STUDY ON SATISFECTION LEVEL OF NET

BANKING USERS

Submitted in
Partial fulfillment for the award of the degree of
Master of Business Administration,
Rayat Bahra University,
(2017-2019)

Submitted to: Submitted by:

Ms. Pragrat Kapoor Harsh rai
Roll No-
1703104107

UNIVERSITY SCHOOL OF MANAGEMENT STUDIES

RAYAT AND BAHRA UNIVERSITY

1
 PREFACE

The t remendous advance in technolog y and the aggressive infusion of

information technology has 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 w orld. However
there has constantly been a lit erature gap on the issue in India. The purpose of
the paper is to help fill significant gaps in knowledge about the Internet banking
landscape in India. The paper presents data, drawn from a survey of private,
foreign and public banks that offer Internet banking and on the products and
services t hey offer, investigates the profile of banks that offer Internet banking
using various stat ist ical analyses, relative to above mentioned banks with respect
to competitive analysis.
 ACKNOWLEDGEMENT

Words often fail to express one’s inner feeling of indebtedness. Infact words are
not proper media for this purpose.

It is my proud privilege to express my pr ofound indebtedness and deep

sense of gratitude to Ms PRAGRATI who has been kind enough to impart
his inspiring advice and valuable guidance to me during my research work .
He provided his untiring efforts and encouragement throughout m y research
period inspite of his busy schedule.

PRAGRATI KAPOOR
 DECLARATION

I, HarshRai hereby declare that the project entitled WORKING

CAPITAL MANAGEMENT has been worked on drafted and finalized by – Harsh Rai,

1703104107 student of MBA 4th semester of the batch 2017-2019. The project is an

original piece of work and not copied or plagiarized from any other source of literature,

review article or published reference in this regard. This final year project report is being

submitted in partial fulfillment of the degree of Master in Business Administration from

University School of Management Studies, Rayat-Bahra University and has not been

submitted for the reward of any certificate, diploma, degree, fellowship with any

college/university nor educational institute before this.

In case any part of this work is reported as copied from any another source, we shall be

responsible for the same and will be answerable for any action taken in this regard.

Harsh Rai

1703104107
 INDEX

Pg. No.
CHAPTER 1 INTRODUCTION 6-26

CHAPTER 2 REVIEW OF LITREATURE 27-43

CHAPTER 3 RESEARCH METHODOLOGY 44-48

CHAPTER 4 ANALYSIS AND INTERPRETATION 49-63

CHAPTER 5 CONCLUSIONS & SUGGESTIONS 64-67

BIBLIOGRAPHY 68-69

ANNEXURE 70-73
 LIST OF TABLES

Table No. Table Title

4.1 Different Sector Banks

4.2 Concept of Net Banking

4.3 Net Banking Services

4.4 Knowledge of Computers

4.5 Internet Access

4.6 Merits/Demerits of Net Banking

4.7 Bank’s Assistance

4.7(i) Assistance Service

4.8 Training Programs

4.8(i) Training Methods

4.9 Scope of Net Banking

 LIST OF GRAPHS

Graph No.
Graph Title

4.1 Different Sector Banks

4.2 Concept of Net Banking

4.3 Net Banking Services

4.4 Knowledge of Computers

4.5 Internet Access

4.6 Merits/Demerits of Net Banking

4.7 Bank’s Assistance

4.7(i) Assistance Service

4.8 Training Programs

4.8(i) Training Methods

4.9 Scope of Net Banking

INTRODUCTION
 INTRODUCTION TO BANKING SECTOR

The world advances with every new idea man creates. Today, if there is one field where each
advance is a symbol of man’s progress, it is the banking industry. It plays a vital role in making
lives of corporate sector simpler and better, yet banking in itself is very complex in nature. The
word ‘banking’ is derived from the word ‘Banes’ or ‘Banque’ which means a branch. In the early
days the European money lenders and money charges 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 the banking regulations Act 1949, banking means “Accepting for the purpose of
lending or investment of deposits of money from the public repayable on demand or otherwise
and withdraw by cheque, draft or otherwise.”

Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of
the country. This is one of the main reasons of India's growth process.
The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases. They are as
mentioned below:

 Early phase from 1786 to 1969 of Indian Banks

 Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
 New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.

1 EVOLUTION OF INDIAN BANKING

Ancient banking system of India constituted of indigenous bankers. They have been
carrying on their age – old banking operations in different par ts of the country
under different name. The commercial banking came in India in 1770 with the
establishment of the first jo int stock bank, named the Bank of Hindustan, by an
English Agency in Calcutta, but this bank failed in 1832. In fact, real beginning of
modern commercial banking in the country was made with the establishment of
the Bank of Bengal in 1806 and 1843 respectively. All
these banks were called Presidency Banks . In 1881, the first purely Indian
Bank i. e. Oudh commercial Bank came into being. It was followed by the setting
up of Punjab National Bank in 1894.

Years Names of the Banks.

1770 Bank of Hindustan.
1806 Bank of Bengal.
1840 Bank of Bombay.
1843 Bank of Madras.
1881 OUDH Commercial Bank.
1894 Punjab National Bank.
 BANKING SYSTEM

The oxford dictionary defines the bank as “an establishment for the custody of money, which
it pays out, on a customers’ order.”

A banking company in India has been defined in the banking companies Act 1949, as “one
which transacts the business of banking which means the accepting, for the purpose of lending
or investment of deposits of money from the public, repayable on demand or otherwise and
withdrawals by cheque, draft, order or otherwise.”

The banking system in an integral sub- system of the financial system. It

represents an important channel of collecting small savings from the households and lending it
to the corporate sector.

The Indian Banking system has the Reserve Bank of India ( RBI ) as the apex body for all
matters relating to the banking system. It is the’ central bank’ of India. It is the banker to all
other banks.

Classification of banks :
Non- scheduled banks.
Scheduled banks.

1. Non-scheduled Banks : - These are banks, which are not included in the
Second schedule of the Banking Regulation Act, 1965. It means they do not
sat isfy t he conditions laid down by that schedule. They are further classified as follows: -
* Central Co- operative Banks and Primar y Credit Societies.
* Commercial Banks.
2. Scheduled Banks : - Scheduled Banks are banks, which are included in the
second schedule of the Banking Regulation Act, 1965. According to this
schedule a scheduled bank:
Must have paid- up capital and reserve of not less than Rs. 5, 00, 000 ;
Must also sat isfy t he RBI that its affairs are not conducted in a manner detrimental
to the interests of its depositors.

Scheduled banks are sub- divided as:

* State – cooperative banks.
* Commercial banks.

State – cooperative banks : - These are Co-operatives owned and managed by

the state.

Commercial banks : - These are business entities whose main business is accepting
deposits and extending loans. Their main objective is profit
maximization and adding shareholder value.

These are further sub- divided as:

* Indian Banks: - These banks are companies registered in India under the
Companies Act. Their place of origin is in India.

These are also sub- divided as:

State Bank of India and its Subsidiaries :

This group comprises of the State Bank of India ( SBI ) and it s seven subsidiaries viz., State
Bank of Patiala, State Bank of Hyderabad, State Bank of Travancore, State Bank of Bikaner and
Jaipur, State Bank of Mysore, State Bank of
Saurastra, State Bank of Indore.
Other Nationalized Banks :
This group consists of private sector banks that were nationalized. The
Government of India Nationalized 14 private banks in 1969 and another 6 in the year 1980.

Regional Rural Banks :

These were established by the RBI in the year 1975 of Banking Commission. It
was established to operate exclusively in rural areas to provide credit and other
facilit ies.

Old Private Sector Banks :

This group consists of banks that were established by the privy states,
community organizations or by a group of professional for the cause of
economic betterment in t heir area of operations. Init ially their operations were concentrated
in a few regional areas.

New Private Sector Banks :

These banks were started as profit oriented companies after the RBI opened the
banking sector to the private sector. These banks are mostly technology driven
and better managed than other banks.

Foreign Banks : These are banks that were registered outside India and had originated in
a foreign country.
 STRUCTURE OF INDIAN COMMERCIAL
BANKING SYSTEM

Public Sector Bank Private Sector Bank

SBI SBI Nationalized ( RBBS) Scheduled Non-

Scheduled Associates Banks

Indian Banks Foreign Banks

 STATE BANK OF INDIA

SBI and its subsidiaries, with their strong distribution network and large
customer base, is st ill a force to reckon with in the Indian Banking Industry. SCI has about
20% market share in deposits / advances.

Within the banking sector, increasing competition and growing r isks remain important
challenges. The competition for market share is increasing the
pressure on profitabilit y and forcing banks to t rim costs, particularly t ransaction costs and
improve efficiency. As banks concentrate on consolidation to meet the competition, the key
driver is staying ahead of the competition is technology
and how well banks use it to meet the needs of their customers. In today’ s
sophisticated markets, credit r isk along with market risk a nd operational r isk are real
challenges before banks.

With margins on fund- based business remaining under pressure due to the low interest rate in
the economy, the onus is largely on non - fund based to shore up bottom lines. Thus in the
coming years, only banks that seize the opportunities thrown up by technology, become
customer - centric and offer new products that are cost effective, will be able to stay ahead of
the competition.

SBI, with it s retail reach of around 9100 branches and a strong brand name i s uniquely
positioned to take advantage of large pool of low - cost funds.
 HDFC BANK

The Housing Development Finance Corporation ( HDFC ) was amongst the first to receive an ‘
in principle’ approval from the Reserve Bank of India ( RBI) to set
up a bank in t he private sector, as part of the RBI’ s liberalization of the Indian
Banking Industry. The bank was incorporated in August 1994 in t he name of
‘HDFC Bank Limited’, with it s registered office in Mumbai. The bank
commenced operations as a Scheduled Commercial Bank in January 1995.

HDFC is India’ s premier housing finance company and enjoys an impeccable

t rack record in India as well as in International markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in it s
operations to remain the c lear market leader in mortgages in India. Its
outstanding loan portfolio covers over a million dwelling units. HDFC has developed
significant expertise in retail mortgage loans to differe nt market
segments and also has a large corporate client base for its housing related credit facilit ies. With
its experience in t he financial markets, a strong market
reputation, large shareholder base and unique consumer franchise, HDFC was
ideally positioned to promote a bank in the Indian environment.

HDFC Bank’s mission is to be a World Class Indian Bank. The Bank’ s aim is to build a sound
customer franchise across dist inct businesses so ass to be the
preferred provider of banking services in the niche segments that the bank
operates in an to achieve healthy growth in profitability, consistent with the bank’s r isk
appetite. The bank aims to ensure the highest level of ethical
standards, professional integrit y and regulatory compliance.
 ICICI BANK

ICICI Bank is one of the leading private sector bank in the Country. It has
established its position further through the acquisition of Bank of Madura in
March, 2001. The Bank now has a presence in 17 states in India, wit h a branch network of
500 and over 3. 7 million customer accounts. ICICI Bank has the
largest ATM network in the country ( 2950 as on December 30, 2006 ). The
promoter ICICI divested part of its stake ( 8. 8%) in the Bank in FY 01 to comply with RBI’s
bank licensing conditions. ICICI now holds only 47% stake in ICICI Bank and it has ceased to
be subsidiary of ICICI.

The Indian financial system comprises of financial inst itut ions, which were set
up with the objective of providing long term finance, commercial ban ks
fulfilling working capital and general banking needs, specialized investment
inst itut ions like LIC, GIC, UTI and private sector Non- Banking Finance
Companies ( NBFCs). Historically, the sector was dominated by State owned
inst itut ions. The twin forces of deregulation and technology have increased the
degree of competition in the Indian financial sector to unprecedented levels.

The Banking sector has witnessed a sea change during the last few years. The domination of
Public Sector Banks has declined over the years with the entry
and aggressive expansion of the Private Banks. Banks no longer provide on the financing
function, but compete with each other in as many segments. Margins
in the t raditional fund based business have come under pressure due to shar p fall
in interest rates, with disproportionate reduction in cost of deposits.
 STANDARD CHARTERED BANK

The Chartered bank opened its first overseas branch in India at Kolkata in year 1858, 12 th
April. Today the bank’ s branches in Ind ia are directed and
administered from Mumbai with Kolkata remaining an important t rading and banking
centre.

To cater the diverse financial needs of customers, the bank has a network of 66 branches in 24
cit ies in India.

It provides personal banking facility like personal banking plans, Accounts,

Debit Card, Credit Card etc. Personal banking includes Priority banking means
health management for privileged people. It also includes excel banking, means
a personal Relationship manager assist the customers in Insurance and complex
investment decisions but the customers should have a minimum quarterly
balance of Rs. 5, 00, 000. The bank also helps in making investment decisions by
providing investment services like mutual fund investment etc.
 3 PRODUCT RANGE AND SERVICES PROVIDED BY DIFFERENT
BANKS

Indian banks offers international standards of service to its customers. People get professional
and speedy service with its dedicated staff together with the latest technology in banking.

Banks bring a comprehensive range of products and service. Each is designed to minimize your
efforts, making its so much simple for you to do your banking. The bank provides the
following option:
Saving Account
Current Account
Demat account
Phone banking
ATM 24 hour banking
Intercity / inter branch banking Net
banking
Bill pay

Savings Account

As one glance through the Bank’s menu of banking services, two things can be
noticed. One that the range of their services is exhaustive and two that a host of
their services are complementary for saving account customer. The following
services are free of cost: -
One ATM card per jo int account.
Replacement in case of damaged ATM card.
Inter branch banking through tellers up to Rs. 50, 000 a day. Quarterly
statement of saving account.
Sweep in facilit y in saving account.

Current Account
With t he current account one gets a personalized chequebook, inter branch
banking and a monthly account statement in addition to a host of other features.

Demat Account

Dematerialization of shares is a process wherein physical shares are converted

into electronic form and credited into the Demat account, which can be opened
by a depository participant. The benefit of a having demat account is that one
need not worry about the safe keeping of shares, loss in t ransit, signature
difference, delay in t ransferring shares, fire and theft, which are r isks normally
associated with physical certificates.

After getting the account number, one can submit the shares for
dematerialization at the branch, the bank will then forward them to the Registrar
of companies who will verify the genuineness of the shares as well as the
signatures with the records. I f everything is found to be in order int imation shall
be send to NSDL who in turn will inform the bank to credit to be given to the
account. Once the shares have been credited to the demat account, one can hold them in the
account or can sell them in the market.

ATM Banking

Realizing the fact that banking needs may extent beyond the banking hours. So a wide network
of ATMs across the country has been established to give the flexibility to access the account
round the clock. The following transactions can be carried out at the ATM: -
Cash withdrawals
Deposits
Mail Facility
Balance inquiry
Mini Statement
Funds t ransfer
PIN change
Cheque Book Statement Requests Bill
Payments
Product information

Bank are members of the Master Card International Cirrus ATM network ,
and can be accessed by all domestic and international Master Card. Cirrus or
Maestro card holders for cash withdrawals and balance inquiries, Bank’ s ATMs are also
members of the Visa international Plus ATM network and can be
accessed by Visa Plus or Visa Electron card holders for withdrawal and balance
inquiries. Even all American Express card holders can now cash advances from
any of our ATM locations.

International Debit Card

Bank’ s International Debit Card is available to our customers in Mumbai, Delhi,

Kolkata, Chennai, Bangalore, Hyderabad, Pune and Ahmedabad. It is just like
the ATM card with the advantage that it can also be used to shop or pay just
anything all over India as well as abroad. The debit card is linked to the savings account. It can
be used to pay for shopping and also withdrawal from ATMs.
Whatever is spent is automatically debited from the account. The advantages of
the card are:

Widest Acceptance
24 Hrs ATM
Phone Banking
Insurance Protection
Worldwide Assistance
Additional Card

The card is brought in association with Visa International and is part of the Visa Electron Global
Debit Programme. This puts a network of more than 8000
merchant outlets and 235 ATM locations in India, as well as over 8 million merchant
outlets and 530, 000 ATMs worldwide.

Salary Account

Bank offers corporate a salary accounts package that gives their employees the benefits of
superior banking services. The extensively package gives the relief of disbursing their salaries
with a single cheque to the bank and their employees get a variety of service and conveniences,
all customized for the company. In addition a variety of value added service are offered at a very
low cost hike.
Free Personalized Cheque Book Free
ATM Card
24 Hr. Phone Banking
Intercity Banking
Bill Pay
Cash Deliver y / Cheque Pick up
Discounts on loans
Overdraft Facilit y
Phone Banking

You can bank from home or anywhere e lse through a phone using our 24 - hour automated
service. You can get your account details, ask for a chequebook a
statement, open a fixed deposit, t ransfer money within your own accounts, order
a demand draft, stop cheque payment, etc. by just a phone call.

Intercity / Interbranch Banking

You can access your account from any of our 126 branches in 50 cit ies. So you
can withdraw cash from another branch, through a self - cheque or an ATM. You
can also t ransfer funds between two accounts, or deposits a local cheque in our
branch and get is credited to your account in another city.

BILLPAY

You can now pay your telephone, electricity and mobile bills t hrough out ATMs,
Internet phone or mobile phone. Paying bi lls has never been so easy. So now
you don’t have to spend t ime standing in long queues or writing cheques.

NETBANKING

Another convenient way to access one’ s bank account front around the world
through the internet. When one registers for Net Banking a p assword is issued which can be
used with the Customer Identification Number to conduct
t ransactions and get up- to- date information on the products and services of the
bank, round the clock. The following facilit ies are offered through Net Banking:
-
Account Balance Inquiry
Account Statement Inquir y
Cheque Book request
Stop Payment Request
Demand Draft Request FD
Inquiry
New FD Request
Bill Payment

INTRODUCTION TO INTERNET BANKING

The t remendous advances in technology and the aggressive infusion of

information technology had brought in a paradigm shift in banking operations.
For the banks, technology has emerged as a strategic resource for achieving
higher efficiency, control of operations, productivity and profitability. For
customers, it is the realization of their anywhere, anytime, anyway banking
dream. This has prompted the banks to embrace technology to meet the
increasing customer expectation and face the tough competition.

The recent t rends show that most banks are shifting from a product - centric model to a
customer- centric model as they develop their new e - banking
capabilities. They have, over a long t ime, 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), banks increasingly
use Internet 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 t heir content and sophistication ( RBI, 2001).
Internet banking involves consumers using the Internet to access their bank
account and to undertake banking t ransactions. At the basic level, Internet
banking can mean the setting up of a Web page by a bank to give information about its
product and services. At an advance level, it involves provision of
facilit ies such as accessing accounts, funds t ransfer, and buying financial
products or services online. This is called ``transactional'' online banking
( Sathye, 1999).

There are two ways to offer Internet banking. First, an existing bank with
physical offices can establish a web sit e and offer Internet banking in addition
to its t raditional delivery channels. Second, a bank may be established as a
branchless Internet only, or virtual bank without any physical branch. Broadly,
the levels of banking services offered through INTERNET can be categorized in
three t ypes: ( i) The Basic Level Services use the banks websites which
disseminate information on different products and services offered to customers and members
of public in general. It may receive and reply to customers queries through e- mail, ( ii) In the
next level are Simple Transactional Websites which
allow customers to submit their instructions, applications for different services,
queries on their account balances, etc, but do not permit any fund - based
t ransactions on their accounts, ( iii) The third level of Internet banking services
are offered by Fully Transactional Websites which allow the customers to
operate on their accounts for t ransfer of funds, payment of different bills,
subscribing to other products of the bank and to t ransact purchase and sale of securities, etc.
( RBI, 2001)

Most of the banks providing Inter net banking products and services offer, to a large extent,
an identical and standard package of banking services and
t ransactional capabilities. In general, Internet banking products are offered in a
two-tiered structure. A basic t ier of Internet banking products includes customer
account inquiry, funds t ransfer and electronic bill payment. A second or
premium t ier includes basic services plus one or more additional services. The
list of Internet banking products and services is not inclusive.

EVOLUTION OF INTERNET BANKING IN INDIA

Indian banking industry, today, is in the midst of an IT revolution. The technology changes have
put forth the competition among the banks. This has led to increasing total banking automation in
the Indian banking industry. New private sector banks and foreign banks have an edge over
public sector banks as far as implementation of technological solutions is concerned. However,
the later are in the process of making huge investment in technology.

The financial reforms t hat were init iated in the early 90s and the globalization
and liberalization measures brought in a completely new operating environment
to the banks. Services and products like Anywhere Banking, Tele - Banking,
Internet Banking, Web Banking, E - Banking etc. have become the buzzwords of the day and
the banks are t rying to cope with the competition by offering
innovative and attractively packaged technology based services to their customers.

Like most of other activities in banking RBI also set up two committ ees in quick succession to
accelerate the pace of automation of operations in the banking
sector. In the early 80 s, 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 t ime frame of 1985 - 89. The focus by this t ime was on customer service and
two models of branch automation were developed and implemented. Having
gained experience in the earlier mode of compu terization, the second Rangarajan committee
constituted in 1988 drew up a detailed perspective plan for
computerization of banks and for extension of automation to other areas like funds t
ransfer, e- mail, BANKNET, SWIFT, ATMs, Internet banking etc.

The Government of India enacted the Information Technology Act, 2000,

generally known as IT Act, 2000, with effect from the 17 th October 2000 to provide legal
recognition to electronic t ransactions and other means of
Electronic Commerce. Reserve bank of India h ad set up a Working Group on
Internet Banking to examine different aspects of Internet banking ( I - banking).
The Group had focused on three major areas of I - banking i. e., ( i) technology and securit y
issues, ( ii) legal issues and ( iii) regulatory and supervi sory issues. RBI had accepted the
recommendations of the Working Group and accordingly issued guidelines on Internet banking
in India for implementation by banks. The
Working Group has also issued a report on Internet banking covering different aspects of I-
banking.

Considerable progress has been made in consolidating the existing payment

systems and in upgrading technology with a view to establishing an efficient,
integrated and secure system functioning in a real- t ime environment. Major
projects under implementation are electronic clearing, centralized funds
management, structured financial messaging solutions and the Indian Financial Network
(INFINET). Facilities under Electronic Funds Transfer ( EFT) have
been upgraded and their spatial reach expanded with multiple settlements in a
day. Foreign exchange clearing has been init iated through the Clearing
Corporation of India Limited ( CCIL). Adequate security features are being
incorporated into the EFT. Preparatory work for the real t ime gross settlement
( RTGS) is complete. ( RBI, 2001)
As per an Internet survey the Indian Internet market grew steadily in terms of subscribers.
There is a growth of 30% in March 2002 compared to the 1. 1
million active subscriber base in March 2001. The survey also forecas ts that the
number of Internet subscribers in the year 2004 - 05 is likely to reach 7. 7 million,
with the user base to grow over 50 million. India's Internet user base is growing
at a rapid pace. India's Internet population grows to 29 million by March 2003
from 10. 7 million in 2002. Banking and finance market has got the largest share
i. e. 21 percent among the other sectors of economy in using information
technology. Thus there is a lot of scope for banking inst itut ions to expand their
Internet banking services to have a more sophisticated customer base.

Private and foreign banks have been the early adopters of e - banking while the
Public sector banks are also beginning to hold on to the competition. ICICI
Bank and HDFC Bank have taken a lead in introducing e- banking in India. ICICI Bank is the
first one to have introduced Internet banking for a limited range of
services such as access to account information; correspondence for the first t ime
in 1996 and recently, funds t ransfer between its branches ( Rajneesh and
Padmanabhan, 2002). ICICI is also getting into e t rading, thus offering a
broader range of integrated services to the customer. Other banks also followed
the suit. However, 1996 - 98 was the period of Internet banking adoption while
the Internet banking usage gained importance only in 1999. After ICICI,
Citibank, IndusInd Bank and HDFC Bank were the early ones to adopt the
technology in 1999.
 REVIEW
OF
LITERATURE
REVIEW OF LITERATURE

In India not many studies have been condu cted on the current status of Internet
banking. Thus almost no literature is available on this subject in India.
Therefore this paper reflects the current status of Internet banking by Indian
private, public and foreign banks operating in India. There are numerous papers that sought to
study the growth of Internet banking internationally.

Furst et. al. ( 2002) provided a comparative study of Internet and non - Internet
banks in U. S. and found that inst itutions with Internet banking outperformed
non- Internet banks in profitability. Also, banks in all categories of size offering Internet
banking tended to rely less on interest yielding activities and deposits
than non- Internet banks do.

Sullivan ( 2000) found that Internet banks in 10 th Federal Reserve District

incurred higher expenses but also generated higher fee income and concluded that the
measures of profitability for Internet banks are similar to those of the non- Internet banks.

Guru et. al. ( 2000) examined the various electronic channels ut ilized by the
local Malaysian banks and also accessed the consumers reactions to these
delivery channels. It was found that Internet banking was nearly absent in
Malaysian banks due to lack of adequate legal framework and security concerns. However over
60 percent o f the respondents were having Internet access at home
and thus represented a positive indication for PC based and Internet banking in future.

Koedrabruen et. al. ( 2002) investigated, designed and developed an Internet based retail
banking prototype that meets the requirements of the Thai
customers. It found that more than half of the sample Internet users in Thailand
are very interested in using the Internet banking services. The main features
needed are balance inquiry, bill payment, fund t ransfer, busin ess information,
and payment for goods purchased. The prototype was then developed and
validated. The survey from t he executives of four Thai banks revealed that there
was a potential growth for retail Internet banking in Thailand.

Unnithan et al. ( 2001) studied the drivers for change in the evolution of the banking
sector, and the move towards electronic banking by focusing on two economies “Australia
and India. The paper found that Australia is a country
with Internet ready infrastructure as far as tele communication, secure protocols,
PC penetration and consumers literacy is concerned. India, by comparison, is overwhelmed
by weak infrastructure, low PC penetration, developing security
protocols and consumer reluctance in rural sector. Although many major banks
have started offering Internet banking services, the slow pace will continue until
the crit ical mass is achieved for PC, Internet connections and telephones.
However, the upsurge of IT professionals with growing demands is pressuring the
government and bureaucracy in the country to support and develop new
init iat ives for a faster spread of Internet Banking. The economy is classically
t rying to develop and catch up with leading economies.

Rao et. al. ( 2003) provided a theoretical analysis of Internet banking in India and found that
as compared to banks abroad, Indian banks offering online
services st ill have a long way to go. For online banking to reach a crit ical mass,
there has to be sufficient number of users and the sufficient infrastructure in
place.
The purpose of this study is to find the problems of customer regarding net banking.
There are a series of papers that observe that Internet banking has
revolutionized the banking industry and the banking industry is under pressure
to offer new products and services. However, to succeed in today electronic
markets a strategic and focused approach is required.

NET BANKING – CONCEPT

An industry that’s t ightly protected by regulations has finally opened up. But
this has introduced many new challenge s. Here’s a look to how technology can help
overcome these challenges and address the new set of issues associated
with modern day banking.

2.1 NET BANKING THE NEW FACE

The banking sector in India has experienced a rapid transformation. Just about a decade back this
sector was limited to the sarkari (read nationalized) and co-operative banks. Then came the multi
– national banks, but these were confined to serving an elite few.

One could regard the past as the ‘ medieval ages’ in the banking industry,
wherein every branch of the same bank acted as an independent information silo,
and multi- channel banking ( ATMs, Net Banking, Tele- Banking, etc.) was almost
non- existent.

The tipping point

The opening up of the Indian banking sector to private players acted as ‘the
t ipping point’ for this t ransformation. The deregulatory efforts prompted many
financial inst itut ions ( like HDFC and ICICI) and non- financial inst itut ions enter the banking
arena.
With t he entry of private players into retail banking and wit h multi – nationals
focusing on the individual consumer in a big way, the banking system underwent
a phenomenal change. Multi – channel banking gained prominence. For the first
t ime consumers got the choice of conducting t ransactions either the t raditional
way ( through the bank branch), through ATMs, the telephone or through the Net.
Technology played a key role in providing this multi – service platform.

The entry of private players combined with the new RBI guidelines forced
nationalized banks to redefine their core banking strategy. And technology was central to this
change.

MAJOR ISSUES

There are few major issues that affects the bank . Here are the top three concerns
in the mind of every bank’ s of CEO.

1) Customer Retention : - Customer retention is o ne of the main priorities for

banks today. With the entry of new players and multiple channels, customers
have become more discerning and less ‘ loyal’ to banks. Given t he various
options, it is now possible to open a new account within minutes. Or for that matter shift
accounts within a couple of hours. This makes it imperative that banks provide best levels
of service to ensure customer sat isfaction.

2) Increase in cost : - Cost come into play when banks are not able to afford the
cost of a certain service or init iat ive although they want to or need to have it in
place. This is primarily because the cost structure at the backend is not efficient
enough to offer that kind of service to the market place.

3) Increase Competition : - The entry of new players into the banking space is
leading to increased competition. A recent example would be space is leading to
increased competition. A recent example would be of Kotak Mahindra Finance
Limited ( KMFL) – a financial services company focused on investment
consulting, auto finance, insurance, etc morphing into Kotak Bank. Many other such players
are waiting on the sidelines.

Technology makes it easier for any company with the r ight channel
infrastructure and money reserves to get into banking. This has been one of th e major reasons
behind this kind of competition from players who do not have a banking background. Kotak
bank overcame the init ial cost of setting up its own ATM network by getting into a sharing
agreement with UTI bank.

New entrants with strategies such as these make the banking game tougher.

Redefining Objectives

To cope with cost pressures and increased competition as well as to retain

existing customers, banks started venturing into newer territories.

This is one of the main reasons why banks are fo cused on retail banking in a big
way. The main advantage of getting into retail banking is that r isks involved are
lesser in t his segment. There are lower non- performing assets ( NPAs) in retail
banking. This is one of the reasons why loans such as those fo r housing,
automotive, etc are being touted by banks like never before. Credit cards and
debit cards is another focus area for banks.
2.3 INTERNET BANKING SERVICES

With Net Banking one can have instant access to the account from any part of
the globe. The bank follows the concept of being everywhere, the wants it to be
that is it follows anywhere banking rules. The facilit ies being offered are as
follows: -
1. Account Balance Inquiry : - Net Banking can be used to find out the
balance of savings or current account. When this option is selected the
following information can be viewed.
Available Balance: - The amount available for withdrawal.
Uncleared Funds: - The total amount of cheques deposited, that are yet to be cleared.
Ledger Balance: - The closing balance as of the previous day. Overdraft
Limit
Hold Funds: - The total amount of funds ear- marked on the account.
Amount to be swept in from the fixed deposit on that day, based on the sweep - in Instruction
given.

2. Account Inquiry Statement : - One can view the statement t ransactions

that have been completed on the account for the current period or for a specific period
determined. The statement will contain t he following information: -
Opening Balance of the Account
Transaction Date
Description of t he date
Cheque number/transaction reference number
Value date of the t ransaction
Credit / Debit Amount
Closing Balance
I f one wants to receive a copy of the statement one can leave a request and the
statement would reach at the mailing address on the recor ds. The statement for
the current period will display all t he t ransactions performed across all the delivery
channels from the date of the last statement mailed.

3. Stop Payment Request : - One can give stop payment request on a cheque
or a series of cheques online. All that has to be done to enter the starting cheque
number, the ending cheque number and the reason for stopping payment, make a
stop payment request on a single cheque enter the same number in both the
fields provided. Currently this service i s provided free on net banking.

4 Demand Draft ( DD) / Bankers Cheque ( BC) Request : - One can have a
banker’s cheque or Demand Draft issued from the account. All one has to do is
to select the account to be debited, enter the location, the name of the
beneficiar y and the amount. The DD/BC will be sent by courier to the mailing address on
records.

5 Cheque Book Request : - One can request for a new chequebook online.
The cheque will be sent to the customer through the courier to the address in t he records.

6 FD Inquiry : - Net Banking can be used to access the following details of

the Fixed Deposit Account.
Principal Balance
Term Deposit
Rate of Interest
Maturity Date
Maturity Amount
Instructions for payment on maturity Lien
Amount

7 New FD Request : - A Fixed Deposit account can be opened online by

following these simple steps.
Select the account from which t he funds are to be t ransferred into Fixed Deposit.
Enter the amount and the term for which the FD has to be made. Select the
branch at which t he FD has to be made.
Select the relevant maturity instructions.
I f the term of the FD exceeds 6 months, select whether to receive interest quarterly or
on maturity.

LATEST ADDED ADVANTAGES OF NET BANKING

Third Party Transfers : - Now all net banking customers can t ransfer funds from any of
their accounts to any Third Party account anywhere in the bank. Transfers will be effected
ONLINE AND REAL TIME. Feel t he power of Net Banking with online t ransfers to any
account within t he country. No more
hassles of issuing outstation cheques / demand draft etc. to other account
holders of the bank. Simple steps to effect online t ransfers and it ensures secure
t ransfer of funds through self registration of third parties and the results of the
t ransfer can be seen immediately in the statement.

ENET: - ENET is internet based fully secured and online e lectronic deliver y
channel, which provides corporate clients with convenient and secure access to their banking
data around the world. ENET offers a cost effective and
convenient way to access the information related to their accounts and t ransact
business and exchange information globally across the electronic delivery
channel. It allows banks to effectively serve its clients with heterogeneous core systems across
branches. It enables the bank to share information across it s
branches. Hence giving multi- branch connectivity and inter branch services.

Benefits of ENET
Real Time interactive solutions and Information sharing across the bank’ s branches.
Round the clock availability Easy
to use
Secured and Protected data t ransmission

Bill Pay on Net Banking : - Now the customers can also pay bills through the
Internet facility it allows to pay your utility and cellular phone bills on the net from any where
in t he world, anytime, all yo u have to do is log- in to bank’s
website, select the bill payment option and the company for which you have to
pay t he bill. Enter in the bill amount that has to be paid and confirm.
Customers’ account will be automatically debited and paid to the billing company the
next working day.

The Five Main Reasons for Going Online

1. Internet Banking removes the need for physical presence in the new
territories – a website given global presence without investing in a brick mortar
presence.
2. Growth can be accumulated centrally without building and operating new
bank branch.
3. Time to market for new products and services is dramatically reduced,
thanks to standardized technology.
4. There is t he chance to preach to the converted. Marketing costs can be
concentrated on creating website that attract potential customers.
5. Finally Internet fits well with the characteristics of corporate banking
thousands of t ransactions can be conducted daily and multiple updates
provided, individuals can work easily from different locations.

In addition to security, quality of services is another key area in providing

successful e- banking. Any customer is only a click away from a computer
elsewhere, so it is imperative that the e - banking experience reflects an optimal
encounter each and every t ime. The web is only t he beginning of e- banking as it
is likely to evolve. The changing shape of e - banking in the future will be
fascinating to watch. As web banking becomes more common potential
customers have increased choice. The more informed among them are shopping
for service not just on the basis of obvious criteria such as interest rates and
functionalit y but also on the quality if security. Standard computer security
includes firewalls, anti virus software that is updated weekly and systems that
can prevent the entry of hackers. But experts say much of that can be exploited
by enterprising hackers. National Insurance Company is also looking at the
possibility of takers for covers against “threat to hacking” which is very
common modus operandi in the US market to claim hefty ransom by threatening
to hack one’ s system.

Due to the large usage of banking software the big software companies like
Infosys have started focusing on their software products on banking purposes.
Four our of six banks offering int ernet banking solutions are powered by it s product,
Bank away has been, mainly driven by the fact
 FEATURES OF ONLINE BANKING

1. Access to funds

Having access to your funds when banking with a traditional bank is pretty straightforward-you
can walk into a branch at any time and simply withdraw your funds. For a 100% online bank,
you will need a way to get your funds without going to a branch. 100% online banks will
typically give you the ability to transfer funds to other banks, will allow you a higher ATM
withdrawal limit, or will overnight funds to you at your request.

2. FDIC Insurance

Virtually all banks provide FDIC insurance on your checking and saving accounts. This is
federal insurance that protects the deposit holder in the event that the bank becomes insolvent.
However, you should be aware that some investment services provided by banks are NOT FDIC
insured as they are considered investments rather than deposit accounts. Make sure that you
understand and confirm what sort of FDIC insurance (there is a limit to the amount of coverage
for any particular account) you have on your prospective account(s).

3. Suite of services offered

When considering any bank, make sure to find out if they offer the complete suite of services
that you'll need, such as savings account, checking accounts, investment services,
credit/debit cards, CDs, and loans such as mortgage, auto, etc.

4. Banking Fees

Each bank has a unique fee structure that cover such items as returned checks, minimum
account balances, ATM fees and other services that the bank may
charge you for providing. Make sure that the particular set of fees works well with your
unique financial situation.
5. Access to ATMs

One of the perceived disadvantages of online banks is that they don't offer ATM service because
they don't have physical branches, but this is actually not true most of the time. Most online
banks and financial institutions do have arrangements with ATM networks to allow their
customer access to ATM machines. Many of these ATMs can be used to deposit funds as well as
withdraw funds.

6. Bill Pay

Most traditional and all online banks provide you the ability to pay your bills online. Online bill
pay is a major convenience that allows you to pay your bills without having to write checks and
keep a register. It also saves a few dollars in stamps every month and you never have to worry
about a payment getting lost in the mail. Online bill pay services are different from bank to bank,
but all will allow you to set up a list of payees that you can then send payments to directly from
your account(s). You can typically set up payments that are of a set amount and that the system
will automatically pay for you every month, such as a mortgage or car payment.

7. Customer Support

One of the major conveniences of online banking is that viewing and managing your accounts is
typically available 24 hours a day. However, there is a difference in customer support and
technical support. If you experience technical problems with your account, the technical support
group may not be available 24 hours a day.
 BENEFITS OF INTERNET BANKING :

1. For Banks

Price: - In the long run a bank can save on money by not paying for tellers or
for managing branches. Plus, it 's cheaper to make t ransaction s over the Internet.

Customer Base : - The Internet allows banks to reach a whole new market - and a well off one
too, because there are no geographic boundaries with the Internet.
The Internet also provides a level playing field for small banks who want to add
to their customer base.

Efficiency : - Banks can become more efficient than they already are by
providing Internet access for their customers. The Internet provides the bank with an almost
paper less system.

Customer Service and Satisfaction : - Banking on the Internet not only allows
the customer to have a full range of services available to them but it also allows
them some services not offered at any of the branches. The person does not have
to go to a branch where that service may or may not be off er. A person can print
of information, forms, and applications via the Internet and be able to search for
information efficiently instead of waiting in line and asking a teller. With more
better and faster options a bank will surly be able to create better customer
relations and sat isfaction.

Image: - A bank seems more state of the art to a customer if they offer Internet
access. A person may not want to use Internet banking but having the service
available gives a person the feeling that their bank is on the cutting image.

2. For Customers
Bill Pay : - Bill Pay is a service offered through Internet banking that allows the
customer to set up bill payments to just about anyone. Customer can select the
person or company whom he wants to make a payment, and Bill Pay will withdraw
the money from his account and send the payee a paper check or an electronic
payment

Other Important Facilities : - Internet banking gives customer the control over nearly every
aspect of managing his bank accounts. Besides the Custo mers can, Buy and Sell Securities,
Check Stock Market Information, Check Currency
Rates, Check Balances, See which checks are cleared, Transfer Money, View Transaction
History and avoid going to an actual bank. The best benefit is that
Internet banking is free. At many banks the customer doesn't have to maintain a required
minimum balance. The second big benefit is better interest rates for the customer.

PROBLEMS WITH INTERNET BANKING

As with any new technology new problems are faced. One of the firs t problems
that banks have to worry about is customer support. Banks will have to create a
whole new customer relations department to help customers. Banks have to
make sure that the customers receive assistance quickly if they need help. Any major
problems or disastrous can destroy the banks reputation quickly and
easily. By showing the customer that the Internet is reliable you are able to get
the customer to t rust online banking more and more.

Another major issue in banking is t he software that will be used in order to support the
network. The first major concern is with laws. While Internet
banking does not have national or state boundaries, the law does. Companies
will have to make sure that they have software in place that can detect when an
interstate law is being violated.

Security of course is a huge issue with banks. Along with securit y, encryption, and
managerial issues, a bank also has to worry about becoming too cold a
distant to the customer. Some feel that banks who offer Internet banking our becoming
more and more cold and impersonal with respect to the customer.

FUTURE OF INTERNET BANKING

Internet banking is taking an increasing importance in banks policy. Systems are

being developed throughout the USA and Europe. However much is st ill desired,
hence we think that it would be useful to create an exchange forum in charge of
the dissemination of information on Internet banking development.

Already the Financial Issues Working Group ( FIWG) is part of the Electronic Commerce
actions of the European Commission which thinks that it would be interesting to set up a
workgroup which would study the possibility of the
development of a European standardized user interface for Internet banking.
This group would concentrate on the technical implicat ions of a common interface and
also with the political implications of the same.

Another interesting role of the workgroup would be to determine what extent

systems can converge to a common standard and under which conditions They
would also deal with the security aspects of Internet banking and especially the
opportunity of implementing the smart card as a secured key for Internet banking
operations.

A last crucial point on which exchange would be welcome is the development of back-end
systems interface. It would be interesting to determine precisely the specificity's of internal
systems (amount of data exchanged, level of transaction security) in order to help the banking
sector to elaborate common specifications concerning a potential standardized back-end
interface.

Finally it must be accepted that although e - commerce is widely and quickly

spreading its wings across t he globe, at the moment it appears as if t he emerging
markets and the third world countries might take some t ime to adapt to latest
technological innovations and the modern ways of banking. However sooner
than later the entrance of internet banking would certainly sweep these nations
into the world of innovative and smart banking.
 RESEARCH
METHODOLOGY
 RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

1. To check the sat isfaction level of customers of using Net Banking services.
2. To find out the reasons for dissatisfaction and different problems
3. To get a feedback from customers regarding usage improvement of Net
Banking.
4. To get a suggestion from customers regarding t raining assistance and t raining
programs for customers.
5. Increasing the awareness regarding net banking among customers.
6. To provide recommendations for improvement.
RESEARCH METHODOLOGY

Research inculcates scientific and inductive thinking and it promotes the development of logical
habits of thinking and organization. The role of research in several fields of applied economics,
whether related to business or to the economy as a whole, has greatly increased in modern times.
Research in common parlance refers to a search for knowledge. It can also be defined as a
scientific and systematic search for pertinent information on a specific topic.

Research methodology is a way to systematically solve research problem. It may

be understood as a science of studying how research is done scientifically. In it
we study the various steps that are generally a dopted by a researcher in studying
his research problem along with t he logic behind them. It is necessary for the
researcher to know not only need to know how to develop certain indices or
tests, how to calculate, how to apply particular research technique s, but they
also need to know which of these methods or techniques, are relevant and which
are not, and what would they indicate and why.

The research frame for the study is detailed below. It is necessary to explain the
methodology for the research work done. The purpose of research is to discover
answers to question through some specific procedure. The aim of research is to find
out the t ruth which is hidden or which has not been discovered as yet. While
conducting this research I have mainly used primar y data and some sources of
secondary data also.

The main purpose of this chapter is to present the method and procedure used in execution and
conduction of this study. In order to facilitate the presentation this chapter is divided into
following section:
Selection Method.
Preparation of research design.
Determining sample design
Universe
Sample size
Sample Unit
Sample technique
Collection of data
Primary sources.
Secondary sources.
Analyses of data
Diagrammatic presentation

* Selection of method :
The present study is not subjected to experimentation. A survey method was adopted to carry out
the research.

* Preparing the research design :

The nature of the research is descriptive. A flexible research design, which provides opportunity
for considering many different aspects of a problem, is considered appropriate if the purpose of
the research study is that if exploration.

* Determining sample design :

Universe :

All the items under consideration in any field of inquiry constitute a ‘Universe’
or ‘Population’. The relevant universe in this case is Chandigarh and it consists
of four banks where a comparative study of public, private and foreign banks in
relation to customer sat isfaction in Net Banking was conducted and
interferences were drawn as to which particular concern offered better Internet
Banking than the others.

Sample Size :

A random sample of 100 respondents has been drawn.

Sample unit :

Individual having bank account and is using Internet Banking.

Sampling Technique :

Depending on the size and strength of the department a proportionate number of people picked,
on the lines of ‘ convenience sampling ’.

Data Collection:

There are two sources of data collections:

Primary Sources
Secondary Sources

Primary Sources are :

The data collection had been done by interviewing respondents through

structured questionnaire: -
Structured questionnaire contains both close ended and open - ended questions.

Secondary sources are :

Journal of Indian inst itute of bankers. Cyber
routes.
Journal of Internet Banking and Commerce.
Various web sit es.

ANALYSIS AND
INTERPRETATION
ANALYSIS AND INTERPRETATION OF DATA

Analysis and Interpretation is one of the most important steps of Research

process. No research is successful without analysis and interpretation, because from analysis
only we can come to know the actual figures.

DATA ANALYSIS & INTERPRETATION

1. Customers are using the following bank’ s services: -

Table 4.1 Different Sector Banks

S. No. Type of Bank No. of Respondents
1. Public Banks 56
2. Private Banks 35
3. Foreign Banks 9
TOTAL 100

Graph 4.1 Different Sector Banks

Interpretation

My study covers 100 respondents of Chandigarh. First of all, the question is based on knowing
the number of customers having accounts in different banks.

56 out of 100 respondents are having accounts in public banks.

35 out of 100 respondents are having accounts in private banks.
9 out of 100 respondents are having accounts in foreign banks.

2. Following respondents know how to access Internet

Table 4.2 Internet Access

S. No. Response No. of Respondents
1. Yes 85
2. No 15
TOTAL 100

Graph 4.2 Internet Access

 No 15%

Yes No

Yes 85%

Interpretation

(a) Out of 100 respondents 85 know how to use Internet.

(b) 15 out of 100 respondents don’t know how to access Internet.

3. Awareness of the concept of Net Banking?

Table 4.3 Concept of Net Banking

S. No. Response No. of Respondents
1. Yes 100
2. No 0
TOTAL 100

Graph 4.3 Concept of Net Banking

 No 0%

Yes No

Yes 100%

Interpretation

This question is based upon to find the awareness level of respondents regarding Net Banking
100 out of 100 respondents are aware of Ne t Banking.

4. following are availing the services of net banking?

Graph 4. 4 services of net banking

 Yes 35%

Yes No
No 65%

Interpretation

(a) Out of 100 respondents 35 avail the net banking services.

(b) 65 out of 100 respondents avail the services.

5. Respondents are aware of following Net Banking Services: -

Table 4.5 Net Banking Services

S. No. Type of Service % age of Respondents
1. Online Balance Enquiry 85%
2. Account Statement 80%
3. Online Stop Payment Request 55%
4. Cheque Book Request 59%
5. DD Request 48%
6. New FD Request 30%
7. FD Enquiry 21%
8. Bill Payment 40%

Graph4.5 Net Banking Services

Online Balance Enquiry

Account Statement

Online Stop Payment Request

21% 40% 85% Cheque Book Request DD Request
30% New FD Request FD Enquiry
Bill Payment

48% 80%
59% 55%

Interpretation

This question is based upon knowing the awareness level of customers in relation to Internet
Banking services provided by different banks.

(a) Out of 100 respondents 85% are aware of the online balance enquiry provided by
different banks. This service is basically involved in knowing the balance of our account by
sitting online i.e. on your PC and getting accurate information in few minutes.
(b) In relation to account statement, 80% of respondents are aware about this Internet
Banking. In this service, a customer can get account statement just by using Internet Banking
Service.
(c) This service is about getting information in relation to stopping the payment to a party
just by giving instructions online. Out of 100 respondents 55% are aware about this Net Banking
Service.
(d) This is an important Internet Banking Service. The Customers can get Cheque Book by
post just by giving instructions online. Out of 100 respondents 59% are aware of this service.
(e) Demand Draft Request can be given online. About this service 48% out of 100
respondents were known.
(f) Fixed Deposit request can be given just by giving instructions. A customer can give
request for shifting funds from current or savings account into Fixed Deposit. Out of 100
respondents 30% are aware of this service.
(g) About the status of Fixed Deposit, a request can be made and the status of FD can be
known. Out of 100 respondents about 31% are aware of this service.
(h) About Bill Payment 40% customers give positive response. They feel it convenient to
make payment through instructions only.
6. The following are the Merits / Demerits of it?

Table 4.6 Merits/Demerits of Net Banking

S.No. Merits / Demerits SA 35%
Yes A N D SD
1. Time Saving 22
Yes No 9 1 0 0
2. Time Consuming 0No 65% 0 2 2 3
3. 100% Secrecy 3 3 5 2 5
4. Direct Contact 2 2 0 0 0
5. Easy to operate 0 1 35 5 0
6. Expensive 0 0 0 1 4
7. Safe Transaction 18 2 10 4 5
TOTAL 45 17 53 14 16
Interpretation

This question has been asked to know customer’s opinion about Merits / Demerits of Internet
Banking Services.
(a) 22 are strongly agreed that Net Banking is Time Saving, 19 are agreed and 1 is having
neutral response.
(b) 2 are having neutral opinion regarding time consuming of Net Banking, 2 felt that net
banking is time consuming and 3 said that net banking is very time consuming.
(c) 3 are strongly agreed that net banking is having 100% secrecy, 3 agree, 5 are having
neutral response, 2 are having disagree view and 5 are having strongly disagree.
(d) Only 2 are strongly agreed that net banking is direct contact and again 2 are in the agreed
mode.
(e) Only 1 is agreed that net banking is easy to operate, 35 are having neutral response and 5
are disagreed about this question.
(f) Only 1 is replied that net banking is expensive and 4 said that it is very expensive.
(g) 18 are strongly agreed that through net banking transaction is safe, 2 agreed, 5 are having
neutral view, 4 are disagreed and 5 are strongly disagree

7. Response to Bank’s assistance to its customers are as follows: -

Table 4.7 Bank’s Assistance

S.No. Response No. of Respondents
1. Yes 85
2. No 15
Graph 4.7 Bank’s Assistance

70
60
60
st 14
n 50
e
d
n 40
o
p
s
e30 Yes
fR 23
17 No
o 20
o.
N 10
0
Good Knowledge Moderate
86 Knowledge No Knowledge
Knowledge of Respondent

Interpretation

(a) Out of 100 respondents, 86 are in the favors that bank should provide assistance of net
banking to its customers.
(b) Out of 100 respondents, 14 do not want any type of assistance from bank.

Further the respondents have to rank the assistance to be given

Table 4.7(i) Assistance Service

S.No. Service Ranking
1 2 3
1. Through Media 44 24 32
2. Through Bank’s Brochures 42 57 1
3. Through Bank’s Web Site 14 19 67
Graph4.7 (i) Assistance Service

80
70 67
60
50 57
40 Through Media
30 44 42
20 Through Bank’s Brochures
10 32 Through Bank’s Web Site
0
24
19
14

123

Interpretation

(a) Out of 100, 44 gave 1st ranking to Media, 42 to Bank’s Brochures, 14 to Bank’s Web Site.
(b) Out of 100, 24 gave 2nd ranking to Media, 57 to Bank’s Brochures, 19 to Bank’s Web
Site.
(c) Out of 100, 32 gave 3rd ranking to Media, 1 to Bank’s Brochures, 67 to Bank’s Website.
8. Response to training programs being provided by bank is as follows: -
Table 4.8 Training Programs
S.No. Response No. of Respondents
1. Yes 25
2. No 75

Graph 4.8 Training Programs

25

Yes No

75

Interpretation

(a) 25 out of 100 are not in favour of training by bank.

(b) 75 out of 100 wanted training programs from time to time.
Further the respondents have to rank different ways for it

Table 4.8(i) Training Methods

S.No. Service Ranking
1 2 3
1. Personal Assistance 46 19 35
2. Live Demonstration 40 56 4
3. Practical Training 14 25 61

Graph 4.8(i) Training Methods

70
61
60 56

50 46
40
Personal Assistance
40 35
Live Demonstration Practical Training
30 25
19
20 14
10 4
0
1 2 3

Interpretation

(a) Out of 100, 46 gave 1st ranking to Personal Assistance, 40 to Live Demonstration, 14 to
Practical Training.
(b) Out of 100, 19 gave 2nd ranking to Personal Assistance, 56 to Live Demonstration, 25 to
Practical Training.
(c) Out of 100, 35 gave 3rd ranking to Personal Assistance, 4 to Live Demonstration, 61 to
Practical Training.
9. An Idea about Scope of Internet Banking

Table 4.9 Scope of Net Banking

S.No. Scope % age of Respondents
1. Great Scope 75%
2. Low Scope 5%
3. Can’t Say 20%
4. Any other 0%

Graph 4.9 Scope of Net Banking

Can’t Sa 20%

Low Scope 5% Series1

Great Scope 75%

0% 20% 40% 60% 80%

Interpretation

(a) 75% out of 100 respondents have believe that Internet Banking has great scope.
(b) 5% out of 100 respondents say that it has less scope.
(c) 20% out of 100 respondents say that they do not have fixed opinion about it.
 LIMITATIONS OF THE STUDY

1) The findings of my study are based on the opinion of the respondents and
there is no way of assessing the t ruth of the stateme nts. The respondents might have
concealed, understand or overstated certain facts.

2) The study is restricted to four banks in Chandigarh.

3) Internet Banking is very vast and relatively new concept. Some people do not
know about it and this requires edu cation on this subject.

4) Lack of t ime acted as an obstacle to carry out an in depth study.

5) The information about the services and products of Internet banking has been
explored from the web- sites of the banks only. No other information source has
been availed. Whatever the information was available on t he websites of the banks
has been used for the purpose of present study.
CONCLUSIONS
CONCLUSIONS

Findings are the outcome of the research project and it reveals t hat research
project is completed keeping in mind the set objectives. Recommendations are
the suggestions that can improve Net Banking system.

FINDINGS

The main findings can be summarized as follows: -

Majority of respondents are availing bank services from Nationalized Banks. Almost all
respondents are aware about Net Banking.
Majority of respondents are aware of Net Banking services being offered by banks.
Customers have well knowledge of computers as well as Internet.
The basic problem is unawareness about Internet banking.
Customer should be educated about Internet Banking.
 SUGGESTIONS

Demo nstration Kit at banks should be made available so that customers can
come and take a demonstration. This will increase the comfort level of customers
in the usage of Net Banking and remove apprehensions or hitches if any in the
customer’s mind.
Just like the concept of offsite ATM, information section should be established
in different parts of the city where the customer can come and make queries and
t ransactions.
Measures to increase the awareness of Net Banking services should be taken.
All the cyber cafes should be bombarded with displays / banners of Net Banking
Services and arrangements for free demo should be worked out.
By advertising on the websites, by displaying banners of Net Banking describing facilit ies
offered through it .
Banks should provide to its customers Net Banking through the Internet such
that one of t he PC’ s in t he bank’s premises is connected to the web server, so
that the customers can come and have an easy access to their account.
 3 CONCLUSION

Technology is a part of the business, it no longer just a tool. “Technology has become our
business driver right from our inception.” We went in our centralized processors, used open
systems and ensured that they were scalable, web enabled and distributive is nature. We
positioned ourselves to offer alternative distribution channels like Landline and Mobile Phones,
PCS Cable and eventually wireless. Now firstly private and foreign and then public banks have
also introduced third party payments and loans on the Net. Internet Banks are using several
initiative ways to deal with its customers in more convenient manner as to increase the level of
customer satisfaction. Internet banks have also introduced E-net product which enables corporate
clients to transact business from every work states.

Still there is difference in the services provided by public, private and foreign
banks. Customers are never sat isfied with the services of private and foreign
banks than public sector banks. Another aspect whic h, I have taken into
consideration in relation to Internet Banking is the level of sat isfaction among
the customers in relation to Internet Banking 51% out of 100 respondents is
sat isfied with Internet Banking services. They are considering this service as
t ime saving and convenient. The customers basically make use of Bill Payment
Service, Online Balance Enquiry and New Cheque Book Request etc. There is
one more aspect of my study work i. e. the customers want to stick to save net
banking service bank tested by Chi- Square test.

Internet Banking is an emerging concept. So there is a need to increase t he

awareness level of Internet Banking among customers. It is beneficial for both
the Internet Banks and the customers because the cost of t ransaction of the
banks decreases and customers need not to visit the banks personally. In India,
the scope of Internet Banking is wider, by leaps and bounds.
BIBLIOGRAPHY
 BIBLIOGRAPHY

1. Journal of Internet banking and Commerce.

2. Dasgupta P. (2002). Future of E-Banking in India available at
www.projectshub.com
3. Diviz, E (1998 ) Web Banking in USA. Journal of Internet Banking
and Commerce.
4. Pegu. R ( 2000 ). Net Banking is fast becoming popular, June 25 the
Week.
5. Rao, G.R. Prathinia K. (2003). Internet Banking in India, April 11.
Monday Business Briefing.
6. www.financialexpress.com
7. www. google.com
 QUESTIONNAIRE

Dear Respondent

As a part of my curriculum in MBA, I am doing study on “Different Problems faced by net

banking users”. I will appreciate your cooperation in this regard by filling up the questionnaire
carefully. All the information provided by you will be kept confidential.

Q: - 1 Which of the following bank’ s services are you are using?

(a) Public banks 

(b) Private banks 
(c) Foreign banks 

Q: - 2 Do you know how to access internet?

(a) Yes 
(b) No 

Q: -3 Are you aware of net banking?

(a) Yes 
(b) No 

Q: -4 Are you availing the services of net banking?

(a) Yes 
(b) No 

Q: - 5 Which of the following net banking services are you aware of: -
 (a) Online balance enquiry 
(b) A/ c statement 
(c) Online stop payment request 
(d) Cheque book request 
(e) DD request 
(f) New FD request 
(g) FD enquiry 
(h) Bill payment 

Q: -6 How you rate different merits / demerits of net banking services in

5 points scale
(SA: Strongly Agree, A: Agree, N: Neither agree nor disagree,
D: Disagree, SD: Strongly disagree)

SA A D SD
(a) Time saving    
(b) Time consuming    
(c) 100% Secrecy    
(d) Direct Contact    
(e) Easy to operate    
(f) Expensive    
(g) Safe Transaction    

Q: - 7 Does your bank provide any sort of assistance regarding net

banking?

(a) Yes 
(b) No 
If yes, rank the different ways in which net banking assistance
can be provided:

(a) Through Media ___

(b) Through Bank Brochures ___
(c) Through Bank’s Website ___

Q: -8 Should bank undertake training programs to i mpart knowledge

about net banking and it operation?

(a) Yes 
(b) No 
If yes, then rank the ways of training:
 (a) Personal Assistance ___
(b) Live Demonstration ___
(c) Practical Training ___

Q: - 9 your idea about scope of Internet banking?

(a) Great Scope 

(b) Low Scope 
(c) Can’t say 
(d) Any other Idea