“USAGE AND AWARENESS OF INTERNET BANK”

A Project Submitted to
University of Mumbai for partial completion of the degree of
Bachelor in Commerce (Accounting and Finance)
Under the Faculty of Commerce

By
MS. TANVI PRAFUL VAIDYA

Under the Guidance of

MR. MEHUL BARIA

Sadhana Education Society’s

L. S. RAHEJA COLLEGE OF ARTS AND COMMERCE,
Juhu Road, Santacruz (West), Mumbai-400054

MARCH, 2023

1
 CERTIFICATE

This is to certify that Ms. Tanvi Praful Vaidya has worked and duly completed her
Project Work for the degree of Bachelor in Commerce (Accounting and Finance)
under the Faculty of Commerce in the subject of BLACK BOOK and her project
is entitled, “USAGE AND AWARENESS OF INTERNET BANK” under my
supervision.
I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree or
Diploma of any University.

It is his own work and facts reported by her/his personal findings and
Investigations.

Name and Signature of

Guiding Teacher

Seal of the College

Date of Submission:

2
 DECLARATION BY LEARNER

I, the undersigned MS. TANVI PRAFUL VAIDYA hereby declare that

the work embodied in this project work titled, “USAGE AND
AWARENESS OF INTERNET BANK” forms from my own
contribution to the research work carried out under the guidance of MR.
MEHUL BARIA is a result of my own research work and has not been
submitted to any other University for any other Degree/Diploma to this
or to any other University.

Wherever reference has been made to previous work of others, it has been clearly
indicated as such and included in the bibliography.

I, hereby further declare that all the information of this document has been
obtained and presented in accordance with academic rules and ethical conduct.

Name and Signature of the learner

Certified By

Name and signature of Guiding Teacher

3
 ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being the idealistic channels and
fresh dimensions in completion of this project.

I take this opportunity to thank the University of Mumbai for giving me a chance to do
this
Project.

I would like to thank my Principal, Dr Debajit N. Sarkar for providing me the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator, Ms. Vaishali Pandya for her moral
support and guidance.

I would also like to express my sincere gratitude towards my Project guide, Ms. Mehul Baria
whose guidance and care made the project successful.

I would like to thank my College library, for having provided various reference 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 especially my Parents and Peers who supported me
throughout the project

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 INDEX

Chapter No Title Of Chapter Page No.

1 Introduction 1-48
1.1 Introduction 7
1.2 Concept of internet banking 8
1.3 History of internet banking 10
1.4 Features of internet banking 13
1.5 Difference between 14
traditional banking and online
1.6 banking Types of internet 17
1.7 banking 18
1.8 NEFT 20
1.9 RTGS 23
1.10 Imps 25
1.11 ECS 27
1.12 Atm 29
1.13 Credit card 30
1.14 Debit card 32
1.15 Digital wallet 34
1.16 Kiosk banking 37
1.17 Green channel 39
1.18 banking Tele 41
1.19 banking Types of 45
1.20 frauds 47
Security measures
No. of internet users as of
2019
2 Research 49-55
2.1 methodology Research 49
2.2 problem Objectives of 50
2.3 study Scope of study 51

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2.4 Significance of study 52
2.5 Hypothesis 53
2.6 Database and methodology 54
2.7 limitations 55
3 Literature review 56-60
4 Data analysis, interpretation 61-78
and presentation
4.1 Swot 61
4.2 analysis Case 62
4.3 study 64
Interpretation of data
5 Conclusions and suggestions 79-83
5.1 Findings 79
5.2 Suggestions/ recommendations 81
5.3 Conclusion 82
6 Bibliography 84-86
7 Appendix 87-90
7.1 Questionnaire 87

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 CHAPTER 1 :- INTRODUCTION

1.1 INTRODUCTION

Online banking, also known as internet banking or web banking, is an

electronic payment system that enables customers of a bank or other financial
institution to conduct a range of financial transactions through the financial
institution's website.

The following terms refer to online banking: electronic banking, virtual banking,
remote banking, phone banking. Electronic banking is an activity that is not new
to banks or customers. Banks having these services provided electronically for
years through software program. These software program allows the user’s
personal computer to dial up the bank directly.

Why there is a sudden increase of bank interests in the internet? The major reason
is because of increased security and encryption methods developed on the
internet.

An internet banking means any user with a personal computer and a browser can
get connected to his bank’s website to perform virtual banking functions. An
internet banking will offer customers just about every service that is traditionally
available through a local branch.

Internet banking is a web-based service that enables the bank’s authorized

customers to access their account information.Net banking has led to the
emergence of new banks, which operate only through the internet and do not
exists physically, such banks are called ‘VIRTUAL’ banks.

Through internet banking, basic transactions such as paying bills and transferring
bills and funds between accounts can easily be performed at time convenient to
customers. While working through internet banking you have the option of
calling customer care or emailing the bank directly, if any problem arises.

Accounts can also be funded directly via electronic commerce. Most banks
even offer unlimited transfers at low cost.
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1.2 CONCEPT OF INTERNET BANKING

The concept of internet banking plays a vital role in transforming banking

industry from paper banking to paperless banking which will majorly benefit the
customers of banking industry. With cybercafe’s springing up in different
cities, access to internet banking is going to be easy. It is not restricted to one
computer as there is no need for the customer to have any financial software
program installed on the computer in order to conduct banking over the internet.
The WORLD-WIDE BANK is used as a distribution channel to the bank.

In order to provide more benefits to customer and to increase the performance

of banks they are adopting cost effective distribution channels to distribute their
financial or banking service to customer. Through internet banking banks want
to keep the existing customers as well as to attract new customers. It uses the
internet platform or services as electronic delivery channel in order to deliver
their banking services such as balance enquiry, printing, statement, fund
transfer to other bank accounts, etc.

Electronic banking the newest channel for the delivery of banking services, has
transformed branch banking into virtual one-stop-shop. These practices can be done
through various modes like computer, mobile, etc. Banks are using new tools and
techniques to find out their customers need and offer them tailor made products
and services. The impact of automation is difficult to measure

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Indian e-banking scenario

As per the international report the banking transactions on a brick-and-mortar

banking costs around $1.1. while through atm it costs around $0.27 and just 1%
of over-the-counter banking in case of internet banking. Almost all private sector
banks are moving towards e-enabling their existing products.

Internet banking starts from migrating existing products to the net. This started
initially simple functions such as getting information about interest rates,
Checking account balance, computing loan eligibility. Then the services were
extended to online bill payment, transfer of funds between accounts and cash
management.
Recently banks started setting up payment gateways for b2b and b2c
transactions. These banks have a complete automation of their electronic
customer database, real time transactions processing capabilities and latest
technology platform.

According to NASSCOM’s survey e-business transactions in India was

expected to reach Rs 12billion, however hurdles like low internet penetration,
security issues, tax consideration and credit issues continue to depress the growth
of the segment. Even if the government has passed the cyber laws, still there is
lack of clarity about legislative aspects governing the sector and effectiveness of
administration to track & punish cybercrimes.

Those banks which have already started e banking will have to continuously
update their services to retain the potential customers since any customer is just a
click away from a computer. Also, one cannot afford to depend only on internet
banking. Brick and mortar will continue to play an important role. For those,
which are yet to begin are ignoring the potential customers by remaining away
from technology.

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1.3 HISTORY OF INTERNET BANKING

The concept of internet banking has undergone many changes with the
development of WORLD WIDE WEB (WWW). The innovation in technology
and its amalgamation with information communication technology (ICT)
bought about evolution in banking history. ICT is becoming an important factor
in future development of financial services industry and in particular banking
industry.

In 1981 four of New York's major banks-Citibank, chase Manhattan, chemical and
manufactures Hanover offered home banking services

The United Kingdom

Online banking started in the United Kingdom with the launch of Nottingham
building society (NBS)’s service in September 1982, initially on a restricted
basis, before it was expanded nationally in 1983
Japan
In January 1997, the first online banking service was launched by Sumitomo bank.

India

Internet banking arrived in India in the late 1990s. ICICI BANK was the first
bank to introduce internet banking to its customers. With lower internet costs and
increased awareness about electronic media, online banking established itself only
in 1999.

Anywhere banking came to be recognized as an opportunity also for competitive

services. Other online services like checking account status, fund transfer, loan
applications, credit card verifications, etc. which does not require to visit branch
during office hours were viewed as highly value offerings and increasingly
started to become a necessity. Once banking institutions recognized the low
processing costs per transactions via the internet, they began viewing online
banking as an extension of bank rather than as an add-on-service. Nationalized
banks initially viewed online banking as insecure. But eventually, SBI, CANARA
BANK, BANK OF BARODA and others introduced it. Today banks encourage
their customers to use online banking. They think that self-control transactions
provide more satisfaction to customers. Most of the traditional customers prefer
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to bank with a bank with a human touch and prefer public sector banks as they
form an emotional relationship with their personnel. Evidence suggests that usage
of digital banking in developed countries is more than 90 percent and in
developing countries it ranges from 11-25 percent.
The study by CAPGEMINI in his report WORLDS PAYMENTS REPORT 2014
indicate that the non-cash transactions have reached 334 billion transactions. Various
initiatives by RESEVE BANK OF INDIA, resulted in offering technology-based
solutions. Electronic clearing system [ECS] was launched in 1990s to carter to bulk and
repetitive payments. By September 2008, an avatar in the form of national electronic
clearing cell was launched to handle the transactions. Prepaid instruments allow
transactions for goods and services against the value stored on payment instrument. It may
be in the form of smart cards, magnetic strip cards, internet wallets, mobile wallets, etc.
Based on report of INTERNET AND MOBILE ASSOCIATION OF INDIA
[IAMAI], internet commerce was expected to reach Rs.465 billion by year
2012.On the 2nd Monday in October, national online bank day is celebrated.

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Progress of Electronic Banking in India

In India, Reserve Bank of India outlined the mission to ensure that payment and
settlement systems are safe, efficient, interoperable, authorized, accessible,
inclusive and compliant with international standards. The vision is to proactively
encourage electronic payment system for ushering in a less cash society in India.
Regulation is keen to promote innovation and competition with an intention to
help payment system achieve international standards. Various initiatives by Reserve
Bank of India, in mid- eighties and early-nineties, resulted in offering technology-
based solutions. The need evolved to provide cost-effective alternative system.
The retail funds transfer system was introduced in 1990s to allow electronic
transfer of fund for people-to-people payment. In November 2005, a robust
system was launched to allow one to one funds transfer requirement of
individuals and corporates. Prepaid instruments allow transaction for goods and
services against the value stored on payment instrument. It may be in the form of
smart cards, magnetic stripe cards, internet wallets, mobile accounts, mobile
wallets, and paper vouchers. Consequent to the guidelines in mobile banking,
selected banks were permitted to offer the service after receipt of necessary
permission from Reserve Bank of India. Indian Retail payments pose significant
challenges and opportunities. Based on Payment system vision document released
by Reserve Bank of India, the number of non-cash transactions, at 6 per person, is
low in India. It is estimated that Government subsidies alone constitute more than
Rs.2.93 trillion and electronification has a potential to translate 4.13 billion
electronic transactions in a year. Based on the report of Internet and Mobile
Association of India (IAMAI), internet commerce is expected to reach Rs.465
billion by the year 2012.To facilitate electronification, Reserve Bank of India
established the umbrella organization, National Payment Corporation of India
[30]. Many researches in the past have laid importance on the significant
developments that are taking place in the banking industry due to the surge in
information technology

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1.4 FEATURES OF INTERNET BANKING

 Viewing account balances

 Viewing recent transactions

 Downloading Bank statements, for example in Pdf format

 Viewing images of paid Cheques

 Ordering cheque books

 Download periodic account statements

 Downloading applications for M-banking, E-banking etc.

 Bank customers can transact banking tasks through online banking.

 Fund transfer between the customer's linked accounts

 Investment purchase or sale

 Loan applications and transactions, such as repayments of enrolment

 Credit card applications

 Register utility billers and make bill payments

 Financial institution administration

 Transaction approval process

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1.5 DIFFERENCE BETWEEN TRADITIONAL BANKING
AND ONLINE BANKING

The following points can be distinguished

PARTICULARS TRADITIONAL ONLINE BANKING

BANKING
PRESENCE Banks exist physically Internet banks do not have
for serving the physical presence as
customers. service provided
online
TIME It consumes a lot of time It does not consume time
as customers have to visit as customers do not have
banks to carry out bank to visit banks to check
transactions like checking bank balances or to
bank balances, transfer money to another.
transferring money, etc. Customer can access their
account readily from
anywhere with a computer
and internet
Access
ACCESSIBILITY People have to visit Internet banking is
banks only during the available at any time and
working hours it provides 24 hours
access
SECURITY Traditional banking does Online banking is the
not encounter e-security tempting target for
threats hackers.
Security is one of
the problems
FINANCE CONTROL Customers who often Customers who often
travel abroad cannot pay travel abroad can have
close attention and greater control over their
control the finances
accounts
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 EXPENSIVE It is relatively expensive It is inexpensive as the
to maintain physical only cost is to maintain
records the website and control
of data. data.
COST Cost incurred by Such cost is eliminated as
traditional banks the banks do not have
include a lot of physical presence
operating and fixed costs
CUSTOMER In traditional banks, the In online banking, the
SERVICE
employees and clerical customers do not have to
staff of the bank can at stand in queues to carry out
tend only few customers certain bank transactions.
at a time

CONTACT Customers can have face Customers can have

contact in traditional only electronic
banking contacts.

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16
1.6 TYPES OF INTERNET BANKING

Currently there are 3 basic kinds of internet banking

Informational:

This is basic level of internet banking. Typically, the bank has marketing information
about the bank’s products and services on a stand-alone server. The risk is
relatively low, as informational systems typically have no path between the server
and the bank’s internal network. This level of internet banking can be provided by
the bank or outsourced. While the risk to a bank may be low, the server or web
site may be vulnerable to alteration. Appropriate controls therefore must be in
place to prevent unauthorized alteration to bank’s server or web site.

Communicative

This type of internet banking helps to communicate the bank system and the
customer. The interaction may be limited to electronic mail. Account enquiry,
loan applications or static file updates (name and address change). because these
servers may have a path to the bank’s internal networks, the risk is higher with
this configuration that with informational systems. Appropriate controls need to
be in place to prevent, monitor and alert management of any unauthorized attempt
to access the bank’s internal networks and computer systems. Virus controls also
become much more critical in this environment.

Transactional

This level of internet banking allows customers to execute transactions. Since a

path typically exists between the server and the bank or customer’s internal
network, this is the highest risk architecture and must have the strongest
controls. Customer transaction can include accessing accounts, paying bills,
transferring funds, etc.

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1.7 MODES OF INTERNET BANKING SERVICE

1.7. NATIONAL ELECTRONIC FUND TRANSFER [NEFT]:

It is an electronic fund transfer system maintained by Reserve Bank of India. It

started in November 2005, it was established and maintained by institute for
development and research in banking technology. NEFT enables bank customers
in India to transfer funds between any two NEFT enabled bank accounts on a
one-to-one basis Individuals who do not have a bank account can also deposit
cash at the NEFT enabled branches with instructions to transfer funds using
NEFT.

From 16 December 2019, NEFT is available 24×7.There is no NEFT limit on

the minimum or maximum amount that can be transferred through NEFT.
However, there is an upper limit of Rs.50,000 per transaction for cash-based
remittance. Such customers have to furnish full details including complete
address, telephone number, etc.

From December 16, 2019, there would be 48 half-hourly batches occurring between
00.30 am to 00:00 am everyday regardless of a Holiday or otherwise. As of
November 30, 2019, NEFT facilities were available at 1,48,477 branches/offices
of 216 Banks across the country and online through the website of NEFT-enabled
banks. NEFT has gained popularity due to the ease and efficiency with which the
transactions can be concluded.
Process

1) The customer files an application form providing details of the beneficiary

[name, branch name, IFSC, account type and account number] and the
amount to be remitted.
2) The remitter authorizes his/her bank branch to debit his account and remit
the specified amount to the beneficiary.
3) The originating bank branch prepares a message and sends the message to
its pooling center [NEFT service center]
4) The pooling center forwards the message and to the NEFT clearing center
[operated by national clearing cell, reserve bank of India] to be included
for the next available batch.

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 5) The clearing center sorts the funds transfer transactions destination bank
wise and prepares accounting entries to receive funds from originating
banks[debit] and give the funds to the destination banks[credit]. then bank
wise remittances messages are forwarded to the destination banks through
their pooling center [NEFT service center]
6) The destination banks receive the inwards remittance message from the
clearing center and pass on the credit to the beneficiary customer’s accounts.

Advantages

 No physical presence of either party is required

 No physical instrument needs to be transferred
 No visit to bank is required
 Confirmation of successful transactions is received through email and SMS
 It can be initiated from any place

The RBI announced on 11 June 2019 that all charges for via NEFT and RTGS
collected from banks would be waived from 1 July 2019, and asked banks to pass
on the benefits to customers.

Statistics

216.71 million National Electronic Funds Transfers (NEFT) transactions

worth ₹1,811,780.90 crore (US$254.01 billion were made in September
2019, as against 661 million transactions worth ₹44 trillion (US$620 billion)
the entire year 2013-15

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1.8 REAL TIME GROSS SETTLEMENT [RTGS]:

Real time gross settlements (also called as RTGS) systems are specialist funds
transfer system where the transfer of money or securities takes place from one
bank to another on a ―real time‖ and on a ―gross basis.

Settlement in real time means a payment transaction is not subject to any waiting
period with transactions being settle as soon as they are processed. Gross
settlement means the transactions is settled on one-to-one basis without bundling
or netting with any other transactions. Settlement means once processed,
payments are final.

It is generally required for high value transactions where the payments is to be

done on immediate basis. However, most regular payments would not use a
RTGS system, but instead use a national payment system that allows
participants to batch the payments.

Reserve bank of India introduced the RTGS system in March 2004 with four bank
branches only for interbank transactions. However, the RTGS reach now includes
96 banks.

The minimum amount to be transacted through RTGS system is Rs 2lakhs. there

is no upper ceiling for RTGS transactions. The beneficiary bank has to credit the
beneficiary's account within 30 minutes of receiving the funds transfer message.

While the customers do not have the facility to track the transaction, the RBI has
implemented the feature of positive confirmation in an RTGS transaction. Under
this, the remitting bank would receive a message from RBI (through the
beneficiary bank) that the money has been credited to the beneficiary bank /
customer account. Based on this, the remitting bank should advise the remitting
customer that money has been credited to the receiving bank’s beneficiary
account.

 With a view to rationalize the service charges levied by banks for

offering funds through RTGS system, a broad framework of charges
is prescribed as under:

Inward transactions-free, no charge to be levied

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Outward transactions-Rs200000/-to Rs500000/-: Rs.25 to a maximum of Rs.30

Above Rs 500000/-: Rs.49.50/-

The RTGS system also accepts future value dated transactions from the remitting
bank for settlement on RTGS working days upto3 days in advance. Such transactions
will be paid in the queue based on the value date of the transactions.

UTR: unique transaction reference number is a 22 characters code used to identify a

transaction in RTGS system

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Advantages:

 The fund transfer occurs in real time

 It is highly reliable and powered by RBI
 It offers immediate clearing
 Elimination of time lag
 More security as the amount is usually high
 There is no cost for inward transactions.

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1.9 IMPS (INTERBANK MOBILE PAYMENTS
SERVICE/IMMEDIATE PAYMENTS SERVICE):

For transferring funds real time and 24*7*365 interbank was a major challenge
faced in banking industry. Only NEFT and RTGS were available to user for fund
transfer during banking hours. Therefore, NPCI conducted a study in august 201.
With banks like SBI, BOI, yes bank axis bank, etc. Immediate payment
system(imps)launch happened on 22 November 2010 by SMT.SHYAMALA
GOPINATH, this service provides real time fund transfer i.e., Instant ,24*7
interbank electronic fund transfer service that could be accessed on multiple
channels like mobile, internet, atm and SMS. it is also safe and economical to
transfer within India.

Mobile money identifier (MMID) is a 7 digits code linked to a mobile number.

Both sender and receiver have to register for mobile banking and get a unique
MMID.

Generation of MMID is one time process. Generally, the maximum limit is Rs.
200000 for transferring. The charges are decided by individual banks.

Charges (subject to change according to Imps

banks)
Amount up to Rs.10000 Rs2.50+tax

Amount above rs10000 up to Rs.100000 Rs.5 +tax

Amount above rs100000 up to Rs.200000 Rs25+tax

Process

1) Install the mobile banking application of the respective bank

2) Log in using the user id and password provided by bank

3) Go to important option in the app and follow the prompt to

generate your MMID. You are all set to use imps once MMID is
generated

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4) Enter the required details such as name id the beneficiary, registered
mobile number of the beneficiary, MMID and amount to be transferred

5) After entering the details, confirm the transactions

Advantages

 Mobile alerts

 Flexible and easy to handle

 Inexpensive

 Multi-platform support

 Faster transactions

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1.10 ELECTRONIC CLEARING SYSTEM [ECS]:

ECS is an electronic mode of funds transfer from one bank account to another.
It facilitates paperless credit/debit transactions. it can be used by institutions
who has to make bulk or repetitive transactions for making payments like
dividend, interest, salary, pension, etc. ECS can also be used to make bill
payments to utility companies such as telephone, electricity, water, or for
making equated monthly instalments payments on loan as well as sip

There are two types of ECS:

ECS CREDIT- It is used for allowing credit to a large number of beneficiaries

by raising a single debit to the customer’s account. Such as dividend, interest,
transferring subsidies of LPG to people

The institutional user has to first register with ECS center. The micro code is a
numeric 9 digits code which represents the bank branch participating in ECS
Scheme. There is no maximum limit on transactions.

Process

1) The user intending to make payments through ECS has to submit

details of beneficiary (name, bank branch, account number, micro code
of destination bank branch) date on which credit is to be afforded to the
beneficiaries, in a specified format through its sponsor bank to one of
the ECS centers where it is registered as user.
2) The bank managing the ECS center then debits the account of the
sponsor bank on the scheduled settlement day and credits the account
of destination banks for onward credit to the accounts of ultimate
customer

ECS DEBIT- ECS debit can be initiated by any institution which has to receive
amount towards telephone electricity water dues, tax collection, loan instalment
repayments insurance premium, pensions, etc.

Example- when there is automatic reduction of the instalments of customer by bank

25
Process

The ECS debit user intending to collect receivables through ECS has to submit
details of customers (name, branch, account number, micro code of destination
bank branch) date on which customers account is to debited in a specified
format through its sponsor bank to ECS center. The bank managing the ECS
center then passes on the debits to destination bank for onward debit to
customers account and credit the sponsor bank account for onward credit to
user institution.

26
1.11 AUTOMATED TELLER MACHINE(ATM):

An atm is an electronic telecommunication device that enables customers to

perform financial transactions, such as Cash withdrawals, deposits, funds
transfer, account information inquiries, at any time without the need for direct
interaction with bank staff. Atm’s are also called cash corner, any time money,
cash dispenser, etc.
Customers are usually identified by inserting a plastic atm card into atm
machine and entering the personal identification number(pin). Atm’s are placed
in near banks, Shopping centers, airports, railway station, petrol station,
restaurants, etc. most atm’s are connected to interbank networks, which enables
the customer to withdraw and deposit money from any machine not belonging to
the bank where they have their account.

Hongkong and Shanghai banking corporation (HSBC) introduced atm’s in

India in 1987.

The charges of using atm can be defined in two ways:

Transactions at bank own’s atm: - minimum of 5 free transactions

Transactions at any other bank’s atm: - maximum of Rs.20/-per transactions

(plus applicable taxes)

Customers should follow certain do‘s and don‘ts for keeping their
transactions safe:

 Only one card holder should access the atm

 The card holder should not write the pin on the card

 The card holder should not let the pin be disclosed while entering

 The card holder should not lend his card to anyone

 The card holder should remember that bank officials never ask for atm
card details or pin over telephone, email, SMS and so on.

 Atm card is different from debit cards as atm cards can be used only in
atm machines

27
How atm’s work:

 The card is swiped on card reader which captures the account.

Information through magnetic strip at the backside of the card. The
data is passed to the server.
 The information is be typed on the keyboard like pin code.
 Then the speaker provides audio feedback when a particular key is pressed.
 The processing is displayed by the screen.
 Then the receipt printer prints all the details like amount of cash
withdrawn, date and time and so on.
 From the cash dispenser the user can collect money.
 A complete record of each transaction is kept by the machine

28
1.12 CREDIT CARD:

It is a type of post-paid card. It lets cardholders to borrow funds. It imposes the

condition that cardholders pay back the borrowed amount and the interest, many
credit cards offer attract customers by offering incentives such as hotel room
rentals, cash back, gift vouchers, etc. there is a line of credit (loc) that is decided
in advance between the borrower and the issuer company regarding maximum
amount of money to be borrowed. Andhra bank was the first to introduce
credit cards in India in 1981.Central bank of India is the first public bank
to issue debit card. Generally 20 days’ time period is given to settle the
borrowed amount. Companies offering credit cards are American express, visa
Mastercard, discover, chase, etc.

Types of credit card:

Unsecured credit cards- They don’t require you to deposit any cash as
collateral it helps to build credit when used responsibly.

Secured credit card- It requires a security deposit which may serve as the
customer’s credit limit

Balance transfer credit card- It allows users to transfer their credit card
balance to a new card which offers0% annual percentage rate in starting.

Travel rewards credit card- It offers point that can be redeemed for travel
related purchase such as airfare and hotels.

Gas rewards credit cards- It gives cash back when used at pump

Cash back rewards credit cards- It offers % of cash back on certain purchase

Student credit card- It is reserved for college students but they have a low
credit limit.

0% Apr. credit cards- Allows you to pay no interest on purchase for a certain
period

Retail credit card- It gives the points when we make purchase from specific
retailer

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1.13 DEBIT CARD:

A debit card also called as plastic card or bank card is a payment card that can be
used instead of cash when making purchases.it is also called as prepaid card as it
deducts only up to an amount available in a person’s bank account. debit cards
usually have daily purchase limits, meaning it may not be possible to make an
especially large purchase with a debit. If you withdraw cash from an atm that is
not affiliated with the bank that issued your debit card, you may be charged a
fee.

There are currently three ways that debit card transactions are
processed.

EFTPOS (online debit or pin debit)

Offline debit (signature debit)

Electronic purse card system (stored value cards by bank)

One physical card can include the functions of all three types, so that it can be
used in a number of different circumstances.

Types of debit cards

Check card- It withdraws money directly from bank account to pay for a
purchase.

Visa debit cards- These cards are backed by visa, a credit card processing
network. These cards also come with overdraft facility.

Rupay debit cards- The national payments corporation of India (NPCI) started

30
Rupay cards.it was established with intention of reducing the cost associated
with other international cards.

Contactless debit cards- These are debit cards which come with an in-built
radio frequency module that allow you to make payment by simply waving the
card over the machine. These are considered more safer than other cards as there
is no need to hand over it to someone else

Maestro debit cards- Maestro card is essentially debit card of Master Card
company. The major benefit of this card is it uses master card network which
enables you to make purchase and withdraw cash from atm’s all over the
world.it is accepted at around 15 million point of sale outlets around the world.

31
1.14 DIGITAL WALLET:

A digital wallet is a system that securely stores a person’s payment information.

digitally means using digital or computer technology .it is also called as e-
wallet, mobile money, etc.

The digital wallet consists of two things:

Software: - It keeps the entire information stored in the wallet.it also secures
information by encrypting it

Data: - It is the information that users provide user’s name, card details,
addresses, contact number, etc. It is operated under financial and performed via
mobile instead of paying with cash, cheque or credit cards a consumer can use
mobile to pay for wide range of services.to pay various utility bills such as
electricity, prepaid recharge, booking movie tickets, telephone bills, etc. e-wallets
are used.

Merits

 A faster payment process, no lengthy procedure

 Rewards and discount
 Tracking the status of ordered commodities
 Maintenance of transactions record
 Mo theft of money as it is stored electronically

Wallet365.com was India’s first e-wallet, launched in 2006 by media firm times
group in association with yes bank

Types of e wallet

Closed wallet: They are linked to a merchant or private company where you
can use money only for direct purchase from specific merchant money from
these wallets cannot be transferred to your bank account, Examples-amazon
pay, and ola money

Semi-closed wallets: They can be used with multiple merchants as long as

they have contract with payment portal/though you can receive money in semi-
closed

32
wallet you cannot withdraw it as cash. examples-Paytm and Mobi Kwik

Open wallets: It is issued wither directly by bank are by a third party. Money
in this wallet can be used for any transactions and users can even withdraw
money. examples-PayPal

Process

 Download the app.

 transfer the money into your wallet using any intermediary or agent,
net banking or a debit card.
 the mobile wallet company sends your money to an escrow account.
 whenever you make a transaction from your mobile wallet, a message is
sent to the respective merchant regarding payment.
 once the merchant immediately honors the payment, the money is
transferred from your wallet to merchant’s bank account.

33
 1.15 KIOSK BANKING:

Kiosk Banking also known as ―Bank Mitra‖, is a model developed by RBI under
the guidelines of Government of India. With this model banks will provide their
services at the door of their customers. It has been asked by the RBI to all Banks
that they must reach to every customer. During a 7survey, it was found that in
India, not even 20% of total population has their account with bank and that’s
why people
of India can't get proper benefit of different schemes driven by Government.

In Kiosk Banking, a CSP (Customer Service Point) will be opened in every

village / ward in city, where the population is greater than 2000.Appointed person
will work as a mini bank at his CSP. He/ She will provide all the services of bank
at his office. The selection process of these CSP will be based upon interview and
guarantee of Sarpanch as it is a direct matter of money, so the person must be well
educated and reputed in his area.

A CSP will provide below mentioned services at his office

 New Account Opening
 Cash Deposit
 Cash Withdrawal
 New account openings
 Opening RD (Regular Deposit) Accounts
 Self Help Group Accounts opening
 Providing services to current customers of bank
 Account openings under ‗Pardhanmantri Jan DhanYojna.
Kiosk banking Benefits
 Hassle free opening of savings account.
 Less KYC documents.
 No Queues.
 No Travel expenses
 Easy deposits, withdrawals & cash remittances.
 Easy opening of R.D. Account
 Deposits can be made from anywhere.
 Transfer Subsidies, Scholarships and other Benefits can be directly

34
 credited to t h e account

The idea behind the functioning of the kiosk is that it should be supported by the
banks in private, public and cooperative sectors through the use of shops. These acts
as a touch point between a bank and the customer where the banking services such
as deposits, withdrawals, remittances apart from the micro-credit and, insurance.

This can be done through a retailer, who can open a no-frills bank account for a
customer by taking the photographs and recording the fingerprints and other
necessary details of the customer. Then, these details along with the requisite
documents are sent to the bank branch to carry out their processing. Once the
account is created, the customer can withdraw or deposit money anytime through the
internet enabled kiosk branch.

35
36
1.16 Green channel counter:

The bank has launched green channel counter (GCC) facility on bank day
(01.07.2010) at 57 selected branches of the bank spread across the country. This
was an Innovative step taken by the bank towards changing the traditional way of
paper-based banking. Green banking focusing in reduction in paper usage as well
as saving transactions time. This facility has been made available at 5000 plus
branches across the country.

SBI won the best customer initiative award for the green channel counter.

At such the GCC aims at providing the customers with a simple secure, and
quick way of executing daily banking transactions. There is no problem of
remembering the account number or carry passbook, pay in slips withdrawal
forms, etc. Only the atm card and pin is Needed to identify a customer and
his/her bank account. A transaction processing device (TPD) similar to a pos
machine is attached to the terminal. Customers swipes the card, selects a
Particular Transaction and enters the amount and the pin. This transaction gets
transferred to the teller terminal who enters denominations of cash to be
paid/received then pays /receives cash and completes the transactions customer is
provided with a Receipt generated from TPD. These type of transactions have
been enabled through this facility viz. Cash deposits, cash withdrawals, and
funds transfer.

The transactions amount has been fixed as Rs 40000/-. Customers can use green
channel counters without queue and without taking token. They may simple walk
to counter swipe the card and execute transactions. it takes less than 1 minas
compared to normal bank transactions which is of 2-4 minutes

Fee/charges-normal banking charges would be applicable

37
1.17 TELE BANKING OR PHONE BANKING:

Telephone banking is relatively new electronic banking product. However, it is

fastly becoming one of the most popular products. Customer can perform a
number of transactions from the convenience of their home or office. In fact, from
anywhere they have access to phone.

Tele banking is when you dial a number and call someone on phone and do
banking, whereas mobile banking is when you use an app for your banking
transactions.

Customers can do the following:

 Check balances and statement information

 Transfer funds from one account to another
 Pay certain bills
 Order statements or cheque books
 Demand draft request

This facility is available with the help of voice responsive system (VRS).This
system basically, accepts only tone dialed input. Like atm customer has to
follow particular process, initially account number and telephone pin are fed for
the process to start.

Also, the VRS system provides the users within additional facilities such as
changing existing password with the new desired, information about new
products, current interest rates, etc.

38
1.18 TYPES OF FRAUD:

Phishing – scams that request your account information

"Phishing" is a form of Internet fraud that aims to steal valuable information such
as card numbers, user ids and passwords. A fake web site is created to look
similar to that of a legitimate organization, typically a financial institution such as
a bank or insurance company. An email or SMS is sent requesting that the
recipient accesses the fake web site and enter their personal details, including
security access codes. The page looks genuine but users entering information are
inadvertently sending their information to the fraudster.

Identity theft

Identity theft is on the increase in Australia. It can take many forms, from
fraudulent credit card use, to your entire identity being used to open accounts,
obtain loans, and conduct other illegal activities. Be suspicious if anyone asks you
for your personal information. Scammers use convincing stories to explain why
you need to give them money or personal details.

Viruses and Trojans

Viruses and Trojans are harmful programs that are loaded onto your computer
without your knowledge. The goal of these programs may be to obtain or damage
information, hinder the performance of your computer, or flood you with
advertising. Viruses spread by infecting computers and then replicating. Trojans
appear as genuine applications and then embed themselves into a computer to
monitor activity and collect information. Using a firewall and maintaining current
virus protection software can help minimize your chances of getting viruses and
inadvertently downloading Trojans

39
Spyware and Adware

When clicking on pop-up advertisements – ones that ―pop up‖ in a separate browser
window – it’s possible you are also downloading ―spyware or ―adware. These
programs often come bundled with free programs, applications or services you
may download from the Internet. Spyware or Adware software covertly gathers
your user information and monitors your Internet activity, usually for advertising
purposes. Be cautious about clicking on Internet banners and pop-ups or
downloading free programs. Maintain current security software to detect and
remove spyware.

Card skimming

Card skimming is the illegal copying and capture of magnetic stripe and PIN
data on credit and debit cards. Skimming can occur at any bank ATM or via a
compromised EFTPOS machine. Captured card and PIN details are encoded
onto a counterfeit card and used to make fraudulent account withdrawals and
transactions.

ATM Skimming

Fraudsters can attach false casings and PIN pad overlay devices onto genuine
existing atm’s, or they can attach a skimming device onto a card reader entry used
in tandem with a concealed camera to capture and record PIN entry details.

EFTPOS skimming

A foreign device is implanted into an EFTPOS machine that is capable of copying

and capturing card and PIN details processed through the machine. A
compromised EFTPOS terminal can only be detected by a physical inspection.
However, you may witness suspicious merchant behavior that needs to be
immediately reported

Examples of suspicious merchant activity

1. Your card is taken out of your sight to process a transaction

40
2. You card is swiped more than once
3. Your card is subsequently swiped through a second EFTPOS terminal

41
Job and employment scams

Job and employment scams target people looking for a new job or a change of
job. They often promise a lot of income (sometimes they even guarantee it) for
not a lot of work. If you have received a work from home offer that you think
could be a scam, or if you have responded to a job advertisement that you now
realize is a scam, you can report a scam through the scam watch website.

Phishing over the phone

Phishing, where traditionally emails seek to represent a known or trusted entity

and trick people into disclosing their account or personal details, is now
increasingly happening over the phone. Be particularly vigilant if you’re asked to
disclose any Internet Banking sign-in details or Secure Code sent to your mobile.
Your mobile can be a target for fraudsters too. If you receive any SMS message
that you have not requested or are expecting, and you're suspicious, please
confirm the authenticity of the message.

Other mobile scams

You might be offered free or cheap ring tones, or the chance to win fantastic
prizes via text messages, or even automated voicemail messages. You should
avoid responding to or downloading supposedly free software due to the risk of
a virus or Trojan software being installed.

42
1.19 Security measures:

Every online bank should take measures to provide a safe banking experience.
These include:

Anti-virus and anti-malware protection- These programs help detect and

prevent viruses and malicious software. Banks use up-to-date programs to weed
out malware and prevent viruses from spreading.

Firewalls- Firewalls screen data coming in and out of computer networks, blocking
unauthorized access and stopping traffic from unsafe internet sources.

Secure Socket Layer (SSL) encryption- SSL encryption creates a secure

connection with your browser when you log in, fill out an application, register for
services etc. Just look for the lock symbol at the lower right-hand side of the page
or look for ―https://‖ at the beginning of the page’s URL/web address.

Cookies- By placing a cookie (a piece of text stored on a user‘s computer by

their web browser) on your computer after your initial login, banks can then
recognize or authenticate your computer when you log in to your account again. If
you use a new computer to log in to your account—or you erase your cookies—
you will be required to enter additional information at the time of your next login.

Multi-factor authentication measures- Multi-factor authentication can take

many forms and requires the use of two or three different authentication factors.
For example, you likely enter a password or PIN when you log in to your bank’s
website. If the site needs additional verification from you, it may prompt you to
answer a question that only you know the answer to or send a security code to a
device that you’ve registered.

Credential confidentiality- Banks do not share your usernames or

passwords w h o m anyone.

43
Automatic logout- Most banks automatically log you out of your secure session
after a period of inactivity to help prevent others from seeing or using your online
accounts.

Biometric authentication- Many banks have integrated fingerprint

authentication into their mobile banking apps. Other forms of biometric security
measures include ―eye print‖ verification and facial and voice recognition.
These verification methods are easy to use and hard for criminals to replicate.

Limited liability- Most banks offer some type of security guarantee. Depending
on the terms of the policy, your liability for unauthorized transactions is limited.
In other words, if you report unauthorized transactions on your account in a
timely manner, the charges may not be your responsibility.

To make online banking a safe and secure banking experience you

need to follow these steps:

Avoid accessing your account from a cybercafé or a shared computer. If

you are happening to do so then change your password as soon as you
finish your banking transactions.
Every time you finish using your online banking session then sign out
from the site rather than just closing the browser.
Change your internet banking password after your first logins and
thereafter regularly.
Use complex and difficult password and make it difficult for others to
guess Use different id and password for different internet accounts
Never share your passwords or login details with anybody
View your account daily and check it with your transactions then inform
your bank immediately

44
 .

1.20 NUMBER OF INTERNET USERS AS OF 2019

COUNTRY PERCENTAGE OF ONLINE BANK

USERS

Brazil 67.47%

Iceland 98.26%

Japan 90.87%

Russia 76.01%

Germany 84.40%

Uk 94.62%

Usa 75.23%

India 46.83%

China 58.80%

Central African 4.34%

republic

Https://en.m.wikipedia.org/wiki/
List_of_countries_by_number_of_Internet_users

45
Top 5 banks generate 92% of mobile banking value

State Bank of India leads the pack with 36% market share, followed by ICICI
Bank (21.5%), HDFC Bank (17.8%), Axis Bank (12.8%) and Kotak Bank
(4.7%). These banks have managed to increase the number of mobile transactions
by being proactive in development of mobile apps and making mobile banking
feature-rich.

According to Deepak Sharma, head of digital banking at Kotak Mahindra Bank,

―Overall, 60% of fixed deposits have moved online. But if you look at only
retail, nearly 80% of FD’ share opened online, ―In terms of number of logins,
mobile banking had overtaken net banking more than six months ago. Now
mobile banking is ahead of net banking in terms of transactions as well, ―said
Sharma. He said that the fastest growing segment is online recharge, which is
driving transactions.

They are now getting more and more categories online, like bill pay and IPO
subscription and also seeing systematic investment plans (sips) gaining traction.

46
 CHAPTER 2: -RESEARCH METHODOLOGY

2.1 RESEARCH PROBLEM

The research attempts to identify the reasons behind the:

 What is level of usage of internet banking among customers?

 Which are the factors affecting positively and negatively towards the use of
e- banking services?

 What is the awareness level of using technology for doing online banking?

 Which sector of the population uses internet banking the most?

47
2.2 OBJECTIVES OF STUDY

The following are primary objectives or drivers of internet banking

1. To find out the opinion from respondents regarding the various problems
of e- banking

2. To study the factors influencing consumer’s perception towards

internet banking

3. To study the dependency level on internet banking

4. To extend knowledge and awareness of internet banking

5. To develop new tools and techniques for online banking

48
2.3 SCOPE OF THE STUDY

All the sectors are mostly related to all classes of people like businessmen,
industry, agriculture, labour, small entrepreneurs, workers etc. It has been
changing complete culture and working methodology. Therefore, it has a wide
scope to study the existing modern transaction system in the financial sector of
banks. After identifying the subject (research area) and referring the relevant
literatures, it has been found that in most of the literature, the information
technologies have a wide application area.
However, in finance sector major changes have been made. Due to these drastic
changes, we have chosen to do the study on usage and awareness of internet
banking.

49
2.4 SIGNIFICANCE OF STUDY

Even in today’s era, there is less than an acceptable level of online banking
activity and this research attempts to identify the causes for this mentality.

For customers, research findings will help acquire a better knowledge of the
benefits of e-banking, what are the limitations and steps been taken to improve
internet banking services.

In the present scenario major economic and technical changes are undergoing in
industrial and financial revolution through the new information-processing
technology. Especially in finance sector it has a significant role for overall
development.it helps customers know the importance of online banking.

50
2.5 HYPOTHESIS

On the basis of objectives, following hypothesis have been framed for testing

H0- There is no significant difference on consumer perception towards internet

banking

H1-there is significant difference on consumers perception towards internet banking

51
2.6 DATABASE AND METHODOLOGY

Universe/Population- The main location of population residing are of Mumbai

Sample area- The respondents are taken from Churchgate to Borivali

Sample size- An average survey of 37 respondents is done.

Sample technique- A survey has been taken through questionnaire Method

Data collection- Data is taken from two sources

 Primary data -The data is taken through survey by asking certain questions)
 Secondary data- The secondary data have been collected from different
websites like www.wikipedia.com and www.google.co.in and so many
other websites. Review of literature is done from various research papers
of authors from Google scholar.

Swot analysis of internet banking and case study in detail is done in chapter 4-
data analysis and interpretation

The respondents are students, employees, professionals, housewife and

businessman. The questionnaire has closed ended and rating scale questions
It consists of 15 questions including respondent’s personal details

52
2.7 LIMITATIONS

In spite of best of efforts to minimize all limitations that might creep in the course
of research there were certain constraints within which the research was
completed

 The research was based on primary and secondary data. The primary data
was collected from respondents residing in Churchgate to Borivali area.
Although, samples selected from city cannot be considered as a proper
representation of the population.

 Space limitation of the project has forced to omit some depth study of
related matters

 Lack of availability of resources like finance and time to know a

better perspective of customers

53
 CHAPTER 3:-LITERATURE REVIEW

Literature review of various scholars have been done as under

Dr. Preeti Singh

The ability to carry out banking transactions through the Internet has empowered
customers to execute their financial transactions within the comfort of their homes.
Internet banking provides benefits both bankers and customers alike. For the
bankers this system is cost-effective, as it has considerably reduced the
administrative costs and paperwork related to the transactions. Besides, banks can
also cater to the needs of thousands of customers at the same time. Conventional
banking has always been slow and time consuming. But Internet banking has
tremendously reduced the time required to process banking transactions, thereby
making banking faster and convenient. With the help of Internet banking,
customer can access any information regarding their account and transactions,
any time of the day. Therefore, customer can regularly monitor their account as
well as keep track of financial transactions, which can be of immense help in
detecting any fraudulent transaction.

Rajesh Kumar Srivastava

When investigating all the variables and the response by consumers, this study
reveals that the perception of the consumers can be changed by awareness
program, friendly usage, less charges, proper security, and the best response to the
services offered. The study also provides the kind of correlation between different
factors the first thing that all bankers should concern about is the requirement of
awareness. Even though these people are inclined towards the manual banking,
these can be turned to potential customers so if consumer sees most of their
colleagues or friends who surround him using Internet banking then it may
influence his decision to follow Internet banking option.

54
Frimpong twum

This study has provided perspectives on internet banking in relation to usage

intentions and factors that contribute to customer’s perception of internet banking
security. Customer perception of internet banking security is significantly related to
usage and is significantly affected by trust of the system and trust of the provider.
The study concludes that customer perception of internet banking security is
influenced by customer’s trust of the bank and the internet system and this
subsequently influences usage intentions. The findings contribute to understand
cyber security management through trust management.

Mohammed Sadique Khan and Siba Sankar Mahapatra

The result indicates that the two dimensions, viz. Privacy/Security and Fulfilment
are not contributing significantly towards the overall service quality. This is an
implication that the customers feel that bankers fail in providing the services on
these two dimensions satisfactorily. It is also observed that the opinion of male
and female of business class differs from the other classes. The i-banking is going
to be very crucial for India, having increasing percentage of younger generation
population with computer literacy

Pooja Malhotra and Balwinder Singh

The rate at which innovations are adopted by firms constitutes an important part
of the process of technological change. The study is an attempt to examine the
factors affecting the probability of adoption of Internet banking in India. The
results indicate that larger banks, banks with younger age and banks which have
large amounts of deposits are found to exhibit a higher probability to adopt
internet banking.it has been observed that private banks adopt internet banking
quicker than public banks.

Mr. Vishal Mohan Goyal and Mrs. Gaina Goyal

Security is the main reason why people are not opening bank account whereas
another reason is that they don’t want to try something new. There is a still lot
needed for the banking system to make reforms and train their customers for
using internet for their bank accounts. Customers have a fear of hacking of
55
accounts and thus do not go for internet banking. Banks are trying their level best by
providing the best security options to the customers but then to there is a lot of factors
which betrays a customer from opening an internet bank account.

56
Andrew Musiime and Malinga Ramadhan

Even if new strategy is implemented it should generally emphasize its efforts on

targeting individual clients. Internet banking providers look out for innovative
ways of creating awareness about service through participation in trade
organizations as well as adoption of new technology. There was a relation
between internet baking and customer satisfaction whereby they were committed
to use the services, as well as there was evidence that the bank was able to retain
its majority of internet banking service users. Internet banking service is still new
in most developing countries

Khalil Md nor, PhD and J. Michael Pearson

This study has found that trust significantly affect attitude towards internet
banking acceptance. Personal data are transmitted online that hacker might steal.
This concern requires high level of trust before individuals will start using
internet banking.to encourage internet banking adoption, banks need to develop
strategies that Improve the customers trust in the underlying technology.to create
positive attitude banks need to publicize the benefits associated with technology
and provide opportunity for their customers to test drive the technology

Pallab Sidkdar and Munsih Makkad

Ease of use, accessibility, intention to use are key factors towards driving online
banking adoption habits among customers in India. The study. The study bought
to light positive effects of accessibility and an overall customer satisfaction in
India, while trust and ease of use portrayed a weaker and negative effect on
overall satisfaction. The results of the study will be of significance to e-banking
practioners in terms of planning and development of online banking portals.

57
Arpita Khare, Ankita Mishra and Anurag B Singh

People are aware of benefits and flexibility provided by internet banking

however are hesitant to use it a new technology takes time to get accepted by
large number of masses. There is a scope to exploit internet-based models for
improving customer service and consequently building loyalty. Most people are
used to bank staff and internet does not provide physical contact. Internet
banking is in its introductory stage. The efficiency and convenience factors
would only make sense to customers if they are assured about security aspects.

58
 CHAPTER 4: -DATA ANALYSIS, INTERPRETATION AND
PRESENTATION

4.1 SWOT ANALYSIS OF INTERNET BANKING

STRENGTHS

 Customer access to information

 Timely access to information
 Ability to offer a customer more than one method of retrieving information
 Sophisticated technology systems
 Increased efficiency due to automation
 Increased accuracy of banking transaction

WEAKNESS

 High cost of service

 Continual wants of customers wants and needs
 Initial investment in technology will be expensive
 Multiple option for customers

OPPORTUNITIES

 The ability to have large customer base

 Global expansion
 Ability to take advantage of growing opportunity of internet banking

THREATS

 Continual changing technology

 Uncertainty of banking industry
 Competition from the lower price operation
 Possible failure of product due to non-acceptance of customers

59
4.2 CASE STUDY: DIGITAL BANKING SERVICES AT HDFC
BANK

HDFC Bank has seen more than nine-fold growth in mobile banking
transactions in recent years. According to HDFC sources, its share of internet
and mobile banking transactions was 71% in FY 2016 as compared to 63% in
the previous fiscal. The share of branch transactions too has gone down to 11%.
The bank is followed by ICICI Bank, State Bank of India and Axis Bank with
respect to mobile banking transactions. ICICI Bank had transactions worth Rs
2,224.97 crore, followed by SBI with Rs 1,586.4 crore and Axis Bank with Rs
1,440.61 crore worth of transactions.

Net banking lets the customer manage his/her account from the comfort of his/her
mouse - anytime, anywhere. Net Banking services provides access to account
information, products, and other services (including transactions of non-financial
and financial in nature) as advised by the Bank from time to time to the customers
through the website of the Bank. Net Banking Services also include the services
for Demat account, Credit Cards, and loan on the website of the Bank. The HDFC
Bank web site also features two versions of a demo facility - one "interactive" and
the other "guided"
- making it possible for even internet illiterates to get comfortable with its services.

On the downside, however, 'registration' for the service involves downloading of

a form that needs to be posted/delivered to any of its branches - not exactly "web
savvy" as we would call it. Also, the form itself requires Adobe Acrobat Reader to
be installed and the file size will exceed 5.5 MB, which translates roughly into an
hour or more of on-line time. Its 3-question FAQ page also assumes a high level
of computer knowledge from users. A number of studies aimed to identify the
motivations of adoption of digital banking.

In a study- time, cost savings and freedom from place have been found as the
main reasons underlying online banking acceptance. Though online banking offers
many benefits, globally majority of customers are still not using online banking
channel. Stated ignorance in information technology as a prime reason for this.
Adult customers are more reluctant to join new technologies or methods that
60
might contain little risk. It is also important to note that some adult customers are
interested in online banking; however, they do not possess the necessary computer
literacy to conduct it. In addition, banks should design the website to concern security
and privacy issues. In a study by Internet and Mobile Association of India (IAMAI), it
was found that the people are not doing financial transactions on the bank’s Internet
sites in India because of reasons such as security concerns (43%), preference for face-
to-face transactions (39%), lack of knowledge about transferring online (22%), lack of
user friendliness (10%), or lack of the facility in the current bank (2%). Research on
consumer attitude and adoption of internet banking depicted that there are several
factors predetermining the consumer’s attitude towards online banking such as
person’s demography, motivation and behavior towards different banking
technologies and individual acceptance of new technology. It has been found that
consumer’s attitudes toward online banking are influenced by the prior experience of
computer and new technology. The adoption of online banking forces consumers to
consider concerns about password integrity, privacy, data encryption, hacking, and the
protection of personal information. In the studied sample, 237 respondents (80%)
reported that they use non-branch banking. These include online banking, mobile
banking, and banking through teller machines. About 178 customers (60%) use
online banking and mobile banking. This indicates that a majority portion of the
Bank’s customer segment have adopted online banking and other modes of non-
branch banking. Regarding their motivations to adopt digital banking, the following
typical reasons were identified that motivate customers to use net banking:

1. it enables checking bank balance at any point of time, anywhere, conveniently.

2. It enables making request for cheque book at any point of time, conveniently.
3. It enables payment of utility bills anywhere at any point of time, conveniently.
4. It enables transfer of funds to third party at any point of time, conveniently.
5. It helps download accounts statement anywhere at any point of time, conveniently.
6. It enables checking credit card balance and payment of it, easily.
7. It helps recharge of mobile (prepaid mobile) at any point of time, conveniently.

61
4.3 INTERPRETATION OF DATA

The following questions were asked to several respondents:

1. Gender

Gender Respondents Percentage

Male 17 45.9%

Female 20 54.1%

Total sample 37 100%

Figure-1: gender

INTERPRETATION

From the above table we can understand that there are two categories of sample
size that is male and female. Male represents 45.9%i.e., 17respondents whereas
female represents 54.1% i.e., 20 respondents of sample size. It can be clearly seen
that greater amount of female population have given their point of view in
comparison to male population in using internet banking.

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2. Age group

Age group Respondents Percentage

18-24 21 56.8%

25-30 6 16.2%

31-40 5 13.5%

Above 40 5 13.5%

Total sample 37 100%

Figure-2: age

INTERPRETATION

We can understand that most people are within the age group of 18-24 consisting
of 56.8% i.e., 21 respondents. Some of them also belong to age group 25 -30
representing 16.2% i.e., 6 respondents, 31-40 accounts for 13.5% i.e., 5
respondents and some others are above 40 constituting 13.5% i.e., 5 respondents.
The youth of our nation has given their point of opinion on usage and awareness
of internet banking.

63
3. Profession

Profession Respondents Percentage

Employee 9 24.3%

Businessman 2 5.5%

Student 16 43.2%

Housewife 5 13.5%

Others 5 13.5%

Total sample 37 100%

Figure 3-profession

INTERPRETATION

We can depict that there are various types of profession done by respondents
varying from employees, businessman, students, housewife and others. The
maximum responses given are by the student which is43.2% accounting for 16
people. The rest are employees attaining 24.3% i.e., 9 people, then comes the
share of housewife and others which are equally distributed for 13.5% totaling to
5 respondents each. The least are businessman which is 5.5%in our survey
totaling to only 2 respondents.
64
4. Is manual banking more convenient than internet banking?

Opinions Respondents Percentage

Strongly agree 1 2.8%

Agree 7 18.9%
Neutral 9 24.3%
Disagree 17 45.9%
Strongly disagree 3 8.1%
Total sample 37 100%

Figure 4-comparision between manual banking and internet banking

INTERPRETATION

The answers for comparison of manual banking with internet banking has been
favorable to internet banking.45.9% respondents i.e., 17 people disagree to the fact
that manual banking is more convenient. However, there are also other
opinions like people saying neutral are 24.3% which is 9 respondents feel it is
equally convenient, but the rest minority people i.e., 18.9% -7 respondents do
agree with the fact that manual banking is more convinent.8.1% of sample size
strongly disagree with the above statement and only 1 respondent strongly
agree to the above fact for internet banking.

65
4. How do you perceive at internet banking?

Opinions Respondents Percentage

Complicated 5 13.5%
Easily accessible 25 67.6%
Flexible 13 35.1%
Poor feedback 1 2.7%
Total sample 37 100%

Figure 5-perspective about internet banking

INTERPRETATION

There are various viewpoints at looking towards internet banking, it may be

complicated for some or even easily accessible for one. Internet banking can be
flexible as well as can have poor feedback from respondents. Most of the people
in today’s world can easily access the internet banking which is 67.6% for 25
respondents.2nd factor comes the flexibility which accounts for 35.1%.5 people-le
i.e. 13.5% find it complicated to use internet banking and there is even poor
feedback given for internet banking by 2.7% which the least opinions.

66
5. Reasons for not using online banking services

Opinions Respondents Percentage

Do not have internet at 2 5.5%

home
Don’t trust internet 11 29.7%
service
Not having sufficient 10 27%
knowledge about
internet banking
Absence of habit of using 14 37.8%
internet
Total sample 37 100%

Figure 6- Reasons for not using online banking services

INTERPRETATION

There can be various reasons for not using online services like not having internet
connections, lack of security, insufficient knowledge, absence of habit of using
internet services, etc. Most of the people i.e., 37.8% -14 out of 37 people don’t
use internet due to lack of habit of using them. The next main reason is lack of
security.29.7%people think that their data and other details are not safe. There are
various other reasons like 27% of the people don’t have knowledge of how to use
the services, they are not aware. Some even don’t have the internet facility at
home for doing transactions which is very minimal 5.5%

67
6. What encourage you to make more internet transactions?

Opinions Respondents Percentage

Saves time 30 81.1%

Simple services 3 8.1%
High security 6 61.2%
Free transactions 5 13.5%
Total sample 37 100%

Figure 7-reasons for using internet transactions

INTERPRETATION

There are numerous reasons for availing the internet transactions. They are it
saves time, simplicity of using services, high security, free transactions and so on.
81.1%of people which is 30 out of 37 people that the main reason for using
internet services is that it saves a lot of time.6 respondents i.e., 16.2% of people
also use these services due to high security. 13.5% people think it is free
transactions that help them encourage to do online transactions, and even 8.1%
people think that it is simple as compared to internet banking.

68
7. How familiar are you with computer for doing online banking?

Opinions Respondents Percentage

No knowledge of 5 13.5%
computer
Beginner 10 27%
Average knowledge 9 24.3%
Expert 13 35.1%
Total sample 37 100%

Figure 8-familiarity with computer for doing online banking?

INTERPRETATION

Not all the people are same with the computer technicalities for using them. Only
35.1% people are fully expert for using computer i.e., 13 people.27% people are
at a beginner level for using the technology.24.3% only have an average
knowledge of using them:9 respondents, and some do not have any knowledge of
proper using the computer for internet banking which is 13.5% for 5 respondents.

69
8. Which feature of internet banking do you use the most?

Opinions Respondents Percentage

Pay bills 17 45.9%

Stock/ Demat transactions 8 21.6%
Transferring funds 15 40.5%
between accounts
Ordering online 21 56.8%
Total sample 37 100%

Figure 9-features of internet banking

INTERPRETATION

There are numerous features which are available when we use the internet
banking facilities. These are paying bills, Demat transactions, transfer of funds
and ordering online. From the above survey it has been concluded that 56.8%
which is 21 people use internet services for ordering online.45.9%of people use
these facilities to pay their daily utility bills like electricity, water, etc. 40.5%people
transfer funds through online banking services and others which is 21.6% use it for
stock and Demat transactions, as it is compulsorily to be done online only.

70
9. Frequency of usage of internet banking

Opinions Respondents Percentage

Daily 5 13.5%
Weekly 10 27%
Monthly 12 32.4%
Yearly 6 16.2%
Never 4 10.8%
Total sample 37 100%

Figure 10-usage of internet banking

INTERPRETATION

From the above diagram we can depict the level of usage of internet banking.
Transactions range differ from daily, weekly, monthly, yearly, or even never.
Most of the people do these transactions on a monthly basis which is 32.4% i.e.,
12 respondents.2nd largest use being made is on a weekly basis totaling for
27%.the next level of usage is 16.2% for yearly basis, 13.5%of people use internet
banking on a daily basis, and 10.8%of people i.e., 4 respondents do not use
internet service at all.

71
10. Do you trust banks that operate only online?

Opinions Respondents Percentage

Completely 3 8.1%
Somewhat 26 70.3%
Not at all 8 21.6%
Total sample 37 100%

Figure 11-trust towards bank operating online

INTERPRETATION

In today world banks are even able to operate on only online basis.70.3%:26
individual of people think that it should not be fully online nor fully manual.it
should be in the middle to help the people who are not aware of computers.
While, 21.6% think this is totally unfair if banks turn fully online. But a minority
share of people think it is completely ok to have banks operating online.

72
11. According to you, which banks gives the best internet service?

Opinions Respondents Percentage

ICICI bank 3 8.1%

HDFC bank 12 32.4%
Axis bank 2 5.5%
Kotak bank 7 18.9%
Others 13 35.1%
Total sample 37 100%

Figure 12-banks providing best internet service.

INTERPRETATION

All the people of the sample size have very much different answers to the above
question. Banks providing best internet service vary from ICICI bank to HDFC
bank, axis bank, Kotak bank and even there are other banks providing good
quality of these services. The majority is for other banks besides these 4 which
shares 35.1% of data. The next being HDFC bank for 32.4% for best internet
service, 12 responses have been received for this. Kotak bank also has good
repute for 18.9% after HDFC bank. HDFC bank is at slower rate of 8.1% and axis
bank is at least accounting for 5.5%.

73
12. Are you aware of internet banking frauds?

Opinions Respondents Percentage

Yes 30 81.1%
No 7 18.9%
Total sample 37 100%

Figure 13-awareness of internet banking frauds

INTERPRETATION

There are lot of frauds taking place in this online world. People should be aware
of these frauds taking place. The good thing is 81.1%people are aware of different
frauds and 18.9% people i.e. 7 out of 37 people don’t know about the frauds. But
only knowing about the fraud is not the solution. How to deal and tackle with this
fraud is the main solution.

74
13. Degree of satisfaction from service via internet in comparison
to service via banks.

Opinions Respondents Percentage

Very high 4 10.8%

High 21 56.8%
Little 11 29.7%
Not at all 1 2.7%
Total sample 37 100%

Figure 14-satisfaction level of internet banking.

INTERPRETATION

There are various levels for defining the satisfaction of customers for using
internet service ranging from very high to high, little and not at all.56.8% people
i.e., 21 individual think that the satisfaction level is as good as high.29.7% have
little satisfaction from internet banking.10.8 people have a very high level of
satisfaction from these online services. Whereas 2.7% people are not at all
satisfied with the internet services

75
14. Do you think there should be some changes in e-
banking facilities?

Opinions Respondents Percentage

Yes 29 78.4%
No 8 21.6%
Total sample 37 100%

Figure 15- changes required in e-banking facility

INTERPRETATION

With the increasing demand of online transactions, there is always a need for the
betterment of these services. 78.4% which is 29 respondents think there should be
changes for the e-banking facility. However, 8 respondents i.e. 21.6% also feel
that it is up to the mark and no such change is required for these online services

76
 CONCLUSIONS AND SUGGESTIONS

5.1 FINDINGS

This chapter summarizes the findings emerged from analysis of the results
pertaining to usage and awareness of internet banking.

 There is significant difference in the extent of services as provided by

both public and private banks.
 The preference to manual banking is still there in society. They are
not completely dependent on online services.
 Preference towards e-banking is largely associated with location,
occupation, a g e , education and perception towards bank.
 Internet banking has made banking easy and use of internet banking
without high cost and charges has made them primary reasons for
adoption of e- banking.
 It is found out that some bank customers have not adopted e-banking
services as they do not trust the internet as a channel for banking
 It is complicated to use for some people.
 The variety of services offered by the bank is very important factor for
adoption of e-bank facility. Some other criteria for adoption may be
size of bank, reputation of bank and familiarity with bank.
 Though the internet banking is a good option to traditional banking but
complications and difficulties have been experienced in using new
technology
 Internet bank is initially complicated to understand and there is risk of
getting wrong and fake information for bank customers of all age group.
 Maximum people opting for use of online banking are the youth who are
well educated and qualified to understand the terms and policies relating
to the internet world.
 Most of the people use these services because it is easily accessible and
saves time by performing these activities at home.
 The biggest challenge is that not all the people are aware of
technicalities of using internet banking or they are not told about the
advantages and benefits offered.
77
 People don’t have sufficient knowledge about online systems
 Some don’t even have internet in today‘s worlds also.
 There can be various things done online but most of the people know
only limited things like ordering online, transferring funds, using atm
and so on.
 The usage level is on a frequent basis, people do not use these services
very often.
 Only a minority of part are availing full facilities.
 People are only aware of online banking frauds taking place like hacking
and others.

 They don’t have the knowledge or solution if frauds take place.

 Most of the people think that there should be some or the other changes
be made in these services.

78
5.2 SUGGESTIONS/RECOMMENDATIONS

The following suggestions are recommended for enhancing e-banking services of

banks to customers.

 Banks should take necessary steps to create awareness among other sections
of society like housewives, employees, aged people, etc. about the
advantages of e-banking services available in the banks.
 The e-banking system should be enhanced to make the online enquiry
and online payment much easier to the customers.
 Public sector banks should improve their e-banking services to compete
with private sector banks.
 Most of the customers have not availed internet banking service because
they do not trust internet channel presuming it is complicated. So, banks
may set up a team of personnel to train the customers to get acquainted
with internet channel.
 The bank customers have perceived the risk of getting wrong
information from e-services. These illusions should be removed from
the minds of the customers by bank people as these factors are the
barriers for most of the customers for not adopting these services.
 Though e-banking is convenient and available 24*7 and easy to use,
customers are afraid of adopting these services because they think that using
the services are difficult and complicated.so on-site training can be
provided to bank customers to all.
 These services should have affordable costs and charges, otherwise the
weaker and backward class of people will never be able to use them.
 It is the duty of the bankers to inculcate the feeling that internet
banking is safe and secure.
 This can be done possible only when a banker takes steps to give a
separate on-line center in their premises with enough number of
customers and uninterrupted internet facility.
 Attract consumer attention to internet services banking and its benefits
through better marketing
 Inform consumers about features, advantages, and benefits of internet
banking, especially its convenience.
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 5.3 CONCLUSION

The rise of the e commerce and the use of internet along with the online security
of transactions and sensitive information has been the core reason for the
penetration of online banking in everyday life.

 Accordingly, to the figures from the office of national statistics indicate

that subscription to the internet has grown more than 50% from 25
million to 45 million in India. It has also been estimated that 60% of the
population in India use internet in their daily life.
 Internet has helped to reduce the costs of financial institutions as well
as helped the client to use the service at any time and from virtually
anywhere with access to an internet connection.
 The use of electronic banking has removed personnel that facilitate
the transaction and has placed additional responsibilities on the
customer.
 The Internet provides an attractive channel for banks to broaden their
service capabilities by increasing the amount of customer self-service
through low- cost automated channels.
 Although it is clear that offering online banking has become a
―competitive necessity, it is useful to understand which customers are
likely to adopt this new channel, how those customers will change their
banking behavior post- adoption, what measurable changes this will
create in banks‟ internal performance.
 The purpose of this paper is to help fill significant gaps in knowledge about
the Internet banking. While improvements are certainly needed in the
internet banking application and environments of use, this study suggests
that organizations will better manage consumer attitudes to new internet
service applications if they understand that such experiences involve a
process of adjustment and learning over time, and not merely the adoption
of a new technology.
 Due to Increase in technology and banks offering their services
through various electronic channels, in turn the consumers are not
given proper awareness regarding their services. The first thing that
all bankers should concern about is the requirement of awareness.
80
 It is well proven that, some people are inclined towards manual banking;
these can be turned to potential customers for e-Banking.
 The surrounding influences the individual‘s behavior in India, only
environment that surrounds the public determines the behavior and
decisions of the individuals. So if more consumers are using I-Banking
facilities and it will influence their friends, relatives and colleagues to use
Internet banking as a preferred option.
 Internet banking uses a new platform in delivering the services. There
cannot be the only 1 best bank offering e-banking services .

81
 CHAPTER 6: - BIBLIOGRAPHY/REFERENCES

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Semi- Urban areas in India. International Journal of Scientific and
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banking. Innovative Marketing, 3(4), 67-73.
 Twum, F., & Ahenkora, K. (2012). Internet banking security strategy:
Securing customer trust. Journal of management and strategy, 3(4), 78.
 Khan, M. S., &Mahapatra, S. S. (2009). Service quality evaluation in
internet banking: an empirical study in India. International Journal of Indian
Culture and Business Management, 2(1), 30-46.
 Malhotra, P., & Singh, B. (2007). Determinants of internet banking
adoption by banks in India. Internet Research.
 Goyal, V. M., &Goyal, G. (2012). Customer perception towards
Internet banking w.r.f to private and foreign banks in India.
International Journal of Computing & Business Research, 2229-6166.
 Musiime, A., & Ramadhan, M. (2011). Internet banking, consumer
adoption and customer satisfaction. African Journal of marketing
management, 3(10), 261-269.
 Nor, K. M., & Pearson, J. M. (2015). The influence of trust on internet
banking acceptance. The Journal of Internet Banking and Commerce,
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 CHAPTER 7: -APPENDIX

The questionnaire is as under: - 1.

Gender

 Male
 Female

2. Age

 18-24
 25-30
 31-40
 Above 40

3. Profession

 Employee
 Businessman
 Student
 Housewife
 Others

4. Is Manual banking more convenient than internet banking?

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

85
5. How do you perceive (look at) internet banking system?

 Complicated
 Easily accessible
 Flexible
 Poor feedback

6. Reasons for not using online banking services

 Do not have internet at home

 Don’t trust internet service
 Not having sufficient knowledge about internet banking
 Absence of habit of using internet

7. What encourage you to make more internet transactions?

 Saves time
 Simple services
 High security
 Free transactions

8. How familiar are you with computer for doing online

banking 1 2 34

 No knowledge
 Beginner
 Average knowledge
 Expert

86
9. Which feature of internet banking do you use the most?

 Pay bills
 Stock / Demat transactions
 Transferring funds between accounts
 Ordering online

10. Frequency of usage of internet banking

 Daily
 Weekly
 Monthly
 Yearly
 Never

11. Do you trust banks that only operate online?

 Completely
 Somewhat
 Not at all

12. According to you, which bank gives the best internet banking service?

 ICICI bank
 HDFC bank
 Axis bank
 Kotak bank
 Others

13. Are you aware of internet banking frauds?

 Yes
 No

87
14. Degree of satisfaction from service via internet in comparison to service via banks

 Very high
 High
 Little
 Not at all

15. Do you think there should be some changes in e banking facility?

 Yes
 No

88