CHAPTER-I

INTRODUCTION

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 COMPANY PROFILE

The dawn of twentieth century witnesses the birth of a banking enterprise par excellence-
UNION BANK OF INDIA- that was flagged off by none other than the Father of the
Nation, Mahatma Gandhi. Since that the golden moment, Union Bank of India has this far
unflinchingly traveled the arduous road to successful banking. A journey that spans 88 years.
The Union Bank of India, reiterates the objective of their inception to the profound thoughts
of the great Mahatma. "We should have the ability to carry on a big bank, to manage
efficiently crores of rupees in the course of our national activities. Though we have not
many banks amongst us, it does not follow that we are not capable of efficiently
managing crores and tens of crores of rupees."

Union Bank of India is firmly committed to consolidating and maintaining its identity as a
leading, innovative commercial Bank, with a proactive approach to the changing needs of the
society. This has resulted in a wide gamut of products and services, made available to its
valuable clientele in catering to the smallest of their needs. Today, with its efficient, value-
added services, sustained growth, consistent profitability and development of new
technologies, Union Bank has ensured complete customer delight, living up to its image of,
“GOOD PEOPLE TO BANK WITH”. Anticipative banking- the ability to gauge the
customer's needs well ahead of real-time - forms the vital ingredient in value-based services
to effectively reduce the gap between expectations and deliverables.

The key to the success of any organization lives with its people. No wonder, Union Bank's
unique family of about 26,000 qualified / skilled employees is and ever will be dedicated and
delighted to serve the discerning customer with professionalism and wholeheartedness.

Union Bank is a Public Sector Unit with 55.43% Share Capital held by the Government of
India. The Bank came out with its Initial Public Offer (IPO) in August 20, 2002 and Follow
on Public Offer in February 2006. Presently 44.57 % of Share Capital is presently held by
institutions.

Over the years, the Bank has earned the reputation of being a techno-savvy and is a front
runner among public sector banks in modern-day banking trends. It is one of the pioneer
public sector banks, which launched Core Banking Solution in 2002.

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The Bank will ever strive in its Endeavour to provide services to its customer and enhance its
businesses thereby fulfilling its vision of becoming “THE BANK OF FIRST CHOICE IN
OUR CHOSEN AREA BY BUILDING BENEFICIAL AND LASTING
RELATIONSHIP WITH CUSTOMERS THROUGH A PROCESS OF CONTINUOUS
IMPROVEMENT”.

The Vision Statement

To become the bank of first choice in our chosen area by building beneficial and lasting
relationship with the customers through a process of continuous process.

The Mission Statement

 A logical extension of the Vision Statement is the Mission of the Bank,which is to

gain market recognition in the chosen areas.

 To build a sizeable market share in each of the chosen areas of business through
effective strategies in terms of pricing, product packaging and promoting the product
in the market.

 To facilitate a process of restructuring of branches to support a greater efficiency in

the retail banking field.

 To sustain the mission objective through harnessing technology driven banking and
delivery channels.

 To promote confidence and commitment among the staff members, to address the
expectations of the customers efficiently and handle technology banking with ease.

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 BOARD OF DIRECTORS

Chairman & Part-Time Non-Official

Shri. Kewal Handa
Director

Shri. Rajkiran Rai G.

Managing Director & CEO

Shri. Raj Kamal Verma

Executive Director

Government Nominee Director Shri. Madnesh Kumar Mishra

RBI Nominee Director Shri. Anil Kumar Misra

Shri Rajiv Kumar Singh

Chartered Accountant Director

Part Time Non-Official Director Dr. K. Ramesha

Part Time Non-Official Director Dr. Madhura Swaminathan

Dr. Uttam Kumar Sarkar

Shareholder Director

Shareholder Director Shri K. Kadiresan

Shareholder Director Shri Jayadev M

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HISTORY
Union Bank of India (Union Bank) was registered on 11 November 1919 as a limited
company in Mumbai and was inaugurated by Mahatma Gandhi. At the time of India's
Independence in 1947, Union Bank of India had only four branches - three in Mumbai and
one in Saurashtra, all concentrated in key trade centres. After Independence, the growth is
accelerated and by the time the Indian government nationalized it in 1969, it had 240
branches. Shortly after nationalisation, Union Bank of India acquired Belgaum Bank, a
private sector bank established in 1930 that had itself merged in a bank in 1964, the Shri
Jadeya Shankarling Bank (Bijapur; incorporated on 10 May 1948). Then in 1985 Union Bank
of India acquired Miraj State Bank, which was established in 1929, and which had 26
branches. In 1999 the Reserve Bank of India requested that Union Bank acquire Sikkim
Bank in a rescue after extensive irregularities had been discovered at the non-scheduled
bank.

Union Bank began its international expansion in 2007 with the opening of representative
offices in Abu Dhabi, United Arab Emirates, and Shanghai in the People's Republic of China.
The next year, Union Bank established a branch in Hong Kong, its first branch outside India.
In 2009, Union Bank opened a representative office in Sydney, Australia.

At present, the offshore banking operations of Union Bank of India are led by its branches in
Hong Kong and newly opened branch in Dubai at Dubai International Financial Centre.

BRANCHES: UNION BANK OF INDIA has a network of over 630 branches (of which 51
are extension counters) across the country. The network puts a wide range of banking
products and financial services within easy reach of retail and corporate customers.

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 E-Banking

Electronic banking, also known as electronic funds transfer (EFT), is simply the use of
electronic means to transfer funds directly from one account to another, rather than by cheque
or cash. You can use electronic funds transfer to:

 Withdraw money from your checking account from an ATM machine with a personal
identification number (PIN), at your convenience, day or night.

 Instruct your bank or credit union to automatically pay certain monthly bills from
your account, such as your auto loan or your mortgage payment.

 Have the bank or credit union transfer funds each month from your checking account
to your mutual fund account.

 Buy groceries, gasoline and other purchases at the point-of-sale, using a check card
rather than cash, credit or a personal check.

 Use a smart card with a prepaid amount of money embedded in it for use instead of
cash at a pay phone, expressway road toll, or on college campuses at the library's
photocopy machine or bookstores.

 Use your computer and personal finance software to coordinate your total personal
financial management process, integrating data and activities related to your income,
spending, saving, investing, recordkeeping, bill-paying and taxes, along with basic
financial analysis and decision making.

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VARIOUS FORMS OF E-BANKING:

A. INTERNET BANKING:

Internet Banking lets you handle many banking transactions via your personal computer. For
instance, you may use your computer to view your account balance, request transfers between
accounts, and pay bills electronically.
Internet banking system and method in which a personal computer is connected by a network
service provider directly to a host computer system of a bank such that customer service
requests can be processed automatically without need for intervention by customer service
representatives. The system is capable of distinguishing between those customer service
requests which are capable of automated fulfillment and those requests which require
handling by a customer service representative. The system is integrated with the host
computer system of the bank so that the remote banking customer can access other automated
services of the bank.

B. AUTOMATED TELLER MACHINES (ATM):

An automated teller machine or automatic teller machine (ATM) is an electronic

computerized telecommunications device that allows a financial institution's customers to
directly use a secure method of communication to access their bank accounts, order or make
cash withdrawals and check their account balances without the need for a human bank teller.
Many ATMs also allow people to deposit cash or cheques, transfer money between their bank
accounts, top up their mobile phones' pre-paid accounts or even buy postage stamps.
On most modern ATMs, the customer identifies him or herself by inserting a plastic card with
a magnetic stripe or a plastic smartcard with a chip, which contains his or her account
number. The customer then verifies their identity by entering a pass code, often referred to as
a PIN (Personal Identification Number) of four or more digits. Upon successful entry of the
PIN, the customer may perform a transaction.
The Indian market today has approximately more than 17,000 ATM’s.

C. CREDIT CARDS/ DEBIT CARDS:

The Credit Card holder is empowered to spend wherever and whenever he wants with his
Credit Card within the limits fixed by his bank. Credit Card is a post paid card. Debit Card,
on the other hand, is a prepaid card with some stored value. Every time a person uses this

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card, the Internet Banking house gets money transferred to its account from the bank of the
buyer. The buyers account is debited with the exact amount of purchases.
An individual has to open an account with the issuing bank which gives debit card with a
Personal Identification Number (PIN). When he makes a purchase, he enters his PIN on
shops PIN pad. When the card is slurped through the electronic terminal, it dials the acquiring
bank system - either Master Card or VISA that validates the PIN and finds out from the
issuing bank whether to accept or decline the transactions. The customer can never overspend
because the system rejects any transaction which exceeds the balance in his account.

D. TELE BANKING:

Undertaking a host of banking related services including financial transactions from the
convenience of customers chosen place anywhere across the GLOBE and any time of date
and night has now been made possible by introducing on-line Telebanking services. By
dialing the given Telebanking number through a landline or a mobile from anywhere, the
customer can access his account and by following the user-friendly menu, entire banking can
be done through Interactive Voice Response (IVR) system. With sufficient numbers of
hunting lines made available, customer call will hardly fail. The system is bi-lingual and has
following facilities offered

• Balance inquiry and transaction inquiry in all

• Inquiry of all term deposit account
• Statement of account by Fax, e-mail or ordinary mail.
• Cheque book request
• Stop payment which is on-line and instantaneous
• Transfer of funds with CBS which is automatic and instantaneous
• Utility Bill Payments
• Renewal of term deposit which is automatic and instantaneous

E.SMART CARD:

Banks are adding chips to their current magnetic stripe cards to enhance security and offer
new service, called Smart Cards. Smart Cards allow thousands of times of information
storable on magnetic stripe cards. In addition, these cards are highly secure, more reliable and
perform multiple functions. They hold a large amount of personal information, from medical
and health history to personal banking and personal preferences

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 E. E-CHEQUE:

 An e-Cheque is the electronic version or representation of paper cheque.

 It can now be used in place of paper cheques to do any and all remote transactions.
 An E-cheque work the same way a cheque does, the cheque writer "writes" the e-
Cheque using one of many types of electronic devices and "gives" the e-Cheque to the
payee electronically. The payee "deposits" the Electronic Cheque receives credit, and
the payee's bank "clears" the e-Cheque to the paying bank. The paying bank validates
the e-Cheque and then "charges" the check writer's account for the check

F. MOBILE BANKING :

Mobile banking is a term used for performing balance checks, account transactions,
payments, credit applications and other banking transactions through a mobile device such as
a mobile or Personal Digital Assistant . The earliest mobile banking services were offered
over SMS. With the introduction of the first primitive smart phones with WAP support
enabling the use of the mobile web in 1999, the first European banks started to offer mobile
banking on this platform to their customers.

We Can Avail The Following Services Through E-Banking:

Bill Payment Service

You can facilitate payment of electricity and telephone bills, mobile phone, credit card and
insurance premium bills as each bank has tie-ups with various utility companies, service
providers and insurance companies, across the country. To pay your bills, all you need to do
is complete a simple one-time registration for each biller. You can also set up standing
instructions online to pay your recurring bills, automatically. Generally, the bank does not
charge customers for online bill payment.

Fund Transfer

You can transfer any amount from one account to another of the same or any another bank.
Customers can send money anywhere in India. Once you login to your account, you need to

9
mention the payees's account number, his bank and the branch. The transfer will take place in
a day or so, whereas in a traditional method, it takes about three working days

Credit Card Customers

With Internet banking, customers can not only pay their credit card bills online but also get a
loan on their cards. If you lose your credit card, you can report lost card online.

Investing Through Internet Banking

Now investors with interlinked demat account and bank account can easily trade in the stock
market and the amount will be automatically debited from their respective bank accounts and
the shares will be credited in their demat account. Moreover, some banks even give you the
facility to purchase mutual funds directly from the online banking system.

Recharging Your Prepaid Phone

Now just top-up your prepaid mobile cards by logging in to Internet banking. By just
selecting your operator's name, entering your mobile number and the amount for recharge,
your phone is again back in action within few minutes.

Shopping

With a range of all kind of products, you can shop online and the payment is also
made conveniently through your account. You can also buy railway and air tickets through
Internet banking.

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Advantage Of Internet Banking

As per the Internet and Mobile Association of India's report on online banking 2006, "There
are many advantages of online banking. It is convenient, it isn't bound by operational timings,
there are no geographical barriers and the services can be offered at a very low cost."

Through Internet banking, you can check your transactions at any time of the day, and as
many times as you want to. Where in a traditional method, you get quarterly statements from
the bank. If the fund transfer has to be made outstation, where the bank does not have a
branch, the bank would demand outstation charges. Whereas with the help of online banking,
it will be absolutely free for you.

Security Precautions

Customers should never share personal information like PIN numbers, passwords etc with
anyone, including employees of the bank. It is important that documents that contain
confidential information are safeguarded. PIN or password mailers should not be stored, the
PIN and/or passwords should be changed immediately and memorised before destroying the
mailers.

Customers are advised not to provide sensitive account-related information over unsecured
e-mails or over the phone. Take simple precautions like changing the ATM PIN and online
login and transaction passwords on a regular basis. Also ensure that the logged in session is
properly signed out.

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Plastic Cards as Media for Payment:-
There are four types of plastic cards being used as media for making payments. These are:

1. Credit Card
2. Debit Card
3. Smart Card
4. ATM Card

1. Credit Cards: -
The Credit Card is a post paid card. The credit card enables the cardholders to: Purchase any
item like clothes, jewellery, railway/air tickets, etc. Pay bills for dining in a restaurant or
boarding.

2. Debit Cards: -
A Debit Card, on the other hand, is a prepaid card with some stored value. Every time a
person uses this card, the Internet Banking house gets money transferred to its account from
the bank of the buyer. The buyers account is debited with the exact amount of purchases.

3. Smart Cards: -
Smart Cards have a built-in microcomputer chip, which can be used for storing and
processing information. For example, a person can have a smart card from a bank with the
specified amount stored electronically on it. The specified amount is utilized by the customer,
he can approach the bank to get his card validated for a further specified amount. Such cards
are used for paying small amounts like telephone calls, petrol bills etc.

4. ATM Cards: -
The card contains a PIN (Personal Identification Number) which is selected by the customer
or conveyed to the customer and enables him to withdraw cash up to the transaction limit for
the day. He can also deposit cash or cheque.

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Role Of Customer When Using E-Banking

 You can access Internet Banking only by using your User ID and Password. During
the first login attempt, it is mandatory to change both passwords - login and
transaction – which would have been mailed to you by the bank.
 If you forget your password, you will have written to us using the "Email Us" option.
The Bank will then issue a new password and send it to your mailing address as per
our records. Kindly check with your branch that this address is updated...
 Make sure no one can see the account login name or password you are entering when
you log on to UNION BANK OF INDIA WEBSITE.
 Logout of UNION BANK OF INDIA WEBSITE before moving on to other
Websites.
 Before leaving the PC please "close" the browser.
 Do not write your UNION BANK OF INDIA WEBSITE login name or password
anywhere.
 Do not leave your login name and password such that someone sitting at your
computer could see them.
 Never present your UNION BANK OF INDIA WEBSITE login name and password
to anyone (no representative of UNION BANK OF INDIA will ever ask you for your
UNION BANK OF INDIA WEBSITE password).
 Notify UNION Bank immediately if you notice any unusual account activity.
 Keep all documents that include your account information in a secure location.
 When you login you can view the date and time of your last log in.

MOBILE BANKING SERVICES

Mobile banking can offer services such as the following:

Account Information :

1. Mini-statements and checking of account history

2. Alerts on account activity or passing of set thresholds
3. Monitoring of term deposits
4. Access to loan statements
5. Access to card statements

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6. Mutual funds / equity statements
7. Insurance policy management
8. Pension plan management
9. Status on cheque, stop payment on cheque
10. Ordering check books
11. Balance checking in the account
12. Recent transactions
13. Due date of payment (functionality for stop, change and deleting of payments)
14. PIN provision, Change of PIN and reminder over the Internet
15. Blocking of (lost, stolen) cards

Payments, Deposits, Withdrawals, and Transfers

1. Domestic and international fund transfers
2. Micro-payment handling
3. Mobile recharging
4. Commercial payment processing
5. Bill payment processing
6. Peer to Peer payments
7.Withdrawal at banking agent
8. Deposit at banking agent

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TECHNOLOGIES ENABLING MOBILE BANKING
Technically speaking most of these services can be deployed using more than one channel.
Presently, Mobile Banking is being deployed using mobile applications developed on one of
the following four channels.

1. IVR (Interactive Voice Response)

2. SMS (Short Messaging Service)
3. WAP (Wireless Access Protocol)

1.IVR (Interactive Voice Response)

IVR or Interactive Voice Response service operates through pre-specified numbers that banks
advertise to their customers. Customer's make a call at the IVR number and are usually
greeted by a stored electronic message followed by a menu of different options. Customers
can choose options by pressing the corresponding number in their keypads, and are then read
out the corresponding information, mostly using a text to speech program.
Mobile banking based on IVR has some major limitations that they can be used only for
Enquiry based services. Also, IVR is more expensive as compared to other channels as it
involves making a voice call which is generally more expensive than sending an SMS or
making data transfer (as in WAP or Standalone clients).

2. SMS (Short Messaging Service)

SMS uses the popular text-messaging standard to enable mobile application based banking.
The way this works is that the customer requests for information by sending an SMS
containing a service command to a prespecified number. The bank responds with a reply
SMS containing the specific information.

For example, customers of the HDFC Bank in India can get their account balance details by
sending the keyword ‘HDFCBAL' and receive their balance information again by SMS. Most
of the services rolled out by major banks using SMS have been limited to the Enquiry based
ones.

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However there have been few instances where even transaction-based services have been
made available to customer using SMS. For instance, customers of the Bank of Punjab can
make fund transfer by sending the SMS ‘ TRN(A/c No)(PIN No)(Amount)'.

One of the major reasons that transaction based services have not taken of on SMS is because
of concerns about security and because SMS doesn't enable the banks to deliver a custom
user interface to make it convenient for customers to access more complex services such as
transactions.

3. WAP (Wireless Access Protocol)

WAP uses a concept similar to that used in Internet banking. Banks maintain WAP sites
which customer's access using a WAP compatible browser on their mobile phones. WAP
sites offer the familiar form based interface and can also implement security quite effectively.
Bank of America offers a WAP based service channel to its customers in Hong Kong. The
banks customers can now have an anytime, anywhere access to a secure reliable service that
allows them to access all enquiry and transaction based services and also more complex
transaction like trade in securities through their phone.

A WAP based service requires hosting a WAP gateway. Mobile Application users access the
bank's site through the WAP gateway to carry out transactions, much like internet users
access a web portal for accessing the banks services.

ADVANTAGES OF MOBILE BANKING

The biggest advantage that mobile banking offers to banks is that it drastically cuts down the
costs of providing service to the customers. For example an average teller or phone
transaction costs about $2.36 each, whereas an electronic transaction costs only about $0.10
each. Additionally, this new channel gives the bank ability to cross-sell up-sell their other
complex banking products and services such as vehicle loans, credit cards etc.

For service providers, Mobile banking offers the next surest way to achieve growth.
Countries like Korea where mobile penetration is nearing saturation, mobile banking is
helping service providers increase revenues from the now static subscriber base. Also service

16
providers are increasingly using the complexity of their supported mobile banking services to
attract new customers and retain old ones.

1. User experience of browsing the internet from a mobile device is familiar and offers a rich
UI experience.
2. Allows end user to access corporate association.
3. Secure connection can be established on most of the mobile browsers.

DISADVANTAGES OF MOBILE BANKING

 Many non-standards variables including handsets,browsers and operating system.

 Inconsistent user experience due to varying connection speed and different handset.
 User needs to have a data plan,which may be a barrier to adoption among price
sensetive demographics.
 No “offline” (out of the coverage) capability.

CHALLENGES FOR MOBILE BANKING

Key challenges in developing a sophisticated mobile banking application are :

Handset Operability

There are a large number of different mobile phone devices and it is a big challenge for banks

to offer mobile banking solution on any type of device. Some of these devices support J2ME

and others support WAP browser or only SMS.

Initial interoperability issues however have been localized, with countries like India using

portals like R-World to enable the limitations of low end java based phones, while focus on

areas such as South Africa have defaulted to the USSD as a basis of communication

achievable with any phone.

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Security

Security of financial transactions, being executed from some remote location and

transmission of financial information over the air, are the most complicated challenges that

need to be addressed jointly by mobile application developers, wireless network service

providers and the banks' IT departments. The following aspects need to be addressed to offer

a secure infrastructure for financial transaction over wireless network :

 Physical part of the hand-held device. If the bank is offering smart-card based

security, the physical security of the device is more important.

 Security of any thick-client application running on the device. In case the device is

stolen, the hacker should require at least an ID/Password to access the application.

 Authentication of the device with service provider before initiating a transaction. This

would ensure that unauthorized devices are not connected to perform financial

transactions.

 User ID / Password authentication of bank’s customer.

 Encryption of the data being transmitted over the air.

 Encryption of the data that will be stored in device for later / off-line analysis by the

customer.

Application Distribution

Due to the nature of the connectivity between bank and its customers, it would be impractical

to expect customers to regularly visit banks or connect to a web site for regular upgrade of

their mobile banking application. It will be expected that the mobile application itself check

the upgrades and updates and download necessary patches (so called "Over The Air"

updates). However, there could be many issues to implement this approach such as upgrade /

synchronization of other dependent components.

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Personalization

It would be expected from the mobile application to support personalization such as :

1. Preferred Language

2. Date / Time format

3. Amount format

4. Default transactions

5. Standard Beneficiary list

6. Alerts

Features of Mobile Commerce

1.Ubiquity & Immediancy: Ubiquity means that the user can avail of services and carry out

transactions largely independent of his current geographic location (the “anywhere” feature).

Closely related to the feature of ubiquity is the possibility of real-time availment of services

(the “anytime” feature).

2.Instant connectivity: Ever since the introduction of the General Packet Radio Service

(GPRS) mobile devices are constantly “online”, i.e. in touch with the network (the “always-

on” feature). This feature brings convenience to the user, as time consuming dialup or boot

processes are not necessary.

3.Simple authentication procedure: Mobile devices function with an electronic chip called

Subscriber Identity Module (SIM). The SIM is registered with the network operator and the

owner is thus unambiguously identifiable. The clear identification of the user in combination

with an individual Personal Identification Number (PIN) makes any further time-consuming,

complicated and potentially inefficient authentication process redundant.

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Reason for Mobile Banking Apps Having Low User Proportion

There is definitely no dearth of mobile apps made available for banking; every major bank
and other financial institutions carries out its brand promotion by releasing newer and better
banking apps for mobile users. These are also relatively user-friendly and easy to operate. Yet
the Federal Reserve reports that only 21 percent of mobile phone owners have used a mobile
app for their regular banking requirements over the last year. This is a shockingly low
percentage, considering the immense value that these users are missing out on.

So Why Are People Shying Away from Mobile Banking Apps?

People are afraid of security risks that could compromise their privacy and cause theft of
confidential financial data. They are not prepared to put their hard-earned savings on the line.
A Google study has revealed that this fear stems from users not having sufficient knowledge
about the security aspects of mobile banking apps. While these remain misunderstood, users
prefer to keep their distance from a technology that can only benefit them.

What Can Banks Do to Solve the Problem?

Users would love the convenience of accessing their bank accounts from their mobile devices
wherever they may be. All they need is the assurance that their mobile apps are as secure as
traditional ATM transactions or face-to-face interactions with a bank teller within a brick and
mortar building. In fact, they are even willing to access their bank accounts over the Internet
using a personal computer or laptop. Little do they realize the irony; mobile banking ranks
higher in security than browser-based banking because the banks have more control over
customer interactions with the former. Banking professionals are trying to encourage a more
widespread use of mobile banking apps by spreading security awareness and addressing
these unfounded fears.

1.Security Features for Accessing Mobile Banking Apps:

Mobile banking involves a direct connectivity link being set up between the user’s handheld
device and the bank, which is independent of third-party applications or additional browsers.
Every mobile banking app is custom-built for a specific bank; that allows each bank or
financial institution to provide a secure SSL (Secure Socket Layer) encrypted connection to
give their customers access through their mobile device. Moreover, this is almost always
backed up by two-factor authentication to achieve advanced levels of security for mobile
banking apps.
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2.Security Against Loss or Theft of Mobile Devices

Smartphones and tablets offer users the option of clearing or resetting the data stored on the
device from any remote location. Using this functionality, users who have lost their phone
can immediately delete all the data and apps loaded onto it by using any computer having
Internet connectivity to remotely access their mobile device. This makes it completely certain
that no one else can access the customer’s bank account using that phone, so the user need
not worry about their privacy being invaded or their money being stolen.

3.Spreading Confidence in Mobile Banking Apps:

For mobile banking apps to rise in popularity, the top goal of bank officials is to assure users
of all these security features that are built into them. As they build trust in this mode of
carrying out financial transactions, they will gradually start using them more often. And once
they realize the convenience that mobile banking apps offer, there will be no going back. This
will result in a win-win situation for both the banks and their customers.

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 CHAPTER-II
RESEARCH OBJECTIVES AND
METHODOLOGY

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What is Research?
Research is a careful and detailed study into a specific problem, concern, or issue
using the scientific method. It's the adult form of the science fair projects back in
elementary school, where you try and learn something by performing an experiment.
This is best accomplished by turning the issue into a question, with the intent of the
research to answer the question.

What is Research Methodology?

Research Methodology is the systematic, theoretical analysis of the methods applied

to a field of study. It comprises the theoretical analysis of the body of methods and
principles associated with a branch of knowledge.

What is Research Objective?

The objectives of a research project summarize what is to be achieved by the study. These
objectives should be closely related to the research problem.

The general objective of a study states what researchers expect to achieve by the study in
general terms. It is possible (and advisable) to break down a general objective into smaller,
logically connected parts. These are normally referred to as specific objectives. Specific
objectives should systematically address the various research questions. They should specify
what you will do in your study, where and for what purpose.

Research Methodology

The data collected from questionnaire will be tabulated and analyzed so that it can easily
understand to the user.
There are a number of ways to be used to present the result of findings are:-
o Pie-chart

o Graphs

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SAMPLING PLAN:
.

 Sampling Units: Different Account Holder from the bank.

 Sample Technique: Random Sampling.
 Research Instrument: Structured Questionnaire.
 Contact Method: Personal Interview.

SAMPLE SIZE:

My sample size for this project was 50 respondents.

OBJECTIVES OF STUDY

 Find the customer satisfaction relating to E-banking service.

 To study the awareness of internet banking among the customers of UNION BANK
OF INDIA.
 To analyze the current market potential for E- banking
 To compare between mobile banking and counter banking.
 To compare the viewpoint of different respondents depending on their
occupation about the mobile banking Facility

LIMITATIONS OF STUDY

 Limited to Lodhi Colony branch only.

 Customer are not aware about the Union Bank.
 Union Bank have very few ATM .
 Research is only done in Delhi.

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DATA COLLECTION INSTRUMENT

The mode of collection of data will be based on Primary as well as Secondary data.

Primary Data:
Primary data collection will base on personal interview of customers and people linked with
UNION BANK OF INDIA. I have prepared the questionnaire according to the necessity of
the data to be collected.

Secondary Data:
Collection of information from UNION BANK OF INDIA website and different various
websites related to E-BANKING.

25
 LITERATURE REVIEW

Internet and the Banking System

The rapid growth of the Web creates a tremendous opportunity for new businesses, but also
requires a new way of viewing the market place for the community banker. “Experts
estimates that consumer use of on-line banking services will increase over 20-fold by the end
of the century. Geography and the number of branches become irrelevant and community
banks are able to offer the same level of service and convenience to customers as the largest
banks. In the past, over 60% of existing bank customers have cited their bank selection to be
based on convenience of location. For the customers of today, convenience of location
includes the availability of 24-hour access via the Internet.” (Wilson, 1996)

Seitz and Stickel (1999) considered that financial service companies are using the Internet as
a new distribution channel. The goals are:

 Complex products may be offered in an equivalent quality with lower costs to more
potential customers.

 There may be contacts from each place of earth at any time of day and night
Seybold (1998) identifies 8 critical success factors for electronic banking:

1. Own the customer’s total experience

2. Streamline business processes that impact the customer
3. Provide a 360-degree view of customer relationship
4. Let customers help themselves
5. Help customers do their job
6. Deliver personalized service

Source: http://www.aurelvoiculescu.com/mba

26
 CHAPTER-III
DATA PROCESSING , ANALYSIS
&
INTERPRETATION

27
 Data analysis

1. GENDER

FIGURE.1

GENDER
FIGURE.1

34%

Males
Females

66%

INTERPRETATION:

About 66% of the respondents are males. This study found a predominance of males among
Internet users in DELHI.This indicates that the percentage of male Internet users is higher
than the female internet users

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2.RESPONDENTS AGE GROUP

FIGURE.2

AGE

4%
16%
17% FIGURE.2 18-25
26-35
36-45
46-60
34%
29% 60+

INTERPRETATION:
The respondents are relatively young, i.e.34% between 26 and 35 years old.This is a
consistent study, which found that most Internet users are youths (less than 18 years old:
16 %) and young adults. Respondents with post graduation were 42% followed by 22% of
graduate respondents and 29% with professional degrees. In terms of profession, service
forms the largest group with 44% respondents while students (28%) form the next largest
group.

29
3.QUALIFICATION

FIGURE.3

QUALIFICATION

7%
29% FIGURE.3
22%
12th
Graduate
Post Graduate
Professional
42%

INTERPRETATION:

The respondents are relatively young, i.e. 34% between 26 and 35 years old. This is a
consistent study, which found that most Internet users are youths (less than 18 years old: 16
%) and young adults. Respondents with post graduation were 42% followed by 22% of
graduate respondents and 29% with professional degrees. In terms of profession, service
forms the largest group with 44% respondents while students (28%) form the next largest
group.

30
4.USERS OF E-BANKING

TABLE.1

YES 65%

No 35%

FIGURE.4

70%

60%

50%

40%

30%

20%

10%

0%
Yes No

INTERPRETATION:

Currently 65 % of the bank customers availing the facility of E-Banking.

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4.Preference For Online Bill Payment Services

TABLE.2
Yes 60%

No 40%

FIGURE.5

BILL PAYMENT

NO

YES

INTERPRETATION:

Majority of the customers are now opt online bill payment. i.e. 60% of the bank customers
are now using online bill payment.

32
5.Preference For Online Shopping

TABLE.3
Yes 70%

No 30%

FIGURE.6

NO

YES

INTERPRETATION:

Similarly, 70% of the customers are now using online shopping that saves the precious time
of the customers.

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6.Preference For Online Fund Transfer

TABLE.4

Yes 35%

No 65%

FIGURE.7

70

60

50

40

30

20

10

0
YES NO

INTERPRETATION:

Only few customers are using the online fund transfer facility i.e. 35%.Due to security
reasons people are not indulging in online fund transfers.

34
7.Which Mode Of Banking Do You Prefer The The Most?

TABLE.5

Mobile Banking 25%

Counter Banking 75%

FIGURE.8

25% Mobile Banking

75% Counter
Banking

INTERPRETATION:

75% of the people prefer counter banking due to ease of access ,lack of knowledge and
security reasons.

35
7. Satisfied Customers

TABLE.6

Yes 65%

No 35%

FIGURE.9

70

60
FIGURE.9
50

40

30

20

10

0
YES NO

INTERPRETATION:

Most of the customer are satisfied with the E-Banking as they save their time and have found
full security for their transaction online.

36
 4. FINDINGS

1. In the users ratio of internet banking 65% of customers are using this service.
2. In these services the SBI bank is top in service of E-banking.
3. The services that are mostly used by maximum customers are transactions, online
trading, bill payment, shopping etc.
4. The mode of transaction that a customer used more oftenly is through cash, cheque &
e-banking respectively.
5. Different banks charge different rates for online service.

37
 5. SUGGESTIONS

1. Demonstration of E-Banking should be provided to the existing customers to promote

E-Banking.
2. Encourage customers that E-banking is totally safe if you take necessary precautions
like protect your password from others.
3. Provide discounts on shopping through E-Banking.

38
 6. CONCLUSION

The basic objective of my research was to analyze the awareness among customers for
internet banking in INDIA. It gives direction to research tools, research types and techniques.
Although the findings reveal that people know about the services but still many people are
unaware and many of them are non – users so the bank should by promotion try to aware the
customers about the benefits of E-Banking. Banks should look forward to have some tie – ups
with other financial institutions to increase the service base.

39
 BIBLIOGRAPHY

Collection of information for the research is taken from

Website :
Official Union Bank Website
www.unionbankofindia.co.in
And Other Websites Like :
www.google.com
www.economictimes.com
www.wikipedia.com
www.worldjute.com
http://www.aurelvoiculescu.com/mba

Newspaper :
Indian Express

40
 ANNEXURE

Questionnaire

I am a student of BBA TRINITY INSTITUTE OF PROFESSIONAL STUDIES

,INDRAPRASTHA UNIVERSITY I request you to fill up a short questionnaire regarding e-
banking services provided by the bank.The privacy will be maintained and the data will
strictly be used for educational purposes only.

1. Name:

2. Gender:
Male Female

3. Age Group:
 18-25
 26-35
 36-45
 46-60
 60+

4. Educational Qualification:
 12th
 Graduate
 Post Graduate
 Professional

5. Occupation:
 Student
 Service
 Business man
 Retired Individual
 Others please specify:

41
6. Do you use E- Banking services?
 Yes
 No

7. If the above option is No specify the reason.

 Never heard of internet banking
 Concerned about security
 Not available to my bank
 Not have enough knowledge
 Other:

8. What is the most important reason that you choose this particular bank?
 The brand name of the bank
 The excellent service offered by this bank
 Easy to access
 They provide security
 Other

9. How long have you been using the E-Banking services?

 Less than a month
 1 to 6 months
 6 to 12 months
 More than a year

10.Do you prefer online bill payments?

 Yes
 No

11. Do you prefer online shopping?

 Yes
 No

12. . Do you prefer online fund transfer?

 Yes
 No

42
13.Which mode of banking do you prefer the most?
 Mobile banking
 Counter banking

14.Are you satisfied with the using of E-banking?

 Yes
 No

43
44