A Study on Customers' Satisfaction Towards E

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A STUDY ON CUSTOMERS’ SATISFACTION TOWARDS E-BANKING WITH SPECIAL REFERENCE TO SBI AND ICICI BANKS IN THANJAVUR TOWN

A thesis submitted to

BHARATHIDASAN UNIVERSITY

for the award of the degree of

DOCTOR OF PHILOSOPHY

COMMERCE

S.BELLARMIN DIANA

[Ref.No.36049/PhD/Commerce/F.T/April 2007/Dated.04.04.2007

Under the Guidance of

Dr.M.SWAMINATHAN , M.Com., M.Phil., M.B.A., B.G.L., Ph.D.,

Associate Professor

P.G. AND RESEARCH DEPARTMENT OF COMMERCE, A.V.V.M. SRI PUSHPAM COLLEGE (AUTONOMOUS), POONDI – 613 503, THANJAVUR DISTRICT, TAMIL NADU, INDIA.

MARCH 2014.

Dr.M.SWAMINATHAN, M.Com., M.Phil., M.B.A., B.G.L., Ph.D.,

Associate Professor,

Department of Commerce,

A.V.V.M. Sri Pushpam College (Autonomous),

Poondi – 613 503.

Thanjavur District.

Date: /03/2014

CERTIFICATE

This is to certify that the thesis entitled A STUDY ON CUSTOMERS’ SATISFACTION TOWARDS E-BANKING WITH SPECIAL REFERENCE TO SBI AND ICICI BANKS IN THANJAVUR TOWN submitted by S.Bellarmin Diana Full Time Research Scholar, Department of Commerce, A.V.V.M Sri Pushpam College (Autonomous), Poondi, is a bonafide record of research work done by him under my guidance as a full-time research scholar and that the thesis has not previously formed the basis for the award to the candidate of any degree, Diploma, Associateship, Fellowship or other similar titles. The thesis represents the independent work on the part of the candidate.

(M.SWAMINATHAN)

S.BELLARMIN DIANA,

Full – Time Research Scholar,

Department of Commerce,

A.V.V.M. Sri Pushpam College (Autonomous),

Poondi – 613 503.

Thanjavur District

Date: /03/2014

DECLARATION

I do hereby declare that this work has been originally carried out by me under the supervision of Dr.M.SWAMINATHAN , Associate Professor, P.G. and Research Department of Commerce, A.V.V.M. Sri Pushpam College (Autonomous), Poondi, Thanjavur District, Tamil Nadu, affiliated to Bharathidasan University, Tiruchirappalli – 620 024 and this work has not been submitted elsewhere for any other degree.

(S.BELLARMIN DIANA) Signature of the Candidate

iii ACKNOWLEDGEMENT

Glory to The Almighty who bestowed the wisdom and health to prepare this

thesis.

I express my deep sense of gratitude to the college administration and staff members who offered me an opportunity to carry out my research work in the esteemed institution.

My sincere and heartfelt thanks to my Research Advisor

Dr.M.Swaminathan, Associate Professor in commerce, A.V.V.M. Sri Pushpam

College (Autonomous), Poondi, Thanjavur, whose encouragement and guidance has been of immense help for me to complete this research.

I offer my gratitude to G.Vijaya Ramalingam, Associate Professor and coordinator, Department of Commerce, A.V.V.M. Sri Pushpam College,

(Autonomous), Poondi,Thanjavur, for having taken steps to introduce me to the full time reseach.

I would like to offer my profound regards to Dr.R.Rajendran, Principal,

A.V.V.M. Sri Pushpam College, (Autonomous), Poondi.

I am indebted to Bharathidasan University, Tiruchirapalli for giving me an opportunity to do fulltime research and for all help.

I cordially thank my beloved parents, sisters and each one of my family members without whose effort and support the thesis would not have been successfully submitted.

S.BELLARMIN DIANA

v LIST OF TABLES

Table Page Particulars No. No 80 1.1 Result of cronbac’s alpha

98 2.1 ATMs of scheduled commercial banks as at March end 99 2.2 Bank Group wise ATMs of Scheduled Commercial Banks

113 2.3 Bank group – wise outstanding number of debit cards issued by scheduled commercial banks 114 2.4 Growth of outstanding debit cards in Indian banking 131 2.5 Growth of credit cards in Indian market 172 2.6 Charges applicable on NEFT 173 2.7 Value and volume of NEFT Transactions 178 2.8 Time of Settlement and the Charges per Transaction 179 2.9 Growth of Real Time Gross Settlement Transactions 189 2.10 Growth of Value and Volume of ECS Transactions 201 2.11 Bank group wise technology related fraud 204 3.2.1 Gender-wise classification of respondent 205 3.2.2 Age-wise classification of respondents

206 3.2.3. Educational qualification of respondents

[ 207 3.2.4 Occupational status of respondents 208 3.2.5 Monthly income-wise classification of respondents 209 3.2.6 Marital status of respondents 210 3.2.7 Classification of Respondents on the basis of e-banking facilities 211 3.2.8 Motivational factor to avail e-banking products 212 3.2.9 Number of years of utilization 213 3.2.10 Preference of respondents to e-banking products 214 3.2.11 Reason for preference to e-banking products 215 3.2.12 Frequency of usage in the past three months 216 3.2.13 Occupational status of Internet banking users 217 3.2.14 Occupational status of Credit card users 218 3.2.15 Occupational status of mobile banking users 219 3.2.16 Occupational status of EFT/NEFT users

220 3.2.17 Occupational status of RTGS users 221 3.2.18 Occupational status of ECS users

222 3.2.19 Occupational status of Any Branch Banking

223 3.2.20 Monthly income-wise classification of Internet Banking users

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224 3.2.21 Monthly income-wise classification of Credit card users 225 3.2.22 Monthly income-wise classification of Mobile banking users

226 3.2.23 Monthly income-wise classification of EFT/NEFT users 227 3.2.24 Monthly income-wise classification of RTGS users 228 3.2.25 Monthly income-wise classification of ECS users 229 3.2.26 Monthly income-wise classification of Any Branch Banking

230 3.2.27 Respondents’ view on security of electronic delivery channels 231 3.2.28 Respondents’ view on service level improvement 232 3.3.1 Association between age group and number of years of availing e- banking services 233 3.3.2 Association between occupation and number of years of availing e- banking services

234 3.3.3 Association between age group and frequency of usage 235 Association between occupation and frequency of usage 3.3.4 236 3.3.5 Association between monthly income and frequency of usage 244 4.2.1 Multiple Response Analysis of Awareness towards convenience services at ATM 246 4.2.2. Multiple Response Analysis of Awareness towards value added services at ATM

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248 4.2.3 Multiple Response Analysis of Awareness towards Debit card services at POS

Multiple Response Analysis of Awareness towards other services of 249 4.2.4 Debit card

251 4.2.5 Multiple Response Analysis of Awareness towards convenience services of internet banking 253 4.2.6 Multiple Response Analysis of Awareness towards value added services of internet banking 255 4.2.7 Multiple Response Analysis of Awareness towards information based services of mobile banking 257 4.2.8 Multiple Response Analysis of Awareness towards Financial transaction based services of mobile banking 258 4.2.9 Multiple Response Analysis of Awareness towards convenience services of credit card 260 4.2.10 Multiple Response Analysis of Awareness towards value added services of credit card 261 4.2.11 Multiple Response Analysis of Awareness towards Benefit services of credit card 262 4.2.12 Multiple Response Analysis of Awareness towards insurance services of credit card

264 4.2.13 Multiple Response Analysis of Awareness towards Any Branch Banking services 265 4.3.1 Association between age group and ICICI bank customers’ awareness with respect to dimensions of ATM –cum-Debit card services

4.3.2 Association between age group and SBI bank customers’ awareness 267 with respect to dimensions of ATM –cum-Debit card services

269 4.3.3 Association between age group and ICICI bank customers’ awareness with respect to dimensions of Internet banking services

270 4.3.4 Association between age group and SBI bank customers’ awareness with respect to dimensions of Internet banking services 271 4.3.5 Association between age group and ICICI bank customers’ awareness with respect to dimensions of Mobile banking services 272 4.3.6 Association between age group and SBI bank customers’ awareness with respect to dimensions of Mobile banking services

273 4.3.7 Association between age group and ICICI bank customers’ awareness with respect to dimensions of Credit card services

275 4.3.8 Association between age group and SBI bank customers’ awareness with respect to dimensions of Credit card services 276 Association between gender and ICICI bank customers’ awareness 4.3.9 with respect to dimensions of ATM-cum-Debit card services

278 4.3.10 Association between gender and SBI bank customers’ awareness with respect to dimensions of ATM-cum-Debit card services 279 4.3.11 Association between gender and ICIC bank customers’ awareness with respect to dimensions of Internet banking services 280 4.3.12 Association between gender and SBI bank customers’ awareness with respect to dimensions of Internet banking services

281 4.3.13 Association between gender and ICICI bank customers’ awareness with respect to dimensions of Mobile banking services 282 4.3.14 Association between gender and SBI bank customers’ awareness with respect to dimensions of Mobile banking services

283 4.3.15 Association between gender and ICICI bank customers’ awareness with respect to dimensions of Credit card services

284 Association between gender and SBI bank customers’ awareness 4.3.16 with respect to dimensions of Credit card services 286 Association between educational qualification and ICICI bank 4.3.17 customers’ awareness with respect to dimensions of ATM-cum- Debit card services 288 Association between educational qualification and SBI bank 4.3.18 customers’ awareness with respect to dimensions of ATM-cum- Debit card services 290 4.3.19 Association between educational qualification and ICICI bank customers’ awareness with respect to dimensions of Internet banking services 291 Association between educational qualification and SBI bank 4.3.20 customers’ awareness with respect to dimensions of Internet banking services

292 Association between educational qualification and ICICI bank 4.3.21 customers’ awareness with respect to dimensions of Mobile banking services 293 Association between educational qualification and SBI bank 4.3.22 customers’ awareness with respect to dimensions of Mobile banking services 294 Association between educational qualification and ICICI bank 4.3.23 customers’ awareness with respect to dimensions of Credit card services 296 4.3.24 Association between educational qualification and SBI bank customers’ awareness with respect to dimensions of Credit card services 297 4.4.1 Multiple Response Analysis of utilization with respect to convenience services at ATM

299 4.4.2 Multiple Response Analysis of utilization with respect to value added services at ATM

301 4.4.3 Multiple Response Analysis of utilization with respect to Debit card services at POS 302 4.4.4 Multiple Response Analysis of utilization with respect to other services of Debit card 304 4.4.5 Multiple Response Analysis of utilization with respect to convenience services of internet banking 306 Multiple Response Analysis of utilization with respect to value 4.4.6 added services of internet banking 308 Multiple Response Analysis of utilization with respect to 4.4.7 information based services of mobile banking

310 4.4.8 Multiple Response Analysis of utilization with respect to financial transaction based services of mobile banking

311 4.4.9 Multiple Response Analysis of utilization with respect to convenience services of credit card

313 4.4.10 Multiple Response Analysis of utilization with respect to value added services of credit card 314 Multiple Response Analysis of utilization with respect to Benefit 4.4.11 services of credit card

316 4.4.12 Multiple Response Analysis of utilization with respect to Insurance services of credit card

317 4.4.13 Multiple Response Analysis of utilization towards Any Branch Banking services

xii

318 Association between occupation and ICICI bank customers’ 4.5.1 utilization with respect to dimensions of ATM-cum-Debit card services 320 Association between occupation and SBI bank customers’ 4.5.2 utilization with respect to dimensions of ATM-cum-Debit card services 322 Association between occupation and ICICI bank customers’ 4.5.3 utilization with respect to dimensions of Internet banking services 323 Association between occupation and SBI bank customers’ 4.5.4 utilization with respect to dimensions of Internet banking services 324 Association between occupation and ICICI bank customers’ 4.5.5 utilization with respect to dimensions of Mobile banking services 325 4.5.6 Association between occupation and SBI bank customers’ utilization with respect to dimensions of Mobile banking services

326 Association between occupation and ICICI bank customers’ 4.5.7 utilization with respect to dimensions of Credit card services

328 4.5.8 Association between occupation and SBI bank customers’ utilization with respect to dimensions of Credit card services 330 4.5.9 Association between monthly income and ICICI bank customers’ utilization with respect to dimensions of ATM-cum-Debit card services

332 4.5.10 Association between monthly income and SBI bank customers’ utilization with respect to dimensions of ATM-cum-Debit card services 334 4.5.11 Association between monthly income and ICICI bank customers’ utilization with respect to dimensions of Internet banking services

Association between monthly income and SBI bank customers’ 335 4.5.12 utilization with respect to dimensions of Internet banking services

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336 Association between monthly income and ICICI bank customers’ 4.5.13 utilization with respect to dimensions of Mobile banking services 337 Association between monthly income and SBI bank customers’ 4.5.14 utilization with respect to dimensions of Mobile banking services 338 Association between monthly income and ICICI bank customers’ 4.5.15 utilization with respect to dimensions of Credit card services 340 Association between monthly income and SBI bank customers’ 4.5.16 utilization with respect to dimensions of Credit card services 355 5.2.1 Respondents interest in complaining about the problem 356 5.2.2 Reason for not making complaints 357 5.2.3 Methods of complaining 358 5.2.4 Number of times complaints made 359 5.2.5 Problems solved by banks 360 5.2.6 Duration of time required for the bank to solve the problem 361 5.2.7 Overall problems of e-banking customers 362 5.2.8 Overall satisfaction of respondents towards problem handling 363 5.3.1 Difference between banks and level of problems with respect to ATM 364 5.3.2 Difference between banks and level of problems with respect to credit card 365 5.3.3 Difference between banks and level of problems with respect to debit card 366 5.3.4 Difference between banks and level of problems with respect to internet banking

xiv

367 5.3.5 Difference between banks and level of problems with respect to mobile banking 368 5.3.6 Difference between banks and level of problems with respect to RTGS, NEFT, and ECS 369 5.3.7 Difference between banks and level of problems with respect to Any branch banking 370 5.3.8 Difference between banks and level of problems with respect to fraud 371 5.3.9 Association between age group and level of Problems with respect to ATM

Association between age group and level of Problems with respect 372 5.3.10 to Credit card 373 5.3.11 Association between age group and level of Problems with respect to DEBIT card 374 Association between age group and level of Problems with respect 5.3.12 to Internet banking 375 5.3.13 Association between age group and level of Problems with respect to Mobile banking

376 Association between age group and level of Problems with respect 5.3.14 to fraud 377 5.3.15 Association between occupation and level of Problems with respect to ATM

378 5.3.16 Association between occupation and level of Problems with respect to Credit card

Association between occupation and level of Problems with respect 379 5.3.17 to DEBIT card 380 5.3.18 Association between occupation and level of Problems with respect to Internet banking

382 5.3.19 Association between occupation and level of Problems with respect to Mobile banking 384 5.3.20 Association between occupation and level of Problems with respect to RTGS, NEFT and ECS 385 5.3.21 Association between occupation and level of Problems with respect to fraud 392 6.2.1 Overall level of satisfaction of E-Banking customers 393 6.2.2 Level of satisfaction of ATM-cum-Debit card users 394 6.2.3 Level of satisfaction of credit card users 395 6.2.4 Level of satisfaction of Internet banking users 396 6.2.5 Level of satisfaction of Mobile banking users

6.2.6 Level of satisfaction of NEFT users 397 398 6.2.7 Level of satisfaction of RTGS users 399 6.2.8 Level of satisfaction of ECS users 400 6.2.9 Level of satisfaction of Any Branch banking users

401 6.3.1 Difference between banks and level of satisfaction With respect to E-banking products and Services 402 6.3.2 Difference between male and female e-banking customers With respect to satisfaction level 403 6.3.3 Difference between married and unmarried e- banking Customers with respect to satisfaction level 404 6.3.4 Difference between age group with respect to Satisfaction level 405 6.3.5 Difference in satisfaction level of e-banking customers with different educational qualification

xvi

406 6.3.6 Association between occupation and satisfaction level of E- Banking customers

407 6.3.7 Association between monthly income and satisfaction level of e- Banking customers

408 6.3.8 Association between overall problems and satisfaction level of e- banking customers

xvii LIST OF CHARTS

Chart Page Particulars No. No 204 Gender of respondents 3.2.1 205 Age-wise classification of respondents 3.2.2 206 Educational qualification of respondents 3.2.3.

209 Monthly income-wise classification of respondents 3.2.5 212 Number of years of utilization 3.2.9 213 Preference of respondents to e-banking products 3.2.10 361 Overall problems of e-banking customers 5.2.7 392 6.2.1 Overall level of satisfaction of E-Banking customers

xviii LIST OF ABBREVIATIONS

ALPM - Advanced Ledger Posting ATM - Automated Teller Machine BIS - Bank for International Settlement CBS - Core Banking Solutions CDSL - Central Depository Service Ltd CMR - Cyber Media Research DP - Depository Participant DVSS - Digital Video Surveillance System EBT - Electronic Benefit Transfer ECS - Electronic Clearing Service EDI - Electronic Data Interchange EFT - Electronic Fund Transfer FTC - Federal Trade Commission FY - Financial Year GPRS - General Packet Radio Service IBA - Indian Bank’s Association IDRBT - Institute for Development and Research in Banking Technology IAMAI - Internet and Mobile Association of India IMPS - Inter-bank Mobile Payment System IP - Internet Protocol KYC - Know Your Customer MDR - Merchant Discount Rate MICR - Magnetic Ink Character Recognition MMID - Mobile Money Identifier NECS - National Electronic Clearing Service NEFT - National Electronic Fund Transfer NFS - National Financial Switch NPCI - National Payment Corporation of India

xix NSDL - National Securities Depository Ltd PDA - Personal Digital Assistant PI - Participant Interface PKI - Public Key Infrastructure POS - Point Of Sales RBI - Reserve Bank of India RECS - Regional Electronic Clearing Service RTGS - Real Time Gross Settlement SBI - State Bank of India SEFT - Special Electronic Fund Transfer SFMS - Structured Financial Messaging Solutions SPNS - Shared Payment System STP - Straight Through Processing TBA - Total Bank Automation TRAI - Telecom Regulatory Authority of India USSD - Unstructured Supplementary Service Data VSAT - Very Small Aperture Terminal WAP - Wireless Application Protocol WI - Web Interface

CONTENTS

CHAPTERS PARTICULARS PAGE. NO

Acknowledgement iv

List of Tables vi

List of Charts xviii

xix List of Abbreviations

I Introduction 1

II Electronic banking products and services 86

III Socio – Economic profiles of E-Banking 203 customers

IV Awareness and Utility of E-Banking services 240

252 V Problems perceived by E-Banking customers

Customers’ satisfaction towards E -banking VI products and services 389

VII Summary of Findings, Suggestions and 412 Conclusion

Bibliography xxi

Appendix xxviii

xxi d CHAPTER - I

INTRODUCTION

Banking is an indispensable constituent of the financial system and the economy of a country. Its development is being reflected by the economic development of the nation. It is like a backbone for the country, inevitable for prosperity.

Indian banks are on sound footing. They have become strong, healthy, dynamic and resilient a necessary condition for sustained economic growth and financial stability. Banks in the country have provided stability in the wake of international fiscal problems and meltdown was a credit to the functioning of the banks here.

Indian banking is fairly mature in terms of services, product range and reach. There has been a phenomenal expansion in the geographical coverage and functional reach of the banking system in India. Indian banks have come out of their traditional business of banking into various other fields of operation such as merchant banking, venture capital, mutual funds, housing finance, factoring and other financial services. They have transformed themselves and are offering services through electronic delivery channels. From computerization to networking and to e-banking, banks have moved up in the value chain. The adoption of technology has heralded a transformational development in the banking sector.

1.1 HISTORY OF BANKING IN INDIA

In India, the business of banking and credit was in practice even in very early times. The modern type of banking however was developed by the agency house of Calcutta and Bombay after the establishment of rule by the East India

Company in 18 th and 19 th centuries. The General Bank of India was the first bank in India established in 1786.

The beginning of Occidental banking started with the establishment of the

Bank of Hindustan in Bengal as a joint-stock bank under control of Britishers for undertaking the banking operations for the benefit of their constituent which failed in 1832 due to the failure of its parent firm.

The first bank of Indian origin was started in 1809, called Presidency Bank of Bengal followed by the setting up of presidency Bank of Bombay in 1840 and

Presidency Bank of Madras in 1843. In between many banks had sprung up like mushrooms and failed mostly due to speculation, mismanagement and failure of their parent companies. Due to large scale failure of the banks, the development of banking went on at a slower pace and only two important banks viz., Allahabad bank ltd (1865) and The Punjab National Bank (1894) were established by the end of the nineteenth century.

At the beginning of twentieth century under the influence of Swadeshi movement, a number of joint stock banks were established by Indians, but the outbreak of First World War disrupted this process. The conditions during world

War period (1914-1918) emphasized the need for a unified banking institution to

2 run the accounts of the Government efficiently, as a result of which Imperial Bank of India was setup in 1921 by amalgamating all three presidency banks. 1

Reserve Bank of India was established in 1935 with a view to manage the currency and credit of the country by acting as a bank of the Government and the commercial banks. India like other developing countries followed the path of planned development after independence in 1947. In 1948 Banking Regulation Act was passed which came into force in March 1949. 2

It imposed certain discipline on the joint stock companies doing banking business in India. During that period banks were largely urban oriented and remained beyond the reach of the rural population. The RBI was nationalized in the year 1948 and vested with the extensive power for the supervision and regulation of banking in India as a Central Banking Authority.

With the introduction of economic planning in 1951, the need was felt for aligning monetary and banking activity with the requirements of planning. On the basis of recommendations of the All India Rural Credit Survey committee, the

Imperial Bank of India was nationalized and renamed as SBI from July 1955. The main objective behind the establishment of SBI was to extend banking facilities on a large scale more particularly in the rural & semi-urban areas. 3

1en.wikipedia.org/wiki/banking_in_India. 2 .http://banknetindia.com 3.Dr.T.K.Velayudham “Developments in Indian Banking; past present and Future”, The Journal of the Indian Institute of Barkers, Bank Quest, 2002, Vol:73, No.4, pages.23-37

As part of the process of geographic expansion of banking facilities to meet the credit needs of co-operatives, certain banking companies functioning in formerly princely states were converted in 1959 in to subsidiaries of SBI later, came to be known as associate banks of SBI.

In order to turnout the mere business of money lending in to the major force controlling the economy of a nation, banks were nationalized which is considered as a historic beginning to the vast development. It is an important mile stone in the history of Indian banking. Banks were nationalized in two stages. On 19 th July

1969, 14 major commercial banks with deposit of over 50 crores were nationalized. Again on 15th April 1980, 6 more banks with deposits of not less than

200 crores were nationalized. As a result, 91 percent of the banking system in

India was brought under the public sector.4

The banks were nationalized only after the failure of social control measures adopted by the Government in 1968. Until1969, the Indian banks did not play a proper role in the planned development of the nation. They were concentrated on individuals benefit than social benefits.

The nationalization of major commercial banks ushered in big changes in the style, approach and functioning of banks. Since nationalization, the banking industry has been progressing in a significant manner. There has been a six fold increase in the number of bank offices. One of the significant results has been the setting up of branches in rural and semi-urban area.

4. http://www.ftkm.com/banking

The mobilized resources have been properly utilized for rural & semi-urban areas representing agriculture, small and tiny industrial units. The saving habit of the public developed to commendable level. Common people got priority over the elite. The emphasis moved from profit to service.

The euphoric experience of nationalization was so encouraging that the

Government of India based on the recommendations of Narasimham committee decided to setup Regional Rural Bank in 1975 for developing rural economy by meeting the credit needs of the weaker sections of the society. The RRBs were established at selected regions where the co-operative system was weak and where commercial banks were not very active.

During late eighties and early nineties of the twentieth century, social considerations were dominant over commercial judgment, which led to compromise on the quality of the credit leading to poor profitability of the banks resulting in to booking of losses by the nationalized banks. Revamping the structure of the banking industry was of extreme importance, as the health of the financial sector in particular and the economy as a whole would be reflected by its performance.

India embarked upon a massive programme of stabilization and structural reforms in the midst of the unprecedented balance of payment and financial crisis in mid – 1991. When the reform process started in the Indian economy following the crisis, policy makers in India took a much more holistic view, and the reform programme embraced various sectors of the macro economy.

The reforms have enhanced the opportunities and challenges for the real sector making them operate in a borderless global market place. However to harness the benefit of globalization, there should be an efficient financial sector to support the structural reforms taking place in the real economy.

Hence Government of India and the RBI thought it was necessary to introduce reforms in the financial sector also to promote rapid economic growth and development with stability through the process of globalization, liberalization, and privatization in the financial system, so that the financial system becomes more competitive and gets integrated with the world economy through internationalization of financial markets in the world.

Accordingly, the process of financial sector reforms initiated based on the recommendations of Narasimham committee in 1992. This committee report made radical recommendations for the banking sector by emphasizing the need for deregulation and liberalization. According to this report, banks are permitted to raise capital from the public, New Private sector banks were allowed to operate, nationalization of banks were stopped, and no distinction was made between private and public sector banks. More importantly to complete the global economic integration process, foreign banks were allowed to operate in India.

The Narasimham committee suggested that there should be functional autonomy, flexibility in operations, dilution of banking strangulations, reduction in reserve requirements and adequate financial infrastructure in terms of supervision, audit and technology. The committee further advocated introduction of prudential

6 norms, transparency in operations and improvement in productivity, not only aimed at liberalizing the regulatory frame work but also to keep them in time with international standards. The emphasis shifted to efficient and prudential banking linked to better customer care and customer service. 5

Banking scenario since 1991 has been a process of transformation and consolidation. There has been paradigm shift in operational, functional, environmental and technological spheres. Almost all insulation to commercial banking has been peeled off and it has been susceptible to all types of exposures now.

As part of reform, Indian banking was opened for private sector by which old and new private sector banks came to limelight. They gave a big boost to technology and created a platform to use it for backside and front side operations.

When they started adopting it this put a tremendous pressure on the nationalized and public sector banks. With the result of such healthy competitive environment, overall banking system became more work prone, efficient, and technology savvy.

With the development of telecom sector, communication infrastructure,

BPOs, the entire country became a single hub of transmitting the information which helped in the reduction of total cost. This had directly helped banks. During the same period, banks were busy in connecting their branches with centralized data base and core banking solution for offering anywhere, anytime services.

5Rakesh Mohan “ Financial Sector Reforms in India”, Economic & Political Weekly, Vol-XL No.12, March 19, 2005.

RBI made several changes in the basic structure of banking sector and laid down numerous guidelines on electronic banking, fund transfer, core banking solutions, payment system, clearing services and internet banking. With the advancement and adoption of technology a lot of changes have been made in payment system and banking system as a whole. Now banks can reach their customers anywhere, anytime and customers are able to get instant access to their accounts from any corner of the globe anytime.

1.2 ELECTRONIC BANKING

Financial sector is metamorphosing in the impact of competitive regulatory and technological forces. Technology is emerging as a key driver of business in the financial service industry. The transition of business operations by banks using electronic forces created new modes of operations called e-banking.

E-banking is defined as an automated delivery of new and traditional 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.

According to a survey of electronic cash and electronic banking report by

FINCEN “electronic banking is an umbrella term for the process by which a customer may perform banking transactions electronically without visiting a brick and mortar institution.” 6.

E-banking is a generic term encompassing internet banking, telephone banking and mobile banking. In other words, it is a process of delivery of banking services and products through electronic channels such as telephone, internet and cell phone.

Electronic banking allows banks to expand their market for traditional deposit – taking and credit extension activities and to offer new products and services or strengthen their competitive position in the market. It has given an opportunity for banks to find solutions to manage problems like saving time, money and energy of customers by reducing or minimizing, paper works, waiting in queues, lack of communication and lack of efficiency. E-banking has provided ease and flexibility in banking operations.

The major driving force behind the rapid speed of E-banking is its acceptance as an extremely cost effective delivery channel. But it is associated with risks such as reputational risk, security risk, cross-border risk and strategic risk, which are unique to e-banking.

6. www.bankersonline.com

1.3 CONCEPT OF E-BANKING

The concept and scope of e-banking is still evolving. Electronic banking is the new trend significantly adopted by banking sector worldwide due to its wider scope for the customers as well as banks at large. E-banking facilitates an effective payment and accounting system thereby enhancing the speed of delivery of banking services considerably. While e-banking has improved efficiency and convenience, it has also posed several challenges to the regulators and supervisors.

Several initiatives taken by the Government of India as well as Reserve Bank of

India have facilitated the development of E-banking in India. 7 Daniel (1999) defines electronic banking as the delivery of bank’s information and services by banks to customers via different delivery platforms that can be used with different terminal devices such as a personal computers and a mobile phone with browser or desktop software, telephone or digital television 8.

According to Karjaluoto (2002) Electronic Banking is a construct that consists of several distribution channels. It should be noted that e-banking is a larger concept than banking via Internet. 9 E-banking is a brew of services that embody internet banking, Mobile banking, ATM Kiosks, Fund Transfer system,

Real Time Gross Settlement (payment and allotment system), credit/debit/smart/

7 www.rbi.org.in

8Daniel, E(1999), “Provision of electronic banking in the UK and the Republic of Ireland”, International Journal of Bank Marketing, Vol, 17,No.2, Pages.72-82.

9Karjaluoto, H, (2002), “Electronic banking in Finland; Commercial belief, Attitude, Intentions and Behaviours, Doctoral Dissertation, University of Jyvaskyla, Jyuvaskyla.

10 kisan cards, cash government services, as well as data warehousing, operational interpretation for MIS as well as customer relationship management (E tools 4 all).10

Electronic distribution channels provide alternatives for faster delivery of banking services to a wider range of customers (Kaleem and Ahmad, 2008). 11 The definition of e-banking varies amongst researchers partially because e-banking refers to several types of services through which a bank’s customers can request information and carryout most retail banking services via computer, television or mobile phone (Mols, 1998, Sathye 1999). 12

A perusal of the concept of e-banking as described in the literature reveals that the term e-banking is an upper construct that encompasses an array of banking services delivered through electronic media, be it through phone, PC, or internet.

Thus the term e-banking includes ATM, Credit Card, Debit Card, Internet banking,

Mobile banking, RTGS, NEFT & ECS.

10 E tools 4911, E-banking? Recent trends in India, http://etools4all.org/e-banking-reunttrends.in.india. html accessed on 16 August 2013.

11 Kaleem A and Ahmad.S. (2008) “Bankers perceptions of electronic banking in Pakistan”, Journal of Internet banking and Commerce, Vol.13, No.1, pages.23-36.

12 Mols.S.N. (1998), “Behavioral consequence of PC banking’ International, Journal of Bank Marketing, Vol.16, No.5, pages.195-201.

1.4 ADOPTION OF TECHNOLOGY AND EVOLUTION OF E-BANKING

IN INDIA

Technology adoption has changed the face of banking in India. What started as a mere automation of some routine work process in banks in the mid-80s has moved on to become business process re-engineering which has resulted in making banking services branchless, anytime and anywhere, facilitated new product development and enabled near real time service delivery. It has helped banks to reach the door steps of the customer by overcoming the limitations on geographical/physical reach in branch banking and easing the resource and volume constraints posed by the brick and mortar model.

The introduction of mechanization and particularly computerization has laid foundation, for the evolution of e-banking. The use of computers has led to the introduction of online banking. In 1967-71 about 100 computers were installed in different enterprises. But only two of them were located in banking industry. The first bipartite settlement on mechanization and computerization was made in 1966 between Indian Bank’s Association and the All India Bank Employees Association which accounted for the use of IBM and ICT accounting machine for inter branch reconciliation etc. 13

13 http://www.preservearticles.com

The first serious effort and blue print, for computerization in banking industry was drawn up in 1983 under the aegis of Dr.C.Rangarajan committee. The committee recommended that computerization and installation of Advanced

Ledger Posting Machine (ALPM) at branch, regional and head offices of the bank will bring around new era in bank. In 1986 the RBI decided to use MICR technology in cheque collection and clearance which is the basic function of the banking industry.

The second committee constituted in 1988 drew up a detailed perspective plan for computerization in banks and for extension of automation to other areas like fund transfer. The branch automation enabled setting up of single window service facilities which were focused on customers. Then banks started exploring the idea of total Banks Automation. Although titled Total Bank Automation, TBA was in most cases confined to branch automation. It was only in early 1990s that banks started thinking about tying up disparate branches together to facilitate information sharing. Saraf committee was constituted by RBI in 1994 that recommended the use of electronic fund Transfer System (EFT), introduction of electronic clearing service and extension of magnetic ink character recognition

(MICR) beyond metropolitan cities and branches 14 . Meanwhile the networking of the already computerized branches also assumed urgency and some of the banks have started inter connecting their computerized branches using leased telephone lines or very small Aperture terminal (VSATs).

14 http://www.rbi.org.in/scripts/publications.

This is meant to provide more comprehensive service to customers and at the same time give banks better centralized control over the branch operations.

An important stage in the evolution of the user friendly technology or e- banking arrived with the deployment of ATMs. This was the first stage of empowerment of the customer for his own transactions. The liberalization in 1991 marked the entry of foreign and new private sector banks. They brought new technology with them and banking products became more and more competitive.

Hence, a need for differentiation of products and services was felt. The ICICI bank had started online banking in 1997 under the brand name infinity.

The development and use of communication network have also helped the banking industry to improve the quality of its services. Beginning modestly with leased terrestrial technology i.e. BANK NET and its communication software the

RBINET, a milestone was passed in February 1997 with the operationalization of the Shared Payment Network System (SPNS) of ATMs of the Indian Bank

Association in Mumbai.

With the setting up of IDRBI, three most important technology infrastructures were created and these were INFINIT in 1999, the implementation of public key infrastructure (PKI) based data transfer and structured Financial

Messaging System (SFMS) which facilitated the development of secured payment system practice in India. INFINIT is the back bone for a safe, reliable and effective communication network and messaging system. It has now incorporated low cost

14 yet reliable technologies in the form of Multi-pocket – label switch (MPLS) technology in an effort to offer state – of – the art – network. 15

A slew of innovations in newer delivery channels like internet banking, mobile banking and prepaid cards issued by non-banking entities emerged. The rapid shift towards electronic transactions in the form of automated teller machine, debit cards, internet, banking etc. has made real time core banking system a requirement to support for the up to the minute balance reporting requirement, that the older system cannot support. According to RBI report, the percentage of branches under core banking solutions increased by 79.4 percent as at end March 2009 to 90 percent at the end of March 2010. 16

Among the path breaking initiatives in the area of payment and settlement systems of the country, electrification of payment system has become the hall mark of the decade that has gone by. Electronic based payments are superior to paper based system in terms of traceability, efficiency speed and safety. The introduction of RTGS in 2004 has resulted in not only compliance with international standards but also paved the way for risk free fund transfers settled on a real time basis. The facility for inter-bank fund settlement through RTGS is available across more than 88,000 branches of banks spanning more than 5000 centres of the country, a coverage that has perhaps, not witnessed anywhere else in the world. 17

15 www.idrbt.ac.in

16 RBI report on trend and progress of banking in India 2009-10, Page.55 http://rbi.org.in/scripts/publications.

17 http://en.wikipedia.org.wiki.real-Time-Gross-settlement.

The facility for inter-bank fund settlement through RTGS is available across more than 88,000 branches of banks spanning more than 5000 centres of the country, a coverage that has perhaps, not witnessed anywhere else in the world. 17

Thus, the introduction of various electronic delivery channels has had a beneficial impact on both banks and customers. For banks, electronic channels have emerged as a strategic resource for achieving higher efficiency, control of operation, productivity and profitability. For customers, it is the realization of their anywhere anytime and any way banking dream.

1.5 IMPACT OF E-BANKING

Electronic banking has turned the world of personal finance upside down by completely changing what consumers expect from a bank. Whereas, formerly banks would distinguish themselves through the quality of their direct interaction with consumers. Today, providing them with a convenient, safe and fail – proof banking interface has instead turned in to the main focus.

The impact of e-banking is not limited to industrial and the most advanced economies. Even for countries with underdeveloped banking system, E-banking offers an opportunity to leapfrog. Because e-banking is much cheaper since its lower processing cost for providers and search and switching costs for consumers.

Providers can market banking services involving smaller transactions to lower income borrowers even in remote areas. According to industry experts, a bank spends an average of Rs.40 for each transaction conducted at a branch. If a customer uses the ATM facility, the cost drops to Rs.18 – 20 per transaction, but it

16 is still much higher than the cost involved in online banking. For net banking, the cost is Rs.4 for transaction. As per the reason survey by IBM Global Services

Consulting Groups, Traditional Banks spend 60 percent of the revenue generated to run a branch, whereas the cost of providing the same services via, internet comes out to be only 15 percent. Thus there is a huge savings for banks and consumers.18

The advent and proliferation of e-banking enable broader and inclusive e- banking sector and in the process is a key driver for sustained and inclusive growth of the economy. Branch customers are now bank customers as they can access their account from anywhere. It has become well recognized that the use of e- banking helps in increasing the transparency of the banking system. This has become essentially important due to the latest international initiatives in relation to anti-money laundering. The movement from paper based payment to electronic means of payment that the funds being transferred are easily track able. This also adds to the accountability of funds in an economy.

In a developing economy like India, e-banking has helped in modernizing the financial systems, creating economic transparency and contributing to greater predictability, liquidity and stability. One of main advantage and main reason for migration to electronic banking from paper based banking is that of the improved operational efficiency brought about by its use. Reduction in transaction time and

18 http://articles.economictimes.indiatimes

17 transaction cost has helped companies and government and other end users of e- banking products to improve their operational efficiency.

1.6 ISSUES AND CHALLENGES OF E-BANKING

Electronic channels have brought fundamental shift in the functioning banks. It is not only helping them bring improvements in their internal functioning but also enable them to provide better customer service. It provides the opportunity of breaking all boundaries and encouraging cross border banking business.

There are several benefits associated with the introduction of e-banking.

Benefits may vary depending upon various perspectives. From the banks perspective provision of e-banking delivery channel to consumers would enhance the opportunity to maximize their profit. The chief goal of many businesses in monetary terms is associated with profit maximization (Nathan 1999). Moreover, from the banker’s point of view, proliferation of the e-banking is an essential requisite not only in terms of cost saving by reducing the human interaction, improving competitiveness by way of differentiation and retaining existing customer base as well as attractive potential consumers.

Banks throughout the world, face an increasingly tough challenge of boosting their revenues while controlling their cost (Durkin 2004).Therefore the common trend followed by many banks globally is stream lining their branch networks and redirecting their consumers to alternative service delivery channels

18 and encouraging consumers to adopt self- service technologies. 19 Thus banks are reducing the cost incurred in maintaining the branch staff (pyumetal 2002). Also, banks often build better brand image by way of responding to the rapid market changes and would therefore be perceived as leaders in adoption of innovative technologies.

From consumers point of view automation of banking services by introducing electronic delivery channels provides 24 hours accessibility, reduces costs in accessing and using of banking products and services, proper cash management, reduced time demands, increased comfort as well as quick and continuous access to the information (Aladwani, 2001).

Existing studies report that consumers by way of utilizing electronic channels can manage funds in a better manner. Majority of the consumers are happy with the speed and convenience associated with the e-banking (Gurau,

2001).

Besides the various opportunities, there are certain concerns and challenges exerted by the banks and well as consumers with regard to the uptake and use of e- banking. Banks initially promoted their core capabilities through the internet. Due to the relative newness of the technology associated with e-banking banks as well as consumers often concerned about the security of internet access to client account (stamoulis, 2000). 20

19Sujance Adapa, “Global E-banking Trends: Evolution, Challenges and opportunities”, University of New England Australia.

20 Stamoulis. DS (2000) “How Banks Fit in an Internet Commerce Business Activities Model”, Journal of Internet Banking and Commerce, June 5 available online at http://www.arraydev.com/commerce/J1BC/articles

Several studies indicated that the acceptance of e-banking by consumers’ is affected by perceived security (Dourish&Redmiles, 2001). 21 Several banks in order to maintain their competitive advantages mimic new channel approaches quickly, as product differentiation is very difficult for banks (Nemzow, 1999).22

Moreover, the threat of substitutes to banking in terms of competition from non-banking, financial and micro credit sectors is increasing rapidly (Mia etal.,

2007). The competition is fierce in the banking and financial sector environment as every entrant is participating to some extent of e-banking which raises the issues of security, privacy and risk (Constantine 2000). 23

In e-banking system, information is considered as an asset and so worthy of protection. According to online Banking Association, member institutions rated security as the most important issue of online banking. There is a dual requirement to protect customers’ privacy and protection against fraud. As most banks urge customers to shift to the virtual space, their ability to create fortresses against cyber aggression has come in to the spotlight. 24

From just a few stray cases of identity theft a few years ago, internet frauds have not only risen in scale but also gone high-tech, so much so that it has become difficult to identify the origin of crime and nail the culprits. Cyber heist is an issue

21 Dourish. Pand D.Redmiles (2002), “An approach to usable security based on event monitoring and visualization”, in proceedings of the 2002 workshop on New Security paradigms (New York, ACM press)pages. 5-81.

22 Nemzaw.M (1999), “E-commerce stickiness for customer retention”, Journal or internet banking and commerce, October 4 (1). 23 ConstantineG (2000) “Banks Provide Internet on-ramp” Hoosier Banker, Indianapolis, March, USA. 24 www.banknetindia.com

20 that not just Indian banks are faced with. Cyber-attacks ranked fourth among top global risks, in terms of likelihood, according to the World Economic Forum

Report ‘Global Risks 2012’. Two Indian payment processors Electric Card, and

Enstage, were in the spot light recently for their alleged role in a $45 million credit card fraud impacting Indian and International cards. The total amount involved in frauds relating to credit card, debit card, internet banking rise 74 percent to Rs.38.4 crores in 2012. 25Experts suggest that simple rules such as not sharing login ID and passwords with anyone, would keep customers safe.

1.7 GROWTH AND DEVELOPMENT OF E-BANKING

E-banking is one of the emerging trends in the Indian banking and is playing a unique role in strengthening the banking sector and improving service quality. It has enabled the banks to handle the payments electronically, inter- bank settlement faster and in large volumes. Availability of ATMs, plastic cards, EFT, electronic clearing services, internet banking and mobile banking to a large extent avoid customers going to branch premises and has provided wider range of services to customers. According to the ICICI bank statement more and more people are shifting to alternative delivery channels, which accounted for nearly 30-

40 percent of customers at present. Over the next few years this is likely to go up to 70-80 percent. 26

25 www.weforum.org/report/global-risks-2012-seventh edition .

26 businesstoday.intoday.in/story/India.

ATM is the oldest of the alternative banking channels and enjoys the highest level of acceptance among customers. The number of ATMs in India has doubled in the past three years. By 2013, there are more than 1,00,000 ATMs around 70 percent of them in urban locations. Global research firm Celent expects that the number of ATMs to double by 2016, with more than 50 percent being set up in small towns.

Banking has also been seeing a change due to the efforts of the RBI to include a habit of paperless payments such as credit card, debit cards, electronic transfer and mobile banking. During 2011-12, the volume of online fund transfer through NEFT and RTGS grew by 71 percent and 11.7 percent respectively, according to RBI report 27. According to a report by IAMAI, penetration of cashless transaction stands at measly 0.43 percent. It has been said that only about

3.6 percent of households in India make cash less transactions. About 11 percent households in urban area undertake cashless transactions while, in rural India only

0.43 percent of the households make cashless transaction. 28

. Today, consumer’s usage of internet banking is growing at a rapid pace across geographies. Internet banking usage in India increased to seven percent from one percent five years ago. The use of internet for banking has seen a massive rise in the 2010-11, taking the overall number of bank consumers who use the net to close seven percent of total bank account holders. 29 It is a seven-fold

27 www.rbi.org.in/database 28 www.iamai.in/Press lease-details 29 www.infosys.com/industries/white paper.

22 jump since 2007, even as for the first time in the past 13 years. Branch banking has come down by a full 15 percentage point during the same period. As of 2013, India has the third largest number of Internet users. It is next to United States and China.

India is expected to have in excess of 125 million users by 2013 end. 30

Mobile phones are seen as an enabler of electronic payments as the costs are low. Mobile transactions have increased in the past few years, but the use of mobile banking services is quite low. Most of the transactions carried out using mobile phones are non-financial in nature. Notwithstanding this the growth in mobile transactions has shown increasing trend. For example, in the month of June

2012, 3.43 million transactions amounting to Rs.3067.10 million were processed as compared to 1.41 million transactions amounting toRs.984.66 million processed in June 2011 an increase of about 143 percent in volume and approximately 211 percent in value terms. 31

Modern electronic payment systems are still concentrated in metros and large towns. A large chunk of the Indian population still does not have access to formal banking channels. According to RBI, there were around 147,000 bank outlets for more than 6,00,000 villages in India. Some banks though are using the business correspondent model to expand their reach and bring more people under formal banking using technologies such as hand held devices and micro ATMs 32 .

30 www.thehindu.com 31 R.Srividya “India awaits boom in mobile banking, www.mydigitalfc.com/banking/India. 32 articles.economictimes.indiatimes.com

With mobility and customer convenience seen as keys to growth , banks are busy in exploring new technologies. Experiments with near field communication technology have failed to provide mass-scale payment solution, but the industry is buzzing with terms cloud computing and mobile solutions.

1.8 REVIEW OF LITERATURE

A review has been primarily to identify appropriate methodology. It is a subject of the articles/reports which has been received. A few available literatures on e-banking products such as internet banking Mobile banking, ATMs debit cards and credit cards in India and internationally reflect the current status of E-banking.

There are numerous research and papers that study the evolution and growth of electronic banking in India and outside India. A review of some of them is given below, the description has been organized under the heads: E-banking, Mobile banking, Electronic payment and E-cheque, ATM and Credit Card, Technology and Customer Service.

E-BANKING

The Research paper, “ Internet banking in India- consumer concern and bank strategies” of P.K.Gupta and Jamai Millai Islamia 33 presents the data drawn from a survey of internet banking consumers and service providers (banks) that offer internet banking and also on the products and services they offer. This research has developed a functional model for maximizing value to the consumers, which the

33 P.K.Gupta and Jamia Millia Islamia, ‘ Internet banking in India- Consumer concerns and Bank strategies.” Global conference of business and finance proceedings, Vol.2, No.2, 2007

24 banks may choose to adopt internet banking strategically. An attempt has been made to identify the weakness in the present conventional banking and to explore the consumer awareness, use patterns, satisfaction and preferences for internet banking vis-a-vis conventional form of banking. The factors that may affect the strategy of the bank to adopt internet banking have been characterized. The paper also addresses the regulatory and supervisory concerns of internet banking.

Richard Nayangosi, J.S.Arora and Sumanjeet 34 Singh have conducted a research on e-banking. The title of their research paper is “The evolution of e- banking: a study of India and Kenyan technology awareness”. In this study they collected customers’ opinions regarding the importance of e-banking and the adoption level of various e-banking technologies in India and Kenya. This study collected the trends of e-banking indicators in India and Kenya. Further the researchers segregated the data collected in to an Indian and a Kenyan customer basis to identify differences in their attitudes towards the emergence of e-banking.

The overall result of this study indicates that customers in both countries have developed positive attitudes and they give much importance to the emergence of e- banking.

34 Richard Nayangosi, J.S.Arora and Sumanjeet “The evolution of e-banking: a study of India and Kenyan technology awareness”, International Journal of El; electronic finance 2009, volume.3 No.2pages.149-165.

An article has been published by R.K.Mishra and J.Kiranmani 35 on the topic

“E. banking: A case of India” This article presents an overview of e-banking, its evolution and comparison of the internet banking facilities in Indian banks. The case study approach has been used to compare various banks rendering different internet banking services to its customers. It also explains that the shift towards the involvement of the customers in the financial service with the help of technology, especially internet, has helped in reducing cost of financial institutions as well as clients/ customers who use the service at any time and from virtually anywhere with access to an internet connection.

Pooja Malhotra and Balwinder singh 36 have undertaken a research on

“Determinants of internet banking adoption by banks in India”. In this exploratory study they have attempted to discover the factors affecting a bank’s decision to adopt internet banking in India. The data for this study consists of panel data of 88 banks in India covering financial year 1997-98 to 2004-05.

The results show that the larger banks, banks with younger age, private ownership, higher expenses for fixed assets, higher deposits and lower branch intensity evidence a higher probability of adoption of this new technology. Banks with lower market share also see the internet banking technology as a means to increase the market share by attracting more and more customers through this new channel of delivery. Further, adoption of internet banking by other banks es

35R.K.Mishra and J.Kiranmani, “ e-banking: a case of India”. The ICFAI University Journal of Public administration, Vol. Year 2009 Issue month, January Pages 55-65 36Pooja Malhotra and Balwinder Singh, “ Determinants of Internet banking adoption by banks in India.” Journal of Internet Research, Vol.17, Issue.3, 2007, Pages 323-339, emerald group publishing ltd.

26 of delivery. Further, adoption of internet banking by other banks increases the probability that a decision to adopt will be made.

The Research paper “Technologies for ecommerce:: India Initiatives” of

Saxena. A and Dani.A.R 37, discusses various payment instruments and present one of them namely e-cheque protocol and development activities along with its usage and advantages over other. It also discusses about the integrated product suite for conducting end-to-end commerce transaction using credit card and e-cheque with

PK1 technology for payment purpose, and to address the perimeter security firewall and intruder detection system which was developed by the research activities of IDRBT.

N.Krishna Veni 38 in her article “Introduction to e-commerce, e-business and e-banking” explains the meaning of e-banking, different forms of e-banking, its common and support services, components and risk issues related to certain e- banking services. This article gives various valid suggestions for bankers. It is stated that the banks should have a clear and widely disseminated strategy that is driven from the top and should take into account the effects of e-banking, together with an effective process for measuring performance against it. It should take into account the effect that e-provision will have upon their business risk exposure and manage these accordingly.

37 Saxena A.andDani.A.R. “Technologies for E-commerce: India Initiatives”, TENCON2003, conference on convergent Technologies for Asia-pacific Region, vol.4, Oct 2003, pages 1434-1438.

38 N.Krishnaveni, “Introduction to E-Commerce, E-business and E-banking http:/www.Indian,mba.com, March 2007.

A research paper has been published by Sarkar Partha De, Yadav

Surendra.S.Banwet D.K. 39 on the topic “Emergence of flexible distribution channels for financial products: Electronic banking a competitive strategy for banks in India”. In this paper, the four major categories of players, in the Indian banking sector, i.e, public sector banks, private sector banks, financial institutions like ICICI and IDBI and foreign banks have been studied to identify competitive strategies followed by each to get in to the non-branch delivery business.

Developmental banks, rural banks, co-operative banks have been left out of the scope of this study, since this is not their area of focus. In this paper, it is emphasized that all players in this market should gear up their supply chain management processes for better customer acquisition and retention.

N.Kamakodi and Basheer Ahmed Khan 40 have conducted a research on “e- banking channel acceptance by Indian Customers”. In this research, survey result has been obtained from 292 respondents about their view on electronic banking channels. The result has indicated that the majority of the customers are very comfortable and willing to use e-banking channels. At the same time, over 80% feel that human contact is necessary. It has also revealed that the technology alone can’t give a sustainable competitive advantage for the banks. When all banks

39 Sarkar Partha De, Yadav Surender.S. and Banwet .D.K “Emergence of flexible distribution channels for financial products: Electronic banking as competitive strategy for banks in India,’ Global Journal of flexible systems management, vol.2 issue 3, 2001.

40 N.Kamakodi and Basheer Ahmed Khan, “Looking beyond technology: A study of e-banking channel acceptance by Indian Customers”, International Journal of Electronic Banking, Vol.1, No.1, 2008, pages 73-94.

28 introduce IT in their technology, IT would lose its position as a differentiator. The conclusion derived from the research is that, beyond point IT along with ‘personal touch’ will be necessary for the banks to retain the existing clients and attract new clients.

The research article “Deploying Internet banking and e-commerce-case study of a private sector bank in India” of G.Kannabiran and P.C. Narayan 41 discusses the experience of a private sector bank in deploying internet banking and e-commerce in India. Strategic alignment of business and IT strategies, planning and implementation of e-banking initiatives and management of benefits are captured along with key contributions to development.

Avinandan Mukherjee and Prithviraj Nath 42 in their study on “A model of trust in online relationship banking” tested five hypotheses with a sample of 510 internet users of various profiles in India. It is observed from the study that shared value is most critical to develop trust as well as relationship commitment.

Communication has a moderate influence on trust. While opportunistic behaviour has significant negative effect. It is found that higher perceived trust would significantly enhance customer’s commitment in online banking transaction. It is added that future commitment of the customer to online banking depends on perceived trust.

41 G.Kannabiran and P.C.Narayan, “ Deploying Internet banking and E-commerce- case study of a Private Sector Bank in India”, Journal : Information Technology for Development, Vol.11, Issue 4, Sept 2005, pages: 363-379, published on line on 23 rd Sept 2005.

42Avinandan Mukherjee and Prithwiraj Natha, “ A model of Trust in online relationship banking, “ International journal of bank marketing Vol.21 issue.1, 2003, pages 5-15

Serkan Akinci, Safak Aksey and Eda Atilgan 43 conducted a research on the topic” Adoption of internet banking among sophisticated consumer segments in an advanced developing country”. This descriptive study was conducted to develop an understanding of consumers’ attitudes and adoption of internet banking among sophisticated consumers. Based on a random sample of academicians, demographic, attitudinal, and behavioural characteristics of internet banking users and non-users were examined. The analyses revealed significant differences between the demographic profiles and attitudes of users and non-users. IB users were further investigated and there-sub-segment were defined according to a set of bank selection criteria. Finally, based on the similarities between various web- based bank services, four homogeneous categories of services were defined.

Sylvie Laforet and Xiaoyan Li 44 in their study on “Consumers attitude towards online and mobile banking in China” investigated the market status for online/mobile banking in china. The demographic, attitudinal and behavioural characteristics of online and mobile banking users were examined. Respondents from six major Chinese cities participated in the consumer survey. The results showed that Chinese online and mobile bank users were predominantly males, not necessarily young and highly educated, in contrast with electronic bank users in west. The issue of security was found to be the most important factor that motivated Chinese consumer adoption of online banking. Main Barriers to online

43Serkan Akinci, Safak Aksoy, and Eda Atilgan, “ Adoption of Internet banking among Sophisticated consumer segments in an advance developing country,” international journal of Bank marketing, vol.22, issue –3, 2004, pages 212-232. 44Sylive Laforet and Xiaoyon Li, “consumers’ attitude towards online and mobile banking in China”. International journal of bank marketing, 2005, Vol.23, issue.5 pages 362-380.

30 banking were the perception of risks, computer and technological skills and

Chinese traditional cash-carrying banking culture. The barriers to mobile banking adoption were lack of awareness and understanding of the benefits provided by mobile banking. Distinct differences and common trends between Chinese and other countries were observed with clear indication of marketing strategy to be deployed by the service providers.

Petrus Guriting and Nelson oly Ndubis 45, in their research work on “Borneo online banking: evaluating customer perceptions and behavioural intention” examined the factors that determined intention to use online banking in Malaysia

Borneo. The results indicated that perceived usefulness and perceived ease of use were strong determinants of behavioural intention to adopt online banking. There was also an indirect effect of computer self-efficacy and prior general computing experience on behavioural intention through perceived usefulness and perceived ease of use.

Shumaila Y.Yousaf zai, John G.Pallister and Gordon R.Foxal 46 in their study on “strategies for building and communicating trust in electronic banking” have examined the effectiveness of potential trust-building strategies for e-banking and their impact on on-line customer perceptions of trust worthiness of the bank, by specially focusing on the information clues presented on the banks website.

45Petrus Guriting and Nelson only Ndubisi, “ Borneo online banking: evaluating customer perceptions and Behavioural intention”. Management Research News, 2006, Vol.29, issue1/2, pages 6-15 46 Shumaila Y.Yousafzai, John.G.Pallister, and Gordon.R.Foxall, Cardiff University strategies for building and communicating trust in electronic banking: A field experiment’, journal: information technology for development, 2005, wiley periodicals inc.

Structural assurance and situational normality mechanism both had an impact on customers’ trustworthiness perceptions, suggesting that banks need to use a portfolio of strategies to build the customer’s trust. The results further suggest that the communication of meaningful and timely information has the potential to influence customer’s trusting intentions.

A study has been undertaken by Hsin-Ginn Hwang, Rai-Fuchen and Jai-min

Lee 47 on “measuring customer satisfaction with internet banking”. A web survey was used with the subject being internet banking user of Taiwanese banks. A total of 226 valid questionnaires were obtained with an 85% response rate. For the development of a standardized instrument, an exploratory factor analysis was used.

The study demonstrates that all the items in the Doll and Torkzadich instrument for end-user computing satisfaction measures are still valid in the context of internet banking, and that IBCS (Internet banking customer satisfaction) depends heavily on security and trust considerations on the internet.

Internet banking adoption among mature customers: early majority or laggards?” is the title of the research paper published by Minna Mattila, Heikki

Karjaluoto, and Taipo Pento 48.Using the data of a large survey, they analyzed mature customers’ Internet banking behaviour. House hold income and education were found to have a significant effect on the adoption of the internet as a banking

47 Hsin-Ginn Hwang, Rai-Fu Chan, and Jai-Min Lee, “Measuring customer satisfaction with internet banking: an exploratory study.” International Journal of electronic Finance, 2007, vol.1 No.3 Pages 321-335

48 Minna Mattila, Heikki Karjaluoto and Taipo Pento, “Internet banking adoption among mature customers: early majority or laggards?”, journal of service marketing, 2003, vol.17 issue.5, pages 514-528.

32 channel, so that over 30 percent of wealthy and well-educated mature males make e-banking their primary mode of making payments. Perceived difficulty in using computers combined with the lack of personal service in e-banking was found to be the main barriers of internet banking adoption among mature customers.

Internet banking was also found to be more unsecure among mature customers then bank customers in general.

Jason Dong and Michael Bliemel 49 in their study on “Strategies for increased integration of online and in-branch services of banks in Canada” have examined the benefits of online banking and how Canadian banks accommodate various financial activities through different service channels, including online, telephone and in-branch. A frame work has been introduced for categorizing the most common activities by their need for physical interaction and assistance and to align activities with their ideal service channel. This research has been concluded with the presentation of strategies for integrating these different customer channels.

“E-banking and customer preferences in Malaysia: an empirical investigation” by M.Sadiq Sohail, Balachandran, and Shanmugam 50 . This empirical research has been carried out in Malaysia to study the customers’ preference for electronic banking and the factors, which they have considered

49 Jason Dong and Michael Bliemel, “ Strategies for increased integration of online and in-branch service of banks in China’ “ Journal of internet banking and commerce, Dec 2008, vol.13, No.3 50 M.Sadiq Sohail, Balachandran, and Shanmugam, “e-banking and customer preference in Malaysia: an empirical investigation”, international Journal of information science- informatics and computer science, April 2003, vol.15, issue 3-4, pages 207-217

33 influenced the adoption of electronic banking. Results based on the analysis of data relating to 300 respondents have indicated that while there is no significant differences between the age and educational qualifications of the electronic and conventional banking users, some differences exists on other demographic variables. Analysis has further revealed that accessibility of internet, awareness of e-banking, and customers’ reluctance to change are the factors that has significantly affected the usage of e-banking in Malaysia.

The study of Kamini singh 51 on “Effect of card and internet banking on users” analysed the use pattern of the various banking services. The use pattern is in terms of usage rate and usage period of banking services. The impact of various features of card banking and internet banking through factor analysis has been analyased. This study also analysed the satisfaction level of the account holder while using the banking services on the basis of goodness. The study has revealed the difference between the private and public banks.

The study of Marvin E.Gonzalez, Gioconda Quesada, Federico Picado, and carl A.Eckelman 52 on “customer satisfaction using QFD: an e-banking case” has considered both external and internal service management issues and subsequent service innovations based on the framework of quality function deployment

(QFD). The application of the customer window quadrant and the action plan

51 Kamini singh “Effect of card and internet banking on users”, International Journal of Technology Marketing 2012, Vol.7,No.1, pages20-31.

52 Marvin.E.Gonzalez, Gioconda Quesada, Federico, Picadio and Carl A.Eckelman, “ Customer Satisfaction using QFD: an e-banking case”, Journal: Managing service quality, 2004, vol.14, issue 4, pages 317-330, Emerald Group publishing ltd.

34 matrix in the analysis of customer and service elements has constituted a different approach for QFD. Some benefits and disadvantages of QFD process are discussed as compared to extant service quality and customer paradigms. Finally, suggestions and directions are offered for future applications, with particular interest in the e-banking service management issues.

Terpo Pikkarainen, Kari Pikkarainen, Heikki Karjaluoto, and seppo

Pahnila 53 in their study on “consumer acceptance of online banking: an extension of technology acceptance model” have investigated online banking acceptance in the light of the traditional technology acceptance model (TAM) which has been leveraged in to the online environment. On the basis of a focus group interview with banking professional, TAM literature and e-banking studies, they have developed a model indicating online banking acceptance among private banking customers in Finland. The model has been tested with a survey sample (n=268).

The findings of the study indicate that perceived usefulness and information on online banking on the website were the main factors influencing online banking acceptance. The research paper “ on line banking: drivers, developments, challenges and expectations” of Adel M.Aladwani 54 reports the results of a quantitative study of the perceptions of banks’ executive and IT managers and potential customers with regard to the drivers, development challenges and

53 Tero Pikkarainen, Kari Pikkarainen, Hekki Karjaluoto and Seppo Pahnila, “ Consumer Acceptance of online banking: an extention of technology acceptance model” journal of internet research, 2004, vol.14, issue:3 pages 224-235

54 Adel,M.Aladwani, “ online banking: a field study of drivers development challenges and expectations”, International journal of information management, Vol.1 issue: 3, June 2001, pages 213-225.

expectations of online banking. This research paper also points out online banking as a least understood delivery channel for retail banking services.

T.M. Bhasin 55 in his research work on ‘E-commerce in Indian Banking’ found that out of various delivery channels, Internet banking is the most cost effective and convenient delivery channels due to its inherent advantage. He has explained the models for implementation of E-banking. He has pointed out that for banks to sustain margin in the highly competitive consumer empowered market they need to find a way to differentiate quality of customer service, pricing and reliability through Internet channel. In addition to this banks need to be aware of the potential draw back and should have requisite process in place to mitigate the negative outcome of the Internet banking .

“Internet banking adoption in a development country-an empirical study” is the title of the research paper published by G.Varaprased, R.Sridharan,

Anandakuttan and B.Unnithan. 56 In their study they have identified the prominent factors that influenced the public sector bank consumers in India to adopt internet banking services. Factors such as perceived usefulness, perceived case of use, perceived risk, relative advantage and trialability have been found to be the determinants of internet banking in the previous studies. Along with the above variables a new variable called conspicuousness has been analysed in this study. A model has been proposed and tested using linear multiple regression analysis.

55 T.M. Bhasin, ‘E-Commerce in Indian Banking’- IBA Bulletin, April –May 2001, Vol. XXIII, No. 4 & 5 Pages . 18-34

56 G.Varaprased, R.Sridharan, Anandakuttan and B.Unnithan “Internet banking adoption in a development country-an empirical study”, International Journal of Services and Operations Management 2013, Vol.14, No.1 Pages.54-66.

“Exploring attitude of Indian customers towards internet banking” is the title of the research work undertaken by Arpita Khare and Shveta singh. 57 This research is focused towards understanding the suitability of internet banking as a delivery channel and consequently its acceptability in the minds of India customers. It is stated that the customers’ concerns visible were related to difficulty in using internet, navigating the bank website and focus associated with committing mistakes that might result in financial loss and inconvenience.

Justin Paul and RuchiTrehan 58 have undertaken a research work on

“Enhancing customer base and productivity through e-delivery channels – study of banks in India”. In this study they analysed the impact of technology on bank customers. This study takes in to account all the technological initiatives by banks as part of their channel diversification. This study also describes the extent to which these developments have taken place in the banking industry with special reference to India. The results show that public sector banks have the least average increase of customers as compared to other bank groups. This study has made an effort to foresee the future of e-delivery channels in banks.

“Are online payment systems customer – centric? – A study on Indian public sector banks” is the title of the research work undertaken by

SukanyaKundu, Saroj K,.Datta 59 . In this research, the researcher has tried to

57 Arpita Khare and Shveta singh “Exploring attitude of Indian customers towards internet banking” , International Journal of Business Competition and Growth 2012, Vol.2, No.1, Pages 4-20.

58 Justin Paul and RuchiTrehan “Enhancing customer base and productivity through e-delivery channels – study of banks in India”, International Journal of Electronic Marketing and Retailing 2011, Vol.4, No.2/3, Pages.151-164.

59 SukanyaKundu, Saroj K,.Datta, “Are online payment systems customer – centric? – A study on Indian public sector banks”, International Journal of Technology Marketing 2010, Vol.5, No.4, Pages 345-362.

37 identify the features which are affecting the experience of customers of Indian

PSBs regarding payment systems of online banking. The recent growth rate of payment systems of online banking has also been studied. Further, this research points out that banking payment systems are making a shift towards paperless systems from paper-based systems. It also suggest that reliable network connection, improved privacy and security factures and standardized process of online payment procedures are the crux to make it more customer – centric.

The research paper “Impact of customer – centric technologies on retail banking” of Rajagopal and Ananya 60 proposes criteria for successful internet banking strategy and brings out benefits of e-banking from the point of view of banks, technology and customer values. The authors suggested application of technology in enhancing customer value in banking services.

The research “Factor analysis approach of decision making in Indian e- banking: value adding consumer’s perspective” of SadiaSmar Ali, and R.K.

Bharadwaj 61 investigates several factors affecting adoption of e-banking. The prominent among these factors are ease of use of electronic banking followed by some reluctance of customers to change relationship and trust in banker, cost of computers, internet accessibility and security concerns. This study clearly reveals the segment, which are in demand for attention of managers and researchers of

Electronic banking services.

60 Rajagopal and Ananya, “Impact of customer – centric technologies on retail banking”, International Journal of Business Competition and Growth 2010, Vol.1, No.2, Pages 147-161.

61 SadiaSmar Ali, and R.K. Bharadwaj, “Factor analysis approach of decision making in Indian e-banking: value adding consumer’s perspective”, International Journal of Business Innovation and Research 2010, Vol.4, No.4, Pages 298-320-

The research paper “Paradigm shift in productivity of e-age banking : some evidence from the Indian banks” of R.K. Uppal 62 examines productivity and profitability in pre and post e-banking period and highlights the emerging issues and new strategies to enhance the performance of bank groups in liberalized, globalized and IT era. This paper concludes that there is a paradigm shift in performance of all bank groups in post e-banking period but new private sector banks and foreign banks have edge over public sector banks. The paper strives on customer centric, proficient in managing assets, technology, skilled staff, transparency, human resource management policies, customer relationship management, merger and acquisition policies are vital factors to enhance the performance of banks to face the emerging global competition.

The research paper “Measuring identity theft and identity fraud” of Susan

Sproule , and Norm Archer 63 presents a process – oriented model of consumer identity theft and fraud, and reports on 2008 survey of Canadian consumers.

Results are reported in standard categories of fraud: credit card, existing accounts, new accounts, and other fraud. It is found from the research that 20 percent of participants have stopped reduced online banking activities. It is stated that these findings are of concern to business and Government since; if consumers stop doing business online, the productivity benefits of online would not be realized.

62 R.K. Uppal, “Paradigm shift in productivity of e-age banking : some evidence from the Indian banks”, International Journal Education Economics and Development 2010, Vol.1, No.3, Pages 277-295.

63 Susan Sproule , and Norm Archer, “Measuring identity theft and identity fraud”, International Journal of Business Governance and ethics 2010, Vol.5, No.1/2, Pages.51-63.

“An empirical investigation of customer satisfaction with multi- channel banking” is the title of the research work undertaken by Vimi Jham 64 . An exploratory study of the Indian customers in six banks was conducted to identify the factors which led to adoption of multi-channel banking services with the help of data reduction technique called factor analysis. It is concluded that banks in

India have succeeded in promoting new services to its customers. The likelihood of current customers is tempted to do new business online.

An empirical research was conducted by Vimi Jham and Kaleem M.Khan 65 on “Customer satisfaction with usage of banks distribution channels”. This research examined the survey responses of 560 bank customers who provided information regarding their satisfaction towards financial distribution channels with respect to five banks. The study found that there were distinctive segments within the financial market that had significantly different levels of usage of financial distribution channels. Financial customers’ satisfaction with human tellers, automated teller machines, money transfer at the point of sale, credit cards, debit cards, internet banking and telephone banking was investigated and this information was used to determine it relationship exists between customer satisfaction and the usage of financial distribution channels.

64 Vimi Jham, “An empirical investigation of customer satisfaction with multi- channel banking”, International Journal of Electronic Customer Relationship Management 2009, Vol.3, No.2, Pages.121-131.

65 Vimi Jham and Kaleem M.Khan,” Customer satisfaction with usage of banks distribution channels”, International Journal of Financial Service Management 2008, Vol.3, No.3/4, Pages 283-294.

Kirti Dutta and UrvashiMakkar 66 have conducted a research on “Attributes offering the growth of online banking: a consumer perspective”. This research delves into the trends in Internet banking and delineates the factors that affect the use of Internet banking by customers. It was observed from the study that the sought after benefits – encouragement, ease and accuracy, convenience and control, life style and social factors, and bank reputation were the five most important factors. On the other hand, factors such as the lack of knowledge and trust, security and privacy issues and the lack of training and incentives were found to cut as major inhibitors in Internet banking adoption.

The research work of Mohammad Sadique Khan, SibaSankarMohapatra and Sreekumar 67 on “service quality evaluation in internet banking” evaluated the service quality of internet banking services in India from customers’ perspective.

Seven quality dimensions, viz., reliability, accessibility, user-friendless, privacy/security, efficiency, responsiveness and fulfillment were identified based on principal component factor analysis. The results of this research show that customers are satisfied with quality of service on four dimensions such as reliability, accessibility, privacy/security, responsiveness and fulfillment, but least satisfied with the user friendliness dimension.

66 Kirti Dutta and UrvashiMakkar, “Attributes offering the growth of online banking: a consumer perspective” International Journal of Technology Marketing 2008, Vol.3, No.4, Pages.376-391.

67 Mohammad Sadique Khan, SibaSankarMohapatra and Sreekumar, “service quality evaluation in internet banking”, International Journal of Indian Culture and Business Management 2009, Vol.2, No.1, Pages.30-46.

The research paper “E-banking and E-commerce in India and USA” of

Shilpan D.Vyas 68 explores the idea on the local conditions in India, the

Hofestede’s dimension of culture in India and USA and the diffusion of innovation theory. It is found from the research that in USA the demand of e-banking service is more whereas it is low in India because in USA every person has e-banking services but in India only 24 percent people use e-banking services. It is concluded that the future of banking industry depends on efforts of all concerned parties such as service provided service facilitators, regulatory system and customers.

Zachary B.Omariba, Nelson B.Masese and Dr.G.Wanyembi 69 have conducted a research on “Security and Privacy of electronic Banking”. In this study the researcher gives a brief discussion on the drivers of e-banking and also the concerns about the e-banking from various perspectives. It is concluded that the future of electronic will be a system where users are able to interact with their banks “worry-free” and banks are operated under one common standard. Most research studies have indicated that the common problem affecting information security and privacy of customers is e-service provider’s lack of security control which allows damaging privacy losses. A part from that another problem is the subsequent misuse of consumer’s confidential information, as in identity theft.

These may affect customer’s confidence toward online business transaction in a

68 Shilpan D.Vyas. “E-banking and E-commerce in India and USA” International Journal of Computer Science, May 2012. Vol.9, Issue.3, Page.530.

69 Zachary B.Omariba, Nelson B.Masese and Dr.G.Wanyembi, “Security and Privacy of electronic Banking”, IJCSI International Journal of Computer Science Issues, Vol.9, Issue .4, No.3, July 2012. Pages 432-446.

42 variety of privacy risk assessment by consumers. It is suggested that the development team should be both proactive and reactive in handling security threats, and the consumer should be vigilant when doing business online.

Naresh Sharma 70 has published an article on the topic ‘Role of website in marketing of financial services’. This paper has highlighted the various dimensions of website and its utility in marketing products and services. It has been emphasized that popular delivery channels like ATM, Mobile banking and Internet banking must be used by the public sector banks to deliver their products and services. It is suggested that Website should be developed as an effective vehicle to enhance the image of the banks in the global financial market. It is concluded that the website will be a very important media in future not only to market the products but also to know what the customer desire and thus will be of immense value in adopting suitable strategy to remain competitive.

K.K. Bajaj 71 deputy Director General, National informatics center has presented a paper about “E-Commerce related issues in the Emerging Hi-Tech

Banking Environment” at the 4 th bank Educationists Conference. It is stated that the rationale for banks introducing ATMs, telephone banking and internet banking is to deliver their products more cheaply than traditional branch networks which are loaded with expensive staff. Further, technology is not an alternative way of delivering service but usually an additional one. In this paper Internet banking has

70 Naresh Sharma, ‘Role of Website in Marketing of financial Services’- IBA Bulletin, April 2003, Vol. XXV, No.4, Pages 28-30

71 K.K.Bajaj, ‘ E- Commerce related issues in the emerging HI-Tech Banking Environment,- The journal of the Indian Institute of Bankers, Jan-March 2000. Vol. 71, No.1, Pages 14-43.

43 been described as a part of virtual banking. It is suggested that all the customers should plug into the Internet and visit various websites instead of visiting various physical branches to assess the cost of availing financial services.

‘What keeps the E-banking customers loyal? A multi group analysis of the moderating role of consumer characteristics on E-loyalty in the financial service industry’ by Arne Floh and Horst Treiblanaier 72 They investigated the importance of antecedents of online loyalty such as trust, quality of website, quality of the services and overall satisfaction. A survey among more than 2000 customers of an

Austrian on line bank was conducted and a structural equation modeling approach was used to gain important insight into how customer retention in the online banking business can be ensured. Satisfaction and trust were identified as important antecedents of loyalty.

Electronic Banking group of the Basel Committee 73 has prepared a report on ‘Management and Supervision of Cross-border Electronic Banking Activity’.

The purpose of this report is to express supervisory expectations and guidance to banks carrying out cross-border electronic banking activities as well as to their homes and host supervisors. It focused the need for effective home country supervision of cross-border e-banking activities as well as continued international co-operation between banking supervisors regarding such activities.

72 Arne Floh – Department of marketing, Horst Treiblemaier- Department of information systems Vienna university- Arne Floh @ wv- wien-ac. At Horst. Treiblemaier @ wu- wien-ac.at.

73 Basel Committee ‘ Management & Supervision of Cross-border electronic banking activity, Executive Summary July 2003

Elizabeth Daniel 74 in her research work ‘provision of Electronic Banking in

UK and the republic of Ireland” quantified the current provision of electronic services by major retail banking organization in the UK and the Republic of

Ireland. By use of mailed questionnaire it was found that 25 per cent of the banks in the UK and the Republic of Ireland are already offering online transactional service to consumers in their homes. It is also found that the organization’s vision for future, their prediction of customers’ acceptance, which tends to be very low, and their organizational culture of innovation are the most important of the suggested factor in their adoption of electronic delivery.

Michel Benaroch, Robert J.Kauffam 75 in their research report on ‘Justifying

Electronic Banking Network Expansion using Real option Analysis’ Illustrated the value of applying real option analysis in the context of a case study involving the deployment of point of sale (POJ) debit services by the Yankee 24 shared electronic banking network of New England. It is found in the absence of formal evaluation of the timing option; traditional approach for evaluating information technology investment would have produced the wrong recommendation.

74 Elizabeth Daniel - ‘Provision of Electronic banking in the UK and the Republic of Ireland’, international Journal of Bank marketing, Apr 1999. Volume 17, issue 2, Pages 72-83, Publisher MCB up Ltd.

75 Michel Benaroch, Robert J. Kauffman, Justifying electronic banking network Expansion using real option analysis, mis quarterly, Vol.24 NO. 2 June 2000. Pages 197-225.

A research work “on on-line banking and customer retention ” has been undertaken by Deutsche bank 76 . From this research work it is found that customer satisfaction is the pre-requisite for customer retention. It is also concluded that banks should convince more of their customers to go online and a well-known office brand and relatively cheaper fees should be considered as an important thing for the retention of customer.

Basel committee on banking supervision 77 has placed a report on “Risk management for electronic banking and electronic money activities ”. This report dealt with Risk management of E-banking from banking supervisor perceptive only, and it is stated that electronic banking may allow banks to expand their market for traditional deposit-taking and credit extension activities. In addition to this electronic banking could reduce operational cost for banks.

Federal Trade commission 78 (FTC), Bureau of consumer protection office of consumer and business education has given a definition for e-banking. It has further explained that e-banking is also known as electronic fund transfer (EFT) and it can be treated as substitute for cheque and other paper transaction.

76 Deutsche bank research ‘ online banking and customer retention – E. banking snapshot July 2005 77 Basel Committee ‘ Risk Management for electronic banking and electronic money activity, Basle March 1998.

78 Federal trade commission, 1-877- FTC- Help for the consumer, WWW. FTC.gov, Jan 2003.

Dr. Lisa Haris and Dr. Laura J.Spence 79 in their research work on ‘Ethics of e-banking’ explored the ethics of business to business e-commerce with a focus on the banking sector. It is included that only with careful consideration of a broad range of management issues of traditional companies, the challenges of e- commerce can be addressed effectively. In addition to this the bankers to be dealt with are far from being technical solution to do a business in cyber space.

Cunningham, Lawrence. F. Gerlach James and Harper, Michael .D80 in their research work on ‘ Perceived risk and e –banking services’ stated that purchasing e-banking service is perceived to be riskier than purchasing traditional banking services. This exploratory study examined the dynamics of perceived risk throughout the various stages of the consumer buying process. A survey of 159 respondents revealed a risk premium for e-banking services that follow a systematic pattern throughout the consumer buying process. It is found that financial risk drives the risk premium while psychological, physical and time risk play ancillary role as risk driver at certain stages of the consumer buying process.

79 Dr. Lisa Haris, Dr. Laura J.Spence, School of business and management, Brunel university, ‘Ethics of E- banking’, Journal of e-commerce Research. Vol.3, No.2.2002.

80 Cunning, Lawrence F. Gerlach, james and Harper, Michael D, Journal of Financial Services marketing” Wednesday, November 16, 2005, Vol.10 issue.2, Pages-165-178

MOBILE BANKING

An Asia Pacific Survey 81 was conducted in five countries including India, and commissioned by Sybase 365, a subsidiary of Sybase, along with BDM intelligence – a custom market research firm in Asia. It surveyed 1818 mobile users. The report titled “Mobile opportunities for financial Sector” states that 81% of Indian respondents are aware; they can check balance on a mobile phone, while 49% have used the services in the last three months. Almost 42% of Indian

Consumers are able to state their bank balance at any given time. The survey also points out that consumer in India (71%) are much more aware when compared to their counter parts in the other regions on the offerings, from their banks on mobile phones. Meanwhile, 50% of Indian respondents checked their bank balance on their mobile phone and 54% via the internet- although the majority still obtains account balance information through brick and mortar facilities. The survey reveals a growing culture of financial awareness as customer is becoming increasingly vigilant when it comes to their money.

“Efficient and secure credit card payment protocol for mobile devices” is the research paper of Somayeh Naderi Vesal and Mohammad Fathian.82 It is stated in this proper that many security schemes have been proposed for e-payments, however most of them are too heavy regarding mobile devices since they use public key cryptography for security objectives. In this paper the

81 Asia Pacific Survey, “ Indians most mobile banking Savvy: Survey”, BS Reporter, Mumbai, August 22, 2007. 82Somayeh Naderi Vesal and Mohammad Fathian, “Efficient and secure credit card payment protocol for mobile devices”, International Journal of Information and Computer Security 2012, Vol.5, No.2, Pages. 105-114.

48 researchers proposed a mobile payment protocol for credit-debit card payment systems where in customer needs to use public key encryption and decryption slightly.

A research paper has been published by AininSulaiman, Noor Ismawati,

Jaafar, Suhana Mohezar 83 on the topic “An overview of Mobile banking adoption among the urban community”. The main focus of this paper is on the adoption of mobile banking services by consumers. Rogers’ diffusion of innovation model was adopted to study the consumers’ behavior and motivation towards this innovation.

The personal characteristics of mobile banking users were found to be important determinants of their adoption decisions. It is concluded from the study that with the better understanding of customer perceptions of mobile banking services financial services industry can plan their marketing strategies and promotion approaches for mobile banking services in the future.

The payment committee of Internet and mobile association of India

(IAMAI) 84 has presented a discussion paper with regard to draft operating guidelines on Mobile Banking Transactions which has been issued by the

Department of payment and Settlement of RBI on Sept 19,2008. This paper includes comments, issues and suggestions. In this paper it is emphasized that the guidelines for mobile payment in India should be further divided into ‘customer present’ and ‘customer not present’ transactions. The mobile payment guidelines

83 AininSulaiman, Noor Ismawati, Jaafar, SuhanaMohezar, “An overview of Mobile banking adoption among the urban community”, International Journal of Mobile Communication 2007, Vol.5, No.2, Pages 157-168. . 84 IAMAI, Discussion paper, “Mobile Banking Transactions in India, Operative Guidelines for banks”, Sept 2008, Pages 1-5

49 should not be applicable in case of ‘ customer present’ scenarios where the cards are swiped (i.e., the payer and the payee are in front of each other) even if the transactions are processed through a mobile phone. In addition to this, RBI has to appreciate and take into account the roles played by telecom operators and other payment service providers as they are important players in the eco-system. The concluding comment of the IAMAI is that the RBI should appreciate the need for

‘financial Inclusion’ to increase the reach of banking and financial services to common man as large population of the country still is unbanked, under-banked or under-served.

A research paper has been published by Abhay Jain and B.S.Hundal 85 on the topic “Barriers in Mobile banking adoption in India”. In their research they have examined the forces that can act as barriers in mobile banking service adoption.

The quantitative survey sheds more light on this research issue. Data were collected from a survey in the northern region of India and includes 330 respondents. It is emphasized that the service providers should be more interested to enhance their understanding of consumer behaviour patterns in order to rise up to the challenges.

The study of Pin Luarn and Hsin-Hui Lin 86 “Towards an understanding of the behavioural intention to use mobile banking”, has extended the applicability of the technology acceptance model (TAM) in a mobile banking context, by adding

85 Abhay Jain and B.S.Hundal, “Barriers in Mobile banking adoption in India,” The ICFAI Journal of Bank management, Vol.66, No.3, August 2006, Pages 64-73 86 Pin Luarn and Hsin-Huilin, “Towards an understanding of the behavioural intention to use mobile banking’, published online on 30 April 2004.

50 one trust- based construct (“Perceived credibility”) and two resources- based constructs [“ perceived self- efficacy and “perceived financial cost’] to the model, while paying careful attention to the placing of these constructs in the TAM’s existing Homological structure. Data collected from 180users in Taiwan were tested against the extended TAM, using the structural equation modeling approach.

The result strongly supports the extended TAM in predicting user’s intentions to adopt mobile banking. Several implications for IT/IS acceptance research and mobile banking management practices were discussed.

The research article “mobile banking and economic development: Linking adoption, impact and use” of Jonathan Donner 87 emphasizes the need for research focusing on the context of mobile banking / mobile payments use. Presenting illustrative data from exploratory work with small enterprises in Urban India, it argues that contextual research is a critical input to effective “adoption” or

“impact” research. Further, it suggests that the challenges of linking studies of use to those of adoption and impact reflect established dynamics within the information and communication technologies and development research community.

Citi bank 88 has conducted a research on mobile banking technology in

Australia. From this research it is found that 25 percent of mobile phone users in

87 Jonathan Donner, “ Mobile Banking and Economic Development: linking adoption, impact, and use,” Asian Journal Communication, 2008, Vol.18, issue.4, pages 318-322, http:/www. Informa world.com.

88 Citi Bank,’ Millions of Australians ready to embrace mobile banking technology, media release Sydney 2 may 2005

Australia is likely to pay bill via mobile and 24 percent are also likely to transfer fund using their mobile. It is concluded that millions of Australians are ready to embrace mobile banking technology.

ELECTRONIC PAYMENT AND E- CHEQUE

“An online, Transferable E-cash payment System” is the research paper of

R.Sai Anand and C.K.Venimadhavan 89 . In this paper, they proposed a payment system where coins can be transferred over multiple hands, spread over various transactions, similar to physical cash. In this system the verification is distributed across multiple entities as opposed to the case of a coin-issuing entity or a central bank alone being responsible for verification. A resolution mechanism for handling disputes is also presented.

N.R.Sunitha and B.B.Amberker 90 have conducted a research on e-cheque particularly in relation to e-receipt. The title of the research paper is “New signature Derivation using Existing signature”. In their initial work on new signature derivation, they have come up with a method in which customers themselves can generate such signed receipts based on the signature available on already completed transactions without the intervention of the bank which in turn reduces the work load on the bank. In all the signature derivations they made, care has been taken that a new signature derived is similar to the one that the signer

89 R.Sai Anand and C.E.Veni Madhavan, “ An online Transferable E-cash Payment systems.’ INDOCRYPT 2000, LNCS 1977, Pages 93-103, Springer-verlag Berlin Heidelberg 2000.

90 N.R.Sunitha and B.B.Amberker, “ New Signature Derivation using existing signatures,” International Journal of Recent trends in Engineering, Vol.1, No.1, May 2009 Pages 47-51 Academy Publisher 2009 .

52 would have generated if he had signed himself and also all signature either existing or derived are verified using the same verification equation.

The study of G. Premkumar, K.Ramamurthy and Sree Nilkanta 91 on

“Implementation of electronic data interchange: an innovation diffusion perspective” examined the relationship between various innovation characteristics

(complexity, two forms of compatibility, cost, relative advantage, and communicability) and various attributes of diffusion [adapt ion, internal diffusion, external diffusion, and implementation success] of EDI in organizations. The data for the study were collected from a large-scale field survey of 201 firms in the

United States that have implemented EDI. The results of the multivariate regression analysis revealed that relative advantage, cost, and technical capability were the major predictors of adaptation. While relative advantage and duration were important predictors of internal diffusion, technical capability and duration were found to be important predictors of external diffusion. Both forms of compatibility and costs were found to be important predictors of implementation success in EDI.

The article “state of the art in electronic payment systems” of Asokan.N and

A.Phillipe 92 surveys the state of the art in payment technologies and sketches emerging developments. This article provides an overview of electronic payment

91 G.Premkumar, K.Ramamurthy and Sree Nilakanta, “Implementation of Electronic Data interchange: an innovation diffusion perspective”, Journal of management information systems, Vol.11, Issue .2 Sept 1994, pages 157-186.

92 Asokan,N and A. Phillipe, “ the state of the art in Electronic payment systems”, IEEE computers 1997, Klupm, edu.sa.

53 systems, focusing on issues related to security. The concluding part of the article states that properly designed electronic payment systems can actually provide better security than traditional means of payments, in addition to flexibility of use.

Electronic money: understanding its use to increase the effectiveness of policy” is an article of Supriya singh 93 . This article presents a methodology for exploring the user’s perspective, drawing on case studies on the actual use of electronic money. In this article it is emphasized that policy on electronic money and electronic commerce will be more effective if there is a better understanding of the use of electronic money. It also discusses about the challenges which are faced by the providers and policy makers.

Sunitha.N.R.Amberker B.B.,Koulgi.P. and Siddharth.P94 presented a research paper regarding “secure e-cheque clearance between financial institutions”. In this paper they have emphasized the use of zero knowledge protocol to perform secure inter FI e-cheque clearance operations. They have also suggested a method using which one can verify that two signatures received from a signer indeed belongs to the same signer without the help of public key of the signer.

93 Supriya singh, Centre for international research on communication and information technologies at Royal Melbourne institute of technology, Australia, Electronic Money: Understanding its use to increase the effectiveness of policy”, Published online on 17 th Dec 1999.

94 Sunitha N.R. Amberker B.B.Koulgi.P.Siddharth.P “secure e-cheque clearance between financial Institutional”, E- Commerce Technology and the 4 th IEE international conference on enterprise computing, E-commerce and E-service, 2007 CEC/EEE 2007 July 2007, pages 99-106

K. Mohan Chandran 95 in his research on “Electronic Cheque – the emerging payment system” defined E- Cheque as a cheque in the electronic form which contains the exact mirror image of a paper cheque and is generated, written and signed in a secure system ensuring the minimum safety standards with the use of digital signature and asymmetric crypto system. He stressed the need for using e- cheque. He has suggested the use of e-cheque as a means for reducing the cost of producing, issuing and maintaining the cheque. Further the usage of interest and e- cheque would totally eliminate physical movement of cheque.

M.J.Subramanyam 96 faculty member of syndicate bank has published an article about “Real time Gross Settlement”. He has described Real time gross settlement as a system of transferring funds from one bank to another on an immediate basis. In this system, the transactions are settled individually without netting debits against credits. In this article the salient features of RTGS has been pinpointed further the researcher has explained that, under this system, the funds received could be utilized immediately without any risk or fear of non-receipt of payment in due and RBI has been satisfied with the result achieved by this system.

95 K. Mohan Chandran, “ Electronic Cheque – The emerging payment system” – IBA Bulletin, July 2003, Vol- XXV, No.7, Pages 6-18 96 M.J.Subramaniyam,”Real time Gross settlement- Revolutionizing the payment and Settlement system”, IBA Bulletin, Dec 2004, Vol.XXVI, No.12, Pages 15-27.

“Bank automation with special reference to remittance and payment system” is an article of Shri.H.Dinesh Nayak 97 , executive director of Indian Bank.

He pointed out electronic fund transfer as an important element for meeting customer demand in Indian banking industry. He further pointed out various ways to avoid frauds in EFT such as ensuring automation of transmission of data with built in security mechanism. The prerequisite for establishing EFT have also been given in this article.

Dr.Ashutosh Saxena 98 in his study on “Digital certificate” stated that digital certificate will help banks in the issuance of Internet payment or banking software to the customer to prove that the software in genuine one and if a bank issues a customer with one digital certificate for all his credit and debit, it will know a lot about that customer and it will be able to carry out effective one to one marketing.

He concluded that banks in future can team up with utilities or retailers to provide digital certificate service.

Dr. Firdos T. Shroff 99 in this research article on “implementation of Real time gross settlement’ stated that payment and settlement system serve an important role in the economy as the main arteries of the financial sector. It has been the endeavor of the RBI to improve the efficiency of the financial system

97 Shri.H. Dinesh Nayak, ‘Bank Automation –Remittances & payments’ – IBA Bulletin, Jan 1995, Vol XVII, No.1, Pages 70-72. 98 Dr.Ashutosh Saxena, faculty, IDRBT, Hyderabad, ‘Digital Certificates Opportunities for Banks, - IBA Bulletin. May 2005, Vol XXVII, No.5, Pages 12 –14.

99 Dr. Firdos T.Shroff, ‘ Implementation of RTGS- Preparedness and roll –out strategy for banks’ – Bank quest, Jan- March 2005, Vo. 76, No.1, pages 18-25.

56 by ensuring safe, secure and effective payment and settlement systems that is through RTGS. He has noted that the network technology has enabled the banks to cross physical barrier and makes bank as a unit and customer becomes a bank customer from a mere branch customer. He suggested that banks should initiate necessary steps for all round participation in RTGS mechanism and sort out and settle issues from time to time.

ATM AND CREDIT CARD

Preventive measures for ATM frauds” is the research article of Praveen

Dalal 100 . In this article he has discussed the nature of the problem associated with

ATM and preventive solutions in details. Separate solutions are given for banks and customers. The solutions for banks are categorized as designated time, microchip technology, biometric tokens, enhanced security, ATM monitoring, customized software, customer motivation, Alerts and insurance solution. The solution for customers availing ATM services are grouped as precautionary solutions and insurance solutions. It is concluded that the big threat of ATM fraud requires a coordinated and co-operative action on the part of the bank, customer and the law enforcement machinery.

100 Praveen Dalal, “Preventive measures for ATM Frauds,” http:/ www. blogger.com, computer crime Research center, June 29, 2006.

The research paper “ATM reliability and risk assessment issues based on fraud, security and safety” of R.K.Saket, Bharath Bhushan Sagar and Gurmit

Singh 101 presents reliability and risk assessment issues of the ATM system based on fraud, security and safety. These have been identified described and recommended for reliability of the ATM system. To fully understand the scope of the international problem and the potential solutions, the actual electronic process of an actual ATM machine has been described. The types of frauds that have been perpetrated in the International level have been detailed, and the potential for money laundering have been explained. Finally, solutions for reliable practices based on safety and security procedures have been introduced in this paper.

Antonella De Angeli, Uday Athavankar, Anirudha Joshi, Lynne Coventry and Graham I.Johnson 102 have undertaken a research on “ATMS in India” and published it as a research paper. This research paper presents a method and results of an ethnographic study aimed at building an understanding of ATM adoption in

Mumbai, India. This study combined field observation and semi-structured interviews of early ATM adopters, bank customers who do not use ATMs and people who used the ATM for the first time as part of the research. Data were analyzed to identify specific cultural

101 R.K.Saket, Bharath Bhushan Sagar and Gurmit Singh, “ATM reliability and risk assessment issues based on fraud, security and safety” International Journal of Computer aided Engineering and Technology, 2012 Vol.4, No.3, Pages .272-293.

102 Antonella De Angeli, Uday Athavankar, Anirudha Joshi, Lynne Coventry and Graham I.Johnson, “Introducing ATMs in India: A contextual inquiry”, published online on 24 Dec 2003.

traits that may affect the adoption of ATMs in Urban India. Results demonstrated

that unique role of the cultural context in affecting users’ expectations and

behavioural possibilities, thus determining people response to the machine. This

led to the conclusion that an understanding of cultural biases and metaphors can

facilitate technology diffusion and acceptance, informing design localization and

supporting the development of strategies to motivate and train users.

“Product innovation- KCC vs. ATM” is an article of P.Siva Rama 103 An

important point emphasized in this article is that, the products must meet the needs

of the customer to survive in the competitive market irrespective of the cost

involved in its development. It is stated that if KCC (Kisan credit card) is upgraded

more farmers could be attracted to commercial banks fold, which is a good

business strategy. ATM KISAN CARD will enable the commercial banks to

enlarge the base of high value agriculture advances and it will boost the image of

the commercial bank. Upgrading kisan credit card as ATM KISAN CARD

involves no additional cost to the bank since the existing ATMs can be used for

ATM KISAN CARDS.

“The booming credit card business of Indian banker” is the title of the

research work, which has been undertaken by Tapas Ranjan Saha 104 . In this study a

thorough analysis has been attempted on the credit card business in

103 P.Siva Rama Prasad, ‘ Product innovation, KCC vs. ATM’ – Bank Quest - April – June 2004, Vol.75, No.2, Pages. 29-31 104 Tapas Rajan Saha, “ The booming Credit card business of Indian Banker,” Management Accountant- Calcutta, 2003, Vol.38, part 5, publication: Institute of cost & works accountant of India”, pages 371-379.

India both from the bankers’ point of view and from the users’ point of view. This study has been carried out with the objective to derive which banker is providing the maximum benefits to the consumers and making maximum profit through best possible credit management of a credit card business in India. In this study the researcher has also identified and explained the different types of credit cards available in India, facilities of credit card, liabilities of credit card holder, customer service network of various card issuing bank and finally the future of credit card business in India. It is found from the study that credit cards in India are extremely useful to the huge middle class people who use the increase the purchasing power through that plastic card .

Leena Bhatia, Bindu Jain 105 have conducted a research on “card base payment mode-an accounting perspective: a comparison between credit card and debit card payment system in India”. In this study, the researchers have conducted a survey to know how an ordinary Indian customer feels about electronic payment so that business houses can make changes in their accounting systems to incorporate the customers’ choice. This study shows that followed by the slowdown, Indians continue to spend online in the last quarter of 2008 to emerge as the third largest spenders on the internet in the Asia pacific region. It has been observed from the study that the credit card and debit card payment systems are more common as compared to other modes of electronic payments.

105 Leena Bhatia, Bindu Jain, “card base payment mode-an accounting perspective: a comparison between credit card and debit card payment system in India”, International Journal of Management and Financial accounting 2013, Vol.5, No.1, Pages. 33-44.

B.J. Parimala Kalarani 106 has undertaken a study on “ Bank Services with special reference to the use of credit card in Trichirapalli. An indepth study has been made on various credit cards schemes offered by banks and utilized by the merchants, establishments and the cardholders of the fast developing corporation of Tiruchirapalli. This study has revealed the existence of tremendous scope for the growth and expansion of market for credit card business in Tiruchirapalli and certain measures need to be implemented by the parties of credit card dealings to make the credit card system effective.

Morten.L.Bech and Bart Hobijn 107 faculty of Federal Reserve Bank of New

York have conducted a research work on “Technology diffusion with central banking: The case of Real Time Gross Settlement”. In this study they have examined the diffusion of real-time gross settlement technology across all 174 central banks. They have found that the RTGS diffusion process is consistent with the standard S-curve prediction. Real GDP per capital, the relative price of capital, and trade patterns, explain a significant part of the cross-country variation RTGS adoption. These determinants are remarkably similar to those that seem to drive the cross-country adoption patterns of other technologies.

106 B.J.Parimala Kalarani, ‘A Study on Bank Services with reference to the use of credit card in Tiruchirapalli.

107 Morten L.Bech and Bart Hobijn, “Technology diffusion within central banking: The case of real time Gross settlement,” Federal Reserve Bank of New York, FRB of New York staff Report, No.260, Sept 2006.

Dr.R.N. Srinivasan 108 conducted a research on the title ‘use of plastic cards in passenger ticket reservation’ in March 1999 through the department of management of studies, Bishop Heber College to assess the use of credit cards in railways and found that the plastic card is yet to pick up momentum.

Vijay Dube 109 in his study on credit card fraud stated that credit card fraud is one of the most preventable forms of robbery – it only takes a small quantum of initiative and common sense to prevent from falling prey to this activity and he suggested various steps to be taken to prevent credit card frauds.

TECHNOLOGY

“Globalization and contemporary Banking: on the impact of new technology” is the title of an article written by Costas lapavitsas and Paulo.L.Dos

Santos 110 . This article depicts the fact that money –dealing transactions have become cheaper but investment costs have increased and the cost of efficiency of banks has not improved. In this article, it is stated that new technology and related practices have facilitated the entry of foreign banks into developing countries, where they can exploit ‘arm’s length’, technologically demanding niches in domestic markets. This has not improved the efficiency of

108 R.N.Srinivasan, Det of Management studies, Bishop Heber college, March 1999, “ use of Plastic Cards in passenger ticket reservation”.

109 Vijaya Dube, Training Manager, PNB, ZTC, Delhi, “Credit card frauds – prevention is better than cure” – IBA Bulletin, May 2005, Vol XXVII, No.5 Pages 16-18.

110 Costas Lapavitsas and Paulo L.Dos Santos, “ Globalization and Contemporary banking : on the impact of new technology - contributions to political economy advance access published online on April 9, 2008, published by Oxford University Press.

62 host banking system, nor increased the availability of credit to the productive sector.

Arvind Mohan 111 has published an article on “Core Banking System”. In this article he remarked that high customer expectation and customer satisfaction leading to customer loyalty is the key to any bank’s success. Further, the rapid shift towards electronic transaction in the form of ATM, debit card, home and wireless banking has made real-time core banking system a requirement to support the up-to-the minute balance reporting requirements that the order system cannot support. He suggested that the banks should ensure logical access control through techniques like user ID, Password, smart cards etc. The concluding remarks given in this article are that the banks should have a flexible and expandable system that can handle functions in addition to traditional deposit management, banks internal accounting and financial activities. Hence Re-engineering of business through sophisticated technology based products will not only leads to business creation, cut down operational expenses and enhance the efficiency of operations of banks.

P.P. Pathrose 112 in his research work on “Product development and marketing in banks”, stated that products must be customized to meet the various needs of individual customers and diverse types of customers. He observed that modern delivery channel like ATM, Telephone banking, internet banking, cluster

111 Arvind Mohan,’ Core Banking Systems’ –IBM Bulletin, Feb 2003, Vol. XXV, No.2 Pages. 30-31

112 Pathrose P.P, ‘Product Development and Marketing in Banks’ – IBA Bulletin Feb 2003, Vol –XXV, No.2 Pages. 32 – 34

63 banking etc, are helping banks as a cheaper way for delivering products to customers than the traditional one. He concluded that the banks having strength and competence to convert the challenges into opportunities will be the winner.

N.Sreenivasan 113 in his research on ‘core banking solution’ observed that

Internet banking and ATM, banking is cost effective as compared to transactions made in branches. It is concluded that banks should plan for business process Re- engineering to attract additional business. Further it should plan for providing convenience banking through more delivery channels like ATM, Tele banking, Pos etc and should strive for reducing transactional cost by way of Internet banking, E- commerce and mobile banking. Only by this way banks can look for achieving reasonable return on investment at the shortest possible time .

Dr.V.T. Godse 114 has furnished a report on ‘Technology. In this report he stated that IT facilities provided multiple delivery channels for extending banking products and services and the delivery channels like Tele-banking, Internet banking have changed the equation between the banks and customer. He further explained that the end-use of technology.

113 N. Sreenivasan, “ Core Banking solution” – IBA Bulletin September 2002 Vol- XXIV, No.9,Pages. 17- 19

114 Dr.Vasant Godse, Senior Consultant, I-Flex Solution Ltd., Mumbai, ‘Technology. An Impact Analysis’ – Bank Quest – The journal of Indian Insitute of Banking & Finance, Jan-March 2005, Vol-76 No.1, Pages 14-17.

M.R. Das 115 has undertaken a project work on the topic “opportunities and challenges for Indian banking’. In this a limited sample survey of a few eminent bankers, academicians, experts of industry associations and bureaucrats has been carried out to test the conclusion. To assess the efficiency of the banks the Return on Equity (ROE) Decomposition analysis has been used. This project work revealed that internet banking has the potential for banks to lower transaction costs, offer increasing number of products and services in a timeless manner and thereby maximizing customer satisfaction, enhancing geographical reach and also enabling entry into new market. Further as for as non-residents are concerned

Internet banking possesses a lot of potential. It is concluded that the banks have to implement several practical but difficult policies to take on the new era, which can remain safe and sound in a profitable way.

K.V.Kamath, S.S.Kohli, P.S.Shenoy, Ranjana Kumar, R.M.Nayak,

P.T.Kuppusamy and N.Ravichandran 116 have published an article regarding

“Indian banking Sectors’ challenges and opportunities”. In this article, it is emphasized that the new rules of competition must require recognition of the importance of consumers and the necessity to address the needs through innovative products supported by new technology. It is suggested that banks may have to go for mobile banking services for a cluster of villages.

115 M.R. Das, ‘Opportunities and challenges for Indian Banking’- IBA Bulletin, October 2003, Vol. XXV, No.10, Pages 15-20

116 K.V.Kamath, S.S.Kohli, P.S.Shenoy, Ranjana Kumar, RM Nayak, PT.Kuppusamy and N.Ravichandran, “Indian Banking Sector: Challenges and opportunies”, Vikalpa, Vol.28 No.3, July- Sept 2003, Pages 83-99.

Alternatively, technological institutions have to come out with low-costs, self- service solutions/ ATMs. In addition to this, a wider dissemination of information of technologies and products to the Indian banking industry by the research institutions could benefit the banking institutions. It is concluded that the cross- pollination of ideas would mutually enrich the banking and the technology development processes.

Mrs.Ranjana Kumar 117 has made an attempt to explore the strategies for

“restructuring of banks”. In her article she stressed the need for technology up gradation and innovation. It is remarked that success lies in aligning technology with the business strategy and redefining processes to get maximum advantage.

The concluding part of her article highlighted that banks should adapt themselves to the changes, innovate and introduce new technologies to meet the needs of the customers. Banks which have new and innovative business model in the place will be geared to meet the challenges and compete effectively in the market.

Dr. K. Subramanian 118 has published a research article on “information technology- A transforming tool for the Indian banking Industry”. This paper outlined the concept of cost effective rural operations of the Indian finance industry by means of appropriate automation and communication channels to

117 Mrs.Ranjana Kumar, “Restructuring of Banks an overview,” Bank Quest, the Journal of India Institute of banking and Finance, Vol.74, No.4, Oct-Dec 2003 Pages 20-24

118 Dr.K.Subramanian, ‘Information Technology – A Transforming tool for the Indian Banking Industry’ – IBA Bulletin, Jan 1993, Vol -XV, No.1, Pages 109-113.

66 utilize the funds available at the rural sector for the overall development of Indian

Economy.

Ajaya KumarMohanty 119 in his research work on ‘ Technology as competitive edge’ stated that only those institutions who leverage advancement of technology in innovation of new products, customer convenience, re-engineering process and delivery modes etc. will be the ultimate winner. He has quoted the directions of Dr.Rengarajan Committee. He further explained that the technology will definitely be a cutting edge against the rivals if it is implemented by wholehearted participation of personnel with customer focus aiming at customer delight. It is suggested that shared network is to be widened and spread to all cities, an integrated customer legislation should be passed and administered and necessary directions should be given by RBS and MOF to frame new set of customer delight guidelines.

M. Sitarama Murthy 120 in his study on “Innovations in Banking

Technology” observed that the transmission of images and messages through electronic media and avoiding physical movement of instruments can bring about dramatic changes. He pointed out ATM as an excellent customer oriented,

‘Convenience’ product.

119 Ajaya kumar Mohanty, “Technology as Competitive Edge,” -IBA Bulletin, March 2004, Vol. XXVI, No. 3 Pages.14 – 18. 120 M.Sitarama Murthy, Former Managing Director, State Bank of Mysore, Secunderabad, “Innovations in Banking Technology” – IBA bulletin, Nov 2004, Vol XXVI, No.11, Pages 40-43.

He has also found that networking of branches with a core banking solution will through up a multiple of new products and services and make banking a pleasant experience.

Deepak Jain 121 has published an article on the topic “Risk management for electronic banking”. In this article he remarked that the unprecedented development of electronic banking has increased some of the traditional risks associated with banking activities viz., operational reputational, legal, credit, liquidity, interest rate, market, country risk etc. He has also given a wide description of various types of risk associated with electronic banking. For managing such risk he has outlined some necessary things to be considered by every institution such as criticality of data, sensitivity of system and vulnerability of network. He suggested that the banks must have a comprehensive risk management process in place including the basic elements of assessing risk, controlling risk and monitoring risk.

Dr.A.Vinayagamoorthy 122 has published an article on the title ‘Information technology and Electronic Commerce”. This article includes a significant discussion over the various services of banks through electronic media such as phone banking, ATM, Credit card, Electronic fund transfer, shared payment network system, electronic clearing services, Point of sale,

121 Deepak Jain, ‘ Risk Management for Electronic Banking’ – IBA Bulletin Dec 2002, Vol XXIV, No.12, Pages. 28-33.

122 Dr. A. Vinayagamoorthy, ‘Information technology and electronic Commerce’ - INDIAN ECONOMIC PANORAMA, Oct 2006, Vol.16, No.3, Pages 21-25

D-Mat account, electronic data interchange, E-cheque, corporate banking

Terminal. In this article it is stated that e-banking has given an opportunity for banks to find solutions to manage problems like saving time and energy of customers by reducing or minimizing paper work, waiting in queues, lack of communication and lack of efficiency. As for as D-mat account is concerned, it has the capability of reducing the paper work, bad deliveries and loss of shares and less transaction cost. In addition SEBI should find a way to overcome the illegal activities of depository participants with the help of D-mat. The various benefits of

E-banking have been discussed in this article.

“Core banking-change in form, not in substance” is an article written by

Durai Rajesekar 123 . In this article a modest attempt has been made to broadly define the scope and parameters within which a bank can look for selection of a core banking solution for implementation. It has described core-banking system as a backbone of retail bank, which facilitate central accounting, customer information and transaction processing functions. It is stated that banks are custodians of public fund and hence a core banking solution should be secure enough to insure against financial loss caused by frauds, misappropriation and embezzlement. It should have highest-level access controls to safeguard against intrusions and should support well-defined and time tested audit and control procedures.

123 Durai Rajesekar, “Core banking- Changes in form, not in substance” –Bank quest- July- September 2003, Vol.74, No.3 Pages. 8-13.

Xiaofeng Chen, Fangguo Zhang and Yumin Wang 124 have published a research paper on “A new approach to prevent blackmailing in e-cash”. In this paper, some disadvantages D.Kuglers’s scheme are analysed and then a new online electronic cash scheme to prevent blackmailing is presented by using group blind signature technique. In this scheme, the blackmailed cash was marked by an entity, called supervisors; therefore the bank can distinguish it from the valid cash. Also, one can modify this scheme to be offline so that it can be used to decrease other crimes, e.g. money laundering, bribery etc. in electronic cash system.

CUSTOMER SERVICE

A study has been undertaken by Hsin-Ginn Hwang, Rai-Fuchen and Jai-min

Lee 125 on “measuring customer satisfaction with internet banking”. A web survey was used with the subject being internet banking user of Taiwanese banks. A total of 226 valid questionnaires were obtained with an 85% response rate. For the development of a standardized instrument, an exploratory factor analysis was used.

124 Xiaofeng chen, Fangguo, Zhang and Yumin Wang,” A new approach to prevent Blackmailing in E-cash,” National Science foundation of china, Crazymount @ hotmail.com.

125 Hsin-Ginn Hwang, Rai-Fu Chan, and Jai-Min Lee, “Measuring customer satisfaction with internet banking: an exploratory study.” International Journal of electronic Finance, 2007, vol.1 No.3 Pages 321-335

“Customer satisfaction and retail banking: an assessment of some of the key antecedents of customer satisfaction in retail banking” is the title of the research paper published by Ahmad Jamal and Kamal Naser 126 . This paper reports, findings from a survey which looked into the impact of service quality dimensions and customer expertise on satisfaction. A sample of 167 respondents took part in this study. Findings indicate that both care and relational dimensions of service quality appear to be linked to customer satisfaction. Findings also indicate that expertise is negatively related to satisfaction. This paper discusses implications for bank managers.

“Antecedents to perceived service quality: an exploratory study in the banking industry” by Spiros P.Gounaris, Vlassis Stathakopoulous, & Antreas

D.Anthanassopoulos 127 . Using empirical data derived from the greek banking sector, the authors attempted to model the influence of bank-specific (market orientation) and customer-specific (comparison shopping, influence by word-of – mouth communication and personal relations with bank’s employees] Parameters on the customers’ perception of service quality. The findings suggest, that the various dimensions of the quality of service offered by a bank are not influenced by all the antecedents examined in this study. Moreover, the gravity of the influence that each of the examined parameters exercises on

126 Ahmed Jamal and Kamal Naser, “ Customer satisfaction and retail banking: an assessment of some of the key antecedents of customer satisfaction in retail banking,” International journal of bank marketing, Vol.20, issue-4 2002, pages: 146-160 .

127 Spiros P.Gounaris, Vlassis Stathakopoulos, Antreas D.Anthanassapoulos “Antecedents to perceived service quality, an exploratory study in the banking industry,’ International journal of bank marketing, 2003, Vol.21, issue.4 pages 168- 190.

71 customer’s perception of the various dimensions of quality was also found to vary considerably with certain dimension being more influenced by the same parameter than others. Based on these findings, the authors suggested specific implications for both the academia and practitioners in the banking industry.

The study of A Gauri Shankar 128 on “Customer services in banks” depicted that excelling and managing customer relationship is the future of any business or every day’s business. Customer focusing is not be viewed as just as business strategy but should become a corporate mission. It is observed that the speed with which the banks offer their services would actually gain a competitive advantage and allow them to offer higher satisfaction. It is added that a successful banker can be judged by his ability to manage the expectations of his customer. The concluding remarks given in this research article is that building value for customers should be seen as equal to building shareholders value.

P.V. Anantha Bhaskar 129 has made an attempt to explore the importance of

‘Customers service in Banks’. This research has stressed the need for customer satisfaction. It has been emphasized that in order to achieve the highest level of customer satisfaction, technology should be upgraded to speed up the services in all sphere of banking. An important suggestion pointed

128 A.Gauri Shankar, “Customer Service in Banks” IBA Bulletin, Aug 2004 Vol. XXVI, No.8, Pages 5-8

129 P.V.Anantha Bhaskar “Customer services in Banks” – IBA Bulletin, Aug 2004, vol. XXVI, No.8, Pages 9 –13

72 out here is that the technology Implementation should be speeded up such as computerization, electronic banking through channel migration process. The conclusion derived from this research is that once good service is extended to a customer, a loyal customer will work as an ambassador to the bank and facilitate in the growth of business.

Dr. K. Santhi Swarup 130 in her study on “Customer orientation in banks for building long term relationship” found that for delivering quality service it is imperative to have customer orientation as a culture in the bank. Customer orientation builds long-term relationship resulting in customer satisfaction and cash flow to the banks. The researcher suggested that the bankers should adopt customer satisfaction as their basic objective, besides this customer satisfaction audit should be carried out regularly to find out the area of discrepancies and try to improve customer perception.

“Service quality, customer satisfaction, and customer loyalty in Indian

Commercial banks” is the title of the Research article published by Usha Lenka,

Damodar Suar and Pratap K.J.Mohapatra 131. In their study they have examined whether service quality of Indian Commercial banks increases customer satisfaction that fosters customer loyalty. Data were collected from 350 valued customers of scheduled commercial bank branches in Orissa (India). It is suggested that better human, technical and tangible aspects of

130 Dr.K.Santi Swarup, ‘Customer orientation in Banks for building long Term Relationship’ – IBA Bulletin, Aug 2004, Vol-XXVI, No.8, Pages 17-20

131 Usha Lenka, Damodar Suar and Pratap, K.J. Mohapatra, “Service Quality, Customer satisfaction, and customer loyalty in Indian commercial banks” Journal of enterpreneurship,vol.18, No.1,2009, pages 47-64

73 service quality of the bank branches, would increase customer satisfaction. Human aspects of service quality were found to influence customer satisfaction more than the technical and tangible aspects. Customer satisfaction furthers customer loyalty.

Increase in service quality of the banks can satisfy and retain customers. It is added that in the Indian Banking sector, human aspects are more important than technical and tangible aspects of service quality that influence customer satisfaction and promote and enhance customer loyalty.

Dr. S. Hasanbanu 132 in her research work on ‘Customer Service in Rural bank’ analyzed the attitude level of different types of customers towards banking services in rural branches. All kinds of customers like businessmen, agriculturists, professionals, pensioners and housewives have been chosen for this study and it was based on sampling method. This study revealed that 36 respondents with low level of attitude, 182 respondents with the medium level of attitude and 32 respondents with the high level of attitude. It is suggested that computerization of banks should be implemented in villages also that customers will be disposed off quickly and they can also gain computer knowledge. In addition to this frequent training should be given to officials with practical knowledge so that they can impart it at the branches.

A research work has been undertaken by Dr.Ramesha, Dr.S.G.Hudekar,

Dr.B.D. Kumar 133 on “Marketing strategies that brightens the future friendly

132 Dr.S. Hasanbanu, ‘Customer Service in Rural Banks: An Analytical Study of Attitude of different types of customers towards banking services’ –IBA Bulletin, Aug 2004, vol XXVI, No.8, Pages. 21-25.

133 Dr. Ramesha, Dr.S.G. Hundekar, Dr.B.D. Kumbar, Karnataka University, Dharwad, ‘Marketing Strategic Brightens the future customer friendly banking services’ –IBA Bulletin Aug 2004, Vol XXVI No.8, Pages 26-29

74 banking services”. A modest attempt has been made in this to explore the need for strategic planning for marketing banking services and different types of marketing strategies for making the banking services more relevant, qualitative customer specific and market specific. It is noted that technology in particular Internet is a driver of internal change. The valuable suggestions given in this research is that the customers must make an application for core banking services and open new account for exploiting the convenience of Internet banking. It is concluded that the banks in the days to come have to provide their broad-based service package in the midst of stiff competition and to ensure their competitive edge, in addition they have to fight with rivals in terms of their customer services.

1.9 STATEMENT OF THE PROBLEM

The Indian banking industry has now entered a new phase where in challenges both within the banking sector and from the economy have to be catered. Rapid changes in the financial service environment increased competition by new players. Globalization and liberalization have led to a market situation where bottle for customers has become intense. In order to rise up to the challenges, banks have forced to introduce new innovative customer centric products and services with the help of modern electronic delivery channels.

Technology is enabling banks to provide the convenience of anytime, anywhere banking to increasingly demanding customers. The earlier brick and mortar branch is no longer sufficient. As technology gives consumers more delivery choices than even before they are expecting more delivery alternatives, more personalized

75 service and greater access. The world is witnessing and experiencing the dramatic change from cash to card like credit card, debit card, smart card to online payment and fund transfer which will in effort create a cashless society. In this context, the fast growing electronic banking is significant for this study.

The bankers and financial experts consider innovation and technology as key differentiators in the financial services businesses to some extent. Today, electronic banking is used as a strategic tool by global banking sectors to attract customers. The benefit of modern electronic payment systems are not spread evenly among all sections of society and across different regions of the country.

Even though banks in competitive environment are introducing more and more new innovative and value added services, it is not known whether the users of e- banking products are fully aware of the services available within each product, or they are satisfied with the services. Because of the above mentioned issues, it is pertinent to conduct the study in the field of e-banking from the aspects of customers. Many studies have been conducted with respect to e-banking in abroad, but in India only limited study has been made so far. Due to lack of research work from the dimension of customer perception and lack of popularity of e-banking in

Thajavur, it was felt necessary and important to conduct a study to know the perception and satisfaction level of customers towards e-banking products particularly ATM cum Debit card, credit cards, internet banking mobile banking,

RTGS, NEFT, ECS any branch banking. The purpose of this study is to find out whether the e-banking customers are aware of various services available within each e-banking product, how far they are utilizing these services, and bring out

76 their level of satisfaction that is to what extent they are satisfied and also the problems perceived by e-banking customers with respect to each product separately. The result will help the study banks to adopt right strategy to increase their quality of service which in turn results in customer loyalty.

1.10 OBJECTIVES OF THE STUDY

The overall objective of the study is to assess customer’s satisfaction towards e-banking products in selected banks. The following are the specific objectives of the study.

To understand the e-banking products and services in India.

To assess the socio-economic profile of e-banking customers.

To assess the e-banking customer’s awareness and utilization of

E-banking services of the study banks.

To identify the problems perceived by e-banking customers in the study

area.

To find out the level of satisfaction of e-banking customers of the study

banks.

To offer valuable suggestions on the basis of findings for the improvement

of e-banking services in the study banks.

1.11 HYPOTHESIS

On the basis of the respondents’ responses, the following null hypotheses are tested in the appropriate places.

There is no association between respondent’s socio-economic profile

and number of years of availing e-banking services.

There is no association between respondent’s socio – economic profile

and frequency of usage.

There is no association between respondent’s socio-economic profiles

and awareness towards e-banking services.

There is no association between respondent’s socio-economic profiles

and utility of e-banking services.

There is no significant difference between banks and level of problems

with respect to each e-banking product.

There is no significant association between respondent’s socio-

economic profiles and level of problem related to each e-banking

product.

There is no significant association between overall problem and level of

satisfaction.

There is no significant difference between banks and level of

satisfaction with respect to e-banking products and services.

There is no significant association between respondent’s socio-

economic profiles and satisfaction level.

1.12 RESEARCH METHODOLOGY

A study on customer’s satisfaction towards e-banking was conducted among the customers of SBI and ICICI banks who were selected on the basis of simple random sampling in Thanjavur town.

The study is based on both primary data and secondary data. The empirical part of the study is based on the primary data collected through the questionnaire to a sample of e-banking customers of SBI and ICICI banks in this area.

Descriptive and inferential analytical methodology has been adopted in the study.

In order to evolve a suitable method for the collection of comprehensive data and incorporation of as many essential questions as possible in the questionnaire, a pilot study has been conducted with the sample of sixty respondents. The reliability of questionnaire was tested using Cronbach Alpha co-efficient. The researcher has verified the reliability of questions related problems and under nine dimensions and also satisfaction. The following table shows the reliability of different dimensional items.

Table 1.1

RESULT OF CRONBAC’S ALPHA

Items No. of items Cronbac’s Alpha Common problems with e-banking 13 0.910 Problem related to ATM 10 0.941 Problems resulted to credit card 39 0.970 Problems related to debit card 8 0.904 Problems related to Internet bank 8 0.914 Problems related to Mobile banking 3 0.713 Problems related to RTGs, NEFT and ECS 3 0.818 Problems related to any branch banking 4 0.835 Problems related to fraud 12 0.909 Satisfaction towards E-banking products and 19 0.964 quality of service Source: Primary data

The above table shows that all items were highly reliable that is greater than recommended level of 0.60 and achieved the internal consistency.

For sampling of respondents only Thanjavur Town is chosen. Since there is a constrain of popularity of e-banking services in the interior parts of Thanjavur, the scope for approaching respondent using different e-banking products with different experience and character is high in Thanjavur town. Therefore, it is found appropriate to select samples from Thanjavur town only. The samples were selected on the basis of simple random sampling.

Based on the pilot study, 90 percent of the e-banking product users especially net banking, credit card and debit card were identified belonging to

State Bank of India and ICICI Bank in Thanjavur town. Therefore data were

80 collected from the e-banking customers of these two banks only and the products that are commonly provided by these two banks were taken for this study.

As per the records of the study banks, the total number of e-banking users in SBI is around 30,000 and the number of e-banking customers in ICICI is around

35,000 in the study area. One percent of total population is selected as sample ie.650 for the study. The questionnaire was distributed to 650 respondents of study banks in the study area. After the follow-up of the 650 distributed questionnaire

482 usable were received. Of the 482 usable questionnaires 262 belongs to ICICI bank’s customers and 220 belongs to SBI bank’s customers. From the total of 482 respondents, all respondents are using ATM – cum – Debit Card, 184 respondents are Credit Card users, 130 are Internet banking users, 46 are NEFT users, 40 are

RTGS users, 32 are ECS users and 48 respondents are Any branch banking users.

1.13 PERIOD OF THE STUDY

During the study period of 2007-2013, primary data was collected in the financial year 2011-2012 in which four quarterly months of June, September,

December and March were taken for the purpose of collecting primary data from the respondents in the year. Secondary data up to March 2013 were utilized for this study.

1.14 SOURCES OF INFORMATION

Both primary data and secondary data were used for the study. The secondary data was collected from different newspapers, National and

International Journals, Banking and other Magazines, Research Publications, organization reports and websites.

Questionnaire with stamped envelopes and personal interviews have been used to collect the primary data. The responses of the respondents in bank premises, ATM centers, Government and private offices, colleges and Universities were used to collect the primary sources of data in this area for the study.

1.15 FRAMEWORK OF ANALYSIS

According to the chosen methodological research approach the quantitative data was analysed using statistical methods such as percentage, chi-square test, student t-test one way ANOVA and Multiple Response Analysis.

1.16 LIMITATION OF THE STUDY

The present study is restricted to Thanjavur town due to constrain related to popularity of the growing e-banking services in this area. The survey has been conducted only among the customers of SBI and ICICI banks and the e-banking products of these banks are only taken for the study. In future the e-banking users can be selected throughout the entire Thanjavur District, taking other banks into consideration and the results can be compared and generated for the e-banking providers in India.

There are some limitations to overcome the validity, Reliability and threats, which are clearly related. The instruments used in the study are developed specifically for this research purpose. Every care has been taken to ensure the

82 validity and reliability of the instruments. However, the threats of reliability, which has close relation with the time of data collection, cannot be ruled out. Researches, who are interested to use this instrument for this purpose, can conduct a fresh reliability analysis which may help in overcoming these problems.

1.17 CHAPTERISATION

The discussion of this study is presented in seven chapters they are:

Chapter I – Introduction

The first chapter outlines the framework of the study which reviews of literature on the various research works done in the related area both in India and abroad, with focus on the statement of problem, objectives of the study, hypothesis framed, methodology adopted, sample taken up for the study, limitations and chapterization of the thesis.

Chapter II – E – Banking Products and Services

An attempt is made in this chapter to provide theoretical framework in a nutshell the historical developments of each e-banking product such as ATM,

Debit Card, Credit card, Internet banking, Mobile banking, RTGS, NEFT, ECS and various services offered under each product, growth and development of e- banking products, RBI initiatives for the development of e-banking products, fraud related to e-banking and also steps taken by RBI to avoid frauds.

Chapter III Socio – Economic Profiles of the E-banking Customers

This chapter analysis the e-banking customer’s socio – economic variables such as age, sex, educational qualification, occupation, marital status, income and other factors like preference and reason for preference of e-banking products, motivational factors influencing to select e-banking products, number of years of usage, number of times transactions done through electronic channels for the past three months and their views on safety and security of e-banking transactions and also their views on efficiency enhancement.

Chapter IV –Awareness and Utility of E-banking Services

This chapter deals with the analysis of the data pertaining to the awareness and utilization of service offered to the respondents. Only the products that offer multiple services like ATM, Debit Card, Credit Card, Internet banking, Mobile banking and Any branch banking were taken for analysis. Services are classified according to nature of service. In case of ATM the services are classified in to convenience services and value added service. The credit card services are classified as convenience service, value added service, benefit based service,

Insurance services. Based on the category of services the awareness and utilization has been assessed. This chapter analyses both descriptive and inferential methods of important statistical tools and techniques such as multiple response analysis and chi-square test.

Chapter V – Problems perceived by E-banking customers

In this chapter E-banking customers perception on various problems has been analysed. The problems related to each e-banking product has been analyzed separately and views on problems resolution and incidence have been evaluated

The problems are classified in to difference categories, such as ATM related problems, Debit card related problems, credit card related problems, Internet banking related problems, mobile banking related problems, RTGS, NEFT, ECS, and problems related to fraud. All the major classifications of problems have been analysed by using a five point Likert Summated rating scale to evaluate the e- banking customer’s perception.

Chapter VI – Customers’ Satisfaction towards E-banking Products and

Services

The six chapter deals with the analysis of data pertaining to the satisfaction of e-banking services offered to the respondents. This chapter was also finding out if there is any association between problems and satisfaction and also between satisfaction and socio-economic profiles of respondents.

Chapter VII Summary of Findings, Suggestions and Conclusion

Finally, the seventh chapter is a summary, and conclusions are outlined briefly based on the analysis and evaluation of the study. It includes the future scope for the further research.

CHAPTER II

ELECTRONIC BANKING PRODUCTS AND SERVICES

E-banking implies provision of banking products and services through electronic delivery channels. Electronic banking has around for quite some time in the form of automated teller machines. Then it has been transformed by the new delivery channels like internet, mobile etc., that has facilitated banking transactions for both customers and banks.

Delivery of banking products and services through various electronic distribution channels is collectively referred to as e-banking. It has provided opportunities for banks to expand their market and to offer new products and services. Some of these products are discussed in this chapter.

2.1 AUTOMATED TELLER MACHINE

An automated teller machine is a computerized telecommunication device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller.

An ATM is a machine in which a customer can use his/her bank card along with PIN to get cash, information and other services. On most modern ATMs, the customer is identified by inserting a plastic ATM card with magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date and or verification value.

Authentication is provided by the customer entering a personal identification number (PIN).

As ATM is an excellent customer oriented convenience product. It provides round the clock service with ease and privacy of operation. It reduces pressure on bank staff and avoids congestion in the bank premises.

2.1.1 HISTORY OF ATM

The idea of self service in retail banking developed through independent and simultaneous efforts in Japan, Sweden, the United States and the United

Kingdom. The history of ATM can be traced back to the 1960s. When a rudimentary cash dispenser was invented by Luther George Simijian and established by the city bank of Newyork 1. The machine is called Bankograph was an automated envelope deposit machine (accepting coins, cash and cheque) and did not have cash dispending feature. The concept of this machine was for customers to pay utility bills and get a receipt without a teller. However, the machine did not work much and had to be removed within six months of putting up the machine. One June 27, 1967, a Barclays bank branch in Enfield Town in

North London, debuted the first cash dispenser. The instance of the invention has been credited to John Shephard Borron. The machine was called De La Rue

Automatic cash system or DACS. It used paper voucher bought from tellers in advance as plastic cards had not yet been invented.

1en.wikipedia.org/wiki/automaticteller-machine.

On September 2, 1969, Docutel installed its Docuteller machine at

Newyork’s chemical bank. This is the first card accepting machine and the first use of magnetically encoded plastic card. Although the first card accepting ATM came about in 1969, the first ATM card did not come about until 1972. In the year between 1969 through 1972, one had to have a credit card to utilize an ATM. City

National bank of Cleveland issued the first ATM card. 2

The idea of a PIN stored on the card was developed by a British Engineer

James Goodfellow in 1965. About the same time Diebold installed its first TABS machine at a bank branch in the US and Fujitsu installed one in Japan. In 1974 online ATMs introduced. Notable historical models of ATMs include the 1BM

3624 and 473 x series, Diebold 10xx and TABS 9000 series and NCR 50xx series.

While there were many developments in the history of ATM, the service itself took a stronghold only in the 1970s. ATMs first came in to use in December 1972 in

UK. 3

2.1.2 ATM IN INDIA

ATMs were introduced to the Indian banking industry in the Mid 1980s initiated by foreign banks. HSBC was the first bank to introduce ATM in India in

1987. 4 Later new private sector banks have taken the lead in introducing ATMs in a big way. Most foreign banks and some private sector players suffered from a

2Inventors.about.com/od/astartinventions/a/atm.htm. 3.www.atminventor.com/atm-history.html. 4www.gii.in/india/history-of-atm.

88 serious handicap at that time due to lack of a strong branch network. ATM technology was used as a means to partially overcome this handicap by reaching out to the customers at a lower initial and transaction costs and offering hassle free services. Since then, innovations in ATM technology have come a long way and customer receptiveness has also increased manifold. Public sector banks have also entered the race for expansion of ATM networks. Today, all public sector banks are taking the installation of ATMs seriously for Indian market. They are either setting up their own ATM centre or entering into tie-ups with other banks.

ATMs saw a period of inaction before they were accepted by Indian masses. For instance in 1988 India had just 500 ATMs. But how, ATMs have gained prominence as a delivery channel for banking transactions. Banks have been deploying ATMs to increase their reach. As at the end of March 2013, the number of ATMs deployed in India was 1, 00,000 5. More people are now moving towards using the ATM for their banking needs. According to a survey by

BankNet India 95 percent people now prefer this modern channel to traditional mode of banking. Almost 60 percent people use an ATM at least once a week. 6

In the past, ATM devices captured customer’s transactions and sent them to the core banking system as batch updates. In todays’ increasingly connected world, customers expect their financial institution to provide single consistent view of their finance. The online support for ATM helps to meet their customer’s

5www.rbi.org.in

6news.oneindia.in

89 expectation. Modern ATM is designed to operate in a centralized multi-branch data configuration in which each ATM device is connected to an ATM host. The

ATM host passes transactions to bank vision for authorization. All transactions originating from an external network (ATM/POS) are passed through BASE24 for routing or authorization. Increased ATM usage in helped by the fact that customers have now the flexibility of using ATMs of other networks as most of the banks are part of major interbank networks like National Financial Switch (NFS), Mitr,

BANCS, Cash tree, Cash net.

2.1.3 INTER BANK NETWORK

Interbank network or shard payment network has been introduced in India in line with the recommendations of the Rangarajan committee. “Swadhan’ is the

India’s first shared payment network launched by Indian Bank’s Association. It became operational as a pilot project in Mumbai in 1998. 7

It was started with the intention of reducing the investment required to deploy ATMs. The main drawback of the network however, was that it was not hooked to a central switch and there was no core banking solution backing it. The member banks were at different levels of technology and had very few cardholders as a result of which the network became uneconomical as such Swadhan saw the end of the day effective Dec 31, 2003.

7http://www.banknetindia.com/atm/network

On 26 th July 2003, a quarterl was formed consisting of IDBI Bank, Citi

Bank, Standard Charted Bank and UTI bank under the umbrella, ‘cash net’. On the same day another shared network known ‘as’ ‘cash tree’ was formed consisting of

Bank of India, Union Bank of India, United Bank of India, Syndicate Bank, Indian

Bank.

On August 27, 2003, Punjab National Bank announced a strategic alliance with Oriental Bank of Commerce, Indian Bank, UTI bank, Global Trust Bank for sharing their ATMs spread across the country under the banner Mitr. With the closer of Swadhan effective Dec 31, 2003, the Chennai based switch company has helped the creation of new network consortium BANCS consisting of 14 from

Swadhan and five public sector banks belonging to cash tree network.

National Financial Switch was conceptualized, developed and implemented by IDRBT. The institute started off the switch by connecting the ATMs of three banks. Thereafter, the institute continuously worked towards bringing all banks on board and by Dec 2009, the network had grown to connect 49880 ATMs, of 37 banks. There by emerging as the largest network of Shared ATMs in the country.

The institute handed over the NFS to National Payment Corporation in 14 Dec

2009. As at Sept. 2013 the NFS network connects 133180 ATMs. 8

Some banks have joined more than one Shared ATM network to give their customers the choice to transact business at more locations across the country.

8http://www.dnb.co.in/BFSI Sector.india

Banks find it cheaper to pay membership fees to these networks as against starting

up additional units in expensive to deploy areas. It is also considered as an

effective marketing channel resource.

Earlier ATM was merely a cash dispending machine. But now ATMs are

seen to be more than mere cash dispensing machines. Customers use ATMs to

recharge their mobile phone, prepaid connections, pay their utility bills, even

mutual fund transactions, making them at par with flexibility given in internet

banking.

2.1.4 KINDS OF ATMs

There are different kinds of ATMs used by the banks for the customers. The

kinds of ATMs can be categorized according to the location, links, card insertion,

loading of cash and on the basis of functioning.

Kinds of ATM

Location Link Card insertion Loading Functioning of cash

Onsite Offsite Stand Dip card Motorized alone Cash Full dispenser Networked function Front Back

2.1.4.1Cash dispenser and full functioning: Cash dispenser allow customers to only withdraw cash and receive a receipt of the account balance. Full functioning

ATM is a complex machine which accepts deposit, facilitate credit card payment, utility bill payment etc. To access advanced feature of this machine, a customer usually needs to be a member of the bank that operates the machine.

2.1.4.2Onsite and Offsite: ATMs which are situated at the premises of the banks are known as onsite ATMs and the one that are located at some busy places are known as offsite ATM like railway station, bus stops, shopping malls, petrol pumps etc.,

2.1.4.3Standalone and Networked: ATMs which are not linked to the hub of the bank to which it belongs are standalone ATMs. But these are not popular now days. Net worked ATM on the other hand are those which are linked to the branch and also linked to the branches across the country means a customer of a particular bank can withdraw money from any branch of any bank at any city.

2.1.4.4 Dip and Motorized: Where the customer is required to dip the card and take it back to do the transaction is known as dip card. The sensor of the machine identifies the customer and greats him with the voice. On the other hand, motorized ATMs are very prevalent among all. In this the customer inserts the card in the machine and takes it back when the transaction is over. In some machines immediately the card is taken back whereas in some machines, the card automatically comes out when cash is withdrawn.

2.1.4.5 Front and Back: Cash has to be regularly loaded in the ATM machine. In the front loading, the door of the ATM compartment is closed and cash is loaded where as in back loading, it is done behind the ATM and a message is displayed that “please wait for some time, some services are being carried on”.

2.1.5 ATM SERVICES:

The evolutionary trend from cash economy to cheque economy and onwards to plastic economy is witnessed in the introduction of ATMs. The ATMs were born as a result of the customers need for quick and better service and to have access to money all the 24 hours. Although ATMs were originally developed just as cash dispensers, they have evolved to include may other bank related functions.

2.1.5.1 Cash withdrawal and Balance Enquiry: In spite of a number of innovative services being made available at many ATMs, cash withdrawal still remains the most accessed service at ATMs. However, the migration of routine bank transactions like cash withdrawals and balance enquires from teller counters to ATM significantly raises the potential for savings in employee costs and greater employee focus on value added revenue enhancing activities. The withdrawal limits are set by card issuing banks. The limit is displayed at the respective ATM locations.

2.1.5.2Bill Payments: Most utilities have inadequate infrastructure for receiving bill payments resulting in long queues at collection centres. Hence bill payment at

ATMs has achieved noticeable acceptance by bank customer. Most banks provide this service through bilateral arrangements with bill payment service providers.

Some bank’s ATM even accepts charitable contributions to temples and some banks provide credit card bill payment facility. It is a revolutionary service which enables the card holder to transfer money from his/her debit card to credit card any time anywhere in India.

2.1.5.3Fund Transfer: Modern ATMs are equipped with the flexibility to allow online transfer of funds between cardholders various accounts linked with his/her

ATM-cum-debit card.

2.1.5.4 Recharge Mobile via ATMs: ATMs are also used to recharge mobile phones. Initiated in 2004 by ICICI bank, now most ATM/debit cardholders are able to recharge their prepaid subscription of most mobile service providers from anywhere in the country using their banks’ ATMs by sending a SMS 9. The amount of recharge would be debited from the subscribers’ bank account and the subscription would be directly recharged accordingly.

2.1.5.5 Sale of Paper Based Products: ATMs are ideally suited to sell paper based products and services such as tickets, recharge cards, financial products etc.

The screen interface allows browsing and customization, access to bank account facilitate payment and printing capabilities produce the actual product or service.

A number of banks including ICICI bank SBI and PNB have ATMs at Mumbai local railway stations to dispense season tickets to commuters. Own bank

9http://www.banknetindia.com

95 customers pay no extra charge while other bank customers pay a fee of Rs.50 for this extremely useful service of anytime ticket purchase.

2.1.5.6Third party advertising: In India, ATM advertising for third party products is currently not allowed by regulatory authorities. However, customer wait-time at ATM while transactions get processed typically between 10-25 seconds has been profitably used by many banks for their own advertising.

2.1.5.7Cheque book requested and change of PIN : Cheque book request can be made through multi-functioning ATMs. One can also easily change PIN a security number provided at the time of opening card account. It is an important feature while considering security threats.

2.1.5.8Generate Statement of Account: Now a days there are specially designed

ATMs for instance ICICI bank ATMs which can print detailed account statement for a period as requested by the bank customer.

2.1.6 BENEFITS OF ATM FROM CUSTOMER’S PERSPECTIVE

Easy access to cash day and right on week end/ holidays. Fast service – No need to wait in queues. ATMs can be accessed in any convenient location in the city. Privacy in transaction. Free from errors. Flexibility in withdrawal,

2.1.7 BENEFITS OF ATM FROM BANKER’S PERSPECTIVE

Cost of setting ATM is much lower than setting a branch. Fewer burden on staff for cash withdrawal,

Wider choice with the bank to advertise their products through ATM. Less hassle in handling cash. Increase market penetration. Provide an alternative to extended hours.

2.1.8ATM FEE IN INDIA

In India, ATM annual fee is (Rs.100 in Government bank and Rs.500 in

private bank). In 2007, the RBI had issued a directive to all commercial banks

to freeze ATM charges and with effect from 1 st April 2009, abolish ATM

service charges all together. Earlier, banks charged between INR 10 and INR

35 per reciprocal transaction is limited. Today a person holding card of other

banks can withdraw amount from other banks’ ATMs but the amount of

transaction is limited after 5 to 6 transactions.

However, banks can still surcharge for items such as credit card ATM cash

advances and at foreign ATMs. In addition, RBI imposes significant foreign

exchange restrictions on the use of Indian debit visa, master card abroad.

In the same directive, free mutual ATM usage was requested to five free

such transactions per monthly statement cycle beyond which a cap of INR 20

has been fixed for ATM cards issued to saving bank or term deposit account

customer.

2.1.9 GROWTH AND DEVELOPMENT OF ATM IN INDIA

The ATM market in India is not yet saturated. ATMs have become an

important channel for delivering banking services in India, particularly for cash

97 withdrawal and account balance enquiry. According to National Payment

Corporation of India – nearly 200 million transactions are processed every month through NFS and 75 percent of this is simple cash withdrawal transactions. The average ticket size of withdrawal stands at Rs.3300. The balance 25 percent transactions are non – financial transactions. 10

Table 2.1 ATMs of scheduled commercial banks

Offsite Onsite Year/ Onsite Growth Off Growth Total Growth as % as % of Category Rate site Rate Rate of Total Total ATM ATM 2008-09 2464 - 19006 - 43651 - 43.5 56.40 2009-10 32679 32.59 27474 44.55 60153 37.80 45.67 54.33 2010-11 40729 65.26 33776 77.7 74505 70.68 45.33 54.67 2011-12 47545 92.92 48141 153.3 95686 119.21 50.311 49.89 2012 -13 55760 126.25 58254 206.50 1,14,014 161.2 51.09 48.91 Source: Compiled from RBI report on trend and progress of banking various issues

The above table indicates the progress made by ATMs of scheduled commercial banks for the period 2009-2013. The growth rate has remarkably increased in 2013 in case of both onsite and offsite ATMs taking the year 2009 as base year. The percentage of onsite ATM is high in the year 2008-2009. But it has declined from 54.67 percent in 2010-11 to 49.89 in 2011-12. Over the years, the relative growth in offsite ATMs has been much more than that of online ATMs. As a result by 2012-13, offsite ATMs accounted for more than half of the total ATMs in the country.

10 http://www.thehindu.com/business/industry

Table 2.2 Bank Group wise ATMs of Scheduled Commercial Banks as at end March 2013.

% of Total % of Onsite Offsite Bank Group Onsite % of Offsite Total Number total ATMs as ATMs ATM Total ATMs of % of as % ATMs total of ATM total ATM Public Sector Bank 40241 72.17 29411 50.48 69652 61.09 57.77 42.23 Nationalized Bank 20658 37.05 14701 25.24 35359 31.01 58.42 41.57 SBI Group 18708 33.55 13883 23.83 32591 28.58 57.40 42.59 Private Sector Bank 15236 27.32 27865 47 .83 43 101 37.80 35.35 64.65 Old Sector Bank 4054 7.3 3512 6.03 7566 6.64 53.58 46.42 New Private sector Bank 11182 20.05 24356 41.80 35535 31.17 31.47 68.53 Foreign Bank 283 0.507 978 1.65 1261 1.10 22.44 77.56 All banks 55760 100 58254 100 114014 100 100 100 Source: RBI report on trend and progress of banking March 31, 2013

The above table indicates bank group wise ATMs of scheduled commercial banks. The highest number of ATMs both onsite and offsite is in case of public sector banks and which is 61.09 percent of total ATMs in the country. In percent terms ATMs in case of Nationalized banks is 31.01 percent, in case of SBI group it is 28.58 percent which is more than that of old private sector banks and foreign banks. New private sector banks have major share ATMs (37.80%) as compared to old private sector bank and foreign banks in 2013.

2.1.10 LOW PENETRATION OF ATM For the ATM industry, India has huge market with vast potential. It is a country of 1.2 billion people, 40 percent of them unbanked according to RBI and VISA estimates that 91 percent of consumer purchases by banked and unbanked Indians alike are made with cash. 11

11 http://www.atmmarketplace.com

Penetration of ATMs in the country is still very low compared to other emerging markets even as the number of automated teller machines is increasing by nearly 25 percent every year. As of March 2012, the entire country had about,

90,000 ATMs to serve an enormous population. This averages out to a rate of one

ATM per 13,333 citizens. By contrast, the US has about 400000 ATMs or one

ATM for every 779 citizens more than 17 times highly than India’s ratio 12 . Part of

India’s ATM to citizen ratio problem was that only banks were allowed to own

ATMs though they were able to outsource the management of their networks.

In order to speed up the penetration the RBI announced in April 2012 that it would allow for the first time, the white labeling of ATMs in India. Under this, any non-bank entity with a network of at least Rs.100 crores is eligible to setup, own and operates ATMs. These networks will provide services to customers of Indian banks, who can use their debit card to access cash. White label operators will receive payment for use of the ATM from the bank and they will not be allowed to charge customers for transactions. 13 Of the ATMs in rural India, about 20 percent are owned by private sector banks. The ratio is expected to change with the entry of white label ATM operators.

To expand the ATM network at a brisk pace over the next few years, finance ministry has introduced Brown label system in 2011. In this system third party providers run and maintain an ATM using a bank board. 14

12 artiles://economictimes.indiatimes.com/collections

13 archive.indian express.com/news

14 www.rupeetimes.com

100

With banks outsourcing their ATM services to third party they can concentrate on core banking. There is better efficiency in ATM maintenance and certainly a speed deployment alongside low cost.

2.1.11 TECHNOLOGICAL DEVELOPMENT IN ATM

Strides in technology have blessed us with several innovations like next generation multi-function ATMs which could help financial institutions reduce their operating cost. It is designed to accept cheques without any envelope and is scalable to offer bulk cheque deposits and is in sync with RBI’s current initiative of getting banks technology ready to offer cheque truncation. 15

NCR self-serve 32 is equipped with self-healing technology to automatically recover from software failure and downtime without intervention, cutting down recovery time previously ranging from 3-4 hours to

10-15 minutes. 16

Many ATM vendor have devised specialized machines, embedded with biometric devices for authentication, catering to the rural population, these machines have enabled them to interact with the machine in their local language and on a graphical user interface. The ATM with in-built biometric capabilities had been used by Union Government to disburse wages under the

Mahathma Gandhi National Rural Employment Guarantee Programme. This

15 http://www.chase.com 16 www.hcr.com/products/banking

101 has the potential to further widen the scope of ATM usage in the interior parts of the country. 17

In an attempt to increase the convenience of customers using ATMs, banks have launched mobile ATM service. This service is meant to serve the banks’ customers when numbers of stationary ATM outlets are less. 18

Banks and many ATM vendors are very conscious of devising eco-friendly

ATMs. On Dec 19, 2009 InduSind Bank inaugurated Mumbai’s first solar powered ATM as part of its green office project campaign. The new solar ATM replaces the use of conventional energy for 8 hours a day with eco-friendly and renewable solar energy. Energy saving is accompanied by simultaneous

19 reduction in CO 2 emissions.

Banks are in the process of upgrading their ATMs to cash collecting machine which will help in channelizing a large part of cash lying with public in the banking system. NCR has come up with intelligent deposit ATMs which will give the bank’s customers the flexibility to execute every day cash deposit.

Another innovation is talking ATM. Talking ATM is a type of ATM that provides audible instructions so that persons who can’t read on ATM scheme can independently use the machine. All audible information is delivered

17 www.thehindu.com 18 www.mobilemoney.net 19 www.alternative-energy-newsinfo/solar powered-atms

102 privately through a standard headphone on the face of the machine. India’s first

‘talking’ ATM for visually impaired was inaugurated on June 6, 2012 in

Ahmedabad by Union Bank of India. 20

The future of ATM technology will see the use of machines without the cards. More banks are set to adopt a technology that allows their customers and third parties to withdraw cash from ATM without a card. This new generation of ATMs works alongside a mobile banking application that can be downloaded on to a mobile phone in order to ensure that security is not compromised. 21

2.1.12 OPPORTUNITIES AND CHALLENGES FOR ATM IN INDIA

The current scenario presents a huge opportunity for ATM deployment in

India. The future trend report 2012 of ATM Industry Association indicates that by 2015 India would be second only to China. There is a great demand from the unbanked population. 22

The RBI is asking banks to open at least one quarter of their new branch banks every year in unbanked areas with a population less than 10,000. ATM is the key plat form to reach this segment across the country. Many banks are already using human ATMs to reach its unbanked rural population. Unbanked people in India will start seeing more and more options to perform transactions, thereby bringing these people closer to financial institutions and technology.

20 timesofindia.indiatimes.com 21 www.hindustantimes.com/business 22 www.atm market place.com

103

The focus has shifted from simply installing hardware to making these

machines smarter and towards managing and serving them. On the whole, with

an emphasis on financial inclusion, rural banking, and a liberalized RBI policy

where banks are encouraged to open new branches as well as attract new

customers and also with the concept of multi-functional machines the Indian

ATM Industry is set to get smarter.

ATM security is one of the biggest concerns for the Indian banking

industry. For the physical security of ATMs, measures such as guards and

caretakers, surveillance cameras, machine grouting etc. are already prevalent.

Banks are considering DVSS (Digital Video Surveillance System) solutions to

provide additional security plan additional measures to prefect ATMs from

skimming, network, virus and access brands attacks.

RBI has quoted a federal bank report dated May 30, 2012 to state that ATM

frauds containing 487 incidents were noticed across India involving an amount

of Rs.83.35 lakh. As per the report, few persons have defrauded the bank by

taking part of withdrawal amount and allowing the balance to be taken back by

the ATM. In order to combat the menace the RBI has given approval to NPCI

to disable cash retraction feature in ATMs. 23

An increase in crime at ATM has prompted the RBI to request all banks to install remote monitoring device that would automatically alert police about ATM tampering. There is also need for a stringent policy for banks which is

23 archieve.indianexpress.com

104 happening but slowly. Factors like bad weather, poor telecommunication and network make it difficult to expand ATM network in many parts of the country.

While wireless or satellite solution exists, these data connections suffer from congestion issues and fail to offer full coverage across the country. These are some of the key challenges which have been addressed partially.

Thus, all the banks are making continuous effort to improve the ATM services because this is the service due to which electronic banking services are growing in India. Wide acceptance of ATM by consumers, introduction of biometric ATMs and increasing scope of value added ATM service will maintain growth in the industry.

2.2 DEBIT CARD

Debit card is an electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services. This removes the need for bank clients to go to the bank to remove cash from their account as they can just go to an ATM or pay at merchant locations. This type of card, as a form of payment, also removes the need for cheques as the debit card immediately transfers money from the clients account to the business account. 24

In other words, a debit card is a plastic card like a credit card by which money may be withdrawn or the cost of purchases paid directly from the holder’s account at no interest.

. 24 www.investopedia.com

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The major benefits of this type of card are convenience and security. Along

with the convenience of accessing account funds at any time it also removes

the hassles associated with writing cheques. It is also considered to be a safer

form of payment as PIN is required to access account. The debit cards are

performing the role of bank cashiers through ATM. Debit card is mainly used

for cash withdrawal from ATM, payment at POS, and also for online purchase,

paying bills etc. Banks provide debit card free of cost at the time of opening

account.

2.2.1HISTORY OF DEBIT CARD

The first debit card may have hit the market as early as 1966, according to a report by the Kansas City Federal Reserve. The Bank of Delaware piloted the card. And by the ‘70s, several other banks were trying out similar ideas. Robert

Manning, author of Credit Card Nation said debit card picked up in the ‘80s and

‘90s as more and more ATMs started cropping up across the country. 25

Credit card paved the way for debit cards. Many people used credit cards to pay for transactions. This also put in place the infrastructure that debit cards needed to be practical as a method of payment. In US Seattle’s First National Bank offered the first debit card to business executives in 1978. 26 Initially they were like a check signature or guarantee card, with which the bank would guarantee that the fund would be paid. They also required a large saving account be kept at the bank

25 www.brighthug.com/money/personal 26 www.msnb.msn.com

106 to cover the funds. These cards were only issued to people who had a long and good standing with the bank, because the funds were not directly debited from the account. These types of cards generally come with the VISA or Master card symbol on them.

In 1984 Landmark created the first nationwide debit system, using ATMs and other networks that allowed debit cards to be used nationwide. As technology improved, the debit card moved to a system that was able to directly debit the money from an account. When this happened, the debit cards became available to more and more consumers. In 1998 debit card transactions first outnumbered the use of cheques around the world. 27

In India, debit card was first introduced by Citi Bank in the year 1998 and was first launched in Bangalore. Corporation bank was the first Indian Bank to introduce debit card. 28 Though foreign and private banks were the first ones off the block in issuing debit cards, the real growth in the penetration of debit card has resulted from the entry of public sector banks.

The debit card has seen a growth zoom when banks started converting its

ATM cards in to debit cards. Debit cards have had a staid and steady growth in

India. Indians mostly use debit cards as an ATM card. In 2012, $330 billion cash was withdrawn from ATMs using debit cards. 29 In India four types of debit cards are issued by banks like VISA, VISA Electron, Master card and Maestro.

27www.marketplace.org.topics/businss 28en.wikipedia.org/wiki/debit-card 29 www.livemint.com

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2.2.2TYPES OF DEBIT CARD SYSTEM

There are currently three ways that debit card transactions are processed.

Online debit also known as PIN debit, offline debit also known as signature debit and the Electronic purse card system. 30 It should be noted that one physical card can include the functions of an online debit card, an offline debit card and an electronic purse card.

2.2.2.1Online Debit System: Online debit system requires electronic authorization for every transaction and the debits are replaced in the user’s account immediately.

The transaction may be additionally secured with the personal identification number (PIN) authentication system and some online cards require such authentication for every transaction, essentially becoming enhanced automatic teller machine cards. One important thing in using online debit cards is the necessity of an electronic authentication device at the POS and sometimes also a separate PIN pad to enter the PIN.

2.2.2.2 Offline Debit System: Offline debit cards are used at the POS like a credit card with payer’s signature. This type of debit card may be subject to a daily limit, and or a maximum limit equal to the current account balance from which it draws funds. Transactions conducted with offline debit cards require two to three days to be reflected on user’s account balance.

30 asad.debitcards.blogspot.com

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2.2.2.3 Electronic Purse Card System: Smart card based electronic purse systems in which value is stored on the card chip, not in an externally recorded account. So that machines accepting the card need no network connectivity are in use throughout Europe since the mid-1990s, most notably in German (Gold Karte),

Austria (Quick), the Netherland (Chipknip), Belgium (Proton) and Switzerland

(CASH). In Austria and Germany, all current bank cards now include electronic purse.

2.2.3 DEBIT CARD OPERATION CYCLE

To transact through debit card is easy and authentic way in which the card is swiped through the terminal with magnetic code reader. It records customer’s bank account number. Customer has to enter the PIN number in the terminal in order to perform the transaction through which information is travelled to electronic network linked to the merchant bank with the bank that issued debit card to the customer. If the transaction is approved then the customer account is duly debited and merchant account is credited with that amount. The whole process is performed instantaneously in spite the involvement of large number of parties.

Debit cards are considered effective where customers value it as convenience and merchants see it as lowering cost or enhancing sale.

2.2.4 BENEFITS OF DEBIT CARD

Debit cards offer the following benefits.

They help people to be financially disciplined, since one can’t splurge with

the limited amount of funds deposited for the card.

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A person with poor credit can obtain a debit card without too much trouble.

Debit cards can be used to make online purchase and payments.

They provide freedom from carrying cash and cheques while travelling

thereby offering more safety.

Debit cards do not charge high interest rates or fees on card transactions.

2.2.5 DISADVANTAGES OF DEBIT CARD

The threat posed by frauds is the major constrain.

One can only use as many fund as he has in account. Therefore, in case of

an emergencies, where credit is urgently needed beyond account balance, a

debit card will not be enough to meet one’s need.

2.2.6TYPES OF DEBIT CARD

Debit cards are available to fit a variety of financial needs and life styles.

The debit card market is expanding and the companies are trying to fulfill the

growing demand. For the purpose, different types of debit cards with various

features are offered by the debit card companies.

2.2.6.1PIN – only card: PIN – only cards are linked to bank account. It is used

to get cash from ATM, make deposits, transfer funds between accounts, buy

goods and services from retailers, and pay bills online. When using a PIN

enabled debit card one should enter the PIN at the ATM or at retail location. It

verifies the cardholders’ identity and increase the security of the transaction.

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2.2.6.2Dual – use Card: Dual – use Debit cards are both signature and PIN

enabled and tied directly to card holder’s bank account. Card holder can choose

to authorize a purchase by entering PIN or by signing a receipt.

2.2.6.3 Prepaid Cards: Prepaid cards are not associated with any specific

account but instead access to funds deposited directly on the card. When a

purchase is made with a prepaid card, funds are taken directly from the actual

balance on the card. One can spend only the amount of money stored on the

card.

Examples of prepaid card include:

Gift cards from a bookstore, department more or online retailer

Family or personal spending cards

Travel cards

Flexible spending or health saving cards.

Payroll cards from an employer.

2.2.6.4 EBT Card: Electronic Benefit Transfer (EBT) cards are provided by many

State or Government agencies to people who qualify for cash payment, food stamps or other benefits. Depending on the type of government programme an

EBT card may be used to make purchase at participating retailers or to withdraw cash from an ATM.

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2.2.7GROWTH OF DEBIT CARD

Indian debit card market registered significant growth. Changing lifestyle, the need for more sophisticated products, the growth of online shopping and increasing levels of per capita income supported the growth of this market. With competitive pressured on both the prepaid and debit cards market, banks and issuers are developing marketing and pricing strategies with the aim of attracting larger customer base. Offers such as cash back, discounts for retail outlets, buy one – get one free offer, reward paints, increasing daily limits for cash withdrawals, and insurance coverage are some of the most commons strategies that banks are providing to debit card customers.

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Table 2.3

BANK GROUP – WISE OUTSTANDING NUMBER OF DEBIT CARDS ISSUED BY SCHEDULED

COMMERCIAL BANKS

(Number in Millions)

Bank 2008-09 2009-10 2010-11 2011-12 2012-13 group/Year Number % of Number % of Number % of Number % of Number % of total total total total total Public Sector 91.7 66.72 129.69 71.26 170.34 74.76 214.6 76.86 260.6 78.68 Bank Nationalized 40.71 29.62 58.82 32.32 80.27 35.23 97.7 35.14 118.6 35.81 Bank SBI Group 50.99 37.10 70.87 38.94 90.90 39.53 112.0 40.23 136.4 41.18 Private Sector 41.34 30.08 47.85 26.29 53.58 23.52 60.0 21.6 67.3 20.32 Bank Old Private 7.09 5.16 9.81 5.39 12.44 5.46 13.9 5.00 15.4 4.65 Sector Bank New Private 34.25 24.92 38.04 20.90 41.14 18.06 46.0 16.52 51.9 15.67 Sector Bank Foreign Bank 4.39 3.99 4.43 2.43 3.92 1.72 3.8 1.36 3.3 0.99 All 137.43 100 181.97 100 227.84 100 278.4 100 331.2 100 Source: compiled from RBI report on trend and progress of banking in India, various issues

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The above table shows bank group wise outstanding number of debit cards issued by scheduled commercial banks as at March ending. Public sector banks have been the front runners is issuing debit cards. In 2012-13, public sector banks have highest number of debit cards issued (260.6) which is 78.68 percent of total debit cards issued by the Industry. Nationalized banks (35.81) and SBI Group (41.18) have highest percentage of cards issued as compared to private sector banks. The share of new private sector bank is higher as compared to old private sector banks. Foreign banks have 0.99 percent of total debit cards issued.

Table 2.4 Growth of outstanding debit cards in Indian banking

(Number in Millions) Year Number Net increase Growth (%)

2007-08 102.44 - -

2008-09 137.43 34.99 34.16

2009-10 181.97 44.54 32.41

2010-11 227.84 45.87 25.21

2011-12 278.4 51.56 22.63

2012-13 331.2 52.8 19.00

Average Score 26.68

Source: compiled from RBI repot on trend and progress of banking in India, various issues

The above table reveals the growth of outstanding debit card in

India for the past five years and the average score at the rate of 26.68 percent.

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From the above table one can observe that the number of outstanding debit card is growing year by year but the growth rate is not showing upward trend. The highest growth rate is reported on 2008-09 but in FY 2011-12, the rate of growth came down to 22.63 percent and in FY 2012-13, 19 percent which is below the average growth score of 26.68 percent.

Comparing the credit card and debit card usage in India, it is clear that Indians use a credit card for an average payment amount of about

Rs.55000 in a year which is nearly 30 times the money spent through Debit

Card. However, the number of debit cards in the country is more than 15 times than that of credit card shows an analysis of data available with RBI. As on

Dec 2012, as many as 31.44 crore bank customers have been issued debit cards and the number is growing at a compound annual rate of 18 percent, whereas the annual growth of credit card is just six to seven percent. With focus on more and more bank inclusion, the pace of growth is only expected to grow.

This would take the number of bank debit cards to well over 54 crore in the next three financial years. 31 Thus, debit card is taking the market share from cash and cheques and also moving in to a dominant position in traditional credit card market.

31 www.assocham.org/prels

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2.2.8 RBI INITIATIVES

As a step towards enhancing the customer convenience in using the debit card, RBI has decided to permit cash withdrawal at point of sale terminals. To start with, this is available for all debit cards issued in India up to

Rs.1000 per day. 32

The debit cards are largely being used for cash withdrawal and not much at the merchant stores, given the conservative nature of this class of customers. Cash withdrawal using debit card by cardholders were around

Rs.1,46,125 crores in Dec 2012 whereas the point of sale usage was limited to just about Rs.6909 crores monthly sales. RBI found it was necessary to encourage the use of debit cards. Especially by way of lower merchant discount rates, which would encourage all categories and types of merchants to deploy the card acceptance infrastructure and also facilitate acceptance of small value transaction.

Under the recently announced policy, the Merchant Discount Rate

(MDR) for usage of debit card should not exceed 0.75 percent of the transaction value for transaction up to Rs.2000 and not exceed one percent for transactions above Rs.2000. 33

32 www.thehindubusinessline.com

33 www.nextbigwhat.com/rbi/slashes

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An increase in the number of cases of fraud because of stolen card data through card skimming and counter feiting had prompted RBI to form a panel to look in to securing card based transactions through additional layers of authentication, such as PINs and biometrics in March 2011. As per the notification of RBI, all card present infrastructures have to be enabled for both

EMV chip and PIN and Aadhaar (Biometric Verification) acceptance. 34 EMV

(Europay – Master Card Visa) chip and PIN authentication involves card information stored in a chip that is accessible through a PIN and which replaces a cardholders signature, as per the RBI guidelines issued in September 2011.

RBI had made it mandatory to implement PIN punching at point of sale and merchant outlets. Under this system, first merchant will swipe the cards at a PIN enable POS terminal and punch in the transaction amount. That will be followed by customer’s entering their PINs to complete the transaction. 35

To increase the safety of transaction done online RBI made it mandatory that all transactions to Indian Merchants require to be authorized via

VbV/3DSC. This means, to shop online on Indian Store, one need to get his card registered on VbV/3DSC. One needs to register his visa and master card debit card online in his bank’s portal and create a password for it. For visa this

34 www.businessinsider.in

35 businesstoday.indiatoday.in

117 password is called verified by visa (VBV) for master card, this password is called ‘3D secure code’.

In order to check frauds, the RBI has asked banks to impose monetary limit for international transactions on credit and debit cards and refrain from issuing cards with global access unless specifically sought by the customer. The RBI said that a monetary limit of USD 500 be imposed by issuing bank on all global cards which has not been used in the past. All the active magnetic stripe international cards issued by banks should have threshold limit for international usage. The threshold should be determined by the banks based on the risk profile of the customer and accepted by the customer. 36

2.2.9 RUPAY DEBIT CARD

In order to support the RBI’s plan to move towards wider usage of cards and electronification of pay the Rupay card is introduced by NPCI – the card has been launched in March 2012.The Rupay card is meant to promote a payment and settlement platform for card transactions at a low processing fee, making it viable for smaller merchant establishments to accept card payment for even low-value transactions. 37 Rupay is pitched in direct competition with plastic cards issued through visa and master card and it’s are 40 percent lower compared with the latter’s.

36 www.medianama.com

37 www.mpci.org.in/Rupay

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Rupay debit card will be accepted at more than 1, 00,000 ATMs and 6 lakhs POS terminals in the country. At present around 22 banks use the

Rupay based system in the country – State Bank of India, Bank of India, Bank of Baroda, Axis Bank, the rest 18 banks comprise of Regional Rural Banks and

Cooperative banks. The Rupay debit card is only for domestic transactions as of now and it does not offer net banking services currently. Thus the Rupay card has been launched to tap in to the tremendous growth opportunity of card payment system and the use of the same as an alternative to move to the consumers away from cash. Moreover, it helps in financial inclusion as many co-operative banks and Regional Rural Banks are included in its network.

2.3 CREDIT CARD

Credit card is a small plastic card, which helps the owner of the card to settle any payments without paying cash, draft or cheques. It is a card entitling its holder to buy goods and services based on the holder’s promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer or the user from which the user can borrow money for payment to a merchant or as a cash advance to the user.

2.3.1 HISTORY OF CREDIT CARD

The concept of using a card for purchases was described in 1887 by

Edward Bellamy in his utopian novel. 38 The modern credit card was the

38 Edward Bellamy (1888) “Looking backward 2000-1887’ utopian novel, William

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successor of a variety of merchant credit schemes. It was first used in the

1920s, in the United States, specifically to sell fuel to growing number of automobile owners. In 1938 several companies started to accept each other’s cards. Western Union had begun issuing charge cards to its frequent customers, in 1921. The charge-plate was an early predecessor to the credit card and used during 1930s and late 1940s. 39

The concept of customers paying different merchant using the same card was invented in 1950 by Diners club to consolidate multiple cards. The Dinner club produced the first general purpose charge card and required the entire bill to be paid with each statement. That was followed by Carte Blanche and in

1958 by American Express which created a World Wide Credit card network.

In September 1958, Bank of America launched the Bank Americard in

California. Bank Americard became the first successful recognizable modern credit card and with its overseas affiliates, eventually evolved in to the visa system. In 1966, the ancestor of Master card established Master charge to compete with Bank Americard.

In 1966 Barclaycard in the UK launched the first credit card outside the

U.S. Credit card became an effective way for those who were travelling around the country to move their credit to places where they could not directly use

39 www.creditcards.com/credit card news

120 their banking facilities. Although, having reached very high adoption levels in the U.S, Canda and the U.K, many cultures were much more cash oriented in the latter half of the twentieth century or had developed alternative for of cashless payments. In these places, the take-up of credit cards was initially much slower. It took until the 1990 to reach anything like percentage market – penetration levels achieved in US, Canada, or the UK. 40

The value of the card to the issuer is often related to the customer’s usage of the card, or to the customer’s financial worth. This had led to the rise of co-brand and Affinity cards where the card design is related to the affinity leading to higher card usage.

As of 2007, the United Kingdom was one of the world’s most creditcard intensive countries, with 2.4 credit cards per consumer. As of 2006, the

United States probably had one of the worlds if not the top ratio of credit cards per capita, with 984 million bank-issued visa and master card credit card and debit card accounts alone for an adult population of around 220 million people. 41

Credit cards are relatively new to India. Andhra Bank and Central Bank of India introduced credit cards in 1981. As of now there are about more than dozen major banks in Indian and foreign which have entered this line of

40 www.mastercards.com 41 www.livemint.com

121 business, besides some non-banking institutions. Since the plastic money has become as good as legal tender more people are using them in their day-to-day activities. The attitude of people towards credit cards has changed.

2.3.2CREDIT CARD TYPES

Before we apply for a credit card it is always better to know what type of credit card is best suited to our profile. Catering to different types of consumer needs, credit card companies issue several types of credit cards.

2.3.2.1General Purpose Credit Card: It can be used to pay for just about anything, anywhere from clothes at department stores to meals at restaurants as well as to get cash advances. American Express, Visa, Master card and

Discover cards are examples. An advantage of using this type of card is that it combines many different types of expenses in a single bill, making payment easier.

2.3.2.2 Single Or Limited Purpose Credit Cards: It can be used only in a specific store or group of stores or for a specific purpose. Some people prefer to have separate credit account such as a gasonline credit card a credit card at a chain, or specialty stores, plus other cards.

2.3.2.3 Premium Cards: Such as Platinum or Gold cards are credit cards that offer additional benefits such as travel upgrades, special insurance exclusive seating’s for concerts. Generally premium cards require a substantial income and an excellent credit history offer a higher credit limit and may charge higher fees.

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2.3.2.4 Affinity Credit Cards: These are associated with specific organizations and offered to people affiliated with these organizations.

Generally and affinity credit card is co-sponsored by the organization it is associated with, and the organization receives a percentage of the sales or profits generated by the card. Rates, fees and benefits of affinity cards vary widely.

2.3.2.5 Co-Branded Credit Cards: These are sponsored by two companies and have benefits and rewards designed specifically for their joint customers.

2.3.2.6 Secured Cards: These are credit cards guaranteed by a bank account or deposit made by the applicant. The credit limit is based on the amount of deposit and may be the same amount or larger. Secured credit cards are useful to establish or improve a credit record particularly, if someone has never had credit or have poor credit history.

2.3.3FEATURES OF CARD

The features of modern credit cards such as owner identification, credit limit for its card holder and floor limit for its merchant establishment, convenience and safety to add value of cards, wider usage or popularity all over the world and dependence on technology to keep operation cost to the minimum, have been a runway success for credit cards. 42

42. Report of the committee on the technology issues relating to payment system, cheque, clearing and security settlement in the banking industry, RBI, Mumbai, 1994, page.75

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Along with convenient, accessible credit, credit cards offer consumers an easy way to track expenses, which is necessary for both monitoring personal expenditure and the tracking of work-related expenses for taxation and reimbursement. Credit cards are accepted worldwide, and are available with a large variety of credit limits, repayment arrangement, and other perks such as reward schemes in which points earned by purchasing goods with the card can be redeemed for further goods and services or credit card cash back. Some countries, such as the United States, the United Kingdom and France, limit the amount for which a consumer can be held liable due to fraudulent transactions as a result of the consumers’ credit card being lost or stolen. A credit card is part of a system of payment named after the small plastic card issued to the users of the system. The credit card is different from a charge card, which requires the balance to be paid in full each month. In contrast, credit cards allow the consumers to ‘revolve’ their balance, at the cost of having interest charged. Most credit cards are issued by local banks or credit unions and having the same shape & size, as specified by the ISO 7810 standard. 43

2.3.4CREDIT CARD TRANSACTION

The flow of information and money between parties in the credit cards always through the card association is known as interchange, and it consists of the following steps.

43 http://en.wikipedia.org/wiks/creditcard

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2.3.4.1 Authorization: The cardholder pays for the purchase and the merchant submits the transaction to the acquirer. The acquirer verifies the credit card number, the transaction type and the amount with the card issuing bank and reserve that amount of the cardholder’s credit limit for the merchant. An authorization will generate an approval code, which the merchant stores with the transaction.

2.3.4.2 Batching: Authorized transactions are stored in batches, which are sent to the acquirer. Batches are typically submitted once per day at the end of the business day. If a transaction is not submitted in the batch, the authorization will stay valid for a period determined by the issuer, after which the held amount will be returned back to the cardholder’s available credit.

2.3.4.3 Cleaning and Settlement: The acquirer sends the batch transactions through the credit card association, which debit the issuers for payment and credits the acquirer. Essentially, the issuer pays the acquirer for the transaction.

2.3.4.4 Funding: Once the acquirer has been paid, the acquirer pays the merchant. The merchant receives the amount totaling the funds in the batch minus the “discount rate”, which is the fee the merchant pays the acquirer for processing the transactions

2.3.4.5 Charge Backs: A charge back is an event in which money in a merchant account is held due to a dispute relating to the transaction. Charge backs are typically initiated by the cardholder. In the event of a charge back, the issuer returns the transaction to the acquirer for resolution. The acquirer

125 then forward the charge back to the merchant, who must either accept the charge back or contest it.

2.3.5 CREDIT CARD SERVICES IN INDIA

Indian credit card market is growing upwards due to the global business environment. This is not only new but also benefit to the existing and new cardholders by giving the important innovative services offered under the following heads.

2.3.5.1 Merchant Establishment Services:

Wider acceptance of credit cards, discount facility offered to the customers and quick processing of transactions for the credit card holder is the important services made by the merchant establishment at their POS. The benefits range from lifetime free card, Global emergency assistance service, discount, utility payments, travel discount & lot more.

Bank gold cards are welcomed at all merchant establishments displaying the VISA logo over 1,10,000 and master logo over 77,000 establishments across India.

2.3.5.2 Insurance Services:

Once own a credit card, there are some insurance benefits available to us who come along with the newly – issued credit card, we will find an insurance company that is offering various kinds of services. The best part is that the insurance company pays for these covers by purchasing group insurance

126 schemes. The insurance benefits include the following (i) Credit Insurance, (ii)

Personal accident insurance (iii) Lost baggage insurance (iv) Purchase protection (v) Health Insurance (vi) Protection plus (vii) Credit Shield.

2.3.5.3 Convenience Services:

The following are the important convenience services offered to the card holders.

2.3.5.3.1 Auto Debit Facility: With this facility cardholder can pay that credit card dues directly from his account but need to authorize the bank to claim the amount directly from their bank account every month and bank will credit his card account on the payment due date.

2.3.5.3.2 Payment option:

The cardholder of the respective banks may deposit cash towards their credit card payment at any of their bank even pay over the phone by calling at any of their 24 hour customer care numbers. Presently, payment through ATM is accessible for some banks. Cardholders can make online payment from his saving account to credit card account using bill pay facility.

2.3.5.3.3 E-Mail Statement: Statement online is a very simple, powerful and convenient way to access credit card statement details instantly without any postal delays.

2.3.5.3.4 Mobile Alters: Mobile alters from bank provide us with information about bank credit card even when the cardholders are on the move.

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2.3.5.3.5 Transact Online: Cardholders can access information on credit card transactions, such as payment status, request for a duplicate PIN, change of address, dial a draft, auto debit, request for ‘Add on card, access and redeem online from the Reward point, subscribe to statement by email & Subscribe to mobile alert more conveniently.

2.3.5.4 Value Added Services:

The following are the important facilities give more value for the card and its cardholders such as.

2.3.5.4.1 Utility Bill Payment / Bill Pay Service: Utility bill payment/bill pay service is simple convenient and secure way to pay utility bill such as electricity, telephone, insurance and other payments by using credit cards. The bill pay service is a simple service through which we can setup a standing instruction on Bank Credit card for payment of their utility bills.

2.3.5.4.2 Balance Transfer Facility: Bank’s Balance Transfer facility gives cardholders the option of transferring outstanding balances from one bank’s card to any other bank’s credit card.

2.3.5.4.3 Cash Advance Facility: Cash advances are convenient and easiest facility to draw cash for the cardholder’s urgency. Banks in India charge a transaction fee as well as service fee/interest charge on cash advances. The limit of cash advance is 30 percent to 40 percent of total credit limit.

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2.3.5.4.4 Dial – A Draft Facility: Cardholder can order a draft from home or office conveniently by calling their bank 24 hours customer care. The draft will be delivered to the credit cardholders mailing address. The amount of the draft will be billed in the bank’s credit card statement.

2.3.5.4.5 Cash – In – Personal Loan: Cash-in is a personal loan on credit card. The loan can be against the credit/cash limit or over and above the credit limit.

2.3.5.4.6 Express Reward Programme: Under the new express reward programme, credit cardholders spend more on this card greater are the rewards, for example ICICI bank credit cards rewards programme is an exclusive initiative aim at rewarding customer relationship with ICICI Bank.

2.3.5.6 Benefit Services:

The following credit card gives more benefit to the cardholders based on the variety of service offered by the issuers to the cardholders such as:

2.3.5.6.1 Add – On Card: Credit card holders can freely present a maximum of two add-on cards to their wife, sisters, brothers, parents or children above 18 years of age. The unique feature of an add-on card is the preset limit, which allows the customer to empower their family with the flexibility and convenience of a card that allows cardholders to control spending.

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2.3.5.6.2 Monthly Self – Set/ Pre-Set Spending Limit: The cardholder can limit their monthly spending. Any transactions over the specified ‘Special

Limit’ will be declined.

2.3.5.6.3 Temporary Credit Limit Enhancement: There will be times when cardholders feel the need for an increase in his credit limit. This enables customers to make increased purchases on their card.

2.3.5.6.4 Permanent Credit Limit Enhancement: There will be times when card holder often feels the need for an increase in their credit limit. This facility enables them to make increased purchases on card.

2.3.5.6.5 Limited Lost Card Liability: Customers are covered from any unauthorized transactions on the card after the customer’s report of loss. But customers will have to bear the charges of the transactions made before the report of the loss.

2.3.5.6.6 Revolving Credit Facility: Revolving credit is a type of credit that does not have a fixed amount of payments. Credit card allows the consumers to revolve their balances at the cost of having interest charged. Cardholders receiving the bill need not pay the entire amount. They may pay only the minimum amount and the balance is carried to the subsequent statement.

2.3.5.6.7 Interest Free Credit Period: The payment due date on the credit card is 18 days from the statement date. There is an interest free credit period ranges between 18 and 48 days. The interest free credit periods varies from one bank card to another bank card.

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2.3.5.7 General Services: The following are the important general services which gain the more advantages to cardholder convenience for safety. They are separate card for the house wife, Automatic renewal of credit cards, No fee for the registration, renewal and annual, online marketing services, photo card options and signature digitally imprinted.

Table 2.5

2.3.6. GROWTH OF CREDIT CARDS IN INDIAN MARKET

Growth of Outstanding Credit Card at the end of March (in millions)

Year Number Net Growth Increase/Decrease 2007-08 27.55 - -

2008-09 24.70 -2.85 -10.3

2009-10 18.33 -6.37 -25.79

2010-11 18.04 -0.29 -1.58

2011-12 17.7 -0.34 -1.9

2012-13 19.5 1.8 10.17

Source: compiled from RBI report on trend and progress banking in India, various issues .

The above table shows the outstanding number of credit cards issued by banks. The number of credit cards issued has declined from 27.55 million in

2007-06 to 24.70 in 2008-09. The credit cards showed a Negative growth up to

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2011-12. But in the year 2012-13 the outstanding number of credit cards has increased to 10.17 percent over the previous year.

The negative impact of the economic slowdown has clearly shown on the credit cards segment. The study of Master card’s India cards council pointed out that insufficient inputs were used to check the credit worthiness of applications and absence of annual fees encouraged customers to hold cards from multiple banks, resulting in a high level of inactive cards. Hence, none of the issuers have been aggressively marketing cards during 2008-2009. Credit card norms have been tightened. Issuers have raised the minimum income requirements across the board and also the cut-off scores for issuance on these cards.

2.3.7 AVERAGE CREDIT CARD SPENDING

The average monthly spend per card has jumped 42 percent to Rs.6322 in 2013 from 4,462 two years ago. Banks attribute the rise primarily to a payment innovation termed EMI at POS. Total spending on credit cards increased 57 percent to Rs.12380 crore in May 2013 from Rs.7880 crore in

May 2011. Part of this is due to the card industry returning to growth after four years and the number of credit cards rising to 1.95 crores from 1.76 crore. 44 It is consumerism that is driving the size of transactions with the introduction of

EMI at POS.

44 times of India.indiatimes.com/business

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In recent years, several new entities have started accepting card payments. These include insurance companies and Government utilities. But the biggest driver for increase in size of transactions has been the zero-interest

EMI option. Another driver is that banks are getting innovative with their reward programs.

Card companies are today in a much better position to extend credit than they were five years ago. First, there has been a dramatic fall in willful defaults as customers realize that a bad credit record with a credit information bureau is worse than saving a few thousand rupees by refusing to pay. Secondly, banks have learned their lessons after 2007 when defaults in personal loans peaked; instead, they now issue cards largely to their own customer base.

2.3.8 CREDIT CARD SECURITY

Credit card security relies on the physical security of the plastic card as well as the privacy of the credit card number. Credit card fraud is a major white collar crime that has been around practice for many decades. Most internet fraud is done through the use of stolen credit card information which is obtained in many ways, the simplest being copying information from retailers, either online or offline.

There has been a rise in case of credit cards being used fraudulently on the internet. According to the cyber-crime statistics, a total of 20 cases of credit card fraud have been reported during March to August 2011. Statistics from the

Internet

133 crime compliant centre show that there has been a significant upward trend in fraud reporting between the Agency’s inception in 2000 and its most recent figures in 2010. 45

The Central Bank has done its best to ensure that transactions in India are completely secure. It had earlier told banks to have an additional PIN based authentication for credit card numbers. It has also told acquiring banks to ensure that all acceptance devices can read EMV cards. Bankers say that there has been a sharp drop in fraudulent usage of cards in India. However, the problem is in international transactions. The RBI in its recent report indicated that it would like to bring in a system under which a credit card holder is not liable for transactions done fraudulently using his card 46

2.4 INTERNET BANKING

Internet baking that is also known as online banking is an outgrowth of

PC banking. It is one of the emerging services. Internet banking can be defined as a facility provided by banking and financial institutions that enables the user to execute bank related transactions through internet.

Net Banker defines a true internet bank as one that provide account balances and some transactional capabilities to retail customers over the World

Wide Web. Internet banks are also known as virtual, cyber, net, interactive or web banks.

45 www.businessweek.com/credit card-data-security

46 www.thehindubusinessline.com

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Internet banking refers to the deployment over the Internet of retail and wholesale banking services. It involves individual and corporate clients and includes bank transfers, payments and settlements, documentary collections and credits, corporate and household lending, card business and some others

(UNCTAD, 2002) 47

Online banking allows people access all of their account through a secure bank – created website. In internet banking system the bank has a centralized database that is web enabled. All the services that the bank has permitted on the internet are displayed in menu. Any service can be selected and further interaction is dictated by the nature of service.

2.4.1 EVOLUTION OF INTERNET BANKING

The precursor for the modern home online banking services were the distance banking services over electronic media from the early 1980s. The term online became popular in the late ‘80s. The concept of internet banking has been simultaneously evolving with the development of the World Wide Web.

Programmers working on banking database came up with ideas for online banking transactions. The creative process of development of these services was probably sparked off after many companies started the concept of online shopping. Online services started in New York in 1981, when four of the city’s major banks offered home banking services using the videotext system.

47 United Nations Conference on Trade and Development (UNCTAD) (2002) E-commerce and development report 2002 (Newyork & Geneva, United Nation)

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Because of the commercial failure of videotext these banking services never become popular. In 1983, the Nottingham Building Society launched the first

Internet Banking services in United Kingdom. This service formed the basis for most of the Internet banking facilities that followed. This facility was not very well-developed and restricted the number of transactions and functions that account holders could execute. The facility introduced by Nottingham Building

Society is said to have been derived from a system known as Prestel that is deployed by the postal service department of United Kingdom. 48

The first online banking service in United States was introduced in

October 1994. The service was offered by Stemford Federal Credit Union, which is a financial institution. Deutsch Bank launched the very first internet banking project in Latin America in 1996.Internet banking is not limited to a physical site. Some internet banks exist without physical branches for example

Tele bank (Arlington, Virginia) and Bank net (UK). Security First Net Bank

(SFNB) which was formed in 1996 in the US claims to be first Internet-only bank in the world. In some cases, web banks are not restricted to conducting transactions within national borders and have the ability to make transactions involving large amount of assets instantaneously. 49

In India, ICICI bank was the first bank to initiate Internet Banking

Revolution as early as 1997 under the brand name ‘Infinity’. Other private sector banks like Citi Bank, InduSind bank and HDFC bank started offering

48 http://www.buzzle.com/articles/history-of-internet-banking.

49 en.wikipedia/org/wiki/online-banking

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internet services in 1999. The period between 1996 and 1998 is marked as the adoption phase. The usage of internet banking services increased only in 1999, owing to lower ISP online charges, increased PC penetration and a tech- friendly atmosphere. 50 State Bank of India launched its services in July 2001.

Other Public Sector banks like Bank of Baroda, Allahabad Bank, Syndicate

Bank and Bank of India also rolled its services during the same time.

Internet banking services are offered in three levels, the first level is of a bank’s informational website, wherein only queries are handled; the second level includes simple transactional websites under which no fund based transactions are allowed to be conducted. Internet banking in India has reached level three, offering Fully Transactional websites, which allows for fund transfers and various value added services.

Internet Banking poses high risks. This has restrained the development of internet banking in India. The guidelines governing internet banking operations in India covers a number of technical, security and legal issues to be addressed relating to Net banking. According to the earlier guidelines, all internet banking services had to be denominated in local currency, but now, even foreign exchange services, for the permitted transactions can be offered through internet banking.

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Internet banking can be offered only by banks licensed and supervised in India, having physical presence in India. Overseas branches of Indian banks are allowed to undertake internet banking only after satisfying the host supervisor in addition to the home supervisor.

Internet banking is gaining popularity and transactions through net banking have been steadily increasing. Internet penetration is the main driving force. The number of internet users has reached 205 million in October 2013 as many as, 7 percent of account holders in the country are using the internet for banking transactions. 51 The primary drivers of internet banking in India include.

Improve customer access. Facilitate the offering of more services. Increase customer loyalty. Attract new customers. Provide services offered by competitors Reduce customer attrition.

2.4.2 INTERNET BANKING SYSTEM

The Reserve Bank of India constituted a working group on internet banking. The group divided the internet banking services in India in to three types based on the levels of access granted. They are:

51 http://www.businessstandard.com / article/finance/account -holders-in-India.

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2.4.2.1 Information only system: General purpose information like interest rate, branch location, bank products and their features, loan and deposit calculations are provided in the bank’s website. There exist facilities for downloading various types of application forms. The communication is normally done through e-mail. There is no interaction between the customer and bank’s application system. No identification of the customer is done. In this system, there is no possibility of any unauthorized person getting in to production systems of the bank through internet.

2.4.2.2Electronic Information Transfer System: The system provides customer specific information in the form of account balance, transaction details and statement of accounts. The information is still largely of the ‘read only’ format. Identification and authentication of the customer is through password. The information is fetched from the bank’s application system either in batch mode or off-line. The application systems cannot be directly accessed through the internet.

2.4.2.3Fully Electronic Transactional System: This system allows bi- directional capabilities. Transactions can be submitted by the customer for online update. This system requires high degree of security and control. In this environment, web server and application systems are linked over secure infrastructure. It comprises technology covering computerization, networking and security, inter-bank payment gateway and legal infrastructure.

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2.4.3 SERVICES OFFERED THROUGH INTERNET BANKING

The customers would conduct a variety of transactions through internet banking facility which includes, account information, fund transfer, bill payment, cheque book request, credit card payment etc.

2.4.3.1Fund Transfer: One can transfer any amount from his account to another of the same or any other bank. Once the customer login to his/her account, he need to mention the payees’ account number, bank and branch. The transfer will take place in a day or so. ICICI bank says that online bill payment service and fund transfer facility have been their most popular online services.

2.4.3.2 Bill Payment Service: It facilitates payment of electricity and telephone bills, mobile phone, credit card and insurance premium bills as each bank has tie-ups with various utility companies, Service providers and insurance companies, across the country. To pay bills, the customer needs to complete a simple one time registration for each biller. The customer can also set up standing instructions online to pay recurring bills automatically.

2.4.3.3. Credit Card Customer Service: With internet banking, customers can not only pay their credit card bills online but also get a loan on their card. He can report lost card online.

2.4.3.4 Railway Pass: Indian Railways has tied-up with banks and the net banking customer can make railway pass for local trains online. The pass will be delivered to customers at his door step.

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2.4.3.5 Investing through Internet Banking: Net banking customers can open fixed deposit online through fund transfer. Investors with inter linked

Demat account and bank account can easily trade in the stock market and the account will be automatically debited from their respective banks accounts and the shares will be credited in their Demat account. Moreover, some banks even give the facility to purchase funds directly from the online banking system.

2.4.3.6 Recharge Prepaid Phone: One can top-up his/her prepaid mobile cards by logging in to internet banking. By just selecting the operator’s name, mobile number and the amount of recharge, the phone is again back in action within few minutes.

2.4.3.7 Shopping: With a range of all kinds of products, net banking customers can shop online and make payment conveniently. He can also buy railway and air tickets through internet banking.

2.4.4 BENEFITS OF NET BANKING

The most important factors encouraging consumers to use online banking are lower fees followed by reducing paper work and human error, which subsequently minimize disputes.

Internet banking offers many benefits to banks and their customers. The main benefits to banks are cost saving, reaching new segments of population, efficiency, enhancement of banks reputation and better customer service and enhancement. The internet increases the power of the

141 customer to make price comparison, as a consequence this pushes prices and margins downward. The customer can visit the websites and can compare the services offered by a bank with that of another. The benefits of

Internet have caused the financial institution to view internet as more than a marketing communications tool and to begin successfully employ the internet as a new channel for their services.

2.4.4.1BENEFITS TO BANK

2.4.4.1.1 Cost efficiency: Banks can deliver banking services on the net at transaction cost far than traditional brick and mortar branches.

2.4.4.1.2 Geographical Reach: Internet banking allows expanded customer contact through increased reach. In fact some banks are using the internet as an alternative delivery channel to reach existing customer and attract new customer.

2.4.4.1.3 Relationship building and Branding: Internet banking technology and products provide a means for banks to develop and maintain an ongoing relationship with their customer by offering easy to access to a broad array of products and services. This helps to build customer loyalty, cross-sell and enhance business.

2.4.4.1.4 Improve customer service: Internet banking increases competition within the banking system and also from the non-bank financial institution. The competitive pressure help banks to introduce new array of service and improve customer service.

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2.4.4.2 BENEFITS TO CUSTOMERS

Benefits of internet banking to customers may be summarized as:

2.4.4.2.1 Convenience: Unlike corner bank, online banking sites never close, they are available 24 hours, a day, seven days a week and they are only a mouse click away.

2.4.4.2.2Cost: According to industry exports, a bank spends an average of

Rs.40 for each transaction conducted at a branch. If a customer uses the ATM facility, the cost drops to Rs.18.20 per transaction, but it is still much higher than the cost involved in online banking. In order to promote net banking the financial institutions offer certain services for free or charge a nominal amount.

2.4.4.2.3 Transaction speed : Online bank sites generally execute and confirm transactions at or quicker than ATM processing speeds

2.4.4.2.4 Efficiency: One can access and manage all of his bank accounts even securities from one secure site.

2.4.4.2.5 Effectiveness: Many online banking sites now offer sophisticated tools, including account aggregation, stock quotes, rate alerts and portfolio managing programs to help customers to manage all of his assets more effectively.

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2.4.5 RISK ASSOCIATED WITH INTERNET BANKING 52

A major driving force behind the rapid spread of Internet banking all over the world is its acceptance as an extremely cost effective delivery channel of banking services, as compared to other existing channels. However, internet is not an unmixed blessing to the banking sector. Along with reduction in cost of transactions, it has also brought about new orientation to risks and even new forms of risks to which banks conducting internet banking expose themselves.

2.4.5.1Operational Risk: Operational risk, also referred to as transactional risk is the most common form of risk associated with internet banking. It takes the form of inaccurate processing of transactions, non-enforceability of contracts, compromises in data integrity, data privacy and confidentiality, unauthorized access or intrusion to banks systems and transactions etc. Such risk can arise out of weakness in design, implementation and monitoring of banks information system.

2.4.5.2Security Risk: Security risk arises on account of unauthorized access to a bank’s critical information stores like accounting system, risk management system, portfolio management system etc. A breach of security could result in direct financial loss to the bank. For example, hackers operating via internet could access, retrieve and use confidential customer information and also can

52 www.rbi.org.in

144 implant virus. This may result in loss of data, theft of or tampering with customer information, disabling of a significant portion of banks internal computer system thus defying service etc., Other related risks are loss of reputation, infringing customer’s privacy and its legal implications etc.

2.4.5.3 System architecture and design risk: Appropriate system architecture and control is an important factor in managing various kinds of operational and security risks. Banks face the risk of wrong choice of technology, improper system design and inadequate control processes. Choice of appropriate technology is a potential risk banks face. Technology which is out dated not scalable or not proven could lead the bank in investment loss, a vulnerable system and inefficient service with attendant operational and security risks and also risk of loss of business.

2.4.5.4Reputational Risk: Reputational risk is the risk of getting significant negative public opinion, which may result in critical loss of funding or customers. It may be due to banks’ own action or due to third party action. The main reason for this risk may be system or product not working to the expectations of the customers, significant system deficiencies, significant security breach, inadequate information to customers about product use and problem resolution procedures, significant problem with communication network that impair customers’ access to their funds and accounts.

2.4.5.5 Legal Risk: Legal risk arises from violation of or non-conformance with laws, rules, regulations, or prescribed practices, or when the legal rights

145 and obligations of parties to a transaction are not well established. Other reasons for legal risks are uncertainty about the validity of some agreements formed via electronic media and law regarding customer disclosures and privacy protection.

2.4.5.6 Money laundering risk: As Internet banking transactions are conducted remotely banks may find it difficult to apply traditional method of detecting and preventing undesirable criminal activities. Thus banks expose themselves to the money laundering risk. This may result in legal sanctions for non-compliance with know – your customer laws.

2.4.5.7 Cross Border Risk: Internet banking is based on technology that, by its very nature, is designed to extend the geographic reach of banks and consumers. Such market expansion can extend beyond national borders. This causes various risks. It includes legal and regulatory risks, as there may be uncertainty about legal requirements in some countries and jurisdiction ambiguities with respect to the responsibilities of different national authorities.

2.4.5.8 Strategic Risk : This risk it associated with the introduction of new product or service. Degree of risk depend upon how well the institution has addressed the various issues related to development of a business plan, availability of sufficient resources to support this plan, credibility of vendor and level of the technology used in comparison to the available technology etc.

2.4.5.9 Credit Risk: It is the risk that a counter party will not settle an obligation for full value, either when due or at any time thereafter. Banks may

146 not able properly evaluate the credit worthiness of the customer while extending credit through remote banking procedure which could enhance the credit risk.

2.4.5.10 Liquidity Risk : It arises out of a bank’s inability to meet its obligations when they become due without incurring unacceptable losses, even though bank may ultimately be able to meet its obligations. It is important for a bank engaged in electronic money transfer activities that it ensures that funds are adequate to cover redemption and settlement demands at any particular time. Failure to do so will expose the bank to liquidity risk.

2.4.6 STATUS OF INTERNET USAGE AND INTERNET BANKING IN

INDIA

Internet banking in India began taking roots only from the early 2000s.

Experts believe it took eight to 10 years for online banking to take off and mature . Slowly but steadily, the Indian customers are moving towards internet banking. In a survey conducted by IAMAI in 2006, the estimated number of internet users as of September, 2006 was 37 million and the number of active users was pegged at around 25 million. The survey also estimates around

2.4million e-commerce users, which included internet banking users. As estimated, 4.6 million Indian internet users availing internet banking services as of 2007. 53

53 www.iamai.in/research.aspx

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In 2009, 63 million Indian are using the internet, representing a mere 5.2 percent of the country’s population. The survey of IAMAI for 2009-10 shows some interesting results. It appears that a growing number of Internet users live in India’s small and medium sized urban centres and not in metros as commonly perceived. Of the total users in 2009, for instance, 34 percent lived in the top 8 metros, 18 percent in large towns, 12 percent in towns and a surprising 36 percent, the largest group in towns with below 5 lakh population.

According to a report by global management consultancy MCKinnsey&

Company (2011), as many as 7 percent of account holders in India, are using the internet for banking transactions, while branch banking has fallen by a full

15 percentage points. Use of the internet for banking has seen a massive rise in the year 2010-11, a seven fold jump since 2007 even as for the first time in the past 13 years. It has suggested that banks could also implement technologies like adaptive authentication etc., for fraud detection. In 2007, the number of times Indian respondents visited the bank branch for doing transaction was 0.58 while the same in 2011 was 0.49. Branch usage has dropped by 27 percent on an average across Asia, between 2007 and 2011 54. According this survey of

IAMAI India leads growth in Asia in mobile and internet usage for banking.

India’s Internet subscriber base was 198.30 million at the end of June

2013, growing 20 percent over the previous quarter according to a report by the

54 internet impact in India, www.mckinsey.com/insights /automating

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Telecom Regulatory Authority of India (TRAI). At the same growth rate,

India’s Internet population will be bigger than that of the US in the next few quarters, which was about 260 million users. 55

A recent research report by the Internet and Mobile Association of India

(IAMAI) estimates the number of Internet users at 205 million in October and estimates it to swell to 213 million by the end of 2013. The number of Internet users in rural India too is growing. India had 68 million rural users and the number is expected to grow to 72 million by the year end. According to the report, only 9 percent of the active internet users transact online.

Even though India is tipped to outgrow the US in total subscriber base, penetration is still low at only 12.6 according to the World Bank’s World

Development Indicator. China’s internet user base is almost thrice than that of

India. As the standard of living in India improves, the Internet penetration too is on the rise. It is predicted that the growth of internet users will be in excess of 15 percent per year and continue to grow in the subsequent years.

Clearly, the desire to be connected and use technology is widespread.

The delivery of government services via internet, e-commerce, and ease of access to information, popularity of social networking among youth, a higher

55 www.thehindu.com/sci/internet

149 presence of e-kiosks, mobile phone penetration and affordable plans from the

ISPs are all contributing factors to this phenomenon. However, with a very low awareness level, online transaction is still in its infancy and there is a pressing need to educate and inform the user of the benefits of the internet services to drive the growth of internet usage for transactions.

2.4.7 SAFETY AND SECURITY OF INTERNET BANNKING

Internet banking systems have security features such as separate transaction passwords, two factor authentication, multi-channel process for registering payees, upper limit on transaction value and SMS alerts to customers.

The benefits of net banking, not withstanding, a lot of people balk at availing of this option because of the concerns about the security of online transactions, especially in an age where phishing and online frauds is on the rise.

Online banking threats claimed around 2900 victims from India in the second quarter of 2013 as the world reeled under attack from inexpensive and sophisticated malware tool kits used by cyber criminals, according to PC security firm Trend Micro. Total online banking infections in Q 2 were 1,

45,000 of which 2 percent were from India which comes to know about 1,900 online banking infections from India. Malware or malicious Software is used

150 by attackers to disrupt computer operation, gather key data, or gain access to private systems. 56

RBI has announced measures to prevent online frauds. It has asked banks to introduce additional factor of dynamic authentication. It has recommended the one time password method for authentication and asked banks to capture Internet Protocol (IP) address as an additional validation check. For people who are scared of using net banking for online shopping due to fear of fraud, state bank of India has introduced a virtual card that addresses all such concerns. This electronic card can be created by the account holder using SBI’s net banking facility for e-commerce transactions and he is not required to share details of the principal account on the merchant website thus insulating the account from any possible fraud. The new product is a convenient and secure gate way to online payment for all internet banking users.

2.5 MOBILE BANKING

Mobile banking also known as M.- Banking is a term used for performing balance checks, account transactions, payments etc., via a mobile device such as mobile phone or Personal Digital Assistant (PDA). Mobile banking is most often performed via SMS or the mobile internet but can also use special programs, called clients, downloaded to the mobile device.

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Mobile banking refers to provisions and availability of banking and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information.

2.5.1EVOLUTION OF MOBILE BANKING

The first mobile banking and payment initiatives were announced during

1999. The first major deployment was made by a company called pay box financially supported by Deutsche bank. This company successfully deployed the solution in Germany, Austria, Sweden, Spain and the U.K. At about 2003 more than a million people were registered on pay box and the company was rated by Garther as the leader in the field. Another early starter and also identified as a leader in the field was a Spanish initiative, called Mobi Pago.

The name was later changed to Mobi pay and all banks and mobile operators in

Spain were invited to join. The product was launched in 2003 and many retailers were acquiring to accept the special VSSD payment confirmation.

Because of the complex shareholding and the constant political challenges of the different owners, the product never fulfilled the promise that it had. With no marketing support and no compelling reason for adoption, this initiative is flounder at the moment. Many other large players announced initiatives and ran

152 pilots with big fanfare, but never showed traction and all initiatives were ultimately discontinued. Initiatives in Norway, Sweden and France never got traction. 57

France telecom launched an ambitious product based on a special mobile phone with an integrated card reader. The solution worked well, but never became popular because of the unattractive, special phone that participants needed in order to perform these payments. Since 2004, mobile banking and payment industry has come of age. Successful deployments with positive business cases and big strategic impact have been seen.

The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of the first primitive smart phones with WAP support enabled the use of the mobile web in 1999.

European banks were the first one to offer mobile banking on this platform to their customers. Apple’s initial success with i phone and the rapid growth of phones based on Google’s Android operating system have led to increasing use of special client programs called apps, downloaded to the mobile device. With the advancements in web technologies such as HTMLs, CSS 3 and Java Script have seen more banks launching mobile web based services to complement native applications. 58

57 m-banking.blogaspot.com/2007/perspective-on-history 58 en.wikipedia.org/wiki/mobile-banking.

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In different countries, mobile banking has already gained its popularity.

For example in the South Korean market LG Telecom teamed up with

Kookmin Bank to provide their mobile banking service in 2004 and since then have seen a nice and steady growth

Mobile banking services in India started with SMS banking way back in

2002. Reliance Infocom has started providing mobile banking services to ICICI bank and HDFC bank through their R. world environment. With an increasing mobile subscriber base in India, mobile banking has picked up steam in recent years. Recognizing the potential of mobile banking, Reserve Bank of India issued the first set of guidelines in October 2008. The guidelines defined mobile banking as undertaking banking transactions using mobile phones by bank customers that involve credit or debit to their accounts. This definition in a sense provided larger canvas to mobile payments which in a narrow sense involved only payment made for a product or service using the mobile phone either remotely or at the point of sale. The RBI has consciously adopted the bank – led mobile banking model. The bank led model has also been endorsed by the Inter – Ministerial Group of the Government of India constituted in

November 2009. 59

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With the advent of smart phones and ever growing usage of internet on mobile handsets, application based banking has emerged as a new concept within this space. Other than SMS banking, banks are now offering banking services on mobile handsets through WAP – based internet web links and application based mobile banking services.

Today more than half the population in India has a mobile phone. As at end March 2013, 55 banks with a customer base of around 23 million were providing mobile banking service in India. Huge growth in Mobile phones, affordability of hardest, and well-designed rates and tariffs by telecommunication companies have made mobile phone available for everybody. Indeed the same has become life blood for mobile banking in

India. 60

2.5.2MOBILE BANKING SERVICES

Mobile banking is one of the three major pillars of revolutionary improvement in the quality of service delivery of banks. Mobile banking is simply performing banking transactions with the help of mobile phone. Using mobile phone is a very common practice. Commercial banks are exploring this opportunity to make their services more convenient for their customers.

Growing number of mobile subscribers in the country is the most valuable

60 www.business today.intoday.in/money/banking

155 support behind the success of mobile banking. Mobile banking can be done either through SMS, through browsing the internet on the cell phone or through apps.

2.5.2.1SMS Format: In the SMS format, the bank gives a particular code, which needs to be sent to a designated number and a response, is received from the bank. These can be balance enquiry, stop cheque, account statement and other such services.

2.5.2.2Browsing Method: In the browsing method, a particular bank’s website can be accessed with the help of customer identification and net banking password which is the same used for internet banking. However, the site for mobile banking at times is different from what is seen on the computer and users may take time to adjust. According to Internet and Mobile Association of

India, the number of mobile internet users increased to 87.1 million by

December 2012 and is expected to hit 92.9 million by March 2013.

2.5.2.3 Unstructured Supplementary Service Data (USSD) – based mobile banking:

The USSD platform offers a common gateway to customers of all banks to easily access and use mobile banking services. In this method customer dial a two digit number prefixed with a star sign and followed by a hash tag. In simple term, USSD services enable an operator to communicate with users, as is the case with Airtels’ *121# service. Users can perform basic banking operations through this. The department of telecommunication has asked all

156 telecom companies to reserve *99# for USSD-based financial services. The major advantage of USSD is that the IMPS could become accessible even through low – end hand – sets. With this platform banking service is now available on non-java mobiles without GPRS connections. It is currently available with Aircel, Idea, MTNL, Vodafone and Tata Docomo connections.

The service is session based and requires a response from the user within a reasonable time. The daily transaction limit is Rs.1000 per customer with an overall calendar monthly limit of Rs.5000. Functionalities like fund transfer within the bank, Enquiry services (Balance enquiry/mini statement) and mobile top-up are available in USSD based services. TRAI has mandated a tariff ceiling of Rs.1.50 per USSD mobile banking transaction that the telecom firm would collect from subscribes. 61

2.5.2.4Mobile Banking Services over Application/Wireless Application

Protocol (WAP):

This service is available on Java enabled mobile phones over SMS or

GPRS where the user is required to download the application on to the mobile handset. The service can also be availed via WAP on both java and non-java phones with GPRS connection. The mobile banking service will be available to all the customers having current / savings bank account. The customer will

61 www.medianama.com

157 have to register for the service. Daily transaction limits for fund transfer or bill or merchant payment is Rs.50,000 per customer with an overall calendar month limit of Rs2, 50,000. This service is a carrier-agnostic that is all customers can avail the mobile banking service with the bank irrespective of the service provider for their mobiles. The service is free of charge. However, the cost of

SMS or GPRS connectivity will have to be borne by the customer.

The functionalities available in the application based services/WAP are:

Fund transfer within and outside the bank using NEFT.

Enquiry services (Balance enquiry, Mini Statement) and cheque book

request.

Demat enquiry service.

Bill payment (utility bills, credit cards, and Insurance Premium

payments), Donations and subscriptions.

M-Commerce (Mobile Top ups, Top up of direct to home, merchant

payment).

2.5.2.5Mobile Wallets: The mobile wallet is a prepaid instrument issued in

electronic form which resides on the mobile phone. Seeing the potential of

mobile wallets, RBI has laid down an enabling regulatory framework for

such instrument. Simply put, the mobile wallets being issued in India are e-

money products and can be used for purchase of goods and services. Mobile

wallets can also be used for fund transfers where the holder has been

subjected to a fully compliant KYC. The only difference in mobile wallets

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issued by non-banks in India and other countries is that cash-out is not

permitted in India, as it is akin to acceptance of demand deposit.

Ten entities have been authorized to issue mobile wallets, of them; one is a subsidiary a leading telecom player. Several others are in the pipeline with three to four of them being leading telecom players. As on September 2012, the only telecom operator which offers something close to a mobile wallet in India is Airtel. The operator has partnered with Axis bank to offer Airtel money through which one can send money to other Airtel money customers, recharge mobile phone, digital television and pay utility bills. India’s largest bank, the

State Bank of India has also launched similar services called SBI Mobi cash.

2.5.2.6 Inter – Bank Mobile Payment System (IMPS): The IMPS is a mobile based remittance system which is inter-bank in nature and is owned and operated by the National Payment Corporation of India (NPCI). The IMPS facilitates access to banks accounts and transfer of funds through mobile phones. The system launched in November 2010, provides real time transfer of funds between the customers of different banks on 24x7 basis. In other words, funds can be transferred any time to the beneficiary who receives the funds instantaneously and both the sender and receiver get the confirmation of debit and credit. Fifty (50) banks have started providing IMPS service to their customers and as at the end of March 2012; banks have issued 36.32 million

Mobile Money Identifiers (MMID) to their customers.62

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2.5.2.7Mobile Linked Kisan Credit Card (M-KCC):

Mobile linked Kisan credit card was launched by NABARD on a pilot basis on October 2012, in Villupuram District of Tamilnadu for the farmers having KCC accounts with the Pallavan Grama Bank. The M-KCC using mobile technology enables farmers to carryout purchase of agricultural input in a cashless manner. All transactions are carried out through mobile phones of farmers and vendors registered with the bank and technical service provider.

The transaction is performed through a combination of a secured SIM card and a PIN using an interactive voice recording /SMS system. This enables the farmers to buy agriculture inputs by putting through the transactions through a mobile phone enabled system linked to the bank Core Banking Selections

(CBS). 63

2.5.3ADVANTAGES OF MOBILE BANKING

Mobile banking has lot of advantages for both, service providers and those who avail services. It has really become multi-beneficial.

2.5.3.1Advantages to Banks :

Banks do not require much investment and they need not to modify their existing infrastructure.

Mobile banking also helps banks to make good relations with their

customers. In mobile banking the banks get valuable database of the

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customer which helps them in effective customer relationship

management practice. It facilitates in quick feedback and help in

customer retention and customer loyalty.

Mobile phone provides a way to reach out people in isolated areas.

When banks have database of their customers they can use SMS

advertising to give information about their services to their existing

customers. This also solves the purpose of promotion and may also help

in communicating new services.

2.5.3.2Advantages to Customers:

Customers enjoy any time anywhere banking with the help of their

mobiles.

They need not stand is queues and need not worried if the branch is not

at convenient location.

As mobile banking is cost effective for bankers it is cost effective for

customers also.

The information can also be stored automatically in mobile as a proof in

the form of SMS whether sent or received.

2.5.4 STATUS OF MOBILE BANKING IN INDIA

Mobile banking is enjoying a rapid growth in India. It has successfully crossed the introduction stage. The service is being channelized from metropolitan cities to urban areas and semi urban areas and then to the rural areas. Transactions in mobile banking have been showing an uptrend.

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During February 2012, more than 2.8 million transactions for close to

1961.23 million were transacted, a 300 percent increase in volume and more than 200 percent in value terms as compared to 0.7 million transactions for close to Rs.616.19 million during February 2011. As at end March 2013, 55 banks with a customer base of around 23 million were providing mobile banking service in India compared to 49 banks and a 13 million customer base at the end of March 2012. During 2012-13, 53 million transactions valued around 60 billion were transacted, thus registering a growth of 108 percent and

229 percent, respectively, over the previous year. The removal of transaction limits on mobile banking and the raising of limits for transactions that can be sent without end-to-end encryption have contributed to this increase. 64

The Reserve Bank of India has reported that the number of mobile banking transactions in India has increased by 6.01 percent to 7.1 million transactions for the month of September 2013 up from 6.76 million transactions reported in August 2013.The total amount transacted for the month has also increased by 10.85 percent to Rs.1565 crore from Rs.1412.7 crore in August

2013. 65

It is worth noting, that May 2013 registered a significant month on growth in both number of transactions and the amount transacted. The number

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162 of transactions increased to 6.87 million transactions from 6.33 million in April

2013, while the amount transacted increased to Rs.1.19 crore from Rs.0.99 crore in April 2013.

As a result, the average amount, transacted increased to Rs.1,738.87 on

May 2013 from Rs.1558.71 in April 2013 and has been showing a growth ever since, except for June 2013 when the amount declined to Rs.1730.52 due to a dip in the number of transactions and a minor dip in the amount transacted.

Though mobile banking is synonymous with the word convenience banking, its usage is not anywhere close to its potential. According to National

Payment Corporation of India, almost 90 percent of the mobile transactions are done for bill payments and mobile top ups. A small fraction of the remaining

10 percent is for inter-bank fund transfer and rest for intra-bank fund transfer.

Among other services, ticket booking is also prevalent among them who avail mobile banking facility. A bulk of the mobile banking is used for enquiries such as balance status or service products such as new cheque book issuance. Among the financial services, mobile top-ups are on the top. Next could be movie ticket or air ticket booking.

According to the survey conducted by ACI World Wide, Mobile banking has really caught up in India. India cores in Second in terms of making payments on mobile. Mobile banking is increasingly being seen as a tool for differentiation in customer servicing by banks. To provide customers a “mobile

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Wallet” is being seen as one of the top priorities for banking institutions in the near future. 66

Experts are hopeful about the future of mobile banking. According to a

2012 report by Boston Consulting Group, the total mobile banking transaction in India is expected to reach $350 billion by 2015. With more and more people joining the bandwagon, it should soon become a norm to use mobiles for banking services on the go.

2.5.5 STEPS TAKEN BY RBI IN MOBILE BANKING

The reserve bank recognized the potential of the mobile phone as a channel to conduct financial services and first set of guidelines were issued way back in October, 2008. A per transaction limit of Rs.2500 has been imposed on all mobile banking transactions and an overall cap of Rs.5000 then revised as Rs.50, 000 per day per customer has been imposed by the RBI.

The mobile banking guidelines have been modified in December 2011 to permit banks to facilitate funds transfer both for personal remittances and purchase of goods and services without any ceiling. In respect of small value transactions fund transfers up to Rs.5000 can be effected through mobile phone without the need for end-to-end encryption.

In order to provide domestic money transfer facility especially to migrant population who do not have access to formal banking channels,

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164 domestic money transfer guidelines have been issued in October 2011.

Remittance from a bank account for cash pay out to the beneficiary not having a bank account at an ATM/BC (Business Correspondent) outlet has also been facilitated up to Rs.10,000 per transaction subjective to a monthly cap of

Rs.25000 per beneficiary with the remitting bank obtaining only the full name and address of the beneficiary.

Similarly cash pay in facility has been permitted up to Rs.5000, per transaction to a monthly cap of Rs.25, 000 per remitter for transfer of funds to a bank account. Bank need not take any document or proof of address.

The Inter-bank Mobile Payment Services (IMPS) operated by the

National Payment Corporation of India (NPCI) with the approval of RBI has enhanced the efficiency of mobile banking by enabling real time transfer for funds between bank accounts and providing a centralized inter-operable interbank settlement service for mobile banking transactions with confirmation features.

2.5.6 OPPORTUNITIES AND CHALLENGES FOR MOBILE BANKING

Any technology that is well-accepted and widely available at affordable costs and suitable for banking and payment services, provides an immense opportunity to extent these services to all areas and all sections of the society, both banked and unbanked. Mobile banking technology scores on all these parameters and can act as a catalyst to usher in the universal goal of financial inclusion shared by all the stake holders.

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In a large country like India where a majority of population still lives in rural areas that do not have presence of formal banking, providing banking facility has been a major challenge. Of the 0.6 million villages in India, the total number of villages with the banking services through brick and mortar branches and alternate banking channels stand at approximately 0.14 million villages as at end March 2012.

India has the highest number of households (approximately 145 million) who are excluded from banking. However with the growing reach of the mobile in hinterland, it has now become possible to provide the banking facilities to people who are not able to enjoy this facility so far. At the end of

January 2012, the total wireless subscriber base was 936 million out of which,

313 million subscribers were from rural areas. Use of mobile banking services among this huge base of subscriber is however very low 67 . Even among the existing bank customers less than one present of them are covered under the mobile banking. Notwithstanding the existing low base of customers, the growth of mobile banking transactions has shown increasing trend.

With large mobile handset penetration, it is the obvious choice to cross the extremely low credit or debit card penetration barriers. Currently, mobile banking is in the partnership with almost all telecom operators joining hands with leading banks. Also, all operators have started rolling out 3G networks

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166 across the country. Mobile banking will be one of their key value-added service offerings to cash in on 3G services.

Another potential factor that has attracted all the stakeholders including policy makers to this innovative technology is the lower cost associated with this model in providing banking services both amongst the existing customers and in taking banking to the hinterland as well.

According to industry experts, mobile banking is the cheapest way to reach rural customers. While it cost $ 523 to $837 to setup a micro-banking outlet, replacing this facility with mobile banking technologies cost only $209.

The RBI reports that while the government typically incurring a transaction cost of 12-13 percent, mobile banking brings this cost down to two percent. 68

Security concerns of end users act as an impediment to the uptake of mobile banking services. These concerns relate to being subjected to fraud in this mode of payment as well as with respect to data privacy. The lack of awareness about services and security protocols are also impeding the growth of these services. The low penetration of smart phones is another impeding factor, which may prevent the large scale adoption of sophisticated mobile banking applications. Another impeding factor is the language barrier and low comfort level of users due to poor literacy level.

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Though reforms in the form of the RBI instituting regulatory protocols for mobile banking have been introduced, the regulator still has some way to go in terms of facilitating the mobile eco system for growth with an integrated frame work.

2.6 ELECTRONIC FUND TRANSFER SYSTEMS

An electronic funds transfer also known as EFT is a system for transferring money from one bank to another without using paper money. The history of electronic funds transfer originated from the common funds transfer of the past. Since the 19 th century, with the help of telegraphs, fund transfers were a usual thing in commercial transactions. Finally, it migrated itself to computers and became the electronic money transfers of today. One kind of

EFT is a cash card. With this type of card one can spend a prepaid amount of money until the balance is zero. The transaction done at bank ATM using credit or debit card is also a kind of EFT. Point of sale (POS) are also part of this group. Those POS terminals in which we pass our card are doing an electronic fund transfer from our account to the retail account.

The initiatives taken by RBI in the mid-eighties and early – nineties focused on technology based solutions for the improvement of the payment and settlement infrastructure, coupled with the introduction of new payment products by taking advantage of the technical advancements in banks. The continued increase in the volume of cheques added pressure on the existing setup thus necessitated a cost effective alternative system.

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2.6.1 ELECTRONIC FUND TRANSFER

The EFT system was operationalized in 1995 covering 15 centers. EFT system hosted and operated by the RBI, permits transfer of funds, upto Rs.5 lakhs from any account at any branch of any member bank in any city to any other account at any branch of any member bank in any other city. This system utilizes the service branches of the member bank and the nodal offices of RBI.

RBINET is the conduit for the flow of funds. RBI NET is a communication system operating over the BANK NET. BANK NET is a payment network established by RBI during 1991. The Reserve Bank of India acts as the service provider as well as regulator. Using this method, funds are credited in to the receiver’s account either on the same day or within a maximum period of 4 days, depending upon the time at which the EFT instructions are given and the city in which the beneficiary account is located. Usually the transactions done in first half of the day will get first priority of transfer than the transaction done in second half. This system is no longer available for use by the general public, for whose benefit a feature –rich & more efficient system is now in place which is National Electronic Fund Transfer. 69

Special EFT (SEFT) was introduced in April 2003 covering about 3000 branches in 500 cities. This has facilitated same day transfer of funds across accounts of constituents at all these branches. Then, it was made mandatory by

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169 the RBI for all the banks on the SEFT system to migrate to NEFT by mid

December 2005. As such, SEFT was discontinued as of January 2004. The RBI welcomed banks that were full members of the RTGS to Join the NEFT system.

2.6.2 NATIONAL ELECTRONIC FUND TRANSFER

A new variant of the EFT called the National Electronic Fund Transfer

(NEFT) is a nationwide electronic fund transfer system introduced in

November 2005 by Reserve Bank of India. It was implemented to broad base the facilities of EFT. It is a retail electronic funds transfer mechanism between the networked branches of banks.

The objective of the NEFT system is to establish an electronic funds transfer system to facilitate an efficient, secure, economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India and to relieve the stress on the existing paper based funds transfer and clearing system.

In this system, payment instructions between banks are processed and settled on net settlement (Deferred net settlement) basis at fixed times during the day. The transfer takes place either on the same day or on the next day, depending on time of instructions given. There is no minimum or maximum limit of transaction value for using this facility.

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NEFT provided for integration with the Structured Financial Messaging

Solution (SFMS) of the Indian Financial Network (INFINET). The NEFT uses

SFMS for EFT message creation and transmission from the branch to the banks gateway and to the NEFT Centre, thereby considerably enhancing the security in the transfer of funds. 70

With the SFMS facility, branches can participate in both the RTGS and the NEFT system. It is envisioned that all the RTGS enabled bank branches would be NEFT enabled too, so that the customer would have a choice between

RTGS and NEFT, based on time urgency, value of transaction and different charges applicable on the two systems.

As the NEFT system stabilized overtime, the number of settlements in

NEFT was increased from the initial two to eleven. NEFT now provides eleven settlements from 9 am to 7 pm on weekdays and five settlements from 9 am to

1 pm on Saturdays and enables funds transfer to the beneficiaries account on net basis, bringing it closer to real time settlement. Using the NEFT infrastructure, a one-way remittance facility from India to Nepal has also been implemented by the RBI since 15 th May 2008.

In order to increase the coverage of NEFT to a wider section of bank customers in semi-urban and rural areas, an enhancement of the NEFT called the NEFT-X [National EFT (extended)] is also proposed for phase wise

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171 implementation. This would facilitate non-networked branches of banks to transfer funds electronically by accessing NEFT – enabled branches for transfer of funds. NEFT (extended) would work on a T+1 basis and would ensure wide rural coverage of the electronic funds transfer system.

2.6.2.1CUSTOMER CHARGES APPLICABLE ON NEFT

The rationalized customer charges levied by the banks for NEFT transactions are as under:

Table 2.6

CHARGES APPLICABLE ON NEFT

Value Maximum charges (Exclusive of service tax) Amounts up to Rs.10,000 Rs.2.50 Amounts from Rs.10,001 to 1 lakh Rs.5 Amounts above Rs.1 lakh up to Rs.2 lakh Rs.15 Amount above Rs.2 lakh Rs.25 Source: www.sbi.co.in

2.6.2.2PERFORMANCE OF NEFT

All the refinements to the national electronic fund transfer scheme have been paved way for the growth of this product in terms of acceptability, reach and volumes handled. As at March end 2012, around 84,000 branches of 109 banks participated in the NEFT system with the addition of 13,980 branches during 2013, the number of bank branches participating in NEFT has grown to

100,429. There are around 650 sub-member banks participating in NEFT.

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The NEFT handled a record volume of 47 million transactions valued at around 3602 billion in the month of March 2013.

Table 2.7

Value and volume of NEFT Transactions

Year Volume (Million) Value (Billion) 2008-09 32.2 2519.5 2009-10 66.3 4095.0 (105.9) (62.53) 2010-11 132.3 9391.5 (99.55 (129.34) 2011-12 226.1 17903.5 (70.9) (90.64) 2012-13 394.1 29022.4 (74.3) (62.10) • Figures in parenthesis represent percentage of charge over previous year .

Source: compiled from RBI repot on trend and progress of banking in India various issues

The value and volume of NEFT is increasing year by year. During 2009-

10 the volume of transaction increased 105.9 percent and the value increased

62.53 percent as compared to 2008-09. The volume of transaction increased from 226.1 million in 2011-12 to 394.1 billion in 2012-13. The aggregate value of transactions increased from 17903.5 billion to 29022.4 billion during 2012-

13. The percentage of growth is higher with respect to volume in the year

2012-13, whereas, the percentage of growth is low with respect to value of transactions done through NEFT when comparing with the previous year.

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2.6.2.3 EFFICIENCY ENHANCEMENT IN NEFT

Two efficiency enhancement features were introduced in the NEFT system. An additional batch at 8 a.m. was introduced, taking the total number of batches to 12 on weekdays and 6 on Saturdays. Further, the continuous release of credit messages was introduced which increases the time available at destination banks to process inward NEFT transactions and facilitate more efficient handling of the growing volumes. To facilitate the migration of small value transactions from cash or cheque to NEFT, customer charge for transactions up to Rs.10000 were reduced to Rs.2.50.

2.7 REAL TIME GROSS SETTLEMENT

Payment and settlement systems serve an important role in the economy as the main arteries of the financial sector. India has a myriad of payment systems, while settlement systems in the country have generally tended to fall in the category of deferred net settlement system which entails some elements of risk. With the view to provide less risky system which could also comply with the requirements of the core principles for Systematically Important

Payment Systems of the Bank for International Settlement (BIS) the RBI implemented the RTGS.

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Real Time Gross Settlement is a system of transferring funds from one bank to another on an immediate basis 71 . In this system, the transactions are settled individually without netting debit against credit.

The Real Time Gross Settlement has been launched by the RBI on 26 th

March 2004 in the financial market. RTGS is a fund transfer mechanism where transfer of money takes place from one bank to another on a ‘real time’ and on

‘gross’ basis. This is the fastest possible money transfer system through the banking channel in India. Settlement in real time means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. Gross settlement means the transaction is settled on one to one basis without bunching with any other transaction.

2.7.1Unique Features of RTGS

The payments are settled transaction by transaction.

The settlement of funds is final and irrevocable.

The settlement is done in real time and the funds settled can be used

immediately.

It is a fully secure system, which uses digital signature and public key

infrastructure based encryption for safe and secure messaging

transmission.

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It is primarily for large value transactions with the minimum threshold

limit of Rs.2 lakhs.

It provides for intra-day collateralized liquidity support for the member

banks to smoothen the temporary mismatches of fund flows and thereby

ensuring smooth settlements.

Under the RTGS system, inter-bank transactions, customer based inter-

bank transactions and net clearing transactions can be settled.

Thus, it provides less risk based fund transfers for both banks and for their customers apart from providing for more efficient fund management at the treasures of banks.

2.7.2COMMON INTERFACE FOR RTGS SYSTEM

The participating banks can access RTGS system through the means provided by the Central Bank. The common interfaces provided for RTGS system are straight through processing (STP) Web Interface (WI) and participant Interface (PI).

2.7.2.1Straight Through Processing (STP): If the participating bank has core banking system then it can be interfaced with the RTGS through connecting mechanism called Straight Through Processing (STP). STP is defined as that the payment transactions are keyed in only once and processed until settlement. The transaction request message will be automatically routed to RTGS system and the response received from RTGS will be processed and

176 sent to the appropriate system that raised the transaction request. STP is very useful when there are many RTGS transactions to be submitted and manual entry of each transaction is difficult.

2.7.2.2Web Interface (WI): With the advent of technology the latest RTGS implementations are normally provided with the web interface. The WI is user friendly and there is no need to install any separate software. Web browsers like Internet Explorer and Firefox can be used to submit transactions to the

RTGS system. All error messages and notifications including the settlement notification will be received by WI.

2.7.2.3 Participant Interface (PI): The participant interface is thin application that is installed in the commercial banks. The user can enter transactions in PI which submits it to the RTGS system in Central Bank through communication network. All error messages and notifications including the settlement notification will be received by PI.

2.7.3 Time of Settlement and Charges per Transaction

RTGS charges depends on the amount transferred as well as the timings of the day when it’s done. A RTGS transfer early will cost a little less charge.

Service tax is also applicable to the charges.

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Table 2.8

Time of Settlement at the Charges per Transaction

RTGs Reserve Bank of India Charges per transaction for outward transactions From To 9:00 Rs.2 lakhs to 1 Hours 12:00 Hours Rs,25 Rs,5 lakhs Above Rs.5 lakhs Rs.50 Rs.2 lakhs to 2 After 15:30 Rs.26 12:00 [13:00 Hrs. Rs 5 lakhs Hours On Saturday] Above Rs.5 Rs.51 lakhs After Rs.2 lakhs to 3 15:30 16:30 Hrs. Rs.30 Hours [on week days] Rs.5 lakhs

Above Rs.5 lakhs Rs.55 Source: www.sbi.co.in

2.7.4 PERFORMANCE OF RTGS SYSTEM

The reach and utilization of the RTGS has witnessed a sustained increase since its introduction in 2004. The bank branch network coverage of the RTGS system increased to 58720 branches at more than 10,000 centres facilitating the increased usage of this mode of fund transfer. The RTGS processed transactions to a settlement value of around Rs.8 trillion on March

28, 2013, which is the highest value settled through RTGS on a business day.

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Table2.9

Growth of Real Time Gross Settlement Transactions

Year Volume (in millions) Value (in billions) 2008-09 13.3 322.8 2009-10 33.2 394.5 (149.6) (22.2) 2010-11 49.3 484.9 (48.49) (22.9) 2011-12 55.0 539.3 (11.56) (11.2) 2012-13 68.5 676.8 (24.5) (25.5) Figure in parenthesis represents parentages of change over previous year .

Source: compiled from RBI repot on trend and progress of banking in India various issues

The value and volume of RTGS is increasing year by year. During

2009-10 the volume of transaction increased 149.6 percent and the value increased 22.2 percent as compared to 2008-09. The volume of transaction is increased from 55 million in 2011-12 to 68.5 million in 2012-13. The aggregate value of transactions increased from 539.3 billion to 676.8 during 2012-13.

2.7.5 RBI INITIATIVE

Under the overall guidance of the Board of Payment and Settlement,

RBI over the last few years has been taking a number of steps to popularize the electronic payment system in the country. In this connection the following are the recent steps taken by RBI.

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2.7.5.1 Next Generation Real Time Gross Settlement (NG – RTGS):

RTGS system facilitates online transfer of high-value funds between bank customers of different banks on real time basis and currently handles about three lakhs transactions per day. Ever since RBI started RTGS system in

March 2004, it has been highly successful and a preferred mode of inter-bank transfer of large value funds by the customers of various banks, as funds get transferred almost instantaneously

Keeping in view of the ever increasing usage of the system, RBI has decided to replace the existing RTGS system with a next generation Real time Gross settlement system.

The new system would be implemented for the entire banking and financial sector of the country. Currently, RTGS system, under which funds worth Rs.2 lakh or more can be transferred is handling an average of 3 lakhs transactions per day, up from only 4000 transactions when it was launched in

2004.RBI expects 7 lakh transaction per day through RTGS very soon, 25 lakhs transactions per day in five years and then about 50 lakh transactions per day in the next 10 years.

The new system would have initial capability of handling 7-12 lakh transactions a day and an up gradation potential of 25-50 lakh transactions every day. Besides, the new system would also incorporate various new functions for the benefit of bank customers. The NG-RTGS system would have advanced liquidity management features and queue management techniques

180 and would allow the bank customers to initiate fund transfers for future dates and get information about the status of their transaction through SMS alerts. 72

2.7.5.2 Liberalized access criteria for centralized and decentralized payment system

In 2012, RBI announced liberalized revised access criteria for centralized and decentralized payment systems. The centralized payment systems, viz., RTGS and NEFT, currently provide for only direct membership.

As an exception, Regional Rural Banks have been given access to the NEFT system through their sponsor banks. Now it has been decided to expand the sub-membership route to all licensed banks to participate in NEFT & RTGS systems. This would be an alternate mechanism to all licensed banks which have the technological capabilities but are not participating in centralized payment systems on account of either not meeting the access criteria or because of cost considerations. The sub-members would participate in the centralized payment systems through their sponsor bank in which is a direct member of the centralized payment system. 73

2.8 ELECTRONIC CLEARING SERVICE

The Electric Clearing Service (ECS) introduced by the RBI in 1995, is akin to the Automated Clearing House System that is operational in certain other countries like the U.S. ECS is an electronic mode of payment/receipt for transactions that are repetitive and periodic in nature.

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ECS is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension etc., or for bulk collection of amount towards telephone, electricity, water dues cess or tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc., Essentially, ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa.

2.8.1 VARIANTS OF ECS

Primarily, there are two variants of ECS. They are ECS credit and ECS debit.

2.8.1.1 ECS CREDIT

ECS credit is used by an institution for affording credit to a large number of beneficiaries having accounts with bank branches at various locations within the jurisdiction of an ECS Centre by raising a single debit to the bank account of the user institution. ECS credit enable payment of account towards distribution of dividend, interest, salary, pension, etc., of the user institution.

The user intended to effect payment through ECS credit has to submit details of the beneficiaries like name, bank or branch, account number of the beneficiary, MICR code of the destination bank branch etc., date on which credit is to be afforded to the beneficiaries etc., in a specified format through its sponsor bank to one of the ECS centers where it is registered as a user.

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The bank managing the ECS Centre then debit the account of the sponsor bank on the scheduled settlement day and credits the account of the destination banks, forward credit to the accounts of the ultimate beneficiaries with the destination bank branches.

2.8.1.1.1 Advantages of ECS credit Scheme to the beneficiary

The beneficiary need not visit his/her bank for depositing the paper

instruments.

The beneficiary need not be apprehensive of loss or theft of physical

instruments or the likelihood of fraudulent encashment thereof.

Cost effective.

The beneficiary receives the funds right on the due date.

2.8.1.1.2Advantages to the user institutions:

Savings on administrative machinery and cost of printing, dispatch

and reconciliation of paper instruments.

Avoid chances of loss or theft of instruments in transit, likelihood of

fraudulent encashment paper instruments etc., and subsequent

correspondence or litigation.

Efficient payment made ensuring that the beneficiaries get credit on

designated date.

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2.8.1.1.3Advantages to the Banking System

Freedom from paper handling and the resultant disadvantages of

handling, presenting and monitoring paper instruments presented in

clearing. Ease of processing and return for the designation bank

branches.

Smooth process of reconciliation for the sponsor banks.

Cost effective.

2.8.1.2 ECS DEBIT

ECS debit is used by an institution for raising debits to a large number of accounts maintained with bank branches at various locations within the jurisdiction of an ECS Centre for single credit to the bank account of the user institution. ECS debit is useful for payment of telephone, electricity, water bill, cess or tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc., that are periodic or repetitive in nature and payable to the user institution by large number of customers etc.

The ECS debit user intending to collect receivables through ECS debit has to submit details of the customers like name, bank or branch, account number of the customer, MICR code of the destination bank branches etc., date on which the customer’s account is to be debited etc., in a specified format through its sponsor bank to the ECS Centre.

The bank managing the ECS Centre then passes on the debit to the destination banks for onward debit to the customer’s account with the

184 destination bank branch and credits the sponsor bank’s account for onward credit to the user institution. Destination bank branches will treat the electronic instructions received from the ECS Centre on with the physical cheques and accordingly debit the customers’ accounts maintained with them. All the unsuccessful debits are returned to the sponsor bank through the ECS Centre within the specified time frame.

2.8.1.2.1Advantages of ECS Debit scheme to the customers:

ECS debit mandates will take care of automatic debit to customer

accounts on the due dates without customers having to visit bank

branches or collection centres of utility service providers etc.,

Customers need not keep track of due date for payments.

The debit to customer accounts would be monitored by the ECS

users, and the customers alerted accordingly.

Cost effective.

2.8.1.2.2Advantages to the user institutions:

Savings on administrative machinery and cost of collecting the

cheques from customers, presenting in clearing, monitoring their

realization and reconciliation.

Better cash management because of realization or recovery of

dues on due dates promptly and efficiently.

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Avoids chances of loss or theft of instruments in transit,

likelihood of fraudulent access to the paper instruments and

encashment thereof.

Realization of payment on a uniform date instead of fragmented

receipts spread over many days.

2.8.1.2.3Advantages to the Bank System:

Freedom from paper handling and the resultant disadvantages of

handling, receiving and monitoring paper instruments presented

in clearing.

Ease of processing and return for the destination bank branches.

Destination bank branches can debit the customer’s account after

matching the account number of the customer in their database

and due verification of existence of valid mandate and its

particulars. With core banking system in place and straight –

through processing, this process can be completed with minimal

manual intervention.

Smooth process of reconciliation for the sponsor banks.

Cost effective.

2.8.2CATEGORIES OF ECS SCHEME

Based on the geographical location of branches covered, there are three broad categories of ECS schemes – Local ECS, National ECS and Regional

ECS.

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2.8.2.1Local ECS: This is operating at 81 centres across the country. At each of these ECS centres, the branch coverage is restricted to the geographical coverage of the clearing house, generally covering one city or satellite towns and suburbs adjoining the city.

2.8.2.2National ECS (NECS): This is the centralized version of ECS credit which was launched in October 2008. The scheme is operated at Mumbai and facilitate the coverage of all core – banking enabled branches located anywhere in the country. This system takes advantages of the core banking system in banks. Accordingly, even though the inter-bank settlement lakes place centrally at one location at Mumbai, the actual customers under the scheme may have their accounts at various bank branches across the length & breadth of the country. Banks are free to add any of their core-banking – enabled branches in

NECS irrespective of their location.

As of March 31, 2009 as many as 114 banks with 26,275 branches participate in NECS. With the addition of 18,257 branches during the year

2013, the coverage of the NECS has been increased 75,659 locations as at the end of July 2013.

2.8.2.3Regional ECS (RECS): Next to NECS, RECS has been launched during the year 2009.The RECS is a miniature of the NECS. This is operating at 9 centres or locations at various parts of the country. RECS facilitates the coverage of all core – banking enabled branches in a state or group of states and can be used by institutions desirous of reaching beneficiaries within the

187 state or group of states. The system takes advantage of the core banking system in banks. Accordingly, even though the inter-bank settlement takes place centrally at one location in the state, the actual customers under the scheme may have their accounts at various bank branches across the length and breadth of the state or group of states.

2.8.3 PROCESSING AND SERVICE CHARGES LEVIED UNDER ECS

The Reserve Bank of India has deregulated the charges to be levied by sponsor banks from user institutions. The sponsor banks are, however, required to disclose the charges in a transparent manner. With effect from1st July 2011, originating banks are required to pay a nominal charge of 25 paise and 50 paise per transaction to the clearing house and destination bank respectively. Bank branches do not generally levy processing or service charges for debiting the accounts of customers maintained with them.

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2.8.4 GROWTH OF ECS TRANSACTION

Table 2.10

Growth of Value and Volume of ECS Transactions as at March end

Year ECS Credit ECS Debit Value Volume Value Volume (Billion) (in Millions) (Billion) (in Millions) 2007-08 7.8 78.3 0.5 127.1

2008-09 0.9 88.3 0.6 160.0 (-88.5) (12.8) (20) (25.9) 2009-10 1.2 98.1 0.7 149.3 (33.3) (11.1) (16.7) (-6.7) 2010-11 1.8 117.3 0.7 156.7 (50.0) (19.6) (Nil) (4.9) 2011-12 1.8 121.5 0.8 164.7 (Nil) (3.6) (14.3) (5.1) 2012-13 1.8 122.2 1.1 176.5 (Nil) (0.58) (37.5) (7.2) *Figures in parenthesis represent percentage change over previous year

Source: compiled from RBI repot on trend and progress of banking in India various issues

The above table shows the value and volume of ECS transactions of scheduled commercial banks. The value of ECS credit has declined 88.5 percent during 2008-09, whereas the volume of ECS debit declined 6.7 percent during 2009-10. Comparing value and volume of ECS credit during 2011-12 with 2012-13 the percent of growth is not much impressive, whereas ECS debit

(2012-13) showed a reasonable growth over the previous year (2011-12) both in terms of value and volume.

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2.9 ANY BRANCH BANKING

Any Branch Banking is the new system of banking adopted and made popular by a few foreign banks. It is now adopted by many banks in India. This facility is a technology based customer friendly service. Under this system, a customer having account with any select branch can operate it from other designated branches of the bank throughout the country. The networking of branches under Core Banking Solution helps to offer this facility through centralized data management. This facility includes cash withdrawal, cash deposit, transfer of funds, and collection of local cheques, intra-city and intercity transactions. Now distance is no hindrance and banking has become more convenient for customers.

Any branch banking customers are in fact, turning more and more insistent on this services from their banks, which enables to transact anywhere in the country. The any branch banking middle ware/switch will be connected to the branch system on – line through the leased lines to be provided by the bank. This facility is will allow branch - to - branch transactions to be debited on-line to customers’ accounts at the branches of the bank which are in the network.

Facilities available to any branch banking customers:

Balance Enquiry

Get statement of account for any given period.

View last five transactions in the account.

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Withdraw from the account (Maximum Rs.50,000 per day)

Remit in to the account (maximum 25,000 per day)

Deposit of cheques at non-home branch.

Deposit of clearing instrument at non-home branch.

Transfer of funds from home branch to third party accounts at

another CBI branch.

Passbook updating at non-home branch.

2.10 DEMAT ACCOUNT

Demat refers to a dematerialized account. Demat account is just like a bank account where actual money is replaced by shares. A demat account holds portfolio of shares in electronic form and obviates the need to hold shares in physical form. The account offers a secure and convenient way to keep track of shares and investments without the hassle of handling physical documents that get mutilated or lost in transit. The securities and exchange board of India mandates a demat account for share trading involving more than 500 shares.

Demat account eliminates risk associated with physical certificates such as bad delivery, fake securities, delays, forgery, counterfeiting, theft and loss due to fire. It enables quick ownership of securities on settlement thereby resulting in increased liquidity. It reduces paper work involved in transfer of securities.

Demat account obviates the need to pay stamp duty that is in case of physical shares 0.5 percent stamp duty is payable. There is no odd lot problem.

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Even one share can be bought and sold. Demat account can be opened with no balance of shares and there is no minimum balance to be maintained either.

One can have a zero balance in his/her account.

To open a demat account one has to approach the depository, participant

(DP) the agents of depository are called DP. A DP just give an account to hold shares of the customer. There are over 100 DPs. Most banks are also depository participants. A depositary is a place where the stocks of investments are held in electronic form. There are only two depositories in India. They are National

Securities Depository Ltd., (NSDL) and Central Depository Services Ltd

(CDSL),

2.11 SMART CARD

A smart card is a plastic card containing a small chip that includes a microprocessor and memory. The same size as a credit card, it holds contacts that allow other devices to communicate with the card. It can contain more data than a magnetic strip and can be programmed to reveal only the relevant information.

A smart card is a card that is embedded with either a micro-processor and a memory chip or only a memory chip with non-programmable logic. The micro-processor card can add delete and otherwise manipulates information on the card, while memory chip card can only undertake a pre-defined operation.

Optical memory cards looks like a card with a piece of a CD glued on top, which can store up to 4MB of data.

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In the 1950s, charge card company Dinners club produced the first card to use for financial payments. The company used synthetic materials called

PVC. It conferred prestige on a select group that owned this card. By the time other companies like VISA and Master Card entered this market, the PVC card evolved to a machine – ready card, then to an integrated circuit card, in response to a need for better security regarding transactions. It was not until

1977 that the smart card began to be mass produced. In 1984, the smart card reached a milestone when the French postal and Telecommunication Services

(PTT) successfully tested ATM bank card with chips. Within two years, the use of smart cards proliferated throughout the world. 74

In 1994, Europe, Master card and visa came to joint agreement on developing specifications for the use of smart cards in banking. The use of smart cards continues to grow, applied to several activities from making phone calls to ATM withdrawals.

In India the RBI has asked commercial banks, regional rural banks and co-operative banks to issue smart cards to farmers under the revised kisan credit card scheme so that they can access credit with ease.

These cards are compatible for use in the ATM, hand held swipe machines, point of sale terminals and mobile banking and are capable of storing, among others adequate information on farmers identity, asset, land holdings and credit profile.

74 www.ehow.com

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The smart card market in India is expected to generate Rs.5, 276.6 crore in revenues by 2015, an increase of Rs.2173 fromRs.3, 103.6 crores revenue in

2011. During the same period 2012-15, the market is set to grow at a compound annual growth rate of 12.3 percent, according to report released by

Cyber Media Research (CMR). 75 As of now, smart cards are used for a wide range of applications across government, transportation, telecommunications, banking, IT – ITes and Healthcare sectors.

2.12 E-BANKING THREATS

The convenience offered by technology unfortunately has an evil side as well that do not originate from its use rather by the misuse of the same. Despite technological advancement data privacy is still a relevant area of concern for banking customers.

The study group on large value bank frauds defines fraud as “a deliberate act of commission or omission by any person, carried out in the course of a banking transaction or in the books of accounts maintained manually or under computer systems in banks, resulting in to wrongful gain to any person for a temporary period or otherwise with or without any monitory loss to the banking.

75 cmrinda.com/india-smart.card-market

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2.12.1ATM FRAUD

The problem of ATM fraud is global in nature. Economic frauds carried out through ATM are now getting sophisticated and trendy with both technical and human expertise employed to siphon off the crisped currency from their chest. Fraud against ATMs and people attempts to use them takes several forms.

2.12.1.1 The Lebanese Loop: In this scam, a blocking device referred to as

Lebanese loop is inserted in to the card slot to trap the card inside the ATM card reader by the fraudsters.

2.12.1.2 Card Skimming: Skimmers are devices added to ATM machines, to capture card’s information including account number, balance and PIN number. These devices often mounted alongside a machine and are difficult to notice.

2.12.1.3 Shoulder Surfing: Criminals looking over cardholders shoulder when he is keying in PIN number at ATMs to obtain valuable card details.

2.12.1.4 Wireless Video Camera: Another way to clown ATM PIN number is to mount a wireless video camera inside the ATM area. It can look as harmless as a brochure holder.

2.12.1.5 Fake Pin Pads: In addition to using cameras to collect PIN numbers, scammers have designed fake PIN pads that they place top of the original ATM

PIN pad.

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2.12.1.6 Cash Trapping: Similar to the Lebanese loop where a thin sleeve traps the card, this time cash is trapped by a sleeve or device slipped inside the cash dispenser.

2.12.1.7 Fake Atm: Fraudsters have also taken to occasionally putting up fake

ATM machines in and around shopping centers and other public locations.

2.12.2 CARD FRAUD

The most common type of attack is credit card or debit card fraud. Most internet fraud is done through the use of stolen credit card information which is obtained in many ways. Some of the methods used to wheedle out precious card information are discussed below.

2.12.2.1 Phishing Emails: Phishing is the criminally fraudulent process of masquerading as a trustworthy entity in an electronic communication in order to acquire sensitive information. Fraudsters send official looking emails to cardholders seeking information on their credit card accounts.

2.12.2.2 Fake Telephone Calls: Fraudsters through phone calls try to wheedle out card details and particularly security code numbers also known as card verification value.

2.12.2.3 Use of website that is not secure: Confidential information provided by debit or credit card holders to the concerned website to make online purchase may be hacked by internet fraudsters.

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2.12.2.4 Misuse of website cookies: Some websites use cookies that provide vital information about one’s habit and interest on internet. It can remember personal information like password and other financial information. These are misused by fraudsters.

2.12.2.5 Photo Copies Of Card: Copies of the front and back or having just the numbers on both sides of the card are enough for making purchases online.

So a criminal no longer needs to clone the card or make a fake one.

2.12.2.6 Photograph of credit card : Fraudsters use mobile phones with built- in digital cameras to take photo of credit cards and thereby try to get all relevant details from a distance.

2.12.2.7 Misuse of credit card statement: Non – receipt of new or reissued credit cards give rise to the highest incidents of fraud.

2.12.2.8 Misuse of carbon used in credit card charge slip: Some merchants use the old EOC machines where the charge slip is generated in duplicate with a carbon paper in between. This carbon paper is used to steal card details.

2.12.2.9 Misuse of charge slip: The credit card number and its expire date are captured on charge slips and any person who gains access to the charge slip does not normally need any more information for making online purchase.

2.12.2.10 Spoof letters or canvasses: We may receive a letter or fax claiming that use are the sole benefactor of a recently deceased wealthy relative or we may be told that we have own a lottery and the message goes on to

197 request bank details etc., All the information can be pieced together to impersonate one.

2.12.2.11Skimming: Fraudsters engage front – end – offenders as sales persons or low paid, unsupervised and transient workers in restaurants & petrol pumps or shops to skim credit or debit card details from the magnetic strips using a small machine made for this shady purpose.

2.12.3 ONLINE THREATS

A computer that stands connection to the internet is open to access by clever hackers. Our virtual information may be misused by them. The IP address of the computer and the details of browsing including pages visited and the durations are not secrets.

2.12.3.1Trajan Viruses: Trojan virus is considered as one of the most sophisticated types of malware programs created. These software programs spread through computers usually when we open infected emails etc. They can extract financial and other confidential information and send them to another computer over the internet.

2.12.3.2Botnets: It is a parasitic program that hijacks a network and makes other computer act on its instructions. The computers that are thus controlled are known as ‘Zombies’ and or key tools in cyber warfare.

2.12.3.3Key Loggers: Another major tool of cyber warfare is key loggers which are a software program or device designed to monitor and long all key

198 strokes. The key logger software scans computers and their processors and data the moment a person strikers a key on the key board.

2.12.3.4Root Kits: It is a set of software tools that might have been installed along with software package in computer perhaps it could have been injected in to our operating system by an attacker.

2.12.3.5Worms: A worm is a piece of malicious software created to stealthily infect computers in order to perform tasks.

2.12.4 OTHER TRICKY WAYS

Attackers may give false alarms about impending arrival of harmful viruses to us by email. Free trail offers of software and services may be a ruse to send viruses and exploit us. Yet another pitfall before netizens is the habit of falling prey to tempting offers on the net. Sometimes, we may receive an email that promises some software that could make out computer work faster or downloads easier. It may be ruse to distribute viruses. Computers may get infected when we visit certain undesirable website or when we open an email from an unknown source.

2.12.5 INCREASING INCIDENTS OF FRAUDS IN INDIA

According to the kaspersky lab report those insidious email scams known as phishing rose 87 percent worldwide in the year 2012. 76 These schemes affected some 37.3 million users around in the 12 months to April 30.

76 www.sify.com/news

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The number of fraudulent websites and servers used in attacks has more than tripled since 2012 and more than 50 percent of the total numbers of individual targets were fake copies of the websites of banks and other credit card financial organizations.

About 10,000 internet users in India face phishing attacks from cyber criminals, daily- a report by security solutions provider kaspersky. In 2012-13

102,100 users around the world were subjected to phishing attacks on daily basis. These numbers were much lower in 2011-12.Over the period about 52,000 users globally were subjected to phishing attacks on daily basis of which India accounted for

4000 77 . According to the report given by IT Minister to Rajyasabha the total amount involved in frauds relating to credit card, debit card, net banking rose

74 percent to 38.4 crores in 2012. 78

77 media.kaspersky.com/kasperskylab 78 timesofindia.indiatimes.com

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Table 2.11 BANK GROUP WISE TECHNOLOGY RELATED FRAUD

(NO. OF CASES IN ABSOLUTE TERMS AND AMOUNT INVOLVED IN RS.CRORE)

Cumulative total as Bank Group 2009-10 2010-11 2011-12 2012-13 at end March 2013

No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount cases Involved cases Involved cases Involved cases Involved cases Involved

Nationalized 118 1.82 143 3.39 172 7.26 190 9.85 824 25.0 Banks including SBI Group Old Private 9 0.15 4 0.46 9 0.06 6 1.09 55 2.30 Sector bank New Private 14387 34.53 9638 21.41 6552 16.54 3408 33.97 74321 183.48 Sector bank Sub Total 14396 34.68 9642 21.87 6561 16.6 3414 35.06 75200 211.38 Foreign 5273 26.88 4486 14.77 3375 74.60 5161 22.45 36455 145.95 Banks Grand 19787 63.38 14271 40.03 10048 38.46 8765 67.36 117655 357.33 Total Source: www.rbi.org.in

From the above it is evident that though the incidence of cyber frauds is

extremely high, the actual amount involved is generally very low. However, the

amount involved may be small from banker’s perspective; these are significant

from the view point of individuals who are victims of such frauds.

With cyber-attack becoming more frequent, RBI has advised banks in

February 2013 to introduce certain minimum checks and balances like

introduction of two factor authentication in case of ‘card not present’

transactions. Converting all strip based cards to chip based cards for better

security, issuing debit and credit cards only for domestic usage unless

specifically sought by the customer, putting threshold limit on international

usage of debit/credit cards, constant review of the pattern of card transaction in

201 coordination with customers, sending SMS alerts in respect of card transactions etc., to minimize the impact of such attacks on banks as well as customers.

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CHAPTER – III

SOCIO – ECONOMIC PROFILES OF E-BANKING CUSTOMERS

3.1. INTRODUCTION This chapter analyses the socio – economic profiles of the respondents selected for the study. This chapter also analyses to understand the other factors of e-banking users such as respondent’s preference and reason for preferring e-banking products, motivational factor that influenced them to select e-banking products, facilities of e-banking used, number of years of utilization and frequency of using e-banking facilities were also analyzed and found out the results. Various tests were conducted to find out, if there is any association between these variables.

The following socio-economic variables are considered to assess the characteristics of e-banking customers of the study banks in the study area (a) Sex (b) Age (c) Educational qualification (d)

Occupation (e) Monthly income and (f) Marital Status. Based on the samples selected the descriptive and inferential analysis is as follows.

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3.2 DESCRIPTIVE ANALYSIS OF SAMPLES

Table 3.2.1

Gender-wise classification of respondents

Gender Frequency Percentage

Male 380 78.8

Female 102 21.2

Total 482 100

Source: Primary data

The above table shows the classification of e-banking users on the basis of gender: 78.8 percent were male and 21.2 percent were female. It is concluded that the majority of the respondents were male. The reason for the low proportion of female e- banking users in the study area is the lack of awareness among them.

FIG 3.2.1.GENDER OF RESPONDENTS

90 78.8 80 70 60 50 Gender 40 Percentage 30 21.2 20 10 0 1 2 3 4 5 6 7

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Table 3.2.2

Age-wise classification of respondents

Age group Frequency Percentage

Below 30 110 22.8

30-40 198 41.1

24.7 40-50 119

Above 50 55 11.4

Total 482 100.0

Source: Primary data

The above table shows the various age groups of respondents selected for the study. It reveals that 22.8 percent belongs to below 30 years group, 41.1 percent belongs to 30-40 years age group, 24.7 percent to 40-50 years age group and 11.4 percent to above 50 years of age. It is concluded that majority of the respondents age is up to 40 years. There is a lack of awareness among older age groups. Therefore, the study banks should concentrate on creating awareness among them.

FIG3.2.2 AGE OF RESPONDENTS

50 41.1 40 30 22.8 24.7 20 11.4 10 0 1 2 3 4 56 7 8 910111213

Age group Percentage

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Table 3.2.3

Educational qualification of the respondents

Educational qualification Frequency Percentage

Graduate 132 27.4

Post Graduate 193 40.0

Doctorate 21 4.4

Professional 91 18.9

Others 45 9.3

Total 482 100.0

Source: Primary data

The above table shows the educational qualification of the respondents. It shows that 40 percent of them are post graduates, 27.4 percent graduates, 18.9 percent professionals, 4.4 percent doctorates and 9.3 percent are with other qualification. It is concluded that the majority of the respondents were highly qualified.

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Table 3.2.4

Occupational status of respondents

Occupation Frequency Percentage

Businessmen 58 12.0

Professionals 75 15.6

Government employee 157 32.6

Private employee 129 26.8

Retired person 28 5.8

Others 35 7.3

Total 482 100

Source: Primary data

The above table shows the occupational status of e-banking users selected for the study. It is reveals that 12 percent are businessmen, 15.6 percent are professionals, 32.6 percent are government employees. 26.8 percent private employees, 5.8 percent retired persons and the remaining 7.3 percent are in the category of others which includes college students, house wives and farmers. It is concluded that majority of the respondents in the study area were salaried people that is Government and Private Employees.

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Table 3.2.5

Monthly income-wise classification of respondents

Monthly income Frequency Percentage

Below 15,000 131 27.2

15,000-25,000 155 32.2

25,000-40,000 110 22.8

40,000-60,000 54 11.2

Above 60,000 32 6.6

Total 482 100.0

Source: Primary data

The above table shows the monthly income of respondents. It shows that 27.2 percent of e-banking users belongs to the group earning less than Rs.15,000, 32.2 percent to the Rs.15,000 – 25,000 category, 22.8, percent represents monthly income between Rs.25,000 and Rs.40,000, 11.2 percent represents monthly income between Rs.40,000 and Rs.60,000. It is concluded that majority of the e-banking users monthly income is between Rs.15, 000 and Rs.25,000 which means majority of them are in middle income group. So, the study banks should try to attract the higher income class which lacks awareness in this area.

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FIG : 3.2.5 MONTHLY INCOME OF RESPONDENTS

35 32.2 30 27.2 22.8 25 20 Percentage 15 11.2 10 6.6 5 0

00 0 ,000 000 40 0- 00 bove 60, Below 15, 25, A

Table 3.2.6

Marital status of respondents

Marital status Frequency Percentage

Married 395 82.0

Unmarried 87 18.0

Total 482 100.0

Source: Primary data

The above table shows the respondents marital status. It reveals that 82 percent of the respondents were married and 18 percent unmarried. It is concluded that the majority of respondents were married. So, the banks should encourage all categories of the respondents to use e-banking products.

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Table3.2.7

Classification of respondents on the basis of e-banking facilities

E-banking SBI ICICI Total Percentage facilities Frequency Percentage Frequency Percentage

ATM 220 100.0 262 100.0 482 100.0 ATM-cum- Debit card 220 100.0 262 100.0 482 100.0

Credit card 81 36.8 103 39.3 184 38.2

Net Banking 57 25.9 73 27.9 130 27.0 Mobile Banking 25 11.4 29 11.1 54 11.2

NEFT 21 9.5 25 9.5 46 9.5

RTGS 18 8.2 22 8.4 40 8.3

Electronic clearing 19 8.6 13 4.9 32 6.6 service(ECS) Any Branch Banking 28 12.7 20 7.6 48 10.0

Source: Primary data

The above table describes the e-banking products used by the respondents in the study banks. It is evident that 100 percent of respondents are using ATM-cum- Debit card and ATM facilities, 38.2 percent are using Credit Card, 27 percent are using Net Banking facilities in the study bank. Out of 482 respondents 11.2 percent are using mobile banking, 9.5 percent are NEFT, 8.3 percent are RTGS and 10.5 percent are using any branch banking facility. Only 6.6 percent are using Electronic Clearing Service (ECS) facility. It is concluded that most of the respondents are multi- product users. The percentage of users with respect to ATM-Cum-Debit Card, Credit Card and Net banking is high and other products are used by few respondents only. Hence, the study banks should create awareness about these products and facilities among people in this area.

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Table 3.2.8

Motivational factor to avail e-banking products

Motivators Frequency Percentage

Friends and relatives 166 34.4

Bank employees 131 27.2

Phone banking officers 43 8.9

Sales executives 54 11.2

Advertisement 66 13.7

Other factors 22 4.6

Total 482 100.0

Source: Primary data

The above table shows the factor which influenced the respondents to avail e- banking facilities. It reveals that 34.4 percent were influenced by friends and relatives, 27.2 percent by bank employers, 8.9 percent by the phone banking officers, 11.2 percent by sales executives, 13.7 percent by advertisement, and 4.6percent by other than these factors. It is concluded that majority of the respondents were motivated by friends and relatives and also by bank employees.

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Table 3.2.9

Number of years of utilization

Years Frequency Percentage

Less than 1 year 42 8.7

1-2 years 66 13.7

2-5 years 132 27.4

More than 5 years 242 50.2

Total 482 100.0

Source: Primary data

The above table reveals the number of years of e-banking facility usage by the respondents. It shows that 8.7 percent are using e-banking facilities for less than one year, 13.7 percent are for 1-2 years, 27.4 percent are for 2-5 years and 50.2 percent are using for more than 5 years. It is concluded that majority of the respondents are using e-banking facilities for more than 5 years.

FIG 3.2.9 NUMBER OF YEARS OF

UTILIZATION

13.7 8.7

50.2 27.4

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Table 3.2.10

Preference of respondents to e-banking products

Preference Frequency Percentage

Yes 471 97.7

No 11 2.3

Total 482 100.0

Source: Primary data

The above table shows the respondents preference to use e-banking products. It reveals that 97.7 percent of the respondents prefer to use e-banking products for their banking transactions and only 2.3 percent don’t prefer e-banking products for their transactions with bank. It is concluded that e-banking products are preferred by respondents in the study banks.

FIG :3.2.10 PREFERENCE OF RESPONDENTS TO E-BANKING PRODUCTS

120 97.7 100 80 60 40 20 0 2.3 0

No ce Yes ren fe re P

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Table 3.2.11

Reason for preference to e-banking products

Reasons Frequency Percentage

Convenience banking 160 34.0

No risk of carrying cash 92 19.5

Global access 30 6.4

Time saving 140 29.7

Easy Fund Transfer 49 10.4

Total 471 100.0

Source: Primary data

The above table shows the reason for preferring e-banking products. 34 percent prefer for convenience 29.7 percent for time saving, 19.5 percent prefer to avoid risk of carrying cash, 10.4 percent easy fund transfer and 6.4 percent prefer for global access. It is concluded that majority of the e-banking users prefer them for their convenience as they save time for their banking operations quickly.

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Table 3.2.12

Frequency of usage in the past three months

Number of times Frequency Percentage

Zero 21 4.4

1-5 75 15.6

5-15 199 41.3

15-30 119 24.7

30-50 40 8.3

>50 28 5.8

Total 482 100.0

Source: Primary data

The above table shows the respondents’ e-banking product usage for the past three months. It reveals that 41.3 percent of the respondents used e-banking products 5-15 times in the past 3 months, 24.7 percent used 15-30 times, 15.6 percent 1-5 times, 8.3 percent 30-50 times, 5.8 percent used it more than 50 times and 4.4 percent of the respondents were not used it in the past three months.

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Table 3.2.13

Occupational status of Internet banking users

Occupation Frequency Percentage

Businessmen 46 35.4

Professionals 28 21.5

Government employee 27 20.8

Private employee 23 17.7

Retired person 2 1.5

Others 4 3.1

Total 130 100.0

Source Primary Data

The above table shows the classification of Internet banking users on the basis of their occupation. It shows that 35.4 percent of the Internet banking users are Businessmen, 21.5 percent are professionals, 20.8 percent are Government employees, and 17.7 percent are private employees. It is concluded that internet banking facilities are highly used by businessmen.

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Table 3.2.14

Occupational status of credit card users

Occupation Frequency Percentage

Businessmen 23 12.5

Professionals 36 19.6

Government employee 69 37.5

Private employee 52 28.3

Retired person 0 0.0

Others 4 2.2

Total 184 100.0

Source: Primary data

The above table shows that out of the 184 credit card users 37.5 percent are Government employers, 28.3 percent are private employees, 19.6 percent are professionals and 12.5 percent are businessman. Credit cards are not used by retired persons. It is concluded that majority of the credit card users are government and private employees

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Table 3.2.15

Occupational status of Mobile banking users

Occupation Frequency Percentage

Businessmen 4 7.4

Professionals 14 25.9

Government employee 18 33.3

Private employee 15 27.8

Retired person 2 3.7

Others 1 1.9

Total 54 100.0

Source: Primary data

The above table shows that among 54 mobile banking users 33.3 percent are Government employees 27.8 percent are private employees, 25.9 percent professionals and only 7.4 percent are businessmen. 3.7 percent of the mobile banking users are retired person and 1.9 percent are in the category of others. It is concluded that majority of the mobile banking users are Government and private employees.

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Table3.2.16 Occupational status of EFT/NEFT users

Occupation Frequency Percentage

Businessmen 20 43.5

Professionals 11 23.9

Government employee 6 13.0

Private employee 7 15.2

Retired person 1 2.2

Others 1 2.2

Total 46 100.0

Source: Primary data

The above table reveals that 43.5 percent of the EFT/NEFT users are businessmen, 23.9 percent professionals, 15.2 percent private employees, 13 percent are government employees. It is concluded that EFT/NEFT is highly used by businessmen.

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Table 3.2.17

Occupational status of RTGS users

Occupation Frequency Percentage

Businessmen 28 70.0

Professionals 7 17.5

Government employee 2 5.0

Private employee 1 2.5

Retired person 1 2.5

Others 1 2.5

Total 40 100.0

Source: Primary data

The above table reveals the occupational status of RTGS users. 70 percent of the RTGS users are businessmen. 17.5 percent are professionals, 5 percent are Government employees. It is concluded that RTGS facilities are highly used by businessmen. There is a lack of awareness among other people like Government employees and Private employees. So the study banks should create awareness among these people.

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Table 3.2.18 Occupational status of ECS users

Occupation Frequency Percentage

Businessmen 11 34.4

Professionals 8 25.0

Government employee 6 18.8

Private employee 6 18.8

Retired person 1 3.1

Others 0 0.0

Total 32 100.0

Source: Primary data

The above table shows that among 32 ECS users 34.4 percent are businessmen, 25.5 percent are professionals, 18.8 percent are Government and private employees, the remaining 3.1 percent are retired person. It is concluded that majority of the ECS users are businessmen.

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Table 3.2.19 Occupational status of Any Branch Banking users

Occupation Frequency Percentage

Businessmen 6 12.5

Professionals 12 25.0

Government employee 13 27.1

Private employee 9 18.8

Retired person 12.5 6

Others 2 4.2

Total 48 100.0

Source: Primary data

The above table shows that among 48 Any branch banking users, 27.1 percent are Government employees, 12.5 percent are businessmen and only 4.2 percent are persons who fall under the category of others. It is concluded that majority of the any branch banking users are Government employees and professionals.

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Table 3.2.20

Monthly income- wise classification of Internet Banking users

Monthly income Frequency Percentage (in Rs.)

Below 15,000 7 5.4

15,000-25,000 14 10.8

25,000-40,000 38 29.2

40,000-60,000 41 31.5

Above 60,000 30 23.1

Total 130 100.0

Source: Primary data

The above table shows the monthly income of internet banking users. It reveals that 31.5 percent of internet banking users belong to the group earning between Rs.40,000 and 60,000, 29.2 percent to the Rs.25,000 – 40,000, 23.1 percent represent income group of above Rs.60,000, 10.8 percent represents income group of Rs.15,000 – 25,000, and the remaining 5.4 percent represents income group of below Rs.15,000. It is concluded that majority of the internet banking users belong to high income group. So the study bank should attract other income class which lacks awareness.

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Table 3.2.21

Monthly income- wise classification of Credit card users

Monthly income Frequency Percentage (in Rs.)

Below 15,000 12 6.5

15,000-25,000 79 42.9

25,000-40,000 65 35.3

40,000-60,000 19 10.3

Above 60,000 9 4.9

Total 184 100.0

Source: Primary data

The above table reveals that out of 184 credit card users 42.9 percent fall under the income group of Rs.15, 000 – 25,000, 35.3 percent fall under Rs.25, 000 – 40,000 income group. 10.3 percent represents income group of Rs.40, 000 – 60,000, 4.9 percent represents above 60,000 and 6.5 percent represents below Rs.15, 000.

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Table 3.2.22

Monthly income- wise classification of Mobile banking users

Monthly income Frequency Percentage (in Rs.)

Below 15,000 5 9.3

15,000-25,000 19 35.2

25,000-40,000 23 42.6

40,000-60,000 7 13.0

Above 60,000 0 0.0

Total 54 100.0

Source: Primary data

The above table shows that majority of the mobile banking users, that is 42.6 percent belongs to income group of Rs.25,000 – 40,000, 35.2 percent to Rs.15,000 – 25,000, 13 percent to Rs.40,000 – 60,000, 9.3 percent belongs to below Rs.15,000 income group.

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Table 3.2.23

Monthly income -wise classification of EFT/NEFT users

Monthly income Frequency Percentage (in Rs.)

Below 15,000 2 4.3

15,000-25,000 3 6.5

25,000-40,000 15 32.6

40,000-60,000 19 41.3

Above 60,000 7 15.2

Total 46 100.0

Source: Primary data

The above table shows that 41.3 percent of the EFT/NEFT users belong to the group earning between Rs.40,000 and Rs.60,000, 32.6 percent belongs to Rs.25,000 – 40,000 income group, 15.2 percent to above Rs.60,000 income group and 6.5 percent to Rs.15,000 – 25,000 group. It is concluded that majority of the EFT/NEFT users are in the high income group.

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Table 3.2.24

Monthly income- wise classification of RTGS users

Monthly income Frequency Percentage (in Rs.)

Below 15,000 2 5.0

15,000-25,000 1 2.5

25,000-40,000 3 7.5

40,000-60,000 12 30.0

Above 60,000 22 55.0

Total 40 100.0

Source: Primary data

The above table shows the income status of RTGS users. It shows that 55 percent of the RTGS users earn above Rs.60, 000 as monthly income, 30 percent earns between Rs.40,000 and Rs.60,000. 7.5 percent earns between Rs.15, 000 and Rs.25, 000 and 5 percent below Rs.15, 000. It is concluded that majority of the RTGS users are in high income group.

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Table 3.2.25

Monthly income- wise classification of ECS users

Monthly income Frequency Percentage (in Rs.)

Below 15,000 1 3.1

15,000-25,000 21.9 7

25,000-40,000 11 34.4

40,000-60,000 5 15.6

Above 60,000 8 25.0

Total 32 100.0

Source: Primary data

The above table shows that 34.4 percent of ECS users belong to the group earning between Rs.25,000 and 40,000, 25 percent belongs to above Rs.60,000 income group. 21.9 percent to Rs.15,000 – 25,000 group. 15.6 percent to Rs.40,000 to 60,000 group and only 3.1 percent belongs to below Rs.15,000 income group. Therefore it is concluded ECS facilities are used by high and middle income group.

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Table 3.2.26

Monthly income- wise classification of Any Branch Banking users

Monthly income Frequency Percentage (in Rs.)

Below 15,000 10 20.8

15,000-25,000 17 35.4

25,000-40,000 12 25.0

40,000-60,000 7 14.6

Above 60,000 2 4.2

Total 48 100.0

Source: Primary data

The above table shows that out of 48 any branch banking users 35.4 percent belong to the group earning between Rs.15,000 and 25,000, 25 percent belong to Rs.25,000 – 40,000 group, 20.8 percent to below Rs.15,000 group, 14.6 percent to Rs.40,000 – 60,000 income group and 4.2 percent belongs to above Rs.60,000 income group. It is concluded that majority of the Any branch banking users fall under the income group of Rs.15,000 – 25,000 .

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Table 3.2.27

Respondents’ view on security of electronic delivery channels

View Frequency Percentage

Very much insecure 15 3.1

Somewhat insecure 46 9.5

Not sure 88 18.3

Somewhat secure 239 49.6

Very secure 94 19.5

Total 482 100.0

Source: Primary data

The above table reflects the respondents’ view on security of transactions done through electronic delivery channels. It shows that 19.5 percent of the respondents feel very secure with the electronic channels, 49.6 percent feel somewhat secure, 18.3 percent not sure, 9.5 percent feel somewhat insecure and 3.1 percent feel very much insecure with the electronic channels. It is concluded that majority of the respondents felt somewhat secure when they transact through electronic channels and not very much secure. Hence the study banks should ensure the security of information and privacy and try to make e-banking customer feel secure.

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Table 3.2.28

Respondents’ view on ‘electronic channels have improved service level’

View Frequency Percentage

very untrue 7 1.5

Somewhat untrue 20 4.1

Not sure 56 11.6

Somewhat true 111 23.0

Vey true 288 59.8

Total 482 100.0

Source: Primary data

The above table reflects the view of e-banking customers on service level improvement through electronic channels. 59.8 percent of the respondents accepted that electronic channels have improved the service level, 23 percent of the respondents said it is somewhat true, 11.6 percent are not sure, 4.1 percent said it is somewhat untrue and 1.5 percent very untrue. It is concluded that majority of the respondents agree that the introduction of electronic channels have improved the service level of banks.

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3.3 INFERENTIAL ANALYSIS ON SAMPLES

HYPOTHESIS- I

Null Hypothesis: There is no significant association between age and number of Years of availing e-banking services Table 3.3.1 Chi-Square test for association between age group and number of year of Availing e-banking services

Age Number of years of utility Total Chi- P value group square (years) >1 1-2 2-5 >5 value

<30 8 30 40 32 110

(7.3) (27.3) (39.4) (29.1)

30-40 18 24 53 103 198

(9.1) (12.1) (26.8) (52.0) 42.535 0.000**

40-50 10 9 30 70 119

(8.4) (7.6) (25.2) (58.8)

>50 6 3 9 37 55

(10.9) (5.5) (16.4) (67.3)

Total 42 66 132 242 482

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance. Hence there is an association between age and number of years of availing e-banking services. It is concluded that the respondents in the age above 40 years were availing e-banking services for more periods than other age groups

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HYPOTHESIS- II

Null Hypothesis : There is no significant association between occupation and

number of years of availing e-banking services.

Table 3.3.2 Chi-Square test for association between occupation and number of

Years of availing e-banking services.

Chi- occupation Number of years utilization Total square P value value <1 1-2 2-5 >5

Businessman 4 6 13 35 58 (6.9) (10.3) (22.4) (60.3)

Professional 6 12 18 39 75 (8.0) (16.0) (24.0) (52.0)

Govt. 20.435 0.156 Employee 17 20 48 72 157 (10.8) (12.7) (30.6) (45.9)

Private employee 7 19 40 63 129 (5.4) (14.7) (31.0) (48.8)

Retired Person 2 2 3 21 28 (7.1) (7.1) (10.7) (75.0)

Others 6 7 10 12 35

(17.1) (20.0) (28.6) (34.3)

Total 42 66 132 242 482

Note: The value within brackets refers to Row percentage.

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no association between occupation and number of years of availing e-banking services. It is concluded that occupational status does not influence the duration of availing e-banking services in the study banks.

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HYPOTHESIS-III

Null Hypothesis : There is no significant association between age group and frequency of usage

Table 3.3.3 Chi-Square test for association between age group and frequency of usage

Age Frequency of usage Total Chi- P group square value (years) Zero 1-5 5-15 15-30 30-50 >50 value

<30 8 17 52 21 6 6 110 (7.3) (15.5) (47.3) (19.1) (5.5) (5.5)

30-40 11 28 78 53 18 10 198 (5.6) (14.1) (39.4) (26.8) (9.1) (5.1)

40-50 0 15 48 35 11 10 119 22.303 0.100 (0.0) (12.6) (40.3) (29.4) (9.2) (8.4)

>50 2 15 21 10 5 2 55 (3.6) (27.3) (38.2) (18.2) (9.1) (3.6)

Total 21 75 199 119 40 28 482

Note: The value within brackets refers to Row percentage.

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no association between age group and frequency of using e-banking products. Hence the age does not influence the number of times banking transaction done through electronic channels.

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HYPOTHESIS-IV

Null Hypothesis : There is no significant association between occupation and frequency of usage.

Table 3.3.4 Chi-Square test for association between occupation and frequency of usage

Frequency of usage Occupation Total Chi- P value square

zero 1-5 5-15 15-30 30-50 >50 value

Businessman 0 1 3 11 31 12 58 (0.0) (1.7) (5.2) (19.0) (53.4) (20.7)

Professional 2 4 28 33 4 4 75 (2.7) (5.3) (37.3) (44.0) (5.3) (5.3)

296.641 0.000*** Govt. 5 21 78 50 1 2 157 Employee (3.2) (13.4) (49.7) (31.8) (0.6) (1.3)

Private employee 10 22 65 20 4 8 129 (7.8) (17.1) (50.4) (15.5) (3.1) (6.2) Retired 1 Person 1 11 14 1 0 28 (3.6) (39.3) (50.0) (3.6) (0.0) (3.6)

Others 3 16 11 4 0 1 35 (8.6) (45.7) (31.4) (11.4) (0.0) (2.9)

Total 21 75 199 119 40 28 482

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.01 the null hypothesis is rejected at 1% level of significance. Hence there is an association between occupation and frequency of using e-banking products. It is concluded that businessmen are using e-banking products more frequently than others.

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HYPOTHESIS-V

Null Hypothesis : There is no significant association between monthly income and frequency of usage

Table 3.3.5 Chi-Square test for association between monthly income and frequency of usage

Monthly Frequency of usage Total Chi- P value income square (R.s) zero 1-5 5-15 15-30 30-50 >50 value

<15,000 122 41 70 5 0 3 131 (9.2) (31.3) (53.4) (3.8) (0.0) (2.3)

15,000- 5 22 84 36 2 6 155 25,000 (3.2) (14.2) (54.2) (23.2) (1.3) (3.9) 297.223 0.000***

25,000- 4 9 32 52 7 6 110 40,000 (3.6) (8.2) (29.1) (47.3) (6.4) (5.5)

40,000- 0 2 11 24 11 6 54 60,000 (0.0) (3.7) (20.4) (44.4) (20.4) (11.1)

>60,000 0 1 2 2 20 7 32 (0.0) (3.1) (6.3) (6.3) (62.5) (21.9)

Total 21 75 199 119 40 28 482

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance. Hence there is an association between monthly income and frequency of using e-banking products. It is concluded that majority of the higher income group of respondents are using e-banking products more frequently than lower income group.

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SUMMARY

This chapter analyses the socio-economic profiles of the e-banking customers of the study banks. The socio-economic variable such as sex, age, educational qualification, occupational status, monthly income, marital status and other variables like preference and reason for preferring e-banking products, motivational factors influencing to select e-banking products, number of years of using e-banking products and number of times banking transactions done through electronic channels for the past 3 months by the respondents has been analyzed and found out the results.

Based on the samples selected the descriptive and inferential analyses are as follows. The analyses reveal that out of 482 respondents, 78.8 percent were male and 21.2 percent females. It is concluded that the majority of the respondents were male. The reason for the low proportion of female e-banking users is the lack of awareness among them. Majority of the respondents (41.1%) using e-banking products belong to 30-40 years age group, 24.7 percent to 40-50 years, 22.8 percent to below 30 years, and 11.4 percent belongs to above 50 years age group. The post graduates are the largest (40%) among 482 e-banking users. The second largest users of e-banking products are graduate (27.4) followed by 18.9 percent professionals, 9.3 percent others and 4.4 percent doctorates.

The occupational status of e-banking product users reveal that 12 percent are businessmen, 15.6 percent are professionals, 32.6 percent Government employees, 26.8 percent private employees, 5.8 percent retired person and the remaining 7.3 percent others category. It is concluded that the majority of the respondents were salaried class. The monthly income of the respondents shows that 27.2 percent of the e-banking product users belong to the income group less than Rs.15000 32.2 percent to the Rs.15,000 – 25,000 category, 22.8 percent represent monthly income between Rs.25,000 and 40,000, 11.2 percent between Rs.40,000 and 60,000, and 6.6 percent more than Rs.60,000. It is concluded that majority of the e-banking product users’ monthly income is between Rs.15000 and Rs.25,000. The marital status shows that 82 percent of the respondents were married and 18 percent unmarried. It is concluded that the majority of the respondents are married.

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It is evident from the analyses that100 percent of respondents are using ATM – cum - Debit card and ATM facilities. Out of 482 respondents, 38.2 percent are credit card users, 27 percent net banking users, 11.2 percent mobile banking, 9.5 percent NEFT, 8.3 percent RTGS and 10.5 percent are any branch banking users and only 6.6 percent are ECS users. It is concluded that most of the respondents are multi- product users. E-banking facilities such as mobile banking, NEFT, RTGS ECS and any branch banking are used by few respondents.

The analyses further reveals that the majority of respondents preference and the reasons for preferring E-banking products show that 34 percent prefer for convenience, 29.7 percent for time saving, 19.5 percent for avoiding risk of carrying cash, 10.4 percent for easy transfer of funds, and 6.4 percent for easy global access. It is concluded that E-banking products are preferred by them not only for convenience and no risk of carrying cash but also for saving time of doing banking operations.

The motivational factors which influence the selection of e-banking products shows that 34.4 percent were influenced by friends and relatives, 27,.2 percent by bank employees, 13.7 percent by advertisement, 11.2 percent by sales executives, 8.9 percent by phone banking officers and 4.6 percent by other than these factors. It is concluded that majority of respondents were motivated by friends and relatives and bank employees.

The duration of using e-banking products reveals that 50.2 percent are using for more than 5 years, 27.4 percent for 2-5 years., 13.7 percent for 1-2 years and 8.7 percent for less than one year. It is concluded that majority of the respondents are using e-banking products for more than five years. The analyses also reveals that majority (41.3%) of the respondents used electronic channels 5-15 times for banking operation in the past three months. 15-30 times are used by 24.7 percent of the respondents, 1-5 times by 15.6 percent, 30-50 times by 8.3 percent, more than 50 times by 5.8 percent and 4.4 percent of the respondents were not used e-banking products for the past three months.

The analyses also reveals that internet banking facilities are highly used by businessmen as 35.4 percent of the internet banking users are businessmen, 21.5 percent are professionals, 20.8 percent Government employees and 17.7 percent private employees. Majority of the credit card users are Government employees

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(37.5%) and private employees (28.3%). RTGS and NEFT facilities are highly used by businessmen and majority of the internet banking users belong to high income group whereas 42.9 percent of the credit card users fall under the income group of Rs.15,000 – Rs.25,000. Majority of the mobile banking users that is 42.6 percent belong to income group of Rs.25, 000 - 40,000..

The analyses reflect the view of respondent on security of transactions done through electronic channels. 19.5 percent feel very secure with the electronic channels 49.6 percent somewhat secure, 9.5 percent somewhat insecure and 3.1 percent feel very much insecure with the electronic channels. The analyses also reveals that majority of the respondents (59.8%) accept that electronic channels have improved the service level.

The Hypothesis No I and II - tests was conducted for assessing if there is an association between age, occupation and the number of years of availing e-banking services. It reveals that there is an association between age group and numbers of years of availing e-banking services and it is concluded that the respondents in the age group of above 40 years were availing e-banking services for more periods than other age group. Further the test reveals that there is no association between occupation and number of years of availing e-banking services.

The Hypothesis No III, IV and V - tests was conducted to find out if there is an association between age, occupation, monthly income and frequency of using e- banking products. It reveals that there is no association between age and frequency of usage but there is an association between occupation and frequency of using e- banking products and it is concluded that businessmen are using e-banking products more frequently than others. Further it reveals that there is an association between monthly income and frequency using e-banking products and majority of the higher income group of respondents are using e-banking product more frequently than lower income group. It is concluded that the study banks should adopt appropriate strategy to encourage lower income group to use e- channels or e-banking products for banking operations.

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CHAPTER – IV

AWARENESS AND UTILITY OF E-BANKING SERVICES

4.1. Introduction

The traditional provision of financial and banking services and products is being replaced with innovative ways of providing these services. Such an innovative way is the electronic banking. Technology has enabled a wide array of banking products and services being made available to retail and wholesale customers through electronic distribution channels. The banks in India provide wide range of services through electronic banking. With the introduction of electronic banking, banking operations have become faster, accurate and time consuming. E-banking has brought to the customers the much demanded convenience, but customers may or may not aware of the various services offered within each e-banking product. The banks providing e-banking services need to provide necessary information regarding their products and services to their customers. The growth and development of any product depends upon its usage by the customer. In the same way the development of e- banking products depends upon the utilization of such products by customers. The awareness and utilization are the two important factors or measurements to measure the penetration of e-banking products.

This chapter discusses to test whether the e-banking customers are aware of the services provided through e-banking products, or not, if aware whether they utilize it or not and if there is any association between awareness and socio-economic profile of the customers and also between utilization.

The e-banking products which provide multiple services are only taken for analyses such as ATM cum debit card, credit card, Internet banking, mobile banking and any branch banking. The services of each product have been classified in to groups. Based on the classification, customers’ awareness and utilization were evaluated by using yes/no pattern, giving one point for yes response and zero for no response. Multiple response analysis has been used to analyze the awareness and utilization of e-banking services by the customers.

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CATEGORIES OF E-BANKING PROEUCTS AND SERVICES

The services of e-banking products were categorized under the following heads for analysis purpose.

I. ATM – cum – Debit Card

a) Convenience services at ATM ; (8 services) (1) Balance enquires (2) Withdrawal of cash (3) Deposit of Cash/Cheque (4) Obtain statement of account (5) Cheque book request (6) Change of PIN (7) Fast cash (8) Shared ATM.

b) Value added service at ATM (9 Services) (1) Fund transfer between same bank/branch (2) card to card transfer (3) Card to account transfer (4) Credit card bill payment (5) Insurance payment (6) Holy and Trust Donation (7) Educational fee payment (8) mobile top-ups (9) Air ticket payment.

c) Debit card services at POS : (6 Services) (1) Payment for purchases at POS (2) SMS alert on POS transactions (3) Cash withdrawal at POS (4) Attractive discount (5) Surcharge waiver (6) Reward points.

d) Other Services (6 services) (1) Operate multiple account with single debit card (2) Personal accident cover (3) Lost card liability cover (4) purchase protection (5) Online utility bill payment (6) online purchases.

II. Internet banking

a) Convenience services (12 servicers)

(1) Access account information (2) Bill payment and presentment (3) Bank statement by email. (4) Inter branch fund transfer between own a/c (5) Inter branch fund transfer (third party a/c) (6) Transfer to any bank a/c. (7)RTGS payment instruction (8) Apply for debit card (9) Intimate about loss of ATM card

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(10) Open deposit account (11) Cheque status enquiry (12) Apply for phone banking (12) Apply for bank products.

b. Value added services: (9 services)

(1). Linking bank a/c and credit card a/c (2) Linking bank a/c and Demat a/c (3) Access credit card details (4) Access Demat account details (5) online air ticket booking (6) Online Railway ticket booking (7) Income, service and excise duty payment (8) Online custom duty payment (9) Online shopping.

III. Mobile banking:

a) Information Based Services (11 services) (1) Balance enquiry (2) Last 5 transaction details (3) Cheque book request (4) Cheque states enquiry (5) Stop cheque request (6) Get credit card account details (7) Get demat a/c details (8) Loan a/c details (9) Locate branch ATM (10) Apply for bank product (11) Status of service request.

(b) Financial Transaction based Services:( Three Services)

(1) Bill Payment (2) Fund Transfer (3) Prepaid mobile recharge.

IV. Credit Card

a) Convenience Services : (13 services) (1) Cash withdrawal at ATM (2) Cash advance at cash points (3) Online Shopping (4) Online railway ticket booking (5) E-Statement (6) SMS alert (7) Utility bill payment (8) online management of card (9) Auto debit facility (10) Payment option – cash/cheque/draft (11) Payment through ATM (12) Payment through ECS (13) Drop box facility.

b. Value added services: (4 services)

(1) Balance transfer facility (2) Dial – a-draft facility (3) Personal loan on

card (4) Interest free credit period

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c. Benefit Services (10 services)

(1) Add on card facility (2) Temporary credit limit enhancement (3) Permanent credit limit entrancement (4) Self – set/monthly preset credit limit (5) Limited lost card liability (6) Revolving credit facility (7) Cash back offer (8) Discount (9) Reward points (10) Fuel surcharge waiver.

d) Insurance Services (5 services)

1. Personal accident cover (2) Credit shield cover (3) life insurance on card holders (4) Life insurance on add- on card (5) Purchase protection.

V. Any Branch banking (7 services)

Deposit of cash at non-home branch (2) Deposit of cheque and clearing instrument (3) Cash withdrawal at non-home branch (4) Balance enquiry at non-home branch (5) Get statement of a/c (6) Pass book updating (7) Fund transfer to third party a/c at another CBS branch.

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4.2 DESCRIPTIVE ANALYSIS OF SAMPLES

The descriptive analyses of samples with respect to awareness are as follows.

Table 4.2.1

Multiple Response Analysis of Awareness towards Convenience services at ATM

Convenience services ICICI SBI at ATM Response Percent Response Percent N Percent of cases N percent of cases

Balance enquiry 262 15.3% 100.0% 220 16.6% 100.0%

Withdrawal of cash 262 15.3% 100.0% 220 16.6% 100.0%

Deposit of cash/cheque 202 11.8% 77.1% 99 7.5% 45.0%

Obtain statement of 209 12.2% 79.8% 204 15.4% 92.7% Account

Cheque book request 121 7.1% 46.2% 35 2.6% 15.9%

Change of PIN 250 14.6% 95.4% 194 14.7% 88.2%

Fast cash 170 9.9% 64.9% 137 10.3% 62.3%

Shared ATM 240 14.0% 91.6% 215 16.2% 97.7%

Total 1716 100.0% 655.0% 1324 100.0% 601.8%

Source: Primary data

The above table shows the awareness of ATM – cum debit card users with respect to convenience services at ATM. From the sample of 262 ICICI bank ATM - cum - debit card users all users accepted that they are aware of convenience service provided at ATM. Inspection of the multiple dichotomy analysis frequency table 4.2.1

244 for multiple dichotomus set indicate that 100 percent of the ICICI bank respondents are aware of basic convenience services such as balance enquiry and cash withdrawal, 77.1 percent deposit of cash 46.2 percent cheque book request, 64.9 percent fast cash and 79.8 percent of the ATM – cum – Debit card uses are aware of obtain statement of account service. It is concluded that majority of the ICICI bank’s ATM – cum deposit card users are aware of convenience services provided at ATM.

In SBI 220 ATM – cum – Debit card users accepted that they are aware of convenience service. From the 220 ATM – cum – Debit card users 100 percent of them are aware of balance enquiry and cash withdrawal which are the basic services. 45 percent aware of cash deposit facility at ATM, 92.7 percent obtain statement of account. 15.9 percent cheque book request, 88.2 percent change of PIN and 62.3 percent aware of fast cash facility. It is concluded that majority of SBI bank ATM – cum - Debit card users are aware of convenience services provided at ATM.

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Table 4.2.2

Multiple Response Analysis of Awareness towards

Value added services at ATM

ICICI SBI Value added Response Response services at ATM Percent Percent N Percent of cases N percent of cases

Fund transfer between same 142 15.9% 63.4% 157 22.9% 93.5% bank/branch

Card to card transfer 101 11.3% 45.1% 96 14.0% 57.1%

Card to account transfer 62 7.0% 27.7% 43 6.3% 25.6%

Credit card bill payment 169 18.9% 75.4% 85 12.4% 50.6%

Insurance payment 114 12.8% 50.9% 94 13.7% 56.0%

Holy and trust donations 45 5.0% 20.1% 50 7.3% 29.8%

Educational fee payment 15 1.7% 6.7% 45 6.6% 26.8%

Mobile Top-ups 156 17.5% 69.6% 84 12.2% 50.0%

Air ticket payment 88 9.9% 39.3% 32 4.7% 19.0%

Total 892 100.0% 398.2% 686 100.0% 408.3%

Source: Primary data

The above table shows the awareness of ATM – cum - Debit card users towards value added services. From the 262 ICICI bank’s ATM – cum – Debit card users, only 224 users accepted that they are aware of values added service. Among the 224, 63.4 percent are aware of fund transfer, 45.1 percent card to card transfer, 75.4

246 percent aware of credit card bill payment, 50.9 percent Insurance payment facility, 20.1 percent are aware holy and trust donation facility , 69.6 percent aware of mobile top up facility, and 6.7 percent aware of education fee payment through ATM. It is concluded that majority of the ATM users are awareness of the value added services and the services that are known to few customers card to account transfer, educational fee payment, Holy and trust donation facilities at ATM.

In SBI out of 220 ATM – cum – debit card users only 168 users accepted that they are aware of value added services. Among 168, 93.5 percent aware of fund transfer facility, 57.1 percent card to card transfer, 50.6 percent credit and bill payment service, 56 percent Insurance payment service, 29.8 percent Holy and trust donation facility, 26.8 percent educational fee payment service. It is concluded that majority of the ATM users are aware of value added services and the services that are known to few customers are card to account transfer, educational fee payment and holy and trust donations services through ATM.

247

Table 4.2.3

Multiple Response Analysis of Awareness towards

Debit card services at POS

ICICI SBI Debit card services at Response Percent Response POS of cases Percent N percent Percent N of cases Payment for purchases at POS 258 25.6% 99.6% 219 28.0% 100.0%

SMS alert on POS transaction 237 23.5% 91.5% 207 26.5% 94.5%

Cash withdrawal at POS 124 12.3% 47.9% 63 8.1% 28.8%

Attractive discount 118 11.7% 45.6% 77 9.9% 35.2%

Surcharge waiver 102 10.1% 39.4% 56 7.2% 25.6%

Reward points 168 16.7% 64.9% 159 20.4% 72.6%

Total 1007 100.0% 388.8% 781 100.0% 356.6%

Source: Primary data

The above table shows the awareness of e-banking customers towards debit card services at point of sales. From the sample of 262 ICICI banks’ ATM- cum- Debit card users 258 respondents accepted that they are aware of debit card services at point of sale. Among 258, 91.5 percent aware of SMS alert facility, 47.9 percent cash withdrawa1 facility, 45.6 percent aware of discounts, 39.4 percent surcharge waiver and 64.9 percent are aware of reward points. It is concluded that majority of the customers are aware of services provided at point of sale. However the services known to least numbers of customers are cash withdrawal facility at point of sale and attractive discount.

In SBI bank, 219 ATM-cum-Debit card users accepted that they are aware of services available at point of sales. Among 219 respondents, 94.5 percent are aware of SMS alert on POS transaction, 28.8 percent cash withdrawal at POS, 35.2 percent

248 aware of discount, 25.6 percent aware of surcharge waiver, and 72.6 percent aware of reward points. It is concluded that majority of the customers are aware of SMS alert service and reward point. Other services are known to few respondents. Hence the bank should take necessary steps to create awareness and promote its services for higher customer satisfaction.

Table 4.2.4

Multiple Response Analysis of Awareness towards

Other services of Debit card

ICICI SBI Other services of Response Percent Response Debit card of cases Percent Percent percent N N of cases Operate multiple account with single 145 16.6% 57.3% 127 16.7% 59.6% debit card

Personal accident cover 88 10.1% 34.8% 54 7.1% 25.4%

Lost card liability cover 120 13.8% 47.4% 100 13.2% 46.9%

Purchase protection 50 5.7% 19.8% 69 9.1% 32.4%

Online utility 221 25.3% 87.4% 207 27.3% 97.2% payment Online purchase 248 28.4% 98.0% 202 26.6% 94.8%

Total 872 100.0% 344.7% 759 100.0% 356.3%

Source: Primary data

The above table shows the awareness of E-banking customers towards other services of debit cards. 253 respondents from ICICI bank are aware of these services. Among 253 respondents, 57.3 percent are aware of operation of multiple account with single card, 98 percent online purchase, 87.4 percent online utility bill payment service, 34.8 percent personal accident cover and 47.4 percent aware of lost card

249 liability cover and only 19.8 percent aware of purchase protection service. It reveals that the services that are highly known to customers are online utility bill payment and online purchases.

In case of SBI bank, 213 respondents are aware of these services. Among 213 respondents,97.2 percent aware of online utility bill payment service, 94.8 percent online purchases, 59.6 percent aware of operating multiple account with single debit card, 25.4 percent personal accident cover, 46.9 percent lost card liability cover and 32.4 percent aware of purchase protection facility. It reveals that the e-banking customers are highly aware of online utility bill payment and online purchase facility.

250

Table 4.2.5

Multiple Response Analysis of Awareness towards

Convenience services of internet banking

ICICI SBI Convenience services of Response Percent Response internet banking of cases Percent percent N Percent N of cases Access account information 73 10.3% 100.0% 57 10.5% 100.0%

Bill payment and 70 9.9% 95.9% 57 10.5% 100.0% presentment

Bank statement by e- 70 9.9% 95.9% 55 10.1% 96.5% mail

Inter branch fund transfer(own account) 69 9.8% 94.5% 56 10.3% 98.2%

Inter branch fund transfer(third party a/c) 70 9.9% 95.9% 56 10.3% 98.2%

Transfer to any bank a/c 50 7.1% 68.5% 46 8.5% 80.7%

RTGS payment instruction 48 6.8% 65.8% 33 6.1% 57.9%

Apply for debit card 42 5.9% 57.5% 34 6.3% 59.6%

Intimate about loss of ATM 62 8.8% 84.9% 52 9.6% 91.2% card Open deposit account 38 5.4% 52.1% 20 3.7% 35.1%

Cheque status enquiry 43 6.1% 58.9% 33 6.1% 57.9%

Apply for phone banking 33 4.7% 45.2% 15 2.8% 26.3%

Apply for bank products 38 5.4% 52.1% 28 5.2% 49.1%

Total 706 100.0% 967.1% 542 100.0% 950.9%

Source: Primary data

251

The above table shows the awareness of internet banking customers towards convenience services of net banking. 95.9 percent of the net banking users are aware of bill payment service, 95.9 percent statement of account through email facility, 94.5 percent inter branch fund transfer (own a/c) 95.9 percent fund transfer (third party a/c) 68.5 percent aware of transfer to any bank a/c, 52.1 percent open deposit account and 52.1 percent of the net banking customers are aware of apply for bank products facility through net. It reveals that majority of the internet banking users of ICICI bank are aware of convenience services offered.

In case of SBI bank, out of 57 internet banking users 100 percent are aware of bill payment service, 98.2 percent aware of inter branch fund transfer (own a/c), 98.2 percent aware of inter branch fund transfer (third party a/c), 80.7 percent aware of transfer to any bank a/c services, 35.1 percent aware of apply for bank products through net banking. It reveals that majority of the internet banking users of SBI are aware of many convenience services offered.

252

Table 4.2.6

Multiple Response Analysis of Awareness towards

Value added services of internet banking

ICICI SBI Value added Response Percent Response services of internet N Percent of cases N percent Percent of banking cases

Linking bank a/c 28 7.2% 40.6% 17 6.6% 30.9% and credit card a/c Linking bank a/c and 21 5.4% 30.4% 13 5.0% 23.6% Demat a/c

Access credit card 39 10.0% 56.5% 22 8.5% 40.0% details

Credit card related 35 9.0% 50.7% 20 7.8% 36.4% service request Access Demat 20 5.1% 29.0% 13 5.0% 23.6% account details

Online Air ticket 59 15.1% 85.5% 36 14.0% 65.5% booking Online Railway 69 17.7% 100.0% 55 21.3% 100.0% ticket booking Income, services &Excise Duty 42 10.8% 60.9% 24 9.3% 43.6% payment Online custom duty 12 3.1% 17.4% 7 2.7% 12.7% payment Online shopping 65 16.7% 94.2% 51 19.8% 92.7%

Total 390 100.0% 565.2% 258 100.0% 469.1%

Source: Primary data

The above table shows the internet banking customers’ awareness towards value added services of internet banking. Out of 73 internet banking users of ICICI bank, 69 users are aware of value added services offered by ICICI bank. 100 percent of them are aware of online train ticket booking, 85.5 percent Air ticket booking, 94.2 percent online shopping, 60.9 percent income tax, services and excise duty payment service, 56.5 percent aware of credit card details access through net, 40.6 percent linking of bank account and credit card account and only 30.4 percent aware of

253 linking bank account with demat account service. It reveals that ICICI bank’s internet banking customers are highly aware value added services such as train ticket booking, Air ticket booking. Income and service tax payment, and online shopping facility. Other value added services such as access demat account details, linking of demat account, online custom duty payment are not popular among customers in this area of study.

In case of SBI bank, out of 57 internets banking users 55 respondents accepted that they are aware of value added services of internet banking. 100 percent are aware of online train ticket booking service, 65.5 percent air ticket booking, 92.7 percent aware of online shopping 43.6 percent aware of income and service tax payment service, 40 percent credit card details access through internet service, 30.9 percent linking of bank account and credit card a/c, and only 23.6 percent aware of linking bank a/c with demat a/c service. It reveals that SBI bank internet banking customers are highly aware of few value added services such as train ticket booking, Air ticket booking, and online shopping. Other services are net popular among internet banking customers in this area of study.

So, the study banks should adopt right strategy to promote their value added services in this area of study for higher penetration of net banking.

254

Table 4.2.7

Multiple Response Analysis of Awareness towards

Information based services of mobile banking

ICICI SBI Information based Response Percent Response services of mobile of cases Percent of percent banking N Percent N cases Balance enquiry 29 14.8% 100.0% 25 14.5% 100.0%

Last 5 transaction details 29 14.8% 100.0% 25 14.5% 100.0%

Cheque book request 16 8.2% 55.2% 17 9.9% 68.0%

Cheque status enquiry 18 9.2% 62.1% 24 14.0% 96.0%

Stop cheque request 9 4.6% 31.0% 7 4.1% 28.0%

Get credit card 19 9.7% 65.5% 15 8.7% 60.0% account details Get Demat account details 4 2.0% 13.8% 9 5.2% 36.0%

Loan account details 11 5.6% 37.9% 11 6.4% 44.0%

Locate branch/ATM 28 14.3% 96.6% 23 13.4% 92.0%

Apply for bank product 11 5.6% 37.9% 2 1.2% 8.0%

Status of service request 22 11.2% 75.9% 14 8.1% 56.0%

Total 196 100.0% 675.9% 172 100.0% 688.0%

Source: Primary data

The above table shows the awareness of mobile banking customers towards information based services of mobile banking. Among 29 mobile banking users of ICICI bank, 100 percent of them are aware of balance enquiry service, 75.9 percent status of service request, 96.6 percent locate branch / ATM through mobile , 65.5 percent aware of access credit card details service, 62 percent cheque status enquiry,

255 and only 31 percent aware of stop cheque request service. It reveals that services such as apply for bank product (37.9%), stop cheque request (31%) get demat a/c details (13.8), and loan a/c details (37.9%) are not popular among customers of ICICI bank.

In case of SBI bank, 100 percent of the respondents are aware of services such balance enquiry and get last five transaction details, 96 percent aware of cheque status enquiry, 92 percent locate branch / ATM through mobile, 68 percent aware of cheque book request service. It reveals that services such as apply for bank products (8%) stop cheque request (28%), demat a/c details (35%) and loan a/c details (44%) are not popular among SBI customers.

So, the study banks should take necessary steps to popularize the services through appropriate medium and promote their value added services of mobile banking for higher penetration of mobile banking services.

256

Table 4.2.8

Multiple Response Analysis of Awareness towards

Financial transaction based services of mobile banking

ICICI SBI Financial Response Percent Response transaction based of cases Percent N percent services N Percent of cases

19 34.5% 73.1% 14 36.8% 73.7% Bill payment Fund transfer 19 34.5% 73.1% 16 42.1% 84.2%

Prepaid mobile recharge 17 30.9% 65.4% 8 21.1% 42.1%

Total 55 100.0% 211.5% 38 100.0% 200.0%

Source: Primary data

The above table shows the awareness of mobile banking customers towards transaction based services offered. It shows 73.1 percent of ICICI mobile banking customers are aware of bill payment and fund transfer services offered through mobile, 65 percent aware of prepaid mobile recharge facility. It reveals that majority of the mobile banking users are aware of financial transaction based services.

In case of SBI bank’s Mobile banking customers, 73.7 percent are aware of bill payment service, 84.2 percent fund transfer service and only 42.1 percent aware of prepaid mobile recharge services through mobile. It reveals that prepaid mobile recharge through mobile banking is not popular among SBI bank’s mobile banking customers.

257

Table 4.2.9

Multiple Response Analysis of Awareness towards

Convenience services of credit card

ICICI SBI Convenience services Response Percent Response of credit card of cases Percent N percent Percent N of cases Cash withdrawal at ATM 103 10.2% 100.0% 81 10.3% 100.0%

Cash advance at cash point 59 5.8% 57.3% 36 4.6% 44.4%

Online shopping 103 10.2% 100.0% 78 9.9% 96.3%

Online Railway ticket 99 9.8% 96.1% 76 9.7% 93.8% booking E-statement 63 6.2% 61.2% 43 5.5% 53.1%

SMS alert 98 9.7% 95.1% 79 10.1% 97.5% utility bill payment 75 7.4% 72.8% 77 9.8% 95.1%

Online management of card 48 4.7% 46.6% 17 2.2% 21.0%

Auto debit facility 51 5.0% 49.5% 44 5.6% 54.3%

Payment option – cash/cheque/draft 102 10.1% 99.0% 81 10.3% 100.0%

Payment through ATM 81 7.9% 78.6% 63 8.0% 77.8%

Payment through ECS 29 2.8% 28.2% 29 3.7% 35.8%

Drop box facility 103 10.2% 100.0% 81 10.3% 100.0%

Total 1014 100.0% 984.4% 785 100.0% 969.1%

Source: Primary data

The above table shows the awareness of credit card holders towards convenience services of credit card. It indicates that services such as cash withdrawal

258 at POS (100%) online shopping (100%), online railway ticket booking (96.1%), SMS alert (95.1%), payment through ATM (78.6), E-statement (61.2%) and drop box facility (100%) are the well-known services of credit card provided by ICICI bank. At the same time services such as payment of credit card bill through ECS (28.2%), online management of card (46.67) auto debit facility (49.5%) cash advance at cash point (57.3%) are not popular services. So, the bank should create awareness about these services through appropriate promotional strategy.

Among the 81 credit card holders of SBI bank, 100 percent of them are aware of cash withdrawal at ATM and drop box facilities .97.5 percent aware of SMS alert service, 96.3 percent online shopping, 93.8 percent online railway ticket booking, 77.8 percent payment of credit card bill through ATM. Services such as payment of credit card bill through ECS(35.8%), online management of card (21%) cash advance at cash point (44.4%), and auto debit facility (54.3%) are not popular services among credit card holders of SBI.

259

Table 4.2.10

Multiple Response Analysis of Awareness towards

Value added services of credit card

ICICI SBI Value added services Response Percent Response of credit card of cases Percent N Percent Percent N of cases Balance transfer facility 42 23.9% 48.3% 15 15.8% 27.8%

Dial –a- Draft facility 31 17.6% 35.6% 22 23.2% 40.7%

Personal loan on card 22 12.5% 25.3% 7 7.4% 13.0%

Interest free credit period 81 46.0% 93.1% 51 53.7% 94.4%

Total 176 100.0% 202.3% 95 100.0% 175.9%

Source: Primary data

The above table reflects the awareness of credit cardholders towards value added services of credit card. 87 respondents of ICICI bank accepted that they are aware of value added services of credit card. Among 87 respondents, 93.1 percent aware of balance transfer facility, 35.6 percent dial-a-draft facility, 25.3 percent personal accident cover, and 93.1 percent aware of interest free credit period. It reveals that the percentage of cardholders aware of value added services such as balance transfer, dial-a-draft, personal loan on cards is low. So the ICICI bank should adopt proper promotional strategy to popularize and create awareness among cardholders.

In case of SBI, 54 cardholders accepted that they are aware of value added services of credit card. Out of 54 cardholders, 94.4 percent aware of interest free credit period, 40 percent dial-a draft facility, 27.8 percent balance transfer facility, and 13 percent aware of personal loan on card. It reveals that majority of the customer are not aware of value added services.

So, the SBI bank should adopt proper promotional strategy and create awareness with respect to value added service among cardholders.

260

Table 4.2.11

Multiple Response Analysis of Awareness towards

Benefit services of credit card

ICICI SBI Benefit services of Response Percent Response credit card of cases Percent N Percent N Percent of cases Add on card facility 97 18.5% 95.1% 64 22.3% 81.0%

Temporary credit 51 9.7% 50.0% 12 4.2% 15.2% limit enhancement Permanent credit 49 9.3% 48.0% 12 4.2% 15.2% limit enhancement Self-set/monthly 34 6.5% 33.3% 15 5.2% 19.0% preset limit Limited lost card liability 56 10.7% 54.9% 8 2.8% 10.1%

Revolving credit facility 66 12.6% 64.7% 51 17.8% 64.6%

Cash back offer 28 5.3% 27.5% 31 10.8% 39.2%

Discount 36 6.9% 35.3% 10 3.5% 12.7%

Reward points 75 14.3% 73.5% 70 24.4% 88.6%

Fuel surcharge waiver 33 6.3% 32.4% 14 4.9% 17.7%

Total 525 100.0% 514.7% 287 100.0% 363.3%

Source: Primary data

The above table shows the awareness of credit card holders towards benefit services of credit cards. Out of 103 credit card holders of ICICI bank, 102 accepted that they are aware of benefit services. Among 102 cardholders, 95.1 percent are aware of add on card facility, 73.5 percent reward points, 64.7 percent revolving credit facility , 54.9 percent aware of limited lost card liability, 50 percent aware of temporary credit limit enhancement. The services such as permanent credit limit enhancement (48%), self-set/monthly preset limit, cash back offer (27.5%) discount (36.3%), and fuel surcharge waiver (32.4) are not much popular services.

261

In case of SBI, 79 credit card holders accepted that they are aware of benefit services of credit card offered by SBI. Among 79 cardholders, 81 percent are aware of add on card facility, 88.6 percent reward points and 64.6 percent revolving credit facility. The percentage of cardholders aware of other benefit services are not high such as temporary credit limit (15.2%), permanent credit limit (15.2%), Limited lost card liability (10.1%), Discount (12.7%) and self-set/monthly preset limit (19%). So the banks particularly SBI should create awareness about benefit services of credit card to achieve higher penetration and satisfaction. Otherwise it will lose market share.

Table 4.2.12

Multiple Response Analysis of Awareness towards

Insurance services of credit card

Insurance services of ICICI SBI credit card Response Percent Response of cases Percent N Percent N Percent

Personal accident cover 38 17.8% 53.5% 28 17.2% 49.1%

Credit shield cover 49 23.0% 69.0% 52 31.9% 91.2%

Life insurance on cardholder 56 26.3% 78.9% 32 19.6% 56.1%

Life insurance on add on 45 21.1% 63.4% 10 6.1% 17.5% card Purchase protection 25 11.7% 35.2% 41 25.2% 71.9%

Total 213 100.0% 300.0% 163 100.0% 286.0%

Source: Primary data

The above table shows the credit card holders’ awareness towards insurance services provided under credit card. Out of 103 credit card holders of ICICI bank only 71 cardholders accepted that they are aware of Insurance services of credit card. 78.9 percent aware of life insurance on card holder, 69 percent credit shield cover, 63.4 percent life insurance on add on card, and only 35.2 percent aware of purchase

262 protection service of credit card. In case of SBI, 57 cardholders accepted that they are aware of insurance services of credit card. Among 57 cardholders, 91.2 percent aware of credit shield cover, 71.9 percent purchase protection, 56.1 percent aware of life insurance on cardholder, 49.1 percent aware of personal accident cover, and only 17.5 percent of cardholders are aware of life insurance on add on card facility. It is concluded that in both banks the number of cardholders aware of insurance services is less. So the study banks should take necessary steps to create awareness among the cardholders about the insurance services through appropriate promotional strategy.

263

Table 4.2.13

Multiple Response Analysis of Awareness towards Any Branch Banking services

Any Branch Banking ICICI SBI services Response Percent Response of cases Percent Percent N percent N of cases Deposit of cash at non- 20 25.4% 100.0% 27 26.5% 96.4% home branch Deposit of cheque& 13 16.4% 65.0% 20 19.6% 71.4% clearing instrument Cash withdrawal at non- 11 14.0% 55.0% 15 14.7% 53.6% home branch Balance enquiry at non- 5 6.3% 25.0% 4 4.0% 14.3% home branch Get statement of a/c 5 6.3% 25.0% 8 7.8% 28.6%

Pass book updation 12 15.2% 60.0% 18 17.6% 64.3%

Fund transfer to third party a/c at another CBS 13 16.4% 65.0% 10 9.8% 35.7% branch

Total 79 100.0% 395.0% 102 100.0% 364.3%

Source: Primary data

The above table shows the awareness of any branch banking customers towards various services provided under it. Out of 20 ICICI bank’s any branch banking customers, 100 percent aware of deposit service, 75 percent aware of cash withdrawal at non-home branch, 85 percent fund transfer, 65 percent pass book updating and 70 percent aware of balance enquiry at non-home branch. It is concluded that majority of the customers aware of services provided under any branch banking.

Among 28 any branch banking users of SBI, 96.4 percent aware of deposit facility at non-home branch, 71.4 percent aware of deposit of cheque at non-home branch, 64.3 percent aware of pass book updating facility, 35.7 percent aware of fund transfer facility and only 14.3 percent aware of balance enquiry at non-home branch service. It is concluded that awareness among SBI bank’s any branch banking customers are not sufficient. So the bank should create awareness among customers to achieve higher satisfaction.

264

4.3 INFERENTIAL ANALYSIS ON SAMPLES

HYPOTHESIS- I

Null Hypothesis: There is no significant association between age group and ICICI Bank customers’ Awareness with respect to various dimensions of ATM-cum-Debit card services

Table 4.3.1 Chi-Square test for significant association between age group and ICICI Bank customers’ Awareness with respect to various dimensions of ATM- cum-Debit card services

Age Awaren Total Chi- P value ess <30 30-40 40-50 >50 square Dimensi on

43 59 21 Aware 47 170 (68.3) (62.8) (64.4) (65.6) 0.515 0.916

20 35 26 11 92 Not (31.7) (37.2) (35.6) (34.4) aware

Total 63 94 73 32 262 Convenience services

33 50 47 12 Aware 142 6.767 0.080 (52.4) (53.2) (64.4) (37.5)

30 44 Not 26 20 120 (47.6) (46.8) aware (35.6) (62.5)

63 94 32 262 Value added services Total 73

56 88 66 27 Aware 237 2.639 0.451 (88.8) (93.6) (90.4) (84.4)

7 6 7 5 Not 25 (11.1) (6.4) (9.6) (15.6) aware

Services POS at Total 63 94 73 32 262

Aware 36 51 41 17 145 0.211 0.976 (57.6) (54.3) (56.2) (53.1) Not 27 43 32 15 117 aware (42.9) (45.7) (43.8) (46.9)

Total 63 94 73 32 262

Other services Note: The value within brackets refers to column percentage

265

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence, there is no association between age group and ICICI bank customers’ awareness with respect to various dimensions of ATM- cum – Debit card services. It is concluded that age group has no direct influence on awareness of ICICI bank ATM-Cum-debit card users.

266

HYPOTHESIS- II

Null Hypothesis: There is no significant association between age group and SBI Bank customers’ Awareness with respect to various dimensions of ATM-cum-Debit card services

Table 4.3.2 Chi-Square test for significant association between age group and SBI Bank customers’ Awareness with respect to various dimensions of ATM- cum-Debit card services

Age Dimension Awareness Total Chi- P value <30 30-40 40-50 >50 squar e Aware 33 71 25 8 137 (70.2) (68.3) (54.3) (34.8) 11.481 0.009*** Not aware 14 33 21 15 83 (29.8) (31.7) (45.7) (65.2)

Convenience services Total 47 104 46 23 220 Aware 35 75 33 14 157 (74.5) (72.1) (71.7) (60.9) Not aware 12 29 13 9 63 1.493 0.684 (25.5) (27.9) (28.3) (39.1) Total 47 104 46 23 220

Value added services Aware 47 99 44 17 207 (100.0) (95.2) (95.7) (73.9) Not aware 0 5 2 6 13 20.223 0.000*** (0.0) (4.8) (4.3) (26.1) Total 47 104 46 23 220

Services at POS Aware 25 61 27 14 127 (53.2) (58.7) (58.7) (60.9) Not aware 22 43 19 9 93 0.544 0.909 (46.8) (41.3) (41.3) (39.1) Total 47 104 46 23 220

Other services Note: The value within brackets refers to column percentage

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to convenience services and services at POS. Hence there is a highly significant association between age and awareness of SBI debit card holders

267 with respect to convenience services and services at POS. It is concluded that the awareness of age group below 30 years and 30-40 years with respect to convenience service and services at POS is higher than other age group. The awareness of age group above 50 years is very low with respect to convenience services. So, the SBI should take appropriate steps to create awareness among older age group.

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to value added service and other services of ATM-cum- Debit card. Hence there is no significant association between age group and awareness of SBI bank’s ATM – cum- debit card holders with respect to value added services and other services. It is concluded that age has no direct influence on awareness of SBI bank’s ATM – cum – Debit card holders with respect to value added services and other services.

268

HYPOTHESIS- III

Null Hypothesis: There is no significant association between age group and ICICI Bank Customers’ Awareness with respect to various dimensions of internet banking services

Table 4.3.3 Chi-Square test for significant association between age group and ICICI Bank customers’ Awareness with respect to various dimensions of Internet banking services

Age Dimension Awareness Total Chi- P value <30 30-40 40-50 >50 squar e Aware 9 15 18 6 48 (52.9) (68.2) (75.0) (60.0) 2.355 0.502 Not aware 8 7 6 4 25 (47.1) (31.8) (25.0) (40.0) services

Convenience Total 17 22 24 10 73

Aware 10 17 22 10 59 (58.8) (77.3) (91.7) (100.0) Not aware 7 5 2 0 14 9.680 0.021**

(41.2) (22.7) (8.3) (0.0)

services

Value added Total 17 22 24 10 73

Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to convenience services of internet banking. Hence there is no significant association between age group and awareness of ICICI bank customers toward convenience services of internet banking. It is concluded that age group has no direct influence on awareness of ICICI bank’s internet banking customers with respect to convenience services.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to value added services. Hence there is a significant association between age group and awareness of ICICI bank’s net banking customers

269 towards value added service. It is concluded that the age group 30-40 and 40-50 years are highly aware of value added services of net banking. So, the ICICI bank should take necessary steps to increase their product awareness among other age group.

HYPOTHESIS- IV

Null Hypothesis: There is no significant association between age group and SBI Bank Customers’ Awareness with respect to various dimensions of Internet banking services

Table 4.3.4 Chi-Square test for significant association between age group and SBI Bank Customers’ Awareness with respect to various dimensions of Internet banking services

Awareness Age Total Chi- P value <30 30-40 40-50 >50 square Dimension Aware 6 14 10 3 33 (75.0) (66.7) (47.6) (42.9) Not aware 2 7 11 4 24 3.182 0.364 (25.0) (33.3) (52.4) (57.1)

services services Convenience Total 8 21 21 7 57

Aware 7 14 11 4 36 (87.5) (66.7) (52.4) (57.1) 3.305 0.347 Not aware 1 7 10 3 21

(12.5) (33.3) (47.6) (42.9)

services

Value Value added Total 8 21 21 7 57

Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to convenience and value added services. Hence there is no significant association between age group and awareness of SBI bank’s internet banking customers with respect to convenience and value added services of Internet

270 banking. It is concluded that age group has no direct influence on awareness with respect to various dimensions of internet banking.

HYPOTHESIS- V

Null Hypothesis: There is no significant association between age group and ICICI Bank customers’ Awareness with respect to various

dimensions of Mobile banking services Table 4.3.5 Chi-Square test for significant association between age group and ICICI Bank customers’ Awareness with respect to various dimensions of Mobile banking services

Awareness Age Total Chi- P value <30 30-40 40-50 >50 square Dimension Aware 6 10 3 0 19 (85.7) (66.7) (50.0) (0.0)

Not aware 1 5 3 1 10 3.812 0.282

(14.3) (33.3) (50.0) (100.0) services

Information based Total 7 15 6 1 29

Aware 6 9 4 0 19 (85.7) (60.0) (66.7) (0.0) Not aware 1 6 2 1 10 3.370 0.338 (14.3) (40.0) (33.3) (100.0)

services Financial Total 7 15 6 1 29

transaction based Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no significant association between age group and awareness of ICICI bank’s customers with respect to information based and financial transaction based services of mobile banking. It is concluded that age group has no direct influence on awareness of mobile banking customers of ICICI bank.

271

HYPOTHESIS- VI

Null Hypothesis: There is no significant association between age group and SBI Banks customers’ Awareness with respect to various dimensions of Mobile banking services

Table 4.3.6 Chi-Square test for significant association between age group and SBI Bank customers’ Awareness with respect to various dimensions of Mobile banking services

Awareness Age Total Chi- P

<30 30-40 40-50 >50 square value Dimension

Aware 2 11 2 0 15 (100.0) (64.7) (50.0) (0.0) 4.657 0.199

Not aware 0 6 2 2 10

services (0.0) (35.3) (50.0) (100.0)

Information based Total 2 17 4 2 25

Aware 1 11 3 1 16 (50.0) (64.7) (75.0) (50.0) 0.554 0.907

Not aware 1 6 1 1 9 (50.0) (35.3) (25.0) (11.1)

based services

Financial Financial transaction Total 2 17 4 2 25

Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significant. Hence there is no significant association between age group and awareness of SBI bank’s mobile banking customers with respect to information based services and financial transaction based services. It is concluded that age group has no direct influence on awareness of mobile banking customers of SBI bank.

272

HYPOTHESIS- VII

Null Hypothesis: There is no significant association between age group and ICICI Bank Customers’ Awareness with respect to various dimensions of Credit card services

Table 4.3.7 Chi-Square test for significant association between age group and ICICI Bank customers’ Awareness with respect to various dimensions of Credit card services

Awareness Age Total Chi- P value <30 30-40 40-50 >50 squar e Dimension Aware 17 25 18 3 63 (68.0) (51.0) (72.0) (75.0) Not aware 8 24 7 1 40 4.173 0.243

(32.0) (49.0) (28.0) (28.0) services services

Convenience Total 25 49 25 4 103

Aware 19 37 22 3 81 (76.0) (75.5) (88.0) (75.0) Not aware 6 12 3 1 22 1.725 0.631

(24.0) (24.5) (12.0) (25.0) services Total 25 49 25 4 103 Value Value added Aware 11 31 22 2 66 (44.0) (63.3) (88.0) (50.0) Not aware 14 18 3 2 37 10.952 0.012**

(56.0) (36.7) (12.0) (50.0) services Total 25 49 25 4 103 Benefit Benefit based Aware 16 20 13 0 49 (64.0) (40.8) (52.0) (0.0) Not aware 9 29 12 4 54 7.428 0.059

(36.0) (59.2) (48.0) (100.0) services Insurance Total 25 49 25 4 103

Note: The value within brackets refers to column percentage

273

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to convenience services, value added service and insurance services. Hence there is no significant association between age group and awareness of ICICI bank’s credit card holders with respect to convenience, value added and insurance service. It is concluded that the age has no direct influence on awareness of ICICI bank’s credit card holders with respect to convenience services, value added services and Insurance services of credit card.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to benefit services. Hence there is a significant association between age group and awareness of ICICI bank’s credit card holders with respect to benefit services. It is concluded that the awareness of age group below 30 years is lesser than other age group. So, the ICICI bank should take necessary steps to create awareness among younger age group regarding benefit services of credit card.

274

HYPOTHESIS- VIII

Null Hypothesis: There is no significant association between age group and SBI Bank customers’ Awareness with respect to various dimensions of Credit card services

Table 4.3.8 Chi-Square test for significant association between age group and SBI Bank customers’ Awareness with respect to various dimensions of Credit card services

Awareness Age Total Chi- P value <30 30-40 40-50 >50 square Dimension Aware 13 20 10 0 43 (65.0) (45.5) (58.8) (0.0) Not aware 7 24 7 0 38 2.394 0.302

(35.0) (54.5) (41.2) (0.0) services services

Convenience Total 20 44 17 0 81

Aware 16 25 10 0 51 (80.0) (31.4) (58.8) (0.0) Not aware 4 19 7 0 30 3.327 0.189

(20.0) (43.2) (41.2) (0.0) services Total 20 44 17 0 81 Value Value added Aware 17 25 9 0 51 (85.0) (56.8) (52.9) (0.0) Not aware 3 19 8 0 30 5.610 0.061

(15.0) (43.2) (47.1) (0.0) services Total 20 44 17 0 81 Benefit Benefit based Aware 15 27 10 0 52 (75.0) (61.4) (58.8) (0.0) Not aware 5 17 7 0 29 1.383 0.501

(25.0) (38.6) (41.2) (0.0) services Insurance Total 20 44 17 0 81

Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significant with respect to various dimensions of credit card services of SBI. Hence there is no significant association between age group and awareness of SBI bank’s credit cardholders with respect to various dimensions of credit card services. It is

275 concluded that age has no direct influence on the awareness of SBI credit card holders with respect to dimensions of credit card services.

HYPOTHESIS- IX

Null Hypothesis: There is no significant association between gender and ICICI Bank customers’ Awareness with respect to various dimensions of ATM-cum- Debit card services

Table 4.3.9 Chi-Square test for significant association between gender and ICICI Bank customers’ Awareness with respect to various dimensions of ATM-cum- Debit card services

Dimension Awareness Sex Chi- Male Female Total square P value value

Aware 145 25 170 (65.9) (59.5) 0.631 0.427

Not aware 75 17 92 (34.1) (40.5) services Total 220 42 262 Convenience Aware 116 26 142 (52.7) (61.9) 1.197 0.274

Not aw are 104 16 120 (47.3) (38.1) services

Value Value added Total 220 42 262 Aware 198 39 237 (90.0) (92.9) 0.334 0.564

Not aware 22 3 25

POS POS (10.0) (7.1)

Services at Services at Total 220 42 262

Aware 128 17 145 (58.2) (40.5) 4.473 0.034**

Not aware 92 25 117 (41.8) (59.5) Total 220 42 262 Other services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significant with respect to convenient services, value added services, and services

276 at POS. hence there is no significant association between gender and awareness of ICICI bank’s ATM – cum- Debit card holders with respect to convenience services, value added service and services at POS of ATM – cum debit card. It is concluded that gender has no direct influence on awareness with respect convenience services, value added services and services at POS.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to other services of debit card. Hence there is a significant association between gender and awareness of ICICI bank’s ATM – cum – Debit card holders with respect to other services of debit card. It is concluded that the awareness of male card holder is higher than female cardholders with respect to other service category of debit card services. So the ICICI bank should take necessary steps to increase the awareness of female debit card holders with respect to services in other service category.

277

HYPOTHESIS- X

Null Hypothesis: There is no significant association between gender and SBI Bank customers’ Awareness with respect to various dimensions of ATM-cum-Debit card services .

Table 4.3.10 Chi-Square test for significant association between gender and SBI Bank customers’ Awareness with respect to various dimensions of ATM-cum- Debit card services

Sex Chi-Square P-Value Awareness Male Female Total Value Dimensions

Aware 100 37 137 (62.5) (61.7) Not aware 60 23 83 0.013 0.910 (37.5) (38.3) Total 160 60 220 Convenience services Aware 114 43 157 (71.3)) (71.1) Not aware 46 17 63 0.004 0.951 (28.8) (28.3) Total 160 60 220 Valueadded services Aware 151 56 207 (94.4) (93.3) Not aware 9 4 13 0.085 0.770 (5.6) (6.7) Total 160 60 220 Services at POS Aware 96 31 127 (60.0) (51.7) Not aware 64 29 93 1.242 0.265 (40.0) (48.3) Total 160 60 220 Other services Note: The value within brackets refers to column percentage

Since P value is greater than0.05, the null hypothesis is accepted at 5% level of significance with respect to various dimensions of ATM – cum- debit card services. Hence there is no significant association between gender and awareness of SBI bank’s debit card holders with respect to various dimensions of ATM – cum – debit card. It is

278 concluded that gender has no direct influence on awareness of SBI customers with respect to dimensions of ATM – cum – Debit card services.

HYPOTHESIS- XI

Null Hypothesis: There is no significant association between gender and ICICI Bank customers’ Awareness with respect to various dimensions of Internet banking services

Table 4.3.11 Chi-Square test for significant association between gender and ICICI Bank customers’ Awareness with respect to various dimensions of Internet banking services

Dimension Awareness Sex Total Chi- P value Male Female square value Aware 44 4 48 (73.3) (30.8) 8.597 0.003*** Not aware 16 9 25 (26.7) (69.2) services Total 60 13 73 Convenience Aware 52 7 59 (86.7) (53.8) 7.426 0.006*** Not aware 8 6 14 (13.3) (46.2) services

Valueadded Total 60 13 73 Note: The value within brackets refers to column percentage

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to various dimensions of internet banking services. Hence there is a highly significant association between gender and awareness of ICICI bank’s net banking customers with respect to convenience services and value added services of net banking. It is concluded that the awareness of male is higher than female with respect to convenience and value added services of net banking provided by ICICI bank. So, the ICICI bank should take necessary steps to increase the awareness of female mobile banking users.

279

HYPOTHESIS- XII

Null Hypothesis: There is no significant association between gender and SBI Bank customers’ Awareness with respect to various dimensions of Internet banking services

Table 4.3.12 Chi-Square test for significant association between gender and SBI Bank customers’ Awareness with respect to various dimensions of Internet banking services

Sex Chi- Dimension Awareness Male Female Total square P value value Aware 28 5 33 (58.3) (55.6)

Not aware 20 4 24 0.024 0.887 (41.7) (44.4) services services Total 48 9 57 Convenience Aware 31 5 36 (64.6) (55.6)

Not aware 17 4 21 0.265 0.606 (35.4) (44.4) services

Value added Total 48 9 57 Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to various dimension of internet banking services. Hence there is no significant association between gender and awareness of SBI bank’s internet banking customers with respect to various dimensions of internet banking services. It is concluded that gender has no direct influence on awareness of SBI customers with respect to convenience services and value added services of net banking.

280

HYPOTHESIS- XIII

Null Hypothesis: There is no significant association between gender and ICICI Bank customers’ Awareness with respect to various dimensions of Mobile banking services

Table 4.3.13 Chi-Square test for significant association between gender and ICICI Bank customers’ Awareness with respect to various dimensions of Mobile banking services

Sex Chi- Dimension Awareness Male Female Total square P value value Aware 16 3 19 (66.7) (60.0) Not aware 8 2 10 0.081 0.775

based (33.3) (40.0) services

Information Total 24 5 29 Aware 16 3 19 (66.7) (60.0) Not aware 8 2 10 0.081 0.775

based (33.3) (40.0) services services Financial transaction Total 24 5 29 Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no significant association between gender and awareness of ICICI bank’s mobile banking customers with respect to information based services and financial transaction based services. It is concluded that gender has no direct influence on awareness of SBI mobile banking customers.

281

HYPOTHESIS-XIV

Null Hypothesis: There is no significant association between gender and SBI Bank customers’ Awareness with respect to various dimensions of Mobile banking services

Table 4.3.14 Chi-Square test for significant association between gender and SBI Bank Customers’ Awareness with respect to various dimensions of Mobile banking services

Sex Chi- Dimension Awareness Male Female Total square P value value Aware 10 5 15 (58.8) (62.5) Not aware 7 3 10 0.031 0.861

based (41.2) (37.5) services

Information Total 17 8 25 Aware 10 6 16 (58.8) (75.0) Not aware 7 2 9 0.618 0.432

based (41.2) (25.0) services services Financial transaction Total 17 8 25 Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no significant association between gender and awareness of SBI bank’s mobile banking customers with respect to various dimensions of mobile banking services. It is concluded that gender has no direct influence on awareness of mobile banking customers with respect to information based services and financial transaction based services of mobile banking.

282

HYPOTHESIS- XV

Null Hypothesis: There is no significant association between gender and ICICI Bank customers’ Awareness with respect to various dimensions of Credit card services

Table 4.3.15 Chi-Square test for significant association between gender and ICICI Bank customers’ Awareness with respect to various dimensions of Credit card services

Sex Chi- Dimension Awareness Male Female Total square P value value Aware 56 7 63 (62.2) (53.8) Not aware 34 6 40 0.336 0.562 (37.8) (46.2) services Total 90 13 103 Convenience Aware 72 9 81 (80.0) (69.2) Not aware 18 4 22 0.784 0.376 (20.0) (30.8) services

Value Value added Total 90 13 103 Aware 59 7 66 (65.6) (53.8) Not aware 31 6 37 0.677 0.411 (34.4) (46.2) services Total 90 13 103 Benefit Benefit based Aware 43 6 49 (47.8) (46.2) Not aware 47 7 54 0.012 0.913 (52.2) (53.8) services Insurance Total 90 13 103

Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the hypothesis is accepted at 5% level of significance with respect to various dimensions of credit card services. Hence there is no significant association between gender and awareness of ICICI bank’s credit card holders with respect to convenience, value added, benefit and Insurance services of credit card. It is concluded that gender has no direct influence on the awareness of ICICI bank’s credit card holders.

283

HYPOTHESIS- XVI

Null Hypothesis: There is no significant association between gender and SBI Bank Customers’ Awareness with respect to various dimensions of Credit card services

Table 4.3.16 Chi-Square test for significant association between gender and SBI Bank customers’ Awareness with respect to various dimensions of Credit card services

Dimension Sex Chi- Awareness Male Female Total square P value value Aware 30 13 43 (53.6) (52.0) Not aware 26 12 38 0.017 0.896 (46.4) (48.0) Total 56 25 81 Convenience services Aware 38 13 51 (67.9) (52.0) Not aware 18 12 30 1.864 0.172 (32.1) (48.0) Total 56 25 81 Value Value added services Aware 38 13 51 (67.9) (52.0) Not aware 18 12 30 1.864 0.172 (32.1) (48.0) Total 56 25 81 Benefit based services Aware 40 12 52 (71.4) (48.0) Not aware 16 13 29 4.128 0.042** (28.6) (52.0) Total 56 25 81 Insurance services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the hypothesis is accepted at 5% level of significance with respect to convenience services, value added services and benefit services. Hence there is no significant association between gender and awareness of SBI bank’s credit card holder with respect to convenience services, value added services and benefit of services of credit card.

284

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to Insurance services. Hence there is a significant association between gender and awareness of SBI bank’s credit card holders with respect to Insurance services of credit card. It is concluded that the awareness of male cardholders is higher than female. So, the SBI bank should take necessary steps to increase the awareness of female cardholders through appropriate promotional strategy.

285

HYPOTHESIS- XVII

Null Hypothesis: There is no significant association between educational qualification and ICICI Bank customers’ Awareness with respect to various dimensions of ATM-cum-Debit card services

Table 4.3.17 Chi-Square test for significant association between Educational qualification and ICICI Bank customers’ Awareness with respect to various dimensions of ATM-cum-Debit Card services

Educational qualification Dimension Awareness Graduat e Post graduat e professi onal Doctorat e others Total Chi-square P value Aware 42 88 18 8 14 170 (66.7) (64.7) (58.1) (80.0) (63.6) 0.783 Not aware 21 48 13 2 8 92 1.740 (33.3) (35.3) (41.9) (20.0) (36.4) services Total 63 136 31 10 22 262 Convenience Aware 44 69 19 5 5 142 (69.8) (50.7) (61.3) (50.0) (22.7) 0.003*** Not aware 19 67 12 5 17 120 16.344 (30.2) (49.3) (38.7) (50.0) (77.3) services Total 63 136 31 10 22 262 Value Value added Aware 54 125 30 9 19 237 (85.7) (91.9) (96.8) (90.0) (86.4) 0.428 Not aware 9 11 1 1 3 25 3.838

POS POS (14.3) (8.1) (3.2) (10.0) (13.6)

Servicesat Total 63 136 31 10 22 262

Aware 37 74 17 8 9 145 (58.7) (54.4) (54.8) (80.0) (40.9) 0.324 Not aware 26 62 14 2 13 117 4.658 (41.3) (45.6) (45.2) (20.0) (59.1)

Other services Total 63 136 31 10 22 262

Note: The value within brackets refers to column percentage

286

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to convenience services, services at POS and other services. Hence, there is no significant association between educational qualification and awareness of ICICI bank’s ATM – cum- debit and holders with respect to convenience services, services at POS and other services of debit card. Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to value added services at ATM. Hence there is a highly significant association between educational qualification and ICICI bank’s ATM-cum-Debit card holder’s awareness with respect to value added services at ATM. It is concluded that the awareness of graduates is higher than others. So the ICICI bank should take necessary steps to create awareness among other group of customers.

287

HYPOTHESIS- XVIII

Null Hypothesis: There is no significant association between gender and SBI Bank customers’ Awareness with respect to various dimensions of ATM-cum-Debit card services

Table 4.3.18 Chi-Square test for significant association between educational qualification and SBI Bank customers’ Awareness with respect to various dimensions of ATM-cum-Debit card Services

Educational qualification Dimension Awareness Graduat e Post graduate professio nal Doctorat e others Total Chi-square P value Aware 36 40 42 6 13 137 (52.2) (70.2) (70.0) (54.5) (56.5) Not 33 17 18 5 10 83 6.639 0.156 aware (47.8) (29.8) (30.0) (45.5) (43.5) Total 69 57 60 11 23 220

Convenience services Aware 39 44 56 10 8 157 (56.5) (77.2) (93.3) (90.0) (34.8) Not 30 13 4 1 15 63 39.674 0.000*** aware (43.5) (22.8) (6.7) (9.1) (65.2) Total 69 57 60 11 23 220

Valueadded services Aware 61 53 60 10 23 207 (88.4) (93.0) (100.0) (90.9) (100. 0) 9.550 0.049** Not 8 4 0 1 0 13 aware (11.6) (7.0) (0.0) (9.1) (0.0) Total 69 57 60 11 23 220

Services at POS Aware 28 41 42 7 9 127 (40.6) (71.9) (70.0) (63.6) (39.1) Not 41 16 18 4 14 93 20.146 0.000*** aware (59.4) (28.1) (30.0) (36.4) (60.9) Total 69 57 60 11 23 220

Other services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to convenience services. Hence there is no significant

288 association between educational qualification and awareness of SBI bank’s ATM- cum-debit card holders with respect to convenience services. Since P value is less than 0.01 the null hypothesis is rejected at 1% level of significance with respect to value added services at ATM and other services of debit card. Hence, there is a highly significant association between educational qualification and SBI bank’s ATM – cum- debit cardholder’s awareness with respect to value added services at ATM and other services of debit card. It is concluded that awareness of professionals is higher than others with respect to value added services and the awareness of customers whose qualification come under other category is low with respect to value added services and other services.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to services at POS. Hence there is a significant association between SBI bank’s ATM – cum- debit cardholders’ awareness with respect to services at POS and their educational qualification. So, the SBI bank should take necessary steps to create awareness among customer taking into consideration their educational qualification.

289

HYPOTHESIS- XIX

Null Hypothesis: There is no significant association between educational qualification and ICICI Bank Customers’ Awareness with respect to various dimensions of Internet banking services

Table 4.3.19 Chi-Square test for significant association between educational qualification and ICICI Bank customers’ awareness with respect to dimensions of internet Banking services

Educational qualification Graduate Post professi Doctorate others Total Chi- P graduate onal square value Dimensi on Awaren ess Aware 13 18 13 3 1 48 (61.9) (64.3) (76.5) (60.0) (50.0) Not 8 10 4 2 1 25 1.326 0.857 aware (38.1) (35.7) (23.5) (40.0) (50.0) services Total 21 28 17 5 2 73 Convenience Aware 14 25 15 4 1 59 (66.7) (89.3) (88.2) (80.0) (50.0) Not 7 3 2 1 1 14 5.839 0.211 aware (33.3) (10.7) (11.8) (20.0) (50.0) services Total 21 28 17 5 2 73 Value Value added Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to various dimensions of internet banking services. Hence there is no significant association between educational qualification and awareness of ICICI bank’s net banking customers with respect to convenience and value added services of net banking. It is concluded that educational qualification has no direct influence on awareness with respect to dimensions of net banking services of ICICI.

290

HYPOTHESIS- XX

Null Hypothesis: There is no significant association between educational qualification and SBI Bank Customers’ Awareness with respect to dimensions of Net banking services.

Table 4.3.20 Chi-Square test for significant association between educational qualification and SBI Customers’ Awareness with respect to various dimensions of Net banking services

Educational qualification Total Chi- Graduate Post professi Doctorate others square P value graduate onal Dimension Dimension Awareness Aware 13 9 6 1 4 33 (81.3) (60.0) (37.5) (16.7) (100.0) Not 3 6 10 5 0 24 13.430 0.009*** aware (18.8) (40.0) (62.5) (83.3) (0.0) services Total 16 15 16 6 4 57 Convenience Aware 11 7 10 5 3 36 (68.8) (46.7) (62.5) (83.3) (75.0) Not 5 8 6 1 1 21 3.262 0.515 aware (31.3) (53.3) (37.5) (16.7) (25.0) services services Total 16 15 16 6 4 57 Valueadded Note: The value within brackets refers to column percentage

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to convenience services. Hence there is a highly significant association between educational qualification and awareness of SBI bank’s Internet banking users with respect to convenience services. It is concluded that awareness of graduates is higher than others. Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance, with respect to value added services of net banking. Hence there is no significant association between educational qualifications and awareness of SBI bank’s net banking customers with respect to value added services.

291

HYPOTHESIS-XXI

Null Hypothesis: There is no significant association between educational qualification and ICICI Customers’ Awareness with respect to dimensions of Mobile banking services.

Table 4.3.21 Chi-Square test for significant association between educational qualification and ICICI Customers’ Awareness with respect to dimensions of Mobile banking services

Educational qualification Chi- P Graduate Post professi Doctorate others Total square value graduate onal Dimension Dimension Awareness Aware 3 10 5 1 0 19 (60.0) (58.8) (83.3) (100.0) (0.0) Not 2 7 1 0 0 10 1.774 0.621 aware (40.0) (41.2) (16.7) (0.0) (0.0) based services Total 5 17 6 1 0 29 Information

Aware 4 11 4 0 0 19 (80.0) (64.7) (66.7) (0.0) (0.0) Not 1 6 2 1 0 10 2.373 0.499 aware (20.0) (35.3) (33.3) (100.0) (0.0) services Financial Total 5 17 6 1 29

transaction based Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to dimensions of mobile banking services. Hence, there is no significant association between educational qualification and awareness of ICICI bank’s mobile banking customers with respect to dimensions of mobile banking services. It is concluded that educational qualification has no influence on awareness of ICICI bank’s mobile banking customers with respect dimensions of mobile banking services.

292

HYPOTHESIS-XXII

Null Hypothesis: There is no significant association between educational qualification and SBI Bank Customers’ Awareness with respect to dimensions of Mobile banking services

Table 4.3.22 Chi-Square test for significant association between educational qualification and SBI Customers’ Awareness with respect to dimensions of Mobile banking services

Educational qualification Graduate Post professi Doctorate others Total Chi- P graduate onal square value Dimension Awareness Aware 0 6 8 1 0 15 (0.0) (60.0) (66.7) (33.3) (0.0) Not 0 4 4 2 0 10 1.111 0.574 aware (0.0) (40.0) (33.3) (66.7) (0.0) Total 0 10 12 3 0 25

Information based services Aware 0 5 10 1 0 16 (0.0) (50.0) (83.3) (33.3) (0.0)

Not 0 5 2 2 0 9 4.022 0.134 aware (0.0) (50.0) (16.7) (66.7) (0.0) Total 0 10 12 3 0 25

Financial Financial transaction based services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to dimensions of mobile banking services. Hence there is no significant association between educational qualification and awareness of SBI bank’s mobile banking customers with respect to information based services and transaction based services. It is concluded the educational qualification has no influence on awareness with respect to mobile banking services of SBI.

293

HYPOTHESIS- XXIII

Null Hypothesis: There is no significant association between educational qualification and ICICI Bank customers’ Awareness with respect to various dimensions of Credit card services

Table 4.3.23 Chi-Square test for significant association between educational qualification and ICICI Customers’ Awareness with respect to various dimensions of Credit card services

Educational qualification Total Chi- P square value Graduate Post professi Doctorate others graduate onal Dimension Awareness Aware 13 38 9 0 3 63 (65.0) (60.3) (69.2) (0.0) (75.0) Not 7 25 4 3 1 40 5.546 0.236 aware (35.0) (39.7) (30.8) (100.0) (25.0) Total 20 63 13 3 4 103

Convenience services Aware 15 50 12 2 2 81 (75.0) (79.4) (92.3) (66.7) (50.0) Not 5 13 1 1 2 22 3.833 0.429 aware (25.0) (20.6) (7.7) (33.3) (50.0) Total 20 63 13 3 4 103

Value Value added services Aware 13 40 9 2 2 66 (65.0) (63.5) (69.2) (66.7) (50.0) Not 7 23 4 1 2 37 0.502 0.972 aware (35.0) (36.5) (30.8) (33.3) (50.0) Total 20 63 13 3 4 103

Benefit Benefit based services Aware 14 23 9 1 2 49 (70.0) (36.5) (69.2) (33.3) (50.0) Not 6 40 4 2 2 54 9.824 0.043** aware (30.0) (63.5) (30.8) (66.7) (50.0) Total 20 63 13 3 4 103

Insurance services Note: The value within brackets refers to column percentage

294

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to convenience services, value added services and benefit services. Hence there is no significant association between educational qualification and awareness of ICICI bank’s credit card holders with respect to convenience services, value added services and benefit services. Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to insurance services of credit card. Hence there is a significant association between educational qualification and awareness of ICICI bank’s credit card holders with respect to insurance services. It is concluded that awareness of graduates is higher than others and the awareness of customer who is highly qualified with doctorate is low. So, the bank should take steps to create awareness among highly qualified persons.

295

HYPOTHESIS- XXIV

Null Hypothesis: There is no significant association between educational qualification and SBI Customers’ Awareness with respect to various dimensions of Credit card services

Table 4.3.24 Chi-Square test for significant association between educational qualification and SBI Customers’ Awareness with respect to various dimensions of Credit card services

Educational qualification Graduate Post prof essio Doctorate others Total Chi- P graduate nal square value Dimension Awareness Aware 7 11 21 3 1 42 (31.8) (45.8) (72.4) (100.0) (33.3) Not 15 13 8 0 2 38 11.974 0.018** aware (68.2) (54.2) (27.6) (0.0) (66.7) Total 22 24 29 3 3 81

Convenience services Aware 11 15 20 3 2 51 (50.0) (62.5) (69.0) (100.0) (66.7) Not 11 9 9 0 1 30 3.818 0.431 aware (50.0) (37.5) (31.0) (0.0) (33.3) Total 22 24 29 3 3 81

Value Value added services Aware 9 13 24 3 2 51 (40.9) (54.2) (82.8) (100.0) (66.7) Not 13 11 5 0 1 30 12.040 0.017** aware (59.1) (45.8) (17.2) (0.0) (33.3) Total 22 24 29 3 3 81

Benefit Benefit based services Aware 12 17 19 2 2 52 (54.5) (70.8) (65.5) (66.7) (66.7) Not 10 7 10 1 1 29 1.389 0.846 aware (45.5) (29.2) (34.5) (33.3) (33.3) Total 22 24 29 3 3 81

Insurance services Note: The value within brackets refers to column percentage

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to convenience services and benefit services of credit card. Hence there is a significant association between educational qualification and

296 awareness of SBI bank’s credit card holders with respect to convenience services and benefit services of credit card. It is concluded that the awareness of graduates is low compared to others and the awareness of customers with professional qualification is higher than others. So, the SBI bank should take necessary steps to create awareness among customers regarding benefit services. Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to insurance service. Hence there is no significant association between educational qualification and awareness of SBI bank’s credit card holders with respect to insurance services of credit card.

4.4 DESCRIPTIVE ANALYSIS OF SAMPLES

Descriptive analyses of samples with respect to utility are as follows:

Table 4.4.1

Multiple Response Analysis of utilization with respect to Convenience services at ATM

Convenience services ICICI SBI at ATM Response Percent Response Percent N Percent of cases N percent of cases Balance enquiry 262 18.5% 100.0% 220 20.8% 100.0%

Withdrawal of cash 262 18.5% 100.0% 220 20.8% 100.0%

Deposit of cash/cheque 94 6.6% 35.9% 20 1.9% 9.1%

Obtain statement of 197 13.9% 75.2% 203 19.2% 92.3% account Cheque book request 72 5.1% 27.5% 0 0.0% 0.0%

Change of PIN 188 13.3% 71.8% 138 13.1% 62.7%

Fast cash 115 8.1% 43.9% 86 8.1% 39.1%

Shared ATM 226 16.0% 86.3% 170 16.1% 77.3%

Total 1416 100.0% 540.5% 1057 100.0% 480.5%

Source: Primary data

297

The above table shows the ATM – cum – Debit card holders’ usage of convenience services at ATM. From the sample of 262 ICICI bank’s ATM-cum – Debit card holders, 100 percent of them accepted that they use convenience services provided at ATM. Inspection of the above multiple dichotomy analysis frequency table indicates that 100 percent of the ICICI bank’s debit card holders utilize basic convenience services such as balance enquiry and cash withdrawal. 75.2 percent use ATM to obtain statement of account, 27.5 percent use cheque book request service, 43.9 percent fast cash and 35.9 percent use debit card for deposit.

From the sample of 220 SBI bank’s debit card holders 100 percent of them accepted that they are using convenience services provided at ATM. 100 percent of debit card holders use basic convenience services such as balance enquiry and cash withdrawal, 92.3 percent utilize ATM to obtain statement of a/c, 62.7 percent use ATM to change PIN and 77.3 Percent use shared ATM facility. It is concluded that in both banks, debit card users use ATM to withdraw cash and for balance enquiry and also to obtain statement of account. Only few customers are using debit card for deposit of cash. So, the bank should adopt right strategy to promote these services and encourage customers to use more convenience services.

298

Table 4.4.2

Multiple Response Analysis of utilization with respect to

Value added services at ATM

Value added ICICI SBI services at ATM Response Response N Percent Percent N percent Percent of cases of cases Fund transfer between same 68 31.1% 49.3% 47 30.1% 56.6% bank/branch

Card to card transfer 15 6.8% 10.9% 20 12.8% 24.1%

Card to account transfer 2 .9% 1.4% 2 1.3% 2.4%

Credit card bill 56 25.6% 40.6% 36 23.1% 43.4% payment Insurance payment 14 6.4% 10.1% 19 12.2% 22.9%

Holy and trust donations 0 0.0% 0.0% 3 1.9% 3.6%

Educational fee payment 1 0.5% 0.7% 4 2.6% 4.8%

Mobile Top-ups 56 25.6% 40.6% 20 12.8% 24.1%

Air ticket payment 7 3.2% 5.1% 5 3.2% 6.0%

Total 219 100.0% 158.7% 156 100.0% 188.0%

Source: Primary data

The above table shows the ATM – cum – Debit card holders’ utilization of value added services provided at ATM. From the sample of 262 ICICI bank’s ATM- cum- Debit card holders, 138 respondents accepted that they use value added services at ATM. Among them 49.3 percent use fund transfer facility, 40.6 percent credit card bill payments. 40.6 percent use ATM for mobile top- ups. Services such as card to card transfer (10.9%), card to a/c transfer (1.4%), Educational fee payment (0.7%), insurance payment (10.1%) were used by few cardholders. In SBI, 83 debit card

299 holders accepted that they are using value added services at ATM. Among them 56.6 percent use fund transfer, 43.4 percent credit card bill payment, 24.1 percent mobile top up facility and 22.9 percent use Insurance payment facility at ATM.

It is concluded that the percentage of debit card holders using value added services at ATM is very low. So, the study banks should take steps to increase the usage of value added services provided at ATM.

300

Table 4.4.3 Multiple Response Analysis of utilization with respect to Debit card services at POS

ICICI SBI Debit card services at Response Percent Response POS N Percent of cases N percent Percent of cases Payment for purchases at POS 212 40.5% 99.1% 197 40.0% 100.0%

SMS alert on POS transaction 178 34.0% 83.2% 153 31.1% 77.7%

Cash withdrawal at POS 39 7.5% 18.2% 14 2.8% 7.1%

Attractive discount 41 7.8% 19.2% 20 4.1% 10.2%

Surcharge waiver 3 .6% 1.4% 7 1.4% 3.6%

Reward points 50 9.6% 23.4% 101 20.5% 51.3%

Total 523 100.0% 244.4% 492 100.0% 249.7%

Source: Primary data

The above table shows the utilization of debit card services at POS by debit card holders. From the sample of 262 debit card holders of ICICI bank, 214 card holders accepted that they use debit card services at POS. Among them, 99.1 percent are using debit card for purchase at point of sale, 83.2 percent use SMS alert facility and 23.4 percent use reward points. Other services such as cash withdrawal at POS (18.2%), discount (19.2%) surcharge waiver (1.4%) are used by few debit card holders only.

In SBI, 197 debit card holders accepted that they are using debit card services provided at point of sale. Among them, 100 percent are using debit card for purchase at point of scale, 77.7 percent SMS alert facility, 51.3 percent reward points, 10.2 percent discount and only 1.4 percent of cardholders are using surcharge waiver. It is concluded that in both banks majority of debit card holders are using SMS alert and reward points. The cash withdrawal facility at POS, discount and surcharge waiver is

301 used by very few cardholders. So, the banks should take appropriate steps to encourage customers to use these services for higher satisfaction.

Table 4.4.4

Multiple Response Analysis of utilization with respect to

Other services of Debit card

ICICI SBI Other services of Response Percent Response Debit card N Percent of cases N percent Percent of cases Operate multiple account with single 41 10.4% 20.6% 32 11.8% 23.0% debit card

Personal accident cover 26 6.6% 13.1% 3 1.1% 2.2%

Lost card liability cover 36 9.2% 18.1% 24 8.9% 17.3%

Purchase protection 19 4.8% 9.5% 18 6.6% 12.9%

Online utility 173 44.0% 86.9% 120 44.3% 86.3% payment Online purchase 98 24.9% 49.2% 74 27.3% 53.2%

Total 393 100.0% 197.5% 271 100.0% 195.0%

Source: Primary data

The above table shows the usage of services categorized under other services of debit card by card holders. From the sample 262 debit card holders of ICICI bank, 199 (76%) cardholders accepted that they are using services categorized as other services. Among them, 86.9 percent are using debit card for online utility bill payment, 24.9 percent for online purchases. 20 percent of cardholders are using single card for multiple accounts, and 18.1 percent use lost card liability cover service of debit card.

302

In SBI, 139 card holders accepted that they are using other services of debit card. Among them, 86.3 percent using debit card for online utility bill payment, 23 percent operate multiple account with single card and 17.3 percent use lost card liability cover service of debit card.

It reveals that in both banks services such as personal accident cover, purchase protection and lost card liability cover are used by very few card holders.

303

Table 4.4.5

Multiple Response Analysis of utilization with respect to

Convenience services of internet banking

ICICI SBI Convenience services Response Percent Response of internet banking N Percent of cases N percent Percent of cases Access account information 73 15.2% 100.0% 57 14.9% 100.0%

Bill payment and 56 11.7% 76.7% 42 11.0% 73.7% presentment

Bank statement by e- 51 10.6% 69.9% 48 12.6% 84.2% mail

Inter branch fund transfer(own account) 52 10.8% 71.2% 47 12.3% 82.5%

Inter branch fund transfer(third party a/c) 67 14.0% 91.8% 54 14.1% 94.7%

Transfer to any bank a/c 32 6.7% 43.8% 37 9.7% 64.9%

RTGS payment instruction 26 5.4% 35.6% 17 4.5% 29.8%

Apply for debit card 25 5.2% 34.2% 18 4.7% 31.6%

Intimate about loss of ATM 18 3.8% 24.7% 8 2.1% 14.0% card Open deposit account 21 4.4% 28.8% 12 3.1% 21.1%

Cheque status enquiry 40 8.3% 54.8% 25 6.5% 43.9%

Apply for phone banking 3 0.6% 4.1% 3 0.8% 5.3%

Apply for bank products 16 3.3% 21.9% 14 3.7% 24.6%

Total 480 100.0% 657.5% 382 100.0% 670.2%

Source: Primary data

304

The above table shows the internet banking customers’ usage of convenience services. Among 73 internet banking users of ICICI bank, 100 percent of them access account information through net banking, 76.7 percent use bill payment and presentment facility, 91.8 percent use inter branch fund transfer (third party a/c), 43.8 percent fund transfer to any bank a/c facility, 28.8 percent open deposit account through net, 54.8 percent use cheque status enquiry service and only21.9 percent use net to apply for bank products.

In SBI, among 57 net banking users all are accessing account information through net banking 73.7 percent use bill payment and presentment, 82.5 percent inter branch fund transfer to own a/c and 94.7 percent to third party a/c, 64.9 percent use fund transfer to any bank a/c facility, 21.1 percent use net banking for opening deposit account and 24.6 percent use net to apply for bank products.

It is concluded that in both banks customers are mainly using net banking for bill payment, fund transfer, and to access account information other convenience services are used by few customers.

305

Table 4.4.6

Multiple Response Analysis of utilization with respect to

Value added services of internet banking

ICICI SBI Value added services Response Percent Response of internet banking N Percent of cases N percent Percent of cases Linking bank a/c and 10 5.1% 15.6% 5 3.2% 9.1% credit card a/c Linking bank a/c and 9 4.6% 14.1% 7 4.5% 12.7% Demat a/c

Access credit card 20 10.2% 31.3% 10 6.5% 18.2% details

Credit card related 19 9.6% 29.7% 6 3.9% 10.9% service request Access Demat account 8 4.1% 12.5% 7 4.5% 12.7% details

Online Air ticket 17 8.6% 26.6% 19 12.3% 34.5% booking Online Railway ticket 57 28.9% 89.1% 55 35.5% 100.0% booking Income, services &Excise Duty 17 8.6% 26.6% 14 9.0% 25.5% payment Online custom duty 0 0.0% 0.0% 0 0.0% 0.0% payment Online shopping 40 20.3% 62.5% 32 20.6% 58.2%

Total 197 100.0% 307.8% 155 100.0% 281.8%

Source: Primary data

The above table shows the net banking customers’ usage of value added services provided through net banking. From the sample of 73 ICICI bank net banking customers,- 64 respondents accepted that they are utilizing value -added services of net banking. Among them, 89.1 percent use net banking for online Railway ticket booking, 31.3 percent for accessing credit card details, 26.6 percent for air ticket booking and income, service tax payment and 62.5 percent for online purchases. Other valued added services are used by very few net banking customers.

306

In SBI, 55 net banking customers accepted that they are using value added services. The value added services used by majority of the net banking users are : online Railway ticket booking (100%) online shopping (58.2%), online Air ticket booking (34.5%), income and service tax payment (25.5%). Other value added services are used only by very few net banking users. So the banks should take appropriate steps to promote these services and encourage customers to use for higher satisfaction.

307

Table 4.4.7

Multiple Response Analysis of utilization with respect to

Information based services of mobile banking

ICICI SBI Information based Response Percent Response services of mobile N Percent of cases N percent Percent banking of cases Balance enquiry 29 19.7% 100.0% 25 18.4% 100.0%

Last 5 transaction details 29 19.7% 100.0% 25 18.4% 100.0%

Cheque book request 11 7.5% 37.9% 9 6.6% 36.0%

Cheque status enquiry 12 8.2% 41.4% 18 13.2% 72.0%

Stop cheque request 2 1.4% 6.9% 3 2.2% 12.0%

Get credit card account 14 9.5% 48.3% 15 11.0% 60.0% details Get Demat account details 1 .7% 3.4% 3 2.2% 12.0%

Loan account details 5 3.4% 17.2% 9 6.6% 36.0%

Locate branch/ATM 22 15.0% 75.9% 18 13.2% 72.0%

Apply for bank product 4 2.7% 13.8% 1 .7% 4.0%

Status of service request 18 12.2% 62.1% 10 7.4% 40.0%

Total 147 100.0% 506.9% 136 100.0% 544.0%

Source: Primary data

The above table shows the usage of information based services of mobile banking by customers. Among the 29 mobile banking customers of ICICI 100 percent of them use mobile banking for balance enquiry and to know about last five transaction details, 62.1 percent use mobile banking to know the status of service request and 75.9 percent to locate branch/ATM. 48.3 percent to get credit card details and 41.4 percent to cheque status enquiry.

308

In SBI, among 25 mobile banking users all are using information based services and majority of them use mobile banking for balance enquiry (100%), last 5 transaction details (100%), cheque status enquiry (72%), credit card details (60%) and status of service request(40%)

It reveal that services such as stop cheque request, loan a/c details, demat a/c details, apply for bank product through mobile banking are used by very few mobile banking customers. So, the banks should take appropriate steps to encourage the mobile banking customers to avail more information based services.

309

Table 4.4.8

Multiple Response Analysis of utilization with respect to

Financial transaction based services of mobile banking

ICICI SBI Financial transaction Response Percent Response based services N Percent of cases N percent Percent of cases Bill payment 10 41.7% 66.7% 7 53.8% 70.0%

Fund transfer 9 37.5% 60.0% 6 46.2% 60.0%

Prepaid mobile recharge 5 20.8% 33.3% 0 0.0% 0.0%

Total 24 100.0% 160.0% 13 100.0% 130.0%

Source: Primary data

The above table shows the utilization of transaction based services by mobile banking customers. In ICICI bank out of 29 mobile banking customers, 15 customers accepted that they are using transaction based services. Among them 66.7 percent use bill payment, 60 percent use fund transfer services and only 33.3 percent use mobile banking for prepaid mobile recharge.

In SBI, out of 25 mobile banking customers, 10 customers accepted that they use transaction based services. Among them 70 percent use bill payment service and 60 percent fund transfer service and no customer of SBI is using prepaid mobile recharge service of mobile banking.

310

Table 4.4.9

Multiple Response Analysis of utilization with respect to

Convenience services of credit card

ICICI SBI Convenience services Response Percent Response of credit card N Percent of cases N percent Percent of cases Cash withdrawal at ATM 77 11.7 74.8% 61 12.5 75.3%

Cash advance at cash point 16 2.4 15.5% 1 0.2 1.2%

Online shopping 63 9.6 61.2% 45 9.2 55.6%

Online Railway ticket 70 10.6 68.0% 51 10.5 63.0% booking E-statement 26 4.0 25.2% 15 3.1 18.5%

SMS al ert 81 12.3 78.6% 71 14.6 87.7% utility bill payment 38 5.8 36.9% 34 7.0 42.0%

Online management of card 19 2.9 18.4% 6 1.2 7.4%

Auto debit facility 6 1.0 5.8% 4 0.8 4.9%

Payment option – cash/cheque/draft 100 15.2 97.1% 81 16.6 100.0%

Payment thr ough ATM 56 8.5 54.4% 36 7.4 44.4%

Payment through ECS 3 0.5 2.9% 2 0.4 2.5%

Drop facility 103 15.6 100.0 80 16.4 98.7%

Total 658 100.0 638.8 487 100.0 601.2%

Source: Primary data

The above table shows the usage of convenience services of credit card by credit cardholders. Among 103 credit card holders of ICICI bank, 74.8 percent use credit card for cash withdrawal at ATM, 61.2 percent for online shopping, 68 percent

311 for railway ticket booking and only 36.9 percent for utility bill payment. 78.2 percent cardholders use SMS alert service, 25.2 percent e-statement and only 5.2 percent auto debit facility. As for as payment option is concerned, 100 percent of the cardholders are using cheque/cash/draft and drop box. 54.4 percent use ATM for payment of credit card bill and only 2.9 percent are using ECS .

Among 81 credit card holders of SBI, 75.3 percent use credit card to withdraw cash from ATM, 63 percent for railway ticket booking, 55.6 percent for online shopping 87.7 percent use SMS alert, 78.5 percent use e-statement and 4.9 percent use auto debit facility. 100 percent of credit card holders use cheque/cash/draft and 98.7 percent drop boxes for credit card bill payment, 44.4 percent use ATM for this purpose and only 2.5 percent use ECS for credit card bill payment.

It is concluded that in both banks credit card holders besides using card for purchases at point of sales are mainly using it for cash withdrawal at ATM, and for railway ticket booking and their main payment option is cheque/cash/draft and drop boxes. So, the bank should encourage them to use ATM and ECS for payment of their credit card bill which will help them to avoid delay in payment of dues.

312

Table 4.4.10

Multiple Response Analysis of utilization with respect to

Value added services of credit card

Value added services ICICI SBI of credit card Response Percent Response N Percent of cases N percent Percent of cases Balance transfer facility 20 17.1% 24.1% 5 6.9% 9.6%

Dial –a- Draft facility 18 15.4% 21.7% 14 19.4% 26.9%

Personal loan on card 2 1.7% 2.4% 3 4.2% 5.8%

Interest free credit period 77 65.8% 92.8% 50 69.4% 96.2%

Total 117 100.0% 141.0% 72 100.0% 138.5%

Source: Primary data

The above table reveals the utilization of value added services of credit card by credit card holders.

In ICICI bank out of 103 credit cardholders, 82 cardholders accepted that they use value added services. The service that is used by majority of the respondents is interest free credit period (92.8%). Services such as balance transfer (24.1%) dial-a- draft (21.7%), personal loan on card (2.4) are used by very few customers. In SBI bank as well, only 52 credit and holders accepted that they are using value added services of credit card. Majority of the customer (96.2%) use interest free credit period. 26.9 percent use dial-a-draft facility and only 9.6 percent use balance transfer, 5.8 percent use personal loan on cards.

It is concluded that value added services are not utilized by majority of the credit card holders. So the study banks should create more awareness about value added services and should take necessary steps to encourage them to use this value added services.

313

Table 4.4.11

Multiple Response Analysis of utilization with respect to

Benefit services of credit card

ICICI SBI Benefit services of Response Percent Response credit card N Percent of cases N percent Percent of cases Add on card facility 59 18.0% 61.5% 38 19.9% 56.7%

Temporary credit limit 21 6.4% 21.9% 6 3.1% 9.0% enhancement Permanent credi t limit 30 9.1% 31.3% 11 5.8% 16.4% enhancement Self-set/monthly preset 27 8.2% 28.1% 13 6.8% 19.4% limit Limited lost card liability 30 9.1% 31.3% 2 1.0% 3.0%

Revolving credit facility 56 17.1% 58.3% 47 24.6% 70.1%

Cash back offer 18 5.5% 18.8% 14 7.3% 20.9%

Discount 29 8.8% 30.2% 6 3.1% 9.0%

Reward points 38 11.6% 39.6% 45 23.6% 67.2%

Fuel surcharge waiver 20 6.1% 20.8% 9 4.7% 13.4%

Total 328 100.0% 341.7% 191 100.0% 285.1%

Source: Primary data

The above table shows the utilization of benefit services of credit card by credit card holders. From the sample of 103 credit card holders of ICICI bank, 96 card holders accepted that they use benefit services of credit card. Among the various benefit services, majority of the customers use, add on card facility (61.5%), Revolving credit facility (58.3%). 39.6 percent of credit cardholders are using reward points, 30.2 percent discount and 31.3 percent permanent credit limit enhancement and only 21.9 percent are using temporary credit limit enhancement facility.

314

In SBI, 67 credit card holders accepted that they are using benefit services. Among them,70 percent are using revolving credit facility, 56.7 percent add on card facility, and 67.2 percent are using reward points. Other services are used by only few card holders that is temporary credit limit enhancement (9%), permanent credit limit enhancement (16.4%) discount (9%), cash back offer (20.9%).

It reveals that in both banks majority of the customers use only add on card facility, revolving credit facility and reward points among various benefit service. This may be due to lack of awareness, so the banks should create awareness about benefit services and adopt appropriate promotional strategy to promote their product.

315

Table 4.4.12

Multiple Response Analysis of utilization with respect to

Insurance services of credit card

Insurance services of ICICI SBI credit card Response Percent Response N Percent of cases N percent Percent of cases Personal accident cover 29 22.7% 42.0% 5 8.5% 11.9%

Credit shield cover 49 38.3% 71.0% 31 52.5% 73.8%

Life insurance on cardholder 31 24.2% 44.9% 14 23.7% 33.3%

Life insurance on add 6 4.7% 8.7% 0 0.0% 0.0% on card Purchase protection 13 10.2% 18.8% 9 15.3% 21.4%

Total 128 100.0% 185.5% 59 100.0% 140.5%

Source: Primary data

The above table shows the usage of insurance services by credit cardholders. Among 103 credit card holders of ICICI bank, only 69 card holders accepted that they are using insurance services. 42 percent of them are using personal acciden t cover, 71 percent credit shield cover, 44.9 percent life insurance on card and 18.8 percent are using purchase protection.

In SBI among 81 credit card holders, 42 card holders accepted that they are using insurance service. 73.8 percent of them are using credit shield cover, 33.3 percent life insurance on card, 21.4 percent purchase protection and only 11.9 percent are using personal accident cover.

It reveals that among various insurance services provided through credit card majority of the card holder use credit shield cover.

316

Table 4.4.13

Multiple Response Analysis of utilization with respect to

Any Branch Banking services

Any Branch Banking ICICI SBI services Response Percent Response N Percent of cases N percent Percent of cases Deposit of cash at non - 20 19.4% 71.4% 27 26.5% 56.3% home branch Deposit of cheque & 14 13.6% 70.0% 20 19.6% 41.7% clearing instrument Cash withdrawal at 15 14.6% 75.0% 15 14.7% 31.3% non-home branch Balance enquiry at non - 14 13.6% 70.0% 4 4.0% 14.3% home branch Get statement of a/c 10 9.7% 50.0% 8 7.8% 28.6%

Pass book updation 13 12.6% 65.0% 18 17.6% 64.3%

Fund transfer to third party a/c at another 17 16.5% 85.0% 10 9.8% 35.7% CBS branch

Total 103 100.0% 486.4% 102 100.0% 272.2%

Source: Primary data

The above table shows the usage of services by any branch banking customers. Among 20 any branch banking customers, 100 percent of them are using any branch banking facility for cash deposit, 65 percent for cheque and other clearing instrument deposit, 55 percent for cash withdrawal, 65 percent for fund transfer to third party a/c, 60 percent for pass book updating. Among 28 any branch banking customers of SBI, 96.4 percent use any branch banking facility for cash deposit 71.4 percent for deposit of cheque and other clearing instrument, 53.6 percent for cash withdrawal, 64.3 percent for pass book updating and only 38.7 percent use any banking facility for fund transfer. It reveals that the utilization of any branch banking services by ICICI customers is higher than SBI

317

4.5 INFERENTIAL ANALYSIS ON SAMPLES

HYPOTHESIS- I

Null Hypothesis: There is no significant association between occupation and ICICI Bank Customers’ Utilization with respect to various dimensions of ATM-cum-Debit card services

Table 4.5.1 Chi-Square test for significant association between occupation and ICICI Bank customers’ Utilization with respect to various dimensions of ATM- cum-Debit card services

Occupation Dimension Dimension utilization Business men professi onal Govt. employe e Private employe e Retired person others Total Chi-square P value Yes 15 11 37 37 5 10 115 (50.0) (42.3) (50.0) (42.0) (313) (35.7) No 15 15 37 51 11 18 147 3.523 0.620 (50.0) (57.7) (50.0) (58.0) (68.8) (64.3) Total 30 26 74 88 16 28 262

Convenience services Yes 11 8 17 25 1 6 68 (36.7) (30.8) (23.0) (28.4) (6.3) (21.4) No 19 18 57 63 15 22 194 6.254 0.282 (63.3) (69.2) (77.0) (71.6) (93.8) (78.6) Total 30 26 74 88 16 28 262

Valueadded services Yes 27 23 46 59 7 16 178 (90.0) (88.5) (62.2) (67.0) (43.8) (57.1) No 3 3 28 29 9 12 84 18.693 0.002*** (10.0) (11.5) (37.8) (33.0) (56.3) (42.9) Total 30 26 74 88 16 28 262 Servicesat POS Yes 16 8 5 10 2 0 41 (53.3) (30.8) (6.8) (11.4) (12.5) (0.0) No 14 18 69 78 14 28 221 47.750 0.000*** (46.7) (69.2) (93.2) (88.6) (87.5) (100.0) Total 30 26 74 88 16 28 262

Other services Note: The value within brackets refers to column percentage

318

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to convenience services and value added services at ATM. Hence there is no significant association between occupation and utilization of ICICI bank’s debit card holders with respect convenience and value added services at ATM. Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to services provided at POS and other services of debit card. Hence, there is a highly significant association between occupation and utilization with respect to services provided at POS and other services of debit card. It is concluded that services provided at POS and services categorized under the head ‘other services’ are highly used by businessman and utilization of these services by retired person is low compared to others. So the bank should take necessary steps to increase the usage of services at POS and other services by every category of customers.

319

HYPOTHESIS- II

Null Hypothesis: There is no significant association between occupation and SBI Bank Customers’ Utilization with respect to various dimensions of ATM-cum-Debit card services

Table 4.5.2 Chi-Square test for significant association between occupation and SBI Bank customers’ Utilization with respect to various dimensions of ATM- cum-Debit card services

occupation Total Chi- P value squar

e Dimension Dimension Utilization Business men professi onal Govt. employe e Private employe e Retired person others Yes 11 23 39 11 1 1 86 (39.3) (46.9) (47.0) (26.8) (8.3) (14.3) 12.608 0.027** No 17 26 44 30 11 6 134 (60.7) (53.1) (53.0) (73.2) (91.7) (85.7) Total 28 49 83 41 12 7 220

Convenience services Yes 15 15 8 6 2 1 47 (53.6) (30.6) (9.6) (14.6) (16.7) (14.3) No 13 34 75 35 10 6 173 28.048 0.000*** (46.4) (69.4) (90.4) (85.4) (83.3) (85.7)

Total 28 49 83 41 12 7 220

Value Value added services Yes 27 46 57 20 2 1 153 (96.4) (93.9) (68.7) (48.8) (16.7) (14.3) 57.563 No 1 3 26 21 10 6 67 0.000*** (3.6) (6.1) (31.3) (51.2) (83.3) (85.7) Total 28 49 83 41 12 7 220 Services at Services at POS Yes 16 6 7 1 1 1 32 (57.1) (12.2) (8.4) (2.4) (8.3) (14.3) 48.786 0.000*** No 12 43 76 40 11 6 188 (42.9) (87.8) (91.6) (97.6) (91.7) (85.7) Total 28 49 83 41 12 7 220 Other services Note: The value within brackets refers to column percentage

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Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to convenience services of ATM – cum – Debit card. Hence there is a significant association between occupation and utilization of SBI bank’s ATM-cum debit cardholders with respect to convenience services. Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to value added services at ATM, services at POS and other services of debit card. Hence, there is a highly significant association between occupation and utilization of SBI debit card holders with respect to value added services, service at POS and other services of debit card. It is concluded that convenience services at ATM are highly used by government employees. Value added services at ATM services as POS and other services are highly used by businessmen. So the SBI bank should take necessary steps to promote its product and should try to increase usage of various services by every category of customers through appropriate promotional strategy.

321

HYPOTHESIS- III

Null Hypothesis: There is no significant association between occupation and ICICI Bank customers’ Utilization with respect to various dimensions of Internet banking services

Table 4.5.3 Chi-Square test for significant association between occupation and ICICI Bank customers’ Utilization with respect to various dimensions of Internet banking services

Chi- occupation Total square P value

Dimension Utilization Business men professio nal Govt. employee Private employee Retired person others Yes 14 7 3 1 0 1 26 (60.9) (43.8) (21.4) (6.7) (0.0) (25.0) No 9 9 11 14 1 3 47 14.319 0.014** (39.1) (56.3) (78.6) (93.3) (100.0) (75.0) Total 23 16 14 15 1 4 73

Convenience Convenience services Yes 10 6 0 1 0 0 17 (43.5) (37.5) (0.0) (6.7) (0.0) (0.0) No 13 10 14 14 1 4 56 15.145 0.010** (56.5) (62.5) (100.0) (93.3) (100.0) (100.0) Total 23 16 14 15 1 4 73

Value added Value services Note: The value within brackets refers to column percentage

Since P value is less than 0.05, the null hypothesis rejected at 5% level of significance with respect to dimensions of internet banking. Hence, there is a significant association between occupation and utilization of ICICI bank’s Internet banking customers with respect to dimensions of internet banking services. It is concluded that the convenience services and value added services are highly used by businessmen. Utilization of internet banking services by professionals, private employees and Government employees is low. So the ICICI bank should adopt

322

appropriate promotional strategy to increase to usage of various dimensions of internet banking services among every category of customers.

HYPOTHESIS- IV

Null Hypothesis: There is no significant association between occupation and SBI Bank customers’ Utilization with respect to various dimensions of Internet banking services

Table 4.5.4Chi-Square test for significant association between occupation and SBI Bank customers’ Utilization with respect to various dimensions of Internet banking services

Chi- Occupation square P value Dimension Utilization Business men professio nal Govt. Employe e Private employee Retired person others Total Yes 16 1 0 0 0 0 17 (69.6) (8.3) (0.0) (0.0) (0.0) (0.0) 29.354 0.000*** No 7 11 13 8 1 0 40 (30.4) (91.7) (100.0) (100.0) (100.0) (0.0) Total 23 12 13 8 1 0 57

Convenience Convenience services Yes 14 4 1 0 0 0 19 (60.9) (33.3) (7.7) (0.0) (0.0) (0.0) No 9 8 12 8 1 0 38 16.194 0.003*** (39.1) (66.7) (92.3) (100.0) (100.0) (0.0) Total 23 12 13 8 1 0 57

Value added Value services Note: The value within brackets refers to column percentage

Since P value, is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to various dimensions of internet banking. Hence there is a highly significant association between occupation and utilization of SBI bank’s net banking users with respect to convenience and value added services. It is concluded that convenience and value added services provided through net banking is highly used by businessman. The utilization by other category of customers is very low. So, the SBI banks should take necessary steps to improve the usage of convenience and value added services through proper promotional strategy.

323

HYPOTHESIS- V

Null Hypothesis: There is no significant association between occupation and ICICI Bank Customers’ Utilization with respect to various dimensions of Mobile banking services

Table 4.5.5 Chi-Square test for significant association between occupation and ICICI Bank customers’ Utilization with respect to various dimensions of Mobile banking services

Chi- P Occupation square value

Dimension Dimension Utilization Business men professio nal Govt. employee Private employee Retired person others Total Yes 1 3 3 6 0 1 14 (25.0) (100.0) (30.0) (60.0) (0.0) (100.0) No 3 0 7 4 1 0 15 7.975 0.158 (75.0) (0.0) (70.0) (40.0) (100.0) (0.0) Total 4 3 10 10 1 1 29

Information Information based services Yes 1 1 4 3 0 0 9 (25.0) (33.3) (40.0) (30.0) (0.0) (0.0)

No 3 2 6 7 1 1 20 1.356 0.929 (75.0) (66.7) (60.0) (70.0) (100.0) (100.0) Total 4 3 10 10 1 1 29

Financial Financial transaction based services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05 the null hypothesis is accepted at 5% level of significance with respect to dimensions of mobile banking services. Hence there is no significant association between occupation and utilization of ICICI bank’s mobile banking customers with respect to various dimensions of mobile banking service. It is concluded that occupation has no influence on utilization with respect to dimension of mobile banking services.

324

HYPOTHESIS- VI

Null Hypothesis: There is no significant association between occupation and SBI Bank Customers’ Utilization with respect to various dimensions of Mobile banking services

Table 4.5.6 Chi-Square test for significant association between occupation and SBI Bank customers’ Utilization with respect to various dimensions of Mobile banking services

Chi- P Occupation square value

Dimension Dimension Utilization Business men professio nal Govt. employee Private employee Retired person others Total Yes 0 7 5 3 0 0 15 (0.0) (63.6) (62.5) (60.0) (0.0 ) (0.0) No 0 4 3 2 1 0 10 1.581 0.664 (0.0) (36.4) (37.5) (40.0) (100.0) (0.0) Total 0 11 8 5 1 0 25

Information Information based services Yes 0 5 0 1 0 0 6 (0.0) (45.5) (0.0) (20.0) (0.0) (0.0) No 0 6 8 4 1 0 19 5.662 0.129 (0.0) (54.5) (100.0) (80.0) (100.0) (0.0) Total 0 11 8 5 1 0 25

Financial Financial based transaction services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis accepted at 5% level of significance with respect to dimensions of mobile banking services. Hence, there is no significant association between occupation and utilization of SBI bank’s mobile banking customers with respect to dimensions of mobile banking services.

325

HYPOTHESIS- VII

Null Hypothesis: There is no significant association between occupation and ICICI Bank customers’ Utilization with respect to various dimensions of Credit card services

Table 4.5.7 Chi-Square test for significant association between occupation and ICICI Bank Customers’ utilization with respect to various dimensions of Credit card services

Chi- P value Occupation square

Dimension Utilization Business men professio nal Govt. employee Private employee Retired Person others Total Yes 9 6 1 10 0 0 26 (69.2) (50.0) (3.2) (23.3) (0.0) (0.0) 26.631 0.000*** No 4 6 30 33 0 4 77 (30.8) (50.0) (96.8) (76.7) (0.0) (100.0)

Total 13 12 31 43 0 4 103

Convenience Convenience services Yes 9 11 21 33 0 3 77 (69.2) (91.7) (67.7) (76.7) (0.0) (75.0) 2.927 0.570 No 4 1 10 10 0 1 26 (30.8) (8.3) (32.3) (23.3) (0.0) (25.0) Total 13 12 31 43 0 4 103

Value added Value services Yes 7 8 17 22 0 2 56 (53.8) (66.7) (54.8) (51.2) (0.0) (50.0) No 6 4 14 21 0 2 47 0.945 0.918 (46.2) (33.3) (45.2) (48.8) (0.0) (50.0) Total 13 12 31 43 0 4 103 Benefit based Benefit based services Yes 7 7 10 22 0 3 49 (53.8) (58.3) (32.3) (51.2) (0.0) (75.0) No 6 5 21 21 0 1 54 5.106 0.277 (46.2) (41.7) (67.7) (48.8) (0.0) (25.0) Total 13 12 31 43 0 4 103 Insurance Insurance services Note: The value within brackets refers to column percentage

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Since P value is less than 0.01, the null hypothesis is accepted at 1% level of significance with respect to convenience services of credit card. Hence there is a highly significant association between occupation and utilization of ICICI bank’s credit card holders with respect to convenience services. It reveals that businessmen are using more convenience services. Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance, with respect to value added services, benefit services and insurance services. Hence there is no significant association between occupation and utilization of ICICI bank’s credit card holders with respect to value added services, benefit services and insurance services of credit card.

327

HYPOTHESIS- VIII

Null Hypothesis: There is no significant association between occupation and SBI Bank Customers’ Utilization with respect to various dimensions of Credit card services

Table 4.5.8 Chi-Square test for significant association between occupation and SBI Bank Customers’ utilization with respect to various dimensions of Credit card services

Chi- P value Occupation square

Dimension Utilization Business men professio nal Govt. employee Private employee Retired person others Total Yes 5 3 1 6 0 0 15 (50.0) (12.5) (2.6) (66.7) (0.0) (0.0) 27.328 0.000*** No 5 21 37 3 0 0 66 (50.0) (87.5) (97.4) 33.3) (0.0) (0.0) Total 10 24 38 9 0 0 81

Convenience Convenience services Yes 8 16 19 7 0 0 50 (80.0) (66.7) (50.0) (77.8) (0.0) (0.0) No 2 8 19 2 0 0 31 4.855 0.183 (20.0) (33.3) (50.0) (22.2) (0.0) (0.0) Total 10 24 38 9 0 0 81

Value added Value services Yes 8 18 16 5 0 0 47 (80.0) (75.0) (42.1) (55.6) (0.0) (0.0) No 2 6 22 4 0 0 34 8.799 0.032** (20.0) (25.0) (57.9) (44.4) (0.0) (0.0) Total 10 24 38 9 0 0 81

Benefit based Benefit based services Yes 7 8 13 3 0 0 31 (70.0) (33.3) (34.2) (33.3) (0.0) (0.0) 4.867 0.182 No 3 16 25 6 0 0 50 (30.0) (66.7) (65.8) (66.7) (0.0) (0.0) Total 10 24 38 9 0 0 81

Insurance services services Insurance Note: The value within brackets refers to column percentage

328

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to convenience services of credit card. Hence there is a highly significant association between occupation and utilization of SBI bank’s credit cardholders with respect to convenience services. Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to benefit service. Hence there is a significant association between occupation and utilization of SBI bank’s credit card holders with respect benefit services of credit card. Since P value is higher than 0.05, the null hypothesis is accepted at 5% level of significance with respect to value added service and insurance services. Hence there is no association between occupation and utilization of SBI bank’s credit card holders with respect to value added services and insurance services.

It is concluded that convenience services are highly used by private employees and benefit services are highly used by professionals and businessmen. The occupation has no influence on the utilization of value added service and insurance services of credit card.

329

HYPOTHESIS- IX

Null Hypothesis: There is no significant association between monthly income and ICICI Bank customers’ Utilization with respect to various dimensions of ATM- cum- Debit card services

Table 4.5.9 Chi-Square test for significant association between monthly income and ICICI Bank Customers’ Utilization with respect to various dimensions of ATM-cum-Debit card services

Monthly income(Rs) Total Chi- P value

square 15000- 25000- 40000- >60000 <15000 25000 40000 60000 Dimension Utilization Yes 26 43 28 14 4 115 (41.3) (41.0) (53.8) (45.2) (36.4) No 37 62 24 17 7 147 2.910 0.573 (58.7) (59.0) (46.2) (54.8) (63.6) Total 63 105 52 31 11 262

Convenience services Yes 8 28 16 12 4 68 (12.7) (26.7) (30.8) (38.7) (36.4) No 55 77 36 19 7 194 9.660 0.047** (87.3) (73.3) (69.2) (61.3) (63.6) Total 63 105 52 31 11 262

Valueadded services Yes 28 71 42 27 10 178 (44.4) (67.6) (80.8) (87.1) (90.9) No 35 34 10 4 1 84 27.778 0.000*** (55.6) (32.4) (19.2) (12.9) (9.1) Total 63 105 52 31 11 262

Services at POS Yes 5 5 13 14 4 41 (7.9) (4.8) (25.0) (45.2) (36.4) No 58 100 39 17 7 221 39.743 0.000*** (92.1) (95.2) (75.0) (54.8) (63.6) Total 63 105 52 31 11 262

Other services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to convenience services of ATM - cum - Debit card at

330

ATM. Hence there is no significant association between monthly income and utilization of ICICI bank’s debit card holders with respect to convenience services provided as ATM. Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to value added services provided at ATM. Hence there is a significant association between monthly income and utilization of ICICI bank’s debit card holders with respect to value added services at ATM.

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to services at POS and other services of debit card. Hence there is a highly significant association between monthly income and utilization of ICICI bank’s debit card holders with respect to services at POS and other services of debit card.

It is concluded that services at POS are highly utilized by customers whose monthly income is above Rs.25000 and other debit card services are highly used by customers in the income group of Rs.40,000 – 60,00. So the ICICI bank should examine the utilization level of customers in different monthly income group and take necessary steps to encourage customers in the lower income group for more card usage through appropriate promotional strategy.

331

HYPOTHESIS- X

Null Hypothesis: There is no significant association between monthly income and SBI Bank customers’ Utilization with respect to various dimensions of ATM-cum-Debit card services

Table 4.5.10 Chi-Square test for significant association between monthly income and SBI Bank Customers’ Utilization with respect to various dimensions of ATM-cum-Debit card services

Monthly income(Rs) Chi- P value square Dimension Dimension Utilization <15000 15000- 25000 25000- 40000l 40000- 60000 >60000 Total Yes 12 21 34 9 10 86 23.243 (17.6) (42.0) (58.6) (39.1) (47.6) 0.000***

No 56 29 24 14 11 134

(82.4) (58.0) (41.4) (60.9) (52.4)

Total 68 50 58 23 21 220

Convenience Convenience services Yes 2 10 14 8 13 47 (2.9) (20.0) (24.1) (34.8) (61.9) 37.069 0.000*** No 66 40 44 15 8 173 (97.1) (80.0) (75.9) (65.2) (38.1) Total 68 50 58 23 21 220

Value added Value services Yes 23 35 51 23 21 153 (33.8) (70.0) (87.9) (100.0) (100.0) No 45 15 7 0 0 67 69.499 0.000*** (66.2) (30.0) (12.1) (0.0) (0.0) Total 68 50 58 23 21 220

Services atPOS Services Yes 1 1 13 4 13 32 (1.5) (2.0) (22.4) (17.4) (61.9) No 67 49 45 19 8 188 56.616 0.000*** (98.5) (98.0) (77.6) (82.6) (38.1) Total 68 50 58 23 21 220

Other services services Other Note: The value within brackets refers to column percentage

332

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to convenience services, value added services, services at POS and other services of debit card. Hence there is a highly significant association between monthly income and utilization of SBI bank’s debit card holders with respect to various dimensions of ATM - cum - debit card service. It is concluded that convenience services are highly used by the income group of Rs.25,000-40,000, value added services are highly used by income group of above Rs.60,000. Services at POS through debit card are highly used by customers whose income is above Rs.40,000. Services that are listed in the category “other services” are highly utilized by customers whose monthly income is above Rs.60,000. So the SBI bank should take necessary steps to increase usage of lower income group for achieving higher penetration of its product.

333

HYPOTHESIS- XI

Null Hypothesis: There is no significant association between monthly income and ICICI Bank customers’ Utilization with respect to various dimensions of Internet banking services Table 4.5.11 Chi-Square test for significant association between monthly income and ICICI Bank Customers’ Utilization with respect to dimensions of Internet banking services

Monthly income(Rs) Total Chi- P value <15000 15000- 25000- 40000- >60000 square 25000 40000l 60000 Dimension Utilization Yes 1 0 6 12 7 26 12.364 0.015** (16.7) (0.0) (28.6) (48.0) (63.6) No 5 10 15 13 4 47 (83.3) (100.0) (71.4) (52.0) (36.4) Total 6 10 21 25 11 73

Convenience Convenience services Yes 0 0 7 7 3 17 (0.0) (0.0) (33.3) (28.0) (27.3) No 6 10 14 18 8 56 6.452 0.168 (100.0) (100.0) (66.7) (72.0) (72.7) Total 6 10 21 25 11 73

Value added Value services Note: The value within brackets refers to column percentage

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance with respect to convenience services of internet banking. Hence there is a significant association between monthly income and utilization of ICICI bank’s net banking users with respect to convenience services. Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no significant association between monthly income and utilization with respect to value added services. It is concluded that the conveniences services are highly used by income group of above Rs.60,000 and monthly income has no influence on utilization of value added services of net banking.

So, the bank should take necessary steps to encourage low income group of customers and the customers whose income is below Rs.40,000 for higher satisfaction and penetration .

334

HYPOTHESIS- XII

Null Hypothesis: There is no significant association between monthly income and SBI Bank Customers’ Utilization with respect to various dimensions of Internet banking services

Table 4.5.12Chi-Square test for significant association between monthly income and SBI Bank Customers’ Utilization with respect to various dimensions of Internet banking services

Monthly income(Rs) Chi- square P value

Total <15000 15000- 25000- 40000- >60000 25000 40000l 60000 Dimension Dimension Utilization Yes 0 0 0 1 16 17 (0.0) (0.0) (0.0) (6.3) (84.2) No 1 4 17 15 3 40 40.450 0.000*** (100.0) (100.0) (100.0) (93.8) (15.8) Total 1 4 17 16 19 57

Convenience services Yes 0 0 2 3 14 19 (0.0) (0.0) (11.8) (18.8) (73.7) No 1 4 15 13 5 38 21.511 0.000*** (100.0) (100.0) (88.2) (81.3 (26.3) Total 1 4 17 16 19 57

Valueadded services Note: The value within brackets refers to column percentage

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance with respect to dimensions of internet banking. Hence there is a highly significant association between monthly income and utilization of SBI bank’s net banking users with respect to dimensions of internet banking services. It is concluded that the utilization of income group of above Rs.60,000 is higher than other income group. So, the bank should take necessary steps to encourage lower income group and customers whose is between 25,000 and 40,000 to use more services of net banking.

335

HYPOTHESIS- XIII

Null Hypothesis: There is no significant association between monthly income and ICICI Bank customers’ Utilization with respect to various \ dimensions of Mobile banking services

Table 4.5.13 Chi-Square test for significant association between monthly income and ICICI Bank Customers’ utilization with respect to various dimensions of Mobile banking services

Monthly income(Rs) Chi- P value <15000 15000- 25000- 40000- >6000 square 25000 40000l 60000 0 Dimension Utilization Total Yes 2 6 3 3 0 14 (100.0) (42.9) (33.3) (75.0) (0.0) No 0 8 6 1 0 15 4.256 0.235 (0.0) (57.1) (66.7) (25.0) (0.0) Total 2 14 9 4 0 29

Information based services Yes 0 4 3 2 0 9 (0.0) (28.6) (33.3) (50.0) (0.0)

No 2 10 6 2 0 20 1.634 0.652 (100.0) (71.4) (66.7) (50.0) (0.0) Total 2 14 9 4 0 29

Financial transaction based services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance, with respect to dimensions of mobile banking services. Hence there is no significant association between monthly income and utilization of ICICI banks’ mobile banking customers with respect to dimensions of mobile banking services. It is concluded the monthly income has no influence on utilization of various dimensions of mobile banking services.

336

HYPOTHESIS- XIV

Null Hypothesis: There is no significant association between monthly income and SBI Bank customers’ Utilization with respect to various dimensions of Mobile banking services

Table 4.5.14 Chi-Square test for significant association between monthly income and SBI Bank Customers’ utilization with respect to various dimensions of Mobile banking services

Monthly income(Rs) Chi- 25000- 40000- >60000 square P value <15000 15000- 40000l 60000 25000 Dimension Utilization Total Yes 0 3 11 1 0 15 (0.0) (60.0) (78.6) (33.3) (0.0) 7.401 0.060 No 3 2 3 2 0 10 (100.0) (40.0) (21.4) (66.7) (0.0) Total 3 5 14 3 0 25

Information based services Yes 0 1 4 1 0 6 (0.0) (20.0) (28.6) (33.3) (0.0) No 3 4 10 2 0 19 1.295 0.730 (100.0) (80.0) (71.4) (66.7) (0.0)

Total 3 5 14 3 0 25 Financial transaction based services Note: The value within brackets refers to column percentage

Since P value is greater than 0.05 the null hypothesis is accepted at 5% level of significance with respect to dimensions of mobile banking services. Hence there is no significant association between monthly income and utilization of SBI bank’s mobile banking customers with respect to dimension of mobile banking services. It is concluded that monthly income has no influence on utilization of mobile banking services.

337

HYPOTHESIS- XV

Null Hypothesis: There is no significant association between monthly income

and ICICI Bank customers’ Utilization with respect to various

dimensions of Credit card services

Table 4.5.15 Chi-Square test for significant association between monthly income and ICICI Bank Customers’ utilization with respect to various dimensions of Credit card services

Monthly income(Rs) 15000- 25000- 40000- Total Chi- P value <15000 25000 40000l 60000 >60000 square Dimension Utilization Yes 1 3 9 7 6 26 (11.1) (5.8) (33.3) (77.8) (100.0) No 8 49 18 2 0 77 43.271 0.000*** (88.9) (94.2) (66.7) (22.2) (0.0)

Total 9 52 27 9 6 103

Convenience Convenience services Yes 7 37 20 8 5 77 (77.8) (71.2) (74.1) (88.9) (83.3) No 2 15 7 1 1 26 1.594 0.810 (22.2) (28.8) (25.9) (11.1) (16.7) Total 9 52 27 9 6 103

Value added Value services Yes 4 27 13 8 4 56 (44.4) (51.9) (48.1) (88.9) (66.7) No 5 25 14 1 2 47 5.592 0.232 (55.6) (48.1) (51.9) (11.1) (33.3) Total 9 52 27 9 6 103

Benefit based Benefit based services Yes 8 18 12 6 5 49 (88.9) (34.6) (44.4) (66.7) (83.3) No 1 34 15 3 1 54 14.158 0.007*** (11.1) (65.4) (55.6) (33.3) (16.7) Total 9 52 27 9 6 103

Insurance Insurance services Note: The value within brackets refers to column percentage

Since P value is less than 0.01, the null hypothesis rejected at 1% level of significance with respect to convenience services and insurance services of credit

338 card. Hence there is a highly significant association between monthly income and utilization of ICICI bank’s credit card holders with respect to convenience services and insurance services of credit card.

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance with respect to value added services and benefit services of credit card. Hence there is no significant association between monthly income and utilization of ICICI bank’s credit card holders with respect to value added services and benefit services.

It is concluded that convenience services and Insurance services of credit card is highly used by the cardholders whose income is above Rs.60,000. So the bank should take necessary to find out the reason for low utilization of services by lower income group and adopt appropriate strategy to improve the usage.

339

HYPOTHESIS- XVI

Null Hypothesis: There is no significant association between monthly income and SBI Bank customers’ Utilization with respect to various dimensions of Credit card services

Table 4.5.16 Chi-Square test for significant association between monthly income and SBI Bank Customers’ utilization with respect to various dimensions of Credit card services

Monthly income(Rs) Chi- P value square

15000- 25000- 40000- >60000 <15000 25000 40000l 60000 Dimension Utilization Total Yes 0 3 5 4 3 15 (0.0) (11.1) (13.2) (40.0) (100.0) No 3 24 33 6 0 66 18.646 0.001*** (100.0) (88.9) (86.8) (60.0) (0.0) Total 3 27 38 10 3 81

Convenience services Yes 2 15 24 6 3 50 (66.7) (55.6) (63.2) (60.0) (100.0) No 1 12 14 4 0 31 2.372 0.668 (33.3) (44.4) (36.8) (40.0) (0.0) Total 3 27 38 10 3 81

Valueadded services Yes 1 12 25 6 3 47 (33.3) (44.4) (65.8) (60.0) (100.0) No 2 15 13 4 0 34 5.922 0.205 (66.7) (55.6) (34.2) (40.0) (0.0) Total 3 27 38 10 3 81

Benefit based services Yes 0 5 16 7 3 31 (0.0) (18.5) (42.1) (70.0) (100.0) 15.656 0.004*** No 3 22 22 3 0 50 (100.0) (81.5) (57.9) (30.0) (0.0) Total 3 27 38 10 3 81

Insurance services Note: The value within brackets refers to column percentage

Since P value is less 0.01, the null hypothesis is rejected at 1% level of significance with respect to convenience services and insurance services of credit card. Hence, there is a highly significant association between income group and

340 utilization of SBI bank’s credit card holders with respect of convenience services and insurance services. Since P value is greater than 0.05 the null hypothesis is accepted at 5% level of significance with respect to value added services and benefit based services of credit card. Hence there is no significant association between monthly income and utilization of credit card holders with respect to value added services and benefit based services. It is concluded that convenience services and insurance services are highly used by higher income group whose earning is above Rs.60,000 and monthly income has no influence on the utilization of value added services and benefit based services of credit card.

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SUMMARY

This chapter analyses the data pertaining to awareness and utility of e- banking services. The e-banking products that offer multiple services are only taken for analyses such as ATM - cum - debit card, credit card, internet banking, mobile banking and any branch banking. The services of each product have been classified. Based on the classification customers’ awareness and utilization were evaluated by using yes/no pattern, giving one point for yes response and zero for no response. Multiple response analysis has been used to analyse the customer’s awareness and utilization of e-banking services.

The multiple response analysis of awareness of ATM – cum – debit card holders with respect to convenience services reveals that majority of the respondents in both SBI and ICICI bank are aware of convenience services offered at ATM. Besides basic convenience services such as balance enquiry

(100%), cash withdrawal (100%), the services that are known to majority of the debit card holders, in ICICI are: obtain statement of a/c (79.8%), deposit of cash (77.1%), Fast cash (64.9%), cheque book request (46.2%). In SBI as well all debit card holders are aware of basic convenience services such as balance enquiry and cash withdrawal. Besides these services, the services that are known to majority of SBI debit card holders are: obtain statement of a/c

(92.7%) change of PIN (88.2), fast cash (62.3%), cash deposit (45%).

The multiple response analysis of awareness of ATM - cum - debit card holders reveals that 224 cardholders from ICICI and 164 cardholders from SBI accepted that they are aware of value added services provided at ATM. It is

342 concluded that majority of cardholders from the study banks are aware of many value added services and the services that are known to few card holders are card to a/c transfer, educational, holy and trust donation payment services at

ATM.

The multiple response analysis of awareness of debit card holders with respect to services available at point of sale reveals that 258 cardholders from

ICICI and 219 from SBI accepted that they are aware of services provided at

POS. Besides payment for purchases, the services that are known to majority of the cardholders are: SMS alert (91.5%), Reward points (64.9%), discount

(45.6%) cash withdrawal at POS (47.9%). In SBI, SMS alert (94.5%), Reward points (72.6%), Discount (35.2%), cash withdrawal at POS (28.8%).It is concluded that in both banks the majority of the card holders aware of services provided at POS. The awareness of cardholders towards certain POS services is low such as cash withdrawal at POS, and surcharge waiver.

The multiple response analysis of awareness of SBI and ICICI banks customers’ towards convenience services of Internet banking reveals that the percentage respondents who are aware of convenience services of net banking is very high in both banks. The analysis of awareness of customers towards value added services of net banking reveals that 69 net banking users of ICICI and 55 net banking users of SBI accepted that they are aware of value added services. It reveals that in both banks the services that are known to majority of net banking users are online railway ticket booking online air ticket booking,

343 online shopping, income and service tax payment and access credit details through net banking.

The multiple response analysis of awareness of mobile banking users towards transaction based services offered by SBI and ICICI reveals that majority of mobile banking users of these two banks are aware of transaction based services.

The analysis of awareness of credit card holders towards value added services reveals that 87 respondents of ICICI bank and 54 respondents of SBI accepted that they are aware of value added services of credit card and the awareness of cardholders towards value added services of credit card is low. So the banks should take appropriate steps to promote value added services of credit card in this area of study.

The multiple response analysis of awareness of credit card holders towards benefit services reveals that 102 cardholders of ICICI and 79 cardholders of SBI accepted that they are aware of benefit services of credit card. It is concluded that comparatively ICICI bank’s credit card holder’s awareness towards benefit services are higher than SBI as the percentage of respondents aware of other benefit services such as temporary credit limit, permanent credit limit, self -set/monthly preset limit, limited lost card liability cover and fuel surcharge waiver is lesser than ICICI. So, the SBI should take step to create awareness about these benefit services.

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The analysis of awareness towards insurance services of credit card offered by SBI and ICICI banks reveals that 71 cardholders of ICICI and only

57 cardholders of SBI have accepted that they are aware of insurance service of credit card. It is concluded that in both banks the number cardholders who are aware of insurance services is less and majority of them are aware of credit shield cover, life insurance on cardholder and purchase protection service. So, the study banks should take necessary steps to increase the cardholder’s awareness towards insurance services of credit card.

The multiple response analysis of utilization of ATM – cum – debit card holders with respect to convenience services at ATM reveals that 100 percent of the debit card holders use ATM to withdraw cash and for balance enquiry. It is concluded that services such as cash deposit through debit card and cheque book request services are not used by many cardholders. Hence the banks should take steps to encourage customers to use more and more convenience services.

The multiple response analysis of utilization with respect to value added services at ATM reveals that only 138 debit card holders of ICICI and 83 debit card holders of SBI have accepted that they utilize value added services at

ATM. It is concluded that the percentage of debit cardholders using value added services is very low. So the study banks should take necessary steps to encourage customers to use more and more value added services at ATM through appropriate promotional strategy.

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The analysis of debit card holders’ usage with respect to services at POS reveals that 214 card holders of ICICI and 197 card holders of SBI use debit cards at point of sale. The services that are highly utilized by ICICI and SBI card holders at POS are SMS alert and reward point services. It is concluded that the services such as discount, surcharge waiver and cash withdrawal at

POS are not all used by many cardholders.

The analysis of utilization with respect to convenience services of net banking reveals that 100 percent of net banking users utilize net banking for accessing account information and the analysis of utilization with respect to value added services of net banking reveals that 64 net banking users of ICICI and 55 net banking users of SBI have accepted that they are utilizing value added services. The main services utilized by Internet banking customers of both banks are online railway ticket booking and online shopping other services in the category of value added services are not used by many internet banking customers. The analysis of utilization with respect to information based mobile banking services reveals that majority of the mobile banking customers (100%) of both banks use mobile banking for balance enquiry and get last 5 transaction details. Services such as cheque status enquiry, get credit card details, locate branch/ATM, status of service request services are utilized by reasonable number of mobile banking users and the number of users of transaction based services is low. So, the study banks should take necessary steps to increase the usage of transaction based services by customers.

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The analysis of utilization with respect to convenience services of credit card reveals that besides usage of credit card for purchases, credit card holders of SBI and ICICI are using it mainly for cash withdrawal, online railway ticket booking. The multiple response analysis of utilization with respect to value added services of credit card reveals that 83 credit card holders of ICICI and 52 credit card holders of SBI have accepted that they are utilizing value added services. Among the various services the only service that is used by majority of them is interest free credit period. Other value added services such as balance transfer facility, dial-a-draft facility and personal loan on card are not used by many cardholders. The multiple response analysis of utilization with respect to benefit services and insurance services of credit card reveals that 96 card holders of ICICI and 67 card holders of SBI have accepted that they are aware of benefit services of credit card. The services that are highly used by

ICICI and SBI card holders are add on card facility, Revolving credit facility and Reward points. Among the various insurance services offered by banks credit shield cover is highly utilized `by majority of the card holders.

HYPOTHESIS I to XXIV- test was conducted to find out whether there is any association between age, gender, educational qualification and awareness with respect to dimensions of e-banking, produces. In reveals that there is an association between SBI ATM - cum - Debit card users’ awareness with respect to convenience services, services at POS and age group. The awareness of age group below 30 years and 30-40 years is higher than other age group.

The awareness of age group of above 50 years is very low. There is a

347 significant association between age group and awareness of ICICI bank’s net banking customers towards value added services. The age groups of 30-40 years and 40- 50 years are highly aware of value added services. There is a significant association between age group and awareness of ICICI bank’s credit card holders with respect to benefit services. The awareness of younger age group is lesser than other age group.

The test reveals that there is an association between gender and awareness of ICICI bank’s debit card holders with respect to other services of debit card. The awareness of male cardholder is higher than female. There is a significant association between gender and awareness of ICICI bank’s net banking customers with respect to convenience services and value added services of net banking. The awareness of male is higher than female with respect to convenience and value added services of net banking. The test also reveals that there is an association between gender and awareness of SBI bank’s credit cardholders with respect to insurance services of credit card and the awareness of male is higher than female.

The next test shows that there is an association between educational qualification and awareness of ICICI bank’s debit card holders with respect to value added services at ATM. It reveals that the awareness of graduate is higher. The test also reveals that there is an association between educational qualification and awareness of SBI’s Internet banking customers with respect to convenience services. It shows that the awareness of graduates is higher than others. Another test shows there is an association between educational

348 qualification and awareness of ICICI bank’s credit card holders with respect to insurance services. In SBI, the awareness of credit card holder with professional qualification is higher than other with respect to convenience and benefit services of credit card.

Hypothesis I to VIII - test was conducted to find out if there is any association between occupation, monthly income and utility of various dimensions of e-banking services offered by SBI and ICICI bank’s debit card holders with respect to services at POS and other services of debit card. It is concluded that these services are highly utilized by businessman there is an association between occupation and utilization of SBI bank’s debit card holders with respect to various dimensions of debit card services. It reveals that convenience services at ATM are highly used by government employees whereas value added services at POS and other services of debit card is highly used by businessman.

The test of association between occupation and utilization of ICICI bank’s net banking users reveals that the various dimensions of net banking services are highly used by businessman. In SBI bank also the various dimensions of net banking services are highly used businessman. The test to find association between occupation and utilization of ICICI bank’s credit card holders reveals that there is an association between occupation and utilization with respect to convenience services. It was found that convenience services of credit card are highly used by businessmen. As for as credit card services of

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SBI reveals that convenience services are highly used by private employees and benefit services are highly used by professionals.

HYPOTHESIS IX to XVI, test was conducted to find if there is any association between monthly income and utilization of various dimensions of e-banking services provided by SBI and ICICI banks. There is an association between monthly income and utilization of SBI, ICICI bank’s debit card holders with respect to dimensional of debit card services. In ICICI bank, services at POS is highly utilized by customers whose monthly income is above

Rs,25,000 and other debit card services are highly used by customers in the income group of Rs.40000 – 60000. In SBI, convenience services at ATM is highly used by income group Rs.25000 – 40000 and the value added services by the income group whose earning is above Rs.60000. The services listed in the category of other services are highly by customers whose monthly income is above Rs.60000.

The test further reveals that convenience services of net banking provided by ICICI is highly utilized by customers whose income is above

Rs.60000. In SBI bank, both convenience and value added services of net banking are highly used by customers whose income is higher than Rs.60000.

The test to find association between monthly income and utilization of various dimensions of credit card services offered by SBI and ICICI reveals that there is an association between monthly income and utilization of ICICI bank’s credit card holders with respect to convenience services and insurance services and these services are highly used by cardholders whose income is above

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Rs.60,000. In SBI the convenience and insurance services are highly used by cardholders whose income is above Rs.60000.

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CHAPTER – V

PROBLEMS PERCEIVED BY E-BANKING CUSTOMERS

5.1. INTRODUCTION

In this chapter the e-banking customers’ perceptions of the various problems are analysed and their views on resolution of problems and incidents are evaluated. The perception of e-banking customers upon the problems experienced by them has been evaluated based on the responses got on the following five point scale:

Strongly Agree – 5 Agree – 4 Neither agree nor disagree – 3

Disagree – 2 Strongly disagree – 1

Based on the above five point perception, the problems have been evaluated with respect to each e-banking product separately. Hundred problems stated in the questionnaire have been divided into the following eight categories and analysed separately.

5.1.1. ATM related problems:

(1) ATMs are insufficient (2) ATMs not in prominent place (3) Insufficient cash balance at ATMs (4) Lack of connectivity with more banks (5) Amount allowed to drawn per day is low (6) Account debited cash not dispensed (7) Frequent card blocking (8) safety situation around ATM not satisfactory (9) Heavy service charge for cash withdrawal at other banks ATM (10) Heavy charges for fund transfer through VISA money transfer and money send option.

5.1.2. Debit Card related problems

(1) Delay in giving final resolution for disputed transactions (2) Cancellation or blocking of card takes more time (3) cancellation of card without assigning any reason (4) Debiting cardholders a/c twice (5) It takes more than a month to get back wrongly debited amount. (6) Getting ATM – cum – Debit card is time consuming (7) Debit card for online purchase is risky (8) charges for issuing replacement card is high.

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5.1.3. Credit card related problems

(1)Hidden charges and basis of applying interest not known (2) Unwarranted over draft allowed without consent (3) Unannounced slashing of credit limit (4) Unsolicited credit card (5) New cards incepted and misused before they reach customers (6) Banks are in the dock of using strong arm tactics to recover dues (7) Difficulty in closure and blocking of lost card (8) Difficulty in returning the card issued, (9) Charges for things that customer did not buy. (10) Debiting card a/c twice (11) Drop boxes are not sufficient (12) Credit limit fixed is low. (13) Delay in issuing new cards in the place of lost card (14) Delay in sending monthly statement of a/c (15) Error in statement of a/c (16) Delay in sending duplicate statement of a/.c (17) Providing unbelievable credit limit without reason (18) Reason for rejecting card application not communicated (19) Sharing card holders information with subsidiaries and affiliates (20) Receiving unwanted calls from agents (21) Receiving calls about payment outstanding even after payment made (22) risk of giving card number when buying online (23) Products purchased through card are costlier (24) Merchant hesitate to accept credit card. (25) Merchant charge heavy transaction cost (26) Merchant establishment are not displaying statement of “credit card accepted” (27) Cash back offers and reward points are not much rewarding. (28) Usurious interest charges on outstanding (29) Heavy fee on late payment. (30) Over limit credit charges are high (31) Heavy charges for cash withdrawal at ATM (32) Finance charges are very high on extended credit and cash advance (33) Foreign currency transaction fee is high (34) surcharge on railway ticket reservation and petrol filling is high (35) Cheque collection charges are high (36) High outstation cheque processing fee (37) Replacement card fee is high (38) Statement retrieval fee is high (39) Charging late payment fee for a short payment of few paise.

5.1.4. Net Banking Related Problems

(1) Information on bank’s website not current and updated (2) the websites are more bank centric and less customer centric (3) The websites are not telling how a particulars product or scheme is beneficial or profitable for a customer (4) Difficulty in identifying the authenticity of bank’s e-mail (5) Difficulty in identifying the difference between bank’s website and spoof website (6) Delay in getting back the amount after cancellation of train ticket booked through net banking (7) Online Air

353 ticket booking through merchant side involves heavy fee (8) Fund transfer to any other bank’s account through net banking is available in selected banks in selected cities.

5.1.5. Mobile banking related problems:

(1) The permissible amount of financial transaction per day using mobile banking is low (2) SMS alert on credit or debit transaction is only for higher value transactions (3) Financial transactions are only possible on iphone.

5.1.6. RTGS, NEFT, ECS related Problems:

(1) RTGS, NEFT is enabled only in specific branches across India. (2) Non – credit or delay in credit to the beneficiary a/c in case of NEFT transactions. (3) As a sponsor bank of ECS debit and credit, banks collects heavy charges.

5.1.7 Any branch banking related problems:

(1) Permissible amount of deposit is low (2) Permissible amount of withdrawal is low. (3) Huge charges for deposit of intercity cheques at non-home branch (4) Heavy service charge for intercity fund transfer to third party a/c at another CBS branch.

5.1.8. Problems related to fund

(1) Skimmers and cameras used by fraudsters to collect card information (2) Phishing email seeking card information Pose trust worthy source. (3) Fake calls to wheedle out financial information (4) Chances of capturing card number through charge slip is high (5) Photo copies of card used by fraudster to make online purchase. (6) Unsolicited credit card application raises chances of fraud. (7) Unauthorized person or hacker traps data travelling across network (8) Information provided by card users to the concerned website for online purchase are backed by fraudsters. (9) Through cookies in the website fraudsters collect confidential information (10) Malicious or malware software designed to steel password grows exponentially. (11) Malware program in an undesirable website or an e-mail from unknown source is high (12) viruses through free trail offers of software and services are high.

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All the eight major classifications of problems have been analysed by using five point Likert summated rating scale to evaluate the e-banking product user’s problems perception.

5.2 DESCRIPTIVE ANALYSIS OF SAMPLES

Table 5.2.1

Respondents interest in complaining about the problem

Complaints Frequency Percentage

Yes 318 66.0

No 164 34.0

Total 482 100.0

Source: Primary data

The above table shows the e-banking user’s interest in contacting the bank for their problems related to e-banking products and services. It reveals that 66 percent were interested and able to contact the bank to report their problems and 34 percent were not able to contact the bank to report their problems. It is concluded that 34 percent of the respondents were not able to make complaint or contact the bank providing e-banking services.

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Table 5.2.2

Reason for not making complaints

Reasons Frequency Percentage

Failure of previous effort 43 26.2

Busy with work 65 39.7

Automatic rectification 32 19.5

Other reason 24 14.6

Total 164 100.0

Source: Primary data

The above table shows the reasons for which the e-banking customers were unable to contact the service providing bank for their problems or were not interested in making complaint. It shows that 39.7 percent were busy with their work, 26.2 percent felt that their previous efforts failed, 19.5 percent felt that the problems may be rectified automatically by banks and 14.6 percent had other reasons such as customer care centers always busy, unaware of proper channel for complaint making, fear of tedious procedures involved, and lack of communication due to language problems. It reveals that majority of the respondents were busy with their work and the failure of previous effort had an impact on them. It is concluded that the study banks should take necessary steps to keep the customers aware of the proper channels to make complaints, simplify the grievance handling methods and to easily communicate in their local language effectively for solving problems quickly.

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Table 5.2.3

Methods of complaining

Methods Frequency Percentage

Through Help line 178 56.0

Internet 82 25.8

Other modes 58 18.2

Total 318 100.0

Source: Primary data

The above table reveals the e-banking product user’s method of approach to make their complaints to the banks. It shows that 56 percent of the respondents gave complaints through customer care helpline, 25.8 percent through internet, and 18.2 percent through other modes such as e-mail, SMS, and by directly meeting the bank officials .It reveals that majority of the respondents gave complaints through customer helpline. It is concluded that the banks should provide more helpline services for handling problems quickly and proper training to customer care staffs so that they can create friendly atmosphere when customers approach them with problems. This will build confidence among customers on banks and better satisfaction.

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Table 5.2.4

Number of times complaints made

Number of attempts Frequency Percentage

<3 208 65.4

3-6 65 20.4

>6 45 14.2

Total 318 100.0

Source: Primary data

The above table shows the number of times respondents approached the banks regarding the problems. It represents that 65.4 percent approached less than three times, 20.4 percent three to six times and 14.2 percent more than six times in an attempt to give complaint to the service providing banks. It is concluded that majority of the respondents have given complaints less than three times.

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Table 5.2.5

Problems solved by banks

Problems solved Frequency Percentage

Yes 230 72.3

No 88 27.7

Total 318 100.0

Source: Primary data

The above table shows that 72.3 percent of problems were solved by banks, 27.7 percent were not solved properly. It reveals that the majority of problems were solved but not all the problems solved by banks. It is concluded that the banks providing e-banking services should take steps to solve all the problems of the customers for better satisfaction in the study area.

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Table 5.2.6

Duration of time required for the bank to solve the problem

Time taken Frequency Percentage

Within a day 22 9.6

Within a week 142 61.7

More than a week 66 28.7

Total 230 100.0

Source: Primary data

The above table shows the time required by banks to solve the problems of their customers. It represents that 61.7 percent of the problems were solved within a week, 28.7 percent more than a week and 9.6 percent within a day. It is concluded that majority of the respondents’ problems, were solved by banks in a week. As the expectation of every customer is quick redressal of their problems, the banks should take immediate steps to solve problems immediately for better satisfaction.

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Table 5.2.7

Overall problems of e-banking customers

Level of problem Frequency Percentage

Low 146 30.3

Moderate 193 40.0

High 143 29.7

Total 482 100.0

Source: Primary data

The above table shows the overall problems perceived by the respondents. It represents that 40 percent of the respondent’s problems are moderate, 30.3 percent are low and 29.7 percent are high. It is concluded that majority of the respondents faced moderate problems in the study area.

FIG.5.2.7 OVER ALL PROBLEMS OF E- BANKING CUSTOMERS

45 40 40 35 30.3 29.7 30 25 Percentage 20 Level of problem 15 10 5 0 12 3 45 6 7 8910

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Table 5.2.8

Overall satisfaction of respondents towards problem handling

Opinion about Frequency Percentage satisfaction

Highly dissatisfied 45 9.3

Dissatisfied 122 25.3

Neither satisfied nor 65 13.5 dissatisfied

Satisfied 182 37.8

Highly satisfied 68 14.1

Total 482 100.0

Source: Primary data

The above table shows the overall satisfaction of respondents with reference to problems handled by the study banks. It reveals that 37.8 percent were satisfied, 25.3 were dissatisfied, 13.5 percent neither satisfied nor dissatisfied and 9.3 percent highly dissatisfied with reference to the problems handled by the study banks. It is concluded that the overall satisfaction of respondents towards problem handling is average. So the study banks should take necessary steps to examine and find an alternative way of grievance redressal method for better satisfaction of e-banking customers.

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5.3 INFERENTIAL ANALYSIS ON SAMPLES

HYPOTHESIS- I

Null Hypothesis: There is no significant difference between banks and level of

Problem With respect to ATM

Table 5.3.1 Chi-Square test for significant difference between banks and level of problems With respect to ATM

Bank Level of ATM related problems Total Chi- P value Low Moderate High square value

ICICI 111 97 54 262 (42.4) (37.0) (20.6)

SBI 58 110 52 220 13.921 0.001*** (26.4) (50.0) (23.6)

TOTAL 169 207 106 482

Note: The value within brackets refers to Row percentage.

Since the P value is less than 0.01, the null hypothesis is rejected at 1% level of significance. Hence there is a highly significant difference between level of problems perceived by ICICI bank’s ATM users and SBI bank’s ATM users. It is concluded that the problems perceived by SBI customers are high and ICICI customers are low with respect to ATM. So the SBI Bank should take necessary steps to redress the grievances of its e-banking customers particularly problems with respect to ATM.

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HYPOTHESIS- II

Null Hypothesis: There is no significant difference between banks and level of

Problem with respect to credit card

Table 5.3.2 Chi-Square test for significant difference between banks and level of problems with respect to credit card

Bank Level of credit card related problems Total Chi- P value square Low Moderate High value

ICICI 41 40 22 103 (39.8) (38.8) (21.4)

SBI 16 39 26 81 8.806 0.012** (19.8) (48.1) (32.1)

TOTAL 57 79 48 184

Note: The value within brackets refers to Row percentage.

Since the P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant difference between level of problems perceived by ICICI bank’s credit cardholders and SBI bank’s credit card holders. It is concluded the problems perceived by SBI credit cardholders are high and ICICI credit card holders are low. So, the SBI bank should take necessary to redress the grievances of its credit card holders quickly for high satisfaction.

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HYPOTHESIS- III

Null Hypothesis: There is no significant difference between banks and level of

Problem with respect to Debit card

Table 5.3.3 Chi-Square test for significant difference between banks and level of problems with respect to debit card

Bank Level of debit card related problems Total Chi- P value square Low Moderate High value

ICICI 115 99 48 262 (43.9) (37.8) (21.4)

SBI 41 120 59 220 34.852 0.000*** (18.6) (54.5) (26.8)

TOTAL 156 219 107 482

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance. Hence there is highly significant difference between level of problems perceived by SBI bank’s debit card holders and ICICI bank’s debit card holders. It reveals that the problems perceived by SBI debit card holders are high and ICICI debit card holders are low. Hence the SBI bank should take necessary steps to redress grievances of its debit cardholders quickly for achieving higher satisfaction of its customers.

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HYPOTHESIS- IV

Null Hypothesis: There is no significant difference between banks and level of

Problem with respect to Internet banking

Table 5.3.4 Chi-Square test for significant difference between banks and level of problems with respect to Internet banking

Bank Level of Internet banking related problems Total Chi- P value square Low Moderate High value

ICICI 23 37 13 73 (31.5) (50.7) (17.8)

SBI 12 32 13 57 1.879 0.039** (21.1) (51.6) (22.8)

TOTAL 35 69 26 130

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant difference between level of problems perceived by Internet banking users of SBI bank and ICICI bank. It is concluded that the SBI internet banking customer’s level of problem is high, whereas ICICI internet banking customer’s level of problem is low. So, the SBI should collect feedback from customers and conduct periodic reviews to redress the grievances and should take steps to redress quickly for higher customer satisfaction.

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HYPOTHESIS- V

Null Hypothesis: There is no significant difference between banks and level of

Problem with respect to Mobile banking

Table 5.3.5 Chi-Square test for significant difference between banks and level of problems with respect to Mobile banking

Bank Level of Mobile banking related problems Total Chi- P value square Low Moderate High value

ICICI 10 9 10 29 (34.5) (31.0) (34.5)

SBI 5 16 4 25 15.934 0.047** (20.0) (64.0) (16.0)

TOTAL 15 25 14 54

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant difference between level of problems perceived by SBI mobile banking customers and ICICI bank’s mobile banking customers. It reveals that the problems perceived by ICICI mobile banking customers are high and the problems of SBI mobile banking customers are low. So, the ICICI bank should take appropriate steps to redress the grievances of mobile banking customers quickly for higher satisfaction in this area.

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HYPOTHESIS- VI

Null Hypothesis: There is no significant difference between banks and level of

Problem with respect to RTGS, NEFT and ECS

Table 5.3.6 Chi-Square test for significant difference between banks and level of problems with respect to RTGS, NEFT and ECS

Bank Level of RTGS, NEFT and ECS related problems Total Chi- P value square Low Moderate High value

ICICI 10 24 13 47 (21.3) (51.1) (27.7)

SBI 11 22 15 48 0.267 0.035** (22.9) (45.8) (31.3)

TOTAL 21 46 28 95

Note: The value within brackets refers to Row percentage.

Since P value less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant difference between level of problems perceived by RTGS, NEFT and ECS users of SBI and ICICI banks. It is concluded that problems perceived by SBI customers are high and ICICI customers are low with respect to RTGS, NEFT and ECS. So, the SBI bank should take appropriate steps to redress the grievances of its customers quickly to achieve higher satisfaction.

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HYPOTHESIS- VII

Null Hypothesis: There is no significant difference between banks and level of

Problems with respect to Any Branch banking

Table 5.3.7 Chi-Square test for significant difference between banks and level of problems with respect to Any Branch banking

Bank Level of Any Branch banking related problems Total Chi- P value square Low Moderate High value

ICICI 5 8 7 20 (25.0) (40.0) (35.0)

SBI 5 13 10 28 0.398 0.020** (17.9) (46.4) (31.3)

TOTAL 10 21 17 48

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant difference between level of problems perceived by any branch banking customers of SBI and ICICI. It is concluded the ICICI bank customer’s perception on problems is high with respect to any branch banking whereas it is low in case of SBI bank. So, the ICICI bank should take necessary steps to understand the problems of its customers and should take appropriate steps to redress the grievance of its any branch banking customers quickly for higher satisfaction.

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HYPOTHESIS- VIII

Null Hypothesis: There is no significant difference between banks and level of

Problems with respect to Fraud

Table 5.3.8 Chi-Square test for significant difference between banks and level of problems with respect to Fraud

Bank Level of Fraud related problems Total Chi- P value Low Moderate High square value

ICICI 84 111 67 262 (32.1) (42.4) (25.6)

SBI 72 77 71 220 3.555 0.016** 32.7) (35.0) (32.3)

TOTAL 156 188 138 482

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant difference between level of problems perceived by SBI and ICICI customers with respect to fraud. It is concluded that SBI banks’ e-banking customer’s perception on problems related to fraud is high and the ICICI bank’s e-banking customer’s perception on problems related fraud is low. So, the SBI should educate its e-banking customer’s fraud prevention measures and keep them informed of the new malware so that they can be cautious.

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HYPOTHESIS-IX

Null Hypothesis : There is no significant association between age group and level

of Problems with respect to ATM

Table 5.3.9 Chi-Square test for association between age group and level of Problems with respect to ATM

Age Level of ATM related problems Total Chi- P value group square (years) Low Moderate High value 44 44 22 <30 (40.0) (40.0) (20.0) 110

68 81 49 30-40 (34.3) (40.9) (24.7) 198

38 59 22 40-50 (31.9) (49.6) (18.5) 119

19 23 13 4.394 0.023** >50 (34.5) (41.8) (23.6) 55

Total 169 207 106 482

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant association between age group and level of problems with respect to ATM. It reveals that age group below 30 years faced lesser problems than other age group. It is concluded that the banks should conduct a survey and identify the problems with respect to ATM, age group wise for better satisfaction.

371

HYPOTHESIS-X

Null Hypothesis : There is no significant association between age group and level

of Problem with respect to credit card

Table 5.3.10 Chi-Square test for association between age group and level of Problems with respect to credit card

Age Level of credit card related Total Chi- P value group problems square (years) value Low Moderate High 12 24 9 <30 (26.7) (53.3) (20.0) 45

33 35 25 30-40 (35.5) (37.6) (26.9) 93

11 18 13 40-50 (26.2) (42.9) (31.0) 119 4.069 0.067

1 2 1 >50 (25.0) (50.0) (25.0) 4

Total 57 79 48 184

Note: The value within brackets refers to Row percentage.

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no association between age group and level of problems perceived with respect to credit card. It is concluded that the level of problems perceived by credit card holders is moderate. The banks should identify the problems through customers’ feedback irrespective of age group and should take appropriate steps to redress the grievances.

372

HYPOTHESIS-XI

Null Hypothesis : There is no significant association between age group and level

of Problem with respect to Debit card

Table 5.3.11 Chi-Square test for association between age group and level of Problems with respect to Debit card

Age Level of Debit card related Total Chi- P value group problems square (years) value Low Moderate High 39 49 22 <30 (35.5) (44.5) (20.0) 110

55 93 50 30-40 (27.8) (47.0) (25.3) 198

40 53 26 40-50 (33.6) (44.5) (21.8) 119

22 24 9 4.763 0.025** >50 (40.0) (43.6) (16.4) 55

Total 156 219 107 482

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is an association between age group and level of problems perceived with respect to debit card. It reveals that debit card holders in the age group of 30-40 are facing high level of problems and age group below 30 is facing lesser problems. It is concluded that the banks should conduct a survey for identifying the problems faced by debit cardholders in each age group separately and should take appropriate steps to redress the grievances accordingly.

373

HYPOTHESIS-XII

Null Hypothesis : There is no significant association between age group and level

of Problem with respect to Internet banking

Table 5.3.12 Chi-Square test for association between age group and level of Problems With respect to Internet banking

Age Level of Internet banking related Total Chi- P value group problems square (years) Low Moderate High value 6 17 2 <30 (24.0) (68.0) (8.0) 25

10 22 11 30-40 (23.3) (51.2) (25.6) 43

14 21 10 40-50 (31.1) (46.7) (22.2) 45

5 9 3 4.681 0.585 >50 (29.4) (52.9) (17.6) 17

Total 35 69 26 130

Note: The value within brackets refers to Row percentage.

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no association between level of problems with reference to internet banking and age group. It is concluded that the internet banking customers in all age group are facing moderate level of problems. So the banks providing internet banking facilities should try to find out the internet banking customers perception on problems and take appropriate steps to redress the grievances for higher satisfaction in this area.

374

HYPOTHESIS-XIII

Null Hypothesis : There is no significant association between age group and level of

Problem with respect to Mobile banking

Table 5.3.13 Chi-Square test for association between age group and level of Problems with respect to Mobile banking

Age Level of Mobile banking related Chi- group problems Total square P value (years) value Low Moderate High 4 3 2 <30 (44.4) (33.3) (22.2) 9

8 16 8 30-40 (25.0) (50.0) (25.0) 32

2 4 4 40-50 (20.0) (40.0) (40.0) 10

1 2 0 3.616 0.028** >50 (33.3) (66.7) (0.0) 17

Total 15 25 14 54

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant association between age group and level of problems with respect to mobile banking. It reveals that the mobile banking customers in the age of 40-50 years are facing high level problems and the problems of mobile banking customers in the age group of below 30 years in low. It is concluded that the banks should find out the mobile banking customer’s problems on the basis of age group and redress their grievances accordingly without any delay which is necessary for achieving higher satisfaction.

375

HYPOTHESIS-XIV

Null Hypothesis : There is no significant association between age group and level

of Problem with respect to fraud

Table 5.3.14 Chi-Square test for association between age group and level of Problems Related to fraud

Age Level of fraud related problems Chi- P value group Total square (years) Low Moderate High value 37 42 31 <30 (33.6) (38.2) (28.2) 110

63 75 60 30-40 (31.8) (37.9) (30.3) 198

36 46 37 40-50 (30.3) (38.7) (31.1) 119

20 25 10 3.733 0.013** >50 (36.4) (45.5) (18.2) 55

Total 156 188 138 482

Note: The value within brackets refers to Row percentage.

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant association between age group and level of problems related to fraud. The e-banking customers in the age group of above 50 years are facing lesser fraud related problems compared to other age group and the problems of age group 30-40 is high. Therefore, it is concluded that the banks should create awareness among e-banking customers about frauds and educate fraud prevention measures giving due consideration to each age group.

376

HYPOTHESIS-XV

Null Hypothesis : There is no significant association between occupation and

level of Problem with respect to ATM

Table 5.3.15 Chi-Square test for association between occupation and level of Problems with respect to ATM

Occupation Level of ATM related Total Chi- P value problems square Low Moderate High value 22 28 8 Businessman (37.9) (48.3) (13.8) 58

30 30 15 Professional (40.0) (40.0) (20.0) 75

45 64 48 Govt. (28.7) (40.8) (30.6) 157 Employee 17.363 0.047**

47 59 23 Private (36.4) (45.7) (17.8) 129 employee 7 15 6 Retired (25.0) (53.6) (21.4) 28 person

18 11 6 Others (51.4) (31.4) (17.1) 35

Total 169 207 106 482

Note: The value within brackets refers to Row percentage

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant association between occupation and level of problems with reference to ATM. It reveals that the level of problems of Government employees in higher than businessmen, professional and other e-banking customers. So, the banks should analyse the problems from the aspect of e-banking customers in different occupational status and find solutions accordingly.

377

HYPOTHESIS-XVI

Null Hypothesis: There is no significant association between occupation and

level of Problem with respect to Credit card

Table 5.3.16 Chi-Square test for association between occupation and level of Problems with respect to credit card

Occupation Level of credit card related Total Chi- P value problems square Low Moderate High value 12 8 13 Businessman (52.2) (34.8) (13.0) 23

8 22 6 Professional (22.2) (61.1) (16.7) 36

15 28 26 Govt. (21.7) (40.6) (37.7) 69 Employee 17.755 0.023**

20 20 12 Private (38.5) (38.5) (23.1) 52 employee 2 1 1 Others (50.0) (25.0) (25.0) 4

Total 57 79 48 184

Note: The value within brackets refers to Row percentage

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant association between occupation and level problems with respect to credit card. It is concluded that the Government employees having credit cards are facing higher level of problems and the problems of businessmen is lesser. So, the banks should conduct a survey from the aspect of customers in different occupational status to find out the problems and take appropriate steps to redress the grievances quickly for higher satisfaction.

378

HYPOTHESIS-XVII

Null Hypothesis : There is no significant association between occupation and

level of Problem with respect to Debit card

Table 5.3.17 Chi-Square test for association between occupation and level of Problems with respect to debit card

Occupation Level of debit card related Total Chi- P value problems square Low Moderate High value 27 20 11 Businessman (46.6) (34.5) (19.0) 58

26 39 10 Professional (34.7) (52.0) (13.3) 75

30 73 54 Govt. (19.1) (46.5) (34.4) 157 Employee 41.009 0.000***

41 65 23 Private (31.8) (50.4) (17.8) 129 employee 13 12 3 Retired (46.4) (42.9) (10.7) 28 person

19 10 6 Others (54.3) (28.6) (17.1) 35

Total 156 219 107 482

Note: The value within brackets refers to Row percentage

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance. Hence there is a highly significant association between occupational status and level of problems with respect to debit card.

It is concluded that the government employees’ perception on problems related to debit card is high in comparison with businessmen, retired person,

379 professional and private employees. So the banks should take necessary steps to examine the problems from the aspect of occupational status and redress the grievances quickly for higher satisfaction in this area.

HYPOTHESIS-XVIII

Null Hypothesis : There is no significant association between occupation and

level of Problem with respect to Net banking

Table 5.3.18 Chi-Square test for association between occupation and level of Problems with respect to Net banking

Occupation Level of Net banking related Total Chi- P value problems square Low Moderate High value 16 23 7 Businessman (34.8) (50.0) (15.2) 46

6 16 6 Professional (21.4) (57.1) (21.4) 28

5 12 10 Govt. (18.5) (44.4) (37.0) 27 Employee 9.892 0.045**

6 14 3 Private (26.1) (60.9) (13.0) 23 employee 1 1 0 Retired (50.0) (50.0) (0.0) 2 person

1 3 0 Others (25.0) (75.0) (0.0) 4

Total 35 69 26 130

Note: The value within brackets refers to Row percentage

380

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant association between occupation and level of problems perceived by internet banking customers. The government employees availing internet banking facilities are facing more problems than other net banking users and the private employees are facing lesser problems than other net banking users. Hence, the banks should examine the problems of net banking customers from the aspect of occupational status to redress the grievances properly and gain customer’s satisfaction in this area.

381

HYPOTHESIS-XIX

Null Hypothesis : There is no significant association between occupation and

level of Problem with respect to Mobile banking

Table 5.3.19 Chi-Square test for association between occupation and level of Problems with respect to Mobile banking

Occupation Level of Mobile banking Total Chi- P value related problems square Low Moderate High value 0 0 4 Businessman (0.0) (0.0) (100.0) 4

5 7 2 Professional (35.7) (50.0) (14.3) 14

5 7 6 Govt. (27.8) (38.9) (33.3) 18 Employee 917.838 0.058

5 8 2 Private (33.3) (53.3) (13.3) 15 employee 0 2 0 Retired (0.0) (100.0) (0.0) 2 person

0 1 0 Others (0.0) (100.0) (0.0) 1

Total 15 25 14 54

Note: The value within brackets refers to Row percentage

Since P value is greater than 0.50, the null hypothesis is accepted at 5% level of significance. Hence there is no significant association between occupational status, and level of problems with respect to mobile banking. It is concluded that all mobile

382 banking customers are facing moderate level of problems except the businessman irrespective of their occupational status. So, the banks should examine the problems of mobile banking customers irrespective of their occupational status and take necessary steps to redress their grievances quickly to gain customer’s satisfaction in the competitive environment.

383

HYPOTHESIS-XX

Null Hypothesis : There is no significant association between occupation and

level of Problem with respect to RTGS, NET and ECS.

Table 5.3.20 Chi-Square test for association between occupation and level of Problems with respect to RTGS, NEFT and ECS

Occupation Level of RTGS, NEFT and ECS Total Chi- P value related problems square Low Moderate High value 10 22 14 Businessman (21.7) (47.8) (30.4) 46

5 14 4 Professional (21.7) (60.9) (17.4) 23

2 7 4 Govt. (15.4) (53.8) (30.8) 13 Employee 10.268 0.417

3 3 5 Private (27.3) (27.3) (45.5) 11 employee 1 0 0 Retired (100.0) (0.0) (0.0) 1 person

0 0 1 Others (0.0) (0.0) (100.0) 1

Total 21 46 28 95

Note: The value within brackets refers to Row percentage

Since P value is greater than 0.05, the null hypothesis is accepted at 5% level of significance. Hence there is no significant association between occupational status of RTGS, NEFT, ECS users and their level of problems. It reveals that businessmen, professionals and Government employees are facing moderate level of problems where as private employers are facing high level of problems.

384

It is concluded that majority of the RTGS, NEFT and ECS users are facing moderate level of problems. So, the banks should conduct a survey and identify the problems for the proper redressal of grievances which is necessary for higher satisfaction in this area.

HYPOTHESIS-XXI

Null Hypothesis : There is no significant association between occupation and level of Problem with respect to fraud

Table 5.3.21 Chi-Square test for association between occupation and level of Problems Related to fraud

Level of fraud related Occupation problems Total Chi- P value square Low Moderate High value 23 15 20 Businessman (39.7) (25.9) (34.5) 58

24 30 21 Professional (32.0) (40.0) (28.0) 75

39 61 57 Govt. (24.8) (38.9) (36.3) 157 Employee 19.897 0.030**

43 56 30 Private (33.3) (43.4) (23.3) 129 employee 13 13 2 Retired (46.4) (46.4) (7.1) 28 person

14 13 8 Others (40.0) (37.1) (22.9) 35

Total 156 188 138 482

Note: The value within brackets refers to Row percentage

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant association between occupational status of e- banking customers and their level of problems related to fraud. It reveals that

385 government employees’ perception on problems related to fraud is high in comparison with other e-banking customers. So the study banks should conduct a survey to understand which category of customers are facing high level of problems and create awareness among them and educate them fraud prevention measures to reduce the level of problems related fraud which will leads to higher customer confidence and satisfaction in this area of study.

5.4. Summary

In this chapter the e-banking customer’s perceptions of the various problems are analysed and their views on resolution of problems and incidents are evaluated. The problems have evaluated with respected to each e-banking product separately under eight categories such as ATM related problems, credit card related problems, debit card related problems, Internet banking related problems, Mobile banking related problems, RTGS, NEFT, ECS related problems, Any branch banking related problems and problems related fraud.

The analysis was to find out the problems perceived by the respondents in the study banks shows that if they are interested in contacting the banks for their problems related to e-banking products, it represents 66 percent interested and 34 percent were not able to contact the banks or make complaint for their problems. The reasons for the respondents for not making complaint are busy with their work and failure of previous efforts. Majority of the respondents made complaints through help line, and duration of time required to solve the problems is in a week and the number times complaints made by majority of the respondents was less than 3 times. The overall problem perceived by majority of the respondents is moderate. Further, the overall satisfaction of respondents’ problems handled or being handled in study banks is also an average level.

Hypothesis I to VIII – test was conducted to find out if there is any significant difference between SBI and ICICI bank’s e-banking customers and the level of problems perceived by them with respect to ATM, Credit card, Debit card, net banking, mobile banking, RTGS, NEFT, ECS and any branch banking. It reveals that there is a significant difference between e-banking customers of SBI and ICICI banks and their level of problems with respect to each e-banking product and problems related to fraud. It is concluded that the problems perceived by SBI’s e-banking

386 customers with respect to ATM,. Debit card, credit card, internet banking, RTGS, NEFT, ECS and fraud is high. But the problems perceived by ICICI bank’s e-banking customers with respect to mobile banking and any branch banking are high.

Hypothesis IX to XIV – test was conducted to find out if there is any significant association between age group and level of problems perceived by e-banking customers with respect to ATM, debit card, credit card, internet banking, mobile banking, and problems related fraud. It reveals that there is a significant association between age group and level of problems with respect to ATM and age group below 30- years are facing lesser problems than other age group.

There is no association between age group and level of problems perceived by credit cardholders and the level of problems perceived by all credit cardholders is moderate. It also reveals that there is an association between age group and level of problems perceived with respect to debit card and the debit card holders in the age group of 30-40 are facing high level of problems. There is no significant association between level of problems with reference to internet banking and age group. It is concluded that the internet banking customers in all age group are facing moderate level of problems. The analyses further reveals that there is a significant association between age group and level of problems with respect to mobile banking and it is concluded that the mobile banking customers in the age of 40-50 years are facing high level of problems. Further there is a significant association between age group and level of problems related to fraud. It is concluded that e-banking customers in the age group of above 50 years are facing lesser fraud related problems and the problems of age group 30-40 is high.

Hypothesis XV to XXI – test was conducted to find out if there is any association between occupational status and level of problems perceived by e-banking customers with reference to ATM, Debit card, credit card, Internet banking, Mobile banking, RTGS, NEFT, ECS and fraud. If reveals that there is a significant association between occupation and level of problems with reference to ATM and the Government employees level of problems is higher than businessmen and professionals. There is a significant association between occupation and level of problems with respect to credit card. It is concluded that Government employees are facing higher credit card related problem and the problems of businessmen is lesser.

387

It also reveals that there is a highly significant association between occupational status and levels problems with respect to debit card. It is concluded that the government employees perception on problems related to debit card is high in comparison with the problems of businessmen, retired person, professional and private employees. However, there is no significant association between occupational status and level of problems with respect to mobile banking. It is concluded that all mobile banking customers except businessmen are facing moderate level of problems. The test further reveals that there is a significant association between occupation and level of problems perceived by internet banking customers. It is concluded that the Government employees availing internet banking facilities are facing more problem than other net banking users. There is no significant association between occupational status of RTGS, NEFT, ECS users and their level of problems.

It is concluded that majority of the RTGS, NEFT and ECS users are facing moderate level of problems. The test also reveals that there is a significant association between occupational status of e-banking customers and their level of problems related to fraud. It is concluded that government employees’ perception on problems related to fraud is high in comparison with other category of e-banking customers.

388

CHAPTER VI

CUSTOMERS’ SATISFACTION TOWARDS E-BANKING PRODCUTS AND SERVICES

6.1. INTRODUCTION

Customer’s satisfaction is a major force in banking business. Ever since, the liberalization and globalization of Indian economy the focus point in any service organization is “customer service” and “customer satisfaction” more so in the banking industry. Customer service and satisfaction is the base for business expansion because of the stiff competition prevalent in the banking industry. With the advent of new private banks in 1995, the concept of customer service has become an important and pivotal issue in banks, either it is in the public sector, private sector, co-operative sector or NBFC. The service of banking business is dependent on customer service and customer satisfaction.

Satisfaction is a function of perceived performance and expectations. If the performance falls short of expectation, the customer is dissatisfied. If the performance matches the expectations, the customer is satisfied. If the performance exceeds expectations, the customer is highly satisfied or delighted. Many banks are aiming for high satisfaction because customers who are just satisfied still find it easy to switch when a better offer comes along. Those who are highly satisfied are much less ready to switch. High satisfaction or delight creates an emotional bond and the result is high customer loyalty.

A customer is the core component in the banking business. The business of banking cannot function without customers, nor is the business done by acquiring a certain number of customers. It is a continuing process of transactions culminating in a long term banker-customer relationship. Most banking institutions thrive more on keeping old customers happy rather than getting new customers. It has been found that keeping existing customers happy and satisfied in turn brings in new customers and becomes easier to market the banking products. Since almost all banks offering more or less the same products with little changes, the concept of enhancing the customer’s satisfaction has become a pivotal point to attract more and more people to banking by a particular bank.

389

Today, customers are not ready to accept delay in service and are in need of information for instant decision. Continuous improvement, gaining competitive edge, increased market shares, higher profit; none of these things is possible unless business can find a new way of enhancing the customer satisfaction. A highly satisfied customer stays loyal longer, buy more as the bank introduces to new products and services, talks favorably about the bank and its services, pay less attention to competitive products and advertising, offers product and service ideas to the bank.

Today, the relationship between the banker and customer has become under the sharp focus both at the banker’s and as well as at the customer’s ends. Many customers are not only expecting but are demanding better service. For delivery of quality service, it is imperative to have customer orientation as a culture in the bank. Customer orientation builds long term relationships resulting in customer satisfaction and cash flow to banks. Thus once good service is extended to a customer; a loyal customer will work as an Ambassador to the bank and facilitate growth of business.

This chapter is devoted to measure the satisfaction level of customers of SBI and ICICI banks towards e-banking in Thanjavur town. To assess the satisfaction level of customers, the factors like age, gender, occupation, monthly income and marital status were used. To test the significance between the above variable and satisfaction level various test were used. This chapter also analyses, if there is any association between satisfaction level and level of problems of e-banking customers. The satisfaction of the e-banking customers was assessed on the basis of parameters such as e-banking facilities and quality of service. The e-banking customers of the respective banks customers were asked to rate their bank’s e-banking services on the basis of e-banking products such as ATM – cum – Debit Card, ATM services, credit card, internet banking, mobile banking, RTGS, NEFT, Electronic Clearing Service (ECS) and any branch banking and on the basis of quality of service such as accuracy/absence of error, confidentiality, good, complaint handling, clear communication, No breakdown of machines/services, prompt to response customer request, easy connectivity, adoption of user friendly technology, connectivity with other banks, secured transaction.

390

Based on these parameters, overall satisfaction level of e-banking customers was found. The satisfaction of customer’s towards e-banking services was assessed based on five point scale given in the questionnaire and the points allotted to them are:

Excellent – 5 Very good – 4 Just satisfactory – 3

Poor – 2 Very poor – 1

391

6.2 DESCRIPTIVE ANALYSIS OF SAMPLES

Table 6.2.1

Overall level of satisfaction of E-Banking customers

Level of satisfaction Frequency Percentage

Low 101 21

Moderate 234 48.5

High 147 30.5

Total 482 100.0

Source: Primary data

The above table shows the overall satisfaction level of e-banking customers in the study banks. It reveals that 21 percent of low satisfaction, 48.5 percent of moderate and 30.5 percent of higher satisfaction. It is concluded that the satisfaction of e-banking customers is moderate. The respondents are not fully satisfied with the e- banking services provider by SBI and ICICI banks. So, the banks should take necessary steps and adopt appropriate strategy to improve their quality of services for their customers’ higher level of satisfaction.

FIG.6.2.1 OVERALL SATISFACTION OF E-BANKING CUSTOMERS

60 50 48.5 40 30.5 30 Percentage 21 20 10 0 w te h o a g L er Hi d Mo

392

Table 6.2.2

Level of satisfaction of ATM-cum-Debit card users

Bank Level of satisfaction Total

Low Moderate High 50 119 93 ICICI (19.1) (45.4) (35.5) 262

51 115 54 SBI (23.2) (52.3) (24.5) 220

Total 101 234 147 482

Source: Primary data

The above table shows the satisfaction level of SBI and ICICI bank’s ATM – cum-Debit card users. It reveals that 19.1 percent of ICICI customers have low level of satisfaction, 45.9 percent moderate level and 35.5 percent have high level of satisfaction. It also reveals that 23.2 percent of SBI customers have low level of satisfaction. 52.3 percent moderate and 24.5 percent have high level of satisfaction. It is concluded that both banks ATM – cum – Debit card users have moderate level of satisfaction but comparatively the satisfaction level of ICICI bank’s ATM – Cum – debit card users are higher than SBI. So the Banks should take immediate steps to provide more quality of ATM – cum – Debit card services for higher level of satisfaction.

393

Table 6.2.3

Level of satisfaction of credit card users

Bank Level of satisfaction Total

Low Moderate High 27 37 39 ICICI (26.2) (35.9) (37.9) 103

31 35 15 SBI (38.3) (43.2) (18.5) 81

Total 58 72 54 184

Source: Primary data

The above table shows the satisfaction level of SBI and ICICI bank’s credit cardholders. It reveals that among 103 credit cardholders of ICICI bank 26.2 percent have low level of satisfaction, 35.9 percent have moderate and 37.9 percent high level of satisfaction. Among 81 credit card holders of SBI bank 38.3 percent have low level of satisfaction, 43.2 percent moderate and 18.5 percent have high level of satisfaction. It is concluded that satisfaction level of ICICI bank’s credit cardholders are higher than SBI. So, the SBI bank should adopt appropriate strategy to improve the quality of credit card service for achieving the higher level satisfaction of their cardholders in this area of study.

394

Table 6.2.4

Level of satisfaction of Internet banking users

Bank Level of satisfaction Total

Low Moderate High 15 29 29 ICICI (20.5) (39.7) (29.7) 73

15 29 13 SBI (26.3) (50.9) (22.8) 57

Total 30 58 42 130

Source: Primary data

The above table shows the satisfaction level of internet banking users of ICICI and SBI banks. It reveals that 20.5 percent of ICICI net banking users have low level of satisfaction and 39.7 percent moderate and 29.7 percent have higher level of satisfaction. In case of SBI 26.3 percent have low level satisfaction, 50.9 percent moderate and 22.8 percent have higher level of satisfaction. It is concluded that the satisfaction level of net banking users of these two banks have moderate level of satisfaction but comparatively the satisfaction level of ICICI bank’s customers are higher than SBI. So, the banks particularly SBI should assess their customers’ needs and expectation for improving the facilities provided under net banking and should also adopt appropriate strategy to improve the quality of their net banking services for higher customer’s satisfaction.

395

Table 6.2.5

Level of satisfaction of Mobile banking users

Bank Level of satisfaction Total Low Moderate High 8 11 10 ICICI (27.6) (37.9) (34.5) 29

8 10 7 SBI (32.0) (40.0) (28.0) 25

Total 16 21 17 54

Source: Primary data

The above table shows the satisfaction level of mobile banking users of SBI and ICICI banks. Among 29 mobile banking users of ICICI bank 27.6 percent have low level of satisfaction, 37.9 have moderate level and 34.5 percent have high level of satisfaction. In case of SBI it represents 32 percent of low satisfaction, 40 percent of moderate and 28 percent of higher satisfaction. It is concluded that both SBI and ICICI bank’s mobile banking user’s satisfaction level is moderate. But comparatively the satisfaction levels of ICICI bank’s mobile banking users are higher than SBI. So, the banks should assess the needs and expectations of their mobile banking users and try to improve their quality of mobile banking services for higher satisfaction.

396

Table 6.2.6

Level of satisfaction of NEFT users

Level of satisfaction Bank Total Low Moderate High 8 11 6 ICICI (27.6) (44.0) (24.0) 25

3 10 8 SBI (14.3) (47.6) (38.1) 21

Total 11 21 14 46

Source: Primary data

The above table shows the satisfaction level of SBI and ICICI bank’s NEFT users. Among 25, ICICI NEFT users 27.6 percent represent low level of satisfaction, 44 percent moderate and 24 percent higher satisfaction. In case of SBI it represents 14.3 percent low satisfaction, 47.6 percent moderate and 38.1 percent higher satisfaction. It is concluded that both bank’s NEFT user’s satisfaction is moderate. But comparatively the satisfaction level of SBI NEFT users is higher than ICICI. However both banks should adopt correct strategy to improve their quality of NEFT services through proper assessment of the needs and expectations of their customers.

397

Table 6.2.7

Level of satisfaction of RTGS users

Bank Level of satisfaction Total

Low Moderate High 4 10 8 ICICI (18.2) (45.5) (36.4) 22

2 12 4 SBI (11.1) (66.7) (22.2) 18

Total 6 22 12 40

Source: Primary data

The above table shows the satisfaction level of RTGS users of ICICI and SBI banks. It reveals that among 22 ICICI bank’s RTGS users, 18.2 percent have low satisfaction, 45.5 percent have moderate and 36.4 percent have high satisfaction. In case of SBI, 11.1 percent have low satisfaction, 66.7 percent have moderate, and 22.2 percent have higher satisfaction with respect to RTGS facility. It is concluded that both bank’s RTGS users have moderate satisfaction. But comparatively the satisfaction levels of ICICI bank customers are higher than SBI. So, the banks particularly SBI should improve its quality of RTGS service for achieving higher satisfaction in this area of study.

398

Table 6.2.8

Level of satisfaction of ECS users

Bank Level of satisfaction Total

Low Moderate High

5 4 4 ICICI (38.5) (30.8) (30.8) 13

2 10 7 SBI (10.5) (52.6) (36.8) 19

Total 7 14 11 32

Source: Primary data

The above table shows the satisfaction level of ECS users of ICICI and SBI banks. It reveals that incase of ICICI bank’s ECS users 38.5 percent represents low satisfaction, 30.8 percent moderate, 30.8 percent represent higher satisfaction. In case of SBI, 10.5 percent represent low satisfaction, 52.6 percent moderate, 36.8 percent higher satisfaction. It is concluded that the satisfaction level of ICICI bank’s ECS users is low and comparatively SBI bank’s ECs users’ satisfaction is higher. So, the ICICI bank should find out the reason for low satisfaction of its ECS users and should improve the quality of service for achieving higher satisfaction.

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Table 6.2.9

Level of satisfaction of Any Branch banking users

Level of satisfaction Bank Total Low Moderate High

4 9 7 ICICI (20.0) (45.0) (35.0) 20

7 15 6 SBI (25.0) (53.6) (21.4) 28

Total 11 24 13 48

Source: Primary data

The above table shows the satisfaction level of any branches banking users. It reveals that 20 percent of ICICI bank customers have low satisfaction, 45 percent moderate and 35 percent have high satisfaction. In case of SBI 23 percent have low satisfaction, 53.6 percent moderate and 21.4 percent have high satisfaction.

It is concluded that the satisfaction level of ICICI bank customers with respect to any branch banking is higher than that of SBI customers. So, SBI should take immediate steps to provide more quality in any branch banking services for achieving higher level of satisfaction.

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6.3 INFERENTIAL ANALYSIS ON SAMPLES

HYPOTHESIS- I

Null Hypothesis: There is no significant difference between banks and level of satisfaction with respect to E-banking products and services

Table 6.3.1 Chi-Square test for significant difference between banks and level of satisfaction with respect to E-banking products and services

Bank Level of satisfaction Total Chi- P value square value

Low Moderate High

50 119 93 ICICI (19.1) (45.4) (35.5) 262 6.817 0.033** 51 115 54 SBI (23.2) (52.3) (24.5) 220

Total 101 234 147 482

Note: The value within brackets refers to Row percentage

Since the P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant difference between level of satisfaction of e-banking customers of SBI and ICICI banks. It is concluded that the satisfaction level of ICICI bank’s customers with respect to e-banking products and services are higher than SBI bank’s customers. So the SBI bank should collect periodic reviews from customers to understand their needs and expectations better and should adopt appropriate strategy to promote the e-banking services and improve the quality of service which is essential for gaining higher customer satisfaction in this area of study.

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HYPOTHESIS- II

Null Hypothesis: There is no significant difference between male and female

E-banking customers with respect to satisfaction level

Table 6.3.2 t-test for significant difference between male and female e-banking customers with respect to satisfaction level

Levene’s Test for t-test for Equality of Mean Equality of variances

Level of F Sig t Sig Mean Std.Error 95% satisfaction (2- Difference Differenc Confidence tailed) e Interval of the Difference Equal -0.072 variances 0.230 0.652 1.055 0.029 0.084 0.079 0.240 assumed Equal -0.075 variances 1.042 0.031 0.084 0.080 0.242 not assumed *** Correlation is significant at the 0.05 level (2-tailed)

The above table reveals that, levene’s test has a probability greater than 0.5 (F=0.230, P>0.05), it can be assumed that variances are relatively equal. Therefore we use the t-value and two-tail significance for the equal variance estimate to determine whether there is any difference exists between male and female customers with respect to satisfaction level. The two tail significance indicates that P<0.05 and therefore is significant. The null hypothesis is rejected. Hence there is a significant difference between level of satisfaction of male and female e-banking customers.

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HYPOTHESIS- III

Null Hypothesis: There is no significant difference between married and unmarried e-banking customers with respect to satisfaction level

Table 6.3.3 t-test for significant difference between married and unmarried E- banking Customers with respect to satisfaction level.

Levene’s Test t-test for Equality of Mean for Equality of variances

F Sig t Sig Mean Std.Error 95% (2- Difference Difference Confidence tailed) Interval of the Difference Equal variances 1.030 0.311 0.217 0.012 0.018 0.084 -0.147 0.184 assumed Equal variances 0.223 0.024 0.018 0.082 -0.144 0.180 not

Level of satisfaction assumed *** Correlation is significant at the 0.05 level (2-tailed)

The above table reveals that levene’s test has a greater probability (F=1.030, P>0.05) it can be assumed that variances are relatively equal. Therefore we use the t- value and two-tail significance for the equal variance estimates to determine whether there is any difference in the satisfaction level of married and unmarried e-banking customers. The two tail significance indicates that P<0.05 and therefore is significance. The null hypothesis is rejected. Hence there is a significant difference between the level of satisfaction of married and unmarried e-banking customers.

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HYPOTHESIS- IV

Null Hypothesis: There is no significant difference between age group with

respect to Satisfaction level

Table 6.3.4 ANOVA for significant difference between age group with respect to Satisfaction level

F N df Sig Sig Age Age S .D S .D Mean Mean Mean group group Factor Source Source Sum of Square Squares Squares

110 2.15 0.693 Below Between 30 years groups 2.954 3 0.985

30 to 40 years 198 2.04 0.732

1.956 0.012**

40 to 50 119 2.05 0.699 Within years Satisfaction level level Satisfaction groups 240.656 478 0.503 Above 55 2.27 0.679 50 years

243.610 481 Total 482 2.10 0.712 Total ** Correlation is significant at the 0.05 level (2-tailed

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant difference between age group with respect to satisfaction towards e-banking products and services and the satisfaction level of age group of above 50 years is high. The satisfaction level of age group 30-40 years is low.

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HYPOTHESIS- V

Null Hypothesis: There is no significant difference in satisfaction level of e- banking customers with Different educational qualification

Table 6.3.5 ANOVA for significant difference in satisfaction level of e-banking customers with Different educational qualification

Educational N Mean Sum of Mean F Sig SD Source df qualification Squares Square Factor

132 2.01 0.693 Graduate 3.076 4 0.769 Between 193 2.11 0.717 Post Graduate groups

91 2.20 0.749

Professional 1.525 0.000*** Within 240.534 477 0.504 21 1.90 0.768 groups Doctorate

Satisfaction level level Satisfaction 45 2.18 0.614 Others

Total 482 2.10 0.712 Total 243.610 481

Since P value is less than 0.01 the null hypothesis is rejected at 1% level of significance. Hence there is a significant difference in the satisfaction level of e- banking customers having different educational qualification and the satisfaction level of professional is high and the satisfaction level of customers with doctorate qualification is low.

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HYPOTHESIS- VI

Null Hypothesis: There is no significant association between occupation and

satisfaction level of e- Banking customers

Table 6.3.6 ANOVA for significant association between occupation and satisfaction level of E- Banking customers

Mean Occupation N Mean Sum of F Sig SD Source df Squar Squares Factor Factor e

Businessman 58 2.07 0.722 Between 7.151 5 1.430 groups Professional 75 2.21 0.741

Govt. 157 1.94 0.686 Employee 2.879 0.014**

Within Private 129 2.16 0.723 Employee groups 236.459 476 0.497

Satisfaction level level Satisfaction Retired 28 2.29 0.659 Person

Others 35 2.23 0.646

Total 482 2.10 0.712 Total 243.610 481

Since P value is less than 0.05, the null hypothesis is rejected at 5% level of significance. Hence there is a significant association between occupation and satisfaction level of e-banking customers and the satisfactions level of government employee are low.

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HYPOTHESIS- VII

Null Hypothesis: There is no significant association between monthly income and satisfaction level of e-Banking customers

Table 6.3.7 ANOVA for significant association between monthly income and satisfaction level of e-banking customers

Monthly N Mean Sum of Mean F Sig SD Source df income Squares Square Factor

Below Rs.15000 131 2.24 .646

Between 8.354 4 2.089 Rs.15000 to 155 2.10 .700 groups Rs.25000

Rs.25000 4.235 0.002*** 110 1.89 .758 to Rs.40000

Within Rs.40000 235.256 477 0.493 Satisfaction Satisfaction level to 54 2.06 .763 groups

Rs.60000

Above 32 2.25 .622 Rs.60000

Total 482 2.10 .712 Total 243.610 481

* * *Correlation is significant at the 0.01 level (2-tailed)

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance. Hence there is a highly significant association between monthly income and satisfaction level of e-banking customers. The satisfaction level of income group whose earning is below Rs. 15,000 is high and the satisfaction level income group Rs.25,000-40,000 is low.

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HYPOTHESIS- VIII

Null Hypothesis: There is no significant association between overall problems and satisfaction level of e-banking customers

Table 6.3.8 Chi-Square test for significant association between overall problems and satisfaction level of e-banking customers

Overall Level of satisfaction Total Chi- P value problem Low Moderate High square level value 1 72 73 Low (0.7) (49.3) (50.0) 146

42 97 54 Moderate (41.6) (41.5) (36.7) 193 86.725 0.000*** 58 65 20 High (40.6) (45.5) (14.0) 143

Total 101 234 147 482

Note: The value within brackets refers to Row percentage

Since P value is less than 0.01, the null hypothesis is rejected at 1% level of significance. Hence, there is a highly significant association between overall problems and satisfaction of e-banking customers. It reveals that the problem of e-banking customers is moderate and the satisfaction is also moderate. So the study banks should take necessary steps to redress the problems of e-banking customers quickly for higher satisfaction in the area.

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6.4 SUMMARY

In this chapter the results of the study on the basis of the analysis and tests made could be summarized as follows.

The satisfaction of e-banking customers towards e-banking services provided by SBI and ICICI banks were assessed on the basis of parameters such as e-banking facilities and quality of service, which includes accuracy, confidentiality, good complaint handling, clear communication, No breakdown of machines/services, prompt response to customers’ request, easy connectivity, adoption of user friendly technology, connectivity with other banks and secured transaction. Based on these parameters overall satisfaction level of e-banking customers was found. In identifying the satisfaction level, five point scale has been used. The five point scale is categorized into Excellent, very good, just satisfactory, poor and very poor.

The analysis of satisfaction of e-banking customers reveals that their overall satisfaction towards e-banking products and services is moderate. The respondents are not fully satisfied with the e-banking services provided by SBI and ICICI bank. So, the banks should try to understand the needs and expectations of their customers and improve their quality of service to gain higher satisfaction in the area of study.

The analysis shows that the satisfaction level of ATM – cum – Debit card users of both banks is moderate. But comparatively the satisfaction level of ICICI bank’s ATM – cum – Debit card users are higher than SBI, similarly the satisfaction level of ICICI bank’s credit card holders are higher than SBI card holders. In the same way the satisfaction level of Internet banking and mobile banking users in ICICI bank is higher than net and mobile banking users in SBI. However in case of NEFT, SBI customers’ satisfaction is higher than ICICI. SBI bank’s ECs user’s satisfaction

409 towards e-banking is higher than ICICI bank’s ECS users. The RTGS users and any branch banking users of ICICI bank have higher satisfaction than the customers of

SBI.

Hypothesis I - test was conducted to find out is any significant difference between level of satisfaction of e-banking customers in SBI and ICICI banks. It was found that there is a significant difference between level of satisfaction of e-banking customers in SBI and ICICI banks. The satisfaction levels of ICICI bank’s customers are higher than SBI bank’s customers.

Hypothesis II, test was conducted to see in there is any significant difference exist between male and female customers with respect to satisfaction level. It was found that there is significant difference between male and female respondents and their satisfaction level.

Hypothesis III, test is to see if there is any difference significant between married and unmarried respondents and their satisfaction level. It is found that there is a significant difference in the satisfaction level of married and unmarried respondents.

Hypothesis IV, test was conduct to find out whether there is any significant difference between age group and level of satisfaction. It was found that there is a significant difference in the satisfaction level of respondents in different age group and the satisfaction level of age group of above 50 years is high. The satisfaction level of age group 30-40 years is low.

Hypothesis V, test was conducted to find out if there is any significant difference in the satisfaction level of e-banking customers with different educational qualification. It was found that there is a significant difference in the satisfaction level

410 of e-banking customers with different educational qualification and the satisfaction level of professional is high and the satisfaction level of customers with doctorate qualification is low.

Hypothesis VI – test is to see if there is any association between occupation and satisfaction level. It reveals that there is a significant association between occupation and level of satisfaction and the satisfactions level of government employee is low.

Hypothesis VII – test is to see if there is any significant association between monthly income and satisfaction level. It reveals that there is a significant association between monthly income and satisfaction level and the satisfaction level of income group whose earning is below Rs. 15,000 is high and the satisfaction level income group Rs.25,000-40,000 is low.

Hypothesis VIII, test is to see if there is any association between overall problem and overall satisfaction. It reveals that there is a highly significant association between overall problems and overall satisfaction. It is concluded that the problems of e-banking customers is moderate and the satisfaction is also moderate. So the study banks should take necessary steps to redress the problems of e-banking customers quickly for achieving higher satisfaction.

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CHAPTER VII

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

In the proceeding chapters results were given. The study has utilized various methods of descriptive and inferential analysis such as chi-square test, t-test, one-way ANOVA followed by multiple response analysis for conducting the statistical analysis. In this chapter, a summary of the main findings of the study are presented. A few suggestions to banks providing electronic banking products and services and future scope for the research have also been made.

The discussion of this study is presented in seven chapters.

The first chapter outlines the frame work of the study, reviews of literature on various research work done in the related area both in India and abroad with focus on the statement of problem, scope of the study, objectives of the study, hypothesis framed, methodology adopted, sample taken up for the study, limitations of the study, and chapterization scheme.

The second chapter deals with the theoretical framework of important E- banking products namely ATM, Debit card, Credit card, Internet banking,

Mobile banking, Electronic fund transfer system, Electronic clearing service,

Real Time Gross Settlement, any branch banking and various services offered by these products to the customers. An attempt is made in this chapter to provide in a nutshell the historical development in the concept of each e- banking product, its growth and development in India, and RBI initiatives in

412 the development of e-banking products. This chapter also discusses fraud an important threat of e-banking and steps taken by RBI to avoid frauds.

Electronic banking is one of the emerging trends in the Indian banking.

The banking sector in India has introduced E-banking in a phased manner. E- banking impinges on operations of banking in a number of ways. It has enabled the banks to handle the payment electronically and interbank settlement faster and in large volumes. The major channels for distribution in the banking industry, besides branches are ATMs, Internet banking, mobile banking, card base delivery system. Availability of ATMs and plastic cards, EFT, electronic clearing services, internet banking and mobile banking to a large extent avoid customers going to branch premises and has provided wide range of services.

ATM is the widely accepted delivery channel. ATM technology is used as a means to reach out to the customers at a lower initial and transaction costs and offering hassle free services. Since its inception innovations in ATM technology have come a long way and customer receptiveness has also increased manifold. Banks across the country have started the process of setting up ATMs enabled with biometric technology to tap the potential of rural markets. Multi-lingualATMs has also entered and this technological innovation is also aimed the rural banking business believed to have large untapped potential.

Among the card based mechanisms for various banking services. Credit card and debit card have been immensely successful in India. Since their launch, penetration of these card based systems have increased manifold over

413 the past few years. Aided by expanding ATM networks and point of sale terminals, banks have also able to increase the transition of customers towards these channels, thereby reducing their costs too.

Internet banking is gaining popularity and transactions through net banking have been steadily increasing. Internet penetration is the main driving force. Mobile banking is increasingly being seen as a tool for differentiation in customer servicing by banks. To provide customers a mobile wallet is being seen as one of the top priorities for banking institutions in the near future. With the advent of smart phones and ever growing usage of internet on mobile handsets, application based banking has emerged as a new concept within this space.

The innovation in technology and communication infrastructure in recent years have improved banks in a large way through the development of payment settlement systems, which are central to the major portion of the business of banking. The continued increase in the volume of cheques added pressures on the existing setup thus necessitated a cost effective alternative system such as NEFT, RTGS and ECS. In India cash continues to be the pre- dominant mode of payment. The policy initiatives and regulatory stance of RBI has continued to focus on increasing the acceptance and penetration of safe, secure and efficient non-cash payment modes comprising credit/debit cards and transactions through ECS/RTGS/NEFT. The day is not far off when the banks would be viewed more as technology companies offering banking products and services. While bank branches would continue to function, they would reorient

414 themselves as relationship centers rather than routine banking service providers.

With the advent of technology, there is a need to further strengthen customer service in areas of net and mobile banking to enhance customer’s confidence in these technologies. With great infusion of technology in banking, the incidents of fraud in electronic banking have witnessed an increase in recent times. There is a need for building robust mechanism to prevent incidents of fraud in areas of mobile/net banking and electronic fund transfer.

The third chapter analyses the socio-economic and other variables of the e-banking customers of SBI and ICICI banks in Thanjavur town. For the purpose of this analysis, the following socio-economic variables such as sex, age, education qualification, occupation, monthly income and marital status of the e-banking customers were considered. This chapter also analyses e-banking customer’s preference for e-banking product, reason for it. Motivational factors influencing to use e-banking product, various e-banking produces used by them, number of years of utilization by the respondents were used for analysis and found results.

An application of various tests was conducted to find out if there is an association between age, occupation and the number of years of availing e- banking services. It reveals that there is an association between age group number of years of availing e-banking services and the respondents in the age group of above 40 years were availing e-banking services for more periods than

415 other age group. Further the test reveals that there is no association between occupation and number of years of availing e-banking services.

Another test exists for an association between age, occupation , monthly income and frequency of using e-banking products which shows businessman are using e-banking products more frequently than others and majority of the higher income group of respondents are using e-banking more frequently than lower income group.

The fourth chapter analyses the data pertaining to awareness and utility of e-banking services. The e-banking products that offer multiple services are only taken for analyses such as ATM cum debit card, credit card, internet banking, mobile banking and any branch banking. The services of each product have been classified. Based on the classification customers’ awareness and utilization were evaluated by using yes/no pattern, giving one point for yes response and zero for no response. Multiple response analysis has been used to analyse the customer’s awareness and utilization of e-banking services.

A test was conducted to find out whether there is any association between age, gender, educational qualification and awareness with respect to dimensions of e-banking, produces. It reveals that there is an association between SBI bank’s ATM-cum-Debit card user’s awareness with respect to convenience services, services at POS and age group. The awareness of age groups below 30 years and 30-40 years are higher than other age group. The awareness of age group of above 50 years is very low. There is a significant

416 association between age group and awareness of ICICI bank’s net banking customers towards value added services. The age groups of 30-40 years and above 40- 50 years are highly aware of value added services. There is a significant association between age group and awareness of ICICI bank’s credit card holders with respect to benefit services. The awareness of younger age group is lesser than other age group.

The test reveals that there is an association between gender and awareness of ICICI bank’s debit card holders with respect to other services of debit card. The awareness of male cardholder is higher than female. There is a significant association between gender and awareness of ICICI bank’s net banking customers with respect to convenience services and value added services of net banking. The awareness of male is higher than female with respect to convenience and value added services net banking. The test also reveals that there is an association between gender and awareness of SBI bank’s credit cardholders with respect to insurance services of credit card and the awareness of male is higher than female.

The next test shows that there is an association between educational qualification and awareness of ICICI bank’s debit card holders with respect to value added services at ATM. It reveals that the awareness of graduates is higher. The test also reveals that there is an association between educational qualification and awareness of SBI’s bank’s Internet banking customers with respect to convenience services. It shows that the awareness of graduates is higher than others. Another test shows there is an association between

417 educational qualification and awareness of ICICI bank’s credit card holders with respect to insurance services. In SBI, the awareness of credit card holder with professional qualification is higher than others with respect to convenience and benefit services of credit card.

A test was conducted to find out if there is any association between occupation, monthly income and utility of various dimensions of e-banking services offered by SBI and ICICI banks. It reveals that there is an association between occupation and utility of ICICI bank’s debit card holders with respect to services at POS and other services of debit card. It is concluded that these services are highly utilized by businessman there is an association between occupation and utilization of SBI bank’s debit card holders with respect to various dimensions of debit card services. It reveals that convenience services at ATM are highly used by government employees whereas value added services at POS and other services of debit card is highly used by businessman.

418

SBI reveals that convenience services are highly used by private employees and benefit services are highly used by professionals.

The next test was conducted to find if there is any association between monthly income and utilization of various dimensions of e-banking services provided by SBI and ICICI banks. There is an association between monthly income and utilization of SBI, ICICI bank’s debit card holders with respect to various dimensions of debit card services. In ICICI bank services at POS is highly utilized by customers whose monthly income is above Rs,25,000 and other debit card services are highly used by customers in the income group of

Rs.40000 – 60000. In SBI convenience services at ATM is highly used by income group of Rs.25000 – 40000 and the value added services by the income group whose earning is above Rs. 60000. The services listed in the category of other services are highly by customers whose monthly income is above

Rs.60000.

The test further reveals that convenience services of net banking provided by ICICI is highly utilized by customers whose income is above

Rs.60000. In SBI bank, both convenience and value added services of net banking are highly used by customers whose income is higher than Rs.60000.

The test to find association between monthly income and utilization of various dimensions of credit card services offered by SBI and ICICI banks reveals that there is an association between monthly income and utilization of ICICI bank’s credit card holders with respect to convenience services and insurance services and these services are highly used by cardholders whose income is above

419

Rs.60,000. In SBI the convenience and insurance services are highly used by cardholders whose income is above Rs.60000.

The fifth chapter analyses the e-banking customer’s perceptions of the various problems and their views on resolution of problems and incidents are evaluated. The perception of e-banking customers upon the problems experienced by them has been evaluated based on the responses got on the following five point scale: strongly agree, agree, neither agree not disagree, disagree and strongly disagree. Hundred problems stated in the questionnaire have been divided into the following eight categories and analysed separately.

(1) ATM related problems. (2) Debit card related problems (3) Credit card related problems (4) Internet banking related problems (5) Mobile banking related problems (6) RTGS, NEFT and ECS related problems (7) Any branch banking related problems and (8) frauds related problems.

This chapter discuss the respondents interest in complaining about the problems to banks, reason for not making complaint, methods of complaining, number of times complaint made to the banks, if the problems have been solved or not, if solved duration of time required to solve the problems. It shows that the majority of the e-banking customers faced moderate problems.

Further it reveals that 66 percent were interested and 34 percent were not able to contact the banks or make complaint for their problems. Customers were not able to make complaint due to the following reasons: their busy schedule of work and failure of previous efforts. It has been found that majority of the respondents made complaints through helpline and the duration of time

420 required by banks to solve the problems is a week. It was found that around

72.3 percent of e-banking customer’s problems were solved by the banks. The satisfaction of e-banking customers regarding problems handling or being handled in various banks is average.

A test was conducted to find out if there is any significant difference between SBI and ICICI e-banking customers and their level of problems with respect to ATM, credit card, Debit card, net banking, mobile banking, RTGS,

NEFT, ECS and any branch banking. It reveals that there is a significant difference between e-banking customers of SBI and ICICI banks and their level of problems with respect to each e-banking products and problems related to fraud.

Accordingly it was found that the problems perceived by ICICI bank’s e-banking customers with respect to mobile banking and any branch banking is high whereas the problems perceived by SBI bank’s e-banking customers with respect to ATM, debit card, credit card, net banking, RTGS, NEFT, ECS and fraud is high.

Another test was conducted to find out whether there is any significant association between age group and level of problems perceived by e-banking customers with respect to ATM, debit card, credit card, net banking, mobile banking and problems related to fraud. It reveals that age group below 30 years is facing lesser problems with respect to ATM. The mobile banking customers in the age of 40-50 years are facing high level problems and the age group

421 below 30 years is facing low level of problems. It also reveals that debit card holders in the age group of 30-40 years are facing high level of problems and age group below 30 years is facing lesser problems.

Next test was to find out whether there is as association between occupation and level of problems perceived by e-banking customers with respect to ATM, debit card, credit card, net banking, mobile banking, RTGS,

NEFT, ECS and problems related to fraud. It reveals that level of problems of

Government employees is higher with respect to ATM than other e-banking customers in different occupational status.

It also reveals that Government employees holding credit cards and debit cards are facing higher level of problems. As for as net banking related problems is concerned, private employees are facing lesser problems than other net banking users. Further, the Government employee’s perception on problems related to fraud is high in comparison with other e-banking customers.

The sixth chapter analyses the satisfaction level of e-banking customers of SBI and ICICI banks with respect to e-banking products and services in

Thanjavur town. The satisfaction of e-banking customers towards e-banking products and services were assessed on the basis of parameters such as e- banking facilities and quality of services which includes accuracy, confidentiality, good complaint handling, clear communication, No breakdown of machine/services. Prompt response to customer’s request, easy connectivity,

422 adoption of user friendly technology, connectivity with other banks and secured transactions. Based on these parameters, the overall satisfaction level of e-banking customers was found. In identifying the satisfaction level five point scale has been used. The five point scale is categorized in to Excellent, very good, just satisfactory, poor and very poor.

The analysis of satisfaction of e-banking customers reveals that their overall satisfaction towards e-banking is moderate. It means the respondents are not fully satisfied with e-banking services provided by SBI and ICICI banks. The analysis reveals that the satisfaction level of ATM – cum – Debit card users of both banks is moderate, but comparatively the satisfaction level of

ICICI ATM – cum debit card users is higher than SBI debit card holders – similarly the satisfaction level of ICICI bank’s credit cardholder is higher than

SBI credit card holders. The analysis further reveals that the satisfaction level of internet banking and mobile banking users of ICICI bank is higher than SBI.

However in case of NEFT, SBI customer’s satisfaction is higher than ICICI.

The SBI ECS user’s satisfaction is higher than ICICI bank’s ECS users. The analyses of satisfaction also reveal that the RTGS users and any branch banking users of ICICI bank have higher satisfaction than the customers of

SBI.

An application of chi-square was conducted to find out if there is any significant different between level of satisfaction of e-banking customers of

SBI and ICICI banks. It was found the there is a significant difference between satisfaction level of e-banking customers in SBI and ICICI banks. The

423 satisfaction level of ICICI bank’s customers is higher than SBI bank’s customers.

Various test was conducted to find out if there is any significant different exist between male and female respondents with respect to satisfaction level. It was found that there is a significant difference between male and female respondents. The test also reveals that there is a significant difference between satisfaction level of married and unmarried respondents.

Another test was conducted to find out if there is any significant difference in satisfaction level of respondents in different age group. It was found that there is a significant difference in the satisfaction level respondents in different age group and the satisfaction level of age group of above 50 years is high. The satisfaction level of age group 30-40 years is low.

The next test was conducted to find out if there is any significant difference in the satisfaction level e-banking customers with difference education qualification reveals that there is a significant difference between satisfaction level of e-banking customers and their education qualification and the satisfaction level of professional is high and the satisfaction level of customers with doctorate qualification is low. Another test was conducted to find out if there is any association between occupational status, monthly income and satisfaction. It reveals that there is a significant association between occupational status, monthly income and satisfaction. It also reveals that the satisfactions level of government employee is low and the satisfaction

424 level of income group whose earning is below Rs.15,000 is high and the satisfaction level income group Rs.25,000-40,000 is low.

An application of chi-square test was conducted for assessing if there is any association exists between overall problem and overall satisfaction. It reveals that there is an association between overall problem and overall satisfaction. The problems of e-banking customers are moderate and the satisfaction is also moderate.

Finally, the seventh chapter is a summary of major findings and conclusions are outlined briefly based on the analysis and evaluations of the study. This chapter includes valuable suggestions for improving e-banking services and also identified future scope for the future research to the researcher in Thanjavur.

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7.1 MAJOR FINDINGS

The analysis of the primary data collected from the respondents reveals the following facts and findings.

The analysis reveals that out of total 482 respondents, 78.8 percent were

male and 21.2 percent female. It is concluded that the majority of the

respondents were male. The reason for the low proportion of female e-

banking users is the lack of awareness among them.

Majority of the respondents (41.1%) using e-banking products belong to

30-40 years age group, 24.7 percent to 40 -50 years, 22.8 percent to

below 30 years and 11.4 percent belongs to above 50 years age group.

The post graduates are the largest (40%) among 482 e-banking

customers. The second largest users of e-banking products are graduates

(27.4%) followed by 18.9 percent professionals, 9.3 percent others and

4.4 percent doctorates.

The occupational status of e-banking customers reveals that 12 percent

are businessmen, 15.6 percent are professionals, 32.6 percent

Government employees, 26.8 percent private employees, 5.8 percent

retired persons, and the remaining 7.3 percent other category. It is

concluded that majority of the respondents were salaried class.

The monthly income of the respondents’ shows that 27.2 percent of e-

banking customers belong to the income group earning less than

Rs.15000, 32.2 percent to the Rs.15000 – 25000 category, 22.8 percent

represent monthly income between Rs.25000 and Rs.4000, 11.2 percent

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between Rs.40000 and Rs.60000 and 6.6 percent more than Rs.60000. It

is concluded that majority of the e-banking customer’s monthly income

is between Rs.15000 and Rs.25000. The marital status shows that 82

percent of the respondents were married and 18 percent unmarried. It is

concluded that the majority of the respondents are married.

It is evident from the analyses that 100 percent of respondents (482) are

using ATM-cum-debit card and ATM facilities. Out of 482 respondents

38.2 percent are credit card users, 27 percent net banking users, 11.2

percent mobile banking users, 9.5 percent NEFT, 8.3 percent RTGS and

10.5 percent are any branch banking users and only 6.6 percent are ECS

users. It is concluded that most of the respondents are multi-product

users. E-banking facilities such as mobile banking, NEFT, RTGS, ECS

and any branch banking are used by few respondents only. So the banks

should adopt appropriate promotional strategy to promote their e-

banking products to increase its penetration.

The analysis reveals the majority of the respondent’s preference and the

reason for preferring e-banking products shows that 34 percent prefer

for convenience, 29.7 percent for time saving, and 19.5 percent for

avoiding risk of carrying cash, 10.4 percent for easy transfer of funds

and 6.4 percent for easy global access. It is concluded that E-banking

products are preferred by them not only for convenience and to avoid

risk of carrying cash but also for saving time of doing banking

operations.

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The motivational factor which influence the selection of e-banking

products show that 34.4 percent were influenced by friends and

relatives, 27.2 percent by bank employees, 13.7 percent by

advertisement, 11.2 percent by sales executives, 8.9 percent by other

than these factors. It is concluded that majority of the respondents were

motivated by friends and relatives and bank employees.

The duration of using e-banking products reveal that 50.2 percent are

using for more than 5 years, 27.2 percent for 2-5 years, 13.7 percent for

1-2 years and 8.7 percent for less than one year. It is concluded that

majority of the respondents are using e-banking products for more than

five years. The analysis of number of times banking transactions done

through electronic channels by e-banking users reveal that majority

(41.3%) of the respondents used electronic channels 5-15 times in the

past three months, 24.7 percent 15-30 times, 15.6 percent 1-5 times, 8.3

percent 30-50 times, 5.8 percent more than 50 times and 4.4 percent of

the respondents have not used electronic channels for the past three

months. It is concluded that majority of the respondents have not used

electronic banking products frequently.

The analysis reveals that internet banking facilities are highly used by

businessmen as 35.4 percent of the internet banking users are

businessmen, 21.5 percent professional, 20.8 percent Government

employees, 17.7 percent private employees. Majority of the credit card

users are Government employees (37.5 percent) and private employees

428

(28.3%). Mobile banking facilities are highly used by Government

employees (33.3%), private employees (27.8%) and professionals

(25.9%). The RTGS (70%) NEFT (43.5) and ECS (34.4%) facilities are

highly used by businessmen.

The analysis of monthly income of internet banking users reveals that

31.5 percent belongs to income group earning between Rs.40,0 00 and

60,000, 29.2 percent to the Rs.25000 – 40000 and 23.1 percent to above

Rs.60000 income group. It is concluded that majority of the internet

banking users belong to high income group. Majority of the NEFT

(41.3%) and RTGS (55%) users belong to high income group. The

income analysis of credit cardholders shows that 42.9 percent belong to

income group of Rs.15,000 – 25,000, 35.3 percent to Rs.25,000 – 40000

and 10.3 percent represents income group of Rs.40000 – 60000. It is

concluded that majority of the credit cardholders belong to income

group earning between Rs.15, 000 and 25,000 and majority of the

mobile banking users (42.61%) belong to income group earning between

Rs.25, 000 and 40000.

The analysis of the respondents’ view on security of transaction done

through electronic channels and service level improvement reveals that

19.5 percent feel very much secure with the electronic channels, 49.6

percent somewhat secure, 9.5 percent somewhat insecure and 3.1

percent feel very much insecure with electronic channels. The analysis

also reveals that majority of the respondents (59.8 %) accepted that

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electronic channels have improved the service level. It is concluded that

majority of the respondents felt somewhat secure when they transact

through electronic channels and not very much secure. Hence, the study

banks should ensure the security of information and privacy and try to

make e-banking customers feel secure.

A test was conducted for assessing if there is an association between

age, occupation and the number of years of availing e-banking services.

It reveals that respondents in the age group of above 40 years were

availing e-banking services for more periods than other age group.

Further it reveals that there is no association between occupation and

number of years of availing e-banking services.

Another test was conducted to find out if there is an association between

age, occupation, monthly income and frequency of using e-banking

products. It reveals that businessmen are using e-banking products more

frequently than others and majority of the higher income group of

respondents are using e-banking more frequently than lower income

group.

The multiple response analysis of awareness of ATM – cum – debit card

holders with respect to convenience services reveals that majority of the

respondents in both SBI and ICICI bank are aware of convenience

services offered at ATM. Besides basic convenience services such as

balance enquiry (100%), cash withdrawal (100%), the services that are

known to majority of the debit card holders, in ICICI bank are: obtain

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statement of a/c (79.8%), deposit of cash (77.1%), Fast cash (64.9%),

cheque book request (46.2%). In SBI as well all debit card holders are

aware of basic convenience services such as balance enquiry and cash

withdrawal. Besides these services, the services that are known to

majority of SBI debit card holders are: obtain statement of a/c (92.7%)

change of PIN (88.2), fast cash (62.3%), cash deposit (45%).

The multiple response analysis of awareness of ATM – cum - debit card

holders reveals that 224 cardholders from ICICI bank and 164

cardholders from SBI bank accepted that they are aware of value added

services provided at ATM. The services that are known to majority of

the ICICI cardholders are: Fund transfer (63.4%), credit card bill

payment (75,4%), Insurance payment (50.9%), Mobile top-ups (69.6%),

card to card transfer (45.1%). The services that are known to majority of

SBI card holders are: Fund transfer (93.5%), credit card bill payment

(50.6%), Insurance payment (56%), Mobile top-ups (50%), card to card

transfer (57,1%). It is concluded that majority of cardholders from the

study banks are aware of many value added services and the services

that are known to few card holders are card to a/c transfer, educational,

holy and trust donation payment services at ATM.

The multiple response analysis of awareness of debit card holders with

respect to services available at point of sale reveals that 258 cardholders

from ICICI bank and 219 from SBI bank accepted that they are aware of

services provided at POS. Besides payment for purchases, the services

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that are known to majority of the ICICI cardholders are: SMS alert

(91.5%), Reward points (64.9%), discount (45.6%) cash withdrawal at

POS (47.9%). In case of SBI, SMS alert (94.5%), Reward points

(72.6%), Discount (35.2%), cash withdrawal at POS (28.8%).It is

concluded that in both banks the majority of the card holders are aware

of services provided at POS. The awareness of cardholders towards

certain POS services is low such as cash withdrawal at POS, and

surcharge waiver.

The analysis of e-banking customers’ awareness towards other services

of debit cards shows that 253 respondents from ICICI and 213 from SBI

accepted that they are aware of other services of debit card. The

percentage of ICICI respondents who are aware of other debit card

services is high with respect to services such as: operate multiple

accounts with single card (57.3%), online utility payment (87.4%) and

online purchases (98%). In SBI as well, services such as online utility

bill payment (97.2%), online purchase (94.8%) and operate multiple a/c

with single card (59.6%) are known to majority of the cardholder. It is

concluded that the banks should create awareness among cardholders

about services such as lost card liability cover, purchase protection and

personal accident cover offered along with debit card.

The multiple response analysis of awareness of SBI and ICICI

customers towards convenience services of Internet banking reveals that

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the percentage respondents who are aware of convenience services of

net banking is very high in both banks.

The analysis of awareness of customers towards value added services of

net banking reveals that 69 net banking users of ICICI and 55 net

banking users of SBI accepted that they are aware of value added

services. It reveals that in both banks the services that are known to

majority of net banking users are online railway ticket booking, online

air ticket booking, online shopping, income and service tax payment and

access credit details through net banking. It is concluded that the value

added services such as linking of credit card a/c and Demat a/c, online

custom duty payment through net banking are not popular among net

banking users in this area. So the study banks should take steps to

promote their value added services in this area of study for higher

penetration.

The multiple response analysis of awareness of mobile banking

customers towards information based mobile banking services reveals

that besides the basic information based services such as balance

enquiry (100%), get last 5 transaction details (100%), the services that

are known to majority of the mobile banking users in ICICI bank are:

Locate branch/ATM (96.6%), status of service request (75.9%), get

credit card details (65.5%), cheque status enquiry (62.1%) and cheque

book request (55.2%). The percentage of mobile banking users of SBI

bank who are aware of information based services of mobile banking is

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high with respect to services such as: Locate branch/ATM (92%), status

of service request (56%), get credit card details (60%), cheque status

enquiry (96%), cheque book request (68%). It is concluded that services

such as apply for bank products, stop cheque request, get details of loan

a/c and demat a/c, are not popular among mobile banking users.

The multiple response analysis of awareness of mobile banking users

towards transaction based services offered by SBI and ICICI banks

reveals that majority of mobile banking users of these two banks are

aware of transaction based services. In ICICI the percentage of

respondents aware of transaction based services are: bill payment

(73.1%), Fund transfer (73.1%) and prepaid mobile recharge (64.4%). In

SBI the percentage of respondents aware of these services are: bill

payment (73.7%), fund transfer (84.2%) and prepaid mobile recharge

(42.1%).

The multiple response analysis of the awareness of credit card holders

towards convenience services of credit card offered by SBI and ICICI

banks reveals that majority of cardholders in both banks are aware of

many convenience services. The services that lack customer’s awareness

and attention are online management of card; auto debit facility and

credit card bill payment through ECS service as these are known to few

card holders.

The analysis of awareness of credit card holders towards value added

services reveals that 87 respondents of ICICI bank and 54 respondents

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of SBI bank accepted that they are aware of value added services of

credit card. In ICICI, 93.1 percent aware of interest free credit period,

48.3 percent balance transfer facility, 35.6 percent Dial-a-draft facility

and only 25.3 percent aware of personal loan on card service. In SBI,

94.4 percent aware of interest free credit period, 40.7 percent dial-a-draft

facility, 27.4 percent balance transfer and only 13 percent aware of

personal loan on card facility. It is concluded that the awareness of

cardholders towards value added services of credit card is low. So the

banks should take appropriate steps to promote value added services of

credit card in this area of study.

The multiple response analysis of awareness of credit card holders

towards benefit services reveals that 102 cardholders of ICICI bank and

79 cardholders of SBI bank accepted that they are aware of benefit

services of credit card. In ICICI, the services that are known to majority

of cardholder are: Add on card (95.1%), Revolving credit facility

(64.7%), Reward points (73.5%), Limited lost card liability (54.9%),

and temporary credit limit (50%). In SBI, the services known to

majority of card holders are: Add on card (81%), revolving credit

(64.6%), and reward points (88.6%). It is concluded that comparatively

ICICI bank’s credit card holder’s awareness towards benefit services are

higher than SBI as the percentage of respondents aware of other benefit

services such as temporary credit limit, permanent credit limit, self -

set/monthly preset limit, limited lost card liability cover and fuel

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surcharge waiver is lesser than ICICI. So, the SBI should take steps to

create awareness about these benefit services.

The analysis of awareness towards insurance services of credit card

offered by SBI and ICICI banks reveals that 71 cardholders of ICICI and

only 57 cardholders of SBI have accepted that they are aware of

insurance service of credit card. It is concluded that in both banks the

number cardholders who are aware of insurance services is less and

majority of them are aware of credit shield cover, life insurance on

cardholder and purchase protection service. So, the study banks should

take necessary steps to increase the cardholder’s awareness towards

insurance services of credit card.

A test was conducted to find out whether there is any association

between age and awareness with respect to dimensions of e-banking

products. It reveals that there is an association between SBI bank’s debit

card holder’s awareness with respect to convenience services, services at

POS and age group. It is concluded that the awareness of age group

below 30 years and 30-40 years is higher than other age group. The

awareness of age group of above 50 years is very low. There is a

significant association between age group and awareness of ICICI

bank’s net banking customers towards value added services. The age

group of 30-40 years and 40-50 years is highly aware of value added

services of net banking. It reveals that there is a significant association

between age group and awareness of ICICI bank’s credit card holders

436

with respect to benefit services. It is concluded that the awareness of

younger age group is lesser than other age group.

A test was conducted to find out, whether there is an association

between gender and awareness with respect to dimensions of e-banking

services. It reveals that there is an association between gender and

awareness of ICICI bank’s debit card holders with respect to other

services of debit card. The awareness of male cardholder is higher than

female. There is a significant association between gender and awareness

of ICIC bank’s net banking customers with respect to convenience

services and value added services of net banking. The awareness of male

is higher than female with respect to convenience services and value

added services of net banking. The test also reveals that there is an

association between gender and awareness of SBI bank’s credit card

holders with respect to insurance services of credit card and it is

concluded that the awareness of male is higher than female.

A test was conducted to find out if there is any significant association

between educational qualification and awareness of e-banking

customers with respect dimensions of e-banking services. It shows that

there is an association between educational qualification and awareness

of ICICI bank’s debit card holders with respect to value added services

at ATM. It is concluded that the awareness of graduates is higher than

others with respect to value added services. The test also reveals that

there is an association between educational qualification and awareness

437

of SBI bank’s Internet banking customers with respect to convenience

services. It shows that the awareness of graduates is higher than others

with respect to convenience services of net banking. There is an

association between educational qualification and awareness of ICICI

bank’s credit card holders with respect to insurance services. In SBI the

awareness of credit holders with professional qualification is higher than

others with respect to convenience and benefit services of credit card.

The multiple response analysis of utilization of ATM – cum – debit card

holders with respect to convenience services at ATM reveals that 100

percent of the debit card holders use ATM to withdraw cash and for

balance enquiry. Other than cash withdrawal, the services that are highly

used by ICICI debit card holders at ATM are: obtain statement of a/c

(75.2%), change of PIN (71.8%) and shared ATM (86.3%). In SBI,

highly used services are: obtain statement of a/c (92.3%), change of PIN

(62.7%) and shared ATM (77.3%). It is concluded that services such as

cash deposit through debit card and cheque book request services are not

used by many cardholders. Hence the banks should take steps to

encourage customers to use more and more convenience services.

The multiple response analysis of utilization with respect to value added

services at ATM reveals that only 138 debit card holders of ICICI bank

and 83 debit card holders of SBI have accepted that they utilize value

added services at ATM. Among them, the services that are highly

utilized by ICICI customers are: Fund transfer (49.3%), credit card bill

438

payment (40.6%) and mobile top-ups (40.6%). Similarly, the services

highly used by SBI card holders at ATM are: Fund transfer (56.6%),

credit card bill payment (43.4%) and mobile top-ups (24.1%). It is

concluded that the percentage of debit cardholders using value added

services is very low. So the study banks should take necessary steps to

encourage customers to use more and more value added services at

ATM through appropriate promotional strategy.

The analysis of debit card holders’ usage with respect to services at POS

reveals that 214 card holders of ICICI bank and 197 card holders of SBI

use debit cards at point of sale. The services that are highly utilized by

ICICI card holders at POS are: SMS alert (83.2%), reward points

(23.4%). As for as SBI cardholders is concerned, SMS alert (77.7%) and

reward points (51.3%) services are highly used by them. It is concluded

that the services such as discount, surcharge waiver and cash withdrawal

at POS are not all used by many cardholders.

The analysis of utilization with respect to other services of debit card

reveals that 199 cardholders of ICICI bank and 139 card holders of SBI

have accepted that they use these services. The services that are highly

used by these cardholders are online utility bill payment (86.9%) in case

of ICICI and (86.3%) in case of SBI and online purchase. Besides these

services, lost card liability cover, purchase protection and personal

accident cover are not used by majority of the debit card holders.

439

The analysis of utilization with respect to convenience services of net

banking reveals that 100 percent of net banking users utilize net banking

for accessing account information. The services that are highly used by

ICICI bank net banking users are bill payment and presentment

(76.7%), Bank statement by email (69.9%) inter branch, fund transfer

(own a/c), (71.2%) and fund transfer to third party a/c (91.8%) and

cheque status enquiry (54.8%).In SBI, net banking customers mainly

utilize services such as bill payment and presentment (73.7%), bank

statement by email (84.2%), inter branch fund transfer to own a/c

(82.5%), inter branch fund transfer to third party a/c (94.7%) transfer to

any bank a/c (64.9%).

The analysis of utilization with respect to value added services of net

banking reveals that 64 net banking users of ICICI bank and 55 net

banking users of SBI have accepted that they are utilizing value added

services. The main services utilized by Internet banking customers of

both banks are online railway ticket booking and online shopping. Other

services in the category of value added services are not used by many

internet banking customers.

The analysis of utilization with respect to information based mobile

banking services reveals that majority of the mobile banking customers

(100%) of both banks are using mobile banking for balance enquiry and

to get last 5 transaction details. Services such as , cheques status

enquiry, get credit card details, locate branch/ATM, status of service

440

request services are utilized by reasonable number of mobile banking

users.

The analysis of utilization with respect to transaction based mobile

banking services reveals that 15 mobile banking users of ICICI bank and

10 mobile banking users of SBI have accepted that they are utilizing

transaction based services. Among them, 66.7 percent of ICICI bank

users and 70 percent of SBI bank users bill payment services. Fund

transfer through mobile is utilized by 60 percent of ICICI users and 60

percent of SBI mobile banking users. Still the number of users of

transaction based services is low. So, the study banks should take

necessary steps to increase the usage of transaction based services by

customers.

The analysis of utilization with respect to convenience services of credit

card reveals that besides usage of credit card for purchases, credit card

holders of SBI and ICICI banks are using it mainly for cash withdrawal,

online railway ticket booking. The SMS facility is used by 78.6 percent

of ICICI cardholders and 87.7 percent of SBI cardholders. The main

payment options used by cardholders are cash/cheque/draft and drop

boxes. 54.4 percent of ICICI cardholders and 44.4 percent of SBI

cardholders use ATM for credit card bill payment. Payment through

ECS and auto debit facility is not at all used by many card holders. This

may be due to lack of awareness.

441

The multiple response analysis of utilization with respect to value added

services of credit card reveals that 83 credit card holders of ICICI bank

and 52 credit card holders of SBI have accepted that they are utilizing

value added services. Among various services the only service that is

used by majority of them is interest free credit period. Other value added

services such as balance transfer facility, dial-a-draft facility and

personal loan on card are not used by many cardholders. This is mainly

due to lack of awareness among cardholders. So the banks should take

necessary steps to create awareness and encourage customers to use

these benefit services.

The multiple response analysis of utilization with respect to benefit

services of credit card reveals that 96 card holders of ICICI and 67 card

holders of SBI have accepted that they are aware of benefit services of

credit card. The services that are highly used by ICICI card holders are:

add on card facility (61.5%), Revolving credit facility (58.3%), Reward

points (39.6%), permanent credit limit enhancement (31.3%).. The

services that are highly used by SBI credit and holders are : Add on card

(56.7%) revolving credit facility (70.1%), reward point (67.2%).Other

benefit services such as temporary credit limit, self-set /monthly preset

credit limit, limited cost card liability are not highly used by credit card

holders of both banks. But comparatively the utilization of benefit

services by ICICI card holder is higher than SBI.

442

The multiple response analysis of utilization with respect to insurance

services of credit card reveals that 69 cardholders of ICICI bank and 42

cardholders of SBI are using Insurance services. Among the various

insurance services offered by banks credit shield cover is highly utilized

`by majority of the card holders. Another insurance service that is used

by reasonable number of card holders is life insurance on card. It is 44.9

percent in case of ICICI and 33.3 percent in case of SBI.

The analysis of utilization with respect to any branch banking reveals

that the utilization level of ICICI customers is higher than SBI

customers as the percentage of users of various services provided

through any branch banking in ICICI bank is higher than SBI. This is

mainly due lack of awareness among SBI customers. Hence the SBI

should take necessary steps to create awareness among customers about

any branch banking services.

A test was conducted for assessing if there is way significant association

between occupation and utilization of various dimensions of e-banking

services. It reveals that there is a highly significant association between

occupation and utilization with respect to services at POS and other

services of debit cards. The services provided at POS and services under

the head ‘other services’ are highly used by businessman. There is a

significant association between occupation and utilization of SBI debit

card holders with respect to various dimensions of debit card service. In

SBI, the convenience services at ATM are highly used by Government

443

employees and the value added services at ATM, POS services and

other services of debit card are highly used by businessmen. The

analysis also reveals that there is a significant association between

occupation and utilization of net banking users of SBI and ICICI bank.

The convenience and value added services, provided by these banks

through net banking is highly used by businessmen. There is no

significant association between occupation and utilization of various

dimensions of mobile banking services. But there is a significant

association between occupation and utilization of ICICI bank’s credit

cardholders with respect to convenience services and these convenience

services are highly used by businessmen. In SBI, convenience services

of credit card are highly used by private employees and benefit services

are highly used by professionals and business.

A test was conducted to find if there is any association between monthly income and utilization with respect to various dimensions of e- banking services. It reveals that there is an association between monthly income and utilization of ICICI bank’s debit card holders with respect to value added services, services at POS and other services of debit card. The services at POS are highly used by income group whose earnings are above

Rs.25000 and other debit card services are highly used by income group of

Rs.40000 – 60000.

There is a significant association between monthly income and utilization of SBI bank’s debit card holders with respect to various

444 dimensions of debit card services. In SBI, the convenience services of debit card are highly used by income group Rs.25000 – 40000. Value added services are highly used by income group above Rs 60000 and the services at POS are highly used by customers whose income is above Rs.40000. The services that are listed in the category ‘other services’ are highly utilized by customers whose income as above Rs.60000. The analysis of association between monthly income and utilization of ICICI bank’s net banking users with respect to various dimensions of net banking services reveals that there is a significant association between monthly income and utilization of convenience services of net banking. The convenience services of net banking are highly used by income group whose earning is above Rs.60,

000. In case of SBI there is a significant association between monthly income and utilization with respect to dimensions of net banking services and the utilization of income group whose earning is above Rs.60, 000 is higher than other income group. There is a significant association between monthly income and utilization of ICICI bank credit card holders’ with respect to convenience services and insurance services. These services are highly used by the income group whose earning is above Rs.60,000. In case of SBI, the convenience services and insurance services of credit card is highly used by cardholders whose monthly income is above Rs.60,000.

The analysis to find out the problems perceived by the respondents in

SBI and ICICI banks shows that if they are interested in contacting the

banks for their problems related to e-banking, it represents 66 percent

445

interested and 34 percent were not able to make complaint to banks for

their problems. It is concluded that majority of the respondents are

interested in making complaint about their problems to the banks.

The respondents’ reasons for not making complaints to the banks reveal

that 39.7 percent were busy with their work, 26.2, percent felt that their

previous efforts failed, 19.5 percent felt that their problems may be

rectified automatically by banks and 14.6 percent had other reasons such

as customer service centers always busy, unaware of proper channel for

complaint making and fear of tedious procedures involved. It reveals

that majority of the respondents were busy with their work and the

failure of previous effort had an impact on them. It is concluded that the

study banks should take necessary steps to keep the customer aware of

the proper channels to make complaints, simplify the grievance handling

methods and to easily communicate in their local language effectively

for solving problems quickly.

An analysis was conducted to find out the methods of complaining by

respondents’ shows that 56 percent complain through helpline, 25.8

percent through internet, and only 18.2, percent through other modes

such as e-mail, SMS and by directly meeting the bank officials. It

reveals that the majority of the respondent gave complaints through

helpline. It is concluded that the banks should provide more helpline

services for handling problems quickly.

446

The number of times complaints made by respondents to banks

represent that 63.4 percent approached less than 3 times, 20.4 percent 3

to 6 times and 14.2 percent more than 6 times. It is concluded that

majority of the respondents have given complaints less than 3 times.

An analysis was conducted to find out whether the problems of credit

card holders were solved by banks or not. It reveals that 72.3 percent of

problems were solved by the banks and 27.7 percent of respondents’

problems were not solved by the banks. It is concluded the banks should

take steps to solve all the problems for e-banking customers for better

satisfaction.

The duration of time taken or required for the banks to solve the

problems of e-banking customers reveals that 61.7 percent of the

problems were solved with a week. More than a week was required to

solve 28.7 percent of problems, 9.6 percent of problems were solved

within a day. It is concluded that the majority of e-banking customer’s

problems were solved in a week. The banks should take necessary steps

to solve the problems quickly for better satisfaction.

The overall level of problems perceived by the respondents in this area

reveals that 40 percent of respondents’ problems were moderate, 29.7

percent high and 30.3 percent were low. It is concluded that the majority

of e-banking customers faced moderate problems in the study area.

The analysis was conducted to find out the overall satisfaction of e-

banking customers with respect of problems handled or being handled

447

by study banks shows that 37.8 percent of the respondents were

satisfied, 25.3 percent dissatisfied, 13.5 percent neither satisfied not

dissatisfied, 14.1percent were highly satisfied and 9.3 percent highly

dissatisfied. It is concluded that the overall satisfaction of respondents

toward problem handling is average, the study banks should take

necessary steps to examine and find an alternative way of grievance

redressal method for better satisfaction.

A test was conducted to find out if there is any significant difference

between SBI and ICICI bank’s e-banking customers and their level of

problems with respect to ATM, credit card, and debit card, net banking,

mobile banking, RTGS, NEFT, ECS and any branch banking. It reveals

that there is a significant difference between e-banking customers of SBI

and ICICI bank and their level of problems with respect to each e-

banking product and problems related fraud. It is concluded that the

problems perceived by SBI bank’s e-banking customers with respect to

ATM, debit card, credit card, internet banking, RTGS, NEFT , ECS and

fraud is high. The problems perceived by ICICI bank’s e-banking

customers with respect to mobile banking and any branch banking are

high. A test was conducted to find out if there is any significant

association between age group and level of problems perceived by e-

banking customers with respect to ATM, debit card, credit card, net

banking, mobile banking and problems related fraud. It reveals that there

is an association between age group and level of problems with respect

448

of ATM. The age groups below 30 years are facing lesser problems than

other age group. There is an association between age group and level of

problems with respect to debit card. It reveals that debit card holders in

the age group of 30-40 years are facing high level of problems. There is

an association between age group and level of problems with respect to

mobile banking. It reveals that mobile banking customers in the age of

40-50 years are facing high level of problems and the age group of

below 30 years is facing low level of problems. There is also an

association between age group and level of problems related to fraud. It

reveals that e-banking customers in the age group of above 50 years are

facing lesser fraud related problems compared to other age group.

A test was conducted to find out if there is an association between

occupation and level of problems perceived by e-banking customers

with respect to ATM, debit card, credit card, net banking, mobile

banking, RTGS, NEFT, ECS and problems relate to fraud. It reveals that

there is an association between occupation and level of problems with

respect to ATM and the level of problems of Government employees are

higher than businessmen, professionals and other e-banking customers.

There is an association between occupation and level of problems with

respect to credit card and the Government employees having credit cards

are facing higher level of problems and the problems of businessmen is

less. The test also reveals that there is an association between occupation

and level of problems of debit card holders and the Government

449

employees’ perception on problems related to debit card is high. As for

as, net banking is concerned private employees are facing lesser

problems than other net banking users. There is a significant association

between occupational status of e-banking customers and their level of

problems related to fraud. It reveals that Government employees’

perception on problems related to fraud is higher in comparison with

other e-banking customers.

An analysis was conducted to find out the overall satisfaction of e-

banking customers. It reveals that 21 percent have low level of

satisfaction, 48.5 percent have moderate satisfaction and 30.5 percent

have higher satisfaction. It is concluded that the satisfaction of e-

banking customers is moderate. It means that the respondents are not

fully satisfied with the e-banking services provided by SBI and ICICI

banks. So, the banks should to be necessary steps and adopt appropriate

strategy to improve their quality of services for their customers’ higher

level of satisfaction.

The analysis of satisfaction level of SBI and ICICI bank’s ATM – cum –

Debit card users reveals that 19.1 percent of ICICI customers have low

level of satisfaction, 45.4 percent moderate level and 35.5 percent have

higher level of satisfaction. In SBI, 23.2 percent have low level of

satisfaction, 52.3 percent moderate, and 24.5 percent have high level of

satisfaction. It is concluded that both bank’s ATM – cum debit card

450

holders satisfaction is moderate, but comparatively the satisfaction level

of ICICI bank’s ATM-cum-debit card users are higher than SBI.

The analysis of satisfaction level of SBI and ICICI bank’s credit card

holders reveals that 26.2 percent of ICICI credit card holders have low

level of satisfaction, 35.9 percent moderate and 37.9 percent high level

of satisfaction. In case of SBI, 38.3 percent have low level of

satisfaction, 43.2 percent moderate and 18.5 percent high level of

satisfaction. It is concluded that the satisfaction level of ICICI bank’s

credit card holders is higher than SBI.

The analysis of satisfaction level of internet banking users of ICICI and

SBI banks reveals that 20.5 percent of ICICI net banking users have low

level of satisfaction, 39.7 percent moderate, and 29.7 percent have

higher level of satisfaction. In case of SBI, 26.3 percent have low

satisfaction, 50.9 percent moderate and 22.8 percent have higher level of

satisfaction. It is concluded that the satisfaction level of ICICI bank’s

net banking users is higher than SBI. So the SBI should assess their

customer’s needs and expectations for improving the facilities provided

under net banking and should adopt appropriate strategy to improve the

quality of their net banking services for height customer satisfaction.

An analysis was conducted to assess the satisfaction level of mobile

banking users’ of SBI and ICICI banks. It reveals that 27.6 percent of

ICICI bank’s mobile banking users have low level of satisfaction, 37.9

percent have moderate level and 34.5 percent have high level of

451

satisfaction. In case of SBI it represent 32 percent low satisfaction, 40

percent moderate, 28 percent higher satisfaction. It is concluded that the

satisfaction level of ICICI bank’s mobile banking users is higher than

SBI.

The analysis of satisfaction level of SBI and ICICI bank’s NEFT users

reveals that 27.6 percent of ICICI NEFT users have low satisfaction, 44

percent moderate and 24 percent higher satisfaction. In case of SBI, it

represents 14.3 percent low satisfaction, 47.6 percent moderate and 38.1

percent higher satisfaction. It is concluded that the satisfaction level of

SBI NEFT users is higher than ICICI.

An analysis was conducted to assess the satisfaction level of RTGS

users of SBI and ICICI banks. It reveals that 18.2 percent of ICICI

bank’s RTGS users have low satisfaction, 45.5 percent have moderate

and 36.4 percent have high satisfaction. In case of SBI, 11.1 percent

have low satisfaction, 66.7 percent have moderate, and 33.3 percent

have higher satisfaction. It is concluded that the satisfaction level of

ICICI bank’s RTGS users is higher than SBI.

The analysis of satisfaction level of ECS users reveals that 38.5 percent

of ICICI bank’s ECS users have low satisfaction, 30.8 percent moderate

and 30.8 percent have higher satisfaction. In case of SBI, 10.5 percent

represents low satisfaction and 52.6 percent moderate, and 36.8 percent

represents higher satisfaction. It is concluded that the satisfaction level

of SBI bank’s ECS users is higher than ICICI bank’s ECS users.

452

The analysis of satisfaction level of any branch banking users reveals

that 20 percent of ICICI bank’s customers have low satisfaction, 45

percent moderate and 35 percent have higher satisfaction. In SBI, 25

percent of any branch banking users have low satisfaction, 53.6 percent

moderate and 21.4 percent have higher satisfaction. It is concluded that

the satisfaction level of ICICI bank’s any branch banking users is higher

than SBI. So the SBI bank should take immediate steps and adopt right

strategy to provide more quality services for achieving higher level of

customer satisfaction.

A test was conducted to find out if there is any significant difference

between level of satisfaction of e-banking customers in SBI and ICICI

banks. It reveals that there is a significant difference between

satisfaction level of SBI and ICICI bank’s e-banking customers and the

satisfaction level of ICICI bank’s e-banking customers is higher than

SBI. So the SBI bank should collect periodic reviews from customers to

understand their needs and expectations better and should adopt

appropriate strategy to promote e-banking services and improve the

quality of services which is essential for gaining higher customer

satisfaction.

A test was conducted to find out if there is an association between

overall problems and overall satisfaction of e-banking customers. It

reveals that there is an association between overall problem and overall

satisfaction. The problems of e-banking customers are moderate and the

453

satisfaction is also moderate. So, the study banks should take necessary

steps to redress the problems of e-banking customers quickly for higher

satisfaction in this area.

A test was conducted to find out if there is any significant difference

between male and female respondents with respect to satisfaction level.

It was found that there is a significant difference between male and

female respondents and their satisfaction level. Another test was

conducted to find out if there is any significant difference between

married and unmarried respondents and their satisfaction level and it

was found that there exist difference between married and unmarried

respondents and their satisfaction level.

A test was conducted to find out if there is any significant difference

between age group and satisfaction level. It was found that there is a

significant difference in the satisfaction level of respondents in different

age group and the satisfaction level of age group of above 50 years is

high and the satisfaction level of age group 30-40 years is low.

A test was conducted to assess if there is any significant difference

between satisfaction levels of e-banking customers with different

educational qualification. It reveals that the satisfaction level of

professionals is high and the satisfaction level of customers with

doctorate qualification is low.

A test was conducted to assess if there is any association between

occupation, monthly income and satisfaction level. It reveals that the

454 satisfaction level of Government employee is low and the satisfaction of retired person is high. It also reveals that the satisfaction of the income group whose earning is below Rs.15000 is high and the satisfaction level of income group Rs.25000 – 40000 is low.

455

7.2 SUGGESTIONS

The following are the important suggestions made by the researcher to the banks particularly SBI and ICICI banks providing e-banking products and services for improving their services and satisfaction of customers in Thanjavur town.

E-Banking is gaining momentum and the customers now prefer to avail

e-banking services. Among the various e-banking products, ATM is the

widely accepted and used facility of e-banking. Similarly the credit card

and debit card services have been widely welcomed by the people which

is evident from the phenomenal increase in the number of cardholders in

the country. But the number of users of other e-banking products such as

net banking, mobile banking, RTGS, NEFT and ECS are minimum. This

may be due to lack of awareness among the customers about e-banking

products and services and also the various facilities available within

each product. Therefore it is suggested that the banks should conduct

separate awareness campaign with regard to e-banking.

To promote e-banking services it is of paramount importance that the

banks must ensure quality in customer services. Quality in service and

satisfaction of customers are the key words which must be given sternest

attention to promote a product.

Customer relationship is one of the important aspects the banks need to

be given par importance. Addressing individual customer needs is one

crucial aspect to be considered, as the customer would find himself as a

456

part of the organization. This would build good relationship between the

bank and the customer.

The bank has to ensure that the employees are properly trained, so that

they provide individualized attention to customers to make e-banking

services more customers friendly and they should also make effort that

customers feel safe and secure with their e-banking transactions with the

bank.

Banks should encourage formation of user communities to get feedback

on the banks and also enhance the efficiency of their e-banking

products.

Banks should embrace the use of social media as a source of banking

information.

Banks should encourage customers to use electronic channels whenever

possible by using price incentives .

Customers expressed displeasure at the low density of ATMs. More

centers should be placed in important places such as Railway Station,

Terminals, petrol banks, Hospitals, Schools, Colleges and which are

easily accessible and convenient for customers.

Customers complained that while carrying out transactions at the ATM,

sometime the account is debited but cash not dispensed. This creates

dissatisfaction among customers. The banks should take steps to avoid

these defaults.

457

There was no definite grievance redressal mechanism in place with the

customer being out of funds for the time take by the banks to resolve the

complaint. Therefore there should be a zero liability clause whereby

immediately on being informed of an ATM failing to deliver cash, the

funds of the customers should be immediately restored.

Customers felt that a camera or some other equipment evidencing cash

should be attached and once complaint is made it should be possible to

authorize restoration of funds online.

As recommended by various committees, every ATM should be

provided with unique ID so that a mere reference to the same would

hasten redressal of the customer grievances.

Many respondents complained that the physical security of ATM and

the safety situation in and around ATM is not sufficient. Therefore as

per the RBI request every bank should install remote monitoring device

that would automatically alert police about ATM tampering and the RBI

should made it mandatory.

The banks must take steps to update the knowledge and awareness of e-

banking customers on recent changes in the terms and conditions and

usage and also about additional benefits and services made available on

e- channel usage from time to time.

Majority of the cardholders in India are ignorant about the basic

information on card usage including the interest rate, charges on

outstanding balance and thus actually pay interest higher than what they

458

believe they are paying. This should be rectified by giving awareness to

the card holders.

Majority of the cardholders are not aware of the extent of over the limit

or overdraft permitted to them. For a marginal excess over the limit, the

charges usually was more than the actual excess. There should be a

customer choice for operation of this facility.

There are certain hidden charges and basis of applying interest is not

made known to customer, which implies that there is a lack of integrity

in communication.

The credit card issuing banks should reasonably reduce their interest,

finance charges and penalty which will reduce their cardholder’s

dissatisfaction. The higher rate of interest nearly 36 percent claimed for

the loan through credit card is abnormal. The claim of such abnormal

rate of interest on loan should be reduced and equated to bank rate of

interest in ordinary transaction.

Many respondents complained that the issuers of card do not send credit

card statements in time but they immediately close the account and

terminate their service, as cardholders will get shock when suddenly

huge amount are billed and fines are levied upon his account for non-

payment of dues due to non-availability of accounts. They do not send

account statement, and then charge fine as well as late fee when

customers fail to pay. These major problems experienced by the

respondents should be considered by issuers of card who should take

459

steps for their customer friendly approach of sale and satisfaction of

cardholders.

Most of the card holders send their cheque for payment but

unfortunately due to their busy routine schedules commit errors. But the

issuers inadvertently imposes penalty for such cardholders without any

intimation. They are also charging late payment fee for a short payment

of few paise. This will discharge usage and increase their dissatisfaction.

Sending unsolicited credit card applications and receiving calls about

payment outstanding even after payment are the two important issues

which irritate the cardholders and created displeasure among them.

Customers are finding it difficult to block or cancel a credit card. While

it is the easiest thing to get a card, sometimes even without asking for

them, but returning them seem to be a daunting task. The banks should

clearly state the procedure and also simplify the procedure of closure

and blocking of card.

Customers should be able to send SMS to block the card if he observes

misuse.

Customer education should receive top priority and cover the entire

gamut of credit card operations. Illustrative examples should be used.

Call centre employees should be suitably trained.

Banks were not restoring funds debited to their accounts by cloned cards

from distant places. In a card present scenario such distant transactions

if not authorized by the customers should be immediately reversed.

460

There was no definite grievance redressal process to address complaints

in the nature of identity theft. While technological banking aspects like

net banking was convenient to customers and cost effective to the banks,

there should be total secure protection afforded to the customers against

any losses suffered on account of such banking.

Normally banks restrict the amount that can be transferred online by

way of a day cap or by way of ceiling amount per transfer. It is

suggested that additional factor of authentication should be taken and

higher amount should also be permitted for online transfer.

Additional authentication method should be introduced to authenticate

online usage of card or card not present transaction.

The minimum limit fixed for RTGS should be reduced for Rs.1 lakh

which will bring more people to the electronic fund transfer system.

E-cardholders experienced lack of proper security of online transactions.

Even though issuing banks have step up SET system to prevent

unauthorized access to cardholders’ particulars, it is not completely fool

proof and secure. Every bank should switch over to the use of chip

based card.

The banks can provide service to ATM card holders with the help of

newly devised authentication system that keeps them informed of the

transaction before hand over their mobile phone. SMS alert on card

usage should be sent allowing the customer reply back in case of card is

not used.

461

SMS alert for every transaction irrespective of the size of the transaction

should be made mandatory.

In every bank two-way authentication for internet banking and debit

card transactions at POS should be introduced. This will provide an

additional layer of security. In ICICI bank and additional factor of

authentication for net banking is a grid. But it should not be printed on

the back of the card but should be given separately so that a photocopy

of the card does not give away all the information required to make

online payment.

Those who frequently use the mobile banking services usually do not

conduct much of financial transactions but find it very useful for

information based transactions mainly checking account details. It is

believed that ensuring security of mobile banking and familiarizing

customers with how to use the service will definitely increase the rate of

using mobile banking services.

Customers normally not aware of the time frame for redressal of

grievance. The banks should display on the notice board the time frame

for redressal of different types of grievances.

To bring more customers in to the electronic way of transactions, banks

should introduce biometric cards and biometric ATMs in Thanjavur

which will attract senior citizens and illiterate customer.

Fraud related problems seem to occupy the foremost place. There should

be an open end discussion on the threat and vulnerability coming across

462

the functioning of internet banking by employees in the various official

forums.

Bank must continue to educate their customers on emerging threats. It is

unfortunate that Indian banks do not report frauds because there is no

legislation to make fraud public. In India, banks are not legally

mandated to put fraud in public domain.

463

7.3 CONCLUSION

The study found that both SBI and ICICI bank’s e-banking customers have moderate level of satisfaction and the satisfaction level of ICICI bank’s customers is higher than SBI bank’s customers. However, both banks should realize the strong need for customer education and care as satisfaction more depends on product awareness and problem awareness. E-banking offers a high level of convenience for managing one’s finance. However it continues to present challenges to the financial security and personal privacy. Awareness of problems enables one’s to take precautions for more secured transaction therefore, customer education on fraud needs special emphasis. The continuous availability of banking services with reliable and secured banking transactions is the main expectations of banking customers. Hence, besides offering more innovative and value added services banks should concentrate more on safety and privacy of financial transactions. By offering more advanced security solutions and ensuring safety of e-banking transactions banks can will delight the customer.

464

7.4. SCOPE FOR THE FUTURE STUDY

E-banking is new and fast growing but all the e-banking product are not popular in Thanjavur. Due to lack for awareness among people in Thanjavur, the study is restricted to Thanjavur town and the products of banks particularly

SBI and ICICI which are highly used by the respondents in this area have been selected for this study. The study has not included services of other banks. It has also not included the services provided by the foreign banks due to non- availability of their services in this area, since the researcher could not be able to consider for the present study. The cross cultural differences across countries can be studied for selected banks from other countries. This may be throwing light on improving competitiveness globally. So the researcher has identified the above limitations as a scope for the proposed future research to the researcher in Thanjavur.

465

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Appendix

A STUDY ON CUSTOMERS’ SATISFACTION TOWARDS E-BANKING WITH SPECIAL REFERENCE TO SBI AND ICICI BANKS IN THANJAVUR TOWN

Dr.M.SWAMINATHAN S.BELLARMIN DIANA

Research Advisor Research scholar

QUESTIONNAIRE

Please give attention to the following before start answering the questionnaire,

Sir/Madam,

I am a research Scholar doing Research in the field of customer’s satisfaction towards e- banking. I request you to kindly spend 10-15 minutes in answering the questionnaire, which is designed to understand your perception, preference, problems and level of satisfaction on your bank’s e-banking services.

You will be aware of the fact that electronic delivery channels have enabled the banking organization to redesign and restructure their functioning and acts as a key driver of changes. Different opinions are expressed about the use of e-banking services. Findings of this report will help the bank to improve their e-banking services according to your needs and expectations.

This questionnaire has six parts.

Part A captures personal details

Part B captures your e-banking habit and perception

Part C captures your awareness level and preference in relation to e-banking products

and services.

Part D Captures your perception on problems related to e-banking products and services.

Part E captures your satisfaction level with e-banking services of your bank.

xxviii

This part has two columns.

Column Column 2 Parameters How do you rate e-banking services of your bank on the parameters listed in Column 1 E-BANKING FACILITIES ATM – CUM – Debit Card I II III IV V

Read the question in column2 as

How do you rate e-banking services of your bank on the parameter “E-Banking Facilities” like services via ATM – cum – Debit Card etc?

The answer is to be recorded in the scale of I to V represented as

I – Excellent, II – Very good III – Just Satisfactory IV - Poor

V – Very Poor

You have to circle the number based on your opinion.

Part F has a blank space for expressing your opinion and suggestion in relation to e- banking products and services of your bank.

Thanks for your co-operation

S.Bellarmin Diana Research Scholar, A.V.V.M. Sri Pushpam College, Poondi – 613 503.

xxix

PART – A: PERSONAL DETAILS ( √) the suitable option

1. Name

2. Age : Less than 30 30 to 40 40 to 50

50 and above

3. Sex : Male Female

4. Educational Qualification : Graduate Post Graduate

Professional Doctorate

Others ……………….. (Pl. specify)

5. Occupation : Businessman Professional

Govt. Employee Private Employee

Retired Person Other

6. Monthly Income : Rupees

Below 15000 15000 to 25000 25000 to 40000 40000 to 60000 Above 60000

7. Marital Status : Married Unmarried

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PART B : YOUR E – BANKING HABIT AND PERCEPTION

1. Do you have access to e-banking facilities?

Yes No

2. If yes, which of these facilities you are availing from your bank?

ATM – Cum Debit Card ATM Credit Card

Internet Banking Mobile Banking EFT/NEFT

RTGS Electronic Clearing Service (ECS)

Any Branch Banking

3. Motivational factor to avail E-banking products:-

Friends & Relatives Bank Employee

Phone Banking Sales Executives

Advertisement Other Factor

4. For how many years you are utilizing E – banking services?

Less than 1 year 1 to 2 years

2 to 5 years More than 5 years

5. Do you prefer to use electronic delivery channels like ATM, Internet, Mobile etc. to carry out your banking transactions than going to bank?

Yes No

6. If yes, reason for preference to e-banking products:

Convenience of banking No risk of carrying cash

Global access Time saving

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Easy Fund Transfer

7. How many times you have done your banking transactions through electronic

delivery channels like ATM, Internet, Mobile etc., in the past, three months?

Zero 1 to 5 times 5 to 15 times

15 to 30 times 30 to 50 times

More than 50 times

8. Do you feel secure with you financial information available and managed through

electronic delivery channels?

Very secure Somewhat secure Not sure

Somewhat insecure Very much insecure

9. “Introduction of electronic delivery channels like ATM, Internet Mobile etc., has

improved the service level of banking”, is it true?

Very true Some what true No sure

Some what untrue Very untrue

10. “Human contact between bank and the client is necessary”, do you agree?

Strongly agree Agree Neither agree not disagree

11. “Electronic Channels like ATM, Internet, Mobile etc., will completely Replace

branches”, do you agree?

Strongly agree Agree Neither agree not disagree

Disagree Strongly disagree

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PART C: AWARENESS AND PREFERENCE

(Answer Questions relevant to your e-banking product)

E-BANKING FACILITIES Do you Aware? Do you utilize? I. ATM-CUM-DEBIT CARD (i) SERVICES AT ATM Balance Enquiry ( ) Yes ( ) No ( ) Yes ( ) No Withdrawal of cash ( ) Yes ( ) No ( ) Yes ( ) No Deposit of Cash/Cheque/Other Instrument ( ) Yes ( ) No ( ) Yes ( ) No Obtaining Statement of Account ( ) Yes ( ) No ( ) Yes ( ) No Cheque book request ( ) Yes ( ) No ( ) Yes ( ) No Change of PIN ( ) Yes ( ) No ( ) Yes ( ) No Fund Transfer ( ) Yes ( ) No ( ) Yes ( ) No Between account in the same branch/bank ( ) Yes ( ) No ( ) Yes ( ) No Card to card transfer ( ) Yes ( ) No ( ) Yes ( ) No Card Account Transfer ( ) Yes ( ) No ( ) Yes ( ) No Fast Cash ( ) Yes ( ) No ( ) Yes ( ) No Share ATM Facility ( ) Yes ( ) No ( ) Yes ( ) No Credit Card Bill Payment ( ) Yes ( ) No ( ) Yes ( ) No Bank’s Insurance Premium Payment ( ) Yes ( ) No ( ) Yes ( ) No Holy and Trust Donations ( ) Yes ( ) No ( ) Yes ( ) No Fee payment for educational institution ( ) Yes ( ) No ( ) Yes ( ) No Mobile Top-ups ( ) Yes ( ) No ( ) Yes ( ) No Payment for Air Ticket ( ) Yes ( ) No ( ) Yes ( ) No DEBIT CARD AT POINT OF SALE ( ) Yes ( ) No ( ) Yes ( ) No Payment for purchase at POS ( ) Yes ( ) No ( ) Yes ( ) No SMS alert of POS transaction ( ) Yes ( ) No ( ) Yes ( ) No Cash withdrawal at POS ( ) Yes ( ) No ( ) Yes ( ) No Attractive Discount ( ) Yes ( ) No ( ) Yes ( ) No Surcharge Waiver ( ) Yes ( ) No ( ) Yes ( ) No Reward points ( ) Yes ( ) No ( ) Yes ( ) No iii . OTHER SERVICES THROUGH ( ) Yes ( ) No ( ) Yes ( ) No DEBIT CARD Operate multiple account with single ( ) Yes ( ) No ( ) Yes ( ) No Debit Card Personal accident cover ( ) Yes ( ) No ( ) Yes ( ) No Lost Card Liability cover ( ) Yes ( ) No ( ) Yes ( ) No Purchase protection ( ) Yes ( ) No ( ) Yes ( ) No Online Utility Bill Payment ( ) Yes ( ) No ( ) Yes ( ) No Online purchase ( ) Yes ( ) No ( ) Yes ( ) No

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II. INTERNET BANKING Access Bank Account Information ( ) Yes ( ) No ( ) Yes ( ) No Bill payment and presentment ( ) Yes ( ) No ( ) Yes ( ) No Bank a/c statement by e-mail ( ) Yes ( ) No ( ) Yes ( ) No Fund Transfer Internet Branch Fund Transfer ( ) Yes ( ) No ( ) Yes ( ) No (between own a/c) Inter Branch Fund Transfer ( ) Yes ( ) No ( ) Yes ( ) No (to third party a/c) Transfer to any bank a/c ( ) Yes ( ) No ( ) Yes ( ) No RTGS Payment Instruction ( ) Yes ( ) No ( ) Yes ( ) No Linking of Accounts Linking bank a/c and Credit Card a/c ( ) Yes ( ) No ( ) Yes ( ) No Linking bank a.c and Demat a/c ( ) Yes ( ) No ( ) Yes ( ) No Access Credit Card details ( ) Yes ( ) No ( ) Yes ( ) No Credit Card related service request ( ) Yes ( ) No ( ) Yes ( ) No Access Demat account details ( ) Yes ( ) No ( ) Yes ( ) No Subscribe alert on Mobile phone ( ) Yes ( ) No ( ) Yes ( ) No Service Request Apply for Debit Card ( ) Yes ( ) No ( ) Yes ( ) No Intimate about loss of ATM Card ( ) Yes ( ) No ( ) Yes ( ) No Opening Deposit Account ( ) Yes ( ) No ( ) Yes ( ) No Cheque status enquiry ( ) Yes ( ) No ( ) Yes ( ) No Apply for Phone banking ( ) Yes ( ) No ( ) Yes ( ) No Apply for bank products ( ) Yes ( ) No ( ) Yes ( ) No Online Air ticket booking ( ) Yes ( ) No ( ) Yes ( ) No Online Railway ticket booking ( ) Yes ( ) No ( ) Yes ( ) No Income, Service & Excise Duty Payment ( ) Yes ( ) No ( ) Yes ( ) No Online Custom Duty Payment ( ) Yes ( ) No ( ) Yes ( ) No Online Shopping ( ) Yes ( ) No ( ) Yes ( ) No III. MOBILEW BANKING ( ) Yes ( ) No ( ) Yes ( ) No Balance enquiry ( ) Yes ( ) No ( ) Yes ( ) No Last 5 transaction details ( ) Yes ( ) No ( ) Yes ( ) No Cheque book request ( ) Yes ( ) No ( ) Yes ( ) No Cheque status enquiry ( ) Yes ( ) No ( ) Yes ( ) No Stop cheque request ( ) Yes ( ) No ( ) Yes ( ) No Bill Payment ( ) Yes ( ) No ( ) Yes ( ) No Fund Transfer ( ) Yes ( ) No ( ) Yes ( ) No Get Credit Card account Details ( ) Yes ( ) No ( ) Yes ( ) No Get Demat account details ( ) Yes ( ) No ( ) Yes ( ) No Loan account details ( ) Yes ( ) No ( ) Yes ( ) No Locate Branch/ATM ( ) Yes ( ) No ( ) Yes ( ) No Prepaid Mobile Recharge ( ) Yes ( ) No ( ) Yes ( ) No Apply for Bank products ( ) Yes ( ) No ( ) Yes ( ) No Status of service request raised ( ) Yes ( ) No ( ) Yes ( ) No

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IV. CREDIT CARD Cash withdrawal facility at ATM ( ) Yes ( ) No ( ) Yes ( ) No Cash advance at cash point ( ) Yes ( ) No ( ) Yes ( ) No Online shopping ( ) Yes ( ) No ( ) Yes ( ) No Online Railway Ticket Booking ( ) Yes ( ) No ( ) Yes ( ) No E-Statement ( ) Yes ( ) No ( ) Yes ( ) No SMS alert ( ) Yes ( ) No ( ) Yes ( ) No Utility bill payment ( ) Yes ( ) No ( ) Yes ( ) No Balance Transfer facility ( ) Yes ( ) No ( ) Yes ( ) No Online Management of Card Account ( ) Yes ( ) No ( ) Yes ( ) No Auto Debit Facility ( ) Yes ( ) No ( ) Yes ( ) No Payment Option Cash/Cheque/Draft ( ) Yes ( ) No ( ) Yes ( ) No Payment through ATM ( ) Yes ( ) No ( ) Yes ( ) No Payment through ECS Drop box facility ( ) Yes ( ) No ( ) Yes ( ) No Dial-a-Draft facility ( ) Yes ( ) No ( ) Yes ( ) No Personal Loan on Card ( ) Yes ( ) No ( ) Yes ( ) No Interest free Credit card ( ) Yes ( ) No ( ) Yes ( ) No Add on card facility ( ) Yes ( ) No ( ) Yes ( ) No Temporary Credit limit enhancement ( ) Yes ( ) No ( ) Yes ( ) No Permanent Credit limit enhancement ( ) Yes ( ) No ( ) Yes ( ) No Selfset/monthly preset limit ( ) Yes ( ) No ( ) Yes ( ) No Limited lost card liability ( ) Yes ( ) No ( ) Yes ( ) No Revolving Credit facility ( ) Yes ( ) No ( ) Yes ( ) No Cash back offer ( ) Yes ( ) No ( ) Yes ( ) No Discount ( ) Yes ( ) No ( ) Yes ( ) No Reward point ( ) Yes ( ) No ( ) Yes ( ) No Fuel Surcharge Waiver ( ) Yes ( ) No ( ) Yes ( ) No Personal accident cover ( ) Yes ( ) No ( ) Yes ( ) No Credit Shield Cover ( ) Yes ( ) No ( ) Yes ( ) No Life Insurance on card holder ( ) Yes ( ) No ( ) Yes ( ) No Life Insurance on add on card holder ( ) Yes ( ) No ( ) Yes ( ) No Purchase protection ( ) Yes ( ) No ( ) Yes ( ) No V.ANY BRANCH BANKING ( ) Yes ( ) No ( ) Yes ( ) No Deposit of cash at non-home branch ( ) Yes ( ) No ( ) Yes ( ) No Deposit of cheque& clearing instrument ( ) Yes ( ) No ( ) Yes ( ) No Cash withdrawal at non-home branch ( ) Yes ( ) No ( ) Yes ( ) No Balance enquiry at non-home branch ( ) Yes ( ) No ( ) Yes ( ) No Get statement of account at non-home ( ) Yes ( ) No ( ) Yes ( ) No branch Passbook updation ( ) Yes ( ) No ( ) Yes ( ) No Fund Transfer from home branch to third ( ) Yes ( ) No ( ) Yes ( ) No party a/c at another CBS branch

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PART D : YOUR PERCEPTION ON PROBLEMS

(Answer Relevant Questions only)

1. Electronic banking has increased the gap between bank and the Customer?

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

2. Difficulty in interacting with bank for grievances

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

3. Helpline waiting time in long

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

4. The 24 hours helpline of the bank is not of any help when any dispute arises

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

5. Misleading advertisement and promotion literature on banking products and services. Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

6. Lack of explicit permission from customers for sharing information about them Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

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7. Lack of proper compensation as per compensation policy

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

8. Without prior notification changes in the schedule of charges, terms and conditions. Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

9. Service charges and annual maintenance changes are high with regard to e- banking facilities. Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

10. Delay in correcting mistakes and cancelling any bank charges Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

11. Risk is the major constrain for e-banking customers Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

12. Technology used for the safety of e-banking transaction is not up to the mark

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

13. Insufficient consumer education of fraud prevention and detection

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

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I. ATM related Problems:

14. ATM Centres are insufficient

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

15. ATM Centres are not in prominent place

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

16. In sufficient Cash balance at ATM centres

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

17. Lack of connectivity with more and more bank’s ATM through shared ATM

network

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

18. Amount allowed to be drawn from ATM per day is very low

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

19. “Account debited but cash not dispensed” is a frequent problem

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

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20. Card blocking is very frequent

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

21. Safety situation around ATM is not satisfactory

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

22. High service charge for cash withdrawal at shared and other banks ATM.

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

23. Heavy charges for fund transfer through VISA money transfer and money send

option

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

II. Credit Card related Problems

24. Hidden charges and basis of applying interest is not made known to the customer

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

25. Unwarranted Overdraft has been allowed by banks without the consent of the

customer

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

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26. Unannounced slashing of credit limit

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

27. Issue of credit card without asking customer

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

28. New Cards being incepted and misused by unscrupulous elements before they

reach customers

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

29. Banks are in the dock of using strong arm tactics to recover dues

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

30. Difficulty in closure and blocking of lost and

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

31. Difficulty in returning the cards issued

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

32. Charges for things that customer did not buy

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

33. Debiting the card account twice

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

34. Drop boxes are not sufficient

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

35. Credit limit fixed is low

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

36. Delay in issuing new cards in the place of lost card

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

37. Delay in sending monthly statement of account

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

38. Error in statement of account

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

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39. Delay in sending Duplicate statement of account

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

40. Providing clients unbelievable credit limit without any reason

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

41. The reason for rejecting card application is not at all communicated to the

applicant

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

42. Sharing card holder’s information with any of its group companies subsidiaries or

affiliates etc.

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

43. Receiving unwanted calls from agents of sundry banker offering Financial product

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

44. Receiving calls about payment outstanding even after payment made

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

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45. There remains some risk of giving card number when buying online

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

46. Products purchased through card are costlier

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

47. Some merchants hesitate to accept credit card

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

48. Merchant establishments charge heavy transaction cost

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

49. Merchant establishments are not displaying statement ‘credit card accepted”

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

50. Cash back offer and reward points are not much rewarding

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

51. Usurious interest charges on outstanding

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

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52. Heavy fee on late payment

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

53. Higher charges on over limit credit

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

54. Heavy charges for cash withdrawal at ATM

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

55. Finance charges are very high on extended credit and cash advance

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

56. Foreign currency transaction fee is high

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

57. Surcharge on railway ticket reservation and petrol filling is high

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

58. Cheque collection charges are high

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

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59. High outstation cheque processing fee

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

60. Replacement card fee is high

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

61. Statement retrieval fee is high

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

62. Changing late payment fee for a short payment of few paise

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

III. Debit card related problems

63. Delay in giving final resolution for disputed transaction

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

64. Cancellation or blocking of a card after the card is lost or stolen takes more time

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

65. Cancellation of debit card without assigning any reason by banks

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

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66. Debiting card holder’s account twice

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

67. It takes more than a month to get back the money that is wrongly debited.

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

68. Getting an ATM Cum debit Card is a time consuming process

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

69. Using a debit card for online purchase is risky

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

70. Charges for issuing replacement card is high

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

IV. Net Banking related problems

71. The information on bank’s website are not current and updated

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

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72. The websites are more bank-centric and less customer – centric

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

73. The websites are not telling how a particulars product or scheme is beneficial or

profitable for a customer

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

74. Difficulty in identifying the authenticity of bank’s e-mail

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

75. Difficulty in identifying the difference between the bank’s website and spoof

website

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

76. Delay in getting back the amount after cancellation of train ticket booked through

net banking

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

77. Online air ticket booking through merchant side involves heavy fee

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

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78. Fund transfer to any other bank’s account through net banking is available in

selected banks in selected cities

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

IV. Mobile banking related problems

79. The permissible amount of financial transaction per day using mobile banking is

low

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

80. The SMS alerts on credit or debit transaction is only for higher value transaction

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

81. Financial transactions are only possible in iphone

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

VI. RTGS, NEFT, ECS related problems

82. RTGS and NEFT is enabled only in specific branches across India

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

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83. Non-credit or delay in credit to the beneficiary account in case of NEFT

transactions.

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

84. As a sponsor bank of ECS debit and credit, bank collects heavy charges

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

VII. Any Branch Banking

85. The permissible amount of deposit through any branch banking is very low

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

86. The permissible amount of withdrawal is low

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

87. Huge charges for deposit of intercity cheques and clearing instrument at non-home

branch

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

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88. Heavy Service Charges for inter city fund transfer to third party account at another

CBS branch

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

VIII. Problems related to fraud

89. Skimmers and cameras used by fraudsters to collect card information

Strongly agree Agree Neither agree not disagree

Disagree Strong disagree

90. Phishing e-mails from fraudsters, seeking information on card account, password

and pose as a trustworthy source

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

91. Fake calls to wheedle out financial information

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

92. The chances of capturing credit card number and its expiry date through charge

slip by fraudster is very high

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

93. Photo copies of cards are used by fraudsters to make online purchase

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

94. Unsolicited Credit card applications raise the chances of risk.

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

95. Unauthorized person or hacker traps data travelling across the network.

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

96. Confidential information provided by card users to the concerned website for

making online purchases are hacked by internet fraudsters.

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

97. Through cookies in the website fraudsters collect confidential information

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

98. The amount of malicious or malware software designed to steal password grows

exponentially

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

99. The risk of existence of malware program in an undesirable website or an e-mail

from an unknown source is very high

Strongly agree Agree Neither agree not disagree

a. Disagree Strong disagree

100. Cyber attackers sent Viruses through free trial offer of software and services

Strongly agree Agree Neither agree not disagree

b. Disagree Strong disagree

1. Have you come across any problem personally?

Yes No

2. Have you contacted your bank for complaining about your problem?

Yes No

3. If no, reason for not making complaint

Failure of previous effort Busy with work

Automatic rectifications Other reason

4. If yes, how you approached the bank?

Through Helpline Internet Other

5. Number of times complaint made by you,

Less than 3 times 3 to 6 times More than 6 times

6. Whether the bank helped to solve the problem at your satisfaction

Yes No

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7. If yes, whether appropriate redressal of your complaint is made within

stipulated period.

Yes No

8. Time taken to solve the problem

within a day within a week more than a week

9. Did you face the same problem again and again?

Yes No

10. Your level of satisfaction towards complaint handling of your bank

High satisfied Satisfied neither satisfied nor Dissatisfied Dissatisfied Highly dissatisfied

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PART E: SATISFACTION LEVEL WITH E-BANKING PRODUCTS AND

SERVICES

Column I lists the parameters Number in Column 2 represents the answer to the question “How do you rate e-banking services of your bank?” on the parameters listed in Column 2.

Circle the number based on your opinion in the scale

I – Excellent, II – very good, III – Just satisfactory, IV – Poor, V-very poor

Column I Column 2 How do you rate e-banking services of Parameters your bank on the parameters listed in Column 1 A. E-BANKING FACILITIES I II III IV V ATM – cum – debit card I II III IV V ATM Services I II III IV V Credit Card I II III IV V Internet Banking I II III IV V Mobile Banking I II III IV V RTGs I II III IV V EFT/NEFT I II III IV V Electronic Clearing Service (ECS) I II III IV V Any branch banking I II III IV V B QUALITY OF SERVICE Accuracy/Absence of error I II III IV V Confidentiality I II III IV V Good complaint handling I II III IV V Clear communication between bank and the I II III IV V customer No break-down of machines/services I II III IV V Prompt response to customer request I II III IV V Easy connectivity I II III IV V Adoption of user friendly technology I II III IV V Connectivity with other banks I II III IV V Secured transaction I II III IV V

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Part F :

Please write your opinion – both positive and negative about e-banking services offered by your bank, your expectations about services and also your suggestions for improvements etc.