A PROJECT REPORT ON

“NET BANKING SERVICES PROVIDED BY INDUSIND BANK”

SUBMITTED BY
RATHOD SHALIN KIRIT
T.Y.BBI SEM-VI
(2018-2019)
Project Submitted to “University of Mumbai” in Partial fulfilment for the
Award of Bachelor’s Degree in B.Com (Banking & Insurance)

UNDER THE GUIDANCE OF

PROF. RAO JANHAVI

Affilited to University Of Mumbai

GURUKUL COLLEGE OF COMMERCE
GHATKOPAR (E), MUMBAI- 400077.
MARCH 2019

1
DECLARATION

I, RATHOD SHALIN KIRIT student of T.Y.B.B.I (2018-2019) of Gurukul College of

Commerce, Mumbai- 400077 do hereby declare that I have completed the Project Work
titled “NET BANKING SERVICES PROVIDED BY INDUSIND BANK” as a part of
my academic fulfilment.

The Information contains in this project work is true and original to the best of my
knowledge and belief.

Date: Signature of the

Student

2
ACKNOWLEDGEMENT

I wish to express my sincere and heartfelt thanks to my guide PROF.RAO JANHAVI, for
his supervision throughout the project work.

I thank Mr. Nitin Agarwal, BBI Co-ordinator for encouragement and help to complete
this project work.

I take this opportunity to express my deep sense of gratitude to Dr. Nandita Rao
Principal, Gurukul College of Commerce, Ghatkopar (E), for having taken the initiative
to start the project work.

I also thanks to Librarians for the support in finding reference books, journals and other
material’s.

Finally, I wish to express my heartfelt gratitude to my beloved parents and all my Friends
for their encouragement and support in completing this project work Above all I thank
Lord Almighty for abundant mercies and infinite grace which showed upon me to
complete the project work.

__________________
Signature of Student

3
CERTIFICATE

This is certify that RATHOD SHALIN KIRIT, student of Gurukul College of Commerce
studying in TYBBI Roll no. 41 has successfully completed the project entitled “NET
BANKING SERVICES PROVIDED BY INDUSIND BANK” as part of assignment
under my supervision during the academic year 2018-2019.

External Signature Mr. GUIDE SURNAME

& NAME
(Guide)

Mr. Nitin Agarwal Dr. Nandita Roy

(Co- ordinator) (Principal

CONTENTS
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Chapter. Chapter Name Pg. No
no.

1 Introduction 6-24

2. Review of Literature 25-29

3. Need, Scope and Objectives of the Study 29

4. Research Methodology 30-33

5. Data Analysis and Interpretation 34-46

6. Findings of the study 47-48

7. Conclusion 49-50

8. Bibliography 51

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 CHAPTER 1

INTRODUCTION

1.1 AN INTRODUCTION TO THE COMPANY

IndusInd Bank derives its name and inspiration from the Indus Valley civilization - 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 country’s 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.
6
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 currency exchanges within India e.g. - 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 Bank’s Fixed Deposits and
Certificates of Deposit. Recently, CRISIL has reaffirmed its P1+ rating of IndusInd
Bank’s Fixed Deposits and Certificates of Deposit programme. ICRA has also assigned
the highest A1+ rating to IndusInd Bank’s Certificates of Deposit.

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

1.3 MILESTONE

Year Business Achievements

2017-18
Express Computers - Intelligent Enterprise Awards 2017 Storage.
According to 'The Forrester Indian Mobile Banking Benchmark Report 2017' - Ranked
3rd Best Bank amongst the participating banks for IndusMobile App.
Dun & Bradstreet Banking Awards 2017 - Best Private Sector Bank - Government
Scheme Participation (PMJDY).
Abby Awards 2017 - #TheOtherMenInBue Campaign, Silver - Cause Marketing, Silver -
Digital and Mobile Games Online, Bronze - Integrated Marketing.

8
 2016-17
IndusInd Bank received ‘Runner-up Award’ - New Private Sector Bank category, at the
Financial Express Best Banks Awards 2016.
IndusInd Bank was bestowed with two awards at ABP News BFSI Awards 2017 - Best
Bank in Private Sector & Best CSR Practices under Banking Category.
IndusInd Bank won three awards at IBA Banking Technology Conference, Expo &
Awards 2017 -Winner - Best Technology Bank and runner up Best IT Risk and Cyber
Security Initiative & Best Payment Initiatives.

2015-16
‘Best Bank Award’ for Electronic Payment System among Mid-sized Banks by IDRBT
for the year 2015-16.
‘Best Bank Financing the Industry - Highest Finance Sanctioned (Exports)’ by India Gem
& Jewellery Awards 2015 (42nd Edition).
Awarded as the ‘Best Bank 2015’ by Business India.
The most prestigious business award ‘EY Entrepreneurial CEO of the Year 2015’ to
Mr. Romesh Sobti, MD & CEO at the 17th EY Entrepreneur of the Year 2015 India
awards.
‘Outstanding Achievement in Safety Management’ in the Banking Sector - Category:
Gold by GreenTech Foundation, New Delhi & National Safety Council of Singapore.

2014-15
Winner for Excellent Performance in National Automated Clearing House (NACH)
under midsize bank category.

2013-14
Fastest Growing Mid-Size Bank by Business world-PwC Best Banks Survey 2013.

2012-13
Awarded the 1st Runners- Up for best Use of Technology in Training & E-Learning.

9
2011-12
Awarded "Most Improved Bank Performance of the Year" at Financial Leadership
Awards 2012 by Bloomberg UTV.

2010-11
Ranked 2nd in the fastest growing Bank (mid-size) category – published in “India's Best
Banks” report by Business World and PWC.

2009-10
Received the prestigious ISO 27001 certification for IT operations.

1.4 MISSION
To position induslnd bank limited as a top 3 performer in the new private bank space in
3years measured by The 3parameters of profitability, 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 bank’s

Product & Customer Base. Bank has also tried to enhance cost Efficiency by leveraging
technology that is continuous upgrading& customer base.

10
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 today’s 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!!!

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.
11
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 inthe country for distribution
pan India. We are currently distributing schemes of the following mutual fund:-

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ABN AMRO LIC
BIRLA PRINCIPAL
BOB PRUICICI
CHOLAMANDALAM RELIANCE
STANDARD
CANBANK CHARTERED
DSP SAHARA
DEUTSCHE SBI
FIDELITY SUNDARAM
HSBE TEMPLETON
HDFC TATA
ING TAURAS
JM UTI

General Insurance:
IndusInd Bank has tied up with “Aviva Life Insurance”
Has 3 Plans:

1. Life Long : - A Plan flexible enough to adapt to your life’s changing needs.
2. Pension Plus: - Why wait till your 60th birthday to follow
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
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RETAIL BANKING

Accounts and Deposits:

Saving Accounts
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

AN INTRODUCTION TO THE PROJECT

1.6 AN INTRODUCTION TO NET BANKING

With cybercafes 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
14
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 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.

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.

1.6.2 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
1985–1989. The focus by this time was on customer service and two models of branch
15
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.

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.

16
Several finance portals for provision of non-banking financial services, e-trading and e-
broking 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.

1.6.3 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.

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1.6.4ADVANTAGES 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
customer’s money is safe in cyber world or not.

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1.6.5 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 do 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.

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1.6.6NETBANKING 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. NetBanking services provides access to
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. NetBanking 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.

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 CHAPTER 2

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

21
if these two systems of financial services delivery are perceived as substitutes or
complements by the banks.

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
22
investigates the profile of commercial banks that offer Internet banking, using univariate
statistical analysis, relative to other commercial banks with respect to profitability, cost
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 E-
banking 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.
23
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 thatin 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.

24
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
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-, consumer- and
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.

25
 CHAPTER 3

RESEARCH METHODOLOGY

3.1 INTRODUCTION

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.

3.2 NEED OF THE STUDY

After conducting a review of researches done by various professionals a gap have been
identified. The researchers has 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 have 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.
26
3.3 OBJECTIVES OF THE STUDY

The current study was undertaken to achieve the following stated objectives:

To study the overview of IndusInd bank.

To study the net banking services provided by IndusInd bank.

To analyze the cause why customers are using or not using Net banking services.

To confidence of the customer of the IndusInd banking using these services.

3.4 DATA COLLECTION

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.

3.5 SCOPE OF THE STUDY

The study covers net banking services related to IndusInd bank.

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3.6 LIMITATIONS OF THE STUDY

The following were the limitations of the study:

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.

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.

Inadequate data: The data provided was not up to the mark due to which we faced
problems in our research.

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.

Biasness in the responses: The answers provided by the respondents suffer from biasness.

Cost Factor: It was not possible to conduct extensive research due to paucity

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 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

The data collected by any research are a collection of facts as accurately as possible. The
facts become meaningful when these are logically linked with other relevant facts and are
presented according to their essential nature, keeping the objectives of the study in mind.
The examination and interpretations of the data are very serious business. So, a single
tool cannot handle all the data and even all tools cannot be useful in each situation. So,
keeping in view that data has been analyzed, discussed and presented in the following
chapter. The present chapter aims at examining the non-user’s factors related to net
banking, reasons for non-adoption and suggestions made by non-user for the banks. The
other part of this chapter is regarding the collection of data regarding the expectations of
users in terms of eight factors such as perceived usefulness, convenience, accessibility,
quality of internet connection, easy to understand, security, trust and internet experience
by analysis of the data towards the adoption of net banking.

In order to examine the views of customers regarding Online Banking Services provided
by the IndusInd bank, two types of structured questionnaire were designed for collection
of the primary data.

The questionnaire was prepared for -

I) The bank’s customers; who are Users of Online Banking Services,
II) The bank’s customers; who are Non – Users of online banking services.

Data has been collected from customers who were users and non – users of electronic
banking. Thus in accordance with the study the data collected was interpreted and
analyzed which include: to establish the relationship between technology and service
29
quality in banking industry and to determine the factors that lead to customer preference
of different electronic banking chann

I) Questionnaire for Users of Online Banking Services

The present study seeks to identify the extent of preferences of E-Banking over
traditional banking among service class. The research design is exploratory in nature. The
research has been conducted on various class people. For the selection of the sample,
convenient sampling method was adopted and an attempt has been made to include all the
age groups and gender within the various classes. Questionnaire was used to collect
primary data from respondents. The questionnaire was structured type and contained
questions relating to different dimensions of E-banking preferences among service class
such as level of usage, factors influencing the usage of E - banking services, benefits
accruing to the users of E-banking services, problems encountered. An attempt was also
made to elicit reasons for its non-usage with a structured Questionnaire. The sample size
for Users of Online Banking Services is restricted to 300Respondents. Bank are randomly
selected.

II) Questionnaire for Non - Users of Online Banking Services

In fact, effective use of online banking services is essential in today’s advanced era to
save time and money. To study the adoption aspect of Online Banking Services, it was
decided to collect information and views from the Non-Users of Online Banking
Services. While for Non – Users the sample size is restricted to 50. These customers were
met personally to get acquainted with their view-points related to need, uses, internet
connectivity, security of Online Banking Services, their general impression & training
status regarding Online Banking Services and the irregarding technological advancement
in Online Banking Services etc. This enabled the researcher to get the mixed perceptions
of the two groups in the usage of various electronic channels.
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 Statement 1: Demographic Profile Of The Respondents
Table 4.1: Demographic Profile Of The Respondents

Demographics Number of Percentage

Respondents Of
Respondents
Age:
Below 20 yrs 1 1%
20 – 35 yrs 33 33 %
35 – 50 yrs 40 40 %
50 – 65 yrs 17 17 %
65 yrs and 9 9%
above

TOTAL 100 100 %

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 Qualification:
Undergraduate 5 5%
Graduate 65 65 %
Post Graduate 30 30 %

TOTAL 100 100 %

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 Annual
Income: 12 12 %
Less than Rs 2 27 27 %
Lakhs 39 39 %
Rs. 2 – 6 17 17 %
Lakhs 5 5%
Rs. 6 – 10 0 0%
Lakhs
Rs. 10 – 15
Lakhs
Rs. 15 – 20
Lakhs
Rs. 20 Lakhs
and above

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 TOTAL 100 100 %

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 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.

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Statement 2: Products and services of IndusInd Bank availed by the customers

Table 4.2: Products and services of IndusInd Bank availed by the customers
Products and Number of Percentage of
services respondents respondents
Loans 49 22.58 %
Deposit Accounts 63 29.03 %
Credit Cards 27 12.44 %
Debit Cards 19 8.75 %
Forex Services 22 10.13 %
ATM 24 11.05 %
NRI Services 13 6.00 %
Total 217* 100 %
Figure 4.2: Products and services of IndusInd Bank availed by the customers

12 %
9% Loans

29 % 10 % Deposit Accounts

Credit Cards
11 %
Debit Cards
6%
Forex Services
23 %
ATM

NRI Services

Analysis and interpretation:

It was found that majority of the respondents that is 29% availed deposit accounts,
followed by loans, credit cards, ATM’s and forex services with 23%, 12%, 11% and 10%
respectively.

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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: Awareness regarding Net Banking Service provided by IndusInd Bank

Table 4.3: Awareness regarding Net Banking Service provided by IndusInd Bank
Number of Percentage of
Awareness
respondents respondents
Yes 96 96 %
No 4 4%
Total 100 100 %

Table 4.3: Awareness regarding Net Banking Service provided by IndusInd Bank

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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 4: Ways to access to IndusInd Bank

Table 4.4: Ways to access to IndusInd Bank
Number of Percentage of
Ways
Respondents Respondents
Net Banking 53 23.05 %
Phone Banking 28 12.18 %
One View 7 3.05 %
ATM 29 12.60 %
Branch Network 76 33.04 %
Email Statement 34 14.78 %
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 Insta Alert 3 1.30 %
Total 230* 100 %
Table 4.4: Ways to access to IndusInd Bank

1% Net Banking
15%
23%
Phone Banking
One View
ATM
12%
33% Branch Network
3%
13% Email Statement
Insta Alert

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.

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 CHAPTER 5

FINDING AND SUGGESTION

Finding:
The present findings from the interpretation of the results regarding factors considered for
adopting e-banking / internet banking services by bank customers, functional
psychological barriers, and usefulness and benefits of e-banking services are enumerated
here.

Internet center in the study area is the place for using internet for around50 per cent of the
respondents.

Though majority of the bank customers perceive the ATM usage as important, the importance of
ATM usage is significantly related to location, education and occupation of the bank customers
based on the present study.

The perceived importance of Tele-banking is independent of the location and income but
depends upon sex, age, education and occupation of the bank customers

The internet banking is important for bank customers and at the same time the importance of
internet banking is significantly related to their age, education, occupation and income.

The extent of services like Online Enquiry, Online Payment, and Credit Card and Telephone
Banking has been at “Fair” level whereas the extent of services such as ATM Card, Debit Card,
Internet Banking, Depository Service, and Investment Advisory Service, e-Transfer of Funds,
Core Banking and Anywhere Banking has been “good” by the banks

39
There is significant difference in the extent of services as provided by both public and private
sector banks.

The preference to manual banking is little more than that of e-banking and preference towards
manual banking and e-banking is largely associated with location, age, education and occupation
of the bank customers

There is significant relationship between adoption of e-banking and location, age, education and
income of the bank customers.

The adoption of e-banking is significantly associated with the number of banking transactions
per month among bank customers.

The bank customers consider “Like to use new technologies”, “IB has made banking easy” and
“Use IB for better rate offers and charges only “as the primary reasons for adoption of e-banking

Suggestions:
The following suggestions are recommended for enhancing e-banking /internet banking
services of banks to the customers
Banks should take necessary steps to create awareness among rural people about the
advantages of e-banking / internet banking services available in the banks.

The e-banking / internet banking system should be enhanced to make the online enquiry and
online payment much easier to the customers.

Public sector banks should improve their e-banking / internet banking services to compete with
their private sector counterparts.

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Most of the customers have not availed of the e-banking / internet banking services because
they do not trust the internet channel presuming it as complicated. So banks may set up a team
of personnel to train the customers to get acquainted with internet channel.

The bank customers have perceived the risk of getting wrong information from e-banking /
internet banking services. These illusions should be removed from the minds of the customers
by bank people as these factors are the barriers for most of the customers for not adopting
these services.

Though e-banking / internet banking is convenient and easy to use, customers are afraid of
adopting these services because they think that using these “services are difficult and
complicated”. So, on-site training can be provided to the bank customers who intend to use e-
banking /internet banking services.

General Suggestions:

The delivery of financial services at affordable costs to vast sections of people including
disadvantaged and low income groups’ is relates to financial an open and efficient society.

It is argued that as banking services are in the nature of public good, it is essential that
availability of banking and payment services to the entire population without discrimination is
the prime objective of public policy

To achieve this sound financial and banking service is essential and therefore Indian bankers
should take resolutions to implement the policy of “e-inclusion” in all the branches, which
enable its customers to enhance the knowledge of e-banking and avail all form of banking
services.

It will include the maximum number of people under the shelter of financial inclusion for this
purpose, it is the duty of the bankers to inculcate the feeling of that e-banking /internet banking
is safe and secure.

This can be possible only when a banker take steps to have a separate on-line center in their
premises with enough number of computers and uninterrupted internet facility

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 CHAPTER 6.

CONCLUSION

Based on this study, the opinion of the sample respondents among the bank customers the
various aspects of e-banking / internet banking services provided by public and private
sector banks are evaluated using appropriate statistical techniques such as Cross
tabulation analysis with Kruskal-Wallis test-test in addition to descriptive statistics like
mean and standard deviation. It is concluded from the results of the study that the usage
of ATM, Tele-banking and Internet banking are perceived as important and the use of
these services is associated with socio-economic and demographic characteristics of the
respondents.

Though, most of the customers prefer manual banking over e-banking, the customers tend
to use e-banking / internet banking and adoption of banking and internet banking services
among the bank customers is significantly influenced by the number of times visiting the
banks as well as the number of banking transactions per month. Most of the services
through e-banking / internet banking performed by both public and private banks are
beyond the expectation of the customers.

Similarly the various services provided by both public and private sector banks are more
than adequate for customers. It is concluded finally that there is significant difference
between public and private sector banks in respect of both services provided and services
performed via e-banking / internet banking. From the results regarding functional /
psychological barriers and benefits, it is noted that there are four underlying aspects
(dimensions) of functional / psychological barriers (two aspects related to barriers such as
“Complications and Difficulties in using IB initially” and “Risk of getting wrong

42
information”) and benefits (two benefits namely, “Convenient & Easy to Use “and “Good
option next to traditional banking”) are identified using factor analysis.

It is also concluded that there is significant difference in the perceived status of

functional / psychological barriers / benefits dimensions by socio-economic
characteristics and the perceived status of functional /psychological barriers/benefits is
related to importance of using ATM, internet banking, preferred type of banking, availing
e-banking services, period of using-banking, number of times visiting banks in a month,
number of internet transaction in a week and number of banking transaction in a month.

From the evaluation of the customers’ opinion with regard to the benefits and usefulness
of e-banking / internet banking in addition to “intention of using-banking / internet
banking in the future”, it is identified that there are four major benefits, namely “Save
time & Cost Less”, “Provide accurate, relevant and up-to date information”, “Flexible
and easily accessible with convenience “and “Assists to share the experience with bank
and other customers more efficiently” from e-banking / internet banking. It is found that
“flexibility and easy accessibility with convenience” is the most desirable benefit
followed by “Providing accurate, relevant and up-to date information” and “Saving time
&Cost Less” and the perceived status of the above benefits is associated with

Education and family income of the respondents. From this, it is apparent that there is
significant difference in the perceived level of benefits of e-banking between public and
private sector banks as well as between non-users and users of e-banking / IB.

Regarding the usefulness of e-banking / internet banking, it may be concluded that

“Generating the latest reports of banking transactions” is the major usefulness followed
by “Funds transfer”, “Pay bills using available cash in the accounts” and “Order to buy
and sell shares”. It is also concluded that the usefulness of e-banking / IB provided by
private sector banks is remarkably higher than that of public sector banks.

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Further, the perceived status of usefulness among non-user group as well as among rural
group is significantly less than that of their respective counterparts. It is found that the
perceived status of usefulness of e-banking / IB is also related to education and family
income of the respondents. With regard to the “intention to use e-banking / internet
banking in the future”, all respondents have expressed positive opinion that they have
intention of using these services in the future. It is identified that “time saving and less
cost” tend to influence the bank customers’ “intention to continue using this Internet
banking site in the future “whereas “providing accurate, relevant and up-to date
information”, “flexibility and easy accessibility with convenience” and “assisting to share
the experience with bank and other customers more efficiently” tend to influence the
bank customers to strongly recommend to others to use e-banking / internet banking in
the future”. It is further concluded that the bank customers may also continue to use e-
banking / internet banking in the future” as it is useful in getting account details and
balance statements as well as for transferring funds. Moreover, bank customers tend to
strongly recommend to others to use e-banking / internet banking as it is useful for loan
transaction, paying bills using available cash in the accounts, making order to buy and
sell shares and generating latest reports of banking transactions
Banking systems have been with us for as long as people have been using money. Banks
and other financial institutions provide security for individuals, businesses and
governments, alike. Let's recap what has been learned within tutorial: In general, what
banks do is pretty easy to figure out. For the average person banks accept deposits, make
loans, provide a safe place for money and valuables, and act as payment agent between
merchants and banks. Banks are quite important to the economy and are involved in such
economic activities as issuing money, settling payments, credit intermediation, maturity
transformation and money creation in the form of fractional reserve banking.
To make money, banks use deposits and whole sale deposits, share equity and fees and
interest from debt, loans and consumer lending, such as credit cards and bank fees.
In addition to fees and loans, banks are also involved in various other types of lending
and operations including, buy/hold securities, non-interest income, insurance and leasing
and payment treasury services. History has proven banks to be vulnerable to many risks,
however, including credit, liquidity, market, operating, interesting rate and legal risks.
44
Many global crises have been the result of such vulnerabilities and this has led to the
strict regulation of state and national banks.

CHAPTER 7

BIBLOGRAPHY

BOOKS REFFERED:

Philip Kotler (Eight Edition), “Marketing Management

T.N Chhabra, Human Resource Management

WEBSITES PREFFERED:

WWW.Wikipedia.com
WWW.INDUSINDbank.com
WWW.google.co.in

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