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RESEARCH PROJECT
A Study On
E-BANKING IN INDIA
Submitted By
DEEPTI MADHURI GUMMUDU
JAPPREET KAUR
SHASHANK KUMAR P C
VIKAS SANGWAN
VINAY KUMAR JHAWAR
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PREFACE
The quotation written at the top of the page is a reality today, E banking had helped
very much to ease the banking services, E Banking is one of the reason for the
excellent services given by the banks results in customer satisfaction which is very
important
So the project aims to study the emergence of E Banking in India ,it includes thestudy of 150 people ,their views about the E-banking, this project helps the banks
to find out the future prospects of the E Banking and the reasons that why the
people are hesitating to use the E Banking the E Banking services. As the customer
satisfaction is the main focus of each and every company specially in the service
sector ,so the E Banking services by the bank act as a fuel to provide the customer
satisfaction and to catapult their respective positions in the cut throat competitive
banking sector.
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TABLE OF CONTENTS
CHAPTE
R NO
TOPICS/CHAPTERS NAME PAGE
NUMBER
1 INTRODUCTION 7
1.1 History of Banking 8
1.2 Origin of Banking in India 15
1.3 What is Online Banking 202 REVIEW OF LITERATURE 26
3 OBJECTIVE OF STUDY 30
4 RESEARCH METHOLOGY 32
5 ANALYSIS AND INTERPRETATION 36
5.1 Interpretation of data survey 37
5.2 Suggestions 49
6 FINDINGS 51
6.1 Findings of the study 52
6.2 Limitations 537 CONLUSION 54
8 BIBLIOGRAPHY 56
9 SCOPE OF FURTHER STUDY 58
10 SCHEDULE 59
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INTRODUCTION
History of banking.
Roman sculpture showing moneychanger from 4th century BC
The history of banking is closely related to the history of money. As monetary payments
became important, people looked for ways to safely store their money. As trade grew, merchants
looked for ways of borrowing money to fund expeditions.
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Earliest banks
The first banks were probably the religious temples of the ancient world. In them was stored gold
in the form of easy-to-carry compressed plates. Their owners justly felt that temples were the
safest places to store their gold as they were constantly attended and well built and were sacred,
thus deterring would-be thieves. There are extant records of loans from the 18th century BC in
Babylon that were made by temple priests to merchants.
Ancient Greece holds further evidence of banking. Greek temples, as well as private and civic
entities, conducted financial transactions such as loans, deposits, currency exchange, and
validation of coinage. There is evidence too of credit, whereby in return for a payment from a
client, a moneylender in one Greek port would write a credit note for the client who could "cash"
the note in another city, saving the client the danger of carting coinage with him on his journey.
Ancient Rome perfected the administrative aspect of banking and saw greater regulation of
financial institutions and financial practices. Charging interest on loans and paying interest on
deposits became more highly developed and competitive.
During Late Antiquity and Middle ages
The ascent of Christianity in Rome and its influence restricted banking, as the charging of
interest was seen as immoral. Jews were ostracized from most professions by local rulers, the
Church and the guilds, were pushed into marginal occupations considered socially inferior, such
as tax and rent collecting and money lending, while the provision of financial services
increasingly demanded by the expansion of European trade and commerce.
Most early religious systems in the ancient Near East, and the secular codes arising from them,
did not forbid usury. These societies regarded inanimate matter as alive, like plants, animals and
people, and capable of reproducing itself. Hence if you lent 'food money', or monetary tokens of
any kind, it was legitimate to charge interest. Food money in the shape of olives, dates, seeds or
animals was lent out as early as c. 5000 BC, if not earlier. ... Among the Mesopotamians,
Hittites, Phoenicians and Egyptians, interest was legal and often fixed by the state. But the Jews
took a different view of the matter.
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The Torah and later sections of the Hebrew Bible criticize interest-taking, but interpretations of
the Biblical prohibition vary. One common understanding is that Jews are forbidden to charge
interest upon loans made to other Jews, but allowed to charge interest on transactions with non-
Jews, or Gentiles. However, the Hebrew Bible itself gives numerous examples where thisprovision was evaded. Johnson holds that the Hebrew Bible treats the lending as philanthropy in
a poor community whose aim was collective survival, but which is not obliged to be charitable
towards outsiders.
Medieval trade fairs, such as the one in Hamburg, contributed to the growth of banking in a
curious way: moneychangers issued documents redeemable at other fairs, in exchange for hard
currency. These documents could be cashed at another fair in a different country or at a future
fair in the same location. If redeemable at a future date, they would often be discounted by an
amount comparable to a rate of interest. Eventually, these documents evolved into bills of
exchange, which could be redeemed at any office of the issuing banker. These bills made it
possible to transfer large sums of money without the complications of hauling large chests of
gold and hiring armed guards to protect the gold from thieves.
Ironically, the papal bankers were the most successful of the Western world. When Pope John
XXII (born Jacques d'Euse (1249 - 1334) was crowned in Lyon in 1316, he set up residency in
Avignon. The accompanying growth of Italian banking in France was the start of the Lombard
moneychangers in Europe, who moved from city to city along the busy pilgrim routes important
for trade. Key cities in this period were Cahors, the birthplace of Pope John XXII, and Figeac.
Perhaps it was because of these origins that the term Lombardis synonymous with Cahorsin in
medieval Europe, and means 'pawnbroker'.
Western banking history
Modern Western economic and financial history is usually traced back to the coffee houses of
London. The London Royal Exchange was established in 1565. At that time moneychangers
were already called bankers, though the term "bank" usually referred to their offices, and did not
carry the meaning it does today. There was also a hierarchical order among professionals; at the
top were the bankers who did business with heads of state, next were the city exchanges, and at
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the bottom were the pawn shops or "Lombards. Most European cities today have a Lombard
street where the pawn shop was located.
After the siege of Antwerp trade moved to Amsterdam. In 1609 the Amsterdamsche Wissel bank
(Amsterdam Exchange Bank) was founded which made Amsterdam the financial centre of the
world until the Industrial Revolution.
Banking offices were usually located near centers of trade, and in the late 17th century, the
largest centers for commerce were the ports of Amsterdam, London, and Hamburg. Individuals
could participate in the lucrative East India trade by purchasing bills of credit from these banks,
but the price they received for commodities was dependent on the ships returning (which often
didn't happen on time) and on the cargo they carried (which often wasn't according to plan). The
commodities market was very volatile for this reason, and also because of the many wars that led
to cargo seizures and loss of ships.
The growth of commercial banking
US financial market
By the early 1900s New York was beginning to emerge as a world financial centre. Companies
and individuals acquired large investments in (other) companies in the US and Europe, resulting
in the first true market integration. This comparatively high level of market integration proved
especially beneficial when World War I cameboth sides in the conflict sought funds from the
United States, by issuing new securities and selling existing holdings, though the Allied Powers
raised by far the larger amounts. Being a lender to the world resulted in the largest growth of a
financial economy to that point.
The stock market crash in 1929 was a global eventmarkets crashed everywhere, all at the same
time, and the volume of foreign selling orders was high. The Great Depression followed, and the
banks were blamed for it, although the evidence has never been strong to connect the speculative
activities of the banks during the 1920s with either the crash or the subsequent depression of the
1930s. Nonetheless, there were three prominent results from these events that had great effect on
American banking. The first was the passage of the Banking Act of 1933 that provided for the
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Federal Deposit Insurance system and the GlassSteagall provisions that completely separated
commercial banking and securities activities. Second was the depression itself, which led in the
end to World War II and a 30-year period in which banking was confined to basic, slow-growing
deposit taking and loan making within a limited local market only. And third was the risingimportance of the government in deciding financial matters, especially during the post-war
recovery period. As a consequence, there was comparatively little for banks or securities firms to
do from the early 1930s until the early 1960s.
Global banking
In the 1970s, a number of smaller crashes tied to the policies put in place following the
depression, resulted in deregulation and privatization of government-owned enterprises in the1980s, indicating that governments of industrial countries around the world found private-sector
solutions to problems of economic growth and development preferable to state-operated, semi-
socialist programs. This spurred a trend that was already prevalent in the business sector, large
companies becoming global and dealing with customers, suppliers, manufacturing, and
information centers all over the world.
Global banking and capital market services proliferated during the 1980s and 1990s as a result of
a great increase in demand from companies, governments, and financial institutions, but also
because financial market conditions were buoyant and, on the whole, bullish. Interest rates in the
United States declined from about 15% for two-year U.S. Treasury notes to about 5% during the
20-year period, and financial assets grew then at a rate approximately twice the rate of the world
economy. Such growth rate would have been lower, in the last twenty years, were it not for the
profound effects of the internationalization of financial markets especially U.S. Foreign
investments, particularly from Japan, who not only provided the funds to corporations in the
U.S., but also helped finance the federal government; thus, transforming the U.S. stock marketby far into the largest in the world.
Nevertheless, in recent years, the dominance of U.S. financial markets has been disappearing and
there has been an increasing interest in foreign stocks. The extraordinary growth of foreign
financial markets results from both large increases in the pool of savings in foreign countries,
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such as Japan, and, especially, the deregulation of foreign financial markets, which has enabled
them to expand their activities. Thus, American corporations and banks have started seeking
investment opportunities abroad, prompting the development in the U.S. of mutual funds
specializing in trading in foreign stock markets.
Such growing internationalization and opportunity in financial services has entirely changed the
competitive landscape, as now many banks have demonstrated a preference for the universal
banking model so prevalent in Europe. Universal banks are free to engage in all forms of
financial services, make investments in client companies, and function as much as possible as a
one-stop supplier of both retail and wholesale financial services.
Many such possible alignments could be accomplished only by large acquisitions, and there were
many of them. By the end of 2000, a year in which a record level of financial services
transactions with a market value of $10.5 trillion occurred, the top ten banks commanded a
market share of more than 80% and the top five, 55%. Of the top ten banks ranked by market
share, seven were large universal-type banks (three American and four European), and the
remaining three were large U.S. investment banks who between them accounted for a 33%
market share.
This growth and opportunity also led to an unexpected outcome: entrance into the market of
other financial intermediaries: non banks. Large corporate players were beginning to find their
way into the financial service community, offering competition to established banks. The main
services offered included insurances, pension, mutual, money market and hedge funds, loans and
credits and securities. Indeed, by the end of 2001 the market capitalization of the worlds 15
largest financial services providers included four non banks.
In recent years, the process of financial innovation has advanced enormously increasing the
importance and profitability of non bank finance. Such profitability priory restricted to the non
banking industry, has prompted the Office of the Comptroller of the Currency (OCC)to
encourage banks to explore other financial instruments, diversifying banks' business as well as
improving banking economic health. Hence, as the distinct financial instruments are being
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explored and adopted by both the banking and non banking industries, the distinction between
different financial institutions is gradually vanishing.
A recent innovation in 2005 was the creation of prosper.com, a financial institution based on the
idea of a person-to-person (P2P) system. Prosper.com allows individuals and groups to bid on
interest rates for loans as either borrowers or lenders, effectively making each individual person
a banking institution. The system is protected by credit ratings and identity verification.
Oldest private banks
Barclays which was founded by John Freame and Thomas Gould in 1690. The bank was
renamed to Barclays by Freame's son-in-law, James Barclay, in 1736.
Hope & Co., founded in 1762.
Barings Bank founded in 1806.
Rothschild family 1700 - present.
For French banking history, read the History of banks in France (in English or in French) on the
FBF website.
Oldest national banks
Bank of Sweden The rise of the national banks
Bank of England The evolution of modern central banking policies
Bank of America The invention of centralized check and payment processing
technology
Swiss banking
United States Banking
The Pennsylvania Land Bank, founded in 1723 and receiving the support of BenjaminFranklin who wrote "Modest Enquiry into the Nature and Necessity of a Paper Currency"
in 1729[1].
Imperial Bank of Persia (Iran) History of banking in the Middle-East
ORIGIN IN INDIA
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In India as early as Vedic era, banking existed in its crude form. The works of
Manu, contain references to deposits, pledges, policy of loans and rates of interests
etc. the original banking operations were in the hands of indigenous bankers, who
dominated the finance to the extent that they provided credit to the govt. of also.
State Bank of India
(History of banking in India)
State Bank of India
Type Public (BSE, NSE:SBI) & (LSE:SBID)
Founded Calcutta, 1806 (as Bank of Calcutta)
Headquarters Corporate Centre,Madame Cama Road,Mumbai 400 021 India
Key people Chairman Om Prakash Bhatt
Industry BankingInsuranceCapital Markets and allied industries
Products Loans, Credit Cards, Savings, Investmentvehicles, SBI Life (Insurance) etc.
Revenue USD 13.775 billion (2005)
Slogan The nation banks on us
Website www.statebankofindia.com
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State Bank of India (SBI) (LSE: SBID) is the largest bank in India. It is also, measured by the
number of branch offices and employees, the largest bank in the world. Established in 1806 as
Bank of Bengal, it remains the oldest commercial bank in the Indian Subcontinent and also the
most successful one providing various domestic, international and NRI products and services,
through its vast network in India and overseas. With an asset base of $126 billion and its reach, it
is a regional banking behemoth. The bank was nationalized in 1955 with the Reserve Bank of
India having a 60% stake. It has laid emphasis on reducing the huge manpower through Golden
handshake schemes and computerizing its operations.
Roots
The roots to the State Bank of India are traceable to the first decade of 19th century, when the
Bank of Calcutta, later renamed as the Bank of Bengal, was established on 2 June 1806. The
Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on
15 April 1840) and the Bank of Madras (incorporated on 1 July 1843) were amalgamated on 27
January 1921, and the reorganized banking entity was named the Imperial Bank of India. All
these Presidency banks were incorporated as joint stock companies, and were the result of the
royal charters. The Imperial Bank of India continued to remain a joint stock company. Until the
establishment of a central bank in India the Imperial Bank and its early predecessors served as
the nation's central bank printing currency.
The Reserve Bank of India, which is the central banking organization of India, in the year 1955,
acquired a controlling interest in the Imperial Bank of India and the Imperial Bank of India was
christened on 30 April 1955 as the State Bank of India. This acquisition of the controlling
interest was done pursuant to the provisions of the State Bank of India Act 1955, an Act enacted
by the Parliament of India
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State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of Indore
State Bank of Mysore State Bank of Patiala
State Bank of Saurashtra
State Bank of Travancore
Growth
State Bank of India has often acted as guarantor to the Indian Government, most notably during
Chandra Shekhar's tenure as Prime Minister of India. With more than 9400 branches and afurther 4000+ associate bank branches, the SBI has extensive coverage. State Bank of India has
electronically networked most of its metropolitan, urban and semi-urban branches under Core
Banking System (CBS). The bank has the largest ATM network in the country having more than
5600 in number . The State Bank of India has had steady growth over its history, though it was
marred by the Harshad Mehta scam in 1992.Following its arch-rival ICICI Bank, the bank has
started Core banking process by which more than 4400+ branched have been completed so far.
In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It
is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating
and various other rankings. According to the Forbes 2000 listing it tops all Indian companies.
Fortune Global 500 Ranking - 2006
SBI debuted in the Fortune Global 500 at 498 in 2006.
Group companies
SBI Capital Markets Ltd
SBI Mutual Fund (A Trust)
SBI Factors and Commercial Services Ltd
SBI DFHI Ltd
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SBI Cards and Payment Services Pvt Ltd
SBI Life Insurance Co. Ltd - Banc assurance (Life Insurance)
SBI Funds Management Pvt Ltd
SBI Canada
IT Initiatives
According to PM Network (December 2006, Vol. 20, No. 12), State Bank of India launched a
project in 2002 to network more than 14,000 domestic and 70 foreign offices and branches. The
first and the second phases of the project have already been completed and the third phase is still
in progress. As of December 2006, over 10,000 branches have been covered.
The new infrastructure serves as the bank's backbone, carrying all applications, such as the IP
telephone network, ATM network, Internet banking and internal e-mail. The new infrastructure
has enabled the bank to further grow its ATM network with plans to add another 3,000 by the
end of 2007 raising the total number to 8,600.
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from anywhere where Internet access is available. In most cases a web browser is utilized and
any normal internet connection is suitable. No special software or hardware is usually needed.
In India ICICI Bank was the first to provide e-banking service, these
services were launched in the year 1998
Features
Online banking usually offers such features as:
Bank statements, with the possibility to import data in a personal finance program such as
Quicken or Microsoft Money
Electronic bill payment
Funds transfer between a customer's own checking and savings accounts, or to another
customer's account
Investment purchase or sale
Loan applications and transactions, such as repayments
Account aggregation to allow the customers to monitor all of their accounts in one place
whether they are with their main bank or with other institutions.
There are a growing number of so-called virtual banks that operate exclusively online. These
online banks have low costs compared to traditional banks and so they often offer higher interest
rates.
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Security
Security token devices
Protection through single password authentication, as is the case in most secure Internet
shopping sites, is not considered secure enough for personal online banking applications in some
countries. Online banking user interfaces are secure sites (generally employing the https
protocol) and traffic of all information - including the password - is encrypted, making it next to
impossible for a third party to obtain or modify information after it is sent. However, encryption
alone does not rule out the possibility of hackers gaining access to vulnerable home PCs and
intercepting the password as it is typed in (key logging). There is also the danger of password
cracking and physical theft of passwords written down by careless users.
Many online banking services therefore impose a second layer of security. Strategies vary, but a
common method is the use of transaction numbers, or TANs, which are essentially single use
passwords. Another strategy is the use of two passwords, only random parts of which are entered
at the start of every online banking session. This is however slightly less secure than the TAN
alternative and more inconvenient for the user. A third option, used in many European countries
and currently being trialed in the UK is providing customers with security token devices capable
of generating single use passwords unique to the customer's token (this is called two-factor
authentication or 2FA). Another option is using digital certificates, which digitally sign or
authenticate the transactions, by linking them to the physical device (e.g. computer, mobile
phone, etc). While most online banking in the United States still uses single password protection,
the FDIC has issued regulations requiring that banks implement more secure authentication
mechanisms by the end of 2006.
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Banks in many European countries (including the Scandinavian countries, the Netherlands,
Austria and Belgium) are offering online banking for e-commerce payments directly from
customer to merchants. For instance, see iDEAL.
Fraud
Some customers avoid online banking as they perceive it as being too vulnerable to fraud. The
security measures employed by most banks can never be completely safe, but in practice the
number of fraud victims due to online banking is very small. This is probably due to the fact that
a relatively small number of people use internet banking compared with the total number of
banking customers world wide. Indeed, conventional banking practices may be more prone to
abuse by fraudsters than online banking. Credit card fraud, signature forgery and identity theftare far more widespread "offline" crimes than malicious hacking. Bank transactions are generally
traceable and criminal penalties for bank fraud are high. Online banking becomes less secure if
users are careless, gullible or computer illiterate. An increasingly popular criminal practice to
gain access to a user's finances is phishing, whereby the user is in some way persuaded to hand
over their password(s) to a fraudster.
ADVANTAGES OF ONLINE BANKING
Convenience: Unlike your corner bank, online banking sites never close; they're
available 24 hours a day, seven days 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.
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.
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DISADVANTAGES OF ONLINE BANKING
Start-up may take time: In order to register for your bank's online program, you will
probably have to provide ID and sign a form at a bank branch. If you and your spouse wish to
view and manage your assets together online, one of you may have to sign a durable power of
attorney before the bank will display all of your holdings together.
Learning curve: Banking sites can be difficult to navigate at first. Plan to invest some
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.
TYPES OF RISKS ASSOCIATED WITH E-BANKING.
S.No. Type of Risk About Risk Problem Solution
1. Operational It takes the form of inaccurate processing oftransactions, non-enforceability of contracts,compromises in dataintegrity, data privacy andconfidentially,unauthorized access.
Avoid weakness in designimplementation andmonitoring of banksinformation system.Maintain adequatetechnology. Consider onlyrequisite expertise.
2. Security Security risk arises onaccount of unauthorized
access to banks criticalinformation stores likeaccounting system, riskmanagement system,portfolio managementsystem, data alterationintentionally orunintentionally.
Control and technologicaltools to ensure data integrity
authorization control.
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3. SystemArchitecture &Design
Banks faces the risk ofwrong choice oftechnology, impropersystem design andinadequate control process.
Not to use out-dated , notscaleable and not proventechnology. Educate its ownstaff. Avoid overdependence on vendors.
4. Reputational Risk Negative Public Opinion,lack of public confidence,inadequate information tocustomers about productand services.
Test the system beforimplementation. Base upfacilities, contingency plansincluding plans to addressthe customer problemsduring system disruption.Deployment of ethicalHackers for pulling theloopholes and other securitymeasures.
5. Legal Legal risk arises from
violation of or non-conformance with laws,rules, regulations orprescribed practices orwhen legal rights andobligations of parties to atransaction are not wellestablished.
A customer should
adequately informed abouthis rights and obligations.
6. MoneyLaundering.
Detecting and preventingundesirable criminalactivities.
Design proper customeridentification and screeningtechniques.
7. Cross border Uncertanities about legalrequirements in somecountries and jurisdictionambiguities with respest toresponsibilities of differentnational authorities.
Select proper serviceprovider which can provideservicesbeyond borders.
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REVIEW OF LITERATURE
REVIEW OF LITERATURE
1. The role of consumer innovativeness and perceived risk in online banking usage .Authors: Alds-Manzano, Joaqun;Source: International Journal of Indian Culture and Business Management, Volume2, Number 3, 27 February 2009 , pp. 307-325(19)Publisher: Emerald Group Publishing Limited
Purpose - The purpose of this paper is to analyse how consumer innovativeness can be usedas a variable to positively influence internet banking adoption both directly and reducing
consumer perceived risk.Design/methodology/approach - The impact of innovativeness and risk on internet bankingadoption has been tested through structural equation modelling techniques. The sampleconsists of 511 Spanish internet banking services users accessed through an internet survey.Risk has been measured as a formative construct.Findings - Results reveals consumer innovativeness as a key construct to improve e- banking adoption both directly and by its effective role in reducing consumer riskperception of using internet channel in the financial services context.
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Practical implications - Practical guidelines are provided to bank managers on how to useconsumer innovativeness level as a segmentation variable to increase the use of internetbanking among actual customers who are non users or light users of the electronic channel.
2. Attributes affecting the growth of online banking: a consumer perspectiveAuthors: Dutta, Kirti; Makkar, UrvashiSource: International Journal of Technology Marketing, Volume 3, Number 4, 5 December2008 , pp. 376-391(16)Publisher: Inderscience Publishers
Technology in Indian banks is catching up fast with the developments around the world.This adoption not only allows banks to offer new types of banking and financial products,but also the highest level of services. The current paper focuses on the other side of thecoin, i.e., the adoption of Internet Banking (IB) by the consumers. The paper delves into
the trends in IB and delineates the factors that affect the use of IB by customers. The 19attributes that were studied for IB adoption were reduced to seven factors. It was observedthat the sought-after benefits - encouragement, ease and accuracy, convenience and control,lifestyle and social factors, and bank reputation - were the five most important factors. Onthe other hand, factors such as the lack of knowledge and trust, security and privacy issuesand the lack of training and incentives, were found to act as major inhibitors in IBadoption.
3.Investigating the drivers of internet banking adoption decision: A comparison of threealternative frameworks.
Authors: Gounaris, Spiros; Koritos, ChristosSource: The International Journal of Bank Marketing, Volume 26, Number 5, 2008 , pp. 282-304(23)Publisher: Emerald Group Publishing Limited
Purpose - The paper seeks to compare, through empirical evidence, two widely adopted models(the Technology Acceptance Model (TAM) and the Diffusion of Innovations (DoI) model) to anunderutilized one (Perceived Characteristics of the Innovation) in order to examine which isbetter in predicting consumer adoption of internet banking (IB), while investigating innovationattributes vis--vis other important predictors of adoption of innovations, such as consumerpersonal characteristics.
Design/methodology/approach - The data derive from both users and non-users of IB through aweb survey. The paper assesses the psychometric properties of the measures throughconfirmatory factor analysis and then employs logistic regression analysis in order to assess andcompare the ability of the models to accurately predict consumer adoption of IB. The paper alsoincorporates other non-usability types of characteristics (i.e. social, psychological) into TAM andDoI, and identifies the moderating role of shopping context, between innovation characteristicsand decision to adopt.
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4.Re-examining traditional service quality in an e-banking era.Authors: Wong, David H.; Rexha, Nexhmi; Phau, IanSource: The International Journal of Bank Marketing, Volume 26, Number 7, 2008 , pp. 526-
545(20)Publisher: Emerald Group Publishing Limited
Purpose - This paper aims to re-examine the role of traditional service quality in an e-bankingenvironment by providing a review of how traditional service quality perceptions have evolvedthrough the current and continuing stream of change in banking technology and thecorresponding changes in the nature of how banks interact with their customers.Design/methodology/approach - Data were collected from a mail survey sent out to acommercially purchased mailing list of 2,500 business names and addresses. The overall usableresponse rate was 30.6 per cent. Quadrant analysis was performed on the service qualitydimensions from the SERVQUAL scale.
Findings - While the importance ranking of the five SERVQUAL dimensions has not changeddramatically over the years, large discrepancies were found between customer expectations andtheir perceived performance of traditional banking services.
5.Consumer payment choices: paper, plastic, or electrons?Authors: Hogarth, Jeanne M.; Kolodinsky, Jane; Gabor, Tatiana
Source: International Journal of Electronic Banking, Volume 1, Number 1, 24 September 2008 ,pp. 16-35(20)Publisher: Inderscience Publishers
Using data from the Surveys of Consumers, this paper examines the portfolio of payment choicesthat different groups of consumers use and identifies the socio-economic, demographic, andattitudinal characteristics of groups of consumers that fall within those choice sets. We find thatyounger, married, more highly educated, higher income, higher asset households were morelikely to adopt a broad range of electronic payment choices. We also find that consumers'attitudes and perceptions of e-banking, in terms of security and privacy, convenience, and
familiarity and ease of use, were significant correlates of payment choices
6.The determinants of customer interactions with internet-enabled e-banking servicesAuthors: Liao, Z; Wong, W KSource: Journal of the Operational Research Society, Volume 59, Number 9, September 2008 ,pp. 1201-1210(10)Publisher: Palgrave Macmillan
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RESEARCH METHODOLOGYRESEARCH METHODOLOGY.
Research methodology is the specification of method of acquiring the information
needed to structure or solve the problem at hand. It is not concerned to decision of the fact, but
also building up to date knowledge and to discover the new facts involved through the process of
dynamic change in the society.
This chapter [presents a study of the method used for collection and analysis of data related to a
research projects entitled (E Banking). This study has been conducted within a short time frame.
Thus scope of the study is limited since secondary data were relied upon it is difficult to maintain
uniformity in sample size for comparative analysis of various aspects relating to E-Banking. Also
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qualitative analysis has been used in the main to arrive at conclusion rather than rigors statistical
analysis.
Scope of the Study
The area of survey for this research project is restricted to Bangalore only and includes some
corporate people from different corporate like Reliance,HDFC bank,ICICI bank, it also includes
students from Alliance university. Their are also some Doctors and C.A,s Included in the Study.
FIELD OF RESEARCH
Research was carried out through a survey at the areas :
CORPORATE ENTERPRISE
INTEL TECHNOLOGY
RELIANCE COMMUNICATIONS
ICICI BANK
HDFC BANK
PUNJAB NATIONAL BANK
STATE BANK OF INDIA
AIRTEL
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STUDY ALSO INCLUDES THE BUSINESSMAN
The survey was also done on DOCTORS OF NARAYANA HRUDAYALAYA
HOSPITAL BANGALORE, ACCOUTANTS, PROFFESORS OF
ALLIANCE COLLEGE BANGALORE
OPEN MARKET:- The survey was also done in big markets of Bangalore.
FORUM MALL BANGALORE GOPALAN MALL BANGALORE
Data Analysis and Interpretation:
The data collected has been analyzed through the tabulation based on percentage and actual
numbers or scores. Interpretation of the collected and the analyzed data have been done through
presentation in the form of appropriate figure i.e. pie chart
SAMPLING TECHNIQUES
* Convenience sampling
SAMPLE SIZE
* 150
SOURCE OF DATA
* Primary data is my investigation and secondary data is collected from various
websites and books.
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DATA COLLECTION INSTRUMENT
* Structured Schedules.
ANALYSIS AND INTERPRETATION
INTERPRETATION OF DATA SURVEY WITH ANALYSIS
Q1. Do you have a Bank Account?
TABLE NO:1
BANK ACCOUNT NO OF PEOPLE %OF RESPONDENTS
YES 138 92%
NO 12 8%
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TOTAL 150 100%
CHART SHOWING RESPONSE OFPEOPLE
No, 12,
8%
Yes,
138,
92%
Yes
No
When I asked this question to 150 people, 138 replied in Yes. 12 persons said no.
They are aware of banks but not availing the services due to personal reasons.
This thing clarifies that people are aware about advantages provided by the bank
and maximum are using it.
Q2. In which Sector do you have bank Account?
TABLE NO:2
SECTOR NO.OF
RESPONDENTS
% OF
RESPONDENTS
Private 53 38%
Public 59 43%
Both 26 19%
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Total 138 100%
SECTORS IN WHICH PEOPLE HAVE BANK
ACCOUNT
26, 19%53, 38%
59, 43%
Private
Public
Both
In this Question out of 138 People, 59 with the Percentage of 43 said that they are
using Public Banks,53 respondents with the Percentage of 38 said that they are
using Private Bank services and 26 respondents are using the services of both
Sector banks. So there is neck to neck fight between the banks of the country, most
of the corporate people are availing the private bank services.
Q3. Name the Bank in which you have bank Account?
TABLE NO:3
NAME OF BANK NO OF PEOPLEState Bank (SBI,SBP,SSS All) 34
ICICI 26
HDFC 22Punjab National Bank 20
Canara Bank 6
HSBC 6
Citi Bank 4
Dena Bank 2
IDBI Bank 7
Axis Bank 11
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Allahabad Bank 4
Kotak Mahindra Bank 10
Bank Of Baroda 1
Indian Overseas Bank 5
Oriental Bank of Commerce 6
WHEN WE INCLUDES BOTH OPTION IN THE PREVIOUS QUESTION THE
RESULT IS:
TOTAL PUBLIC: 85
TOTAL PRIVATE: 79
34
2622
20
6 64
2
711
4
10
15 6
0
5
10
15
20
25
30
35
40
BAR GRAPHS SHOWING BANKS IN WHICH
PEOPLE HAVE BANK ACCOUNTS
Q4. Is your Bank Providing E-Banking Services?
TABLE NO:4
TYPE OF RESPONSE NO OF PEOPLE %OF RESPONDENTS
YES 138 100%
NO 0 0%
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Each and every bank is providing the E Banking services so out of the people
surveyed all said that their bank is providing the E Banking Services, this shows
the scope of E Banking services in India
Q.5 Are you using the E Banking Services provided by yours bank? (If No
Move to Q.8,If yes ans all Questions.)
TABLE NO:5
TYPE OF RESPONSE NO OF PEOPLE %OF RESPONDENTS
YES 90 65%
NO 48 35%
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TOTAL 138 100%
90 480
10
20
30
40
50
60
70
80
90
100
YES NO
NO OF RESPONDENTS (OUT OF 138)
NO OF RESPONDENTS
The survey shows that out of 138 people who have the bank account 90 are using
the E banking services and 48 are not using the E Banking services, This shows the
increase of E banking In India ,But the Results can not be perfectly reliable
because the major chunk of people in the survey is the cooperates and businessman
which include Banks, Stock Exchange, Manufacturing Companies etc,May be the
major survey done in Government organizations and students the results might
have shown the different trend.
Q6. For what purpose you are using E-banking Services?
TABLE NO:6
PURPOSE NO OF
RESPONDENTS
% OF
RESPONDENTS
Payments of Bills 19 21%
Fund Transfer 28 31%
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Account Inquiry 9 11%
Share Trading 21 23%
Others, Like Rail Booking 13 14%
Total 90 100%
Payments of
Bills, 21%
Fund Transfer, 31%
Account
Inquiry, 11%
Share Trading, 23%
Others, Like Rail
Booking, 14%
% OF RESPONDENTS
Payments of Bills
Fund Transfer
Account Inquiry
Share Trading
Others, Like Rail Booking
According to the survey done maximum i.e. 31%people uses E Banking For the
purpose of Fund transfer, today many people are also using the E banking services
due to the Stock Market trading as many big stock companies access the transfer of
stocks through bank accounts .
Q7. How frequently do you avail the services of E-Banking?
TABLE NO:7
FREQUENCY NO OF
RESPONDENTS
% OF
RESPONDENTS
DAILY 9 10%
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WEEKLY 30 33%
MONTHLY 34 38%
DEPENDS 17 19%
TOTAL 90 100%
% OF RESPONDENTS SHOWING THE
FREQUENCY OF USE OF SERVICES
9, 10%
30, 33%
34, 38%
17, 19%
Daily
Weekly
Monthly
Depends
According to the survey maximum people that is 33% people use the service
weekly as according to their use , only the business man uses the services daily as
they has to see their daily transactions of their payments.
Q8. What is the transaction limit when you use online Banking?
TABLE NO:8
TRANSACTION LIMIT NO OF
RESPONDENTS
% OF RESPONDENTS
Below-25000 9 10%
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25000-50000 30 33%
50000-100000 34 38%
More then 1Lakh 17 19%
TOTAL 90 100%
BAR GRAPH SHOWING THE TRANSACTION LIMIT OF CUSTOMERS THROUGH
E BANKING (OUT OF 90)
According to the study maximum i.e. 34 OUT OF 90 people uses transaction
between Rs 50000-1lakh.
Q.9: What are the reasons for not using the E Banking services?
TABLE NO:9
REASON NO OF
RESPONDENTS
% OF
RESPONDENTS
Fear of hacking 15 31%
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Lack of knowledge 21 44%
Thinks that banks chargehefty for the service
8 17%
No Tendency to change 4 8%
TOTAL 48 100%
Fear of hacking
31%
Lack of knowledge
44%
Thinks that banks
charge hefty for the
service
12%
No Tendency to
change8%
Others
5%
% OF RESPONDENTS SHOWING REASONS FOR NOT
AVAILING THE SERVICE
According to the survey many people are not aware how to use the e banking
services they are knowing how to operate the computers but dont know the details
to use the e banking , as maximum people i.e. 44%people replied to this option ,
whereas on the other hand 31%people are not using due to hacking problems but
banks are coming up with this solution like using other techniques like
fingerprinting and retina system.
Q10. Do you think E-Banking is Advantageous? If No Skip Q11
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TABLE NO:10
Options No. of respondents
Yes 100
No 38
0
20
40
60
80
100
Yes No
100
38
NO OF RESPONDENTS
NOTE: The respondents who think that E Banking is not
advantageous are the people who are not using the E Banking
Services. As there are 38 people who thinks it is not advantageous ,but
acc to survey people not using the E Banking services are 48 , in this
10 people who are not using the services thinks that E Banking is
advantageous.
Q11. Rank the following advantages of E Banking according to yours choice?
TOTAL RESPONDENTS ARE 100
TABLE NO 9
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ADVANTAGENO OF PEOPLE
WITH RANK 1RANK 2 RANK 3 RANK 4 RANK 5
Anytime Transactions 42 29 25 4 0
Automatic updating of
accounts
7 9 16 43 25
Safer1 3 2 27 67
Others like no problem
of queue ,less burden of
cheques and pass books
35 40 13 11 1
Quick Transactions 15 19 44 15 7
According to the analysis done on the qualifying 100 people maximum says
anytime transaction as number 1, and on the other hand survey shows that people
also gives preference to less burden of queue, receipts, and pass books entries etc.
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
42
71
35
15
29
9
3
40
19
25
16
2
13
44
4
43
27
11
15
0
25
67
17
RANK 5
RANK 4
RANK 3
RANK 2
NO OF RESPONDENTS WITH RANK
1
Q.12: What are the suggestions you wants to give to the banks for the removal
of disadvantages if any, and for the improvement and expansion of the E
Banking services?
Ans: This was the open ended question the main aim of this question was to
identify the suggestions of the people who are not using the services to remove the
flaws, and to improve the services who are using the E Banking Facility.
There are many suggestions given by the different respondents two best one isgiven as below
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First one is given by Mr. Mahesh Thakurwho is Retired Flight Lieutenant in
Indian Air Force, Presently working as a Engineer in Reliance communication
Having the bank account in HDFC BANK amd ORIENTAL BANK OF
COMMERCE But not using the E Banking services. He says that
Due to Many frauds through the internet specially in the private banks customer
is always hesitating to use the service , no doubt the service is very good , but the
banks should have to create the trust among the minds of the people that E
banking is save through various other techniques can be any , rest Banks should
do more advertisements to increase the popularity ,and make it popular as ATMs
The second one is ofMr. Kuljit Singh who is a manager inPNB. Mr. Kuljit Singh
says that
First of all thanks to the college authorities who conducts this type of studies and
this data is very useful for us to improve, so as the banking is improving day by
day due to the competition so in order to make the customer fully satisfied there is
very much need on this type of services as sometimes due to heavy load on banks
on some days customer has to wait for a long time so E Banking will be very
helpful in overcoming this problem
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SUGGESTIONS
1. The banks should make their websites more secure to avoid the chance of
hacking and skimming of passwords.
2. Seminars should be conducted on mass scale to spread more awareness
about e banking and its advantages.
3. The system should be made easier and user friendly.
4. Newer and more innovative services should be provided.
5. Trust on customers that Their money is safe through E Banking
6. Banks should take the initiative to spread the awareness of E Banking as
they also know the necessity of E Banking in the Future.
7. Try to change the minds of the customers by showing the advantages of E
Banking.
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FINDINGS AND LIMITATIONS
FINDINGS
1. During my survey I found 138 out of 150 people are having bank accounts.
2. In case of common people maximum are having their accounts in Public
banks while in the case of Professionals and businessman more preference is
towards private banks.
3. In public sector banks, SBI is most preferred and in case of Private sector
ICICI is on the top.
4. 100%people are aware that their bank is providing the E Banking services.
5. Out of 138 respondents 90 are using the E Banking Service and 48 are not
using.
6. Maximum people use e banking for transfer of funds and Share Trading.
7. Many people who are not using the E banking service agree on the fact that e
banking is advantageous.
8. The main reason for not using the E Banking service is lack of knowledge as
44%people respond to it and hacking problem.
9. Banks are very much working on to remove the hacking problems and other
flaws in the way of E Banking.
10.Each and every customer wants a quick transaction they are not ready to
wait so banks are coming with new technologies to satisfy the customers this
reasons has also lead to change the way of Public Banks , like today only SBI is
the Only bank which provides the 9AM to 7PM Service in the recession time as
ICICI has also withdraw the 8 to 8 facility.
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LIMITATIONS
Sincere efforts have been made to collect authentic and reliable
information from respondents. However, the report is subject to the following
limitations.
1) Some respondents were reluctant to give information, so their responses
may be biased.
2) Time could be major limitation. It may be affect the influence through
drawn in the study.
3) Although the questionnaires were prepared after a pilot testing, but a few
points could have been missed.4) The study is restricted to Ludhiana Districts only.
5) Study suffers limitations of time and resource constraints.
6) Subjectivity in the response is another limitation of the study.
7) The respondents are asked to give their practical views but the results
may have been affected by personal biasness of the respondents.
8) Sometimes the respondents are normally busy, so there were chances that
the information obtained in some cases might have limited from actual.
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CONCLUSIONCONCLUSION
After doing the survey and interpreting the data, I can conclude that e banking is an
advantageous feature provided by the banks. People are using it and want more
innovations in it, including the people who are not using the facility also want to
use the E Banking facility if proper guidance and trust is made on them, I can also
conclude that Public banks are still favorable for common people due to their
improved services but the preference of Professionals and businessman is Private
sector banks due to quicker services.
THANK YOU
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BIBLIOGRAPHY
BIBLIOGRAPHY
1) Marketing Management : By Philip Kotler
2) Marketing Management : By Kalyani Publishers
3) Research methodology : : By C.R. Kothari
4) Business Today
5) Internet
5.1 www.google.com
5.2 www.hdfcbank.com
5.3 www.ingenta.com
5.4 www.bankrate.com
5.5 www.emarldinsight.com
5.6 www.wikepedia.com
5.7 www.altavista.com
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SCHEDULE
Q1. Do you have a Bank Account?
Yes
No
Q2. In which Sector do you have bank Account?
Private
Public
Both
Q3. Name the Banks in which you have bank Account?
Q4. Is your Bank Providing E-Banking Services?
Yes
No
Q5. Are you using the E Banking Services provided by yours bank? (If No Move to Q.9,If yes
ans all Questions.)
Yes
No
Q6. For what purpose you are using E-banking Services?
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Q11. Rank the following advantages of E Banking according to yours choice?
Anytime Transactions
Automatic updating of accounts
Safer
Others like no problem of queue ,less burden of cheques and pass books.
Quick Transactions
Q.12:What are the suggestions you wants to give to the banks for the removal of disadvantages if
any ,and for the improvement and expansion of the E Banking services?
NAME: ___________________________________
AGE:- _______Yrs
CONTACT NUMBER: ______________________
QUALIFICATION: _________________________