ALOK PUROHITt

Dissertation Report
on
“IMPACT OF INTERNET BANKING ON

DEVELOPMENT INDIAN BANKING SECTOR”
In the partial fulfillment for the Award of the Degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted to Submitted by
Dr. Hemraj Verma ALOK PUROHIT
Deptt. Of Management SAP ID: 1000013282
DITU Roll no 196122046
DEPARTMNET OF MANAGEMENT STUDIES,

SCHOOL OF LIBERAL ARTS & MANAGEMENT
DIT UNIVERSITY, DEHRADUN
APRIL 2021
1
DECLARATION
I hereby declare that, this project title “IMPACT OF INTERNET BANKING ON

DEVELOPMENT INDIAN BANKING SECTOR” is a genuine & bonafide project prepared
by me in partial fulfillment of Master Degree in Business Administration.
The project work is original & conclusions drawn herein are based on the data collected &
analyzed by myself.
To best of my knowledge, this project work has not been submitted by anyone else in any other
institute or university.
Signature of the Candidate
ALOK PUROHIT
SAP ID: 1000013282
Roll no 196122046
2
ACKNOWLEDGEMENT
I want to clarify that this is not just a formal acknowledgement but also a sincere note of thanks and
regard from my side. I feel a deep sense of gratitude and affection for those who were associated
with the project and without whose cooperation and guidance this research could not have been
conducted properly.
I would especially like to thank Dr. Hemraj Verma Faculty of our For taking keen interest in
the completion of my report.
Last but not least I dedicate this effort of mine to those persons who are light of my life: My Father,
Mother, Friends who have been behind every successful endeavor in my life.
ALOK PUROHIT
SAP ID: 1000013282
Roll no 196122046
3
CONTENT
SR.NO TOPIC
1 CHAPTER 1
INTRODUCTION
2 Chapter 2
REVIEW OF LITERATURE
2 CHAPTER 3
RESEARCH METHODOLOGY
3 CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
4 CHAPTER 5
CONCLUSION
5 BIBLIOGRAPHY
QUESTIONNAIRE
4
CHAPTER-1
INTRODUCTION
5
INTRODUCTION it
Internet – its basic structure and topology it it it it it it
Internet is a vast network of individual computers and computer networks connected to and
it it it it it it it it it it it it it it
communicate with each other using the same communication protocol – TCP/IP it it it it it it it it it it it
(Transmission Control Protocol / Internet Protocol). When two or more computers are it it it it it it it it it it it it
connected a network is created; connecting two or more networks create „internetwork‟or

it it it it it it it it it it it it
Internet. The Internet, as commonly understood, is the largest example of

it it it it it it it it it it
such a system. Internet is often and aptly described as „Information Superhighway‟, a means
to reach innumerable potential destinations. The destination can be any one of the connected
networks and host computers. it it it
it Internet has evolved to its present state out of a US Department of Defence project
it it it it it it it it it it it it it it it
ARPANet (Advanced Research Project Administration Network), developed in the late

1960s and early 1970s as an experiment in wide area networking. A major perceived
advantage of ARPANet was that the network would continue to operate even if a segment
of it is lost or destroyed since its operation did not depend on operation of any
single computer. Though originally designed as a defence network, over the years it was
used predominantly in areas of scientific research and communication. By the1980s, it

moved out of Pentagon‟s control and more independent networks from US and outside got
connected to it. In 1986, the US National Science Foundation (NSF) established a national
network based on ARPA protocol using commercial telephone lines for connectivity. The
NSFNet was accessible by a much larger scientific community, commercial networks and
general users and the number of host computers grew rapidly. Eventually, NSFNet became
it it it it it it it it it it it it it
the framework of today‟s Internet.ARPANet was officially decommissioned in 1990.

it it it it it it it it it
It has become possible for innumerable computers operating on different platforms to

communicate with each other over Internet because they adopt the same communication it it it it it it it it it it it it
protocol, viz, TCP/IP. The latter, which stands for „Transmission Control Protocol / Internet
Protocol‟, is a set of rules which define how computers communicate with each other. In
order to access Internet one must have an account ina host computer, set up by any one of
it it it it it it it it it it it it it it it it it it
the ISPs (Internet Service Providers). The accounts can be SLIP (Serial Line Internet
Protocol) or PPP (Point to Point Protocol) account. These accounts allow creating temporary
6
TCP/IP sessions with the host, thereby allowing the computer to join the Internet and
directly establish communication it it
with any other computer in the Internet. Through this type of connection, the client
computer does not merely act as a remote terminal of the host, but can run whatever
it it it it it it it it it it it it it it it it
programs are available on the web. It can also run several programs simultaneously, subject
to limitations of speed and memory of the client computer and modem. TCP/IP protocol
uses a unique addressing scheme through which each computer on thenetwork is identified.
TCP / IP protocol is insecure because data packets flowing through TCP / IP networks are
not normally encrypted. Thus, any one who interrupts communication between two
it it it it it it it it it it it
machines will have a clear view of the data, passwords and the like. This has been
addressed through Secured Socket Layer(SSL), a Transport Layer Security (TLS) system
which involves an encrypted session between the client browser and the web server.
1. INTRODUCTION OF ELECTRONIC BANKING

it it it it
Electronic banking is doing banking electronically, by bringing together banks and

customers. It integrates data, electronic and communication and security services to facilitate
banking applications. It uses computers and telecom for several banking transactions that
comprise the basic operations of the banks and including communication and coordination
with customers. it
Electronic-Banking refers to banking done through any electronic medium - Tele-banking, it it it it it it it it it it it
Automated Teller Machines (ATMs), Net banking etc. it it it it it it it
The new concept of

it it it it it E-Banking has broken down the barriers of branch banking. it it it it it it it it it
Customers whether individuals or corporate no longer have to go to go the bank to do their

it it it it it it it it it it it it it it it it it
business. It can be done from home or office 24 hrs a day, 365 days a year using the PC
it it it it it it it it it it it it it it it it it it it it
or the telephone and through the system of internet banking.

The electronic revolution has made it possible to provide ease and flexibility in banking
operations to the benefit of the customers. The electronic banking has made the customer
say good-bye to huge account registers and large paper bank accounts.
7
The e-banks or what you may call, easy bank offers the following services to its
customers:
 ATM
 Credit cards it
 Debit cards it
 Tele-banking
 Net banking it
 Mobile banking it
1.2 EVOLUTION OF ELECTRONIC BANKING

it it it it
In its evolutionary history, a start had been made in electronic banking as early as the
1920s. But this technology or this form of banking did not get a widespread acceptance till
1960s. It required almost a complete generation before this form of banking found
popularity with a sizable group of consumers and bankers.

it it it it it it it it
The effectiveness of e-banking system was defined by these main factors:

1. Communication technology was in its infancy and inadequate for local or global it it it it it it it it it it it it
coverage.
2. Most companies and banks had incompatible systems - sometimes even different
branches of the same bank had different system. it it it it it it it
1.3 ELECTRONIC BANKING IN INDIA

it it it it
In India, electronic banking is of fairly recent origin. The traditional model for growth has
been through branch banking. Only in the early 1990s has there been a start in the non
branch banking services. it it it
The private sector banks and foreign banks are handicapped by the lack of a strong branch
network in comparison with the public sector banks. In the absence of such networks, the
market place has seen the emergence of a lot of innovative services by these players to
increase their market share and reduce their cost of service delivery through direct
distribution strategies of Non-Branch-Delivery. it it it
8
All these banks are using "home banking" as a key "pull" factor to wean customers away
from the well entrenched public sector banks.

it it it it it it it
1.4 THE FEW RELEVANT FACTS:

IT IT IT IT
 ATMs made their first appearance in the early 1990s, started by foreign banks like
Citibank and Hong Kong bank. By the end of 1990s, even private banks have come up
with their own ATM networks. Now, even few of public sector banks have stared
ATM services. it
 Under the initiative of the Indian Banks Association (IBA), in Mumbai a pilot project
to link up 156 ATMs of 31 member banks has come in the form of SWADHAN, a
shared payment network system, which has a card base of more than 1,000,000 with
over 30,000 transactions per month. Master card and Visa are also following suit to
offer shared ATM networks.

it it it
 Credit cards have found widespread acceptance in the metros and big cities. The major
players in the credit card market are the foreign banks and some big public sector
banks like SBI and Bank of Baroda. India now has about over three million credit
cards in circulation. it it
 Debit cards have also now started becoming popular in the last two years only with
Master card and Visa tying up with Indian and foreign banks. There are more than 160
lakh debit cards and this figure is expected to grow as most banks are converting there
ATM cards to debit cards. it it it it
 Telephone banking is available with few foreign and private banks offering this service
through the technology called Interactive Voice response Service (IVRS). It has moved
into the domain of mobile phones as well, a service that is being marketed as Mobile
banking.
 Internet banking has made its debut with SBI bank's product called Infinity and
Citibank being the pioneers in this field. It is now being offered by some select other
banks as well. This seems to be the latest growth area.

9
1.5 ATM (AUTOMATED TELLER MACHINES)
it it it it
ATMs are used by banks for making the customers dealings easier. The system is also
known as 'Any Time Banking' because it allows customers to withdraw money at any time
from the bank. An ATM is a device that allows customers who have an ATM card to
perform routine banking transactions without interacting with human teller.

An ATM card is issued to the customer by the bank in order to carry out banking
transactions at cash machines. It provides exchange services. This service helps the
customers to carry out transactions even when the banks are closed. This can be done by
inserting the card in the ATM and entering the personal identification number and a secret
password. Many banks are providing these services. Some of these banks are SBI, HSBC,
HDFC, Citibank, GTB, UTI bank, IDBI bank etc.

1.5.1 BENEFITS it
The advantages of ATMs are many. It increases existing business and generates new
business. It allows the customers to it it it it it
 Transfer money to and from accounts it it it it it
 View account information it it
 Deposit cheques or cash it it it
 Order cheques it
 Receive cash it
An ATM is the most convenient way to withdraw cash. It reduces risk and lowers cost. It
costs banks around Rs 14-16 through transacting by ATM whereas it costs Rs 35-38
through a traditional account. Having an ATM on the premises of a business house can
reduce the number of bad cheques and cut credit card expenses because the customer can
withdraw cash for payment on the purchase made. Since the services are available all the
24 hours, the customer is most satisfied.

it it it it it it
10
 How Do ATMs Work? it it it
An ATM is simply a data terminal with two input and four output devices. Like any other
data terminal, the ATM has to connect to, and communicate through, a host processor. The
host processor is analogous to an Internet service provider (ISP) in that it is the gateway
through which all the various ATM networks become available to the cardholder (the
person wanting the cash). it it it it
Most host processors can support either leased-line or dial-up machines. Leased-line
machines connect directly to the host processor through a four-wire, point-to-point, and
dedicated telephone line. Dial-up ATMs connect to the host processor through a normal
phone line using a modem and a toll-free number, or through an Internet service provider
using a local access number via a modem.

Leased-line ATMs are preferred for very high-volume locations because of their thru-put
capability and dial-up ATMs are preferred for retail merchant locations where cost is a
greater factor than thru-put. The initial cost for a dial-up machine is less than half that for a
leased-line machine. The monthly operating costs for dial-up are only a fraction of the costs
for leased line.

it it it
The host processor may be owned by a bank or financial institution, or it may be owned by
an independent service provider. Bank-owned processors normally support only bank-owned

machines, whereas the independent processors support merchant-owned machines.

1.5.2 Parts of the Machine

it it it it
 Card reader - The card reader captures the account information stored on the
magnetic stripe on the back of an ATM/debit or credit card. The host processor uses
this information to route the transaction to the cardholder's bank.

 Keypad - The key pad lets the cardholder tell the bank what kind of transaction is
required (cash withdrawal, balance inquiry, etc.) and for what amount. Also, the
bank requires the cardholder's personal identification number (PIN) for verification.
Federal law requires that the PIN block be sent to the host processor in encrypted
form. it
11
1.5.3. And an ATM has four output devices.
 Speaker - The speaker provides the cardholder with auditory feedback when a key is
pressed. it
 Display screen - The display screen prompts the cardholder through each step of the
transaction process. Leased-line machines commonly use a monochrome or color it it it it it it it it it it
CRT (cathode ray tube) display. Dial-up machines commonly use a monochrome or
color LCD. it it
 Receipt printer - The receipt printer provides the cardholder with a paper receipt of
the transaction. it it
 Cash dispenser - The heart of an ATM is the safe and cash-dispensing mechanism.
The entire bottom portion of most small ATMs is a safe that contains the cash.
The cash-dispensing mechanism has an electric eye that counts each bill as it exits the
dispenser. The bill count and all of the information pertaining to a particular transaction is
recorded in a journal. The journal information is printed out periodically and a hard copy is
maintained by the machine owner for two years. Whenever a cardholder has a dispute about
a transaction, he or she can ask for a journal printout showing the transaction, and then
contact the host processor. If no one is available to provide the journal printout, the
cardholder needs to notify the bank or institution that issued the card and fill out a form
that will be faxed to the host processor. It is the host processor's responsibility to resolve
the dispute.
it it
Besides the electric eye that counts each bill, the cash-dispensing mechanism also has a
sensor that evaluates the thickness of each bill. If two bills are stuck together, then instead
of being dispensed to the cardholder they are diverted to a reject bin. The same thing
happens with a bill that is excessively worn or torn, or is folded.

The number of reject bills is also recorded so that the machine owner can be aware of the
quality of bills that are being loaded into the machine. A high reject rate would indicate a
problem with the bills or with the dispenser mechanism.

12
1.6 S.P.N.S. (Shared Payment Network system)
it it it it it it
Another concept of ATM has emerged in the form of Shared Payment Network system
(SPNS). SPNS has been set up in Mumbai in February 1997, which is a large network of
ATMs spread over the city of Mumbai, Vashi and Thane, connected to a central host. SPNS
has been established at the behest of Indian Banks Association (IBA) by India Switch
Company Pvt. Ltd. it it it
It permits inter ATM transactions, i.e., ATM cards of one bank can be used on ATMs
operated by other banks. The participating banks issue universal cards to the customers for
transacting on this network. The objective is to provide anytime and anywhere electronic
banking service to the customers in the city of Mumbai,Vashi and thane through the state of
art electronic funds transfer system to be shared by different participating banks.

1.6.1 SPNS is capable of offering the following services:

 Cash transactions it
 Extended hours services it it
 Across the bank payments it it it
 Utility payments it
 Balance enquiry it
 Printing of statement of account it it it it
 Cheque deposit it
 Request for cheque book it it it
 Standing instructions and statement of accounts it it it it it
The network at present has over 50 ATMs of more than 25 banks and is likely to go up to
over 500 ATMs from39 banks in near future. The ATM card used in the network is called
"Swadhan"
13
1.6.2 Benefits: it
The advantage of SPNS is that the individual banks need not make huge investments to set
up their own networks.

it it it it
The SPNS can also be connected to international switches such as Visa and Master card.
This would permit foreign tourists to draw cash from ATMs in India. These operations
make the banking transactions truly global.

it it it it it it
1.7 CREDIT CARDSit it it
A credit card is basically a payment mechanism which allows you to make purchases
without immediately paying for them. The bank makes the payment to the merchant
establishment (store, restaurant) and you repay the bank when the billing statement comes it it it it it it it it it it it it it
home. it
The days of credit one gets could range from 20 - 50 days, depending on the date when
one makes the purchase. Where payment is concerned, you can choose to pay your entire
dues at one go, or stagger them after paying the minimum amount due every month.
The use of credit cards came into being in United States of America during the 1920's. Oil
companies, hotel chains and business organizations began to issue these cards to their it it it it it it it it it it it it it
customers for purchases made at company outlets. it it it it it it it
The use of these cards began to increase after 1950. The first of the kind, as at present was
it it it it it it it it it it it it it it it it it it it
first introduced by Diners club during 1950. Many establishments and business outlets
honoured these cards. it it
A credit card is nothing but a very small card containing as a means of identification, such
as signature or a small photo. It authorizes the holder to charge goods and services to his
account on which he is billed. it it it it it it
The bank receives the bills from the merchants and pays on behalf of the cardholder. These
bills are assembled in the bank and the amount is paid to the bank by the cardholder either
in totality or in installments.
it it it it
it The bank charges the customers a small amount for this service. The cardholder need not
carry money with him when he travels or goes for purchasing.

14
1.7.1 HOW IT WORKS?
it it it
After you or the cashier swipes your credit card through a reader, the EDC software at the
point-of-sale (POS) terminal dials a stored telephone number via a modem to call an
acquirer.
An acquirer is an organization that collects credit-authentication requests from merchants

and provides the merchants with a payment guarantee.

When the acquirer company gets the credit-card authentication request, it checks the
transaction for validity and the record on the magstripe for:

 Merchant ID it it
 Valid card number it it it
 Expiration date it it
 Credit-card limit it it
 Card usage it it
Single dial-up transactions are processed at 1,200 to 2,400 bits per second (bps), while
direct Internet attachment uses much higher speeds via this protocol. In this system, the
cardholder enters a personal identification number (PIN) using a keypad.

Let's take an example to understand the credit card transaction.

it it it it it it it it it it it Before we get into the it it it it it
details of how a credit card transaction takes place, let's know the following terms:
1.7.1.1 Issuer it
An issuer is the bank who issues the card.

1.7.1.2 Acquirer it
An acquirer is the bank who approaches the merchant establishment and requests them to
accept credit cards. it it
1.7.1.3 Merchant Establishment it it
A merchant establishment could be a hotel, restaurant, bar, pub, disco, store, mall or any
other place that accepts credit cards as payment.

15
1.7.1.4 The card brand it it it
Bank card associations of issuers and acquirers (like Visa and Mastercard), which are
created to protect and advertise the card brand, establish and enforce rules for use and
acceptance of their bank cards, and provide networks to connect the involved financial
institutions. The brand authorizes the credit based transaction and guarantees the payment to
merchants. it
The merchant establishment accepts payment by credit cards for the simple reason that it
will attract more customers.

it it it
So, on every card transaction conducted, the merchant establishment will give a commission
which is shared by the issuer and the acquirer.

1.7.1.4 Salient Feature it it
Annual Fee it
All credit card issuers charge an annual fee which is payable at the start of the year. The
start of the year, of course, is your membership year, and not the calendar year. So, if you
got yourself a card in March, you can expect to be billed the annual fee every March until
you cancel your card. As a privilege, this fee is sometimes waived the first time. When the
time comes for renewal of your card, you can even use the reward points you have
accumulated from using the credit card over the year to settle your annual fee. it it it it it it it it it it it it it it
 Forwarding Balance (or Revolving) it it it
The most attractive feature of a credit card is that you need not pay off your dues in whole.
You can opt to pay 5% of the total amount on or before the due date, every month, the rest
is carried forward. But there's a price to pay for this extended credit - interest! Normally,
interest varies between 2.5% and 3% per month.

 APR or Annual percentage Rate it it it it
The interest rate that reflects the yearly cost of the interest the outstanding on your card is
called the annual percentage rate. This rate is charged to the card holder on the amounts
carried forward beyond the due date for the payment of balances. Most card issuers will tell
16
you their monthly rate of interest. It might sound low at 3%, but when you look at the
interest rate over the year, it turns out to be as high as 43%.

 Cash Advance it it
Your credit card use discretion when withdrawing cash on your credit card because the
charges for this facility are high, around 2.5% to 3% per transaction! An important
feature - lets you withdraw cash from designated ATMs using it it it it it it it it it it
1.7.1.5 Benefits it
 Credit
When you use a Credit card to pay for anything, you get an interest-free period of 45 days.
Billing cycles are structured in such a way that you definitely get at least 30 days out of
these as clean credit time, which is especially beneficial to salaried people. Better still, you
can opt to pay your bill in full when you receive it or you can carry forward your
payments by paying as little as 5% of the total amount on or before the due date, every
month. You can spend now, pay later.

 Convenience
With a credit card on you, you don't need to run the risk of carrying a lot of cash.
 Cash Advance it
Another advantage of a Credit card is that you can use it as an ATM card too! But
remember, there's a fee to it. It typically starts with a flat fee going up to a percentage
based fee on the amount of the withdrawal.

1.7.1.6 Drawbacks it
 Greed
Just because you have credit being extended to you doesn't mean that you should go on a
rampage. Use your card with discretion and caution. Remember, it is an extremely
expensive way to borrow money. View it as a convenient and safe way to carry cash, a
timely help in an emergency or taking advantage of an opportunity that you would have
otherwise lost out on, like an investment! it it it it it it
17
 Security concerns for online shopping it it it it
Credit card fraud is always a threat, both on the internet and in the real world. Hackers
have found ways to steal credit cards numbers from websites.

1.8 THE INDIAN SCENARIO

IT IT IT
In India there are many banks which have tied up with Visa and Master card. The industry
is becoming a clustered market place with many players entering into the field. Existing
players like Citibank, SBI, HSBC and Atandered Chartered are highly aggressive and
competing with each other along with new entrants. it it it it it it it it
There has been also a paradigm shift in ideology about credit among the Indians.
Traditionally, Indians were credit averse and this attitude has resulted in a slow growth in it it it it it it it it it it it it it it it
the last 10 years. However with the IT revolution and young generation coming into the
employment, the attitude has changed and majority of young generation prefers plastic it it it it it it it it it it it it
money to conventional money. These factors together with the constant innovation and
expanding networks by banks have enabled the growth of the industry in a big way.
The three reasons that support the growth of credit culture are:
i) This will help in driving cash out of the economy and brings in more incomes and
spending into open with the aspects for taxation. it it it it it it it
ii) It facilitates commerce particularly cyber commerce.

it it it it it
iii) It reduces the cost of printing money

it it it it it it
The govt. has realized the importance of these aspects and has removed all quantitative
restrictions. it
The growth rates in this industry are 30 % per annum. Already there are over 60 lakhs
credit cards in India. Not only the foreign banks and private sector banks are aggressive in
this market. In fact, public sector banks with SBI leading the front are equally aggressive.
1.9 DEBIT CARDS

it it
A Debit card is a card that has direct access to your bank account. The card is issued by
your bank. Whenever you use your debit card, your bank account is debited immediately.
18
Unlike credit cards, you don't enjoy any credit period and therefore the debit card does not
have minimum income eligibility criteria. Now days debit cards have been combined with
ATM cards. One can use the debit cards issued by the bank at any of the bank's ATMs as
a normal ATM card.

it it it
There are two types of debit cards and two types of debit card transactions -
„Direct‟ debit cards allow only "on-line" transactions. An immediate electronic transfer of
money from your bank account to the merchant's account. This requires you to enter your
PIN or Personal Identification Number at the store's terminal. The system then checks your
account for sufficient funds to cover the purchase. These are typically the cards that come
with the "Maestro" logo, from Master card . An example is the Suvidha debit card issued
by Citibank in select cities.

it it it it it
A 'Deferred' debit card looks similar to a credit card, but is not a credit card. It bears a
Visa or MasterCard logo, and can be used wherever your card's brand name is displayed.
This card allows "off-line" and "on-line" transactions. Off-line purchases are where the shop
keeper's terminal scans your card and creates a debit against your account. You are not
required to enter your PIN at the store's terminal. Most off-line transactions are verified
immediately to see whether there is enough money in your account. Off-line debit cards it it it it it it it it it it it it it it
usually carry the 'Electron' logo, from Visa. SBI Bank issues Electron debit cards in more
than 15 cities around the country.

1.9.1 HOW IT WORKS? it it it
Debit card is a prepaid card with some stored value. Every time a person uses the card, the
merchant who in turn can get the money transferred to his account form the bank of the
buyer, by debiting an exact amount of purchases from the card.

When the customer makes a purchase, he enters his Personal Identification Number (PIN
given by the bank) on the shop's PIN pad.

When the card is swiped through the electronic terminal, it dials the acquiring bank system
-e.g. Mastercard or Visa that validates the PIN and finds out from the issuing bank whether
to accept or decline the transaction.

19
But now the process of writing the PIN is no longer there. You are required to confirm the
transaction by entering you PIN only at those merchants' locations who have PIN pad.
The customer can never overspend because the system will reject any transaction that
exceeds the balance in his account and the bank will never face a default because the
amount spent is debited immediately from the customers account.

1.9.2Salient Features it
 It is a combination of a Cheque and ATM card. Therefore, there are no fees for
using the ATM for cash withdrawal, or as a debit card for purchase.
 A Debit card is more affordable than a credit card. You just use your bank account
for all your transactions.

it it it it
 No credit period, your bank account is debited immediately.

 No credit check is required to get a Debit card.

 Spending is limited to your bank balance. it it it it it it it it
1.9.3 Benefits
it
 Free with your Bank Account: Obtaining a debit card is easy. If you qualify to
open a bank account, you usually get a debit card, if your bank offers the service.
 No background check: When you are applying for a debit card, the bank does not
need to look into your credit history.All you need is the documentation to open a
bank account, and money in your bank when you use your debit card.
 Convenience: A Debit card frees you from carrying a lot of cash or a cheque book. it it it it it it it it it it it it it it it it
In case, you are an international traveller, you don't need to stock up on Traveller's
Cheques or cash. You can use your debit card to withdraw cash from over 500,000
ATMs around the world in over 100 countries. You can withdraw in the local
currency of the country you are in, limited only by the money you have back home
in your account, and your Business Travel Quota (BTQ) limit availability.
20
 Fair Exchange: If you return merchandise or cancel services paid for with a Debit
card, the transaction is treated as if it were made with cash or a cheque. Customers
usually get cash back for off-line purchases; for on-line transactions, the amount is
credited to your account. it it it it
1.9.4. Drawbacks
it
 No Grace Period
it it
 Unlike a credit card, debit card transactions are on a "pay now" basis.
 Limited Protection it
 Using a debit card may mean you have less protection than you would have with a
credit card for undelivered or defective goods.

it it it it it it
1.10 TELE BANKING

it it
Telebanking came into operations in the 1970s in developed countries like the US. Under
this system the data is transferred through the technology called Interactive Voice response
service (IVRS). IVRS is the automated Phone Banking system that guides you through the
banking transactions. Tele banking is available with few foreign banks and private sector
banks. These banks have opened their call centres in various cities to help their customers.
The customers are given a Telephone Identification number which is kept confidential. With
this unique TIN number they can perform their banking transactions.
Following services are provided through telephone banking

it it it it it it
 Account details/balance enquiry it it
 Cheque status inquiries it it
 Cheque book/ account statement requests it it it it
 Stop payment requests

it it
 Opening of Fixed Deposits account it it it it
 Reporting of lost ATM / Debit Card it it it it it it
 Demand Drafts it it
21
 Fund transfers it it
1.11 MOBILE BANKING it it
A new revolution in the realm of e-banking is the emergence of mobile banking. On-line
banking is now moving to the mobile world, giving everybody with a mobile access to real
time banking services, regardless of their location. But there's much more to mobile banking
than just on-line banking. Mobile Banking is a service that allows you to do banking
transactions on your mobile phone without making a call, using the SMS facility and WAP. it it it it it it it it it it it it it it it
It represents a new way to pick up information and interact with the bankers to carry out
the relevant banking business.

it it it
According to this system, customer can access account details on mobile using the Short
Messaging Services (SMS) technology where the select data is pushed to the mobile device.
The Wireless Application Protocol (WAP) technology, allows user to surf the net on their
mobile to access anything and everything. it it it it it
Mobile Banking works on the 'Text Messaging Facility' also called the SMS that is
available on mobile phones. This facility allows you to send a short text message from your
mobile phone instead of making a phone call. All you need to do is type out a short text
message on your mobile phone and send it out to a pre-designated number. The response is
sent to you as an SMS message, all in the matter of a few seconds. This message travels
from your mobile phone to the SMS Centre of the Cellular Service Provider, and from there
it travels to the Bank's systems. The information is retrieved and sent back to your mobile
phone via the SMS Centre, all in a matter of a few seconds.

This is a very flexible way of transacting banking business. Already SBI, Citibank and
HDFC banks have tied up with cellular operators in major cities to offer these mobile
banking services to their customers. SBI was the first organization in India to offer WAP-
based services in May 2000. Mobile Commerce, using WAP technology, allows secure on-
line access of the Web using mobile devices. With WAP one can directly access the bank's
WAP server, check his account details and use other value-added services.
22
The following mobile banking services are provided by the banks :
 Balance Inquiry of all accounts linked to your Customer Identification Number

 Checking the past transactions in your account it it it it it it it
 Placing a Stop Payment on a cheque it it it it it it
 Requesting a cheque book it it it
 Bill Presentment it it
 Bill Payment it it
 Fixed Deposit Inquiry it it it
 A Help menu, which gives you the transaction codes for the various transactions
 Travel and ticketing information it it it it
 Other personal banking services it it it it
1.12 INTERNET BANKING

it it
Internet banking is all about giving customer an access to their account on a website so that
they can carry out transactions with the help of an internet-enabled computer with strict
security checks in place. Internet banking does not involve any physical exchange of
money, but it's all done electronically, from one account to another, using the Internet.
Internet banking makes it possible for clients to perform most of mundane banking
functions online. They can access account statements, order drafts and cheque books,
transfers funds between accounts, book deposits, stop payment instructions and communicate
bank, among other things. Depending on their bank, they have access to value added
services online, such as applying for car and personal loans, and the payment of utility bills,
generally a time consuming core in India.

it it it it it it
In other words a successful Internet banking solution offers:

 Checking with no monthly fee, free bill payment and rebates on ATM surcharges
 Easy online applications for all accounts, including personal loans and mortgages
23
 24 hour account access.
it it it
 Quality customer service with personal attention. it it it it it
 Intra bank and interbank transfers. it it it it
The first banking system designed for the net was written in 1996. The first internet bank
was set up in United States. There are certain banks that are cent percent online, i.e., they
don't have brick and mortar devices. Since the banks do not have any physical presence,
they enjoy cheaper business costs that trickle down to the products and services they offer,
making them more competitive and cost effective. Such banks charge lower fees for their
services and find it viable enough to offer higher rates of interest on deposits.
In India, internet banking is two years old with SBI bank, the pioneer in this field. In
January 2000, SBI bank introduced India's first online banking services called Infinity which
permits customers to access details on credit usage and to make payments online. But now
there are few other banks which are offering their products and services online such as
HDFC bank, Citibank, IDBI bank, ABN-Amro bank, GTB, HSBC bank, Indus Ind bank,
SBI, Bank of Punjab, Allahbad bank, UTI bank and Federal bank.
Bank's Internet presence transforms from 'brochureware' status to internet banking' status
once the bank goes through a technology integration effort o enable the customer to access
information about his or her specific account relationship. it it it it it it it
The six primary drivers of Internet banking includes, in order of primacy are:
1. Improve customer access. it it
2. Facilitate the offering of more services. it it it it it
3. Increase customer loyalty. it it
4. Attract new customers. it it
5. Provide services offered by competitors. it it it it
6. Reduce customer attrition. it it it
24
1.12.1 The Benefits
it it
 Cheaper products\services: it
The investment for setting up bank branches is reduced as online trading requires fewer
branches. Besides, there are lower service fees but higher interest rates on deposits. The
average cost per transaction in India is around rs.36. In the case of ATM, the average
cost comes down to Rs 15. But if the transaction is completed online, the cost drops to
Re. 1 to Rs. 3 only.

it it it it it
 Flexibility and convenience: it it
Customers are not restricted to the traditional banking hours and can access their
accounts according to their convenience. The internet terminal becomes a mobile branch
of the bank.
it it
 Latest transactional information: it it
There is no need for manual updating of accounts. Whenever the information is viewed
on screen, the information up to the last minute is available.

 Customer retention: it
Reallocation of customer does not matter as online banking is accessible anywhere and
everywhere.
 Increased customer base: it it
Opening up a branch at a new location involves massive investment. But online banking
puts no restrictions on a person becoming a customer even from the remotest of places
where opening a branch is not possible. More customers can be serviced with limited
infrastructure.
 New products: it
A bouquet of services- mutual funds, brokerage, customer finance and credit cards can
be offered to customers via the internet.

it it it it it it
 Free facilities: it
Certain banks offer facilities such as utility bill payment that are immensely cost and
time effective. Some banks offer them free or at a nominal charge.

25
 No hard cash required:
it it it
Funds can be transferred electronically between accounts, drastically reducing the need
to keep hard cash.

it it it
1.12.2 The Downside it it
 Security concerns: it
Critics allege that the industry has acted in haste to get online, despite certain security
lacunae. Some researchers say that the internet cannot be foolproof system. The internet
has been deliberately built in such a way that information gets broken down into data
packets for routing purposes. it it it
it In large networks these bits can get lost and not reach the desire destination. Therefore,
the internet cannot be trusted in totality as a delivery channel and is especially

vulnerable to hackers. it it
 Customer conservatism: it
Although accessing information through a website is welcomed by customers, where

usage of services is concerned (especially when it involves a flow of cash), customers

are reluctant to disclose personal information and carry out financial transaction
1.13. ISSUES IN ELECTRONIC BANKING

it it it it
This is not to suggest that banks need to close down all branches and go completely into
the direct distribution route.

it it it it
The key is in being able to do a judicious mix of both direct distribution and indirect
distribution to increase breadth of geographical coverage while keeping the costs low.
This is more so, because while consumers' comfort with technology is increasing, it is yet
to reach a critical mass in India, with a large population which does not understand
technology at all, and would get alienated if the human face of the bank goes totally away,
to be replaced by machines to which they cannot relate easily.

26
While electronic banking and the internet do offer exciting possibilities for payment
mechanisms, there are many open questions that have still not been satisfactorily addressed,
without which this form of banking cannot make significant progress.

On-line banking will meet its full potential when the following key consumer issues are
addressed. it
 Consumer protection from fraud: it it it
Electronic fraud is a scourge in the west and is on the rise in even in India. Unless
electronic message transmission can be safeguarded from unauthorized access through

hacking, people will continue to be hesitant about using electronic banking for fear of fraud.
 Transaction privacy: it
In India, cash transactions are popular because anonymity they provide, as they leave no
paper trail. A part of Indian economy is the black economy, where transactions are in cash
and there are no audit trails. This will be a factor that will continue to hinder wider
acceptance of electronic banking, because electronic payments always leave a paper trail.
 Infrastructure issues of telecommunication and bandwidth: it it it it it
This form of banking thrives only when telecommunication infrastructure is robust, since it
requires large scale wide area network connectivity. India still has a long way to go.
 Comfort with technology and proliferation of PCs: it it it it it it
The average Indian is still PC illiterate and prefers human touch over technology driven
service. IT is still a long way off when PCs become like TVs in every household. The
consumer behavior towards technology will also take sometime to change. Till such time,
electronic banking will remain restricted to the younger, upwardly mobile consumer only.
 Legal recognition of electronic contracts: it it it it
Is an electronic contract a valid contract? Negotiable Instruments Act covers payment in

writing only. What about electronic instruments? When will digital signature get legal
validity? These are some of the crucial questions that stand in the way of e-banking gaining
momentum. Some progress has been made with the passing of the Cyber laws in the form
27
of IT Act by the Indian parliament recently. IT is now a question of successful
implementation.
1.14 FUTURE OF E-BANKING IN INDIA

it it it it it it
Despite the low diffusion technology in India, the momentum of e-banking has picked up
recently, led by foreign banks and Indian private banks. It is expected to accelerate in
future for three reasons:

it it it
1. Banks now have a variety of technological means to initiate on-line banking programs
without incurring the investments needed to develop their own systems. The reach and
delivery capability of computer networks such as internet far exceeds any proprietary bank
network ever built, and makes it easier for customers to manage their money anytime,
anywhere.
2. Internet and mobile phone usage has been growing at a very fast pace, which would
facilitate acceptance of e-banking. it it it
3. Banks need to separate the content (financial product) from the distribution channel (the
branch). Clearly, the traditional model of integrated delivery has outlived its usefulness and
needs to be thought of again.

it it it it it
Though the Indian consumer at large is still not completely comfortable with technology as
a way to do banking, the affluent middle class is becoming more familiar. The younger
generations have started using computers from a very early age, and this is the generation
which would be the consumer of the future. But, it is going to be a long time before this
technology becomes the technology for the masses in India.it it it it it it it it
1.15 BENEFITS OF E-BANKING

it it it
In India e-banking is beneficial for both customers as well as banks and it has also some
limitations
28
Benefits of e-banking are as follows:
it it it it it
1.15.1 To the customer

it it it
 Anywhere banking no matter wherever the customer is in the world, on-line banking
is just a website away. Balance enquiry, request for services, issuing instructions etc.,
from anywhere in the world is possible.

it it it it it it
 Anytime banking-managing funds in real time and most importantly, 24 hrs a day, 7
days a week is possible.

it it it it
 Convenience acts as a tremendous psychological benefit all the time. it it it it it it it it it
 Cash\Card free banking through PC banking, e-banking expands the domain of it it it it it it it it it it it
access to banking services. it it it
 Brings down the "cost of banking" to the customer over a period of time.
 Cash withdrawal form any branch\ATM

it it it it it
1.15.2 To the bank

it it it
 Reduces customer visits to the branch and thereby human intervention. This impact
tells upon the establishment costs of the bank. The average cost incurred is Rs 35-
38at a traditional account, Rs. 14-16 through an ATM and only Rs. 1-3 via the
internet.
 Inter branch reconciliation is immediate thereby reducing chances of fraud and

misappropriation.
 On-line banking is an effective medium of promotion of various schemes of the

bank, a marketing tool indeed. it it it it
 Integrated customer data paves way for individualized and customized services.
29
1.16 CHALLENGES OF E-BANKING
it it it
1. Security
it
Security is first and foremost requirement of E-banking as the internet is inherently

unsecured. Securing the process in e-banking involves authenticating both customer and
banker and protecting the information to be transmitted from interception. This

authentication can be done using user ID and passwords. Banks should take effective steps it it it it it it it it it it it it it it
for the interests of customers from data tampering and hacking. Software failures can also
destroy entire portions of a network and bring huge losses. In e-banking system there are
many ways in which private information may be accesses by attackers. And this information
could be used to make fraudulent transactions that could lead to a loss of money.
 Adoption of technology it it
The new generation private banks and the foreign banks talk of e-banking by virtue of a
lean network and absence of legacy systems but the public sector banks with a vast network
have to put strenuous efforts to adopt technology for bringing e-banking to its customers.
Very few of the total bank branches of these public sector banks are computerized.
 Heavy Investment Costs it it
In order to offer e-banking services, banks have to invest huge amount of money.
They have to incur heavy maintenance costs also. This may not be the problem for well
established banks. But in case of new and small banks, they have to face financial problems
at the initial stage. Banks in developed countries have already deployed huge amount of
investments for e-banking services. For banks in developing and underdeveloped countries, it it it it it it it it it it it
this may create financial crisisThe infrastructural costs of providing such services are quite
high. A bank not only has to automate its front-end systems which the customer interfaces
with but also the back-end systems so that bank is able to provide robust functionality.
Heavy cots are in the development of back-end systems.

 Customer acceptance it
it it it it It is often said that brick and mortar branch would soon be the phenomenon
it it it it it it it it it it it it it it it it it of the it it
past, with virtual branches taking over. This appears to be an overstatement considering
30
the psyche of the average Indian who would like to hand over his cash at a bank counter
rather than drop it into an ATM. Also, fear of technology puts the average customer
away from electronic delivery channel. Normally customer‟s confidence and trust in
traditional banking system will make customers less likely to adopt new technologies. it it it it it it it it it it it it
New technologies will not be successful until customers are satisfied with privacy and
security aspects. It also requires some time to earn confidence among the customers even
it is easier and cheaper than the traditional methods.

1.17 Advantage of Internet Banking to the bank

Internet banking is a benefit both for the bank and the user. The main benefits of internet
banking to the bank is that it is cost savings, it allow the bank to reach new customers, it
raises the reputation of the bank and provide better service and satisfaction to customer.
1.17.1 Cost savings it it
According to Burnham (1998) it required less than US$25000 to establish an internet site
and less than $25000 to maintain it one year compared to the $1 to 2 millions required to
set up traditional branch and about $350,000 needed to operate it. Robinson (2000) argued
that the cost is less when transaction is done online as compare in branch. Marketing
campaigns and other advertisement are available on the internet 24hours a day without any
additional fees being charged. Internet banking is a paperless transaction which makes
financing communication quicker it results in a save of time since everything is done

electronically.
1.17.2 Attract new customer it it it
Sheshunoff (2000) admit that the bank introduced internet banking with an attempt to reach
new customers and to make exist difficult. As consumer is the most important asset of an
organization financial institutions provide personalized banking service to cater their needs.
It is said that once a consumer moved to electronic banking the risk that the consumer
changed it financial institution reduced literally. A study done by Forrester research show
that 61% of the respondent claimed that if the bank provides the service that they want they
would prefer to utilize the bank service (Dixon,1999). This is usually because switching
31
from bank to another requires much time and effort by individual consumer. Internet
banking is attractive because consumers are more satisfied with all the facilities it offer and
it is also said to create positive word of mouth.

1.17.3 Technology Acceptance Model (TAM)

it it it it
To predict and explain user acceptance organization need to understand why people accept
or reject information technology Davis et al (1989). Researcher have developed a model

called technology acceptance model (TAM). It was use to identify design problems before
user have experience with the new system. TAM suggest that when user encounter new
information system (IS) the two main factors influences how and when they will used the it it it it it it it it it it it it it it it
system. These two main construct of TAM is know as perceived usefulness (PU) and
perceived ease of use (PEOU). PU is defines as the extent to which person believes that the
using of a particular system will improve their job performance. (PEOU) is the degree to
which a person believes that using a particular system will be free from effort.
1.17.4Reduction of cost it it
Reduction of cost may be useful factor to explain the adoption of internet banking by
consumer. Internet banking reduced the cost and the time consumer take to go to bank
branch. Customer can manage their banking affairs whenever they are. Burnham et al
(2003) identify three types of influential cost. The first one, procedural cost, consists of the
difficulties of accessing information which may discourage consumer from changing brand
because it requires time and effort. The next one, financial cost consists of the price of the
product and finally relational costs refer to the time, money and effort needed in
establishing and maintaining relationship. By using internet banking all these cost can be it it it it it it it it it it it it it
eliminated.
1.17.5 Education level it it
Education also plays an important role on consumer preference to use e-banking. People
with higher education such university graduate are more comfortable and have knowledge in
using these new technology this is because education is correlated with individual computer
literacy. Therefore we can say that internet banking is not met for everyone. For example in
32
country such as Nigeria where the rate of illiterate is high it will be difficult for those
consumers to follow the instruction required to use internet banking. it it it it it it it it it
1.17.6 Problems consumer faced with internet banking

it it it it it it
Some consumers are skeptic to use internet banking because of problem they notice in the
industry. While there are some disadvantages associated with internet banking many of the
trouble start with consumer. it it it
The evidential proof of internet banking transactions can be a drawback. This problem
arises as a result of the nature of these transactions. As e-banking is a form of paperless

transaction consumer fear that if they do not have written documents they failed to prove
anything.
Security and privacy aspect are crucial factors discouraging consumer to use internet
banking. Bank must persuade consumer that their web sites are secure and adequate
safeguard have been taken to guarantee security at the transaction level. Safeguarding the
privacy of individual is essential if the public is to embrace in internet banking.

These days the nature attack is more active than passive. Previously it was only guessing
password but new threat such as Trojan, botnet and man in the middle are new ways people
used to steal personal information. This is usually done when users visited certain website
the hacker install a key logger without their knowledge and when user log in their bank
account the hacker take hold of all information and can make fraudulent transaction. As
internet banking transaction are conducted remotely bank may find it more difficult in
detecting and preventing unwanted activity. Thus banks expose themselves to money
laundering risk. A good example is the Citibank breach of security six years ago which is
one of the few successful electronic frauds Barlotta (1999). Hackers penetrate the Citibank
security system and wired money to the bank around the world when the crime was
discovered in September 1994 around $10 million were stolen and only $400,000 was
recovered.
Some people fear internet banking because they lack of trust in the online environment due
to the greater perception of risk and insecurity. This may be due to advanced treat of
33
possible improper behavior such as security lapses where personal information can be
stolen. These security lapses may result in losses to the user or adopter of the technology.
Literature has proved that trust is fairly not easy to build in an online environment
(Hoffman et al.1999). it it
However Mattila et al (2002) argue that consumers who are familiar with the internet have
few security concerns. Erikson et al (2008) observe that the adoption of internet banking in
Estonia is one of the highest in the world and the advantages had the strongest influence
compare to the risk associated in the adoption of internet banking. All this proved that the
factor influencing internet banking is unique and not mixed.

1.18 Mobile Banking

it it
Mobile banking is a financial transaction conducted by logging on the bank website by

using a mobile phone or Personal Digital Assistant (PDA) to view balance account
transaction, balance checks, payments etc. Today the mobile banking service is performed
mainly via SMS or the internet it it it it it
1.18.1 Electronic bill presentment and payment (EBPP)

it it it it it it
This service facilitate payment such as electricity, telephone, insurance premium and many
others by permitting customers to electronically settle payments of goods and services.

Customers of bank and billing companies can make use of the phone or the internet to
easily remit payment as well as accessing to their billing information. EBPP can provide
considerable savings to traditional print and mail billing and payment remittance and causes
significant reduction in the use of paper. it it it it it it
1.18.2 Electronic fund transfer (EFT)

it it it it
It refers to the transfer of money from one account to another either with the same financial
institution or across multiple institutions. Customer can transfer fund in any bank in
Mauritius but also abroad. It provides greater security since there is no tangible cash
involved and also offer continuous connection with the bank.

34
1.18.3 Loan application and transaction
it it it it
Today there is need for customer to wait in long queues to fill in a loan application as it
can be obtained online. Customers only need to sign in to have access bank website and
enter the sum of money they want to obtain as loan. The customer is either notify by mail
or by telephone.
it it
1.18.4 Automatic Teller Machine (ATM)

it it it it
As it name suggest an Automatic Teller Machine acts as a teller in a bank by giving and
ting money over the counter. More precisely it an electronic device that allows customers to
have access to a financial institutions in a public place. ATM is run through identity such
as card and password which help to identify customer. They have only to enter their PIN to
have access to the bank account in order to make withdrawal, deposits or check account
balance.
35
CHAPTER-2
REVIEW OF LITERATURE
it it
36
2 REVIEW OF LITERATURE
it it it
Product and Technology group, SBI Bank, in its paper “Corporate banking using
technology in transactions” it was inferred that Information Technology has revolutionized

the services and mode of services offered by the banks to their corporate clients. The
emergence of E-Banking has enabled the banks to offer real-time transactions and integrate
all customers‟ related functions. Indian Banks are utilizing the new technology to provide
better technology and convenient access to its customers and India is thus poised to for a
huge growth in the world of electronic banking.

Chandana R, Unnithan, Paula M.C., Swatman in their research paper titled “E-Banking
Adaptions and Dot.Com viability: A comparison of Australian and Indian experiences in the
Banking sector” a comparative study of Australian and Indian experiences in eBusiness was
done, which seeks to identify the effectiveness of dot.coms as indicators of eBusiness

uptake and success on a sector-by-sector basis was undertaken. It was concluded that the
banking industry is now a very mature one and banks are being forced to change rapidly as
a result of open-market forces such as the threat of competition, customer demand, and
technological innovations such as the growth of the Internet. E-Banking is a successful it it it it it it it it it it it it it
strategic weapon for banks to remain profitable in a volatile, and competitive market place
of today in both Indian and Australian Economies despite the differences of IT usage.
G. Kannabiran and P.C. Narayan discuss in their article the experiences of a private-
sector bank in deploying Internet banking and eCommerce in India. Strategic alignment of
business and IT strategies, planning and implementation of e-banking initiatives, and

management of benefits have been captured, along with key contributions to development. it it it it it it it it it it it
Huggins points to the fact that traditional boundaries in banking are disappearing. Using
eBusiness methods, major retailers and telecom providers are starting to offer financial
services to their clients. Extending the value chain and offering versatile services seems to
be the key to retaining competitiveness in the sector. Attitudes are also shifting from direct
transactions to savings and investments, as the baby boomers reach their fortis and fifties,
and prepare for retirement.

it it it
37
Mario Martinez Guerreroin his paper titled “Profiling the adoption of Online banking
Services in the European Union” offers an empirical investigation on the adoption of online
banking services among European citizen. The use of e-banking services is explained on the
basis of socio-demographic and Internet –specific behavioral indicators. The performed

analyses provide support for the influence of country, age, profession and several Internet
behaviors on the use of E-banking. it it it it it
The Indian Internet Banking Journey In 2009, a Reserve Bank of India survey revealed
that of 46 major banks operating in India, around 50% were either offering Internet banking
services at various levels or planned to in the near future. According to a research report,(
India Research, Kotak Securities, May 2008.) while in 2009, India's Internet user base was
an estimated 90 lakh; it was expected to reach 100 crore by 2010. Also, while only 1% of
these Internet users utilized the Internet banking services in 2001, the Internet banking user
base increased to 16.7% by mid- 2009.

it it it it it it
After deregulation in 1983 many financial institutions faced with high competitive pressure
have rethought of their IT strategies. All these institution were searching for an effective
distribution to reduce cost and improve quality service and find that internet banking can
offer all these. Birch and Young (1997) argue that internet can be use as a new delivery
channel by financial industry. Pure internet can compete with lower cost a net-based
transaction cost the bank around RS.4 per transaction which is even less than an ATM
transaction which cost about RS.15 in India Kamesam (2003). it it it it it it it it
Internet banking is among the multiple distribution channel bank have been using over more
than 20 years. Phone banking, credit and electronic purse card to pay at retail outlets, use
of Automated Teller Machine (ATM) are among the various multitude channel used by
bank.
Usually the bank makes use of bank-owned-infrastructure to deliver ATM and Phone
banking but internet banking now requires that consumer make use of non-proprietary
infrastructure and access with lower penetration level than phone lines. Bank usually offers
internet banking to reach customer and preserve market share.

38
Recent report proved that smaller banks are more motivated to use electronic channel as it
allows them to diminish their dependence on core deposits. Gondat- Larralde et al (2004)
study the competitive process in UK market for personal current accounts between 1996 and
2004. They examine speed by which the distribution market share has changed from
traditional bank to direct bank via telephone and the internet.

Experience showed that if done properly online banking can increase customer satisfaction
enhance retention and improve profitability through cost efficiency. In countries where
internet banking is most developed indicates that internet banking increased competition
among bank. it
In India still there is lack of users for internet as a medium for banking purpose, but the
banking system are upgrading and bringing many electronic banking medium for customers
so that banking can be made more convenient.

Joseph et al. (1999) investigated the influence of internet on the delivery of banking
services. They found six underlying dimensions of e-banking service quality such as
convenience and accuracy, feedback and complaint management, efficiency, queue

management, accessibility and customization. Jun and Cai (2001) identified 17 service
quality dimensions of i-banking service quality. These are reliability, responsiveness,

competence, courtesy, credibility, access, communication, understanding the customer,

collaboration, continuous improvement, content, accuracy, ease of use, timeliness, aesthetics,

security and divers features. They also suggested that some dimensions such as
responsiveness, reliability and access are critical for both traditional and internet banks. it it it it it it it it it it it it
Jayawardhena (2004) transforms the original SERVQUAL scale to the internet context and it it it it it it it it it it it it
develops a battery of 21 items to assess service quality in e-banking. By means of an

Exploratory Factor Analysis (EFA) and a Confirmatory Factor Analysis (CFA), these 21
items are condensed to five quality dimensions: access, website interface, trust, attention and
credibility.
From the provider perspective, there are target quality and delivered quality. The focus of
process- or supply-led quality definition is rather internal than external, and it is defined as
conformance to requirements. It lays emphasis on the importance of the management and

39
the supply-side quality, and there is an important role of the process in determining the
quality of outcome (Ghobadian, 1994). Achieving the quality of conformance between the
planned (target) quality level and the real quality delivered to customers depends on the
service quality management system in an organization.

it it it it it it
IAMAI report on online banking 2006. 43% of online banking user haven‟t started online
financial transaction because of security reasons, 39% haven‟t started because they prefer
face to face, 22% haven‟t started because they don‟t know how to use, for 10% sites are
not user friendly and for 2% banks are not providing the facility of internet banking.
According to research 68% of the customers can not say that when they will be starting the
financial transactions through internet. it it it
Maximum numbers of online banking users are male and maximum of them are in age the
group of 25-35. Numbers of female users are very less i.e. 17% only. More than 60% of
the people who are having account with have accounts in 3-4 banks.
Only 37% of Indian Internet users come from Top 10 cities i.e. Mumbai, Bangalore, Delhi,
Calcutta, Chennai, Pune, Hyderabad, Ahmedabad, Surat and Nagpur. Another day and
another number. As per IAMAI and I-cube, the number of active Internet user (i.e. ones
who logon to Internet atleast once a month) is now 32 million and numbers who have used
Internet atleast once stands at 46 million.it it it it it it it
The Indian Internet Banking Journey In 2001, a Reserve Bank of India survey revealed
that of 46 major banks operating in India, around 50% were either offering Internet banking
services at various levels or planned to in the near future. According to a research report,(
India Research, Kotak Securities, May 2000.) while in 2001, India's Internet user base was
an estimated 9 lakh; it was expected to reach 90 lakh by 2003. Also, while only 1% of
these Internet users utilized the Internet banking services in 1998, the Internet banking user
base increased to 16.7% by mid- 2000.

it it it it it it
Meuter et al. (2000) have identified critical incidents of customer satisfaction and
dissatisfaction with technology-based service encounters. Given that business-to-business it it it it it it it it
transactions are the fastest growing segment of technology-driven services (Hof, 1999);
Meuter and his colleagues (2000) suggested investigating what drives business customer
satisfaction or dissatisfaction with technologydriven services. According to Gönroos (1982),

40
customers distinguish the quality of customer interactions that take place during service
delivery (functional quality) and the quality of the outcome the customer receives in the
service encounter (technical quality). it it it
Customers perceive the quality of services of Internet banking based on the performance of
online delivery systems – not on the processes in which the delivered service is developed
and produced. Because customers perceive Internet banking service quality based on
relatively standardized outcomes determined by online systems, customer attitudes toward

that outcome reflect overall quality of services delivered

Customers usually perceive risks in conducting transactions electronically andit it it it it it it it it
particularly if the transactions involve money. Risk perception can be of six different types:
time risk, finacial risk, performance risk, psychological risk and safety/confidentiality risk. It
is generally considered that risk perception could be higher for electronic banking services.
This study aims to understand extent to which whether this is consideration is valid as well
as to determine the levels of risk perception differences among those using Internet Banking
and those not using it.

it it it it
Daniel (1999), in his research paper, described e-banking as the newest delivery channel
offered by the retail banks in many developing countries. The objective of the study was to
analyze the current provision of electronic services of major retail banking organizations in
the UK. The researcher through a questionnaire found that 25% banks in the UK were those
already providing e-banking services, 50% banks were testing or developing such services
while 25% were not providing any e-banking services. Electronic channels, PC, digital TV
and all these provide greater accessibility and services at lower price. To make services
more adaptable, customers should be provided maximum choice and convenience.

Restriction and limitation within organization to operate the services and its market share or
strength were viewed as important to decide and operate the e-banking services.
Sathye (1999), in his research paper, explored the factors affecting the adoption of internet
banking by Australian customers. The author stated that internet and other virtual banking
had significantly lower the cost structure than traditional delivery channels. So, the banks
should encourage customers to use internet for banking transactions. The author also
41
emphasized that for adoption of internet banking, it was necessary that the banks offering
this service made the consumers aware about the availability of such a product and explain
how it adds value to the other products. The analysis of the study showed that security
concerns and lack of awareness stand out as the reasons for non-adoption of internet
banking by Australian customers. However, internet should be considered as a part of

overall customers‟ service and distribution strategy. These measures could help in rapid
migration of customers to internet banking resulting in considerable saving of operating

costs of banks. it it it
Talwar (1999) examined the IT Revolution in banking sector which had not only provided
improved service to the customer, but also reduced the operational cost. The author brought
out that computerization of banks, introduction of Real Time Gross Settlement System,
setting up of Infinet, Electronic Payment Products(such as Electronic Clearing Service) had

ensured better resource management, systematic efficiency and substantially reduced inter-
branch reconciliation entries. However fear of hacking, tampering of data, secrecy

maintenance were certain issues which pose threats on usage of electronic banking. The it it it it it it it it it it it it it
challenges in banking sector were manifold but still the constitution of National Payment
Council by RBI and development of the integrated payment and settlement system was a
step in this direction to remove the obstacles coming in the way of using electronic
banking. it
Wenninger (2000) evaluated the emerging role of electronic commerce in banks. E- it it it it it it it it it it it
commerce had created new form of competition and compelled banks to make choices
about the services they offer, the size of their branch network and extent of their support to
interbank payments network. The main objective of the study was to understand the
changes that had taken place with the introduction of electronic commerce. Development of
e-banking products such as electronic billing, establishing internet portals, electronic checks,
ATM, etc. had provided additional services to customers‟. The author also emphasized upon
the strategic and operational risks which arise in banking sector. These could be minimized
with a cost efficient electronic process.

it it it it it it
Kamesam (2001) studied the changes that took place in the Indian banking industry which
emphasized on technological advancements and profitability in banks. Technology has it it it it it it it it it it
42
helped in centralized data storage with decentralized processing which has helped in
reduction of costs and NPAs. Further, emergence of services such as electronic data
interchange (EDI), usage of smart cards, RTGS, e-commerce; all resulted in increasing the
level of profitability and productivity of banks. The author concluded that in order to reduce
crimes, security audit should be done which will be helpful in improving customer service,
increase systematic efficiency and thus increased productivity and profitability.

43
CHAPTER-3
RESEARCH METHODOLOGY
it
44
3. RESEARCH METHODOLOGY
it it
3.1 STATEMENT OF THE PROBLEM

it it it it
It is aimed to study the Impact of internet banking on development Indian banking sector.
The project is analyzed the demographic, psychographic and preference characteristics of the
customers in using Internet Banking. It includes the detailed study of customers focusing
on the various parameters that lead to identifying and understanding the perception of the
customer and behavior regarding services offered by Banks.So it becomes important to

reveal a correct diagram and impact of the Internet

it it it it it it it it it it Banking provided by it maintaining it it it it it
their dignity and position.

it it it
The main problem of my study are:-

it it it it it it
 To Identify and Study the emerging concept of Internet Banking in India

 To describe the facilities of Internet Banking provided by bankss

 To analyze the issues of Internet Banking & its future.

 To recommend innovative services/offers through Internet Banking

3.2 OBJECTIVES OF THE STUDY

it it it it
Here in this survey conducted there is more than one objective taken which are described as
follows:-
 To measure the satisfaction level of people.it it it it it it
 To study the risk involved in e-banking. it it it it it it
 To study the impact of internet banking on development Indian banking sector

3.3. RESEARCH METHODOLOGY

it it
Research methodology is a way to systematically solve the research problem. The research
methodology included the various methods and techniques for conducting a research. it it it it it it it it it it it
“Marketing Research is a systematic design, collection, analysis, and reporting of data and
finding relevant solution to a specific marketing situation or problem.” Sciences define

research as “ the manipulation of things, concepts or symbols for the purpose of

45
generalizing to extend, correct or verify knowledge, whether that knowledge aids in
construction of theory or in practice of an art.” it it it it it it it it
Research is thus, an original contribution to the existing stock of knowledge marketing for
its advancement, the purpose of research is to discover answers to the questions through the
application of scientific procedure. it it it it it
My research project has a specified framework for collecting the data in an effective
manner. Such framework is called “Research Design”. The research process which was
followed by me consisted following steps. it it it it it
3.3.1 Developing the Research Plan:

it it it it
The second stage of research calls for developing the efficient plan for gathering the needed
information. Designing a research plan calls for decision on the data sources, research
approach, research instruments, sampling plan and contacts methods. The research is
descriptive in nature and is aimed at analyzing the customer awareness regarding various E-
banking facilities. it
The development of Research plan has the following Steps:

3.3.2 Data Sources it it
Two types of data were taken into consideration i.e.

Secondary data and Primary data. My major emphasis was on gathering the primary data.
The secondary data has been used to make things more clear.
i. Primary Data: it it it Direct collection of data from the source of information,

technology information, technology including personal interviewing, survey etc. it it it it it it it
ii. Secondary Data: Indirect collection of data from sources containing past or it it it it it it it it it it it
recent it information it like it Bank‟s it Brochures, it Annual it Publications, it Books, it
Newspaper and Magazines etc. it it it
3.3.3 Research Approach it
Surveys are best suited for Descriptive Research. Surveys are undertaken to learn about
people‟s knowledge, beliefs, preferences, satisfactions and so on and to measure these

46
magnitudes in the general public. Therefore I have done this Survey for the Descriptive
Research Process. it
3.3.4 Research instrument it
A close ended questionnaire was constructed for my survey. A Questionnaire consisting

a set of questions was presented to respondents for their answers.

3.3.5 Sampling Plan

it it
The sampling plan calls for three decisions.

it it it it it it
(a) Sampling unit: Who is to be surveyed? it it it it it it
The target population must be defined that has to be sampled. It is necessary so as to

develop a sampling frame so that everyone in the target population has an equal chance
of being sampled. The sampling unit of this project was customers of bank of Dehradun
through random sampling . it it it
(b) Sample Size: How many people have to be surveyed? it it it it it it it it
Generally large sample gives more reliable results than small samples. The sample
consisted of 100 respondents. The sample was drawn from people having different
educational qualifications, occupations and age group. The selection of the respondents
was done on the basis of simple random sampling.

Contact Methods it
Once the sampling plan has been determined, the question is how the subject should be
contracted i.e. by telephone, mail or personal interview. Here in this survey, I have
contacted the respondents through personal interviews.

it it it it it
Collecting the information it it
The collection of data is a tedious task. For conducting any sort of research. Data was
needed. So for my research, there was plenty of primary data and for increasing the
validity of information collected, some books, journals, pamphlets, information about the
bank were studied and taken into considerations. After this, I have collected the
information from the respondents with the help of questionnaire. it it it it it it it it
47
a) Collection of Primary Data: Primary Data is the data collected from the it it it it it it it it it it it it
original source. In my survey and study, there was optimum availability of

primary data because every aspect was witnesses carefully at each point.
Questionnaire and personal interviews were the main instruments, which were it it it it it it it it it it
used for collecting primary data. it it it it
b) Collection of Secondary Data: Secondary Data is the one which has already it it it it it it it it it it it it
been collected by someone else and some other person is using that
information. The source of secondary data was, some related books it it it it it it it it it it it and it
websites related to the bank. The competent staff of the bank helped me a lot it it it it it it it it it it it it it it it
in providing information about the bank

it it it it it
3.4 Analyze the Information

it it it it
The next step is to extract the pertinent findings from the collected data. I have
tabulated the collected data and developed frequency distributions. Thus the whole data
and developed frequency distributions. Thus the whole data was grouped aspect wise
and was presented in tabular form. Thus, frequencies and percentages were prepared to
render impact of the study.it it it it
3.5 Presentation of findings:

it it it
This is the last and important step in the research process. The findings are presented in
the form of graphs, pie charts, conclusions, suggestions and recommendations after data
analysis.
3.6 Limitation of the Project Report

it it it it it it
There are some possible limitations, which hinders the research findings. They are as
follows:
 Inadequate and limited survey sample done by the respondents is nothing compares
to the whole population of Dehradun, which might cause inaccuracy for the final
findings and conclusions. it it
48
 The respondents from whom primary data was gathered at times displayed complete
ignorance about the complete-banking facility range, which was being studied.
 it Lack of time is the basic limitation in this project.

 it Lack of proper information and experience on the part of the researcher.

49
CHAPTER-4
DATA ANALYSIS AND

it it it
INTERPRETATION
50
DATA ANALYSIS & INTERPRETATION
it it it
1. it Do you know about Internet banking?

it it it it it
RESPONSE NO. OF RESPONDENT

it it
YES 94
NO 6
TOTAL 100
Do you know about Internet banking?
6%
YES
NO
94%
INTERPRETATION
Most of respondent are know about Internet banking i.e. 94%
51
2. Do you use credit card?
it it it it

it it
YES 35
NO 65
TOTAL 100
Do you use credit card
35%
YES
NO
65%
INTERPRETATION
Less no. of respondents is uses or have credit card only 35% use credit card.
52
3. Do you use debit card you use?
it it it it it it

it it
YES 100
NO 0
TOTAL 100
YES
100 NO
INTERPRETATION
100% respondent are using debit card.
it it it it it
it
53
4. Do you use online banking facility?
it it it it it

it it
YES 30
NO 70
TOTAL 100
Do you use online banking facility
30%
YES
NO
70%
INTERPRETATION
30% respondents are using online banking facility.
it it it it it it
54
5. Do you use telebanking facility?
it it it it

it it
YES 40
NO 60
TOTAL 100
Do you use telebanking facility
40%
YES
NO
60%
INTERPRETATION
60% respondents are not using telebanking only 40% of respondent use telebanking.
55
6. Do you use mobile banking facility?
it it it it it

it it
YES 55
NO 45
TOTAL 100
Do you use mobile banking facility
45%
YES
55% NO
INTERPRETATION
Most respondent are using mobile banking i.e.55% as today mobile become more
popular mean of telecom which is easy in portability & through which individuals
get connected anywhere and anytime .

it it it it it
56
7. Are you satisfied by Internet banking facility provided by bank?

it it
FULLY SATISFIED it 24
SATISFIED 30
LESS SATISFIED
it 18
DISSATISFIED 22
TOTAL 94
Do you satisfied by Internet banking facility provided by

bank
23% 26%
FULLY SATISFIED
SATISFIED
LESS SATISFIED
19% DISSATISFIED
32%
INTERPRETATION
81% respondent are satisfied by Internet banking facility provided by bank which
includes 26% fully satisfied, 32% are only satisfied & 23% are less satisfied & rest
of 11% are dissatisfied.

it it it
57
8. Do you think Internet Banking facility is time saving facility?

it it
YES 100
NO 0
TOTAL 100
YES
100 NO
INTERPRETATION
All respondent are think that Internet banking facility are saved time.
58
9. Is through Internet banking facilitated to easy transaction & make
other banking work easy?

it it it

it it
YES 95
NO 5
TOTAL 100
Is through Internet banking facilitated to easy transaction

& make other banking work easy
5%
YES
NO
95%
INTERPRETATION
95% respondent say Internet banking made easy to all banking works.
59
10. Is Internet-banking is secure?
it it it

it it
YES 86
NO 14
TOTAL 100
Is Internet banking is secure
14%
YES
NO
86%
INTERPRETATION
86% are think that Internet banking is secured & 14% think that it is unsecured.
60
11. Is Internet banking reducing work load from banks?

it it
YES 97
NO 3
TOTAL 100
Is Internet banking reducing work load from banks

3%
YES
NO
97%
INTERPRETATION
97% say Internet banking reduce work load from banks branches & 3% don‟t think
so.
61
12. Is e-banking facility i.e. through sms & e-mail are effective medium
to know about new scheme?

it it it it

it it
YES 90
NO 10
TOTAL 100
Is e-banking facility i.e. through sms & e-mail are effective

medium to know about new scheme
10%
YES
NO
90%
INTERPRETATION
90% respondent says that through e-banking they easily know about new services &
schemes and other offers of bank & rest of 10% not think so.
62
CHAPTER-5
FINDINGS, SUGGESTIONS,
it it
CONCLUSION
63
5.1 FINDINGS it
1. There is excellent awareness about e-banking among the customers as 94%

respondents are aware of e-banking. it it it it
2. Most of the respondents are using debit card in comparison to

it it it it it it it it it it it it credit card as it it it
ATM cum debit card facility i.e. 100 out of 100 respondent use debit card &
only 35 respondent use credit card.

it it it it it
3. Most of respondent use mobile banking than other two telecommunication facility
of e-banking that are online banking & telebanking i.e. 55% out of 100
respondent use mobile banking on other hand 40% & 30% are use telebanking &
online banking respectively this is because of popularity & portability of mobile.

4. Most of respondent are satisfied by facilities provided by their banks.

5. Most of the time Internet banking make bank work easy, fast & less time
consuming to an individual and most of respondent also think it is secure.

6. Most of people think Internet banking has reduce work load from bank branches
and also think that it is an effective medium to introduce new services &
schemes of banks to customers. it it it it
64
5.2 SUGGESTIONS
it
After analyzing the electronic banking concept in India there are some suggestions for
improving the electronic banking in India:-

it it it it it
1) Improve customer access it it
2) it Facilitate the offering of more services

it it it it it
3) it Increase customer loyalty through better service

it it it it it
4) Attract new customers by effective promotional comp

5) Provide security to customers against unauthorized access through

hacking it it it it it it it
65
5.3 CONCLUSION
it it
Internet banking is changing the banking industry and is having the major effects on
banking relationships. The net banking, thus, "now is more of a norm rather than an
exception in many developed countries" due to the fact that it is the economical way of
providing banking services. Banking is now no longer confined to the traditional brick and
mortar branches, where one has to be at the branch in person, to withdraw cash or deposit
a cheque or request a statement of accounts. There is need to scan and analyses the market
and respond to the needs of customers and to generate awareness regarding advantages of
internet banking. it it it
it Providing internet banking is increasingly becoming a 'need to have' than a 'nice to have'
services.
66
BIBLIOGRAPHY
Books it
 Electronic Banking : it it
 By SCN Education .B.V

it it it
 Indian Banking In Electronic Era

it it it it
 By S.S. Kaptan ,N. S. Choubey

it it it it it
 Banking &Financial Market In India it it it it
 By Niti Bhasin it it
 Banking Sector Liberalization it it
 By Christian Roland it it
 Issue In Electronic Banking

it it it
 By Andrea Schaechterit it
 An introduction to computers and their application in banking

 By T.N. Srivastava it it
Journals it
 Himani Sharma(2011), “Bankers‟ Perspectives on E-Banking and Its Challenges:

Evidence from North India” The IUP Journal of Bank Management, Vol. X, No. 4,
2011 it
 Cooper R G (1997), “Examining Some Myths About New Product Winners”, in R

Katz (Ed.), The Human Side of Managing Technological Innovation, pp. 550-560,
Oxford. it
 Daniel E (1999), “Provision of Electronic Banking in the UK and Republic of

Ireland”, International Journal of Bank Marketing, Vol. 17, No. 2, pp. 72-82.
 Sathye M (1999), “Adoption of Internet Banking by Australian Consumers: An

Empirical Investigation”, International Journal of Bank Marketing, Vol. 17, No. 7,

pp. 324-334.
it it
 Nancy B, Lockett A, Winklhofer H and Christine E (2001), “The Adoption of

Internet Financial Services: A Qualitative Study”, International Journal of Retail and

Distribution Management, Vol. 29, No. 8, pp. 390-398. it it it it it it it it
67
 Suganthi B and Balachandran P (2001), “Internet Banking Patronage: An Empirical
Investigation of Malaysia”, Journal of Internet Banking and Commerce, Vol. 6, No. it it it it it it it it it it it it
1, available at www.arraydev.com/commerce/JIBC
it it it
QUESTIONNAIRE
Q1. Do you know about Internet banking?

it it it it it it
it it it it it it it it a) YES ( it it it it it it ) it it it it it it it b) No ( it it it it it it ) c) Cant‟say ( it it it it it it )
Q2. Did your bank provide Internet banking facility?

Q3. Do you use credit card?

it it it it it
Q4. Do you use debit card ?

it it it it it it
Q5. Do you use online banking facility?

it it it it it it
Q6. Do you use telebanking facility?

it it it it it
Q7. Do you use mobile banking facility?

Q8. Do you use ATM facility for day to day transaction?

Q9. Are you satisfied by Internet banking facility provided by your bank?
it a) Fully satisfied (
it it it it it it it ) b) satisfied (
it it it it it it it it ) c) less satisfied (
it it it it it it it it it ) d) dissatisfied (
it it it it it it it it )
68
Q10. Do you think Internet banking facility is time saving facility?
it it it it it it it it a) YES ( it it it it it it ) it it it it it it it b) No ( it it it it it it ) c) Cant‟say (
it it it it it it )
Q11. Is through Internet banking facilitated to easy transaction & make other banking work
easy?
it it it it it it )
Q 12. Is Internet banking is secure?

it it it it it it
it it it it it it )
Q13. Is Internet banking reducing work load from banks?

it it it it it it )
Q14. Is Internet banking facility i.e. through sms & e-mail are effective medium to know
about new scheme? it it
it it it it it it )
69

ALOK PUROHITt

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ALOK PUROHITt

Uploaded by

Copyright:

Available Formats

Dissertation Report

“IMPACT OF INTERNET BANKING ON

In the partial fulfillment for the Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

DEPARTMNET OF MANAGEMENT STUDIES,

I hereby declare that, this project title “IMPACT OF INTERNET BANKING ON

Signature of the Candidate

DATA ANALYSIS AND INTERPRETATION

Internet – its basic structure and topology it it it it it it

connected a network is created; connecting two or more networks create „internetwork‟or

Internet. The Internet, as commonly understood, is the largest example of

networks and host computers. it it it

ARPANet (Advanced Research Project Administration Network), developed in the late

used predominantly in areas of scientific research and communication. By the1980s, it

the framework of today‟s Internet.ARPANet was officially decommissioned in 1990.

It has become possible for innumerable computers operating on different platforms to

directly establish communication it it

1. INTRODUCTION OF ELECTRONIC BANKING

Electronic banking is doing banking electronically, by bringing together banks and

Electronic-Banking refers to banking done through any electronic medium - Tele-banking, it it it it it it it it it it it

Automated Teller Machines (ATMs), Net banking etc. it it it it it it it

The new concept of

Customers whether individuals or corporate no longer have to go to go the bank to do their

or the telephone and through the system of internet banking.

1.2 EVOLUTION OF ELECTRONIC BANKING

popularity with a sizable group of consumers and bankers.

The effectiveness of e-banking system was defined by these main factors:

branches of the same bank had different system. it it it it it it it

1.3 ELECTRONIC BANKING IN INDIA

branch banking services. it it it

distribution strategies of Non-Branch-Delivery. it it it

from the well entrenched public sector banks.

1.4 THE FEW RELEVANT FACTS:

offer shared ATM networks.

ATM cards to debit cards. it it it it

banks as well. This seems to be the latest growth area.

perform routine banking transactions without interacting with human teller.

HDFC, Citibank, GTB, UTI bank, IDBI bank etc.

business. It allows the customers to it it it it it

 Transfer money to and from accounts it it it it it

 View account information it it

 Deposit cheques or cash it it it

24 hours, the customer is most satisfied.

person wanting the cash). it it it it

using a local access number via a modem.

for leased line.

an independent service provider. Bank-owned processors normally support only bank-owned

machines, whereas the independent processors support merchant-owned machines.

1.5.2 Parts of the Machine

this information to route the transaction to the cardholder's bank.

transaction process. Leased-line machines commonly use a monochrome or color it it it it it it it it it it

happens with a bill that is excessively worn or torn, or is folded.

problem with the bills or with the dispenser mechanism.

Company Pvt. Ltd. it it it

art electronic funds transfer system to be shared by different participating banks.

1.6.1 SPNS is capable of offering the following services:

 Extended hours services it it

 Across the bank payments it it it

 Printing of statement of account it it it it

 Request for cheque book it it it

 Standing instructions and statement of accounts it it it it it

up their own networks.

make the banking transactions truly global.

1.7 CREDIT CARDSit it it