Professional Documents
Culture Documents
Project: University of Calcutta
Project: University of Calcutta
Project
[Submitted for the Degree Of B.Com.
Honours In Accounting & Finance /
Marketing / ………… under the University of
Calcutta]
ONLINE BANKING
Submitted by
Supervised by
Name of the Supervisor: Prof. Dipparna Jana
Name of the College: The Bhawanipur Education Society College.
Student’s Declaration
I hereby declare that the Project Work with the title “ONLINE BANKING”
submitted by me for the partial fulfillment of the degree of B.Com. Honours in
Accounting & Finance under the University of Calcutta in my original work and
has not been submitted earlier to any other University for the fulfillment of the
requirement for any course of study.
I also declare that no chapter of this manuscript in whole or in part has been
incorporated in this report from any earlier work done by others or by me.
However, extracts of any literature which has been used for this report has been
duly acknowledged providing details of such literature in the references.
Gangtok, Sikkim
ACKNOWLEDGEMENT
The satisfaction that accompanies that the successful completion of any task
would be incomplete without the mention of people whose careless co-operation
made is possible, whose constant guidance and encouragement crown all efforts
with success.
I would like to thanks our Principal and my supervisor Prof. Dipparna Jana
for their consistent guidance, inspiration and constructive suggestions that help me
in preparation of the Project on ONLINE BANKING.
INDEX
SL. NO. TOPIC PAGE NO.
EXECUTIVE SUMMERY 6
1. CHAPTER I – INTRODUCTION 7-13
-Introduction of online banking 7
- Features of Online Banking 7-8
- E-COMMERCE 10-11
2. CHAPTER-II – OBJECTIVE 14
3. CHAPTER- III – CONCEPTUAL FRAMEWORK 15-19
6. CHAPTER-VI – REFERANCES 28
EXECUTIVE SUMMERY
Today in India the scope of online banking is growing by good decent rise in usage.
The rise in the use of internet is the main criteria for development of online banking.
This project will help us to understand how the online banking came into existence
and its need in modern world. It shows us the insights of the online banking in India. It
shows us the insight of online banking in India. It helps us to understand the opportunity
and the challenges related to online banking sector in India.
CHAPTER : I INTRODUCTION
To access a financial institution's online banking facility, a customer with Internet access
would need to register with the institution for the service, and set up some password
(under various names) for customer verification. The password for online banking is
normally not the same as for telephone banking. Financial institutions now routinely
allocate customers numbers (also under various names), whether or not customers
have indicated an intention to access their online banking facility. Customers' numbers
are normally not the same as account numbers, because a number of customer
accounts can be linked to the one customer number. The customer can link to the
customer number any account which the customer controls, which may be cheque,
savings, loan, credit card and other accounts. Customer numbers will also not be the
same as any debit or credit card issued by the financial institution to the customer.
Online banking facilities offered by various financial institutions have many features and
capabilities in common, but also have some that are application specific.
Bank customers can transact banking tasks through online banking, including -
• Paying third parties, including bill payments (see, e.g., BPAY) and third
party fund transfers(see, e.g., FAST)
Some financial institutions offer unique Internet banking services, for example:
The precursor for the modern home online banking services were the distance banking
services over electronic media from the early 1980s. The term 'Online' became popular
in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to
access the banking system using a phone line. 'Home banking' can also refer to the use
of a numeric keypad to send tones down a phone line with instructions to the bank.
Online services started in New York in 1981 when four of the city's major banks
(Citibank, and Manufacturers Hanover) offered home banking services using the
videotex system.
Today ICICI bank has many online banking services in India. These services are called
ICICI NET BANKING.
It's generally secure. But make sure that the website you're using has a valid security
certificate. This let's you know that the site is protected from cyber-thieves looking to
steal your personal and financial information
.
• You have twenty-four-hour access. When your neighborhood bank closes, you
can still access your account and make transactions online. It's a very
convenient alternative for those that can't get to the bank during normal hours
because of their work schedule, health or any other reason.
• You can access your account from virtually anywhere. If you're on a business trip
or vacationing away from home, you can still keep a watchful on your money and
financial transactions - regardless of your location.
• Conducting business online is generally faster than going to the bank. Long teller
lines can be time-consuming, especially on a Pay Day. But online, there are no
lines to contend with. You can access your account instantly and at your leisure.
0
• Many features and services are typically available online. For example, with just
a few clicks you can apply for loans, check the progress of your investments,
review interest rates and gather other important information that may be spread
out over several different brochures in the local bank.
DISADVANTAGES OF ONLINE BANKING.
• Yes, online banking is generally secure, but it certainly isn't always secure.
Identity theft is running rampant, and banks are by no means immune. And once
your information is compromised, it can take months or even years to correct the
damage, not to mention possibly costing you thousands of dollars, as well.
• Some online banks are more stable than others. Not all online setups are an
extension of a brick-and-mortar bank. Some operate completely in cyberspace,
without the benefit of an branch that you can actually visit if need be. With no
way to physically check out the operation, you must be sure to thoroughly do
your homework about the bank's background before giving them any of your
money.
• Before using a banking site that you aren't familiar with, check to make sure that
their deposits are FDIC-insured. If not, you could possibly lose all of your
deposits if the bank goes under, or its major shareholders decide to take an
extended vacation in Switzerland.
• Customer service can be below the quality that you're used to. Some people
simply take comfort in being able to talk to another human being face-to-face if
they experience a problem. Although most major banks employ a dedicated
customer service department specifically for online users, going through the
dreaded telephone menu can still be quite irritating to many. Again, some are
considerably better (or worse) than others.
• Not all online transactions are immediate. Online banking is subject to the same
business-day parameters as traditional banking. Therefore, printing out and
keeping receipts is still very important, even when banking online
E-COMMERCE?
• Gather and use demographic data through web contacts and social media.
• Reach prospective and established customers by e-mail or fax (for example, with
newsletters).
• Group buying
• Newsgroups
• Online banking
• Teleconferencing
• Electronic tickets
• Social networking
• Instant messaging
Timmers (2000) supports this view, highlighting the key features of the Internetsuch as
24hour availability, almost immediate access, and the absence of physical borders.
Indeed, the Internet has been one of the key drivers in promoting E-Commerce in the
banking sector(Jeevan, 2000). The opportunities for banks in the Internet arena are
varied (Stamoulis, 2000).Despite this plethora of opportunities, threats to the e-banks
abound. One major threat to banks is the“Internet only” virtual banks. With US$ 2
million, one can set up a fully-functional ,Internet Only bank and provide payment
services on the Internet. The Internet banks serve also as gateways offering
identification and authorization services toa number of third party service providers.
There are user-friendly opportunities for conducting business over the Internet with
telephone companies, Energy Company, tax board and other institutions. Demand for
those services influences also the usage rates of Internet banks. For example in 2002
in USA, 81867 private individuals submitted electronic tax declarations79727 of them
did it through Internet banks and 2140 through tax boards own home page.
Several studies including Schultz et al. (2001) suggest that security measures that are
inconvenient for users may weaken E-Banking prospect, for example because of lack of
user acceptance or outright resistance .Here we note some challenges of Electronic
banking systems (H. C. Lau & Etal, 2001)
• The ability to adopt global technology to local requirement .An adequate level of
infrastructure and human capacity building are required before developing
countries can adopt the global technology for their local requirements
• The ability to strengthen public support for e-finance: Historically, most e-finance
initiatives in developing countries have been the result of cooperative efforts
between the private and public sectors.
• The ability to create a necessary level of regulatory and institutional frameworks:
The lack of regulatory frameworks, trust, security and privacy standards, high
trade barriers, customer and investor protections impede progress in
implementing e-banking initiatives on a larger scale in many developing
countries.
• The ability to mainstream small and medium scale enterprises(SMEs) towards
ebanking: The availability of and access to quality data and banking information
is required for SMEs in developing countries to move towards e-banking.
CHAPTER-II
OBJECTIVE
• To understand the growth of online banking in India.
• To understand the challenges associated with online banking in India.
• To understand the notion of online banking with respect to customer
accessibility.
o PRIMARY DATA o
SECONDARY DATA
• 7% of account holders in the country are using the Internet for banking
transactions, while branch banking has fallen by a full 15 percentage
points, according to a report by global management consultancy
McKinsey & Company.
• Use of the Internet for banking has seen a massive rise in the 2010-11
survey, taking the overall number of bank consumers who use the Net to
close to 7 per cent of the total bank account holders -- a seven-fold jump
since 2007 -- even as for the first time in the past 13 years, branch
banking has come down by a full 15 percentage points during the same
period.
• India leads growth in Asia in mobile and Internet usage for banking. While
there was a 15 per cent decline in branch usage in India, the growth in
usage of the Internet and mobile before the first time since we started this
survey in 1998, we see a marked shift away from using branches as a
main channel for interaction in many markets. This is a fundamental shift
in consumer behavior, and has significant implications for banks. The
scale of branch network is a less decisive factor for capturing customers
now.
• The worst casualty is loyalty as there is a full 40 percentage point drop in
loyalty since 2007, though 95 per cent are seemingly satisfied with their
main banks, says associate partner Jatin Pant, adding the average
number of banking relationships across the country rose 19 per cent from
1.4 in 2007 to 1.7 in 2011, while the average percentage of people willing
to shop around rose 15, marking a greater willingness of consumers to
vote with their feet and engage with a broader variety of financial
institutions.
• Banking has almost tripled." When it comes to financial planning too,
there is a marked progress with the percentage of consumers using
financial planners soaring from 14 per cent in 2007 to 43 per cent in 2011,
while the percentage of consumers willing to take risks on capital growth
rose by 20 per cent to 44 per cent, up from 24 per cent. At the same time,
the survey says, dissatisfaction too rose with their financial planners.
2. Challenges associated with online banking in India:
Lack of outline plans & sufficient study to perform new technology, Lack of choose that
how perform technology with the highest efficiency, Lack of culture and knowledge of
banks about Electronic banking, Lack of engagement of banks management in the
system, Lack of management to use experts in IT section, Traditional attitude toward
data reengineering, Lack of economical justification and risk to use Electronic banking
systems.
Therefore, offering high quality services to satisfy consumers needs, at‟ lower cost
and fees, will be the
(1) The ability to adopt global technology to local requirements: An adequate level of
infrastructure and human capacity building are required before developing countries
can adopt the global technology for their local requirements.
(2) The ability to strengthen public support for e-finance: Historically, most e-finance
initiatives in developing countries have been the result of cooperative efforts between
the private and public sectors.
(3) The ability to create a necessary level of regulatory and institutional frame works:
The lack of regulatory frameworks, trust, security and privacy standards, high trade
barriers, customer and investor protections impede progress in implementing e-banking
initiatives on a larger scale in many developing countries.
(4) The ability to mainstream small and medium scale enterprises(SMEs) towards
ebanking: The availability of and access to quality data and banking information is
required for SMEs in developing countries to move towards e-banking. Similarly, online
credit in formation will enhance SMEs ability to secure financing.
Status:
• Internet banking (e-banking) is defined to include the provision of retail and small
value banking products and services through electronic channels as well as large
value electronic payments and other wholesale banking services delivered
electronically. Status in developing countries Developing countries are in
catching up in e-banking:-
• The average e-banking penetration for developing countries by the end of 1999
was close to 5% (World Bank Survey, 2001).
• In India, over 50 banks are offering online banking services. ICICI Banks
ebanking is very impressing.
CHAPTER-IV
DATA ANALYSIS
A Survey was conducted on 25 people of and the data of the survey is below.
QUESTION-1
What kind of banking do you prefer?
Traditional
Other
12 10
8642
0
Both
TYPE OF
Traditional Other Both
BANKING
NO. OF
5 8 12
PEOPLE
This shows us the preference of people toward the type of banking. They prefer to use
the services of both the online and traditional banking rather than a particular type.
From this survey I came to know that out of 25 people, 5 people prefer traditional
banking, 8 people prefer online banking and 12 people prefer both i.e. online and
traditional banking.
The People who are mainly involved in online banking are the people of the age group
of 20-30 years. They prefer online banking as they are familiar with both the good and
bad points of online banking.
QUESTION-2
YES
NO
10
8642
0
CANT SAY
NO OF PEOPLE 11 7 7
Majority of the people think that their Account is secured, but not all. Their security
concern should be eradicated. This will attract customers.
7 out of 25 people think that online banking is not at all secured because:
• Passwords
• Phishing
• Key loggers
• Two-Factor Authentication
QUESTION-3
14
12
10 8
6
4
2
0
YES NO CANT SAY
NO. OF PEOPLE 13 5 7
There are about 5 out of 25 people who don’t think online banking is not better then
traditional banking as they are not familiar with the process of online banking. The
people don’t know the basic positive point of online banking. For eg. Some people think
that online banking is not secure then traditional banking. Password can be hacked etc.
There are 13 out of 25 people who think that online banking is better than traditional
banking as they know the positive point of online banking. For eg. The people know that
due to online banking fast access to account can take place, payments can be faster
the usual mode etc.
QUESTION-4
weekly
monthly
12 10
8642
0
regularly rearly
NO. OF 5 11 2 7
PERSO
N
Out of 25 people only 5 people use their Banking service weekly. These are those class
of people who either do their own business or who are involve in business like shop
keeping, tours and travels etc.
Out of 25 people only 2 people use their banking services regularly. These are those
people who use whose business is totally dependable on banking. Eg. Government
Suppliers, Share brokers, Agents of LIC etc.
Out of 25 only 7 people use their banking services rarely. These types of people are
either student or whose age limit is below 22 years.
QUESTION-5
How happy are the people with their online banking service provided with their banks?
10
0
Completely Partially Fairly Not at all
No. of 4 9 9 3
people
The satisfaction level of people with the online banking service of their banks has a
mixed review.
FINDING: out of 25 people 4 people are completely happy with their online Banking.
This is due to they know the advantages or advantages of online Baking and they
usually involved in internet services. And more over these people are basically of the
age group between 20-25 years.
Out of 25 people 3 are not at all happy with their online bnking service because they are
less involved in Internet service or they do not know how to use internet service at all.
The second reason is that the these 3 people are very frightened to use there online
service because of the threat involved in online banking like Hacking of accounts,
Phishing etc.
QUESTION-6
Check Balance
12 10
8642
0
Transfer of fund
Other
No. of 11 7 2 5
people
The utility of the online banking is service is not used to the extent is should be and it is
being majorly used for the purpose of checking the balance in the account. The reason
for this is low volume of transaction among the people.
QUESTION-7
Given the opportunity to shift from traditional Banking to Online Banking will the people
prefer to do so?
The survey was done on 30 people who were divided in the age group of 20-40 years,
41-60 years, 60 and above.
Between the age group of 20-40 years the people were ready to shift from traditional
banking to online banking. Out of these people also there were many of them who use
online banking from the day of opening of their account. No. of people in this category
were 8 out of 25.
Ready to shift
54321
0
Already using online banking
The advantages that they were knowing about online banking were as follow:
Bank customers can transact banking tasks through online banking, including -
• Paying third parties, including bill payments (see, e.g., BPAY) and third
party fund transfers(see, e.g., FAST)
But some people after giving a satisfactory reason also were not ready to shift from
traditional to online banking. Some of the reasons that were there not to shift from
traditional to online banking were-
• Passwords
• Key loggers
• Phishing
In the age group of 60 and above the people were not at all ready to shift from
traditional banking to online as they were not knowing how to internet or were very
scared to do transaction without their physical presence.
CHAPTER-V
RECOMMENDATIONS AND CONCLUSIOIN
CONCLUSION:
The people are not confident enough to weather to relay completely on online
banking. There is hesitation in the mind of people with regard to preference. So they
use both the technique of Banking i.e. Online Banking and Traditional Banking.
Because of the complexity and the awareness in the people regarding the online
banking, there is less utilization online banking services provided by the bank.
People are not completely sure whether there account is completely secure in
online banking or not. Security concern is the main and the core reason why people
do not tend to use online banking.
People in India are not aware of the full utility of online banking and the services that
can be availed of in online banking.
Most of the Indian population are salaries employees who do not have that volume
of transaction that can be used for online transaction.
RECOMMENDATION:
After analyzing the entire study on online banking with respect to both the primary and
secondary data the following recommendations can be put forward-
• The infrastructure for the development is not being implemented in the way that
could be beneficial.
• There are various obstacles in the banking scenario with regards to guidelines
and issues for functioning. This has led to decline in the usage of the online
banking service of the bank.
• The people having account can be urge to take up an internet banking facility.
They should be motivated rather than just being told that there exists a service of
online banking.
• There are many people who are not aware of all the benefits that they reap out of
the transaction of online banking. They should be a proper awareness among
the people about online banking.
• Most of the people do not opt for online banking due to the problems of security
concerns. Proper security software should be developed and people should be
convicted that their account are secured in online transactions.
CHAPTER-VI
REFERANCES
• BANKS:
• INTERNET:
http://www.onlinebanking.net
http://www.sendmoneyindia.org
http://www.ehow.com
http://www.intenetworldstar.com
http://www.economictime.indiatime.com
http://www.indiamba.com
http://www.searchdatacenter.com
• REFERANCE BOOKS
R.K. UPPAL
BANKING WITH TECHNOLOGY
NEW CENTURY PUBLICATIONS
NEW DELHI