Malaya Journal of Matematik, Vol. S, No.

2, 3286-3288, 2020

https://doi.org/10.26637/MJM0S20/0850

The impact of E-Banking services in India

Sri Balakrishnan 1 and R. Bharthvajan 2

Abstract
In this new generation, technology has become the soul of everything in the day to day life of a human activity.
With the advancement of new technology, e-banking has emerged as a new technology through the internet to
promote the growth and efficiency in the Banking sector. It helps to access the financial institution connected
through electronic banking system. E banking has contributed more towards the growth of the Economy. It
provides many services whereby the banking sector and the customers can communicate through the internet
with ease. E banking is increasingly popular both in India and around the globe.The research paper focused on
e-Banking, benefits, services,application in today’s business.
Keywords
E-Banking, economy, banking sector, technology, financial institution.
1,2 Department of Management Studies, Bharath Institute of Higher Education and Research, Selaiyur, Chennai-600073, Tamil Nadu, India.
Article History: Received 01 October 2020; Accepted 10 December 2020 c 2020 MJM.

Contents 2. Review of Literature

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3286
2 Review of Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3286
3 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3287
4 Research Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . 3287
5 Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3287
6 Suggestions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3287
7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3288
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3288
1. Introduction
The IT revolution has had a great impact on the Indian
banking system. The use of computers has led to the intro-
duction of online banking in India. The use of computers in
the banking sector in India has increased many folds after
the economic liberalization of 1991 as the country’s banking
sector has been exposed to the world’s market. A bank is a
financial institution that creates credit by lending money to
a borrower and thereby creating corresponding deposits on
the banks’ balance sheet.Banking is the business conducted
or services offered by a bank. E-Banking also known as elec-
tronic banking is an electronic payment system that enables
customers of a bank or other financial institution to conduct
a reign of financial transaction through the financial institute
websites.
Rangan, V. Kasturi and Lee, Katharine L.(2012), ”Mobile
Banking for the Unbanked”, The case describes in detail the
workings of two mobile banking operators in Africa WIZZIT
in South Africa and M-PESA in Kenya. It explores the dimen-
sions of strategy that make for success in the market for the
unbanked. It raises questions regarding the portability of the
model to other countries and settings.
V. Raja, Joe A. (2012), “Global e-banking scenario and
challenges in banking system”, This paper is an attempt to
explore the various levels of internet banking services pro-
vided by banks using the secondary data. It also compares
the traditional banking systems with net banking. It lists out
the various advantages of internet banking and the success-
ful security measures adopted by different banks for secured
banking transactions. It also analyzes how E-banking can
be useful for banking industry during this global financial
meltdown.
Nel J., Boshoff C., Raleting T., (2012), “Exploiting the
technology cluster effect to enhance the adoption of WIG
mobile banking among low-income earners” This study in-
vestigated the attitude formation of low-income, non-users of
Wireless Internet Gateway (WIG) mobile banking, by includ-
ing use of the Short Message Services (SMS) as a moderator
of attitude formation. A non-probability sample of 465 South
African non-users of mobile banking was drawn and clustered
into High users and Low users of the SMS, based on the aver-
age number of text messages sent in a week. The moderating
effect of ”use of the SMS” was investigated by means of a

structural equation modeling Multi-group analysis. The find-
ings revealed that the influence of Ease of use on Attitude
and of Self-efficacy on Ease of use were stronger for High
users and significantly different from Low users, while the
opposite was true for the influence of Facilitating conditions
on Usefulness.
Oliveira P., Eric V. H., (2011), “Users as service innova-
tors: The case of banking services” Fond that 55% of today’s
computerized commercial banking services were first devel-
oped and implemented by non-bank firms for their own use,
and 44% of today’s computerized retail banking services were
first developed and implemented by individual service users
rather than by commercial financial service providers. Manual
precursors to these services – manual procedures that carried
out functions similar to computerized services in our sample –
were almost always developed by users as self-services
We may think of the Internet banking adoption as of a
treatment. This makes us interested in estimation of its impact
on customers’ activity and willingness to keep money at a
bank. Thus, the number of transactions as well as account
balances will be the variables of interest. Online banking
adoption seems to make a customer more loyal, so one may
expect having it to be a good explanatory factor with a positive
impact on both of the characteristics. It is important to reveal
whether the estimated effect is not caused by the treatment
selection bias. Individuals choose by themselves whether to
use the product or not, thus the sample of customers with
e-banking is not selected randomly. The factors that push cus-
tomers to the service adoption are likely to be endogenous and
unobservable. However, we assume that during the analyzed
period those characteristics at least do not fluctuate. Thus,
the solution is to run panel data regression with individual
fixed effects for customers before and after Internet banking
adoption, which eliminates sample selection bias. Under this
specification the effect of all time-invariant factors are not in-
vestigated. However, we control for clients income. Another
issue is that the behavior may change not immediately after
e-banking adoption. All variables are observed on a monthly
basis, and the study is capable 9 of tracking the changes in the
dependent variables for several months after the treatment.
Need for the Study
First the study will be useful for commercial banks in or-
der to see the impacts of e-banking on customers’ satisfaction
in comparison with the ordinary mortar and brick banking
system. Second it helps in understanding what attitude cus-
tomers’ have towards e-banking and what actions should the
banks take in order to benefits from the opportunities and
how to overcome the challenges. Third study can be used
by other researcher as a reference who wants to study further
in this or related areas or to serve as a reading material for
anyone who is interested. Last but not least this research will
alert bankers tomorrow’s problems today in order to get the
intended customers satisfaction as this service can be said it
is at infant stage in the country.
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3. Objectives
The objective of the research paper is:-
Primary:
• To study the impact of E-banking on the services of
banks.
Secondary:
• To study the opportunities and challenges faced by banks
in E-Banking services.
• To understand the reasons for adopting or not adopting
E-Banking services.
4. Research Methodology
The study is based mainly on primary data and supported
by the secondary data. The primary data is collected from
the customers with the help of questionnaire to evaluate the
customer’s perspective. The questionnaire has close ended
questions that has answer options like (Strongly agree, Agree,
Undecided, Disagree, Strongly Disagree). It is divided into
two sections which are personal data and research question.
Limitation of e-banking:
1. Safety situations around ATM’s.
2. Abuse of bank cards by fraudsters at ATM’s.
3. Danger of giving your card number when buying on-
line.
5. Findings
The findings of the study showed that there is a wide di-
vergence of customers’ opinion regarding e-banking services.
Ranking was done to judge the opinion of the customers. To
study the relationship between electronic banking and cus-
tomer satisfaction and to ascertain which aspects of e-banking
have significant impact on satisfaction, factor analysis was
conducted. The aim was to determine nine dimensions of ser-
vice quality and their relative contribution in influencing the
overall customer satisfaction. Further it has helped in data re-
duction and the aim is to select only those variables which can
exactly influence the impact of electronic banking on service
quality. The study indicated that reliability, responsiveness,
communication, access, courtesy, communication, credibility,
security, understanding and tangibility did reasonably well in
predicting overall customer satisfaction regarding e-banking.
However tangible has not significantly related to customer
satisfaction. In addition; communication, credibility, respon-
siveness and competence exhibited the strongest association
with overall service improving quality.
6. Suggestions
The public sector banks must improve its service quality
in terms of communication, responsiveness, reliability and
understanding. If the private sector intends to improve its ser-
vice quality level, it must improve its service quality in terms
of access, creditability, tangibility, security and competence
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where there is significant gap between two sectors and mean

score of public sector in all these dimensions are high.
The study suggested that if the public sector banks want
to increase their service quality level as compared to private
sector, it should enhance level of services in the dimensions
like ’online purchase of goods and services’, reduction in
e-payment cost, ‘up to date information’, ‘sophisticated infor-
mation to well educated customers’. To improve in these areas
the public sector banks should invest in large amount in the
training the employees to provide up to date and sophisticated
information to customers.
As the use of internet is increasing day by day so the
internet banking is also rapidly followed by the customers. To
make e-payment service more adaptable among the customers
banks should provide more services through internet banking
for query as well as for transaction purpose.
The banks should emphasize more on popularizing inter-
net usage by customers which results into improvement in
customer satisfaction and also cost reduction.

7. Conclusion
E-banking is highly comfortable in our daily life and in
fact it has made our life easier and convenient and over all
we are able to enjoy quality services smartly. It also resulted
in efficiency and time saving methods. Also Internet is the
cheapest delivery channel for banking products as it allows
the entity to reduce their branch networks and downsize the
number of service staff. For banks, Internet has opened up
new horizons and moved them from local to global frontiers.

References
[1] Impact of E-Banking on Traditional Banking Services
, ShilpanVyas, School of Computer Science and Infor-
mation Technology, Singhania University, Pacheri Bari,
Rajasthan, India.
[2] Dewan, Rajiv, and Abraham Seidmann. Current issues in
e-banking: introduction. Communications of the ACM.
2001, 31-32.
[3] Bauer, Hans H., MaikHammerschmidt, and Tomas Falk.
Measuring the quality of e-banking portals. International
journal of bank marketing, 2005, 153-175.
[4] Liao, Ziqi, and Michael Tow Cheung. Challenges to In-
ternet e-banking. Communications of the ACM, 2003,
248-250.

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ISSN(P):2319 − 3786
Malaya Journal of Matematik
ISSN(O):2321 − 5666
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