CHAPTER 1: INTRODUCTION

1.1 INTRODUCTION

HDFC Bank Limited is an Indian financial services company incorporated in August

1994. HDFC Bank is the fifth or sixth largest bank in India by assets and the first largest bank
by market capitalization as of November 1, 2012. The bank was promoted by the Housing
Development Finance Corporation, a premier housing finance company (set up in 1977) of
India.

Today" s finicky banking customers will settle for nothing less. The customer has come to
realize somewhat be latedly that he is the king. The customer" s choice of one entity over
another as his principal bank is determined by consideration service quality rather than any
other factor. He wants competitive loan rates but at the same time also wants his loan or
credit card application p processed in double quick time. He insists that he be promptly
informed of changes in deposit rates and service charges and he bristles with customary
rage" if his bank is slow to redress any grievance he may have. He cherishes the convenience
of impersonal net banking but during his occasional visits to the branch he also wants the
comfort of personalized human interactions and facilities that make his banking experience
pleasurable. In short he wants financial house that will more than just clear his cheque and
updates his passbook: he wants a bank that cares and provides great services.

So does HDFC bank meet these heightened expectations? What are the customers"
perceptions of service quality of the banks? Which dimension of service quality of HDFC
bank is performing well.

In the age of globalization, accomplishing the higher level of customer satisfaction is the
challenging task especially in the service sector. In order to face this challenging task, many
organizations have started to improve their service quality. Service quality is one of the
serious components in any service sector because service quality helps to maintain
competitive advantages in the market place. Therefore, service quality is the strategic tool to
reinforce competitive advantages and increase profitability in business. So many service

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sectors are using this strategic component to attract and retain customers. Hence, service is
determined through customer satisfaction and customer satisfaction is determined through
quality is customer loyalty. Similarly, in order to provide superior services to the clients, at
first service providers must understand how clients perceived and evaluated their services.
After that, service providers can assume clients are facilitated by various services provided by
service sectors.

Affinity between both service quality and customer satisfaction is highlighted in empirical
research. Therefore, relationship between customer satisfaction and service quality is very O
critical in service sector like banking. In case of banking sector, clients are attracted by high
quality services.

Moreover, advancement in technology helps banking sector to upgrade their service quality
(example: ATM,Online Banking, Mobile Banking, and Visa card). The point is that clients
are loyal to those products which have a greater valu as compared to those of competitors'.
Thus, banks can earn higher profit if they are one step ahead of their competitors in terms of
services provided by them. For this reason, every banking institution should focus on service
quality so as to satisfy customer and retain customer loyalty.

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 1.2 What is the customer satisfaction?

It is a measure of a customer's satisfaction (how pleased the customer is) with a service or
product received from an agency. Satisfaction does not only depend on the quality and type
of customer experience, but also on its expectations.

Definition of a customer:

● Someone who has mutual relationship with an agency and effected by an agency
● Require and depends on one or more products or services from an agency.

Consumers, service users or customers are usually referred to as personal services customers.
Clients can be groups or individuals. Organizations that are motivated to provide excellent
service to their customers gather feedback from consumers and work on delivering the best
customer experience. Customer-focused organizations can.

● Listen to the customers as they design advertisements determining their expectation.

● Focus on evaluating customer feedback and customer service activities and
performance measurement.

Why is it important?

It is necessary in the banking industry for several reasons:

● The existence of community service organization mainly depends on satisfaction of
consumer’s needs.
● Leaders in this sector are organizations that strive to exceed minimum standards and
customer expectations.
● Customers assess the quality of service delivery and help those sectors in shaping
service development.

It is important to measure customer satisfaction and obtain feedback on organizational

performance in accordance to improve the quality and continuous improvement of the
Services.

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 1.3 OBJECTIVES OF STUDY OF HDFC BANK

The major objectives of the present study are to know about financial strengths and
weaknesses HDFC BANK.

The main objectives of present study aimed as:

1. The essence of the study is that understand the capital structure of the HDFC bank.

2. The major objectives of resent study are to know about financial strengths and weakness of
HDFC BANK

3. To evaluate and analyze various facts of the financial performance of the company

4. To know the current market status of its shares and facevalue of shares

5. To understand the liquidity, profitability and efficiency positions of the company during
the study period

Secondary Objectives

1. To study the present financial system at HDFC BANK

2. To determine the Profitability, Liquidity Ratios.

3. To analyze the capital structure of the HDFC bank

4. To understand profile of the HDFC Bank

5. To summaries financial data in understandable format

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1.4 SCOPE OF THE STUDY

A study on customer satisfaction level regarding HDFC bank is study of customer

satisfaction level regarding various services provided by the HDFC bank. The HDFC bank
provides various utility services to their customers.
The purpose of this study is to analyze the satisfaction level of the customer towards the
services providing by the HDFC bank. The research covers the customer’s opinions on
banking services which will be helpful for further development and growth of banking
venture of HDFC bank. This research focuses on the level of customer satisfaction derived
from banking services of HDFC Bank.
Banking means accepting the deposits from the customers for lending to the needy and
extending the other services as to issue of dd etc nowadays after introduction of private
sector banks the banks have become a profit centre and the functions become changed
and now banks are doing the insurance and mutual funds also. but nationalised banks are
still service oriented in extending loans for Education loan, and rural development
activities.
A Bank is an organization which lends money to the horrowers for a purposeful task,
and provides a facility to deposit and withdraw money when needed and charge for it.

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1.5 INDUSTRY PROFILE

Banks are institutions that accept deposits from customers or the public to provide loans to
the poor and expand other SD services. Now the private sector banks are introduced and their
functions are changed. Private sector banks have become profit centers, insurance companies
and mutual funds. However, nationalized banks provide loans for rural development activities
such as education and agriculture. Therefore, they are always service-oriented.
Banks offer facilities for depositing and withdrawing money when needed. It provides a
safe place to save money and lends money to the borrower for the job well done.
The provide savings accounts, deposits and loans using these deposits.

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1.6 History:

The General Bank of India was established in the year 1786. Banks in Bengal and Hindustan
have since been established. In 1809, the East India Company was called the Presidential
Banks in 1843, when the bank of Mumbai and Bank of Madras were established as
independent banks in 1840. In 1920, these three banks emerged. Imperial Bank of Indi
launched and founded European shareholders and individual shareholders.
The first exclusive bank in India was the Allahabad Bank and was founded in 1965. The
Punjab National Bank Ltd. was founded in 1894 and is headquartered in Lahore. The Indian
Bank, Canara Bank, Indian Bank, Mysore Central Bank in India and Baroda Bank were
established between 1906 and 1913, in 1935 the Reserve Bank of India was established.
The growth at this phase was very slow and faced periodic failures between the years 1913
and 1948.
In 1949, the Indian Government proposed the Banking Companies Act to simplify the
functions and activities of commercial banks. This law was later amended to become the
Banking Regulations Act of 1949, in accordance with the amended Act of 1965. The Reserve
Bank of India is authorized with wide power to supervise the banks in India.
At that time the public had low confidence in the bank. The mobilization of deposits was very
slow in the wake. The postal service offered a better savings bank and was relatively safe.
Merchants also received more money.

After independence, the reform of the Indian banking sector by the government has reached
important milestones. In 1955, in the urban and rural areas the Imperial Bank of India was
nationalized through large scale banking facilities. The State Bank of India was created to
manage federal and provincial government banking across the country and served as a key
agent for RBI.On July 19, 1960, the seven banks constituting the subsidiaries of the State
Bank of India were nationalized. Former Indian Prime Minister Indira Gandhi has made
considerable efforts to nationalize the country's commercial banks.
Seven banks that continued the reform of the banking sector in 1980 were carried out during
the second stage of nationalization. In India, 80% of the banking sector belongs to the
government.

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To regulate the banking system in India the Indian government has taken the following steps:

● The decree implementing the Banking Act dates from 1949.

● The State Bank of India was nationalized in 1955.
● The State Bank of India subsidiary was nationalized in 1959.
● The coverage of insurance was extended to deposits until 1961.
● 14 major banks were nationalized in the year 1969.
● In 1971 credit guarantee companies were established.
● Local rural bank was created in 1975.
● Seven banks with more than 200 deposits were nationalized in 1980

After nationalization of banks, public sector agencies grew to about 800 percent of deposits,
and a substantial increase of 11,000 percent thereafter.Public banks have a lot of confidence
in sustainability.

At this point, there was an introduction to facilities in the banking sector with more products.
The committee was created in 1991 and was working on the liberalization of banking
practices under the chairmanship of Mr Narasimham.
Foreign banks and ATMs flood the country. More important than money over time, we have
implemented more convenient online and telephone banking. We strive to provide a
satisfactory service to our customers.
The Indian financial system is highly resilient. It is protected from crises caused by external
macroeconomic shocks, as has been the case for other East Asian countries. Indeed, they all
have flexible exchange rate, high foreign exchange, capital accounts but are not yet fully
convertible. Banks and their clients have limited exposure to currency risk.

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Indian Banking Industry

By 2010, the Bank of India is expected to have $ 1 trillion in assets because of its
phenomenal pace and growth. There are technological innovations to develop the banking
sector in India and develop in the economy and the middle class.
There are more than 320 million middle-class people in this country. Some factors that
promise continuous expansion of banks are raising incomes, increasing correlation with
economic growth, improved living standards and the economic situation.
It is more focused on expanding retail banks and rural banks during the IT revolution.
Stakeholders have more innovative ways to deliver new customer-focused financial products
and services. Banks have begun to pay more attention to mergers and acquisitions in order to
capitalize on economies of scale. Indian banking assets are expected to reach $ 1 trillion by
2010 and foreign capital inflows are expected to increase. The focus should be on securing a
small number of big players that can compete globally rather than securing a large number of
fragmented players.
Banking means accepting the deposits from the customers for lending to the needy and
extending the other services as to issue of dd etc nowadays after introduction of private
sector banks the banks have become a profit centre and the functions become changed
and now banks are doing the insurance and mutual funds also. but nationalised banks are
still service oriented in extending loans for Education loan, and rural development
activities.
A Bank is an organization which lends money to the horrowers for a purposeful task,
and provides a facility to deposit and withdraw money when needed and charge for it.

Promoter
1. Housing Development Finance Corporation Limited (Indirect Foreign Holding)
– No of shares 432,307,917 i.e. 19.7%.
2. HDFC Investments Limited (Indirect Foreign Holding)
– No of shares 150,000,000 i.e. 6.87%.
3. HDFC Holding Limited (Indirect Foreign Holding)
– No of shares 5,000 i.e. 0%.

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Mission Statement
Reposition the bank as the best Indian financial service group and take a strong global
commitment to customer satisfaction, shareholder and employee satisfaction. Also play a
leading role in the expansion & diversification of financial services with a focus on
development.

Vision Statement
● Through high sustained earnings per share, maximize the share holder value.
● Be a pioneer of development finance (housing) in the country.
● To be a banking institution with mutual cultural attention and dedication.
● A satisfying and excellent work environment offering continuous learning
opportunities.

Quality Policy
● Best customer service.
● Unbiased decisions in all dealings.
● Be ready to take on a challenge and be innovative.
● Team work.
● Honest and disciplined in the policy provided by the system

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 ADVANTAGES OF CUSTOMER SATISFACTION

1 Customer Satisfaction Is the Largest Competitive Advantage for Banks

The banking industry is a commoditized space. With everyone offering nearly the same
products and services without much room to compete on price, the experience customers
have with their banks is what gives one bank a competitive advantage over another. There are
two areas where banks can really look to stand out by delivering an incredible customer
experience.

2 Interpersonal Service
In our experience, the relationship between a bank and their customer has the biggest impact
on customer satisfaction. People want to be treated as if they matter. They want to form a
relationship with their bank, and they want their bank to make an effort to get to know them
instead of just pushing a product.

3 Consistent Omni-Channel Experience

In modern banking, there are many ways for customers to interact with a bank, including
online and mobile banking, at an ATM, and over the phone. One of the biggest things we’ve
seen is that a consistent experience across channels matters to customers. Whether it’s
transferring information quickly between channels or making sure deposit times are
consistent no matter how a deposit is made, these things matter. To provide a great customer
experience, banks need to deliver on the expectations their customers have in all channels.

4 Effective Problem-Solving
Customers are reasonable. They know that an occasional problem or mishap is possible. But
they also expect that their bank will make the situation right. This means fixing the problem
quickly and effectively.

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5 Mistakes that Lower Customer Satisfaction for Banks
With our extensive experience measuring customer satisfaction for banks, we’ve seen some
common mistakes that can really have a negative impact.

6 Treating a Call Center Like a Cost Center

Your call center is a safety net. A quality call center solution can really help to improve the
customer experience. But when corners are cut to reduce costs, your call center can do more
harm than good. By not giving your call center enough resources or outsourcing to the most
affordable solution, you could risk providing a poor customer experience.

7 Avoiding Interpersonal Communication

Though this isn’t as large a problem as it was in the recent past, banks that push customers
out of branches and lean on digital space to reduce costs are missing the interpersonal
communication and relationship building that is so important to banking customers. Having
quality digital solutions is convenient for customers, but you still have to be committed to
getting to know the people that bank with you.

DISADVANTAGES OF CUSTOMER SATISFACTION

1 Designing own and new financial products is very only and me amming for the bank

2 Customers nowadays prefer net banking to branch banking The banks that are show in
introducing technology-based products winding it difficult to retain the customers who wish
to apt for net banking

3 Customers are attracted towards other financial products ke mutual funds

4 Though banks investing heavily in technology, they are not able to explode to the fuxtent

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5 Major disadvantages are monitoring and follow up of huge volume of an accounts inducing
bands to spend heavy in human resource department.Long khung fandt font in their proper
follow-up can become NPA

COMPANY PROFILE

HDFC bank Ltd provides various financial products and services. It operates in three
segments: Retail Banking, Wholesale Banking, and Treasury. The Retail banking segment
provides various deposit products, including savings Accounts, current accounts, fixed
deposits, and demat accounts. It also offers Auto, personal, commercial vehicle, home.gold.
and educational loans; loans Against securities and property and health care finance Working
capital finance, construction equipment finance, and warehouse Receipt loans, as well as
credit cards, debit cards, depository, investment Advisory, bill payments, and transactional
services. In addition, this segment Sells third party financial products, such as mutual funds
and insurance, as well as distributes life and general insurance products through its tie-ups
with insurance companies and mutual fund houses. The wholesale banking Segment provides
loans, non-fund facilities, and transaction services to large Corporate, emerging corporate.
small and medium enterprise, supply chain, Public sector undertaking, central and state
government departments, and Institutional customers. It offers deposit and transaction
banking products, Supply chain financing, working capital and term finance, agricultural
loans, and funded non-funded treasury, and foreign exchange products. This segment's

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services include trade services, cash management, and money Market, custodial, tax
collection, and electronic banking In addition, it provides correspondent bank services to co-
operative banks, private banks, foreign banks, and regional rural banks. The Treasury
Services segment operates primarily in areas, such as foreign exchange, money market.
interest rate trading, and Equities. As of March 31, 2009 HDFC bank had a network of 1,142
branches And 3,295 automated teller machines in 528 cities in India. The company was
founded in 1994 and is based in Mumbai, India.

Mergers and acquisitions

HDFC Bank merged with Times Bank in February 2000. This was the first merger of two
private banks in the New Generation private sector banks category.[18] Times Bank was
established by Bennett, Coleman and Co. Ltd., commonly known as The Times Group,
India's largest media conglomerate

In 2008, Centurion Bank of Punjab (CBoP) was acquired by HDFC Bank. HDFC Bank's
board approved the acquisition of CBoP for ₹95.1 billion in one of the largest mergers in the
financial sector in India.

In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted by Tata Group, to
operate a Pan-India umbrella entity for retail payment systems, similar to National Payments
Corporation of India.

In September 2021, the bank partnered with Paytm to launch a range of credit cards powered
by the global card network Visa.

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 TOP fIVE REASON WHY CUSTOMER SATISFACTION
IMPORTANT

It is critical to comprehend the significance of client pleasure. Let's take a look at five crucial
aspects that influence client happiness.

1)Returning customers

Customers that are happy with your service are more inclined to buy from you again.
Customer satisfaction surveys are one simple method to find out. Ask them to rate their
degree of satisfaction on a scale of 1 to 10, and see who will be willing to buy from you
again. Customers who gave you a score of 7 or higher are satisfied and inclined to do
business with you again. A score of 6 or below is cause for concern; these customers are
unhappy with you and are a huge attrition risk.

2) Competition differentiator

Customer satisfaction is the key to making or breaking brands. In this competitive world of a
huge number of brands, customer satisfaction has to be focal to your customer strategy. No
amount of marketing campaigns and promotions will help you if your customers are not
satisfied. Brands that have low levels of Customer satisfaction are likely to perish in the
Future. Brands that have advocates are far likely to do better than brands that do not. You
will
have brand advocates when you have satisfied customers. So, as you see, it all begins and
ends with customer satisfaction.

3. Reduce customer churn

Contrary to popular belief, pricing is not the main reason for customer churn. Yup, you
guessed it right; it's customer service. We know of several brands that have a huge customer
base despite high prices. You can use customer satisfaction scores and inputs from your
CSAT Surveys to improve upon your customer service processes. Poor customer service
quality will hurt you and cost you customers in the long

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4. Decrease negative word of mouth

According to McKinsey's research, an unhappy customer will tell about their experience to
anywhere between 9-15 people. Considering the number of dissatisfied customers you may
have, that's a lot of negative press. This will directly impact your business revenue and brand
reputation. Repeat business rides on Customer satisfaction, and unhappy customers are
detrimental to your business. There will always be customer churn, but you do not want to
lose Customers based on bad word of mouth. Conducting regular CSAT surveys will help
you
measure customer satisfaction and identify factors that may be hampering your CSAT scores.

5. Retaining customers is cost effective

The cost to acquire new customers is 6-7 times more than retaining your current customers.
This puts into perspective how vital customer satisfaction is. Rather than spending huge
amounts of money on acquiring new customers, spend a fraction of it on improving your
existing processes and systems to retain customers. This will go a long way in saving costs
and growing your business revenue.

INTRODUCTION OF E-BANKING

Internet banking-Internet banking is changing the banking industry and is having the major
effects on banking relationships. Banking is now no longer confined to the branches were one
has to approach the branch in person, to withdraw cash or deposit a cheque or request a
statement of accounts. In true Internet banking, any inquiry or transaction is processed online
without any reference to the branch (anywhere banking) at any time. Providing Internet
banking is increasingly becoming a "need to have than a "nice to have service. The net

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banking, thus, now is more of a norm rather than an exception in many developed countries
due to the fact that it is the cheapest way of providing banking services.

WHAT IS E-BANKING?

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 Internet's widely
accessible public network. Accordingly, this booklet begins with a discussion of the two
primary types of Internet websites: informational and transactional

Traditional banks offer many services to their customers, including accepting customer
money deposits, providing various banking services to customers, and making loans to
individuals and companies. Compared with traditional channels of offering banking services
through physical branches, e-banking uses the Internet to deliver traditional banking services
to their customers, such as opening accounts, transferring funds, and electronic bill payment.
E-banking can be offered in two main ways First, an existing bank with physical offices can
also establish an online site and offer e-banking services to its customers in addition to the
regular channel. For example, Citibank is a leader in e-banking, offering walk-in, face-to-face
banking at its branches throughout many parts of the world as well as e-banking services
through the World Wide Web. Citibank customers can access their bank accounts through the
Internet, and in addition to the core e-banking services such as account balance inquiry, funds
transfor, and electronic bill payment, Citibank also provides premium services including
financial calculators, online stock quotes, brokerage services, and insurance.
E-banking from banks like Citibank complements those banks' physical presence. Generally,
e-banking is provided without extra cost to customers. Customers are attracted by the
convenience of e-banking through the Internet, and in turn, banks can operate more

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efficiently when customers perform transactions by themselves rather than going to a branch
and dealing with a branch representative.

E-banking services are delivered to customers through the Internet and the web using
Hypertext Markup Language (HTML). In order to use e-banking services, customers need
Internet access and web browser software. Multimedia information in HTML format from
online banks can be displayed in web browsers. The heart of the e-banking application is the
computer system, which includes web servers, database management systems, and web
application programs that can generate dynamic HTML pages.

One of the main concerns of e-banking is security. Without great confidence in security,
customers are unwilling to use a public network, such as the Internet, to view their financial
information online and conduct financial transactions. Some of the security threats include
invasion of individuals privacy and theft of confidential information. Banks with e-banking
service offer several methods to ensure a high level of security: (1) identification and
authentication, (2) encryption, and (3) firewalls. First, the identification of an online bank
takes the form of a known Uniform Resource Locator (URL) or Internet address, while a
customer is generally identified by his or her login ID and password to ensure only
authenticated customers can access their accounts.

Second, messages between customers and online banks are all encrypted so that a hacker
cannot view the message even if the message is intercepted over the Internet. The particular
encryption standard adopted by most browsers is called Secure Socket Layer (SSL). It is built
in the web browser program and users do not have to take any extra steps to set up the
program. Third, banks have built firewalls, which are software or hardware barriers between
the corporate network and the external Internet, to protect the servers and bank databases
from outside intruders. For example, Wells Fargo Bank connected to the Internet only after it
had installed a firewall and made sure the firewall was sufficiently impenetrable.

HISTORY OF E- BANKING:

On October 1, 2000, the electronic signatures bill took effect, recognizing documents signed

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online as legal. Some banks plan to begin using electronic checks as soon as they can work
out
various security measures.

The range of e-banking services is likely to increase in the future. Some banks plan
to introduce electronic money and electronic checks. Electronic money can be stored in
computers or smart cards and consumers can use the electronic money to purchase. small
value items over the Internet. Electronic checks will look similar to paper checks, but they
can be sent from buyers to sellers over the Internet, electronically endorsed by the seller, and
forwarded to the seller's bank for electronic collection from the buyer's bank. Further, banks
seek to offer their customers more products and services such as insurance, mortgage, etc.

NEED FOR E-BANKING:

One has to approach the branch in person, to withdraw cash or deposit a cheque or request a
statement of accounts in true Internet banking, any inquiry or transaction is processed online
without any reference to the branch (anywhere banking) at any time. Providing Internet
banking is increasingly becoming a "need to have" than a "nice to have" service. The net
banking, thus, now is more of a norm rather than an exception in many developed countries
due to the fact that it is the cheapest way of providing banking services. Banks have
traditionally been in the forefront of harnessing technology to improve their products,
services and efficiency. They have, over a long time, been using electronic and
telecommunication networks for delivering a wide range of value added products and
services.
The delivery channels include direct dial up connections, private networks, public networks
etc. and the devices include telephone, Personal Computers including the Automated Teller
Machines, etc. With the popularity of PCs, easy access to internet and World Wide Web
(WWW), banks increasingly use Internet 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.
More and more people are using electronic banking products and services because large
section of the banks future customer base will be made up of computer Literate customer, the

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banks must be able to offer these customer products and services that allow them to do their
banking by electronic means. If they fail to do this will simpty, not survive. New products
and services are emerging that are set to change the way we look at money and the monetary
system.

FEATURES OF E-BANKING:

● E-Banking provide exceptional rates on Savings, CDs, and IRAs

● Checking with no monthly fee, free bill payment and rebates on ATM

● credit cards with low rates

● Easy online applications for

● all accounts, including

● personal

● mortgages

● 24 hour account access > It provides Quality customer service with personal
attention

● It provides the quick services to their customers.

● Enables transfer of funds from one place to another(banks).

● Exchange of statistics information amongst banks. > Enables foreign

exchange operations.

● Inter-bank applications like settlement of funds between banks.

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● Provides facilities like demat operation, ATM operation, online banking.

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 BENEFITS OF E-BANKING:

For Banks:

Price In the long run a bank can save on money by not paying for tellers or for managing
branches. Plus, it's cheaper to make transactions over the Internet. Customer Base- The
Internet allows banks to reach a whole new market and a well off one too, because there are
no geographic boundaries with the Internet. The Internet also provides a level playing field
for small banks who want to add to their customer base, Efficiency- Banks can become more
efficient than they already are by providing Internet access for their customers. The Internet
provides the bank with an almost paper less system.
Customer Service and Satisfaction Banking on the Internet not only allow the customer to
have a full range of services available to them but it also allows them some services not
offered at any of the branches. The person does not have to go to a branch where that service
may or may not be offer. A person can print of information, forms, and applications via the
Internet and be able to search for information efficiently instead of waiting in line and asking
a teller. With more better and faster options a bank will surly be able to create better customer
relations and satisfaction
Image- A bank seems more state of the art to a customer if they offer Internet access. A
person may not want to use Internet banking but having the service available gives a person
the feeling that their bank is on the cutting image.

USAGE OF E-BANKING:

The rise in the e-commerce and the use of Internet in its facilitation along with the
enhanced online security of transactions and sensitive information has been the core
reason for the penetration of online banking in everyday life. According to the latest official
figures from the office of National Statistics (ONS 2007) indicate that subscriptions to the
internet has grown more than 50% from 25 million in 2005 to 45 million in 2007 in India. It
has also been estimated that 60% of the population in India use internet in their daily lives.
The fundamental shift towards the involvement of the customer in the financial service
provision with the help of the technology especially internet has helped to reduce the costs of

22
financial institutions as well as helped client to use the service at anytime and from virtually
anywhere with access to an internet connection. The use of electronic banking has removed
personnel that facilitate the transactions and has placed additional responsibilities on the
customers to transact with the service. The computerization of the banking operations has
made maximum impact ontInternal Accounting System.
• Customer service
• Diversification of system

Types of E-Banking

The common assumption is that Internet banking is the only method of on-line banking.
However, this is not strictly the case, as several types of service are currently available:
● PC Banking - The forerunner to Internet banking has been around since the late
1980's and is still widely used today. Individual banks provide software which is
loaded on to an SME's office computer. The SME can then access their bank account
via a modem and telephone link to the bank. Access is not necessarily via the Internet.
● Internet Banking - Using a Web browser, a user can access their account, once
the bank's application server has validated the user's identity.
● Digital TV Banking- Using the standard digital reception equipment (set top box and
remote control), users can access their bank account. Abbey National and HSBC
services are available via Digital TV providers. One of its main selling points is that
no account details are transmitted via the World Wide Web:
● Text Phone Banking - HSBC have introduced this service to allow customers.
with text phones to check their balance, pay bills and transfer money.

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ADVANTAGES OF E-BANKING:

• Convenience. Unlike your corner bank, online banking sites never close; they're available
24 hours a day, seven days a wee k, and they're only a mouse click away. With pressures on
time and longer travelling periods, more and more people find it tiresome waiting in queues.
People want flexibility, and Internet banking offers just that
Ubiquity If you're out of state or even out of the country when a money problem arises, you
can log on instantly to your online bank and take care of business, 2417
• Transaction speed - Online bank sites generally execute and confirm transactions
at or quicker than ATM processing speeds.
• Efficiency- You can access and manage all of your bank accounts, including IRA's, CDs,
even securities, from one secure site,
• Effectiveness. Many online banking sites now offer sophisticated tools, including account
aggregation, stock quotes, rate alert and portfolio managing program to help you manage all
of your assets more effectively. Most are also compatible with money managing programs
such as quicken and Microsoft money.
Cheaper alternative With increasing competition, it seems to be the cost factor that is driving
banks to offer the facility. The Internet is still a very cheap alternative to opening a physical
branch, and most of the push seems to be coming from the supply side. The costs of a
banking service through the Internet form a traction of costs through conventional methods.
From snob value to necessity:- 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 the services. Today, bankers believe that the trend from
'nice to have' is changing to need to have. The "snob value of banking with an organization
that could offer service on the Internet has given way to a genuine necessity, he feels. "It all
depends on how busy a person is."

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 DISADVANTAGES OF INTERNET BANKING:

● Start-up may take time -loorder to register for your bank's online program, you will
probably have to provide ID and sign a form at a bank branch. If you and your spouse wish to
view and manage their assets together online, one of you may have to sign a durable power of
attomey before the bank will display all of your holdings together.
● Learning curves Banking sites can be difficult to navigate at first. Plan to invest
some time and or read the tutorials in order to become comfortable in your virtual
lobby. Bank site changes- Even the largest banks periodically upgrade their online
programs,adding new features in unfamiliar places. In some cases, you may
have to re-enter account information.

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 CHAPTER-2. CONCEPTUAL BACKGROUND & LITERATURE
REVIEW

2.1 THEORETICAL BACKGROUND OF THE STUDY

Customer satisfaction is a measure of a customer's satisfaction (how pleased the customer is)
with a service or product received from an agency. Satisfaction does not only depend on the
quality and type of customer experience, but also on the customer’s expectations.

A customer is defined as someone who has a mutual relationship with an agency and effected
by an agency. Customers require and depend on one or more of their products or services
from an agency

Consumers, service users or customers are usually referred to as personal services customers.
Clients can be groups or individuals. Organizations that are motivated to provide excellent
service to their customers gather feedback from consumers as they plan and value service
delivery. A customer-centric organization listens to the expectations of its customers when
designing ads. It also appreciates customer feedback and focuses on providing customer
service and measuring performance.

Features of Customer Satisfaction

Customer satisfaction is very crucial for the growth of any business. For the success of all the
elements in the business the relationship between a business and its customers is important.
Customer satisfaction is necessary for the group of the company and it is crucial to provide a
favorable experience to increase the likelihood of gaining more customers.

Some of the features of customer satisfaction are the following:

Relationship between customer and business

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Good quality customer satisfaction is very necessary to build a relationship between a
business and a customer. By creating a quality relationship continuously, customers will
continue to utilize business services and products and there will be regular business. Courtesy
and respect is gained from the customers through good communication. A customer survey
will help the customer service representative in understanding a customer in a better way
which creates a positive relationship between both parties. Once the product is delivered to
the customer a follow up with them will help in the likelihood of repeat business. This will
indicate the purchaser that the company cares about customer satisfaction.

Factors influencing customer satisfaction

Accessibility

The company needs to ensure that customer doesn’t have any barriers and frication while
they are accessing the products. Customers must have effective access to products and
services.
Making sure that the customer could reach the company and obtain good services easily.
Always being available to assist the customer to make a purchase decision or to fulfill a
customer query.

Navigation

One of the simple and straightforward process is navigating and browsing the company store.
By helping the customers in identifying suitable products quickly and providing the users
with what they want with an effective keyword search or filters with an integrating solution is
one of the key foundation of a company. There will be repeated sales when the website is
easy to navigate. There will be loss of potential customers when the website is difficult to
navigate as it lead to customer frustration.

Page load speed

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One of the important factors is page load speed because customer will move on to another
store if the company website is slow. Therefore the faster the website loads, happier the
visitors. Shoppers who experience a slow website is less likely to return to the site and buy
products also they would tell a friend about the poor online shopping experience. This will
lead to decrease in visitors and customers.

Language

Language is another key factor because customer won’t have a good experience if the
company doesn’t speak their preferred language. It is pivotal for the company’s business to
speak to the customer in their preferred language. The company should avoid confusion so
they should use more user-friendly language to connect well with customers. There will be no
great customer satisfaction without great communication.

Convenience

This is another key factor of a positive customer experience. This influences on where to go,
with whom to engage, how customers make decisions about what services to use and what
services to buy.

There are 4 key variables in convenience:-

Benefit Convenience: What are the benefits the customer receives at a particular company?

Decision Convenience: How to decide what to shop at the store quickly and easily?

Access Convenience: How easy accessible is your store?

Transaction Convinces: How fast can the customer complete the whole payment?

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Ways to find out customer satisfaction

Once the customer has made a purchase or received a service from the company then the
company tends to shop a customer satisfaction survey which is also known as a
questionnaire. To measure the customer satisfaction there are five different situations and
each of these serves a different purpose. Therefore asking the right question is very
important.

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1.Nirmaljeet Virk and Prabhjot Kaur Mahal (2012) :
This paper attempts to make a comparative analysis of level of customer pride in the
direction of services offered by private and public region banks. The study has been carried
out in Chandigarh city. A sample of 160 customers has been selected through questionnaire
method. The statistical test are carried out at 5% and 1% degree of large the main statistical
equipment are used. This study shows that the manager of public bank maintaining a
relationship for winning their client’s satisfaction.

2.Keyur M. Nayak * Poonam P. Yadav (2014):

Researchers want to explain about customer satisfaction in HDFC bank with ATM. In this
paper both sources (primary and secondary) used and data were collected through
questionnaire from 200 respondents at Vapi region. This study is based on descriptive
research. The purpose of study is to analysed satisfaction level of customers using ATM in
HDFC bank. The paper concluded the few clients are satisfied with service quality and
dissatisfied with location of ATM.

3.Rajgopal Subashini and Velmurugan Gopalasamy(2016):

The study explained the concept of customer satisfaction in banking sector. These days all
non-public and public banks are play critical role in banking and offering lot of middle
banking services to all their rural and urban customers to carry on their loyalty, retention. But
few banks were observed that not providing importance to their clients. This paper is
descriptive in nature and data were collected from websites, journal and magazines.

4.Anis Ali and L.S. Bisht(2018):

The researchers tries to find out the level of satisfaction of clients of private and public sector
banks. The objective of the study is to identify the factors affecting the customer satisfaction
and reason of dissatisfaction in both banks. The primary data were collected from the clients
of both banks. It is observed by researchers that clients are happy with the services offered by
banks but there are some reasons for dissatisfaction like employee’s behaviour and service
quality provided by public banks. It is concluded that public banks should focus on upgrading
the level of satisfaction.

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4. Dutta K. and Dutta A. (2009)
Investigated the perception of expectation of customers across all the banks in India. This
study showed that customers are most satisfied with the services of foreign banks followed by
private and public banks. This study suggested that Indian public banks should improve
their banking services.

5.Uppal R.K. (2010)

Conducted studies on customer complaints and this research showed that excellent customer
service and customer satisfaction help to sustain business growth. Furthermore it showed that
customer complaints are continuously increasing in the public sector banks adversely
affecting Customers' satisfaction and performance.This research also suggested that
establishing a customer care center in all banks would help solve customer complaint on a
priority basis.

6.Naveen Kumar and V.K. Gangal (2011)

examined customer satisfaction in new generation banks showing customer expectations
increasing rapidly in the banking industry of India. New customers looked for the best
services at a reasonable price. The result revealed that the majority of Indian banks were not
very diversified in terms of the product and services they offer. Further, it suggests that, in
the competitive banking industry, banks have to implement a strategic focus on customer
satisfaction for retaining as many customers as possible.

7.Edwin M. & Fathima S. (2011)

conducted a study on the impact of service quality and customer satisfaction in commercial
banks. This study shows that there is a close link between the customers' perception on the
service quality factor and customer satisfaction. It further showed that the impact of the
service quality factor on customer satisfaction is unique. It brought the suggestion that bank
managers have to formulate appropriate marketing strategies to satisfy their customers.

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8.Nirmaljeet Virk and Prabhjot Kaur Mahal (2012)
Carried out a study on customer satisfaction in public and private banks of India. Private bank
managers maintain better personal relationships with customers than the public bank
managers and this factor determines the customers' satisfaction to a large extent.

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 CHAPTER-2
OBJECTIVE , LIMITATIONS AND
RESEARCH AND METHODOLOGY

33
 OBJECTIVES OF THE STUDY

1 Objectives

● To study and analyze what customer think about digital banking.

● To study the shift of HDFC bank from traditional to digital banking.

● To study the challenges faced by HDFC Bank in adoption of digital

technology in banking

● . To understand the response, views and understanding of the

customer
perception in digital era.

● To find out the underlying factors of customer perception towards

digital banking.

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