EFFECTS ON BANKING ONLINE TRANSACTION DUE TO PANDAMIC

(A Case of Machhapuchchhre Bank, Bhojpur branch)

Term paper

Submitted to:

Ashma Shrestha

Roll no: 77341015

February, 2021
CHAPTER I

INTRODUCTION
1.1 Background of the Study

Online banking is a term used for performing transactions, payments etc. over Internet through a
bank, credit union or building society’s secure website. With the development of internet
banking customers received the freedom of banking at any time at any place all one need is a
computer with internet access. The web browser is used for making the online transactions
(Berger, 2003). On the go, technology kept developing and this has enabled banks in making
online transaction services safe and more economical. Day by day banks were able to introduce
more and more services online. Today, we can say it is difficult for a bank to survive without
having online banking facilities (Zerbe, 2001). The expenditure banks have to incur to develop
and maintain online banking tools are much cheaper hence this will help banks to give better
service at cheaper costs (Kotler and Keller, 2006). Also, we cannot forget the wide reach of
service it offers. However, the target customers need to know how to use the service. Payment to
merchants is another advantage of online banking offers (Kothari, 1999; Zerbe, 2001).
We have seen transformations in the banking systems every other day and conventional banking
is reducing. Digital banking is always a preference for account holders nowadays (Singh et al.,
2017). It is pertinent to mention here that customer experience is always an important
consideration for organizations (Mansoor et al., 2020). A recent pandemic (COVID-19) was also
one of the uncertain situations which helped customers, employees and public in large realize
changes in business models (Seetharaman, 2020). Banks noticed consumer’s shift towards digital
or electronic banking during the pandemic times (Baldwin and Mauro, 2020; W_ojcik and
Ioannou, 2020). There were rumors about spread of virus from cash notes which also became an
important reason to tilt people toward e-banking (Auer et al., 2020; SivaKumar et al., 2020). The
spread of this virus was very rapid (Novel, 2020), as it killed numberless people in nearly eight
months (till August 2020). Along with the spread of virus, the fear termed as a social stigma and
the real pandemic was noticed (Aslam et al., 2020). The foundation of banking services lies in
the trust factor among the banks and consumers with an ultimate goal to provide quality services
on lesser transaction costs (Shankar and Jebarajakirthy, 2019). Trust and loyalty hold great
importance in electronic environments (Chaudhry et al., 2009). Similarly, quality of services
was also termed as important in not only banking but also in other industries, e.g., restaurants
(Malik et al., 2020; Malik et al., 2013; Safi and Awan, 2018), construction (Al-Momani, 2000;
Love et al., 2000), education (Joseph and Joseph, 1997; Latif et al., 2019), etc. The COVID-19
has changed the way people live, interact and make purchase decisions. The fear of COVID-19 is
life threatening for people around the world (Mamun and Ullah, 2020). Particularly, students,
these days are restricted to take a class online (Basilaia and Kvavadze, 2020), teachers and
officials need to have online meetings (Basilaia et al., 2020; Sahu, 2020), and buyers and sellers
are focusing on electronic means too (Hall et al., 2020; Rovetta and Bhagavathula, 2020). One of
the latest technologies adopted by bank is electronic banking or e-banking. The term electronic
banking refers to process of performing various banking activities by the use of electronic
channels through telephone, mobile phone, internet, etc (Sharma, 2011).
In 2008, Bill Gates announced that "banking is essential, banks are not" which reflect that there
is a need to adopt e-banking in order to replace the traditional bank branch (Baten and Kamil,
2010). Today's banks and financial institutions have moved to e-banking in their efforts to cut
costs while maintaining reliable customer services (Kolodinsky and Hogarth, 2001). E-banking,
which consists of uses of different technologies such as Automated Teller Machine (ATM), Point
of Sales (Pos), Telephone Banking (Tele-Banking), Internet Banking, Mobile Banking, etc have
created new ways of handling banking transactions and are also important for the banks in order
to have the long-term survival (Burnham, 1996). Traditional method of banking is limited by the
time, space, and resources but through e banking, banking services can be obtained outside of the
normal opening hours, that is, one can get access to bank services twenty-four hours a day and
seven days a week (Rubino, 2000). Services like balance inquiry, account information, funds
transfer, paying bills electronically, applying for a loan, viewing the image of their cheque and
deposit slip, etc are offered through e-banking (Turban et al 2004). Although all the customers
get benefit from these services, especially it is appealing to the customers who have hard time
keeping track of their finances (Deitel et al., 2001).

1.2 Statement of the Problem

1.3 Objectives of the Study

a) To find out the effects on banking online transaction due to pandemic

b) To find out the current trends of online banking transaction.

1.4 Research Question

R1 What are the factor effecting on banking online transaction due to pandemic.

1.5 Significance of the Study

The finding of this study will benefit machhapuchchhre bank which will help them to understand
the importance of banking online transaction. This study will also generate knowledge regarding
the uses of online transaction in pandemic and its demand. The study is important because no
one studied the aspect of effect on banking online transaction due to pandemic before. It’s a new
area of study and gives fresh insights to bank about banking online transaction and the
importance of it in today’s world or going trends. The study will give the fresh insights to
bankers that how they can attract the maximum number of customers by giving knowledge
regarding banking online transaction facilities. This research becomes even more useful in the
context of Nepal, which has hardly any research data available on the mentioned subject matter.

1.6 Delimitation of the Study

a) The study uses non probability sampling method.

b) The study confines to Bhojpur only.

c) The data collected in the study is particularly based on the questionnaire

1.7 Organization of the study

The study is divided into five chapters, 1) Introduction, 2) Literature Review, 3) Research
Methodology, 4) Data Presentation and Analysis and 5) Summary, Discussion, Implications and
Suggestions accompanied by references and supplementary section.

Chapter I deal with the introduction of the research. It consists of the background to the study,
Problem Statement, Research Question, Significance of the Study and Limitations of the Study.
Hence, this study includes the subject matter of the study.

Chapter II deals with the literature review of definition, empirical review of related journal
articles. This review helps to develop the necessary foundation for carrying out further work on
research on aspects such as methodology, analysis plan, conceptual framework and discussion
part.

Chapter III deals with research methodology section. It consists of research design, type of
research, sampling size, sampling area, sampling technique, data analysis and statistical tools,
data validity and reliability.

Chapter IV deals with the presentation of results and analysis of results which is a part of the
SPSS (Statistical Package for Social Science). Data are presented in tabular form and analyzed as
per the results.

Chapter V deals with the summary, discussion, implications and suggestions. The discussion is
based on the results shown by the study while also comparing with other reviewed journal
articles. The suggestions are also based on the findings of the study.