25049932 Final Project on E Banking

Management Thesis on “Services provided by the bank

through

E-BANKING IN INDIA”

By

Abhinav Tawani

1

SYNOPSIS

A Thesis 2

ON “Services provided by the bank

through

E-BANKING IN INDIA”

Submitted by

ABHINAV A TAWANI

Enroll. No. 08OSB201

OSB Aurangabad.

A report submitted in partial fulfillment of

The requirements of

THE MBA PROGRAM

(The Class of 2010)

OSB Campus

Introduction

3

E-banking:-

Internet banking (or E-banking) means any user

with a personal computer and a browser can get connected to his

bank -s website to perform any of the virtual banking functions. In

internet banking system the bank has a centralized database that

is web-enabled. All the services that the bank has permitted on

the internet are displayed in menu. Any service can be selected

and further interaction is dictated by the nature of service. Once

the branch offices of bank are interconnected through terrestrial

or satellite links, there would be no physical identity for any

branch. It would a borderless entity permitting anytime, anywhere

and anyhow banking.

The delivery channels include direct dialup connections,

private networks, public networks, etc. with the popularity of

computers, easy access to Internet and World Wide Web (WWW),

Internet is increasingly used by banks as a channel for receiving

instructions and delivering their products and services to their

customers. This form of banking is generally referred to as

Internet Banking, although the range of products and services

offered by different banks vary widely both in their content and

sophistication.

Meaning of E-Banking

E-bank is the electronic bank that provides the financial service for the individual client by means of Internet.

4

Need of study

• To know the customers perception toward the E-banking

service.

• I am interested in E-BANKING that I am taken this topic.

5

Benefits of study

1) Organizing Educational Campaign To Create Goodwill Of

Company.

2) Services It Effectively valuable to Create Place in the

Minds of Customer.

3) Availability should be increased by using various services

Strategy.

4) Company should make service equal to or better than

Competitive Brands By All Means.

6

Executive summary

The project Report on:

Services provided by the bank through E-BANKING IN INDIA

Project carried at:

SBI, SBH, ICICI, ETC.

Project objectives:

• Find the customer satisfaction relating to E-banking service.

• To study the awareness of internet banking among the

customers of ICICI and HDFC banks.

Research Methodology:

Primary Data:

In this research with a sample size of nearly 20 customer’s data will be available in form of questionnaire collected in terms of different questions influencing the use of internet banking.

7

Internet banking is considered as dependent on awareness among customers which will be studied with help of different independent variable. Only the customers of HDFC & ICICI bank are taken as samples for study.

Secondary data:

Collection of information from different kind of books the data of the company what they maintained.

Conclusion

The basic objective of my research was to analyze the awareness

among customers for internet banking in INDIA. It gives direction

to research tools, research types and techniques. Although the

findings reveal that people know about the services but still many

people are unaware and many of them are non – users so the

bank should by promotion try to retain the customers. Banks

should look forward to have some tie – ups with other financial

institutions to increase the service base.

8

9

Interim Report

10

A Thesis

ON“Services provided by the bank

through

E-BANKING IN INDIA”

Submitted by

ABHINAV A TAWANI

Enroll. No. 08OSB201

OSB Aurangabad.

A report submitted in partial fulfillment of

The requirements of

THE MBA PROGRAM

(The Class of 2010)11

OSB Campus

Table Contents

Chapter 1: Introduction…………………………………………………………16

Chapter 2: Observation of study………………………………………………..17

Chapter 3: Literature Review ………………………………………………….22

Chapter 4: Objective of study………………………………………………….27

Chapter 4.1: Limitation of study………………………………………………27

Chapter 5: Methodology………………………………………………………28

Chapter 5: Questionnaire…………………………………………………..….29

Chapter 6: Data analysis………………………………………………………32

Chapter 7: findings……………………………………………………………38

Chapter 8: Conclusions………………………………………………………39

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AcknowledgementI would like to express my gratitude to all those who gave me the possibility to complete this project.

I would like express my guide Mr. Mangesh Kela and I am also thankful to my faculty guide Mrs. J.R. Phansalkar to continuous guidance.

In the end, I express our gratitude to my friend who inspired me in this work without their inspirations the work were almost impossible.

Signature

Abhinav A Tawani

08OSB201

13

DeclarationI am Abhinav A Tawani this project report is my original work

and have not been submitted in any form as a part of any other

project.

Information derived from the published and unpublished work of

other has been acknowledgement in the list references in given in

the bibliography.

Abhinav A Tawani

08OSB201

14

CERTIFICATE

This is to certify that the Management Thesis titled” Services provide by the banks through E-banking in INDIA”submitted

By Abhinav A. Tawani

Enroll No: 08OSB201

During semester 3rd of the MBA Program (The Class of 2010) embodies original work done by him / her.

Signature of the Faculty Supervisor ----------------------------

Name (in Capitals) … Mrs. J.R. Phansalkar

Designation … Faculty Guide

Campus ... OSB Aurangabad

15

Bibliography

Book:-

• E-banking in India

• Banking service operation (ICFAI)

• Indian Banking

• Money & Banking

Links Visited

www. google .com

www.icici.com

www.hdfc.com

www.wikipedia.com

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Chapter 1

Introduction

E-banking:-

Internet banking (or E-banking) means any user

with a personal computer and a browser can get connected to his

bank -s website to perform any of the virtual banking functions. In

internet banking system the bank has a centralized database that

is web-enabled. All the services that the bank has permitted on

the internet are displayed in menu. Any service can be selected

and further interaction is dictated by the nature of service. Once

the branch offices of bank are interconnected through terrestrial

or satellite links, there would be no physical identity for any

branch. It would a borderless entity permitting anytime, anywhere

and anyhow banking.

The delivery channels include direct dialup connections,

private networks, public networks, etc. with the popularity of

computers, easy access to Internet and World Wide Web (WWW),

Internet is increasingly used by banks as a channel for receiving

instructions and delivering their products and services to their

customers. This form of banking is generally referred to as

Internet Banking, although the range of products and services

offered by different banks vary widely both in their content and

sophistication.

17

Meaning of E-Banking

E-bank is the electronic bank that provides the financial service for the individual client by means of Internet.

18

Chapter 2

Observation of study

DEFINITION OF E-BANKING

For this booklet, e-banking is defined as the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive communication channels. E-banking includes the systems that enable financial institution customers, individuals or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the Internet. Customers access e-banking services using an intelligent electronic device, such as a personal computer (PC), personal digital assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone. While the risks and controls are similar for the various e-banking access channels, this booklet focuses specifically on Internet-based services due to the Internet’s widely accessible public network. Accordingly, this booklet begins with a discussion of the two primary types of Internet websites: informational and transactional.

E-BANKING SUPPORT SERVICES

WEBLINKINGA large number of financial institutions maintains sites on the World Wide Web. Some websites are strictly informational, while others also offer customers the ability to perform financial transactions, such as paying bills or transferring funds between accounts.

WIRELESS E-BANKINGWireless banking is a delivery channel that can extend the reach

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and enhance the convenience of Internet banking products and services. Wireless banking occurs when customers access a financial institution's network(s) using cellular phones, pagers, and personal digital assistants (or similar devices) through telecommunication companies’ wireless networks. Wireless banking services in the United States typically supplement a financial institution's e-banking products and services.

Person-to-Person PaymentsElectronic person-to-person payments, also known as e-mail money, permit consumers to send “money” to any person or business with an e-mail address. Under this scenario, a consumer electronically instructs the person-to-person payment service to transfer funds to another individual. The payment service then sends an e-mail notifying the individual that the funds are available and informs him or her of the methods available to access the funds including requesting a check, transferring the funds to an account at an insured financial institution, or retransmitting the funds to someone else. Person-to-person payments are typically funded by credit card charges transfer from the consumer’s account at a financial institution. Since neither the payee nor the payer in the transaction has to have an account with the payment service, such services may be offered by an insured financial institution, but are frequently offered by other businesses as well.

Banking Services through Internet:

1. The Basic Level Service is the banks’ web sites which disseminate information on different products and services offered to customers and members of public in general. It may receive and reply to customer’s queries through e-mail;

2. In the next level are Simple Transactional Web sites which allows customers to submit their instructions, applications for

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different services, queries in their account balances, etc. but do not permit any fund-based transactions on their accounts;

3. The third level of Internet banking service are offered by Fully Transactional Web sites which allow the customers to operate on their accounts for transfer of funds, payment of different bills, subscribing to other products of the bank and to transact purchase and sale of securities, etc. The above forms of Internet banking service the customer or by new banks, who deliver banking service primarily through Internet or other electronic delivery channels as the value added services. Some of these banks are known as ‘Virtual’ banks or ‘Internet only’ banks and may not have physical presence in a country despite offering different banking services.

The Indian Scenario: -

• Internet banking, both as a medium of delivery of banking services and as a strategic tool for business development.

• At present, the total internet users in the country are estimated at 9 lakh. However, this is expected to grow exponentially to 90 lakh by 2003. Only about 1 percent of Internet users did banking online in 1998. This is increased to 16.7 percent in March 2000.- (India Research, May 29, 2000, Kotak Securities)

• Cost of banking service through the Internet from a fraction of costs through conventional methods. Rough estimates assume teller cost at Re.1 per transaction, ATM transaction cost at 45 paise, phone banking at 35 paise, debit cards at 20

21

paise and Internet banking at 10 paise per transaction.

Plastic Cards as Media for Payment: -

There are four types of plastic cards being used as media for making payments. These are: 1. Credit Card2. Debit Card 3. Smart Card 4. ATM Card

1. Credit Cards: -

The credit card enables the cardholders to: Purchase any item like clothes, jewellery, railway/air tickets, etc. Pay bills for dining in a restaurant or boarding and lodging in hotel Avail of any service like car rental, etc.

2. Debit Cards: -

A debit card is issued on payment of a specified amount by the issuing company like a telephone company to a customer on cash payment or on debiting his account by a bank.

Thus it is like an electronic purse, which can be read and debited by the required amount.

It may be noted that while through a credit card, the customer first makes a purchase or avails service and pays later on, but for

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getting the debit card, a customer has to first pay the due amount and then make a purchase or avail the service. For this reason, debit card are not as popular as credit cards.

3. Smart Cards: -

Smart Cards have a built-in microcomputer chip, which can be used for storing and processing information. For example, a person can have a smart card from a bank with the specified amount stored electronically on it. As he goes on making transactions with the help of the card, the balance keeps on reducing electronically. When the specified amount is utilized by the customer, he can approach the bank to get his card validated for a further specified amount. Such cards are used for paying small amounts like telephone calls, petrol bills, etc.

4. ATM Cards: -

The card contains a PIN (Personal Identification Number) which is selected by the customer or conveyed to the customer and enables him to withdraw cash up to the transaction limit for the day. He can also deposit cash or cheque.

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Chapter 3

Literature Review

A new review by Tower group of 10 top US e- banking web sites evaluated several aspects of core online banking components. Group found that there is difference in terms of actual functionality and usability. Among different banks and their services.

The UK's first home online banking services were set up by the Nottingham Building Society (NBS) in 1983 ("History of the Nottingham". Retrieved on 2007-12-14.). The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tan data Td1400) connected to the telephone system and television set. The system (known as 'Home link') allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Home link system.

An American study conducted last year by Booz-Allen projects that by the year 2000, 16 million US households will be using Internet banking. While these numbers do not appear to be significant as compared to the total population, each Internet user is projected to be 50-250% more profitable than the average banking customer. It is expected that these Internet customers

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will be some of the banking system's most profitable customers representing close to 30% of all retail banking profits. The study projects that by 1999, 1,500 banks will have Internet Web sites and at least 500 of these banks will be offering full-fledged Internet banking services.

In 2001 Micro banker send detailed questionnaire to the leading vendors of internet banking software27 companies responded with information on thirty programs the aggregate outcome of the outcome was that almost all the companies have developed functions for internet banking and have inbuilt feature to aid with one to one marketing on the web.

ICICI Bank

ICICI Bank Online Banking Services provide the largest private bank in India right here at your desktops. Banking becomes a pleasure as the transactions and services become instant with ICICI Bank online Internet banking. The services provided are totally secure and unique. These cover online account transactions and operations, credit card and account applications and payments, share trading and investments through mutual funds, bill payments, statement generation and a virtual demo of each service. See in brief in final report.

Role of customer when using e-banking

• You can access ICICIBank.com only by using your User ID

and Password. During the first login attempt, it is mandatory

to change both passwords - login and transaction – which

would have been mailed to you by the bank.

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• If you forget your password, you will have written to us using

the "Email Us" option. The Bank will then issue a new

password and send it to your mailing address as per our

records. Kindly check with your branch that this address is

updated...

• Make sure no one can see the account login name or

password you are entering when you log on to

ICICIBank.com.

• Logout of ICICIBank.com before moving on to other

Websites.

• Before leaving the PC please "close" the browser.

• Do not write your ICICIBank.com login name or password

anywhere.

• Do not leave your login name and password such that

someone sitting at your computer could see them.

• Never reveal your ICICIBank.com login name and password

to anyone (no representative of ICICI Bank will ever ask you

for your ICICIBank.com password).

• Notify ICICI Bank immediately if you notice any unusual

account activity.

• Keep all documents that include your account information in

a secure location.

• When you login you can view the date and time of your last

log in.

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Features offered by ICICI bank for internet banking

• Balance enquiry and statement

• Transfer fund online

• Card to card fund transfer

• Use debit card online

• Prepaid mobile recharge

• Subscribe for mobile banking

• Link bank account to ATM

• Lock / activate debit cards /ATM

• Request a cheque book

• Stop payment

HDFC

Net Banking is HDFC Bank's Internet Banking service. Providing

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

manage your account from the comfort of your mouse -

anytime, anywhere.

Features offered by HDFC bank for internet banking

• View account balances and statements

• Transfer funds between accounts

• Request stop payments

• Pay bills

• Create fixed deposit online

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• Order cheque books

USE OF E-BANKING IN INDIA FEOM LAST FEW YEARS

Year 2002 2003 2004 2005 2006 2007 2008 2009Incr.

%

9 12 15 20 25 32 40 50

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Finding

In 2002-2009 the user of the E-banking is increase in more in every year.

Chapter 4

Objective of study

• Find the customer satisfaction relating to E-banking service.

• To study the awareness of internet banking among the

customers of ICICI and HDFC banks.

29

Chapter 4.1

Limitation of Study• Banks are not giving me all information about E-banking

services.

• They do not permit to meet any of the employees in their

bank.

Chapter 5

30

Data collectionPrimary Data:

In this research with a sample size of nearly 20 customer’s data will be available in form of questionnaire collected in terms of different questions influencing the use of internet banking.

Internet banking is considered as dependent on awareness among customers which will be studied with help of different independent variable. Only the customers of HDFC & ICICI bank are taken as samples for study.

Secondary data:

Collection of information from different kind of books the data of the company what they maintained.

MethodologyOnce the findings are finalized by a research, suggestions should be made for the betterment of enterprise.

The data collected from questionnaire will be tabulated and analyzed so that

The result can be presented as simple as possible. There are a number of ways like

o Pie-chart

o Graphs

Questionnaire:-

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1. Name of the customer:-

2. Do you like E-banking

a. Yes

b. No

3. Tick which bank you preferred…

a. Icici

b. Sbi

c. Sbh

d. Axis

e. Union bank

f. Hdfc

g. UTI Bank Ltd

h. Bank of Punjab Ltd

4. Why this bank

a. Service is good

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b. They provide security

c. Cheaper service fees.

5. Which type of service mostly you use?

a. Balance and transaction history search

b. Transfer fund online

c. Card to card fund transfer

d. Open FD

e. Lock / activate debit cards /ATM

f. Request a cheque book

g. Stop payment

h. Railway pass / ticket

i. Shopping

j. Share payment

6. Services of the bank are….

a. poor

b. good

c. Very good

7. Are you satisfied with the using of E-banking?

a. Yes33

b. No

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Final Report

35

Chapter 6

Data analysis 1) Users of E-banking

Yes 65%

No 35%

2) No. of user of the banks

Icici 20%

Sbi 30%

Sbh 20%

36

Axis 10%

Union 8%

Hdfc 12%

3) PREFERENCE FOR ONLINE BILL PAYMENT SERVICES

Yes 60%

No 40%

37

4) PREFERENCE FOR ONLINE SHOPPING

Yes 70%

No 30%

38

5) PREFERENCE FOR ONLINE FUND TRANSFAR `

Yes 35%

No 65%

39

6) SATISFIED CUSTOMERS

Yes 65%

No 35%

40

7) PERFERRED MODE OF PAYMENT (TO BANK)

CHEQUE 50

CASH 25

E-BANKING 25

8) SPEND PER BILL FOR ON LINE BILL PAYMENT

41

ABOVE Rs.10 21

BETWEEN RS.5-10 11

BELOW RS.5 32

NOTHING 36

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Chapter 7

Findings

1. In the users ratio of internet banking 65% of customers are

using this service.

2. More banks are connecting to the any software co. to

running the E-banking service. In these services the Sbi

banks is top in service of E-banking.

3. The services that are mostly used by maximum customers

are transactions, online trading, bill payment, shopping etc.

4. The mode of the cash deposit in bank is for use to online

truncation cash, cheque & e-banking.

5. Different banks different charge for online service.

Suggestions 1. To prevent online banking from remaining customers to

prompt this service through advertising co.

2. After repairing this basic deficiency, banks must ensure that

there services is competitive.

3. Banks is not take more charge from there customers.

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Chapter 8

Conclusion

The basic objective of my research was to analyze

the awareness among customers for internet

banking in INDIA. It gives direction to research

tools, research types and techniques. Although the

findings reveal that people know about the

services but still many people are unaware and

many of them are non – users so the bank should

by promotion try to retain the customers. Banks

should look forward to have some tie – ups with

other financial institutions to increase the service

base.

44