PROPOSED MAJOR RESEARCH PROJECT

TECHNOLOGICAL ACCUSTOMIZATION OF RURAL
PEOPLE WITH E-BANKING AGAINST BRANCH BANKING
(A Case Study of Coastal Districts in Andhra Pradesh)
By
DR D. VISHNU MURTY
Principal Investigator
DR K.VENUGOPAL Co-Investigator


INTRODUCTION
“Daniel(1999) defined Electronic-Banking as the delivery of bank’s information and
services by banks to customers via different delivery
platforms that can be used with different terminal devices such as PC and
a Mobile phone with Browser or Desktop Software, or Digital TV.”

E- Banking (Internet Banking) is the automated delivery of banking products & services
directly to the customers through electronic, interactive communication channels.
It includes the systems that enable financial institution, customers, individuals &
businesses to access accounts, transact business or obtain information on financial
products & services through a network including the Internet.
Services covered under E-banking includes
• Automated Teller Machines
• Credit Cards
• Debit Cards
• Smart Cards
• Electronic Fund Transfer (EFT) System
• Mobile Banking
• Cheque Truncation Payment system




The Banking Sector in India has undergone tremendous changes during the past
two decades mainly due to the forces like
Economic Liberalisation
Globalization
Revolution In Information Technology
Changing Customer Requirements
ADVANTAGES OF E-Banking
• The operating cost per unit services is lower for the banks
• It offers convenience to the customers as they are not go to the
bank’s premises.
• The customers can obtain funds at any time from ATM.
• The customer can easily transfer the funds from one place to
another place electronically.
SOME FACTS
•FOR FINANCIAL INCLUSION, ALMOST 60% OF THE
POPULATION DOES NOT HAVE BANK ACCOUNT.
•TAKE BANKING TO THE MASSES- ONLY 90000 BANK
BRANCHES IN INDIA COVERING THE WHOLE POPULATION.
•ACCORDING TO CITI BANK THE BANK BRANCH IS 10 TIMES
MORE EXPENSIVE THAN DOING TRANSACTION ON MOBILE PHONE.












NEED FOR THE STUDY
Growth Indicators FY 12 FY 13 Growth %
Total IT Expenses Incurred (By All
Banks)(Rs.Cr)
14,712 15,659 6.4
Total No-Frill Accounts opened
(mn)
68.99 97.53 41
Mobile Banking user base (mn) 39.10 54.98 41
Average daily No. of Mobile Fund
Transfers
68,167 154043 125
Average daily Value of Mobile
FundTransfer(Rs.Cr)
3.69 25.58 593
Avg.daily value of paper based
Fund Transfer (Rs.Cr)

78,997 102,137 Dbt cards23
Cdt cards14
Avg.daily Value of Electronic Fund
Transfer ( Rs.Cr)
SOURCE: IDRBT&ERNST YG
REPORT 2013
112,066 144,720 59
Rank Bank Name
1 State Bank of India(SBI)
2 Industrial Credit & Investment Corporation of
India(ICICI)
3 Axis Bank
4 HDFC
5 Bank of India
6 Punjab National bank
7 Bank of Baroda
8 Canara Bank
9 Union Bank of India
10 Citi Bank
Top 10 Banks providing Best Internet Banking
facilities in India (http://omgtoptens.com)
It is evident from the above facts and figures that the “Adoption
of TECHNOLOGY In Banking” is beneficial for most of the banks
and customers too with a considerable improvement in customer service
quality to urban population. The same benefits and services would be
extended to unbanked areas especially to semi-urban and rural
population where there is a high potentiality.
But Technology accustomization is very low among
Rural population. The reasons behind are yet to be
investigated therefore there is a Need for the study to
integrate Technology, people,Policy and processes and also to
deliver superior customer service to Rural population in
India .
RESEARCH GAP
Introduction and development of E-Banking began in 1990s (Pikkarainen et
al.2004,p.224). A research made in U.S in year 1999 stated that there began huge
increase in the use of e-banking in America.
Author Contribution
Sathye (1997) The study in Australia found that only two of the 52 banks started
internet banking services. He interpreted that education would
be a crucial factor for expanding internet banking in Australia. If
customers are convinced about the various advantages of internet
banking they will start asking for this service from their banks,
and will put pressure on the banks to go ahead with internet
banking.
Filotto et al.
(1997)
Illustrated that the adoption rates of ATM were higher
among young users.
Barnett (1998) Findings proved that younger consumers are more comfortable in
using e-banking.
Mookerji (1998) Explored that internet banking is fast becoming popular in India.
Nevertheless, it is still in its evolutionary stage. They expect that a
large sophisticated and highly competitive internet banking
market will develop in future.
Joseph et al.
(1999)
Examined the influence of internet on the delivery of banking
services. They found six primary dimensions of e-banking service
quality such as convenience and accuracy, feedback and complaint
management, efficiency, queue management, accessibility and
customization.
Mols (1999) Acknowledged that the internet banking is an innovative
distribution channel that offers less waiting time and a higher spatial
convenience than traditional branch banking with significantly
lower cost structure than traditional delivery channels. Internet
banking reduces not only operational cost to the bank but also leads
to higher levels of customer satisfaction and retention. As a result
internet banking is very attractive to banks and consumers, who
now have higher acceptance to new technology.
Jeevan (2000) Observed that the internet banking enables banks to offer low cost
and high value added financial services. US web-corporation argues
that finally banks are finding that a comprehensive online banking
strategy is indispensable for success in the increasingly competitive
financial services market. Changes in technology, competition and
lifestyles have changed the face of banking and banks in the present
environment are looking for alternative ways to provide
differentiated services.
Hasan (2002) Found that online home banking has came out as a significant
strategy for banks to attract and retain customers. About 75 percent
of the Italian banks have adopted some form of internet banking
during the period 1993-2000. The study also found that the higher
likelihood of adopting active internet banking activities is by larger
banks, banks with higher involvement in off-balance sheet activities,
past performance and higher branch network.
Mishra (2005) Explained the advantages and the security concerns about internet
banking. According to him, improved customer access, offering of
more services, increased customer loyalty, attracting new customers
are the primary drivers of internet banking. But in a survey
conducted by the online banking association, member institutions
rated security as the most important concern of online banking.
Nyangosi et al.
(2009)
Collected customers' opinions regarding the importance of e-
Banking and the adoption levels of different e-Banking technologies
in India and Kenya. The study highlighted the trends of e-banking
indicators in both countries. The overall result indicates that
customers in both countries have developed a positive attitude and
they give much importance to the emergence of e-banking.
E-BANKING IN INDIA
Author Contribution
Arora (2003) Made an attempt to prove that technology had a definitive role in
facilitating transactions in the banking sector; and the impact of
technology had resulted into the introduction of new products and
services by various banks in India.
Hogarth and
Hilgert (2004)
highlighted that electronic banking technology represents a variety of
different services, ranging from common ATM services and direct
deposit to Automatic Bill Payment (ABP), Electronic Transfer of Funds
(EFT) and computer banking (PC banking).
Aggarwal (2003) Looked for such avenues where e-banking could play significant role in e-
democracy. The author discussed two case studies on the implementation
of e-banking in digital democracy.
Laforet and Li
(2005),
The objective of the study was to identify the target customers for online
and mobile banking, and to compare the attitude of users and non-users
towards e-banking with respect to a number of factors such as technology,
security, convenience, etc.
Ashiya (2006) The author evaluated different modes of e-payment used across the
globe. The main objective of the study was to find the current
offerings and development provided by electronic payments.
Enders et al. (2006) Addressed a fundamental problem of the disruptive innovation
theory which lies in the difficulty to categorize new technologies
into sustaining and disruptive innovation.
Jain and Hundal (2006) Described the importance of mobile banking and barriers in the
adoption of mobile banking. The paper examined the forces that can
act as barriers in mobile banking service adoption.
Krishnamurthy (2006) Highlighted the advantages, risks, innovations and convenience
involved in e-banking. ATM, telephone, internet and cluster
banking helped banks to deliver the products more effectively. The
author, in his paper, also describedoperational efficiency of e-
banking.
Raghvan (2006) Highlighted the transformation in the banking sector due to effect of
information technology, tele-communication and electronic data
processing. He also attempted to visualize the perception of banks
in India in the year 2020 taking into account the impact of internet
banking, ATMs, EFT on the performance of banks.
Reeti Agarwal et
al (2009)
found that people in the age group of 31-45 years using e-banking most
frequently. Respondents opined that using e-banking for balance inquiry
to be the most useful, closely followed by inter-account transfer of funds
and they found e-banking least useful for lodging complaints. Slow
transaction speed was found to be the most frequent problem faced,
closely followed by non-availability of the server while using e-banking.
Srinivas (2009) discussed various e-banking channels and suggested security tips for
customers which include changing password frequently, abstaining from
revealing PIN either via mails or phone, avoiding cyber cafes for net
banking etc.
Kamakodi et al
(2008)
Found that a wide gap exists in human service in Indian banking while
technology based services are exceeding expectations.
Uppal and
Chawla (2009)
Found that the customers of public sector, private sector and foreign
banks in Ludhiana district of Punjab are interested in e-banking services,
but at the same time are facing problems like inadequate knowledge,
poor network, lack of infrastructure, unsuitable location, misuse of ATM
cards and difficulty to open an account.
Mishra (2011) Provided useful tips to ensure safety of IB transactions. IB users are
advised not to reply to any mail, phone call or letter, asking for the IB
information like login id or password, and not to click on any link
provided in any mail, claiming to be the link for the bank's website are the
important tips, among others.
Mohammed and
Shariq (2011)
In the city of Lucknow, U.P to examine the adoption of e-banking
channels, particularly ATM, it was found that ATM was the most adopted
technology by banks.
Shukla and
Shukla (2011)
Stated that E-banking offers a higher level of convenience for managing
one's finances even from one's bedroom. However, it continues to present
challenges to the financial security and personal privacy. Customers are
advised not to share personal information like PIN numbers, passwords
etc with anyone, including employees of the bank; change ATM PIN and
online login and transaction passwords on a regular basis; ensure that the
logged in session is properly signed out.
N. Jamaluddin
(2013)
More introduction of IT alone will not be sufficient to bring necessary
performance improvement and get the competitive advantage but
intelligent people are required to use such intelligent tools.
Committee Report
Dr. C. Rangarajan
Committee [1983]
Dr. Rangarajan committee had drawn up in 1983-84 the first
blue print for computerisation and mechanisation in banking
industry and looked into modalities of drawing up a phased plan
for mechanisation for the banking industry covering period
1985-89. The committee in its report in 1984 recommended
introduction of computerisation and mechanisation at branch,
regional office / zonal office and head office levels of banks.

W.S. Saraf Committee
[1994]
In 1994, the Governor, Reserve bank of India had appointed a
committee on technology issues under the chairmanship of W.
S. Saraf. The committee looked into technological issues related
to the payment system and to make recommendations for
widening the use of modern technology in the banking industry.
The Saraf committee recommended to set up institutions for
electronic funds transfer system in India.
COMMITTEE REPORTS
Shere Committee
(1995)
In 1995, RBI formed a committee under the chairmanship of K. S.
Shere, to study all aspects relating to electronic funds transfer and
propose appropriate legislation. The Shere committee had
recommended framing of RBI (EFT system) regulations under
section 58 of the Reserve bank of India Act 1934 (RBI Act.),
amendments to the RBI act and to the bankers book evidence act,
1891 as short term measures and enacting of a few new acts such
as EFT act, the computer misuse and data protection act etc. as
long term measures.
Narasimhan
Committee [1998]
In order to examine the various issues related to the technology
upgradation in the banking sector, the Reserve Bank of India
appointed Narasimhan committee in September 1998. The
committee consists of representatives from the Government,
Reserve Bank of India, banks and academic institutions associated
with the information technology. The committee dealt with the
issues on technology upgradation and observed that the most of
the technology that could be considered suitable for India in some
form or the other has been introduced in some diluted form or as a
pilot project, but the desired success has not been achieved
because of the reasons inter-alia lack of clarity and certainty on
legal issues.

The review of the above literature it is suggested that most of the studies
have been done on issues related to E-Banking in other countries and a little
work done in India. The above empirical, theoretical studies and committee
reports have been undertaken to analyse the impact of E-banking focused mainly
on productivity, profitability and services provided to the customers for urban
population only.

Much work has not been done in India with regard to the E-Banking
for rural and semi-urban population. Moreover, no work is started on
Technology accustomization in general and Andhra Pradesh in particular
therefore research gap is much between urban and rural population.
therefore the present study proposed to study various issues on E-banking
for semi-urban and rural population in India and Andhra Pradesh.


1. To study the behavioral changes and level of awareness of Rural
people with reference to the usage of technology in their daily walk
of life.
2. To study and examine the approaches of Branch Banking towards
the delivery of the services to Rural population.
3. To Investigate the process and factors which are affecting the
Technology accustomization among rural customers in Andhra
Pradesh.
4. To investigate the process of institutionalization of E-Banking
services.
5. To analyze and compare the service differences between E-Banking
and Branch Banking.
6. To suggest appropriate measures and strategies to achieve
maximisation of Technology accustomisation through integrating
Technology, people,policy and processes.

OBJECTIVES


RESEARCH METHODOLOGY

The Research Survey will be answered by a mix group of people i.e.
Rural people, Bankers and Technocrats from Nine Coastal Districts in
Andhra Pradesh.

SRIKAKULAM KRISHNA CHITTORE
VIZIANAGARAM GUNTURU YSR CUDDAPA
VISAKHAPATNAM PRAKASAM KARNOOL
EAST GODAVARI NELLORE ANANTAPUR
WEST GODAVARI

POPULATION : Bankers (Public & Private ),Rural Customers
(including SHGs) ,T echnology Suppliers ,Technocrats
and other Financial Institutions .
SAMPLE SIZE : 1500
SAMPLING METHOD : Simple Random Sampling
DATA COLLECTION : Primary Data & Secondary Data

Secondary Data :Banks’ annual Reports
Published Articles
Websites
Govt.Report
Personal Profiles
Consultants

DATA ANALYSIS : Quantitative & Qualitative Analysis by using SPSS
Descriptive Analysis by using PIE Chart,tables
and Percentages etc…

Schedule

Personal Contact & Discussion

Observation
Primary Data
Expected outcome
The expected outcome from the project could be…..
 More Awareness of about E-Banking in Rural areas
 Exploration of the Rural potency of Technological
accustomization at a certain period of time
 The chance of an extensive expansion of services if the
rural people are dexterous towards E- Banking
 Consumption of technological devices will have a
probability of increasing its sales if there is a trend
amalgamated with rural habitual changes and changes
in decision makings

Expected outcome
• Upgradtions of specific novice Technological and
Infrastructural facilities in rural areas
• Identify the factors and strategies to achieve
maximisation of Technology accustomisation through
integrating Technology, people,policy and processes.
• It will also addresses the regulatory and supervisory
concerns of E-Banking in Rural India.
• Research contribution to the Rural Banking & E-
Banking literature.


Consultancy

Conversion of bankers as clients and serving
them with the supplementation of Strategic
plans in particular with the
institutionalization of technology at par with
group behavioral changes exclusively in rural
areas of coastal Districts of Andhra Pradesh
Time & Activity Chart
Time
As per the norms and schedule prescribed by
the authorities
Activity
 Conducting a massive survey to different categories
of rural people, bankers and technocrats
 Methodological Applications in association with
modern research models
GENERATION
TIME & ACTIVITY CHART
DATA COLLECTION FROM
GROUP 1
PILOT SURVEY
DATA COLLECTION FROM
GROUP 2
DATA COLLECTION FROM
GROUP 3 &OTHERS AND
DATA ANALYSIS
RESULT ANALYSIS,
CONCLUSIONS,
DOCUMENTATON
FINANCIAL ASSISTANCE
Research Personnel :
Project Fellow
(Non Net/Non Get/@ Rs:
14000/-p.m +16000 thirdyear)


Hiring Services : 100000
Field Work and Travel : 510000
Equipment
(Laptop-DEL, Scanner ,printer
&DVDs and CDs :
150000
Contigency (including special
needs) :
150000
Honorium to retired teacher : 0000
Books and Journals : 62000
Total 1500000
528000
THANK YOU VERY MUCH
SUGGESTIONS ARE EARNESTLY SOLICITED