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INTRODUCTION
Growth of Electronic banking in a country depends on many factors, such as success of internet
access, new online banking features, household growth of internet usage, legal and regulatory
framework. E-banking offers speedier, quicker and dependable services to the customers through
which they are more satisfied than that of manual system of banking. E-banking system not only
generates viable return, but also ensures better dealings with customers. The rationale of this
research is to recognize the impact of variables of e-banking on customer pleasure. Banking
sector is modernizing tremendously and expanding in different financial spheres. Simultaneously
banking is becoming faster and easier. In order to survive in the global competitive era,
commercial banks are seeking for better service opportunities to enhance customers’ satisfaction.
Businesses seeking to improve profitability are thus advised to monitor and to upgrade their
service quality on an ongoing basis . Technology plays a vital role in improving the quality of
services provided by the business units. One of the technologies which really brought
information revolution in the society is internet technology and is rightly regarded as the third
wave of revolution after agricultural and industrial revolution. Internet banking allows banking
from anywhere, anytime and is used for transactions, payments etc. over the internet through a
bank’s website. In contrast to traditional banking, internet banking involves non-human
interactions between customers and online bank information system. Customer satisfaction,
customer retention and new customer acquisition are the key factors in internet banking. Internet
banking is a new delivery channel for banks in India. The internet banking is both an informative
and a transactional medium. However, internet banking has not been popularly adopted in India.
The study suggests that larger banks or banks with younger age, private ownership and lower
branch intensity possess high probability of adoption of this new technology. Banks with lower
market share also perceive internet banking technology as a means to increase the market share
by attracting more and more customers through this new delivery channel. However, the service
quality in internet banking from customers needs thorough analysis to find out the determinants
for success and growth of new delivery channel in India. To this end, this study aims at
determining the service quality of banks operative in India with regards to internet banking and
identifying the important parameters for service quality from customers’ perspective. The
purpose of this study is to explain the relationship between usability dimensions and success
variables. The banking industry is chosen because of the fact that Internet banking applications
are considered one of the most successful and most established internet applications ever
Banking operations are becoming increasingly customer dictated . The ability of banks to offer
clients access to several markets for different classes of financial instruments has become a
valuable competitive edge. With the explosion of the country’s population and the increased
demand for banking services – speed and quality of service are the key differentiators for bank’s
future success. Thus it is imperative for banks to get feedback regarding quality aspects of retail
banking, which in turn will help them to take remedial measures to maintain a competitive edge.
Customer’s mind is a mystery which is difficult to predict and understand the perception to attain
satisfaction is a challenging task. This exercise in the context of the banking industry will give us
an insight into the parameters of customers’ satisfaction and their measurement. The customers’
requirements must be translated and quantified into measurable targets. This provides an easy
way to monitor improvements, and to decide the attributes that need to be concentrated in order
to improve customers’ satisfaction.
The financial reforms that were initiated in the early 1990s and the globalization and
liberalization measures brought in a completely new operating environment to the banks. The
bankers are now offering innovative and attractive technology – based services and products
such as “Anywhere Anytime Banking”, “Tele Banking”, “Internet Banking” etc. to their
customers to cope with the competition. The process started in the early 1980s when Reserve
Bank of India (RBI) set up two committees in quick succession to accelerate the pace of
automation of operations in the banking sector. A high – level committee was formed under the
chairmanship of Dr. C. Rangarajan, then Governor of RBI, to draw up a phased plan for
computerization and mechanization in the banking industry over a five year time frame of 1985-
1989. The focus by that time was on customer service and two models of branch automation
were developed and implemented. Having gained experience in the earlier mode of
computerization, the second Rangarajan committee constituted in 1988 drew up a detailed
perspective plan for computerization of banks for extension of automation to other areas such as
funds transfer, e-mail, ATMs, internet banking etc. The Government of India enacted the
Information Technology Act, 2000, with effect from 17 October 2000 to provide legal
recognition to electronic transactions and other means of electronic commerce. Internet banking
in India is currently at a nascent stage. ICICI bank is the pioneer to have introduced internet
banking for a limited range of services such as access to account information, correspondence
and funds transfer among its branches.
The definition of quality is contextual and is different from individual perspective. In general, the
quality is basically classified into five categories, viz. transcendent, product led, process or
supply led, customer led or value led. Basically service quality in internet banking can be viewed
from two perspectives:
• Customers’ perspective
• Providers’ perspective
CUSTOMERS’ PERSPECTIVE
From the perspective of the customers, the service quality differentiates sought quality and
perceived quality. Sought quality is the level of quality, the customers explicitly or implicitly
demand and expect from service providers. The sought quality is created due to several factors-
primarily, the expectations formed during a previous personal experience of a customer with a
service and by the image of an organization. Perceived quality means the overall impression a
customer has and experiences about the level of quality after service realization. The potential
difference between the sought quality and the perceived quality gives the service provider an
opportunity to measure customers’ satisfaction based on formulating the precise and actual
criteria according to which the customers are assessing the services.
PROVIDERS’ PERSPECTIVE
From the providers’ perspective, there are target quality and delivered quality. The focus of
process - or supply - led quality definition is rather internal than external, and it is defined as
conformance to requirements. It lays emphasis on the importance of the management and the
supply-side quality, and there is an important role of the process in determining the quality of
outcome . Achieving the quality of conformance between the planned quality level and the real
quality delivered to customers depends on the service quality management system in an
organization.
CHAPTER-2
COMPANY PROFILE
STATE BANK OF INDIA
State Bank of India (SBI) is an Indian multinational, public sector banking and financial
services company. It is a government-owned corporation with its headquarters in Mumbai,
Maharashtra. On 1st April, 2017, the State Bank of India, which was India's largest bank, merged
with five of its associate banks (State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State
Bank of Mysore, State Bank of Patiala and State Bank of Travancore), and with the Bharatiya
Mahila Bank. This was the first ever large scale consolidation in the Indian banking industry.
With the merger, SBI became one of the 50 largest banks in the world (balance sheet size of ₹33
trillion, 278,000 employees, 420 million customers, and more than 24,000 branches and 59,000
ATMs). SBI's market share was projected to increase to 22 percent from 17 per cent. It has 198
offices in 37 countries; 301 correspondents in 72 countries. The company is ranked 232nd on
the Fortune Global 500 list of the world's biggest corporations as of 2016.
The bank descends from the Bank of Calcutta, founded in 1806, via the Imperial Bank of India,
making it the oldest commercial bank in the Indian subcontinent. The Bank of Madras merged
into the other two "presidency banks" in British India, the Bank of Calcutta and the Bank of
Bombay, to form the Imperial Bank of India, which in turn became the State Bank of India in
1955.[8] Government of India owned the Imperial Bank of India in 1955, with Reserve Bank of
India (India's Central Bank) taking a 60% stake, and renamed it the State Bank of India. In 2008,
the government took over the stake held by the Reserve Bank of India.
State Bank of India has 20% market share in deposits and loans among Indian commercial banks.
Operations
SBI provides a range of banking products through its network of branches in India and overseas,
including products aimed at (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are
located at important cities throughout India.
Domestic presence
SBI has 18,354 branches in India. In the financial year 2012–13, its revenue was ₹2.005
trillion (US$31 billion), out of which domestic operations contributed to 95.35% of revenue.
Similarly, domestic operations contributed to 88.37% of total profits for the same financial year.
Under the Pradhan mantri jan dhan yojana of financial inclusion launched by Government in
August 2014, SBI held 11,300 camps and opened over 3 million accounts by September, which
included 2.1 million accounts in rural areas and 1.57 million accounts in urban areas.
International presence
As of 2014–15, the bank had 191 overseas offices spread over 36 countries having the largest
presence in foreign markets among Indian bank..
SBI operates several foreign subsidiaries or affiliates.
In 1989, SBI established an offshore bank: State Bank of India International (Mauritius) Ltd in
Mauritius. SBI International (Mauritius) Ltd amalgamated with The Indian Ocean International
Bank, which has been doing retail banking business in Mauritius since 1979 with the new name,
SBI (Mauritius) Ltd. Today, SBI (Mauritius) Ltd is having fully integrated 14 branches- 13
Retail Branches covering major cities and town of Mauritius, including Rodrigues, and 1 Global
Business Branch at Ebene in Mauritius. Apart from Branch Banking, customers also have the
convenience of 24x7 ATM Banking at 18 ATMs across the country. Bank also has a 24x7 robust
Internet Banking Channel enabling customers to work from their homes and offices.
State Bank of India Branch at Sri Lanka
The Jaffna branch was opened on 9 September 2013. SBI Sri Lanka, the oldest bank in Sri
Lanka, celebrated its 150th year in Sri Lanka on 1 July 2014.
State Bank of India (S.B.I.) Branch at Tsim Sha Tsui, Hong Kong
In 1982, the bank established a subsidiary, SBI, which now has ten branches—nine branches in
the state of California and one in Washington, D.C. The 10th branch was opened in Fremont,
California on 28 March 2011. The other eight branches in California are located in Los Angeles,
Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield.
In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo–Nigerian
Merchant Bank and received permission in 2002 to commence retail banking. It now has five
branches in Nigeria.
In Nepal, SBI owns 49% of SBI Nepal (State Bank in Nepal) share with Nepal Government
owing the rest and SBI NEPAL has branches throughout the country in each and every city In
Moscow,
In Indonesia, it owns 76% of PT Bank Indo Monex.
The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.
In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8
million in October 2005.
In January 2016, SBI opened its first branch in Seoul, South Korea following the continuous and
significant increase in trade due to the Comprehensive Economic Partnership Agreement signed
between New Delhi and Seoul in 2009
Associate banks
Main Branch of SBI in Mumbai
SBI acquired the control of seven associate banks in 1960. They were the seven regional banks
of former Indian princely states, all of them which were renamed with the prefix 'State Bank'.
These seven banks were State Bank of Bikaner and Jaipur (SBBJ), State Bank of
Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of
Travancore (SBT), State Bank of Saurashtra(SBS) and State Bank of Indore (SBI - Indore). All
these banks used the same logo as its parent bank.
The plans for making SBI a mega bank with trillion dollar business by merging associate banks
started in 2008, and in September the same year, SBS merged with SBI. The very next year, SBI-
Indore also merged.. The negotiations for merging of 6 associate banks (State Bank of Bikaner
and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State
Bank of Travancore and Bharatiya Mahila Bank) by acquire their businesses including assets and
liabilities with SBI started in 2016. The merger of these six subsidiaries was approved by Union
Cabinet on 15 June 2016. The State Bank of India and all its associate banks use the same
blue keyhole logo. The State Bank of India wordmark usually has one standard typeface, but also
utilises other typefaces.
Non-banking subsidiaries
Apart from its five associate banks (merged with SBI since April 1, 2017), SBI also has the
following non-banking subsidiaries:
Business Focus
HDFC Bank’s mission is to be a World Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of banking
services for target retail and wholesale customer segments, and to achieve healthy growth in
profitability, consistent with the bank’s risk appetite. The bank is committed to maintain the
highest level of ethical standards, professional integrity, corporate governance and regulatory
compliance.
Capital Structure
As on 31st March, 2015 the authorized share capital of the Bank is Rs. 550 crore. The paid-up
share capital of the Bank as on the said date is Rs501,29,90,634/- ( 2506495317 ) equity shares
of Rs. 2/- each). The HDFC Group holds 21.67 % of the Bank's equity and about 18.87 % of the
equity is held by the ADS / GDR Depositories (in respect of the bank's American Depository
Shares (ADS) and Global Depository Receipts (GDR) Issues). 32.57 % of the equity is held by
Foreign Institutional Investors (FIIs) and the Bank has 4,41,457 shareholders.
The shares are listed on the Bombay Stock Exchange Limited and The National Stock Exchange
of India Limited. The Bank's American Depository Shares (ADS) are listed on the New York
Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global Depository Receipts
Amalgamation Of Times Bank & Centurion Bank Of Punjab With HDFC
(GDRs) are listed on Luxembourg Stock Exchange under ISIN No US40415F2002.
On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was
formally approved by Reserve Bank of India to complete the statutory and regulatory approval
process. As per the scheme of amalgamation, shareholders of CBoP received 1 share of HDFC
Bank for every 29 shares of CBoP.
The amalgamation added significant value to HDFC Bank in terms of increased branch network,
geographic reach, and customer base, and a bigger pool of skilled manpower.
In a milestone transaction in the Indian banking industry, Times Bank Limited was merged with
HDFC Bank Ltd., effective February 26, 2000. This was the first merger of two private banks in
the New Generation Private Sector Banks. As per the scheme of amalgamation approved by the
shareholders of both banks and the Reserve Bank of India, shareholders of Times Bank received
1 share of HDFC Bank for every 5.75 shares of Times Bank
Business Profile
HDFC Bank caters to a wide range of banking services covering commercial and investment
banking on the wholesale side and transactional / branch banking on the retail side. The bank has
three key business segments:
Wholesale Banking
The Bank’s target market is primarily large, blue-chip manufacturing companies in the Indian
corporate sector and to a lesser extent, small & mid-sized corporates and agri-based businesses.
For these customers, the Bank provides a wide range of commercial and transactional banking
services, including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions, which combine
cash management services with vendor and distributor finance for facilitating superior supply
chain management for its corporate customers.
Treasury
Within this business, the bank has three main product areas - Foreign Exchange and Derivatives,
Local Currency Money Market & Debt Securities, and Equities. With the liberalisation of the
financial markets in India, corporates need more sophisticated risk management information,
advice and product structures. These and fine pricing on various treasury products are provided
through the bank’s Treasury team. To comply with statutory reserve requirements, the bank is
required to hold 25% of its deposits in government securities. The Treasury business is
responsible for managing the returns and market risk on this investment portfolio.
Retail Banking
The objective of the Retail Bank is to provide its target market customers a full range of financial
products and banking services, giving the customer a one-stop window for all his/her banking
requirements. The products are backed by world-class service and delivered to customers
through the growing branch network, as well as through alternative delivery channels like
ATMs, Phone Banking, NetBanking and Mobile Banking.
The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the
Investment Advisory Services programs have been designed keeping in mind needs of customers
who seek distinct financial solutions, information and advice on various investment avenues. The
Bank also has a wide array of retail loan products including Auto Loans, Loans against
marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider
of Depository Participant (DP) services for retail customers, providing customers the facility to
hold their investments in electronic form.
HDFC Bank was the first bank in India to launch an International Debit Card in association with
VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. The Bank
launched its credit card business in late 2001.
Acquisitions
HDFC Bank merged with Times Bank in February 2000. This was the first merger of two private
banks in the New Generation private sector banks category.In 2008, Centurion Bank was
acquired by HDFC Bank. HDFC Bank Board approved the acquisition of CBoP for 95.1 billion
INR in one of the largest mergers in the financial sector in India.
CHAPTER 3
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY OF THE STUDY
A Methodology does not set out to provide solutions but offers the theoretical underpinning for
understanding which method, set of methods or so called “best practices” can be applied to a
specific case.
❖
Meaning of research.
❖
Problem statement.
❖
Research design.
❖
Sample design.
❖
Data collection.
❖
Analysis and Interpretation of data.
RESEARCH
The word ‘research’ comprises of two words i.e. ‘re’ which means again and the latter i.e.
‘search’ which means to examine closely and carefully or to test and try. Together they form a
careful, systematic, patient study and investigation in some field of knowledge undertaken to
establish principles/ policies.
Types of Research:-
1. Quantitative Research
2. Basic Research
3. Applied Research
4. Longitudinal Research
5. Qualitative Research
6. Descriptive Research
7. Comparative Research
8. Explorative Research
9. Action Research
RESEARCH DESIGN
A research design is purely and simply the frame work of plan for a study that guides, the
collection and analysis of the data. Application and specification are the main characteristic in
a research designs. Marketing research designs can be classified on basis of the fundamental
objectives of the research.
DATA
Data are basic values or facts. It is one of the most important and vital aspect of any research
study.
Primary Data :
The term primary research is widely used in academic research, market research and
competitive intelligence.
Primary data are always collected from the source. It is collected either by the investigator
himself or through his agents. There are different methods of collecting primary data. Each
method has its relative merits and demerits. The investigator has to choose a particular method to
collect the information. The choice to a large extent depends on the preliminaries to data
collection some of the commonly used methods are discussed below:
4. Schedule Method
➢
Secondary Data :
Secondary data is data collected by someone other than the user. Common sources of
secondary data for social science include censuses, organisational records and data
collected through qualitative methodologies or qualitative research.
Published Sources:
Mostly secondary data are collected from published sources. Some important sources of
published data are the following.
Unpublished Sources:
Statistical data can also be collected from various unpublished sources. Some of the important
unpublished sources from which secondary data can be collected are:
2. The records maintained by private firms and business enterprises. They may not like to
publish the information considering them as business secret.
3. Records and statistics maintained by various departments and offices of the Central and
State Governments, Corporations, Undertakings etc.
SAMPLE DESIGN
A sample design is a definite plan for obtaining a sample from the sampling frame. It refers to
the technique or the procedure that is adopted in selecting the sampling units from which
inferences about the population is drawn. Sample design is determined before the collection of
the data..
Instrument : -Questionnaire.
QUESTIONNAIRE
Consists of no. of questions printed or typed in definite order on a form or a set of forms.
Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret.
Close Ended: - Pre-specify all the possible answers & are easy to Interpret.
50
45
40
35
30
25 HDFC
SBI
20
15
10
0
A B C D
Interpretation - As per the study the govt. employees are main customers of SBIbank
and businessman are less minimum. On the other side working professional are main customers
of HDFC bank
Q3.Income level
INCOME RESPONDENTS
BELOW 50000 27
50000-100000 10
100000-500000 23
ABOVE 500000 40
RESPONDENTS
A
B
C
D
Q.4 Source of communication (From where customers get the Information about bank).
SOURCE RESPONSE
ADVERTISEMENT 30
FAMILY 35
FRIEND 25
OTHERS 10
Column1
ADVERTISEMENT
FAMILY
FRIEND
OTHERS
Inrerpretation - As per the study the family members are the main sources of
Communication about bank and advertisement is other sources
Q5.Awareness regarding Net Banking Service provided by HDFC Bank and SBI bank.
RESPONSE
HDFC
SBI
Interpretation - From the data collected it was found that majority of the respondents
that is 55% were aware of the net
banking service provided by HDFC Bank while 45% of the
respondents were not aware of the same service.
40
35
30
25
20 HDFC
SBI
15
10
0
A B C D E
Interpretation - It was found that the majority of the respondents that is 34% of the respondents
used the net banking service for viewing accounts and balances from HDFC, followed by the
respondents who availed the same for transferring the funds between accounts from
hdfc and for paying the bills from sbi respectively. Marginally 5% and 10% of the respondents
used the service to request a demand draft from hdfc and sbi respectively.
50
45
40
35
30
25 HDFC
SBI
20
15
10
0
A B C D
Interpretation - I t w a s f o u n d t h a t t h e m a j o r i t y o f t h e r e s p o n d e n t s t h a t i s 4 5 %
u s e d t h e N e t B a n k i n g service one to five times in a month of hdfc bank while 35 % and
20% said that they used the same service less than once in a month from hdfc and sbi
bank respectively.
Q8. Difficulties faced while using the Net Banking service of HDFC Bank.
DIFFICULTIES HDFC SBI
LOGGING IN TO YOU’RE A/C 20 25
MAKING TRANSACTIONS 27 34
SAFETY ISSUES 40 18
UNABLE TO UNDERSTAND 8 16
WEBPAGES
CHANGING OF PIN AND 5 7
PASSWORD
45
40
35
30
25
HDFC
20 SBI
15
10
0
Category 1 B C D E
INTERPRETATION - It was found that the majority of the respondents that is 40% said that
safety issues was the major difficulty that they faced while using the Net Banking
service in hdfc bank, followed by34% of the respondents who felt that making
transactions with the bank through NetBanking was difficult in sbi bank. However, 8% of
the respondents faced difficulty in understanding t h e w e b p a g e s i n h d f c b a k a n d 7 % o f
t h e r e s p o n d e n t s f e l t t h a t c h a n g i n g t h e P I N a n d P a s s w o r d regularly was difficult
in SBI bank.
Q9. Reasons due which Net Banking service is not popularly used.
REASONS HDFC SBI
NET BANKING WEBPAGES ARE 23 29
CONFUSING
USE OF COMPUTER OR 19 12
INTERNET IS DIFFICULT
NETBANKING IS NOT SECURED 34 36
NETBANKING OFFERS NO 24 23
RECEIPTS NO PAYMENTS
Series 1
3
Series 2
Series 3
2
0
Category 1 Category 2 Category 3 Category 4
Interpretation - The Net banking is not secured was ranked first that is the most
important reason while use of internet is difficult was given the last rank
CHAPTER-5
FINDINGS AND CONCLUSION
FINDINGS
1. The average income level of the respondents is below 5 lakhs rupees implying that most of the
respondents belong to either lower middle income group or upper middle income group.
2. The profession of the respondents conveys the need for their banking services and the study
identified that most of the respondents are preferring e-banking which includes internet banking,
ATMs, tele banking etc
3.A study of the factors, influencing the usage was made by listing out various factors such as
alltime availability, ease of use, nearness etc., and amongst the various factors all time
availability isranked as the major motivating factor, followed by ease of use, direct access,
nearness indecreasing order of importance.
4.Age of the respondents conveys the attitudes towards the service quality, from the study it
concluded that most of the respondents are young and they have high expectation from the banks
regarding the services quality offered by them.
5.Among the users, various problems that are encountered while using e-banking services. Safety
issues was the major reason that create hurdles in its usage, while time consumption,accounting
mistakes such as amount debited but not withdrawn and change of mobile number seem to be the
least bothering problems.
6.Personal safety of the customer and his or her possessions while participating in or benefiting
from the service offered by the bank should be ensured by the banker. This includes the
maintenance of confidentiality about the customer information and his/ her account details etc.
CONCLUSIONS
1.Customers were not fully aware of the services.. Therefore Banks should try to give
some more information to its existing customers.
2.