INTRODUCTION

E-banking:Internet banking (or E-banking) means any user with a personal computer and a browser
can get connected to his bank-s website to perform any of the virtual banking functions. In
internet banking system the bank has a centralized database that is web-enabled. All the
services that the bank has permitted on the internet are displayed in menu. Any service can
be selected and further interaction is dictated by the nature of service. Once the branch
offices of bank are interconnected through terrestrial or satellite links, there would be no
physical identity for any branch. It would a border less entity permitting anytime,
anywhere and any how banking. The delivery channels include direct dialup connections,
private networks, public networks, etc. with the popularity of computers, easy access to
Internet and World Wide Web (WWW),
Internet is increasingly used by banks as a channel for receiving instructions and
delivering their products and services to their customers. This form of banking is generally
referred to as Internet Banking, although the range of products and services offered by
different banks vary widely both in their content and sophistication.

Meaning of E-Banking
E-bank is the electronic bank that provides the financial service for the individual client by
means of Internet.
Electronic banking
is an umbrella term for the process by which a customer may perform banking transactions
electronically without visiting a brick-and-mortar institution. The following terms all refer
to one form or another of electronic banking: personal computer (PC) banking, Internet
banking, virtual banking, online banking, home banking, remote electronic banking, and
phone banking. PC banking and Internet or online banking is the most frequently used
designations. It should be noted, however, that the terms used to describe the various types
of electronic banking are often use interchangeably.

Electronic banking is an activity that is not new to banks or their customers. Bank shaving
has been providing their services to customers electronically for years through software
programs. These software programs allowed the users personal computer to dial up the
bank directly. In the past however, banks have been very reluctant to provide their
customers with banking via the Internet due to security concerns. Today, banks seem to be
jumping on the bandwagon of Internet banking. Why is there a sudden increase of bank
interests in the Internet? The first major reason is because of them proved security and
encryption methods developed on the Internet. The second reason is that banks did not
want to lose a potential market share to banks that were quick to offer their services on the
Internet.
Many of the banks like ICICI, HDFC, IndusInd, IDBI, Citibank, Global Trust Bank
(GTB), Bank of Punjab and UTI were offering E-banking services. Based on the above
statistics and the analysts comments that India had a high growth potential for e-banking
the players focused on increasing and improving their E-banking services. As a part of
this, the banks began to collaborate with functions online.
E-banking is defined as the automated delivery of new and traditional banking products
and services directly to customers through electronic, interactive communication channels.
E-banking includes the systems that enable financial institution customers. Individuals or
businesses, to access accounts, transact business, or obtain information on financial
products and services through a public or private network including the Internet,
Customers access e-banking services using an intelligent electronic device.
The E-banking was firstly introduced in India by the ICICI around 1996. There after many
other banks like HDFC, IndusInd bank, IDBI, Citibank Trust Banks, UTI, etc. followed
the service. As today private and foreign bank had started capturing the market through ebanking hence the competition is heating up and the lack of technology can make a bank
loose a customer so now the public banks are breaking the shackles of traditional set-up
and gearing up to face the competition posed by the private sector counter parts.

The Global E-Banking Scenario

The banking industry is expected to be a leading player in e-business. While the banks in
developed countries are working primarily via Internet as non-branch banks, banks in the
developing countries use the Internet as an information delivery tool to improve
relationship with customers .In early 2001, approximately 60 percent of e-business in the
UK was concentrated in the financial services sector, and with the expected 10-fold
increase of the British e-business market by 2004, the share of the financial services will
further increase. Around one fifth of Finish and Swedish bank customers are banking
online, while in the US, according to UNCTAD, online banking is growing at an annual
rate of 60 percent and the numbers of online accounts are expected to reach 35 million by
2014.Banks have established an Internet presence with various objectives. Most of them
are using the Internet as a new distribution channel. Financial services, with the use of
Internet, may be offered in an equivalent quantity with lower costs to the more potential
customers. There may be contacts from each corner of the world at any time of day or
night. This means that banks may enlarge their market without opening new branches. The
banks in the US are using the Web to reach opportunities in three different categories:
to market information, to deliver banking products and services, and
To improve customer relationship.

In Asia
The major factor restricting growth of e-banking is security, in spite of several countries
being well connected via Internet. Access to high-quality e-banking products is an issue as
well. Majority of banks in Asia are just offering basic services compared with those of
developed countries. Still, e-banking seems to have a future in Asia. According to
McKinsey survey, e-banking will succeed if the basic features, especially bill payment, are
handled well. Bill payment was the most popular feature, cited by 40 percent of
respondents of the survey. However, providing this service would be difficult for banks in
Asia because it requires a high level of security and involves arranging transactions with a
variety of players

In India
Approximately one percent of high and middle-income group banking customers
conducted banking on the Internet in 2010 compared to 5 to 6 percent in Singapore and
South Korea. In 2001, a Reserve Bank of India survey revealed that more than 20 major
banks were either offering e-banking services at various levels or planned to do so in the
near future. Some of the private banks included ICICI Bank, HDFC Bank Indusind Bank,
IDBI Bank, Citibank, Global Trust Bank, Bank of Punjab and UTI Bank. In the same year,
out of an estimated 0.9 million Internet user base, approximately 17 percent were reported
to be banking on the Internet. The above statistics reveal that India does have a high
growth potential for e-banking. The banks have already started focusing on increasing and
improving their e-banking services. In 2012, over 70 percent of the banks in the US were
offering e-banking services. However, large banks appeared to have a clear advantage over
small banks in the range of services they offered. The economics of e-banking was
expected to favor large banks because of economies of scale and scope, and the ability to
advertise heavily. Moreover, e-banking offered entry and expansion opportunities that
small banks traditionally lacked.

In Europe
The Internet is accelerating the reconfiguration of the banking industry into three separate
businesses: production, distribution and advice. This reconfiguration is being further
driven by the Internet, due to the combined impact of:
The emergence of new, more focused business models.
New technological capabilities that reduces banking relationship and transaction costs.
High degree of uncertainty over the impact that new entrants will have on current business
models.
Though e-banking in the Europe is still in the evolutionary stage, it is very clear that it is
having a significant impact on traditional banking activities. Unlike in the US, though
large banks in the Europe have a competitive edge due to their ability to invest heavily in
new technologies, they are still not ready to embrace e-banking. Hence, medium-sized
banks and start-ups have an important role to play on the e-banking front if they can take
concrete measures quickly and effectively.

The E-Banking Trends

4

Convergence is one of the clear visible trends in the banking industry. Here, convergence
does not mean offering banking, broking and insurance services under one corporate name
through the Internet. It covers different dimensions, including channel delivery, sales
culture, back-office processes, and the knowledge management infrastructure all being
integrated via Internet. Few banks take these different dimensions into consideration.
Instead, they view convergence purely as a product-centric development that will enable
them to cross-sell products. A strategy that does not go beyond product convergence is
bound to have some limitations. For example, imagine a situation where customer service
personnel in a so called `converged' bank is required to answer banking, brokerage, and
insurance questions coming through multiple channels including the Internet, branches,
call centers, or ATMs. This bank is unlikely to succeed since, though it has expanded the
product line, it has not made any efforts to broaden the skill sets of the personnel who
support these channels. Effective knowledge management is the key to the e-business
success of converged banking institutions. However, this requires high level of crossorganizational cooperation and information sharing. An effective knowledge management
system will vastly improve the institution's ability to know its customers. Robust customer
information management systems at the front-end, coupled with efficient fulfillment
processes, can enable banks to shorten the delivery time of their products and services.

OBSERVATION OF STUDY
For this booklet, e-banking is defined as the automated delivery of new and traditional
banking products and services directly to customers through electronic, interactive
communication channels. E-banking includes the systems that enable financial institution
customers, individuals or businesses, to access accounts, transact business, or obtain
information on financial products and services through a public or private network
including the Internet. Customers access e-banking services using an intelligent electronic
device, such as a personal computer (PC), personal digital assistant (PDA), automated
teller machine (ATM), kiosk, or Touch Tone telephone. While the risks and controls are
similar for the various e-banking access channels, this booklet focuses specifically on
Internet-based services due to the Internets widely accessible public network.
Accordingly, this booklet begins with a discussion of the two primary types of Internet
websites: informational and transactional.

E-BANKING SUPPORT SERVICES

5

WEB LINKINGA large number of financial institutions maintains sites on the World Wide
Web. Some websites are strictly informational, while others also offer customers the
ability to perform financial transactions, such as paying bills or transferring funds between
accounts.

WIRELESS E-BANKING
Wireless banking is a delivery channel that can extend the reach and enhance the
convenience of Internet banking products and services. Wireless banking occurs when
customers access a financial institution's network(s) using cellular phones, pagers, and
personal digital assistants (or similar devices) through telecommunication companies
wireless networks. Wireless banking services in the United States typically supplement a
financial institution's e-banking products and services.
Person-to-Person Payments
Electronic person-to-person payments, also known as e-mail money, permit consumers to
send money to any person or business with an e-mail address. Under this scenario, a
consumer electronically instructs the person-to-person payment service to transfer funds to
another individual. The payment service then sends an e-mail notifying the individual that
the funds are available and informs him or her of the methods available to access the funds
including requesting a check, transferring the funds to an account at an insured financial
institution, or retransmitting the funds to someone else. Person-to-person payments are
typically funded by credit card charges transfer from the consumers account at a financial
institution. Since neither the payee nor the payer in the transaction has to have an account
with the payment service, such services may be offered by an insured financial institution,
but are frequently offered by other businesses as well.

Banking Services through Internet:

1. The Basic Level Service is the banks web sites which disseminate information on
different products and services offered to customers and members of public in general. It
may receive and reply to customers queries through e-mail.

2. In the next level are Simple Transactional Web sites which allows customers to submit
their instructions, applications for different services, queries in their account balances, etc.
but do not permit any fund-based transactions on their accounts.
3. The third level of Internet banking service are offered by Fully Transactional Web sites
which allow the customers to operate on their accounts for transfer of funds, payment of
different bills, subscribing to other products of the bank and to transact purchase and sale
of securities, etc. The above forms of Internet banking service the customer or new banks,
who deliver banking service primarily through Internet or other electronic delivery
channels as the value added services. Some of these banks are known as Virtual banks or
Internet only banks and may not have physical presence in a country despite offering
different banking services.

The Indian Scenario: Internet banking, both as a medium of delivery of banking services and as a strategic tool
for business development.
At present, the total internet users in the country are estimated at 9 lakh.
Cost of banking service through the Internet from a fraction of costs through conventional
methods.
Plastic Cards as Media for Payment: There are four types of plastic cards being used as media for making payments. These are:
1. Credit Card
2. Debit Card
3. Smart Card
4. ATM Card
1. Credit Cards: - The credit card enables the cardholders to: Purchase any item like
clothes, jewelers, railway/air tickets, etc. Pay bills for dining in a restaurant or boarding
and lodging in hotel Avail of any service like car rental, etc.
2. Debit Cards: -A debit card is issued on payment of a specified amount by the issuing
company like a telephone company to a customer on cash payment or on debiting his
account by a bank. Thus it is like an electronic purse, which can be read and debited by the
7

required amount. It may be noted that while through a credit card, the customer first makes
a purchase or avails service and pays later on, but forgetting the debit card, a customer has
to first pay the due amount and then make a purchase or avail the service. For this reason,
debit card are not as popular as credit cards.
3. Smart Cards: -Smart Cards have a built-in micro computer chip, which can be used for
storing and processing information. For example, a person can have a smart card from a
bank with the specified amount stored electronically on it. As he goes on making
transactions with the help of the card, the balance keeps on reducing electronically. When
the specified amount is utilized by the customer, he can approach the bank to get his card
validated for a further specified amount. Such cards are used for paying small amounts
like telephone calls, petrol bills, etc.
.4. ATM Cards: - The card contains a PIN (Personal Identification Number) which is
selected by the customer or conveyed to the customer and enables him to withdraw cash
up to the transaction limit for the day. He can also deposit cash or cheque.

OBJECTIVES OF THE STUDY

Find the customer satisfaction relating to E-banking service.
To study the awareness of internet banking among the customers of ICICI and HDFC
banks.
To know the customers perception toward the E-banking service.

RESEARCH METHODOLOGY

Primary Data:
In this research with a sample size of nearly 20 customers data will be available in form
of questionnaire collected in terms of different questions influencing the use of internet
banking. Internet banking is considered as dependent on awareness among customers
which will be studied with help of different independent variable. Only the customers of
HDFC & ICICI bank are taken as samples for study.
Secondary data:
Collection of information from different kind of books the data of the company what they
maintained.
Methodology
Once the findings are finalized by a research, suggestions should be made for the
betterment of enterprise. The data collected from questionnaire will be tabulated and
analyzed so that the result can be presented as simple as possible. There are a number of
ways like
Pie-chart
Graphs

LIMITATIONS OF STUDY
Banks are not giving me all information about e- banking services.
They do not permit to meet any employees in their banks.

COMPANY PROFIL

ABOUT US
9

ICICI Bank is India's largest private sector bank with total assets of Rs. 5,367.95 billion
(US$ 99 billion) at March 31, 2014 and profit after tax Rs. 83.25 billion (US$ 1,533
million) for the year ended March 31, 2014. The Bank has a network of 3,514 branches
and 11,063 ATMs in India, and has a presence in 19 countries, including India.

ICICI Bank offers a wide range of banking products and financial services to corporate
and retail customers through a variety of delivery channels and through its specialized
subsidiaries in the areas of investment banking, life and non-life insurance, venture capital
and asset management. The Bank currently has subsidiaries in the United Kingdom,
Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka,
Qatar and Dubai International Finance Centre and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK
subsidiary has established branches in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE).

HISTORY
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity
offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition
of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary
market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was
formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project financing to Indian
businesses.
10

In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the NYSE.
After consideration of various corporate structuring alternatives in the context of the
emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both
entities, and would create the optimal legal structure for the ICICI group's universal
banking strategy. The merger would enhance value for ICICI shareholders through the
merged entity's access to low-cost deposits, greater opportunities for earning fee-based
income and the ability to participate in the payments system and provide transactionbanking services. The merger would enhance value for ICICI Bank shareholders through a
large capital base and scale of operations, seamless access to ICICI's strong corporate
relationships built up over five decades, entry into new business segments, higher market
share in various business segments, particularly fee-based services, and access to the vast
talent pool of ICICI and its subsidiaries.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of
ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was
approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of
Gujarat at Ahmadabad in March 2002, and by the High Court of Judicature at Mumbai and
the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's
financing and banking operations, both wholesale and retail, have been integrated in a
single entity.

AWARDS

Awards-2014Ms. Chanda Kochhar, MD and CEO has been awarded as the Best

CEO - Private Sector category at the Forbes India Leadership Awards 2014

Ms. Chanda Kochhar, MD & CEO, has been named as the most powerful woman

in business in India for the third consecutive year in Fortune's list of '50 Most Powerful
11

Women In Business: The Global 50'. She is also among the four most powerful women in
business in the world, according to the list.

ICICI Bank received the award for 'Best Private Sector Banker' by the Sunday

Standard Best Bankers Awards 2014.

ICICI Bank has been awarded the 'Best Banker - All round expansion' by the

Sunday Standard Best Bankers Awards 2014.

ICICI Bank won 'Best Banker - Efficiency & Profitability' by the Sunday Standard

Best Bankers Awards 2014.

Mr KV Kamath, Chairman, receives the "AIMA Managing India" Award for

"Outstanding Institution Builder"

Ms Chanda Kochhar, MD & CEO, receives the "AIMA JRD Tata Corporate

Leadership Award" 2013

ICICI Bank has won the Trade Finance Magazine Award for Excellence 2014,

under the category of 'Asia Pacific Awards : Best Trade Bank in India'

ICICI Bank received the Asian Banking & Finance Wholesale Banking Awards

2014 for the India Domestic Trade Finance Bank of the Year

ICICI Bank Limited has been awarded as the Best Private Sector Bank under the

category Global Business Development for the Dun & Bradstreet - Polaris Financial
Technology Banking Awards 2014

ICICI Bank has been one of the recipients of the Corporate Governance Asia

Annual Recognition Awards 2014

Ms Chanda Kochhar, MD & CEO, is one of the recipients from India, for the 4th

Asian Corporate Director Recognition Awards 2014

ICICI Bank has won the Best Bank Award for Use of IT for Business Innovation

Among Large Banks from the Institute for Development and Research in Banking
Technology (IDRBT)

ICICI Bank has received the Special Award for Best IT Team Among Private

Sector Banks from the Institute for Development and Research in Banking Technology
(IDRBT)

ICICI Bank won the Special Award for Electronic Payment Systems Among Large

Banks from the Institute for Development and Research in Banking Technology (IDRBT)

ICICI Bank received Special Award for Mobile Banking Among Large Banks from

the Institute for Development and Research in Banking Technology (IDRBT)

12

ICICI Bank ranks 10th in Fortune India's list of 50 most admired companies in

India.

Ms. Chanda Kochhar, MD & CEO, has been ranked as the most powerful business

woman in India in the Forbes' list of 'The World's 100 Most Powerful Women 2014'

ICICI Bank Limited has been conferred the Best Remittance Business award at

The Asian Banker's International Excellence in Retail Financial Services 2014 Awards
ceremony.

ICICI Bank was honored with the Medici Innovation Hall of Fame Award,

instituted by The Medici Institute in collaboration with the Medici Group, USA.

ICICI Bank and its IT partner Fund tech won The Asian Banker Technology

Implementation Award for the Convergence Banking project from Asian Banker.

Ms Chanda Kochhar received the 'Transformation Leader Award' by NDTV Profit

Business Leadership Awards 2013.

For the second consecutive year, Mr. N.S.Kannan, Executive Director & CFO,

received the "Best Performing CFO", in the Banking / Financial Services category by
CNBC - TV 18.

For the third year in a row, Ms. Chanda Kochhar, Managing Director & CEO, is in

the Power List 2014 of 25 most powerful women in India, by India Today.

Ms. Chanda Kochhar is the only Indian to be featured in the Dow Jones list of

Most Influential Female Executives in the World of the last decade. She is ranked 12th in
the global list.

ICICI Bank awarded the Most Admired Infrastructure Debt Financer and PPP

Project of the Year: Yamuna Expressway Project, in the 5th KPMG Infrastructure Today
Awards by ASAPP Media Information Group, publishers of Infrastructure Today in
association with KPMG

For the 4th consecutive year, ICICI Bank won the Celent Model Bank for the next

generation technology oriented banking solutions.

ICICI Bank was awarded a "Special IT Innovation Award" by Lenovo -

NASSCOM and CNBC-TV18.

ICICI Bank was the winner of "6th Loyalty Awards" for My Savings Rewards by

AIMIA (global leader in Loyalty).

ICICI Bank UK PLC's online savings product Hi SAVE won the "Highly

Commended" (2nd rank) at the Consumer Money facts Awards.

13

ICICI Bank received the "Gram Samvad", Service for Low cost/Small budget

marketing initiative Award by Rural Marketing Association of India (RMAI).

Ms. Chanda Kochhar awarded the Businessperson of the Year 2013 by Business

India. She is the first woman recipient of this award in 31 years.

ICICI Bank won the Best domestic bank, India by The Asset Triple a Country

Awards.

ICICI Bank received the Golden Peacock Innovative Product / Service Award for

its Tab Banking project. The Golden Peacock Awards were instituted by the Institute of
Directors and was headed by Justice P N Bhagwati, Ex Chief Justice of India.

ICICI Bank received the "Dataquest Technology Innovation Awards 2013" for Data

center migration by Dataquest.

ICICI Bank was conferred the Best Performance Award for Self Help Group

(SHG) Bank Linkage Programme in NABARD's State Level Awards announced by their
Maharashtra Regional Office. The Bank received the first prize for the year 2011-11 in the
Private Sector Bank category and 2nd runner up for the year 2012-12 in the Commercial
Bank category.

For the second consecutive year, ICICI Bank won the NPCI's NFS Operational

Excellence Awards in the MNC and Private Sector Banks Category for its ATM network.

Mr.K.V.Kamath was awarded the "Hall Of Fame" by Outlook Money for his long

standing contribution in the financial services sector.

ICICI Bank won the Best Bank - India Award by The Banker.

Ms. Chanda Kochhar ranked 18th in the Fortune's list of '2013 Businesspersons of

the Year'. The 50 global leaders is Fortune's annual ranking of leaders who are "the best in
business".

Ms. Chanda Kochhar tops the list of "50 Most Powerful Women in Business" by

Fortune India.

ICICI Bank tops the list of "Private sector and Foreign Banks" by Brand Equity,

Most Trusted Brands 2013. It ranks 15th in the "Top Service 50 Brands".

For the third consecutive year, ICICI Bank ranked second in "India's 50 Biggest

Financial Companies" in The BW Real 500 by Businessworld.

For the second year in a row, Ms. Chanda Kochhar, Managing Director & CEO

was ranked 5th in the International list of 50 Most Powerful Women In Business by
Fortune.
14

ICICI Bank tops the list of most fans in India and globally ranks fifth amongst

financial institutions on Facebook in the social media engagement study conducted by

Ketchum Sampark.

ICICI Bank in the Private Sector Bank category won the Best Technology Bank Of

The Year, Best Financial Inclusion Initiative and Best Use Of Technology In Training and
e-Learning by Indian Bank's Association (IBA) Technology Awards. The Bank also
received the first runner up for Best Online Bank, Best Customer Relationship Initiative
and Best Use Of Mobility Technology in Banking by IBA Technology Awards .

ICICI Bank awarded the Best SME Bank for Treasury and Working Capital (India)

by The Asset Triple A.

ICICI Bank received the Best Trade Finance House and Best Cash Management

House by The Corporate Treasurer Alliance Country Awards.

ICICI Bank awarded the Best Private Sector Bank in Global Business

Development, Rural Reach and SME financing categories by Dun & Bradstreet - Polaris
Financial Technology Banking Awards.

Ms. Chanda Kochhar, Managing Director and CEO, was ranked 59th in the World's

100 Most Powerful Women by Forbes magazine.

For the fifth year in a row, ICICI Bank was awarded the "Best Foreign Exchange

Bank (India)" by Finance Asia Country Awards. The Bank also received the "Best Bond
House (India)".

Ms. Chanda Kochhar awarded the 3rd Asian Corporate Director Recognition

Award 2013 by Corporate Governance Asia.

ICICI Bank awarded the Best Trade Finance bank in India by GTR Asia Leaders in

Trade Awards 2013.

Ms. Chanda Kochhar, Managing Director & CEO, ranked 5th in the list of "Most

Powerful CEOs", in the corporate India's definitive power listing, by The Economic Times
Corporate Dossier. She also tops the list of "Top Women CEOs", in the country.

ICICI Bank featured as the top Indian brand to be listed in the annual BrandZ's Top

100 Most Valuable Global Brands study.

ICICI Bank won the "Best Bond House (India) 2012", by IFR Asia

ICICI Bank awarded the Best Bank (India) by Global Finance

ICICI Bank won the "Century International Quality Era Award" at Geneva. The

award recognizes commitment towards Quality, Excellence, Customer Satisfaction,

15

Leadership and Strategic Planning as established in the QC 100 model of Total Quality
Management (TQM).

For the second year in a row, Ms. Chanda Kochhar, Managing Director & CEO, is

in the Power List 2013 of 25 most influential women professional in India, by India Today.

Ms. Chanda Kochhar, Managing Director & CEO, is amongst the nine Indian

women to be named in the Forbes magazine's inaugural 'Asia Power Businesswomen list'

Mr. N.S.Kannan, Executive Director & CFO, received the "Best CFO", in the

Banking / Financial Services category by CNBC - TV 18.

ICICI Bank was recognized for the first Credit Default Swap (CDS) deal in India

at the Fimmda annual conference in Kuala Lumpur.

Ms. Chanda Kochhar, Managing Director & CEO was awarded the "CNBC Asia

India Business Leader Of The Year Award". She also received the "CNBC Asia's CSR
Award 2012"

Board Members
Mr. M. K. Sharma, Chairman
..............................................
Mr. Dileep Choksi
..............................................
Mr. Homi R. Khusrokhan
..............................................
Mr. M.S. Ramachandran
..............................................
16

Dr. Tushaar Shah

..............................................
Mr. V. K. Sharma
..............................................
Mr. V. Sridar
..............................................
Mr. Alok Tandon
..................................................
Ms. Chanda Kochhar,
Managing Director & CEO
..................................................
Mr. N. S. Kannan,
Executive Director
..................................................
Mr. K. Ramkumar,
Executive Director
..................................................
Mr. Rajiv Sabharwal,
Executive Director
..................................................
Ms. Vishakha Mulye,
Executive Director
..................................................

FINANCIALS:
Performance Review Quarter ended September 30, 2014
20% year-on-year increase in standalone profit after tax to 2,352 crore (US$ 376 million)
for the quarter ended September 30, 2014 (Q2-2014) after fully recognizing market-tomarket provisions on investment portfolio

17

 Current & savings account (CASA) deposits increased by ` 8,073 crore (US$ 1.29
billion) in Q2-2014; year-on-year growth of 17% in CASA deposits
CASA ratio maintained at 43.3% at September 30, 2014
Net interest margin (NIM) increased to 3.31% in Q2-2014 compared to 3.00% in Q22014; domestic NIM at 3.65%
Total capital adequacy of 16.50% and Tier-1 capital adequacy of 11.33% as per Reserve
Bank of Indias guidelines on Basel III norms (17.21% and 12.04% including profits for
half year ended September 30, 2014 )

REVIEW OF LITERATURE

LITERATURE REVIEW

18

A new review by Tower group of 10 top US e- banking website saluted several aspects of
core online banking components. Group found that there is difference in terms of actual
functionality and usability. Among different banks and their services.
The UK's first home online banking services were set up by the Nottingham Building
Society (NBS) in 1983 ("History of the Nottingham". Retrieved on 2008-12-14). The
system used was based on the UK's Prestel system and used a computer, such as the BBC
Micro, or keyboard (Tan data Td1400) connected to the telephone system and television
set. The system (known as 'Home link') allowed on-line viewing of statements, bank
transfers and bill payments. In order to make bank transfers and bill payments, a written
instruction giving details of the intended recipient had to be sent to the NBS who set the
details up on the Home link system.
An American study conducted last year by Booz-Allen projects that by the year 2000, 16
million US households will be using Internet banking. While these numbers do not appear
to be significant as compared to the total population, each Internet user is projected to be
50-250% more profitable than the average banking customer. It is expected that these
Internet customers will be some of the banking system's most profitable customers
representing close to 30% of all retail banking profits. The study projects that by 1999,
1,500 banks will have Internet Web sites and at least 500 of these banks will be offering
full-fledged Internet banking services.
In 2001 Micro banker send detailed questionnaire to the leading vendors of internet
banking software27 companies responded with information on thirty programs the
aggregate outcome of the outcome was that almost all the companies have developed
functions for internet banking and have inbuilt feature to aid with one to one marketing on
the web

ICICI Bank
ICICI Bank Online
Banking Services provide the largest private bank in India right here at your desktops.
Banking becomes a pleasure as the transactions and services become instant with ICICI
19

Bank online Internet banking. The services provided are totally secure and unique. These
cover online account transactions and operations, credit card and account applications and
payments, share trading and investments through mutual funds, bill payments, statement
generation and a virtual demo of each service. See in brief in final report. Role of
customer when using e-banking
You can access ICICIBank.com only by using your User ID and Password. During the first
login attempt, it is mandatory to change both passwords - login and transaction which
would have been mailed to you by the bank.
If you forget your password, you will have written to us using the "Email Us" option. The
Bank will then issue a new password and send it to your mailing address as per our
records. Kindly check with your branch that this address is updated...
Make sure no one can see the account login name or password you are entering when you

log on to ICICIBank.com.
Logout of ICICIBank.com before moving on to other Websites.
Before leaving the PC please "close" the browser.
Do not write your ICICIBank.com login name or password anywhere.
Do not leave your login name and password such that someone sitting at your computer

could see them.

Never reveal your ICICIBank.com login name and password to anyone (no representative
of ICICI Bank will ever ask you for your ICICIBank.com password).
Notify ICICI Bank immediately if you notice any unusual account activity.
Keep all documents that include your account information in a secure location.
When you login you can view the date and time of your last log in.

Features offered by ICICI bank for internet banking

Balance enquiry and statement

Transfer fund online
Card to card fund transfer
Use debit card online
Prepaid mobile recharge
Subscribe for mobile banking
Link bank account to ATM
Lock / activate debit cards /ATM
Request a cheque book
20

 Stop payment

HDFC
Net Banking is HDFC Bank's Internet Banking service. Providing up-to-the-second
account information, Net Banking lets you manage your account from the comfort of your
mouse -anytime, anywhere.
Features offered by HDFC bank for internet banking
View account balances and statements
Transfer funds between accounts
Request stop payments
Pay bills
Create fixed deposit online
Order cheque books

USE OF E-BANKING IN INDIA FEOM LAST FEW YEARS

YEAR

%INCREASED

2007

2008

15

2009

17

2010

22

2011

35

2012

47
21

2013

59

2014

61

2015

63

Indian E-banking Scenario

As per the international report the banking transactions on a brick and mortar banking
costs around $ 1.1. While through ATM it costs around $ 0.27 and just 1 percent of over
the counter banking in case of Internet banking. Statistics such as these have woken the
Indian Banking Industry. Thus, the Indian banking system is seeing a fabulous change in
the quality of service provided by them. Technology is the root of this change, which is
implemented by the banks to win more business from customers. Almost all the private
sector banks are moving towards e-enabling their existing products. HDFC Bank and
ICICI Bank have taken a lead in introducing e-banking in India
Internet banking starts from migrating existing products to the net. This started initially
with simple functions such as getting information about interest rates, checking account
balances and computing loan eligibility. Then the services were extended to online bill
payment, transfer of funds between accounts and cash management services for corporate.
Recently, banks started setting up payment gateways for B2B and B2C transactions. This
is to facilitate payment for e-commerce transactions by directly debiting bank accounts or
through credit cards. Banks can earn a commission based income, on the transaction or
sale value resulting in higher other income. This could be more than the revenues they can
generate from credit card transactions.
Private sector banks have leveraged the Internet effectively in taking away the customers
from public sector banks and significantly increased their revenue potential. Internet
banking is just one manifestation of these banks technological capabilities. They have a
complete automation, an electronic customer database, real time transaction processing
capabilities and the latest technological platforms. Management of these banks is very
focused in using technology as a key competitive tool.

22

The capability of the management is also visible in terms of their profitability. Among the
private sector banks HDFC Bank and ICICI Bank have excellent returns on equity
compared to their peers in the industry.

These banks commenced operations few years and have negligible excess in terms of
branches and employees. Therefore unlike most other banks around the world, e-banking
is not an added cost for them. In fact it is expected to contribute significantly to their
revenues and profits in years to come.

Who offers what?

Citibank

See up-to-date account information

View transaction details
View account statement for up to 12 months
Order demand drafts to couriered free to over 200 locations
Order a cheque book
stop payments
Request a deposit
23

 Pay utility bills

E-mail queries.
ICICI Bank

Account information summary of account and transactions

Bills payment
Funds Transfer including third-party transfers
Requests for cheque books, stop payment, account opening,
Reporting loss of ATMs card
Online e-shopping payments
Communication with Account Manager
Personalized viewing of content updates personal finance, select articles one-commerce,
HDFC Bank

Real-time account information incl. transactions

Transfer money between accounts
Bill payment facility
Third party funds transfer within HDFC bank
Request for De, and Draft/Bankers Cheque
Stop payment requests
Opening fixed-deposit accounts
Sending messages to the bank via e-mail

Mediums of E-banking
VARIOUS PRODUCTS AND SERVICES
Electronic banking, also known electronic fund transfer (EFT), uses computer and
electronic technology as a substitute for checks and other paper transactions. EFT are
initiated through devices like cards or codes that let you, or those you authorize, access
your account. Many financial institutions use ATM or debit cards and Personal
Identification Numbers (PINs) for this purpose. Some use other forms of debit cards and
personal Identification Numbers (PINs) for this purpose. Some use other forms of debit
cards such as those that require, at the most, your signature or a scan. The federal
Electronic Fund Transfer Act (EFT Act) covers some electronic consumer transactions.
Following are the electronic medium by which services are generally provided by the
banks as a part of e-banking services.
24

Internet Banking
ATM (Automatic Teller Machine)
Phone Banking
Mobile Banking
Payment Cards (Debits/Credit Card)
All the above mediums provide services, which can be, also known as any time anywhere
banking. This facilitates the customer of the bank to operate their account from any
corner of the world, without visiting local or any subsidiary branch of their banks. Efforts
are made by the bank not only to provide the facility to the customer, but also to reduce the
operational cost of the bank by providing e-banking services. So with this, banks have to
employ less staff and still would be able to deliver service to the customer round the
corner.

1. Internet Banking
Net banking is a web-based service that enables the banks authorized customers to access
their account information. It allows the customers to log on to the banks website with the
help of banks issued identification and personal identification number (PIN). The banking
system verifies the user and provides access to the requested services, the range of
products and service offered by each bank on the internet differs widely in their content.
Most banks offer net banking as a value-added service. Net banking has also led to the
emergent of new banks, which operate only through the internet and do not exists
physically, Such banks are called virtual banks or Internet Only banks. A couple of
years ago, there was a belief even among bankers that customers opening new accounts
wanted the online banking facility, just to feel good and very few of them actually used
that services. Today, bankers believe that the trend from nice to have is changing to need
to have .after all it depends on how busy a person is. Services provided through Internet
Banking.

account information
E-cheques (Online Fund Transfer)
Bill Payment Service
Requests And Intimations
Demat Account share trading
account information
25

Account information Provides summary of all bank accounts. Allow transaction tracking
which enables retrieval of transaction details based on cheque number, transaction amount,
and date. Provide account statement and transaction reports used on user-defined criteria.
Customers can even download and print the statement of accounts.

E-Cheques ( Online Fund Transfer)

Customer can transfer funds: Transfer funds between accounts, even if they are in different
branches cities Customer can also transfer funds to any person having an account with the
same bank anytime, anywhere, using third party funds transfer option.
Banks Bill Pay is the easiest way to manage bills. A/c holder can pay their regular monthly
bills i.e. telephone, electricity, mobile phone, insurance etc. at anytime, anywhere for free.
Saves time and effort. Make bill payments at customers convenience form their home or
office. Lets a/c holders check their hill amount before it is debited form their account. No
debits to account without their knowledge. No more missed deadlines, no more loss of
interest a/c holder can schedule their bills in advance, avoid missing the bill deadlines as
well as earn extra interest on their money. Track payment history all payments to a biller
are stored automatically for future reference. No queuing up at collection centers or
writing cheque anymore. Just a few clicks and customers account will be debited for the
exact amount they ask.

Requests And Intimations

Can electronically submit a request for:
Cheque-book Stop payment instructions Opening a fixed deposit Opening a recurring
deposit Intimate for the loss of ATM card Register online for phone and mobile banking
Cheque status Online application for debit card Issue a DD or a Bankers cheque form
account at special rates. Just select the account to be debited form and give details of the
amount, location and beneficiary.
The demand draft will be couriered to a/c holder at their mailing address. Customers can
get their applications for issuance of Letters of Credit and Bank Guarantees processed
online Book your Railways Ticket Online.

26

Demat Account and Share Trading Demat Account

Demat is commonly used abbreviation of Dematerialization, which is a process whereby
securities like share, debentures are converted from the material (paper documents) into
electronic data and stored in the computer of an electronic Depository. A depository is a
security banks, where dematerialized physical securities are held in custody, and form
where they can be traded. This facilitates faster, risk-free and low cost settlement.

Share Trading
In share trading a customer can buy and sell securities online without stepping into a
brokers office. Once the share are dematerialized then the trading can be done from home
or office. As demat a/c are directly linked to the customers bank a/c, so there is no need to
write cheque for the payments or to fill up the slips to deposit the cheque. Amount for the
purchase and sale of securities is automatically debited or credited to their bank a/c. it also
brings the same convenience while investing in Mutual funds also Hassle free and
Paperless.

ATMs
Automated Teller Machines or 24-hour Tellers are electronic terminals that let you bank
almost anytime. To withdraw cash, make deposits, or transfer funds between accounts, you
generally insert an ATM card and enter your PIN. Some financial institution and ATM
owners charge a fee, particularly to consumers who dont have accounts with them or on
transactions at remote locations. Generally, ATMs must tell you they charge a fee and its
amount on or at the terminal screen before you complete the transaction. Check the rules
of our institution and ATMs you use to find out when or whether a fee is charged. It wont
be just if I start explaining what an ATM is. ATMs and cash dispensers are by far the
largest investment ever made in electronic self-service by financial institutions. Over US$
40 billion has been invested in simply buying these machines and many times that in
running them.
There are now over 1.1 million machines operating in over 140countries worldwide. The
banks are losing the cashiers checks, check cashing and even cash dispensing to the cstores and grocery stores. They are asleep at the switch and watching more transactions
walk away to convenience stores and supermarkets that provide 24 hour access and
27

integrated transactions. ATMs do provide a larger set of functions, such as check cashing,
ticket sales or money orders. We already know that cash dispensing as a dedicated function
is a sustainable applications, the question is whether that application can be incorporated
successfully into a more complex consumer product that offers multiple applications.
It is worth noting that, due to market saturation, overall ATM usage is increasing while
transaction volume on a per-ATM basis is now in decline.

Cash withdrawal:
Withdraw upto Rs.15,000/- per day from your account. A fast cash option provides the
facility of withdrawing prefixed amounts. Ultra Fast Cash option allows you to withdraw
Rs.3000/- in one shot.

Balance Enquiry:
Know your ledger balance and available balance

Mini Statement:
Get a printout of your last 8 transactions and your current balance.

Deposit Cash / Cheques :

Available at all full function ATMs. Customers can deposit both cash and cheques. / Cash
deposited in ATMs will be credited to the account on the same day (provided cash is
deposited before the clearing) and cheques are sent for clearing on the next working day.

Funds Transfer:
Transfer funds from one account to another linked account in the same branch.

PIN Changes
Change the Personal Identification Number (PIN) of ATM or Debit card.

Payments
28

The latest feature of our ATMs, this functionality can be used for payment of bills,
making donations to temples / trusts, buying internet packs, airtime recharges for prepaid
mobile phones and much more

Others
Request for a checkbook from our ATMs and our concerned branch will dispatch it such
that it reaches you within 10 working days.

ATM Advantages
24-hour access to cash You can withdraw up to Rs. 10,000/- per day on your ATM Card.
The fast cash option saves your time by providing the cash in denominations of Rs. 500/-

Balance inquiry
Your updated balance will appear on the screen and will also be printed on the transaction
slip.

Mini-statement request
Get details of the last 9 transactions on your account with the mini-statement, along with
your balance.

Cheque book request

Send us a request for a cheque book or account statement it will arrive at your doorstep.

Funds transfer
Transfer money from one of your accounts to another. Its easy, select the account from
which you want to transfer, then indicate the amount and the account to which you want it
transferred. Both accounts must be linked to your ATM card and customer ID. A maximum
of 5 saving and 5 Current accounts can be linked.

PIN change
29

You can conveniently charge your (PIN) given at the time of opening your account)
whenever you wish. Stay totally in control and ensure complete security for your ATM
Card.

Bill Pay
Pay your cellular, telephone and electricity bills using your ATM Card.

Anytime cash deposits

Your cash or cheques can be deposited into your account and the ATM will immediately
print a receipt for the same.

CREDIT CARD MARKET IN INDIA

The card industry, which is growing at the rate of 20% per annum, is flooded with cards
ranging from gold, silver, global, smart to secure, the list is endless. From just two players
in early 80s, the industry now houses over 10 major players vying for a major chunk of the
card pie. Currently four major bishops are ruling the card empire Citibank, Standard
Chartered Bank. HSBC and State Bank of India (SBI). The industry, which is catering to
over 3.8 million card users, is expected to double by the fiscal 2003. Accordingly to a
study conducted by State bank of India, Citibank is the dominant player, having issued 1.5
million cards so far. Stanch art follows way behind with 0.67 million while Hong Kong
Bank has 0.3 million credit card customers. Among the nationalized banks, SBI tops the
list with 0.28 million cards, followed by Blanks of Baroda at 0.22 million. The credit card
market in India, which started out in 1981, is on the verge of an unprecedented boom.
Between 1987 and 2000, the market has virtually grown to over 3.8 million cards with
almost 25-30% growth in new card holders. The latest innovation in credit cards is the
introduction of a magnetic slip in the card for use in withdrawing cash at the automatic
30

teller machine (ATM), of which about 60000 are already in existence in the world. In India
also ATMs have made late appearance, but now spreading very rapidly. As per statistics
published by RBI there are 1895 ATMs in India as at the end of the year 2014 but it is also
regularly increasing.

Advantages of Credit Card

The following are the advantages of credit cards:
The credit card holders need not to carry either travelers cheques or cash with them and
they are free from the security of cash
Traveling facilities are available in hotels, restaurants and airways to the cardholders.
Each card holder gets insurance facility which is up to one lakh on ordinary insurance.
It has become a status symbol. Railway tickets are available on special windows. Extra
charges are made by the railway and the cancellation of tickets is also allowed and the
amount is directly credited in the bank account of the card holder.
The business of the card holder individuals or institution has been because the
businessmen are assured for the payment as the transactions have been finalized on the
basis of credit cards.
Credit cards enhance the credit of banks and the credit of new customers and consumers is
enhanced.
Deposits in saving and current accounts increase.
Service charges on credit card increase the profitability of banks
31

Disadvantages of Credit Card as discussed below:

Credit card is a contact in advance and if the card holder does not make payment, the
recovery by bank becomes difficult.
Card holders spend in excess of their incomes and it poses the problem of recovery from
them.
Banks profitability is adversely affected due to increase in overdraft of cardholders and
difficulties in repayment by them.

FUTURE OF CREDIT CARDS

In India this facility has increased the business activities; middle and upper middle classes
are availing this facility. It has become popular and status symbol in our country hence the
prospects of credit cards are bright.

Smart Cards
A smartcard resembles a credit card except that it has a microchip embedded within it,
which allows the smartcard to store information and sometimes to even perform simple
calculations. Common smartcard chips typically holds about 8,000 bytes(characters) of
information, which enables the smartcard to perform a variety of functions such as
identification , storing bank account information an holding digital cash. A number of
smartcards are on the market today, and these are used in a wide range of applications.
Mondex has received a lot of recognition in the financial press, and several banks have
already conducted trials with its smartcard. Wells Fargo & Co., a major California bank
based in San Francisco, will issue Mondex smartcards to all of its online banking
customers in 2998, a number which could reach into the hundreds of thousands. Because
32

MasterCard International holds a 51% stake in Mondex, it could become the de facto
international standard for bank-issued smartcards.

Smart Cards The new Innovation

A smart card is a miniaturized personal computer (PC), which can be used for a dazzling
array of applications, and also as digital cash. It contains a micro processor, memory and
tailored software. The software security system used for these cards is almost as fool proof
as those used by nuclear establishments and leading international banks! Smart cards can
manage security procedures using passwords and state-of-the-art encryption techniques.
Further, identity traits such as digitized photos, signatures and finger prints being placed
on the card make it fraud-proof.

E-money
E-money may be broadly defined as an electronic store of monetary value on a technical
device used for making payments to undertakings other than the issuer on a technical
device used for making payments to undertakings other than the issuer on a technical
device used for making payments to undertakings other than the issuer without necessarily
involving bank accounts in the transaction, but acting as a prepaid bearer instrument
( European Central Bank, 1998)These products could be classified into two broad
categories viz.,
A) Pre-paid stored value card (sometimes called electronic purse) and
B) Pre-paid software based product that used computer networks such as
internet(sometimes referred to as digital cash or network money)The stored value card
scheme typically uses a microprocessor chip embedded in a plastic card while software
based scheme typically specialized software installed in a personal computer. The stored
value card could be of three types single-purpose card, closed-system or limited-purpose
33

card could be of three types single-purpose card, closed-system or limited-purpose card

and general-purpose or multi-purpose card.
The single-purpose card generally with a magnetic chip recording the amount of fund
there in is designed to facilitate only one type of transaction e.g. telephone calls, public
transportation, laundry, parking facilities etc. Here, the distinguishing point is that the
issuer and the service provider (acceptor) are identical for the cards. These cards are
expected to substitute coins and currency notes. It is important to note that the European
Central Bank (ECB) has exempted these single-purpose pre-paid cards from the purview
of their policy initiatives on e-money because of their smaller denominations as well as
limited risk exposure for customers and the financial system as a whole.

PHONE BANKING
Now your bank account is now just a phone call away. Through Phone Banking you
can:
Check your account balances.
Check the last 5 transactions in your account.
Enquire on the cheque status.
Have a mini statement faxed across to you.
Request for a cheque book / Account statement.
Enquire on your Fixed deposits / TDS.
Open a fixed deposit

34

 Request for Demand Draft / Managers Cheques.

Transfer funds amongst your linked accounts
Pay utility and HDFC Bank Credit Card bills.
Do a stop cheque payments.
Report loss of your ATM /Debit Card.
Product information.
Enquire on the interest / Exchange rates. Phone banking facility is available round the
clock, everyday, in Mumbai, Delhi, Chennai, Kolkata, Banglore, Hyderabad, Ahmadabad ,
Chandigarh and Pune .

E-age Advantages
Security
When you use the Phone Banking facilities, your transactions are completely secure.
When you open an account with us, you are given a unique Telephone Identification
Number (TIN), which is completely confidential.

Choose your language

You can choose between English and Hindi for guidance through the Interactive Voice
Response (IVR) menu of services, at the time of calling the bank.

Account derails/balance enquiry

35

Get up-to-the-second details of your Savings or Current Accounts and your fixed Deposits.
Get details of the last five transactions (on the IVR), which would be readout to you at the
touch of a button,. Whats more, you can even have a mini account statement of the last 9
transactions faxed to you.

Cheque book / account statement requests

Register a request for statement of accounts for the current period through the IVR and the
same will be mailed to you on the next working day.

Stop payment requests

Stop payment of a cheque, 24 hours a day. You have the facility to stop a single cheque or
a series of cheques.

Fixed Deposits
You can easily open a Fixed Deposit over the phone, by simply authorizing a transfer of
funds from your savings Account. The deposits can be opened in the names of the account
holders in the funding account. You may also book the Fixed Deposit in your name alone
in the funding account. You may also book the Fixed Deposit in your name alone and
maintain a sweep-in facility. You can also enquire about the details of your Fixed Deposit,
or tax deducted at Source, if any, using the Phone Banking service. This facility is
available only during Phone Banking hours.

Reporting of lost ATM / Debit Card

If you happen to lose your ATM/Debit card, call your local Phone banking number right
away. This facility is available 24 hours a day, 7 days a week.

Demand Drafts
You can now place a request for a Demand Draft or Managers Cheque worth up to Rs.
50,000/- per customer ID per day, on the phone. For HDFC Banked Preferred clients the
limit is Rs. 100,000/- per day. The draft or cheque will be sent to the address on our
records by courier on the next working day.

Fund transfers
36

If you hold multiple accounts with us, all you have to do is call in to transfer funds
between accounts, provided the same are linked to the same Cost ID number.
There is no fund transfer limit.

Talk to a Phone Banker

You can talk to a phone Banker for all the financial transactions and for any other account
related details over the phone.

E BANKING TRANSACTIONS
Since transactional websites typically enable the electronic exchange of confidential
customer information and the transfer of funds, services provided through these websites
expose a financial institution to higher risk than basic informational websites. Whole sale
e-banking systems typically expose financial institutions to the highest risk per
transaction, since commercial transactions usually involve larger dollar amounts. In
addition to the risk issues associated with informational websites, examiners reviewing
transactional e-banking services should consider the following issues:
Security controls for safeguarding customer information;
Authentication processes necessary to initially verify the identity of new customers and
authenticate existing customers who access e-banking services;
Liability for unauthorized transactions;
Losses from fraud if the institution fails to verify the identity of individuals or businesses
applying for new accounts or credit on-line;
Possible violations of laws or regulations pertaining to consumer privacy, anti-money
laundering, anti-terrorism, or the content, timing, or delivery of required consumer
disclosures; and
Negative public perception, customer dissatisfaction, and potential liability resulting from
failure to process third-party payments as directed or within specified time frames, lack of
availability of on-line services, or unauthorized access to confidential customer
information during transmission or storage.

E-BANKING COMPONENTS

37

E-banking systems can vary significantly in their configuration depending on a number of

factors. Organizations should choose their e-banking system configuration, including
outsourcing relationships, based on four factors:
Strategic objectives for e-banking;
Scope, scale, and complexity of equipment, systems, and activities;
Technology expertise; and
Security and internal control requirements. Organizations may choose to support their ebanking services internally. Alternatively, Banks can outsource any aspect of their ebanking systems to third parties.
The following entities could provide or host (i.e., allow applications to reside on their
servers) e banking-related services for Organizations:

Another financial institution,

Internet service provider,
Internet banking software vendor or processor,
Core banking vendor or processor,
Bill payment provider,
Credit bureau, and
Credit scoring company. E-banking systems rely on a number of common components or
processes.
The following list includes many of the potential components and processes seen in typical
Organizations:

Website design and hosting

Firewall configuration and management
Intrusion detection system or IDS (network and host-based),
Network administration
Security management
Internet banking server
E-commerce applications (e.g., bill payment, lending, brokerage)
Internal network servers
Core processing system
Programming support, and
Automated decision support systems.

38

These components work together to deliver e-banking services. Each component

represents a control point to consider. Through a combination of internal and outsourced
solutions, management has many alternatives when determining the overall system
configuration for the various components of an e-banking system. However, for the sake
of simplicity, this booklet presents only two basic variations. First, one or more technology
service providers can host the e-banking application and numerous network components as
illustrated in the following diagram. In this configuration, the institutions service provider
hosts the institutions website, Internet banking server, firewall, and intrusion detection
system. While the institution does not have to manage the daily administration of these
component systems, its management and board remain responsible for the content,

Second, the organization can host all or a large portion of its e-banking systems internally.
A typical configuration for in-house hosted, e-banking services is illustrated below. In this
case, a provider is not between the Internet access and the organizations.

39

Core processing system. Thus, the organization has day-to-day responsibility for system
administration.

E-Banking Support Services

In addition to traditional banking products and services, organizations can provide a
variety of services that have been designed or adapted to support e-commerce.
Management should understand these services and the risks they pose to the organization.
This section discusses some of the most common support services: web linking, account
aggregation, electronic authentication, website hosting, payments for e-commerce, and
wireless banking activities.

Web linkings
A large number of Organizations maintain sites on the World Wide Web. Some websites
are strictly informational, while others also offer customers the ability to perform financial
transactions, such as paying bills or transferring funds between accounts.

40

Virtually every website contains weblinks. A weblink is a word, phrase, or image on a

web page that contains coding that will transport the viewer to a different part of the
website or a completely different website by just clicking the mouse. While weblinks area
convenient and accepted tool in website design, their use can present certain risks.
Generally, the primary risk posed by weblinking is that viewers can become confused
about whose website they are viewing and who is responsible for the information,
products, and services available through that website. These risk management techniques
are for those institutions that develop and maintain their own websites, as well as
institutions that use third-party service providers for this function. The agencies have
issued guidance on weblinking that provides details on risks and risk management
techniques financial institutions should consider.

Account Aggregation
Account aggregation is a service that gathers information from many websites, presents
that information to the customer in a consolidated format, and, in some cases, may allow
the customer to initiate activity on the aggregated accounts. The information gathered or
aggregated can range from publicly available information to personal accounting
formation (e.g., credit card, brokerage, and banking data). Aggregation services can
improve customer convenience by avoiding multiple log-ins and providing access to tools
that help customers analyze and manage their various account port folios. Some
aggregators use the customer-provided user IDs and passwords to sign in as the customer.
Once the customers account is accessed, the aggregator copies the personal accounting
formation from the website for representation on the aggregators site (i.e., screen
scraping). Other aggregators use direct data-feed arrangements with website operators or
other firms to obtain the customers information. Generally, direct data feeds are thought
to provide greater legal protection to the aggregator than does screen scraping.
Organizations are involved in account aggregation both as aggregators and as aggregation
targets. Risk management issues examiners should consider when reviewing.

Aggregation Services Include

Protection of customer passwords and user IDs both those used to access the institutions
aggregation services and those the aggregator uses to retrieve customer information from

41

aggregated third parties to assure the confidentiality of customer information and to

prevent unauthorized activity.
Disclosure of potential customer liability if customers share their authentication
information (i.e., IDs and passwords) with third parties, and See the interagency guidance
titled Web linking: Identifying Risks and Risk Management Techniques issued.
Assurance of the accuracy and completeness of information retrieved from the aggregated
parties sites, including required disclosures. Additional information regarding
management of risks in aggregation services can be found in appendix.

Electronic Authentication
Verifying the identities of customers and authorizing e-banking activities are integral parts
of

e-banking financial services. Since traditional paper-based and in-person identity

authentication methods reduce the speed and efficiency of electronic transactions,

financial institutions have adopted alternative authentication methods, including

Passwords and personal identification numbers (PINs).

Digital certificates using a public key infrastructure (PKI).
Microchip-based devices such as smart cards or other types of tokens.
Database comparisons (e.g., fraud-screening applications), and
Biometric identifiers.
The authentication methods listed above vary in the level of security and reliability they
provide and in the cost and complexity of their underlying infrastructures. As such, the
choice of which technique(s) to use should be commensurate with the risks in the products
and services for which they control access.
Additional information on customer authentication techniques can be found in this booklet
under the heading Authenticating E-Banking Customers.The Electronic Signatures in
Global and National Commerce (E-Sign) Act establishes some uniform federal rules
concerning the legal status of electronic signatures and records in commercial and
consumer transactions so as to provide more legal certainty and promote the growth of
electronic commerce. The development of secure digital signatures continues to evolve
with some financial institutions either acting as the certification authority for digital
signatures or providing repository services for digital certificates.

Website Hosting
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Some organizations host websites for both themselves as well as for other businesses.
Organizations that host a business customers website usually store, or arrange for the
storage of, the electronic files that make up the website. These files are stored on one or
more servers that may be located on the hosting financial institutions premises. Website
hosting services require strong skills in networking, security, and programming. The
technology and software change rapidly. Institutions developing websites should monitor
the need to adopt new interoperability standards and protocols such as Extensible MarkUp Language (XML) to facilitate data exchange among the diverse population of Internet
users.

Payment for E-commerce

Many businesses accept various forms of electronic payments for their products and
services. Financial institutions play an important role in electronic payment systems by
creating and distributing a variety of electronic payment instruments, accepting a similar
variety of instruments, processing those payments, and participating in clearing and
settlement systems. However, increasingly, financial institutions are competing with third
parties to provide support services for e-commerce payment systems. Among the
electronic payments mechanisms that financial institutions provide for e-commerce are
automated clearing house (ACH) debits and credits through the Internet, electronic bill
payment and presentment, electronic checks, e-mail money, and electronic credit card
payments. Additional information on payments systems can be found in other sections of
the IT Hand book. Most organizations permit intra bank transfers between a customers
accounts as part of their basic transactional e-banking services. However, third-party
transfers with their heightened risk for fraud often require additional security
safeguards in the form of additional authentication and payment confirmation.

Bill Payment and Presentment

Bill payment services permit customers to electronically instruct their financial institution
to transfer funds to a businesss account at some future specified date. Customers can
make payments on a one-time or recurring basis, with fees typically assessed as a per
item or monthly charge. In response to the customers electronic payment instructions,
the financial institution (or its bill payment provider) generates an electronic transaction
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usually an automated clearing house (ACH) credit or mails a paper check to the business
on the customers behalf. To allow for the possibility of a paper-based transfer, financial
institutions typically advise customers to make payments effective 37 days before the
bills due date. Internet-based cash management is the commercial version of retail bill
payment. Business customers use the system to initiate third-party payments or to transfer
money between company accounts. Cash management services also include minimum
balance maintenance, recurring transfers between accounts and on-line account
reconciliation. Businesses typically require stronger controls, including the ability to
administer security and transaction controls among several users within the business Here
we discusses the front-end controls related to the initiation, storage, and transmission of
bill payment transactions prior to their entry into the industrys retail payment systems
(e.g., ACH, check processing, etc.). The extent of front-end operating controls directly
under the financial institutions control varies with the system configuration. Some
examples of typical configurations are listed below in order of increasing complexity,
along with potential control considerations.

DATA ANALYSIS
AND
INTERPRETATION
1. USERS OF E BANKING
TABLE
USERS

PERCENTAGE OF USERS

YES

65%

NO

35%

44

GRAPH

INTERPRETATION:
Based on above table most of the people are using Electronic Banking related matters,
Because all banks are provided to customers various facilities like E-Fund transfer, EMovie Ticketing, E-Cheques etc. So above table based on 65% of people are using these
type of facilities by provided by any National and International bank and various private
sectors banks. Remaining people are dont have aware of using these techniques because
they are uncivilized people.

2. NO. OF USERS OF THE BANK

TABLE
Various Banks

PERCENTAGE OF USERS

ICICI

20%

SBI

30%

SBH

20%

AXIS

10%

UNION

8%

HDFC

12%

GRAPH
45

INTERPRETATION:
Based on above table

most of the people are using Electronic Banking related matters,

Because all banks are provided to customers various facilities like E-Fund transfer, EMovie Ticketing, E-Cheques etc. So above table based on 35% (High) of have preferred
in SBI and remaining have 8% union Banks ( Low).

3. PREFERENCE FOR ONLINE BILL PAYMENT SERVICES

TABLE
USERS

PERCENTAGE OF USERS

YES

60%

NO

40%

GRAPH

46

INTERPRETATION:
Most of the people are paying all bills through Internet through using various banking
segments. Based on above table most of the people are using Electronic Banking related
matters, Because all banks are provided to customers various facilities like E-Fund
transfer, E-Movie Ticketing, E-Cheques etc. So above table based on 65% of people are
using these type of facilities by provided by any National and International bank and
various private sectors banks. Remaining people are dont have aware of using these
techniques because they are uncivilized people.

4 . PREFERENCE FOR ONLINE SHOPPING.

TABLE
USERS

PERCENTAGE OF USERS

YES

70%

NO

30%

GRAPH

47

INTERPRETATION:
Most of the people using Online Shopping Cards through Various banking segments.
These type of cards because all banks are provided to customers various facilities like EFund transfer, E-Movie Ticketing, E-Cheques etc. So above table based on 65% of people
are using these type of facilities by provided by any National and International bank and
various private sectors banks. Remaining people are dont have aware of using these
techniques because they are uncivilized people.

5. PREFERENCE FOR ONLINE FUND TRANSFAR.

TABLE
USERS

PERCENTAGE OF USERS

YES

35%

NO

65%

GRAPH

48

INTERPRETATION:
Most of the people not using online fund transfer through Various banking segments.
These these type of cards because all banks are provided to customers various facilities
like E-Fund transfer, E-Movie Ticketing, E-Cheques etc. So above table based on 35% of
people are using these type of facilities by provided by any National and International
bank and various private sectors banks. Remaining people are dont have aware of using
these techniques because they are uncivilized people.

6. SATISFIED CUSTOMERS
TABLE
USERS

PERCENTAGE OF USERS

YES

65%

NO

35%

GRAPH

49

INTERPRETATION:
Most of the customers satisfied by the online banking because time saving and easy
process.
According to the survey 65% of the customers satisfied by the online banking. remaing
35% people have do not know the facilities of the online services.

7. PERFERRED MODE OF PAYMENT (TO BANK)

TABLE
CHEQUE

50

CASH

25

E-BANKING

25

GRAPH

50

INTERPRETATION:
According to the survey of banking industry cheque services used by the customers is
50%, cash 25% and E-Banking 25%.

8. SPEND PER BILL FOR ONLINE BILL PAYMENT

TABLE

ABOVE RS 10

21

BETWEEN RS 5-10

11

BELOW RS 5

32
51

NOTING

36

GRAPH

INTERPRETATION:
According to ICICI bank survey online bill payment used y the customers in various
percentages. Below Rs 5 is used in high percentage according to the users

FINDINGS

1. In the users ratio of internet banking 65% of customers are using this service.
2. More banks are connecting to the any software co. to running the E-banking service. In
these services the Sbi banks is top in service of E-banking.
3. The services that are mostly used by maximum customers are transactions, online
trading, bill payment, shopping etc.

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4. The mode of the cash deposit in bank is for use to online truncation cash, cheque &
e-banking.
5. Different banks different charge for online service.

53

SUGGESTIONS

1. To prevent online banking from remaining customers to prompt this service through

advertising co.
2. After repairing this basic deficiency, banks must ensure that their services are
competitive.
3. Banks is not take more charge from their customers.

54

CONCLUSION

The basic objective of my research was to analyze the awareness among customers for
internet banking in INDIA. It gives direction to research tools, research types and
techniques. Although the findings reveal that people know about the services but still
many people are unaware and many of them are non users so the bank should by
promotion try to retain the customers. Banks should look forward to have some tie ups
with other financial institutions to increase the service base.

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BIBLIOGRAPHY
Book:E-banking in India
Banking service operation (ICFAI)
Indian Banking
Money & Banking

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

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