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TRAINING REPORT TRAINING REPORT ON AWARENESS OF PEOPLE REGARDING E- BANKINGAt AXIS BAMK Submitted to Punjabi University, Patiala In partial fulfillment of the requirements for the award of degree of MASTER OF BUSINESS ADMINISTRATION SUBMITTED TO MRS. SUBMITTED BY:- RAJ SINGH 1

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Page 1: Bba Report

TRAINING REPORTTRAINING REPORTON

“AWARENESS OF PEOPLE REGARDING E- BANKING”

At

AXIS BAMK

Submitted to Punjabi University, PatialaIn partial fulfillment of the requirements for the award of degree of

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED TO

MRS.

SUBMITTED BY:- RAJ SINGH

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DECLARATION

We, hereby declare that the work presented herein is genuine work done originally by us a

group of three persons RAJ SINGH , ROLL NO10403 has been published or submitted

elsewhere for the requirement of a degree programmer. Any literature, data or works done by

others and cited within this dissertation has been given due acknowledgement and listed in

the reference section.

(Student's name & Signature)

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ACKNO WLEDGEMENT

Nothing concrete can be achieved without an optimal combination of inspiration and

perspiration.

We would like to take a moment to thank those invaluable suggestions and support led to the

completion of this project. This project report wouldn’t have been completely but for his able

guidance and the precious time he has given to us from his very busy schedule. His selfless

service has made this journey quite interesting and a feeling to go a long way. We

acknowledge the contribution of the staff members who added to the luster of the project by

their suggestions and help.

Last but not least we are very grateful to all those who helped us in one-way or the other way

at every stage of our work. We are thankful to all the respondents whose valuable information

helped us considerably in the successful completion of our study.

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PREFACE

With the rapid globalization of the Indian economy, enterprises are faced with ever changing

competitive environment. Enterprises are adopting strategies aimed at developing competitive

advantages based on enhanced customer value in terms of product differentiation, quality,

speed, service and costs. In the post liberalization era, with the deregulation of the Indian

economy, the financial services sector is witnessing a complete metamorphosis and

technology is playing a very significant role in this regard. Over the last decade India has

been one of the fastest adopters of information technology, particularly because of its

capability to provide software solutions to organizations around the world. This capability

has provided a tremendous impetus to the domestic banking industry in India to deploy the

latest in technology, particularly in the Internet banking and e-commerce arenas. Banks are

growing in size by mergers and acquisitions, which have been driven by communication and

technology. Technology is playing a major role in increasing the efficiency, courtesy and

speed of customer service. It is said to be the age of E-banking.

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EXECUTIVE SUMMARY

Someone has rightly said that practical experience is far better and closer to the real world than mere theoretical exposure. The practical experience helps the students to view the realbusiness world closely, which in turn widely influences their perceptions and arguments theirunderstanding of the real situation. Research work constitutes the backbone of any management education programmer. A management student has to do research work quiet frequently during his entire span.

The aim of the research study is to analyze the awareness and preferences of people regarding E- Banking in Jalalabad (w) city or know the perception or satisfaction level of people towards the e-banking. For this purpose the 100 respondents from Jalalabad (w) city has been chosen. In the first phase, there is introduction to E-Banking, E-banking evaluation , E-banking products, Risk management, Driving forces, The Indian scenario, present scenario, Review of literature. After that a market research is performed with a sample size of 100 respondents. The research study was limited to Jalalabad (w). Here, in our survey, we have contacted the respondents through personal interviews with the help of questionnaire.

The main objective of the research to study to study the awareness level of service class, business class people and students regarding E-banking, to find out the frequency and the factors influencing the usage, to gauge the satisfaction level of people, to understand the problems encountered in its effective penetration. In the last phase of the report findings, suggestions and conclusions have been drawn.

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TABLE OF CONTENTS

SR. NO. PARTICULARS PAGE NO.

CHAPTER-I : INTRODUCTION OF THE SUBJECT

1.1

1.1.1

1.1.2

1.1.3

1.1.4

1.1.5

1.2.

1.3

1.4

1.4.1

1.4.2

1.4.3

1.4.4

INTRODUCTION

E-banking and its evolution

E-banking products

Risk management

Driving forces

The Indian scenario

NEED AND SCOPE OF STUDY

OBJECTIVES OF STUDY

RESEARCH METHODOLOGY

Research Definition

Sampling Design

Methods of Data Collection and analysis

Data Analysis and Interpretation :

9-36

CHAPTER-II : REVIEW OF LITERATURE

2.1 REVIEW OF LITERATURE 37-39

CHAPTER-III : DATA PRESENTATION, ANALYSIS AND INTERPRETATION

3.1 Data Presentation, Analysis and Interpretation 40-55

CHAPTER-IV : SUMMARY, CONCLUSIONS ,LIMITATIONS &

RECOMMENDATIONS

4.1

4.2

4.3

4.4

Findings of the Study

Limitations of the study

Recommendations

Conclusion

56-59

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CHAPTER- V BIBLIOGRAPHY

5.1 Bibliography 60-62

CHAPTER-VII :APPENDIX

6.1 Questionnaire 63-67

LIST OF TABLES

TABLE NO. PARTICULARS PAGE NO.

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.8.1

3.9

3.10

3.11

3.12

Accounts of customers

Awareness level regarding E-Banking

Source from which the respondents get the knowledge

about the e-banking services

Awareness of E-Banking services

Usage of E-banking services

Representation of frequency of usage

Factors influencing the level of usage

Benefits of E-Banking

Correlation matrix of factors influencing the level of

usage

Usage of different modes

Problems identified by the users of E-Banking services

Reasons for not using E-Banking services as rated by the

non users

Correlation Matrix of reasons for not using E-

Banking services as rated by the non users

Satisfaction level

40-55

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LIST OF GRAPHS

GRAPH NO. PARTICULARS PAGE NO.

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

3.10

3.11

3.12

Accounts of customers

Awareness level regarding E-Banking

Source from which the respondents get the knowledge

about the e-banking services

Awareness of E-Banking services

Usage of E-banking services

Representation of frequency of usage

Factors influencing the level of usage

Benefits of E-Banking

Usage of different modes

Problems identified by the users of E-Banking services

Reasons for not using E-Banking services as rated by the

non users

Satisfaction level

40-50

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CHAPTER-I

INTRODUCTION TO SUBJECT

1.1 INTRODUCTION

What is E-Banking

Electronic banking is one of the truly widespread avatars of E-commerce the world over.

Various authors define E-Banking differently but the most common definitions depicting the

meaning and features of E-Banking are as follows:

E-Banking is a combination of the two, Electronic technology and Banking.Electronic

banking is a process by which a customer performs banking transactions

electronically without visiting a brick-and-mortar institution.E-Banking denotes the

provision of banking and related services through extensive use of information

technology without direct recourse to the bank by the customer.

Bank

Information technology

Customer

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1.1.1 Evolution of E-bankingThe story of technology in banking started with

the use of punched card machines like Accounting Machines or Ledger Posting

Machines. The use of technology, at that time, was limited to keeping books of the

bank. It further developed with the birth of online real time system and vast

improvement in telecommunications during late 1970’sand 1980’s. It resulted in a

revolution in the field of banking with “convenience banking” as a buzzword.

Through Convenience banking, the bank is carried to the doorstep of the customer.

The 1990’s saw the birth of distributed computing technologies and Relational Data

Base Management Systems. The banking industry was simply waiting for these

technologies. Now with distribution technologies, one could configure dedicated

machines called front-end machines for customer service and risk control while

communication in the batch mode without hampering the response time on the front-

end machine.

Bank

Information technology

Customer

Traditional banking

Gunpowder

Personalized services, time consuming, limited access

Virtual or E-banking

Nuclear charged

Real time transactions, integrated platform, all time

access

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Intense Competition has forced banks to rethink the way they operated their business.

They had to reinvent and improve their products and services to make them more

beneficial and cost effective. Technology in the form of Electronic Banking has made

it possible to find alternate banking practices at lower costs.More and more people are

using electronic banking products and services because large section of the banks

future customers base will be made up of computer literate customers, the banks must

be able to offer these customers products and services that allow them to do their

banking by electronic means. If they fail to do this they will, simply, not survive. New

products and services are emerging that are set to change the way we look at money

and the monetary system.

Traditional banking

Gunpowder

Personalized services, time consuming, limited access

Virtual or E-banking

Nuclear charged

Real time transactions, integrated platform, all time

access

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1.1.2 E -

BANKING PRODUCTSAutomated teller machine (ATM)

Telebanking or Phone Banking

Mobile banking

Internet banking

Automated teller machine (ATM)

These are cash dispensing machines, which are frequently seen at banks and other locations

such as shopping centers and building societies. Their main purpose is to allow customer to

draw cash at any time and to provide banking services where it would not have been viable to

open another branch e.g. on university campus.

The machines allow the users to draw any sum up to limited amount, view the current

position on their account and order a new cheque book. To obtain money from the unit the

customer needs a special ATM card and personal identification number (PIN).

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The story of the humble cash-dispensing machine started around three decades back. In

India, HSBC set the trend and set up the first ATM machine here in 1987. Since then, they

have become a common sight in many of our metros. With more than 800,000 machines

worldwide, ATMs have made hard cash just seconds away all throughout the day at every

corner of the globe. For the customers advantage now the banks are looking for newer

services. ICICI bank launched its fully networked ‘ATM on wheels’ in Chandigarh, which

literally brings the ATM to the doorstep of the customer.

Some of the advantages of ATM to customers are

Ability to draw cash after normal banking hours.

Quicker than normal cashier service.

Complete security as only the card holder knows the PIN.

Does not just operate as a medium for obtaining cash.

Customer can sometimes use the services of other bank ATMs.

An ATM is simply a data terminal with two input and four output devices. Like any other

data terminal, the ATM has to connect to, and communicate through, a host processor.

The host processor is analogous to an Internet service provider (ISP) in that it is the

gateway through which all the various ATM networks become available to the cardholder

(the person wanting the cash).

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Most host processors can support either leased-line or dial-up machines. Leased-line

machines connect directly to the host processor through a four-wire, point-to-point, dedicated

telephone line. Dial-up ATMs connect to the host processor through a normal phone line

using a modem and a toll-free number, or through an Internet service provider using a local

access number dialed by modem.

Leased-line ATMs are preferred for very high-volume locations because of their thru-put

capability, and dial-up ATMs are preferred for retail merchant locations where cost is a

greater factor than thru-put. The initial cost for a dial-up machine is less than half that for a

leased-line machine. The monthly operating costs for dial-up are only a fraction of the costs

for leased-line.

A bank or financial institution may own the host processor, or an independent

service provider may own it. Bank-owned processors normally support only bank-

owned machines, whereas the independent processors support merchant-own

Telebanking or Phone Banking

Telephone Banking is relatively new Electronic Banking product. However it is fast

becoming one of the most popular products. Customers can perform a number of transactions

from the convenience of their own home or office; in fact from anywhere they have access to

a phone. Customers can do following

Check balances and statement information

Transfer funds from one account to another

Pay certain bills

Order statements or cheque books

Demand Draft Request

This facility is available with help of Voice Response System (VRS). This system

basically, accepts only TONE dialed input. Like the ATM customer has to follow

particular process, initially account number and telephone PIN are fed for the process

to start. Also the VRS system provides the user within additional facilities such as

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changing existing password with the new desired, information about new products,

current interest rates, etc.

Mobile banking

Mobile Banking comes in as a part of the banks initiative to offer multiple channel banking

providing convenience for its customers. A versatile multifunctional, free service that is

accessible and viewable on the monitor of mobile phone. Mobile phones are playing great

role in Indian Banking – both directly and indirectly. They are being used both as banking

and other channels.

Standard Chartered’s M-alert alerts its customers on exchange rates twice a day. The

objective is to meet its clients treasury requirements. A Standard Chartered customer

can also access its account through the mobile phone by sending an SMS.

ABN Amro uses mobile phones to alert its customers on their credit card transaction.

“Card alert”, which come in the form of an SMS are not necessarily a customer’s

demand.

Both HDFC and IDBI are offering instant mobile refill facility through ATM and

SMS banking.

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Internet banking

The advent of the Internet and the popularity of personal computers presented both an

opportunity and a challenge for the banking industry.

For years, financial institutions have used powerful computer networks to automate millions

of daily transactions; today, often the only paper record is the customer's receipt at the point

of sale. Now that its customers are connected to the Internet via personal computers, banks

envision similar economic advantages by adapting those same internal electronic processes to

home use.

Banks view online banking as a powerful "value added" tool to attract and retain new

customers while helping to eliminate costly paper handling and teller interactions in an

increasingly competitive banking environment. In India first one to move into this area was

ICICI BANK. They started web based banking as early as August 1997.

Debit Card

An electronic card issued by a bank which allows bank clients access to their account to

withdraw cash or pay for goods and services. This removes the need for bank clients to go to

the bank to remove cash from their account as they can now just go to an ATM or pay

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electronically at merchant locations. This type of card, as a form of payment, also removes

the need for checks as the debit card immediately transfers money from the client's account to

the business account .The major benefits to this type of card are convenience and security.

Along with the convenience of accessing account funds at anytime it also removes the hassles

associated with having to write checks as payment like showing ID and associated fees. Debit

cards are also considered to be a safer form of payment as a code is required to access the

account funds, while checks can be easily stolen. Debit card facilities the purchase or

payment by cardholder. he represent the card to merchant establishment after a purchase and

signs on payment slip. The merchant verify the signature electronically by inserting the card

into an electronic data capture machine that links up with card holder bank to a payment of

gateway. The bank debit the money from the card holder account and verifies the

transaction .thus at the point of purchase or debit card worth like credit card in one significant

aspect I.e. the credit card extends credit to card holder .while a debit card debit the money

from his account during the transaction. This permit that that a card holder can spent money

only if his account permits.

Credit Card

A credit card is an instrument which provides instantaneous credit facilities to his holder to

avail variety of goods at the merchant outlets .It is made up of plastic and hence popularly

known as plastic money .The eligibility condition for issuing these cards describe certain

minimum income ranges between Rs.50,000 to 100000 p.a. The aim of the issuer bank is to

provide this facilities to growing middle income group and people above them .The card

holder is issue a plastic card on which described the name of issuer bank, card no. ,the name

of its holder and his or her signature .The issuing bank endorse member which agree to

accept these cards for accepting the payment for goods and services sold .Member

establishment includes various commercial establishment ,shops ,travel

agency ,railways ,hotels and domestic and international airlines. when a card holder make

purchase or avail if any service at a member establishment .he signs a charge slip to customer

and presents the others to the respective issuing bank which makes payment to member

establishment after deducting its commission which may ranges 2% to 4%.

Types of internet banking

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Understanding the various types of Internet banking products will help examiners assess the

risks involved. Currently, the following three basic kinds of Internet banking are being

employed in the marketplace:

Informational — This is the basic level of Internet banking. Typically, the bank has

marketing information about the bank’s products and services on a stand-alone server.

The risk is relatively low, as informational systems typically have no path between the

server and the bank’s internal network. This level of Internet banking can be provided

bythe bank or outsourced. While the risk to a bank is relatively low, the server or web

site may be vulnerable to alteration. Appropriate controls therefore must be in place to

prevent unauthorized alterations to the bank’s server or Web site.

Communicative — This type of Internet banking system allows some interaction

between the bank’s systems and the customer. The interaction may be limited to

electronic mail, account inquiry, loan applications, or static file updates (name and

address changes). Because these servers may have a path to the bank’s internal

networks, the risk is higher with this configuration than with informational systems.

Appropriate controls need to be in place to prevent, monitor, and alert management of

any unauthorized attempt to access the bank’s internal networks and computer

systems. Virus controls also become much more critical in this environment.

Transactional — This level of Internet banking allows customers to execute

transactions. Since a path typically exists between the server and the bank’s or

outsourcer’s internal network, this is the highest risk architecture and must have the

strongest controls. Customer transactions can include accessing accounts, paying bills,

transferring funds, etc.

Growth in Internet Banking

Competition — Studies show that competitive pressure is the chief driving force

behind increasing use of Internet banking technology, ranking ahead of cost reduction

and revenue enhancement, in second and third place respectively. Banks see Internet

banking as a way to keep existing customers and attract new ones to the bank.

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Cost Efficiencies — Banks can deliver banking services on the Internet at transaction

costs far lower than traditional brick-and-mortar branches. The actual costs to execute

a transaction will vary depending on the delivery channel used. Rough estimates

assumes teller cost at Rs. 1 per transaction, ATM transaction cost at 45 paise, phone

banking at 35

paise, debit cards at 20 paise and Internet Banking at 10 paise per transaction. These

costs are expected to continue to decline.

Geographical Reach — Internet banking allows expanded customer contact through

increased geographical reach and lower cost delivery channels. In fact some banks are

doing business exclusively via the Internet — they do not have traditional banking

offices and only reach their customers online. Other financial institutions are using the

Internet as an alternative delivery channel to reach existing customers and attract new

customers.

Branding — Relationship building is a strategic priority for many banks. Internet

banking technology and products can provide a means for banks to develop and

maintain an ongoing relationship with their customers by offering easy access to a

broad array of products and services. By capitalizing on brand identification and by

providing a broad array of financial services, banks hope to build customer loyalty,

cross- sell, and enhance repeat business.

Customer Demographics — Internet banking allows banks to offer a wide array of

options to their banking customers. Some customers will rely on traditional branches

to conduct their banking business. For many, this is the most comfortable way for

them to transact their banking business.

Advantages of Internet Banking

Convenience: Unlike your corner bank, online banking sites never close; they're

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

Ubiquity: If you're out of state or even out of the country when a money problem

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

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Transaction speed: Online bank sites generally execute and confirm transactions at

or quicker than ATM processing speeds.

Efficiency: You can access and manage all of your bank accounts, including IRAs,

CDs, even securities, from one secure site.

Effectiveness: Many online banking sites now offer sophisticated tools, including

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.

Customer satisfications :-Greater customer satisfication by offering unlimited access

to the bank ,not unlimited by the walls of the customers they can avoid travelling

with cash

Unlimited network:-E-banking provides unlimited network to the bank and is not

limited to number of branches .any PC connected to a modem and a telephone having

an internet connection can provide cash withdrawal needs of the customer.

Reduces load:-Load on branches can be considerably reduced by establishing

centralized data base and by taking over some of the accounting function.

Disadvantages of Internet 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

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

Bank site changes: Even the largest banks periodically upgrade their online

programs, 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.

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Internet Banking Services

Most online banking sites offer these basic services:

View account balances, including checking, savings, IRAs and securities

Access account history

Transfer funds between accounts

Schedule future transfers

Pay bills electronically

Schedule automatic recurring bill payment

Many online banking sites also offer these capabilities:

Account aggregation: View balances and market values of online accounts held at

other institutions, including investments, credit cards, rewards programs and IRAs

Send payments to individuals via e-mail

Trade stocks and mutual funds

Track real-time stock quotes

Receive trust and stock statements online

View images of bill statements, checks and deposit slips

Download site information into money management programs such as Quicken

and Microsoft Money

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Receive Web alerts vie e-mail, wireless devices and private banking site

Live chat with customers

Lists of some banks offering ebanking in India

Bank Name Technology Vendor Service offering

ABN AMRO Bank Infosys (BankAway) NetBanking

Abu Dhabi Commercial Bank Infosys (BankAway) ADCB NetLink

Bank of India I-flex BOIonline

Centurion Bank Logica MyCBOL

Citibank Orbitech (now Polaris) Citibank Online

Corporation Bank I-flex CorpNet

Deutsche Bank   db direct

Federal Bank Sanchez FedNet

Global Trust Bank Infosys (BankAway) ibank@gtb

HDFC Bank i-flex/ Satyam NetBanking

HSBC   Online@hsbc

ICICI Bank Infosys, ICICI Infotech Infinity

IDBI Bank Infosys (BankAway) i-net banking

IndusInd Bank CR2 IndusNet

Punjab National Bank Infosys (BankAway) Internet Banking 

Standard Chartered Bank In-House Me Standard Chartered Online

State Bank of India Satyam/Broadvision onlinesbi.com

UTI Bank Infosys (BankAway) Iconnect

Bank of Punjab Online ebanking

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ElectronicBanking Risks

Electronic banking creates new risk control challenges for banks. From a supervisory

perspective, risk is the potential that events, expected or unexpected, may have an adverse

impact on the bank’s earnings or capital. The risks are credit, interest rate, liquidity, price,

foreign exchange, transaction, compliance, strategic, and reputation. These categories are

not mutually exclusive and all of these risks are associated with Electronic banking.

Credit Risk

Credit risk is the risk to earnings or capital arising from an obligor’s failure to meet the

terms of any contract with the bank or otherwise to perform as agreed. Credit risk is

found in all activities where success depends on counter party, issuer, or borrower

performance. It arises any time bank funds are extended, committed, invested, or

otherwise exposed through actual or implied contractual agreements, whether on or off

the banks balance sheet

Transaction Risk

Transaction risk is the current and prospective risk to earnings and capital arising from

fraud, error, and the inability to deliver products or services, maintain a competitive

position, and manage information. Transaction risk is evident in each product and service

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offered and encompasses product development and delivery, transaction processing,

systems development, computing systems, complexity of products and services, and the

internal control environment.

Compliance Risk

Compliance risk is the risk to earnings or capital arising from violations of, or

nonconformance with, laws, rules, regulations, prescribed practices, or ethical standards.

Compliance risk also arises in situations where the laws or rules governing certain bank

products or activities of the bank’s clients may be ambiguous or untested. Compliance

risk exposes the institution to fines, civil money penalties, payment of damages, and the

voiding of contracts. Compliance risk can lead to a diminished reputation, reduced

franchise value, limited business opportunities, reduced expansion potential, and lack of

contract enforceability. Most Internet banking customers will continue to use other bank

delivery channels. Accordingly, banks will need to make certain that their disclosures on

Internet banking channels, including Web sites, remain synchronized with other delivery

channels to ensure the delivery of a consistent and accurate message to customers.

Reputation Risk

Reputation risk is the current and prospective impact on earnings and capital arising from

negative public opinion. This affects the institution’s ability to establish new relationships

or services or continue servicing existing relationships. This risk may expose the

institution to litigation, financial loss, or a decline in its customer base. Reputation risk

exposure is present throughout the organization and includes the responsibility to exercise

an abundance of caution in dealing with customers and the community. A bank’s

reputation can suffer if it fails to deliver on marketing claims or to provide accurate,

timely services. This can include failing to adequately meet customer credit needs,

providing unreliable or inefficient delivery systems, untimely responses to customer

inquiries, or violations of customer privacy expectations.

Strategic Risk

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Strategic risk is the current and prospective impact on earnings or capital arising from

adverse business decisions, improper implementation of decisions, or lack of

responsiveness to industry changes. This risk is a function of the compatibility of an

organization’s strategic goals, the business strategies developed to achieve those goals,

the resources deployed against these goals, and the quality of implementation.

1.1.3 Risk Management

Financial institutions should have a technology risk management process to enable them to

identify, measure, monitor, and control their technology risk exposure. Risk management of

new technologies has three essential elements:

The planning process for the use of the technology.

Implementation of the technology.

The means to measure and monitor risk.

In a survey conducted by the Online Banking Association, member institutions rated security

as the most important issue of online banking. There is a dual requirement to protect

customers' privacy and protect against fraud.

A multi-layered security architecture comprising firewalls, filtering routers, encryption and

digital certification ensures that your account information is protected from unauthorized

access:

Firewalls and filtering routers ensure that only the legitimate Internet users are

allowed to access the system.

Encryption techniques used by the bank (including the sophisticated public key

encryption) would ensure that privacy of data flowing between the browser and

the system is protected.

Digital certification procedures provide the assurance that the data you receive is

from the banking system

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1.1.4 Driving Forces in E-Banking

The business strategist Michael Porter identified five competitive forces which tend to drive

down the profitability of any industry as comprising: barriers to entry, many small suppliers,

many small buyers, few substitutes and few competitors

Applying this version of Porter’s Five Forces Model to the banking industry, he observed that

one of the critical factors – barriers to entry – no longer exists in banking. Competitors can

come from any industry to "disintermediate" banks (i.e., eliminate banks as the interface

between customers and suppliers). Product differentiation is very difficult for banks, since

most of the products sold in retail banking are constrained by legal or industry regulations

and, in any case, are readily imitated Most countries have deregulated their banking sector so

government policies no longer form an entry barrier to banks’ competitors. Technological

know-how in banking also provides little protection to existing banks. It is argued that the

only significant entry barrier is likely to be the brand name of the service providers in retail

banking.

An application of Porter’s Five Forces model to the banking industry

Threat of new entrants – HIGH

Industry competitors - LOW

Bargaining power of buyers - HIGH

Bargaining power of suppliers - LOW

Threat of substitutes - LOW

Griffin (1996) observes that since the 1980s, banks have been merging to remain significant

in terms of assets, and to ensure that there are a small number of significant players in the

industry. Theoretically, the bargaining power of suppliers would be high in this industry, as

there are a small number of fairly large players in the industry.

(Kotler,1997). However, the tendency of banks to amalgamate, rationalizing operational costs

(Cronin, 1998) and thus diminishing the number of banking organizations in any country, is

being offset by means of the development of online banks and financial intermediaries in

areas such as home lending (Fellenstein and Ronwood, 2000).

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By contrast, the bargaining power of consumers is increasing. Switching costs are becoming

lower (with Internet banking gaining momentum) and consumer loyalties are harder to retain

(Nemzow, 1999)

The threat of substitutes to banking in terms of competition from the non-bank financial

sector is increasing rapidly.. Attitudes are also shifting from direct transactions to savings and

investment, as the baby boomers reach their forties and fifties

The application of Porter’s model to the banking industry shows clearly that this sector,

which has now reached the mature stage of its lifecycle, is under threat. Dial (1995) points

out that banking demonstrates the typical attributes of an oligopoly – such as risk avoidance

and relatively undifferentiated customer service – which have made it susceptible to

encroachment by software giants such as Microsoft, who are attempting to replace banks as

intermediaries

Some specific factors which have conspired to create the new competitive environment for

banking include: changing consumer needs and perceptions, globalization, technological

innovations, and competition from non-banking entities.

The Indian scenario

Increasingly, consumers expect online services from their financial institutions. The trend

toward electronic delivery of products and services is particularly important to the financial

services industry, where the shift is partly a result of consumer demand, but is also partly a

result of the ruthlessly competitive environment (Geyer,1997).

Banking institutions are countering their competitors by leveraging eCommerce technologies

and various service offerings online.

Electronic banking was first introduced by large companies to simplify the management of

their salary and payroll problems By contrast, home banking is a comparatively recent

concept which is essentially a ‘spin-off’ of the Web Though many banks offered ‘home

banking services’ from a PC during the 1980s and 1990s, the concept was initially a failure

due to the lack of a critical mass of PCs and computer literate customers, as well as to the

somewhat limited user interfaces initially available Home banking, however, is gaining in

popularity with increasingly literate consumers and a wider

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installed PC base.

Banks initially used dial-up services or provided software which was both expensive to

customers and lacking in user friendly features. Later, on-line services were set up from retail

branches to provide subscriber-based online services, although these still lacked generic

features and a user-friendly interface. With the evolution of the Internet and the World Wide

Web, online banking become crucial to growth in the sector Seitz and Stickel (1998) note that

consumer behaviour in banking changed partly as a result of changes in the amount of spare

time available to individuals. They observe that mobility, independence of time and place,

and flexibility have become key words in consumer banking.

Internet is increasingly considered a strategic weapon by banks, which are leveraging it as a

distribution channel to offer complex products at the same quality they can provide from their

physical branches, at a lower cost, to more potential customers, without boundaries. Indeed,

the Internet has been one of the key drivers in promoting eCommerce in the banking sector.

India is still in the early stages of E-banking growth and development. Competition and

changes in technology and lifestyle in the last five years have changed the face of banking.

The changes that have taken place impose on banks tough standards of competition and

compliance. The issue here is – 'Where does India stand in the scheme of ebanking.'

E-banking is likely to bring a host of opportunities as well as unprecedented risks to the

fundamental nature of banking in India. The impact of E- Banking in India is not yet

apparent. Many global research companies believe that ebanking adoption in India in the near

future would be slow compared to other major Asian countries (E-business, June, 2002). Nair

(1999) observes that Indian E-banking is still nascent, although it is fast becoming a strategic

necessity for most commercial banks, as competition increases from private banks and non

banking financial institutions.

According to Nasscom's Internet survey in 2001 on the Internet usage trends, the number of

active Internet subscribers in India is expected to increase to over 18 million and the user

base to over 30 million by 2004 – 05. It also found that more than 200 cities and towns in

India have Internet connectivity. The Nasscom - McKinsey study in 2002 revealed that

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despite the global economic challenges facing the IT software and services sector, the outlook

for the Indian industry remains optimistic.

The Reserve Bank of India has also set up a "Working Group on E-banking to examine

different aspects of E-banking. The group focused on three major areas of E-banking i.e. (1)

Technology and Security issues (2) Legal issues and (3) Regulatory and Supervisory issues.

RBI has accepted the guidelines of the group and they provide a good insight into the security

requirements of E-banking.

The importance of the impact of technology and information security cannot be doubted.

Technological developments have been one of the key drivers of the global economy and

represent an instrument that if exploited well can boost the efficiency and competitivity of the

banking sector. However, the rapid growth of the Internet has introduced a completely new

level of security related problems. The problem here is that since the Internet is not a

regulated technology and it is readily accessible to millions of people, there will always be

people who want to use it to make illicit gains. The security issue can be addressed at three

levels.

The first is the security of customer information as it is sent from the customer's PC to the

Web server. The second is the security of the environment in which the Internet banking

server and customer information database reside. Third, security measures must be in place to

prevent unauthorized users from attempting to long into the online banking section of the

website.

From a legal perspective, security procedure adopted by banks for authenticating users needs

to be recognized by law as a substitute for signature. In India, the Information Technology

Act, 2000, in section 3(2) provides for a particular technology (viz., the asymmetric crypto

system and hash function) as a means of authenticating electronic record.

Taxation of E-commerce transaction has been one of the most debated issues that are yet to be

resolved by India and most other countries. The explosive growth of e-commerce has led

many executives to question how their companies can properly administer taxes on Internet

sales. Without sales tax, online sellers get a price advantage over brick and mortar

companies. While e-commerce has been causing loss of tax revenues to the Government,

many politicians continue to insist that the Net must remain tax-free to ensure continued

growth, and that collecting sales taxes on Net commerce could restrict its expansion.

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Nasscomm survey 2001 has suggested that India should support a permanent ban on taxes on

Internet access, a permanent ban on custom duties on electronic transmissions, international

tax rules that are neutral, simple and certain and simplification of state and local sales taxes.

The Central Board of Direct Taxes, which submitted its report in September 2001,

recommended that e-commerce transaction should be taxed just like traditional commerce.

Also RBI is about to become the first Government owned digital signature Certifying

Authority (CA) in India. The move is expected to initiate the electronic transaction process in

the banking sector and will have far reaching results in terms of cost and speed of

transactions between government- owned banks.

Thus efficiency, growth and the need to satisfy a growing tech-survey consumer base are

three clear rationales for implementing E-banking in India. The four forces-customers,

technology, convergence and globalization have the most important effect on the Indian

financial sector and these changes are forcing banks to redefine their business models and

integrate technology into all aspect of operation.

1.2 Need and scope of the study:-

This study is important and essential both for the bank management and the users of E-

Banking services. By conducting this study e-banking management would become aware

about the preferences, satisfaction level and problems encounter by e-banking users and

thus this study will help the executives to amend the services according to the customer

preferences

1.3 Objectives of the Study

The present study focused at studying the E-banking preferences over traditional banking

among service class in ferozepur city. The main objectives of the study were:

1. To know about what is e-banking.

2. To know what services are included in e-banking.

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3. To study the awareness level of people regarding e-banking.

4. To find the frequency and factor influencing the usage.

5. To know whether people are satisfied with e-banking services.

RESEARCH METHODOLOGY

Research means a search for knowledge or gain some new knowledge and methodology can

properly refer to the theoretical analysis of the methods appropriate to a field of study or to

the body of methods and principles particular to a branch of knowledge. A Research

methodology has a specified framework for collecting the data in an effective manner.

Research methodology means a "defining a problem, defining the research objectives,

developing the research plan, collecting the information, analyzing the information and

presentation of findings." Such framework is called "Research Design". The research process

that was followed by me consisting following steps;

A) Research Define

The definition of problem includes the study of “Awareness of people regarding E-Banking ”.

. B) Research Design

The present study seeks to identify the extent of preference of e-banking over traditional

banking among people- service and business class and also students in ferozepur City. The

research design is exploratory in nature. The research has been conducted on people within

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ferozepur . This step of the study consists of developing the most efficient plan for gathering

the relevant data. The following factors were under focus in the research plan:

a) Data design:

The data design involves different aspects like :• The nature of the data• The data sources• The data frequency and the data tools.

b) Nature of data:The nature of the data that has been used in this project is both primary and secondary in nature. The first hand information’s bearing on any research, which has been collected by the researcher, or his agent or assistant is called ‘primary data’.Once the primary data has been put to use, the original characters disappear and the that becomes secondary. The data which has been collected, compiled and presented earlier by any agency, is termed as ‘secondary data’.

C) Sampling Design: It is a definite plan for obtaining a sample from a given population. It

refers to the technique or the procedure the researcher would adopt in selecting items for the

sample. The sampling plan or design calls for the following decisions:

a. Universe: Research sample unit refers to the geographical area that I have

covered while conducting the research. The universe of my study is ferozepur

City.

b. Sample Unit: Who is to be surveyed?

The target population must be defined that will be sampled. It is necessary to

develop a sampling frame so that everyone in the target population has an equal

chance of being sampled. The sample unit pertaining to my study is the service

class people, business class and students of ferozepur City.

c. Sample Size: How many people will be surveyed? This refers to number of

respondents to be selected from the universe to constitute a sample. An optimum

sample is one that fulfills the requirements of efficiency, reliability and flexibility.

The sample size of 100 served the purpose of my study.

d. Sample Method: The sampling method used is non-probability convenience

sampling (where the researcher selects the most accessible population members

from which to obtain information).

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D) Methods of Data Collection and analysis : The researcher can get two types of data:

a)     Primary Data

b)    Secondary Data

a. Primary Data: Primary data is a data which did not exist earlier and is being

collected by the researcher first time for its specific objectives. The primary data is

collected through questionnaires by conducting personal interview and telephonic

interviews of the respondents of ferozepur region.

b. Secondary data: Any data which have been collected earlier for some purpose are

the secondary data. Indirect collection of data from sources containing past or recent

past information like bank’s brochures, annual publication, books etc. Secondary

sources used are: Text books, internet sites, newspaper articles, bank brouchers etc.

Data Collection

Keeping in mind the objectives of the study, the primary data was collected from a

sample of 100 respondents belonging to ferozepur by personally administering the

questionnaire which was framed and tested the study.

Sampling technique

In this research study, non – probability convenience sampling is opted for. Convenience

sampling is done purely on the basis of convenience or accessibility. The questionnaire

was of structured type and contained questions relating to different dimensions of E-

Banking awareness among service class such as level of usage, factors influencing the

usage of e-banking services, benefits accruing to the users of e-banking services,

problems encountered. An attempt was also made to elicit reasons for its non usage.

Analysis of Data and discussion

With the proliferation of technology in the society and its increased prevalence among all

the classes, the present study was conducted to measure the extent to which the banking

transactions were technology driven among the service class, business class and students.

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Data after collection has been processed and analyzed in accordance with the outline laid

down in the research plan. Data obtained during the study has been systematically

tabulated and interpreted with the help of tables and pie charts.

CHAPTER:-II

Review of Literature

Several studies and researches have drawn attention to the role and adoption of technology in

Banking sector, E-banking, its adaptation and the experiences of private sector banks with E-

banking. Some of the important studies during the recent years are being discussed in this

section

Wai-Ching Poon(2008) :- The purpose of this paper is to explore the determinants of

users' adoption momentum of e-banking in Malaysia. In this article the author shows

the problems when people uses the e-banking and the advantages of e-banking .

Privacy and security are the major sources of dissatisfaction, which have

momentously impacted users' satisfaction.

Michal Polasik (2009):- This research seeks to identify empirically the factors

underlying the decision to adopt online banking in Poland. With the help of this study

we find some factors that influence the people to use the online banking the factors

that has been observed are as follow. In our study is the link between the decision to

open an online account and the perceived level of security of internet transactions.

Milind Sathye (1999):- This research help to define the factors affecting the adoption

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of Internet banking by Australian consumers. This research shows that security

concerns and lack of awareness about Internet banking and its benefits stand out as

being the obstacles to the adoption of Internet banking in Australia.

Walfried M. Lassar, Chris Manolis, Sharon S. Lassar(2005):- This paper explores

the relationships between consumer innovativeness, self-efficacy on the internet,

internet attitudes and online banking adoption, while controlling for personal

characteristics While results confirm the positive relationship between internet related

innovativeness

Sylvie Laforet, Xiaoyan Li(2005):- The aim of this study is to investigate the market

status for online/mobile banking in China. With the recent and forecasted high growth

of Chinese electronic banking, it has the potential to develop into a world-scale

internet economy and requires examination.

Michal Polasik, Tomasz Piotr Wisniewski(2009):- This paper seeks to identify

empirically the factors underlying the decision to adopt online banking in Poland.

Generally, the behaviour of Polish internet users and that of consumers in more

developed countries exhibit similar traits.

Joaquin Aldas-Manzano, Carlos Lassala-Navarre, Carla Ruiz-Mafe, Silvia Sanz-

Blas(2009):- 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.

Siriluck Rotchanakitumnuai, Mark Speece(2003):- Many Thai banks are currently

implementing Internet banking. Banks that offer service via this channel claim that it

reduces costs and makes them more competitive. However, many corporate customers

are not highly enthusiastic about Internet banking.

Nelson Oly Ndubisi(2006):- This paper examines the determinant structure of

customers’ attitude system's characteristics on adoption of internet banking (IB) by

Malaysian bank customers. The results of the study reveal that the attitudinal factors

play a significant role in internet banking adoption..

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Barry Howcroft, Robert Hamilton, Paul Hewer(2002):- This paper seeks to

develop our understanding of consumer attitudes towards bank delivery channels.

Accordingly, a questionnaire was designed to obtain information about which

delivery channels consumers had used when acquiring four types of financial service.

Aref A. Al-Ashban, Mohammed A. Burney(2001):- Currently, the banking industry

is facing increasingly demanding customers and quickly eroding competitive edges.

Recent technological breakthroughs in various areas, however, offer opportunities for

the banks to excel in customer service quality and convenience.

Anita Lifen Zhao(2008):- The purpose of this paper is to identify risk factors that

discourage Chinese consumers from adopting internet banking services (IBS). This

market is experiencing fast growth; however, an in-depth understanding of Chinese

consumers within this is lacking..

Heikki Karjaluoto, Minna Mattila, Tapio Pento(2002):- The study explored the

effect of different factors affecting attitude formation towards Internet banking (online

banking) in Finland. The purpose of this paper is to determine those factors that

influence the formation of attitude towards Internet banking on the one hand, and their

relation to the use of online banking services, on the other.

Tommi Laukkanen(2007):- The aim of the paper is to explore and compare

customer value perceptions in internet and mobile banking. The purpose especially is

to compare customer perceived value and value creation between internet and mobile

bill paying service.

Katariina Maenpaa(2006):- The purpose of the paper is to explore Internet banking

services (IBS), consumers availing the services and the potential development

possibilities of the services in the challenging operational environment.

Kari Pikkarainen, Tero Pikkarainen, Heikki Karjaluoto, Seppo Pahnila(2006):- Although

research into the adoption and use of online banking services has grown in many parts of

the world, the centre of attention has been largely on determinants of online banking.

Guerrero, Mario Martínez (2002):-Mario Martínez Guerrero in his paper titled

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“Profiling the Adoption of Online Banking Services in the European Union” offers an

empirical investigation on the adoption of online banking services among European

citizens.

The above survey indicates that although a number of research studies relating to different

aspects of E-banking, its adoption, different experiences with e-banking, its viability and

ethics involved in e-banking, but no study has been conducted which is class specific. As it is

evident, that service class people don’t have sufficient time and access to banks during the

traditional banking hours, so their e-banking adoption and usage should be more.

CHAPTER:-III

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

The study has been conducted on the topic entitled, “Awareness of people regarding E-

Banking,” In this research study, the primary data was collected through questionnaire

method. The analysis of the research study has been shown below:

1 Q:1:- In which banks do you have your account?

a. State Bank of India c. HDFC Bank

b. Punjab National Bank d. ICICI Bank

Table no:-3.1

State bank of India Punjab national bank HDFC ICICI

55 30 15 15

48% 26% 13% 13%

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Graph no:-3.1

state bank of india48%

hdfc13%

punjab national bank

26%

icici13%

Q:2:- While opening up the account, were you aware of E-banking services provided by your

bank?

a. Fully aware b. Had an idea c. No

Awareness of people regarding e-banking service provided by the bank

while opening an account

Table no:-3.2

Fully aware Had an idea No idea Total

42 53 20 115

37% 46% 17% 100

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Graph no-3.2

AWARENESS ABOUT E-BANKING SERVICES

37%

46%

17%

FULLY AWARE

HAD AN IDEA

NO IDEA

Q:3:- If answer to question no.2 is c, how did you get to know about E-banking services of

your bank?

c. Personal visit

d. Executive from the bank

e. Advertisements

f. Friends/ Relatives

Source from which the respondents get the knowledge about the e-

banking services

Table no- 3.3

Personal visit Executive from

bank

Advertisement

s

Friends/

relatives

Others

12 14 37 18 46

10% 11% 29% 14% 36%

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Graph - 3.3

SOURCES OF AWARENESS ABOUT E-BANKING

9%

11%

29%

14%

37%

PERSONAL VISIT

EXECUTIVES FROMTHE BANK

ADVERTISEMENTS

FRIENDS/RELATIVES

OTHER SOURCES

Q:4:- If answer to question no.2 is a or b, which of the following E-banking

services are you aware of?

g. ATM

h. Debit Card

i. Credit Card

j. Phone banking

k. Mobile banking

l. Internet banking

Awareness of E-Banking services

Table no- 3.4

ATM Debit

Card

Credit

Card

Phone

Banking

Mobile

Banking

Internet

Banking

Tot

al

97 66 64 49 40 51 367

26.43 17.98% 17.44% 13.35% 10.89% 13.89% 100

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%

Graph- 3.1

relative awareness about different e-banking services

0

20

40

60

80

100

120

ATM Debit card Credit card Phonebanking

Mobilebanking

Internetbanking

E-banking services

nu

mb

er o

f re

spo

nd

ents

Series1

Q:5- Do you use E-banking services?

a. Yes b. No

Users of E-banking services

Table no:-3.5

Users Non users Total

80 35 115

69.5% 31.5% 100

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Graph - 3.5

USAGE OF E-BANKING

70%

30%

Yes

No

Q:-6:- If answer to question no.5 is yes, how frequently do you use each of the following

services?

FactorsOnce in a

day

Once in a

week

Once in a

fortnight

Once in a

month

Infrequen

tly

a ATM

b Debit Card

c Credit Card

d Phone Banking

e Mobile Banking

f Internet Banking

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Graph- 3.6

FREQUENCY OF USAGE OF DIFFERENT E-BANKING SERVICES

0%

20%

40%

60%

80%

100%

ATM Debit card Credit card Phonebanking

Mobilebanking

Internetbanking

E-BANKING SERVICES

RE

LA

TIV

E %

US

AG

E

infrequently

once in a month

once in a fortnight

once in a week

once in a day

Representation of frequency of usage

Table no- 3.6

Da

y

Wi

se

% Wee

k-

wise

% Fortn

i-

ghtly

% Mo

n-

thly

% Infre

q-

uentl

y

% Tot

al

WA

S

ATM 4 36.3

6

31 55.3

6

13 37.1

4

11 25.5

8

9 13.8

5

68

3.15

Debit

Card

2 18.1

8

11 19.6

4

7 20 10 23.2

6

8 12.3

1

38

2.71

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Credit

Card

1 9.09 5 8.93 6 17.1

4

6 13.9

5

18 27.6

9

36

2.03

Phone

Banki

ng

0 0 2 3.57 3 8.57 7 16.2

8

13 20 25

1.76

Mobile

Banki

ng

0 0 4 7.14 4 11.4

3

2 4.65 9 13.8

5

19

2.16

Intern

et

Banki

ng

4 36.3

6

3 5.36 2 5.71 7 16.2

8

8 12.3

1

24

2.50

11 100 56 100 35 100 43 100 65 100

Q:7:- Which of the following factors influence you the most to use E-banking services?

Factors Strongly

More

than

average

averageLess than

AverageNot at all

A All time availability

B Ease of use

C Availability of resources

D Nearness

E Integrated platform

F Direct access

G Accuracy of information

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H Friends/ Relatives

I Status symbol

Factors influencing the level of usage Tale no-3.7

Strongl

y

More

than

average

Averag

e

Less

than

average

No

t

at

all

Tot

al

WA

S

Ran

k

All time

availability56 8 11 1 3 79 4.43 1

Ease of use 32 22 7 2 1 64 4.28 3

Resources 17 16 13 2 1 49 3.94 5

Nearness 21 18 14 5 0 58 3.95 4

Integrated

Platform12 10 13 4 1 40 3.70 7

Direct access 32 12 7 2 0 53 4.40 2

Accuracy of

Information17 13 13 3 1 47 3.89 6

Friends/

Relatives3 8 14 7 8 40 2.78 9

Status symbol 7 11 14 7 10 49 2.96 8

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Graph- 3.7

FACTORS INFLUENCING LEVEL OF USAGE

0102030405060708090

All

time

Res

ourc

es

Inte

grat

ed

Acc

urac

y

Sta

tus

Not at all

Less than average

Average

More than average

Strongly

Table 3.7A

Correlation matrix of factors influencing the level of usage

Factors A B C D E F G

AAll time

availability1.00 0.84 0.64 0.70 0.56 0.96 0.73

B Ease of use 0.84 1.00 0.87 0.90 0.67 0.93 0.86

C Resources 0.64 0.87 1.00 0.98 0.93 0.79 0.98

D Nearness 0.70 0.90 0.98 1.00 0.92 0.84 0.98

EIntegrated

Platform0.56 0.67 0.93 0.92 1.00 0.66 0.96

F Direct access 0.96 0.95 0.79 0.84 0.66 1.00 0.83

GAccuracy of

Information0.73 0.86 0.98 0.98 0.96 0.83 1.00

HFriends/

Relatives-0.60 -0.56 -0.07 -0.19 0.17 -0.59 -0.09

I Status symbol -0.38 -0.24 0.23 0.07 0.36 -0.34 0.17

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Q:8:- Which of the following benefits accrue to you, while using E-banking services?

m. Time saving b. Inexpensive

c. Easy processing d. d. Easy fund transfer

Various benefits accruing from E-Banking services to its

users

Table no-3.8

Time saving Inexpensive Easy processingEasy fund

transferOthers

69 21 33 19 7

46.31% 14.09% 22.15% 12.75% 4.70%

Graph- 3.8

Benefits of e-banking

TIME SAVING

INEXPENSIVE

EASY PROCESSING

EASY FUNDTRANSFER

EMERGENCY SKINSAVING

OTHERS

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Q:9:- Which mode do you use for conducting the following transaction?

Persona

l Visit

ATM/

Debit

Card

Phone

Banking

Mobile

Banking

Net

Banking

If you have all of the

previous options which

one would you use (kindly

mention the number 1-5)1 2 3 4 5

A Account related

transactions

B Cheque related

transactio

Ns

C Credit Card

related

transactions

DMisc

transactions

Usage of different modes for conducting specified transaction

Table no – 3.9

Modes

Persona

l

Visit

ATM/

Debit

card

Phone

banking

Mobile

banking

Net

Banking

Account related

transactions,

Cheque related

transactions,

Credit card related

transactions,

Miscellaneous transactions

390 95 118 61 76

% 52.7 12.84 15.95 8.24 10.27

Q:10:- Rate the problems identified while using E-banking services?

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Factors Grievous Major Average Minor Ignorable

A Time consuming

B Insecurity

C ATM out of order

D Amount debited but not

withdrawn

E Problem of change in

mobile number

F Password forgotten

G Card misplaced

H Card misuse

Graph- 3.10

PROBLEMS ARISING OUT OF E-BANKING

010203040506070

Tim

eco

nsum

ing

AT

M o

ut o

for

der

Pro

blem

of

chan

ge in

Car

dm

ispl

aced

Ignorable

Minor

Average

Major

Grievous

Problems identified by the users of E-Banking services

Table no- 3.10

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FactorsGrievo

us

Maj

or

Avera

ge

Min

or

Ignorab

le

Tota

l

WA

S

Rank

s

ATime

consuming0 3 12 19 25 59 1.88 8

B Insecurity 0 11 11 11 12 45 2.47 5

CATM out of

order0 12 16 26 8 62 2.52 4

D

Amount

debited but

not

withdrawn

3 6 4 13 13 39 2.31 7

E

Problem of

change in

mobile

number

1 8 9 12 12 42 2.38 6

FPassword

forgotten8 4 13 18 11 54 2.63 3

GCard

misplaced8 7 13 14 8 50 2.86 2

H Card misuse 12 13 2 8 12 47 3.11 1

Q:11:- Kindly rate the following reasons enlisted for not using the E-banking services?

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FactorsHighly

important

More

than

average

AverageLess than

average

Least

important

a No need( Satisfied with

traditional banking)

b It seems like a

botheration

c Insecurity

d No access to

internet/mobile

e Lack of operational

knowledge

F Hidden costs

Reasons for not using E-Banking services as rated by the non

users

Table no- 3.11

Factors

Highly

importa

nt

More

than

avera

ge

Avera

ge

Less

than

avera

ge

Least

importa

nt

Tot

al

WA

S

Ran

ks

A

No

need( Satisfi

ed with

traditional

banking)

19 8 22 6 22 77 2.95 3

B

It seems like

a

botheration

7 0 9 16 30 62 2.00 6

C

Insecurity 17 11 21 7 13 69 3.17 1

D No access to 9 5 13 10 16 53 2.64 5

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internet/mo

bile

E

Lack of

operational

knowledge

12 7 12 12 15 58 2.81 4

F Hidden

costs21 5 14 8 16 64 3.11 2

Table 3.11-A

Correlation Matrix of reasons for not using E-Banking services as rated by the non

users

A B C D E F

A No need

( Satisfied with

traditional

banking)

1.00 0.37 0.82 0.72 0.63 0.81

B It seems like a

botheration0.37 1.00 -0.19 0.86 0.88 0.30

C Insecurity 0.82 -0.19 1.00 0.31 0.19 0.63

D No access to

internet/mobile0.72 0.86 0.31 1.00 0.92 0.50

E Lack of

operational

knowledge

0.63 0.88 0.19 0.92 1.00 0.66

F Hidden costs 0.81 0.30 0.63 0.50 0.66 1.00

Q:12:- To what extent are you satisfied with your Banks’ E-banking services?

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n. Highly Satisfied ___________

o. Satisfied _________

p. Neutral ___________

q. Dissatisfied ___________

Table no- 3.12

Highly satisfied Satisfied Neutral dissatisfi

ed

35 50 20 10

30.5% 43.5% 17.4% 9%

graph- 3.12

highly satisfied

30%neutral

17%

satisfied44%

dissatisfied9%

CHAPTER :- IV

SUMMARY, CONCLUSIONS, LIMITATIONS & RECOMMENDATIONS

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4.1 Findings of the study

Most of the service class people are aware of E-banking, either fully or partially.

Advertisements play a major role in making service class aware of E-banking.

ATMs are the most preferred choice among service class followed by debit card,

credit card, phone banking, mobile banking and internet banking in terms of the

frequency of usage.

Amongst the various factors influencing the usage, all time availability is ranked as

the major motivating factor, followed by direct access, ease of use, nearness. Friends

and relatives and status symbol were rated as the least motivating factors.

As regards the benefits accruing, Time saving came out to be the major benefit

followed by easy processing, inexpensive and easy fund transfer.Insecurity seems to

be a major problem in the usage of E-banking which arises from the misuse and

misplacement of the card.

Amongst the reasons by the non-users of E-banking, Insecurity again was considered

the most de-motivating factor, followed by fear of hidden costs and no need.

Out of the three hypothesis formulated in the study, one hypothesis proved to be true

i.e. the e-banking usage does not depend on whether the person is male or female and

Other two hypothesis were rejected and it was concluded that e-banking usage is

influenced by the level of income and the age factor

4.2 Limitations

While undertaking this study, I faced certain physical and geographical limitations. Even

though every possible effort to make this project report authentic, accurate and complete in

itself was made, still various hurdles came into the way. The limitations of the study include:

Reluctance on the part of respondents to provide an accurate account of their personal

details.

Scope of the study being limited to ferozepur , the findings of the study cannot be

generalized for the universe on the whole.

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This study being based on the assumption that an interviewer is providing accurate and

reliable information may not hold true in every case

4.3 Recommendations

Internet banking would drive us into an age of creative destruction due to non-physical

exchange, complete transparency giving rise to perfectly electronic market place and

customer supremacy. The question to be asked right now is "What the Indian Banks should

do" Whatever is the strategy chosen and options adopted, certain key parameters would

determine the bank's success on web:

For long-term success, a bank may follow:

Adopting a webs mindset

Catching on the first mover's advantage

Recognizing the core competencies

Ability to deal multiplicity with simplicity

Senior Management initiative to transform the organization from inward to

outward looking

Aligning roles and value propositions with the customer segments

Redesigning optimal channel portfolio

Acquiring new capabilities through strategic alliances.

The above can be implemented in four steps:

Familiarizing the customer to new environment by demo version of software on

bank's web site. This should contain tour through the features which are to be

included. It will enable users to give suggestions for improvements, which can be

incorporated in later versions wherever feasible.

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Second phase provides services such as account information and balances, statement

of account, transaction tracking, mailbox, check book issue, stop payment, financial

and customized information.

The third phase may include additional services such as fund transfers, DD issue,

standing instructions, opening fixed deposits, intimation of loss of ATM cards.

The last step should include advanced corporate banking services like third party

payments, utility bill payments, establishment of L/Cs, Cash Management Services

etc. Enhanced plan for the customers in future can include requests for demand drafts

and pay orders and many more to bring in the ultimate in banking convenience.

Security features of Internet Banking should be administrated to the customers.

Make Internet Banking understandable to the customer, so that they can adapt its

more.

More of the facilities in Internet Banking should be offered.

All the above strategies will help banks in translating their traditional business model into an

Internet one, falling into three main categories

One stop shop

Virtual one-stop-shop

Best of breed supplier.

Conclusion

The awareness of e-banking and usage of e-banking is all set to increase among various

peoples. Some customers are not using the services due to hurdling factors like insecurity and

fear of hidden costs etc. So banks should forward with measures to remove the apprehensions

of customers therefore now demand for e-banking is increasing day-by- day. Customers are

aware and satisfied about e-banking services provided by bank because of its effectivity.

ATMs are most preferred choice amongst customers. Further, with increasing consumer

demands, banks have to constantly think of innovative customized services to remain

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competitive. E-Banking is an innovative tool that is fast becoming a necessity. It is successful

strategic weapon for banks to remain profitable in a volatile and competitive market place of

today.

CHAPTER-V

BIBLIOGRAPHY

MAGAZINES

Product and Technology Group, ICICI Bank “Corporate Banking: Using Technology

in Transactions” ICFAI Reader, January 2004, pg. no. 71-76

“From Physical to Virtual Banking”, Indian Mangement, September 2003

JOURNAL

Wai-Ching Poon(2008) “Users' adoption of e-banking services” Journal of Business

& Industrial Marketing Vol 23,Year: 2008, pp: 59-69

Joaquín Aldás-Manzano , Carlos Lassala-Navarré (2009)“The role of consumer

innovativeness and perceived risk in online banking usage” International Journal of

Bank Marketing Volume: 27,Year: 2009,pp

Michal Polasik (2009)“Empirical analysis of internet banking adoption in Poland”

International Journal of Bank Marketing Volume 27, Year 2009,pp 32-52

Milind Sathye (1999)“Adoption of Internet banking by Australian consumers”

International Journal of Bank Marketing, vo; 17, year 1999, pp 324-334

Milind Sathye(1999) “Adoption of Internet banking by Australian consumers: an

empirical investigation” Journal: International Journal of Bank Marketing, Vol

17 ,Year:1999 , pp:48-52

Walfried M. Lassar, Chris Manolis, Sharon S. Lassar(2005) “The relationship

between consumer innovativeness, personal characteristics, and online banking

adoption” Journal International Journal of Bank Marketing ,Vol 23 ,Year 2005,pp: 68-

69

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Sylvie Laforet, Xiaoyan Li(2005) “Consumers’ attitudes towards online and mobile

banking in China”Journal International Journal of Bank Marketing, Vol 23 ,Year

2005 , pp:67-68

Michal Polasik, Tomasz Piotr Wisniewski(2009) “Empirical analysis of internet

banking adoption in Poland”Journal International Journal of Bank Marketing, Vol 27,

Year 2009,pp: 48-62

Joaquin Aldas-Manzano, Carlos Lassala-Navarre, Carla Ruiz-Mafe, Silvia Sanz-

Blas(2009) “The role of consumer innovativeness and perceived risk in online

banking usage” Journal International Journal of Bank Marketing, Year 2009, Vol

27,pp:72-74

Siriluck Rotchanakitumnuai, Mark Speece(2003) “Barriers to Internet banking

adoption: a qualitative study among corporate customers in Thailand” Journal

International Journal of Bank Marketing, Year 2003 ,Vol 21 ,pp:52-54

Nelson Oly Ndubisi(2006) “Consumer attitudes, system's characteristics and internet

banking adoption in Malaysia”Journal Management Research News,Year 2006 ,Vol

29, Pp 16-27

Barry Howcroft, Robert Hamilton, Paul Hewer(2002) “Consumer attitude and the

usage and adoption of home-based banking in the United Kingdom” Journal

International Journal of Bank Marketing, Vol 20 ,Year 2002 ,pp:18-19

Aref A. Al-Ashban, Mohammed A. Burney(2001) “Customer adoption of tele-

banking technology:the case of Saudi Arabia” Journal International Journal of Bank

Marketing ,Vol 19 ,Year 2001,pp:32-38

Anita Lifen Zhao(2008) “Perceived risk and Chinese consumers' internet banking

services adoption” Journal International Journal of Bank Marketing, Vol 26 ,Year

2008, Pp 505-525

Heikki Karjaluoto, Minna Mattila, Tapio Pento(2002) “Internet vs mobile banking:

comparing customer value perceptions” Journal Business Process Management

Journal, Vol 13 ,Year 2007,pp:72-78

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BOOKS

Malhotra, T. D., “ Electronic Banking and Information Technology in Banks” Sultan

Chand and Sons, New Delhi,2002.

S.S Kaptan & N.S. Choubey. “Indian Banking in Electronic Era.

WEBSITES

http://www.infosys.com/finacle/solutions/solutions_ebanking.asp

http://en.wikipedia.org/wiki/online_banking

http://emeraldinsight.com/10.1108/

http://emeraldinsight.com/10.1108/10662240710758957

http://www.essaytown.net/lib/essay

http://www.academon.com/lib/paper/25315.html

http://www.arraydev.com/commerce/jibc/

http://www. Banknetindia.com,2003

http://www.mit.gov.in/eg/home.asp,2003

http://www.arraydev.com/commerce/jibc/9806-06.htm

http://www.dit.net/itnews/newsjune99/newsjune22.htm

http://www.internetworldstats.com/state5.htm#me

http://www.internetnews.com/bus-new/article/0.6 57535100.htm

http://www.mir.com.my/lb/budget2002/index.htm

http://www,new.ejisdc.org/js/include/getdoc.phplid=167and article=184and mode=pdf

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CHAPTER:-VI

ANNEEXURE

QUESTIONNAIRE

1 Which banks do you have your account?

a. State Bank of India c. HDFC Bank

b. Punjab National Bank d. ICICI Bank

2 While opening up the account, were you aware of E-banking services provided by your

bank?

a. Fully aware b. Had an idea c. No

3 If answer to question no.2 is c, how did you get to know about E-banking services of

your bank?

a. Personal visit

b. Executive from the bank

c. Advertisements

d. Friends/ Relatives

4 If answer to question no.2 is a or b, which of the following E-banking services are you

aware of?

a. ATM

b. Debit Card

c. Credit Card

d. Phone banking

e. Mobile banking

f. Internet banking

5 Do you use E-banking services?

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a. Yes b. No

(If No, answer question no. 10 directly).

6 If answer to question no.5 is yes, how frequently do you use each of the following

services?

FactorsOnce in

a day

Once in

a week

Once in

a

fortnight

Once in

a month

Infreque

ntly

a ATM

b Debit Card

c Credit Card

d Phone Banking

e Mobile Banking

f Internet Banking

7. Which of the following factors influence you the most to use E-banking services?

Factors Strongly

More

than

average

average

Less

than

Average

Not at

all

A All time availability

B Ease of use

C Availability of

resources

D Nearness

E Integrated platform

F Direct access

G Accuracy of

information

H Friends/ Relatives

I Status symbol

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8. Which of the following benefits accrue to you, while using E-banking services?

a. Time saving c. Inexpensive

d. Easy processing d. Easy fund transfer

9. Which mode do you use for conducting the following transaction?

Personal

Visit

ATM/

Debit

Card

Phone

Banking

Mobile

Banking

Net

Banking

If you have all of

the previous

options which one

would you use

(kindly mention

the number 1-5)

1 2 3 4 5

A Account related

transactions

B Cheque related

transactions

C Credit Card

related

transactions

DMisc

transactions

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10. Rate the problems identified while using E-banking services?

Factors Grievous Major Average Minor Ignorable

A Time consuming

B Insecurity

C ATM out of order

D Amount debited but not

withdrawn

E Problem of change in

mobile number

F Password forgotten

g Card misplaced

h Card misuse

11. Kindly rate the following reasons enlisted for not using the E-banking services?

Factors

Highly

importa

nt

More

than

average

Average

Less

than

average

Least

importa

nt

a No need( Satisfied with

traditional banking)

b It seems like a

botheration

c Insecurity

d No access to

internet/mobile

e Lack of operational

knowledge

f Hidden costs

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12. To what extent are you satisfied with your Banks’ E-banking services?

b. Highly Satisfied ________

c. Satisfied ________

d. Neutral ________

e. Dissatisfied ________

f. Highly dissatisfied ________

Respondent’s Profile

Name : ________________ Income level per month

Age : ________________ Less than Rs. 10,000

Gender (M/F) : ________________ Rs.10,000 to Rs.20,000

Profession : ________________ Rs.20,000 to Rs.30,000

Organisation : ________________ More than Rs.30,000

Thanks for participating in the survey.

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