PROJECT REPORT

SUBMITTED FOR THE DEGREE OF B.COM

HONOURS IN ACCOUNTING AND FINANCE UNDER

THE UNIVERSITY OF CALCUTTA

TITLE OF THE PROJECT

ONLINE BANKING
A Study On Online Banking And Online Card Transaction
In An Emerging Economy

Submitted by :
 Name of the candidate : Sarnava Chakraborty
 CU Registration No. : 055-1111-0088-19
 CU Roll No. : 191055-21-0029
 College Roll No. : 04
 Name of the College : Netaji Nagar College
Supervised by :

Name of the Supervisor : Prof. Pinaki Ranjan De

Month and Year of Submission : May, 2022
 PROJECT REPORT
(SUBMITTED FOR THE DEGREE OF B.COM HONOURS IN ACCOUNTING AND
FINANCE UNDER THE UNIVERSITY OF CALCUTTA)

TITLE OF THE PROJECT

ONLINE BANKING
A study on Online Banking and online card transaction in an
emerging economy

Submitted by :
Name of the candidate : Sarnava Chakraborty

CU Registration No. : 055-1111-0088-19

CU Roll No. : 191055-21-0029

College Roll No. : 04

Name of the College : Netaji Nagar College

UNIVERSITY OF CALCUTTA
Supervised by :
Name of the supervisor : Prof. PINAKI RANJAN DE

Name of the college : NETAJI NAGAR COLLEGE

Month & Year of Submission :

May, 2022
 Supervisor’s Certificate

This is to certify that Mr. Sarnava Chakraborty, a student of B. Com. Honours in

Accounting & Finance of Netaji Nagar college under the University of Calcutta has
worked under my supervision and guidance for his Project Work and prepared a
Project report with the title ‘Online Banking’ : A Study On Online Banking And
Online Card Transaction In An Emerging Economy.
The project report, which he is submitting, is his genuine and original work to the
best of my knowledge.

Place : Kolkata Signature :

Date : Name : Prof. Pinaki Ranjan De
Designation : Associate Prof, Dept of Commerce

Name of the College : Netaji Nagar College

I
 Student’s Declaration

I hereby declare that the Project Work with the title ‘Online Banking’ : A Study On
Online Banking And Online Card Transaction In An Emerging Economy submitted
by me for the partial fulfillment of the degree of B. Com Honours in Accounting &
Finance under the University of Calcutta is my original work and has not been
submitted earlier to any other University for any other fulfillment of the
requirement for any course of study.
I also declare that no chapter of this manuscript in whole or in part has
been incorporated in this report from any earlier work done by others or by me.
However, extracts of any literature which has been used for this report has been
duly acknowledged providing details of such literature in the references.

Place : Kolkata Signature :

Date : Name : Sarnava Chakraborty

Address : I /54A , Baghajatin Pally

Kolkata – 700092

Registration No. : 055-1111-0088-19

Roll No. : 191055-21-0029

II
 Acknowledgement

I am grateful to Prof. Pinaki Ranjan De, the supervisor of our project report for his
kind support and help to do this project, without whom the project report could
never have been completed in such a short time. I am thankful to the professors
of our college who are kind enough to help me with their valuable suggestions for
betterment of this project. This project would not have been completed without
their participation. I am grateful for their co-operation during the period of my
project. Lastly, I thank to my parents and friends for their constant
encouragement without which the project would have been possible.

III
 Abstract

Banking sector play a very crucial role in the financial system of an economy. It
facilitates the creation and maintenance of a robust payment system to meet the
requirements of businesses, the government and general public. It also serves as
a credit delivery mechanism, which can be accessed by those who are in need of
funds. Overall, the banking sector of the economic activities represents the centre
of a nation Thus, a strong and healthy banking system is essential for economic
growth. The Indian banking sector, at present is witnessing an IT revolution and is
heading towards digitalization. The internet and IT has entirely changed the way
of functioning of banks and the financial institutions. The Information technology
was introduced in the Indian banking sector in the late eighties. However, current
phase of IT revolution is more intense and impactful, which probably has the
potential to change not only the banking landscape, but the overall structure and
direction of the economy. The modernization of banking sector, after the
introduction of IT and internet has benefitted both the customers as well as
banks. The banking now is not just limited to transactions in the branches, but it
has made its way into hand held devices like smart phones and tablets. The
current phase of banking may be aptly called as 'Digital Banking'.

IV
SERIAL NO. CONTENTS PAGE NO.

1. Chapter - I : INTRODUCTION 1 - 10

1.1 Background 1-7

1.2 Literature Review 8

1.3 Objective of the study 9

1.4 Research Methodology 9

1.5 Limitation of the study 10

1.6 Chapter Planning 10

2. Chapter – II : CONCEPTUAL FRAMEWORK 11 - 19

2.1 National or The Indian Scenario 11-12

2.2 International Scenario 13

2.3 Advantage of Online Banking 14

2.4 Disadvantage of Online Banking 15

2.5 Features of Online Banking 16

2.6 Various forms of Online Banking 17-19

Chapter – III : DATA COLLECTION AND
3. 20 - 26
ANALYSIS
CHAPTER-IV : CONCLUSION AND
4. RECOMMENDATIONS
27 - 28

4.1 Conclusion 27

4.2 Recommendations 28
BIBLIOGRAPHY 29
QUESTIONNAIRE 30-31
 CHAPTER – I

INTRODUCTION
1.1 BACKGROUND
A. Overview :

Online Banking is an electronic payment system that enables customers of

a financial institution to conduct financial transactions on a website
operated by the institutions, such as a retail bank, virtual bank, credit
union or building society. Online Banking is also referred as Internet
Banking, virtual banking and by other terms.

To access a financial institution’s online banking facility, a customer with

internet access would need to register with the institution for the service,
and set up some password (under various names) for customer verification
The password for online banking is normally not the same as account
number. The customer can link to the customer number any account
which the customer controls, which may be cheque, savings, loan, credit
card and other accounts. Customer numbers will also not be the same as
any debit or credit card issued by the financial institution to the customer.

To access online banking, a customer would go to the financial institution’s

secured website, and enter the online banking facility using the customer
number and password previously setup. Some financial institutions have
set up additional security steps for access to online banking, but there is to
the approach adopted.

Online Banking facilities offered by various financial institutions have many

features and capabilities common, but also have some that are application
specific.
1
A.1 Basic of Electronic Banking :

The term of electronic banking is almost generic in its nature and therefore it is
mostly used without any further definition or explanation. Electronic banking is
not equal to the term of internet banking although the latter is most widespread
type of it. Electronic banking is a construct, which consists of several distribution
channels.

Electronic banking is a bigger platform than just banking via internet. Although,
most general type of electronic banking in our times is banking through internet
or internet banking. Electronic banking this term can defines in many ways. Most
simple form is mean the provision of information or service via a bank to its
customers by a computer, television, telephone, or mobile phone.

Electronic banking includes several traditional services like telephone banking,

credit cards, debit cards, ATMs. Burr (1996), for example, describe of an
electronic connection between bank and customers in order to manage, prepare
and control financial transactions. Internet banking also allows their customer
access bank accounts for doing their banking transactions.

At another progression level internet banking called transactional online banking,

because of it involves the provision of facilities such as transfer of funds, view
account balances and transaction, buying financial products or service online.

A.2 Internet banking :

Internet banking defines as banking services such as transfer of fund, loan

application, account balance inquiry, fixed deposit placement and view
transaction histories provided by bank via internet.

Now a day, banking services really give many types of service through internet; it
is also another stage for banking industry goes to higher levels.

Beside that cash withdrawal, internet banking gives undergraduate customers

many types of banking transaction can be done through at the click of mouse
only. Undergraduate student using mouse to click already can be done several
banking transaction compare to traditional banking.

2
Internet banking has the advantage for bank to maintain competition, to
save costs, to enhance mass customization, marketing and communication
activities, and to maintain and attract consumer.

A.3 Conception of internet banking :

Internet banking is conducting banking transaction via internet, such as fund

transfer, account balance inquiry, history transaction, loan application and so
forth. In terms of banks ideals are as below:

 Provided with ICT equipment such as notebooks and internet connection,

the user can access anywhere anytime. (e.g. home, hotspots zone,
workplace and so forth)
 It required basic software from PC such as Internet explorer which allows
users to sign-in into their e-banking services from the websites. All
transactions done through website will store in banker server from
internet.
 Banking services are ready can anytime. Users can print the bank statement
or check the transaction history or observe the incoming fund anytime.

Meanwhile we should alert that the differences among internet banking and PC
Home banking. Internet banking is through browser-based, but PC Home Banking
needed to install a software package assigned by the bank.

A.4 Characteristics of internet banking :

Internet banking is beneficial for both the provider and the customer. Stated that
rationales of bank’s usage of the internet banking technology from the bank
perspective are mainly to saving cost. Banks use internet banking is because it is
the cheapest delivery channel for banking products. This kind of services can save
time and money of the bank with an added benefit of minimizing the likelihood of
committing errors by bank tellers. Internet banking offer services to their
customers to use at their conveniences. Mostly, undergraduate students are like
conveniences, easy and fast, somehow internet banking usage for undergraduate
still not so much. From the figure is show that age 16-24 is lower compare to age
25 onward.

3
 The basic characteristics of internet banking are:

 To help bank perspective to save costs.

 To save time and money.
 To minimize the likelihood committing errors.
 To fulfill undergraduate students convenience.
 To lower the transaction costs.

A.5 Security :

According to the main factors that determining the decision of

undergraduate students using internet banking is security. (ABF, 1997) shows that
undergraduate student and banker will keep away from internet banking are
security concern. More undergraduate students and households will be willing to
conduct their banking transaction via the internet, unless improvement of
security.

US banks believe that security concern is main barrier for internet banking is
concluding by the banks. Main reason for slow growth of internet banking were
discover by the security concern, this is conducted by study in Australia.

New innovation of the level of the security or risk associated will influence the
acceptance and adoption. Where internet banking has been long set up, the main
significant factors that will slow down the progress of this new innovation is the
main concern for security over the financial transaction via internet. Most of
peoples including undergraduate student, they will first considered secure and
safe of the internet banking.

A .6 Trust :

Trust in the internet increase long term internet usage in the adoption
decision. Trust will give undergraduate student guarantee safety for using
internet banking. Undergraduate student attitude toward internet banking
system may be related with trust on judgment on the security and privacy also.

4
One of the important reasons is lack of trust make undergraduate student do not
using internet banking, so must improve application security and privacy only can
give undergraduate student confidence for using internet banking.

Trust is an antecedent of perceived usefulness, also perceived ease of use is an

antecedent of trust. Trust has a directly and indirectly effect on behavior
intention to use. Determinants of perceived usefulness is trust, particularly in an
online environment, part of guarantee that undergraduate student will sense the
expected usefulness from the website.

A.7 Privacy protection :

Defined privacy as the protection of personal information so it is not reveal to or

used by others. Undergraduate normally aware of the privacy issues, including
whether personal information would be used by the banks or third parties to
market new services to them. Privacy has been an important factor in the choice
not to use internet banking. Effective privacy protection laws will consider the
internet environment will help to build trust and confidence.

To improve privacy issues, first banks must provide consumer reassurance and
information, ensure consumer information would not disclose to other or third
parties. Banks need to improve the application security and privacy and ensure
bank information security and privacy. To assist consumer in development secure
internet banking practice and risk management procedures.

A.8 Awareness :

Explanation of Awareness can be the acceptance and continued to use the

service, product or idea. show that undergraduate go via “a series of process in
knowledge, decision, conviction and confirmation” before they are ready to adopt
new service or products. The adoption or rejection of an internet banking start
when the undergraduate becomes aware of the internet banking. Consumer must
become aware of new service or new product is emphasizing by. Normally when
come out one new services or new product consumer will not dare to try or buy
it.

5
  HISTORY OF ELECTRONIC BANKING :

First online banking services by region

The United Kingdom
Online banking started in the United Kingdom with the launch of Nottingham
Building Society (NBS)'s Home link service in September 1982, initially on a
restricted basis, before it was expanded nationally in 1983. Home link was
delivered through a partnership with the Bank of Scotland and British
Telecom's Prestel service. The system used Prestel viewlink system and a
computer, such as the BBC Micro, or keyboard (Tan data Td1400) connected to
the telephone system and television set. The system allowed users to "transfer
money between accounts, pay bills and arrange loans... compare prices and order
goods from a few major retailers, check local restaurant menus or real estate
listings, arrange vacations... enter bids in Home link's regular auctions and send
electronic mail to other Home link users. In order to make bank transfers and bill
payments, a written instruction giving details of the intended recipient had to be
sent to the NBS who set the details up on the Home link system.
The United States
In the United States in-home banking was "is still in its infancy" with banks
"cautiously testing consumer interest" in 1984, a year after online banking went
national in the UK. At the time Chemical Bank in New York was "still working out
the bugs from its service, which offers somewhat limited features". It enabled
them to maintain electronic checkbook registers, see account balances, and
transfer funds between checking and savings accounts. The other three major
banks — Citibank, Chase Bank and Manufacturers Hanover — started to offer
home banking services soon after. Chemical's Pronto failed to attract enough
customers to break even and was abandoned in 1989. Other banks had a similar
experience. Since it first appeared in the United States, online banking has been
federally governed by the Electronic Funds Transfer Act of 1978.
France
After a test period with 2,500 users starting in 1984, online banking services were
launched in 1988, using Minitel terminals that were distributed freely to the
population by the government.
By 1990, 6.5 million Minitels were installed in households. Online banking was
one of the most popular services.
6
Japan
In January 1997, the first online banking service was launched by Sumitomo
Bank. By 2010, most major banks implemented online banking services, however,
the types of services offered varied. According to a poll conducted by Japanese
Bankers Association (JBA) in 2012, 65.2% were the users of personal internet
banking.
China
In January 2015, WeBank, the online bank created by Tencent, started 4-month-
long online banking trail operation.
Australia
In December 1995, Advance Bank acquired by St. George Bank, started to provide
customers with online banking with the rollout of the C++ Internet banking
program.
India
In 1998, ICICI Bank introduced internet banking to its customers.
Internet Users In India
(% of total population)

70

60

50

40

30

20

10

0
1980 1990 2000 2010 2020

year
Brazil
In 1996, Banco Original SA launched its online-only retail banking. In 2019 new
banks began to emerge as the Conta Simples, focused only for companies.
7
1.2 Literature Review
Online Banking is an innovation when new information technologies merge into
traditional banking services. Operating costs minimization and revenue
maximization are the major drivers that boost e-banking services (Sannes, 2001;
Reibstein, 2002). E-banking service is basically a self-service by customers, so for
banks, it requires less resources and lower transaction and production costs
(Southard and Siau, 2004; Witman and Poust, 2008). A study about the e-banking
over 1999–2006 shows that the application of e-banking can improve banks’
performance in terms of the growth in assets, reduction in operating expenses
and portfolio enhancement (Dandapani et al., 2008). Even in 1990s, Sraeel (1996)
emphasises that creating virtual banking will not only create a new service
delivery channel, but also lead to value creation to both banks and customers
(Hwang et al., 2007; Murphy, 2007). AmatoMcCoy (2005) further argues that
customers will be attracted to e-banking when the advanced e-banking services
like e-transfer and e-bill options are available. Through interviewing banks in a
small island and examining their e-banking websites from 2004 to 2006, Jenkins
(2007) indicates that those banks were using e-banking as an assurance to their
customers to maintain a competitive quality of service.

Dr.C.Paramasivan (2009) in his studies entitled “customer satisfaction through

information technology in commercial banks” highlighted that, bank account
holders are somewhat satisfied with the services provided by their banks and the
banks should try to enhance their services in order the satisfy their customers in a
cost effective way with the help of information technology.

Mishra (2005) in his paper stated the benefits and the security concerns of online
banking. According to him increased customer loyalty, improved customer access,
attracting new customers, offering of more services are the primary drivers of
online banking.

You can use electronic funds transfer to:

• Have your salary deposited directly into your bank or credit union account.
• Withdraw money from your 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.
8
1.3 Objective of the study
The main objectives of the study are
 To understand the Genesis and concept of online banking.
 To analyse the importance advantages and limitations of online banking.
 Explain the different form of online banking.
 To analyse the trend of online banking with the help of primary data.
 To analyse the national and international scenario of online banking.
 To analyse the present E-banking scenario concerned with ATM internet
banking mobile banking credit card debit card and other E-banking services.

1.4 Research Methodology

Research methodology is a way to systematically solve the research problem. It
may be understood as science of study a phenomenon. It is important for
research to know not only the research method but also to know methodology.
The procedure by which research ago about their work of describing, explaining
and predictions phenomenon are called methodology. Method comprises the
procedures used for generating collecting and evaluating data.
Data connection is an important step in any project and success of it it will be
largely depend upon how accurately you will able to collect the data and how
much time, money required to collect the necessary data.
There are two types of Data Collection methods :
i) Primary data, the data which is collected fresh first hand and for first time,
which is original in nature. It can be collected through personal interview,
questionnaire etc.
ii) Secondary data, the data which is collected from records, annual reports,
journal, books, websites are known as secondary data.

9
1.5 Limitation of the study
The major limitations of the study are:
 A small simple size of 20 respondents are taken to primary data analysis. So
I cannot draw proper inference about the respondents from the sample
size.
 I have not use modern statistics tools to analyse the data.
 due to shortage of time, I have not been able to make a deapth study.
 I could not collect data from outside of Kolkata.
 The studies based on the prevailing respondents satisfaction but there's
satisfaction may change according to time fashion need etc.
1.6 Chapter Planning
This study is divided into 4 chapters with references:
Chapter 1- Introduction
 Background
 Literature Review
 Objective of the study
 Research Methodology
 Limitation of the study
 Chapter Planning
chapter 2- Conceptual Framework
 National or The Indian Scenario
 International Scenario
 Advantage of Online Banking
 Disadvantage of Online Banking
 Features of Online Banking
 Various forms of Online Banking
Chapter 3- Data collection and analysis
Chapter 4- Conclusion and Recommendation
10
 CHAPTER – II

CONCEPTUAL FRAMEWORK
2.1 National or The Indian Scenario
 The entry of Indian banks into Net Banking
Internet banking, both as a medium of delivery of banking services and as a
strategic tool for business development, has gained wide acceptance
internationally and is fast catching up in India with more and more banks entering
the fray. India can be said to be on the threshold of a major banking revolution
with net banking having already been unveiled. A recent questionnaire, to which
46 banks responded, has revealed that at present, 11 banks in India are providing
Internet banking services at different levels, 22 banks propose to offer Internet
banking in near future while the remaining 13 banks have no immediate plans to
offer such facility.
 Products and services offered
Banks in India are at different stages of the web-enabled banking cycle. Initially, a
bank, which is not having a web site, allows its customer to communicate with it
through an e-mail address; communication is limited to a small number of
branches and offices which have access to this e-mail account. As yet, many
scheduled commercial banks in India are still in the first stage of Internet banking
operations.
Some of the banks permit customers to interact with them and transact
electronically with them. Such services include request for opening of accounts,
requisition for cheque books, stop payment of cheques, viewing and printing
statements of accounts, movement of funds between accounts within the same
bank, querying on status of requests, instructions for opening of Letters of Credit
and Bank Guarantees etc.
Banks like ICICI Bank Ltd., HDFC Bank Ltd. etc. are thus looking to position
themselves as one stop financial shops. These banks have tied up with computer
training companies, computer manufacturers, Internet Services Providers and
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portals for expanding their Net banking services, and widening their customer
base. ICICI Bank Ltd. has set up a web based joint venture for on-line distribution
of its retail banking products and services on the Internet, in collaboration with
Satyam Info way, a private ISP through a portal named as icicisify.com. The
customer base of www.satyamonline.com portal is also available to the bank. The
race for market supremacy is compelling banks in India to adopt the latest
technology on the Internet in a bid to capture new markets and customers. HDFC
Bank Ltd. with its ‘Freedom- the e-Age Saving Account’ Service, Citibank with
‘Suvidha’ and ICICI Bank Ltd. with its ‘Mobile Commerce’ service have tied up with
cell phone operators to offer Mobile Banking to their customers.
Rating of Online Banking Services
Hard to say
5%

Average
12% Good
35%
Poor
15%

Very good
15% Excellent
18%

CUMULATIVE
RATING FREQUENCY PERCENTAGE
FREQUENCY
Excellent 18 18% 18
Average 12 12% 30
Good 35 35% 65
Poor 15 15% 80
Hard to say 5 5% 85
Very Good 15 15% 100

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2.2 International Scenario

Since its inception, Internet banking has experienced strong and sustained
growth. World Bank report on leapfrogging in e-finance pointed out that the
three countries with impressive progress in information technology in this sense
are Estonia, Republic of Korea and Brazil. Creation of the world’s leading
electronic banking systems has been done at a remarkably low cost compared to
other world-class internet banks.
In the European Union, 60 million people, representing 18 percent of the
adult population, use online banking. In France, the number of online banking
accounts is recording an annual growth rate of 80 percent. However, Estonia is a
country that has become a leader in Internet banking (which now reaches 18
percent of the population), not only among Eastern European countries but in
world rankings, through a combination of easy to- use software, free-of-charge
transactions and behaviour changes resulting from the influence of the Nordic
countries’ IT culture on Estonia. A sector in which Latin America is seems to be
performing better than in other industries is online retail banking. Growth in this
area has been driven by traditional banks, which have used the online channel to
generate customer loyalty and improve their operating margins. Two Brazilian
banks, Bradesco and Bunco do Brazil; have thus achieved more than 4 million
online customers each. Mexico is another leader of Internet banking in Latin
America. It adopted legislation providing for the development of both E-
Commerce and e-finance. In Mexico, the number of online bank users more than
tripled from 700,000 in 2000 to 2.4 million in 2001, and it reached 4.5 million in
2005. One reason for the success of Latin American banks’ online ventures seems
to be the attention they have paid to providing retail customers with multiple
ways to access their accounts (Internet, telephone, wireless). However, given that
the share of the total population that actually has a bank account is relatively
small, the expansion of Latin American online banking may be facing a bottleneck.
Compared with overall Internet usage estimated at 4.4 million in Australia, the
major banks together have attracted only 1.2 million to online banking.

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2.3 Advantage of Online Banking
As financial technology progressed, traditional banks began to explore the option
of offering online services. There’s no doubt that online banking can be
convenient — whenever you turn on your computer or smart phone, your bank is
there waiting for you — but there are other advantages, and disadvantages, as
well. Here’s a look at some things you should consider when choosing between an
online or traditional bank.
 Online banks are accessible 24/7, as long as you have an internet
connection. Some online banks, such as Ally Bank, take this perk one step
further, giving you 24/7 phone access to a real-life customer service agent.
This can be extremely helpful if you don’t have access to the internet, or if
you feel you need the assistance of a human brain, rather than a computer
algorithm.
 If you need to transfer money, apply for a new loan, or perform nearly any
banking transaction, you’ll typically have to wait in line at a bricks-and-
mortar banking location. With an online bank, there’s never any waiting. As
long as you can log in, you can access your accounts, request a new credit
card, or perform nearly any banking transaction you desire without driving
down to a bank or waiting in line.
 One of the great advantages of online banking is online bill pay. Rather than
having to write checks or fill out forms to pay bills, once you set up your
accounts at your online bank, all it takes is a simple click — or even less, as
you can usually automate your bill payments. With online bill pay, it’s easy
to manage your accounts from one central source and to track payments
into and out of your account.
 Online banks don’t have to pay for things like electricity, janitorial services,
landscaping, or rent, so they can pass those savings along to customers.
Typically, this means that online banks can charge fewer fees than
traditional banks. For example, most online banks offer a free
online checking account with no deposit, along with other no-fee bank
accounts, such as IRAs. There are a number of online banks with free
checking and no minimum balance; if you’re worried about applying for an
account with bad credit, you might be able to open a bank account online
for free, no credit check required, although there might be ongoing fees.

14
2.4 Disadvantage of Online Banking
No one type of bank can be the best at everything. In spite of their many
advantages, there are some drawbacks to using online banks as well.

 In many ways, an online bank is only as good as your or their internet

connection. If there’s a power outage, or if servers go down, you might not
have any access to your account whatsoever. While some banks offer a
phone number for customer service, it might be overwhelmed if online
access is down. With a real bank, you can always find someone to talk to in
the branch.
 While many online banks are reputable and well-established, sometimes it
can be hard to feel comfortable with a bank that doesn’t have a physical
presence, particularly when large sums of money are involved. If a website
suddenly folds up, what will happen to your money? There’s also the risk of
identity theft — or actual theft — if someone gains unauthorized access to
your account via a hacked or stolen password or log-in credentials.
 Online banks might be able to transfer money between accounts or pay
bills, but you might be more comfortable with an international, bricks-and-
mortar bank if you have complex transactions. Worldwide, business-
oriented banks like Chase have global transaction capabilities, such as the
ability to send payments to more than 35 different currencies worldwide,
that online banks might not be able to muster. Without a real-world
presence, most online banks can’t even offer the services of a notary
public, which require an in-person visit and necessary for most important
financial transactions like buying a home.
 Over time, you can develop a relationship with a personal banker if you visit
a traditional bricks-and-mortar location. If you’re dealing with an online
bank, on the other hand, you’re typically handed off to an anonymous
customer service agent who is unlikely to know you from the next
customer. If you’re really in a bind, financially speaking, having a
relationship with someone who can help and who knows you well can be a
major advantage over a strictly online banking relationship.

15
2.5 Features of Online Banking
Online banking facilities offered by various financial institutions have many
features and capabilities in common but also have some that are application
specific.
The common features of all boardly into several categories:
(A) A bank customer can perform non-transactional tasks through online banking
including :
 Viewing account balances.
 Viewing recent transactions
 Downloading bank statements for example PDF format.
 Viewing images of paid cheques.
 Ordering cheque books.
 Download periodic account statements.
 Downloading applications for M banking, E-banking etc.

(B) Bank customers can transact banking tasks through online banking including :
 Fund transfers between customers linked accounts.
 Paying third parties, including bill payments and third party fund transfers
 Investment purchase or sale.
 Loan applications and transaction, such as repayments of enrollments.
 Credit card applications.
 Register utility Billers and make bill payments.
 Financial institution administration.
 Management of multiple users having varying levels of authority.
 Transaction approval process.

16
2.6 Various forms of Online Banking
1. 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. The method of the invention includes the steps of inputting a customer
banking request from among a menu of banking requests at a remote personnel
computer; receiving the request at the host computer; identifying the type of
customer banking request received; automatic logging of the service request,
comparing the received request to a stored table of request types, each of the
request type having an attribute to indicate whether the request type is capable
of being fulfilled by a customer service representative or by an automated
system; and, depending upon the attribute, directing the request either to a
queue for handling by a customer service representative or to a queue for
processing by an automated system.

2.Automated Teller Machines (ATM) :An automated teller machine or automatic

teller machine (ATM) is an electronic computerized telecommunications device
that allow a financial institution’s
customer to directly use a secure method
of communication to access their bank
account, order of make cash withdrawals
and check their account balance without
the need for a human bank teller. Many
ATMs also allow people to deposit cash or
17
cheques, transfer money between their bank accounts, top up their mobile
phones’ pre-paid account 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 achip, which contains his or her account
number. The customer then verifies their indent 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 more than 51,600 ATM’s.

3. Credit Card / Debit Card : The Credit Card holder is empowered to spend
wherever and whenever he wants with his Credit Card with in the limit 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 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 Maestro Card
or 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 rejected any transaction which exceeds the balance in his
account.

4. Mobile Banking : Mobile banking is a system that allows customers of

a financial institution to conduct a
number of financial transactions through
a mobile device such as a mobile
phone or personal digital assistant.
Mobile banking differs to mobile
payments which involves the use of a
18
mobile device to pay for goods or services either at the point of sale or
remotely, analogously to the use of a debit or credit card to effect
an EFTPOS payment.
The earliest mobile banking services were offered over SMS, a service known
as SMS banking. With the introduction of 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.
Mobile banking has until recently (2010) most often been performed via SMS or
the mobile web. Apple's initial success with iPhone and the rapid growth of
phones based on Google's Android (operating system) have led to increasing use
of special client programs, called apps, downloaded to the mobile device. With
that said, advancements in web technologies as HTML5, CSS3 and JavaScript have
seen more banks launching mobile web based services to complement native
applications. A recent study (May 2012) by Mapa Research suggests that over a
third of banks have mobile device detection upon visiting the banks' main
website. A number of things can happen on mobile detection such as redirecting
to an app store, redirection to a mobile banking specific website or providing a
menu of mobile banking options for the user to choose from.

19
 CHAPTER – III

DATA COLLECTION AND ANALYSIS

 DATA COLLECTION AND ANALYSIS
Both primary and secondary data have been used for the study for collection of
primary data questionnaire method was used secondary data is collected from
various books published articles journals and internet website.
 Time period of the study
For primary data -
For secondary data -
 Area of study
Primary data – Kolkata.
 Sampling
purposive and convenience sampling(non random sampling)
Sample design for this study data has been collected from 25 respondents of
Kolkata.
1. OCCUPATION BASIS ANALYSIS :
others student
12% 20%

employee self employed

40% 28%

OCCUPATION FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

STUDENT 5 20% 5
SELF EMPLOYED 7 28% 12
EMPLOYEE 10 40% 22
OTHERS 3 12% 25
20
2. What kind of banking do you prefer ?

12

10

0
traditional online both

TYPE OF
BANKING TRADITIONAL ONLINE BOTH
NO OF PEOPLE 5 8 12

This shows us the preference of people toward the type of banking. They prefer
to use the services of both the online and traditional banking rather than a
particular type. From this survey I came to know that out of 25 people, 5 people
prefer traditional banking, 8 people prefer online banking and 12 people prefer
both i.e. online and traditional
onal banking.

The people who are mainly involved in online banking are the people of the age
group of 20-30
30 years. They prefer online banking as they are familiar with both
the good and bad points of online banking.

21
3. Do the people think that account
account is secure in online banking ?

12

10

0
YES NO CANT SAY

OPINION
YES NO CANT SAY
NO OF PEOPLE 11 7 7

Majority of the people think that their Account is secured, but not all. Their
security concern should be eradicated. This will attract customers.

11 out of 25 people think that online is secure because of the following :

 Viewing account balances

 Viewing recent transactions
 Downloading bank statements
 Viewing images of paid cheques
 Ordering cheque books
 Downloading periodic account statements

7 out of people think that online banking is not all secured because :

 Passwords
 Phishing
 Hacking
22
4. Do you think online banking is better than traditional banking ?

14

12

10

0
YES NO CANT SAY

OPINION YES NO CANT SAY

NO OF PEOPLE 13 5 7

There are about 5 out of 25 people who don’t think online banking is not better
then traditional banking as they are not familiar with the process of online
banking. Some people think that online banking is not secure then traditional
banking. Password can be hacked etc.

There are13 out of 25 people who think that online banking is better than
traditional banking as they know the positive point of online banking. The people
know that due to online banking fast access to account can take place, payments
can be faster the usual mode etc.

23
5. How many people are happy with their online banking service
provided by their banks ?

9
8
7
6
5
4
3
2
1
0
Completely partially Fairly Not at all

HAPPINESS
Completely Partially Fairly Not at all
LEVEL
NO OF
4 9 9 3
PEOPLE

The satisfaction level of people with the online banking service of their banks has
a mixed review.

Finding : 4 out of 25 people are completely happy with their online banking. This
is due to they know the advantages or advantages of online banking and they
usually involved in internet services. And more
more over these people are basically of
the age group between 20-25 25 year.

Out of 25 people 3 are not at all happy with their online banking service because
they are less involved in internet service or they do not know how to use internet
service at all. The second reason is that the these 3 people are very frightened to
use their online service because of the threat involved in online banking like
hacking of accounts, phishing etc.

24
6. What type of transaction do you make in online banking ?

12

10

0
check balance payment transaction other

TYPE OF Check balance Payment Transfer to Other

TRANSACTION fund
NO OF PEOPLE
11 7 2 5

They utility of the online banking is service is not used to the extent is should be
and it is being majority used for the purpose of checking the balance in the
account. The reason for is low volume of transaction among the people.

25
7. Given the opportunity to shift from traditional banking to online
banking will the people prefer to do so ?

The survey was done on 30 people who were divided in the age group of 20-40
years, 41-60 years, 60 and above.

Between the age group of 20-40 years the people were ready to shift from
traditional banking to online banking. Out of these people also there were many
of them who use online banking from the day of opening of their account. No of
people in this category were 8 out of 25.

0
Ready to shift Already using online banking

ONLINE BANKING Ready to shift Already using online

banking
NO OF PEOPLE 5 3
The advantages that they were knowing about online banking were as follow :

 Viewing account balances

 Viewing recent transactions
 Ordering cheque book
 Download periodic books
 Viewing images of paid cheque
 Downloading bank statements

26
 CHAPTER – IV

CONCLUSION AND RECOMMENDATIONS

4.1 Conclusion
The people are not confident enough to weather to replay completely on online
banking. There is hesitation in the mind of people with regard to preference. So
they use both the technique of Banking i.e. Online banking and Traditional
Banking.

Because of the complexity and the awareness in the people regarding the online
banking, there is less utilization online banking services provided by the bank.

People are not completely sure whether account is completely secure in online
banking or not. Security concern is the main and the core reason why people do
not tend to use online banking.

People in India are not aware of utility of online banking and the services that can
be availed of in online banking.

Most of the Indian population are salaries employees who do not have that
volume of transaction that can be used for online transaction.

27
4.2 Recommendations
After analyzing the entire study on online banking with respect to both the
primary and secondary data the following recommendation can be put forward –

 The infrastructure for the development is not being implemented in the

way that could be beneficial.
 There are various obstacles in the banking scenario with regards to
guidelines and issues for functioning. This has led to decline in the usage of
the online banking service of the bank.
 The people having account can be urge to take up an internet banking
facility. They should be motivated rather than just being told that there
exists a service of online banking.
 There are many people who are not aware of all the benefits that they reap
out of the transaction of online banking. They should be a proper
awareness among the people about online banking.
 Most of the people do not opt for online banking due to the problems of
security concerns. Proper security software should be developed and
people should be convicted that their account are secured in online
banking.

28
 BIBLIOGRAPHY
Websites :
 www.google.com
 www.wikipedia.in
 http://www.onlinebanking.net
 http://www.banknetindia.com/banking/ibkg.htm
 http://www.onlinebanking.net/online-banking-services/
 http://www.rbi.org.in/scripts/ATMView.aspx?atmid=22
 http://www.ehow.com

Reference Books :
 Prof. B.Bhadra & A.Satpati
 Dr. P.Dhar
 PRINCIPLES OF E-COMMERCE
 AN INTRODUCTION TO E-COMMERCE written by Ramit Kumar Roy and
Debasri dey and published by elegant Publications
 E-COMMERCE written by professor Dilip Kumar Chakraborty and professor
debdulal Chatterjee and published by BB Kundu Grandsons
 INTRODUCTION TO INFORMATION TECHNOLOGY AND ITS BUSINESS
APPLICATION written by equal part and a das and published by Kali Mata
pustakalaya.

Banks :
 ICICI Bank
 State Bank Of India
 Punjab National Bank

29
 QUESTIONNAIRE

Dear Respondents,
I am a student of Netaji Nagar College, department of commerce,
and presently doing a project on “ A Study On Online Banking And Online Card
transaction In An Emerging Economy ”. I request you to kindly fill the questions
stated below and I assure you that the data generated by you will be kept
confidential.
Sarnava Chakraborty
B.COM(HONOURS) 6th Semester
Netaji Nagar Colege
 PERSONAL DETAILS

I. Name _____________________________

II. Gender: Male Female others

III. Age group: below 20 20-35 35-50 above 50

IV. Occupation _______________________________

V. Monthly income____________________________

VI. Education: Madhyamik HS Graduate Post graduate others

Q1. In Which Bank Do You Have An Account?

SBI AXIS ICICI UCO HDFC UBI DBS SC OTHERS

Q2. Why Do You Avail Of Online Banking? YES NO

Q3. Rating Of The Main Transactions.
QUESTIONS EXCELLENT GOOD AVERAGE POOR NOT APPLICABLE
FUND TRANSFER
ATM BANKING
BALANCE ENQUIRY
ONLINE FIXED DEPOSIT

REQUEST A DEMAND DRAFT

PAY BILLS
ONLINE SHOPPING
30
Q4. Are You Aware Of The Security Threats And Frauds In Online Banking And Familiar With
The Methods Of Secured Online Transactions?
YES NO CAN’T SAY

Q5. ARE YOU IN THE OPINION THAT YOUR BANK CHARGES UNNECESSARY FOR ONLINE
SERVICES?

YES NO CAN’T SAY

Q6. DO YOU THINK ONLINE BANKING IS BETTER SUBSTITUTE OF TRADITIONAL BANKING

SYSTEM?
YES NO CAN’T SAY

Q7. WHICH FACTOR DO YOU THINK RESPONSIBLE FOR NON-ACCESSBILITY OF ONLINE

BANKING BY MAJORITY OF PEOPLE IN YOUR AREA?

LACK OF AWARNESS OF PEOPLE INADEQUATE ATM SERVICES RURALAREA

LACK OF COMPUTER FACILITY LESS INTERNET

CONNECTION

LACK KNOWLEDGE OTHERS

Q8. DOES YOUR BANK UPGRADE ONLINE SERVICES REGULARLY?

YES NO CAN’T SAY

Q9. RATING OF ONLINE BANKING SERVICES.

EXECELLENT VERY GOOD GOOD AVERAGE POOR HARD TO SAY

31