REVIEW OF LITERATURE ON THE TOPIC A STUDY ON THE RELATIONSHIP BETWEEN E-BANKING AND GROWTH IN ASSETS

Bhasin (2001) analyzed the impact of IT on the banking sector. IT has revolutionized various aspects of our life. It has transformed the repetitive and overlapping systems and procedures into simple single key pressing technology, resulting in speed, accuracy and efficiency in conducting business. The computerization of banks has provided a major push for enabling them to enter into newer activities. The banking industry has prepared itself and is strongly emerging to play a major supplementary role in nurturing e-commerce applications, which are still in their infancy in India. While a few of the new generation private banks have taken an early initiative in these innovative areas, others are gradually catching up. The author feels that proper security infrastructure should be in place for routing transactions through the public network.

Bhattacharya (1997) studied the impact of the limited liberalization initiated before the deregulation of the 1990s on the performance of different categories of banks, using data envelopment of analysis. The study covered 70 banks during the period of 1986-91.one grand frontier as constructed for the entire period and the technical efficiencies of the banks under study were measured. It was found that Public Sector Banks (PSBs) had the highest efficiency among the three categories, with foreign and private banks having much lower efficiencies. However, PSBs started showing a decline in efficiency. The main results accord with the general perception that in the nationalized era, PSBs were successful in achieving their principal objective of deposit and loan expansion.

Das (1999) compared the performance of PSBs for three years in the post reform period -1992, 1995, 1998. He fins a certain convergence in performance. He also notes that while there is a welcome increase in emphasis on non interest income, banks have tended to show risk _averse behavior by opting for risk-free investments over risky loans.

Kaveri (2001) attempted to extend the study conducted by the verma committee more specifically to ascertain whether enough signals of weakness were indicated much more the event, when the verma committee identified weak banks , strong banks and potentially weak

banks. This study considered nine efficiency parameters which were computed based on the data collected from the Reserve Bank of India (RBI) publications. The parameters include:

1. 2. 3. 4. 5. 6. 7. 8. 9.

Capital Adequacy Ratio ; Net Non-performance Assets/Net Adequacy; Net Profit/Total Assets; Gross Profit/Working Funds; Net Interest Income/Total Assets; Interest Expended/Total Assets; Intermediation Costs/Total Assets; Provisions and Contingencies/Total Assets; Interest Income/Total assets

The above parameters focus on two major concerns of bank- loan default and profitability whereas the verma committee covered all aspects of financial health. This article has given some evidence to indicate that no bank can become weak or potentially weak all of a sudden. There is gradual deterioration in the position of a loan default and profitability. Hence, suggested to develop a ratio model to arrive at a score to classify banks into three categories, i.e., weak, strong, and potentially weak. Murty (1996) analyzed various factors which can be helpful in improving the profitability of PSBs. The study examines the impact of the monetary policy and market interest rates on bank profitability and also suggests various measures to improve the profitability of thePSBs in India. Passah (2002) analyzed the Indian financial system comprising the commercial banks, the financial institutions and the capital markets. He included that Indian banking has undergone a very rapid transformation in the past three decades. There is a sea change in the Indian banking sector post-financial sector reforms.

Sabnani (2000) analyzed the importance of Universal Banking in India. Globalization, liberalization and deregulation of financial markets in many developed and developing countries have resulted in increased disintermediation and made commercial banks vulnerable to interest rate risk. Relaxing exchange rate controls, adopting uniform accounting practices in regard to income recognition, asset classification, provisioning norms and prescribing capital adequacy norms have further aggravated the position.

Objectives

Primary objectives To evaluate the impact of electronic Banking on increase in the assets. (With reference to HDFC Bank( Ottapalam) To examine whether electronic banking has improved the functioning of the Bank. To study the effect of electronic banking on the improvement of service.

Secondary objectives

To analyze the security system of E-Banking To understand the strategies adopted by bank in order to compete with other banks who follow electronic banking in their transactions