CT INSTITUTE OF MANAGEMENT AND IT, JALANDHAR

SUBMITTED TO : Mrs.AARTI MEHTA (Project Guide)

SUBMITTED BY: AMIT GUPTA

A project report submitted in partial fulfillment of the requirements for the degree of Master of Business Administration of

PUNJAB TECHNICAL UNIVERSITY,

ACKNOWLEDGEMENT
Words are inadequate, especially to express my deep sense of gratitude to those people, who extended me their invaluable assistance in the successful completion of this training report. A format statement of acknowledgement will hardly match the ends of justice in the matter of expression to my deep sense of indebt ness for Mr,TEJINDER SINGH,Branch Manager. I would also like to thanks to Ms.MUKTA AGGARWAL(Asst.Manager) of Capital Local Area Bank. She not only helped me select the topic but also gave me timely assistance in solving the hurdles. The staff of the bank is to be particularly mention for their cordial assistance to me. I also would like to pay my sheer homage to the energetic personality Mr. ARUN SHARMA(Capital Bank) who helped me a lot in the fulfillment of this dissertation. Above all I owe a debt to my project Guide Mrs.ARTI MEHTA and my Parents who helped me out in every stage of this project. and have been a continuous source of inspiration for me. This inspiration from them became the right on the way to the completion of this training report.

AMIT GUPTA

EXECUTIVE SUMMARY
Knowledge cannot be gained only on the basis of theoretical understanding from books. A practical insight is necessary for the learning process to make it complete and effective. This is specially in case of Management Education, banking is one of the emerging or rather to say it one of the fastest growing in India. Lot many local big players to name some as CLAB, HDFC, ICICI, CITI BANK has come into the scenario. While pursuing to the degree of M.B.A, after completion of the two semesters, we need to supplement the awareness so far gained with some practical comprehension. For the same, we under went summer training within some organization. The basic purpose of the training being to work with the staff as a full time employees so as to learn the working of the organization closely. For this task, I choose CAPITAL LOCAL AREA BANKin order to gain associate with the subject of Finance, which I was going to study in the next two semesters. With the choice of the bank and by undertaking the project of importance of E-banking in present scenario I really felt satisfied because the topic involved various services and facility provided by bank to their customers. The topic being interesting had gripped me right from the beginning. Moreover the bank that I worked with was a newly established one, which possesses employees who are so dedicated to their work for the reason to bring up their bank. From them I learned the sincerity towards ones work and the hard ships that they took. I therefore hope that with this report on Importance of E-banking in present scenario I could prove myself confident of attaining good knowledge and hold over the subject. The main purpose of this report is to help banks to implement security controls in their E-banking services based on best practices in relation to specific risk profiles. It is evident that different E-banking services and transactions constitute different risks to the banks and consequently must be treated accordingly. This report identifies five different E-banking services, which are classified as five risk profiles. Some of the risk areas, such as service advertising, require the implementation of none, or only few,

security controls, whereas others, like customer recruitment and registration, require more comprehensive controls, to ensure compliance with money laundering and Know your Customer requirements. This report focuses on the specific risk profile for customer-initiated transactions. The Report goes some way further than the Basel document in that it suggests "Best Practice" controls rather than minimal controls. Some customers like to delegate their authority to manage their banking accounts to third party service providers, so called aggregators. They present a privileged attacking point to be included in any risk analysis. This report provides some remarks to handle these additional difficulties. The objective of my study is to know how bank consumers value and evaluate internet as a source of information to study the demographic characteristics of online banking customers to know the major barriers to online banking services. The sample design is Convenient sampling method will be used to get the information about online banking. This method is used because we are interested in exploring gender, age, income or occupation disparities in terms of online banking in the population. Sample size will be of 50 people from the Jalandhar city. The research design is Explorative or Formulative research design will be adopted to carry out this research. As we know that the exploratory studies are conducted to gain familiarity with the phenomenon or to achieve new insight into it. This study will be basically dealing with the collection of qualitative information relating to the online banking services. The tools which is used The data so collected will be arranged in a tabular form. Keeping in view the objectives of the research and nature of the data, various statistical tools like simple ratios, chi square test, ANOVA etc may be used for data analysis. People are more satisfied from the Capital Bank due to the better services provided by them in terms of speedy transactions, fully computerized facilities, more working hours good Investment Advisory services, efficient and co-operative staff, better approach to Customer Relationship Management. In Capital Banks proper promotional activities should be taken up so as to make the population aware of the

E-banking services provided by the banks even in rural areas. The facility that was availed by most of the people at Capital Bank was that of ATM/Debit Cards. The least availed facility was that of net banking or online transfer of funds.

Content table

Sr.No. 1.

Particulars CHAPTER-I: INTRODUCTION TO STUDY

Page No.

INTRODUCTION
2. Introduction of E-banking History of E-banking Usage of E-banking Diagram of E-banking system Importance of E-banking Advantages of E-banking Drawback of E-banking How E-banking ease your life Internet banking in India Challenges of E-banking revolution

CHAPTER-II: INTRODUCTION TO CAPITAL BANK Bank Profile About Capital Local Area Bank Achievements of capital local area bank Features of capital local area bank Status Of Capital Local Area Banks Functioning Mission And Strategy History Of Capital Local Area Bank Organization Tree Structure Products Range Of Capital Local Area Bank E-banking services provided by the bank Future Prospects High tech banking

3. 4.

CHAPTER III: OBJECTIVES CHAPTER-IV: RESEARCH METHODOLOGY Sources of Data Collection Limitations of the Study CHAPTER-V: DATA ANALYSIS AND ITS INTERPRETATION CHAPTER-VI: FINDINGS AND SUGGESTIONS CONCLUSION BIBLIOGRAPHY ANNEXURE Questionnaire

5. 6. 7.

CHAPTER-I

INTRODUCTION TO STUDY

(A) E-BANKING INTRODUCTION

The world is changing at a staggering rate and technology is considered to be the key driver for these changes around us. An analysis of technology and its uses show that it has permeated in almost every aspect of our life. Many activities are handled electronically due to the acceptance of information technology at home as well as at workplace. Slowly but steadily, the Indian customer is moving towards the internet banking. The ATM and the Net transactions are becoming popular. But the customer is clear on one thing that he wants net-banking to be simple and the banking sector is matching its steps to the march of technology. E-banking or Online banking is a generic term for the delivery of banking services and products through the electronic channels such as the telephone, the internet, the cell phone etc. The concept and scope of e-banking is still evolving. It facilitates an effective payment and accounting system thereby enhancing the speed of delivery of banking services considerably. Several initiatives have been taken by the Government of India as well as the RBI (Reserve Bank of India); have facilitated the development of e-banking in India. The government of India enacted the IT Act, 2000, which provides legal recognition to electronic transactions and other means of electronic commerce. The RBI has been preparing to upgrade itself as regulator and supervisor of the technologically dominated financial system. It issued guidelines on the risks and controls in computer and telecommunication systems to all banks, advising them to evaluate the risks inherent in the systems and put in place adequate control mechanisms to address these risks.

History of E- banking
The precursor for the modern home online banking services were the distance banking services over electronic media from the early '80s. The term online became popular in the late '80s and refers to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. Home banking can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the citys major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used. The UKs first home online banking services was 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 (Tandata Td1400) connected to the telephone system and television set. The system (known as 'Homelink') 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 Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly. Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in Oct, 1994.

USAGE OF E-BANKING The rise in the e-commerce and the use of internet in its facilitation along with the enhanced online security of transactions and sensitive information has been the core reason for the penetration of online banking in everyday life. According to the latest official figures from the office of National Statistics ( ONS 2007) indicate that subscriptions to the internet has grown more than 50% from 25 million in 2005 to 45 million in 2007 in India. It has also been estimated that 60% of the population in India use internet in their daily lives.

The fundamental shift towards the involvement of the customer in the financial service provision with the help of the technology especially internet has helped to reduce the costs of financial institutions as well as helped client to use the service at anytime and from virtually anywhere with access to an internet connection. The use of electronic banking has removed personnel that facilitate the transactions and has placed additional responsibilities on the customers to transact with the service.

The computerisation of the banking operations has made maximum impact on :1) Internal Accounting System 2) Customer service 3) Diversification of system

DIGRAM OF E-BANKING SYSTEM

FEATURES OF E-BANKING
Transactional (e.g. performing a financial transaction such as an account to account transfer, paying a bill or applications like applying for a loan, new account , etc.) Electronic Bill Presentment and Payment (EBPP) Funds transfer between customers own checking and savings accounts, or to another customers account Investment purchase or sale. Loan application and transactions such as repayments.

Non-transactional (e.g. online statements, check links, chat, co-browsing etc.) Financial Institution Administration- features allowing financial institutions to manage the online experience of their end users. ASP/ Hosting Administration features allowing the hosting company to administer the solution across financial institutions. The Reserve Bank of India, in its report on "Trend and Progress of banking in India, 2001-02", said there were also additional hurdles relating to infrastructural and legal constraints in the context of e-banking. E-banking has not been able to make significant inroads in India as an independent mode of banking due to psychological, technological and socio-economic factors and is unlikely to impact the traditional distribution channels. E-banking though promising, is unlikely to threaten traditional distribution channels in near future. E-banking leads to greater competition among banks, both domestic and foreign, as well as competition from the non- banking segment. Competition results in lowering of transactions cost, enables penetration into

new markets and expansion of geographical reach. It also compels banks to offer a broad range of deposit, credit and investment products through diverse distribution channels. The major issue about the new IT was its impact on the processing of information, which lies at the very core of banking business. In spite of its advantages, reliance of such technology often exacerbates traditional risks operational, reputational and legal another source of concern related to e-banking was the emergence of "digital divide" in access to banking services. Since e-banking and other IT-led innovations in the financial sector were knowledge intensive, it often tends to favor more educated participants, that too at the cost of ignoring the relatively less privileged sections, the report said. While banks need to keep abreast with the latest technology on e-security, bank account holders need to do their own part to ensure they are not playing into the hands of fraudsters. According to Vijay Mukhi, chairman of Nasscom's special interest group for security, cyber crimes in the first five months 2006-07 have already crossed the 1.37 lakh. "Banks fear that if a cyber crime is reported, it could lead to a run on the bank. In India there have been cases of fraud where banks using software to calculate interest on saving account balances. The software was programmed in such a manner that 90 per cent of the interest would be credited to the respective bank account holder and 10 per cent would be transferred into a special account set up by the programmer himself-his own.

SECURITY OF E-BANKING:The protections through single password authentication, as in case of most of the internet shopping sites is not considered secure enough for personal online banking. Basically there exist two different security methods for online banking. These are as follows:1. PIN/TAN SYSTEM: - Where the PIN represents the password, used for the login and TANs representing onetime passwords to authenticate the transactions.

2. Signature based online banking where all transactions are signed and encrypted digitally. The keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on concrete implementation.

ADVANTAGES OF E-BANKING:Cheaper alternative: - With increasing competition, it seems to be the cost factor
that is driving banks to offer the facility. The Internet is still a very cheap alternative to opening a physical branch, and most of the push seems to be coming from the supply side. The costs of a banking service through the Internet form a fraction of costs through conventional methods. Rough estimates assume teller cost at Re 1 per transaction, ATM transaction cost at 45 paisa, phone banking at 35 paisa, debit cards at 20 paisa, and Internet banking at 10 paisa per transaction.

Convenience: - The reasons for adopting technology too are different. In

Bangalore, with its large IT industry population, the level of IT awareness is far higher than in a city like Calcutta and therefore access through ATMs and the Internet is proportionately greater. In Mumbai, on the other hand, people use ATMs because they want to avoid travelling through crowded roads. It is more a matter of convenience that drives technology adoption. With pressures on time and longer travelling periods, more and more people find it tiresome waiting in queues. People want flexibility, and Internet banking offers just that.

From snob value to necessity:- A couple of years ago, there was a belief even
among bankers that customers opening new accounts wanted the online banking facility, just to "feel good" and very few of them actually used the services. Today, bankers believe that the trend from `nice to have' is changing to `need to have'. The

"snob value" of banking with an organisation that could offer service on the Internet has given way to a genuine necessity, he feels. "It all depends on how busy a person is."

DRAWBACKS OF E-BANKING:-

Two of the biggest deterrents to online banking security and lack of comfort. ICICI Bank, which was one of the first in the country to introduce Internet banking, has only 20 per cent of its customers banking online. If this is the kind of scores that new private banks, with a reputation for attracting the younger and tech-savvy crowd keep, it is little wonder that the decades-old Vysya bank, which started Internet banking only a few months ago, has just a miniscule percentage of customers on the Net. The bank's customer profile spans wider social strata and includes a large number who shy away from electronic banking. Much as the bank wants to promote Net banking, it is not taking a hardliner approach like some MNC banks do. Do not insist all customers to use the Net or the ATM but encourage them.

How e-banking can ease your life

Penalty due to non-payment of bill is not new to anyone of us. And quite obviously, who likes the long procedure of writing a cheque, standing in a long queue and then ensuring that the particular amount is available in your bank account? Indian banks are trying to make your life easier. Not just bill payment, you can make investments, shop or buy tickets and plan a holiday at your fingertips. In fact, sources from ICICI Bank tell us, "Our Internet banking base has been growing at an exponential pace over the last few years. Currently around 78 per cent of the bank's customer base is registered for Internet banking." To get started, all you need is a computer with a modem or other dial-up device, a checking account with a bank that offers online service and the patience to complete about a one-page application--which can usually be done online. You can avail the following services.

Bill payment service Each bank has tie-ups with various utility companies, service providers and insurance companies, across the country. You can facilitate payment of electricity and telephone bills, mobile phone, credit card and insurance premium bills. To pay your bills, all you need to do is complete a simple one-time registration for each biller. You can also

set up standing instructions online to pay your recurring bills, automatically. Onetime standing instruction will ensure that you don't miss out on your bill payments due to lack of time. Most interestingly, the bank does not charge customers for online bill payment.

Fund transfer
You can transfer any amount from one account to another of the same or any another bank. Customers can send money anywhere in India. Once you login to your account, you need to mention the payees account number, his bank and the branch. The transfer will take place in a day or so, whereas in a traditional method, it takes about three working days. ICICI Bank says that online bill payment service and fund transfer facility have been their most popular online services.

Credit card customers

Credit card users have a lot in store. With Internet banking, customers can not only pay their credit card bills online but also get a loan on their cards. Not just this, they can also apply for an additional card, request a credit line increase and God forbid if you lose your credit card, you can report lost card online.

Railway pass
This is something that would interest all the aam janta. Indian Railways has tied up with ICICI bank and you can now make your railway pass for local trains online. The pass will be delivered to you at your doorstep. But the facility is limited to Mumbai,

Thane, Nashik, Surat and Pune. The bank would just charge Rs 10 + 12.24 per cent of service tax.

Investing through Internet banking

Opening a fixed deposit account cannot get easier than this. You can now open an FD online through funds transfer. Online banking can also be a great friend for lazy investors. Now investors with interlinked demat account and bank account can easily trade in the stock market and the amount will be automatically debited from their respective bank accounts and the shares will be credited in their demat account. Moreover, some banks even give you the facility to purchase mutual funds directly from the online banking system. So you need not worry about filling those big forms for mutual funds, they will now be just a few clicks away. Nowadays, most leading banks offer both online banking and demat account. However if you have your demat account with independent share brokers, then you need to sign a special form, which will link your two accounts.

Recharging your prepaid phone

Now you no longer need to rush to the vendor to recharge your prepaid phone, every time your talk time runs out. Just top-up your prepaid mobile cards by logging in to Internet banking. By just selecting your operator's name, entering your mobile number and the amount for recharge, your phone is again back in action within few minutes.

Shopping at your fingertips

Leading banks have tie ups with various shopping websites. With a range of all kind of products, you can shop online and the payment is also made conveniently through your account. You can also buy railway and air tickets through Internet banking.

Internet banking versus traditional method

Inspite of so many facilities that Internet banking offers us; we still seem to trust our traditional method of banking and is reluctant to use online banking. But here are few cases where Internet banking will turn out to be a better option in terms of saving your money. 'Stop payment' done through Internet banking will not cost any extra fees but when done through the branch, the bank may charge you Rs 50 per cheque plus the service tax.

Through Internet banking, you can check your transactions at any time of the day, and as many times as you want to. On the other hand, in a traditional method, you get quarterly statements from the bank and if you request for a statement at your required time, it may turn out to be an expensive affair. The branch may charge you Rs 25 per page, which includes only 30 transactions. Moreover, the bank branch would take eight days to deliver it at your doorstep. If the fund transfer has to be made outstation, where the bank does not have a branch, the bank would demand outstation charges. Whereas with the help of online banking, it will be absolutely free for you.

As per the Internet and Mobile Association of India's report on online banking 2006, "There are many advantages of online banking. It is convenient, it isn't bound by operational timings, there are no geographical barriers and the services can be offered at a miniscule cost."

INTERNET BANKING IN INDIA

The Reserve Bank of India constituted a working group on Internet Banking. The group divided the internet banking products in India into 3 types based on the levels of access granted. They are:

i) Information Only System: General purpose information like interest rates, branch location, bank products and their features, loan and deposit calculations are provided in the banks website. There exist facilities for downloading various types of application forms. The communication is normally done through e-mail. There is no interaction between the customer and bank's application system. No identification of the customer is done. In this system, there is no possibility of any unauthorized person getting into production systems of the bank through internet.

ii) Electronic Information Transfer System: The system provides customerspecific information in the form of account balances, transaction details, and statement of accounts. The information is still largely of the 'read only' format. Identification and authentication of the customer is through password. The information is fetched from the bank's application system either in batch mode or offline. The application systems cannot directly access through the internet.

iii) Fully Electronic Transactional System: This system allows bi-directional

capabilities. Transactions can be submitted by the customer for online update. This system requires high degree of security and control. In this environment, web server and application systems are linked over secure infrastructure. It comprises technology covering computerization, networking and security, inter-bank payment gateway and legal infrastructure.

Automated Teller Machine (ATM):

ATM is designed to perform the most important function of bank. It is operated by plastic card with its special features. The plastic card is replacing cheque, personal attendance of the customer, banking hours restrictions and paper based verification. There are debit cards. ATMs used as spring board for Electronic Fund Transfer. ATM itself can provide information about customers account and also receive instructions from customers - ATM cardholders. An ATM is an Electronic Fund Transfer terminal capable of handling cash deposits, transfer between accounts, balance enquiries, cash withdrawals and pay bills. It may be on-line or 0ff-line. The on-line ATN enables the customer to avail banking facilities from anywhere. In offline the facilities are confined to that particular ATM assigned. Any customer possessing ATM card issued by the Shared Payment Network System can go to any ATM linked to Shared Payment Networks and perform his transactions.

Credit Cards/Debit Cards:

The Credit Card holder is empowered to spend wherever and whenever he wants with his Credit Card within the limits fixed by his bank. Credit Card is a post-paid card. Debit Card, on the other hand, is a prepaid card with some stored value. Every time a person uses this card, the Internet Banking house gets money transferred to its account from the bank of the buyer. The buyers account is debited with the exact amount of purchases. An individual has to open an account with the issuing bank which gives debit card with a Personal Identification Number (PIN). When he makes a purchase, he enters his PIN on shops PIN pad. When the card is slurped through the electronic terminal, it dials the acquiring bank system - either Master Card or VISA that validates the PIN and finds out from the issuing bank whether to accept or decline the transactions. The customer can never overspend because the system rejects any transaction which exceeds the balance in his account. The bank never faces a default because the amount spent is debited immediately from the customers account.

Smart Card:
Banks are adding chips to their current magnetic stripe cards to enhance security and offer new service, called Smart Cards. Smart Cards allow thousands of times of information storable on magnetic stripe cards. In addition, these cards are highly secure, more reliable and perform multiple functions. They hold a large amount of personal information, from medical and health history to personal banking and preferences.

Mobile Banking:
Finacle mobile banking solution empowers retail and corporate banking customers with access to banking services through SMS and GPRS/WAP-enabled handsets, leveraging a single platform. It offers both mobile commerce and mobile payments within the DNA of mobile banking, with support for merchant-initiated payments and reversals, in addition to customer-initiated payments and reversals through manual SMS banking. Leveraging recent technological advances in the mobility space, the solution provides a faster, richer, secure and convenient user experience, ensuring inclusion of customers with various mobile devices. Finacle mobile banking solution functions in tandem with disparate host systems, core banking solutions, payment networks and third-party applications. The solution is interfaced with MConnect, the indigenously developed middleware, which orchestrates mobile transactions between users devices and Finacle universal banking solution. MConnect handles the multiplicity of form factors and access mechanisms on multiple devices to provide a context-agnostic view to the transaction server. The solution supports synchronization of data on mobile without re-downloading the application for downloadable client-based mobility. It empowers banks to capitalize on their existing Internet transaction and transaction support capabilities to extend it to the mobile world, in practically real time. This ushers in the advantages of reduced

integration by leveraging common interface messages, maintenance and deployment costs .

Mobile Banking
Finacle offers various flavors of mobility:

Browser-based mobile banking (GPRS or WAP-based transmission) Downloadable client mobile banking (GPRS or SMS-based transmission) Manual SMS banking

CHALLENGES OF THE "E-BANKING REVOLUTION"

Electronic banking is the wave of the future. It provides enormous benefits to consumers in terms of the ease and cost of transactions. But it also poses new challenges for country authorities in regulating and supervising the financial system and in designing and implementing macroeconomic policy. Electronic banking has been around for some time in the form of automatic teller machines and telephone transactions. More recently, it has been transformed by the Internet, a new delivery channel for banking services that benefits both customers and banks. Access is fast, convenient, and available around the clock, whatever the customer's location (see illustration above). Plus, banks can provide services more efficiently and at substantially lower costs. For example, a typical customer transaction costing about $1 in a traditional "brick and mortar" bank branch or $0.60 through a phone call costs only about $0.02 online. Electronic banking also makes it easier for customers to compare banks' services and products, can increase competition among banks, and allows banks to penetrate new

markets and thus expand their geographical reach. Some even see electronic banking as an opportunity for countries with underdeveloped financial systems to leapfrog developmental stages. Customers in such countries can access services more easily from banks abroad and through wireless communication systems, which are developing more rapidly than traditional "wired" communication networks. The flip side of this technological boom is that electronic banking is not only susceptible to, but may exacerbate, some of the same risksparticularly governance, legal, operational, and reputationalinherent in traditional banking. In addition, it poses new challenges. In response, many national regulators have already modified their regulations to achieve their main objectives: ensuring the safety and soundness of the domestic banking system, promoting market discipline, and protecting customer rights and the public trust in the banking system

. Policymakers are also becoming increasingly aware of the greater potential impact of macroeconomic policy on capital movements.

CHAPTER-II

INTRODUCTION TO CAPITAL LOCAL AREA BANK

BANK PROFILE
Capital Local Area Bank Ltd. Is Indias No.1 Local Area Bank to have begun its operations on January 14, 2000. In the year 1996, Honorable Finance Minister, Mr. P.Chidambram, conceptualized the idea of Local area Bank with the ultimate objective to cater to the financial needs of rural and semi-urban sections of the society. The Bank with the endeavor to achieve its objective of providing world class banking & comprehensive range of financial services, has emerged as a pioneer by offering high quality financial solutions with greater emphasis on high level of customer service. We are equipped to provide you with hi-tech facilities like Anywhere Branch Banking, ATM connectivity, mobile banking and internet banking, 48% and profits by 72%. The Banks business is growing at a Compounded Annual Growth Rate of

The Banks Registered & Corporate Office is situated at Jalandhar; with a current network of 16 branch offices and with a vision to expand the network to 27 branch offices by March31,2009. Managed by the team of professionals, the Bank is all set to venture into newer avenues, to become leader in the niche market for the delight of our existing cherished clientele and adding newer ones by introducing additional products as well as expanding geographically.

ABOUT CAPITAL LOCAL AREA BANK

CAPITAL STRUCTURE

The minimum capital with which the bank was started was Rs 5 crore. The promoters of these banks were required to bring in the entire minimum share capital up front. The family among the promoter group could hold equity not exceeding 40% of the paid up capital. The NRI contributions to the equity could not exceed 40% of the paid up capital. The entire initial capital subscribed by the promoters carries a lock in period of three years from the date of licensing of the bank.

VOTING RIGHTS
The individual shareholder enjoys the voting rights restricted to the ceiling of 10% of the total voting rights in terms of section 12(2) of the Banking Regulations Act, 1949.

AREA OF OPERATIONS
The area of operations of the LAB is restricted to a maximum of three geographically contiguous districts. The activities of a lab are focused on local customers predominately in the rural and semi-urban areas so as to bridge the credit gap in these areas. District A District B

District C

SCOPE OF ACTIVITIES
Capital local area bank focuses to finance agriculture and allied activities, SSI, agroindustrial activities, trading activities and non-farm sector. At least 40%of their net bank credit is lent to weaker section and nearly 25% to the priority sector. The bank targets its activities to priority sector advances, which was target at 53.35 % for the year 2008. Also the targets for agriculture and allied lending were rated to 29.85 % in the same year.

REGISTRATION, LICENSING, SCHEDULING

The bank is registered as a public limited company under the companies Act of 1956. the bank would get scheduled under the Banking Regulations Act, 1949 and included in the second schedule of the Reserve Bank of India act 1934.

PRUDENTIAL NORMS

The capital local area bank is subjected to the prudential norms, accounting policies and other policies as laid down by RBI. The bank maintains capital adequacy at 8% of risk weighted assets and comply with norms of income recognition, assets classification and provisioning since its inception.

Achievements of capital local area bank

Working of Rs.475 Crores Established 16 branches including 9 rural Profit from day one Low cost deposit Constant reducing cost of deposits High yield on advances & investment Wide base of more than 74000 customers Retail & diversified loan portfolio Retail deposit Complied to priority sector & weaker section lending norms Modern & latest banking techniques ATM facility brought to rural areas

 Zero NPA Contributing to the economic development of the area

Features of capital local area bank

7 Days Branch Banking. Uninterrupted & Extended Banking Hours - Monday to Friday (9:30 a.m. to 6:00 p.m.) - Saturday & Sunday (9:30 a.m. to 2:00 p.m.) State-of-the-art Branch Interiors ATM Connectivity Internet Banking Mobile Banking Locker Operation - 7 Days a Week All kinds of Loans at competitive Interest Rates

STATUS OF LOCAL AREA BANKS FUNCTIONING Only four CLABS are functioning at present. These are,

1.) COASTAL LOCAL AREA BANK Ltd.

Established on 27th December 1999 with an area of operation comprising three contiguous districts viz. Krishna, Gantur and West Godavari with its head office at Vijay Wada (Andhra Pradesh).

2.) CAPITAL LOCAL AREA BANK Ltd. Established on January 14th 2000 with its area of operation comprising three districts viz. Jalandhar, Kapurthala and Hoshairpur with its head office at Phagwara (Punjab).

3.) KRISHNA BHIMA SAMRUDDHI LOCAL AREA BANK Ltd. This bank spreads its services in three districts viz. Mahbubnagar in Andhra Pradesh and Raichur and Gulbarga in the state of Karnataka with head office at Mahbubnagar.this is the only local area bank, which is shared by two states i.e. Andhra Pradesh and Karnataka.

SALIENT FEATURES OF THE BANK.

1.

Seven day banking facility. To provide their customers all of the

best services throughout the week.

2. Uninterrupted an extended banking hours

3.

Branch interconnectivity to exchange every kind of information

without wasting much time.

4.

ATM connectivity. ATM cards are accepted nation wide at over

2500 ATMs of different branch.

5.

Internet banking facility is available. To access the accounts

through Internet.

6.

Locker operations provided all seven days. loans provided at competitive interest rates. of operations.

7. All kinds of

8. All loans are deployed in area

MISSION AND STARTEGY.

The mission of the capital local area bank is to be a strong financial intermediary with international standards in its areas of operation ensuring highest level of ethical standards, professional integrity, risk management and regularity compliance. The objective is to build a sound customer base for preferred banking services across varied portfolios to achieve a healthy growth in profitability, consistent with risk appetite. The bank is committed to ensure highest level of ethical standards.

To sustain and improve the performance, the banks emphasis during the current year will be initiating a gamut of financial services apart from intensifying the core business process, augmenting clientele base and facilitating technology as a business

driver. Focused attention is given to increase the low cost deposits, retail business, offering ancillary services towards utmost customer satisfaction and accelerating the non- interest income by introducing new products and process also cross selling the products to existing customers.

HISTORY OF CAPITAL LOCAL AREA BANK

The past of the Capital Local Area Bank holds the reason that our country is still an agricultural dominated economy with majority of its population depending upon on it. This sector calls for an imperative need for creation of outlets for the provision of institutional credits for productive purposes. Recognizing that, the responsibility, to mobilize savings for this sector, was allotted to the CO-OPERATIVES who were deemed to have local knowledge and local leadership. They were thought to be the best agencies for providing credit with mechanism for monitoring end use of credit. Though Co-operatives made tremendous progress, however they failed to come up to high expectations entertained of them. Few Problems faced by them were: a.) Poor mobilization of local resources b.) Ineffective leadership c.) Poor monitoring of the end use of credit d.) Mounting over dues that caused co-operatives to run into losses.

The relative dismal performance of Co-Operatives led the policy makers to look to commercial banks especially Public sector banks to step into rural branches. Commercial banks did bring a new approach to bear on the provision of credit for agriculture with their superior material & human capital. But soon, these commercial banks encountered the problems of overdue and the high cost structure made them inappropriate agencies for purveying of rural credit on dispersed basis. It was this realization that led to the setting up of regional rural banks in 1976. These banks, which in the share capital of the Central and State Governments participated, were linked to a sponsor bank, which also contributed to the extent of 35 % of their share capital. These adopted lower scale of compensation for their staff than the sponsor banks.

Initially they could manage but soon several factors crippled them. Few of these reasons were: 1.) New compensation policy 2.) Mounting over dues 3.) Uneasy industrial relations Thus the authorities tried it with every institution to fulfill the strategic task of upbringing the rural sector of the economy in particular. But due to certain limiting factors and circumstances this task could not be well performed by the abovementioned institution. It was presumably due to set back encountered in the channelization of credit though co-operatives, commercial banks & RRBs that the new concept of LOCAL AREA BANKS emerged. Because the need to develop the rural sector could not be overlooked at that time. The established institution failing in their work also gave a favorable blow to start the new concept of local area banks. Thus local area banks came into being.

ORGANISATIONAL TREE STRUCTURE

BRANCH MANAGER

SENIOR MANAGER

DEPUTY MANAGER (OPERATIONS)

ASSISTANT MGR. (BUSINESS DEVE.)

ASSISTANT MGR. (CREDIT DEPT.)

MARKET MGT. EXECUTIVE TRAINEE

MARKET MGT. EXECUTIVE TRAINEE

MARKET MGT. EXECUTIVE TRAINEE

MGT. TRAINEE

MGT. TRAINEE

SENIOR EXECUTIVE

SALES EXECUTIV E

PRODUCT RANGE OF CAPITAL LOCAL AREA BANK Ltd.

The bank mainly deals with the deposits product and loan products. These deposits products are broadly categorized under four types: Saving Account Current Account Term deposits Recurring deposits.

1.

SAVING ACCOUNT:
Saving account are mainly meant for the small savers and

working class people who save small amount. With such types of deposit accounts, the depositor are capable to withdrew and deposit the amount at short notice also. Thus they prove to be less safe than the term deposit accounts. The bank provides following types of saving accounts to be opened by customer for short time savings. a.) Normal saving account: b.) Capital saving account: c.) Capital Saver Saving Account:

d.) Capital Super Saving Account:

CURRENT ACCOUNT:
Current accounts are the products with which the bank allows its customers to withdraw and deposit as much as they desire in one day. Normally these kinds of accounts are beneficial to the big business men who deal in huge amounts and require their deposit at some safer place. Upon these accounts the bank do not provide any rate of interest. Rather some banks charge for the account.

a) Normal current account b) Capital current account c) Capital plus current account d) Capital premium current account

3 TERM DEPOSITS: The term deposits are the accounts that are meant for a specific period of time say for few months or years. The amount deposited in such account remains there for the specified period. The depositor regularly earns a rate of interest upon it. If the depositor withdraws the amount the deduction in the rate of interest is made. For exemplification: - FIXED DEPOSITS. The amount deposited in fixed deposit accounts cannot be withdrawn before the expiry of fixed period. Normally it allows a high rate of interest. With such type of term deposits, which are also called as high cost accounts, the bank can ensure a safe financial position for specified period of time. Thus from such deposits they can make long-term investments. If the depositor needs to withdraw the money he can do it up to 75% of the total.

RECURRING DEPOSITS:

Such types of deposits allow the customers to deposit a predetermined amount of money into the account every month. The rate of interest on such acconts is equal to the rate of interest payable on the term deposits account of the same period. However, in case of need, premature withdrawal are allowed from such deposits .The basic idea behind such low cost deposits are that a persistent amount is to be transferred every time or periodically for earning a rate of interest.

LOAN PRODUCTS
Besides dealing in deposits and opening accounts, the capital local area bank also provides its customers the lending facility at nominal rates. There are several products that make up a wide range of loan product providing the customers, having different needs, a broad choice. Following are such loan products of capital local area bank.

1.

Personal Loans:

The bank offers one of its major loan products meant for every category that is personal loans. Under this loan product the customer can avail loan regarding medical facility, marriage, family function, tour and travel. The bank based upon certain criteria can sponsor all such activities.

2. Housing loans.
In the list of the loan products the housing loan adds a dimension to the companys products.

Eligibility

1. Individual or group of individuals must be eligible as per the requirements specified under the housing scheme. 2. The applicant must be having a permanent source of income. 3. The age of the applicant must not be above 60 years.

3. Higher Education
The applicant must be having Indian nationality and ageing under 30 years. For the applicant seeking admission in diploma courses related to the computers, who are above the specified age, could also seek loan under other conditions. The student must have secured admission in any of the reputed courses /degree in a renowned institution in India or abroad. Such institution must be recognized by AICTE. These education loans up to any amount can be given to priority sector.

Purpose:
1. Admission fee of the student. 2. Books and stationery 3. Monthly fee. 4. Examination fee. 5. Purchase of computers.

4.Retail Traders Loans:

Advances can be sanctioned for carrying on any retail trade. However lending under the head retail trade up to Rs. 10 lac would be covered under priority sector lending as per the RBI s norms.

5. Loans Against Rentals; Rate of interest- PLR with monthly rents (13%) Penal interest -@ 2% over and above. Repayment Max period of 7 years.

OTHER LOAN PRODUCTS:

Small Scale Industry Loans Professional Loan Consumer Loan Weaker Section Loan Transport Loan Auto Loans.

E-BANKING SERVICES PROVIDED BY CAPITAL LOCAL AREA BANK

CLAB is a new player in banking sector, it is working from last 8 year and it is first bank in northern region which is using the concept of local area banking which is established for the benefits of the people living in rural areas but it is providing all modern facilities which is providing by other modern banks, with the span of 8 year it has made 16 branches all are connected with each other which is known as intra banking. It is providing online banking where the customer can check its account status. It provide the facility of online transfer of funds. Following are E-banking services providing by the capital local area bank

Automated Teller Machine(ATM):

CAPITAL BANK also provides ATM facility to their customer without any charges. ATM is issued according to customer requirement . CAPITAL BANK ATM is used only in branch ATM machines only and it doesnt have any tie- up with others banks. Mostly Public Sector Banks and Private Sector Banks are either setting up their own

ATM centres or entering into tie-ups with other banks.Capital local area bank having ATM facility where the customer can withdraw his money directly though the ATM without standing in the rows or without filling any pay-in-slip. Capital local area bank has its 16 running branches and it has provided ATM to maximum number of branches, all ATM are connected to each other where customer can use his ATM card any time 24 hour where bank has its ATM facility.

Internet banking or online banking:

Online banking or internet banking has now became back bone for all banking, maximum number of customer are using online banking to fulfill its needs. Capital local area bank is also providing this facility where customer can make transactions customer can transfer its money from his account to another account but CLAB need to improve this service more. The only drawback is that capital bank do not have its gateway like(visa)

Net Banking has three basic features. They are as follows:

The banks offer only relevant informations about their products and services to the mass. Capital Bank provide interaction facility between the banks and its customers. Capital Bank are coming up with arrangements of utility payments, like telephone bills, electricity bills, etc.

Services provided by Net Banking Queries

Check Balance See Statement Inquire about cheque status

Ask for a Statement Ask for a Cheque Book Inquire about Fixed Deposit Inquire about TDS details Update profile

Transactions

Stop a Cheque Pay Bills Ask for a Demand Draft Transfer funds between your accounts Transfer funds to a third party Request for a new Fixed Deposit Shop Online Pay Bank Credit Card Dues

Advantages of Net Banking

It removes the traditional geographical barriers as it could reach out to customers of different countries/legal jurisdiction. This has raised the question of jurisdiction of law/supervisory system to which such transactions should be subjected.

It has added a new dimension to different kinds of risks traditionally associated with banking, heightening some of them and throwing new risk control challenges.

Security of banking transactions, validity of electronic contract, customers' privacy, etc., which have all along been concerns of both bankers and supervisors have assumed different dimensions given that Internet is a public domain, not subject to control by any single authority or group of users.

It poses a strategic risk of loss of business to those banks who do not respond in time to this new technology, being the efficient and cost effective delivery.

Mobile Banking In Capital Bank

The account that travels with you" This is needed in today's fast business environment with unending deadlines for fulfillment and loads of appointments to need and meetings to attend. The CAPITAL BANK provides this mobile banking service to their customers without any charges according to the requirement of customers. The system is either through SMS or through WAP. (Check out for SMS Banking under different head) Mobile Banking is the hottest area of development in the banking sector and is expected to replace the credit/debit card system in future. In past two years, mobile banking users has increased three times if we compare the use of either debit card or credit card. Move over 85-90% mobile users do not own credit cards. The following operations can be conducted through advanced mobile phones which can is further viewed on channels such as the Internet via the Channel Manager.

Bill payments Fund transfers Check balances Any many more which is also available in SMS Banking

In countries like Korea, two SIM Card is used in mobile phones. One for the telephonic purpose and the other for banking. Bank account data is encrypted on a smart-card chip. About 3.3 million transactions were reported by Bank of Korea in 2004.

SMS Banking in capital bank

Businesses are in move. So is to be your money. You may have to think the banks which are providing banking at the send- of-your-sms. The technology is at its highest level to move your money while you are on the move. If you are having non-WAP

enabled mobile handset, you can use the facility of SMS services. Capital Bank also provides SMS banking service to accountee for every transactions done by bank and customer are know about this transactions though SMS alerts. The following services provides by the Capital bank though SMS alerts :

Balance enquiry Last three transactions Cheque payment status Cheque book request Statement request Bill Payment

MONEY TRANSFER
Beside lending and depositing money, CAPITAL BANK also carry money from one corner of the globe to another. This act of banks is known as transfer of money. This activity is performed by Capital Bank with the tie-up of Western Union. Bank generally issue Demand Drafts, Banker's Cheques, Money Orders or other such instruments for transferring the money. This is a type of Telegraphic Transfer or Tele Cash Orders. With the use of high technology and varieties of product it seems that "Free" money transfers will become commonplace. We will see more bundling of tailored money services by banks and non-traditional entrants that will include "free" money transfers. Many banks will even use money transfer services as loss-leaders inorder to generate account openings and cross-sell opportunities. The price evolution of money transfer products for banks will be similar to that of consumer bill pay-the product is worth giving away as an account acquisition tool to win overall market share and establish banking relationships. By 2007, we will see a good percent of all foreign-born households doing some level of online banking. First-mover banks will start having a window of opportunity to include online transfer functionality within the next couple of years, which currently frequents traditional money transmitters such as Western Union. There is a terrific

opportunity for banks and non-banks to offer more robust global inter-institutional funds transfer services online. More than half of Western Union's customers today are already banked, and most do not have an alternative product marketed by their bank that is painless, quick, and cost-effective. That will change as banks offer transfer servics through their online channel

FUTURE PROSPECTS
Being a new emergent in the banking sector, this bank is regularly conducting its SWOT analysis and is taking several initiatives for achieving synergistic gains from the opportunities and the strengths as well as to mitigate the effect of he threats and the encountered weaknesses. The bank is taking numerous steps in the area of Product Development, Technology, Cost rationalization, marketing and HR development for building sustainable competitive advantage. The bank, in the future, has aggressive branch expansion programmed for increasing our presence, customer base and business volumes. The present economic scenario gives enormous growth opportunities to bank and is committed to make most of the opportunities.

FUTURE BANKING SCENARIO

In the present banking scenario of the country, the reserve bank of India has initiated a number of path breaking steps for improving prudential regulation. The higher provisioning requirement for NPAs included under doubtful for more than three years category effective from march 31, 2005, prohibiting banks from investing in unrated non SLR securities, advising banks to maintain capital charge for the market risk etc.

At the same time, the UPA Government s committed trust for building a better rural India to make the rural sector a big contributor in Indias growth story and the dedicated focus on infrastructure building and development provides enormous opportunity for investment. The bank being a Local Area Bank with utmost focus on the rural sector and infrastructure and development is eying to grab the opportunity with both hands to be a leader in governments endeavor of building better rural India in its area of operations.

BRANCH EXPANSION:
With the objective of having wide coverage and increasing urban presence along with strong focus on rural and semi-urban areas, the bank has opened a branch in Jalandhar City. The branch is performing exceptionally well and playing a vital role in creating strong brand equity in the urban region. The bank is committed to provide diversified product-mix, hi-tech banking services like Anywhere and Anytime banking, Internet Banking, Tele-Banking, depository etc. at par with new generation private sector banks and foreign banks. The bank is focusing hard on having a strong satisfied customer base from varied facets of the economy cycle be it from rural sector or urban sector, be it agriculturist or industrialist. The bank also proposes to open two more semi-urban branches in the current year. The bank is eying aggressively the retail business .

Head Office
Midas Corporate Park, IIIrd Floor,

37, G.T. Road, Jalandhar. Tel.0181-5051111, 5052222 Fax:0181-5053333 Jalandhar Nakodar Mahilpur Goraya Bhogpur Samrai Mehatpur Nurmahal Lohian Phagwara Kapurthala Shankar Begowal Hoshiarpur Malsian Rurkee

HIGH TECH BANKING

High tech banking is the order of the day. Today every bank aims at establishing a technology driven twenty first century banking facility. The management of the Capital Local Area Bank also has the same dream of providing the highest standards of the customer friendly computer savvy solutions in the rural sector. The bank has initiated the programmed to establish interconnectivity among all the branches and the end of calendar year 2005 will achieve this so that the customers can avail the best

facilities. The bank is also in the process of having tie up with Visa for making its debit card an international debit card. The bank constantly endeavors to innovate and provide the latest hitech products to uplift the rural sector. The revolutionary advancements and development in the spheres of information technology ids constantly turning banking industry into a hi tech industry and the bank is fully committed to keep pace with the recent developments in the field of information technology to provide world class services in its area of jurisdiction.

CHAPTER-III

OBJECTICVES

OBJECTIVES OF THE STUDY

To know how bank consumers value and evaluate internet as a source of information To study the demographic characteristics of online banking customers

To know the major barriers to online banking services.

CHAPTER-IV

RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
Research is an art of scientific investigation. In other word research is a scientific and systematic search for pertinent information on a specific topic. The logic behind taking research methodology into consideration is that one can have knowledge about

the method and procedure adopted for achievement of objectives of the project. With the adoption of this others can evaluate the results also. Its main aim is to keep the researchers on the right track. The methodology adopted for studying the objectives was surveying the in-house customers of capital local area banks in the city of Jalandhar. So keeping in view the nature of requirements of the study to collect all the relevant information regarding the extent of awareness of the in-house customers using E-banking facilities offered by Capital bank, direct personal interview method with structured questionnaire was adopted for the collection of primary data. Secondary data has been collected through the various internet site by surfing on Internet and from the records available with the bank. And the guide Mr. Simratpal Singh in the organization was consulted at many times.

SCOPE OF THE STUDY Slowly but steadily, the Indian customer is moving towards the internet banking. The ATM and the Net transactions are becoming popular. But the customer is clear on one thing that he wants net-banking to be simple and the banking sector is matching its steps to the march of technology. The world is changing at a staggering rate and technology is considered to be the key driver for these changes around us. A study of these factors is very crucial for

determining growth direction of online banking service. Due to the time and resources constraints, it is not possible to study it on such a big scale. In view of this fact the scope of the study has been restricted to the state of Punjab (Jalandhar, Ludhiana) only. For the purpose of study the customers of only private sector banks will be considered .this has been done as private banks are offering and promoting e banking services more than public sector banks.

SAMPLE DESIGN AND SIZE

Convenient sampling method will be used to get the information about online banking. This method is used because we are interested in exploring gender, age, income or occupation disparities in terms of online banking in the population. Sample size will be of 50 people from the Jalandhar city. RESEARCH DESIGN

Explorative or Formulative research design will be adopted to carry out this research. As we know that the exploratory studies are conducted to gain familiarity with the phenomenon or to achieve new insight into it. This study will be basically dealing with the collection of qualitative information relating to the online banking services. DATA COLLECTION METHOD Data was collected using two main methods:

COLLECTION OF DATA

Secondary Data

Primary Data

Journals and Publications of Capital Banks Annuportal ResCapital Manuals/Brouchers of Bank Bank

Respondents

Questionnaire

PRIMARY DATA COLLECTION:

Primary data do not exist already in

records and publications. The researcher has to gather primary data a fresh for the specific study undertaken by him. The primary data are explicitly gathered for a specific research project at hand.

SECONDARY DATA COLLECTION: The Secondary data refer to those

data which are gathered for some other purpose and are already available in the internal records and commercial, trade, or government publications. In my project, the Secondary data was collected by going through various newspapers, magazines,
Websites of Capital Bank

(www.capitalbank.co.in) journals and web sites of Capital Bank (refer Bibliography for details).

TOOLS OF DATA ANALYSIS

The data so collected will be arranged in a tabular form. Keeping in view the objectives of the research and nature of the data, various statistical tools like simple ratios, ANOVA etc may be used for data analysis.

LIMITATIONS

As a research is based on a sample, therefore, the findings may not reveal the factual information about the research problem, though an utmost care will be taken to select a truly representative sample.

There may be some bias in the responses of the respondents which can not be ruled out fully.

Sudden change in the e- banking practices during the course of research can affect the results.

CHAPTER-V

Analysis & Interpretation

DATA COLLECTION THROUGH QUESTIONNAIRE

1. Gender

GENDER Male Female Total

TOTAL 38 12 50

PERCENTAGE 76% 24% 100

Gender
24%

Male Female

76%

Interpretation AGE BRACKET Under 25 25-40 40 and above TOTAL TOTAL NO. 19 30 1 50 PERCENTAGE 38% 60% 2% 100%

From above its clear that most of the respondents studied by us are male i.e. 76% and only 24% are females. The maximum no. of our respondents are male so maximum result which we will get will be from the male respondents and female play some what less in finding the result but the data is sufficient.

2. In Which Age Bracket Do You Fall?

AGE BRACKET
2% 38% Under 25 25-40 60% 40 and above

Interpretation

Above Pie-Chart clearly shows that 38% of total respondents studied fall under 25 age bracket, 60% between 25 to 40 and 2% are 40 and above. The respondents who fall in between the age of 25-40 play very important role in finding the result but we only get one person who is of 40 above not the response get from him is negative.

3. What is your Occupation?

OCCUPATION Housewife Professional Businessman Serviceman Student Self employed TOTAL TOTAL NO. 1 16 4 20 8 1 50 PERCENTAGE 2% 32% 8% 40% 22% 2% 100%

OCCUPATION

20 15
percentage

10 5 0
Occupation

Housewife Professional Businessman Serviceman Student Self employed

Interpretation From above its clear that majority of our respondents were serviceman and professional. I have collected the data from various occupations of persons but the maximum data is colleted from services man and professionals and I am fail to get the data from housewife, businessman and from self employed persons.

4. Internet Banking Facility provided by the Banks

USE INTERNET BANKING Yes No TOTAL TOTAL 31 19 50 PERCENTAGE 62% 38% 100%

Figure 4.1
24% YES NO

76%

Interpretation From above its clear that most of the respondents know or use the internet banking facility provided by the bank i.e. 76% and only 24% dont use or know about this facility. Maximum no. of service man and professionals say that they use the internet banking facility provided by the bank and some say they dont know or use this facility.

5. Mobile Banking Facility provided by the Bank.

USE MOBILE BANKING Yes No TOTAL

TOTAL 33 17 50

PERCENTAGE 66% 34% 100%

Figure 4.1
34% YES NO

66%

Interpretation From above its clear that most of the respondents know or use the mobile banking facility provided by the bank i.e. 66% and only 34% do not know or use this facility. The result show that maximum no. of customer know or use the mobile banking facility provided by the bank but the customer who dont use this facility is because of lack of knowledge.

6. ATM Facility provided by the Bank.

USE ATM FACILITY Yes No TOTAL TOTAL 49 1 50 PERCENTAGE 98% 2% 100%

Figure 4.1
2%

YES NO

98%

Interpretation From the above its clear that most of the respondents say that they know about the ATM facility of the bank i.e. 98% and only 2% say that they do not use or know about this

facility. The result show that maximum no. of customer know or use the ATM facility provided by the bank but the customer who dont use this facility are very less so we can say there is maximum awareness.

7. How often do you use online banking?

USE ONLINE BANKING Once a day Once in two days Once a week Once every two weeks Once a month Not used TOTAL TOTAL NO. 4 8 19 2 16 1 50 PERCENTAGE 8% 16% 38% 4% 32% 2% 100%

ONLINE BANKING
Once a day
20 15 Responses 10 5 0 use of online banking

Once in two days Once a week Once every two weeks Once a month not used

Interpretation

From above its clear that online banking is not frequently used by our respondents. They mostly use them once a week. This result show that the importance of online banking because the customer of bank use online banking once every week this is only the result of customer adaptability of E-banking to make their life easier

8.What are the major reasons for using or not using internet banking?
Major reasons for using internet banking Convenience Security and privacy Comfort\satisfaction Perceived advantage over conventional banking Total of who can use internet banking Total Respondents 18 5 13 10 31

70% 60% 50% 40% 30% 20% 10% 0% AGREE

Interpretation From above its clear that majority of our respondents Say 62% were using internet banking because they believe that it is convenience and get comfort/satisfaction while using internet banking and rest of the people dont know more about E- Banking.

9. Accessing Your Bank Online

ACCESSING YOUR BANK ONLINE very easy quite easy Difficult TOTAL TOTAL NO. PERCENTAGE

22 20 8 50

44% 40% 16% 100%

HOW DO YOU ACCESS ONLINE BANKING

16% 44%

very easy quite easy difficult

40%

Interpretation

From the above figure its clear that most of our respondents find accessing online banking as very easy. With this result we find that the professionals use or access the online banking very easily but still her is some people who feel it is quite easy of using online banking and some feel it is difficult of access online banking.

10. Rating the online banking

Rating for quality of information Very dissatisfied 1 Dissatisfied Average Satisfied 2 3 4 TOTAL NO. 4 4 11 18 13 50 PERCENTAGE 8% 8% 22% 36% 26% 100%

Very satisfied 5 TOTAL

Rating online banking as per quality of information Very

20 15 10 5 0
Rating

dissatisfied 1 dissatisfied 2 Average 3 Satisfied 4 Very satisfied 5

Interpretation

From above its clear that majority of our respondents were satisfied and very satisfied with the quality of information provided at online banking. This result show that the customers are satisfied with the information quality provided by the bank, quality of information play very important role if the customer understand what is provided then he can demand it more otherwise not.

Rating for quality and quantity of content Very dissatisfied 1 Dissatisfied Average Satisfied 2 3 4

TOTAL NO. 3 1 23 16 7 50

PERCENTAGE 6% 2% 46% 32% 14% 100%

Very satisfied 5 TOTAL

Rating online banking as per quality and quantity of content

25 20 15 10 5 0
Rating

Very dissatisfied 1 dissatisfied 2 Average Satisfied 3 4

Very satisfied 5

Interpretation From above its clear that majority of our respondents get average and satisfied with the quality and quantity of content provided at online banking. Quantity of Rating for security of personal information Very dissatisfied 1 Dissatisfied Average Satisfied 2 3 4 TOTAL NO. 6 5 9 14 16 50 PERCENTAGE 12% 10% 18% 28% 32% 100%

Very satisfied 5 TOTAL

information also play vital role in online banking because the customer of bank want simple information and as per their requirement only then he get satisfied.

Rating online banking for security of personal information

20 15 10 5 0

Very dissatisfied 1 dissatisfied 2 Average Satisfied

Rating

3 4

Very satisfied 5

Interpretation From above its clear that majority of our respondents were very satisfied and satisfied with the security of personal information provided at online banking. This result show that the bank customers believe that their personal information is secure while using online banking facility provide

11. Identify and rank the problems that you have faced so far while using internet banking. (1 is the least faced problem and 5 is the most faced problem)

100%
Criteria (A) Identity theft 60% (B) Security issues 40% (C) Electricity shortage 20% (D) Banks server down (E) Internet 0% connectivity issues (F) Difficulty in claiming false transactions (G) Difficulty in understandin g the websites

80%

1 15 11

8% 1 6 30

28 12 15

1 5

% 24 % 30 % 10 % 14 % 28 % 28 % 34 %

Ranks

22 12% 21 42 % 7 1514 % 4 8 %

8%

10

15 5
7

83 4 68 610 5
6

2 16 11
% 20 % 15 12 % 7 30 % 7 24 % 10

8 %

11

21 15
12

14

(A)

(B)
14

{C}
5

(D)

% 10 12 % 6 12 14 % 11 22 % 4 22 11 % 5

8 % 1 6 11 12
4

8 5
1 5 1 4

4 5

14
2 14 1

8 Not % Total % 2answer No answer 6 2 2% 7 8 16 50 most faced 1005 % % much faced100 4 2% 8 16 50 17 % % Average 3 8% 8 16 50 100 less faced % 2 % 4% 14 8 16 50 least faced 100 1
% 2% 8 8

(E)

(F)
4 8%

(G)

% 16 % 16 % 16 %

50 50

% 100 % 100 % 100 %

14

28 % 28 %

Problems %
14 % 2

10 % 4%

14

17

4%

50

Interpretation (A) From above its clear that 15 respondent least faced the problem of identity theft, 12 respondents less faced the problem, 8 respondents average facing this problem, 6 respondents much faced the problem 1respondents most faced and 8 respondents has not given any answer. So the result is positive. (B) From above its clear that 11 respondent least faced the problem of security theft, 15 respondents less faced the problem, 10 respondents were at average in facing this problem, 5 respondents much faced the problem, 1 respondent most faced and 8 respondents has not given any answer. So we can say result is positive.

(C) From above its clear that 21 respondent least faced the problem of electricity shortage, 5 respondents less faced the problem, 6 respondents were at average in facing this problem, 6 respondents much faced the problem, 4 respondent most faced and 8 respondents has not given any answer. So we can say result is positive. (D) From above its clear that 7 respondent least faced the problem of bank server down, 7 respondents less faced the problem, 15 respondents were at average in facing this problem, 11 respondents much faced the problem, 2 respondent most faced and 8 respondents has not given any answer. So we can say result is average. (E) From above its clear that 4 respondent least faced the problem of internet connectivity issues, 14 respondents less faced the problem, 12 respondents has average problem, 11 respondents much faced the problem, 1 respondent most faced and 8 respondents has not given any answer. So we can say ratio of facing problem is less. (F) From above its clear that 14 respondent least faced the problem of difficulty in claiming false transaction , 14 respondents less faced the problem, 5 respondents has average problem, 5 respondents much faced the problem, 4 respondent most faced and 8 respondents has not given any answer. So we can there is very less problem. (G) From above its clear that 14 respondent least faced the problem of difficulty in understanding the website, 17 respondents less faced the problem, 7 respondents has average problem, 2 respondents much faced the problem, 2 respondent most faced and 8 respondents has not given any answer. So we can say problem to understand the website is very less.

CHAPTER-VI

Findings & Recommendati ons

FINDINGS OF THE STUDY

The most of the respondents were happy with the ATM service provided by Capital Bank but however it could me more improvised.

The attitude of Capital bank staffs regarding the customers is very friendly and they should be very polite while handling them.

Number of problems faced by people is regarding ATMs of Capital Bank. People are more satisfied from the Capital Bank due to the better services provided by them in terms of speedy transactions, fully computerized facilities, more working hours good Investment Advisory services, efficient and co-operative staff, better approach to Customer Relationship Management.

In Capital Banks proper promotional activities should be taken up so as to make the population aware of the E-banking services provided by the banks even in rural areas.

The facility that was availed by most of the people at Capital Bank was that of ATM/Debit Cards. The least availed facility was that of net banking or online transfer of funds.

RECOMMENDATIONS

Capital Bank should obey the RBI norms and provide facilities as per the

norms, which are not being followed by the banks. While the customer must be given the prompt services and the bank officer should not have any fear on mind to provide the facilities as per RBI norms to the units going sick. Internet Banking facility must be made available in all branches of Capital Banks. Each section of every Capital Bank should be computerized even in rural areas also. Personalized banking should be given a thrust as more and more banks are Covering up the towns in rural areas with ATMs so that the people in those achieving in usual services. areas can also avail better services. No limit on cash withdrawal on ATM cards. One counter service and 24-Hour and 7-Days banking. Bank should focus on the gateway (visa) where the capital bank is lacking which must be add in there debit card so the customer can do shopping any where. Prompt dealing with permanent customers and speedy transactions without harassing the customers. Fair dealing with the customers. More contributions from the employees of the bank. The staff should be co-operative, friendly and must be capable of understanding the problems of the customers.

CONCLUSION

This study attempted to identify key quality attributes of internet banking services by analyzing internet banking customers & their comments on banking experience. The findings of this study shows that despite of many advantages of online banking People still consider it as a alternative for analyzing their bank records. Although every bank today provides the facility of online banking but most of people use it only once a month. This reason is that in case of internet banking interpersonal interaction with customers is seldom possible. Identification & measurement of customers expectations of the internet banking services provide a frame of reference & their related quality dimension. The main factors which persuade people to use online banking are comfort & convenience & the facility which attracts them most is quality & quantity of information. Therefore the implementation of quality initiatives should begin with defining customers need & preferences & their related quality dimensions

BIBLIOGRAPHY

BOOKS Singh, Harpreet, Concepts & Practices of Research Methodology, Kalyani publishers Kothari, C.R, Research Methodology: Methods & Techniques, New age international Publishers Malhotra, Naresh k, Marketing Research, Pearson Education

WEBSITES www.Papers4u.com www.Emeraldinsight.com www.Custompapers.com www.google.co.in www.capitalbank.org OTHER SOURCES valuable information from experience staff written information and printed material from capital bank

Annexure

QUESTIONNAIRE
OBJECTIVES: o o o To know how bank consumers value and evaluate internet as a source of information To know the major barriers to online banking services To study the demographic characteristics of online banking customers Name ________________________ Address. ________________________ Contact No. ____________________ 1. Gender Male Female

2. Please specify in which age bracket do you fall? Under 25 25-40 40 above

3. What is your Occupation? Housewife Professional Businessman

Serviceman

Student

Self Employ

Other (please specify) ____________________

4. Do you know about the Internet Banking Facility provided by the Bank? Yes No

5. Do you know about the mobile Banking Facility provided by the Bank? Yes No

6. Do you know about the ATM Facility provided by the Bank? Yes No

7. How often do you use online banking, if you use? Once a day once in two days once a week

Once every two weeks

once a month

8. What are the major reasons for using or not using internet banking? IF YOU USE o Convenience IF YOU DONT USE o Lacking knowledge

o Security and privacy

o Insecurity of data

o Comfort\ satisfaction

o Inaccessibility of internet

o Perceived advantages over conventional banking

o Pricing

Other Reasons ___________________ 9. How easy do you find accessing your bank online? Very easy quite easy Difficult

10. If you use, rate your online banking facility on the following criteria using a scale of 1 to 5 (where 1 is very dissatisfied and 5 is very satisfied) Criteria Quality of information Quality and Quantity of content Security of personal information 11. Please identify and rank the problems that you have faced so far while using internet banking? (1 is the least faced problem and 5 is the most faced problem) Criteria Identity theft Security issues Electricity shortage Banks server down Internet connectivity issues Difficulty in claiming false transactions Difficulty in understanding the websites 1 2 3 4 5 1 2 3 4 5