CHAPTER -1
INTRODUCTION
INTRODUCTION
This chapter deals with the introductory framework of the research. This chapter talks about the concept of E Banking services of banking industry in India, profiles of banks under the study, and also about the objectives, scope, research methodology and the hypotheses framed and adopted for the research study.
Overview:
The Indian banking sector has emerged as one of the strongest drivers of India’s economic growth. The Indian banking industry (US$ 1.22 trillion) has made outstanding advancement in last few years, even during the times when the rest of the world was struggling with financial meltdown. State Bank Of India is the largest nationalized Bank in the country in terms of Branch Network, Total Business, Advances, Operating Profit and Low Cost CASA Deposits. The ICICI is amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI’s liberalization of the Indian Banking Industry in 1994.
This chapter provides brief information about the E Banking services of the SBI and ICICI bank .Along with it, the chapter includes the objectives and methodology which will be used in this study.

E-banking:-
Internet banking (or E-banking) means any user with a personal computer and a browser can get connected to his banks website to perform any of the virtual banking functions. In Internet banking system the bank has a centralized database that is web-enabled. Internet banking is the term used for new age banking system. Internet banking is also called as online banking and it is an outgrowth of PC banking. Internet banking uses the internet as the delivery channel by which to conduct banking activity, for example, transferring funds, paying bills, viewing checking and savings account balances, paying mortgages and purchasing financial instruments and certificates of deposits. Internet banking is a result of explored possibility to use internet application in one of the various domains of commerce. It is difficult to infer whether the internet tool has been applied for convenience of bankers or for the customers’ convenience. But ultimately it contributes in increasing the efficiency of the banking operation as well providing more convenience to customers. Without even interacting with the bankers, customers transact from one corner of the country to another corner. There are many advantages of online Banking. It is convenient, it isn’t bound by operational timings, there are no geographical barriers and the services can be offered at a minuscule cost (IAMAI’s, 2006). Electronic banking has experienced explosive growth and has transformed traditional practices in banking.
In its very basic form, e-banking can mea mean the provision of information about a bank and its services via a home page on the World Wide Web (WWW). More sophisticated e-banking services provide customer access to accounts, the ability to move their money between different accounts, and making payments or applying for loans via e-Channels. The term e-banking will be used in this book to describe the latter type of provision of services by an organization to its customers. Such customers may be either an individual or another business. To understand the electronic distribution of goods and services, the work of Report and Sviokla (1994; 1995) is a good starting point. They highlight the differences between the physical market place and the virtual market place, which they describe as an information-defined arena. In the context of e-banking, electronic delivery of services means a customer conducting transactions using online electronic channels such as the Internet? Many banks and other organizations are eager to use this channel to deliver their services because of its relatively lower delivery cost, higher sales and potential for offering greater convenience for customers. But this medium offers many more benefits, which will be discussed in the next section. A large number of organizations from within and outside the financial sector are currently offering e-banking which include delivering services using Wireless Application Protocol (WAP) phones and Interactive Television. Many people see the development of e-Banking as a revolutionary development, but, broadly speaking, e-banking could be seen as another step in banking evolution. Just like ATMs, it gives consumers another medium for conducting their banking. The fears that this channel will completely replace existing channels may not be realistic, and experience so far shows that the future is a mixture of ?clicks (e-banking) and mortar (branches)?. Although start up costs for an internet banking channel can be high, it can quickly become profitable once a critical mass is achieved.

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Online Banking
PC Banking

Telephone Banking

Internet Banking

E-Banking
Mobile Banking

Other Channels
E-Banking Services
EVOLUTION OF E-BANKING
There have been significant developments in the e-financial services sector in the past 30 years. According to Devlin (1995), until the early 1970s functional demarcation was predominant with many regulatory restrictions imposed. One main consequence of this was limited competition both domestically and internationally. As a result there was heavy reliance on traditional branch based delivery of financial services and little pressure for change. This changed gradually with deregulation of the in-E-Banking Management IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited industry during 1980s and 1990s, whilst during this time, the increasingly important role of information and communication technologies brought stiffer competition and pressure for a faster pace of change. The Internet is a relatively new channel for delivering banking services.

INTERNET BANKING VS. TRADITIONAL BANKING
The basic difference between Internet banking and traditional banking is that in traditional banking the customer has to visit the branch in person for the basic banking needs viz. withdrawal or deposit of cash, transfer of funds, statement of accounts, etc. In Internet banking, on the other hand, these operations can be performed through the PCs without physically visiting the bank branch. It is a win-win solution both for customer and the bank. The customer is not put to inconvenience of traveling, and the time so saved can be effectively utilized in other productive ways, whereas the bank earns by having lower overheads, establishments, premises and maintenance costs, in turn resulting into reduced per transaction cost. The greatest advantage of Internet banking is that it enables a customer to perform basic banking transactions through PC or Laptop, located anywhere in the world. Through the internet, customer accesses the banks website for viewing the account details or performing the basic banking transactions.
The other major advantages emerging out of Internet banking are as follows:
1. The customer can perform basic banking transactions, round the clock.
2. No personal visit to the branch is required.
3. One can access and operate one’s account from anywhere in the world.
4. The extensive, geographically divergent, traditional brick and mortar structure of the branch need not be there
5. The requirement of staff at branches gets optimized.
6. Easy, convenient, efficient and speedy banking services both for the bank and the customer. 7
7. Transaction is automatically reconciled and posted in all required data tables, thus reducing the workload.

MECHANICS OF INTERNET BANKING
The basic steps involved in completing transactions through Internet banking are extremely simple and are available in a user-friendly environment. One does not necessarily need to possess detailed computer knowledge to complete transactions through internet banking. The availability of a user-friendly demo version of the site as well as on-line help means that even first time users are able to use the facility. The entire mechanism involved in Internet banking is outlined below:
1. Access the Bank’s website
2. Click on the option which provides Internet Banking
3. Enter the User-ID, Password/PIN
4. Perform the requisite transactions
5. Logout
SERVICES
Internet banking service offers banking services on-line with the same personal effort that is received at the branch. On-line request are processed by a proactive team of personal bankers adhering to service quality standards.
Services offered include the following:
1. Sending in request for a cheque book from the convenience of home
2. Viewing accounting statements on-line
3. Notification of change of address so as to update the records
4. Requesting for a draft on-line to be couriered at the mailing address specified by the customer
5. Transferring funds between one accounts of the customer to another account of the same customer.
6. Viewing details of past 3 months transactions Customer
7. Updating of foreign exchange currency rates
8. Intimating on-line about a stop payment
9. Notification of lost/stolen ATM card
The internet banking service adds more value to NRIs who can view their balances online and also effect fund transfer, just at the click of a mouse. Moreover, Internet banking has no time zones and is accessible round the clock without restricting it to any geographical boundary.

DRAWBACKS OF INTERNET BANKING
Despite the fact Internet banking has come to revolutionize the whole way the banking is transacted in modern times, it is not free from criticism. Following are some of the drawbacks of Internet banking:
1. Needs a Computer
In order to use the Internet banking services, the user needs a computer and time to log on to the website of the bank. This means that the target clientele is restricted to those who have a home PC or can access the net through the office or cyber cafes. The customer has to pay every time to check the balance. This can be done free at an ATM.

2. Restricted Use
Another drawback of Internet banking is that it is not possible that all transactions can be carried out electronically. Many deposits and some withdrawals require the use of postal services, which can be slow and reliable even in developed economies.
3. Unreliable Communication Facility
The use of Internet banking requires the use of uninterrupted telecommunication facility. Where phone connections are not perfect and where on a home PC the modem often gets disconnected, frequent and tedious log-on becomes necessary.
4. Slow Browsing
Often it becomes frustrating to browse the Internet to be able to access he host of financial products that are made available in the website of the bank. Navigating around websites on home computers is often slow and frustrating. Pages take inordinately long time to load and, as Internet users have a particularly low irritation threshold; a few frustrated attempts could put the user off, quite seriously.

5. Lack of Trust
The use of Internet banking services depend much on the trust reposed by the customers of a bank on the Internet banking initiative of the bank. It therefore becomes an imperative that Internet start-ups gain the trust of depositors before they will make deposits. Customers may get less protection that with established banks.
6. Absence of Validity
Absence of necessary legal framework for recognizing the validity of banking transactions is another impediment for the Internet banking.

7. Safety Problem
Security threats on the Internet leads to perception of Internet banking as an unsafe channel. This dissuades the customers in making popular use of the Internet banking It is to be noted that most of the problems mentioned above are in the nature of teething problems and bankers are quite alive to them and it is expected that these would be eliminated over period of time.

INTERNET BANKING – MAJOR ISSUES

There is a fear that in banking and in any other industry, the Internet may destroy basic business pricing models. At the same time, it also opens up abundant opportunities. The major issues relating to the use of Internet in the realm of banking and financial services are discussed below:
1. Sustainability
The internet banking creates perfect market conditions where customers have access to more information and can more readily compare rates and financial products offerings. This would pose considerable problems for banks as it would be difficult for them to differentiate quality of customer service pricing and reliability through internet channels. This would ultimately affect the banks sustainability as regards profit margins.

2. No Entry Barriers
Internet banking has no entry barriers. This encourages even new banks to establish a physical distribution channel to successfully compete with current banking majors. This way, Internet banking makes possible new start-up players to launch retail banking services more economically.

3. Cost Factor
Many a time, Internet banking has resulted in pushing up the cost of bank operations. This may be due to fact that banks that start Internet banking operations, although automate their front-end process for the customers, still largely depend upon manual processes at the backend. A case in point is that the Internet customers receive their statement on-line but paper – statements are also sent. Similarly, customers complete account opening application on-line which is sent electronically to the bank. Many banks print the account application and enter the application data into another system, thereby increasing the operational overheads. Similarly, mail and distribution costs are still necessary as the statement, cheques etc. are still mailed.

4. Dominant Traditional Banking
The development of Internet banking allows for the efficient delivery of a wide variety of web based banking products. It simply adds to proliferation of technology based delivering channels such as ATMs, phone banking, on-line banking etc. However, customers, by and large, support traditional branch banking. Moreover, Internet based transactions are generally not fully automated, as the same may require additional telephone calls, paper work, data entry etc.
5. No Float Benefit
For quite a long time, banks are traditionally taken benefits of income from floats, the short term us of funds during the period the funds are allowed to reach the destination. The revenue from these resources will reduce since electronic channel like Internet banking, speedup settlement processes.

6. Marketing Challenges
The proliferation of Internet Banking throws a challenge to the banking sector in that it warrants banks to undertake changes in current structure and functional processes so as to allow for the provision of efficient banking service. It often becomes difficult for the banks to deliver information quickly as they are trapped by unaligned organizational structure and costly legacy systems.
7. Marketing Advantage
Internet banking facilitates easy marketing of banking and financial products and services. For instance, it allows customers to easily compare all the products and sign-up for all the products irrespective of location.

8. Advantage for New Players
New players in the realm of Internet banking would find the going advantageous to them. They command cost advantage over the older banks. This would prompt the new banks to indulge in undercutting of prices, thus paving the way for greater competition to old banks.
9. Higher Ratings
Generally, stock markets tend to form a conservative opinion about old banks because of their slow rate in adoption of technology. On the other hand, the internet advantage would enable the new entrants to secure higher ratings. This would help them raise money needed for business cheaply. This way, the new banks would attack the old banks either organically or through acquisitions.

E banking support services:
WEB LINKING
A large no. of financial institution maintains sites on the websites are strictly informational while others also offers to customers the ability to perform financial transactions such as paying bills transferring funds etc.
WIRELESS E BANKING
Wireless banking is the 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, transmitting the funds to someone else. Person-to-person payments are typically funded by credit card charges transfer from the consumer’s account at a financial institution. Since neither the payee nor the payer in the transaction has to have an account with the payment service, such services may be offered by an insured financial institution, but are frequently offered by other businesses as well. Banking Services through Internet:
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
CREDIT CARDS: –
The credit card enables the cardholders to: Purchase any item like clothes, jewellery , railway/air tickets, etc. Pay bills for dining in a restaurant or boarding and lodging in hotel Avail of any service like car rental, etc.

DEBIT CARDS: –
A debit card is issued on payment of a specified amount by the issuing company like a telephone company to a customer on cash payment or on debiting his account by a bank. Thus it is like an electronic purse, which can be read and debited by the required amount .It may be noted that while through a credit card, the customer first makes a purchase or avails service and pays later on, but 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.
SMART CARDS: –
Smart Cards have a built-in microcomputer chip, which can be used for storing and processing information. For example, a person can have a smart card from a bank with the specified amount stored electronically on it. As he goes on making transactions with the help of the card, the balance keeps on reducing electronically. When the specified amount is utilized by the customer, he can approach the bank to get his card validated for a further specified amount. Such cards are used for paying small amounts like telephone calls, petrol bills, etc.
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.

COMPANY PROFILE:

SBI
State Bank of India (SBI) is a multinational banking and financial services company based in India. It is a state-owned corporation with its headquarters in Mumbai, Maharashtra. Bank of Madras merged into the other two presidency banks—Bank of Calcutta and Bank of Bombay to form the Imperial Bank of India, which in turn became the State Bank of India. The Government of Indianationalised the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India The State Bank of India was named the 29th most reputed company in the world according to Forbes 2009 rankings and was the only bank featured in the “top 10 brands of India” list in an annual survey conducted by Brand Finance .
The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal was established on 2 June 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks were incorporated as joint stock companies and were the result of the royal charters. These three banks received the exclusive right to issue paper currency till 1861 when with the Paper Currency Act; the right was taken over by the Government of India. The Presidency banks amalgamated on 27 January 1921, and the re-organized banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company but without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India’s central bank, acquired a controlling interest in the Imperial Bank of India. On 30 April 1955, the Imperial Bank of India became the State Bank of India. The government of India recently acquired the Reserve Bank of India’s stake in SBI so as to remove any conflict of interest because the RBI is the country’s banking regulatory authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, which made eight state banks associates of SBI. A process of consolidation began on 13 September 2008, when the State Bank of Saurashtra merged with SBI.
SBI has acquired local banks in rescues. The first was the Bank of Behar (est. 1911), which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975, SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior State, under the patronage of Maharaja Madho Rao Scindia. The bank had been the Dukan Pichadi, a small moneylender, owned by the Maharaja. The new banks first manager was Jall N. Broacha, a Paris. In 1985, SBI acquired the Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala.

WHERE SBI WAS?
In early 1990?s more than 7000 branches were using traditional manual procedures.
These manual procedures were inherited from the Imperial Bank.
Traditional procedures were evolved over decades
Very few changes were brought in those procedures as per the need of time.
In that time, mainframe or mini computers were used for MIS, RECONCILLATION & FUND SETTLEMENT PROCESS, or we can say that for backhand operations purpose.

CHANGES BROUGHT IN INFORMATION TECHNOLOGY BY SBI
In the next decade internet facility was provided for individuals.
All SBI branches were connected and ATM’S were launch
2001 – KMPG appointed consultant for preparing IT Plan for the Bank.
Later on Core banking proposed by the IT consultancy company.
2002 – All branches computerized but on decentralized systems, there the initiative of core banking took place.
2008- more than 6500 branches (95% of business) on Core Banking Solution (CBS).
Internet Banking facility for Corporate customers were also launched in early 2008.
More Interfaces developed with e-Commerce ; other sites through alternate channels like ATM ; Online Banking.
All Foreign Offices were brought on Centralized Solution.
Large network is playing the role of backbone for connectivity across the country.
ATM
SBI provides easy access to money to its customers through more than 8500 ATMs in India. The Bank also facilitates the free transaction of money at the ATMs of State Bank Group, which includes the ATMs of State Bank of India as well as the Associate Banks – State Bank of Bikaner ; Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. You may also transact money through SBI Commercial and International Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card.

Products and Services
Personal Banking
SBI Term Deposits SBI Loan For Pensioners
SBI Recurring Deposits Loan Against Mortgage Of Property
SBI Housing Loan Against Shares ; Debentures
SBI Car Loan Rent Plus Scheme
SBI Educational Loan Medi-Plus Scheme
Other Services
Agriculture/Rural Banking
NRI Services
ATM Services
De mat Services
Corporate Banking
Internet Banking
Mobile Banking
International Banking
Safe Deposit Locker
RBIEFT
E-Pay
E-Rail
SBI Vishwa Yatra Foreign Travel Card
Broking Services
Gift Cheques

ICICI
It is an Indian financial services company headquartered in Mumbai, Maharashtra. It is the second largest bank in India by assets and third largest by market capitalization. It 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 has a network of 2,883 branches and 10021 ATM’s in India, and has a presence in 19 countries, including India.

The bank 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. The company’s UK subsidiary has established branches in Belgium and Germany.
ICICI Bank is one of the big four banks of India, along with State Bank of India, Punjab National Bank and Canara Bank.

ICICI Bank is India’s second-largest bank with total assets of 3,997.95 billion (US$ 100 billion) at March 31, 2012 and profit after tax of Rs. 41.58 billion for the year ended March 31, 2012 ICICI Bank is the most valuable bank in India in terms of market capitalization and is ranked second amongst all the companies listed on the Indian stock exchanges. In terms of free float market capitalization. The Bank has a network of about 1308 branches
And 3,950 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customer through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. Equity shares are listed in India on Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) 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 subsidy of ICICI.
In the 1990s, ICICI transformed its business from 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. In1999, 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 for the ICICI group’s universal banking strategy.
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 March2002, 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. ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees.
MOBILE BANKING
Bank on the move with ICICI bank mobile banking. With ICICI banking is no longer what is used to be. ICICI bank offers mobile facility.
ALERT FACILITY
ICICI Bank Mobile Banking Alerts facility keeps you informed about the significant transactions in its Accounts. It keeps you updated wherever you go.
REQUEST FACILITY
ICICI Bank Mobile Banking Requests facility enables you to query for its account balance
ICICI Bank Online:
Banking Services provide the largest private bank in India right here at your desktops. Banking becomes pleasure as the transactions and services become instant with ICICI Bank online Internet banking. The services provided are totally secure and unique. These cover online account transactions and operations, credit card and account applications and payments, share trading and investments through mutual funds, bill payments, statement generation and a virtual demo of each service. See in brief in final report.
Features offered by ICICI bank for internet banking:
? Balance enquiry and statement
? Transfer fund online
? Card to card fund transfer
? Use debit card online
? Prepaid mobile recharge
? Subscribe for mobile banking
? Link bank account to ATM
? Lock / activate debit cards /ATM
? Request a cheque book
? Stop payment
OBJECTIVE:
To study the various E-Banking services provided by the Indian banks to the customers.
To study the perception of E-Banking among the customers of Public (SBI) and private (ICICI) bank.
To study the adoption of E Banking by the customers of ICICI and SBI bank.
To compare the perception and adoption of E-Banking services in ICICI and SBI bank.
SCOPE:
Scope of the study is to get an overview of the E- Banking services in India with special reference to public(SBI)and private(ICICI) Bank and to compare the adoption of E Banking among the public and private sector bank customers. The study mainly focuses on the customers of three branches of ICICI and SBI bank of Delhi region.
RESEARCH METHODOLOGY:
The study employs primary data as well as secondary data. Secondary data was collected from different published sources. Primary data was collected by structured survey. The survey was created online and link sent to the respondents using convenience sampling. In the questionnaire, various internet banking applications were included from previous research. Later, structured questionnaire containing 15 items was developed (8 for general perception and 7 for internet banking features) for the purpose of data collection.

DATA COLLECTION:
Both the primary and secondary data collection method has been employed to conduct the research work the survey has been carried out by the means of structured questionnaire which consist of 15 questions.
SAMPLING TECHNIQUE:
Sampling units of the study consist of customers of SBI and ICICI banks. The technique used in selecting the sample is non probability sampling i.e. Random sampling and Convenience sampling.
DATA ANALYSIS:
Mean,
Standard Deviation,
T-test.
TOOLS USED:
M S Excel
SPSS
The research methodology can be summarized as under:
Sampling Unit Bank Customers
Sampling Size 100
Sampling Technique Random and Convenience sampling.
Project Instrument Standardized questionnaire