Project Report

On

E-banking
Bachelor of management studies
Semester V
(2016-2017)
Submitted by
Deion D Furtado
09
MODEL COLLEGE OF COMMERCE
Rajbhar nagar, chinchpada road, katemanvali P.O.,
Kalyan (east)

E-banking
Bachelor of management studies
Semester V
Submitted
In partial fulfillment of the requirements
For the award of degree of
Bachelor of Management Studies
By
Deion D Furtado
09
MODEL COLLEGE OF COMMERCE
Rajbhar nagar, chinchpada road, katemanvali P.O.,
kalyan (east)

Declaration

I, Deion D Furtado the student of T.Y.BMS semester V (2016-2017) hereby declare that I
have completed the project on Role of financial institutions in entrepreneurships.
The information submitted is true and original to the best of my knowledge

____________________
Deion D Furtado
09
MODEL COLLEGE OF COMMERCE
Rajbhar nagar, chinchpada road, Katemanvali P.O., kalyan (east)

Acknowledgement
To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.
I would like to acknowledge the following as being idealistic channels and fresh dimensions in
the dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.
I would like to thank my Principal, Brahmaulefor providing the necessary facilities required for
completion of this project.
I take this opportunity to thank our coordinator Asha Jainfor her moral support and guidance.
I would also like to express my sincere gratitude towards my project guide Asha Jain whose
guidance and care made the project successful.
I would like to thank my college library, for having provided various reference books and
magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped me in the
completion of the project especially my parents and peers who supported me throughout my
project.

INDEX
SR. no
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Particulars
Introduction
Objective of study
Limitations of study
Observation of study
Research methodology
Significance of study
Scope of study
Data collection
Literature review
Data analysis & interpretation
Questionnaire
Conclusion
Recommendation
Bibliography

Page no.

Introduction
E-banking:Internet banking (or E-banking) means any user with a personal 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 interaction is dictated by the nature of service. Once the branch offices of

bank are interconnected through terrestrial or satellite links, there would be no physical identity
for any branch. It would a borderless entity permitting anytime, anywhere and anyhow banking.
The delivery channels include direct dialup connections, private networks, public
networks, etc. with the popularity 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 customers. This form of banking is generally
referred to as Internet Banking, although the range of products and services offered by different
banks vary widely both in 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.

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.

Limitation of Study

Problems of security:
and privacy aspects are major issue incase of E-Banking transaction.
Various sites are not properly locked at to ensu re weather customer s
money is safe in cyber world or not.

High cost:
The infrastructural cost of providing E-Banking facility is very high.
The banks not only have to automate front-end services but also back office
services, which involve high cost.
Lack of aw areness:
Another great hindrance is lack of awareness
because effective and wide media efforts in publishing Internet banking need to
be emphasized.
Lack of computerization:
Lack of computerization and low density of telephone lines is also a bottleneck
for online banking. In India, out of 65000 bank branches, only 5000 branches
are computerized.
Wrong assumption by people:
Many people are away from net
banking on the assumption that it is more expensive than the traditional method
of dealing with bank transactions.
They still prefer going to bank to perform transactions.

Observation of study
DEFINITION OF E-BANKING

For this booklet, e-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive communication
channels. E-banking includes the systems that enable financial institution customers, individuals
or businesses, to access accounts, transact business, or obtain information on financial products
and services through a public or private network, including the Internet. Customers access e-

banking services using an intelligent electronic device, such as a personal computer (PC),
personal digital 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 focuses specifically on Internet-based services due to the Internets widely accessible
public network. Accordingly, this booklet begins with a discussion of the two primary types 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 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 consumers 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 customers queries through e-mail;

2. In the next level are Simple Transactional Web sites which allows customers to submit
their instructions, applications for 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 paise and Internet banking at 10
paise per transaction.

VARIOUS FORMS OF E-BANKING:

INTERNET BANKING:
Internet Banking helps you manage many banking transactions online via your PC.
AUTOMATED TELLER MACHINES (ATM):
An automated teller machine or automatic teller machine (ATM) is an electronic computerized
telecommunications device that allows a financial institution's customers to directly use a secure
method of communication to access their bank accounts, order or make cash withdrawals (or
cash advances using a credit card) and check their account balances without the need for a
human bank teller.
TELE BANKING:
By dialing the given Telebanking number through a landline or a mobile from anywhere, the
customer can access his account and by following the user-friendly menu, entire banking can be
done through Interactive Voice Response (IVR) system.
SMART CARD:
A smart card usually contains an embedded 8-bit microprocessor (a kind of computer chip). The
microprocessor is under a contact pad on one side of the card. Think of the microprocessor as
replacing the usual magnetic stripe present on a credit card or debit card.
The microprocessor on the smart card is there for security. The host computer and card reader
actually "talk" to the microprocessor. The microprocessor enforces access to the data on the card.
The chips in these cards are capable of many kinds of transactions.
DEBIT CARD:
Debit cards are also known as check cards. Debit cards look like credit cards or ATM (automated
teller machine) cards, but operate like cash or a personal check. Debit cards are different from

credit cards. While a credit card is a way to "pay later," a debit card is a way to "pay now." When
you use a debit card, your money is quickly deducted from your checking or savings account.
E-CHEQUE:
An e-Cheque is the electronic version or representation of paper cheque.
OTHER FORMS OF ELECTRONIC BANKING
Direct Deposit
Electronic Bill Payment
Electronic Check Conversion
Cash Value Stored, Etc

Advantages of Internet Banking

Internet Banking has several advantages over traditional one which makes operating an account
simple and convenient. It allows you to conduct various transactions using the bank's website and
offers several advantages. Some of the advantages of internet banking are:

Online account is simple to open and easy to operate.

It is quite convenient as you can easily pay your bills, can transfer funds between accounts,
etc. Now you do not have to stand in a queue to pay off your bills; also you do not have to keep
receipts of all the bills as you can now easily view your transactions.

It is available all the time, i.e. 24x7. You can perform your tasks from anywhere and at any
time; even in night when the bank is closed or on holidays. The only thing you need to have is
an active internet connection.

It is fast and efficient. Funds get transferred from one account to the other very fast. You can
also manage several accounts easily through internet banking.

Through Internet banking, you can keep an eye on your transactions and account balance all
the time. This facility also keeps your account safe. This means that by the ease of monitoring
your account at anytime, you can get to know about any fraudulent activity or threat to your
account before it can pose your account to severe damage.

It also acts as a great medium for the banks to endorse their products and services. The
services include loans, investment options, and many others.

Disadvantages of Internet Banking

Though there are many advantages of internet banking, but nothing comes without disadvantages
and everything has its pros and cons; same is with internet banking. It also has some disadvantages
which must be taken care of. The disadvantages of online banking include the following:

Understanding the usage of internet banking might be difficult for a beginner at the first go.
Though there are some sites which offer a demo on how to access online accounts, but not all
banks offer this facility. So, a person who is new, might face some difficulty.

You cannot have access to online banking if you dont have an internet connection; thus
without the availability of internet access, it may not be useful.

Security of transactions is a big issue. Your account information might get hacked by
unauthorized people over the internet.

Password security is a must. After receiving your password, do change it and memorize it
otherwise your account may be misused by someone who gets to know your password
inadvertently.

You cannot use it, in case, the banks server is down.

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 banks server is down.

Internet Banking has definitely made the life easy for users by providing online access to various
banking services.

Research Methodology

Research Methodology is a way systematically to solve the research

problem. It may be understood as a science of studying how research is done
scientifically. It is necessary for the researcher to know not only the methods or
techniques b A also the methodology.

Research design:

Research design is the plan, structure, and strategy of investigation

conceived so as to obtained answers to research questions. Research design is
purely a framework or a plan for study that guides in the collection of data.
Descriptive research design is adopted for analyzing the data.

Research Method:

The research design is a Descriptive Research. Descriptive statistics was

tabular, graphical & numerical summaries of data. Its main purpose is to
facilitate the presentation and INFERENCE of data. Descriptive Research design
involves description of the variables making up the demographic and
geographic profile of the sample

Source of data:

Primary Data:
Primary data has collected directly from customers through structured

questionnaires (Individual sample units)

Secondary Data:

Secondary data has collected from the various magazines, journals,

website of various banks and various websites.

Sampling Method:

The population includes male and female customers residing in the area
with the criteria: Customers with Various bank accounts.
Definition: Convenience.

In convenience sampling, a sample is obtained by selecting

convenient population elements from the population.

Sample Size:

Our Sample size was 150, who fulfill the basis criteria- Customers with
Various banks.

Sampling unit:

A sample unit is a single individual, who is having a bank accounts.

Data collection method:

Self-administered Personal survey method was used to collect the

necessary data. For this purpose appropriate questionnaires were
designed.

Data collection instrument:

Appropriately designed questionnaire to facilitate self-administered

surveys with simple standard questions were used to collect data.

Structure of Questionnaire:

The questions formulated were structured and non-disguised. The

questions were asked in order to get all the necessary information and to see
that the respondents could answer them with case. This pattern adopted
facilitated in analyzing the data.

Types of questions asked:

1. Multiple choice questions

Many choices of responses are given and the respondent chooses one
response. The advantage of this type is easy tabulation and quick response by
the respondent.

2. Dichotomous questions

This type of questions is of 'Yes' or 'No' format. There are only two
choices of answers and the respondent has to choose either 'Yes' or 'No'.

3. Open questions

These are also known as 'free-answer' type questions.

Significance of the Study

With the rapid development of Information Technology (IT) banks are beginning to rely
heavily on conducting banking transactions electronically.
The study would enable the banks executives and indeed the policy makers of the banks
and financial institutions to be aware of electronics banking as a product of electronic
commerce with a view to making strategic decisions. The research is equally significant
because it would provide answer to factors militating against the implementation of
electronic banking in First Bank of Nigeria plc.

It is the researchers intention that when this work is completely carried out, it will
contribute immensely to the existing literature on the general application of e-banking
services in modern day business. It will also contribute to efficient and effective performance
of the staff that comes closer to the use of electronic banking services. This will eventually
widen the horizon of business executive and employee in the application of electronic
banking services in such vital accounting systems, investment appraisal and a host of others.
Furthermore, the problems associated with the manual process like delay, inaccuracy,
inefficiency which is the bottleneck, the impact of e-banking will show how it has completely
phased it.

Scope of the Study

In pursuance of the objective of the study; attention shall be focused on electronic banking
among other banking services or electronic commerce implementation.
In order to conduct an empirical investigation into the adoption electronic banking in
Nigeria and will also examine the nature of e-banking operations of first bank of Nigeria plc.
This work, for want of time could not cover all the banks in Nigeria that have e-banking
services. The work is therefore limited to First Bank of Nigeria plc, Makurdi branch only. These
limitations in one way or the other might have affected the fullest realization of this research.

The limitation are lack of adequate and up-to date data necessary for successful completion of t
his work. It is a laid down fact that the Information and Communication Technology (ICT)
World is an ever dynamic world. It takes an appreciable account of money and time to get these
developments to this part of the world. For this reason, the researcher then decided to conduct the
study within the technological framework available in Nigeria and at first bank to be precise.
Another problem that has affected the full realization of this study is time constraint. This
work is to be concluded within a short period of time and this restriction in time employed made
it impossible for the researcher to exhaust all areas affected.

Data collection
Primary Data:
In this research with a sample size of nearly 20 customers 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.

Literature Review
A new review by Tower group of 10 top US e- banking web sites evaluated several aspects of
core online banking components. Group found that there is difference in terms of actual
functionality and usability. Among different banks and their services.

The UK's first home online banking services were set up by the Nottingham Building Society
(NBS) in 1983 ("History of 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 telephone system and television set. The system (known as 'Home
link') 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.

Data analysis
1) Users of E-banking

Yes
No

65%
35%

Chart Title

80
60
40
20
0
YES

NO

2) No. of user of the banks

ICICI
SBI
SBH
AXIS
UNION
HDFC

20%
30%
20%
10%
8%
12%

30
25
20
15
10
5
0
Icici

Sbi

Sbh

Axis

Union

3) PREFERENCE FOR ONLINE BILL PAYMENT SERVICES

Yes
No

60%
40%

Hdfc

Chart Title

NO; 40%
YES; 60%

4) PREFERENCE FOR ONLINE SHOPPING

Yes
No

70%
30%

Chart Title
80
70
60
50
40
30

YES; 70

20

NO; 30

10
0
YES

NO

5) PREFERENCE FOR ONLINE FUND TRANSFAR `

Yes
No

35%
65%

Chart Title

80
60
40
20
0
YES

6) SATISFIED CUSTOMERS

NO

Yes
No

65%
35%

Chart Title

NO; 35%

YES; 65%

7) PERFERRED MODE OF PAYMENT (TO BANK)

CHEQUE
CASH
E-BANKING

50
25
25

60
50
40
30

INDIA

50

20
10

25

25

E-BANKING

CASH

0
CHEQUE

8) SPEND PER BILL FOR ON LINE BILL PAYMENT

ABOVE Rs.10
BETWEEN RS.5-10
BELOW RS.5
NOTHING

21
11
32
36

Chart Title
40
35
30
IN INDIA

25
20
15
10
5
0
ABOVE 10Rs

BET. Rs 5 OT10

BELOW 5Rs

NOTHING

INTERPRETATION
1. In the users ratio of internet banking 65% of customers are using this service.
2. More banks are connecting to the any software co. to running the E-banking service. In
these services the 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 of the cash deposit in bank is for use to online truncation cash, cheque & ebanking.
Different banks different charge for online service.
Questionnaire:1. Name of the customer:2. Do you like E-banking
a. Yes
b. No
3. Tick which bank you preferred
a. ICICI
b. SBI
c. SBH
d. Axis
e. Union bank
f. HDFC
g. UTI Bank Ltd
h. Bank of Punjab Ltd
4. Why this bank

a. Service is good
b. They provide security
c. Cheaper service fees.

5. Which type of service mostly you use?

a.

Balance and transaction history search

b. Transfer fund online

c. Card to card fund transfer
d. Open FD
e. Lock / activate debit cards /ATM
f. Request a cheque book
g. Stop payment
h. Railway pass / ticket
i. Shopping
j. Share payment
6. Services of the bank are.
a. poor
b. good

c. Very good
7. Are you satisfied with the using of E-banking?
a. Yes
b. No

Conclusion
The basic objective of my research was to analyze the 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 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.

RECOMMENDATION

1. To prevent online banking from remaining customers to prompt this service through
advertising co.
2. After repairing this basic deficiency, banks must ensure that there services is competitive.
Banks is not take more charge from there customers.

Bibliography
Book:

E-banking in India

Banking service operation (ICFAI)

Indian Banking
Money & Banking

Links Visited
www.google.com
www.icici.com
www.hdfc.com
www.wikipedia.com