IndusInd Bank.doc

SUMMER TRAINING PROJECT REPORT

ON

NET BANKING SERVICE PROVIDED BY

INDUSIND BANK

SUBMITTED TO:

PUNJAB TECHNICAL UNIVERSITY, JALANDHAR

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT FOR THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION (2008-11)

SUBMITTED BY :

DILPREET SINGH

BBA

UNIVERSITY ROLL NO. 80103320091

GURU NANAK INSTITUTE OF MANAGEMENT AND

TECHNOLOGY

MODEL TOWN, LUDHIANA

1

ACKNOWLEDGEMENT

First & foremost, it is my profound privilege to express my sincere thanks to Mr.V.K.Goyal

(chief executive) who made it possible for me to work in this prestigious organization.

I gratefully acknowledge my indebtness to Mr. Rajan Soni (Deputy manager, IndusInd

Bank) who guided me from time to time complete my training at IndusInd Bank.

I am also thankful to Dr. [Col.] H.S. Singha Director of GNIMT for helping me to

undertake my summer training in this reputed organization. I am thankful to his for

encouraging & valuable support.

My special and sincere thanks are reserved for my guide Mrs. Rajni Sofat who never said

‘no’ to me and lend me a helping hand whenever I needed her guidance. She always

inspired me to learn more & more.

I am thankful to the staff members of the other department of IndusInd for their generous

support, cooperation, encouragement & valuable suggestions through my training.

Dilpreet Singh

University Roll No. 80103320091

2

PREFACE

This project is result of my six weeks in industry summer training at IndusInd. Summer training

is an integral part of BBA course & it aims at providing a firsthand practical experience of the

industry to the students. This helps the students to view a real business world closely, which in

turn will influence perception.

I am happy that I got an opportunity to pursue training in a reputed, well established, fast

growing & professionally managed organization like IndusInd Bank. The project assigned to me

was “NET BANKING SERVICE PROVIDED BY INDUSIND BANK”. In course of training

I got an opportunity to see & work specially the personnel department.

The practical knowledge acquired is certainly going to help in one & another way. The training

in industry gives me opportunities to understand the various things.

3

STUDENT DECLARATION

I, Dilpreet Singh student of Bachelor of Business Administration from

GURU NANAK INSTITUTE OF MANAGEMENT AND TECHNOLOGY,

MODEL TOWN, LUDHIANA, hereby declare that I have completed my project

on reasons behind employee turnover as part of the course requirement

I further declare that the information presented in this project is true and original to

the best of my knowledge and none of its part is submitted for any other award or

degree.

Signature

4

CHAPTER 1

INTRODUCTION

5

INTRODUCTION

1.1 AN INTRODUCTION TO THE COMPANY

IndusInd Bank derives its name and inspiration from the Indus Valley civilisation - a culture

described by National Geographic as 'one of the greatest of the ancient world' combining a spirit

of innovation with sound business and trade practices.

Mr. Srichand P. Hinduja, a leading Non-Resident Indian businessman and head of the Hinduja

Group, conceived the vision of IndusInd Bank - the first of the new-generation private banks in

India - and through collective contributions from the NRI community towards India's economic

and social development, brought our Bank into being.

The Bank, formally inaugurated in April 1994 by Dr. Manmohan Singh, Honourable Prime

Minister of India who was then the country’s Finance Minister, started with a capital base of

Rs.1,000 million (USD 32 million at the prevailing exchange rate), of which Rs.600 million was

raised through private placement from Indian Residents while the balance Rs.400 million (USD

13 million) was contributed by Non-Resident Indians.

A NEW ERA

About IndusInd Bank

IndusInd Bank Ltd. is one of the new-generation private-sector banks in India which commenced

its operations in 1994. The Bank enjoys a patronage of 2 million customers and has a network of

180 branches, 402 ATMs spread across 147 geographical locations in 28 states and union

territories as on September 30, 2009. The Bank also has a Representative Office each in Dubai

and London. The Bank's total business (deposits plus advances) as on September 30, 2009

crossed Rs. 40,000 crores.

It has multi-lateral tie-ups with other banks providing access to more than 21000 ATMs for its

customers. It enjoys ‘clearing and settlement bank’ status with leading capital, commodity and

6

currency exchanges within India eg - BSE / NSE and commodity exchanges like- MCX,

NCDEX, and NMCE.

While continuing its drive for efficiency and profitability, IndusInd Bank is a keen participant in

the Corporate Social Responsibility space. It is actively engaged in helping mentally-challenged

and underprivileged children and on other hand, helps in sensitizing /upholding environmental

and ecologically appropriate behaviour. The Bank actively supports “Green Practices” within

the Bank and under its campaign “Hum aur Hariyali”, it has successfully launched a slew of

green initiatives. It is also an active supporter of the arts especially in the field of music and

dance.

CRISIL has assigned Highest P1+ rating to IndusInd Bank’s Fixed Deposits and Certificates of

Deposit. Recently, CRISIL has reaffirmed its P1+ rating of IndusInd Bank’s Fixed Deposits and

Certificates of Deposit programme. ICRA has also assigned the highest A1+ rating to IndusInd

Bank’s Certificates of Deposit.

1.2 BOARD OF DIRECTORS

Mr. R. Seshasayee Managing Director, Ashok Leyland Ltd.

Mr. R. Sundararaman Former Dy Managing Director of SBI

Mr. T. Anantha Narayanan Chartered Accountant and Expert in Agriculture and Rural Economy

Dr. T. T. Ram Mohan Professor, Finance & Accounting, IIM, Ahmedabad

Mrs. Pallavi Shroff Practising Lawyer

Mr. Premchand Godha M.D. of Ipca Laboratories Ltd., having practical experience of SSI &

Agriculture

Mr. Ajay Hinduja Businessman

Mr. Sushil Chandra Tripathi I.A.S (Retired), Advocate

Mr. Ashok Kini Former Managing Director of SBI

Mr. Romesh Sobti Managing Director & CEO

7

1.3 MILLESTONE

Year Business Achievements

2007-08

Business Turnover touched a figure of Rs 31833.16 crores

Network of Branches increased to 180 along with 183 off-site ATMS, thus having presence in

over 147 geographical locations spread over 28 states including Union Territories

A Strategic tie-up with Reliance Securities for offering a value-added 3-in-1 savings accounts-

linked package to customer-comprising a saving bank account, a depository account, and an

Internet trading account

Signed an agreement with National Multi Commodity Exchange Ltd. to become their Clearing

Bank; It already had such agreements with and NCDEX

Strategic partnership with Cholamandlam MS for banc assurance

Received recognition in the form of a Certificate of Nomination for the Global Connect

Customer Responsiveness Awards. The participants for

the award were evaluated on various parameters such as Responsiveness, Intelligence

Generation, Intelligence Dissemination, Customer Education, Top management Emphasis,

Innovation & Learning

Received recognition by BSE and NASSCOM Foundation for the Best Corporate Social

Responsibility Practice Category

Featured in the Standard and Poor ESG India Index which provided the investors with exposure

to liquid and tradable index of 50 of the best performing stocks in the Indian market as measured

by environmental, social and governance (ESG) parameters

2006-2007

Net worth crossed a milestone figure of Rs 1000 crores at Rs 1056 crores

Successful completion of GDR issue of Rs 145.96 crores

Business turnover touched a figure of Rs 28.700 crores registering a growth of 18.17% over the

previous year.

Network of Branches increased to 170 along with 99 off-site ATMs, thus having presence in

over 141 geographical locations spread over 27 States including Union Territories

8

Highest A1+ rating for its Certificate of Deposits by ICRA and Highest P1+ rating for its FDs by

CRISIL.

Bestowed with the prestigious IBA Award for technology implementation (STP).

Added a number of new business and product lines, viz the launch of Indus GOLD and Indus

Gift Card, E-Remittance facility, tie-up with number of Banks for ATM usage, tie-up with

Reliance Securities to extend Portfolio Management services and Banc assurance tie-up with

Aviva Life Insurance.

Ranked among the top ten banks in the country in the ET500 list of leading companies in India.

Rated as ‘The best among the top 10 private-sector banks’ in a survey covering 79 banks

conducted by Business Standard in its November 2005 issue. Ranked sixth in the overall list, the

bank was also identified the

“Most Efficient Bank’ among all banks in India.

Bestowed ‘India’s Most Productive Bank’ status by a Business Today- KPMG Survey

Presented ‘Outstanding Achiever of the year 2005- Corporate’ (Runner up- Banking Technology

Award) by IBA, Finacle (from Infosys) and TFCI

(Trade Fair and Conference International).

2004-05

Business Turnover Crossed Rs 22000 crores

Network grew to 115 branches, 9 extension counters and 195 ATMs. Spread over 95

geographical locations

Bestowed with highest rating for deposits from reputed rating agencies

Highest rating ‘P1+’ on Fixed Deposits from CRISIL

Highest rating ‘P1+’ on Certificate of Deposits from CRISIL

Highest rating ‘F1+’ on Fixed Deposits from Fitch Ratings India Pvt. ltd.

Bank’s second International Representative Office opened in London.

100th Branch opened at Dadar, Mumbai.

Signed an agreement with NCDEX as clearing banker.

Launched International Mahila Card.

2003-04

9

Total business volume touched Rs 19000 crores.

Completes 10 years of banking excellence

Ashok Leyland Finance merges with the bank

The first Indian commercial bank to achieve certification for its ‘Entire Network of Branches’

under the ISO 9001:2000 Quality Management System.

Launch of Debit Card- International Power Card.

Bank’s first International Representative Office in Dubai.

One of the first banks to live on RTGS platform.

2002-03

One of the first banks to implement the RBI- Electronic Funds Transfer Scheme.

2001-02

Total business volume touches Rs 14000 crores. Highest productivity in the Indian banking

sector with Rs 16 crores of business per employee.

2000-01

Total business volume crosses Rs 10000 crores

1998-99

IndusInd again rated as one of the Top Performing Banks in various survey reports, for the

second year in succession.

1997-98

IndusInd rated as one of the Top Performing Banks in various survey reports

1996-97

Pioneer in launching Internet Banking.

1.4 MISSION

10

To position induslnd bank limited as a top 3 performer in the new private bank space in 3years

measured by The 3 parameters of profitiability, productivity and Efficiency.

1.5 PRODUCTS

PRODUCTS OFFERED BY INDUSIND BANK

Bank offers various products in terms of servicing its customer. The bank has tried to tab the

growth of the retail sector & has come with various products, Priority Banking being one of

them. Bank has pushed the retail banking through a wide spread distribution network & through

the growth of the bank’s

Product& customer base. Bank has also tried to enhance cost Efficiency by leveraging

technology that is continuous upgrading & customer base.

Saving Account

Induslnd Bank offers you a Regular Saving Account with host of convenient features and

banking channels to transact through. So, now you can bank at your convenience, without the

stress of waiting in queues.

Current Account

In today’s fast-paced world, your business regularly requires you to receive and send funds to

various cities in the country. INDUSIND Bank Regular Current Account gives you the power of

inter-city banking to more than 200 cities.

Fixed Deposits

Safety, Flexibility, Liquidity and Returns!!!

A Combination of unbeatable features of the Fixed Deposit from INDUSIND Bank.

Credit Cards

An INDUSIND Bank credit card gives you the facility of cash, convenience and a range of

benefits, anywhere in the world. These benefits range from life time free cards, insurance

11

benefits, global emergency assistance service, discount, utility payment, travel discount, and

much more.

Debit Cards

The INDUSIND Bank Debit Card is a revolutionary form of cash that allows customers to access

their bank account around the clock, around the world.

INVESTMENT

At INDUSIND Bank, we care about all your needs. Along with deposit products and loan

offerings, INDUSIND Bank assists you to manage your finance by providing various

investments options ranging from INDUSIND Bank offers to investment in mutual funds and

pure gold.

You can invest in above products through any of our branches. For selected products

INDUSIND Bank also provides, the ease of investing through electronic channels like ATMs

and Internet (www.indusindbank.com).

E-Instructions :

You can transfer securities 24 hours a day, 7dys a week through Internet & Interactive Voice

Response (IVR) at a lower cost. Now with “Speak to transfer”, you can also transfer or pledge

instructions through our customer care officer.

Mutual Fund

IndusInd bank has tied-up with almost all the mutual funds in the country for distribution pan

India. We are currently distributing schemes of the following mutual fund:-

ABN AMRO LIC

BIRLA PRINCIPAL

BOB PRUICICI

CHOLAMANDALAM RELIANCE

CANBANK STANDARD

12

http://www.indusindbank.com/

CHARTERED

DSP SAHARA

DEUTSCHE SBI

FIDELITY SUNDARAM

HSBE TEMPLETON

HDFC TATA

ING TAURAS

JM UTI

General Insurance:

IndusInd Bank has tied up with “Aviva Life Insurance”

Has 3 Plans:

1. Life Long : - A Plan flexible enough to adapt to your life’s changing needs.

2. Pension Plus: - Why wait till your 60th birthday to follow

your hearts?

3. Save Guard : - A simple way to secure your service.

General Insurance:

IndusInd Bank has tied up with “CHULAMANDULAM”

1. Health Insurance

2. Marine Insurance

3. Stock Insurance

RETAIL BANKING

Accounts and Deposits:

Saving Accounts

Regular Saving Account

Privilege Saving Account

Privilege Plus Saving Account

Current Account

13

Regular Current A/C

Business Current A/C

Term Deposit

Fixed Deposit

Flexi term deposit

1.6 AN INTRODUCTION TO THE PROJECT

1.6.1 AN INTRODUCTION TO NET BANKING

With cyber cafes and kiosks springing up in different cities access to the Net is going to be easy.

Net banking (also referred as e banking) is the latest in this series of technological wonders in the

recent past involving use of Internet for delivery of banking products & services. Even the

Morgan Stanley Dean Witter Internet research emphasized that Web is more important for retail

financial services than for many other industries.

Internet banking is changing the banking industry and is having the major effects on banking

relationships. Banking is now no longer confined to the branches were one has to approach the

branch in person, to withdraw cash or deposit a cheque or request a statement of accounts. In true

Internet banking, any inquiry or transaction is processed online without any reference to the

branch (anywhere banking) at any time. Providing Internet banking is increasingly becoming a

"need to have" than a "nice to have" service. The net banking, thus, now is more of a norm rather

than an exception in many developed countries due to the fact that it is the cheapest way of

providing banking services.

1.6.1.1 MEANING OF NET BANKING

Net banking is a concept which enables everyone to conduct business with a bank from the

comfort of home or office.

Net banking means “application of electronic technology towards transfer of funds through an

electronic terminal, computer or magnetic tape to conduct various transactions like cash receipts,

payments, transfer of funds, etc.” It is often known as banking on net or e banking.

14

1.6.1.2 DEVELOPMENT OF NET BANKING IN INDIA

The financial reforms that were initiated in the early 1990s and the globalization and

liberalization measures brought in a completely new operating environment to the banks.

The bankers are now offering innovative and attractive technology-based services and

products such as ‘Anywhere Anytime Banking’, ‘Tele-Banking’, ‘Internet Banking’,

‘Web Banking’, ‘Net Banking’, ‘Mobile Banking’, etc. to their customers to cope with

the competition. The process started in the early 1980s when Reserve Bank of India

(RBI) set up two committees in quick succession to accelerate the pace of automation of

operations in the banking sector. A high-level committee was formed under the

chairmanship of Dr. C. Rangarajan, then Governor of RBI, to draw up a phased plan for

computerization and mechanisation in the banking industry over a five-year time frame of

1985–1989. The focus by this time was on customer service and two models of branch

automation were developed and implemented. Having gained experience in the earlier

mode of computerization, the second Rangarajan committee constituted in 1988 drew up

a detailed perspective plan for computerization of banks and for extension of automation

to other areas such as funds transfer, e-mail, BANKNET, SWIFT, ATMs, net banking,

etc. The Government of India enacted the Information Technology Act, 2000 (generally

known as IT Act, 2000), with effect from 17 October 2000 to provide legal recognition to

electronic transactions and other means of electronic commerce. RBI had set up a

‘Working Group’ on net banking to examine different aspects of net banking. The Group

had focused on three major areas of net banking such as

(1) technology and security issues,

(2) legal issues and

(3) regulatory and supervisory issues.

RBI had accepted the recommendations of the ‘Working Group’, and accordingly issued

guidelines on ‘internet banking in India’ for implementation by banks. The ‘Working

Group’ has also issued a report on net banking covering different aspects of net banking.

15

Internet banking in India is currently at a nascent stage. While there are scores of

companies specialising in developing internet banking software, security software and

website designing and maintenance, there are few online financial service providers.

ICICI bank is the first one to have introduced net banking for a limited range of services

such as access to account information, correspondence and, recently, funds transfer

between its branches. ICICI is also getting into e-trading, thus offering a broader range of

integrated services to the customer.

Several finance portals for provision of non-banking financial services, e-trading and e-

broking have come up. Commercial applications such as Electronic Bill Presentment

(EBP) and Procurement systems may not be introduced in India immediately, but are

likely to have a greater impact than the retail applications. The corporate sector is

adequately computerized and has already recognized the important role of e-commerce in

future. Increasingly, companies are setting up websites even where there are no

immediate tangible benefits to them from doing so.

1.6.1.3 NET BANKING IN INDIA – RBI GUIDELINES

In India, internet banking or net banking is in rudimentary stage. In order to promote

safety and soundness of internet banking activities, the RBI constituted a Working Group

on Internet Banking. The Group issued guidelines in June 2001. The Group divided the

internet banking products in India into 3 types based on the levels of access granted. They

are

Information Only System

Electronic Information Transfer System

Fully Electronic Transactional System.

16

1.6.1.4 ADVANTAGES AND DISADVANTAGES OF NET BANKING

Internet Banking also has its advantages and disadvantages. Below are mentioned the

most popular advantages of using Internet Banking along with some unavoidable

disadvantages.

The advantages include

Convenience - online banking sites never close; they're available 24 hours a day,

seven days a week, and they're only a mouse click away;

Portability – you now have access to money whenever there is an emergency,

whether or not you are in the country;

Transaction speed - online bank sites generally execute and confirm transactions

at the same rate or quicker than, ATM processing speeds;

Effectiveness – they offer sophisticated tools, including account aggregation,

stock quotes and rate alerts to help you manage all of your assets more

effectively.

Reduction in workload - No more standing in long lines at the bank, eliminating

endless paper based bank statements.

The disadvantages include

Lack of Computerization - which relates to virtual banks, revolves around the

lack of ATMs;

Start-up may take time - In order to register for your bank's online program, you

will probably have to provide ID and sign a form at a bank branch which can be

time consuming;

Learning curve - Banking sites can be difficult to navigate at first;

Distrust of the User - the possibility of frauds, making errors etc.

Problem of Security – Various sites are not properly looked at to ensure whether

customers money is safe in cyber world or not.

17

http://www.internetbankingfacts.com/Internet-Banking-Info/Advantages-and-Disadvantages.htm

http://www.internetbankingfacts.com/Internet-Banking-Info/Advantages-and-Disadvantages.htm

1.6.1.5 TRADITIONAL BANKING VS NET BANKING

Net banking or internet banking works much like traditional banking. The primary

difference is that in net banking account and information is accessed, payments are made

and statements reconciled using computer rather than paper or the phone to complete

transactions. Instead of going down to local branch office when one bank online he/she

can accomplish multiple tasks at once with the click of a button.

Online banking is rapidly becoming more and more popular as consumers recognize the

advantages online banking has to offer. For one most banks charge fewer fees if you take

advantage of their online banking services. You can also stop receiving paper statements

if you like in many cases and conduct 95% of your business over the Web when you take

advantage of Internet banking.

What to Internet Banks do? The same things traditional banks do. They hold onto our

money and lend it out to others respectively. The manage loans and help us keep track of

our finances. Chances are if you own a bank account at a traditional bank they offer some

type of Internet banking or online services. The next time you stop into your branch

office you should ask them about online banking. You may find once you start you have

no desire to go back to traditional banking.

For those that have a hard time keeping track of paper statements, Internet banking is a

life saver. Internet banking is also advantageous for frequent travelers that need to keep a

close eye on their finances from abroad.

1.6.3 NETBANKING SERVICE AT INDUSIND BANK

Net banking is IndusInd Bank's Internet Banking service. It provides up-to-the-second

account information. Net banking lets the customer manage his/her account from the

comfort of his/her mouse - anytime, anywhere. Net Banking services provides access to

account information, products and other services (including transactions of non-financial

18

http://www.internetbankingfacts.com/internet-banking-vs-traditional-banking/index.html





and financial in nature) as advised by the Bank from time to time to the customers

through the website of the Bank. Net Banking Services also include the services for

Demat account, Credit Cards and loan on the website of the Bank.

The IndusInd Bank web site (www.hdfcbank.com) also features two versions of a demo

facility - one "interactive" and the other "guided" - making it possible for even Internet

illiterates to get comfortable with its services.

On the downside, however, 'registration' for the service involves downloading of a form

that needs to be posted/delivered to any of its branches - not exactly "web savvy" as we

would call it. Also, the form itself requires Adobe Acrobat Reader to be installed and the

file size will exceed 5.5 MB, which translates roughly into an hour or more of on-line

time. Its 3-question FAQ page also assumes a high level of computer knowledge from

users ... not consistent with the rest of the website.

Net Banking service provides a host of features at the finger-tips:

View Account Balances & Statements

Transfer Funds between accounts

Create Fixed Deposits Online

Request a Demand Draft

Pay Bills

Order a Cheque Book

Request Stop Payment on a Cheque

And lots more.

19

http://www.hdfcbank.com/

1.6.3.1 SERVICES OFFERED UNDER NET BANKING SERVICE PROVIDED

BY INDUSIND BANK

IndusInd Bank Savings and Current account holders can access their account through

Net Banking.

Currently, Net Banking service is offered to the IndusInd Bank customers free with all

accounts. However, all minimum balance/deposit amount requirements of the relevant

accounts will need to be honoured. No separate fee is charged to access this service.

Currently, one can do any of the following:

Queries -

Check your Balance

See your Statement

Inquire about cheque status

Ask for a Statement

Ask for a Cheque Book

Inquire about your Fixed Deposit

Inquire about your TDS details

See your Demat Account

Update your profile

View IndusInd Bank Credit card bills

View your Mutual funds portfolio

Transactions -

Stop a Cheque

Pay your Bills

Ask for a Demand Draft

Transfer funds between your accounts

Transfer funds to a third party

Request for a new Fixed Deposit

20

Shop Online

Pay IndusInd Bank Credit Card Dues

Buy and sell Mutual Funds.

1.6.3.2 SECURITY AND SAFETY OF TRANSACTIONS ON NET BANKING

The customer can be assured of complete privacy when you use IndusInd Bank's Net

Banking facility. The bank has built several checks to safeguard the Net Banking

transactions. Before the user gain access to his/her account, he/she will be asked to

enter his/her unique customer ID and IPIN (password) to verify the identity. To

maximise the security and confidentiality of the transactions, one’s password is not

accessible to anyone, not even bank employees.

To ensure the security of the transactions, the bank uses a technology called Secured

Socket Layer (SSL), which involves scrambling of the information between the

customer and the Bank. If an unauthorized user tries to access your account by keying

in various combinations while trying to guess your password, your account will

automatically get locked. Moreover, when the user log-in to Net Banking, the last date

and time of log-in will be displayed so that the user can make sure that nobody has

accessed his/her account.

In addition to these online security features, have been placed under the supervision of

a dedicated team to monitor the access to the web server and to prevent unauthorized

access. These features work together to maximise the security of your banking

transactions.

IndusInd Bank has implemented a new security solution for its customers - secure

access as security of the customer is bank’s top priority, the bank has initiated the

secure access solution to protect the customers from fraudsters and hackers.

Currently following transactions are covered under secure access

21

http://www.hdfcbank.com/personal/payments/directpay_list.htm

Transfer from one IndusInd Bank account to other IndusInd Bank account

Transfer from IndusInd Bank account to any other bank's account

Visa money transfer

Third party demand draft through netbanking.

Internet banking has been exploited by hackers and fraudsters to deceive the bank's

customer and commit frauds. While the bank has best-of-the-breed solutions, processes

and people deployed to extend secure banking to its customers, it is important for our

customers to know that "secUrity is incomplete without u". Customers need to follow

secure computing guidelines to avert any frauds or security breaches to their accounts,

as keys to the internet banking accounts are held by respective account owners in the

form of customer IDs and internet banking passwords (I PIN). Here are some internet

banking security tips provided by IndusInd Bank:

1. Keep your customer ID and IPIN confidential and do not disclose it to

anybody.

2. Change your IPIN as soon as you receive it by logging into your net banking

account. Memorize your IPIN, do not write it down anywhere.

3. Refer "protect your computer accounts with strong passwords" section under

computer security tips.

4. Avoid accessing internet banking from shared computer networks such as

cyber cafes.

5. Do not click on links in the emails or sites other than www.hdfcbank.com to

access your net banking webpage.

6. Always visit the IndusInd Bank's net banking site through IndusInd Bank's

home page by typing the bank's website address (www.hdfcbank.com) on to the

browser's address bar. Users are encouraged to add the bank's url to favorites or

bookmark in the user computer browser.

7. Always verify the authenticity of the bank's net banking webpage by checking

its url as "https://netbanking.hdfcbank.com" and the pad lock symbol at the

22

https://netbanking.hdfcbank.com/



bottom corner of the browser before putting in your customer ID and IPIN.

8. If your customer id and ipin appear automatically on the login page of net

banking webpage, you should disable "auto complete" feature on your browser.

To disable auto complete feature:

a. Open internet explorer, click on “tools”=> internet options=> content.

b. Click on "auto complete", under "personal information"

c. Uncheck "user names and passwords on forms", click on "clear

passwords"

d. Click "ok"

9. Use virtual keyboard feature while logging into your internet banking account.

10. Do cross check your last login information available in net banking upon every

login to ascertain your last login and monitor any unauthorized logins.

11. Always type your confidential account information. Do not copy paste it.

12. Monitor your transactions regularly.

13. Use IndusInd Bank's "InstaAlerts" service.

14. Always logout when you exit net banking. Do not directly close the browser.

23

CHAPTER 2

REVIEW OF LITERATURE

24

REVIEW OF LITERATURE.

A number of researches have been conducted on net banking and its adoption,

development and its perils. Due to shortage of time and resources, a review of all the past

researches done could not be mentioned in this research project. So, a snapshot of some

of the reviews have been presented.

Nath et.al (2001) in their study found that in every industry, E-commerce is

revolutionizing the way business is conducted. New business models are replacing

outdated ones and organizations are rethinking business process designs and customer

relationship management strategies. Banks are no exception to this transformation. This

study examines bankers' views on providing banking services to customers using the

web. Specifically, it addresses issues such as the strategic need for Internet banking, its

effect on customer-bank relationships, and customers' experiences in Internet banking.

Data collected from 75 banks show that most banks do not yet offer full-fledged Internet

banking. However, most have plans to do so. Furthermore, bankers see Internet banking

as a strategic opportunity that can reduce transaction costs, enhance customer service,

increase the customer base and improve cross-selling opportunities. Also, Internet

banking is perceived more favorably by banks that offer it compared to those that do not.

Corrocher (2002) in his study examined the drivers of the adoption of the Internet

banking, in order to understand its role with respect to the traditional banking activity and

to offer a comprehensive picture of the diffusion of such a technology within the sector.

In doing so, it analyses the role of firm-specific and non firm-specific (technology,

market, environment) characteristics in influencing the decision to adopt the new

technological platforms to perform on-line banking transactions within the retail segment

of the financial sector. The main purpose of this paper is to investigate the relationship

between the Internet banking and the traditional banking activity, in order to understand

if these two systems of financial services delivery are perceived as substitutes or

complements by the banks.

25

Leary (2002) in his study examined how Internet or electronic banking is slowly but

surely reviving itself after numerous attempts by various financial institutions and

financial intermediaries in the 1970 and 1980s. The standardization in technologies and

the public's familiarity with the use of personal computers and the Internet have made the

Internet bank or Internet banking site easier, cheaper and more cost effective than ever

before. This paper discusses the coming of age of Internet banking, the opportunity for

Internet banking and some of the obstacles and procedures that must be followed in order

to develop a sound Internet banking presence.

Bradley & Stewart (2003) conducted a research in which they studied the factors

driving the adoption of internet banking. The financial services environment has been

subject to changes on many fronts. Technological change and the advent of the Internet

are among the most dramatic and challenging areas of change for the sector. This paper

looks at retail banking and its adoption of online banking, in particular the factors driving

and inhibiting adoption by banks. An international Delphi study confirms the high level

of importance of the Internet for retail banking. By 2011, it is expected that bank

adoption of the Internet will be near universal. The key factors that are driving banks to

adopt online banking are the adoption by other banks, competitive forces, consumer

demand and the availability of technology. Working against adoption are banks'

perceptions that the Internet does not offer enhanced ability to deal with customers as

well as bank resistance to change, their existing legacy systems and the resources

required to adopt.

Singh & Malhotra (2004) in their study found that the tremendous advances in

technology and the aggressive infusion of information technology had brought in a

paradigm shift in banking operations. The purpose of this paper is to help fill significant

gaps in knowledge about the Internet banking landscape in India. The paper presents

data, drawn from a survey of commercial banks websites, on the number of commercial

banks that offer Internet banking and on the products and services they offer. It

investigates the profile of commercial banks that offer Internet banking, using univariate

statistical analysis, relative to other commercial banks with respect to profitability, cost

26

efficiency, and other characteristics. By the end of first quarter, 2004, differences

between Internet and non-Internet banks had begun to emerge in funding, in sources of

income and expenditures and in measures of performance. It was also found that the

profitability and offering of Internet banking does not have any significant correlation.

Laukkanen & Tommi (2007) in their research aimed to compare customer perceived

value and value creation between internet and mobile bill paying service. A qualitative

in-depth interviewing design was applied in order to ascertain the factors that create value

perceptions in fund transfer service via personal computer and mobile phone. The

findings suggest that efficiency, convenience and safety are salient in determining the

differences in customer value perceptions between internet and mobile banking. The

findings of the qualitative study, being more depth than wide in nature, deserve to be

quantitatively measured in future studies in order to provide more generalized results.

The paper provides enhanced information for business managers about both positive and

negative customer value perceptions in internet and mobile banking. By understanding

how and what kind of value different service channels provide for customers service

providers are better enabled to create actions to enhance internet and mobile banking

adoption. The contribution of the paper lies in achieving a more profound understanding

on consumer value perceptions to internet and mobile banking. It expands the literature

on electronic and mobile commerce and on electronic banking especially.

Nandan et.al (2008) in his paper discusses the concept of Internet Banking, perception of

Internet bank customers, non-customers and issues of major concern in Internet banking.

The state of Internet banking in India has been explored using various concepts like E-

banking continuum, and gap analysis related to the various services and the security

features offered. In order to have a clear and focussed insight about the perceptions of

users (and non-users) about Internet banking a survey was conducted. The findings of the

survey provide valuable insights into concern for security, reasons for lower penetration,

and likeliness of adoption, which have been used to make useful recommendations.

27

Mishra & Kiranmai (2009) in their study found that information technology is

considered as the key driver for the changes taking place around the world. According to

Heikki, the transformation from the traditional banking to e-banking has been a 'leap'

change. The evolution of e-banking started from the use of Automatic Teller Machines

(ATMs) and telephone banking (tele-banking), direct bill payment, electronic fund

transfer and the revolutionary online banking. The future of electronic banking would be

more interactive i.e., TV banking. Finland is the first country in the world to have taken a

lead in e-banking. In India, ICICI Bank initiated e-banking services during 1997 under

the brand name 'Infinity'. It has been forecasted that among all categories, online banking

is the future of electronic financial transactions. The rise in e-commerce and internet in

enhancing online security transformation and sensitive information has been the core

reason for the penetration of online banking in everyday life. The shift towards the

involvement of the customers in the financial service with the help of technology,

especially internet, has helped in reducing costs of financial institutions as well as

clients/customers who use the service at anytime and from virtually anywhere with access

to an internet connection.

Uppal (2009) in his study found that in the post-LPG (Liberalization, Privatization and

Globalization) era and Information Technology (IT) era, transformation in Indian banks

is taking place with different parameters and the contours of banking services are

dynamically altering the face of banking, as banks are stepping towards e-banking from

traditional banking. On the basis of five-point likert-type scale, this paper empirically

analyzes the quality of e-banking services in the changing environment. With different

statistical tools such as weighted average method and ranking, the paper concludes that

most of the customers of e-banks are satisfied with the different e-channels and their

services, but the lack of awareness is a major obstacle in the spread of e-banking services.

The paper also suggests some measures to make e-banking services more effective in the

future.

Kuisma et.al (2006) conducted a research to identify the reasons for consumer resistance

to Internet banking. The special interest is to explore resistance among those bank

28

customers who already have valid contracts for Internet banking but prefer to pay their

bills via ATM. The objective is to identify those characteristics generating resistance to

Internet banking and their connections to values of individuals. In order to achieve the

objective, 30 Finnish bank customers were interviewed in-depth using the means-end

approach and the laddering interviewing technique. The findings indicate both functional

and psychological barriers arising from service-, channel-, consumer- and

communication-related means-end chains inhibiting Internet banking adoption. The

contribution of the paper lies in achieving a more profound understanding of consumer

resistance to Internet banking, and further, in offering suggestions and practical advice

for service providers' decision-making.

The perusal of review of literature revealed that the internet banking had been studied in

relation to various aspects like its adoption, growth, development and expectations of the

customers. But no study has been conducted in relation to the Net Banking service

provided by IndusInd Bank.

29

CHAPTER 3

NEED, SCOPE AND OBJECTIVES OF THE STUDY

30

NEED, SCOPE AND OBJECTIVES OF THE STUDY

3.1 NEED OF THE STUDY

After conducting a review of researches done by various professionals a gap have been

identified. The researchers had studied the aspects of internet banking, its introduction, its

development, adoption by the customers, consumers perception about this service, its

success and security related issues. But a very few researchers had studied the net

banking service with respect to the IndusInd Bank. This gap had been identified and it

had led to the present research being undertaken.

3.2 SCOPE OF THE STUDY

The area where the study has been conducted was Ludhiana.

3.3 OBJECTIVES OF THE STUDY

The current study was undertaken to achieve the following stated objectives:

1. To analyze awareness among customers using Net banking service.

2. To know about the Net Banking service provided by IndusInd Bank.

3. To know the cause why customers are using or not using Net banking service.

4. To the confidence of the customers of IndusInd Bank in using these services.

5. To study the popularity of the Net banking service among the customers of HDFC

Bank.

31

CHAPTER 4RESEARCH

METHODOLOGY

32

RESEARCH METHODOLOGY

Research is a common parlance which refers to search for knowledge. It is a procedure of

logical and systematic application of the fundamentals of science to the general and

overall questions of a study and scientific technique, which provide precise tools, specific

procedures, and technical rather philosophical means for getting and ordering the data

prior to their logical analysis and manipulating different type of research designs is

available depending upon the nature of research project, availability of manpower and

circumstances.

According to D. Slesinger and M. Stephenson research may be defined as “the

manipulation of things, concepts or symbols for the purpose of generalizing to extend,

correct or verify knowledge, whether that knowledge aids in the construction of theory or

in the practice of an art”. Thus it is original contribution to the existing stock of

knowledge of making for its advancement. In short, the search of knowledge through

objective and systematic method of finding solution to a problem is research.

4.1 RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of data in a

manner that aims to combine relevance to the research purpose with economy in

procedure. In fact, the research design is the conceptual structure within which research is

conducted. This research was descriptive in nature.

Descriptive research:

The research undertaken was a descriptive research as it was concerned with specific

33

predictions, with narration of facts and characteristics concerning net banking service

provided by IndusInd Bank.

4.2. SAMPLING DESIGN

The following factors have been decided within the scope of sample design:

4.2.1 Universe of study: Universe of the study means all the persons who are the

customers of IndusInd Bank in the world.

Theoretical: It covered all the individuals who are the customers of IndusInd

Bank in the world.

Accessible: It covered all the individuals who are the customers of IndusInd

Bank in India who are within our reach. In this study accessible population was

customers of IndusInd Bank in India.

4.2.2 Sample Size: A sample of minimum respondents was selected from various areas

of Ludhiana. An effort was made to select respondents evenly. The survey was carried

out on 100 respondents.

4.2.3 Sample Unit: In this project sampling unit consisted of the various individuals who

had their bank accounts with IndusInd Bank.

4.2.4 Sampling Technique: For the purpose of research convenient sampling techinque

was used.

4.2.5 Sampling Frame: It consisted of various sources from where information about the

respondent is extracted. Mainly personal links and employees of IndusInd Bank,

Ludhiana are used for getting information about the respondents.

4.3 DATA COLLECTION AND ANALYSIS

34

4.3.1 DATA COLLECTION

There were two types of data sources used in this research. These were

4.3.1.1. Secondary data

Secondary data is the data collected from already been use or published information like

journals, diaries, books, etc .In this research project, secondary source used were various

journals, and website of various online journals.

4.3.1.2. Primary data

Primary data is the data collected for the first time from the source and never have been

used earlier. The data can be collected through interviews, observations and

questionnaires. In this project, an appropriate questionnaire was designed which was

filled by the customers of IndusInd Bank to know their opinions regarding the Net

Banking service provided by IndusInd Bank.

4.3.2 DATA ANALYSIS

4.3.2.1 Tools Of Presentation:

It means what all tools are used to present the data in a meaningful way so that it

becomes easily understandable. In this research tables and graphs were used for

presenting the data.

4.3.2.2 Tools Of Analysis

In this research the tools of analysis used were percentages. SPSS software were used to

conduct Friedman Anova, Reliability analysis and Factor Analysis.

4.4 LIMITATIONS OF THE STUDY

The following were the limitations of the study:

35

1. Non representative sample: In this research project a sample survey was

conducted. A sample of 100 respondents was selected. So such sample size cannot

be said to be the true representative of the universe.

2. Shortage of time: The time period of study was very limited. It is very difficult to

have in detail study on project work due to limited time period. The period of 4 to

6 weeks is not enough for the proper study of the project.

3. Inadequate data: The data provided was not up to the mark due to which we

faced problems in our research.

4. Lack of scientific method: The lack of scientific training in methodology of

research was great impediment in our research program, which led to the delay of

research.

5. Biasness in the responses: The answers provided by the respondents suffer from

biasness.

6. Cost Factor: It was not possible to conduct extensive research due to paucity of

funds.

36

CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

37

DATA ANALYSIS AND INTERPRETATION

Statement 5.a Demographic Profile Of The Respondents

Table 5.a Demographic Profile of the Respondents

38

39

DemographicsNumber of

Respondents

Percentage Of

Respondents

Age:

Below 20 yrs

20 – 35 yrs

35 – 50 yrs

50 – 65 yrs

65 yrs and above

1

33

40

17

9

1 %

33 %

40 %

17 %

9 %

TOTAL 100 100 %

Qualification:

Undergraduate

Graduate

Post Graduate

5

65

30

5 %

65 %

30 %

TOTAL 100 100 %

Occupation:

Businessman

Housewife

Self Employed

Service

Student

Professional

32

7

17

27

4

13

32 %

7 %

17 %

27 %

4 %

13 %

TOTAL 100 100 %

Annual Income:

Less than Rs 2 Lakhs

Rs. 2 – 6 Lakhs

Rs. 6 – 10 Lakhs

Rs. 10 – 15 Lakhs

Rs. 15 – 20 Lakhs

Rs. 20 Lakhs and above

12

27

39

17

5

0

12 %

27 %

39 %

17 %

5 %

0 %

TOTAL 100 100 %

Analysis and interpretation:

From the data collected it was found majority of respondents that is 40%

belonged to the age of 35 to 50 years, followed by the age group of 20 to 35 years.

It was found that the majority of the respondents were graduates. It was found

that the majority of the respondents were from the business class followed by the

service class and self employed people. It was found that the majority of the

respondents fell between the income group of Rs 6 to Rs 10 lakhs, followed by

income group between Rs 2 to Rs 6 lakhs.

Thus it can be concluded that the majority of the respondents were knowledgeable

and were well informed about the banking services.

Statement 1: Time period since the IndusInd Bank’s services are being availed

Table 5.1 Time period since the IndusInd Bank’s services are being availed

Time Period Number of respondents Percentage of

40

respondents

Less Than 2 years

2 – 5 years

5 – 10 years

More Than 10 years

9

18

31

42

9 %

18 %

31 %

42 %

Total 100 100 %

Figure 5.1 Time period since the IndusInd Bank’s services are being availed


From the data collected, it can be that the majority of the respondents that is 42% of the

respondents have been IndusInd Bank’s customer for more than 10 years, followed by 5

to 10 years with 31% of respondents.

It can be concluded that the majority of the respondents have been IndusInd Bank’s

customer for more than 10 years.

Statement 2: Products and services of IndusInd Bank availed by the customers

Table 5.2: Products and services of IndusInd Bank availed by the customers

Products and services Number of respondents Percentage of respondents

41

Loans

Deposit Accounts

Credit Cards

Debit Cards

Forex Services

ATM

NRI Services

49

63

27

19

22

24

13

22.58 %

29.03 %

12.44 %

8.75 %

10.13 %

11.05 %

6.00 %

Total 217* 100 %

Figure 5.2: Products and services of IndusInd Bank availed by the customers

Analysis and interpretation

It was found that majority of the respondents that is 29% availed deposit accounts,

followed by loans, credit cards, ATM’s and forex services with 23%, 12%, 11% and 10%

respectively.

It can be inferred that that majority of the respondents availed the deposit accounts

among the various products and services offered by the IndusInd Bank.

* The total is more than sample size because of multiple responses.

Statement 3: Perception about the products and services offered by IndusInd Bank

Table 5.3: Perception about the products and services offered by IndusInd Bank

42

Perception Number of respondents Percentage of respondents

Lucrative

Non lucrative

Can’t say

80

5

15

80 %

5 %

15 %

Total 100 100 %

Figure 5.3: Perception about the products and services offered by IndusInd Bank

Analysis and interpretation

From the data collected, it was found that the majority of the respondents that is 85% said

that the products and services offered by IndusInd Bank were lucrative. While just 5% of

the respondents said that the products and services offered were non lucrative and the

remaining 15% were not able form any opinion.

It can be inferred that the majority of the felt that the products and services offered by

IndusInd Bank were lucrative.

Statement 4: Ways to access to IndusInd Bank

Table 5.4: Ways to access to IndusInd Bank

Ways Number of Respondents Percentage of

43

Respondents

Net Banking

Phone Banking

One View

ATM

Branch Network

Email Statement

Insta Alert

53

28

7

29

76

34

3

23.05 %

12.18 %

3.05 %

12.60 %

33.04 %

14.78 %

1.30 %

Total 230* 100 %

Table 5.4: Ways to access to IndusInd Bank


It was found from the data collected that 33% of the respondents accessed the bank

through Branch network. About 23% of the respondents accessed the bank through net

banking followed by email statements with about 15%. Marginally 1% and 3% of the

respondents used insta alert and one view to access the bank.

It was inferred that majority of the respondents accessed the bank through branch network.


Statement 5: Awareness regarding Net Banking Service provided by IndusInd Bank

Table 5.5: Awareness regarding Net Banking Service provided by IndusInd Bank

44

Awareness Number of respondents Percentage of respondents

Yes

No

96

4

96 %

4 %

Total 100 100 %

Table 5.5: Awareness regarding Net Banking Service provided by IndusInd Bank


From the data collected it was found that majority of the respondents that is 96% were

aware of the net banking service provided by IndusInd Bank while just 4% of the

respondents were not aware of the same service.

It was concluded that majority of the respondents of the respondents were aware of the

net banking service.

Statement 6: Accessibility of Net Banking Facility provided by IndusInd Bank

Table 5.6: Accessibility of Net Banking Facility provided by IndusInd Bank

45

Accessibility Number of respondents Percentage of respondents

Yes

No

81

19

81 %

19 %

Total 100 100 %

Figure 5.6: Accessibility of Net Banking Facility provided by IndusInd Bank


Of the data collected it was found that about 81% of the respondents had accessed the net

banking service provided by the IndusInd Bank while 19% of the respondents said that

they had not accessed the same.

It can be inferred that the majority of the respondents had availed the net banking service.

Statement 7: Net Banking services of IndusInd Bank availed

Table 5.7: Net Banking services of IndusInd Bank availed

Services Number of Percentage of

46

respondents respondents

View accounts balances & statements

Transfer funds between accounts

Create Fixed Deposit online

Request a demand draft

Pay bills

Order a cheque book

Request stop payment on a cheque

44

32

8

5

29

16

11

30.39 %

22.07 %

5.51 %

3.44 %

20.00 %

11.03 %

7.56 %

Total 145* 100 %

Figure 5.7: Net Banking services of IndusInd Bank availed


It was found that the majority of the respondents that is 30% of the respondents used the

net banking service for viewing accounts and balances, followed by 22% and 20% of the

respondents who availed the same for transferring the funds between accounts and for

paying the bills respectively. Marginally 3% of the respondents used the same service to

request a demand draft.

It can be inferred that the majority of the respondents used the net banking service

provided by IndusInd Bank to view their accounts and balances.


Statement 8: Reasons for which Net Banking service should be availed

Table 5.8: Reasons for which Net Banking service should be availed

47

Reasons Mean Rank Ranks

Convenience 3.12 1

Curiosity 5.07 7

Low cost 4.41 5

Quick service 3.33 2

Maintenance 3.46 3

Safety 4.48 6

User friendly 4.13 4 1 being the most important and 7 being the least important


Scores are significantly different on The Friedman two way ANOVA test (p<0.001) for

the listed 7 reasons due to which Net Banking service should be availed. The first rank

being the most important was given to convenience and the last rank that is 7 was given

to curiosity.

It can be concluded that majority of the respondents regarded convenience as the most

important reason for which Net Banking service should be availed and curiosity as the

least important reason for the same.

Statement 9: Frequency of using the Net Banking service in a month

Table 5.9: Frequency of using the Net Banking service in a month

48

Frequency Number of respondents Percentage of respondents

Less than once

1 to 3 times

3 to 8 times

8 to 15 times

More than 15 times

28

39

10

4

0

34.56 %

48.14 %

12.34 %

4.96 %

0 %

Total 81 100 %

Figure 5.9: Frequency of using the Net Banking service in a month


It was found that the majority of the respondents that is 48 % used the Net Banking

service one to three times in a month while 35 % said that they used the same service less

than once in a month. None of the respondents said that they availed the same facility

more than 15 times in a month.

It can be inferred that the majority of the respondents availed the Net Banking service

one to three times in a month.

Statement 10 : Difficulties faced while using the Net Banking service of IndusInd Bank

Table 5.10 : Difficulties faced while using the Net Banking service of IndusInd Bank

Difficulties Number of Percentage of

49


Logging in to your account

Making transactions

Safety issues

Unable to understand webpages

Regularly changing the IPIN and Password

9

27

32

6

7

11.11 %

33.33 %

39.50 %

7.40 %

8.64 %

Total 81 100 %

Figure 5.10 : Difficulties faced while using the Net Banking service of IndusInd

Bank


It was found that the majority of the respondents that is 40% said that safety issues was

the major difficulty that they faced while using the Net Banking service, followed by

34% of the respondents who felt that making transactions with the bank through Net

Banking was difficult. However, 8% of the respondents faced difficulty in understanding

the webpages and 7% of the respondents felt that changing the IPIN and Password

regularly was difficult.

It was inferred that the majority of the respondents regarded the safety issues as the major

difficulty that they faced while using the Net Banking service.

Statement 11: Frequency of visiting the IndusInd Bank branch

Table 5.11: Frequency of visiting the IndusInd Bank branch

Frequency Number of respondents Percentage of respondents

50

Everyday

Alternate days

Once in a week

Twice in a month

Thrice in a month

Twice in a week

Once in a week

21

26

18

9

5

14

7

21 %

26 %

18 %

9 %

5 %

14 %

7 %

Total 100 100 %

Figure 5.11 Frequency of visiting the IndusInd Bank branch


It was found that the majority of the respondents that is 26% said that they visited the

bank branch every alternate day, followed by 21% of the respondents who visited the

bank everyday. Only 5% of the respondents visited the bank branch thrice in a month.

It can be inferred that the majority of the respondents said that they visited the bank

branch every alternate day.

Statement 12: The main reason for which the bank branch is typically visited

Table 5.12: The main reason for which the bank branch is typically visited

Reasons Number of Percentage of

51


To make a deposit

To get a advice for investment purpose

To inquire about a balance

To withdraw a cheque

To order a cheque book

To transfer funds between accounts

31

13

7

23

15

11

31 %

13 %

7 %

23 %

15 %

11 %

Total 100 100 %

Figure 5.12: The main reason for which the bank branch is typically visited


It was found that the majority of the respondents that is 31% said that the main reason of

visiting the bank is to make a deposit, followed by 23% who said that they visited the

bank branch typically to withdraw a cheque. Of the total only 7% and 11% of the

respondents visited the bank to inquire about a balance and to transfer funds between

accounts respectively.

It can be inferred that the majority of the respondents said that the main reason of visiting

the bank is to make a deposit.

Statement 13: Agreement regarding Net Banking service being better than traditional

banking

52

Table 5.13: Agreement regarding Net Banking service being better than traditional

banking

Agreement Number of respondents Percentage of respondents

Yes

No

64

36

64 %

36 %

Total 100 100 %

Figure 5.13: Agreement regarding Net Banking service being better than traditional

banking


Of the data collected it was found that the majority of the respondents that is 64%

respondents agreed that net banking is better than the traditional banking while 36% of

the respondents disagreed with the statement.

It can be inferred that the majority of the respondents felt that the net banking service was

better than traditional banking.

Statement 14: Reasons due which Net Banking service is not popularly used

Table 5.14: Reasons due which Net Banking service is not popularly used

53

Reasons Mean Rank Rank

Net banking web pages are confusing 4.40 5

Use of computer or internet is difficult 4.53 6

Neither friends nor relatives use internet 4.03 4

Net banking facility is not secured 3.43 2

It is more expensive than going to a branch 4.76 7

Net banking offers no receipts on payments 3.28 1

Net banking is not reliable 3.57 3

1 being the most important and 7 being the least important


Scores are significantly different on The Friedman two way ANOVA test (p<0.001) for

the listed 7 reasons due to which Net Banking service is not popularly being used. The

Net banking offers no receipts on payments was ranked first that is the most important

reason while it is more expensive than going to a branch was given the last rank that is

seven.

It can be concluded that the majority of the respondents regarded that the most important

reason for which Net Banking service is not being used popularly was that it does not

offer receipts on payments and the least important reason was that it is more expensive

than going to a branch.

Statement 15: Raters agreement

Reliability Statistics

54

Table 5.20.1: Cronbach's Alpha

Cronbach's Alpha N of items

0.716 10

Table 5.20.2: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .725

Bartlett's Test of

SphericityApprox. Chi-Square 248.386

Df 45

Sig. .000

Table 5.15.3: Total Variance Explained

ComponentInitial Eigenvalues

Total % of Variance Cumulative %

1 3.116 31.157 31.157

2 1.723 17.226 48.382

3 1.080 10.798 59.181

4 .992 9.922 69.103

5 .783 7.827 76.930

6 .686 6.859 83.788

7 .525 5.254 89.043

8 .465 4.648 93.691

9 .369 3.690 97.381

10 .262 2.619 100.000

Table 5.15.4: Component Matrix

55

COMPONENT

1 2 3

Convenience .822 -.294 .050

Safety .748 -.369 -.069

Functionality .685 -.375

Necessity .781 -.193 -.207

Language .461 .383 -.163

Physical .396 .499 .467

Access .556 -.061 .649

Trans_costs .190 .345 .219

Service .207 .677 -.419

Safety_feature .210 .695Extraction Method: Principal Component Analysis.

a. 3 components extracted.

Table 5.15.5: Rotated Component Matrix

COMPONENT

1 2 3

Convenience .836 -.079 .242

Safety .826 -.100 .086

Functionality .712 .317 -.065

Necessity .820 .123 .050

Language .302 .509 .188

Physical .054 .280 .737

Access .371 -.241 .734

Trans_costs .226 .390

Service .823

Safety_feature -.085 .622 .366

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

56

Table 5.14.6: Factor Analysis

Variables Statements Factor Loadings

ConvenienceNet Banking is easy and

convenient to use..836

Safety

Transactions conducted through

Net Banking are safe and

secure.

.826

FunctionalityThe web pages function

properly..712

NecessityNet Banking service is a

necessity..820

Language

The website pages are available

in the languages you

understand.

.509

Physical

Net Banking facility reduces

the frequency of customer’s

visit to a physical bank.

.737

AccessAccess to accounts 24x7 is

important to you..734

Trans_costsThe transaction costs are lesser

in case of Net Banking service..390

Service

Net Banking service provided

by IndusInd Bank is better than

the online services provided by

others banks.

.823

Safety_feature

IndusInd Bank is taking

adequate steps to check the

security of its customers.

.622

57

Table 5.15.7 Service Quality

Factor Label Statements Factor Loadings

Service Quality

Net Banking is easy and

convenient to use..836

Transactions conducted through

Net Banking are safe and secure..826

The web pages function

properly..712

Net Banking service is a

necessity..820

Table 5.15.8: Adequate Mechanism


Adequate Mechanism

The website pages are available

in the languages you understand..509

Net Banking service provided by

IndusInd Bank is better than the

online services provided by

others banks.

.823

IndusInd Bank is taking

adequate steps to check the

security of its customers.

.622

Table 5.15.9 Accessibility

58


Accessibility

Net Banking facility

reduces the frequency of

customer’s visit to a

physical bank.

.737

Access to accounts 24x7 is

important to you..734

The transaction costs are

lesser in case of Net

Banking service.

.390


The factor analytic methodology had been used to analyze the net banking service based

on responses received from the 100 respondents to the survey questionnaire. The cache of

factor analytic methods is quite a rich and rigorous one. The Principal Components

Analysis (PCA) had been used to explore and confirm the inter-relatedness between the

occurrences of variables pertaining to net banking.

The correlation matrix of the ten variables on net banking had been subjected to the PCA.

It provided a set of components, which explained variances in descending order of total

variance of a set of variables pertaining to a domain of variables under study.

Theoretically, it extracted as many components as is the number of variables.

The number of principal components to be retained has been decided based on Kaiser’s

criterion of Eigen value>1 and Bartlett’s test. The Bartlett’s test of significance led to

acceptance of ten significant principal components.

The PCA with varimax rotation method has been used to maximize the sum of squared

loading of each factor extracted in turn. It explained more variance than the loadings

obtained from any other method of factoring. The factors loaded by variables having

significant loadings of the magnitude of 0.40 and above have been interpreted.

59

The scales of measurement were tested using Cronbach α reliability test. Cronbach α was

0.5, which is satisfactory level of construct validity. The correlations between the factors

were then examined which revealed the existence of correlation between certain factors.

This perusal suggested the use of factor analysis to investigate any distinct underlying

factors and to reduce the redundancy of certain barriers indicated in the correlation

matrices. Principal Component Analysis was chosen as the method of extraction in order

to account for maximum variance in the data using minimum number of factors.

The default solution (eigen values>1) resulted in extraction of four factors.

The factor 1 variables, convenience, safety, functionality, necessity are labeled as

“Service Quality”. Factor 2 was named as “Adequate Mechanism” including: language,

service and safety feature variables. Factor 3 was named as “Usability” including

physical, access and trans cost.

60

CHAPTER 5

FINDINGS OF THE STUDY

61

FINDINGS OF THE STUDY

The findings of the study were as follows:

1. The majority of the respondents have been IndusInd Bank’s customer for more

than 10 years.

2. The majority of the respondents availed the deposit accounts among the various

products and services offered by the IndusInd Bank.

3. The majority of the felt that the products and services offered by IndusInd Bank

were lucrative.

4. The majority of the respondents accessed the bank through branch network.

5. The majority of the respondents of the respondents were aware of the net banking

service.

6. The majority of the respondents have availed the net banking service.

7. The majority of the respondents used the net banking service provided by

IndusInd Bank to view their accounts and balances.

8. The majority of the respondents regarded convenience as the most important

reason for which Net Banking service should be availed and curiosity as the least

important reason for the same.

9. The majority of the respondents availed the Net Banking service one to three

times in a month.

10. The majority of the respondents faced the safety issues was the major difficulty

that they faced while using the Net Banking service.

11. The majority of the respondents said that they visited the bank branch every

alternate day.

12. The majority of the respondents said that the main reason of visiting the bank is to

make a deposit.

13. The majority of the respondents felt that the net banking service was better than

traditional banking.

14. The majority of the respondents regarded that the most important reason for

which Net Banking service is not being used popularly was that it does not offer

62

receipts on payments and the least important reason was that it is more expensive

than going to a branch.

15. The majority of the respondents agreed that net banking is convenient and safe to

use and felt that transaction costs are lesser in case of net banking service. While

majority of the respondents disagreed that net banking facility reduces the

frequency of customer visits to a physical bank.

63

CHAPTER 7

CONCLUSION

64

CONCLUSION

7.1 CONCLUSION

The introduction of new technology has been changing the attire of banking. The brick

and mortar banking is slowly giving place to click of the mouse banking. Technology is

aiding globalization and integration of financial markets across the globe. Customer’s

expectations for new products and alternatives delivery channels have been rising. Banks

are under pressure to offer today, what customers would be expecting tomorrow. Thanks

to innovations and spread of new technology, banks today offer the customer a choice to

conduct his business across the counter, over phone or via a computer. The Rangarajan

Committee (1988) report is the first step for the introduction of computers. The Saraf

Committee (1994) on Technology issues relating to payments, cheques clearing and

securities settlements made several recommendations to improve the quality of service.

The introduction of new instruments such as ATM, retail Electronic Funds Transfer

(EFT) and Electronic Clearing Services (ECS) have all helped in developing an effective,

efficient and speedy payment and settlement systems.

In literature, the major emphasis have laid on significant innovation and investment is

under way that could lead to very rapid expansion in fully electronic business to business

and consumer to consumer payments in near time. While the pace of change in these

market makes it difficult to determine, eventually these innovations will generate

substantial effeciencies in retail payment system. Bank regulators are paying significant

attention to appropriate risk management of new technology. Evidence reveals a sense of

urgency about the adoption of new technology and reflects substantial competitive

pressure to act quickly.

The objective of the study was to study was to comprehend the Net Banking service

provided by IndusInd Bank. The research was descriptive in nature. The universe of the

study was the customers of the IndusInd Bank. The survey was carried out on 100

respondents. In this research for data analysis tools used were tables and graphs. Majority

65

of the respondents were aware of the Net Banking service provided by the bank and

availed the various services offered through net banking. Majority of the respondents felt

that net banking facility have enabled the customers to perform various banking

transactions online. It is hoped that the survey findings will have some useful

applications.

7.2 RECOMMENDATIONS

Following are the recommendations of the study:

1. The bank should make some efforts to familiarize the customers to various

services through demonstrations.

2. The bank should adopt more upgraded techniques to make their customer feel

more secure while accessing their accounts.

3. Effective awareness campaigns should be undertaken by the banks to make their

customers more aware of net banking service.

4. The bank should make a effort to provide a platform from where the customers

can access different accounts at single time without extra charge.

5. The bank should take steps to create a trust in mind of customers towards security

of their accounts.

6. The IndusInd Bank should introduce more services which can be accessed

through Net Banking like advice on investment, TDS, etc.

66

IndusInd Bank.doc

Documents

Transcript of IndusInd Bank.doc