DISSERTATION PROJECT REPORT-2014

Submitted in partial fulfillment for the award of Degree of

MASTER OF BUSINESS ADMINISTRATION

Services Provided By the Bank Through E-Banking in India

Under the supervision o Universit! "uide# $r%&'(i(uddiin

Assist'nt Pro essor

Su()itted *!# Ar' 't A+i

$*A , in'n-e. /in'+ !e'r Ro++ nu)(er# 1200122010 /ACU1T2 O/ $ANA3E$ENT AND RESEARC&

INTE3RA1 UNI4ERSIT25 1UC6NO7 2014

A Thesis on
Services

provided by the bank through

E-BANKING IN INDIA
Submitted by ARAFAT A I Enro!!" #o" $%&&$%%&$' I#TE(RA )#I*ERSIT+ ),-#./"

A re0ort submitted in 0artia! 1u!1i!!ment o1 The re2uirements o1 T3E 4BA PR.(RA4 5The ,!ass o1 %&$67

Acknowledgement
I would like to e press !y gratitude to all those who gave !e the possibility to co!plete this pro"ect# I would like e press !y guide Mr. AFTAB ALAM, $#%#D depart!ent o& 'ange!ent and (eseach) Integral *niversity a! also thank&ul to !y &aculty guide Mr. HABIBUDDIN to continuous guidance# In the end) I e press our gratitude to !y &riend who inspired !e in this work without their inspirations the work were al!ost i!possible#

Signature Ara&at Ali +,--+,,-+.

Executive summary
The pro8e-t Report on# Services provided by the bank through E-BANKING IN INDIA Pro8e-t -'rried 't#
SBI and I!I!I

Pro8e-t o(8e-tives# /ind the custo!er satis&action relating to E-banking service# 0o study the awareness o& internet banking a!ong the custo!ers o& I1I1I and $D/1 banks# Rese'r-h $ethodo+o"!# Primary Data: In this research with a sa!ple si2e o& nearly ,- custo!er3s data will be available in &or! o& 4uestionnaire collected in ter!s o& di&&erent 4uestions in&luencing the use o& internet banking# Internet banking is considered as dependent on awareness a!ong custo!ers which will be studied with help o& di&&erent independent variable# %nly the custo!ers o& $D/1 5 I1I1I bank are taken as sa!ples &or study# Secondary data: 1ollection o& in&or!ation &ro! di&&erent kind o& books the data o& the co!pany what they !aintained#
4

Conclusion
0he basic ob"ective o& !y research was to analy2e the awareness a!ong custo!ers &or internet banking in INDIA# It gives direction to research tools) research types and techni4ues# Although the &indings reveal that people know about the services but still !any people are unaware and !any o& the! are non 6 users so the bank should by pro!otion try to retain the custo!ers# Banks should look &orward to have so!e tie 6 ups with other &inancial institutions to increase the service base#

Declaration
I a! Arafat Ali this pro"ect report is !y original work and have not been sub!itted in any &or! as a part o& any other pro"ect# In&or!ation derived &ro! the published and unpublished work o& other has been acknowledge!ent in the list re&erences in given in the bibliography#

Ara&at Ali +,--+,,-+.

CERTIFICATE
0his is to certi&y that the 'anage!ent 0hesis titled7 Services provide by the ba !s thro"#h $%ba !i # i INDIA&sub!itted By Arafat Ali Enroll No8 '())'(()'* During se!ester +th o& the 'BA 9rogra! :0he 1lass o& ,-+;< e!bodies original work done by hi! = her#

Signature o& the /aculty Supervisor ---------------------------Na!e :in 1apitals< Designation 1a!pus > 'r# $abibuddin > /aculty Guide ### Integral *niversity) ?ucknow

Table Contents
,ha0ter $8 Introduction999999999999999999999:-$' ,ha0ter %8 .bservation o1 study99999999999999999"$6-$; ,ha0ter '8 iterature Revie< 99999999999999999"9$:-%' ,ha0ter 68 Research 4ethodo!ogy9999999999999999"%6-'= ,ha0ter 6"$8 .b>ectives o1 study999999999999999999"%? ,ha0ter 6"%8 imitations o1 study99999999999999999""%? ,ha0ter ?8 Ty0e o1 study99999999999999999999%=-%; ,ha0ter =8 @ata ana!ysis99999999999999999999%:-'A ,ha0ter A8 Findings99999999999999999999999'; ,ha0ter ;8 Suggestion9999999999999999999999': ,ha0ter :8 ,onc!usions999999999999999999999"6& Bib!ogra0hy999999999999999999999"6$ A00endiB8 Cuestionnaire9999999999999999999""6%-6'

Introduction
E"ban#ing$"
Internet banking :or E-banking< !eans any user with a personal co!puter and a browser can get connected to his bank -s website to per&or! any o& the virtual banking &unctions# In internet banking syste! the bank has a centrali2ed database that is web-enabled# All the services that the bank has per!itted on the internet are displayed in !enu# Any service can be selected and &urther interaction is dictated by the nature o& service# %nce the branch o&&ices o& bank are interconnected through terrestrial or satellite links) there would be no physical identity &or any branch# It would a borderless entity per!itting anyti!e) anywhere and anyhow banking# 0he delivery channels include direct dialup connections) private networks) public networks) etc# with the popularity o& co!puters) easy access to Internet and @orld @ide @eb :@@@<) Internet is increasingly used by banks as a channel &or receiving instructions and delivering their products and services to their custo!ers# 0his &or! o& banking is generally re&erred to as Internet Banking) although the range o& products and services o&&ered by di&&erent banks vary widely both in their content and sophistication#

Meaning of E"Ban#ing
E-bank is the electronic bank that provides the &inancial service &or the individual client by !eans o& Internet#

Need of study
9

 0o know the custo!ers perception toward the E-banking service# I a! interested in E-BANKING that I a! taken this topic#

10

Benefits of study
+< %rgani2ing Educational 1a!paign 0o 1reate Goodwill %& 1o!pany#

,< Services It E&&ectively valuable to 1reate 9lace in the 'inds o& 1usto!er#

.< Availability should be increased by using various services Strategy#

;< 1o!pany should !ake service e4ual to or better than 1o!petitive Brands By All 'eans#

11

Interim Report

12

!hapter %

Introduction
E"ban#ing$"
Internet banking :or E-banking< !eans any user with a personal co!puter and a browser can get connected to his bank -s website to per&or! any o& the virtual banking &unctions# In internet banking syste! the bank has a centrali2ed database that is web-enabled# All the services that the bank has per!itted on the internet are displayed in !enu# Any service can be selected and &urther interaction is dictated by the nature o& service# %nce the branch o&&ices o& bank are interconnected through terrestrial or satellite links) there would be no physical identity &or any branch# It would a borderless entity per!itting anyti!e) anywhere and anyhow banking# 0he delivery channels include direct dialup connections) private networks) public networks) etc# with the popularity o& co!puters) easy access to Internet and @orld @ide @eb :@@@<) Internet is increasingly used by banks as a channel &or receiving instructions and delivering their products and services to their custo!ers# 0his &or! o& banking is generally re&erred to as Internet Banking) although the range o& products and services o&&ered by di&&erent banks vary widely both in their content and sophistication#

Meaning of E"Ban#ing
13

E-bank is the electronic bank that provides the &inancial service &or the individual client by !eans o& Internet#

14

!hapter &

Observation of study
DEFINITION OF E"BAN'IN(

/or this booklet) e-banking is de&ined as the auto!ated delivery o& new and traditional banking products and services directly to custo!ers through electronic) interactive co!!unication channels# E-banking includes the syste!s that enable &inancial institution custo!ers) individuals or businesses) to access accounts) transact business) or obtain in&or!ation on &inancial products and services through a public or private network) including the Internet# 1usto!ers access e-banking services using an intelligent electronic device) such as a personal co!puter :91<) personal digital assistant :9DA<) auto!ated teller !achine :A0'<) kiosk) or 0ouch 0one telephone# @hile the risks and controls are si!ilar &or the various ebanking access channels) this booklet &ocuses speci&ically on Internet-based services due to the Internet3s widely accessible public network# Accordingly) this booklet begins with a discussion o& the two pri!ary types o& Internet websites8 in&or!ational and transactional#

E"BAN'IN( SU))ORT SER*I!ES

WEBLINKING A large nu!ber o& &inancial institutions !aintains sites on the @orld @ide @eb# So!e websites are strictly in&or!ational) while others also o&&er custo!ers the ability to per&or! &inancial transactions) such as paying bills or trans&erring &unds between accounts# WIRELESS E-BANKING @ireless banking is a delivery channel that can e tend the reach and enhance the convenience o& Internet banking products and services# @ireless banking occurs when custo!ers access a &inancial institutionAs network:s< using cellular phones) pagers) and personal digital assistants :or si!ilar devices< through
15

teleco!!unication co!panies3 wireless networks# @ireless banking services in the *nited States typically supple!ent a &inancial institutionAs e-banking products and services. Person-to-Person Payments Electronic person-to-person pay!ents) also known as e-!ail !oney) per!it consu!ers to send B!oney7 to any person or business with an e-!ail address# *nder this scenario) a consu!er electronically instructs the person-to-person pay!ent service to trans&er &unds to another individual# 0he pay!ent service then sends an e-!ail noti&ying the individual that the &unds are available and in&or!s hi! or her o& the !ethods available to access the &unds including re4uesting a check) trans&erring the &unds to an account at an insured &inancial institution) or retrans!itting the &unds to so!eone else# 9erson-to-person pay!ents are typically &unded by credit card charges trans&er &ro! the consu!er3s account at a &inancial institution# Since neither the payee nor the payer in the transaction has to have an account with the pay!ent service) such services !ay be o&&ered by an insured &inancial institution) but are &re4uently o&&ered by other businesses as well# Banking Services through Internet: +# 0he Basic ?evel Service is the banks3 web sites which disse!inate in&or!ation on di&&erent products and services o&&ered to custo!ers and !e!bers o& public in general# It !ay receive and reply to custo!er3s 4ueries through e-!ailC ,# In the ne t level are Si!ple 0ransactional @eb sites which allows custo!ers to sub!it their instructions) applications &or di&&erent services) 4ueries in their account balances) etc# but do not per!it any &und-based transactions on their accountsC

.# 0he third level o& Internet banking service are o&&ered by /ully 0ransactional @eb sites which allow the custo!ers to operate on their
16

accounts &or trans&er o& &unds) pay!ent o& di&&erent bills) subscribing to other products o& the bank and to transact purchase and sale o& securities) etc# 0he above &or!s o& Internet banking service the custo!er or by new banks) who deliver banking service pri!arily through Internet or other electronic delivery channels as the value added services# So!e o& these banks are known as DEirtual3 banks or DInternet only3 banks and !ay not have physical presence in a country despite o&&ering di&&erent banking services# The Indian Scenario: Internet banking) both as a !ediu! o& delivery o& banking services and as a strategic tool &or business develop!ent#

F At present) the total internet users in the country are esti!ated at G lakh# $owever) this is e pected to grow e ponentially to G- lakh by ,--.# %nly about + percent o& Internet users did banking online in +GGH# 0his is increased to +I#J percent in 'arch ,---# - :India (esearch) 'ay ,G) ,---) Kotak Securities< F 1ost o& banking service through the Internet &ro! a &raction o& costs through conventional !ethods# (ough esti!ates assu!e teller cost at (e#+ per transaction) A0' transaction cost at ;K paise) phone banking at .K paise) debit cards at ,- paise and Internet banking at +- paise per transaction.

Plastic Cards as Media for Payment: -

0here are &our types o& plastic cards being used as !edia &or !aking pay!ents# 0hese are8
+# 1redit 1ard ,# Debit 1ard
17

.# S!art 1ard ;# A0' 1ard 1. Credit Cards: 0he credit card enables the cardholders to8 9urchase any ite! like clothes) "ewellery) railway=air tickets) etc# 9ay bills &or dining in a restaurant or boarding and lodging in hotel Avail o& any service like car rental) etc# 2. Debit Cards: A debit card is issued on pay!ent o& a speci&ied a!ount by the issuing co!pany like a telephone co!pany to a custo!er on cash pay!ent or on debiting his account by a bank# 0hus it is like an electronic purse) which can be read and debited by the re4uired a!ount# It !ay be noted that while through a credit card) the custo!er &irst !akes a purchase or avails service and pays later on) but &or getting the debit card) a custo!er has to &irst pay the due a!ount and then !ake a purchase or avail the service# /or this reason) debit card are not as popular as credit cards#

3. Smart Cards: S!art 1ards have a built-in !icroco!puter chip) which can be used &or storing and processing in&or!ation# /or e a!ple) a person can have a s!art card &ro! a bank with the speci&ied a!ount stored electronically on it# As he goes on !aking transactions with the help o& the card) the balance keeps on reducing electronically# @hen the speci&ied a!ount is utili2ed by the custo!er) he can
18

approach the bank to get his card validated &or a &urther speci&ied a!ount# Such cards are used &or paying s!all a!ounts like telephone calls) petrol bills) etc#

4. ATM Cards: 0he card contains a 9IN :9ersonal Identi&ication Nu!ber< which is selected by the custo!er or conveyed to the custo!er and enables hi! to withdraw cash up to the transaction li!it &or the day# $e can also deposit cash or che4ue#

!hapter +

Literature Review
A new review by 0ower group o& +- top *S e- banking web sites evaluated several aspects o& core online banking co!ponents# Group &ound that there is di&&erence in ter!s o& actual &unctionality and usability# A!ong di&&erent banks and their services#
19

0he *KAs &irst ho!e online banking services were set up by the Nottingha! Building Society :NBS< in +GH. :L$istory o& the Nottingha!L# (etrieved on ,--J+,-+;#<# 0he syste! used was based on the *KAs 9restel syste! and used a co!puter) such as the BB1 'icro) or keyboard :0an data 0d+;--< connected to the telephone syste! and television set# 0he syste! :known as A$o!e linkA< allowed on-line viewing o& state!ents) bank trans&ers and bill pay!ents# In order to !ake bank trans&ers and bill pay!ents) a written instruction giving details o& the intended recipient had to be sent to the NBS who set the details up on the $o!e link syste!# An A!erican study conducted last year by Boo2-Allen pro"ects that by the year ,---) +I !illion *S households will be using Internet banking# @hile these nu!bers do not appear to be signi&icant as co!pared to the total population) each Internet user is pro"ected to be K--,K-M !ore pro&itable than the average banking custo!er# It is e pected that these Internet custo!ers will be so!e o& the banking syste!As !ost pro&itable custo!ers representing close to .-M o& all retail banking pro&its# 0he study pro"ects that by +GGG) +)K-- banks will have Internet @eb sites and at least K-- o& these banks will be o&&ering &ull-&ledged Internet banking services# In ,--+ 'icro banker send detailed 4uestionnaire to the leading vendors o& internet banking so&tware,J co!panies responded with in&or!ation on thirty progra!s the aggregate outco!e o& the outco!e was that al!ost all the co!panies have developed &unctions &or internet banking and have inbuilt &eature to aid with one to one !arketing on the web#

ICICI Bank
I1I1I Bank %nline Banking Services provide the largest private bank in India right here at your desktops# Banking beco!es a pleasure as the transactions and services beco!e instant with I1I1I Bank online Internet banking# 0he services provided are totally secure and uni4ue# 0hese cover online account transactions and operations) credit card and account applications and pay!ents) share trading and invest!ents through !utual &unds) bill pay!ents) state!ent generation and a virtual de!o o& each service# See in brie& in &inal report#
20

Role of customer when using e-banking

Nou can access I1I1IBank#co! only by using your *ser ID and 9assword# During the &irst login atte!pt) it is !andatory to change both passwords login and transaction 6 which would have been !ailed to you by the bank# I& you &orget your password) you will have written to us using the LE!ail *sL option# 0he Bank will then issue a new password and send it to your !ailing address as per our records# Kindly check with your branch that this address is updated###

'ake sure no one can see the account login na!e or password you are entering when you log on to I1I1IBank#co!#

?ogout o& I1I1IBank#co! be&ore !oving on to other @ebsites# Be&ore leaving the 91 please LcloseL the browser# Do not write your I1I1IBank#co! login na!e or password anywhere# Do not leave your login na!e and password such that so!eone sitting at your co!puter could see the!#

Never reveal your I1I1IBank#co! login na!e and password to anyone :no representative o& I1I1I Bank will ever ask you &or your I1I1IBank#co! password<#

Noti&y I1I1I Bank i!!ediately i& you notice any unusual account activity# Keep all docu!ents that include your account in&or!ation in a secure location#
21

@hen you login you can view the date and ti!e o& your last log in#

Features offered by ICICI bank for internet banking

Balance en4uiry and state!ent 0rans&er &und online 1ard to card &und trans&er *se debit card online 9repaid !obile recharge Subscribe &or !obile banking ?ink bank account to A0' ?ock = activate debit cards =A0' (e4uest a che4ue book Stop pay!ent

HDFC
Net Banking is $D/1 BankAs Internet Banking service# 9roviding up-to-thesecond account in&or!ation) Net Banking lets you !anage your account &ro! the co!&ort o& your !ouse - anyti!e) anywhere# Features offered by HDFC bank for internet banking
22

Eiew account balances and state!ents 0rans&er &unds between accounts (e4uest stop pay!ents 9ay bills 1reate &i ed deposit online %rder che4ue books

USE OF E-BANKING IN INDIA FEOM LAST FEW YEARS Year Incr. % 2002 9 2003 12 2004 15 2005 20 2006 25 2007 32 2008 40 2009 50

23

Finding In &,,&"&,,- the u.er of the E"ban#ing i. in/rea.e in more in e0er1 1ear

24

RESEARCH METHODOLOGY

25

!hapter 2

Objective of study
/ind the custo!er satis&action relating to E-banking service# 0o study the awareness o& internet banking a!ong the custo!ers o& I1I1I and $D/1 banks# /ind the di&&erent services o&&ered by banks through E-banking# 9re&erence o& custo!er regarding E-banking services#

!hapter 2 %

Limitation of Study
Banks are not giving !e all in&or!ation about E-banking services# 0hey do not per!it to !eet any o& the e!ployees in their bank#

26

!hapter 3

Type of the study:

%ur type o& study is Descriptive# Descriptive research is to describe so!ethingusually !arket characteristics or &unctions# A vast !a"ority o& !arketing research studies involves descriptive research) which incorporates the &ollowing !a"or !ethods8 Secondary data Surveys

!hapter 3 %

Sample Size:
Sa!ple si2e re&ers to the nu!ber o& ele!ents to be included in the study# %ur sa!ple si2e was K-respondents#

27

!hapter 3 &

Research approach
Surve! )ethod 0he survey !ethod involves a structured 4uestionnaire given to respondents o& di&&erent sector and designed to elicit speci&ic in&or!ation# 0hus) this !ethod o& obtaining in&or!ation is based on the 4uestioning o& respondents

!hapter 3 +

Research Instruments
9uestionn'ire A Ouestionnaire consists o& a nu!ber o& 4uestions printed or typed in de&inite order on a &or! or set o& &or!s# 0he 4uestionnaire includes !ultiple 4uestions) open ended 4uestions

28

!hapter 3 2

Data collection
Pri)'r! D't'# In this research with a sa!ple si2e o& nearly ,- custo!er3s data will be available in &or! o& 4uestionnaire collected in ter!s o& di&&erent 4uestions in&luencing the use o& internet banking# Internet banking is considered as dependent on awareness a!ong custo!ers which will be studied with help o& di&&erent independent variable# %nly the custo!ers o& $D/1 5 I1I1I bank are taken as sa!ples &or study# Se-ond'r! d't'# 1ollection o& in&or!ation &ro! di&&erent kind o& books the data o& the co!pany what they !aintained#

!hapter 3 3

Methodology
%nce the &indings are &inali2ed by a research) suggestions should be !ade &or the better!ent o& enterprise# 0he data collected &ro! 4uestionnaire will be tabulated and analy2ed so that 0he result can be presented as si!ple as possible# 0here are a nu!ber o& ways like
29

o 9ie-chart o Graphs

Final Report

30

!hapter 4

Data analysis
+< *sers o& E-banking

Nes No

IKM .KM

INTERPRETATION:
IKM o& bank custo!ers are the users o& e-banking while .KM do not use ebanking#

31

,< No# o& user o& the banks Icici Sbi Sbh A-is U io Hdfc (), *), (), '), ., '(,

INTERPRETATION:
32

,-M o& the custo!ers are the user o& I1I1I bank) .-M users are o& SBI) while +,M are o& $D/1#

.< 9(E/E(EN1E /%( %N?INE BI?? 9AN'EN0 SE(EI1ES

/es No

0), +),

INTERPRETATION:
IKM o& bank custo!ers give pre&erence to online bill pay!ent services while .KM do not pre&er online pay!ent services#

33

;< 9(E/E(EN1E /%( %N?INE S$%99ING

/es No

1), *),

INTERPRETATION:
J-M o& bank custo!ers give pre&erence to online shopping while .-M do not pre&er online shopping#
34

5)

9(E/E(EN1E /%( %N?INE /*ND 0(ANS/E(

/es No

*2, 02,

INTERPRETATION:
IKM bank custo!ers do not pre&er to use online &und trans&er service whereas only .KM custo!ers give pre&erence to online &und trans&er#

35

I< SA0IS/IED 1*S0%'E(S

/es No

02, *2,

INTERPRETATION:
IKM o& bank custo!ers are satis&ied with the E-banking services provided by their bank while .KM custo!ers are not satis&ied with the e-banking services provided by their banks#
36

J< 9E(/E((ED '%DE %/ 9AN'EN0 :0% BANK<

CHEQUE CASH E-BANKING

50 25 25

INTERPRETATION:
37

K-M o& bank custo!ers uses 1he4ue as a !ode o& pay!ent to bank while ,KM custo!ers give pre&erence to e-banking and cash each#

H< S9END 9E( BI?? /%( %N?INE BI?? 9AN'EN0

ABOVE Rs.10 BETWEEN RS.5-10 BELOW RS.5 NOTHING

21 11 32 36

INTERPRETATION:
,+M Bank custo!ers are ready to spend above (s#+- per bill) .,M custo!ers are ready to spend between (s#K-+- while .IM are not ready to spend anything#
38

1hapter J

Findings
+# In the users ratio o& internet banking IKM o& custo!ers are using this service# ,# 'ore banks are connecting to the any so&tware co# to running the E-banking service# In these services the Sbi banks is top in service o& E-banking# .# 0he services that are !ostly used by !a i!u! custo!ers are transactions) online trading) bill pay!ent) shopping etc# ;# 0he !ode o& the cash deposit in bank is &or use to online truncation cash) che4ue 5 e-banking# K# Di&&erent banks di&&erent charge &or online service#

39

!hapter 5

Suggestions
+# 0o prevent online banking &ro! re!aining custo!ers to pro!pt this service through advertising co# ,# A&ter repairing this basic de&iciency) banks !ust ensure that there services is co!petitive# .# Banks is not take !ore charge &ro! there custo!ers#

!hapter 6
40

Conclusion
0he basic ob"ective o& !y research was to analy2e the awareness a!ong custo!ers &or internet banking in INDIA# It gives direction to research tools) research types and techni4ues# Although the &indings reveal that people know about the services but still !any people are unaware and !any o& the! are non 6 users so the bank should by pro!otion try to retain the custo!ers# Banks should look &orward to have so!e tie 6 ups with other &inancial institutions to increase the service base#

Bibliography
Book:41

 E-banking in India Banking service operation I!"#I) Indian Banking $one% & Banking

Links Visited
www.google.com www.icici.com www.hdfc.com www#wikipedia#co!

APPENDIX
42

Questionnaire:-

+# Na!e o& the custo!er8-

,# Do you like E-banking a# Nes b# No

.# 0ick which bank you pre&erred> a# Icici b# Sbi c# Sbh d# A is e# *nion bank &# $d&c g# *0I Bank ?td h# Bank o& 9un"ab ?td

;# @hy this bank

43

a# Service is good b# 0hey provide security c' 1heaper service &ees'

K# @hich type o& service !ostly you useP a# Balance and transaction history search b# 0rans&er &und online c# 1ard to card &und trans&er d# %pen /D e# ?ock = activate debit cards =A0' &# (e4uest a che4ue book g# Stop pay!ent h# (ailway pass = ticket i# Shopping "# Share pay!ent I# Services o& the bank are># a# poor b# good c# Eery good
44

J# Are you satis&ied with the using o& E-bankingP a# Nes b# No

45