SUMMER TRAINING PROJECT REPORT ON NET BANKING SERVICE PROVIDED BY INDUSIND BANK

SUBMITTED TO: PUNJAB TECHNICAL UNIVERSITY, JALANDHAR SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT FOR THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION (2008-11)

SUBMITTED BY : DILPREET SINGH BBA UNIVERSITY ROLL NO. 80103320091

GURU NANAK INSTITUTE OF MANAGEMENT AND TECHNOLOGY MODEL TOWN, LUDHIANA

ACKNOWLEDGEMENT
First & foremost, it is my profound privilege to express my sincere thanks to Mr.V.K.Goyal (chief executive) who made it possible for me to work in this prestigious organization. I gratefully acknowledge my indebtness to Mr. Rajan Soni (Deputy manager, IndusInd Bank) who guided me from time to time complete my training at IndusInd Bank. I am also thankful to Dr. [Col.] H.S. Singha Director of GNIMT for helping me to undertake my summer training in this reputed organization. I am thankful to his for encouraging & valuable support. My special and sincere thanks are reserved for my guide Mrs. Rajni Sofat who never said no to me and lend me a helping hand whenever I needed her guidance. She always inspired me to learn more & more. I am thankful to the staff members of the other department of IndusInd for their generous support, cooperation, encouragement & valuable suggestions through my training.

Dilpreet Singh University Roll No. 80103320091

PREFACE
This project is result of my six weeks in industry summer training at IndusInd. Summer training is an integral part of BBA course & it aims at providing a firsthand practical experience of the industry to the students. This helps the students to view a real business world closely, which in turn will influence perception. I am happy that I got an opportunity to pursue training in a reputed, well established, fast growing & professionally managed organization like IndusInd Bank. The project assigned to me was NET BANKING SERVICE PROVIDED BY INDUSIND BANK . In course of training I got an opportunity to see & work specially the personnel department. The practical knowledge acquired is certainly going to help in one & another way. The training in industry gives me opportunities to understand the various things.

STUDENT DECLARATION

I, Dilpreet Singh student of Bachelor of Business Administration from GURU NANAK INSTITUTE OF MANAGEMENT AND TECHNOLOGY, MODEL TOWN, LUDHIANA, hereby declare that I have completed my project on reasons behind employee turnover as part of the course requirement I further declare that the information presented in this project is true and original to the best of my knowledge and none of its part is submitted for any other award or degree.

Signature

CHAPTER 1 INTRODUCTION

INTRODUCTION

1.1

AN INTRODUCTION TO THE COMPANY IndusInd Bank derives its name and inspiration from the Indus Valley civilisation - a culture described by National Geographic as 'one of the greatest of the ancient world' combining a spirit of innovation with sound business and trade practices. Mr. Srichand P. Hinduja, a leading Non-Resident Indian businessman and head of the Hinduja Group, conceived the vision of IndusInd Bank - the first of the new-generation private banks in India - and through collective contributions from the NRI community towards India's economic and social development, brought our Bank into being.

The Bank, formally inaugurated in April 1994 by Dr. Manmohan Singh, Honourable Prime Minister of India who was then the countrys Finance Minister, started with a capital base of Rs.1,000 million (USD 32 million at the prevailing exchange rate), of which Rs.600 million was raised through private placement from Indian Residents while the balance Rs.400 million (USD 13 million) was contributed by Non-Resident Indians. A NEW ERA About IndusInd Bank IndusInd Bank Ltd. is one of the new-generation private-sector banks in India which commenced its operations in 1994. The Bank enjoys a patronage of 2 million customers and has a network of 180 branches, 402 ATMs spread across 147 geographical locations in 28 states and union territories as on September 30, 2009. The Bank also has a Representative Office each in Dubai and London. The Bank's total business (deposits plus advances) as on September 30, 2009 crossed Rs. 40,000 crores. It has multi-lateral tie-ups with other banks providing access to more than 21000 ATMs for its customers. It enjoys clearing and settlement bank status with leading capital, commodity and 6

currency exchanges within India eg - BSE / NSE and commodity exchanges like- MCX, NCDEX, and NMCE. While continuing its drive for efficiency and profitability, IndusInd Bank is a keen participant in the Corporate Social Responsibility space. It is actively engaged in helping mentally-challenged and underprivileged children and on other hand, helps in sensitizing /upholding environmental and ecologically appropriate behaviour. The Bank actively supports Green Practices within the Bank and under its campaign Hum aur Hariyali, it has successfully launched a slew of green initiatives. It is also an active supporter of the arts especially in the field of music and dance. CRISIL has assigned Highest P1+ rating to IndusInd Banks Fixed Deposits and Certificates of Deposit. Recently, CRISIL has reaffirmed its P1+ rating of IndusInd Banks Fixed Deposits and Certificates of Deposit programme. ICRA has also assigned the highest A1+ rating to IndusInd Banks Certificates of Deposit.

1.2 BOARD OF DIRECTORS Mr. R. Seshasayee Managing Director, Ashok Leyland Ltd. Mr. R. Sundararaman Former Dy Managing Director of SBI Mr. T. Anantha Narayanan Chartered Accountant and Expert in Agriculture and Rural Economy Dr. T. T. Ram Mohan Professor, Finance & Accounting, IIM, Ahmedabad Mrs. Pallavi Shroff Practising Lawyer M.D. of Ipca Laboratories Ltd., having practical experience of SSI & Mr. Premchand Godha Agriculture Mr. Ajay Hinduja Businessman Mr. Sushil Chandra Tripathi I.A.S (Retired), Advocate Mr. Ashok Kini Former Managing Director of SBI Mr. Romesh Sobti Managing Director & CEO

1.3

MILLESTONE Year Business Achievements 2007-08

Business Turnover touched a figure of Rs 31833.16 crores Network of Branches increased to 180 along with 183 off-site ATMS, thus having presence in over 147 geographical locations spread over 28 states including Union Territories A Strategic tie-up with Reliance Securities for offering a value-added 3-in-1 savings accountslinked package to customer-comprising a saving bank account, a depository account, and an Internet trading account

Signed an agreement with National Multi Commodity Exchange Ltd. to become their Clearing Bank; It already had such agreements with and NCDEX Strategic partnership with Cholamandlam MS for banc assurance Received recognition in the form of a Certificate of Nomination for the Global Connect Customer Responsiveness Awards. The participants for the award were evaluated on various parameters such as Responsiveness, Intelligence Generation, Intelligence Dissemination, Customer Education, Top management Emphasis, Innovation & Learning

Received recognition by BSE and NASSCOM Foundation for the Best Corporate Social Responsibility Practice Category Featured in the Standard and Poor ESG India Index which provided the investors with exposure to liquid and tradable index of 50 of the best performing stocks in the Indian market as measured by environmental, social and governance (ESG) parameters 2006-2007

Net worth crossed a milestone figure of Rs 1000 crores at Rs 1056 crores Successful completion of GDR issue of Rs 145.96 crores Business turnover touched a figure of Rs 28.700 crores registering a growth of 18.17% over the previous year.

Network of Branches increased to 170 along with 99 off-site ATMs, thus having presence in over 141 geographical locations spread over 27 States including Union Territories Highest A1+ rating for its Certificate of Deposits by ICRA and Highest P1+ rating for its FDs by CRISIL. Bestowed with the prestigious IBA Award for technology implementation (STP). Added a number of new business and product lines, viz the launch of Indus GOLD and Indus Gift Card, E-Remittance facility, tie-up with number of Banks for ATM usage, tie-up with Reliance Securities to extend Portfolio Management services and Banc assurance tie-up with Aviva Life Insurance.

Ranked among the top ten banks in the country in the ET500 list of leading companies in India. Rated as The best among the top 10 private-sector banks in a survey covering 79 banks conducted by Business Standard in its November 2005 issue. Ranked sixth in the overall list, the bank was also identified the

Most Efficient Bank among all banks in India. Bestowed Indias Most Productive Bank status by a Business Today- KPMG Survey Presented Outstanding Achiever of the year 2005- Corporate (Runner up- Banking Technology Award) by IBA, Finacle (from Infosys) and TFCI (Trade Fair and Conference International). 2004-05

Business Turnover Crossed Rs 22000 crores Network grew to 115 branches, 9 extension counters and 195 ATMs. Spread over 95 geographical locations Bestowed with highest rating for deposits from reputed rating agencies Highest rating P1+ on Fixed Deposits from CRISIL Highest rating P1+ on Certificate of Deposits from CRISIL Highest rating F1+ on Fixed Deposits from Fitch Ratings India Pvt. ltd. Banks second International Representative Office opened in London. 100th Branch opened at Dadar, Mumbai. 9

Signed an agreement with NCDEX as clearing banker. Launched International Mahila Card. 2003-04

Total business volume touched Rs 19000 crores. Completes 10 years of banking excellence Ashok Leyland Finance merges with the bank The first Indian commercial bank to achieve certification for its Entire Network of Branches under the ISO 9001:2000 Quality Management System. Launch of Debit Card- International Power Card. Banks first International Representative Office in Dubai. One of the first banks to live on RTGS platform. 2002-03

One of the first banks to implement the RBI- Electronic Funds Transfer Scheme. 2001-02

Total business volume touches Rs 14000 crores. Highest productivity in the Indian banking sector with Rs 16 crores of business per employee. 2000-01

Total business volume crosses Rs 10000 crores 1998-99

IndusInd again rated as one of the Top Performing Banks in various survey reports, for the second year in succession. 1997-98

IndusInd rated as one of the Top Performing Banks in various survey reports 10

1996-97 Pioneer in launching Internet Banking.

1.4

MISSION To position induslnd bank limited as a top 3 performer in the new private bank space in 3years measured by The 3 parameters of profitiability, productivity and Efficiency.

1.5

PRODUCTS PRODUCTS OFFERED BY INDUSIND BANK Bank offers various products in terms of servicing its customer. The bank has tried to tab the growth of the retail sector & has come with various products, Priority Banking being one of them. Bank has pushed the retail banking through a wide spread distribution network & through the growth of the banks Product& customer base. Bank has also tried to enhance cost Efficiency technology that is continuous upgrading & customer base. Saving Account Induslnd Bank offers you a Regular Saving Account with host of convenient features and banking channels to transact through. So, now you can bank at your convenience, without the stress of waiting in queues. Current Account In todays fast-paced world, your business regularly requires you to receive and send funds to various cities in the country. INDUSIND Bank Regular Current Account gives you the power of inter-city banking to more than 200 cities. Fixed Deposits Safety, Flexibility, Liquidity and Returns!!! 11 by leveraging

A Combination of unbeatable features of the Fixed Deposit from INDUSIND Bank. Credit Cards An INDUSIND Bank credit card gives you the facility of cash, convenience and a range of benefits, anywhere in the world. These benefits range from life time free cards, insurance benefits, global emergency assistance service, discount, utility payment, travel discount, and much more. Debit Cards The INDUSIND Bank Debit Card is a revolutionary form of cash that allows customers to access their bank account around the clock, around the world. INVESTMENT At INDUSIND Bank, we care about all your needs. Along with deposit products and loan offerings, INDUSIND Bank assists you to manage your finance by providing various investments options ranging from INDUSIND Bank offers to investment in mutual funds and pure gold. You can invest in above products through any of our branches. For selected products INDUSIND Bank also provides, the ease of investing through electronic channels like ATMs and Internet (www.indusindbank.com). E-Instructions : You can transfer securities 24 hours a day, 7dys a week through Internet & Interactive Voice Response (IVR) at a lower cost. Now with Speak to transfer, you can also transfer or pledge instructions through our customer care officer. Mutual Fund IndusInd bank has tied-up with almost all the mutual funds in the country for distribution pan India. We are currently distributing schemes of the following mutual fund:-

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ABN AMRO BIRLA BOB CHOLAMANDALAM CANBANK DSP DEUTSCHE FIDELITY HSBE HDFC ING JM General Insurance:

LIC PRINCIPAL PRUICICI RELIANCE STANDARD CHARTERED SAHARA SBI SUNDARAM TEMPLETON TATA TAURAS UTI

IndusInd Bank has tied up with Aviva Life Insurance Has 3 Plans: 1. Life Long your hearts? 3. Save Guard : - A simple way to secure your service. General Insurance: IndusInd Bank has tied up with CHULAMANDULAM 1. Health Insurance 2. Marine Insurance 3. Stock Insurance RETAIL BANKING Accounts and Deposits: Saving Accounts 13 : - A Plan flexible enough to adapt to your lifes changing needs.

2. Pension Plus: - Why wait till your 60th birthday to follow

Regular Saving Account Privilege Saving Account Privilege Plus Saving Account Current Account Regular Current A/C Business Current A/C Term Deposit Fixed Deposit Flexi term deposit 1.6 1.6.1 AN INTRODUCTION TO THE PROJECT AN INTRODUCTION TO NET BANKING With cyber cafes and kiosks springing up in different cities access to the Net is going to be easy. Net banking (also referred as e banking) is the latest in this series of technological wonders in the recent past involving use of Internet for delivery of banking products & services. Even the Morgan Stanley Dean Witter Internet research emphasized that Web is more important for retail financial services than for many other industries. Internet banking is changing the banking industry and is having the major effects on banking relationships. Banking is now no longer confined to the branches were 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. 1.6.1.1 MEANING OF NET BANKING Net banking is a concept which enables everyone to conduct business with a bank from the comfort of home or office.

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Net banking means application of electronic technology towards transfer of funds through an electronic terminal, computer or magnetic tape to conduct various transactions like cash receipts, payments, transfer of funds, etc. It is often known as banking on net or e banking.

1.6.1.2 DEVELOPMENT OF NET BANKING IN INDIA The financial reforms that were initiated in the early 1990s and the globalization and liberalization measures brought in a completely new operating environment to the banks. The bankers are now offering innovative and attractive technology-based services and products such as Anywhere Anytime Banking, Tele-Banking, Internet Banking, Web Banking, Net Banking, Mobile Banking, etc. to their customers to cope with the competition. The process started in the early 1980s when Reserve Bank of India (RBI) set up two committees in quick succession to accelerate the pace of automation of operations in the banking sector. A high-level committee was formed under the chairmanship of Dr. C. Rangarajan, then Governor of RBI, to draw up a phased plan for computerization and mechanisation in the banking industry over a five-year time frame of 19851989. The focus by this time was on customer service and two models of branch automation were developed and implemented. Having gained experience in the earlier mode of computerization, the second Rangarajan committee constituted in 1988 drew up a detailed perspective plan for computerization of banks and for extension of automation to other areas such as funds transfer, e-mail, BANKNET, SWIFT, ATMs, net banking, etc. The Government of India enacted the Information Technology Act, 2000 (generally known as IT Act, 2000), with effect from 17 October 2000 to provide legal recognition to electronic transactions and other means of electronic commerce. RBI had set up a Working Group on net banking to examine different aspects of net banking. The Group had focused on three major areas of net banking such as (1) technology and security issues, (2) legal issues and (3) regulatory and supervisory issues.

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RBI had accepted the recommendations of the Working Group, and accordingly issued guidelines on internet banking in India for implementation by banks. The Working Group has also issued a report on net banking covering different aspects of net banking. Internet banking in India is currently at a nascent stage. While there are scores of companies specialising in developing internet banking software, security software and website designing and maintenance, there are few online financial service providers. ICICI bank is the first one to have introduced net banking for a limited range of services such as access to account information, correspondence and, recently, funds transfer between its branches. ICICI is also getting into e-trading, thus offering a broader range of integrated services to the customer. Several finance portals for provision of non-banking financial services, e-trading and ebroking have come up. Commercial applications such as Electronic Bill Presentment (EBP) and Procurement systems may not be introduced in India immediately, but are likely to have a greater impact than the retail applications. The corporate sector is adequately computerized and has already recognized the important role of e-commerce in future. Increasingly, companies are setting up websites even where there are no immediate tangible benefits to them from doing so. 1.6.1.3 NET BANKING IN INDIA RBI GUIDELINES In India, internet banking or net banking is in rudimentary stage. In order to promote safety and soundness of internet banking activities, the RBI constituted a Working Group on Internet Banking. The Group issued guidelines in June 2001. The Group divided the internet banking products in India into 3 types based on the levels of access granted. They are Information Only System Electronic Information Transfer System Fully Electronic Transactional System. 16

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1.6.1.4 ADVANTAGES AND DISADVANTAGES OF NET BANKING Internet Banking also has its advantages and disadvantages. Below are mentioned the most popular advantages of using Internet Banking along with some unavoidable disadvantages. The advantages include Convenience - online banking sites never close; they're available 24 hours a day, seven days a week, and they're only a mouse click away; Portability you now have access to money whenever there is an emergency, whether or not you are in the country; Transaction speed - online bank sites generally execute and confirm transactions at the same rate or quicker than, ATM processing speeds; Effectiveness they offer sophisticated tools, including account aggregation, stock quotes and rate alerts to help you manage all of your assets more effectively. Reduction in workload - No more standing in long lines at the bank, eliminating endless paper based bank statements. The disadvantages include Lack of Computerization - which relates to virtual banks, revolves around the lack of ATMs; 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 which can be time consuming; Learning curve - Banking sites can be difficult to navigate at first; Distrust of the User - the possibility of frauds, making errors etc. Problem of Security Various sites are not properly looked at to ensure whether customers money is safe in cyber world or not.

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1.6.1.5 TRADITIONAL BANKING VS NET BANKING Net banking or internet banking works much like traditional banking. The primary difference is that in net banking account and information is accessed, payments are made and statements reconciled using computer rather than paper or the phone to complete transactions. Instead of going down to local branch office when one bank online he/she can accomplish multiple tasks at once with the click of a button. Online banking is rapidly becoming more and more popular as consumers recognize the advantages online banking has to offer. For one most banks charge fewer fees if you take advantage of their online banking services. You can also stop receiving paper statements if you like in many cases and conduct 95% of your business over the Web when you take advantage of Internet banking. What to Internet Banks do? The same things traditional banks do. They hold onto our money and lend it out to others respectively. The manage loans and help us keep track of our finances. Chances are if you own a bank account at a traditional bank they offer some type of Internet banking or online services. The next time you stop into your branch office you should ask them about online banking. You may find once you start you have no desire to go back to traditional banking. For those that have a hard time keeping track of paper statements, Internet banking is a life saver. Internet banking is also advantageous for frequent travelers that need to keep a close eye on their finances from abroad.

1.6.3 NETBANKING SERVICE AT INDUSIND BANK Net banking is IndusInd Bank's Internet Banking service. It provides up-to-the-second account information. Net banking lets the customer manage his/her account from the comfort of his/her mouse - anytime, anywhere. Net Banking services provides access to 19

account information, products and other services (including transactions of non-financial and financial in nature) as advised by the Bank from time to time to the customers through the website of the Bank. Net Banking Services also include the services for Demat account, Credit Cards and loan on the website of the Bank. The IndusInd Bank web site (www.hdfcbank.com) also features two versions of a demo facility - one "interactive" and the other "guided" - making it possible for even Internet illiterates to get comfortable with its services. On the downside, however, 'registration' for the service involves downloading of a form that needs to be posted/delivered to any of its branches - not exactly "web savvy" as we would call it. Also, the form itself requires Adobe Acrobat Reader to be installed and the file size will exceed 5.5 MB, which translates roughly into an hour or more of on-line time. Its 3-question FAQ page also assumes a high level of computer knowledge from users ... not consistent with the rest of the website. Net Banking service provides a host of features at the finger-tips: View Account Balances & Statements Transfer Funds between accounts Create Fixed Deposits Online Request a Demand Draft Pay Bills Order a Cheque Book Request Stop Payment on a Cheque And lots more.

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1.6.3.1 SERVICES OFFERED UNDER NET BANKING SERVICE PROVIDED BY INDUSIND BANK IndusInd Bank Savings and Current account holders can access their account through Net Banking. Currently, Net Banking service is offered to the IndusInd Bank customers free with all accounts. However, all minimum balance/deposit amount requirements of the relevant accounts will need to be honoured. No separate fee is charged to access this service. Currently, one can do any of the following: Queries Check your Balance See your Statement Inquire about cheque status Ask for a Statement Ask for a Cheque Book Inquire about your Fixed Deposit Inquire about your TDS details See your Demat Account Update your profile View IndusInd Bank Credit card bills View your Mutual funds portfolio Transactions Stop a Cheque Pay your Bills 21

Ask for a Demand Draft Transfer funds between your accounts Transfer funds to a third party Request for a new Fixed Deposit Shop Online Pay IndusInd Bank Credit Card Dues Buy and sell Mutual Funds.

1.6.3.2 SECURITY AND SAFETY OF TRANSACTIONS ON NET BANKING The customer can be assured of complete privacy when you use IndusInd Bank's Net Banking facility. The bank has built several checks to safeguard the Net Banking transactions. Before the user gain access to his/her account, he/she will be asked to enter his/her unique customer ID and IPIN (password) to verify the identity. To maximise the security and confidentiality of the transactions, ones password is not accessible to anyone, not even bank employees. To ensure the security of the transactions, the bank uses a technology called Secured Socket Layer (SSL), which involves scrambling of the information between the customer and the Bank. If an unauthorized user tries to access your account by keying in various combinations while trying to guess your password, your account will automatically get locked. Moreover, when the user log-in to Net Banking, the last date and time of log-in will be displayed so that the user can make sure that nobody has accessed his/her account. In addition to these online security features, have been placed under the supervision of a dedicated team to monitor the access to the web server and to prevent unauthorized access. These features work together to maximise the security of your banking transactions. 22

IndusInd Bank has implemented a new security solution for its customers - secure access as security of the customer is banks top priority, the bank has initiated the secure access solution to protect the customers from fraudsters and hackers. Currently following transactions are covered under secure access Transfer from one IndusInd Bank account to other IndusInd Bank account Transfer from IndusInd Bank account to any other bank's account Visa money transfer Third party demand draft through netbanking.

Internet banking has been exploited by hackers and fraudsters to deceive the bank's customer and commit frauds. While the bank has best-of-the-breed solutions, processes and people deployed to extend secure banking to its customers, it is important for our customers to know that "secUrity is incomplete without u". Customers need to follow secure computing guidelines to avert any frauds or security breaches to their accounts, as keys to the internet banking accounts are held by respective account owners in the form of customer IDs and internet banking passwords (I PIN). Here are some internet banking security tips provided by IndusInd Bank: 1. Keep your customer ID and IPIN confidential and do not disclose it to anybody. 2. Change your IPIN as soon as you receive it by logging into your net banking account. Memorize your IPIN, do not write it down anywhere. 3. Refer "protect your computer accounts with strong passwords" section under computer security tips. 4. Avoid accessing internet banking from shared computer networks such as cyber cafes. 5. Do not click on links in the emails or sites other than www.hdfcbank.com to access your net banking webpage. 6. Always visit the IndusInd Bank's net banking site through IndusInd Bank's home page by typing the bank's website address (www.hdfcbank.com) on to the browser's address bar. Users are encouraged to add the bank's url to favorites or 23

bookmark in the user computer browser. 7. Always verify the authenticity of the bank's net banking webpage by checking its url as "https://netbanking.hdfcbank.com" and the pad lock symbol at the bottom corner of the browser before putting in your customer ID and IPIN. 8. If your customer id and ipin appear automatically on the login page of net banking webpage, you should disable "auto complete" feature on your browser. To disable auto complete feature: a. b. c. d. Open internet explorer, click on tools=> internet options=> content. Click on "auto complete", under "personal information" Uncheck "user names and passwords on forms", click on "clear passwords" Click "ok" 9. Use virtual keyboard feature while logging into your internet banking account. 10. Do cross check your last login information available in net banking upon every login to ascertain your last login and monitor any unauthorized logins. 11. Always type your confidential account information. Do not copy paste it. 12. Monitor your transactions regularly. 13. Use IndusInd Bank's "InstaAlerts" service. 14. Always logout when you exit net banking. Do not directly close the browser.

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CHAPTER 2 REVIEW OF LITERATURE

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REVIEW OF LITERATURE
. A number of researches have been conducted on net banking and its adoption, development and its perils. Due to shortage of time and resources, a review of all the past researches done could not be mentioned in this research project. So, a snapshot of some of the reviews have been presented. Nath et.al (2001) in their study found that in every industry, E-commerce is revolutionizing the way business is conducted. New business models are replacing outdated ones and organizations are rethinking business process designs and customer relationship management strategies. Banks are no exception to this transformation. This study examines bankers' views on providing banking services to customers using the web. Specifically, it addresses issues such as the strategic need for Internet banking, its effect on customer-bank relationships, and customers' experiences in Internet banking. Data collected from 75 banks show that most banks do not yet offer full-fledged Internet banking. However, most have plans to do so. Furthermore, bankers see Internet banking as a strategic opportunity that can reduce transaction costs, enhance customer service, increase the customer base and improve cross-selling opportunities. Also, Internet banking is perceived more favorably by banks that offer it compared to those that do not. Corrocher (2002) in his study examined the drivers of the adoption of the Internet banking, in order to understand its role with respect to the traditional banking activity and to offer a comprehensive picture of the diffusion of such a technology within the sector. In doing so, it analyses the role of firm-specific and non firm-specific (technology, market, environment) characteristics in influencing the decision to adopt the new technological platforms to perform on-line banking transactions within the retail segment of the financial sector. The main purpose of this paper is to investigate the relationship between the Internet banking and the traditional banking activity, in order to understand if these two systems of financial services delivery are perceived as substitutes or complements by the banks.

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Leary (2002) in his study examined how Internet or electronic banking is slowly but surely reviving itself after numerous attempts by various financial institutions and financial intermediaries in the 1970 and 1980s. The standardization in technologies and the public's familiarity with the use of personal computers and the Internet have made the Internet bank or Internet banking site easier, cheaper and more cost effective than ever before. This paper discusses the coming of age of Internet banking, the opportunity for Internet banking and some of the obstacles and procedures that must be followed in order to develop a sound Internet banking presence. Bradley & Stewart (2003) conducted a research in which they studied the factors driving the adoption of internet banking. The financial services environment has been subject to changes on many fronts. Technological change and the advent of the Internet are among the most dramatic and challenging areas of change for the sector. This paper looks at retail banking and its adoption of online banking, in particular the factors driving and inhibiting adoption by banks. An international Delphi study confirms the high level of importance of the Internet for retail banking. By 2011, it is expected that bank adoption of the Internet will be near universal. The key factors that are driving banks to adopt online banking are the adoption by other banks, competitive forces, consumer demand and the availability of technology. Working against adoption are banks' perceptions that the Internet does not offer enhanced ability to deal with customers as well as bank resistance to change, their existing legacy systems and the resources required to adopt. Singh & Malhotra (2004) in their study found that the tremendous advances in technology and the aggressive infusion of information technology had brought in a paradigm shift in banking operations. The purpose of this paper is to help fill significant gaps in knowledge about the Internet banking landscape in India. The paper presents data, drawn from a survey of commercial banks websites, on the number of commercial banks that offer Internet banking and on the products and services they offer. It investigates the profile of commercial banks that offer Internet banking, using univariate statistical analysis, relative to other commercial banks with respect to profitability, cost 27

efficiency, and other characteristics. By the end of first quarter, 2004, differences between Internet and non-Internet banks had begun to emerge in funding, in sources of income and expenditures and in measures of performance. It was also found that the profitability and offering of Internet banking does not have any significant correlation. Laukkanen & Tommi (2007) in their research aimed to compare customer perceived value and value creation between internet and mobile bill paying service. A qualitative in-depth interviewing design was applied in order to ascertain the factors that create value perceptions in fund transfer service via personal computer and mobile phone. The findings suggest that efficiency, convenience and safety are salient in determining the differences in customer value perceptions between internet and mobile banking. The findings of the qualitative study, being more depth than wide in nature, deserve to be quantitatively measured in future studies in order to provide more generalized results. The paper provides enhanced information for business managers about both positive and negative customer value perceptions in internet and mobile banking. By understanding how and what kind of value different service channels provide for customers service providers are better enabled to create actions to enhance internet and mobile banking adoption. The contribution of the paper lies in achieving a more profound understanding on consumer value perceptions to internet and mobile banking. It expands the literature on electronic and mobile commerce and on electronic banking especially. Nandan et.al (2008) in his paper discusses the concept of Internet Banking, perception of Internet bank customers, non-customers and issues of major concern in Internet banking. The state of Internet banking in India has been explored using various concepts like Ebanking continuum, and gap analysis related to the various services and the security features offered. In order to have a clear and focussed insight about the perceptions of users (and non-users) about Internet banking a survey was conducted. The findings of the survey provide valuable insights into concern for security, reasons for lower penetration, and likeliness of adoption, which have been used to make useful recommendations.

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Mishra & Kiranmai (2009) in their study found that information technology is considered as the key driver for the changes taking place around the world. According to Heikki, the transformation from the traditional banking to e-banking has been a 'leap' change. The evolution of e-banking started from the use of Automatic Teller Machines (ATMs) and telephone banking (tele-banking), direct bill payment, electronic fund transfer and the revolutionary online banking. The future of electronic banking would be more interactive i.e., TV banking. Finland is the first country in the world to have taken a lead in e-banking. In India, ICICI Bank initiated e-banking services during 1997 under the brand name 'Infinity'. It has been forecasted that among all categories, online banking is the future of electronic financial transactions. The rise in e-commerce and internet in enhancing online security transformation and sensitive information has been the core reason for the penetration of online banking in everyday life. The shift towards the involvement of the customers in the financial service with the help of technology, especially internet, has helped in reducing costs of financial institutions as well as clients/customers who use the service at anytime and from virtually anywhere with access to an internet connection. Uppal (2009) in his study found that in the post-LPG (Liberalization, Privatization and Globalization) era and Information Technology (IT) era, transformation in Indian banks is taking place with different parameters and the contours of banking services are dynamically altering the face of banking, as banks are stepping towards e-banking from traditional banking. On the basis of five-point likert-type scale, this paper empirically analyzes the quality of e-banking services in the changing environment. With different statistical tools such as weighted average method and ranking, the paper concludes that most of the customers of e-banks are satisfied with the different e-channels and their services, but the lack of awareness is a major obstacle in the spread of e-banking services. The paper also suggests some measures to make e-banking services more effective in the future. Kuisma et.al (2006) conducted a research to identify the reasons for consumer resistance to Internet banking. The special interest is to explore resistance among those bank 29

customers who already have valid contracts for Internet banking but prefer to pay their bills via ATM. The objective is to identify those characteristics generating resistance to Internet banking and their connections to values of individuals. In order to achieve the objective, 30 Finnish bank customers were interviewed in-depth using the means-end approach and the laddering interviewing technique. The findings indicate both functional and psychological barriers arising from service-, channel-, consumerand communication-related means-end chains inhibiting Internet banking adoption. The contribution of the paper lies in achieving a more profound understanding of consumer resistance to Internet banking, and further, in offering suggestions and practical advice for service providers' decision-making. The perusal of review of literature revealed that the internet banking had been studied in relation to various aspects like its adoption, growth, development and expectations of the customers. But no study has been conducted in relation to the Net Banking service provided by IndusInd Bank.

30

CHAPTER 3
NEED, SCOPE AND OBJECTIVES OF THE STUDY

31

NEED, SCOPE AND OBJECTIVES OF THE STUDY

3.1 NEED OF THE STUDY After conducting a review of researches done by various professionals a gap have been identified. The researchers had studied the aspects of internet banking, its introduction, its development, adoption by the customers, consumers perception about this service, its success and security related issues. But a very few researchers had studied the net banking service with respect to the IndusInd Bank. This gap had been identified and it had led to the present research being undertaken. 3.2 SCOPE OF THE STUDY The area where the study has been conducted was Ludhiana. 3.3 OBJECTIVES OF THE STUDY The current study was undertaken to achieve the following stated objectives: 1. 2. 3. 4. 5. To analyze awareness among customers using Net banking service. To know about the Net Banking service provided by IndusInd Bank. To know the cause why customers are using or not using Net banking service. To the confidence of the customers of IndusInd Bank in using these services. To study the popularity of the Net banking service among the customers of HDFC Bank.

32

CHAPTER 4
RESEARCH METHODOLOGY

33

RESEARCH METHODOLOGY
Research is a common parlance which refers to search for knowledge. It is a procedure of logical and systematic application of the fundamentals of science to the general and overall questions of a study and scientific technique, which provide precise tools, specific procedures, and technical rather philosophical means for getting and ordering the data prior to their logical analysis and manipulating different type of research designs is available depending upon the nature of research project, availability of manpower and circumstances. According to D. Slesinger and M. Stephenson research may be defined as the

manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in the construction of theory or in the practice of an art. Thus it is original contribution to the existing stock of knowledge of making for its advancement. In short, the search of knowledge through objective and systematic method of finding solution to a problem is research.

4.1 RESEARCH DESIGN A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. In fact, the research design is the conceptual structure within which research is conducted. This research was descriptive in nature. Descriptive research: The research undertaken was a descriptive research as it was concerned with specific predictions, with narration of facts and characteristics concerning net banking service provided by IndusInd Bank.

34

4.2. SAMPLING DESIGN The following factors have been decided within the scope of sample design: 4.2.1 Universe of study: Universe of the study means all the persons who are the customers of IndusInd Bank in the world. Theoretical: It covered all the individuals who are the customers of IndusInd

Bank in the world. Accessible: It covered all the individuals who are the customers of IndusInd

Bank in India who are within our reach. In this study accessible population was customers of IndusInd Bank in India. 4.2.2 Sample Size: A sample of minimum respondents was selected from various areas of Ludhiana. An effort was made to select respondents evenly. The survey was carried out on 100 respondents. 4.2.3 Sample Unit: In this project sampling unit consisted of the various individuals who had their bank accounts with IndusInd Bank. 4.2.4 Sampling Technique: For the purpose of research convenient sampling techinque was used.
4.2.5 Sampling Frame: It consisted of various sources from where information about

the respondent is extracted. Mainly personal links and employees of IndusInd Bank, Ludhiana are used for getting information about the respondents.

4.3 DATA COLLECTION AND ANALYSIS 4.3.1 DATA COLLECTION There were two types of data sources used in this research. These were

35

4.3.1.1. Secondary data Secondary data is the data collected from already been use or published information like journals, diaries, books, etc .In this research project, secondary source used were various journals, and website of various online journals. 4.3.1.2. Primary data Primary data is the data collected for the first time from the source and never have been used earlier. The data can be collected through interviews, observations and questionnaires. In this project, an appropriate questionnaire was designed which was filled by the customers of IndusInd Bank to know their opinions regarding the Net Banking service provided by IndusInd Bank. 4.3.2 DATA ANALYSIS 4.3.2.1 Tools Of Presentation: It means what all tools are used to present the data in a meaningful way so that it becomes easily understandable. In this research tables and graphs were used for presenting the data. 4.3.2.2 Tools Of Analysis In this research the tools of analysis used were percentages. SPSS software were used to conduct Friedman Anova, Reliability analysis and Factor Analysis. 4.4 LIMITATIONS OF THE STUDY The following were the limitations of the study: 1. Non representative sample: In this research project a sample survey was conducted. A sample of 100 respondents was selected. So such sample size cannot be said to be the true representative of the universe.

36

2. Shortage of time: The time period of study was very limited. It is very difficult to have in detail study on project work due to limited time period. The period of 4 to 6 weeks is not enough for the proper study of the project. 3. Inadequate data: The data provided was not up to the mark due to which we faced problems in our research. 4. Lack of scientific method: The lack of scientific training in methodology of research was great impediment in our research program, which led to the delay of research. 5. Biasness in the responses: The answers provided by the respondents suffer from biasness. 6. Cost Factor: It was not possible to conduct extensive research due to paucity of funds.

37

CHAPTER 5
DATA ANALYSIS AND INTERPRETATION

38

DATA ANALYSIS AND INTERPRETATION

Statement 5.a Demographic Profile Of The Respondents Table 5.a Demographic Profile of the Respondents

39

Demographics

Number of Respondents

Percentage Of Respondents

Age: Below 20 yrs 20 35 yrs 35 50 yrs 50 65 yrs 65 yrs and above TOTAL Qualification: Undergraduate Graduate Post Graduate TOTAL Occupation: Businessman Housewife Self Employed Service Student Professional TOTAL Annual Income: Less than Rs 2 Lakhs Rs. 2 6 Lakhs Rs. 6 10 Lakhs Rs. 10 15 Lakhs Rs. 15 20 Lakhs Rs. 20 Lakhs and above TOTAL 1 33 40 17 9 100 5 65 30 100 32 7 17 27 4 13 100 12 27 39 17 5 0 100 1% 33 % 40 % 17 % 9% 100 % 5% 65 % 30 % 100 % 32 % 7% 17 % 27 % 4% 13 % 100 % 12 % 27 % 39 % 17 % 5% 0% 100 %

40

Analysis and interpretation: From the data collected it was found majority of respondents that is 40% belonged to the age of 35 to 50 years, followed by the age group of 20 to 35 years. It was found that the majority of the respondents were graduates. It was found that the majority of the respondents were from the business class followed by the service class and self employed people. It was found that the majority of the respondents fell between the income group of Rs 6 to Rs 10 lakhs, followed by income group between Rs 2 to Rs 6 lakhs. Thus it can be concluded that the majority of the respondents were knowledgeable and were well informed about the banking services.

Statement 1: Time period since the IndusInd Banks services are being availed 41

Table 5.1 Time period since the IndusInd Banks services are being availed Time Period Less Than 2 years 2 5 years 5 10 years More Than 10 years Total 9 18 31 42 100 Number of respondents 9% 18 % 31 % 42 % 100 % Percentage of respondents

Figure 5.1 Time period since the IndusInd Banks services are being availed

Analysis and interpretation: From the data collected, it can be that the majority of the respondents that is 42% of the respondents have been IndusInd Banks customer for more than 10 years, followed by 5 to 10 years with 31% of respondents. It can be concluded that the majority of the respondents have been IndusInd Banks customer for more than 10 years. Statement 2: Products and services of IndusInd Bank availed by the customers

42

Table 5.2: Products and services of IndusInd Bank availed by the customers Products and services Loans Deposit Accounts Credit Cards Debit Cards Forex Services ATM Number of respondents 49 63 27 19 22 24 Percentage of respondents 22.58 % 29.03 % 12.44 % 8.75 % 10.13 % 11.05 %

NRI Services 13 6.00 % Total 217* 100 % Figure 5.2: Products and services of IndusInd Bank availed by the customers

Analysis and interpretation It was found that majority of the respondents that is 29% availed deposit accounts, followed by loans, credit cards, ATMs and forex services with 23%, 12%, 11% and 10% respectively. It can be inferred that that majority of the respondents availed the deposit accounts among the various products and services offered by the IndusInd Bank. * The total is more than sample size because of multiple responses. Statement 3: Perception about the products and services offered by IndusInd Bank

43

Table 5.3: Perception about the products and services offered by IndusInd Bank Perception Lucrative Non lucrative Cant say Total Number of respondents 80 5 15 100 Percentage of respondents 80 % 5% 15 % 100 %

Figure 5.3: Perception about the products and services offered by IndusInd Bank

Analysis and interpretation From the data collected, it was found that the majority of the respondents that is 85% said that the products and services offered by IndusInd Bank were lucrative. While just 5% of the respondents said that the products and services offered were non lucrative and the remaining 15% were not able form any opinion. It can be inferred that the majority of the felt that the products and services offered by IndusInd Bank were lucrative.

Statement 4: Ways to access to IndusInd Bank Table 5.4: Ways to access to IndusInd Bank

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Ways Net Banking Phone Banking One View ATM Branch Network Email Statement Insta Alert Total

Number of Respondents 53 28 7 29 76 34

Percentage of Respondents 23.05 % 12.18 % 3.05 % 12.60 % 33.04 % 14.78 % 1.30 % 100 %

3 230* Table 5.4: Ways to access to IndusInd Bank

Analysis and interpretation: It was found from the data collected that 33% of the respondents accessed the bank through Branch network. About 23% of the respondents accessed the bank through net banking followed by email statements with about 15%. Marginally 1% and 3% of the respondents used insta alert and one view to access the bank. It was inferred that majority of the respondents accessed the bank through branch network. * The total is more than sample size because of multiple responses. Statement 5: Awareness regarding Net Banking Service provided by IndusInd Bank Table 5.5: Awareness regarding Net Banking Service provided by IndusInd Bank 45

Awareness Yes No Total

Number of respondents 96 4 100

Percentage of respondents 96 % 4% 100 %

Table 5.5: Awareness regarding Net Banking Service provided by IndusInd Bank

Analysis and interpretation: From the data collected it was found that majority of the respondents that is 96% were aware of the net banking service provided by IndusInd Bank while just 4% of the respondents were not aware of the same service. It was concluded that majority of the respondents of the respondents were aware of the net banking service.

Statement 6: Accessibility of Net Banking Facility provided by IndusInd Bank Table 5.6: Accessibility of Net Banking Facility provided by IndusInd Bank Accessibility Yes Number of respondents 81 46 Percentage of respondents 81 %

No Total

19 100

19 % 100 %

Figure 5.6: Accessibility of Net Banking Facility provided by IndusInd Bank

Analysis and interpretation: Of the data collected it was found that about 81% of the respondents had accessed the net banking service provided by the IndusInd Bank while 19% of the respondents said that they had not accessed the same. It can be inferred that the majority of the respondents had availed the net banking service.

Statement 7: Net Banking services of IndusInd Bank availed Table 5.7: Net Banking services of IndusInd Bank availed Services View accounts balances & statements Transfer funds between accounts 47 Number of respondents 44 32 Percentage of respondents 30.39 % 22.07 %

Create Fixed Deposit online Request a demand draft Pay bills Order a cheque book

8 5 29 16

5.51 % 3.44 % 20.00 % 11.03 %

Request stop payment on a cheque 11 7.56 % Total 145* 100 % Figure 5.7: Net Banking services of IndusInd Bank availed

Analysis and interpretation: It was found that the majority of the respondents that is 30% of the respondents used the net banking service for viewing accounts and balances, followed by 22% and 20% of the respondents who availed the same for transferring the funds between accounts and for paying the bills respectively. Marginally 3% of the respondents used the same service to request a demand draft. It can be inferred that the majority of the respondents used the net banking service provided by IndusInd Bank to view their accounts and balances. * The total is more than sample size because of multiple responses. Statement 8: Reasons for which Net Banking service should be availed Table 5.8: Reasons for which Net Banking service should be availed

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Reasons Convenience Curiosity Low cost Quick service Maintenance Safety

Mean Rank 3.12 5.07 4.41 3.33 3.46 4.48

Ranks 1 7 5 2 3 6 4

User friendly 4.13 1 being the most important and 7 being the least important Analysis and interpretation:

Scores are significantly different on The Friedman two way ANOVA test (p<0.001) for the listed 7 reasons due to which Net Banking service should be availed. The first rank being the most important was given to convenience and the last rank that is 7 was given to curiosity. It can be concluded that majority of the respondents regarded convenience as the most important reason for which Net Banking service should be availed and curiosity as the least important reason for the same.

Statement 9: Frequency of using the Net Banking service in a month Table 5.9: Frequency of using the Net Banking service in a month 49

Frequency Less than once 1 to 3 times 3 to 8 times 8 to 15 times More than 15 times Total

Number of respondents 28 39 10 4 0 81

Percentage of respondents 34.56 % 48.14 % 12.34 % 4.96 % 0% 100 %

Figure 5.9: Frequency of using the Net Banking service in a month

Analysis and interpretation: It was found that the majority of the respondents that is 48 % used the Net Banking service one to three times in a month while 35 % said that they used the same service less than once in a month. None of the respondents said that they availed the same facility more than 15 times in a month. It can be inferred that the majority of the respondents availed the Net Banking service one to three times in a month. Statement 10 : Difficulties faced while using the Net Banking service of IndusInd Bank Table 5.10 : Difficulties faced while using the Net Banking service of IndusInd Bank Difficulties Number of respondents 50 Percentage of respondents

Logging in to your account Making transactions Safety issues Unable to understand webpages

9 27 32 6

11.11 % 33.33 % 39.50 % 7.40 %

Regularly changing the IPIN and Password 7 8.64 % Total 81 100 % Figure 5.10 : Difficulties faced while using the Net Banking service of IndusInd Bank

Analysis and interpretation: It was found that the majority of the respondents that is 40% said that safety issues was the major difficulty that they faced while using the Net Banking service, followed by 34% of the respondents who felt that making transactions with the bank through Net Banking was difficult. However, 8% of the respondents faced difficulty in understanding the webpages and 7% of the respondents felt that changing the IPIN and Password regularly was difficult. It was inferred that the majority of the respondents regarded the safety issues as the major difficulty that they faced while using the Net Banking service. Statement 11: Frequency of visiting the IndusInd Bank branch Table 5.11: Frequency of visiting the IndusInd Bank branch Frequency Everyday Alternate days 51 Number of respondents 21 26 Percentage of respondents 21 % 26 %

Once in a week Twice in a month Thrice in a month Twice in a week

18 9 5 14

18 % 9% 5% 14 %

Once in a week 7 7% Total 100 100 % Figure 5.11 Frequency of visiting the IndusInd Bank branch

Analysis and interpretation: It was found that the majority of the respondents that is 26% said that they visited the bank branch every alternate day, followed by 21% of the respondents who visited the bank everyday. Only 5% of the respondents visited the bank branch thrice in a month. It can be inferred that the majority of the respondents said that they visited the bank branch every alternate day.

Statement 12: The main reason for which the bank branch is typically visited Table 5.12: The main reason for which the bank branch is typically visited Reasons To make a deposit To get a advice for investment purpose 52 Number of respondents 31 13 Percentage of respondents 31 % 13 %

To inquire about a balance To withdraw a cheque To order a cheque book

7 23 15

7% 23 % 15 %

To transfer funds between accounts 11 11 % Total 100 100 % Figure 5.12: The main reason for which the bank branch is typically visited

Analysis and interpretation: It was found that the majority of the respondents that is 31% said that the main reason of visiting the bank is to make a deposit, followed by 23% who said that they visited the bank branch typically to withdraw a cheque. Of the total only 7% and 11% of the respondents visited the bank to inquire about a balance and to transfer funds between accounts respectively. It can be inferred that the majority of the respondents said that the main reason of visiting the bank is to make a deposit. Statement 13: Agreement regarding Net Banking service being better than traditional banking Table 5.13: Agreement regarding Net Banking service being better than traditional banking Agreement Number of respondents 53 Percentage of respondents

Yes No Total

64 36 100

64 % 36 % 100 %

Figure 5.13: Agreement regarding Net Banking service being better than traditional banking

Analysis and interpretation: Of the data collected it was found that the majority of the respondents that is 64% respondents agreed that net banking is better than the traditional banking while 36% of the respondents disagreed with the statement. It can be inferred that the majority of the respondents felt that the net banking service was better than traditional banking. Statement 14: Reasons due which Net Banking service is not popularly used Table 5.14: Reasons due which Net Banking service is not popularly used

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Reasons

Mean Rank

Rank 5 6 4 2 7 1 3

Net banking web pages are confusing 4.40 Use of computer or internet is difficult 4.53 Neither friends nor relatives use internet 4.03 Net banking facility is not secured 3.43 It is more expensive than going to a branch 4.76 Net banking offers no receipts on payments 3.28 Net banking is not reliable 3.57 1 being the most important and 7 being the least important Analysis and interpretation:

Scores are significantly different on The Friedman two way ANOVA test (p<0.001) for the listed 7 reasons due to which Net Banking service is not popularly being used. The Net banking offers no receipts on payments was ranked first that is the most important reason while it is more expensive than going to a branch was given the last rank that is seven. It can be concluded that the majority of the respondents regarded that the most important reason for which Net Banking service is not being used popularly was that it does not offer receipts on payments and the least important reason was that it is more expensive than going to a branch.

Statement 15: Raters agreement Reliability Statistics Table 5.20.1: Cronbach's Alpha

55

Cronbach's Alpha 0.716

N of items 10

Table 5.20.2: KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Sphericity Approx. Chi-Square Df Sig. .725 248.386 45 .000

Table 5.15.3: Total Variance Explained Component 1 2 3 4 5 6 7 8 9 10 Initial Eigenvalues Total 3.116 1.723 1.080 .992 .783 .686 .525 .465 .369 .262 % of Variance 31.157 17.226 10.798 9.922 7.827 6.859 5.254 4.648 3.690 2.619 Cumulative % 31.157 48.382 59.181 69.103 76.930 83.788 89.043 93.691 97.381 100.000

Table 5.15.4: Component Matrix

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1 Convenience Safety Functionality Necessity Language Physical Access Trans_costs Service Safety_feature
Extraction Method: Principal Component Analysis. a. 3 components extracted.

COMPONENT 2 .822 -.294 .748 -.369 .685 .781 -.193 .461 .383 .396 .499 .556 -.061 .190 .345 .207 .677 .210 .695

3 .050 -.069 -.375 -.207 -.163 .467 .649 .219 -.419

Table 5.15.5: Rotated Component Matrix COMPONENT 1 Convenience Safety Functionality Necessity Language Physical Access Trans_costs Service Safety_feature -.085
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

2 .836 .826 .712 .820 .302 .054 .371 -.079 -.100 .317 .123 .509 .280 -.241 .226 .823 .622

3 .242 .086 -.065 .050 .188 .737 .734 .390 .366

Table 5.14.6: Factor Analysis

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Variables Convenience

Statements Net Banking is easy and convenient to use. Transactions conducted through Net Banking are safe and secure. The web pages function properly. Net Banking service is a necessity. The website pages are available in the languages you understand. Net Banking facility reduces

Factor Loadings .836

Safety

.826

Functionality Necessity

.712 .820

Language

.509

Physical

the frequency of customers visit to a physical bank. Access to accounts 24x7 is important to you. The transaction costs are lesser in case of Net Banking service. Net Banking service provided by IndusInd Bank is better than the online services provided by others banks. IndusInd Bank is taking

.737

Access Trans_costs

.734 .390

Service

.823

Safety_feature

adequate steps to check the security of its customers.

.622

Table 5.15.7 Service Quality Factor Label Statements Factor Loadings

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Net Banking is easy and convenient to use. Transactions conducted through Net Banking are safe and secure. Service Quality The web pages function properly. Net Banking service is a necessity.

.836

.826

.712

.820

Table 5.15.8: Adequate Mechanism Factor Label Statements The website pages are available in the languages you understand. Net Banking service provided by IndusInd Bank is better than the Adequate Mechanism online services provided by others banks. IndusInd Bank is taking adequate steps to check the security of its customers. .622 .823 Factor Loadings .509

Table 5.15.9 Accessibility Factor Label Accessibility Statements Net Banking facility 59 Factor Loadings .737

reduces the frequency of customers visit to a physical bank. Access to accounts 24x7 is important to you. The transaction costs are lesser in case of Net Banking service. Analysis and interpretation: The factor analytic methodology had been used to analyze the net banking service based on responses received from the 100 respondents to the survey questionnaire. The cache of factor analytic methods is quite a rich and rigorous one. The Principal Components Analysis (PCA) had been used to explore and confirm the inter-relatedness between the occurrences of variables pertaining to net banking. The correlation matrix of the ten variables on net banking had been subjected to the PCA. It provided a set of components, which explained variances in descending order of total variance of a set of variables pertaining to a domain of variables under study. Theoretically, it extracted as many components as is the number of variables. The number of principal components to be retained has been decided based on Kaisers criterion of Eigen value>1 and Bartletts test. The Bartletts test of significance led to acceptance of ten significant principal components. The PCA with varimax rotation method has been used to maximize the sum of squared loading of each factor extracted in turn. It explained more variance than the loadings obtained from any other method of factoring. The factors loaded by variables having significant loadings of the magnitude of 0.40 and above have been interpreted. The scales of measurement were tested using Cronbach reliability test. Cronbach was 0.5, which is satisfactory level of construct validity. The correlations between the factors 60

.734

.390

were then examined which revealed the existence of correlation between certain factors. This perusal suggested the use of factor analysis to investigate any distinct underlying factors and to reduce the redundancy of certain barriers indicated in the correlation matrices. Principal Component Analysis was chosen as the method of extraction in order to account for maximum variance in the data using minimum number of factors. The default solution (eigen values>1) resulted in extraction of four factors. The factor 1 variables, convenience, safety, functionality, necessity are labeled as Service Quality. Factor 2 was named as Adequate Mechanism including: language, service and safety feature variables. Factor 3 was named as Usability including physical, access and trans cost.

61

CHAPTER 5
FINDINGS OF THE STUDY

62

FINDINGS OF THE STUDY

The findings of the study were as follows: 1. The majority of the respondents have been IndusInd Banks customer for more than 10 years. 2. The majority of the respondents availed the deposit accounts among the various products and services offered by the IndusInd Bank. 3. The majority of the felt that the products and services offered by IndusInd Bank were lucrative. 4. The majority of the respondents accessed the bank through branch network. 5. The majority of the respondents of the respondents were aware of the net banking service. 6. The majority of the respondents have availed the net banking service. 7. The majority of the respondents used the net banking service provided by IndusInd Bank to view their accounts and balances. 8. The majority of the respondents regarded convenience as the most important reason for which Net Banking service should be availed and curiosity as the least important reason for the same. 9. The majority of the respondents availed the Net Banking service one to three times in a month. 10. The majority of the respondents faced the safety issues was the major difficulty that they faced while using the Net Banking service. 11. The majority of the respondents said that they visited the bank branch every alternate day. 12. The majority of the respondents said that the main reason of visiting the bank is to make a deposit. 13. The majority of the respondents felt that the net banking service was better than traditional banking. 14. The majority of the respondents regarded that the most important reason for which Net Banking service is not being used popularly was that it does not offer

63

receipts on payments and the least important reason was that it is more expensive than going to a branch. 15. The majority of the respondents agreed that net banking is convenient and safe to use and felt that transaction costs are lesser in case of net banking service. While majority of the respondents disagreed that net banking facility reduces the frequency of customer visits to a physical bank.

64

CHAPTER 7
CONCLUSION

65

CONCLUSION
7.1 CONCLUSION The introduction of new technology has been changing the attire of banking. The brick and mortar banking is slowly giving place to click of the mouse banking. Technology is aiding globalization and integration of financial markets across the globe. Customers expectations for new products and alternatives delivery channels have been rising. Banks are under pressure to offer today, what customers would be expecting tomorrow. Thanks to innovations and spread of new technology, banks today offer the customer a choice to conduct his business across the counter, over phone or via a computer. The Rangarajan Committee (1988) report is the first step for the introduction of computers. The Saraf Committee (1994) on Technology issues relating to payments, cheques clearing and securities settlements made several recommendations to improve the quality of service. The introduction of new instruments such as ATM, retail Electronic Funds Transfer (EFT) and Electronic Clearing Services (ECS) have all helped in developing an effective, efficient and speedy payment and settlement systems. In literature, the major emphasis have laid on significant innovation and investment is under way that could lead to very rapid expansion in fully electronic business to business and consumer to consumer payments in near time. While the pace of change in these market makes it difficult to determine, eventually these innovations will generate substantial effeciencies in retail payment system. Bank regulators are paying significant attention to appropriate risk management of new technology. Evidence reveals a sense of urgency about the adoption of new technology and reflects substantial competitive pressure to act quickly. The objective of the study was to study was to comprehend the Net Banking service provided by IndusInd Bank. The research was descriptive in nature. The universe of the study was the customers of the IndusInd Bank. The survey was carried out on 100 respondents. In this research for data analysis tools used were tables and graphs. Majority 66

of the respondents were aware of the Net Banking service provided by the bank and availed the various services offered through net banking. Majority of the respondents felt that net banking facility have enabled the customers to perform various banking transactions online. It is hoped that the survey findings will have some useful applications. 7.2 RECOMMENDATIONS Following are the recommendations of the study: 1. The bank should make some efforts to familiarize the customers to various services through demonstrations. 2. The bank should adopt more upgraded techniques to make their customer feel more secure while accessing their accounts. 3. Effective awareness campaigns should be undertaken by the banks to make their customers more aware of net banking service. 4. The bank should make a effort to provide a platform from where the customers can access different accounts at single time without extra charge. 5. The bank should take steps to create a trust in mind of customers towards security of their accounts. 6. The IndusInd Bank should introduce more services which can be accessed through Net Banking like advice on investment, TDS, etc.

67