INTRODUCTION

What is bank?

A bank is a financial institution whose primary activity is to act as a payment agent for
customers and to borrow and lend money. It is an institution for receiving, keeping, and
lending money.

Internet banking:

Internet banking (online banking) allows the customer to conduct financial transactions on a
secure website operated by their retail or virtual bank. In other words, internet 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. All the services that the bank has
permitted on the internet are displayed on the menu.

Banks today know better than anyone opportunities and the risk they face in an ever-
changing competitive environment. In offering e-commerce products, banks some key
advantage over potential competitors. E-commerce would create opportunities for banks to
strengthen their relationships with customer, sell additional services, and prevent
encroachment on their business activities. Core banking is the service provided by a group of
networked bank branches. Bank customer may access their funds and other simple
transactions from any of the member branch offices.

Now-a-day’s information technology plays a vital role in banking sector. Day to day
increasing change in technology world, it leads to improve e-banking services of various
banks. Traditional branch model of bank is now changing into new form of e-banking
services like kiosk marketing machine, coin vending machine of SBI. It provides various
advantages to the customer of various banks. Now a days people are educated more than
olden days, today human lives become machine oriented and they don’t have enough time
to visit a bank branch than ever before. Thus, it would be a borderless entity permitting
anytime, anywhere, banking.

Need for internet 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 at any time. Providing internet banking is
increasingly becoming a “need to have” than a “nice to have” service. 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.

India’s banking sector is growing at a fast space. India has become one of the most preferred
banking destinations in the world.

DEVELOPMENT OF INTERNET BANKING IN INDIA

✓ The concept of internet banking has been simultaneously evolving with the
development of WWW.
✓ Programmers working on the banking data bases came up with ideas for online
banking transactions, sometimes during the 1980’s.
✓ The online shopping promoted the use of credit cards through internet.
✓ ICICI was the first bank to initiate the internet banking revolution in India as early as
1997 under the brand name.
✓ SBI launched its internet banking service, called "SBI Online," in the year 2000. Prior
to the launch of SBI Online, internet banking services were not widely available in
India.

VARIOUS FORMS OF E-BANKING

CREDIT CARDS:

The credit card enables the cardholder to: purchase any item like clothes, jewellery,
railway/air tickets, etc. Pay bills for dinning in a restaurant or boarding and lodging in hotel.
Avail any of service like car rental, etc. A credit card is a plastic payment card that allows the
user to make purchases on credit or borrow money from a financial institution. The user is
required to pay back the borrowed amount, plus interest and fees.

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 for getting 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 smartcard 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:

ATM cards are payment card size and style plastic cards with a magnetic stripe and/or a
plastic smart card with a chip that contains a unique card number and some security
information such as an expiration date or CVVC (CVV).
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.

ADVANTAGES AND DISADVANTAGES OF

INTERNET BANKING:
Advantages of Internet Banking:

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

✓ Internet banking account is simple to open and easy to operate.

✓ Internet banking is quite convenient as you can easily pay your bills, can
transfer funds between accounts, etc. Now you do not have to stand in a queue
to pay off your bills; also you do not have to keep receipts of all the bills as you
can easily view your transaction.
✓ Internet banking is available all the time, i.e. 24x7. You can perform your tasks
from anywhere and at any time; even in night when the bank is closed or on
holidays. The only thing you need to have is an
✓ Internet banking is fast and efficient. Funds get transferred from one account
to the other very fast. You can also manage several accounts easily through
internet banking.
✓ Through Internet banking, you can keep an eye on your transactions
and account balance all the time. This facility also keeps your account safe. This
means that by the ease of monitoring your account at anytime, you can get to
know about any fraudulent activity or threat to your account before it can pose
your account to severe damage.
✓ Internet banking is also a great medium for the banks to endorse their products
and services. The services include loans , investment options, and many others.

Disadvantages of internet banking:

✓ Understanding the usage of internet banking might be difficult for a beginner

at the first go. Though there are some sites which offer a demo on how to
 use internet banking, but all does not offer this facility. So, a person who is
new to internet baking might face some difficulty.
✓ You cannot have access to internet banking if you don’t have an internet
connection; thus without the availability of internet access, internet banking
may not be useful.
✓ Security of transactions is a big issue. Your account information might get
hacked by unauthorized people over the internet.
✓ Password security is a must. After getting your net banking password, do
change it and memorize it otherwise your account may be misused by
someone who gets to know your password inadvertently.
✓ You cannot use internet banking, in case; the bank’s server is down.
✓ Another issue is that sometimes it becomes difficult to note whether your
transaction was not successful or not. It may be due to the loss of internet
connection in between, or due to a slow connection, or thr bank’s server is
down.

FEATURES OF E-BANKING:

✓ Viewing account balances

✓ Viewing recent transactions
✓ Downloading bank statements
✓ Viewing images of paid cheques
✓ Ordering cheque books
✓ Download periodic account statements
✓ Downloading application for M-banking, E-banking
✓ Fund transfer between the customer’s linked accounts
✓ Loans applications
✓ Credit card application

Objectives of the study:

 ✓ Perceptual mapping of internet banking users.
✓ To know why the customers are not using internet banking.
✓ To know which age group of customers is using different e-banking
facilities.
✓ To understand the concept of internet banking and importance, to bank
as well as the customers.
✓ To get aware of various aspects of internet banking.
✓ To build up various solutions for drawbacks in e-banking.
✓ To analyze the existing customer’s perceptions of the store the
products and the services.

Scope of the study:

The complete research is based on analysing the preference for internet banking
among several customers of state bank of India. The research contains the
demographic study in which individual from several classes/age groups/occupations
out the satisfaction level and problems associated by using the internet banking The
study helps the banks to understand the preference of customers for using internet
banking and in what all ways they can improve or create more strategies to retain
their customers and make them happy.

RESEARCH METHODOLOGY:

Research design:
The research is concerned with the study on customer perception on
internet banking services of state bank of India. Purposive random sampling
technique is used to collect the data.

Sample size:
The sample size for the study is 50 repondents, who are using internet
banking services.
Data source:
The researcher used the both primary and secondary data, to accomplish
the objective of study.

Primary data:
The primary data is collected using descriptive structured questionnaire.
The questionnaire is designed in a systematic manner covering adequate and
relevant questions which is useful to the study.

Secondary data:
The theoretical aspects of the study is collected from various sources
which includes book, magazines, websites, and other related projects.
 ✓
Password security
is a must. After getting your net banking password, dochange it and memorize it otherwise
your account may be misused bysomeone who gets to know your password inadvertently.
•

You cannot use internet banking, in case; the bank’s server is down.
•

Another issue is that sometimes it becomes difficult to note whether yourtransaction was
successful or not. It may be due to the loss of internetconnectivity in between, or due to a
slow connection, or the bank’s server isdown.
✓