Project Report

(Submitted for the Degree of B.Com. Honours in Accounting &Finance under

the University of Calcutta)
CHECKED
Internal..
External..

TITTLE OF THE PROJECT

A study on Online Banking in India

FEBRUARY-2016

SUBMITTED BY SUPERVISED BY
KOUSHIK HALDER DR. PARTHA SARTHI CHATTERJEE
REGISTRATION NO-621-1121-0340-13 ASST. PROFESSOR IN COMMERCE
ROLL NO-1621-61-0017 RAJA PEARY MOHAN
RAJA PEARY MOHAN COLLEGE COLLEGE
 ANNEXURE-1

Supervisors Certificate

This is to certify that Koushik Halder a student of B.com

(Honours) in accounting & Finance of Raja Peary Mohan college
under the University of Calcutta has worked under my supervision
and guidance for his project work and prepared a project Report
with the tittle Online Banking of India.
The project Report, Which he is submitting, in his genuine and
original work to the Best of my knowledge.

Place: Uttarpara. Signature:

Date: Name: Partha Sarthi Chatterjee
Designation: Asst. Professor of commerce
Name of College: Raja Peary Mohan College

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 ANNEXURE-2

I hereby declared that the project work which

the title of Online Banking of India submitted by me for the partial
fulfilment of the degree of B.Com (Honours) in Accounting and Finance
under the University of Calcutta is my own original work and has not been
submitted earlier to any other university for the fulfilment of the requirement
for any other degree.

I do hereby also declare that no

chapter of this manuscripts 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.

Place: Uttarpara Signature:

Date: Name: Koushik Halder
Address: 64/155 D.J Road.
Bhadrakali, Hooghly, 712232
Registration no: 621-1121-0340-13
Roll No: 1621-61-0017

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 ANNEXURE-3

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. PARTHA SARTHI CHATTERJEE,

Faculty of RAJA PEARY MOHAN COLLEGE, UTTARPARA for his
continuous and deliberate discussion on the topic and indeterminable burden taken
by him 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 sentence is
an exact representation of the information obtained and the analysis thereof. I hope
that I have manifested my sincere attempts to represent all the information and other
things to the best of my ability.

KOUSHIK HALDER
R.P.M.C (2015-2016)
ROLL NO: - 1621-61-0017
REGISTRATION NO: -621-1121-0340-13

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 INDEX
SERIAL NO CONTENTS PAGE NO.
Chapter-1 Introduction 1-3
1.1. Background 1
1.2. History 1
1.3. Objective of the study 2
1.4. Review of literature 2
1.5. Database & methodology 2-3
1.6. Limitation of study 3
1.7. Chapter planning 3
Chapter-2 Online banking-an overview 4-10
2.1. Definition 4
2.2. How online banking evolved into mainstream financial tool 4-6
2.3. Features of online banking 6-7
2.4. Advantages of online banking 8-9
2.5. Disadvantages of online banking 9-10
Chapter-3 Different types of online banking 11-28
3.1. Core banking solution 11-14
3.2. ATM banking 14-15
3.3. Digital wallet 15-17
3.4. Digital cash 18
3.5. kiosk banking 19
3.6. NEFT 19-20
3.7. RTGS 20-21
3.8. IMPS 21-22
3.9. Mobile banking 23
3.10. Smart card 24
3.11. Green channel counter 24
3.12. E-ticketing 25
3.13. Demat service 26
3.14. E-tax 27
3.15. Online demand draft 27-28
3.16. Other services 28
Chapter-4 Security issues of net banking 29-36
4.1. Introduction 29
 4.2. Types of frauds 29-33
4.3. Steps to secure online banking 33-35
4.4. Ten steps to minimize security issues 35-36
Chapter-5 Online banking in India-guidelines by RBI 37-39
5.1. Guidelines to RRBs 37-38
5.2. Authentication practices to internet banking 38-39
Chapter-6 Online banking scenario with Indian economy 40-42
6.1. Online banking scenario 40-42
6.2. Initiative taken by the government of India 42
Chapter-7 A case study of online banking 43-64
7.1. Data analysis and interpretation 43-64
Chapter-8 Findings, Conclusion and Recommendation 65-68
8.1. Findings 65-66
8.2. Conclusions 66
8.3. Recommendation 66-68
Chapter-9 Bibliography 69
9.1. Websites 69
9.2. Books 69
Appendix Questionnaire 70-71
 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
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, totalling 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.

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1.3. OBJECTIVES OF THE STUDY

The main objectives of the study are_

To understand the genesis and concept of Online-Banking.

To analyse the importance, functions, advantages and limitations of Online-Banking.
To explain the different form of Online-Banking and to analyse 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 analyse the trend of Online-Banking with the help of primary data.
To analyse 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 on
customer satisfaction by analysing the problems faced by the customers.

1.4. REVIEW OF LITERATURE

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.

1.4. DATABASE AND METHODOLOGY

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.in and so many
others. We have used simple pictures, tables, & graphs to analysis & present the
data. Apart from this I also followed my supervisors instructions to finish the
project.

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 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 UTTARPARA in which some are college students, business
persons, service holders, working women and some people who belong to 20-60 age
group. 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 THE STUDY

The major limitations of the study are:

A small sample size of 114 respondents are 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 UTTARPARA.
This study is based on the prevailing respondents satisfaction. But their satisfaction may
change according to time, fashion, need etc.

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 & Recommendations
References
Bibliography.

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 CHAPTER-2
ONLINE BANKING- AN OVERVIEW

2.1. DEFINITION
Online banking is an electronic payment system that enables customers of a financial
institution to conduct financial 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.

2.1. HOW ONLINE BANKING EVOLVED INTO A MAINSTREAM

FINANCIAL TOOL

In todays highly technical world, its 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 todays online banking is filled with amazing innovations, it hasnt always been this easy in
fact it took a long time to get this far.

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 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 videotex system. Because of the commercial failure of videotex these banking services
never became popular except in France where the use of videotex (Minitel) was subsidised
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, totalling 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.

First Online Banking Services in the United States:

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 banksCitibank, Chase Manhattan,
Chemical and Manufacturers Hanoveroffered 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 chequebook 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.

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 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 Wide Web:

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.

2.2. 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:

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(A). 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 cheques.
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

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

II. Paying third parties, including bill payments (see, e.g., BPAY) and third party fund transfers
(see, e.g., FAST).
III. Investment purchase or sale.
IV. Loan applications and transactions, such as repayments of enrolments.
V. Credit card applications.
VI. Register utility billers and make bill payments.
VII. Financial institution administration.
VIII. Management of multiple users having varying levels of authority.
IX. 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.

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2.3. ADVANTAGES OF ONLINE BANKING:

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:

Customers 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 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.

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 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.

2.4.THE DISADVANTAGES OF INTERNET BANKING:

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. Its easier to get the
banks support if there is someone who understands customer's business and vouch for his
operating plan.

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.

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 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 unauthorised 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 banks server is down.

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 CHAPTER-3
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
centralise 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.

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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 centre 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 centres.
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 todays 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 viewed centrally
by the bank. As such, customer profile, details of products and services availed by him and
customer behaviour about business of the bank can be well understood.

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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.
viii) By installing mailing solution on the intra net of the bank, written communication in the
form of letters, between H. O. and branches and vice versa, can be eliminated.
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 boosts 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' BNCS core banking
solution.

13
 The planning stage lasted three years, while the BNCS 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 17,700 branches.

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 centres.

3.2. ATM BANKING:

Full-service banking, 24 hours a day.

Make banking more convenient with ATMs and debit card.
Convenient Self Service
o Deposits Cash and check deposits can be made at most BBVA Compass ATMs.
o Withdraw Funds The cash you need when you need it.*
o Transfer funds Move funds between checking accounts and savings accounts that are
linked to your debit card.
Account Management
o Check Balance View your account balance before you make a withdrawal.
o 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.

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15
3.3. DIGITAL WALLET:
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 your spending online. Plus, its more secure than
carrying $350 to buy the latest iPad (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 Apples 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. Itll 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.

16
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 20+ merchants on the ground and online, promising more merchants to come.

2. Apples Passbook
Apples 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 youre 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.

17
3.4. DIGITAL CASH:
Digital Cash acts much like real cash, except that its
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.

18
 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 swiped at against the card reader
at the kiosk and account accessed post entering the ATM PIN.
Currently, very few banks like Citibank offer this facility to
their customers at select ATM centres 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 transactions however the real 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.

19
TIMINGS
Customers can use this facility between 8 AM and 7 PM on all weekdays and between 8 AM and 1 PM
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 beneficiarys 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.

20
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.

21
22
3.9. MOBILE BANKING:

Mobile banking is the act of doing financial transactions on a mobile device (cell phone, tablet,
etc.). This activity can be as simple as a bank sending fraud or usage activity to a clients cell
phone or as complex as a client paying bills or sending money abroad. Advantages to mobile
banking include the ability to bank anywhere and at any time. Disadvantages include security
concerns and a limited range of capabilities when compared to banking in person or on a
computer.

23
3.10. SMART CARD/STORE VALUE CARD:
A smart card, typically a type of chip card, is a plastic card that contains an embedded computer
chipeither a memory or micro-processor typethat stores and transacts data. This data is
usually associated with either value, information, or
both and is stored and processed within 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 healthcare, banking,
entertainment, and transportation. All applications can
benefit from the added features and security that
smart cards provide. According to Euro smart,
worldwide smart card shipments will grow 10% in 2010
to 5.455 billion cards. Markets that have been
traditionally served by other machine readable card technologies, such as barcode 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:

24
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 travel 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 scepticism about the customer acceptance of paper in parts of the
world were some of the reasons why e-ticketing hadnt taken off.

25
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 Dematerialisation of Shares?

Demat stands for dematerialisation. Dematerialisation 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 dematerialise his shares needs to open a demat account with Depository
Participant. This 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? Thats 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.
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.

26
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.

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).

27
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. OTHER E-SERVICES:

28
 CHAPTER-4
SECURITY ISSUES OF NET BANKING
5.1. 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.

5.2. 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 diving 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 users
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 banks website, the information keyed in during that
session will be captured and sent to the attacker. Here, the attacker uses the Trojan as an
agent to piggyback information from the users 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
disguising their identity to make it appear that the message was coming from a trusted source.

29
 Once successful, instead of going to the designated website, users do not realize that they
actually go to the fraudsters 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 companys accounts follow the same procedures.

30


Keyloggers. Keyloggers 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 networks firewall to monitor outgoing traffic can help you
determine when an infection occurs. Many keyloggers and viruses use email to travel from
computer to computer, so adding anti-virus protection to your companys 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

31
 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 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. Hacking works similarly to viruses. A hacker uses software to probe for vulnerabilities, 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 a
Trojan horse on a victims computer thats capable of modifying that users Web transactions as they
occur in real time. According to security expert Philipp Guhring, 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.

32
 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
methodsfrom very low-tech means, such as check forgery and mail theft to more high-tech
schemes, such as computer 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 of fee
against the lottery prize.

5.3. STEPS TO SECURE ONLINE BANKING:

5.3.1. 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 encryptedor protectedas 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.

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.

33
 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.

5.3.2. 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.

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.

34
 1. Issued To: Check here to make
sure the website you are doing
business with matches the website
on the certificate.
2. Issued By: Make sure
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, Thawte, Geotrust,
GoDaddy, and Comodo.
3. Validity: Make sure the SSL
certificate has not expired. If it's
expired, your information is not
guaranteed to be encrypted.

5.4. 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.

35
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.

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 imposter.

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 not recommended.

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 be encouraged.

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

36
 CHAPTER-5
ONLINE BANKING IN INDIA-GUIDELINES BY RBI

6.1. Guidelines by RBI on Internet Banking facility to Customers of Regional

Rural banks (RRBs):
6.1.1. Technology and Security Standards:

a. 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.
b. The bank should designate a Network and Database Administrator with clearly defined roles as
per the IS Audit policy duly approved by their Board.
c. Logical access controls to data, Systems, Application software, utilities, telecommunication lines,
libraries, System software, etc. should be in place.
d. The bank should ensure that there is no direct connection between the Internet and the bank's
system.
e. 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.

f. 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.

37
 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').

g. 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.

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

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

a. 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.
b. 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.

6.2. Authentication practices for internet banking:

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).

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.

38
 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 persons user
id, a smart card and his biometric authentication factor).

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

a. An effective authentication method should take into consideration customer acceptance, ease of use,
reliable performance, scalability to accommodate growth, and interoperability with other systems.

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

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

d. Virtual keyboard should be implemented.

e. Customers should be advised to adopt various good security precautions and practices in protecting their
personal computer and to avoid conducting financial transactions from public or internet caf
computers.

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

g. 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.

h. As an integral part of the two factor authentication architecture, banks should also implement
appropriate measures to minimise 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 customers 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.

39
 CHAPTER-6
ONLINE BANKING SCENARIO WITH INDIAN ECONOMY
6.1. 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 90s 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 %

2010* 2014**

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

No of POS deployed (In Actual Figure) 5,95,958 10,58,642 77.64

No of CREDIT CARDS issued (In Millions) 18.33 20.36 11.07

No of DEBIT CARDS issued (In Millions) 181.97 500.08 174.81

No of MOBILE BANKING Users (In Millions) 5.96 35.5 495.64

40
 TABLE 2
TRANSACTIONS THROUGH INTERNET/ELECTRONIC BANKING DELIVERY CHANNELS
No. of Transactions (In millions)
Transaction trough Year* Growth in %
2011-12 2013-14
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 BANKING 25.55 94.6 270.25

TABLE 3
NEFT AND RTGS TRANSACTIONS
No. of Transactions (In millions)
Transaction type Year* Growth in %
2010-11 2014-15
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 2010-11 and RBI website. TABLE-4

INCREASING INTERNET USERS IN INDIA

Years

2010 2011 2012 2013 2014

Internet users 90,421,849 122,970,441 155,575,944 213,339,324 243,198,922

New uses 29,486,779 32,548,593 32,605,503 57,763,380 29,859,598

Average 36,452,770

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:

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.
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.
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.

41
To sustain in the growing competition, commercial banks in India have adopted several initiatives to
improve banking services and to gain competitive advantage.
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
receivers mobile number.
ICICI bank launched 24x7 electronic branch, 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.
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 INTERNET BANKING:
For growth and development and to promote e-banking in India the Indian government and RBI
have been taken several initiatives.

The Reserve Bank monitors and 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 financial stability of the
nation.
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 Supervisions (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.

42
 CHAPTER-7
A Case Study on Online-Banking
Profile of the surveys
For case study a survey was conducted from November2015 to February2016 for the project
Online-Banking. This survey was done on the basis of 114 respondents from various sectors.

Mainly the objective of the research is to understand online banking users behaviours, opinions,
preferences and expectations. The questions were designed in such 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 1-11-15 to 15-2-16

Target population Local people of Uttarpara and surroundings

Survey method Direct interview, phone call and social media

Effective response rate 87.71%(100 of 114)

43
 7.1. DATA ANALYSIS AND INTERPRETATION:
1. GENDER BASIS ANALYSIS

DATA ANALYSIS IN RESPECT OF RESPONDENTS

90
78
80
72
70

60

50

40 36
28
30

20
6 8
10

0
RESPONDENTS NON-RESPONDENTS TOTAL-RESPONDENTS

MALE FEMALE

PARTICULARS RESPONDENTS NON-RESPONDENTS TOTAL-RESPONDENTS

MALE 72 6 78

FEMALE 28 8 36

TOTAL 100 14 114

INTERPRETATION:
Data collected from 114 respondents, out of 100 respondents perform online banking and
this is represented by a column 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 banks.

44
2. AGE BASIS ANALYSIS:

AGE GROUP ANALYSIS

BELOW 20 20-35 35-50 ABOVE 50

AGE GROUP FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

BELOW 20 34 30% 34

20-35 44 38% 78

35-50 24 21% 102

ABOVE 50 12 11% 114

INTERPRETATION:
Out of 114 respondents 34 respondents are in below 20 age group, 44 respondents in 20-
35 age group, 24 respondents in 35-50 age group and 12 respondents in above 50 age
group. This shows with the help of a Pie-Chart.

45
3. OCCUPATION BASIS ANALYSIS:

OCCUPATION BASE ANALYSIS

15
31

47
21

OCCUPATION FREQUENCY CUMULATIVE FREQUENCY PERCENTAGE

STUDENT 31 31 27%

SELF-EMPLOYED 21 52 18.00%

EMPLOYEE 47 99 41.00%

OTHERS 15 114 14.00%

INTERPRETATION:
Among 114 respondents 27% are students, 18% are self-employed, 41% are employees
and 14% are others.

46
 4. INCOME BASIS ANALYSIS:

MONTHLY INCOME
35
32

30

25
22
21
20
17

15 14

10 8

0
0-10000 10000-20000 20000-30000 30000-40000 40000-50000 ABOVE 50000

MONTHLY INCOME FREQUENCY CUMULATIVE FREQUENCY PERCENTAGE

0-10000 32 32 28%

10000-20000 21 53 18%

20000-30000 17 70 15%

30000-40000 14 84 12%

40000-50000 8 92 7%

ABOVE 50000 22 114 20%

INTERPRETATION:
Among 114 respondents 28% belong to Rs.0-10000 income group, 18% belong to
Rs.10000-20000 income group, 15% belong to Rs.20000-30000 income group, 12% belong
to Rs.30000-40000 income group, 7% belong to Rs.40000-50000 and 20% belong to above
Rs.50000 group.

47
5. EDUCATIONAL PROFILE:

EDUCATIONAL QUALIFICATION

OTHERS 19

POST-GRADUATE 11

GRADUATE 20

HIGHER SECONDARY 38

MADHYAMIK 26

0 5 10 15 20 25 30 35 40

EDUCATIONAL QUALIFICATION FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

MADHYAMIK 26 23% 26

HIGHER SECONDARY 38 33% 64

GRADUATE 20 18% 84

POST-GRADUATE 11 9% 95

OTHERS 19 17% 114

INTERPRETATION:
Among 114 respondents 23% are madhyamik pass, 33% are HS pass, 18% are graduate,
9% are Post-Graduate and 17% are others.

48
 6. HOW OFTEN DO YOU USE INTERNET PER WEEK?

INTERNET USE RATE PER WEEK

5 9

28

72

ONE HOUR TWO HOURS THREE HOURS MORE THAN THREE HOURS

INTERNET USE RATE FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

ONE HOUR 5 4% 5

TWO HOURS 9 8% 14

THREE HOURS 28 25% 42

MORE THAN THREE HOURS 72 63% 114

INTERPRETATION:
Among 114 respondents 63% use internet more than three hours per week, 25% use
internet three hours per week, 8% use internet two hours per week and 4% use internet
one hour in a week.

49
7. IN WHICH BANK DO YOU HAVE AN ACCOUNT?

PREFERABLE BANKS
30
27

25
21
20

15 13
12
10
10 9
8
6
5
5 3

SBI AXIS ICICI UCO HDFC UBI BOI PNB STANDARD CHARTERED OTHERS

NAME OF BANKS FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

SBI 27 24% 27
AXIS 21 18% 48
ICICI 13 11% 61
UCO 12 10% 73
HDFC 8 7% 81
UBI 9 8% 90
BOI 6 6% 96
PNB 5 5% 101
STANDARD CHARTERED 3 2% 104
OTHERS 10 9% 114

INTERPRETATION:
Among 114 respondents, 27 respondents have SBI bank a/c, 21 have AXIS bank a/c, 13
have ICICI bank a/c, 12 have UCO bank a/c, 8 have HDFC bank a/c, 9 have UBI bank a/c, 6
have BOI bank a/c, 5 have PNB bank a/c, 3 have STANDARED CHARTERED bank a/c and 10
have others bank a/c.

50
8. DO YOU AVAIL OF BANKING FACILITIES ONLINE?

ONLINE & OFFLINE BANKING USERS

OFFLINE BANKING
USERS
12%

ONLINE BANKING
USERS
88%

PARTICULARS FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

ONLINE BANKING USERS 100 88.00% 100

OFFLINE BANKING USERS 14 12.00% 114

INTERPRETATION:
Most of the respondents prefer online banking services. About 88% respondents support
online banking services and only 12% respondents support offline banking services.

51
9. IS YOUR BANK OPERATED UNDER CORE-BANKING FACILITY?

POLL FOR CORE BANKING SOLUTION

YES, 91
100

90

80

70

60

50

40

30
CAN'T SAY, 9
20
NO, 0
10

CORE BANKING FACILITY FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

YES 91 91% 91

NO 0 0% 91

CAN'T SAY 9 9% 100

INTERPRETATION:
Among 100 respondents 91% say that their bank run under core banking system but only
9% have no clear concept about this and they choose CANT SAY option.

52
10. HOW FREQUENTLY DO YOU USE ONLINE BANKING SERVICES?

USE OF ONLINE BANKING

NEVER 0

YEARLY 13

OCCASIONALLY 11

MONTHLY 41

WEEKLY 21

DAILY 14

0 5 10 15 20 25 30 35 40 45

USE OF ONLINE BANKING FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

DAILY 14 14% 14
WEEKLY 21 21% 35
MONTHLY 41 41% 76
OCCASIONALLY 11 11% 87
YEARLY 13 13% 100
NEVER 0 0% 100

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.

53
11. HOW MUCH DO YOU SPEND FOR A SINGLE ONLINE TRANSACTION?

MONEY SPEND FOR SINGLE TRANSACTION

ABOVE 20000
10%
10000-20000
10%

0-1000
40%

5000-10000
15%

1000-5000
25%

TRANSACTION
FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY
AMOUNT
0-1000 40 40% 40
1000-5000 25 25% 65
5000-10000 15 15% 80
10000-20000 10 10% 90
ABOVE 20000 10 10% 100

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

54
 12. WHY DO YOU AVAIL OF ONLINE BANKING?

BENEFITS SEEN BY CUSTOMERS

36
40
35
30
25
16
20 13 12
11
15 9
10 3
5
0

PURPOSE OF ONLINE BANKING FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

PRIVACY 9 9% 9
24*7 BUSINESS HOURS 36 36% 45

CONVENIENCE 16 16% 61
NOT TO MOVE ANYWHERE 13 13% 74

EASY TO USE 11 11% 85

SAVING TIMES & SPEED 12 12% 97

HARD TO SAY 3 3% 100

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.

55
 13. RATING OF THE MAIN TRANSACTIONS

RATING OF TRANSACTIONS
90
80
70
60
50
40
30
20
10
0
FUND ATM BANKING BALANCE ONLINE FIXED REQUEST A PAY BILLS ONLINE ONLINE
TRANSFER ENQUIRY DEPOSIT DEMAND SHOPPING RECHARGE
DRAFT

EXCELLENT GOOD AVERAGE POOR NOT APPLICABLE

TRANSACTIONS EXCELLENT GOOD AVERAGE POOR NOT APPLICABLE

FUND TRANSFER 35 25 15 20 5
ATM BANKING 68 12 10 8 2
BALANCE ENQUIRY 80 10 10 0 0
ONLINE FIXED DEPOSIT 10 15 10 25 40
REQUEST A DEMAND DRAFT 30 20 10 40 0
PAY BILLS 71 14 8 7 0
ONLINE SHOPPING 65 20 7 8 0
ONLINE RECHARGE 60 25 15 0 0

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

56
14. DOES YOUR BANK EDUCATE YOU ABOUT THE ONLINE BANKING SERVICES BEING
OFFERED?

EDUCATING ABOUT INTERNET BANKING

46%
54%

YES NO

EDUCATING NET BANKING FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

YES 46 46% 46

NO 54 54% 100

INTERPRETATION:
Among 100 respondents 46 people said that their bank educated them about the several
online banking services and on the other hand 54 people said that their bank did not
educate them about their net banking services.

57
15. ARE YOU AWARE OF THE SECURITY THREATS AND FRAUDS IN ONLINE BANKING AND
FAMILIAR WTH THE METHODS OF SECURED ONLINE TRANSACTIONS?

AWARENESS OF FRAUDS AND SECURED BANKING

YES, 58

60

50

40 NO, 27

30
CAN'T SAY, 15

20

10

AWARENESS OF FRAUDS FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY

YES 58 58% 58

NO 27 27% 75

CAN'T SAY 15 15% 100

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.

58
16. DOES YOUR BANK UPGRADE ONLINE SERVICES REGULARLY?

UPGRADATION OF NET BANKING

CANT SAY
5%

NO
29%

YES
66%

UPGRADATION OF
FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY
ONLINE SERVICES

YES 66 66% 66

NO 29 29% 95

CANT SAY 5 5% 100

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.

59
17. ARE YOU IN THE OPINION THAT YOUR BANK CHARGES UNNECESSARY FOR ONLINE
SERVICES?

RATING FOR BANK CHARGES

60 51

50
37
40

30

12
20

10

0
YES NO CAN'T SAY

VOTE FOR UNNECESSARY CUMULATIVE

FREQUENCY PERCENTAGE
BANK CHARGES FREQUENCY

YES 37 37% 37

NO 51 51% 88

CAN'T SAY 12 12% 100

INTERPRETATION:
37% users think that their banks charge unnecessary for online services. While 51% people
think that their banks dont do such and 12% people are unable to answer this question.

60
18. DO YOU THINK ONLINE BANKING IS BETTER SUBSTITUTE OF TRADITIONAL BANKING
SYSTEM?

PREFERENCE OF NET BANKING

8

23

69

YES NO CAN'T SAY

ONLINE BANKING-
FREQUENCY PERCENTAGE CUMULATIVE FREQUENCY
BETTER SUBSTITUE

YES 69 69% 69

NO 23 23% 92

CAN'T SAY 8 8% 100

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.

61
19. WHICH FACTOR DO YOU THINK RESPONSIBLE FOR NON-ACCESSBILITY OF ONLINE
BANKING BY MAJORITY OF PEOPLE IN YOUR AREA?

REASON OF NON-ACCESSBILITY OF NET BANKING

LACK OF KNOWLEDGE 15

LESS INTERNET CONNECTION 25

LACK OF COMPUTER FACILITY 22

RURAL AREA 8

INADEQUATE ATM SERVICE 12

LACK OF AWARNESS 18

0 5 10 15 20 25 30

CUMULATIVE
NON-ACCESSBILITY FREQUENCY PERCENTAGE
FREQUENCY

LACK OF AWARNESS 18 18% 18

INADEQUATE ATM SERVICE 12 12% 30

RURAL AREA 8 8% 38

LACK OF COMPUTER
22 22% 60
FACILITY

LESS INTERNET
25 25% 85
CONNECTION

LACK OF KNOWLEDGE 15 15% 100

INTERPRETATION:
Among 100 respondents 18 choose LACK OF AWARNESS, 12 choose INADEQUATE ATM
SERVICE, 8 choose RURAL AREA, 22 choose LACK OF COMPUTER FACILITY, 25 choose
LESS INTERNET CONNECTION and 15 choose LACK OF KNOWLEDGE option.

62
20. IN YOUR OPINION WHICH ONLINE OPERATION SHOULD BE MODIFIED PROMPTLY FOR
BETTER SERVICES IN FUTURE?

VOTE FOR MODIFICATION OF SERVICES

35 31
30
25
20 18

15 13
11
10 8 7
5
5 3 2 2
0

MODIFICATION OF CUMULATIVE
FREQUENCY PERCENTAGE
SERVICES FREQUENCY
ATM SERVICE 31 31% 31
ACCOUNTS SERVICE 3 3% 34
FUND TRANSFER 11 11% 45
BILL PAYMENT 13 13% 58
E-TAX PAYMENT 8 8% 66
E-DEPOSIT 2 2% 68
DEMAT SERVICE 7 7% 75
LOANS & CREDIT SERVICE 2 2% 77
INTERNET SECURITY
18 18% 95
SERVICE
CUSTOMER FEEDBACK
5 5% 100
SERVICE

INTERPRETATION:
This chart shows that ATM SERVICE, BILL PAYMENT and INTERNET SECURITY
SERVICE should be modified in near future.

63
21. RATING OF ONLINE BANKING SERVICES.

VOTE FOR ONLINE BANKING

HARD TO SAY
EXCELLENT
5%
18%

POOR
15%

AVERAGE VERY GOOD

12% 15%

GOOD
35%

CUMULATIVE
RATING FREQUENCY PERCENTAGE
FREQUENCY

EXCELLENT 18 18% 18
VERY GOOD 15 15% 33
GOOD 35 35% 68
AVERAGE 12 12% 80
POOR 15 15% 95
HARD TO SAY 5 5% 100

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 35 people choose GOOD option.

64
 CHAPTER-8
FINDINGS, RECOMMENDATIONS & CONCLUSIONS
8.1. THE MAJOR FINDINGS OF THE PRIMARY SURVEY ARE:
114 people respond to this study. But out of which 100 people claim that they perform
online banking service.
72 respondents use internet more than three hours in a week.
Out of 100 people 72 are male and 28 are female. Thats 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 100 respondents 68 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 this facilities having income lie up to Rs.30000, and the rest
having income between Rs.30000-50000.
It is very interesting to see that 71 people have accounts in SBI, AXIS and ICICI banks. But SBI
BANK has more customers than others.
Among 100 respondents 91 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 100 respondents 46 people said that their bank educated them about the several
online banking services and on the other hand 54 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 users claim that they aware of security threats and they
took recommend steps to secure the net banking.
Maximum number of respondents claim that their banks do not charge extra charges for net
banking facilities.
Out of 100 respondents 69 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.
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.

65
 Moreover 18 people are highly satisfied with this services and 50 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 114 people of Uttarpara area. So we cant 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 disclose their personal data truly.

Due to shortage of time data cant 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.

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
are 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 do not
have core-banking facilities. For this reason this type of bank lose their customers.
So co-operative banks should be covered under core-banking system.

66
 Link failure is a big problem especially in UCO bank and for this reason the
important business deals have been hampered. So banks should modified 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 user friendly. Customers should be motivated
to use internet banking facilities more.
Banks are now using two factor authentication i.e. password and OTP but they
should improve that and using three factor authentication because hackers
sometimes break the two factor authentication system.

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 FACsys) to send sensitive
information.
Install a dedicated, actively managed network firewall to limit the potential for
unauthorised access to your network or computer.

67
 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 lacs or a big amount from either their mobile company or somewhere
else. But the fact is this type of caller want customers 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.yahoo.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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 APENDIX
A Study of Online Banking in India

QUESTIONNAIRE
Dear Respondent,

I am a student of Raja Peary Mohan College, Department of commerce, and presently doing a project on
A Study of Online Banking in India. I request you to kindly fill the questions stated below and I assure you
that the data generated by you will be kept confidential.

KOUSHIK HALDER
B.COM (HONOURS)-3RD YEAR
RAJA PEARY MOHAN COLLEGE
A. PERSONAL DETAILS:
i. Name ii. Gender:-Male Female

iii. Age Group:- Below 20 20-35 , 35-50 , Above 50 .

iv. Occupation v. Monthly Income ..

B. EDUCATIONAL PROFILE:

Madhyamik H.S Graduate Post-Graduate Other. .

QUESTION 1: HOW OFTEN DO YOU USE INTERNET PER WEEK?

ONE HOUR TWO HOURS THREE HOURS MORE THAN THREE HOURS
QUESTION 2: IN WHICH BANK DO YOU HAVE AN ACCOUNT?

SBI AXIS ICICI UCO HDFC UBI BOI PNB

STANDARD CHARTERED OTHER.(specify)

QUESTION 3: DO YOU AVAIL OF ALL BANKING FACILITIES ONLINE? YES NO.

QUESTION 4: IS YOUR BANK OPERATED UNDER CORE-BANKING FACILITY?

YES NO. CANT SAY.

QUESTION 5: HOW FREQUENTLY DO YOU USE ONLINE BANKING SERVICES?

DAILY WEEKLY MONTHLY OCCASIONALLY YEARLY NEVER

QUESTION 6: HOW MUCH DO YOU SPEND FOR A SINGLE ONLINE TRANSACTION?
0-1000 1000-5000 5000-10000 10000-20000 ABOVE 20000

QUESTION 7: WHY DO YOU AVAIL OF ONLINE BANKING?

PRIVACY 24*7 BUSINESS HOURS CONVENIENCE NOT TO MOVE ANYWHERE

EASY TO USE SAVING TIMES & SPEED HARD TO SAY OTHER.(Specify).

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 QUESTION 8: KINDLY RATE THE FOLLOWINGS OF YOUR ONLINE BANKING SERVICES:
QUESTIONS EXCELLENT GOOD AVERAGE POOR NOT
APPLICABLE
FUND TRANSFER
ATM BANKING
BALANCE ENQUIRY
ONLINE FIXED DEPOSIT
REQUEST A DEMAND DRAFT
PAY BILLS
ONLINE SHOPPING
ONLINE RECHARGE
OTHER

QUESTION 9: DOES YOUR BANK EDUCATE YOU ABOUT THE ONLINE BANKING SERVICES
BEING OFFERED?
YES NO CANT SAY.

QUESTION 10: ARE YOU AWARE OF THE SECURITY THREATS AND FRAUDS IN ONLINE
BANKING AND FAMILIAR WITH THE METHODS OF SECURED ONLINE TRANSACTIONS?
YES NO CANTT SAY

QUESTION 12: DOES YOUR BANK UPGRADE ONLINE SERVICES REGULARLY?

YES NO CANT SAY.

QUESTION 13: ARE YOU IN THE OPINION THAT YOUR BANK CHARGES UNNECESSARY FOR
ONLINE SERVICES? YES NO CANT SAY.

QUESTION 14: DO YOU THINK ONLINE BANKING IS BETTER SUBSTITUTE OF TRADITIONAL

BANKING SYSTEM? YES CANT SAY NO.

QUESTION 15:WHICH FACTOR DO YOU THINK RESPONSIBLE FOR NON-ACCESSEBILITY OF

ONLINE BANKING BY MAJORITY OF PEOPLE IN YOUR AREA ?
LACK OF AWARNESS OF PEOPLE INADEQUATE ATM SERVICES RURAL AREA

LACK OF COMPUTER FACILITY LESS INTERNET CONNECTION LACK KNOWLEDGE

OTHER REASON.

QUESTION 16: IN YOUR OPINION WHICH ONLINE OPERATIONS SHOULD BE MODIFIED

PROMPTLY FOR BETTER SERVICES IN FUTURE?
ATM SERVICES ACCOUNTS SERVICES FUND TRANSFER BILL PAYMENT

E-TAX PAYMENT E-DEPOSIT MARKET INVESTMENT & DEMAT SERVICES

LOANS & CREDIT SERVICES INTERNET SECURITY SERVICES

OTHER CUSTOMER RELATIONSHIP SERVICES

QUESTION 17: GIVE YOUR OVERALL RATING IN ONLINE BANKING SERVICES.

EXCELLENT VERY GOOD GOOD

AVERAGE POOR HARD TO SAY.

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