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CHAPTER – 1

INTRODUCTION TO

SUBJECT

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INTRODUCTION TO SUBJECT

1.1.1 INTRODUCTION OF E-BANKING

The world is changing at a staggering rate and technology is considered to be the key

driver for these changes around us. An analysis of technology and its uses show that it

has permeated in almost every aspect of our life. Many activities are handled

electronically due to the acceptance of information technology at home as well as at

workplace. Slowly but steadily, the Indian customer is moving towards the internet

banking. The ATM and the Net transactions are becoming popular. But the customer

is clear on one thing that he wants net-banking to be simple and the banking sector is

matching its steps to the march of technology. E-banking or Online banking is a

generic term for the delivery of banking services and products through the electronic

channels such as the telephone, the internet, the cell phone etc. The concept and scope

of e-banking is still evolving. It facilitates an effective payment and accounting

system thereby enhancing the speed of delivery of banking services considerably.

Several initiatives have been taken by the Government of India as well as the RBI

(Reserve Bank of India); have facilitated the development of e-banking in India. The

government of India enacted the IT Act, 2000, which provides legal recognition to

electronic transactions and other means of electronic commerce. The RBI has been

preparing to upgrade itself as regulator and supervisor of the technologically

dominated financial system. It issued guidelines on the risks and controls in computer

and telecommunication systems to all banks, advising them to evaluate the risks

inherent in the systems and put in place adequate control mechanisms to address these

risks.

WHAT IS E-BANKING?

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

over. Various authors define E-Banking differently but the most definition depicting

the meaning and features of E-Banking are as follows:

1. Banking is a combination of two, Electronic technology and Banking.

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2. Electronic Banking is a process by which a customer performs banking

Transactions electronically without visiting a brick-and-mortar institutions.

3. E-Banking denotes the provision of banking and related service through

Extensive use of information technology without direct recourse to the bank by

the customer.

NEED FOR E-BANKING

One has to approach the branch in person, to withdraw cash or deposit a cheque or

request a statement of accounts. In true Internet banking, any inquiry or transaction is

processed online without any reference to the branch (anywhere banking) at any time.

Providing Internet banking is increasingly becoming a "need to have" than a "nice to

have" service. The net banking, thus, now is more of a norm rather than an exception

in many developed countries due to the fact that it is the cheapest way of providing

banking services.

Banks have traditionally been in the forefront of harnessing technology to improve

their products, services and efficiency. They have, over a long time, been using

Bank

Information

technology

Customer

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electronic and telecommunication networks for delivering a wide range of value

added products and services. The delivery channels include direct dial – up

connections, private networks, public networks etc and the devices include telephone,

Personal Computers including the Automated Teller Machines, etc. With the

popularity of PCs, easy access to Internet and World Wide Web (WWW), Internet is

increasingly used by banks as a channel for receiving instructions and delivering their

products and services to their customers. This form of banking is generally referred to

as Internet Banking, although the range of products and services offered by different

banks vary widely both in their content and sophistication.

1.1.2 HISTORY OF E- BANKING

The precursor for the modern home online banking services were the distance banking

services over electronic media from the early '80s. The term online became popular in

the late '80s and refers to the use of a terminal, keyboard and TV (or monitor) to

access the banking system using a phone line. ‘Home banking’ can also refer to the

use of a numeric keypad to send tones down a phone line with instructions to the

bank. Online services started in New York in 1981 when four of the city’s major

banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered

home banking services using the videotex system. Because of the commercial failure

of videotex these banking services never became popular except in France where the

use of videotex (Minitel) was subsidised by the telecom provider and the UK, where

the Prestel system was used.

The UK’s first home online banking services were set up by the Nottingham Building

Society (NBS) in 1983 ("History of the Nottingham" Retrieved on 2007-12-14.). The

system used was based on the UK's Prestel system and used a computer, such as the

BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and

television set. The system (known as 'Homelink') allowed on-line viewing of

statements, bank transfers and bill payments. In order to make bank transfers and bill

payments, a written instruction giving details of the intended recipient had to be sent

to the NBS who set the details up on the Homelink system. Typical recipients were

gas, electricity and telephone companies and accounts with other banks. Details of

payments to be made were input into the NBS system by the account holder via

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Traditional banking

Gunpowder

Personalized services, time consuming, limited access

Virtual or E-banking

Nuclear charged

Real time transactions,

integrated platform, all time access

Prestel. A cheque was then sent by NBS to the payee and an advice giving details of

the payment was sent to the account holder. BACS was later used to transfer the

payment directly. Stanford Federal Credit Union was the first financial institution to

offer online internet banking services to all of its members in Oct, 1994.

EVOLUTION OF E-BANKING

The story of technology in banking started with the use of punched card machines like

Accounting Machines or Ledger Posting Machines. The use of technology, at that

time, was limited to keeping books of the bank. It further developed with the birth of

online real time system and vast improvement in telecommunications during late

1970’s and 1980’s.it resulted in a revolution in the field of banking with “convenience

banking” as a buzzword. Through Convenience banking, the bank is carried to the

doorstep of the customer.

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

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

technologies. Now with distribution technologies, one could configure dedicated

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

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

end machine.

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

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

beneficial and cost effective. Technology in the form of E-banking has made it

possible to find alternate banking practices at lower costs.

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More and more people are using electronic banking products and services because

large section of the banks future customer base will be made up of computer literate

customer, the banks must be able to offer these customer products and services that

allow them to do their banking by electronic means. If they fail to do this will, simply,

not survive. New products and services are emerging that are set to change the way

we look at money and the monetary system.

1.1.3 USAGE OF E-BANKING

The rise in the e-commerce and the use of internet in its facilitation along with the

enhanced online security of transactions and sensitive information has been the core

reason for the penetration of online banking in everyday life. According to the latest

official figures from the office of National Statistics ( ONS 2007) indicate that

subscriptions to the internet has grown more than 50% from 25 million in 2005 to 45

million in 2007 in India. It has also been estimated that 60% of the population in India

use internet in their daily lives. The fundamental shift towards the involvement of the

customer in the financial service provision with the help of the technology especially

internet has helped to reduce the costs of financial institutions as well as helped client

to use the service at anytime and from virtually anywhere with access to an internet

connection. The use of electronic banking has removed personnel that facilitate the

transactions and has placed additional responsibilities on the customers to transact

with the service. The computerization of the banking operations has made maximum

impact on:-

1) Internal Accounting System

2) Customer service

3) Diversification of system

1.1.4 INTERNET BANKING VERSUS TRADITIONAL BANKING

In spite of so many facilities that Internet banking offers us, we still seem to trust our

traditional method of banking and is reluctant to use online banking. But here are few

cases where Internet banking will turn out to be a better option in terms of saving your

money.

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'Stop payment' done through Internet banking will not cost any extra fees but when

done through the branch, the bank may charge you Rs 50 per cheque plus the service

tax.

Through Internet banking, you can check your transactions at any time of the day, and

as many times as you want to. On the other hand, in a traditional method, you get

quarterly statements from the bank and if you request for a statement at your required

time, it may turn out to be an expensive affair. The branch may charge you Rs 25 per

page, which includes only 30 transactions. Moreover, the bank branch would take

eight days to deliver it at your doorstep.

If the fund transfer has to be made outstation, where the bank does not have a branch,

the bank would demand outstation charges. Whereas with the help of online banking,

it will be absolutely free for you. As per the Internet and Mobile Association of

India's report on online banking 2006, "There are many advantages of online banking.

It is convenient, it isn't bound by operational timings, there are no geographical

barriers and the services can be offered at a miniscule cost."

1.1.5 IMPACT OF E-BANKING ON TRADITIONAL SERVICES

One of the issues currently being addressed is the impact of e-banking on traditional

banking players. After all, if there are risks inherent in going into e-banking there are

other risks in not doing so. It is too early to have a firm view on this yet. Even to

practitioners the future of e-banking and its implications are unclear. It might be

convenient nevertheless to outline briefly two views that are prevalent in the market.

The view that the Internet is a revolution that will sweep away the old order holds

much sway. Arguments in favor are as follows:

E-banking transactions are much cheaper than branch or even phone transactions.

This could turn yesterday’s competitive advantage - a large branch network - into a

comparative disadvantage, allowing e-banks to undercut bricks-and-mortar banks.

This is commonly known as the "beached dinosaur" theory.

E-banks are easy to set up so lots of new entrants will arrive. ‘Old-world’ systems,

cultures and structures will not encumber these new entrants. Instead, they will be

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adaptable and responsive. E-banking gives consumers much more choice. Consumers

will be less inclined to remain loyal.

E-banking will lead to an erosion of the ‘endowment effect’ currently enjoyed by the

major UK banks. Deposits will go elsewhere with the consequence that these banks

will have to fight to regain and retain their customer base. This will increase their cost

of funds, possibly making their business less viable. Lost revenue may even result in

these banks taking more risks to breach the gap.

Portal providers are likely to attract the most significant share of banking profits.

Indeed banks could become glorified marriage brokers. They would simply bring two

parties together – e.g. buyer and seller, payer and payee. The products will be

provided by monolines, experts in their field. Traditional banks may simply be left

with payment and settlement business – even this could be cast into doubt.

Traditional banks will find it difficult to evolve. Not only will they be unable to make

acquisitions for cash as opposed to being able to offer shares, they will be unable to

obtain additional capital from the stock market. This is in contrast to the situation for

Internet firms for whom it seems relatively easy to attract investment. There is of

course another view which sees e-banking more as an evolution than a revolution. E-

banking is just banking offered via a new delivery channel. It simply gives consumers

another service (just as ATMs did). Like ATMs, e-banking will impact on the nature

of branches but will not remove their value. Experience in Scandinavia (arguably the

most advanced e-banking area in the world) appears to confirm that the future is

‘clicks and mortar’ banking. Customers want full service banking via a number of

delivery channels. The future is therefore ‘Martini Banking’ (any time, any place,

anywhere, anyhow).

Traditional banks are starting to fight back. The start-up costs of an e-bank are high.

Establishing a trusted brand is very costly as it requires significant advertising

expenditure in addition to the purchase of expensive technology (as security and

privacy are key to gaining customer approval). E-banks have already found that retail

banking only becomes profitable once a large critical mass is achieved. Consequently

many e-banks are limiting themselves to providing a tailored service to the better off.

Nobody really knows which of these versions will triumph. This is something that the

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market will determine. However, supervisors will need to pay close attention to the

impact of e-banks on the traditional banks, for example by surveillance of:

• strategy

• customer levels

• earnings and costs

• advertising spending

• margins

• funding costs

• Merger opportunities and threats, both in the UK and abroad.

1.1.6 DIAGRAM OF E-BANKING SYSTEM

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1.1.7 E-BANKING PRODUCTS

Automated Teller Machine (ATM): These are cash dispensing machine, which are

frequently seen at banks and other locations such as shopping centers and building

societies. Their main purpose is to allow customer to draw cash at any time and to

provide banking services where it would not have been viable to open another branch

e.g. on university campus.

An automated teller machine or automatic teller machine (ATM) is a

computerized telecommunications device that provides a financial institution's

customers a method of financial\ transactions in a public space without the need for a

human clerk or bank teller. On most modern ATMs, the customer identifies him or

herself by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard

with a chip that contains his or her card number and some security information, such

as an expiration date or CVC (CVV). Security is provided by the customer entering a

personal identification number (PIN).

Using an ATM, customers can access their bank accounts in order to make cash

withdrawals (or credit card cash advances) and check their account balances. Many

ATMs also allow people to deposit cash or checks, transfer money between their bank

accounts, pay bills, or purchase goods and services.

Some of the advantages of ATM to customers are:-

• Ability to draw cash after normal banking hours

• Quicker than normal cashier service

• Complete security as only the card holder knows the PIN

• Does not just operate as a medium of obtaining cash.

• Customer can sometimes use the services of other bank ATM’s.

Tele banking or Phone Banking: Telephone banking is relatively new Electronic

Banking Product. However it is fastly becoming one of the most popular products.

Customer can perform a number of transactions from the convenience of their own

home or office; in fact from anywhere they have access to phone. Customers can do

following:-

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• Check balances and statement information

• Transfer funds from one account to another

• Pay certain bills

• Order statements or cheque books

• Demand draft request

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

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

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

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

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

current interest rates etc.

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

multiple channels banking providing convenience for its customer. A versatile

multifunctional, free service that is accessible and viewable on the monitor of mobile

phone. Mobile phones are playing great role in Indian banking- both directly and

indirectly. They are being used both as banking and other channels.

Internet Banking: The advent of the Internet and the popularity of personal

computers presented both an opportunity and a challenge for the banking industry.

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

million of daily transactions; today, often the only paper record is the customer’s

receipt at the point of sale. Now that their customers are connected to the Internet via

personal computers, banks envision similar advantages by adopting those same

internal electronic processes to home use. Banks view online banking as a powerful

“value added” tool to attract and retain new customers while helping to eliminate

costly paper handling and teller interactions in an increasingly competitive banking

environment. In India first one to move into this area was ICICI Bank. They started

web based banking as early as august 1997.

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1.1.8 TYPES OF INTERNET BANKING OR E-BANKING

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

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

being employed in the marketplace.

• Informational- this is the basic level of Internet banking. Typically, the bank

has marketing information about the bank’s products and services on a stand-

alone server. The risk is relatively low, as informational systems typically

have no path between the server and the bank’s internal network. This level of

Internet banking can be provided by the banks or outsourced. While the risk to

a bank is relatively low, the server or web site may be vulnerable to alteration.

Appropriate controls therefore must be in place to prevent unauthorized

alterations to the bank’s server or web site.

• Communicative- this type of Internet banking systems and the customer. The

interaction between the bank’s system and the customer. The interaction may

be limited to electronic mail, account enquiry, loan applications, or static file

updates (name and address change). Because these servers may have a path to

the bank’s internal networks, the risk is higher with this configuration than

with informational systems. Appropriate controls need to be in the place to

prevent, monitor, and alert management of any unauthorized attempt to access

the bank’s internal networks and computer systems. Virus controls also

become much more critical in this environment.

• Transactional- this level of Internet banking allows customers to execute

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

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

have the strongest controls. Customer transactions can include accessing

accounts, paying bills, transferring funds etc.

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1.1.9 FEATURES OF E-BANKING

Transactional: (e.g. performing a financial transaction such as an account to account

transfer, paying a bill or applications like applying for a loan, new account, etc.)

• Electronic Bill Presentment and Payment (EBPP)

• Funds transfer between customers own checking and savings accounts, or to

another customers account.

• Investment purchase or sale.

• Loan application and transactions such as repayments.

Non-transactional: (e.g. online statements, Check links, Chat, Co-browsing etc.)

Financial Institution Administration- features allowing financial institutions to

manage the online experience of their end users.

ASP/ Hosting Administration – features allowing the hosting company to administer

the solution across financial institution.

1.1.10 ADVANTAGES OF E-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. With pressures on time and longer travelling periods, more and

more people find it tiresome waiting in queues. People want flexibility, and

Internet banking offers just that.

• 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

IRA’s, CDs, even securities, from one secure site.

• Effectiveness- Many online banking sites now offer sophisticated tools,

including account aggregation, stock quotes, rate alert and portfolio managing

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program to help you manage all of your assets more effectively. Most are also

compatible with money managing programs such as quicken and Microsoft

money.

• Cheaper alternative: - With increasing competition, it seems to be the cost

factor that is driving banks to offer the facility. The Internet is still a very

cheap alternative to opening a physical branch, and most of the push seems to

be coming from the supply side. The costs of a banking service through the

Internet form a fraction of costs through conventional methods.

• From snob value to necessity:- A couple of years ago, there was a belief even

among bankers that customers opening new accounts wanted the online

banking facility, just to "feel good" and very few of them actually used the

services. Today, bankers believe that the trend from `nice to have' is changing

to `need to have'. The "snob value" of banking with an organisation that could

offer service on the Internet has given way to a genuine necessity, he feels. "It

all depends on how busy a person is."

DISADVANTAGES OF INTERNET BANKING

• Start-up may take time-In order to register for your bank’s online program,

you will probably have to provide ID and sign a form at a bank branch. If you

and your spouse wish to view and manage their 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 curves- 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.

1.1.11 HOW E-BANKING CAN EASE YOUR LIFE

Indian banks are trying to make your life easier. Not just bill payment, you can make

investments, shop or buy tickets and plan a holiday at your fingertips. In fact, sources

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from ICICI Bank tell us, "Our Internet banking base has been growing at an

exponential pace over the last few years. Currently around 78 per cent of the bank's

customer base is registered for Internet banking." To get started, all you need is a

computer with a modem or other dial-up device, a checking account with a bank that

offers online service and the patience to complete about a one-page application--

which can usually be done online. You can avail the following services.

1. Bill payment service: Each bank has tie-ups with various utility companies,

service providers and insurance companies, across the country. It facilitates the

payment of electricity and telephone bills, mobile phone, credit card and insurance

premium bills. To pay bills, a simple one-time registration for each biller is to be

completed. Standing instructions can be set, online to pay recurring bills,

automatically. One-time standing instruction will ensure that bill payments do not

get delayed due to lack of time. Most interestingly, the bank does not charge

customers for online bill payment.

2. Fund transfer: Any amount can be transferred from one account to another of the

same or any another bank. Customers can send money anywhere in India. Payee’s

account number, his bank and the branch is needed to be mentioned after logging in

the account. The transfer will take place in a day or so, whereas in a traditional

method, it takes about three working days. ICICI Bank says that online bill payment

service and fund transfer facility have been their most popular online services.

3. Credit card customers: Credit card users have a lot in store. With Internet

banking, customers can not only pay their credit card bills online but also get a loan

on their cards. Not just this, they can also apply for an additional card, request a credit

line increase and God forbid if you lose your credit card, you can report lost card

online.

4. Railway pass: This is something that would interest all the aam janta. Indian

Railways has tied up with ICICI bank and you can now make your railway pass for

local trains online. The pass will be delivered to you at your doorstep. But the facility

is limited to Mumbai, Thane, Nasik, Surat and Pune. The bank would just charge Rs

10 + 12.24 percent of service tax.

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5. Investing through Internet banking: Opening a fixed deposit account cannot get

easier than this. An FD can be opened online through funds transfer. Online banking

can also be a great friend for lazy investors. Now investors with interlinked demat

account and bank account can easily trade in the stock market and the amount will be

automatically debited from their respective bank accounts and the shares will be

credited in their demat account.

Moreover, some banks even give the facility to purchase mutual funds directly from

the online banking system. So it removes the worry about filling those big forms for

mutual funds, they will now be just a few clicks away. Nowadays, most leading banks

offer both online banking and demat account. However if the customer have there

demat account with independent share brokers, then need to sign a special form,

which will link your two accounts.

6. Recharging your prepaid phone: Now there is no need to rush to the vendor to

recharge the prepaid phone, every time the talk time runs out. Just top-up the prepaid

mobile cards by logging in to Internet banking. By just selecting the operator's name,

entering the mobile number and the amount for recharge, the phone is again back in

action within few minutes.

7. Shopping at your fingertips: Leading banks have tie ups with various shopping

websites. With a range of all kind of products, one can shop online and the payment is

also made conveniently through the account. One can also buy railway and air tickets

through Internet banking.

1.1.12 INTERNET BANKING IN INDIA

The Reserve Bank of India constituted a working group on Internet Banking. The

group divided the internet banking products in India into 3 types based on the levels

of access granted. They are:

• Information Only System: General purpose information like interest rates,

branch location, bank products and their features, loan and deposit calculations

are provided in the banks website. There exist facilities for downloading

various types of application forms. The communication is normally done

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through e-mail. There is no interaction between the customer and bank's

application system. No identification of the customer is done. In this system,

there is no possibility of any unauthorized person getting into production

systems of the bank through internet.

• Electronic Information Transfer System: The system provides customer-

specific information in the form of account balances, transaction details, and

statement of accounts. The information is still largely of the 'read only' format.

Identification and authentication of the customer is through password. The

information is fetched from the bank's application system either in batch mode

or off-line. The application systems cannot directly access through the

internet.

• Fully Electronic Transactional System: This system allows bi-directional

capabilities. Transactions can be submitted by the customer for online update.

This system requires high degree of security and control. In this environment,

web server and application systems are linked over secure infrastructure. It

comprises technology covering computerization, networking and security,

inter-bank payment gateway and legal infrastructure. It includes the

followings:

o ATM

o DEBIT CARDS

o SMART CARDS

o MOBILE BANKING

1.1.13 THE INDIAN SCENARIO

DRIVERS OF CHANGE: Advantages previously held by large financial institutions

have shrunk considerably. The Internet has levelled the playing field and afforded

open access to customers in the global marketplace. Internet banking is a cost-

effective delivery channel for financial institutions. Consumers are embracing the

many benefits of Internet banking. Access to one's accounts at anytime and from any

location via the World Wide Web is a convenience unknown a short time ago. Thus, a

bank's Internet presence transforms from 'brouchreware' status to 'Internet banking'

status once the bank goes through a technology integration effort to enable the

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customer to access information about his or her specific account relationship. The six

primary drivers of Internet banking includes, in order of primacy are:

• Improve customer access

• Facilitate the offering of more services

• Increase customer loyalty

• Attract new customers

• Provide services offered by competitors

• Reduce customer attrition

INDIAN BANKS ON WEB

The banking industry in India is facing unprecedented competition from non-

traditional banking institutions, which now offer banking and financial services over

the Internet. The deregulation of the banking industry coupled with the emergence of

new technologies, are enabling new competitors to enter the financial services market

quickly and efficiently.

Indian banks are going for the retail banking in a big way. However, much is still to

be achieved. This study that was conducted by students of IIML shows some

interesting facts:

• Throughout the country, the Internet Banking is in the nascent stage of

development (more than 50 banks are offering varied kind of Internet banking

services).

• In general, these Internet sites offer only the most basic services. 55% are so

called 'entry level' sites, offering little more than company information and

basic marketing materials. Only 8% offer 'advanced transactions' such as

online funds transfer, transactions & cash management services.

• Foreign & Private banks are much advanced in terms of the number of sites &

their level of development.

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1.1.14 EMERGING CHALLENGES

Information technology analyst firm, the Meta Group, recently reported "financial

institutions who don't offer home banking by the year 2000 will become

marginalized." By the year of 2002, a large sophisticated and highly competitive

Internet Banking Market will develop which will be driven by

• Demand side pressure due to increasing access to low cost electronic services.

• Emergence of open standards for banking functionality.

• Growing customer awareness and need of transparency.

• Global players in the fray

• Close integration of bank services with web based E-commerce or even

disintermediation of services through direct electronic payments (E- Cash).

• More convenient international transactions due to the fact that the Internet

along with general deregulation trends eliminates geographic boundaries.

• Move from one stop shopping to 'Banking Portfolio' i.e. unbundled product

purchases.

Certainly some existing brick and mortar banks will go out of business. But that's

because they fail to respond to the challenge of the Internet. The Internet and its

underlying technologies will change and transform not just banking, but also all

aspects of finance and commerce. It represents much more than a new distribution

opportunity. It will enable nimble players to leverage their brick and mortar presence

to improve customer satisfaction and gain share. It will force lethargic players who

are struck with legacy cost basis, out of business-since they are unable to bring to play

in the new context.

1.1.15 E-BANKING WORLD WIDE

Since its inception, Internet banking has experienced strong and sustained growth.

World Bank report on leapfrogging in e-finance pointed out that the three countries

with impressive progress in information technology in this sense are Estonia,

Republic of Korea and Brazil. Creation of the world’s leading electronic banking

systems has been done at a remarkably low cost compared to other world-class

internet banks.

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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), not only among Eastern European countries but in world rankings,

through a combination of easy to- use software, free-of-charge transactions and

behavior changes resulting from the influence of the Nordic countries’ IT culture on

Estonia.

A sector in which Latin America is seems to be performing better than in other

industries is online retail banking. Growth in this area has been driven by traditional

banks, which have used the online channel to generate customer loyalty and improve

their operating margins. 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. It adopted legislation providing for the

development of both E-Commerce and e-finance. In Mexico, the number of online

bank users more than tripled from 700,000 in 2000 to 2.4 million in 2001, and it could

reach 4.5 million in 2005 (E-Marketer 2002b). One reason for the success of Latin

American banks’ online ventures seems to be the attention they have paid to

providing retail customers with multiple ways to access their accounts (Internet,

telephone, wireless). However, given that the share of the total population that

actually has a bank account is relatively small, the expansion of Latin American

online banking may be facing a bottleneck.

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. The Internet is a

global phenomenon and so is e-finance. Its deployment is not limited to developed

countries, and indeed some developing countries – such as India and the Republic of

Korea – are experiencing particularly strong growth in E-Banking. In Asia one of the

most impressive records has been achieved by the Republic of Korea. The Republic of

Korea is 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.

[21]

In Bangladesh there is a large gap between the computerization of foreign banks and

that of local commercial banks and as regards the state of their intra- and inter-branch

online networks. However, 75 per cent of local banks are planning to introduce E-

Banking, which implies very dynamic improvements.

Apart from North and South Africa the Sub Saharan Africa is the region that is

seriously lagging behind in Internet banking, although it is giving to the rest of the

world the good example of microfinance developments.

[22]

CHAPTER – 1.2

INTRODUCTION TO

HDFC & ICICI

[23]

1.2.1 HDFC COMPANY PROFILE

INTRODUCTION

HDFC Bank (NYSE: HDB), one amongst the firsts of the new generation, tech-savvy

commercial banks of India, was incorporated in August 1994, after the Reserve Bank

of India allowed setting up of Banks in the private sector. The Bank was promoted by

the Housing Development Finance Corporation Limited, a premier housing finance

company (set up in 1977) of India.

HISTORY

The Housing Development Finance Corporation Limited (HDFC) was amongst the

first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set

up a bank in the private sector, as part of the RBI's liberalization of the Indian

Banking Industry in 1994. The bank was incorporated in August 1994 in the name of

'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank

commenced operations as a Scheduled Commercial Bank in January 1995.

BRANCH NETWORK

Currently HDFC Bank has 1416 branches, 3382 ATMs, in 550 cities in India, and all

branches of the bank are linked on an online real-time basis. The bank offers many

innovative products & services to individuals, corporate, trusts, governments,

partnerships, financial institutions, mutual funds, insurance companies.

It is a path breaker in the Indian banking sector. In 2007 HDFC Bank

acquired Centurion Bank of Punjab taking its total branches to more than 1,000.

Though, the official license was given to Centurion Bank of Punjab branches, to

continue working as HDFC Bank branches, on May 23, 2008.

BUSINESS FOCUS

HDFC Bank's mission is to be a World-Class Indian Bank. The Bank's aim is to build

sound customer franchises across distinct businesses so as to be the preferred provider

of banking services in the segments that the bank operates in and to achieve healthy

[24]

growth in profitability, consistent with the bank's risk appetite. The bank is committed

to maintain the highest level of ethical standards, professional integrity and regulatory

compliance. HDFC Bank's business philosophy is based on four core values:

Operational Excellence, Customer Focus, Product Leadership and People.

BUSINESS PROFILE

HDFC Bank caters to a wide range of banking services covering commercial and

investment banking on the wholesale side and transactional/branch banking on the

retail side. The bank has three key business areas:

• Wholesale Banking Services : The Bank's target market is primarily large, blue chip

manufacturing companies in the Indian corporate sector and to a lesser extent,

emerging midsized corporate. For these corporate, the Bank provides a wide range of

commercial and transactional banking services, including working capital finance,

trade services, transactional services, cash management, etc. The bank is also a

leading provider of structured solutions that combine cash' management services with

vendor and distributor finance for facilitating superior supply chain management for

its corporate customers.

• Retail Banking Services: The objective of the Retail Bank is to provide its target

market customers a full range of financial products and banking services, giving the

customer a one stop window for all his/her banking requirements. The products are

backed by world-class service and delivered to the customers through the growing

branch network, as well as through alternative delivery channels like ATMs, Phone

Banking, Net Banking and Mobile Banking. The HDFC Bank Preferred program for

high net worth individuals, the HDFC Bank Plus and the Investment Advisory

Services programs have been designed keeping in mind needs of customers who seek

distinct financial solutions, information and advice on various investment avenues.

The Bank also has a wide array of retail loan products including Auto Loans, Loans

against marketable securities, Personal Loans and Loans for Two-wheelers. It’s also a

leading provider of Depository Services to retail customers, offering customers the

facility to hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in

association with VISA (VISA Electron) and issues the MasterCard Maestro debit card

as well. The debit card allows the user to directly debit his account at the point of

[25]

purchase at a merchant establishment, in India and overseas. The Bank launched its

credit card in association with VISA in November 2001. The Bank is also one of the

leading players in the "merchant acquiring" business with over 25,000 Point-of-sale

(POS) terminals for debit / credit cards acceptance at merchant establishments. The

Bank is well positioned as a leader in various net-based B2C opportunities including

a wide range of Internet banking services for Fixed Deposits, Loans, Bill Payments.,

etc.

• Treasury Operations: Within this business, the bank has three main product areas-

Foreign Exchange and Derivatives, Local Currency Money Market & Debt

Securities, and Equities With the liberalization of the financial markets in India,

corporate need more sophisticated risk management information, advice and product

structures, These and fine pricing on various treasury products are provided through

the bank's Treasury team. To comply with statutory reserve requirements, the bank is

required to hold 25% of its deposits in government securities. The Treasury business

is responsible for managing the returns and market risk on this investment portfolio.

1.2.2 HDFC BANK SERVICES

NET BANKING: Net Banking is HDFC Bank's Internet Banking service. Providing

up-to-the-second account information, Net Banking lets you manage your account

from the comfort of your mouse - anytime, anywhere.

HDFC Bank Net Banking Secure Access

HDFC Bank has implemented a new security solution for its customers - Secure

Access .As your security is our top priority, we have initiated the Secure Access

solution to protect you from fraudsters and hackers - who are looking to find a way to

access your account.

Currently following transactions are covered under Secure Access

• Transfer from one HDFC Bank account to other HDFC Bank account holders

(under distinct customer ID)

• Transfer from HDFC Bank account to any other Bank's account (also known

as RTGS & NEFT)

• Visa Money Transfer

• Third Party Demand Draft through Net Banking

[26]

Third Party Transfer

Third-Party Transfer is a Net Banking feature for which you will need your unique

Customer ID and IPIN (password). Login to Net Banking to confirm that your ID is

active in our records.

What is TPT?

With Third-Party Transfer (TPT) you can transfer funds online from your HDFC

Bank account to another HDFC Bank/Other Bank account (beneficiary), anywhere in

India. This is a real-time transaction and the debit and credit will reflect in the

respective accounts immediately.

Third Party Transfer can be initiated:

• From your Account to other Bank Accounts using

• National electronic Funds Transfer (NEFT) - Funds will be credited to the

beneficiary account in two working days

• Real Time Gross Settlement (RTGS) - Funds will be credited to the

beneficiary account on the same working day.

• From your HDFC Bank account to other HDFC Bank accounts (different cuts

ids).

• From your account to any Visa Card (Debit or Credit) within India.

• For issuance of Third Party Demand Drafts from your account.

You can transfer up to a maximum of Rs. 10, 00,000/- per cuts id per day using this

facility. This amount can be transferred in parts or on a single basis.

INSTA IPIN FACILITY

It has been our constant endeavor to make banking a hassle-free experience for you.

At HDFC Bank, we understand that it is quite possible to forget even important things

like your Net Banking password (IPIN). But that should not be holding you back from

accessing your bank account. You can now re-generate your Net Banking password

instantly with the help of your Debit Card details and start using your new password

(IPIN) immediately. No need to request for a new password and await its arrival. And

[27]

it is even better as you select your new HDFC Bank password yourself so it becomes

much easier to remember the same.

CREDIT CARDS ONLINE

We take great pleasure in announcing that the HDFC Bank Net Banking service is

now available for Credit Cards also. Now using your HDFC Bank Credit Card has

become more convenient and time saving. You can now access your Credit Card

account from home or office or even while traveling. With Net Banking you can view

your card account information and do much more just at the click of a button.

Currently the following Credit Cards Net banking features are available:-

• Account Information

• Unbilled Transactions

• Credit Card Statement

• Download Card Statement (upto last 6 months)

ONEVIEW: One View is a revolutionary service from HDFC Bank that allows you

to manage multiple accounts in different banks through one single online interface. If

you are an HDFC Bank customer and have one or more accounts with Citibank, ICICI

Bank, HSBC India, Standard Chartered Bank then One View is just right for you.

FEATURES & BENEFITS

No need to individually log on to internet banking of every account. Just log on to

One View and manage upto FIVE accounts in different banks.

• Remember only ONE password.

• No charges whatsoever

HOW SECURE IS ONEVIEW?

One View gives you the world class banking security and technology sophistication

you'd expect of HDFC Bank, with features such as:

• Robust firewall protection makes it nearly impossible to break through.

• All information is transmitted using advanced 128 bit Secure Socket Layer (SSL)

encryption technology.

• Automatic time-outs ensure that your account details are not viewed by others.

• You can only view your accounts and cannot transact, so your money is absolutely

safe.

[28]

INSTA ALERTS: Now you can get regular updates on your bank account on your mobile

phone or email ID. Just register for our Insta Alert service and receive updates on your

account as and when the select transaction happens - all this without visiting the branch or

ATM.You can register for any or all of the following alerts:

• Debit transactions greater than Rs. 5,000/ Rs.10, 000/ Rs. 20,000/Rs. 50,000

• Credit in account greater than Rs. 5,000/ Rs.10, 000/ Rs. 20,000/Rs. 50,000

• Account Balance below Rs. 5,000/ Rs.10, 000/ Rs. 20,000/Rs. 50,000-

• Weekly account balance

• Salary Credits

• Utility bill payment due Alert

MOBILE BANKING: Your Mobile is now your bank! Now access your bank

account and conduct a host of banking transactions through your mobile, with our

unique Mobile Banking service. You can check your account level information such

as balance details, mini statement, and cheque status as well as carry out financial

transactions such as Funds Transfer using HDFC Bank Mobile Banking service.

FEATURES OF MOBILE BANKING

Using our Mobile Banking service, you can avail of a host of features at your finger

tips

• Perform funds transfers

• Get your balance details

• Obtain your last 3 transaction details

• Request a cheque book

• Stop a cheque payment

• Enquire cheque status

• Request an account statement

• Get Fixed Deposit details

• Request for I-PIN generation

• Request a cheque book

AUTOMATED TELLER MACHINE: With wide spread network of 4,000 ATMs

across India, enjoy the following benefits at your convenience.

[29]

• 24-hour access to Cash - Withdraw up to Rs.10, 000/- per day on your ATM

Card and up to Rs. 15,000 on your Debit Card.

• Personalized Cash Withdrawals – Save time on your cash withdrawal

transactions by pre-setting your preferred language / account / amount.

• View Account Balances & Mini-statements - Get details of the last 9

transactions on your account with the mini-statement, along with your account

balance.

• Change ATM PIN - Change your ATM PIN at any given point in time.

• Order a Cheque Book / Account Statement

• HDFC Bank Credit Card Payment - Make payment of your HDFC Bank

Credit Card dues using the ATM. The primary account of your Debit / ATM

card will be debited.

• Deposit Cash or Cheques - Deposit Cash or Cheques into your account

without visiting the Branch. Available at Non-Branch HDFC Bank ATMs

• Transfer Funds between accounts – Transfer money between your accounts.

Both accounts must be linked to your ATM / Debit Card. Maximum of 16

A/Cs (Savings / Current) can be linked to a card.

REFILL YOUR PREPAID MOBILE – Refill your prepaid mobile using Prepaid

Mobile Refill service instantly. HDFC Bank offers – Prepaid Mobile Refill, which

allows you to recharge your prepaid mobile phone anytime from anywhere and pay

directly from your Bank account. Avoid hassles of withdrawing cash or searching for

a retailer for buying the recharge card.

• You can avail of this service in two convenient ways:

Prepaid Mobile Refill on Internet

Prepaid Mobile Refill on ATM

Prepaid Mobile Refill on Internet

You can now recharge your Prepaid Mobile phone right here on the HDFC Bank

website.

Enjoy Convenience of:

Recharging your prepaid mobile phone from the comfort of your home or office

anytime.

[30]

Paying directly from your Bank account - avoid the hassle of withdrawing cash from

an ATM or Branch.

To avail the facility, customer has to go to the recharge page and do the following

steps:

• Select Mobile Operator Name, enter Mobile Number, Amount for Top-Up

• Confirm payment by logging into Net Banking using your Customer ID and

IPIN (Net Banking password).

• Depending on the recharge option chosen, your phone will be recharged in a

few seconds.

PHONE BANKING: Your phone is now your bank. When you dial in to Phone

Banking, a voice prompt will guide you through the various transactions. You may

also talk to a Phone Banker, who will provide you with the required assistance.

Avail of the following services via Phone Banking:

• Check your account balance - Get up-to-the-second details of your Savings

or Current Accounts and your Fixed Deposits. You can also get the details of

the last 5 transactions on your account, or have a mini statement of last 9

transactions faxed across to you.

• Enquire on the cheque status - You can use Phone Banking to check on the

status of cheques issued or deposited from anywhere in India.

• Order a Cheque Book / Account Statement - Just call Phone Banking and

get your Cheque Book or latest Account Statement delivered at your doorstep.

• Stop Payment - Stop payment of a single cheque or a series of cheques, 24

hours a day. Loan Related queries - Get details of the outstanding loan

amount, enquire about your loan account, request for an interest certificate and

repayment schedule, etc. Just call Phone Banking in your city and dial 4 to

speak to our Phone Banker

• Open a Fixed deposit or Enquire on your Fixed deposits / TDS*# - Talk to

our Phone Banker to easily open a Fixed Deposit over the phone, by simply

authorizing a transfer of funds from your Savings Account.

[31]

• Transfer Funds between accounts*# - You can also transfer money from

one of your accounts to another. Both accounts must be linked to your

Customer ID. You can transfer amounts upto Rs 1 Lac in a single day.

• Pay your bills - Pay your cellular, telephone, electricity and HDFC Bank

Credit Card bills through Phone Banking using Bill Pay, a comprehensive bill

payments solution.

• Report loss of your ATM / Debit Card / Forex Plus Card - If your ATM /

Debit / Forex plus Card are lost, call any Phone Banking number to deactivate

your card(s).

• Learn about all our other products - Get details on HDFC Bank products &

services by talking to our Phone Banker.

• Enquire about latest Interest / Exchange rates - Get latest Interest rates on

Deposits and Foreign Exchange rates by talking to our Phone Banker.

• Request a Demand Draft / Manager's Cheque #** - Call Phone Banking

and get a Demand Draft / Manager's Cheque delivered to your doorstep.

• Demat Related Queries - Get the Account holding details, Transaction

details, ISIN Number of a scrip, Status of Depository Slips, details of Client

Master list (Dividend account, Charges Debit account, PAN etc.) & others.

Call Phone Banking in your city & dial 5 to speak to our Phone Banker.

1.2.3 ICICI BANK PROFILE

INTRODUCTION

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 and affiliates in the areas of investment banking, life and

non-life insurance, venture capital and asset management. The Bank currently has

[32]

subsidiaries in the United Kingdom, Russia and Canada, branches in United States,

Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance

Centre and representative offices in United Arab Emirates, China, South Africa,

Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established

branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on

Bombay Stock Exchange and the National Stock Exchange of India Limited and its

American Depositary Receipts (ADRs) are listed on the New York Stock Exchange

(NYSE).

HISTORY

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

(US$ 77 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 and affiliates in the areas of investment banking, life and

non-life insurance, venture capital and asset management. The Bank currently has

subsidiaries in the United Kingdom, Russia and Canada, branches in United States,

Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance

Centre and representative offices in United Arab Emirates, China, South Africa,

Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established

branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on

Bombay Stock Exchange and the National Stock Exchange of India Limited and its

American Depositary Receipts (ADRs) are listed on the New York Stock Exchange

(NYSE).

1.2.4 ICICI BANK SERVICES

MOBILE BANKING: Conducting banking operations using the mobile phone has

been fast catching up around the world for its convenience. We have launched mobile

services in India to convenience our customers. You can do your banking operations

sitting anywhere, anytime. It is discreet, personalized and on your phone. Use it when

[33]

at a meeting, in a movie hall, while having your Sunday brunch or at any other place

you cannot usually expect to get the information you want from your bank. It is an

empowering and user-friendly mode of accessing your bank account. To get started,

take a look at the menu on the left and go through our various services.

You can now access the following ICICI Bank services via your mobile phone:

Bank Account

Credit Card

Demat

Loan

Other Services

Funds

Transfer*

Balance

Details

Holding

Enquiry

Provisional

Income Tax

Certificate

Locate Branch

Bill Payment+ Last Payment

Details

Transaction

Status

Final Income

Tax Certificate Locate ATM

Balance

Enquiry

Payment Due

Date Bill Enquiry Reset Letter

Phone Banking

Number

Last 5

Transactions

Reward Point

Status ISIN Enquiry

Rescheduled

Letter

Prepaid

Mobile

Recharge*

Cheque Book

Request

Loan

Agreement

Copy

Apply for

Bank Products

Stop Cheque

Request

Status of

Service

Request

Raised

Cheque Status

Enquiry

INSTA BANKING

Insta Banking makes your banking simpler, faster, and more convenient. Through

these 5 great channels - Internet Banking, Mobile Banking, ICICI Bank ATMs,

[34]

Instant Voice Response (IVR) Banking and iMobile - you can do your day today

banking anytime, anywhere.

INTERNET BANKING

ICICI Bank brings convenience and security to your desktop. Now you can check

your account balance, transfer funds, download your account statement, and pay bills

or even book tickets online, from the comfort of your home or in the middle of a busy

day at the office. Explore the power of simpler and smarter Banking whether you are

a Banking, Credit Card, Loan or Demat customer.

ATM BANKING

Bank 24/7 through a widespread network of ICICI Bank ATMs making life easy and

convenient for you. User-friendly graphic screens and easy to follow instructions

available in a choice of local languages, makes ATM Banking with ICICI Bank a

smoother experience. ICICI Bank's widespread network of ATMs makes it easy and

convenient for you to bank 24/7. With over 4,883 + ATMs and 1,626 + branches set

up within India, we ensure that you are never too far from an ICICI Bank ATM. User-

friendly graphic screens and easy to follow instructions in a choice of local languages,

makes ATM Banking with ICICI Bank a smooth experience.

ICICIBank.com also features the easy to access ATM Locator, making it easy for you

to find an ICICI Bank ATM in your neighbourhood.

The ICICI Bank edge

• Cash withdrawal up to Rs. 25,000/- per day from your account (50,000 for

HNI's). Fast Cash option facilitates withdrawal of prefixed amounts; Ultra Fast

Cash allows withdrawal of Rs. 3000/- in one shot

• Check your ledger balance and available balance

• Print out your Mini Statement which displays your last 8 transactions and the

current balance

• Deposit Cash / Cheques at all full function ATMs; cash deposited in ATMs

will be credited to the account on the same day if deposited before the clearing

and cheques are sent for clearing on the next working day

• Transfer funds from one account to another linked account in the same branch.

[35]

• Change the Personal Identification Number (PIN) of your ATM or Debit card

• Pay bills, make donations to temples / trusts, buy internet packs, airtime

recharges for prepaid mobile phones, etc.

• Request for a cheque book from our ATMs; concerned branch dispatches it to

reach you within 10 working days

• No charge is levied on ICICI Bank customers for transacting through ICICI

Bank's ATMs. But, if the minimum quarterly average balance is not

maintained in your savings account, first 6 transactions in the quarter are free

and thereafter, Rs. 25 per transaction is charged.

I MOBILE

ICICI Bank's iMobile is a breakthrough innovation in banking that allows you to

transfer funds, make your credit card payments, pay utility bills, check your balance

and do lots more, for free. So why wait anymore. Just download the iMobile

application on your phone by sending us an SMS and experience iMobile. . ICICI

Bank brings to you the 2nd generation iMobile that has newer features, smarter

interface, quicker navigation and enhanced functionality. ICICI Bank's iMobile is

your answer to banking on the move. The next generation iMobile is your key to a

faster, easier and simplified banking service. Using GPRS enabled on your mobile

handset or through SMS, iMobile helps you to connect directly to your bank account.

This Rich Client Based Application needs to be installed on your mobile thereby

enabling a single click access to your account.

Services available with i Mobile:

• Payment of utility bills and credit card bills

• Transfer of funds to any bank account

• Payment of insurance premium

• Placement of service request such us ordering of cheque books, bank account

statements, cheque status and balance enquiry

Access the following ICICI Bank services via iMobile:

[36]

Bank Account

Funds transfer

• Bill Payment

• Balance Enquiry

• Last 5 transactions

• Cheque Book Request

• Stop Cheque request

• Cheque status Enquiry

Credit Card

• Balance Details

• Last Payment Details

• Payment Due Date

• Reward Point Status

Demat A/c

• Holding Enquiry

• Transaction Status

• Bill Enquiry

• ISIN Enquiry

Loan A/c

• Provisional IT Certificate

• Final IT Certificate

• Reset Letter

• Rescheduled Letter

• Loan Agreement Copy

M Shop

• Prepaid Mobile Recharge

Other Services

• Status of Service Request Raised

• Locate US

[37]

IVR BANKING

Find answers to all your banking needs from your phone. ICICI Bank's Instant Voice

Response (IVR) Banking is free of charge, fully automated and at the same time user-

friendly. Just having an ATM PIN for your account and credit card ensures that your

transactions are secure.

• Saving A/C

• Credit cards

• Demat

• Bonds

• Others

TV BANKING

At ICICI Bank, we've introduced India to an all new way of banking. TV Banking.

This pioneering initiative now enables you to get information regarding loans,

accounts, deposits and a lot more while you're watching that exciting cricket match or

your favorite sitcom.

[38]

CHAPTER – 2

REVIEW OF LITERATURE

[39]

2.1.1 REVIEW OF LITERATURE

Malhotra, Pooja & Singh, B. (2010) This study is an attempt to present the present

status of Internet banking in India and the extent of Internet banking services offered

by Internet banks. In addition, it seeks to examine the factors affecting the extent of

Internet banking services. The data for this study are based on a survey of bank

websites explored during July 2008. The sample consists of 82 banks operating in

India at 31 March 2007. Multiple regression technique is employed to explore the

determinants of the extent of Internet banking services. The results show that the

private and foreign Internet banks have performed well in offering a wider range and

more advanced services of Internet banking in comparison with public sector banks.

Among the determinants affecting the extent of Internet banking services, size of the

bank, experience of the bank in offering Internet banking, financing pattern and

ownership of the bank are found to be significant. The primary limitation of the study

is the scope and size of its sample as well as other variables (e.g. market,

environmental, regulatory etc) which may have an effect on the decision of the banks

to offer a wide range of Internet banking services. The purpose of the study is to help

fill significant gaps in knowledge about the Internet banking landscape in India. The

findings are expected to be of great use to the government, regulators, commercial

banks, and other financial institutions, e.g. co-operative banks planning to offer

Internet banking, bank customers and researchers. The bankers as well as society at

large will come to know where the banks lag in terms of adoption of Internet banking

and in providing different products and services. An understanding of the factors

affecting the extent of Internet banking services is essential both for economists

studying the determinants of growth and for the creators and producers of such

technologies. Moreover, this paper contributes to the empirical literature on diffusion

of financial innovations, particularly Internet banking, in a developing country, i.e.

India.

Polaris Software Lab (2010) In this study Polaris Software Lab Limited (POLS.BO),

a leading Financial Technology Company, launched Intellect(TM) PRIVACY based

on state-of-the-art technology and four patents filed by the Indian Institute of

Technology Madras. IndusInd Bank has become the first bank in India to implement

Intellect(TM) PRIVACY, an online and internet banking security card, for its internet

[40]

banking customers. The technology will protect customers and banks from practically

all kinds of phishing attacks, viz. deceptive e-mail, key/screen logger, brute

force/dictionary attacks and Trojans, etc.Intellect PRIVACY uses multi factor,

dynamic authentication technology providing for authorizing online banking

transactions, in a completely secure platform. Commenting on the innovation,

Professor L S Ganesh, Coordinator of the programmer, said, "At IIT Madras, the

Department of Computer Science and Engineering and the Department of

Management Studies got particularly interested in designing an internet security

technology that is cost efficient and easy to use in a rapidly growing e-commerce

scenario, and transferring it commercially. We chose the Cost-Usability-Security

(CUS) approach to arrive at a solution and Polaris Software created an eminently

usable application for the banking industry. IndusInd Bank, which was looking for

providing greater security for web based transactions, became the first organization to

adopt it." Intellect PRIVACY is a simple plastic card that customers can use to

generate a one-time password (OTP) for carrying out any kind of online banking

transaction including the sign on. Banks can issue booklets containing a desired

number of cards that would last many transactions. The card has no pilferage value by

itself and customers can easily manage its life cycle, including making a request for a

new booklet and reporting loss of cards through online banking.

Azouzi, D. (2009) this paper aims to check if the current and prompt technological

revolution altering the whole world has crucial impacts on the Tunisian banking

sector. Particularly, this study seeks some clues on which we can rely in order to

understand the customers' behavior regarding the adoption of electronic banking. To

achieve this purpose, an empirical research is carried out in Tunisia and it reveals that

panoply of factors is affecting the customers-attitude toward e-banking. For instance;

age, gender and educational qualifications seem to be important and they split up the

group into electronic banking adopters and traditional banking defenders and so, they

have significant influence on the customers' adoption of e-banking. Furthermore, this

study shows that despite the presidential incentives and in spite of being fully aware

of the e-banking's benefits, numerous respondents are still using the conventional

banking. It is worthy to mention that the fear of loss because of transactions errors or

hackers plays a significant role in alienating Tunisian customers from online banking.

[41]

B. Dizon, J.A. (2009) In this study they have founded that while big banks still

conduct the bulk of their business in brick and mortar bank branches, the finance

sector has been increasingly investing on e-banking facilities to offer 24-hour, queue-

free services to their regular clients, whether through ATM machines, mobile phones

or the Internet. "E- Banking's appeal is primarily its convenience. Clients nowadays

want instant results; they don't want to wait anymore," said Francisco M. Caparros,

Jr., senior vice-president of Asia United Bank and president of Banc Net. It's also

turned out to be a more efficient way to process transactions, as e-banking does away

with most of the paperwork that clients have to accomplish. "A lot of people don't like

filling forms," Mr. Caparros added. "Online banking, in particular, relies on user

names and passwords which need to be protected," said Ferdinand G. La Chica, first

vice- president and marketing group head for Sterling Bank of Asia. These anti- theft

barriers are at times supplemented by transaction passwords and "tokens", often a

keychain-like device that is issued to the client and generates random, one-time

passwords to enable him to log into his account online. Last year, the Rural Bank

Association of the Philippines announced that its members are looking to appoint

local merchants like sari-sari stores as third party agents where consumers can open

new accounts and make large payments. Such informal outlets will enable banks to

reach out to small-income businesses and individuals, particularly those in the

agrarian sector, most of who are based outside the city center.

Uppal, R.K. & Chawla, R. (2009) this study highlights customer perceptions

regarding e-banking services. A survey of 1,200 respondents was conducted in

October 2008 in Ludhiana district, Punjab. The respondents were equally divided

among three bank groups namely, public sector, private sector and foreign banks. The

present study investigates the perceptions of the bank customers regarding necessity

of e-banking services, quality of e-banking services, bank frauds, future of e-banking,

preference of bank customers regarding banks, comparative study of banking services

in various bank groups, preferences regarding use of e-channels and problems faced

by e-bank customers. The major finding of this study is that customers of all bank

groups are interested in e-banking services, but at the same time are facing problems

like, inadequate knowledge, poor network, lack of infrastructure, unsuitable location,

misuse of ATM cards and difficulty to open an account. Keeping in mind these

problems faced by bank customers, this paper frames some strategies like customer

[42]

education, seminars/meetings, proper network and infrastructure facilities, online

shopping facilities, proper working and installation of ATM machines, etc., to

enhance e-banking services. Majority of professionals and business class customers as

well as highly educated and less educated customers also feel that e-banking has

improved the quality of customer services in banks.

Reeti, Sanjay, and Malhotra, A. (2009), stated about the Customers’ perspectives

regarding e-banking in an emerging economy. So that, the author determining various

factors affecting customer perception and attitude towards and satisfaction with e-

banking is an essential part of a bank's strategy formulation process in an emerging

economy like India. To gain this understanding in respect of Indian customers, the

study was conducted on respondents taken from the northern part of India. The major

findings depict that customers are influenced in their usage of e-banking services by

the kind of account they hold, their age and profession, attach highest degree of

usefulness to balance enquiry service among e-banking services, consider security &

trust most important in affecting their satisfaction level and find slow transaction

speed the most frequently faced problem while using e-banking.

Hsun, K.S. (2008), this study considers the coherence of the financial service sector

and adopts different observational variables to identify innovation capital (training

and R&D density) and process capital (IT system sufficiency). The results show that

human capital has a direct impact on both innovation capital and process capital,

which in turn affect customer capital; while finally, customer capital affects business

performance. In addition, there is a negative relationship between process capital and

customer capital in the financial service sector. It suggests that in the financial service

sector, customer satisfaction relies on a sufficient degree of training and R&D density.

Intemperate investment on the support of e-banking operation systems may not be a

good answer.

Laukkanen, P., Sinkkonen, S. & Laukkanen, T. (2008) The purpose of this paper is

to further the understanding of innovation resistance by dividing internet banking

non-adopters into three groups based on their intentions to use the innovation.

Thereafter, the aim is to identify how the resistance differs in these customer groups.

This study identifies three groups of internet banking non-adopters, namely

[43]

postponers, opponents and rejectors. The data were collected by conducting an

extensive postal survey among the retail banking customers in Finland who had not

adopted internet banking. The measurement development was based on consumer

resistance theory and the earlier literature on internet banking. Principal component

analysis was used to classify the resistance items into five adoption barriers derived

from the earlier literature. Thereafter, analysis of variance was used to analyze the

statistical differences in resistance to internet banking between the three groups.

Significant differences were identified between the groups explored. The resistance of

the rejectors is much more intense and diverse than that of the opponents, while the

postponers show only slight resistance. The results also indicate that psychological

barriers are even higher determinants of resistance than usage and value, which are

constructs related to ease-of-use and usefulness determining acceptance in the

traditional technology acceptance model. Moreover, the findings highlight the role of

self-efficacy in bank customers' risk perceptions to internet banking. This study

provides further understanding of what inhibits internet banking adoption by

comparing three non-adopter groups with respect to their resistance to internet

banking. It also has implications for management in overcoming non-adopters'

resistance to the innovation.

Routray (2008), the study describes that Mobile and Wireless communication devices

are becoming enablers for organizations to conduct business more effectively and

efficiently. One of the most effective applications is mobile banking (m-banking). For

any application to gain recognition technological advancements play a vital role. To

make m-banking application a success bandwidth management is an important issue.

The increased flexibility and mobility feature of wireless ATM and its bandwidth on

demand function is motivating a large number of carriers towards deployment of the

WATM networks. But there are certain issues which are required to be addressed in

WATM. The issues are cost effective planning of network, location management and

handover management. In this paper we have suggested and evaluated a technological

framework for the m-banking application using wireless ATM which optimizes the

bandwidth usage and provides an effective handover management. Simulation results

show that the resultant framework is very effective in handling the bandwidth and the

handover issue in wireless ATM and provides an effective WATM framework model.

[44]

Malhotra, P. & Singh, B. (2007) stated about this research tells us that the larger

banks, banks with younger age, private ownership, higher expenses for fixed assets,

higher deposits and lower branch intensity evidence a higher probability of adoption

of this new technology. Banks with lower market share also see the Internet banking

technology as a means to increase the market share by attracting more and more

customers through this new channel of delivery. Further, the adoption of Internet

banking by other banks increases the probability that a decision to adopt will be made.

An understanding of the factors affecting this choice is essential both for economists

studying the determinants of growth and for the creators and producers of such

technologies. From this perspective, understanding the factors determining the

adoption of technology becomes highly relevant from the policy point of view.

Moreover, the studies on the adoption of financial innovations are related to

developed markets, e.g. US or European banking markets. Hence, this paper

contributes to the empirical literature on diffusion of financial innovations,

particularly Internet banking, in a developing country.

Shah & Braganza (2007), this survey indicates the Critical Success Factors in e-

banking and the author suggest in this article that the organizational factors, which are

critical to the success of e-banking, are investigated. Different pieces of literature

report different factors as key to success and generally based on subjective, perceptual

data. A synthesis of existing literature is a basis for survey questions. The data was

collected from UK based financial sector organizations who are offering their services

on electronic channels, using postal questionnaires. The top factors found to be most

critical for the success in e-banking are: quick responsive products/services,

organizational flexibility, services expansion, systems integration and enhanced

customer service. An important lesson from this research is that organizations need to

view the e-banking initiative as a business critical area rather than just a technical

issue. They need to give attention to internal integration, which may include channels,

technology and business process integration, and improving the overall services to

their customers.

Awamleh (2006) This study analyses the internet banking channels and service

preferences of educated banking consumers in the UAE and examines the factors

influencing the intention to adopt or to continue the use of internet banking among

[45]

both users and non users of internet banking. It is shown that although the banking

sector in the UAE is a regional leader, internet banking in the UAE is yet to be

properly utilized as a real added value tool to improve customer relationship and to

attain cost advantages. The Technology Acceptance Model (TAM) was used to

identify factors influencing the intention to adopt and continued use of internet

banking customers. Data was collected from internet banking users and potential users

in the United Arab Emirates and factor analyses and multiple regression analyses

were conducted to examine the data. Relative usefulness is introduced as one of the

factors and is defined as the degree to which a new technology is better than existing

ones. There is a significant difference between users and non-users on six of the seven

factors identified. Further, it was revealed that relative usefulness, perceived risk,

computer efficacy and image had a significant impact on continued usage of internet

banking for IB Users, while relative usefulness and result demonstrability were the

only ones significant for Non-users of internet banking. The effects of age, gender,

income, and e-commerce users also explored. Result demonstrability is significant for

all categories of non-users except for those with income below AED 7,000.

Implications of results were discussed, and future research directions outlined.

Bauer, Malik & Falk (2006), this article reviews the measuring the quality of E-

Banking portals. In the internet economy, the business model of web portals has

spread rapidly over the last few years. Despite this, there have been very few

scholarly investigations into the services and characteristics that transform a web site

into a portal as well as into the dimensions that determine the customer’s evaluation

of the portal’s service quality. Based on an empirical study in the field of e-banking

the authors validate a measurement model for the construct of web portal quality

based on the following dimensions: security and trust, basic services quality, cross-

buying services quality, added value, transaction support and responsiveness.

Findings – The identified dimensions can reasonably be classified into three service

categories: core services, additional services, and problem-solving services.

Originality/value – The knowledge of these dimensions as major determinants of

consumer’s quality perception in the internet provides banks a promising starting

point for establishing an effective quality management for their e-businesses.

[46]

Kamiya (2006) this articles show that Indian banks are trying to make your life

easier. Not just bill payment, you can make investments, shop or buy tickets and plan

a holiday at your fingertips. In fact, sources from ICICI Bank tell us, "Our Internet

banking base has been growing at an exponential pace over the last few years.

Currently around 78 per cent of the bank's customer base is registered for Internet

banking." To get started, all you need is a computer with a modem or other dial-up

device, a checking account with a bank that offers online service and the patience to

complete about a one-page application--which can usually be done online. You can

avail the following services: Bill payment Services, Fund Transfer, Credit Card,

Internet shopping, and Investment though Internet etc. Due to the Internet banking the

life of an individual becomes easy and raises the standard of life of the humans.

Maumbe (2006) This study depicts that most banks throughout the world, ICT have

become the back bone of financial service delivery and finance networks have shifted

from paper-based to the digital mode. However, digital financial service delivery

confronts a number of challenges regarding its efficacy in closing the “financial

divide” affecting the poor. Although e-banking is considered an inexpensive way to

reach clients, its accessibility is hindered by a number of factors including poor

Internet penetration, lack of e-banking awareness and customer inflexibility to new

technology. In developing countries most of which are characterized by extreme

poverty and poor infrastructure, universal Internet-based service provision remains

indefinable. Further, the author argues that developing nations need to improve

educational standards and computer literacy prior to broad-based adoption and

constructive use of Internet services. As result, the poor and unemployed remain

disadvantaged in terms of access to rural Internet based services. Real access to “well-

functioning” and “efficient financial services” has the potential to empower poor

communities.

Veneeva (2006) this article describes that world is changing at a staggering rate and

technology is considered to be the key driver for these changes around us. Many

activities are handled electronically due the acceptance of information technology at

home as well as at workplace. Internet can be seen as a truly global phenomenon that

has made time and distance irrelevant to many transactions. The evolution of

electronic banking started from the use of automatic teller machines (ATM) and has

[47]

passed through telephone banking, direct bill payment, electronic fund transfer and

the revolutionary online banking (Alter, 2002). The future of electronic banking

according to some is the acceptance of WAP enabled banking and interactive-TV

banking (Petrus & Nelson, 2006). But it has been forecasted that among all the

categories, online banking is the future of electronic financial transaction. The rise in

the e-commerce and the use of internet in its facilitation along with the enhanced

online security of transactions and sensitive information has been the core reasons for

the penetration of online banking in everyday life.

Anthony (2004), this article discusses the importance of usability within the E-

Banking sector and identifies common usability problems and ways to resolve them.

It is widely recognised that online banking provides more revenue per customer and

costs less per transaction than any other channel, including phone banking.

Encouraging news from Forrester Research states that by 2007 the number of

Europeans banking online will double to 130 million. Based on the principles of

Human Computer Interaction (HCI), web usability has become a recognised success

factor for all e-business, including online banking. Users most enjoy those sites that

provide clear information, easy navigation and an engaging customer experience. Yet

people will naturally gravitate to the ones which are easiest to use and offer the best

service. Banks aiming to profit the most from the increase in online banking volumes

should consider the usability and accessibility of all aspects of their site to welcome

them.

Asghar (2004), the study depicts that online banking and the web channel are here to

stay. Financial services rely on multiple distribution channels and e-banking

represents the channel of the future. Success stories around e-banking have taken

shape through a mix of innovation and experience. The financial services sector needs

to apply both these factors to their advantage to produce the desired results. Win-win

implementation of e-banking not only requires high Internet penetration rates and

stable infrastructures, but more importantly, for companies to realize the powerful

revenue opportunity of this business arm vis-à-vis the traditional brick and mortar

system of operation. Therefore, it is imperative that all e-banking implementations are

seamlessly integrated with the core 'traditional' services thereby making the online

experience truly holistic for the customer.

[48]

Picado, Gonzalez & Eckelman (2004), this study investigated the customer

satisfaction using QFD and a research on service quality and customer satisfaction has

become significant in the service industries. This study develops a case study that

considers both external and internal service management issues and subsequent

service innovations based on the framework of quality function deployment (QFD).

The application of the customer window quadrant (CWQ) and the action plan matrix

in the analysis of customer and service elements constitute a different approach for

QFD. Some benefits and disadvantages of the QFD process are discussed as

compared to extant service quality and customer paradigms. Finally, suggestions and

directions are offered for future applications, with particular interest in the e-bank

service management issues.

Nitsure, R.R. (2003), this article indicates the E-banking Challenges and

opportunities lies in the banking industry. E-banking has the potential to transform the

banking business as it significantly lowers transaction and delivery costs. This paper

discusses some of the problems developing countries, which have a low penetration of

information and telecommunication technology, face in realizing the advantages of e-

banking initiatives. Major concerns such as the 'digital divide' between the rich and

poor, the different operational environments for public and private sector banks,

problems of security and authentication, management and regulation, and inadequate

financing of small and medium scale enterprises (SMEs) are highlighted.

[49]

CHAPTER – 3

NEED, OBJECTIVE, SCOPE &

METHODOLOGY

[50]

3.1.1 NEED OF THE STUDY

• To determining growth direction of online banking service.

• Promoting E-banking services in banking industry.

• Customer perception will be taken into consideration about the internet

banking.

3.1.2 OBJECTIVES

• To study about the factors that affects the customer perception towards e-

banking of HDFC and ICICI bank.

• To know about the current and future prospects of E-Banking to the

customers.

• To find out the major problems faced by the customers while using e-banking

services.

3.1.3 HYPOTHESIS

EASE OF USE

Ho: Ease of use does not influence the use of E Banking services.

H1: Ease of use does influence the use of E Banking services.

DIRECT ACCESS

Ho: Direct Access does not influence the use of E Banking services.

H1: Direct Access does influence the use of E Banking services.

FRIENDS/RELATIVES

Ho: Friends/Relatives do not influence the use of E Banking services.

H1: Friends/Relatives do influence the use of E Banking services.

[51]

3.1.4 SCOPE OF THE STUDY

• Area is restricted to only JALANDHAR because due to the time constraint

and not able to visit all the branches in other cities or states.

• All the classes of the customers were taken into consideration.

• This study was covered E-Banking service sector.

• This is a realistic source directly collected from the customers of Bank.

3.1.5 RESEARCH METHODOLOGY

Research is defined as human activity based on intellectual application in the

investigation of matter. The primary purpose for applied research is discovering,

interpreting, and the development of methods and systems for the advancement of

human knowledge on a wide variety of scientific matters of our world and the

universe.

The term research is also used to describe an entire collection of information about a

particular subject.

Methodology is the method followed while conducting the study on a particular

project. Through this methodology a systematic study is conducted on the basis of

which the basis of a report is produced.

It is a written game plan for conducting Research. Research methodology has many

dimensions. It includes not only the research methods but also considers the logic

behind the methods used in the context of the study and explains why only a

particular method or technique has been used. It also helps to understand the

assumptions underlying various techniques and by which they can decide that certain

techniques will be applicable to certain problems and other will not. Therefore in

order to solve a research problem, it is necessary to design a research methodology for

the problem as the some may differ from problem to problem. The methodology

adopted for studying the objectives was surveying the in-house customers of these

two banks in the city of Jalandhar.

[52]

NATURE

The methodology adopted to achieve the project objective involved descriptive

research method. The information required for fulfilling the objective of study was

collected from various primary and secondary sources.

TYPE OF RESEARCH

This study is DESCRIPTIVE in nature. It helps in breaking vague problem into

smaller and precise problem and emphasizes on discovering of new ideas and

insights.

RESEARCH DESIGN

Research design constitutes the blue print for the collection, measurement and

analysis of data. The present study seeks to identify the extent of preferences of E-

Banking over traditional banking among service class. The research design is

descriptive in nature. The research has been conducted on customers of HDFC and

ICICI Bank within JALANDHAR. For the selection of the sample, convenient

sampling method was adopted and an attempt has been made to include all the age

groups and gender of every class.

RESEARCH INSTRUMENT

The instrument used for gathering data was questionnaire. To get further insight in to

the research problem, interview regarding their buying practices too was made. This

was done to crosscheck the authenticity of the data provided. To supplement the

primary data and to facilitate the process of drawing inference, secondary data was

collected from published sources like magazines, journals, newspapers etc.

DATA COLLECTION

Keeping in view the nature of requirements of the study to collect all the relevant

information regarding the extent of awareness of the customers using E-banking

[53]

facilities offered by ICICI and HDFC bank, direct personal interview method with

structured questionnaire was adopted for the collection of primary data. Secondary

data has been collected through the various internet sites by surfing on Internet and

from the records available with the bank.

Sources of data: Following are the methods of sources of data:

SECONDARY DATA:

• Articles on E-Banking taken from journals, magazines published from time to

time.

• Through internet.

PRIMARY DATA:

Questionnaire was used to collect primary data from respondents. The questionnaire

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

banking preferences among service class such as level of usage, factors influencing

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

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

The questions included in the questionnaire were open-ended, dichotomous and

offering multiple choices.

SAMPLE DESIGN AND SIZE

In this research project Descriptive research design is used. Judgement and

Convenience sampling method will be used to get the information about online

banking. This method is used because we are interested in exploring gender, age, or

occupation disparities in terms of online banking in the population. For conducting

this research, a structured questionnaire is prepared and sample of 150 customers is

taken from ICICI and HDFC bank.

SAMPLING SIZE

It indicates the numbers of people to be surveyed. Though large samples give more

reliable results than small samples but due to constraint of time and money, the

[54]

sample size was restricted to 150 respondents. The respondents belong to different

income group and profession.

SAMPLING UNIT

It defines the target population that will be sampled i.e. it answers who is to be

surveyed. In this study, the sampling unit is the people of ICICI and HDFC,

Jalandhar, Punjab.

TOOLS AND TECHNIQUES OF ANALYSIS:

The data so collected will be analyzed through the application of statistical

techniques, such as bar graphs and pie charts.

Data formulation: SPSS

Data Analysis tools: CHI SQUARE TEST

[55]

CHAPTER – 4

DATA ANALYSIS & INTERPETATION

• E-BANKING WITH RESPECT TO CUSTOMER PROSPECTIVE

• INTERPRETATION OF CHI SQUARE

TEST

[56]

• GENDER

male

76%

female

24%

gender

Interpretation: The result shows that majority of respondents i.e. 76% are males who

are using the E-banking services and 24% are the female who are using E-banking

services. Female are not using this service because they have less knowledge about

the internet and they trust face to face interaction more. So it shows that E-banking is

more famous among male.

GENDER TOTAL

Male 114

Female 36

Total 150

[57]

• AGE

AGE TOTAL NO.

Below 20 34

21-30 40

31-40

32

41-50 27

Above 50 17

Total 150

Below 20

23%

21-30

27%31-40

21%

41-50

18%

Above 50

11%

Age

Interpretation: The result shows that majority of respondents i.e. 27% falls under the

category of 21-30 years and 23% falls under below 20years it shows that E-banking is

mainly famous among youngsters as they are the major users of E-banking and least

comes under above 50years.

[58]

• OCCUPATION

OCCUPATION TOTAL NO.

Government 37

Private 40

Business 48

Others 25

TOTAL 150

government

24%

private

27%

business

32%

other

17%

occupation

Interpretation: The result shows that majority of respondents that are using E-

banking are Businessman i.e. 32% they are using E-banking services because it results

in time saving. And 27% respondents are working in private sector and 24%

respondents are working in government organizations and 17% are others which

include students and housewives they are using E-banking because it saves time and

students they have complete knowledge of internet.

[59]

• INCOME

INCOME TOTAL NO.

Below 10,000 23

10,000-25,000 48

25,000-50,000 45

More than 50,000 34

TOTAL 150

below 10,000

15%

10,000-25,000

32%25,000-50,000

30%

more than 50,000

23%

income

Interpretation: The result of this study shows that 32% of the respondents who are

using E-banking fall under the income category of 10,000-25,000 and 30% falls under

the income category of 25,000 to 50,000 and 23% % falls under the income category

of more than 50,000 and 15% % falls under the income category of below 10,000.

[60]

Q1) IN WHICH BANK DO YOU YOU’RE YOUR ACCOUNT?

Interpretation: According to this study majority of respondents i.e. 58% have their

accounts in both the banks HDFC and ICICI bank and 16% respondents have their

account in ICICI Bank and 26% have their account in HDFC bank so it means a large

no. of respondents have experience of both the banks.

Q2: WHILE OPENING UP THE ACCOUNT, WERE YOU AWARE OF E-

BANKING SERVICES PROVIDED BY YOUR BANK?

Options No. of Respondents

Yes 109

No 41

Options No. of Respondents

ICICI 24

HDFC 39

BOTH 87

[61]

Interpretation: According to this survey majority of respondents i.e.73% were

aware about E-banking services provided by their bank and 27% of respondents were

not aware about the E-banking services provided by their bank at the time of opening

up of their account because of lack of awareness and some are using banking services

from last so many years at that time bank was not offering E-banking service so they

were not aware at that time but now they are aware.

Q3) IF ANSWER TO QUESTION NO.2 IS YES, WHICH OF THE FOLLOWING

E-BANKING SERVICES IS YOU AWARE OF?

Options No. of Respondents

Internet Banking 49

Mobile Banking 97

Phone Banking 67

One Line Banking 12

Debit Card 102

Others 21

[62]

Interpretation: According to this study almost every customer is using more one E-

banking service and Debit Card is used by almost 95% of respondents and mobile

banking is used but 89% of respondents and 61% respondents are using phone

banking and only 1% are using one line banking this shows the trend that how

customers are using E-banking and among all the E-banking products debit cards are

mostly used by respondents because they are easy to use and do not require technical

or computer knowledge.

Q4) ARE YOU AVAILING E-BANKING SERVICES?

Options No. of Respondents

Yes 96

No 13

[63]

Interpretation: The results show that 88% respondents who are aware of E-banking

they are availing E-banking services and 12% are not availing E-banking services yet

they are aware of E-banking the reason is that they still have faith in traditional

banking.

Q5) HOW CONVENIENT YOU FIND ACCESSING YOUR BANK ONLINE?

Options No. of Respondents

Easy 34

Normal 53

Difficult 22

Interpretation: The results shows that 49% respondents found it normal when they

access their bank online and 31% respondents found it easy in accessing their bank

online and 20% respondents found it difficult to access their bank online because of

lack of internet knowledge and connectivity.

[64]

Q6) IF ANSWER TO QUESTION NO.4 IS YES, HOW FREQUENTLY DO

YOU USE EACH OF THE FOLLOWING SERVICES?

Factors Once in

a day

Once in

a week

Once in

a

fortnight

Once in

a month

Infrequen

tly

A Internet Banking 55 26 11 10 7

B Mobile Banking 45 31 15 10 8

C Phone Banking 44 31 22 9 3

D One Line Banking 31 23 21 16 18

E Debit Card 51 42 9 4 3

55

26

11 107

0

10

20

30

40

50

60

A

once in a day once in a week once in a fortnight once in a month infrequently

Interpretation: The results shows majority of the respondents use internet banking,

as. 55 respondents are like to use internet banking because according to them it’s easy

to use and easily accessible. They can use this any time anywhere. So it’s good for

them to use this facility of E- banking they are satisfied with this facility of E-

banking.

[65]

45

31

15

108

0

10

20

30

40

50

B

once in a day once in a week once in a fortnight

once in a month infrequently

Interpretation: The results shows majority of the respondents use mobile banking,

as. 45 respondents are like to use mobile banking because according to them it’s easy

to use and easily accessible. They can use this any time anywhere. So it’s good for

them to use this facility of E- banking they are satisfied with this facility of E-

banking. They also have the same reasons because its saves their time period but the

usage of mobile banking is less as compare to internet banking. Because in the time of

technology the most respondents are like to use the facility of internet instead of using

any other.

[66]

Interpretation: The results shows majority of the respondents use phone banking, as.

44 respondents are like to use phone banking because according to them it’s easy to

use and easily accessible. They can use this any time anywhere. So it’s good for them

to use this facility of E- banking they are satisfied with this facility of E-banking. As

phone banking is also used by less people as compare to other respondents who are

using internet banking as phone banking is also same as mobile banking so the

respondents are mainly used this as mobile banking.

31

2321

1618

0

5

10

15

20

25

30

35

D

once in a day once in a week once in a fortnight once in a month infrequently

Interpretation: The results shows majority of the respondents use one line banking,

as. 31 respondents are like to use one line banking but one line banking is used by

very less respondents because they are not fully aware about this facility provided by

banks so the main focus is on internet banking, mobile banking, phone banking etc.

So they don’t have any knowledge about the one line banking.

[67]

51

42

9

4 3

0

10

20

30

40

50

60

E

once in a day once in a week once in a fortnight once in a month infrequently

Interpretation: The results shows majority of the respondents use debit card, as. 51

respondents are like to use debit card because according to them it’s easy to use and

easily accessible. They can use this any time anywhere. Most of the respondents are

used this facility after the internet banking because it’s the main facility which is used

by the customers and they really like this facility.

Q7) TICK THE FEATURE WHICH YOU LIKE WHILE CONSIDERING

HDFC AND ICICI BANK?

Features HDFC ICICI

A Net Banking 12 8

B Credit Card Online 9 8

C One view 3 1

D Insta Alerts 5 2

E Mobile Banking 10 10

F ATM 10 9

G Phone banking 4 5

H I Mobile 1 3

I TV Banking 1 1

J IVR Banking 3 2

K I-Zone 1 1

[68]

12

8

Net Banking

HDFC

ICICI

Interpretation: As per the survey, 12 respondents liked the Net Banking services

provided by HDFC bank, whereas in case of ICICI bank 8 respondents liked it. So, we

can say that HDFC bank provides better Net Banking services as compared to ICICI

bank.

9

8

Credit Card Online

HDFC

ICICI

Interpretation: According to the survey conducted there are total 17 persons who use

E-Banking because of the Credit Card online feature. And out of total respondents, 9

rated HDFC’s Credit Card online service best and 8 rated ICICI’s best.

[69]

3

1

ONE VIEW

HDFC

ICICI

Interpretation: Out of total 4 respondents who liked One-View feature of E-banking

the most, 3 liked HDFC and only 1 liked the One-View feature provided by ICICI

bank.

Interpretation: As per the survey conducted, 5 respondents said that they like the

INSTA ALERTS provided by HDFC bank, whereas only 2 think that ICICI provide

better INSTA ALERTS.

[70]

1010

MOBILE BANKING

HDFC

ICICI

Interpretation: Mobile banking is one of the vital features of E-Banking. As per the

survey, 20 respondents rated this feature for which they use E-Banking services. And

out of that 20 respondents, half think that HDFC provides this services better and half

think that ICICI provides better. So, we can say that both the banks are providing this

feature of E-Banking with almost same quality.

10

9

ATM

HDFC

ICICI

Interpretation: Out of the total respondents 19 think that they use E-Banking

services because of its ATM feature. And, out of those 19 respondents, 10 liked the

services provided by HDFC bank whereas 9 liked it by ICICI bank.

[71]

4

5

PHONE BANKING

HDFC

ICICI

Interpretation: As per the survey, 4 people liked the phone banking feature of HDFC

bank the most, where as this number is 5 in case of ICICI bank.

1

3

I-MOBILE

HDFC

ICICI

Interpretation: According to the survey, 1 respondent liked the I-MOBILE feature

the most in case of HDFC bank, and 3 in case of ICICI bank.

[72]

11

TV BANKING

HDFC

ICICI

Interpretation: TV Banking feature is not very common. Only 2 respondents out of

the total respondents think that this service feature is crucial for E-Banking. And, out

of those 2, one rated HDFC the best and the other rated the ICICI the better provider.

11

I-ZONE

HDFC

ICICI

Interpretation: As per the survey conducted, 2 respondents think that they use E-

Banking because of its I-Zone feature. Out of those 2, one rated HDFC the best and

one rated ICICI the best.

[73]

Q8) WHICH OF THE FOLLOWING FACTORS INFLUENCE YOU THE

MOST TO USE E-BANKING SERVICES?

Factors Strongly

More than

average Average

Less than

Average Not at all

A All time availability 55 31 13 8 2

B Ease of use 49 27 17 11 5

C Nearness 45 33 25 4 2

D Security 43 25 19 14 8

E Direct access 49 31 19 8 2

F Friends/ Relatives 51 27 17 10 4

G Status symbol 57 31 13 6 2

0

10

20

30

40

50

60

A

strongly

more than average

average

less than average

not at all

Interpretation: The result shows that according to 50% respondents all time

availability strongly influence them to use E-banking and according to 29%

respondents all time availability influence them more than average to use E-banking

and according to 7% respondents all time availability influence them less than average

to use E-banking the reason of variation in views of respondents is the because of

their preferences and perception.

[74]

49

27

17

11

5

0

10

20

30

40

50

60

B

strongly more than average average less than average not at all

Interpretation: The results shows that according to 45% respondents ease of use

strongly influence them to use E-banking and according to 25% respondents ease of

use influence them more than average to use E-banking and according to 5%

respondents ease of use influence them not at all to use E-banking

45

32

25

4 3

0

5

10

15

20

25

30

35

40

45

50

C

strongly more than average average less than average not at all

Interpretation: According to 41% respondents nearness strongly influence them to

use E-banking and according to 23% respondents nearness influence them average to

use E-banking and according to 4% respondents nearness influence them less than

average to use E-banking.

[75]

43

25

19

14

8

0

5

10

15

20

25

30

35

40

45

50

D

strongly more than average average less than average not at all

Interpretation: According to 39% respondents security strongly influence them to

use E-banking and according to 23% respondents security influence them more than

average to use E-banking and according to 13% respondents security influence them

less than average to use E-banking.

0

10

20

30

40

50

60

E

strongly

more than average

average

less than average

not at all

Interpretation: The result shows that according to 45% respondents direct access

strongly influence them to use E-banking and according to 28% respondents direct

access influence them more than average to use E-banking and according to 7%

respondents direct access influence them less than average to use E-banking

[76]

51

27

17

10

4

0

10

20

30

40

50

60

F

strongly more than average average less than average not at all

Interpretation: The result shows that according to 47% respondents their

friends/relatives strongly influence them to use E-banking and according to 25%

respondents their friends/relatives influence them more than average to use E-banking

and according to 9% respondents their friends/relatives influence them less than

average to use E-banking.

57

31

13

6

2

0

10

20

30

40

50

60

G

strongly more than average average less than average not at all

Interpretation: The result shows that according to 52% respondent’s status symbol

strongly influence them to use E-banking because now a days a person who is using

[77]

E-banking services is considered as a high profile person and according to 28%

respondents status symbol influence them more than average to use E-banking

services.

Q9) TO WHAT EXTENT IS YOU SATISFIED WITH YOUR BANKS’ E-

BANKING SERVICES?

highly satisfied

51%

satisfied

28%

neutral

4%

dissatisfied

14%

highly

satisfied

3%

no. of respondants

Interpretation: The most of the customers are really liked the facilities provided by

banks as they strongly agree that the facilities are good for them so they like to avail

E- banking services TOTAL NO.

Highly satisfied (1) 56

satisfied (2) 31

Neutral (3) 4

Dissatisfied (4) 15

Highly dissatisfied (5) 3

TOTAL 109

[78]

the E-banking services provided by the different banks and the result shows that 48%

respondents are highly satisfied with the e-banking services provided by their bank

and 28% respondents are satisfied with the e-banking services provided by their bank

and 14% respondents are dissatisfied with the e-banking services provided by their

bank.

Respondents from HDFC and ICICI

Banks No. of Respondents

HDFC 39

ICICI 24

HDFC

62%

ICICI

38%

banks

Interpretation: In this we can easily say that out of the 150 respondents there are 39

respondents who are from HDFC and 24 are from ICICI. From this we can easily

understand that which bank provides good services to their customers and who are

satisfied their customers.

HDFC

E- banking services TOTAL NO.

[79]

19

11

2

6

1

0

2

4

6

8

10

12

14

16

18

20

hdfc

highly satisfied satisfied neutral dissatisfied highly dissatisfied

Interpretation: From this we can analysis that most of the respondents that is 19

respondents are satisfied with the services provided by the bank. That they like the E-

banking services provided by the by HDFC bank and the bank also easily satisfied

their customers.

ICICI

Highly satisfied 1 19

satisfied 2 11

Neutral 3 2

Dissatisfied 4 6

Highly dissatisfied 5 1

TOTAL 39

E- banking services TOTAL NO.

[80]

11

8

1

2 2

0

2

4

6

8

10

12

icici

highly satisfied satisfied neutral dissatisfied highly dissatisfied

Interpretation: From this we can analysis that most of the respondents that is 11

respondents are satisfied with the services provided by the bank. That they like the E-

banking services provided by the by ICICI bank and the bank also easily satisfied

their customers.

Q10) WHICH OF THE FOLLOWING BENEFITS ACCRUE TO YOU, WHILE

USING E-BANKING SERVICES?

Highly satisfied 1 11

satisfied 2 8

Neutral 3 1

Dissatisfied 4 2

Highly dissatisfied 5 2

TOTAL 24

[81]

Time saving

51%Inexpensive

29%

Easy processing

13%

Easy fund

transfer

7%

Respondents

Interpretation: Most of the respondents think that the major benefit from E-banking

services is time saving facility. Because the major problem which the respondents

faced is time problem so E-banking eases their lives and save their time so they like

this facility because of this facility.

HDFC

Benefits TOTAL NO.

Time Saving 56

Inexpensive 31

Easy Processing 14

Easy Fund Transfer 8

Total 109

Benefits TOTAL NO.

Time Saving 15

[82]

15

11

8

5

0

2

4

6

8

10

12

14

16

hdfc

time saving inexpensive easy processing easy fund transfer

Interpretation: We can analysis that the customers of HDFC really satisfied with the

time saving facility of E-banking. They thought that it’s a good for them to use the E-

banking services because it’s save their time and they can easily access the service.

ICICI

Inexpensive 11

Easy Processing 8

Easy Fund Transfer 5

Total 39

Benefits TOTAL NO.

Time Saving 12

Inexpensive 8

[83]

12

8

2 2

0

2

4

6

8

10

12

14

icici

time saving inexpensive easy processing easy fund transfer

Interpretation: We can easily understand that there is not at all the biggest difference

between the respondents of HDFC and ICICI they both use the E-banking services

because it’s save their time and it’s easily to handle.

Q11) KINDLY RATE THE FOLLOWING REASONS ENLISTED FOR NOT

USING THE E-BANKING SERVICES?

Factors Highly

important

More than

average

Average

Less than

average

Least importan

t

A No need( Satisfied with traditional banking)

10 4 12 3 12

B It seems like a botheration

5 0 9 16 11

C Insecurity 10 7 12 4 8

D No access to internet/mobile

9 3 9 8 12

Easy Processing 2

Easy Fund Transfer 2

Total 24

[84]

E Lack of operational knowledge

8 3 7 7 16

F Hidden costs 12 3 9 8 9

0

5

10

15

20

25

30

35

40

45

No n

eed(

Satisfied w

ith

traditio

nal

Insecurity

Lack o

f

opera

tional

know

ledge

Factors

No

. o

f R

esp

on

den

ts

Least important

Less than average

Average

More than average

Highly important

Interpretation: From the non users, an attempt was made to elicit the reasons for its

non usage. As shown in the table, satisfaction with traditional banking was considered

as prime de-motivating factor, followed closely by the fear of insecurity, then ‘hidden

cost’ factor, which suggested their resistance to change, which to some extent can be

countered by aggressive advertisement and utilizing other modes of awareness

dissemination as well.

Q12) RATE THE FOLLOWING STATEMENTS WITH REGARDS TO

POTENTIAL PROBLEMS IDENTIFIED IN E-BANKING SERVICES?

Factors

Highly

considere

d

Major Avera

ge Minor

Ignorab

le

A Time consuming 18 14 9 35 33

B Security Issue 8 20 29 30 22

C ATM out of order 9 18 14 33 35

D Internet Connectivity 18 25 13 29 24

[85]

Issue

E Password forgotten 22 35 9 18 25

F Card

misplaced/Misused

28 16 35 21 9

G Difficulty in Claiming

False transactions

35 21 29 16 8

18

14

9

3533

0

5

10

15

20

25

30

35

40

A

highly considered major average minor ignorable

Interpretation: According to this result 32% respondent’s time as a minor identified

potential problems in E-banking services and 30% respondents consider time as a

ignorable identified potential problems in E-banking services but 17% respondents

highly consider time as a identified potential problems in E-banking services.

[86]

8

20

2930

22

0

5

10

15

20

25

30

35

B

highly considered major average minor ignorable

Interpretation: The result shows 28% respondents highly consider security issue as a

minor identified potential problems in E-banking services and 18% respondents

consider security issue as major identified potential problems in E-banking services.

9

18

14

3335

0

5

10

15

20

25

30

35

40

C

highly considered major average minor ignorable

Interpretation: The result shows that 32% respondents consider ATM out of order

as a ignorable identified potential problems in E-banking services and 30%

respondents consider ATM out of order as a minor identified potential problems in E-

banking services and 8% respondents consider ATM out of order as a highly

considered identified potential problems in E-banking services.

[87]

18

25

13

29

24

0

5

10

15

20

25

30

35

D

highly considered major average minor ignorable

Interpretation: The result shows that 27% respondents consider internet connectivity

as minor identified potential problems in E-banking services and 17% respondents

consider internet connectivity as highly considered identified potential problems in E-

banking service.

0

5

10

15

20

25

30

35

40

E

highly considered

major

average

minor

ignorable

Interpretation: The result shows that 32% respondents consider password forgotten

as a major identified potential problems in E-banking services and 8% respondents

consider password forgotten as an average identified potential problems in E-banking

services.

[88]

28

16

35

21

9

0

5

10

15

20

25

30

35

40

F

highly considered major average minor ignorable

Interpretation: The result shows that 32% respondents consider card

misplaced/misused as an average identified potential problems in E-banking services

and 8% respondents consider card misplaced/misused as an ignorable identified

potential problems in E-banking services.

35

21

29

16

8

0

5

10

15

20

25

30

35

40

G

highly considered major average minor ignorable

Interpretation: The result shows that 27% respondents consider difficulty in

claiming false statement as an average identified potential problems in E-banking

services and 15% respondents consider difficulty in claiming false statement as a

minor identified potential problems in E-banking services.

[89]

Q13) IF YOU USE, RATE YOUR ONLINE BANKING FACILITY ON THE

FOLLOWING CRITERIA USING A SCALE OF 1 TO 5 (WHERE 1 IS VERY

SATISFIED AND 5 IS VERY DISSATISFIED)

Factors 1 2 3 4 5

A Quality of

information

26 36 22 17 8

B Quality and Quantity

of content

14 32 46 11 6

C Security of personal

information

35 28 18 12 16

Rating for quality of

information

TOTAL NO.

Very satisfied 1 26

satisfied 2 36

Average 3 22

Dissatisfied 4 17

Very dissatisfied 5 8

TOTAL 109

[90]

0

5

10

15

20

25

30

35

40

rating for quality of information

very satisfied

satisfied

average

dissatisfied

very dissatisfied

Interpretation: From above its clear that majority of our respondents were satisfied

and very satisfied with the quality of information provided at online banking. This

result show that the customers are satisfied with the information quality provided by

the bank, quality of information play very important role if the customer understand

what is provided then he can demand it more otherwise not.

Rating for quality and quantity of content TOTAL NO.

Very satisfied 1 14

satisfied 2 32

Average 3 46

Dissatisfied 4 11

Very dissatisfied 5 6

TOTAL 109

[91]

14

32

46

11

6

0

5

10

15

20

25

30

35

40

45

50

rating for quality and quantity of content

very satisfied satisfied average dissatisfied very dissatisfied

Interpretation: From above its clear that majority of our respondents get average and

satisfied with the quality and quantity of content provided at online banking. Quantity

of information also play vital role in online banking because the customer of bank

want simple information and as per their requirement only then he get satisfied.

[92]

35

28

18

12

16

0

5

10

15

20

25

30

35

40

rating for security of personal information

very satisfied satisfied average dissatisfied very dissatisfied

Interpretation: From above its clear that majority of our respondents were very

satisfied and satisfied with the security of personal information provided at online

banking. This result shows that the bank customers believe that their personal

information is secure while using online banking facility provided by the banks.

Q14) If answer to question no.2 is NO, even if you are not aware about E

Banking services then would you like to have information about this or would

you like to get information from the bank itself?

Rating for security of personal information TOTAL NO.

Very satisfied 1 35

satisfied 2 28

Average 3 18

Dissatisfied 4 12

Very dissatisfied 5 16

TOTAL 109

GET INFORMATION ABOUT E-BANKING TOTAL

Yes 81

[93]

Yes

54%

No

46%

information about the e-banking services

Interpretation: The result shows 54% respondents will like to get information from

the bank itself and 46% respondents will not like to get information from the bank

itself as E-banking services is provided by every bank so majority of respondents

wants to get information about E-banking.

Q15) WOULD YOU LIKE TO USE E BANKING SERVICES AFTER

GETTING THE REQUIRED KNOWLEDGE ABOUT THE SERVICES

OFFERED BY THE BANKS?

No 69

TOTAL 150

GET INFORMATION ABOUT E-BANKING TOTAL

Yes 89

No 61

TOTAL 150

[94]

Yes

59%

No

41%

Use the E-banking services

Interpretation: The result shows that 59% respondents would like to use E Banking

services after getting the required knowledge about the services offered because now

a days E-banking services considered very important and everyone use these services

daily to do work easily and quickly but 41% respondents would not like to use E

Banking services after getting the required knowledge about the services offered by

the banks.

[95]

4.1.2 CHI SQUARE TEST

The main objective is to study about the factor that affects the customer perception

towards e-banking of HDFC and ICICI bank.

• EASE OF USE WITH RESPECT TO OCCUPATION

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 22.182a 12 .036

Likelihood Ratio 24.800 12 .016

Linear-by-Linear Association .796 1 .372

N of Valid Cases 109

a. 13 cells (65.0%) have expected count less than 5. The minimum expected count is .73.

Interpretation: As from the above table the value of Pearson Chi-Square with p

value is .036 which is less than 5% level of significance. Hence, we have to reject null

hypotheses stated that ease of use has influence on the use of E-banking services.

• DIRECT ACCESS WITH RESPECT TO OCCUPATION

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 9.946a 12 .621

Likelihood Ratio 10.878 12 .539

Linear-by-Linear Association 2.091 1 .148

N of Valid Cases 109

a. 10 cells (50.0%) have expected count less than 5. The minimum expected

count is .37.

Interpretation: As from the above table the value of Pearson Chi-Square with p

value is .621 which is greater than 5% level of significance. Hence, null hypothesis is

accepted and thus we reject the alternative hypothesis which stated that direct access

have no influence the use of E-banking services.

[96]

• FRIENDS AND RELATIVES WITH RESPECT TO OCCUPATION

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 6.477a 12 .890

Likelihood Ratio 7.580 12 .817

Linear-by-Linear Association .694 1 .405

N of Valid Cases 109

a. 13 cells (65.0%) have expected count less than 5. The minimum expected count is .62.

Interpretation: As from the above table the value of Pearson Chi-Square with p

value is .890 which is greater than 5% level of significance. Hence, null hypothesis is

accepted and thus we reject the alternative hypothesis which stated that

friends/relatives has no influence the use of E-banking services.

• EASE OF USE WITH RESPECT TO AGE

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 15.399a 16 .496

Likelihood Ratio 18.341 16 .304

Linear-by-Linear Association .108 1 .742

N of Valid Cases 109

a. 17 cells (68.0%) have expected count less than 5. The minimum expected count is .64.

Interpretation: As from the above table the value of Pearson Chi-Square with p

value is .496 which is greater than 5% level of significance. Hence, null hypothesis is

accepted and thus we reject the alternative hypothesis which stated that ease of use

has no influence the use of E-banking services

[97]

• DIRECT ACCESS WITH RESPECT TO AGE

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 11.776a 16 .759

Likelihood Ratio 13.472 16 .638

Linear-by-Linear Association .374 1 .541

N of Valid Cases 109

a. 15 cells (60.0%) have expected count less than 5. The minimum expected count is .28.

Interpretation: As from the above table the value of Pearson Chi-Square with p

value is .759 which is greater than 5% level of significance. Hence, null hypothesis is

accepted and thus we reject the alternative hypothesis which stated that direct access

has no influence the use of E-banking services.

• FRIENDS AND RELATIVES WITH RESPECT TO AGE

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 26.941a 16 .042

Likelihood Ratio 26.596 16 .046

Linear-by-Linear Association .176 1 .674

N of Valid Cases 109

a. 17 cells (68.0%) have expected count less than 5. The minimum expected

count is .48.

Interpretation: As from the above table the value of Pearson Chi-Square with p

value is .042 which is less than 5% level of significance. Hence, null hypothesis is not

accepted and thus we accept the alternative hypothesis which stated that ease of use

have some influence the use of E-banking services.

[98]

CHAPTER – 5

SUMMARY, FINDINGS,

CONCLUSION, LIMITATION & RECOMMENDATIONS

[99]

5.1.1 SUMMARY

Knowledge cannot be gained only on the basis of theoretical understanding from

books. A practical insight is necessary for the learning process to make it complete

and effective. This is especially in case of Management Education, banking is one of

the emerging or rather to say it one of the fastest growing in India. Today the banking

sector has transcended the normal banking activities and has diversified into

insurance, merchant banking, advisory services and many more.

My project aims at Comparative study on Customer Perception Towards E-banking

With Respect To HDFC and ICICI Bank. In this research study 150 respondents from

both the Banks were taken, After analyzing the results of the questionnaire we

conclude that even now a days banks are providing innovative services day by day,

but still there are a lot of customers who are even not aware about these services, the

usage of these services is a different issue, Today Banks are using huge amount of

funds to provide differentiate services to their customers from their competitors like

by using new software or by providing new innovative services like internet banking,

mobile banking, and many others but still they are focusing only to provide the

innovative services to the customers not focusing too aware them regarding these

services and also there is a need to aware the customers about the use and benefits to

the services provided by the bank, because it’s the way to get competitive advantage,

as per as we all know that today most of the organizations are focusing on the

promotion- element of marketing mix, which is providing financial as well as non

financial benefits like Brand image, so these Banks is not focusing over this element,

Majority of the respondent in Bank have savings account with banks. The facility that

was availed by most of the people at these Banks was that of ATM/Debit Cards. The

most important channel that aware customer most regarding the innovative services is

family& friends.

[100]

5.1.2 FINDINGS OF THE STUDY

• From our study we find out that 114 male and 36 female are using E-banking

services of both the banks. The male are having more knowledge about the

transactions and having more knowledge about the services provided by the

banks. Only the working ladies having knowledge about the services or the

female having the knowledge but not of the all the services which are provided

by the banks. So that’s why we considered only those persons who are having

knowledge about all services of E-banking which is provided by the banks.

• Most of the respondents who lies under the age of 21-30 are using E-banking

services as near about 40 respondents are using these services because under

the age of these respondents they are having more knowledge about the

services of e-banking.

• Most of respondents are business man are using E-banking services as near

about 48 respondents are using E-banking services. Because the benefits

which are having while using these services are more benefited by the

business man people so they are availing these services more than the other

respondents.

• Most of the respondents who are using this facility having income lie between

10,000-25,000. And there is no at all a huge difference between the

respondents who are having income between 25,000-50,000.

• Among the overall percentage of the customers whose having their account in

the both the bank which we have conducted in our survey should be the 58%,

and they are using the services of both the banks and the categorical division is

to be 16% in ICICI and 26% in HDFC.

• The overall percentage of businessmen having complete knowledge about e-

banking services provided by the bank while opening an account in it is 73%

and the percentage of people have no awareness of e-banking services

provided by the bank is 27%. It can reasonably, be concluded that nearly 73%

of the population is having awareness about e-banking services.

• Among those aware (which account for 150 in number) about 109 persons use

e-banking services, which is 73% of total population studied.

[101]

• E-banking constitutes services provided in terms of ATMs, Debit Card, Credit

Card, Phone Banking, Mobile Banking, Internet Banking etc, of which the

first six have been covered. Amongst these Debit Card scores the largest used

service status (68%) Close on the heels is Mobile Banking (64.66%), Phone

Banking (44.66%), while One Line banking lags behind by scoring the least

ie.,0.08%.

• To find out the level of usage amongst the business class, percentage has been

calculated from the total completely filled in questionnaires and the

incomplete questionnaires were discarded. The frequency of usage of Debit

card is highest followed by ATM.

• A study of the factors, influencing the usage was made by listing out various

factors such as all time availability, ease of use, nearness etc., and amongst

the various factors status symbol is ranked as the major motivating factor,

followed by all time availability, friends, ease of use and direct access in

decreasing order of importance. Quite interestingly security symbol scored the

least motivating factors.

• When asked to list various benefits accruing from the usage of e-banking,

time saving received highest percentage score at 51.37% among different

benefits such as inexpensive (28.44%), easy processing (12.84%), easy fund

transfer (7.3%).Quite interestingly, easy processing feature scored more than

the inexpensiveness of the e-banking services. The other benefits accruing to

the people include ready availability of funds, removal of middlemen and no

rude customer relation executives.

• Among the users, various problems that are encountered while using e-

banking services. Firstly they highly considered Difficulty in claiming false

transactions are major reasons that create hurdles in its usage, while card

misplaced and misused, password forgetting, time consumption and internet

connectivity issue also considered seem to be the least bothering problems.

• From the non users, an attempt was made to elicit the reasons for its non

usage. most important factors which have been considered by customers who

are not using e banking services are no access to internet, mobile then hidden

cost factor, followed by dissatisfaction with traditional banking was

considered as de-motivating factor, followed closely by the fear of insecurity,

[102]

then ‘botheration’ factor, which suggested their resistance to change, which to

some extent can be countered by aggressive advertisement and utilizing other

modes of awareness dissemination as well.

• We easily from our interpretation find out that there is not at all as such

comparison between both the banks. As there are some of the services which

are equally good as the services of other bank. As the services of net banking

is good in HDFC as compare to ICICI. And if we compare the mobile banking

services then both are at equally side. But if we compare the phone banking

facility of both the banks then ICICI provides totally satisfaction to their

customers. So in findings we can’t say that overall which bank provides the

satisfactory facility to their customers only there is some services which is

better of HDFC and some are better of ICICI bank. Like out of 109

respondents 59 respondents prefer the E-banking services of HDFC and 50

respondents prefer the services of ICICI bank. So most of the respondents

considered the services provided by HDFC bank are better in respect of ICICI

bank.

[103]

5.1.3 CONCLUSION

This study attempted to identify key quality attributes of internet banking services by

analyzing internet banking customers & their comments on banking experience. The

findings of this study show that despite of many advantages of online banking. People

still consider it as an alternative for analyzing their bank records. Although every

bank today provides the facility of online banking but most of people use it only once

a month. This reason is that in case of internet banking interpersonal interaction with

customers is seldom possible. Identification & measurement of customer’s

expectations of the internet banking services provide a frame of reference & their

related quality dimension. The main factors which persuade people to use online

banking are comfort & convenience & the facility which attracts them most is quality

& quantity of information. Therefore the implementation of quality initiatives should

begin with defining customer’s need & preferences & their related quality dimensions

There is still a lot needed for the banking system to make reforms and train their

customers for using internet for their banking account. Going through the survey the

main problem lies that still customer have a fear of hacking of accounts and thus do

not go on for internet banking. Banks are trying their level best by providing the best

security options to the customers but then to there is lot of factors which betrays a

customer from opening an internet bank account.

Banks are providing free internet banking services also so that the customers can be

attracted. By asking the bank employs we came to know that maximum numbers of

internet bank account holders are youth and business man. E-Banking is an innovative

tool that is fast becoming a necessity. It is a successful strategic weapon for banks to

remain profitable in a volatile and competitive marketplace of today. If proper

training should be given to customer by the bank employs to open an account will be

beneficial secondly the website should be made friendlier from where the first time

customers can directly make and access their accounts. In future, the availability of

technology to ensure safety and privacy of e-transactions and the RBI guidelines on

various aspects of internet banking will definitely help in rapid growth of internet

banking in India.

[104]

5.1.4 LIMITATIONS

Every research is conducted under some constraints and this research is not an

exception. Limitations of this study are as follows:-

• As a research is based on a sample, therefore, the findings may not reveal the

factual information about the research problem, though an utmost care will be

taken to select a truly representative sample.

• There may be some bias in the responses of the respondents which cannot be

ruled out fully.

• Sudden change in the e- banking practices during the course of research can

affect the results.

• The study is limited to areas of Jalandhar only.

• The sample size of only 150 was taken from the large population for the

purpose of study, so there can be difference between results of sample from

total population.

• People were reluctant to go in to details because of their busy schedules.

• Merely asking questions and recording answers may not always elicit the

actual information sought.

• Due to continuous change in environment, what is relevant today may be

irrelevant tomorrow.

[105]

5.1.5 RECOMMENDATIONS

We can see the time is changing and we the passage of time people are accepting

technology there is still a lot of perceptual blocking which hampers the growth it’s the

normal tendency of a human not to have changes work on the old track, that’s also

one of the reason for the slow acceptance of internet banking accounts.

• Banks should obey the RBI norms and provide facilities as per the norms, which

are not being followed by the banks. While the customer must be given the

prompt services and the bank officer should not have any fear on mind to provide

the facilities as per RBI norms to the units going sick.

• Internet banking facility must be made available in all branches of these two

Banks.

• Each section of these Banks should be computerized even in rural areas also.

• Personalized banking should be given a thrust as more and more banks are

achieving in usual services.

• Covering up the towns in rural areas with ATMs so that the people in those areas

can also avail better services.

• Prompt dealing with permanent customers and speedy transactions without

harassing the customers.

• Fair dealing with the customers. More contributions from the employees of the

bank. The staff should be co-operative, friendly and must be capable of

understanding the problems of the customers.

• Give proper training to customers for using i-banking

• Create a trust in mind of customers towards security of their accounts

• Provide a platform from where the customers can access different accounts at

single time without extra charge.

• Make their sites more users friendly. Customers should be motivated to use I-

banking facilities more.

[106]

CHAPTER – 6

BIBLIOGRAPHY

[107]

6.1.1 BIBLIOGRAPHY

• Agarwal, R., Raastogi, S., & Malhotra, A. (2009), “Customers’ perspectives

regarding e-banking in an emerging economy”, Journal of Retailing and

Consumer Services, Vol.16, Iss. 5, pp. 340-351

• Anthoney, R. (2004), “User Friendly E-Banking: A Survey of Online E-

Banking Retail Initiatives”, Communications of the ACM, Vol. 47, Iss. 10, pp.

99-102

• Asghar, O. (2004), “Banking In a Cloud of Electrons”.

• Awamleh, R. (2006), “Diffusion of Internet Banking amongst educated

consumers in a high income Non-OECD country”, Journal of Internet

Banking and Commerce, Vol. 11, Iss. 3

• Azouzi, D. (2009), “The Adoption of Electronic Banking in Tunisia”, Journal

of Internet Banking and Commerce, Vol. 14, Iss. 3, pp. 1-11

• Bauer H. Hans, Maik, H. & Falk, T. (2006), “Measuring the quality of e

banking portals”, International Journal of Bank, Vol. 23, Iss. 2

• B. Dizon, Javier A. (2009), “Special Feature: Electronic Banking”.

• IIT Madras, (2010), “Polaris Software and IndusInd Bank launch

INTELLECT PRIVACY Internet Banking Security Card”, PR Newswire

• Kamiya, J. (2006), “How E-Banking Can Ease Your Life”,Rediff.com

• Kuang Hsun, S. (2008), “Is E-Banking A Competitive Weapon”, International

journal of electronic finance, Inder Science Publishers, Vol.2, No. 2, pp.180-

196

• Laukkanen, P., Sinkkonen, S., & Laukkanen, T. (2008), “Consumer resistance

to internet banking: postponers, opponents and rejectors”, The International

Journal of Bank Marketing. Vol. 26, Iss. 6, pp. 440

• Malhotra, P., & Singh, B. (2007), “Determinants of Internet banking adoption

by banks in India”, Journal of Internet Research, Emerald Group Publishing

Ltd., Vol. 17, Iss. 3, pp.323-339

• Malhotra, P., & Singh, B. (2010) “An analysis of Internet banking offerings

and its determinants in India”, Journal of Internet Research, Vol. 20, Iss. 1,

pp. 87

[108]

• Maumbe, M. (2006), “Digital Financial Service Delivery to Poor Communities

in”, International Review of Business Research Papers, Vol. 2, Iss. 2, pp.72-

79

• Nitsure, R.R. (2003), “E-Banking: Challenges and Opportunities”, Economic

and Political Weekly, Vol. 38, No. 51/52 , pp. 5377-5381

• Picado, F., Gonzalez Marvin, E. & Carl Eckelman,A., Quesada,G. (2004),

“Customer Satisfaction Using QFD”, Journal of managing service quality,

Emerald Group Publishing Limited, Vol. 14, Iss. 4, pp.317-330

• Routray, S. (2008), “Wireless ATM: A Technological Framework to M-

Banking”, Journal of Internet Banking and Commerce, Vol. 13, Iss.1

• Shah, M.H., & Braganza, A. (2007), “A Survey of Critical Success Factors in

e-banking”, European Journal of Information Systems, Vol. 16, Iss. 4,pp.511-

524

• Uppal, R K. & Chawla, R. (2009), “E-Delivery Channel-Based Banking

Services: An Empirical Study. Institute of Chartered Financial Analysts of

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• Veneeva, V. (2006), “E-Banking (Online Banking) and Its Role in Today's

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[109]

6.1.2 REFERENCES

• http://banking-online-internat.blogspot.com/search/label/Banking

• http://dikkedeur.dyndns.org/index.php?option=com_ewiki&view=mediawiki

&article=HDFC_BANK

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

• http://ezinearticles.com/?E-banking-%28Online-Banking%29-and-Its-role-in-

Todays-Society&id=232606

• http://ibnlive.in.com/news/easy-banking-get-tech-savvy-to-manage-

money/88527-7.html

• http://indianbanksinfo.com/indianbanks/ICICI/

• http://investmentexpert.blogspot.com/2006/11/e-banking-services-offered-

by.html

• http://ivythesis.typepad.com/term_paper_topics/2009/08/evolution-and-the-

impact-of-electronic-banking-on-the-banking-industry.html

• http://library.thinkquest.org/C0110237/Banking___Financial_Institutio/Electr

onic_Banking/electronic_banking.html

• http://pcinternetbanking.com/

• http://proquest.umi.com/pqdweb?did=1837252841&sid=1&Fmt=3&clientId=

129893&RQT=309&VName=PQD

• http://university-essays.tripod.com/ebanking_online_internet_banking.html

• http://www.answers.com/topic/online-banking

• http://www.articlesbase.com/internet-articles/internet-banking-a-global-way-

to-banks-in-india-1855956.html

• http://www.banknetindia.com/banking/ibkg.htm

• http://www.banknetindia.com/banking/ibkg.htm

• http://www.courseworkyou.co.uk

• http://www.easternbookcorporation.com/moreinfo.php?txt_searchstring=1394

• http://www.ehow.com/about_5109945_history-ebanking.html

[110]

• http://www.ehow.com/about_5366338_internet-banking-vs-traditional-

banking.html

• http://ezinearticles.com/?A-Brief-History-of-Internet-Banking&id=353450

• http://ezinearticles.com/?Internet-Banking-Vs-Traditional-Banking&id=93016

• http://www.ffiec.gov/ffiecinfobase/booklets/e_banking/ebanking_00_intro_def

.html

• http://www.fisglobal.com/Products/eBanking/index.htm

• http://www.fsa.gov.uk/Pages/Library/Communication/Speeches/2000/SP46.sh

tml

• http://www.hdfcbank.com/personal/access/atm/atm.htm

• http://www.hdfcbank.com/nri/access/oneview/oneview.htm

• http://www.hdfcbank.com/personal/default.htm

• http://www.homebusinesscenter.com/bank/internet_bank_account.html

• http://www.icicibank.com/

• http://www.icicibank.com/Personal-Banking/insta-banking/atm-banking/atm-

banking.html

• http://www.icicibank.com/Personal-Banking/onlineservice/mobile-

banking/mobile.html

• http://www.icicibank.com/Personal-Banking/insta-banking/insta-index.html

• http://www.imf.org/external/pubs/ft/fandd/2002/09/nsouli.htm

• http://www.isbs.com/partnumber.asp?cid=&pnid=296990

• http://www.management-hub.com/cm-online-banking.html

• http://www.managementparadise.com/forums/customer-relationship-

management-banking-insurance/25547-e-banking.htm

• http://www.medbib.com/HDFC_Bank

• http://www.moneycontrol.com/2006/articles/html

• http://www.rediff.com/money/2006/nov/17mc.htm

• http://www.tebetbarat.com/bank/

• http://www.tieto.com/?path=1;93;16080;123;273;25070;25071;25048

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• http://www.worldjute.com/ebank.html

[111]

CHAPTER – 7

APPENDIX

[112]

7.1.1. APPENDIX

Dear Respondent,

We are conducting a research study of B We will appreciate your cooperation in this

regard by filling up the questionnaire carefully. I assure you that the information

provided by you will be kept confidential and will be used for academic purpose only.

Please put a tick (√) in appropriate brackets.

Q1) In which bank do you have your account?

� ICICI � HDFC � BOTH

Q2) While opening up the account, were you aware of E-banking services provided

by your bank?

� Yes � No

(If No, answer question no. 11 directly).

Q3) if answer to question no.2 is YES, which of the following E-banking services is

you aware of?

� Internet Banking � Mobile Banking � Phone Bank

� One Line Banking � Debit Card

Q4) Are you availing E-banking services?

� Yes � No

Q5) How convenient you find accessing your bank online?

� Easy � Normal � Difficult

Q6) if answer to question no.4 is yes, how frequently do you use each of the

following services?

Factors

Once in a

day

Once in a

week

Once in a

fortnight

Once in a

month

Infrequent

ly

[113]

A Internet Banking

B Mobile Banking

C Phone Banking

D One Line Banking

E Debit Card

Q7) Tick the feature which you like while considering HDFC and ICICI bank?

Features HDFC ICICI

A Net Banking

B Credit Card Online

C One view

D Insta Alerts

E Mobile Banking

F ATM

G Phone banking

H I Mobile

I TV Banking

J IVR Banking

K I-Zone

Q8) Which of the following factors influence you the most to use E-banking services?

Factors Strongly More than

average Average

Less than

Average Not at all

A All time availability

B Ease of use

C Nearness

D Security

E Direct access

F Friends/ Relatives

G Status symbol

[114]

Q9) To what extent are you satisfied with your Banks’ E-banking services?

� Highly Satisfied � Satisfied � Neutral

� Dissatisfied � Highly Dissatisfied

Q10) Which of the following benefits accrue to you, while using E-banking services?

� Time Saving � Inexpensive � Easy Processing

� Easy Fund Transfer � Any Other________________

Q11) Kindly rate the following reasons enlisted for not using the E-banking services?

Factors Highly

important

More

than

average

Average Less than

average

Least

important

A No need( Satisfied with

traditional banking)

B It seems like a botheration

C Insecurity

D No access to

internet/mobile

E Lack of operational

knowledge

F Hidden costs

Any other, please specify__________________________________________

Q12) Rate the following statements with regards to potential problems identified in E-

banking services?

Factors Highly

considered Major Average Minor Ignorable

A Time consuming

B Security Issue

C ATM out of order

D Amount debited but not

withdrawn

[115]

E Internet Connectivity Issue

F Password forgotten

G Card misplaced/Misused

H Difficulty in Claiming False

transactions

Q13) If you use, rate your online banking facility on the following criteria using a

scale of 1 to 5 (where 1 is very dissatisfied and 5 is very satisfied)

Factors 1 2 3 4 5

A Quality of information

B Quality and Quantity of

content

C Security of personal

information

Q14) If answer to question no.2 is NO, even if you are not aware about E Banking

services then would you like to have information about this or would you like to get

information from the bank itself?

� YES � NO

Q15) Would you like to use E Banking services after getting the required knowledge

about the services offered by the banks?

� YES � NO

Q16) What other services you would like to have through E-banking?

[116]

Personal details-

Name: - _________________________________________

1. Gender � Male � Female

2. Age Group � Below 21 Years, � 21 years – 30 years,

� 31 years – 40 years, � 41 years – 50 years,

� Above 50 years

3. Occupation � Govt. Job � Private Job

� Business �Other (specify) ___________

4. Income Group (Per month) � below 10,000/- � 10,001 – 25,000/-

� 25,001 – 50,000/- � More than 50,000/-