EXECUTIVE SUMMARY

E-banking is fast becoming a norm in the developed world, and is being implemented by
many banks in developing economies around the globe. The main reason behind this success is
the numerous benefits it can provide, both to the banks and to customers of financial services.
For banks, it can provide a cost effective way of conducting business and enriching relationship
with customers by offering superior services, and innovative products which may be customized
to individual needs. For customers it can provide a greater choice in terms of the channels they
can use to conduct their business, and convenience in terms of when and where they can use e-
banking.
Over the last decade India has been one of the fastest adopters of information technology,
particularly because of its capability to provide software solution to organizations around the
world. This capability has provided a tremendous impetuous to the domestic banking industry in
India to deploy the latest in technology, particularly in the Internet banking and e-commerce
areas. Technology is playing a major role in increasing the efficiency, courtesy and speed of
customer service. An Online Banking user is expected to perform transactions online such as
Checking account balance and transaction history, Paying bills, Transferring funds between
accounts, Requesting credit card advances, ordering checks, Managing investments and stocks
trading.
From a banks perspective, using the Internet is more efficient than using
other distribution mediums because banks are looking for an increased customer base. Moreover
Internet delivery offers customized service to suit the needs and the likes of each user. Mass
customization happens effectively through Online Banking. It reduces cost and replaces time
spent on routine errands with spending time on business errands. Online Banking means less
staff members, smaller infrastructure demands, compared with other banking channels. From the
customers perspective, Online Banking provides a convenient and effective way to manage
finances that is easily accessible 24 hours a day, seven days a week. In addition information is up
to date. Nevertheless Online Banking has disadvantages for banks like how to work the
technology, set-up cost, legal issues, and lack of personal contact with customers. And for
customers there are security and privacy issues.
 Chapter I

Theoretical Background

1. INDUSTRY ANALYSIS

INTRODCTION OF BANKING INDUSTRY

BANKING:

The word "BANK" is derived from a Latin word 'Bancus' or 'Banque', which means a bench. In
the early days the European moneylenders and moneychangers used to sit on the benches and
exhibit coins of different countries in big heaps for the purpose of changing and lending money,:

As per Banking Regulation Act 1949 Section 5(b)

"Banking means, accepting for the purpose of lending or investment, of deposits of money from
the public, repayable on demand or otherwise, and withdrawal by cheque, draft, or otherwise."

The banking industry is and always has been one of the most important aspects of all
industries. The reason being, every other industry needs banks to take part in any investments or
financial movements as a way to better their position in their industries. The industry analysis
will look at how and why the banking industry has been able to hold this position for so long
through the Competitive Landscape.

Banking in India has a long and elaborate history of more than 200 years. The beginning
of this industry can be traced back to 1786, when the countrys first bank, Bank of Bengal, was
established. But the industry changed rapidly and drastically, after the nationalization of banks in
1969. As a result, the public sector banks began experiencing numerous positive changes and
enormous growth. Then came much-talked-about liberalization and economic reforms that
allowed banks to explore new business opportunities and not just remain constrained to
generating revenues from mere borrowing and lending. This provided the Indian banking
scenario a remarkable facelift that only continues to get better with time. However, even
today, despite the foray of foreign banks in the country, nationalized banks continue to be biggest
lenders in the country. This is primarily due to the size of the banks and the penetration of the
networks.

INDIAN BANKING SCENARIO

The Banking industry comprises of segments that provide financial assistance and
advisory services to its customers by means of varied functions such as commercial
banking, wholesale banking, personal banking, internet banking, mobile banking, credit unions,
investment banking and the like.

With years, banks are also adding services to their customers. The Indian banking
industry is passing through a phase of customers market. The customers have more choices in
choosing their banks. A competition has been established within the banks operating in India.

With stiff competition and advancement of technology, the services provided by banks
have become more easy and convenient. The past days are witness to an hour wait before
withdrawing cash from accounts or a cheque from north of the country being cleared in one
month in the south..

Bank of Hindustan, set up in 1870, was the earliest Indian Bank . Banking in India on
modern lines started with the establishment of three presidency banks under Presidency Bank's
act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras.

The commercial banking structure in India consists of: Scheduled Commercial Banks &
Unscheduled Banks. Banking Regulation Act of India, 1949 defines Banking as "accepting, for
the purpose of lending or investment of deposits of money from the public, repayable on demand
and withdrawal by cheques, draft, order or otherwise."

The arrival of foreign and private banks with their superior state-of-the-art technology-
based services pushed Indian Banks also to follow suit by going in for the latest technologies so
as to meet the threat of competition and retain customer base.
 The evolution of IT services outsourcing in the Indian banks has presently moved on to
the level of Facilities Management (FM). Banks now looking at business process management
(BPM) to increase returns on investment, improve customer relationship management (CRM)
and employee productivity.For, these entities sustaining long-term customer relationship
management (CRM) has become a challenge with almost everyone in the market with similar
products.

CHANGES IN THE STRUCTURE OF BANKS

The financial sector reforms ushered in the year 1991 have been well calibrated and
timed to ensure a smooth transition of the system from a highly regulated regime to a market
economy. The first phase of reforms focused on modification in the policy framework,
improvement in financial health through introduction of various prudential norms and creation of
a competitive environment. The second phase of reforms started in the latter half of 90s, targeted
strengthening the foundation of banking system, streamlining procedures, upgrading technology
and human resources development and further structural changes. The financial sector reforms
carried out so far have made the balance sheets of banks look healthier and helped them move
towards achieving global benchmarks in terms of prudential norms and best practices.

Technology is expected to be the main facilitator of change in the financial sector.

Implementation of technology solutions involves huge capital outlay. Besides the heavy
investment costs, technology applications also have a high degree of obsolescence. Banks will
need to look for ways to optimize resources for technology applications. In this regard, global
partnerships on technology and skills sharing may help.

The pressure on capital structure is expected to trigger a phase of consolidation in the

banking industry. Banks could achieve consolidation through different ways. Mergers between
public sector banks or public sector banks and private banks could be the next logical thing /
development to happen as market players tend to consolidate their position to remain in
competition.

Public Sector Banks had, in the past, relied on Government support for capital
augmentation. However, with the Government making a conscious decision to reduce its
holding in Banks, most Banks have approached the capital market for raising resources. It is
expected that pressures of market forces would be the determining factor for the consolidation in
the structure of these banks. If the process of consolidation through mergers and acquisitions
momentum, that could see the emergence of a few large Indian banks with international
character. There could be some large national banks and several local level banks.

ROLE OF THE RESERVE BANK IN THE BANKING SECTOR

The Reserve Bank of India, being the central bank of the country, has numerous monetary
and financial functions to overlook. Even in a liberalized country such as the United States, the
Federal Reserve has similar functions to perform. This implies that the market mechanism should
not be given the sole rein to runs the banking industry and setting the market rates. The functions
of the Reserve Bank which have a direct bearing on the banking sector are:

1. Financial Supervision-
This aspect of the Reserve Bank is under the aegis of a Board for Financial Supervision
(BFS). The objective of the BFS is: to undertake consolidated supervision of the financial sector
comprising commercial banks, financial institutions and non-banking finance companies. The
functions that come under the above mentioned objectives are:

a. Restructuring of the system of bank inspections.

b. Introduction of off-site surveillance.
c. Strengthening of the role of statutory auditors and
d. Strengthening of the internal defenses of supervised institutions.
Thus, the BFS does such acts as the supervising financial institutions, consolidated
accounting, looking at legal issues in bank frauds, providing assessments of non-performing
assets and maintaining a supervisory rating model for banks.

2. Monetary Authority-
The Reserve Bank is the monetary authority of the country. This implies that the Reserve
Bank formulates implements and monitors the monetary policy of the country. The various
monetary policies involves the availability of liquidity in the economy the amount of money
supply to the economy), and setting the interest rates in the country. These rates include the
Statutory Liquidity Ratio (SLR), the Cash Reserve Ratio (CRR) and the Cash Adequacy Ratio
(CAR) among others. By this function, the Reserve Bank maintains price stability in the
economy and ensures that cash flow to various (important) sectors is maintained. In relation to
the banking industry, the setting of interest rates is of utmost importance. This limit prescribes
the conduct of the banks in the economy. It also acts as an entry barrier to the sector.

3. Regulator of the Banking System

Being the regulator of the banking, the Reserve Bank prescribes a set of broad
parameters from within which the countrys banking and banking and financial system
functions". The specific aims of financial regulation are usually:

a) To enforce applicable laws.

b) To prosecute cases of market misconduct, such as insider trading.
c) To license providers of financial services.
d) To protect clients, and investigate complaints.
e) To maintain confidence in the financial system.
It is evident from these points that the Reserve Bank does have an amount of control over
the functioning and the conduct of the banks in the sector. The Reserve Bank and SEBI
(Securities and Exchange Bureau of India) thus can even force banks to withdraw from the sector
in the case of occurrence of unfair practices.

4. Banker to the banks

The Reserve Bank acts as the banker to the various banks in the country and maintains
banking accounts to all the scheduled banks in the country.

BANKS IN INDIA

MAJOR BANKS IN INDIA

ABN-AMRO Bank Indian Overseas Bank
Abu Dhabi Commercial Bank IndusInd Bank
American Express Bank ING Vysya Bank
Andhra Bank Jammu & Kashmir Bank
Allahabad Bank JPMorgan Chase Bank
AXIS Bank Karnataka Bank
 Bank of Baroda
Karur Vysya Bank
Bank of India
Laxmi Vilas Bank
Bank of Maharastra
Oriental Bank of Commerce
Bank of Punjab
Punjab National Bank
Bank of Rajasthan
Punjab & Sind Bank
Bank of Ceylon
Scotia Bank
BNP Paribas Bank
South Indian Bank
Canara Bank
Standard Chartered Bank
Catholic Syrian Bank
State Bank of India (SBI)
Central Bank of India
State Bank of Bikaner & Jaipur
Centurion Bank
State Bank of Hyderabad
China Trust Commercial Bank
State Bank of Indore
Citi Bank
State Bank of Mysore
City Union Bank
State Bank of Saurastra
Corporation Bank
State Bank of Travancore
Dena Bank
Syndicate Bank
Deutsche Bank
Taib Bank
Development Credit Bank
UCO Bank
Dhanalakshmi Bank
Union Bank of India
Federal Bank
United Bank of India
HDFC Bank
United Bank Of India
HSBC ICICI Bank
United Western Bank
IDBI Bank
UTI Bank
Indian Bank
The Banks in India and their Assets,Branches & ATMs

Total Assets, US$b (March 31,

Rank Bank 2015) Branches ATMs

1 State Bank of India 431.95 16,333 54,560

2 Bank of Baroda 117.42 5,198 8,030

3 ICICI Bank 103.00 4,450 13,900

4 Punjab National Bank 101.75 6,560 8,348

5 Bank of India 100.03 4,892 6,771

6 HDFC Bank Ltd 97.12 4,014 11,766

7 Canara Bank 89.36 5,682 8,533

8 Axis Bank Ltd 78.00 2,959 12,922

9 Union Bank of India 61.36 4,078 7,020

10 IDBI Bank 56.94 1,717 3,000

11 Central Bank of India 50.04 4,695 4,835

12 Syndicate Bank 48.69 3,552 3,427

13 Indian Overseas Bank 45.70 3,381 3,571

14 UCO Bank 39.34 3,020 2,096

15 Oriental Bank of Commerce 36.88 2,251 2,488

16 Allahabad Bank 36.42 3,107 n/a

17 Corporation Bank 36.16 2,298 2,933

18 Indian Bank 30.88 2,409 2,344

19 Andhra bank 30.02 2,507 2,232

 20 Kotak Mahindra Bank 23.77 684 1,273

21 Bank of Maharashtra 23.37 1,880 1,849

22 Vijaya Bank 22.82 1,618 1,383

23 Citibank India 22.20 45 700

24 HSBC India 22.02 50 150

Standard Chartered Bank

25 India 21.08 100 n/a

INTRODUCTION TO THE
ORGANIZATION

COMPANY DESCRIPTION

AXIS BANK

Axis Bank India, the first bank to begin operations as new private banks in 1994 after the
Government of India allowed new private banks to be established. Axis Bank was jointly
promoted by the Administrator of the specified undertaking of the

Unit Trust of India (UTI-I)

 Life Insurance Corporation of India (LIC)
General Insurance Corporation Ltd.
Also with associates viz. National Insurance Company Ltd., the New India Assurance Company,
The Oriental Insurance Corporation and United Insurance Company Ltd.

EVOLUTION:

UTI was established in 1964 by an Act of Parliament; neither did the Government of India own it
nor contributes any capital. The RBI was asked to contribute one-half of its initial capital of Rs 5
crore, and given the mandate of running the UTI in the interest of the unit-holders. The State
Bank of India and the Life Insurance Corporation contributed 15 per cent of the capital each, and
the rest was contributed by scheduled commercial banks which were not nationalized then. This
kind of structure for a unit trust is not found anywhere else in the world. Again, unlike other unit
trusts and mutual funds, the UTI was not created to earn profits.

In the course of nearly four decades of its existence, it (the UTI) has succeeded phenomenally in
achieving its objective and has the largest share anywhere in the world of the domestic mutual
fund industry. '' The emergence of a "foreign expert" during the setting up of the UTI makes an
interesting story. The announcement by the then Finance Minister that the Government of India
was contemplating the establishment of a unit trust caught the eye of Mr. George Woods, the then
President of the World Bank. Mr. Woods took a great deal of interest in the Indian financial
system, as he was one of the principal architects of the ICICI, in which his bank, First Boston
Corporation Bank, had a sizeable shareholding. Mr. Woods offered, through Mr. B.K. Nehru,
who was India's Executive Director on the World Bank, the services of an expert. The Centre
jumped at the offer, and asked the RBI to hold up the finalization of the unit trust

Proposals till the expert visited India. The only point Mr. Sullivan made was that the provision to
limit the ownership of units to individuals might result in unnecessarily restricting the market for
units. While making this point, he had in mind the practice in the US, where small pension funds
are an important class of customers for the unit trusts. The Centre accepted the foreign expert's
suggestion, and the necessary amendments were made in the draft Bill. Thus, began corporate
investment in the UTI, which received a boost from the tax concession given by the government
in the 1990-91 Budget. According to this concession, the dividends received by a company from
investments in other companies, including the UTI, were completely exempt from corporate
income tax, and provided the dividends declared by the investing company were higher than the
dividends received.

The result was a phenomenal increase in corporate investment which accounted for 57 per cent
of the total capital under US-64 scheme. Because of high liquidity the corporate sector used the
UTI to park its liquid funds. This added to the volatility of the UTI funds. The corporate lobby
which perhaps subtly opposed the establishment of the UTI in the public sector made use of it for
its own benefits later. The Government-RBI power game started with the finalization of the UTI
charter itself. The RBI draft of the UTI charter stipulated that the Chairman will be nominated by
it, and one more nominee would be on the Board of Trustees. While finalizing the draft Bill, the
Centre changed this stipulation. The Chairman was to be nominated by the Government, albeit in
Consultation with RBI. Although the appointment was to be made in consultation with the
Reserve Bank, the Government could appoint a person of its choice as Chairman even if the
Bank did not approve of him. Later on in 2002 the UTI was renamed to Axis Bank.

BUSINESS DESCRIPTION

The Bank's principal activities are to provide commercial banking services which include
merchant banking, direct finance, infrastructure finance, venture capital fund, advisory,
trusteeship, forex, treasury and other related financial services.

CORPORATE PROFILE

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum
of financial services to customer segments covering Large and Mid Corporates, SME,
Agriculture and Retail Businesses.

The Bank has a large footprint of 3,120 domestic branches (including extension counters) and
12,922 ATMs spread across the country as on 12 August 2016. The Bank also has 9 overseas
branches / offices in Singapore, Hong Kong, Shanghai, Colombo, Dubai, DIFC - Dubai and Abu
Dhabi and overseas subsidiary at London UK.

Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India
(SUUTI) (then known as Unit Trust of India),Life Insurance Corporation of India (LIC), General
Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India
Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance
Company Ltd. The shareholding of Unit Trust of India was subsequently transferred to SUUTI,
an entity established in 2003.

With a balance sheet size of Rs.5,25,468 crores as on 31st March 2016, Axis Bank has achieved
consistent growth and stable asset quality with a 5 year CAGR (2010-11 to 2015-16) of 17% in
Total Assets, 14% in Total Deposits, 19% in Total Advances and 19% in Net Profit.

The Corporate Office of Axis Bank is located at Axis House Mumbai. Axis House has received
the Platinum rating awarded by the US Green Building Council for its environment friendly
facilities and reduction of carbon emission.

SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries:

Axis Capital Ltd.

Axis Private Equity Ltd.
Axis Trustee Services Ltd.
Axis Asset Management Company Ltd.
Axis Mutual Fund Trustee Ltd.
Axis Bank U.K. Ltd.
Axis Securities Ltd.
Axis Finance Ltd.
Axis Securities Europe Ltd.
Axis Treds Limited

PROMOTERS:

UTI Bank Ltd. has been promoted by the largest and the best Financial Institution of the
country,UTI. The Bank was set up IN 1993 with a capital of Rs. 115 crore, with

UTI contributing Rs. 100 crore,

LIC - Rs. 7.5 crore
GIC and its four subsidiaries contributing Rs. 1.5 crore each.

Axis Bank is today one of the most competitive and profitable banking franchise in India.
Which can be clearly seen by an analysis of its comprehensive portfolio of banking services
including Corporate Credit, Retail Banking, and Business Banking,Capital Markets, Treasury
and International Banking.

SERVICES PROVIDED BY AXIS BANK

Retail Banking:

In the retail banking category, the bank offers services such as lending to individuals/small
businesses subject to the orientation, product and granularity criterion, along with liability
products, card services, Internet banking, Automated teller machines (ATM) services, depository,
financial advisory services, and Non-resident Indian (NRI) services.Axis bank is a participant in
RBI's NEFT enabled participating banks list.

Corporate Banking:

1.Credit:
The Bank offers various loan and fee-based products and services to Large and Mid-corporate
customers and Small and Medium Enterprise (SME) businesses. These products and services
include cash credit facilities, demand and short-term loans, project finance, export credit,
factoring, channel financing, structured products, discounting of bills, documentary credits,
guarantees, foreign exchange and derivative products. Liability products including current
accounts, certificates of deposits and time deposits are also offered to large and mid-corporate
segments.

2.Transaction Banking:

Formed in April 2015, TxB provides integrated products and services to customers in areas of
current accounts, cash management services, capital market services, trade, foreign exchange and
derivatives, cross-border trade and correspondent banking services and tax collections on behalf
of the Government and various State Governments in India.

3.Treasury:

The Treasury manages the funding position of the Bank and also manages and maintains its
regulatory reserve requirements. It invests in sovereign and corporate debt instruments and
engages in proprietary trading in equity and fixed income securities, foreign exchange, currency
futures and options. It also invests in commercial papers, mutual funds and floating rate
instruments as part of the management of short-term surplus liquidity. In addition, it also offers a
wide range of treasury products and services to corporate customers.

4.Syndication:

The Bank also provides services of placement and syndication in the form of local currency
bonds, rupee and foreign term loans and external commercial borrowings.

5.Investment Banking and Trustee Services:

The Bank provides investment banking and trusteeship services through its owned subsidiaries.
Axis Capital Limited provides investment banking services relating to equity capital markets,
institutional stock broking besides M&A advisory. Axis Trustee Services Limited is engaged in
trusteeship activities, acting as debenture trustee and as trustee to various securitization trusts.
6.International Banking:

The Bank continues to offer corporate banking, trade finance, treasury and risk management
solutions through the branches at Singapore, Hong Kong, DIFC, Shanghai and Colombo, and
also retail liability products from its branches at Hong Kong and Colombo.The representative
office at Dhaka was inaugurated during the current financial year.Through the Representative
Office at Dhaka.

INITIATIVES

Axis Pay:

The newly introduced UPI will facilitate banking transactions using only a single 'Virtual
Payment Address' (VPA).While transferring money to an account, the sender will not be forced
to feed the slew of details like the account number and bank's IFSC Code, but can transact using
only the VPA.

Ping Pay:

The bank launched Ping Pay in 2015, which is a multi-social payment solution that allows
customers to transfer funds using their smart phones to both Axis Bank accounts and other banks'
account holders.

Augmented Reality:

Axis Bank augmented reality feature within its mobile app which lists all the dining destinations,
property lists, shopping centers, bank ATMs, branches and many other things not only as a
location on GPS but also in real life pictures along with distance and directions.

Axis Thought Factory:

The innovation hub located in Bengaluru, has an in-house innovation team and an accelerator
programme. The Innovation Lab work closely with the startup community that is redefining
banking in the digital era. With this launch, Axis Bank becomes the first Indian bank to introduce
a dedicated innovation lab in the country.

Insta Personal Loan:

Axis Bank provide a 24X7 Instant Personal Loan on smartphones and ATM kiosks. Customers
can get instant loan approval and disbursement which gets credited directly into their account.

Locker Booking:

The Bank has launched an online locker booking facility through the Mobile App; allow
customers to check availability from their homes and book instantly.

Microfinance Institutions (MFI) Lending:

A new tablet based Loan Origination System developed to digitize the entire lending process of
MFI business. This will replace the existing paper based loan sanctioning process.

Multicurrency Forex Cards:

Axis Bank offer contactless Multicurrency Forex Cards to Indian travelers enabling faster and
more convenient transactions while abroad. The same technology has also been extended to the
Banks Debit and Credit card platforms.The Bank has setup an in-house Payment Gateway that
allows for secure ecommerce transaction processing capability and reduces the cost incurred on
using external gateways.

Asha Home Loans:

Asha home loans, our home loan product, caters to the first time home buyers in the lower
income segment; and helps them by providing affordable EMI options. The product offers loan
from `1 lakh to `15 lakhs in small towns (population < 10 lakhs) and up to `25 lakhs in larger
towns (population > 10 lakhs), to customers with family incomes of `8,000 - 10,000 per month
and above.

ISIC Forex Card:

ISIC Forex Card' for students, is the first photo Travel Currency Card available in USD, Euro,
GBP and AUD currencies. It can be used across 34 million merchant locations and at over 2
million MasterCard ATMs globally.

eKYC:
Axis Bank has partnered with Visa to launch 'eKYC' (electronic Know your customer) facility,
first organisation in India to introduce Biometrics based KYC, offering convenience, speed and
ease to Aadhaar-registered individuals to open bank accounts.

ORGANISATIONAL STRUCTURE

Board of Directors

PERSON DESIGNATION

Dr. Sanjiv Misra Chairman

Shikha Sharma Managing Director & CEO

Som Mittal Director

Rohit Bhagat Director

Ireena Vittal Director

K. N. Prithviraj Director

V. R. Kaundinya Director

S. B. Mathur Director

Prasad Menon Director

Rabindranath Bhattacharyya Director

Prof. Samir K Barua Director

A.K. Dasgupta Director

Varadarajan Srinivasan ED, Corporate Banking

Somnath Sengupta ED, Corporate Center

Mission

Customer service and product innovation tuned to diverse needs of individual and
corporate clientele.

Continuous technology up gradating while maintaining human values.

Progressive globalization and achieving international standards.

Efficiency and effectiveness built on ethical practices.

Customer Satisfaction through providing quality service effectively and efficiently.

VISION AND VALUES

Vision 2016

To be the preferred financial solutions provider excelling in customer delivery through insight,
empowered employees and smart use of technology

Core Values

Customer Centricity
 Ethics

Transparency

Teamwork

Ownership

UNIT: AXIS BANK LIMITED

Jeevan Prakash Building

Sector 17-B
Chandigarh- 160017
Tel: 0172- 5062917

Registered Office
Trishul,3rd Floor, Opp. Samartheshwar Temple, Law Garden,
Ellis Bridge, Ahmedabad 380 006.
Tel No. : 079 66306161
Web site: www.axisbank.com

The Corporate Office

Axis Bank Limited,

Corporate Office,
Bombay Dyeing Mills Compound,
Pandurang Budhkar Marg,
Worli, Mumbai - 400 025
Tel: (022) 2425 2525

INTRODUCTION TO E-BANKING

E-BANKING

Electronic banking is one of the truly widespread avatars of E-commerce over the world.
Various authors define E-Banking differently but the most definition depicting the meaning and
features of E-Banking are as follows:

1.Banking is a combination of two, Electronic technology and Banking.

2. Electronic Banking is a process by which a customer performs banking Transactions

electronically without visiting their banks.

3. E-Banking denotes the provision of banking and related service through Extensive use of
information technology without direct recourse to the bank by the customer.

NEED FOR E-BANKING

 One has to approach the branch in person, to withdraw cash or deposit a cheque
or request a statement of accounts. In true Internet banking, any inquiry or transaction is
processed online without any reference to the branch (anywhere banking) at any time. Providing
Internet banking is increasingly becoming a "need to have" than a "nice to have" service. The net
banking, thus, now is more of a norm rather than an exception in many developed countries due
to the fact that it is the cheapest way of providing banking services. Banks have traditionally
been in the forefront of harnessing technology to improve their products, services and efficiency.
They have, over a long time, been using electronic and telecommunication networks for
delivering a wide range of value added products and services. The delivery channels include
direct dial up connections, private networks, public networks etc and the devices include
telephone, Personal Computers including the Automated Teller Machines, etc. With the
popularity of PCs, 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.

E-BANKING PRODUCTS
Automated Teller Machine (ATM)
These are cash dispensing machine, which are frequently seen at banks and
other locations such as shopping centers and building societies. Their main purpose is to allow
customer to draw cash at any time and to provide banking services where it would not have been
viable to open another branch e.g. on university campus. An automated teller machine or
automatic teller machine (ATM) is a computerized telecommunications device that provides a
financial institution's customers a method of financial\ transactions in a public space without the
need for a human clerk or bank teller. On most modern ATMs, the customer identifies him or
herself by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard with a chip
that contains his or her card number and some security information, such as an expiration date
or CVC (CVV). Security is provided by the customer entering a personal identification number
(PIN).Using an ATM, customers can access their bank accounts in order to make cash
withdrawals (or credit card cash advances) and check their account balances. Many ATMs also
allow people to deposit cash or checks, transfer money between their bank accounts, pay bills, or
purchase goods and services.

Some of the advantages of ATM to customers are:-

Ability to draw cash after normal banking hours
Quicker than normal cashier service
Complete security as only the card holder knows the PIN
Does not just operate as a medium of obtaining cash.
Customer can sometimes use the services of other bank ATMs.

Tele banking or Phone Banking

Telephone banking is relatively new Electronic Banking Product. However it is fastly
becoming one of the most popular products. Customer can perform a number of transactions
from the convenience of their own home or office; in fact from any where they have access to
phone.

Customers can do following:-

Check balances and statement information.
Transfer funds from one account to another.
Pay certain bills.
Order statements or cheque books.
Demand draft request .
This facility is available with the help of Voice Response System (VRS). This system
basically, accepts only TONE dialed input. Like the ATM customer has to follow particular
process, initially account number and telephone PIN are fed for the process to start. Also the
VRS system provides the users within additional facilities such as changing existing password
with the new desired, information about new products, current interest rates etc.

Mobile Banking
 Mobile banking comes in as a part of the banks initiative to offer multiple channel
banking providing convenience for its customer. A versatile multifunctional, free service that is
accessible and viewable on the monitor of mobile phone. Mobile phones are playing great role in
Indian banking- both directly and indirectly. They are being used both as banking and other
channels.

Internet Banking
The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions have used
powerful computer networks to automate million of daily transactions; today, often the only
paper record is the customers receipt at the point of sale. Now that their customers are connected
to the Internet via personal computers, banks envision similar advantages by adopting those same
internal electronic processes to home use. Banks view online banking as a powerful value
added tool to attract and retain new customers while helping to eliminate costly paper handling
and teller interactions in an increasingly competitive banking environment.

Types of Internet banking

Understanding the various types of Internet banking will help examiners assess the risks
involved. Currently, the following three basic kinds of Internet banking are being employed in
the marketplace.

Informational-
This is the basic level of Internet banking. Typically, the bank has marketing information about
the banks products and services on a stand-alone server. The risk is relatively low, as
informational systems typically have no path between the server and the banks internal network.
This level of Internet banking can be provided by the banks or outsourced. While the risk to a
bank is relatively low, the server or web site may be vulnerable to alteration. Appropriate
controls therefore must be in place to prevent unauthorized alterations to the banks server or
web site.

Communicative-
Interaction between the banks system and the customers. The interaction may be limited to
electronic mail, account enquiry, loan applications, or static file updates (name and address
change). Because these servers may have a path to the banks internal networks, the risk is higher
with this configuration than within formational systems. Appropriate controls need to be in the
place to prevent, monitor, and alert management of any unauthorized attempt to access the banks
internal networks and computer systems. Virus controls also become much more critical in this
environment.

Transactional-
This level of Internet banking allows customers to execute transactions. Since a path typically
exists between the server and the bank or outsourcers internal network, this is the highest risk
architecture and must have the strongest controls. Customer transactions can include accessing
accounts, paying bills, transferring funds etc.

ADVANTAGES OF INTERNET BANKING

Convenience
- Unlike your corner bank, online banking sites never close, Theyre available 24 hours a day,
seven days a week, and theyre only a mouse click away.
Ubiquity
- If youre out of state or even out of the country when a money problem arises, you can log on
instantly to your online bank and take care of business, 24\7.
Transaction speed
- Online bank sites generally execute and confirm transactions at or quicker than ATM
processing speeds.
Efficiency-
You can access and manage all of your bank accounts, including IRAs, CDs, even securities,
from one secure site.
Effectiveness-
Many online banking sites now offer sophisticated tools, including account aggregation, stock
quotes, rate alert and portfolio managing program to help you manage all of your assets more
effectively. Most are also compatible with money managing programs such as quicken and
Microsoft money.

DISADVANTAGES OF INTERNET BANKING

Start-up may take time-
In order to register for your banks online program, you will probably have to provide ID and
sign a form at a bank branch. If you and your spouse wish to view and manage their assets
together online, one of you may have to sign a durable power of attorney before the bank will
display all of your holdings together.
Learning curves-
Banking sites can be difficult to navigate at first. Plan to invest some time and\or read the
tutorials in order to become comfortable in your virtual lobby.
Bank site changes-
Even the largest banks periodically upgrade their online programs, adding new features in
unfamiliar places. In some cases, you may have to re-enter account information.

INTERNET BANKING VERSUS TRADITIONAL BANKING

In spite 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 30transactions. 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."

Chapter I

Research Methodology

1.Title of the Study

A SOCIO LEGAL RESEARCH /PROJECT ON AWARENESS REGARDING

ELECTRONIC BANKING AMONG THE CUSTOMERS OF AXIS BANK
CONDUCTED AT AMRAVATI BRANCH

2.Statement of Problem
Banking is a customer oriented service industry, where the customer is infocus and customer
service is a differentiating factor. The traditional functions ofbanking are very limited one.
Economic reforms initiated by the government of Indiain the early 1990s have brought about a
sea change in the operational environment ofthe financial sector and the functioning outlook of
Indian banks. Customer expectsmany services with the various deliver mode in the speedy and
economically. ModernWorld Bank is fully based on computerization connected with the Internet.
Internetbanking provides new opportunities for banks to expand their markets and servicesnot
only in the local level but also into the world level. The Internet bankingrevolution has made it
possible to provide ease and flexibility in banking operations tothe benefit of customers. The e-
banking has made the customer say goodbye tolimited time banking and local area operation.
Due to the enormous benefits ofInternet banking most of the customer opt for Internet Banking
services. This study provides an opportunity to know role of Internet banking service
incommercial banks and its customer satisfaction is analyzed. The present study alsofocuses on
the awareness of the technology oriented services offered to theircustomers in the Rajapalayam
Taluk.

OBJECTIVES OF THE STUDY

To study about the factors that affects the customer perception towards E-banking service of
Union Bank of India.

To know about the current and future prospects of E-Banking to the customers.

To find out the major problems faced by the customers while using e-banking services.

3.3 NEED OF THE STUDY

To determining growth direction of online banking service.

Promoting E-banking services in banking industry.

Customer perception will be taken into consideration about the internet banking.
3.4 SCOPE OF THE STUDY

All the classes of the customers were taken into consideration.

This study was covered E-Banking service sector.

This is a realistic source directly collected from the customers of Bank.

The emergence of E-Banking has enabled the banks to offer real-time transactions and integrate
all customers related functions. Indian Banks are utilizing the new technology to provide
better technology and convenient access to its customers and India is thus poised to for a huge
growth in the world of electronic banking.

RATIONALE OF THE STUDY

Banks play important role in the development of trade, commerce and it has vital role in the
economic development of nations economy. We cant think modern society without banking
system. The banking services marketing is not very old concept, it is in the growth phase of its
life cycle. ICICI Bank and SBI are the two most dominant banks in private sector and public
sector respectively. Each one tries to eat away each others shares through their technological up
gradation and customer centric 14 policies. The banking services provided by ICICI Bank and
SBI are innovative. These two banks have shown remarkable performance within a short period
of time with their innovative range of products, customer centric policies and use of technology.
Therefore, an attempt will be made in this study to analyze the various marketing techniques
adopted by these two banks and how these techniques has helped these banks to have such a
large customer base. The competition among the players in banking sector has increased the
expectations of customers who now want new products with faster delivery at cheaper and
affordable cost. These expectations are more with the new generation private sector banks
because they are the new entrants on the banking scene with better technology, faster delivery,
and customer centric policies.

HYPOTHESIS OF THE STUDY

In the light of the above cited objective the researcher has set up the following hypothesis, for the
present study. AXIS Bank provides innovative, dynamic and competitive services in terms
of customer satisfaction in comparison to each other. However these banks are facing
problems while marketing their services. Based on the views and factual opinion emerging
from the questionnaires, this is tested by application of test of significance (Z - test) in the thesis

REVIEW OF LITERATURE

Internet Banking in India

The Internet banking is changing the banking industry and is having the major
effects on banking relationships. Even the Morgan Stanley Dean Witter Internet
research emphasized that Web is more important for retail financial services than
for many other industries. Internet banking involves use of Internet for delivery of
banking products & services. It falls into four main categories, from Level 1 -
minimum functionality sites that offer only access to deposit account data - to
Level 4 sites - highly sophisticated offerings enabling integrated sales of additional
products and access to other financial services- such as investment and insurance.
In other words a successful Internet banking solution offers

Exceptional rates on Savings, CDs, and IRAs

Checking with no monthly fee, free bill payment and rebates on ATM surcharges
Credit cards with low rates
Easy online applications for all accounts.

Adoption of Internet Banking: An Empirical Investigation of Indian

Banking Sector
The tremendous advances in technology and the aggressive infusion of information technology
had brought in a paradigm shift in banking operations. Internet banking that has revolutionized
the banking industry world wide has turned out to be the nucleus issue of various studies all over
the world. However there has constantly been a literature gap on the issue in India. The purpose
of this paper is to help fill significant gaps in knowledge about the Internet banking landscape in
India.

Retail and corporate banking

Booz Allen Hamilton (1997) conducted a global survey covering 386 retail and corporate
banking institutions in 42 countries to assess the strategic impact of Internet banking on the
financial service industry. According to the study, there is a huge perception gap between North
American/European banks and Japanese banks regarding the future of Internet banking. North
American and European banks expect Internet banking to become the most important retail
channel within 10 years, but Japanese banks expect traditional branches to remain the most
important channel. The study also indicates the rapid growth potential of Internet banking. Many
of the banks that responded have plans to upgrade the functionality of their Internet service
offerings.

Banks offering Internet banking

England (1998) conducted the first important study that estimated the number of U.S. banks
offering Internet banking and analyzed the structure and performance characteristics of these
banks. They have found no evidence of major differences in the performance of the group of
banks offering Internet banking activities compared to those that do not offer such services.

Electronic payments and remote banking

First et. al. (1998) a U.S. based study found out a significant shift by consumers and businesses
to electronic payments. In response to developments in electronic payments and remote banking,
banks have greatly increased their investment in technology, particularly in retail banking. The
gains from technological advancements in banking and payments are likely to be substantial,
both from the point of view of individual financial institutions and economy-wide. In this
environment, banks should review and, if necessary, adjust their risk management practices in
tandem with upgrading their technology activities.