Management Thesis on
“Services provided by the bank through
E-BANKING IN INDIA”
By
Abhinav Tawani
1
SYNOPSIS
A Thesis 2
ON Services provided by the bank Services through
“
E-BANKING IN INDIA Submitted by ABHINAV A TAWANI Enroll. No. 08OSB201 OSB Aurangabad.
A report submitted in partial fulfillment of The requirements of THE MBA PROGRAM (The Class of 2010) OSB Campus
Introduction 3
”
E-banking:Internet banking (or E-banking) means any user with a personal computer computer and a browser can get connected to his bank -s website to perform any of the virtual banking functions. In internet banking system the bank has a centralized database that is web-enabled. All the services that the bank has permitted on the internet are displayed in menu. Any service can be selected and further interacti interaction on is dictated dictated by the nature of service. service. Once the branch offices of bank are interconnected through terrestrial or sate satell llit ite e link links, s, ther there e woul would d be no phys physic ical al iden identi tity ty for for any any branch. It would a borderless entity permitting anytime, anywhere and
anyhow
banking.
The delivery channels include direct dialup connections, privat private e networ networks ks,, publi public c networ networks ks,, etc. etc. with with the popul populari arity ty of computers, easy access to Internet and World Wide Web (WWW), Internet is increasingly used by banks as a channel for receiving instructions and delivering their products and services to their cust custom omer ers. s. This This form form of bank bankin ing g is gene genera rall lly y refe referr rred ed to as Internet Banking, although the range of products and services offered by different banks vary widely both in their content and sophistication.
Meaning of E-Banking E-bank is the electronic bank that provides the financial service for the individual client by means of Internet. 4
Need of study •
To know the customers perception toward the E-banking service.
•
I am interested in E-BANKING that I am taken this topic.
5
Benefits of study 1) Organizing Organizing Educational Educational Campaign Campaign To Create Goodwill Of Company.
2)
Services It Effectively valuable to Create Place in the Minds of Customer.
3)
Availability should be increased by using various services Strategy.
4)
Company should make service equal to or better than Competitive Brands By All Means.
6
Executive summary The project Report on:
Services provided by the bank through E-BANKING IN INDIA Project carried at: SBI, SBH, ICICI, ETC.
Project objectives: •
•
Find the customer satisfaction relating to E-banking service. To study the awareness of internet banking among the customers of ICICI and HDFC banks.
Research Methodology:
Primary Data: In this research with a sample size of nearly 20 customer’s data will be available in form of questionnaire collected in terms of different questions influencing the use of internet banking. 7
Internet banking is considered as dependent on awareness among customers which will be studied with help of different independent variable. Only the customers of HDFC & ICICI bank are taken as samples for study. Secondary data: Collection of information from different kind of books the data of the company what they maintained.
Conclusion The basic objective objective of my research was to analyze analyze the awareness awareness among customers for internet banking in INDIA. It gives direction to research tools, research types and techniques. Although the findings reveal that people know about the services but still many people are unaware and many of them are non – users so the bank bank shoul should d by promo promoti tion on try try to retai retain n the cust custom omers ers.. Bank Banks s should look forward to have some tie – ups with other financial institutions to increase the service base.
8
9
Interim Report
10
A Thesis ON “Services provided by the bank through
E-BANKING IN INDIA”
Submitted by ABHINAV A TAWANI Enroll. No. 08OSB201 OSB Aurangabad.
A report submitted in partial fulfillment of The requirements of THE MBA PROGRAM (The Class of 2010) 11
OSB Campus
Table Contents Chapter 1: Introduction…………………………………………………………16 Chapter 2: Observation of study……………………………… study………………………………………………..1 ………………..17 7 Chapter 3: Literature Review …………………………………… ………………………………………………….22 …………….22 Chapter 4: Objective of study……………………………… study………………………………………………… ………………….27 .27 Chapter 4.1: Limitation of study………………………………………………27 Chapter 5: Methodology………………………………………………………28 Chapter 5: Questionnaire…………………………………………………..….29 Chapter 6: Data analysis………………………………………………………32 Chapter 7: findings……………………………………………………………38 Chapter 8: Conclusions………………………………………………………39
12
Acknowledgement I would like to express my gratitude to all those who gave me the possibility to complete this project. I would like express my guide Mr. Mangesh Kela and I am also thankful to my faculty guide Mrs. J.R. Phansalkar to continuous guidance. In the end, I express our gratitude to my friend who inspired me in this work without their inspirations the work were almost impossible.
Signature Abhinav A Tawani 08OSB201
13
Declaration I am Abhinav A Tawani this project report is my original work and have not been submitted in any form as a part of any other project. Information derived from the published and unpublished work of other has been acknowledgement in the list references in given in the bibliography.
Abhinav A Tawani 08OSB201
14
CERTIFICATE This is to certify that the Management Thesis titled” Services provide by the banks through E-banking in INDIA”submitted By Abhinav A. Tawani Enroll No: 08OSB201 During semester 3rd of the MBA Program (The Class of 2010) embodies original work done by him / her.
Signature of the Faculty Supervisor ---------------------------Name (in Capitals)
… Mrs. J.R. Phansalkar
Designation Campus
… Faculty Guide ... OSB Aurangabad
15
Bibliography Book:•
E-banking in India
•
Banking service operation (ICFAI)
•
Indian Banking
•
Money & Banking
Links Visited www.goo www. google gle .co .com m www.icici.com www.hdfc.com
www.wikipedia.com
16
Chapter 1
Introduction E-banking:Internet banking (or E-banking) means any user with a personal computer computer and a browser can get connected to his bank -s website to perform any of the virtual banking functions. In internet banking system the bank has a centralized database that is web-enabled. All the services that the bank has permitted on the internet are displayed in menu. Any service can be selected and further interacti interaction on is dictated dictated by the nature of service. service. Once the branch offices of bank are interconnected through terrestrial or sate satell llit ite e link links, s, ther there e woul would d be no phys physic ical al iden identi tity ty for for any any branch. It would a borderless entity permitting anytime, anywhere and
anyhow
banking.
The delivery channels include direct dialup connections, privat private e networ networks ks,, publi public c networ networks ks,, etc. etc. with with the popul populari arity ty of computers, easy access to Internet and World Wide Web (WWW), Internet is increasingly used by banks as a channel for receiving instructions and delivering their products and services to their cust custom omer ers. s. This This form form of bank bankin ing g is gene genera rall lly y refe referr rred ed to as Internet Banking, although the range of products and services offered by different banks vary widely both in their content and sophistication.
17
Meaning of E-Banking E-bank is the electronic bank that provides the financial service for the individual client by means of Internet.
18
Chapter 2
Observation of study DEFINITION OF E-BANKING
For this booklet, e-banking is defined as the automated delivery of new and and tradi traditi tion onal al banki banking ng produc products ts and and servi service ces s direc directl tly y to cust custom omer ers s thro throug ugh h elec electr tron onic ic,, inter nterac acttive ive comm ommunic unicat atio ion n channels. E-banking includes the systems that enable financial inst instit itut utio ion n cust custom omer ers, s, indi indivi vidu dual als s or busi busine ness sses es,, to acce access ss account accounts, s, transac transactt business business,, or obtain obtain inform informatio ation n on financi financial al prod produc ucts ts and and serv servic ices es thro throug ugh h a publ public ic or priv privat ate e netw networ ork, k, including the Internet. Customers access e-banking services using an intelligent electronic device, such as a personal computer (PC), personal digital assistant assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone. While the risks and controls are similar for the various e-banking access channels, this booklet focu focus ses spec specif ific ical ally ly on Inte Intern rnet et-b -bas ased ed servi ervice ces s due due to the the Intern Internet et’s ’s widel widely y acces accessi sibl ble e publi public c networ network. k. Acco Accordi rdingl ngly, y, this this book bookle lett begi begins ns with with a disc discus ussi sion on of the the two two prim primar ary y type types s of Internet websites: informational and transactional.
E-BANKING SUPPORT SERVICES WEBLINKING A large number of financial institutions maintains sites on the World Wide Web. Some websites are strictly informational, while others also offer customers the ability to perform financial transactions, such as paying bills or transferring funds between accounts. WIRELESS E-BANKING Wireless banking is a delivery channel that can extend the reach 19
and enhance the convenience of Internet banking products and services. Wireless banking occurs when customers access a financial institution's network(s) using cellular phones, pagers, and personal digital assistants (or similar devices) through telecommunication companies’ wireless networks. Wireless banking services in the United States typically supplement a financial institution's e-banking products and services. Person-to-Person Payments Electronic person-to-person payments, also known as e-mail money, permit consumers to send “money” to any person or business with an e-mail address. Under this scenario, a consumer electronically instructs the person-to-person payment service to transfer funds to another individual. The payment service then sends an e-mail notifying the individual that the funds are available and informs him or her of the methods available to access the funds including requesting a check, transferring the funds to an account at an insured financial institution, or retransmitting the funds to someone else. Person-to-person payments are typically funded by credit card charges transfer from the consumer’s account at a financial institution. Since neither the payee nor the payer in the transaction has to have an account with the payment service, such services may be offered by an insured financial institution, but are frequently offered by other businesses as well. Banking Services through Internet: 1. The
Basic Level Service is the banks’ web sites which disseminate information on different products and services offered to customers and members of public in general. It may receive and reply to customer’s queries through e-mail; 2. In the next level are Simple Transactional Web sites which allows customers to submit their instructions, applications for 20
different services, queries in their account balances, etc. but do not permit any fund-based transactions on their accounts;
3. The third level of Internet banking service are offered by Fully Transactional Web sites which allow the customers to operate on their accounts for transfer of funds, payment of different bills, subscribing to other products of the bank and to transact purchase and sale of securities, etc. The above forms of Internet banking service the customer or by new banks, who deliver banking service primarily through Internet or other electronic delivery channels as the value added services. Some of these banks are known as ‘Virtual’ banks or ‘Internet only’ banks and may not have physical presence in a country despite offering different banking services. The Indian Scenario: Internet banking, both as a medium of delivery of banking services and as a strategic tool for business development.
•
• At present, the total internet users in the country are estimated at 9 lakh. However, this is expected to grow exponentially to 90 lakh by 2003. Only about 1 percent of Internet users did banking online in 1998. This is increased to 16.7 percent in March 2000. - (India Research, May 29, 2000, Kotak Securities) • Cost of banking service through the Internet from a fraction of costs through conventional methods. Rough estimates assume teller cost at Re.1 per transaction, ATM transaction cost at 45 paise, phone banking at 35 paise, debit cards at 20 21
paise and Internet banking at 10 paise per transaction.
Plastic Cards as Media for Payment: -
There are four types of plastic cards being used as media for making payments. These are: 1. Credit Card 2. Debit Card 3. Smart Card 4. ATM Card 1. Credit Cards: The credit card enables the cardholders to: Purchase any item like clothes, jewellery, railway/air tickets, etc. Pay bills for dining in a restaurant or boarding and lodging in hotel Avail of any service like car rental, etc. 2. Debit Cards: A debit card is issued on payment of a specified amount by the issuing company like a telephone company to a customer on cash payment or on debiting his account by a bank. Thus it is like an electronic purse, which can be read and debited by the required amount. It may be noted that while through a credit card, the customer first makes a purchase or avails service and pays later on, but for 22
getting the debit card, a customer has to first pay the due amount and then make a purchase or avail the service. For this reason, debit card are not as popular as credit cards.
3. Smart Cards: Smart Cards have a built-in microcomputer chip, which can be used for storing and processing information. For example, a person can have a smart card from a bank with the specified amount stored electronically on it. As he goes on making transactions with the help of the card, the balance keeps on reducing electronically. When the specified amount is utilized by the customer, he can approach the bank to get his card validated for a further specified amount. Such cards are used for paying small amounts like telephone calls, petrol bills, etc.
4. ATM Cards: The card contains a PIN (Personal Identification Number) which is selected by the customer or conveyed to the customer and enables him to withdraw cash up to the transaction limit for the day. He can also deposit cash or cheque.
23
Chapter 3
Literature Review A new review by Tower group of 10 top US e- banking web sites evaluate evaluated d several several aspects aspects of core online online banking banking compone components nts.. Group found that there is difference in terms of actual func functi tion onal alit ity y and and usab usabil ilit ity. y. Amon Among g diff differ eren entt bank banks s and and thei theirr services. The UK's first home online banking services were set up by the Nott Nottin ingh gham am Buil Buildi ding ng Soci Societ ety y (NBS (NBS)) in 1983 1983 ("Hi ("Hist stor ory y of the the Nottingham". Retrieved on 2007-12-14.). The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tan data Td1400) connected to the tele teleph phon one e syst system em and and tele televi visi sion on set. set. The The syst system em (kno (known wn as 'Home link') allowed on-line viewing of statements, bank transfers and and bill bill paym paymen ents ts.. In orde orderr to make make bank bank tran transf sfer ers s and and bill bill payme payments nts,, a writte written n inst instruc ructi tion on givi giving ng detai details ls of the intend intended ed recipient had to be sent to the NBS who set the details up on the Home link system. An American study conducted last year by Booz-Allen projects that by the year 2000, 16 million US households will be using Inte Intern rnet et bank bankin ing. g. Whil While e thes these e numb number ers s do not not appe appear ar to be significant as compared to the total population, each Internet user is proje project cted ed to be 50-2 50-250 50% % more more profi profita table ble than than the the avera average ge banking customer. It is expected that these Internet customers 24
will be some of the banking system's most profitable customers representing close to 30% of all retail banking profits. The study projects that by 1999, 1,500 banks will have Internet Web sites and and at leas leastt 500 500 of thes these e bank banks s wil will be offe offeri ring ng full full-f -fle ledg dged ed Internet banking services. In 2001 Micro banker send detailed questionnaire to the leading vendors vendors of internet internet banking banking software2 software27 7 compani companies es respond responded ed with information on thirty programs the aggregate outcome of the outc outcom ome e was was that that almo almost st all all the the comp compan anie ies s have have deve develo lope ped d functions for internet banking and have inbuilt feature to aid with one to one marketing on the web.
ICICI Bank ICICI Bank Online Banking Services provide the largest private bank in India right here at your desktops. Banking becomes a pleasure as the transactions and services become instant with ICICI Bank online Internet banking. The services provided are totally secure and unique. These cover online account transactions and operations, credit card and account applications and payments, share trading and investments through mutual funds, bill payments, statement generation and a virtual demo of each service. See in brief in final report.
Role of customer when using e-banking •
You can access ICICIBank.com only by using your User ID and Password. During the first login attempt, it is mandatory to change both passwords - login and transaction – which would have been mailed to you by the bank. 25
•
If you forget your password, you will have written to us using the "Email "Email Us" Us " option. The Bank will then issue a new password and send it to your mailing address as per our records. Kindly check with your branch that this address is updated...
•
Make sure no one can see the account login name or password you are entering when you log on to ICICIBank.com.
•
Logout of ICICIBank.com before moving on to other Websites.
•
Before leaving the PC please "close" the browser.
•
Do not write your ICICIBank.com login name or password anywhere.
•
Do not leave your login name and password such that someone sitting at your computer could see them.
•
Never reveal your ICICIBank.com login name and password to anyone (no representative of ICICI Bank will ever ask you for your ICICIBank.com password).
•
Notify ICICI Bank immediately if you notice any unusual account activity.
•
Keep all documents that include your account information in a secure location.
•
When you login you can view the date and time of your last log in.
26
Features offered by ICICI bank for internet banking •
•
Balance enquiry and statement Transfer fund online
•
Card to card fund transfer
•
Use debit card online
•
Prepaid mobile recharge
•
Subscribe for mobile banking
•
Link bank account to ATM
•
Lock / activate debit cards /ATM
•
Request a cheque book
•
Stop payment
HDFC Net Banking is HDFC Bank's Internet Banking service. Providing up-to-th up-to-the-se e-secon cond d account account inform informati ation, on, Net Bankin Banking g lets you mana manage ge your your acc account ount from from the comfo omfort rt of your your mouse ouse anytime, anywhere. Features offered by HDFC bank for internet banking •
•
View account balances and statements Transfer funds between accounts
•
Request stop payments
•
Pay bills
•
Create fixed deposit online 27
•
Order cheque books
USE OF E-BANKING IN INDIA FEOM LAST FEW YEARS Yea r Incr.
2002 9
2003 12
2004 15
2005 20
%
28
2006 25
2007 32
2008 40
2009 50
Finding In 2002-2009 the user of the E-banking E -banking is increase in more in every year.
Chapter 4
Objective of study •
•
Find the customer satisfaction relating to E-banking service. To study the awareness of internet banking among the customers of ICICI and HDFC banks. 29
Chapter 4.1
Limitation of Study •
Banks are not giving me all information about E-banking services.
•
They do not permit to meet any of the employees in their bank.
Chapter 5 30
Data collection Primary Data: In this research with a sample size of nearly 20 customer’s data will be available in form of questionnaire collected in terms of different questions influencing the use of internet banking. Internet banking is considered as dependent on awareness among customers which will be studied with help of different independent variable. Only the customers of HDFC & ICICI bank are taken as samples for study. Secondary data: Collection of information from different kind of books the data of the company what they maintained.
Methodology Once the findings are finalized by a research, suggestions should be made for the betterment of enterprise. The data collected from questionnaire will be tabulated and analyzed so that The result can be presented as simple as possible. There are a number of ways like o
Pie-chart
o
Graphs
Questionnaire:31
1. Name Name of the custo customer mer::-
2.
Do you like E-banking a . Y es b. No
3. Tick which bank you preferred… a. Icici b. Sbi c. Sbh d. Axis e. Unio Union n ban bank k f. Hdfc g. UTI UTI Bank Bank Ltd h. Bank of Punja Punjab b Ltd Ltd
4. Why Why this this bank bank a.
Service is good 32
b. They provide provide secu security rity c.
5.
Cheaper service fees.
Which type of service mostly you use? a.
Balance and transaction history search
b. Transfe Transferr fund fund online online c. Card to card card fund fund trans transfer fer d. Open Open FD e. Lock / activate activate debit debit cards cards /ATM /ATM f. Requ Reques estt a che chequ que e book book g. Stop Stop pay payme ment nt h.
Railway pass / ticket
i. Shopping j. j. Sha Share paym paymen entt 6. Service Services s of the the bank are…. are…. a. poo r b. good c. Very Very good good
7.
Are you satisfied with the using of E-banking? a . Y es 33
b. No
34
Final Report
35
Chapter 6
Data analysis 1) Users Users of E-banki E-banking ng
Yes
65%
No
35%
2) No. of user user of the banks banks Icici
20%
Sbi
30%
Sbh
20% 36
3)
Axis
10%
Union
8%
Hdfc
12%
PREFERENCE FOR ONLINE BILL PAYMENT SERVICES
Yes
60%
No
40%
37
4)
PREFERENCE FOR ONLINE SHOPPING
Yes
70%
No
30%
38
5)
PREFERENCE FOR ONLINE FUND TRANSFAR `
Yes
35%
No
65%
39
6) SATISFI SATISFIED ED CUSTOM CUSTOMERS ERS
Yes
65%
No
35%
40
7) PERFERRED PERFERRED MODE OF PAYMENT PAYMENT (TO BANK) BANK)
CHEQUE
50
CASH
25
E-BANKING
25
8) SPEND PER BILL BILL FOR ON LINE BILL BILL PAYMENT PAYMENT 41
ABOVE Rs.10
21
BETWEEN RS.5-10
11
BELOW RS.5
32
NOTHING
36
42
Chapter 7
Findings 1. In the users ratio ratio of interne internett banking banking 65% of custom customers ers are using this service. 2. More bank anks are conne onnec cting to the the any software ware co. to runnin running g the E-bank E-bankin ing g serv servic ice. e. In these these servi services ces the Sbi Sbi banks is top in service of E-banking. 3. The
services that are mostly used by maximum customers
are transactions, online trading, bill payment, shopping etc. 4. The mode mode of the cash cash deposi depositt in bank bank is for for use use to onlin online e truncation cash, cheque & e-banking. 5.
Different banks different charge for online service.
Suggestions 1. T To o
preven preventt onli online ne banki banking ng from from remai remainin ning g cust custom omers ers to
prompt this service through advertising co. 2. After repairing repairing this basic basic deficiency, deficiency, banks must must ensure that there services is competitive. 3.
Banks is not take more charge from there customers.
43
Chapter 8
Conclusion The basic objective of my research was to analyze the awareness among customers for internet bank bankin ing g in INDI INDIA. A. It giv gives dir directi ection on to resea search tools, research types and techniques. Although the findings
reveal
that
people
know
about
the
serv servic ices es but but stil stilll many any peop people le are are unaw unawar are e and and many of them are non – users so the bank should by promotion try to retain the customers. Banks should look forward to have some tie – ups with other financial institutions to increase the service base.
44
