CHAPTER – III PROFILE OF THE STUDY AREA

In this chapter an attempt has been made to describe the existing profile

of Trichirapalli district in terms of area, population level of literacy, infrastructure

facilities, industrial growth, major occupation etc and also a brief profile of the

study area to serve as the base for the study and progress of e-banking in India.

Tiruchirapalli District Tiruchchirapalli District or Trichy District, is located along the Cauvery

River in Tamilnadu, India. The main town in Tiruchirapalli District is the city of

Tiruchirapalli, also known as Trichy. During the British Rule, Tiruchirapalli was

known as Trichinopoly, and was a district of the Madras Presidency, it was

renamed upon India's declaration of independence in 1947. Tiruchirapalli district

is located centrally in the state of Tamil Nadu in India and possesses a

geographical area of 4, 40,383 hectares. The district of Tiruchirapalli is situated

in between ten degree and eleven degree thirty minutes to the North latitudes

and between seventy seven degree forty five minutes and seventy eight degree

fifty minutes to the East longitudes. The maximum temperature experienced in

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this district is 37.7 degree Celsius and the minimum temperature is 18.9 degree

Celsius. The net area cropped in Tiruchirapalli district is 1, 85,193 hectares and

out of which about 102799 hectares are irrigated and about 82394 hectares are

rain fed. The Cauveri River irrigates about fifty one thousand hectares in Trichy,

Lalgudi and Musiri divisions. The normal annual rainfall is 842.60 millimetre. Multi

various crops are grown in this district and agriculture forms the main occupation

for most of the people. of district of Trichirapalli.

History of Tiruchirapalli District The district’s history dates back to 300 BC when Woraiyur formed the

capital city of the Cholas which is also evident from the archaeological findings

and ancient literatures. Woraiyur is a part of the present day district of

Tiruchirapalli. There are also literary sources which state that Woraiyur continued

to be under the control of Cholas even during the days of Kalabhra interregnum

from A.D. 300 to A.D. 575. The district of Tiruchirapalli witnessed the rule of the

Pallavas, the Pandyas, the Cholas, the Hoysalas, the Vijayanagar rulers, the

Mughals and also the British.

Education in Tiruchirapalli District The district of Tiruchirapalli has several educational institutions. There are

about twenty two arts and science colleges, one medical college, about ten

engineering colleges, one college for agriculture, one law college and one

college for special education. For school education, there are about one

thousand fifty four primary schools, about two hundred and seventy three middle

schools, about eighty nine high schools, about one hundred and twenty one

higher secondary schools and about five teacher training colleges.

Tourism in Tiruchirapalli District

The district of Tiruchirapalli possesses a number of tourist attractions

which draw a large number of tourists through out the year. Mosques, temples,

historical buildings and picturesque natural beauty define the South Indian

beauty of nature and human magnificence. Tourism in Trichirapalli has got a

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name due to its scattered natural beauty. Due to the huge industrial growth, the

district is a thriving commercial centre in the state of Tamil Nadu and is well-

known for artificial diamonds, handloom cloth, cigars, glass bangles and wooden

and clay toys. The district of Tiruchirapalli is situated three hundred and twenty

kilometres from Chennai and lies on the banks of the Cauveri River. Some of the

most famous attractions in the district are Grand Anaicut, Vekkaliamman Kovil,

Samayapuram, Puliancholai, Vayalore, Mukkombu, St. Lourdu`s Church, Hazrath

Nathervali, Jambukeswara Temple, Rockfort, Srirangam, etc. The temples of

Trichirapalli district attract a large number of tourists from various parts of the

state as well as from outside.

The Tiruchirapalli district covers an area of 4,403.83 square kilometers.

The area under cultivation in this district is 1, 85,750 hectares. Some of the major

crops grown in this district are rice, pulses, and other cereals, groundnut,

sugarcane,cotton, gingelly, etc. Sericulture was introduced in Tiruchirappalli

District in the late 70`s and the progress is slowly picking up. At present, it has

got mulberry cultivation which is about 217.00 acres

Geography

Cauvery river and Rockfort at Tiruchirapalli Tiruchirapalli district lies at the heart of Tamil Nadu. The district has an

area of 4,404 square kilometers. It is bounded in the northwest by Namakkal

District, in the northeast by Perambalur District, in the east by Thanjavur District,

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in the southeast by Pudukkottai District, in the south by Madurai district, in the

southwest by Dindigul District and, in the west by Karur District. Cauvery river

flows through the length of the district and is the principal source of irrigation and

water supply.

Demographics

It had a population of 2,418,366 as of 2001. It is 47.10% urbanized. The

district has a literacy of 79.16%, higher than the state's average.

Description 2011 2001

Actual Population 2,713,858 2,418,366

Male 1,347,863 1,208,534

Female 1,365,995 1,209,832

Population Growth 12.22% 10.10%

Area Sq. Km 4,511 4,511

Density/km2 602 536

Proportion to Tamil Nadu Population 3.76% 3.88%

Sex Ratio (Per 1000) 1013 1001

Child Sex Ratio (0-6 Age) 952 955

Average Literacy 83.56 77.90

Male Literacy 90.00 86.55

Female Literacy 77.24 69.31

Total Child Population (0-6 Age) 253,633 270,043

Male Population (0-6 Age) 129,947 138,162

Female Population (0-6 Age) 123,686 131,881

Literates 2,055,742 1,673,478

Male Literates 1,096,125 926,354

Female Literates 959,617 747,124

Child Proportion (0-6 Age) 9.35% 11.17%

Boys Proportion (0-6 Age) 9.64% 11.43%

Girls Proportion (0-6 Age) 9.00

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Tamil is the principal language spoken and Tamils are the predominant

linguistic group in the district. Considerable amount of Sri Lankan Tamils are also

found in certain pockets of Tiruchirapalli. Hindus formed the majority of the

population at 84.39% of the population followed by Christians at 9.02%, Muslims

at 6.46% and others at 0.12%

Taluks

Srirangam Temple Gopuram

Tiruchirapalli District consists of 8 Taluks:

Manapparai

Srirangam

Tiruchirapalli

Manachanallur

Thuraiyur

Musiri

Thottiyam

Thiruverambur

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Urban centres

Thiruvanaikaval Temple at Tiruchirapalli

Tiruchirapalli District consists of the following urban centres:

Trichy City

Manapparai town

Thuraiyur town

Thuvakudi town

Lalgudi town panchayat

Musiri town panchayat

Thottiyam town panchayat

Manachanallur town panchayat

Kolli hills (Kollimalai) tourist town

Major industries

Boiler Manufacturing Industries

Cement Factories

Light and heavy engineering

Leather Tanneries

Food processing Industries

Sugar Mills

(Traditional) Cigar Making (village) Industries.

Hosiery and garments (to a small extent)

IT/BPO

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Natural resources and water bodies

NH45 (Grand Southern Trunk Road) Tiruchirapalli district

Cauvery river bisecting Tiruchirapalli and Srirangam

Upper Anaicut or Mukkombu

River Cauvery

River Coleeron

Tourism Places to visit in Tiruchirappalli District.

Mukkombu

Srirangam Temple

Thiruvanai koil

Vayalur Murugan Temple

Kulumandi Amman Temple,Puthur-Sholanganallur

Samayapuram Mariamman Temple

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Vekkaliamman Temple, Woriyur

Rock Fort and Uchipillaiyar Temple

Kallanai

BRIEF PROFILE OF STUDY UNITS

Currently, India has 88 scheduled commercial banks (SCBs) — 28 public

sector banks, 29 private banks and 31 foreign banks. They have a combined

network of over 53,000 branches and 17,000 ATMs. The public sector banks

hold over 75% of total assets of the banking industry, with the private and foreign

banks holding 18.2% and 6.5% respectively.

The profile of public sector and private sector banks taken for study in

Trichirapalli district

STATE BANK OF INDIA The State Bank of India, popularly known as SBI, is one of the leading

banks in India. The bank traces its origin to the first decade of the 19th century.

Later on, it was merged with the Imperial Bank. In the year 1955, the

Government of India nationalized the Imperial Bank along with the Reserve Bank

of India. Ever since that time, the bank acquired its present name that is SBI.

State bank of India is the largest banking and financial services company in

India, by almost every parameter - revenues, profits, assets, market capitalization

etc. SBI provides a range of banking products through its vast network in India

and overseas, including products aimed at NRIs. The State Bank Group, with

over 16000 branches, has the largest branch network in India. The State Bank of

India is India's largest commercial bank. The bank has been striving sincerely to

adhere to the efforts of providing utmost customer satisfaction to the best

possible The State Bank of India has its presence all over India with 16,000

branches. Not only this, the bank has made its roots secured internationally as

well. At present, SBI has 131 branches in 32 countries all over the world

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INDIAN BANK Indian bank is one of the largest nationalized bank among all the other

nationalized bank in India established in the year 1907 and on 19 July 1969, the

government of India nationalized the bank. It provides all the information

regarding its products and services in its official website i.e., www.indianbank.in

as well as 24*7 Online Internet Banking facilities to its customer at

Indianbank.net.in. This is a nationalized bank having its headquarters located in

Chennai (Madras), India with 1657 branches and 22000 employees. Indian Bank

has 1657 branches across the country excluding 240 overseas correspondent

banks in 70 countries. 90 Indian Bank branches are allocated for handling forex

dealings. All the branches are functioning under CBS solutions. Indian Bank has

786 connected ATM centers in 260 cities. The ATM card holders of the bank can

access 40, 000 ATMs under shared network across the country. Indian Bank also

has its branches in abroad like Sri Lanka, Singapore, and Colombo and in other

about 69 countries. It offers various financial products and services to its

customers via its Internet banking. Indian Bank provides wide range of services

through online banking to its customers who have registered for bank’s Online

banking facility. User can get various benefits through online and in a convenient

way.

CANARA BANK Canara bank is a premier commercial bank in India. Canara bank is one

of the biggest commercial banks in India and the official website of canara bank

is www.canarabank.com. The bank has subsidiaries both India and abroad. The

bank was established in the year1906. It was nationalized in the year 1969.

Canara bank has also developed internationally in the year 1976. It has its

international branches in Singapore, Dubai, London, Hong Kong, Moscow,

Shanghai, Doha, and more. It has 3043 branches and over 2000 ATMs across

the country. Canara bank provides a wide range of products and services to its

customers.

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BANK OF INDIA Bank of India (BOI) is one of the pioneering banking institutions in India.

With its headquarters in, Mumbai, the bank enjoys a huge infrastructure both

within India and abroad. BOI is the 5th largest public sector bank in all over the

India with about 3140 branches including 27 branches outside India. It was

established on 7th September 1906. Bank of India has several firsts to its credit.

The Bank has been the first among the nationalized banks to establish a fully

computerized branch and ATM facility at the Mahalaxmi Branch at Mumbai way

back in 1989. It provides it net banking services through www.bankofindia.com.

Bank of India is a part of Cash-tree online services,

INDIAN OVERSEAS BANK Indian Overseas Bank was established in 1937 with the aim to specialize

in foreign exchange and overseas banking business in India. Indian Overseas

Bank had expanded to 38 branches within the country and 7 branches abroad.

Before nationalization in 1969, the bank had ventured into consumer credit, had

begun computerization of their branch in 1964 and had established an

independent department for agricultural finance. In 1969, IOB had 195 branches

in India. In 1977, Indian Overseas Bank opened a branch in Seoul followed by a

foreign currency-banking unit in Colombo in 1979. In 1997, the bank launched its

official website and introduced online Bill Payment Services for MTNL Bills to its

New Delhi branch customers in 1999. At present the bank is having 2013

branches all over the country. The IOB presence is marked in key trade centres

of the world like Singapore, Seoul, Hong Kong, Bangkok and Germany. Its India

presence is well networked branch system spanning the country with multiple

branches in major cities like Bangalore, Chennai, Mumbai, Noida, Hyderabad,

New Delhi, Coimbatore, Pune, Faridabad, Gurgaon and Kolkata.

THE LAKSHMI VILAS BANK The Lakshmi Vilas Bank Ltd is a premier Indian commercial bank, based

in India. Lakshmi Vilas Bank Ltd Online Banking services are fast, easy and

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secure. Under Lakshmi Vilas Bank Ltd Internet Banking the bank offers around

238 CBS Branches in India. Lakshmi Vilas Bank Ltd Net Banking offers its

customers a wide variety of ATM branches. Founded in 1926, Lakshmi Vilas

Bank is a leading banking and financial services provider in South India that

caters to the different financial needs of different client segments. The bank is

headquartered in Karur, Tamil Nadu. The Lakshmi Vilas Bank Ltd offers Retail

Internet banking services under the name of LVB i-net.

FEDERAL BANK OF INDIA With 75 years of service in India, Federal Bank is one of the leading

private sector banks in the country. The Bank has more than 500 offices in India,

covering all the important cities. Federal Bank is a private sector bank in India.

The head office of this prestigious bank is located at Aluva, Kerala. By 2008, the

Federal Bank India had successfully introduced 671 branches and 681 ATMs

across the nation. In the month of March of 2008 alone, the bank had opened 26

branches across 11 Indian States. Federal bank of India is well recognized for

facilitating even the smaller branches consisting of rural and partially-urbanized

areas with technology enabled services. Online banking from Federal bank is

provided to all bank customers. No charges are levied for the Fed Net facility

provided to the customers.

CATHOLIC SYRIAN BANK Ranking among the well known private banks in India, the Catholic Syrian

Bank is an organization that is preferred by lots of customers across the country.

It offers a number of customized solutions and services of high standards to fulfill

the needs and preferences of the customers and help them to enjoy financial

stability. The Catholic Syrian Bank has a strong presence in the rural areas in

India and is a well known financial organization related to the agricultural sector.

The Catholic Syrian Bank was established in the year 1920 in the region of

Thrissur in the state of Kerala. The main headquarters of the bank is located in

the city of Thrissur. The bank started its operations from the first of January in the

year 1921 and since then, it has spread its branches and become a reputed

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name in the banking industry. When the bank started its operations, it had an

initial authorized capital of Rs 5 lakhs while the paid up capital amount was

around Rs 45,270. Since then, the bank has significantly increased its operations

and today it has around 334 branches and around 125 ATMs. The net profit of

the bank now amounts to around Rs 36.56 crores. Around 80% of the branches

of the bank are located in the rural and semi urban areas of the country. In

addition to the domestic branches, there are around 5 NRI branches of the bank

as well as 5 Industrial Branches, 5 SSI Branches and 4 Service Branches. All

these branches work in coordination with each other and offer the high class

facilities and services.

KARUR VYSYA BANK Karur Vysya Bank was started in the year 1916 in Karur, then a small

textile town with a vast agricultural background, by two illustrious sons of the soil

– Sri M.A. Venkatarama Chettiar and Sri Athi Krishna Chettiar. the bank that

carries with it a tradition of 94 years adapt itself to the rapidly changing scenario

in the banking industry. The bank has a branch network of 335 and an ATM

network of 376. The bank has now spread its wings far and wide with over 320

branches in 13 States and 3 Union Territories. It provides its netbanking facilities

through kvb@net. KVB is one of the earliest banks in the country to achieve full

networking of its branches under Core Banking Solutions, offering services

through multiple delivery channels.

ICICI BANK ICICI Bank is India's second-largest bank with total assets of Rs. 3,562.28

billion (US$ 7 billion) at December 31, 2009 and profit after tax Rs. 30.19 billion

(US$ 648.8 million) for the nine months ended December 31, 2009. The Bank

has a network of 1,723 branches and about 4,883 ATMs in India and presence in

18 countries. ICICI Bank offers a wide range of banking products and financial

services to corporate and retail customers through a variety of delivery channels

and through its specialized subsidiaries

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PROGRESS OF E-BANKING IN INDIA BANKING BEFORE NATIONALIZATION Without a sound and effective banking system, India cannot have a

healthy economy. The banking system of India should not only be hassle free but

it should be able to meet new challenges posed by the technology and any other

external and internal factors. The first bank in India, though conservative, was

established in 1786. From 1786 till today, the journey of Indian Banking System

can be segregated into three distinct phases.

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks up to 1991 prior to Indian banking sector

Reforms.

New phase of Indian Banking System with the advent of Indian Financial &

Banking Sector Reforms after 1991.

PHASE I During the first phase the growth was very slow and banks also

experienced periodic failures between 1913 and 1948. There were approximately

1100 banks, mostly small. To streamline the functioning and activities of

commercial banks, the Government of India came up with The Banking

Companies Act, 1949 which was later changed to Banking Regulation Act 1949

as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was

vested with extensive powers for the supervision of banking in India as the

Central Banking Authority.

PHASE II

Government took major steps in the Indian Banking Sector Reform after

independence. In 1955, it nationalized Imperial Bank of India with extensive

banking facilities on a large scale specially in rural and semi-urban areas. It

formed State Bank of India to act as the principal agent of RBI and to handle

banking transactions of the Union and State Governments all over the country.

Seven banks forming subsidiary of State Bank of India were nationalized in 1960.

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On 19th July, 1969, major process of nationalization of 14 banks was carried out.

Second phase of nationalization Indian Banking Sector Reform was carried out in

1980 with seven more banks. This step brought 80% of the banking segment in

India under Government ownership. Banking in the sunshine of Government

ownership gave the public implicit faith and immense confidence about the

sustainability of these institutions.

Phase III This phase has introduced many more products and facilities in the

banking sector in its reforms measure. In 1991, under the chairmanship of M.

Narasimham, a committee was set up by his name which worked for the

liberalization of banking practices. The Government of India enacted the

Information Technology Act, 2000, to provide legal recognition to electronic

transactions and other means of electronic commerce. The country is flooded

with foreign banks and their ATM stations. Efforts are being put to give a

satisfactory service to customers. Phone banking and net banking were

introduced. The entire system became more convenient and swift. Time was

given more importance than money.

EMERGE OF E-BANKING SERVICES

The evolution of e-banking started with the use of Automatic teller

machines (ATM) and included telephone banking, direct bill payment ,

electronic fund transfer and online banking. More recently, it has been

transformed by the internet-a new delivery channel that is fast, convenient,

available round the clock and from what ever the customers location (Saleh and

Anderea 2002)1. E-banking services are changing the face of the Indian banks.

The potential customers and big companies are shifting their accounts from

traditional banks [not fully computerized] to e-banks [fully computerized and

provide different channels]. Mobile banking is fast catching up in India, as a cost

effective alternative banking model. It is also a virtual banking model. However,

1 Saleh and Anderea 2002, challenges of the e-banking revolution, a quarterly magazine of international monetory fund (IMF) ,vol. 39,no.3,pp 34-56.

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there are security issues and regulatory concerns in its usage. Mobile banking

can help banks and micro finance institutions to deliver and collect credit in a

faster and cheaper way, besides helping in better credit management.(Dr.Ashish

Srivastava, 2006)2 SCENARIO OF E-BANKING ABROAD

Since its inception, Internet banking has experienced strong and sustained

growth. In the European Union, 60 million people, representing 18 per cent of

the adult population, use online banking. In France, the number of online banking

accounts is recording an annual growth rate of 75 per cent. However, Estonia is

a country that has become a leader in Internet banking (which now reaches 18

per cent of the population), Two Brazilian banks, Bradesco and Banco do Brasil;

have thus achieved more than 4 million online customers each. Mexico is

another leader of Internet banking in Latin America. The Republic of Korea

leading in online brokerage and in mobile banking. In South-East Asia, Internet

banking is also developing rapidly in Thailand, Malaysia, and Singapore and to a

lesser extent, in the Philippines. Compared with overall Internet usage estimated

at 4.4 million in Australia, the major banks together have attracted only 1.2 million

to online banking.

According to the Internet World Stats 2010, China with 31.6 percent of its

population, United States with 77.5 percent, Japan with 78.2 percent, India with

6-9 percent, Brazil with 37.8 percent, Germany with 79.1 percent, Russia with

42.8 percent, United Kingdom with 82.5 percent, France with 68.9 percent and

Nigeria with 28.9 percent occupies the position of top 10 countries with the

highest number of internet users. .Technology is affecting the life of every

individual in this present age. Online banking is also one of the technologies

which is getting recognition round the globe. There are a lot of customers around

the world who are accepting this technology quickly. There are many banks

which are providing these facilities to customers. The core reason of the transfer

2 Dr. Ashish Srivastava, Mobile phone banking, 2006, Professional banker. Pg 11-16 , the icfai university press.

134

of almost 50 percent of clients from traditional banking to online banking is

perceived usefulness, security and privacy provided by online banking. (Tahir Masood Qureshi, Muhammed Khaqan Zafar,2008.)3 The current statistics

shows that hardly 10 percent of Indian customers use the internet for banking.

Among all the facilities provided, the maximum of them uses only for checking

balance or requesting for a cheque book. Very few customers use the advance

interactive services provided by banks.

In India , banks have entered the domain of information technology and

computer net working not only for improving the quality of services rendered to

the customers, but also for better marketing of their products. Un-precedence

changes resulting from internet revolution have built the confidence on the Indian

banks and they are now in a position to face the competition even from the

international banks. It is true that electronic banking has reduced operational

costs substantially by cutting unnecessary duplication of work and also enables

extend quality services to the customers. (Vissapragada Srinivas,2009)4

Development of i-banking in India The financial reforms that were initiated in the early 1990s and the

globalization and liberalization measures brought in a completely new operating

environment to the banks. The bankers are now offering innovative and attractive

technology-based services and products such as ‘Anywhere Anytime Banking’,

‘Tele Banking’, ‘Internet Banking’, ‘Web Banking’, etc. to their customers to cope

with the competition. The process started in the early 1980s when Reserve Bank

of India (RBI) set up two committees in quick succession to accelerate the pace

of automation of operations in the banking sector. A high-level committee was

formed under the chairmanship of Dr. C. Rangarajan, then Governor of RBI, to

draw up a phased plan for computerisation and mechanisation in the banking

3 Tahir Masood Qureshi,Muhammed Khaqan Zafar,2008, Journal of internet banking and commerce, April 2008,vol.13,No.1.,Consumer Acceptance of Online Banking in Developing Economies 4 Vissapragada Srinivas, August 2009, No more traditional banking only virtual, pg 41,professional banker, The icfai university press

135

industry over a five-year time frame of 1985–1989. The focus by this time was on

customer service and two models of branch automation were developed and

implemented. Having gained experience in the earlier mode of computerization,

the second Rangarajan committee constituted in 1988 drew up a detailed

perspective plan for computerization of banks and for extension of automation to

other areas such as funds transfer, e-mail, BANKNET, SWIFT, ATMs, i-banking,

etc. The Government of India enacted the Information Technology Act, 2000

(generally known as IT Act, 2000), with effect from 17 October 2000 to provide

legal recognition to electronic transactions and other means of electronic

commerce. RBI had set up a ‘Working Group’ on i-banking to examine different

aspects of i-banking. The Group had focused on three major areas of i-banking

such as (1) technology and security issues, (2) legal issues and (3) regulatory

and supervisory issues. RBI had accepted the recommendations of the ‘Working

Group, and accordingly issued guidelines on ‘internet banking in India’ for

implementation by banks. The ‘Working Group’ has also issued a report on i-

banking covering different aspects of i-banking. Internet banking in India is

currently at a nascent stage. While there are scores of companies specializing in

developing i-banking software, security software and website designing and

maintenance, there are few online financial service providers. ICICI bank is the

first one to have introduced i-banking for a limited range of services such as

access to account information, correspondence and, recently, funds transfer

between its branches. ICICI is also getting into e-trading, thus offering a broader

range of integrated services to the customer. Several finance portals for provision

of non-banking financial services, e-trading and e-broking have come up.

Commercial applications such as Electronic Bill Presentment (EBP) and

Procurement systems may not be introduce d in India immediately, but are likely

to have a greater impact than the retail applications. The corporate sector is

adequately computerized and has already recognized the important role of e-

commerce in future. Increasingly, companies are setting up websites even where

there are no immediate tangible benefits to them from doing so.

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Status of e-banking in India In Indian context, many publications throw light over the importance of e-

banking and also its prospects for the Indian banking industry. Various authors

have found that i-banking is fast becoming popular in India. (Pegu, 2000)5

However, it is still in its evolutionary stage. By the year 2006–2007, a large

sophisticated and highly competitive i-banking market will develop. Almost all the

banks operating in India are having their websites, but only a few banks provide

transactional i-banking. A survey carried out by (Malhotra and Singh, 2006)6

shows that only 48% of the commercial banks operating in India as on March-

end 2005 offers i-banking.

In India, comparatively less number of studies have been conducted on

the current status of i-banking and customer satisfaction compared to other

countries. Thus, there is a lot of scope for the research to present new ideas

concerning i-banking in India which may be useful to the Indian banking industry.

There are a series of papers that observe that i-banking has revolutionized the

banking industry and the banking industry is under pressure to offer new

products and services. However, to succeed in today’s electronic markets a

strategic and focused approach is required. M.S. Khan, S.S. Mahapatra and

Sreekumar 20097

The internet users in India The role of internet is becoming inevitable to corporate and society.

Across the world, governments and corporate are increasingly working towards

the better utilization of the internet. The internet which was initially perceived as a

5 Pegu, R. (2000) ‘Net-banking is fast becoming popular’, The Week, 25 June 6 Malhotra,, P & Singh, B., “The Impact of Internet Banking on Bank Performance and Risk: The Indian Experience,” Eurasian Journal of Business and Economics, vol. 2, no. 4, pp. 43-62, 2009 7 Khan, M.S., Mahapatra, S.S. and Sreekumar (2009) ‘Service quality evaluation in internet banking: an empirical study in India’, Int. J. Indian Culture and Business Management, Vol. 2, No. 1, pp.30–46.

137

communication media is now metamorphosing into a powerful business media

(Sakkthivel, 2006)8.

According to the Internet & Online Association of India (IOAI), the Indian

internet population is currently over 25 million and is expected to grow to 100

million by 2007 (Survey by New Media Review, 2005). In July 2005, Internet

World Stats reported that there were 39,200,000 internet users in India

representing 3.6% of the population. (Internet World Stats, August 2005). Even

with millions of web users in its cities, the internet penetration rate for India

remains well below 5%. Despite India’s technology outsourcing power, the

country’s internet penetration rate is low.

According to Internet Usage and Telecommunications Market

Report,2010, internet usage and population statistics reported that Indian

internet population is currently over 1,175,108,018. Asia internet stats reported

that there are 81,000,000 internet users in India representing 6.9 % of the

population. Compared to 2005 statistics it has nearly doubled. In India, slowly

but steadily, the Indian customer is moving towards i-banking. A number of banks

have either adopted i-banking or are on the threshold of adopting it. The banks

started i-banking initially with simple functions such as getting information about

interest rates, checking account balances and computing loan eligibility. Then,

the services are extended to online bill payment, transfer of funds between

accounts and cash management services for corporate. Recently, banks have

started to facilitate payment of e-commerce transactions by directly debiting bank

accounts or through credit cards. It will add to the revenues of the bank.

SMART CARDS A smart card is the next natural step in the evolution of today's plastic

payment cards. Each smart card has an integrated circuit chip embedded into it,

which gives it the power to perform many different functions. Thus, having a

8 Sakkthivel, A.M., (2006, December) ‘Impact of demographics on the consumption of different services online in India’, Journal of Internet Banking and Commerce, Vol. 11, No. 3.

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smart card is like having a PC in your wallet. With their ability to store up to 80

times more information than magnetic stripe cards, smart cards will allow Card

Companies to deliver more personalized products and services providing

consumers with custom-tailored cards to suit their individual lifestyle.

E - BANKING – RECENT TRENDS IN INDIA

Initially, the Indian banking system was domestically oriented at the time

of nationalization in 1969. National policy objectives where the guiding force and

banks were primarily involved in mobilizing domestic savings, lending funds to

specific sectors of the economy and raising resources for financing public

deficits. Technology in Indian banking has evolved substantially from the days of

back office automation today's online, centralized and integrated solutions.

Padmanaban.G(2005)9 has stated that “the banking in India has under

gone rapid transformation. The last decades have witnessed a sea change in

the nature of services offered by banks which has a positive impact on the

customers of banks. Technology will be considered as an emerging tool for

providing the better customer service.

According to the internet &online Association of India (IOAI), the Indian

internet population is currently over 25 million and is expected to grow to 100

million by 2007. Internet World Stats reported that there were 39,200,000

internet users in India representing 3.6 percent of population (internet world stats,

August 2005). Even with millions of web users in its cities, the internet

penetration rate for India remains well below 5 percent.

According to Internet Usage and Telecommunication Market Report, 2010,

Internet usage and population statistics reported that Indian internet population

currently over 1,175,108,018. Asia internet stats,2010 reported that there are

81,000,000 internet users in India representing 6.9 percent of the population.

Compared to 2005 statistics it has nearly doubled. In India, slowly but steadily, 9 Padmanaban.G, Chief Manager-in-charge, Department of information technology, Reserve bank in the Banknet India’s Bank Tech Submit at Taj Lands Ends, Mumbai, on September 2005.

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the Indian customer is moving towards internet banking. Online banking is

currently emerging as a new approach in India for providing improved

accessibility and expediency to customers.

The next chapter explains the analysis and interpretation of the

parameters framed. The section deals with the descriptive and statistical analysis

of the primary data.