enquiry. Transfers of funds & payment of bills are not much used by customers. in extreme 71 . cheques enquiry etc. It has been found that usage of ATM card in a month on an average is 510 times.  While using ATMs. With exception of some customers using it for more than 15 times is in a less number as compared to 10-15 times.  The data reveals that customers prefer to use Credit/Debit cards as compared to carry cash with them and on a monthly average it has been used 0-5 times.  As banks are providing Tele banking services free of cost. Sometimes it is used for stopping payments. seasons & holidays and ATM not connected to server. customer find it much worthy to use it for some of facilities such as.Not able to avail the facilities when they require and sometimes found machine not working. Sometimes they too face problems likeunavailability of cash in ATM during festivals.DD making and for balances enquiry. In some cases it goes up to 5-10 times. ATM is becoming more and more popular in use for banking purposes. customers usually experience problems like.  The data shows that mobile banking is less in use as compared to ATMs.

cases goes up to 10-15 times with average monthly spending of less than Rs. 5,000.  The main invent of IT in banking sector -Internet banking is still in infancy stage. As data shows that sometimes it has been put into use, with less no. of customers who access the internet for banking purposes more often. What infact motivates them to use Net Banking is more accessibility and speedier transactions. Other factors like convenience and reduction in processing cost are also considered while using internet banking.  The main purpose for using Internet banking is opening of account and accounts enquiry. It is also used for other purposes like for share trading, foreign exchange and online transactions.  Most of the customers agree that e-banking will replace traditional banking. As strong response is given about the e-banking saves times, e-banking is convenient and it gives them wider choice. Customers do agree that e-Banking is safe as with proper infrastructure & support system. The customers have shown indifferent attitude towards the rise in chances of fraud/misuse by E-banking. 5.2 CONCLUSION With the advent of IT in the Banking sector, there has come a change in the way of banking that has done before. Banking is now moved from its brick

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and mortar structure to customer centric approach. Various e-banking services are giving customers unthinkable benefits like 24hr banking, anywhere banking, speedier transactions and time saving. The banks are now riding themselves on this new wave to have more profitable opportunities. Banks are now spending heavily on information technology front. It is win-win situation for both the customers and the banks. Slowly and steadily customers have started moving towards e-banking system in India. The future would witness an increase in the e-banking financial products. Banking is getting a new shape with all E-Banking services. Now customers prefer to use E-banking products than traditional banking products. It is still beginning… there is a long way to go…

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REFERENCES Agnihotri P (2001) IT way of getting cash. The Tribune 121 (146):23 Bhasin T M (2001) E-Commerce in Indian banking. IBA Bull 23 (4 & 5): 18 - 3 Cherian G (2000). As good as it gets. 7he Econ Times 40 (165): 11 Cresci G (2000) It is win-win for brick-and-click, not internet only banks. The Econ Times 40 (3 9): 8 Dhall K (2000) Banking on e-commerce. 7he Econ Times 40 (117): 9 George N (2000) Clicking on the sleek. 7he Econ Times 40 (165): 11 Goel R (2000) New wave in Indian banking. 7he Econ Times 40 (181): 11 Gopinath m N (2000) One stop shop for all the financial services you need. Busi World 20 (2): 3 5 Iyer T N (1999) Integrated payment system and role of RBI. Indian Inst Banks 70 (4): 3 - 5 Jayakar R (1999) The best banks. Busi Today 8 (20) : 70 - 87 Joe F and Ortan M (2000) Banks find 'brick' stronger than 'click'. The Econ Times 40 (1): 7

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Krishna R (2000) Digital cash is dead-long live cards. The Econ Times 40 (34): 15 Krishnamurthy N (2000) Indian banking scene. ISA Bull 22 (4 & 5): 14-15 Pal D T (2001) Indian banking - changing scenario. IBA Bull 23 (3) : 20-23 Povaih R ( 2000) Digital entry AM 11 (2):41 Prasad S (2000) One stop shop for all the financial services you need. Busi World 20 (2) : 34 Rao M (2000) The fifth wave in banking. 7he Econ Times 40 (139): 7 Rangarajan S (1997) Technology upgradation in banking. IBA Bull 19 (10): 19 Remedias F (2000) How secure is on line banking. The Econ Times 40 (147): 13 Shapping R V (2000) Technology for banks in India - challenges ahead. IBA Bull 23 (3) : 28 - 31 Shetty N (2000) Its about money. 7he Econ Times 40 (129): 15 Singh R (1999) Banking expectation. IN Bull 21 (9):20 Soldanha B ( 2000) Money machine. Busi World 20 (8) : 54 - 55
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The Econ Times 40 (37): 5 76 .Verma D (2000) Banking on information technology.

5: Do you have an ATM Card? (a) Yes (b) No If no than proceed to Ques.4: Do you know which banks provide E-banking Services? __________________________________________________ Q. No11. (a) Wider accessibility (b) Convenience (c) Time saving (d) 24 hrs banking (e) Speedier (f) Others For which purpose you use an ATM card? (a) Cash withdrawal (b) Deposit of cash/cheque (c) Account statement (d) Balance inquiry Q.7: 77 .QUESTIONNAIRE Q. which schemes are you aware of? (a) ATM (b) Net banking (c) Mobile banking (d) EFT (e) Tele banking (f) Credit/Debit Cards Q.3: Through which sources you came to know about E-banking? (a) Print Media (b) Internet (c) Bank Representative (d) Television (e) Others Q.6: Rank the following factors for which you go for ATM card.2: Out of the following schemes. Q.1: Are you aware of E-banking system in Ludhiana? (a) Yes (b) No Q.

seasons and holidays.9: How often you use an ATM card in a month on an average? (a) 0-5 times (b) 5-10 times (c) 10-15 times (d) More than 15 times Q.14: Have you ever availed the facility of Tele banking? 78 .10: Have you ever experienced any of the following problems while using an ATM card?     Not connected/logged to server/ System does not allow you to avail facilities when you require.(e) Transfer of funds (f) Others Q. The machine itself is not working (c) Never Q.12:     Which factors you consider for using Mobile Banking? Checking of accounts Balance inquiry For payment of bills Transfer of funds Q. Unavailability of cash in ATM during festivals.13: Have you ever experienced any of the following problems while using Mobile Banking? Delay in delivery of message  Network connectivity  Traffic  Burnout Q.11: Do you access mobile banking? (a) Often (b) Sometimes If no than proceed to Ques. No14 Q.8: Are you satisfied with the withdrawal limit set by your bank? (a) Yes (b) No Q.

16: Do you own a Credit Card? (a) Yes (b) No If no than proceed to Ques.19: Do you access internet for banking purposes? (a) Often (b) Sometimes (c) Never 79 .18: Have you experienced any of the following problems while using Credit Card? High Interest Rate  Less Credit limit  Less Acceptance  Less Credit Time Q.17: How often you use your Credit Card in a month? (a) 0-5 times (b) 5-10 times (c) 10-15 times (e) More than 15 times Q.(a) Yes (b) No If no than proceed to Ques.15: Have you ever experienced any of the following problems while using Tele Banking? Authenticity of call receiver is not sure  Poor Customer Care Service  Traffic  Lack of awareness among Tele Executives Q. No19 Q. No16 If yes for which facility (a) DD making (c) (e) Cheques inquiry Stopping payments (b) A/c balance inquiry (d) Request for passbook (f) Rate of interest on deposit schemes Q.

Banking? Statements E-banking is safe and secure E-banking saves time E-banking is convenient E-banking will replace traditional banking E-banking has wider accessibility E-banking will give rise to frauds S.22: What are your views on the following statements of E.23: What are the scopes of improvement in E.21:     Have you faced any of the following problems in internet banking? Downloading the bank site Slow processing speed Any transaction problem Complexity of the terms Q.A Strongly disagree Q.20: For what purpose do you use internet banking? (a) Opening of accounts (b) Online transactions (c) (e) Payment of bills Request for cheque book (d) A/c inquiry (f) Other services Q. Strongly agree Agree Indifferent Disagree SA A ID DA SDA S.Q. A ID D.Banking? ____________________________________________________ ____________________________________________________ 80 .A.A.D.

Name: _______________________________________________________ Address: ________________________________________________________ ________________________________________________________ Thanks 81 .

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