Why to stand in line, when you can operate online

RESEARCH PROJECT
A Study On E-BANKING IN INDIA

Submitted By DEEPTI MADHURI GUMMUDU JAPPREET KAUR SHASHANK KUMAR P C VIKAS SANGWAN VINAY KUMAR JHAWAR
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Why to stand in line, when you can operate online

PREFACE

The quotation written at the top of the page is a reality today, E banking had helped very much to ease the banking services, E Banking is one of the reason for the excellent services given by the banks results in customer satisfaction which is very important So the project aims to study the emergence of E Banking in India ,it includes the study of 150 people ,their views about the E-banking, this project helps the banks to find out the future prospects of the E Banking and the reasons that why the people are hesitating to use the E Banking the E Banking services. As the customer satisfaction is the main focus of each and every company specially in the service sector ,so the E Banking services by the bank act as a fuel to provide the customer satisfaction and to catapult their respective positions in the cut throat competitive banking sector.

Why to stand in line, when you can operate online

TABLE OF CONTENTS

CHAPTE R NO 1 1.1 1.2 1.3 2 3 4 5 5.1 5.2 6 6.1 6.2 7 8 9 10

TOPICS/CHAPTERS NAME INTRODUCTION History of Banking Origin of Banking in India What is Online Banking REVIEW OF LITERATURE OBJECTIVE OF STUDY RESEARCH METHOLOGY ANALYSIS AND INTERPRETATION Interpretation of data survey Suggestions FINDINGS Findings of the study Limitations CONLUSION BIBLIOGRAPHY SCOPE OF FURTHER STUDY SCHEDULE 7 8 15 20 26 30 32 36 37 49 51 52 53 54 56 58 59

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Why to stand in line, when you can operate online

INTRODUCTION
History of banking.

Roman sculpture showing moneychanger from 4th century BC The history of banking is closely related to the history of money. As monetary payments became important, people looked for ways to safely store their money. As trade grew, merchants looked for ways of borrowing money to fund expeditions.

Why to stand in line, when you can operate online Earliest banks The first banks were probably the religious temples of the ancient world. In them was stored gold in the form of easy-to-carry compressed plates. Their owners justly felt that temples were the safest places to store their gold as they were constantly attended and well built and were sacred, thus deterring would-be thieves. There are extant records of loans from the 18th century BC in Babylon that were made by temple priests to merchants. Ancient Greece holds further evidence of banking. Greek temples, as well as private and civic entities, conducted financial transactions such as loans, deposits, currency exchange, and validation of coinage. There is evidence too of credit, whereby in return for a payment from a client, a moneylender in one Greek port would write a credit note for the client who could "cash" the note in another city, saving the client the danger of carting coinage with him on his journey. Ancient Rome perfected the administrative aspect of banking and saw greater regulation of financial institutions and financial practices. Charging interest on loans and paying interest on deposits became more highly developed and competitive.

During Late Antiquity and Middle ages

The ascent of Christianity in Rome and its influence restricted banking, as the charging of interest was seen as immoral. Jews were ostracized from most professions by local rulers, the Church and the guilds, were pushed into marginal occupations considered socially inferior, such as tax and rent collecting and money lending, while the provision of financial services increasingly demanded by the expansion of European trade and commerce. Most early religious systems in the ancient Near East, and the secular codes arising from them, did not forbid usury. These societies regarded inanimate matter as alive, like plants, animals and people, and capable of reproducing itself. Hence if you lent 'food money', or monetary tokens of any kind, it was legitimate to charge interest. Food money in the shape of olives, dates, seeds or animals was lent out as early as c. 5000 BC, if not earlier. ... Among the Mesopotamians, Hittites, Phoenicians and Egyptians, interest was legal and often fixed by the state. But the Jews took a different view of the matter. 5

Why to stand in line, when you can operate online The Torah and later sections of the Hebrew Bible criticize interest-taking, but interpretations of the Biblical prohibition vary. One common understanding is that Jews are forbidden to charge interest upon loans made to other Jews, but allowed to charge interest on transactions with nonJews, or Gentiles. However, the Hebrew Bible itself gives numerous examples where this provision was evaded. Johnson holds that the Hebrew Bible treats the lending as philanthropy in a poor community whose aim was collective survival, but which is not obliged to be charitable towards outsiders. Medieval trade fairs, such as the one in Hamburg, contributed to the growth of banking in a curious way: moneychangers issued documents redeemable at other fairs, in exchange for hard currency. These documents could be cashed at another fair in a different country or at a future fair in the same location. If redeemable at a future date, they would often be discounted by an amount comparable to a rate of interest. Eventually, these documents evolved into bills of exchange, which could be redeemed at any office of the issuing banker. These bills made it possible to transfer large sums of money without the complications of hauling large chests of gold and hiring armed guards to protect the gold from thieves. Ironically, the papal bankers were the most successful of the Western world. When Pope John XXII (born Jacques d'Euse (1249 - 1334) was crowned in Lyon in 1316, he set up residency in Avignon. The accompanying growth of Italian banking in France was the start of the Lombard moneychangers in Europe, who moved from city to city along the busy pilgrim routes important for trade. Key cities in this period were Cahors, the birthplace of Pope John XXII, and Figeac. Perhaps it was because of these origins that the term Lombard is synonymous with Cahorsin in medieval Europe, and means 'pawnbroker'.

Western banking history

Modern Western economic and financial history is usually traced back to the coffee houses of London. The London Royal Exchange was established in 1565. At that time moneychangers were already called bankers, though the term "bank" usually referred to their offices, and did not carry the meaning it does today. There was also a hierarchical order among professionals; at the top were the bankers who did business with heads of state, next were the city exchanges, and at 6

Why to stand in line, when you can operate online the bottom were the pawn shops or "Lombards. Most European cities today have a Lombard street where the pawn shop was located. After the siege of Antwerp trade moved to Amsterdam. In 1609 the Amsterdamsche Wissel bank (Amsterdam Exchange Bank) was founded which made Amsterdam the financial centre of the world until the Industrial Revolution. Banking offices were usually located near centers of trade, and in the late 17th century, the largest centers for commerce were the ports of Amsterdam, London, and Hamburg. Individuals could participate in the lucrative East India trade by purchasing bills of credit from these banks, but the price they received for commodities was dependent on the ships returning (which often didn't happen on time) and on the cargo they carried (which often wasn't according to plan). The commodities market was very volatile for this reason, and also because of the many wars that led to cargo seizures and loss of ships.

The growth of commercial banking

US financial market
By the early 1900s New York was beginning to emerge as a world financial centre. Companies and individuals acquired large investments in (other) companies in the US and Europe, resulting in the first true market integration. This comparatively high level of market integration proved especially beneficial when World War I cameboth sides in the conflict sought funds from the United States, by issuing new securities and selling existing holdings, though the Allied Powers raised by far the larger amounts. Being a lender to the world resulted in the largest growth of a financial economy to that point. The stock market crash in 1929 was a global eventmarkets crashed everywhere, all at the same time, and the volume of foreign selling orders was high. The Great Depression followed, and the banks were blamed for it, although the evidence has never been strong to connect the speculative activities of the banks during the 1920s with either the crash or the subsequent depression of the 1930s. Nonetheless, there were three prominent results from these events that had great effect on American banking. The first was the passage of the Banking Act of 1933 that provided for the 7

Why to stand in line, when you can operate online Federal Deposit Insurance system and the GlassSteagall provisions that completely separated commercial banking and securities activities. Second was the depression itself, which led in the end to World War II and a 30-year period in which banking was confined to basic, slow-growing deposit taking and loan making within a limited local market only. And third was the rising importance of the government in deciding financial matters, especially during the post-war recovery period. As a consequence, there was comparatively little for banks or securities firms to do from the early 1930s until the early 1960s.

Global banking
In the 1970s, a number of smaller crashes tied to the policies put in place following the depression, resulted in deregulation and privatization of government-owned enterprises in the 1980s, indicating that governments of industrial countries around the world found private-sector solutions to problems of economic growth and development preferable to state-operated, semisocialist programs. This spurred a trend that was already prevalent in the business sector, large companies becoming global and dealing with customers, suppliers, manufacturing, and information centers all over the world. Global banking and capital market services proliferated during the 1980s and 1990s as a result of a great increase in demand from companies, governments, and financial institutions, but also because financial market conditions were buoyant and, on the whole, bullish. Interest rates in the United States declined from about 15% for two-year U.S. Treasury notes to about 5% during the 20-year period, and financial assets grew then at a rate approximately twice the rate of the world economy. Such growth rate would have been lower, in the last twenty years, were it not for the profound effects of the internationalization of financial markets especially U.S. Foreign investments, particularly from Japan, who not only provided the funds to corporations in the U.S., but also helped finance the federal government; thus, transforming the U.S. stock market by far into the largest in the world. Nevertheless, in recent years, the dominance of U.S. financial markets has been disappearing and there has been an increasing interest in foreign stocks. The extraordinary growth of foreign financial markets results from both large increases in the pool of savings in foreign countries, 8

Why to stand in line, when you can operate online such as Japan, and, especially, the deregulation of foreign financial markets, which has enabled them to expand their activities. Thus, American corporations and banks have started seeking investment opportunities abroad, prompting the development in the U.S. of mutual funds specializing in trading in foreign stock markets. Such growing internationalization and opportunity in financial services has entirely changed the competitive landscape, as now many banks have demonstrated a preference for the universal banking model so prevalent in Europe. Universal banks are free to engage in all forms of financial services, make investments in client companies, and function as much as possible as a one-stop supplier of both retail and wholesale financial services. Many such possible alignments could be accomplished only by large acquisitions, and there were many of them. By the end of 2000, a year in which a record level of financial services transactions with a market value of $10.5 trillion occurred, the top ten banks commanded a market share of more than 80% and the top five, 55%. Of the top ten banks ranked by market share, seven were large universal-type banks (three American and four European), and the remaining three were large U.S. investment banks who between them accounted for a 33% market share. This growth and opportunity also led to an unexpected outcome: entrance into the market of other financial intermediaries: non banks. Large corporate players were beginning to find their way into the financial service community, offering competition to established banks. The main services offered included insurances, pension, mutual, money market and hedge funds, loans and credits and securities. Indeed, by the end of 2001 the market capitalization of the worlds 15 largest financial services providers included four non banks. In recent years, the process of financial innovation has advanced enormously increasing the importance and profitability of non bank finance. Such profitability priory restricted to the non banking industry, has prompted the Office of the Comptroller of the Currency (OCC)to encourage banks to explore other financial instruments, diversifying banks' business as well as improving banking economic health. Hence, as the distinct financial instruments are being

Why to stand in line, when you can operate online explored and adopted by both the banking and non banking industries, the distinction between different financial institutions is gradually vanishing. A recent innovation in 2005 was the creation of prosper.com, a financial institution based on the idea of a person-to-person (P2P) system. Prosper.com allows individuals and groups to bid on interest rates for loans as either borrowers or lenders, effectively making each individual person a banking institution. The system is protected by credit ratings and identity verification.

Oldest private banks

Barclays which was founded by John Freame and Thomas Gould in 1690. The bank was renamed to Barclays by Freame's son-in-law, James Barclay, in 1736. Hope & Co., founded in 1762. Barings Bank founded in 1806. Rothschild family 1700 - present.

For French banking history, read the History of banks in France (in English or in French) on the FBF website.

Oldest national banks

Bank of Sweden The rise of the national banks Bank of England The evolution of modern central banking policies Bank of America The invention of centralized check and payment processing technology Swiss banking United States Banking The Pennsylvania Land Bank, founded in 1723 and receiving the support of Benjamin Franklin who wrote "Modest Enquiry into the Nature and Necessity of a Paper Currency" in 1729[1].

Imperial Bank of Persia (Iran) History of banking in the Middle-East

ORIGIN IN INDIA
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In India as early as Vedic era, banking existed in its crude form. The works of Manu, contain references to deposits, pledges, policy of loans and rates of interests etc. the original banking operations were in the hands of indigenous bankers, who dominated the finance to the extent that they provided credit to the govt. of also.

State Bank of India

(History of banking in India) State Bank of India

Type Founded Headquarters

Public (BSE, NSE:SBI) & (LSE: SBID) Calcutta, 1806 (as Bank of Calcutta) Corporate Centre, Madame Cama Road, Mumbai 400 021 India Chairman Om Prakash Bhatt Banking Insurance Capital Markets and allied industries Loans, Credit Cards, Savings, Investment vehicles, SBI Life (Insurance) etc. USD 13.775 billion (2005) The nation banks on us www.statebankofindia.com

Key people Industry

Products Revenue Slogan Website

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Why to stand in line, when you can operate online State Bank of India (SBI) (LSE: SBID) is the largest bank in India. It is also, measured by the number of branch offices and employees, the largest bank in the world. Established in 1806 as Bank of Bengal, it remains the oldest commercial bank in the Indian Subcontinent and also the most successful one providing various domestic, international and NRI products and services, through its vast network in India and overseas. With an asset base of $126 billion and its reach, it is a regional banking behemoth. The bank was nationalized in 1955 with the Reserve Bank of India having a 60% stake. It has laid emphasis on reducing the huge manpower through Golden handshake schemes and computerizing its operations.

Roots
The roots to the State Bank of India are traceable to the first decade of 19th century, when the Bank of Calcutta, later renamed as the Bank of Bengal, was established on 2 June 1806. The Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843) were amalgamated on 27 January 1921, and the reorganized banking entity was named the Imperial Bank of India. All these Presidency banks were incorporated as joint stock companies, and were the result of the royal charters. The Imperial Bank of India continued to remain a joint stock company. Until the establishment of a central bank in India the Imperial Bank and its early predecessors served as the nation's central bank printing currency. The Reserve Bank of India, which is the central banking organization of India, in the year 1955, acquired a controlling interest in the Imperial Bank of India and the Imperial Bank of India was christened on 30 April 1955 as the State Bank of India. This acquisition of the controlling interest was done pursuant to the provisions of the State Bank of India Act 1955, an Act enacted by the Parliament of India

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Timeline

Offices of the Bank of Bengal

June 2, 1806: The Bank of Calcutta established. January 2, 1809: redesigned as Bank of Bengal. April 15, 1840: Bank of Bombay established. July 1, 1843: Bank of Madras established. 1861: Paper Currency Act passed. January 27, 1921: all three banks amalgamated to form Imperial Bank of India. July 1, 1955: State Bank of India formed; becomes the first Indian bank to be nationalized. 1959: State Bank of India (Subsidiary Banks) Act passed, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries. 1980s When Bank of Cochin in Kerala faced a financial crisis, the government merged it with State Bank of India.

Associate banks
There are seven other associate banks that fall under SBI. They all use the "State Bank of" name followed by the regional headquarters' name. These were originally banks belonging to princely states and were nationalized in 1959. In tune with the first Five Year Plan, emphasizing the development of rural India, these banks were integrated with the State Bank of India, to expand its rural outreach. The State Bank group refers to the seven associates and the parent bank. All the banks use the same logo of a blue keyhole. There has been a proposal to merge all the associate banks into SBI to create a "mega bank" and streamline operations.

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Why to stand in line, when you can operate online

State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore

Growth
State Bank of India has often acted as guarantor to the Indian Government, most notably during Chandra Shekhar's tenure as Prime Minister of India. With more than 9400 branches and a further 4000+ associate bank branches, the SBI has extensive coverage. State Bank of India has electronically networked most of its metropolitan, urban and semi-urban branches under Core Banking System (CBS). The bank has the largest ATM network in the country having more than 5600 in number . The State Bank of India has had steady growth over its history, though it was marred by the Harshad Mehta scam in 1992.Following its arch-rival ICICI Bank, the bank has started Core banking process by which more than 4400+ branched have been completed so far. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. According to the Forbes 2000 listing it tops all Indian companies.

Fortune Global 500 Ranking - 2006

SBI debuted in the Fortune Global 500 at 498 in 2006.

Group companies

SBI Capital Markets Ltd SBI Mutual Fund (A Trust) SBI Factors and Commercial Services Ltd SBI DFHI Ltd 14

Why to stand in line, when you can operate online

SBI Cards and Payment Services Pvt Ltd SBI Life Insurance Co. Ltd - Banc assurance (Life Insurance) SBI Funds Management Pvt Ltd SBI Canada

IT Initiatives
According to PM Network (December 2006, Vol. 20, No. 12), State Bank of India launched a project in 2002 to network more than 14,000 domestic and 70 foreign offices and branches. The first and the second phases of the project have already been completed and the third phase is still in progress. As of December 2006, over 10,000 branches have been covered. The new infrastructure serves as the bank's backbone, carrying all applications, such as the IP telephone network, ATM network, Internet banking and internal e-mail. The new infrastructure has enabled the bank to further grow its ATM network with plans to add another 3,000 by the end of 2007 raising the total number to 8,600.

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Why to stand in line, when you can operate online

WHAT IS ONLINE BANKING? If you're like most people, you've heard a lot about online banking but probably haven't tried it yourself. You still pay your bills by mail and deposit checks at your bank branch, much the way your parents did. You might shop online for a loan, life insurance or a home mortgage, but when it comes time to commit, you feel more comfortable working with your banker or an agent you know and trust. Online banking isn't out to change your money habits. Instead, it uses today's computer technology to give you the option of bypassing the time-consuming, paper-based aspects of traditional banking in order to manage your finances more quickly and efficiently. In simple words we can say that Online banking (or Internet banking) is a term used for performing transactions, payments etc. over the Internet through a bank, credit union or building society's secure website. This allows customers to do their banking outside of bank hours and 16

Why to stand in line, when you can operate online from anywhere where Internet access is available. In most cases a web browser is utilized and any normal internet connection is suitable. No special software or hardware is usually needed.

In India ICICI Bank was the first to provide e-banking service, these services were launched in the year 1998

Features
Online banking usually offers such features as:

Bank statements, with the possibility to import data in a personal finance program such as Quicken or Microsoft Money Electronic bill payment Funds transfer between a customer's own checking and savings accounts, or to another customer's account Investment purchase or sale Loan applications and transactions, such as repayments Account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.

There are a growing number of so-called virtual banks that operate exclusively online. These online banks have low costs compared to traditional banks and so they often offer higher interest rates.

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Why to stand in line, when you can operate online

Security

Security token devices Protection through single password authentication, as is the case in most secure Internet shopping sites, is not considered secure enough for personal online banking applications in some countries. Online banking user interfaces are secure sites (generally employing the https protocol) and traffic of all information - including the password - is encrypted, making it next to impossible for a third party to obtain or modify information after it is sent. However, encryption alone does not rule out the possibility of hackers gaining access to vulnerable home PCs and intercepting the password as it is typed in (key logging). There is also the danger of password cracking and physical theft of passwords written down by careless users. Many online banking services therefore impose a second layer of security. Strategies vary, but a common method is the use of transaction numbers, or TANs, which are essentially single use passwords. Another strategy is the use of two passwords, only random parts of which are entered at the start of every online banking session. This is however slightly less secure than the TAN alternative and more inconvenient for the user. A third option, used in many European countries and currently being trialed in the UK is providing customers with security token devices capable of generating single use passwords unique to the customer's token (this is called two-factor authentication or 2FA). Another option is using digital certificates, which digitally sign or authenticate the transactions, by linking them to the physical device (e.g. computer, mobile phone, etc). While most online banking in the United States still uses single password protection, the FDIC has issued regulations requiring that banks implement more secure authentication mechanisms by the end of 2006. 18

Why to stand in line, when you can operate online Banks in many European countries (including the Scandinavian countries, the Netherlands, Austria and Belgium) are offering online banking for e-commerce payments directly from customer to merchants. For instance, see iDEAL.

Fraud
Some customers avoid online banking as they perceive it as being too vulnerable to fraud. The security measures employed by most banks can never be completely safe, but in practice the number of fraud victims due to online banking is very small. This is probably due to the fact that a relatively small number of people use internet banking compared with the total number of banking customers world wide. Indeed, conventional banking practices may be more prone to abuse by fraudsters than online banking. Credit card fraud, signature forgery and identity theft are far more widespread "offline" crimes than malicious hacking. Bank transactions are generally traceable and criminal penalties for bank fraud are high. Online banking becomes less secure if users are careless, gullible or computer illiterate. An increasingly popular criminal practice to gain access to a user's finances is phishing, whereby the user is in some way persuaded to hand over their password(s) to a fraudster.

ADVANTAGES OF ONLINE BANKING

Convenience: Unlike your corner bank, online banking sites never close; they're Ubiquity: If you're out of state or even out of the country when a money problem arises, Transaction speed: Online bank sites generally execute and confirm transactions at or Efficiency: You can access and manage all of your bank accounts, including IRAs, CDs, Effectiveness: Many online banking sites now offer sophisticated tools, including

available 24 hours a day, seven days a week, and they're only a mouse click away.

you can log on instantly to your online bank and take care of business, 24/7.

quicker than ATM processing speeds.

even securities, from one secure site.

account aggregation, stock quotes, rate alerts and portfolio managing programs to help you manage all of your assets more effectively. Most are also compatible with money managing programs such as Quicken and Microsoft Money. 19

Why to stand in line, when you can operate online

DISADVANTAGES OF ONLINE BANKING

Start-up may take time: In order to register for your bank's online program, you will

probably have to provide ID and sign a form at a bank branch. If you and your spouse wish to view and manage your assets together online, one of you may have to sign a durable power of attorney before the bank will display all of your holdings together.

Learning curve: Banking sites can be difficult to navigate at first. Plan to invest some Bank site changes: Even the largest banks periodically upgrade their online programs,

time and/or read the tutorials in order to become comfortable in your virtual lobby.

adding new features in unfamiliar places. In some cases, you may have to re-enter account information.

The trust thing: For many people, the biggest hurdle to online banking is learning to

trust it. Did my transaction go through? Did I push the transfer button once or twice? Best bet: always print the transaction receipt and keep it with your bank records until it shows up on your personal site and/or your bank statement. TYPES OF RISKS ASSOCIATED WITH E-BANKING. S.No. 1. Type of Risk Operational About Risk It takes the form of inaccurate processing of transactions, nonenforceability of contracts, compromises in data integrity, data privacy and confidentially, unauthorized access. Security risk arises on account of unauthorized access to banks critical information stores like accounting system, risk management system, portfolio management system, data alteration intentionally or unintentionally. 20 Problem Solution Avoid weakness in design implementation and monitoring of banks information system. Maintain adequate technology. Consider only requisite expertise.

2.

Security

Control and technological tools to ensure data integrity authorization control.

Why to stand in line, when you can operate online 3. System Architecture & Design Reputational Risk Banks faces the risk of wrong choice of technology, improper system design and inadequate control process. Negative Public Opinion, lack of public confidence, inadequate information to customers about product and services. Not to use out-dated , not scaleable and not proven technology. Educate its own staff. Avoid over dependence on vendors. Test the system befor implementation. Base up facilities, contingency plans including plans to address the customer problems during system disruption. Deployment of ethical Hackers for pulling the loopholes and other security measures. A customer should adequately informed about his rights and obligations.

4.

5.

Legal

6. 7.

Money Laundering. Cross border

Legal risk arises from violation of or nonconformance with laws, rules, regulations or prescribed practices or when legal rights and obligations of parties to a transaction are not well established. Detecting and preventing undesirable criminal activities. Uncertanities about legal requirements in some countries and jurisdiction ambiguities with respest to responsibilities of different national authorities.

Design proper customer identification and screening techniques. Select proper service provider which can provide servicesbeyond borders.

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REVIEW OF LITERATURE
REVIEW OF LITERATURE 1. The role of consumer innovativeness and perceived risk in online banking usage. Authors: Alds-Manzano, Joaqun; Source: International Journal of Indian Culture and Business Management, Volume 2, Number 3, 27 February 2009 , pp. 307-325(19) Publisher: Emerald Group Publishing Limited Purpose - The purpose of this paper is to analyse how consumer innovativeness can be used as a variable to positively influence internet banking adoption both directly and reducing consumer perceived risk. Design/methodology/approach - The impact of innovativeness and risk on internet banking adoption has been tested through structural equation modelling techniques. The sample consists of 511 Spanish internet banking services users accessed through an internet survey. Risk has been measured as a formative construct. Findings - Results reveals consumer innovativeness as a key construct to improve ebanking adoption both directly and by its effective role in reducing consumer risk perception of using internet channel in the financial services context. 22

Why to stand in line, when you can operate online Practical implications - Practical guidelines are provided to bank managers on how to use consumer innovativeness level as a segmentation variable to increase the use of internet banking among actual customers who are non users or light users of the electronic channel.

2. Attributes affecting the growth of online banking: a consumer perspective Authors: Dutta, Kirti; Makkar, Urvashi Source: International Journal of Technology Marketing, Volume 3, Number 4, 5 December 2008 , pp. 376-391(16) Publisher: Inderscience Publishers Technology in Indian banks is catching up fast with the developments around the world. This adoption not only allows banks to offer new types of banking and financial products, but also the highest level of services. The current paper focuses on the other side of the coin, i.e., the adoption of Internet Banking (IB) by the consumers. The paper delves into the trends in IB and delineates the factors that affect the use of IB by customers. The 19 attributes that were studied for IB adoption were reduced to seven factors. It was observed that the sought-after benefits - encouragement, ease and accuracy, convenience and control, lifestyle and social factors, and bank reputation - were the five most important factors. On the other hand, factors such as the lack of knowledge and trust, security and privacy issues and the lack of training and incentives, were found to act as major inhibitors in IB adoption. 3. Investigating the drivers of internet banking adoption decision: A comparison of three alternative frameworks. Authors: Gounaris, Spiros; Koritos, Christos Source: The International Journal of Bank Marketing, Volume 26, Number 5, 2008 , pp. 282304(23) Publisher: Emerald Group Publishing Limited Purpose - The paper seeks to compare, through empirical evidence, two widely adopted models (the Technology Acceptance Model (TAM) and the Diffusion of Innovations (DoI) model) to an underutilized one (Perceived Characteristics of the Innovation) in order to examine which is better in predicting consumer adoption of internet banking (IB), while investigating innovation attributes vis--vis other important predictors of adoption of innovations, such as consumer personal characteristics. Design/methodology/approach - The data derive from both users and non-users of IB through a web survey. The paper assesses the psychometric properties of the measures through confirmatory factor analysis and then employs logistic regression analysis in order to assess and compare the ability of the models to accurately predict consumer adoption of IB. The paper also incorporates other non-usability types of characteristics (i.e. social, psychological) into TAM and DoI, and identifies the moderating role of shopping context, between innovation characteristics and decision to adopt.

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4. Re-examining traditional service quality in an e-banking era. Authors: Wong, David H.; Rexha, Nexhmi; Phau, Ian Source: The International Journal of Bank Marketing, Volume 26, Number 7, 2008 , pp. 526545(20) Publisher: Emerald Group Publishing Limited Purpose - This paper aims to re-examine the role of traditional service quality in an e-banking environment by providing a review of how traditional service quality perceptions have evolved through the current and continuing stream of change in banking technology and the corresponding changes in the nature of how banks interact with their customers. Design/methodology/approach - Data were collected from a mail survey sent out to a commercially purchased mailing list of 2,500 business names and addresses. The overall usable response rate was 30.6 per cent. Quadrant analysis was performed on the service quality dimensions from the SERVQUAL scale. Findings - While the importance ranking of the five SERVQUAL dimensions has not changed dramatically over the years, large discrepancies were found between customer expectations and their perceived performance of traditional banking services.

5. Consumer payment choices: paper, plastic, or electrons? Authors: Hogarth, Jeanne M.; Kolodinsky, Jane; Gabor, Tatiana Source: International Journal of Electronic Banking, Volume 1, Number 1, 24 September 2008 , pp. 16-35(20) Publisher: Inderscience Publishers Using data from the Surveys of Consumers, this paper examines the portfolio of payment choices that different groups of consumers use and identifies the socio-economic, demographic, and attitudinal characteristics of groups of consumers that fall within those choice sets. We find that younger, married, more highly educated, higher income, higher asset households were more likely to adopt a broad range of electronic payment choices. We also find that consumers' attitudes and perceptions of e-banking, in terms of security and privacy, convenience, and familiarity and ease of use, were significant correlates of payment choices 6. The determinants of customer interactions with internet-enabled e-banking services Authors: Liao, Z; Wong, W K Source: Journal of the Operational Research Society, Volume 59, Number 9, September 2008 , pp. 1201-1210(10) Publisher: Palgrave Macmillan 24

Why to stand in line, when you can operate online

This paper empirically explores the major considerations associated with Internet-enabled ebanking systems and systematically measures the determinants of customer interactions with ebanking services. The results suggest that perceived usefulness, ease of use, security, convenience and responsiveness to service requests significantly explain the variation in customer interactions. Exploratory factor analysis and reliability test indicate that these constructs are relevant and reliable. Confirmatory factor analysis confirms that they possess significant convergent and discriminatory validities. Both perceived usefulness and perceived ease of use have significant impacts on customer interactions with Internet e-banking services. Perceived security, responsiveness and convenience also represent the primary avenues influencing customer interactions. In particular, stringent security control is critical to Internet ebanking operations. Prompt responses to service requests can encourage customers to use Internet e-banking services. The findings have managerial implications for enhancing extant Internet e-banking operations and developing viable Internet e-banking services.Journal of the Operational Research Society (2008) 59, 1201-1210. doi:10.1057/palgrave.jors.2602429 Published online 17 October 2007

OBJECTIVE OF THE STUDY

OBJECTIVE OF THE PROJECT

1) 2) 3) 4)

To know the main purposes for which e banking is used by the customers. To identify the problems that customers face while using E Banking. To determine the potential user segment for E Banking. To identify benefits unique to customers while using the concept of E-banking.

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RESEARCH METHODOLOGY
RESEARCH METHODOLOGY.
Research methodology is the specification of method of acquiring the information needed to structure or solve the problem at hand. It is not concerned to decision of the fact, but also building up to date knowledge and to discover the new facts involved through the process of dynamic change in the society. This chapter [presents a study of the method used for collection and analysis of data related to a research projects entitled (E Banking). This study has been conducted within a short time frame. Thus scope of the study is limited since secondary data were relied upon it is difficult to maintain uniformity in sample size for comparative analysis of various aspects relating to E-Banking. Also 26

Why to stand in line, when you can operate online qualitative analysis has been used in the main to arrive at conclusion rather than rigors statistical analysis.

Scope of the Study The area of survey for this research project is restricted to Bangalore only and includes some corporate people from different corporate like Reliance,HDFC bank,ICICI bank, it also includes students from Alliance university. Their are also some Doctors and C.A,s Included in the Study.

FIELD OF RESEARCH Research was carried out through a survey at the areas :

CORPORATE ENTERPRISE
INTEL TECHNOLOGY

RELIANCE COMMUNICATIONS ICICI BANK HDFC BANK PUNJAB NATIONAL BANK STATE BANK OF INDIA AIRTEL
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Why to stand in line, when you can operate online

STUDY ALSO INCLUDES THE BUSINESSMAN The survey was also done on DOCTORS OF NARAYANA HRUDAYALAYA HOSPITAL BANGALORE, ACCOUTANTS, PROFFESORS OF ALLIANCE COLLEGE BANGALORE OPEN MARKET:- The survey was also done in big markets of Bangalore. FORUM MALL BANGALORE GOPALAN MALL BANGALORE
Data Analysis and Interpretation: The data collected has been analyzed through the tabulation based on percentage and actual numbers or scores. Interpretation of the collected and the analyzed data have been done through presentation in the form of appropriate figure i.e. pie chart

SAMPLING TECHNIQUES * Convenience sampling

SAMPLE SIZE * 150

SOURCE OF DATA * Primary data is my investigation and secondary data is collected from various

websites and books. 28

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DATA COLLECTION INSTRUMENT

Structured Schedules.

ANALYSIS AND INTERPRETATION

INTERPRETATION OF DATA SURVEY WITH ANALYSIS Q1. Do you have a Bank Account?
TABLE NO:1 BANK ACCOUNT YES NO NO OF PEOPLE 138 12 %OF RESPONDENTS 92% 8%

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Why to stand in line, when you can operate online TOTAL 150 100%

CHART SHOWING RESPONSE OF PEOPLE

Yes, 138, 92%

No, 12, 8%

Yes No

When I asked this question to 150 people, 138 replied in Yes. 12 persons said no. They are aware of banks but not availing the services due to personal reasons. This thing clarifies that people are aware about advantages provided by the bank and maximum are using it. Q2. In which Sector do you have bank Account? TABLE NO:2
SECTOR Private Public Both NO.OF % OF RESPONDENTS RESPONDENTS 53 59 26
30

38% 43% 19%

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Total

138

100%

SECTORS IN WHICH PEOPLE HAVE BANK ACCOUNT

26, 19%

53, 38%
Private Public Both

59, 43%

In this Question out of 138 People, 59 with the Percentage of 43 said that they are using Public Banks,53 respondents with the Percentage of 38 said that they are using Private Bank services and 26 respondents are using the services of both Sector banks. So there is neck to neck fight between the banks of the country, most of the corporate people are availing the private bank services. Q3. Name the Bank in which you have bank Account?
TABLE NO:3

NAME OF BANK
State Bank (SBI,SBP,SSS All) ICICI HDFC Punjab National Bank Canara Bank HSBC Citi Bank Dena Bank IDBI Bank Axis Bank 31

NO OF PEOPLE
34 26 22 20 6 6 4 2 7 11

Why to stand in line, when you can operate online Allahabad Bank Kotak Mahindra Bank Bank Of Baroda Indian Overseas Bank Oriental Bank of Commerce 4 10 1 5 6

WHEN WE INCLUDES BOTH OPTION IN THE PREVIOUS QUESTION THE RESULT IS: TOTAL PUBLIC: 85 TOTAL PRIVATE: 79

B GRAPH S OWING B AR S H ANK IN WH S ICH PEOPL H E AVEB ANKACCOUNTS

40 34 35 30 25 20 15 10 5 0

26 22 20 11 6 6 4 7 2 4 10 5 1 6

Q4. Is your Bank Providing E-Banking Services?

TABLE NO:4 TYPE OF RESPONSE YES NO NO OF PEOPLE 138 0 %OF RESPONDENTS 100% 0%

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Each and every bank is providing the E Banking services so out of the people surveyed all said that their bank is providing the E Banking Services, this shows the scope of E Banking services in India

Q.5 Are you using the E Banking Services provided by yours bank? (If No Move to Q.8,If yes ans all Questions.)
TABLE NO:5 TYPE OF RESPONSE YES NO NO OF PEOPLE 90 48 33 %OF RESPONDENTS 65% 35%

Why to stand in line, when you can operate online TOTAL 138 100%

NOOFRES POND ENTS(OUTOF138)

100 90 80 70 60 50 40 30 20 10 0

NO OF RESPONDENTS

90 YES

48 NO

The survey shows that out of 138 people who have the bank account 90 are using the E banking services and 48 are not using the E Banking services, This shows the increase of E banking In India ,But the Results can not be perfectly reliable because the major chunk of people in the survey is the cooperates and businessman which include Banks, Stock Exchange, Manufacturing Companies etc,May be the major survey done in Government organizations and students the results might have shown the different trend.

Q6. For what purpose you are using E-banking Services?

TABLE NO:6

PURPOSE
Payments of Bills Fund Transfer

NO OF RESPONDENTS
19 28 34

% OF RESPONDENTS
21% 31%

Why to stand in line, when you can operate online Account Inquiry Share Trading Others, Like Rail Booking Total 9 21 13 90 11% 23% 14% 100%

%OFRES POND ENTS

Others, Like Rail Booking, 14% Payments of Bills, 21% Share Trading, 23% Fund Transfer, 31% Account Inquiry, 11%

Payments of Bills Fund Transfer Account Inquiry Share Trading Others, Like Rail Booking

According to the survey done maximum i.e. 31%people uses E Banking For the purpose of Fund transfer, today many people are also using the E banking services due to the Stock Market trading as many big stock companies access the transfer of stocks through bank accounts . Q7. How frequently do you avail the services of E-Banking?
TABLE NO:7 FREQUENCY DAILY NO OF RESPONDENTS 9 % OF RESPONDENTS 10%

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Why to stand in line, when you can operate online WEEKLY MONTHLY DEPENDS TOTAL 30 34 17 90 33% 38% 19% 100%

% OF RESPONDENTS SHOWING THE FREQUENCY OF USE OF SERVICES 9, 10% 17, 19%

Daily Weekly Monthly Depends

30, 33% 34, 38%

According to the survey maximum people that is 33% people use the service weekly as according to their use , only the business man uses the services daily as they has to see their daily transactions of their payments. Q8. What is the transaction limit when you use online Banking?
TABLE NO:8
TRANSACTION LIMIT NO OF RESPONDENTS 9 % OF RESPONDENTS

Below-25000

10%

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Why to stand in line, when you can operate online

25000-50000 50000-100000 More then 1Lakh TOTAL 30 34 17 90 33% 38% 19% 100%

BAR GRAPH SHOWING THE TRANSACTION LIMIT OF CUSTOMERS THROUGH E BANKING (OUT OF 90)

According to the study maximum i.e. 34 OUT OF 90 people uses transaction between Rs 50000-1lakh.
Q.9: What are the reasons for not using the E Banking services? TABLE NO:9 REASON Fear of hacking NO OF RESPONDENTS 15 37 % OF RESPONDENTS 31%

Why to stand in line, when you can operate online

Lack of knowledge Thinks that banks charge hefty for the service No Tendency to change TOTAL

21 8 4 48

44% 17% 8% 100%

% OF RESPONDENTS SHOWING REASONS FOR NOT AVAILING THE SERVICE

No Tendencyto change 8% Thinks that banks charge hefty for the service 12% Others 5% Fear of hacking 31%

Lack of knowledge 44%

According to the survey many people are not aware how to use the e banking services they are knowing how to operate the computers but dont know the details to use the e banking , as maximum people i.e. 44%people replied to this option , whereas on the other hand 31%people are not using due to hacking problems but banks are coming up with this solution like using other techniques like fingerprinting and retina system. Q10. Do you think E-Banking is Advantageous? If No Skip Q11
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TABLE NO:10
Options Yes No No. of respondents 100 38

NOOF RES POND ENTS

100 80 60 40 20 0 Yes No 38 100

NOTE: The respondents who think that E Banking is not advantageous are the people who are not using the E Banking Services. As there are 38 people who thinks it is not advantageous ,but acc to survey people not using the E Banking services are 48 , in this 10 people who are not using the services thinks that E Banking is advantageous.
Q11. Rank the following advantages of E Banking according to yours choice?
TOTAL RESPONDENTS ARE 100 TABLE NO 9 39

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ADVANTAGE

NO OF PEOPLE WITH RANK 1

RANK 2

RANK 3

RANK 4

RANK 5

Anytime Transactions

42

29

25

Automatic updating of accounts Safer Others like no problem of queue ,less burden of cheques and pass books Quick Transactions

16

43

25

27

67

35

40

13

11

15

19

44

15

According to the analysis done on the qualifying 100 people maximum says anytime transaction as number 1, and on the other hand survey shows that people also gives preference to less burden of queue, receipts, and pass books entries etc.

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100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

0 4 25 25

1 11 13 67

7 15

29

43

40

44

RANK 5 RANK 4

42

16 9 7

27 2 3 1

19 35 15

RANK 3 RANK 2 NO OF RESPONDENTS WITH RANK 1

Q.12: What are the suggestions you wants to give to the banks for the removal of disadvantages if any, and for the improvement and expansion of the E Banking services? Ans: This was the open ended question the main aim of this question was to identify the suggestions of the people who are not using the services to remove the flaws, and to improve the services who are using the E Banking Facility. There are many suggestions given by the different respondents two best one is given as below

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First one is given by Mr. Mahesh Thakur who is Retired Flight Lieutenant in Indian Air Force, Presently working as a Engineer in Reliance communication Having the bank account in HDFC BANK amd ORIENTAL BANK OF COMMERCE But not using the E Banking services. He says that Due to Many frauds through the internet specially in the private banks customer is always hesitating to use the service , no doubt the service is very good , but the banks should have to create the trust among the minds of the people that E banking is save through various other techniques can be any , rest Banks should do more advertisements to increase the popularity ,and make it popular as ATMs The second one is of Mr. Kuljit Singh who is a manager in PNB. Mr. Kuljit Singh says that First of all thanks to the college authorities who conducts this type of studies and this data is very useful for us to improve, so as the banking is improving day by day due to the competition so in order to make the customer fully satisfied there is very much need on this type of services as sometimes due to heavy load on banks on some days customer has to wait for a long time so E Banking will be very helpful in overcoming this problem

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SUGGESTIONS

1. The banks should make their websites more secure to avoid the chance of
hacking and skimming of passwords.

2. Seminars should be conducted on mass scale to spread more awareness

about e banking and its advantages.

3. The system should be made easier and user friendly. 4. Newer and more innovative services should be provided. 5. Trust on customers that Their money is safe through E Banking 6. Banks should take the initiative to spread the awareness of E Banking as
they also know the necessity of E Banking in the Future.

7. Try to change the minds of the customers by showing the advantages of E

Banking.

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FINDINGS AND LIMITATIONS

FINDINGS
1. 2.

During my survey I found 138 out of 150 people are having bank accounts. In case of common people maximum are having their accounts in Public banks while in the case of Professionals and businessman more preference is towards private banks.

3.
4. 5.

In public sector banks, SBI is most preferred and in case of Private sector ICICI is on the top. 100%people are aware that their bank is providing the E Banking services. Out of 138 respondents 90 are using the E Banking Service and 48 are not using. Maximum people use e banking for transfer of funds and Share Trading. Many people who are not using the E banking service agree on the fact that e banking is advantageous. The main reason for not using the E Banking service is lack of knowledge as 44%people respond to it and hacking problem. Banks are very much working on to remove the hacking problems and other flaws in the way of E Banking. Each and every customer wants a quick transaction they are not ready to wait so banks are coming with new technologies to satisfy the customers this reasons has also lead to change the way of Public Banks , like today only SBI is the Only bank which provides the 9AM to 7PM Service in the recession time as ICICI has also withdraw the 8 to 8 facility.
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6. 7.

8. 9.
10.

Why to stand in line, when you can operate online

LIMITATIONS Sincere efforts have been made to collect authentic and reliable information from respondents. However, the report is subject to the following limitations. 1) 2) 3) 4) 5) 6) 7) Some respondents were reluctant to give information, so their responses may be biased. Time could be major limitation. It may be affect the influence through drawn in the study. Although the questionnaires were prepared after a pilot testing, but a few points could have been missed. The study is restricted to Ludhiana Districts only. Study suffers limitations of time and resource constraints. Subjectivity in the response is another limitation of the study. The respondents are asked to give their practical views but the results may have been affected by personal biasness of the respondents.
8)

Sometimes the respondents are normally busy, so there were chances that the information obtained in some cases might have limited from actual.

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CONCLUSION
CONCLUSION After doing the survey and interpreting the data, I can conclude that e banking is an advantageous feature provided by the banks. People are using it and want more innovations in it, including the people who are not using the facility also want to use the E Banking facility if proper guidance and trust is made on them, I can also conclude that Public banks are still favorable for common people due to their improved services but the preference of Professionals and businessman is Private sector banks due to quicker services.

THANK YOU

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BIBLIOGRAPHY
BIBLIOGRAPHY 1) Marketing Management 2) Marketing Management 3) Research methodology : 4) Business Today 5) Internet
5.1 www.google.com 5.2 www.hdfcbank.com 5.3 www.ingenta.com 5.4 www.bankrate.com 5.5 www.emarldinsight.com 5.6 www.wikepedia.com

: By Philip Kotler : By Kalyani Publishers : By C.R. Kothari

5.7 www.altavista.com

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SCOPE OF FURTHER STUDY This project can be further studied to find out the steps taken by the bank to remove the flaws in E Banking, and how to promote it,The project can further be studied to find out the new techniques adopted by the bank to attract the customers.

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SCHEDULE
Q1. Do you have a Bank Account? Yes No Q2. In which Sector do you have bank Account? Private Public Both

Q3. Name the Banks in which you have bank Account?

Q4. Is your Bank Providing E-Banking Services? Yes No Q5. Are you using the E Banking Services provided by yours bank? (If No Move to Q.9,If yes ans all Questions.) Yes No Q6. For what purpose you are using E-banking Services? 49

Why to stand in line, when you can operate online Payments of Bills Fund Transfer Account Inquiry Share Trading Others, Like Rail Booking Q7. How frequently do you avail the services of E-Banking? Daily Weekly Monthly Depends Q8. What is the transaction limit when you use online Banking?
Below-25000 25000-50000 50000-100000 More then 1Lakh

Q.9: What are the reasons for not using the E Banking services? Fear of hacking Lack of knowledge Thinks that banks charge hefty for the service No Tendency to change Q10. Do you think E-Banking is Advantageous? If No Skip Q11. Yes No 50

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Q11. Rank the following advantages of E Banking according to yours choice?

Anytime Transactions Automatic updating of accounts Safer Others like no problem of queue ,less burden of cheques and pass books. Quick Transactions

Q.12:What are the suggestions you wants to give to the banks for the removal of disadvantages if any ,and for the improvement and expansion of the E Banking services?

NAME: ___________________________________ AGE:- _______Yrs CONTACT NUMBER: ______________________ QUALIFICATION: _________________________

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