Executive Summary

Purpose: This study is an attempt to show the extent and quality of services and products offered

on and off the internet by various banks in India. Particularly, it seeks to examine the area of

electronic banking (popularly known as e-banking) and its influence on the population of a

developing country like India.

Approach: The data for this study primarily consists of annual reports and the ratios to show the

strength of banks in different sectors of the banking industry such as private, public, foreign,

regional rural and cooperative. Data for e-banking analysis is collected from the banks’

respective websites.

Findings: The results show that internet banking is still not very popular in India and is in the

development stage. The Quantitative Evaluation Method (QEM) has helped evaluate the

presence of e-banking in India. Some banks have still not provided their customers with internet

banking facilities while there are other banks that are excelling in the field of internet banking.

Limitations: One of the main limitations of this research is its scope and size which may have

an affect on the strength of conclusions that can be drawn. But, any conclusions in this research

are proved fully with statistical evidence.

Originality/Value: The knowledge and understanding of the subject of ‘e-banking’ is necessary

for the ‘modern individual’ to survive in this generation-X. E-banking also provides banks to

further their grip in their respective target markets and provide extensive services in the dawn of

the e-banking age in India.

Keywords: Banking, services, quality, e-banking, influence, statistical evidence, India.

Literature Review

Who Topic When Method Results Links

Yazan

K.A

Migdadi

Quantitative Evaluation

of the Internet Banking

Service Encounter's

Quality: Comparative

Study between Jordan

and the UK Retail

Banks.

August

, 2008

Quantitative

descriptive

survey

methodology

UK – Developed and

Jordan – Developing.

Results were the same

(not much of a difference

in quality).

http://

www.arrayd

ev.com/

commerce/

jibc/2008-

08/

Yazan_1.pd

f

Himani Online BankingJune,

2008

Contingenc

y Analysis

Method

Regulation and

supervision required for

the smooth working of e-

banking.

Solution – Setting up of

EBG (Electronic Banking

Group) for risk

management.

http://

www.oppap

ers.com/

essays/

Online-

Banking/

152188

The above mentioned research papers are fairly new and in tune with the needs of this research.

Researchers as Evans and King (1999), Olisna et al. (1999), Mateos et al. (2001) and Miranda et

al. (2006) used the web site quantitative evaluation method (QEM) as a powerful approach to

assess the artefact quality, the process of (QEM) is; categorizing, identifying factors, identifying

weights, rating the factors, and identifying the total quality indices.

The same process of QEM has been used for this research where, the categories are identified

and rated quantitatively and final indices are assigned. This helps in surveying the services with a

range of criteria in hand and obtaining standard results.

Introduction:

The Indian banking industry is passing through a phase of customers market. The customers

have more choices in choosing their banks. A competition has been established within the banks

operating in India. Now, banks are also adding services to their customers.

With stiff competition and advancement of technology, the services provided by banks have

become more easy and convenient. Gone are those days when long lines had to be formed to

apply for a new cheque book or to transfer money to another account or to get a bank pass book

updated.

Welcome to the era of internet banking or electronic banking or e-banking. Whatever the name,

it serves the same purpose.

Banks are ready to incur costs of around INR400,000 – INR500,000 for setting up the basic

services and for the high end, sophisticated services, INR4 million – INR5 million are spent.

These are investments of negligible value as compared to the expenditure on physical

infrastructure of these banks and their operations.

Electronic Banking is conducting ones banking or bank account online through a computer and

an internet connection. Through e-banking one can check the status of his/her account, place

queries and also can be facilitated with a wide range of transaction services simultaneously.

These days, a range of services is provided by banks making it a very wide spectrum, from the

very basic services such as fixed deposit enquiries, cheque book application, account statements,

etc., to the high end services such as bill payments, fund transfers, payment of credit card dues

and much more.

The current statistics show that hardly 10 per cent 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 the banks.

According to statistics provided by banks, 17 per cent of ICICI bank customers use the Internet

for banking and 10 per cent of HDFC bank customers prefer it.

Advantages of Net Banking

The Banks’ Perspective

The hindrance of geographical barriers is removed with the help of internet banking, banks can

reach out to a much wider base of customers as compared to the traditional way. Internet banking

has enabled the local banks to operate in the global scenario.

This is a very efficient and cost effective technique of banking. It has provided the banks with

the challenge of developing and catching up with the fast pace of the industry and banks failing

to adopt this technique prove to be lagging behind and underdeveloped.

The Customers’ Perspective

Electronic banking has come to be developed as a host of a wide bouquet of services ranging

from queries to real time transactions. It offers the customers the flexibility of banking from any

part of the world which has narrowed the physical gap between the banks and their customers.

Banking in India

In India the banks are segregated in different groups. Each group has their own benefits and

limitations in operating in India. Each has their own dedicated target market. Few of them only

work in rural sector while others in both rural as well as urban. Many even are only catering in

cities. Some are of Indian origin and some are foreign players.

This research includes the following categories:

Reserve Bank

Private Sector

HDFC Bank

ICICI Bank

Regional Rural

United Bank of India (UBI)

Sindhanur Urban Souharda Co-operative Bank (SUCO Bank)

Foreign Banks

CITI Bank

HSBC Bank

Public Sector

Bank of Baroda

Canara Bank

More shall be discussed about these banks in the course of this report.

ICICI Bank

The webpage of ICICI Bank clearly mentions about the banks general information and history.

The financial results are clearly given in figures and well explained, annual reports are well

updated and employment information is also mentioned in the website which provides links for

career opportunities, campus recruitment and careers counseling. A separate section for updated

news is maintained which is a good feature for a bank webpage. Rates for senior citizens are

mentioned separately. Net banking is easy to access, which makes transfer of money from

different places and account transfers are made simple.

Calculators are a comprehensive feature of the homepage. Bill payment service is the best online

service provided by ICICI Bank.

Drawbacks are numerous. Links to financial information, community information, local and non-

local business are difficult to search. The website also needs to improve on its search function.

Though being one of the top banks in India, Hindi language facility is not provided. The

aesthetics of the webpage are not very pleasing.

Bank of Baroda

The webpage of Bank of Baroda has very extensive information on the bank profile. It has an

accurate annual report which shows all the financial educational information. Interest rates on

different products and services are updated regularly. It also provides calculators on various

transactions. There is an added feature to the calculators – the EMI calculator.

With all the basic facilities being provided, Bank of Baroda has fallen short on some important

features i.e. account information access and access to various online services such as online

insurance, online brokerage and online trusts. The does not even provide information on wireless

capabilities such as phone banking, SMS banking, etc.

The website is quite easy to access and has the shades of the Indian national flag which is very

aesthetically appealing.

Canara Bank

It has the details of general banking and history provided with accurate annual reports along with

an auditors report addressing the President of India. Interest information is very well updated and

the bank has provided its customers with a view of the external market as well. Canara Bank has

not filled the homepage with its own information only.

Financial calculators are easily accessible, applications for various services and account

information accessibility are well explained.

The employment information seems to be left on its own as the clicks resulted in very outdated

and useless databases. Does not have a very wide range of internet banking services and

corporate services and does not have a Hindi language facility which makes it very inconvenient

for Hindi literate customers to access various services.

The aesthetics though are very pleasing, search functions, community information, local and

non-local business links are very ideally placed on the website.

HSBC Bank

General banking information and the profile of the bank are very well put up on the webpage.

The annual reports are well updated along with many other review reports. Employment

information such as career opportunities, campus recruitment and career counseling are a very

integral part of HSBC Bank. It also hosts the CV builder which makes it very easy for

prospective employees to build their CVs according to the needs of the various sectors of the

bank. The interest rates and financial calculators are available on the homepage.

Account information access and applications for services are well defined. All the services that

can be linked with e-banking are found under one single canopy of the webpage of HSBC bank.

Corporate services, online insurance, bill payments are some of the very best services provided

by the bank. Links to financial information, community information, local and non-local

business are very easily available. The bank is proud to host a webpage of this kind which is

extremely user friendly with all the possible services provided.

Just one drawback of this webpage is that Hindi language facility is not provided which makes it

very difficult for the Hindi literate customers to access any part of the webpage.

CITI Bank

The general banking information and history is not very up to the mark. Financial educational

information is very well set up for the customers accessing this webpage. Financial calculators

and interest rates as in the case of all other banks, are provided. Account information access and

applications for services are not on the homepage but have a separate link which leads to their

access. All internet banking services are very quickly accessible. CITI bank guarantees that no

money is held in ‘cyber-space’ and that all transactions are quickly processed.

The portal is linked to all the essential information such as financial information, community

information, local and non-local businesses. Wireless capabilities, search functions are found on

the webpage.

The drawbacks of the webpage are that the aesthetics are not very pleasing and Hindi language

facility is not provided.

1 2 3 4 5 6 7 8 9 Total

Score

Level (0) Informational

1. General Bank info. & Hitory 8 8 10 4 4 8 6 9 8 7.2

2. Financial Educational Info. 7 9 7 - - 7 7 6 8 5.6

3. Employment Info. 6 6 8 4 4 7 7 4 7 5.8

4. Interest/Murabaha 7 5 5 5 5 6 8 8 8 6.3

5. Financial Calculator 8 5 - - - 6 7.5 7 8 4.6

Level (1) Administrative

6. Accounts info. Access 9 8 7 - - 7 8 6 6 5.7

7. Application for services 9 8 8 2 2 9 7 6 7 6.4

Level (2) Transactional

8. Personal Finance and Software

Application

- - - - - 7 - 7 5 2.1

9. Account Transfer Capabilities - 9 8 - - 8 7 7.5 5 4.9

10. Bill-Pay Services - 9 5 - - 6 6 5 5 4

11. Corporate Services - 9 7 - - 9 5 7 6 4.7

12. Online Insurance - 9 8 - - 5 5 5 5 4.1

13. Insurance Brokerage - 6 7 - - - - 6 4 2.5

14. Online Trust - 5 7.5 - - - - 5.5 4 2.4

Level (3) Portal

15. Links to Financial Info. 10 10 8 5 5 8 7 8 8 7.6

16. Links to Community Info. 9 8 7 5 6 6 7 6.5 7 6.8

17. Links to Local Business 8 8 7 6 - 6 8 7 7 6.3

18. Links to non-local Business 5 7 6 6 - 7 6 8.5 6 5.7

Level (4) Others

19. Wireless Capabilities 6 7 - - - 8 5 7 6 4.3

20. Search Function 9 10 7 - 7 8 9 9 9 7.5

21. Provide Hindi Language Facilities 8 10 - - - - - 9 6 3.6

Overall Score 8 8.5 8 5 5 8 7 7 6

Presence Percentage (%) 97 95 93 60 63 9 91 84 72

6

Ranking 1 6 5 9 8 2 4 3 7

Average of Presence (%) 88 85 92 55 60 8

9

75 76 69

Add-ons????? 10 6 6 - 3 - 4 6 5

Ease/Difficulty to access Website 1-10 7 9 8 9 7 9 9 8 8

Aesthetics of Website 1-10 8 8 7 4 6 9 8 9 6

Ease to Read & Understand 1-10 9 10 8 5 7 9 9 9 7

66/100