CHAPTER:1

INTRODUCTION
 INTRODUCTION
Online banking is also known as Internet banking, is an electric payment system that
enables customers of a bank or other financial institutions conduct a range of financial
transactions through the financial institutions. The popularity of internet banking , the
internet banking system will typically connect to or be part of the core banking system

operated by a bank and is in contrast to branch was the traditional way customers
accessed banking services. Internet banking software provides personal and corporate
banking services offering features such as viewing account balances, obtaining statements,

checking recent transactions and payments . Access is usually through a secure website
using a username and password , but security is a key consideration in internet banking
and many banks also offer two factor authentication.

Internet banking ,virtual banking, is an electronic payment system

that enables customers of a bank or other financial institutions to conduct a range of
financial transactions through the financial website. The electronic banking business is
transforming banking business. It is also your personal banking services on the internet
banking protected with bank identifier. Internet banking provide to easy customer to use
1. To study about customers preference of internet banking .
OBJECTIVES OF THE STUDY
2. To find out important reason for choosing internet banking.
3. To understand the most preferable media for internet banking of SBI customers.
4. To understand which type of customer prefer internet banking.
5. To find out cost of operating internet banking.
6. To understand the problem faced in the internet banking.

METHODOLOGY
The necessary data required for the study is collected from the primary sources. The
information is collected from the SBI customers. The data are collected through interview
with SBI customers and also depends on other external sources like books, journals, net
sources etc.
SOURCE OF DATA
PRIMARY DATA
Primary data are those which are collected a fresh and for the first time and those happens
to original in character, primary data have major in this research . In this research
questionnaires were used for collecting primary data.
 SCOP OF THE STUDY

In this study has been made to analyze popularity of internet banking an analytical
study with special reference to SBI customers.
1. This study tries to understand popularity of internet banking.
2. To study the various problems faced in the internet banking.
3. The study the major limitations of the internet banking.
4. To understand the various facilities of internet banking to its customers.

IMPORTANCE OF THE STUDY

Internet banking has been regarded as the most important way to reduce cost and
maintain or enhance services for customers. The banking institutions aim to use
internet banking as a tool to lower operational cost , improve banking services to
the customers retain them and expand the customers base.

LIMITATION OF THE STUDY

PERIOD OF THE STUDY
The time is granted for the data collection of the project work is termed as the period
of study . The period considered for the purpose of the study was two week.

SECHEME OF THE STUDY

1 Chapter 1 : Introduction
2 Chapter 2 : Literature review and theoretical framework
3 Chapter 3 : Data analysis and interpretation
4 Chapter 4 : Summary , findings ,suggestions and conclusions
5 Chapter 5 : Appendix
 CHAPTER:2

LITERATURE REVIEW AND

THEORETICAL FRAMEWORK
 WHAT IS INTERNET BANKING
• 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 . The biggest
advantage of internet banking is that people can expand the services setting at home, to
transact business. Due to which the account holder does not have to personally visit the
bank with the help of internet banking many transactions can be executed by the account
holder when small transactions like balance inquiry , record of recent transactions e t c . are
to be processed, internet banking facility prove to be very handy the concept of internet
banking has thus become a revolution in the field of banking finance.

• Since its growth in popularity in the late 1990’s internet banking has
attracted attention of both academics practitioners resulting in an extensive research quest
to seek an understanding of how and why individuals choose to adopt or to resist internet
banking consequently , a dominant part of internet banking literature has focused on the
demand aspect or the process by which adoption or rejection occurs. This research stream
has been studied through holistic and quantitative casual models and theories from
 Internet banking behavior literature can be categorized in to two main levels of
conceptualization . The first approach attempts to understand internet banking behavior
through the lenses of adoption and diffusion theories. They postulated that internet
banking attitudes towards the use, intention to use and postulated that internet banking.

HISTORY OF INTERNET BANKING

The internet banking is rapidly turning out to the tool of world wide communication.
The increasing use of the internet earlier promoted procedures and entrepreneurs to sell
their products online. Many banking and finance organizations have come up with the idea
of internet banking or online banking. The concept of internet banking has been
simultaneously evolving with the development of the word wide web. Programs working on
banking data basis came up with ideas for online banking transactions , sometimes, during
the 1980’s. The creative process of development of these services where probably sparked
off after many companies started the concept of online shopping. The first online banking
services united states was introduced in October 1994. The service was developed by
INTERNET BANKING ISSUES

For carrying out banking transactions through the internet, the one needs to have some
basic knowledge about the number of people willing to avail the facility many people who are
comfortable with computers and the internet find it difficult to use this service. Therefore online
banking can be time consuming for the beginners. Moreover some people find it difficult to
trust a completely mechanized system for carrying their financial transactions. In many instances
a simple mistake like checking a wrong button, many individuals continue to worry and wonder
if they have properly executed the transactions while availing the online banking facility.
However this uneasiness can be avoided by printing the transactions receipt and keeping it with
oneself, until the bank statement is received. While banking through the internet you have to
careful about the security of your internet bank account. The security of your account depends
to a great extent to the security of your computer an For carrying out banking transactions
through the internet, the one needs to have some basic knowledge about the number of people
willing to avail this facility many people who are not comfortable with computers and the
internet , find it difficult to use this services . Therefore online banking can d the password.
 FEATURES OF INTERNET BANKING

1. A bank customers can perform non transactions task through online banking includes;
a. Viewing account balances.
b. Viewing recent transactions.
c. Downloading bank statements.
d. Viewing images of paid cheques.
e. Ordering cheque books .
2. Bank customers can transact banking tasks through online banking includes;
a. Fund transfers between the customers linked accounts.
b. Paying third parties including bills payments and third party fund transfers.
c. Investment purchase or sales.
d. Credit card applications.
e. Register utility billers and make bill payments.
3. Financial institutions administration.
4. Management of multiple users having varying level of authority.
5. Transactions approval process.

BENEFITS OF INTERNET BANKING

The biggest advantage of internet banking is the convenience you can use any advise with
internet access for your bank activities. Phones, laptops, desktop and tablets anything. Bank
after a wide range of services payment of bill, transfer of money, checking account transactions
2. You can make transactions at any time you need not even worry about Sunday’s or other
holidays your
account is accessible ( 24 * 7).
3. You can use any device with internet access for your bank activities phones, laptops,
desktops, and tablets.
4. Bank offer a wide range of services payments of bills, transfer of money, checking account
transactions
via the internet.
ADVANTAGE OF INTERNET BANKING
1. Online account is simple to open and easy to operate.
2. It also acts as a great medium for the banks to endorse their products and services. Its
includes loan invest options and money others.
3. Internet banking is fast and efficient.
4. It is available all the time ( 24 * 7).
5. Through internet banking you can keep an eye on your transactions and account balances all
the time.
6. Find get transferred from one account to other account very fast.

DISADVANTAGES OF INTERNET BANKING

1. Understand the usage of internet banking might be difficult for a bigginer at the first go.
1. Shilpan Vyas(2012), in the paper “Impact of E-banking on traditional banking services”,
attempts to introduce terms like e-banking by giving its meaning, functions, types,
advantages and limitations. More importantly it attempts to show the impact of e-banking
on traditional services and finally documents the result . The researcher discuss the impact
of –banking on traditional services by focusing on the fact that e-banking transactions are
much cheaper than branch or even phone transactions . This is turn could turn yesterdays
advantage of a large branch network in to a comparative disadvantage allowing e-banks to
undercut brick and mortar banks. This is called the “beached dinosaur” theory. The paper is
based only on secondary data. Use primary data would have added to the effectiveness of
the paper.
2. Dr. Sofri Yahya et al(2009), in the case study “internet banking in Hyderabad-Issues and
Prospects” has collected primary data from 200 respondents from Hyderabad which is an
equal mix of people working in the banking sector and also the non banking group. The case
study finding reveal that respondents who had banking background and banking knowledge
showed high levels of internet banking usage ,cost factor was not highly related to internet
banking and awareness and availability of services and technology benefits has a positive
impact on the acceptance of online banking technology.
3. R. Bhavani et al(2008),in the article “Online Banking – A paradigm shift ” have discussed the
features of internet banking and given a brief description about the working of internet
banking. Finally, they have discussed security aspects and suggested some remedies. They
have also highlighted the advantages and disadvantages of internet banking. The articles
concludes that “the implementation of this technology seems to be relatively easy in
developed economies, but not so in the developing economies ”. The article is based on only
secondary data and not backed by primary data.

4. Manoj Kumar Joshi(2008),in the article “Internet Banking Authentication – The need of the
hour”, concludes that “internet banking has become a cost – effective and convenient means
for carrying out banking transactions in the present times. However, the rise in the theft of
private and confidential customer data through a variety of software and hardware techniques
has necessitated reliable authentication of data ”. The article explains customer authentication
with emphasis on single factor and two factor authentication. The author discusses different
forms of fraud and the role of banks and financial institutions to provide customer better
security and confidentiality. The study is not supported by primary data and based on
secondary data.
5. Nagesh (2007),