A

Dissertation Project Report

on

ONLINE BANKING ANALYSIS

To be submitted in the fulfillment of requirements for the award of Post Graduate

Diploma in Management (PGDM) Batch (2020-2022)

Under the Supervision of Submitted by

Dr. Ruchi Rayat Siddharth Singh
(Dean OSW, Area Chair 00920DM038
HR)

PLOT NO. 7, KNOWLEDGE PARK-II, GREATER NOIDA-201306, (U.P.), INDIA

 Student Declaration

I hereby declared that the project work which the title of “Analysis of Online Banking in
India” submitted by me for the partial fulfillment of the degree of PGDM (Finance &
Marketing) in Banking and Finance under the GNIOT Institute Of Management Studies is my
own original work and has not been submitted earlier to any other university for the
fulfillment of the requirement for any other degree.
I do hereby also declare that no chapter of this manuscript in whole or in part has been
incorporated in this Report from any earlier books or work done by other or by me. However
extract of any literature which has been used for this Report has been duly acknowledged
providing detail of such literature in this reference.

2
 ACKNOWLEDGEMENT

While conducting the Industry Online Banking Oriented Project, innumerable people
have given me various suggestions and opinions while conducting the Online Banking
Oriented Project. I have tried to incorporate all those suggestions which are really
relevant in preparing my final report. I think it is essential to thank all those who have
contributed and helped me throughout the duration of the project.

I pay my immense gratitude to Prof. “Dr. Ruchi Rayat Ma’am”, Faculty of “GNIOT
Institute of Management Studies, Greater Noida for her continuous and deliberate
discussion on the topic and indeterminable burden taken by her in helping me throughout
conducting the project.

I would also like to thank my friends who rendered their wholehearted co-operation in the
successful completion of the project work.

Finally, I am thankful to all the people who willingly responded to the questionnaire and
their contribution has been invaluable. This project would not have been completed
without their participation.

I am pleased to state that the whole report is just the presentation of the facts that have
been found during the project through different sources and its each sentences an exact
representation of the information obtained and the analysis thereof. I hope that I have
manifested my sincere attempt store present all the information and other things to the
best of my ability.

Date: / / 2022
Name: Siddharth Singh
Enroll. No.: 920007
Course: PGDM (VI-Trimester) Signature of Student

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 INDEX

SERIAL NO Contents PAGE

NO.
Chapter-1 Introduction 1-7
1.1. Background 1
1.2. History 1
1.3. Objective of the study 2
1.4. Review of literature 3-6
1.5. Database & methodology 6
1.6. Limitation of study 6
1.7. Chapter planning 7
Chapter-2 Online banking-an overview 8-14
2.1. Definition 8
2.2. How online banking evolved into mainstream financial tool 8-10
2.3. Features of online banking 11-12
2.4. Advantages of online banking 12-13
2.5. Disadvantages of online banking 13-14
Chapter-3 Different types of online banking 15-32
3.1. Core banking solution 15-19
3.2. ATM banking 19-20
3.3. Digital wallet 21-22
3.4. Digital cash 23
3.5. kiosk banking 24
3.6. NEFT 24-25
3.7. RTGS 25-26
3.8. IMPS 26-27
3.9. Mobile banking 27-28
3.10. Smart card 28
3.11. Green channel counter 28-29
3.12. E-ticketing 30-31
3.13. Demat service 30-31
3.14. E-tax 31
3.15. Online demand draft 32
3.16. Other services 32
Chapter-4 Security issues of net banking 33-41
4.1. Introduction 33

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 4.2. Types of frauds 33-37
4.3. Steps to secure online banking 37-39
4.4. Ten steps to minimize security issues 40-41
Chapter-5 Online banking in India-guidelines by RBI 42-45
5.1. Guidelines to RRBs 42-43
5.2. Authentication practices to internet banking 44-45
Chapter-6 Online banking scenario with Indian economy 46-49
6.1. Online banking scenario 46-48
6.2. Initiative taken by the government of India 48-49
Chapter-7 A case study of online banking 50-71
7.1. Data analysis and interpretation 40-71
Chapter-8 Findings, Conclusion and Recommendation 72-75
8.1. Findings 72-73
8.2. Conclusions 73
8.3. Recommendation 74
8.4. Recommendation 75
Chapter-9 Bibliography 76
9.1. Websites 76
9.2. Books 76

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 CHAPTER-1

INTRODUCTION
1.1. BACKGROUND

Electronic banking, or e-banking, is the term that describes all transactions that take place
among companies, organizations, and individuals and their banking institutions. First
conceptualized in the mid-1970s, some banks offered customers electronic banking in 1985.
However, the lack of Internet users, and costs associated with using online banking, stunted
growth. The Internet explosion in the late-1990s made people more comfortable with
making transactions over the web. Despite the dot- com crash, e-banking grew alongside the
Internet.
 Online banking (or internet banking or E-banking) allows customers of a financial
institution to conduct financial transactions on a secure website operated by the
institution, which can be a retail or virtual bank, credit union or building society.

 Online banking is the practice of making bank transactions or paying bills via the
Internet. Thanks to technology, and the Internet in particular, people no longer
have to leave the house to shop, communicate, or even do their banking. Online
banking allows a customer to make deposits, withdrawals, and pay bills all with the
click of a mouse.

1.2. HISTORY

While financial institutions took steps to implement e-banking services in the mid-1990s,
many consumers were hesitant to conduct monetary transactions over the web. It took
widespread adoption of electronic commerce, based on trailblazing companies such as
America Online, Amazon.com and eBay, to make the idea of paying for items online
widespread. By 2000, 80 percent of U.S. banks offered e-banking. Customer use grew
slowly. At Bank of America, for example, it took 10 years to acquire 2 million e-banking
customers. However, a significant cultural change took place after the Y2K scare ended. In
2001, Bank of America became the first bank to top 3 million online banking customers,
more than 20 percent of its customer base. In comparison, larger national institutions, such
as Citigroup claimed 2.2 million online relationships globally, while J.P. Morgan Chase
estimated it had more than 750,000 online banking customers. Wells Fargo had 2.5 million
1
online banking customers, including small businesses. Online customers proved more loyal
and profitable than regular customers. In October 2001, Bank of America customers
executed a record 3.1 million electronic bill payments, totaling more than $1 billion. In
2009, a report by Gartner Group estimated that 47 percent of U.S. adults and 30 percent in
the United Kingdom bank online.

2
1.3. OBJECTIVES OF THE STUDY

The main objectives of the study are_

 To understand the genesis and concept of Online-Banking.

 To analyze the importance, functions, advantages and limitations of Online-Banking.
 To explain the different form of Online-Banking and to analyze the rules & regulation
regarding Online-Banking guided by RBI.
 To highlighting on the security problems of Online-Banking and how to reduce the
security issues with the help of security control tools.
 To analyze the trend of Online-Banking with the help of primary data.
 To analyze the present e-banking scenario concerned with ATM, Internet banking,
Mobile banking, credit card-debit card, fund transfer and other e-banking services.
 To examine the impact of ATM, Internet banking, Mobile banking and Credit cards.
 Customer satisfaction by analyzing the problems faced by the customers.

1.4. REVIEW OF LITERATURE

E-banking is an innovation when new information technologies merge into traditional

banking services. Operating costs minimization and revenue maximization are the major
drivers that boost e-banking services (Sannes, 2001; Reibstein, 2002). E-banking service is
basically a self-service by customers, so for banks, it requires less resources and lower
transaction and production costs (Southard and Siau, 2004; Witman and Poust, 2008). A
study about the e-banking over 1999–2006 shows that the application of e-banking can
improve banks‘ performance in terms of the growth in assets, reduction in operating
expenses and portfolio enhancement (Dandapani et al., 2008). Even in 1990s, Sraeel (1996)
emphasises that creating virtual banking will not only create a new service delivery channel,
but also lead to value creation to both banks and customers (Hwang et al., 2007; Murphy,
2007). AmatoMcCoy (2005) further argues that customers will be attracted to e-banking
when the advanced e-banking services like e-transfer and e-bill options are available.
Through interviewing banks in a small island and examining their e-banking websites from
2004 to 2006, Jenkins (2007) indicates that those banks were using e-banking as an
assurance to their customers to maintain a competitive quality of service. To continually
improve the performance of e-banking services, several core-capacities are critical:
Planning new IT infrastructure Enhancing transaction security Providing value-added
content Delivering differentiated services Managing customer relationships The retention
and expansion of relationships with relative older and lower IT awareness customers (Wu et
3
al., 2006). Consumers today are much selective in choosing banking services in terms of
their demands and preferences. To be competitive, banks must develop services to satisfy
customers as well as delight them at the same time. Liao and Cheung (2002) indicate that
the most important quality attributes underlying perceived usefulness of e-banking are
expectations of accuracy, security, network speed, user-friendliness, user involvement and
convenience. A basic Electronic Service Quality standard is developed with four
dimensions: efficiency, fulfilment, system availability and privacy (Parasuraman et al.,2005;
Ibrahim et al., 2006). Herington and Weaven (2007) indicate that online service quality has
no direct impact on customer delight, e-trust or the development of stronger relationships
with customers, but it does have a relationship to e-loyalty. Their research also indirectly
explains the change of households of using online banking service. For example, in 2003,
91% of US households held bank accounts and 93% of those used at least one electronic
transfer of funds option with their account (Kolodinsky and Hogarth, 2004). However, Fest
(2007) points out that only 40% of US households took advantage of e-banking service,
whereas over 50% of households that had not been attracted yet to e-banking because those
customers might have had a bad experience on a self-service site (Swann, 2008). The
winners in e-banking industry are those banks that are able to successfully enhance their
offerings while simultaneously enhancing security measures and getting customers to
believe in them (Rombel, 2006). In addition, for all e-banking customers, customer
satisfaction is affected not only by banks‘ service quality, but also by their cultural features
(Levesque and McDougall, 1996). E-banking in developing countries grows rapidly in the
past decade (Akinci et al., 2004). Their research indicates that for consumers‘ attitudes and
adoption towards e-banking, there were significant differences between the two groups, e-
banking users and non-e-banking users, with respect to demographic profiles, attitudinal
properties and preferences for service delivery channels. For instance, in China, there were
only 6000 computers connected to the internet with 40,000 internet users in 1995, but there
were 10.2 million internet-connected computers and 26.5 million internet users nationwide
by the end of June 2001 (Zhao, 2002). Lu et al. (2005) reveal that one of the key strategic
responses of banks in China before joining WTO was to develop e-banking to a more
competitive environment, even under the current condition of lack of practical customer
credit system. In another research, Laforet and Li (2005) examine the extent of e-banking
and m-banking in China by investigating its market status, identifying the target customers,
the demographic characteristics of users and non- users, and comparing their attitudes
towards e-banking adoption. They conclude that there was a low awareness of such services
in China, owing to security concerns, perceived risks, low computer skills and a Chinese
tradition of cash-carry banking. The rise of Internet Banking is also due to its number of
benefits for both the provider and the customer as well. From the bank‘s perspective these
are mainly related to cost savings (Sathye, 1999; Robinson, 2000) and internet banking
4
remain one of the cheapest and more efficient delivery channels (see Pikkarainen et al,
2004). Other rationales for the adoption of such services are also related to competition as
internet banking strategy has been an interesting way to retain existing customers and attract
new ones (Robinson, 2000) and to the numerous advantages to banks for instance, mass
customization, more effective marketing and communication at lower costs amongst others
(Tuchila, 2000). Benefits for the end users are numerous as well and include mainly
convenience of the service (time saved and globally accessible service), lower cost of
transaction and more frequent monitoring of accounts among others (Pikkarainen et al,
2004). However, it should also be noted that there are still customers who fear to make use
of Internet banking, as they are concerned with security aspects of such a system. Centeno
(2004) argues that speed, the convenience of remote access, 24/7 availability and price
incentives are the main motivation factors for the consumers to use internet banking. Durkin
et al. (2008) notes that the simplicity of the products offered via internet banking facilitates
the adoption of internet banking by consumers. Calisir and Gumussoy (2008) compare the
consumer perception of internet banking and other banking channels and report that internet
banking, ATM and phone banking substitute each other. Maenpaa (2008) examine the
consumer perceptions of internet banking in Finland and their findings indicate that
familiarity has a moderating role in the perception. Guerrero et al. (2007) examine the usage
of internet banking by Europeans and their results indicate that ownership of diverse
financial products and services, attitude towards finances and trust in the internet as a
banking channel influence clients‟ usage of internet banking. Confirming other papers,
Sohail and Shanmugham (2003) document accessibility of internet, awareness of e-banking
and resistance to change are found to be influencing Malaysians use of internet banking.
Another factor that promotes clients usage of internet banking is seller support (Nilsson,
2007). The rapid expansion of internet banking is most noticeable in the developed
countries such as the USA where the availability of computers and easy access to the
internet has made it easier for banks to adopt internet banking. Adoption of internet banking
services in developing countries appears to be taking place at a slower pace. In recent years
however, banks in developing countries are increasingly offering internet banking services
despite the limitations they face. Polatoglu and Ekin (2001) reported that, since 1997 several
leading Turkish banks have offered online banking services successfully. According to the
Turkey banks association, 27 out of a total of 47 banks, in other words 58% of all banks in
Turkey were offering internet banking services in 2006 (Banks Association of Turkey,
2006). Joseph and Stone (2003) investigated the customer perception of the impact of
technology on service delivery in the banking sector. According to the findings of this
research, high scores on the ability to deliver service via technology appear to be correlated
with high satisfaction with services deemed most important to customers. Hence,
availability of internet banking services appears to be very important for banks for customer
5
 satisfaction and retention. However, availability of internet banking services itself is not a
sufficient factor to increase customer satisfaction. User friendliness of the internet banking
services appears to be an important factor for customers to use these services. In a similar
study, Lang and Colgate (2003) found that customers who do not have IT gap, find it easier
to use internet banking services therefore they have higher satisfaction levels than the ones
who do not have IT skills. The empirical study by Broderick and Vachirapornpuk (2002)
also show that the level and nature of customer participation in using internet banking
services has the greatest impact on the perception of service quality.

1.4. DATABASE ANDMETHODOLOGY

 Data Collection:

Primary Source: The study is based on both of primary and secondary data. For the purpose
of case study primary data have been collected from the people of UTTARPARA through
phone calls, social network and direct interview from them.

Secondary Source: The secondary data have been collected from different articles &
website resources such as www.wikipedia.com, www.google.co.inand so many others. We
have used simple pictures, tables, & graphs to analysis & present the data. Apart from this I
also followed my supervisor‘s instructions to finish the project.
 Sampling Methodology: The Primary data have been collected through a survey with a pre-
tasted structured QUESTIONNAIRE on a sample of randomly selected 114 people of
UTTAR Pradesh in which some are college students, business persons, service holders,
working women and some people who belong to 20-60 age groups. From 114 respondents
100 respondents use online banking and the data collected from those people are used to
analysis the trend of Net-Banking.

1.5. LIMITATION OF THESTUDY

The major limitations of the study are:

 A small sample size of 114 respondents is taken to primary data analysis. So I cannot
draw proper inferences about the respondents from this sample size.
 I have not used modern statistical tools to analysis the data.
 Due to shortage of time I have not been able to make a depth study.
 I could not collect data from out site of Uttar Pradesh.
 This study is based on the prevailing respondents‘ satisfaction. But their satisfaction may
Change according to time, fashion, need etc.

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1.6. CHAPTER PLANNING

The study is divided into six chapters with reference:

 Introduction
 Online Banking- An Overview
 Different Types of Online Banking
 Online Banking in India-Guidelines of RBI
 Growth of online banking in India
 Findings, Conclusions &Re commendations
 References
 Bibliography.

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 CHAPTER-2

1.1.1 ONLINE BANKING- AN OVERVIEW

2.1. DEFINITION
 Online banking is an electronic payment system that enables customers of a financial
institution to conduct transactions on a website operated by the institution, such as a
retail bank, virtual bank, credit union or building society. Online banking is also
referred as internet banking, e-banking, virtual banking and by other terms.

 Online banking or E-banking is an umbrella term for the process by which a

customer may perform banking transactions electronically without visiting a brick-
and-mortar institution.
 Online banking is the practice of making bank transactions or paying bills via the
Internet. Thanks to technology, and the Internet in particular, people no longer
have to leave the house to shop, communicate, or even do their banking.

2.2. HOW ONLINE BANKING EVOLVED INTO A MAINSTREAM FINANCIALTOOL

In today‘s highly technical world, it‘s hard to imagine there was once a time when all
banking was conducted at an actual brick-and-mortar financial institution. Even simple
account transfers required a trip into the bank.

While today‘s online banking is filled with amazing innovations, it hasn‘t always been this
easy ─ in fact it took a long time to get this far.

8
2.3. HISTORICAL DEVOLOPMENT:
 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, Chase

Manhattan, Chemical and Manufacturers Hanover) offered home banking services

using the system. Because of the commercial failure of videotext these banking
services never became popular except in France where the use of videotext (Minitel)
was subsidized by the telecom provider and the UK, where the Prestel system was
used.

 While financial institutions took steps to implement in e-banking services in the mid-
1990s, many consumers were hesitant to conduct monetary transactions over the web.
It took widespread adoption of electronic commerce, based on trailblazing companies
such as America Online, Amazon.com and eBay, to make the idea of paying for items
online widespread. By 2000, 80 percent of U.S. banks offered e-banking. Customer
use grew slowly. At Bank of America, for example, it took 10 years to acquire 2
million e-banking customers. However, a significant cultural change took place after
the Y2K scare ended. In 2001, Bank of America became the first bank to top 3
million online banking customers, more than 20 percent of its customer base. In
comparison, larger national institutions, such as Citigroup claimed 2.2 million online
relationships globally, while J.P. Morgan Chase estimated it had more than 750,000
online banking customers. Wells Fargo had 2.5 million online banking customers,
including small businesses. Online customers proved more loyal and profitable than
regular customers. In October 2001, Bank of America customers executed a record
3.1 million electronic bill payments, totaling more than $1 billion. In 2009, a report
by Gartner Group estimated that 47 percent of U.S. adults and 30 percent in the
United Kingdom are using bank online.

 Today, many banks are internet only banks. Unlike their predecessors, these internet
only banks do not maintain brick and mortar bank branches. Instead, they typically
differentiate themselves by offering better interest rates and more extensive online
banking features.

9
  First Online Banking Services in the UnitedStates:
According to "Banking and Finance on the Internet," edited by Mary J. Cronin, online
banking was first introduced in the early 1980s in New York. Four major banks—Citibank,
Chase Manhattan, Chemical and Manufacturers Hanover—offered home banking services.
Chemical introduced its Pronto services for individuals and small businesses in 1983. It
allowed individual and small-business clients to maintain electronic cheque book registers,
see account balances, and transfer funds between checking and savings accounts. Pronto
failed to attract enough customers to break even and was abandoned in 1989. Other banks
had a similar experience.

 First Online Banking Services in the U.K.:

Almost simultaneously with the United States, online banking arrived in the United
Kingdom. The UK's first home online banking services known as Home link was set up by
Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983. The
system used was based on the UK's Prestel view link system and used a computer, such as
the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and
television set. The system allowed on-line viewing of statements, bank transfers and bill
payments. In order to make bank transfers and bill payments, a written instruction giving
details of the intended recipient had to be sent to the NBS who set the details up on the
Home link system.
Stanford Federal Credit Union was the first financial institution to offer online
internet banking services to all of its members in October 1994.

 Banks and the World WideWeb:

In the 1990s, banks realized that the rising popularity of the World Wide Web gave them
an added opportunity to advertise their services. Initially, they used the Web as another
brochure, without interaction with the customer. Early sites featured pictures of the bank's
officers or buildings, and provided customers with maps of branches and ATM locations,
phone numbers to call for further information and simple listings of products.
At the beginning of 2004, some 33 million U.S. households (31% of the market) were using
one form or another of online banking. Five years later, 47% of Americans were banking
online, according to a survey by Gartner Group. Meanwhile, in the UK e-banking grew its
reach from 63% to 70% of Internet users between 2011 and 2012.

 First Online Banking in India:

ICICI bank is the first one to have introduced Online-Banking in 1994 for a limited range
of services such as access to account information, correspondence and, recently, funds
transfer between its branches. ICICI is also getting into e-trading, thus offering a broader
range of integrated services to the customer.
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2.4. FEATURES OF ONLINE BANKING:

Online banking facilities offered by various financial institutions have many features and
capabilities in common, but also have some that are application specific.

 The common features fall broadly into several categories:

A. bank customer can perform non-transactional tasks through online banking,

including -

I. Viewing account balances.

II. Viewing recent transactions.
III. Downloading bank statements, for example in PDF format.
IV. Viewing images of paid cheque.
V. Ordering cheque books.
VI. Download periodic account statements.
VII. Downloading applications for M-banking, E-banking etc.

B. Bank customers can transact banking tasks through online banking, including –

VIII. Funds transfers between the customer's linked accounts.

IX. Paying third parties, including bill payments (see, e.g., BPAY) and third party fund transfers (see,
e.g., FAST).
X. Investment purchase or sale.
XI. Loan applications and transactions, such as repayments of enrolments.
XII. Credit card applications.
XIII. Register utility billers and make bill payments.
XIV. Financial institution administration.
XV. Management of multiple users having varying levels of authority.
XVI. Transaction approval process.

Some financial institutions offer special internet banking services, for example:

Personal financial management support, such as importing data into personal Accounting
Software. Some online banking platforms support account Aggregation to allow the
customers to monitor all of their accounts in one place whether they are with their main
bank or with other institutions.

11
2.5. ADVANTAGES OF ONLINEBANKING:-

Many banks have begun to offer customers the option

of online-internet banking, a practice that has
advantages for both all parties involved. The
convenience of being able to access accounts at any
time as well as the ability to perform transactions
without visiting a local branch, draw many
People to be involved. Some of these advantages of internet banking but are not limited to, include:
 Customer’s convenience

Direct banks are open for business anywhere there is an internet connection. They are also 24
hours a day, 365 days a year open while if internet service is not available, customer services
is normally provided around the clock via telephone. Real-time account balances and
information are available at the touch of a few buttons thus, making banking faster, easier
and more efficient. In addition, updating and maintaining a direct account is easy since it
takes only a few minutes to change the mailing address, order additional checks and be
informed for market interest rates.
 More efficient rates
The lack of significant infrastructure and overhead costs allow direct banks to pay higher
interest rates on savings and charge lower mortgage and loan rates. Some offer high-yield
checking accounts, high yield certificate of deposits (CDs), and even no-penalty CDs for
early withdrawal. In addition, some accounts can be opened with no minimum deposits and
carry no minimum balance or service fees.
 Services
Direct banks typically have more robust websites that offer a comprehensive set of features
that may not be found on the websites of traditional banks. These include functional
budgeting and forecasting tools, financial planning capabilities, investment analysis tools,
loan calculators and equity trading platforms. In addition, they offer free online bill
12
payments, online tax forms and tax preparation.
 Mobility
Internet banking also includes mobile capabilities. New applications are continually being
created to expand and improve this capability or smart-phones and other mobile devices.
 Transfers
Accounts can be automatically funded from a traditional bank account via electronic
transfer. Most direct banks offer unlimited transfers at no cost, including those destined for
outside financial institutions. They will also accept direct deposits and withdrawals that the
customer authorizes such as payroll deposits and automatic bill payment.

 Ease of use

Online accounts are easy to set up and require no more information than a traditional bank
account. Many offer the option of inputting the customer's data online or downloading the
forms and mailing them in. If the customer runs into a problem, he has the option of
calling or e-mailing the bank directly.

 Environment friendly
Internet banking is also environmentally friendly. Electronic transmissions require no paper,
reduce vehicle traffic and are virtually pollution-free. They also eliminate the need for
buildings and office equipment.

2.6. THE DISADVANTAGES OF INTERNETBANKING:

Internet banking seems like an obvious choice to leave the hassles of

traditional money management behind in exchange for it. However,
there are potential problems associated with banking over the internet
of which customers may not be aware. Consumers need to weigh the
advantages as well as the disadvantages of internet banking before
signing up. Some of the disadvantages of internet banking include:

 Bank relationship

A traditional bank provides the opportunity to develop a personal relationship with that bank.
Getting to know the people at your local branch can be an advantage when a customer needs
a loan or a special service that is not normally offered to the public. A bank manager usually
has some discretion in changing the terms of customer's account if the customer's personal
circumstances change. They can help customers solve problems such as reversing an
undeserved fee. The banker also will get to know the customer and his unique needs. If the
customer has a business account, this personal relationship may help if the customer needs
capital to expand. It‘s easier to get the bank‘s support if there is someone who understands
customer's business and vouch for his operating plan.

13
  Transaction issues
Sometimes a face-to-face meeting is required to complete complex transactions and
address complicated problems. A traditional bank can host meetings and call in experts to
solve a specific issue. Moreover, international transactions may be more difficult (or
impossible) with some direct banks. If a customer deposits cash on a regular basis, a
traditional bank with a drive-through window may be more practical and efficient.

 Service issues

Some direct banks may not offer all the comprehensive financial services such as insurance
and brokerage accounts that traditional banks offer. Traditional banks sometimes offer
special services to loyal customers such as preferred rates and investment advice at no extra
charge. In addition, routine services such as notarization and bank signature guaranteed are
not available online. These services are required for many financial and legal transactions.

 Security
Direct banks are subject to the same laws and regulations as traditional banks and accounts
are protected by the FDIC. Sophisticated encryption software is designed to protect your
account information but no system is perfect. Accounts may be subject to phishing, hacker
attacks, malware and other unauthorized activity. Most banks now make scanned copies of
cleared checks available online which helps to avoid and identify check fraud. It enables
verification that all checks are signed by the customer and that dollar or euro amounts have
not been changed. The timely discovery of discrepancies can be reported and investigated
immediately.

 Connectivity
Another issue is that sometimes it becomes difficult to note whether your transaction was
successful or not. It may be due to the loss of net connectivity in between, or due to a slow
connection, or the bank‘s server is down.

14
 CHAPTER-3
1.1.2 DIFFERENT TYPES OF ONLINE BANKING

3.1. CORE BANKING SOLUTION or CBS:

Core Banking is a banking service provided by a group of networked bank branches where
customers may access their bank account and perform basic transactions from any of the
member branch offices. Core banking is often associated with retail banking and many banks
treat the retail customers as their core banking customers. Businesses are usually managed via
the Corporate banking division of the institution. Core banking covers basic depositing and
lending of money.
Normal Core Banking functions will include transaction accounts, loans, mortgages and
payments. Banks make these services available across multiple channels like ATMs,
Internet banking, mobile banking and branches.
The core banking services rely heavily on computer and network technology to allow a
bank to centralize its record keeping and allow access from any location. It has been the
development of banking software that has allowed core banking solutions to be
developed.

15
16
 HISTORY

Core banking became possible with the advent of computer and telecommunication
technology that allowed information to be shared between bank branches quickly and
efficiently.
Before the 1970s it used to take at least a day for a transaction to reflect in the account
because each branch had their local servers, and the data from the server in each branch was
sent in a batch to the servers in the data center only at the end of the day (EOD).
Over the following 30 years most banks moved to core banking applications to support their
operations where CORE Banking may stand for "centralized online real-time exchange".
This basically meant that all the bank's branches could access applications from centralized
data centers. This meant that the deposits made were reflected immediately on the bank's
servers and the customer could withdraw the deposited money from any of the bank's
branches.
ADVANTAGES:
1. Centralized Accounting:
i) All the transactions of the bank directly impact the General Ledger and Profit and Loss
account. This provides a real time total picture about the financial position and situation of
the bank
ii) This helps for timely effective decision making for financial management, a very critical
And dynamic function in today‘s banking.
2. Centralized Product Control &Monitoring:

i) Centralization helps in better product analysis, monitoring and rollout.

ii) Aspects like interest rate modifications, product modification and interest application can
be done centrally from one place for all the branches.
iii) Bank can quickly respond to market scenario and customer needs. This gives competitive
edge to the bank.

3. Introduction of Technology Based Services:

i) Service channels such as ATM, either on-site or offsite, can be started.

ii) Cheque Deposit Machines (CDM) can be installed. Such machine in WAN connectivity
can allow any customer to deposit the cheque for collection at any branch.
iii) Cheque book printing machine can be installed at central location to give personalized
cheque books. Such machine in WAN connectivity can receive command from any branch.

4. Centralized Customer Account Management:

i) Any customer becomes the customer of the bank rather than of a branch.
ii) With unique ID / Account Number the accounts of the customers can be view centrally by
the bank. As such, customer profile, details of products and services availed by him and
customer behavior about business of the bank can be well understood.

17
iii) Such customer view gives the bank opportunity to decide directions for business
development and marketing strategies.
5. Advantages to Head Office:
i) Consolidation of MIS / statements / reporting at one place reducing duplication of tasks at
branches and it is of real time.
ii) Supervision of branches on risk perceptions possible as ongoing process.
iii) Frequent audits and timely control measures can be initiated.
iv) Faster and practically real time reconciliation of accounts.
v) Centralized marking and movement monitoring of NPA accounts.
vi) Better ALM, especially for short term assets and liabilities possible.
vii) Audit on operational aspects of the accounts can be done at a single location as entire
data is available at one place.

6. Advantages to Branch:

i) With reduced work at the branches they can focus on development of business, customer
service and attendance and meaningful liaison with customer for getting new business.
ii) Since customer needs are known with proper analysis they can be well attended even
before their demands that boost the image of bank.

 State Bank of India, World's Largest Centralized Core Processing

Implementation:

The story began in 2000. With its growth curve heading northward, State Bank of India
(SBI), the country's largest bank with the largest branch network, realized the need for a
core banking solution. An expression of interest was invited in July 2000, and the actual
implementation was started in August 2003 when the first branch of the bank was put on
TCS' BαNCS core banking solution.

18
 The planning stage lasted three years, while the BαNCS implementation took another five
years (till July 2008) to complete. The entire project of implementing the core banking
solution was handled by TCS as the systems integrator, while other major technology
partners in the project were HP, Data craft, Cisco and Microsoft. The core banking solution
implemented at SBI and its associate banks currently execute an average of 42 million
transactions per day with a peak of 1,900 transactions per second through a massive network
of about 17,700 branches and over 20,000 ATMs servicing nearly 243 million customers.
The CBS at SBI executes an average of 42 million transactions per day with a peak of 1,900
transactions per second through a network of about 17,700branches.
Further, SBI had more than 2 lac employees, and many of them had little familiarity with
Web-based technology before the core banking solution's implementation. "SBI and TCS had
to ensure that the bank employees were well-acquainted with the use of the solution, Indeed,
at one point of time, SBI had 58 training centers.

3.2. ATM BANKING:

Full-service banking, 24 hours a day.

Make banking more convenient with ATMs and debit card.

 Convenient Self Service

 Deposits – Cash and check deposits can be made at most BBVA Compasses ATM.
 Withdraw Funds – The cash you need when you need it.
 Transfer funds – Move funds between checking accounts and savings accounts
that are linked to your debit card.
 Account Management
 Check Balance – View your account balance before you make a withdrawal.
 Mini Statement – Receive a print out of your transaction history and account balances.
 Customizable
o Fast Cash – Set standard ATM withdrawal amounts.
o Receipt Options – Set whether or not you will receive a receipt when you make transactions.
o Preferred Language – Choose between English or Spanish.

19
20
3.3. DIGITALWALLET:

Nowadays, we find ourselves carrying cold hard cash less and less because you can just as
easily make your purchase with payment cards, and track you‘re spending online. Plus, it‘s
more secure than carrying $350 to buy the latest iPod (MINI).

Certain payment or loyalty cards also let you earn rewards or entries to contests, but
they do add up. They make your wallet unnecessarily thick and heavy. Perhaps it is time to
swap the system again; this time, for something that you have always been carrying
around: your smartphone

Digital wallets can help take you there. They are smartphone apps that hold your payment
and loyalty card information. Google Wallet and Apple’s Passbook are two of the more
popular ones we often hear about, but if they are not your fancy, there are plenty of other
digital wallets that carry perks and benefits that you may prefer.

1. Google Wallet

Instead of tapping your credit card on the NFC machine at the checkout counter, all you
have to do is wave your smartphone or tap it on the machine to make your payments. It‘ll
be able to identify the credit card information linked on your Google account.

For this to work, Google Wallet requires Near Field Communication (NFC)
technology available, which unfortunately is only available on certain smartphones and
tablets.

21
You link your debit or credit card to your Google account and you can leave your wallet at
home – but at the moment, it only works with phones and credit cards from the US and only
in the US. Currently, it supports merchants on the ground and online, promising more
merchants to come.
2. Apple’s Passbook

Apple‘s Passbook was introduced in IOS 6 and relies on scanning 2D barcodes to help you
manage your movie, concert and airline tickets as well as loyalty cards and coupons for
selected merchants.

The result: you get location and

time- based notifications when
you‘re near a cafe where you can
use your loyalty card or when your
airline, movie or concert ticket is
nearing its due date.

You add passes through apps that

support Passbook (link opens
iTunes). So instead of bringing your
grocery coupons and stack of
loyalty cards wherever you go, you
can store it in Passbook. Unlike
Google Wallet, you cannot use your
debit or credit card for purchases in-
store; however you can use Bill
Guard to view your bank balance
and other related information on
your iPhone.

22
3.4. DIGITAL CASH:

Digital Cash acts much like real cash, except that it‘s not on paper. Money in your bank
account is converted to a digital code. This digital code may then be stored on a microchip, a
pocket card (like a smart card), or on the hard drive of your computer.

The concept of privacy is the driving force behind digital cash. The user of digital cash is
assured an anonymous transaction by any vendor who accepts it. Your special bank account
code can be used over the internet or at any participating merchant to purchase an item.
Everybody involved in the transaction, from the bank to the user to the vendor, agree to
recognize the worth of the transaction, and thus create this new form or exchange.

23
 3.5. KIOSK BANKING:

This is the latest development on the

remote baking front, also known as
'Touch-screen' banking. A kiosk is a
self- service banking terminal that
can be operated with both credit &
debit cards. The Debit/credit card
can be swipe data gain the card
reader at the kiosk and account
accessed depots entering the ATM
PIN. Currently, very few banks like
Citibank offer this facility to their
customers at select ATM centers
across the country.

Unlike an ATM, which is primarily used for cash transactions like withdrawals, deposits, etc.,
a kiosk is primarily used for non-cash transactions like cheque book request, printing bank
account statements, funds transfer etc. The number of transactions a particular location is
expected to be able to Support is key here along with the types of transactions required. An
ATM and a Kiosk can both easily perform the same non cash and non-deposit transaction
show differentiators come down to how much time/ input the transaction takes (Financial
Kiosks have full keyboards and document printers, ATMs generally don`t) and queuing
considerations (at an ATM, most people just want to get their cash and go).

3.6. NEFT:

National Electronic Funds Transfer (NEFT) NEFT is electronic funds transfer system, which
facilitates transfer of funds to other bank accounts in over 63000 bank branches across the
country. This is a simple, secure, safe, fastest and cost effective way to transfer funds
especially for Retail remittances.

FEATURES & BENEFITS

Customers can remit any amount using NEFT Customer intending to remit money through
NEFT has to furnish the following particulars:
 IFSC (Indian Financial System Code) of the beneficiary Bank/Branch
 Full account number of the beneficiary
 Name of the beneficiary.
The facility is also available through online mode for all internet banking and mobile banking
customers. For corporate customers, bulk upload facility is also available at branches.

24
 TIMINGS
Customers can use this facility between 8AM and 7PM on all week days and between 8AM
and 1PM on Saturday. There are twelve hourly settlements between 8 AM and 7 PM on all
weekdays and six hourly settlements between 8 AM and 1 PM on Saturdays.
The money will be credited to the beneficiary‘s account on the same day or at the most next
day in case the message is sent during the last batch of settlement. Union Bank offers NEFT
facility to its customers through all its branches.

CHARGES
 Rs. 5/ per transaction if the transaction amount is less than Rs. 1 lakh
 Rs. 25/- per transaction if the transaction amount is more than Rs. 1 lakh
NOTE: Charges are waived for customers availing services at our branches in North Eastern
States

3.7. RTGS:
Real Time Gross Settlement (RTGS) is an electronic form of funds transfer where the
transmission takes place on a real time basis.
In India, transfer of funds with RTGS is done for high value transactions, the minimum
amount being Rs 2 lakh. The beneficiary account receives the funds transferred, on a real
time basis. The main difference between RTGS and National Electronic Funds Transfer
(NEFT) is that while transfer via NEFT takes place in batches (with settlements and
transactions being netted off), in the case of RTGS, the transactions are executed
individually and on gross basis.

The customer initiating the funds transfer through RTGS has to have the Indian Financial
System Code (IFSC) of the beneficiary's bank, along with the name of the beneficiary,
account number and name of the bank. The bank branches, both at the initiating and
receiving end, have to be RTGS- enabled for the transaction to be processed. Customers with
Internet banking accounts can do RTGS transactions on their own.

25
3.8. IMPS:

Using IMPS, a relatively newer service, users can transfer money immediately from one
account to the other account, within the same bank or accounts across other banks. Similar to
NEFT, there is no minimum amount for transactions, but the maximum* amount possible is
Rs 5 lakhs. Users can carry out Person to Person (P2P), Person to Account (P2A) and Person
to Merchant (P2M) transactions from their mobile, Internet or ATM. One of the advantages of
IMPS transaction is that it is available 24X7 and even on holidays. This can be payments for
utility bills, mobile or DTH recharge, credit card bills, grocery bills, travel ticketing, online
shopping and even educational institutes fee payments through this channel.

26
 3.10. SMART CARD/STORE VALUECARD:

A smart card, typically a type of chip card, is a plastic card that contains an embedded
computer chip–either a memory or micro-processor type–that stores and transacts data.
This data is usually associated with either value, information or
Both and is stored and processed with in the card's
chip. The card data is transacted via a reader that
is part of a computing system. Systems that are
enhanced with smart cards are in use today
throughout several key applications, including
27
healthcare, banking, entertainment, and
transportation. All applications can benefit from
the added features and security that smart cards
provide. According to Euro smart, worldwide
smartcard shipments will grow 10% in 2010 to
5.455 billion cards. Markets that have been
traditionally served by other machine read able
card technologies, such as bar code and magnetic
stripe, are converting to smart cards as the
calculated return on investment is revisited by
each card issuer year after year.

3.11. GREEN CHANNEL COUNTER:

3.12. E-TICKETING:

An electronic ticket (commonly abbreviated as e-ticket) is a digital ticket. The term is

most commonly associated with airline issued tickets. Electronic ticketing for urban or rail
public transport is usually referred to as card or transit pass. It is also used in ticketing in
the entertainment industry.
An electronic ticket system is a more efficient method of ticket entry, processing and
marketing for companies in the railways, flight and other transport and entertainment
industries.
On 1 June 2008, the industry moved to 100% electronic ticketing and the paper ticket
became a thing of the past. Apart from substantial cost savings for the industry of up to
US$3bilion per year, ET is also more convenient for passengers who no longer have to
worry about losing tickets and can make changes to itineraries more easily.
United Airlines was the first airline to issue electronic tickets, back in 1994. A decade
later however, only 20% of all airline tickets were electronic. The industry was missing
out on an opportunity to save costs and make travel for passengers easier. In June 2004,
IATA set an industry target of 100% ET in four years. At the time, many believed this was
an unrealistic goal. Evolving standards, uncertainty about the return on investment and
skepticism about the customer acceptance of paper in parts of the world were some of the
reasons why e-ticketing hadn‘t taken off.

28
29
 3.13. DEMAT SERVICE:

In India, shares and securities are held electronically in a dematerialized (or "Demat")
account, instead of the investor taking physical possession of certificates. A Dematerialized
account is opened by the investor while registering with an investment broker (or sub-
broker). The Dematerialized account number is quoted for all transactions to enable
electronic settlements of trades to take place. Every shareholder will have a Dematerialized
account for the purpose of transacting shares.
Access to the Dematerialized account requires an internet password and a transaction
password. Transfers or purchases of securities can then be initiated. Purchases and sales of
securities on the Dematerialized account are automatically made once transactions are
confirmed and completed.

What is Dematerialization of Shares?

Demat stands for dematerialization. Dematerialization is the process of converting

physical financial instruments such as share certificates, mutual fund investments, and
bonds into electronic form. An Investor who needs to dematerialize his shares needs to
open a demat account with Depository Participant. These physical shares are then
surrendered by the investor and in return he gets electronic shares in his demat account.
A demat account is similar to a bank account. When you receive your bank statement,
you will see 2 columns – deposits and withdrawals of money and balance money in the
account on the last day of the statement. Similarly, a demat statement will show the
investments you have bought, sold and the balance investments held on the last day of the
statement.

Now you may wonder – where do I open a demat account? That‘s easy. When you want
to buy equity shares, you approach your bank or an equity share broker. The broker will
open the demat account for you along with the brokerage account. When you buy and sell
securities, the broker will have the securities deposited into or moved out of the linked
demat account. You will also need to link your bank account to the brokerage account for
transfer of funds when you buy and sell shares, and for payment of related costs.
30
If the broker is a depository participant (who is authorized to open and maintain demat
accounts), the broker will open your demat account and maintain it in-house. However, if
the broker is not a DP, your demat account will be opened with a DP the brokerage house
is associated with.

3.14. E-TAX &E-FILING:

You can pay your taxes online through E-Tax. This facility enables you to pay TDS, Income
Tax, Indirect Tax, Corporation Tax, Wealth Tax, Estate duty and Fringe benefit Tax. The
process of submitting tax returns over the Internet, using tax preparation software that has
been pre-approved by the relevant tax authority, such as the IRS or the Canada Revenue
Agency. E-filing has manifold benefits; the taxpayer can file a tax return from the comfort of
home, at any convenient time, once the tax agency begins accepting returns.

31
 3.15. ONLINE DEMAND DRAFT:

A demand draft is a negotiable instrument similar to a bill of exchange. A bank issues a

demand draft to a client (drawer), directing another bank (drawee) or one of its own
branches to pay a certain sum to the specified party (payee).
A demand draft can also be compared to a cheque. However, demand drafts are difficult
to countermand. Demand drafts can only be made payable to a specified party, also
known as pay to order. But, cheques can also be made payable to the bearer. Demand
drafts are orders of payment by a bank to another bank, whereas cheques are orders of
payment from an account holder to the bank.

3.16. OTHERE-SERVICES:

32
 CHAPTER-4

SECURITY ISSUES OF NET BANKING

4.1 INTRODUCTION:

The Internet has made banking, shopping, and conducting other financial transactions
online quite convenient. But when it comes to your money, you want to make sure your
transactions are safe.
Security of a customer's financial information is very important, without which online
banking could not operate.
Presently, Internet banking customers only need a computer with access to the Internet
to use Internet banking services. Customers can access their banking accounts from
anywhere in the world. Each customers is provided a login ID and a password to access
the service. It is indeed easy and convenient for customers.
However, the use of password does not provide adequate protection against Internet
fraud such as phishing. The problem with password is that when it has been
compromised, the fraudsters can easily take full control of online transactions. In such
cases, the password is no longer works as an authentication token because we cannot be
sure who is behind the keyboard typing that password in.
However, easy access and convenience should not be at the expense and mercy of the
security of information. This is important in order to ensure the confidentiality of
information and that it is not being manipulated or compromised by the fraudsters.
In this lesson, we will review strategies you should employ when dealing with money
and the Internet. You will learn how to make sure a website is secure, including
checking the SSL certificate. In addition, you'll learn the steps you need to take to make
shopping online a safe and enjoyable experience.

4.2 TYPES OF FRAUDS:

Nowadays, the nature of attacks is more active rather than passive. Previously, the threats
were all passive such as password guessing, dumpster dives and shoulder surfing. Here are
some of the techniques used by the attackers today:

• Trojan Attack. The attacker installed a Trojan, such as key logger program, on a
user‘s computer. This happens when users visited certain websites and downloaded
programs. As they are doing this, key logger program is also installed on their
computer without their knowledge. When users log into their bank‘s website, the
information keyed in during that session will be captured and sent to the attacker.
33
 Here, the attacker uses the Trojan as an agent to piggyback information from the
user‘s computer to his backyard and make any fraudulent transactions whenever he
wants.

• Man-in-the-Middle Attack. Here, the attacker creates a fake website and catches the
attention of users to that website. Normally, the attacker was able to trick the users by
disguisingtheiridentitytomakeitappearthatthemessagewascomingfromatrustedsource.O
nce successful, instead of going to the designated website; users do not realize that
they actually go to the fraudster‘s website. The information keyed in during that
session will be captured and the fraudsters can make their own transactions at the
same time.

Original Website

Step 2 (victim access

accesses the attacker
website)

1
Step 1 (attacker sends spoof email)
Attacker Website Victim

Diagram on how information is being compromised

 Phishing. One of the primary methods a hacker gains access to account

information is through phishing, or tricking the victim into giving up
The information voluntarily. A hacker might send
an e- mail or even call, pretending to be a
representative of the bank and informing you about
some irregularities with your account. All you need
to do to sort things out is to provide your password
or other account information to verify your
identity. If you ever receive a communication that
appears to be from your bank and requests this
type of information, contact your
bank by phone immediately. Do not give out account information to a caller, and do
not click any links provided in any e-mails that claim to be from your bank. You
should also ensure that any employees with access to the company‘s accounts follow
the same procedures.
34
 Key loggers. Key loggers are malware programs that record keystrokes and other
data, allowing a hacker to capture your password as you enter it. Maintaining up-to-
date antivirus suites on your company computers can prevent these malicious
programs from gaining a foothold, and setting up your network‘s firewall to monitor
outgoing traffic can help you determine when an infection occurs. Many key loggers
and viruses use email to travel from computer to computer, so adding anti-virus
protection to your company‘s email server can help filter out these attacks.

 Spyware. Spyware is the number one way that online banking credentials are
stolen and used for fraudulent activities. Spyware works by capturing
information either on your computer, or while it is transmitted between your
computer and websites. Often times, it is installed through fake ―pop up ads
asking you to download software. Industry standard Antivirus products detect
and remove software of this type, usually by blocking the download and
installation before it can infect your computer.

 VIRUSES. Viruses are designed to compromise your computer systems, and

allow others to gain access to your files, etc. This is different than spyware in that
a virus may search for information considered to be of value, where spyware will
wait for input or action from whomever is using the computer. A system that is
compromised may be used to attack other systems, denying people legitimate
access to services. An example would be the recent activities of the group called
―Anonymous.‖ This group took over computer systems around the world, and used
them to launch attacks on websites. These types of attacks are called ―denial of
service‖ attacks. One of the most common scenarios with viruses is where they will
35
 discover financial data such as payroll files, bank account information, and credit
card information. This information is then transferred to criminals who sell it on the
black market, or worse – use it for blackmail. Criminals can get anywhere from
pennies to hundreds of dollars for each piece of information, depending on what it
is and how they can exploit it.

 Hacking.Hackingworkssimilarlytoviruses.A―hacker‖usessoftwaretoprobeforvulnerab
ilities, and then uses programming techniques, software utilities, or system
commands to exploit the vulnerability. The primary objective is to gain access to
your system. Once this access is obtained, you can think of it like a burglary – they
search for anything of value and often times leave damage behind. More threatening
are those hackers who simply take control of your system and wait, to see what
information becomes available or what other systems they can gain access to.

 MAN IN THE BROWSER. Man in the browser is a security attack where the
perpetrator installs. Trojan horse on a victim‘s computer that‘s capable of modifying
that user‘s Web transactions as they occur in real time. According to security expert
Philipp Goring, the technology to launch a man in the browser attack is both high-
tech and high priced. Use of the tactic has been limited to financial fraud in most
cases, due to the resources required. Both Firefox and Internet Explorer on Windows
have been successfully targeted.

 Identity Theft – Identity theft refers to all types of crime in which someone
illicitly obtains and uses another person's personal data through deception or fraud,
typically for monetary gain. With enough personal information about an individual,
a criminal can assume that individual's identity to carry out a wide range of crimes.
Identity theft occurs through a wide range of methods—from very low-tech means,
such as check forgery and mail theft to more high-tech schemes, such as computer

36
 spyware and social network data mining. The following table1 illustrates well-
known social Web sites that have been attacked.

 Spam: Spam is an electronic 'junk mail' or unwanted messages sent to your email
account or mobile phone. These messages vary, but are essentially commercial and
often annoying in their sheer volume. They may try to persuade you to buy a product
or service, or visit a website where you can make purchases; or they may attempt to
trick you into divulging your bank account or credit card details.

 Nigerian Scam: Nigerian or Frauds 409 or 419 are basically the lottery scam in
which some overseas persons are involved to cheat innocent persons or organizations
by promising to give a good amount of money at nominal fee charges. Their intention
is to steal money in the form against the lottery prize.

4.3 STEPS TO SECURE ONLINEBANKING:

4.3.1 When is a website secure for financial transactions?

Before sending any sensitive or financial information online, you want to know that
you are communicating with a secure site. Secure sites make sure all information
you send is encrypted—or protected—as it travels across the Web. The https
address heading and your browser's security symbol are two signs indicating you
are on a secure site.

4.3.1.1

Web addresses either begin with http or https. If the address is https, the
information you send to it is encrypted and will look like gibberish if intercepted
by cybercriminals.

37
Your browser will use a security symbol or lock to indicate that the browser verifies that the
website is a secure site. As seen in the examples below, the look of each browser's symbol
can be slightly different, and it is usually located in the address bar.

4.3.1.2 Security alerts and the SSL Certificate

 Secure sites have an SSL certificate. An SSL certificate does two things.
First, it acts like a virtual passport or driver's license. It means, I am who I
say I am. Second, it enables encryption. If a site does not have an SSL
certificate, the address will begin with http instead of https, and your browser
will not show a lock symbol. If it has an SSL certificate, you can access it by
clicking your browser's lock.

4.3.1.3 What should I look for on an SSL certificate?

The following is an example of an SSL certificate accessed by Firefox. Your

browser's SSL certificate may look different from Firefox's, but you should have
access to the same information.

38
1. Issued To: Check here to
make sure the website you are
doing business with matches
the website on the certificate.

2. Issued By:

The certificate authority that

issued the SSL certificate to the
website is trustworthy. There are
many different certificate
authorities, and like all companies
some are more trustworthy than
others. Verifiable SSL certificate
authority companies you are likely
to see include VeriSign, RSA Data
Security, Thawed, Geo trust, Go
Daddy, and Comoro.

3. Validity: Make sure the SSL

certificate has not expired. If
it's expired, your information
is not guaranteed to been
crypted.

39
4.4. TEN STEPS TO MINIMIZE SECURITY ISSUES:

1) Install Latest Security Software: Prevention is better than cure and the same is true for
all online transactions. The World Wide Web is full of malware, spam and spyware and the
best protection to avoid your security being compromised is to use good antivirus software.
One can also seek to purchase a full version of protection software rather than an anti-virus
which can guard against phishing, malware and Trojans.

2) Use Auto Update for All Software: If you thought your security on the internet was not
at risk thanks to all the protective software that you may have installed, think again. Even a
small glitch in any of the software being used actively can lead to possible hacking attempt.
The most commonly hacked software includes web mail clients and web browsers. Make
sure that you always have updated to the latest version of your browser and mail clients like
thunderbird and Firefox.
Web browser companies release patches as updates regularly to cover any such security
glitch in the software. If you find it hard to manually check and update their software, the
best way is to keep the auto update option enabled for all software in your computer.

3) Look for Encryption Signs: Before entering any confidential information or sensitive
data on any webpage, check if the website us using proper encryption. Encryption is a
security measure that helps protect data while travelling over the various networks on the
internet. The basic sighs of encryption include an internet protocol or URL address starting
with https (where s stands or security) as well as a sign displayed a closed padlock located in
the right corner of the screen.

4) Use Different Passwords: A recent study has revealed that majority of the people use
common passwords for a number of transactions including sensitive transactions like net
banking and credit cards for the convenience of recollecting. Using the same password
makes you at high risk, as if hackers can somehow get access to one password, they would
virtually have access to all your accounts. The best way to keep you safe in the virtual world
is to use unique passwords for different transactions.

40
5) Cash on delivery option: If any sites are offering cash on delivery option, don't hesitate
to use it as it is a good safety tip at no cost. Many sites give this option, but many of us
ignore it mainly because of our carelessness in going through all details.

6) Dealing with Offers: You might be getting lot of promotional mails and coupons as
mails from retail companies. But while utilizing such offers, it is recommended to go
directly to the seller site rather than entering details in the coupon link, which will be
usually sent by third parties.

7) Check Website's Digital Certificate: Before doing any transaction from online retailers
and merchant websites, make sure to check for safe digital certificates that can authenticate
the website. Independent services like VeriSign for example is a popular authentication
service provider which helps users to make sure that the website they are dealing with is
genuine and not some fraudulent poster.

8) Avoid Using Public Computers: Always use personal computers or electronic gadgets
like phones or tablets to complete any financial transaction over the internet. Never use any
public computers or your friend's mobile for such sensitive transaction as their security may
have been compromised. Also make sure you always connect to the internet using a secured
Wi-Fi connection which is password protected. Doing financial transactions over a public
Wi-Fi connection is highly unsafe and Notre commended.

9) Stay Away from Phishing Emails Seeking Confidential Information: Any promotional
mails from your bank or any third party websites or vendors seeking your sensitive banking
information must be ignored as spam. A lot of innocent people have been trapped by such
phishing websites and emails in the past coming in the name of banks, RBI, IT department
etc. Any mail seeking your banking information by offering lucrative lottery or content
winnings must never been courage.

10) Buy From Reputed Merchants: Doing online transaction from reputed merchant
websites and e-commerce platforms make sure your security is not compromised.

41
 CHAPTER-5

5.1 ONLINE BANKING IN INDIA-GUIDELINES BY RBI

 Guidelines by RBI on Internet Banking facility to Customers of Regional Rural banks (RRBs):
5.1.1 Technology and Security Standards:

1. RRBs should have appropriate Information Security policy duly approved by the
Board of Directors. There should be clear segregation of duties between the
Information Technology (IT) Division and the Information Security (IS) Division.
The Information Technology Division will actually implement the computer
systems. There should be a separate Information Security Officer dealing
exclusively with Information Systems security. Further, an Information Systems
Auditor will audit the Information Systems.
2. The bank should designate a Network and Database Administrator with clearly
defined roles as per the IS Audit policy duly approved by their Board.
3. Logicalaccesscontrolstodata, Systems, Applicationsoftware, utilities,
telecommunicationlines, libraries, System software, etc. should be in place.
4. The bank should ensure that there is no direct connection between the Internet and
the bank's system.
5. All unnecessary services on the Application Server such as File Transfer Protocol
(FTP), Telnet should be disabled. The Application Server should be isolated from
the e-mail server.

42
 6. The Information Security officer and the Information System auditor should conduct
periodic penetration tests of the system, which should include:

1. Attempting to guess passwords using password-cracking tools.

2. Search for back door traps in the programs.
3. Attempt to overload the System using Distributed Denial of Service (DDoS)
& Denial of Service (DoS) attacks.
4. Check if commonly known holes in the software, especially the browser and
the email software exist.
5. The penetration testing may also be carried out by engaging outside experts
(often called 'Ethical Hackers').

7. Physical access controls should be strictly enforced. Physical security should cover
all the Information Systems and sites where they are housed, both against internal
and external threats.

8. The bank should have proper infrastructure and schedules for backing up data.

9. Security infrastructure should be properly tested before using the Systems and
Applications for normal operations. Banks should periodically upgrade the Systems
to newer version which give better security and control.
5.1.2 Legal Issues:

1. Banks may provide Internet Banking facility to a customer only at his/her option
based on specific written or authenticated electronic requisition along with a
positive acknowledgement.
2. Considering the prevailing legal position, there is an obligation on the part of banks
not only to establish the identity but also to make enquiries about the integrity and
reputation of the customer opting for internet banking. Therefore, even though
request for opening an account may be accepted over Internet, accounts should be
opened only after verification of the identity of the customer and adherence to KYC
guidelines.

43
 5.2 Authentication practices for internet banking:

1. Single Factor Authentication:

An authentication mechanism that utilizes any one of the factors is called single factor
authentication. This is the basic authentication method. (For example, a User id and
password comes under this category).

2. Two Factor Authentication:

An authentication mechanism that utilizes a combination of two factors i.e. (User knows,
User possesses). This method is used by various banks for authentication for online banking.
E.g. User using a password as the first factor (User knows) and a One-Time Password (OTP)
as the second factor (User possesses) to perform say, a funds transfer transaction.

3. Multi Factor Authentication:

An authentication mechanism where two or more factors are used in which one of the factors is
Necessarily pertaining to ‗the user is‘.
(For example, a large value transaction authorized in a bank by using a combination of the
id, a smart card and his biometric authentication factor).

5.2.1. Implementation of authentication and other security measures for internet banking:

1. An effective authentication method should take into consideration customer acceptance,

ease of use, reliable performance, scalability to accommodate growth, and interoperability
with other systems.

2. An authenticated session, together with its encryption protocol, should remain intact
throughout the interaction with the customer.

3. Changes in mobile phone number may be done through request from a branch only.

4. Virtual keyboard should be implemented.

5. Customersshouldbeadvisedtoadoptvariousgoodsecurityprecautionsandpracticesinprotectingt
heir personal computer and to avoid conducting financial transactions from public or
internet café computers.

6. Risk-based transaction monitoring or surveillance process needs to be considered as an adjunct.

44
7. An online session would need to be automatically terminated after a fixed period of time
unless the customer is re-authenticated for the existing session to be maintained.

8. As an integral part of the two factor authentication architecture, banks should also
implement appropriate measures to minimize exposure to a middleman attack which is
more commonly known as a man-in-the-middle attack (MITM), man-in-the browser
(MITB) attack or man-in-the application attack.

(i) Specific OTPs for adding new payees: Each new payee should be authorized by
the customer based on an OTP from a second channel which also shows payee details or the
customer‘s handwritten signature from a manual procedure which is verified by the bank.

(ii) Individual OTPs for value transactions (payments and fund transfers): Each
value transaction or an approved list of value transactions above a certain monetary
threshold determined by the customer should require a new OTP.

(iii) OTP time window: It is recommended that banks should not allow the OTP time
window to exceed 100 seconds on either side of the server time since the smaller the time
window, the lower the risk of OTP misuse.

(iv) SSL server certificate warning: Internet banking customers should be made aware
of and shown how to react to SSL or EV-SSL certificate warning.

45
 CHAPTER-6
6.1 ONLINE BANKING SCENARIO WITH INDIAN ECONOMY
6.1.1 ONLINE BANKING SCENARIO:

Internet Banking has become an integral part of banking system in India. The concept of e-
banking is of fairly recent origin in India. Till the early 90‘s traditional model of banking
i.e. branch based banking was prevalent, but after that non-branch banking services were
started. The Indian government enacted the IT Act, 2000, with effect from the 17th October
2000. To examine different aspects of Internet banking RBI set up a committee on Internet
Banking. The committee had focused on three major areas of Internet banking, Technology
and security issues, legal issues and regulatory and supervisory issues. RBI had accepted the
suggestions and recommendations of the Working committee and accordingly issued
guidelines to banks to implement internet banking in India. The old manual systems which
were prevalent in Indian banking for centuries seem to replace by modern technologies.

Table no 1, 2 and 3 exhibit a few facts and figures related to internet/electronic banking to
present its current scenario. Table 1 shows evidence for ATM, POS (Point of sale) and
electronic cards (credit and debit cards) deployed and issued by the schedule commercial
banks (SCBs) in India as on December 2014. It also provides evidence of growing statistics
of mobile banking users in India. According to it currently 1,76,410 ATM, 10,58,642 Point
of sale devices, 20.36 million credit cards and 500 million debit cards are working in India
and 35.5 million bank customers are using mobile banking. Table also shows growth rate of
these banking channels and it seems to be great in Indian context. Table no. 2 shows current
transaction statistics performed through these banking delivery channels. As high as 6090.98
million transactions are electronically done through ATMs. Table no 3 shows NEFT and
RTGS transactions performed in the current financial year 2014-15. Table no 4 shows the
increasing growth internet users.

TABLE 1
VARIOUS INTERNET/ELECTRONIC BANKING DELIVERY CHANNELS.

No. of channels

Year
Type of internet/electronic channels Growth in %
2018* 2021**

No of ATM deployed (In Actual 60,153 1,76,410 193.27

Figure)
No of POS deployed (In Actual 5,95,958 10,58,642 77.64
Figure)
No of CREDIT CARDS issued (In 18.3 20.36 11.07
Millions)
No of DEBIT CARDS issued (In 181.97 500.08 174.81
Millions)
No of MOBILE BANKING Users 5.96 35.5 495.64
(In Millions)
46
 TABLE 2
TRANSACTIONS THROUGH INTERNET/ELECTRONIC BANKING DELIVERY
CHANNELS

No. of Transactions (In millions)

Transaction trough Year* Growth in
2017-18 2020-21 %

ATM 5086.17 6090.98 19.

76
POS 645.76 1128.12 74.
7
CREDIT CARD 320.42 511.99 59.
79
DEBIT CARD 5409.45 6707.1 23.
99
MOBILE 25. 94.6 270
BANKING 55 .25

TABLE 3

NEFT AND RTGS TRANSACTIONS

No. of Transactions (In

millions)
Transaction type Growth
Yea in %
r*
2018- 2020-
19 21
NEFT 132 927.55 602.69
RTGS 49 92.75 89.29
Source: Compiled from Bank wise ATM/POS/Card Statistics, Reserve Bank of India and
Report on Trends and Progress of Banking in India and RBI website.
TABLE-4
INCREASING INTERNET USERS IN INDIA
Years
2017 2018 201 2020 2021
9
Internet 90,421,8 122,970,441 155,575,944 213,339,324 243,198,9
users 49 22
New uses 29,486,7 32,548,593 32,605,503 57,763,380 29,859,59
79 8
Average 36,452,770

47
Growth 0 36% 72% 136 168
% %
Source: Internet Live Stats (www.InternetLiveStats.com).
Internet Banking offers different online services in India. According to a report published by
RBI there are three different levels of banking services offered through internet banking:
6.1.2 The first level i.e. Basic level services: It is basically about websites which
disseminate information about different services and products offered by banks. It
generally includes receiving and replying to customers‘ queries through email.

6.1.3 The next level i.e. Simple Transactional Websites: It allow customers to submit
their instructions and applications for different services, queries about their account
balances, etc. but do not allow any fund-based transactions on their accounts.

6.1.4 The third level i.e. Fully Transactional Websites: It allows customers to manage
their accounts, facility of fund transfer, bills payment, ticket booking, avail facility
of other banking products and services and trading in securities etc.
To sustain in the growing competition, commercial banks in India have adopted
several initiatives to improve banking services and to gain competitive advantage.

6.1.5 Bank of India recently launched its card-less cash withdrawal service. This facility
helps customers to send money to anyone using Internet banking or by using ATM,
with the help of receiver‘s mobile number.

6.1.6 ICICI bank launched 24x7 electronic branches, which is a one-stop shop for all
banking transactions. It offers facilities such as cheque deposit machine and an
electronic kiosk through which customers can be accessed internet banking services.
ICICI Bank has also introduced E-Locker for its customers. It is a virtual locker,
which can be accessed through ICICI internet banking which facilitates customer to
store soft copy of their important documents safely such as legal documents,
agreements, policies and various important certificates.

6.1.7 The banks are making their presence on social media like Facebook and Twitter for
targeting huge customer base as well as potential customers, there will be round-the-
clock tweets and comments on the banks' products and services

6.2 INITIATIVES TAKEN BY THE GOVERNMENT OF INDIA FOR

DEVELOPING THE INTERNETBANKING:

For growth and development and to promote e-banking in India the Indian
government and RBI have been taken several initiatives.

 The Reserve Bank monitor sand reviews the legal requirements of e-banking on a
continuous basis to ensure that challenges related to e-banking may not pose any
threat to financials ability of the nation.

48
 The Reserve Bank is striving to make the payment systems more secure and efficient.
It has advised banks and other stakeholders to strengthen the security aspects in
internet banking by adopting certain security measures in a timely manner.

 National Payments Corporation of India (NPCI) was permitted by the RBI to enhance
the number of mobile banking services and widen the IMPS (Immediate Payment
Service) channels like ATMs, internet, mobile etc. Along with this, NPCI is also
working to bring more mobile network operators which can provide mobile banking
services through a common platform.

 The Basel Committee on Banking Supervision‘s (2001) has defined risk management
principles for electronic banking. They primarily focus on how to extend, adapt, and
tailor the existing risk- management framework to the electronic banking setting.

49
 CHAPTER-7
A Case Study on Online-Banking

For case study a survey was conducted from March 2022 to April 2022 for the project ―Online
Banking‖. This survey was done on the basis of 50 respondents from various sectors.
Mainly the objective of the research is to understand online banking users‘ behaviors, opinions,
preferences and expectations. The questions were designed in such a way to cover all the relating
fields. The fieldwork and data analysis were conducted by me after consulting with my supervisor
and with the help of my friend. I am very much grateful to them.

Duration of survey 01-03-22 to 10-04-22

Target population Local people of Noida and Greater Noida

Survey method Direct interview, phone call and social media

Effective response rate 84% (42 out of 50)

50
 7.1. DATA ANALYSIS AND INTERPRETATION:

AGE GROUPANALYSIS

AGE GROUP

12%
32%

56%

BELOW 20 20-35 35-50

COMULATIVE
PARTICULARS FREQUENCY PERCENTAGE FREQUENCY

BELOW 20 6 12% 6

20-35 28 56% 34

35-50 16 32% 50

INTERPRETATION: Out of 50 respondents 6 respondents are in below 20 age group, 28

respondents in 20-35 age group, 16 respondents in 35-50 age group and 11 respondents in
above 50 age group. This shows with the help of a Pie-Chart.

51
 GENDER BASISANALYSIS:

GENDER

44%

56%

MALE FEMALE

GENDER FREQUENCY PERCENT CUMULATIVE FREQUENCY

AGE

MALE 28 56% 28

FEMALE 22 44% 50

INTERPRETATION: Data collected from 50 respondents, out of 42 respondents perform online

banking and this is represented by a pie chart with male and female basis analysis. It is good
for the banks as most of the respondents are aware of the internet banking and all the services
have enjoyed them being offered by bank

52
EDUCATIONAL PROFILEANALYSIS:

EDUCATION PROFILE ANALYSIS

0%

22% 10%

28%

40%

MADHYAMIK HIGH SCHOOL GRADUATE POST GRADUATE OTHER

EDUCATION FREQUENCY PERCENTAGE COMULATIVE

PROFILE FREQUENCY
MADHYAMI 0 0% 0
K
HIGH 5 10% 5
SCHOOL
GRADUATE 14 28% 19

POST 20 40% 39
GRADUATE
OTHER 11 22% 50

INTERPRETATION:
Among 50 respondents 10% are HS pass, 28% are graduate, 40% are Post-Graduate and
22% are others.

53
INTERNET USES BASISANALYSIS:

INTERNET PER WEEK

2%
4%
26%

68%

ONE HOUR TWO HOUR THREE HOUR MORE THAN THREE HOUR

INTERNET USES FREQUENCY PERCENTAGE COMULATIVE

FREQUENCY
ONE HOUR 2 4% 2

TWO HOUR 1 2% 3

THREE HOUR 13 26% 16

MORE THAN 34 68% 50

THREE HOUR

INTERPRETATION:
Among 114 respondents 68% use internet more than three hours per week, 26% use
internet three hours per week, 2% use internet two hours per week and 4% use internet
one hour in a week.

54
1. BANK ACCOUNT:

BANK ACCOUNT
4% 4%
18% 20%

12%
6%
6%
2% 24%

4%

SBI AXIS ICICI UCO HDFC UBI BOI PNB STANDARD CHARTERED OTHER

BANK ACCOUNT FREQUENCY PERCENTAGE CUMULATIVE

FREQUENCY
SBI 10 20% 10
AXIS 6 12% 16
ICICI 12 24% 28
UCO 2 4% 30
HDFC 3 6% 33
UBI 1 2% 34
BOI 3 6% 37
PNB 9 18% 46
STANDARD CHARTERED 2 4% 48
OTHER 2 4% 50
INTERPRETATION:
Among 50 respondents, 10 respondents have SBI bank a/c, 6 have AXIS bank a/c, 12 have
ICICI bank a/c, 2 have UCO bank a/c, 3 have HDFC bank a/c, 1 have UBI bank a/c, 3 have
BOI bank a/c, 9 have PNB bank a/c, 2 have STANDARED CHARTERED bank a/c and 2
have other‘ bank a/c.

55
2. DO YOU AVAIL OF ALL BANKING FACILITIES ONLINE?

ALL BANKING FACILITIES

16%

84%

YES NO

BANKING FREQUENCY PERCENTAGE CUMULATIV

FACILITIES E
FREQUENCY
YES 42 84% 42

NO 8 16% 50

INTERPRETATION:
Most of the respondents prefer online banking services. About 84% respondents support
online banking services and only 16% respondent support offline banking services.

56
 3. BANK OPERATED UNDER CORE BANKING FACILITY?

OPERATED UNDER CORE BANKING FACILITY

0%
10%

90%

YES NO CAN'T SAY

BANKING UNDER FREQUENCY PERCENTAGE COMULATIVE

CORE BANKING FREQUENCY
YES 45 90% 45

NO 0 0% 45

CAN’T SAY 5 10% 50

INTERPRETATION:

Among 100 respondents 90% say that their bank run under core banking system but only
5% have no clear concept about this and they choose ―CAN‘T SAY‖ option.

57
4. HOW FREQUENTLYDO YOU USE ONLINE BANKING FACILITIES?

ONLINE BANKING SERVICES

2% 0%

14% 20%

30%

34%

DAILY WEEKLY MONTHLY OCASSIONALLY YEARLY NEVER

ONLINE BANK FREQUENCY PERCENTAGE CUMULATIVE

SERVICES FREQUENCY
DAILY 10 20% 10

WEEKLY 17 34% 27

MONTHLY 15 30% 42

OCASSIONALLY 7 14% 49

YEARLY 1 2% 50

NEVER 0 0% 50

INTERPRETATION:
Most of the people do not need the services of banks regularly. They may transact with
banks on monthly basis, weekly or occasionally. This chart shows the habits of people in
case of use of online banking.

58
5. HOW MUCH DO YOU SPEND FOR A SINGLE ONLINE TRANSACTION?

SPEND ON SINGLE ONLINE TRANSACTION

16% 8%

20%
44%

12%

0-1000 1000-5000 5000-10000 10000-20000 ABOVE 20000

SINGLE ONLINE FREQUENCY PERCENTAGE CUMULATIVE

TRANSACTION FREQUENCY
0-1000 4 8% 4

1000-5000 22 44% 26

5000-10000 6 12% 32

10000-20000 10 20% 42

ABOVE 20000 8 16% 50

INTERPRETATION:
Most of the online banking users have a tendency to spend Rs.1000 or below this amount in
a single transaction.

59
6. WHY DO YOU AVAIL OF ONLINE BANKING?

AVAIL OF ONLINE BANKING

0% 0%

18% 12%

18%
18%

20%
14%

PRIVACY 24*7 CONVENIENCE

NOT TO MOVE ANYWHERE EASY TO USE SAVING TIMES & SPEED
HARD TO SAY OTHERS

AVAIL OF ONLINE FREQUENCY PERCENTAGE CUMULATIVE

BANKING FREQUENCY
PRIVACY 6 12% 6
24*7 10 20% 15
CONVENIENCE 9 18% 25
NOT TO MOVE 7 14% 32
ANYWHERE
EASY TO USE 9 18% 41
SAVING TIMES & 9 18% 50
SPEED
HARD TO SAY 0 0% 50
OTHERS 0 0% 50
INTERPRETATION:
Most of the respondents felt that the ―24*7 BUSINESS HOURS‖ provided by the internet
banking is the highest motivating factor for an individual to use internet banking and rest
prefer ―PRIVACY‖,‖CONVENIENCE‖, ―NOT TO MOVE‖ etc.

60
 7. RATE ONLINE BANKING SERVICES?

RATING OF ONLINE BANKING SERVICES

0%
4%
30%

66%

EXCELLENT GOOD AVERAGE POOR

RATE ONLINE FREQUENCY PERCENTAGE COMLATIVE

BANKING FREQUENCY
SERVICES
EXCELLENT 33 66% 33

GOOD 15 30% 48

AVERAGE 2 4% 50

POOR 0 0% 50

INTERPRETATION:
It is interesting to see that most of the respondents give ―EXCELLENT‖ rating to ATM
Banking, Balance Enquiry, Pay Fund Transfer, Online-Shopping and Online Recharge.

61
 8. DOES YOUR BANK EDUCATE YOU ABOUT THE ONLINE BANKING SERVICES?

BANK EDUCATE ABOUT ONLINE BANKING SERVICE

12%

14%

74%

YES NO CAN’T SAY

EDUCATE ABOUT ONLINE FREQUENCY PERCENTAGE CUMULATIVE

BANKING SERVICES FREQUENCY
YES 37 74% 37

NO 7 14% 44

CAN’T SAY 6 12% 50

INTERPRETATION:
Among 50 respondents 37 people said that their bank educated them about the several
online banking services and on the other hand 7 people said that their bank did not educate
them about their net banking services.

62
9. ARE YOU AWARE OF THE SECURITY THREATS AND FRAUDS IN ONLINE
BANKING AND FAMILIAR WTH THE METHODS OF SECURED ONLINE
TRANSACTIONS?

SECURITES AND THREATS IN ONLINE BANKING

2%

18%

80%

YES NO CAN'T SAY

SECURITIES & FREQUENCY PERCANTAGE COMULATIVE

THREATS IN ONLINE FREQUENCY
BANKING
YES 40 80% 40
NO 9 18% 49
CAN’T SAY 1 2% 50

INTERPRETATION:
It is good to see that most of the users have knowledge about frauds and security issues of net
banking but even with the increasingly knowledge of internet banking some respondents are
unaware the methods taken up by the bank to secure each and every transaction.

63
10. DOES YOUR BANK UPDATE ONLINE SERVICES REGULARLY?

UPGRADE ONLINE SERVICES REGULARLY

12%

20%

68%

YES NO CAN'T SAY

UPDATE ONLINE FREQUENCY PERCENTAGE CUMULATIVE

SERVICES FREQUENCY
REGULARLY

YES 34 68% 34

NO 10 20% 44

6 12% 50
CAN’T SAY

INTERPRETATION:
This is very interesting to see that most of the online banking users think that their banks
upgrade their services regularly. But some people did not think so and some few did not
come to a conclusion.

64
11. ARE YOU IN THE OPINION THAT YOU’RE BANK CHARGES
UNNECESSARY FOR ONLINE SERVICES?

UNNECESSARY CHARGES BY BANK

12%
38%

50%

YES NO CAN'T SAY

UNNECESSARY FREQUENCY PERCENTAGE CUMULATIVE

CHARGES BY BANK FREQUENCY
YES 19 38% 19

NO 25 50% 44

CAN'T SAY 6 12% 50

INTERPRETATION:

38% users think that their banks charge unnecessary for online services. While 50% people
Think that their banks don‘t do such and 12% people are unable to answer this question.

65
12. DO YOU THINK ONLINE BANKING IS BETTER SUBSTITUTE OF
TRADITIONAL BANKING SYSTEM?

ONLINE BANKING BETTER SUBSTITUTE?

12% 4%

84%

YES NO CAN'T SAY

ONLINE FREQUENCY PERCENTAGE CUMULATIVE

BANKING FREQUENCY
BETTER
SUBSTITUTE
YES 42 84% 42

NO 6 12% 48

CAN’T 2 4% 50
SAY

INTERPRETATION:
It was witnessed that most of the respondents preferred using Internet Banking over there
traditional banking system. Thus, Internet Banking has a bright future ahead.

66
13. WHICH FACTOR DO YOU THINK RESPONSIBLE FOR NON-
ACCESSBILITY OF ONLINE BANKING BY MAJORITY OF PEOPLE IN
YOURAREA?

FACTORS FOR NON-ACCESSEBILITY OF ONLINE BANKING

0%

32%
44%

0% 24%

0%
0%
LACK OF AWARENESS OF PEOPLE INADEQUATE ATM SERVICES RURAL AREA
LACK OF COMUTER FACILITY LESS INTERNET CONNECTION LACK KNOWLEDGE
OTHER

FACTORS FOR NON-

ACCESSEBILITY OF FREQUENCY PERCENTA CUMUL
ONLINE BANKING GE ATIVE
FREQUE
NCY
LACK OF 22 44% 22
AWARENESS
OF PEOPLE
INADEQUATE 0 0% 22
ATM
SERVICES
RURAL AREA 0 0% 22
LACK OF 12 24% 34
COMPUTER
FACILITY
LESS 0 0% 34
INTERNET
CONNECTION
LACK 16 32% 50
KNOWLEDGE
OTHER 0 0% 50

67
INTERPRETATION:
Among 50 respondents 22 choose ―LACK OF AWARNESS‖, 0 choose ―INADEQUATE
ATM SERVICE‖, 0 choose ―RURAL AREA‖, 12 choose ―LACK OF COMPUTER
FACILITY‖, 0 choose LESS INTERNET CONNECTION‖ and 16 choose ―LACK OF
KNOWLEDGE‖ option.

68
14. DO YOU THINK ONLINE BANKING IS BETTER SUBSTITUTE OF
TRADITIONALBANKING SYSTEM?

ONLINE SERVICE NEED TO BE MODIFIED

0% 0% 0% 0% 4%

14%
38%

44%

0%
0%
ATM SERVICES ACCOUNTS SERVICES FUND TRANSFER
BILL PAYMENT E-TAX PAYMENT E-DEPOSITE
MARKET INVESTMENT LOANS & CREDIT SERVICES INTERNET SECURITIES SERVICES
OTHERS

ONLINE
SERVICES NEED FREQUENCY PERCENTAGE CUMULATIVE
TO BE MODIFIED FREQUENCY
ATM 0 0% 0
SERVICES
ACCOUNT 0 0% 0
SERVICES
FUND 0 0% 0
TRANSFE
R
BILL 2 4% 2
PAYMENT
E-TAX 7 14% 9
PAYMENT
E- 22 44% 31
DEPOSITE
MARKET 0 0% 31
INVESTME
NT
LOANS & 0 0% 31
CREDIT
INTERNET 19 38% 50
SECURITY
SERVICES
OTHERS 0 0% 31

69
INTERPRETATION:

This chart shows that ―E-tax payment‖, ―E-deposit‖ and ―Internet security services‖ should
be modified in near future.

70
15. GIVE YOUR OVERALL RATING IN ONLINE BANKING SERVICES?

OVERALL RATINGS
0% 0%

8%
34%
24%

34%

EXCELLENT VERY GOOD GOOD AVERAGE POOR HARD TO SAY

OVERALL RATING FREQUE PERCENT CUMULAT

NCY AGE IVE
FREQUEN
CY
EXCELLENT 16 32% 17

VERYGOOD 17 34% 34

GOOD 12 24% 46
AVERAGE
4 8% 50

POOR
0 0% 50

HARD TO SAY 0 0% 50

INTERPRETATION:
The satisfaction level of people with the online banking services of their banks has a mixed
Review. This may due to multiple reasons. Moreover 34% people choose ―VERY GOOD
―option.

71
 CHAPTER-8
FINDINGS, RECOMMENDATIONS & CONCLUSIONS

8.1. THE MAJOR FINDINGS OF THE PRIMARY SURVEYARE:

 50 people respond to this study. But out of which 42 people claim that they
perform online banking service.
 34 respondents use internet more than three hours in week.
 Out of 50 people 28 are male and 22 are female. That‘s mean the male have more
knowledge about the transactions and having more knowledge about the services
provided by the banks. Only working ladies and school-college students having
knowledge about that service.
 Most of the respondents who lies under below 20-35 are using E-Banking services.
 Among 50 respondents‘ 38 people are either service holders or business men.
Because the services are more benefited towards this people.
 Most of the respondents are either H.S pass or Graduate.
 70% respondents who are using these facilities having income lie up to Rs.30000,
and the rest having income betweenRs.30000-50000.
 It is very interesting to see that 28 people have accounts in SBI, AXIS and ICICI
banks. But SBI BANK has more customers than others.
 Among 50 respondents 45 said that their banks run under CORE BANKING
SOLUSION and this is very good for Indian economy.
 24*7 BUSINESS HOURS is the main benefit which online banking users have
seen among other options.
 Most of the online banking users have a tendency to spend Rs.1000 or below this
amount in a single transaction.
 Users got excellent services from ATM BANKING, BALANCE ENQUARY,
BILLS PAYMENT, ONLINE SHOPPING and ONLINE RECHARGE etc. And
other services have not excellent performance like that.
 Among 50 respondents 37 people said that their bank educated them about the
several online banking services and on the other hand 7 people said that their bank
did not educate them about their net banking services. So it is very controversial
matter.
 Most of the users have no requirement for daily or monthly base transactions, they
prefer monthly base transactions.
 This study revealed that most of the user‘s claim that they aware of security threats
and they took recommend steps to secure the net banking.
 Maximum numbers of respondents claim that their banks do not charge extra charges
for net banking facilities.
 Out of 50 respondents 34 people told that they will continue online banking
activities in future.
 Most of the respondents claim that LACK OF AWARENESS, LESS COMPUTER
FACILITIES and LESS INTERNET CONNECTION are the main causes for non-
accessibility of online banking by majority of people in their area.
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  People also claim that ATM SERVICE, BILL PAYMENT SERVICE and
INTERNET SECURITY SERVICE should be modified in near future. Some people
also vote for CUSTOMER FEEDBACK service.

 Moreover 38 people are highly satisfied with this services and 12 people are satisfied
and remain are not properly satisfied.

8.2. CONCLUSION AND LIMITATION:

In a country like India, there is need for providing better and customized services to the
customers. Banks must be concerned about the attitudes of customers with regard to
acceptance of internet banking. The importance of security and privacy for acceptance of
internet banking has been noted in many earlier studies and it was found that people claim
that they have knowledge about security issues but they have no clear idea about all kind
frauds. The present study shows that customers are more reluctant to accept new
technologies or methods that might contain little risk. Hence, banks should design the
website to address security and trust issues.
The survey was conducted with 50 people of Noida and Greater Noida. So we can‘t say that
this is the real trends of net banking of whole the country.
People are not confident enough to whether to rely completely on online banking. There is
hesitancy in their minds with regards to preference. So they use both the online and offline
banking. At the time of survey when I give questionnaires to people, they very casually fill it
without think of the depth of the study. Another point is people are not disclosing their
personal data truly. Due to shortage of time data can‘t be collected form all types of people.
The study was conducted with the help of students, service holders and business men etc.
The study reveals that ATM BANKING, BILL PAYMENT, ONLINE SHOPPING and
ONLINE RECHARGE etc. are performed by so many respondents but it does not reflect that
NEFT, RTGS or DMAT services are not performed by the people.

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8.3. RECOMMENDATIONS:
We can see the time is changing and we are now accepting technology but there is still a
lot of perceptual blocking which hampers the growth its normal tendency of technology,
that why the growth of internet banking is very primitive in nature.
 Recommendations to banks:

 Banks should obey the RBI norms and provide facilities as per the norms. But this is not
completely followed by the banks. Some of our respondents complained that their bank do
not give feedback of online transaction in proper times. If customers do not get proper
feedback then their interest in online services will be reduced. So bank should take proper
steps to build their feedback services.
 Internet banking facilities must be made available in all banks as well as in all branches.
 There are some co-operative banks in this area and this type of banks still does not have
core-banking facilities. For this reason this type of bank loses their customers. So co-
operative banks should be covered under core-banking system.
 Link failure is a big problem especially in UCO bank and for this reason the important
business deals have been hampered. So banks should modify their software immediately.
 Now some banks install automated balance update machine to avoid customer harassment
but all banks should except this system very quickly.
 Banks should develop their services not only in town areas but also in village areas. Banks
should install more and more ATMs in both urban and rural areas.
 There is a another problem I faced at the time of conducting this survey that the
respondents complained that there are so many ATM machines in this locality but most of
the ATMs have normally no cash at all. So bank should extend this service with regular
cash filling.
 Fair dealing with the customers is more preferable. The stuff should be co- operative,
friendly and must be capable to understand the problems of the customers.
 Banks should give proper training to customers to use net banking.
 Banks should always update their security systems and create a trust in the mind of
customers towards security of their accounts.
 Banks should make their sites more users friendly. Customers should be motivated to use
internet banking facilities more.
 Banks are now using two factor authentications i.e. password and OTP but they should
improve that and using three factor authentication because hackers sometimes break the
two factor authentication system.


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8.4. Recommendations to users:

 Use anti-virus and maintain the integrity of your computer by scanning regularly for
computer viruses.
 If using the same computer or mobile for online banking, e-mail and web browsing,
always LOG OFF banking sessions before checking e-mail or web browsing. computer
viruses today are capable of installing themselves through e- mail links as well as web
sites where just passively moving your mouse over an image could be enough to install a
script that grabs your cached online banking credentials (user ID and password) and
allows a criminal to steal money from your account. Always keep your anti-virus software
up-to-date.
 Always use original operating system with original commercial anti-virus which could be
better than crack version or free sample.
 If you are using computer with multiple operating system (e.g., Ubuntu, Dos or Windows)
you must separately install anti-viruses for each O.S.
 Do not respond to e-mails requesting account information, account verification or banking
access credentials such as usernames, passwords, PIN codes and similar information.
 Do not use e-mail (or e-mail based fax systems like FAC sys) to send sensitive
information.
 Install a dedicated, actively managed network firewall to limit the potential for
unauthorized access to your network or computer. Consider installing a spyware detection
program.
 Clear the browser cache before starting an online banking session to eliminate copies of
web pages that have been stored on the hard disk.
 Verify the secure session (https or not https) in the browser.
 Avoid using automatic login features that save your personal details.
 Create a strong password but that will be easy to remember without writing it down
anywhere.
 Frequently change your password combination for better protection.
 Last but not the least, some of our respondents share that they received a phone call by
which a male or female gave a news that the respondents won lottery worth 25 lacks or a
big amount from either their mobile company or somewhere else. But the fact is this type
of caller want customer‘s bank details or ATM card details to send the huge money and
someone were trapped by it and told them their very confidential information and then
the scam happened when customers want to check the bank balance they see there is no
balance at all and this is very shocking news to them. So do not believe such phone call
or e-mail otherwise you will be cheated.

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 CHAPTER-9

BIBLIOGRAPHY
9.1 WEBSITES:
 www.google.com
 www.wikipedia.in
 www.slideshare.net
 www.scribed.in
 www.investopedia.com
 www.sbionline.com
 www.sbi.co.in
 www.linkedin.com
 www.rbi.org.in
 www.rbi.in

9.2. BOOKS:

 An Introduction to E-Commerce: - written by Ramit Kumar Roy &

Debasri Dey and published by the Elegant Publications.
 E-Commerce: - written by Prof. (Dr.) Dilip Kumar Chakraborty &
Prof. Debdulal Chatterjee and published by B.B. Kundu Grandsons.

 Introduction to Information Technology & its Business Application: - written by

A.K. Mukhopadhyay& A. Das and published by Kalimata Pustakalaya.

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E-banking is a new system in which new information technology integrates with common banking
services. Reducing operating costs and raising revenue are the main ways to improve e-banking services
(Sannes, 2001; Reibstein, 2002). The E-banking service is primarily customer service, so in banks, it
requires less resources and lower transaction costs and production (Southard and Siau, 2004; Witman and
Poust, 2008). Research on e-banking between 1999-2006 shows that the use of e-banking can improve
bank performance in terms of asset growth, lower operating costs and portfolio development (Dandapani
et al., 2008). Even in the 1990s, Sraeel (1996) emphasizes that creating a virtual banking will not only
create a new service delivery channel, but will also lead to value building for both banks and
customers (Hwang et al., 2007; Murphy, 2007). AmatoMcCoy (2005) further stated that customers will
be attracted to e-banking once advanced e-banking services such as e-transfer and e-bill options are
available. By interviewing banks on a small island and reviewing their e-banking websites from 2004 to
2006, Jenkins (2007) demonstrates that those banks used e-banking as a guarantee for their customers to
maintain a competitive level of service. In order to further improve the performance of e-banking
services, a few key skills are important: Planning for new IT infrastructure Improving transaction
security Providing additional value delivery Delivering diverse services Managing customer relationships
Maintaining and growing relationships with older and less experienced IT clients. (Wu et al., 2006).
Consumers today are very selective in their choice of banking services according to their needs and
preferences. In order to be competitive, banks need to develop customer satisfaction and enjoyment
services at the same time. Liao and Cheung (2002) show that the most important quality features that are

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considered useful for e-banking are expected to be accuracy, security, network speed, user interaction,
user engagement and simplicity. The standard of Electronic Service Quality is built on four dimensions:
efficiency, fulfillment, system availability and privacy (Parasuraman et al., 2005; Ibrahim et al., 2006).
Herington and Weaven (2007) show that online service quality does not directly affect customer
satisfaction, e-trust or the development of strong customer relationships, but rather e-loyalty
relationships. Their research also indirectly describes changes in households using online banking
services. For example, in 2003, 91% of US households had bank accounts and 93% of those using the
same electronic money transfer option in their account (Kolodinsky and Hogarth, 2004). However, Fest
(2007) states that only 40% of US households have used e-banking services, and more than 50% of
households have not been attracted to e- banking because those customers may have negative
information. in the use of the bank. self-help area (Swann, 2008). Succeeding in the e-banking industry
are those banks that are able to successfully increase their offerings while at the same time developing
security measures and making customers believe in them (Rombel, 2006). In addition, for all e-
banking clients, customer satisfaction is affected not only by the quality of banking service, but also by
their cultural characteristics (Levesque and McDougall, 1996). E-banking in developing countries is
growing rapidly over the past decade (Akinci et al., 2004). Their research shows that in terms of
consumer attitudes and acceptance of e-banking, there was a significant difference between the two
groups, e-banking and non-e-banking users, in terms of demographic profiles, thought structures and
preferences of service delivery channels. . For example, in China, there were only 6000 computers
connected to the Internet with 40,000 Internet users in 1995, but there were 10.2 million online
computers and 26.5 million internet users worldwide at the end of June 2001 (Zhao, 2002). Lu et al.
(2005) point out that one of the key responses of Chinese banks before joining the WTO was to improve
e-banking in a highly competitive environment, even under the current state of consumer debt crisis. In
another study, Laforet and Li (2005) examined the level of e-banking and m-banking in China by
investigating its market status, targeted customer identification, consumer and non-consumer
demographic characteristics, and compared their attitudes toward -e. - bank acquisition. They
concluded that there was a low awareness of these services in China, due to security concerns, perceived
risks, low computer skills and the Chinese culture of money laundering. The growth of Internet Banking
is due to its number of benefits for both

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remain one of the cheapest and most efficient delivery channels (see Pikkarainen et al, 2004). Other
reasons for the adoption of these services are related to competition as online banking strategy has become
an exciting way to keep existing customers and attract new customers (Robinson, 2000) and many
banking benefits, for example, more customizations, more effectively. low-cost marketing and
communication among others (Tuchila, 2000). The benefits for end users are many and include mainly the
convenience of the service (time- saving service and service accessible globally), low transaction costs and
general account monitoring among others (Pikkarainen et al, 2004). However, it should be noted that there
are still customers who are afraid to use the bank online, as they are concerned about the security features
of the system. Centeno (2004) states that speed, ease of access, 24/7 availability and pricing are factors that
encourage consumers to use internet banking. Durkin et al. (2008) notes that the simplicity of online
banking products facilitates online banking acceptance by consumers. Calisir and Gumussoy (2008)
compared consumer perception of online banking with other banking channels and reported that online
banking, ATMs and mobile banking are interchangeable. Maenpaa (2008) examines consumers'
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perceptions of online banking in Finland and their findings show that familiarity plays a measuring role in
perception. Guerrero et al. (2007) examines the use of online banking by Europeans and their results show
that ownership of various financial products and services, financial attitude and reliance on the Internet as a
banking channel influence consumer online banking. To confirm other papers, Sohail and Shanmugham
(2003) for online documentation access, e-banking awareness and resistance to change have been found to
have an impact on the online banking use of the Malaysian people. Another factor that promotes online
banking is customer support (Nilsson, 2007). The rapid growth of internet banking is especially evident in
developed countries such as the USA where the availability of computers and easy access to the internet
have made it easier for banks to use internet banking. The adoption of online banking services in
developing countries seems to be happening at a slower pace. In recent years, however, banks in
developing countries are increasingly offering online banking services despite their limitations. Polatoglu
and Ekin (2001) reported that, since 1997, several leading Turkish banks have successfully offered online
banking services. According to the Turkish Banking Association, 27 out of 47 banks in total, in other
words 58% of all banks in Turkey provided online banking services in 2006 (Banks Association of Turkey,
2006). Joseph and Stone (2003) investigated customer perceptions of the impact of technology on service
delivery in the banking sector. According to the findings of this study, high scores on the ability to deliver
a professional service appear to be associated with higher satisfaction with services that are considered the
most important to customers. Therefore, the availability of online banking services seems to be very
important for banks in customer satisfaction and retention. However, access to online banking services
itself is not enough to increase customer satisfaction. User friendliness of online banking services seems
to be a key factor for customers to use these services. In a similar study, Lang and Colgate (2003) found
that customers who did not have an IT gap, found it easier to use online banking services and therefore had
a higher level of satisfaction than those without IT skills. Research by Broderick and Vachirapornpuk
(2002) also shows that the level and nature of customer participation in the use of online banking services
has a significant impact on service quality perception. 1.4. DATHABASE ANDMETHODOLOGY • Data
Collection: Main Source: Research is based on both primary and secondary data. For the purpose of the
sample study the main data was collected from the people of UTTARPARA by telephone, social
networking and direct communication from them. Second Source: Secondary data is collected from
various articles and website resources such as www.wikipedia.com, www.google.co.inand and many
more. We used simple pictures, tables, and graphs to analyze and present data. Apart from this I also
followed my boss's instructions to complete the task. • Sample Method: Basic Data collected from a survey
containing a randomized QUESTION of a sample of 114 randomly selected people from UTTAR Pradesh
where some were college students, business people, resource owners, working women and

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of all banks in Turkey were offering internet banking services in 2006 (Banks ...

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