BM COLLEGE OF MANAGEMENT AND RESEARCH, INDORE MAJOR

RESEARCH PROJECT

(Submitted towards the Partial Fulfillment of Master of Business Administration Awarded

by DAVV, Indore)

ON
A study on banking transactions through online portal.(with special reference to BOI)

BM College Indore

MBA III Semester

2023-2024

Project Guide Research Student

Prof. Deepika Dubey AKASH DHAKAD
REGISTER NO DS1914733
 BM COLLEGE OF MANAGEMENT AND RESEARCH, INDORE

CERTIFICATE

This is to certify that AKASH DHAKAD has undergone project entitled ―A STUDY ON
BANKING TRANSACTIONS THROUGH ONLINE PORTAL.(WITH SPECIAL
REFERENCE TO BOI)

towards the partial fulfillment of her two years Master Degree of Business Administration
(MBA) Successfully. She has carried out this project with full sincerity and dedication and the
work is original and genuine.

Director Project Guide

Dr. Vijaylaxmi Iyengar Prof. DEEPIKA DUBEY

External examiner
 BM COLLEGE OF MANAGEMENT AND RESEARCH, INDORE

DECLARATION

I hereby declare that project entitled ―A STUDY ON BANKING TRANSACTIONS

THROUGH ONLINE PORTAL.(WITH SPECIAL REFERENCE TO BOI)
” is authentic and I have put in my efforts meticulously to make this proje ct to come up to the
expectations and pragmatically viable. I also ensure that the research work done by me is
completely original and analyzed by me and have not been copied from any other source.

Research Student
AKASH DHAKAD
MBA III Semester
 BM COLLEGE OF MANAGEMENT AND RESEARCH, INDORE

ACKNOWLEDGEMENT

At the outset I extend my sincere gratitude to our Director Dr. Vijaylaxmi Iyengar for her
words of wisdom & encouragement during the MBA program.
I am sincerely grateful to my Supervisor Prof.DEEPIKA DUBEY Faculty guide BM College of
Management & Research, Indore for his generous and valuable guidance throughout my
research. Her / his constant motivation has helped me at each step in completing this thesis.
The words of gratitude are also due to honorable faculty members of the institute Prof Ragini
Hardiya , Prof. DEEPIKA DUBEY, Prof. Priya Yadav , Prof. Sonali Deshmukh , Prof. Rajendra
Sisodiya , Prof. Deepika Dubey for their words of encouragement.
I am also thankful to the librarian Ms. Vidhya Pal, Office Executive Mr. Manoj Gothwal, Mr.
Manoj Kulkarrni, Computer lab-incharge Mr. Govind Rajput, who has extended their co-
operation during my research. From the bottom of my heart,
I am grateful to my respected Parents for providing moral support and inspiration every time.
Finally, due to the blessings of almighty God, I could complete this research on time.

Research Student
AKASH DHAKAD
MBA III Semester
 BM COLLEGE OF MANAGEMENT AND RESEARCH, INDORE

PREFACE
The research provides opportunity to a student to demonstration knowledge, skill and
competencies during the project. The training project help to know the problem in the
organization and to suggest them how to get rid of those problem although research have tried
my level best to prepare this report an error free every effort has been made to offer the most
authenticate position with accuracy to the topic; second will contain the objectives of the project.
The middle part has been giving a brief overview about the organization and the methodology to
be used in the project. Fourth chapter is the most important part as it will contain the analysis od
data. Last part has been dealing with the finding and suggestion.

Chapter One: - Deals with the conceptual framework related TO A STUDY ON BANKING
TRANSACTIONS THROUGH ONLINE PORTAL.(WITH SPECIAL REFERENCE TO BOI)
S

Chapter Two: - Deals with the company profile of BANK OF INDIA

Chapter Three: - Deals with the objectives of the study which covers the main motive of the
study and the main reason for the conduct of the study.
Chapter Four: - Deals with the review of literature which covers the early researches on the topic
done by research and the conclusion drawn by them will be used for further references.
Chapter Five: - Deals with the Research Methodology to be used by the researcher to analysis the
data and complete the study. It provides details related to the tools for collection and tools used
for data analysis.
Chapter Six: - Deals with the Data analysis of the study.
Chapter Seven: - Deals with the main finding of the study which is drawn after the conduct of the
study.
Chapter Eight: - Deals with the Limitation of the study.
Chapter Nine: - Consist of recommendations for future studies.
Chapter Ten: - Consist of conclusion of the study.

AKASH DHAKAD
MBA III Semester
 BM COLLEGE OF MANAGEMENT AND RESEARCH, INDORE

INDEX

S. No. Contents Page No.

Certificate (i)
Declaration (ii)
Acknowledgement (iii)
Preface (iv)
List of Graphs (v)
Chapter 1 Introduction and conceptual framework
Chapter 2 Company Profile
Chapter 3 Objective of the study
Chapter 4 Review of literature
Chapter 5 Research methodology
(a) Meaning of research

(b) Research Process

(c) Research Design

(i) The Study

(ii) The Design

(iii) The Sample
(iv) The Tools
Chapter 6 Data Analysis and Interpretation
Chapter 7 Main findings of the study
Chapter 8 Limitations of the Study
Chapter 9 Recommendations of the study
Chapter 10 Conclusion of the study
Bibliography and reference
Annexure
(a) Questionnaire
(b) Respondent sheet
(c) Data analysis sheet
 PAGE
S.NO. LIST OF GRAPHS NO.
1 Gender
2 Age
3 Income
4 Education
5 Occupation
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
1) Introduction:
With the increased thrust on financial inclusion, customer protection and surge in
customer grievances relating to unauthorized electronic banking transactions, Reserve
Bank of India notification on Customer Protection — Limiting Liability of Customers in
Unauthorized Electronic Banking Transactions. (Ref.: RBI/2017- 18/15
DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 06, 2017), requires Banks to
formulate a Board approved policy on customer protection and compensation in cases of
unauthorized electronic banking transactions.

The policy defines the criteria for determining the customer liability based on customer's
negligence, Bank's negligence or deficiency lies elsewhere in the system, the time period
of reporting of unauthorized transaction to the bank, inter- alia includes aspects of
customer protection, covering the mechanism for customer awareness on the risks and
responsibilities involved in electronic banking transactions.

2) Objective of the policy:

Bank of India is committed to provide better and safe customer service experience to the
customers. The aim of this policy is to ensure transparency and non- discrimination with
the customers on the mechanism for customer compensation for unauthorized banking
transactions, customer liability for the unauthorized banking transactions and creating
customer awareness on the risks and responsibilities involved in electronic banking
transactions.

3) Scope and Coverage:

The Policy covers electronic banking transactions broadly divided in two categories as
under:

a) Remote/ online payment transactions (transactions that do not require physical

payment instruments to be presented at the point of transactions e.g. internet
banking, mobile banking, card not present (CNP) transactions, Pre-paid Payment
Instruments (PPI), etc., and
 b) Face-to-face / proximity payment transactions (transactions which require physical
payment instruments, e.g. card or mobile phone to be sent at the point of transaction
e.g. ATM, POS, etc.)

The policy excludes electronic banking transactions effected on account of error committed
by a customer (e.g. NEFT/ RTGS/ IMPS, etc. carried out to an incorrect payee or amount),
transactions done under duress, claims due to opportunity loss, reputation loss, other
incidental costs or collateral damage.

This policy is applicable only to those persons/ entities, who are the customers (Individual/
Non individual) of the Bank as account holder, card holder (credit/ prepaid), etc.

4. Liability of a Customer:
The extent of liability of Customer in Unauthorized Electronic Banking Transactions is as
under :

Zero liability of customer: Customer shall be entitled to reimbursement upto full

loss i.e. direct financial loss (no liability on customer) in the following events -

i. Contributory fraud / negligence / deficiency on the part of the Bank (irrespective

whether or not the transaction is reported by the customer).

ii. Third party breach where the deficiency lies neither with the customer nor with the
Bank but lies elsewhere in the system and the customer notifies transaction as
unauthorized to the bank within three working days of receiving the
communication from the bank regarding the said transaction.

Limited Liability of customer: In cases where responsibility for unauthorized

banking transaction lies neither with the customer nor with the bank, but lies
elsewhere in the system and when there is delay of four to seven working days
on the part of customer in notifying/reporting to the Bank of transaction as
unauthorized, even after receiving of the communication/ intimation from the Bank,
the liability of the customer per transaction shall be limited to the transaction value
or amounts mentioned below in Table 1, whichever is lower-
 Table1

Maximum Liability of Customer per transaction in case of unauthorized electronic

banking transaction where responsibility is neither with the customer nor with the
bank but lies elsewhere in the system and when there is delay of four to seven
working days on the part of customer in notifying/reporting to the Bank of
transaction as unauthorized, even after receiving of the communication/ intimation
from the Bank (Beyond the stipulated three days).

Type of Account Maximum Liability

 Basic Saving Bank Deposit Accounts

5,000
 All other Saving Bank accounts

 Pre-paid Payment Instruments/ Gift Cards of the Bank

 Current/ Cash Credit/ Overdraft Accounts of MSMEs

 Current/ Cash Credit/ Overdraft Accounts of Individuals with
10,000
annual average balance (during 365 days preceding the incidence
of fraud)/ limits up to Rs.25 lakh

 All other Current/ Cash Credit/ Overdraft Accounts

25,000
 Credit Cards with limit above Rs.5 lakh

Complete liability of Customer / No Compensation to Customer:

i. In cases where the loss is due to negligence on the part of the customer, where
customer has shared the payment credentials, in whatever form or due to improper
protection on customer devices like mobile / laptop/ desktop leading to malware / Trojan
or Phishing / Vishing attacks or due to non-blocking of mobile SIM on deactivation by
the fraudster or where the customer was aware of fraud.

The customer shall be liable to bear the entire loss until the customer reports unauthorized
transaction to the bank. Any loss occurring after reporting of unauthorized transaction shall be
borne by the bank.
 ii. In cases where the responsibility of unauthorized electronic banking
transaction lies neither with customer nor with the bank, but lies elsewhere in
the system and when there is delay on the part of customer in reporting
transaction as unauthorized to the bank after seven working days from receipt
of communication from the Bank.

Overall liability of the customer - where the deficiency lies neither with the bank
nor with the customer but lies elsewhere in the system, is summarized in the Table-2
as under:

Table-2 (Summary of customer's Liability)

Time taken to report the fraudulent
transaction from the date of receiving the
communication
Within 3 working days
Within 4 to 7 working days
Beyond 7 working days
Customer's Liability in
Zero liability
The transaction value or the amount
mentioned in Table1, whichever is lower
Complete liability of customer / No
Compensation of customer.

The number of working days mentioned in table 2 shall be counted as per the working schedule
of the home branch of the customer excluding date of receiving communication.

Reversal Timelines for Zero Liability / Limited Liability of customer:

i. Bank shall afford value dated shadow credit (where the amount reversal shall be kept
under lien and will not be permitted to be withdrawn by the customer) of the amount
involved in unauthorized transaction to the customer account within ten (10) working
days from the date of reporting/ notifying of electronic banking transaction as
unauthorized by the customer.

ii.Bank shall resolve the complaint within ninety (90) days from the date of receipt of
communication regarding unauthorized electronic banking transaction either by
releasing the eligible compensation amount (as per exhibit of para 4.1 and para 4.2
above) for customer use or by establishing customer negligence and recover the shadow
credit amount.

5. Bank's Roles and Responsibilities:

i. Bank shall ensure that customer protection policy is available on the Bank's website
and at branches for the general awareness of public on electronic banking transactions
and make available ready reference to the customers.

ii. Awareness on safe usage of electronic banking transactions by the customers shall
be provided by the Bank through sharing of Information/ advisories on Safe Banking
Practices through emails, posters, pamphlets, notice board at branches, ATM outlets
and also on Bank's website, Twitter, etc.

iii. Bank shall communicate to the customers for mandatorily registration of their mobile
number to enable the Bank to intimate through SMS alerts for all debit electronic banking
transactions and through email also where valid email Id has been registered with the
Bank.

iv. Bank will enable and facilitate various modes of communication to customers for
reporting of unauthorized transaction through SMS, email, website, toll free number,
IVR, Phone Banking or through the Bank branches.

v. Bank shall acknowledge the customer complaint on reported unauthorized electronic

banking transaction with unique customer complaint number; date and time of receipt of
customer's notification. Bank will take immediate steps to prevent further unauthorized
electronic banking transactions in the said account or card.

vi. Bank shall ensure to resolve customer's complaint within a timeline of ninety days
from the date of receipt of customer complaint on electronic banking transaction as
unauthorized. Bank shall either release the eligible compensation amount (as per exhibit
of para 4.1 and para 4.2 above) to customer for use or recover the shadow credit amount
by establishing customer negligence.

vii. Bank shall compensate the customer as per exhibit of para 4.1 and para 4.2 as
stated herein above, if bank fails to resolve the customer complaints within ninety days
from the receipt of customer complaint.
Bank reserves the right to take suitable recovery and / or penal action against the customer,
where it has been established that customer has falsely claimed or disputed a valid transaction.

viii. Bank reserves the right to suspend the facility to transact electronic banking transaction
on receipt of complaint of banking transaction as unauthorized to avoid any further loss to
the customer.

ix. Bank reserves the right to suspend the facility to transact electronic banking transaction
on receipt of complaint of banking transaction as unauthorized to avoid any further loss to
the customer.

x. Bank may with prior notice restrict customer facility to execute electronic banking
transactions including ATM transactions, in case of non-registration of mobile number
for delivery of SMS alerts.

xi. The Digital Banking Department shall report the customer liability cases to the
Customer Service Committee of Board every quarter. The reporting shall include
volume/number of cases and the aggregate value involved and distribution across
various categories of cases.

xii. Technology related Fraud Monitoring Group of bank shall periodically review the
unauthorized electronic banking transactions reported by customers or otherwise.
Committee shall also review the action taken, the functioning of the grievance redress
mechanism and suggest appropriate measures to improve the systems and procedures.

6. Obligations of Customer:

Customer is bound by the following obligations with respect to banking activities related to
Electronic Banking Transactions-

i. Customer must mandatorily register valid mobile number and email ID with the bank
and access the alert, messages, emails on real time basis.

ii. Customer must intimate the bank immediately on change of mobile number, email ID
for updation in the Account/ Customer ID along with valid documentary evidence. Any
unauthorized transaction arising out of this delay will be construed as customer liability.
iii. Customer should also notify the Bank of changes of registered contact address and
other details at the earliest.

iv. Customer shall consent and authorize the bank to block the credit card/ debit card/
net banking/ account in their own interest to minimize likelihood of additional loss.

v.Customer must lodge First Information Report (FIR) with police station/ cyber-crime
police for the unauthorized electronic banking transaction.

vi. Customer should provide following documents to the parent branch to claim
compensation for unauthorized electronic banking transaction

a) Claim Form along with Customer letter/ application on details of

unauthorized banking transaction.
b) Copy of FIR lodged for unauthorized electronic banking transaction.

c) Proof of success/ failure of transaction.

d) Copy of all pages of Passport & Visa, if applicable.

e) Undertaking for restoration of loss amount upto Rs. 25,000/- and Affidavit in
case where loss amount is more than 25,000/-.

vii. Customer should co-operate with the Bank’s investigating authorities and provide all
required assistance to resolve the complaint within the stipulated timelines of ninety
days.

viii. Customer must not share sensitive information (such as Debit/Credit Card details
& PIN, CVV, Net Banking ID & Password, OTP, Transaction PIN, Challenge Questions)
to any person/ entities, including bank staff.

ix. Customer must protect their device as per advisories specified on the Bank's website,
including updation of latest antivirus software on the device (Device includes smart
phone, feature phone, laptop, desktop and Tab).

x. Customer shall abide by the "Do's and Don'ts" do tips and safeguards mentioned on
the Bank's website on Secured Electronic Banking Transactions.

xi. Customer should periodically change passwords of Debit Card/ Credit Gard/ Internet
banking, etc. on a regular basis.
xii. Customer should scrutinize the transaction details/ entries of passbook/ bank
statement and/or credit card statement and intimate the bank immediately, in case of any
discrepancy.

7. Intimation to the customer

Communication to the Customer as referred to in the policy includes SMS/ e-mail alerts sent to
the customers on their registered mobile number/ e-mail ID and also includes any other means
of intimation like details of transactions updated through passbook printing, statement of
account, mini statement, etc. received by/ generated by the customer.

In proving so, it will be sufficient if the communication has been made as above irrespective of
whether customer has read through the SMS/ e-mail alert or the updated entries in passbook/
account statement/ mini statement, etc.

8. Reporting of an Unauthorized Electronic Banking Transaction by customer

Reporting of an Unauthorized Electronic Banking Transaction by the customer to Bank is defined

as date and time on which customer has reported the unique complaint to the bank i.e. from the
time and date of receipt of first of first communication as above, whether by SMS or by e-mail or
by updating the passbook or by obtaining/ generating account statement or by any other means.
Date and time of reporting will be construed as per Indian Standard Time.

9. Proof of burden of customer liability :

Bank shall provide logs / OTP delivery status/ SMS Alerts status and digital evidence on usage
of cards/ Login and Transaction Password/ PIN/ OTP / IP Address/ Mobile Applications
details, etc. as proof of customer's consent/ involvement/ negligence in executing electronic
banking transactions. Content of complaint, FIR, time of transaction and time of reporting of
transaction as unauthorized will also have significance on proof of burden of customer liability.
The third party frauds shall be considered, where deficiency lies neither with the Bank nor
customer but elsewhere in the system, viz. Application frauds, Account takeover, Skimming/
Cloning and External Frauds/ Systems like ATMs / Mail servers etc. have been compromised.
10. Force Majeure –

Notwithstanding anything contrary which contains in the policy, the bank shall not be
liable to compensate customers for delayed resolution of customer complaint beyond
the specified period of ninety days, if some unforeseen event (including but not limited
to civil commotion, sabotage, lockout, strike or other labour disturbances, accident, fires,
natural disasters/ calamities or other "Acts of God", war, damage to the bank's facilities
or of its correspondent bank(s), absence of the usual means of communication or all
types of transportation, etc. beyond the control of the bank prevents from performing its
obligations within the specified service delivery parameters.

11. Amendment/Modification of the policy –

This Policy is subject to annual review to be undertaken by HO-Digital Banking
Department in consultation with other functional departments .The policy shall be
reviewed annually or at an earlier date, as required by the Bank.
 CHAPTER – II

REVIEW OF LITERATURE

There have been a lot of studies conducted in the field customer satisfaction

towards banking services both at national and international level. Some of the

previous related research studies are given below.

International Studies
Arne Floh Horst Treiblmaier1 investigated the importance of antecedents of

online loyalty such as trust, quality of the Web site, quality of the service and

overall satisfaction. Rather than investigating which factors drive customers to use

online banking instead of offline banking, his study addresses the problem of how

to keep customers online and loyal to a specific supplier. A survey among more

than 2,000 customers of an Austrian online bank was conducted and a structural

equation modeling approach was used to gain important insights into how

customer retention in the online banking business can be ensured. Satisfaction and

trust were identified as important antecedents of loyalty. Additionally, the

moderating role of consumer characteristics (gender, age, involvement, perceived

risk and technophobia) was supported by the data.

Ahasanul Haque, et.al,2 their study investigated the factors determining the

Malaysian banking consumers’ perception on e-banking transactions. A research

framework was developed to testify the statistical relationships among consumer

perceptions on e-banking transaction. Factor analysis was performed to extract and

decide on the number of factors underlying asset of measured variables of interest.

Structural equation model (SEM) was tested to anticipate the effects of the

explanatory variables. This study showed that only protected transaction, have

significant impact on consumers’ perception about e-banking security, followed by

service quality and regulatory frame work issues. This study offered an insight into

e-banking in Malaysia, which has not previously been investigated and at the same

time, statistical tests significance makes this study a potential cornerstone for

future research.

Kari Pikkarainen, et.al,3 their study aims to test and validate the End-User

Computing Satisfaction (EUCS) model in order to investigate online banking users'

satisfaction with the service. A survey (n=268) was carried out using convenience

sampling. An exploratory factor analysis followed by a confirmatory factor

analysis run in LISREL 8.7 is used to test the validity of the model in an online

banking context. The survey results support three constructs (content, ease of use,

accuracy) from the original model, indicating that the modified EUCS model

labeled EUCS2 can be utilized in analyzing user satisfaction with online banking

among private customers. Findings of the study indicate that banks could improve

end-user computing satisfaction with online banking by concentrating on the three

constructs obtained from the analyses. Moreover, the results indicate that banks

can increase satisfaction of online banking services by personalizing the service,

allowing easier and more convenient use experience.

 Nath, Ravi and Schrick Paul,4 examined bankers' views on providing

banking services to customers using the web in Unites States. Specifically, it

addresses issues such as the strategic need for Internet banking, its effect on

customer-bank relationships, and customers' experiences in Internet banking. Data

collected from 75 banks show that most banks do not yet offer full-fledged Internet

banking. However, most have plans to do so. Furthermore, bankers see Internet

banking as a strategic opportunity that can reduce transaction costs, enhance

customer service, increase the customer base and improve cross-selling

opportunities. Also, Internet banking is perceived more favorably by banks that

offer it compared to those that do not.

Mohammed Hossain and Shirley Leo,5 the purpose of their study is to

evaluate the service quality in retail banking in the Middle East in general, and

Qatar in particular, based on different levels of customers’ perception regarding

service quality. This is an analytical study based mainly on the primary data

collected through a scientifically developed questionnaire. The questionnaire have

been personally administered on a sample size of 120, chosen on a convenient

basis from four Qatari banks, i.e. Qatar National Bank, Doha Bank, Qatar

International Islamic Bank, and Arab Bank. The questionnaire has been designed

on the basis of the study of previous scholars such as Berry et al., Parasuraman et

al., Zeithaml and Bitner, and Stafford. The result indicates that customers’

perception is highest in the tangibles area and lowest in the competence area. They

suggested that, in order to achieving higher levels of quality service in retail

banking, banks should deliver higher levels of service quality and in the present
context customers’ perceptions are highest in the level of infrastructure facilities of

the bank, followed by timing of the bank, and return on deposit. Owing to the

increasing competition in retail banking, customer service is an important part and

bank managers should be rethinking how to improve customer satisfaction with

respect to service quality.

M. Sadiq Sohail and Balachandran Shanmugham,6 examined the current

trends in the e-commerce revolution that has set in motion in the Malaysian

banking sector and reports on an empirical research that was carried out in

Malaysia to study the customers’ preference for electronic banking and the factors,

which they considered influenced the adoption of electronic banking. Results based

on the analysis of data relating to 300 respondents indicate that while there is no

significant differences between the age and educational qualifications of the

electronic and conventional banking users, some differences exists on other

demographic variables. Analysis further revealed that accessibility of Internet, a

wareness of e-banking, and customers’ reluctance to change are the factors that

significantly affected the usage of e-banking in Malaysia.

R. A. Gbadeyan7 examines the customers’ choice of banks is influenced by

the quality of e–banking services provided. Stratified sampling was used; while the

survey Instrument was a developed Questionnaire comprising open ended and

Likert type of questions. The Likert type questions have a 4 point scale (indicating

1 = very comfortable and 4 = uncomfortable) divided into two (2) sections:

personal details and customers’ e-banking preference in Sierra Leone. The

instrument contained 36 items and was administered to about 400 respondents,

while 360 completed and returned their Questionnaire. The statistical techniques

used for the analysis were the Chi–Square and correlation. The Chi–Square

analysis revealed that the quality of e–banking services offered by banks have

significant influence on their customers at 95%, degree of freedom. He

recommends that various measures should be put in place to ensure more security

such as installation of encrypted software, verification system of customer’s

identification cards, frequent change of password, examining test questions and

using mixed password such as the use of alphanumeric amongst others. The study

concludes that e –banking has become important phenomenon in the banking

industry and it will continue as more progress and innovations are made in

information technology

Huam Hon Tat and Khalil Md Nor,8 their study investigates predictors of

intention among current users to continue using the services. Questionnaires were

distributed to 210 residents in Klang Valley, Malaysia, of whom 204 (97.1%)

responded to the survey. The findings demonstrated that, among the predictors

tested, trust was found to be the strongest predictor of intention to continue using

Internet banking, followed by compatibility and ease of use. Recommendations to

Internet banking service providers and discussions for future study are provided.
 Booi Hon Kam and Hernan Riqulme,9 they examined a sample of

Australian Internet Banking users based on their frequency and length of usage.

The results showed that as customers become more acclimatized to Internet

Banking, they use these services more often. Further, daily and frequent Internet

Banking users are more pleased with "ease of use" and "aesthetics" and tend to use

Internet Banking more for electronic fund transfer and foreign exchange

transactions than the less frequent users. The findings suggested that banks need to

develop more customized services since there are distinct market segments with

different banking requirements.

Lim Yik Ming,10 in his study he developed and empirically tested a

conceptual model of the impact of internet banking service quality on customer

satisfaction and behavioral intentions. Based on the relevant literature review, a

questionnaire was designed and administered to 300 users of internet banking in

Mauritius. The findings revealed that customers' perceptions are consistently lower

than their expectations and the most dissatisfied dimension was reliability. It was

further found that reliability and security was perceived as the most important

dimensions in internet banking transactions that influences satisfaction and

behavioral intentions. Customer satisfaction was found to mediate the relationship

between customer behavioral intentions.

 CHAPTER – III
E-BANKING SCENARIO IN INDIA

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

Electronic banking is an activity that is not new to banks or their customers.

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

Many of the banks like ICICI, HDFC, IndusInd, IDBI, Citibank, Global
Trust Bank (GTB), Bank of Punjab and UTI were offering E-banking services.
Based on the above statistics and the analysts’ comments that India had a high
 growth potential for e-banking, the players focused on increasing and improving
their E-banking services. As a part of this, the banks began to collaborate with
functions online.

E-banking is defined as the automated delivery of new and traditional

banking products and services directly to customers through electronic, interactive
communication channels. E-banking includes the systems that enable financial
institution customers. Individuals or businesses, to access accounts, transact
business, or obtain information on financial products and services through a public
or private network including the Internet, Customers access e-banking services
using an intelligent electronic device.

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

The Global E-Banking Scenario

The banking industry is expected to be a leading player in e-business.
While the banks in developed countries are working primarily via Internet as non-
branch banks, banks in the developing countries use the Internet as an information
delivery tool to improve relationship with customers. Banks have established an
Internet presence with various objectives, most of them arousing the Internet as a
new distribution channel. Financial services, with the use of Internet, may be
offered in an equivalent quantity with lower costs to the more potential customers.
There may be contacts from each corner of the world at any time of day or night.
This means that banks may enlarge their market without opening new branches.
The banks in the US are using the Web to reach opportunities in three different
categories: to market information, to deliver banking products and services, and to
improve customer relationship.

In Asia, the major factor restricting growth of e-banking is security, in spite

of several countries being well connected via Internet. Access to high-quality e-
banking products is an issue as well. Majority of banks in Asia are just offering
basic services compared with those of developed countries. Still, e-banking seems
to have a future in Asia. According to McKinsey survey, e-banking will succeed if
the basic features, especially bill payment, are handled well. Bill payment was the
most popular feature, cited by 40 percent of respondents of the survey. However,
providing this service would be difficult for banks in Asia because it requires a
high level of security and involves arranging transactions with a variety of players.

In India, approximately one percent of high and middle-income group

banking customers conducted banking on the Internet in 2000 compared to 5 to 6
percent in Singapore and South Korea. In 2001, a Reserve Bank of India survey
revealed that more than 20 major banks were either offering e-banking services at
various levels or planned to do so in the near future. Some of the private banks
included ICICI Bank, HDFC Bank, IndusInd Bank, IDBI Bank, Citibank, Global
Trust Bank, Bank of Punjab and UTI Bank. In the same year, out of an estimated
0.9 million Internet user base, approximately 17 percent were reported to be
banking on the Internet. The above statistics reveal that India does have a high
growth potential for e-banking. The banks have already started focusing on
increasing and improving their e-banking services. As a part of this, the banks
have begun to collaborate with various utility companies to enable the customers to
perform various functions in online.

Majority of the banks in the US were offering e-banking services.

However, large banks appeared to have a clear advantage over small banks in the
range of services they offered. Some banks in the US were targeting their Internet
strategies towards business customers. Apart from affecting the way customers
received banking services; e-banking was expected to influence the banking
industry structure. The economics of e-banking was expected to favour large banks
because of economies of scale and scope, and the ability to advertise heavily.
Moreover, e-banking offered entry and expansion opportunities that small banks
traditionally lacked.

In Europe, the Internet is accelerating the reconfiguration of the banking

industry in to three separate businesses: production, distribution and advice. This
reconfiguration is being further driven by the Internet, due to the combined impact
of; the emergence of new, more focused business models, new technological
capabilities that reduces banking relationship and transaction costs and high degree
of uncertainty over the impact that new entrants will have on current business
models.

Though e-banking in the Europe is still in the evolutionary stage, it is very

clear that it is having a significant impact on traditional banking activities. Unlike
in the US, though large banks in the Europe have a competitive edge due to their
ability to invest heavily in new technologies, they are still not ready to embrace e-
banking. Hence, medium-sized banks and start-ups have an important role to play
on the e-banking front if they can take concrete measures quickly and effectively.
The E-Banking Trends
Convergence is one of the clear visible trends in the banking industry.
Here, convergence does not mean offering banking, broking and insurance services
under one corporate name through the Internet. It covers different dimensions,
including channel delivery, sales, culture, back-office processes, and the
knowledge management infrastructure all being integrated via Internet. Few banks
take these different dimensions into consideration. Instead, they view convergence
purely as a product-centric development that will enable them to cross-sell
products. A strategy that does not go beyond product convergence is bound to have
some limitations. For example, imagine a situation where customer service
personnel in a so called `converged' bank is required to answer banking, brokerage,
and insurance questions coming through multiple channels including the Internet,
branches, call centers, or ATMs. This bank is unlikely to succeed since, though it
has expanded the product line, it has not made any efforts to broaden the skill sets
of the personnel who support these channels.

Effective knowledge management is the key to the e-business success of

converged banking institutions. However, this requires high level of cross-
organizational cooperation and information sharing. An effective knowledge
management system will vastly improve the institution's ability to know its
customers. Robust customer information management systems at the front-end,
coupled with efficient fulfillment processes, can enable banks to shorten the
delivery time of their products and services. Successful convergence will help
them in the development of a seamless supply chain that will be transparent to the
customers.

Another trend in e-banking is a shift of focus of banks from being product-

centric to customer-centric. Access to the Internet has put wealth management
decisions and demand-side technology in customers' hands, and they can dictate
the types of products and services they require. While the Internet has enabled
banks to deliver desired products/services more quickly and inexpensively, the
challenge for them is to enhance customer touch using e-channels, which is very
important for client retention.

To succeed on the Internet, banks must continually differentiate them from

their competitors, broaden their market and provide value through their products
and services. For example, Wells Fargo had shifted 1.4 million of its traditional
banking customers online within five years of the development of its transactional
website. However, the company had maintained its Internet strategy as a
complement to existing channels and had found that its e-banking customers were
more than 50 percent less likely to leave the bank than non-Internet customers. The
bank continued to enter new alliances and expanded its web offerings to maintain
its dominant position.

Finally, developing just a me-too website would not work for banks.
Several banks are creating electronic financial communities in which customers
assemble to present and pay bills while satisfying other financial and informational
needs. By bringing consumers and vendors together at one site, financial
institutions can leverage the trust, clients have in them, and act as the intermediary
to ensure billers get paid and consumers get satisfactory services. Last but not the
least, banks may conduct periodical surveys and take customer views on the
simplicity and ease of operation of their websites and other e- banking initiatives.

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 percent of over the counter banking in case of Internet banking. Thus, the
Indian banking system is seeing a fabulous change in the quality of service
provided by them. Technology is the root of this change, which is implemented by
the banks’ to win more business from customers. Almost all the private sector
banks are moving towards e-enabling their existing products. HDFC Bank and
ICICI Bank have taken a lead in introducing e-banking in India.

Internet banking starts from migrating existing products and services to the
internet. This started initially with simple functions such as getting information
about interest rates, checking account balances and computing loan eligibility.
Then the services were extended to online bill payment, transfer of funds between
accounts and cash management services for corporates. Recently, banks started
setting up payment gateways for B2B and B2C transactions. This is to facilitate
payment for e-commerce transactions by directly debiting bank accounts or
through credit cards. Banks can earn a commission based income, on the
transaction or sale value resulting in higher income. This could be more than the
revenues they can generate from credit card transactions.

Private sector banks have leveraged the Internet effectively in taking away
the customers from public sector banks and significantly increased their revenue
potential. Internet banking is just one manifestation of these banks’ technological
capabilities. They have a complete automation, an electronic customer database,
real time transaction processing capabilities and the latest technological platforms.
Management of these banks is very focused in using technology as a key
competitive tool. The capability of the management is also visible in terms of their
profitability. Among the private sector banks HDFC Bank and ICICI Bank have
excellent returns on equity compared to their peers in the industry.
 These banks commenced operations few years and have negligible excess
in terms of branches and employees. Therefore unlike most other banks around the
world, e-banking is not an added cost for them. In fact it is expected to contribute
significantly to their revenues and profits in years to come.

The distribution of banking business in India is highly skewed both

geographically and in terms of customer segment. Geographically the top 100
centers account for around 70 percent of the loans disbursed. This are expected to
account for mostly early Internet users. In terms of customer segment, key focus on
the asset side is the corporate sector. This segment accounts for a high share of
profits of banks and is likely to be an early adapter to the Internet. On the liability
side Internet banking is expected to boost customer acquisition and profitability
significantly in the top corporate segment and in the urban high/middle income
retail segments.

Apart from e-banking, future prospects of e-commerce is also strong as it is

set for explosive growth rates. For e-commerce to take off there is a need for real
time financial intermediation and there are very few banks offering this in India.
The right combination of customer relationship and technological competency is
required to dominate the financial intermediation of e-commerce. Who else than
private sector banks can provide such services? They are all set to lead the segment
with a marginal competition from foreign banks. Going forward, as the share of e-
commerce in the economy increases, these banks should be able to move up their
market share apart from generating higher fee based income.

But one does wonder what difference e-banking make with only 22 percent
of the Internet uses globally utilizing e-banking services. In India also the
penetration is less than 1 percent. It is not all win-win case for Internet banking in
India. A number of uncertainties surround e-banking and e-commerce ventures.
Among the others, hurdles like low Internet penetration, security issues, tax
considerations and credit issues continue to depress the growth of the segment.
Even if the government has passed the cyber laws, still there is a lack of clarity
about legislative aspects governing the sector and the effectiveness of the
administration to track & punish cybercrimes. It all depends on the ability of banks
to enter these businesses successfully.

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 competitor elsewhere. 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 the latest technology.

Mediums of E-Banking
The medium of e-banking services offered by the banking industry is
discussed below:

Various Products and Services

Electronic banking, also known electronic fund transfer (EFT), uses
computer and electronic technology as a substitute for checks and other paper
transactions. EFTs is initiated through devices like cards or codes that let customer,
or those customer authorize, access your account. Many financial institutions use
ATM or debit cards and Personal Identification Numbers (PINs) for this purpose.
Some use other forms of debit cards and personal Identification Numbers (PINs)
for this purpose. Some use other forms of debit cards such as those that require, at
the most, your signature or a scan. The federal Electronic Fund Transfer Act (EFT
 Act) covers some electronic consumer transactions. Following are the electronic
medium by which services are generally provided by the banks as a part of e-banking
services.
1. Internet Banking
2. ATM (Automatic Teller Machine)
3. Phone Banking
4. Mobile Banking
5. Payment Cards (Debits/Credit Card)

All the above mediums provide services, which can be, also known as ―any time
anywhere banking‖. This facilitates the customer of the bank to operate their account
from any corner of the world, without visiting local or any subsidiary branch of their
banks. Efforts are made by the bank not only to provide the facility to the customer, but
also to reduce the operational cost of the bank by providing e-banking services. So with
this, banks have to employ less staff and still would be able to deliver service to the
customer, round the corner.

Internet Banking
Net banking is a web-based service that enables the banks authorized customers
to access their account information. It allows the customers to log on to the banks
website with the help of bank’s issued identification and personal identification number
(PIN). The banking system verifies the user and provides access to the requested
services, the range of products and service offered by each bank on the internet differs
widely in their content. Most banks offer net banking as a value-added service. Net
banking has also led to the emergent of new banks, which operate only through the
internet and do not exists physically, Such banks are called ―virtual‖ banks or ―Internet
Only‖ banks.
 CHAPTER – IV
AWARENESS AND UTILITY OF E-BANKING SERVICES

Introduction

The traditional provision of financial and banking services and products

is being replaced with innovative ways of providing these services. Such an
innovative way is the electronic banking. Technology has enabled a wide array
of banking products and services being made available to retail and wholesale
customers through electronic distribution channels. The banks in India provide
wide range of services through electronic banking. With the introduction of
electronic banking, banking operations have become faster, accurate and time
consuming. E-banking has brought to the customers the much demanded
convenience, but customers may or may not aware of the various services
offered within each e-banking product. The banks providing e-banking services
need to provide necessary information regarding their products and services to
their customers. The growth and development of any product depends upon its
usage by the customer. In the same way the development of e- banking products
depends upon the utilization of such products by customers. The awareness and
utilization are the two important factors or measurements to measure the
penetration of e-banking products.

This chapter discusses to test whether the e-banking customers are aware
of the services provided through e-banking products, or not, if aware whether
they utilize it or not and if there is any association between awareness and
socio-economic profile of the customers and also between utilization.

The e-banking products which provide multiple services are only taken
for analyses such as ATM cum debit card, credit card, Internet banking, mobile
banking and any branch banking. The services of each product have been
classified in to groups. Based on the classification, customers’ awareness and
utilization were evaluated by using yes/no pattern, giving one point for yes
response and zero for no response. Multiple response analysis has been used to
analyze the awareness and utilization of e-banking services by the customers.
CATEGORIES OF E-BANKING PROEUCTS AND SERVICES

The services of e-banking products were categorized under the following heads
for analysis purpose.

I. ATM – cum – Debit Card

a) Convenience services at ATM ; (8 services)

(1) Balance enquires (2) Withdrawal of cash (3) Deposit of Cash/Cheque
(4) Obtain statement of account (5) Cheque book request (6) Change
of PIN
(7) Fast cash (8) Shared ATM.

b) Value added service at ATM (9 Services)

(1) Fund transfer between same bank/branch (2) card to card transfer (3)
Card to account transfer (4) Credit card bill payment (5) Insurance
payment (6) Holy and Trust Donation (7) Educational fee payment (8)
mobile top-ups
(9) Air ticket payment.

c) Debit card services at POS : (6 Services)

(1) Payment for purchases at POS (2) SMS alert on POS transactions
(3) Cash withdrawal at POS (4) Attractive discount (5) Surcharge
waiver (6) Reward points.

d) Other Services (6 services)

(1) Operate multiple account with single debit card (2) Personal accident
cover (3) Lost card liability cover (4) purchase protection (5) Online
utility bill payment
(6) online purchases.

II. Internet banking

a) Convenience services (12 servicers)

(1) Access account information (2) Bill payment and presentment (3) Bank
statement by email. (4) Inter branch fund transfer between own a/c (5) Inter
branch fund transfer (third party a/c) (6) Transfer to any bank a/c. (7)RTGS
payment instruction (8) Apply for debit card (9) Intimate about loss of
ATM card
 (10) Open deposit account (11) Cheque status enquiry (12) Apply for phone
banking (12) Apply for bank products.

b. Value added services: (9 services)

(1). Linking bank a/c and credit card a/c (2) Linking bank a/c and Demat a/c
(3) Access credit card details (4) Access Demat account details (5) online
air ticket booking (6) Online Railway ticket booking (7) Income, service
and excise duty payment (8) Online custom duty payment (9) Online
shopping.

III. Mobile banking:

a) Information Based Services (11 services)

(1) Balance enquiry (2) Last 5 transaction details (3) Cheque book request
(4) Cheque states enquiry (5) Stop cheque request (6) Get credit card
account details (7) Get demat a/c details (8) Loan a/c details (9)
Locate branch ATM (10) Apply for bank product (11) Status of
service request.

(b) Financial Transaction based Services:( Three Services)

(1) Bill Payment (2) Fund Transfer (3) Prepaid mobile recharge.

IV. Credit Card

a) Convenience Services : (13 services)

(1) Cash withdrawal at ATM (2) Cash advance at cash points (3) Online
Shopping (4) Online railway ticket booking (5) E-Statement (6) SMS
alert
(7) Utility bill payment (8) online management of card (9) Auto debit
facility (10) Payment option – cash/cheque/draft (11) Payment
through ATM (12) Payment through ECS (13) Drop box facility.

b. Value added services: (4 services)

(1) Balance transfer facility (2) Dial – a-draft facility (3) Personal loan

on card (4) Interest free credit period

 c. Benefit Services (10 services)

(1) Add on card facility (2) Temporary credit limit enhancement (3)
Permanent credit limit entrancement (4) Self – set/monthly preset
credit limit
(5) Limited lost card liability (6) Revolving credit facility (7) Cash back offer
(8) Discount (9) Reward points (10) Fuel surcharge waiver.

d) Insurance Services (5 services)

1. Personal accident cover (2) Credit shield cover (3) life insurance on
card holders (4) Life insurance on add- on card (5) Purchase protection.

V. Any Branch banking (7 services)

Deposit of cash at non-home branch (2) Deposit of cheque and clearing

instrument (3) Cash withdrawal at non-home branch (4) Balance enquiry
at non-home branch (5) Get statement of a/c (6) Pass book updating (7)
Fund transfer to third party a/c at another CBS branch.
 4.2 DESCRIPTIVE ANALYSIS OF SAMPLES
The descriptive analyses of samples with respect to awareness are as
follows.

Table 4.2.1
Multiple Response Analysis of Awareness towards

Convenience services at ATM

Convenience services ICICI SBI

at ATM Response Percent Response Percent
N Percent of cases N percent of cases

Balance enquiry 262 15.3% 100.0% 220 16.6% 100.0%

Withdrawal of cash 262 15.3% 100.0% 220 16.6% 100.0%

Deposit of cash/cheque 202 11.8% 77.1% 99 7.5% 45.0%

Obtain statement of 209 12.2% 79.8% 204 15.4% 92.7%

Account

Cheque book request 121 7.1% 46.2% 35 2.6% 15.9%

Change of PIN 250 14.6% 95.4% 194 14.7% 88.2%

Fast cash 170 9.9% 64.9% 137 10.3% 62.3%

Shared ATM 240 14.0% 91.6% 215 16.2% 97.7%

Total 1716 100.0% 655.0% 1324 100.0% 601.8%

Source: Primary data

The above table shows the awareness of ATM – cum debit card users
with respect to convenience services at ATM. From the sample of 262 ICICI
bank ATM - cum - debit card users all users accepted that they are aware of
convenience service provided at ATM. Inspection of the multiple dichotomy
analysis frequency table 4.2.1
for multiple dichotomus set indicate that 100 percent of the ICICI bank
respondents are aware of basic convenience services such as balance enquiry
and cash withdrawal,
77.1 percent deposit of cash 46.2 percent cheque book request, 64.9 percent fast
cash and 79.8 percent of the ATM – cum – Debit card uses are aware of obtain
statement of account service. It is concluded that majority of the ICICI bank’s
ATM – cum deposit card users are aware of convenience services provided at
ATM.

In SBI 220 ATM – cum – Debit card users accepted that they are aware
of convenience service. From the 220 ATM – cum – Debit card users 100
percent of them are aware of balance enquiry and cash withdrawal which are
the basic services. 45 percent aware of cash deposit facility at ATM, 92.7
percent obtain statement of account. 15.9 percent cheque book request, 88.2
percent change of PIN and 62.3 percent aware of fast cash facility. It is
concluded that majority of SBI bank ATM – cum - Debit card users are aware of
convenience services provided at ATM.
Table 4.2.2
Multiple Response Analysis of Awareness towards

Value added services at ATM

ICICI SBI
Value added Response Response
services at ATM Percent Percent
N Percent of cases N percent of cases

Fund transfer
between same
142 15.9% 63.4% 157 22.9% 93.5%
bank/branch

Card to card
transfer 101 11.3% 45.1% 96 14.0% 57.1%

Card to account
transfer 62 7.0% 27.7% 43 6.3% 25.6%

Credit card bill

payment 169 18.9% 75.4% 85 12.4% 50.6%

Insurance
payment 114 12.8% 50.9% 94 13.7% 56.0%

Holy and trust

donations 45 5.0% 20.1% 50 7.3% 29.8%

Educational fee
payment 15 1.7% 6.7% 45 6.6% 26.8%

Mobile Top-ups
156 17.5% 69.6% 84 12.2% 50.0%
Air ticket
payment 88 9.9% 39.3% 32 4.7% 19.0%

Total 892 100.0% 398.2% 686 100.0% 408.3%

Source: Primary data

The above table shows the awareness of ATM – cum - Debit card users
towards value added services. From the 262 ICICI bank’s ATM – cum – Debit
card users, only 224 users accepted that they are aware of values added service.
Among the 224, 63.4 percent are aware of fund transfer, 45.1 percent card to
card transfer, 75.4
percent aware of credit card bill payment, 50.9 percent Insurance payment facility,
20.1 percent are aware holy and trust donation facility , 69.6 percent aware of
mobile top up facility, and 6.7 percent aware of education fee payment through
ATM. It is concluded that majority of the ATM users are awareness of the value
added services and the services that are known to few customers card to account
transfer, educational fee payment, Holy and trust donation facilities at ATM.

In SBI out of 220 ATM – cum – debit card users only 168 users accepted
that they are aware of value added services. Among 168, 93.5 percent aware of
fund transfer facility, 57.1 percent card to card transfer, 50.6 percent credit and
bill payment service, 56 percent Insurance payment service, 29.8 percent Holy
and trust donation facility, 26.8 percent educational fee payment service. It is
concluded that majority of the ATM users are aware of value added services and
the services that are known to few customers are card to account transfer,
educational fee payment and holy and trust donations services through ATM.
Table 4.2.3
Multiple Response Analysis of Awareness towards

Debit card services at POS

ICICI SBI
Debit card services at Response Percent Response
POS of cases Percent
N Percent percent
N of cases
Payment for purchases
at POS 258 25.6% 99.6% 219 28.0% 100.0%

SMS alert on POS

transaction 237 23.5% 91.5% 207 26.5% 94.5%

Cash withdrawal at
POS 124 12.3% 47.9% 63 8.1% 28.8%

Attractive discount
118 11.7% 45.6% 77 9.9% 35.2%
Surcharge waiver
102 10.1% 39.4% 56 7.2% 25.6%
Reward points
168 16.7% 64.9% 159 20.4% 72.6%

Total 1007 100.0% 388.8% 781 100.0% 356.6%

Source: Primary data

The above table shows the awareness of e-banking customers towards

debit card services at point of sales. From the sample of 262 ICICI banks’
ATM- cum- Debit card users 258 respondents accepted that they are aware of
debit card services at point of sale. Among 258, 91.5 percent aware of SMS alert
facility, 47.9 percent cash withdrawa1 facility, 45.6 percent aware of discounts,
39.4 percent surcharge waiver and 64.9 percent are aware of reward points. It is
concluded that majority of the customers are aware of services provided at point
of sale. However the services known to least numbers of customers are cash
withdrawal facility at point of sale and attractive discount.

In SBI bank, 219 ATM-cum-Debit card users accepted that they are
aware of services available at point of sales. Among 219 respondents, 94.5
percent are aware of SMS alert on POS transaction, 28.8 percent cash
withdrawal at POS, 35.2 percent
 aware of discount, 25.6 percent aware of surcharge waiver, and 72.6 percent
aware of reward points. It is concluded that majority of the customers are aware
of SMS alert service and reward point. Other services are known to few
respondents. Hence the bank should take necessary steps to create awareness
and promote its services for higher customer satisfaction.

Table 4.2.4
Multiple Response Analysis of Awareness towards

Other services of Debit card

ICICI SBI
Other services of Response Percent Response
Debit card of cases Percent
N Percent N percent
of cases
Operate multiple
account with single
145 16.6% 57.3% 127 16.7% 59.6%
debit card

Personal accident
cover 88 10.1% 34.8% 54 7.1% 25.4%

Lost card liability

cover 120 13.8% 47.4% 100 13.2% 46.9%

Purchase
protection 50 5.7% 19.8% 69 9.1% 32.4%

Online utility 221 25.3% 87.4% 207 27.3% 97.2%

payment
Online purchase
248 28.4% 98.0% 202 26.6% 94.8%
Total
872 100.0% 344.7% 759 100.0% 356.3%
Source: Primary data

The above table shows the awareness of E-banking customers towards

other services of debit cards. 253 respondents from ICICI bank are aware of
these services. Among 253 respondents, 57.3 percent are aware of operation of
multiple account with single card, 98 percent online purchase, 87.4 percent
online utility bill payment service, 34.8 percent personal accident cover and
47.4 percent aware of lost card
liability cover and only 19.8 percent aware of purchase protection service. It
reveals that the services that are highly known to customers are online utility bill
payment and online purchases.

In case of SBI bank, 213 respondents are aware of these services. Among
213 respondents,97.2 percent aware of online utility bill payment service, 94.8
percent online purchases, 59.6 percent aware of operating multiple account with
single debit card, 25.4 percent personal accident cover, 46.9 percent lost card
liability cover and
32.4 percent aware of purchase protection facility. It reveals that the e-banking
customers are highly aware of online utility bill payment and online purchase
facility.
 CHAPTER – V

SOCIO – ECONOMIC PROFILES OF E-BANKING

CUSTOMERS

3.1. INTRODUCTION
This chapter analyses the socio – economic profiles of the

respondents selected for the study. This chapter also analyses to

understand the other factors of e-banking users such as respondent’s

preference and reason for preferring e-banking products,

motivational factor that influenced them to select e-banking

products, facilities of e-banking used, number of years of utilization

and frequency of using e-banking facilities were also analyzed and

found out the results. Various tests were conducted to find out, if

there is any association between these variables.

The following socio-economic variables are considered to assess

the characteristics of e-banking customers of the study banks in the

study area (a) Sex (b) Age (c) Educational qualification (d)

Occupation (e) Monthly income and (f) Marital Status. Based on the

samples selected the descriptive and inferential analysis is as

follows.
 3.2 DESCRIPTIVE ANALYSIS OF SAMPLES
Table 3.2.1
Gender-wise classification of respondents

Gender Frequency Percentage

Male 380 78.8

Female 102 21.2

Total 482 100

Source: Primary data

The above table shows the classification of e-banking users on the basis

of gender: 78.8 percent were male and 21.2 percent were female. It is concluded

that the majority of the respondents were male. The reason for the low

proportion of female e- banking users in the study area is the lack of awareness

among them.

FIG 3.2.1.GENDER OF RESPONDENTS

90
78.8
80
70
60
50 Gender
40 Percentage
30 21.2
20
10
0
1 2 3 4 5 6 7
 Table 3.2.2
Age-wise classification of respondents

Age group Frequency Percentage

Below 30 110 22.8

30-40 198 41.1

24.7
40-50 119

Above 50 55 11.4

Total 482 100.0

Source: Primary data

The above table shows the various age groups of respondents selected for
the study. It reveals that 22.8 percent belongs to below 30 years group, 41.1
percent belongs to 30-40 years age group, 24.7 percent to 40-50 years age group
and 11.4 percent to above 50 years of age. It is concluded that majority of the
respondents age is up to 40 years. There is a lack of awareness among older age
groups. Therefore, the study banks should concentrate on creating awareness
among them.
FIG3.2.2 AGE OF RESPONDENTS

24.7
50 41.1
40 11.4
30 22.8
20
10 1 2 3 4 5 6 7 8 9 10 11 12 13

0 Age group Percentage

Table 3.2.3
Educational qualification of the respondents

Educational qualification Frequency Percentage

Graduate 132 27.4

Post Graduate 193 40.0

Doctorate 21 4.4

Professional 91 18.9

Others 45 9.3

Total 482 100.0

Source: Primary data

The above table shows the educational qualification of the respondents. It

shows that 40 percent of them are post graduates, 27.4 percent graduates, 18.9
percent professionals, 4.4 percent doctorates and 9.3 percent are with other
qualification. It is concluded that the majority of the respondents were highly
qualified.
 Table 3.2.4

Occupational status of

respondents

Occupation Frequency Percentage

Businessmen 58 12.0

Professionals 75 15.6

Government employee 157 32.6

Private employee 129 26.8

Retired person 28 5.8

Others 35 7.3

Total 482 100

Source: Primary data

The above table shows the occupational status of e-banking users selected
for the study. It is reveals that 12 percent are businessmen, 15.6 percent are
professionals,
32.6 percent are government employees. 26.8 percent private employees, 5.8
percent retired persons and the remaining 7.3 percent are in the category of
others which includes college students, house wives and farmers. It is concluded
that majority of the respondents in the study area were salaried people that is
Government and Private Employees.
Table 3.2.5
Monthly income-wise classification of respondents

Monthly income Frequency Percentage

Below 15,000 131 27.2

15,000-25,000 155 32.2

25,000-40,000 110 22.8

40,000-60,000 54 11.2

Above 60,000 32 6.6

Total 482 100.0

Source: Primary data

The above table shows the monthly income of respondents. It shows that
27.2 percent of e-banking users belongs to the group earning less than Rs.15,000,
32.2 percent to the Rs.15,000 – 25,000 category, 22.8, percent represents
monthly income between Rs.25,000 and Rs.40,000, 11.2 percent represents
monthly income between Rs.40,000 and Rs.60,000. It is concluded that majority
of the e-banking users monthly income is between Rs.15, 000 and Rs.25,000
which means majority of them are in middle income group. So, the study banks
should try to attract the higher income class which lacks awareness in this area.
 FIG : 3.2.5 MONTHLY INCOME OF
RESPONDENTS

35 32.2
30 27.2
22.8
25
20
11.2 Percentage
15
10 6.6
5
0

Table 3.2.6
Marital status of respondents

Marital status Frequency Percentage

Married 395 82.0

Unmarried 87 18.0

Total 482 100.0

Source: Primary data

The above table shows the respondents marital status. It reveals that 82
percent of the respondents were married and 18 percent unmarried. It is
concluded that the majority of respondents were married. So, the banks should
encourage all categories of the respondents to use e-banking products.
 Table3.2.7
Classification of respondents on the basis of e-banking facilities

E-banking SBI ICICI Total Percentage

facilities Frequency Percentage Frequency Percentage
ATM
220 100.0 262 100.0 482 100.0
ATM-cum-
Debit card 220 100.0 262 100.0 482 100.0

Credit card 81 36.8 103 39.3 184 38.2

Net Banking
57 25.9 73 27.9 130 27.0
Mobile
Banking 25 11.4 29 11.1 54 11.2

NEFT 21 9.5 25 9.5 46 9.5

RTGS 18 8.2 22 8.4 40 8.3

Electronic
clearing 19 8.6 13 4.9 32 6.6
service(ECS)
Any Branch
Banking 28 12.7 20 7.6 48 10.0

Source: Primary data

The above table describes the e-banking products used by the respondents
in the study banks. It is evident that 100 percent of respondents are using ATM-
cum- Debit card and ATM facilities, 38.2 percent are using Credit Card, 27
percent are using Net Banking facilities in the study bank. Out of 482
respondents 11.2 percent are using mobile banking, 9.5 percent are NEFT, 8.3
percent are RTGS and 10.5 percent are using any branch banking facility. Only
6.6 percent are using Electronic Clearing Service (ECS) facility. It is concluded
that most of the respondents are multi- product users. The percentage of users
with respect to ATM-Cum-Debit Card, Credit Card and Net banking is high and
other products are used by few respondents only. Hence, the study banks should
create awareness about these products and facilities among people in this area.
Table 3.2.8
Motivational factor to avail e-banking products

Motivators Frequency Percentage

Friends and relatives 166 34.4

Bank employees 131 27.2

Phone banking officers 43 8.9

Sales executives 54 11.2

Advertisement 66 13.7

Other factors 22 4.6

Total 482 100.0

Source: Primary data

The above table shows the factor which influenced the respondents to
avail e- banking facilities. It reveals that 34.4 percent were influenced by friends
and relatives,
27.2 percent by bank employers, 8.9 percent by the phone banking officers, 11.2
percent by sales executives, 13.7 percent by advertisement, and 4.6percent by
other than these factors. It is concluded that majority of the respondents were
motivated by friends and relatives and also by bank employees.
Table 3.2.9
Number of years of utilization

Years Frequency Percentage

Less than 1 year 42 8.7

1-2 years 66 13.7

2-5 years 132 27.4

More than 5 years 242 50.2

Total 482 100.0

Source: Primary data

The above table reveals the number of years of e-banking facility usage
by the respondents. It shows that 8.7 percent are using e-banking facilities for
less than one year, 13.7 percent are for 1-2 years, 27.4 percent are for 2-5 years
and 50.2 percent are using for more than 5 years. It is concluded that majority
of the respondents are using e-banking facilities for more than 5 years.

FIG 3.2.9 NUMBER OF YEARS OF

UTILIZATION

13.7
8.7

50.2

27.4
 Table 3.2.10
Preference of respondents to e-banking products

Preference Frequency Percentage

Yes 471 97.7

No 11 2.3

Total 482 100.0

Source: Primary data

The above table shows the respondents preference to use e-banking

products. It reveals that 97.7 percent of the respondents prefer to use e-
banking products for their banking transactions and only 2.3 percent don’t
prefer e-banking products for their transactions with bank. It is concluded that e-
banking products are preferred by respondents in the study banks.

FIG :3.2.10 PREFERENCE OF

RESPONDENTS TO E-BANKING
PRODUCTS

120 97.7
100
80
60
40
20 0 2.3
0
 Table 3.2.11
Reason for preference to e-banking products

Reasons Frequency Percentage

Convenience banking 160 34.0

No risk of carrying cash 92 19.5

Global access 30 6.4

Time saving 140 29.7

Easy Fund Transfer 49 10.4

Total 471 100.0

Source: Primary data

The above table shows the reason for preferring e-banking products. 34
percent prefer for convenience 29.7 percent for time saving, 19.5 percent prefer to
avoid risk of carrying cash, 10.4 percent easy fund transfer and 6.4 percent prefer
for global access. It is concluded that majority of the e-banking users prefer them
for their convenience as they save time for their banking operations quickly.
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