2.

Literature Review

In recent years number of papers and research work is being conducted to understand the
perception of customer towards digital banking services in India but no research work is
conducted on Airtel payment banks because this is a new concept which has been recently
conceptualized by the Reserve Bank of India.

Rozario (2016) argue in his paper that there is a need of constant innovation in retail banking. A
paradigm shift in bank financing through innovative products and mechanisms involving
constant up gradation and revalidation of the banks’ internal systems and processes is called for.

Rao (2014) said in his paper that there is a need of constant innovation in retail banking.
However, the kind of technology used and the efficiency of operations would provide the much
needed competitive edge for success in retail banking business. He further emphasized that, it is
vital for banks to improve their customer services and cut off predatory lending strategies,
particularly in the area of interest on credit cards.

Kumar and Parashuramulu (2013) said that the Indian financial player or a foreign entrant in the
retail sector, have to adopt a different approach in everything viz., products, services to hold the
Indian market share, as a popular saying goes as variety is the spice of life”

Malhotra (2010) discuss in her paper that the results show that the private and foreign Internet
banks have performed well in offering a wider range and more advanced services of Internet
banking in comparison with public sector banks. Among the determinants affecting the extent of
Internet banking services, size of the bank, experience of the bank in offering Internet banking,
financing pattern and ownership of the bank are found to be significant.

With the extensive technology innovation and telecommunications, we have seen new financial
distribution channels increasing rapidly both in numbers and form, from ATMs, telephone
banking to PC banking (Easingwood & Storey, 1996), and Internet Banking is the latest in the
series of technological wonders of the recent past (Mols, 1999).

Following the boom of Internet, the Internet can no longer be considered a “fad” or the preserve
of “techies” and “computer nerds”. Commercial uses of the Net have become the fastest growing
part of the World Wide Web (WWW) (Hamid et al, 2007).

Internet Banking was thought to signal a revolution in banking distribution. Banks invested
heavily in the development of the Internet channels (Accenture, 2005).

Internet Banking has experienced explosive growth in many countries and has transformed
traditional banking practice (Mols, 1999).
Inevitability, Internet Banking will continue to revolutionize the current traditional banking
industry and offers more opportunity to meet better consumer services through enhanced
interaction, data mining and customization in the Internet Banking services (Hamid et al, 2007).

Online banking was first introduced in the early 1980s (Kalakota and Whinston, 1997), in which
consumers were provided with an application software program that operates on personal
computer (PC) which can be 9 dialed into the bank via a modem, telephone line and operated the
programs remotely on the consumer PC. However, the lack of Internet users, and costs
associated with using online banking, stunted its growth.

It was only in the late 1990s that Internet Banking really caught on as the Internet explosion had
made consumers more comfortable with making transactions over the web. During dotcom
fallout, it became apparent that Internet Banking was not the panacea banks had thought it to be.
Between 2001 and 2004 Internet Banking investment growth experienced a significant
slowdown. Nevertheless the customer base for Internet Banking was growing steadily from 2000
to 2005 (Accenture, 2005).