A PROJECT REPORT ON

E- BANKING

A PROJECT REPORT SUBMITTED TO

THE DEGREE OF BACHLOR OF COMMERCE
(BANKING & INSURANCE)
UNDER THE FACULTY OF COMMERCE

SUBMITTED BY
BADWANIA PAWAN RAJENDRA MAYA

UNDER THE GUIDANCE OF

AAST.PROF. PRIYANKA GOSWAMI

KERALEEYA SAMAJAM DOMBIVLI'S

MODEL COLLEGE
KHAMBALPADA, THAKURLI (EAST)

UNIVERSITY OF MUMBAI
MARCH 2022

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 TABLE OF CONTENTS

SERIAL DESCRIPTION PAGE

NO. NO.
1. CERTIFICATE

2. DECLARATION

3. ACKNOWLEDGEMENT

4. CHAPTER 1
INTRODUCTION
5. CHAPTER 2
RESEARCH METHODOLOGY
6. CHAPTER 3
LITERACTURE REVIEW
7. CHAPTER 4
DATA ANALYSIS & INTERPRETATION
8. CHAPTER 5
CONCLUSION
9. BIBLIOGRAPHY

10. WEBLIOGRAPHY

11. APPENDIX

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 DECLARATION

I, THE UNDERSIGNED MR. BADWANIA PAWAN RAJENDRA MAYA HERE BY

DECLARE, THAT THE WORK EMBODIED IN THIS PROJECT TITLED “A PROJECT

REPORT ON E-BANKING", FORMS MY OWN CONTRIBUTION TO THE RESERCH

CARRIED OUT UNDER THE GUIDANCE OF ASST. PROF. PRIYANKA GOSWAMI IS A

RESULT OF M OWN RESERCH WORK AND HAS BEEN PREVIOUSLY SUBMITTED TO

ANY OTHER UNIVERSITY FOR ANY DEGREE/DIPLOMA TO THIS OR ANY OTHER

UNIVERSITY.

I, HERE BY FURTHER DECLARE THAT ALL THE INFORMATIO OF THIS DOCUMENT

HAS BEEN OBTAINED AND PRESENTED IN ACCORDANCE WITH ACADEMIC RULES

AND ETHICAL CONDUCT.

BADWANIA PAWAN RAJENDRA MAYA

BACHELOR OF COMMERCE
BANKING AND INSURANCE

CERTIFIED BY
ASST. PROF. PRIYANKA GOSWAMI

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 ACKNOWLEDGEMENT

I WOULD LIKE TO ACKNOWLEDGE THE FOLLOWING AS BEING IDEALISTIC

CHANNELS AND FRESH DIMENSIONS IN THE COMPLETION OF THIS PROJECT.

I TAKE THIS OPPORTUNITY TO THANK THE UNIVERSITY OF MUMBAI FOR GIVING

ME CHANCE TO DO THIS PROJECT.

I WOULD LIKE TO THANK MY PRINCIPAL, DR. VINAY BHOLE FOR PROVIDING THE
NECESSARY FACILITIES REQUIRED FOR COMPLETION OF THIS PROJECT.

I TAKE THIS OPPORTUNITY TO THANK OUR COORDINATOR ASST.PROF. GEETA

NAIR, FOR HER MORAL SUPPORT AND GUIDANCE.

I WOULD ALSO LIKE TO EXPRESS MY SINCERE GRATITUDE TOWARDS MY PROJECT

ASST. PROF. PRIYANKA GOSWAMI WHOSE GUIDANCE AND CARE MADE THE
PROJECT SUCCESSFUL.

I WOULD LIKE TO THANK MY COLLEGE LIBRARY, FOR HAVING VARIOUS

REFRENCE BOOKS AND MAGAZINES RELATED TO MY PROJECT.

LASTLY, I WOULD LIKE TO THANK EACH AND EVERY PERSON WHO DIRECTLY OR
INDIRECTLY HELPED ME IN THE COMPLETION OF THE PROJECT.

BADWANIA PAWAN RAJENDRA

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 CHAPTER 1
INTRODUCTION

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 Introduction to E- banking

A System of trading in money which involved safeguarding deposits and making funds available
for borrowers. In general terms, the business activity of accepting and safeguarding money owned
by individuals and entities, and then lending out this money in order to earn a profit.

History of E-banking in India

The precursor for the modern home online banking services were the distance banking services
over electronic media from the early 80s. the term online become popular in the late 80s and refers
to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone
line. “Home Banking” can also refer the use of numeric keypad to send tones down a phone line
with instructions to the bank. Online services started in New York in 1981 when four of the city’s
major banks (Citibank, chase Manhattan, chemical and manufacturers honover) offer home
banking services using the videotext these banking services never become popular except in France
where the use of videotext (Minitel) was subsidized by the telecom provider and the UK, where
the pestle system was used. The UK’s first home online banking services were set up by the
Nottingham Building Society (NBS) in 1983.

The system used was based on the UK’s pestle system and used a computer, such as the BBC
Micro, or keyboard connected to the telephone system and television set. The system (known as
‘Home link’) allowed on-line viewing of statement, bank transfers and bill payment. In order to
make bank transfers and bill payment, a written instruction giving details of the intended recipient
had to be sent to the NBS who set the details up on the home link system. Typical recipient were
gas, electricity and telephone companies and accounts with another bank. Details of payments to
be made were input into the NBS system by the account holder via pestle. A cheque was then send
by NBS to the payee and an advice-giving details of the payment was send to the account holder.
BACS was later used to transfer the payment directly. Stanford federal credit Union was the first
financial institution to offer online internet banking services to all of its members in Oct, 1994.

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To make this write-up more explanatory, I prefix the scenario as phase I, phase II and phase III.
Phase I The General Bank of India was set up in the year 1786. Next come bank of Hindustan and
Bengal bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) and Bank of Madras (1843) as independent units and called
it presidency Bank. These three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly European's shareholders. In 1809
Allahabad banks was established and first time exclusively by Indians, Punjab National Bank Ltd.
was set up in 1894 with headquarters at Lahore.

Between 1906 and 1913, central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and
Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the
growth was very slow and banks also experienced periodic failures between 1913 and 1948. There
were approximately 1100 banks, mostly small.

The following are the steps taken by the government of India to Regulate
Banking Institutions in the Country:

1945: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 cores.After the nationalization of
banks, the branches of the public sector bank India rose to approximately 800% in deposits and
advances took a huge jump by 11,00o%. Banking in the sunshine of government ownership gave
the public implicit its faith and immense confidence about the sustainability of these institutions

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Electronic banking is an umbrella term for the process by which a customer may perform
banking transactions electronically without visiting a brick-and-mortar institution. The following
terms all refer to one form or another of electronic banking: personal computer (PC) banking,
Internet banking, virtual banking, online banking, home banking, remote electronic banking, and
phone banking. PC banking and Internet or online banking is the most frequently used
designations. It should be noted, however, that the terms used to describe the various types of
electronic banking are often used interchangeably.

Electronic banking is an activity that is not new to banks or their customers. Banks having
been providing their services to customers electronically for years through software programs.
These software programs allowed the user ‘s personal computer to dial up the bank directly. In the
past however, banks have been very reluctant to provide their customers with banking via the
Internet due to security concerns. Today, banks seem to be jumping on the bandwagon of Internet
banking. Why is there a sudden increase of bank interests in the Internet? The first major reason
is because of the improved security and encryption methods developed on the Internet. The second
reason is that banks did not want to lose a potential market share to banks that were quick to offer
their services on the Internet.

Many of the banks like ICICI, HDFC, IndusInd, IDBI, Citibank, Global Trust Bank (GTB), Bank
of Punjab and State bank of India (SBI) were offering E-banking services. The analysts 'comments
that India had a high growth potential for e-banking the players focused on increasing and
improving their E-banking services. As a part of this, the banks began to collaborate with functions
online. Why is there a sudden increase of bank interests in the Internet? The first major reason is
because of the improved security and encryption methods developed on the Internet. The second
reason is that banks did not want to lose a potential market share to banks that were quick to offer
their services on the Internet.

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E-banking is defined as the automated delivery of new and traditional banking products and
services directly to customers through electronic, interactive communication channels. E- banking
includes the systems that enable financial institution customers. Individuals or businesses, to
access accounts, transact business, or obtain information on financial products and services
through a public or private network including the Internet, Customer's access e-banking services
using an intelligent electronic device.

The E-banking was firstly introduced in India by the ICICI around 1996. There after many
other banks like HDFC, SBI, IDBI, Citibank Trust Banks, UTI, etc. followed the service. As today
private and foreign bank had started capturing the market through e-banking hence ―the
competition is heating up and the lack of technology can make a bank loose a customer‖ so
now the public banks are breaking the shackles of traditional set-up and gearing up to face the
competition posed by the private sector counterparts.

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E-BANKING

Electronic banking in simple terms means, it does not involve any physical exchange of money,
but it’s all done electronically, from one account to another, using the Internet. Internet banking is
just like normal banking, with one big exception. You don’t have to go to the bank for transactions.
Instead, you can access your account any time and from any time and from any part of the world,
and do so when you have the time, and not when the bank is open. For busy executives, students,
and homemakers, e-banking is virtual blessing. No more talking precious time off from work to
get a demand draft made or a cheque book issued.

Banks offer Internet banking in tow main ways. An existing bank with physical offices can
establish a Web site and offer Internet banking to its customers in addition to its traditional delivery
channels. A second alternative is to establish a “virtual,” “branchless,” or “Internet - only” bank.
The computer server that lies at the heart of a virtual bank may be housed in an office that serves
as the legal address of such a bank, or at some other location. Virtual banks may offer their
customers the ability to make deposits and withdraw fund via automated teller machines (ATMs)
or other remote delivery channels owned by other institutions.

Online system allows customers to plug into a host of banking services from a personal computer
by connecting with the bank’s computers over telephone wires the convenience can be compelling.
Not only is travel time but ATM machines, telephone banking or banking by mail are often
unnecessary. And, technology continues to make online banking once attempted only by computer
enthusiasts, easier for the average consumer. Banks use a variety of names for online banking
services, such as PC banking, home banking electronic banking or Internet banking. Can one
imagine life without paper cash? Money has always been part of human emotions. And although
it is difficult to imagine that all those years of savings at the bank is now just a whole bunch of bits
and bytes, it is becoming a reality and the sooner people adjust to it, the better it is.

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 → EVOLUTION OF E-BANKING

The story of technology in banking started with the use of punched card machines like accounting
machines or ledger posting machines. The use of technology, at that time, was limited to keeping
books of the bank. If further developed with the birth of online real time system and vast
improvement in telecommunications during late 1970’s and 1980’s it a resulted in a revolution in
the field of banking with “convenience banking” as a buzzword. Through convenience banking,
the bank is carried to the doorstep of the customer. The 1990’s saw the birth of distributed
computing technologies and Relational Data Base Management System. The banking industry was
simply waiting for these technologies. Now with distribution technologies, one could configure
dedicated machines called front-end machines for customer service and risk control while
communication in the batch mode without hampering the response time on the front- end machine.

E-BANKING SUPPORT SERVICES WEBLINKING A large number of financial

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

Through convenience banking, the bank is carried to the doorstep of the customer. The 1990’s saw
the birth of distributed computing technologies and Relational Data Base Management System.
The banking industry was simply waiting for these technologies. Now with distribution
technologies, one could configure dedicated machines called front-end machines for customer
service and risk control while communication in the batch mode without hampering the response
time on the front- end machine.

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 PRE E-BANKING SCENARIO IN INDIA

Traditional Banking Traditionally the relationship between the bank and its customer has been
on a one-to-one level via the branch network. This was put into operation with clearing and
decision-making responsibility for the overall clearing network, the size of the branch network and
the training of staff in the branch network. The bank monitored the organization’s performance
and set the decision-making parameters, but the information available to both branch staff and
their customers was limited to one geographical location. Traditional Banking structure On IT
Adoption the Indian banking sector woke up to the world of technology in early 1990’s. The
banking sector in India has been dominated by public sector banks, who hold between them more
than 80% of total asset base.

New private sector banks and foreign banks have tended to concentrate their efforts more on the
top 23 centers which house the cream of the country’s urban customers. These banks have taken
the which house the cream of the country’s urban customers. These banks have taken the lead in
technology adoption and have succeeded in building up a substantial base of technology savvy,
high-end customer Making and observation about the adoption of technology by the bank, P.C.
Narayan, vice-president (IT and retail banking) of Global Trust Bank Ltd, says. “The rate of
adoption of IT by foreign and private sector banks in country has been significant over the Internet
phenomenon worldwide. A number of banks in the public sector have also accelerated the pace of
IT deployment largely because of the competitive pressure brought upon them by private sector
banks and foreign banks’’. Though in the beginning the employees resisted computerization
(especially in nationalized banks), the management finally succeeded in convincing its employees
about the benefit and need for adoption of technology. Says P. Seshadri Rao, a financial consultant
based in Hyderabad, “The basic reason for getting the nod for computerization was the competition
from private banks.

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In sharp contrast, most of the private banks like GTB, HDFC, and ICICI started their operations
with the use of technology. And with these new banks wooing the customers by offering what was
till then an unknown phenomenon-customer service-the nationalized banks were forced to take
remedial steps. “The compulsion for private banks to adopt a very high level of IT was driven by
their desire to contain their operating cost at the lowest levels and at the same time be able to offer
a wide variety of product and services in quickset possible time.” Observes Narayan. Commenting
on the reasons for public sector banks being laggards in the adoption of technology, State Bank of
Mysore managing director sitarama Murty says: “The private banks started with a clean slate. They
hired technology savvy people. On the other hand, public sector banks didn’t have those
advantages. We need to follow the public sector bank’s rules and regulation while hiring people.
We can’t appoint computer professional in the top management directly.” Computerization of the
branches, especially in semi-urban and rural areas, is still a far cry for public sector banks. “This
calls for huge investments and retraining of staff. I think these factor are inhibiting most of the
banks to take technology to rural areas.

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 • SYSTEM ANALYSIS

System analysis is a process of gathering and interpreting facts, diagnosing problems and the
information to recommend improvements on the system. It is a problem solving activity that
requires intensive communication between the system users and system developers. System
analysis or study is an important phase of any system development process. The system is studied
to the minutest detail and analyzed. The system analyst plays the role of the interrogator and dwells
deep into the working of the present system. The system is viewed as a whole and the input to the
system are identified. The outputs from the organizations are traced to the various processes.
System analysis is concerned with becoming aware of the problem, identifying the relevant and
decisional variables, analyzing and synthesizing the various factors and determining an optimal or
at least a satisfactory solution or program of action. A detailed study of the process must be made
by various techniques like interviews, questionnaires etc. The data collected by these sources must
be scrutinized to arrive to a conclusion.

SYSTEM REQUIREMENT SPECIFICATION OVERVIEW

The chances and threats that the internet symbolizes is no longer news to the present day banking
sector. No traditional bank would dare face investment analysts without an Internet strategy.
Moreover, business success is not guaranteed by a detailed and thoughtful approach to the internet.
The main intention behind the commencement of electronic banking services is to provide the
customers with an alternative that is more responsive and with less expensive options. With options
just a click away, customers have more control than ever. Their expectations are usability and real-
time answers. They also want personal attention and highly customized products and services. This
research intends to see how electronic banking has improved the efficiency and effectiveness in
the bank, take a look at the security measures on ground and also prefer a solution that can eradicate
fraud in electronic banking.

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 • BACKGROUND OF E-BANKING
For this booklet, e-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive communication
channels. E-banking includes the systems that enable financial institution customers, individuals
or businesses, to access accounts, transact business, or obtain information on financial products
and services through a public or private network, including t et he Intern.

Customers access e-banking services using an intelligent electronic device, such as a personal
computer (PC), personal digital assistant (PDA), automated teller machine (ATM), kiosk, or Touch
Tone telephone. While the risks and controls are similar for the various e-banking access channels,
this booklet focuses specifically on Internet-based services due to the Internet’s widely accessible
public network. Accordingly, this booklet begins with a discussion of the two primary types of
Internet websites: informational and transactional.

OBJECTIVES OF THE STUDY PRIMARY OBJECTIVE

To study customer awareness about the Internet Banking services provided by Dena bank with
special reference to T.Nagar branch. SECONDARY OBJECTIVES: To analyze customer
satisfaction level in the internet banking services To know the reason for preferring internet
banking service in Dena bank To know the customers perception about the internet banking
services.Limitation of Study Banks are not giving me all information about E-banking services.
They do not permit to meet any of the employees in their bank. E-banking promotes lack of
socialising/social contacts Hackers may intercept data and defraud customers Phone bills can
increase Customers will be more vulnerable to phishing Customers are compelled to have
computers at home, Internet access and computers skills Easier for customers to mismanage their
accounts due to the 24-hour service that will be available

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 NEEDS OF E-BANKING

1) To know the customers perception toward the E-banking service.

2) Organizing Educational Campaign to Create Goodwill of Company.
3) Services It Effectively valuable to Create Place in the Minds of Customer.
4) Availability should be increased by using various services Strategy.
5) Company should make service equal to or better than Competitive Brands by
All Means

Popular services under e-banking in India

ATMs (Automated Teller Machines)

Telephone Banking

Electronic Clearing Cards

Smart Cards

EFT (Electronic Funds Transfer) System

ECS (Electronic Clearing Services)

Mobile Banking

Internet Banking

Telebanking

Door-step Banking

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 ❖ OBJECTIVES OF E-BANKING

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

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

III) The third level of Internet banking service are offered by Fully Transactional Web sites
which allow the customers to operate on their accounts for transfer of funds, payment of
different bills, subscribing to other products of the bank and to transact purchase and sale
of securities, etc.

IV) The above forms of Internet banking service the customer or by new banks, who deliver
banking service primarily through Internet or other electronic delivery channels as the
value-added services. Some of these banks are known as ‘Virtual’ banks or ‘Internet only’
banks and may not have physical presence in a country despite offering different banking
services.

V) one of the important objectives of e-banking is to attract customers. E-banking is helping

the customers by providing online services. it is attracting the customers and making the
banking system easier.

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 ❖ METHEOLOGY OF E-BANKING

• Branch

The traditional way of banking is to process all your transactions at your local branch. This service
is available from all high-street banks and also some smaller banks (through arrangements with a
high street bank to use their counter). Plans by the high-street banks to close branches have
generally been abandoned, so you still have a good choice of who to bank with if you want a
branch account.

• Internet

Online bank accounts are becoming increasingly popular as banks improve the service and its
availability. All the high street banks offer this service, as well as some of the former building
societies and smaller banks. The advantages are clear.

With internet banking you can access your account, check your balance and make transactions
24 hours a day, seven days a week – all from the comfort of your own home or office. You need
a reasonable internet connection to take advantage of the service. Also see whether there is a
setup fee or monthly charge for having an internet account.

• Telephone

Nearly all banks now offer telephone banking, which allows customers to call up, check account
details and make transactions over the phone. The service is particularly good for those who work
long hours, since it is usually available outside normal branch opening hours and may even offer
a limited, 24-hour service. Access to telephone banking is normally free and calls are usually
charged at local rates. CGB’s telephone banking provides you with automatic voice service 24
hours a day; as long as you dial the phone No. 400-8308003 and input correct information
according to the voice prompts, you can get quick financial services.

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